Union members can sue for ‘complete relief,’ top court says

Union members alleging harm by their colleagues need not exhaust the organization’s internal dispute procedures but can head straight to court if money damages are unavailable under the union’s process, Maryland’s top court has held.

The Court of Appeals’ decision affirms a jury’s award of $425,000 in a defamation action filed by a Maryland Transit Administration dispatcher against the his union local and its president.

The Baltimore jury found William T. Lovelace Jr. had been defamed by false rumors he had stolen money and “had to go” as the local’s treasurer. The defamatory statements cost him any shot to win re-election in 2010, Lovelace said.

Amalgamated Transit Union Local 1300 and its president, David A. McClure, had argued on appeal that Lovelace was required to use the union’s internal procedures before heading to court. Those procedures would have provided a public forum in which Lovelace could have fought the allegations and restored his good name in time for the 2010 election, they argued.

But the Court of Appeals said the inability to collect money damages under the union’s constitution would deny Lovelace the “complete relief” he could achieve through the courts.

“Lovelace sought compensatory and punitive damages for his defeat in the 2010 election, reputational injury, pain and suffering, and emotional distress,” Judge Sally D. Adkins wrote for the court. “[W]e hold that when a union member claims that his union and a fellow union member are liable for defaming him and seeks monetary damages, if the union’s internal remedies do not provide monetary damages, they are inadequate and the union member is not required to exhaust them.”

Labor-law professor Marley Weiss said the court’s decision was correct but a close call in favoring a union member’s right to pursue a personal injury claim for money damages over the union’s valid desire to have its internal processes followed.

“Unions have the right to control their own internal election procedures up to a certain extent,” said Weiss, who teaches at the University of Maryland Francis King Carey School of Law.

But “the bigger issue is is it appropriate for the union to preclude the member from going forward” with a lawsuit, added Weiss, a former associate general counsel at the United Auto Workers. The issue in Lovelace’s case “was correctly decided give the way the issues were framed” at the Court of Appeals, she added.

Lovelace’s attorneys, Paul F. Evelius and Jason R. Potter, said their client is “satisfied with the result. He was defamed.” Evelius and Potter are with Wright, Constable & Skeen LLP in Baltimore.

John M. West, attorney for the union and McClure, declined to comment on the decision. West is with Bredhoff & Kaiser PLLC in Washington, D.C.

The decision affirmed a reported Court of Special Appeals opinion that a Baltimore jury validly decided that McClure acted with reckless disregard for the truth in spreading rumors about Lovelace.

In May 2012, the jury awarded Lovelace compensatory damages of $335,000 and $90,000 in punitive damages. Of the punitive damages, the union was found liable for $82,500 and McClure was liable for $7,500.

Prior to the trial, a Nov. 29, 2011, summary judgment ruling by the Baltimore City Circuit Court found it was “undisputed that [Lovelace] has never stolen from the union.”

At trial, Lovelace claimed McClure had made more than two dozen slanderous statements to union members and officials, starting in 2007. Lovelace said McClure wanted him out of office because of their frequent disagreements about how the union should be managed.

When the union held its elections for officers in June 2010, he did not win re-election. Lovelace’s lawsuit, filed that September, blamed the defamatory statements for the loss.

At trial, McClure denied disparaging Lovelace. But Lovelace presented 15 witnesses who had heard McClure accuse Lovelace of stealing, the Court of Special Appeals noted in affirming the judgment in 2013.

The union and McClure then sought review by the Court of Appeals, which heard argument Nov. 10 and affirmed on Wednesday.

Judge Shirley M. Watts, in a concurring opinion, said the high court’s decision should have been broader.

A union member should not have to exhaust a union’s internal procedures if they are inadequate to resolve the claim, regardless of whether monetary damages are sought, Watts wrote in the concurrence, which Judge Robert N. McDonald joined..

The court’s sole dissenter, Judge Glenn T. Harrell Jr., said Lovelace was required to use the union’s internal processes much as a civil litigant must exhaust a state agency’s administrative process before filing suit.

“In cases such as this one, where a union and Maryland courts have a sort of concurrent jurisdiction over a dispute that, at its heart, arises from an internal union affair, union members should first exhaust their own processes,” Harrell wrote. “Requiring resort first to the internal processes might have resolved creatively and satisfactorily what would otherwise blossom into contentious claims. If union members decide to bring a suit after the internal process has been exhausted, reviewing courts would have the benefit of the union’s ‘take’ on the claims.”

Chief Judge Mary Ellen Barbera and judges Lynne A. Battaglia and Clayton Greene Jr. joined Adkins’ majority opinion.

The case is Amalgamated Transit Union Local 1300 and David A. McClure v. William T. Lovelace, Court of Appeals No. 25, September Term 2014.