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Noble v. Dunn

United States Court of Appeals, District of Columbia Circuit

July 17, 2018

David W. Noble, Jr., Appellant
William M. Dunn, Jr., et al., Appellees

          Argued February 22, 2018

          Appeal from the United States District Court for the District of Columbia (No. 1:94-cv-00302)

          Virginia W. Hoptman argued the cause for appellant. With her on the briefs was Jerome A. Madden.

          Peter D. DeChiara argued the cause for appellees. With him on the brief were Nicholas R. Femia, Keith R. Bolek, and Victoria L. Bor. Brian Powers and Bruce H. Simon entered appearances.

          Before: Henderson and Katsas, Circuit Judges, and Randolph, Senior Circuit Judge.

          Karen LeCraft Henderson, Circuit Judge.

         For nearly twenty-five years David W. Noble, Jr. has pressed his claims against the now-former leadership of the National Association of Letter Carriers (NALC or Union). A decade ago one of our colleagues urged an end to "this 14-year litigation odyssey." Noble v. Sombrotto (Sombrotto II), 525 F.3d 1230, 1242 (D.C. Cir. 2008) (per curiam) (Kavanaugh, J., concurring in part and dissenting in part). But as in the original Odyssey, there was still a ten-year ordeal to endure-and Noble's arguments, like Penelope's tapestry, have tended to unravel.

         Federal law requires labor unions to operate transparently and as fiduciaries of their members. This litigation is about Noble's claims that his Union has violated those requirements by failing to comply with document requests and by permitting its officers to enrich themselves beyond the salaries permitted by the Union constitution. Even after our 2008 remand, however, Noble failed to give the district court reason to rule for him; he meets with no greater success on appeal.

         I. Background

         Noble was a letter carrier and NALC member for many years before he became an employee at the Union's Washington, D.C. headquarters. He became troubled by the senior leadership's use of Union resources: they collected per diem pay during the Union's annual D.C. convention even though they lived in the area year-round; they also collected monthly reimbursements for undocumented expenses; and the Union reimbursed them for Medicare and Social Security withholdings.

         In February 1994, after unsuccessfully asserting his claims through the Union's internal procedures, Noble filed a complaint in district court against NALC's then-president and nine other officers under the Labor-Management Reporting and Disclosure Act ("LMRDA"), 29 U.S.C. § 401 et seq. Noble later added the Union itself as a defendant. Noble alleged that the officers had breached their fiduciary duties by granting themselves tax reimbursements, unjustified per diem payments and undocumented expense allowances, all in violation of section 501 of the LMRDA. Noble further alleged that the officers had wrongly refused his requests to inspect certain Union financial records, in violation of section 201 of the LMRDA. After more than a decade of litigation, the district court held a bench trial and entered judgment for the Union and its officers. Noble v. Sombrotto (Sombrotto I), No. 94-302, 2006 WL 2708796, at *1 (D.D.C. Sept. 20, 2006).

         Noble appealed and, in May 2008, we affirmed in part and vacated in part. See Sombrotto II, 525 F.3d at 1242. We upheld the judgment for NALC on Noble's claims regarding the officers' per diem payments and tax-withholding reimbursements. At the same time, however, we held that the district court had erred in two ways.

         First, we concluded that the district court erroneously dismissed Noble's section 501 fiduciary duty claim related to the officers' undocumented expense reimbursements. The district court's dismissal of that claim was based on the clearly erroneous finding that there was "no evidence" to support Noble's allegations of impropriety. But "Noble presented ample circumstantial evidence that officers were using the allowance for personal use," that is, the officers were foregoing significant tax savings by failing to document their claimed expenses. Id. at 1236. When officers submitted receipts to document their spending, they were entitled to reimbursement; when they simply requested reimbursement without documentation, they were credited up to $500 a month in taxable income. Id. The record evidence showed that most of the officers did not substantiate their expenses, preferring, they claimed, to avoid the hassle of keeping track of receipts and itemizing their reimbursement requests. Id. We concluded that the district court had given short shrift to Noble's argument that the officers would have submitted receipts and received reimbursement-instead of taxable income-had their expenses been legitimate. Id. ("The officers had a direct financial incentive" to substantiate expenses because "each officer could easily have avoided a substantial additional tax liability by keeping and submitting receipts for legitimate union-related expenses he or she incurred each month.").

         Second, we could not determine the factual basis for the district court's finding that Noble's section 201 claim was moot. According to the district court, Noble had already been given access to all Union documents he had requested, there were no outstanding section 201 issues to resolve and the claim was therefore moot. Id. at 1241. Noble argued that holding was clearly erroneous. Id. Because we concluded the district court had failed to explain how it had ...

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