Noble v. Sombrotto

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 26, 2007 Decided May 16, 2008

No. 06-7170

DAVID W. NOBLE, JR.,
APPELLANT

v.

VINCENT R. SOMBROTTO, PRESIDENT, NATIONAL
ASSOCIATION OF LETTER CARRIERS, ET AL.,
APPELLEES

Appeal from the United States District Court
for the District of Columbia
(No. 94cv00302)

Bernadette C. Sargeant argued the cause and filed the briefs
for appellant.

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

Before: SENTELLE, Chief Judge, KAVANAUGH, Circuit
Judge, and WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed PER CURIAM.
 2

Separate opinion concurring in part and dissenting in part
filed by Circuit Judge KAVANAUGH.

Separate opinion concurring in part and dissenting in part
filed by Senior Circuit Judge WILLIAMS.

PER CURIAM: David W. Noble, Jr., is a member and former
employee of the National Association of Letter Carriers
(“NALC” or the “union”). In 1994 he brought suit against
Vincent R. Sombrotto, then president of the union, as well as
eleven other union officers, accusing them of violating their
fiduciary duties under § 501(a) of the Labor-Management
Reporting and Disclosure Act (“LMRDA”), 29 U.S.C. § 401 et
seq. He later joined the union itself as an additional defendant.

Noble alleged that the officers had directed union funds to
their personal benefit in three ways: (1) an unmonitored
“in-town” expense allowance; (2) union reimbursement of the
employee portion of the officers’ Federal Insurance
Contributions Act (“FICA”) taxes; and (3) unnecessary “per
diem” payments made during the union’s biennial National
Conventions. By way of relief, he sought an accounting from
the officers and the recovery by the union of all unlawful
expenditures. He also sought the release of certain financial
documents under § 201(c) of the LMRDA, 29 U.S.C. § 431(c).

After a bench trial, the district court dismissed all of
Noble’s claims. Noble v. Sombrotto, No. 94-302, slip op.
(D.D.C. Sept. 20, 2006). The court held that the various
payments to the officers had been properly authorized under the
union’s constitution and internal procedures, and therefore could
not have violated § 501(a). Id. at 15-19. It also dismissed
Noble’s § 201(c) claim as moot. Id. at 20-21.
 3

We reverse the district court’s judgment as to the expense
allowance program and vacate its dismissal of Noble’s § 501(a)
claim on this issue. We affirm the district court’s dismissal of
Noble’s § 501(a) claims on the FICA reimbursements and the
per diem payments. Finally, because we cannot identify the
factual basis for the district court’s mootness finding, we vacate
its dismissal of his § 201(c) claim.

I. Background

In 1959, Congress passed the Landrum-Griffin Act, also
known as the Labor-Management Reporting and Disclosure Act
(“LMRDA”) to protect against misuse of union funds by corrupt
union officials. See, e.g., Tile, Marble, etc. v. Ceramic Tile
Finishers Union Local 25, 972 F.2d 738 (7th Cir. 1992).
LMRDA’s § 501(a) makes union officers fiduciaries of union
funds and commands that they keep and use those funds solely
for the benefit of the organization and its members. It also
forbids unions from adopting provisions or resolutions
purporting to absolve union officials for breaches of these
duties. LMRDA’s § 501(b) gives union members a private right
of action to sue officers in breach of their fiduciary duties in
federal or state court to recover damages on behalf of the labor
organization. LMRDA’s § 201(c) requires unions to make
available to their members all information the organizations are
required to file with the Secretary of Labor. That section also
provides a private cause of action by which members may
compel the union to allow them to inspect records necessary for
the members to verify the accuracy of a union’s report.

The National Association of Letter Carriers (“NALC” or the
“union”) is a labor union that represents approximately 300,000
active and retired letter carriers of the U.S. Postal Service.
NALC is governed by a constitution which may be amended by
majority vote of its biennial National Convention. NALC’s
 4

constitution provides for the union to be administered by an
Executive Council, whose power is secondary only to that of the
National Convention, and gives the council authority to “act
between Conventions on all matters related to the welfare of the
Union not specifically prohibited by the membership.” NALC
Const. art. 9, § 11(e) (1992) (The relevant sections of the
constitution have been renumbered over time; for the sake of
convenience we use the 1992 numbering throughout unless
noted otherwise.). The Executive Council is made up of 28
union officers, including 10 “Resident Officers” (including the
President), 15 “National Business Agents,” and 3 “Trustees.”
The Executive Council has explicit authority to act between
Conventions to “authorize and/or ratify the payment of salaries,
wages, expenses, allowances, and other disbursements which it
deems necessary and appropriate to the purpose and functioning
of this Union, other than provided for.” Id. § 11(e)(3).

Following the 1992 National Convention, appellant David
W. Noble, Jr., then a union employee as well as a longtime
union member, became aware of various union expenditures
authorized by the Executive Council that redounded to its
members’ personal benefit. Conducting his own investigation,
Noble determined that union officials had longstanding practices
of taking $500 monthly expense allowances without providing
any supporting documentation justifying such payments; that
NALC officers were accepting per diem during meetings of the
National Convention even if they incurred no personal expenses;
and that the council had decided to reimburse their members for
their share of Social Security and Medicare taxes withheld from
their NALC paychecks. Noble also found records from past
conventions revealing that union officials who had been
challenged by union members on some of these practices had
given misleading responses, leaving union members under the
incorrect impression that the accusations were inaccurate.
 5

Noble filed internal charges against the NALC officers on
August 16, 1993, by hand-delivering his accusations to union
president Vincent Sombrotto. Sombrotto immediately
suspended Noble from his job without pay, after which Noble
returned from his long-term leave from the U.S. Postal Service
to work as a letter carrier. In accordance with the NALC
constitution, Sombrotto called for a five-member investigating
committee to investigate Noble’s charges and report to a special
meeting of the NALC convention. The investigating committee,
constituted of NALC members who were not members of the
Executive Council, rejected Noble’s attempts to participate in
the investigation by attending investigatory meetings and calling
witnesses, and denied his request to receive a copy of its report
in advance of the special convention. After conducting its
investigation, which confirmed that Noble’s complaints were
based in fact, the investigating committee presented its findings
to the special convention on October 13, 1993.

At the meeting, the investigating committee reported that
the $500 monthly “in-town” expense allowance was a
longstanding practice dating to the 1950s. Similarly, it reported
that officers’ receipt of per diem during convention weeks was
both longstanding and justified by a ban on reimbursement for
other expenses incurred during that period. The committee also
found that NALC was reimbursing officers and staff for their
share of Social Security taxes because those members were
simultaneously required to pay into the Civil Service Retirement
System (“CSRS”). Delegates to the special convention roundly
rejected each of Noble’s charges of wrongdoing by an average
margin of 25 to 1.

On February 17, 1994, Noble filed suit against Sombrotto
and eleven other NALC officers alleging that they had breached
their fiduciary duties to the union in violation of 29 U.S.C.
§ 501(a) by (1) authorizing a monthly “in-town” expense
 6

allowance without requiring that expenses be documented;
(2) authorizing union reimbursement for the officers’ employee
portion of their FICA taxes; and (3) collecting per diem
payments far in excess of their actual expenses during NALC’s
biennial National Conventions. Noble sought recovery of all
unlawful expenditures from the officers named in his complaint
on behalf of the union. Further, Noble brought a claim under
LMRDA § 201(c), alleging that he had been denied financial
documentation necessary to verify NALC’s annual financial
reports.

During the subsequent regular National Convention in 1994,
NALC membership rejected proposed amendments that would
have (1) limited per diem payments to full-time officers during
convention weeks, (2) limited the Executive Council’s power to
authorize salaries and benefits for elected officers, and (3) would
have governed future instances when all members of the
Executive Council were charged simultaneously. During the
1996 convention, proposed amendments to limit the Executive
Council’s authority to set wages and benefits and limit their
receipt of per diem payments during conventions met the same
fate. The 1996 National Convention, however, passed a
resolution that approved and confirmed the constitutionality of
the $500 “in-town” expense allowance for NALC officers,
payment of officers’ half of FICA taxes, and payment of per
diem to officers during National Convention meetings at the
same rate as that paid to other delegates. This resolution
received 88% of the nearly 4,500 votes cast.

The district court held a bench trial on Noble’s claims on
April 13 and 14, 2004. On September 30, 2005, the court issued
a memorandum opinion and order dismissing Noble’s case with
prejudice. Noble subsequently filed a motion to alter or amend
the district court’s judgment, but the district court denied
Noble’s motion and on September 20, 2006, issued its final
 7

opinion and order entering judgment in favor of the union
officials. Noble, slip op. at 20–21. Noble appeals the district
court’s dismissal of his three claims under LMRDA § 501(a)
and his § 201(c) claim.

II. Standard of Review

Our decision in Monzillo v. Biller, 735 F.2d 1456 (D.C. Cir.
1984), requires that we defer to “an interpretation of a union
constitution rendered by officials of a labor organization . . .
unless the court finds the interpretation was unreasonable or
made in bad faith.” Id. at 1458.1 We give even greater
deference to the union officials’ interpretation when, as here, a
union convention has approved the officers’ interpretation of the
union constitution because such approval “undermines a finding
that the [officers’] interpretation was unreasonable and made in
bad faith.” Id. at 1464. We review de novo the district court’s
conclusion that the union officials’ interpretation of the
constitution was reasonable, and we exercise clearly erroneous
review over the district court’s factual findings.

III. In-Town Expense Allowance

Noble’s first challenge is to the dismissal of his claim that
appellees violated LMRDA § 501(a) by authorizing an “expense
allowance” for NALC’s Resident Officers. The Executive
Council passed resolutions authorizing these payments in 1975,
1977, and 1980, pursuant to its authority under NALC Const.
art. 9, § 11(e)(3), to cover the expenses NALC officers residing

1
An interpretation that conflicts with the “stark and
unambiguous language” of the union’s constitution is ordinarily
unreasonable. Loretangeli v. Critelli, 853 F.2d 186, 194-95 (3d Cir.
1988). Conversely, an interpretation that accords with the plain
language of the union constitution is ordinarily reasonable.
 8

in Washington, D.C. incurred in the performance of their official
duties. The 1980 resolution noted that these officials were
expected to incur “transportation, entertainment, and other
expenses for the benefit of the [union] in the Washington, D.C.
Metropolitan Area,” and it allowed them to draw “up to $500.00
each month as an allowance for official in-town expenses.”
Resident Officers and Staff In-Town Expense Allowance
Resolution (Dec. 8, 1980). Sombrotto, as president, was
reimbursed for “all official expenditures made by him, both in
town and out of town.” To claim their allowance for a month’s
expenses, the officers did not need to submit itemized receipts.
Instead, the resolution deemed any request for reimbursement as
itself a representation that “the sum requested was expended on
behalf of [NALC] in the course of performance of official
duties.” The resolution did, however, require officers to
personally keep their receipts for a “reasonable period” of up to
five years. NALC reported all reimbursements not documented
by receipts as part of the officers’ taxable income. Noble, slip
op. at 5.

Noble argues that the officers’ participation in the expense
allowance program violated their duty under 29 U.S.C. § 501(a)
to manage union funds “in accordance with [the union’s]
constitution and bylaws.” Executive Council members receive
salaries that are specified in the NALC constitution and thus
beyond the council’s power to control, NALC Const. art. 9, §§
1-10, and Article 6 provides that “[i]n addition to their salaries,
all elected officers [i.e., Executive Council members] shall be
entitled to reimbursement of all itemized expenses legitimately
incurred in conduct of the affairs of the Union.” Id. art. 6, § 1.
Additionally, Article 11 makes it the duty of a three-member
Fiscal Committee to “examine all bills submitted for payment
and, if found to be correct, to approve them and authorize
payment to be made,” noting that “[a]ll bills shall be itemized.”
Id. art. 11, § 2(b). On this basis, Noble argues that the Executive
 9

Council had no authority to relax the constitution’s itemization
and documentation requirements. The district court disagreed,
finding as reasonable the Executive Council’s interpretation of
Article 9, § 11(e) and (e)(3) as authorizing the expenditures, and
buttressing this conclusion by observing that Noble had
presented no evidence “that the in-town expense allowance was
utilized by Resident Officers for purely personal reasons,
unrelated to union business.” Noble, slip op. at 17.

While we agree with the district court’s finding that the
NALC constitution was ambiguous on this point, id. at 16, we
must reverse the court’s dismissal of Noble’s claim on this issue
because a key factual finding underlying its conclusion that the
interpretation was reasonable was clearly erroneous. Though
NALC Const. art. 6, § 1 expressly entitles all elected union
officers to obtain reimbursement of itemized expenses, that
minimum entitlement does not unambiguously prohibit the
council from providing additional payment for expenses or
allowances. Neither Article 6, § 1 nor Article 11, § 2(b)
unambiguously requires a contrary interpretation. Thus, it was
not improper for the district court to use Monzillo’s more
deferential standard of review in evaluating the reasonableness
of the NALC Executive Council’s interpretation of their
authority to authorize the expenses.

Nonetheless, in finding the Executive Council’s repeated
authorization of the “in-town” expense allowance reasonable,
the district court relied on a clearly erroneous factual finding:
that Noble produced “[n]o evidence” that officers had used the
allowance for “purely personal reasons, unrelated to union
business.” Noble, slip op. at 17. To the contrary, Noble
presented ample circumstantial evidence that officers were using
the allowance for personal use. The officers had a direct
financial incentive to keep receipts for all union-related
expenses because any difference between their documented
 10

expenses and the $500 per month allowance amount was
reported as taxable income. Thus, 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. Additionally, the 1980 Executive
Council resolution authorizing the challenged allowance
specifically charged each officer with retaining receipts for all
expenses incurred and to keep them for a “reasonable period” of
up to five years. The fact that the vast majority of allowances
paid to Executive Council members during the pertinent period
were not supported by receipts is thus considerable
circumstantial evidence suggesting that much of this money
went to officers’ personal use.

The district court may have been under the misapprehension
that proof of personal use may only be made by direct evidence.
Under circumstances closely analogous to those before us, the
Second Circuit did imply a requirement of direct proof for such
an allegation in Morrissey v. Curran, 650 F.2d 1267, 1283–84
(2d Cir. 1981). There, the Second Circuit rejected for
insufficient evidence a district court’s finding “that all of the
weekly allowances paid to the officers were used for their
personal expenses” supported by the fact that the officers lacked
receipts showing the expenses were made for union business.
Id. Though Morrissey is unclear on whether those union
officers were under an obligation to retain receipts as the NALC
officers were here, if the Second Circuit has indeed adopted a
requirement that allegations of personal use are susceptible of
proof only by direct evidence, then we must part ways with our
sister circuit on this point. A union member complaining of
personal use of union funds by its officers will hardly ever be
able to put on direct proof of such use unless an officer
confesses to such. Here, Noble presented about as much
evidence as one could hope a § 501 plaintiff could gather—that
the union had disbursed far more funds for purportedly union-
 11

related expenses than officers responsible for the payments
could account for. On remand, the district court must reach the
issue of how the union’s money was actually used, weighing
Noble’s circumstantial evidence of misuse against any evidence
the officers present to the contrary.

We note as well that the district court’s memorandum
opinion made no mention of Noble’s evidence of bad faith
regarding the “in-town” expense allowance. The evidence
Noble presented showing that NALC presidents twice
misleadingly denied the allowance’s existence when challenged
on the issue at National Conventions is troubling. While the
district court need not specifically reference all contrary
evidence in its factual findings, see Schilling v. Schwitzer-
Cummins Co., 142 F.2d 82 (D.C. Cir. 1944), some mention of
this evidence would have been welcome here. On remand, we
would refer the district court to our decision in United States v.
DeFries, 129 F.3d 1293 (D.C. Cir. 1997), which suggests that
courts should closely scrutinize self-serving courses of conduct
when union officers conceal vital information from union
members. See id. at 1307 (holding that when union executive
committee concealed information on challenged severance
payments from its members, it was not “reasonable to say that
the severance payments were ‘authorized’” despite union bylaws
expressly empowering the executive committee to set its own
compensation).

Finally, two of the appellees purport to be outside the scope
of § 501 for the purposes of this claim. William M. Dunn, Jr.,
and Robert W. Vincenzi received their expense allowances and
FICA reimbursements not from NALC itself, but from other
corporate entities affiliated with NALC (the Mutual Benefit
Association and the Health Benefit Plan, respectively). The
officers argue that Dunn and Vincenzi cannot be held liable
under § 501(a), which concerns only the use of union funds, and
 12

that as to them we should affirm the judgment on this alternative
ground regardless of our resolution as to the other defendants.
The district court found that the Mutual Benefit Association and
the NALC Health Benefit Plan were “separate and distinct”
from NALC. Slip. op. at 13-14. Noble does not appeal this
finding, which makes it conclusive on remand. See, e.g.,
Kimberlin v. Quinlan, 199 F.3d 496, 500 (D.C. Cir. 1999). But
because the district court neither explained the scope of its
factual finding nor drew from it any legal conclusions, and
because the degree of separation necessary to avoid § 501’s
application is itself uncertain, compare Yager v. Carey, 910 F.
Supp. 704, 728 (D.D.C. 1995), with Morrissey, 650 F.2d at
1284, and Hood v. Journeymen Barbers Int’l Union, 454 F.2d
1347, 1351-54 (7th Cir. 1972), no final determination of this
special defense is appropriate at this time. The district court
should resolve this issue on remand.

IV. Reimbursement of FICA Payroll Taxes

Noble’s second challenge is to the union’s reimbursement
of the officers’ FICA payroll taxes. In December 1980, the
Executive Council decided to reimburse all full-time officers
and staff for each employee’s share of FICA taxes, which is
comprised of an employee’s mandatory Social Security and
Medicare contributions. The Council made this expenditure
under the authority of NALC Const. art. 9, § 11(e)(4) (1980),
which authorized the council to “establish such benefits as may
be required to attract and retain competent personnel, including
but not limited to annuity, welfare, vacations, holidays,
severance pay, tuition or scholarship, and insurance benefits.”
The council took this action because all union staff and officers,
even while working away from their letter carrier positions with
the U.S. Postal Service, were required to pay a fixed percentage
of their income into CSRS. CSRS-covered employees did not
then contribute into, nor were covered by, Social Security. By
 13

law, Social Security retirement benefits are only payable to
those who have paid a minimum amount into the system for at
least ten years. See 42 U.S.C. § 414. Thus, when letter carriers
took full-time positions with the NALC, they found themselves
compelled to pay into two different retirement systems—one of
which, unless they remained in NALC’s employ for ten years or
had held another job that paid into Social Security, might never
provide them any benefits.

The district court found that Article 9, § 11(e)(4) provided
the Executive Council with authority to make this
reimbursement an employment benefit, reasoning that the move
satisfied that constitutional provision’s intent of attracting and
retaining competent personnel by “lessen[ing] the financial
burden on individuals who chose to hold appointed or elected
position within NALC.” Noble, slip op. at 17–18. Here, as
below, Noble challenges this reimbursement as a violation of
NALC’s constitution, which fixes the salaries that each
Executive Council member receives.

We cannot say that the Executive Council’s “interpretation
conflicted with the stark and unambiguous language of the
constitution.” Loretangeli, 853 F.2d at 194–95. Because the
Executive Council’s interpretation of the constitution permitting
the FICA tax reimbursement as a benefit under Article 9,
§ 11(e)(4) was neither unreasonable nor made in bad faith, the
district court properly deferred to that interpretation. Where, as
here, the union constitution explicitly incorporates policy
concerns into the Board’s grant of authority by directing the
Board to establish benefits as “required to attract and retain
competent personnel,” a given benefit’s wisdom as a policy
matter is germane to the Board’s constitutional authority to
authorize it. We see no reason to disturb the district court’s
dismissal of this claim.
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V. Per Diem Expenses During National Conventions

Noble’s remaining § 501(a) claim concerns the payment of
“per diem” allowances to Executive Council members during
meetings of the biennial National Convention. NALC provides
daily expense allowances to a small group of attendees at the
Conventions to cover lost wages, hotel rooms, meals, and
incidentals. (In 2002, for example, the allowance was $420 per
day, based on $166.93 for lost time, $158.48 for hotels, and
$94.59 for meals and incidentals.) The officers Noble named in
this suit attended every Convention ex officio and received per
diem payments despite the fact that they lost no wages by
attending and frequently stayed in free or reduced-rate rooms at
the hotels hosting the Conventions. Noble alleges that the
officers’ acceptance of these per diems violated § 501 because
they took union funds as “reimbursements” for expenses they
did not actually incur. Noble further alleges that Convention
delegates were misled as to the nature of the payments and that
the officers gained Convention approval of their per diem
payments without adequate disclosure.

The NALC Const. art. 13, § 2 provides that “[p]er diem
shall be paid to each officer as the National Association, while
in session, may direct” and Article 11, § 6 directs that “[t]he
Committee on Mileage and Per Diem shall compute and report
to the National Convention the name, residence, and amount due
each member eligible for mileage and per diem.” The district
court found that in 1964 a majority of Convention delegates
voted to dispense with the reading of the individual payees and
substituted a procedure by which the Mileage and Per Diem
Committee provided the Convention a summary report of the
total per diem allowance per eligible delegate for each day.
Noble, slip op. at 19. The district court found that this practice
had continued ever since. Id.
 15

While we take no view on the propriety of per diem
payments made to delegates other than Executive Council
members which were approved by this summarized procedure,
we do not find the Executive Council members’ acceptance of
payments in this way to be clearly contrary to NALC’s
constitution. Reading Article 11, § 6 as clearly and
unambiguously prohibiting payments of per diem to Executive
Council members during the Convention without their names
and payment amounts having been read aloud to Convention
delegates would flatly conflict with Article 13, § 2. The 1980
and 1992 versions of NALC’s constitution explicitly state at
Article 13, § 2 that “[p]er diem shall be paid to each officer as
the National Association, while in session, may direct.” The
1992 NALC constitution lists as “officers” all 28 members of
the Executive Council—and no one else. Thus, Article 13, § 2
appears to direct per diem payments to the very group Noble
accuses of having violated § 501 by accepting them. We
certainly cannot say that NALC’s constitution unambiguously
forbade them from receiving per diem if their names and
addresses were not read aloud.

Thus, NALC officials’ interpretation of their constitution as
authorizing their acceptance of per diem payments via this
summarized approval procedure is owed deference unless shown
unreasonable or in bad faith. In determining reasonableness, a
district court may consider the union’s consistent past practices,
see Conley v. Parton, 116 L.R.R.M. (BNA) 3071, 3075–76
(N.D. Ind. 1984). We agree with the district court that the
Executive Council’s reliance on past practice and a plain
language reading of other provisions in NALC’s constitution as
authorizing per diem payments to Executive Council members
without having read their names aloud to the Convention was
reasonable and entitled to deference.
 16

We further find no merit to Noble’s argument that
Convention delegates were “misled” about the nature of
payments or uninformed that the officers would receive full per
diem payments. The total per diem was a set figure and Noble
concedes that, even under the streamlined procedure followed
through 1992, the Convention was informed of the total per
diem amount determined by the Mileage and Per Diem
Committee. Combining that information with a basic reading of
NALC’s constitution would alert delegates that Executive
Council officers were receiving those sums, even if no names
were read aloud to the Convention delegates. Thus, we cannot
say that the district court erred by finding both the summarized
procedure and the officers’ acceptance of per diem payments
during Convention meetings neither unreasonable nor in bad
faith.

VI. President Sombrotto’s Failure To Report

While it is unclear in his brief, Noble may have attempted
to renew an argument he made below that President Sombrotto
personally violated § 501(a) by failing to report his official
actions to the biennial Convention in accordance with NALC
Const. art. 9, § 1(k). In the district court, Noble specifically
complained that Sombrotto should have reported his approval of
the Executive Council resolutions authorizing the in-town
expense allowance and FICA reimbursements to the
Convention. The district court found that:

[A]lthough Art. 9, § 1(k) requires that the President “shall
submit at each Convention a written report of all his/her
official acts during his/her term of office,” the Executive
Council resolutions at issue in this case were official acts
of the Executive Council, not the President. Therefore,
NALC’s interpretation of its Constitution that it does not
require such reporting of resolutions is reasonable.
 17

Noble, slip op. at 21–22. We agree with the district court’s
reasoning and affirm its dismissal of this claim.

VII. Noble’s “Manifest Unreasonableness” Argument

Noble argues that even if the in-town expense allowances,
FICA reimbursements, and per diem payments were fully
authorized, the officers violated their fiduciary duties under
§ 501(a) by personally enriching themselves with union funds.
Noble urges this Court to adopt the Second Circuit’s approach,
such that “where a union officer personally benefits from union
funds, a court in a § 501(b) suit may determine whether the
payment, notwithstanding its authorization, is so manifestly
unreasonable as to evidence a breach of the fiduciary obligation
imposed by § 501(a).” Morrissey, 650 F.2d at 1274. The
defendants ask us to reject the Second Circuit’s standard,
quoting legislative history of the LMRDA to the effect that
compliance with the constitution means that the officers did not
breach their duties.

We have not yet given precise content to § 501’s fiduciary
duties, cf. Mallick v. Int’l Bhd. of Elec. Workers, 749 F.2d 771,
780-81 (D.C. Cir. 1984), nor have the parties exhausted the
possible tests that could be employed—or even those proposed
by the Second Circuit, see Morrissey, 650 F.2d at 1274-75
(suggesting that courts apply “judicial scrutiny of the
reasonableness and fairness of the transaction . . . at least as
rigorous as that undertaken when the fiduciary is a corporate
director who has an interest in the challenged transaction”). But
we need not decide these questions here. Noble relies solely on
his proposed “manifestly unreasonable” standard, which as he
presents it, imposes liability on union officers when they
approve their receipt of excessive benefits, significantly above
a fair range of reasonableness.” Noble Br. 30 (emphasis added)
 18

(quoting Morrissey, 650 F.2d at 1275); see also Noble Reply Br.
16 & n.4 (contesting the reasonableness of the amounts
involved). As to the FICA reimbursements and the per diem
payments, however, Noble has failed to show that the payments
were outside the kinds and amounts of payments that are
generally reasonable in the ordinary course of union officers’
activities. They represented at most a small percentage increase
in the total compensation of the officers, which was not itself
excessive. Thus the payments, if authorized, did not violate
§ 501 on Noble’s own theory. (Noble suggests obscurely that
§ 501 may impose broader limitations on self-dealing without
respect to amount, a possibility he does not develop in any detail
and on which we express no opinion.)

As to the in-town expense allowances, the district court will
resolve on remand whether the officers used any portion of the
allowances for their personal benefit rather than on legitimate
union expenses. If so, it would be unnecessary for us to decide
whether their actions also violated other duties under § 501. If
not, then the officers received no personal benefit that we could
review for manifest unreasonableness. The outcome of the
remand will moot the issue either way.

VIII. Claim for Release of Documents Under § 201(c)

Finally, Noble brings a claim under § 201(c) for the release
of documents relevant to verifying the union’s annual financial
reports. The district court dismissed this claim as moot, stating
that “[d]uring the course of this case, plaintiff has been given
access to all of the pertinent NALC records. Further, he no
longer contends that he is being denied access to any documents
necessary to verify an annual financial report. Therefore, this
claim is moot and is dismissed.” Noble, slip op. at 20-21.
Noble contends that the factual findings underlying this ruling
are clearly erroneous.
 19

A case is moot if the judgment, regardless of which way it
goes, “will neither presently affect the parties’ rights nor have a
more-than-speculative chance of affecting them in the future.”
Pharmachemie B.V. v. Barr Labs., Inc., 276 F.3d 627, 631 (D.C.
Cir. 2002) (quoting Clarke v. United States, 915 F.2d 699,
700–01 (D.C. Cir. 1990)). By contrast, a holding that the
plaintiff lacks legal entitlement to his requested relief is plainly
a resolution of the merits. See In re Papandreou, 139 F.3d 247,
255 (D.C. Cir. 1998). Because the district court characterized
its holding as resting on mootness alone, we read the opinion as
stating that Noble has been given everything he asked for and
can be offered no further relief—not that his requests are
unfulfilled but meritless.

While the district court had previously identified “genuine
issues of material fact regarding which documents were
requested by plaintiff as well as what responsive documents
were provided,” Noble v. Sombrotto, 260 F. Supp. 2d 132, 146
(D.D.C. 2003), the record does not reveal any basis for its later
finding that Noble’s requests had been fulfilled. The court did
note in its findings of fact that Noble had made document
requests in a letter to Sombrotto, that the union had contested his
right to access but “nonetheless[] made available to plaintiff
copies of NALC records relevant to his charges,” and that Noble
“inspected documents on October 7, 1993.” Noble, slip op. at 9.
But the source the court cites for the proposition that the
defendants made copies available—Letter from Vincent R.
Sombrotto to David W. Noble, Jr. (Aug. 31, 1993), Defs’
Ex. 7—makes clear that even the defendants did not claim to
have provided everything Noble sought. Thus there is no
indication whether NALC made available to Noble the many
documents whose relevance was contested between them, which
is what a finding of mootness requires. Nor is it clear which
documents Noble was able to review on October 7, 1993.
 20

Noble did contend before the district court that he had been
denied documents that were relevant to verifying the union’s
annual reports, Pl.’s Am. Proposed Findings of Fact 30, 42, and
he alleged a variety of document requests made to NALC, not
all of which had been fulfilled, id. at 29 & nn.103-04, 30 &
n.105; see also Pl.’s Exs. 28, 31. In a supplemental filing to this
Court, Noble identified nine categories of documents listed in a
September 14, 1993 request which he claims never to have
received from the union, including records from a union bank
account in Minneapolis.

The defendants reply that NALC “produced thousands of
pages of financial and other documents to plaintiff,” Sombrotto
Supplemental Resp. 4, but they do not claim that Noble has
received the particular documents he has identified, such as the
Minneapolis bank records. Instead, the defendants argue two
propositions unrelated to mootness: (1) that Noble failed to
establish just cause to obtain the documents, which is a
necessary element of a § 201(c) claim; and (2) that Noble
forfeited his claim to any further documents by failing to request
them properly in the course of discovery on his § 501(a) claims.

Because we cannot identify the factual basis for the district
court’s mootness determination, we cannot affirm it, even under
the deferential standard of clear error. Cf. 19 Moore’s Federal
Practice-Civil § 206.03[6]. Moreover, because the district court
has passed on neither the merits of Noble’s claim nor the
forfeiture issue, we decline to reach these alternative grounds.
Rather, we vacate the dismissal of Noble’s § 201(c) claim and
leave these questions, as well as the factual determination of
what (if any) records Noble has requested but not yet received,
to be resolved on remand.
 21

IX. Conclusion

For the aforementioned reasons, we affirm the judgment as
to the FICA reimbursements, per diem payments, and President
Sombrotto’s non-disclosure but reverse the judgment as to the
in-town expense allowances and as to the § 201(c) claim and
vacate the dismissal of each. The case is remanded for further
proceedings.

So ordered.
 KAVANAUGH, Circuit Judge, concurring in part and
dissenting in part: I would reject all of Noble’s § 501 claims,
affirm the District Court’s § 501 judgment, and end this 14-
year litigation odyssey.

Section 501(a) of the Labor-Management Reporting and
Disclosure Act provides that union officers “occupy positions
of trust” and that it is the officers’ duty “to manage, invest,
and expend” the union’s money and property “in accordance
with its constitution and bylaws.” 29 U.S.C. § 501(a). A
union member such as Noble may sue a union officer for
alleged violations of § 501(a) in order “to recover damages or
secure an accounting or other appropriate relief” – but only
“for the benefit of the labor organization.” § 501(b)
(emphasis added). Under § 501(b) of the LMRDA, postal
union member Noble filed suit against postal union officers;
he claimed that the officers misinterpreted and violated the
union constitution in granting themselves various payments
and benefits.

In my judgment, this case turns on the nature of the
judicial role in § 501 disputes. Our precedents and the
statutory text and structure establish a basic principle of
judicial restraint in these cases. When a union member sues
union officers under § 501 and alleges that they violated the
union constitution, we have held that the reviewing court
owes “considerable deference” to the officers’ interpretation
of the constitution; we uphold their interpretation unless it is
“unreasonable or made in bad faith.” Monzillo v. Biller, 735
F.2d 1456, 1458 (D.C. Cir. 1984). Of particular importance
here, we afford even greater deference to union officials when
the union convention has approved the officers’ interpretation
of the union constitution; we have said that union approval
“undermines a finding that the [officers’] interpretation was
unreasonable and made in bad faith.” Id. at 1464. This is the
same kind of rule that applies to analogous shareholder
derivative actions where it is a “settled proposition that
 2
shareholder ratification by a majority of the disinterested
shareholders acts as a safe harbor in situations where
directors’ potentially conflicting self-interests are at issue.
Thus, in a classic self-dealing transaction the effect of a fully-
informed shareholder vote in favor of that particular
transaction is to maintain the business judgment rule’s
presumptions.” Solomon v. Armstrong, 747 A.2d 1098, 1115
(Del. Ch. 1999) (internal citation omitted); see also Sample v.
Morgan, 914 A.2d 647, 663 (Del. Ch. 2007).

The critical point in this case, therefore, is the following:
On two occasions, the union convention, which under the
union constitution is the union’s “supreme body,”
overwhelmingly voted against Noble’s claims and approved
the officers’ challenged payment practices. Art. 1, § 4. At a
Special Convention, 95 percent of approximately 2,000 voting
union members specifically rejected the merits of Noble’s
allegations. A few years later, by a vote of nearly 90 percent
of approximately 4,500 voting union members, the National
Convention adopted a resolution affirmatively approving the
officers’ payment practices and confirming that they properly
exercised their authority. Because the union approved its
officers’ interpretation of the union constitution, the federal
courts have limited authority under our precedents to upset
that interpretation, at least absent an unusual or egregious set
of facts.

In this case, the officers’ interpretation of the constitution
was at least reasonable – which no doubt is why the union
twice overwhelmingly approved their interpretation. As to
each of the three issues Noble raises, his contrary reading of
the constitution is debatable at best. Noble certainly cannot
find the kind of unambiguous constitutional language that,
under our precedents, would justify a decision by Article III
 3
judges to override the union conventions’ twice-considered
judgment of what is in their best interests.

First, contrary to Noble’s idiosyncratic views, the union
constitution did not unambiguously prohibit the Executive
Council from authorizing reimbursement of un-itemized in-
town expenses; in fact, it permitted the Executive Council to
“authorize . . . the payment of . . . expenses, allowances, and
other disbursements which it deems necessary and appropriate
to the purpose and functioning of this Union, other than
provided for.” Art. 9, § 11(e)(3). Noble seems to equate any
un-itemized expense reimbursement or allowance with a
prohibited salary increase, but the constitution simply does
not say that. Moreover, un-itemized expense reimbursements
or allowances are hardly so uncommon as to raise an
inference of an under-the-table “salary increase,” at least if
the reimbursements are reasonable in amount, as they were
here. To be sure, un-itemized expense accounts sometimes
result in windfalls and uncertain tax complications, but they
also can save both the employer and employee from
burdensome administrative paperwork, which is why they can
make sense when the amounts in question are relatively
minimal. That likely explains why an overwhelming
percentage of the rank-and-file voting union members had no
problem with the officers’ in-town expense reimbursements
and voted to approve them.

Second, contrary to Noble’s argument, the union
constitution did not unambiguously bar reimbursement of
officers’ FICA taxes; in fact, it authorized the Executive
Council to “establish such benefits as may be required to
attract and retain competent personnel.” Art. 9, § 11(e)(4).
Noble’s strained interpretation would treat many “benefits” as
prohibited salary increases, largely erasing the constitution’s
clear distinction between salary and benefits. Under Noble’s
 4
interpretation, for example, an increase in health insurance
benefits for the officers would amount to a prohibited salary
increase. But the union constitution says no such thing. So
too with respect to reimbursement of FICA taxes. The
decision to pay the FICA taxes was entirely reasonable,
moreover, because it avoided the “double taxation” that some
officers otherwise would face with respect to their retirement
benefits as a result of their participation in the Civil Service
Retirement System.

And third, contrary to Noble’s submission, the union
constitution did not unambiguously prohibit officers’
acceptance of per diems during the National Conventions; in
fact, it stated that “[p]er diem shall be paid to each officer as
the National Association, while in session, may direct.” Art.
13, § 2. The per diems were reasonable in amount, moreover,
particularly given that union officers went “off expenses”
during convention week, meaning that they otherwise were
not reimbursed for out-of-pocket expenses.

To be sure, Noble offers a plausible interpretation of the
somewhat convoluted constitutional language on these three
issues, and he may have a good policy argument why union
officers should have been even more tightly monitored. But
the officers’ interpretation of the constitutional language is
not unreasonable and is nowhere near the kind of egregious
interpretation that would warrant a judicial override of the
union’s overwhelming approval of the officers’ interpretation.
I do not agree, moreover, with Noble’s contention that the
union votes somehow constituted unlawful “exculpatory
resolutions.” See 29 U.S.C. § 501(a). As the District Court
rightly concluded, the union votes did not excuse prior
constitutional violations; rather, they reflected the union’s
conclusion that no violations had ever occurred.
 5
Finally, for the reasons already explained, the payments
in question also were not otherwise “manifestly
unreasonable,” even assuming that formulation qualifies as a
separate test for § 501 claims. Cf. Morrissey v. Curran, 650
F.2d 1267, 1274 (2d Cir. 1981).

I would affirm the judgment of the District Court on the
§ 501 issue. I join all but Parts III and IX of the per curiam
opinion.*

*
I concur in the per curiam opinion’s reversal of the District
Court’s mootness finding as to Noble’s § 201 claim. But the merits
of Noble’s § 201 claim appear frivolous. In any event, the District
Court can dispose of the § 201 claim on remand.
 WILLIAMS, Senior Circuit Judge, concurring in part and
dissenting in part: I join Parts I, II, VI, VII, and VIII of the
per curiam opinion, as well as those portions of Part III
concerning the district court’s fact-finding and the separate
arguments of defendants Dunn and Vincenzi. I respectfully
dissent from the resolution of Noble’s other claims under 29
U.S.C. § 501(b).

The majority’s central error lies in its readiness to accept
interpretations of the union’s constitution that gut that
document’s minutely detailed salary caps. These
interpretations allow the officers to help themselves to union
money at will by:

— dispensing with the constitution’s requirement of
itemized receipts for expense reimbursement (the $500
monthly in-town expense allowances), and

— interpreting “benefits” to encompass salary increases
whenever they believe the extra money will help the
union “retain competent personnel,” namely themselves
(the FICA reimbursement issue).

Not content with that, the court short-circuits fact-finding on
whether the convention delegates, in approving per diem
payments, had any notice that the per diems covered officers’
costs that the union itself had already met.

In his separate opinion, Judge Kavanaugh would go even
further. He would hold that, in all but the most exceptional
cases, the courts have essentially no role whenever delegates
to a subsequent union convention accept an interpretation of
the union’s constitution presented by officers to justify their
past conduct. As I develop below, this contradicts both the
language and the purpose of the Labor Management
Reporting and Disclosure Act (“LMRDA”).
 2

I would find the officers’ interpretations with respect to
the in-town expense allowances and FICA reimbursements to
be unreasonable in light of the relevant text; the extrinsic
evidence only strengthens this conclusion. The dispute over
the per diem payments, meanwhile, doesn’t involve
interpretation of the union constitution at all, but rather factual
claims—never addressed by the district court—that the
officers failed to adequately disclose the nature of their double
compensation before the union convention approved the
payments. I will address the three in that order.

I. The $500 Monthly In-Town Expense Allowances

The in-town expense allowance program, which handed
NALC’s officers $500 a month on their say-so alone, cannot
be justified on any reasonable reading of NALC’s constitution.
Article 9 of that constitution determines the precise salary that
each officer will receive, down to the last dollar. NALC
Const. art. 9, §§ 1-10. (E.g., $62,699.00 for the executive vice
president in 1992; no promiscuous rounding here!) Only the
National Convention may alter this salary, and only by
constitutional amendment. The Executive Council may act
“on all matters . . . not specifically prohibited by the
membership,” id. art. 9, § 11(e), but this does not mean
prohibited matters must be mentioned by name. In fixing the
officers’ salaries, the constitution never explicitly forbids
payment of under-the-table salaries, but that hardly means the
officers could vote themselves one; there is no ambiguity or
textual “gap” on the point. Rather, NALC’s constitution
guards against officers’ subverting the limit via sinecures,
providing that no officer “shall receive more than one salary
from the NALC.” Id. art. 14, § 6.

Along with fixing the salaries of the Executive Council,
the constitution provides that “[i]n addition to their salaries,
 3

[the officers] shall be entitled to reimbursement of all itemized
expenses legitimately incurred in conduct of the affairs of the
Union.” Id. art. 6, § 1 (emphasis added). This clause is
phrased as an exception to an otherwise-applicable limit on
compensation, and it directly implies that unitemized
expenses are not to be reimbursed. Placing union money in
the officers’ hands, solely on those same officers’ bland
assurances that it will be used for union business, completely
subverts the clause’s obvious goal of preserving accountability.
According to the union’s independent auditor, Sombrotto
personally received $34,000 in reimbursements from
November 1988 to July 1993, for which he provided only
$5132 in receipts. See Joint Appendix (“J.A.”) 685. Defeat
of the provision for reimbursement of itemized expenses
could hardly be more complete.

The per curiam opinion reads the provision for
reimbursement of itemized expenses as merely setting a floor,
guaranteeing reimbursement for the officers’ itemized
expenses without restricting what else they may receive. Maj.
Op. at 9. But on that reading, the Executive Council could
always vote itself whatever reimbursements it thought
appropriate, making a guarantee for reimbursement of
itemized expenses entirely unnecessary. Rather than mere
surplusage, the facially permissive language of Article 6 must
be read as an implicit restriction, just as the power of
Congress “[t]o establish . . . uniform Laws on the subject of
Bankruptcies” is read to limit, rather than supplement, any
power to adopt non-uniform bankruptcy laws. See U.S.
Const. art. I, § 8, cl. 4; Ry. Labor Executives’ Ass’n v.
Gibbons, 455 U.S. 457, 468-69 (1982).

Judge Kavanaugh’s separate opinion provides no better
solution. He does not address the meaning of this provision,
nor does he join Part III of the per curiam opinion. Rather, he
considers the unitemized allowances within the officers’
 4

power to set “salaries, wages, expenses, allowances, and other
disbursements . . . other than provided for.” NALC Const. art.
9, § 11(e)(3); cf. Kavanaugh Op. at 3. This clause, however,
confers discretion only over questions left unresolved by other
constitutional provisions. The officers obviously could not
rely on it to pay themselves the dual salaries prohibited by
Article 14, nor to avoid Article 6’s limits on reimbursement of
expenses.

The per curiam opinion’s reading is further weakened by
the NALC constitution’s method of administering
reimbursements. Article 11 charges the Fiscal Committee
with “examin[ing] all bills submitted for payment,” requiring
that “[a]ll bills shall be itemized.” NALC Const. art. 11,
§ 2(b). The word “bills” includes requests for reimbursement,
so Article 11 on its face appears to cover the demands for the
$500 allowance. But let us assume arguendo that there is
ambiguity in the term. In that case, the range of reasonable
readings is limited by the factual context. As Sombrotto
conceded in his testimony at trial, he considered Article 11’s
requirements to apply to internal expenses incurred away from
Washington, D.C. See Trial Tr. 4/13/04 at 129:4-9, :25,
130:1-2. Yet Article 11 makes no distinction as to where the
expenses are incurred. The district court did not address the
matter, despite Noble’s request, see Pl.’s Am. Proposed
Findings of Fact & Conclusions of Law 6-7, Doc. No. 241,
Ex. A (“Pl.’s Am. Proposed Findings of Fact”), but any
contrary finding of fact would have been clearly erroneous in
light of Sombrotto’s concession. Thus, the officers themselves
considered Article 11 to apply to internal expenses. The
officers might have interpreted “bills” to be unrelated to
internal expenses, posing a different issue for review, but they
never did so, and a fortiori they never did so reasonably.
Assuming that some ambiguity remains, then, the extrinsic
evidence merely confirms the text’s evident sense.
 5

Judge Kavanaugh rests his concurrence (as to all three
issues) on the union convention’s votes against Noble’s
claims. Kavanaugh Op. at 1-2. Of course, these were not
votes of the full union membership, but rather votes of
delegates to the annual convention. Such delegates have no
exact counterpart in the corporate-shareholder analogy. They
are elected agents of the members, and are more subject to
personal influence by union officers, especially when they
vote through public “teller” proceedings requiring them to
stand and be counted individually rather than through secret
ballot. They are, moreover, likely in some degree to share the
officers’ viewpoints, interests, and perspectives. Thus
“agency” problems—the tendency of agents to a degree to
scant their principals’ interests in favor of their own—render
the convention’s blessing a less effective absolution than a
vote of the whole membership.

Nonetheless, convention resolutions, if adopted in a fair
vote after informed disclosure, would indeed “undermine[] a
finding that the [officers’] interpretation was unreasonable and
made in bad faith.” Monzillo v. Biller, 735 F.2d 1456, 1464
(D.C. Cir. 1984). But Monzillo treats a delegates’ resolution
(a form of post-enactment legislative history) only as an
interpretive thumb on the scale, not a conclusive extra weight.
Section 501 precludes our allowing it any greater impact.
Individual suits may be brought only after “the labor
organization or its . . . officers refuse or fail to sue,” § 501(b)
(emphasis added), language that encompasses non-suit at the
direction of a majority vote as well as any other process.
Requiring an “unusual or egregious set of facts” to overcome
a convention resolution, as Judge Kavanaugh would do,
Kavanaugh Op. at 2, will commonly turn this procedural
precondition to suit into a virtually insurmountable barrier.

Judge Kavanaugh’s theory would also contradict the
premise behind LMRDA’s mandatory reporting and fiduciary
 6

requirements: that even majorities of union members may
lack the skill or incentives to protect themselves from
predatory officials. To this end, § 501(a) declares any
“general exculpatory resolution . . . purporting to relieve
any . . . person of liability for breach of [fiduciary] duties” to
be “void as against public policy”; giving near-conclusive
effect to subsequent interpretive resolutions would enable
union leaders to evade that ban. Cf. Morrissey v. Curran
(“Morrissey I”), 423 F.2d 393, 399 (2d Cir. 1970) (“[T]he
provisions of § 501 would be completely emasculated if,
every time a court . . . found that the officers had breached
their duties, the officers could find sanctuary by putting
through a constitutional amendment or by-law retroactively to
legitim[ize] their former derelictions of duty.”). And since
some bylaws are designed to protect a minority of union
members from their fellows, ending the legal inquiry after a
majority vote would be perverse, especially in light of closed-
shop or union-shop rules that curtail employee exit. In this
particular appeal, the resolutions cannot have so powerful an
effect as to overcome the comparatively plain language of the
union constitution.

Although I would reverse the district court’s judgment on
the expense allowances in full, I join the per curiam opinion’s
finding of clear error as to the historical fact of how the
union’s money was used. Maj. Op. at 9-11. Such misuse
represents a violation of § 501’s independent duty to “account
to [NALC] for any profit received . . . [in] transactions . . . on
behalf of the organization,” § 501(a), as well as the more
general fiduciary duties the statute imposes, see Maj. Op. pt.
VII. Noble alleges not only that the expense allowance
program was unauthorized, but that in collecting
“reimbursements” the officers falsely represented that they
had spent the requested amount on union business, a plain
violation of these statutory duties. Given that Sombrotto
encouraged the officers to apply for $500 monthly even when
 7

it exceeded their actual expenses, see Sombrotto Tr. 9/15/93,
Pl.’s Ex. 47, at 4, the district court clearly erred by finding “no
evidence” of this practice. Noble, slip op. at 17.1

Judge Kavanaugh does not address these additional
allegations, see Kavanaugh Op. at 3, but the subsequent
interpretive votes are surely irrelevant here. The convention
delegates voted only on whether the expense allowance
program was constitutional, not whether the officers had
actually used the money as the program required. The latter is
a question of fact, not interpretation.

I also join the per curiam opinion with respect to the
officers’ bad faith. Maj. Op. at 11. The convention records
on the matter are striking. At the 1976 Convention, in the
course of a debate over an increase in dues, delegate John
Bourlon rose to ask whether it was true that the officers were
receiving $500 per month for “in-town expenses.” J.A. 165.
James H. Rademacher, then president of the union—who had
personally signed the 1975 Executive Council resolution
approving the unitemized reimbursements—answered by
alluding to the constitutional provision for officers’ itemized
expenses. The exchange proceeded as follows:

1
We have not yet determined what burdens of production and
persuasion apply to such questions, but the district court on remand
may find it useful to consider the views of other circuits. E.g.,
Morrissey v. Curran (“Morrissey II”), 650 F.2d 1267, 1284 (2d Cir.
1981) (“A plaintiff in a § 501 suit need not prove the impropriety of
every expenditure within a challenged category, but he must
provide sufficient evidence of abuses within the category to justify
a detailed accounting. At that point the burden will be upon the
defendants to prove the propriety of each expenditure.”).
 8

[Rademacher:] There is no stipulation in that
Constitutional amendment, in-town, out-[of-]town or
wherever it happens to be. If they itemized expenses they
receive reimbursement according to the Constitution. . . .
Does that answer you, Microphone 1?

[Bourlon:] No, sir, I’m sorry, it doesn’t answer it. I can
agree with what the Chair has said[,] that the Constitution
contains it and if they do itemize this thing, then I would
agree, but the information I have says that they will be
allowed $500 and it does not say if they list it on an
expense account. It says they will be given $500.

[Rademacher:] Well, your information is incorrect. The
Chair stands here in front of 5,000 delegates and says
your information is incorrect.

J.A. 165-66.

Ten years later, at the 1986 Convention, Sombrotto
presided over the statement of a similar misrepresentation in
the context of a proposal to raise his own salary. Delegate
Karen Lippe proposed limiting the increase for a variety of
reasons, among them the FICA reimbursements (discussed
below) and the fact that “all resident national officers receive
a sum of $6,000 per annum unaccountable expense money.”
J.A. 734. In response, Sombrotto recognized a speaker “on
privilege,” namely Gene McNulty, a National Business Agent
and a member of the Executive Council. McNulty stated as
follows:

I would like to correct the Sister. . . .

Also, another piece of misinformation by the Sister, there
is not for the resident national officers $6,000
unaccountable. They have to account for that. If you
don’t believe me, check with the IRS.
 9

Id. This was also false: while some officers did submit a
limited number of receipts, they were never required to
“account” for the actual use of the expense allowance,
whether to the IRS or anyone else (although in the absence of
receipts NALC evidently reported reimbursements as taxable
income). Sombrotto did not correct this misrepresentation,
though he had personal knowledge of the situation (and had
commented from the chair on other measures). After
McNulty’s “correct[ion],” the debate did not return to the
truth of Lippe’s charges; the convention voted her amendment
down and approved the proposal to raise Sombrotto’s salary.

II. Reimbursement of FICA Payroll Taxes

The officers’ vote to have the union reimburse their
personal share of FICA taxes similarly contravened the
constitution’s clear text. Whether or not the reimbursements
were sound policy, the constitution specified a precise salary
for each officer. The majority argues that FICA reimbursements
may be properly categorized as something other than salary,
Maj. Op. at 12-13; but although the Executive Council
described the new payment as a “fringe benefit,” J.A. 598,
under its power to establish “such benefits as may be required
to attract and retain competent personnel,” NALC Const. art.
9, § 11(e)(4), even a purpose of attracting quality personnel
can’t turn a salary increase into a non-salary benefit. Lacking
authority to increase their own salaries other than by
constitutional amendment, the officers necessarily lacked the
power to evade this limitation by using a different label.

As I’ve mentioned above, NALC’s constitution sets forth
a specific dollar amount for each officer as “the sum . . . per
annum, payable weekly,” for “the faithful performance of
[that officer’s] duties.” Id. art. 9, §§ 1-10. This definition
clearly covers the FICA reimbursements, which directly
 10

expanded each week’s paycheck by a fixed amount, regularly
increasing the annual payments made for the officers’
services. The constitutional text offers no basis for
distinguishing a 7.65% “FICA reimbursement” from an
illegitimate 7.65% raise. The reimbursements also fall within
generally accepted definitions of salary, see 9 Oxford English
Dictionary 48 (corrected ed. 1933) (“[f]ixed payment made
periodically to a person as compensation for regular work”);
Webster’s Third New International Dictionary 2003 (1981)
(“fixed compensation paid regularly . . . for services”), and
under the tax code are part of the officers’ wages for FICA
purposes. See 26 U.S.C. § 3121(a), (a)(6)(A).

If the officers provided reasonable definitions of
“benefits” and “salary” that included FICA reimbursements
within the former and excluded them from the latter, we
would defer under Monzillo. Cf. English v. Cunningham, 282
F.2d 848, 850 (D.C. Cir. 1960) (“Courts will accept the
correctness of an interpretation fairly placed on union rules by
the union’s authorized officials.” (emphasis added)). But they
have never done so. Before the district court, the officers
stated only that they “have historically interpreted” their
salaries to be “the amount paid annually to each officer for the
services that he or she performs for the Union.” See
Statement of Material Facts as to Which There Is No Dispute
of Individual Defendants Sombrotto et al., Doc. No. 128, pt. 2,
¶ 15, at 4 (Nov. 19, 2001); see also Sombrotto Decl. 11/19/01,
Pl.’s Ex. 21, ¶ 9, at 3-4. The FICA reimbursements fit
comfortably within that definition.

Moreover, if the term “benefits” includes payments
indistinguishable from salary, there is no way to differentiate
the payments that the officers cannot increase from the ones
they can. Any regular payment to the officers (an “extra-
special compensation supplement”?) could be justified on
such grounds. An interpretation that “reads out of the
 11

constitution an important protective provision” is “patently
unreasonable,” Loretangeli v. Critelli, 853 F.2d 186, 195 (3d
Cir. 1988); so a reading that decapitates the salary caps should
fail. The constitution describes “benefits” as “including but
not limited to annuity, welfare, vacations, holidays, severance
pay, tuition or scholarship, and insurance benefits.” NALC
Const. art. 9, § 11(e)(4). None takes the form of a fixed,
regular, immediate, and unrestricted cash payment for each
week worked. If such payments are “benefits,” then the
constitution’s last restraint on the officers’ helping themselves
to salary increases appears dead.

Nor does the officers’ theory of “double taxation” alter
the analysis. Their salaries are constitutionally fixed in pre-
tax terms—which they implicitly concede by paying their own
personal income taxes—and, as they themselves allege, are
adjusted at every biennial convention. See Mem. Supp. Mot.
Summ. J. Filed by Individual Defs. Sombrotto et al., Doc. No.
128, pt. 3, at 7. The decision of each convention whether or
not to grant a raise (and, if so, of how much) is made in the
shadow of the governing tax law. Since FICA taxes were a
longstanding obligation of all of the union’s full-time
employees, rather than a new imposition in 1980, the officers
would have had every opportunity to make their case to the
convention beforehand. When NALC’s officers voted to
lighten their own tax burden at the union’s expense—a move
they did not disclose to the membership until after Noble
complained—they usurped the convention’s authority to
determine their salaries.

The majority places great weight on the payments’
“wisdom as a policy matter,” Maj. Op. at 13, but this does
nothing to resolve the interpretive issue. Perhaps the extra
pay was useful “to attract and retain” officers; yet the officers’
authority must still be read consistently with the salary caps,
for an unauthorized raise would have been equally attractive.
 12

The policy goal named in the clause is if anything a limitation
on what benefits may be offered; it does not expand the
category of “benefits” to include payments that are really
salary increases. The only constitutional issue is whether the
FICA reimbursements were a (permitted) benefit or a
(forbidden) salary increase; business arguments for the
reimbursements have no bearing on the issue.

Judge Kavanaugh’s opinion goes further, and argues that
Noble’s argument “largely eras[es] the constitution’s clear
distinction between salary and benefits.” Kavanaugh Op. at 3.
Quite the reverse. Although the constitution authorizes the
Executive Council to offer “benefits” in order “to attract and
retain competent personnel,” it gives no license to increase
salaries for that purpose. The distinction may be formalistic,
but it is in practice the only barrier to almost unlimited self-
help. By looking to business reasons for upholding the 7.65%
FICA increase, the majority erases the distinction and the
constraint.

III. “Per Diem” Expenses During National Conventions

The majority rejects Noble’s claims concerning the “per
diem” expenses; in so doing, it misconceives both the record
and the nature of his challenge. Because the district court
failed to rule on the relevant factual issues—and because this
court cannot make the necessary findings on its own—the
claim should be remanded for further development of the
record.

At every biennial convention after 1964, a small group of
unnamed delegates received a “per diem” payment calculated
on the basis of certain estimated expenses: lost wages, hotel
rooms, and meals and incidentals. Noble argued in the district
court that the presidentially appointed Committee on Mileage
 13

and Per Diem asked each post-1964 convention to approve
these payments without informing the delegates of two facts:
(1) that the union’s officers were among those receiving per
diem payments, even though they continued to earn their
salaries and thus had no “lost time” (unlike rank-and-file mail
carriers); and (2) that the union had already paid (in full or
part) for most officers’ hotel rooms, transferring the union’s
hotel discount to the officers’ benefit. Thus, the members
were unaware of these costs’ peculiarities—peculiarities that
might well have been material to their decision.

Under our precedent in United States v. DeFries, 129
F.3d 1293 (D.C. Cir. 1997), these allegations state a violation
of § 501(a). Payments to the officers are invalid if made
without informed consent, for “authorization secured ‘without
disclosure of . . . material information’ is a nullity.” Id. at
1307 (omission in original). DeFries’s “nullity” phrase comes
from United States v. Butler, 954 F.2d 114 (2d Cir.1992), a
case with facts strikingly similar to those here. The Butler
court upheld the embezzlement conviction under § 501(c) of a
union official who had secured approval for “fixed expense
payments for attending trustee meetings” without revealing
that he and other recipients “were already being fully
compensated for actual expenses.” Id. at 119. The Second
Circuit held that approval given under these circumstances
was worthless. The Fourth and Fifth Circuits have agreed,
holding that when union officers benefit directly from an
expenditure, they must prove “that the funds . . . were obtained
with the valid authorization of the union after adequate
disclosure.” Ray v. Young, 753 F.2d 386, 389 (5th Cir. 1985);2
accord Brink v. DaLesio, 667 F.2d 420, 424 (4th Cir. 1981).

2
The defendants claim that Ray supports a laxer standard. It
did so, but only for very different sorts of payments. Its point was
 14

That union officers would receive a full per diem
payment while having incurred no “lost time” and while
enjoying union-provided hotel rooms could obviously have
been material to the convention’s decision to approve the per
diems. This is not merely a question of whether individual
recipients could save money by eating cheaper meals or
staying at a cousin’s apartment, but whether the factors on
which the per diems were based were categorically
inappropriate for a distinct group of recipients. Thus, while
convention delegates probably understood that the per diems
did not vary with run-of-the-mill variations in individual
expenses, we have no basis to assume—as the district court
made no findings on the matter—that there was adequate
disclosure of the facts that reasonable delegates would have
thought material.

Noble accordingly argued before the district court that the
conventions had been misled. Pl.’s Am. Proposed Findings of
Fact 19 (“Stating to the convention that . . . the recommended
per diem rate is based on consideration of lost time and hotel
rates implies . . . that the payment will be made to people who
lose time and pay for their hotel rooms.”). But the district
court failed to address Noble’s argument. Because he
properly raises this issue on appeal, we could affirm only if
Noble’s theory were inadequate as a matter of law (which it is
not), or if it were unsupported by sufficient evidence in the
record (i.e., if a finding in Noble’s favor would have been

that “heightened scrutiny” was not suitable merely because a
payment provided incidental benefits to an officer; thus, though an
officer reimbursed for a business dinner “has been relieved of the
personal cost, which he otherwise would have incurred, of daily
sustenance,” 753 F.2d at 390, no special scrutiny was in order. But
nothing in Ray suggests a willingness to countenance undisclosed
“double dip[ping],” as Butler put it. 954 F.2d at 117.
 15

reversible for clear error). We cannot simply supply the
factual finding ourselves, however, for “where the correctness
of the lower court’s decision depends upon a determination of
fact which only a [fact-finder] could make but which has not
been made, the appellate court cannot take the place of the
[fact-finder].” United States v. Hill, 131 F.3d 1056, 1061 (D.C.
Cir. 1997) (alterations in original) (quoting United States v.
Garrett, 720 F.2d 705, 710 (D.C. Cir. 1983)); see also 19
Moore’s Federal Practice—Civil § 206.03[6].

The majority not only attempts to supply the necessary
finding, but to do so it rests on an inaccurate reading of the
record. The majority asserts that a “basic reading” of the
NALC constitution would have revealed the necessary facts.
Maj. Op. at 16. But the constitution nowhere says that the
officers’ hotel rooms had been paid for, a fact that was only
revealed as a result of Noble’s internal complaints.
Additionally, while the constitution permits officers to receive
per diems, it nowhere indicates that officers must receive
them; that was up to each convention to decide. The
constitution first mentions per diems in providing for a
Committee on Mileage and Per Diem, which during the
relevant period was appointed by Sombrotto. Cf. NALC
Const. art. 9, § 1(g). This committee must “compute and
report to the National Convention the name, residence, and
amount due each member eligible for mileage and per diem,”
id. art. 11, § 6 (emphasis added), which indicates that per
diems may be paid to any delegate. The constitution then
allows officers to receive the payments by making an
exception to their otherwise-applicable salary caps, permitting
them to receive per diems “as the National Association, while
in session, may direct.” Id. art. 13, § 2. This allows
“direct[ion]” by the convention, but not directions occurring
under a complete misapprehension of the facts; nor does it
indicate that the officers will, in fact, be included among those
receiving per diems at any particular convention.
 16

To see why union members might have been left in the
dark, a brief supplement to the majority’s account is
necessary. At one time, per diem payments were calculated
by the committee on an individual basis, with each allowance
read aloud to the convention by name and amount. In the
1964 Convention, as the district court found, “a majority of
the Delegates decided to dispense with the reading of the
individual payments.” Slip op. at 6. The convention did not
vote to “substitute[]” a summary report, cf. Maj. Op. at 14,
nor did the district court so find, see slip op. at 6, 19. So far
as appears, rather than approving a change in the system of
individualized accounting, it simply voted—as shown in the
following exchange—to dispense on that occasion with the
recital of a tedious list of names:

In accordance with the National Constitution, . . . we of
the Mileage and Per Diem Committee, having checked
the vouchers, recommend the payment of 47 delegates for
a total sum of $33,044.88.

Do you want me to read the individual payments?
(Chorus of noes.)

J.A. 657.

The record does not reveal any informed decision of the
convention to alter the method of paying per diems, nor were
the delegates again asked to dispense with the reading of
names. Rather, in subsequent years, the committee engaged
in what Noble alleged to be a “verbal shell game.” Pl.’s Am.
Proposed Findings of Fact 18. First, via the Board of
Trustees, it announced estimates of the various components of
the per diem—lost time, hotel costs, and meals and
incidentals—and recommended the total as the figure to be
provided to “those delegates who will be reported as eligible
for the same . . . later in the week.” J.A. 660 (1986
 17

Convention); see also Noble, slip op. at 6, 18; J.A. 661 (1992
Convention); id. at 336 (2002 Convention). In the meantime,
President Sombrotto asked these nameless delegates to submit
vouchers for the committee’s review. See J.A. 661 (1992
Convention); id. at 336 (2002 Convention). A subsequent
announcement then disclosed to the convention the total
number of delegates found eligible for per diems and the total
amount to be paid, slip op. at 19, with the committee reporting
that it had “examined each voucher carefully and found it to
be correct.” J.A. 337 (2002 Convention); see also id. at 658
(1966 Convention). The convention then voted up-or-down
on whether or not to pay the per diems. Slip op. at 19. But at
no time did the committee disclose either the identities of
those found “eligible,” or whether any officers were among
them, or the contents of the vouchers, or the extent to which
the union was already bearing the same costs.

The majority argues that the committee’s failure to read
individual names and amounts was consistent with a
“reasonable” reading of the constitution. See Maj. Op. at 15.
This is incorrect, for the constitution unambiguously requires
that the committee “shall compute and report to the National
Convention the name, residence, and amount due each
member eligible for mileage and per diem,” NALC Const. art.
12, § 6 (emphasis added), and NALC officers are also
“members,” see id. art. 6, § 4. But it is also irrelevant, for the
reporting requirement is an independent duty of the committee,
not a condition precedent to the officers’ receipt of per diems.
The legitimacy of that receipt turns not on an interpretation of
the constitution but on whether the delegates, in deciding to
approve the payments, had enough information as to who was
receiving the payments and, for the officers, the systematic
absence of any offsetting burden.

As to the first question, the process itself plainly did not
disclose the inclusion of officers. No names were given; not
 18

only were officers merely potential recipients of per diems
among others, but there were more per diems paid (in every
year for which there is evidence in the record) than there were
NALC officers to receive them. See J.A. 657 (1964
Convention) (47 delegates); id. at 658 (1966 Convention) (54
delegates); id. at 337 (2002 Convention) (38 delegates). And
as to the second question, as noted above, the officers never
disclosed the hotel subsidies until after Noble complained.
The convention was told that the recipients’ vouchers had
been examined “carefully,” but this would have led an
ordinary delegate to imagine far more strenuous eligibility
requirements than were actually applied. It thus seems
doubtful that anyone at the convention (beyond the
Sombrotto-appointed committee and the lucky recipients
themselves) had been informed of the relevant facts.

The likelihood that delegates were misled is heightened if
Noble is correct to assert—as he did in a statement that was
apparently uncontradicted and was never addressed by the
district court—that NALC’s own employees, of whom he was
one prior to his internal complaint and subsequent discharge,
were paid a daily convention allowance based only on the
“meals and incidentals” portion of the committee’s per diem
estimate, on the grounds that their salaries continued and their
hotel rooms were paid for by the union. See Pl.’s Am.
Proposed Findings of Fact 18-19; Noble Br. 13; Noble Aff.
4/2/04 ¶ 31, at 13; see also Trial Tr. 4/13/04 at 181:6-18
(testimony of William H. Young). Members may have naively
thought that what was right for a lowly staffer would also be
right for an officer.

The officers contend that they used the excess per diem
payments for legitimate expenses such as entertaining union
associates, which would otherwise have been properly
reimbursable through the usual route. Cf. Kavanaugh Op. at
4. If true, this might be relevant to the size of NALC’s
 19

potential recovery, but it has nothing to do with whether the
necessary disclosures were made. The officers also argue that
no convention delegate ever requested the names of those
receiving per diems prior to Noble’s suit. But DeFries
doesn’t require the general membership to guess about
undisclosed material information and then ask for it; rather,
the benefited officers are obliged to disclose material facts to
those whose consent they seek.

Because the district court’s opinion does not reveal
whether adequate disclosure of these facts was made during
the period relevant to this suit, we should remand for
additional findings. If the district court had found on this
record that disclosure was inadequate, we certainly could not
reverse it for clear error, and Noble is entitled to have this
question determined by the original fact-finder in the first
instance. Cf. Summers v. Dep’t of Justice, 140 F.3d 1077,
1083 (D.C. Cir. 1998); U.S. Postal Serv. v. Nat’l Ass’n of
Letter Carriers, 9 F.3d 138, 146 (D.C. Cir. 1993).

* * *

Thanks to the court’s decision, pilfering union chieftains
should sleep more easily tonight. At least in this Circuit, their
interpretation of union rules to permit their self-enrichment
will be deemed reasonable whenever the interpretation passes
a laugh test, free from any need to be consistent with the
union’s efforts to constrain its officers’ self-help.