
USCA1 Opinion

	




          April 15, 1994        [NOT FOR PUBLICATION]                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ___________________          No. 93-2075                                               CHARLA SCIVALLY,                                Plaintiff, Appellant,                                          v.                              WILLIAM R. GRANEY, ET AL.,                                Defendants, Appellee.                                  __________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                       [Hon. Rya W. Zobel, U.S. District Judge]                                           ___________________                                 ___________________                                        Before                                 Breyer, Chief Judge,                                         ___________                            Cyr and Stahl, Circuit Judges.                                           ______________                                 ___________________               Charla Scivally on brief pro se.               _______________               Diane M.  Kottmyer, Scott C. Moriearty,  Deborah Kravitz and               __________________  __________________   _______________          Bingham, Dana & Gould on brief for appellee.          _____________________                                  __________________                                  __________________                 Per  Curiam.   Appellant,  Charla Scivally,  appeals the                 ___________            dismissal   of  her  amended   complaint  against  appellees,            Polaroid  Corporation,  Israel   Booth,  William  Graney  and            Vincent Tognarelli, to recover damages for alleged violations            of  the Racketeer  Influenced and  Corrupt  Organizations Act            [RICO],  18  U.S.C.     1964(c),  and  the  grant of  summary            judgment  to  Graney  and  Tognarelli  on  appellant's  claim            seeking relief for alleged violations   101(a)(2)  of Title I            of the Labor-Management Reporting and Disclosure  Act [LMRDA]            (codified at 29 U.S.C.   411(a)(2)).  We affirm.                                          I                 In  1946, Polaroid  established the  Polaroid Employees'            Committee  [the committee]  to enhance  communication between            employees and management.   Although its members were elected            by  the employees, the committee was  treated as a department            of Polaroid.  Polaroid paid salaries to the committee members            and funded  all  committee activities.   From  1983 to  1992,            Polaroid  registered the committee as a "labor organization,"            pursuant to 29  U.S.C.    432.  Appellee  Graney was  elected            Chairman of the  committee in 1989.  Appellee  Tognarelli was            elected Vice Chairman the same  year.  Appellant Scivally was            elected  to the  committee  as a  representative in  February            1992.                 Upon  her  election,  Scivally  sought  to  render   the            committee   "more  responsive  to  its  membership  and  less                                         -2-            subservient to  employer Polaroid."  After  failing to reform            the  committee from within,  Scivally filed a  claim with the            Department  of  Labor  [DOL]  asserting  that  the  committee            officers  had been elected in  violation of 29  U.S.C.   481.            In  June 1992,  the DOL  made preliminary  findings that  the            manner  of  electing  the committee  officers  was  improper.            Thereupon, Booth,  the President and Chief  Executive Officer            of Polaroid,  announced the committee was  dissolved.  Graney            and Tognarelli  in turn  filed a "terminal  report" notifying            the DOL that the committee has been dissolved.  See 29 C.F.R.                                                            ___               402.5.  Upon receipt  of the report,  the DOL discontinued            its investigation and dismissed  Scivally's complaint on  the            ground  there  was no  longer  an entity  falling  within the            Secretary's jurisdiction to investigate.   Scivally filed her            complaint in the district court on July 9, 1992.                                          II                 Scivally's RICO claims are predicated on her  allegation            that Polaroid and Booth acted illegally by paying "bribes" in            the form of salaries and other payments to the members of the            committee, in violation of  29 U.S.C.   186(a).   She alleges            that Graney and Tognarelli  illegally accepted the bribes, in            violation  of  29  U.S.C.     186(b).1    Since  the payments                                            ____________________            1.  Section 186(a)  provides, inter  alia, that "it  shall be                                          _____  ____            unlawful for any employer  . . . to pay  . . . any money  . .            .(3) to any employee or group or committee of employees . . .            for  the purpose of causing such employees . . . to influence            any  other employees in the exercise of the right to organize                                         -3-            occurred over  several years, appellant alleges  a pattern of            racketeering  activity.    She  asserts  five  categories  of            injuries:  (1) lost  wages and  benefits the  committee would            have negotiated if it had been free from employer domination;            (2) financial loss from an  employee stock option plan [ESOP]            in which she would not have participated if the committee had            not been employer  dominated; (3) lost opportunity to run for            office and vote in union  elections; (4) lost opportunity  to            exercise her rights  as a member of a union  under Title I of            the  LMRDA; and (5) the  loss of her  position as a committee            representative.  The district  court dismissed all the counts            for lack of standing.                 In order  to establish standing under  RICO, a plaintiff            must demonstrate that  she was "injured in  h[er] business or            property" by  the alleged racketeering activity,  18 U.S.C.              1964(c), and that  the injury was  proximately caused by  the            illegal  activity, Holmes  v. Securities  Investor Protection                               ______     _______________________________            Corp., 112  S.Ct. 1311,  1316-22 (1992).    To establish  the            ____            requisite proximate  cause, a RICO plaintiff  must show "some            direct relation between the injury asserted and the injurious            conduct."   Id. at 1318.  Since Scivally has failed to allege                        __                                            ____________________            and bargain collectively through representatives of their own            choosing;  or (4)  to  any officer  or  employee of  a  labor            organization . . . with intent to influence him in respect to            any of his actions, decisions, or  duties as a representative            of employees or  as such  officer or employee  of such  labor            organization."   Section 186(b)  makes it unlawful  to accept            any payment prohibited by subsection (a).                                         -4-            sufficient facts  to show that her  injuries were proximately            caused  (or in  some  cases caused  at  all) by  the  alleged            illegal activity of appellees, we affirm the dismissal of her            RICO complaints.                 Scivally's complaint fails to allege sufficient facts to            establish  that   appellees'  pattern  of  bribery   was  the            proximate  cause of any loss of wages and/or benefits to her.            Her  assumption that, if  the committee had  not existed, the            employees would have established an independent  labor union,            and that this union  would have negotiated a better  wage and            benefit package than  the employees in fact obtained,  is too            indirect and speculative to satisfy the standard of proximate            cause.   See, e.g.,  Associated General Contractors,  Inc. v.                     ___  ___    ____________________________________            California  State Council  of Carpenters,  459 U.S.  519, 542            ________________________________________            (1983)   (plaintiff   whose   injuries  were   indirect   and            speculative  does not have standing to sue under section 4 of            the  Clayton  Act)  (applying  traditional   proximate  cause            standards);  Holmes, 112  S.Ct.  at 1317  (reasoning used  to                         ______            require  showing  of  proximate cause  in  Associated General                                                       __________________            Contractors  "applies   just  as  readily  to      1964(c)").            ___________            Scivally's  alternate  contention--that  the employees  would            have obtained better wages if no employee organization of any            sort had existed--is similarly indirect and speculative.                 Scivally  also alleges  that  she was  "cheated" out  of            wages  and benefits by Polaroid's  adoption of an  ESOP.  The                                         -5-            ESOP was established as a defense  against a hostile takeover            attempt and its propriety  was challenged before the Delaware            Court  of  Chancery.   Shamrock  Holdings,  Inc. v.  Polaroid                                   ________________________      ________            Corp.,  559 A.2d 257 (Del. Ch. 1989).  Scivally contends that            ____            Polaroid used its control over the committee to induce Graney            and Tognarelli  to testify falsely before  the Delaware court            about  employee  sentiment  toward  the ESOP  and  that  this            testimony led the  court to  approve the ESOP.   She  alleges            specifically  that Graney  and  Tognarelli falsely  testified            that Polaroid  employees would work more  productively if the            ESOP were adopted.                   The  record  belies  Scivally's   claim.    First,   the            testimony of Graney and Tognarelli was only a small  fraction            of  the evidence on which the Delaware court relied in making            its findings.   Id. at 259 (in  making its summary of factual                            __            findings  court   drew  "from  over  3,000   pages  of  trial            transcript,  more than  500  exhibits and  extensive excerpts            from the  depositions of 34 witnesses").  Moreover, the court            did not find  that the ESOP  would increase productivity  but            only that it would not lead to "decreased productivity."  Id.                                                                      __            at 272.   Given these undisputed facts,  Scivally cannot show            that the allegedly perjured testimony was the proximate cause            for  the  court's  failure  to  set  aside  the  ESOP.    See                                                                      ___            Associated  General  Contractors,  459  U.S.  at  542  (since            ________________________________            alleged  injuries  may  have  been  produced  by  independent                                         -6-            factors, plaintiff has not shown they were proximately caused            by defendant's acts).                 Scivally alleges  that the other  injuries she  suffered            stem from the dissolution  of the committee.  Insofar  as the            dissolution  marked  the  cessation  of   appellees'  alleged            racketeering   activity,  any   injury   suffered  from   the            dissolution was not caused by racketeering activity.                   Scivally, however,  also  alleges that  the  dissolution            itself  could  not have  occurred  but  for the  racketeering            activity of appellees Booth, Graney and  Tognarelli.  Even if            this were so, appellant  cannot show that she was  injured in            her business or property by the dissolution of the committee.            According to  appellant's allegations, the committee  had for            several years been funded  by the company in violation  of 29            U.S.C.    186(a)  &  (b).    Since  the  committee  had  been            supported by  the very racketeering activity  which forms the            predicate acts of appellant's RICO complaint, the property to            which Scivally alleges  injury--her rights to  participate in            the  committee--would  not  have existed  absent  the illegal            racketeering activity.  "Where, as here, the only property to            which a  plaintiff alleges injury is  an expectation interest            that  would  not  have  existed  but  for  the  alleged  RICO            violation,  it would  defy logic  to conclude  the [causation                                         -7-            requisite  to confer  RICO  standing] exists."2   Heinold  v.                                                              _______            Perlstein, 651 F. Supp. 1410, 1412 (E.D. Pa. 1987) (plaintiff            _________            who  entered  into  contract  because  of  allegedly  illegal            activity of  defendant cannot  recover  for injury  sustained            because he lost the benefit of the bargain).                                         III                 Scivally  alleges that  appellees Graney  and Tognarelli            violated her right to free  speech and assembly, pursuant  to            29  U.S.C.    411(a)(2),3 when  they dissolved  the committee            without  consulting  its  membership.    The  district  court            granted summary judgment to defendants.                 Scivally cannot prevail on her   411(a)(2) claim because            she  cannot  show  that  the  dissolution  of  the  committee            interfered with any  right she possessed to  speak freely and            associate  with  other  members  of   a  labor  organization.            Scivally  alleges  that  the  committee  as  it  existed  was                                            ____________________            2.  Similarly,  appellant  suffered no  cognizable  injury in            being deprived of her rights to participate in an independent            labor organization prior to the dissolution of the committee.            On the  one hand,  absent the alleged  racketeering activity,            the  committee  would  not  have  existed.    On  the  other,            appellant  has  alleged  no  facts which  would  support  the            conclusion  that  but  for Polaroid's  establishment  of  the            committee,  Polaroid  employees  would  have  established  an            independent labor union.              3.  According to 29 U.S.C.   411(a)(2):                      Every member of  any labor organization  shall                 have  the right  to meet  and assemble  freely with                 other members; and to express any views, arguments,                 or opinions . . .                                         -8-            employer  dominated.     Employer  domination   of  a   labor            organization is an  unfair labor practice in violation  of 29            U.S.C.   158(a)(2).  Moreover, it has long been the policy of            the National  Labor Relations  Board [NLRB] that  an employer            dominated  union must  be  disestablished.4    See  Carpenter                                                           ___  _________            Steel Co., 21 LLRM 1232, 1234 (1948)  ("Where we find that an            ________            employer's unfair  labor practices have been  so extensive as            to constitute domination of  the organization, we shall order            its disestablishment . . . ") (stating NLRB policy); N.L.R.B.                                                                 _______            v.  Northeastern  Univ., 601  F.2d 1208,  1215 n.7  (1st Cir.                __________________            1979) ("the Board applies the theory that once domination has            been shown, no remedy  short of complete disestablishment can            ever be adequate").  While not necessarily requiring that the            committee be  dissolved, an order to  disestablish would have            required that Polaroid "cease to recognize [the committee] as            the collective bargaining representative of [its] employees,"            Swift & Co.  v. N.L.R.B., 106 F.2d  87, 95 (10th Cir.  1939),            __________      _______            and almost certainly would  have prevented the committee from            ever being certified by the NLRB, see N.L.R.B. v. United Mine                                              ___ _______     ___________            Workers, 355  U.S. 453,  458 (1958) (upon  finding domination            _______            "Board usually  orders the  complete disestablishment  of the            union so that it can never be certified by the Board again").            In other words, upon disestablishment, the committee would no                                            ____________________            4.  Scivally  concedes  that,  if  a  complaint  of  employer            domination had been  brought before the NLRB, the  NLRB would            have ordered the committee disestablished.                                         -9-            longer have been a "labor organization" within the meaning of            29 U.S.C.    402(i) & (j).5  However, the rights protected by               411(a)(2), which  Scivally  alleges were  violated by  the            dissolution,   belong   only   to   members   of   a   "labor            organization."      Therefore, on the basis of Scivally's own            allegations, even if Graney  and Tognarelli had not dissolved            the committee,  the disestablishment  of the  committee would            have been  necessary  to cure  an  unfair practice  and  that            disestablishment would have  extinguished any rights Scivally            had under   411(a)(2).  Since Graney and Tognarelli cannot be            said   to  have  violated  a  right  which  would  have  been            extinguished regardless of whether  or not they dissolved the                                            ____________________            5.  According to  29 U.S.C.    401(i),  for  the purposes  of            chapter 11 of Title 29:                      "Labor    organization"    means    a    labor                 organization  engaged  in  an   industry  affecting                 commerce . . .                              According to   401(j):                       A labor  organization shall  be  deemed to  be                 engaged in an industry affecting commerce if it--                        (1)  is  the  certified   representative  of                      employees under the provisions of the National                      Labor Relations Act . . . ; or                        (2) although not certified, is a national or                      international  labor  organization or  a local                      labor organization recognized or acting as the                      representative of employees of an  employer or                      employers engaged in an industry affecting                          commerce. . . .                                         -10-            committee, it was appropriate to grant them summary judgment.                 Affirmed.                 ________                                         -11-
