Supplemental Conditions

Commonwealth Court Strikes Blow to Philly Window and Door Ordinance

Posted in Construction Law

On December 22, 2016, the Pennsylvania Commonwealth Court issued an important opinion that has flown under the radar somewhat.  The case Rufo v. Board of Licenses and Inspection Review, invalidates a major portion of Philadelphia’s so called windows and doors ordinance, which requires owners of vacant properties to install glass windows and doors with frames on vacant properties.   A copy of the opinion can be found here.  (I only learned about the case because of a tweet by a litigator with the pro-freedom group the Institute for Justice.)

The Windows and Doors Ordinance

The case concerns Section 306.2 of the Property Maintenance Code which requires “the owner of a vacant building that is a blighting influence, as defined in this subcode, [to] secure all spaces designed as windows with windows that have frames and glazing and all entryways with doors.”  Property owners found in violation of the ordinance can face stiff fines.  Property owners are subject to a daily fine for each door and window in violation of the Ordinance.   The fine is $300 per window or door.  However, because most vacant properties have multiple windows and doors the fines can add up exponentially.

The key part of the ordinance is the term “blighting influence” and how it is determined that a property is a blighting influence.  The Ordinance only applies to those properties that are a “blighting influence.”  In other words, a property could be missing windows and doors but if it is not determined to be a “blighting influence,” then the property owner is not subject to the fines.

Under the Property Maintenance Code, there are two ways that a property is determined to be a blighting influence. First, there is an objective standard.  If the property without windows and doors is located on a block where 80% or more of the properties are occupied, it is a blighting influence.  Second, there is the subjective standard.  The Commissioner of Licenses and Inspections in consultation with other City officials, can declare a property a blighting influence if it has a significant adverse impact on the community based on variety of factors including, the safety of the surrounding community, community morale, marketability of the property, and the value of surrounding properties.

The Property at Issue

The property at issue is a large commercial property that was formerly a brewery.  In 2012, the City cited the property owner for violating the Ordinance – among other things.  Because of the number of windows and doors involved, the fines equaled $33,000 per day.  Moreover, the cost to replace all of the windows and doors exceeded the assessed value of the property.

The Appeal

The owner appealed the fine.  The owner argued that installing windows and doors would not make the property safer.  To the contrary, it would make it less safe as vandals could easily enter the building by breaking the glass. The owner pointed out that when he installed three windows at the property they were broken in a matter of days.  The owner further argued that the ordinance was concerned with making the property aesthetically pleasing rather than safe.  Finally, the owner argued that the ordinance was unconstitutionally vague.

The Board’s Decision and Appeal to the Trial Court

The License and Inspection Review Board upheld the fine.  The owner then appealed to the Philadelphia Court of Common Pleas.  The trial court overturned the fine.  The trial court found that the ordinance had a purely aesthetic goal because it was not aimed at making the property safe and had a minimal impact on reducing blight – if at all.

The Commonwealth Court’s Ruling

The City appealed the trial court’s order to the Commonwealth Court.  The Commonwealth Court upheld the trial court.  Like the trial court, the Commonwealth Court held that a municipality’s police power may not be grounded solely on aesthetics.  Despite the City’s claims that “numerous studies” showed that installing windows and doors reduced blight, the City could not point to any.  The Court also found that the owner could install wood and blocking behind the windows and doors to secure the property and still be in compliance with the ordinance.  Therefore, the ordinance was purely aesthetic.

Conclusion

There are several takeaways.  First, property owners cited for violating the windows and doors ordinance under the subjective standard should challenge the fine.  Second, when bureaucrats hostile to private property rights bully property owners, the property owner should first check to see if the ordinance or law is it susceptible to a challenge before he cedes his freedom to the state.

Texas Jury Awards $5.3 Million to Company Defamed by Union: Could it work in Pennsylvania?

Posted in Secondary Boycotts, Unions

In early September a Texas jury awarded a janitorial $5.3 million against the local chapter of the SEIU.  The janitorial firm claimed that the SEIU damaged its reputation and caused it damages when it spread false, defamatory, and disparaging stories about the firm.  Specifically, the janitorial firm claimed that the SEIU told the janitorial firms customer and potential customers that the firm “systematically failed to pay its employees for all hours worked, instructed janitors to work off the clock and had fired, threatened or refused to hire janitors who supported joining a union.”  According to Law360.com, the union did this with “fliers, handbills, letters, emails, newsletters, speeches and postings on its website accused [the firm] of violating wage-and-hour and other labor laws.”

The SEIU’s apparently tactics are hardly unique. Union campaigns that use fliers, handbills, letters, emails, newletters, ect. to pressure third-parties from doing business with a targeted employer are hardly unique.  In fact, they are quite common place in Philadelphia and its surrounding suburbs, particularly with the building trades unions.  Most of the business owners of the company’s that are the target of the campaign are frustrated – to say the least – with the truthfulness of the statements contained in the union’s literature.  For example, many unions claim a non-union employers pays substandard wages or wages less than what the union pays.  However, the union has no way of know whether that is truthful or not and the many firms offer packages that are better than the union rate.

Could a suit similar to the one brought in Texas be successful in Pennsylvania?  Yes.  In the Texas case, the SEIU was sued for defamation.  Pennsylvania recognizes the tort of defamation.  In the commercial context, defamation concerning a business is referred to as “commercial disparagement.”  A plaintiff in a commercial disparaging case needs to prove the following elements: (1) the statement is false, (2) the publisher either intends the publication to cause pecuniary loss or reasonably should recognize that publication will result in pecuniary loss, (3) a loss does in fact result, (4) the publisher either knows that the statement is false or acts in reckless disregard of its truth or falsity, an (5) no privilege attaches to the statement.

In many of the union campaigns that we see, the first three elements can usually be found.  The fourth could probably be proved through discovery, unless the plaintiff’s customer outright terminates their contract, in which case the company would have other remedies against the union.  The challenge would be element 5.

A conditional privilege attaches to a commercially disparaging statement when the statement involves some interest of the person who publishes it, some interest of the person to whom it is published or some other third person, or a recognized interest of the public.  KBT Corp. v. Ceridian Corp., 966 F. Supp. 369, 374 (E.D. Pa. 1997).  However, this privileged is lost when it is abused by “publication that is the result of malice, i.e. ‘a wrongful act done intentionally or without excuse or generated from reckless or wanton disregard of another’s rights.'”
There are no know reported cases in Pennsylvania involving a case against a trade union for commercial disparagement.  This might be because of the previous difficulty plaintiff had in proven the fifth element of the claim. However, as the Texas case showed, in the digital age proving that element is getting easier. In the Texas case, the plaintiff obtained emails showing that the intent of the union was to put the janitorial firm out of business and bragging about when the firm in fact lost business.  If a plaintiff can find emails like that, it makes it very hard for the defendant to claim that it was not acting in a manner done with the intent to harm the business.

Philadelphia Proposed Best Value Procurement Bill

Posted in Construction Law

An opinion piece in today’s Philadelphia Inquirer concerning proposed legislation that would change the way the City of Philadelphia awards public construction projects is causing quite a stir. The article concerns legislation that would allow the City to award public construction contracts based on a “best value” approach rather than the current requirement that the contract be awarded to the lowest responsible and responsive bidder.  The author worries that by removing the current objective criteria and replacing it with subjective ones, contracts can be steered to politically favored contractors.  The author cites the recent no-bid contract awarded to a law firm run by the friend of Mayor Jim Kenney as an example of the chaos would ensue if this bill was passed.

Considering that the Bill’s sponsor, Bobby Hennon, is under FBI investigation,  and some of the Mayor’s biggest supporters are as well, the author has ever right to be concerned.  However, article comes up short in explaining what the Bill says and what best value procurement, if adopted, would mean for public construction work in Philadelphia.

First, the Bill that Councilman Hennon is proposing is actually a Bill that would make the best value procurement question a ballot question next November.  In other words, the Bill, if passed, would but to a City wide vote the question of whether the City should change it procurement practices to permit the best value approach to be used in addition to the low bid approach that is current used.

Second, the best value approach that the citizens would be asked to vote on in November, would not permit the current administration – or any future administration – to steer contracts to favored contractors by fiat or decry. Rather, before the best value approach can be used, the Procurement Commissioner must determine in writing that the low bid approach may not yield the best value to the City.  This would be done proposals for the project are solicited.

This approach is similar to the approach that the Commonwealth uses and has been permitted to use since 2014 (the federal government also uses a best value approach).  Under 62 Pa.C.S.A Section 513, when a contracting officer determines in writing that the use of the low bid approach is not practicable or advantageous to the Commonwealth, a best value approach may be used.

While low bid does provide objective criteria that can prevent corrupting and favoritism, it also can cost the taxpayers more money because the contract has to be awarded to the low bidder who sometimes provides inferior work that has to be corrected.  Or, the contractor intentionally underbids the project only to make up the difference via change orders.  The key to best value working is to require that the criteria for evaluating each proposal be adequately set forth in the request for proposal.  That way if a proposal is simply steered to a favored contractor without regard to the evaluating factors, the award is subject to challenge.  I would suggest that the City go one step further an adopt requirements similar to the federal rules that mandate that the contracting officer support in writing the award to a specific contractor.

The Biggest Change to the Mechanics Lien Law Since 1963

Posted in Mechanics Liens

The New Year will bring with it the biggest change to Pennsylvania’s Mechanics Lien Law since the current law was passed in 1963.  These changes will impact owner, contractors, and subcontractors equally.  However, the biggest benefits will probably be for real estate developers and other project owners.

On December 31, 2016, Pennsylvania will go live with a website known as the State Construction Notices Directory. On that date, owners will have the option of making projects costing $1,500,000 or more “searchable projects.”  An owner makes a project a searchable project by filing with the Notices Directory a “Notice of Commencement” before works begins.  The Notice of Commencement must include the name, address, and email address of the contractor, full name and location of the searchable project, the county where the project is located, a legal description of the searchable property, and the name address, and email address of the searchable project owner. Importantly, the owner must also post a copy of this Notice of Commencement at the project site.

If an owner does this, a subcontractor wishing to maintain its lien rights must file a Notice of Furnishing within forty-five (45) of first performing work on the project.  The notice of furnishing must include the general description of the labor and materials provided, the full name and address of the person supplying the services or items, the full name of the person that contracted for the services, and a description of the searchable project.

The impact of these changes cannot be emphasized enough.  First, subcontractors can no longer wait to take action in order to preserve their lien rights.  This means no more waiting for your invoice to age a few months before filing a lien. The old rule that you have six months after completion of your work to file your lien no longer applies if you fail to act within 45 days of starting your work.

Second, owners need to diligent file the Notice of Commencement and post the Notice at the project.  It is expected that many subcontractors (at least those that do not follow this blog) will not file a required Notice of Furnishing within forty-five days of beginning their work.  That means if you – the owner – have filed the required Notice of Commencement you can bar a significant number of mechanics liens.

These rules only apply to projects beginning on or after December 31, 2016.  But failure to understand these new rules going forward will have significant consequences to owners and subcontractors.

Civil RICO Case Against Johnny Doc Is Challenging

Posted in Unions

News that a non-union contractor had filed a Lawsuit against IBEW Local 98 and its leader, John Dougherty, made headlines this week.  While making fodder for local media, the plaintiffs must bound several legal hurdles before IBEW Local 98 and “Johnny Doc” face any threat of liability.

Background on RICO

The lawsuit was filed under a set of laws known as the Racketeer Influenced and Corrupt Organizations Act (RICO).  I have written about RICO’s impact on labor unions on this blog before and predicted that recent federal court cases made RICO claims against more viable.  RICO is a Nixon era set of laws that were originally passed to combat organized crime.  There is both a civil and criminal component to RICO.  (Interestingly, the RICO act remained relatively dormant until then U.S. Attorney Rudy Giuliani began effectively using it to prosecute the mob in the 1980’s.)  Although recent decisions have made RICO claims against unions more viable, any RICO claim is still challenging.  Indeed, some courts require a plaintiff in civil RICO cases to file a separate RICO case statement detailing its allegations.  RICO claims are powerful.  Some have called RICO claims a “thermonuclear” litigation device because the law permits the award of trebel (triple) damages and attorneys fees.

The Elements of a RICO Claim

Generally, to prove a civil RICO claim, a plaintiff must prove  the following elements: (1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity.  Racketeering activity is defined as specific “predicate acts” under the RICO.  And, by pattern, the Courts mean two or more.  RICO predicate acts are specific and include things such as murder, kidnapping, robbery, bribery, extortion, drug dealing, mail fraud and wire fraud.  Bad conduct alone, no matter how salacious, is not a predicate act.  The conduct must qualify as one of the specific predicate acts defined in the statute and most of the predicate acts are federal crimes.

The Predicate Acts in the IBEW Case

As outrageous as the allegations are against IBEW, none of those allegations matter if they do not amount to a “predicate act” under RICO.  In fact, those allegations appear to be mere window dressing because fighting, intimidation, and name calling are not predicate act. That is not to say they are not crimes.  They could be.  They just are not predicate acts under RICO. In fact, the plaintiff does not even try to argue that they are. Rather, the specific predicate acts that plaintiff identifies in the IBEW case is extortion under the Hobbs Act and under Pennsylvania law.  So, plaintiff has to prove that IBEW attempted to extort him or outright extorted him.

Under state law, extortion requires that someone actually give up property or money because of some threat.  In the IBEW case, it does not appear that IBEW acquired property from the plaintiff as a result of the threats.  Plaintiff does not even plead that happened.  Thus, it is not likely plaintiff’s case will be successful under a theory that IBEW violated state extortion laws.

However, under the Hobbs Act, the extortion need not actually occur.  Instead, a violation of the Hobbs Act occurs based upon the mere attempt at extortion.  The allegation that IBEW violated the Hobbs Act is were things could get interesting.

Thing gets interesting because of another RICO case involving a Dougherty and a labor union – Joe Dougherty in the Ironworkers criminal case.  In that case, the defendants moved to dismiss the indictment alleging that the government could not prove a predicate act under the RICO.  The predicate act that the government relied upon in that case – the Hobbs Act – is the same predicate act the plaintiff in the IBEW case relies upon.

In that case, the Court refused to dismiss the indictment against the Ironworker defendants based upon inability to use the Hobbs Act against labor unions.  The Judge in that case ruled that union can commit a violation of the Hobbs Act when it uses violence and threats of violence to obtain “services which the employer [does not seek]” or unwanted or fictitious work.  The Judge that decided that case – Judge Michael Baylson.  The Judge in the IBEW case – yep – Judge Baylson.

The Plaintiff’s Specificity Problem

While you might be thinking this is all good news for the plaintiff, not so fast my friend.  Courts require civil RICO acts to be plead with specificity.  The IBEW plaintiff claims that IBEW tried extorted him in order to obtain “wages and/or other property.”  However, the plaintiff does not explain what wages or property IBEW would have obtained from him if the extortion were successful.  Perhaps more importantly, it is not clear from the pleading that the attempted extortion to obtain the wages and property happened on more than one occasion or just the day of the fight.  It is also not clear if the union’s misconduct was in an effort to extort him or because they just didn’t like him.

IBEW lawyers will surely seize on this and other defects in the pleading in a Motion to Dismiss.  If they do, odds are they will be successful.  If they are not, then significant precedent will be set.  Furthermore, the case will proceed with discovery and things will get very interesting.

Federal Judge Rips Shady Procurement Practices at DRPA

Posted in Public Bidding

In an opinion overturning a $17,000,000 bridge painting contract for the Commodore Barry Bridge, a United States Federal Judge called the procurement practices of the Delaware River Port Authority “a black box . . . obscure and unexplained, and lacking any indicia of transparency or the hallmarks of a deliberative process.”

The case involved lead paint remediation and repainting of the Pennsylvania span of the Commodore Barry.  Seven contractors submitted bids.  Alpha Painting was the apparent low bidder.  Corcon was the second low bidder. Corcon was also the contractor that was perform the painting work on the New Jersey span of the bridge.  Like most agencies engaged in public bidding, the DRPA requires contracts to be awarded to the lowest responsible and responsive bidder.

Six weeks after the bids were opened and read aloud, “after an undocumented process shrouded in mystery and obscured from public scrutiny, the DRPA notified Alpha by an undated letter that it had determined that Alpha was ‘not responsible,’ and rejected its bid.”  After unsuccessfully protesting the decision with the DRPA internally, Alpha filed a bid protest complaint seeking injunctive relief against the DRPA.

After a three day trial, Judge Noel Hillman of the United States District Court for New Jersey, entered an order and opinion granting Alpha the injunction it requested and ordering the DRPA to award the contract to it rather than Corcon.  Judge Hillman’s opinion provides a scathing review of the DRPA’s procurement practices.  Ultimately, Judge Hillman ruled that the DRPA acting arbitrarily, capriciously, and without reason. The opinion describes a culture at the DRPA that is designed to steer contracts to favored contractors rather than to award contracts to the lowest responsible bidder.

The DRPA gave two reasons for ultimately determining – six weeks after opening its bid – that Alpha was not a responsible contractor.  First, the DRPA said that Alpha had not included certain OSHA 300 forms with its bid. Second, the DRPA claimed that Alpha’s “experience modification factor” (EMF) was too low.

As to the OSHA 300 forms, the Court noted a factual dispute as to whether the forms were included with the bid or not.  Alpha claimed they were included and the DRPA claimed they were not. Notwithstanding this, the Court concluded that whether the forms were missing or not was a red-herring as the DRPA admitted it did not rely on the forms at all in evaluating a contractor’s safety record.  Instead the DRPA admitted it simply looked to see if the forms were completed and signed.

As to the EMF score, the Court explained that an appropriate score could only be achieved by contractors that had successfully completed projects in New Jersey and Pennsylvania.  As the Court observed, “the testimony established that a company can paint the Golden Gate Bridge for ten years in a row and not hurt so much as a sea gull and it will lose a DRPA bridge contract to an incumbent contractor who has to pay a penalty rate for insurance based on its recent employee injury records in New Jersey or Pennsylvania.”  Alpha, a Maryland contractor, had not completed enough projects in Pennsylvania and New Jersey to be eligible for an EMF score.  However, the DRPA’s chief engineer testified that there was no reason to doubt that Alpha was a responsible party with a good safety record. This led the court to conclude that the DRPA’s decision to declare Alpha non-responsible based on a EMF score irrational and incapable of “withstand[ing] even a cursory review much less scrutiny.”

However, the Court did not end by simply debunking the DRPA’s stated reason for rejecting Alpha.  Instead, the Court noted that the DRPA “recalculated” the bids so that Corcon, not Alpha, was the lowest bidder.  While this would appear objectionable on its face, for good measure, the Court found that the DRPA’s policies did not permit this practice.  Furthermore, the Court found that the DRPA permitted Corcon to supplement its bid with missing information after the bids were opened.  In fact, the DRPA went so far as to call Corcon’s insurance broker directly and ask that he supply certain forms that Corcon had omitted from its bid.

Based on these circumstances, the Court awarded Alpha the relief it requested and ordered the DRPA to award the bridge painting contract to it.

 

 

Details Matter: The Importance of Strictly Following Public Bid Statutes

Posted in Construction Law

Contractors bidding on public contracts know that failing to strictly following all of the technical aspects contained in the instructions to bidders can mean the difference between a winning and losing bid.  In the span of two weeks, I was involved with two cases that underscored the importance of this axiom.  Both cases involved New Jersey’s public bid laws.  While these cases show the importance of following a specific section of New Jersey’s public bid statute, the take away – that details matter – is universal.

The case involved a sewage authority project.  I represented the second low bidder.  The first low bidder submitted a bid package that was complete except for one technical aspect.  It failed to list the name of its electrical subcontractor on the “Subcontractor List” form provided by the authority in the bid package.  Both the instructions to bidders and Section 23.2 of the New Jersey Local Public Contracts Law required that the contractor list the names of its electrical, plumbing, and mechanical subcontractors.  The apparent low bidder listed the name of its plumbing and mechanical subcontractors but not the electrical subcontractor.  Notwithstanding our objections, despite the omission of the name of the electrical subcontractor, the authority decided to award the contract to the apparent low bidder.

Therefore, we challenged the award of the contract to the apparent low bidder in Court by seeking an injunction.  We argued that the instructions to bidders and the New Jersey Public Contracts Law were clear: if a contractor fails to list the name of its electrical subcontractor it is a fatal bid defect, which the local contracting agency cannot waive. The apparent low bidder argued that its failure to list the name of its electrical subcontractor caused no prejudice to the local agency (and ultimately the taxpayers) because the name of its electrical subcontractor was identified elsewhere in the bid package.

The trial court held that the apparent low bidder’s failure to list the name of the subcontractor on the bid form was a fatal non-waivable bid defect and concluded that the authority’s decision to award the contract was in error. Throughout its opinion the trial court emphasized that strict compliance with the bid statutes and instructions to bidders is required in order for a bid to be deemed responsive.  Importantly, the trial court noted bids containing technical defects should still be rejected even when there is an increased cost to the taxpayers because “the overriding interests in insuring the integrity of the bidding process is more important than isolated savings at stake.”

New Jersey Supreme Court Issue Important Decision for Homeowners and Contractors

Posted in Construction Law

The lack of insurance coverage for a contractor’s faulty workmanship is the bane of both homeowners looking to recover damage for defective work and contractors seeking to defend against such claims.  In many states, like Pennsylvania, courts hold that faulty workmanship is not an “occurrence” that is covered by a standard commercial general liability insurance policy.  In other words, courts hold that CGL policies cover damage to other property not part of the construction project itself.

This is problematic for both the homeowner and the insured.  For the homeowner, the lack of a policy providing indemnification sometimes means the homeowner is left trying to collect against a defendant, who is otherwise but has little to no assets against which to collect a judgment.  For the contractor, the lack of a policy providing coverage means that assets are at risk and it could be forced to spend significant sums in attorneys fees defending the case.

In Cypress Point Condominium Association, Inc. v. Adria Towers, LLC, the New Jersey Supreme Court held that a contractors standard CGL policy covers consequential damages caused by defective workmanship, even if the consequential damages are to the project itself.  At issue in Cypress Point Condominium Association, was language contained in a standard ISO CGL policy that is used in as the standard language in a majority of policies.  The case arose out of a dispute between the insured contractor and its insurer over whether damage caused by leaking windows and facades was covered under the contractor’s CGL policy.  The Court held that such damages are covered holding:

“because the result of the subcontractors’ faulty workmanship here—consequential water damage to the completed and nondefective portions of Cypress Point—was an “accident,” it is an “occurrence” under the policies and is therefore covered so long as the other parameters set by the policies are met.”

The importance of this holding is significant.  First, homeowners stand a much better chance of collecting on a damage claim against a contractor found liable for defective work.  Second, contractor’s can expect coverage from their carriers in almost all defective construction claims.

 

NLRB Issues Decision with Significant Impact on Construction Industry

Posted in Unions

On July 11, 2016, the National Labor Relations Board issued a decision stating that unions can include both sole employees and joint employees into a single bargaining unit without the consent of both employers.  The case, Miller & Anderson, Inc., called upon the Board to revisit its holding in Oakwood Care Center, which held that a union could not seek to hold an election of a bargaining unit of solely and jointly employed individuals without the consent of both employers.  The decision has a significant impact on any contractor using temporary staffing services.

In Miller & Anderson, the sheet metal workers petitioned to represent a unit of employees solely employed by Miller & Anderson and those Miller & Anderson had leased through a construction industry staffing agency known as Tradesmen International.  The Regional Director dismissed the petition for an election based on the Board’s holding in Oakwood Care Center, which would required both Miller & Anderson and Tradesmen to consent to the election – which they did not.

The union appealed and the Board overturned the Regional Director and returned to the law that existed under its decision in M.B. Sturgis, Inc.  In doing so, the Board held that employer consent is not required for a bargaining unit of sole and joint employees so long as the employees maintained a traditional community of interest.

The decision is problematic for several reasons.  First, in the 16 years the standard has gone from no employer consent being required, to employer consent being required, and now back to employer consent not being required.  The is prejudicial to both employers and unions that seek to represent their employees because there is simply no certainty on what they law is or will be. The Regional Director’s dismissal was not overturned because he applied improper law, it was overturned because the NLRB did not like the law that existed, so the Board decided to change it by fiat.

Second, the decision will create tripartite bargaining between unions and two employers that have little common interests.  Because employers only have a duty to bargain but not to enter into an agreement with an union, it is unlikely that any workers will actual become represented by the union.

Third, make no mistake about it, this is a huge win for labor and will lead to many backdoor unionization of merit shop employers who use temporary employees, especially contractors will smaller full time employees.  For example, after Miller & Anderson, the unions can sneak salts onto a merit shop employers project.  If that contractor only had two full time employees and it leases three employees that happen to be covert union salts, the contractor will lose a union election no matter what it does.

Indicted Union Representatives Try Again to Revive Enmons

Posted in Unions

The Boston Globe reports that the Massachusetts AFL-CIO has filed a friend of the court brief seeking to have the indictment of five members of the Teamsters Union in Boston dismissed.  The Teamsters members are facing federal charges that they extorted non-union contractors and owners that employed non-union contractors.  The Massachusetts AFL-CIO is arguing that under the Supreme Court’s 1972 decision in U.S. v. Enmons the Teamsters alleged conduct was in furtherance of a legitimate union objective and, therefore, no illegal.

The move is a Hail Mary for unions.  Under Enmons, unions used to enjoy broad immunity from criminal prosecution for activities that would land anyone else in jail.  However, Federal Courts have repeatedly walked back the breadth of Enmons and recent prosecutions in New York and Pennsylvania show that Enmons does not provide unions protection from extortion claims when they seek to intimidate non-union contractors and real estate developers into giving work to union affiliate firms.

We should expect a decision from the federal court in Boston in a few months.  Hopefully, the court reaches the same result as the courts in New York and Pennsylvania.