May 2016

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.

Earlier this year, I wrote about the indictment of the owners of a union construction company that was improperly operating a double breasted (a union firm and a related non-union firm) operation.  That indictment alleged that the owners of the union firm failed to pay union members fringe benefits and wages when the union employees worked for the non-union firm.  As I said in that post, it should be concerning that these allegations led to a criminal indictment because usually these types of allegations were dealt with in civil suits brought by the union.

This past week the U.S. Attorneys Office in Chicago announced the indictment of executives of a construction company for, among other things, failing to pay fringe benefits owed to union health, welfare, and pensions funds. This type of wrongdoing was also usually dealt with a civil lawsuit brought by the union health and welfare funds against the contractor that owed the money to the funds.

Union contractors with obligations to health and welfare funds need now need to worry that failing to pay the union funds could result in more than a simple collection action in federal court.  These two cases signal it could mean jail time.

Today, in a precedential opinion, the Third Circuit Court of Appeals, affirmed the District Court’s dismissal of a complaint against my client that alleged that a multi-family building was constructed in violation of the Federal Housing Administration’s (FHA) design and accessibility requirements for disabled persons.  A copy of the Opinion can be found here ( Opinion of 3rd Circuit. ) An adverse decision would have meant that my client could have been exposed to making several million dollars in alterations to its building.

A disabilities rights group filed a complaint against my client in the United States Federal District Court alleging that a multi-family (100+ units) building was constructed in violation of the FHA’s requirements for accessibility by disabled persons.  The project was a multi-million dollar renovation of an old abandoned warehouse into a state of the art apartment building.  The building was original constructed in 1912.  Although FHA and Department of Justice guidelines made clear that the FHA’s requirements did not apply to any building originally constructed before 1988, even if the property was original built and occupied for commercial purposes.  We filed a motion to dismiss the complaint which the District Court granted.  The rights group then appealed.

As the Third Circuit points out in the its opinion, there was no controlling case law on this issue, even though the FHA’s guidelines had existed for nearly 25 years.  The Third Circuit has now filed that void and issued a precedential opinion that says the FHA’s requirements indeed do not apply to building originally constructed before 1988 for any reason and then converted into residential use.

While the Court’s decision likely saved my client significant sums of money, it likely saved apartment developers and other building developers even more.

 

Yesterday, in a case that attracted wide spread media attention (stories here and here), a jury in federal court ruled that the City of Philadelphia violated my client’s first amendment free speech rights when a Philadelphia City Councilperson blocked the sale of two city owned vacant lots to him in retaliation for my client challenging him for office.  The decision has been declared a landmark decision and the first of its kind.  It is humbling that the jury agreed with my argument and ruled in favor of my client.

The case involved an official custom and practice in Philadelphia known as Councilmanic Prerogative, which requires anyone wishing to acquire land owned by the City of Philadelphia to first obtain permission from the City Councilmember in whose District the property is located.  It then requires the same City Councilmember to introduce legislation approving the sale.  Obviously, this practices gives City Councilmembers a vast amount of power of land sales in their respective district.  If the City Councilmember does like you, you cannot acquire a parcel of land owned by the City.

In my case, my client was the highest bidder for two lots at a public auction for City owned land.  At the time, my client was was in a pitched election campaign against the City Councilmember in whose District the land was located. When it came time for the City Councilmember to introduce legislation approving the sale, the City Councilmember did something he has never done before (nor since) he refused to introduce the legislation.  After a two day trial, the jury agreed that the City Councilmember refused to introduce the legislation in retaliation against my client for engaging in protected political speech.

Some have asked if the jury’s verdict does away with Councilmanic Prerogative.  It does not.  However, it does mean that the City of Philadelphia can be held liable when it is used in an unconstitutional manner.

Of course, not everyone that is thwarted in an attempt to obtain City owned land happens to be a political candidate. But, the breadth of the jury’s verdict is not limited to that.  The First Amendment protects both our right to free speech and not to speak at all.   Although controversial, donating money to a campaign or using money for political purposes is a form of speech.  Conversely, not giving money to a political candidate or cause is also free speech.  In other words, you cannot be treated differently because you chose to remain neutral or disinterested.

Sadly, in the City of Philadelphia, the birth place of freedom, unequal treatment because of political affiliation and support is common place.  Campaign contributors have a better chance of obtaining City owned land from City Councilmembers because the Citycouncilmembers support them.  Under Councilmanic Perogative, if you have no support, you cannot obtain any land.

After yesterday, that is no longer possible.  If a Philadelphia City Councilmember treats a person that is NOT a campaign contributor differently than the way they treat someone that DOES contribute, then they have violated that non-contributor’s First Amendment right not to speak.  And, if they do the City will be liable for damages.