14 This argument was presented for the first time in a letter from John Serpico at the January 18 meeting, shortly after he had been notified that he would be suspended in the wake of the adoption of the new code. R.V.10, Exh. 15 (1/18/95 Letter). In that letter, Serpico dropped his argument from the January 4 GEB meeting where he had expressed a desire to determine the effects on himself personally.

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21* Although Judge Zagel found it unnecessary to reach the second basis of the GEB's decision, this Court can uphold the decision below on any appropriate ground. Simmons v. Pryor, 26 F.3d 650, 653 (7th Cir. 1993), cert. denied, 114 S.Ct. 1883 (1994). The

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The following facts are uncontroverted:

• Up to January 11, 1995, LIUNA had negotiated vigorously in an effort to avoid an all-out court battle in which the government would attempt to take over LIUNA and have court officers perform the functions of the duly-elected Union leadership. See generally Luskin Dep. 66-1763 (describing negotiations).
• On January 11, 1995, top government officials verbally rejected the Union's compromise approach to resolving the issues raised by the draft civil RICO complaint, stating for the first time that the "gap" between the parties "was too broad to bridge." The government made clear that litigation would follow "within a matter of days." Luskin Dep. 171-72, 176.
• On January 12, 1995, the government formally notified the Union in writing that it was unwilling to forgo litigation unless the Union agreed to six key points that were tantamount to a complete government takeover of the Union. 1/12/95 Letter.
• On January 13, 1995, LIUNA appealed this decision to John C. Keeney, Deputy Assistant Attorney General for the Criminal Division, who, in a matter of hours, summarily rejected the Union's proposal of its compromise plan. Luskin Dep. 230-31.
• …Luskin immediately asked Coia to convene a meeting of the GEB to address the imminent lawsuit. Later that day, however, Luskin learned that his father had suddenly passed away and, upon his request for "a personal favor," the government agreed to "stand down for a couple of days" before filing suit. Luskin Dep. 233, 236.
• …The government thereafter set January 19, 1995, for what appeared to be the Union's last appeal within the Department of Justice hierarchy -a meeting with Assistant Attorney General JoAnn Harris. Any further DOJ review was understood to be "on sufferance." Luskin Dep. 236, 252.

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government's draft RICO complaint specifically charged that LIUNA was operated illegally because it had no mechanism to deal with organized crime. Draft RICO Cmplt., 169. The EDP expressly resolved this issue and thereby caused the LIUNA Constitution to conform to or comply with law. EDP, 1 Under the LIUNA Constitution, this basis is sufficient to uphold the GEB's actions even if no emergency existed. Art. VIII, ฿2(b).

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In short, when the GEB met on January 18, 1995, it correctly believed "the planes were in the air." The Union's last appeal was the next day. The filing of the government's complaint was imminent, and the government had made clear that it would "move promptly, very promptly for a preliminary injunction." Luskin Dep. 225, 236.²²

The GEB seemingly had no options to avert the crisis. The sole alternative acceptable to the government was agreement by LIUNA to the government-drafted proposed consent decree of December 14, 1994. See 1/12/95 Letter. Like a preliminary injunction in litigation, however, that decree would have resulted in a government takeover of the Union. Prop. Cons. Decree, 14.  In addition, it would have expelled Caivano and Serpico without due process. Id., 8

Although DOJ had previously rejected voluntary action by the Union as a means to forestall litigation, adoption of the Ethics and Disciplinary Procedure addressed at least some of these dire circumstances:

• Such dramatic action would demonstrate to Ms. Harris that the Union was serious about taking reform measures on its own and thus might persuade her that a lawsuit was unnecessary to accomplish her goal.Coia Dep.II 123.

• If the government did file, the Union's reforms would protect against an adverse result in a preliminary injunction hearing. Since the Union was taking fair and credible steps on its own, there would be no emergency and hence less of a basis for the government to gain control on an expedited basis. Id., 123-24.

• For like reasons, the Ethics and Disciplinary procedure reduced the government's prospects in a permanent injunction hearing.

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²² Luskin did not "concede" that "no immediate relief would have occurred," as plaintiffs' contend (Br. 30, n.11, citing Luskin Dep. 398). Rather he said that no relief would be entered "automatically."

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Last but not least, the Ethics and Disciplinary Procedure gave LIUNA, for the first time, a substantive means and an independent investigative procedure to strike at mob influence in the Union. As Coia testified, "it was appropriate, ethically right," the best way to break the stranglehold of La Cosa Nostra ("LCN") influence on key parts of the Union. Coia Dep.II 94, 123-27.

Facing these compelling and undisputed facts, along with the insurmountable legal standards and constitutional language, plaintiffs' brief resorts to a litany of speculative arguments, which, if anything, actually support the decision below. (Br. 26-27) Plaintiffs begin by noting that the DOJ had rejected the EDP concept and did not know it was before the GEB for adoption, as if to prove that the GEB could not reasonably have believed that it would dissuade the DOJ from filing a lawsuit. But not only was it reasonable to believe that actions would speak louder than words, it is uncontested that they did so. The actual adoption of the EDP "changed the context of the conversation [with the DOJ] rather dramatically." Luskin Dep. 314-315. Although the government was not yet ready to abandon its hardline position, the new procedures restarted the negotiations and eventually led to a provisional resolution of the government's claims.

Next, plaintiffs assert that there is no evidence that the stated basis for the adoption of the EDP was in fact the basis. Contrary to their assertion, however, the minutes themselves state that the Board was acting because an "emergency situation [had] developed." 1/18/95 Minutes. There is no contrary evidence. Plaintiffs say they were entitled to pursue discovery about how thoroughly the Board considered the circumstances, but plaintiffs have already done so, and the results are devastating to their claims. In a deposition taken by

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plaintiffs, Luskin testified, without contradiction, that he fully informed the GEB about "what had transpired with the Department of Justice, what the likelihood of litigation was, what if anything was likely to happen next in [LIUNA's] discussions with the Department of Justice, what the possible outcomes were and what effect . . . they would have, and what actions the Union might take in connection with those developments." Luskin Dep. 245.

Plaintiffs further argue that the threat of litigation was an insufficient basis to find an emergency, asserting that "a big fat RICO action" is nothing to be afraid of. (Br. 27). Once again, the record is directly to the contrary. Uncontradicted evidence showed that:

• The nationwide publicity from the mere filing of the litigation would have interfered with virtually every Union activity, shutting down its recruitment drives, crippling its collective bargaining efforts and impeding its educational programs. Coia Dep. I, 67, 69. The resulting loss to the Union would be in the "millions of dollars," including the massive legal fees committed to its fight for survival. Id., II, 6.
• Facing an immediate preliminary injunction hearing with little tangible evidence of its efforts to fight mob influence, the Union ran a very real risk that within weeks, possibly even days, the government would have gained effective control over the Union. Luskin Dep. 223, 225.
• Whatever the initial outcome, the government would likely have succeeded in the end. As Coia testified, "I believe the government would have been successful. They haven't lost a case like this in any one they have ever bought." Coia Dep.II 28.
• The near-term result would be to have "taken away the union running the union as an organization." Id. The long-term prospects were even more bleak. Under government control, the Teamsters found themselves close to insolvency, lacking the resources necessary even to run a union election. Id.

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Perhaps plaintiffs in the security of their own offices, without any real responsibilities for union affairs and concerned only for their self-interest, do not need to be concerned about "a big fat RICO action" or its consequences. But the members of the GEB did not have any similar luxury on January 18, 1995. Nor would they have acquitted their constitutional responsibility to the Union membership to "preserve the International Union as an institution" or done what is "necessary to carry out [its] objects and purposes" if they had adopted plaintiffs' cavalier attitude. Art. II, ฿฿2(f),(j). Indeed, it is plaintiffs' approach, not that of the GEB, that would have rendered these terms of the LIUNA Constitution "not worth the paper they are written on." (Br. 27)

Finally, plaintiffs assert that the outcome of a RICO lawsuit was too speculative to warrant decisive GEB action. Id. The record was, however, uncontradicted that the mere filing of the litigation would have cost the Union "millions of dollars" and that the most likely outcome was the end of "the union running the union as an organization." Coia Dep.II 6, 28. In addition, plaintiffs' argument only emphasizes the propriety of the GEB's decision here. The GEB had a difficult call to make on January 18, 1995. It faced ruinous litigation and possibly disastrous long-term consequences, without any certainty about what the exact outcome would be. In precisely the manner authorized by the LIUNA membership in its Constitution, the GEB made the best judgment it could in these trying circumstances. If the decisions of this Court and the language of the LIUNA Constitution mean anything, it is that the GEB cannot be second-guessed on the basis of plaintiffs' speculation about what other outcomes there could have been.

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The irony in plaintiff's argument is that we do know, after the fact, how the GEB's decision turned out. The government did not sue. Still independent, LIUNA has made great strides in ridding itself of organized crime. Far from "unreasonable, perhaps patently so," the GEB's decision has proved to be one of the great successes in union reform in recent memory. For all these reasons, summary judgment was proper on plaintiffs' claims.

II. There Was No Evidence Of Bad Faith.

Without evidence that the GEB's action was "unreasonable, perhaps even patently unreasonable," or inconsistent in any way with the express language of the LIUNA Constitution, plaintiffs next attempt in this Court, as they did below, to circumvent the required dismissal by impugning the motives of General President Coia and the GEB. Like Judge Sullivan, Judge Zagel rejected plaintiffs' rhetoric and innuendo on this subject because they were unsupported in, and indeed refuted by, the record facts. This Court should reach the identical conclusion.

In the district court, plaintiffs attempted to show bad faith primarily by attacking Arthur Coia. Through a variety of misrepresentations, several of which are repeated here,²³ they tried to create the impression of a secret deal or understanding with

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²³ Among other things, plaintiffs assert that the DOJ insisted at the November 16 meeting that Coia "must" resign, whereas no such statement was ever made. See supra, pp.8-9, n.5. They state that Luskin reported only to Coia, which ignores the multiple special GEB meetings in which Luskin reported to the entire Board on all aspects of the negotiations. See infra, p.45-6. They then misrepresent the contents of the January 12 DOJ letter to make it appear that Coia was still a target whereas the six "non-negotiable" items in the letter (all omitted by plaintiffs) do not even mention Coia. See supra, p. 12, n. 11.

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the government under which the DOJ agreed to treat Coia as "a favored son" if he would "sacrifice" or "serve up" Serpico and Caivano in return.

No part of this argument was or is defensible on the record facts. Nine other members of the GEB, an overwhelming majority, voted for the reforms. Not one of these other members has ever, to this day, been accused of impropriety of any kind. In addition, contrary to the implication in plaintiffs' brief, these other members were fully informed when they voted on the EDP. They knew "what had transpired with the Department of Justice, what the likelihood of litigation was, what if anything was likely to happen next in [LIUNA's] discussions with the Department of Justice, what the possible outcomes were and what effect . . they would have, and what actions the Union might take in connection with those developments." Luskin Dep. 245.

Second, there is not a scintilla of evidence to support any kind of deal or understanding with the DOJ on Coia's behalf or anyone else's. As Judge Zagel stated, "[i]t is for the government to decide who it will prosecute" and who not. Op., p.8. In this case, the undisputed facts are that the government decided unilaterally, at the time of the December 14 Consent Decree, to drop Coia as a defendant in his personal capacity and to focus instead on Serpico and Caivano. Defs. Stmt. Uncont. F.

41. It never altered that decision thereafter. There is no document, testimony or other evidence to show that the DOJ made this decision at the behest of or with the agreement, tacit or otherwise, of the GEB. As for the EDP itself, even plaintiffs admit that it was adopted without the prior knowledge or agreement of government officials and came as a complete surprise to them. (Br. 26)

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Nor did Coia and the other GEB members "protect themselves" with the EDP. Adoption of the EDP was not conditioned on any government or concession whatsoever and, if anything, increased the discomfort of any alleged wrongdoer on the GEB by adding a new, independent group of officials who could prosecute them. Unlike most settlements with the government, moreover, the February 13 agreement did not insulate any union official from prosecution by the government. LIUNA Govt. Agr.,

2. To this day, the government retains the right to proceed against the very officials who plaintiffs say were out to "protect themselves." Id. Far from having been treated as a "favored son," Coia has been under continuous investigation by the GEB Attorney almost since the day the EDP was adopted. Coia Dep.I, 124-25; Luskin Dep. 406-07.

Finally, far from having "sacrificed" Caivano and Serpico, the GEB actually protected them. LIUNA always retained the option of entering into the December 14 Consent Decree, which would have resolved the crisis by permanently debarring Serpico and Caivano from the Union without a hearing. Prop. Cons. Decree, 114(e); Luskin Dep. 20203. Nevertheless, Coia and the GEB expressly refused to do so. Coia Dep.I 229-30. They took action against Serpico and Caivano only after adoption of the EDP guaranteed these members full due process in adjudicating the charges against them. Defs. Stmt. Uncont. F. 164.

Unable to avoid these crippling defects in their case below, plaintiffs' brief in this Court attempts to dress up their old "bad faith" argument in different garb. Thus, they contend that "the GEB sought to ensure their continued positions and perks by excluding a probability that the members would reject their cozy arrangement." (Br. 30) But these are

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indisputably the Emperor's new clothes, for no part of this sentence has any basis in logic or the record in this case.

First, it is nonsensical to assert, as plaintiffs do, that the GEB sought to "ensure" anything by adopting the EDP unilaterally, without any knowledge by, promise from or agreement with the government. Even plaintiffs acknowledge that the government had previously rejected the approach embodied in the EDP as the solution to the controversy. (Br. 26) The EDP in fact represented a calculated gamble to avoid the Scylla and Charybdis of the government's only two options -- ruinous litigation or unconditional surrender under the terms of a consent decree ensuring a government takeover and expelling Serpico and Caivano without a hearing. The reforms might cause the government to forbear and would, in any event, give LIUNA defenses in a preliminary injunction hearing or on the merits. They "ensured" nothing, however, other than that the Union would henceforth have a means to attack internal corruption.

Nor did the GEB's action ever protect "their continued positions and perks." The reason is that those "positions and perks" were never at risk. Neither the draft RICO complaint nor the December 14 Consent Decree sought the removal of the GEB majority from their offices. They sought only to take away the duties these Board members were constitutionally obligated to perform, while otherwise leaving them in full possession of their titles, salaries, offices and other benefits. E.g., Prop. Cons. Decree, 14.

Plaintiffs therefore have the situation exactly backwards. Whereas they contend that the GEB members shirked their constitutional responsibilities in an effort to "protect their positions and perks," the Board members, by their actions, actually preserved

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the duties they were elected by the rank-and-file to perform while placing their otherwise secure positions and perks at greater risk from newly-independent investigative officials within the Union, as well as continued scrutiny from the government. Plaintiffs' real complaint is not that the GEB members protected themselves, but that they did not protect Serpico's "position and perks" in the face of detailed charges of his association with and influence by organized crime.

The second part of plaintiffs' claim here -- "the probability that the members would reject the EDP" -- is manufactured out of whole cloth. There is no evidence anywhere in the record that the membership would have rejected the EDP or that any GEB member believed that it would do so. Equally untenable is plaintiffs' notion that the GEB should have requested time from the DOJ to poll the membership on whether the EDP should be adopted. As plaintiffs' elsewhere acknowledge, the government had previously rejected the EDP. It was completely unaware that the EDP would be adopted unilaterally, was startled by the news and was left uncertain how to react. Luskin Dep. 271-74, 391. This was exactly what the GEB sought by its surprise action. By here asserting that the GEB should have asked the government to agree to a Union vote, plaintiffs advocate taking the very action that would have undermined the most immediate benefits of adopting EDP in the first place.

There is also no reason to believe, or evidence to support the view, that the government would have agreed to such an extended delay, even if it could have been asked. In light of such a GEB failure to substitute actions for words, the only conceivable result was that the government would have reiterated its rejection of the entire concept, vote or no vote,

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and then filed its lawsuit. Significantly, later in the negotiations, the government flatly rejected just such a Union request to submit certain electoral reforms to the membership. Coia Dep.II 32. Finally, plaintiffs' unsupported assertion that the government permitted a vote in the case of the Teamsters' consent decree misses the point. That decree resolved years of existing litigation between the parties, where there was no urgency whatsoever in the proceedings. As plaintiffs themselves admit, the government in this case was so intent on proceeding that it proposed to file the litigation and talk later, bringing on the very harms that the EDP was designed to avert. (Br. 13)

In short, there was no reason to approach the membership, no time to do so, no way to ask the government for a continuance and no basis to believe that the government would permit a vote even if it could have been asked. The GEB accordingly did what they were directed by the membership to do: apply their judgment, interpret the Constitution, evaluate the circumstances and take the necessary action in the best interests of the Union. Unable to challenge this conclusion on the record facts, plaintiffs once again fall back upon the supposed need to take additional discovery to address the issue of what the government would or would not allow. But plaintiffs had ample opportunity to take this very discovery. They even began to do so until they decided that they were better off with raw argument rather than the actual facts, and allowed their subpoena duces tecum to the DOJ to lapse.

Finally, most dishonest of all is plaintiffs' assertion that the GEB secured for itself a "cozy relationship." Apparently by design, plaintiffs are vague about what "cozy relationship" they are referring to. Id. Certainly, it cannot be a reference to the EDP itself, which transfers away from the GEB and General President Coia their earlier control over

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Union discipline and grants that authority to a foursome of independent officers who "given their backgrounds, could be expected to be vigorous and unforgiving of irregularities let alone corruption. " Op., p. 10. Coia himself has seen the fruits of this decision by having been the target of a relentless inquiry by these independent authorities. Coia Dep.I 124-25; Luskin Dep. 406-07. Calling this arrangement "cozy" is to substitute an empty rhetorical flourish for the record facts.

To the extent this is a reference to GEB's current relationship with the DOJ, it is equally specious. The government can, at any time, decide to pull the plug on the reforms and proceed with its own consent decree against the Union. Similarly, it has retained its rights to proceed against any GEB or other union member with criminal or civil charges. Particularly given that, as Judge Zagel stressed, there is no evidence of government bad faith, the GEB is in no way better off, or in a cozier relationship with the DOJ, than it was before the EDP was adopted. Rather, the reverse is true.

Finally, there is no truth to plaintiffs' slur, made without support in the district court and repeated here, that "[t]he only person who cannot be permanently suspended under the Disciplinary Procedure is Arthur A. Coia." (Br. 16) In the first place, the EDP does not give anyone the power to permanently suspend anybody. There is a provision only for a temporary suspension, which must be followed immediately by the bringing of charges and a hearing before an independent hearing officer, with a further right of appeal before still another independent officer. In any event, section 3 of the EDP confers all of the General President's disciplinary powers on the GEB Attorney who therefore can take this very action against Coia.

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In sum, plaintiffs' unsupported and self-contradictory rhetorical attack on the GEB's good faith cannot overcome the undisputed facts showing that the GEB adopted the EDP in an effort to dissuade the government from pursuing ruinous litigation, to protect the Union in the event of such litigation and to attack the underlying illegality that had provoked the government's threats in the first place. Summary judgment was therefore proper, and the appeal must be rejected.

IV. There Was No Breach
Of Fiduciary Duty.

Section 5O1(b) of the LMRDA, which creates the breach-of-fiduciary-duty claim plaintiffs attempt to state in Count II, provides: "No [฿501 suit] shall be brought except upon leave of the court obtained upon verified application and for good cause shown . . ." 29 U.S.C. ฿501(b) (emphasis added). As the courts have stressed, "[t]he 'good cause' condition precedent to maintenance of an action by a union member under ฿501(a) prevents groundless or vexatious suits against union officials." Kausler v. Campey,, 788 F. Supp. 423, 425 (W.D. Mo. 1992), appeal dismissed, 989 F.2d 296 (8th Cir. 1993). See also Dinko v. Wall, 531 F.2d 68, 74 (2d Cir. 1976); Homer v. Ferron, 362 F.2d 224, 228 (9th Cir.), cert. denied, 385 U.S. 958 (1966). Under this standard, "plaintiff must show a reasonable likelihood of success and, with regard to any material facts he alleges, must have a reasonable ground for belief in their existence." Dinko, supra, 531 F.2d at 75. The enforcement of this threshold requirement serves to protect "the internal operations of unions against unjustified interference or harassment." Id.²⁴