Judge rejects most of racketeering lawsuit by L.A. union members

A federal judge has thrown out allegations by labor activists in Los Angeles against the leaders of their local and international union, finding that the dissidents did not have legal standing to bring racketeering and corruption allegations.

U.S. District Judge Dean D. Pregerson dismissed the bulk of a lawsuit brought by 16 members of the International Union of Operating Engineers, Local 501, alleging violations of the Racketeer Influenced and Corrupt Organizations Act.

The judge’s ruling, issued Wednesday, gives the plaintiffs the opportunity to press other claims against the union, but is a second significant setback for the workers, who call themselves “The Resistance.”

Raising many of the same allegations they did in their federal lawsuit, the labor insurgents in August attempted to oust the leadership of Los Angeles-based Local 501 in an election. But incumbents led by Business Manager Edward Curly won nearly all of the leadership posts at the local, which represents workers who maintain heating, cooling and other systems at large buildings.

“This is very important for Local 501 because many of its officers were named [as defendants],” said Jack Leary, co-general counsel of the international union. “With this case dismissed and the local getting out of bankruptcy and putting the election behind them; it puts them in a good position.”

Leary and other union representatives had called allegations of intimidation, death threats and kickbacks to union bosses “a fiction” and “pure fantasy land.”

In his 10-page ruling, Pregerson found that any shortage of funds or other injury would have been suffered by Local 501 itself, or by the various trust funds used to pay for health benefits, retirements and training workers.

Only the local union or representatives of those funds could have properly brought the RICO allegations, not the union members who might have suffered a secondary injury, Pregerson ruled.

The workers made a wide range of allegations in the case, including that Vince Giblin, former head of the international union, had threatened to kill Local 501 members who pressed a claim that a Giblin ally had misappropriated funds.

The plaintiffs also alleged union leaders took kickbacks while allowing two of the largest building management companies in the country to shortchange payments that should have gone to train apprentices and to pay for healthcare.

Attorney Scott Leviant said Pregerson’s ruling left the union dissidents he represents without full recourse since their elected leaders are “co-opted and owned by the international” and the federal Department of Labor has failed to intervene.

Still, Leviant said the union members would press ahead with an amended lawsuit pressing claims that union trust funds have been shortchanged. “The members still could recover some of that money,” he said.

Lawyers for the union said they expect all the additional allegations to be dismissed at a future hearing.

James.rainey@latimes.com