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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK
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MEMO ENDORSED

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Plaintiff,
90 Civ. 5n2 (RMB)

v.
STIPULATION AND ORDER
REGARDING APPOINTMENT OF

DISTRICT COUNCIL OF NEW YORK CITY

AND VICINITY OF THE UNITED
BROTHERHOOD OF CARPENTERS AND
JOINERS OF AMERICA, et al.,

AN INDFPENDENIMOMTOR

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WHEREAS, on March 4, 1994, the Court approved consent Decree (the Consent
d
Decree") in the above-captioned action, brought under th il remedies provisions of the
Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1961 et seq., between plaintiff
the United States (the "Government") and defendants, including the District Council ofNew York
City and Vicinity of the United Brotherhood of Carpenters and Joiners of America ("District
Council"). The Consent Decree among other things permanently enjoined all current and future
officers, employees, and members of the District Council and its constituent locals from engaging
in any act of racketeering activity as defined in 18 U.S.C. 1961; knowingly associating with any
member or associate of any La Cosa Nostra crime family or any other criminal group, or with any
person prohibited from participating in union affairs (collectively, "barred persons"); and
obstructing or interfering with the work of the officers described in the Consent Decree;
0

WHEREAS, following a series of events including the August 2009 indictment of Michael
Forde, who was the District Council's Executive Secretary-Treasurer and a trustee of the Benefit
Funds, as well as local union officials, shop stewards, and a contractor, by Order dated June 3,
2010, the Court entered a Stipulation between the United States and the District Council and
Benefit Funds which created the position of Review Officer, finding such an officer essential to the
eradication of corruption and racketeering as they affect union carpenters and union employers;
WHEREAS, from June 3, 2010, through the present, during the term of the Review Officer,
the District Council has implemented numerous reforms, and the Government and the Review
Officer acknowledge that the District Council has made significant progress in advancing the
objectives ofthe June 2010 Stipulation and Order.
WHEREAS, the United States and the District Council agree that the continuing presence
and activity of an independent monitor, albeit with more limited oversight authority as detailed
below, is advisable in order to afford the District Council the opportunity to demonstrate that it can
sustain the reform measures that have been implemented and operate free from the influence of
racketeering and corruption;

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WHEREAS, the Review Officer appointed under the June 3, 20 I 0 Stipulation and Order has
informed the United States and the District Council that he does not intend to serve in that capacity
beyond December 31,2014, but agrees with the United States and the District Council th11t the

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WHEREAS, while the Government and the Benefit Funds disagree on the question of
whether the Benefit Funds are bound by the Consent Decree and the effect of this Court's 1996
order in United States v. District Council, 1996 WL 221584 (S.D.N.Y. May 2, 1996), the
Government and the Benefit Funds agree that by consenting to this Stipulation and Order the
Benefit Funds do not concede the applicability of the Consent Decree to them, and further agree
that the Benefit Funds' consent to this Stipulation and Order may not be used in any way to support
the argument that the Benefit Funds are or should be bound to the Consent Decree; now, therefore,
IT IS HEREBY ORDERED, upon the stipulation and agreement of the Government, the
District Council, and the Benefit Funds, as follows:
I.

2.

Definitions. As used in this Stipulation and Order:

a.

"Benefit Funds" means the New York City District Council of Carpenters Pension
Plan, the New York City District Council of Carpenters Welfare Fund, the New York
City District Council of Carpenters Vacation Fund (now part of the Welfare Fund), the
New York City District Council of Carpenters Annuity Fund, the New York City
District Council of Carpenters Apprenticeship Journeymen Retraining Educational and
Industry Fund, the New York City Carpenters Relief and Charity Fund, the New York
City District Council of Carpenters Scholarship Fund (part of the Welfare Fund), and
any other fund or plan established now or in the future for the benefit of members of the
District Council pursuant to section 302(c)(5) of the Labor Management Relations Act,
29 U.S.C. 186(c)(5).

b.

"District Council" means the District Council of New York City and Vicinity of the
United Brotherhood of Carpenters and Joiners of America. As used in this Stipulation
and Order, "District Council" includes all constituent local unions, as well as the New
York City District Council of Carpenters Retirement & Pension Plan for Officers and
Employees and any other fund or plan established now or in the future for the benefit of
the District Council's employees or officers as defined in 29 U.S.C. 1002(3).

c.

"Job Referral Rules" means the job referral rules established by the Consent Decree, as
modified by any subsequent order of the Court.

d.

"Member of the District Council" means any person who is a member of any union or
labor organization that constitutes part of the District Council.

Authority of the Court. The Court has authority to enter this Stipulation and Order

pursuant to its inherent power, including the inherent power to enforce, ensure compliance with,
and modifY the Consent Decree and the 2010 Stipulation and Order; Rule 60(b) of the Federal
Rules of Civil Procedure; the Court's contempt powers; and 18 U.S.C. 1964.

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3.

Appointment of Independent Monitor. Pursuant to the Court's Order of October I, 2014:

a.

Dennis M. Walsh, Esq., the Review Officer appointed under the June 3, 2010

~t:nul~t~on .and Ord~r- w:U ~ont:nu~ !:U! n~v~I:'I!UJ (\tr,l'l'o1", ftnd t;,'toVt;,'lo1"~:!:!~ ntl nutl-.6.-!7 of4;1...T
Independent Monitor described in this Stipulation and Order until December 31,2014.

4.

b.

Glen G. McGorty, Esq., of the firm Crowell & Moring, is hereby appointed as
Independent Monitor, to begin his term on January I, 2015, and to begin his transition
responsibilities on November I, 20 14.

c.

Beginning November I, 2014, Mr. Walsh, as the Review Officer, will work with the
Independent Monitor to prepare for the transfer of duties and responsibilities from the
Review Officer to the Independent Monitor.

Role of the District Council and the Benefit Funds.

a.

District Council: It remains the responsibility of the District Council to (i) take all
reasonable steps to eliminate criminal elements, criminal activities, racketeering, and
corruption from any part of the District Council and its operations; (ii) maintain and run
the District Council democratically and without unlawful influence; and (iii) comply
with and work in good faith to achieve the terms and objectives of the Consent Decree,
this Stipulation and Order and any pending matter.

b.

Benefit Funds: It remains the responsibility of the Benefit Funds to (i) take all
reasonable steps to eliminate criminal elements, criminal activities, racketeering, and
corruption from any part of the Benefit Funds and their operations; (ii) maintain and
run the Benefit Funds without unlawful influence; and (iii) comply with and work in
good faith to achieve the terms and objectives of this Stipulation and Order with respect
to the Benefit Funds. Neither the appointment of the Independent Monitor nor the
consent of the Benefit Funds to this Stipulation and Order diminishes in any way the
fiduciary responsibilities of the trustees of the Benefit Funds.

c.

The appointment of the Independent Monitor provided in this Stipulation and Order is
intended, in part, to permit the District Council and the Benefit Funds to demonstrate
their fulfillment of the goals specified in this paragraph 4, and to permit the
Independent Monitor to assess whether they have accomplished those goals and
achieved the objectives of this Stipulation and Order, the June 2010 Stipulation and
Order, and the 1994 Consent Decree.

5.
Authority oflndependent Monitor. The Independent Monitor has the following
authority, rights, and responsibilities:
a.

General Authority. The Independent Monitor has the authority to ensure compliance
with the injunctions set forth in the Consent Decree; to investigate the operations of the
District Council and the operations of the Benefit Funds, including but not limited to
investigating allegations of corruption and wrongdoing by officers, representatives,
agents, employees, members, and trustees; to bring disciplinary charges against any
District Council officers, representatives, agents, employees, or members; and to
exercise the authorities, rights, and powers described below. The reference in this
3

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paragraph to trustees of the Benefit Funds is to be construed as referring to the trustees

solely in their capacity as trustees of the Benefit Funds.

Didril't C'ounPilo Tn IIYI'rddng: hio pnw<> ond '""r"noa,aa;ao "" daoor:l,...~ in

this Stipulation and Order, the Independent Monitor, to the maximum extent
practicable, should consult with the District Council prior to taking any action
with respect to the District Council, and permit the District Council to act on its
own in the first instance to effectuate the terms and objectives of this Stipulation
and Order. The District Council, in turn, must consult with the Independent
Monitor as to what actions are advisable to effectuate the terms and objectives of
this Stipulation and Order. However, with respect to any matter as to which the
Independent Monitor has authority under this Stipulation and Order, the
Independent Monitor need not consult with the District Council, or permit the
District Council to act first, regarding any matter as to which the Independent
Monitor, in his sole, unfettered, and unreviewable discretion, determines such
consultation or permission is inadvisable. In no circumstances will the failure or
declination of the Independent Monitor to consult with the District Council as to
any matter be deemed a violation or breach of this Stipulation and Order.

ii.

Benefit Funds: In exercising his powers and responsibilities as described in

this Stipulation and Order, the Independent Monitor, to the maximum extent

practicable, should consult with the Benefit Funds prior to taking any action with
respect to the Benefit Funds, and permit the Benefit Funds to act on their own in
the first instance to effectuate the terms and objectives of this Stipulation and
Order. The Benefit Funds, in turn, should consult to the maximum extent
practicable with the Independent Monitor as to what actions are advisable to
effectuate the terms and objectives of this Stipulation and Order. However, with
respect to any matter as to which the Independent Monitor has authority under
this Stipulation and Order, the Independent Monitor need not consult with the
Benefit Funds, or permit the Benefit Funds to act first, regarding any matter as to
which the Independent Monitor, in his sole, unfettered, and unreviewable
discretion, determines such consultation or permission is inadvisable. In no
circumstances will the failure or declination of the Independent Monitor to
consult with the Benefit Funds as to any matter be deemed a violation or breach
of this Stipulation and Order.
b.

Review and Oversight Authority. The Independent Monitor has review and
oversight authority with respect to the following matters:
i.

With respect to the District Council:

(I)

The Independent Monitor has the authority to review all expenditures and

investments.
(2) The Independent Monitor has the authority to review all contracts (except
for collective bargaining agreements).
(3)

The Independent Monitor has the authority to review the persons currently
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holding office or employment and all proposed appointments to office or

employment. This provision does not govern the election of District Council
officers, as provided for in paragraph 5.j of this Stipulation and Order.
(4) The Independent Monitor has the authority to review all proposed changes
to the by-laws, and any other rules, policies, or practices.
ii.

With respect to the Benefit Funds:

(I) The Independent Monitor has the authority to review all expenditures and
investments, provided, however, that in exercising this authority, the Independent
Monitor may not question the Funds' reliance on the advice given to them by
professionals retained to advise the Funds on their investments, unless the
Independent Monitor has reason to believe that the Funds' reliance on such
professionals is tainted by corruption or other improper influences.
(2)

The Independent Monitor has the authority to review all contracts.

(3) The Independent Monitor has the authority to review the persons currently
holding office or employment, including Benefit Fund trustees, and all proposed
appointments to office or employment, including Benefit Fund trustees.
(4) The Independent Monitor has the authority to review all changes to the
Benefit Funds trust agreements, and any other rules, policies, or practices.
iii.

Upon reviewing any matter described in paragraphs 5.b.i and 5.b.ii, the
Independent Monitor may determine that the matter reviewed (a) constitutes or
furthers an act of racketeering as defined in 18 U.S.C. 1961; or (b) furthers or
contributes to the association, directly or indirectly, of any member, employee,
officer, trustee, or representative of the District Council or the Benefit Funds with
any barred person; or (c) is contrary to or violates any law or Court order entered
in this case; or (d) is contrary to any fiduciary responsibility imposed by
29 U.S.C. 501 or the Employee Retirement Income Security Act, 29 U.S.C.
1001 et seq. ("ERISA"); or (e) is inconsistent with the objectives of this
Stipulation and Order.
(I)

Upon such a determination in the case of the District Council, following

investigation by the Independent Monitor, the Independent Monitor must
give written notice to the District Council and, if applicable, the individual
to be removed from office or employment, that the expenditure, investment,
contract, continued position in office or employment, proposed
appointment to office or employment, proposed change to the by-laws, or
other rule, policy, or practice meets one of the conditions specified in this
paragraph 5.b.iii(a)-(e). The Independent Monitor will provide the District
Council and, if applicable, the individual whose continued position in office
or employment is at issue, an opportunity to be heard. The District
Council and, if applicable, the individual, then has five business days to
provide a response to the Independent Monitor. If the District Council or
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the individual fails to provide a response within five business days, or,
following that response, the Independent Monitor, in his discretion,
determines that a reasonable basis for the expenditure, investment, contract,
continued position in office or employment, proposed appointment to office
or employment, proposed change to the by-laws, or other rule, policy, or
practice has not been established, then the Independent Monitor will present
his evidence and recommendation for action to the Executive Committee.
The Executive Committee will determine ifthere is substantial evidence to
support the conclusion of the Independent Monitor and will make a final
decision on whether the action should or should not be taken or whether an
individual should or should not be removed from office or employment or
face other action. The aggrieved party, whether it be the Independent
Monitor, District Council, or individual facing removal from office or
employment, may petition the Court for review of the final decision of the
Executive Committee. The other parties, and the Government, will be
given notice and an opportunity to be heard regarding such petition. In
reviewing petitions for review arising from paragraph 5.b, the Court will
afford the recommendation of the Independent Monitor the same level of
deference afforded to final agency action under the Administrative
Procedure Act.
In his sole discretion, the Independent Monitor may require that, from the
time he provides the initial written notice described in this paragraph to the
time the Court decides the Independent Monitor's petition for review or the
Independent Monitor declines to pursue such a petition, the expenditure,
investment, contract, proposed appointment to office, proposed change to
the by-laws, or other rule, policy, or practice at issue must be held in
abeyance--except that if the District Council determines, with the advice of
its counsel, that to do so would violate a legal obligation or cause significant
financial risk, the District Council may provide prompt notice to the Court,
the Government, and the Independent Monitor, then may proceed with the
action.
(2)

Upon such a determination in the case of the Benefit Funds, following

investigation by the Independent Monitor, the Independent Monitor must
give written notice to the Benefit Funds that the expenditure, investment,
contract, continued position in office or employment, proposed
appointment to office or employment, or proposed change to the Benefit
Funds trust agreement, rule, policy, or practice presents a reasonable basis
to believe that the expenditure, investment, contract, continued position in
office or employment, proposed appointment to office or employment, or
proposed change to the Benefit Funds trust agreement, rule, policy, or
practice meets one of the conditions specified in this paragraph
5.b.iii.(a)-(e). The absence of such notice may not be construed to
establish a presumption that such conditions are not present.

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c.

d.

Access to Information. The Independent Monitor has the authority to take such
reasonable steps that are lawful and necessary in order to be fully informed about the
activities of the District Council and the Benefit Funds. Specifically, to discharge the
duties and responsibilities set forth in this Stipulation and Order, the Independent
Monitor must have access to information as follows:
i.

The Independent Monitor has the right to attend all meetings of the District
Council, any governing body or committee of the District Council, or the District
Council membership.

ii.

The Independent Monitor has complete and unfettered access to, and the right to
make copies of, all books, records, accounts, correspondence, files and other
documents of, the District Council and the Benefit Funds, including, without
limitation, all books, records, accounts, correspondence, files, and other
documents that are in the possession or control of third parties.

iii.

The Independent Monitor has the right to compel audits and accountings of the
assets of the District Council. The Independent Monitor has the right to request
that the Benefit Funds' trustees conduct audits and accountings of the assets of
the Benefit Funds; the Benefit Funds may object to such a request, in which case
the Independent Monitor or the Government may petition the Court to compel the
audit or accounting, and the Benefit Funds will be given notice and an
opportunity to be heard regarding such petition.

iv.

Except as he determines it necessary in good faith in connection with his

responsibilities under this Stipulation and Order, the Independent Monitor will
make all reasonable efforts to preserve the confidentiality, if any, of information
and documents to which he has access.

Investigative Powers. The Independent Monitor has the following investigative

powers:
i.

The Independent Monitor has the right to interview, and to take and compel the
sworn statement or sworn in-person oral deposition of any officer, agent,
representative, employee, trustee, or member of the District Council or the
Benefit Funds concerning any matter within the Independent Monitor's authority
under this Stipulation and Order, provided that the person to be examined
receives reasonable advance notice of the interview or deposition, and may be
represented by legal counsel of his or her choice. Notice will also be provided to
the District Council through its counsel, unless the Independent Monitor
determines that such notice would be prejudicial to his investigation, in which
case the Independent Monitor must provide the Court and the Government with
justification for conducting the interview or deposition without such notice.
Nothing in this Stipulation and Order restricts the ability of the Benefit Funds or
the District Council to provide counsel to any person if the Benefit Funds or the
District Council chooses to do so.

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e.

ii.

The Independent Monitor has the right, with authorization of the Court, to issue
subpoenas for testimony or documents from any person or entity. Application to
the Court for authorization to issue a subpoena must be made on notice to the
Government. Notice must also be provided to the District Council or Benefit
Funds, as applicable, unless the Independent Monitor determines that such notice
would be prejudicial to his investigation, in which case the Independent Monitor
must provide the Court and the Government with justification for issuing the
subpoena without such notice.

iii.

Nothing in this Stipulation and Order diminishes in any way the Independent
Monitor's authority to take any other lawful action to be fully informed about the
activities of the District Council and the Benefit Funds and other persons or
entities who are compensated for services rendered to the District Council or the
Benefit Funds as such activities relate to the District Council or the Benefit
Funds, respectively, whenever those activities occurred.

Referral of Matters to the Independent Monitor.

i.

Representatives, officers, and employees of the District Council, or employees of

the Benefit Funds, must promptly report to the Independent Monitor (I) any
known or suspected violations of the Consent Decree, including any known or
suspected violations of the Job Referral Rules; (2) any known or suspected
violations oflocal, state, or federal law (not including labor law or ERISA, as
provided for in the next clause) related to the activities of the District Council or
the Benefit Funds or the employment of District Council members; (3) any
known or suspected criminal violations of labor law or ERISA by any person
associated with the District Council or the Benefit Funds, including employers of
District Council members; (4) any known or suspected violations of any Court
orders entered in this case; and (5) any known or suspected violations of any
District Council collective bargaining agreement pertaining to payment of wages
or benefits or the union security clause. Nothing in this paragraph imposes an
affirmative obligation on any person to learn the contents of any law, court order,
consent decree, or collective bargaining agreement.

ii.

The District Council or the Benefit Funds may also elect to refer any other matter
to the Independent Monitor. In all cases where the District Council refers a
matter to the Independent Monitor, the Independent Monitor, at his election, may
accept the matter for investigation or may decline to investigate. In the event the
Independent Monitor informs the District Council that he will investigate a
matter, the District Council must take no action with respect to the matter unless
authorized to do so by the Independent Monitor. If the Independent Monitor
declines the matter for investigation, the District Council can investigate if it so
chooses. In all cases where the Benefit Funds refers a matter to the Independent
Monitor, the Independent Monitor, at his election, may accept the matter for
investigation or may decline to investigate. In the event the Independent
Monitor accepts the matter for investigation, the Benefit Funds will also notifY
the Independent Monitor whether the Benefit Funds will take action with respect
to the matter and, ifthe Benefit Funds elect to take action, the nature of the action

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the Benefit Funds propose to take. In the event the Independent Monitor
disagrees with the Benefit Funds' decision concerning whether to take action, or
disagrees with the nature of any action the Benefit Funds propose to take, the
Independent Monitor may petition the Court for relief, and the Benefit Funds will
be given notice and an opportunity to be heard regarding such petition. If the
Independent Monitor declines the matter for investigation, the Benefit Funds can
investigate it if they so choose.
f.

g.

Disciplinary Authority. The Independent Monitor has the authority to ensure that the
District Council maintains fair and effective procedures to discipline officers,
employees, agents, representatives, or members of the District Council and its
constituent locals for misconduct, as embodied in the "District Council of New York
and Vicinity Trial Procedures" approved by the Delegate Body on August 28, 2013,
and to ensure that such procedures are being conducted in a fair and effective way.
i.

If the Independent Monitor determines that the disciplinary process is not being
conducted in a fair or effective way, he may file a motion with the Court to
require the District Council to make the changes the Independent Monitor
determines are necessary, and the District Council will have an opportunity to
respond.

ii.

The Independent Monitor has the authority to bring disciplinary proceedings

under the aforementioned Trial Procedures.

Assessments, Changes, and Recommendations. Consistent with the provisions of

paragraph 5.a:
i.

The Independent Monitor must periodically conduct an assessment of the overall

functioning and effectiveness of the organizational changes and policies,
procedures, and systems implemented by the District Council and Benefit Funds
since entry of the June 2010 Stipulation and Order. The Independent Monitor
will examine the District Council's progress in implementing its information
technology upgrade and its progress in implementing enhanced business
practices and procedures.

ii.

The Independent Monitor may study and make recommendations concerning any
other factors, practices, and procedures that will effectively prevent, deter, detect,
and address wrongdoing and corruption by or related to the District Council, its
members, and the Benefit Funds.

iii.

Implementation:
(I)
With respect to any recommendations the Independent Monitor makes
concerning the District Council under this paragraph 5.g, the Independent Monitor
must apprise the Government and the District Council of any such
recommendations. The Independent Monitor may, in consultation with and with
the consent of the Government and the District Council, implement such
recommendations. In the event the District Council does not consent to

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implementation of the Independent Monitor's recommendations as required by the

prior sentence, the Independent Monitor may petition the Court to require the
District Council to implement the changes the Independent Monitor deems
appropriate, and the Government and the District Council will be given notice and
an opportunity to be heard regarding such petition.
(2)
With respect to any recommendations the Independent Monitor makes
concerning the Benefit Funds under this paragraph 5 .g, if the Benefit Funds'
trustees do not implement the recommendations, the Independent Monitor may
petition the Court to require the Benefit Funds to implement the changes
recommended by the Independent Monitor, and the Government and the Benefit
Funds will be given notice and an opportunity to be heard regarding such petition.
h.

Communication with the Membership. The Independent Monitor may distribute to

the District Council membership written reports describing the activities of the
Independent Monitor or any other information he deems advisable. The Independent
Monitor may determine in his discretion when to publish such reports, and must be
given access to any District Council publication that concerns the affairs of the union,
including The Carpenter or any other newsletter, and any District Council web site,
e-mail address list, or other means of electronic communication, to communicate with
the membership. The Independent Monitor may also communicate to the membership
in person, at meetings or otherwise. The Independent Monitor will generally
endeavor to communicate recommendations regarding policy changes to the District
Council's officers before communicating them to the membership, but is not bound to
do so.

i.

Job Referral Rules. The Independent Monitor must supervise the implementation
and operation of the Job Referral Rules, including implementation and operation of any
stipulated or Court-approved changes to the Job Referral Rules. If the Independent
Monitor determines that there has been a violation of the Job Referral Rules, the
Independent Monitor may issue any direction to the District Council as may be
appropriate to remedy the violation.

j.

Supervision and Conduct of Elections.

i.

Except for the December 2014 District Council election, the authority over
elections specified in this paragraph 5 .j is to be exercised by the Independent
Monitor.

ii.

The Independent Monitor is empowered to supervise all phases of any union

election conducted by the District Council during his tenure, and to certify the
results of any such election. The term "supervise" as used in this paragraph 5.j
has the meaning ascribed to it in cases arising under Title IV of the
Labor-Management Reporting and Disclosure Act, 29 U.S.C. 481 et seq.

iii.

The Independent Monitor has the authority to prescribe threshold qualifications

---<:onsistent with section 401 of the Labor-Management Reporting and
Disclosure Act, 29 U.S.C. 481, and 29 C.F.R. 452.32 et seq.-for any
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candidate seeking a position as an officer of the District Council, provided that

the Independent Monitor may not remove any qualification for office prescribed
by the UBC Constitution as of the date of this Stipulation and Order.
iv.

Any candidate seeking to run for a position as an officer of the District Council
during the Independent Monitor's tenure must first be approved by the
Independent Monitor, who will determine whether in light of the terms and
objectives of the Consent Decree the candidate is qualified to run for office and
represent the union membership. Any such decision by the Independent
Monitor will be final and non-reviewable.

v.

For the purpose of paragraph 5.j.iv, the term "officer of the District Council"
means the District Council's Executive Secretary-Treasurer, President, Vice
President, Trustees, Warden, and Conductor.

vi.

The Independent Monitor is empowered to assess the effectiveness and

continuing applicability of the election rules promulgated under paragraph 5.k.ii
of the June 2010 Stipulation and Order. To the extent that the Independent
Monitor determines that any changes to the election rules are necessary, the
Independent Monitor will propose changes in accordance with the provisions of
paragraph 5.k.ii of the June 2010 Stipulation and Order, and Section 7 of the
District Council Bylaws.

k.

Retention of Records. Upon the Independent Monitor's request, the District Council
and the Benefit Funds must notifY the Independent Monitor prior to the destruction of
any specified record or category of records described in the records retention schedule.

/.

Reports to the Court.

i.

The Independent Monitor may report to the Court whenever the Independent
Monitor deems fit.

ii.

Mr. Walsh, as the outgoing Review Officer, must file a final, closing report to the
Court on or before December 31, 2014, including his assessment of the District
Council's progress, the sustainability of reforms that have been implemented, and
recommendations for going forward. The District Council, the Benefit Funds,
and the Independent Monitor must cooperate with the Review Officer as
necessary for him to complete this report, including by providing access to
records.

iii.

The Independent Monitor must file a written report not less than every six months
regarding the Independent Monitor's activities. The reports must include the
Independent Monitor's assessment of progress toward achieving the objectives of
this Stipulation and Order, the sustainability of reforms that have been
implemented, and recommendations for going forward. Copies of all reports to
the Court must be timely served on the Government and on the District Council
and the Benefit Funds.

II

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iv.

The Independent Monitor may provide drafts of the reports described in this
paragraph 5./ to the District Council or the Benefit Funds for their input or
response at an appropriate time before the reports are filed. But the Independent
Monitor may elect not to provide such advance drafts for any reason.

v.

The Independent Monitor's reports as described in this paragraph 5./ and

elsewhere in this Stipulation and Order should be filed on the public docket in the
above-captioned case, unless the Independent Monitor determines that public
filing will be prejudicial to an investigation or to the Independent Monitor's
activities pursuant to this Stipulation and Order. If the Independent Monitor so
determines, the Independent Monitor (a) must file the report under seal, but must
file as much ofthe report on the public docket as possible without causing the
identified prejudice; (b) must provide the Court, the Government, the District
Council, and the Benefit Funds with a justification for the sealed filing, which
may also be filed under seal if necessary to avoid the identified prejudice; and (c)
must, no less often than once a year, review the sealed report to determine if the
seal is still necessary, and either publicly file the report if the seal is not still
necessary or provide notice to the Court, the Government, the District Council,
and the Benefit Funds of the justification for continuing the seal. The
Government, the District Council, the Benefit Funds, or any person aggrieved by
the sealing or continued sealing of a report may petition the Court to unseal the
report, and the Court may unseal the report in whole or in part upon a
determination that the interest in unsealing the report outweighs the justification
for sealing it.

vi.

Neither the reporting obligation in this paragraph 5./ nor any other reporting
obligation in this Stipulation and Order precludes the Independent Monitor from
offering, or the Government, the Court, the District Council, or the Benefit Funds
from soliciting, the Independent Monitor's interim advice or opinion on any
matter.

6.
Toll-Free Hotline. The toll-free telephone hotline described in the June 2010 Stipulation
and Order will be operated by the Independent Monitor to solicit and receive allegations of
wrongdoing or corruption by any person in connection with the operations of the District Council
or the Benefit Funds.
7.
Cooperation. The District Council and the Benefit Funds, including all officers,
employees, trustees, and members, must cooperate with the Independent Monitor in any matter
undertaken by the Independent Monitor pursuant to this Stipulation and Order. Failure to
cooperate with the Independent Monitor is expressly made a violation of this Stipulation and
Order.
8.

Compensation, Term, and Hiring Authority.

a.

Hiring. The Independent Monitor may employ or engage the services of any
personnel necessary to assist in the proper discharge of the Independent Monitor's
duties. The Independent Monitor has the authority to designate persons of his

12

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choosing to act on his behalf in performing any of his duties as outlined in this
Stipulation and Order.
b.

c.

Compensation and Expenses.

i.

The compensation and expenses of the Independent Monitor, and of the persons
hired under his authority, must be paid by the District Council. The parties
presume that $75,000 per month will be sufficient for the total cost of the
Independent Monitor's activities. Ifthe Independent Monitor determines that he
needs to spend more than that in a given month, he must provide notice as soon as
practicable to the District Council and the Government, but is not constrained
from proceeding with his actions and expenditures.

ii.

For the transition period beginning November I, 2014, the compensation of the
Independent Monitor must be paid by the District Council. If the Independent
Monitor determines that he needs to spend more than $30,000 per month during
the transition period, he must provide notice as soon as practicable to the District
Council and the Government.

iii.

After December 31, 2014, Mr. Walsh may also seek compensation for time spent
responding to requests for information or advice from the District Council, the
Government, the Court, or the Independent Monitor at a higher rate. The
District Council must pay such compensation subject to the procedure in
paragraphs S.b.iv and 8.b.v.

iv.

The Independent Monitor will provide monthly statements to the District Council
and the Government setting forth an accounting of all claimed compensation and
expenses, including time and activity records or other appropriate supporting
materials. The District Council must pay the Independent Monitor the total
amount specified in the monthly statement within twenty days. Failure to timely
pay the amount specified in the Independent Monitor's monthly statement is a
breach of this Stipulation and Order by the District Council and may be
punishable as contempt of court.

v.

Within 30 days of the Independent Monitor's submission of his monthly

statement, the District Council may challenge the amount specified in the
statement, or any expenses detailed in that statement, by filing a written objection
with the Court. Such an objection, however, does not relieve the District
Council of its obligation to pay the monthly statement within the time specified in
paragraph 8.b.iv. If the District Council is successful in its challenge, it will be
entitled to a credit in the amount by which the compensation and expenses are
reduced by the Court.

Term oflndependent Monitor. The term of the Independent Monitor will begin on
January I, 2015, and will continue for 15 months following that date.
i.

Upon consent of the District Council, the Benefit Funds, the Government, and the
Independent Monitor, the Court may extend the term of the Independent Monitor
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Case 1:90-cv-05722-RMB-RLE Document 1588-1 Filed 11/14/14 Page 14 of 20

for any period. If the Government, the Independent Monitor, and either the
District Council or the Benefit Funds agree to such an extension, the Court may
extend the term of the Independent Monitor as applicable to the consenting party.

9.

ii.

At any time during the Independent Monitor's term, if the Government, in

consultation with the Independent Monitor, determines that the District Council
is complying with the terms and advancing the objectives of this Stipulation and
Order and the 1994 Consent Decree, that it is continuing to implement necessary
reforms, and that its reforms appear effective and sustainable, the Government
may petition the Court for the Independent Monitor to remain in place but to
exercise more limited authority, or for the Independent Monitor's authority over
the District Council to cease, to be reinstated by the Court only upon a petition by
the Government with notice and opportunity to be heard provided to the District
Council.

iii.

At any time during the Independent Monitor's term, if the Government, in

consultation with the Independent Monitor, determines that the Benefit Funds are
complying with the terms and advancing the objectives of this Stipulation and
Order and the 1994 Consent Decree, that the Benefit Funds are continuing to
implement necessary reforms, and that those reforms appear effective and
sustainable, the Independent Monitor's authority over the Benefit Funds will
cease, to be reinstated by the Court only upon a petition by the Government with
notice and an opportunity to be heard provided to the Benefit Funds.

iv.

The decision of the Government whether to petition the Court under paragraphs
8.c.ii or 8.c.iii rests entirely in the Government's discretion, and is not subject to
judicial review.

v.

The District Council, the Benefit Funds, or the Government may petition the
Court, on notice to the parties and the Independent Monitor, to dismiss the
Independent Monitor for commission of an illegal act by the Independent
Monitor or by an employee of the Independent Monitor with the Independent
Monitor's knowledge and approval, for inadequate or unreasonable performance
of the duties and responsibilities provided for in this Stipulation and Order, or for
any other good cause found by the Court. If the Independent Monitor is
dismissed upon such a petition, or otherwise fails to complete his term of office,
the Government, the District Council, and the Benefit Funds must promptly meet
to discuss the appointment of a replacement Independent Monitor. In the event
the parties are unable to agree, the Government must promptly submit a list of
replacement candidates to the Court; the District Council must also submit a list
of replacement candidates; the Benefit Funds will have the opportunity to be
heard on the lists of proposed replacement candidates; and the Court will select
the candidate from the lists submitted to the Court who is best qualified to further
the objectives of the Consent Decree and this Stipulation and Order.

Indemnification.
a.

The District Council must indemnify out of its own funds the Independent Monitor and
14

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Case 1:90-cv-05722-RMB-RLE Document 1588-1 Filed 11/14/14 Page 15 of 20

any persons hired by or acting on behalf of the Independent Monitor from personal
liability (and any costs incurred to defend against any claim of liability) for any of their
actions taken pursuant to this Stipulation and Order. Alternatively, the District
Council may purchase a policy of insurance or bonds in an appropriate amount to
provide the same indemnification. In addition, the Independent Monitor and any
persons designated or hired by the Independent Monitor to act under this Stipulation
and Order are to be entitled to whatever privileges and immunities from personal
liability that may exist under the law for court-appointed officers.
b.

10.

The District Council must indemnify out of its own funds the Review Officer and any
persons hired by or acting on behalf of the Review Officer from personal liability (and
any costs incurred to defend against any claim ofliability) for any of their actions taken
pursuant to this Stipulation and Order or the June 2010 Stipulation and Order.
Alternatively, the District Council may purchase a policy of insurance or bonds in an
appropriate amount to provide the same indemnification. In addition, the Review
Officer and any persons designated or hired by the Review Officer to act under this
Stipulation and Order or the June 2010 Stipulation and Order are to be entitled to
whatever privileges and immunities from personal liability that may exist under the law
for court-appointed officers.

Judicial Review. Final decisions pursuant to paragraph 5.b.iii of this Stipulation and
Order, and the Independent Monitor's certification of election results pursuant to paragraph
5.j of this Stipulation and Order, may be reviewed by the Court upon a petition for review by
the District Council, the Government, the Independent Monitor, or any aggrieved person.
Any such petition must be filed within 30 days of the decision for which review is sought.
In reviewing the decision, the Court will apply the same standard of review of final agency
action under the Administrative Procedure Act, 5 U.S.C. 70 l et seq. to the decision or
recommendation of the Independent Monitor at issue. In the absence of a timely petition for
review, the decision at issue will become final and unreviewable. All other decisions of the
Independent Monitor are final and unreviewable except as expressly provided in this
Stipulation and Order. Nothing in this paragraph or this Stipulation and Order precludes the
District Council, the Benefit Funds, the Government, or any aggrieved person from
petitioning the Court on the ground that the Independent Monitor has exceeded his authority
under this Stipulation and Order.

II.

Miscellaneous Provisions
a.

Conflict with this Stipulation and Order. To the extent this Stipulation and Order
conflicts with any current or future rights, privileges or rules applicable to the District
Council or its membership or the Benefit Funds, the District Council, as the
representative of its membership, and the Benefit Funds hereby waive compliance with
any such right, privilege or rule and agree that they and the District Council's
membership will act in accordance with this Stipulation and Order.

b.

Privilege. Neither the District Council nor the Benefit Funds waives any right they
may have to invoke any applicable privilege or work-product protection prior to
production of any information to the Independent Monitor, but must, upon request of
the Independent Monitor, comply with Fed. R. Civ. P. 26(b)(5)(A) and this Court's
15

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Case 1:90-cv-05722-RMB-RLE Document 1588-1 Filed 11/14/14 Page 16 of 20

Local Civil Rule 26.2. Production of information to the Independent Monitor is not to
be deemed a waiver of any applicable privilege or work-product protection, pursuant to
Fed. R. Evid. 502(d). Additionally, the District Council and the Benefit Funds agree
to the Independent Monitor's review and use of information provided to him in
furtherance of their common interest in achieving the objectives of this Stipulation and
Order, and accordingly the production of information to the Independent Monitor is not
to be deemed a waiver of applicable privilege or work-product protection. Upon a
claim of privilege or work-product protection, whether before or after the Independent
Monitor is given access to information, the Independent Monitor, the District Council,
the Benefit Funds, or the Government may petition the Court to determine the
applicability and scope of the privilege or work-product protection.
c.

HIPAA. Disclosure of any information covered by the protections of the Health

Insurance Portability and Accountability Act of I 996 but otherwise required by this
Stipulation and Order is hereby ordered by the Court, pursuant to 45 C.F .R.
164.512(e)(l)(i).

d.

Other Government Action. Nothing herein precludes the Government, or any of its
departments or agencies, from taking any appropriate action in regard to the District
Council or the Benefit Funds pursuant to the Consent Decree or this Stipulation and
Order, as applicable, or in reliance on any federal laws, including any criminal
investigation or prosecution, and any action under the federal tax laws.

e.

Retention of Jurisdiction. This Court retains exclusive jurisdiction to supervise

implementation of this Stipulation and Order and retains exclusive jurisdiction to
decide any and all issues arising under this Stipulation and Order, and any and all
disputes growing out of the issuance, interpretation, or application of this Stipulation
and Order. The Independent Monitor or any party to this Stipulation and Order may
apply to the Court for any orders necessary or appropriate to implement the Consent
Decree and this Stipulation and Order, including orders preventing non-parties from
interfering with the implementation of the Consent Decree or this Stipulation and
Order. The Independent Monitor will have the right to intervene in any matter or
proceeding concerning this Stipulation and Order.

f.

Status of Consent Decree and Other Orders. The entry of this Stipulation and
Order does not supersede or affect the Consent Decree or the rights and obligations of
the parties under the Consent Decree or subsequent orders of the Court. Except as
specified herein, the entry ofthis Stipulation and Order does not supersede or affect any
other Order that the Court has entered in this case.

g.

All Writs Act. The Government or the Independent Monitor may apply to this Court
at any time pursuant to the All Writs Act, 28 U.S.C. 165l(a), for relief as against
non-parties to the Consent Decree or this Stipulation and Order, including employers of
members of the District Council, and any other non-party who may be in a position to
interfere with the implementation of the Consent Decree or this Stipulation and Order.
Upon such application, the Court may grant such relief as may be necessary or
appropriate to prevent the frustration of the Consent Decree and this Stipulation and
Order. The Government or the Independent Monitor may apply to the Court for the
16

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C a;e 1 an_, u.A5722-RMB-R! r

Doeurr+ftftt 1588 1 FileS 11/14/14 Page 17 of 20

issuance of subpoenas necessary to obtain any information, documents, or testimony

relevant to such an application.
h.

Attorney's Fees and Costa. The entry of this Stipulation and Order is without
attorney's fees or costs to any party.

i.

Notice. Any notice, except notices to the Court, required by this Stipulation and
Order may be provided by electronic mail.

j.

Couuterpart Signatures. This Stipulation may be executed in two or more

countmparts, each of which is to be deemed an original, but all of which together
constitute the same instrument.

CONSENTED AND AGREED TO:

Dated:

PREBT BHARARA

New York, New York

November 14, 2014

United States Attorney for the

Southern District ofNew York
Attorney for Plaintiff United States

Br.~
Blf.TORRANCE
TARA M. LaMORTE

Assistant United States Attorneys

86 Chambers Street
New York, New York 10007
Telephone: 212.637.2703, .2746
Fax: 212.637.2702
E-mail: benjamin.torrance@usdoj .gov
[email protected]
Dated:

ZUCKERMAN SPAEDER LLP

Attorney for Defendant
District Council ofNew York City and
Vicinity of the United Brotherhood of
enters and Joiners of America

New York, New York

November BJ.., 2014

By:
1185 Avenue ofthe Americas, 31st floor
New York, New York 10036-2603
Telephone: 646.746.8838
Fax: 212.704.4256
E-mail: [email protected]

17

,-

Case 1:90-cv-05722-RMB-RLE Document 1593 Filed 11/18/14 Page 18 of 22

Case 1:90-cv-05722-RMB-RLE Document 1588-1 Filed 11/14/14 Page 18 of 20

Dated:

New York, New York

November!.!:/_, 2014

DISTRICT COUNCIL OF NEW YORK

CITY AND VICINITY OF THE UNITED
BROTHERHOOD OF CARPENTERS
AND JOINERS OF AMERICA

By:~~
JOS~

Executive Secretary-Treasurer
Dated:

New York, New York

November f.!L 2014

KAUFF MCGUIRE & MARGOLIS LLP

Attorney for Benefit Funds

By:
RAYMOND MCGUIRE
950 Third Avenue, 14th floor
New York, New York I 0022-2705
Telephone: 212.909.0711
Fax: 212.694.1936
E-mail: [email protected]
Dated:

New York, New York

November f1.., 2014

BENEFIT FUNDS
By:

EIG'M:CO:Chairm
~~6r
Benefi~
Union Trustee

JOSEP

By:
DAVID MEBERG, Co-Chairman
Benefit Funds Employer Trustee

18

Case 1:90-cv-05722-RMB-RLE Document 1593 Filed 11/18/14 Page 19 of 22

Case 1:90-cv-05722-RMB-RLE Document 1588-1 Filed 11/14/14 Page 19 of 20

Dated:

New York, New York

October_, 2014

DISTRICT COUNCIL OF NEW YORK

CITY AND VICINITY OF THB UNITED
BROTHERHOOD OF CARPENTERS
ANDJOThrnRSOFAMERICA
By:

JOSEPH GEIGER
Executive Secretary-Treasurer
Dated:

KAUFF MCGUIRE & MARGOLIS LLP

Attorney for Benefit f'}J1s
,

New York, New York

ecmber J.f...2014

}.)Ow-11"1 .

By:

loa;m-~~ ~~Cuf

RA 0
MC
950 Third Avenue, 14th floor
New York, New York 10022-2705
Telephone: 212.909.0711
Fax: 212.694.1936
E-mail: [email protected]
Dated:

BENEFIT FUNDS

New York, New YorK

~JL,2014

IJ&VJI...-(J.fy

By:

JOSEPH GEIGER, Co-Chairman

Benefit Funds U Tru
By:

18

Case 1:90-cv-05722-RMB-RLE Document 1593 Filed 11/18/14 Page 20 of 22

Case 1:90-cv-05722-RMB-RLE Document 1591 Filed 11/17/14 Page 1 of 3

ZUCKERMAN SPAEDER

U.P

I ISS AVENUE OF THE AMERICAS 31ST FLOOR

NEW YORK, NY 10036-2603
212.704.9600 212.704.4256fax www.zuckerman.com

BARBARA S. JONES
Partner

[212)897-3437
bjones@zuck erman .com

November 17,2014
VIA HAND DELIVERY AND ECF
Hon. Richard M. Berman
United States District Court for the Southern District of New York
Daniel Patrick Moynihan United States Courthouse
500 Pearl Street
New York, NY 10007
Re:

United States v. District Council, No. 90-cv-5722

Dear Judge Berman:

The District Council, the Benefit Funds, and the government write in response to Your
Honor's Administrative Order of November 14, 2014. Under the proposed modifications to
paragraph 5.b.iii, there are four potential outcomes: (I) the Independent Monitor ("IM") makes a
determination, which the Executive Committee affirms, and then the aggrieved person does not
seek review and the determination of the 1M stands; (2) the IM makes a determination, which the
Executive Committee reverses, and then the IM, convinced by the reasoning of the Executive
Committee, does not seek review and the determination of the Executive Committee stands; (3)
the 1M makes a determination, which the Executive Committee affirms, and then the aggrieved
person petitions the District Court for review; and (4) the IM makes a determination, which the
Executive Committee reverses, and then the IM petitions the District Court for review. Below,
we present a hypothetical that results in either of these last two outcomes.1
Based upon the submission of the Review Officer of October 6, 2014, the bulk of the
vetoes under paragraph 5 .b.iii of the June 3, 2010 Stipulation and Order were of individuals from
office or employment, so we use such an example to underpin the hypothetical here.
In our hypothetical, the IM receives a tip that an employee of the District Council was
affiliating with a barred person under the terms of the Consent Decree. The 1M then conducts an
investigation and gathers evidence that suggests that the Council employee was in contact with a
barred person and concludes that the employee should be dismissed. Upon making this
determination, the IM provides both the District Council and the employee with notice and an
1 The first two potential outcomes are not appealed to Your Honor and the standard applied by the Executive
Committee is the same as that applied in the other two, so to avoid repetition, we do not illustrate those two
outcomes in this submission.
WASHINGTON, DC

NEW YORK

TAMPA

BALTIMORE

Case 1:90-cv-05722-RMB-RLE Document 1593 Filed 11/18/14 Page 21 of 22

Case 1:90-cv-05722-RMB-RLE Document 1591 Filed 11/17/14 Page 2 of 3

ZUCKERMAN SPAEDER

UJ>

Hon. Richard M. Berman

November 17,2014
Page2
opportunity to be heard. Within the allotted five days, the District Council and the employee
provide replies to the IM, who then determines that a reasonable basis for continued employment
was not established. The IM next presents his evidence of the employee's contact with the
barred person to the Executive Committee and recommends that the individual be dismissed
from employment at the District Council.
In this and every case, the Executive Committee reviews the determination of the IM for
substantial evidence. In doing so, the Executive Committee does not make a de novo
determination based upon the underlying facts, but instead considers whether there is substantial
evidence, that is, "such relevant evidence as a reasonable mind might accept as adequate to
support [the IM's] conclusion." Consolidated Edison Co. v. NLRB, 305 U.S. 197,229 (1938).

Since there is no petition for review made in the first two potential outcomes presented in
the first paragraph, we now discuss how the procedure works in outcomes (3) and (4). In the
third outcome considered in the first paragraph, the Executive Committee determines that there
was substantial evidence to support the IM's determination that the employee was in contact with
a barred person and that he should be dismissed. Following this affirmance by the Executive
Committee, the dismissed employee then petitions Your Honor for review. In conducting this
review, Your Honor reviews the determination of the IM under the standards of 5 U.S.C.
706(2), including, among other things, whether it is "arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law" or "unsupported by substantial evidence."
In this way, Your Honor's review is analogous to the procedure followed by the Court of
Appeals in reviewing district court decisions reviewing final agency action. In such cases, the
Court of Appeals "give[s] no deference to the lower court but review[ s] de novo whether the
agency action satisfies the standards of the APA. In other words, like the district court, [the
Court of Appeals] review[ s] the record to determine whether the agency considered the relevant
factors and acted within its discretion." United States v. Int'l Bhd. of Teamsters, 170 F.3d 136,
142 (2d Cir. 1999) (internal quotation marks and alterations omitted). So too here, Your Honor
does not defer to the Executive Committee determination, but would "review the record to
determine whether the [IM] considered the relevant factors and acted within [his] discretion." !d.
If Your Honor concludes that the determination of the IM was not arbitrary or capricious or
otherwise met the standards of the APA, you would affirm that determination.
In the fourth outcome, the Executive Committee instead determines that there was not
substantial evidence to support the conclusion of the IM that the employee was in contact with a
barred person and, thus, that individual would not be fired. Following this reversal, the IM then
petitions Your Honor for review. In conducting this review, Your Honor applies the same
standard of review as you would apply in the scenario where the Executive Committee affirmed
the IM and the employee sought review. Here, you would give "no deference" to the Executive

Case 1:90-cv-05722-RMB-RLE Document 1593 Filed 11/18/14 Page 22 of 22

Case 1:90-cv-05722-RMB-RLE Document 1591 Filed 11117/14 Page 3 of 3

ZUCKERMAN SPAEDER

LLP

Hon. Richard M. Berman

November 17, 2014
Page 3
Committee determination and instead consider anew whether the determination of the IM met
the standards of5 U.S.C. 706(2). Int'l Bhd. ofTeamsters, 170 F.3d at 142.
Respectfully submitted,

Is/
Barbara S. Jones

CC:
Raymond McGuire
Benjamin H. Torrance
Tara M. LaMorte
James M. Murphy
Dennis M. Walsh
Bridget M. Rohde