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Council No. 34 v. Ogilvie

decided: July 10, 1972.


Duffy, Senior Circuit Judge, Kiley and Hamley,*fn* Circuit Judges. Hamley, Circuit Judge (concurring).

Author: Duffy

DUFFY, Senior Circuit Judge.

Plaintiffs' complaint herein requested a temporary restraining order, a preliminary injunction and a permanent injunction to enjoin the defendants from enforcing The Ethics Code of the Governor of Illinois (Code) and the Rules of the Director of Personnel (Rules) promulgated under the Code, which required various of the plaintiff Union members to file financial disclosure statements.

Plaintiffs are Council 34, American Federation of State, County and Municipal Employees, AFL-CIO (Union), and unincorporated association and labor organization representing public employees of the State of Illinois, and Lawrence Reinold who is the Director of said Council 34 and representative of the Union in this suit. The named defendants are the Governor of Illinois, the Director of the Department of Personnel, State of Illinois, and various directors or chief executives of administrative departments of the State of Illinois.

On April 16, 1971, the District Court entered a temporary restraining order. On April 19, 1971, after a hearing on the merits of the complaint, the District Court vacated instanter the temporary restraining order and summarily denied plaintiffs' motion for a preliminary injunction. Plaintiffs now appeal.

The issues [which were raised upon appeal and which are now before us] are I. Whether the plaintiffs, as an unincorporated association, have the capacity to maintain this suit; II. Whether the plaintiffs have standing to maintain this suit; III. Whether the financial disclosure requirements and the procedures established to implement the Code are violative of state employees' right to privacy and right to due process of law. An ancillary issue which was discussed by the District Court in denying plaintiffs' prayer for relief concerned the propriety of convening a three-judge court pursuant to 28 U.S.C. § 2281.

Plaintiffs argue on appeal that the financial disclosure requirements imposed on various employees of the State of Illinois violate their Fourth Amendment right of privacy which right, they argue, is within the penumbra of the specific guarantees of the Bill of Rights as enunciated in Griswold v. Connecticut, 381 U.S. 479, 85 S. Ct. 1678, 14 L. Ed. 2d 510 (1965). They specifically allege in their complaint that "Said statements will be public documents thereby exposing the private lives of the employees of the State of Illinois to the public." Paragraph 13 of the Code, here in question, is the basis for plaintiffs' constitutional claim of deprivation of privacy. That paragraph provides in pertinent part:

"13. Officers appointed by the Governor, administrative assistants to the Governor or an officer, such other persons as determined by the Governor, and persons who believe that the nature of their employment may give rise to conflicts of interest, shall file with the Director of the Department of Personnel written statements of all economic interests and relationships likely to create a conflict of interest. . . . If an officer or employee has no economic interests or relationships likely to create a conflict of interest, a statement to that effect shall be filed. Such statements filed with the Director shall be open to public inspection. However, the Director may, in exceptional circumstances, and where necessary to avoid serious hardship, retain particular items of information in confidence. . . ."

The jurisdictional statement of plaintiffs' complaint cited 42 U.S.C. §§ 1981, 1982 and 1983 as the jurisdictional basis for this suit. The District Court was of the opinion that 42 U.S.C. § 1983 was the operative statute herein stating with respect thereto "I think 1983, Title 42, is the operative statute and the one that gives jurisdiction here, if I have any at all. . . ." We shall discuss the questions in the order presented before us.


Defendants argue that the plaintiff Union lacks capacity to sue because, under Illinois law, an unincorporated association is precluded from maintaining an action in its own name. Defendants are correct in interpreting the general import of Rule 17(b), F.R.C.P., which provides that if the organization lacks capacity to litigate in the state where the action is brought, it will be precluded from a federal forum in that state.

We agree with defendants' interpretation with respect to the law of Illinois regarding the capacity of unincorporated associations. Nevertheless, they have not considered the applicable exception contained in Rule 17(b) (1) to the principle that a party's capacity to sue or be sued is to be determined by the law of the forum state.

The pertinent portion of Rule 17(b) provides that ". . . capacity to sue or be sued shall be determined by the law of the state in which the district court is held, except (1) that a partnership or other unincorporated association, which has no such capacity by the law of such state, may sue or be sued in its common name for the purpose of enforcing for or against it a substantive right existing under the Constitution or laws of the United States. . . ." This passage had its origin in United Mine Workers v. Coronado Coal Co., 259 U.S. 344, 42 S. Ct. 570, 66 L. Ed. 975 (1922) where the Supreme Court held that an action was properly brought against a labor union regardless of the fact that such suit would have been precluded by state law with respect to capacity of unincorporated associations. See Sperry Products v. Association of American Railroads, 132 F.2d 408 (2 Cir., 1942).

Therefore, as stated in Wright, Federal Practice and Procedure, § 1564, at page 745 ". . . Rule 17(b) (1) amplifies the Coronado decision to include all partnerships and other unincorporated associations and applies both to their capacity to sue and their capacity to be sued. However, the rule expressly requires that the action be for an enforcement of a substantive right arising under the Constitution or the laws of the ...

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