## Facts

- Union members, including Joseph A. Yablonski, brought a federal action under LMRDA § 501 seeking an accounting and restitution for alleged misappropriation of union funds by UMWA officers, including the union president.
- The action was brought in a derivative posture, seeking to enforce the union’s rights against its officers.
- A single law firm initially represented both the UMWA as an entity and the individual officer-defendants in this and related matters.
- After the suit was filed, the firm withdrew as counsel for the individual officers but continued to represent the union.
- Plaintiffs moved to disqualify the firm from representing the union, arguing that the firm’s prior representation of the accused officers and payment from the union treasury created a conflict.
- The district court denied disqualification and permitted the firm to continue as counsel for the UMWA.
- Plaintiffs appealed the denial of disqualification.

## Issues

1. Whether counsel that previously represented individual union officers accused of fiduciary wrongdoing may continue to represent the union in a derivative-style LMRDA § 501 action challenging those officers’ conduct.
2. Whether potential conflicts and divided loyalties, without a showing of actual prejudice or misuse of confidences, require disqualification to ensure independent representation of the union.

## Decision

- The D.C. Circuit reversed the district court’s order and required disqualification of the law firm as counsel for the UMWA.
- The court held that the union must be represented by independent counsel in the § 501 action.

## Legal Principles

- An LMRDA § 501 suit by union members to enforce the union’s rights is functionally analogous to a shareholder derivative action.
- In a derivative-style action, the entity’s interests may be adverse to the personal interests of the officer-defendants, making independent counsel for the entity necessary.
- Prior (and closely related) representation of the accused officers can create divided loyalties that undermine counsel’s ability to represent the entity’s institutional interests.
- Disqualification may be warranted based on the appearance and risk of conflict; a party need not prove actual prejudice, misuse of confidential information, or specific improper conduct.
- Where union treasury funds are used to pay counsel while officers are accused of misusing that treasury, the conflict concerns are heightened.
- Ensuring independent representation in § 501 litigation serves the statute’s purpose of enforcing union officers’ fiduciary duties and protecting membership interests.

## Conclusion

The D.C. Circuit required disqualification of counsel for the union because the firm’s prior representation of the accused officers created an unacceptable risk of divided loyalty in a derivative-style LMRDA § 501 action, and the union therefore had to be represented by independent counsel.


Yablonski v. United Mine Workers of Am., 448 F.2d 1175 (D.C. Cir. 1971)