Lewis v. Benedict Coal Corp.

MILLER, Circuit Judge

(concurring in part and dissenting in part).

I concur in the rulings of the majority opinion, except with respect to some of them involving the question of damages.

The majority opinion holds that, as a matter of law, liability for damages on the part of the unions could exist only in eight of the eleven work stoppages in issue, and that it was error to permit the jury to include in its verdict damages alleged to have been caused by the remaining three work stoppages, referred to in the record as the “Water Strike,” *356 the “Collingsworth Strike,” and the “Wage Stabilization Board Strike.” I am of the opinion that it was proper for the jury to consider what damage, if any, was caused by each one of the eleven work stoppages, instead of only eight.

With respect to the “Water Strike” and the “Collingsworth Strike” the majority ruling is that they were spontaneous work stoppages, rather than concerted strikes resulting from a labor dispute, and consequently did not constitute violations of the 1950-52 Agreement. There was evidence that Field Representative Seroggs of District 28 told members of the local, “Boys, I can’t tell you. * * * I can’t tell you boys when to strike. I can’t come out and tell you to strike, but when I tell you when you don’t get what you want why you boys know what to do then,” and that this was understood by those who knew the language to mean, “Well, we knowed, when he told us that we knowed to strike.” Section 4 of the 1950 agreement provided that the United Mine Workers would exercise their best efforts through available disciplinary measures to prevent stoppages of work, by strike pending adjustment of grievances in the manner provided by the agreement. There were two or three strikes over water without disciplinary action being taken by the unions. There was evidence that Seroggs supported the position of the strikers in the “Collingsworth Strike.” In my opinion, this evidence was sufficient to take to the jury the factual issue of whether these strikes were of the “wildcat” type for which the unions were not responsible or were work stoppages either instigated or ratified by the union representatives in violation of the Agreement.

With respect to the “Wage Stabilization Board Strike” in October, 1952, it is true that the issue involved was national in scope and under the Agreement was not required to be settled by the machinery provided in the “Settlement of Local and District Disputes” section. But the amended agreement, effective October 1, 1952, also provided: “The United Mines Workers of America and the Operators agree and affirm that they will maintain the integrity of this contract” and that in the case of disputes national in character “the parties shall settle such disputes by free collective bargaining as heretofore practiced in the industry,” it being the purpose of this provision to settle such disputes by collective bargaining without recourse to the courts. The 1952 amendment provided for a per diem increase for the mine workers at $1.90 a day. On October 18, 1952, the Wage Stabilization Board refused to approve more than $1.50 of this increase. Miners throughout the country went on strike, including miners of Benedict. Under date of October 21, 1952, the President of the United Mine Workers replied to a letter received from the President of the National Bituminous Coal Operators Association, in which he wrote in part as follows: “You assert that many miners are not working. You also know that they are outraged by the attempt of the NAM ruffians to filch milk money from their purse. They are acting as individuals. They are exercising their rights as individuals and freeborn Americans. They have not sought nor been given advice or suggestions by their Union or this writer. We have a contract. We expect your compliance with its provisions. Miners will work when you honor its provisions. If you do not like the contemptible action of the NAM labor baiters and the little Harvard professor and his quavering trio, appeal and ask for review and reversal. You are the sole petitioner and plaintiff.” I do not believe that this Court can say as a matter of law that this action of the Union was not a violation of its contract obligation to “settle such disputes by free collective bargaining as heretofore practiced in the industry.” The statutory concept of free collective bargaining is “the mutual obligation of the employer and the representatives of the *357 employees to meet at reasonable times and confer in good faith with respect to iuages, hours, and other terms and conditions of employment, * * * ” (Emphasis added). Sect. 158(d), Title 29 U.S.C.A.; N. L. R. B. v. American National Insurance Co., 348 U.S. 395 , 409, 72 S.Ct. 824 , 96 L.Ed. 1027 . Good faith requires an unpretending, sincere intention and effort to arrive at an agreement; it is a state of mind which can be resolved only through an application of the facts in each particular case. N. L. R. B. v. Stanislaus Implement & Hardware Co., 9 Cir., 226 F.2d 377, 380 . The Union’s action in this instance could reasonably be construed as an approval of the action of the miners together with a recommendation to them that the strike continue irrespective of its purpose to compel Benedict to pay wages which would have been a violation of law on its part to pay. Although a labor union has the general right to strike for the advancement of its own economic interests, Section 163, Title 29 U.S.C.A., such right does not include the right to strike to accomplish an unlawful purpose or to force an employer to act in violation of the laws or established policies of the United States Government. United States v. Chattanooga Chapter, etc., D.C. E. D.Tenn., 116 F.Supp. 509, 511 ; N. L. R. B. v. Aladdin Industries, 7 Cir., 125 F. 2d 377, 380-381 , certiorari denied 316 U.S. 706 , 62 S.Ct. 1310 , 86 L.Ed. 1773 ; N. L. R. B. v. Fansteel Metallurgical Corp., 306 U.S. 240, 256 , 59 S.Ct. 490 , 83 L.Ed. 627 . Whether the action of the Union complied with its contract obligation to “maintain the integrity of this contract” and constituted a good-faith exercise of “free collective bargaining,” as also required by its contract, is a question which in my opinion should be decided by the jury, rather than by this Court. Allied Equipment Co. v. Weber Engineered Products, 4 Cir., 237 F.2d 879, 883 .

I concur in the ruling of the majority opinion that it was error to permit the jury to consider the claimed loss of $6,000 representing the replacement cost of a cable which was destroyed by a forest fire, but I am not in accord with its holding on the question of the amount of damages caused by the other work stoppages considered by it.

With respect to the claimed loss of $21,534.85 resulting from the abandonment of a construction project, the evidence was that that amount was the cost of the labor and material which went into the ineompleted project. The majority opinion, in rejecting this item of damage as a matter of law, treats the abandonment of the project as a voluntary act on the part of Benedict, holding that Benedict was not damaged in that it received materials and services for the entire $21,534.85 which it expended. Such rule is not applicable, however, if the abandonment of the project was not a voluntary act on the part of Benedict. Harris v. The Cecil N. Bean, 2 Cir., 197 F.2d 919, 921-922 ; Restatement, Contracts, Sect. 357(1) (a). If the unions were responsible for the abandonment of the project, Benedict would not be chargeable with the cost of the materials and services which went into the project, but rather only with the amount of the benefit which it received from such materials and services. Morton v. Roanoke City Mills, Inc., 4 Cir., 15 F.2d 545, 547 ; In re Irving-Austin Bldg. Corporation, 7 Cir., 100 F.2d 574, 578 ; Schwasnick v. Blandin, 2 Cir., 65 F.2d 354, 357 ; Restatement, Contracts, Sect. 357(3). Whether the abandonment of the project was voluntary on the part of Benedict was a factual issue in the case. There was substantial evidence on the part of Benedict that the labor trouble and pressure became so great the contractor was forced to quit, which in my opinion was sufficient to take such factual issue to the jury. There was also evidence that Benedict did not get a dollar’s worth of use out of the work, that the work had not progressed to the point where it could have been used for anything, and that the investment was a complete loss. What benefit, if any, Benedict received from the partial perform- *358 anee of the contract, likewise seems to be a jury question.

With respect to other work stoppages, Benedict introduced evidence showing the difference between the cost per ton of the coal actually mined and the decreased cost per ton if production had not been suspended by the strikes. This increase in fixed costs per ton was multiplied by the number of tons which would have been produced during the month if production had not been suspended during the strikes, and the resulting amount claimed as the loss sustained because of the strike. I agree with the majority ruling that this formula did not correctly show the damage. It included the increased cost of production on tonnage that was not mined. With respect to tonnage that was not mined, Benedict’s damage was the loss of profits which would have resulted if such tonnage had been produced and sold. Increased cost of production is only one element affecting profits. United States v. Griffith, Gornall & Carman, Inc., 10 Cir., 210 F.2d 11, 14 . It was not shown that this tonnage, if produced, would have been sold at a profit. It is contended that it would have been sold at a loss if it had been mined, in which event Benedict was not damaged. With respect to the tonnage that was not mined, the question of what damage, if any, was sustained by Benedict by reason thereof, should have been submitted to the jury under instructions applicable to lost profits. Yates v. Whyel Coke Co., 6 Cir., 221 F. 603, 607 ; Roseland v. Phister Mfg. Co., 7 Cir., 125 F.2d 417, 420 , 139 A.L.R. 1013 . See: Union Cotton Co. v. Bondurant, 188 Ky. 319, 323-324 , 222 S.W. 66 .

With respect to the coal that was mined by Benedict, Benedict’s damage was the amount by which its profits were reduced by the strike, or if the coal was produced at a loss, the amount by which the loss was aggravated by the strike. Increased cost of production caused by the strike was a proper element for the consideration of the jury.