# Motion to Dismiss — Chupka v. Lorenz-Schneider Co. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385001_0294%3A3 ## Record - **Collection:** Supreme Court brief - **Document type:** Motion to Dismiss - **Published:** January 1, 1963 - **Citation:** 372 U.S. 227 ## Text ps *., aes ra Cee ‘N Office-Supreme Coun, US. FILED 9 195), “JOHN F. Davis, CLERK : \ > Pupreme Court af the Yuited States October Term, 1962 | Sioa ees ei Ae ge a ; } ; : ry No. 65 ANTHONY CHP, A. WILLIAM FREELY, LLIAM MoNALLY gry CHARLES: S SCHLOSSER: pllant . LGORENZS¢ HNEIDER 44) INC. and’ TOHN STRAUSS, as President of INTERNATIONAL BROPHERHOOD OF TEAMSTERS, CHAUFPFEURS, WAREHOUSE- NEN AND HELPERA OF AME ] CA, LOCAL soz, ~ £ . Appellees. J. ° : In the Matter of, the Arbitration 5 ° heliceen WHELTAM PRE ELSTON TTONY CHUPKA WIELIAM pa’ / N Ali Ba. “mad 4 WW ART 5 s Sf HLUSSE ie 4 : . fpype i] mits "i eee INPERNATIONAL B ROTHERHOODOF TE AMSTERS, : CBA EES. 2 Oe ee, AXD HELP. “ERS OF AMERICA, LOCAL s02,¢ang LORENZ- SCHNETDER CO. INC.,: * ty ‘8 : AS : ’ ; ‘i Appellees ‘ ~~ > Ox Appeal From tik COotrr orf APPEALS OF THE Stare of New York “ MOTION. TO DISMISS OR IN THE ALTFRNATIVE TO: AF — dt ! i SAMUEL J. Cones, : Attorneu tor. Appr Ihe Local 802, DO East 42nd Street, New York 17,.N, Y. ad a ee Citations = .— wale. ie Peete —_— . PAGE . se at . Cases: y ‘ : geet: ‘. . “Brokaw -Brokaw, 99 Ind. “App. 385, 192 N: E. 728 : ‘2 17 ~~ Bryan v, Kennetty113 U. 8. 179; 198 .2.........0. 6 16 ( ‘entral Trust’ Co. \of New: York v. West India cd : : Co., 169 N. Y. 314, 62 N. E. 387 pacnlne wees 50.0% 19 Commercial National Bank ,v. Canal- Louisiana Bank & Trust Co. 239.U..8. 520... errr e ; 18 Conkey: v. Russell, 111. Fed, 417, Pepeeper Ae *. 35 Dembitzer v. eainats N. Y. 2d 851, 144 AK. = EP a eieaecuscaneswel Mehhae ve ekC en Vén'slasess 13 - pay? Dgnato v. Auetionn pare e ede 283 App. Div. a 410; 127 N. Y. S. 2d 709, affirmed 306 1 N; ,, 966, 120°N: E. $d 297 ep Graney Sane + PRET Cae sa - Harrisonville Vv. Dickey’ Clay. Co., 289 U. S.-334- . * 7 (1933) (Brandeis, We wichavupe can tos gue esate a 20 Hurd -v. Hodge, 334 UL. Sv 24 ( 1948) (concurring opinion of Frankfurter, Me Givtekerssueee ates ~ * 20° In re Lennon, 166 U. ‘8. 348 ..... ‘ Mee acce . 19 “White v. Sparkill Realty Co., 280 U. S. si as 20 STATUTES :, Civil Practice Act -of the ‘State of New York, , $1462 . 2... t eee ed * Siceeueclee woe ee ets 5, 12, 13, ‘4, 15 MISCELLANEOUS : OG tee - = ad aun ‘19 Am. Jur. Equity § 486 (1938) . eeBes Peewee eee 2 Bispham’s ee, of Eqpity (sth ed., 1908), ; SN avis S$ 45 error aa gr Pe yee Gre a ee ee 'sisie dads “49 . é . a 30 C.J. S. Equity 11 SO oe 505 vans Peas 19 Pomeroy’ s Equity Jurisprudence (5th ed., 1941), - STATE OF NOW TORK ~~... a * , s _ - — ———() ee oe MOTION TO DISMISS OR IN THE AL ERNATIVE -TOAFFIRM ss Appellee, pursuant to Rule 16 of “the itevines Rules of ~ the Supretie Court of ‘the. United: States, moves: fa) to. » dismiss: the appeal herein on the ground that a substantial federal question is “not: presented and that the judgment “appealed from rests on an adequate non-féderal basis, or, “in the alternative, (b) to affirm the final judgment of the Court of Appeals of New “York State on the ground that the question, presented jx so. ‘unsubstantial as‘not to need. further argainient, xe daca a: sib — Appe Mants, om on Lyrenz-Schneider Co., Ine. (the ** Employer’’) and Local S02, Intyrnational Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers af America (the ‘*Un ion’’) are parties to a.colleetive bargaining agr>>ment ex xecuted on Oc; ‘Ober 5, 1959, for a term of four year? ending October 4, 1963 (650)*, This agreemeht governs the wages, hours: - and working conditions of route salesmen employed by the Employer (02). These employees are engaged in the distribution to,retail storekeepers of products merchandised by the Employ er, intluding potatachips and similar snack ' items (676). a The subject matter of ‘the collective | eee Oe agree- me °o ed mept is the sales .romes Operated by these route salesmen. Indeed, a route isa job under the agreement (597). Commencing in May, 1969, the ‘Employer v@ongfully eliminated four of the jobs éovered by the collective bargain- ing agreememt by purporting to transfer four sales routes to four individuals as independent entrepreneurs. These four’ individuals had, until that time, been Union members employed. by the Employer as,réhte salesmen under the colleetive hargainingagreement etween the Employer and the Union (678). These four individuals, ¢ ‘hupka, Freely, MeNaltp and Schlosser by name, are the appellants herein (** Individuagls’*).. ) The collective bargaining agreement contains an under- taking b¢ the Employer that ‘the will not enter into any ‘agreement with any employee, verbally or in w rifting, which may be inconsistent’ or in cofiilict with ‘this agreement ** *** (644). The ag ‘egment provides that a route may. be eliminated only if it is Shown that the volume of sales on the route has beeome uneconomic over aperiod of three « * Numbers in parentheses refer to folios’ of the printed record on appeal, unless otherwise nacate. / ? months (4x). Neither the Employer nor ‘the individuals claimed that the four routes ip question had become: uneco- _nomie prior tothe ‘challenged transaction. (479, 596. The Employer disposed of these four jobs by means of — agreem@tits of conditional sale which it exceuted with eacti of the Individuals (351, 395, 437, 485). No provision of these ‘a agreements purports jo convey an ex¢lusive right to sel to specified custonfers, ' or in a specified territory. Actually transferred by these agreements of conditional sale was the job of delivery of the Emfloy erts product to a: fixe? number. of storekeepevs | in a given territory (351, 395, 437, 485). The four agreements of conditional sale are Substantially identical. They provide that the Indi- viduals may sell to storekeepers only fhe products fur- " nished by the Employer (352, 396, 438, 485). Under these agreements, the Indiyiduals are required to service each of these customers at least twice’a week (354, 398, 441, 488). Display racks and stands are to ‘be sold. to the Individuals by the Employer (358, 402, 445, 492). The - Individuals must purchase all stock from the Employer, and they may sell to each ‘customer only those items author- ized for sale by the Emplover (355, 399; 441, 489). By entering into these agreéments the Individuals have agreed to avide by. an undisclosed set of rules and’ regulations promulgated by’ the Employer to govern the defails of the work performed. They must observe these rules find, regulations which, according to express provision of the contract, survive the closing (356, 400, 443, 490). Each of the Individuals must, pursuant to these condi- tional sales agreements, place their names on trucks andl . On sales tickets where designated by the Employer (357, 402, 444, 491). Furthermore, -each- agreement. expressly “ provides that in the event that the Employer récoups these -routes, gurrent rates for repurchase will apply (3: a9, , 403, ny are ni ; Ne it a eS San 4 & Finally, no title to_1 these jobs or sales routes has yets' vested in Chupka, Fre, ly, MeNally or Schlosser, and sitio will not vest in them until May, 1967, or, in Freeky’s Cue: September 1964 (361, 40, 449, 495) and. then only it the specified installments have been paid. ‘Thus, the tasks which were formerly done by the four. fnidividvals; as employees—are still, being performed by ‘+ them, The only majot change is that they now perform the work not as employees gov erned by the collective har. gaining agreement, but rather as- parties to’ individyal conditional sales agreements with the Employer. The merehandise is the same, the customers are ‘the same, and the Individuals are the sume (O84)... Bhat teats ‘ Shortly after these transfers took pli we, the Unidn > ativised the Employer of its objections, -on the grounds that’ the transfer 6f jobs or sales routes ander. such cir cumstances ¢was prohibited by the collective bargaining ‘agreement, Unable te resolve this matter amicably, the _ parties followed the grievance procedures set forth in the collective bargaining agreement ‘and ‘ultimately proceeded * to arbitration (679). The Employer and the Union agrecd upon (1) the selection of an arbitrator, and (2) the ixane :.to be submitted to the arbifrator for decision ( WI). Pro- tracted arbitration hearings followed on se®eral dates, w ith 2 hoth parties represented by counsel (679). The Individuals wege not parties to. the arbitration proceedings. The ret. er and the Union jointly framed the issue for the arbitrator ( 503). The -issue submitted for arbitra-. tion was: * : . ° ' ‘*Were the Nemsgg @ s sales of routes, to W iia v ‘ =Freely, Anthony Chupka, . William MeNally ‘and Charles Schlosser in violation of the contract be-, - tween'the parties?) If so, what shall be the*remedy? "7 ( wind 3 . : : s The arbitrator issued his award on February 28, 1961 (680). In his award, he responded to 4he submission by finding that the transfer of these jobs, or sales routes by the | Employer tp the Individuals did, in fact, violate the collee- tive bargaining agreement, As the remedy, he directed the restofation of these routes to the ‘coverage of the collec- tive bargaining -agreement from whieh they had “heen . wrongfully removed. The arbityator’s Saward states: ce _“* Phe Conipany’s sales of routes toe William Free ly, Anthony Chupka, William’ MeNally and Charles Schlosser were in violation of the agreement between the parties. (These rontes shall be returned to the. coverage of the’ agreement to be served by’ route salesmen, within’ the scope of Article 1(A) of the parties’ agreement.’? (571275). | ‘The cpllective bargaining agreement provides that an arbi- - trator’s award shall be final and binding upon the Employer and the. Union 1636). : Following the ‘ixsnance. of this award, the litigation “which has led to the appeals now before this Court was Qemimenced. c Fer ease of refe renee, it is necessary to distinguish be- “tween the two cases which are the subject of ‘this appeal. | The casé captioned hy the Matter of the Arbitration es eae, Between - | Lorenz-Schneider Co., Ine. and William Freely, Anthony Chupka, W iMiam’ MeNally, and Charles . . Schlosser, . en . Petitioners, and . . _Internatibnal Brotherhood of Teamsters, Chauffeurs, . Warehousemen and Helpers of Amertea, Local 802, ° oe ‘, . Respondent,’ is a special proceeding Cent pursuant to Section 1462 6f the Civil Practice, Act of the State of New York thy the Employer and, the. Individuals, seeking an order vacating | 7 the arbitrator’s award. In this special proceeding, the . . Union cross-mov ed.for an order and judgment confirming er the arbitrator’s award. This special proceeding shall henceforth be referred to as the ‘* Arbitration Proceeding’’. - ? Following: a ‘decision by the Appellate Division of the Supreme Court of the State of New York, Second Depart- ment, holding that the Individuals had no standing to apply ~ ,tor the relief sought in the Arbitration. Proceeding,. the "Individuals commenced a new and separate action in the Supreme Court of the State of New York for an injunction _ . and deClaratory judgment. «In the latter action, both the z eae, _ __-imployer and the Union were party defendants.* By oo action, the Individuals’ sought a judgment declaring t the arbitration aw ard and the judgment confirming it were - not binding upon them, and restraining the Employer and the, Union f irons (1,) enfareing the award and judgment agate: the Indiv iduals, and (2) interfering with the opera- tion of thesé jobs. or sales routes by these Indiv iduals, ‘This aétion is captioned’ » eae : Se ~ . “Anthony € ‘hupka, William Free ely, William MeNally ° _ & and C harles Schlosser, Plaintifts, ol against © 4 1 «. Lorenz Seknshiies Co., Ine., and John Strauss, as ” President of International Brotherhood of Team- sters, Chajfffeurs, Warehousemen and Helpers of — America, L 802, ° ears - Defendants.”’ » ‘and will hereinafter be referred to. as the “Injunction = * _ Action’’. Each of the foregoing matters Will be considered in greater detail bélow. *In the Injunction, Action, thes defendant Employer fully sup- ported the position of the plaintiff Individuals, and indeed joined with them in several applications for various relief against the defenlant Unior. (23, 209-13). ’ ° gs, I ad . 4 a The Arbitration Proceeding i ’ . : : , i | ° ih By notice of motion.dated March '16, 191, the Employer and the Individuals jointly commenced, the Arbittation Proceeding. by moving the Supreme € ourt of the State of New York, Queens County for an order: vacating the award _ of .the arbitrator (675). That relief was denied, and the Union’s cross-motion for an order confirming the award and for judgment thereupon was granted (675); A judg- ment confirming the arbitration award and incorporating the arbitrater’s. mandate of specific performance - was entered on Jane 5, 1961 (717).* The text of this judgment is found in the printed record at folios 310-15. The Kpployer ‘and the Individuals jointly appeale “l from this decision:to the Appellate Division af.the Supreme Court, Second Department. By order dated November 27. 1961, that Court unanimously affirnied (715-17). The Ap- pellate Division also deteMined that the Individuals had no standing to move tdé:vacate the arbitrator’s, award since - they-were not parties to the collective bargaining avrosment — - or-to the arbitration (717). In its « opinion, the Appellate ‘Division declared that it was not passing upon the points urged solely on behalf of the Individuals (717). _ From the adverse decision of the Appe late Division, the Employer apptied to the Court of Appeals of the State, of New York for leave to appeal to that Court. Leave to appeal was. denied on May 17, 1962°(828). The Individuals - | _ a9) * The emypdAoyer’s welations of its agreement with the Pinion began _ in the Spring of 1900678). To date, although every tribunal wh ich , has riled’ upon the matter. has found-in the Union's faver, enforcement. of the judgmept confirming the arbitrator's award has been impossible hecause of asuecession of intéNocutory stays secured by the Employer in Individuals. Since the collective bargaiming agreement e s on October 4, 1963, the Union will be wholly denied the benefit of an ultimate decision in its favor tf the Individuals and the F:mplover succeed in delaying enforcement of the judgment beyond that date. ss ; 8 - appealed directly*to the Court of Appeals thereafter, and their appeal was dismissed ‘ipon the Union’s motion, on the ground that no substantial constitutional question’ was presented (808). Following the dismissal of their appeal | by the Court of Appeals, the Individuals appealed direc tly to this Court. _ 2B ’ iG. 78 8 - The Injunction Action ’ By complaint and order to show cause’ dated December ~ 11, 1961 (shortly after the, Appellate Division, had, on No- vember 27, 1961, determined that the Individualy had no - standing to move to vacate the award)’ the Individuals commenced the Injunction Action against the Employer and the Union, asking for a judgnient-(1) declaring that the arbitration award and the judgment confirming were void as to, them and (2) enjoining the Employer and, the “~~ Union from enforeing the award. “‘againetthemand trom interfering eit operation of the jobs or sales routes (109-10), Following the denial’ by the Supreme. Conr. of a motion by, the Individuals for a temporary injunction (82-29), tht Court partially granted. the Union's IBOtion for summary judgment by dismissing the complaint insofar - as it sought injunctive relief, while at the same time grant me ao F : re. ss t . 7 ‘ ° is . . ‘ ’ ‘ - : - * ing judgment to the Individuals t the extent of declaring’ that they were not personally bound by the judgment issued in the Arbitration: Proceeding. In the exercise of its dix- cretion, the Court held that the equities did’ not warrant: the granting of injunctive relief-in fayor of the Individuals because the. effect of such relief would. be to nullify thie judgment rendered i in favor of the Union, aril would permit ‘er to continue in the breach of its contract /nion = 272). The Court beld, however, that the form - an iatia for damages against the EmpJover.- Jweave to bring suit for damages was granted (373-75). *« + a ~ The Individuafs appealed to. thé Appellate Division of — the State of New York, Second Department, from both theg order denying a temporary injunction and the -order «i- missing their complaint tor -permanent ‘injunetive relief. On June 11, 1962, the Appellate Divagion * unaAnimonsl ©. affirmed each of the orde Ts appe sated gor, without opinion - (718-20). An appeal taken direetly by the Individual. 14 the Court of Appeals of the ‘State of New York from the» foregoing determination by the Appellate Division wa- he ‘dismissed by that+Court on October 25, 1962, upon the ae sented (S08), Following the dis Miggal of. that. appeal, the I yedivicduels appealed directly to this ‘ourt.. a ARGUMENT. ee seven Ce POINT I “ The appeal i in the arbiaration’ case e presents no sub- ; stantial federal question. ea a A. No quleshantil federal question is raised by the absence - ' of the Individuals from the wh stank fore the arbitrator. fa No. federil dination ie’ abcd by the absence of thie +. Individuals from the arbitration proceeding itself. The arbitration was held pursuant to the provision in the con- tract, between the Union amd the Employer under. which. _ only eyntroversies between the parties to thle agreement are: stbitrable (636). The Uniog and the -Employer sub-- mitted to arbitration a dispute between’ then concerning the interpretation of their contract (578). The Individuals were not parties to the agreement, and any dispute which Pa they may have had with either party to the agreement was imctependent of and not arbitrable under. thatgagreement. Grievances -of the Individuals are justiciable . elsewhere ‘'. + . than’ in a contractual ‘arbitration proceeding between the. Employer and*the Union. This Court has said that: “© ® © arbitration’ is a matter of contract, and a- party cannot be required to: submit fo’ arbitration any dispute which he has not agreed so to.submit.”’ (United Steelworkers ws “A therica ve W 7 “ntl Nav igation C'o., 363 U. S. v4, 582 The arbitration wisions of the agreement certainly do Piso amr with strangers arbitrable there- -——~“under. Nor can it besaid that a stranger has a constitu- ‘tional right to be heard on the interpretation ‘of a contract between thé ‘two contracting parties, before a tribunal established by the contractitig parties for their own busi- - ness purposes. In. the Warrior case; supra, this Court, | quoting with approval from Shulman, Reason, Contract, - and Law in’ Labor Relations, 68 Harv. L.. Rev. 999, 1016, , stated : 3 oe oa proper conception of the arbitrator’ s fune- tion is basic. He is not a public tribunal imposed upon ‘the parties by superior authority which the parties are obliged to accept. He hay no general charter to administer justice for a community: which _ transcends theparties. He is father part of a systent of self- government created by and- confin: vd to the parties,”’ © (368.0. S. at OST. ) roe ’ ‘THR -is not to say that the ‘stranger. is _ without a’ “remedy « for the infringement of such rights as he may possess. : There remains available to him in ‘an appropriate case a Judicial rémedy for such infringement. A stranger.’ s right to be heard on the issue of-the teinedy to be awarded. by the ‘arMitrator is no greater than his right to be heard with respect to the interpretation of . the’ parties’ agreement. The, forniulation of a remedy | is no less within the exclusive reflin of the arbitrator than ‘thesinterpretation of the contract itself: dn Unite d Steel- workers of Amertea \. Po nterprise Wheel & Car Corp., 363 ° U.S. 593,597, Mr. Justice Douglas stated for the majority -_of this C ourt: ° . - ee . . s . . , ¢ ia. a*. ‘ . > ° eg . . ‘ 11 ‘‘When an arbitrator is commissioned to inter- pret and apply the collective bargaining agreement, he is to bring his informed judgment to bear in order to reach a fair solution of a problem.. This is espe-’ cially true when, it comes to formulating remedies. There the need is for flexibility in meeting a wide x variety of situations. The draftsmen may never have thought of what specific remedy should he awarded to meet a particular contingeney.’ The j issueg@ipintly subgpstted by the parties to the arbi: trator’ required him to determine whether the collective bar- gaining agreement was tokiet'y the Employer's removal: of four route salesnien’s jobs from its coverage, and, if so, what remedy should be awarded. The%arbitrator found that’ the Employer had indeed violated the ‘agreement. As a° emedy,. the award directed the restoration of these four. jobs to the cov erage of the agree ment. No remedy, it i¢ , submitted, could -be more appropriate under the cireum- statices. No -federal’ question is raised by a’ stranger’s assertion of the right. te be heard’ on the remedy to be awarded in a contractual arbitration’ proceeding as hetw een - thet two contracting parties. The: Individuatfhaa no right, federal ‘or atherw! isk, heard by the arbitrator. To the extent that they . assumed the status of independent businessmen as of the time the arbitration hearings were held, they were plainly * hey ond the coverage of the agate of the. agreement. To the. extent that Mev might have wished, at that time, to continue to. be treited ' as members ef the Union, they were bound by the conduct of ‘the arbitration by the Union as their- , + Every court to which the Employgx has applied has. rejected & this contention on, its merits. “Mist the Courts -hear the: | 4). ‘Same challenge again, and from" a stranger who supposes himself damaged by the award, but who is neither a party te the collective bargaining agreementsThe arbitration pro- oes e ceeding, nor the dispute over contract interpretetion? Must the State Courts, as a matter of substantial federal rights, - 7 ; hear attacks by stranger@fupon arbitration awards-which resolve private: ‘business controversies? May strangers’ attack an award wich satisfies the parties to the arbi- o °°. tration? Js any limit to -be placed upon the number «ff _ strangers who may attack the award? . wreitgeat chaos would be intréduced into collective bar- vf on | gaining unléss arbitration is preserved as a speedy and Py “effective method of finally resolving controversies between We cae parties to, ‘a’ collective bargaining agreement. And the exclusion of strangers f rom such controversies is grounded - i a ee o-4-g——.- — he ee ee rey ——_ mutual, final and definite award upon aad supject- matter’ sub mutted was not made. rag : ~s. If there was no yalid eiisibadines or contract, and. the a . * objection. has been raised under> the ‘conditions seg forth im section fourteen’ hundred fifty-eight. aes sid - &’ e% Where an'award is vacated, thé court, in’ ity discretion, fnay *. °°) direct a reheating either before the same arbitrators or béfére new arbitrators to *be ‘chosen in the -manner provides d in the . submission or contract for the se lection® of the origin: ul arbr- trators may Hike a decision shall be deemed ‘applicable to thé new arbitration and to: commerce from the date of the court’ s order, Where: the court ‘vacates’ an award, costs, not exceeding, | twenty- five dollars and disbursements may be awarded to’ the prevailing party; and the payment the reat ntay be enforced im ** Jike manner as the payment of costs’upon % motion: in an action.” Rg Beara S| .¥ ‘ . \ traturs and vany provision limiting ‘the time in which the arbi-. a an ' yy - . ¥ i ‘od upon the Gesire to preserve the elitacy of this éalutaty . procedure, and ‘upon the gecognition that strangers may, in coart, exact a judicial‘remedy for any violation of fh cir rights. - . ‘ ~é k = None y the claims whieh the: Individuals sought’ to ie assert in the proceeding to vacate the aware we justiciable i in such a processing. © No other claims have bee n advanced by the Individuals in, support of the. substantial federal” “Fight-whiel’ they assert on the Airst of ‘these two pppeals. 2° = s “th judgiwem was rendered They have thus established ne ri ight. federal or otherwise? “upflidenite tir. justify ax appeal to this ¢ ‘ourt, sd . POINT 11 The appeal in the ‘