Petition — Kaiser Steel Corp. v. Mullins

CORRECTED COPY Office Supreme Court, us.

FILED

TEVAS,

CLERK

IN THE

Supreme Court of the United States

OCTOBER TERM, 1980

KAISER STEEL CORPORATION,

Petitioner,

V.

JULIUS MULLINS, et al.,

Respondents.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

ROBERT A. HAMMOND, III

A. DOUGLAS MELAMED *

LYNN BREGMAN

JOSEPH A. GRUNDFEST

Of Counsel: WILMER, CUTLER & PICKERING

Ric Gary 1666 K Street, N.W.

HARD Washington, D.C. 20006

General Counsel (202) 872-6000

Kaiser Steel Corporation

300 Lakeside Drive Counsel for Petitioner

Oakland, California 94666

February 10, 1981

Kaiser Steel Corporation

* Counsel of Record

QUESTIONS PRESENTED

1. Whether a party to a contract provision, which he

believes violates federal antitrust and labor laws and

which for years no one had attempted to enforce, may

raise the defense of illegality in an action brought for

specific performance of the allegedly illegal provision.

2. Whether the Labor-Management Relations Act, which

in Section 8(e) provides that certain types of contract

clauses are unenforeible and void,” is properly construed

as both granting federal court jurisdiction to enforce col-

lective bargaining agreements and precluding federal

courts from deciding whether the clauses they are called

upon to enforce violate Section 8(e).*

8. Whether the Employee Retirement Income Security

Act of 1974 authorizes a federal court to award attorneys’

fees to a plaintiff in an action brought to enforce a collec-

tive bargaining agreement when the plaintiff did not

allege a violation of ERISA or of any pension or welfare

plan subject to ERISA and when Section 301 of the

Labor-Management Relations Act, which expressly pro-

vides federal court jurisdiction in actions to enforce col-

* Because this proceeding draws into question the constitutional-

ity of the Labor-Management Relations Act, 29 U.S.C. §§ 158(e),

185 (1976), as construed by the court of appeals, and neither the

United States nor any department, office, agency, officer or em-

ployee thereof is a party, 28 U.S.C. § 2403(a) may apply, and this

petition has been served upon the Solicitor General. No court of

the United States as defined by 28 U.S.C. § 451 has, pursuant to

28 U.S.C. § 2403 (a), certified to the Attorney General that the

constitutionality of the Labor-Management Relations Act has been

drawn into question.

(i)

ii

lective bargaining agreements, does not authorize an

award of attorneys’ fees.**

** The following were parties to the proceedings in the court of

appeals: Kaiser Steel Corporation (appellant) and Julius Mullins,

John J. O’Connell, and Paul R. Dean, in their capacities as trustees

of the United Mine Workers of America Health and Retirement

Funds (appellees). Harrison Combs has since replaced Julius

Mullins as a trustee.

The Henry J. Kaiser Family Foundation has a 17.1% ownership

interest in Kaiser Steel Corporation. Kaiser Steel Corporation has

no other parent corporation or affiliate and no partially owned

subsidiaries.

TABLE OF CONTENTS

QUESTIONS PRESEN TED

TABLE OF AUTHORITIES . ———.—

,

e EE a I OT

I. THE COURT OF APPEALS’ UNPRECE-

II.

DENTED DECISION ABOLISHING THE DE-

FENSE OF ILLEGALITY IN CONTRACT

ENFORCEMENT ACTIONS RAISES IM-

PORTANT QUESTIONS OF FEDERAL LAW

AND POLICY AND IS CONTRARY TO DECI-

„ cecsiccccccctrissncusintinnesorenss

A. The Court of Appeals Ignored Important

Congressional Policies by Ordering Conduct

That Is Proscribed by the LMRA and the

Sherman Act .

B. The Court of Appeals’ 8 Decision

Will Eliminate the Defense of Illegality and

Have a Significant and Widespread Impact

on Future Cases in Which Parties Seek Ju-

dicial Aid in Enforcing Unlawful Contracts.

THE COURT OF APPEALS’ HOLDING THAT

FEDERAL COURTS HAVE NO JURISDIC-

TION TO DECIDE WHETHER CONTRACT

CLAUSES THEY ARE ASKED TO ENFORCE

VIOLATE SECTION 8(e) OF THE LMRA

IS ERRONEOUS AND CONFLICTS WITH

PRIOR DECISIONS OF THIS COURT AND

OTHER CIRCUIT COURTS

(iii)

oo nN NW WN

10

iv

TABLE OF CONTENTS—Continued

A. The Court of Appeals Has Misunderstood

Section 8(e) and the Prior Decisions of

„„ r ee

B. As Construed by the Court of Appeals, the

LMRA Would Unconstitutionally Intrude

Upon the Ability of the Federal Courts To

Decide Contract Enforcement Actions .........

C. The Court of Appeals’ Decision Conflicts

with Decisions of at Least Two Other Cir-

%%

III. THE COURT OF APPEALS’ DECISION AF-

FIRMING THE AWARD OF ATTORNEYS’

FEES STRETCHES ERISA JURISDIC-

TION FAR BEYOND CONGRESS’ INTENT,

FLOUTS THIS COURT’S DECISION IN

ALYESKA, AND PROMISES TO STIMU-

LATE PENSION AND ATTORNEYS’ FEES

LITIGATION IN THE FEDERAL COURTS.

CONCLUSION . hand —

Page

15

20

v

TABLE OF AUTHORITIES

CASES: Page

Alyeska Pipeline Co. v. Wilderness Society, 421

R 25

Amar Coal Co. v. NLRB, 614 F.2d 872 (3d Cir.

1980), cert. granted, 49 U.S.L.W. 3515 (1981).. 27

Associated Builders and Contractors v. Irving, 610

F.2d 1221 (4th Cir. 1979), cert. denied, 100

0 —————— ee TREE 21

Associated Press v. Taft-Ingalls Corp., 340 F.2d

753 (6th Cir.), cert. denied, 382 U.S. 820

/ 12

Atkinson v. Sinclair Refining Co., 370 U.S. 238

— TTT WHIPS RP ETN 19

Bell v. Hood, 827 U.S. 678 (1946) 27

Big Top Stores, Inc. v. Ardsley Toy Shoppe, Ltd.,

64 Misc. 2d 894, 315 N.Y.S.2d 897 (Sup. Ct.

1970), aff'd, 36 A.D.2d 582, 318 N.Y.S.2d 924

0 19

Boatland, Inc. v. Brunswick Corp., 558 F. 2d 818

rr RBI EF 17

Botany Industries, Inc. v. Clothing Workers, 375

F. Supp. 485 (S.D.N.Y.), vacated as moot, 506

r e . 23

Bugher v. Frash, 98 L.R.R.M. 3010 (S.D. Ind.

!- tid i ccacceictcstanlccaaliadtns hoatanabaaababivien 27-28

Bugher v. Southland Fabricators and Erectors,

Inc., 452 F. Supp. 870 (W.D. La. 1978) 27

Carpa, Inc. v. Ward Foods, Inc., 536 F.2d 39 (5th

% ä ͤ ———. 8 9

Carrier Air Conditioning Co. v. NLRB, 547 F. 2d

1178 (2d Cir. 1976), cert. denied, 431 U.S. 974

PT... h ee URES 23

Cate v. Blue Cross & Blue Shield, 434 F. Supp. 1187

i e e 27, 28

Cecil B. DeMille Productions v. Woolery, 61 F.2d 45

0 TT 13

Charles Dowd Box Co. v. Courtney, 368 U.S. 502

ccc 20

Combs v. Kaiser Steel Corp., No. 80-2545 (Oct. 6,

1980) 3

vi

TABLE OF AUTHORITIES— Continued

Connell Construction Co. v. Plumbers & Steam-

fitters Local 100, 421 U.S. 616 (1975)

Continental Wall Paper Co. v. Louis Voight &

Sons Co., 212 U.S. 227 (1909)

Cowan V. Keystone Employee Profit Sharing Fund,

586 F.2d 888 (1st Cir. 1978)

De Magno v. United States, No. 79-1852 (D.C. Cir.

..

Doherty v. Bartlett, 81 F.2d 920 (1st Cir.), cert.

denied, 298 U.S. 676 (1936) .

Eiberger v. Sony Corp., 459 F. Supp. 1276 (S.D.

N.Y. 1978), aff'd, 622 F.2d 1068 (2d Cir. 1980)..

Farbenfabriken Bayer A. G. v. Sterling Drug, Inc.,

807 F.2d 207 (8d Cir. 1962), cert. denied, 372

...

Fase v. Seafarers Welfare and Pension Plan, 79

eee. LOUD iccsccscsstssccupecsarseenssccees

General Telephone Co. v. International Brother-

hood of Electrical Workers Local 89, 554 F.2d

e

Gibbs v. Consolidated Gas Co., 130 U.S. 396

.

Huge v. Long's Hauling Co., 590 F.2d 457 (3d Cir.

1978), cert. denied, 442 U.S. 918 (1979957

Huge v. Maximeadows Mining Co., 459 F. Supp.

e

Huge v. Overly, 4456 F. Supp. 946 (W. D. Pa.

UE eee

Huge v. Reid, 468 F. Supp. 1024 (N. D. Ala. 1979),

aff'd mem., 615 F.2d 916 (6th Cir. 1980)

Hurd v. Hodge, 884 U.S. 24 (1949)

IAM National Pension Fund v. Ward La France

‘Truck Corp., No. 77-1206 (D.D.C. Feb. 1,

Feen

Inter- Continental Promotions, Inc. v. Miami Beach

First National Bank, 441 F.2d 1356 (5th Cir.),

cert. denied, 404 U.S. 850 (19717 ee

Page

18, 19

11

vii

TABLE OF AUTHORITIES—Continued

International Brotherhood of Electrical Workers

Local 12 v. A- I Electric Service, Inc., 685 F.2d

1 (10th Cir. 1976), cert. denied, 429 U.S. 832

nen

International Brotherhood of Teamsters v. Daniel,

e ̃ .

Kelly v. Kosuga, 858 U.S. 516 (1959)

Kogod v. Stanley Co., 88 U.S. App. D.C. 122, 186

,

Laborers’ International Union Local 107 v. Kunco,

Inc., 844 F. Supp. 626 (W. D. Ark. 1972), rev'd,

472 F.2d 456 (8th Cir, 1979)))))ß

Lewis v. Seanor Coal Co., 382 F.2d 487 (3d Cir.

1967), cert. denied, 390 U.S. 947 (1966)

Lithographers Local 19, 180 N.L.R.B. 985 (1961),

enforced in part, 809 F.2d 31 (9th Cir. 1962),

cert. denied, 872 U.S. 948 (1963)

Local 1896, IAM v. Brake and Electric Sales Corp.,

279 F.2d 590 (1st Cir. 1960))0ʒ/õ⸗

Local 174, Teamsters v. Lucas Flour Co., 369 U.S.

... 00k

McMullen v. Hoffman, 174 U.S. 639 (1899) 6, 10,

McNeil v. Suffolk County Painters Insurance, 431

F. Supp. 887 (E. D. N. V. 1977) .

Miller v. Ammon, 145 U.S. 421 (1892

Motor Coach Employees v. Lockridge, 408 U.S. 274

r SHS OE

Mullins v. Reitz Coal Co., No. 78-0715 (D.D.C.

, ̃ ̃ .. ewe eel 4 Sere

Murphy v. Inexco Oil Co., 611 F.2d 570 (5th Cir.

eee

National Alliance of Postal and Federal Employees

v. Klassen, 168 U.S. App. D.C. 298, 514 F.2d

189, cert. denied, 423 U.S. 1087 (1975)

National Association of Letter Carriers v. United

States Postal Service, 192 U.S. App. D.C. 55,

Be RET | CUED .

Page

24

19

11,12

viii

TABLE OF AUTHORITIES—Continued

Page

National Electrical Contractors Association, Inc.

v. Howard P. Foley Co., 498 F. Supp. 552 (D.

/// / ENE SIS EAT, 12

National Woodwork Manufacturers Association

v. NLRB, 386 U.S. 612 (1967) 8, 9, 18

Nathan v. Tenna Corp., 560 F.2d 761 (7th Cir.

44% —U—U—U U m—““ 8 13

Premier Electrical Construction Co. v. Miller

Davis Co., 291 F. Supp. 295 (N. D. III. 1968),

aff 422 F.2d 1182 (7th Cir.), cert. denied, 400

,,,, ar es 10

Raymond O. Lewis, 148 N.L.R.B. 249 (1964) 8

Response of Carolina, Inc. v. Leasco Response, Inc.,

687 F.2d 1807 (6th Cir. 1976) 9

Revlon, Inc. v. Williams International, Inc., 30

Misc. 2d 772, 214 N.Y.S.2d 456 (Sup. Ct. 1961).. 11, 12

Sheet Metal Workers’ National Pension Fund v.

General Metal Products, No. 80-3328 (D. D.C.

R EI BR ES Sl lsd SE 28

Sheet Metal Workers’ National Pension Fund v.

Supreme Metal Fabricators, No. 80-8327 (D. D. C.

. 28

Sheet Metal Workers’ National Pension Fund v.

Young’s Roofing, Inc., No. 77-1849 (D. D.C.

t 27

Smith v. Evening News Association, 371 U.S. 195

r 19

Smith v. Hickey, 482 F. Supp. 644 (S. D. N. V.

c 26

Sola Electric Co. v. Jefferson Electric Co., 317 U.S.

%% »A 18

Taggert Corp. v. Efros, 475 F. Supp. 124 (S.D.

y MBE Tc SEE OP CREE OI BE 26

Todd Shipyards Corp. v. Industrial Union of Ma-

rine and Shipbuilding Workers Local 39, 344

R 24

Transamerican Mortgage Advisory, Inc. (TAMA)

v. Lewis, 444 U.S. 11 (1979). 17

ix

TABLE OF AUTHORITIES—Continued

United Optical Workers Union Local 408 v. Ster-

ling Optical Co., 500 F.2d 220 (2d Cir. 1974),

aff’'g United Optical Workers Union Local 408

v. Sterling Optical Co., 74 Lab. Cas. (CCH)

4] 10,804 (E. D. N. V. 19783) . . . . . ..

United States v. Bayer Co., 185 F. Supp. 65 (S. D.

.

United States v. Howard, 440 F. Supp. 1106 (D.

Md. 1977), aff'd, 590 F.2d 565 (4th Cir.),

cert. denied, 440 U.S. 976 (197999

United States v. Klein, 80 U.S. (18 Wall.) 128

eren

United States v. Mississippi Valley Generating

Co., 864 U.S. 520 (1961) . . . . . . .

United States Steel Corp. v. International Union,

UMW, No. 75-1966, Order and Memorandum of

Agreement (D. D.C. Oct. 5, 1977)

Vaca v. Sipes, 886 U.S. 171 (19677772

Vendo Co. v. Lektro-Vead Corp., 488 U.S. 623

Viacom International, Inc. v. Tandem Productions,

Inc., 626 F.2d 698 (2d Cir. 19750)

Wadsworth v. Whaland, 562 F.2d 70 (1st Cir.

1977), cert. denied, 485 U.S. 980 (1978) .............

Waggoner v. R. McGray, Inc., 607 F.2d 1229 (9th

r xv.

Western Electric Co. v. Communication Equip-

ment Workers, Inc., 554 F.2d 185 (4th Cir.

, .

William F. Arnold Co. v. Carpenters District

CONSTITUTIONAL PROVISIONS AND

STATUTES

. ————.—

Employee Retirement Income Security Act of

1974:

29 U.S.C. 5 1001 (1976) ....

BO UB.C. 610 (1760)

Page

12

TABLE OF AUTHORITIES—Continued

Page

29 U.S.C. 5 1182 (a) (1976) . . 2. 26

29 U.S.C. 5 1182 (e) (2) (1976) 28

29 U.S.C. 5 1182 (f) (1976) 1 28

29 U.S.C. 5 1182 (8) (1976) 2. 26

Labor-Management Relations Act:

29 U.S.C. 5 158 (a) (8) (197) 24

29 U.S.C. 5 158 (b) (4) (B) (1976) 17

29 U.S.C. 5 158 (e) (1976) 1 passim

N ehe eee passim

neee 17

Sherman Act:

ee e 2,5

Be) RO TF n 2,5

LEGISLATIVE MATERIALS

National Labor Relations Board, 2 Legislative

History of Labor-Management Reporting and

Disclosure Act of 195ù 99999 15, 16

Employee Retirement Income Security Act of

1974, Conference Report, 8. Rep. No. 1090, 98d

Cong., Ad Sess, (1974) . . . . . . . 26

H.R. No. 1147, 86th Cong., 1st Sess. 39 (1969) 16

BOOKS AND ARTICLES

H. Hart and H. Wechsler, The Federal Courts and

the Federal System (2d Ed. 197) 22

Hart, The Power of Congress to Limit the Juris-

diction of Federal Courts, 66 Harv. L. Rxv.

r 22

IN THE

Supreme Court of the United States

OCTOBER TERM, 1980

No.

KAISER STEEL CORPORATION,

Petitioner,

v.

JULIUS MULLINS, et ul.,

Respondents.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Kaiser Steel Corporation (“Kaiser Steel”) respectfully

petitions for a writ of certiorari to the United States

Court of Appeals for the District of Columbia Circuit to

review that court’s judgment of September 17, 1980, in

Mullins v. Kaiser Steel Corporation, No. 79-1468.

OPINIONS BELOW

The opinion of the court of appeals is not yet officially

reported and appears as Appendix A to this Petition.“ The

order of the district court from which appeal was taken

and the district court’s Memorandum Opinion, which is

reported at 466 F. Supp. 911, appear as Appendix B. The

judgment sought to be reviewed appears as Appendix C.

The orders of the court of appeals denying Kaiser Steel’s

petition for rehearing and suggestion for rehearing en

bane appear as Appendix D.

1The Appendices are bound together in a separate volume.

JURISDICTION

The judgment of the court of appeals was entered

on September 17, 1980. A timely suggestion for rehear-

ing en bane was denied, by a vote of 7 to 4, on Novem-

ber 12, 1980. The jurisdiction of this Court is invoked

under 28 U.S.C. § 1254(1).

STATUTES INVOLVED

This case involves Sections 8(e) and 301 of the Labor-

Management Relations Act, 29 U.S.C. §§158(e), 185

(1976) ; Sections 1 and 2 of the Sherman Act, 15 U.S.C.

§§ 1, 2 (1976); and Sections 502 (a) and 502(g) of the

Employee Retirement Income Security Act of 1974, 29

U.S.C, §§ 1132 (a), 1182(g) (1976). These statutory pro-

visions are set forth in Appendix E.

STATEMENT OF THE CASE

This appeal from a summary judgment involves the

1974 nationwide collective bargaining agreement between

hundreds of coal producers, including numerous steel

companies such as Kaiser Steel, and the United Mine

Workers Union (“UMW”). The 1974 agreement es-

tablished the terms and conditions of employment for

Kaiser Steel’s coal mining employees and, among other

things, required Kaiser Steel to make payments to the

Trustees of the UMW health and retirement funds

(“Trustees”) based on the hours worked and coal pro-

duced by Kaiser Steel’s employees. Kaiser Steel made all

of these payments. See Appendix (“App.”) A at 2a-3a, Ga.

The agreement, in a separate provision commonly re-

ferred to as the “purchase-of-coal” clause, also required

Kaiser Steel to pay to the Trustees a penalty on all coal

that it purchased from coal producers whose employees

were not represented by the UMW, even if no UMW

producer was able to supply it with comparable coal and

even if the non-UMW producers paid wages and benefits

as high as those paid under the UMW agreement. See

App. A at 3a; court of appeals’ Joint Appendix (“J.A.”)

at 296.?

The purchase-of-coal clause evolved from a labor dis-

pute tracing back to the 1940s, when the UMW initiated

efforts to deter or bar trade in coal produced by persons

other than UMW mine operators. The purpose of the

clause is to aid the UMW in its efforts to organize non-

UMW coal producers by putting economic pressure on

UMW signatories to refrain from buying non-UMW

coal. App. A at 35a-36a; J. A. at 296.“

Steel companies negotiating with the UMW have con-

sistently objected to the purchase-of-coal clause as an

overbroad and illegal restraint on their purchases of

non-UMW coal. The steel companies’ resistance to the

purchase-of-coal clause succeeded until 1971, when, after

a long strike, they yielded to the UMW’s demands. The

penalty clause was made a part of the 1971 collective

bargaining agreement and has since been included in the

1974 agreement and the 1978 agreement, which is cur-

rently in effect.“ The Trustees and the UMW apparently

intend to include the purchase-of-coal clause in future

collective bargaining agreements as well. See n.20,

infra.

From the outset, Kaiser Steel believed that the pur-

chase-of-coal clause violated the federal labor and anti-

2 The amount of money that Kaiser Steel was called upon to pay

by the purchase-of-coal clause was one-sixth the amount Kaiser

Steel paid to the funds based on coal produced by its employees.

The purchase-of-coal clause has no other purpose: The payments

called for by the clause are not designed, or needed, to meet the

financial requirements of the funds to which they are to be made;

nor is the amount of such payments related either to work per-

formed by UMW employees or to the differences, if any, between

UMW and non-UMW wage and benefit levels. See J.A. at 280-81,

296-97.

The purchase-of-coal clause in thc 978 agreement is the sub-

ject of an action currently pending beiore the United States Dis-

trict Court for the District of Columbia. Combs v. Kaiser Steel

Corp., No. 80-2545 (Oct. 6, 1980).

4

trust laws and refused to make the penalty payments

or to account for its purchases of non-UMW coal. The

UMW and the Trustees knew for years that Kaiser Steel

regularly purchased non-UMW coal from Mid-Continent

Coal and Coke Company (“Mid-Continent”) without

making the penalty payments called for by the purchase-

of-coal clause, but they nevertheless adhered to a policy

of not attempting to enforce the clause. The UMW and

the Trustees themselves doubted the legality of the pur-

chase-of-coal clause, and they feared that attempts to

enforce it would subject them to a “rash of antitrust

suits.” *

On April 11, 1978, four months after expiration of the

1974 agreement, the Trustees abandoned their policy of

nonenforcement and filed this suit for specific perform-

ance of the purchase-of-coal clause. They alleged jurisdic-

tion under Section 301 of the Labor-Management Rela-

tions Act (“LMRA”), 29 U.S.C. § 185, and Section 502

of the Employee Retirement Income Security Act of 1974

(“ERISA”), 29 U.S.C. § 1132, and set forth in their

complaint a single cause of action—-the assertion that

Kaiser Steel breached the 1974 agreement in effect be-

tween 1974 and 1977 by failing to make payments and

reports in accordance with the purchase-of-coal clause.

Kaiser Steel defended the suit on the grounds that the

5 App. A at 6a & n.3; J. A. at 294 & n.5, 652-53 & n.3. Be-

cause Kaiser Steel's mines produce only high volatile coal and

its steel manufacturing process has always required a blend of

high volatile coal and mid-volatile coking coal, Kaiser Steel has

always had to purchase mid-volatile coking coal from another

coal producer. Since 1959, Kaiser Steel has purchased virtually

all of its mid-volatile coal requirements from Mid-Continent. J. A

at 293.

„ UMW has repeatedly tried, without success, to organize

Mid-Continent’s employees. Mid-Continent’s coal mining employees

are represented by another coal mining union, and its wages and

fringe benefits have consistently been higher than those provided

under UMW collective bargaining agreements. Id. at 293-94.

® Memorandum of Chairman, Board of Trustees (July 19, 1974);

see Reply Brief for Appeilant Kaiser Steel Corporation at 8 n.12

(September 19, 1979).

5

purchase-of-coal clause violated Section 8 (e) of the

LMRA, 29 U.S.C. § 158(e), and Sections 1 and 2 of the

Sherman Act, 15 U.S.C. §§1 and 2; that payment of

the sums called for by that clause would be illegal; and

that the clause is void and unenforceable. See App. B

at 73a; J.A. at 292, 324.

The Trustees moved for summary judgment on the

ground that, even if illegal, the purchase-of-coal clause

should be enforced against Kaiser Steel. The district

court granted the Trustees’ motion and, without brie.ing

or discussion, ordered Kaiser Steel to pay the Trustees’

attorneys’ fees. App. B at 80a.

The court of appeals affirmed the summary judgment.

In an opinion by Judge Mikva (joined by District Court

Judge Flannery), the panel held that the district court

properly refused to entertain Kaiser Steel’s defense of

illegality and that Kaiser Steel’s only recourse, long since

foregone, was to have brought a declaratory judgment

action against the union or to have filed a charge with

the National Labor Relations Board at the outset of

the contract period challenging the lawfulness of the

purchase-of-coal clause. App. A at 9a, 18a, 28a. The

panel also upheld the district court’s award of attorneys’

fees on the ground that Section 502 of ERISA, which

authorizes fee awards, and Section 301 of the LMRA,

the statute on which plaintiffs based their claim below

but which does not authorize fee awards, are not “so

surgically discrete than an action to compel welfare fund

contributions required by the terms of a collective bar-

gaining agreement cannot be maintained under both sec-

tions.” Id. at 34a.

Circuit Judge Wilkey dissented from both holdings,

finding “no reason in law or logic why any court should

enforce a contract clause which plainly violates the law

specifically designed to prohibit such clauses” and no

statutory authority for the fee award. App. A at 35a,

67a. With four judges dissenting, the court of appeals

denied Kaiser Steel’s suggestion for rehearing en banc.

6

REASONS FOR GRANTING THE WRIT

I. THE COURT OF APPEALS’ UNPRECEDENTED

DECISION ABOLISHING THE DEFENSE OF

ILLEGALITY IN CONTRACT ENFORCEMENT

ACTIONS RAISES IMPORTANT QUESTIONS OF

FEDERAL LAW AND POLICY AND IS CONTRARY

TO DECISIONS OF THIS COURT.

It has always been the law, until this case, that courts

do not enforce illegal contracts and that an allegation

that a contract provision is illegal states a good defense

to an action brought to enforce that provision. E. g.,

McMullen v. Hoffman, 174 U.S. 639, 654 (1899).7 As

this Court reiterated recently, a defense of illegality is

available and will bar a court from enforcing an illegal

contract provision “where the judgment of the Court

would itself be enforcing the precise conduct made un-

lawful” by federal law. Kelly v. Kosuga, 358 U.S. 516,

520 (1959).“

7% he authorities from the earliest time to the present unani-

mously hold that no court will lend its assistance in any way to-

wards carrying out the terms of an illegal contract.” 174 U.S.

at 654. See Gibbs v. Consolidated Gas Co., 130 U.S. 396, 412 (1889)

(“The rule of law . . is of universal operation, that none shall,

by the aid of a court of justice, obtain the fruits of an unlawful

bargain.’ ”’).

The court of appeals misread Kelly. In Kelly, the defendant

entered into a lawful agreement to purchase onions from the plain-

tiff. After taking delivery of the onions, the defendant refused to

pay for them on the ground that a separate agreement not to de-

liver onions to the futures market—the so-called “nondelivery

agreement”—violated the antitrust laws. In rejecting this de-

fense, the Court said that, “while the nondelivery agreement be-

tween the parties could not be enforced by a court, if its unlawful

character under the Sherman Act be assumed, it can hardly be

said to enforce a violation of the Act to give legal effect to a

completed sale of onions at a fair price.” 358 U.S. at 521 (em-

phasis added). It went on to hold that “where, as here, a lawful

sale for a fair consideration constitutes an intelligible economic

transaction in itself,” it may be enforced. Id. (emphasis added).

The court of appeals read Kelly to mean that the defense of

illegality “does not lie against a contract that is ‘an intelligible

7

In this case, however, the court of appeals held that

Kaiser Steel’s allegation that the purchase-of-coal clause

violates the federal labor and antitrust laws did not state

a defense. In so doing, the court of appeals ignored

the fact that Section 8(e) and the Sherman Act prohibit

not only entering into illegal contract clauses like the

purchase-of-coal clause, but also complying with such

clauses; indeed, the court ordered specific conduct—the

payment of a penalty or surcharge pursuant to the

purchase-of-coal clause—that those laws proscribe. More-

over, on the basis of sweeping new principles, the court

departed from the heretofore uniform rule that federal

courts do not act in aid of unlawful contracts.

The decision below is wrong and likely to be of far-

reaching precedential significance. This Court should

grant certiorari to prevent the undermining of Con-

gressional policy and the erosion of the prior decisions of

the Court.

A. The Court of Appeals Ignored Important Congres-

sional Policies by Ordering Conduct That Is Pro-

scribed by the LMRA and the Sherman Act.

Enforcement of the purchase-of-coal clause would re-

quire the “precise conduct” that both Section 8(e) of the

LMRA and the Sherman Act proscribe. The court of

appeals overlooked this consequence of its decision be-

cause of an erroneous construction of Section 8(e) and

the Sherman Act that fails to take account of the pur-

poses and meaning of those laws. Indeed, a central flaw

economic transaction in itself“ (App. A. at 13a) and held that,

because the purchase-of-coal clause is “intelligible,” its unlawful-

ness is no bar to its enforcement. But Kelly does not mean that an

illegal contract may be enforced so long as it is “intelligible” to

the enforcement court or that the illegality defense applies only

to contracts that are not intelligible. Kelly means that courts

should look to the substance of the parties’ agreement to see if

the lawful portion is “an intelligible economic transaction in it-

self” —i. e., separable from the iliegal portion; if the lawful agree-

ment is severable, it may be enforced. But illegal agreements—

like the nondelivery agreement in Kelly and the purchase-of-coal

clause here—may not be enforced.

in the court’s decision is that it substituted its sense of

public policy for the policies embodied in federal statutes.

First, requiring Kaiser Steel to pay a penalty for

dealing with Mid-Continent would cause the very injury

that Section 8(e) of the LMRA is principally intended to

prevent. Section 8(e) makes unlawful—indeed, “unen-

forcible and void“ any provision in a collective bar-

gaining agreement that prohibits or penalizes an em-

ployer for doing business with another person and has

as its purpose or effect achievement of union objectives

outside the employer’s work unit.“ Such provisions are

known as “hot cargo” agreements.

The purpose of Section 8(e)’s proscription of hot

cargo agreements is to prevent a union from using its

bargaining power in one work unit to advance union

objectives (such as organizing non-union employees) out-

side that work unit. National Woodwork Manufacturers

Association v. NLRB, 386 U.S. 612, 622-26, 633-35

(1967). Congress intended in part to protect employers

outside the work unit (like Mid-Continent) with whom

a union has a dispute from being subjected to a boycott

by other, “neutral” employers (like Kaiser Steel). But

Congress’ principal purpose was to protect the neutral

employers from being caught in the middle of the union’s

dispute with others. As this Court repeatedly emphasized

in National Woodwork, the “touchstone” and “central

theme” of Section 8(e) is to protect “neutral employers”

from being burdened with hot cargo clauses. Id. at 624-

25, 627, 635, 645.

Focusing exclusively on the effect of its decision on

Kaiser Steel’s supplier, Mid-Continent, and the fact that

the 1974 agreement had expired, the court of appeals

concluded that enforcement of the purchase-of-coal clause

would not enforce unlawful conduct because it could no

longer cause Kaiser Steel to boycott Mid-Continent during

® See, e. g., Raymond O. Lewis, 148 N.L.R.B. 249, 253 (1964);

Lithographers Local 19, 180 N.L.R.B. 985, 987-88 (1961), enforced

in pertinent part, 309 F.2d 81 (9th Cir. 1962), cert. denied, 372

U.S. 948 (1963).

9

the term of the contract. But while compelling the pay-

ments called for by the penalty clause in the 1974

agreement would not deprive Mid-Continent of the sales

it had made to Kaiser Steel during the term of that

agreement, it would penalize Kaiser Steel for having

done business with Mid-Continent during that period.“

Thus, by enforcing the unlawful purchase-of-coal clause,

the court below would cause the precise injury that

Section 8(e) is primarily intended to prevent—harm

to a neutral employer, Kaiser Steel. The decision under-

mines the very purpose for which Section 8(e) was

enacted and cannot be reconciled with the teachings of

National Woodwork.

Second, the purchase-of-coal clause violates the Sher-

man Act by imposing an unlawful surcharge or penalty

on purchasers who, like Kaiser Steel, buy some of their

coal requirements from non-UMW producers. It is un-

lawful both because it impairs the ability of non-UMW

producers to compete with UMW producers for sales to

companies such as Kaiser Steel and because it penalizes

such companies when they choose their suppliers on the

basis of competitive merit.“

In requiring that Kaiser Steel make the penalty pay-

ments called for by the purchase-of-coal clause, the court

10 It would also cause future boycotts of non-UMW coal producers

like Mid-Continent. The successor to the 1974 agreement and

other UMW agreements contain, and likely will contain in the

future, penalty clauses that are in all pertinent respects identical

to the purchase-of-coal clause at issue in this case. See n.20,

infra. In making purchasing decisions, employers subject to these

penalty clauses will undoubtedly be influenced by the decision below,

and employers who otherwise would buy coal from non-UMW sup-

pliers will be encouraged by the penalty clause to boycott those

suppliers.

11 Because it is unlawful to require purchasers to make pay-

ments pursuait to such a clause, those who are required to

make such payments may recover three times their amount as treble

damages under the antitrust laws. See, e.g., Response of Carolina,

Inc. v. Leasco Response, Inc., 587 F.2d 1307 (5th Cir. 1976);

Carpa, Ine. v. Ward Foods, Inc., 536 F.2d 39 (5th Cir. 1976).

10

of appeals would thus subject Kaiser Steel to an injury—

payment of an unlawful penalty—that the antitrust laws

are intended to prevent. It would also give Kaiser Steel

an incentive to boycott non-UMW producers such as

Mid-Continent in the future. The court’s decision would

thus cause the precise conduct made unlawful by federal

law and deprive Kaiser Steel and the public “of the pro-

tection which Congress has conferred.”

B. The Court of Appeals’ Sweeping Decision Will

Eliminate the Defense of IIlegality and Have a

Significant and Widespread Impact on Future Cases

in Which Parties Seek Judicial Aid in Enforcing

Unlawful Contracts.

The court of appeals’ decision is wrong for another

reason as well. Until this case, it has always been the

law that courts will not enforce an unlawful contract

provision, even if the court’s remedy would not require

any conduct that is itself illegal.“ As this Court put it,

courts will not lend their aid to a party “seeking to

12 United States v. Mississippi Valley Generating Co., 364 U.S.

520, 563 (1961).

1 In McMullen v. Hoffman, for example, this Court denied the

plaintiff's suit for an accounting of partnership profits, even though

the illegal bid fixing scheme that led to formation of the partner-

ship by the two contractors had already been terminated and the

accounting would not have brought about any of the effects that

the law barring bid fixing was designed to prevent. As the Court

stated: “In the case before us the cause of action grows directly

out of the illegal contract, and if the Court distributes the profits

it enforces the contract which is illegal.” 174 U.S. at 660. See

also, e. g., Farbenfabriken Bayer A.G. v. Sterling Drug, Inc. 307

F.2d 207 (3d Cir. 1962), cert. denied, 372 U.S. 929 (1963) (re-

fusing request for an accounting and a share of the profits from

an unlawful market allocation agreement); Premier Electrical

Constr. Co. v. Miller Davis Co., 291 F. Supp. 295 (N.D. III. 1968),

aff'd, 422 F.2d 1132 (7th Cir.), cert. denied, 400 U.S. 828 (1970)

(denying enforcement of subcontracting agreement conditioned on

illegal bid fixing arrangement). Cf. Vendo Co. v. Lektro-Vend

Corp., 433 U.S. 623, 646 n.3 (1977) (Stevens, J., dissenting) (not-

ing that enforcement of contract clauses in such cases “would be

to make the courts a party to the carrying out of one of the very

restraints forbidden by the Sherman Act.”).

11

realize the fruits of an agreement that appears to be

tainted with illegality.“ Continental Wall Paper Co. v.

Louis Voight & Sons Co., 212 U.S. 227, 262 (1909).

While the court of appeals in this case naturally fo-

cused on plaintiffs’ particular claim against Kaiser Steel,

its decision to depart from prior law rested on principles

of policy and equity that will have significant, far-reach-

ing impact. Adverting to notions of “unjust enrichment”

and “waiver,” the court of appeals held that Kaiser Steel

was not entitled to raise the illegality defense because

it had previously “ignored” the clause without pursuing

offensively “its opportunities for a timely and direct

adjudication of its rights.” *

The court of appeals has for all practical purposes

written the defense of illegality out of the law. By

definition, a party can raise a defense of illegality only

by waiting until suit is brought against it. Recognition

of the illegality defense always relieves the defendant of

an obligation he undertook and denies the plaintiff a ben-

efit he bargained for. Yet, until now, the courts have

uniformly held that an illegal contract provision will

not be enforced, even if the plaintiff is seeking accrued

14 If that were not the law, a hired murderer, after performing

his part of a contract to kill, could prevail in a suit for the con-

tract price on the theory that compelling payment would not bring

about a homicide and thus would not cause the very conduct for-

bidden by law. That result would be unthinkable.

15 App. A at 18a. The court of appeals also evidently thought

that this case was somehow different from all the rest because the

clause had not previously been found to be illegal and the issue

was therefore whether “the district court properly declined to

entertain the defense” of illegality. Id. at 9a n.6. But this dis-

tinction has no support in law or policy; in almost ail of the

cases in which enforcement of a contract clause was refused on

grounds of illegality the contract provision had not previously

been found to be unlawful. See, e.g., Continental Wall Paper Co.

v. Louis Voight & Sons Co., supra; McMullen v. Hoffman, supra;

Eiberger v. Sony Corp., 459 F. Supp. 1276 (S.D.N.Y. 1978), aff’d,

622 F.2d 1068 (2d Cir. 1980); Revlon, Inc. v. Williams Int'l, Inc.,

30 Misc. 2d 772, 214 N. V. S. 2d 456 (Sup. Ct. 1961).

12

obligations and the defendant has benefited from the

contract as a whole and has received all the considera-

tion due him.“ No court before now has enforced an

illegal agreement on the ground that the parties agreed

to it and otherwise carried out their bargain or that

nonenforcement would unjustly enrich the defendant."

Nor has the illegality defense been rejected on grounds

of waiver or estoppel.“ On the contrary, until now it

16 See, e. g., cases cited in n.17, infra, and Associated Press v.

TaféIngalls Corp., 340 F.2d 753 (6th Cir.), cert. denied, 382 U.S.

820 (1965). See also National Electrical Contractors Ass’n, Inc. v.

Howard P. Foley Co., 498 F. Supp. 552 (D. Md. 1980).

The cases on which the court of appeals relied are all very

different. Kelly v. Kosuga, supra, and Huge v. Long’s Hauling

Co., 590 F.2d 457 (3d Cir. 1978), cert. denied, 442 U.S. 918 (1979),

upon which the court below principally relied, involved lawful con-

tract clauses alleged by the defendants to be unenforceable because

of “collateral” illegalities of other parts of the parties’ agreements.

See also App. A at 16a-17a, citing Viacom Int'l, Inc. v. Tandem

Productions, Inc., 526 F.2d 593, 598 (2d Cir. 1975) (whether a

contract clause could be enforced would “depend on the court’s

perception of the contract [provision sought to be enforced] as

a separate or ‘collateral’ entity or as an integral part of [the

illegal provision], enforcement of which would effectuate ‘the pre-

cise conduct made unlawful’ ” by the antitrust laws).

17 Indeed, the courts have refused to enforce contract clauses that

were found to be illegal where the plaintiff was suing for money

owed for services previously rendered or goods previously sup-

plied (e.g., McMullen v. Hoffman, supra; Farbenfabriken Bayer

A.G. v. Sterling Drug, Inc., 307 F.2d 207 (3d Cir. 1962), cert.

denied, 372 U.S. 929 (1963); Kogod v. Stanley Co., 186 F.2d 763

(D.C. Cir. 1950); Eiberger v. Sony Corp., 459 F. Supp. 1276

(S.D.N.Y. 1978), af d, 622 F.2d 1068 (2d Cir. 1980) ; United States

v. Bayer Co., 135 F. Supp. 65 (S.D.N.Y. 1955); Revlon, Ine. v.

Williams Int'l, Inc., 30 Misc. 2d 772, 214 N.Y.S.2d 456 (Sup. Ct.

1961) ; where the contract had already expired by its terms (id.);

where the plaintiff had performed all of his obligations (id.); and

even where the defendant himself benefited from that which made

the contract clause illegal (e. g., McMullen v. Hoffman, supra; Far-

benfabriken Bayer A. G. v. Sterling Drug, Inc., supra; United States

v. Bayer Co., supra).

18 Applying waiver principles to strike the illegality defense is

especially inappropriate in this case, for the court of appeals illogi-

18

has always been recognized that those doctrines have no

place in an action brought to enforce a contract that is

forbidden by statute or contrary to public policy. “Such

a contract has no legal existence . . . and neither action

nor inaction of a party to it can validate it and no

conduct of a party to it can be invoked as an estoppel

against asserting its validity.” “

Because the court of appeals’ rationale would justify—

indeed, require—enforcement of an illegal contract clause

in most if not all contract enforcement actions, the prac-

tical impact of the decision is likely to be substantial.”

cally and unfairly allocated responsibility between the parties. Both

the Trustees and Kaiser Steel long doubted the legality of the pur-

chase-of-coal clause, and both long knew of Kaiser Steel's refusal to

comply with it. Both could have brought suit sooner, but both

chose not to. If either party should be charged with the risk of

inaction, it is the Trustees. Only they knew whether they would

reverse their longstanding policy of nonenforcement, making litiga-

tion regarding the lawfulness of the purchase-of-coal clause neces-

sary and appropriate.

19 Cecil B. DeMille Productions v. Woolery, 61 F.2d 45, 49 (9th

Cir. 1982). As this Court recognized in United States v. Missis-

sippi Valley Generating Co., 364 U.S. 520, 565 (1961), “even if

[nonenforcement of an illegal contract! .. in a given case may

seem harsh . . . that result is dictated by the public policy mani-

fested by the statute.” See also, e. ., Sola Elec. Co. v. Jefferson Elec.

Co., 317 U.S. 178 (1942); Nathan v. Tenna Corp., 560 F.2d

761 (7th Cir. 1977); Inter-Continental Promotions, Inc. v. Miami

Beach First Nat'l Bank, 441 F.2d 1356 (5th Cir.), cert. denied,

404 U.S. 850 (1971); Doherty v. Bartlett, 81 F.2d 92° (1st Cir.),

cert. denied, 298 U.S. 676 (1936).

20 The court’s determination has already been relied on by the

Trustees in actions brought to enforce against Kaiser Steel the

purchase-of-coal clause in the 1978 collective bargaining agreement

(see n.4, supra) and to enforce against another steel company the

penalty clause in the 1974 agreement (Mullins v. Reitz Coal Co.,

No. 78-0715 (D.D.C. Mar. 28, 1979)). Plaintiffs and the UMW

apparently intend to continue to insist upon the inclusion of these

penalty clauses in future contracts. They settled recent litigation

with U.S. Steel Corporation only after extracting from U.S. Steel

14

If left to stand, the court’s decision would provide an

incentive for parties to include unlawful provisions in

their agreements in the expectation that the defense

of illegality will not be available if enforcement is sought.

It would thus promote unlawful conduct and erode the

public interests served by the federal laws proscribing

such conduct.

Moreover, under the rule established below, parties

to contracts of questionable legality would be induced to

initiate legal proceedings—even if no efforts to enforce

the contracts or secure compliance have been made or

could be foreseen—solely to ensure that they will not

later be estopped from arguing that the contracts are

illegal. The decision would thus lead to a proliferation

of what may be wholly unnecessary lawsuits.

II. THE COURT OF APPEALS’ HOLDING THAT FED-

ERAL COURTS HAVE NO JURISDICTION TO DE-

CIDE WHETHER CONTRACT CLAUSES THEY

ARE ASKED TO ENFORCE VIOLATE SECTION

8(e) OF THE LMRA IS ERRONEOUS AND CON-

FLICTS WITH PRIOR DECISIONS OF THIS

COURT AND OTHER CIRCUIT COURTS.

The court of appeals held that the district court did

not have jurisdiction to determine whether the purchase-

of-coal clause violated Section 8(e), even in an action

brought for specific performance of that clause. Only

the NLRB, said the court, can decide in the first instance

whether a contract clause violates Section 8(e). The

court’s construction of the LMRA is erroneous, probably

unconstitutional, and in conflict with decisions of at least

two other circuits.

a promise that it would not challenge the lawfulness of the penalty

clause, by litigation or negotiation, in either the 1974 Agreement

or any other agreement in the future. United States Steel Corp. v.

International Union, UMW, No. 75-1966, Order and Memorandum

of Agreement (D.D.C., filed Oct. 5, 1977).

15

A. The Court of Appeals Has Misunderstoed Section

8(e) and the Prior Decisions of This Court.

Congress provided in Section 8(e), in language that

could not be more clear, that all hot cargo clauses ™ shall

be “unenforcible and void.” * That language is an unmis-

takable statutory command that hot cargo provisions are

void at their inception and are at all times unenforceable

by the federal courts.** As Congressman Griffin, the spon-

sor of the House bill, said of a provision that became

Section 8 (e):

“Subsection (b) of Section 705 not only makes it an

unfair labor practice to enter into a ‘hot cargo’ agree-

n With exceptions, for the construction and garment industries,

not relevant in this case.

22 See National Labor Relations Board, 2 Legislative History of

Labor-Management Reporting and Disclosure Act of 1959 (“Legis.

Hist.“) at 1258, 1290, 1861 (1959) (remarks of Senators Kennedy

and Goldwater).

That Congress intended to prohibit the enforcement of hot cargo

clauses is made clear also by the contrast of the main clause of

Section 8(e) with the “garment industry” proviso to the section,

which states that Section 8(e) is not intended to “prohibit the

enforcement” of those garment industry agreements that are

exempted from the general prohibition of hot cargo clauses. 29

U.S.C. §158(e) (emphasis added).

23 Senator Goldwater, one of the original sponsors of the bill

that became Section 8(e), described the law as rendering hot

cargo provisions “unenforcible and void for all purposes” and

added :

“This means that such contractual clauses are per se illegal.

It is unlawful for either party even to execute such an agree-

ment, to insist that the other party bargain about or enter

into it, to use any form of coercion or restraint—economic or

otherwise—to compel the other party to enter into it, or to

live up to it even if his refusal to do so is in breach of a volun-

tary agreement to abide by the agreement, and finally, such

breach does not constitute a good cause of action in a suit at

law to recover damages for the breach or to secure specific

performance of the agreement.” 2 Legis. Hist. at 1857 (em-

phasis added).

See also remarks of Representative Kearns, id. at 1861.

16

ment, but also, makes it clear that such contracts are

‘void and unenforcible.’” National Labor Relations

Beard, 2 Legislative History of Labor-Management

Reporting and Disclosure Act of 1959 at 1523 (1959)

(emphasis added) .*

The court of appeals’ construction of Section 8(e) is

both less straightforward and untenable. According to

the court of appeals, the “unenforcible and void” language

does not prohibit the enforcement of illegal hot cargo

clauses or, as the court put it, provide a “remedy of con-

tract avoidance”; it serves instead only to prevent a

union from obtaining specific performance of an agree-

ment by an employer to boycott a third party supplier.“

The court made two errors. First, the court over-

looked the primary purpose of Section 8(e), which, as

noted, is to protect neutral employers like Kaiser Steel,

not boycotted third parties. It makes no sense to con-

strue the most explicit and powerful part of Section 8 (e)

to protect only parties whose interests were not of pri-

mary concern to Congress.

Second, and more important, by treating the case as

if Kaiser Steel had initiated litigation seeking a “remedy

of contract avoidance,” the court erroneously got side-

tracked on the primary jurisdiction issue. It was plain-

tiffs, not Kaiser Steel, who sought a remedy in this

case; the court should thus have asked whether plain-

2 See also, H.R. No. 1147, 86th Cong., Ist Sess. 39 (1959) (the

statute “makes any such agreement heretofore or hereafter ex-

ecuted unenforcible and void”); remarks of Congressman Rhodes,

2 Legis. Hist. at 1581 (“not only... an unfair labor practice

but also . void and unenforceable”).

2 App. A at 22a. The court actually said that it construed the

language to prevent unions “from obtaining specific performance of

a ‘hot cargo’ clause... .” Id. at 23a. Since plaintiffs in this

case sought, and obtained from the lower courts, specific perform-

ance of the hot cargo clause here at issue, the court’s stated

principle would compel a result different from that which it reached.

Presumably, therefore, the court meant that the “unenforcible and

void” language was intended to prohibit specific performance of

actual refusals to deal, not all forms of specific performance of

illegal hot cargo clauses.

17

tiffs had any right to the specific performance remedy

they sought. Had the court asked that question, it would

have understood that it could not enforce the purchase-

of-coal clause without deciding whether the clause vio-

lated Section 8(e)—whether, in other words, it created

any valid, legal obligations.

Where a contract provision, such as an illegal hot

cargo clause, is void as against public policy, it has no

existence in the eyes of the law: It is “nugatory and

without legal effect.“ “ As this Court stated recently,

where a statute provides that a contract is “void,” alt

the very least Congress must have assumed that [the

statute] could be raised defensively in private litigation

to preclude the enforcement of ... [the] contract.”

Transamerican Mortgage Advisory, Inc. (TAMA) v.

Lewis, 444 U.S. 11, 18 (1979) (emphasis added).

Congress intended no departure from these principles

in enacting Section 8(e) and providing that hot cargo

clauses are “unenforcible and void.“ Indeed, prior deci-

26 Boatland, Inc. v. Brunswick Corp., 558 F.2d 818, 823 (6th

Cir. 1977). See also Miller v. Ammon, 145 U.S. 421, 427 (1892)

(It is “the ordinary rule that an act done in disobedience to the

law creates no rights of action which a court of justice will en-

force.“); Laborers’ Int'l Union Local 107 v. Kunco, Inc., 344 F.

Supp. 626, 630 (W.D. Ark. 1972), rev’d on other grounds, 472

F.2d 456 (8th Cir. 1973) (where a contract is prohibited by law,

“no cause of action for an alleged breach thereof can be main-

tained.”).

27The rationale for precluding federal courts from deciding

labor law issues—that only the NLRB is competent to decide

them—has no application to the issues that arise under Section

8(e). Federal courts are empowered by Section 303 of the LMRA,

29 U.S.C. § 187, to decide the same issues. Section 303 authorizes

federal courts to hear suits for damages brought by anyone alleg-

ing injury from a violation of Section 8 (b) (4) (B) of the LMRA,

and the question raised by Kaiser Steel's defensae—whether the

purchase-of-coal clause is designed to serve union objectives out-

side Kaiser Steel’s work unit—is the same question that courts

decide in actions arising under Section 303.

The court of appeals in this case evidently understood that fed-

eral courts are competent to decide hot cargo questions. As noted,

18

sions of this Court, although not directly deciding the

question posed in this case, make clear that Congress’

prohibition of hot cargo clauses can be raised defensively

in private litigation to preclude the enforcement of such

a clause.

In National Woodwork Manufacturers Association v.

NLRB, supra, this Court recognized that Section 8(e)

was added to the LMRA precisely to prevent

“the possibility of damage actions against employers

for breaches of ‘hot cargo’ clauses.” 386 U.S. at

634.

And in Connell Construction Co. v. Plumbers & Steamfit-

ters Local 100, 421 U.S. 616, 628 (1975), this Court—far

from deferring to any exclusive NLRB jurisdiction—de-

cided in the first instance that the contract in question

there was illegal under Section 8 (e).“ The Court found

“no legislative history in the 1959 Congress suggesting

that labor-law remedies for § 8(e) violations were in-

tended to be exclusive.” Id. at 634. As Justice Stewart

said, in a passage with which no Justice disagreed:

“(T]he signatory of a purely voluntary agreement

that violates § 8(e) is fully protected from any dam-

it would permit federal courts to decide whether a contract clause

violates Section 8(e) in an action brought to enforce the boycott

itself.

28 The issue in Connell was whether a contract clause violated the

Sherman Act. In order to reach that issue the Court had to deter-

mine whether the clause comported with Section 8(e) and there-

fore was immune from antitrust scrutiny. The Supreme Court held

that the clause violated Section 8(e) and therefore was not immune

from scrutiny under tl.e Sherman Act. 421 U.S. at 626, 634.

Had Kaiser Steel done what the court of appeals said it should

have done—sought a declaratory judgment that the purchase-of-

coal clause violates the Sherman Act—then under Connell, the

court would have had to determine whether the purchase-of-coal

clause violates Section 8(e) in order to decide whether it is

immune from antitrust scrutiny. In other words, the court would

have had to do precisely what the court of appeals said it had no

power to do: examine in the first instance the legality of the

purchase-of-coal clause under the LMRA.

19

age that might result from the illegal ‘hot cargo’

agreement by his ability simply to ignore the con-

tract provision that violates § 8(e) .. .. Since § 8{e)

provides that any prohibited agreement is ‘unen-

forceable and void,’ any union effort to invoke legal

processes to compel the neutral employer to comply

with his purely voluntary agreement would obviously

be unavailing.” Id. at 649 n.9 (emphasis added).

The court of appeals’ decision not only misconstrues

Section 8(e) itself but also funs afoul of a more general

principle, manifest in a long line of decisions, that the

doctrine of primary NLRB jurisdiction does not prevent

a federal court from deciding labor law issues that arise

in actions, like this one, “brought under independent

federal remedies.” Id. at 626.“ It has thus repeatedly

been held, for example, that a federal court may decide

all relevant legal questions in actions, like this one,

brought to enforce a collective bargaining agreement

under Section 301 of the LMRA and that the exclusive

jurisdiction doctrine has “no application” to such ac-

tions.” As this Court put it in Motor Coach Employees

2° See De Magno v. United States, No. 79-1852 (D.C. Cir. Sept.

24, 1980), in which the court held that “a court’s lack of jurisdic-

tion to decide an issue directly” when raised by a plaintiff “does

not limit the court’s power to decide the question to the extent it

is relevant to the dispute over which it does have jurisdiction.”

Slip op. at 23. Indeed, a court may decide the merits of a defend-

ant’s claim that a contract which the court is called upon to enforce

violates the law even if such question would normally lie within

the exclusive jurisdiction of another forum. Id. See also, e.g., Big

Top Stores, Inc. v. Ardsley Toy Shoppe, Ltd., 64 Misc. 2d 894, 315

N.Y.S.2d 897 (Sup. Ct. 1970), aff'd, 36 A.D.2d 582, 318 N.Y.S.2d

924 (App. Div. 1971) (exclusive federal court jurisdiction over

Sherman Act claims does not bar state courts from entertaining

defenses of illegality under that Act).

0 F. g., William E. Arnold Co. v. Carpenters District Council, 417

U.S. 12, 16 (1974); Vaca v. Sipes, 386 U.S. 171, 184 (1967);

Atkinson v. Sinclair Refining Co., 370 U.S. 238, 245 n.5 (1962);

Local 174, Teamsters v. Lucas Flour Co., 369 U.S. 95, 101 n.9

(1962). See also Smith v. Evening News Ass’n, 371 U.S. 195

(1962).

20

v. Lockridge, 403 U.S. 274, 300 (1971), “courts should

be free to interpret and enforce collective bargaining

agreements even where that process may involve con-

demning or permitting conduct arguably subject to the

protection or prohibition of the National Labor Relations

Act.” *

The court of appeals’ decision cannot be reconciled

with this principle. Whatever may be the exclusive

jurisdiction of the NLRB to grant remedies to employers

like Kaiser Steel when they initiate litigation, it does not

preclude a federal court from first looking to see if a

contract clause it is asked to enforce is illegal before

leaping to give the remedy of specific enforcement.

B. As Construed by the Court of Appeals, the LMRA

Would Unconstitutionally Intrude Upon the Ability

of the Federal Courts To Decide Contract Enforce-

ment Actions.

The court of appeals’ construction of Section 8(e) not

only cannot be reconciled with the plain meaning of the

statute, its legislative history or the prior decisions of

this Court, but also raises a serious constitutional ques-

tion. As construed by the court of appeals, the LMRA

would unconstitutionally intrude upon the federal courts’

ability to decide contract enforcement actions over which

Congress gave them jurisdiction and thus offend the con-

stitutional requirement of the separation of powers. This

constitutional problem further demonstrates that the court

of appeals’ construction of the LMRA is erroneous and

provides an additional reason for this Court to review the

court of appeals’ decision.

The parties and the lower courts agree that the dis-

trict court had jurisdiction to entertain plaintiffs’ action

«

31 See also Charles Dowd Boz Co. v. Courtney, 368 U.S. 502, 513

(1962) (“Congress deliberately chose to leave the enforcement of

collective bargaining agreements ‘to the usual processes of the

law.“).

21

under Section 301 of the LMRA.” But the court of ap-

peals went further and held that, in such a Section 301

action, the court is to determine only “what a particular

contract provision means and whether its obligations have

been fulfilled”; whether the contract clause violates Sec-

tion 8 (e), it said, is for the NLRB to decide.“

But the NLRB is under no obligation to examine a

contract provision, even on request of a party like Kaiser

Steel. Indeed, as the court of appeals recognized, a

decision by the general counsel of the NLRB not to

commence an enforcement proceeding in response to an

employer’s complaint challenging the lawfulness of a

hot cargo clause is not reviewable by any court.“

Thus, by holding that a federal court may not de-

termine the lawfulness of a contract clause under Section

8(e) in an enforcement action under Section 301, the

court has left employers like Kaiser Steel with the

prospect that they may be compelled to comply with a

contract clause the lawfulness of which no court has

been able to review. The court of appeals’ decision also

means that a federal court must, pursuant to Section

301 of the LMRA, enforce an illegal hot cargo clause

even though neither it nor any other court has ever been

able to pass on the lawfulness of the clause.

The court of appeals’ conclusion that Congress in-

tended the LMRA to preclude consideration of the le-

gality of a contract that it authorized the federal courts

to enforce raises grave constitutional problems. It has

* Section 301 vests in the district courts jurisdiction over

s juits for violation of contracts between an employer and a

labor organization representing employees in an industry affecting

commerce

33 App. A at 28a-24a.

* Vaca v. Sipes, 386 U.S. 171, 182 (1967); Associated Builders

and Contractors v. Irving, 610 F.2d 1221, 1226 (4th Cir. 1979),

cert. denied, 100 S. Ct. 294 (1980); National Alliance of Postal

and Federal Employees v. Klaesen, 514 F.2d 189, 197 (D.C. Cir.),

cert. denied, 423 U.S. 1087 (1975).

been clear for over a hundred years that Congress may

not grant a federal court jurisdiction to decide a case

and then tell it how to decide,“ and Article III of the

Constitution precludes withdrawing controlling questions

of law from federal enforcement courts.** In the absence

of a compelling showing in the LMRA or its legislative

history that Congress intended to bar a court from con-

sidering the legality of contracts it is called upon to en-

force, the statute should not be read to produce this

impermissible result.

The Article III question raised here is of crucial im-

portance to our constitutional scheme; and the LMRA

itself—and Sections 301 and 8(e) in particular—have

widespread application. The court of appeals’ decision,

which misapprehends the meaning of Section 8(e) and

imputes to Congress an intention to encroach impermis-

sibly on the power of the federal courts fully to decide

contract enforcement actions properly before them, should

not be allowed to stand.

%5 F. 9., United States v. Klein, 80 U.S. (13 Wall.) 128 (1872).

See also, e.g., De Magno v. United States, No. 79-1852, Slip op.

at 24 (D.C. Cir. Sept. 24, 1980) (to permit an agency “to enlist

the coercive power of the courts to enforce a money judgment

against an individual without the basis of the. . claim ever being

subject to judicial scrutiny ... is contrary to the very notion of

an ordered government of checks and balances”); United States v.

Howard, 440 F. Supp. 1106 (D. Md. 1977), aff'd on other grounds,

590 F.2d 565 (4th Cir.), cert. denied, 440 U.S. 976 (1979).

% As Professor Hart put it in his famous Dialogue“:

“Name me a single Supreme Court case that has squarely

held that, in a civil enforcement proceeding, questions of law

can be validly withdrawn from the consideration of the en-

forcement court where no adequate oppor unity to have them

determined by a court has been previously accorded. When you

do, I’m going back to re-think Marbury v. Madison.”

Hart, The Power of Congress to Limit the Jurisdiction of Federal

Courts: An Exercise in Dialectic, 66 HARV. L. REV. 1362, 1378-1379

(1953), reprinted in H. Hart and H. Wechsler, The Federal Courts

and the Federal System (2d Ed. 1973) at 330, 341 (footnote

omitted).

C. The Court of Appeals’ Decision Conflicts with De-

cisions of at Least Two Other Circuit Courts.

The court of appeals’ decision that a federal court may

not in the first instance decide whether a contract clause

violates Section 8 (e) conflicts with the decisions of at

least two other circuit courts.

The Second Circuit is the most squarely contrary:

It has held that a federal court, in an action under

Section 301 to enforce a clause in a collective bargaining

agreement, may itself determine that the clause violates

Section 8(e) and therefore refuse to enforce it. United

Optical Workers Union Local 408 v. Sterling Optical

Co., 500 F.2d 220 (2d Cir. 1974), aff'g United Optical

Workers Union Local 408 v. Sterling Optical Co., 74

Lab. Cas. (CCH) f 10,304 at 17,067 (E. D. N. V. 1973) .“

In another case, the Second Circuit stated that “resort

to the court to enforce a provision invalid under § 8(e)

will almost always be futile, given the section’s declara-

tion that such provisions are unenforcible [sic] and

void.” Carrier Air Conditioning Co. v. NLRB, 547 F.2d

1178, 1191 n.15 (2d Cir. 1976), cert. denied, 431 U.S.

974 (1977). Indeed, the Second Circuit has even held

that the primary jurisdiction doctrine does not bar a

district court from entertaining an employer’s suit seek-

ing a declaratory judgment that a clause in a collective

* In Botany Indus., Inc. v. Clothing Workers, 375 F. Supp. 485

(S.D.N.Y.), vacated as moot, 506 F.2d 1246 (2d Cir. 1974), the

employer defended a union’s Section 301 suit to enforce an arbi-

trator’s award directing the employer to comply with a clause in

their collective bargaining agreement on the ground that enforce-

ment of an award would be improper because the cause violated

Section 8(e). The court rejected the union’s contention that the

court lacked jurisdiction to hear the Section 8(e) defense, relying

on the holding of Hurd v. Hodge, 334 U.S. 24, 35 (1948), that

„where the enforcement of private agreements would be violative

of [the public policy of the United States as manifested in the

Constitution, treaties, and federal statutes], it is the obligation of

courts to refrain from such exertions of judicial power.”

24

bargaining agreement violates Section 8(e). Todd Ship-

yards Corp. v. Industrial Union of Marine and Ship-

building Workers Local 39, 344 F.2d 107 (2d Cir. 1965).

The court of appeals’ decision in this case is also in

conflict with the law of the First Circuit, which has

rejected the contention that the NLRB has exclusive

jurisdiction to decide unfair labor practice issues in the

first instance. In Local 1896, IAM v. Brake and Elec-

tric Sales Corp., 279 F.2d 590 (Ist Cir. 1960), the

First Circuit affirmed a district court’s refusal to en-

force a union security and arbitration clause in a col-

lective bargaining agreement on the ground that enforce-

ment would involve a violation of Section 8 (a) (3) of

the LMRA.

The law of the Third Circuit is less clear. In Huge

v. Long’s Hauling Co., 590 F.2d 457 (3d Cir. 1978),

cert. denied, 442 U.S. 918 (1979), the court stated,

without having to decide, that a federal court may not

initially decide an issue of labor law illegality.** But

in Lewis v. Seanor Coal Co., 382 F.2d 437 (3d Cir.

1967), cert. denied, 390 U.S. 947 (1968), the same court

made clear that a contract clause which is itself an

illegal hot cargo clause may not be enforced.

One other circuit court agrees with the court of ap-

peals in this case. In Waggoner v. R. McGray, Inc., 607

F.2d 1229 (9th Cir. 1979), the Ninth Circuit ruled that

the NLRB’s primary jurisdiction precludes federal courts

from acting as the initial arbiters of unfair labor prac-

tice charges in actions brought under Section 301.

In short, five circuit courts have addressed the ques-

tion whether and when federal courts may entertain

a8 It was not argued in Huge that the contract provision there

sought to be enforced was itself unlawful; rather, the employer

defended on the ground that a wholly separate provis - violated

Section 8(e). The court thus had no need to resolve the Section

8(e) issue in order to dispose of plaintiffs’ contract claim.

defenses of labor law illegality in contract enforcement

actions. They have reached widely varying and conflict-

ing conclusions. The issues are important, and this Court

should grant certiorari to resolve the conflict in the

circuits.

III. THE COURT OF APPEALS’ DECISION AFFIRM-

ING THE AWARD OF ATTORNEYS’ FEES

STRETCHES ERISA JURISDICTION FAR BE-

YOND CONGRESS’ INTENT, FLOUTS THIS

COURT’S DECISION IN ALYESKA, AND PROM-

ISES TO STIMULATE PENSION AND ATTOR-

NEYS’ FEES LITIGATION IN THE FEDERAL

COURTS.

In Alyeska Pipeline Co. v. Wilderness Society, 421

U.S. 240 (1975), this Court decided that federal courts

may not award attorneys’ fees to prevailing litigants un-

less authorized to do so by federal statute. If the court

of appeals’ novel and cursory approach to statutory con-

struction in general—and to the scope of ERISA juris-

diction in particular—is left standing, there will be

a gaping loophole to this otherwise basic legal principle.

Plaintiffs’ complaint alleges a single cause of action—

failure by Kaiser Steel to comply with the 1974 collec-

tive bargaining agreement. Plaintiffs alleged, and Kaiser

Steel and the lower courts agreed, that the district court

had jurisdiction under Section 301 of the LMRA to

provide plaintiffs with the relief they sought. No statute,

however, authorizes an award of attorneys’ fees in suits

brought under Section 301.“

%°Only Congress has the “power and judgment” to determine

when attorneys’ fees are appropriate; the judiciary is not free to

“pick and choose among plaintiffs and the statutes under which

they sue and to award fees in some cases but not in others

Id. at 269.

0 F. g., General Tel. Co. v. International Bhd. of Electrical

Workers Local 89, 554 F.2d 985, 987 (9th Cir. 1977); National

Ass'n of Letter Carriers v. United States Postal Service, 590 F.2d

1171, 1176 & n.5 (D.C. Cir. 1978); Western Elec. Co. v. Communi-

Plaintiffs also claimed jurisdiction under Section 502

of ERISA, 29 U.S.C. § 1132, which (unlike the LMRA)

authorizes courts to award attorneys’ fees. Section 502(g),

29 U.S.C. § 1132 (g). But plaintiffs did not allege that

Kaiser Steel had violated ERISA, and they did not even

put in the record any plan regulated by ERISA. There

was, therefore, no jurisdiction under ERISA. See 29

U.S.C. § 1132 (a) (3).

ERISA is not intended to regulate collective bar-

gaining agreements or “to control every aspect of the

employer-employee relationship or every promise made to

employees.“ Its purpose is to protect beneficiaries from

incompetent or dishonest fiduciaries and “to curb the

funding and disclosure abuses of employee pension and

welfare benefit plans by establishing minimum federal

standards.“

cation Equipment Workers, Inc., 554 F.2d 135, 188 (4th Cir. 1977);

International Bhd. of Electrical Workers Local 12 v. A-1 Elec.

Service, Inc., 585 F.2d 1 (10th Cir. 1976), cert. denied, 429 U.S.

832 (1976).

41 See also Smith v. Hickey, 482 F. Supp. 644, 650 (S. D. N. V.

1979) (jurisdiction under Section 502 of ERISA does not exist

when “plaintiffs are not seeking redress for any violation of

ERISA”). As Congress said, “civil actions may be brought [under

ERISA] by a participant or beneficiary to recover benefits due

under the plan, to clarify rights to receive future benefits under

the plan, and for relief from breach of fiduciary duty.” Employee

Retirement Income Security Act of 1974, Conference Report, S. Rep.

No. 1090, 93d Cong., 2d Sess. 327 (1974).

42 Taggert Corp. v. Efros, 475 F. Supp. 124, 125 (S.D. Tex.

1979), citing Wadsworth v. Whaland, 562 F.2d 70, 73-74 (Ist Cir.

1977), cert. denied, 435 U.S. 980 (1978).

43 Murphy v. Inexco Oil Co., 611 F.2d 570, 574 (5th Cir. 1980).

Section 2 of ERISA describes the statute’s purpose as follows:

“[T]o protect. . . the interests of participants in employee

benefit plans and their beneficiaries, by requiring the disclosure

and reporting to participants and beneficiaries of financial and

other information with respect thereto, by establishing stand-

ards of conduct, responsibility, and obligation for fiduciaries

of employee benefit plans, and by providing for appropriate

27

Plaintiffs do not need ERISA jurisdiction to enforce

the collective bargaining agreement; Section 301 of the

LMRA provides a fully adequate remedy for their con-

tract elaim.“ Apparently, plaintiffs alleged ERISA ju-

risdiction only in order to provide a basis for claiming

attorneys’ fees.“ If left to stand, the court of appeals’

decision awarding attorneys’ fees as if there were

ERISA jurisdiction would encourage other litigants also

“to add perhaps unjustified ERISA claims to their suits

in the hopes of recovering attorneys’ fees after prevailing

on other claims.” **

remedies, sanctions, and ready access to the Federal Courts.”

29 U.S.C. § 1001.

See Cate v. Blue Cross & Blue Shield, 484 F. Supp. 1187, 1190

(E.D. Tenn. 1977) (“It is clear from this declaration of policy,

and from the structure of the Act, that the focus of Congress was

on the ‘conduct, responsibility and obligation’ of those who were

responsible for administering employee benefit plans.”’).

Cf. International Brotherhood of Teamsters v. Daniel, 439

U.S. 551, 570 (1979) (“Congress believed that it was filling a regu-

latory void when it enacted ERISA.”). This Court has recently

granted certiorari in another case to examine the relationship

between other provisions of the LMRA and ERISA. Amar Coal

Co. v. NLRB, 614 F.2d 872 (8d Cir. 1980), cert. granted, 49

U.S.L.W. 3516 (1981).

45 Compare Cowan v. Keystone Employee Profit Sharing Fund,

586 F.2d 888, 892 (ist Cir. 1978) quoting Bell v. Hood, 827 U.S.

678, 682 (1946).

4% Fase v. Seafarers Welfare and Pension Plan, 79 F.R.D. 363,

366 (E.D.N.Y. 1978). The court of appeals cites nine instances in

which suits brought to compel contributions to pension funds

joined ERISA claims and resulted in an award of attorneys’ fees:

Mullins v. Reitz Coal Co., No. 78-0715 (D. D.C. March 23, 1979);

Huge v. Reid, 468 F. Supp. 1024 (N.D. Ala. 1979), aff'd mem.,

615 F.2d 916 (5th Cir. 1980); Huge v. Maximeadows Mining Co.,

459 F. Supp. 267 (N.D. Ala. 1978); Bugher v. Southland Fabri-

cators and Erectors, Inc., 452 F. Supp. 870 (W.D. La. 1978);

Sheet Metal Workers Nt'l Pension Fund v. Young's Roofing,

Inc., No. 77-1849 (D.D.C. May 3, 1978); Huge v. Overly, 445

F. Supp. 946 (W.D. Pa. 1978); JAM Nt’'l Pension Fund v. Ward

La France Truck Corp., C.A. 77-1206 (D.D.C. Feb. 1, 1978) ; Bugher

28

Indeed, one can imagine all kinds of interests future

litigants will have in claiming ERISA jurisdiction in

actions otherwise properly brought under other statutes

—to take advantage of ERISA remedies“ or its relaxed

amount in controversy or venue requirements,“ for ex-

ample, as well as attorneys’ fees. If plaintiffs can take

advantage of ERISA jurisdiction whenever they can

state a claim under another statute that the court finds

not “surgically discrete” from ERISA—whatever that

means—ERISA will have become a license for a flood

of lawsuits Congress never envisioned and did not au-

thorize when it enacted that statute.

V.. Frash, 98 L. R. R. M. 3010 (S.D. Ind. 1977). See App. A at

34a n. 14.

Since the court of appeals’ decision, there have been at least two

other cases filed in the District of Columbia Circuit in which

plaintiffs seek attorneys’ fees under ERISA for violations of col-

lective bargaining agreements. See Sheet Metal Workers’ Nt'l

Pension Fund v. General Metal Products, No. 80-3328 (D.D.C.

filed Dec. 31, 1980); Sheet Metal Workers’ Nt'l Pension Fund

v. Supreme Metal Fabricators, No. 80-3327 (D.D.C. filed Dec. 31,

1980).

* See e.g. Cate v. Blue Cross & Blue Shield, 484 F. Supp. 1187,

1190-91 (E.D. Tenn. 1977) (ERISA does not confer jurisdiction

over “an insurer whose only relation to an employee beenfit plan is

its contract to guarantee insurance benefits to participants in the

plan“); McNeil v. Suffolk Cty Painters Ins., 431 F. Supp. 387, 388

(E.D.N.Y. 1977) (ERISA does not confer jurisdiction over an

action “brought to enforce the arbitration clause of [an] employ-

ment contract between [the] trustees and [the] fund's adminis-

trator”).

*8 ERISA allows for federal jurisdiction without respect to the

amount in controversy or the citizenship of the parties,” 29 U.S.C.

§ 1132(f), and provides for venue “in the district where the plan is

administered, where the breach took place, or where a defendant

resides or may be found,” 29 U.S.C. § 1182(e) (2).

29

CONCLUSION

For the reasons stated above, certiorari should be

granted to review the judgment of the court of appeals.

Respectfully submitted,

RoBert A. HAMMOND, III

A. DOUGLAS MELAMED *

LYNN BREGMAN

JOSEPH A. GRUNDFEST

WILMER, CUTLER & PICKERING

1666 K Street, N.W.

Washington, D.C. 20006

(202) 872-6000

Of Counsel: Counsel for Petitioner

RICHARD GARY Kaiser Steel Corporation

General Counsel

Kaiser Steel Corporation

800 Lakeside Drive * Counsel of Record

Oakland, California 94666

February 10, 1981