Appellants Reply Brief — Brown v. Hotel Employees

ALEXANDER STEVAS.

CLERK

Supreme Court of the United States

Ocroser Term, 1983

MARTIN DANZIGER, ACTING CHAIRMAN; DON THOMAS, COM-

MISSIONER; MADELINE McWHINNEY, COMMISSIONER;

CARL ZEITZ, COMMISSIONER, CONSTITUTING THE CASINO

CONTROL COMMISSION, STATE OF NEW JERSEY,

Appellants,

HOTEL AND RESTAURANT EMPLOYEES AND BARTENDERS

INTERNATIONAL UNION LOCAL 54 and FRANK GERACE,

PRESIDENT, HOTEL AND RESTAURANT EMPLOYEES AND

BARTENDERS INTERNATIONAL UNION LOCAL 54,

Appellees.

On Appeal from the United States Court of Appeals

for the Third Circuit

REPLY BRIEF FOR APPELLANTS

ROBERT J. GENATT*

General Counsel

Princeton Pike Office Park

Building No. 5

CN-208

Trenton, New Jersey 08625

(609) 292-7584

Attorneys for Appellants

* Counsel of Record

Dated: March, 1984

Adams Press Corp., 50 Park Place, Newark, New Jersey 07102—(201) 623-8611

TABLE OF CONTENTS

TasLe oF AUTHORITIES

ARGUMENT

Point I—Abstention under the principles of

Younger v. Harris is appropriate in this case

Point II—Bus Employees v. Wisconsin Board is

inapposite to the present matter and utterly

fails to support the conclusion that section 93

of the Casino Control Act is preempted by sec-

tion 7 of the NLRA '

ii TABLE OF AUTHORITIES

PAGE

Table of Authorities

Cases Cited

Allen v. MeCurry, 449 U.S. 90 (1980) 3

Pus Employees v. Wisconsin Board, 340 U.S. 383

(1951) 4-7

De /eau v. Braisted, 363 U.S. 144 (1960) 5, 7,9

Hill v. Florida, 325 U.S. 538 (1945) 8

Huffman v. Pursue Ltd., 420 U.S. 592 (1975) ................ 3

International Longshoremen Assoc. v. Waterfront

Commission, 642 F.2d 666, 670-671 (2 Cir. 1981),

cert, den. 454 U.S. 966 (1981) 9

International Union of United Auto Workers v.

O’Brien, 339 U.S. 454 (1950) 5

Local 926 v. Jones, —— US. —— 103 S.Ct. 1453

(1983) 5, 6

Middlesex County Ethics Committee v. Garden State

Bar Association, 457 U.S. 423 (1982) 3

San Diego Building Trades Council v. Garmon, 359

U.S. 236 (1959) 5

Younger v. Harris, 401 U.S. 37 (1971) 2

Statutes Cited

29 U.S.C. 157 (1973)

29 U.S.C, 504 (1975) 7,8

N.J. Stat. Ann. 5:12-54(d) (West Supp. 1983) ............ 2

N.J. Stat. Ann. 5:12-55 (West Supp. 1983) .................... 2

TABLE OF AUTHORITIES

N.J. Stat. Ann, 5:12-93 (West Supp. 1983) ..................

N.J. Stat. Ann. 5:12-110 (West Supp. 1983) ................

Title 29 N.Y. Unconsol. Laws, Sec. 9933 (McKinney

1974)

Court Rules Cited

N.J. Ct. R. 2:9-7 (1984)

N.J. Ct. R. 2:9-8 (1984)

NO. 83-573

IN THE

Supreme Court of the United States

Ocroser Term, 1983

=

>

MARTIN DANZIGER, ACTING CHAIRMAN; DON

THOMAS, COMMISSIONER; MADELINE McWHIN-

NEY, COMMISSIONER; CARL ZEITZ, COMMIS-

SIONER, CONSTITUTING THE CASINO CONTROL

COMMISSION, STATE OF NEW JERSEY;

Appellants,

HOTEL AND RESTAURANT EMPLOYEES AND BAR-

TENDERS INTERNATIONAL UNION LOCAL 54; and

FRANK GERACE, PRESIDENT, HOTEL AND RES-

TAURANT EMPLOYENMS AND BARTENDERS IN-

TERNATIONAL UNION LOCAL 54,

Appellees.

On Appeal from the United States Court of Appeals

for the Third Circuit

»

—

REPLY BRIEF FOR APPELLANTS

ARGUMENT

POINT I

Abstention under the principles of Younger v. Harris

is appropriate in this case.

Appellees raise two points in response to the Commis-

sion’s abstention argument, both of which require a brief

reply.

Appellees contend that the abstention argument should

be rejected because it is not being presented in this Court

by co-appellant New Jersey Department of Law and Pub-

lic Safety, Division of Gaming Enforcement. However,

the New Jersey Legislature has seen fit to create two

state agencies to regulate casino gaming, and to provide

for separate representation of each, sce, N.J. Stat. Ann,

5:12-54(d) and -55 (West Supp. 1983), and the Casino

Control Commission is pressing the abstention argument

in this Court. Appellees contend that “(t]he Casino Com-

mission has no interest in delaying . . . adjudication be-

eause its proceedings have been completed and therefore

will not be interfered with by a decision here” (appellees’

brief at 13). The Commission has never had end does

not now have any interest in delaying adjudication. The

Commission merely seeks vindication of the abstention

argument it has maintained throughout this litigation.

It is true that the Commission’s adjudicatory hearing,

as well as the investigatory and prosecutorial efforts of

the Division of Gaming Enforcement, have been com-

_ pleted. However, the Commission has been enjoined from

enforcing its remedial order, and thus it is the Commis-

sion’s process which has been interfered with by the or-

der of the Circuit Court and which would be interfered

with by a decision on the merits by this Court.

3

Appellees’ remaining argument is that abstention is in-

appropriate because their constitutional claims could not

be resolved before the Commission, However, the state

appellate courts were always available to appellees, on an

interlocutory basis or on appeal of right from the Com-

mission’s final order, and appellees have in fact appealed

to the Superior Court, Appellate Division from the final

order and have raised the same constitutional claims pre-

sented to this Court. The state appellate courts are bound

by the same constitution as the federal courts, and are

obviously competent to hear and decide appellees’ consti-

tutional claims. See, Allen v. McCurry, 449 U.S. 90

(1980). The state appellate courts are also competent

to grant any stay or other interim relief which may be

necessary to preserve the status quo pending appeal. Cf.

Middlesex County Ethics Committee v. Garden State Bar

Association, 457 U.S. 423, 480, n.15 (1982).

The New Jersey Court, Rules provide that on or after

the filing of a notice of appeal, or notice of motion for

leave to file an interlocutory appeal, from a decision of

an administrative agency, a notice of motion for ad in-

terim relief or a stay may be made to the Appellate Divi-

sion, N.J. Ct. R. 2:9-7 (1984). The rules also provide

that applications for temporary relief, stays and emer-

gency orders may be made, with or without notice, to a

Justice of the State Supreme Court if a matter is pending

in the Appellate Division. N.J. Ct. R. 2:9-8 (1984). There

is thus no substance to appellees’ argument that absent

a federal injunction they would be left without an avenue

of interim relief from the Commission’s order. For the

reasons set forth in the Commission’s main brief, the dis-

trict court should have abstained and allowed the state

proceedings to complete their orderly course, including

appellees’ appeal as of right to the state courts from

any adverse agency determination. See, N.J. Stat. Ann.

5:12-110 (West Supp. 1983); Huffman v. Pursue Ltd., 420

U.S. 592 (1975).

4

POINT II

Bus Employees vy. Wisconsin Board is inapposite to

the present matter and utterly fails to support the con-

clusion that section 93 of the Casino Control Act is

preempted by section 7 of the NLRA.

On the issue of preemption, this reply brief will only

address the arguments raised in Point II C of appellees’

brief, premised on Bus Employees vy. Wisconsin Board, 340

U.S. 383 (1951). All other arguments advanced by appel-

lees regarding preemption have been dealt with in the

Commission’s principal brief.

Wisconsin Board involved a state statute which declared

it to be a misdemeanor for any employee of a public

utility to engage in a strike or to instigate, induce or

encourage a strike. The statute further provided that

whenever there was a collective bargaining “impasse” the

Wisconsin Employment Relations Board was to select

arbiters to “hear and decide” the dispute. 340 U.S, at

387-388. Wisconsin Board arrived in this Court on cer-

tiorari to the State Supreme Court, which had upheld ex

parte orders of lower state courts permanently enjoining

declared strikes against the Milwaukee Electric Railway

and Transport Company and the Milwaukee Gas Light

Company.

1 Even this brief recitation of the operative facts in Wisconsin

Board demonstrates its fundamental differences from the instant

matter. These differences will be detailed below. The Commission

therefore feels no compulsion to respond to appellees’ charge that

the appellants could not differentiate the case and chose instead to

“simply ignore that precedent despite the Court of Appeals’ strong

reliance thereon.” (appellees’ brief at 33). As will be apparent, the

Commission chose rather to focus on pertinent law in its presenta-

tion to this Court.

5

This Court noted that it had previously held, in Jnter-

national Union of United Auto Workers vy. O’Brien, 339

U.S, 454 (1950), that in enacting the NLRA Congress had

guaranteed the right to strike and established procedures

and limitations governing that right, and had thereby “occu-

pied this field and closed it to state regulation.” See, 340

U.S. at 390. The Court went on to hold that the Wisconsin

statute before it was invalid, explaining:

The utilities companies, the State of Wisconsin and

the other states as amici stress the importance of

gas and transit service to the local community and

urge that predominantly local problems are best

left to local governmental authority for solution.

On the other hand, petitioners and the National

Labor Relations Board, as amicus, argue that pro-

hibition to strikes with reliance upon compulsory

arbitration for ultimate solution of labor disputes

destroys the free collective bargaining declared by

Congress to be the bulwark of national labor policy.

This, it is said, leads to more labor unrest and dis-

ruption of service than is now experienced under

a system of free collective bargaining accompanied

by the right to strike. The very nature of the de-

batable policy questions raised by these contentions

convinces us that they cannot properly be resolved

by this Court. In our view, the questions are for

legislative rmination and have been resolved

by Congress adversely to respondents. [340 U.S.

at 397].

Appellees conclude from the above language of Wis-

consin Board that the balancing test so carefully developed

in such cases as San Diego Building Trades Council v.

Garmon, 359 U.S. 236 (1959), DeVeau v. Braisted, 363 U.S.

144 (1960), and Local 926 v. Jones, —~— US. ——, 103

6

S. Ct. 1453 (1983), should be discarded in evaluating the

constitutionality of section 93 of the Casino Control Act,

N.J. Stat. Ann. 5:12-93 (West Supp. 1983), and that the

compelling state interests which underly section 93 should

be ignored. However, Wisconsin Board does not establish

an exception to the Garmon balancing approach. As the

Garmon Court itself said:

When the exercise of state power over a particular

area of activity threatened interference with clearly

indicated policy of industrial relations, it has been

judicially necessary to preclude the states from

acting. [Citing, inter alia, Wisconsin Board.]

However, due regard for presuppositions of our

embracing federal system, including the principle

of diffusion of power not as a matter of doctrinaire

localism but a promotor of democracy, has required

us not to find withdrawal from the States of power

to regulate where the activity regulated was a

merely peripheral concern of the Labor Manage-

ment Relations Act. [Citations Omitted]. Or where

the regulated conduct touched interests so deeply

rooted in local feeling and responsibility that, in

the absence of compelling Congressional direction,

we could not infer that Congress had deprived the

states of power to act. [359 U.S. at 243-244].

In Wisconsin Board, and earlier in O’Brien, the Court

had canvassed the language and legislative history of the

NLRA, and concluded that Congress had left no room for

state enactments limiting the right to strike. In Wisconsin

Board, the Court also noted that Congress had itself ex-

pressly rejected a proposal to restrict that right as it

applies to public utilities. 340 U.S. at 390-394. The Court

was faced with a statute which completely eliminated the

right to strike with regard to workers in public utilities

in Wisconsin and struck down the statute. Wisconsin

Board is merely an example of a state legislating in an

area which has been entirely occupied by Congress and

enacting a statute which directly conflicts with national

labor policy.

In contrast, in adopting section 93 of the Casino Con-

trol Act New Jersey did not enter a field in which Con-

gress had left no room for state enactments and did not

contradict national labor policy. As discussed in the Com-

mission’s principal brief, in enacting the disqualification

criteria of section 504 of the LMRDA, and in approving

the compact involved in DeVeau, Congress made clear

that it was not occupying this field to the exclusion of

state regulation. As also previously explained, in DeVeau,

363 U.S. at 152, this Court made clear that section 8 of

the Waterfront Commission Act, Title 29, N.Y. Unconsol.

Laws, See. 9933 (McKinney 1974), did not conflict with

or seriously impede national labor policy as set forth in

section 7 of NLRA, 29 U.S.C. 157 (1973), and the same

conclusion must be reached with respect to section 93 of

the Casino Control Act.

The principal point of appellees’ argument is that pre-

emption is mandated where there is a direct conflict be-

tween federal and state enactments. The Commission does

not take issue with this assertion. Where Congress has

guaranteed the right to engage in an activity, a state stat-

ute prohibiting that activity cannot stand. The Commis-

sion’s point has always been that section 93 does not con-

tradict federal labor policy as embodied in section 7, This

is made clear, not by references to cases dealing with the

right to strike, but by reference to legislative pronounce-

ments (adoption of section 504 and approval of the com-

pact involved in DeVeau) and judicial pronouncements

(the DeVeau opinion) directly on point.

In fact, appellees themselves concede that section 504

of the LMRDA does not have preemptive effect (appel-

lees’ brief at 27), but nonetheless conclude that section 7

of the NLRA preempts section 93. However, the LMRDA

was an amendatory readoption of the NLRA. Appellees

apparently impute to Congress an intent, evidenced by its

adoption of section 504, to allow state enactments estab-

lishing additional disqualification criteria for labor lead-

ers, while at the same time precluding all such enactments

by readopting section 7.

Appellees later argued (Appellees’ brief at 34) that by

adopting the LMRDA in 1959 Congress ratified the deci-

sion in Hill v. Florida, 325 U.S. 536 (1945), a decision

which appellees interpret as precluding any state legisla-

tion which applies qualification criteria to labor union offi-

cials. Again, appellees are contending that Congress

adopted section 504 as a non-preemptive provision of the

LMRDA, thus allowing for state enactments in this area,

and at the same time ratified Hill, thus precluding all such

enactments. In dealing with what they contend is a cohesive

national labor policy, it is remarkable that appellees im-

pute such schizophrenic motives to Congress.

Clearly, by enacting the disqualification criteria of sec-

tion 504, and choosing not to give preemptive effect to that

section, Congress allowed for state enactments in the area.

On the other hand, some state enactments may well be so

broadly and unnecessarily intrusive upon the right to

choose representatives that they should be stricken in

deference to section 7. However, it is at least manifest

that state statutes of this type are not to be discarded

based on an absolutist concept of the right to choose rep-

resentatives, but must be examined on a particularized

basis which balances any incidental strictures on the right

against the purported state interest. It is difficult to

imagine a more circumscribed and justified example of

9

such a statute than section 93. As Judge Becker said in

his dissent below, it is a rare case in which a state statute

disqualifying labor leaders can stand, but the present

case, like DeVeau, is such a case. In any event, the ma-

jority of the Circuit Court surely erred in rejecting the

statute out of hand, just as appellees now urge this Court

to do.

One final point which requires a brief reply is appellees’

attack on the section 93 remedy relating to the prohibition

of dues collection. It is clear, and the Commission has

ruled (A208a-A216a), that the only purpose of section 93

is to remove disqualified individuals from positions of

authority within casino industry labor unions. The dues-

prohibition remedy is merely a means to that end. The

primary issue before this Court is whether section 7 of the

NLRA precludes New Jersey from pursuing that end. If

the Commission is correct in arguing that New Jersey can

disqualify certain casino industry union leaders, the separ-

ate issue of the propriety of the dues-collection remedy

arises. In International Longshoremen Assoc. vy. Water-

front Commission, 642 F.2d 666, 670-671 (2 Cir. 1981),

cert. den. 454 U.S. 966 (1981), the Court noted that the

plaintiffs in DeVeau had challenged the propriety of the

dues-prohibition remedy in section 8 of the Waterfront

Commission Act and that this Court, in affirming the dis-

missal of the complaint, “had necessarily upheld, against a

claim of preemption, the validity of the dues-collection

prohibition.” The International Longshoremen’s Court

went on to uphold the dues-collection remedy against a

First Amendment challenge, but that issue is not now be-

fore this Court. At any rate, the Commission respectfully

submits that the dues-collection prohibition is a reasonable

and necessary means of achieving the statutory purpose

10

of section 93, and that this remedial provision should

once again be upheld.

Respectfully submitted,

Rosert J. Genatr*

General Counsel

Joun R. ZimMERMAN

Senior Assistant Counsel

Casino Control Commission

Princeton Pike Office Park

Building No. 5, CN-208

Trenton, New Jersey 08625

(609) 292-7584

Attorneys for Appellants.

* Counsel of Record