Amicus Curiae Brief — Ford v. United States

No. 92 - 1625

In The , Ee

Supreme Court of the aves 233 |

Qnited States

October Term, 1993

——¢@ -—

INTERNATIONAL UNION,

UNITED MINE WORKERS OF AMERICA and

UNITED MINE WORKERS OF AMERICA, DISTRICT 28,

Petitioners,

-against-

JOHN I. BAGWELL; CLINCHFIELD COAL CO.; and

SEA "B" MINING CO.,

Respondents.

On Wnt of Certiorari to

The Supreme Court of Virginia

BRIEF OF THE ALLIED EDUCATIONAL FOUNDATION

AS AMICUS CURIAE IN SUPPORT OF PETITIONERS

Bertram R. GELFAND

Jerrrey C. DANNENBERG

7 (Counsel of Record)

Spector, Scuer, FELDMAN

& STERNKLAR

Attorneys for Amicus Curiae

The Allied Educational Foundation

655 Third Avenue

New York, New York 10017

(212) 818-1400

St Louls & Westervelt, Inc. (3946)

NY (212) 684-3117 NJ (201) 863-8133

TABLE OF CONTENTS

TABLE OF CASES AND AUTHORITIES .

INTEREST OF THE AMICUS CURIAE ...

STATEMENT OF THE CASE ...........

SUMMARY OF ARGUMENT ..........

ARGUMENT ...

CEREUS bi de cvedevesbeueceuras

TABLE OF CASES AND AUTHORITIES

CASES Page(s)

Bagwell v. International Union,

244 Va. 463, 423 S.E.2d 349 (1992) .... passim

Bloom v. Illinois, 391 U.S. 194 (1968) 2.2.0.0... 8

Gompers v. Bucks Stove & Range Co., 221 U.S.

Pe cck eek bebe seeks edocces 6, 9,

10, 12

Hicks v. Feiock, 485 U.S. 624 (1988) ....... 8, 9, 10

In re Merchants’ Stock & Grain Co., 223 U.S.

Tee Cees Chute see eenecee 13

In re Nevitt, 117 F. 448 (8th Cir. 1902) ........ 12

International Union v. Clinchfield Coal Co.,

12 Va. App. 123, 402 S.E.2d 899 (1991),

rev'd, Bagwell v. International Union, 244

Va. 463, 423 S.E.2d 349 (1992) ......... 4, 5.6

McCann v. New York Stock Exchange, 80 F.2d

CE Chl ccceheséecececces 13

NLRB v. Jones & Laughline Steel Corp., 301

ae. ss ce be ee ces eee 15

Penfield Co. v. S.E.C., 330 U.S. 585 (1947)... ... 11

Se

STATUTES

AUTHORITIES

Page(s)

United States v. United Mine Workers, 330

in 6. vedscnaenh he Cds 60d 10

«<4. 5 oss ee eeeeGs ove 15

Dobbs, Contempt of Court; A Survey,

56 Corn. L. Rev. 183 (1971) .............. )

Moskovitz, Contempt of Injunctions,

Criminal and Civil, 43 Corum. L. Res

ee eee 8, 13

INTEREST OF THE AMICUS CURIAE

Allied Educational Foundation ("AEF") is a non-profit

public interest group devoted to supporting the development of

public policies that contribute to a free society in which the rights

of individuals guaranteed by the United States Constitution are

fully protected. Founded in 1964, AEF is dedicated to promoting

education in diverse areas of study, including law and public

policy, and has appeared as amicus curiae in the federal courts on

a number of occasions. Supporters of the AEF include

representatives of business, labor and the general public.

It is the belief of AEF that the ability of labor and

management to resolve disputes in an atmosphere of equality is

vital to the strength of the economy of the United States.

Unnecessary government interference upsets this balance and

creates a risk of economic strife that weakens the American

economy. The judicial process is a critical area for maintaining

a free society, and the public interest is best served by a legal

Structure that permits, to the fullest extent, the resolution of

disputes between employer and employees by collective

bargaining, with a minimum of government interference, in the

free pursuit of the negotiating process by both sides.

Where, as here, judicial interference becomes unwanted

by either side in a labor dispute, and is not necessary to redress

criminal behavior, such interference may actually inhibit

negotiation between the parties and, as a result, be an

impediment to ultimate resolution of the dispute. AEF is

concerned that a determination adverse to the position of the

petitioners in this matter will effectively sanction inappropriate

government interference in the collective bargaining process.

Iv

STATEMENT OF THE CASE

Petitioners represent employees in the coal industry,

including the businesses conducted by Clinchfield Coal Company

and Sea "B" Mining Company (collectively, the "Companies") in

the southeastern region of Virginia. On or about April 4, 1989,

following the expiration of a collective bargaining agreement,

petitioners commenced a strike in protest against alleged unfair

labor practices by the Companies. On April i2, 1989, the

Companies filed a verified bill of complaint against petitioners,

seeking injunctive relief. This action was based upon an

allegation that members of petitioners had been engaged in

activities in violation of Virginia's "right to work" law. On April

13, 1989, following a civil evidentiary hearing, the Circuit Court

of Russell County, Virginia, established picketing guidelines and

enjoined petitioners and their members from engaging in certain

activities deemed injurious to the Companies’ operations.

In May 1989, on application by the C ompanies, alleging

that petitioners’ members had committed a variety of violations

of the injunction, the circuit court conducted a hearing at which

petitioners were directed to show cause why they should not be

held in contempt. After the hearing, the Court found seventy-two

separate violations of its injunction and imposed $642,000 in

contempt fines ($424,000 of which were suspended, conditioned

upon payment of the balance within a certain period of time),

3

payable to the Commonwealth of Virginia.' In addition, the

court held that, in the event of any future violations of the

court’s injunction, fines would be levied at a rate of $100,000 for

each "violent" violation and $20,000 for each "nonviolent"

violation.

In June 1989, a second motion was made by the

Companies to have petitioners held in contempt for alleged new

violations of the injunction. Following a hearing, the circuit court

held petitioners in contempt, and fines were imposed in the total

amount of $2,465,000, payable to the Commonwealth of Virginia.

In addition, the court denominated the fines as "civil and

coercive” in nature. In the same order, the court established a

new fine schedule "for the purpose of coercing the defendants to

comply with the court's injunctions."

During the period from July through December, 1989,

each time on motion made by the Companies, the circuit court

issued its third, fourth, fifth, sixth, seventh and eighth contempt

orders. Following a hearing on the third contempt motion, the

court asserted, inter alia, as follows:

[The court] find[s] that . . . [petitioners] and

[their] members have engaged in acts of violence

that are directly related to their picketing in this

' Although the circuit court originally denominated the contempt

orders in which these fines were levied as “civil” in nature, the court

later determined that all such orders had been punitive and, therefore,

“criminal” in nature. As a result, the court vacated the orders on the

ground that appellants had not been provided with appropriate

constitutional safeguards.

4

labor dispute and that they have been

characterized by mass picketing and blocking of

rights of way, both public and private .. . and

_.. have intimidated or attempted to intimidate

by threats and by violence members of this

community who are attempting to exercise their

right to go to work and make a living under

Virginia law.

This court’s injunction is designed to keep the

peace here in Virginia and to be sure that

the citizens of this state, in these communities,

can live in peace, free from the acts of terror

which have been committed upon this

community.”

Nevertheless, the court informed petitioners that they were not

entitled to the full constitutional protection afforded to an alleged

contemnor in a criminal contempt proceeding, inasmuch as "these

were civil proceedings.”

In total, the circuit court levied in excess of $64,000,000 in

fines against petitioners, substantially all of which were directed

to be paid either to the Commonwealth of Virginia or to the

2 Bagwell v. International Union, 244 Va. 463, 469, 423 $.E.2d 349,

353 (1992) (quoting from a holding by the lower court).

3 International Union v. Clinchfield Coal Co., 12 Va. App. 123, __.,

402 S.E.2d 899, 901 (1991) (quoting from a holding by the lower court),

rev'd, Bagwell v. International Union, 244 Va. 463, 423 S.E.2d 349

(1992).

5

Counties of Russell and Dickenson in Virginia. In all instances,

petitioners timely objected to the fines on the ground that they

were criminal, noi civil, in nature and had been levied without

petitioners’ having been afforded a hearing conducted under

proper constitutional safeguards.

On January 1, 1990, during the pendency of petitioners’

consolidated appeals of the first five contempt orders to the

Virginia Court of Appeals, the Companies and petitioners (with

the assistance of a "super mediator" appointed by the United

States Secretary of Labor) reached a full settlement of their labor

dispute, specifically agreeing, inter alia, that the parties would

dismiss all pending litigation and have vacated all outstanding

civil judgments, including -ontempt fines. On January 24, 1990,

a joint motion to vacate all uncollected contempt fines was, in

fact, made. However, although the circuit court agreed to vacate

those contempt fines payable to the Companies, the court refused

to vacate the approximately $52,000,000 in unpaid fines payable

to the Commonwealth of Virginia and the Counties of Russell

and Dickenson.’

The Companies played no part in, and took no position

regarding, petitioners’ appeal of the first five contempt orders,

which was argued in October 1990. Although respondent was not

permitted to intervene as a party on that appeal, he was granted

leave to submit an amicus curiae brief. In International Union v.

7 . As a result of the circuit court's dismissal of the underlying civil

litigation, there was no longer a procedural mechanism in place for

collection of these fines. Accordingly, the court appointed respondent

John L. Bagwell, as “special commissioner’ charged with defending and

collecting those fines.

6

Clinchfield Coal Co., supra, the Court of Appeals of Virginia

rejected petitioners’ contention that the contempt orders had

been “criminal,” not “civil,” in nature. Nevertheless, the court

reversed the lower court's decision and vacated the contempt

fines, agreeing with petitioners’ argument that settlement of the

underlying litigation also settled every proceeding that was part

of thaf litigation. See id. at _, 402 S.E.2d at 905 (quoting

Gompers v. Bucks Stove & Range Co., 221 U.S. 418, 451 (1911)

("[wJhen the main case is settled, every proceeding which was

dependent on it, or a part of it, was also necessarily settled, of

course, without prejudice to the power and right of the court to

punish for contempt by proper proceedings")).

Thereafter, respondent's motion for leave to appeal the

Court of Appeals’ decision with respect to the first five contempt

orders to the Supreme Court of Virginia was granted. The

Supreme Court also certified and consolidated with that appeal

petitioners’ appeal from the sixth, seventh and eighth contempt

orders. In Bagwell v. International Union, supra, the Court

reversed the decision of the Court of Appeals, holding that (i)

respondent should have been granted leave to intervene as a

party, and (ii) the contempt fines should not have been vacated

because they had not been rendered moot by the settlement of

the underlying litigation. As a result, the Court upheld the fines,

which it found to be "civil," rather than "criminal," in nature.

SUMMARY OF ARGUMENT

Although the $52 million in fines that had been levied

against petitioners were payable to the Commonwealth of

Virginia and the Counties of Russell and Dickenson, the lower

court denominated those as "civil" and "coercive" in nature

>

because they were assessed only after petitioners had been found

(following civil evidentiary hearings) to have violated the terms

of injunction orders that contained schedules of prospective fines

that would be set in the event of any future violations.

Concededly, there was a "coercive" aspect to the orders

establishing these schedules. However, the later orders, which

actually made the contempt findings and imposed the fines, were

not coercive; they were punitive in that they were designed to

punish petitioners for violations of the injunctions that were

found to have been committed by petitioners’ members. As a

further demonstration of the essentially punitive nature of these

fines, the Supreme Court of Virginia held that, notwithstanding

the joint motion by both sides in the labor dispute to vacate all

civil contempt fines, the $52 million of unpaid fines were properly

continued against petitioners to maintain "the dignity of the law

and public respect for the judiciary." Bagwell, supra at 478, 423

S.E.2d at 358.

Although multiple issues have been raised by petitioners

on this appeal, amicus addresses only whether the Supreme Court

of Virginia improperly upheld what, in reality, were criminal

contempt fines in violation of petitioners’ constitutional

protections. It is respectfully submitted that a sovereign may not

take an application by a private litigant for civil relief and convert

it into a de facto criminal proceeding by the state, without

affording the alleged contemnors the constitutionally required

due process that attaches to such a proceeding.

8 y)

affect the right of appeal or the route that an

ARGUMENT

appeal takes. At least in some criminal contempt

cases, the state should be a party to any appeal

Contempt of court is the Proteus proceedings. The criminal classification will also

of the legal world, — an almost | invoke the pardoning power of the state... .

infinite diversity of forms.

ae Dobbs, Contempt of Court; A Survey, 56 Corn. L. Rev. 183, 242-43

This Court has never suggested that the distinction | (1971).

between civil contempt and criminal contempt is easily performed

in all cases. However, the Court has repeatedly acknowledged | In Gompers v. Bucks Stove & Range Co. 21 US. 418

that the distinction is a vitally important one because it | (1911), this Court provided the following oft-quoted justification

determines what procedure governs adjudication of the contempt. | for distinguishing between civil and criminal ieee

See, e.g., Hicks v. Feiock, 485 U.S. 624, 631-32 (1988); Bloom v. .

Illinois, 391 U.S. 194, 201-02 (1968). Selection of the appropriate

The distinction between refusing to do an act

procedure is necessary because of the additional safeguards that commanded, remedied by imprisonment until

yaa andated in the context of a criminal the party performs the required act; and doing

are constitutionally mandat an act forbidden, punished by imprisonment for

contempt hearing: a definite term; is sound in principle, and

The burden of proof is on the prosecution, the generally, if not universally, affords a test by

h d cannot be required to testify pe to o egpeanse Pca [civil or criminal]

arty charged ca : rea . Pats

wet himself, cannot be put in double Character of the punishment

jeopardy, and cannot be tried without

riate notice of the charge. Inferentially at Id. at 443. This justification was reaffirmed in the context of

« r 4 , . . i. ¥ : : >

rand is entitled to counsel and compulsory fines, rather than imprisonment, in Hicks, supra, where this Court

process for bringing in his witnesses. He is now articulated the following standard:

entitled to a jury trial if the criminal sentence is

a potentially serious one. As with other crimes,

intent is an element of criminal contempt, and it

must be proven before criminal punishment can

be inflicted .... The classification of a

contempt hearing as a criminal one may also

5 Moskovitz, Contempt of Injunctions, Criminal and Civil, 43

Coico. L. Rev. 780, 780 (1943).

If the relief provided is a fine, it is remedial

when it is paid to the court, though a fine that

would be payable to the court is also remedial

when the defendant can avoid paying the fine

simply by performing the affirmative act

required by the court's order. These distinctions

lead up to the fundamental proposition that

criminal penalties may not be imposed on some

one who has not been afforded the protections

10

that the Constitution requires of such criminal

proceedings, including the requirement that the

offense be proved beyond a reasonable doubt.

488 U.S. at 632.

Nevertheless, this Court also recognized that "the ‘civil’

and ‘criminal’ labels of the law have become increasingly

blurred.” /d. at 631. "In contempt cases, both civil and criminal

relief have aspects that can be seen as either remedial or punitive

or both: when a court imposes fines and punishments on a

contemnor, it is not only vindicating its legal authority to enter

the initial court order, but it also is seeking to give effect to the

laws purpose of modifying the contemnor’s behavior to conform

to the terms required in the order." /d. at 635. However, where

vindication of its own authority becomes the primary goal of the

court, the sanctions are, by definition, more punitive in nature

and, therefore, more in the nature of criminal contempt.

The definitive statement of what sanctions are available

for civil contempt comes from this Court’s decision in United

States v. United Mine Workers, 330 U.S. 258 (1947). "Judicial

sanctions in civil contempt proceedings may, in a proper case, be

employed for either or both of two purposes: to coerce the

deféndant into compliance with the court’s order, and to

compensate the complainant for losses sanctioned.” /d. at 303-04.

At bar, the trial court, the Court of Appeals of Virginia,

and the Supreme Court of Virginia each went out its way to

characterize the fines at issue as "coercive," thereby providing

justification for the civil nature of the hearings that resulted in

findings that petitioners had violated certain injunctions. Amicus

ae la ca rl

does not question that the trial court's original establishment of

a prospective fine schedule was designed to be coercive in nature.

However, the orders made after civil contempt hearings were

conducted, in which petitioners were found to have violated the

injunctions and in which fines were levied, were not coercive:

they were punitive and related only to past behavior. It is on this

point that the reasoning of the lower courts breaks down. For

example, the Supreme Court of Virginia held:

When a court orders a defendant to perform an

affirmative act and provides that the defendant

shall be fined a fixed amount for cach day he

refuses to comply, the defendant has control

over his own destiny. The same is true of the

court orders in the present case.

Bagwell, supra at 477, 423 S.E.2d at 357. But, petitioners were

not ordered to perform an affirmative act. The injunction order

that petitioners were found to have violated was prohibitory, not

mandatory, in nature.

Certainly, a mandatory injunction requiring the

performance of some affirmative act may contain a prospective

fine in the event of nonperformance. That prospective fine is

civil in nature because it is designed to coerce performance of the

affirmative act, thereby recalling the admonition by this Court

that "[o}ne who is fined, unless by a day certain he [does the act

ordered], has it in his power to avoid a penalty. And those who

are imprisoned until they vbey the order, ‘carry the keys to their

prison in their own pockets.” Penfield Co. v. S.E.C., 330 US.

$85, 590 (1947) (quoting /n re Nevitt, 117 F. 448, 461 (8th Cir.

1902)).°

All prohibitory injunctions contain the implied threat of

contempt in the event that an act is committed in violation of the

order. (Indeed, without such an implied threat, the injunction

would be of little value.) Sanctions imposed as a result of a

finding of such contempt may be "compensatory" or they may be

"punitive," but they cannot logically be characterized as coercive.

The fact that the prohibitory injunctions at issue in this case

made the threat of contempt express, by setting forth a

prospective schedule of fines that would be levied in the event of

a violation, does not change the underlying nature of the

contempt. As such, the sanctions imposed (which were

concededly not compensatory) should not have been converted

from their essentially criminal nature.

Of course, courts may seek both to punish a contemnor for

past violations of a court order and to coerce the contemnor into

avoiding any future violations. (This may be especially true in

the context of labor disputes, where the large numbers of

individuals involved and the public nature of the defiance of an

order may transfer the conduct in question from the realm of a

private civil contempt into a perceived public disrespect for the

authority of the court.) Nevertheless, it is fundamental that civil

contempt relates to the rights of plaintiffs, and criminal contempt

6 Cf. Gompers, supra a 442 (“il the defendant does that which he

has been commande¢ not to do, the disobedience is a thing

accomplished. Imprisonment cannot undo or remedy what has been

done or afford any compensation for the pecuniary injury caused by the

disobedience’).

ee a ee

» en ee a

13

relates to the judge’s notion that defendant's behavior in failing

to comply with a court order was so offensive and flagrant as to

border on the criminal. Thus, where (as here) "a fine is ordered

paid to the state, the judgment is punitive and the proceeding is

considered one for criminal contempt." Moskovitz, supra at 790

(citing /n re Merchants’ Stock & Grain Co., 223 U.S. 639 (1912);

McCann v. New York Stock Exchange, 80 F.2d 211 (2d Cir. 1935)).

__ Amicus does not suggest here that the conduct of which

petitioners’ members were accused of having committed was

justified or excusable. Whether petitioners or their members

violated the trial court’s injunction is not at issue. However, if

the trial court truly believed that contempt fines were necessary

and appropriate to maintain "the dignity of the law and public

respect for the judiciary,” Bagwell, supra at 478, 423 S.E.2d at

358, the correct vehicle should have been a criminal contempt

herring, at which petitioners would have been afforded the

myriad of constitutional safeguards that are unique to such

proceedings.

| Furthermore, by characterizing the proceedings as "civil"

in nature, designed to “coerce” certain conduct on the part of

petitioners, the lower courts plainly intended to keep this dispute

in the civil arena. It was, therefore, disingenuous for the

Supreme Court of Virginia to vacate the Court of Appeals’ order

granting the joint motion of the litigants to vacate the contempt

7 : , . :

Certainly, this notion was behind the apparent acceptance by the

Supreme Court of Virginia of the trial court's characterization of the

conduct of petitioners’ members as “acts of terror which have been

——— upon this community.” Bagwell, supra at 469, 423 S.E.2d at

i4

fines. Either these fines should have been characterized as

"criminal" in nature, in which case they should be vacated because

they were levied under procedural safeguards that fell below

those “enstitutionally mandated, or, if they truly were “civil” in

nature ¢! ey should be vacated because they were settled by the

underlying settlement of the litigation. The lower courts cannot

have it both ways. By characterizing the punitive and public

sanctions that were levied against petitioners as "coercive"--

thereby avoiding the prerequisites of criminal contempt

proceedings--but then refusing to allow petitioners and the

Companies to resolve those sanctions privately (in the context of

their civil settlement), the lower courts acted inconsistently with

a fundamental tenet of American labor law that the government

should foster employee organization and promote equity in

bargaining between employers and employees.’

* For example, the findings and policies set forth in the National

Labor Relations Act provide, in pertinent part:

The inequality of bargaining power between employees who

do not possess full freedom of association or actual liberty of

contract, and employers who are organized in the corporate or

other forms of ownership association substantially burdens and

affects the flow of commerce, and tends to aggravate recurrent

business depressions by depressing wage rates and the

purchasing power of wage earners in industry and by preventing

the stabilization of competitive wage rates and working

conditions within and between industries.

Experience has proved that protection by law of the right of

employees to organize and bargain collectively safeguards

commerce from injury, impairment, or interruption, and

promotes the flow of commerce by removing certain recognized

sources of industrial strife and unrest, by encouraging practices

15

Even given the apparent consideration by the Supreme

Court of Virginia of petitioners’ purportedly “vast financial

resources,” id. at 480, 423 S.E.2d at 359, the extremely large size

of the fines imposed--an aggregate of $52 million--obviously had

to have an impact on petitioners’ posture in the settlement

negotiations. Indeed, there is much in the facts that suggests that

a desire to avoid the massive civil fines obtained by the employer

may have contributed to the ultimate settlement of the labor

dispute. Had petitioners not believed that their settlement

agreement with the Companies would be realized in every

respect, including the vacatur of all outstanding contempt fines,

petitioners may, understandably, have reconsidered the

settlement, thereby prolonging the strike.”

fundamental to the friendly adjustment of industrial disputes

arising out of differences as to wages, hours, or other working

conditions, and by restoring equality of bargaining power

between employers and employees.

29 U.S.C. § 151 (1973); see also NLRB v. Jones & Laughline Steel Corp.,

301 U.S. 1, 45 (1937) ([t}he theory of the Act is that free opportunity

for negotiation with accredited representatives of employees is likely to

promote industrial peace and may bring about the adjustments and

agreements which the Act in itself does not attempt to compel’).

® Moreover, even if enforcement of the fines reinstated by the

Supreme Court of Virginia will not undo the settlement agreement

reached between petitioners and the Companies, it will surely exacerbate

the tensions between the two sides during the collective bargaining

process that begins once that agreement expires. Therefore, the holding

by the Supreme Court of Virginia that settlement of a labor dispute may

not resolve all outstanding civil contempt sanctions will, necessarily,

have a chilling effect on future settlement negotiations between labor

and management.

16

Therefore, what the Supreme Court of Virginia has done

is constitutionally offensive and represents a distinctly "big

brother” approach to the collective bargaining process. After all,

it was the Companies that had originally moved in the trial court

to have petitioners held in contempt; therefore, the Companies

should be permitted to control the destiny of the resulting

contempt proceedings (even after sanctions were imposed). It is

no more than an indulgence in judicial activism for the trial court

to have essentially become a third party in a civil litigation that

private parties wished to abandon and to have converted that

litigation into an action by the sovereign against private citizens.

Under the guise of pursuing a civil contempt, the Supreme Court

of Virginia permitted the imposition of massive punishment by

the sovereign, which should have been restricted to the realm of

a criminal contempt proceeding, with the corresponding due

process safeguards that are constitutionally mandated.

17

CONCLUSION

For the foregoing reasons, the Order of the Court below

should be reversed, and all outstanding contempt fines against

petitioners should be vacated.

Respectfully submitted,

BERTRAM R. GELFAND

JEFFREY C. DANNENBERG

(Counsel cf Record)

SPECTOR, SCHER,

FELDMAN & STERNKLAR

655 Third Avenue

New York, New York 10017

(212) 818-1400

Attorneys for

Allied Educational Foundation

Amicus Curiae