Petition for Writ of Certiorari — Nelson v. Moore-McCormack Lines, Inc.

LIBRARY x

- RENE COURT, U B

IN THE

FILED

Supreme Court of the United

. October ‘Tom, 1961

x B37

_ Joun L. Lewis, Henry G. Scumupt and JosepHine Roce,

as Trustees of the United Mine Workers of America )

- Weliare and Retirement Fund, Petitioners,

; v.

Epwarp Mzars, Individually and Trading as

Mears Coal Company.

PETITION FOR WRIT OF CERTIORARI TO THE UNITED

STATES COURT OF APPEALS FOR THE THIRD CIRCUIT :

; Vat J. Mitcu, |

. Harowp H. Bacon, -

‘CHARLES L. WIDMAN,,

. 907 Fifteénth Street, N: W.,;

Washington, D.C. |

A. E. Kountz,

ALEXANDER UNKOVIC,

WiLL1aM G. BoyYLe,

Kountz, Fry & MEvYER,

1424 Frick Building,

Pittsburgh 19, Pennsylvania.

M. E. Borarsky,

511 Kanawha Valley Building,

Charleston, West Virginia.

Attorneys for Petitioners.

JARRETT PRINTING COMPANY, CHARLESTON, ©. VA. Ep

>

INDEX |

. Me Subject Index

Perini ON FOR WRIT OF CERTIORARI .

9

OPINIONS BELOW

_ JURISDICTION oes lies 4

BASIS FOR FEDERAL JURISDICT ION : IN THE

. UNITED STATES DISTRICT COURT

a”

QUESTION PRESENTED

- STATUTES INVOLVED _

STATEMENT OF THE CASE

A. The District Court ‘Proceedings. Opinion and

Judgment

B. The Third ‘Circuit's Opinion and Judgment

Page

C. Trustees’ Petition for for Rehearing | Was Denied By an

Equally Divided d Third Circuit; Four cage * Dis-

_ sented and Filed a Dissenting Opinion

NEASONS FOR GRANTING THE WRIT

CONCLUSION

~

- 8

= *

ii

@: TABLE OF CASES’

: 3 ean : | Page ©

Alcoa S. S. Co., Inc. v. U'S., 438 U.S. 421, 423. ~ _14

-Burke v. Dulaney, 153 U.S. 228 (1894) -

Cox-v. Gatliff Coal Co., DC, E.D., Ky., 1945, 59 F. Supp.

882, 886° Oe a

Drake ‘Bakeries, ‘Inc. v. Local 50, America Bakery etc., 2

Cir., 294 F. 2d 299, cert. granted 7 L. ed 2d 437 —

Eliason v. Wilborn, 281 U.S. 457 23

Farmers Nat. Bank & Trust Co. v. Flexible Truck Corp., 3

Cir., 81 F. 2d 541 rae 23

Gambrell v. Lewis, 167 A. 2d 605 (Mun. Ct. of App. DC,

1961)

Gatliff Coal Co. v. Cox, 6 Cir, 152 F: 24 52,56 ‘1, 12, 16, 18,19

H: J. Heinz Co. v. NLRB, 311 U. S. 514, 523-4, 525 12, 16, 17

International Brotherhood of Teamsters, Local 695, A. F.L.

_.* v. Vogt, Inc., 354 U. S. 284, 287 14

- Lewis v. Benedict Coal Corp., 361 U. S. 459, 465, 466, 468, '

469,470 .. 9, 10, 12, 17, 20, 21, 22

Lewis v. Lowry, 4 Cir, 295 F. 2d 197, cert. den. 7 L. ed

' 2d 438 9, 10, 11-12, 13

Lewis v. Mearns, DC, N.D., W. Na.,. eS, 168 F. Supp.

—- 134, 138 _....... - 11,19

Lewis v. Mears, DC, WD., Pa, 189 F. Supp. 503 pee iy

Lewis v. Mears, 3-Cir., 297-F. 2d 101 - A 2

Lewis v. Toth, DC, W.D., Pa., 1959 (unreported) - 11,18

Lewis v. Toth, 3 Cir., 280 F. 2d 422 : “11,18

Local 174, Teamsters V. Lucas F lour Ce., 7TL.e ed‘2d 593,

598 (1962) - ; “ts 17. 21

Local 761, Int. ‘Union, ete. Work ers Vv. NLEB, 366 U: S. 659.

671 . 14

Mearns v. Lewis, 4 Cir., 268 F. 2d 427, 428 eee

NLRBv. ‘Industriel Cotton Mills. 4 Cir., 208 F. 2d 87. 91 ' 23

Similow v. Dickerson, 357 Pa. 455, 54.A. 2d 883 (1947) * 21.

Textile Workers Unio’ v. Li: 2 n Mills, 253 U.S. 418 17

U.S. v. Carter, 353 U.S. 210, 320° vo

United States v. Standerd Oil'Co., 332 U.S. 301, 202 (f7.2) 14

United Steelworkers of America Vv. Warrior & Gulf Naw.

Co., 263 U. S574, 573 . : oe:

2 **

SAM

a7 °

STATUTES

ae i Page

28 USCA | Fi

Section 1254(1) — | oe

Section 2101 (c) 3.

Labor Management Relations Act, 1947 (Taft-Hartley Act):

Section 8(d)

129 USCA, 158(d) } 34,9, 10, 11, 12, 15. 16, 17, 19

‘Section 302(e).(5)(B) Ce

“(29 USCA 186(c) (5) (B)| 3, 4.9, 10, 12, 15, 16. 19

INDEX TO APPENDIX IN BRIEF

| | Xe, Page

APPENDIX A ° | ¢

Opinion, October 11, 1961, United States Court of Appeals -

for the Third Circuit, Lewis etal wz Edward Mears, etc. la

- Judgment, October’ 11,1961, United States Court of Ap-

-* peals for the Third Circuit. Lew et al v. Edward

Mears, etc. . ! _ 6a

APPENDIX B ‘

Opinion Sur Petition for Rehearing. January’ 4. 1962,

‘United States Court of Appeals for the Third Circuit, —

Lewis et al v. Edward Mears; etc.” * Cee

Dissenting Opinic: of Chief Judge Biggs, January 4.

1962. Lewis et al v. Edward Mears,.ete. ~*~ hf

Order Sur Petition for Rehearing, January 4, 1962, 7/3

United States Court of Appeals for the Third Circutt er

Lewis et al v. Edward Mears. etc. a SS Ba

| bf

APPENDIX C a etees

Labor Management Relations Act, 1947:

~ Sectien 8(d) {29 USCA 158(d) | ; 8a

Section 302 29 USCA 186} y | 8a

APPENDIX D a Fd

Opinion, September 16, 1961, United States Court of Ap-

peals for the Fourth Circuit; Lewis et al v. F. Arnold -

Lowry, etc. J 10a

/

J

L

VA

Pa

—

iv

Dissenting Opirdon of Chief nits Sobeloff, —

16, 1961; eee a eee _ l4a

APPENDIX E

_ Transcript of Oral Opinion, October 30, 1959, United .

States District Court for the Western District of Penn-

sylvania, Lewis et al.v. Edward’J. Toth, etc. . 2la

Opinion, July 2, 1960, United States Court of Appeals for

‘the Third Circuit, Lewis et al v. Edward J. Toth, etc. 25a

APPENDIX F _ ° “*

List of pending cases in federal district courts, instituted

by Trustees of UMWA Welfare and Retirement Fund

. against various defendant coal companies. 26a

‘APPENDIX G

Petition for Rehearing filed by Trustees of UMWA Wel-

fare and Retirement Fund’in the United States Court

of Appeals for the re Circuit, Lewis et al v. Edward

Mears, ete. ; | 32a

° 7

a)

ay

wm

Supreme Court sf the Hnited States

October Term. 1961 ie

ae rite ae

Joun L. Lewis, Henry G. Scumint and JOSEPHINE ROCHE,

as Trustees of the United Mine Workers of America,

_ Welfare and Retirément Fund, Petitioners;

- Vz

-Epwarp MEARS, Individually and Trading as

Mears Coal Company. .

eS WRIT OF CERTIORARI TO THE UNITED:

STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

-» |

_To, the Honorable, the Chief Justice and the Associate

Justices of the Supreme Court of the United States: ~

Petitioners, John L. Lewis, Henry G. Schmidt and

_ Josephine Roche, as Trustees of the United Mine Workers

of America Welfare and Retirement Fund of 1950, pray

that a writ of certiorari issue to review the judgment of

the United States Court of Appeals for the Third Circuit’

entered October 11, 1961 (A. 6a), in Case No. 13,502,

styled John L. Lewis, Henry G. Schmidt and Jésephine

Roche, as Trustees of the United Mine Workers of Amer-

“Herein called “Fund”. “Petitioners” are also called “Trustees”

herein. * . .

? The United States Court of Appeals for the Third caseul 1 1 herein

called either the “Third Cirtuit” or “Court of Appeals” .

¢ ? . }

o | 2 es

‘ica, Welfare and Retirement Fund’ of 1950, Appellants, v.

Edward Mears, Individually and Trading as Mears Coal

Company, Appellee,’ wherein the Third Circuit affirmed ~

_ the judgment entered by the United States District Court |

for the Western District of Pennsylvania,” “irr favor of the

defendant... and against plaintiffs” (J.A. 13a), as well

as the. order (A. 8a) entered January 4, 1962, by the

Third Circuit based upon its Opinion Sur Petition For

Rehearing wherein that court en bane (8 Circuit Judges

participating ) being equally divided, noted “There is not

a majority of the Court in favor of granting the petition.

for rehearing”, and “Accordingly the petition will be

denied”, from which Chief J udge Biggs and Circuit

Judges Staley, Ganey and Smith dissented (A. 7a).

A certified Appendix ‘revord in said case, together with

‘the proceedings in the Third Circuit, is furnished here-

with, in accordance with the Rules of this Court. .

OPIN IONS BELC WwW

'- The District Court's opinion appears in fe certified

Appendix record (J.A. 17a-30a) and is reported in 189 F.

Supp. 503. The Third Circuit's opinion appears in Ap-

pendix A hereto at page la, et seq. The Third Circuit's

Opinion Sur Petition for Rehearing and the dissenting .

opinion. of ‘Chief Judge Biggs, joined in by Circuit J udges

- Staley, Ganey and Smith, appears in Appendix B hereto

at page 7a, et seq. Beth appear in the certified Appendix

record and are reported in 297 F. 2d 101.

-@ Herein omen * *Mears”’.

‘Herein the United States District Court for the Western District of -

Pennsylvania is called “‘district court” or “trial court”. _

5 The abbreviation “A.” refers to the Appendix. to the instant petition;

* while the abbreviation “J_A.” refers to the Joint Appendix filed in the

Third Circuit. s)

3

JURISDICTION |

4

The Third.Circuit’s judgment affirming the trial court's

. judgment was entered October 11, 1961 (A. 6a). Its

order denying the Petition For Rehearing was entered

January 4, 1962 (A. 8a). are

“This Court's jurisdiction is iffvoked under 26 USCA.

Sections 1254(1) and 2101(c).

BASIS FOR FEDERAL JURISDICTION IN THE UNITED

STATES DISTRICT COURT =~

The basis for federal jurisdiction in the United States

District Court of the complaint. was diversity of citizen-

ship between the plaintiffs and the defendant and the

amount involved.

< QUESTION PR ESENTED ‘

In an action by Trustees of an irrevocable trust con-

tained in an industry-wide collective bargaining contract _

between bituminous coal operators. and United Mine ©

Workers of America, in writing in conformity with Sec-

tion 8(d) of the Labor Management Relations Act, 1947.

and which trust was creatéd pursuant to that Act's Sec-

tion 302(c) for the benefit of all employees of all employer

signatories to the agreement, brought to recover unpaid.

moneys due the trust under said trust provisions against

a single operator signatory. (a) does national labor policy

‘as set forth in said statutes preclude proof by a ‘signatory

that there was an oral secret agreement between him-

self and a union representative, unknown to Trustees,

that such written collective bargaining agreement would

not be a contract until he received an executed copy

thereof: and (b) does such national labor policy foreclose

such a defense as against the Trustees so as to require the

" signatory to pay in accordance with his written agree-

J

ment, even though such oral. secret agreement may be

shown? \\ , a rh

\. STATUTES INVOLVED —

. . The pertinent statutory provisions ‘involved are Sec-

tioris 8( d) and 302(c)(5) of the Labor Management Re- - ©

lations Act, 1947 (called “Act”) [29 USCA 158(d) and

186(c)(5)] which are set forth in Appendix C hereto

(page 8a, et seq.). -

STATEMENT OF THE CASE

A: The District Court Proceedings, Opinion and Judgment

pursuant to the Act’s Section 302(c), the National

Bituminous Coal Wage’Agreement of 1950 created the

“United Mine Workers of America Welfare & Retirement

Fund of 1950” as an irrevocable trust for employees. of —

signatory coal operators, their families and dependents

(J.A. 123a). By its, terms, “each opefator signatory”

agreed to pay into the Fund 30¢ “on each ton of coal pro-

oe

duced for use or for sale” (J.A. 122a), which was in-

creased to 40¢ by an amendment effective October 1, 1952

(J.A. 133a).° .

Mears, operating a mine in Pennsylvania, admittedly

executed the 1952 Agreement (LA. 36a). Thereunder,

from October 1, 1952 through December 31, 1955, Mears

produced 9,074.83 tons of coal for use or for sale (J.A.

36a), obligating Mears to pay the Fund $3,629.93 (J-A.

37a). Instead. Mears paid only $234:00 (J .A. 37a). Such

payments began July 9, 1952, and continued monthly

thereafter through April, 1953 (J.A. 151a), when Mears

wrote on the Check Letter of Advice, “Last Order and

¢The National Bituminous Coal Wage Agreement of 1950 is called

_ “1950 Agreement” (J.A. 121a); as amended effective February 1, 1951,

it is called the “1951 Agreement” (J.A. 130a); and as amended effective

Octobet}, 1952, it is called the “1952 Agreement” (J.A. 132a).

a

on

| 8

‘Shut Down by Inspector” (J.A. 63a;+152a): Mears ac-

tually resumed mining yperations several months later

.(J.A. 51a-53a), but never notified the Fund thereof, nor

did he resume remittances to the Fund. |

. 'Prustees instituted in the District Court the instant

action to recover a’ money judgment for $3,395.93 (A. .

10a, 37a) against defendant arising upon his said obliga-

‘tion. Denying liability, Mears claimed the Agreement

“was to have been executed by” United Mine Workers

of America anda copy as executed forwarded to him

_—-which, as Mears claimed, he did not receive (J.A. 50a), . .

although, in his Answer, Mears had not claimed these

were conditions precedent to an existing agreement (J.A.

_ Ta-8a). > “agate” Hen

Ina trial by jury, Mears testified, over Trustees’ objec-

‘tions (J.A. 42a-43a, 50a), he was told by UMW’repre-

sentative Anderson, who did no work for the Fund (J.A..

39a) and has “nothing to do at all with” it (J.A. 105a),

that “the contract wouldn't be a contract until he had

gotten a copy of it back signed and completely executed”

(J.A. 50a). Anderson related that when Mears executed ~

_ these several agreements he had Mears sign three copies

of each thereof, which was customary: practice, as was

‘sending the agreements to the District and National of-

. fices for. Union representatives’ signatures (J.A. 102a-

103a), but Anderson categorically denied Mears’ state-

ment that he told’Mears he would not be bound by the

contract until Mears got.a copy, declaring, “I couldn’t tell

him'that” (J.A. 102a). While Anderson's further t@ti-

~ mony is that three copies are required so that UMW, the

District and the signatory operator would each get a copy

(J.A. 42a) and that he might have told Mears “He'd get

one” (J.A. 42a.104a-105a) since that was Anderson's

” Herein called “UMW”.

«6

°

‘practice (J A. 42a); actually when Mears executed the

contracts he and Mears did not discuss the point (J.A.

42a). Union signatories had not signed the agreements

when Mears executed them (J.A. 102a-103a). but, as —

Anderson related and as the record shows, they were sub-

-$equently signed (J.A..130a, 132a, 135a). Mears admits

he never asked for a copy of the agreement (J. A. 66a).

Not only’ did Mears admit executing the. Agreement

and transmitting monthly. payments to the Fund, Mears

admitted owing the Fund $66.00 and when the Fund

asked for payment thereof, Mears wrote “I was unable

to pay” (J.A. 85a); and though Fund’s counsel wrote

Mears concerning his- delinquency, there is no record

indicant that Mears disputed his obligation or made any

assertion that the indebtedness was not under his cove-

nant contained in the 1952 Agreement. Moreover, Mears

held a hospital card issued by the Fund, which he* used

on sixteen occasions subsequent to October 1, 1952, and

as a result thereof the Fund expended $943.14 for hospital

and medical expenses on behalf of Mears; and while

Mears. contended he held a hospital card because he |

joined UMW in 1950. the expenditures by the Fund on

Mears’ behalf were all subsequent to the time when

Mears admitted he executed the agreements (J.A. 66-9a).

Further, though the district court emphasized (J.A. 24a)

that Mears was a union member, it ignored the legal

‘aspects that “union membership is not the controlling

test or the criterion of eligibility to participate in the

Fund” and that benefits were available only where work.

. formed is at a mine operated by a signatory operator.

“1Gambrell v. Lewis, 167 A.2d 605, (Municipal Court of

Appeals, D.C. 1961)1. !

In its jury charge, the trial court submitted to the jury

an interrogatory as to whether Anderson agreed with

—_——

° - |

-Mears at the time of the agreement's execution the agree-

ment “would not become valid and enforceable” until

‘Mears received copies thereof executed by UMW, to

which interrogatory the jury gave an affirmative answer |

(SA. 12a, 120a),’ At the close of the evidence and in

Trustees’ requests for points for charge (J.A. 10a), Trus-

‘tees sought a directed verdict but the court resefved de- ©

cigion thereon (J.A: 108a). - Following the trial by

jury, the district curt denied Trustees’ directed verdict

motion upon which it had reserved decision and ordered

“judgment be entered, in accordance with the jury's

answers to’the {nterrogatories submitted to it by the

court, in favor of” Mears and against Trustees (J.A. 13a).

Thereafter, Trustees, by motion. moved that the ver-

dict and judgment be Set aside and Trustees be granted

a new trial (J.A. 15a), but the district court, in a writ-

ten opinion and order (J.A. 17a-30a), denied such motion.

As to the question presented’ (ante, p. 3). the district

court declared that, “the parol evidence has no appli-

cation’to the facts of this case” (J.A. 20a); that “the

federal courts in fashioning ‘a body of federal law in

the light of the national labor poliey’ have simply adopted |

and applied the common law parol evidence rule. and

that rule, as previously demonstrated has no application

tu the facts in this case” and-that “There was no attempt

to alter, vary, or contradict any term of the alleged con- —

tract in the instant suit; the defendant was simply per-

_ mitted to show that no contract existed, which as we have

“

.* A second interrogatory submitted to the sury was,

“Did the defendant Mears on April 5, 1953 enclose a note with

the check letter of advice which he sent to plaintiffs stating in said

note that he cancelled the contract with the Union?” (App. 12a,

115a), which the jury answered in the negative (J.A. 12a, 120a).

-? The court had already denied Trustees’ motion for directed verdict

at the conclusion of Mears’ testimony (J.A. 8la, 89a-90a).

a

8°

seen, was not in violation of the parol evidence rule”

(J.A. 22a-23a). The district court then concluded that

_ it “was not in error in permitting the defendant to prove

the agreed condition precedent to the formation of the

contract in suit” (J.A. 23a).

s

B. The Fhird Circuit’ s Opinion and Judgment.

Upon Trustees’ ‘appeal; the Third Circuit (per Cir-

cuit Judges Goodrich, McLaughlin and Kalodner ), by its

October 11, 1961 order (A. 6a), ‘affirmed the district

court’s judgment in defendant’s favor. Though the Third

Circuit’s opinion points to the undisputed fact that Mears

forwarded some monthly payments to the Fund and, by

Mears’ own statement, he could not have sold his coal

“unless-he paid the royalties” (A. 4a), it opined that the

“challenged-testimony was introduced to prove that the

alleged contract never existed” and it rejected Trustees’

contention that national labor policy precluded the ad-

mission of Mears’ testimony concerning his alleged oral

agreement with Anderson on the ground that “national

labor policy does not require the exclusion of parol evi-

dence which shows the lack of an effective acceptance

_of an offer” (A. 5a).

. C. Trustees’ Petition for Rehearing Was Denied By an

Equally Divided Third Circuit; Four Judges Dissented

and Filed a Dissenting Opinion.

Trustees filed a Petition for Rehearing (A. 32a) poliiting

out, inter alia, that the Third Circuit had: overlooked the

vital factor that the effect of the Court’s action places

the burden of alleged secret oral agreements between a .

union and the employer assérting such agreements upon

employees—the Fund’s ultimate beneficiaries—innocent

of wrongdoing and who produced the coal from which

stemmed the obligation to pay the royalty upon produc-

s 9

tion as this Court had proclaimed in Lewis v. Benedict

Coal Corp., 361 U. S. 459, 466. “i

_ In their rehearing petition, Trustees emphasized that

the court's application of its. rule. that “parol evidence

is admissible to prove that a contract did not exist” to

labor agreements, and particularly to those containing

welfare fund provisions, must be appraised in the light

of the Act’s Section "902(c) (5) (B) and Section. 8(d),”

about which the Third Circuit’s opinion was totally silent;

that the’ congressional requirement in the first of said

sections that the detailed basis of welfare fund benefits .

, be “specified in a written agreement with the employer”

évidenced ‘congressional contemplation that executed

collective bargaining agreements should contain the total

agreement between the parties and excluded and fore-

closed evidence of any alleged contrary secret oral agree-

ment. : a,

Trustees, in the petition, pointed to the dissenting

‘opinion of Chief Judge Sobeloff in “Lewis v. Lowry, 4

_ Cir., 295 F. 2d 197, cert. denied, 7 Led. 2d°438, challeng-

ing, because of national labor policy, the majority view

that.a secret agreement, about which Trustees had no - roid

knowledge, could constitute a defense to a suit by Trus-

tees to collect delinquent royalties. Trustees directed

the Third Circuit's attention-that the thesis of Chief —

Judge Sobeloff's dissent was that “the statute authorizing

agreements to establish industrial trust funds . . . shall

be in writing”; that “broadly as a matter of federal labor

law, the so-called ‘sham’ exception to the parol. evidence

_rule should, not be allowed in suits under collective bar-

gaining agreements” and “even if a private oral agree-

ment, said to be the ‘real contract’, could be relied upon —

'° 29 USCA. 186(c)(5)(B) and 158(d)

.

10

by” the employer “in @ suit by the union, it cannot be -

asserted as-against the Trustees” (A. 15a-16a ). .

- The Third Circuit, Per Curiam, by order on January

4, 1962, denied the rehearing petition, noting, “There is

not a majority of the Court in favor of granting” it, but

Chief Judge Biggs and Circuit Judges. Staley, Ganey os

and Smith dissented. The dissenting opinion of Chief

Judge Biggs (A. 7a-8a), in which the other dissenting

“jurists joinéd, expressed the view that both the Third

Circuit and the trial court erred in their holdings and

declared preference for the views found in Judge Sobel-

off’s dissent, noting the saliency of Taft-Hartley’s pro-

visions adverted' to above, and stating: in

“As Chief Judge Sobeloff points out in his dissent-

ing opinion in Lewis, Trustee, et al. v. Lowry,

995 F. 2d 197 (4 Cir. 1961), the. position taken |

* by the majority emasculates the policy intended

to be created by Congress in enacting Section _

302(c)(5)(B) and vitiates the spirit of Section |

8(d)-of the Labor Management Relations Act, 29

USCA. § 186(c)(5)(B) (Supp. 1960) and §

158(d). The federal courts in fashioning a body

of federal common law for the enforcement of col-

’ lective bargaining agreements, Lewis v. Benedict

Coal Corp., supra, p. 470, must shape that law

so that such agreements cannot be modified or

nullified by covert conditions or stipulations en-

tered into between the employer and the union. —

If it be otherwise industrial strife 1s sure to ensue

and the stabilizing effect on labor relations of the

Labor Management Relations Act will be de-_

stroyed.” (A. 7a-8a).

‘The Fourth Circuit's opinion and the dissent of Chief Judge Sobel-

off, in Lewis v. Lowry, decided tember 16, 1961, are printed herein

as Appendix D. pp. 10a-20a. ; } o

?

‘ll

REASONS FOR GRANTING THE WRIT

I. :

Prior to the instant case, and in conflict with the Third

Circuit’s holding herein, that Court, in Lewis v. Toth, 3

Cir. 280 F. 2d 422, had affirmed a district court pro-

nouncement that the Act’s Section 8(d) precluded par-

ties to collective bargaining agreements from relying

on prior or contem wraheous oral agreements, relying

upon Gatliff Coal Co. v. Cor. 6 Cir., 152 F. 2d 52. See

Lewis v. Toth, DC, W. D.. Pa., 1959 unreported ). ~ This *

inconsonaney. coupled with the equal division among the

Judges of the Third Circuit. as mirrored’ by the dissent

of Chief Judge Biggs ‘and Circuit Judges Staley. Ganey

and Smith. inthe denial of the rehearing petition herein. \

shows-the state of confusion and uncertainty of what the |

rule is in the Third Circuit on the: question presented. ‘

Only by this Court’s determination of the question pre-

sented may the 27 federal district cgurt jurists in. the

Third Circuit. covering the industrial states of New Jer-

sey. Pennsylvania and Delaware. know the appropriate

_ judicial guide of this matter. ,

Similar confusion and uncertainty are current in the

Fourth Circuit as a result of that Court's’ approval in

Mearns v. Lewis, 4 Cir.. 268 F. 2d 427. of a district eourt’s

holding (Lewis v. Mearns, DC. N.D- W Va.. 1958. 168

-F. Supp. 134). that “the written agreement here was the

final step in a collective bargaining process. under Sec-

ion 8(d) of the... Act” and that “It has been held

that parties to such contracts are precluded by the Taft-

Hartley Act from relying upon prior contemporaneous

‘oral agreements” ’ and the Fourth Circuit's: subsequent

deviation therefrom in Lewis v. Lowry. 4 Cir., 295 F. 2d

mar The district court’s opinion (unreported). and the Third Circuit's

affirmance are printed as Appendix E herein, pp. 2ia-25a.

All emphases herein are supplied. unless otherwise indicated,

12.

197, cert. denied, 7 L. ed. 2d 438, in which, as already

noted, Chief Judge Sobeloff filed a dissent. .

II.

The Third Circuit has decided a federal question, ini-

portant in the processing of collective bargaining agree-

ments and in the Act’s administration, as it concerns both

industry-wide bargaining agreements and irrevocable in-’ *

_ dustrial trusts for employees, in such a manner as to frus-

trate rather than promote industrial stabilization through

collective bargaining agreements. The Third Circuit's

opinion is in conflict-with the purposes, spirit and lan-

guage of Congress in enacting the Act’s Section 302(c ) ( 5)

-and Section 8(d), arid it is at variance with the national —

labor policy expressed therein and by this @purt in H. 2:

Heinz Co. v. NLRB, 311 U.S. 514, and in Lewis v. Bene-

‘dict Coal Corp, 361 U. S. 459, and by the Sixth Circuit

in Gatliff Coal Co. v. Cox, 6 Cir., 152 F. 2d 52, affirming

Coz v, Gatliff Coal Co., DC, E.D., Ky.. 1945, 59 F. Supp.

Il. *.-

Clearly, the qinaten presented is of importance in

the administration of the Act as it related both to the

processing of bargaining agreements ana _:dustrial trust

funds, since the irrevocable trust for which Trustees seek

to recover the royalties is one created pursuant to the

Act's Section 302(c).and is contained in an industry-wide .

coilective bargaining agreement.

_ The admonition of Chief Judge Sobeloff in his Sine

in Lowry that “this is not just a small case.involving a

" few miners” and “If the present employer is permitted

to circumvent his written collective bargaining agree-

ment, the effects will be industry wide” (A. 15a), is more ,

meaningful in the instant Mears case, wherein there. is a

13

final. judgment, “than it was in Lowry, wherein the case,

originally decided on summary judgment, was remanded

for further proceedings and trial. In addition to the 10

cases which Chief Judge Sobeloff listed as showing in-

stances where other operators signatory to the agreement

sought “to renege on their agreed-upon obligations” (A.

15a), there are currently pending in federal district

courts of West Virginia, of Kentucky and of Tennessee,

38 cases wherein employers, as contract signatories, have

asserted defenses against Trustees’ ( Petitioners) ‘claims

for delinquent royalties which employ, as a basis for such

' defenses, an alleged secret oral agreement or conditions

or stipulations, unknown to the Trustees, which changed

the written obligation of the signatory operator and, as

Judge Sobeloff points out in his dissent, allows “the trust

fund to be eroded” (A. 19a). These 38 cases, together

with those in the instant Mears case and the Lowry case,

aggregate in excess of One Million. Dollars ($1,000,-

000. 06). *

* The ountion cases are as follows: . }

Amount

Name of Company ¢ Claimed

George Ag Bryant & Sons Coal Co. . $ 19,946.01.

E. Dick Burrow Coal Co. - ° 23,560.00

Willis Flynn Coal Co. ; 21,350.48

Howard Higgins Coal Co. : Z 12,452.15

R. B. Ivey Coal Co. 23,082.22

Will Land Coal Co. and/or Will Land & Sons Coal C6. 12,302.90 .-

Charlie Martin Coa! Co. 33,526 03

Patrick & Hampton Cval Co. = 22.457.30

Earl Patton Coal Co. aon i 41,741.34

Hampton E. Patton eal Co. 16,442.61

ae Patton Coal Co. 4 36,564.30

_.W. Sanders Coal Co. and J. w. Sanders :

va Sons Coal Co. - 6,124.48

J. A. Cordell Coai Co. and/or Cordell

Coal & Constr. Co. 11,170.72

H. A. Daffron Coal Co. . 13,692.71

M. T. Dixon Coal Co. 16,345.40

J. H. Graham Coal Co. 12.948.80

M. & T. Coal Co.. 35.898.15 .

Marshall Meeks Coal Co. 46,113.36

W. T. Morrison Coal Co. 21,494.40

Hershel Myers Coal Co. 15,170.12

Waldo Myers Coa! Co. 11,757.30

11,782.28

aaare Nunley Coal Co.

‘ootnote No 14 Continued on Page 14)

°o

14

_ Heretofore certiorari was awarded “because determi

nation of the issue raised here will guide adjustment of a

large body of similar claims now pending” in Alcoa S. S. |

~ Co., Inc. v. U. S., 388 U.S. 421, 423. More recently, the .

Court granted certiorari in Local 761, Int. Union, etc.

Workers v. NLRB, 366 U. S. 667, 671, because, “the inci-

dence of the problem involved in this case is extensive

_ and the treatment it has received calls for clarification”.

The “recurrence of the question” caused this Court to

grant certiorari in International Brotherhood of Téam-

sters, Local 695, A.F.L. v. Vogt, Inc., 354 U.S. 284, 287.

’ Again, in granting the writ in United States v. Standard

/ Oil Co., 332 U. S. 301, 302, “because of the novelty and

importance of the principal question”, the Court noted

that “The suit also was said to be representative pf a

number already commenced” (p. 302, fn. 2). See also

Drake Bakeries, Inc..v. Local. 50, America Bakery ete.

2 Cir., 294 F.2d 399, wherein the Second Circuit divided

/ equally sitting, en banc on rehearing of a three-judge

pane! decision, and this Court granted certiorari. 7 L.

ed. 2c 437. |

—_—_——_—-_--—

(Footnote No. 14 Continued from Page 13)

Leon Nunley Coal Co. , 10,069.03

Aaron Presnell Coal Co. 17,012.90

‘PF. W. Pryor Coal. Co. “ . * 22,557.91

Ramsey Coal Co. and G. & E. Ramsey Coal Co. 21,210.40

Horace J. Scissom Coal Co. : 37,567.96.

Stephenson & Stephenson Coal Co. 23,790.93

J. H. Goforth Coal Co. ; 23,171.25

- Dewey Trussell Coal Co. _ 15,436.00

Rainbow Coal Corp. ‘ 23,345.60

Days Branch Coal Co. - ; : 13,143.25

Tennco, Inc. — - 129.724.40

Paul Gibbs Coal Co. 38,476.80

American Pocahontas Coal Co. ; - 23,660.42

-Robin Red Ash Coal Co. 24,337.25

H. R. Gifford Coal 51,748.60

Witten Mining Co. — 11,458.57

Total $ 954,634.33

In addition: ‘ ? ‘

Lowry Coal Co. , _ 49,531.40

Mears Coal Co. “ Sen : 3,395.93

' Totals. - $ 1,007,561.66

A detailed description of the foregoing cases is to be found in Appendix

F hereto (A. 26a). ‘ : ,

* an

These cases have applicability and pertinency to the |

instant petition. Necessarily, the uncertainty, confusion

and conflict already emphasized by Trustees herein will

continue to exist until this Court, upon review by cer-

‘tiorari, supplies the requisite juridical. guides so that

lower federal courts may with definitiveness advise liti- °

gants of the true apposite. rules. Indeed, under the cir-

- cumstances, a crucial inquiry is, what rule are the various

district courts to follow? The need for proper judicial

guides for utilization in the trials of the pending litigation

-is an impelling, reason for this Court's granting the review

herein sought.

eo

Actually, the impact of the Third Circuit's holding will

be even more expansive than is suggested by the fore-

going collation of cases, for Mears’ pattern of avoiding

his written obligation, upon which the Third Circuit has

placed its sanction, may well become the device and

weapon for use by-employers in all other industries to

- destroy employee confidence in the processes of collective

bargaining ‘and thereby to thwart congressionally-ex-

pressed national labor policy of eradicating industrial

strife throug the medium of written collective bargain-

ing agreements. The rule of law which the Third Circuit

endorses herein, which renders’ instable and uncertain

bargaining contracts, is antithetical to the spirit, the pur-

pose and the language of the Act’s Sections 302(c)(5)

‘and 8(d). Chief Judge Sobeloff's dissent poses in succinct

and apt fashion the impact of the Third Circuit's opinion

by his query: “what kind of trust is it that leaves the door

open to impairment by secret agreements, even ae

participated in by a donor?” (A. 19a).

| IV.

Since the divergence of views expressed in the dis-

4

16.

senting opinion of Chief Judge Biggs, in which Circuit

Judges Staley, Ganey and Smith joined, frorn the opinion

of Circuit Judge Kalodner herein” is’ based upon the

dissenters’ belief that the opinion is opposed: by national

labor policy expressed in Sections 302 (c) (5) (B) and

8(d), the following discussion is devoted to demonstrat-

. ing that the Third Circuit’s opinion of October 11, 1961,

collides with such policy and is erroneous.

The original National Labor Relations Act (the “Wag-

ner Act”) was relatively new when this Court noted its

preference for written collective bargaining agreements

as “Contrasting with the unilateral statement by the

employer of his labor policy” and mandated that. agree-

ments reached by bargaining negotiators be reduced to

writing “as 4 permanent memorial” and “an authentic

- record” of its terms, not only to evidence the employer’s

good faith but as “the final step in the bargaining process”

and because, fignificantly, “the signed agreement has

been regarded as the effective instrument of stabilizing

- Idbor relations and preventing, through collective bar-

gaining, strikes and industrial strife”. H. J. Heinz Co. v.

NLRB, 311 US. 514, 523-4, 525.

Poiftting to Heinz, the Sixth Circuit in Gatliff Coal Co.

-y. Cox, 6 Cir., 152 F. 2d 52, 56, sanctioned ‘a district

court’s declarations that national labor policy demanded

that collective bargaining agreements be accorded “a

more secure and stable position in our National economy

than that of ordinary common law eontracts which may -

"be altered-at pleasure” and that the “National Labor Re-

lations Act clearly precludes defendant's reliance upon

the prior or contemporaneous oral agreement upon which

'* The instant case was heard and decided by Judges Goodrich, Me-

Laughlin’ arid Kalodnefy. Upen, petitien for rehearing, the petition was

denied by Circuit Judges rich, McLaughlin. Kalodner and Hastie.

)

i

|

17 |

ne defensé-. . ..is based.” Cox v. Gatliff Coal Co. pe.

E. D. Ky., 1945, 59 F.Supp. 882, 886, ae nea

Statutory accord with national labor policy as €X-

pressed in Heinz is found in Congress’ enactment of Sec-

tion 8(d) {29 USCA 158(d)), which requires, as af ele- ~

ment of good faith bargaining, “the execution of a written

interpreting and implementing éollective bargaining

ents. Textile Workers Union Vv. Lincoln Mills,

353 US. 448; Lewis v. Benedict Coal Corp., 361 US.

459, and United Steelworkers of America V. Warrior &

Gulf Nav. Co., 363 U.S, 574;578; Local 174, Teamsters V

44

_ Lucas Flour Co., 7. ed. 2d 593 (1962).

- Indeed, the Third Circuit’s assertion that “national

labor policy does not require the exclusion of parol evi-

dence which shows the lack of an effective acceptance

of an offer” (A. 5a), in relation to labor contracts, is at

odds with the teaching of Lincoln Mills; Benedict. War-

rior and Lucas Flour that the interpretation and imple-

mentation of bargaining. agreements must be accommo-

dative to national labor policy.

The ineptness of such assertion is made clear when’,

- it is considered, as Chief Judge Sabeloff reminds’ us in

his dissent,- harmonious with Lewis v. Benedict Coal

’ Corp., 361 US. 459, 468, that, the union, in addition to

bargaining for itself, bargained also for employees and

the Trustees, and that these interests, as well as the pub-

lic, are entitled to know from a written agreement what

are the contract’s real terms. ‘The Third Circuit's unwill- ©

jngness to accord to collective bargaining agreements

the protection of federal labor policy explains its indif-

y .

18° 7

ference to the dissent of Chief Judge Biggs and the three

other Circuit Judges that unless federal courts shape

federal law so that collective bargaining agreements

“cannot be modified or, nullified by covert conditions or.

stipulations entered into between the employer and the

union” (A. 8a), “industrial strife is sure to ensue and

the stabilizing effect on labor relations of the Labor

Management Relations Act will be destroyed” ( A. 8a).

This dissent is accordant with that of Chief Judge Sobel-

off in Lowry that “If such written contracts-can be nulli-

fied whenever the employer and union come to some

other secret oral agreement, the purpose of the contract.

as an instrument of industrial peace may be frustrated”

(A. 18a). : <|

The Third Circuit’s holding herein stands in total con-

trast to its action in Lewis v. Toth,.3 Cir., 280 F. 2d 422,

(A. 25a), when it affirmed the pronouncement of & Dis-

trict Court [Lewis v: Toth, DC, W.D. Pa., 1959 (A. 23a)]

that: oe ox

>

the written agreements here were the final step

in a collective bargaining process under Section

a of the TaftsHartley Act, and under that Act -

the parties to collective bargaining agreements are

p ded from relying on prior or contempora-

neous oral agreements. It was so held in Gatliff

- Coal Company vs. Cox, 152 F. 2d 52, Sixth Circuit,

1945.” )

. ° Thus, not only is there a conflict between the majority

opinion and rationale of national labor policy in other

cases, herein discussed, but the applicable in the

Third Circuit itself is beclouded. and uncertain.”

é

The Third Circuit's discordance with national labor .

-policy stands in sharp contrast, too, to the concern there-

_ for in 1958 when, in Mearns v. Lewis, 4 Cir., 268 F. 2d~

ye

19

_ 427, the Fourth Circuit affirmed a district court hold-

ing which rejected a coal operator's contention that he

signed the same industry-wide. agreement herein in-

volved merely ‘aS a “formality” and that.a union repre--

sentative had told him he need pay only such royalties

as he could. Lewis v. Mearns, DC, N.D. W.Va., 1958.

168 F. Supp. 134.. Chief Judge Biggs’ dissent in the case _

at bar accords with the district court’s appraisal. in

Mearns that the ®ral testimony “At most” shows “only

a prior or contemporaneous oral. agreement which he is

barred ‘from introducing -here to vary the terms of the

written contract by, the parol evidence rule” (168 ue

- Supp. 138), and continuing,

“In addition, the written agreement, here was the |

final step in a collective bargaining process, un-

der Section 8(d) of the... Act...- It has been

held that parties.to such contracts are precluded

by the Taft-Hartley Act from relying upor prior

‘or contemporaneous oral agreements. Gatliff Coal

Co. v. Cox, 6 Cir.. 152 F.2d 52."

The Fourth Circuit, in a per curiam opinion in Mearns,

adopted’ the “District Court’s opinion which .fully dis-

cusses the facts and the law’ (268 F. 2d 428).

As already noted Chicf Judge Biggs’ disagreement with

“the Third Circuit’s opinion herein was rooted in his

accord “with Chiet Judge Sobeloff's argument in his.

Lowry dissent that Section 302(c) (5) (B) and Section

8(d) commanded a result different from that reached by

the Third Circuit. . e

a ‘The Lowry dissent, regarding the statute as an assur-

ance that employees ‘be knowledgeable as to welfare

benefits to which they are entitled, notes Section 302(c)

(5) (B) required “the détailed basis on which such pay-

ments are to be made” must be “spécified in a written

8

oN

Ye

(20

agreement with the employer” (A. 16a, 17a) and appro-

priately observes such protection is incomplete, unless

“the statute is read to require as well that the terms on .

which payments are to be made into the Trust’ Fund be

similarly stated in writing” (A. 16a). Since, as that

dissent, as well as the dissent of Chief Judge Biggs here-

in, borrows from Benedict (361 U.S. 469), that royalty

payments are an indirect method of compensating em-

ployees, unless reliance may be had upon the written

agreement, employees are, the Lowry dissent argues, “de-

ceived if the publicly declared, written agreement may .

be sapped by a secret compact” (A. 17a). In Benedict,

this Court.speaking of the same national labor cohtract.

observed “this is ‘an 4ndustry-wide agreement involving

many promisors” (361 U.S. 469), which reflects the merit

in the Lowry dissent’s observation that written delinea-

tion of royalty payments is necessary to employers in an

industry-wide bargaining situation, to enable them to

know (A. 17a) “when someone. is paying less” royalty

than others. Pertinently, the Lowry dissent notes that if

one signing a written agreement may be permitted to

- say, “Yes, we have obediently put it in writing, but we

did ndt mean it’, then the scheme of financial aid and —

security to employees “from welfare funds for problems

_ of unemployment, iling. old age and death “could be

reduced to chaos by a uccession of such defenses” as .

Mears relies upon herein, “bringing in its train a host of

social evils” (A. 17a). .

The Third Circuit’s wilingness that a signatory may

be absolved of his writsed obligation to pay royalties to ©

the Trust Fund by oral proof that the collective bargain-

ing agreement, executed by Mears, was not to be éffec-

tive until he received a copy thereof executed by UMW ~

- is at war with and a glaring departure from this Court’s

* recognition in Benedict (361 U.S. 468-9) that a signatory

. \

é . }

- P /

a“.

21.

to the industry-wide coal agreement “entered into a long-

term relationship” and assumed responsibility for the

Fund's soundness and its management.

Further, the dissent of Chief Judge Biggs and the other

Circuit Judges invites attention to the argument in the

Lowry dissent that even if an oral agreement could be

- relied on by Mears in a suit by UMW, it could not

: asserted as against the Trustees (A. 15a-16a, 19a). =>

Reliance by both the Third Circuit (A. 5a) and the

district court (J.A: 21a) upon Burke v. Dulaney, 153-U.5.

228 (1894) is totally misplaced, since: it- antedated by

many years the enactment of the statutes herein involved

expressive of national labor policy, as well as the profes-

sions of the Supreme Court, recognizing the necessity of

-implementing that policy. Moreover, it is noteworthy

that both courts too placed heavy reliance upon Similow

v. Dickerson, 357 Pa. 455, 94 A.2d 883 (1947), contrary

to this Court’s recent proriouncement, that where rights

obtaining under collective bargaining. agreements are

concerned, “incompatible doctrines of local tebor law

must give way to principles of federal labor law.” Local

174, Teamsters v. Lucas Flour Co., 7 L. ed. 2d 593, 598.

It is to be-remembered that the Trustees’ rights to the

delinquemt royalties and Mears’ obligation to pay them

are contained in an irrevocable trust, created pursuant

~ to Section 302(c) in a bargaining agreement for em-

ployees in an entire industry, and in Benedict this Court

declared that “This collective bargaining agreement... .

is not a typical third-party beneficiary contract” (361

USS. 459. 468). The Lowry dissent appropriately points

to this Court’s further holding in Benedict (361 U.S. 465)

that the Trust Fund “is in no way an asset or property

of the untion” but is so independent of the union that a

signatory employer was not permitted to use a money

22

judgment against the union as a set-off to a judgment .

against the employer in Trustees’ favor (A. 19a): The

Lowry dissent, logically and with substance, declared

(A. 19a), “The Trust Fund's obligation to pay benefits

to Lowry’s employees could not be affected by secret

understandings between the coal company and the union:

* neither may the employer's obligation to pay rovalties

to the Trustees be diminished by ‘clandestine arrange-

ments between the employer and the union”. ,

Such declarations apply with equal force to the al-

leged understanding between Mears-and the ufiion rep-

resentative.

Sai

Benedict emphasized that the trust created in this

_ industry-wide ‘agreement was to provide: security for

employees and their families (361 US. 468). The gross-

ness of the Third Circuit’s error is manifest by its utter

unconcern and lack of consideration for these ultimate

beneficiaries. Actually, the Third Circuit effectuates a

burden that must be imposed in final analysis upon em-

ployees as the Fund’s ultimate beneficiaries, innocent of

any wrongdoing, who.produced the coal from which flows

Mears’ obligation: to pay the royalty upon such produc-

tion. Lewis v. Benedict Coal’ Corp., 361 U.S. 466. The

Lowry dissent aptly ‘argued that a trust which may be .

impaired by secret agreement is “at war with the law’s

underlying policy” (A, 19a). Similarly; there is vitality

in Chief Judge Biggs’ admonishment that the result of

permitting labor contracts to be modified or nullified’ by

covert conditions or stipulations between an employer

and a union will inevitably result in industrial strife “and

the stabilizing effect on labor relations” of the Act “will

be destroyed” (A. 8a). Even if Mears could be regarded

23

as innocent of wrongdoing, which Trustees deny, as

between himself and Trustees (who stand in the shoes of

employees as the ultimate beneficiaries, U.S. v. Carter,

353 U.S. 210, 220), Mears is subject to the rule that when

one of two’ innocent parties must suffer by the act of a ~

third person, he, who by his act has enabled such third

person to cause the loss, must sustain it. Eliason v. Wil-

born, 281 U.S. 457; Farmers Nat. Bank & Trust Co. Vv. ©

Flerible Truck Corp.,3 Cir., 81 F. 2d. 541: NLRB v. Indus-

trial Cotton Mills,.4 Cir., 208 F. 2d 87, 91.

In view of Mears’ admission that he executed the col-

lective bargaining agreement. that coal production re-

sulted from the services of coal miners covered by such

agreement, that Mears, by his own testimony, could not .

have sold his coal except by paying the royalty —and

this at the insistence of coal buying customers: (J.A. 5la,

- 54a, 57a) and the undisputed fact that Mears failed to

claim he was not under a contractual obligation to pay -

prior to the instant action, it ill-behooves Mears who has

already pocketed the royalty moneys received from his

customers, to exhort the ‘propriety of adherence to com-

mon-law principles, for the. purpose of accomplishing a

“windfall” at the expense of. coal miners who are the

ultimate beneficiaries of the Fund. Yet, this is the result

echieved-by the Third Circuit’s opinion. ,

CONCLUSION

For the foregoing reasons, Petitioners pray that ‘this

Petition for Writ of Certiorari shouid be granted and

that such a Writ issue to review the decision and judg-

ment of the United States Court of Appeals for the Third

Circuit entered in said case No. 13,502 on October 11,

1961, as well as said Court’s order entered therein on

24 -

January 4, 1962, denying. Petitioner's Petition for Re-

_ hearing. Adi ;

Respectfully submitted,

Vat J. Mitcn,

Harovp HL-Bacon. *

Cuaries L. Wipman,

907 Fifteenth Street. N. Wosrs- >>

~~ “Washington, D.C.

A. E. Kountz,

ALEXANDER UNKoviIc.

. Witi1aM G. Boyte,

: Kountz, Fry & Meyer.

. 1424 Frick Building,

Pittsburgh 19, Pennsylvania.

M. E. Borarsky, —

511 Kanawha Valley Building,

Charleston, West Virginia.

«

* Attorneys for Petitwmners.

ore reais ieatate

.

sory eRe!

-

He ee RU TRE FNS ogi} ewan

a eee