# Memorandum for Respondent — Britt v. United States > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385602_0259%3A6 ## Record - **Collection:** Supreme Court brief - **Document type:** Memorandum for Respondent - **Published:** January 1, 1965 - **Citation:** 379 U.S. 971 ## Text Page Statement_....--------------.------------------------- 1 A. The underlying facts__-.-------------~--------- 2 B. The state court and other proceedings------------ 8 Discussion.......-----------------------+-------------- 12 Conclusion_....----.---------------------+------------ 25 CITATIONS Cases : American Smelting and Refining Co., 92 NLRB 1451-- 17 Bank of United States v. Planters’ Bank of Georgia, a stan 19, 21, 23 Brown Shipbuilding Co., 87 NLRB 326...------------ 17 Ps Employees v. Missouri, 3174 U.S. 74------ Siena | a California v. Taylor, 353 U.S. 553---.-----~------+--- 23 Carbide and Carbon Chemical Corp., 73 NLRB 134--- 17 Civilian Cafeteria Board, 106 NLRB 208--~--------- 18 Copolymer Corp., 52. NLRB 578.------------------- 17 Cosmopolitan Shipping Co., 2 NLRB 159------------ 17 Creekmore v. Public Belt B.R. Comm'n of New Or- leans, 134 F. 2d }76, certiorari denied, 320 US. 742... 18 Division 1267 v. O1dman, 320 F. 24 T29-.------------ 2,11 Emergency Fleet Corp., U--ited States Shipping Board v, Western Union Tel. ('0., 275 U.S. 415------------ 2A Fruco Construction Co. v. McClelland, 192 F. 2d 241-_- 17 Garner Aviation Service Corp., 101 NLRB 517------ 17 Geronimo Service Co., 129 NLRB 366_-------------- 17 Hoosier Veneer Co,, 21 NLRB 907, modified and en- forced, sub nor:. National Labor Relations Board v. Bachelder, 120 F. 2d 574, certiorari denied, 314 U.S, CF incincccaumenmamiiants PR ete NOE ON 22 Int'l Brotherhood of Electrical “Workers, Al J. Schneider Co. 81 NLRB 99--..------------------ 18, 23 Middle Dept. Assoc. of Tire Underwriter, 122 NLRB BB nce cceeee ee nddbeqnacnpsageeneeneg~nees 19 Mobile Steamship Association, 8 NLRB 1297------- 18 Montgomery Steel Products Corp., 94 NLRB 225---- 18 National Faod Corp., 88 NLRB 1500_-------------- 18 758-580—_64—_1 (1) a | Cases-—Continued National Labor Relations Board v. Atkins & Co., 331 National Labor Relations Board v. Bank of ‘ merica, etc., 130 F. 2d 624, certiorari denied, 318 U.S. 791_- National Labor Relations Board v. Carroll, 120 F. 2d National Labor Relations Board v. Concrete Haulers, Ine., RR ee one ee National Labor Relations Board v. Jones & Laughlin Beees Carp, BH TE, Gi cc sceienncctccdicmsanine National Labor Relations Board v. Lund, 103 F. 2d New Jersey Turnpike Authority, 33 LRRM 1528__--- Ownard Harbor District, 34 NLRB 1285_...-._.---- Parden v. Terminal Railway of the Alabama State Docks Department, 377 U.S. 184.---------------- Patton v. Roane-Anderson Co., 192 F. 2d 965_.------- Peter D. Furness, 117 NLRB 437, enforced sub nom. National Labor Relations Board v. Local Union No. SEB, Bi, FO FB Bi ncntinnicniincsiodiminanace Plumbers’ Union v. Door County, 359 U.S. 354_-..--- Public Service Corporation of New Jersey, 72 NLRB Retail Clerks v. Schermerhorn, 373 U.S. 746_------- Reconstruction Finance Corporation v. Merryfield, 134 Roane-Anderson Co., 95 NLRB 1501__------- Sloan Shipyards v. United States Shipping Board, Emergency Fleet Corp., 258 U.S. 549...-------- State v. Dade County, 142 So. 2d 79_--------------- Tampa Shipbuilding Co., Inc., 62 NLRB 954_-..---- Thiokol Chemical Corp., 113 NLRB 547_---.-------- Toledo Board of Trade, 117 NLRB 1504___-_-_-_--- Tri-County Electric Membership Corp., 145 NLRB No. I ‘ Cases—Continued Page United States v. United Mine Workers, 330 U.S. 258__ 22, 23 War Hemp Industries, Inc., 57 NLRB 1709____._____ 17 Statutes: National Labor Relations Act, as amended (61 Stat. 136, 73 Stat. 519, 29 U.S.C. 151, et seg.) : Section 2(1)- cen analntieneeibeneniamiimnmmaaiei 23 Section 2(2)..-___ 2,9, 10, 18, 14, 15, 16, 19, 22, 28, 94, 95 Section at eiesnninanastemtinccniiasatnilcniesinsaim 11 cn RE ELOISE ae 10 I I a cescssncersetsctnicninnistrennioneshvcsarensa rene 10 Section 8(a)(5)----..-_________ tineninhsdbitehinaten tines 10 Section 8(b) (4)- ~~ a Section 10(b)- 11 Urban “{sss Transportation Act of 1964, 78 Stat. 302 et 8eq.: I 12 4” iT ae 12 Miscellaneous : 109 Cong. Rec. 5672-5674_..............__._._ 12 Fordham, Revenue Bond Sanctions, 42 Col. L. Rev. Sian nila pte daiihihdheceemthininia tecesithinaiainemnnesons 20 Lag. Hist. of the Labor Management Relations Act, nS eA 15, 16 Leg. Hist. of the National Labor Relations Act, 1935 IN MN iaiiihialaitestechinhccicicnisaienitaeinictansienen academe 15 Nehemkis, The Public Authority: Some Legal and Practical Aspects, 47 Yale L.J. 14..-....-________ 20 En the Sugreme Gourt of the United States Ocrongr TERM, 1964 No. 388 AMALGAMATED ASSOCIATION OF Srruer Execrric Rat- way aND Motor CoacH EMPLOYEES OF AMERICA, Division 1267, PETITIONER v. Dape County, a PoirricaL SUBDIVISION OF THE STATE or Forma, AND THE MeErropouitaNn Dave County Transit AuTHORITY, A GOVERNMENTAL ENTITY OF Dave County, FLoripa ON PETITION FOR A WRIT OF CERTIORARI TO THE SUPREME COURT OF FLURIDA MEMORANDUM FOR THE NATIONAL LABOR RELATIONS BOARD STATEMENT This memorandum is filed pursuant to the request of the Court for the government’s views on the issues raised by the Union’s peution for certiorari. The petition seeks review of a judgment of the State courts of Florida declaring that Dade County and its Trans- it Authority are not permitted, under State law, to recognize and bargain with the Union as the collec- (1) 2 tive bargaining representative of the Transit Author- ity’s employees, and enjoining the Union from engag- ing in strike action to compel such recognition or bargaining (Pet. 5-6; Pet. App. A3-A4, A12-A13, AJ4, A47-A48). The basic question presented is whether Dade County and its Transit Authority in their operation of a traasit system in Miami, Florida, are removed from the coverage of the National Labor Relations Act by the governmental exemption in Sec- tion 2(2) of the Act. That section provides: The term ‘‘employer’’ includes any person acting as an agent of an employer, directly or indirectly, but shall not include the United States or any wholly owned Gevernment cor- poration, or any Federal Reserve Bank, or any State or political subdivision thereof * * *. A. THE UNDERLYING FACTS In the summer of 1960, the Board of County Com- missioners for Dade County, Florida, enacted an ordi- nance creating the Metropolitan Dade County Transit Authority, composed of five members, appointed by the County Commissioners (R. 1389-1390; J.A. 33).’ The Transit Authority is empowered, under the ordi- nance, to perform functions with respect to ‘‘the ac- quisition, establishment, financing, operation, mainte- nance, control and expansion of a mass transit sys- 1“R.” refers to the portions of the record in the court below filed with the petition. “J.A.” refers to the joint appendix to the briefs in Division 1267 v. Ordman (infra, p. 11), which is an item listed in the index to the transcript of record. However, since a copy of the joint appendix apparently has not been trans- mitted, we are filing a copy thereof with this memorandum. 3 tem * * *, under the direct supervision and control of the Board of County Commissioners’’ (R. 1390; J.A. 35). Approximately a year after enactment of the ordinance, the County, on the recommendation of the Transit Authority, entered into an agreement for the purchase of four private transit companies from W. D. Pawley (R. 1401, 1405; J.A. 62). Under the purchase arrangements, Pawley trans- ferred his shares in the companies to the County at an agreed valuation of $7,705,274, minus the liabilities outstanding at the time of closing (R. 1405-1406; J.A. 63). The County did not pledge its faith and credit, or taxing power for payment of this price (J.A. 64, 140). Instead, the County issued Special Revenue Transit bonds in the aggregate principal amount of $9,000,000 (R. 1407; J.A. 64). Out of this total issue, the County paid Pawley the bulk of the purchase price for his transit companies, i of the appropriate principal amount (R. 1 : J.A. 63-64).2 The balance of the bonds, over and above the purchase price, were sold for cash at face value to customers supplied by Pawley, and the pro- ceeds of these sales were put into the operation of the transit system (R. 1407, 1409; J.A. 64, 65, 74). The bonds pay five percent interest annually and mature serially within the 15 years between 1962 and 1977 (R. 101-102; J.A. 79). Upon specitie authoriza- tion by County ordinance, however, the bond debt ?Thé only part of the purchase price that Pawley did not re- ceive in bonds was $300,000, which the County paid in cash from the proceeds of the sale of certain transit properties not needed for the County’s operations (R. 1426; J.A. 74). as eee eis Sent n Pees ee ae ee + eee + + 4 may be refunded up to 40 years (J.A. 88-89). Bond principal and interest payments are to be met exclu- sively from the revenues of the transit system, which, under the terms of a Trust Agreement (discussed below), are to be held in trust pending the retirement of all bonds (R. 1407, 1564; J.A. 64-65, 74a, 138-139). Although the bonds constitute a first lien on the tran- sit revenues (J.A. 74b, 112-113, 121), they are not to be “construed * * * as conveying or mortgaging the Transit System or any part thereof’ (R. 1578; J.A. 140, 64-65). Thus, when Pawley, on February 9, 1962, relinquished full ownership of the transit companies and their assets to the County, he was remitted solely to the rights of a bondholder (R. 1460; J.A. 240-241). Pawley~and the other bondholders have extensive protection for their investment under the Trust Agreement for the transit revenues (R. 1564-1568; J.A. 71-141). The Bankers Truzt Compary and the Miami Beach First National Bank are named as trustee and co-trustee under this Agreement (R. 1564; J.A. 72). Their function is to act as custodians of the revenues, chsuneling sums into the various ac- counting funds,* in accordaace with the requirements of the Trust Agreement and the current county budget, and paying moneys out of these funds upon requisitions signed by the County Finance Director * These funds include an operating fund, a damage reserve account, a construction fund, an eqaipment reserve fund, an im- provement fund, a special reserve fund, a revenue bond interest and sinking fund, and a renewal and replacement fund (J.A. 83, 105). 5 and the transit superintendent (R. 1565-1566; J.A. 92, 93-94, 102-103, 104-105, 109, 111, 112). In addition, the County is obligated by the Trust Agreement to employ a designated “management agency” (National City Management Ccrapany) and a designated firm of “‘consulting engineers” (Cover- dale & Colpitts), for the transit operation (J.A. 116- 117).*. The primary function of the management agency is to provide the professional and supervisory personnel who direct “day-to-day” transit opera- tions (R. 1545-1547; J.A. 177-178). It is authorized, for example, to prepare a proposed annual operating budget, subject to review- by the Transit Authority and the Board of County Commissioners; to recom- mend changes in routes, schedules, and fares ; to estab- lish equipment maintenance and repair procedures; to assign transit drivers to their runs; to keep attend- ance schedules; and generally to implement the labor policies established by the County Personnel Depart- ment (R. 1437, 1545-1547; J.A. 177-181, 189-191). ‘The written approval of the trustee is needed before the County is authorized to employ anyone other than the com- panies designated, as management agency or consulting en- gineers (J.A. 116-117). The trustees themselves are removable by a vote of the holders of not less than a majority of the out- standing bonds or for breach of duty, by any court of compe- tent jurisdiction upon the application of the Board of County Commissioners—or the holders of not less than five percent of the outstanding bonds (R. 1577-1578; J.A. 132). New trustees may be-named by the Board of County Commissioners or by the holders of a majority of the bonds with the latters’ choice taking precedence in the event of a disagreement (J.A. 132-134). The cousulting engineers are concerned with the general financial and operational policies of the Transit System (J.A. 95, 96, 97, 114, 117-118, 121- 122). For exampie, the County covenants in the Trust Agreement to begin operations charging the same transit rates that were in effect under private operation, or “‘such other rates’’ as are approved by the consulting engineers (R. 1567; J.A. 94-95).° Thereafter, the County is obligated not to reduce rates without the consulting engineers’ assent (R. 1569-1570; J.A. 96, 97). Although the County may refuse to institute rate increases recommended by the consulting engineers or may institute increases that are not recommended, it is encouraged to follow the recommendations of the consulting engineers by a provision in the Trust Agreement that excuses any default in bond payments provided these recommenda- tions have been followed (R. 1571; J.A. 97-98). Finally, the Trust Agreement contains certain covenants of sound operation. The County agrees that ‘‘all compensation, salaries, fees and wages paid by the Transit Authority * * * will be reasonable, that no more persons will be employed * * * than are necessary for the efficient and economical opera- tion of the Transit System, that it will maintain and operate the Transit System in an efficient and eco- ° The approval of the consulting engineers is also needed for any change in the transit routes (J.A. 117), or any alienation of the transit system’s assets (J.A. 121-122). Similarly, the Transit Authority must secure the approval of the consulting engineers for a transit system insurance program and for the plans and specifications of a central transit system garage (J.A. 117-118, 114). nomical manner * * * and that, from the Revenues thereof, it will at all times maintain the same in good repair and in sound operating condition * * *”’ (J.A. 115-116). If the County defaults in the ‘‘due and punctual performance” of any of these covenants, the trustee may, and upon written request of the holders of not less than 20 percent of the outstanding bonds shall, declare the principal on all bonds to be immediately due and payable (J.A. 126). Further, the trustee may, and upon the written request of the holders of not less than 10 percent of the outstanding bonds shall, proceed to protect and enforce the rights of the bondholders by such ‘‘suits, actions or special proceedings in equity or at law, either for the specific performance of any covenant or agreement con- tained * * * [in the Trust Agreement] or in aid or execution of any proper legal or equitable remedy, as the Trustee, being duly advised by counsel, shall deem most effectual to protect and enforce such rights”’ (J.A. 127). The County has ultimate control of the Transit System’s labor relations. Thus, the County Person- nel Department handles all matters connected with the hiring of the transit system’s employees, inelud- ing the taking of job applications, the giving of com- petitive examinations, and the establishment of hiring standards (R. 1545-1547; J.A. 189-191). The Person- nel Department also has authority io fire, promote, and discipline employees (J.A. 178-181, 190-191). In Oc- tober 1961, the County and the Transit Authority dis- tributed Working Rules and Regulations that were ABSIT BRA aint BAP Pa hp patterned on the contract terms, including pay scales, previously negotiated between the Union and the private transit companies, prior to the County’s take- over of the system (J.A. 177, 188-189, 269-270). These rules provide that the employees of the Transit Authority shall be county employees, generally inte- grated into the classified civil service; that, as county employees, they may belong to unions that do not assert a right to strike against the County or ‘‘to force collective bargaining procedure’’; and that the employees, or their representatives, may participate in the public hearings that are to be held prior to periodic revisions of ‘‘the rules and regulations relat- ing to the working conditions of employees of the Authority” (J.A. 267-268). The rules further pro- vide that, whenever practical, promotional positions will be filled by competitive examinations under the personnel rules for the classified civil service set out in the Code of Metropolitan Dade County (J.A. 270- 271, 266). B. THE JUDICIAL AND ADMINISTRATIVE PROCEEDINGS On November 30, 1961, prior to the actual transfer of Pawley’s assets and the commencement o/ operations by the County, the County and the Transit Authority instituted the present suit in the Cireuit Court of Dade County (R. 12; J.A. 149, 163). The complaint stated that the Union had demanded that the County and the Transit Authority recognize it as the exclusive bargaining representative of all Transit Authority employees; that they assume the obligations of the employer under the existing labor agreements be- tween the Union and the private transit companies ; and that they enter into negotiations looking toward the execution of a new collective bargaining agreement with the Union (Pet. App. A5; R. 19-20; J.A. 156). The plaintiffs asked the court to enjoin a strike threatened in support of these demands and prayed for a judgment declaring that State law bars Dade County and the Transit Authority from recognizing the Union, or bargaining or entering into an agree- ment with it, as the collective bargaining representa- tive of the transit employees (Pet. App. A5-A6, A9- A10). The Union moved to dismiss the suit on the ground, inter alia, that the rights of the transit em- ployees were protected by the National Labor Rela- tions Act, and that the State court the:efore lacked jurisdiction of the subject matter (Pet. App. A7; R. “163; J.A. 28). The county court rejected the Union’s contention. It held that, although the purchase agreement left Pawley with substantial financial or operational con- trol of the transit system, this was not sufficient to divest the County of the governmental immunity pro- vided by Section 2(2) of the National Labor Relations Act. The court further ruled that, under State law, the County and the Transit Authority were not obli- gated to bargain with the Union on behalf of the transit employees and the Union did not have the right to strike for that purpose. It issued a declara- tory judgment to that effect, and an injunction re- straining the Union from striking to obtain recognition 758-580—_64-—__2 10 or a contract from the County (Pet. App. A19-A53). On November 1, 1963, this decision was affirmed on appeal by the Florida District Court of Appeals (Pet. App. A2—A18).° While the State court proceeding was pending, the Union filed with the Board unfair labor practice charges against W. D. Pawley, Dade County, and the Transit Authority. These charges alleged that the ob- ject of the transfer agreement was to enable Pawley to evade the statutory obligation to bargain with the Union and to deprive the employees of their right to strike; that, pursuant to this agreement, the charged parties had refused to bargain with the Union, and had made employment in the transit system condi- tional on relinquishment of the right io strike; and that the charged parties had thereby violated Sections 8(a) (5), (3) and (1) of the National Labor Relations Act (R. 173-176, 306-307 ; J.A. 9-18). On March 2, 1962, the Regional Director of the Board notified all parties by letter that he had decided not to issue a complaint on the Union’s charges be- cause “in the present posture of the case the County is the employer of the employees who are or will be engaged in the operation of the transferred transit lines,” and the statutory exemption in Section 2(2) *The lower court had held that the transit employees, al- though County employees, were not eligible under State law to be included in the classified civil service (Pet. App. A20). The appellate court reversed this ruling, remanding the case for a determination of the rights of the employees who ac- cepted employment with the County to classified civil service status and other benefits under State law (Pet. App. A15-A16). Senha DAE 0 ae Siay I Bilin STEM aD re ede 2 She “ a. . “ Sk Nt ed AAR Bin Si A 11 of the Act was therefore applicable. The letter added, however, that the charges would not be dis- missed at that time because the outcome of the pend- ing State litigation might “conceivably have an im- pact” on the issues raised by the charges, and dismis- sal prior to completion of the State proceeding might therefore prejudice the rights of the charging parties under the limitations period imposed by Section 10(b) (Pet. App. A7—A8; R. 292-293).". On June 21, 1962, the General Counsel of the Board affirmed this ruling (J.A. 23-24). On November 7, 1962, the Union filed suit in the United States District Court for the District of Col- umbia against the General Counsel, seeking a judg- ment declaring that the arrangements for purchase of the transit system by Dade County did not remove that system from the coverage of the National Labor Relations Act. The district court dismissed the com- plaint for want of jurisdiction over the action (Pet. 19). On appeal by the Union, the Court of Appeals for the District of Columbia Circuit affirmed. It held that the complaint failed to state a claim warranting relief because ‘‘[t]he General Counsel’s decision to defer action on the Union’s charge was within [his] * * * jurisdiction [under Section 3(d) of the Act].’? Division 1267 v. Ordman, 320 F'. 2d 729, 730. 7 Section 10(b) of the National Labor Relations Act pro- vides that “no complaint shall issue based upon any unfair labor practice occurring more than six months prior to the filing of the charge with the Board * * *.” 12 DISCUSSION It is, of course, clear that the provision of the Na- tional Labor Relations Act exempting governmental employers from coverage is fully applicable to an en- terprise which was once in private hands but has been transferred to public control. Indeed, Congress has anly recently recognized that consequence when it enacted the Urban Mass Transportation Act of 1964 78 Stat. 302, providing, inter alia, for grants and loans “to assist State and local public bodies and agencies thereof in financing the acquisition * * * of facilities and equipment for use * * * in mass trans- portation service in urban areas * * *’’ (Sec. 3(a)). See 109 Cong. Rec. 5672-5674." The only question here is whether there has been a sufficient transfer of the transit systems involved to Dade County so as to make it the employer. The Board’s view is that under settled principles the question should be answered affirmatively. 1. Dade County has made a bona fide purchase of the transit lines formerly owned by W. D. Pawley. Although, instead of paying cash, the County issued bonds that are redeemable over a 15-year period out of the revenues of the transit system, the transfer is *In order to cushion this result, the new law provides that it “shall be a conditien of any assistance under this Act that fair and equitable arrangements are made, as determined by the Secretary of Labor, to protect the interests of employees affected by such assistance,” including “(1) the preservation of rights, privileges, and benefit.