Petition for Writ of Certiorari — Bethlehem Mines Corp. v. United Mine Workers of America
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71-1490 | way 15. 1972
MICHAEL RO0DAK, JR.,CLERK
LE COPY T=
Supreme Court of the United States
OCTOBER TERM, 1971
BETHLEHEM MINES CORPORA'TION
and
REPUBLIC STEEL CORPORATION
Petitioners
V.
UNITED MINE WORKERS OF AMERICA et al.,
Respondents
PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
and APPENDICES
NICHOLAS UNKOVIC
LEONARD L. SCHEINHOLTZ
HARLEY N. TRICE II
REED SMITH SHAW & MCCLAY
747 Union Trust Building
Pittsburgh, Pennsylvania 15219
Counsel for Petitioner, Bethlehem
Mines Corporation
CLYDE W. ARMSTRONG
RALPH T. DESTEFANO
THORP, REED & ARMSTRONG
2900 Grant Building
Pittsburgh, Pennsylvania 15219
Counsel for Petitioner,
Republic Steel Corporation
SMITH BROS., LAW PRINTERS, 620 SECOND AVENUE, PITTSBURGH, PA. 15219
Sat Re
a.
INDEX
——— PAGE
OPINIONS BELOW ....................0. cues 2
Ua LR Ks Ga tw ee eas 2
QUESTIONS PRESENTED..................... 3
STATUTES AND RULES INVOLVED.......... 4
STATEMENT OF THE CASE .................. 4
REASONS FOR GRANTING WRIT ............ 10
I ot Ss Ue ea oe kee ag 20
ok NO De ig gad gest Gwe e's 21
TABLE OF CITATIONS
CASES
Atomic Oil Co. of Oklahoma, Inc. v. Bardahl Oil
Company, 419 F.2d 1u97 (10th Cir. 1969) .... 16
Bethlehem Mines Corp. v. United Mine Wkrs. of
Amer., F.2d —— (3rd Cir. 1972), 79
i a ae Bac hia sll aaa bah te i 2
Boys Markets v. Retail Clerks Union, Local 770,
RS a ee rrr 10-12
Duke Power Co. v. Greenwood County, 25 F.Supp.
419 (W.D.S.C. 1938) ...... ore ete e ences 14 n. 8
Elgin J. & E. Ry. Co. v. Brotherhood of Railroad
Trainmen, 196 F.Supp. 158 (N.D. Ill. ELD.
1961) , 302 F.2d 540 (7th Cir. 1962) ...... 17 n. 10
Friend v. United States, 388 F.2d 579 (D.C. Cir.
es ky a.a 13
International Ladies Garment Workers’ Union v.
Donnelly Garment Co., 147 F.2d 246 (8th Cir.
1945) cert. denied, 325 U.S. 852 (1945) ....
OP AS TA a ey arena 13-15 & 17-18
Janssen v. Shown, 53 F.2d 608 (9th Cir. 1931) .... 12
Lawrence v. St. Louis-San Francisco R. Co., 278
ac eee nab de deed ob 12 &17
ii
Index.
CASES PAGE
Madison Shipping Corp. v. National Maritime Union
204 F.Supp. 22 (E.D. Pa. 1962) ...... 12&14n.8
Meeker v. Stuart, 298 F.2d 902 (D.C. Cir. 1961),
affirming 188 F.Supp. 272 (D.D.C. 1960)..... 12
Monolith Portland Mid. Co. v. Reconstruction F.
Corp., 128 F.Supp. 824. (S.D. Cal. 1955)....14n.8
Pacific Maritime Ass’n. v. International Longshore.
& W.U., 454 F.2d 262 (9th Cir. 1971) ...... 13
Powelton Civic Home Own. Ass’n. v. Department of
H. & U. Dev., 284 F.Supp. 809 (E.D. Pa. 1968) 14 n. 8
Sinclair Refining Co. v. Atkinson, 370 U.S. 195
NS ooo ob os No bee ees ahaa Oe 10
Teamster Local 174 v. Lucas Flour Co. 369 U.S.
Se ES 6 beet oy ne OE Ge RA ae ia RRS 11
United Motors Service v. Tropic-Aire, 57 F.2d 479
SE EY vist io ndinms cok We cae dne uta’ 15-16
United States v. Concentrated Phosphate Export
Ass’n., Inc., 393 U.S. 199 (1968) .......... 13
United States Steel Corp., v. United Mine Wkrs.
of Amer., ——F.2d —— (3rd Cir. 1972)..... 2
United States Steel Corp., v. United Mine Wkrs.
of Amer., 317 F.Supp. 1070 (W.D. Pa. 1970).. 2
United States Steel Corp., v. Umted Mine Wkrs.
of Amer., 320 F.Supp. 748 (W.D. Pa. 1970).. 2
West v. Zurhorst, 425 F.2d 919 (2nd Cir. 1970) .... 16
aa
iii
Index.
STATUTES AND RULES PAGE
Federal Rules of Civil Procedure
Federal Rule 65 (c) ............ 5, 9, 13, 15 & 16
Labor-Management Relations Act of 1947, as
amended, 61 Stat. 156, 29 U.S.C. $185 (a) ....
BP Ph at OE eee hy Cine Mae Ca ene 4, 10-11, 14 & 15
Norris - LaGuardia Act, 47 Stat. 70,
20 U.S.C. §101 et seq.............00.. 7-12 & 14-19
OTHER AUTHORITIES
72 Cong. Rec. 4630 (1932) (Remarks of Senator
| ERE a Rahat a! ee alae gee a eee 19
7 Moore’s Federal Practice, 65.09, p. 1657 (2nd ed.
RE Gas ad one bore oR ea a 5 ew ade eek 15 n. 9
———
In THE
Supreme Court of the United States
OCTOBER TERM, 1971
BETHLEHEM MINES CORPORATION
and
REPUBLIC STEEL CORPORATION
Petitioners
v.
UNITED MINE WORKERS OF AMERICA et al.,
Respondents
PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
Rethlerem Mines Corporation and Republic Steel
Corporation, petitioners, respectfully pray that a writ
of certiorari issue to review the decision of the United
States Court of Appeals for the Third Circuit entered
in the above-entitled consolidated cases on February
28, 1972, in which the court reversed the District
Court’s order which had denied respondents’! motion
for award of reasonable costs, exenses and attorneys’
fees.
1. Respondents a.’e individually designated in the
caption of the opinion of the Court of Appeals set forth
in Appendix C, infra, pp. 29-32.
Jurisdiction.
OPINIONS BELOW
The opinion of the District Court for the Western
District of Pennsylvania denying respondents’ motion
for award of costs, expenses and attorneys’ fees entered
September 30, 1970, is reported at 317 F.Supp. 1070 (Ap-
pendix A, infra, pp. 21-25). The opinion of the District
Court denying respondents’ motion for reconsideration
of its order denying respondents’ motion for costs,
expenses and attorneys’ fees, entered on December 16,
1970, is reported at 320 F. Supp. 748 (Appendix B, infra,
pp. 26-28). The per curiam opinion of the United States
Court of Appeals for the Third Circuit (Appendix C,
infra, pp. 29-32) is reported at -—— F.2d ——,, and was
filed on February 28, 1972. That opinion relies on that
court’s earlier opinion, filed February 3, 1972, in the
related case of United States Steel Corp. v. United Mine
Wkrs. of Amer. (Appendix E, infra, pp. 36-65).
JURISDICTION
The judgment of the Court of Appeals (Appendix
D, infra, pp. 33-35) was entered on February 28, 1972.
The jurisdiction of this Court is invoked under 28
U.S.C. § 1254 (1).
The jurisdiction of the District Court was by virtue
of 29 U.S.C. § 185.
de baciial PW EPRICE D LD IMG E IG? NEP ENT ls Mf
Questions Presented.
QUESTIONS PRESENTED
Four employers, including these petitioners, sought
and obtained preliminary injunctions under § 301 of
the Labor-Management Relations Act of 1947, as
amended (29 U.S.C. § 185) to enjoin a strike over an
arbitrable dispute. They posted injunction bonds pur-
suant to Federal Rule 65 (c) totaling $4,000 conditioned
to pay “costs and damages” incurred by any party
found to have been wrongfully enjoined. The prelim-
inary injunction was reversed and remanded for a
hearing de novo on the merits. At that hearing, the
injunction proceedings were, by agreement of the par-
ties, continued indefinitely because the work stoppage
had ended. Thereafter, the defendant unions filed a mo-
tion for reasonable attorneys’ fees and expenses under
§ 7 of the Norris-LaGuardia Act (29 U.S.C. § 107). The
amount of such attorneys’ fees and expenses substan-
tially exceeded the aggregate amount of the injunction
bonds. The questions presented for determination are:
1. Whether the bond provisions of § 7 of Norris-
LaGuardia, which provide for the payment of reasonable
attorneys’ fees and expenses, are applicable where an in-
junction is sought and obtained under § 301 to enjoin a
strike over an arbitrable dispute;
2. Whether any recovery may be had on an injunc-
tion bond when there has been no decision on the merits
as to the employers’ right to injunctive relief;
3. Whether attorney’s fees are recoverable on a
bond posted in a § 301 injunction action pursuant to Fed-
eral Rule 65 (c) and conditioned only to pay “costs and
damages”; and
ee ee eT
su ath and en il ARRAN cl eh a
a |
Statutes and Rules Involved.
4. Whether employers who obtain injunctions
under § 301 may be held liable for an amount in excess
of that specified in the bonds posted pursuant to Fed-
eral Rule 65 (c) and approved by the District Court.
STATUTES AND RULES INVOLVED
The statutory provisions and rules involved are:
Section 7 of the Norris-LaGuardia Act, 47 Stat. 71, 29
U.S.C. Section 107; Section 301.of the Labor-Manage-
ment Relations Act of 1947, as amended, 61 Stat. 156, 29
U.S.C. Section 185(a); and Federal Rule of Civil Pro-
cedure 65 (c). They are printed in Appendix F, infra,
pp. 65-67.
STATEMENT OF THE CASE
On June 22, 1970, United States Steel Corporation,
Jones & Laughlin Steel Corporation, and Bethlehem
Mines Corporation filed actions under Section 301 of the
Labor-Management Relations Act of 1947, as amended,
29 U.S.C. § 185 (the “Act’”), to enjoin the defendant
unions from engaging in work stoppages over disputes
which were subject to resolution through the Settlement
of Local and District Disputes procedure of the Na-
tional Bituminous Coal Wage Agreement of 1968.
On June 25, 1970, petitioner Republic Steel Corpora-
tion filed a similar action under Section 301 seeking the
same relief.
After a hearing on the employers’ applications for
preliminary injunctions, the District Court by orders
dated June 24, 1970 (R. 35a, 39a and 48a) 2 as amended
2. All references to the appendix adopted by re-
spondents in the Court of Appeals are designated
» ee.
.
a ‘
~~ _— Ms oc UT EE LEE >
Statement of the Case.
on June 25, 1970 (R. 37a. 46, 49a and 51a), preliminarily
enjoined the unions from engaging in, or continuing to
engage in, work stoppages at the employers’ mines;
from picketing, or in any other manner interfering with
the orderly resumption of, or continuation of, opera-
tions; and directed defendants, their officers, representa-
tives and members to utilize the Settlement of Local
and District Disputes procedure of the labor agreement
for the resolution of any grievances, differences or local
trouble at the employers’ mines. Each of the four orders
further provided that “Bond in the amount of $1,000 has
been approved and filed with the Court by plaintiff.”
(R. 38a, 47a, 50a and 52a).
Each of ihe employers filed 2 bond pursuant to
Rule 65(c) of the Federal Rules of Civil Procedure, the
condition of the bond being that “the plaintiff shall be
liable to the defendants for such costs and damages, not
exceeding the sum of $1,000.00, as defendants or any
other persons may sustain by reason of the Preliminary
Injunction, if the Court finally decides that plaintiff is
not entitled thereto.”3 No complaint was made by the
defendants, including these respandents, to the District
Court as to the conditions or the amount of the bond.
Respondents filed immediate appeals from the
orders granting the preliminary injunctions, and on
June 30, 1970, the United Siates Court of Appeals for the
Third Circuit summarily reversed and remanded these
cases to the District Court “without prejudice to a re-
quest for a hearing de novo on the application for a
3. See R. 40a for the injunction bond given in Civil
Action No. 70-725; the bonds given by petitioners and
approved by the District Court in Civil Action Nos. 70-
727 and 70-728 are identical in every material respect.
Statement of the Case.
preliminary injunction” (R. 71a). The court stated that
it was taking this action “because we find that the par-
ties were effectively denied the opportunity to develop
their respective positions by erroneous rulings of the
[District] Court” (R. 66a), and emphasized that “we
have not reached the issue of the merits of the request
for a preliminary injunction” (R. 71a).
On July 9, 1970, pursuant to the order of remand,
the District Court commenced a de novo hearing on the
employers’ application for a preliminary injunction, and
on the following day, based upon certain representations
and stipulations of counsel for the respective parties,*
the District Court entered an order continuing the hear-
ing until further notice by the court (R. 76a).
On July 17, 1970, respondents filed their Motion for
Award of Reasonable Costs, Expenses, and Attorneys’
Fees. After a hearing, the District Court in an opinion
dated September 30, 1970, denied the motion (R. 1392).
The court concluded that insofar as the motion related
to expenses and attorneys’ fees incurred in connection
with the appeal, the order of the Court of Appeals pre-
scribing that each party was to bear its own costs was
dispositive of the question of costs on appeal (R. 142a).
The District Court also concluded that the requests for
4. These stipulations were that to the knowledge
of the defendants no picketing, work stoppage or strike
existed at the time, and none was known to be antici-
pated in the immediate future, and that the plaintiffs, in
good faith, would utilize their best efforts to comply
with the Federal Coal Mine Health and Safety Act of
1969 and counsel for the respective d-fcndants would
a tees ah ee cee
ons to refrain from any w stoppage or picketing
at plaintiffs’ mines (R. 76a). as
costs, expenses and attorneys’ fees incurred by the re-
spondents in opposing the requests for the preliminary
injunction in the District Court should be denied as
being prematurely made, since there had been no final
determination of the employers’ claims for injunctive
relief (R. 142a). These conclusions by the District Court
made it unnecessary for the court to decide whether the
terms of Section 7 of the Norris-LaGuardia Act, 29 U.S.C.
§ 107, requiring security for reasonable attorneys’ fees
and legal expenses must be read into a bond filed pre-
cedent to the issuance of an injunction against concerted
activity alleged to be in violation of a collective bar-
gaining agreement (R. 143a). -
On December 16, 1970, the District Court denied
the motion by these respondents for reconsideration of
the court’s order denying respondents’ motion for award
of costs, expenses and attorneys’ fees, and on or about
January 15, 1971, respondents appealed.
On February 28, 1972, the United States Court of
Appeals for the Third Circuit, in a per curiam decision
(with Judge Kalodner concurring in part and dissenting
in part), reversed the order ofthe District Court and
remanded the cases, expressly adopting the reasoning
set forth in its opinion in United States Steel Corp. v.
United Mine Wkrs. of Amer. filed on February 3, 1972
(Appendix C, p. 31).5 Accordingly, in stating reasons
for granting this petition, petitioners refer to the Court
5. All four employers, including petitioners, filed a
— for writ of certiorari with this Court on April
, 1972, seeking review of the decision of the Court
of Appeals in United States Steel Corp. v. United Mine
Wkrs. of Amer., which petition is numbered 71-1409
October term, 1971.
Statement of the Case.
Statement of the Case.
of Appeals’ decision of February 3, 1972, which appears
in Appendix E, infra, pp. 36-65.
In its opinion of February 3, 1972, reversing the
decision of the District Court, the Court of Appeals
treated the stipulation continuing the hearing on the
application for a preliminary injunction as ending the
lawsuit for all practical purposes because the work stop-
pages complained of had ceased (Appendix E, p. 43).
It did so, even though answers and counterclaims were
subsequently filed by these respondents and the case will
eventually come up for final hearing (R. 6a, 14a, 23a,
33a).
The Court of Appeals held that the bond provisions
of § 7 of the Norris-LaGuardia Act, that a plaintiff shall
file an undertaking for loss, expense, or damage, includ-
ing costs, together with a reasonable attorneys’ fee be-
fore a preliminary injunction can issue in a labor dis-
pute, apply in a federal court even when, as here, the
injunction is sought under § 301 of the Labor-Manage-
ment Relations Act of 1947, as amended (Appendix E,
pp. 50-51). The Court of Appeals further held that if, in
a labor dispute, the plaintiff seeking a preliminary injunc-
tion tenders, and the district court approves, a bond
conditioned for “costs and damages”, that undertaking
must be construed to include all the elements of damage
which are recoverable under § 7 of Norris-LaGuardia,
including attorneys’ fees (Appendix E, p. 53). Finally,
the Court of Appeals held (with one judge dissenting)
that in any case involving a labor dispute, including an
action for an injunction sought under § 301, the liability
of the plaintiffs, though not of the surety, for loss, ex-
pense or damage, including attorneys’ fees, under § 7 of
Norris-LaGuardia, must be fixed by the district court
EPICS AY HN RRR Ca EELS TANS as AR REPRE EIT rp MEST
—
Statement of the Case.
without regard to any limitation in the injunction bond
(Appendix E, p. 60).
Judge Kalodner, while concurring in the reversal
of the District Court’s order, dissented from the ma-
jority’s direction to the District Court to enter a judg-
ment against petitioners in the injunction proceedings
for an amount in excess of that stipulated in the in-
junction bonds. In the dissenting judge’s view, when
defendants seek recovery of their reasonable attorneys’
fees and expenses in the same proceedings in which the
preliminary injunctions were improvidently issued, they
are limited in their recovery, by virtue of § 7(e) of
Norris-LaGuardia, to the amounts specified in the in-
junction bonds (Appendix E, p. 61); and he termed the
majority’s construction of § 7(e) in permitting recovery
in the same proceedings of an amount in excess of the
injunction bonds as “impermissible judicial legislation”
(Appendix E, p. 63).
The effect of the majority’s decision was to hold
the employers, including petitioners, liable under § 7
of Norris-LaGuardia to respondents and certain
other parties to the litigation not involved in this pe-
tition for certiorari® for approximately $11,350 in
attorneys’ fees and expenses, even though there has
never been a decision on the merits that the employers
were not entitled to the injunctive relief they sought
under § 301, and even though the bonds they posted
under Federal Rule 65(c) were conditioned only to pay
“costs and damages”, and the aggregate amount of the
injunction bonds was only $4,000.
6. See footnote 5, supra.
7
10
Reasons for Granting Writ.
REASONS FOR GRANTING WRIT
. 1. This case raises an important question of fed-
eral law which has not been, but should be, settled by
this Court. In Boys Markets v. Retail Clerks Union, Lo-
cal 770, 398 U.S. 235 (1970), this Court held that, not-
withstanding the anti-injunction provisions of § 4 of
the Norris-LaGuardia Act, a federal court has jurisdic-
tion under § 301(a) of the Labor-Management Relations
Act of 1947, as amended, to enjoin a strike over an ar-
bitrable grievance. The present case involves the unde-
cided question as to whether the bond provision of § 7
of the Norris-LaGuardia Act apply to an action
brought under § 301(a) in which an employer seeks and
obtains a preliminary injunction barring a strike over
an arbitrable grievance.
In reaching the conclusion in Boys Markets that the
literal terms of § 4 of the Norris-LaGuardia Act must
be accommodated to the subsequently enacted provisions
of § 301(a) of the Labor-Management Relations Act of
1947, as amended, this Court pointed out that the Nor-
ris-LaGuardia Act “was responsive to a situation totally
different from that which exists today” (398 U.S. at
250). However, this Court emphasized that its holding
Was a narrow one, dealing “only with the situation in
which a collective bargaining contract contains a man-
datory grievance adjustment or arbitration procedure”
(398 U.S. at 253), and it adopted from the dissenting
opinion in Sinclair Refining Co. v. Atkinson, 370 US.
195 (1962), certain guidelines to be followed by a fed-
eral court in determining whether an injunction would
be appropriate despite the Norris-LaGuardia Act.
SS
11
Reasons for Granting Writ.
While this Court, in Boys Markets, was dealing
specifically with § 4 of the Norris-LaGuardia Act, the
same rationale is applicable to the bond provision con-
tained in § 7 of that Act. If the district court, on the
basis of the principles adopted in Boys Markets, de-
termines that the case is one in which an injunction
would be appropriate despite Norris-LaGuardia, that
Act—and this includes § 7 — has no application.
The Court of Appeals improperly interpreted Boys
Markets as relating only to § 4 of the Norris-LaGuardia
Act and to no other provision of that Act, and er-
roneously concluded that every other provision of Nor-
ris-LaGuardia applies to a § 301 injunction action, even
though it recognized that “some of the specific findings
of fact required by § 7 are inappropriate in a § 301 case”
(Appendix E, pp. 47-49).
One of the principal factors which prompted this
Court to reverse Sinclair was its desire to re-establish
the federal policy of labor law uniformity under § 301
expressed in Teamster Local 174 v. Lucas Flour Co., 369
U.S. 95 (1962). The decision of the Court of Appeals in
this case offends that policy of uniformity.
Section 7 of the Norris-LaGuardia Act provides
that an employer obtaining an injunction must post a
bond to compensate the union for any loss, expense or
damage caused by the improvident or erroneous issu-
ance of the-injunction, including attorneys’ fees incurred
in defending against the injunction. While, as this Court
noted in Beys Markets (398 U.S. at p. 247, n. 15), one
half of the states have enacted so-called “little Norris-
LaGuardia Acts”, only eight of them have bond pro-
visions expressly requiring the payment of attorneys’
a
12
Reasons for Granting Writ.
fees as in § 7 of the Norris-LaGuardia Act.7 Thus,
the decision of the Court of Appeals will serve to re-
create the very lack of uniformity found offensive in
Boys Markets and, at least in those states which do not
have bond provisions similar to §7 of Norris-LaGuardia,
will undoubtedly cause a return to the use of removal
proceedings under 28 U.S.C. §1441 and to maneuvering
from one court to another which will, again, “frustrate
any relative uniformity in the enforcement of arbitra-
tion agreements” (398 U.S. at 246).
2. In deciding that the respondents were entitled
to recover on the injunction bonds even though there has
not been a decision on the merits as to petitioners’
right to injunctive relief, the Court of Appeals decided
a federal question in a way which substantially con-
) — flicts with the decision of this Court in Lawrence v. St.
Louis-San Francisco R. Co., 278 U.S. 228 (1929), and
. with the decisions of the Courts of Appeal for the
+ Ninth and District of Columbia Circuits in Janssen v.
Shown, 53 F.2d 608 (9th Cir. 1931), and Meeker v.
Stuart, 298 F.2d 902 (D.C. Cir. 1961), affirming 188
F.Supp. 272 (D.D.C. 1960). These cases all hold that
there can be no recovery of damages caused by the is-
suance Of a preliminary injunction, even if set aside,
unless final judgment after trial is in favor of the party
who has been enjoined. See, also, Madison Shipping
7. See Hawaii Rev. Laws, Act 200, §7, L. (1963);
’ Mass. Laws Ann., ch. 214, §9A (1955); Minn. Stat. Ann.,
No. 13A, §185.13 1966); N.J. Stat. Ann., 2A, Ch. 15,
§52 (1952); N.Y. Consol. Laws, Lab. §807.3 (McKinney
Supp. 1965) ; Nth. Dak. Cent. Code Ann., Vol. 7, 34-08-08
(1961); Pa. Stat. Ann., tit. 43, §206 (j) (1964); and
Utah Code Ann., 34-19-5 (1971).
13
Reasons for Granting Writ.
Corp. v. National Maritime Union, 204 F.Supp. 22 (E.D.
Pa. 1962).
The Court of Appeals improperly concluded that
the effect of the stipulation of July 10, 1970, continuing
the hearing on petitioners’ application for a preliminary
injunction, was to end the lawsuit because by then the
work stoppage complained of had ceased. In essence,
then, the Court of Appeals treated the case as being
moot. It is well settled, however, that an issue remains
“live” unless subsequent events make it absolutely clear
that the alleged wrongful behavior could not reason-
ably be expected to recur: United States v. Concentrated
Phosphate Export Ass’n., Inc., 393 U.S. 199, 203 (1968) ;
Pacific Maritime Ass’n., v. International Longshore.
& W.U., 454 F.2d 262 (9th Cir. 1971) ; Friend v. United
States, 388 F.2d 579, 581 (D.C. Cir. 1967). Moreover,
the fact that answers and counterclaims have been
filed by respondents after the renewed hearing on the
application for a preliminary injunction was continued
indefinitely demonstrates beyond any question that the
lawsuit has not ended.
*
3. The decision of the Court of Appeals permitting
respondents to recover for attorneys’ fees and expenses,
a liability not specified in the injunction bond, is in
direct conflict with the decision of the Eighth Circuit
in International Ladies Garment Workers’ Union v.
Donnelly Garment Co., 147 F.2d 246 (8th Cir. 1945) cert.
denied, 325 U.S. 852 (1945).
In the present case, the injunction bonds were
pested by petitioners pursuant to Federal Rule 65(c)
and, in conformity with the requirements of this rule,
were conditioned to pay “costs and damages” incurred
14
Reasons for Granting Writ.
by any party found to have been wrongfully enjoined.
The District Court did not require, and the bonds did
not contain, any undertaking to pay reasonable attor-
neys’ fees and expenses as provided in § 7 of the Nor-
ris - LaGuardia Act, and no objection was raised by
respondents to the terms and conditions of the bond.
Neverthéléss, the Court of Appeals, contrary to the de-
cision of the Eighth Circuit in Donnelly, supra, con-
cluded that the provisions of § 7 of the Norris-LaGuar-
dia Act must be read into a bond filed in a § 301 injunc-
tion action, and held that respondents were, therefore,
entitled to recover attorneys’ fees and expenses under
the injunction bond. The Third Circuit expressly de-
clined to follow and apply the Eighth Circuit’s decision
in the Donnelly case, because, in its view, which it ar-
rived at by tortured and erroneous reasoning, Donnelly
and other cases which have followed it “are based upon
a misinterpretation in Heiser [v. Woodruff, 128 F.2d
178 (10th Cir. 1942) ] of the holdings of Tullock v. Mul-
vane [184 U.S. 497 (1902) ] and Oelrichs v. Spain [82
U.S. 211 (1872)]”. The Court of Appeals cites no au-
thority for its holding that a bond posted in a § 301
8. The Court of Appeals also recognized that its
decision conflicted with Madision Shipping Corp. v. Na-
tional Maritime Union, 204 F.Supp. 22 (E.D. Pa. 1962),
and Duke Power Co. v. Greenwood County, 25 F.Supp.
419 (W.D.S.C. 1938). See, also, Powelton Civic Home
Owners Ass’n. v. H.E.W., 284 F.Supp. 809 (E.D Pa.
1968), and Monolith Portland Midwest Co. v. Recon-
struction Finance Corp., 128 F.Supp. 824, 878 (S.D. Cal.
1955) , which the Court of Appeals regarded as not being
in point on the interpretation of the bond, while con-
ceding that they support the proposition that attorneys’
fees are not ordinarily an element of damages in the
federal courts (Appendix E, p. 52, n. 5).
VIPS TN SP NEN EERE PTE NII IRL VIN a8) Tt
15
Reasons for Granting Writ.
injunction action conditioned to pay “costs and dam-
ages” must be construed to include liability for attor-
neys’ fees and expenses by virtue of § 7 of the Norris-
LaGuardia Act, and there is none. It is appropriate for
this Court to resolve the conflict between the Third and
the Eighth Circuit on this important issue, since the
decision on this question will materially affect the type
of bond to be given in every § 301 suit for injunctive
relief in a federal court.
4. The decision of the Court of Appeals is also in
direct conflict with the decision of the Eighth Circuit
on the issue of whether respondents are entitled to re-
cover an amount in excess of that specified in the in-
junction bonds. These bonds were posted pursuant to
‘Federal Rule 65 (c) and approved by the District Court
(R.86a). No effort was ever made by respondents to ob-
tain an increase in the amount of these bonds.9 In spite
of this, the Court of Appeals conciuded that petitioners
were liable to respondents for an amount substantially
in excess of the limits of the bonds which had been
posted.
The Court of Appeals again recognized that its
decision on this question was in conflict with the de-
cision of the Eighth Circuit in International Ladies Gar-
ment Workers’ Union v. Donnelly Garment Co., supra,
and with an earlier decision of the Eighth Circuit in
United Motors Service v. Tropic-Aire, 57 F. 2d 479 (8th
Cir. 1932), which the Third Circuit expressly declined
to follow on the grounds that the Eighth Circuit had
“misapprehended the holdings of the Supreme Court
9. 7 Moore’s Federal Practice, 65.09, p. 1657 (2nd
ed., 1971).
16
Reasons for Granting Writ.
cases on which it relied” (Appendix E, p. 54). The Don-
nelly case holds that the monetary amount of an injunc-
tion bond, whether posted pursuant to Federal Rule 65
(c) or § 7 of the Norris-LaGuardia Act, is the limit of a
plaintiff’s liability and the measure of a defendant’s
protection for the wrongful issuance of an injunction.
The United Motors Service case is to the same effect as
to a bond posted under Federal Rule 65 (c) as is West
v. Zurhorst, 425 F.2d 919 (2nd Cir. 1970), and Atomic
Oil Co. of Oklahoma, Inc. v. Bardahl Oil Company, 419
F.2d 1097 (10th Cir. 1969).
The Third Circuit, asserting that no Supreme Court
authority had been called to its attention holding that
the liability of a plaintiff who has been improperly
granted an injunction is limited to the amount of the
bond he furnished, found the authority of the Eighth
Circuit in Donnelly on this issue “unpersuasive” (Ap-
pendix E, p. 57).
The reasoning of the Third Circuit in reaching the
conclusion that respondents are not limited to the
amount of injunction bonds is far more unpersuasive.
It starts with the wholly unfounded assertion that the
Donnelly approach “would rule out any liability for
wrongfully obtaining an injunction in any case where
the court did not require the posting of a bond” (Ap-
pendix E. p. 57). What the Court of Appeals completely
overlooked is the fact that no injunction issued under
Federal Rule 65 is effective unless and until an injunc-
tion bond is posted pursuant to Federal Rule 65(c). As
the Court of Appeals for the Tenth Circuit aptly ob-
served in Atomic Oil Co. of Oklahoma, Inc. v. Bardahl
Oil Company, 419 F.2d 1097, 1100 (10th Cir. 1969):
TROY Get CULPA RAT APTN OOM TZ TIGR
—
17
Reasons for Granting Writ.
“Rule 65(c) states in mandatory language that the giv-
ing of security is an absolute condition precedent to
the issuance of a preliminary injunction.”
Moreover, the Court of Appeals’ effort to distin-
guish the holdings of the cases upon which Donnelly re-
lied is itself erroneous. Thus, Lawrence v. St. Louwis-
San Francisco R. Co., 278 U.S. 228 (1929), is not a state
court proceeding as the Court of Appeals asserts (Ap-
pendix E, p. 56), but involved a preliminary injunction
issued by a federal court.19
Therefore, the decision of the Third Circuit holding
petitioners liable for an amount in excess of that speci-
fied in the injunction bonds posted pursuant to Federal
Rule 65(c) has created a serious conflict on a highly
important question which this Court should resolve.
5. Quite apart from the conflict in the circuits
created by the holding that petitioners are liable for an
amount in excess of the injunction bonds, the basis upon
which the Court of Appeals arrived at this result in-
volves a serious misinterpretation of the language of § 7
of the Norris-LaGuardia Act and of the intent of Con-
10. Similarly, the Court of Appeals misread Elgin
J. & E. Ry. Co. v. Brotherhood of Railroad Trainmen, 302
F.2d 540 (7th Cir. 1962), as standing for the proposition
that the plaintiff’s liability under § 7 of Norris-LaGuar-
dia is open ended. It came to this conclusion because its
reading of the circuit court and district court opinions
did not disclose whether a bond was filed or, if so, in
what amount (Appendix E, p. 59). Actually, as the
opinion of the district court clearly shows, the plaintiff
there did post an injunction bond which provided the
basis for recovery: Elgin J. é E. Ry Co. v. Brotherhood
gr tony Trainmen, 196 F.Supp. 158, 167 (N.D. II.
ote
Po PALO RPP erty Epes , Oe TPR SE NN REE RT oe
—7
18
Reasons for Granting Writ.
gress in adopting the bond provision. The key language
is that “[n]o temporary restraining order or temporary
injunction shall be issued except on condition that com-
plainant shall first file an undertaking with adequate
security in an amount to be fixed by the court sufficient
to recompense those enjoined from any loss, expense or
damage caused by the improvident or erroneous is-
suance of such order or injunction, including all rea-
sonable costs (together with a reasonable attorney’s
fee) and expense of defense against the order... .”
(Appendix F, p. 66).
The Court of Appeals erroneously interpreted this
language to mean that the court is to fix the amount
of “adequate security” but not the extent of the com-
plainant’s “undertaking”. This construction of § 7 leaves
the plaintiff’s liability completely open ended and is in
direct conflict with the Eighth Circuit’s decision in Don-
nelly that even under § 7 of the Norris-LaGuardia Act
the liability of the plaintiff is limited to the penal sum
of the injunction bond.
Properly read, the quoted language from § 7 means
that the complainant must file “an undertaking .. . in
an amount to be fixed by the court”, and the words
“with adequate security” are intended to modify the
word “undertaking”. So interpreted, the injunction bond
is the limit of the plaintiff's liability.
This construction is not only consistent with the
plain language of § 7 but is also supported by the legis-
lative history of the Act. Thus, Wisconsin Senator John
J. Blaine, one of the authors of the Act, in reporting on
the bill to the Senate on February 24, 1932, stated:
19
Reasons for Granting Writ.
“ ... Finally, before such an order may be issued
the complainants must furnish a bond sufficient
to indemnify the defendants against any loss and
expense, including costs and attorneys fees, result-
ing from the issuance of the temporary restraining
order if it is not sustained after a hearing.” 72
Cong. Rec. 4630 (1932) (Remarks of Senator
Blaine).
There is not the slightest suggestion ir the legis-
lative history of § 7 of the Norris-LaGuardia Act that
Congress intended a plaintiff’s liability on the “under-
taking” to be open ended. As dissenting Judge Kalodner
so aptly pointed out, the majority’s construction of
§ 7 as permitting the respondents to recover in full
their attorneys’ fees and expenses in the same proceed-
ings in which the injunction bonds were issued, even
though they substantially exceed the aggregate amounts
of the posted injunction bonds, is nothing more than
impermissible judicial legislation, which clearly trans-
gresses the procedural scheme of § 7.
ae
CONCLUSION
For the foregoing reasons, it is respectfully sub-
mitted that this petition for a writ of certiorari should
be granted.
NICHOLAS UNKOVIC
LEONARD L. SCHEINHOLTZ
HARLEY N. Trice I
REEep SurrH SHAW & McCLay
747 Union Trust Building
Pittsburgh, Pennsylvania 15219
Counsel for Petitioner, Bethlehem
Mines Corporation
CLYDE W. ARMSTRONG
RALPH T. DESTEFANO
THorP, REED & ARMSTRONG
2900 Grant Building
Pittsburgh, Pennsylvania 15219
Counsel for Petitioner, Republic
Steel Corporation
21
Appendiz A.
APPENDIX A
In THE
UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
| Civil Action
UNITED STATES STEEL CORPORATION, Nos.
et al. 70-724
v. > 70-725
UNITED MINE WoRKERS, et al. 70-727
70-728
Opinion
In these consolidated civil actions, the immediate
matters before the Court are Motions for defendants for
an award of reasonable costs, expenses and attorney
fees. One group of attorneys have entered their ap-
pearances on behalf of the defehdant Union, all of its
Districts and Locals, and all of the individual defend-
ants. The second group have entered their appearances
in Civil Action 70-724 on behalf of Local 1248, in Civil
Action 70-725 on behalf of Local 762, in Civil Action 70-
727 on behalf of Local 762 and individual defendants
Monborne and Krawitz, and in Civil Action 70-728 on
behalf of defendant Trbovich. The defendants seek only
those costs, expenses and attorney fees incurred in op-
posing plaintiffs’ requests for preliminary injunctions
in this Court on June 23, 24 and 25, 1970 and in appeal-
ing to the Circuit Court of Appeals from the Order of
22
Appendix A.
this Court dated June 25, 1970, granting the preliminary
relief sought.!
The Court has conducted a hearing upon the Mo-
tions and considered the briefs and arguments of coun-
sel. It is concluded that the Motions should be denied.
The actions sought to invoke the Court’s jurisdic-
tion under § 301 of the Labor-Management Relations
Act of 1947, as amended, 29 U.S.C. §185. Plaintiffs re-
quested preliminary injunctive relief compelling the
cefendants to cease from engaging in a work stoppage
or picketing and to submit to the Settlement of Local
and District Disputes provision of the National Bitumi-
nous Coal Wage Agreement of 1968.
Consolidated evidentiary hearings were conducted,
arguments heard and briefs submitted during all of
which time the aforementioned counsel represented the
defendants. The Court entered Orders granting the plain:
tiffs’ prayers for preliminary injunctions against all of
the defendants named therein, and approved bonds in
the amount of one thousand dollars, each conditioned as
follows:
“NOW, the condition of this obligation is such,
that the plaintiff shall be liable to the defendants
for such costs and damages, not exceeding the sum
of $1,000.00, as defendants or any other person may
sustain by reason of the Preliminary Injunction, if
1. By stipulation, the parties have agreed that
costs and expenses have been advanced by Mr. Engle in
the amount of $730.94 and that reasonable attorney fees
for services rendered by Mr. Engle are $3,380.00; by
Mr. Owens, $1,120.00; by Mr. Joseph A. Yablonski,
$3,580.00; by Mrs. Feldman, $1,640.00, and by Mr. Ken-
neth J. Yablonski, $900.00.
EOI LE NE ENS LAREN LON LE ELIE ELE IE ELLER
23
Appendix A.
the Court finally decides that plaintiff is not en-
titled thereto.”
Subsequent to the original decree, the Court en-
tered a modifying order so as to exclude from the terms
of the preliminary injunctions the defendant Interna-
tional Union.
In granting the preliminary injunctions it was con-
cluded that the collective bargaining agreement pro-
vided a procedure, ultimately resulting in arbitration,
which the parties to the agreement contemplated would
be utilized to resolve a dispute of the nature in question.
Appeals from the Orders granting preliminary in-
junctions were perfected by all counsel for the defend-
ants and the Court of Appeals reversed and remanded.
In its Memorandum the Court stated:
“We therefore summarily reverse and remand these
cases to the district court without prejudice to a
request for a hearing de novo on the application for
a preliminary injunction. We emphasize that we
have not reached the issue of the merits of the re-
quest for a prelimimary injunction.” (Emphasis
supplied. ) 7
After remand, the plaintiffs requested a de novo
hearing upon the applications for preliminary injunc-
tions. The hearing was conducted and the parties stipu-
lated to an indefinite continuance of the hearing upon
conditions agreed to by the parties.
The question presented is whether the defendants
are entitled to costs, expenses and reasonable attorney
fees incurred in opposing the requests for preliminary
injunctions in this Court and in prosecuting their suc-
cessful appeals.
—-
Appendix A.
The Order of the Court of Appeals prescribes that
each party is to bear its own costs. This determination is
dispositive of the question of costs on appeal and can-
not be reconsidered here. It is also proper to infer from
the aforementioned Order that each party is to bear
his or its own expenses and attorney fees incurred on
appeal.
There remains for consideration defendant’s re-
quests for costs, expenses and attorney fees incurred by
the defendants in opposing the requests for prelimi-
nary injunctions in this Court. I conclude this request is
prematurely made. It is the generally followed federal
rule that there can be no recovery of damages caused by
a preliminary injunction even if set aside, unless final
judgment after trial is in favor of the party who has
been enjoined. Madison Shipping Corp. v. National Mari-
time Union, 204 F. Supp. 22, 23 (E.D. Pa. 1962) ; Meek-
er v. Stuart, 188 F. Supp. 272, 276 (D. D. C. 1960),
aff'd, 289 F. 902 (D. C. Cir. 1961), and cases cited
therein; 3 Barron & Holtzoff, Fed. Prac. & Proced.
§ 1435 (1958).
There has been no final determination of plaintiffs’
claims for injunctive relief. The Court of Appeals ex-
pressly reversed the trial court on procedural grounds
alone and did not reach or consider the merits of the
lower court’s decrees. Due to the agreement and stipu-
lation of counsel for the parties, the merits of plaintiffs’
requests have not been reached by this Court. In the
present posture of the case, the requests for both pre-
liminary and final injunctive relief remain pending
before the Court. Absent any final determination upon
the merits of the requests for injunctive relief, defend-
ants are not entitled to recover.
@ SOLS TENO E \,
PARR REPOS? 3 SSS eh “ -
7 . a Tali —
25
Appendiz A.
This conclusion now made renders it unnecessary
for the Court to decide whether the terms of Section 7
of the Norris-LaGuardia Act, 29 U.S.C. A. § 107, requir-
ing security for reasonable attorneys’ fees and legal ex-
penses, must be read into a bond filed precedent to the
issuance of an injunction against concerted activity al-
leged to be in violation of a collective bargaining agree-
ment. ‘
An appropriate Order is entered.
Order.
Now, this 30th day of September 1970, defendants’
Motions for costs, expenses and attorney fees are here-
by denied without prejudice to their right to re-submit
similar motions should the outcome of the proceedings
warrant the same.
/3/ WALLACE S. GOURLEY, SDJ,
Senior District Judge.
Appendiz B.
APPENDIX B
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
UNITED STATES STEEL CORPORATION, 7}
Plaintiff, cts ;
ge Civil Action
° >
UNITED MINE WoRKERS OF AMERICA, No. 70-724
et al., Defendants. ;
JONES & LAUGHLIN STEEL CORPORATION, )
Plaintiff, — ?
? Civil Action
. ~
UNITED MINE WoRKERS OF AMERICA, No. 70-725
et al., Defendants.
BETHLEHEM MINES CORPORATION
aaa Civil Action
: >
UNITED MINE WORKERS OF AMERICA, No. 70-727
et al., Defendants.
REPUBLIC STEEL CORPORATION, 7
— Civil Action
. >
UNITED MINE WORKERS OF AMERICA, No. 70-728
et al., Defendants.
eee
\
Memorandum Opinion
Presently before the Court is a Motion of certain of
the defendants requesting reconsideration of the Order
of this member of the Court dated September 30, 1970
BS DES LER STS OD LEELA TES IIT RES IP |
27
Appendix B.
denying the motion of all defendants for costs, expenses
and attorneys’ fees. In the Court’s Opinion filed with the
aforesaid Order, it was concluded that defendants were
precluded from recovering costs, expenses and attorneys’
fees incurred on appeal from the Order of this Court
dated June 25, 1970, since the Order of the Court of Ap-
peals specifically provided that each party was to bear
his own costs of the appeal. Also, it was concluded that
defendants’ requests for costs, expenses and attorneys’
fees incurred in this Court prior to the appeal were pre-
mature, since there had been no final determination of
the merits of plaintiffs’ claim for injunctive relief.
Defendants’ filing the instant Motion for Recon-
sideration requested that this Court defer ruling upon
the Motion until the Court of Appeals had acted upon
defendants’ request therein for a clarification of its
Order reversing the Order of this Court dated June 25,
1970. Upon consideration of defendant’s Motion for
Clarification, the Court of Appeals denied the same on
October 20, 1970. This decision of the Court of Appeals
provides no basis for reconsideration here.
Defendants also assert as & basis for reconsidera-
tion the oral statements made by this member of the
Court at a hearing conducted upon defendants’ Motions
to Dismiss on September 22, 1970, wherein the Court in-
dicated that it might favorably entertain the request of
defendants for dismissal of plaintiffs’ claims for in-
junctive relief. For reasons stated in an Opinion filed
on December 16, 1970, the Court has deemed it appro-
priate to retain jurisdiction of the claims for injunc-
tive relief. However, even if the claims for injunctive
relief had been dismissed, the dismissals would have
been based upon an event occurring subsequent to the
28
Appendiz B.
filing of the requests for preliminary injunctive relief,
i.e., the return of the men to work. The Court fails to see
how dismissals founded upon such changed circum-
stances could reflect upon the propriety of plaintiffs’
original requests for preliminary injunctions restrain-
ing work stoppages existing at the time of the filing
thereof.
Accordingly, reconsideration will be denied. An
appropriate order is entered.
Order.
Now, this 16th day of December 1970, defendants’
Motion for Reconsideration is denied.
WALLACE S. GOURLEY
Senior District Judge
A LRN EY IN NG MER HT TH MORN EP GPS" TI
Appendix C.
APPENDIX C
UNITED STATES COURT OF APPEALS
FoR THE THIRD CIRCUIT
Nos. 71-1154 through 71-1157
BETHLEHEM MINES CORPORATION
Vv.
UNITED MINE WORKERS OF AMERICA; DISTRICT
2, UNITED MINE WORKERS OF AMERICA, OWEN
F. SLAGEL, President; UNITED MINE WORKERS OF
AMERICA LOCAL NO. 1386, CHARLES KRAWETZ,
President; UNITED MINE WORKERS OF AMERICA
LOCAL NO. 850, EDWARD F. MONBORNE, President;
UNITED MINE WORKERS OF AMERICA LOCAL NO.
1368, THOMAS WATSON, President; UNITED MINE
WORKERS OF AMERICA LOCAL NO. 6394, JOSEPH
T. MUCKO, JR., President; UNITED MINE WORKERS
OF AMERICA LOCAL NO. 6411, ROBERT C. BROWN,
President; DISTRICT 5, UNITED MINE WORKERS OF
AMERICA, MICHAEL BUDZANOSKI, President;
UNITED MINE WORKERS OF AMERICA LOCAL NO.
1190, CHARLES WASHLACK, President; UNITED
MINE WORKERS OF AMERICA LOCAL NO. 2874,
STANLEY C. WERSTLER ,President; UNITED MINE
WORKERS OF AMERICA, LOCAL NO. 1197,
JOHN A. DZIAK, President.
LOCAL UNION NO. 1197, Appellant in No. 71-1154
EDWARD MONBORNE, Appellant in No. 71-1155
CHARLES KRAWITZ, Appellant in No. 71-1156
Appendix C.
REPUBLIC STEEL CORPORATION
v.
UNITED MINE WORKERS OF AMERICA; DISTRICT
4, UNITED MINE WORKERS OF AMERICA; DIS-
TRICT 5, UNITED MINE WORKERS OF AMERICA;
UNITED MINE WORKERS OF AMERICA LOCAL NO.
9873; UNITED MINE WORKERS OF AMERICA
LOCAL NO. 688.
MIKE TRBOVICH, Appellant in No. 71-1157
APPEALS FROM THE UNITED STATES DISTRICT COURT
FoR THE WESTERN DISTRICT OF PENNSYLVANIA
Submitted under 3rd Cir. Rule 12(6) January 18, 1972
Before SEITz, Chief Judge, KALODNER AND GIBBONS,
Circuit Judges
” ins LLLP LOLOL LO LOAM LOLI LIE LI OLIN PTT EE I et
31
Appendix C.
OPINION OF THE COURT
(Filed February 28, 1972)
PER CURIAM:
Appellants, United Mine Workers of America and
individual union members appeal from the order of the
district court denying their motion for costs, expenses
and attorneys’ fees. The circumstances giving rise to
this appeal are factually and legally the same as those
in United States Steel Corp. v. United Mine Workers,
Civil Nos. 19,454—19,481 (3d Cir., filed Feb. 3, 1972).
The order of the district court wil) be reversed and the
cases remanded to the district court for the entry of a
judgment consistent with that opinion awarding the
stipulated attorneys’ fees and the stipulated expenses
except for statutory costs on the prior appeal.
Appellee Republic Steel Corporation has moved to
dismiss the appeal of appellant Trbovich. Republic con-
tends that Trbovich is no longer a party to the action
because Republic had voluntarily dismissed its com-
plaint against him and that Trbovich was never brought
within the jurisdiction of the gourt because he was not
served with process in the original action. Trbovich was
bound by the terms of the injunction order and, so bound,
he appealed. No issue as to his standing was raised on
the original appeal in which he was successful. The
plaintiff cannot after his successful appeal deprive him
of reimbursement for attorneys’ fees and costs by a
voluntary dismissal. The motion to dismiss his appeal
will be denied and the case remanded for proceedings
consistent with this opinion.
32
Appendiz C.
KALODNER, Circuit Judge, Concurring in Part and Dis-
senting in Part:
I agree with the reversal of the District Court's
Order.
I also agree with the denial of the motion to dismiss
the appeal of the appellant Trbovich, filed by the ap-
pellee Republic Steel Corporation.
I disagree, however, with the majority’s direction
to the District Court to enter a judgment in the instant
proceedings, awarding the stipulated attorneys’ fees and
expenses, for the reason stated in my Concurring-in-
Part and Dissenting-in-Part Opinion in United States
Steel Corp. v. United Mine Workers of America, Civil
Nos. 19,454 through 19,458, filed February 3, 1972.
I would reverse the District Court’s Order with di-
rections to enter a judgment awarding the defendants
below the amount of the injunction bonds posted by the
plaintiffs, in the event that the defendants do not choose
to exercise their right to withdraw their pending Motion
for allowance of the stipulated attorneys’ fees and
expenses.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
Appendiz D.
APPENDIX D
UNITED STATES COURT OF APPEALS
For THE THIRD CIRCUIT
Nos. 71-1154 through 71-1157
BETHLEHEM MINES CORPORATION
Vv.
UNITED MINE WORKERS OF AMERICA; DISTRICT
2, UNITED MINE WORKERS OF AMERICA, OWEN
F. SLAGEL, President; UNITED MINE WORKERS OF
AMERICA LOCAL NO. 1386, CHARLES KRAWETZ,
President; UNITED MINE WORKERS OF AMERICA
LOCAL NO. 850, EDWARD F. MONBORNE, President;
UNITED MINE WORKERS OF AMERICA LOCAL NO.
1368, THOMAS WATSON, President; UNITED MINE
WORKERS OF AMERICA LOCAL NO. 6394, JOSEPH
T. MUCKO, JR., President; UNITED MINE WORKERS
OF AMERICA LOCAL NO. 6411, ROBERT C. BROWN,
President; DISTRICT 5, UNITED MINE WORKERS
OF AMERICA, MICHAEL BUDZANOSKI, President;
UNITED MINE WORKERS OF AMERICA LOCAL NO.
1190, CHARLES WASHLACK, President; UNITED
MINE WORKERS OF AMERICA LOCAL NO. 2874,
STANLEY C. WERSTLER, President; UNITED MINE
WORKERS OF AMERICA LOCAL NO. 1197,
JOHN A. DZIAK, President
LOCAL UNION NO. 1197, Appellant in No. 71-1154
EDWARD MONBORNE, Appellant in No. 71-1155
CHARLES KRAWITZ, Appellant in No. 71-1156
(D. C. Civil Action No. 70-727)
i... i ih alae a RR tne Ae ee ae aie
Appendiz D.
REPUBLIC STEEL CORPORATION
v.
UNITED MINE WORKERS OF AMERICA; DISTRICT
4, UNITED MINE WORKERS OF AMERICA; DIS-
TRICT 5, UNITED MINE WORKERS OF AMERICA;
UNITED MINE WORKERS OF AMERICA LOCAL NO.
9873; UNITED MINE WORKERS OF AMERICA
LOCAL NO. 688
MIKE TRBOVICH, Appellant in No. 71-1157
(D. C. Civil Action No. 70-728)
APPEALS FROM THE
UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
Present: Seitz, Chief Judge and KALODNER and GIBBONS,
Circuit Judges
Judgment
This cause came on to be heard on the record from
the United States District Court for the Western Dis-
trict of Pennsylvania and was submitted under Third
Circuit Rule 12(6).
On consideration whereof, it is now here ordered
and adjudged by this Court that the order of the said
District Court, filed September 30, 1970, be, and the
same is hereby reversed, and the cause remanded to the
said District Court for the entry of a judgment consist-
ent with this Court’s opinion in our cases numbered
19454 through 19481 inclusive, United States Steel Corp.
v. United Mine Workers, filed February 3, 1972, which
—
35
Appendix D.
opinion awarded the stipulated attorneys’ fees and the
stipulated expenses except for statutory costs on those
prior appeals, all in accordance with the opinion of this
Court in the above-entitled cases. Costs taxed against
appellees.
ATTEST :
THOMAS P. QUINN
Clerk
February 28, 1972
— ; = SE ag Se oe SRR eg
Appendix E.
APPENDIX E
UNITED STATES COURT OF APPEALS
FoR THE THIRD CIRCUIT
Nos. 19,454 through 19,458
UNITED STATES STEEL CORPORATION
v.
UNITED MINE WORKERS OF AMERICA; DISTRICT
4, UNITED MINE WORKERS OF AMERICA; DIS-
TRICT 5, UNITED MINE WORKERS OF AMERI-
CA; UNITED MINE WORKERS OF AMERICA
LOCAL NO. 6321; UNITED MINE WORKERS OF
AMERICA LOCAL NO. 1248
UNITED MINE WORKERS OF AMERICA
Appellant in 19,454
DISTRICT 4, UNITED MINE WORKERS OF
AMERICA
Appellant in 19,455
‘ DISTRICT 5, UNITED MINE WORKERS OF
AMERICA
: Appellant in 19,456
i UNITED MINE WORKERS OF AMERICA
‘ LOCAL NO. 6321
Appellant in 19,457
UNITED MINE WORKERS OF AMERICA
LOCAL NO. 1248
Appellant in 19,458
PLETE LER OIE IT EE
Appendix E.
Nos. 19,459 through 19,465
JONES & LAUGHLIN STEEL CORPORATION
v.
UNITED MINE WORKERS OF AMERICA; DISTRICT
4, UNITED MINE WORKERS OF AMERICA; DIS-
TRICT 5, UNITED MINE WORKERS OF AMERI-
CA; UNITED MINE WORKERS OF AMERICA
LOCAL NO. 2399; UNITED MINE WORKERS OF
AMERICA LOCAL NO. 762; UNITED MINE
WORKERS OF AMERICA LOCAL NO. 6159;
UNITED MINE WORKERS OF AMERICA LOCAL
NO. 6330
UNITED MINE WORKERS OF AMERICA
Appellant in 19,459
DISTRICT 4, UNITED MINE WORKERS OF
AMERICA
Appellant in 19,460
DISTRICT 5, UNITED MINE WORKERS OF
AMERICA
Appellant in 19,461
UNITED MINE WORKERS OF AMERICA
LOCAL NO. 2399
Appellant in 19,462
UNITED MINE WORKERS OF AMERICA
LOCAL NO. 762
Appellant in 19,468
UNITED MINE WORKERS OF AMERICA
LOCAL NO. 6159
Appellant in 19,464
UNITED MINE WORKERS OF AMERICA
LOCAL NO. 6330
Appellant in 19,465
Appendiz E.
Nos. 19,466 through 19,476
BETHLEHEM MINES CORPORATION
v.
UNITED MINE WORKERS OF AMERICA; DISTRICT
2, UNITED MINE WORKERS OF AMERICA,
OWEN F. SLAGEL, President; UNITED MINE
WORKERS OF AMERICA LOCAL NO. 1386,
CHARLES KRAWETZ, President; UNITED MINE
WORKERS OF AMERICA LOCAL NO. 850, ED-
WARD F. MONBORNE, President; UNITED
MINE WORKERS OF AMERICA LOCAL NO.
1368, THOMAS WATSON, President; UNITED
MINE WORKERS OF AMERICA LOCAL NO.
6394, JOSEPH T. MUCKO, JR., President;
UNITED MINE WORKERS OF AMERICA LOCAL
NO. 6411, ROBERT C. BROWN, President; DIS-
TRICT 5, UNITED MINE WORKERS OF AMERI-
CA, MICHAEL BUDZANOSKI, President;
UNITED MINE WORKERS OF AMERICA LOCAL
NO. 1190, CHARLES WASHLACK, President;
UNITED MINE WORKERS OF AMERICA LOCAL
NO. 2874, STANLEY C. WERSTLER, President;
UNITED MINE WORKERS OF AMERICA LOCAL
NO. 1197, JOHN A. DZIAK, President
UNITED MINE WORKERS OF AMERICA
Appellant in 19,466
DISTRICT 2, UNITED MINE WORKERS OF
AMERICA, OWEN F. SLAGEL, President,
3 Appellant in 19,467
UNITED MINE WORKERS OF AMERICA
LOCAL NO. 1386, CHARLES KRAWETZ,
President, Appellant in 19,468
39
Appendix E.
UNITED MINE WORKERS OF AMERICA
LOCAL NO. 850, EDWARD F. MONBORNE,
President,
Appellant in 19,469
UNITED MINE WORKERS OF AMERICA
LOCAL NO. 1368, THOMAS WATSON,
President,
Appellant in 19,470
UNITED MINE WORKERS OF AMERICA
LOCAL NO. 6394, JOSEPH T. MUCKO, JR.
President
Appellant in 19,471
UNITED MINE WORKERS OF AMERICA
LOCAL NO. 6411, ROBERT C. BROWN,
President,
Appellant in 19,472
DISTRICT 5, UNITED MINE WORKERS OF
AMERICA, MICHAEL BUDZANOSKI,
President,
Appellant in 19,473
UNITED MINE WORKERS OF AMERICA
LOCAL NO. 1190, CHARLES WASHLACK,
President,
Appellant in 19,474
UNITED MINE WORKERS OF AMERICA
LOCAL NO. 2874, STANLEY C. WERST-
LER, President,
Appellant in 19,475
UNITED MINE WORKERS OF AMERICA
LOCAL NO. 1197, JOHN A. DZIAK,
President,
Appellant in 19,476
Appendix E.
Nos. 19,477 through 19,481
REPUBLIC STEEL CORPORATION
v.
UNITED MINE WORKERS OF AMERICA; DISTRICT
4, UNITED MINE WORKERS OF AMERICA; DIS-
TRICT 5, UNITED MINE WORKERS OF AMERI-
CA; UNITED MINE WORKERS OF AMERICA
LOCAL NO. 9873; UNITED MINE WORKERS OF
AMERICA LOCAL NO. 688
UNITED MINE WORKERS OF AMERICA
Appellant in 19,477
DISTRICT 4, UNITED MINE WORKERS OF
AMERICA
Appellant in 19,478
DISTRICT 5, UNITED MINE WORKERS OF
AMERICA
Appellant in 19,479
UNITED MINE WORKERS OF AMERICA
LOCAL NO. 9873
Appellant in 19,480
UNITED MINE WORKERS OF AMERICA
LOCAL NO. 688
Appellant in 19,481
APPEALS FROM THE UNITED STATES DISTRICT COURT
For THE WESTERN DISTRICT OF PENNSYLVANIA
Argued December 1, 1971
Before SEITZ, Chief Judge, KALODNER and GIBBONS,
Circuit Judges
41
Appendix E.
Opinion of the Court
(Filed February 3, 1972)
GIBBONS, Circuit Judge.
Appellants, labor unions and individual union mem-
bers, appeal from the order of the district court denying
their motion for costs, expenses, and attorney’s fees.
United States Steel Corp. v. United Mine Workers of
America, 317 F. Supp. 1070 (W.D. Pa. 1970). The dispute
had its genesis in actions filed by the appellees, United
States Steel Corporation, Jones & Laughlin Steel Corpo-
ration, Bethlehem Mines Corporation and Republic Steel
Corporation seeking injunctions against work stoppages
which they alleged were in violation of union contracts
containing “Settlement of Local and District Disputes”
grievance-arbitration procedures. The steel companies
contended that by virtue of §301 of the Labor-Manage-
ment Relations Act of 1947, 29 U.S.C. §185 (1971), the
work stoppages should be enjoined pending resolution
of the underlying disputes through the contract griev-
ance arbitration procedures. After a two-day hearing
the district court entered an order in each case granting
a preliminary injunction. Each order contained the lan-
guage:
“Bond in the amount of $1,000.00 has been ap-
proved and filed with the Court by plaintiff.”
A separate bond, identical in form, was filed by each
plaintiff. The condition of the bond was in each case as
follows:
“WHEREAS, plaintiff has applied for a Prelimi-
nary Injunction against defendanis, enjoining and
restraining them from the commission of certain
acts, as more particularly described in the Com-
“7
plaint; NOW, the condition of this obligation is
such, that the plaintiff shall be liable to the de-
fendants for such costs and damages, not exceed-
ing the sum of $1,000.00, as defendants or any other
person may sustain by reason of the Preliminary
Injunction, if the Court finally decides that plain-
tiff is not entitled thereto.”
Neither the orders granting preliminary injunction nor
the bond in any case made reference to the authority
under which the court required that the bond be posted.
The record discloses no op unity for the defendants
to examine the bond prior to its approval and filing.
Appendix E.
The applications for preliminary injunctions were
strenuously opposed by the defendants who contended
that the work stoppage did not fall within the coverage
of the contract grievance-arbitration provisions. When
the orders were entered defendants promptly appealed.
On their motion we summarily reversed. Bethlehem
Mine Corporation v. United Mine Workers of America,
No. 19,040 (3rd Cir., filed July 2, 1970). That reversal
was on the ground that the district court because of an
erroneous view of the applicable law had effectively de-
nied the parties the opportunity to develop their respec-
tive positions in the abbreviated hearing which it con-
ducted. The preliminary injunction was, therefore, im-
providently granted. We remanded “without prejudice
to a request for a hearing de novo on the application for
a preliminary injunction.” The order on remand speci-
fied, “Each side to bear its own costs.”
After remand the plaintiffs renewed their request
for a preliminary injunction and the district court set
the matter down for a de novo hearing commencing July
9, 1970. Instead of proceeding with the hearing, how-
Pav: NO
43
Appendix E.
ever, the parties with the approval of the district court
entered into a stipulation providing:
“At the hearing, counsel for the respective defend-
ants have represented to the Court that, to their
knowledge, no picketing, work stoppage or strike
exists at present and none is known to be antici-
pated in the immediate future. Also, counsel for the
respective parties have agreed to an indefinite con-
tinuance of the hearing upon the oral stipulation
that plaintiff, in good faith, will utilize its best ef-
forts to comply with the Federal Coal Mine Health
and Safety Act of 1969 and that counsel for the re-
spective defendants, based upon the conditions in
the mines as they are known to exist at present, will
counsel the officers and membership of defendant-
unions to refrain from any work stoppage or picket-
ing at plaintiffs’ mines.
NOW, THEREFORE, this 10th day of July, 1970,
in accordance with the representations and stipula-
tions of counsel, it is hereby Ordered that the hear-
ing upon plaintiffs’ application for preliminary in-
junction be continued until further notice by the
Court.”
The effect of this stipulation, although it purported to
continue the hearing on plaintiffs’ application for a pre-
liminary injunction, was to end the lawsuit for all prac-
tical purposes. By then the work stoppages complained
of had ceased.
On August 14, 1970 the defendants moved for the
award of reasonable costs, expenses and attorneys’ fees.
This claim was based upon §7 of the Norris-LaGuardia
a.
44
Appendix E.
Act, 29 U.S.C. §107 (1971) which in relevant part pro-
vides :
“No temporary restraining order or temporary in-
junction shall be issued except on condition that
complainant shall first file an undertaking with
adequate security in an amount to be fixed by the
court sufficient to recompense those enjoined for
any loss, expense, or damage caused by the im-
provident or erroneous issuance of such order or
injunction, including all reasonable costs (together
with a reasonable attorney’s fee) and expense of
defense against the order or against the granting
of any injunctive relief sought in the same proceed-
ing and subsequently denied in the court.
The undertaking mentioned in this section shall be
understood to signify an agreement entered into by
the complainant and the surety upon which a de-
cree may be rendered in the same suit or proceed-
ing against said complainant and surety, upon a
hearing to assess damages of which hearing com-
plainant and surety shall have reasonable notice,
the said complainant and surety submitting them-
selves to the jurisdiction of the court for that pur-
pose. But nothing in this section contained shall de-
prive any party having a claim or cause of action
under or upon such undertaking from electing to
pursue his ordinary remedy by suit at law or in
equity.”
At the hearing on this motion the parties stipulated the
amount of expenses incurred and the reasonable value
of legal services rendered in opposing the preliminary
45
Appendix E.
injunctions and in procuring their reversal by this
court.! The stipulated fees and expenses exceed $11,350.
00. The four bonds total $4,000.00 The district court de-
nied the motion in its entirety “without prejudice to [de-
fendants’] right to re-submit similar motions should
the outcome of the proceedings warrant the same.” This
appeal followed.
The appellees moved before this court to dismiss
the appeal on the ground that it was interlocutory. An-
other panel denied that motion without opinion, ap-
parently on the ground that the order appealed from, al-
though in form interlocutory, was in practical effect
final on the issue here presented since no further pro-
ceedings would take place in the district court and was
therefore appealable under the “collateral order’ doc-
trine. See Cohen v. Beneficial Industrial Loan Corp., 337
U.S. 541 (1949); Green v. Singer Co., No. 71-1835 (3rd
Cir., filed Nov. 2, 1971). Thus we must treat the appeal
as a final decision denying defendants’ motion for costs,
expenses and attorneys’ fees.
Since the reasonableness of the requested amounts
has been stipulated the only question before us is whe-
ther on legal grounds the district court properly refused
to make an award. Appellees advance several legal con-
tentions in support of that conclusion.
First, appellees contend that because they brought
suit under §301 of the Labor-Management Relations Act
1. The parties have agreed that Mr. Engle ad-
vanced expenses of $730.94 and that a reasonable at-
torney’s fee for his services is $3,380.00; for Mr. Owens,
$1,120.00; for Mr. Joseph Yablonski, $3,580.00; for Mrs.
skeen” $1,640.00; and for Mr. Kenneth J. Yablonski,
900.00.
————— ae
46
Appendiz E.
the procedural provisions of §7 of the Norris-LaGuardia
Act are inapplicable. They urge that there is no war-
rant in law outside §7 for the award of counsel fees in-
curred in setting aside an injunction improvidently is-
sued. As authority for the proposition that §7 is inap-
plicable, appelles cite Boys Markets, Inc. v. Local 770,
Ketail Clerks, 398 U.S. 235 (1970).
Appellees read far too much into the Boys Markets
opinion. In expressly overruling its earlier decision in
Sinclair Refining Co. v. Atkinson, 370 U.S. 195 (1962),
and in approving the analysis of the Sinclair dissent,
the Supreme Court worked out a careful and narrow ac-
commodation between the earlier Norris-LaGuardia
Act and the later Labor-Management Relations Act. It
held only that the express prohibitions against certain
specific injunctions contained in §4 of Norris-LaGuar-
dia, 29 U.S.C. §104, were deemed not to bar injunctions
necessary to accomplish the purposes of the Labor-Man-
agement Relations Act through contract arbitration.
The Court very carefully in Part V of the opinion, 398
" U.S. at 253-55, made clear that it was dealing only with
the prohibition of §4 of Norris-LaGuardia, and then only
in cases where the court first holds that a strike is over
a grievance which both parties are contractually bound
to arbitrate. The opinion says nothing about the proce-
dural steps which must be taken in making that de-
termination or about the safeguards which must sur-
round the issuance of a preliminary injunction.
The thrust of §4 of the Norris-LaGuardia Act is
quite different from that of §7. The former is a list of
injunctive orders which the federal district courts are
flatly prohibited from entering. The latter is essentially
a procedural section. It prohibits the entry of an in-
junction growing out of a labor dispute
ee
47
Appendiz E.
“except after hearing the testimony of witnesses
in open court (with opportunity for cross-examina-
tion) in support of the allegations of a complaint
made under oath, and testimony in opposition
thereto, if offered .. .
Such hearing shall be held after due and personal
notice . . .” 29 U.S.C. § 107.
Certainly the requirements of a verified complaint, no-
tice and a hearing in open court in no way conflict with
the policies of the Labor-Management Relations Act.
Indeed Fep. R. Civ. P. 65(a) requires as much in any
event, Sims v. Greene, 161 F.2d 87 (3rd Cir. 1947),
though that was not so when Norris-LaGuardia was
passed since the federal rules had not yet been enacted.
It was the failure to afford a hearing comporting either
with §7 or with Rule 65(a) which led to the summary
reversal of the preliminary injunction when this case
was first before us.
It may be argued that some of the specific findings
of fact required by §72 are inappropriate for a §301
case. Obviously the Supreme Court thinks that most of
them are quite appropriate, tor in Boys Markets it
2. . and except after findings of fact by the
court, ‘ i effect—
(a) That unlawful acts have been threatened
and will be committed unless restrained or have
been committed and will be continued unless re-
strained, but no injunction or temporary restrain-
ing order shall be issued on account of any threat
or unlawful act excepting against the person or per-
sons, association, or organization making the threat
or committing the unlawful act or actually author-
izing or ratifying the same after actual knowledge
thereof;
PE PE Oa enn pe @ NE EDA ad YORI reparer
a :
=
Appendiz E.
quoted with approval the list of considerations bearing
on the issuance of a §301 injunction first set forth in the
Sinclair dissent.3 The finding “(t]hat the public officers
(b) That substantial and irreparable injury
to complainant’s property will follow;
(c) That as to each item of relief granted
greater injury will be inflicted upon complainant by
the denial of relief than will be inflicted upon de-
fendants by the granting of relief;
(d) That complainant has no adequate reme-
dy at law; and
(e) That the public officers charged with the
duty to protect complainant’s property are unable
or unwilling to furnish adequate protection.”
29 U.S.C. §107.
3. “‘A District Court entertaining an action under
§301 may not grant injunctive relief against
concerted activity unless and until it decides
that the case is one in which an injunction
would be appropriate despite the Norris-La-
Guardia Act. When a strike is sought to be en-
joined because it is over a grievance which both
parties are contractually bound to arbitrate,
the District Court may issue no injunctive or-
der until it first holds that the contract does
have that effect; and the employer should be
ordered to arbitrate, as a condition of his ob-
taining an injunction against the strike. Be-
yond this, the District Court must, of course,
consider whether issuance of an injunction
would be warranted under ordinary principles
of equity — whether breaches are occurring
and will continue, or have been threatened and
will be committed; whether they have caused
or will cause irreparable injury to the em-
ployer; and whether the employer will suffer
more from the denial of an injunction than will
the union from its issuance.’ 370 U.S., at 228.
(Emphasis in original.)” 398 U.S. at 254.
49
Appendix E.
charged with the duty to protect complainant’s property
are unable or unwilling to furnish adequate protection,”
§7(e), 29 U.S.C. §107(e), probably would not be appro-
priate in a §301 case. But this does not mean that the
entire section is inapplicable. It means only that as
with §4 of Norris-LaGuardia §7 must be accommodated
to the policy underlying §301.
For such an accommodation it is unnecessary to
hold inapplicable to §301 cases those parts of §7 dealing
with undertakings for loss, expense, or damage caused
by the improvident or erroneous issuance of an injunc-
tion. It might be argued that by holding those parts of
§7 applicable to §301 suits in the federal courts, we will
impose a chilling effect on the resort by employers to
the courts for enforcement of contract grievance-arbi-
tration clauses. We hardly think so. In most cases the
contract will be so clear one way or the other and the
likelihood of damage to the union from a preliminary
injunction requiring resort to contract arbitration so
slight that the imposition of a §7 undertaking for loss,
expense or damage caused by improvident or erroneous
issuance will imposé¢ no significant burden. Fen. R. Crv.
P. 65(c) imposes an injunction bond requirement in any
case and the only difference between a Rule 65(c) bond
and one issued pursuant to §7 that the appellees have
called to our attention is that the latter includes as an
element of damage a reasonable attorneys’ fee. That at-
torneys’ fee would be paid only if the preliminary in-
junction is found to have been improvidently or er-
roneously issued, that is, where the Court did not hold
a proper hearing or failed to make the factual determi-
nations mandated by Part V of the Boys Markets opin-
ion or where the court erroneously issued a preliminary
a ee ss AE
; ~
50
Appendiz E.
injunction over a labor dispute not covered by the con-
tract grievance-arbitration provision. In any of these
circumstances no necessary accommodation between the
policies of Norris-LaGuardia and of the Labor-Man-
agement Relations Act requires that the union be de-
prived of the award of counsel fees under §7.
Appellees also suggest that if we recognize a lia-
bility for attorneys’ fees in the circumstances of this
case we will be creating a conflict between labor law in
the state courts and labor law in the federal courts
which the Supreme Court in Boys Markets sought to
avoid. This is not so in cases in which a preliminary in-
junction should properly have issued under §301 since
attorneys’ fees in those cases will not be awarded. As
to cases where a preliminary injunction should not have
issued, the recognition in Boys Markets that the Norris-
LaGuardia Act is still in foree may in many states*
result in different law being applied depending on the
state or federal forum. But that is what Congress in-
tended when Norris-LaGuardia was passed and, as the
Supreme Court makes clear in Boys Markets, §301 of
the Labor-Management Relations Act suggests an ac-
commodation, not a repeal.
Thus we hold that the provision in §7 that a plain-
tiff shall file an undertaking for loss, expense or dam-
age, including costs, together with a reasonable attor-
neys’ fee before a preliminary injunction issues in a
4. Though not in all states, New Jersey and Penn-
sylvania, for example, in their counterparts of the Nor-
ris-LaGuardia Act permit the recovery of attorneys’
fees for the erroneous issue of an injunction against a
labor union. See N.J.S.A. 2A: 15-51, 15-52, 15-53; 43 Pa.
Stat. Ann §§206(f), 206(i), 206(j).
—
51
Appendix E.
labor dispute applies in the federal courts even when the
injunction is sought pursuant to §301.
Next appellees contend that even assuming the ap-
plicability of §7 there may be no recovery here because
the bond which was given was improper in form and in
the absence of a proper bond the defendants have suf-
fered damnum absque injuria. There is authority for
appellees’ position. International Ladies’ Garment
Workers’ Union v. Donnelly Garment Co., 147 F.2d 246
(8th Cir. 1945), cert denied, 325 U.S. 852 (1945).
Analysis of appellees’ position requires a subdivi-
sion into several questions.
1. Does the bond which was filed, properly con-
strued, exclude liability for attorneys’ fees?
2. If the bond, properly construed, does not ex-
clude liability for attorneys’ fees, is the lia-
bility of the principal, as distinguished from
the surety, limited to the amount of the bond?
3. If the bond, properly construed, is simply in-
applicable to liability.under §7, does that sec-
tion impose liability on the plaintiffs by its
own operation in the absence of a bond?
The Donnelly case, which is the only authority more or
less directly in point, answers each of these questions
in appellees’ favor. Donnelly possibly may be distin-
guished on the basis of the Eighth Circuit’s finding that
“ . . it is beyond question that the bonds in this case
were not required by the court nor given by the plain-
tiffs pursuant to the provisions of the Norris-LaGuardia
Act.” 147 F.2d at 253. Here there is nothing in the rec-
ord specifying on what authority the bonds were re-
a. CN PSN REO VAgNe , : SS i ites
Appendix E.
quired and the district court did not reach that question.
Appellees contend that the language of the undertaking
“shall be liable to the defendants for such costs and
damages” of necessity excludes liability for attorneys’
fees. Besides the Donnelly case they cite for this propo-
sition Madison Shipping Corp. v. National Maritime
Union, 204 F. Supp. 22 (E.D.Pa. 1962) and Duke Power
Co. v. Greenwood County, 25 F. Supp. 419 (W.D.S.C.
1938) 5 The authority relied upon in Madison Shipping
is the Donnelly case. Duke Power relies upon the same
federal authorities as does Donnelly. None of those au-
thorities stands for the proposition that the word “dam-
ages” in a bond cannot include attorneys’ fees. Rather,
they stand for the proposition that as a matter of fed-
eral common law attorneys’ fees are not a recoverable
element of damages.
The case relied upon by the Donnelly and Madison
courts and most often cited for the proposition that an
injunction bond for costs and damages will not support
a recovery of attorneys’ fees is Heiser v. Woodruff, 128
F.2d 178 (10th Cir. 1942). Heiser relied upon Tullock v.
Mulvane, 184 U.S. 497 (1902) and Oelrichs v. Spain, 82
U.S. 211 (1872). These cases make it clear that the is-
sue is not the meaning of the word “damages” in the
bond but whether as a matter of federal law attorneys’
fees are ever recoverable as an element of damages. Tul-
5. Appellees also cite Powelton Civic Home Own-
ers Ass’n. v. H.E.W., 284 F. Supp. 809 (E.D.Pa. 1968) ;
Monolith Portland Midwest Co. v. Reconstruction Fi-
nance Corp, 128 F.Supp. 824, 878 (S.D.Cal. 1955). These
cases are not in point on the interpretation of the bond,
even though they do support the proposition that attor-
neys’ fees are not ordinarily an element of damages in
the federal courts.
Ia ae ee ae
53
Appendix E.
lock v. Mulvane, which involved a suit for specific per-
formance, recognizes that if Kansas law were to be ap-
plied the bond would have sustained the award of at-
torneys’ fees. Accepting Tullock v. Mullvane and Oelrichs
v. Spain as correct statements of the federal common
law with respect to the recovery of attorneys’ fees as an
element of damages whether or not a bond has been
given, it is obvious that the federal common law was
changed for labor disputes when Congress enacted §7
of the Norris-LaGuardia Act. Thus the fact that the
bond did not track the language of §7 exactly should
not be dispositive. Whatever the law is in other cases,
in a labor dispute attorneys’ fees incurred in defending
against an application for an injunction which should
not have been granted are a recoverable element of dam-
ages. If in a labor dispute the plaintiff seeking a pre-
liminary injunction tenders and the court approves a
bond for “costs and damages” that undertaking should
be construed to include all the elements of damage which
are recoverable under §7. Since International Ladies’
Garment Workers’ Union v. Donnelly Garment Co., su-
pra, and Madison Shipping Corp. v. National Maritime
Union, supra, are based upon a misinterpretation in
Heiser of the holdings of Tullock v. Mulvane and Oelrichs
v. Spain, we decline to follow these authorities insofar
as they hold that the injunction bond for costs and dam-
ages may not be so construed.
This brings us to the question whether recovery
should be limited to the amount of the bond. Here, again,
appellees take comfort in the Donnelly case, which says:
“The weight of authority in the Federal courts is
that a recovery in excess of the maximum amount
stipulated in a judicial bond is not permissible.
a PATEL OIA LIS EL TERETE, aE Le 2 Ass
Appendix E.
United Motor Service, Inc. v. Tropic Aire, Inc., 8
Cir. 57 F.2d 479, 482, reviewing the prior decisions
of this court and other Federal courts. And see
Russell v. Farley, 105 U.S. 433, 437, 26 L.Ed. 1060;
Meyers v. Block, 120 U.S. 206, 211, 7 S.Ct. 525, 30
L.Ed. 642; Lawrence v. St. Louis-San Francisco
R.Co., 278 U.S. 228, 233, 147 F.2d at 253.
We can put to one side the surety’s liability, for entirely
different legal principles operate to limit its liability
to the amount of its undertaking. Reinstatement of Se-
curity §195 (1941). The obligation of the principal, the
plaintiff seeking injunctive relief, raises a different
issue, and again the Eighth Circuit both in Donnelly and
in United Motors Service v. Tropic-Aire, 57 F.2d 479
(1932), misapprehended the holdings of the Supreme
Court cases on which it relied.
It was once very much in doubt whether an equity
court could ever award damages. That doubt remained
in England until the passage of the Chancery Amend-
ment Act in 1858, commonly called Lord Cairn’s Act, St.
21 & 22 Vict. c. 27, granting to the court of chancery
jurisdiction to »ward damages in order to give com-
plete relief in a case otherwise properly within its jur-
isdiction. See 1 J. Pomeroy, Equity Jurisprudence
§237(e) (Sth ed. 1941). The same doubt about the power
of an English equity court to award damages existed
in the United States. In Bein v. Heath, 53 US. (12
Howard) 168, 178-79 (1851), Chief Justice Taney wrote:
“A court proceeding, according to the rules of
equity, cannot give a judgment against the obligors
in an injunction bond when it dissolves the injunc-
tion. It merely orders the dissolution, leaving the
obligee to proceed at law against the sureties, if he
EPSP ERT te RT RETURNER ERE tem TER
55
Appendix E.
sustains damage from the delay occasioned by the
injunction.”
Russell v. Farley, 105 U.S. (15 Otto) 433, 445 (1881),
referring to Bein v. Heath, supra, rejected Chief Justice
Taney’s dictum, saying:
“Other cases are referred to by counsel of the appel-
lants to sustain their position, but upon a careful
examination we are not satisfied that they furnish
any good authority for disaffirming the power of
the court having possession of the case, in the ab-
sence of any statute to the contrary, to have the
damages assessed under its own direction. This is
the ordinary course in the Court of Chancery in
England, by whose practice the courts of the United
States are governed, and seems to be in accordance
with sound principle.”
The holding of Russell v. Farley, then, is that a court of
equity can, in order to give complete relief, enter judg-
ment on an injunction bond. The case also contains a
dictum which has been fairly frequently cited for the
proposition that the bond is the only source of the de-
fendant’s liability.
“Where no bond or undertaking has been required,
it is clear that the court has no power to award
damages sustained by either party in consequence
of the litigation, except by making such a decree in
reference to the costs of suit as it may deem equit-
able and just.” 105 U.S. (15 Otto) at 437.
In United Motors Service v. Tropic-Aire, 57 F.2d at 482,
the Eighth Circuit treated this dictum as a statement
that in the absence of a bond no court could award
damages for wrongfully obtaining an injunction. But in
—_—e ANS ERM fre. 4
56
Appendix E.
the context of Russell v. Farley it seems clear that no
more was intended than to suggest that such an award
was not within the jurisdiction of a court of equity.
Both in Donnelly and in United Motors Service ref-
erence is made to Minneapolis, St. P. & 8. Ste. M. Ry. v.
Washburn Lignite Coal Co., 254 U.S. 370 (1920). United
Motors Service, 57 F.2d at 483, refers to Minneapolis, St.
P. & 8. Ste. M. Ry. v. Washburn Lignite Coal Co. as hold-
ing that in the absence of a bond damage arising from
an injunction is damnum absque injuria. Actually the
case holds no such thing. It dismisses a writ of error
from the Supreme Court of North Dakota because of an
adequate state ground of decision. The reference to the
injunction bond is to the state court’s application, or
more properly misapplication, of the dictum in Russell
v. Farley, supra.
Both Donnelly and United Motors Service cite Law-
rence v. St. Louis-8. Fran. Ry., 278 U.S. 228 (1929). The
holding in Lawrence is that the court need not enter-
tain an action to recover on the bond prior to the hear-
ing on a permanent injunction. There is a one sentence
dictum, citing Russell v. Farley, supra, and Minneapolis,
St. P. & 8. Ste. M. Ry. v. Washburn Lignite Coal Co.,
supra, “If it had not, when entering the interlocutory
decree, required that the bond be given, no damages
could have been recovered on the dissolution of the in-
junction.” 278 U.S. at 233. No significance can be at-
tached to this dictum since it, like the reference in the
Minneapolis Ry. case, refers to a proceeding in a state
court and hence, in all likelihood, to a matter of state
court equity practice similar to the question of federal
court equity practice involved in Russell v. Farley, supra.
57
Appendia E.
No Supreme Court authority which has been called
to our attention holds that the liability of a plaintiff
who has been improperly granted an injunction is lim-
ited to the amount of the bond he has furnished, and we
find the authority of International Ladies’ Garment
Workers’ Union v. Donnelly Garment Co., supra, on this
issue unpersuasive. Cf. Atomic Oil Co. v. Bardahl, 419
F.2d 1097 (10th Cir. 1969).
The “damnum absque injuria” approach of the Don-
nelly case would rule out any liability for wrongfully ob-
taining an injunction in any case where the court did not
. require the posting of a bond. It has often been said
that as a rule there is no liability in tort for the damages
caused by the wrongful suing out of an injunction. See,
e.g., Benz v. Compania Naviera Hidalgo 8.A., 205 F.2d
944, 948 (9th Cir. 1953) ; 42 Am. Jur. 2d Injunctions §359
(1969) ; 43 C.J.S. Injunctions §281 (1945). This rule is
an aspect of the more general rule that no action lies
against a party for resort to civil courts, and it is sub-
ject to the same qualification that an action will lie even
in the absence of a bond for proceeding maliciously with-
out probable cause. See, e.g., Dacey v. Lawyers’ Associa-
tion, 423 F.2d 188, 195 (2nd Cir. 1969) ; Soffos v. Eaton,
152 F.2d 682 (D.C. Cir. 1945) ; Melvin v. Pence, 130 F.2d
423 (D.C. Cir. 1942); American Optometric Association
v. Ritholtz, 101 F.2d 883 (7th Cir. 1939); Peckham
v. Union Finance Co., 48 F.2d 1016 (D.C. Cir. 1931) ;
Mayflower Industries v. Thor Corp., 15 N.J. Super. 139,
152, 83 A.2d 246, 252 (Ch. Div. 1951); F. Harper & F.
James, The Law of Torts §4.8 at 326 (1956). Probably
the possibility of a recovery against a plaintiff who had
proceeded without probable cause was the reason why
——
58
Appendix £.
Congress added the last sentence of §7 of the Norris-
LaGuardia Act, 29 U.S.C. §107:
“But nothing in this section contained shall deprive
any party having a claim or cause of action under
or upon such undertaking from electing to pursue
his ordinary remedy by suit at law or in equity.”
Thus the civil action for proceeding maliciously without
probable cause still exists in labor dispute cases.
The question, then, is how far Congress intended
to go beyond the remedy which existed at common law.
Section 7 does say that an amount shall “be fixed by the
court,” but in the context this language seems to modify
the words “adequate security” rather than the word
“undertaking.” Read thus, the amount to be fixed by
the court refers to the limit of liability of a surety or
the amount of collateral security required in the absence |
of a surety. The plaintiff's required undertaking would
then read “sufficient to recompense those enjoined for
any loss, expense, or damage... including all reason-
able costs (together with a reasonable attorney’s fee)
and expenses of defense against the order . . .”. Such
a reading would permit recovery against the plain-
tiff in excess of the amount fixed in the bond. The
language “[n]o temporary injunction shall be issued ex-
cept on condition” seems to make the undertaking to
recompense for damage an implied condition of every
labor dispute injunction. Such a reading would permit
recovery even in the absence of a bond. One district
court considering that issue, wrote:
“While the statute provides for a bond, and, while
it is manifestly true that the bond did not comply
with the provisions of the statute, it might be that
the labor unions, or, parties, would be entitled to
59
Appendix E.
their expenses, and attorney’s fees, in accordance
with this statute, even though no bond were given,
but this statute does not so say. A liberal construc-
tion though should be allowed to accomplish its
purpose. It could hardly mean that expenses were
to be allowed, only, if the bond were given.” Hous-
ton & North Texas M. F. Lines v. Local 754, Team-
sters, 27 F. Supp. 262 (N.D.Tex. 1939).
The quote is a dictum only, and a similar dictum,
citing the Houston & North Texas M. F. Lines case ap-
pears in Jamaica Lodge 2188, Railway Clerks v. Rail-
way Express Agency, Inc., 200 F.Supp. 253, 254 (E.D.
N.Y. 1961). In Elgin J. & E. Ry. Co. v. Brotherhood of
Railroad Trainmen, 302 F.2d 540, 545 (7th Cir. 1962) the
court affirmed the award of expenses and attorneys’
fees. Neither the Seventh Circuit opinion nor that of
the district court, 196 F. Supp. 158 (N.D.IIl. 1961) dis-
close whether a bond was filed or if so in what amount.
The district court reserved decision for the purpose of
fixing the amount of the award until after the mandate
on any appeal should issue. Thus the Elgin case may be
interpreted as recognizing that the plaintiff’s liability
under §7 is open ended.
Several considerations lead us to the conclusion
that the liability of the plaintiff for loss, expense or
damage under §7 was not intended by Congress to be
restricted solely to the amount of whatever bond the
court may have required. These are:
(1) the language of the statute to which we have
referred above;
(2) the fact that the statute changed the substan-
tive law with respect to the recoverability of
attorneys’ fees;
“~
—_— RISER PARC ON aN et NRE ROC
Appendia B.
(3) the fact that the statute recognizes a liability
for resort to the civil process in cases where
an action for malicious prosecution would not
lie; and
(4) the remedial purpose intended by Congress.
The fourth consideration is particularly compelling. The
enactment of the Norris-LaGuardia Act reflected a
judgment that at least in the period prior to 1932 the
judges of federal district courts were entirely too willing
to accede to requests by employers for injunctions
against labor unions. See Boys Markets, Inc. v. Local
770, Clerks Union, 398 US. at 250-51; F. Frankfurter
& N. Greene, The Labor Injunction (1930). It is hardly
logical to read §7 so that the extent of the new liability
for loss, expense, or damage which it created would de-
pend entirely on the unbridled discretion of these same
district court judges against whom the whole statute
was directed. Yet that is the very result of the Donnelly
decision. The atmosphere of the federal courts in labor
cases may well have changed since 1932, but Congress
has not seen fit to amend §7.
We hold, then, that in any case involving a labor
dispute the liability of the plaintiff, though not of any
surety, for loss, expense or damage, including attorneys’
fees, under §7 of the Norris-LaGuardia Act shall be
fixed by the court without regard to any limitation in
an injunction bond. Since in each of the instant cases a
bond was filed we are not required to decide what the re-
sult should be in case where no undertaking was filed.
The amount of expenses and of reasonable attor-
neys’ fees have been stipulated. The record does not dis-
close whether the stipulated amounts of expenses in-
cluded statutory costs on appeal in the prior appeal. In
er
that appeal we held that each party should bear its own
statutory costs. These amounts should not be included
in the judgment.
The order of the district court will be reversed and
the cases remanded to the district court for the entry
of a judgment awarding the stipulated attorneys’ fees
and the stipulated expenses except for statutory costs
on the prior appeal.
KALODNER, Circuit Judge, concurring in part and dis-
senting in part:
I agree with the reversal of the District Court’s
Order.
I disagree, however, with the majority’s direction
to the District Court to enter a judgment in the instant
proceedings, awarding the stipulated attorneys’ fees
and expenses, except for statutory costs on the prior
appeal.
In my opinion, since the defendants below have
elected to seek recovery of their reasonable attorneys’
fees and expenses in the same proceedings in which the
preliminary injunctions were improvidently issued they
are for that reason limited in their recovery to the
amounts specified in the injunction bonds posted in
these proceedings, under Section 7(e) of the Norris-
LaGuardia Act. 29 U.S.C.A. § 107(e).
Section 7(e) provides in relevant part:
“. .. No temporary restraining order or temporary
injunction shall be issued except on condition that
complainant shall first file an undertaking with ade-
quate security in an amount to be fixed by the court
ee ee ee tied ; . a
.
—— . 7
Appendiz E.
sufficient to recompense those enjoined for any
loss, expense, or damage caused by the improvident
or erroneous issuance of such order or injunction,
including all reasonable costs (together with a rea-
sonable attorney's fee) and expense of defense
against the order or against the granting of any in-
junctive relief sought in the same proceeding and
subsequently denied by the court.
“The undertaking mentioned in this section
shall be understood to signify an agreement entered
into by the complainant and the surety upon which
a decree may be rendered in the same suit or pro-
ceeding against said complainant and surety, upon
a hearing to assess damages of which hearing com-
plainant and surety shall have reasonable notice,
the said complainant and surety submitting them-
selves to the jurisdiction of the court for that pur-
pose. But nothing in this section contained shall de-
prive any party having a claim or cause of action
under or upon such undertaking from electing to
pursue his ordinary remedy by suit at law or in
equity. Mar. 23, 1932, c. 90, §7, 47 Stat. 71.” (Em-
phasis supplied. )
The cited provisions plainly spell out two separate
and independent procedures for recovery of reasonable
attorneys’ fees and expenses incurred by a party against
whom a temporary injunction has been improvidently
granted; he may elect to have recourse against the in-
junction bond im the same proceeding in which it was
posted, or he may independently elect “to pursue his
ordinary remedy by suit at law or in equity” for his re-
covery. It is a reasonable assumption that Congress,
cognizant of the well-settled general rule that the lia-
63
Appendiz E.
bility on an injunction bond is limited by its face
amount, legislated the provision affording a right of in-
dependent suit for recovery of permissible attorneys’
fees and expenses in order to insure full reimbursement
of such fees and expenses.!
Here, the majority construes Section 7(e) to permit
the aggrieved parties to recover in full their attorneys’
fees and expenses in the same proceedings in which the
injunction bonds were issued, even though they substan-
tially exceed the aggregate amounts of the posted in-
junction bonds.
There is no warrant for such a construction, and it
can only be described as impermissible judicial legisla-
tion. The majority has failed to cite any case which even
remotely affords nourishment for its construction, even
though it transgresses the procedural scheme of Sec-
tion 7(e).
I would reverse the District Court’s Order with di-
rections to enter a judgment awarding the defendants
below $4,000.00, the aggregate amount of the injunction
bonds posted by the plaintiffs, in the event that the
1. The majority speculates that “[pjrobably the
possibility of a recovery against a plaintiff who had
proceeded without probable cause was the reason why
added the last sentence of $7 of the Norris-
ia Act, 29 U.S.C. §107.”
The ready answer to such speculation is that §7(e)
provides that recovery of reasonable attorneys’ fees and
expenses arises, without more, when there has been an
aur on or erroneous” issuance of a temporary re-
order, and accordingly, lack of “probable
cause” is an irrelevant consideration.
7
defendants do not choose to exercise their right to with-
draw their pending Motion for allowance of the stipu-
lated attorneys’ fees and expenses.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit.
Appendiz F.
APPENDIX F
Statutes Involved
Section 7 of the Norris-LaGuardia Act (47 Stat. 71, 29
U.S.C. §107) reads as follows:
No court of the United States shall have jurisdic-
tion to issue a temporary or permanent injunction in
any case involving or growing out of a labor dispute, as
defined in this chapter, except after hearing the testi-
mony of witnesses in open court (with opportunity for
cross-examination) in support of the allegations of a
complaint made under oath, and testimony in opposition
thereto, if offered, and except after findings of fact by
the court, to the effect—
(a) That unlawful acts have been threatened and
will be committed unless restrained or have been com-
mitted and will be continued unless restrained, but no
injunction or temporary restraining order shall be is-
sued on account of any threat or unlawful act excepting
against the person or persons, association, or organiza-
tion making the threat or committing the unlawful act
or actually authorizing or ratifying the same after ac-
tual knowledge thereof;
(b) That substantial and irreparable injury to
complainant’s property will follow;
(c) That as to each item of relief granted greater
injury will be inflicted upon complainant by the denial
of relief than will be inflicted upon defendants by the
granting of relief;
(d) That complainant has no adequate remedy at
law; and
—_— Siciatiie os ae ats ARyty ese
Appendiz F.
(e) That the public officers charged with the duty
to protect complainant’s property are unable or unwill-
ing to furnish adequate protection.
Such hearing shall be held after due and personal
notice thereof has been given, in such manner as the
court shall direct, to all known persons against whom
relief is sought, and also to the chief of those public of-
ficials of the county and city within which the unlawful
acts have been threatened or committed charged with
the duty to protect complainant’s property: Provided,
however, That if a complainant shall also allege that,
unless a temporary restraining order shall be issued
without notice, a substantial and irreparable injury to
complainant’s property will be unavoidable, such a tem-
pory restraining order may be issued upon testimony
under oath, sufficient, if sustained, to justify the court
in issuing a temporary injunction upon a hearing after
notice. Such a temporary restraining order shall be ef-
fective for no longer than five days and shall become
void at the expiration of said five days. No temporary re-
straining order or temporary injunction shall be issued
except on condition that complainant shall first file an
undertaking with adequate security in an amount to
be fixed by the court sufficient to recompense those en-
joined for any loss, expense, or damage caused by the
improvident or erroneous issuance of such order or in-
junction, including all reasonable costs (together with
a reasonable attorney’s fee) and expense of defense
against the order or against the granting of any in-
junctive relief sought in the same proceeding and sub-
sequently denied by the court.
The undertaking mentioned in this section shall be
understood to signify an agreement entered into by the
67
Appendix F.
complainant and the surety upon which a decree may be
rendered in the same suit or proceeding against said
complainant and surety, upon a hearing to assess dam-
ages of which hearing complainant and surety shall
have reasonable notice, the said complainant and surety
submitting themselves to the jurisdiction of the court
for that purpose. But nothing in this section contained
shall deprive any party having a claim or cause of ac-
tion under or upon such undertaking from electing to
pursue his ordinary remedy by suit at law or in equity.
Section 301 (a) of the Labor-Management Relations Act
of 1947 (61 Stat. 156, 29 U.S.C. § 185 (a)) reads as fol-
lows:
(a) Suits for violation of contracts between an
employer and a labor organization representing employ-
ees in an industry affecting commerce as defined in this
chapter, or between any such labor organizations, may
be brought in any district court of the United States
having jurisdiction of the parties, without respect to the
amount in controversy or without regard to the citizen-
ship of the parties.
Rule 65(c) of the Federal Rules of Civil Procedure reads
as follows:
(c) Security. No restraining order or preliminary
injunction shall issue except upon the giving of security
by the applicant, in such sum as the court deems proper,
for the payment of such costs and damages as may be
incurred or suffered by any party who is found to have
been wrongfully enjoined or restrained. No such se-
curity shall be required of the United States or of an
officer or agency thereof.
The provisions of Rule 65.1 apply to a surety upon a
bond or undertaking under this rule.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.