# Opposition Brief — International Brotherhood of Teamsters v. Eazor Express, Inc.

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 1976
- **Citation:** 424 U.S. 935

## Text

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TABLE OF CONTENTS

Page
Mp I es Sr teh Ok ira. oi 2
a ee 5
cg. EAE NGA OAS oc AN i nei al aaa eee 5
US eee 8
A. Eazor, Its Operations, and Its Labor
Relations Prior to April 1968 ......... 8
B. The Defendant Locals and Plaintiffs’
Relations With Them Prior to April 1968 8
C. The Agreementand the Parties Tolt... 9
D. The April 1968 Strike and Its After-
re SP a Se) SAR Oy ea 1]
E. The Strike of August 20-September 25,
on ie Pi TE res eran ta nl Re 12
F. Eazor’s Efforts to Obtain Judicial Re-
ae PONS Sc lop eo 15
G. Termination of Strike ............... 16
H. Pretrial Proceedings ................ 18
I. The Trial as to Liability ............. 19
J. The Trial Court’s Decision as to Lia-
BOR S ay P ee orice ie ane ee 23
K. The Trial asto Damages............. 23
L. The Trial Court’s Decision as to Dam-
PS FRE N Flin a bs bys eaarde a 29
M. The Decision of the Courts of Appeals .. 30
Reasons for Denying the Writ .................... 36
I. In Imposing Liability, the Court Below De-
cided No “Questions of Almost Universal
Import” But, Rather, Properly Interpreted
the Particular Contract Involved In This
2 TTS Sed Poo ae ga 36

rad ee |

TABLE OF CONTENTS—~ Continued )

Page

A. The Contract Imposed Duties With Re-
on go, er a ee eee Pere 36

B. “Mass Action” Was An _ Appropriate
NN hc S Sofie 5 cs bch cree ee ok ae be 44

Il. The Court Of Appeals Acted Properly In
Awarding Damages and Interest .......... 47
eg Sy ee rege 47
B. Prejudgment Interest ............... 50
GAIN 35 fos Coe Win eon baa re ke RR ba es 54

TABLE OF CITATIONS

Cases:

Albermarle Paper Company v. Moody, 422 U.S. 405
CUUPPN ac? ans wn ok 59h os enw Rete Sera ers 53

Armco Steel Corp. v. United Mine Workers of America,
O05 Fad 1120 (4th Cer. 1974) . <5. eee. 39

B. F. Goodrich v. Rubber Latex Products, Inc., 400
Fe re Cee Ce. RO) Booed Si eee ke dk 50

Blue Diamond Coal Company v. United Mine Workers
of America, 436 F.2d 1551 (6th Cir. 1970) .. . 13, 39, 45

Board of Commissioners v. U.S. 308 U.S. 343 (1939) .. 52

Celotex Corp. v. United Steel Workers of America, 388
fe we TERR SS. | eee 13

Chris-Craft Industries, Inc. v. Piper Aircraft Corp., 516
F.2d 172 (2d Cir. 1975), Cert. applied for, No.

PU or a ee eet LS ag wine on tease 52
Coronado Coal Co. v. United Mine Workers, 268 U.S.

SIS 5) CLT A cite BIT tig ok Ca win ee kA wk 45, 46
Falcone v. Dantinne, 420 F.2d 1157 (3d Cir. 1969) .... 43

ll

pa Ne en oval

een PS Pe ES ee ee Ye

TABLE OF CITATIONS—{ Continued)

Cases: Page
Gateway Coal Co. v. Mine Workers, 414 U.S. 368
ROME ists Fhe UNaaly less eT LS eh eR 39
H. J. Heinz & Co. v. Labor Board, 311 U.S. 514
J eect POE ES ee Oa Rtgs SENOS et cane apa aaa 40
Howard Johnson v. Hotel Employees, 417 U.S. 249
RUE oiunitecrd ices wo co te es a 43

Labor Board v. General Motors, 373 U.S. 734 (1963 i ae

Lewis v. Benedict Coal Co., 259 F.2d 346 (6th Cir.),
aff‘d in part and revd in part, 361 U.S. 459

grants Meso ate Beer ier Pe a dar Ve ee Ne 44,45
Local No. 21, United Textile Workers v. Newberry

Mills, Inc. , 238 F. Supp. 366 (W.D.S.C. 1965) . 44
Mason-Rust v. Laborers’ International Union, Local

42, 435 F.2d 939 (8th Cir. 1970) ............... 13
Mastro Plastics Corp. v. Labor Board, 350 U.S. 270

SS ee AS ena oy ene ation srk LE 41

McCrea v. Harris County Houston Ship Channel Navi-
gation District, 423 F.2d 605 (5th Cir.) cert.

denied, 400 U.S. 924 (1970) .................. 53
N.L.R.B. v. Allis-Chalmers Mfg. Co., 388 U.S. 175
Si Siena iy ae artes Pons PINE gh ipeeht Lapa ea 42

RUPMER oe Meare ite ges Jee Seay Nps 43
N.L.R.B. v. Truck Drivers & Helpers, Local U. 676,

etc., 450 F.2d 413 (3d Cir. 1971) ............... 13
Neill v. Diamond M Drilling Co., 426 F.2d 487 (5th Cir.

WOE Seay RA NEUE oy pita tics ORR es 4 50

Norte & Co. v. Huffines, 416 F.2d 1189 (2d Cir. 1969) . 54

North American Coal Corp. v. Local Union 2262. etc.,
497 F.2d 459 (6th Cir. 1974) ................ 44, 45

ili

rae a

WYER ANCE, Mid) TE st ery

TABLE OF CITATIONS— Continued)
Page

Penn Packing Co., Inc. v. Amalgamated Meat Cutters
and Butcher Workmen of North America, Local

195, 497 F.2d 888 (2nd Cir. 1974) .............. 41
Porter Co. v. N.L.R.B., 397 U.S. 99 (1970) ........... 43
Radio Officers v. Labor Board, 347 U.S. 17 (1954) .... 43

Robert C. Herd & Company v. Krawill Machinery Corp.,
256 F.2d 946 (4th Cir. 1958), aff'd on another
question, 359 U.S. 297 (1959) ................. 53

Sinclair Oil Corp. v. Oil, Chemical and Atomic
Workers Union, 452 F.2d 49 (7th Cir. 1971) ... 43, 44

Swanson v. Levy, 509 F.2d 859 (9th Cir. 1975) ....... 50
Teamster Union v. Lucas Flour Company, 369 U.S. 95
0 Se Peas reer gas he re ae 39

United Construction Workers v. Haislip Baking Co.,
223 F.2d 872 (4th Cir.), cert. denied, 350 U.S. 847

CRE te he 958 hae is Wa 6 va ap © vee 8s 39, 40, 44, 45
United States Steel Corp. v. United Mine Workers

of America, 519 F.2d 1249 (4th Cir. 1975) ....... 40
U.S. Steelworkers v. Warrior & Gulf Nav. Coal Co.,

ee Me OED 60s Nb-0 occ beeen ea ness 39
Vulcan Materials v. United Steelworkers of America,

403 F.2d 446 (5th Cir. 1970) .................. 44

Wagner Electric Co. v. Local 1104, 361 F. Supp. 647
(E.D. Mo. 1973), aff'd, 496 F.2d 954 (8th Cir.
RN sa tan ee ne ae a a ice ee ee 3 13, 44

iv

PO gl ow aS

TABLE OF CITATIONS— Continued )

Rules: Page
Fee we OD So bas Pes bok i ee 49
Other Authorities:

A. Cox, Some Aspects of the Labor Management
Relations Act of 1947, 61 Harv. L. Rev. 274 ( 1948) 42

49 VME, 1. Rev. G66 (1074) os. coe ceca k 40

IN THE
SUPREME COURT OF THE UNITED STATES

October Term, 1975

No. 75-930

International Brotherhood of Teamsters, Chauffeurs,
Warehousemen and Helpers of America, et al.,

Petitioners
Vv.

Eazor Express, Inc., et al., Respondents

Brief in Opposition to Petition
For a Writ of Certiorari

The Petition for Certiorari is characterized through-
out with omissions of facts which are highly significant
and in many instances crucial to understanding the
decisions in the courts below. Some inkling of the extent
of those omissions may be gleaned by comparing Peti-
tioners’ statement of the Questions Presented with the
counter-statement which follows:

1

2
QUESTIONS PRESENTED

1. (a) An international union and two of its locals
executed a single bargaining agreement with various sup-
plements all of which stated, “*** there shall be no strike
without using all possible means of settlement.” The Inter-
national and one of the locals, in certain supplements,
attempted to define and limit the circumstances under
which they could be held liable for unauthorized strikes by
members of that local, and in a manner which was not pro-
vided for in companion supplements pertaining to the other
local; nevertheless, the International and the first local
expressly agreed in the narrower supplement to “***
undertake every reasonable means to induce *** employ-
ees to return to their job during any period of any unautho-
rized stoppage of work.” In such a case, did the courts
below err in concluding that the collateral obligation with
respect to unauthorized strikes, expressly acknowledged
to exist in the more narrow supplement, was implicit in the
broad primary obligation with respect to strikes set forth
in all of the supplements?

(b) May unions be held liable for a strike which the
chief executives of the unions allegedly did not authorize,
where all of the hundreds of members of the locals involved
who were employed by the employers involved participated
in the strike, and where the strike was supported by strike
votes supervised by the union executives, organized and
led throughout by union stewards and committeemen, and
where strikers obtained work with other unionized employ-
ers through a hiring hall maintained by one of the unions?

(c) In such case, is it error to find that prompt
replacement of the stewards and discipline of the strikers
by the unions would have terminated the strike promptly,
where there is evidence that the previous labor relations
record of the employer was excellent; that the strike
occurred after two union members were terminated for

3

deliberately refusing direct work orders and that those
members had a right to resolve disputes associated with
their terminations by arbitration, and where there were
almost no other grievances pending between the employer
and union members?

2. (a) The damages awarded consisted of the operat-
ing losses which two carriers sustained during a four-week
period, and both sides produced experts who testified to the
amount of such losses on the basis of the same accounting
records. The differences in the conclusions reached were
solely the result of differences of opinion as to matters of
proper accounting practice in specifically defined areas.
The award of the trial court, while for a lump sum, was
directly in accord with the detailed Requests for Findings
and Brief dealing with all of the issues which were sub-
mitted by one of the parties. On appeal, both sides agreed
that the court of appeals could review and reach its own
conclusions, on the basis of its own review of the evidence
and the Requests for Findings and Briefs submitted below
by all parties. In such a case, where the court of appeals
does, in fact, review the record and affirm the lower court
on the basis of that review, should this Court grant a writ
of certiorari to require the court of appeals to remand
the case to the trial court for specific findings?

(b) Where a trial court, in an action for breach of a
labor contract, limits the plaintiffs’ award to the plaintiffs’
direct operating losses during a four-week strike plus pre-
judgment interest, and a court of appeals, after review,
expresses the opinion that the award of pre-judgment
interest was appropriate, should this Court grant certiorari
for the purpose of requiring either the court of appeals or
the trial court to explain in detail its reasons for awarding
interest?

(c) In such a case, where a court of appeals, after
independent review of the record, concludes that the trial

4

court was correct in computing the amount of plaintiffs’
direct loss, but clearly erred in limiting its award to fifty
percent of that loss plus pre-judgment interest, must
the court of appeals, after holding that the plaintiffs are
entitled to their direct losses in full, remand the matter to
the trial court, for further consideration of the issue of pre-
judgment interest, when the court of appeals determines
independently that an award of interest is required “in
order to arrive at fair compensation”?

ORME ES LEAT ALA DRA ALE PLM Bo BONS 5 ELLEN RAB LEONARD

§
STATEMENT OF THE CASE
INTRODUCTION

This is a case in which a very large motor freight
Carrier and its affiliate, whose operations were almost
entirely disrupted for approximately one month as the
result of a Strike, sought to recover damages from the
International Brotherhood of Teamsters and two of the
many locals with which the employers had executed a
national collective bargaining agreement covering the
period April 1, 1967, through March 31, 197]. Although
the Strike was in direct violation of the parties’ contract,
it was led throughout by Union stewards and supported
by all of the hundreds of members of the International and
two Locals at the employers’ principal terminals and by the
great majority of members of other Teamster Locals who
were parties to the same contract and manned other termi-
nals of the employers throughout the system.

The case was tried by a newly-appointed trial judge
who, while apparently convinced of the Unions’ liability
under the facts stipulated to prior to trial, sought neverthe-
less, throughout the course of the proceedings, to induce
settlement, on a liability theory and in an amount which
would not unduly trouble the Unions, even though the
Unions, from the inception, refused to acknowledge
liability or offer one cent.

Plaintiffs contended that, even though the Strike was
in direct violation of the Unions’ contract, it was in fact
authorized and called by a vice-president of one Union
Local who, in fact, had authority to call the Strike. How-
ever, the trial judge, while conceding that “*** the circum-
stances and the sequence of events are undeniably sus-
picious,” nevertheless chose to accept the testimony of the
Union official involved, to the effect that he had not called
the Strike, and found that the Strike was not authorized.

Nevertheless, the judge did impose liability on the
basis of the alternative grounds discussed in the Unions’

De a A ane oar ae te

6

Petition here, one of which, failure to discipline, had the ad-
vantage, not unrecognized by the Unions, of further
strengthening the arm of the International in future deal-
ings with its Locals with respect to allegedly unauthorized
strikes. Here, the Unions claim that the employers’ con-
tention, adopted by the courts below, that the Unions
should have taken stronger measures to terminate the
Strike, is simply hindsight. This is simply not so. The first
of the two lawsuits consolidated in this proceeding was
filed on the second day of the Strike, and it included a spe-
cific allegation that the Unions were not taking effective
actions to terminate the Strike as required by the parties’
contract. Also, contrary to another assertion in the Intro-
duction ‘to the Unions’ Petition, both the district court and
the court of appeals concluded that, if the Unions had taken
appropriate action promptly, the Strike would have ended
promptly. And there is ample support in the record for that
conclusion.

Plaintiffs sought to recover the following damages:
(a) 1.1 Million Dollars in direct operating losses which
the employers sustained during the Strike; (b) 1.3 Million
Dollars in profits lost on diminished general commodities
tonnage during an eighteen-month period following
the Strike, and (c) hundreds of thousands of dollars in
interest which the primary carrier was obliged to pay on
loans which the primary carrier was obliged to carry and/or
greatly increase as a result of the Strike.

As part of his continued effort to dispose of the case
on some basis which the Unions might find satisfactory,
the trial judge was very harsh in his treatment of plain-
tiffs’ damage claims even though, in every instance, the
fact of damage and the large amounts involved were very
well documented. The principal plaintiff had been operat-
ing at a profit for thirty-seven consecutive years and both
plaintiffs were enjoying a good year up until the day of the
Strike; both suffered huge losses during the Strike and lost
hundreds of experienced employees as a result of the
Strike. Also, the principal plaintiff became highly unprofit-

7

able after the Strike and continuously sustained a substan-
tial loss in volume. Nevertheless, the trial judge awarded
plaintiffs nothing for lost profits during or after the Strike
and, in a decision reversed by the court of appeals as with-
out precedent in law or basis in fact, limited his award to
fifty percent of direct operating losses during the Strike less
legal expense. This was based on findings that the em-
ployers failed to mitigate damages by rejecting an alleged
Union offer to end the Strike at its midpoint if the employers
would permit all but the Strike leaders to return to work
without penalty.

Since this was an action for breach of contract, and
the direct operating losses which were the basis of the
award were subject to calculation, the judge properly
included pre-judgment interest in his award.

It was the employers, rather than the Unions, who
filed the first appeal from the decision of the trial judge.
The court of appeals found some support in all of his find-
ings and conclusions on the liability issues, but reversed
his conclusions that the employers had failed to mitigate
damages and had failed to establish the amount of the
counsel fees which they incurred in their attempts to termi-
nate the Strike. The propriety of neither of these conclu-
sions is challenged by the present Petition.

The trial judge greatly complicated plaintiffs’ ability
to attack his limited damage award by declining to make
very detailed findings on those issues. However, his ulti-
mate finding as to the amount of plaintiffs’ operating
losses during the Strike was directly consistent with a
series of detailed Requests for Findings and Briefs on this
subject submitted by plaintiffs’ counsel, all of which were
annotated to the Record. These documents and the counter-
parts submitted by the defendants were included in the
Record reviewed by the court of appeals, and that court
specifically stated, after review, that it found support in the
Record for the trial judge’s finding as to the amount of
plaintiffs’ direct loss.

Even as modified by the court of appeals, the award

8

below, while substantial, compensated plaintiffs only for
their direct Strike losses plus interest and was substantially
less than forty percent of plaintiffs’ actual claim.

FacTuAL BACKGROUND

A. Eazor, Its Operations, and Its Labor Relations
Prior to April 1968

Eazor was founded in 1937 and has its principal
place of business in Pittsburgh (J.A. 164). By the summer
of 1968, directly and through Daniels, Eazor employed
approximately 2500 persons (J.A. 1427) and operated 40
general commodities terminals and 31 special commodi-
ties terminals in 15 eastern, midwestern, and south-
eastern states (J.A. 172-174). Approximately 90 percent of
Eazor’s revenue and 50 percent of Daniels’ revenue de-
rived from general commodities freight (J.A. 3392, 1106a).
The hubs of a general commodities motor freight operation
are breakbulk commodities terminals. There were two of
these in the Eazor-Daniels system, one in Pittsburgh and
the other in Warren, Ohio (J.A. 1818-1820). Approximately
300 drivers, dock workers and garage personnel were
employed at each of these terminals (J.A. 1820-1821, 1704,
1939-1940, 2296-2297).

B. The Defendant Locals and Plaintiffs’ Relations
With Them Prior to April 1968

Local No. 249 is the largest Teamster local in West-
ern Pennsylvania and in 1968, its members included all
of the drivers and dock workers, but none of the garage
employees, at Eazor’s Pittsburgh terminal (J.A. 165-166,
1809, 2283). Local No. 249 had a long history of participa-
tion in wildcat strikes (J.A. 1392-1393), and such strikes
had been extremely damaging to the motor freight industry
in the Pittsburgh area. In fact, by 1968, Eazor was the only

9

national motor freight carrier which still had a terminal
in Pittsburgh (J.A. 2294-2295, 371a).

Notwithstanding the problems experienced by other
carriers in the area, Eazor had never had a substantial
strike other than an industrywide strike prior to April, 1968
(J.A. 2271). The President of Local No. 249 conceded that
Thomas Eazor, chief executive of Eazor Express, had a
“good operation”, “was very close and always had been”
and “always worked with his men” (J.A. 2883, 2895).

Local No. 377 maintains headquarters in Youngs-
town, Ohio (J.A. 166). At all times material, its members
included the drivers, dock employees, and garage employ-
ees at the Eazor-Daniels terminals in Warren, Ashtabula.
and Youngstown, Ohio (J.A. 166, 2506, 2575-2583).

Like Local No. 249, Local No. 377 had a long history
of involvement in wildcat strikes (J.A. 3179-3182, 2313):
it also had been threatened with the imposition of trustee-
ship by the defendant International for a variety of other
reasons over the years (J.A. 2014-2016).

Daniels was in business for some years prior to its
being acquired by Eazor in October, 1967, and its revenues
were almost as large as Eazor’s at that time (J.A. 3177-
3179). While Daniels reported having made money as
recently as 1966, it sustained large losses in 1967
because of an industry-wide strike which occurred in the
spring of that year and because of an unauthorized steel-
haulers’ strike which occurred in the summer of 1967 and
adversely affected the adjacent general commodities divi-
sion in Warren (J.A. 3180-3182, 3172-3173, 3392). In fact.
according to the uncontradicted testimony of Robert
Eazor, Local No. 377’s over-the-road steward and commit-
teemen at Warren had repeatedly led the men there in
unauthorized strikes (J.A. 2313).

C. The Agreement and the Parties To It

In addition to the statements on this subject in the
Petition, the Court should know that a Pretrial Stipulation

10

of the parties (J.A. 166-167, 169-171) establishes that The
National Union Committee of the defendant International,
as well as the defendant Locals and many other locals,
were parties to the National Master Freight Agreement,
and that the National Union Committee of the Interna-
tional in all instances and the Locals in specified ones were
parties to area agreements “which were supplemental to
the National *** Agreement, covered the same time period,”
and “*** were the product of contemporaneous negoti-
ations *** conducted on behalf of the unions involved by
the National Union Committee and subcommittees ap-
pointed by, deriving their authority from, and acting on
behalf of the National Union Committee.”

Article 2, Section 4, of the Master Agreement provides,
in part (J.A. 256):

“The employees covered under this Master Agree-
ment and the various Supplements thereto shall con-
stitute one bargaining unit. It is understood that the
printing of this Master Agreement and the aforesaid
Supplements in separate Agreements is for conve-
nience only and is not intended to create separate
bargaining units.”

The National Agreement and all Supplements were
voted on by the membership of all locals covered, acting
as a single body, pursuant to the International's Constitu-
tion (J.A. 54a-55a).

The National Agreement and all applicable Area Sup-
plements included the following provision (App. 42a):

“The Unions and the Employers agree that there
shall be no strike, lockout, stoppage, tie-up, or legal
proceedings without first using all possible means of
settlement, as provided for in this Agreement and in
the National Agreement if applicable, of any contro-
versy which might arise.”

The only contractual remedy of an employer con-
fronted by a strike which violated the foregoing provisions

PEL PLL ELINA MELIANI EPL I EI NS II A EEN GP

1]

was the right to discharge participating employees (306a),
and the International conceded that, in practice, large
scale discharges are impractical, since experienced em-
ployees who are terminated can readily obtain employment
elsewhere in the industry (J.A. 2971-2972).

In addition, an employer has the right to seek an in-
junction and to sue for damages.

D. The April 1968 Strike and Its Aftermath

In April, 1968, the Local No. 377 men employed at the
Daniels special commodities terminal in Youngstown
walked out, claiming pay shortages; the Local No. 377 men
at Warren left their work in sympathy, and strikers from
both of these terminals established a picket line in front
of the Eazor terminal in Pittsburgh which the Local No.
249 members employed there (including the stewards and
committeemen) refused to cross (J.A. 176, 180-181, 1078-
1079, 1434, 1706-1708, 2510-2511, 3148-3152).

The April, 1968, work stoppage, was a direct violation
of the Unions’ no-strike pledge. It affected the two break-
bulk terminals in the Eazor-Daniels system and resulted
in Eazor-Daniels sustaining a net loss of $148,000 that
month—and this was the only loss month sustained by the
system in 1968 prior to July (64a; J.A. 3198-3200, 3683-
3684).

Nevertheless, Eazor imposed no sanction on any par-
ticipant, on the basis of representations by union officials
that, if Eazor refrained from doing so, the International
would guarantee that there would be no more unauthorized
work stoppages (J.A. 1436-3153).

The procedure established in the parties’ Agreement
and its Supplements required that all grievances be re-
duced to writing and processed through the grievance
machinery unless they were resolved by discussion be-
tween the supervisor of the employee involved and the
union steward (J.A. 1437-1439, 1487-1518, 2626). It is
undisputed that at the time the strike in suit began there

pom ‘

12

were no written grievances pending with respect to any
Daniels employee at the Warren terminal, and there were
only two written grievances pending in Pittsburgh, both of
which were being processed in the normal manner and
were ultimately resolved in the employer's favor (J.A. 986-
987, 181, 1663-1666).

E. The Strike of August 20—September 25, 1968

As the trial court below found (App. 6a)), John J.
O'Neill, Vice-President and Business Agent for Local 377,
was the representative designated by the Ohio Area Sup-
plements as “the Union’s authorized representative to * * *
(2) make commitments for the ‘Union generally, and in par-
ticular having the sole authority to act for the Union in
calling or instituting strikes or any stoppages of work.”
“Union” in the Nationa] Agreement and all Supplements
refers to both the Local Unions and the Natiomal Union
Committee (274a), and the trial court and the court of
appeals found that this Committee was actually the Inter-
national (App. 17a-18a, 46a-48a).

It is not disputed that the Strike began undler the fol-
lowing circumstances: two Local No. 377 members who
worked out of the Daniels’ terminal in Warren, Ohio, were
terminated for refusing to obey direct work orders (J.A.
1000-1005, 1017-1019, 1079-1081), and O'Neill, who sym-
pathized with the men (J.A. 1022-1024, 2524), was in-
volved in an altercation with an Eazor supervisor which
took place in the course of a grievance meeting which
followed the terminations (J.A. 1019-1022, 1082-1083,
2523-2524). At that time, according to plaintiffs’ witness
Clark, O'Neill specifically threatened to call a strike (J.A.
1024).

While O'Neill denied specifically threatening a strike,
he did admit telling Clark, at the end of this meeting, that
Clark was “making a grave mistake” (J.A. 2526). Then, ad-
mittedly, O’Neill spent an hour walking around the Ter-
minal, speaking to the men (J.A. 1025-1026, 1085, 2528-
2529), and O'Neill left the Terminal after making an un-

RMT Sr

13

complimentary comment about the Company to its ter-
minal manager (J.A. 1085).

Next, O'Neill crossed the street to enter a truck stop
where, admittedly, he conversed with various Eazor-
Daniels over-the-road drivers and one of their committee-
men (J.A. 2530-2532, 2703-2704). Uncontradicted evidence
showed that within ten minutes after O'Neill left the Ter-
minal, an out-of-town driver told the dispatcher that the
Terminal was “going to go on strike”; the same man
returned a short while later to inform the dispatcher that
the strike would begin in one half hour; the Strike did
begin at Warren at the time predicted; also, it was ex-
tended to Youngstown by the Local No. 377 road steward
from Warren one half hour later (J.A. 1028, 1029, 1086-
1087, 1635-1638, 2299-2300).

The trial court found (App. 7a-8a): “Although the cir-
cumstances and the sequence of events are undeniably
suspicious, I find, in the absence of evidence to contradict
[O’Neill’s self-serving statements as corroborated by the
testimony of two other Local No. 377 officials) * * * that
he did not call the strike, and that, in fact, he cautioned
against it.”!

What the trial court did not state was that plaintiffs’
testimony with regard to the strike threat by O'Neill, the
report by the employee, and O’Neill’s activities was all
given on the basis of memoranda made by the witnesses
shortly after the events in question, and that two of those

1. The relationship between O'Neill's actions and the com-
mencement of the Strike is strikingly similar to that which has led
other courts to find that other alleged wildcat strikes were in fact
authorized by union officials. See Mason-Rust v. Laborers’ Interna-
tional Union, Local 42, 435 F.2d 939 (8th Cir. 1970); Blue Diamond
Coal Company v. United Mine Workers of America, 436 F.2d 1551
(6th Cir. 1970); N.L.R.B. v. Truck Drivers & Helpers, Local U. 676,
etc., 450 F.2d 413, 415 (3d Cir. 1971); Wagner Electric Co. v. Local
1104, 361 F. Supp. 647 (E.D. Mo. 1973), aff ‘d, 496 F.2d 954 (8th
Cir. 1974); Celotex Corp. v. United Steelworkers of America, 388
F. Supp. 1132 (E.D. Pa. 1974).

wry, ees |

POST EE SL LEAD BO tm A EOI eG

14

witnesses were not employed by Eazor at the time they
testified (J.A. 1015, 1019, 1632-1635).

Furthermore, while O'Neill denied at the trial that he
had done anything to incite the men while walking around
the Terminal and after leaving it, little weight should have
been accorded such testimony in view of the fact that,
when he gave his discovery deposition in May of 1971,
O'Neill purported to have no recollection whatever of what
he did after the grievance meetings and after leaving the
Terminal (J.A. 2647-2649) and insisted that this was so
even when he has read some of the Eazor memoranda on
the point—to see whether they would refresh his recollec-
tion (id.).

Eliser, a local 377 official who gave brief corroborat-
ing testimony in support of Mr. O'Neill at the trial (J.A.
2795-2800), was not mentioned as a defense witness in the
defendants’ Pre-Trial Memoranda, in the Pre-Trial Stipula-
tion or, indeed, at any time until, weeks after the plaintiffs’
evidence was concluded, Local No. 377 filed a supple-
mental list of witnesses (J.A. 2793-2794).

Also relevant in this regard was plaintiffs’ evidence
that O'Neill and the other officials of Local 377 refused to
come to the scene or accept or return any of scores of tele-
phone calls which Eazor made to the Local 377 Union Hall
and to O’Neill’s home, in an effort to obtain assistance,
between 3:30 P.M. on Tuesday, August 20th, and Mr.
O’Neill’s appearance in court on the morning of Friday,
August 23, 1968. Testimony to this effect, corroborated by
contemporaneous memoranda, was given by five witnesses
(J.A. 1029-1031, 1088-1089; 1450, 2432, 2319-2322). Also,
the more important of these witnesses were no longer
employed by Eazor at the time they testified (J.A. 1014,
1402).

From Warren, the Strike spread to Pittsburgh, after
which Union members from the two terminals set up picket
lines throughout the Eazor-Daniels system, and these lines
were respected by the members of the Teamster locals em-
ployed in many other areas, although they were unlawful

15

(J.A. 182, 1149-1152, 345-356). As a result, all Eazor-
Daniels general commodities freight was embargoed on
August 26th, and this embargo continued unti] September
18th in all areas but Pittsburgh, and until September 25th
there (J.A. 188, 201-202, 3224, 1982).

From its inception, the Strike was led, openly and
notoriously, by the over-the-road shop stewards and com-
mitteemen of the defendant Locals (Proposed Annotated
Liability Findings Nos. 236(b) and 271(b). Local No. 249
found employment for many strikers through its hiring
hall, and others found employment with Eazor’s compet-
itors by calls placed to the strike leaders by Local No. 249
stewards employed by the competitors (J.A. 194; Proposed
Annotated Liability Findings Nos. 267-270, J.A. 332-333).

The Petition, echoing the Opinion of the district court
(App. 16a), states that the Union members reacted angrily
to whatever efforts Union officials did make to persuade
them to return to work. This is misleading. The President
of Local No. 249 testified that, at the inception of the
Strike, his men seemed angrier with the Union than with
their employer and most of them wanted to return to work
(J.A. 2884-2892). Various rank and file members of Local
377 testified to their desire to work throughout the Strike
(J.A. 1077-1078, 1820-1822, 1308, 1315, 1332). However, as
the Strike continued, it was characterized by the acceler-
ating pattern of violence and threats of violence described
in the Teamsters’ Petition.

F. Eazor’s Efforts to Obtain Judicial Relief

On August 21, 1968, Eazor and Daniels instituted one
of the two cases which are now before this Court, in the
Court of Common Pleas of Trumbull County, Ohio. In that
suit, the plaintiffs petitioned? for an injunction as well

2. The Petition specifically averred (J.A. 21): “Plaintiffs say
that by the terms of the collective bargaining agreement, defendant
Teamsters and Teamster Local are required to induce employees
to return to work at any time there is a work stoppage in violation
of the agreement and that defendant Teamsters and Teamsters
Local have wholly failed to do so or attempt to do so.”

‘
yg spencer ll

PIII NDAD ae oe See SDT NO

16

as damages (J.A. 18 et seq.). However, all of the defen-
dants, including the International and Local No. 377 as
well as various individuals, substantially prevented the suit
from having any immediate or substantial effect on the
work stoppage by entering an appearance by a single attor-
ney—the regular lawyer for Local No. 377—and jointly
removing to the United States District Court in Cleveland
(J.A. 28 et seq.).

The Federal Court did not enter a restraining order,
even as to violence, until September 4th (J.A. 4730-4731)
and declined to hear evidence on plaintiff ’s application for
a preliminary injunction until September 12th (J.A. 3088-
3089). As a consequence, the defendants were able to pre-
vent the Ohio Court from entering either a restraining
order or an injunction against obstructive picketing as well
as violence. In Pittsburgh, Eazor filed separate suits. In the
first, filed in State Court, Eazor sought only injunctive
relief (876a), and appropriate orders were entered promptly
and enforced by the Allegheny County Court throughout
the Strike. The second Pittsburgh suit, which is now before
this Court, was instituted in the District Court for the
Western District of Pennsylvania on August 24, 1968 (J.A.
52, et seq.); there, Eazor sought only damages.

G. Termination of Strike

On September 17, 1968, after first according all Local
No. 377 strikers, other than the initial two grievants and
the over-the-road steward and his two committeemen, two
opportunities of returning to work without penalty, Eazor
permanently closed the Daniels terminal at Warren and
discharged all strikers employed there (J.A. 199-201). This
action was taken after the Warren strikers rejected the
recommendations of their own lawyer (J.A. 2602), and
ultimately, their own union officials, that they return to
work on this basis and insisted that none of them would
return unless all, with the possible exception of the original

17

dischargees, were accepted back (J.A. 2207-2211, 2221-
2225, 2602-2604).

Up to this point, Eazor had discharged no Local No.
249 members other than the road steward, one of his
committeemen, and a third strike leader, and even that
action had not been taken until September 9th, twenty days
after the Strike began (J.A. 193). On September 17th, at a
meeting at the International headquarters in Washington,
Eazor offered to permit even these leaders to return to
work, pending arbitration of grievances which might be
filed as the result of their discharge, but the offer was re-
jected by the Unions (J.A. 2390-2392). At the end of the
meeting, the International official chairing the meeting
told Thomas Eazor: “Everybody goes back to work or
nobody” (J.A. 2392, 2422).

On September 18, 1968, hundreds of strikers made a
mass attack on a convoy of Eazor trucks in Pittsburgh (J.A.
199-200, 1973-1974, 2603-2604, 2296-2298, 2394-2395).
Eleven Local No. 249 members? were arrested, and,
following trial, they were convicted and imprisoned for
criminal contempt of court by the Court of Common Pleas
of Allegheny County (J.A. 200, 1115-1117).

On September 24, 1968, after the Supreme Court of
Pennsylvania refused to stay execution of these sentences,
Local No. 249 officials permitted its striking members to
vote, for the first time by secret ballot, on whether to return
(J.A. 202, 1767-1773, 1792). They voted to do so, and the
President of the Union and the strike leaders led all of the
men back to work on September 25th (J.A. 1222-1224,
1587-1591, 1795, 2895).

The Petition on page 11 quotes squibs from a letter in
which Eazor told the strikers that they had “defied the Inter-
national Union * * * (and) * * * defied the Local Union”
(2 J.A. (Exs.) 362a). This letter was written very early in

3. Contrary to a statement in the Petition (page 10), those
jailed did not include any of the stewards or committeemen who led
the Strike.

Pst nT |

18

the Strike, and its author explained that, at the time, he was
relying on telegrams from Union officials repudiating the
Strike, but that, as time passed and none of the strikers re-
turned, he came to conclude that the Strike was actually
being supported by the Unions (J.A. 2289-2290). The Peti-
tion also quotes from a note which an Eazor labor relations
representative sent to the General President of the Inter-
national on September 6th, thanking him “for your help in
this endeavor” (4 J.A. (Exs.) 1158a). The “endeavor” re-
ferred to in this connection was to have the Unions take
action against a Local 249 steward who was interviewed on
television about the Strike, spoke in favor of it, and stated,
among other things, that the strikers were receiving help
from their Union (J.A. 422a). As a matter of fact, this ste-
ward was never removed during the Strike by either the
International or the Local. The President of Local 249 testi-
fied as a witness on his behalf in the post-Strike arbitration
proceedings (J.A. 205), and Normal Kegel, a general or-
ganizer for the International who was a member of the
Grievance Committee which deadlocked on this issue pre-
vious to the arbitration, voted against this steward’s dis-
charge (4 J.A. Exs. 864a).

H. Pretrial Proceedings
Some of the Reasons assigned in the Petition for the

granting of a writ of certiorari pertain to the decision of the
court of appeals to modify and affirm the decision of the

district court rather than to remand for further findings. ”

To understand this fully, this Court must be familiarized
with the extraordinary manner in which this case was
handled in the trial court.

This case was assigned to Judge Hubert T. Teitelbaum
in January, 1971, very shortly after Judge Teitelbaum’s
appointment to the bench (J.A. 6, 11).

After taking scores of depositions, plaintiffs’ counsel
met repeatedly and at length with counsel for the various
defendants and eventually secured a 44-page Stipulation

19

of Undisputed Facts (J.A. 161-225). This documented,
among other things, the International’s involvement with
the National Master Freight Agreement and the uniform
failure on the part of all of the defendants to take or
threaten to take any action to discipline any of the un-
authorized strikers or their leaders (J.A. 166-168, 170-171,
203).

At the final pretrial conference, held April 14, 1972,
Judge Teitelbaum announced, for the first time, that he
had decided to bifurcate the trial as to liability and dam-
ages for the purpose, he said, of encouraging settlement
after he had decided the liability issues. He persisted in
this ruling even though he was advised by plaintiffs’ coun-
sel that there was no possibility of settling the case, and
that almost all of the witnesses who would testify as to
damages would also testify as to liability (J.A. 958-965).

I. The Trial as to Liability

Throughout the trial, Judge Teitelbaum consistently
and repeatedly adopted arbitrary postures consistent with
his achievement of the following objectives:

(a) Limiting the admission of evidence which
would justify imposing liability on any of the defen-
dants on a basis which would directly implicate the
unions or their top officials in actually authorizing the
strike;

(b) Creating or finding some basis which might
justify limiting the damages to be awarded if liability
were imposed, and

(c) Inducing the parties to settle for a sum which
would compensate the plaintiffs only for the direct
damages, and perhaps only partially, which they sus-
tained during the strike itself.

The actions of the trial judge, which are the basis of
our assertions concerning his fixed points of view, include
incidents recorded at the following points during the

20

presentation of plaintiffs’ evidence as to liability: during
Gilmer testimony (J.A. 1193-1197, 1200-1205, 1210-1211,
1220-1221); during Malivuk testimony (J.A. 1537-1586);
during testimony of Local No. 377 “rank and filers” (J.A.
1286-1290, 1308-1309, 1317-1318, 1325-1326); during
Airesman testimony (J.A. 2052-2056); Cf. rulings during
O'Neill testimony (J.A. 2521-2522); during McGeough testi-
mony (J.A. 2178-1280).

After plaintiffs rested as to liability, Judge Teitelbaum
recessed the trial and gave the defendants, who had con-
ducted no discovery by depositions, five weeks to respond.

When trial resumed on June 27th, the first defense
witness was John J. O'Neill. O'Neill had given a deposition
prior to trial in which he purported to have no recollection
of anything that occurred immediately after a grievance
meeting of August 20, 1968, which immediately preceded
the Strike (J.A. 2647-2649). In the same deposition, O'Neill
freely and expressly conceded that he was the only Local
No. 377 officer involved in handling the Strike (J.A. 267,
2678-2679), and that the International had taken no steps
whatever to terminate the Strike other than sending a
telegram at the Strike’s inception (J.A. 2014-2016). This
same fact was specifically conceded in the Pretrial Stipula-
tion with respect to undisputed facts (J.A. 194-196).

However, when O'Neill was called as a defense wit-
ness at trial, he purported to have a complete recollection
of the events which took place immediately after the griev-
ance meeting of August 20, 1968, and during the following
days; of his having allegedly warned his members immedi-
ately prior to the Strike against striking, and of his alleged-
ly having instructed his stewards against participation in
the Strike when they allegedly consulted him on the day
the Strike began (J.A. 2528-2536). O'Neill also purported
to have a detailed recollection of a series of meetings and
conversations during the Strike between himself and Wil-
liam Presser, an International vice president from Cleve-
land, in which Presser allegedly attempted to persuade the
Local No. 377 members to return to work (J.A. 2540-2541,
2551-2558).

21

Presser had never been identified as a defense witness
prior to trial and was never called as a witness.

In the course of O’Neill’s direct examination, Judge
Teitelbaum asked him a leading question, the obvious
purpose of which was to have O'Neill state, as he did, that
there was allegedly a time, in early September, 1968, in
which the Local No. 377 strikers allegedly would have
returned to work had Eazor chosen to limit its sanctions to
the original two grievants and the strike leaders, but that
Eazor, allegedly, rejected an offer to settle on this basis
(J.A. 2560-2561, 2568-2569). .

Plaintiffs’ counsel commenced a lengthy cross-exam-
ination of O’Neill, to establish his general and specific lack
of credibility. In the course of the questioning, Judge Teitel-
baum accused plaintiffs’ counsel of “pursuing the tactics
of Don Quixote” (J.A. 2631-2632) and repeatedly suggested
that O'Neill, when confronted with contradictions between
his testimony at trial and his deposition statements, answer
questions by stating “I don’t know” or “I don’t recall” (J.A.
2644-2645, 2647-2662).

Plaintiffs’ counsel concluded his cross-examination
on June 27, 1972, by establishing that O’Neill’s testimony
with respect to the settlement offer allegedly made to and
rejected by Eazor in a courtroom in Cleveland, which the
Judge had developed in his own questioning of O'Neill, was
directly contrary to the following statement by O'Neill in
a discovery deposition (J.A. 2668-2669):

“There was no discussion with me about any
settlement. There were meetings with the Judge and
the opposing lawyers. I was not party of any discus-
sions of any settlement.”

At this point, the court recessed for the day and Judge
Teitelbaum summoned all counsel to chambers; he stated
that, on the basis of O’Neill’s testimony, he felt he could
award no damages after the point at which Eazor had al-
legedly arbitrarily refused to settle. The Judge’s expressions
seemed unshaken by statements of plaintiffs’ counsel to the

ANT IR PH GR en |

22

effect that O'Neill's testimony on this subject was contrary
to his deposition and would be contradicted.

Judge Teitelbaum was taken ill during the night; as
a consequence, trial did not resume until August 28th.
When the cross-examination of O'Neill resumed, the Judge
permitted him to give unresponsive answers to questions
which, if answered responsively, would have established
that the Local No. 377 strikers had rejected an alleged
union proposal for settlement on the basis allegedly submit-
ted to and rejected by Eazor when that proposal allegedly
was made to them by International Vice-President Presser
earlier the same week (J.A. 2683-2686).

Other cross-examination established that testimony
which O'Neill had given on direct examination on June
27th had been based on statements made to him by others,
rather than his own knowledge. Plaintiffs’ counsel moved
to strike the original testimony as hearsay, and Judge
Teitelbaum angrily denied the motion on the ground that
the motion was “way out of time.” When plaintiffs’ counsel
pressed the point, he was accused of being “fresh with the
~ court.” The Judge added that he had allowed plaintiffs’
counsel “to put in evidence liberally,” and, when plaintiffs’
* counsel denied that this was so, the Judge held him in con-
tempt and fined him $50 forthwith (J.A. 2691-2692).

Judge Teitelbaum overruled an objection by plaintiffs’
counsel and permitted counsel for Local No. 377 to lead
another of his witnesses so that his testimony would accord
with that of Mr. O'Neill with respect to the efforts which
O'Neill testified he had made to persuade this witness not
to strike on the day the Strike occurred, after the first
answer of this witness was directly inconsistent with
O'Neill's testimony; in overruling the objection, the Judge
described the leading as “harmless” (J.A. 2703).

The Judge permitted counsel for Local No. 377 to call
Local No. 377 officials Eliser and Seidita to testify with
respect to the efforts which O'Neill allegedly made to
prevent or terminate the Strike, even though O'Neill, in his
discovery deposition, had not claimed that either of these

23

men was involved in efforts to control the Strike (J.A.
2678-2679), and even though neither man was identified
as a witness in Loca] No. 377’s Pretrial Memorandum or
its Supplement filed in June of 1973 (J.A. 2793-2795, 2801-
2806).

In rebuttal, plaintiffs called Robert Eazor and John
W. Pelino, Esquire, who represented the plaintiffs at the
negotiations in Cleveland at which O’Neill claimed there
had been the offer to settle which Judge Teitelbaum felt to
be reasonable. Both denied that any such offer was ever
made (J.A. 2312-2313, 2316-2317, 3085-3086).

J. The Trial Court’s Decision as to Liability

The trial] court rendered its decision as to liability on
March 30, 1973 (App. 2a-20a). The court did find that the
International as well as the Locals was a party to the con-
tract, but had little choice but to so conclude on the basis
of the Agreement itself and the facts admitted in the Pre-
tria] Stipulation.

With respect to plaintiffs’ prime contention, namely,
that the Unions were liable for the Strike from its inception
because the same was called by O'Neill, the court found for
the defendants, although conceding that “* * * the cir-
cumstances and sequence of events (surrounding the incep-
tion of the Strike) are undeniably suspicious” (App. 6a-8a).

The court imposed liability on all defendants for fail-
ure “to exercise every reasonable means to end the strike.”
But he greatly weakened that conclusion by summarizing
and accepting at face value the testimony belatedly given
by union officials, such as O'Neill, as to their alleged efforts
to terminate the Strike (App. 12a-15a).

K. The Trial as to Damages

The Petition notes at several points that the trial as
to damages was lengthy, but gives no inkling as to the

Let TOE,

24

nature of the testimony offered or the reasons why eleven
trial days were required.

By a series of orders entered prior to the final pre-trial
conference and at that conference, the court had made very
clear that the trial was to proceed without further discovery.
The damage schedules on which plaintiffs were to base
their direct testimony on damages at trial were identified
in the Pretrial Stipulation (J.A. 214), and copies had been
furnished to defense counsel before the final pretrial con-
ference (J.A. 3590-3591). Nevertheless, the defendants, for
reasons of their own, had elected to pursue no discovery
with respect to damages.

However, after the first phase of this case had been
decided and trial on the issues of damages scheduled to
begin on May 7, 1973, the court scheduled another pretrial
conference at the request of Sidney Dickstein, Esquire, of
Colson and Shapiro, whose appearance for the Interna-
tional had been entered when the Court was considering
the liability issues. At this conference, plaintiffs were re-
quired to provide Teamster accountants with immediate
access to all Eazor documents which supported their claim.
Plaintiffs’ counsel agreed to this on the basis of representa-
tions that 34% days would be required for the inspection
and with the expectation that at the conclusion of the in-
spection, the defendants’ attorneys would indicate to plain-
tiffs’ counsel any areas in which their experts found them-
selves in disagreement with the plaintiffs’ schedules, so
that, hopefully, any adjustments indicated could be agreed
to and the time for trial shortened (J.A. 3602-3603, 3800-
3801, 4035).

Pursuant to this understanding, plaintiffs did make
their books and their director of accounting, Michael Bache,
available, and the defendants sent six accountants to plain-
tiffs’ place of business; those men spent 31 days inspect-
ing documents in the first week of May, 1973, and at Noon
on May 5th, their chief advised plaintiffs’ counsel that
their work was concluded (J.A. 4154). However, on May
7th, when plaintiffs’ counsel asked defense counsel inform-

PLES EI TIAA SLD: PREY Oy AT ODN IE ETE NNO

25

ally concerning the results of the inspection and the pos-
sibility of reaching agreement, they refused to furnish any
information whatever as to the findings of their account-
ants.

Plaintiffs’ first witness with respect to damages was
Robert Eazor, plaintiffs’ president. Very early in Mr. Eazor’s
direct examination, when he was testifying on an entirely
different matter, Judge Teitelbaum asked counsel for Local
No. 377 to refresh his recollection as to testimony “* * *
that on a certain date there was a meeting when the men
said they would go back to work if everybody was put back
to work and then they would arbitrate the certain people
who were in contention” (J.A. 3440-3441).

In their Pretrial Memorandum, plaintiffs identified
their damage schedules and their own executives, Thomas
and Robert Eazor and Michael Bache, as witnesses (J.A.
132, 123), and the trial court conceded that Robert Eazor
is expert in operating a trucking company (J.A. 3252).
Nevertheless, Judge Teitelbaum displayed grave initial re-
luctance to permit Mr. Eazor to express any opinions, even
on such general matters as to whether, had it not been for
the Strike, Eazor would have earned a profit during the
Strike months directly involved (J.A. 74-76, 89-90, 99-100).
The Judge reconsidered, but, shortly thereafter, summoned
counsel to sidebar and indicated that he intended to attach
little weight to Mr. Eazor’s opinions unless they were other-
wise supported; plaintiffs’ counsel pointed out, in response,
that the opinions of Mr. Eazor would be entitled to substan-
tial weight if, as ultimately proved to be the case, none of
them was contradicted by any expert or factual testimony
offered by the defendants.

An important feature of plaintiffs’ damage claim was
evidence that, from the time the Strike ended until the con-
clusion of the damage claim period on March 31, 1970,
plaintiffs sustained a continuous loss of volume in general
commodities traffic averaging approximately 10,000 tons
per month (J.A. 3240-3241; 638a-639a). Robert Eazor testi-
fied that this problem was at least partially attributable to

SS GR GOED TL BP LOE LL ADI Bg DR AD ERR 6 EE EP, ee ai

26

plaintiffs’ loss of hundreds of experienced drivers during
the Strike, its inability to replace them at all for many
months, and with satisfactory drivers for a much longer
period (J.A. 3239-3243, 3287, 3359-3360). The testimony
as to the shortage of drivers was fully corroborated by
reports which Eazor and Daniels filed at the time with the
ICC (1161la). Nevertheless, Judge Teitelbaum commented,
as soon as he heard the testimony, that the claim was “high-
ly speculative” (J.A. 3267).

Plaintiffs’ second witness as to damages was the sales
manager for Daniels and the person most familiar with the
sales patterns associated with the Warren terminal (J.A.
3500-3504). This witness testified to a complete loss of
business from specific Warren customers and to a perma-
nent impairment in the volumes of freight shipped by five
others after the Strike. He also testified to the contempo-
raneous statements of those shippers as to their reasons for
providing Daniels with no, or only limited amounts of
freight when their business was solicited after the Strike,
i.e., the customers had turned to alternative sources and
were satisfied with them (J.A. 3504-3568). Although this
testimony was clearly admissible as indicating the then cur-
rent state of mind of the customers, and plaintiffs cited the
cases which so held, Judge Teitelbaum said at the time that
he would not consider the testimony, and ultimately he
did not do so (J.A. 3522-3525, 3239-3240).

Plaintiffs’ third damage witness was Michael Bache.
Bache did not testify until May 10, 1973, at which point
the defendants’ accountants had been meeting with him
and examining the plaintiffs’ damages schedules and sup-
porting records for one week (J.A. 3588-3589). There is a
Rule in the trial court which requires parties to furnish
each other with copies of “all reports * * * of any expert
whom a party expects to call as a witness at-trial” (J.A.
3591). The Pretrial Stipulation filed with the Court on April
13, 1972, referred to a series of schedules prepared by Mr.
Bache which set forth in detail the calculations on which
plaintiffs’ damage claims were based (J.A. 214). It was these

PPL LE PRO LYIY FOP NENA P) SO ROM

27

very schedules which the Teamsters’ accountants began
auditing the week before trial began (J.A. 3594).

Immediately before Bache testified, plaintiffs’ counsel
asked defendants’ counsel for copies of the reports of their
experts (J.A. 3568-3589). Mr. Dickstein claimed that his
accountant had not yet completed his report “and it would
to a very large extent * * * depend” on what Mr. Bache
would testify (J.A. 3589). Counsel for Local No. 377 stated
that he was not required to comply with counsel’s demand,
because plaintiffs themselves had not complied with the
local Rule (J.A. 3589-3590). Plaintiffs’ counsel argued that
production of Mr. Bache’s schedules constituted compli-
ance, but Judge Teitelbaum ruled, without even looking at
the schedules, that they did not (J.A. 3590-3595). He then re-
quired plaintiffs’ counsel to call Mr. Bache as a witness
without being furnished in advance with the copies of any
reports from Teamster accountants on the ground that, un-
less plaintiffs’ counsel was willing to proceed on this basis,
the court would not permit Mr. Bache to testify at all (J.A.
3592-3597).

As was to have been anticipated under the circum-
stances, Bache’s cross-examination proved to be a long and
tortuous one (J.A. 3781-3963), devoted principally to ques-
tions establishing that the monthly operating statements
on which Bache’s testimony as to operating losses was
based included estimates and so-called “flopover” items, i.e.,
items related to prior periods, which plaintiffs’ counsel had
anticipated would be adjusted after they were audited by
Teamster accountants, and had they furnished reports (J.A.
3801). Accordingly, plaintiffs closed their case with the ex-
press understanding that Bache would be called in rebuttal
if, as anticipated, the Teamsters accountants testified to
proposed adjustments of Bache’s figures (J.A. 4035-4038).

The International called as its first witness John
Dwyer, the most senior of the four accountants retained by
the International, who, by this time, had spent approxi-
mately 35 man-days examining Eazor records (J.A. 4154-
4170). Dwyer testified to adjustments to Bache’s schedules

PODS cone |

28

which, if accepted, would have indicated that Eazor sus-
tained a loss of only $475,000 during the months of August
and September, 1968 (1167a). Nevertheless, Dwyer ex-
pressly limited his testimony to adjustments which he had
made in Bache’s figures and refused to express an opinion
as to whether, in fact, Eazor would have sustained a loss in
either August or September, 1968, had it not been for the
Strike, or the amount of such loss (J.A. 4079, 4081, 4083).
Likewise, he was neither asked, nor did he testify to, his
opinion as to the validity of plaintiffs’ contentions concern-
ing the long-term consequences of the Strike.

At the end of the first day of Mr. Dwyer’s cross-
examination, the Judge had a brief discussion with plain-
tiffs’ counsel and Mr. Dickstein, which has not been tran-
scribed. In essence, after noting the vast discrepancy be-
tween the Bache and Dwyer figures, the Judge asked whe-
ther counsel could not agree on some intermediate figures.
In that connection, the Judge commented that it “should
come as no surprise to Mr. Monteverde” that he had no
intention of awarding any post-strike damages.

After Dwyer’s first day, there was a four week recess
during which Eazor’s Accounting Department prepared
revised schedules (855a, 856a) of operating losses, calcu-
lated in the manner advocated by Teamster expert Dwyer
(J.A. 4468-4471, 4575-4579). Copies of these schedules were
furnished to defense counsel when trial resumed, and they
were also supported by detailed work sheets of adjustments
(J.A. 4575-4579). Defense counsel were also tendered copies
of these and an opportunity of auditing the revised sched-
ules (J.A. 4499-4500, 4616-4620), and their accountants
were present when some of this work was being done and
suggested certain adjustments (J.A. 4577).

When trial resumed, the defendants called Mr. Bache
as their witness, and he testified, on the basis of pain-
staking efforts made since he testified in May, to each
specific adjustment which could be made in the figures
for August and September, 1968, by following the methods
adopted by Teamster accountants (J.A. 4468-4498); these

29

adjustments would have reduced the losses in those two
months to around $700,000. However, on cross-examina-
tion of Bache, plaintiffs’ counsel developed that, calculated
by the same alternative method, the loss over the five-
month period of August through December, 1968, would
very closely approximate that which would be shown as
having been sustained solely in the months of August
and September, 1968, by following Bache’s original account-
ing method. Bache also demonstrated that the nature and
extent of the 1.1 million dollar loss disclosed by both
methods could also be confirmed by working back from
Eazor’s year-end audited figures, and by calculating the
loss solely on the basis of the gross profit lost on the revenue
which the evidence showed was lost through the period (J.A.
4603-4640; 855a-856a).

L. The Trial Court’s Decision as to Damages

Contrary to assertions made in the Teamsters Petition,
Bache’s revised schedules did not constitute a substitution
by plaintiffs for their origina] schedu'es, which were based
on plaintiffs’ operating statements. The purpose of the re-
vised schedules submitted in rebuttal was to show that, no
matter which of four methods one followed in calculating
the direct Strike losses, the final figures were approximately
the same.

Judge Teitelbaum filed his opinion as to damages
(App. 2la-27a) on June 10, 1974. He found that Eazor-
Daniels actually sustained losses of One Million Seventy-
nine Thousand Three Hundred Thirty-two Dollars ($1,079,-
332) during the Strike months of August and September,
1968 (J.A. 676), and this figure conformed exactly to cal-
culations made on the basis of Eazor’s actual operating
statements for those months, adjusted so as to substitute
actual expenses for certain expenses which were only esti-
mated when the original statements were prepared (855a).

He concluded that plaintiffs would have earned no
profit during the Strike months even without the Strike (J.A.

aan at. |

30

26a-27a), and he refused to assess the defendants with
liability for any of the damages which plaintiffs sustained
during the Strike but subsequent to September 9, 1968, on
the ground that, on that date, allegedly, Eazor rejected the
alleged Union offer to have all striking employees return to
work pending the arbitration of the original two discharges
and the subsequent discharges of the strike leaders (App.
33a-36a).

Judge Teitelbaum also rejected in its entirety plaintiffs’
claim for damages continuing after the Strike, including
$264,000 in interest expense, on the alternative grounds
that such damages were not foreseeable and in any event
were attributable to some other cause (App. 26a-30a).

Finally, the trial court deducted from the August and
September losses $52,108 which plaintiffs’ paid for counsel
fees (App. 36a). This decision was based on the Judge’s con-
clusion “... plaintiff has failed to sustain its burden of
proving what portion, if any, of the legal expenses it in-
curred were directly related to the strike”. This, too, was
directly contrary to the Record and a position which not
even the defendants had taken in their Briefs.

Again, although specifically requested to do so, the
Judge refused to support his decision with any detailed find-
ings, and many of his most important conclusions in-
volved an arbitrary refusal to consider very material
facts established by evidence which was both uncontra-
dicted and unimpeached.

M. The Decision of the Court of Appeals

The long and carefully crafted Opinion of the court
of appeals was written by Senior Judge Albert B. Maris.
There were no dissents, and a petition for rehearing was
denied. In summarizing that decision in the Statement of
the Case and, indeed, throughout their Petition, petitioners
create the impression that the courts below held that a duty
to use every reasonable means to terminate a strike not
authorized by a union at its inception is to be implied from

31

every “no strike” clause. But what the court below actually
held was that the particular no strike clause involved in
this case, because of its wording, included such a collateral
obligation (App. 52a-56a).

Petitioners, in their Statement of the Case, also fail to
characterize either accurately or completely the alternative
grounds assigned by the court of appeals for imposing
liability. The “mass action theory” was applied here
because the evidence, summarized previously herein,
showed that, from the inception of the walkout and for long
periods thereafter, every single one of the approximately
six hundred members of the defendant local unions who
were employed by the plaintiffs participated in the Strike
(App. 5la; J.A. 2296-2297), and that the picket lines estab-
lished by those strikers were observed by members of other
Teamster locals throughout the Eazor-Daniels system (J.A.
345-346), even though, under the National Master Freight
Agreement, all of the Eazor-Daniels Teamsters were mem-
bers of a single bargaining unit and parties to a contract
which prohibited strikes pending exhaustion of remedies
available under the grievance procedure (J.A. 256; J.A.
1418). The court of appeals noted that the premise of the
“mass action theory” is that “large groups of men do not act
collectively without leadership”, and that it is for that
reason that “a functioning union must be held responsible
for the mass action of its members” (App. 57a).

Also relevant to the court’s imposition of liability
under the “mass action theory” was its related findings that
“* * * here, * * * job stewards and committeemen,
union functionaries * * * instigated, participated in, or
actively encouraged members to continue their unautho-
rized work stoppage * * *” (App. 57a); that union liability
under these circumstances can be based on common law
agency principles (App. 57a); and that “* * * a principal
may ratify, by subsequent conduct inconsistent with
repudiation, an agent’s unauthorized acts earlier dis-
affirmed by the principal * * *” (App. 58a). In this con-
nection, the court pointed out (App. 58a) that ether courts

a ate |

32

which have imposed liability upon the theory of mass
action or agency or both “* * * stressed the failure of the
unions involved to take steps, other than written and oral
exhortation, speedily to terminate illegal strikes as an indi-
cation of passive acquiescence in the strike” (App. 58a).

The court of appeals considered, and rejected, Union
arguments based on the so-called “steward’s clause” in
the National Master Freight Agreement on the ground that
its purpose was to limit union liability “for any unautho-
rized acts” of job stewards and their alternates (App. 52a-
53a). Considered, too, was language in the Central States
Supplements (App. 53a-54a) purporting to absolve the
Union from liability “for damages resulting from * * * unau-
thorized acts of its members” during unauthorized strikes.
The court noted (App. 53a-54a) that, in the very next sen-
tence of the same supplements, the Unions agreed, not-
withstanding, to “* * * undertake every reasonable means
to induce such employees to return to their jobs during any
such period of unauthorized stoppage of work * * *.” There-
fore, the court of appeals said (App. 53a-54a), the second
limitation of liability, like that pertaining to the unau-
thorized acts of job stewards, “* * * did not relate to or pur-
port to relieve the unions from their own express promise
‘that there shall be no strike . . . without first using all possi-
ble means of a settlement * * * of any controversy which
might arise.’ * * * It was the breach of this obligation by
the unions, not any responsibility for the particular unau-
thorized actions of their members, which generated liability
on their part” (App. 55a).

The Petitioners also state, in their summary of the
decision of the court of appeals, that the court “in effect
converted the ‘every reasonable means’ obligation into a
duty to hold Eazor harmless from any damages resulting
from the strike.” But what the court of appeals actually said
was this (App. 59a-60a):

“* * * no effort was made to discipline or remove
the job stewards and committeemen who were organ-

33

izing and leading the strikes,* to suspend or fine the
striking union members, to place the local unions in
temporary trusteeship, or even, until the very end of
the strike, to take the votes of union members by secret
ballot. Stronger measures, such as these, were indi-
cated, were available and should have been taken to
the extent necessary.

“* * © whether the use of the stronger measures
which were available would actually have been suc-
cessful in ending the strikes is beside the point. It was
highly probable that they would have been since the
use of only one of them in an earlier strike by a Team-
sters local against Eazor had been sufficient to end it.4
The point here is that the unions were contractually
obliged to carry out their agreement that there should
be no strike by employing all reasonable means avail-
able to them to seek to end the existing unauthorized
strikes and this they failed to do. Ilaving thus chosen
not to try out those stronger measures which were
available, indicated, and probable of success they
cannot be heard to say that such measures, if em-
ployed, would not have been successful in ending
the strikes in this case and that, accordingly, it was
not necessary to try them * * *.”

Although the court of appeals did not specifically
allude to this, its conclusions in this regard were also but-
tressed by the evidence of Fazor’s previous problem free
labor relations history and Thomas Eazor’s splendid rela-
tionship with the Eazor men in Pittsburgh prior to the

4. That such discipline has been successfully used by a Team-
sters local and that its use might well have been successful here is
indicated by the case of an unauthorized sirike by members of Lcecal
241 of the Teamsters International Union against Eazor at Sharon,
Pennsylvania during the April, 1968, strike (see page 11, supra)
which ended at Sharon when a steward who refused to cross the
illegal picket line was removed by the officers of the local union
and another put in his place who led most of the strikers back to
work across the picket line (J.A. 273, 291-292).

34

Strike (J.A. 2883, 2895); the fact that only two Local No. 377
men, with resort to the grievance procedure, were involved
in the origin of the Strike (J.A. 998-1024, 1079-1081); testi-
mony that only 9-10 men at Warren objected to Eazor man-
agement and that some Local 377 men wanted to work
throughout the Strike (J.A. 1077-1078, 1820-1822, 1308,
1315, 1332), and the admission by the President of Local
No. 249 that, at the inception of the Strike, the men in Pitts-
burgh were angrier with the Union than they were with
Eazor, and that most wanted to return to work (J.A. 2884-
2892).

With respect to damages, the Petitioners claim that
the court of appeals sanctioned the trial court’s failure to
make specific findings as to the steps which it followed in
establishing plaintiffs’ direct strike loss to be $1,079,332,
and that the court of appeals then refused to reexamine the
lower court’s decision on this issue. Actually, as noted
supra, the finding of the trial court in this regard was in
accordance with Proposed Findings of Fact (J.A. 452-508)
and Briefs (Supplemental Appendix 176b-241b, 332b-
437b), all based upon and carefully annotated to the
Record, submitted to the trial court by plaintiffs and
printed in the Appendices below, along with the responsive
sets of Proposed Findings and Briefs filed by the defendant
Unions. The Unions, in their primary Brief below (pp. 40-
41), pointed out that “* * * there were no issues of credi-
bility, but only questions as to which approach (of the
competing accountants) appeared the more persuasive
* * *"; then the Teamsters themselves suggested that this
issue was one which “the appellate court may proceed to
decide * * * without remand.”

That the court of appeals did not accept the lower
court’s decision on this issue arbitrarily, but only after
reviewing the evidence itself, is also clear from its Opinion.
(App. 65a).

Nor was the court of appeals cavalier, as the Peti-
tioners imply, in its review of the trial court’s award of
pre-judgment interest. The court of appeals noted (App.

35

76a): “When damages resulting from a breach of contract
are ascertainable with mathematical precision, pre-judg-
ment interest is awardable as a matter of right. If * * *

the claim is not for a liquidated sum but is nonetheless
pecuniary rather than personal in its nature many courts
will add pre-judgment interest to the amount which they
find would have been just compensation at the time of the
breach, when in the exercise of their discretion it appears
necessary to do so in order to arrive at fair compensation
* * *” Then, the court held that these were appropriate
rules for discretionary application in this case, and that the
district court had not erred in their application (App. 77a).

pal Lae

36
REASONS FOR DENYING THE WRIT

I. IN ImposinG LIABILITY, THE Court BELow DecipEp No
“QUESTIONS OF ALMOST UNIVERSAL ImvorT” But,
RATHER, PROPERLY INTERPRETED THE PARTICULAR
CONTRACT INVOLVED IN Tuts CASE.

A. The Contract Imposed Duties With Respect to All
Strikes.

While the court of appeals did refer to matters of
general policy by way of justification for its ultimate con-
clusion on the liability issue, the fact is, and the Opinion
of the court of appeals makes very clear, that the decision
in this case was based on the language of the particular
contract involved and not on matters of general labor
policy (App. 52a-56a).

Set forth below are the comparable provisions of the
Local Supplements involved which, with the National
Master. Freight Agreement of April 1, 1967, were all nego-
tiated contemporaneously on behalf of all of the Unions
involved by the National Union Committee of the Interna-
tional Brotherhood of Teamsters (J.A. 166-167, 169-171):

Teamsters Joint Council ment, as provided for in this
No. 40 (Local 249) Agreement, of any contro-
Supplements versy which might arise.
(J.A. 305a-307a )
(The balance of this section
Article 44. describes the step by step
procedure to be followed in

Section 1. The Unions ana handling grievances.)

the Employers agree that

there shall be no strike, lock- (There is no provision com-
out, tie-up, or legal proceed- parable to Section 2 of Arti-
ings without first using all cle 43 of the Central States
possible means of a settle- Area Supplement.)

37

Central States Area—Ohio
(Local 377) Supplements
(J.A. 348a-350a )

Article 43.

The Unions and the Em-
ployers agree that there
shall be no strike, lockout,
tie-up, or legal proceedings
without first using all possi-
ble means of a settlement,
as provided for in this Agree-
ment, of any controversy
which might arise.

Section 1. (This section is
devoted entirely to a de-
scription of the step by step
procedure to be used in
handling grievances. )

Section 2. It is further mu-
tually agreed that the Local
Union will, within two
weeks of the date of the sign-
ing of this Agreement, serve
upon the Employer a written
notice, which notice will list
the Union’s authorized repre-
sentatives who will deal
with the Employer, make
commitments for the Union
generally, and in particular
have the sole authority to
act for the Union in calling
or instituting strikes or

any stoppages of work, and
the Union shall not be liable
for any activities unless so
authorized. The Union may
from time to time amend its
list of authorized represen-
tatives by notification by
Certified Mail. It is further
agreed that in all cases of an
unauthorized strike, slow-
down, walk-out, or any un-
authorized cessation of work
in violation of this Agree-
ment the Union shall not be
liable for damages result-
ing from such unauthorized
acts of its members.

While the Union shall un-
dertake every reasonable
means to induce such em-
ployees to return to. their
jobs during any such period
of unauthorized stoppage of
work mentioned above. it
is specifically understood
and agreed that the Em-
ployer during the first
twenty-four (24) hour period
of such unauthorized work
stoppage shall have the sole
and complele right of rea-
sonable discipline short of
discharge, and such Union
members shall not be en-
titled to or have any re-

5. This emphasis has been supplied by the writer of this Brief.

38

course to any other provi-
sions of this Agreement.
After the first twenty-four
(24) hour period of such
stoppage, and if such stop-
page continues, however,
the Employer shall have the
sole and complete right to
immediately discharge any

Union member participat-
ing in any unauthorized
strike, slow-down, walk-out,
or any other cessation of
work, and such Union mem-
bers shall not be entitled
to or have any recourse to
any other provision of this
Agreement. * * *

A fair reading of the parallel provisions quoted above
establishes clearly that both involve identical prohibitions
against strikes, but that the Central States Area (Local 377)
Supplements include additional language whose purpose
was to limit Union liability somewhat for strikes which
were not authorized at their inception by a designated
union representative, while preserving, nevertheless, the
Unions’ duty to exercise “every reasonable means” to
end such strikes, even if unauthorized, which duty would
necessarily be implied from the initial “no strike” pledge
found in both forms of Supplement if they were standing
alone.

This is exactly what the court of appeals said on this
(App. 55a-56a):

“* * * The reference in the clause to an ‘unau-
thorized stoppage of work mentioned above’ is a recog-
nition that this obligation exists notwithstanding the
unions’ release from liability for its members’ unau-
thorized strike activities which is contained in the
immediately preceding paragraph. Moreover, the
clause functions here as a drafting device to make
it clear that the right which the paragraph confers on
the employer does not operate to abrogate that union
obligation, which is to continue side-by-side with the
employer's right. Thus the recital is a recognition of
the unions’ implied obligation continuously to en-
deavor to end an unauthorized strike. Since the obli-
gation is one which is implied from the no-strike

39

clause as necessary for the fulfillment of the obligation
of that clause, it is merely recognized as existing, but
not created, by the recital of it in the preliminary
clause of the paragraph from the Central States Area
Local Cartage Supplemental Agreement which we
have quoted. And since the no-strike clause appeared
in all the supplemental agreements involved in this
case, it necessarily follows that the unions had a
similar obligation under the agreements applicable
to each of them, respectively, to use all reasonable
means to end a strike existing in violation of that
clause, regardless of the presence or absence of a
recital of the obligation in the agreements to which a
particular union was a party. * * *

Furthermore, to the extent that any duty by implica-
tion was recognized to exist in this case, the feat of con-
struction involved was not substantially different from
the duty not to strike recognized to exist by implication in
Teamster Union v. Lucas Flour Company, 369 U.S. 95
(1962); Gateway Coal Co. v. Mine Workers, 414 U.S. 368,
374 (1974); U. S. Steel Workers v. Warrior & Gulf Nav.
Coal Co., 363 U.S. 574 (1960); Blue Diamond Coal Com-
pany v. United Mine Workers of America, 436 F.2d 551,
553-556 (6th Cir. 1970); Armco Steel Corp. v. United
Mine Workers of America, 505 F.2d 1129 (4th Cir. 1974).

Petitioners argue that the decision of the Third Cir-
cuit in this case conflicts with the decision of the Fourth
Circuit in United Construction Workers v. Haislip Baking
Co., 223 F.2d 872 (1955), cert. denied, 350 U.S. 847 (1955).
The international union involved in that case was not even
a direct party to the collective bargaining agreement in
issue there, and that agreement included no express obliga-
tion on the part of the union with respect to strikes. Not-
withstanding, the officials of the international union
succeeded in persuading the wildcat strikers to return to
work within two days after the walkout began, and on the
employer's terms. In the present case, the court of appeals

40

stated (App. 5la): “We do not read the Haislip case as
authority for the defendants’ position” because “* * *
there was nothing in the contract (involved in Haislip)
making the defendant union liable for * * * unautho-
rized strikes * * * or requiring that it take any action
with regard to it.”

More recently, the Fourth Circuit itself recognized this
to be a valid basis for distinction between Haislip and
Eazor and further stated that the Opinion of Judge Maris
in the present case “* * * is consistent with * * * the
views we express in this Opinion.” United States Steel
Corp. v. United Mine Wkrs. of Am., 519 F.2d 1249, 1255
(1975).

Petitioners also suggest that the decision below is
contrary to the labor relations policy espoused in H. J.
Heinz & Co. v. Labor Board, 311 U.S. 514, 523-526 (1951),
which holds that it is an unfair labor practice to refuse to
reduce a collective bargaining agreement to writing. The
duty which the court below held existed here is established
by a written contract. In that contract, the Unions specifi-
cally agreed that “* * * there shall be no strike * * * without
first using all possible means of settlement.” It is the Team-
sters, rather than the plaintiffs, who desire to have that
language rewritten. They wish the contract interpreted to
read: “* * * there shall be no strikes authorized by the
Unions * * * without first using all possible means of settle-
ment.” But that is not what the contract says.

Petitioners postulate enormous complications in nego-
tiating new collective bargaining agreements if the Eazor
decision is permitted to stand. The decision of the trial
court, which is no different on this issue than the decision
of the court of appeals, was rendered almost three years
ago, and no learned commentator has predicted, nor do
any intervening statistics indicate that affirming that
decision will have any adverse effect whatever on collec-
tive bargaining. Indeed, one author has stated, of the dis-
trict court’s decision, 19 Vill. L. Rev. 665-671 (1974),
“Perhaps the most important positive effect * * * will be

41

the promotion of cooperation between management and
labor * * * (which) * * * will be an important step in
further promoting peaceful resolution of labor disputes.”

Another specter posed by the Teamsters is the asserted
likelihood that the Eazor decision will be interpreted as
inconsistent with the holding of this Court in Mastro
Plastics Corp. v. Labor Board, 350 U.S. 270 (1956), that
even the broadest “no strike” clause does not prevent
employees from striking to prevent an employer from inter-
fering with the collective bargaining process by summarily
firing an employee solely because of his organizational
activities. That this argument is but a strawman becomes
patently clear when one considers that, in Eazor, the Third
Circuit cited with approval Penn Packing Co., Inc. v.
Amalgamated Meat Cutters and Butcher Workmen of
North America, Local 195, 497 F.2d 888 (1974), in which,
after the district court decision as to liability in Eazor, the
same Court of Appeals interpreted another union’s outright
guarantee against all strikes as an implicit obligation to do
no more than to take reasonable and timely steps to end
strikes which were not authorized by the union. Such steps
were taken by the union in the Penn Packing case, the
strike was terminated by the international union within
forty-eight hours, and no liability was imposed on the
union.

Petitioners argue (Petition, p. 21) that, heretofore,
everyone interpreted “no. strike” clauses as meaning only
that the unions involved would not “authorize, participate
in or ratify work stoppages during the life of the Agree-
ment.” No authority is cited in support of this assertion,
and this Record shows that, from the inception, Eazor
management understood that the Local and International
Unions involved had an obligation to take active steps to
terminate unauthorized as well as authorized strikes.
Eazor management testified that this was their under-
standing (J.A. 1418-1419, 1539), and no Teamster official
took the stand to state that the Unions had any different
understanding. Indeed, as noted before (Footnote 2, supra),

42

Eazor instituted suit on the day after this Strike began,
and on the basis of the same theory on which liability was
ultimately imposed.

In addition to daily telephone calls to International
officials requesting their assistance during the Strike,
Eazor officials made two trips to Washington in a fruit-
less effort to stimulate International officials to act (J.A.
1444-1448, 2329-2334, 2386). Also, during the Strike,
Eazor officials urged Union officials to take the same type
of disciplinary steps which the courts below eventually
found could and should have been taken in this case,
namely, imposing fines, removal of strike-leading stewards,
suspensions of the union privileges of strikers, and/or the
imposition of trusteeships on the locals (J.A. 2391-2392).

Petitioners also argue that management, heretofore,
has relied for protection against wildcat strikes on its privi-
lege to discharge or otherwise discipline those who lead or
participate. But, an official of the International himself con-
ceded that large scale discharge of experienced workers
who happen to be union members engaged in an authorized
strike is not a practical remedy for an employer; the
employer merely penalizes himself by the discharges,
while, as occurred here, the experienced employees ter-
minated readily obtain employment elsewhere in the
industry (J.A. 2971-2972).

Citing a 1948 prediction by Professor Cox® as to
how Section 8(a)(3) of the Labor Management Relations
Act of 1947 might be interpreted, petitioners claim that, in
holding that tnere were effective disciplinary steps, includ-
ing fines, suspension or termination of Union membership,
available to the Unions which were not taken (App. 59a),
the court below failed to appreciate that, in 1947, Congress
reduced the disciplinary powers of unions over their own
members. In N.L.R.B. v. Allis-Chalmers Mfg. Co., 388 U.S.
175 (1967), Professor Cox notwithstanding, this Court held

6. Some Aspects of the Labor Management Relations Act
1947, 61 Harv. L. Rev. 274, 298-299 (1948).

43

that a union could fine as well as expel members for cross-
ing a valid picket line; certainly the converse is true.
Indeed, in Falcone v. Dantinne, 420 F.2d 1157 (3d Cir.
1969), the court below recognized, by necessary implica-
tion, the propriety, after a due process hearing, of a union’s
decision to suspend a member, and for five years, for
advocating a strike not authorized by the union.

This Court’s decisions in Radio Officers v. Labor
Board, 347 U.S. 17 (1954), and Labor Board v. General
Motors, 373 U.S. 734 (1963), both of which are cited by the
Unions in this connection, are in no way inconsistent with
the decision of the court below here. Equally wide of the
mark are the arguments advanced at pages 23 and 24 of
the Petition with respect to the remarks of the draftsmen
of the Labor Management Relations Act of 1947. Clearly,
this is not a case in which courts have read a no strike
promise into an agreement; it is a case in which courts
have held that unions who have contractually agreed that
“* * * there shall be no strike” must take whatever
reasonable steps are within their power to terminate any
strike which violates the agreement, by attempting, among
other things, to discipline striking members. As the
Seventh Circuit noted in Sinclair Oil Corp. v. Oil, Chemical
and Atomic Workers Union, 452 F.2d 49, 53 (7th Cir.
1971), Senator Taft, in the Senate Debate on Section 301,
specifically said that “* * * wildcat strikers ought to be
disciplined if they prevent a responsible labor leader from
performing his agreement.”

Equally irrelevent here are decisions such as Porter
Co. v. NLRB, 397 U.S. 99 (1970), in which it was held that
the N.L.R.B. cannot compel an employer to agree to a
check-off in negotiating a collective bargaining agreement;
and NLRB v. Burns Security Services, 406 U.S. 272 (1972),
and Howard Johnson v. Hotel Employees, 417 U.S. 249
(1974), in both of which the Court held that the N.L.R.B.
cannot compel an employer, who has no collective bargain-
ing agreement with the employees involved, to honor the
provisions of a collective bargaining agreement which a

44

previous employer had with a union representing some of
those employees.

B. “Mass Action” Was an Appropriate Theory.

We consider next the Petitioners’ arguments with
respect to the application to this case by the court of
appeals of the so-called “mass action theory.” This theory
has been recognized and applied not only by the Court of
Appeals for the Third Circuit but by other courts of
appeals: Wagner Electric Corp. v. Local 1104, 361 F. Supp.
647 (E.D. Mo. 1973), aff'd, 496 F.2d 594, 596 (8 Cir. 1974);
Vulcan Materials v. United Steelworkers of America, 403
F.2d 446, 455 (5 Cir. 1970), and Local No. 21, United Textile
Workers v. Newberry Mills, Inc., 238 F. Supp. 366, 373
(W.D.S.C. 1965). This principle is applicable to the liability
of a union which is a party to a collective bargaining agree-
ment, both because it may be said to have undertaken to
supply performance by a third party, and because, as the
cour: below emphasized (App. 64a), §301(b) of the Labor
Management Relations Act (29 U.S.C. 185(b)) precludes
recovery of damages from individual union members.’
Since individual members cannot be liable in damages for
refusing to work, the employer, in a very real sense, could
have a remedy against no one when it came to enforcing
a “no strike” clause against a union which denied respon-
sibility for the mass refusal of its members, allegedly acting
independently of their union, to work.

The Petitioners argue that the foregoing is inconsis-
tent with decisions in the Fourth Circuit such as Haislip,
supra, and the Sixth Circuit in Lewis v. Benedict Coal Co.,
259 F.2d 346, aff’d in part and reversed in part, 361 U.S.
459 (1960), and North American Coal Corp. v. Local Union
2262, etc., 497 F.2d 459, 467 (1974). We have previously

7. Sinclair Oil Corp. v. Oil, Chemical and Atomic Workers
International Union, 452 F.2d 49 (7th Cir. 1971).

45

distinguished this case from Haislip. In Lewis, it was held
that liability could be imposed on a union for an allegedly
unauthorized strike in which masses of its members par-
ticipated where, as in the present case, there was evidence
that a union official with authority to settle the labor dis-
pute involved had, in fact, encouraged the strike. That
evidence was not dissimilar to evidence in the present case
that Thomas Fagan, President of Local 249, at the time he
instructed his members to return to work, also told them
that they could, if they wished, observe the illegal picket
line established by the members of Local 377 (J.A. 2910-
2911). See also, in accord, Blue Diamond Coal Company v.

United Mine Workers of America, 436 F.2d 551, 558-559
(6th Cir. 1970).

North American Coal Corp. v. Local Union 2262,
United Mine Workers of America, supra, the second deci-
sion from the Sixth Circuit cited by Petitioners, is actually
consistent with the ruling of the court of appeals in the
present case. There, the court reversed the convictions of
various union officials for criminal contempt. The prosecu-
tions resulted from the mass refusal of union members to
obey, over a four day period, a temporary injunction in-
tended to terminate an unauthorized strike. The convic-
tions of the union officials were overturned solely because
they had been entered notwithstanding extensive testimony,
which the trial court accepted at face value, as to the good
faith efforts of all of the individual defendants to require
the union members to return to work. However, the court of
appeals recognized that the same evidence was sufficient
to justify prosecution, in an appropriate procedural man-
ner, of the union involved. The court said (497 F.2d 467):

“Clearly, there was a strike which did continue
after issuance of the injunction. The strike was the
subject of discussion at local union meetings. There
was effective support for the strike voiced at one such
meeting. ***”

Petitioners conclude their argument under this head-
ing with a quotation from Chief Justice Taft in Coronado

46

Coal Co. v. United Mine Workers, 268 U.S. 295 (1925),
and argue that it is improper to impose liability on unions
for the unauthorized acts of only some of their members,
even though they constitute all union members employed
by a particular employer. If this argument were valid, no
liability could ever be imposed on any union for an illegal
strike unless a majority, or perhaps all, of its members
participated. No court has ever held that this is so.

Petitioners also argue that it is unfair to impose liabil-
ity here for the actions of approximately 600 Union mem-
bers. This argument is factually erroneous because, as we
have noted several times before, the picket lines established
by the members of the two Locals directly involved were
recognized by the members of many other Teamster Locals
throughout the nation, even though they, too, were parties
to the National Master Freight Agreement and no strike
clauses in area supplements. In any event, as the court
below made very clear, liability was imposed here, not for
the actions of individual Union members, but for the pro-
longed and complete abdegnation of responsibility on the
part of the highest officials of the International Brother-
hood of Teamsters and its Locals with respect to the per-
formance of the express contractual obligations of their
Unions with respect to terminating strikes by Union mem-
bers. As Judge Maris noted ( App. 54a-55a):

“By these restrictions upon the liability of the
unions the employers were undoubtedly bound. But
they involved only liability for the unauthorized strike
action of job stewards and individual union members.
They did not relate to or purport to relieve the unions
from their own specific promise “that there shall be no
strike . . . without first using all possible means of 2.
settlement, as provided for in this Agreement, of any
controversy which might arise.” This promise was
binding on the unions as such, as well as on the union
members, and it did not necessarily involve assump-

47

tion by the unions of responsibility for unauthorized
strike action of the individual members. While it was
not a ‘no fault’ guarantee against any work stop-
page, Penn Packing Co., Inc. v. Amalgamated Meat
Cutters, Local 195, 3 Cir. 1974, 497 F.2d 888, 890.
it did involve the obligation of the unions, which was
necessarily implied in their promise, not only not to
call a strike themselves but also to take timely steps
to end such an unauthorized strike by employing any
and all such reasonable means at their command as
might be needed to get their members back to work.
It was the breach of this obligation by the unions,
not any responsibility for the particular unauthorized
actions of their members, which generated liability
on their part.”

Il. THE Court OF APPEALS ACTED PROPERLY IN AWARDING
DAMAGES AND INTEREST.

A. Strike Losses

Petitioners are correct in stating that the trial judge,
after hearing eleven days’ testimony, made no specific
findings of fact and gave no detailed explanation in his
Opinion as to how he calculated the amount which he
determined to be plaintiffs’ operating losses during the
Strike. What is not stated is that, when the trial judge
acted in this manner, he did so although counsel for all
parties submitted detailed Requests for Findings of Fact
and Briefs carefully annotated to the Record. Furthermore,
the parties most aggrieved by the trial court’s refusal to
make detailed findings were the plaintiffs since, by acting
as he did, the trial judge found it possible to justify blanket
elimination of the great bulk of plaintiffs’ claim, even
though the evidence as to plaintiffs’ losses and their
relationship to the Strike was both strong and almost
uncontradicted.

48

Nevertheless, with respect to the single damage claim
as to which the trial judge did make a substantial award,
namely, plaintiffs’ direct operating losses during the Strike,
it is possible to establish exactly the basis of the trial
judge's reasoning, for his ultimate finding was directly in
accord with the operating losses reflected on Eazor's con-
solidated monthly operating statements for the Strike
months of August and September, 1968 (3 J.A. Exhibits
807a-809a), after substitution of actual expenses for certain
items which were unknowable and, therefore, only esti-
mated, when the statements were prepared.

The original figures from the monthly statements, and
the adjustments, are as follows:

August September

Profit or Loss per monthly

statements $(601,577) $(618,973)
Rev. Adjustment (67,500)
Adjustment of Legal Expense

due to Strike (4,919)
Adjustment of State U'nemploy-

ment Compensation

Expense (4,983) (8,209)
Adjustment of Workmen's

Compensation Expense (13,701) (22.856)
Adjustment of Group

Insurance Expense (15,050)

Adjustment of Prepaid
Tire Expense (2,000) (2,000)
$(580,893) $(498,439)

The justification for each of such adjustments was ex-
plained in Eazor’s primary Brief as to damages in the trial
court (Supplement Appendix 206b-207b) with precise anno-

ARAN EET ORY a

hese Y HARES PEROT re SORRY
RE ee ie a Ps

Opt
“iM Ree oN TF tte _
ot SAE yk eer CLS Meco sd are

49

tations to the Record. For the benefit of the court of appeals,
the Requests for Findings which the parties had filed in the
court below were printed in the Appendix and the Briefs
filed there in a Supplemental Appendix. Accordingly, to
review properly the propriety of the trial court’s finding as
to the extent of plaintiffs’ operating losses during the Strike,
the court of appeals was required to do no more than review
the Proposed Findings and Briefs in the court below. And
all parties urged that this be done and a decision rendered
without remand. At page 40 of the primary Brief filed in
the court of appeals by the International the following was
stated:

“When a trial judge has failed to comply with the
requirements of Rule 52(a) or where a finding is set
aside as clearly erroneous, a reviewing court is left
with two choices. It can remand to the district court
for proper findings as was done in O'Neill. Alternative-
ly, where the essential evidence is documentary and
the case does not turn on questions of credibility, the
appellate court may proceed to decide the case without
remand. Surgical Supply Service, Inc. v. Adler, 321
F.2d 536, 539 (3 Cir. 1963); State of Maryland v.
United States, 329 F.2d 722, 723 (3 Cir. 1964);
McComb v. Utica Knitting Co., 164 F.2d 670 (2 Cir.
1947)

“The strike period loss issue in this case readily
lends itself to the latter treatment. The amounts of
each proposed adjustment are detailed on documents
and there is no dispute as to either the calculations or
the accounting data upon which those calculations
were baséd. While the accounting experts differed as
to the propriety of some of these adjustments, there
were no issues of credibility, but only questions as to
which approach appeared the more persuasive. And
after Eazor submitted its own recomputations, the
differences between the parties narrowed to only ten
proposed additional adjustments (See 2JA 652-653).”

RRR NSE NLR RPTL ETRE HUET STEIN RRM TS BAIS ETP RIT POT

ee ON ge a

50

To the authorities cited by the International should be
added the following: Swanson v. Levy, 509 F.2d 859 (9th
Cir. 1975); Neill v. Diamond M Drilling Co., 426 F.2d 487,
491 (5th Cir. 1970); B. F. Goodrich v. Rubber Latex
Products, Inc., 400 F.2d 401 (6th Cir. 1968).

The Opinion of the court of appeals makes it very clear
that, before affirming the trial judge’s decision on this issue,
the court of appeals itself reviewed his reasoning. The court
said (App. 65a):

“The district court threaded its way through this
maze and found as a fact that the total aggregate loss
suffered by the two plaintiffs during the period of the
strikes was $1,079,332.00. * * * All the defendants
urge that the loss established by the evidence was only
$696,255.00 at the maximum and possibly as little as
$208,375.00. Our consideration of the record satisfies
us, however, that there was support in the evidence for
the finding of the district court that the plaintiffs’ total
loss was $1,079,332.00 and we cannot say that this
finding was erroneous.”

The decisions which Petitioners now cite on this ques-
tion are ones in which courts of appeals, in other situations,
chose to exercise their discretion to remand to a lower court
for specific findings. Certainly, however, there is no reason
whatever for this Court to grant certiorari to review the
differing practice adopted by the court of appeals in the
present case when its decision in that regard was not only
discretionary and supported by another line of cases, but
directly in accord with the expressed wishes, at the time,
of all of the parties to this litigation.

B. Prejudgment Interest

Finally, Petitioners urge that, even if there is no other
basis for granting certiorari, this Court should do so solely
because the trial court held that plaintiffs were entitled to
prejudgment interest on the relatively modest award which

—

NEE TIVE ESN LEA NENA OE RTI NIM A aIRICETT “OMAR, KOPN Se ata ORR EMC 2

51]

they received, and that holding the court of appeals re-
viewed and held to be proper, under the circumstances
without assigning specific reasons for its conclusion.

Petitioners concede that this Court has never held that
the requirement of Rule 52(a) dictates that either district
courts or courts of appeals make specific findings with
respect to the basis on which prejudgment interest is
awarded or denied. That this is so is the best indication we
know of what small moment is this issue to federal juris-
prudence.

Certainly, the present case, which has already been
pending for seven and a half years, is not one whose final
disposition should be further delayed for the purpose of
clarifying the law in this matter. This is an action for
breach of contract in which the only damages awarded
consisted of the plaintiffs’ operating losses during the
period of the Strike, a matter which could be and was the
subject of precise calculation by experts produced by both
parties, whose only differences, as the Teamsters them-
selves conceded, involved matters of opinion rather than
fact. As the court of appeals noted (App. 76a-77a):

“The general rule is that when the damages result-
ing from a breach of contract are ascertainable with
mathematical precision prejudgment interest is
awardable as of right. If, however, the claim is not for
a liquidated sum but is nonetheless pecuniary rather
than personal in its nature many courts will add pre-
judgment interest to the amount which they find
would have been just compensation at the time of the
breach, when in the exercise of their discretion it
appears necessary to do so in order to arrive at fair
compensation at the time of judgment. Miller v.
Robertson, 1924, 266 U.S. 243, 258; United States v.
Bethlehem Steel Corp., 3 Cir. 1940, 113 F.2d 301, 308,
aff'd, 1942, 315 U.S. 289; Cold Metal Process Co. v.
United Engineering & Foundry Co., 3 Cir. 1956, 235
F.2d 224, 231; Marrazzo v. Scranton Nehi Bottling Co.,

ade erie a |

SAORI oe PML RENEE TPO SRI SN TIES. GI TIE TE: AN
om

52

1970, 438 Pa. 72, 263 A.2d 336; Restatement of Con-
tracts §337; McCormick on Damages, 1935, 356.”

The court also stated (App. 77a):

“We think that this is an appropriate rule for
discretionary application as a matter of federal law in
actions brought under section 301 of the Labor Man-
agement Relations Act for breaches of labor agree-
ments and that the disizict court did not err in its dis-
cretionary application of the rule in this case.”

Plaintiffs believe that, under the general rule, since the
only damages awarded in the present case were those ascer-
tainable with mathematical precision, plaintiffs were
entitled to prejudgment interest on that award as a matter
of right. Certainly, in any event, there is no basis in the
Record for concluding that the lower courts erred in award-
ing prejudgment interest; quite the contrary. Suit was
instituted promptly, prosecuted diligently and at great
expense by plaintiffs, and required many years before it was
tried to conclusion. Furthermore, while the case was pend-
ing, plaintiffs incurred hundreds of thousands of dollars in
interest expense for loans which they were required to
continue or increase as a result of Strike losses (1 J.A. Exs.
636a). These are factors which no doubt led the courts
below, and have also caused other courts, to conclude that
awards of prejudgment interest are proper. See, in addition
to the decisions cited in the Opinion of the court of appeals,
Chris-Craft Industries, Inc. v. Piper Aircraft Corp., 516 F.2d
172 (1975), certiorari applied for, No. 75-355.

None of the cases which Petitioners cite on this issue
governs here. In Board of Commissioners v. U.S., 308 U.S.
343 (1939), this Court did review and reverse a court of
appeals in connection with an award of interest. There,
however, the district court had exercised its discretion in
denying prejudgment interest in a claim by Indians against
a county for taxes collected on land which the federal
government had obtained from the Indians and later con-
veyed to the defendant county by patent. The trial court

RATS LT NL HANEY LINN AES TE TY HELM TEP TTL TINE TTD

53

denied interest because it concluded that, throughout, the
county had acted “in all innocence”. Such a decision, this
Court held, was within the scope of the district court's
discretion, and the court of appeals had no right to reverse
it. Here, on the other hand, the defendants were not
“innocent”, the district court did award prejudgment inter-
est, and the court of appeals has concluded that the trial
court properly exercised its discretion in so holding.

In Albemarle Paper Company v. Moody, 422 U.S. 405
(1976), this Court reversed a court of appeals, which in turn
reversed a district court for refusing to award back pay in
a civil rights case involving discriminatory practices on the
part of an employer. The court of appeals reversed and
recognized as valid plaintiffs’ entire damage claim. This
Court’s decision to remand resulted solely from its deter-
mination that, at the inception of the litigation, the plain-
tiffs had disclaimed any intention to claim damages for
back pay; therefore, the Court said, there was an unresolved
issue as to whether, and if so to what extent, the defen-
dants may have been prejudiced in dealing with palintiff's
claim by the preliminary position taken by their lawyer.
This was to be determined on remand.

Again, no similar issue is present here. From the begin-
ning, defendants have denied liability and offered nothing
in response to plaintiffs’ claim.

Of the remaining cases cited by Petitioners, Robert C.
Herd & Company v. Krawill Machinery Corp., 256 F.2d 946
(4th Cir. 1958), aff'd on another question, 359 U.S. 297
(1959); McCrea v. Harris County Houston Ship Channel
Navigation District, 423 F.2d 605 (5th Cir. 1970), cert.
denied, 400 U.S. 924 (1970), and Wessel v. Buhler, 437 F.2d
279 (9th Cir. 1971), all involve situations in which courts
of appeal reversed district courts for failing to explain why
they had refused to award prejudgment interest. Certainly,
such holdings can be of no comfort to the defendants here;
on the other hand, the reasoning of the Court of Appeals for
the Fourth Circuit in Herd & Company supports the award
of prejudgment interest under circumstances such as
Eazor’s.

aupeeemieenall

Ne

54

Finally, that the court of appeals in Norte & Co. v.
Huffines, 416 F.2d 1189 (2d Cir. 1975), was not satisfied
with the trial court’s explanation of its award for prejudg-
ment interest is certainly no basis for concluding that the
court of appeals in the present case erred when it con-
cluded, after it reviewed the decision of the trial court in the
present case, that the award of prejudgment interest was
proper. In this connection, certainly, the court of appeals
was also entitle? to consider whether, in view of the highly
arbitrary manner in which the trial judge had dealt with
every other damage claim of the plaintiffs in order to reach
his final verdict, he might not behave in a manner equally
arbitrary, in the event of a remand, by reversing his original
decision with respect to prejudgment interest in a situation
where both the general principles of law and the facts cry
out for such an award. This, in turn, would have neces-
sitated a further appeal on the question of interest and
further delay of the plaintiffs.

The court of appeals was right in concluding that this
case must end sometime.

CONCLUSION

For the foregoing reasons, the Petition for Certiorari
should be denied.

Tom P. Monteverde
Attorney for Respondents,
Eazor Express, Inc., and

Daniels Motor Freight, Inc.
Of Counsel:

PELINO, WASSERSTROM, Cuucas & MONTEVERDE
2300 Packard Building

Fifteenth and Chestnut Streets

Philadelphia, Pennsylvania 19102

Tuorp, REED & ARMSTRONG
2900 Grant Building
Pittsburgh, Pennsylvania 15219

Premennessee rere eer rN eR PE TE TRU P ANE SINT iad vaceahe

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385608_1929%3A2. Public record. Not legal advice.