Petition for Writ of Certiorari — Geske & Sons, Inc. v. International Union of Operating Engineers, Local 150
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Eupreme Court, U.S,
ee
OCT - 1 1993
INTHE _ . lites
Supreme Court of the Gniled States
OCTOBER TERM, 1993
GESKE & SONS, INC.,
Petitioner,
v.
INTERNATIONAL UNION OF OPERATING ENGINEERS,
LOCAL 150 AND CHAUFFEURS, TEAMSTERS AND
HELPERS, LOCAL UNION 301,
Respondents.
PETITION FOR WRIT OF CERTIORARI
TO THE APPELLATE COURT OF ILLINOIS
SECOND JUDICIAL DISTRICT
GERARD C. SMETANA*
LAW OFFICES OF
GERARD C. SMETANA
333 West Wacker Drive
Chicago, Illinois 60606
(312) 357-0251
MICHAEL E. AVAKIAN
CENTER ON NATIONAL
LABOR POLICY, INC.
5211 Port Royal Road
N. Springfield, VA 22151
(703) 321-9180
*Counsel of Record
anenestiennitiinel aneanie
QUESTIONS PRESENTED
1. Whether federal law requires the Illinois courts to follow this
Court’s Linn v. Plant Guard Workers defamation standard which
protects speech uttered during the course of “labor disputes,” except
for those publications and statements that are knowingly false or
made in reckless disregard of the truth.
2. Whether this Court’s articulation of a single standard of proof
for libelous statements in Linn v. Plant Guard Workers for labor
disputes, therein adopting by analogy the New York Times v. Sullivan
standards of liability for statements made in reckless disregard for
the truth or knowingly false, tolerates and does not preempt
continuing state use of per se libel law standards that act to deprive
a party of the nght to protect its reputation and business when
libeled during the course of a labor dispute.
LIST OF PARTIES
Petitioner Geske & Sons, Inc. is a Closely-held, non-public
corporation owned by Larry Geske and Leroy Geske. Geske has no
parent companies, subsidiaries or affiliates.
The Respondents here include:
International Union of Operating Engineers, Local No. 150;
Chuck August, a business agent of International Union of
Operating Engineers, Local No. 150, and
Chauffeurs, Teamsters and Helpers, Local Union No. 301.
- lll -
TABLE OF CONTENTS
Page
QUESTIONS PRET,'GNTED .. wc ccc wcccccrevvccecse 1
Se Wi PE bk 636s ec hcesn cue cece ll
pe ee Pre ee rere rr ili
BA Se PEED oo kk ck ee ecenvneweedeenecus Vv
en MOTT ies sone es ee eee an deed eckseaeee l
PAEEEEHEE 66. 0k 0 050943 ieee ee ee ee 2
CONSTITUTION AND STATUTES INVOLVED .......... 2
Di raeeeets Ge Fame CAO 6c iv c ccc cdcceseuc¥evens 3
OT kv oe nos Kew eee 3
Pr Pe TER re ee oe 5
©. RAIN TD ko one dace dnecesueeenaees 7
REASONS FOR GRANTING THE WRIT .............. 10
I. THE ACTUAL KNOWLEDGE OR RECKLESS
DISREGARD FOR THE TRUTH STANDARD OF
PROOF FOR TRADE LIBEL ARISING IN A “LA-
BOR CONTEXT” WAS ESTABLISHED BY THIS
COURT IN LINN V. PLANT GUARD WORKERS
AND CONFIRMED IN AUSTIN TO BE A
UNIFORM RULE THAT MUST BE FOLLOWED
BY STATE COURT’S TO AVOID FEDERAL
FOTO 008654 lacewsndee 10
Il. THE APPELLATE COURT’S RULING THAT
HELD FACIALLY UNTRUE LANGUAGE
CANNOT BE ENJOINED CONFLICTS WITH
DECISIONS IN OTHER STATES THAT ALLOW
—_ LO SSS aa ee a EE EEE OE ae ee eee OO ae ees lee
« We
UNION FALSE STATEMENTS OF FACT
Fes ee TOD 6 5 6c hs beseuekeeeencuees 18
CONCLUSION ...... PTE artes: 82, 21
Appendix:
Opinion and Order of the Appellate Court of Illinois .... la
Order of the Circuit Court of McHenry County ....... lla
Opinion of the Circuit Court of McHenry County ...... 12a
Order of the Supreme Court of Illinois .............. 25a
Opinion of the U.S. District Court
for the Northern District of Illinois ............... 26a
Order of the U.S. District Court
for the Northern District of Illinois ............... 30a
TABLE OF AUTHORITIES
CASES
Page
Amalgamated Ass'n of Street, Elec. & Motor Coach Employees
v. Lockridge,
Cg 8. ene Uy er ray am 14
American Fed’n of Technical Engrs. v. LaJeunesse,
2 & & 2: ,. Bre per eye eer errr Ee 14
CWA v. Archibeque,
105 N.M. 635, 735 P.2d 1141,
ED Rae GUUERD SD CODED ovr eccccscccseceses 15
Caruso v. Teamsters, Local 690,
33 Wash. App. 201, 653 P.2d 638,
pe Mm fa NG Oa. 15
City of Rockford v. Local 413,
ee Pee Fe A A SE ik Sa eds wee es veeeuwees 6
Dale v. Ohio Civil Serv. Employees Assn,
57 Ohio 3d 112, 567 N.E.2d 253,
PS Ee ee Ee CUED ois hee weak stecevaies 15
Foreign Car Center, Inc.,
Se I SN ones oy oR aw wae eae ae 6
Henderson v. Teamsters, Local 313,
90 Wash. 2d 666, 585 P.2d 147,
FF LRM (A) S472 (ISTE) 2c ccc cece cccccces 14
Higgins v. Gordon,
433 N.W.2d 306 (Ct. App. IA 1988) ................. 17
- vi -
Hotel & Restaurant Employees, Local 681 v.
Anaheim Operating, Inc.,
82 Cal. App.2d 337, 147 Cal. Rptr. 510 (Ct. App. 1978) ... 14
IBEW y. Bradley,
147 Ill. App. 3d 193, 499 N.E.2d 577 (2d Dist. 1986) ...... 6
Lechmere v. NLRB,
ee ee ee ED a ss a's o's oe ec aweweOeaeweevs 18
Linn v. United Plant Guard Workers,
GES UD. SD UIPGRD wc ccc sccceerss 4, 5, 10, 11, 12, 15, 17
Lowe Excavating Co. v. International Union of Operating Engrs.,
Local 150,
180 Ill. App. 3d 39,
535 N.E.2d 1065 (2d Dist. 1989) .............. 4,9, 10, 12
Magill Bros., Inc. v. Building Serv. Employees Int’l Union,
yas & FO eee eS Bel eer 18, 19
Mittelman v. Witous,
135 TE. 26 220, SSB N.E.26 973 CISGR). 2 ccc ccccsccees 17
NLRB v. Illinois Bell Telephone Co.,
ee oe Fe Fo BB , .) | ee 6, 16
New York Times v. Sullivan,
De eo oe cena a eee eee cade re eee 1]
OCAW vy. Sinclair Oil Corp.,
748 P.2d 283, 128 L.R.R.M. (BNA) 2709 (Wy. 1987) ..... 15
Oetzman v. Ahrens,
145 Wis. 2d, 560, 427 N.W.2d 421 (1988) ............. 15
Old Dominion Branch No. 496, Letter Carriers v. Austin,
Cae We ee Cee 6k bo ob eeed cwrseaues 4, 6, 13, 15-16
- Vii -
Sears, Roebuck & Co. v. San Diego County Dist. Council of
Carpenters,
Se ee ID not p00 oo ere pee ee ceed ees 0s 18
Steinhilder v. Alphonse,
68 N.Y.2d 283, 501 N.E.2d 550,
S25 EE Gees Beet CHMOD sccvcce rete tress. 16
Tosti v. Ayik,
386 Mass. 721, 437 N.E.2d 1062,
ERR Fee, Ob. Bh: re 14
Tosti v. Ayik,
394 Mass. 482, 476 N.E.2d 928,
i ge Bev Wee ies < Fl) -) 15
United Farm Workers v. Superior Court,
4 Cal. 3d 556, 483 P.2d 1215,
T? LRM GRA) 2208 (IFT) nn cc ccc ewccseves 19
Vee See Constr. Co. v. Jensen & Halstead, Lid.,
79 Ill. App. 3d 1084, 399 N.E.2d 278 (Ist Dist. 1979) 4, 8, 10-11
Virgil Jean v. William E. Dugan,
814 F. Supp. 1401 (N.D. Ind. 1993) ..........----04-- 17
Wolf Street Supermarkets, Inc. v. McPartland,
108 A.D.2d 25, 487 N.Y.S.2d 442,
117 Lab. Cas. (CCH) 80,382 (App. Div. 1985) .......... 1]
CONSTITUTION AND STATUTES
ee tess vee te es aevcceseee 18
Restatement (Second) of Torts § 580B, commenti ..... 15, 16t
No. 93-
IN THE SUPREME COURT OF THE UNITED STATES
OCTOBER TERM, 1993
GESKE & SONS, INC.,
Petitioner,
Vv.
INTERNATIONAL UNION OF OPERATING ENGINEERS,
NO. 150; CHUCK AUGUST, et ai.,
Respondents.
PETITION FOR WRIT OF CERTIORARI
TO THE APPELLATE COURT OF ILLINOIS
SECOND JUDICIAL DISTRICT
Petitioner Geske & Sons, Inc. (“Geske’’) respectfully prays that
a writ of certiorari issue to review the judgment and opinion of the
Appellate Court of Illinois, Second Judicial District.
OPINIONS BELOW
The opinion of the Appellate Court of Illinois, Second Judicial
District is unreported. The opinion of the Circuit Court of McHenry
County, Illinois, is also unreported. These opinions and Orders are
reproduced in the appendix at pages la and lla, respectively.' The
ruling of the United States District Court for the Northern District of
Illinois is reprinted in the appendix at page 26a.
]
' “a” references are to the accompanying Appendix hereto. “Tr. Vol.”
references are to the volumes of the trial court transcript.
JURISDICTION
The judgment of the court of appeals was entered on September
29, 1992. A timely petition for rehearing was filed on December 1,
1992 and denied on January 5, 1993. A petition for leave to appeal
to the Supreme Court of Illinois was filed on April 10, 1993. The
Petition was denied on June 3, 1993. Justice Stevens granted
Petitioner’s motion for extension of time to file the Petition for Writ
of Certiorari to this Court on August 10, 1993 (App. No. A-135), to
and including October 1, 1993. This Court has jurisdiction to
review the judgment of that court under 28 U.S.C. § 1257(3).
CONSTITUTION AND STATUTES INVOLVED
Article VI, Section 2 of the Constitution, provides:
The Constitution, and the Laws of the United
States which shall be made in Pursuance thereof;
and all Treaties made, or which shall be made,
under the Authority of the United States, shall be
the supreme Law of the Land; and the Judges in
every State shall be bound thereby, any Thing in
the Constitution or Laws of any State to the
Contrary notwithstanding.
The Labor Management Relations Act of 1947 (“LMRA”), 29
U.S.C. § 151 et seq., is involved in this case.
29 U.S.C. § 152(9) provides:
The term “labor dispute” includes any controver-
Sy concerning terms, tenure or conditions of
employment, or concerning the association or
representation of persons in negotiating, fixing,
maintaining, changing, or seeking to arrange
terms or conditions of employment, regardless of
whether the disputants stand in the proximate
relation of employer and employee.
~~ =
29 U.S.C. § 157 provides:
Employees shall have the right to self-organiza-
tion, to form, join, or assist labor organizations,
to bargain collectively through representatives of
their own choosing, and to engage in other
concerted activities for the purpose of collective
bargaining or other mutual aid or protection, and
Shall also have the right to refrain from any or
all of such activities except to the extent that
such right may be affected by an agreement
requiring membership in a labor organization as
a condition of employment authorized in section
158(a)(3) of this title.
STATEMENT OF THE CASE
a. Procedural Background
Petitioner filed its state court action on September 5, 1991. It
complained that Local 150’s publication and use of “on Strike”
language on picket signs was materially false and misleading both
because none of Geske’s employees were in fact on strike or were
refusing to work and because Local 150 through the reasonable
exercise of diligence, acted recklessly in disregard of the truth in
making the statements. In addition, Local 150 untruthfully informed
Geske customers that Geske was closed and that Geske’s workers
were “On Strike.” These acts impaired Geske’s Operations and
caused it damage. Nothing in the complaint requested an injunction
to stop Local 150 from all picketing. The Complaint asked that
Local 150 be restrained from recklessly publishing false statements.
Geske filed a motion for Temporary Restraining Order and for
Preliminary Injunctive Relief, and argued that it could recover
damages for trade libel upon proof of actual malice within the
meaning of New York Times v. Sullivan and Linn v. United Plant
Guard Workers, because agents of Local 150 and Local 150 had
acted in reckless disregard of the truth when they also uttered
oy
statements to Geske customers that Geske was closed, out of
business, and that Local 150 represented Geske employees.
Geske successfully obtained a TRO from the Circuit Court of
McHenry County. The following day, September 6, 1991, Local
150 filed a Verified Notice of Removal to the United States District
Court for the Northern District of Illinois. The district court
dismissed the case and remanded it back to state court. 30a. °
The state trial court then received testimony in support of
Preliminary Injunctive Relief. After hearing Geske’s evidence, the
state court found the tort of trade libel was not preempted by federal
law under Linn. It then granted a directed finding to Local 150 for
Geske’s failure to establish within the high standards for injunctive
relief, the Illinois corporate per se standard of financial disparage-
ment required under Vee See Constr. Co. v. Jensen & Halstead, Lid,
79 Ill. App. 3d 1084, 1089, 399 N.E.2d 278 (lst Dist. 1979) ( ‘Vee
See’). lla, 1Sa-16a.
On appeal, the Appellate Court of Illinois, Second Judicial
District, also found that Geske’s causes of action were not preempted
by federal labor law. 5a. However, the appellate court rejected
Geske’s request that it apply the “standard of malice or reckless
disregard for the truth” rule from Linn v. United Plant Guard
Workers, 383 U.S. 53, 58, 65 (1966), Old Dominion Branch No.
496, Letter Carriers v. Austin, 418 U.S. 264 (1974) (“Austin”), and
Lowe Excavating Co. v. International Union of Operating Engrs.,
Local 150, 180 Ill. App. 3d 39, 535 N.E.2d 1065 (2d Dist. 1989)
(“Lowe”), Ill. app. denied, 126 Ill. 2d 560, 541 N.E.2d 1107 (1989),
cert. denied, 110 S. Ct. 499, 107 L.Ed.2d 502 (1989), rather than
Vee See. 6a-7a. The appellate court determined that the Illinois
trade libel standards applied to the case and not Linn. It denied a
timely petition for rehearing.
A timely motion for leave to appeal was filed with the Illinois
Supreme Court. It was denied.
b. Factual Background
This case presents a question of significant statutory importance
to employers nationwide: whether the libel law standard for labor
law disputes prescribed by this Court in Linn v. United Plant Guard
Workers, 383 U.S. 53 (1966), requiring proof that actionable
statements were made in reckless disregard of the truth or knowingly
false, is a uniform rule of federal law or may it be redefined by state
courts and replaced with different standards of proof.
Geske is a small commercial asphalt paving and manufacturing
contractor operating in Crystal Lake, Illinois with approximately
twenty employees at the time the lawsuit was filed. Chuck August
is a business agent of International Union of Operating Engineers
Local 150 (“Local 150”).
From August 19, 1991 to September 18, 1991, Local 150 pick-
eted Geske with signs stating:
I.U.0.E. LOCAL 150
ON STRIKE
AGAINST
GESKE
FOR RECOGNITION
AS MAJORITY BARGAINING
REPRESENTATIVE OF
COMPANY’S OPERATING
ENGINEER EMPLOYEES
The words “ON STRIKE” against Geske were printed in eight
inch high bold red lettering. In handwritten letters approximately 1-
1/2 inches high in light red coloring, the remaining words “for
recognition as majority bargaining representative of Company’s
operating engineer employees,” were written.
During this picketing, the evidence shows that union business
agents carried these signs and made appeals to Geske’s employees,
suppliers, and customers. Specifically, Local 150 stopped suppliers
and customers and told them that Geske employees were striking
“a ;
when none were. TR. Vol. I at 47; Tr. Vol. V at 233, 235.
Moreover, they told Geske customers attempting to enter Geske’s
driveway that Geske was “closed.” Next, the union told Geske
customers to purchase their supplies from Curran, a union competi-
tor. These customers were told that Curran would give them credit
and charge them less for asphalt, but Curran actually charged more
per ton. TR. Vol. II at 56, 58-59.
Union business agents testified that they knew the words “on
strike” would be understood to mean that concerted action was being
taken by employees against their own employer. Tr. Vol. I at 47;
Tr. Vol. VIII at 1110-1111.* Moreover, testimony showed that in
1989, Local 150 began using the “on strike” language embodied in
this case because union and non-union workers did not honor Local
150’s “prevailing wage” or “area standard” notices to the public.
However, the union became successful in preventing workers from
crossing its picket lines by using the new “on strike” signs. Tr. Vol.
2, 142-44. For example, truck drivers for Vulcan Materials
Company, a thirty year supplier of aggregate material to Geske,
refused to cross the “on strike” picket line. Tr. Vol. I at 73-74
Furthermore, Local 150 combined these misrepresentations with
threats to Geske’s customers, such as All American Asphalt Mainte-
nance, that they would destroy their trucks, Tr. Vol. II at 153, and
? Subsequent NLRB election proceedings, 33-RC-3769, established that only
one Geske employee worked in the jurisdiction of the Operating Engineers Union.
See Foreign Car Center, Inc., 129 N.L.R.B. 319, 320 (1960) (a representation
election requires more than one eligible person).
* Webster's Third New Unabridged Dictionary defines the word “Strike” as:
“a work stoppage by a body of workers to enforce compliance with demands made
on an employer.” In Austin, 418 U.S. 283, the Court employed Webster's
definition of “scab,” to ascertain its meaning. Here, no “body of workers” engaged
in “a work stoppage” against Geske. This definition is accepted throughout the
caselaw. See NLRB v. Illinois Bell Telephone Co., 189 F.2d 124 (7th Cir. 1951);
IBEW v. Bradley, 147 Ill. App. 3d 193, 499 N.E.2d 577 (2d Dist. 1986) (“[w]Jhen
a union prohibits its members from working for their employer--that is a
strike.””);City of Rockford v. Local 413, 240 N.E.2d 705 (Ill. App. 1968) (“cessation
of work by employees”).
>
lit cigarette lighters to prove their intent. Tr. Vol. II at 153, 157.
Trucks were dangerously followed and drivers harassed by agents of
Local 150. Tr. Vol. Ii at 74; Tr. Vol. V at 295, 333, 416; Tr. Vol.
VII at 113, 127.
Geske plead that it had no strike or any dispute with its
employees at all. Verified Complaint J 26-27. AI its employees
reported to work and all its employees carried on their respective
jobs. Complaint $j 26-27. In addition, Geske alleged that Local
150’s statements falsely assailed Geske’s financial position because
it implied that Geske was out of business or was not financially a
viable business entity. Complaint 4 26.
The complaint also alleged that: the union blocked ingress and
egress at the entrance to Geske’s facility, Complaint 4 19; the “On
Strike” sign the union used was materially false and was knowingly
made in reckless disregard for the truth, Complaint § 20; at the
entrance to Geske’s facilities, the union climbed onto customers’
trucks, congregated in a hostile fashion, and followed Geske’s trucks,
Complaint 23; the union told Geske’s customers that Geske was
“closed,” “broke down,” and “on Strike” when it knew these
Statements were false, Complaint §§| 25-27; and that the union
intended the acts listed above to interfere with Geske’s business
relations and advantage. Complaint {J 51, 57.
Hence, Geske alleged Local 150 had engaged in a combination
of acts that injured Geske: it masqueraded as Geske workers, spoke
untruthfully to Geske customers, and uttered to customers and
suppliers that Geske’s workers were “on strike” when none were.
C. Litigation Background
On the same day Geske filed its Complaint for Injunctive
Relief, it filed a motion for Temporary Restraining Order that was
heard by the state court. The motion was granted. In reievant part,
the TRO restrained Local 150 from:
(1) physically blocking ingress and egress of plaintiff's
employees, customers, and suppliers to and from plaintiff ’s
~ ve
facility at 4020 Northwest Highway, Crystal Lake, Illinois;
(2) threatening plaintiffs employees, customers and
suppliers; (3) publishing false and misleading statements,
oral or written, about Geske and Sons, Inc., to plaintiff's
employees, customers, and suppliers and to the public at
large, including, but not limited to placards, signs or
statements stating that the employees of plaintiff are on
strike; and (4) otherwise interfering with the contractual
relationships between plaintiff and its customers and
suppliers.
The next day, Local 150 removed the case from state court to
the United States District Court for the Northern District of Illinois.
Local 150 asserted that Geske’s Complaint alleged federal
questions. The district court disagreed. 26a. First, the judge
showed that Geske’s Trade Libel, Tortious Interference with
Contractual Relations, and Prospective Economic Advantage counts
“are causes of actions available under Illinois common law.” 27a.
Furthermore, the district court ruled that Local 150’s claim that the
state causes were “preempted” were claims entitled to be addressed
by the state court in the first instance: “[iJf so the state court can
dismiss the complaint, either because of preemption or for failure to
state a claim.” 28a. Local 150 did not appeal this ruling to the
Seventh Circuit.
Upon return of the case to state court, the state judge heard
testimony in support of Geske’s Motion for Preliminary Inianction.
It found that the litigation was not preempted, 16a. The court also
held that the standard of “libel per se where the plaintiff is a
corporation,” taken from Vee See, applied. There, the Illinois
Appellate Court held that “[t]o state a cause of action for libel per
se where the plaintiff is a corporation, the statements allegedly
defaming the plaintiff in its trade or business must assail the
corporation’s financial position or business methods, or accuse it of
fraud or mismanagement.” Vee See, 399 N.E.2d at 281.
P
Consequently, the trial court found that “the Sign, as indicated,
does not fall within that definition of trade libel as set forth in the
Vee See case....” 18a.‘
On appeal, the Appellate Court of Illinois, Second Judicial
District, held that “the Vee See standard was proper in this case
because the plaintiff was a corporation.” 7a. It rejected Geske’s
argument that the libel standard taken from Lowe Excavating Co. v.
International Union of Operating Engrs., Local 150, 180 Ill. App.
3d 39, 535 N.E.2d 1065 (2d Dist. 1989), applied “because the trade
libel in this case is in a ‘labor context’ as opposed to a traditional
corporate context.” 6a. It held that the Lowe court’s statement that
““‘whether the defendant, with actual malice, published a statement
with knowledge of its falsity, or in reckless disregard of the truth,’”
was applicable to labor disputes was judicial dicta, 6a, that “did not
define a new standard by which to judge a libel action brought by
a corporation” 7a (emphasis added). It reaffirmed the trial court’s
holding that “libel, where the plaintiff is a corporation, is clear: the
alleged defamation must assail the corporation’s financial position,
business methods, or accuse it of fraud or mismanagement.” 7a.
~ Furthermore, the Appellate Court believed that the union held
a “conditional privilege” to picket Geske, “protected by the NLRA.”
9a. As such, the Appellate Court ruled that in trade libel labor
dispute cases, “plaintiff must, then, establish that the defendant acted
with a desire to harm which was unrelated to the interest that he was
presumably seeking to protect.” /d (emphasis added).
The situation alleged here does not present an instance of
“outsiders intermeddling maliciously in the contracts or
affairs of other parties”....Additionally, we do not find
sufficient evidence ia the record of actual malice on the
part of the defendants to vitiate their conditional privilege.
“ On the same day the circuit denied the motion for preliminary injunction, it
allowed the filing of a Third Amended Complaint which is now being brought to
issue. 23a. The libel law developed to support the denial of the Preliminary
Injunction is at the heart of this Petition.
=
9a (emphasis added).
REASONS FOR GRANTING THE WRIT
I.
THE ACTUAL KNOWLEDGE OR RECKLESS
DISREGARD FOR THE TRUTH STANDARD OF
PROOF FOR TRADE LIBEL ARISING IN A “LA-
BOR CONTEXT” WAS ESTABLISHED BY THIS
COURT IN LINN V. PLANT GUARD WORKERS AND
CONFIRMED IN AUSTIN TO BE A UNIFORM
RULE THAT MUST BE FOLLOWED BY STATE
COURT’S TO AVOID FEDERAL PREEMPTION.
The Appellate Court of Illinois ruled that Lowe Excavating Co.
v. Int'l Union of Operating Engrs., Local 150, 180 Ill. App. 3d 39,
47-48 (2d Dist. 1989), was not the proper labor law trade libel
standard to apply in Illinois. Lowe adopted the libel standards
enunciated by this Court in Linn v. United Plant Guard Workers,
383 U.S. 53 (1966). The appellate court below, however, chose to
accept the elements of private corporate trade libel relied upon by
another Illinois appellate court in 1979 in Vee See Constr. Co. v.
Jensen & Halsiead, Lid., 79 Ill. App. 3d 1084, 399 N.E.2d 278 (lst
Dist. 1979). That case involved two corporate entities in which the
court held that “the alleged defamation must assail the corporation’s
financial position, business methods, or accuse it of fraud or
mismanagement.” 7a.
However, the corporate trade libel standard should have no
application to the situation at bar. A careful reading of the Vee See
standards show that it applies exclusively to situations of libel per
se in the financial arena: “[t]o state a cause of action for libel per
se where the plaintiff is a corporation, the statements allegedly
defaming the plaintiff in its trade or business must assail the
oo
corporation’s financial position or business methods, or accuse it of
fraud or mismanagement.” Vee See, 399 N.E.2d at 281.°
Federal labor law plainly preempts state libel per se standards.
The Court has always understood that federal labor rights would be
burdened by allowing per se libel standards in labor disputes and
ruled in Linn, 383 U.S. at 58, 65, that per se standards are preempt-
ed because state laws cannot account for intangible rights established
by federal labor law:
As we have pointed out, certain language characteristic of
labor disputes may be held actionable per se in some state
courts. These categories of libel have developed without
specific reference to labor controversies....We therefore
hold that a complainant may not recover except upon proof
of such harm, which may include general injury to reputa-
tion, consequent mental suffering, alienation of associates,
specifie items of pecuniary loss, or whatever form of harm
would be recognized by state tort law.
Linn, 383 U.S. at 65.
Therefore, to prevent interference “with effective administration
of national labor policy,” Linn, 383 U.S. at 64, this Court chose to
adopt the free speech test from New York Times v. Sullivan, 376
U.S. 254 (1964), and specifically to apply its “malice” test to labor
Cases:
* In a factually similar case, Wolf Street Supermarkets, Inc. v. McPartland, 108
A.D.2d 25, 487 N.Y.S.2d 442, 117 Lab. Cas. (CCH) 80,382 (App. Div. 1985), the
court considered a tortious interference with business relations claim against union
picketing and leafletting with false statements. The court adopted the Linn malice
standard of proof and found that a corporation's reputation can be damaged by
umon activity. “It could have shown by direct testimony from persons in the
community that the statements were understood by them to impeach the plaintiff's
integrity or business methods causing them to shop elsewhere.” /d. at 80,386. The
court below rejected this same contention made by Geske. 7a.
2.
Construing the [Labor] Act to permit recovery of damages
in a state cause of action only for defamatory statements
published with knowledge of their falsity or with reckless
disregard of whether they were true or false guards against
abuse of libel actions and unwarranted intrusion upon free
discussion envisioned by the Act.
Linn, 383 U.S. at 65 (emphasis added).
The Lowe court referred to the above passage in Linn, Lowe,
535 N.E.2d at 1071,° in adopting this test. Contrary to the court
below, this adoptive position was not merely an inartful “comment”
or legal “dicta” concerning the state of libel law in labor disputes as
the appellate court suggested, 6a, but an absolutely correct statement
of law. In fact, the appellate court’s observation that “the case law
pertaining to libel, where the plaintiff is a corporation, is clear,” 7a,
is itself directly contrary to the federally mandated balance achieved
by this Court in Linn and Austin, infra.’
° The appellate court stated in Lowe:
“The issue is whether defendant, with actual malice, published a
statement with knowledge of its falsity, or in reckless disregard for the
truth. While truth or falsity is an important element in the tort of trade
libel, it is certainly not the only issue to be considered. The issues of
injury to reputation and defendant's mental state must also be consid-
ona"
” The appellate court stated that Geske asserted the Lowe standard as the
correct legal standard “for the first time on appeal.” 6a. Geske respectfully submits
that the cbservation is not incorrect, but must still be allowed as the question raises
an issue of subject matter jurisdiction. In Geske’s very first motion to the trial court
(Plainuff's Motion for Temporary Restraining Order and Preliminary and Permanent
Injunction, dated Sept. 5, 1991), it argued that “{tJhe standard this appellate court
must apply is whether Defendants, with actual malice, published a statement with
knowledge of its falsity, or in reckless disregard of its truth, Lowe Excavating Co.
...”" Motion at S. In Geske’s opening brief on appeal, Geske argued “the trial court
erred as a matter of law when it applied Vee See and failed to apply the standard
of malice or reckless disregard for the truth set forth in the Second District opinion
in Lowe Excavating Co.....Therefore the trial court should be reversed.” Brief at 20,
dated Feb. 24, 1992. See also Complaint { 20.
: e
Any difficulty the appellate court might have had in reconciling
the traditional state trade libel elements with ihe Linn labor law
requirement was settled by the Court in Old Dominion Branch No.
496, Letter Carriers v. Austin, 418 U.S. 264 (1974) (“Austin’’).
There, a worker brought a libel action in state court against his
—————unton’s—publiely—naming him and other workers “scabs.” The
plaintiff prevailed on a standard of malice that equated “malice” with
the common law parlance of ill will and spite. Austin, 418 U.S. at
280-81. That, the Court ruled “reflects a fundamental misunder-
standing of the Court’s holding in Linn.” Jd., 418 U.S. at 281.
The Court’s decision completely occupies the field of labor
libel. Clearly, the Court replaced these state standards by issuing the
following affirmative statement concerning Linn:
The Court therefore found it necessary to impose substan-
tive restrictions on the state libel laws to be applied to
defamatory statements in labor disputes so as to prevent
“unwarranted intrusion upon free discussion envisioned by
the Act.” Linn, at 65, 86 S.Ct., at 644....Accordingly, we
held that libel actions under state law were pre-empted by
the federal labor laws to the extent that the State sought to
make actionable defamatory statements in labor disputes
which were published without knowledge of their falsity or
reckless disregard for the truth.
Austin, 418 U.S. at 272-73 (emphasis added).
Of course, the appellate court also said that recovery
would be permitted if the defamatory statements were
shown to have been made with malice. But the Court
was obviously using “malice” in the special sense it was
used in New York Times - as a shorthand expression of
the ‘knowledge of falsity or reckless disregard of the
truth” standard.
Austin, 418 U.S. at 281 (emphasis added).
-14-
Thus, the Illinois court’s Order broke down when it applied the
per se libel standard in the “corporate context” represented by Vee
See, 6a, to the “labor dispute” arena where Linn had “imposed”
application of the “malice/reckless disregard” standard of proof.’
This conflict is not isolated. It is mherent in the divergent view
taken by the states.
In Amalgamated Ass'n of Street, Elec. & Motor Coach Employ-
ees v. Lockridge, 403 U.S. 274, 2894, 296 (1971), this Court
recognized that “disparities in remedies and administration could
produce substantial conflict” where the “federal concern is pervasive
and its regulation complex.” Represented by the opinion below, the
state courts have not developed the law uniformly. They have
advanced in separate directions in response to the Court’s directions.
For example, in Hotel & Restaurant Employees, Local 681 v.
Anaheim Operating, Inc., 82 Cal. App.2d 337, 147 Cal. Rptr. 510
(Ct. App. 1978), the court recognized that the malice/reckless
disregard of the truth test in labor dispute defamation cases was
constitutionally required to prevent “SO different standards of
propriety during an organizational campaign.” This danger is
avoided if the states apply Linn uniformly to labor disputes.
This is the majority position, where the term “labor dispute”’ is
treated in the broadest sense. See Tosti v. Ayik, 386 Mass. 721, 437
N.E.2d 1062, 114 L.R.R.M. (BNA) 2558 (1982); Henderson v.
Teamsters, Local 313, 90 Wash. 2d 666, 585 P.2d 147, 99 L.R.R.M.
(BNA) 3472, 3474 (1978) (“the existence of malice is jurisdictional
and must be established to avoid federal preemption”). In Josti, the
Massachusetts Supreme Judicial Court read Linn and Austin to
mandate the New York Times standard in labor disputes. Moreover,
because subject matter jurisdiction was at stake, the issue could be
raised and considered any time. Jd. at 2560.
* At the time of Vee See, the Illinois courts had neither the reason nor the
power to extend its trade libel ruling to labor organizations, as unincorporated
organizations could not be sued in Illinois. American Fed'n of Technical Engrs. v.
LaJeunesse, 63 Ill. 2d 263, 266-67 (1976).
_— =
After remand for trial, the Tosti court considered the verdict in
light of the falsity involved and the damages awarded. Tosti v. Ayik,
394 Mass. 482, 476 N.E.2d 928, 108 Lab. Cas. (CCH) 77,638
(1985). Relying on Linn and Austin, 108 Lab. Cas. at 77,639, the
court ruled that “state courts may grant relief in such defamation
actions only if the defamatory statements were made with actual
malice, as defined in New York Times v. Sullivan {citation omitted].”
See also Dale v. Ohio Civil Serv. Employees Ass’n, 57 Ohio 3d 112,
567 N.E.2d 253, 136 L.R.R.M. (BNA) 2898, 2902 (1991) (common
law rule modified by Linn; standard also applies to public sector
labor disputes); OCAW v. Sinclair Oil Corp., 748 P.2d 283, 128
L.R.R.M. (BNA) 2709, 2713 (Wy. 1987) (observing that the Linn
Court “concluded that in the labor dispute context state libel
remedies were available only if a plaintiff could demonstrate actual
malice”); CWA v. Archibeque, 105 N.M. 635, 735 P.2d 1141, 125
L.R.R.M. (BNA) 2395 (1987) (same).
The appellate court below represents the contrary position. In
addition, other courts have concluded that the Linn malice test was
applicable in labor libel cases only “by analogy rather than by
constitutional compulsion,” Caruso v. Teamsters, Local 690, 33
Wash. App. 201, 653 P.2d 638, 111 L.R.IR.M. (BNA) 2927 (1982)
(damages awarded for “Don’t Patronize” articles in union press),
citing Linn, 383 U.S. at 65. In Oetzman v. Ahrens, 145 Wis. 2d,
560, 566, 427 N.W.2d 421, 424 (1988), a union official’s grievance
letter to management, led to a libel award of compensatory damages.
The Wisconsin Supreme Court narrowly construed the meaning of
“labor dispute” and ruled that “Linn’s vitality is limited to issues of
NLRB jurisdiction,” and where union elections and strikes are in
issue. 145 Wis. 2d at 566. “[W]hile Linn may be good precedent
on issues concerning the extent of the NLRB’s jurisdiction, it is of
little value as a guide to substantive law.” 145 Wis. 2d at 568.
Where a requirement of law is to show that a person “(a) knows
that the statement is false and that it defames another, (b) acts in
reckless disregard of these matters, or (c) acts negligently in failing
to ascertain them,” the Restatement (Second) of Torts § 580B,
comment 1, places liability on the defendant when there is a high
degree of awareness that the utterance is untrue:
_ e
Reckless disregard is held not to be measured by whether
a reasonable prudent person would have published the
statement without more investigation. Reckless disregard
is said to exist, however, when there is “a high degree of
awareness of...probable falseness” of the statement, or
there are “serious doubts as to [its] truth.” Availability of
sufficient time and opportunity to investigate the truth of
the statement is a significant factor in deciding whether the
publisher was negligent (see § 580B, Comment h), and it
may have some relevance in determining whether the
publisher acted with reckless disregard as to truth or
falsity.
Restatement (Second) of Torts § 580A, comment d.
“Before the test of reckless or knowing falsity can be met, there
must be a false statement of fact.” Austin, 418 U.S. at 284, ora
false representation of fact. /d. at 286. See Steinhilder v. Alphonse,
68 N.Y.2d 283, 501 N.E.2d 550, 123 L.R.R.M. (BNA) 2937, 2941
(1986) (calling a co-worker a “scab” may be either a statement of
opinion or a fact depending upon the circumstance). Here, the tale
told by respondents to Geske’s customers were total fabrications.
They were not equivocal statements or opinions, but a set of facts
absolutely untrue. Local 150’s claims that Geske was “out of
business” and Geske’s workers were themselves striking, is in utter
isolation of the only facts relevant to support such a public charge.
These allegations against Geske were facially false statements of fact
that represented evidence of actual malice or at least reckless
disregard for the truth, in the circumstances that Local 150 knew
were untrue or could ascertain the truth.
The union knows that a necessary element of a “strike” is the
existence of an employee-employer relationship and that this
relationship did not exist between Local 150 and Geske. Local 150
is a knowledgeable labor organization and is presumed to know that
a “strike” is a situation where employees refuse to-work for their
employer to coerce concessions to employees’ demands. See NLRB
v. Illinois Bell Telephone Co., 189 F.2d 124, 127 (7th Cir. 1951)
(“The term ‘strike’ is applied commonly to a combined effort on the
o iT.
part of a body of workmen employed by the same master to enforce
a demand.”). “After all, the labor movement has grown up and must
assume ordinary responsibilities. The malicious utterance of
defamatory statements in any form cannot be condoned, and unions
should adopt procedures calculated to prevent such abuses.” Linn,
383 US. at 63.
The courts have carefully affirmed the distinction between the
opinion portion of a statement and the fact portion of a statement as
the Restatement has done. /d. at 983. If part of a communication
is privileged and part is not, a defendant is liable for the unprivileg-
ed portion. § 599, Comment b. “If for any reason it is found to be
impossible to make a severance of the harm done, the privilege is
lost and the defendant is subject to liability for the total harm. §
605A, Comment b. Mittelman v. Witous, 135 Ill. 2d 220, 552
N.E.2d 973, 1983 (Sup. Ct. 1989) (mixed expression of opinion
actionable); Higgins v. Gordon, 433 N.W.2d 306 (Ct. App. IA 1988)
(explaining application of Restatement of Torts).
In this context, the appellate court’s refusal to adopt the New
York Times/Linn test was clear error and establishes a grave
precedent that will have immediate repercussions in the states.’
Since the action of the court below impermissibly intrudes on
the federal scheme that this Court in Linn carefully constructed to
“limit[] the availability of state remedies for libel to those instances
in which the complainant can show that the defamatory statements
were circulated with malice or caused him damage,” 383 U.S. at 64-
65, the Court should grant the Petition to resolve the conflicting
interpretation of federal law being made in the state courts and
* This is an important question in Illinois itself. Local 150 is involved in at
least three cases presently in which the First Question Presented is in issue: Geske
& Sons, Inc. (the instant case) v. Operating Engineers, Local 150, Lowe Excavating
Co. v. Operating Engineers, Local 150, No. 88-CH-034 (Illinois), and DiMucci
Construction Co. v. Operating Engineers, Local 150., No. 90-L-441 (Illinois). The
issue also arose in Virgil Jean v. William E. Dugan, 814 F. Supp. 1401, 1410 (N.D.
Ind. 1993) (Dugan is President of Operating Engrs., Local 150). Each case has
applied a different view of Linn.
= -
assure the supremacy of federal law under the Supremacy Clause of
the Constitution, Art. VI, Sec. 2.
Il. THE APPELLATE COURT’S RULING THAT
HELD FACIALLY UNTRUE LANGUAGE CANNOT
BE ENJOINED CONFLICTS WITH DECISIONS IN
OTHER STATES THAT ALLOW UNION FALSE
STATEMENTS OF FACT TO BE RESTRAINED
Just as the this Court recognized years ago that a union has a
privilege to conduct “limited recognitional picketing,” Sears,
Roebuck & Co. v. San Diego County Dist. Council of Carpenters,
436 U.S. 180 (1978), this Court has recently ruled that the privilege
does not extend to nonemployee union organizers who engage in
tortious activity. Lechmere v. NLRB, 112 S. Ct. 843, 846-47 (1991).
In Lechmere, the NLRB attempted to impair an employer’s
property rights by allowing organizers to march upon it. The Court
ruled that an employer did not lose its property rights when non-
employees attempt economic action against it. Moreover, the Court
recognized a “critical distinction between the organizing activities of
employees (to whom § 7 guarantees the right of self-organization)
and nonemployees (to whom § 7 applies only derivatively),” 112 S.
Ct. at 846. In these cases, “the trespasses of nonemployee union
organizers are ‘far more likely to be unprotected than protected.’”
Id.
In the present case, the decision of the California Supreme
appellate court in Magill Bros., Inc. v. Building Serv. Employees’
Int’l Union, 20 Cal. 2d 506, 127 P.2d 542 (1942), is persuasive
authority that untruthful language may be enjoined in labor disputes.
There, the union attempted to organize the employer’s workers
without an election, id. When the employer refused to sign a
contract based solely upon the union’s demand for recognition, the
union began picketing with signs stating: “This house on strike.
AFL.”
- 19.
The employer brought an action for preliminary injunctive
relief. Id. at 543. “The sole issue, therefore, is whether the trial
court erred in denying injunctive relief in a case where it found that
the banners and signs carried by the pickets conveyed false and
untrue information to the general public.” Jd. Also United Farm
Workers v. Superior Court, 4 Cal. 3d 554, 483 P.2d 1215, 77
L.R.R.M. (BNA) 2208, 2216-17 (1971) (untruthful picketing
Statements enjoinable).
The Supreme Court of California held that “{t]here can be no
doubt that untruthful picketing is unlawful picketing.” Magill, 127
P.2d at 543. It further found that,
here is not the utterance of false statements which is
sought to be enjoined, but the conduct of picketing in an
unlawful manner. The mule in this regard is analogous to
the principle that while equity will not ordinarily enjoin
activity which is criminal in nature, neither will it refuse
to act where an independent ground for relief is presented
merely because the acts sought to be enjoined are criminal.
See 5 Pomeroy, Equity Jurisprudence, Equitable Remedies,
2d Ed. § 2050, p.4630. Despite theoretical criticism and
despite the fact that the publication of false statements
alone will not justify equitable relief, it is the nearly
unanimous rule throughout the country that equity will
intervene where false or fraudulent statements are com-
bined with picketing and where, under local policy, this
renders the picketing illegal.
127 P.2d at 544 (emphasis added).
Thus, the Magill court held that “[tJhe right to restrain the use
of false or untruthful statements made in connection with picketing
does not restrict the right to picket peacefully and honestly.” 127
P.2d at 545. As Geske has argued here, it sought to enjoin the
union’s conduct of engaging in false publications, not in utterly
restraining the union’s right to picket or to inform the public
truthfully that unionization is best for Geske’s workers.
« 2 «
As the Austin Court clarified, there are many ugly statements a
union may make under federal law. However, the same law
removes its shield when the union is not providing opinionated
statements to the public, but is providing the public with factually
false information that the union knows is untrue or is in reckless
disregard for the truth. Where Local 150 has supplemented its “On
Strike” signs with utterances to the public that it was Geske’s own
employees that were on strike, state court’s are not powerless to stop
the publications that are defamatory in nature."°
Consequently, the present order of the Illinois appellate court
places Illinois court’s at odds with the jurisprudence developed post-
Linn in other states and fails to protect the important property
interests of neutral employers and workers. The failure of the
appellate court below to consider these factors in failing to use the
proper legal standards in deciding whether to grant injunctive relief
for the factual statements/misconduct aspects of Local 150’s acts, is
grave error that requires this Court’ supervision to correct.
'© This case would be much different if Local 150 informed customers that it
was “acting on behalf of its members, to unionize the plaintiff's workplace,” as the
appellate court suggests. 9%a. However, publicizing the truth would not provide
Local 150 with the desired attempt to sufficiently injure Geske financially into
recognizing Local 150. As the testimony in the circuit court reflects, the public will
respect a picket line set up by employees, but is likely to cross lines set up by the
union for recognitional or area standards purposes. Tr. Vol. II at 142-44.
ee
CONCLUSION
For these reasons, Petitioner respectfully requests that a writ of
certiorari issue to review the judgment of the court of appeals.
Respectfully submitted,
Gerard C. Smetana*
LAW OFFICES OF
GERARD C. SMETANA
333 West Wacker Drive, Suite 1015
Chicago, Illinois 60606
(312) 357-0250
Michael E. Avakian
CENTER ON NATIONAL LABOR
POLICY, INC.
5211 Port Royal Road, Suite 103
North Springfield, VA 22151
(703) 321-9180
*Attorney of Record for Petitioner
Dated: October 1, 1993
ga eaten pale
la
No. 2-91-1169
IN THE
APPELLATE COURT OF ILLINOIS
SECOND DISTRICT
This Order Is Not Precedential
And Is Not To Be Cited
GESKE & SONS, INC., ) Appeal from the Circuit Court
) of McHenry County.
Plaintiff-Appellant, )
)
v. ) No. 91-CH-273
)
INTERNATIONAL UNION )
OF OPERATING ENGINEERS, )
NO. 150; CHUCK AUGUST, _)
et al, ) Honorable
) Michael J. Sullivan
Defendants-Appellees. ) Judge, Presiding.
ORDER
The plaintiff, Geske & Sons, Inc., appeals from a September 27,
1991, directed finding by the trial court for the defendants, the
International Union of Operating Engineers Local No. 150 and
Chauffeurs, Teamsters and Helpers Local Union No. 301, denying
the plaintiff's requested injunctive relief. The plaintiff argues on
appeal that (1) the court used the wrong corporate libel standard; (2)
the court’s finding that the “on strike” language on the picket signs
did not assail the plaintiff's business methods or financial condition
was against the manifest weight of the evidence; (3) the court’s
finding that there was no tortious interference with contractual
relations and prospective advantage was against the manifest weight
of the evidence; and (4) the court erred in finding that the Illinois
Anti-Injunction Act (Ill. Rev. Stat. 1991, ch. 48, par. 2 (a)) barred
injunctive relief.
The plaintiff is a corporation engaged in the business of asphalt
paving and the manufacture of asphalt mix for sale to commercial
customers. The plaintiff is an open shop employer and its employ-
ees are not represented by any labor union. The defendants are
labor organizations that represent operating engineers of heavy
excavating and earth moving equipment and drivers who haul
material.
On September 5, 1991, the plaintiff filed both its original and
its amended verified complaints for a temporary restraining order,
for preliminary and permanent injunctions, and for damages against
the defendants. The plaintiff alleged that the defendants had
committed trade libel against it by picketing at the plaintiffs plant
with false “on strike” signs. Additionally, the plaintiff alleged that
the defendants committed tortious interference with contractual
relations and tortious interference with prospective economic
advantage by interfering with the loading and unloading of material
and threatening and intimidating customers who attempted to
conduct business with the plaintiff.
On September 5, 1991, the plaintiff obtained a temporary
restraining order against certain alleged conduct by the defendants.
On September 6, 1991, the defendants filed a petition of removal to
the United States District Court for the Northern District of Illinois.
In their petition, the defendants asserted that the plaintiff alleged
cognizable claims under federal law, or, alternatively, against
conduct protected by the National Labor Relations Act (NLRA)(29
U.S.C. 151, et seq. (1982)). The federal court remanded the
plaintiff's complaint, concluding that the complaint did not contain
a federal claim and was, therefore, not subject to removal.
On September 12, defendant Local 150 moved to dismiss the
plaintiff's claims on the ground that the claims were preempted by
federal law or, alternatively, that the Illinois Anti-Injunction Acct (Ill.
Rev. Stat. 1991, ch. 48, par. 2(a)) precluded injunctive relief. After
hearing oral argument on September 16, 1991, the court denied
Local 150’s motion to dismiss, and stated that the issue of the
Anti-Injunction Act was premature.
3a
On September 27, 1991, after an evidentiary hearing, where the
plaintiff presented approximately 18 witnesses, the court granted a
directed finding for the defendants pursuant to section 2-1110 of the
Code of Civil Procedure (Ill. Rev. Stat. 1991, ch. 110, par. 2-1110).
The plaintiff appeals from that directed finding.
The following pertinent testimony underlies the plaintiff s claims
against the defendants. On August 19, 1991, the defendants’
picketers stationed themselves in front of the piaintiff's asphalt plant
with picket signs. The signs stated that “I.U.O.E. Local 150 On
Strike against Geske For Recognition As Majority Bargaining
Representative of Company’s Operating Engineer Employees.” The
“on strike” language was in large bold red letters while the balance
of the words on the signs were handwritten in a fraction of the “on
strike” size.
On that same date, two of plaintiff customers, Performance
Paving and All American Asphalt Maintenance (All American)
attempted to obtain asphalt from the plant. When Performance
Paving pulled a truck up to the plant, the picketers stood in front of
the truck and stated to the driver, “Geske employees are on strike,
why don’t you go to [Geske’s competitor].” The driver turned around
and left the plaintiff's plant without asphalt. The same statement
was made by a picketer to All American drivers, and to its owner.
Some picketers held up lit lighters and told an All American driver
that they knew where he parked his truck in Mundelein. The All
American drivers left the plant without hauling any asphalt.
The picketers also followed those trucks that crossed their
picket lines. There was testimony that the picketers sometimes
drove several feet behind the trucks, at up to 55 miles per hours.
Also, there was testimony that the picketers drove very closely both
in front and behind the loaded trucks. There was also testimony
describing various intimidating behavior on the part of the picketers,
and threats made to customers that if they used the services of the
plaintiff, they too would be picketed by the defendants.
4a
The plaintiff alleges that as a result of the picketers’ unlawful
activities, 60% of the plaintiff's regular credit customers now refuse
to do business with it. Additionally, the plaintiff asserts that its
aggregate and cartage suppliers now refuse to do business with the
plaintiff.
The defendants argue, at the outset, that the Plaintiff's claims
for injunctive relief are preempted by section 8 of the National
Labor Relations Act (NLRA) (29 U.S.C. 158 (b)(7)(1982)). This
provision requires preemption whenever conduct complained of is
“arguably subject” to the jurisdiction of the National Labor Relations
Board (NLRB). (Lowe Excavating Co. v. International Union of
Operating Engineers Local No. 150 (1989), 180 Ill. App. 3d 39, 44).
However, there is an exception to preemption when the State’s
interest outweighs any peripheral federal concern or “where the
regulated conduct touches iterests so deeply rooted in local feeling
and responsibility that, in absence of compelling congressional direc-
tion, we could not infer the Congress had deprived the States of the
power to act.” (Lowe, 180 Ill. App. 3d at 45, citing San Diego
Building Trade Council, Millmen’s Union, Local 2020 v. Garmon
(1959), 359 U.S. 236, ,3 L.Ed2d 775, , 79 S. Ct. 773, .)
Restated, if the risk of interference by State involvement is minimal
and the activity in question is only a peripheral concern of the
NLRB, the matter is not preempted, and the State may proceed.
Lowe, 180 Ill. App. 3d at 45.
The United States Supreme Court, in the case of Linn v. United
Plant Guard Workers of America, Local 114 (1966), 383 U.S. 53,
__, 15 L.Ed.2d 582, __, 86 S.Ct. 657, __, specifically held that the
State’s interest in redressing malicious libel is so deeply rooted in
local feeling and responsibility that it fits within the exception
specifically carved out by Garmon, and that such claims are
therefore not preempted. See also Fisher v. Illinois Office Supply
Co. (1984), 130 Ill App. 3d 996, 999-1000; Krasinski v. United
Parcel Service, Inc. (1988), 124 Ill. 2d 483, 493-94.
The defendants argue on appeal, that in contrast to ordinary
libel actions, the plaintiff in the case at bar is asking the State court
5a
to determine whether the defendants falsely picketed by merely
“implying” that its employees were on strike, thus injecting the court
directly into the merits of a labor controversy. However, the
underlying issue in this case is not whether the defendants are
entitled to picket, thereby forcing the employees or employers to
recognize the defendants as a bargaining representative, but rather
whether the defendants committed trade libei. These issues are only
of peripheral concern to the NLRB. (See Krasinski, 124 Ill. 2d at
493.) We therefore find that this cause of action fits into the excep-
tion carved out by Garmon and therefore, we find that we are not
preempted by the jurisdiction of the NLRB.
We next address the merits of the plaintiff's arguments on
appeal. Pursuant to section 2-1110 of the Code of Civil Procedure
(Ill. Rev. Stat. 1991, ch. 110, par. 2-1110) in all cases tried without
a jury, a defendant may, at the close of the plaintiff's case, move for
a directed finding. (Dyduch v. Crystal Green Corp. (1991), 221 Ill.
App. 3d 474, 477.) In ruling on a motion for a directed finding, the
court must first determine if the plaintiff has presented a prima facie
case and enter judgment for the defendant if the plaintiff has, failed
to do so. (Dyduch, 221 Ill. App. 3d at 477.) If a plaintiff has
presented a prima facie case, the court must weigh the evidence,
including any favorable to the defendant, pass on the credibility of
the witnesses, draw reasonable inferences and generally consider the
weight and quality of the evidence. Dyduch, 221 Ill. App. 3d at
477.) The decision of the trial court to grant a defendants’ motion
for a directed finding will not be reversed on review unless it is
against the manifest weight of the evidence. Dyduch, 221 Ill. App.
3d at 477.
In order to obtain preliminary injunctive relief, the trial court
must determine, among other factors, the likelihood that the plaintiff
will succeed on the merits of the claim. (Handy Andy Home
Improvement Centers, Inc. v. American National Bank and Trust Co.
(1988), 177 Ill. App. 3d 647, 652.) In the case at bar, the trial court
denied the preliminary injunction on the basis of this consideration;
it found that the plaintiff had little likelihood of success on the
merits of its claims.
6a
In the court’s determination of the plaintiff's likelihood of
success on the merits of its libel claim, the court applied the test for
corporate trade libel set forth in Vee See Construction Co. v. Jenson
and Halstad, (1979), 79 {ll. App. 3d 1084, 1088. The court noted
that the plaintiff argued that this was the proper standard to use in
the instant case. The standard in Vee See requires that “the
statements allegedly defaming the plaintiff in its trade or business
must assail the corporation’s financial position or business methods,
or accuse it of fraud or mismanagement.” (Vee See, 79 Ill. App. 3d
at 1088-89.) The court found that the “on strike” signs and any
reasonable extension of what the signs read could not be thought to
assail the corporation’s financial position or its business methods, nor
did it accuse the plaintiff of any type of fraud or mismanagement.
The plaintiff argues, for the first time on appeal, that the court
applied the wrong trade libel standard, asserting that the court should
have applied the standard of malice or reckless disregard for the
truth as set forth in Lowe Excavating Co. v. International Union of
Operating Engineers Local 150 (1989), 180 Ill. App. 3d 39, 47-48.
The plaintiff argues that this libel standard should apply here
because the trade libel alleged in this case is in a “labor context” as
opposed to a traditional corporate context.
In Lowe, a plaintiff employer sued a defendant union to enjoin
the defendant from picketing with placards that purportedly con-
tained false statements. (Lowe, 180 Ill. App. 3d at 43.) The sole
issue in front of the Lowe court was whether the trial court’s
determination of federal preemption was proper. (Lowe, 180 Ill.
App. 3d at 43.) In explaining why the issue im that case was only
of peripheral concern to the NLRB, but of great concern to the State,
thereby precluding preemption, the court stated in dicta that the issue
facing the lower court was not a labor law question, but “whether
the defendant, with actual malice, published a statement with
knowledge of its falsity, or in reckless disregard for the truth.”
Lowe, i80 Ill. App. 3d at 47-48.
The Illinois Supreme Court has stated that the precedential
scope of a decision is limited to the facts before the deciding court.
Ta
(Board of Trustees of Police Pension Fund v. Illinois Human Rights
Comm'n (1986), 141 Ill App. 3d 447, 455.) General expressions
in a court’s opinion which go beyond what is necessary to decide a
case are entitled to respect; however, such expressions are not
binding authority. Board of Trustees, 141 Ill. App. 3d at 456.
When read in context, the Lowe court’s comment did not define
a new standard by which to judge a libel action brought by a
corporation. The court merely inartfully attempted to point out that
the issue in the lower court did not require interpretation of a labor
dispute controlled by federal law, but only a determination of
whether the picket signs constituted libel. The case law pertaining
to libel, where the plaintiff is a corporation, is clear: the alleged
defamation must assail the corporation’s financial position, business
methods, or accuse it of fraud or mismanagement. See Harris Trust
& Savings Bank v. Phillips (1987), 154 Il. App. 3d 574, 579;
American International Hospital v. Chicago Tribune (1985), 136 II.
App. 3d 1019, 1025; Audition Division, Lid v. Better Business
Bureau (1983), 120 Ill. App. 3d 254, 256; Vee See, 79 Ill. App. 3d
at 1088-89.
The plaintiff argues that even if the Vee See standard of libel
is used, the court’ s finding that the picket signs did not constitute
libel was against the manifest weight of the evidence. The plaintiff
further argues that if Vee See is the proper standard, it should be
more liberally applied because this case is in a labor context.
We find that the Vee See standard was proper in this case
because the plaintiff was a coporation. We also are not convinced
by the plaintiff that the Vee See standard should be interpreted
differently because this is a labor context. Lastly, we do not find
that the court’s determination, that the “on strike” signs were not
libelous, was against the manifest weight of the evidence. See
Dyduch, 221 Ill. App. 3d at 477.
The plaintiff next argues that the court’s finding that the
defendants did not tortiously interfere with its contractual relations
and prospective economic advantage was against the manifest weight
8a
of the evidence. The plaintiff notes the court’s finding that the
evidence established that there was a certain level of interference by
the defendants, but that the interference was not wrongful, unlawful,
or violent. The plaintiff, however, asserts that there is no require-
ment that tortious interference be unlawful, wrongful or violent to
constitute a tort, and that the defendants tortiously interfered with it
by the “misrepresentations” on their signs and by harassing the
plaintiff's customers. The defendants argue that their conduct of
“recognitional picketing” is protected, and is, therefore, not unjusti-
fied or wrongful.
The court found that there was no significant evidence of any
unlawful trespass on the part of the defendants, that the defendants
were not doing any unlawful act by following trucks that left the
plaintiffs plant, and that stopping customer trucks to talk to drivers
did not constitute wrongful interference. The court also found that
there was no evidence of threats of violence to any person.
In an action for tortious interference with prospective economic
advantage, the plaintiff must prove (1) his reasonable expectation of
entering into a valid business relationship; (2) the defendant’s
knowledge of the plaintiff's expectancy; (3) purposeful interference
by the defendant that prevents the plaintiffs legitimate expectancy
from ripening into a valid business relationship; and (4) damages to
the plaintiff resulting from such interference. (Fellhauer v. City of
Geneva (1991), 142 Ill. 2d 495, 511.) The elements for an action of
tortious interference with contractual relations are similar. They
require that the plaintiff establish, as a substitute for the third
element, that the defendant intentionally and without justification
induced a breach of contract; and they [sic] adds an additional
element of “a subsequent breach by the third party caused by the
defendant’s wrongful conduct.” Certified Mechanical Contractors v.
Wight & Co. (1987), 162 Ill. App. 3d 391, 398.
The law recognizes that in many cases, a third party may be
privileged to interfere with existing contractual relations (Certified
Mechanical, 162 Ill. App. 3d at 400), and to interfere with a
prospective economic advantage (see Fellhauer, 142 Ill. 2d at 512).
9a
A third party is conditionally privileged when acting to protect a
conflicting interest that is considered, under the law, to be of equal
or greater value than the plaintiffs rights. However, the third party’s
acts must be legal and must not be unreasonable under the circum-
stances. (Certified Mechanical, 162 Ill. App. 3d at 400.) If conduct
of a third party is conditionally privileged, the plaintiff must prove
actual malice; the plaintiff must, then, establish that the defendant
acted with a desire to harm which was unrelated to the interest that
he was presumably seeking to protect. Certified Mechanical, 162 II.
App. 3d at 401.
In the instant case, the activity of the defendant labor unions,
namely, limited recognitional picketing, is protected by the NLRA.
(See 29 U.S.C. 157-158 (1982); Sears, Roebuck and Co. v. San
Diego County District Council of Carpenters (1978), 436 U.S. 180,
194 n.24.,_ LEd_,_ S.Ct.__) Also, a conditional privilege
to lawfully interfere exists where a union is acting on behalf of its
members. (See Santucci Construction Co. v. Baxter & Woodman
(1987), 151 Il. App. 3d 547, 554 citing Connaughton v. Gertz
(1981), 94 Ill. App. 3d 265, 270.)
The situation alleged here does not present an instance of
“outsiders intermeddling maliciously in the contracts or affairs of
other parties.” (Fellhauer, 142 Ill. 2d at 513.) Here, the defendants
were acting on behalf of its members, to unionize the plaintiff's
workplace. The defendants’ “on strike” signs were not of a libelous
nature, and cannot be the basis of a tortious interference claim.
Furthermore, activities of the picketers were peaceful and lawful.
Taking the above factors into consideration, we find that under
the circumstances the labor union was conditionally privileged to
lawfully interfere with the contractual agreements and prospective
economic advantage of the plaintiff. (Certified Mechanical, 162 Ill.
App. 3d at 400-401.) Additionally, we do not find sufficient
evidence in the record of actual malice on the par: of the defendants
to vitiate their conditional privilege. (Certified Mechanical, 162 Ill.
App. 3d at 401.) For the above reasons, we do not find that the
court’s determination that the defendants were not guilty of tortious
10a
interference with contractual relations and prospective economic
advantage was against the manifest weight of the evidence. Dyduch,
221 Ill. App. 3d at 477.
The parties also address the issue of whether the cause of action
is barred by the Illinois Anti-Injunction Acct (Ill. Rev. Stat. 1991, ch.
48, par. 2(a)). We do not address this issue, as we affirm the court’s
dismissal on other grounds.
For the foregoing reasons, the judgment of the circuit court of
McHenry County is affirmed.
Affirmed.
GEIGER, J., with UNVERZAGT and WOODWARD, JjJ.,
concurring.
lla
CIRCUIT COURT FOR THE 19TH JUDICIAL CIRCUIT
STATE OF ILLINOIS } GEN. NO. 91 CM 273
COUNTY OF MCHENRY } SS_ QO Jury ® Non-Jury
GESKE & SONS, INC.,
pitf. FILED
VS. McHENRY COUNTY, ILLINOIS
SEP 27, 1991
TUOE LOCAL 150, and VERNON W. KAYS, JR.
TEAMSTERS Local 301 CLERK OF THE CIRCUIT COURT
Date 9/27/91 Plaintiff's Gerard C. Smetana Defendant’s Dale D. Pierson
Attorney David LeSeur__ Attorney Harold McKenney
ORDER
This matter coming to be heard upon Defendants’ Motion to
find in their favor under § 2-1110 at the close of Plaintiff's evidence
in support of their Motion for Preliminary Injunction, and the Court
being fully advised, it is hereby ORDERED that for the reasons
stated in open court Defendants’ Motion is granted, and Plaintiffs’
Motion for Preliminary Injunction is denied.
Plaintiff's motion, subsequent to the court’s denial of Motion for
Preliminary Injunction, to file 3d Amended Complaint, is granted,
and it may be filed instanter.
Prepared by: Dale D. Pierson
Attorney for: TUOE, Local 150
Attorney Registration No. C000200 Judge /s/ Michael J. Sullivan
12a
S.28931
STATE OF ILLINOIS )
)
COUNTY OF MCHENRY )
IN THE CIRCUIT COURT FOR THE
NINETEENTH JUDICIAL CIRCUIT
MC HENRY COUNTY, ILLINOIS
GESKE & SONS, INC.,
Plaintiff,
v. No. 91-CH-273
INTERNATIONAL UNION OF
OPERATING ENGINEERS,
LOCAL NO. 150 AND
CHAUFFEURS, TEAMSTERS
AND HELPERS, LOCAL
UNION NO. 301,
Nee Nee eee eee eee ee ee “ee” ee” eS”
Defendants.
REPORT OF PROCEEDINGS had and testimony taken at the
trial of the above-entitled cause, before the Honorable Michael J.
Sullivan, Judge of said Court, at the McHenry County Government
Center, 2200 North Seminary Avenue, Woodstock, Illinois, on the
27th day of September, A.D. 1991, at the hour of 10:00 o’clock a.m.
Page 1366
THE COURT: I apologize for being a little later than I said, but
there was more stuff here to read than I thought at the time; and
13a
while counsel, you know, deal in the labor vineyard all the time, it
is not something that the Court necessarily does.
The Court had to consider your arguments and really figure out
what it is doing and why it is here today and what the purpose of
this proceeding is.-
We are here and the Court has been hearing testimony with
regard to a preliminary injunction that was entered previously in this
case.
The Court has heard testimony on behalf of the plaintiff. The
plaintiff has rested, and we are here now on the defendants’ motion
for a directed verdict or a directed finding at the end of the plaintiff's
case.
As has been pointed out previously, there is a provision under
the Code of Civil Procedure of the State of Illinois involving
motions in non-jury cases, to find for defendant at the close of the
plaintiff's evidence. It’s Section 2-1110.
And the section of the statutes says, “In ruling on the motion,
the Court shall weigh the evidence, considering the credibility of the
witnesses and the weight and quality of the evidence.”
The action that is before the Court on the complaint, the
complaint as amended by the plaintiffs, seeking injunction, injunc-
tive relief and other ancillary relief, basically, on three bases, three
different counts of tort in the State of Illinois, 1, trade libel, on the
other tortious interference with prospective economic advantage and
the tortious interference with economic advantage, present tense.
There has been mention before by both parties of an earlier case
deciding in the Second Appellate District, in which myself as
presiding judge was involved, and one of the parties, the Local 150.
The present plaintiff, Geskes, were not involved, but counsel
Smetana and Pierson were involved, that being the Lowe, L-o-w-e,
Excavating Company versus Local 150.
14a
But for the change of parties, to a certain extent, this matter
before the Court is how [sic] revisited, only Part 2.
In that case, this Court granted -- I don’t remember the exact
nature of the motion -— but I think a motion finding that the
activities that were being conducted at that time were preempted by
federal law or regulations; and then that matter went to the Second
District Appellate Court, from whence it was reversed and remanded;
and J know, I think one or both counsel had told me it went
elsewhere; but, in any event, we are here with regard to the findings
of the Second District Appellate Court.
In that case, the Appellate Court, as has been indicated before,
and I have the 535 Northeast Second Reporter, Second Series, the
case beginning at 1065, and at 1068, the Appellate Court has
indicated the sole issue on appeal is whether the National Labor
Relations Act deprived the State Court of jurisdiction to enjoin the
union from picketing with placards containing knowingly false
statements or statements made in reckless disregard to the truth.
And then the Court, in that case, cites the elements which a
Trial Court should consider in deciding whether to issue a prelim-
inary injunction; and also on Page 1068, it cites three standards: 1,
the possibility of wreparable harm to the plaintiffs legal nghts
pending the outcome of the trial if the preliminary injunction does
not issue; 2, the potential irreparable harm to the defendants’ night if
it does; and, third, the plaintiffs likelihood of success on the merits;
and for those propositions, it cites a 1987 Supreme Court of Illinois
case, Kanter, K-a-n-t-e-r, versus Eisenberg, E-i-s-e-n-b-e-r-g, versus
Mattson & Associates, at 116 Illinois 2d, 506.
But it goes on to indicate that the issue before the Court in
Lowe in the Appellate Court was not whether the Court abuses its
discretion in denying the request for the injunction, but whether its
refusal to exercise jurisdiction or discretion was proper.
And then it goes in and discusses the question of preemption;
and on Page i069, it talks about the second type of federal pre-
15a
emption, which eventually it said, I think, didn’t apply, and then
which is, it said, “The second type of federal preemption requires
preemption whenever the conduct complained of,” and then in
quotes, in open quotes, ‘arguably subject,’” close quotes, “to the
jurisdiction of the National Labor Relations Board.” It goes on to
say, in open quotes, “‘However, even if the claim involves state
torts that are arguably subject to jurisdiction of the NLRB.’”
The Court in Garmon, which is G-a-r-m-o-n, noted an exception
to preemption, “When the State’s interests outweigh any peripheral
federal concern or where the regulated conduct touched interests so
deeply rooted in local feeling and responsibility that, in the absence
of compelling Congressional discretion, we could not infer that
Congress can deprive the State of the power to act.”
And that case, again, was involving a request for injunction and
the complaint alleged tortious interference with contractual relation-
ships, tortious interference with prospective economic advantage,
trade libel and negligent interference with a contractor.
The sign in that case that was the subject of the suit was a red,
in quotes, “Notice to the Public: Lowe Excavating does not pay the
prevailing wages and economic benefits for operating engineers
——_—which are standard in this area. Our dispute concerns only substan-
dard wages and benefits paid by this company, Local 150, Interna-
tional Union of Operating Engineers, AFL-CIO,” close quotes.
The Appellate Court in Lowe also noted that the Illinois
Supreme Court held that an action in State Court for defamation is
not preempted by the jurisdiction of the NLRB, and they cite at
Krasinski, K-r-a-s-i-n-s-k-i, versus United Parcel Service, a 1988
case, 124 Illinois 2d at 483.
The Appellate Court found that, as far as the preemption went,
that case, the Lowe case, fell into the exemption cited by Garmon.
And then, as alluded to by Mr. Smetana, the Appellate Court,
on Page 1071 of the Lowe decision, stated, as follows:
l6a
“The underlying issue in this case is not whether plaintiff paid
wages sufficient to meet area standards, the issue is whether
defendant, with actual malice, published a statement with knowledge
of its falsity or in reckless disregard for the truth. While the truth
or falsity is an important element in the tort of trade libel, it is
certainly not the only issue it be considered. The issues of injury to
reputation and defendants’ mental state must be considered.”
The Appellate Court also went on to indicate -— and | think it’s
important with regard to this case -- that the defendant next contents
[sic] that the State of Illinois had enforced [sic] the Anti-Injunction
Act that is applicable. The Appellate Court noted that the Act may
or may not apply. The issue was not before that Court, and the Tnal
Court could not reach the issue; therefore, the question of whether
or not the Anti-Injunction Act applied in the Lowe case is not ripe
for review.
In the Lowe case, finally what happened is the Appellate Court
remanded to the Circuit Court of McHenry County this case to
review the plaintiff's motion for a preliminary injunction consistent
with the opinion.
That’s why I say it’s sort of Lowe Part 2, because that’s where
we are, at the stage of preliminary injunction, in determining
whether or not one should be granted.
The Lowe case, a Second Appellate District case, sets forth the
issues before the Court on a preliminary injunction, and another
injunction case heard by this Court, the Second District, a 1988 case,
Handy Andy Home Improvements versus American National Bank,
which is found at 177 Illinois Appellate 3d, 674.
It just reiterates those standards, and I am just indicating that,
as set forth in that Kanter versus Eisenberg case, the three standards,
and those are basically the standards that I have applied.
Some of the other things I think are peripherally involved, but
some of the ones that have a little more detail, are basically
17a
temporary restraining order cases; and here, since both sides have
had an opportunity to be present, and even at this point defendant
has not presented any evidence. They have had an opportunity to
cross examine
I am going to take those standards in reverse order and deal
with first the likelihood of plaintiff's success on the merits, and in
looking at the trade libel count first.
I note that, basically, this Court has to determine and look at
things that are of interest to the State, in protectable interest of the
State, as indicated in the cases cited in Lowe and cases that we have
talked about here.
Both counsel have at various times cited the Court to the
VeeSee Construction, that’s V-e-e-S-e-e, Construction versus Jensen
and somebody else. The case is found at 79 Illinois Appellate 3d,
1084, and at Pages 1089 to 90.
The Appellate Court in that case stated -- this is not an absolute
quote, but close to it - the stated cause of action or libel per se
where the plaintiff is a corporation, the statement must be allegedly
defaming the plaintiff in its trade or business, must assail the
corporation’s financial position or business methods or accuse it of
fraud or mismanagement, and that case has been cited by both the
plaintiff and the defendant to this point.
The Court has to review the matters before the Court.
The Court was going to say, somewhat prefatory before that,
you know, the matter before it and the issues before it the Court
finds to be, in general, a troubling area, personally; but I’m not here
personally, I’m here to try to apply the law as I can, and if we were
in a perfect world, we possibly wouldn’t have such conflict; but we
are not, and the Court has to deal with issues as they are in the law
and life as it is and do the best that it can to apply the law to the
facts.
18a
The sign that is in question in this case, the placard, which is,
I think, the only written statement we really have here, and I am
referring to Plaintiff's Exhibit No. 1, a photograph of a sign that
reads, “ITUOE Local 150,” in bold letters, “On Strike,” and in smaller
letters, against, and then in a printed form, the word, “Geske,”
G-e-s-k-e, and then back to printed, “for recognition,” and the next
word is, “as majority bargaining representative of company’s
operating engineer employees.” The sign is white, with red printing,
except for the word “Geske,” which is — when I say “printing,” |
mean printed as opposed to handwritten. The word “Geske” is
handwritten, and it’s like a black or blue ink.
The Court must look to the sign, and to determine whether or
not it falls within the area of the trade libel standard; and the Court
has heard and considered the explanation as to how that standard
applies, made by Mr. Smetana; but the Court believes that the sign,
as indicated, does not fall within that definition of trade libel as set
forth in the VeeSee case; that it does not — and I don’t think any
reasonable extension of what it says could be thought to assail the
corporation’s financial position or business methods or accuse it of
fraud or mismanagement.
And I would say peripherally — and | think that maybe |
shouldn’t say anything because the case is pending before me — but
I don’t think that the sign in Geske does by any reasonable interpre-
tation indicate a trade libel against Geske, and I believe that the
likelihood of success on the merits as to that count is small.
The issue was to tortious interference with contractual rela-
tionships and tortious interference with prospective advantage. I did
note that, you know, Counsel for plaintiff, in talking about this,
talked about interference with contractual relationships, but it has to
be a tortious or a wrongful interference with contractual relation-
ships.
Also, in commenting on some of the matters, first of all, there
is no evidence in the record, as has been pointed out, with regard to
19a
-- at least there is nothing that | recall -- as to violence, and | think
that’s been conceded.
The only question of threats, I think one has to -- again, the
admonition of the Court is to weigh the evidence and to the
credibility and the quality of the evidence; and on the issue of
quality, in weighing it, rather than on the issue of credibility, I think
one has to take a look at the evidence in the context of the group of
people that we are dealing with.
We are not dealing with cloistered nuns, we are not dealing
with second grade children, we are dealing with people in a labor
situation, truck drivers, people who are more sophisticated or
hardened in the ways of the world.
I’mnot certainly saying that truck drivers or operating engineers
or anyone else have to be subject to all kinds of treatment without
retribution; but I think, you know, giving one the finger or being
flipped off, these things, while certainly are rude, and crude possibly,
in terms of everyday life, I don t believe can be thought to be, to
one of normal sensibility, threatening, at least the -- some of the
other gestures are. There is no evidence of anyone being that con-
cerned about physical violence.
I think Mr. Larry Michael Geske indicated, and I think probably
summed it up, that he was threatened, he felt threatened for the
company, and that is in an economic sense.
But, you know, I think, fortunately, to a great extent, that’s what
these types of situations have somewhat to do with, economic
situations, that is, economic struggles and strife.
The Court believes that there is evidence the activities — |
would say, before I get into that - someone cited -- and I did read
the case of Fellhauer, it’s F-e-l-l-h-a-u-e-r, versus City of Geneva, 14
Illinois 2d, 495. It’s a Supreme Court case arising out of the Tnal
Court decision in Kane County, in the Appellate Court of the Second
District, involving an employee, apparently of the City of Geneva,
20a
and there were a couple of counts I noticed. There was a retaliatory
discharge count and there was a tortious interference count. It may
have some other things.
The Appeliate Court reversed the -- strike that.
The Supreme Court reversed the Appellate Court and affirmed
the Tal Court; but in the course of that opinion, it indicated -- and,
again, what I am doing is not an absolute quote, but it’s fairly close,
paraphrasing it
The Court, the Supreme Court stated it is generally recognized
by Illinois courts that to prevail on a claim for tortious interference
with prospective economic advantage, the plaintiff must prove, 1, a
reasonable expectation of entering into valid business relationships;
2, knowledge by the defendant of the plaintiff's expectancy; 3,
purposeful interference by defendant that prevented plaintiff's
legitimate expectation to mpen; and, fourth, damages.
I think it is -- although it didn’t talk about tortious interference
with economic advantage -- it could be reasonably said that the
elements there would probably be three or four, that there was a
business relationship, that the plaintiff knew of it, that the interfer-
ence prevented the continuation of that, or something to that effect,
and that damages flow from it. That would be my -— it didn’t talk
about that, but generally that’s what it would be.
I think the issue here before the Court, from the evidence it has
before it on the issue of likelihood of success on both of these
tortious interference counts, is whether or not there was a tortious
interference.
The Court believes that the evidence does establish that there
was a certain level of interference with the conduct of the plaintiffs
business, based upon the evidence.
2la
I think, by the very nature of having the picketers, et cetera,
does have an interfering -- you know, that’s intended. I mean, that
is a part of it.
The question is whether or not, at least in the Court’s mind,
looking from the labor situation, as whether or not the interference
was a lawful interference, whether or not there was anything
wrongful or unlawful about the interference, based on the evidence.
And, again, the Court believes it is not looking into whether or
not there was some kind of a labor violation, but whether or not
there was a violation of some kind of some right that the State
courts are here to protect.
There was discussion of this ambulatory picketing, is what it
was called, and to whether or not it must, you know, stop at the
gates of the third parties or can continue down in.
There was some evidence, at least reference to the fact that at
least some of the employers did have some kind of an agreement
that the union could come on or on the property for -- I think the
testimony was “lawful purposes or picketing.”
There is no evidence, other than a couple minor intrusions on
the Geske property, which I don’t believe had anything to do with
picket signs, although there may have been one stuck in the ground
and kicked over.
There is no evidence that the defendants committed any
unlawful trespasses. here is some evidence, like with regard to,
I think, the Lee pit, or something, that they went on, but | don’t
believe the record indicates that it was necessarily a trespass. I don’t
know whether it was or wasn’t
As to the following in the cars, again, without getting into the
fine points of labor, there does not appear to have been any
significant wrong committed.
22a
As to the stopping of traffic on this unnamed but road leading
down to Geske -- maybe somebody did give it a name, I don’t know
-- but the road that goes to the conservation district, it goes to the
Geske plant, goes to the Melahn property, and whatever else is on
there, the evidence as to any illegal interference I don’t think is
particularly strong.
Again, there was no evidence of threats of violence; there was
some conversation, but the Court further does not believe that the
plaintiff has established that it has likelihood of success on the
merits on either of these tortious interference matters.
And the Court would also -- because I know counsel always
have an eye from going somewhere else -- would comment that, in
something that the Lowe Court referred to, is the question of the
applicability of the Anti-Injunction Act.
The Court has reviewed the terms of the Anti-Injunction Act,
and considering the statute, considering the evidence that has been
presented before the Court at this time, the Court does not believe
that the plaintiff has persuaded the Court that, under the facts and
circumstances of this case, that the Anti-Injunction Act is inappli-
cable; therefore, I find it to be applicable under the facts and the
circumstances of this case, and that is a further reason why I am
denying the preliminary injunction.
MR. PIERSON: Thank you, your Honor?
MR. SMETANA: Thank you.
THE COURT: Now, you had asked me to defer until I termi-
nated this proceeding on your request to file a third amended
complaint. I will take that up at this point, if you wish it.
MR. LE SUEUR: We would renew that motion for leave to file,
your Honor.
23a
THE COURT: That motion is renewed. Any comment at this
time from the defendants?
MR. PIERSON: I guess the only comment would be, your
Honor, that we would oppose it on the ground that we would believe
that it would not -- or that it might call into question the decision
you just made, and that it would be a tragedy if we had to just then
go through the entire thing again, because of a change in parties or
some additional facts that they have alleged, you know, that
somehow changed circumstances.
THE COURT: Response?
MR. SMETANA: Briefly, in response, I believe we had stated
that it was not our intent to seek preliminary injunctive relief at this
time with respect to those other matters, and certainly the Court’s
decision here on the preliminary injunctive relief would certainly
substantially chill any likelihood of proceeding in that fashion
certainly at this time.
But I think we would nevertheless like to proceed for perma-
nent injunctive relief on damages, and possibly find other authorities
to convince the Court to reconsider its decision based on the VeeSee
case and so forth, what the standards are with respect to trade libel
in the State.
THE COURT: I believe the plaintiff has the nght, whether it be
in this proceeding or another proceeding, to bring additional claims.
To the extent that the Court has ruled on the preliminary
injunction at this time, I certainly have no intention of revisiting that
matter.
But there are additional people, there are additional counts,
there are additional allegations at different times, and I would
therefore at this time give the plaintiff leave to file the third verified
complaint, amended, or whatever it is, with summons to issue
against additional parties defendant.
MR. LE SUEUR: Thank you, Judge.
MR. SMETANA: Thank you.
MR. PIERSON: Your Honor, if I may raise a question about
how to style the order.
Is it adequate to simply refer to “For the reasons stated in open
court, defendant’s motion for directed finding is granted and
preliminary motion denied”?
MR. SMETANA: We could have a certified copy of the Court
Reporter statement, your Honor, if that’s as set forth in the opinion
of the Court.
THE COURT: That’s fine with me.
MR. PIERSON: Do you want a written order, though?
THE COURT: There should be a written order just stating it
was denied, and then you want to refer to the transcript or whatever,
however you want to do it; but there should be a written order.
MR. PIERSON: Very good. Thank you, your Honor.
MR. SMETANA: I want to thank the Court very much for its
time and patience. It was most generous, as I said before.
MR. LE SUEUR: Thank you, Judge.
MR. PIERSON: Thank you, your Honor.
MS. FARR: Thank you, your Honor.
(WHICH were all the proceedings had in _ the
above-entitled matter, at the time and place aforesaid.)
25a
ILLINOIS SUPREME COURT
JULEANN HORNYAK, CLERK
SUPREME COURT BUILDING
SPRINGFIELD, ILL. 62706
June 3, 1993
Mr. Gerard C. Smetana
Law Offices of Gerard C. Smetana
333 W. Wacker Dr., S#470
Chicago, IL 60606
No. 75020 - Geske & Sons, Inc., petitioner, v. International Union
of Operating Engineers, Local 150 et al., respondents.
Leave to appeal, Appellate Court, Second District.
The Supreme Court today DENIED the petition for appeal as
a matter of right or leave to appeal in the above entitled cause.
The mandate of this Court will issue to the Appellate Court on
June 25, 1993.
26a
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
GESKE & SONS, INC., )
) DOCKET NO. 91 C 5659
Plaintiff, )
)
Vv. )
)
INTERNATIONAL UNION )
OF OPERATING ENGINEERS, )
et al., ) CHICAGO, ILLINOIS
; ) September 11, 1991
Defendants. ) 9:00 o’clock a.m.
TRANSCRIPT OF PROCEEDINGS
BEFORE THE HONORABLE HARRY D. LEINENWEBER
APPEARANCES:
FOR THE PLAINTIFF: Mr. GERARD C. SMETANA
(Richman, Lawrence, Mann,
Greene & Smetana
333 West Wacker Drive
Chicago, Illinois 60606)
FOR THE DEFENDANTS: MR. DALE D. PIERSON
(Baum & Sigman, Ltd.
200 West Adams Street
Chicago, Illinois 60606)
MR. MARTIN BARR
(Carmell, Charone, Widmer
Mathews & Moss
225 West Washington Street
Chicago, Illinois 60606)
27a
THE CLERK : 91 C 5659, Geske & Sons vs. International
Union.
MR. PIERSON: Good morning, your Honor. Dale Pierson on
behalf of Local 150 of the Operating Engineers.
MR. BARR: Good morning, your Honor. Martin Barr on
behalf of the defendant, Local 301.
MR. SMETANA: Good morning, your Honor. Gerard Smetana
for the plaintiff, Geske & Sons.
THE COURT: On the motion to remand.
Plaintiff filed a three count complaint in state court arising
out of a labor dispute with the defendant unions. Plaintiff is
non-union and apparently wants to remain so. The defendants are
picketing plaintiff to coerce it into entering into a collective
bargaining agreement. The complaint alleges that defendants are
untruthfully informing the public and plaintiff's customers that its
employees are on strike, that it is out of business, and that its
competitors are cheaper. It also alleges that the defendants are
threatening its employees and customers with bodily harm and
property damage. As a result some of plaintiff's customers have
stopped doing business with plaintiff.
The complaint as originally drafted also make allegations in
Paragraph 18 that defendants are carrying out a secondary boycott.
The prayer of each count of the complaint, however, remains true to
the count’s characterization. The three counts are characterized a
trade libel, tortious interference, contractual relations and tortious
interference with prospective advantage, all of which are cause of
actions available under Illinois common law.
The defendants removed the case to this court on the basis of
federal question jurisdiction. The plaintiff has filed a motion to
remand for lack of jurisdiction.
28a
The Supreme Court in Caterpillar, Inc. vs. Williams, 107 S.Ct
2425 (1987), set forth the principles governing removal jurisdiction.
"The presence or absence of federal question jurisdiction exists
only when a federal question is presented on the face of the
plaintiff's properly pleaded complaint. (Citation omitted). The
rule makes the plaintiff the master of the claim; he or she may
avoid federal jurisdiction by exclusive reliance on state law."
Here the plaintiff has pleaded three state common law claims and
has avoided praying for any relief based on any federal statute.
The defendants, however, contend that plaintiff in Paragraph 18
has in fact pleaded a claim of secondary boycott which is prohibited
by Section 303 of the LMRA. Assuming the paragraph contains
sufficient allegations to state such a claim, it is clearly unnecessary
for the plaintiff's common law claims and can be disregarded under
Illinois law as surplusage. 30 ILP, “Pleading”, Section 13. In any
event, what defendants are raising is a defense to plaintiffs three
claims, that is, that because of the peculiar facts of this case
plaintiff's claims are preempted by the LMRA. However, Caterpillar
answers this objection:
"Ordinarily federal preemption is raised as a defense to the
allegations in a plaintiff's complaint. Before 1887 a federal
defense such as preemption could provide a basis for removal,
but in that year Congress amended the removal statute. We
interpret that amendment to authorize removal only where
original federal jurisdiction exists. Thus, it is now settled law
that a case may not be removed to federal court on the basis of
a federal defense, including the defense of preemption.”
Thus, defendants may be correct that plaintiff will prove a claim that
is preempted by federal law. The defendants may also be correct
that plaintiff may not even state a claim under state law. If so, the
State court can dismiss the complaint either because of preemption
or for failure to state a claim. In fact, the two Supreme Court cases
relied on by defendants, Sears, Roebuck and Company vs. San
29a
Diego, 98 S.Ct. 1745 (1978) and Amalgamated vs. Lockndge, 91
S.Ct. 1909 (1971) were both appeals of state court rulings on
preemption.
There are two exceptions to the well-pleaded complaint rule, the
“complete preemption” doctrine (Caterpillar, at Page 2430) and its
corollary, the “artful pleading” doctrine. (See Lingle vs. Norge
Division of Magic Chef, Inc., 823 F.2d 1031 (7th Cir. 1987)
reversed on other grounds, 108 S.Ct. 1877 (1988). These two
doctrines have been applied primarily to Section 301 claims to
enforce collective bargaining agreements and claims under ERISA.
(See Caterpillar, at Page 2430 and Metropolitan Life Insurance Co.,
107 S.Ct. 1542 (1987), neither of which is implicated here. No one
contends, as with ERISA, that Section 303 sought to preempt the
entire labor-related tort field. (See Metropolitan, at Page 1547 and
Lowe Excavating vs. Local No. 150, 129 Ill. Dec. 300, 2nd Dist.
1989).
In conclusion, because plaintiff's complaint does not on it face
contain a federal claim, It is not subject to removal here.
Accordingly, plaintiffs motion is granted and the cause is
remanded to state court.
MR. SMETANA: Could we get a copy of that order, Your
Honor?
THE COURT: Pardon?
MR. SMETANA: Could we get a copy of that order to take to
State court?
THE COURT: You will have to order it from the court reporter.
MR. SMETANA: Could we get a Xerox of your copy, perhaps?
THE COURT: No. You will have to talk to Mr. Cheek.
30a
MR. SMETANA: We will talk to the reporter. Thank you, your
Honor.
(Which were all the proceedings had in the above-entitled cause.)
I CERTIFY THAT THE FOREGOING IS A CORRECT TRAN-
SCRIPT FROM THE RECORD OF PROCEEDINGS IN THE
ABOVE-ENTITLED MATTER.
/s/ James W. Cheek 10-23-91
Official Court Reporter Date
Minute Order Form (rev. 12/90)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
Case Number 91 C 5659 Date SEP 11, 1991
DOCKET ENTRY Plaintiff's motion for remand is granted.
Cause remanded to State Court.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.