Opposition Brief — Myers v. Bethlehem Shipbuilding Corp.

| AUG 11 2997

CHARLES EL MORE @ROPLEY

e CLERK

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Supreme Court nf. the United States

October Term, 1937 hae.

No. 181

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National Labor Sidlationa ‘Board,

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Petitioners,

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: ) BETHLEHEM SHIPBUILDING CORPORATION,

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a _ Respondent.

BRIEF ON BEHALF OF THE RESPONDENT

oIN OPPOSITION TO PETITION FOR -

2 WRIT sal CERTIORARI tae

mnie

A. HOWARD MYERS et dk, Individually and as the

4 JOHN L. HALL,

j. CLAUDE R. BRANCH,

Hoyt A. Moore,

/ E. Fontainf Broun, se

Of Counsel.

~ August 11, 1937.

Solicitors for the Respondent.

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‘TABLE OF CONTENTS =>

, PAGE

Opinions :Below ...... see eeeeee eae cies eeeun 1

Jurisdiction ......... CP MER My nino se 3%

-Question Presented ...... atau ssachesaunedwiis cc SEL

Statute and Regulations Involved ’................ 3

Statement OO SENT: PEPER Res: 3

Argument ec ope ere (eeenas tehansvens Pe 13.

‘ I. A Preliminary Injunction Should Not Be Dis-—

turbed on Appeal Except for Improvident Allow-

ance, Violation of the Rules of Equity or Abuse of

Discretion ..,......seeeeeeecceceeseceececs 13

II. The District Court Did Not Act Improvidently, ©

Violate any Rule of Equity or Abuse Its Discre-

tion oe ec eee e cece ence cence cece eee teeeeeees 13°.

1. The District Court Did Not Act Improvidently

or Abuse ee SS Pia sce oes oe eee is .

_2.The Labor Board Has No. Jurisdiction Over —

Relations Betweeg the Shipbuilding Corporation

Se Tie TG ok donk ddceckacancescdss i:

3. The Damage that Would Be Suffered by .the

Shipbuilding ere Is Cognizable in

BQUY .cccccccicccccevcccccicveccesecces 18

4. The Remedy Afforded to the Shipbuilding Cor-

poration by the National Labor Relations Act .

Is Entirely Inadequate trisiueawasecanesee 19

. TIL. Conclusion ....... sear nee fe seeecccees ieegak 22

te ee | ae “?

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TABLE OF CASES CITED

_PAGE

Adair v. United ‘States, 208 U. S. 161 (1903) . nate: 17, 18

Boyce v. Grundy, 3 Peters 210 (1830)......... wax ae

‘Carter v. Carter Coal Co., 298 U. S. 238 (1936)... 16

City Bank Farmers Trust Co. v. Schnader, 291 U. S.

24 (1934): ..... Vee hecka WER RERED ESM Re aor 19

Coppage v. Kansas, 236 U. S. 1.(1915).......... 17,18 |

Crowell v. Benson, 285 U. S. 22 (1932), . 6... eee ees rs a

Davis v. Wakelee, 156 U. S. 680 (1895): Sascha ae ae

Dawson v. Kentucky Distilleries Co., 255°U. S. 288 |

Cee ccd ava cates wawekeeedeuces Hp Daksa 21.

Euclid v. Ambler Realty Co., 272 U. S. 365 (1926) °.. |

Ex Parte Young,. me U.S. 128. CIB) 6 a sccin sss ae

oo v. Whitney, 240 Fed. 819 (D. C. W.-D. |

ee Pe ee.) rere rer rere rere. er 20

Hammer v. Dagenhart, 247 U.S. 251 (1918) ens os Oa

Hitchman Coal & Coke C company’ v. Mitchell, 245 U.S." | -

ee St. 2 errr ret ere veedens .17, 18, 19, 20

Kilbourn v. Sunderland, 130 U. S. 505: (1889) igians | ee

MacKenzie, et al. v. M yers, et al. (No. 182 on petition

for writ of certiorari to this Court) .. Oe re ree 4

' National Labor Relations Board v. Friedman-Harry

Marks Clothing C@, Inc. (Nos. 422 and 423, Octo-

ber Term, 1936), 57 Sup. Ct. 645...... Sere 2,.17, 18

National Labor Relations Board v. Jones & Laughlin

Steel Corporation (No. 419, October Term, 1936),

57 Sup. Ct. 615... .-. (esti ibnds dk ae oe

National Labor Relations Board v. Fruehauf Trailer

Co. (Nos. 420 and 421, October Term, 1936), 57

SR GE es é has re eee ceekeaeae 2, 44,18

a

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Ohié Oil Co, v. Conway, 279 VU. S. 813 (1929) .. ne ame

Pennsylvania ve West Virginia, 262 U. S. 553 (1923)

Pierce v. Society of Sisters, 268 U.S. 510°(1925) .... 9

Prendergast v. New York oe Company, 262

1. S48 CHRD) cos cicnnae Lineed Ad SCAR AN KO 13

: Rogers v. Hill, 289 U. S. 582 (1933) .......000. ac a

Schechter Corporation v. United 5 tates, 295 U. S. 495

OS LAE ELROD ED 016

Terrace v. Thompson, 263 U. S. 197 (1923) Ch eaceina 19

The Associated Press -v. National Labor Relations

_ Board (No. 365, Gctober Term, 1936), 57 Sup. Ct...

ME OPER Cee CARR LEA ..2, 16, 17, 18

The Virginian Railway Company.y. System Federa-

_ tion No. 40, etc., 300.U. S. ge eee eee 17, 18

Truax v. Raich, 239 OD. Oe CUES) ob oeicc ee ves 19

Union Pacific R.R. Co. v. Weld County, 247 U. S. 282 .

| eee CEE Orr ee re, Cor etry en er eer ee 20

Walla Walla v. Walla Walla Wate €o., 172 U.S. 1

re rere tare pare oer ane ere Tee 19, 20

Wallace v. Hines, 253 U. S. 66 (1920)..... oreeey se 21

Washington, Virgma & M aryland Coach Co. v.

. _ National Labor Relations Beard (No. 469, October ay

: ‘Term, 1906), 57 Sep. Ct. G66... 25... 5 00.0 2, 17, 18

Watson v. Sutherland, 5 Wall. 74 (1866) .......... 19

TABLE OF STATUTES CITED

Judicial Code, Section 240(a) .....:6+..esececeees i

National Labor Relations Adt ........... penta ae

. Public Resolution No. 44—73rd Congress .......... 7

4

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a NS ae aa an ee

Supreme Court of the United States

“October Term, 1937

.- No. 181

A. Howarp Myers et al., Individually and as

the National Labor Relations Board,

Petitioners,

v.

BETHLEHEM SHIPBUILDING: CORPORATION,

| Ltp.,

Respondent.

BRIEF ON BEHALF OF THE RESPONDENT

IN OPPOSITION TO PETITION FOR

WRIT OF CERTIORARI

OPINIONS BELOW

The. memorandum of the District Court for the Dis-

_ trict of Massachusetts upon the granting of the preliminary

injunction (R., p. 117) is unreported. The opinion of the

District Court upon the motion of the petitioners to dismiss

the bill of complaint, which, as petitioners state, is not —

involved in this appeal, is reported ‘in 15 F. Supp. 915. The

opinion in the Circuit Court of Appeals for the First Cir-

cuit (R., p. 229) with respect to which certiorari is sought

-is reported in 88 F. (2d) 154 and the opinion of said Court

(hereinafter called the Court of Appeals) denying the

motion of ‘the petitioners for leave to file a second petition |

for rehearing (R., p. 242)ghas not yet been reported.

oe _ * JURISDICTION

‘. + The decree of the Court of Appeals was entered Feb-

ruary 12, 1937 (R., p. 232). + A petition for rehearing (R.,:.

p. 232) was denied by the.Court of Appeals on April 5,

1937 ‘(R., p. 236), and ¢eave to file the above-mentioned

second petition for rehearing (R., p. 236), made after the.

decisions of this Court rendered April 12, 1937, in the five

cases* involving the National Labor Relations Act (here |

inafter called the Actf), was denied on May 13, 1937 x |

p. 243). fiirisdiction. of this Court is invoked by the peti-

_tioners under Section 240(a) of the Judicial Code’ as

- amended by the Act of February 13, = **

ae QUESTION peeietren °

‘The question involved: in this-suit on the petition for

certiorari now before ‘this Court is whether thé “District

Court abused its discretion or violated any rule of equity

in granting the preliminary injunction against the holding

*The Associated Press v. National Labor Relations Board, (No.

365, October Term, 1936) ; 57 Sup. Ct. 650; National Labor Rela-

. _ tions Board v. Jones & Laughlin Steel Corporation, (No. 419, Octo-

~ ber Term, 1936) ; 57 Sup. Ct. 615; National Labor Relations Board

; Vv. Fruehauf Trailer. Co., PUNos. 420, and 421, October Term, 1936) ;

‘ 57 Sup. Ct. 642; National Labor Relations Board v. Friedman-Harry

| Marks Clothing a Inc., (Nos. 422 and 423, October Term, 1936).;

57 Sup. Ct. 645; W, ashington, Virginia and "Maryland Coach Com-

pany Vv. National Labor Relations Board, (No. - , October Term,

- 1936) ;.57 Sup. Ct. 648.

fJuly 5, 1935, c..372, 49 Stat. 449,29 U. S.. <. ‘sg151- 166, incl. -,

**Mar. 3, 1891, c. 517;.86, 26 Stat. 828; Mar. 3; 1911, \c. 231, §240,

) 3470). 1157; Feb. sa 1925, ce. 229, §1, ‘43 Stat. 938 ; 28 eal S.C.

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by the petitioners of a hearing (hereinafter called the

‘scheduled hearing) for the purpose of determining whether

or not the respondent, Bethlehem Shipbuilding Corpora- -

tion, Ltd. (hereinafter called the Shipbuilding Corpora-

tion), has engaged at its Fore River Plant in any s0-

Pane “unfair labor practices” under the Act. “4

STATUTE AND REGULATIONS INVOLVED

The Act involved is the National Labor Relations Act .

> which appears in-the record (pp. 17-27 of the pamphlet

- following R., p. 214). The Rules and Regulations of the

~ et Labor Relations Board (hereinafter called the

r Board) which are applicable likewise appear in the

~ record as’ Exhibit A-2 to the bill of complaint (R., pp.

ie 35-36). oa

STATEMENT .

In accordance with the provisions of Rule 27 of the

Rules of this Court, we set forth the following corrections

‘of and-additions to the statement contained in the petition

for certiorari:

The Shipbuilding Conporsiion instituted this suit by

filing its bill of complaint in equity for an injunction (and

petitiqn for a declaratory judgment) against the holding

by the. petitioners of the scheduled hearing. The petitioner .—

Lyons, who had been designated to act as Trial Examiner

- for the! Labor Board, was personally served with process

. within the jurisdiction of the District Court,* as were also

- the other petitioners, Myers and Blake (R., p. 60).

*The statement to the contrary in the petition (p. 5) is incorrect:

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This suit was heard i in the District Court gn the sworn |

bill of complaint and affidavits including those filed by vari- .

ous officials and employees of the Shipbuilding Corporation. |

It was stipulated in the District Court that the afhdavits |

filed in the suit of MacKenzie, et al. v. Myers, et al. (No.

182 on petition for writ of certiorari to this Court) brought

_ by employees of the Shipbuilding Corporation against

the petitioners and heard with this suit in the District

‘ Court might also be considered in this suit (R., p. 112),

In; the bill of complaint the Shipbuilding Corporation

set forth in full the facts regarding the business conducted

* by it at the plant at which the-Labor Board alleges that the

_ Shipbuilding Corporation has been engaged in unfair labor

practices (hereinafter called the Fore River Plant) and

set forth the pertinent facts regarding its relations with _

its employees ‘there. The Fore River Fiant is the only

plant involved in this suit. |

The District Court on the granting of the{ preliminary

injunction found all of the facts alleged in the bill of com-

plaint (as. distinguished from statements and conclusions

of law) to be true (R. p.:111). |

The Fore River Plant is a complete and independent

manufacturing plant for the designing and building of —

vessels of every type and kind: (Bill, par. 6,-R., p. 5; Aff.

Gould R., pp. 89-90); and the vessels and products built

at the Fore River Plant’ are built entirely on specific con-.

tract (Bill, pars. 7 and 8, pp. 6-7). In designing and

building vessels at said Plant it is necéssary that the Ship-

building Corporation, and the Shipbuilding Corporation

does, fabricate and shape in its shops especially for each —

vessel built all materials used therein and also. builds. for

the most part the boilers and main propelling machinery

for each such vessel; and the finished vessels bear no

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ares Ss the materials used- in building them and

' are of a far greater value than such materials, the cost

of such materials representing less than half of the cost

of building such vessels, the increase in value being due

_ to. the manufacturing, fabricating and building operations

performed by the Shipbuilding Corporation at said Plant

(Bill, par. 8, p. 7; Aff. Gould, R., pp.

These vessels and other products are | all delivered to the

purchasers at the Fore River ran par. 8, R., p. 7).

The bill of complaint alleges #hat neither the transac-

tion of the business of the Shipbuilding Corporation at the

Fore River Plant nor its relations with its employees with

respect ‘thereto constitute interstate commerce ; that they

do not directly burden or obstruct such commerce or the .

free flow thereof ; that they" “do not tend to lead; or lead, to

labor disputes; that they do not burden or obstruct such

commerce, or the free flow thereof, or tend to lead to labor -

disputes burdening or obstructing such commerce or the

free flow thereof; that such transactions do not occur, or

such relations exist, in the course or current of interstate

* commierce, nor are they a part of the operations of instru-

mentalities of such commerce (Bill, par. 22, R., p. 21).

‘The District Court also found to be true all of the

allegations of fact in th¢ bill of complaint filed by em-

ployees in No. 182, which among other things alleges that —

the employees of the. Shipbuilding Corporation at the Fore

River Plant “were engaged wholly in intrastate activities

which did not burden, obstruct or affect interstate com- ©

merce (R.,. pp. 111,219). .

; In March, 1923, the Plan of Employees’ cette.

¢ tion, which is in effect at the Fore River Plant at the present

time as it has been amended from time to. time by ‘the

employees, was adopted. Said Plan (hereinafter called the

ie ; ; * 4 ‘

@ ~_—=s~ Plan) is operated entirely by the employees without any. .

domination, .interference, intimidation or coercion on the |

part of the Shipbuilding Corporation. Uncontradicted. |

- affidavits both by officials of the Shipbuilding Corporation

and: by employees at the Foré River Plant, who are in a.

‘ position to know, demonstrate the fact that the Shipbuild-

‘ing Corporation -has not ‘dominateg or ‘interfered with its

; employees in any way at any “time up to the time of the

hearing i in this suit . (Bill; pars. 20-21, Re, pp. 19-20; Aff.

| Wakeman, R., pp. 107-108; eerogesnay R., pp. 108, 167-

168; McDermott, R., pp. 108, 174-175). :

: Prior to March, 1923, when the Plan was adopted at.

the Fore River Plant, labor conditions had been bad. Par-

f ticularly during the years from: the period of the ‘World

“s War until.the Plan went into effect there were intermittent

labor disputes and frequent strikes and walkouts. by groups

of employees iff various sections and departments of the

Fore River Plant, with the result that the effigency of the-

employees there was impaired and thereby operations were

interfered with and in general conditions were unsettled”

: and operations impeded and.'the existence of -pleasant and |

harmonious relations between the ‘Shipbuilding Corpora-

tion and its employees was prevented’ (Aff. Gould, R. pp.

90-91; oe R. , PP. 108, 168; McDermott, R., pp.

108, 173). ) ;

’ A very marked change bec place i in the labor condjtions

‘among the employees at the Fore River Plant almost i imme-

diately upon the adoption of the Plan, and, in marked

contrast to the conditions which existed at the Fore River

Plant during the period just esi above,~ there have

been no labor disturbances 6r labor trouble of any nature

__. whatsoever at the F ore River Plant ‘since the adoption of .

, the Plan. All ‘questions concerning rates: of pay, wages,

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hours of employment. and other conditions.of employment

and all grievances and other questions of interest to employ--

ees have been expeditiously and satisfactorily settled from |

time to time through collective bargaining between the -

‘management and the Employees’ Representatives elected »

for the purpose under the Plan by the employees at the

_ Fore River Plant voting in Nominations (primaries) and

Elections by secrét ballot. As a result of the operations of

the Plan since 1923, in almost constantly increasing .

measure, there -havé existed and there now exist at the

Fore River Plant pleasant, friendly and harmonious rela-

| tions between the Shipbuilding Corporation and its employ-

ees (Bill, pars. 15, 19, R., pp: 13, 17; Affs. Gould, R., p: 9;

‘Hannabury,. R., pp. 108, 477-178; Harvey, R., pp. 108, -

171-172). en ke a asta ,

- Such Employees’ Representatives, who are elected for

_ the purpose ‘of representing the employees in collective bar-

: gaining, were elected by the votes of over 96% of the em-

- ployees eligible under the Plan to vote who were at the

- Plant on the day of the Election, and such ‘employees rep-

_ resented practically all of the employees of the Shipbuild-

ing Corporation at the Fore River Plant* (Bill, par. 21,

a) seis Pet |

_ In 1934 and 1935 the predecessor of the ‘Labor Board,

‘in existence under Public; Resolution 44—Z3rd.Congresst

_ (hereinafter called the Old Labor Board) conducted a pro-

ceeding instituted on the complaint of Local No. 5 of the :

| , *The record shows. that 96% or 97% and 97.2%, respectively,

cast good ballots that were counted in March, 1935.and March, 1936, —

respectively (Aff. Barker, R., pp. 108, 179;Supp. Aff. Barker, R.,

p. 110, 188). .The record does not, of coufse, show beyond 1936.

t is a fact, however, that-in March, 1937, 98% of the employees

cast good ballots that were counted. ;

tJune 16, 1933, c. 90, Title I, 48 Stat. 195. , ee

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Industrial Union of Marine and Shipbuilding Workers of

America, the complaining party upon whose charge the

complaint before the Labor Board involved in this suit is

based (Bill, par. 16, R., pp. 13-14; Aff. Collins, R. » pp. 102-

- 103). The proceeding on that complaint and the de-

cision of the Old Labor Board thereon after lengthy hear-

ings (hereinafter called the First Fore River Case) have

an important bearing upon this suit, for in such proceeding

the operation of the Plan then and now in effect at the + Fore

* River Plant and the relations between the ‘Shipbuilding

Corporation and its employees there’ were described at

length by witnesses and were thoroughly considered. The

‘questions which were involved in the First Fore River Case

were fundamentally the same as the main questions in-

volved in this suit (Bill, par. 18, R., p. 16).

On February 13, 1935, or about 4/4 months after the

date of.the first hearing in the First Fore River Case, the

Old Labor Board unanimously decided that the Shipbuild-

ing Corporation was not guilty of the charges made against

it and refused to take the actiori against it which had been

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’ \ requested by Local 5 of the Industrial Union (Bill, par. .

16, R., p. 14).

The out-of-pocket cost to the Shipbuilding Corporation

in connection with the First Fore River Case was in excess

of $15,000, and the hearings in such Case consumed a

total of 2,500 hours of working time of employees, foremen

and*leading men, ‘and also caused the loss of many more

hours in connection with and in preparation for “such hear-

ings. Such hearings, similarly, caused a loss of time of

_* important officials of the Fore River Plafit, particularly the

Vice-President of the Shipbuilding Corporation in charge —

_ of all of its plants and also the General-Manager and As-

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sistant General Manager of the Fore River Plant, who

spent by far the greater part of the month of October, 1934,

in connection with such hearings (Bill, par. 17; R., pp. 14-

16; Aff. Collins, R., pp. 102-104).

. The Shipbuilding Corporation also lla damage

(more serious, in fact, than that ‘above. described ) as a re-

sult of such Case in the disturbance caused to its employees

and. apprehension which they manifested, which resulted

in the lowering of their morale and gave rise to unsettled

conditions among | them. which impaired the efficiency of

the operations of- the Fore River Plant and.impeded opera-

tions there (Aff. Collins R., p. 103: Supp. Aff. a

mott R., pp. 109, 185- 186).

Subsequent to the date of the decision of the First Fore '

River Case and prior to the commencement of this suit, there

- was no change in the operation of the Plan, or in the policy

of the Shipbuilding Corporation, with respect thereto (Bill

par. 18;R., p. 16; Aff. Homer, R., pp. 98-99).

The holding of ‘the scheduled hearing and the tididng

of any further proceedings in connection therewith, re-

gardless of the outcome thereof, will seriously interfere

with the harmonious relations which exist between the

Shipbuilding Corporation and its employees, and will cause |

a lowering of the efficiency of the employees at the Fore —

. River Plant, and will result in great damage which cannot

be-accurately ¢ timated (Bill par. 19; R., pp. 17-19).

These facts are established by affidavits showing that

there had been disseminated among’ the, employees of the-

Shipbuilding Corporation. at the Fore River Plant and

throughout the surrounding: communities much false propa-

ganda, and it is the opinion of the General Manager of the

Plant and of leading representatives of the employees that

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| -. the holding of the scheduled hearing, and the taking of

proceedings in connection therewith, will seriously damage

the friendly, pleasant and harmonious relations between ©

the Shipbuilding | Corporation and its employees, and: will

seriously affect the morale of the employees (Aff. Gould R.,

pp. 92-93; MacKenzie R., pp. 108, 169; maereey R., pp.

108, 172).

. The erder granting the preliminary injunction stated

that it appeared |

“that the issuance of a preliminary injunction is-

necessary to prevent immediate .and irreparable

damage, for the reason that the holding of any

‘hearing for the purpose of determining whether ~

or not the plaintiff [the Shipbuilding Corporation |

has engaged at its Fore River Plant in any so-called

‘unfair labor practices’ under the National Labor

Relations Act; or taking any action with respect .

thereto, would involve expense to the plaintiff which

it could not recover, absence of its officials and em-

ployees from their work, which would interfere with

the operation of the plaintiff’s Fore River Plant,

and disturbance of harmonious relations with its

employees” (R,, p. 113). °

t

Similarly, one of ‘the conclusions of law of the District |

Ac = Court upon the rs of the preliminary injunction was

a that oan

’ “The plaintiff [the Shipbuilding Corgocution| aa

: will suffer irreparable damage of the kinds alleged -

in its bill of complaint if any nee is held” (R., a

aS Semis | oe

Such order pranting the preliminary in junction also stated

that |

| “innmediate, continual ‘and irreparable loss and

_ damage to the plaintiff _ Shipbuilding Corpora-

Wp gone megan em TOR ag CHC ERE TRINE CIRO Soar ‘aiitiittaeaeeemameeain

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i

tion | wil result unless a preliminary hs comanaa is

granted’ ané

that it did not ; appear that the Shipbuilding Corporation. i

had

“a plain, adequate and pene arenes at ea (R.,

p. 113),

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} and one of the conclusions of law was to the same. effect

(Rz, 112).

Furthermore, in its opinion on he motion of the peti-

tioners to dismiss the bill of complaint (which was denied),

which opinion was delivered after the case had been thor-

oughly briefed, the District Court said

“The danger threatened is immediate and great” |

(R., w 123):

The Court of Appeals unanimously affirmed the Dis-

trict Court; and in its-opinion, after quoting the description

of the business of the Shipbuilding pee | in the com-

plaint of ‘the Labor Board, -said

“The employees of such a business are not engaged

in interstate commerce nor in a business within the

esis jurisdiction of the Board and, if not, the Board is

. acting without authority and in violation of law”

AR pp. 231-232). ae os

The Coan of Appeals then went on to say:

“On the somewhat unusual facts in this case, viz.,

_ the long established plant association and the long

established amicable and satisfactory relations be- |

- tween the. plaintiff and its employees fostered by it,

- it might well be held that irreparable injury would

be caused by, an investigation’ calculated to disturb

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those relations and that neither plaintiff [the Ship-

building Corporation and the employee plaintiffs

im No. 182] had an adequate remedy at law. Both

the Shipbuilding Company and its employees have |

‘a right that the established friendly relations be-

tween them shall not be injured without legal justi-

fication. It cannot be said that the District Judge —

erred in finding and ruling that the plaintiffs had

no adequate remedy at law or in finding and hold-

ing that danger of irreparable injury was shown and

that, considering the doubt asgo the Board’s juris-.

diction, the plaintiffs were entitled to preliminary

injunctions” (R., p. 232). |

After that decision of the Court of Appeals this Court

handed down its opinions in the five cases involving the -

Act rendered April 12, 1937, and the. petitioners filed a

motion for leave to file a,second petition for rehearing, a

first petition having already been denied prior to ‘such

decisions of this Court. ‘In denying such motion for leave

to file.the second petition for rehearing the Court of Ap-

peals~gaid :,

_ “Tt.is obvious that the business wane in question

as described in the finding of the District Judge is

very different in character from the ‘far-flung’

enterprises of the Jones & Laughlin Steel Corpora-

tion, or from the essentially interstate businesses

involved in National’ Labor Relations Board v.

Friedman-Harry Marks Clothing Co. and National

Labor Relations Co. [sic.|] v. Fruehauf Trailer Co.

In applying the test laid down in the Jones & Laugh-

lin opinion to individual business organizations some

uncertainty as to which are under federal control

in their relations with their employees and_ which

under state control will at first be unavoidable. When

the question is raised, as in this case, we think it

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devolves on the National Labor ‘stat Board to

show that the business involved is probably within

its jurisdiction. - On the findings of the District .

Judge that fact is not established in the present case.

We think the case should stand for final hearing in ,

the: District Court” vr ours ) (R., p. 243).

ARGUMENT

€

A PRELIMINARY INJUNCTION SHOULD NOT. BE

DISTURBED ON APPEAL EXCEPT FOR IMPROVIDENT

ALLOWANCE, VIOLATION. OF THE RULES OF —

OR ABUSE OF DISCRETION.

| -One of: the principles of law most thoroughly estab-

lished by the decisions of this Court is that the decree of a

District Court granting a preliminary injunction “will not .

be disturbed. on appeal except for improvident allowance,

violation of the rules of equity or abuse of discretion”.

__ Rogers v. Hill, 289 U. S. 582, 587 (1933) ; Prendergast

v. New York Telephone Commjuiny, 262 U. bs 43, 50

(1923).

THE DISTRICT COURT DID NOT ACT IMPROVI-

DENTLY, VIOLATE ANY RULE OF EQUITY OR ABUSE

ITS DISCRETION. ;

1. The District Gourt Did Not Act uc tlee or Abuse

Its Discretion. os :

As pointed out above, ‘the District Court found that

immediate, serious and irreparable damage would result

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unless.a preliminary injunction were granted and.the Court

of Appeals held that it did not err in so finding (see pp.’

10-12, supra). We submit that this Court, following its

usual practice, should not upset the concurrent findings of |

fact of the two lower courts. : .

_ ‘Moreover, the courts below found that no harm could .»

come from: staying the proceedings until'a final hearing

and, consequently, that the balance of convenience favored

the granting of the preliminary injunction* (R., pp. 111,

123). ° | | .

Where there exists ans doubt with respect to

the -constitutionality of the application: of an act to a

plaintiff and where there is likelihood that the application

of such an act to such plaintiff would cause it damage and

injury, and where the remedy purportedly afforded by such

act. is not as timely, ‘plain, adequate or complete as the —

remedy which equity* might afford, the question of whether —

or nota preliminary injunction maintaining the status quo :.

should or should’ not be granted rests in the sound discre-

tion of the District Court. ‘Ohio Oil Co. v. Conway, 279

U. S., 813, 815 (1929). The District Court found, in effect,

that this suit presented just such a situation and, accord-

ingly, granted the preliminary injunction herein which was

affirmedaby the Court of Appeals i in the decision to review :

which certiorari is sought.

Unless the view of ‘the District Court i is entirely with- ©

out’ basis, unless this Court shall find that . the District |

z

As 3 a matter of us if the petitioners had acide in’ the:

District Court ‘instead of taking an appeal to the Court of Appeals, or

even if they had proceeded therein after the decision of the Court of

Appeals, instead of bringing this petition for certiorari, this suit might |

well have been determined en its merits before” now y by the District ¢

Court..

OE NEN ER MES ER EXPIRE GGT CEST STS ne neers Cer eet

—— - == —— Ce

15

Court, or the Court of Appeals in affirming the District

Court, acted arbitrarily and abused its judicial discretion

or violated some rule of equity in granting the preliminary

injunction, or in affirming its issuance, this Court should

deny the petition for certiorari to review the decision of

the Court of Appeals.

_ In this situation it is 6bvious that the court below did

not act improvidently or abuse its discretion, and the only

question is whether it had any jurisdiction in the premises.

We contend that it did have such jurisdiction.

fe 2. The Labor Board Has No Jurisdiction Over Relations ;

_ Between the Shipbuilding Corpetation and Its Em-

ployees.

‘This Court in its recent decisions in the cases involvi ing

_ the Act. expressly recognized the fact that the scope of the

Act and “the grant of authority to the Board does not pur-

- port to extend to the relationship between all industrial

employees and employers” and: that the terms of the Act

“do not impose collective bargaining upon all industry” re-

gardless of. effects, upon interstate or foreign commerce”

and that the Act “purports to reach only what may be

deemed to burden or obstruct that commerce arid, thus

_ qualified, it must be construed as contemplating the exer- -°

cise of control within constitutional bounds”. National

__ Labor Relations Board v. Jones & ee Stott Corpo-

ration, supra.

As pointed out by the Court of Appeals in the above

quoted excerpt from its decision (p. 12, supra) the busiriess ~

of the Shipbuilding Corporation at the Fore River Plant

is very different from the businesses involved in such recent

decisions of this Court.

16

We submit that i in the light of numerous decisions of

this Court, particularly those. in Carter v. Carter Coal

Co., 298 .U. S. 238 (1936), and Schechter Corporation v.

United States, 295.U. S. 495 (1935), the National Labor

Relations Act cannot be applied to the Shipbuilding Cor-

poration at its Fore River “Plant and to, its relations with

its employees there.

The Act is grounded solely upon the power of the Fed-

eral Government to regulate interstate commerce and was

sustained by this Court as having a field of constitutional’

application on that ground. The Associated Press v. Na-

tional Labor. Relations Board, supra; National Labor Rela-

tions Board v. Jones & Laughlin Steel C orporation, supra.

The Act cannot constitutionally be applied to- the Shipbuild-

‘ing Corporation, because the commerce clause of the Fed-.

eral Constitution does not give to Congress the power fo’ .

legislate with respect to any matters which do not constifute ‘

interstate or foreign commerce or directly or intimately

affect such commerce. Schechter Corporation v. United - —

States, supra; Carter v. Carter Coal Co., supra; National

Labor Relations Board v. Jones & Laughlin Steel Corpora-

Mon, supra. As this Court said in the rome & Laughlin

case (at p. 621 of 57 Sup. ch):

“The authority of the federal government may not

¢ be pushed to such ah extreme as to destroy the:

distinction, which.the commerce clause itself estab-.

alishes, between commerce ‘among the-several states’

and*the internal.concerns of a state. That distinc-

tion befween what is National and what is local’ in

the activities of commerce is vital to our federal -

system.”

The ‘outstanding, significant facts bearing upon.. the

jurisdiction of the Labor Board in this suit are om follow-.

-3

17

ing: The siataniih involved herein are ‘engaged solely in

intrastate activities. The Shipbuilding Corporation does not

ship any of its products in intefstate corgmerce, but deliy-

ers all of them to purchasers at the Fore River Plant. The

relations between the Shipbuilding Corporation and its em-

ployees at that Plant do not tend to lead to disputes burden-

ing or obstructing interstate commerce or the’ free flow

thereof.* It is clear that a strike or other labor trouble at

-the Fore River Plant would not direetly affect interstate

commerce and that it would have fio such intimate effect

upon interstate commerce as has been held by this Court to

be necessary in order to give Congress jurisdiction.

* There has been no labur. trouble at the Fore River Plant

for more than thirteen: years and-no tréuble or strike is |

threatened or even suggested.” The employees are ‘satisfied

with the Plan of Employees’ Represeritation now in effect

*Regardless of the impossibility of applying -the Act constitu- -

tionally to the Shipbuilding Corporation and-its relations with its

employees, because of the local nature of its business, the applica-

tion of the provisions of the Act to-the Shipbuilding Corporation

sought to be made by the Labor Board ‘in ‘its complaint involved in

this suit, by destroying the Plan and foreing a change in the now

satisfactory method by which collective bargaining is conducted at

the Fore River Plant, would Violate the. right constitutionally guar-

anteed to -each employer, including the Shipbuilding Corporation, to

contract and bargain freely with his employees, as. well as the right .- °

constitutionally guaranteed to employees, including those of the Ship-

building Corporation, to’contract and bargain freely ‘with their em- -

ployers, which rights are property rights. . Adair v. United States,

208 U. S. 161 (1908) ; Coppage v. Kansas, 236 U. S. 1 (1915);

itchman Coal & Coke ‘Company v. Mitchell, 245 U. S. 229 (1917) ;

Virginian Railway Company v. System Federation No. 40, etc.,

300 UL % 515 (1937 ); The Associated Press v. ‘National Labor

Relations Board, supra; ‘National Labor Relations Board. v. Jones & «

Laughlin Steel Corporation,.supra; Nationa® Labor Relations Board

__v. Fruehauf Trailer -Co., supra; National Labor Relations Board v.. ©

. Friedman-Harry Marks ‘Clothing Co., Inc., supra; Washington, Vir-

' ginta & Maryland Coach ‘Co. N. National Labor ‘Relations Board, .

supe.

as

“at the Fore River Plant and desire to coritinue collective

‘bargaining under it. As ,appears from the bill- filed by -

employees and the findings of the District Court in their

_ suit, the employees believe that the holding of the sched- ‘

uled hearing by the Labor Board would. destroy confidence

_ in the Plan, would upset friendly relations and would lead:

to labor troubles and disputes (R., p. 159). There is,

therefore, no basis for believing that the holding of the -

scheduled hearing would have anything except a bad effect

upon production at the Fore River Plant and the carrying

on of the activities of any - ‘other business that may be

dependent ‘upon such ee:

‘Moreover, this: ‘suit involves the so-called unfair labor

: practice defined in subdivision ' (2 ) of Section 8 of the Act

having to do with. the formation or administration of labor.

organizations, or the contribution of support to them. That

~~ unfair labor practice was’ not involved in any of the five

decisions of this Court under the Act, rendered April 12, .

+. 1937. The application of that unfair labor practice to the

= Shipbuilding Corporation and its gelations with its employ-

ees: which the Labor Board i is attempting to make in the

scheduled. hearing and. in the proceedings in connection

therewith, amounts to an unconstitutional* intrusion in the

now satisfactory relations between the: ‘Shipbuilding Corpo--

_ ration and ‘its’ employees with respect: to the method and

‘manner by which they collectively bargain with : each other.

“3. The Damage that Would Be Suffered on the Shipbuild- ,

: ing Corporation: Is Cognizable i in Equity. ;

The decisions of: me courts clearly establish that the

situation — by the complaint of the Labor Board |

*See cases cited in ‘footnote, p.-17.

19

and the iacae scheduled thereon i is one in which the equity

jurisdiction of the District Court may properly be invoked to.

_ prevent damage whitlr would be incurred by the Shipbuild- .

ing Corporation as a result of the chain of events set in

‘motion by the scheduled hearing. Watson v. ' Sutherland, 5

Wall. 74 (1866) ; Pierce v. Society of Sisters, 268 U. S. 510

(1925) ; Walla. Walla v. Walla Walla Water Co., 172

U. S. 1 (1898); Hitchman Coal & Coke Company v.

. Mitchell, supra (1917) ; Pennsylvania v. West Virginia,

262 U. S. 553, 592, 593 (1923) ; City Bank Farmers Trust

Co. v. Schnader, 291 U. S.-24, 34 (1934). i" |

~ Tt is clear also from the decisions of the courts that the

damage to the Shipbuilding Corporation which would re-

sult from: the holding of the scheduled hearing and the |

taking of proceedings and action in connection therewith is

| irreparable damage and is cognizable as such in equity.

Instances in which this Court has recognized as irrepar-

able damage cognizable in equity interferences with em-

‘ployment relationships fundamentally the same as those

being attempted by the petitioriers and the Labor Board

. herein are Truax v. Raich, 239 U. S. 33 (1915) ; Hammer

v.. Dagenhart, 247 U. S. 251 (1918); Terrace v. Thomp-

- son, 263 U. S. 197, 215, 216 (1923); Euclid v. Ambler

eed Ce., 272 U. S. 365, °386 or hae

4. The Remedy Alended -to the Shipbuilding Corporation,

by the National Labor Relations “Act Is Entirely ce

: Inadequate.

The holding by the petitioners ofa hearing i in the name |

of the Labor Board, and the taking by them of proceedings .

_ in connection therewith, is imminent, and i is only prevented

_ by the existence of the preliminary injunction, and the

20

o

Shipbuilding Corporation has no remedy at law: whatso-

‘evér, or at least there is no remedy at law available to the

Shipbuilding Corporation which is timély, plain, adequate

or complete, to prevent irreparable damage and injury which

it would suffer from the holding of such hearing and the

taking of such proceedings. .

‘Under the Act the control of the proceeding is entirely .

in the hands of the Labor Roard and its agents and’

agencies, until it shall issue a cease and.desist order. It

will be a long time (if ever) before the Shipbuilding.

Corporation can have the opportunity of questioning before *

a court (except in this suit) the jurisdiction of the Labor

Board and the applicability of the Act to the Shipbuilding

Corporation and its relations with its employees. In the

meantime, serious and irreparable i injury will result to the.

Shipbuilding Corporation from the disturbance of the

- harmonious relations which exist between it and.its em-_

.. ployees. Moreover, it may well happen that the Ship--

‘building Corporation will suffer all the attendant incon-

venience, damage and loss resulting from the scheduled

hearing and that the Labor Board will fail to enter any |

order reviewable by a court. The remedy afforded by the

Act is not adequate and the Shipbuilding Corporation is

entitled to the relief granted by the preliminary injunction.

Boyce v. Grundy, 3 Peters 210, 215 (1830); Kilbourn v.

Sunderland, 130 U. S. 505, 514-515 (1889); Walla Walla

v. Walla Walla Water Co., supra; Fredenberg v. Whit-

ney, 240 Fed. 819, 822-823 (D. C. W.-D., Wash. N. D., -

1917). - See ‘also: Davis v. Wakelee, 156 U. S. 680, 688

(1895) ; Ex parte Young, 209 U. S. 123 (1908); Hitch-_ .

man Coal & Coke Co.’ v. Mitchell, supra; Union Pacific

R..R. Co. Vv. Weld ear 247 U. S..282, 287 sis

te os eee

Wallace v. Hines, 253 U. S. 66, 68 (1920); Dawson v.

Kentucky Distilleries Co., 255 U. S. 288, 296° (1920).

We do not understand that the principles laid-down and

applied. in these cases have been rejected in 1 any “ the

later cases cited in the petition. :

Moreover, on an appeal from an order of the Labor’

Board, the Act does not permit independent judicial deter-

mination of the fundamental or jurisdictional facts in-

_. volved. -For that reason, also, the remedy afforded by.

the Act is inadequate. Crowell v.. Benson, 285 U. 2

(1932). Under the Act all findings of fact of the Labor

Board are conclusive upon the Circuit Courts of Appeals

in any proceeding to review any order of the Labor Board,

_ if there should be evidence (even hearsay) to support such

~ finding (§10(b). and (e)). A vitat and fundamental ques-

tion which lies at the very threshold of the proceeding of the

_ Labor Board involved in this suit is whether or not the busi-

néss of the Shipbuilding Corporation and its relations with —

its employees at its Fore River Plant involved in such pro-

"_ ceeding constitute interstate or foreign commerce or directly

affect such commerce or are intimately and closely related

thereto. That is a jurisdictional question and is one which

can only be determined with finality by a constitutional

court upon the basis of a record adduced before it? Any

other procedure would deprive the Shipbuilding ‘Corpora-

tion of its liberty and property without due process of law

and would prevent the courts from exercising their consti-

tutional function. The Act attempts to do_ both, for it

contains no uroyisions | permitting an independent. judicial

determination, of such fact, but it purports, as pointed out

above, to make all findings of fact of the Labor Board con: ~

clusive — the Circuit’ ‘Courts of “Appeals i in pacer

y ~ x = x + F. - 1 «ary ss =) a

von em sree Epi te ar > ‘a few pete tein sete f rare ies EE a in cap perenne poe erm ee =o Z ——— — —

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poor for by the Act, if ada: shall be evidence ona

hearsay) .to support such findings.

Mt.

: _ CONCLUSION.

The petition aad be denied. |

3 | _ Respectfully submitted,

“Peas L. HALL,

CLAUDE R. Baeccs,

Solicitors for the Respondent.

Hoyt A. Moorg, - ~ he joe

E. Fontaine Broun, |

Of Counsel. °

August 11, 1937. : . ) : | | _