Opposition Brief — Santa Cruz Co. v. Labor Board

6

164-117). Judge Haney concurred in a separate

opinion (R. 117-121), and Judge Wilbur dissented

(R. 121-137). A decree of enforcement was en-

tered on July 31, 1937 (R. 138-141).

ARGUMENT

The holding of the court below that the National —

Labor Relations Act may validly be applied to the

kind of business in which the petitioner is engaged

is in accordance with the principles approved by .

this Court at the last term. National Labor Rela-

tions Board v. Jones & Laughlin Steel Corp., 301

U. 8.1; National Labor Relations Board v. Frue-

hauf Trailer Co., 301 U. 8. 49; National Labor Re-

lations Board v. Friedman-Harry Marks Clothing

Co., 301 U. 8. 58.

The test of jurisdiction laid down in the Jones

& Laughlin case is whether ‘‘stoppage of * * *

operations by industrial strife’’ would result in

substantial interruption to the flow of interstate

commerce. 301 U. S. at 44. Where such inter-

ruption would occur, the Court pointed out, unfair

labor practices on the partof employers, shown by

long experience to be ‘‘prolific causes of strife,’’

have a “‘close and intimate relation’’ to interstate

commerce and are subject to federal regulation

*The order was modified to exclude application to the

Seabright plant because the relation of that plant’s opera-

tions to interstate commerce had not been established of

record (R. 107, 116-117).

7

under this Act. 301 U.S. at 42,43. In the Frue-

hauf and Friedman-Harry Marks decisions the

Court, applying this principle, found the Act ap-

plicable not only to a vast, integrated enterprise

such as the Jones & Laughlin Steel Corporation,

but to smaller enterprises which were substantially

dependent upon the movement of goods in the chan-

nels of interstate commerce. This rule has been

uniformly followed, and the Act has been uni-

formly applied to such manufacturing enterprises

by the various Circuit Courts of Appeals in pro-

ceedings to enforce or review orders of the Board.

Jeffery-DeWitt Insulator Co. v. National Labor

Relations Board, 91 F. (2d) 134 (C. C. A. 4th),

certiorari denied, October Term 1937, No. 368;

National Labor Relations Board v. Bell Oil & Gas

Co., 91 F. (2d) 509 (C. C. A. 5th); Renown Stove

Co. v. National Labor Relations Board, 90 F. (2d)

1017 (C. C. A. 6th).’

Petitioner is one of the four or five largest

cannery concerns in the State of California (R.

60, 692, 694), the center of one of the most im-

portant industries in the western United States

*See also the following decisions in injunction suits:

Bowen et al. v. Jamea Vernor Co., 89 F. (2d)°968 (C. C. A.

6th) ; Pratt et al. v. Oberman & Co., 89 F. (2d) 286 (C. C. A.

8th) ; Beman et al. v. lowa Mfg. Co., 9 F. (2d4 249 (C.

A. 8th); Wilson & Co. v. Gates et al., 9 F. (2d) 247 (C.

A. 8th) ; General Motors Corp. v. Bajork et al., 9 F. (2d)

90

248 (C. C. A. 8th) ; Lyons et al. v. Eagle-Picher Lead Co.,

F, (2d) 321 (C. C. A. 10th).

C.

C.

4

8

(Bd. Exhs. 15, 24, 28, 34). It is located in the San

Francisco Bay area, the greatest shipping center

in the United States for canned fruit and vege-

tables (Bd. Exhs. 25, 35). Petitioner employs at

times as many as 1200 to 1500 men (R. 656). In

1935 it packed a total of some 1,700,000 cases of

canned goods (R. 60, 407), and shipped an average

of 3,000 to 4,000 cases daily (R. 61, 219), a very sub-

stantial proportion of which were destined for

points outside of the State and the continental

United States (R. 60-61, 407-409, 658, 663-664, 687,

688; Bd. Exh. 16). It is apparent that petitioner

is substantially dependent on the channels of inter-

state and foreign commerce for the economic suc-

cess of its enterprise; that its business, and the in-

dustry of which it is a part, are of more than local

concern ; and that labor strife at petitioner’s plant

would directly and substantially burden and ob-

struct interstate and foreign commerce, as actual

experience demonstrated (R. 75-76, 185-188, 194-

196, 233, 419-424, 438, 443, 506). Cf. Virginian Ry.

Co. v. System Federation No. 40,300 U.S. 515, 556.*

The validity of the Act’s application here is there- -

fore clearly sustained by the principles laid down

in the Jones & Laughlin case and other cases de-

eided under this Act at the last term.

*In this connection the particular terms of petitioner’s

sales contracts, and the point at which title passes, is im-

material. Cf. National Labor Relations Board v. Fried-

man-Harry Marks Clothing Co., 301 U. S. at 72; Pennayl-

vania R. R.v. Clark Brothers Coal Co., 238 U.S. 456, 468.

Oo eee Re ORR S Hr rg ORE er ree ne oe Oe a

9

Respondent seeks to distinguish these precedents -

on the grounds (1) that the fruit and vegetables

which petitioner packs and thereafter causes to be

shipped in the channels of interstate commerce are

grown in the State of California; and (2) that the

quantity of petitioner’s pack so shipped, while sub-

stantial, is less than 50 per cent of the: total.

Neither distinction is tenable.

(1)

The validity of the Act’s application is unaf-

fected by the fact that ‘‘the bulk’’’ of the fruits

and vegetables canned and shipped by petitioner

are grown in the State of California, where peti-

tioner’s plant is.located. In the Jones & Laughlin

case the Court expressly stated that its decision

did not turn on the conception that the manu-

facturing process was carried on in a “‘stream’’

or ‘‘flow’’, of commerce, wherein the raw ma-

terials arriving from without the State came to rest

temporarily at the plant and later went forward

again in interstate commerce. 301 U. S. at 36.

The Court gave ‘‘full weight”’ to the argument that

the ‘‘stream of commerce’’ was broken by the steel

company’s manufacturing operations at Aliquippa.

301 U. S. at 41. The Court expressly stated that

congressional power is not limited to transactions

which can be deemed to be an essential part of such

- ®The hominy packed by petitioner is received from with-

out the State (R. 689-690).

10

a ‘‘flow,”’ that ‘‘burdens and obstructions may be ©

due to injurious action springing from other

sources,”’ and that the commerce power ‘‘was ple-

nary and may be exerted to protect interstate com-

merce ‘no matter what the source’ of the dangers

which threaten it.’ ’’ 301 U.S. at 36, 37. :

Certainly the danger to interstate commerce

from labor disputes in a cannery shipping its prod-

ucts in interstate commerce is not diminished by

_the fact that the cannery is located in the State in

which the products are grown. The underlying

basis of the statute is as applicable and the danger

it is designed to meet is as compelling here as in the

case of the Friedman-Harry Marks Clothing Com-

pany, the Fruehauf Trailer Company, or other

businesses of that general character.

The decision in Carter v. Carter’Coal Co., 298

U. S. 238, was deemed “‘not controlling”’ in the

Jones & Laughlin case, not because the bituminous

coal there involved originated in the state of ‘*‘ pro-

duction,’’ but because ‘‘the provisions of the stat-

ute relating to production were invalid upon sev-

eral grounds,—that there was improper delegation

of legislative power, and that the requirements not

only went beyond any sustainable measure of pro-

tection of interstate commerce but were also incon-

sistent with due process.’’ 301 U. 8S. at 41; see

also at 39-40. The distinction was not founded on

11

the type of business subject to. regulation. Cf.

Virginian Ry. Co. v. System Federation No. 40,

300 U. 8. at 557.

To accept petitioner’s view in such cases would

be to deny Congressional authority on the basis of

a rule of thumb having no relation to the essential

purposes of the commerce clause as here applied.

The result would be that virtually all enterprises

engaged in the recovery of the nation’s basic nat-

ural resources, such as lumber, petroleum, metals

and coal, as well as the produce canning and pack-

ing industry. here involved, would be exeluded from

the operation of the Act. In all of these industries,

labor disputes would substantially and directly

impede interstate commerce and be of national con-

cern. To adopt petitioner’s argument would be, as

this Court said in the Jones & Laughlin case, “‘to

shut our eyes to the plainest facts of our national

life.’”’ 301 U.S. at 41.

(2)

Petitioner’s second argument—that the Act may

not be applied because the portion of petitioner’s

product shipped in interstate and foreign com-

merce is less than 50 per cent of the whole—is like-

wise without merit. Of a total 1935 pack of ap-

proximately 1,700,000 cases, about 627,000 cases of

petitioner’s product were shipped to other states

12

and foreign countries, in the regular course of

‘business. Petitioner’s interstate and foreign com-

merce is very substantial intrinsically, and is also

a very substantial proportion of the total. If peti-

tioner’s employees packed only the 627,000 cases

shipped in interstate commerce or foreign com-

merce, there could be no question that ‘‘a stoppage

of operations by industrial strife’’ at petitioner’s

plant would substantially interrupt the flow of in-

terstate commerce. The fact that the same em-

ployees also pack cases destined for intrastate con-

sumption does not make the effect of a stoppage

upon interstate shipments any the less substantial

or direct. It is obvious that no regulation can be

- imposed protecting the interstate shipments which

will not apply to the employees engaged in packing

all the products of the plant.

Under such circumstances, where the Federal

power can not be exercised to protect interstate

commerce without at the same time covering intra-

state transactions inseparable from the interstate,

it may be applied to the whole. Shreveport Case,

234 U. S. 342; Minnesota Rate Cases, 230 U. S. 352,

* This comprised 37 per cent of the total pack and about

42 per cent of the amount actually sold and shipped in 1935,

(Supra, p: 4.) About 79 per cent of the 1935 pack was

actually billed to customers having their principal offices

outside the State of California (R. 407-409). The discrep-

ancy arises because from 40 to 50 per cent of petitioner’s

product is sold to Stokely Brothers, an Indiana corporation,

of which all but five or ten per cent is shipped locally at the

Stokely Corporation’s direction (R. 655, 658).

OE LI REAL AGES DET. OL LE WOE OS Og (Po 1 eer _ ws ‘ — . - SSE oa

tH tee

18

399; Southern Railway Co. v. United States, 222

_U.8. 20. This necessarily follows from the consti-

tutional mandate that “‘this Constitution and the

laws of the United States * * * made in pur-

suance thereof * * * shall be the supreme law

of the land.’’ Petitioner’s contention, and the

argument of Judge Wilbur, dissenting in the Cir-

cuit Court of Appeals (R. 132), would result in the

disappearance of Federal power and the supremacy

of state power over transactions directly and sub-

stantially affecting interstate commerce whenever

they were inseparably intermingled with a slightly

larger quantity of intrastate transactions. Such a

doctrine is inconsistent both with the express lan-

guage of the Constitution and with principles re-

peatedly recognized by this Court.

Apart from the authorities, petitioner’s argu-

ment would give rise to such problems of adminis-

tration as to call for its rejection on that ground

alone. As the court below said (R. 115):

The suggestion that we should make an

academically arbitrary 50% as the boundary

line between the two jurisdictions ignores

the practical necessities of industry. Shall

it be 50% in volume or price? What hap-

pens when for the first 6 months of the year

60% is exported and 40% is domestic, and

for the rest of the year the percentages are

reversed? Does the Federal control end on

June 30th? On which is the burden of proof,

the state interest or the Federal? How un-

‘fair may be the competition between the in-

PLE ERS Bay BOT, we Pr, a ee -

: 5 ’ Pee 2 ee eee SO OI: Ne eeeey ERAS AGS SS ETRE EY eats, has arent

14

dustry producing the 60% for export under

Federal regulation and its competitor with

40% under state regulation or no regulation

at all!

Industry and business cannot thrive, in

some cases it could not exist, in the uncer-

tainty of such an abstract mathematical so-

| lution of the problem.

Other problems may be suggested by the fact

that 85 per cent or more of the substantial quanti-

ties of peaches, pears, apricots and spinach packed

by petitioner are shipped to customers outside the

State (R. 687-688), whereas items such as tomatoes

and pork and beans are sold locally in large part.

Questions of this character concerning the appli-

cation of the Act are necessarily questions of de-

gree, to be determined on the facts of individual

cases as they arise. National Labor Relations

Board v. Jones & Laughlin Steel Corporation,

301 U. 8. at 32, 37. A doctrine of de minimis

may welf be applicable in this field of law as in

others. Industrial Association v. United States,

268 U. S. 64, 84. But inasmuch as petitioner

is engaged in interstate commerce on a large scale,

that problem is not presented here. It is suff-

cient for the case at hand that this petitioner’s

‘business is well within the ambit of the Federal

commerce power.

15

CONCLUSION

The judgment below is correct and in accord with

the precedents. There is no conflict among the

Circuits.’ The petition should be denied.

Respectfully submitted. :

. / STANLEY REED,

Solicitor General.

V Rosert L. STERN,

Special Assistant to the Attorney General,

«Henry M. Hart, Jr,

] es Attorney.

CHARLES F'any,

( General Counsel.

PHiup LEVY,

Attorney,

National Labor Relations Board.

NovEMBER 1937.

‘The decisions of other Circuit Courts of Appeals are in

accord with the decision below. National Labor Relations

Board v. Bell Oil & Gas Co. 91 F. (2d) 509 (C. C. A. 5th) ;

Lyons et al. v. Eagle-Picher Lead Mining Co., 90 F. (2d)

321 (C. C. A. 10th).

©, S. GOVERNBERT PRINTING OFFICE: 1987