Opposition Brief — National Labor Relations Board v. Natural Gas Utility District

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MeBPOUUCTION oases sen casessecsnesssssasscnecscenssensuncensssnessne. hiekahasbosibed pool

1. Answer to “Questions Presented” eiakiien [sepals Bee

fl. Answer to “Statement” ie a

A. The Board’s Findings of Fact | ..............-.. 3

B. The Decisions of the Board and the Court of

Appeals anne ccasessccesesensneenssassneseessnnsnssnsansnssssencsecssseass 8

Ill. Answer to “Reasons for Granting the Writ” 11

A. The Randolph Case and the Case at Bar Deal

with Different Entities 12

B. The Court of Appeals Below Followed the Ran-

dolph Case by a into Account the Econo-

mic Realities i . 16

Conclusion. 20

Case Citations

Bailey v. Carolina Power wise sett 212 N.C. 768, 195

SE. 64 (1938) . 14

Cardillo v. Liberty Mutual Co., 330 US. 469, 423 (1947. ee

First Suburban Water Utility District v. McCanless, 177

Tenn. 128, 146 S.W.2d 948 (1941) 00. 8

Mobile cesnianted Authority, etc., 8 NLRB 1297 (1938)

Si ae 11, 18

National Laie iladlens ai v. : linen ‘Poaie Elec-

tric Membership Corp., 65 NLRB 760 (1946) . 12

National Labor Relations Board v. Hearst Publications,

Be, SEZ UG. 102 (1044) .....2..2020n..0-cerenecoresseercenssosseesneee 19, 20

National Labor Relations Board v. Randolph Electric

Shh voaiaade ey 343 F.2d 60 (1965) ...........

2,3, 8, 9, 10, 11, 12, 13, 16, 17, 18, 19, 20

New ‘Bedford, Wood's Hole, Martha’s Vineyard, etc.,

Steamship Authority, 127 NLRB 1322 (1960) ....... 11, 19

— BNC ae sae

ate ep eee eae ee

11 INDEX

New Jersey Turnpike Authority, 33 LRRM 1528 (1954)

11, 15,18

Oxnard Harbor District, 34 NLRB 1285 (1941) 11,18

Pitt and Greene Electric Membership Corporation v.

Carolina Power and Light Co., 255 N.C. 258, 120

S.E.2d 749 (1961) br . &

West v. American Telephone and Telegraph, 311 USS.

223 (1940) 19

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1970

RR re MEE ae

NATIONAL LABOR RELATIONS BOARD,

Petitioner,

vs.

THE NATURAL GAS UTILITY DISTRICT OF

HAWKINS COUNTY, TENNESSEE,

Respondent.

BRIEF OF RESPONDENT IN OPPOSITION TO

PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

INTRODUCTION

The respondent, The Natural Gas Utility District of

Hawkins County, Tennessee, respectfully urges that the

Petition for Writ of Certiorari to the United States Court

of Appeals for the Sixth Circuit, filed herein on behalf of

the National Labor Relations Board, be denied.

2

The only question presented is whether the decision of

the Court of Appeals for the Sixth Circuit below is in con.

flict with the decision of the Court of Appeals for the

Fourth Circuit in National Labor Relations Board Vv. Ran.

dolph Electric Membership Corp., 343 F.2d 60 (1965).

It is submitted, that for the reasons set forth herein.

after, there is no conflict between the two decisions, and,

accordingly, the petition should be denied.

I,

ANSWER TO “QUESTIONS PRESENTED”

Respondent disagrees with petitioner’s statement of

the “questions presented.”

The question presented here is not “Whether federal

law rather than state law governs the determination,

under Section 2(2) of the National Labor Relations Act,

whether an entity created by a state is a ‘political sub-

division’ thereof and therefore not an ‘employer’ subject to

the Act.” Neither is it “Whether the Board properly con-

cluded that the respondent public utility district is not

a political subdivision of the State of Tennessee, and

whether, under the correct standard of judicial review,

the court of appeals should have upheld that determina-

tion.”

The reasons considered by this Honorable Court in

deciding whether or not to grant a petition for a writ of

certiorari are set forth in Rule 19 of the rules of this Court.

The only reason for granting such a writ alluded to

in the contents of the petition herein is that set forth in

Rule 19(1)(b) as follows:

“Where a court of appeals has rendered a decision in

conflict with the decision of another court of appeals

on the same matter.”

—

3

Thus, the only question here presented is whether the

decision of the court of appeals below is in conflict with

the decision of the Fourth Circuit Court of Appeals in the

Randolph case, supra, on the same matter.

As explained hereinafter, the two decisions did not

consider “the same matter,” and, in any event, the court

of appeals below decided this case in accordance with the

rule in the Randolph case, merely distinguishing the facts

here involved.

It is submitted that what petitioner has done in its

petition is to take the last several sentences from the

full opinion of the court of appeals below and presented

the same so as to try to create a conflict in the two de-

cisions.

It is submitted that a conflict in decisions which would

be the basis for granting the petition for certiorari does

not exist.

II.

ANSWER TO “STATEMENT”

A. The Board’s Findings of Fact.

Respondent only partially agrees with this portion of

petitioner’s brief. On page 3 of its brief, petitioner states:

“The undisputed facts with respect to the District’s

status as an employer under the Act are as follows.”

The petitioner then sets out a few facts, also some argu-

mentative conclusions, but does not list many other un-

disputed facts in this record with respect to the District’s

status as an employer under the Act.

Respondent desires to set out the following additional

undisputed facts:

amu

4

(a) The Natural Gas Utility District of Hawkins

County, Tennessee is only one of nearly 270 utility dis.

tricts in the 95 counties in the State of Tennessee (R. 50)!

(b) Any district established under the Utility Dis.

trict Law of 1937 (R. 98-130) is specifically empowered

under §6-2608, Tennessee Code Annotated, “to conduct,

operate and maintain a system or systems for the furnish.

ing of water, sewer, sewage disposal, natural gas, artificial

gas, police, fire protection, garbage collection and garbage

disposal, street lighting, parks and recreational facilities,

transit facilities, etc., or two or more of such systems—

and to carry out such purpose will have the power and

authority to acquire, construct, reconstruct, improve, bet-

ter, extend, consolidate, maintain and operate such system

or systems within or without the district - - -” (R. 120).

(c) The Utility District Act was passed by the Ten-

nessee legislature to provide a municipal corporate ar-

rangement to furnish certain needed governmental services

usually in small towns and rural areas, including, but not

limited to, the foregoing listed services; these services

were not, and, usually could not be, otherwise provided

(R. 51); $6-2607, T.C.A., provides that the district, when

formed, “shall be the sole public corporation empowered to

furnish such services,” so long as the district continues to

furnish any of the services which it is herein authorized

to furnish (R. 117).

(d) The legislature further provided in §6-2607,

T.C.A., that: “From and after the date of the making and

filing of such order of incorporation, the district so in-

corporated shall be ‘a municipality’ or public corporation

in perpetuity - - -.”

1. “R.” refers to the joint appendix before the Court of

Appeals, a copy of which was filed with the petition.

ww

5

(e) The county judge who appoints the first com-

missioners, and who fills vacancies in the event the com-

missioners cannot agree among themselves, is the top gov-

erning official in each county and is himself a publicly

elected official (R. 86).

(f) Commissioners serve with only very nominal

compensation (R. 126).

(g) So long as a district shall own any system, its

property and revenue are exempt from all state, county

and municipal taxation, and its bonds are also so exempt,

except for estate, inheritance and transfer taxes (R. 113).

(h) By §6-2613, T.C.A., utility districts are specifically

exempt from state regulation by the Tennessee Railroad

and Public Utilities Commission, even though privately

owned public utilities are specifically covered (R. 106).

(i) Further, §6-2615, T.C.A., speaks of the utility dis-

trict’s records as “public records” (R. 107).

(j) Apart from the Utility District Act, §6-318,

T.C.A., “Municipal Property and Services,” §6-604, T.C.A.,

in the Municipal Corporations section, and §9-1202, T.C.A.,

dealing with revenue bond refinancing, refer to and/or

characterize a utility district as a “municipality” (R. 36).

(k)- Under several federal statutes, including 42 USC

418 (and its counterpart in the Tennessee Code, §8-3811),

recognition is given to the fact that a utility district is a

governmental entity; an arrangement is provided for vol-

untary coverage to provide social security benefits to Dis-

trict employees, rather than the mandatory coverage re-

quired of non-governmental entities; also interest earned

on a utility district’s bonds is claimed to be exempt from

federal income tax (R. 35).

6

(1) The district is required to publish its annual state.

ment in a newspaper of general circulation by :6-26}7.

T.C.A. (R. 108).

(m) The district not only has the power of eminent

domain, but can exercise it even against other govern.

mental entities (R. 104).

(n) The state legislature passed this Act to provide

a municipal corporate arrangement to furnish certain re.

quired services, not feasibly done otherwise (R. 30, 50).

(0) Section 6-2612 of the Utility District Act is a gen-

eral grant of power and vests in the district “all the powers

necessary and requisite—capable of being delegated by the

legislature” (Emphasis added) (R. 105).

(p) Section 6-2614, T.C.A., as amended, provides that

in certain counties, the three commissioners be appointed

until the first of the month following the next general elec-

tion and, at that election, the commissioners be elected for

terms of 2, 4, and 6 years by the qualified voters of the

district (R. 125).

(q) Vacancies, other than those filled as above, are

filled by a vote of the remaining commissioners. If they

fail to agree, the fact is certified to the County Judge, who

appoints the new commissioner (R. 106, 125). Thus, the

district is administered, either by publicly elected officials,

or by officials‘ appointed by publicly elected officials of

the county.

(r) The general ouster law of Tennessee available for

ouster or removal of elected officials applies to the district's

commissioners (R. 106; see notes after §6-2614, T.C.A.).

On page 4 of the petition the following are listed among

the “undisputed” facts:

a

7

“The powers of the District are vested in and exer-

cised by a three member board of commissioners, who

are not subject to state or county regulation (Emphasis

added). . . . Neither the state nor the county has any

control over the District’s employees, and they are not

considered state or county employees.” (Emphasis

added).

It is submitted these statements, rather than being un-

disputed facts, are actually dubious and/or argumentative

conclusions when considered in the light of all the truly

undisputed facts, including (a) through (r) listed on pages

4 through 6.

Two other observations must be made about these so

called “facts”’:

(a) In the opinion of the Court of Appeals below,

reported at 427 F.2d 312, the following appears as footnote

2 on page 314:

“We disagree with the Board’s ruling that because the

State does not supervise the District or remove or dis-

cipline its commissioners or subordinates, therefore the

District is not a political subdivision. We would think

that the independence of the District strengthens rather

than weakens the proposition that it is a political sub-

division.”

(b) Section 6-2613, T.C.A., specifically exempts a dis-

trict from the regulation by the State Railroad and Public

Utilities Commission required of a private utility. This is

done because of a district’s governmental nature.

What is significant about this is that the National Labor

Relations Board has misunderstood the significance of this

exemption throughout this entire proceeding.

It is submitted that both of the foregoing are typical

examples of the Board’s failure in this case to properly

evaluate the “economic realities.”

—

8

FP. The Decisions of the Board and the Court of

Appeals.

In its brief on page 6, petitioner, in referring to the

initial Board decision, states that despite the fact that the

Supreme Court of Tennessee had characterized districts

as “arms or instrumentalities” of the state,

“the Board examined all of the relevant factors and

concluded that the District was ‘an essentially private

venture, with insufficient identity with or relationship

to the State of Tennessee to support the conclusion that

it is an exempt governmental employer under the

act.’”

There is, however, that large number of relevant

factors above sect out which are in this record and which

the Board apparently failed to consider.

Similarly, in reference to the court of appeals’ action,

on page 7 of its brief, the Board quotes only two paragraphs

from the very end of the opinion below (the entire basis

for contending a conflict exists arises because of this lan-

guage). What petitioner does not do is recognize that the

court of appeals below had, for several pages, approved

the Randolph rule, but merely distinguished the facts here.

Accordingly, the following is also quoted from the

opinion below reported at 427 F.2d 312 on page 313:

“Section 6-2607 of the Tennessee Code, under

which the Utility District was organized, provided

that a District is a ‘municipality or public corporation

in perpetuity under its corporate name and the same

shall be in that name a body politic and corporate

with power of perpetual succession, but without any

power to levy or collect taxes.’

The Supreme Court of Tennessee construed this

Statute in First Suburban Water Util. Dist. v. Mc-

Canless, 177 Tenn. 128, 146 S.W.2d 948 (1941), and

—

held that a District organized under it was a municipal

corporation and as such was an arm or instrumentality

of the state.

The Board declined to follow the decision of

Tennessee’s highest court, relying instead on NLRB

v. Randolph Elec. Membership Corp., 343 F.2d 60 (4th

Cir. 1965), which case involved private non-profit

utility corporations organized under the laws of North

Carolina, which were formed for the exclusive benefit

of their own members, did not have the power of

eminent domain, were not subject to substantial con-

trol or supervision, and did not exercise any portion

of the sovereign power of the state. The Board rea-

soned:

‘The Utility Districts are not created directly by

the State. They are formed by petition of property

owners upon a County Judge’s determination of the

feasibility thereof. Thus, the District is no more

a direct creation of the State than such privately-

owned public service companies as railroads, and

motor carriers, which also require some form of

governmental approval, such as a certificate of con-

venience and necessity.’ (App., p. 15 n. 7).

9

This reasoning is obviously fallacious because

privately owned railroads and motor carriers, even

though they may have certificates of convenience

and necessity, are operated for profit of their owners,

whereas the District is owned and operated by the

state, and not for the profit of private individuals.

The District, unlike railroads and trucking companies,

is a public corporation and was not subject to regu-

lation even by the State Public Utilities Commission,

and was exempt from all state taxes.

Reliance by the Board on Randolph is misplaced.

In Randolph, unlike our case, there was no holding

by the state’s highest court that the private utilities

were political subdivisions of the state.

be oe |

19

In Randolph the private utilities were ‘formed for

the exclusive benefit of its own members.’ Here, the

District was formed for the benefit of the inhabitants

of the community.

In Randolph, the utilities involved did not have

the power of eminent domain. Here, the District not

only has the power of eminent domain but also can

exercise it over other governmental entities.

The Commissioners of the District further have

the power to subpoena witnesses and to administer

oaths. The District’s records are ‘public records.’ The

District is required to publish its annual statement in

a newspaper of general circulation. Income from its

bonds is claimed to be exempt from federal income

taxes. Social Security benefits for its employees are

voluntary instead of mandatory as the District is con-

sidered ‘a political subdivision’ under 42 USC.

$418(5).

In our opinion, it was not necessary that the

District be created directly by the state in order to

constitute a political subdivision. It is sufficient if

the District be created in conformity with state law.

It should be noted that the Act does not require

agencies of either federal or state governments to be

created directly. As a matter of fact, wholly owned

government corporations, including the Federal Re-

serve Bank and even non-profit hospitals, are spe-

cifically exempt.

Under Tennessee law the District is created by

petition to the county judge, an elected official, who

must find a public convenience and necessity therefor.

The county judge appoints the first three commis-

sioners nominated in the petition seeking formation

of the District, and fills vacancies in the event the

commissioners cannot agree among themselves. In

counties having a population of 482,000 or more the

commissioners of the Districts are elected at regular

_

11

general elections. Although the District involved in

the present case did not have the requisite number of

residents to necessitate the election of its commis-

sioners, this factor indicates that Tennessee considers

the functions of a District to be that of a ‘political

subdivision’ requiring election of commissioners by

the electors when the District encompasses a specified

population.”

Another ground for the decision herein by the Court

of Appeals for the Sixth Circuit was that the Board had

not here even followed its own prior decisions 427 F.2d

312, 314. Mobile Steamship Authority, etc., 8 NLRB 1297

(1938); Oxnard Harbor District, 34 NLRB 1285 (1941);

New Jersey Turnpike Authority, 33 LRRM 1528 (1954);

New Bedford Wood’s Hole, Martha’s Vineyard, etc., Steam-

ship Authority, 127 NLRB 1322 (1960).

Accordingly, it is submitted, petitioner in its brief,

as it has done since its earliest decision in this matter,

has failed to consider all the facts in the record.

Petitioner has also failed to adequately set forth and ex-

plain the opinion below of the Court 0: Appeals for the

Sixth Circuit.

ITI.

ANSWER TO “REASONS FOR GRANTING THE WRIT”

The decision of the Court of Appeals below is not

in conflict with the decision of the Court of Appeals for

the Fourth Circuit in National Labor Relations Board v.

Randolph Electric Membership Corporation, 343 F.2d 60.

The two decisions do not involve “the same matter.”

(Rule 19(1) (b) of this Court)

First, the two decisions deal with different entities.

gy

12

i Second, the Court of Appeals’ decision below, when

: considered as a whole, actually followed the Randolph

2 case, set out many “economic realities” and based its de.

cision on them, rather than merely blindly and unques-

tioningly following state law, as the petition infers,

At most, the sentence or two from the opinion below

relied upon by petitioner as creating a conflict between

this case and Randolph is merely an additional reason

for the result reached herein.

There is also a third basis for the result reached here-

in, i.e., “Prior decisions of the Board do not support its

holding here”. 427 F.2d 312, 314. It is submitted this other

reason for the decision below is merely another ground

for concluding there is no conflict between the decision

in this case and the decision in the Randolph case.

eons ors

A. The Randolph Case and the Case at Bar Deal

with Different Entities.

The Randolph case dealt with electric membership

corporations while the case at bar deals with utility dis-

tricts. Even a cursory comparison of a North Carolina

electric membership corporation with a Tennessee Util-

ity District reveals a different entity.

Coincidentally, the Tennessee statutes also provide

for the organization of electric membership corporations

in T.C.A. §65-2401 et seq. They are, when formed, very

similar to those in the Randolph case, being essentially

non-profit cooperatives and otherwise similar to privately

owned public utilities. The National Labor Relations

Board has itself ruled on such a Tennessee electric mem-

bership corporation. NLRB v. Gibson County Electric

Membership Corp., 65 NLRB 760 ( 1946). (This case was

also cited in the Randolph case.)

13

In its brief, on page 8 thereof, petitioner states that

the electric membership corporation considered in

Randolph was created pursuant to a state statute similar

to the Tennessee statute (T.C.A. §6-2601, $6-2636) creat-

ing the utility districts. It is submitted, there is little

resemblance between these two statutes. The North Car-

olina statute considered in Randolph is, however, quite

similar to §65-2401, T.C.A., which provides for electric

membership cooperatives in Tennessee.

A comparison of the North Carolina Electric Member-

ship Corporation Act, involved in the Randolph case,

with the act creating the utility districts in Ten-

nessee, involved in the case at bar, reveals significant

differences between the two:

(a) Under the Tennessee Utility District Act, the

district may furnish one or more types of service (includ-

ing fire, police, garbage collection, etc.) to all persons in

the district and has an exclusive franchise for same in

the designated area.

Sections 117-15 and 117-16 of the General Statutes of

North Carolina make it clear that only members are en-

titled to get electric power from the North Carolina Electric

Membership Corporation.

Section 117-16 provides as follows:

“The corporate purpose of each corporation formed

hereunder shall be to render service to its members only

Tennessee utility districts, being political subdivisions

of the state, must render service to all persons ir the dis-

trict.

The North Carolina electric membership corporations,

not being governmental in nature, are required by statute

—

to render services only to their members, and other mem.

bers of the public are not entitled to get service from it and,

in fact, are prohibited from getting service from it.

The case of Bailey v. Carolina Power Company, 219

N.C. 768, 195 S.E. 64 (1938), held that persons, not mem.

bers of the electric membership corporation involved in

the case, could not maintain an action challenging the

validity of the acts of the director of the corporation and,

that, the fact that a person is a member of the community,

or a resident of the territory, in which an electric mem-

bership corporation is authorized to operate, or might be

eligible for membership therein, does not entitle him to

service by such corporation.

Thus, an electric membership corporation exists solely

for the benefit of its members; a Tennessee utility district

exists to provide governmental services to citizens in certain

areas and is similar to a county or municipality. Further,

among the type of services that may be rendered by a

utility district are such traditionally governmental serv-

ices as fire, police, street lighting, garbage collection. etc.

(b) The Tennessee Utility District Act provides that

the district not only has the power of eminent domain, but

can exercise it even against other governmental entities

; (R. 104). On the other hand, §117-18(6) of the General

Statutes of North Carolina provides that:

“Subject only to the constitution of the state, a corpo-

ration created under the provisions of this article shall

have power to - - - apply to the North Carolina Rural

Electrification Authority for permission to construct

or place any parts of its system or lines in and along

any state highway or over any lands which are now,

or may be, the property of this state, or any political

subdivision thereof. In all questions involving the

right of way, or the right of eminent domain, the rul-

ELSE LEE NAY IES SERENE DB ROBERLV LEST? BBE 9 800 BES

15

ings of the North Carolina Electrification Authority

shall be final.” (Emphasis added).

Thus, the North Carolina electric membership corpo-

rations specifically do not have the power of eminent do-

main, while the Tennessee public utility districts not only

have this power, but have it against other governmental

bodies.

The Board itself in the New Jersey Turnpike Author-

ity case, supra, has held the presence of this power (emi-

nent domain) to be a determinative factor in determining

an entity to be a governmental subdivision.

(c) Section 6-2607, T.C.A., provides that, once formed,

a Tennessee utility district shall be the only public corpo-

ration empowered to perform its services within its district.

On the other hand, it was held in the case of Pitt and

Greene Electric Membership Corporation v. Carolina Power

and Light Co., 255 N.C. 258, 120 S.E.2d 749 (1961), that an

electric membership corporation and a privately owned

public utility corporation are free to compete in rural areas,

unless restricted by contract.

(d) Section 117-13 of the North Carolina Act pro-

vides that each corporation shall have a Board of Directors

to be elected annually by the members, and the powers of

the corporation shall be vested in said Board. This pro-

cedure resembles the stockholders and the directors of a

private corporation and is to be contrasted with that fol-

lowed to select the commissioners of the Tennessee utility

district. Said commissioners are appointed by the county

judge, the top elected official in most counties, and, in cer-

tain counties, it is provided, said utility district commis-

sioners are elected in general elections.

Also of great significance is that profits (similar to

dividends) inure to the exclusive benefit solely of the mem-

2

— AOC PE LINE PCTS Fig? We DARL a ON eT GAPE A Ra a Be relate I ABS ae

1

ber (rimilar to stockholders) of the Bleotrte Membership

Corporation; while the District under (209m, TOA, (R

112) may only charge such rates ae to remain self stp:

porting, and all aes in the entire area are affected by

rate changer (the name an raten charged by a county and op

a muntelpality for governmental services affect all users

in the county and or municipality)

(©) Ih respondent's anawer to the statement of the

Hane, Heapondont haa wet out herein, at pager 4 through

vertain other factors which lead to the conelusion that the

Utility cintriet im a political subdivision, None of these

factors are provided for under the Klectric Membership

Corporation Aet of North Carolina

Thus, respondent contends that there inno conflict in

the two decisions; one holda that an electric membership

corporation in nota “political subdivision", and the other

holds that a utility diatrictds a “political subdivinion.”

B. ‘The Court of Appeals Below Followed the Ran.

dolph Case by Taking Into Account the Keo.

nomle Realition,

The Fourth Cireuit Court in Randolph stated at 943 P24

ti:

“. «= = To the extent that it has taken into account

economic realities as well ax the statutory purposes,

the Roard’s determination ix entitled to great respect”

(Emphasis supplied),

It is, of course, the undenied duty and authority of the

National Labor Relations Board to make an initial deter-

mination of its own jurisdiction, and having done so, to act

as it feels the situation demands.

It is, however, and has been throughout the course of

these proceedings, respondent's position that the NLRB

7

has incorrectly decided Ht has jurisdiction, and, thereafter,

has consistently refused to recensider the question (i 1%,

19-26).

The Handolph case certainly does not stand for the

proposition that once the Hoard has determined ite awn

jurisdiction, the eourts ler nied Vatever Chee right try ehaablenipge it

This position is in conflict with basic horn book law Ju

riadiction can be raised at any time in a proceeding In

Cardillo v. Liberty Mutual Company, 490 UG Mi, ATS

(1947), it wan stated

“But in reviewing an administrative order, it is oni

narily preferable where the issue is raised and where

the record permite an adjudication, for a federal court

first to satinfy itself that the administrative speney

or officer had jurisdiction over the matter in dispute”

It in respondent's position that the Hoard fwiled tw

correctly analyze the “economic renlities” and/or evaluate

the total picture, and, consequently, filed ty conrerAly

apply the “political subdivision” exemption of $212) A

the National Labor Helations Act, which respondent a

serts in Clearly dictated in this case, and which the Board's

regional office held applicable in Case No 26600-2972, itv

volving another Tennessee utility district with identica)

powers and created under the same Act H, 64, 5% and

Respondent contends that the Court of Appeals below

followed the Randolph rule. Rather than holding that state

law, rather than Federal law, governs, without consd-

ering other factors, that court took into account Ah the

“economic realities and the statutory pure” Thus

the Court below followed the rule of the Randolph case but

distinguished the facts here.

The actual holding of the Randolph case with refer-

ence to the effect of state Jaw in interpretetion of the

Wagner Act is as follows:

RETIRE RS OO ALi: 5 gE AO AT NITES BAI We LACE LM. IETS TRO

“The fact that North Carolina sees fit to characterize

snch corporations as ‘political subdivisions iS Not

decisive of the question before us. sinee their relation

to the state and their actual methods of operation do

not fit the label piven them (emphasis supplied),

The Court of Appeals below held, as) far as utility

distriets are concerned, that their actual methods of opera.

tion and their relation to the state do fit the label that the

state has given them

In other words, the Randolph case held that where the

actual methods of operation and the relation of the body

do not fit the label given them by the state, then the fact

that the state characterizes it. as a “political subdivision”

would not be decisive of the question

At the end of its opinion herein, the Court of Appeals

below did sav

the decision of the Supreme Court of Tennessee

was of controlling importance on the question whether

the Distriet was a political subdivision of the state

Th our opment was binding on the Board.”

Obviously, if the Court ef Appeals below had orly

stated the foregoing and had not, before this, set out in

detail the various economic realities on which it based tts

decision, there might be a conflict if the same type of entity

were mrolred. But, having so set out at length the various

economic realities, the last two sentences in the opinion

are, at most, only another basis for the Court's decision.

Incidentally, still another ground for the result reached

below is, as the Court of Appeals stated: “Prior decisions

of the Board do not support its decision here”, citing var-

ious Board decisions. In Mobile Steamship Authority, ete.

supra, Oxnard Harbor District, supra, and New Jersey

Turnpike Authority, supra, the Board apparently held the

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19

entities exempt without going, into the question of whether

state law is controlling in what constitutes a political sub-

division. In New Redford, Wood's Hole, Martha's Vine-

yard, ete., Steamship Authority, supra, the Board, citing

West v. American Telephone & Telegraph Co,, 311 US, 223

(1940), held state law controlling on what constitutes a

political subdivision, Thus, it is submitted, this further

demonstrates there is no conflict between the result herein

and Randolph, because the Court below, in part, rested its

decision on the ground that the Board had not followed its

own prior decisions.’

Most certainly, nowhere in Randolph, or in NLRB v.

Hearst Publications, Inc., 332 0.S. 102 (1944), cited by pe-

titioner in its brief and relied upon by the Court in Ran-

dolph, is it stated that state law is not to be considered,

All that the Hearst case said was that state law would not

“exclusively” control. 322 U.S. 102 at page 125

It is extremely important to note that Randolph chiefly

relied upon Hearst.

Thus, the “conflict” boils down to the language, in the

last two sentences of the full opinion below, where the

Court stated that the decision of the Supreme Court of

Tennessee that the District is a political subdivision is

“binding on the Board” and the language in Randolph,

from the Hearst case, that state law does not “exclusively”

control. Is this a conflict in decisions on the same matter?

It is submitted that both courts followed the rule of

first examining and evaluating all the underlying facts and

economic realities in deciding that the entity is, cr is not,

2. To this should be added the Regional Director of Region

26 of the NLRB's ruling in Case No. 26-RC-2972 that the West

Tennessee Public Utility District of Weakley, Carroll and Benton

Counties, Tennessee was not an “employer” within the meaning

of §2(2) of the Act (R. 58).

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20

a political subdivision; the Court below, after so doing, held

the respondent exempt. When this decision is considered

as a whole, no real conflict exists, even if the same type of

entity were involved—which, it is also submitted, as herein

set out, is not the case.

The Court of Appeals below also followed Randolph

and the case of NLRB v. Hearst Publications, supra, cited

by petitioner in its brief, by looking to the intent of Con.

gress in enacting the National Labor Relations Act. Ran.

dolph required “taking into account - - - the statutory pur.

poses.” The following language taken from the decision

of the Court of Appeals below in the case at bar is per-

tinent:

“It was the clear intention of Congress not to make

amenable to the National Labor Relations Act employ-

ees of either federal or state governments. The effect

of the order of the Board in the present case may be

to extend its jurisdiction over public employees, in

nearly 270 Utility Districts in Tennessee, which Dis-

tricts perform a wide variety of public functions.”

CONCLUSION

As stated above, petitioner’s contention that there is a

conflict of decisions in the courts of appeal is not valid.

Different entities were examined in the two decisions.

Further, in each case, the NLRB or a federal court of

appeals, as the court below in this case and in Randolph

did, must, in determining jurisdiction, consider the eco-

nomic realities, including giving due consideration to state

law, as well as the statutory purposes, in arriving at its

decision as to whether an entity is, or is not, a “political

subdivision.” The particular facts and economic realities

of each case must control.

21

The petition for a writ of certiorari should not be

granted.

Respectfully submitted,

EUGENE GREFNER, JR.

Suite 1601

100 North Main Building

Memphis, Tennessee 38103

J. O. PHILLIPS, JR.

Citizens Union Bank Building

Rogersville, Tennessee 37857

Attorneys for The Natural Gas Utility

District of Hawkins County, Ten-

nessee—Respondent

qs? ee