Petition for Writ of Certiorari — Seslar v. Union Local 901, Inc.

a i oes

APR 10

OCTOBER TERM, 1950

CHARLES SESLAR,

Petitioner,

Vs.

Union Locat 901, Inc., Dattas Smiru, Russet L. JoHNsON,

Ricnarp Hurst, Metvin Borcuerprncer, Pautus ApAms,

(ecu, Onton, Vircit Foianp, JosepH Epwin Kramer, JOHN

B. DENNIs,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Frank Donner,

Artuur Kinoy,

Attorneys for Petitioner,

55 West 42nd Street,

+ Of Counsel:

> Davin Scrisner,

MarsHALL PERLIN,

Frank DonNER,

Artuur Krnoy.

New York City, N. Y.

—

j

Supreme Court of the United States ——

INDEX

PAGE

Opinions Below l

Jurisdiction ; 2

Preliminary Statement .............. ae ae

I sities ce tecccen sesneehcisaincouskacalanspioopaatendainti 2

PI FN sisters ctererriecera condos 3

| eS CLO AO NT RN aNEeT A ROD Coe ORD Se TO )

Questions Involved . Sitar a

Summary Statement of the Matter Involved... 7

Reasons for Granting the Wrrit......... ss

I i a rie nein sieeetalneriorenoins . 21

CASES AND AUTHORITIES

Bacon v. Paradise, 63 N. EK. 2nd 571 (Mass. ).........-. 13, 14

Bitterman v. Louisville & Nashville R. R., 207 U. 5.

205, 225 15

Board of Trade of City of Chicago v. Cella, 145 F. 28,

205 U. S. 336 15

Bureau of National Literature v. Sells, 211 F. 379

(D. C., W. D. Wash.) 15

Connecticut General Life Insurance Co. v. Weldon, 246

F. 265 (D. C., M. D. Ala.) Sdachimasamwticiaes 18

Elliot v. Empire National Gas Co., 4 F. 2nd 493

Oe, ke i ccstetemand wemnuiceeaete 16

Fitzgerald v. Abramson, 89 F. Supp. 504 (D. C., S. D.

WG ss cscseces pesaos'ecias aciahes se Rape hoaeenaiani 13

Fletcher v. United States, 174 F. 2nd 373 (C. A. 4)... 21

PAGE

Gibbs v. Buck, 307 U. 5. 66...

20)

Glenwood Light Co. v. Mutual Light Co., 239 U.S. 121_.16,18

13

18

21

Goesel et al. v. Bimeler et al., oi. = ae

Green v. Obergfell, 121 F. 2nd “1c. A. DO. t.ph...-

Howat v. State of Kansas, . 2 2 |

Hughes, Federal Practice, Vol 1, p. 325— .

ilunt v. N. Y. Stock Exchange, 205 gg 7 aes

King v. Kansas City Relief Assn., 60 F. 2nd 547 (D. C.,

W. D., Mo.)

Koerner Lodge #6 K. of P. v. Grand Lodge K. of P.

of Indiana, 146 Ind. App. 639, 45 N. i.

Low v. Harris, 90 F. 2nd 783 (C. A. 7)

Maggio v. Zeitz, 383 U.S. a Cane oO

National Lock Co. v. Chicago Regional Board, 80 F.

Supp. 820 (D. C., M. D. HL)...

N. J. Federation of Young Men’s & Women’s Hebrew

Association v. Hoffman, 25 F. Supp. 687 (D. C., M.

a Pap...<. ra

Packard v. Banton, 260 U. S. i. Seen

Peterson v. Scuro, 93 F. 2nd 878 (C. Oc oieincnmn

Pinel v. Pinel, 240 U. S. 594

Ronzio et al. v. Denver R. G. W. R. Co., 116 F. 2nd

604 at 606 (C. A. 10)

Rosenberg v. Chicago Title & Trust Co., 128 F. 2nd 245

c A. t-

Ross v. So. Ry. Co., 20 F. Supp. 556 (D. C., W. D.

S. C.) .

iti

PAGE

Shappiro v. Goldberg, 192 U.S. 232. scene 17

Shipe v. Floral Hills Ine., 86 F. Supp. 985 (D. C.,

NN ah aca eateasicc aches oioeintnenassinendunnons 17

Smith v. Adams, 190 U. 8. 175... =n

Stimson v. Dousman, 20 How. 461 a 17

Thomas v. Goskill et al., 315 U.S. 442 oh 18, 19

Troy Bank v. Whitehead & Co., 222 U.S. 39... 20

U.S. ex rel. Bowles v. Seidman, 154 F. 2nd (C. A. 7)... 21

United States v. United Mine Workers of America,

United States v. White, 322 U. S. 695.00 10, 11

Woods v. Fliss et al., 168 F. 2nd 612 (C. A. 7). 21

Woodside v. Ciceroni, 93 F. 1 (C. A. 9) 18

STATUTES CITED

Title 18, U.S. C.:

Section 401 5

Title 28, U. S. C.: is

ERE CSREES SSS anor a 2

Title 28, UT. S. C.:

Section 1332 ; 2, 5, 6

Section 1332(11) 2

—

Supreme Court of the United States

OCTOBER TERM, 1950

CHARLES SESLAR,

Petitioner,

vs.

Union Loca 901, Lye., Datias Smiru, Russert L. JouNnson,

Ricuarp Hurst, Metvix Borcuerpincer, Pautus Apams,

(ecu, On1on, Viner. Foianp, JoserH Epwin Kramer, JOHN

B. DenNIs,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

To the Chief Justice of the United States and the Associate

Justices of the Supreme Court of the United States:

Charles Seslar respectfully prays that a writ of certio-

rari issue to review the judgment of the United States

‘Court of Appeals for the Seventh Cireuit (R. 399) re-

versing and vacating a judgment of contempt issued by

‘the District Court for the Northern District of Indiana,

Fort Wayne Division on the ground that the District

‘Court was without jurisdiction to issue the original in-

junction.

Opinions Below

_ The opinion of the Court of Appeals (R. 399) is reported

" 186 F. 2nd 403 (C. A. 7). The opinion and order of the

Li RAPED ia iA io Sitti Dh SOR tS CARB ENEGS ate 5 WL CHER Daa

2

District Court granting the injunction against the defend-

ants (R. 12-18) is reported in 87 F. Supp. 44 (D. C. N.

D. Ind.). The decision of the District Court adjudging

the defendants in contempt is not reported.

Jurisdiction

The judgment of the Court of Appeals was rendered on

January 11, 1951. The jurisdiction of this Court is in-

voked under Title 28, Section 1254 of the Judicial Code.

Preliminary Statement

Complaint

The plaintiff-petitioner, member of Local 901, United

Electrical Radio & Machine Workers of America, instituted

an action in equity on October 6, 1949 against the defend-

ants (R. 1), invoking jurisdiction of the District Court

under Title 28, Section 1332(1) (revised), charging that

the defendants had improperly divested a local trade union

of its funds and transferred it to a third party in viola-

tion of the constitutions and by-laws of the local union and

of the international union of which it was a part. The

defendants turned over the assets of the local union to an

Indiana corporation organized solely for that purpose. The

value of the assets which the plaintiff sought to protect

was approximately $114,000. The complaint charged that

as a result of this illegal transfer the plaintiff, as a mem-

ber of the local union, and the local union itself, had been

improperly deprived of these assets. The complaint

charged that the defendants intended to utilize the defend-

ant corporation for the purpose of turning over the afore-

said assets to a recently organized rival union. Having

no remedy at law, the plaintiff requested that the defend-

ants be restrained from disposing of the assets and from

continuing to exercise control and custody over the prop-

erty and assets of the local union, and that the defendants

gees:

—

be ordered to reconvey to the said Local 901, United Elec-

trical Radio & Machine Workers of America, all property

transferred to the corporation from the local union, and

that a temporary restraining order be entered forthwith.

The plaintiff being a citizen of Ohio and the defendants

citizens of Indiana, there was proper diversity of citizen-

ship. An allegation in the complaint set forth the requisite

jurisdictional amount.

3

Proceedings Below

The defendants moved to dismiss the complaint (R. 7)

on the grounds that the Court did not have jurisdiction

in that there was not the requisite jurisdictional amount

and that the plaintiff had not exhausted his remedies

within the union. The defendants answered to the com-

plaint (R. 9). After presentation of the evidence in the

cause, on November 9, 1949, the Court entered its judg-

ment against the defendants and extended to the plaintiff

in the cause certain permanent injunctive relief (R. 12-

18). The Court found that jurisdiction of the cause was

vested by Title 28 U. S. C. A., Section 1332; that there

was diversity of citizenship, and that the amount in con-

troversy was in excess of $3,000. The defendants were

ordered to reconvey to the local union all assets of which

it had been divested and to deliver said assets to the local

union by a specified date. The defendants were permanently

enjoined from transferring, assigning, conveying or in

any other manner disposing of any of the funds, property

or assets of the local union.

On November 9, 1949, the defendants filed a notice of

appeal from the original injunction to the Cireuit Court

of Appeals but failed to perfect said appeal within the

requisite time.

On January 20, 1950, the plaintiff instituted contempt

proceedings by filing a “Complaint for Relief of Acts in Con-

tempt” of the Court order of November 9, 1949 (R. 24-

29). The plaintiff alleged that the defendants caused

4

funds of the local union to be disbursed and caused the

facilities and properties of the local union to be used in

violation of the injunction order, that said funds and prop-

erties were used for the benefit of a rival union organiza-

tion. Plaintiff requested that the moneys be reimbursed.

The defendants then filed their motion to strike the

complaint for contempt (R. 31-32) on the grounds that

the plaintiff was attempting to expand the order, that

a similar action was now pending though undecided in

the State Court, that the plaintiff had no right in the

assets of the local union, and that the plaintiff was causing

multiplicity of suits by preventing the final and sole dis-

position of the suit in the State Court. No question of

jurisdictional amount was raised in that motion. The mo-

tion was overruled by the Court (R. 72).

Thereafter, a hearing was held on the citation for con-

tempt. The District Court found that the defendants had

violated the restraining order and directed reimburse-

ment as to certain of the alleged violations (R. 351-362).

On January 30, 1950, the defendants moved to dismiss

the contempt proceedings for want of jurisdiction on the

part of District Court because of the Norris-LaGuardia

Act, and for failure to join indispensable parties (R. 73).

Said motion was overruled by the Court (R. 81). Ina

memorandum of decision and by a decree entered March

20th, 1950, the Court entered its judgment finding the de-

fendants guilty of civil contempt and fixed terms of purga-

tion. On March 24, 1950, the defendants filed a motion

to vacate the judgment of contempt on the grounds that

the State Court had jurisdiction over the subject-matter,

that the union, Local 901, UERMWA, not a party to the

proceedings, had been granted relief, and that the original

order on its merits should not have issued. The motion

to vacate was not grounded on the lack of jurisdictional

amount as required by Title 28, Section 1332. Said motion

was denied on March 28, 1950 (R. 375).

p, aa

al

5)

The defendants filed a motion for suspending and stay-

ing enforcement of the order (R. 376) pending appeal,

which motion was granted in part on the condition of the

defendants filing a bond of the necessary amount (R. 378).

The defendants filed an appeal to the Court of Appeals,

Seventh Circuit on March 29, 1950 (R. 379). The Court of

Appeals reversed the judgment of contempt and remanded

the cause to the District Court (R. 405). In the decision

of the Court of Appeals on January 11, 1951 (R. 399-404),

it was held that the District Court did not have jurisdiec-

tion to grant the original injunction in that the amount in

controversy was less than the requisite jurisdictional

amount. The Court held that plaintiff’s interest in the

assets of the local union was several and not joint and

his individual claim was less than $3.000.

Statutes Involved

Title 28, Section 1332:

“Diversity of citizenship, amount in controversy.

a) The District Courts shall have original jurisdiction

of all civil actions where the matter in controversy

exceeds the sum or value of $3,000 exclusive of in-

terests and costs and is between:

(1) citizens of different states :”

Title 18, Section 401:

“Section 401, power of court

A Court of the United States shall have power to

punish by fine or imprisonment at its discretion such

contempt of its authority and none other as—

(3) disobedience or resistance of its lawful writ,

process, order, rule, decree or command.”

6

Questions Involved

1. Whether, in an injunction action by a union member

to safeguard the fund and assets of his trade union, jur-

isdictional amount for the purpose of diversity jurisdiction

is determined by the value of the union’s assets?

(a) Whether a member’s interest in the assets of a

trade union is his right to the use and enjoyment of the

total assets and the benefits derived therefrom rather than

solely an interest in a per capita divided share of the total

assets?

(b) Whether the assets of a union represents a joint non-

divisible fund available to all the members, or whether the

assets of a union represent merely an aggregation of sepa-

rate several and divisible interests of each member?

(ec) Whether a constitution of a union providing for no

distribution of its assets among its members upon a dis-

solution or otherwise, vests each member with an interest

in the entirety of the association’s assets?

2. Whether the criterion in determining jurisdictional

amount is either the defendants’ or the plaintiff’s interest

in the object of controversy?

3. Whether the test of jurisdictional amount in an in-

junction proceeding is determined by the value of the in-

junction itself?

4. Whether in a proceeding determining title to real

property, it is the value of the property, rather than a

party’s interest which determines the value of the matter

under Title 28, Section 1332.

~

5. Whether the object of the controversy in this injune-

tion proceeding satisfied Title 28, Section 1332 as to jur-

isdictional amount?

6. Whether the lack of jurisdiction of the District Court

in issuing the original injunction is a proper defense to a

violation of the injunction order in a contempt proceeding?

bo |

Summary Statement of the Matter Involved

Whether the District Court had jurisdiction over this

cause in respect to the requisite jurisdictional amount raises

the important and fundamental question as to the relation-

ship of the union and its members insofar as it applies to

the ownership and use of the association’s assets.

The question posed in determining the plaintiff’s interest

in protecting the assets of his union is whether a member has

a right to the enjoyments derivative from the total use of

the funds of a trade union or is his right merely a seg-

mented severable interest in a particular share of the or-

ganization’s funds. In determining this issue the Court is

confronted with the fundamental nature of a union and its

properties. For that reason the nature of the relationships

of the plaintiff and his union, Local 901, United Electrical,

Radio & Machine Workers of America as set forth in the

Constitution of the union are of vital importance in con-

sideration of this matter.

Plaintiff-petitioner, a citizen of Ohio, is a member of a

trade union, Local 901, United Electrical, Radio & Machine

Workers of America (UE) (R. 16). This Union at the time

of the institution of the suit was the certified collective bar-

gaining agent of all production and maintenance employees

at the Fort Wayne plant of the General Electric Company

(R. 14). The local union came into being as a part of the

United Electrical, Radio & Machine Workers of America

(UE) as a result of the issuance of a charter from the

national body to the local organization (R. 15). The consti-

tution of the international Union of the United Elec! rieal,

Radio & Machine Workers of America (UE) provides for

the issuance of charters to local unions. The activities of

the local union must be in accordance with the constitution

and by-laws of the parent organization (R. 3, par. 9; R. 4,

par. 13). The constitution of the parent organization pro-

vides that a local union may not secede or disaffiliate from

the parent body and that the local union shall continue in

Sicaicaeciere Bt 3 ARO Re TTT

8

existence as long as there are seven or more members (R.

4, par. 13). If a local union is reduced in size to less than

seven members, all the assets, properties and funds of the

aforesaid local revert to the parent body and the remaining

individuals become members at large of the parent union

(R. 4, par. 13). The constitutions do not permit a pro-

rated, per capita distribution of the assets of the local

union under any conditions, including dissolution (R. 4,

par. 13).

The District Court in issuing its injunction (R. 12-18)

found:

“ConcLusions oF Facts

“12. The real and personal property of a local union

were at the disposal of the local, to be used for the

purpose of serving the interests and needs of its mem-

bers, in accordance with the constitution and by-laws of

both the national and local unions. When all property

of the local union was transferred to the defendant

corporation the availability of this property for dis-

posal according to the terms of the constitution and

by-laws was curtailed and impeded.

“13. The plaintiff, as a member of the union, was

adversely affected by the transfer of funds to the de-

fendant corporation. He has no adequate remedy at

law to protect his interest and he will suffer substantial

and irreparable damage if such transfer is not set

aside, and if he is not protected against similar trans-

fers or diversions in the future.”

The Court also found:

“Conc.Lusions oF Law.

“2. The constitution of the parent organization, the

UE, is a contract between it and its members and Local

Union 901. The constitutions of the local and national

organizations are so integrated as to form mutual con-

tractual obligations between these organizations and

the membership of the local union.

“A transfer of the funds and property of the local

union which is unconsistent with these constitutions Is

ultra vires and void.

9

“Each member of the local union has an interest in

the entire assets and property of the local union. In

addition, each member has a contractual right to have

the assets and property of the local union used only

for those purposes set forth in the constitutions, and

disbursed only in such manner as is therein approved.

Supplementary to those is the further right to have the

assets and property of the local union remain under

the control of both the local and national unions as

such control is set forth and delineated in the constitu-

tions and by-laws. Since the transfer to the corpora-

tion interfered with this control and is inconsistent

therewith, such transfer is void, and should he set

aside.” (Emphasis supplied.)

The major part of the assets of the local union, $70,000,

was real estate, the Union Hall, the title to which was in-

volved in the cause of action (R. 3). The defendants had

executed a deed conveying the real property of Local 901,

United Electrical, Radio & Machine Workers of America

(UE), to the defendant corporation.

In the contempt proceedings held in the District Court,

no issue as to the jurisdictional amount was raised by the

defendants. The Court of Appeals in rendering its opinion

accepted the contention of the defendants, first raised in

their brief on appeal, that the plaintiff had a separate

distinct interest in the funds of the union to be determined

on a per capita basis, i.e., $23.00. The Court below denied

that the individual member had a right to the use, enjoy-

ment and benefits derived therefrom of the assets in its

entirety. The union’s treasury was held to be in essence

an accumulation of individual interest rather than property

of the association itself. The application of such a prin-

ciple in this fashion to a labor organization raises a ques-

tion vital to the more than 15 million union members of the

nation.

The Court below further held the contempt judgment

must fall upon the finding that the District Court did not

have jurisdiction to issue the original injunction.

10

Reasons for Granting the Writ

I

There are presented here for decision a number of im-

portant questions which have not been, but should be, set-

tled by this Court. These questions have been decided in

a way probably in conflict with the applicable decisions of

this Court and in tonflict with decisions of other courts

of appeals in the same manner.

II

The decision of the Court of Appeals in the present pro-

ceeding raises a fundamental and vital question as to the

nature of unincorporated associations, particularly trade

unions, by holding that the interest of the individual mem-

ber is severable rather than joint.

The tremendous role of trade unions today in the national

life of the country is of such import as to warrant a clear

and definitive determination as to the nature of such or-

ganizations. The circumstances in connection with the

present proceeding demonstrate the vital importance of a

clear definition of property interests of trade unions and

their membership.

The nature of a trade union and its properties was

clearly discussed by this Court in United States v. White,

322 U.S. 695:

“But individuals when acting as representatives of a

collective group cannot be said to be exercising their

personal rights and duties nor to be entitled to their

purely personal privileges. Rather they assume the

rights, duties and privileges of the artificial entity or

association of which they are agents or officers and they

are bound by its obligations * * *” (p. 699).

“This conclusion is not reached by any mechanical

comparison of unions with corporations or with other

entities nor by any determination of whether unions

1]

technically may be regarded as legal personalities for

any or all purposes. The test rather is whether one

can fairly say ywnder all the circumstances that a par-

ticular type of organization has a character so imper-

sonal in the scope of its membership and activities that

it cannot be said to embody or represent the purely

private or personal interests of its constituents, but

rather to embody the common or group interests only

* * * labor unions—unational or local, incorporated or

uincor porated—clearly meet that test.

“Structurally and functionally a labor union is an

institution which involves more than the private or per-

sonal interests of its members. It represents organized

institutional activity as contrasted with individual ac-

tivity * * * the union’s existence in fact and for some

purposes in law is as perpetual as that of any corpo-

ration in being dependent upon the life of any member.

It normally operates under its own constitution, rules

and by-laws which, in controversies between member

and union are often enforced by the courts. The union

engages in a multitude of business and other official

concerted activities, none of which can be said to be

the private undertakings of the members * * * the union

owns separate real and personal property even though

the title may nominally be in the names of its members

or trustees. The official union books and records are

distinct from the personal hooks and records of the

individuals, in the same manner as the wnion treasury

exists apart from the private and personal funds of

the members. See U.S. v. Goedde & Co., + F. Supp.

523, 534” (pp. 701, 702). (Emphasis supplied.)

The opinion of the Court below is thus in complete con-

flict with the rationale expressed by this Court in United

States v. White, supra. The statements of Mr. Justice

Murphy are basically determinative of the issue as to this

petitioner’s interest in the assets of his local trade union.

At no time according to the terms of the constitution and

by-laws of the union could this petitioner or any other in-

dividual union member carve out an individual interest

from the union’s assets. The interest of this plaintiff in

the assets representing approximately $114,000 is in the

total rights, privileges, protection and enjoyment of bene-

12

fits derivative from the assets. Today a union facing pow-

erful combinations of corporate wealth requires consider.

able sums of money to fulfill its purposes—the obtaining

of better wages and working conditions in behalf of its

members.

This petitioner does not want and has no interest in

a severable or per capita share of the Union funds. He

wants the rights derivative from the proper use of such

a fund as an entity. At the time of the institution of the

action, the petitioner as a member of the local union was

confronted with an election under the National Labor-

Management Relations Act; the union was entering into

negotiations with the General Electric Company on the

matter of wages and working conditions; and this member

sought in behalf of himself and the union to protect the

integrity of these funds so that his labor organization

could service his needs in those respects.

A worker in joining a labor organization and assuming

the financial obligations connected therewith, does so for

certain clearly defined objectives. He realizes only through

the collective strength of organized labor can he achieve

conditions of labor satisfactory to him. His own individual

bargaining powers in the face of organized industrial

strength is meaningless. Concomitant with the creation of

organized strength, the worker has need of the use of the

financial holdings of the union only on a collective or joint

basis. The worker has no interest in his “per capita” share |

of these assets. It is as meaningless as his individual bar-

gaining power. To mechanically apply a concept of private

law to trade unions is to deny the right, powers and posi-

tion of unions in society today, and it would result in the

atomization of the union’s status.

The nature of the proceeding was such as to save the

assets of the local union for the local union and all its mem-

bership. That was the ultimate objective sought. In es-

sence it was an action to establish the rights of all the

members of Local 901, United Electrical, Radio & Machine

Workers of America, in the union’s assets. This petitioner

could sue alone, as he, like every other member of the or- |

5

13

ganization, has the right to enjoy the total benefits of the

entire assets or subject matter in controversy.

Furthermore, a member of a trade union organization

has the right to enforce the contractual relationships estab-

lished by the union’s constitution, by-laws and membership

ecards which set forth the manner in which the organization

shall function and its funds be used. And his right to pre-

vent ultra vires acts of officers and members as to their

dealings with the entire assets of the organization is main-

tainable in a Court. See Green v. Obergfell, 121 F. 2nd

46. (C. A., D. C.); Bacon v. Paradise, 63 N. KE. 2d 571

(Mass.) ; Fitegerald v. Abramson, 89 F. Supp. 504 (D. C.,

§. D. N. Y.).. Compare Rosenberg v. Chicago Title & Trust

Co., 128 F. 2nd 245 (C. A. 7).

The payment of the individual members’ dues becomes

merged into the union’s funds. The individual member

does not have an identifiable segmented share of those

funds. As is set forth in the union constitution which was

made part of the complaint in the action herein, the in-

dividual member shall never individually succeed to those

funds.

That such a relationship established through by-laws of

unincorporated associations is enforceable in the courts is

not a novel doctrine. As early as 1852, in the case of

Goesel, et al. v. Bimeler, et al., 55 U. S. 589, that issue was

passed upon by the Supreme Court. An heir of an original

member of a communal association sued the association

for a partition of its land so that she might obtain that

segment contributed to it by her father. The Court held

that the heir was not entitled to a partition of the land.

Upon submitting to the terms of the association the in-

dividual members and their heirs were bound hy that con-

tractual relationship and the property became a part of

the entity’s possessions rather than an aggregate of in-

dividual interests.

In Low v. Harris, 90 F. 2nd 783 (C. A. 7), involving a con-

troversy arising out of a secession of a local from the

| United Mine Workers of America, the constitution pro-

peas.

ey

Rane ers Pinan “id

14

vided that no local union shall divide its funds among the

members. The Court of Appeals for the 7th Circuit in

confirming the validity of such a contractual relationship

and giving full force and effect to it, stated as follows:

“In Unincorporated Associations and _ Business

Trusts by Wrightington it is said (p. 351)

‘in accordance with this view, it has been held that

title is in the association; that when a group of mem-

bers secede from the association, even though they

are a majority, they lose all interest in its property;

that members have no right to sue for a dissolution

and a distribution of its assets * * *’ ”

The Court then referred to American Jurisprudence,

Vol. 4: |

“ ‘Funds of a Free Mason Lodge * * * cannot on the

dissolution of the Lodge by a vote of the acting mem-

bers be divided among themselves for their private

use.’ ”

An action instituted by a member of a local union to

protect the assets of that organization brings into issue that

member’s right to enjoy the assets in toto and if the assets

to be protected met the requirements as to jurisdictional

amount, the Federal Courts have power to proceed in the

matter, in the presence of diversity of citizenship.

The Courts of the State of Indiana have likewise given

recognition to these same principles of law. Koerner Lodge

#6, K. of P. v. Grand Lodge, K. of P. of Indiana, 146 Ind.

App. 639, 45 N. E. 1103 [See also Harris v. Backman, 85

Pac. 2nd 457: Bacon v. Paradise, 63 N. E. 2nd 571 ( Mass.) ]

III

As well as failing to analyze the plaintiff’s interest in

terms of his status as a member of a trade union, the Court

of Appeals improperly applied the principles normally de-

terminative of jurisdictional amount in equity proceedings.

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This Court has held that in an injunction proceeding the

value of the business, object organization or funds involved

determines jurisdictional amount. Hunt v. N. Y. Stock Ex-

change, 205 U. S. 322; Bitterman v. Louisville & Nashville

R. R., 207 U.S. 205, 225.

In the present case the plaintiff and the local union of

which he is a member would be deprived in toto of the

very object sought to be protected. It is the value of the

right being protected from invasion that remains the ulti-

mate criterion. Hunt v. N. Y. Cotton Exchange, supra;

Packard v. Banton, 264 U. 8S. 140, 142; Board of Trade

of City of Chicago v. Cella Commission Co., 145 F. 28, 205

U. 8. 336. The individual’s potentially recoverable interest

in an action at law is not germane in an injunction pro-

ceeding seeking to protect the invasion of a right in a

matter or object which otherwise would be destroyed. Aing

vy. Kansas City Police Relief Assn., 60 Fed. 2nd 547 (D. C.,

W. D. Mo.).

In Bureau of National Literature v. Sells, 211 F. 379

(D. C., W. D. Wash.), involving infringement of a copy-

right, a similar issue as to jurisdictional amount was in-

volved. The Court of Appeals held:

“Both parties seem to agree that where an injunc-

tion is prayed for, the amount in controversy is the

value of the injunction and this undoubtedly is the

correct rule. 16 Am. & Eng. Ene. of Law, 351; Hagge

v. Kansas City S. Ry. (C. C.), 104 Fed. 391” (p. 383).

(Emphasis supplied.)

It is the petitioner’s contention that the Court in the

case above cited stated the essence of the rule—the amount

of money or value affected as a result of the injunction

between the parties. The defendant in the instant case

was enjoined from the use of approximately $114,000 in

assets. The plaintiff sought to enjoy the benefits deriva-

tive from such a fund and will do so upon the upholding

of the injunction in issue.

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IV

The test of the jurisdictional amount in an injunction

proceeding is measured by its value to either party. The

opinion of the Court below was in conflict with the deci-

sion of the Supreme Court, Court of Appeals of the van-

ous circuits in limiting the test solely to the plaintiff's

interest.

The Court below cited Glenwood Light Co. v. Mutual

Light Co., 239 U. S. 121, in support of its position. Such

citation negates the principle of the Glenwood case, supra,

that it is the object itself which determines jurisdictional

amount. It is either party’s interest, plaintiff or defend-

ant, that may be taken into consideration in this respect.

In Smith v. Adams, 130 U. S. 175, the Court stated:

“Thus a suit to quiet title to parcels of real prop-

erty or to remove a cloud therefrom, by which their

use and enjoyment by the owner are impaired is

brought within the cognizance of the Court under the

Statute only by the value of the property affected.”

In Elliott v. Empire Natural Gas Co., 4 F. 2nd 493

(C. A. 8), the Court of Appeals for the Highth Circuit

commented on this very issue, to wit:

“We think ‘the value of the matter in controversy’

as the term is used in Section 24 of the Judicial Code

means the pecuniary result to either party which the

judgment entered in the case would directly produce

either at once or in the future” (p. 497). (Emphasis

supplied.)

Likewise in Ross v. So. Ry. Co., 20 F. Supp. 556 (D. C.,

W. D.S. C.), the Court stated:

“In such a case it is not the claim of the plaintiff

but the value of the property of which the defendant

may be deprived by the decree sought which is the

test of the jurisdictional amount. Miss. é M. R. Co.

v. Ward, 2 Black 485; Rainey v. Herbert, et al., 55

Ae Bye

17

Fed. 443 (C. A. 3); Washington Market Co. v. Hoff-

man, 101 U. S. 112; Mayor etc. of Baltimore v. Postal

Tel. Co., 62 Fed. 500 (Cir. Ct. D. Md.). By this test the

record establishes the value of the matter in contro-

versy to be well within the federal jurisdictional

amount” (p. 557).*

Similarly, in Ronzio et al. v. Denver & R. G. W. R. Co.,

116 F. 2nd 604, at page 606 (C. A. 10), the Court of

Appeals of the Tenth Circuit stated:

“In determining the amount in controversy we may

look to the object sought to be accomplished by plain-

tiff’s complaint; the test for determining the amount

in controversy is the pecuniary result to either party

which the judgment would directly produce.”

The reason for such a doctrine as above quoted is found

in the fact that a court of equity in an injunction pro-

ceeding does not close its eyes to the whole nature of the

controversy in determining whether or not it has juris-

diction; the Court looks to the real nature of the contro-

versy between the parties not in part but in its full aspects.

(See Stimson v. Dousman, 20 How. 461; Shappiro v. Gold-

berg, 192 U.S. 282.)

V

Where the title to real estate is in issue the criterion for

jurisdictional amc unt is the value of the property, rather

than any parties’ interest therein.

In Peterson v. Scuro, 93 F. 2nd 878 (C. A. 4), the title

to land was brought in issue through an action in eject-

ment. The question of jurisdictional amount arose par-

ticularly on the issue as to whether or not a mortgage

on the land might be offset so as to reduce its value and

*See also Shipe vy. Floral Hills, Inc., 86 F. Supp. 985 (D. C..

W. D. Mo.) ; N. J. Federation of Young Men's & Young Women’s

Hebrew Assns. v. Hoffman, 25 F. Supp. 687 (D. C., M. D. Pa.):

National Lock Co. v. Chicago Regional Labor Board, 8 F. Supp. 820

a i, oe. 2. ER).

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18

therefore remove the cause from federal jurisdiction. The

Court held that where real property is involved, it is not

defendant’s or plaintiff’s interest alone which governs, but

rather the value of the entire property.* See also Smith

v. Adams, supra.

Of the $114,000 involved in the present action $70,000 is

represented by the real estate of the local union. In de-

termining the ultimate issues in this case the Court of neces-

sity must determine title to the real estate, and this prop-

erty alone is sufficient to vest jurisdiction in the federal

court.

Vi

The Court in holding that the amount in controversy was

not sufficient to invoke Federal jurisdiction cited Glenwood

Light Co. v. Mutual Light Co., supra, and Thomson v. Gas-

kill, et al., 315 U. S. 442. Examination of these cases re-

veals that they are not appropriate to the issues involved

herein.

The Court below in citing Glenwood Light Co. v. Mutual

Light Co., supra, unduly narrowed the holding in that case

so as to in effect negate its very purpose. In that case the

sole issue was whether or not the object of controversy

was correctly defined, whether the criterion was the dam-

age caused by the acts of the defendant or the value of

the object which the plaintiff sought to protect. The Court

held that it was the object sought to be protected, the

basis of the litigation, which determined whether or not

there was jurisdictional amount rather than any possible

future speculative damage.

While the Court below particularly refers to one sen-

tence stating the test is the plaintiff’s interest, the follow-

ing sentence clearly indicates the Court did not have in

mind a desire to limit the holding so that the issue was

Z. Hughes Federal Practice, Vol. 1, p. 325; Woodside v. Ciceroni,

93 F. 1 (C. A. 9); Conn. General Life Insurance Co. v. Weldon,

246 F. 265 (D. C., M. D. Ala.).

19

the value of the claim to the plaintiff alone. The Court

went on to assert the well-settled doctrine that the object

of the controversy itself was the criterion stating:

“In Mississippi and Missouri R. R. Co. v. Ward, 2

Black 485, 492, it was said ‘The want of a sufficient

amount of damage having been sustained to give the

federal courts jurisdiction will not defeat the remedy,

as the removal of the obstruction is the matter of con-

troversy and the value of the object must govern’.”

Nowhere in issue in that proceeding was the particular

plaintiff’s interest in the object sought to be protected.

Thomson v. Gaskill ct al., supra, likewise relied on by

the Court of Appeals cites a principle with which there

ean be little controversy, that it is not the amount imme-

diately recoverable at law that determines the jurisdic-

tional question, but rather the ultimate and more basic

result. The Court there found that there was no jurisdic-

tion because the individual plaintiffs, who had aggregated

their claims in an attempt to reach the required sum, indi-

vidually did not have claims amounting to that required

to establish federal jurisdiction. That case is not at all

analogous to the present in that each of the individuals

had a separate identifiable claim which ultimately would

be reduced to a payment of money to each of the individ-

uals severally. While they all had an interest in the fund

which was ultimately to pay them their pension benefits,

the interest was a severable one and the point in issue was

not the enjovment of the benefits of one entity that would

remain as such, but rather income which would heeome

payable ultimately to each of the plaintiffs.

As we have discussed previously, supra, at pages 10-14,

this plaintiff does not have an interest in a particular share

or a percentage share in the local union’s assets. He may

solely enjoy the benefits and protection ef the union's

assets as a particular entity, and he has no individual de-

rivative claim therefrom which at any time shall be re-

duced to a sum of money. The plaintiff in instituting this

20

action did so for the purpose of protecting all of the assets

so that the union itself and its organization and mem-

bership might continue. By so doing he protects his right

to enjoy the benefits derived from the existence of such

a fund.

Similarly, the reliance of the lower Court on Pinel y.

Pinel, 240 U. 8. 594; Gibbs v. Buck, 307 U.S. 66; and Troy

Bank v. Whitehead & Co., 222 U. S. 39, is inapplicable

since these cases like the Thomson case, deal solely with

the problem of aggregation of individual severable claims.

It is significant that the Court in Gibbs v. Buck, supra,

held that the mode of determination of the amount involved

in an equity proceeding is for the trial court. In the pro-

ceedings herein, in the original findings of fact and law

in issuing the original injunction, the trial court found

that the plaintiff had an indivisible interest in the entirety

of the assets of the organization.

Vil

The defendants were in contempt of Court whether or

not the District Court had jurisdiction to issue the perma-

nent injunction. The Court below erred in reversing the

judgment of contempt. :

The defendants, after filing a notice of appeal from the

original permanent injunction order of the District Court

failed to perfect this appeal within the requisite time. There

was no matter on appeal before the Court of Appeals at

the time the contempt was committed. Defendants in their

motion to dismiss the contempt citation and the judgment

of contempt failed to raise the question as to jurisdictional

amount. The sole question as to jurisdiction was whether

or not the Court had the power to issue an injunction under

the terms of the Norris-LaGuardia Act. The lack of jur-

isdictional amount was not asserted by the defendants at

any time until their briefs before the Court of Appeals.

Having failed to appeal from the permanent injunction

are the defendants free to violate an order of the Court?

2]

The holding of the lower Court is in conflict with United

States v. United Mine Workers of America, 330 U.S, 258.

That the original injunction order may not be contested

in the contempt proceedings was affirmed recently in

Maggio v. Zeitz, 3338 U.S. 56. This Court held that the

subject matter in issue in a contempt proceeding is solely

whether or not the accused has committed the acts com-

plained of and in so doing violated a mandate of the court.

See, also, Howat v. State of Kansas, 258 U.S. 181; Fletcher

y. United States, 174 F. 2nd 373 (C. A. 4); Woods v. Fliss,

et al., 168 F. 2nd 612 (C. A. 7); United States ex rel. Bowles

y. Seidman, 154 F. 2nd 228 (C. A. 7).

CONCLUSION

The petitioner prays that a writ of certiorari issue

to the United States Court of Appeals for the Seventh

Cireuit to review its judgment.

Respectfully submitted,

Frank DONNER,

ArtHuR KInoy,

Attorneys for Petitioner.

| Of Counsel:

Davin ScripNER,

MarsHALL PERLIN,

Frank DonNER,

ArtTHor Krinoy.