Petition for Writ of Certiorari — Stoller v. National Labor Relations Board

Supreme Court brief1954

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In The

Supreme Court of The United States

October Term, 1953

No.

— — —

HARVEY STOLLER, d/b/a RICHLAND |

LAUNDRY AND DRY CLEANERS,

vs.

NATIONAL LABOR RELATIONS BOARD,

Respondent.

LAUNDRY AND DRY CLEANERS

PETITION FOR A WRIT OF CERTIORARI

to the United States Court of Appeals

for the Ninth Circuit

804600 10

Page

Petition for a writ of certiorari to the United States Court of Appeals

for the Ninth Circuit

Foriedict

Constitution and Statutes

Statement of the Matter Involved

Appendix A, Decision of Court of Appeals

Appendix B, Decision and Order of Board

Appendix C, Trial Examiner’s Findings

Appendix D, Relevant Statutes

Appendix E, Board’s Standards

Brief in Support of Petition

Preliminary Statement

Specifications of Error

Summary of Argument

Argument

. Arbitrary and Capricious “Standard”

. Improper Review

Failure to Apply This Court’s Decisions

Departure from Usual Course of Judicial Proceedings

Amendment of Act by Board

Petitioner Deprived of Property

(a) No Relationship to Defense

(b) and (c) No Affect on Commerce

De Minimis Rule.

Change in Theory of Jurisdiction

JVC

Table Of Authorities Cited

Cases Page

Addison v. Holly Hill Fruit Products, 322 U.S. 607, 88 I. ed. 1488 _18, 54

Arcade Sunshine Company, Inc., 12 NLRB 259 60

Arrow Linen Service, 73 NLRB 868 60

Asbury Hospital v. Cass County, 326 U.S. 207, 90 L. ed. 6 58

Bailey v. Drexel Furniture Co., 259 US. 20, 66 L. ed. 817 54

eee ee ie

Brewer v. Blougher, 39 U.S. 178, 10 L. ed. 408 54

Capital Laundry and Dry Cleaners, 91 NLRB 923 60

icut Light & Power Co. v. Federal Power Commission,

324 US. 515, 89 L. ed. 1150 66

Dismuke v. United States, 297 U.S. 167, 80 L. ed. 561 59

Electric Storage Battery Co. v. Shimadzu, 307 US. 5, 83 L. ed.

1071 18, 54

309 U.S. 134, 84 L. ed. 656 18, 54

Haleston Drug Stores, Inc. v. NLB. (C. A. 9), 187 F. (2d) 418 67

H. B. Harwell, 55 NLRB 845 60

Helvering v. Credit Alliance Corp., 316 U.S. 107, 86 L. ed. 1307 __19, 55

Helvering v. Sabine Transp. Co., 318 U.S. 306, 87 I. ed. 773 —_19, 55

Horton’s Laundry, 72 NLRB 1129 60

LC. v. Ilindis C. Ry. Co, 215 U.S. 452, 54 L. ed. 205, 74

LC.C. v. Union Pac. Ry. Co., 222 U.S. 541, 36 L. ed. 38 59

Indianapolis Cleaners and Launderers Club,

85 NLRB 1198, 87 NLRB No. 75 w

Iselin v. United States, 270 U.S. 245, 70 L. ed. 566 18, 54

J. Arthur Anderson Laundry, 83 NLRB 1120 , 60

Koshland v. Helvering, 298 U.S. 440, 80 L. ed. 1268 18, 54

Lebanon Laundry & Dry Cleaners, 81 NLRB 4 59, 60

Liberty Laundry Co., 62 NLRB 1235 60

McGrath v. Manufacturers Trust Co., 338 U.S. 241, 94 L. ed. 31 — 2, 73

TABLE OF AUTHORITIES CITED i

Page

Manhattan G. E. Co. v. Commission of Int. Rev.,

297 US. 129, 80 L. ed. 528 18, 54

NLRB. „. Fainblatt, 306 U.S. 601, 83 L. ed. 1014 ___21, 67, 68, ©

NLRB. v. Fansteel M. Corp., 306 U.S. 240, 83 L. ed. 627 , 55, 56

NLRB. v. Gullett Gin Ca, 390 US. 361, 95 L. ed. 337 _55, &

NLRB. v. Jones & Laughlin Steel Corp.

301 U.S. 1, 81 L. ed. 893 20, 21, 65, 68,

NLRB. „. Pittsburgh Steamship Co,, 340 U.S. 498, 95 L. ed. 479 __65, 67

NLRB. „ Prettyman (C. A. 6), 117 F. (20) 786 a

NLRB. „. Shawnee Milling Co. (C. A. 10), 184 F. (2d) 57 , 68

NLRB. . Stoller, 207 F. (2d) 305 2, 23

Peck v. Heurich, 167 U.S. 624, 42 L. ed. 302 73

Progressive Cleaners & Dyers, Inc, 81 NLRB 1299 — 5. 60

Quality & Service Laundry, 39 NLRB 970 60

Red Star Industrial Service, 80 NLRB 847 60

Republic Steel Corp. v. NLRB., 311 US. 7,8 L 46 56

Richland Laundry & Dry Cleaners, 93 NLRB 680 -2, 29

Sam Boorstein, etc., 64 NLRB 645 6

Ec. v. Chenery Corp., 318 U.S. 80, 87 L. ed. 626 6

Star Dyers & Cleaners, 53 NLRB 514 60

United States v. Hoffman, 335 U.S. 77, 92 L. ed. 1830 2,73

United States v. N. E. Rosenblum Truck Lines,

315 US. 50, 86 L. ed. 671 54

Universal Camera Corp. v. NL RI.

340 US. 474, 95 L ed. 456. 19, 63, 64, 65, 67

Virginian R. Co. v. Mullens, 271 U.S. 220, 70 L. ed. 915 __22, 73

White Swan Company, 19 NLRB 1079 6

Yeager v. International Broth. of Teamsters,

39 Wa. (2d) 807, 239 P. (2d) 318 . 61

Yick Wo Hopkins, 118 U.S. 356, 30 L. ed. 220 58

iv TABLE OF AUTHORITIES CITED

Statutes and Constitution Page

Amendment V, U.S. Constitution

2, 13, 15, 46, 50

5 U.S.C.A. Secs. 1001 et seq.

. 13, 62

5 US.C.A. Sec. 1001(c)

5 US.C.A. Sec. 1001 (f)

. 43

5 US. C. A. Sec. 1002

4, 15, 44, 45

5 US.C.A. Sec. 1002)

5 US.C.A. Sec. 1002(b)

5 US.C.A. Sec. 1002(c)

, 14, 15, 45, 62, 67,

5 US.C.A. Sec. 1009(e)

28 U.S.C.A. Sec. 1254(1)

29 US. C. A. Secs. 151 et seq, -

29 US.C.A. Sec. 151

. 12, 37, 4, 3

29 US.C.A. Sec. 152(6)

2, 12, 42

29 US.CC.A. Sec. 152(7)

=F 15

2. 13, 17, 8

29 US.C.A. Sec. 156

29 US.C.A. Sec. 160(a)

2, 13, 43, 53

29 US.C.A. Sec. 160(e)

29 US.C.A. Sec. 160(f)

2, 67

42 USC. A. Secs. 1801 et seq.

Miscellaneous

26 LRRM 50, 51

4, 16, 47, 65

31 Am. Jur., Labor, Sec. 136

31 Am. Jur., Labor, Sec. 139

Vom. Baur, Federal Administrative Law, Vol. 1, 1942 ed. Sec. 401 — 58

In The

Supreme Court of The United States

October Term, 1953

No.

HARVEY STOLLER, d/b/a RICHLAND

LAUNDRY AND DRY CLEANERS,

Petitioner,

vs.

NATIONAL LABOR RELATIONS BOARD,

Respondent.

LAUNDRY AND DRY CLEANERS UNION,

LOCAL 197, AFFILIATED WITH LAUNDRY

WOSEERS INTERNATIONAL UNION, AFL,

Respondent Below,

PETITION FOR A WRIT OF CERTIORARI

to the United States Court of Appeals

for the Ninth Circuit

To the Honorable Earl Warren, Chief Justice of the Supreme Court

of the United States, and to the Honorable Associate Justices

of the Supreme Court of the United States:

The Circuit Court has affirmed a decision and or-

der of the National Labor Relations Board, hereinafter

referred to as “Board”, dated March 6, 1951. The

Board’s ruling (R. 74-86) is reported in 93 NLRB 680

and is attached hereto as Appendix “B”.

Harvey Stoller, an individual doing business under

the name and style of Richland Laundry and Dry

Cleaners, hereinafter called “Petitioner”, respectfully

prays that a writ of certiorari issue to review an order

and decree of enforcement entered on November 9,

1958, by the United States Court of Appeals for the

Ninth Circuit pursuant its decision rendered Septem-

ber 23, 1953. (R. 252-264.) A petition for rehearing was

denied on October 21, 1958. The Court’s opinion (R.

246-251) is reported at 207 F. (2d) 305, and is attached

hereto as Appendix “A”.

JURISDICTION

This case was taken by the Board to the Court

of Appeals for the Ninth Circuit under the provisions

of the National Labor Relations Act, as amended,

29 U.S. C. A. Secs. 151 et seq., 160(e). Petitioner invokes

the jurisdiction of this Court under Section 240(a),

Judicial Code, as amended, 28 U. S. C. A. Sec. 1254(1),

and Section 10 (f) of the National Labor Relations

Act, as amended, 29 U. S. C. A. Sec. 160 (f).

CONSTITUTION AND STATUTES

Involved in this proceeding are Amendment V

to the Constitution of the United States and the fol-

lowing statutes:

(1) The National Labor Relations Act, as

amended, 29 U.S.C. A. Secs. 151 et sed, particularly

Sections 151, 152(6),(7), 156, and 160(a).

e printed transcript of record, and includes the

‘proceedings before the Board and the Court of Appeals.

(2) The Administrative Procedure Act, 5 U.S. C. A.,

Secs. 1001 et seq., particularly Sections 1001(c),(f),

1002(a),(b),(c) and 1009(e).

The Amendment and pertinent statutes are set

forth in Appendix “D”.

— — —

STATEMENT OF THE MATTER INVOLVED

The following developments and proceedings

preceded this petition:

1. On January 25, 1950, Petitioner and Laundry

and Dry Cleaners Union, Local 197, affiliated with

Laundry Workers International Union, A. F. L. (re-

spondent below with Petitioner) entered into an agree-

ment requiring as a condition of employment member-

ship in the Union (R. 158-154).

2. Between April llth and 18th, 1950, Irene

Hallenbeck, Florence Jonson, Noland A. Teal, Donald

Donahue, and Alma Donahue* filed unfair labor

charges with the Board against the Petitioner and

the Union. The Employees claimed that Petitioner

had discharged them for refusing to join the Union.

(R. 3-30.)

3. A consolidated complaint against the Employ-

er and the Union was filed July 19, 1950. It was alleged

that General Electric Company operates and main-

tains the Hanford Atomic Energy Project at Rich-

land, Washington, for the Atomic Energy Commission ;

*Hereinafter termed “Employees.”

that Petitioner is a subcontractor of the General Elec-

tric Company; that Petitioner derives $300,000 annual

income from business with the inhabitants of Richland

and General Electric; that $24,000 of Petitioner’s an-

nual supplies originate without Washington; and that

the operations of Petitioner affect interstate com-

merce within the meaning of National Labor Relations

Act. as amended.* (R. 31-87.)

4. The Board issued “standards” for the exercise

of its jurisdiction on October 5, 1950, including

“[e]stablishments substantially affecting national de-

fense.“

5. Five days later, October 10th, the hearing

upon the Employees’ charges commenced (R. 87).

6. On November 6th, A. Bruce Hunt, the Trial

Examiner, made his Intermediate Report and Recom-

mended Order. He found Petitioner’s laundry to sub-

stantially affect the national defense effort and as-

serted jurisdiction under the Board’s new policy. He

virtually conceded that labor strife causing a cessa-

tion of Petitioner’s operations would not affect the

laundry and dry cleaning business in Richland. (R.

45, 48.) The Trial Examiner’s Findings of Fact are

annexed hereto as Appendix “C”,

The Intermediate Report decides that Petitioner

“Hereinafter termed “Act”, except in a few instances where the full

title appears.

*26 E RR. M. 31. The standards were set forth in a special press

release rather than in the F Register as ordained by the Administra-

tive Procedure Act, 5 U.S.C. A. Sec. 1002. The full context of the

declaration of policy is hereinafter set out at Appendix E“.

and the Union illegally entered a closed shop agree-

ment when the Union did not represent a majority

of the employees and had not been certified by the

Board as official bargaining representative in the

plant of Petitioner; that the Petitioner unlawfully

discharged the five employees for non-membership

in the Union, all in violation of the Act’s Section 8(a),

subsections 1, 2 and 3. (R. 42-70.)

7. The Employer and the Union jointly filed

exceptions to certain findings and rulings of the Trial

Examiner on November 27th. The exceptions pri-

marily challenged the jurisdiction of the Board, con-

tending, inter alia, that Petitioner was not engaged

in interstate commerce within the meaning and in-

tendment of the Act. (R. 70-73.)

8. March 6, 1951, the Board issued its Decision

and Order. It held that the purpose of the Act would

be best effectuated by the exercise of jurisdiction be-

cause of Petitioner’s “relationship to the national de-

fense effort,” and “any employer doing business on

an atomic energy reservation * warrant[s]

the full exercise of the Board’s power.” (Appendix

B; R. 74-87.)

9. The Board petitioned the Court of Appeals

for enforcement of its Decision and Order on June

30, 1952 (R. 204-217).

10. On August 2nd, the Petitioner filed his

Answer and Cross-Petition (R. 220-228).

11. August 8th, the Union also answered and

cross-petitioned (R. 230-240).

12. The Court of Appeals, on September 23, 1958,

entered its opinion directing enforcement of the

Board’s Order. The Court held that the alleged unfair

labor practices. would affect Petitioner’s interstate

purchases, though this is not in accord with the Trial

Examiner’s holding that labor strife at Petitioner’s

plant would not affect the laundry and dry cleaning

business in Richland. Petitioner’s other arguments

were either ignored or summarily dismissed. (Ap-

pendix A; R. 45, 48, 246-251.)

13. On November 9, 1958, the Decree here sought

to be reviewed was entered. The Decree enforces the

Board’s Order directing the reinstatement of, and

payment of back wages to, the Employees. (R. 252-

264.)

14. Early December, 1958, Petitioner was given

notice that the Union is also petitioning this Court to

review the Court of Appeal’s Order and Decision here-

in.

FACTS

Additional material facts shown by the record

and necessary to the Court’s proper consideration of

this petition are as follows:

The Atomic Energy Commission owns an area

within the State of Washington commonly know as

the Hanford Engineering Project, and which is de-

voted to the development of atomic energy. The Com-

mission also owns the adjacent City of Richland, in-

cluding the buildings as well as the real property.“

Richland is a municipality where many of the project’s

employees reside. (R. 45-46, 95-102, 140-141).

The General Electric Company operates Hanford

and Richland as an agent of the Commission. General

Electric owns none of the equipment or personalty

at the reservation, and it receives no profit for its

services. (R. 120, 197-199.)

The Petitioner leases a laundry and dry cleaning

establishment at Richland from General Electric.“

Until August, 1950, the consideration of the lease was

$18,000 per year plus all profits exceeding 6% of Peti-

tioner’s gross income. (R. 95-100, 104-105.) Subse-

quent to August, 1950, a five-year agreement was

reached whereby the Petitioner pays a flat rental of

$560 per month and retains all profits. (R. 103-104,

181).”

At the time of the alleged unfair labor practices,

March, 1950 (R. 57), the Petitioner was a lessee

rather than a sub-contractor of the General Electric

5See 42 U.S.C.A. Secs. 1801 et seq. The record is not clear whether

hog” “ap or gta earn gen besttproana mamrcse ice teens

sion (R. 101-103).

“Includes the building and equipment. However, the Petitioner has

his own “specialty equipment” and trucks (R. 102).

Blectric (k. 103, 131).

Company.“ He had eighty-five employees, all hired

by his own concern (R. 121, 125). General Electric

had no voice in the salaries paid by the Petitioner nor

in the prices he charged for his services (R. 136). In

some years the operating costs consumed all Petition-

er’s receipts. In some years he did not make 6% of the

gross income, and General Electric received only the

base consideration. (R. 104-105, 109.)

During the fiscal year ending August, 1950, the

Petitioner’s business with residents of Richland and

nearby areas grossed $200,000.*° Laundry work per-

formed for Dresswell, a local competitor, brought in

another $4,500 (R. 112-118). The remainder of his

receipts were realized from the following sources:

United States Army—$3,600,2* General Electric—

819,600 the Desert Inn Hotel—$13,500%* and the

Mart—$578"* (R. 115-120.) All of this business is

entirely localized to the Richland trade area which

encompasses a radius of less than 100 miles, and none

originates outside of the State of Washington (R.

45, 112-120, 139).

The Trial Examiner held the Petitioner to be a “sub-contractor of

General Electric” (R. 47), but the Board, as did the Circuit Court,

found him to be operating under a lease or license. (R. 75, Appendix A.)

„Employees are put to work as soon as hired. However, regulations

require new employees of every Richland firm to report to General

Electric for fingerprinting and an F. B. I. clearance (R. 125, 137-138):

10The Petitioner’s operations were not confined to Richland (R. 139).

Non commercial business (R. 143).

Work started June 1, 1950 (R. 124, 125), several months after

the occurrence of the unfair practices.

28Income from the laundering and dry cleaning of the uniforms of

Richland patrolmen and firemen (R. 115-116). This business is secured

by bid (R. 133). The patrolmen are deputized by the county. (R. 199).

14A Seattie corporation (R 117-118).

15A Richland cafeteria (R. 117-118).

Competing with the Petitioner for the commercial

and residential laundry and dry cleaning work of

Richland are at least a dozen other firms“ which

solicit in the entire Richland area (R. 132-133, 134).

Ninety per cent of the commercial business (as distin-

guished from laundry and dry cleaning services for

private individuals) is done by a competitor (R. 135).

In addition, General Electric itself operates two

laundries, and a private concern maintains in Rich-

land a self-service laundry. (R. 134-135, 141-142.)

It seems safe to say that Petitioner’s operations no

more than remotely affect the national defense effort,

much less interstate commerce.

General Electric also leases to the Petitioner

eleven houses, one of which he himself occupies, and

the remainder of which are sublet to some of his

employees (R. 121). This arrangement has no bear-

ing on the lease of the laundry facilities, being on

a monthly basis with the Petitioner free to return

the houses anytime he so desires (R. 108, 127-128).

The Petitioner purchases his supplies of soap,

cotton goods, paper, cleaning solvents and paper

hangers from Spokane, Portland, and Seattle. When

asked what percentage of these materials originated

10 Dresswell (R. 112-113); Sudden Service, which does the Army’s

dry cleaning (R. 125, 133); Jerry’s (R. 132); an unnamed Wenatchee

laundry (Re (R. 133); Pantorium Dye Works, in which Harvey Stoller is

an officer and stockholder (R. 114-115); an unnamed Connell concern

- 132-133); three unnamed Kennewick ee and dry cleaners

apparently being uncertain. Upon being led to be-

lieve by the Trial Examiner that this feature was

without importance, the Petitioner (without counsel)

hazarded a guess of approximately “half”. (R. 44,

109-112.) *

the

set

Full

Upon these facts the Trial Examiner, and later

the colloquy is

the Board, determined the Petitioner to be a vital

cog in the defense program and amenable to the

(Appendix A),

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And the Court paid no heed to Petitioner’s contention

that, conceding the Board’s power, arguendo, a rule

that all employers situate on atomic energy reserva-

tions shall be held subject to the Act is arbitrary,

capricious and wanting in descretion.

QUESTIONS PRESENTED

In the enactment of the National Labor Rela-

tions Act, as amended, the Congress of the United

States said:

“It is declared to be the policy of the United

States to eliminate the causes of certain. sub-

stantial obstructions [labor strikes, strife and

unrest] to the free flow of commerce and to miti-

te and eliminate these obstructions when they

ave occurred * * *.”

29 U. S. C. A., Sec. 151

“The term ‘commerce’ means trade, traffic, com-

merce, aber near or communication amon

the several or between the District o

Columbia or any Territory of the United States

and any State or other Territory, or beween any

Sar re gr and any State, Territory, or the

Dist of Columbia, or within the District of

Columbia or any Territory, or between points in

the same State but through any other State or

any Territory or the District of Columbia or any

foreign country.”

29 U. S. C. A., Sec. 152(6)

“The term ‘affecting commerce’ means in com-

merce, or burdening or obstructing commerce or

the free flow of commerce, or having led or tend-

eee ispute ening or ob-

commerce or the free flow of com-

merce.”

209 U. S. C. A., Sec. 152(7)

The Board shall have authority from time to

time to make, amend, and rescind * * * such rules

and regulations as may be necessary to carry out

the provisions of this subchapter.”

29 U. S. C. A., Sec. 156

The we ug is re ee as hereinafter pro-

vided, prevent any person engaging

in any unfair labor practice affecting com-

merce.* * *”

29 U. S. C. A., Sec. 160(a)

The Board ruled in the instant case that the

Act is best served if applied to employers associated

with the national defense effort and that “any employ-

er doing business on * * * an atomic energy reserva-

tion, whether or not his business is essential to the

inhabitants of the community, is nonetheless so

identified with the Government’s national defense

program as to warrant the full exercise of the Board’s

power to assert the jurisdiction conferred on it by

the Act.” (R. 75, Appendix B.) The Court of Ap-

peals decided that Petitioner’s out-of-state purchases

amounting to but $12,000 a year are not so insignifi-

cant to come within the de minimis rule, and that the

Courts have no right to pass on the propriety of the

Board’s assumption of jurisdiction. (Appendix A; R.

246-251.) In view of the express language of the stat-

utes above quoted, the Fifth Amendment, and the

Administrative Procedure Act, 5 U.S. C. A., Secs. 1001

wg ea aia

follows:

“So far as necessary to decision and where pre-

sented the reviewing court shall decide all rele-

rr constitutional and

„ power, ege, or

immunity; (3) in excess of statutory 3

authority, or limitations *; 655 *

f by substantial evidence * * In making

going determinations the court shall review the

whole record * * *.”

the decision of the Board and the affirmance thereof

by the Court of Appeals raise the following questions:

1. Whether the Board has the right to adopt an

arbitrary “standard” for the assumption of jurisdic-

tion under the Act, such as, “Establishments sub-

stantially affecting national defense”?

2. If such a “standard” is valid, can the Board

assume jurisdiction over a business it finds to be “en-

tirely localized” to Richland, Washington (R. 45),

by the mere expedient of applying the “standard”?

3. I such a “standard” is valid and can be applied

by the Board, should the Court of Appeals, upon review,

decline to rule upon the substantialness of Petitioner’s

/ relationship to national defense in view of the Admin-

istrative Procedure Act, especially 5 U. SC. A. Sec.

1009(e) above quoted?

4. Whether a “standard” announced solely in a

special press release should be upheld when the Admini-

strative Procedure Act, 5 U. S. C. A., Sec. 1002, re-

9 ³˙ Ao ee

in the Federal Register?

—

5. If the answer to question (1) above be in the

affirmative, should the Board, in view of the Fifth

Amendment, be permitted to direct Petitioner to pay

back wages to employees discharged prior to the adop-

tion of the “standard” upon which the Board predicates

jurisdiction over Petitioner?

6. Has the Board exercised the discretion re-

quired by the “due process” clause of the Fifth Amend-

ment when it holds that “any employer doing business

on * * * an atomic energy * * * warrant{s] the full

exercise of the Board’s power to assert the juris-

diction conferred on it by the Act”? (Emphasis sup-

plied.)

* f.... nae ans,

tioned the Board’s assumption of jurisdiction over

Petitioner upon the relatively small amount of his in-

terstate purchases, after the Trial Examiner and Board 9

primarily based jurisdiction upon Petitioner’s relation-

ship to national defense.

8. Whether the Court of Appeals erred in hold-

ing that Petitioner’s out-of-state purchases amounting

to $12,000 in 1950, which approximated 1/22nd of his

total business, did not fall within the maxim de

minimis non curat lex when admittedly the remainder

of his business is strictly local?

9. Even if the interstate shipments to Petitioner

fall without the de minimis rule, did the Court of

Appeals decide correctly that the Act is applicable

in view of the finding of the Trial Examiner and

the Board that Petitioner’s business is local?

10. ‘ Whether the Court of Appeal’s affirmance of

the Board’s jurisdiction over Petitioner on the basis

of his interstate purchases can stand after Petitioner

was led to believe at the hearing before the Trial

Examiner that such purchases had no bearing on the

ease? (R. 109-112.)

REASONS FOR GRANTING WRIT

1. The Circuit Court of Appeals Decided Important

Questions of Federal Law Which Have Not Been,

But Should Be, Settled by This Court.

On October 5, 1950, the Board announced for the

first time specific “standards” governing the exercise

of its jurisdiction. Although the Board reiterated its

policy of not taking cognizance of businesses primarily

local, the Board declared it would take jurisdiction

over “[e]stablishments affecting national defense.”

(26 L. R. R. M. 50, 51, Appendix D.) In this case the

court of Appeals affirmed the Board’s assumption of

| jurisdiction over Petitioner’s localized laundry and dry

cleaning operation because of its identification “with

the Government’s national defense program.” (Ap-

pendix A, Footnote 4; R. 250.) The following questions

of first impression and needing determination by this

Court are thereby raised:

(a) Whether Congress in enacting the National

Labor Relations Act, as amended, contemplated super-

vision of the country’s defense effort by the Board?

(29 U.S.C.A., Sec. 151 specifically declares the pur-

poses of the Act to be elimination of labor strife

affecting interstate commerce.)

(b) Whether 29 U.S.C.A., Sec. 156 empowers

the Board to make discriminatory rules and regula-

tions? (It is admitted that the Board would not assert

jurisdiction over an employer conducting a business

identical to Petitioner’s save for location on an atomic

energy reservation. R. 45.) And,

question, will the Fifth Amendment permit the retro-

active application thereof to Petitioner’s damage? (The

contract between the Union and Petitioner is valid

under State Law, Yeager v. International Broth. of

Teamsters, 39 Wn. (2d) 807, 239 P. (2d) 318, and

the discharge of the Employees antedated the “stand-

ard” by six months. Yet the Board’s order, affirmed

by the Court of Appeals, mandates that the Employees

must be made whole for losses of pay.)

2. The Decision of the Court of Appeals Sanctions

Legislation by the Board and is Thereby in Con-

flict with Decisions of This Court.

By the adoption of the rule that it will assert

jurisdiction over labor disputes in “[e]stablishments

substantially affecting national defense”, whether the

business is essentially interstate or intrastate, the

Board has, in effect, amended the Act. The Court of Ap-

peals, in giving its approval to this act of legislation,

decided important questions of Federal law in con-

flict with applicable decisions of this Court.

“Legislation introducing a new m is at best

empirical, and not infrequently instration re-

gaps or inadequacies of one sort or another

that may call for amendatory legislation. But it is

no warrant for extending a statute that experience

may disclose that it should have been made more

comprehensive.”

Addison v. Holly Hill Fruit Products, 322

U.S. 607, 617, 88 L. ed. 1488.

See also:

Iselin v. United States, 270 U.S. 245, 70 L.

ed. 566;

Manhattan G. E. Co. v. Commissioner of Int.

Rev., 297 U.S. 129, 80 L. ed. 528;

Koshland v. Helvering, 298 U.S. 441, 80 L.

ed. 1268;

Storage Battery Co. v. Shimadzu, 307

U.S. 5, 88 L. ed. 1071;

Helvering v. Credit Alliance Corp., 316 U.S.

107, 86 L. ed. 1807;

Helvering v. Sabine Transp. Co., 318 U. S. 306,

87 L. ed. 773.

3. The Failure of the Court of Appeals to Review

the Case in Accordance with Statutory Standards

Presents a Question Which Should be Resolved

by this Court.

The Administrative Procedure Act and the Labor

Management Relations Act, 1947, which amends the

National Labor Relations Act, require that the Court

review the whole record or such portions thereof as

may be cited by any party. The reviewing Court

should set aside administrative action unsupported by

substantial evidence, considering the whole record.

Universal Camera Corp. v. N. L. R. B., 340 U.S. 474,

95 L. ed. 456. The Court of Appeals did not, in the

instant case, comply with the cited statutes and de-

cision in three respects:

(a) The Court completely ignored Petitioner's

contention that there is no basis in the record for the

Board's finding that Petitioner's laundry and dry

cleaning plant substantially affects national defense.

(Appendix A.) This particular finding is of the utmost

importance because upon it the Board asserted juris-

diction. (R. 45, 75, 110-111.)

(b) ‘The Court of Appeals concluded that Peti-

tioner’s interstate purchases and alleged unfair labor

practices have a close, intimate and substantial rela-

tion to commerce when such conclusion is not borne

out by the record, and is only an inference without

support in the findings of the Trial Examiner and the

Board. (Appendices A and B; R. 87-199, 246-251, par-

ticularly 45-48, 110-111.)

diction herein, the lower Court by-passed and gave

no weight to the Trial Examiner’s and Board’s find-

ing that Petitioner’s business is local, or intrastate,

which finding was not challenged and is fully substan-

tiated by the record. (Appendix A; R. 45, 74-75.)

4. The Decision of the Court of Appeals Herein Fails

to Apply this Court’s Decisions in the Jones &

Laughlin Steel and Fainblatt Cases.

The Court of Appeals decided that the Board’s

jurisdiction obtains on the showing of labor trouble

and the presence of incidence of interstate commerce.

(Appendix A.) The Court failed to consider this Court’s

decision in N.L.R.B. v. Jones & Laughlin Steel Corp.,

301 U.S. 1, 81 L. ed. 898, that the Board’s jurisdiction

inheres upon the proof of: (a) unfair labor practices,

(b) interstate commerce, and (c) the former affects,

or might well affect, the latter.

The Court further erred in failing to apply the

maxim de minimis non curat lex to Petitioner’s out-

of-state purchases amounting to $12,000 annually.

“* * * The authority of the federal government

may not be to such an extreme as to destroy

the n, which the commerce clause itself

establishes, between commerce ‘among the several

States’ and the internal concerns of a state, The

distinction between what is national and what is

local in the activities of commerce is vital to the

maintenance of our federal system. * * *”

% * The grant of authority to the Board does

not purport to extend to the relationship between

all industrial employees and employers. Its terms

do not impose collective bargaining upon all in-

dustry regardless of effects upon interstate or

foreign commerce. It purports to reach only what

may be deemed to burden or obstruct that com-

merce =

N. L. R. B. v. Jones & Laughlin Steel Corp.,

301 U. S. 1, 30, 31, 81 L. ed. 893

Se ee ee

By its decision in this case the Court of Appeals

has approved the intrusion into the internal af-

fairs of the State of Washington by an agency of

the Federal Government. The Court took another long

step toward destroying the “distinction between what

is national and what is local in the activities of com-

merce”, which distinction this Court has held “vital

to the maintenance of our federal system.”

N.L.R.B. v. Jones & Laughlin Steel Corp., 301

U. S., 81 L. ed. 893

5. The Court of Appeals Departed from the Ace-

cepted and Usual Course of Judicial Proceedings.

At all times the General Counsel of the Board and

the Trial Examiner took the primary position that

Petitioner’s business relationship to the General Elec-

tric Company and the national defense effort consti-

tuted commerce within the meaning of the Act.“ The

Petitioner, who was not then represented by Counsel,

was led to believe the jurisdictional issue in dispute |

was whether he was a sub-contractor of General Elec- ©

tric. Consequently, Petitioner offered proof on that

issue only, (R. 44, 129-148, 197-199). Not until the

Board sought enforcement of its order by the Court

of Appeals was Petitioner confronted with the argu- |

ment that his interstate purchases vested the Board

with jurisdiction over the labor activities in question.

The Court of Appeals should not have allowed the

Board to shift its theory of jurisdiction to the prej-

udice of the Petitioner at that late stage of the pro-

ceedings. |

See: McGrath v. Manufacturers Trust Co,

338 U.S, 241, 94 L. ed. 31 g

United States v. Hoffman, 885 U.S. 77, 92

L. ed. 1830 ö

Virginian R. Co. v. Mullens, 271 U. S. 220, 70 ö

L. ed. 915 |

WHEREFORE, Petitioner prays that a writ of |

certiorari issue to review the judgment of the United

States Court of Appeals for the Ninth Circuit. 4

Dated this 6th day of January, 1954.

: Respectfully submitted,

RICHARD S. MUNTER

Attorney for Petitioner

CAMERON SHERWOOD and

ROBERT A. COMFORT

(Of Counsel)

]

18See stipulation as to “commerce” facts, R. 197-199.

; 28

a APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

| NATIONAL LABOR RELATIONS

BOARD, Petitioner,

. vs. No. 18,445

HARVEY STOLLER and LAUNDRY ( Y 23,1968

& DRY CLEANERS UNION,

LOCAL 197, Respondents.

Petition for Enforcement of an Order of the

| National Labor Relations Board.

_ The National Labor Relations Board has peti-

tioned this court for a decree enforcing an order issued

by the Board on March 6, 1951," against respondents,

Harvey Stoller (an individual doing business as Rich-

and Laundry & Dry Cleaners) and Laundry & Dry

leaners Union, Local 197 (a labor organization), in a

proceeding under Sec. 10 of the National Labor Rela-

fions Act, 29 U.S. C. A. Sec. 160. Answering the peti-

tion, respondents pray that the order be set aside.

—— — — —

2⁴

At all pertinent times, respondent Stoller operated

a laundry and dry-cleaning establishment at Rich-

land, Washington, on an atomic energy reservation

of the United States—a reservation operated by the

Atomic Energy Commission as part of the national

defense program—respondent Stoller being a lessee

of the Commission. Irene Hallenbeck, Florence Jon-

son, Noland Teal, Donald Donahue and Alma Donahue

were employees of respondent Stoller.

On January 25, 1950, respondent Stoller made an

agreement with respondent Union to require as a

condition of employment membership in respondent

Union. Respondent Union was not the representa-

tive of respondent Stoller’s employees as provided in

Sec. 9(a) of the Act, 29 U.S.C.A. Sec. 159(a). How-

ever, in March, 1950, at the request of respondent

Union, respondent Stoller discharged Hallenbeck, Jon-

son, Teal and the Donahues because they were not,

and refused to become, members of respondent Union,

and thereafter, for the same reason, respondent Stoller

refused to reinstate them. Thus, on and after January

25, 1950, respondent Stoller engaged in unfair labor

practices listed in Sec. 8(a) of the Act, 29 U.S. C. A.

158(a), and respondent Union engaged in unfair labor

practices listed in Sec. 8(b) of the Act, 29 U.S. C. A.

158(b).

On charges filed by Hallenbeck, Jonson, Teal and

the Donahues in April, 1950, and an amended charge

filed by Hallenbeck on July 17, 1950, a duly designated

/ agent of the Board issued a complaint against respond-

ents on July 19, 1950. Respondents answered the com-

plaint, and a hearing was had and evidence presented

before a trial examiner. The trial examiner’s findings

of fact, conclusions of law and recommendations were

stated in an intermediate report which, together with

à recommended order, he issued and caused to be

served on the parties and filed with the Board. Re-

spondents filed exceptions, and the Board, on March

6, 1951, rendered a decision and issued the order here

sought to be enforced. Thereby respondents were re-

quired to cease and desist from their unfair labor

practices and to take certain affirmative action which

the Board found would effectuate the policies of the

Act.

: First. Respondents contend that the Board had

no jurisdiction to issue the order.

Whether the Board had such jurisdiction depends

on whether respondents’ unfair labor practices were

unfair labor practices affecting commerce.“ See Sec.

10(a), (b) and (e) of the Act, 29 U.S. C. A. Sec. 160(a),

(b) and (c).

As indicated above, respondent Stoller operated

a laundry and dry-cleaning establishment in the State

of Washington. However, the trial examiner found

that during respondent Stoller’s fiscal year ending

in August, 1950, he purchased supplies, including soap,

cleaning solvents and paper, amounting to approxi-

GTC

29 UC A. Sec. 152(7). 8 is

mately $24,000 in value, about one-half of which was

shipped to him from points outside the State of Wash-

ington, and that respondents’ unfair labor practices

had a close, intimate and substantial relation to com-

merce and tended to lead to labor disputes burdening

and obstructing commerce and the free flow of com-

merce. These findings were adopted by the Board.

They are supported by substantial evidence on the

record considered as a whole and hence are conclusive.

See Sec. 10(e) of the Act, 29 U.S.C.A. Sec. 160(e).

The trial examiner and the Board concluded, and

we agree, that respondents’ unfair labor practices

were unfair labor practices affecting commerce. See

Sec. 2(6) and (7) of the Act, 29 U.S.C.A. Sec. 152(6)

and (7). The commerce affected — approximately

$12,000 a year—was not so insignificant as to come

within the rule de minimis non curat lex.

The Board, therefore, had jurisdiction to issue

the order.

Second. Respondents contend that, if the Board

had jurisdiction to issue the order, such jurisdiction

should not have been exercised.

The general rule is that, where the Board has

_ jurisdiction, as it had in this case, whether such juris-

diction should be exercised is for the Board, not the

courts, to determine.“ In this case, the Board deter-

mined that its jurisdiction should be exercised because

respondent was doing business on an atomic energy

NLRB. „ Townsend, 9 Cir, 185 F. 2d 378; Haleston

Stores, 9 Cir, 187 F. 2d 418; Katz v. NLRB. 9 Cir, 196 F. 2d 411.

reservation.* We cannot say that the Board was wrong

in so determining.

In support of their contention that the Board’s

jurisdiction should not have been exercised in this

case, respondents cite N.L.R.B. v. Guy F. Atkinson

Co., 9 Cir., 195 F. 2d 141, wherein this court refused

to enforce an order issued by the Board on June 8, 1950,

against an employer (the Company) in a proceeding

under Sec. 10 of the Act, 29 U.S. C. A. Sec. 160—an

order requiring the Company to cease and desist from

certain unfair labor practices and to take certain af-

firmative action. The Company was engaged in the

construction industry. Its unfair labor practices oc-

curred in 1947, at a time when the Board, pursuant

to a long established policy, was refusing to exercise

jurisdiction over the construction industry. The policy

of refusing to exercise such jurisdiction was consist-

ently followed by the Board from the Board’s creation

in 1985 until after the Company’s unfair labor prac-

tices occurred. The Company, in engaging in such

practices, relied on that policy. Thereafter the Board

adopted a new policy and, pursuant thereto, proceeded

against the Company with the result indicated above.

On the facts shown, this court held that the Board’s

action in the Atkinson case was arbitrary, capricious

and an abuse of discretion within the meaning of Sec.

eee areas oh a

The facts of the instant case differ from those

of the Atkinson case in many respects, including the

following: Respondent Stoller was not engaged in

the construction industry, but was engaged in the

laundry and dry-cleaning industry. The Board did

not, at the time respondent’s unfair labor practices

occurred or at any time prior thereto, have any policy

of refusing to exercise jurisdiction over the laundry

and dry-cleaning industry. Instead, the Board frequent-

ly exercised such jurisdiction.® So far as the record

shows, respondents, in engaging in their unfair labor

practices, did not rely on any policy of the Board.

Obviously, the Atkinson case is not in point here,

nor is there here any basis for holding that the Board’s

action in the instant case was arbitrary, capricious or

an abuse of discretion.

The Board’s order will be enforced.

(Endorsed:) Opinion. Filed Sep. 23, 1953. Paul

P. O'Brien, Clerk. f

APPENDIX B

United States of America

Before the National Labor Relations Board

Cases Nos. 19-CA-302, 19-CA-308, 19-CA-805, 19-CA-

307, 19-CA-308, 19-CB-108, 19-CB-104, 19-CB-106,

19-CB-110, and 19-CB-111

In the Matter of:

HARVEY STOLLER d/b/a RICHLAND

LAUNDRY & DRY CLEANERS,

and

LAUNDRY AND DRY CLEANERS UNION, LOCAL

197, affiliated With LAUNDRY WORKERS IN-

TERNATIONAL UNION, and IRENE

HALLENBECK, FLORENCE JONSON, NO-

LAND TEAL, DONALD DONAHUE, ALMA

DONAHUE.

DECISION AND ORDER

On November 6, 1950, Trial Examiner A. Bruce

Hunt issued his Intermediate Report in the above-

entitled proceeding, finding that the Respondents had

engaged in and were engaging in certain unfair labor

practices, and recommending that they cease and de-

sist therefrom and take certain affirmative action,

as set forth in the copy of the Intermediate Report at-

tached hereto. Thereafter, the Respondent filed joint

exceptions to the Intermediate Report and a sup-

The Board has reviewed the ruling made by the

Trial Examiner at the hearing and finds that no

prejudicial error was committed. The rulings are here-

by affirmed. The Board has considered the Inter-

mediate Report, the Respondents’ exceptions and brief,

and the entire record in the case, and hereby adopts

the findings, conclusions, and recommendations of

the Trial Examiner, except as noted below:

1. The Board agrees with the Trial Examiner

that the Respondent Employer’s operations affect com-

merce within the meaning of Section of the Act,

and that the Board should exercise jurisdiction in this

case. Our decision that it would best effectuate the

purposes of the Act to exercise jurisdiction here is

based solely on the Respondent Employer’s relation-

ship to the national defense effort, arising from his

license to do business on a United States reservation

devoted to atomic energy. The Board does not rely

on the Trial Examiner’s finding of fact that the Re-

spondent Employer’s business is an essential element

in the life of a community which has been established

as part of the national defense program. In the

Board’s opinion, any employer doing business on such

an atomic energy reservation, whether or not his

business is absolutely essential to the inhabitants of

the community, is nonetheless so identified with the

Government’s national defense program as to warrant

the full exercise of the Board’s power to assert the

jurisdiction conferred on it by the Act.

2. As no exceptions have been filed to the Trial

Examiner’s findings of fact on the merits of the

case, we adopt them without discussion.

Order

Upon the entire record in the case, and pur-

suant to Section 10 (c) of the National Labor Rela-

tions Act, the National Labor Relations Board hereby

orders that:

1. The Respondent Employer, Harvey Stoller, |

d/b/a Richland Laundry & Dry Cleaners, Richland,

Washington, and his agents, successors, and assigns,

shall:

(a) Cease and desist from:

(1) Recognizing Laundry and Dry Cleaners

Union, Local 197, affiliated with Laundry Workers

International Union, AFL, or any successor thereto,

as the representative of any of his employees for

the purpose of dealing with the Respondent Employer

concerning grievances, labor disputes, wages, rates

of pay, hours of employment, or other conditions of

employment, unless and until said labor organizations

shall have been certified by the National Labor Rela-

tions Board;

(2) Performing or giving effect to his contract

of January 25, 1950, with Laundry and Dry Cleaners

Union, Local 197, affiliated with Laundry Workers

International Union, AFL, or to any modification, ex-

tension, supplement, or renewal thereof, or to any

other contract, agreement or understanding entered

into with said labor organization relating to griev-

ances labor disputes, wages, rates of pay, hours of

employment, or other conditions of employment, un-

less and until said labor organization shall have been

certified by the National Labor Relations Board;

(3) Entering into, renewing, or giving effect to

any agreement with Laundry and Dry Cleaners Union,

Local 197, affiliated with Laundry Workers Interna-

tional Union, AFL, or any other labor organization,

which requires its employees to join, or maintain their

membership in such labor organization as a condition

of employment, unless such agreement has been

authorized as provided by the National Labor Rela-

tions Act, as amended;

(4) Encouraging membership in Laundry and

Dry Cleaners Union, Local 197, affiliated with Laundry

Workers International Union, AFL, or in any other

labor organization of his employees, by discharging

any of his employees or discriminating in any other

manner in regard to their hire or tenure of employ-

ment, or any terms or conditions of their employment,

except to the extent authorized by Section 8 (a) (3)

of the Act;

(5) In any like or related manner interfering

with, restraining, or coercing its employees in the

exercise of their right to engage in or to refrain

from engaging in activities guaranteed them in Sec-

tion 7 of the Act, except to the extent that such right

may be affected by an agreement requiring member-

ship in a labor organization as a condition of employ-

ment as authorized by Section 8 (a) (3) of the Act.

(b) Take the following affirmative action, which the

Board finds will effectuate the policies of the

Act.

(1) Withdraw and withhold all recognition from

Laundry and Dry Cleaners Union, Local 197, affiliated

with Laundry Workers International Union, AFL, as

the representative of any of the Respondent Employ-

ers employees for the purpose of dealing with the

Respondent Employer concerning grievances, labor

disputes, wages, rates of pay, hours of employment,

or other conditions of employment, unless and until

e ave: Ie: GE ty de

National Labor Relations Board.

(2) Offer to Irene Hallenbeck, Florence Jonson,

Noland Teal, Donald Donahue, and Alma Donahue

immediate and full reinstatement to their former or

substantially equivalent positions, without prejudice

to their seniority or other rights and privileges.

(3) Upon request, make available to the National

Labor Relations Board, or its agents, for examina-

tion and copying all payroll records, social security

payment records, time cards, personnel records and

reports, and all other records necessary for a deter-

mination of the amounts of back pay due and the

rights of reinstatement under the terms set out here-

in.

(4) Post at his office and place of business in

5 Richland, Washington, copies of the notice attached

hereto as Appendix A.’ Copies of said notice, to be

furnished by the Regional Director for the Nineteenth

Region, shall, after being duly signed by the Respond-

ent Employer be posted by him immediately upon

receipt thereof, and maintained by him for at least

sixty (60) consecutive days thereafter, in conspicuous

places, including all places where notices to employees

by this Respondent to ensure that said notices are

not altered, defaced, or covered by any other material.

(5) Notify the Regional Director for the Nine-

teenth Region, in writing, within ten (10) days from

the date of this Order, what steps the Respondent

Employer has taken to comply herewith.

2. The Respondent Union, Laundry and Dry

Cleaners Union, Local 197, affiliated with Laundry

Workers International Union, AFL, its officers, repre-

sentatives, and agents, shall:

(a) Cease and desist from:

(1) Causing, or attempting to cause, Harvey

Stoller, d/b/a Richland Laundry & Dry Cleaners, his

& Dry Cleaners, his agents, successors or assigns,

in the: exercise of their rights to engage in, or to

refrain from engaging in, any or all of the concerted

activities guaranteed in Section 7 of the Act, except

to the extent that such rights may be affected by

an agreement requiring membership in a labor organi-

zation as a condition of employment as authorized

by Section 8 (a) (3) of the Act.

(b) Take the following affirmative action, which

the Board finds will effectuate the policies of

the Act:

(1) Immediately notify, in writing, Irene Hall-

enbeck, Florence Jonson, Noland Teal, Donald Dona-

hue, and Alma Donahue, at their last known places

of residence, and Harvey Stoller, d/b/a Richland

Laundry & Dry Cleaners, Richland, Washington, that

it withdraws its objections to the employment of the

complainants by the Respondent Employer and that it

requests said employer to offer them immediate and

full reinstatement to their former or substantially

equivalent positions, without prejudice to their senior-

ity or other rights and privileges.

(2) Post in conspicuous places in its business

offices, and wherever else notices to its members are

to as Appendix B.“ Copies of said notice, to be furnished

by the Regional Director for the Nineteenth Region,

shall after being duly signed by an official representa-

ac anaemia a ene 8

®See footnote 1.

mediately upon receipt thereof and maintained by it

fora period of at least sixty (60) days thereafter.

Reasonable steps shall be taken by it to ensure that

said notices are not altered, defaced, or covered by

any other material.

(3) Mail to the Regional Director for the Nine-

teenth Region signed copies of the notice attached

hereto as Appendix B, for posting, the Respondent

Employer willing, at the Richland, Washington, of-

fices and place of business of Harvey Stoller, d/b/a

Richland Laundry & Dry Cleaners, in places where

notices to its employees are customarily posted. Copies

of said notice, to be furnished by the Regional Direct-

or for the Nineteenth Region, shall, after being signed

as provided in paragraph 2 (b) 2 of this Order, be

forthwith returned to said Regional Director for said

posting.

(4). Notify the Regional Director for the Nine-

teenth Region, in writing, within ten (10) days from

the date of this Order, what steps the Respondent

Union has taken to comply with.

3. Harvey Stoller, d/b/a Richland Laundry &

Dry Cleaners, his agents, successors, and assigns, and

Laundry and Dry Cleaners Union, Local 197, affiliated

with Laundry Workers International Union, AFL, its

offirers, agents, representatives, successors, and as-

signs, shall jointly and severally make whole Irene

Hallenbeck, Florence Jonson, Noland Teal, Donald Don-

aue, and Donahue in the manner set forth in

the of the Intermediate Report entitled The

Remedy,” for any loss of pay they may have suffered

by Respondents’ discrimination against them. }

Signed at Washington, D. C., March 6, 1951.

PAUL M. HERZOG,

Chairman;

JOHN M. HOUSTON,

Member;

JAMES J. REYNOLDS, IR.,

Member;

ABE MURDOCK,

Member}

PAUL L. STYLES,

Member,

[Seal] NATIONAL LABOR RELATIONS

BOARD.

APPENDIX C

The Trial Examiner’s Findings of Fact entered

in this case are as follows:

I. The Business of the Employer

The principal question in this case is whether the

Board has jurisdiction. Involved is an aspect of the

Board’s recently expressed policies on jurisdiction,

namely, enterprises which substantially affect the na-

tional defense.

The Employer operates a laundry and dry clean-

ing establishment in Richland, Washington. His busi-

ness is entirely localized in that area. During the

Employer’s fiscal year ending August, 1950, he pur-

chased supplies, including soap, cleaning solvents and

paper, amounting to approximately $24,000 in value,

about one-half of which was shipped to him from

points outside the State of Washington. The General

Counsel contends that the Board should exercise juris-

diction in this proceeding because of the relation of

the Employer’s business to the atomic energy pro-

gram, as discussed below, and it appears that in the

absence of this relationship the Board would not as-

sert jurisdiction.

Richland, Washington, was an incorporated mu-

nicipality prior to World War IL. It is now a reserva-

tion of the United States Government, along with

territory adjacent thereto, and its population has in-

creased substantially to 23,000 persons. During the

war, the Government obtained the land and buildings

in Richland, and it became the principal residential

area of persons employed in the nearby Hanford

Engineering Project which is devoted to the atomic

energy program. That project and Richland are

operated by General Electric Company, a New York

Corporation, as the prime contractor with the Atomic

Energy Commission, herein called the Commission.

The lease of the land and buildings in Richland is

handled by General Electric as rental agent for the

Commission.

During the Employer’s fiscal year ending August,

1950, and earlier fiscal years, he leased the laundry

and dry cleaning establishment, including all equip-

ment and fixtures therein, from the Commission at

a guaranteed annual rental of $18,000 and with all

profits over six per cent of the Employer's gross

income to be paid by him to the Commission. The

Employer’s current contract, executed at the begin-

ning of the present fiscal year, provides for the lease

of the building for a period of five years at a fixed

monthly rental of $560, with an option to renew for

a like period, and for the sale of the equipment and

fixtures to the Employer with payment therefor to

be over a maximum period of 10 years.

During the last fiscal year, the Employer’s gross

income approximated $240,000, of which about $200,000

represented services to persons in Richland and the

nearby area. The remaining $40,000 represented serv-

diess to the prime contractor, subcontractors, the United

States Army, and a local competitor, and included:

$19,600 received from General Eelectric for cleaning

garments worn by patrolmen and firemen, and $3,600

received from the Army for unspecified laundry serv-

ices. :

The Employer is a sub-contractor of General Elec-

tric, the prime contractor in the operation of the Han-

ford Engineering Project and the community of Rich-

land. The Employer’s business is an essential element

in the life of a community established and maintained

by the United States Government as a part of the

national defense program. For these reasons, coupled

with the volume of services rendered by the Employer

to General Electric and the United States Army, I

find that the Employer’s operations are a part of the

national defense effort. The Respondents contend,

with factual support, that the Employer does not have

a monopoly of the laundry and dry cleaning business

in Richland and that there are competitors in that

community and the nearby area. It is not controlling,

however, that in the event of a cessation of the Em-

ployer’s operations because of industrial strife, similar

services could be rendered by the competitors.

I find that the Employer is engaged in com-

merce and that, under applicable decisions of the

Board, jurisdiction should be asserted in this proceed-

ing.

APPENDIX D

The relevant provisions of the National Labor

Relations Act, as amended, 29 U.S. C. A., Secs. 151 et

seg. are as follows.

Sec. 151. Findings and declaration of policy.

The denial by some employers of the right of

employees to organize and the refuel by some

employers to accept the procedure of

bargaining lead to strikes and other forms of in-

dustrial strife or unrest, which have the intent

or the n ay aaa or obstruct-

commerce a efficiency

safety, ar apecation.of. the ddmenmentalition of

93 0) ne Reps ee eee te oa

merce; (c) materially affecting, restraining, or

controlling the flow of raw materials or manu-

factured or processed goods from or into the

channels of commerce, or the prices of such ma-

terials or goods in commerce; or (d) 3

dimin a

volume as substantially to impair or disrupt the

market for goods flowing from or into the chan-

nels of commerce.

The in ity of 3 i wer between

employees who do not possess fu eee Ren

sociation or actual liberty of contract, and em-

ployers who are organized in the corporate or

other forms of ownership association tantial-

ly burdens and affects the flow of commerce, and

tends to aggravate recurrent business depressions,

by 3 wage 88 and the oe pow-

er 0 earners nae? preventi

the stabilization of competi wage rates a

working conditions within and between industries.

Experience has proved that protection by law

of the t of empl to organize and bargain

collecti ee eee from injury, im-

pairment, or interruption, and promotes the flow

of commerce removing certain recognized

eee ee eee ool ee en-

practices fundamental to the f

j t of industrial disputes arising out of

erences as to wages, hours, or other working

conditions, and by restoring equality of bargain-

ing power between employers and employees.

Experience has further demonstrated that

certain practices by some labor organizations,

the necessary effect of burdening or

commerce by eg ane. Shoe free flow of

i strikes and other forms

of industrial unrest or through concerted activities

which impair the interest of the public in the free

flow of ope commerce, The 4 of such

practices is a necessary condition e assurance

of the rights herein guaranteed.

It is declared to be the policy of the United

States to eliminate the causes of certain sub-

stantial obstructions to the free flow of com-

merce and to mitigate and eliminate these ob-

structions when have occurred by encourag-

pon Aho arg ge ee of co 5 *

an rotecting the exercise by workers

of full Nene a2 association, self-organization,

and designation of representatives of their own

n ing the terms

and conditions of their employment or other

mutual aid or protection. '

Sec. 152. Definitions.

fic, 3 en e . i —

commerce, on, or communication

ee et. a Heard ae

of Columbia or any Territory of the United States

and any State or other T or between any

Dios of Glan or win te Duis of

Columbia or any Territory, or between points in

the same State but through any other State or

any Territory or the District of Columbia or any

Sec. 160. Prevention of unfair labor prac-

tices—Powers of Board generally.

(a) The Board is empowered, as hereinafter

provided, to prevent any from engaging

That the Board is empowered by agreement with

sey dane: of teas Sits Cae Setar te

such agency jurisdiction over any cases in any

dominantly — een tata tock

;

The relevant provisions of the Administrative Pro-

cedure Act, 5 U.S.C.A., Secs. 1001 et seq., are as follows:

Sec. 1001(c) Rule and Rule Making.

“Rule” means the whole or any part of any

ncy statement of eral or 1 ap-

plicabllity and Patuve effort dealt to implement,

interpret, or prescribe law or policy or to des-

cribe the organization, procedure, or practice re-

quirements of any agency and includes the ap-

proval or prescription for the future of rates,

wages, corporate or financial structures or re-

organizations thereof, prices, facilities, 3

services or allowances therefor or of valuations,

costs, or accounting, or practices bearing upon

any of the foregoing. “Rule making” means agency

process for the formulation, amendment, or re-

peal of a rule.

(f) Sanction and Relief.

“Sanction” includes the whole or part of any

agency (1) prohibition, requirement, limitation, or

other condition affecting the freedom of any per-

son; (2) withholding of relief; (3) imposition of

any form of penalty or fine; (4) destruction, tak-

ing, seizure, or withholding of property; (5) as-

sessment of damages, reimbursement, restitution,

compensation, costs, charges, or fees; (6) require-

ment, revocation, or suspension of a license; or

(7) taking of other compulsory or restrictive ac-

tion. “ includes the whole or part of any

agency (1) grant of money, assistance, license,

authority, exemption, exception, privil or

remedy; (2) recognition of any claim, right, im-

munity, privilege, exemption, or exception; or (3)

of any other action upon the application

or petition of, and beneficial to, any person.

Ses. 1002(a) Rules.

Every agency shall separately state and cur-

— oe in the Federal Register (1) i

tions of its central and field 3

ing delegations by the agency of final authority

and the established places at which, and methods

whereby, the public may secure information or

make submi or requests; (2) statements of

the general course and method by which its func-

tions are channeled and determined, including the

nature and requirements of all formal or informal

procedures available as well as forms and instruc-

tions as to the scope and contents of all papers,

reports, or examinations; and (3) substantive

es adopted as authorized by law and statements

of general e or interpretations formulated

and adopted by the agency for the guidance of

the publie, but not rules to and served

upon named persons in accordance with law. No

person shall in any manner be required to resort

to organization or procedure not so published.

Sec. 1002 (b) Opinions and Orders.

Every agency shall publish or, in accordance

with published rules, make available to public

roe tre all final opinions or orders in the ad-

judication of cases (except those required for

good cause to be held confidential and not cited

as precedents) and all rules.

Save as otherwise required by statute, mat-

ters of official record shall in accordance with

published rule be made available to persons

properly and di concerned except informa-

tion held confidential for good cause found. (June

11, 1946 c. 324, Sec. 3, 60 Stat., 288)

Sec. 1009(e) Scope of (judicial) review.

So far as necessary to decision and where

presented the reviewing court shall decide all

relevant questions of law, interpret constitutional

and statutory provisions, and determine the mean-

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APPENDIX E |

NLRB’S STANDARDS FOR

With the issuance on October 5, 1950, of t

of the Labor Relations Board, the NLRB for the first

RE FE

;

HAL

“The Board thereby reiterated its policy of not

exe jurisdiction, a rs a —.— to do so,

over bus operations 80 character that a

“The that W from the t decisions

made it a . that whenever federal j Ws ete exists

under the statute and the interstate commerce clause

8 Constitution the Board will exercise jurisdic-

n over:

41. Instrumentalities and channels of interstate

wad fi f radio

iW id SR ne, 2 LEE 14544. example, systems)

“2. Public utility and transit systems [local

transit Lines, 26 LRRM 1547].

“3... Establishments which operate as 5

parts of a multistate enterprise (for example, chain

stores, and branch divisions of national or 3

organizations) [Borden Co., 26 LRRM 1546].

44. Enterprises which produce or handle goods

destined for out-of-state shipment, or performing serv-

ices outside a state, if the goods or services are valued

8 Stanislaus Implement & Hardware

Co., Ltd., 26 1548]. ,

“5. Enterprises which furnish services or ma-

— — 5

or services are valued at $50,000 a year [Hollow Tree

Lumber Co., 26 LRRM 1543].

6. Any other enterprise which has:

(la) a direct inflow of material valued at $500,000

a year [Federal Dairy, Inc., 26 LRRM 15881; or

(b) an indirect inflow of material valued at

: pig ee [Dorn’s House of Miracles, Inc., 26

1545]; or

(e) a combination inflow or outflow of goods

| which add 8 to N : peg 2 F 5

required in items a) an v tledge

Paper Products, Ine, 2 LREM 44. pete

tional” eee Moving & Sereee "26

0 ense [Wes 0

LRRM 15811. r

(26 LRRM 50, 51)

Supreme Court of The United States

October Term, 1953

No.

HARVEY d/b/a RICHLAND

BRIEF IN SUPPORT OF

PETITION FOR A WRIT OF CERTIORARI

to the United States Court of Appeals

for the Ninth Circuit

PRELIMINARY STATEMENT

Por the sake of brevity, reference is hereby made

the foregoing petition for the ground of this

jurt’s jurisdiction. Also, for the same reason, we

fer to the petition for certiorari for the statement

the case, the questions presented and reasons as-

ed for the granting of the writ. Amendment V

an United States Constitution, the statutes in-

ved and the opinions below appear in the forego-

SPECIFICATIONS OF ERROR.

The Petitioner submits that this Court should

grant his petition for a writ of certiorari because the

Court of Appeals erred in the following important

particulars of federal law:

1(a). In permitting the Board to amend the de-

clared purpose of the Act to include the protection

of the national defense program.

1(b).. In sanctioning the adoption by the Board

for the assertion of jurisdiction over labor strife of a

“standard” wholly unrelated to the Act.

2. In approving a “standard” of the Board that

is arbitrary and capricious for want of equal applica-

tion to employers whose interstate and intrastate

businesses are identical.

8. In holding that the Board could apply its

“standard” retroactively to the property loss of Peti-

tioner.

4. In failing to review this case in accordance

with applicable statutes of the United States and

decisions of this Court by

(a) Ignoring Petitioner’s argument that

his laundry catablishment has no substantial rela-

tion to national defense, .

b) Making a determination unsubstan-

8 the record and only inferable from the

findings of the Trial er adopted by the

. Board, and 5

(0 Giving no weight to the Board’s un-

controverted finding of fact that Petitioner’s

business is strictly local.

5. In holding that TN in the year

1950 amounting to $12,000 do not fall within the

de minimis rule.

6. In permitting the Board to change its

theory of jurisdiction in the Court of Appeals.

SUMMART OF ARGUMENT

1. The Court of A erred in affirming the

amendment of the Act the Board; jurisdiction

ee e by the Board upon a ground foreign

to the :

2. eee

assertion of jurisdiction by the Board upon a “stand-

ard” arbitrary and capricious for want of 5 5 ap-

plication to employees whose interstate intra-

state operations are identical.

3. The Court of Appeals affirmance of the

Board’s retroactive application of its national defense

“standard” illegally deprives Petitioner of his property.

4. The Court of Appeals erred in failing to re-

view this case in accordance with applicable statutes

and decisions of this Court.

(a) Petitioner's laundry and dry cleaning

*. not substantially affect national de-

ense.

(b) and (e) The alleged unfair labor prae-

tices do not affect interstate commerce within the

meaning of the Act.

5. The Court of s erred in holding that

Petitioner’s interstate = totaling no more than

$12,000 per year, do not fall within the de minimis

6. The Court of Appeals erred in permitting the

Board to alter its theory of jurisdiction.

ARGUMENT

1. THE COURT OF APPEALS ERRED IN

AFFIRMING THE AMENDMENT OF THE

ACT BY THE BOARD; JURISDICTION

CANNOT BE ASSERTED BY THE BOARD

UPON A GROUND FOREIGN TO THE ACT.

The decision of the Court of Appeals for the

Ninth Circuit is based upon the premise that the

Board effectuates the purpose of the Act when it

assumes jurisdiction over labor difficulties at a local-

ized industry that substantially affects the national

defense program (Appendices A and B). But Congress

specifically declared the policy of the Act to be the

elimination of obstructions to interstate commerce,

and empowered the Board to prevent unfair labor prac-

tices causing such obstructions. 28 U.S. C. A., Secs..151

and 160, As a text writer has said:

«“* * * The ruling of the National Labor

Relations

has

to to industrial strife which obstructs or

tends to obstruct interstate commerce. * * *”

31 Am. Jur., Labor, Sec. 186, p. 886

Without conceding that Petitioner's business has

any relationship to the defense effort worthy of note,

pei sin subn:.tted that the Court’s premise must

fail as it finds no support in the Act itself.

N. L. . Funsteel M. 806 US. 88

—

Had Congress intended the Board to supervise

the defense and atomic energy programs, the Act

would so read.

Bailey v, Drexel Furniture Co, 259 US. 2, 6

Brewer v. Blougher, 39 U.S. 178, 10 L. ed. 408

US. v. N. E. Resenblam Truck Lines., 315 U.S.

50, 86 L. ed. 671

However admirable, during this time of world

crisis, the Board’s purpose in adopting “[e]stablish-

ments substantially affecting national defense” as a

“standard” for the exercise of jurisdiction over busi-

nesses essentially intrastate, the fact. remains that

the Board cannot exceed the authority delegated by

Congress. The Board has no power to amend the Act

by announcing a “standard” which extends the Board’s

jurisdiction to labor strife at a localized industry with

minor interstate purchases, merely because the in-

dustry, in the Board’s opinion, affects national de-

fense.

See: Addison v. Holly Hill Fruit Products, 322 U.S.

607, 88 L. ed. 1488

Iselin v. United States, 270 U.S. 245, 70 L. ed. 566

Manhattan G. E. Co. v. Commissioner of Int. Rev.,

297 U.S. 129, 80 L. ed. 528

FFF

ct aN: Shimadzu, 307 U.S.

„ 309 U.S.

134, 84 L. ed. 6568 2

Helvering v. Credit Alliance Corp., 316 U.S. 107,

86 L. ed. 1807

Helvering v. Sabine Transp. Co., 318 U.S. 306,

87 L. ed. 778

To effectuate the policies of the Act, Congress

has not granted the Board unlimited discretion.

N.L.R.B. v. Gullett Gin Co., 340 U.S. 361, 95 L.

ed. 337

N.LR.B. v. Fansteel M. Corp., 306 U.S. 240, 83

L. ed. 627

In the Fansteel case, the employer had discharged

some employees for engaging in unlawful “sit-down

strike” activities. The Board, upon complaint being

made, ordered the reinstatement of the employees.

The validity of the order was urged in this Court

under the Board’s authority to take such action as

will “effectuate the policies” of the Act. Answering

the Board, this Court, speaking through Chief Justice

Hughes, said:

“We repeat that the fundamental policy of the

Act is to safeguard the rights of self-o i

tion and collective bargaining, and thus the

promotion of industrial peace to remove obstruc-

tions to the free flow of commerce as defined

in the Act. There is not a line in the statute to

warrant the conclusion that it is any part of

the policies of the Act to 8

o the

. . * ba

pu providing legal remedies for the inva-

sion of the rights. We are of the

opinion that to provide for the reinstatement or

abortive its plan for peaceable procedure.

N.L.R.B. v. Fansteel M. Corp., 306 U.S. 240,

258, 83 L. ed. 627.

So, too, in the case at bar, the Board was not effectuat-

ing the policies of the Act by assuming jurisdiction

over a localized industry that, in the Board’s view,

affects national defense.

The Court of Appeals, by approving legislation

by the Board, and by sanctioning a “standard” of

jurisdiction not in conformity with the Act, has ren-

dered an important decision on federal law that should

be corrected by this Court.

Republic Steel Corp. v. N.L.R.B., 311 U.S. 7, 85

L. ed. 6

2. THE COURT OF APPEALS ERRED IN AF-

FIRMING THE ASSERTION OF JURIS-

DICTION BY THE BOARD UPON A

“STANDARD” ARBITRARY AND CAPRI-

CIOUS FOR WANT OF EQUAL APPLICA-

TION TO EMPLOYERS OSE INTER-

STATE AND INTRASTATE OPERATIONS

ARE IDENTICAL.

Through the release to the press on October 5,

1950, the Board announced that jurisdiction would

not be exercised over business operations local in

character. By way of exception thereto, it was further

stated that jurisdiction would be assumed over estab-

lishments affecting national defense. The Trial Exam-

iner, taking note of the press release, determined

Petitioner’s laundry and dry cleaning business to be

entirely localized to the Richland area, but decided

that the Board should assert jurisdiction on account

of Petitioner’s relationship to the atomic energy pro-

gram.?® The Board affirmed, saying that its decision

“to exercise jurisdiction here is based solely on the

Respondent Employer’s [Petitioner’s] relationship to

the national defense effort, arising from his license

to do business on a United States reservation devoted

to atomic energy.” (Appendix B.)

In the application of the “standard” in question,

the Board discriminates between a localized business

that is held to affect national defense, and an identical

localized business that does not, in the opinion of the

Board, affect the defense effort. The ruling intent of

this Act is the prevention and elimination of labor

practices leading to industrial strife which obstructs

interstate commerce. As the “standard” in question

cannot reasonably be said to have such an object,

it should have been struck down by the Court of

Appeals.

“A statute whose terms create an arbitrary class-

ification is void under the equal protection and

due process clauses. Administrative discrimina-

tion is but one step removed. It consists of arbi-

trary classification effected by the exercise of

discretion of an administrative agency acting un-

der a valid statute. Just as an attack upon the

1 The findings of the Trial Examiner as confirmed by the Board

leave no doubt that the Board would not exercise jurisdiction over labor

difficulties at a business similar to Petitioner's and unrelated to national

defense. See also, Capitol Laundry and Dry Cleaners, 91 NLRB 923.

tive discretion. * * *

Classifications are which do not

have a natural and (Emphasis supplied)

pose of the regulation. * * *” (Emphasis )

Vom Baur, Pederal Adatinietrative Liaw, Vol.

1, 1942 Ed., Sec. 401, pp. 407, 408

In Yick Wo v. Hopkins, 118 U.S. 356, 374, 30 L. ed.

220, this Court recognized that there is a denial of

equal justice within the prohibition of the Constitution

when a fair law (such as the Act) is administered to

“* * *The ultimate test of validity is not whether

the classes differ but whether the differences be-

tween them are pertinent to the subject with

respect to which the classification is made.”

Asbury Hospital v. Cass County, 326 U.S. 207,

214, 90 L. ed. 6.

A rule setting apart localized businesses with minor

interstate purchases from similar businesses on the

ground that only the former affect the defense ef-

fort, cannot be sustained. As the distinction between

the classes does not pertain to the Act, the Court

of Appeals should have held the “standard” to be

arbitrary and capricious.