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

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386417_2014%3A1

## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1954
- **Citation:** 347 U.S. 919

## Text

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

1,

2
3.
4

. Arbitrary and Capricious “Standard”

. Improper Review

Failure to Apply This Court’s Decisions

Departure from Usual Course of Judicial Proceedings

21

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
3

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)

2

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

2

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)

2

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

2, 67

42 USC. A. Secs. 1801 et seq.

7

Miscellaneous
26 LRRM 50, 51

4, 16, 47, 65

31 Am. Jur., Labor, Sec. 136

53

31 Am. Jur., Labor, Sec. 139

61
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,

J

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“.

5

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).

1

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-

7

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

a

8
2
3
f

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

7

Full

Upon these facts the Trial Examiner, and later
y
the colloquy is

the Board, determined the Petitioner to be a vital

cog in the defense program and amenable to the
(Appendix A),

s 4 : Bigie gy 2
: 8 Hil af 3
1 bi} i Bi
| 3 =f * at i i
1 1 12 Ht :
1 8 i i 111 nF
ba iid ut ds 1111
i K 4 Ht
ie 11 ö ; 12 ils
5 1 1121 | 15 35 sf
115 3 fiteh h
12337 ts | ith
ie 20 1345 eid

[Seal] NATIONAL LABOR RELATIONS
BOARD.

88
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:

40

$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.

41

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

ö
dominantly — een tata tock

;
!
5
1

44

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-

45

— 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.

(c) Public Records.

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-

F «6S 2215832
, tL = i
i e

=] i n pee Lb Hi

lis 12 11 | | 1411185 Hu
15 1 | F Be tigi

sale py itis + 1 uth |
12113 15 123 = 4113135 32

47
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

3

:

1

4

3

a

F
cr
RE FE

i
;

i
HAL

!
i
?
li
i

“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

49

: 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-

t

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.

5a
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.

See also:

.
289 U.S. 92, 7 L. ed. 1058

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

100 v, Union Pac. Ry. Co, 222 US. 84d, 66 L.
LCC. v. Illinois C. Ry. Co, 215 U.S. 452, 54 L.
ed. 280

In the opinion of the Court of Appeals, the as-
sertion by the Board of jurisdiction upon Petitioner’s
assumed relationship to national defense was proper
as the Board, prior hereto, has exercised jurisdic-
tion over the laundry and dry cleaning industry. (Ap-
pendix A.) But what the Board has done in the past
can hardly give sanction to the unlawful “standard”
so recently adopted, and which the Board applied in
this case. Accordingly, this Court is petitioned to grant
certiorari and invalidate the discriminatory “stand-
ard” as being offensive to the due process clause of
the Fifth Amendment.

3. THE COURT OF APPEAL’S AFFIRMANCE
OF THE BOARD’S RETROACTIVE APPLI-
CATION OF ITS NATIONAL DEFENSE
“STANDARD”: ILLEGALLY DEPRIVES
PETITIONER OF HIS PROPERTY.

It has long been the rule of the Board not to

exercise jurisdiction over laundry and dry cleaning
establishments engaged in local business. J. Arthur

61

& Dyers, Inc., 81 NLRB 1299; Red Star Industrial
Service, 80 NLRB 847; and Capitol Laundry and Dry
Cleaners, 91 NLRB 923. In the past the Board has
assumed jurisdiction only over those launderers and
dry cleaners performing interstate services and operat-
ing in commerce as the term is defined by the Act.
Arcade Sunshine Company, Inc., 12 NLRB 259; White
Swan Company, 19 NLRB 1079; Quality & Service
Laundry, 39 NLRB 970; Star Dyers & Cleaners, 53
NLRB 514; H. B. Harwell, 55 NLRB 845; Liberty
Laundry Co., 62 NLRB 1235; Sam Boorstein, etc., 64
NLRB 645; Horton’s Laundry, 72 NLRB 1129; Ar-
row Linen Service, 73 NLRB 868; and Indianapolis
Cleaners and Launderers Club, 85 NLRB 1198, re-
versed, 87 NLRB No. 75. ;

On January 25, 1950, the date Petitioner and the
Union signed the closed shop agreement, the Board,
was refusing to take jurisdiction of labor disputes
at localized laundries, even though the employer’s

Dry Cleaners, 91 NLRB 923. The Petitioner and the
Union had no cause to believe their contract was not in
accordance with law, its validity being recognized by

f

the State of Washington. Yeager v. International
Broth. of Teamsters, 39 Wn. (2d) 807, 239 P. (2d) 318.

During the months of March and April, 1950, the
Employees who refused to join the Union were dis-
charged by the Petitioner. These Employees promptly
filed with the Board unfair labor charges against :
the Petitioner and the Union (R. 3-31). On October
5, 1950, while the charges were pending, the Board
formulated the rule that it would take jurisdiction
over labor strife at national defense establishments.

The Board took jurisdiction of this case by ap-
plying its October 5, 1950, national defense “standard”
as of March and April 1950. Having assumed juris-
diction, the Board decided, in part, that the severed
Employees should be reimbursed by Petitioner for lost
wages (Appendix B).** By the Board’s arbitrary retro-
active application of the “standard” to assume juris-
diction over actions antedating the “standard” by six
to nine months, the Petitioner is illegally deprived of
his property within the meaning of Amendment V to
the Constitution of the United States.

See, NLRB. v. Prettyman (C. A. 6), 117 F. (2a)

The Act is prospective in its operation.
$1 Am. Jur., Labor, Sec. 139, p. 888.

er — — mab
er; FFP

discrimination again ep i 84).

The power of the Board to deprive Petitioner of his
property should not differ. The Courts cannot sus-
tain unreasonable and unfair adminstrative action by
a governmental agency.

ive Procedure Act, 5 U.S. C. A. Sec.
1009 (e)

The Oourt of Appeals could see nothing arbitrary
in the Board’s application of its national defense
“standard”. The Court held that there is no evidence
im the record that Petitioner relied on any non-juris-
diction policy of the Board when the labor practices
in question were committed (Appendix A; R. 246-251).
The arbitrary actions of the Board, not the Petitioner,
run counter to the expressions of the Constitution, the
Congress, and this Court. In entering the contract
with the Union, the Petitioner would rely on his right
to procedural due process. It should be enough that
the Board admits jurisdiction would not have been
assumed over the alleged unfair labor practices but
for the national defense “standard” adopted six
months later (R. 45, 75). The retroactive applica-
tion of the “standard” to Petitioner’s property depri-
vation should not have been countenanced by the Court

of Appeals.

CORDANCE WITH APPLICABLE STAT-
UTES AND DECISIONS OF THIS COURT.

The Administrative Procedure Act, 5 U.S. C. A.
et seq., 1009(e), reads in part, as follows:

Ag reviewing court shall * * * hold pe apts: :
aside agency * * * findings, con-
T

tial evidenee In the fore-
going determinations, the cour ee review the

eee ren e A 5
cited by any party * * *.” (Emphasis supplied.)

The Labor Management Relations Act, 1947, 29 U.S-_
C.A. 151 et seq., 160(f) provides: ;
“[T}he fin of 2 wp with respect to

tions of fact 8 substantial evidence .
on the record r f

conclusive.” (Emphasis supplied.)

In Universal Camera Corporation v. N. L. RB. 340 U.S 8
474, 95 L. ed. 456, this Court construed these statutes to
be Congressional directives to the courts to assume re-
sponsibility for keeping the Board within reasonable
gounds, At 340 U.S. 490 appears:
“The Board’s findings are entitled to respect;
but bat ee nonetheless be set aside when the
‘ore a Court of 1 clearly precludes
the Board’s decision fro justified by a
n 2 :
witnesses or its informed judgment on matters
within its special competence or both.”

The Court of Appeal’s decision in this case was not
based on the foregoing principles.

Petitioner’s and dry cleaning plant

not substantially affect national defense i

The Trial Examiner made a finding of fact that a

, jurisdiction should be asserted because Petitioner's

/ operations substantially affect national defense. The

8 Board sustained the finding, not so much on the record,
dut on the ground that any business situate on an
atomic energy reservation is an important cog in
the defense effort (R. 45-48, 74-75).

5 Commeneing with the hearing before the Trial
_ Examiner, the Petitioner has continuously urged that
ö his laundry and dry cleaning plant plays no greater
a part in the defense program than other cleaning
establishments in the United States. A review of the
record made below will show the soundness of Peti-
tioner’s position. The examiner’s finding that any one
of a dozen competitors could assume Petitioner’s busi-
ness as a moment’s notice, and if given half a chance,
cConclusively determines that national defense is no
wise dependent upon the Richland Laundry and Dry
Cleaners.

The Court of Appeals erroneously refused to de-
eide whether the record supports the finding that
Petitioner's operations substantially affect national
defense. Under federal law the finding was subject to
Universal Camera Corporation v. N.L.R.B., 340
U.S. 474, 95 L. ed. 456

The admission of the Trial Examiner and the Board
that jurisdiction would have been declined but for
Petitioner's substantial relationship to the defense
’ effort, points up the importance of the finding the
Court of Appeals declined to review. When that re-

view was denied, Petitioner’s legal rights were denied

Universal Camera Corporation v. N.L.R.B. 340
US. 474, 95 L. ed. 456

NLRB. v. Gullett Gin Co. 340 U.S. 961, 95 L el

N.LE.B. v. Pittsburgh Steamship Co., 340 U.S. 498,
95 L. ed. 479

(b) and (e) The unfair labo do
L (e) se Np Ag sages
ing of the Act.

The Trial Examiner found Petitioner’s operations
to be entirely localized to the Richland, Washington,
area. The Court of Appeals gave no consideration to
this finding, but held, in effect, that as Petitioner
committed unfair labor practices and annually pur-
chases $12,000 worth of out-of-state supplies, he is
subject to the Act. Yet this Court, in N.L.R.B. v. Jones
& Laughlin Steel Corp., 301 U.S. 1, 81 L. ed. 893, de-
termined that the Board’s jurisdiction inheres upon
proof of (a) unfair labor practices (b) interstate com-
merce, and (e) the former affects, or might well af-
fect, the latter.

All the evidence in the record pertaining to inter-
state activities by Petitioner is as follows:

“Q. [General Counsel But may T ask Mr. a teil
approximately part of your anual
purchases are fro tside
F

“A. Well, let's say half.
“Q. Approximately half?
“A. Ves, sir.“ (R. 111, 112)

67
The Board’s General Counsel did not trouble himself to
prove, though the jurisdiction of the Board was in is-
sue, that the 1950 interstate purchases where not made
long prior to the labor activities violative of the Act.
Nor did he prove the true volume of the imports, as
distinguished from the conjectured volume.

Where a federal agency, such as the Board, is
authorized to act under federal power except in situa-
tions where the power is reserved to the States, state
control must be upheld unless federal power affirma-
tively appears from the evidence. Federal spread
cannot rest on inference alone.

Connecticut Light & Power Co. v. Federal Power
Commission, 324 U.S. 515, 89 L. ed. 1150.

Had the Court of Appeals reviewed the whole
record, it would have realized that when the Trial

Examiner found Petitioner to be in commerce with-

in the meaning of the Act, he was speaking of Peti-
tioner’s business relationship to General Electric. Only
by speculation could the Court infer that the Examiner

was refering to Petitioner’s interstate purchases. (See
R. 45-48, and in particular the interstate commerce
stipulation, R. 197-199.) The Board’s order should
: have been adjudged upon what the record discloses
was the ground for the order.

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

Had the entire record been perused, the Court
of Appeals would have noted the finding that in-
_ dustrial strife at Petitioner's localized plant would

not affect the laundry and dry cleaning business at
Richland (R. 48), and, we submit, could not affect
the interstate imports, Instead, the Court looked only
to the volume of Petitioner’s interstate purchases, —
entirely disregarded the Board’s findings and the re-
mainder of the record, and decided that Petitioner's
“unfair labor practices were unfair labor practices
affecting commerce * * * [amounting to] approxi-
mately $12,000 a year * * *.” This was error.

Procedure Act, 5 U.S.C.A. meri

Labor Management Relations 1947, 29 U
C. A. 160 (f) sei

Universal Camera Corporation v. N. L. R B., 340
U.S. 474, 95 L. ed. 456

N.LR B. v. Fainblatt, 306 U. S. 601, 88 L. ed. 1014

N. L RB. v. Pittsburg Steamship Co., 340 U.S. 498,
95 L. ed. 479

5. THE COURT OF APPEALS ERRED IN
HOLDING THAT PETITIONER’S INTER.
STATE PUR TOTALING NO

MORE THAN YEAR, NO NOT
FALL WITHIN WITHIN THE DE MINIMIS RULE.

Petitioner’s out-of-state purchases for the fiscal
year of 1950 amounted to $12,000. The impact of
the labor activities, admittedly unfair if Petitioner
is subject to the Act, upon such interstate commerce
would be so trivial as to fall within the rule de
minimis non curat lex.“ The Court of Appeals held

Stores, Inc. v. NLRB. (C.A. 9), 187 F. (2d)
for the Ninth Circuit the Board

to the contrary, thus nullifying the distinction be-
tween. Federal and State power.

N. L. RB. v. Fainblatt, 306 U.S. 601, 83 L. ed. 1014,

- recognizes that the de minimis rule should be applied

in the proper case. In N.L.R.B. v. Jones & Laughlin

Steel Corp., 301 U.S. 1, 30, 81 L. ed. 898, this Court
said:

4 The authority of the federal government

may not be ed to such an extreme as to
the distinction, ‘which the commerce clause itself

establishes, between commerce ‘among the several
States’ and the internal concerns of a state. That
between what is national and what is

distinction
local in the activities of commerce is vital to the

See also, N.L.R.B. v. Shawnee Milling Co., (C.A.
10) 184 F. (2d) 57

The Board, however, has not contented itself with

the Jones & Laughlin decision, but has developed its

on theory of jurisdiction over local enterprises:

Subssiatiett to the decision of the Jones & Lal :
lin case, the lower courts and the Board, in the con-
struction of the commerce clause, have by judicial
and quasi-judicial action gradually whittled away at
the distinction between interstate and intrastate ac-
tivities. This Court is respectfully petitioned to grant
certiorari herein, reverse that trend and return to
the States the authority to regulate labor activities of
businesses primarily local and which, if at all, only
remotely affect interstate commerce.

N.LR.B. v. Jones & Laughlin Steel Corp., 301 U.S.
1, 306 L. ed. 88

We submit that the decision of the Court of
Appeals determining that the alleged unfair labor prac-
tices fall within the purview of the Act because Peti-
tioner’s localized business annually purchases supplies
amounting to $12,000 is in conflict with applicable
VFC
portance to the public.

N.LB.B. v. Fainblatt, 306 U. S. 1, 88 L. ed. 1014

6. THE COURT OF APPEALS ERRED IN
PERMITTING THE BOARD TO ALTER ITS
var sei OF JURISDICTION.

At the hearing upon the complaint charging Peti- :

7¹

tioner and the Union with violations of the Act, the
General Counsel took the position that the Board had
jurisdiction through Petitioner’s relationship to the
atomie energy program (R. 109). The General Coun-
del extensively examined Petitioner, attempting to
5 prove that che laundry was an integral part of Gen-
eral Electric’s operation at Richland, and thereby was
engaged in interstate commerce. (R. 95-129.)

: The Trial Examiner was of the opinion that the
_ interstate purchases of Petitioner were not being re-

lied upon by the General Counsel to establish the
Board jurisdiction (R. 110, 111). The General Counsel

, did not disagree, merely stating that “it might be
helpful if we did have in this record the percentage

| of his [Petitioner’s] purchases that came from out of
the state.”

At the close of the hearing, the parties stipulated
to certain facts going to the Board’s power, or lack

of power, to take cognizance of the labor dispute.

sis )

72

peals based its decision? The record answers nega-
tively:

“Trial Examiner Hunt: All right. From informa-
tion obtained by counsel, Mr. Stoller, and the
Examiner, I believe counsel will stipulate it
to be that—their understanding that the Gen-
eral Electric Company re the Hanford
Engineering Project, and the community of
Richlan d as an agent of the Atomic Energy
Commission. The project is operated on a
cost-plus a fixed fee of one dollar basis.

That is, not upon a profit basis. The rentals
of business and residential properties in the
2 are handled with the General

gp aoe by General Electric as testified by
r. Stoller.

General under rental t
JJC
to the Atomic Energy Commission. And Gen-
eral Electric turns over to the Commission
all monies received as rent on other properties
which it leases as agent of the Commission.
We understand further that the present agree-
. lease 15
a ra

period of time—I think you five
years, Mr. Stoller?

F
if
:

3.

4

;

3

7%

“Trial Examiner Hunt: And under which he is
purchasing the equipment and fixtures with-

ment ted by Electric as the
. of the

form of government for the community of
Richland is to the City form
of government. The manager by
the Gen as agent
of the Atomic Energy Co and

rules and regulations prescribed by the Atomic
Energy Commission Hor the government of

Richland.
And incidentally the area is ed by of-
ficers who are of —.— te

and who are depu under an t
with the County of Benton. That is sub-
stance of our understanding, I believe?

“Mr. Boyd: That is correct.

“Mr, Bassett: We agree that the facts stated are
correct.

“Mr. Stoller: Yes, sir.” (R. 197-199)

Not until the Board filed an opening brief with
the Court of Appeals was jurisdiction, to the knowl-
edge of Petitioner, based upon the affect labor strife
would have on the interstate purchases of the Rich-
land Laundry & Dry Cleaners. Petitioner and the
nion pointed out to the Court the Board’s switch in
theories of jurisdiction, but to no avail.

At the hearing Petitioner represented himself
and was led to believe by the Trial Examiner that
dis interstate purchases were considered immaterial

by the Board for jurisdictional purposes. (R. 110-

74 |
112.) The Trial Examiner's Findings of Fact en-: ;
interstate purchases in passing. The Board’s Decision
and Order confirms the Intermediate Report of the
Trial Examiner and no reference is had to Petitioners
minor interstate purchases. The Board’s action in
changing its theory of jurisdiction in the Court of
Appeals from “relationship to General Electric” to
“interstate purchases” was wanting in good faith.
Upon such happening, the Court of Appeals should,
at the least, have remanded the matter for the pur-
pose of taking further testimony on the new issue.

By resting its determination of jurisdiction upon
Petitioner’s interstate purchases, a ground not as-
serted before the Board, the Court of Appeals so
departed from the accepted and usual course of judicial
proceedings as to call for an exercise of this Court's

power of supervision.

See: McGrath v. Manufscturers Trust Co., 338 U.S.
241, 94 L. ed. 31

P

Virginian R. Co, v. Mullens, 271 U. S. 220, L. ed. 915
Peck v. Heurich, 167 U.S. 624, 42 L. ed. 302

75

CONCLUSION

the Court of Appeals has resolved important
questions of federal law to conflict with applicable
- decisions of this Court and enactments of the Congress.
Without prolonging this brief, it is submitted that this
Court should grant certiorari to review the decision
al the Court of Appeals, especially the Court’s sanction
of the arbitrary national defense “standard” and its
retroactive application by the Board in this case.

nable t,
truth, to be within the elementary rule that the
su and not the shadow, determines the
validity of the exercise of the power.

LC.C. v. Hlinois C. Ry. Co, 215 U.S. 452, 54
8 L. ea 280, 288 ae 5
Respectfully submitted.

RICHARD S. MUNTER

_ CAMERON SHERWOOD and
~ ROBERT A. COMFORT

(Of Counsel)

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386417_2014%3A1. Public record. Not legal advice.