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Leader v. APEX Hosiery Co.

November 29, 1939


Appeal from the District Court of the United States for Eastern District of Pennsylvania; Wm. H. Kirkpatrick, Judge.

Author: Biggs

Before BIGGS, MARIS and CLARK, Circuit Judges.

BIGGS, Circuit Judge.

Apex Hosiery Company, a Pennsylvania corporation, brought suit in the court below naming as defendants American Federation of Full Fashioned Hosiery Workers, Philadelphia Branch No. 1, Local No. 706, an unincorporated association, Leader, its president, Burge, its vice-president, Omeig, its treasurer, and Brown, its secretary, and the members of the Union, alleging violation of the anti-trust laws of the United States. The amended complaint alleged that jurisdiction was vested in the court below by virtue of Section 4 of the Act of October 15, 1914, 38 Stat. 730, 731;*fn1 15 U.S.C.A. § 15, known as the Clayton Act, entitling a person injured in his business or property by acts forbidden by the anti-trust laws to recover three-fold for damages sustained by him.

The facts of the controversy at bar are not in dispute. Apex Hosiery Company manufactures hosiery in its factory at Philadelphia, Pennsylvania, employs more than 2,500 persons and does an annual business of approximately $5,000,000. It procures its raw materials, principally silk and cotton, from outside the State of Pennsylvania and ships over eighty percent of its completed merchandise across state lines. The Apex Company insisted upon maintaining an open shop. The appellant union made attempts to induce the company to enter into a closed shop contract. These attempts were unsuccessful.

In the middle of April, 1937, the union made further demands for a closed shop agreement. Nothing came of those demands. On May 4, 1937, the union authorized Leader to call a strike at the Apex plant. Only eight of the company's employees at this time were members of the Union. On May 6th, at about two o'clock in the afternoon, a mob of fifteen to twenty thousand persons, consisting of employees of other hosiery mills in Philadelphia which had been unionized, gathered outside the plant and Leader made a further demand for a closed shop agreement. When this was refused Leader forthwith declared a sit-down strike and immediately acts of great violence were committed against the plant and employees of the company. The plant was seized by members of the mob, some of whom remained in control of the plant until June 23, 1937. All of the locks on the outer doors and entrances of the plant were changed and no one was permitted entrance to the premises except by leave of those in possession. At the time of the seizure, the Apex Company had on hand approximately 134,000 dozens of finished hosiery ready for shipment against unfilled orders, eighty percent of which were from customers outside the State of Pennsylvania. The company repeatedly requested permission to ship this hosiery from the plant, but this was refused. During the course of the sit-down stike machinery was wantonly demolished or damaged to the extent of many thousands of dollars. The usurpation of the company's rights in its own property and the demolition of machinery and equipment, were conducted without interference by those local authorities charged with enforcing law and order in the City of Philadelphia. These facts which are not open to dispute show the existence of the sit-down strike in its most aggravated and illegal form. Judicial condemnation of such tactics cannot be too severe.They serve the cause of labor badly indeed and the public good fares worse before such a display of lawlessness. We have already expressed our views in this regard in our opinion in McNeely & Price Company v. National Labor Relations Board, 3 Cir., 106 F.2d 878, and need not repeat here the words there used. See National Labor Relations Board v. Fansteel Corporation, 306 U.S. 240, 255, 256, 59 S. Ct. 490, 83 L. Ed. 627, 123 A.L.R. 599.

The sit-down continued until the entry of an injunction decree by the court below on June 23, 1937, pursuant to the mandate of this court in the prior equity suit of Apex Hosiery Co. v. Leader, 3 Cir., 90 F.2d 155. Following this decree the sitdown strike came to an end and the premises were returned to the possession of the Apex Company.

The suit at bar followed. After extensive hearings the jury returned a general verdict against Leader and the union in the sum of $237,210.85, but rendered a verdict in favor of Burge, Omeig, Brown and the individual members of the union. The verdict included damages for injury to machinery and equipment, fixed and carrying charges which were deemed necessary expenses for maintaining the plant and loss of profits to the company during the period of the plant's occupancy by the strikers. The trial court trebled the amount of the verdict in accordance with Section 4 of the Clayton Act and entered judgment in triple amount. The appellants filed motions to set aside the verdict and judgment and moved for a new trial. These motions were denied by the trial judge and the present appeal was taken.

The fundamental questions raised by this appeal may be stated as follows. Was there or was there not a violation of the anti-trust laws of the United States and was the damage suffered by the appellee the proximate result of such violation? We entertain no doubt that the appellants should be compelled in the appropriate forum to answer in damages to the appellee. The crux of the problem, however, is whether the appellee is entitled to recover treble damages under the Clayton Act in a district court of the United States or whether it must seek relief in the courts of the Commonwealth of Pennsylvania. In short, upon all the evidence presented are the appellees shown to have been guilty of an offense cognizable under the anti-trust laws or should the trial court have directed a verdict in their favor? The answer to these questions is to be found in the anti-trust laws and in the applicable decisions construing and interpreting them.

The Provisions of the Sherman Act.

The Sherman Act was approved July 2, 1890, 26 Stat. 209. Sections 1 and 2 of the Act, 15 U.S.C.A. §§ 1, 2, are in part, as follows:

" § 1. Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal * * * ."

" § 2. Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a misdemeanor, * * * ."

It will be seen that by its very terms the Act includes the activities of any and all organizations in restraint of trade and reneders them illegal. Congress did not limit the restraint imposed by the Act to business combinations. It included all combinations in restraint of trade within the purview of the Act. See Loewe v. Lawlor, 208 U.S. 274, 28 S. Ct. 301, 52 L. Ed. 488, 13 Ann.Cas. 815; Gompers v. Buck's Stove & Range Co., 221 U.S. 418, 31 S. Ct. 492, 55 L. Ed. 797, 34 L.R.A., N.S., 874; United Mine Workers v. Coronado Coal Company, 259 U.S. 344, 42 S. Ct. 570, 66 L. Ed. 975, 27 A.L.R. 762; Coronado Coal Company v. United Mine Workers, 268 ...

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