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United States v. United Steelworkers of America

October 27, 1959


Author: Biggs

Before BIGGS, Chief Judge, GOODRICH and HASTIE, Circuit Judges.

BIGGS, Ch. J.: The suit at bar was instituted by the United States, parens patriae, against United Steelworkers of America (the "Union"), an unincorporated labor union, representing, among others, employees in the steel industry, which is engaged in trade, commerce, and transportation among the several States and with foreign nations and in the production of goods for commerce as defined by the Labor-Management Relations Act, 1947, as amended, 29 U.S.C.A. § 141 et seq ., 61 Stat. 136 et seq . The defendants, ninety-six in number, (the "Steel Companies") are variously engaged in one or more of the stages of steel production, including the mining and transporting of iron ore, the operation of blast furnaces for the conversion of iron ore into pig iron, the production of steel ingots, the rolling and shaping of steel ingots into steel products and in the fabricating of finished products.

Collective bargaining agreements between the Union and the Steel Companies expired on June 30, 1959, and unresolved labor disputes between the Steel Companies and their employees represented by the Union as to the terms and conditions of new agreements resulted in strikes of the employees commencing on July 15, 1959, and continuing until the present time. On October 9, 1959, the President of the United States issued Executive Order No. 10843, creating a Board of Inquiry, 29 U.S.C.A. §§ 176 and 177, to inquire into the issues involved in the labor disputes, and in the Executive Order referred to, stated that in his "opinion" the strike was affecting a substantial part of an industry engaged in trade, commerce and transportation among the several States and with foreign nations and in the production of goods for commerce, and that, if permitted to continue the strikes would imperil the national health and safety. 29 U.S.C.A. § 176. The Board of Inquiry convened and inquired into the issues involved in the labor disputes and made its report as required by law on October 19, 1959. Upon its receipt the President filed the report with the Federal Mediation and Conciliation Service, making its contents available to the public, and instructed the Attorney General of the United States to institute the instant proceedings in the court below.

That court, after extensive arguments and stipulations by the parties whereby they waived service of process and submitted themselves to the jurisdiction of the court and also agreed that the hearing on the petition and affidavits without oral testimony should be a final one, entered an injunction which ordered the Union and its officers and agents to end the strike and also required the Steel Companies to make their plants available for the Union members so that they might resume work therein. This injunction by the terms of the Act must be dissolved in 80 days, 28 U.S.C.A. § 180.The Union has appealed from this injunction. The Judgment is a final one, 28 U.S.C.A. § 1291. No jurisdictional question in the ordinary sense is presented here.

The Constitutionality of the Statute

We are met in limine, however, with a constitutional challenge asserted by the Union as to the capacity of the Court below to act in this matter.*fn1 The union relies on Article III, Section 2 of the Constitution which limits the courts of the United States to the judicial function of adjudicating justiciable controversies, citing National Mutual Ins. Co. v. Tidewater Transfer Co ., 337 U.S. 582 (1949). Put shortly, it is the contention of the Union that there was no "case or controversy" before the court below which it could adjudicate in the sense required by the Constitution. In this connection the Union points out that Section 178, Title 29, U.S.C.A., states that the court "shall have jurisdiction to enjoin any such strike . . ." but, it contends, an injunction can issue lawfully only if it is employed as a remedy to enforce a preexisting legal duty; that here the injunction creates the right and also in the same breath, enforces it. The Union relies on the kind of classic equity proceedings where an injunction is issued to prevent the continuance of a tort, to compel performance of a contract, or to enforce a duty already imposed by statute. The Union concedes that both it and the Steel Companies had and have a duty to bargain collectively in good faith and if it had failed to do so sanctions could be imposed upon it under the National Labor Relations Act because of such failure. But the Union argues that while there is a controversy between it and the Steel Companies that controversy was not before the court below in constitutionally justiciable form.

Unfortunately, though the Act is over twelve years old, we have found but one reported case which directly adjudicates this issue of constitutionality under Article III, Section 2; viz., U.S. v. United Steelworkers of America, 202 F.2d 132, 138-39 (2d Cir. 1953), affirming U.S. v. American Locomotive Co ., 109 F. Supp. 78 (W.D.N.Y. 1952), cert. denied, 344 U.S. 915 (1953) (Certiorari in this case was applied for and denied prior to the adjudication in the Court of Appeals.). Cf. Youngstown Co. v. Sawyer, 343 U.S. 579, 586 (1952).*fn2

We think it desirable to examine this question de novo . It is clear that Sections 176-180 of the Act, 29 U.S.C.A., embody and attempt a legislative solution of problems rising from labor disputes which lead to strikes or lockouts and which, because of their serious impact on national health or safety, may give rise to national emergencies. There was a clear-cut recognition by Congress that labor strife affects adversely important economic and social interests of the public. This appears from the National Labor Relations Act itself enacted long prior to the Labor-Management Relations Act with which we are immediately concerned. The latter Act appears to have two major objectives and it is not necessary to decide here which has primary or secondary status. Congress intended the Labor-Management Relations Act to operate by its terms when a strike "affects an entire industry or a substantial part thereof . . ." and "will imperil the national health or safety . . . ." 29 U.S.C.A. § 178.

The purposes of the Act are set out in Section 141(b) as follows:

"Industrial strife which interferes with the normal flow of commerce and with the full production of articles and commodities for commerce, can be avoided or substantially minimized if employers, employees, and labor organizations . . . recognize under law that neither party has any right in its relations with any other to engage in acts or practices which jeopardize the public health, safety, or interest."


"It is the purpose and policy of this . . . Act, in order to promote the full flow of commerce, to prescribe the legitimate rights of both employees and employers in their relations affecting commerce, to provide orderly and peaceful procedures for preventing the interference by either with the legitimate rights of the other, to protect the rights of individual employees in their relations with labor organizations whose activities affect commerce, to define and proscribe practices on the part of labor and management which affect commerce and are inimical to the general welfare, and to protect the rights of the public in connection with labor disputes affecting commerce."

The Congressional intent shown here is, first, to protect the rights of both employers and employees and, second, to bring to an end industrial strife which affects commerce to such a degree as to menace the general welfare. See 29 U.S.C.A. Sections 178 and 179. Whether or not the injunction appealed from has or can have the effect of settling the instant labor dispute depends on the proof offered and goes to the issue of the sound exercise of legal discretion on the part of the Court below. This phase of the case is discussed at a later point in this opinion.

It may be helpful to restate in a few concrete sentences our conception of the congressional intent as expressed in the Act. The underlying concept is one of tort, tortious conduct which affects the national health or safety. See Section 141(b), quoted supra . That tortious conduct consists of permitting a labor dispute to continue to the point where national health or safety is imperiled. In point of time the action or non-action of employers and employees becomes wrongful when national health or safety is imperiled. The President then states his opinion that such is the case and constitutes a Board of Inquiry which proceeds as required by law but without recommendations, the making of recommendations being expressly prohibited by Section 176, 29 U.S.C.A. The United States then brings a suit such as that at bar and it becomes the duty of the District Court to find or not to find that the circumstances are such, as prescribed in Section 178, that the national health or safety is imperiled. It would, of course, be impossible ordinarily to fix the exact point in time at which the provisions of the Labor-Management Relations Act becomes operative. The peril must exist at the time the jurisdiction of the United States District Court is invoked and it is the duty of the court in the exercise of its sound legal discretion under the Act to issue an injunction if it finds the necessary operative facts.*fn3

In respect to the constitutionality of the Act, the Court of Appeals for the Second Circuit in U.S. v. United Steelworkers of America, supra, at p. 139, said:

"The statute creates the right on the part of the public to be protected from the danger of such a strike or lock-out. Whether there is an existing or threatened strike or lock-out which, under the statute, is an invasion of the rights of the public presents the usual kind of case or controversy which is justiciable by a court."

In U.S. v. International Longshoremen's Ass'n, 116 F. Supp. 262, 265 (S.D.N.Y. 1953), Judge Weinfeld said:

"In exercising jurisdiction under the National Emergencies provisions of the law, the Court acts in the public interest and not in the adjudication of private rights of the contending parties."

It is difficult to quarrel with the congressional objectives.

The legislative history supports our view as to the purposes of the Labor-Management Relations Act. It is true, as the Union points out, that the legislation now embodied in Section 178 as it was originally proposed in the House of Representatives had broader scope. Under it the President would have had the power to seek an injunction whenever "a labor dispute has resulted in, or imminently threatened to result in, the cessation or substantial curtailment of interstate or foreign commerce in transportation, public utility, or communication services essential to the public health, safety, or interest,"*fn4 but in the Senate version, which became what is now Section 178, Senator Taft limited the applicability of the emergency provisions of the statute to situations in which the national "health or safety" was or might become imperiled. But the legislation as enacted nonetheless seems to us to amply embrace the present circumstances.

We are here concerned with the giving of relief by a court of equity in a situation which is alleged to have impaired and seriously menaces the public interest. Cf. Railroad Commission v. Pullman Co ., 312 U.S. 496, 500 (1941), and Virginian Ry. Co. v. System Federation, 300 U.S. 515, 552 (1937). The circumstances of the case at bar are somewhat analogous, albeit in different terms, to those in In re Debs, 158 U.S. 564, 583-590 (1895). In the cited case the United States was held to have locus standi, in effect as parens patriae, to maintain a proceeding in the nature of a suit to abate a public nuisance. This is a classic field for the interposition of the powers of a court of equity.

Without placing blame upon any of the defendants here, the Union or the Steel Companies, it is alleged, and the government insists that it has proved, that their failure to reach an agreement by the processes of collective bargaining has caused them, and it is feared their country with them, to fall into a slough from which it is necessary to lift them, if only for an 80-day period, lest national health and safety be imperiled. The use of the injunction in a labor dispute, so frequently abused in years past, led to the passage of the Norris-LaGuardia Act, 29 U.S.C.A. §§ 101-115, which prohibited the injunction in a bona fide labor dispute. But the Labor-Management Relations Act specifically has limited the exemption against injunctions in labor disputes granted by the Norris-LaGuardia Act. See Section 178(b), 29 U.S.C.A. However undesirable we may deem the use of the injunction in labor disputes to be, nonetheless Congress has seen fit to reinstate it to the limited degree indicated. The old law of the injunction in the labor dispute, to the extent prescribed, seems to have been returned by Congress to at least part of its former standing and we are compelled to adhere to the posture which Congress has placed upon it.

Historically injunctions in labor disputes dealt with the status of groups, sometimes large groups, of employees. Such decrees may perhaps be described, not entirely inaptly, as "status" judgments. Groups of employees were ordered to return to work or face contempt proceedings. Rarely was an employer subject to a decree preventing lockouts, but this is beside the point. When a court enters a status judgment such as that at bar, in our opinion it acts judicially and not legislatively. If this were not so, a substantial portion of the jurisdiction granted to courts of the United States by Congress would fall within the interdiction of Article III, Section 2, of the Constitution. Orders of the National Labor Relations Board frequently would come into such a category, as would orders of the Securities and Exchange Commission, as well as orders of the Interstate Commerce Commission reviewable by the United States district courts under the Urgent Deficiencies Act. Petitions for review of decisions of the United States Tax Court would also fall within the interdiction. Proceedings to require the issuance of a patent by the Commissioner of Patents under R.S. 4915 would also meet the ban, Morgan v. Daniels, 153 U.S. 120 (1894), as would proceedings for naturalization. Tutun v. U.S ., 270 U.S. 568 (1926). Cf. McGrath v. Kristensen, 340 U.S. 162, 167-168 (1950). The line dividing the powers of the legislative tribunal as distinguished from those of the judicial tribunal is of necessity a fine one.

We conclude that the court below was called upon to make and did make a judicial rather than a legislative type of judgment. Our conclusion in this regard is confirmed, we think, by contrasting the statute as enacted with the House proposal which was rejected. The House would have called upon a district court to act whenever in its judgment the public interest was imperiled. This would have left the court at large in deciding the expediency of action guided only by statesmanlike conception of the public welfare. But, as enacted, the statute requires decision whether the evidence adduced in a case shows serious interference with essential national defense activities or threatened impairment of public health. See note 4, supra . This is specific enough and factual enough to bring the inquiry within the area of judicial decision as distinguished from legislative judgment, as in our policy the two are distinguished.

We are of the opinion, for the reasons stated, that the proceeding at bar does constitute a justiciable controversy and does not incur the interdiction asserted by the Union to arise under Article III, Section 2, of the Constitution.

Findings of Fact by the Court Below

All the necessary jurisdictional facts were found by the court below in its findings of fact, Nos. 1 to 16, inclusive. Findings Nos. 9, 10, 11, 12, 13, 15 and 16, however, are set out in this opinion for the benefit of the reviewing Court. They are as follows:

"9. The strike on the part of the Union resulted from unresolved labor disputes between defendant employers, who are engaged in one or more of the various stages of steel production, including the mining and transport of iron ore by railroad or vessel, the operation of blast furnaces for the conversion of iron ore into pig iron, the production of steel ingots, the rolling and shaping of steel ingots into various shapes and forms of steel products, and the fabricating of certain finished products, and certain of their employees represented by the Union.

"10. The Board of Inquiry made an investigation of the issues and attempted to have the defendants resolve the dispute by free and collective bargaining. These efforts on the part of the Board of Inquiry were unsuccessful and the disputes remain unresolved.

"11. The report of the Board of Inquiry concludes that 'the parties have failed to reach an agreement and we see no prospects for an early cessation of the strike. The board cannot point to any single issue of any consequence whatsoever upon which the parties are in agreement.' Unless the Court grants the injunction sought by the United States the strike will continue for an indeterminate period.

"12. The strike affects a substantial part of the steel industry of the United States, which is engaged in trade, commerce and transportation among the several States and with foreign nations and in the production of goods for commerce.

"13. The strike, which commenced on July 15, 1959 and has continued until the present time, has resulted in the closing on July 15, 1959 of facilities producing at least 85% of the total steel production of the United States. Inventories of steel have dropped from 24,800,000 tons on July 15, 1959 to approximately 10,000,000 tons. This is below the normal inventory level and is below the level required to sustain continued production of industries and businesses dependent upon steel products. Approximately 500,000 striking members of the Union are now unemployed and more than 265,000 employees are idle in other industries by reason of the steel strike.The 765,000 unemployed support families numbering over 2,000,000 persons. If the strike were to continue, the total number of workers made idle by it would probably reach approximately 1,775,000 by the end of November and approximately 3,000,000 by the end of December. By that time more than 9,000,000 people would probably be affected by the strike.

"15. The strike, which has now been in existence for more than 95 days, if permitted to continue, will imperil the national health ...

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