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May 6, 1974

NATIONAL LABOR RELATIONS BOARD and Bernard Samoff, Regional Director of the Fourth Region of the National Labor Relations Board, Defendants

Fogel, District Judge.

The opinion of the court was delivered by: FOGEL

FOGEL, District Judge.

This is an action brought by the National Maritime Union of America, AFL-CIO (hereinafter the Union) against the National Labor Relations Board (hereinafter the Board) and its Regional Director, to compel the Board to reinstate the petition, assert jurisdiction, and order a representation election in Contract Services, Inc. (Case No. 4-RC-8995).

 The Board has filed a motion to dismiss the complaint under Rule 12(b) of the Federal Rules of Civil Procedure, asserting First : that this Court has no jurisdiction over the subject matter of the action, and Second : that the complaint fails to state a claim upon which relief can be granted.

 The procedural history of the case may be summarized as follows:

 On January 11, 1971, the Union filed an election petition with the Regional Director of the Fourth Region of the Board, seeking a representation election among a unit of bus drivers, mechanics, dispatchers, and related personnel employed by Contract Services, Inc., in the Panama Canal Zone. The Regional Director dismissed the petition without a hearing, relying on the Board's decision in United Fruit Company, 159 NLRB 135 (1966), direct review denied, National Maritime Union v. NLRB, 267 F. Supp. 117 (S.D.N.Y. 1967). The Union appealed the dismissal of the petition by the Regional Director; however, the Board denied the appeal and held that there was no compelling reason to depart from its decision in United Fruit, in which it had declined to assert jurisdiction in a matter involving attempted unionization of clerical employees of the United Fruit Company in the Panama Canal Zone because of negotiations between the governments of Panama and of the United States relating to future Panamanian sovereignty over the zone.

 The Union thereupon instituted this action in the District Court, seeking to compel the Board to order a representation election, or, in the alternative, to compel it to conduct a hearing on the Union's election petition. The Board filed a motion to dismiss the complaint.

 On November 9, 1971, this Court, per an Order of my former colleague, Judge Masterson, denied the motion to dismiss without prejudice and directed that a hearing be held to determine: First : whether the effect on foreign relations is a valid factor for the Board to consider in declining to assert jurisdiction in the Canal Zone; Second : if so, whether the assertion of jurisdiction would adversely affect relations between the United States and Panama; Third : whether the Canal Zone is a state, foreign country or territory within the definition of commerce in § 2(6) of the Act; and Fourth : whether there were any other reasons why the Court should decline to order the Board to conduct a hearing or an election in the matter.

 Because the Board reconsidered its dismissal of the Union's petition, and remanded the case to the Regional Director for a hearing, the necessity for a hearing in the District Court was obviated. Pursuant to a stipulation entered into by the parties, the proceedings in this Court were stayed pending action by the Board.

 On April 4, 1972, Hearing Officer Solomon S. Spector conducted a hearing and the record was thereafter transmitted to the Board for determination under § 9(c) (1) of the Act. On April 3, 1973, a three-member panel of the Board rendered a decision and once again dismissed the petition of the Union. Contract Services, Inc., 202 NLRB No. 156 (1973).

 The Board found that the employer is a Delaware corporation, engaged in the operation of a local bus system transporting U.S. military dependents to and from school within the Canal Zone, on a five-year fixed cost contract with the U.S. Navy, which contract had been in effect since August 1, 1971. The Board further found that the annual dollar volume of services exceeded $250,000.00, and that annual equipment purchases from the continental United States exceeded $50,000.00. Hence, the Board concluded that "the Employer's volume of business, purchases, and relationship to our national defense bring it within our standards for the assertion of jurisdiction." Contract Services, supra, at p. 3 (slip opinion). Moreover, the Board also concluded that business operations by U.S. employers in the Panama Canal Zone were included within the definition of "commerce" in § 2(6) of the Act, thus vesting the Board with the requisite statutory authority to assert jurisdiction over the matter. Notwithstanding these findings, however, the Board declined to assert jurisdiction because it concluded that such assertion under all of the circumstances of the case would adversely affect relations between the United States and Panama:

* * * we are of the opinion that we ought not at this time reach out to inject further U.S. governmental regulation of matters affecting Panamanian citizens employed in the Canal Zone, when the entire matter of the scope and effect of this country's presence in that zone is a matter undergoing international negotiations. To assert jurisdiction for the first time in this Board's history at this particular juncture would be to risk a negative impact on negotiations. Having refrained thus far from exercising the full extent of our statutory jurisdiction by asserting jurisdiction in this distant area, we see no compelling reason to do so now, and have no desire to take any action which might be a factor in jeopardizing the prospects for a negotiated settlement of the respective rights and duties of the United States and the Panamanian government with respect to Canal Zone matters. Contract Services, supra, at p. 10 (slip opinion)

 On May 22, 1973, the Union filed a motion in this Court to compel the Board to assert jurisdiction in the Canal Zone, and to conduct a representation election pursuant to § 9(c) of the Act. The Board renewed its motion to dismiss the complaint. Extensive memoranda were filed by the parties and oral arguments in support of their respective positions were heard thereafter.

 For the reasons cited in this opinion, we will grant the Board's motion to dismiss the complaint, on the ground that this Court lacks jurisdiction over the subject matter of the action.

 Because of the complexity of the issues presented in this case, we will discuss seriatim the decisions of the Supreme Court and the lower federal courts pertaining to the jurisdiction of a District Court to review representation proceedings of the Board under § 9(c) of the Act.

 I. Leedom v. Kyne

 The Wagner Act became law on July 5, 1935, after a brief and unhappy experience with a predecessor statute, Public Resolution 44, June 19, 1934, 48 Stat. 1183, c. 677, which had permitted immediate judicial review of Board orders in representation proceedings in the Courts of Appeals. The legislative history of the Wagner Act establishes that Congress considered these review provisions to be the chief weakness of Public Resolution 44, because dilatory tactics by employers could indefinitely postpone representation elections. For this reason, § 9 of the Wagner Act was purposefully drawn to exclude any review of representation orders in the Courts of Appeals, except in the single category of cases involving unfair labor practice proceedings pursuant to § 10 of the Act.

 In American Federation of Labor v. N.L.R.B., 308 U.S. 401, 60 S. Ct. 300, 84 L. Ed. 347 (1940), the Supreme Court extensively reviewed this legislative history, and concluded that "Congress, as the result of a deliberate choice of conflicting policies, has excluded representation certifications of the Board from the review by federal appellate courts authorized by the Wagner Act except in the circumstances specified in § 9(d)." AFL, supra, at 411, 60 S. Ct. at 305. The Court expressly rejected the contention that the narrowly circumscribed review provisions of the Act should be relaxed when a union, rather than an employer, was seeking judicial review:

 In a companion case, N.L.R.B. v. International Brotherhood of Electrical Workers, 308 U.S. 413, 60 S. Ct. 306, 84 L. Ed. 354 (1940), the Court applied the same reasoning to election orders of the Board.

 In the AFL and IBEW cases, the Supreme Court construed the internal review provisions of the Wagner Act with respect to the extent that these provisions conferred jurisdiction on Courts of Appeals to directly review the action of the Board. The Court definitively concluded that the statutory scheme which confers jurisdiction must be examined to determine the inherent limitations of that jurisdiction. Thus the Court denied review of Board orders in representation proceedings when such review is sought in the Courts of Appeals, but did not categorically preclude a general judicial review, if original jurisdiction rests with the District Courts pursuant to 28 U.S.C. § 1337. This question was expressly reserved in AFL :

The Board argues that the provisions of the Wagner Act, particularly § 9(d), have foreclosed review of its challenged action by independent suit in the district court * * *. But that question is not presented for decision by the record before us. Its answer involves a determination whether the Wagner Act, in so far as it has given legally enforceable rights, has deprived the district courts of some portion of their original jurisdiction conferred by § 24 of the Judicial Code, 28 U.S.C.A. § 41. It can be appropriately answered only upon a showing in such a suit that unlawful action of the Board has inflicted an injury on the petitioners for which the law, apart from the review provisions of the Wagner Act, affords a remedy. This question can be properly and adequately considered only when it is brought to us for review upon a suitable record. AFL, supra, at 412, 60 S. Ct. at 305.

 Five years later, the Supreme Court again expressly reserved decision on the question of the jurisdiction of the District Courts to review certification proceedings under § 9(c). In Inland Empire District Council v. Millis, 325 U.S. 697, 65 S. Ct. 1316, 89 L. Ed. 1877 (1945), the Court avoided the jurisdictional issue by reaching the merits of the controversy, and concluded that the Board had not acted unlawfully.

Petitioners earnestly urge that this case presents the required showing of unlawful action by the Board and resulting injury. Unless they are right in this view, it would be inappropriate, as was said in the American Federation of Labor Case, to determine the question of reviewability. That question should not be decided in the absence of some showing that the Board has acted unlawfully. Upon the facts presented, we think no such showing has been made, whether by way of departure from statutory requirements or from those of due process of law. Inland Empire, supra, at 700, 65 S. Ct. at 1318.

 The jurisdictional test proposed in AFL and Inland Empire is grounded upon the following three critical bases:

 1. "unlawful" action by the Board;

 2. injury to petitioners; and

 3. a legal remedy, apart from the review provisions of the Wagner Act.

 In essence, the application of an "unlawfulness" test would appear to confer jurisdiction on the District Court for plenary review of any action by the Board, because an allegation of unlawful conduct requires the court, in the first instance, to examine the merits of the case in order to determine the threshold question of jurisdiction.

 Accordingly, the landmark Supreme Court decision in Leedom v. Kyne, 358 U.S. 184, 79 S. Ct. 180, 3 L. Ed. 2d 210 (1958), must be considered within this context. Kyne involved a labor organization which petitioned the Board for certification as the exclusive bargaining agent for all nonsupervisory professional employees at a particular plant. The Board held a hearing on the petition, and concluded that the appropriate bargaining unit included the 233 professional employees in the plant, as well as 9 employees who were found to be non-professional employees, within the meaning of § 2(12) of the Act, but who shared a close community of employment interests with the professional employees. The union requested the Board to take a vote among the professional employees to determine if a majority favored inclusion in a bargaining unit composed of professional and nonprofessional employees. The Board refused to hold such an election, in spite of the clear prohibition of § 9(b) (1) of the Act, which provides that, in determining the unit appropriate for collective bargaining, the Board "shall not * * * decide that any unit is appropriate for such purposes if such unit includes both professional employees and employees who are not professional employees unless a majority of such professional employees vote for inclusion in such [a] unit." The union was subsequently certified as the exclusive bargaining agent for both ...

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