APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY (D.C. Civil Action No. 853-71).
Aldisert and Garth, Circuit Judges, and McCune, District Judge.*fn*
This appeal raises two parallel issues: whether New Jersey regulations*fn1 which permit welfare payments to workers on strike are inconsistent with and, therefore, precluded by federal labor policy; and whether those same regulations are inconsistent with and precluded by federal welfare policy. The district court concluded that New Jersey's regulations were not contrary to either federal policy and granted the defendants' motion for summary judgment. Believing that the labor policy issue is foreclosed by Kimbell, Inc. v. Employment Security Commission, 429 U.S. 804, 45 U.S.L.W. 3247, 50 L. Ed. 2d 64, 97 S. Ct. 36 (1976), and agreeing with the district court's analysis of the welfare policy issue, we affirm.
This case has been in litigation since 1971, and has been in this court before. The strike that precipitated the action was settled in June, 1971, during the initial proceedings in the district court. That court nevertheless ruled on the merits and an appeal was taken here. Concluding that the settlement of the strike mooted the case, we remanded the proceedings with directions to vacate and dismiss as moot. 469 F.2d 911 (3d Cir. 1972). The Supreme Court granted certiorari to consider the mootness issue and disagreed with our conclusion, holding that "the facts here provide full and complete satisfaction of the requirement of the Constitution's Art. III, § 2, and the Declaratory Judgment Act, that a case or controversy exist between the parties." 416 U.S. 115, 122, 94 S. Ct. 1694, 40 L. Ed. 2d 1 (1974). Accordingly, our judgment was reversed and the case remanded for further proceedings on the merits. Those proceedings have now been held in the district court and a decision has been rendered that New Jersey's practice of paying welfare benefits to strikers is not inconsistent with federal labor or welfare policy. The correctness of that decision is the subject of the present appeal to this court.
The essence of appellants' argument concerning federal labor policy is that New Jersey's welfare payments to workers on strike enhance the economic strength and resiliency of the union in collective bargaining, thereby distorting the bargaining process and interfering with the free operation of economic forces which federal labor policy seeks to preserve in the collective bargaining process. Whatever merit this argument might have had in the past, we believe that it is now foreclosed by the Supreme Court's dismissal for want of a substantial federal question in Kimbell, Inc. v. Employment Security Commission, supra.
Kimbell was an appeal under 28 U.S.C. § 1257(2)*fn2 from the Supreme Court of New Mexico to the Supreme Court of the United States. In Kimbell, the lower state court, the New Mexico District Court, had made an express finding that "payment of unemployment compensation benefits to the claimants herein [who were on strike] would interfere with the national policy of Federal Labor Law of encouraging self organization and collective bargaining without state interference." This ruling was directly challenged on appeal to the state Supreme Court. Point III of the appellant's brief in chief before that court was as follows:
Payment of unemployment compensation benefits to claimants whose unemployment is due to a labor dispute raises no constitutional conflict with federal labor policy under the supremacy clause of Article VI of the United States Constitution.*fn3
The New Mexico Supreme Court reversed summarily:
On the basis of the Court's opinion in Albuquerque-Phoenix Express v. Employment Security Commission 88 N.M. 596, 544 P.2d 1161 (1975), the Judgment of the District Court of the Second Judicial District is reversed.
The cited opinion, Albuquerque-Phoenix Express, had been filed 5 days earlier and adjudicated certain state law issues relating to the payment of unemployment compensation to strikers. In a footnote, however, the New Mexico Supreme Court rejected the ...