17 F.Supp. 225 (M.D.Ala. 1936), 692, Gulf States Paper Corporation v. Carmichael

Docket Nº:692, 691.
Citation:17 F.Supp. 225
Party Name:GULF STATES PAPER CORPORATION v. CARMICHAEL, Atty. Gen. of Alabama, et al.* *Motion for modification of injunction granted 57 S.Ct. 614, 81 L.Ed. . SOUTHERN COAL & COKE CO. v. SAME.
Case Date:December 15, 1936
Court:United States District Courts, 11th Circuit, Middle District of Alabama

Page 225

17 F.Supp. 225 (M.D.Ala. 1936)



CARMICHAEL, Atty. Gen. of Alabama, et al.*

*Motion for modification of injunction granted 57 S.Ct. 614, 81 L.Ed. .




Nos. 692, 691.

United States District Court, M.D. Alabama,

Dec. 15, 1936

Page 226

Borden Burr, of Birmingham, Ala., Neil P. Sterne, of Anniston, Ala., and Marion Rushton, of Montgomery, Ala., for plaintiff in No. 691.

Forney Johnston, Joseph F. Johnston and Lucien D. Gardner, Jr., all of Birmingham, Ala., for plaintiff in No. 692.

A. A. Carmichael, Atty. Gen., of Alabama, and Inge & Stallworth, of Mobile, Ala., for defendants.

Before SIBLEY, Circuit Judge, and KENNAMER and ERVIN, District Judges.



The Federal Social Security Act was approved August 14, 1935 (42 U.S.C.A.§§ 301-1305). The Alabama Unemployment Compensation Law was approved September 14, 1935 (Gen.Acts 1935, p. 950) and amended by three acts approved April 21, 1936 (Gen.Acts 1936, Ex.Sess. pp. 176, 225, 228). The Alabama act follows the suggestions or requirements of the Social Security Act and has been approved by the Federal Social Security Board. The Alabama act creates the Alabama Unemployment Compensation Commission to administer it, and its enforcement in court is required of the Attorney General of Alabama. Under the Alabama act reports by employers have been required and payments, being pay roll percentages in part deducted from employees' pay and in part paid by the employers, are already due and demanded. Failures to comply are punishable by cumulative penalties and by criminal prosecutions, all requiring court action. Two bills have been filed in this court seeking preliminary and permanent injunctions and other relief, against the members of the Alabama Unemployment Compensation Commission and the Attorney General of Alabama, one by the Southern Coal & Coke Company and one by the Gulf States Paper Company, and have been heard together by a court of three judges on the same evidence, and on their respective pleadings. The Alabama act is assailed as unconstitutional both under the equal protection and due process clauses of the Fourteenth Amendment, and under the Alabama Constitution, and the Social Security Act which is contended to be necessarily involved in the Alabama act is assailed as being not within the powers of Congress and in violation of the due process clause of the Fifth Amendment. Other constitutional difficulties are alleged. Both preliminary and permanent injunctions are now for decision.

Findings of Fact.

1. There is in each case diversity of citizenship and more than $3,000 involved exclusive of interest and costs.

2. If payment be made of the sums demanded, their recovery, if the act be unconstitutional, would be uncertain and difficult, no clear and adequate remedy at law being apparent, and there would arise a multiplicity of suits with employees whose pay was withheld. If payment be refused so as to test the validity of the act by a forced collection, penalties and criminal liabilities would be incurred if the act be valid, both numerous and serious, so that the remedy by resistance at law is not safe and adequate. The remedy here sought in equity is more certain and effectual.

3. The act seeks to alleviate the public evils and private hardships of unemployment. The evidence, aided by common knowledge, shows that Alabama was originally and still is predominantly an agricultural state, and that in agriculture unemployment is not an acute problem. The land may always be tilled and will yield a living, though business conditions be adverse, and even the old and the ill are generally worth their keep on a farm. The development of capitalistic industry has created a great class who work...

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