National Labor Relations Board v. Townsend

• Decision Date: 22 November 1950
• Docket Number: No. 12362.,12362.
• Citation: 185 F.2d 378
• Parties: NATIONAL LABOR RELATIONS BOARD v. TOWNSEND.
• Court: U.S. Court of Appeals — Ninth Circuit

185 F.2d 378 (1950)

NATIONAL LABOR RELATIONS BOARD v. TOWNSEND.

No. 12362.

United States Court of Appeals Ninth Circuit.

September 11, 1950.

Rehearing Denied November 22, 1950.

COPYRIGHT MATERIAL OMITTED

David P. Findling, Associate Gen. Counsel, National Labor Relations Board, A. Norman Somers, Asst. Gen. Counsel, Abraham H. Maller, all of Washington, D. C., and Charles K. Hackler, Attys., National Labor Relations Board, Los Angeles, Cal., for petitioner.

Findlay A. Carter, Frederick A. Potruch and Carter & Potruch, all of Los Angeles, Cal. (James M. Nicoson, Los Angeles, Cal., of counsel), for respondent.

Before DENMAN, Chief Judge, and STEPHENS and ORR, Circuit Judges.

DENMAN, Chief Judge.

This is a petition by the National Labor Relations Board pursuant to the National Labor Relations Act, as amended,¹ hereinafter called the Act, for the enforcement of its order directing respondent to cease and desist from certain unfair labor practices, to reinstate with back pay three employees and to take other action. Respondent resists on the ground that the Board lacks jurisdiction because the claimed unfair labor practices were not proved to affect interstate commerce.

Respondent is the proprietor of the "M. L. `Red' Townsend's Garage" in Santa Maria, California. He sells new and used automobiles, automotive parts and supplies, and does automobile repair work. His sales of new automobiles are confined to Hudson automobiles purchased from the Hudson Sales Corporation located in Los Angeles, California. All such automobiles are picked up by respondent in that city.

Pursuant to a complaint filed in 1948 proceedings were had culminating in the order sought to be enforced. The Board determined that respondent's activities were within the purview of the Act, finding that in the year 1947 the respondent sold new Hudson automobiles purchased from the Hudson Sales Corporation to the extent of $70,770, and that in 1948, the time of the admitted unfair labor practices, was engaged in the same business. The Board also found "that a substantial portion of the Respondent's business involved the sale of new Hudson automobiles which were originally shipped from points outside the State of California."

The basis of the latter finding consisted of a decision,² of which the Board took judicial notice, wherein the Board had held that the Hudson Sales Corporation was engaged in interstate commerce because in 1946 a large portion of the automobiles, accessories and parts the Sales Corporation was selling had been shipped to it from points outside the State of California.

The respondent was not a party to this prior proceeding against the Hudson Sales Corporation but, although twice notified that he might do so, the respondent did not avail himself of a twenty day period allowed by the Board's Regulation 203.46³ to object to receipt in evidence of the prior decision by the questionable procedure of taking judicial notice thereof or to the finding of basic fact rested thereon.

We think the failure to make such objection precludes respondent from here claiming error in the admission of such evidence or contesting the finding that the new automobiles sold by respondent were originally shipped from points outside the state.⁴ Section 10 (e) provides, inter alia, that "No objection that has not been urged before the Board, its member, agent, or agency, shall be considered by the court, unless the failure or neglect to urge such objection shall be excused because of extraordinary circumstances." Respondent presents various arguments as to why Section 10(e) does not apply. He contends in substance, that he was deprived of the right to be confronted with the evidence and so could not explain or refute it and that the Act requires that the Board base its decision upon evidence in the record. These arguments would of course apply in every case where the useful device of judicial notice was utilized. We are not prepared to say that administrative agencies may never take judicial notice.

The Administrative Procedure Act⁵ recognizes that in a proper case judicial notice may be taken, Section 7 (d) providing that "Where any agency decision rests on official notice of a material fact not appearing in the evidence in the record, any party shall on timely request be afforded an opportunity to show the contrary." And Section 10 (b) of the National Labor Relations Act provides that an unfair labor practice proceeding "shall, so far as practicable, be conducted in accordance with the rules of evidence applicable in the district courts of the United States under the rules of civil procedure * * *". The district courts can take judicial notice.

The further contention is advanced that to foreclose respondent from challenging the action of the Board in taking judicial notice is to confer jurisdiction by consent. We cannot agree. It is enough to rebut this contention to point out that if the decision of the Board in the Matter of Hudson Sales Corporation had been offered and received in evidence at the hearing without objection by the respondent he could not now assign such admission as error. This would be so even though exception was taken to the Board's ultimate finding of fact that respondent's activities were such as to fall within Section 2(6) and (7).⁶ In substance, that is what happened here, for respondent was given an opportunity to object to the action of the Board.

From its prior decision, the Board found as a fact that the new automobiles sold by respondent originated out-of-state. In the absence of any objection we must accept that finding. The rule that jurisdiction cannot be conferred by consent does not go so far as to require a court to redetermine the existence of probative facts which, without objection, the trier of fact has found to exist from evidence before it. As was observed in United States v. Wilson, 10 Cir., 78 F.2d 465, 467, "Where jurisdiction of the trial court depends upon the existence of a fact, that fact must be proven if put in issue by the pleadings; but if the losing party complains of error of the trial court with regard to that fact, such error must be preserved in the record below and assigned and specified as error here. United States v. Kiles, 8 Cir., 70 F.2d 880; United States v. Ellison, 4 Cir., 74 F.2d 864, 869; Vincent v. United States, 64 App.D. 178, 76 F.2d 428."

The opportunity to object here afforded also disposes of any due process objections. Due process deals with substance, not with form. Cf. Market Street R. Co. v. Railroad Commission, 324 U.S. 548, 562, 65 S.Ct. 770, 89 L.Ed. 1171.

The questions then remain whether the business of the respondent in selling new Hudson automobiles is one in which a labor dispute would affect commerce within the meaning of the Act and, if the answer is in the affirmative, whether the power of Congress under the commerce clause reaches so far. Bearing in mind that the scope of the Act extends to all labor disputes affecting interstate commerce that Congress can constitutionally reach and that in the Act "Congress has explicitly regulated not merely transactions or goods in interstate commerce but activities which in isolation might be deemed to be merely local but in the interlacings of business across state lines adversely affect such commerce," Polish National Alliance of U. S. v. N. L. R. B., 322 U.S. 643, 648, 64 S.Ct. 1196, 1199, 88 L.Ed. 1509, we think both questions must be answered in the affirmative.

As noted above, respondent's sales of new automobiles are confined to Hudson automobiles. These automobiles, which we must assume originated out-of-state, are purchased through a "Hudson Distributor-Master Dealer Sales Agreement" with the Hudson Sales Corporation of Los Angeles. As a "Master Dealer," respondent has the exclusive rights to sell Hudson vehicles within the limits of Santa Maria. During 1947 respondent's total volume of business amounted to $346,341. Sales of new Hudson automobiles purchased from Hudson Sales Corporation accounted for $70,770 of this total volume.

We think it apparent that the cessation of respondent's business due to a strike caused by its unfair labor practices would inevitably decrease the number of automobiles brought from without the state by the Hudson Sales Corporation during the period when respondent ceased to buy them because of a strike-caused stoppage of its business of selling them.

Such a decrease might be relatively small. It might be possible to buy new Hudsons outside of Santa Maria and respondent's business is not large. However, in N. L. R. B. v. Bradford Dyeing Ass'n, 310 U.S. 318, 326, 60 S.Ct. 918, 84 L.Ed. 1226, it was noted that the possibility of turning to another source of supply is not controlling. And unless the volume of commerce that might be affected is so slight as to bring into play the maxim de minimis, the applicability of the Act is not dependent upon the amount of commerce affected. N. L. B. R. v. Fainblatt, 306 U.S. 601, 607, 307 U.S. 609, 59 S.Ct. 668, 83 L.Ed. 1014. With respondent's sales of new automobiles amounting to $70,770, it is obvious that there is here no room for the application of the maxim de minimis.

Further, as the Supreme Court has said, "Whether or no practices may be deemed by Congress to affect interstate commerce is not to be determined by confining judgment to the quantitative effect of the activities immediately before the Board. Appropriate for judgment is the fact that the immediate situation is representative of many others throughout the country, the total incidence of which if left unchecked may well become far-reaching in its harm to commerce." Polish National Alliance of U. S. v. N. L. R. B., supra, 322 U.S. page 648, 64 S.Ct. page 1199. For us to hold that respondent is beyond the Board's jurisdiction would allow countless like retailers of new automobiles to engage in unfair labor practices with impunity. The results might well be drastic.

The...