Nathanson v. National Labor Relations Board

• Decision Date: 11 February 1952
• Docket Number: No. 4614.,4614.
• Citation: 194 F.2d 248
• Parties: NATHANSON v. NATIONAL LABOR RELATIONS BOARD.
• Court: U.S. Court of Appeals — First Circuit

194 F.2d 248 (1952)

NATHANSON v. NATIONAL LABOR RELATIONS BOARD.

No. 4614.

United States Court of Appeals First Circuit.

February 11, 1952.

Louis K. Nathanson, Boston, Mass., pro se.

Owsley Vose, Washington, D. C. (George J. Bott, Gen. Counsel, David P. Findling, Associate Gen. Counsel, A. Norman Somers, Asst. Gen. Counsel, and Harvey B. Diamond, Attorney, all of Washington, D. C., on brief), for appellee.

Before CLARK, WOODBURY and HARTIGAN, Circuit Judges.

HARTIGAN, Circuit Judge.

This is an appeal by the Trustee in Bankruptcy of MacKenzie Coach Lines, Inc. from an order of the United States District Court for the District of Massachusetts, dated September 28, 1951, setting aside the bankruptcy referee's disallowance of the amended claim of the National Labor Relations Board. The referee was also ordered to permit the matter to stand in abeyance for 2 months to permit the Board, in accordance with the National Labor Relations Act, to fix the precise amount now owing from the bankrupt to the Board and to file with the referee an amendment to its claim showing such amount.

The opinion of the District Court is reported in 100 F.Supp. 489, 490, and recites in part that:

"The National Labor Relations Board has petitioned for review of the order of Referee in Bankruptcy Smart, which disallowed the Board's claim. These are the facts —

"On January 3, 1947 the Board issued a complaint against the present bankrupt and another alleging that they had engaged in unfair labor practices in violation of the National Labor Relations Act, 29 U.S.C.A. § 151 et seq. After appropriate proceedings, the Board on February 4, 1948 ordered the bankrupt to pay certain persons back pay from the date of discrimination found by the Board to the date of an offer of reinstatement. June 7, 1948 an involuntary petition in bankruptcy was filed against the bankrupt. December 7, 1948 the Court of Appeals of this Circuit entered its decree enforcing the Board's order. March 15, 1949 the Board filed with the Referee its proof of claim for the back pay of the persons covered by the court's decree. The Referee held a hearing on April 17, 1950 at which he entertained an amendment to the claim and took evidence. June 29, 1950 the Referee disallowed the claim. His reasons, given in his December 1, 1950 certificate to this court, were that the persons covered by the back pay order were not employees of the bankrupt; that the claims of those persons had, in any event, been compromised by them and the bankrupt; and that the claims were not liquidated."

The trustee's statement of points is as follows:

"1. The Court erred in ruling that a Referee in Bankruptcy has no authority at any stage to rule upon matters involving the question whether a person is an employer under the National Labor Relations Act and the extent to which an employer is obligated to make restitution.

"2. The Court erred in finding that the order of the National Labor Relations Board of February 4, 1948 was a final administrative determination that the future bankrupt was liable to make compensation according to a declared formula.

"3. The Court erred in not ruling that the claim of the National Labor Relations Board was unliquidated.

"4. The Court erred in not ruling that an unliquidated claim shall not be allowed unless liquidated or the amount thereof estimated in the manner and within the time directed by the Bankruptcy Court.

"5. The Court erred in not ruling that the back pay order had been fully complied with.

"6. The Court erred in ruling that the claim filed by the National Labor Relations Board is entitled to priority as a debt owing to the United States under Sec. 64(a) (5) of the Bankruptcy Act."

We believe that the District Court was right in ruling that the Board "* * is the exclusive agency, subject to review by appellate courts of the United States, for determining whether under the National Labor Relations Act, a person is an `employer' of another and obligated to make restitution to that other. § 10(a) of the National Labor Relations Act, as amended. Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41, 58 S.Ct. 459, 82 L.Ed. 638. * * *"

The decree of this court on December 7, 1948 affirmed and enforced the Board's order of February 4, 1948. The Board's order, among other things, required the respondents in the enforcement proceedings, Hill Transportation Company and MacKenzie Coach Lines, Inc., to take affirmative action in making whole in the manner set forth in "the remedy" certain persons whose names appeared in an appendix to the order "for any loss they may have suffered by reason of the respondents' discrimination against them."

In National Labor Relations Board v. Draper Corp., 1 Cir., 159 F.2d 294, 298, this court said: "If, after the entry of an enforcement decree imposing an obligation expressed in terms of a general formula, a bona fide dispute should arise as to the precise obligation of the respondent when the formula comes to be applied to a particular set of facts, there would in such a case be no danger that the respondent would be adjudged in criminal contempt until, after appropriate procedure, the respondent's obligation is determined with the requisite precision and ultimately embodied in a supplemental decree of the enforcement court. * * *" In a footnote to the opinion in National Labor Relations Board v. Bird Mach. Co., 1 Cir., 174 F.2d 404, this court noted the possibility of a supplemental order which would require a petition to this court for enforcement. It is then that the question of the precise amount and extent of the obligation can be passed upon by this court.

Therefore, without laboring the point further, as to the extent of the bankrupt's liability at this time, we pass to the other questions presented.

We are satisfied that the district court was correct in ruling that the Board's order is a judgment under § 63, sub. a(1) of the Bankruptcy Act, 11 U.S.C.A. § 103 sub. a(1), with the reservation however, as indicated above, that it is merely interlocutory as to the extent of the obligation on the back pay issue. See Haynes Stellite Co. v. Chesterfield, 6 Cir., 97 F.2d 985; Bird Mach. Co. case, supra.

The questions remaining now are: (1) can the bankruptcy court liquidate such a claim, and (2) what priority is such a claim entitled to, if any.

In its brief the Board states "* * * the Bankruptcy Act vested in the Bankruptcy Court the power to disallow claims where the claimant has unduly delayed effecting the liquidation of his claims. Accordingly we acknowledged that should the Board unduly delay in commencing back pay proceedings, this might warrrant a court in holding that Section 57(d) of the Bankruptcy Act should prevail. 11 U.S. C.A. § 93, sub. d * * *" That section provides in part for the allowance of unliquidated claims within the time directed by the court and the disallowance of such a claim if it is not capable of liquidation or that liquidation would unduly delay the administration of the estate. The Board argues quite persuasively that it is not guilty of laches in not yet having liquidated its claim in view of the trustee's position that the beneficiaries of the back pay order were not employees of the bankrupt and because of the important legal question as to what agency (Bankruptcy Court or the Board) should liquidate the claim. The determination by the district court appears to us to be reasonable in allowing the Board 2 months to fix the amount of the liability. This ruling has not been demonstrated to us to be inconsistent with the Bankruptcy Act. Rather the ruling appears to give effect to the intent of the National Labor Relations Act, 29 U.S.C.A. § 151 et seq. The Supreme Court said in International Association of Machinists v....