324 U.S. 9 (1945), 86, Regal Knitwear Co. v. National Labor Relations Board

Docket Nº:No. 86
Citation:324 U.S. 9, 65 S.Ct. 478, 89 L.Ed. 661
Party Name:Regal Knitwear Co. v. National Labor Relations Board
Case Date:January 29, 1945
Court:United States Supreme Court

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324 U.S. 9 (1945)

65 S.Ct. 478, 89 L.Ed. 661

Regal Knitwear Co.

v.

National Labor Relations Board

No. 86

United States Supreme Court

Jan. 29, 1945

Argued December 8, 1944

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE SECOND CIRCUIT

Syllabus

1. A cease and desist order of the National Labor Relations Board and an order of the Circuit Court of Appeals for its enforcement may validly provide that the order shall apply to the employer's "successors and assigns." P. 16.

2. An order of the Circuit Court of Appeals for the enforcement of a cease and desist order of the Board, though applying in terms to "successors and assigns," would have a scope no broader than that prescribed by Rule 65 of the Rules of Civil Procedure for the District Courts --

Every order granting an injunction and every restraining order . . . is binding only upon the parties to the action, their officers, agents, servants, employees, and attorneys, and upon those persons in active concert or participation with them who receive actual notice of the order by personal service or otherwise.

P. 14.

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3. Whether one brings himself in contempt of an enforcement order as a "successor" or "assign" depends on an appraisal of his relations and behavior, not upon mere construction of the terms of the order. P. 15.

140 F.2d 746 affirmed.

Certiorari, 323 U.S. 692, to review a decree granting enforcement of an order of the National Labor Relations Board.

JACKSON, J., lead opinion

MR. JUSTICE JACKSON delivered the opinion of the Court.

The National Labor Relations Board, after appropriate proceedings, issued a cease and desist order against the petitioner, 49 N.L.R.B. 560, and thereafter obtained from the Circuit Court of Appeals for the Second Circuit an order for its enforcement. 140 F.2d 746. We granted certiorari, limited to a single question on which there was a conflict in practice between different circuits . 323 U.S. 692. The Board has followed the formula which orders not only a particular respondent but also "its officers, agents, successors and assigns" to cease and desist. The question is whether enforcement will be granted without deleting "successors and assigns" from those enjoined. The Circuit Court of Appeal for the First, Second, Third, Fourth, and Eighth Circuits and the Court of Appeals for the District of Columbia have upheld the authority of the Board to include such a provision.1 In some of these cases,

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change of ownership was shown to be probable, and in other cases there was no such proof. The Second Circuit, in refusing to delete the provision, said:

In allowing these words to stand, we wish to make it clear, however, that we do not hold that a "successor" or an "assign" will be in contempt of our order if it should (even after notice of the order, but without participating with the respondent in any disobedience by it) do exactly those things which the order forbids. In other words, we do not hold that those words impose any liability which would not exist without them.

Labor Board v. Blackstone Mfg. Co., 123 F.2d 633, 635; see also Bethlehem Steel Co. v. Labor Board, 74 App.D.C. 52, 120 F.2d 641, 650, 651. The Circuit Court of Appeals for the Seventh Circuit, on the other hand, consistently eliminates the provision as to successors and assigns from the order,2 but recognizes that successors or assigns, under some circumstances, [65 S.Ct. 480] are bound by the Board's order even without the words.3

When one court of appeals strikes out the provision but says its absence may in some circumstances have the same effect as if it were there, and another court of appeals approves the provision but says its presence may have no more effect than if it were out, there is more than a faint suggestion that the conflict is over semantics, rather than over practical realities.

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The formula that includes successors and assigns, among others, is one probably borrowed from the jargon of conveyancing. Doubtless these words often are used not out of consideration of their appropriateness, but because of their familiarity. Courts of equity sometimes have used this formula in their decrees.4 Before the enactment of the Labor Relations Act, the Federal Trade Commission issued orders containing these familiar provisions.5 The Securities and Exchange Commission has done the same.6 The Bituminous Coal Division of the Department of the Interior does likewise.7 The National Labor Relations Board has employed this formula consistently since 1937,8 and some state labor boards have followed the example.9 Not only have circuit courts of appeals, except of the Seventh Circuit, generally enforced orders containing this provision, but this Court has several times done so. Southport Petroleum Co. v. Labor Board, 315 U.S. 100, 106, note 6.10

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The dearth of cases in which actual controversies have been precipitated by this [65 S.Ct. 481] more general than discriminating use of this ritual indicates that its significance both for good and ill is greater in anticipation than in retrospect.

Administrative agencies have considerable latitude to shape their remedies within the scope of their statutory authority, and, where the infirmity is inadequacy of findings to show appropriateness of the choice made in the particular case, are ordinarily entitled to have the case remanded for further consideration. Phelps Dodge Corp. v. Labor Board, 313 U.S. 177, 194; Addison v. Holly Hill Fruit Products Inc., 322 U.S. 607, 616. The courts, nevertheless, may not grant an enforcement order or injunction so broad as to make punishable the conduct of persons who act independently and whose rights have not been adjudged according to law. Chase National Bank v. Norwalk, 291 U.S. 431, 436-437; Hitchman Coal & Coke Co. v. Mitchell, 245 U.S. 229, 234; Scott v. Donald, 165 U.S. 107, 117; Alemite Mfg. Corp. v. Staff, 42 F.2d 832.

The Federal Rules of Civil Procedure provide that:

Every order granting an injunction and every restraining order . . . is binding only upon the parties to the action

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their officers, agents, servants, employees, and attorneys, and upon those persons in active concert or participation with them who receive actual notice of the order by personal service or otherwise.11

This is derived from the common law doctrine that a decree of injunction not only binds the parties defendant, but also those identified with them in interest, in "privity" with them, represented by them, or subject to their control. In essence, it is that defendants may not nullify a decree by carrying out prohibited acts through aiders and abettors, although they were not parties to the original proceeding.

The term "successors and assigns" in an enforcement order, of course, may not enlarge its scope beyond that defined by the Federal Rules of Civil Procedure. Successors and assigns may, however, be instrumentalities through which defendant seeks to evade an order or may come within the description of persons in active concert or participation with them in the violation of an injunction. If they are, by that fact, they are brought within scope of contempt proceedings by the rules of civil procedure. We have indicated that Labor Board orders are binding upon successors and assigns who operate as "merely a disguised continuance of the old employer." Southport Petroleum Co. v. Labor Board, 315 U.S. at 106. We have also...

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