INTERNATIONAL ASS'N, ETC. v. UNITED CONTRACTORS, ETC.

• Decision Date: 17 July 1973
• Docket Number: No. 71-1947.,71-1947.
• Citation: 483 F.2d 384
• Parties: INTERNATIONAL ASSOCIATION OF HEAT AND FROST INSULATORS AND ASBESTOS WORKERS, ETC., et al., Appellants, v. UNITED CONTRACTORS ASSOCIATION, INC. OF PITTSBURGH, PENNSYLVANIA, a corporation, and Associated Trades and Crafts Union, Appellees.
• Court: U.S. Court of Appeals — Third Circuit

483 F.2d 384 (1973)

INTERNATIONAL ASSOCIATION OF HEAT AND FROST INSULATORS AND ASBESTOS WORKERS, ETC., et al., Appellants, v. UNITED CONTRACTORS ASSOCIATION, INC. OF PITTSBURGH, PENNSYLVANIA, a corporation, and Associated Trades and Crafts Union, Appellees.

No. 71-1947.

United States Court of Appeals, Third Circuit.

Submitted October 5, 1972.

Decided July 17, 1973.

COPYRIGHT MATERIAL OMITTED

Daniel W. Cooper, Stanford A. Segal, Gatz, Cohen & O'Brien, Pittsburgh, Pa., for appellants.

Timothy P. O'Reilly, Bridgeville, Pa., for appellee United Contractors Assn.

Burton C. Duerring, Pittsburgh, Pa., for appellee Associated Trades & Crafts Union.

Before SEITZ, Chief Judge, and FORMAN and HUNTER, Circuit Judges.

OPINION OF THE COURT

FORMAN, Circuit Judge.

International Association of Heat and Frost Insulators and Asbestos Workers; Local Asbestos Workers No. 2, AFL-CIO by Fred Rust, Jr., and officer of said union on its behalf and its members filed a complaint in the United States District Court for the Western District of Pennsylvania. Twenty-seven other unions joined in it, each represented by an officer and the members of the respective unions. (They are referred to herein as the "Unions"). They are all locals of AFL-CIO in various trades, such as plumbers, masons, et. cetera. They named as defendants the United Contractors Association, Inc. of Pittsburgh, Pennsylvania (hereinafter called the "Association"), and Associated Trades and Crafts Union (hereinafter called "Trades and Crafts Union").

The complaint asserts that the Association is a Pennsylvania corporation with an office in Pittsburgh, purporting to represent, for trade association and collective bargaining purposes, members engaged in interstate commerce in the construction industry which they conduct in various counties of the Western District of Pennsylvania; that the Trades and Crafts Union is an unincorporated association purporting to represent, for collective bargaining purposes, employees in the construction industry in the same area, which also maintains an office in Pittsburgh.

The complaint alleges that the Association and the Trades and Crafts Union have entered into a conspiracy and have created combinations for the purposes of restraining trade in interstate commerce and in eliminating competition in the construction industry in the Western District of Pennsylvania; that an object of the illegal combination and conspiracy is to prevent the Unions from representing for collective bargaining purposes employees of the members of the Association and thus to obtain a competitive advantage over employer parties to collective bargaining agreements with the Unions; that in furtherance of the conspiracy to restrain trade and eliminate competition, a scheme was developed whereby the Association was organized with the color of authority to act as bargaining representative for its employer members; that the conspiracy was carried out by the Association in organizing and supporting the Trades and Crafts Union, and that funds to carry out the activities of the Trades and Crafts Union are supplied by the Association through its members by the payment of dues, fines and other items for employees compelled by the Association to be members in the Trades and Crafts Union; that the Association and the Trades and Crafts Union have executed sham collective bargaining agreements, the purpose of which is to permit the employer members of the Association to conduct their business activities free from interference by the 28 unions, to use the agreements to bar organizational efforts undertaken by the Unions and to prevent their employees from becoming members of the Unions.

It is further alleged in the complaint that membership in the Association automatically entitles an employer to membership in the Trades and Crafts Union; that through this dual membership the Association is able to control the activities of both organizations and to destroy competition and restrain trade in the construction industry; that through the conspiracy as above alleged, the Association and the Trades and Crafts Union have prevented the Unions from organizing and representing employees of the members of the Association and have prevented the Unions from performing their rights and duties as duly recognized bargaining representatives of employees engaged in interstate commerce in the building and construction industry.

Finally, it is alleged that through the unlawful conspiracy members of the Unions have been unlawfully denied the right to work and earn wages in the building and construction industry jobs obtained by the members of the Association by reason of the unlawful competitive advantage over employers operating under bona fide collective bargaining agreements with the Unions; that the Association and the Trades and Crafts Union have continued from the inception of their organizations to date in the form of unlawful financial assistance, sham collective bargaining agreements, mutual officers, directors and members and mutual control of the activities of both the Association and the Trades and Crafts Union, and that they will continue their conspiracy and conduct to the irreparable injury of the Unions.

The Unions pray for money damages in a sum unliquidated in nature at the institution of the action, trebled in amount pursuant to Rule 30 of the District Court of the Western District of Pennsylvania, together with reasonable attorneys' fees and costs and an injunction restraining the Association and the Trades and Crafts Union from various activities alleged to comprise the conspiracy designed to eliminate, avoid or destroy competition in interstate commerce.

Association and Trades and Crafts Union attack the complaint by way of motions to dismiss. Association grounded its motion on the failure of the complaint to state a claim against it upon which relief could be granted and that the allegations of conspiracy and acts in furtherance thereof are all based on alleged violations of the National Labor Relations Act as amended which are within the exclusive jurisdiction of the National Labor Relations Board.

Trades and Crafts Union based its motion (1) on lack of jurisdiction in the court over the subject matter since all allegations of the complaint charge violation of the Labor Management Relations Act, subject matter exclusively cognizable by the National Labor Relations Board; (2) that the Clayton Anti-Trust Act supplementing the Sherman Act specifically provides that labor organizations or members thereof shall not be held to be illegal combinations or conspiracies in restraint of trade under the anti-trust laws; and (3) that the complaint fails to state a claim upon which relief can be granted.

Upon the filing of briefs by the parties and a hearing, the District Court filed an opinion dismissing the complaint, 331 F.Supp. 1298.

The District Court carefully reviewed many of the cases which consider the knotty question of when its jurisdiction is preempted by the doctrine of primary jurisdiction in the National Labor Relations Board.¹ Among other things it held:

"In providing immunity for activities which are encouraged or protected by the labor laws from the application of the antitrust laws, the Congress has expressly furnished the judiciary with guidelines for the preservation of the policies of the labor laws. Afforded these guidelines, then, there is no need to apply the preemption principles of Garmon, 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775, and Lockridge, 403 U.S. 274, 91 S.Ct. 1909, 29 L.Ed.2d 473. Rather, the accommodation process should be controlled, as suggested in Allen Bradley Co. v. Local Union No. 3, 325 U.S. 797, 65 S.Ct. 1533, 89 L.Ed. 1939 (1945), by the determination of, `. . . how far Congress intended activities under one of these policies to neutralize the results envisioned by the other.\'

"Conclusively, this seems to be the clear and controlling import of Local Union No. 189, Amalgamated Meat Cutters of North America v. Jewel Tea Co., 381 U.S. 676, 85 S.Ct. 1596, 14 L.Ed.2d 640 (1965). In that case the Supreme Court squarely resolved in the negative, the question of,

"`Whether a claimed violation of the Sherman Antitrust Act which falls within the regulatory scope of the National Labor Relations Act is within the exclusive primary jurisdiction of the National Labor Relations Board.\'

"Thus, the jurisdiction of this Court to entertain the instant action is not preempted by the doctrine of primary jurisdiction and we turn to determine whether or not the alleged activities are substantively immune from an antitrust attack." International Ass\'n of H. & F. I. & A. W. v. United Con. Ass\'n, 331 F.Supp. 1298, 1300 (1971).

Having ruled that it had jurisdiction, the District Court turned to the determination whether the alleged activities are substantively immune from an antitrust attack. Again the District Court made an exhaustive canvass of the provisions of the antitrust laws² and cases³ bearing on this issue and concluded:

"Notwithstanding the bald conclusion that competition in the construction industry of Western Pennsylvania is adversely affected by the instant collective bargaining agreement (competition in which the plaintiffs, in any event, have no justiciable interest), the plaintiffs in this case allege no facts which would even remotely taint the immunity provided the defendant Associated Trades from the antitrust laws. By § 6 of the Clayton Act, the existence of Associated Trades is expressly insulated from the antitrust laws. As to the collective bargaining agreement, the competition which it is alleged to foreclose is not that in a market in which the non-labor group competes, but rather that of the competition between labor organizations for the right to represent certain employees. This competition is clearly not the concern of the antitrust laws. Footnote omitted. Further, the aid of which the plaintiffs complain in the

...