Super Tire Engineering Co. v. McCorkle, 76-1869

Citation550 F.2d 903
Decision Date25 February 1977
Docket NumberNo. 76-1869,76-1869
Parties94 L.R.R.M. (BNA) 2977 SUPER TIRE ENGINEERING COMPANY et al., Appellants, v. Lloyd W. McCORKLE, Commissioner of the Department of Institutions and Agencies of the State of New Jersey, et al., Local 676, Teamsters Union, etc. (Intervenor in District Court).
CourtUnited States Courts of Appeals. United States Court of Appeals (3rd Circuit)

Gerard C. Smetana, William H. DuRoss, III, Borovsky, Smetana, Ehrlich & Kronenberg, Washington, D. C., Herbert G. Keene, Jr., Stradley, Ronon, Stevens & Young, Philadelphia, Pa., for Super Tire Engineering Company, and others; Harold Finkle, New York City, of counsel.

William F. Hyland, Atty. Gen. of New Jersey, Trenton, N. J., for Commissioner of the New Jersey Department of Institutions and Agencies, and Director, New Jersey Division of Public Welfare; Stephen Skillman, Asst. Atty. Gen., of counsel and on brief; Paul Watter, Deputy Atty. Gen., Trenton, N. J., on brief.

Martin F. McKernan, Jr., City Atty., Camden, N. J., for Juanita Dicks, Former Welfare Director for the City of Camden; Frederick Loats, Law Student, of counsel and on brief.

Robert F. O'Brien, Tomar, Parks, Seliger, Simonoff & Adourian, Camden, N. J., for intervenor-appellees.

John D. O'Brien, Michael A. Caldwell, Seyfarth, Shaw, Fairweather & Geraldson, Washington, D. C., for the Transportation Association of America, amicus curiae.

Before ALDISERT and GARTH, Circuit Judges, and McCUNE, District Judge. *

OPINION OF THE COURT

ALDISERT, Circuit Judge.

This appeal raises two parallel issues: whether New Jersey regulations 1 which permit welfare payments to workers on strike are inconsistent with and, therefore, precluded by federal labor policy; and whether those same regulations are inconsistent with and precluded by federal welfare policy. The district court concluded that New Jersey's regulations were not contrary to either federal policy and granted the defendants' motion for summary judgment. Believing that the labor policy issue is foreclosed by Kimbell, Inc. v. Employment Security Commission, 429 U.S. 804, 97 S.Ct. 36, 50 L.Ed.2d 64 (1976), and agreeing with the district court's analysis of the welfare policy issue, we affirm.

I.

This case has been in litigation since 1971, and has been in this court before. The strike that precipitated the action was settled in June, 1971, during the initial proceedings in the district court. That court nevertheless ruled on the merits and an appeal was taken here. Concluding that the settlement of the strike mooted the case, we remanded the proceedings with directions to vacate and dismiss as moot. 469 F.2d 911 (3d Cir. 1972). The Supreme Court granted certiorari to consider the mootness issue and disagreed with our conclusion, holding that "the facts here provide full and complete satisfaction of the requirement of the Constitution's Art. III, § 2, and the Declaratory Judgment Act, that a case or controversy exist between the parties." 416 U.S. 115, 122, 94 S.Ct. 1694, 1698, 40 L.Ed.2d 1 (1974). Accordingly, our judgment was reversed and the case remanded for further proceedings on the merits. Those proceedings have now been held in the district court and a decision has been rendered that New Jersey's practice of paying welfare benefits to strikers is not inconsistent with federal labor or welfare policy. The correctness of that decision is the subject of the present appeal to this court.

II.

The essence of appellants' argument concerning federal labor policy is that New Jersey's welfare payments to workers on strike enhance the economic strength and resiliency of the union in collective bargaining, thereby distorting the bargaining process and interfering with the free operation of economic forces which federal labor policy seeks to preserve in the collective bargaining process. Whatever merit this argument might have had in the past, we believe that it is now foreclosed by the Supreme Court's dismissal for want of a substantial federal question in Kimbell, Inc. v. Employment Security Commission, supra.

A.

Kimbell was an appeal under 28 U.S.C. § 1257(2) 2 from the Supreme Court of New Mexico to the Supreme Court of the United States. In Kimbell, the lower state court, the New Mexico District Court, had made an express finding that "payment of unemployment compensation benefits to the claimants herein (who were on strike) would interfere with the national policy of Federal Labor Law of encouraging self organization and collective bargaining without state interference." This ruling was directly challenged on appeal to the state Supreme Court. Point III of the appellant's brief in chief before that court was as follows:

Payment of unemployment compensation benefits to claimants whose unemployment is due to a labor dispute raises no constitutional conflict with federal labor policy under the supremacy clause of Article VI of the United States Constitution. 3

The New Mexico Supreme Court reversed summarily:

On the basis of the Court's opinion in Albuquerque-Phoenix Express v. Employment Security Commission, 88 N.M. 596, 544 P.2d 1161 (1975), the Judgment of the District Court of the Second Judicial District is reversed.

The cited opinion, Albuquerque-Phoenix Express, had been filed 5 days earlier and adjudicated certain state law issues relating to the payment of unemployment compensation to strikers. In a footnote, however, the New Mexico Supreme Court rejected the notion that such payment might be contrary to federal labor policy:

We note the recent case of Hawaiian Tel. Co. v. State of Hawaii Dept. of L. and I. Rel., 405 F.Supp. 275 (D.Hawaii 1975), wherein the Federal District Court of Hawaii declared that the State of Hawaii's interpretation and application of the "stoppage of work" clause in its Unemployment Compensation Act so impermissibly alters the relative economic strength of union versus employer in their bargaining relationship as to thereby encroach upon the field preempted by the National Labor Relations Act in violation of the supremacy clause of the U.S. Constitution. We do not find this decision persuasive because it totally overlooks the fact that in order to qualify for unemployment compensation a striker must be available for, and actively seeking work.

Albuquerque-Phoenix Express, Inc. v. Employment Security Commission, 88 N.M. 596, 544 P.2d 1161 (1975).

In a motion for rehearing in the New Mexico Supreme Court, counsel for Kimbell, Inc. objected that the federal issue "was not, according to the understanding of counsel for Appellees, raised in the appeal in Albuquerque-Phoenix Express," that the statement in that case was "mere dicta, " and that the issue "should be specifically addressed by this Court in that the matter be clearly presented in further proceedings, if necessary, before the United States Supreme Court." The motion for rehearing was denied, and appeal was subsequently taken to the United States Supreme Court under § 1257(2). According to the Solicitor General's Memorandum for the United States as Amicus Curiae, 4 the question presented to the Supreme Court was "whether New Mexico's limited grant of unemployment compensation benefits to strikers is in conflict with, and thus precluded by, federal labor law." The appeal was dismissed for want of a substantial federal question.

Hicks v. Miranda, 422 U.S. 332, 344, 95 S.Ct. 2281, 2289, 45 L.Ed.2d 223 (1975) teaches that votes "to dismiss for want of a substantial federal question, it hardly needs comment, are votes on the merits of a case." (quoting Ohio ex rel. Eaton v. Price, 360 U.S. 246, 247, 79 S.Ct. 978, 3 L.Ed.2d 1200 (1959)). Of course, in such cases of summary adjudication, it is not always crystal clear what exactly was adjudicated by the Supreme Court. In this case, moreover, we face the double difficulty that the state court decision appealed from was also a summary adjudication. But here we have had the advantage of thorough briefing, including supplemental briefing, and we have been able to examine the relevant state court decisions as well as the pertinent pleadings filed in the New Mexico courts and the United States Supreme Court in Kimbell. We can only conclude that, when the Supreme Court dismissed for want of a substantial federal question in Kimbell, the necessary predicate for that dismissal was a determination that federal labor policy did not preclude the payment of unemployment compensation to strikers. That determination controls the labor policy aspect of this case.

B.

In their Reply and Supplemental Briefs appellants advance essentially three arguments to avoid the peremptory effect of Kimbell. First, citing Herb v. Pitcairn, 324 U.S. 117, 65 S.Ct. 459, 89 L.Ed. 789 (1944) they argue that the state court decision appealed from in Kimbell rested on non-federal grounds and was, therefore, not subject to review in the United States Supreme Court. In a related, but distinct, second argument they contend that the New Mexico Supreme Court did not decide the federal issue in Kimbell and, accordingly, that the Solicitor General's Memorandum "addressed an issue not decided below." Third, they argue, if Kimbell has precedential force, it is nevertheless distinguishable because it involved unemployment compensation, not welfare benefits. These arguments all miss the mark.

Herb v. Pitcairn is a lineal descendant of Mr. Justice Miller's celebrated opinion in Murdock v. City of Memphis, 20 Wall. 590, 22 L.Ed. 429 (1875), which established the principle that the Supreme Court will not review for federal error the judgments of state courts that rest upon independent and adequate state grounds. But that principle is inapplicable to an analysis of Kimbell for the simple reason that there could be no state ground that would be adequate to support New Mexico's payment of unemployment compensation to strikers if such payment were precluded by federal law.

Appellants' second argument is more troublesome but...

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