85 F.2d 825 (7th Cir. 1936), 5768, Scavenger Service Corporation v. Courtney

Docket Nº:5768.
Citation:85 F.2d 825
Case Date:July 17, 1936
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit

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85 F.2d 825 (7th Cir. 1936)




No. 5768.

United States Court of Appeals, Seventh Circuit.

July 17, 1936

As Amended on Denial of Rehearing Oct. 1, 1936.

Joseph A. Struett, of Chicago, Ill., for appellant.

Thomas J. Courtney, Jacob Shamberg, William P. Kearney, Harry S. Ditchburne, Charles E. Lounsbury, Nicholas J. Bohling, and Harold J. Ross, all of Chicago, Ill., for appellees.

Before EVANS and SPARKS, Circuit Judges, and BALTZELL, District Judge.

EVANS, Circuit Judge.

This appeal is from a decree dismissing, for want of equity, appellant's bill for injunction and for other relief against appellees. The District Court made findings of fact and conclusions of law (summarized in the margin 1 ) finding no evidence to support appellant's charge that

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a conspiracy existed between appellees (a scavenger association, the local of an A.F.L. union, the State's Attorney, and his chief investigator) to hinder and prevent

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appellant from carrying on a scavenger business in Chicago.

The District Court referred the hearing of the cause to a special master who concluded

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that a conspiracy existed between all appellees except Courtney whereby the union refused to furnish appellant with men because of appellant's price cutting

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practices, which it believed would hurt the members of the scavenger association to such an extent that they would be unable to continue the wage agreement with the union; that the picketing of buildings serviced by appellant was not peaceful picketing within the terms of the Norris-LaGuardia Act (29 U.S.C.A. §§101-115); and that Capt. Gilbert informed building managers, who inquired of him, that appellant was connected with hoodlums.

Appellant is a Delaware corporation formed for the purpose of creating diversity of citizenship so as to maintain this suit. Its predecessor was a corporation formed in Illinois by one Dennis Finn who was in the excavating business but had idle trucks which he decided to use in the scavenger business. He had instituted suit in the state court on substantially the same charges as in the instant suit, but upon the incorporation of appellant and the bringing of the instant suit the state suit was dismissed without prejudice.

The decisive issue is whether a conspiracy existed among the appellees to destroy appellant's business. In view of the fact that the master found such a conspiracy to exist, and the District Court found the contrary, we have read with great care the entire transcript and the exhibits introduced.

The conflict and contradictions in the evidence are absolute and unsolvable. Someone has falsified.

Out of all the testimony the following conclusions may safely be announced as having the weight of the testimony to support them:

(1) Finn, originally in the excavating business, decided to make use of idle trucks and use them in the scavenger business. This was in January, 1934.

(2) Union officials had unemployed members whom they desired Finn to hire out but whom he did not employ, when he first started.

(3) Finn used some scavenger workers, members of the Chicago Teamsters local, a scavenger workers' union, the majority of whose members left the local and formed the new local, No. 731 (an appellee affiliated with the A. F. of L.

(4) 'Studdy' Looney, an alleged gangster, had some connection with the old union-- probably collecting dues. Appellees insisted the reason they would not furnish Finn with men was that he was connected with Looney and other gangsters, through the union, and that one Brookbank whose trucks Finn used, got the trucks from one Munizzio who was in partnership with Looney. Finn said he was not in any was connected with Looney.

(5) Finn asked Local 731 for men and requested that his Chicago Teamster men be permitted to join Local 731. Both requests were refused.

(6) Finn cut rates for scavenger services (but probably maintained union scale of wage). This was without doubt a prime source of trouble with the association.

(7) A meeting was had at the N.R.A. office in July, 1934, where members of the union signed an agreement to furnish Finn men. This agreement was immediately repudiated by the union on various grounds-- that they thought they were signing not an agreement but minutes of the meeting, and that it was never approved by the International union counsel.

(8) Pickets were placed by the union on buildings serviced by Finn, thereby effecting the stoppage of all A.F.L. union deliveries including milk and caused the cancelling of Finn's contract by the building owners or managers. There was evidence that there was no other cause for the cancellation of such contracts except the picketing.

(9) The pickets were paid, ostensibly by cash from the union's cash funds. Union officials vehemently deny the association paid for or ordered the picketing. The union's bookkeeping was very casual and did not rise to the dignity of evidentiary records-- a cash fund was maintained and evidently no record kept of its income or disbursement. There was some evidence of union officials' calling on the association for funds for reimbursement.

(10) Association officials insist they have no agreement forbidding the union from furnishing men to independent scavengers who are not members of the association and cite instances.

(11) There is little evidence of Courtney's actual participation, but much more of his chief investigator, Capt. Gilbert. The latter consulted with both union and Finn and association men. Gilbert had formerly belonged to Chicago Teamsters.

Any of the following reasons may have been the source of the enmity which the appellees undoubtedly bore against appellant:

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(1) The belief that appellant was in some way connected with gangsters; (2) It was openly operating the scavenger business at a cut rate and was successfully depriving members of the association of contracts for servicing buildings; (3) It was using members of the old Chicago Teamsters Union, not affiliated with the A. F. of L.; (4) It had originally refused, or at least failed, to use unemployed members of the A. F. of L. Local.

The law questions presented are: (1) What force has a master's finding of the existence of a conspiracy when overruled by the District Court's finding? Did a conspiracy in fact exist? If so, as to what parties? (2) Is the court deprived of jurisdiction because the appellant reincorporated in Delaware so as to have a diversity of citizenship basis for Federal court jurisdiction? (3) Do the facts of the case bring it within the Norris-LaGuardia Act so that the District Court is without power to issue an injunction? (4) When may a public officer be deemed to have participated in a private conspiracy as distinguished from acting as a public officer?

Rule 61 1/2 of the Equity Rules of the Supreme Court, promulgated May 31, 1932 (28 U.S.C.A.following section 723) defines the weight to be given to a master's finding. It provides

'In all references to a master, either compulsorily by the court in cases where it has the power to make a compulsory reference, or by consent of parties where consent is necessary, whether the reference be of all issues of law and fact, or only particular issues either of law or fact or both, the report of the master shall be treated as presumptively correct, but shall be subject to review by the court, and the court may adopt the same, or may modify or reject the same in whole or in part when the court in the exercise of its judgment is fully satisfied that error has been committed: Provided, That when a case or any issue is referred by consent and the intention is plainly expressed in the consent order that the submission is to the master as an arbitrator, the court may review the same only in accordance with the principles governing a review of an award and decision by an arbitrator.'

In Uihlein v. General Electric Co., 47 F.(2d) 997, we collected the authorities that bore upon the binding efficacy of findings.

Both appellant and appellees filed numerous exceptions to the master's findings and conclusions. The District Court ruled upon these exceptions, allowing some and overruling others. He agreed with the master that Courtney was not involved in the instant controversy, and had no knowledge of his subordinate's action. As to Gilbert, the court was of the belief that he was not in the conspiracy whereas the master held Gilbert was in the conspiracy after the N.R.A. meeting, but not before.

As to the picketing, the court concluded it was peaceable, there being no violence. The court pointed out that if the picketing were unlawful Finn could have complained in the state courts, which he did not even try...

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