Golden State Transit Corp. v. City of Los Angeles, 87-6074

Decision Date15 September 1988
Docket NumberNo. 87-6074,87-6074
Citation857 F.2d 631
Parties129 L.R.R.M. (BNA) 2401, 57 USLW 2263, 110 Lab.Cas. P 10,763 GOLDEN STATE TRANSIT CORP., a California corporation, d/b/a Yellow Cab of Los Angeles, Plaintiff-Appellant, v. CITY OF LOS ANGELES, a municipal corporation, Defendant-Appellee.
CourtU.S. Court of Appeals — Ninth Circuit

Zachary D. Fasman, Paul, Hastings, Janofsky & Walker, Washington, D.C., for plaintiff-appellant.

John F. Haggerty, Asst. City Atty., Los Angeles, Cal., for defendant-appellee.

Appeal from the United States District Court for the Central District of California.

Before WALLACE, ALARCON and BEEZER, Circuit Judges.

BEEZER, Circuit Judge:

In Golden State Transit Corp. v. City of Los Angeles, 475 U.S. 608, 618, 106 S.Ct. 1395, 1401, 89 L.Ed.2d 616 (1986), the Supreme Court held that the City of Los Angeles ("City") could not condition renewal of a taxi company's franchise on settlement of a labor dispute. The Court observed that such an action "destroyed the balance of power designed by Congress [in the National Labor Relations Act], and frustrated Congress' decision to leave open the use of economic weapons." Id. at 619, 106 S.Ct. at 1401. The Court concluded that Congress had preempted intrusion by "a local government" into the collective bargaining process by enacting the NLRA, section 8(d), as amended, 29 U.S.C. Sec. 158(d). The case was remanded to the district court for further proceedings.

On remand, appellant Golden State Transit Corporation ("Golden State") sought damages from the City for nonrenewal of its franchise. The district court concluded that it had the authority to grant injunctive relief and also ancillary monetary relief, but that it did not have the authority to grant compensatory damages under 42 U.S.C. Sec. 1983, based on an alleged NLRA violation or Supremacy Clause preemption. The Court also found that it did not have the authority to award damages under any inherent power it possessed. The district court certified the question for interlocutory We affirm.

appeal, 660 F.Supp. 571 (C.D.Cal.1987). Golden State has appealed.

I

On April 1, 1986, the Supreme Court concluded that the City's decision to condition renewal of the settlement of a labor dispute could be enjoined under the National Labor Relations Act ("NLRA"). Golden State, 475 U.S. at 619-20, 106 S.Ct. at 1401-02. The facts preceding the Supreme Court decision are as follows:

In early 1980, Golden State, which operated a taxicab company, applied to the City for renewal of an operating franchise. Golden State operated 400 cabs. The franchise was due to expire on March 31, 1981.

In October 1980, before the renewal decision was taken up by the City, a labor contract with Golden State's drivers expired. A short-term labor contract was negotiated between Golden State and its drivers, to end on February 10, 1981.

On February 11, 1981, Golden State's drivers struck. In view of the strike, the City postponed action on renewal of Golden State's franchise until February 17, 1981.

On February 17, 1981, the City Council decided to extend Golden State's franchise from March 31, 1981 to April 30, 1981, on condition that, prior to March 27, 1981, the Council decided that such an extension was in the best interests of the City. On March 23, 1981, the Council held a public hearing on the "best interests" question. The dominant issue discussed at the hearing was the drivers' strike.

For a variety of reasons, the Council decided to condition renewal of Golden State's taxicab franchise on settlement of its labor dispute. See Golden State, 475 U.S. at 610-11, 106 S.Ct. at 1396-97. A subsequent motion to extend the franchise was defeated.

On March 31, 1981, the Golden State Taxicab franchise expired.

In federal court, Golden State sought injunctive relief and damages from the City. The district court found "undisputed [the fact] that the sole basis for refusing to extend [Golden State's] franchise was its labor dispute with its ... drivers," 520 F.Supp. 191, 193 (C.D.Cal.1981). The court also found that the City had "threaten[ed]" to terminate the franchise unless Golden State settled its labor dispute, id. at 194, and that the City had denied Golden State an "essential weapon of economic strength--the ability to wait out a strike." Golden State, 475 U.S. at 611-12, 106 S.Ct. at 1397.

On the basis of Golden State's claim that the NLRA preempted the City's intrusion into the collective bargaining process, the district court granted Golden State's motion for a preliminary injunction.

On appeal by the City, we found "ample evidence" to support the injunction, but dissolved it after concluding that Golden State had only a small likelihood of prevailing on the merits. Golden State, 686 F.2d 758, 761-62 (9th Cir.1982). Golden State's petition for certiorari was denied by the Supreme Court. Golden State, 459 U.S. 1105, 103 S.Ct. 729, 74 L.Ed.2d 954 (1983).

Thereafter, the district court granted summary judgment for the City. We affirmed this decision, holding that the City's intrusion was not preempted by Congress' enactment of the NLRA. Golden State, 754 F.2d 830, 832 (9th Cir.1985). The Supreme Court reversed and remanded. The Supreme Court held that, under International Ass'n of Machinists and Aerospace Workers, AFL-CIO v. Wisconsin Employment Relations Comm'n, 427 U.S. 132, 96 S.Ct. 2548, 49 L.Ed.2d 396 (1976), the City's action interfered with " 'the free play of economic forces' [citation omitted]" in collective bargaining between the company and its drivers, Golden State, 475 U.S. at 614, 106 S.Ct. at 1398, and that such a local action--conditioning franchise renewal on labor dispute settlement--was precluded, since collective bargaining was precisely the conduct which " 'Congress intended to be unregulated.' " Golden State, 475 U.S. at 614, 106 S.Ct. at 1398, quoting Metropolitan Life Ins. v. Massachusetts, 471 U.S. 724, 749, 105 S.Ct. 2380, 2394, 85 L.Ed.2d 728 (1985). The Supreme Court agreed On remand, the district court ordered the City to grant Golden State a four-year franchise and ancillary monetary relief sufficient to "salvage" Golden State. The court determined that the ancillary relief would be limited to the fair market value of Golden State's assets as of the date of the City's action, less any sum Golden State received pursuant to bankruptcy proceedings.

with Golden State that the NLRA preempted this action by the City.

During remand proceedings, the district court ordered briefing and argument on the question whether it had authority to grant additional compensatory damages to Golden State.

Following full briefing and argument, the district court concluded that it did not have authority to grant further compensatory damages. Golden State, 660 F.Supp. at 571. The court cited three reasons: First, Golden State was not entitled to damages under 42 U.S.C. Sec. 1983 for the alleged NLRA "violation" by the City. Second, while the Supremacy Clause preempted State law, it did not entitle Golden State to damages under 42 U.S.C. Sec. 1983. Third, the district court had no inherent authority to award further damages.

The district court stayed trial on the amount of ancillary monetary relief to certify the compensatory damage question for interlocutory appeal. Golden State, 660 F.Supp. at 582.

Golden State timely appeals. We have jurisdiction pursuant to 28 U.S.C. Sec. 1292(b).

II

On appeal, Golden State claims, first, that compensatory damages are available under 42 U.S.C. Sec. 1983, as a result of the City's denial of rights created under the NLRA. Second, Golden State claims that the Supremacy Clause entitles it to an award of damages under section 1983, since there was "direct and actual conflict" between the City's conduct and federal law. Finally, Golden State claims that federal courts have inherent authority to award complete relief where federal statutory or constitutional rights are violated, and that such rights are violated here.

A

Golden State first premises its section 1983 claim for compensatory damages on the City's alleged "violation" of the NLRA.

Golden State claims that the City's denial of the NLRA-conferred "right" to unregulated settlement of its labor dispute creates an entitlement, under section 1983, to damages against the City.

Golden State observes that section 1983 permits recovery for "violation" of a federal statute where that statute creates substantive, enforceable rights. See Maine v. Thiboutot, 448 U.S. 1, 100 S.Ct. 2502, 65 L.Ed.2d 555 (1980) (violation of statute by failure to consider specific factors relevant to aid for dependent children permits section 1983 relief); Pennhurst State School and Hospital v. Halderman, 451 U.S. 1, 101 S.Ct. 1531, 67 L.Ed.2d 694 (1981) (section 1983 provides cause of action where rights are "secured" by laws of United States).

Golden State argues that the NLRA, specifically section 8(d), as amended, 29 U.S.C. Sec. 158(d), grants "secured rights" protected by 42 U.S.C. Sec. 1983, and that the City has "violated" these rights, thus entitling Golden State to section 1983 damages from the City. We disagree.

In Wright v. Roanoke Redevelopment and Housing, 479 U.S. 418, 107 S.Ct. 766, 93 L.Ed.2d 781 (1987), the Supreme Court noted that there are "two exceptions to the application of section 1983 to remedy statutory violations: where Congress has foreclosed such enforcement of the statute in the enactment itself[,] and where the statute did not create enforceable rights, privileges, or immunities within the meaning of section 1983." Id. at 422, 107 S.Ct. at 770.

Against the backdrop of Wright, and decisions of this court, it is clear that no such right, privilege or immunity secured by the NLRA was "violated" by the City in this instance.

Equally clear is the fact that Congress has preempted this field, limiting recovery

for unfair labor practices to remedies specifically...

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