Levering & Garrigues Co. v. Morrin

• Decision Date: 23 August 1932
• Docket Number: No. 50.,50.
• Citation: 61 F.2d 115
• Parties: LEVERING & GARRIGUES CO. et al. v. MORRIN et al.
• Court: U.S. Court of Appeals — Second Circuit

61 F.2d 115 (1932)

LEVERING & GARRIGUES CO. et al. v. MORRIN et al.

No. 50.

Circuit Court of Appeals, Second Circuit.

August 23, 1932.

Frank P. Walsh, of New York City (Harold Stern, of New York City, of counsel), for appellants.

Edward Maxson, of Summit, N. J. (Merritt Lane, of Summit, N. J., of counsel), for appellees.

Before MANTON, L. HAND, and SWAN, Circuit Judges.

SWAN, Circuit Judge.

The plaintiffs are four corporations, three of which were organized under the laws of New Jersey and the fourth under the laws of Pennsylvania. They were engaged in fabricating outside of, and erecting within, the state of New York, and elsewhere, structural iron and steel. The steel was specially fabricated for a particular building, and each plaintiff engaged in the work of erecting its steel under a subcontract made with the general contractor for the building. The plaintiffs were members of the Iron League of New York, an association of employers engaged in the erection of steel, and since 1906 the members of this organization have carried on their work under what is known as the "open shop" method; that is, they select their employees without reference to membership or nonmembership in a labor union. The defendants are Paul J. Morrin, "individually and as president" of International Association of Bridge, Structural, and Ornamental Iron Workers (a voluntary labor organization hereinafter referred to as the International), and several local labor unions and their officers and agents. The bill of complaint charges that the defendants are attempting to compel the plaintiffs to operate upon a closed union shop basis, and that to effectuate this purpose they have, among other alleged illegal acts, put into effect a boycott of the plaintiffs within the metropolitan area in and about New York City by persuading, through threats and intimidation, owners, architects, and general contractors not to deal with the plaintiffs. The referee, who took and reported voluminous evidence, found as a fact that the boycotting charge was established and that the defendants intend to continue their efforts. His report was confirmed, and a permanent injunction issued to restrain the defendants from attempting to induce owners, architects, or general contractors to let no subcontracts to the plaintiffs for the erection of structural iron and steel on buildings being or to be erected in the metropolitan district of New York, by threatening that members of the unions associated with the International will refuse to work on buildings upon which the plaintiffs may have subcontracts, or by instigating sympathetic strikes on such buildings, or from otherwise attempting by coercive pressure, threats or intimidation, or other unlawful means, to compel or influence owners, architects, or general contractors not to patronize the plaintiffs. To reverse this decree and injunction, the defendants appealed.

After argument upon the merits, this appeal was reargued, at the suggestion of the court, upon questions of jurisdiction, and to these questions attention must first be directed.

Jurisdiction was based primarily on diversity of citizenship. As already noted, the plaintiffs were corporations of New Jersey and of Pennsylvania. The defendants against whom the decree was entered are the following: Paul J. Morrin, individually and as president of the International Association of Bridge, Structural, and Ornamental Iron Workers; William J. McGinn individually and as agent of said International; Local No. 40 of said International and Charles Massey, individually and as agent thereof; Local No. 361 of said International and Earl Calvert individually and as agent thereof; and Local No. 197 of said International. The bill of complaint alleges that Morrin is a citizen of Missouri and each of the other individual defendants a citizen of New York. Each of the three locals above named is alleged to be "a subsidiary local" of the International and "a resident, citizen and inhabitant of the State of New York." Local No. 40 is alleged to have its headquarters in Manhattan and Local No. 361 in Brooklyn; Local No. 197 is alleged to have "jurisdiction over stone derrickmen in the City of New York." The International is alleged to be "a voluntary labor organization" and "a resident, citizen and inhabitant of the State of Missouri," but the International itself was not made a party defendant, although the case has been argued on the assumption that it was. None of the foregoing allegations of citizenship was denied in the answer, except with respect to McGinn, who set forth that he was a citizen of Massachusetts instead of New York. Although the venue was wrong as to Morrin and McGinn, objection to venue was a privilege personal to them and was waived by their failure to object. Seaboard, etc., Co. v. Chicago, etc., Ry. Co., 270 U. S. 363, 365, 46 S. Ct. 247, 70 L. Ed. 633.

When federal jurisdiction is grounded on diverse citizenship, it must affirmatively appear in the pleadings or from facts clearly proven that diversity of citizenship exists between all the plaintiffs on the one hand and all the defendants on the other. Strawbridge v. Curtiss, 3 Cranch, 267, 2 L. Ed. 435; Thomas v. Board of Trustees, 195 U. S. 207, 25 S. Ct. 24, 49 L. Ed. 160. For this purpose the shareholders of a corporation are conclusively presumed to be citizens of the state in which it was incorporated, and their citizenship is then attributed to the corporation. St. Louis & S. F. Ry. v. James, 161 U. S. 545, 554, 16 S. Ct. 621, 40 L. Ed. 802. The plaintiffs would have us apply a similar presumption as to unincorporated labor unions because under the doctrine of the Coronado Case, 259 U. S. 344, 42 S. Ct. 570, 66 L. Ed. 975, 27 A. L. R. 762, they may be sued in the association name. This decision liberalized procedure in this respect but did not hold that jurisdiction was to be correspondingly extended. That an unincorporated labor union is suable as a legal entity implies nothing as to the citizenship of its members for purposes of federal jurisdiction. See Dobie, Federal Jurisdiction & Procedure, p. 198. Moreover, in seeking to attach a presumption of citizenship in the state in which these unincorporated associations have their headquarters, the plaintiffs ignore the settled rule that the citizenship of the shareholders of a corporation attaches to the state of incorporation and not to the state in which the corporation has its principal place of business. Shaw v. Quincy Mining Co., 145 U. S. 444, 12 S. Ct. 935, 36 L. Ed. 768; Seaboard, etc., Co. v. Chicago, etc., Ry. Co., 270 U. S. 363, 366, 46 S. Ct. 247, 70 L. Ed. 633. Although the Supreme Court has not yet passed upon the precise issue, its decisions as to a joint-stock company (Chapman v. Barney, 129 U. S. 677, 9 S. Ct. 426, 32 L. Ed. 800), a limited partnership association (Great Southern Fireproof Hotel Co. v. Jones, 177 U. S. 449, 20 S. Ct. 690, 44 L. Ed. 842), and a board of trustees (Thomas v. Board of Trustees, 195 U. S. 207, 25 S. Ct. 24, 49 L. Ed. 160), are strongly persuasive against the contention. In the case last cited it was held that an allegation that an unincorporated board of trustees is a citizen is not sufficient, and that there must also be an allegation that each member of the group has a citizenship different from that of the plaintiff. In the case at bar neither allegation nor proof asserts that all the members of the defendant unions are citizens of states other than New Jersey and Pennsylvania. In Russell v. Central Labor Union, 1 F.(2d) 412 (D. C. E. D. Ill.), it was held that, despite the Coronado Case, for purposes of federal jurisdiction the actual citizenship of the individual members of an unincorporated labor association was determinative; and this court held the same in Ex parte Edelstein, 30 F. (2d) 636, certiorari denied 279 U. S. 851, 49 S. Ct. 347, 73 L. Ed. 994; 42 Harv. L. Rev. 1079. See, also, Irving v. Joint District Council, 180 F. 896, 898 (C. C. N. Y.); Wise v. Brother of Locomotive Firemen and Enginemen, 252 F. 961, 965 (C. C. A. 8); 34 Yale L. J. 564; 38 Harv. L. Rev. 510; 5 Col. L. Rev. 246; 19 Ill. L. Rev. 596. We are not disposed to reverse our ruling in Ex parte Edelstein. Therefore the mere allegation that each of the local unions was a citizen of a state other than those of the plaintiffs was not sufficient to afford a basis for jurisdiction founded on diverse citizenship.

Before determining the effect of the failure to allege or prove diverse citizenship between the plaintiffs and the defendant labor unions, it will be well to consider the plaintiffs' contention that jurisdiction of the District Court may be sustained upon another ground. Paragraph 18 of the bill of complaint alleges that each of the plaintiffs is engaged in interstate commerce and that the defendants have entered into an illegal conspiracy in restraint of such commerce; paragraph 20 alleges a violation of the plaintiffs' constitutional rights; and paragraph 21 invokes jurisdiction under the Constitution and laws of the United States. These allegations the answer denied. Upon the issues of interference with interstate commerce and violation of the plaintiffs' constitutional rights, the referee found in favor of the defendants, and his conclusion was affirmed by the District Court.

That the decision on these points was right is clear beyond dispute. The theory of the eighteenth paragraph of the bill is that, since the steel to be erected by the plaintiffs in New York is shipped in from other states, the defendants' prevention of erection is an interference with interstate commerce. There is neither allegation nor proof that the activities of the defendants were in any way motivated by a desire to restrain the interstate trade of the plaintiffs. It is true that, to the extent that the defendants succeed in preventing the plaintiffs from procuring subcontracts with general contractors for buildings to be...