International Paper Co. v. Town of Jay

• Decision Date: 07 November 1990
• Docket Number: No. 90-1602,90-1602
• Parties: 136 L.R.R.M. (BNA) 2864, 110 A.L.R.Fed. 867, 59 USLW 2591, 118 Lab.Cas. P 10,641 INTERNATIONAL PAPER COMPANY, Plaintiff, Appellant, v. TOWN OF JAY, et al., Defendants, Appellees. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 480

928 F.2d 480

136 L.R.R.M. (BNA) 2864, 110 A.L.R.Fed.

867, 59 USLW 2591,

118 Lab.Cas. P 10,641

INTERNATIONAL PAPER COMPANY, Plaintiff, Appellant, v. TOWN OF JAY, et al., Defendants, Appellees.

No. 90-1602.

United States Court of Appeals, First Circuit.

Heard Nov. 7, 1990.

Decided March 21, 1991.

William J. Kayatta, Jr. with whom Catherine R. Connors, and Pierce, Atwood, Scribner, Allen, Smith & Lancaster, were on brief, Portland, Me., for plaintiff, appellant.

Theodore E. Dinsmoor with whom Gilbert R. Hoy, Jr., Gaston & Snow, Boston, Mass., Gerald F. Petruccelli and Petruccelli, Cox & Martin, were on brief, Portland, Me., for defendants, appellees.

Before SELYA, Circuit Judge, and BROWN ^* and BOWNES, Senior Circuit Judges.

JOHN R. BROWN, Senior Circuit Judge:

The International Paper Company ("IP"), an industry operating in the town of Jay, Maine ("the Town" or "Jay"), brought suit to invalidate and enjoin enforcement of a municipal ordinance ("the Ordinance") which regulated the emission of pollutants by Jay industries, including IP. IP claimed that the Ordinance placed undue restrictions upon its bargaining power in a labor dispute with striking unions and violated various federal and state laws. In a comprehensive opinion, 736 F.Supp. 359 (D.Me.1990), the district court granted judgment on the pleadings in the Town's favor, Fed.R.Civ.P. 12(c), and this appeal follows. Concluding that IP could not have prevailed at trial under any conceivable set of facts asserted by the pleadings, we affirm primarily on the firm footing of the district court's opinion, as supplemented by this opinion.

How It All Began

In June 1987, two unions representing 1,200 workers at the Jay, Maine, pulp and paper processing facility of IP went on strike. IP managed to continue operations at the mill by hiring replacement workers. In August, the Jay Board of Selectmen, which mostly included striking IP employees, enacted two ordinances, neither of which is involved in the present appeal. One of the ordinances prohibited IP from housing replacement workers at the mill, while the other authorized town officials to oversee enforcement of various federal, state, and local environmental laws and regulations at the mill. Apparently in response to a lawsuit filed by IP to invalidate these ordinances, again unrelated to this appeal, the Board repealed them voluntarily.

In November 1987, the town's legal counsel, at the Board's behest, drafted the Jay Environmental Control and Improvement Ordinance (the Ordinance). This third Ordinance--the subject of IP's present attack--is an elaborate regulatory scheme. Its primary requirement is that Jay industries and businesses obtain such a permit from a special planning board before they may discharge pollutants. In order to obtain a permit, an applicant must comply with local environmental regulations contained in the Ordinance. In December the Board proposed that the Ordinance be put to a public referendum. Two public hearings followed, and the town enacted the Ordinance by referendum vote on May 21, 1988.

The strike was resolved in IP's favor after commencement of this suit. A second referendum followed, where Jay citizens rejected a proposal to repeal the Ordinance. The Ordinance remains the law of Jay.

IP's amended complaint lists several counts, all of which were dismissed below on various motions. IP appeals the district court's Rule 12(c) ¹ dismissal of Counts I, II, and III, which present the following contentions: (1) the Jay Ordinance impermissibly interfered with IP's collective bargaining rights in the 1987-88 strike, curtailing self-help and frustrating the operation of the National Labor Relations Act (NLRA), 29 U.S.C. Secs. 151 et seq.; (2) the Ordinance represents an abuse of governmental powers depriving IP of its Equal Protection and Due Process rights guaranteed by the Fourteenth Amendment to the United States Constitution; and (3) the Ordinance violates Maine's conflicts of interest statute, 30 M.R.S.A. Sec. 2251 (1978), and Maine common law.

Standard of Review

We review the district court's grant of the Town's Fed.R.Civ.P. Rule 12(c) motion de novo, as if we were considering the Town's motion anew. See Frissell v. Rizzo, 597 F.2d 840, 845 (3d Cir.), cert. denied, 444 U.S. 841, 100 S.Ct. 82, 62 L.Ed.2d 54 (1979). Like the trial court, therefore, we accept as true all material allegations of the amended complaint, and construe them in favor of the complaining party, IP. Rivera-Gomez v. de Castro, 843 F.2d 631, 635 (1st Cir.1988). Finally, we cannot uphold the district court's action "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of [its] claims which would entitle [it] to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80, 84 (1957); Rivera-Gomez, 843 F.2d at 635. See also, Barber v. M/V BLUE CAT, 372 F.2d 626, 629 (5th Cir.1967).

NLRA Preemption

IP first attacks the Jay Ordinance on the ground that it violates the policy of Congress, implicit in the NLRA, to leave certain unregulated self-help weapons in a labor dispute, such as lockouts, strikes, and the hiring of replacement workers, to the "free play of economic forces." Machinists v. Wisconsin Employment Relations Comm'n, 427 U.S. 132, 140, 96 S.Ct. 2548, 2553, 49 L.Ed.2d 396, 403 (1976). IP urgently stresses that the Supreme Court's opinion in Golden State Transit Corp. v. Los Angeles, 475 U.S. 608, 106 S.Ct. 1395, 89 L.Ed.2d 616 (1986), should control this appeal. According to Golden State, the crucial inquiry posed by the "free play" argument is whether the state or municipal action complained of "frustrates the effective implementation" of the NLRA. Id. at 615, 106 S.Ct. at 1399, 89 L.Ed.2d at 624 (quoting Machinists, 427 U.S. at 148, 96 S.Ct. at 2357, 49 L.Ed.2d at 408).

Because it is critical to IP's approach, we think Golden State warrants detailed discussion. In Golden State, a company which operated taxicabs in the Los Angeles area applied to the city for renewal of its operating franchise. The city's Board of Transportation Commissioners initially recommended renewal of the franchise. While the application was pending, the cab company's drivers went on strike, halting its operations. The City Council consequently delayed action on the renewal application and ultimately defeated a motion to extend the franchise, allowing it to expire. During discussion on the application, the Council reached a consensus "for rejection of the extension with a possibility for reopening the issue if the parties settled their labor dispute before the franchise expired...." Id. at 611, 106 S.Ct. at 1397, 89 L.Ed.2d at 621.

The Supreme Court, applying the Machinists preemption principle, held the City Council's action illegal. The Machinists doctrine, the Court stated, "precludes state and municipal regulation 'concerning conduct that Congress intended to be unregulated.' " Id. at 614, 106 S.Ct. at 1398, 89 L.Ed.2d at 623 (quoting Metropolitan Life Insur. Co. v. Massachusetts, 471 U.S. 724, 749, 105 S.Ct. 2380, 2394, 85 L.Ed.2d 728, 746 (1985)). The Court determined that the city's effective "positive durational limit" on the labor dispute amounted to an impermissible entry " 'into the substantive aspects of the bargaining process to an extent Congress has not countenanced.' " Id. at 616, 106 S.Ct. at 1399, 89 L.Ed.2d at 624-25 (quoting Machinists, 427 U.S. at 149, 96 S.Ct. at 2357, 49 L.Ed.2d at 409). By conditioning the franchise grant on settlement of the strike, the Court held, the City Council infringed on the free play of economic forces. Such a trespass constituted a direct, tangible interference with the labor dispute and was preempted by the NLRA. Id. at 619, 106 S.Ct. at 1401, 89 L.Ed.2d at 627.

As the trial court correctly determined, the instant case is easily distinguishable from Golden State. IP's proposal to apply that case here would require an unprecedented extension of the Machinists doctrine and NLRA preemption. See 736 F.Supp. at 366. First, while IP focuses exclusively on the actions of the Jay Board of Selectmen, the Board did not enact the environmental Ordinance. The citizens of Jay by referendum voted in the proposed Ordinance after holding two public hearings. The Board's role, however important, was limited to directing that the bill be drafted and proposing it to the citizens of Jay. In contrast, in Golden State the Los Angeles City Council took direct unilateral action against the employer to pressure it to submit to striking employees' demands. IP would have this Court invalidate the Jay Ordinance on the tenuous "but-for" basis that the Ordinance would not have become law had the Board not proposed it. We are unwilling to construe Golden State so broadly as to require inquiry, on the facts of this case, into the motives of the selectmen prior to the Board's drafting and proposing the Ordinance.

In any event, we prefer not to rest our holding on this ground, for we are unwilling to apply Golden State to such state action which only remotely affects the bargaining powers of the parties to a labor dispute. While the Court in Golden State may have retreated from its prior steadfast position that only state actions passed with the intent of directly altering the substantive outcome of a labor dispute should be preempted, it remains the law that actions which regulate activity only peripherally related to labor policy, without placing conditions on the conduct of the parties to the dispute, are not subject to preemption. See id. 475 U.S. at 612, 106 S.Ct. at 1397, 89 L.Ed.2d at 622. In Golden State, the City Council expressly conditioned the employer's franchise renewal on the settlement of the labor dispute. Id. at 619, 106 S.Ct. at 1401, 89 L.Ed.2d at 627. The nexus between the City's action and the parties' collective bargaining positions was indisputable, and the City's placement of conditions on renewal of the...