Almacs, Inc. v. Hackett, Civ. A. No. 4323.

• Decision Date: 11 May 1970
• Docket Number: Civ. A. No. 4323.
• Citation: 312 F. Supp. 964
• Court: U.S. District Court — District of Rhode Island
• Parties: ALMACS, INC., Big "G" Discount Food Stores, Inc., First National Stores, Inc., Star Market Co., and Stop & Shop, Inc., Plaintiffs, v. Mary C. HACKETT, Director of the Department of Employment Security of the State of Rhode Island, Defendant, and Meatcutters and Food Store Workers Local Union 328, Amalgamated Meatcutters and Butcher Workmen of North America, Intervenor.

312 F. Supp. 964

ALMACS, INC., Big "G" Discount Food Stores, Inc., First National Stores, Inc., Star Market Co., and Stop & Shop, Inc., Plaintiffs, v. Mary C. HACKETT, Director of the Department of Employment Security of the State of Rhode Island, Defendant and Meatcutters and Food Store Workers Local Union 328, Amalgamated Meatcutters and Butcher Workmen of North America, Intervenor.

Civ. A. No. 4323.

United States District Court, D. Rhode Island.

May 11, 1970.

Guy J. Well and Matthew W. Goring, Providence, R. I., for plaintiffs.

W. Slater Allen, Asst. Atty. Gen., State of R. I., Charles H. McLaughlin, Providence, R. I., for Dept. of Employment Security.

William J. Sheehan, and Peter L. Kennedy, Providence, R. I., for intervenor Union.

OPINION

PETTINE, District Judge.

This is a civil action pursuant to 28 U.S.C. § 1331 in which the plaintiffs, five corporations doing business in Rhode Island, seek injunctive relief against the defendant, who is the Director of the Rhode Island Department of Employment Security. By consent of the parties, the union which represents the employees of the plaintiff corporations has been permitted to intervene. The plaintiffs have moved to convene a three-judge court pursuant to 28 U.S.C. § 2281, and the defendant and intervening defendant have moved to dismiss, or in the alternative, to have the court abstain. The court received testimonial and affidavit evidence limited solely to the jurisdictional issues raised by the motions to dismiss. Hence, this opinion will treat the merits of the case, if at all, only in the light of the complaint read, as required, favorably to the plaintiffs in the spirit of the federal rules.

On April 11, 1970 separate agreements between plaintiffs and the intervening defendant terminated. On April 13, 1970 employees of the plaintiff Almacs struck Almacs. Also on April 13, 1970 employees of the other plaintiffs reported to work and were not provided work by those plaintiffs. Work has not yet resumed with respect to any of the five plaintiff corporations. Pursuant to the unemployment compensation law of the State of Rhode Island unemployed persons otherwise eligible may, after a brief waiting period, receive unemployment compensation benefits. However, if such unemployed persons "* * * became unemployed because of a strike or other industrial controversy * * *" they are not entitled to benefits until the expiration of a six-week period in addition to the initial one-week waiting period. § 28-44-16, G.L.R.I.1956, as amended. Pursuant to this statutory provision, no benefits currently are being paid to Almacs employees. However, the defendant Director has determined to pay and is currently paying benefits to employees of the plaintiffs other than Almacs. The decision of the Director is currently being administratively appealed pursuant to Rhode Island statutory law to the Board of Review.

Plaintiffs claim that the statutory scheme of Rhode Island by which strikers and others involved in labor disputes may receive benefits violates the economic balance of power contemplated by the federal labor laws and ask that the operation of that statutory scheme in the context of this case be enjoined.

The court turns first to plaintiffs' motion for the convening of a three-judge court. While the language of 28 U.S.C. § 2281 would seem to suggest on its face that a Supremacy Clause claim such as the instant one is suitable for a three-judge court, the decision of the Supreme Court in Swift & Co. v. Wickham, 382 U.S. 111, 86 S.Ct. 258, 15 L. Ed.2d 194 (1965)¹ so construed § 2281 as to make it clear that claims of federal legislative supremacy are proper for single-judge consideration. See also General Electric Co. v. Callahan, 294 F.2d 60 (1st Cir. 1961)²; ITT v. Carter, C.A. No. 3770 (D.R.I. April 10, 1967). Accordingly, the plaintiffs' motion is denied.

The court next considers the argument of defendants that the jurisdictional amount is lacking and that the suit must therefore be dismissed. The law is clear that an allegation of amount in controversy must stand unless it can be shown to be absolutely impossible of satisfaction. St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 58 S.Ct. 586, 82 L.Ed. 845 (1938). In the instant case, the complaint alleges an amount in controversy in excess of $10,000 and the testimony presented by defendants through the Director does not contravene the possibility that each plaintiff may suffer $10,000 or more loss pursuant to statutory scheme. More importantly, in equity suits the value to be measured for jurisdictional purposes is the value of the right sought to be protected, here the right to bargain collectively free from state interference, a right which cannot as of this time clearly be valued at less than $10,000. In this respect the defendants' motions to dismiss are denied.

The court next considers the argument of defendants that the anti-injunction provisions of the Norris-LaGuardia Act, 29 U.S.C. § 104(c), precludes the court from issuing the injunction here sought.³ While that statute clearly prohibits federal injunctions against the payment of unemployment compensation benefits to persons involved in labor disputes, its prohibition extends only to "persons" as defined in the Act at 29 U.S.C. § 113. It is well-established that the United States cannot be a person within the meaning of the Act, United States v. United Mine Workers, 330 U.S. 258, 67 S.Ct. 677, 91 L.Ed. 884 (1947), and by the same reasoning neither can a state or one of its agencies.

The court next considers the question of whether it should stay its hand at this time. As to Almacs employees, no benefits will be paid until the expiration of the six-week period. As to employees of other plaintiffs, the Director has determined to pay benefits and the plaintiffs have appealed that decision to the Board of Review. In such circumstances it has been argued that the appropriate course is to await the state court's construction of its own statute, or the running of the six-week period, whichever comes sooner. However, the right sought to be protected in the instant case is the right presently to bargain free from not only the present payment of benefits but also from the influence upon the parties to collective bargaining that the knowledge of the availability of benefits may have. Cf. NLRB v. David Buttrick Co., 361 F.2d 300 (1st Cir. 1966). For this reason, even assuming that state courts were to construe the "industrial controversy" six-week disqualification to apply to the non-Almacs employees, there would still be a present controversy. Accordingly, the court decides not to refrain from deciding the substantive claim.

The court turns finally to the question of the legality of payment of unemployment compensation benefits to employees who are not presently working because of a labor dispute with their employers, and who come within the ambit of the National Labor Relations Act because their employers are engaged in sufficient interstate commerce.

The Rhode Island unemployment compensation statute is part of a broad state-federal cooperative effort to protect citizens against economic vicissitudes. It was enacted at a time when there was both strong national and local feeling for the redress of certain economic evils which could eventuate from the unregulated play of market forces. Its operation has been consistent and continuing from 1936 to the present. That the federal government has shared in this operation is apparent from a reading of state and federal statutory law. § 28-44-1 et seq., G.L.R.I.1956, as amended, 26 U.S.C. §§ 3301-3309, 29 U.S.C. §§ 49-49K. In particular the statute's statement of purpose, § 28-42-2 G.L.R.I.1956, as amended, makes clear the general welfare nature of the statute. It must, therefore, be concluded that it was neither the intent nor the primary purpose of the statute as a whole to impinge upon federally established collective bargaining rights.

Plaintiffs argue, however, that the effect of the statute's provision for payment of benefits to persons involved in industrial controversy is to reallocate the balance of power contemplated by the National Labor Relations Act. However, it is certainly unclear from a reading of the federal law that Congress contemplated the overriding of any state general welfare laws. No such intent has been expressed and the various state laws both granting benefits and denying them have been operative throughout the entire history of the many changes in the federal laws. Moreover, the federal Congress has participated increasingly in the funding and operation of state welfare schemes. Against such a background the plaintiffs carry a heavy burden in seeking to persuade this court that there should be federal overriding of the policy determination of a state legislature either to grant or to deny benefits to striking employees.

Plaintiffs point to several cases in seeking to persuade this court. However, all of the cases, save John Hancock...