Los Angeles Meat and Provision Drivers Union, Local 626 v. United States

• Decision Date: 19 November 1962
• Docket Number: No. 38,38
• Citation: 371 U.S. 94,9 L.Ed.2d 150,83 S.Ct. 162
• Parties: LOS ANGELES MEAT AND PROVISION DRIVERS UNION, LOCAL 626 et al., Appellants, v. UNITED STATES
• Court: U.S. Supreme Court

371 U.S. 94

83 S.Ct. 162

9 L.Ed.2d 150

LOS ANGELES MEAT AND PROVISION DRIVERS UNION, LOCAL 626 et al., Appellants,

v UNITED STATES.

No. 38.

Argued Oct. 10, 1962.

Decided Nov. 19, 1962.

Charles K. Hackler, Los Angeles, Cal., for appellants.

Robert B. Hummel, Cleveland, Ohio, for appellee.

Mr. Justice STEWART delivered the opinion of the Court.

The appellants are a Los Angeles labor union, one of its business agents, and four self-employed independent contractors, so-called 'grease peddlers,' who were members of the union. They appeal from a judgment entered against them by a Federal District Court in a civil action brought by the United States to terminate violations of § 1 of the Sherman Act.¹ The judgment was entered upon findings based upon a detailed stipulation of facts in which the appellants admitted all the allegations of the complaint and agreed to the ultimate conclusion that they had unlawfully combined and conspired in unreasonable restraint of foreign trade and commerce in yellow grease. In the stipulation the appellants also agreed to the issuance of a broad injunction against them. The District Court's decree enjoined in specific detail the practices found to be unlawful, and in addition ordered the union to terminate the union membership of all self-employed grease peddlers. 196 F.Supp. 12. The appellants attack the judgment here upon the single ground that the District Court was in error in ordering termination of the union membership of these independent businessmen.² Consideration of this claim requires a somewhat detailed review of the nature of the illegal conspiracy in which the appellants in this case were concededly engaged.

During the period between 1954 and 1959 there were in Los Angeles County eight firms engaged as processors in the production of yellow grease, an inedible grease produced by removing moisture and solid impurities from so-called restaurant grease—waste grease resulting from the preparation of food in restaurants, hotels and institutions. A substantial part of the yellow grease so produced was sold to overseas purchasers and to purchasers in California for prompt shipment overseas.

The processors procured restaurant grease in two separate ways. They made direct purchases, usually from large restaurants, hotels and other institutions, and in these transactions the processors picked up the restaurant grease from the sellers through employees who were members of the union. Restaurant grease from other sources was usually purchased by the processors from grease peddlers, independent entrepreneurs whose earnings as middlemen consisted of the difference between the price at which they bought the restaurant grease from various sources and the price at which they sold it to the process- ors, less the cost of operating and maintaining their trucks. There were some 35 to 45 grease peddlers in the Los Angeles are.

In 1954 most of the grease peddlers became members of the appellant union, at the instigation of the appellant business agent, for the purpose of increasing the margin between the prices they paid for grease and the prices at which they sold it to the processors. To accomplish this purpose, fixed purchase and sale prices were agreed upon and enforced by union agents through the exercise or threatened exercise of union economic power in the form of strikes and boycotts against processors who indicated any inclination to deal with grease peddlers who were not union members. The union's business agent allocated accounts and territories for both purchases and sales among the various grease peddlers, who agreed to refrain from buying from or soliciting the customers of other peddlers, and violations of this agreement could result in a grease peddler's suspension from the union, in which event he was, of course, prohibited from carrying on his business.

From 1954 to 1959 this basic plan of price fixing and allocation of business was effectively carried out by elimination of the few peddlers who had not joined the union, and by coercion upon the processors through threats of 'union trouble' if they did not comply.

Within the union the grease peddlers were treated as a separate group, distinct from the some 2,400 employee members. The meetings of the grease peddlers were always held apart from regular union meetings, and from 1955 on, the grease peddlers were members of a special 'subdivision' of the union—Local 626—B. The affairs of this separate subdivision were administered not by regular union officers, but by the appellant business agent who had originated the scheme, together with a committee of grease peddlers to assist in 'policing, enforcing and carrying out the program to suppress and eliminate competition.'

There was no showing of any actual or potential wage or job competition, or of any other economic interrelationship, between the grease peddlers and the other members of the union. It was stipulated that no processors had ever substituted peddlers for employee-drivers in acquiring restaurant grease, or had ever threatened to do so. The stipulation made clear that the peddlers and the processors had essentially different sources of supply and different classes of customers. Based on these stipulated facts, the District Court affirmatively found that 'there is no competition between (the employee and peddler) groups because each is engaged in a different line of work * * *.'

Pointing out that 'the stipulated facts clearly show that before the grease peddlers joined the defendant Union, there was no suppression of competition among them, and that only the support of the Union and the powerful weapons at its command enabled the peddlers and the Union together to destroy free competition in the purchase and sale of waste grease,' the District Court concluded that 'a decree terminating the membership of the grease peddlers in defendant Union appears to be the most effective, if not the only, means of preventing a recurrence of defendants' unlawful activities.' The court further concluded that nothing in the Clayton Act or the Norris-LaGuardia Act prevented the issuance of a decree divesting the grease peddlers of union membership in the circumstances of this case. We agree with these basic conclusions.

It is beyond question that a court of equity has power in appropriate circumstances to order the dissolution of an association of businessmen, when the association and its members have conspired among themselves or with others to violate the antitrust laws. Hartford-Empire Co. v United States, 323 U.S. 386, 428, 65 S.Ct. 373, 393, 89 L.Ed. 322. And the circumstances stipulated and found in the present case provided ample support, we think, for a decree of dissolution, as a matter of the discreet exercise of equitable power.

It is also beyond question that nothing in the anti-injunction provisions of the Norris-LaGuardia Act,³ nor in the labor exemption provisions of the Clayton Act,⁴ insulates a combination in illegal restraint of trade between businessmen and a labor union from the sanctions of the antitrust laws. Allen Bradley Co. v. Local Union No. 3, 325 U.S. 797, 65 S.Ct. 1533, 89 L.Ed. 1939. Indeed, the appellants have conceded the propriety of the order in the present case which broadly enjoins the illegal practices in which they were engaged.

The narrow question which emerges in this case, therefore, is whether businessmen who combine in an association which would otherwise be properly subject to dissolution under the antitrust laws can immunize themselves from that sanction by the simple expedient of calling themselves 'Local 626—B' of a labor union.⁵ We think there is nothing in the Norris-LaGuardia Act nor in the Clayton Act, nor in the federal policy which these statutes reflect, to prevent a court from dissolving the ties which bound them to the appellant union, in the circumstances of the present case.

The provisions of the Norris-LaGuardia Act place severe limitations upon the issuance of an injunction by a federal court in 'any case involving or growing out of any labor dispute,' and the statute specifically forbids a District Court in such a case to prohibit anyone from '(b)ecoming or remaining a member of any labor organization.' But, as the District Court correctly found, the present case was not one 'involving or growing out of any labor dispute,' but one involving an illegal combination between businessmen and a union to restrain bound these businessmen together, and commerce. In such a case, as Allen Bradley Co. clearly held, neither the Norris-LaGuardia Act nor the labor exemption provisions of the Clayton Act are applicable.

This Court's decision in Columbia River Packers Assn. v. Hinton, 315 U.S. 143, 62 S.Ct. 530, 86 L.Ed. 750, is very much in point. That was a private antitrust suit brought by a processor of fish to enjoin an allegedly illegal combination of fishermen, who had joined together in the Pacific Coast Fisherman's Union to regulate the terms under which fish would be sold. The organization was 'affiliated with the C.I.O.' 315 U.S. at 144, 62 S.Ct. 520. The defendants claimed that an injunction against them would violate the Norris-LaGuardia Act. The Court held that the controversy was not a 'labor dispute' within the meaning of the Norris-LaGuardia Act, pointing out that that statute was 'not intended to have application to disputes over the sale of commodities.' 315 U.S., at 145, 62 S.Ct., at 521, 522. Here, as in Columbia River Assn., the grease peddlers were sellers of commodities, who became 'members' of the union only for the purpose of bringing upon power to bear in the successful enforcement of the illegal combination in restraint of the traffic in yellow grease.⁶ The District Court was not in error in ordering the complete termination of that illegal combination.

What has been said is not remotely to suggest that a labor organization might not often have a legitimate interest in soliciting...