Bethlehem Shipbuilding Corporation v. Meyers

• Decision Date: 22 July 1936
• Docket Number: No. 4321.,4321.
• Citation: 15 F. Supp. 915
• Parties: BETHLEHEM SHIPBUILDING CORPORATION, Limited, v. MEYERS et al.
• Court: U.S. District Court — District of Massachusetts

15 F. Supp. 915

BETHLEHEM SHIPBUILDING CORPORATION, Limited, v. MEYERS et al.

No. 4321.

District Court, D. Massachusetts.

July 22, 1936.

Claude R. Branch, Choate, Hall & Stewart, and John L. Hall, all of Boston, Mass., and Hoyt A. Moore, E. Fontaine Broun, and Cravath, de Gersdorff, Swaine & Wood, all of New York City, for plaintiff.

Robert B. Watts, of New York City, for defendants.

BREWSTER, District Judge.

In this suit the Bethlehem Shipbuilding Corporation, Limited, has asked for injunctive relief against threatened proceedings by the defendants, presuming to act by virtue of the Act of July 5, 1935 (chapter 372, 49 Stat. 449), 29 U.S.C.A. §§ 151-166, known as the National Labor Relations Act, hereinafter referred to as the act. The defendants have filed motions to dismiss the bill for lack of jurisdiction.

Plaintiff's prayer for temporary injunction was presented on the bill and affidavits, from which I made a finding that the facts alleged were proved, that plaintiff would suffer irreparable injury, and that I was not persuaded that the plaintiff's remedies at law were complete and adequate. I ordered a temporary injunction, reserving, however, the right to dissolve it if, after considering the arguments and authorities cited by counsel, I decided that the injunction had been improvidently granted. At the same time, I heard arguments on defendants' motion to dismiss. The disposition of this motion requires a summary of the facts alleged in the bill of complaint.

Commencement of proceedings by the defendants under the act, notice of hearing, and subpœnas served upon the plaintiff are alleged.

The plaintiff is a Delaware corporation, owning and operating a shipbuilding plant at Quincy, Mass., known as the Fore River Plant. This plant and its equipment are fully described in the bill. The plaintiff is engaged in the business of designing and building vessels of various kinds under specific contracts and employs approximately 5,000 employees. It fabricates substantially all materials used in the building of vessels, and for the most part builds boilers and main propelling machinery for each vessel. The vessels are delivered at the Fore River Plant. The cost of materials represents less than one-half the entire cost of the vessel.

A copy of the complaint issued by the National Labor Relations Board is attached to the bill of complaint, from which it appears that the plaintiff is charged by the Industrial Union of Marine & Shipbuilding Workers of America, Local No. 5, with indulging in practices declared unfair by the act, in that it seeks to dominate and interfere with an organization of plaintiff's employees, known and herein referred to as Employees' Plan of Representation.

The bill then sets forth in detail the consequences that will flow from the investigation instituted by the defendants. These may be summarized as follows:

That such proceedings will work harm to its reputation both with the public and with its employees; that they will inject strife into labor relations, now harmonious; that they will entail expense; that they will involve an unwarranted examination into the books, records, and affairs of the plaintiff, with the resultant disclosure of confidential information; that they will require attendance of employees at hearings and generally disrupt and interfere with the plaintiff's business. It is further alleged that failure to comply with any order of the defendants will subject it to heavy penalties, imposed by the act, depriving the plaintiff of any opportunity to exercise its constitutional rights unless the court affords relief. It is also alleged that this investigation is a second attempt by the same labor organization to sustain charges of unfair practice against this plaintiff; that this earlier proceeding involved considerable loss of time, inconvenience, and a money outlay of over $15,000; that these proceedings were instituted by a board, organized under earlier statutes; and that, after hearing, the board denied the petition of the union and dismissed, as unfounded, the charges against the plaintiff.

The plaintiff asserts its right to maintain harmonious relations with its employees and to deal with them in respect of rates of pay, wages, hours of employment, and other working conditions in a manner mutually satisfactory to it and to its employees, and that such right is of incalculable value to the plaintiff in the successful conduct of its business at the Fore River Plant.

The bill then sets out with much detail the organization of the Employees' Plan of Representation and its operation since its organization in 1923, and shows that, as late as March, 1936, an election was held in which 91.9 per cent. of the employees participated, whereby the officers of the plant were elected without interference by the plaintiff.

It is alleged further that the relations existing between the plaintiff and its employees at said plant do not constitute interstate commerce; nor do they burden and obstruct such commerce. Finally, it sets forth nine specific grounds upon which the plaintiff claims that the act is unconstitutional, at least as applied to the situation existing in the Fore River Plant.

So far as the foregoing allegations are allegations of fact, they are admitted for the purposes of the motion to dismiss.

It is the defendants' contention that the court has no power to grant relief on these facts, regardless of the question of the constitutionality of the act. They cite numerous cases wherein equitable relief has been denied in proceedings somewhat similar, brought against the Labor Board or its agents. In some of these cases it is quite apparent that the court acted upon, or indulged, the presumption that the act was a valid enactment.¹

In one case I find the court concurred in defendant's argument that the court was powerless to intervene if the act was unconstitutional.²

These cases I am unable to follow. Rather, I am in accord with those cases where temporary injunctions have issued against proceedings by the Board or its Representatives.³

It is to be noted that many of the cases cited by the defendants' attorney were decided before the decision had come down in the case of Carter v. Carter Coal Co., 56 S.Ct. 855, 863, 80 L.Ed. ___ (decided by the Supreme Court May 18; 1936). There were a number of cases cited arising in the District of Columbia in which the Supreme Court refused relief.⁴

Since the Carter Case, and on the authority of it, the United States Court of Appeals for the District of Columbia has granted injunctions in these cases and others against the Labor Board, now pending before that court. So far as the authorities cited sustain the proposition that a plaintiff who questions the constitutionality of the statute cannot invoke the powers of an equity court for the sole purpose of testing the validity of the act, I am in accord.

But I cannot agree that the court is without power to prevent the execution of a void statute when proceedings under it will involve loss, injury, and expense which cannot be restored, satisfied or compensated. In Poindexter v. Greenhow, 114 U.S. 270, 5 S.Ct. 903, 914, 962, 29 L.Ed. 185, the court notes the distinction between the sovereignty and the government of it and stresses the point that when the government acts within the sphere of its agency it is a perfect representative "but outside of that, it is a lawless usurpation." The defendants' argument comes to this, that a court convinced that the threatened acts of the defendants will constitute "lawless usurpation" must stand aside and permit the usurpation to proceed to an order of the Labor Board which the court ultimately must declare null and void. I am not yet ready to concede that the equity powers of this court are thus limited.

Assuming for the moment that the act is declared unconstitutional, the defendants then, without any authority or warrant of law, will attempt an investigation into the affairs of the plaintiff and the organization of its employees, subpœnaing employees as witnesses, examining books and records, disrupting the work at the plaintiff's plant, creating uncertainty, apprehension, and unrest among the employees. These are alleged as unavoidable results of the interference by government agencies, if the investigation is allowed to proceed to a conclusion. There can be no doubt that, to some extent, expenses will have been incurred, loss will have been sustained, and damage will have been done by this illegal invasion of the plaintiff's rights. The danger threatened is immediate and great. No one can foresee the extent of the consequences that will follow, but whatever they may be, they will be irreparable since the law can give no redress. The equity court has jurisdiction to interpose its power to prevent a threatened invasion of the property rights of the plaintiff. Rickert Rice Mills, Inc., v. Fontenot, 297 U.S. 110, 56 S.Ct. 374, 80 L.Ed. 513; Village of Euclid v. Ambler Realty Co., 272 U.S. 365, 47 S.Ct. 114, 71 L.Ed. 303, 54 A.L.R. 1016; Stout v. Pratt (D.C.) 12 F.Supp. 864; Bendix Products Corp. v. Beman et al. (D.C.) 14 F.Supp. 58.

It is no answer that the act provides for judicial review. The remedies of the act fall with the other provisions of the act, if it be held unconstitutional in toto. In any event, plaintiff is left with no adequate or complete remedy at law. El Paso Electric Co. v. Elliott et al. (D. C.W.D.Texas, June 10, 1936) 15 F.Supp. 81; Terrace v. Thompson, 263 U.S. 197, 44 S.Ct. 15, 68 L.Ed. 255; Bendix Products Corp. v. Beman, supra.

I am influenced somewhat by the fact that the proposed investigation was not started in response to any request by plaintiff's employees, or by a labor organization with which its employees are affiliated. No harm can come from staying the proceedings under the act until it has been finally determined that the defendants are not unlawfully trespassing upon the rights of the...