Blassie v. Kroger Company

• Decision Date: 23 April 1965
• Docket Number: 17622.,No. 17598,17598
• Citation: 345 F.2d 58
• Parties: Nicholas M. BLASSIE and Otto Etzel, Appellants, v. The KROGER COMPANY, The Great Atlantic & Pacific Tea Company, Inc., and National Food Stores, Inc., Appellees. Harry R. POOLE and Frank X. Davis, Appellants, v. The KROGER COMPANY, The Great Atlantic & Pacific Tea Company, Inc., and National Food Stores, Inc., Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

345 F.2d 58 (1965)

Nicholas M. BLASSIE and Otto Etzel, Appellants, v. The KROGER COMPANY, The Great Atlantic & Pacific Tea Company, Inc., and National Food Stores, Inc., Appellees.

Harry R. POOLE and Frank X. Davis, Appellants, v. The KROGER COMPANY, The Great Atlantic & Pacific Tea Company, Inc., and National Food Stores, Inc., Appellees.

Nos. 17598, 17622.

United States Court of Appeals Eighth Circuit.

April 23, 1965.

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Harry H. Craig of Wiley, Craig, Armbruster & Wilburn, St. Louis, Mo., made argument for appellants Nicholas M. Blassie and Otto Etzel and filed brief.

Bernard Dunau, Washington, D. C., made argument for appellants Harry R. Poole and Frank X. Davis and filed brief with Lester Asher, Chicago, Ill., and Morris J. Levin, St. Louis, Mo.

J. Terrell Vaughan of Armstrong, Teasdale, Roos, Kramer & Vaughan, St. Louis, Mo., made argument for appellees and filed brief with Walter M. Clark and Torrey N. Foster of Armstrong, Teasdale, Roos, Kramer & Vaughan, St. Louis, Mo.

Samuel J. Cohen of Cohen & Weiss, New York City, made argument for amici curiae Milk Industry Drivers — Dairy Employees Unions Pension and Welfare Fund and others and filed brief with Weil, Gotshal & Manges, Cooper, Ostrin, DeVarco & Ackerman, New York City, Parsonnet & Parsonnet, Newark, N. J., Cohn & Glickstein and Zelby & Burstein, New York City.

Stanley M. Rosenblum of Rosenblum & Goldenhersh, St. Louis, Mo., made argument for amicus curiae Teamsters' Local 688 Ins. & Welfare Fund and filed brief with Merle L. Silverstein of Rosenblum & Goldenhersh, St. Louis, Mo.

Charles P. Scully, and Johnson & Stanton, San Francisco, Cal., filed brief for amicus curiae Carpenter Funds Administrative Office of Northern California in support of appellants, without oral argument.

Before MATTHES, BLACKMUN and RIDGE, Circuit Judges.

BLACKMUN, Circuit Judge.

The plaintiffs, The Kroger Co., The Great Atlantic & Pacific Tea Co., Inc., and National Food Stores, Inc., are three retail chain employers which have stores in the Saint Louis area and which, with many other employers, make contributions on behalf of employees to the "Local 88 Meat & Related Industries Welfare Fund Trust".

By this action, begun in January 1962 against the five then trustees (two union, two employer and one public) of the Trust, the three plaintiffs seek to enjoin alleged violations of § 302 of the Labor Management Relations Act, 1947, as amended, 29 U.S.C. § 186. Section 302 (e) provides jurisdiction. The union is Meat Cutters Local No. 88. Its international affiliate is Amalgamated Meat Cutters & Butcher Workmen of North America, AFL-CIO.

The plaintiffs were generally successful at the trial, for the district court, after filing its memorandum opinion, Kroger Co. v. Blassie, 225 F.Supp. 300 (E.D.Mo.1964), entered a judgment and decree on January 24, 1964, by which it

1. Permanently enjoined the trustees and their successors, and Nicholas M. Blassie, Otto Etzel, and James Mathews, former union trustees and alternate union trustee, respectively, from expending or using trust assets for the benefit¹ of (a) any person who has retired as an employee of any contributing employer of the Trust; (b) retired persons who have never been in the employ of contributing employers; (c) any officer or employee of the union; or (d) any employee of the Trust;

2. Directed the trustees and their successors, and Blassie, Etzel and Mathews, to sell certain Jefferson County, Missouri, land, and the improvements thereon, within a reasonable time but, nevertheless, forthwith to take all steps necessary to effect the sale for the best price obtainable;

3. Enjoined the trustees and their successors from expending any funds for the further development of the Jefferson County area except for necessary maintenance pending the sale;

4. Permanently enjoined the trustees and their successors, and Blassie, Etzel and Mathews, from expending or using trust assets "for any type of recreational facility or program instituted wholly for recreational purposes";

5. Permanently enjoined the trustees and their successors, and Blassie, Etzel and Mathews, from expending or using trust assets for the operation of a pharmacy or other dispensary on specified property in Saint Louis or elsewhere, except that the pharmacy may be operated "so long as its services and facilities are available exclusively to employees of contributing employers who are lawful beneficiaries of the" Trust; and

6. Directed the trustees and their successors, and Blassie, Etzel and Mathews, to remove, within a reasonable time, all offices of the Trust from the Saint Louis building owned by the union's Benevolent Society, and "to secure quarters in a location completely removed from any union activities".

Former union trustees Blassie and Etzel have taken a general appeal. Present employee trustees Harry R. Poole and Frank X. Davis appeal from that portion of the court's judgment and decree which granted the relief we have described above in paragraphs 1(a), (c) and (d). Defendants Edward J. Schnuck, Albert Wagenfuehr, and the Right Reverend Monsignor John W. Miller, who are also present trustees, and Mathews, have not appealed. The plaintiffs have effected no cross appeal.

The issues here, in general terms, are: (a) whether retired persons may be beneficiaries of the Trust; (b) whether employees of the Trust may be beneficiaries; (c) whether employees of the union may be beneficiaries; (d) whether officers of the union may be beneficiaries; (e) the propriety of the court's order directing the sale of the Jefferson County land and improvements; (f) the availability of the pharmacy to persons other than beneficiaries of the Trust; and (g) the propriety of the court's order directing the removal of the Trust's offices. These seven issues all obviously have to do with the propriety, under § 302(c) and the trust agreement, of trust expenditures and activities. An eighth issue, a preliminary one suggested by this court prior to oral argument, is that of the status of Blassie and Etzel, as only former and not present trustees, to appeal.

We are favored with briefs from several amici curiae. Teamsters' Local 688 Insurance & Welfare Fund, Saint Louis, has filed a brief directed to aspects of the Jefferson County land issue. Eleven trust funds located in the East (the eastern amici) have filed a brief directed to the issues concerning retirees, union officers and employees, trust employees, and location of trust offices. Carpenter Funds Administrative Office of Northern California, Inc., has filed a brief directed to the issues concerning retirees, employees and officers of the union, and trust employees.

The Formal Provisions of the Trust Agreement. The original agreement was executed on January 29, 1953. It provided that a participant was "any employee whose employer has agreed to provide and pay for the group insurance benefits made available". The trustees were given authority to employ administrative personnel, to procure group insurance, and to adopt rules consistent with the agreement. The trustees were five in number, two appointed by the union, two by the employers, and the fifth, who was chairman and executive director of the program, "by mutual agreement" of the other trustees. The union had the right to remove the trustees it appointed and the employers had the right to remove theirs. The trustees, in their discretion, were to secure, for the covered employees, group policies for life insurance, accident and sickness, hospital, medical and surgical expense, and the like. No participant or employer was to have any vested interest in the fund, in payments therefrom, or in eligibility rquirements.

The agreement was thereafter amended a number of times. On September 21, 1954, it was completely rewritten to provide, among other things, that the beneficiaries were persons "who are, who have been, or who shall be members of" the union "and who are, who have been, or who shall be employed either by that union, or by the employers", both wholesale and retail, "who shall have entered into collective bargaining agreements with the union" providing for payments to the Trust. On May 24, 1956, the trustees were authorized to erect and operate "a non-profit health center or hospital" to provide medical and hospital services for beneficiaries, and to acquire property and personnel therefor.

On December 20, 1956, the agreement was again completely rewritten. This stated that the purpose of the Trust, among other things, was to pay for "medical or hospital care, pensions on retirement or death of employees, compensation for injuries or illness resulting from occupational activity, or insurance. * * *" An amendment of March 28, 1957, provided that the term "employees" was also to include union members "(and dependent wives only) who were insured under this agreement, but who have retired and whose annual earnings do not exceed $1200.00 per year". An amendment of September 19, 1957, broadened the stated powers of the trustees to include operation of a camp and, in the program of medical care, "a competently-staffed convalescent home and center, an occupational therapy workshop", dormitories and cottages "where group therapy may be applied in camp surroundings", and the like. A further amendment of the same date provided for three "Alternate Union Trustees" in order to "insure a continuity of Union representation at trust meetings". An amendment of August 21, 1958, deleted the reference to union member-former insureds who have retired. An amendment of November 20, 1958, gave the trustees general powers to borrow and to mortgage.

The agreement was completely rewritten once more on December 18, 1958. This time it provided that the union and the Trust could contribute as employers thereunder. On October 15, 1959, the reference, among the trust purposes, to "pensions on retirement or death of...