Burlington Northern v. IBET

• Decision Date: 08 March 2000
• Docket Number: No. 97-35859,97-35859
• Citation: 203 F.3d 703
• Parties: (9th Cir. 2000) BURLINGTON NORTHERN SANTA FE RAILWAY COMPANY; SANTA FE RAILWAY COMPANY, Plaintiffs-Appellees, v. INTERNATIONAL BROTHERHOOD OF TEAMSTERS LOCAL 174, an OPINION unincorporated association; ROBERT A. HASEGAWA, an individual; ERIC SMITH, Defendants-Appellants
• Court: U.S. Court of Appeals — Ninth Circuit

Page 703

203 F.3d 703 (9th Cir. 2000)

BURLINGTON NORTHERN SANTA FE RAILWAY COMPANY; SANTA FE RAILWAY COMPANY, Plaintiffs-Appellees, v. INTERNATIONAL BROTHERHOOD OF TEAMSTERS LOCAL 174, an OPINION unincorporated association; ROBERT A. HASEGAWA, an individual; ERIC SMITH, Defendants-Appellants.

No. 97-35859

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

Argued and Submitted May 4, 1998

Opinion Decided March 16, 1999

Withdrawn and Rehearing En Banc Granted August 27, 1999

Argued and Submitted on Rehearing October 21, 1999

Decided February 15, 2000

As Amended on Grant of Modification March 8, 2000

[Copyrighted Material Omitted] COUNSEL: Roy T. Englert, Jr., Mayer, Brown & Platt, Washington, D.C. (argued); and Michael R. Rayton, Ryan, Swanson & Cleveland, Seattle, Washington, (brief) for the plaintiffs-appellees.

Dmitri Iglitzin, Schwerin, Campbell & Barnard, Seattle, Washington (argued); Jonathan P. Hiatt, Washington, D.C., Earl Brown, Washington, D.C., and Marsha S. Berzon and Scott A. Kronland, of Altshuler, Berzon, Nussbaum, Berzon & Rubin, San Francisco, California (briefs), for the defendants-appellants.

Donald Munro, Shea & Gardner, Washington, D.C., for amicus Airline Industrial Relation Conference.

Appeal from the United States District Court for the Western District of Washington; Walter T. McGovern, District Judge, Presiding. D.C. No. CV-97-01052-WTM

Before: Procter Hug, Jr., Chief Judge, Mary M. Schroeder, Harry Pregerson, Diarmuid F. O'Scannlain, Stephen S. Trott, Pamela Ann Rymer, Michael Daly Hawkins, A. Wallace Tashima, Barry G. Silverman, Susan P. Graber, and M. Margaret McKeown, Circuit Judges.

PREGERSON, Circuit Judge:

This case requires us to decide the breadth of the term "labor dispute" as defined by the Norris-LaGuardia Act, 29 U.S.C. S 101 et seq. The union in this case threatened to picket a railroad unless the railroad agreed to subcontract work only to subcontractors who employ the union's members. We must decide whether the union and the railroad were engaged in a labor dispute. The district court decided that this dispute was not a labor dispute and enjoined the union from picketing. We have jurisdiction under 28 U.S.C.S 1292(a)(1), and we reverse.

I

Plaintiff-appellee Burlington Northern and Santa Fe Railway Company ("Burlington Northern") is an interstate rail common carrier that operates an intermodal hub in Seattle, Washington. The present dispute arose when Burlington Northern terminated a subcontracting agreement with Eagle Systems, Inc. ("Eagle") for loading and unloading services at the Seattle hub and transferred the work to another subcontractor, Parsec, Inc. ("Parsec"). As a consequence, 53 Eagle employees lost their jobs.

Defendant-appellant International Brotherhood of Teamsters Local 174 ("Local 174") represents the Eagle employees who lost their jobs when Burlington Northern transferred the subcontracted work from Eagle to Parsec. Local 174 also represents employees of other subcontractors who continue to perform work under subcontracts with Burlington Northern. Local 174 does not represent any employees of either Burlington Northern or Parsec. A union that is not affiliated with the Teamsters represents the Parsec employees who perform the work formerly done by Eagle employees.

Local 174's first response to Burlington Northern's termination of the Eagle contract was to request Burlington Northern's aid in persuading Parsec to hire the former Eagle employees. Burlington Northern refused to arrange a meeting between Parsec and Local 174. Next, Local 174 sent a letter to Burlington Northern, explaining how the transfer of work to Parsec affected its members:

It has come to our attention that the Burlington Northern/Santa Fe Railroad Company at times has chosen to subcontract ramp and deramp work located within the geographical jurisdiction of Inter national Brotherhood of Teamsters, Local 174, to employers who have themselves as of the time of the subcontract not entered into a collective bargaining agreement with Local 174 or otherwise committed themselves to employ Local 174 members to per form work covered by the subcontract. This appears to be the case even though the work covered by these subcontracts has traditionally and consistently been performed by Local 174 members working pursuant to a collective bargaining agreement.

Any future use by BNSF of subcontractors who do not have collective bargaining relationships with Local 174 would deprive our members of work tradi tionally performed by members of Local 174's bar gaining units. For this reason, use of such subcontractors by BNSF in the future would impose substantial economic costs and personal hardship on the members of Local 174, including the loss of health, welfare, and pension benefits paid to the Western Conference of Teamsters Pension Fund.

Local 174 then requested that Burlington Northern agree not to subcontract any loading and unloading services to any subcontractor that did not have a current collective bargaining agreement with Local 174. Local 174 also threatened to picket in support of this demand. In the letter, Local 174 specifically limited its demand to future subcontracting agreements and disclaimed any intent to force Burlington Northern to terminate existing subcontracting agreements. Robert Hasegawa, Secretary-Treasurer of Local 174, testified that the union's objective in demanding this agreement was to protect "family wage jobs and working conditions" in the area against deterioration.

Local 174 never commenced the threatened picketing because Burlington Northern brought this action against Local 174,¹ alleging violations of the Railway Labor Act, 45 U.S.C. S 151 et seq., and federal antitrust laws, 15 U.S.C. S 1 et seq., and seeking injunctive relief.² After the suit was filed, Local 174 stipulated to the court that it would refrain from picketing until the court decided Burlington Northern's motion for a preliminary injunction. The district court ruled that the Norris-LaGuardia Act did not bar it from issuing an injunction. The court then issued a preliminary injunction because it believed that Local 174's threatened picketing was "substantially likely [to be] violative of the federal antitrust law." The injunction restrains Local 174 from"[c]alling, ordering, authorizing, encouraging, inducing, approving, continuing, starting, suffering, permitting or carrying out any strike, picket or work stoppage" at Burlington's facilities. On appeal to the Ninth Circuit, a divided three-judge panel affirmed. See Burlington N. Santa Fe Ry. Co. v. International Bhd. of Teamsters Local 174, 170 F.3d 897 (9th Cir. 1999). We vacated the panel's decision and agreed to rehear the appeal en banc.

II

The Norris-LaGuardia Act deprives federal courts of jurisdiction to issue an injunction to restrain peaceful picketing in "any case involving or growing out of any labor dispute." 29 U.S.C. S 104. Norris-LaGuardia defines the term "labor dispute" as

any controversy concerning terms or conditions of employment, or concerning the association or repre sentation of persons in negotiating, fixing, maintain ing, changing, or seeking to arrange terms or conditions of employment, regardless of whether or not the disputants stand in the proximate relation of employer and employee.

29 U.S.C. S 113(c). We hold that a dispute between a union and a seclient company (here, Burlington Northern) over whether the client company's subcontractors must employ that union's members is a Norris-LaGuardia labor dispute. Thus, the dispute between Local 174 and Burlington Northern falls squarely behind Norris-LaGuardia's jurisdictional bar, and the district court had no power to enjoin Local 174 from picketing Burlington Northern.³

A

We review de novo a district court's exercise of subject matter jurisdiction. See Hexom v. Oregon Dep't of Transp., 177 F.3d 1134, 1135 (9th Cir. 1999). The existence of a "labor dispute" within the meaning of the Norris-LaGuardia Act is also a question of law that we review de novo. See Smith's Management Corp. v. IBEW, Local 357, 737 F.2d 788, 789 (9th Cir. 1984).

B

Congress enacted the Norris-LaGuardia Act in 1932 to "tak[e] the federal courts out of the labor injunction business." Jacksonville Bulk Terminals, Inc. v. International Longshoremen's Ass'n, 457 U.S. 702, 712 (1982). By stripping the federal courts of jurisdiction to enjoin labor disputes, Congress took an "extraordinary step . . . to remedy an extraordinary problem." Burlington N. R.R. Co. v. Bhd. of Maintenance Way Employees, 481 U.S. 429, 437 (1987). The "extraordinary problem" dates back to the final decades of the nineteenth century when federal courts routinely enjoined labor picketing at the behest of employers. See Patrick Hardin, The Developing Labor Law 7 (3d ed. 1992); see also National Woodwork Mfrs. Ass'n v. NLRB, 366 U.S. 612, 620 (1967) (stating that "[f]ederal court injunctions freely issued against all manner of strikes and boycotts under rulings that condemned virtually every collective activity of labor as an unlawful restraint of trade"); see, e.g., Bedford Cut Stone Co. v. Journeyman Stone Cutters' Ass'n, 274 U.S. 37 (1927); Duplex Printing Press Co. v. Deering, 254 U.S. 443 (1921); Gompers v. Buck's Stove & Range Co., 221 U.S. 418 (1911); Loewe v. Lawlor, 208 U.S. 274 (1908); In re Debs, 158 U.S. 564 (1895). This practice was derisively dubbed "government by injunction." Milk Wagon Drivers' Union v. Lake Valley Farm Prods. , 311 U.S. 91, 102 (1940).

The popularity of injunctive relief among employers stemmed from its unique effectiveness in stifling labor disputes. In contrast to civil damages or criminal prosecution, preliminary injunctions enabled employers to defeat unions instantly by preventing them from using self-help and destroying the momentum of strikes before substantive legal rights were litigated. "[W]here the substantive law was uncertain, the availability of...