Carter-Glogau Laboratories, Inc. v. Construction, Production & Maintenance Laborers' Local 383

• Decision Date: 30 October 1986
• Docket Number: CA-CIV,Nos. 1,CARTER-GLOGAU,s. 1
• Citation: 153 Ariz. 351,736 P.2d 1163
• Court: Arizona Court of Appeals
• Parties: , 126 L.R.R.M. (BNA) 2752 LABORATORIES, INC., Plaintiff-Appellee Cross-Appellant, v. CONSTRUCTION, PRODUCTION & MAINTENANCE LABORERS' LOCAL 383, Defendant-Appellant Cross-Appellee. 8107, 1 8128.

Page 1163

736 P.2d 1163

153 Ariz. 351, 126 L.R.R.M. (BNA) 2752

CARTER-GLOGAU LABORATORIES, INC., Plaintiff-Appellee Cross-Appellant, v. CONSTRUCTION, PRODUCTION & MAINTENANCE LABORERS' LOCAL 383, Defendant-Appellant Cross-Appellee.

Nos. 1 CA-CIV 8107, 1 CA-CIV 8128.

Court of Appeals of Arizona Division 1, Department A.

Oct. 30, 1986.

Reconsideration Denied March 5, 1987.

Review Denied May 12, 1987.

[153 Ariz. 352] Snell and Wilmer by Lawrence F. Winthrop and Gerard C. Morales, Phoenix, for plaintiff-appellee cross-appellant.

Connerton, Bernstein & Katz by Robert J. Connerton and Linda Lipsett, Washington, D.C., and Vlassis & Ott by George P. Vlassis and Katherine Ott, Phoenix, for defendant-appellant cross-appellee.

OPINION

GREER, Presiding Judge.

This action was brought by Carter-Glogau Laboratories, Inc. (plaintiff) against Construction, Production and Maintenance Laborers' Local 383 (defendant) and Laborers' District Council. ¹ Plaintiff alleged that defendants were vicariously liable for the unlawful acts of their members during the course of a strike in 1980 and 1981 at the Carter-Glogau manufacturing facilities in Glendale. Plaintiff sought recovery of expenses incurred for security measures taken, reimbursement for property damages sustained by non-striking employees, and punitive damages as a result of wrongful strike activity.

A jury trial was held resulting in a verdict for the plaintiff assessing compensatory damages of $118,672.62 and punitive damages in the amount of $600,000 against Local 383 only. ² Local 383 filed a motion for new trial and in the alternative for remittitur. The trial court granted the remittitur reducing the punitive damage award to $200,000 but denied the motion for new trial. Local 383 appealed from the judgment and denial of the motion for new trial raising four issues:

(1) Whether federal labor policy or the First Amendment of the United States Constitution require our state courts to apply the "clear proof" standard set forth in § 6 of the Norris-Laguardia Act in a tort action against a labor union?

(2) Whether the trial court erred in allowing the damage award?

(3) Whether the trial court's instructions to the jury were erroneous?

(4) Whether the verdict was a result of passion or prejudice?

The company cross-appealed arguing the trial court abused its discretion by ordering the remittitur. We affirm. ³

I. FACTS

Viewing the evidence and inferences therefrom in a light most favorable to upholding the judgment, Gann v. Morris, 122 Ariz. 517, 596 P.2d 43 (App.1979), the facts necessary to resolve the issues are as follows.

On November 18, 1980 the then-existing collective bargaining agreement between Local 383 and Carter-Glogau expired. Local 383 began picketing the following morning and continued to picket for several months thereafter. During the course of the strike, picketers' actions toward non-striking Carter-Glogau employees often took the form of threatened violence, sexual harassment, and threatened and actual property damage. Evidence adduced at trial shows that specific actions of picketers during the strike included, inter alia, the repeated throwing of bent nails onto the employee parking lot surface, throwing of acid onto employees' cars, harassing of non-striking workers by following them home from work, spitting into the face of a non-striking worker, and numerous explicit threats of physical violence and sexual harassment. The evidence also indicated that on many occasions union stewards, a union business agent, and picket captains not only acquiesced in and approved of these activities but on many occasions actively participated in them.

As a result of these incidents plaintiff hired security guards and consultants, installed security cameras, and reimbursed non-striking employees for damage done to their automobiles. This law suit was brought to recover these expenses incurred by the plaintiff.

II. ANALYSIS

A. Does § 6 of the Norris-Laguardia Act require that the "clear proof" standard apply in a tort action brought against a labor union in a state court?

At trial the court chose to use the normal "preponderance of the evidence" standard generally applicable to civil cases. Defendant contends that federal labor policy and the First Amendment of the United States Constitution require us to apply the standard of "clear proof" under § 6 of the Norris-LaGuardia Act. That section provides:

No officer or member of any association or organization, and no association or organization participating or interested in a labor dispute, shall be held responsible or liable in any court in the United States for the unlawful acts of individual officers, members or agents, except upon clear proof, of actual participation in or actual authorization of, such acts, or of ratification of such acts after knowledge thereof. (Emphasis added).

29 U.S.C. § 106. Section 106 was passed in 1932 out of "the simple concern of Congress ... that unions had been found liable for violence and other illegal acts occurring during labor disputes which they had never authorized or ratified and for which they should not be held responsible." Ramsey v. United Mine Workers, 401 U.S. 302, 309, 91 S.Ct. 658, 663, 28 L.Ed.2d 64, 70 (1971). Defendant argues that United Mine Workers v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966) mandates the application of § 6 to state tort claims against unions in state court as a matter of federal labor policy thereby pre-empting contrary state law. We disagree.

The plaintiff in Gibbs sued the United Mine Workers of America under § 303 of the Labor Management Relations Act, 29 U.S.C. § 187, and under the common law of Tennessee in federal court. He alleged the international union was responsible, inter alia, for the loss of a haulage contract and his job as mine superintendant because members of the UMW's Local 5881 engaged in acts of violence to prevent the opening of the mine where Gibbs was employed. After a jury trial, Gibbs was awarded compensatory and punitive damages. On motion, the trial court set aside that part of the award with respect to the haulage contract and the § 303 LMRA claim, but upheld the state law claim for interference with the employment relationship after remitting the award. The Court of Appeals for the Sixth Circuit affirmed. In Gibbs the Supreme Court held:

Plainly, § 6 applies to federal court adjudications of state tort claims arising out of labor disputes, whether or not they are associated with claims under § 303 to which this section does not apply.

Id. at 737, 86 S.Ct. at 1144, 16 L.Ed.2d at 234 (emphasis added). The court also noted:

This Court has consistently recognized the right of states to deal with violence and threats of violence appearing in labor disputes, sustaining a variety of remedial measures against the contention that state law was pre-empted by the passage of federal labor legislation. (Citations omitted). (Emphasis added).

Id. at 729, 86 S.Ct. at 1140, 16 L.Ed.2d at 230.

It is this language of the court's opinion which we find to be dispositive of this issue; we do not read Gibbs as requiring us to apply § 6 to a state tort claim against a union in our courts.

In Hiestand v. Amalgamated Meatcutters, etc., 233 Kan. 759, 666 P.2d 671 (1983), defendant labor union requested a jury instruction which complied with § 6 of the Norris-Laguardia Act. Instead, the trial court instructed the jury to find union responsibility only upon "proof of actual participation in or actual authorization of any such acts or of ratification of such acts after actual knowledge thereof." Upon appeal the union objected to the deletion of the word "clear" from the jury instruction complaining the standard of proof required was reduced from a clear and convincing standard to a preponderance of the evidence standard. The court noted:

Federal courts must follow 29 U.S.C. § 106, but state courts are not bound by the clear, unequivocal and convincing proof standard of 29 U.S.C. § 106. (Citations omitted).

....

The adoption of the 'clear proof' standard is a matter of policy since 29 U.S.C. § 106 applies only to federal courts.

Id. at 763, 666 P.2d at 674-75 (emphasis added). The court went on to hold that as a matter of public policy in Kansas, section 6 of the Norris-Laguardia Act was to be adopted in their state courts.

We agree that the adoption of the "clear proof" standard in state court actions involving labor unions is a matter of individual state policy. However, we do not find that the public policy of Arizona mandates the application of section 6.

Since there are no cases in Arizona resolving this issue, we look to our state statutes to determine what the policy of Arizona is with respect to union liability for picketline misconduct of its members. The legislature enacted A.R.S. § 23-1301 et seq. which governs labor relations in this state. A.R.S. § 23-1304 provides:

It is unlawful for an employee, labor organization, or officer, agent or member thereof, by any threatened or actual interference with a person, his immediate family or his property, to compel or attempt to compel such person to join a labor organization, to strike against his will or to leave his employment. (Emphasis added).

Further, A.R.S. § 23-1306 provides:

A person who violates any provision of this article, or entered into an agreement containing a provision declared illegal by this article, or who brings about the discharge of or denial of employment of any person because of non-membership in a labor organization shall be liable to the person injured as a result of such act or provision and may be sued therefore, and in such action any labor organization, subdivision, or local thereof shall be bound by the acts of its duly authorized agents acting within the scope of their authority, and may sue or be sued in its common name. (Emphasis added).

The absence in the above statute of any "clear proof" standard of...