Celanese Corporation of America v. NLRB

• Decision Date: 14 June 1961
• Docket Number: No. 12857.,12857.
• Citation: 291 F.2d 224
• Parties: CELANESE CORPORATION OF AMERICA, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
• Court: U.S. Court of Appeals — Seventh Circuit

291 F.2d 224 (1961)

CELANESE CORPORATION OF AMERICA, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

No. 12857.

United States Court of Appeals Seventh Circuit.

June 14, 1961.

Gerard D. Reilly, Washington, D. C., for petitioner.

Marcel Mallet-Prevost, Asst. Gen. Counsel, National Labor Relations Board, Washington, D. C., for respondent.

Before SCHNACKENBERG and CASTLE, Circuit Judges, and GRUBB, District Judge.

GRUBB, District Judge.

The judgment heretofore entered in this case, Celanese Corporation of America v. National Labor Relations Board, 7 Cir., 1960, 279 F.2d 204, has been vacated by the Supreme Court, 1961, 365 U.S. 297, 81 S.Ct. 689, 5 L.Ed.2d 688, and the case has been remanded for consideration by this court in light of National Labor Relations Board v. Mattison Machine Works, 1961, 365 U.S. 123, 81 S.Ct. 434, 5 L.Ed.2d 455. Reference is made to the previous decision in 279 F.2d 204 for a statement of facts.

The case now turns on the question as to the scope of judicial review of orders of the Board respecting the validity of representation elections.

Section 10(e) of the Labor Management Relations Act, 1947, 29 U.S.C.A. § 160(e), which is similar to the provisions of the Administrative Procedure Act, 5 U.S.C.A. § 1001 et seq., requires that the court determine the substantiality of the evidence supporting a Labor Board decision on the record as a whole.

In interpreting this section, Universal Camera Corp. v. National Labor Relations Board, 1951, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456, admonishes the Courts of Appeals of their duties in reviewing Labor Board orders. The courts are to assume more responsibility for the reasonableness and fairness of Board decisions than some courts have previously shown. It is said on pages 490 and 491 of 340 U.S., on page 466 of 71 S.Ct., that:

"* * * The Board\'s findings are entitled to respect; but they must nonetheless be set aside when the record before a Court of Appeals clearly precludes the Board\'s decision from being justified by a fair estimate of the worth of the testimony of witnesses or its informed judgment on matters within its special competence or both.

* * * * * *

"* * * Whether on the record as a whole there is substantial evidence to support agency findings is a question which Congress has placed in the keeping of the Courts of Appeals. * * *"

There is no conflict or contradiction between the substantial evidence rule determinative of the scope of review and the principle whereunder the Board is entrusted with wide discretion in establishing the procedures and safeguards necessary to insure the fair and free choice of bargaining representatives as enunciated in National Labor Relations Board v. A. J. Tower Co., 1946, 329 U.S. 324, 330, 67 S.Ct. 324, 91 L.Ed. 322. These rules do not conflict because they affect differing spheres of activity. The Board's wide discretion lies in the initial promulgation of rules and regulations, while the court exercises its duties in reviewing decisions involving application of the Board's rules. Judicial review in these cases is not concerned with the wisdom of the Board's policy but must determine whether the record as a whole supports the findings and conclusions respecting compliance with the policies, rules, and regulations promulgated by the Board.

Unless or until Congress changes the language of the statute or the Supreme Court changes its interpretation of the application of the statute, this court is bound by the rule of the Universal Camera case.

On oral argument counsel for the Board took the position that the scope of review by Courts of Appeals of orders of the Board as to representation elections was extremely narrow and that the Board's orders should not be set aside unless clearly arbitrary or capricious. Counsel could not think of an example of extreme arbitrariness or capriciousness which, in his opinion, would warrant setting aside an order. This position is far from the interpretation placed on the statute by the United States Supreme Court in the Universal Camera case.

In accordance with the "wide discretion" entrusted to it, the Board has adopted the policy to set aside a representation election where it appears that (1) there has been a material misrepresentation of fact, (2) this misrepresentation comes from a party who had special knowledge or was in an authoritative position to know the true facts, and (3) no...