Chamber of Commerce v. Reich

• Decision Date: 31 July 1995
• Docket Number: Civ.A. No. 95-0503.
• Citation: 897 F. Supp. 570
• Parties: CHAMBER OF COMMERCE of the United States of America, et al., Plaintiffs, v. Robert B. REICH, Secretary, U.S. Department of Labor, Defendant.
• Court: U.S. District Court — District of Columbia

897 F. Supp. 570

CHAMBER OF COMMERCE of the United States of America, et al., Plaintiffs, v. Robert B. REICH, Secretary, U.S. Department of Labor, Defendant.

Civ.A. No. 95-0503.

United States District Court, District of Columbia.

July 31, 1995.

COPYRIGHT MATERIAL OMITTED

Timothy Belcher Dyk, Jones, Day, Reavis & Pogue, Washington, DC, for plaintiffs.

Margaret Susan Hewing, U.S. Department of Justice, Civil Division, Washington, DC, Sandra Marguerite Schraibman, U.S. Department of Justice, Federal Programs Branch, Washington, DC, for defendants.

Frank Myers Northam, Webster, Chamberlain & Bean, Washington, DC, for National Right to Work Committee, Inc.

AMENDED MEMORANDUM-OPINION¹

KESSLER, District Judge.

This case presents a challenge to the authority of the President of the United States to issue an Executive Order, pursuant to the Federal Property and Administrative Services Act ("FPASA"), 40 U.S.C. § 471, et seq., authorizing the Secretary of Labor to disqualify employers, with federal contracts exceeding $100,000, who hire permanent replacement workers during a lawful economic strike.

This Court originally held that the case, in the posture then presented, was not ripe for judicial review and dismissed Plaintiffs' requests for declaratory and injunctive relief. Chamber of Commerce v. Reich, 886 F.Supp. 66 (D.D.C.1995). On appeal, the Court of Appeals held, because the implementing regulations had become final and both the "fitness and hardship prongs" of Abbott Laboratories v. Gardner, 387 U.S. 136, 148-149, 87 S.Ct. 1507, 1515, 18 L.Ed.2d 681 (1967) had been satisfied, that the case was ripe for judicial review and remanded it for expedited consideration. Chamber of Commerce v. Reich, 57 F.3d 1099 (D.C.Cir.1995) (per curiam).

On remand, this Court now concludes that judicial review is precluded under Dalton v. Specter, ___ U.S. ___, 114 S.Ct. 1719, 128 L.Ed.2d 497 (1994). Despite that conclusion, the Court has determined, for the following reasons, that the public interest and the interest of the litigants will be best served by reaching the merits of all the legal issues presented: the full implications of the Dalton opinion are decidedly unclear at this point,² and it is not unlikely that either the Court of Appeals or the Supreme Court (where all parties acknowledge that this case is heading) may, upon reflection, reach a conclusion that differs from this Court's; the parties raise important issues regarding the extent of Presidential power and the scope of national labor relations policy; and judicial economy and efficiency dictate that all of these difficult questions be resolved as expeditiously as possible in one unitary proceeding rather than in a piecemeal fashion.

On the merits of the issues presented, the Court concludes, first, that the Executive Order is authorized under the FPASA, and demonstrates a sufficiently close nexus between the statutory goals of economy and efficiency in government procurement and the specific provisions of the Order.

Second, the Court concludes that the Executive Order applies to activities in which the government is engaging in its proprietary capacity as a purchaser of goods and services, not to activities of a regulatory or policy-making nature. Consequently, the preemption doctrines enunciated by the Supreme Court under the Labor Management Relations Act ("LMRA") and the National Labor Relations Act ("NLRA"), 29 U.S.C. § 141 et seq.,³ are not applicable. Therefore, the government is free to insist, as a condition of its entering into federal contracts, that employers not hire permanent replacements for economic strikers even though such a condition would, in the private collective bargaining sector, fall into the "free zone from which all regulation, `whether federal or State,' is excluded," Golden State Transit Corp. v. City of Los Angeles, 493 U.S. 103, 111, 110 S.Ct. 444, 451, 107 L.Ed.2d 420 (1989).

Finally, the Court concludes, after balancing all the relevant factors, that an injunction pending appeal is warranted because the irreparable injury claimed by Plaintiffs from not granting such a stay will far outweigh any loss to be suffered by the government or the public by granting it.

I. Statement of Facts⁴

On March 8, 1995, President William J. Clinton issued Executive Order 12954, 60 Fed.Reg. 13023 (1995) ("Executive Order" or "Order"). The Order's stated purpose is "to ensure the economical and efficient administration and completion of Federal Government contracts." Id. at 13023. The Order states that "it is the policy of the executive branch in procuring goods and services that ... contracting agencies shall not contract with employers that permanently replace lawfully striking employees." Id. The Order applies to government contracts in excess of $100,000. On May 25, 1995, the Secretary of Labor, who is charged with implementing the Order, issued final regulations. See Permanent Replacement of Lawfully Striking Employees by Federal Contractors, 60 Fed. Reg. 27,856 (May 25, 1995) (to be codified at 29 C.F.R. ch. II & pt. 270) (effective date June 26, 1995).

On March 15, 1995, Plaintiffs, Chamber of Commerce of the United States of America, American Trucking Associations, Inc., Labor Policy Association, National Association of Manufacturers and Bridgestone/Firestone, Inc. filed suit for declaratory and injunctive relief seeking to immediately enjoin implementation of the Order and to declare it unlawful. On May 9, 1995, this Court granted the government's Motion to Dismiss, and dismissed the complaint on grounds of prematurity. On June 21, 1995, the Court of Appeals reversed and remanded the case for a decision on the merits. At this juncture, the parties' cross-motions for summary judgment are once again before the Court.

II. Judicial Review Is Precluded under Dalton v. Specter

In Dalton v. Specter, ___ U.S. ___, ___, 114 S.Ct. 1719, 1728, 128 L.Ed.2d 497 (1994), Chief Justice Rehnquist, writing for a unanimous Court,⁵ ruled that the plaintiff's claim that the President exceeded his authority under the Defense Base Closure and Realignment Act of 1990, 10 U.S.C. § 2687 (1988 Ed., Supp. IV), "is not a constitutional claim, but a statutory one." ___ U.S. at ___, 114 S.Ct. at 1728. In examining such a statutory claim, the Court held that where a statute such as the 1990 Defense Base Closure Act "commits decision-making to the discretion of the President, judicial review of the President's decision is not available." Id. Finally, while acknowledging that courts may review claims that a President acted unconstitutionally, Dalton emphasized that "simply alleging that the President has exceeded his statutory authority" does not turn statutory claims into constitutional ones subject to judicial review. ___ U.S. at ___, 114 S.Ct. at 1726.

This case fits squarely within the parameters of Dalton. Plaintiffs are asserting that the Executive Order is unconstitutional because it violates the doctrine of separation of powers. However, Plaintiffs' separation of powers claim is based on the perceived conflict between the Executive Order and various provisions of the NLRA and the LMRA. In reality, what Plaintiffs seek to paint as their "constitutional" claim, in order to obtain judicial review under Dalton, is simply a claim that the provisions of the Executive Order violate other existing statutes. In short, it is a claim that the President abused or exceeded his statutory powers.

That is precisely the rationale explicitly rejected by the Supreme Court when it reversed the Third Circuit in Dalton. That Court of Appeals had "reasoned, ... that whenever the President acts in excess of his statutory authority, he also violated the constitutional separation of powers doctrine." ___ U.S. at ___, 114 S.Ct. at 1725. Concluding that this analysis relied upon by the Third Circuit "is flawed", the Supreme Court explained that

our cases do not support the proposition that every action by the President, or by another executive official, in excess of his statutory authority is ipso facto in violation of the Constitution. On the contrary, we have often distinguished between claims of constitutional violations and claims that an official has acted in excess of his statutory authority. ___ U.S. at ___, 114 S.Ct. at 1726.

Applying the Court's reasoning to this case, the same conclusion must be reached: namely that the claim being asserted is a statutory one, and not a constitutional one.

In an effort to avoid the consequences of this reasoning, Plaintiffs try to differentiate between situations in which the actions of the President, taken pursuant to statutory authority, are inconsistent with provisions of the statute upon which he is relying and situations in which his actions, taken pursuant to statutory authority, are inconsistent with provisions of statutes other than the one upon which he is relying for his authority. The distinction is an illusory one, however, since in either case it is statutes — not Constitutional provisions — which are defining and confining the President's authority to act.

While Dalton reaffirms the holding in Franklin v. Massachusetts, 505 U.S. 788, 112 S.Ct. 2767, 120 L.Ed.2d 636 (1992), that presidential decisions are reviewable for claims genuinely raising constitutional issues, i.e., that the President violated a specific Constitutional right or relied solely on the Constitution for asserting his authority, that holding does not advance Plaintiffs' position. In reaffirming this principle, the Court cites as an example, Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579, 587, 72 S.Ct. 863, 866, 96 L.Ed. 1153 (1952), where the "only basis of authority asserted was the President's inherent constitutional power as the Executive and the Commander-in-Chief of the Armed Forces." ___ U.S. at ___, 114 S.Ct. at 1726. In the instant case, neither Plaintiffs nor Defendant are claiming Presidential reliance on inherent constitutional...