Consolidated Theatres, Inc. v. Theatrical Stage Emp. Union, Local 16

• Decision Date: 26 November 1968
• Docket Number: S.F. 22382
• Court: California Supreme Court
• Parties: , 447 P.2d 325, 69 L.R.R.M. (BNA) 2793, 59 Lab.Cas. P 51,991 CONSOLIDATED THEATRES, INC., Plaintiff, Cross-defendant, and Respondent, v. THEATRICAL STAGE EMPLOYEES UNION, LOCAL 16 et al., Defendants, Cross-complainants, and Appellants

Page 213

73 Cal.Rptr. 213

69 Cal.2d 713, 447 P.2d 325, 69 L.R.R.M. (BNA) 2793,

59 Lab.Cas. P 51,991

CONSOLIDATED THEATRES, INC., Plaintiff, Cross-defendant, and Respondent, v. THEATRICAL STAGE EMPLOYEES UNION, LOCAL 16 et al., Defendants, Cross-complainants, and Appellants.

S.F. 22382.

Nov. 26, 1968.

Bodkin, Breslin & Luddy, Michael G. Luddy, Harry A. Olivar and Henry G. Bodkin, Jr., Los Angeles, for defendants, cross-complainants and appellants.

Angell, Adams, Gochnauer & Holmes, Angell, Adams & Holmes, San Francisco, Samuel L. Holmes and Andrew H. Field, for plaintiff, cross-defendant and respondent.

SULLIVAN, Justice.

Defendant union and other defendants appeal from a judgment (1) permanently enjoining them from attempting to induce plaintiff theatre corporation to employ members of the union at one of its theatres except in accordance with a certain alleged agreement; (2) awarding plaintiff theatre corporation damages in the amount of $27,841; and (3) adjudging that defendants should take nothing by reason of their cross-complaint in the action.

Plaintiff Consolidated Theatres, Inc. (Consolidated), a California corporation, owns and operates the Royal Theatre (Royal) in San Francisco, and has done so since the days of silent motion pictures. In the late 1920's when films with sound tracks began to be exhibited in San Francisco theatres, Consolidated and other theatre owners sought to eliminate as employees musicians whose services had been used in connection with silent films. A labor controversy thereupon arose between the several theatre owners on the one hand, and the musicians union on the other. Other theatrical unions joined in the dispute and ensuing picketing; among these was Local 16 of the Theatrical Stage Employees Union ¹ (Local 16), the primary defendant herein. The Royal was one of the theatres picketed.

In March of 1931, Consolidated and another theatre owner filed an action against the unions involved, including Local 16, and obtained an injunction pendente lite prohibiting picketing. Prior to trial a settlement of the controversy was reached, and counsel for Consolidated prepared a document reflecting the elements of the understanding that had been achieved. This document was entitled 'MEMORANDUM OF MISCELLANEOUS ELEMENTS THAT SHOULD ENTER INTO SETTLEMENT OF DIFFERENCES BETWEEN NASSER BROS. ² AND MUSICIANS UNION, ET AL.' and, although it was itself never formally executed by any of the interested parties, it formed the basis of agreements subsequently executed by the plaintiffs and some defendants prior to dismissal of the lawsuit. ³ It appearing that two of the unions involved, namely Local 16 and the local branch of the janitors union, did not make it a practice to enter into formal written agreements, they were not required to do so as a condition of dismissal. However, upon the insistence of plaintiffs, on March 6, 1931, they executed and delivered to their own attorney a letter stating: 'You are authorized to state on behalf of the undersigned Unions that the terms embodied in the memorandum entitled 'Memorandum of miscellaneous elements that should enter into settlement of differences between Nasser Bros., and Musicians Union, et al.' correctly set forth the understanding as to the undersigned unions, * * *' ⁴ The memorandum referred to remained unsigned. After the settlement had been completely effected, all of the unions involved announced to the public that all differences had been adjusted in a fair and equitable manner and that the public should resume its patronage of the theatres involved, to wit, the Royal and Alhambra Theatres owned by Consolidated, and the Castro Theatre owned by the other plaintiff in the suit.

The 1931 memorandum made only two specific references to Local 16. The first, which provided that the union sign a release of claims against the plaintiffs in the dismissed action, is not here in issue. The second is found in section 8 of the memorandum and provides: '8. The following additional covenants are to be included as part of the adjustment * * * (c) That no stage hands shall be required to be employed at the Castro Theatre. (d) That with reference to the employment of stage hands by the owners and operators of the Alhambra and Royal Theatres, it shall be understood that the same conditions shall prevail as to each of said theatres as prevailed on March 1, 1929, namely, that if any stage presentations are offered for the public at the Alhambra Theatre, one stage hand shall be employed.' The memorandum gave no indication as to how long its provisions should be in effect.

As time passed, and the emphasis in the entertainment industry shifted from live theatrical productions to talking motion pictures, persons who had worked as stagehands in the usual sense came to perform the function of maintenance men in motion picture theatres. Local 16, whose jurisdiction included such maintenance men, developed a policy whereby theatres which regularly showed 'first-run' motion pictures were required to employ maintenance men; the union's definition of 'first run' apparently did not include so-called 'art,' 'sex,' or 'foreign' films. At the time of trial herein 31 members of Local 16 were employed as maintenance men in various San Francisco theatres.

The Royal at no time, either before or after the 1931 memorandum, employed stagehands or maintenance men, and maintenance tasks were performed either by the managers or, in the case of substantial repairs, by independent contractors employing union labor.

Until 1959 the Royal was unable to obtain first-run pictures and operated as a neighborhood subsequent-run theatre. In 1959, however, after antitrust litigation had rendered first-run pictures available to neighborhood theatres, the Royal began to show first-run pictures on an occasional basis. In 1962, after the theatre had been extensively renovated, the Royal began to show first-run pictures on a more regular basis.

In January 1963, after another first-run theatre operator had complained that the Royal had a competitive advantage over theatres which had maintenance men, Local 16 met with Consolidated and requested that maintenance men be employed at the Royal when first-run pictures were shown. ⁵ Consolidated, observing that since the renovation of the theatre very little maintenance work had been required, declined to comply with this request on the ground that it had no need for the services in question. In the course of subsequent discussions Consolidated called attention to the provision of the 1931 memorandum which we have set forth above and took the position that that provision was still in effect and wholly governed the rights of the parties. As early as April of 1963, Local 16 expressed its disagreement with this position and, on the advice of its attorney, took the contrary position that the 1931 memorandum had no presently binding effect. When subsequent communications from Local 16 yielded no concession from Consolidated, strike sanction was requested. After an unsuccessful attempt at mediation by an official of the San Francisco Labor Council, strike sanction was granted and picketing began on November 27, 1963. All of the union-member employees of the theatre refused to cross the picket line and the theatre was closed.

The signs carried by the pickets stated 'This Theatre Does Not Operate on the Union Contract with UNION LOCAL $16 I.A.T.S.E. Theatrical Stage Union A.F. OF L. and C.I.O.' While picketing was in progress the Royal exhibited signs which stated 'Royal Theatre PICKETED DUE TO THE FEATHER-BEDDING DEMANDS OF THE STAGEHANDS UNION (ALL OUR EMPLOYEES ARE UNION MEMBERS).' The theatre ran newspaper advertisements to the same effect. Eventually, on December 24, 1963, the Royal reopened on a subsequent-run basis.

On December 9, 1963, Consolidated brought the instant action against Local 16 and two of its agents. The complaint set forth three causes of action: the first alleged breach of the 1931 'contract'; the second alleged that the statement made on the pickets' signs constituted a libel; and the third alleged that the union's picketing activities were illegal in that they constituted a tortious interference with Consolidated's business and a violation of the so-called Hobbs Anti-Racketeering Act. (18 U.S.C.A. § 1951.) ⁶ As amended, the complaint prayed that an injunction issue permanently enjoining Local 16 and its agents from attempting by picketing or other means to coerce or induce Consolidated to employ members of Local 16 at the Royal so long as it was operated without a stage; that compensatory damages in the amount of $60,000 be awarded; and that exemplary damages in the amount of $100,000 be awarded.

Local 16 filed a cross-complaint against Consolidated, alleging that the sign exhibited by the latter at the time of the picketing, together with newspaper advertisements to the same effect, constituted a libel whereby Local 16 was damaged in the amount of $100,000. The union also sought exemplary damages in the amount of $50,000.

After a nonjury trial judgment was entered in favor of Consolidated consisting of a permanent injunction substantially in the terms of the prayer, together with an award of compensatory damages in the amount of $27,841. It was further adjudged that Local 16 should take nothing by its cross-complaint.

Local 16 and its two individually named agents, as defendants and cross-complainants, appealed from the judgment.

We are met at the threshold of our determination with the union's contention that the trial court lacked jurisdiction in the premises because the controversy is subject to the jurisdiction of the National Labor Relations Board (Board) and it has not been demonstrated that the Board has declined or would decline to assert such jurisdiction. Although this contention was not raised before the trial court, ⁷ its jurisdictional nature requires that we consider it for the first time...