Delaware Coach Co. v. Public Service Com'n of State of Del., Civ. A. No. 3314.

• Decision Date: 15 March 1967
• Docket Number: Civ. A. No. 3314.
• Parties: DELAWARE COACH COMPANY, a corporation of the State of Delaware, Plaintiff, v. The PUBLIC SERVICE COMMISSION OF the STATE OF DELAWARE, and Vernon B. Derrickson, Nutter D. Marvel, Joseph C. Hutchinson, Jr., members thereof, Defendants.
• Court: U.S. District Court — District of Delaware

265 F. Supp. 648

DELAWARE COACH COMPANY, a corporation of the State of Delaware, Plaintiff, v. The PUBLIC SERVICE COMMISSION OF the STATE OF DELAWARE, and Vernon B. Derrickson, Nutter D. Marvel, Joseph C. Hutchinson, Jr., members thereof, Defendants.

Civ. A. No. 3314.

United States District Court D. Delaware.

March 15, 1967.

Frank O'Donnell and Stanley C. Lowicki, O'Donnell, Hughes & Lowicki, Wilmington, Del., and Charles E. Thomas, Metzger, Hafer, Keefer, Thomas & Wood, Harrisburg, Pa., of counsel, for plaintiff.

Joseph T. Walsh, Wilmington, Del., for defendant, The Public Service Commission.

E. D. Griffenberg, Jr., Asst. County Atty., for defendant-intervenor, New Castle County.

Clifford B. Hearn, Jr., Asst. City Sol., for defendant-intervenor, City of Wilmington.

WRIGHT, Chief Judge.

This is an action for a preliminary injunction, brought by the Delaware Coach Company (Coach) against the Public Service Commission for the State of Delaware (Commission). The City of Wilmington (City) and New Castle County (County) have intervened as parties defendant. The Court has previously granted a temporary restraining order on the authority of United States v. United Mine Workers of America, 330 U.S. 258, 67 S.Ct. 677, 91 L.Ed. 884 (1947), to preserve the status quo pending an exploration by the Court of its jurisdiction in the premises.

On November 16, 1966 the Amalgamated Transit Union, Division 842, struck Coach. Since the commencement of the strike more than 55 bargaining sessions have been held without any reconciliation. Throughout this period the City of Wilmington has been without any mass transit facilities. On February 10, 1967 the City and the County moved the Commission for an order to show cause why Coach's certificate of public convenience and necessity should not be revoked. The order issued. Coach entered a limited appearance to challenge the jurisdiction of the Commission, this Court having refused injunctive relief because of the uncertainty that the Commission would take jurisdiction. The Commission denied Coach's motion to dismiss, and ordered that Coach answer the order to show cause.

Coach now seeks a preliminary injunction against the Commission on the theory that the National Labor Relations Act has preempted the field. Specifically, Coach argues that the Commissions's order to show cause is a thinly veiled threat that the company's certificate will be revoked absent capitulation to Union demands. Coach argues that this coercive threat violates the sanctity of collective bargaining which is the proper way to resolve labor disputes under the National Labor Relations Act. Oil, Chemical and Atomic Workers Intern. Union, Local 5-283 v. Arkansas Louisiana Gas Co., 332 F.2d 64 (10th Cir. 1964), General Electric Co. v. Callahan, 294 F.2d 60 (1st Cir. 1961), and Grand Rapids City Coach Lines v. Howlett, 137 F.Supp. 667 (W.D. Mich.1955). A brief analysis of each of these cases will be necessary to the discussion which follows.

The Arkansas case represented an attempt by a State Board to investigate a labor dispute and make recommendations and findings. The Tenth Circuit affirmed the lower court's granting of a permanent injunction.

"The law commands the parties to a labor dispute to bargain collectively, by meeting at `reasonable times and confer in good faith * * *.' citation omitted But, they are not required to strike a bargain. Indeed, the whole spirit and tenor of the Labor Management Relations Act is to encourage collective bargaining—not compel or coerce agreement." 332 F.2d at 66.

In the General Electric case the First Circuit was faced with an appeal by General Electric from the denial of a motion for a preliminary injunction. The State Labor Board had been requested by the Governor of Massachusetts to investigate a labor dispute in progress between General Electric and some of its employees. The State Board, by statute, had limited coercive power, but was empowered to make public its recommendations as to which side was "blameworthy". The Court thought even this potential publication was an interference with the right of collective bargaining guaranteed in the National Labor Relations Act.

"Although the State Board has limited direct coercive power * * * nevertheless the indirect coercive effect of its actions upon the parties to a labor dispute is by no means insubstantial. Mere participation in State Board hearings will surely have some tendency to solidify positions taken at the bargaining table thereby making it more difficult later to modify or abandon a stand taken on a bargaining issue in favor of an amicable settlement. Moreover * * * the Board is not limited to editorial comment. Nor are its functions merely to mediate and conciliate. Its function after investigating a labor controversy is to render a written decision to be made public and be open to public inspection advising the parties as to what they should do to end the controversy and ascertain which of the parties is `mainly responsible or blameworthy' for its existence. The obvious statutory purpose is to coerce agreement by invoking official action to mold public opinion with respect to a labor dispute to the end of bringing the pressure of public opinion to bear to force a settlement. This is quite contrary to the national policy not to compel agreement but instead only to encourage voluntary agreements freely arrived at after `good faith' bargaining between the parties." 294 F.2d at 67.

In Grand Rapids a bus company sought to enjoin the members of a statutory commission from holding hearings and making findings and recommendations on a labor dispute then in progress. The Court held the area was preempted by the National Labor Relations Act and enjoined the Commission from holding the proposed hearings.

"The effect of public pressure resulting from the publication of the recommendations of the defendant fact-finding panel would compel the parties to settle their dispute on the basis recommended except as they might be in a position to resist public pressure which obviously the public utility cannot do. The plaintiff is entitled to negotiate an agreement with the Union after `free and unfettered collective bargaining' * * *." 137 F.Supp. at 673.

These three cases all support the proposition that collective bargaining is a "right" guaranteed by the National Labor Relations Act to the parties to a labor dispute which affects interstate commerce. They further teach that the essence of collective bargaining is the absence of outside coercive pressures. In General Electric, for example, the state board had no power to arbitrate the strike unless both parties submitted the dispute to the board. Yet, the First Circuit held that the mere investigation and editorialization proposed by the state board would have a coercive effect on the collective bargaining process. If such investigation and publication can exert sufficient coercion to imperil the freedom of collective bargaining, then, a fortiori, action which threatens the very existence of a company must have a coercive effect and the above cited cases would seem to apply.

To suggest that the Commission has the right to examine the causes of a termination of transit service is one thing. It is quite another to suggest that the procedure for procuring the desired information may threaten Coach's very existence. Undeniably, the Commission should be kept informed of the progress of negotiations; similarly, the Commission should be told if collective bargaining ceases. But here, it is obvious that the petitioners before the Commission are seeking to force Coach and the Union to an agreement, by threatening the revocation of Coach's certificate. The mere possibility that the Commission might exercise its revocation power is like the proverbial sword of Damocles, poised and ready to terminate Coach's economic existence. Any contract negotiated under such circumstances might not be solely the product of collective bargaining, and might frustrate the federal statutory scheme.

Counsel for the Commission, the City and the County have argued that this Court should not assume that the Commission is aware of the labor dispute. This Court, their argument runs, should see the proposed proceedings as a routine inquiry into Coach's affairs to ascertain the reason for the absence of service. Any such argument is woefully naive. Of course the Commission knows of the existence of the labor dispute. Its knowledge is evidenced on the face of its opinion relative to its jurisdiction. And, of course, the Commission cannot pursue its proposed inquiry without interfering in the labor dispute.

Counsel for the Commission, the City and the County have urged the applicability of 28 U.S.C.A. § 2283 (1948). They have cited Amalgamated Clothing Workers of America v. Richman Brothers Co., 348 U.S. 511, 75 S.Ct. 452, 99 L.Ed. 600 (1955), for the proposition that the federal district courts are powerless to enjoin state public service commissions which threaten to revoke certificates of public convenience and necessity in labor disputes.

Section 2283 provides:

"A court of the United States may not grant an injunction to stay proceedings in a State court except as expressly authorized by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its judgments."

Section 2283 has an unfathomable legislative history. It was originally enacted in 1793, most likely due to the then prevalent distrust of equity jurisdiction. The statute has descended virtually unchanged to the present day. By its terms it protects only a "state court" from the federal writ, but counsel herein have argued that the statute should apply to quasi-judicial proceedings as well. They bottom this contention upon the theory that the policy of § 2283 requires the same protection for quasi-judicial proceedings.

"The Act of 1793 expresses the desire of Congress to avoid friction between the federal

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