Federal Prescription Service, Inc. v. Amalgamated Meat Cutters and Butcher Workmen of North America, AFL-CIO and Its Local P-1149, AFL--CIO

• Decision Date: 22 January 1976
• Docket Number: AFL--CIO,74--1469,Nos. 74--1451,P--1149,s. 74--1451
• Parties: 91 L.R.R.M. (BNA) 2091, 78 Lab.Cas. P 11,206 FEDERAL PRESCRIPTION SERVICE, INC., Appellant and Cross-Appellee, v. AMALGAMATED MEAT CUTTERS AND BUTCHER WORKMEN OF NORTH AMERICA,AND ITS LOCAL, et al., Appellees and Cross-Appellants.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 269

527 F.2d 269

91 L.R.R.M. (BNA) 2091, 78 Lab.Cas. P 11,206

FEDERAL PRESCRIPTION SERVICE, INC., Appellant and Cross-Appellee, v. AMALGAMATED MEAT CUTTERS AND BUTCHER WORKMEN OF NORTH AMERICA, AFL--CIO AND ITS LOCAL P--1149, et al Appellees and Cross-Appellants.

Nos. 74--1451, 74--1469.

United States Court of Appeals Eighth Circuit.

Submitted March 10, 1975.

Decided Dec. 18, 1975.

Rehearing Denied Jan. 22, 1976.

George S. Leonard, Washington, D.C., for appellant and cross-appellee.

Robert H. Nichols, Chicago, Ill., for appellees and cross-appellants.

Before VAN OOSTERHOUT, Senior Circuit Judge, ROSS, Circuit Judge, and TALBOT, SMITH, ^* Senior District Judge.

TALBOT SMITH, Senior District Judge.

This case grows out of a prolonged and acrimonious labor dispute. In the court below, the plaintiff Company, Federal Prescription Service, Inc., hereafter Federal, obtained a jury award of $18,841.95, compensatory damages, and $32,500 punitive damages against the defendant Unions, Amalgamated Meat Cutters and Butcher Workmen of North America, AFL--CIO, hereafter International, and its Local P--1149. The individual defendants joined in the action were acquitted. The lower court, on motion, struck the punitive award, denied Federal its costs, requiring each party to bear its own, and let stand the compensatory award against both union defendants. We vacate the award against the International and otherwise affirm.

The background of this case was set forth in our opinion in Federal Prescription Service, Inc. v. National Labor Relations Board, No. 73--1362, and Amalgamated Meat Cutters and Butcher Workmen of North America, AFL--CIO v. National Labor Relations Board, No. 73--1420, both published in 496 F.2d 813 (8th Cir. 1974), in 203 N.L.R.B. No. 145 (1973) and in the record now before us.

Federal is an Iowa pharmacy corporation, having a plant in Madrid, Iowa, doing a national mail order drug prescription business. Its work force consisted of local housewives and school girls, in addition to licensed pharmacists. Dissatisfied with their wages and working conditions, certain of the employees sought improvement of their situation and, in early March of 1971 a union organizational campaign was commenced at the plant. Federal's response was a program of unlawful obstruction and coercion.

The Board found in agreement with its trial examiner ¹ that Employer violated § 8(a)(1) of the National Labor Relations Act by coercively interrogating its employees, interfering with employee meetings, threatening its employees with discharge, discriminatorily changing work rules, and promising benefits as an inducement to abandon support of the Union; that Employer violated § 8(a)(3) and (1) of the Act by discharging ten employees in order to discourage pro-Union activities; and that it violated § 8(a)(5) and (1) of the Act by refusing to bargain with the Union. The Board concluded that Employer's violations 'not only precluded a fair election, but were of such a pervasive and aggravated character . . . that an order directing the Company to bargain with the Union (was) necessary to repair the unlawful effects.' N.L.R.B. v. Gissel Packing Co., 395 U.S. 575, 89 S.Ct. 1918, 23 L.Ed.2d 547 (1969).

Federal Prescription Service, Inc. v. N.L.R.B., 496 F.2d 813, 815 (8th Cir. 1974) (Footnote in original).

We will here consider certain incidents connected with the strike, which incidents were triggered by the discharge of ten employees prior to the election. We described the following sequence of events, in essential part, in our previous opinion, stating therein that:

On April 2, 1971, ten employees were terminated. The following day a strike commenced in protest of the discharges. A petition for a temporary restraining order against Mass (sic) picketing was subsequently filed by Employer in state court, and an order granting the same was issued on April 8. Thereafter, on one occasion, mass picketing occurred, principally by husbands of employees and by employees of other plants represented by the Union. On two other occasions later in April, a number of car-following incidents occurred. This ultimately led to two groups of employees being found in contempt of court.

496 F.2d at 817.

The record before us is replete with acts of violence and intimidation, well warranting our prior conclusion that there was an atmosphere of terrorism on the part of Union adherents.

The action before us was framed in two counts, the first invoking federal jurisdiction under 29 U.S.C. § 187 (§ 303 of the Labor Management Relations Act), alleging Union violations of the prohibition against secondary boycotts, 29 U.S.C. § 158(b)(4) ¹ (§ 8(b)(4) of the Act), the second filed under the pendent jurisdiction of the District Court, alleging claims for compensatory and punitive damages under Iowa tort law for injury to Federal's business and property.

Federal here appeals the trial court's setting aside of the jury award of punitive damages, of its denial of costs to Federal, and of its exclusion of Federal's evidence relating to its loss of future profits. The Unions have cross appealed, alleging error in the Court's denial of their motions for directed verdicts and for judgments n.o.v., error in the Court's submission of the second count to the jury after dismissal of the federal cause of action asserted in the first count, and in denial of their motion for remittitur of the award of compensatory damages.

We first consider the District Court's dismissal of count one, the federal cause of action, together with its retention of the case thereafter under its pendent jurisdiction. The charges of secondary boycott made in count one related to plaintiff's allegations of violations of Section 8(b)(4), 29 U.S.C. § 158(b)(4), with respect to the Madrid Sanitary Service and the Bud Plummer Construction Co., contractors hired by Federal to pick up its trash.

The District Court held that the evidence tendered in support of the secondary boycott charge as to these entities was 'so devoid of merit as to both the elements of damage and liability that it warranted a directed verdict,' and, further, that the secondary boycott count 'lacked substance and was filed merely to give the Court jurisdiction over the pendent count.' ²

The objective of the Union action was to place direct economic pressure on Federal in order to accede to the Union's demands which had their origins in the working conditions and pay schedules in Federal's plant. Such a strike in support of lawful demands is, of course, permissible. Its restrictive impact, should such occur, upon suppliers and contractors is predictable and not unlawful.

In National Maritime Union v. N.L.R.B., 367 F.2d 171 (8th Cir. 1966) we pointed out, quoting United Steel Workers of America, AFL--CIO v. N.L.R.B., 376 U.S. 492, 499, 84 S.Ct. 899, 11 L.Ed.2d 863 (1964) that:

The primary strike, which is protected by the proviso, is aimed at applying economic pressure by halting the day-to-day operations of the struck employer. But Congress not only preserved the right to strike; it also saved 'primary picketing' from the secondary ban.

367 F.2d at 176.

Plaintiff stresses to us that the defendants threatened and coerced certain persons, including the trash contractors here involved. It is clear, however, that where the picketing is primary, as it was here, it does not become illegal secondary activity because it was accompanied by threats and violence. United Steel Workers of America, AFL--CIO v. N.L.R.B., 376 U.S. 492, 501, 84 S.Ct. 899, 11 L.Ed.2d 863 (1964), Smith v. American Guild of Variety Artists, 349 F.2d 975, 978 (8th Cir. 1965). There was no error in the dismissal of this count.

The federal count having properly been dismissed, the question of pendent jurisdiction over count two, the Iowa tort claim, arises. The defendants urge that 'once having concluded that the federal count was totally baseless and assuming, arguendo, that the court was correct in declining to enter a judgment in favor of Defendant Unions . . . the court abused its discretion by submitting the common law tort claims contained within the pendent count to the jury.' This issue will not detain us long. The pleadings embodied a secondary boycott claim of apparent substance combined with a state tort action, both deriving from a common nucleus of operative fact. United Mine Workers of America v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966). Although the evidence did not warrant a finding for Federal on the issue of secondary boycott, we are of the opinion that, given the expenditure of judicial time and energy on this case, and in view of the common nucleus of operative fact, the exercise of pendent jurisdiction by the District Court was not an abuse of its discretion. Id. at 725--726, 86 S.Ct. 1130; Kayser-Roth Corp. v. Textile Workers Union of America, 479 F.2d 524 (6th Cir. 1973). Professor Moore accurately summarizes the present state of the law in the statement that:

(T)he standard to be applied under Gibbs is essentially one of convenience not too different from that established for joinder of claims under Rule 18. And the trend, confirmed by Gibbs, away from a rigid jurisdictional theory toward a matter of convenience and sound judicial administration has accelerated since the Court's decision of Gibbs.

3A J. Moore, Federal Practice, § 1807(1.--4) at 1953 (1974). (Footnote omitted.)

This court, in Farmland Industries, Inc. v. Kansas-Nebraska Natural Gas Co., Inc., 486 F.2d 315 (1973) has made clear that pendent jurisdiction is a doctrine not of plaintiff's right but of the court's discretion. ³

With respect to the damages assessed in the pendent count retained, it is argued to us that as to the International Union in particular there is a complete failure of the proofs demanded by Section 6 of the Norris-LaGuardia Act, 29 U.S.C. § 106. ⁴ The requirements of Section 6 are clear, namely that Federal must establish by ...