INTERNATIONAL ORGANIZATION, ETC., v. Red Jacket CC & C. Co.

• Decision Date: 18 April 1927
• Docket Number: No. 2492-2503.,2492-2503.
• Court: U.S. Court of Appeals — Fourth Circuit
• Parties: INTERNATIONAL ORGANIZATION, UNITED MINE WORKERS OF AMERICA, et al. v. RED JACKET CONSOL. COAL & COKE CO., and eleven other cases.

18 F.2d 839 (1927)

INTERNATIONAL ORGANIZATION, UNITED MINE WORKERS OF AMERICA, et al. v. RED JACKET CONSOL. COAL & COKE CO., and eleven other cases.

Nos. 2492-2503.

Circuit Court of Appeals, Fourth Circuit.

April 18, 1927.

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William A. Glasgow, Jr., of Philadelphia, Pa. (Henry Warrum, of Indianapolis, Ind., and T. C. Townsend, of Charleston, W. Va., on the brief), for appellants.

R. S. Spilman and A. M. Belcher, both of Charleston, W. Va. (Edgar L. Greever, of Tazewell, Va., George S. Couch, of Charleston, W. Va., and Samuel M. Austin, of Lewisburg, W. Va., on the brief), for appellees.

Before WADDILL, ROSE, and PARKER, Circuit Judges.

PARKER, Circuit Judge (after stating the facts as above).

The first question for our consideration is whether the evidence establishes a conspiracy in restraint of interstate trade and commerce, in violation of the Sherman Act. This inquiry goes not merely to the propriety of the granting of the injunction, but to the very existence of the power to grant it; for, except in the case of the Red Jacket Coal Company, the jurisdiction of the court in all of the cases rests, not upon diversity of citizenship, but upon the fact that they arise under the laws of the United States. Complainants ask an injunction under the Clayton Act (38 Stat. 730) to prevent injuries threatened in the carrying out of a conspiracy violative of the Sherman Act. Unless, therefore, there is shown a conspiracy violative of the Sherman Act, no case is shown arising under the laws of the United States, and the jurisdiction of the court is at an end.

With the importance of the question in mind, we have given the most careful consideration to the evidence bearing thereon, and we should say in the outset that we do not think that the evidence sustains some of the conclusions which counsel for complainants seek to draw therefrom, or the interpretation they would have us place upon certain of the findings of the learned District Judge with regard to this matter. In the first place, we do not think that the International Organization, United Mine Workers of America, constitutes of itself an unlawful conspiracy in restraint of interstate trade and commerce because it embraces a large percentage of the mine workers of this country or because its purpose is to extend its membership so as to embrace all of the workers in the mines of the continent. It may be conceded that the purposes of the union, if realized, would affect wages, hours of labor, and living conditions, and that the power of its organization would be used in furtherance of collective bargaining, and that these things would incidentally affect the production and price of coal sold in interstate commerce. And it may be conceded further that by such an extension of membership the union would acquire a great measure of control over the labor involved in coal production. But this does not mean that the organization is unlawful. Section 6 of the Clayton Act, 38 Stat. 731 (Comp. St. § 8835f), provides:

"That the labor of a human being is not a commodity or article of commerce. Nothing contained in the anti-trust laws shall be construed to forbid the existence and operation of labor, agricultural, or horticultural organizations, instituted for the purposes of mutual help, and not having capital stock or conducted for profit, or to forbid or restrain individual members of such organizations from lawfully carrying out the legitimate objects thereof; nor shall such organizations, or the members thereof, be held or construed to be illegal combinations or conspiracies in restraint of trade, under the anti-trust laws."

As pointed out in Duplex Printing Press Co. v. Deering et al., 254 U. S. 443, 41 S. Ct. 172, 65 L. Ed. 349, 16 A. L. R. 196, this section does not exempt a labor union or its members from accountability where it or they depart from its normal and legitimate objects and engage in an actual combination or conspiracy in restraint of trade, as, in that case, the carrying on of a secondary boycott; but the section does declare the normal objects of labor unions to be legitimate, and forbids their being held to be combinations or conspiracies in restraint of trade because they are organized or because of the normal effect of such organization on interstate commerce. As said by the Supreme Court in the case just cited, 254 U. S. at 469 (41 S. Ct. 177):

"The section assumes the normal objects of a labor organization to be legitimate, and declares that nothing in the Anti-Trust Laws shall be construed to forbid the existence and operation of such organizations or to forbid their members from lawfully carrying out their legitimate objects; and that such an organization shall not be held in itself — merely because of its existence and operation — to be an illegal combination or conspiracy in restraint of trade."

And, speaking to the same point in the later case of American Foundries v. Tri-City Council, 257 U. S. 184, 209, 42 S. Ct. 72, 78 (66 L. Ed. 189, 27 A. L. R. 360), the court said:

"Labor unions are recognized by the Clayton Act as legal when instituted for mutual help and lawfully carrying out their legitimate objects. They have long been thus recognized by the courts. They were organized out of the necessities of the situation. A single employee was helpless in dealing with an employer. He was dependent ordinarily on his daily wage for the maintenance of himself and family. If the employer refused to pay him the wages that he thought fair, he was nevertheless unable to leave the employ and to resist arbitrary and unfair treatment. Union was essential to give laborers opportunity to deal on equality with their employer. They united to exert influence upon him and to leave him in a body in order by this inconvenience to induce him to make better terms with them. They were withholding their labor of economic value to make him pay what they thought it was worth. The right to combine for such a lawful purpose has in many years not been denied by any court. The strike became a lawful instrument in a lawful economic struggle or competition between employer and employees as to the share of division between them of the joint product of labor and capital. To render this combination at all effective, employees must make their combination extend beyond one shop. It is helpful to have as many as may be in the same trade in the same community united, because in the competition between employers they are bound to be affected by the standard of wages of their trade in the neighborhood."

What is said in this case as to the effect of the standard of wages on competition between employers applies in the coal industry, not to a restricted neighborhood, but to the industry as a whole; for in that industry the rate of wages is one of the largest factors in the cost of production, and affects not only competition in the immediate neighborhood but that with producers throughout the same trade territory. The union, therefore, is not to be condemned because it seeks to extend its membership throughout the industry. As a matter of fact, it has been before the Supreme Court in a number of cases, and its organization has been recognized by that court as a lawful one. United Mine Workers v. Coronado Coal Co., 259 U. S. 344, 385, 42 S. Ct. 570, 66 L. Ed. 975, 27 A. L. R. 762. We have no hesitation, therefore, in holding that the defendants are not guilty of a conspiracy in restraint of trade merely because of the extent and general purpose of their organization.

As pointed out in the case of the Duplex Printing Press Co. v. Deering, supra, however, when the union turns aside from its normal and legitimate objects and purposes and engages in an actual combination or conspiracy in restraint of trade, it is accountable therefor in the same manner as any other organization; and we think that the evidence adduced in this case justifies the conclusion that the defendants have engaged in an actual combination and conspiracy in restraint of trade in a manner quite foreign to the normal and legitimate objects of the union. In this connection, it is not necessary that we consider whether complainants have established a conspiracy between the United Mine Workers and the operators of the central competitive field, or whether the acts of which complaint is made were done in furtherance of such conspiracy, for we think that the evidence sustains the finding of the District Judge that a combination or conspiracy existed among the defendants themselves, without regard to participation by the central operators, to restrain and interfere with the interstate business of complainants. By this we do not mean, of course, that the union was unlawful of itself, but that defendants as officers of the union had combined and conspired to interfere with the production and shipment of coal by the nonunion operators of West Virginia, in order to force the unionization of the West Virginia mines and to make effective the strikes declared pursuant to the policy of the union. The presence of this nonunion field in West Virginia has been a hindrance to the union in its every contest with the operators. It has furnished arguments to the operators in wage negotiations, and in time of strike has furnished coal which has supplied in part the needs of the country and weakened the effect of the strike. Since 1898 the union officials have recognized the importance of unionizing this field, and, with the exception of an interim during the World War, have been engaged in an almost continuous struggle to force its unionization through interference with the business of the nonunion operators. They have called strikes from time to time for this express purpose, and have spent hundreds of thousands of dollars in interfering with their business.

And there can be no question that the strikes called by the union in the nonunion fields...