Lamarca v. Miami Herald Publishing Company

• Decision Date: 28 April 1975
• Docket Number: No. 75-596-CIV-CF.,75-596-CIV-CF.
• Citation: 395 F. Supp. 324
• Parties: Carl LAMARCA et al., Plaintiffs, v. The MIAMI HERALD PUBLISHING COMPANY, a Florida Corporation, and Knight-Ritter Newspaper, Inc., a Florida Corporation, Defendants.
• Court: U.S. District Court — Southern District of Florida

395 F. Supp. 324

Carl LAMARCA et al., Plaintiffs, v. The MIAMI HERALD PUBLISHING COMPANY, a Florida Corporation, and Knight-Ritter Newspaper, Inc., a Florida Corporation, Defendants.

No. 75-596-CIV-CF.

United States District Court, S. D. Florida.

April 28, 1975.

Tobias Simon and Elizabeth J. duFresne, P.A., Miami, Fla., for plaintiffs.

Fisher & Phillips, Atlanta, Ga., and Steel, Hector & Davis, Miami, Fla., for defendants.

ORDER DENYING PLAINTIFFS' MOTION FOR PRELIMINARY INJUNCTION, DENYING DEFENDANTS' MOTION TO DISMISS AND CARRYING WITH THE CASE DEFENDANTS' MOTION TO STRIKE

FULTON, Chief Judge.

This cause came before the Court on the Plaintiff's Motion for a preliminary injunction and after hearing testimony¹ reviewing the memoranda of law from counsel and hearing full argument the Court hereby enters this Order.

FINDINGS OF FACTS

The Plaintiffs are all engaged in the delivery of the Miami Herald to home subscribers in Dade and Broward Counties, Florida. The majority of the Plaintiffs operate under what is entitled an "INDEPENDENT NEWSDEALERS CONTRACT", a copy of which is attached to the Plaintiffs' Complaint as Exhibit "A".

At the time of this hearing the Plaintiffs delivering newspapers under the above styled contracts had received notices of termination of such contracts from the Miami Herald pursuant to § C 1 of the contract, which gives both the carrier and the Miami Herald the right to terminate the agreement without cause by giving fifteen (15) days notice to the other party. Each Plaintiff who received a notice of termination of the Independent Newsdealers Contract was offered continued employment as a home delivery carrier under an agreement entitled "THE MIAMI HERALD PUBLISHING COMPANY NEWSPAPER CARRIER'S EMPLOYMENT AGREEMENT", a copy of which is attached to the Plaintiffs' Complaint as Exhibit "B".

In November, 1974, prior to the issuance of the notices of termination (Exhibit "D",) of the contracts held by the Plaintiffs, all home delivery carriers distributing the Miami Herald in Dade, Broward and Palm Beach Counties were offered the option of signing the Employment Agreement (Exhibit "B") or continuing under the Independent Contract (Exhibit "A"). Of approximately 1,083 carriers involved 965 elected to sign the Employee Agreement.

Although the contract that the Plaintiffs seek to preserve by injunction is entitled "Independent Newsdealers Contract", the testimony at the hearing established that there are substantial elements of control over the Plaintiffs and other carriers exercised pursuant to the contract and the established day to day working relationship.²

The parties have stipulated that the FLORIDA INDUSTRIAL RELATIONS COMMISSION ruled in June, 1974, that home delivery carriers operating under the "Independent Newsdealers Contract" were employees of the Miami Herald for purposes of the Florida Workmen's Compensation Statute. Charles Levine vs. The Miami Herald, Travelers Insurance Company, Florida Industrial Relations Commission Order dated June 25, 1974, Claim XXX-XX-XXXX.

The testimony of Don Nizen was uncontradicted on the point that the Herald's penetration of homes in Dade County measured as a percentage had dropped from approximately 80% in 1962 to less than 60% in 1974. The testimony also indicated that the Herald had spent a substantial sum of money on a Pay By Mail system on which it was relying to reverse this trend. It was also relying on a substantial promotion campaign in support of the Pay By Mail system. The desire to promote the Herald through an integrated price-add campaign was one motivating factor for the conversion. The Pay By Mail system has advantages to the Herald of an integrated marketing, billing and collection system. It has advantages to both the customer and carrier in that irritating and time consuming door to door collections are eliminated.

The testimony indicated diverse opinions from the carriers about the merits of the Pay By Mail system.

There was no competent testimony establishing that the Herald controlled the prices charged by carriers prior to the conversion. In fact the parties stipulated that a number of carriers had set prices above and below that price suggested by the Herald. At best the evidence indicates that a number of carriers were told that the Herald would set the prices charged by its employee-carriers.

There was no competent testimony to indicate the possibility of any injury to the carriers flowing from the conversion other than that compensible by money damages. The equipment and supplies that some carriers indicated they had purchased are subject to specific evaluation. Similarly, the income received by the carriers and possible loss thereof can be measured with a reasonable certainty.

CONCLUSIONS OF LAW

In order to show that they are entitled to preliminary injunctive relief the Plaintiffs must show (1) they have no adequate remedy at law and will suffer irreparable injury if the injunction does not issue (2) that they have at least a reasonable likelihood of success on the merits; (3) that the balance of hardships are tilted in their favor; and (4) the injunction will serve the public interest. American Family Life Assurance Company of Col. v. Aetna Life Insurance Company, 446 F.2d 1178 (5th Circuit 1971). This Court has recognized and applied the criteria as outlined by the 5th Circuit in determining the appropriateness of preliminary injunctive relief. Harrington and Company, Inc. v. International Longshoremen Association, Local 1416, 356 F.Supp. 1079, (Southern District of Florida 1973.) It is the conclusion of this Court that the Plaintiffs have failed to show that they are entitled to the relief requested.

It was agreed at the commencement of the hearing that a basic, threshold issue in the case was whether the Plaintiffs held the positions of independent contractors or whether their status with relation to the Miami Herald was that of employee/employer prior to their termination. If the Plaintiffs were in fact employees the underlying complaint of the Plaintiffs would not state a claim cognizable in Federal Court since a Sherman or Clayton Act violation cannot be founded solely on a contractual relationship between an employer and its employee.³ Eg. Nelson Radio and Supply Company v. Motorola, 200 F.2d 911 (5th Circuit 1952).

The Plaintiffs' claim that the conversion by the Miami Herald from a distribution system utilizing independent contractors to one utilizing employees was merely a charade designed to perpetuate a price fixing scheme forced on them by the Herald. As viewed by the Plaintiffs, the conversion consisted solely of a change in the title of the contracts held by the carriers before and after the conversion from that of "Independent Contractor" to that of "employee". Plaintiffs argued that after the conversion the facts of the relationship between the carriers and the Miami Herald continued as before and that they therefore continued in the status of independent contractors. Thus, they conclude that the "Employee Agreement" with its provision allowing the Miami Herald to set the retail price of the paper is unlawful under § 1 of the Sherman Act and that the action of the Miami Herald in terminating the independent contracts in order to replace them with the employment agreements is unlawful and enjoinable.

This Court is not persuaded by the evidence that has been introduced here today that the relationship between the parties prior to the conversion was that of "independent contractor". Most certainly, the relationship after the conversion was, as termed, that of employer/employee. Indeed, it appears that the words "independent contractor" as they appear in the caption of the Agreement utilized by the Miami Herald in its distribution system may very well be termed a misnomer because of the substantial control that is exercised by the Miami Herald over the carriers, including the Plaintiffs. The Court has serious doubts with respect to whether the relationship prior to the conversion was that of an independent contractor given all the factors of control. Thus, this Court concludes that the Plaintiffs have not demonstrated a reasonable...