Lawson v. United States, 6755.

• Decision Date: 26 January 1962
• Docket Number: No. 6755.,6755.
• Citation: 300 F.2d 252
• Parties: Owen L. LAWSON, Appellant, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

300 F.2d 252 (1962)

Owen L. LAWSON, Appellant, v. UNITED STATES of America, Appellee.

No. 6755.

United States Court of Appeals Tenth Circuit.

January 26, 1962.

H. G. Bill Dickey, Tulsa, Okl. (Joe Richard, Tulsa, Okl., with him on the brief), for appellant.

L. K. Smith, Asst. U. S. Atty., Tulsa, Okl. (John M. Imel, U. S. Atty., Tulsa, Okl., with him on the brief), for appellee.

Before PICKETT, LEWIS, and HILL, Circuit Judges.

PICKETT, Circuit Judge.

Owen L. Lawson was charged in a nine count indictment with violations of the Labor-Management Reporting and Disclosure Act of 1959,¹ §§ 209(c) and 501 (c), 73 Stat. 529, 536, 29 U.S.C.A. §§ 439(c) and 501(c). In a trial to the court without a jury, Lawson was found guilty as charged in counts 1, 2, 3, 8 and 9 of the indictment. Counts 1, 2, 3 and 8 alleged that on different dates Lawson embezzled funds of Pipe Fitters Local Union No. 205, Tulsa, Oklahoma, a labor organization engaged in an industry affecting commerce among the several states. Count 9 alleged that Lawson wilfully concealed, withheld and destroyed certain books and financial records of the same union. The sufficiency of the evidence to show the embezzlement of the funds and the misappropriation of the record is not questioned here. It is contended that the federal district court lacked jurisdiction to try the defendant for the reasons that (1) the statute in question is unconstitutional; (2) that the evidence did not establish that the activities of Local Union 205 affected commerce within the meaning of the statute; and (3) that the district court lost jurisdiction to try the defendant when he appeared in response to a subpoena and gave testimony before a grand jury concerning the matters which were charged in the indictment.

Section 501 (c) of the Act provides:

"Any person who embezzles, steals, or unlawfully and willfully abstracts or converts to his own use, or the use of another, any of the moneys, funds, securities, property, or other assets of a labor organization of which he is an officer, or by which he is employed, directly or indirectly, shall be fined not more than $10,000 or imprisoned for not more than five years, or both." 73 Stat. 536, 29 U.S.C.A. § 501(c).

Section 209(c) of the Act provides:

"Any person who willfully makes a false entry in or willfully conceals, withholds, or destroys any books, records, reports, or statements required to be kept by any provision of this subchapter shall be fined not more than $10,000 or imprisoned for not more than one year, or both." 73 Stat. 529, 29 U.S. C.A. § 439(c).

A "labor organization" is defined in § 3 (i) of the Act, 73 Stat. 520, 29 U.S.C.A. § 402(i), as one "engaged in an industry affecting commerce and includes any organization of any kind * * * dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours, or other terms or conditions of employment, * * *." "Industry affecting commerce" is said to mean "any activity, business, or industry in commerce or in which a labor dispute would hinder or obstruct commerce or the free flow of commerce and includes any activity or industry `affecting commerce' within the meaning of the Labor Management Relations Act, 1947, as amended, * * *." § 3(c), 73 Stat. 520, 29 U.S.C.A. § 402(c).

In announcing its findings and declaring the purpose and policy of the Labor-Management Reporting and Disclosure Act, Congress stated that "relations between employers and labor organizations and the millions of workers they represent have a substantial impact on the commerce of the Nation;" and that to assure the "free flow of commerce it is essential that labor organizations, employers, and their officials adhere to the highest standards of responsibility and ethical conduct in administering" their affairs. The need for the legislation is contained in congressional findings to the effect that investigations had revealed "instances of breach of trust, corruption, disregard of the rights of individual employees, and other failures to observe high standards of responsibility and ethical conduct" which required supplemental legislation to protect the "rights and interests of employees and the public generally as they relate to the activities of labor organizations, employers, labor relations consultants, and their officers and representatives." Congress also found and declared that the Act was necessary to eliminate and prevent improper practices in the labor management field "which distort and defeat the policies of the Labor Management Relations Act, 1947, as amended, * * * and have the tendency or necessary effect of burdening or obstructing commerce by (1) impairing the efficiency, safety, or operation of the instrumentalities of commerce; (2) occurring in the current of commerce; (3) materially affecting, restraining, or controlling the flow of raw materials or manufactured or processed goods into or from the channels of commerce, or the prices of such materials or goods in commerce; or (4) causing diminution of employment and wages in such volume as substantially to impair or disrupt the market for goods flowing into or from the channels of commerce." § 2, 73 Stat. 519, 29 U.S.C.A. § 401.

The constitutionality of legislation designed to protect interstate commerce and dealing with labor relations in order to remove burdens from and obstructions to the free flow of commerce is now settled. N. L. R. B. v. Fainblatt, 306 U.S. 601, 307 U.S. 609, 59 S.Ct. 668, 83 L.Ed. 1014; N. L. R. B. v. Jones & Laughlin Steel Corp., 301 U.S. 1, 57 S.Ct. 615, 81 L.Ed. 893. In upholding the validity of § 9(h) of the National Labor Relations Act, as amended by the Labor Management Relations Act, 1947, 61 Stat. 146, 29 U.S.C.A. § 159(h), commonly referred to as the "non-Communist affidavit provision," the Supreme Court said, in American Communications Ass'n v. Douds, 339 U.S. 382, 387, 70 S.Ct. 674, 678, 94 L.Ed. 925:

"The constitutional justification for the National Labor Relations Act was the power of Congress to protect interstate commerce by removing obstructions to the free flow of commerce. National Labor Relations Board v. Jones & Laughlin Steel Corp., 301 U.S. 1, 57 S.Ct. 615, 81 L.Ed. 893, 108 A.L.R. 1352 (1937). That Act was designed to remove obstructions caused by strikes and other forms of industrial unrest, which Congress found were attributable to the inequality of bargaining power between unorganized employees and their employers. It did so by strengthening employee groups, by restraining certain employer practices, and by encouraging the processes of collective bargaining."

Recognizing the constitutional power vested in Congress to regulate labor management matters affecting commerce in the manner described in § 2(c) of the Act, 73 Stat. 519, 29 U.S.C.A. § 401(c), we conclude that the criminal remedies provided in §§ 209(c) and 501(c), 73 Stat. 529, 536, 29 U.S.C.A. §§ 439(c) and 501(c), bear a reasonable relation to the nefarious conditions which Congress found to exist and sought to reach. American Communications Ass'n v. Douds, supra; United States v. Haverlick, N.D.N.Y., 195 F.Supp. 331. Congress was free to find that corruption of union officials and a lack of the highest standards of ethical conduct by those representing unions, factors which would necessarily weaken the position of the unions and have a deterring influence on the bargaining position of labor and management, would substantially affect the free flow of commerce. The statute purports to reach only the activities of union officials which are deemed to burden or obstruct commerce. "Acts having that effect are not rendered immune because they grow out of labor disputes." N. L. R. B. v. Jones & Laughlin Steel Corp., supra, 301 U.S. at page 29, 57 S.Ct....