Leber v. CANAL ZONE CENTRAL LABOR UNION & METAL TR. COUN.

• Decision Date: 25 July 1967
• Docket Number: No. 23316.,23316.
• Citation: 383 F.2d 110
• Parties: Brigadier General Walter P. LEBER, Governor of the Canal Zone and President, Panama Canal Company, Appellant, v. CANAL ZONE CENTRAL LABOR UNION & METAL TRADES COUNCIL, AFL-CIO, et al., Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

383 F.2d 110 (1967) Brigadier General Walter P. LEBER, Governor of the Canal Zone and President, Panama Canal Company, Appellant, v. CANAL ZONE CENTRAL LABOR UNION & METAL TRADES COUNCIL, AFL-CIO, et al., Appellees.

No. 23316.

United States Court of Appeals Fifth Circuit.

July 25, 1967.

John W. Douglas, Asst. Atty. Gen., Rowland K. Hazard, U. S. Atty., Alan S. Rosenthal and Richard S. Salzman, Attys., Dept. of Justice, Washington, D. C., John Ligtenberg, Gen. Counsel, American Federation of Teachers, AFL-CIO, Chicago, Ill., Andrew J. Leahy, Mary Lee Leahy, Chicago, Ill., of counsel, for appellant.

Thomas Morton Gittings, Jr., Washington, D. C., Albert J. Joyce, Jr., Balboa, Canal Zone, Arthur L. Ballin, New Orleans, La., for appellees.

Before RIVES and WISDOM, Circuit Judges, and CONNALLY, District Judge.

RIVES, Circuit Judge.

This appeal is from a decision by the District Court for the Canal Zone declaring that certain regulations issued by the Secretary of the Army are invalid, as contrary to provisions of the Canal Zone Code,¹ and enjoining the appellant from enforcing these regulations.² The involved sections of the Code authorize payment of an overseas differential in addition to basic compensation to each United States citizen employed in the Canal Zone by the executive branch of the United States Government. 2 C.Z.C. § 146. The differential is not to be in excess of an amount equal to 25 percent of the aggregate amount of the rate of basic compensation, plus special allowances not here material. In substance, the voided regulations reduce the differential from 25 percent to 15 percent. 5 C.F.R. § 1204.12 (1964 Rev., 1966 Pocket Supp.), now found in 35 C.F.R. ch. I, subch. E, revised as of January 1, 1967. They further provide that the differential will not be paid (1) to a married woman whose husband resides in the Canal Zone or the Republic of Panama unless the husband is 51 percent dependent upon her for his support or the woman is legally separated from her husband, or (2) to a child of a resident of the Canal Zone or the Republic of Panama who is under 21 years of age and is unmarried or who, regardless of age or marital status, does not maintain a separate household.

Appellees are five United States citizens employed by the Canal Zone Government or the Panama Canal Company. Two of the appellees are married women whose husbands are also employed by the Canal Zone Government or the Panama Canal Company. The Secretary of the Army who promulgated the regulations was not served with process and did not appear in the action.

We are of the opinion that the judgment of the district court should be reversed for three reasons: First the action should have been dismissed because the Secretary of the Army is an indispensable party;³ second, the action was an unconsented suit against the United States; third, sound judicial administration requires that we also discuss the merits to meet the possibility that the Supreme Court, on review, may conclude that jurisdiction exists. We find that the regulations do not conflict with the pertinent and controlling sections of the Canal Zone Code, and are not invalid.

We first discuss the jurisdictional questions. Title 2, Section 155 of the Code provides:

"(a) The President shall coordinate the policies and activities of the respective departments under this subchapter, and may promulgate regulations necessary and appropriate to carry out the provisions and accomplish the purposes of this subchapter.

"(b) The President may delegate any authority vested in him by this subchapter, and may provide for the redelegation of any such authority."

Pursuant to this section, the President delegated his authority over wage and employment practices in the Canal Zone to the Secretary of the Army. Ex. Ord. No. 10794, December 12, 1958, 23 F.R. 9627, and Ex. Ord. No. 11171, August 20, 1964, 29 F.R. 11897.

Title 2, Section 142 authorizes the head of each department to conduct wage and employment practices in accordance with regulations promulgated by or under the authority of the President.⁴ A "department" is defined to mean "a department, agency, or independent establishment in the executive branch of the Government of the United States (including a corporation wholly owned or controlled by the United States) which conducts operations in the Canal Zone."

The Canal Zone Government and the Panama Canal Company are departments within the meaning of the statutory definition.⁵ It is clear, therefore, that wage and employment practices of these two entities are subject to regulation by the Secretary of the Army. He is the official charged with the responsibility of coordinating the policies and activities of the respective departments and promulgating regulations necessary and appropriate to carry out the intent of the statutes.

With these prefatory remarks, we apply the legal principles involved in determining whether the Secretary of the Army is an indispensable party. This Court has on more than one occasion recognized the difficulty in determining the indispensability of a superior governmental official as a defendant in a suit against his subordinate. Estrada v. Ahrens, 5 Cir. 1961, 296 F.2d 690; Johnson v. Kirkland, 5 Cir. 1961, 290 F.2d 440. The commentators share our uncertainty despite repeated efforts by the Supreme Court to clarify the principles involved.⁶

As we read the controlling decisions of the Supreme Court, we find that "the superior officer is an indispensable party if the decree granting the relief sought will require him to take action, whether by exercising directly a power lodged in him or by having a subordinate exercise it for him." Williams v. Fanning, 1947, 332 U.S. 490, 493, 68 S.Ct. 188, 189, 92 L.Ed. 95. In Ceballos v. Shaughnessy, 1957, 352 U.S. 599, 603, 77 S.Ct. 545, 549, 1 L.Ed.2d 583, the Supreme Court noted that the resolution of the issue also depends on "the ability and authority of the defendant before the court to effectuate the relief" which is sought. See State of Colorado v. Toll, 1925, 268 U.S. 228, 45 S.Ct. 505, 69 L.Ed. 927; Johnson v. Kirkland, 5 Cir. 1961, 290 F.2d 440, 446. If the court having jurisdiction over the subordinate can grant effective relief without requiring any act by the superior, then the superior is not indispensable.

The Supreme Court stressed the need for practical considerations. Shaughnessy v. Pedreiro, 1955, 349 U.S. 48, 75 S.Ct. 591, 99 L.Ed. 868. It is paramount that "simplified, workable procedures favoring judicial review should prevail over formalistic, technical concepts of the source of administrative authority." Estrada v. Ahrens, 5 Cir. 1961, 296 F.2d at 697.

Mindful of the ruling principles enunciated by the Supreme Court, we turn to the facts of this case. We conclude that any rights the appellees may have cannot be vindicated without specific action being taken by the Secretary of the Army. The Secretary must authorize the payment of any former differential.⁷ He must order the payment to employees of any monetary losses resulting from invalid regulations. For duties of Secretary, see H. R. Rep. No. 1869 to accompany S. 1850, 85th Cong., 2d Sess. 7-8 (1958).⁸ As in Johnson v. Kirkland, 5 Cir. 1961, 290 F.2d 440, this is a case where relief cannot be effectuated without specific action by the superior. The enjoining of the appellant without any action by the Secretary will not assure the payment of the 25 percent differential or reimbursement for any losses.⁹

The appellees contend that this suit is solely to enjoin the Governor of the Canal Zone, who is also the President of the Panama Canal Company, from further implementation, enforcement and application of the Secretary's regulations. They claim that there is no prayer or request for any affirmative action on the part of the Secretary. In short, they say that they are asking for a declaration that the regulations are invalid and that the appellant be enjoined from enforcing them.

Appellees admit that their primary goal is restoration of the 25 percent differential to all United States citizens. They suggest that the invalidation of the regulations will require the appellant to reinstate the 25 percent differential. Their entire argument rests on the proposition that it is mandatory that the tropical differential shall be no less than 25 percent. Avoiding form and paying heed to substance, we are quite sure that the appellees do not seek to enjoin the appellant from implementing any differential. If the appellant is enjoined from enforcing the newly promulgated regulations, then he is left with one of two courses: (1) He may reinstate the 25 percent differential, or (2) he may pay no differential. The appellees seek the first course; the second would deny them even half a loaf. Thus we reach the heart of this issue — can the appellant without any action on the part of the Secretary reinstate the 25 percent differential? We think not, and therefore conclude that the Secretary is an indispensable party.¹⁰

This action is also an unconsented suit against the United States.¹¹ The complaint alleges that the appellant is acting in a manner not permitted by the statute. Normally such an allegation is a permissible basis for a suit against an individual, and the government is held not to have sufficient interest in the controversy to be considered an indispensable party. The government, however, does not always lack such interest in cases where the suit is nominally against the officer as an individual. Mine Safety Appliances Co. v. Forrestal, 1945, 326 U. S. 371, 374, 66 S.Ct. 219, 90 L.Ed. 140.¹²

In Mine Safety Appliances, the Supreme Court noting "the essential nature and effect of the proceeding" concluded that, where the suit was to collect money from the government and not the individual defendant, "the government is an indispensable party." 326 U.S. at 375, 66 S.Ct. at 221. The suit in that case was dismissed because the government was...