Loew's, Inc. v. Cole, 12222.

• Citation: 185 F.2d 641
• Decision Date: 22 November 1950
• Docket Number: No. 12222.,12222.
• Parties: LOEW'S, Inc. v. COLE.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

185 F.2d 641 (1950)

LOEW'S, Inc. v. COLE.

No. 12222.

United States Court of Appeals Ninth Circuit.

November 22, 1950.

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Irving M. Walker and Herman F. Selvin, Los Angeles, Cal., for appellant.

Kenny & Cohn, Los Angeles, Cal., Bartley C. Crum, New York City, Margolis & McTernan and Charles J. Katz, all of Los Angeles, Cal., for appellee.

Before BONE and POPE, Circuit Judges, and McLAUGHLIN, District Judge.

POPE, Circuit Judge.

In the month of October, 1947, the Committee on Un-American Activities of the House of Representatives conducted a public hearing, at Washington, for the purpose of inquiring into alleged Communist infiltration into the motion picture industry.¹ Among dozens of witnesses called, beginning October 20, and concluding October 30, were the appellee, Lester Cole, and a number of the executives of the appellant, Loew's, Incorporated, a Delaware Corporation, engaged, under the trade name of Metro-Goldwyn-Mayer, in the production and distribution of motion pictures. Cole had been employed by Loew's as a writer of screen plays since 1945. He was currently employed under a written contract to which we shall presently refer.

At the hearing Cole, and some nine other screen writers, who came to be known in the current newspaper accounts of the hearing (which had extremely wide notice in the press and on the radio) as the ten "unfriendly" witnesses, were accompanied by counsel who challenged the validity of the investigation and the power of the Committee to conduct the inquiry or to issue the subpoenas served, by a so-called motion to "quash the subpoenas". When Cole was called to the stand he was asked "Are you now or have you ever been a member of the Communist Party?" The statement he then made was interpreted by the committee as a refusal to answer, and he was cited on November 24, 1947, by the House of Representatives for contempt, and was thereafter indicted for contempt of Congress.

Cole's employment contract contained a paragraph 5 which read: "The employee agrees to conduct himself with due regard to public conventions and morals, and agrees that he will not do or commit any act or thing that will tend to degrade him in society or bring him into public hatred, contempt, scorn or ridicule, or that will tend to shock, insult or offend the community or ridicule public morals or decency, or prejudice the producer or the motion picture, theatrical or radio industry in general."

Cole was the last of the eleven "unfriendly" witnesses called. He testified on October 30. On December 2, following, he was sent a notice of suspension reading as follows: "Dear Mr. Cole: At a recent hearing of a committee of the House of Representatives, you refused to answer certain questions put to you by such committee. By your failure to answer these questions, and by your statements and conduct before the committee and otherwise in connection with the hearings, you have shocked and offended the community, brought yourself into public scorn and contempt, substantially lessened your value to us as an employee, and prejudiced us as your employer and the motion picture industry in general. By so doing you have violated your obligations under your contract of employment with us and your legal obligations to us as our employee. Accordingly, and for good and sufficient cause, this is to notify you that we have elected to suspend your employment and payment of your compensation under your contract of employment with us dated December 5, 1945, as amended, commencing as of December 3, 1947, and continuing until such time as you are acquitted or have purged yourself of contempt of the Congress of the United States and you declare under oath that you are not a Communist. This action is taken by us without prejudice to, and we hereby reserve, any other rights or remedies which we may have. Very truly yours, Loew's Incorporated, by Louis K. Sidney, Asst. Treasurer."

Cole then filed this action, alleging the existence of a controversy arising out of this notice, and as to the right of Loew's to suspend Cole from his employment, and praying declaratory and other relief. The answer admitted the existence of a controversy, the written agreement between the parties, and the notice, denying other allegations of the complaint, and demanded a jury trial.

A form of special verdict, containing four questions, was submitted to the jury. Although no general verdict was called for, the court gave extensive instructions. The verdict was as follows:

"Question 1: Did the plaintiff Lester Cole by his statements and conduct before the House Committee on Un-American Activities, in connection with the hearing held by said Committee, bring himself or tend to bring himself into public hatred, contempt, scorn, or ridicule? (Answer `yes' or `no'.) Answer: No.

"Question 2: Did the plaintiff Lester Cole, by his statements and conduct before the House Committee on Un-American Activities, in connection with the hearing held by said Committee, tend to shock, insult or offend the community? (Answer `yes' or `no'.) Answer: No.

"Question 3: Did the plaintiff Lester Cole, by his statements and conduct before the House Committee on Un-American Activities in connection with the hearing held by said Committee, prejudice the defendant Loew's Incorporated as his employer or the motion picture industry generally? (Answer `yes' or `no'.) Answer: No.

"Question 4: Did the defendant Loew's Incorporated by its conduct towards the plaintiff, subsequent to the hearing, waive the right to take action against him by suspending him? (Answer `yes' or `no'.) Answer: Yes."

The court adopted the findings of the jury and made additional ones of its own; that what Cole did before the Committee was within his rights; that he did not breach his contract; that prior to the time Cole testified, Loew's led Cole to believe that if he conducted himself before the Committee as he did, he would not thereby become liable to suspension; and that after Cole had appeared before the Committee, Loew's with full knowledge of the facts, by choosing to retain him in their employ, elected to keep the contract in full force. Judgment was entered adjudging that Loew's had no right to suspend Cole's employment or compensation, ordering his reinstatement, and awarding Cole $75,600 in back pay, and retaining jurisdiction to see to it that subsequently maturing payments of wages should be made when due.

Appellant specifies numerous asserted errors in instructions given and refused, and in the admission and rejection of evidence. Before we have occasion to deal with the points thus made, we must consider two other contentions.

First, it must be noted, appellant asserts that the trial judge should have transferred the case because of bias and prejudice charged to him by an affidavit filed pursuant to Title 28, U.S.C.A. § 144. The substance of the affidavit was that at a time prior to the removal of the action to the court below (and possibly prior to its filing in the state court), the trial judge, during a social evening at a friend's home, during a discussion about the Committee hearings, the indictments and the suspensions and discharges, "said in substance and effect that in his opinion there was no legal justification for the suspension or discharge of any of the persons whose conduct before the Committee resulted in their indictment; that he hoped that none of the cases arising out of such suspensions or discharges came before him but if they did, he would have no alternative but to render judgment for the plaintiff in such actions; and that if he were the attorney for such plaintiffs, he could recover judgment in their favor for millions of dollars."

Appellant, while conceding that prejudgment of a question of legal right does not always work a disqualification of a judge, yet contends that if such prejudgment is derived from extra-judicial information, acquired from sources other than those presented to the court in the course of judicial proceedings before him, then the bias and prejudice contemplated by the Act exists. Such it is said, was the situation here.

The court held that the affidavit showed no more than the expression of a prior opinion upon a legal question, and that in failing to state any fact indicating that the judge had a personal bias or prejudice in favor of one party, or against the other, it was insufficient. With this holding we agree.

On behalf of Cole it is insisted that judgment should have gone for him as a matter of law. If this position is correct, then we must necessarily affirm, no matter what errors may be found in the court's instructions. So we must first deal with this contention before considering any of the errors assigned by the appellant.

At the time the court's judgment was entered the trial judge prepared and filed an extended opinion. D.C., 8 F.R.D. 508. This opinion creates the impression that the judge held a like view, namely that the undisputed facts compelled a judgment for Cole.

It is argued that what Cole did at the hearing was not a violation of his contract. Thus the court found that "The acts and conduct of the plaintiff before said House Committee were within the plaintiff's rights and did not constitute any breach on the part of the plaintiff of his contract of employment with the defendant."² Further, appellee says that a fair reading of paragraph 5 of the employment contract, quoted above, (and which he calls the "morals clause")³ will disclose that it was not intended to prohibit the sort of thing done by Cole when he was called to testify; that his conduct there was "political", and citing the sections of the California Labor Code,⁴ which forbids the employer to use his power as such to coerce or influence the political action or activity of his employees, Cole says that if paragraph 5 is not to be held void under those sections, it must be construed as he contends.

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