Marshall v. JP Stevens Emp. Ed. Committee

• Citation: 495 F. Supp. 553
• Decision Date: 15 July 1980
• Docket Number: 80-39-CIV-8.,No. 80-38-CIV-8,80-38-CIV-8
• Court: U.S. District Court — Eastern District of North Carolina
• Parties: Ray MARSHALL, Secretary of Labor, United States Department of Labor, Petitioner, v. J. P. STEVENS EMPLOYEES EDUCATION COMMITTEE, Eugene Ray Patterson, Wilson Lambert, Robert A. Valois, Robert T. Click, Respondents. Ray MARSHALL, Secretary of Labor, United States Department of Labor, Petitioner, v. John G. HUTCHENS, Respondent.

495 F. Supp. 553

Ray MARSHALL, Secretary of Labor, United States Department of Labor, Petitioner, v. J. P. STEVENS EMPLOYEES EDUCATION COMMITTEE, Eugene Ray Patterson, Wilson Lambert, Robert A. Valois, Robert T. Click, Respondents.

Ray MARSHALL, Secretary of Labor, United States Department of Labor, Petitioner, v. John G. HUTCHENS, Respondent.

Nos. 80-38-CIV-8, 80-39-CIV-8.

United States District Court, E. D. North Carolina, Wilson Division.

July 15, 1980.

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R. Lawrence Dessem, U.S. Dept. of Justice, Washington, D.C., W. Woodward Webb, Asst. U.S. Atty., Raleigh, N.C., for petitioner.

John V. Hunter, III, Hunter, Wharton & Howell, Raleigh, N.C., for respondents.

MEMORANDUM OF DECISION AND ORDER

DUPREE, Chief Judge.

I. INTRODUCTION. The Secretary of Labor (the "Secretary") petitions the court pursuant to Section 601 of the Labor Management Reporting and Disclosure Act ("LMRDA") of 1959 for a summary order enforcing a subpoena duces tecum served upon the J. P. Stevens Employees Education Committee (the "Committee") and five subpoenas ad testificandum served upon individuals associated with the Committee. An order to show cause why the subpoenas should not be enforced was issued on April 17, 1980. The court conducted a hearing two days later on the issues presented by the petition during which time the respondents (the Committee and subpoenaed individuals) moved to quash the subpoenas. The respondents resist the petition on the grounds that, among other things, the disclosure of the information sought by the subpoenas would violate their right of freedom of association under the First Amendment.

II. BACKGROUND. Section 203 of the LMRDA imposes disclosure requirements upon (1) employers who make payments to persons engaging in "persuader" activity 29 U.S.C. § 433(a) and (2) upon the persuaders themselves 29 U.S.C. § 433(b).¹

The Secretary has broad discretion to launch a thorough investigation whenever he "believes it necessary . . . to determine whether any person has violated or is about to violate" the disclosure and reporting provisions of the LMRDA. 29 U.S.C. § 521.²

J. P. Stevens and Company, Inc. (the "Company" or "Stevens") is a large textile manufacturing concern with 80 production facilities throughout the nation. Stevens has been embroiled in a long, bitter labor dispute with the Amalgamated Clothing and Textile Workers Union (ACTWU), which has spawned much litigation against a backdrop of violence and economic reprisals. The Company is not the sole opponent of the ACTWU; the conflict has given rise to anti-union activity by such groups as the Committee, another employees group called "Stevens People", the North Carolina Conservative Union, and others.

The subpoena served upon the Committee indicates that the Secretary believes it necessary to determine "whether J. P. Stevens and Company, Inc., and any of its agents have violated or are about to violate . . the Labor Management Reporting and Disclosure Act." Apparently, the Secretary believes the Company has made undisclosed payments to the Committee and other organizations involved in anti-union persuader activities. The Secretary issued a subpoena ordering the Committee to produce its financial records regarding Stevens as well as other anti-union organizations, including certain persons associated with the groups. The information sought would necessarily include a list of the Committee's members and contributors. In addition, the Secretary issued subpoenas ad testificandum to five persons associated with the Committee. The Committee refused to produce the subpoenaed records and each of the subpoenaed persons refused to testify. During the hearing of April 19, 1980, the respondents presented several collateral contentions in support of their refusal to comply with the subpoenas, as well as their primary constitutional argument.

DISCUSSION

III. LACK OF DUTY TO DISCLOSE. Respondents contend that they have no disclosure duties under the LMRDA and thus cannot be investigated by the Secretary. The court need not address the unlikely argument that the Committee as a persuader has no duty to disclose under 29 U.S.C. § 433(b). Even if the respondents had no duty to disclose, the Secretary still may subpoena and investigate them under his broad powers to ferret out relevant information wherever it may be found. Relevant information need not be sought solely from persons having a duty to disclose under the Act. Goldberg v. Battles, 196 F.Supp. 749, 754 (E.D.Pa.1961), aff'd, 299 F.2d 937 (3rd Cir.), cert. denied, 371 U.S. 817, 83 S.Ct. 32, 9 L.Ed.2d 58 (1962).

IV. ABSENCE OF AGREEMENT OR ARRANGEMENT. The LMRDA compels disclosure of not merely financial contributions, but also the content of any agreement or arrangement between an employer and a persuader. Respondents argue that the Secretary cannot investigate them unless he has first demonstrated a "prima facie case that there is an agreement or arrangement between J. P. Stevens Company and respondents or that J. P. Stevens Company has made a contribution to the Committee." The carte blanche investigative powers conferred upon the Secretary by Congress are so broad, however, that he need not first establish that a contribution or agreement in fact exists before he investigates it. International Brotherhood of Teamsters v. Wirtz, 346 F.2d 827, 831 (D.C. Cir.1965).

V. OPPRESSIVENESS. Respondents argue that the subpoenas cover virtually every document within the possession of the Committee and are thus unduly burdensome and oppressive. Moreover, the Committee argues that the subpoenas were issued in bad faith because the Secretary seeks the information for purposes unrelated to the LMRDA. Respondents have presented no evidence, however, in support of these allegations and they are disregarded.

VI. ATTORNEY-CLIENT PRIVILEGE. Respondents argue that the subpoena ad testificandum issued to Robert A. Valois violates the attorney-client privilege. The argument is without merit, however, because respondents have not factually demonstrated that an attorney-client relationship exists. Furthermore, the privilege cannot be invoked through a blanket refusal to testify; rather, the privilege must be established with respect to each question sought to be avoided. United States v. Schmidt, 343 F.Supp. 444, 446 (M.D.Pa. 1972).

VII. RIGHTS UNDER NATIONAL LABOR RELATIONS ACT. The LMRDA provides that the Secretary's investigative powers cannot be construed to affect a person's rights under the National Labor Relations Act (NLRA), 29 U.S.C. § 523(b). The NLRA confers upon employees the right to refrain from union activities. 29 U.S.C. § 157. The disclosure of information sought be the subpoenas, respondents argue, would "chill Stevens employees in the exercise of their rights to refrain from union activities." The argument is coextensive with respondents' constitutional objections. The merits of the argument will be examined, therefore, in the constitutional discussion below.

VIII. CONSTITUTIONAL QUESTION. Respondents argue that the threatened disclosure of their membership and contributors lists violates their First Amendment freedom of association because it may lead to violence and economic reprisals directed against them. An appropriate adjudication of the claim requires more than a focus upon First Amendment rights. Rather, the court must also carefully balance the freedom of association against the competing governmental interests. Konigsberg v. State Bar of California, 366 U.S. 36, 81 S.Ct. 997, 6 L.Ed.2d 105 (1961). First, however, the court must identify the competing interests.

IDENTIFICATION OF COMPETING INTERESTS

A. First Amendment Freedoms.

(1) Committee Members. The Committee member's "freedom to engage in association for the advancement of beliefs and ideas is an inseparable aspect of the . . . freedom of speech." NAACP v. Alabama, 357 U.S. 449, 460, 78 S.Ct. 1163, 1171, 2 L.Ed.2d 1488 (1958). "Compelled disclosure of affiliation with groups engaged in advocacy may constitute as effective a restraint on freedom of association" as direct interference. Id. at 462, 78 S.Ct. at 1172. Thus, a "vital relationship" exists "between freedom to associate and privacy in one's associations." Id. Should government invade an association's privacy, its members might be induced to withdraw and they may dissuade others from joining it because of fear their beliefs may be exposed through their associations. The First Amendment does not prohibit governmental action causing a "chilling effect,"³ however, if the chill is based merely upon the subjective fear of an association's members. Rather, the First Amendment acts as a safeguard only if the members can make a factual "showing that on past occasions revelation of their identity . . . has exposed them to economic reprisal, loss of employment, threat of physical coercion, and other manifestations of public hostility." NAACP, 357 U.S. at 462, 78 S.Ct. at 1172.

(2) Contributors' Interest. Financial contributors to an association enjoy similar First Amendment protections, even though they are not technically members. The invasion of privacy of belief may be as great when the information sought concerns the giving and spending of money as when it concerns the joining of organizations because financial transactions can reveal much about one's activities, associations, and beliefs. Buckley v. Valeo, 424 U.S. 1, 66, 96 S.Ct. 612, 657, 46 L.Ed.2d 659 (1976).

The respondents contend that these delineated freedoms protect them from enforcement of the subpoenas. The government argues, however, that they have failed to show a sufficient freedom of association interest for a variety of reasons. First, the Secretary argues that the Committee and its officers have no standing to assert First Amendment rights of its members and contributors. The contention is without merit, for if the individual members and contributors...