National Labor Relations Bd. v. Deena Artware, Inc., 11156.

Citation251 F.2d 183
Decision Date17 January 1958
Docket NumberNo. 11156.,11156.
PartiesNATIONAL LABOR RELATIONS BOARD, Petitioner, v. DEENA ARTWARE, Incorporated, Respondent.
CourtUnited States Courts of Appeals. United States Court of Appeals (6th Circuit)

Jerome D. Fenton, Stephen Leonard, Winthrop A. Johns, Julius G. Serot, Walter N. Moldawer, Washington, D. C., for petitioner.

James G. Wheeler, Paducah, Ky., for respondent.

Before MARTIN, MILLER and STEWART, Circuit Judges.

No oral argument. Submitted on motion and response thereto.

MILLER, Circuit Judge.

On July 30, 1952, this Court entered its decree enforcing an order of the National Labor Relations Board directing, inter alia, that 56 employees be made whole for losses sustained as a result of discrimination against them by the respondent arising out of a strike. N. L. R. B. v. Deena Artware, Inc., 6 Cir., 198 F.2d 645, certiorari denied 345 U.S. 906, 73 S.Ct. 644, 97 L.Ed. 1342.

On December 16, 1955, this Court entered a supplemental decree enforcing the Board's back pay determination and directing the respondent to pay to named employees specific amounts of back pay, which totaled approximately $300,000.00. N.L.R.B. v. Deena Artware, Inc., 6 Cir., 228 F.2d 871.

The respondent has not made the payments so ordered. It contends that it was forced by economic conditions and this labor dispute, see United Brick & Clay Workers of America v. Deena Artware, Inc., 6 Cir., 198 F.2d 637, certiorari denied, 344 U.S. 897, 73 S.Ct. 277, 97 L.Ed. 694; Deena Products Co. v. United Brick & Clay Workers of America, 6 Cir., 195 F.2d 612, to discontinue the operation of its plant during the year 1953, that it is financially unable to make the payments, and that there are no assets available for that purpose. It contends that whatever assets were available for creditors have through bona fide business transactions been used in the payment of, or to secure the payment of, its legal obligations.

The Board contends that the respondent, Artware, and several affiliated corporations were and are integral parts of a single enterprise substantially owned and controlled by George H. Weiner, president and treasurer of Artware; that the operations of Artware were conducted in a manner which prevented it from having assets, and thereby prevented compliance with the back pay provisions of the decrees; that Artware's assets were siphoned off or transferred to affiliated companies, in consequence of which it appeared that Artware was left with no assets with which to comply with the decree; that the affiliated corporations are alter egos and/or successors to Artware within the meaning of the decrees; and that the aforesaid George H. Weiner and the affiliated corporations referred to above are subject to the back pay provisions of the decrees and responsible for the failure to comply therewith, and liable for payment of said back pay.

The Board has filed a motion that the respondent and the several affiliated corporations be directed to produce and permit the Board to inspect, copy and photograph numerous books, records, bank statements and types of papers and documents which would show the financial condition of the respondent and the respective obligations and credits rendered between respondent and the affiliated corporations. It also asked that certain present or former officers of respondent and the affiliated corporations be directed to give depositions taken upon oral examination by the petitioner with respect to the financial ability of the respondent to comply with the provisions of the supplemental decree and the dealings and relationship of respondent with said affiliated corporations.

The respondent has filed a response objecting to the motion, which reviews the litigation arising out of the strike, its unsuccessful attempt to meet the problems caused by the strike resulting in discontinuance of operations at its plant during the year 1953, the financial transactions entered into in connection therewith, and its resulting financial inability to make the payments to its employees as directed by the supplemental decree.

The present motion is not in support of any contempt proceeding, as was the case in N.L.R.B. v. Parsons Punch Corp., 6 Cir., 249 F.2d 956. Bethlehem Shipbuilding Corp. v. N.L. R.B., 1 Cir., 120 F.2d 126, and N.L.R.B. v. Remington Rand, Inc., 2 Cir., 130 F.2d 919, which are relied upon by petitioner, also involved contempt proceedings. Nor were the issues in those cases an alleged financial inability to pay. No contempt of court has been charged in the present case. We recognize that in some instances certain proceedings by the Board, not recognized at common law, are approved by the Courts for the purpose of effectuating the public purposes of the Act. National Licorice Co. v. N.L.R.B., 309 U.S. 350, 362, 60 S.Ct. 569, 84 L.Ed. 799; Consumers Power Co. v. N.L.R.B., 6 Cir., 113 F.2d 38, 44. Contempt proceedings may come under that head, although we are not called upon to decide that question in the present proceeding. If this proceeding was to give effect to the declared public policy of the Act, we would have a different question to consider from what is now before us. But, in the absence of contempt proceedings, the present proceeding is purely a proceeding for the enforcement of private individual rights, namely, an attempt to collect from an insolvent corporation money judgments running in favor of private individuals. As the Supreme Court said in Nathanson v. N.L.R.B., 344 U.S. 25, 28, 73 S.Ct. 80, 83, 97 L.Ed. 23, "The policy of the National Labor Relations Act is fully served by recognizing the claim for back pay as one to be paid from the estate."

As pointed out in the Nathanson case, 344 U.S. 25, 27-28, 73 S.Ct. 80, the beneficiaries of the back pay awards are private persons for whom the Board is acting as agent. The claims have no status or priority different from that enjoyed by other unpaid wage claims. As stated by the Supreme Court in National Licorice Co. v. N.L.R.B., supra, 309 U.S. 350, 362, 60 S.Ct. 569, 576, "The proceeding authorized to be taken by the Board under the National Labor Relations Act is not for the adjudication of private rights." In Amalgamated Utility Workers (C.I.O.) v. Consolidated Edison Co., 309 U.S. 261, 267, 60 S.Ct. 561, 564, 84 L.Ed. 738, the House Committee Report is quoted as saying, "No private right of action is contemplated." In Agwilines, Inc. v. N.L.R.B., 5 Cir., 87 F.2d 146, 150, the Court said, "The proceeding is not, it cannot be made, a private one to enforce a private right. It is a public procedure, looking only to public ends." This Court has recognized and referred to the fact that the Board does not exist for the adjudication of private rights. N.L.R.B. v. Hudson Motor Car Co., 6 Cir., 136 F.2d 385, 387; Consumers Power Co. v. N.L.R.B., supra, 6 Cir., 113 F.2d 38, 44.

We are urged, however, to treat this motion for practical purposes as being in support of a proceeding for contempt, in that it will enable the Board to determine from a consideration of the evidence made available by the motion whether probable cause exists for instituting contempt proceedings. But orderly procedure does not consist in the taking of depositions and the compulsory production of books and records for examination by a claimant before the claimant files his complaint or pleading setting out the facts constituting his alleged cause of action. Whether the facts as claimed by the Board would as a matter of law constitute contempt of court is a legal question which the respondent is entitled to have decided before he is put to the expenditure of considerable time and money in producing the evidence out of which the claimant hopes to sustain his allegations. Probable legal issues are apparent. Is the fraudulent concealment of assets in order to avoid payment of the award contempt of court? Apparently, fraudulent concealment in the true sense of the words is not claimed in the present case. Is the inability to pay merely by reason of the payment of other creditors contempt of court? If so, is it limited to payments made subsequent to the rendition of the award or does it include payments to other creditors made prior to the rendition of the award? If limited to the first classification, should not the scope of the motion for discovery and inspection of documents be likewise limited as to the perid of time involved? The present motion asks for numerous records from April 5, 1948 to date. We do not attempt at this time to answer such questions as they have not been presented to us in the present proceeding, but such questions and other analogous ones point up the advisability of requiring the Board to definitely state its claim by an appropriate motion or pleading, the validity of which can then be questioned as a matter of law by the respondent, before the Board is authorized to start on the extensive and expensive discovery proceedings it is now seeking to undertake.

The present motion raises an issue not materially different from that previously raised by the Board in this same case and decided by this Court in N.L.R.B. v. Deena Artware, Inc., 6 Cir., 207 F.2d 798. There the claims of the discharged employees were still unliquidated. In the present proceeding they have become liquidated. As pointed out in that case the jurisdiction of this Court under Sect. 160(e), Title 29 U.S.C.A., is to enter "a decree enforcing, modifying, and enforcing as so modified, or in setting aside in whole or in part, the order of the Board" together with the granting of such temporary relief or restraining order as it deems just and proper. That jurisdiction has been exercised by our decree of enforcement of July 30, 1952, and our supplemental decree of December 16, 1955, which changed the unliquidated claims of the discharged employees into liquidated ones. In...

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8 cases
  • National Labor Relations Board v. Deena Artware, 11156.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (6th Circuit)
    • December 13, 1958
    ...validity of 261 F.2d 506 which, as a matter of law, should be first passed upon by this Court. N. L. R. B. v. Deena Artware, Inc., 6 Cir., 251 F.2d 183. On August 20, 1958, the Board filed the present petition for adjudication in civil contempt. It has also refiled its motion, in substantia......
  • National Labor Relations Board v. Deena Artware, Inc, 46
    • United States
    • United States Supreme Court
    • February 23, 1960
    ...other corporations under his control for the purpose of evading the back pay obligation. The Court of Appeals denied the motion, 6 Cir., 251 F.2d 183, holding that a contempt proceeding, rather than discovery, was the proper procedure. On August 20, 1958, the Board petitioned the Court of A......
  • N.L.R.B. v. Steinerfilm, Inc., 81-1437
    • United States
    • United States Courts of Appeals. United States Court of Appeals (1st Circuit)
    • March 8, 1983
    ...opinion does not say so, the Sixth Circuit has indicated that in this case a contempt proceeding had begun, NLRB v. Deena Artware, Inc., 251 F.2d 183, 184-85 (6th Cir.1958)). In NLRB v. Dixon, 189 F.2d 38 (8th Cir.1951), the court granted a discovery order prior to a filing of contempt, for......
  • Gulliver v. Dalsheim, 1661
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • July 18, 1984 is not customary to retain jurisdiction merely in order to assure that a judgment or decree will be enforced. NLRB v. Deena Artware, 251 F.2d 183, 186 (6th Cir.1958). But jurisdiction is sometimes retained, as it was here, for the "purpose of facilitating immediate review of further tria......
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