National Labor Relations Bd. v. Cowell Portland C. Co.

Decision Date30 December 1939
Docket NumberNo. 9092.,9092.
Citation108 F.2d 198
PartiesNATIONAL LABOR RELATIONS BOARD v. COWELL PORTLAND CEMENT CO. (LIME AND CEMENT EMPLOYEES UNION OF CONTRA COSTA COUNTY, LOCAL NO. 21074, A. F. OF L., et al., Interveners).
CourtU.S. Court of Appeals — Ninth Circuit

COPYRIGHT MATERIAL OMITTED

Charles Fahy, Gen. Counsel, Robert B. Watts, Associate Gen. Counsel, Laurence A. Knapp, Asst. Gen. Counsel, and Mortimer B. Wolf, Bertram Edises, and Owsley Vose, Attys., National Labor Relations Board, all of Washington, D. C., for petitioner.

Max Thelen, Gordon Johnson, and Thelen & Marrin, all of San Francisco, Cal., for respondent.

Charles J. Janigian, of San Francisco, Cal., for intervener Lime & Cement Employees Union of Contra Costa Co., Local No. 21074, A. F. of L.

Gladstein, Grossman & Margolis, of San Francisco, Cal., for intervener International Union Mine, Mill & Smelters Workers of America, Local 356.

Before DENMAN, MATHEWS, and STEPHENS, Circuit Judges.

DENMAN, Circuit Judge.

The National Labor Relations Board petitions for our decree enforcing its order against the respondent, Cowell Portland Cement Company, requiring the latter to cease and desist from certain claimed unfair labor practices and to take certain affirmative action. The respondent asserted below and asserts here that the Board lacks jurisdiction over all the matter ordered because the nature of its business is such that it cannot be said to be "in commerce, or burdening or obstructing commerce or the free flow of commerce" within the definition of "affecting commerce" set forth in Section 2(7) of the Act.1

(1) Respondent was engaged in interstate commerce and was subject to the jurisdiction of the Board.

The respondent is one of three corporations having interlocking stock control and common management. The stock of the Henry Cowell Lime and Cement Company is owned by three stockholders, S. H. Cowell, I. M. Cowell and W. H. George. That company owns approximately 95 per cent of the Bay Point and Clayton Railroad Company and of respondent.

The Henry Cowell Lime and Cement Company was organized in 1900 and is one of the oldest dealers in building materials in California, having many branch yards and sales offices, one in Portland, Oregon. It deals and has dealt in all classes of building materials and also other merchandise. The respondent cement manufacturing company was organized in 1907 to manufacture Portland Cement from lime rock, clay and sand in its quarries at Cowell, California, situated in the coast range between 8 and 9 miles southerly of Port Chicago on Suisun Bay. The Bay Point and Clayton Railroad connects the Cowell plant with two railways at Port Chicago, the Southern Pacific and Santa Fe.

The Henry Cowell Company is the sole "agent of the Cowell Portland Cement Company so far as selling is concerned". The cement is not consigned to the Henry Cowell Company but the bill of lading is made by respondent to the ultimate consumer procured by the agency of the Henry Cowell Company and for which a commission is paid the agent. The cement is hauled by two locomotive engines from Cowell to the railways at Port Chicago. One of the engines is owned by respondent and one by the Bay Point and Clayton Railroad. In view of the agency connection of the Henry Cowell Lime and Cement Company with the sales of the cement, there is no merit in the contention that because it is a separate corporation from respondent there is a break in any shipment out of the state rendering respondent's activities solely intrastate in character.

The interstate commerce of the respondent consisted of both imports into and exports from the State of California. Essential to its manufacture of cement is gypsum of which it imports from Nevada annually approximately 2,000 tons. Also it imports for resale white or Medusa cement of which in the seven months prior to the hearing it imported upwards of 1,100 barrels. Of the cement it manufactures, the Board found that between 30,000 and 50,000 barrels per annum were shipped outside the state in the triennium prior to the hearing. The respondent disputes these figures but admits that at least 14,000 barrels per annum were exported. Even taking the respondent's latter statement of exports, these constitute substantial amounts and are not to be treated as de minimis.

Congress has the power to regulate interstate commerce "be it great or small." National Labor Relations Board v. Fainblatt, 306 U.S. 601, 606, 59 S.Ct. 668, 671, 83 L.Ed. 1014. The National Labor Relations Act "on its face * * * evidences the intention of Congress to exercise whatever power is constitutionally given to it to regulate commerce by the adoption of measures for the prevention or control of certain specified acts. * * * Examining the Act in the light of its purpose and of the circumstances in which it must be applied we can perceive no basis for inferring any intention of Congress to make the operation of the Act depend on any particular volume of commerce affected more than that to which courts would apply the maxim de minimis." National Labor Relations Board v. Fainblatt, supra, 306 U.S. 607, 59 S.Ct. 672, 83 L.Ed. 1014.

The quantity of cement shipped out of state is not de minimis merely because it is but a small percentage of respondent's total sales. Otherwise, we would have the anomaly of one plant under federal regulation because exporting its entire product of 14,000 barrels while alongside it another competing plant under state regulation because, though shipping the same amount of 14,000 barrels, they constituted, say, but 4 percent of its product. Congress could not have intended that it would subject laboring men or employers to such a confusing and, in business competition, such a destructive anomaly. Nor is the quantity of a particular product shipped out of state de minimis merely because it is small in proportion to the total interstate commerce in that product from all the states or from the employer's state.

Though respondent's manufacturing activities, separately considered, be deemed intrastate in character, they bear a direct relationship to its interstate activities. Stoppage of respondent's interstate shipments, constituting interruption of or interference with the flow of interstate commerce, would directly follow from stoppage by industrial strife of its manufacturing operations. Here the Board charged such industrial strife and upon the evidence found that it existed and constituted such interference with the flow of interstate commerce. We hold that respondent's activities bring it within the scope of the federal regulatory power of the National Labor Relations Act and that the proceeding was within the Board's jurisdiction.

(2) The National Labor Relations Board lacked the power to invalidate the closed-shop contract between respondent and the Lime and Cement Employees Union. The Board not only had no jurisdiction of the subject matter of the contract because not mentioned in the Board's several amended complaints but also none in personam because neither the employees nor their union were parties to the hearings leading to the contract's invalidation.

Inter alia the respondent was ordered by the Board to cease and desist from "Giving effect to its contract with Lime and Cement Employees Union of Contra Costa County, No. 21074 * * *."

The Lime and Cement Employees Union is an affiliate of the American Federation of Labor and is hereafter called the A. F. of L. Union. It is an unincorporated association now composed of approximately 200 employees of respondent, hereafter called the A. F. of L. employees. The contract ordered to become ineffectual provided for a closed-shop, a bargaining committee empowered to bargain collectively with respondent "in respect to rates of pay, wages, hours of employment or other conditions of employment." It also provided for a "Grievance Committee of the Union" and for its method of procedure. It also provided for arbitration and agreed that there should be no strikes or lockouts pending arbitration. It is the kind of agreement labor has struggled for the right to obtain over decades of federal and state legislation and it is specifically provided for in sections 8(3) and 9(a) of the National Labor Relations Act, 29 U.S.C.A. §§ 158(3), 159(a).

Neither the A. F. of L. employees nor the A. F. of L. Union were made parties in the Board proceeding leading to the Board's order which purports to destroy their contract. The proceeding below was finally heard on the Board's second amended complaint which, in turn, was amended to conform to certain proofs made at the hearing. In neither the complaint nor in any of the several amended complaints was named the A. F. of L. Union nor, as such, the employees associated in it.

In this condition of the pleadings and order this court, sua sponte, is required to determine whether the Board has jurisdiction of the subject matter of the A. F. of L. Union's contract which its order seeks to destroy and, hence, to what extent, if any, this court has jurisdiction to decree the order's enforcement.

The A. F. of L. Union presented to this court a petition to intervene which came on to be heard, the Board's attorney appearing at the hearing. The petition alleged in terms of its legal effect, the closed-shop contract of the A. F. of L. Union with the respondent. It was granted and thereafter the A. F. of L. Union filed its answer to the petition of the Board.

In the A. F. of L. Union's briefs and at the hearing were pointed out portions of the testimony before the Board sustaining its contention that at the time of the making of the closed-shop contract it had as its members a majority of the then employees of the respondent within the appropriate bargaining unit2 and that the proposed contract was presented at a meeting held August 26, 1937, in which a majority of the employees of respondent was present and at...

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    ...F.2d 167, 169; Titan Metal Mfg. Co. v. National Labor Relations Board, 3 Cir., 106 F.2d 254. Contra: National Labor Relations Board v. Cowell Portland Cement Co., 9 Cir., 108 F.2d 198; National Labor Relations Board v. Sterling Electric Motors, Inc., 9 Cir., 109 F.2d 194, 5 Labor Relations ......
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