Textile Workers Union of America v. Allendale Co.

Decision Date14 July 1955
Docket Number12374.,No. 12331,12331
Citation226 F.2d 765
CourtU.S. Court of Appeals — District of Columbia Circuit

Mr. David E. Feller, Washington, D. C., with whom Messrs. Arthur J. Goldberg and Thomas E. Harris, Washington, D. C., were on the brief, for appellant in No. 12331.

Mr. John K. Pickens, Washington, D. C., with whom Messrs. Jerry N. Griffin, and Donald S. Dawson, Washington, D. C., were on the brief, for appellant in No. 12374.

Mr. C. Roger Nelson, Washington, D. C., with whom Mr. Franklin M. Schultz, Washington, D. C., was on the brief, for appellee The Allendale Company, and certain other appellees in both cases.

Mr. Edward H. Hickey, Atty., Dept. of Justice, entered an appearance for appellee James P. Mitchell, Secretary of Labor, in both cases.


BAZELON, Circuit Judge.

These consolidated appeals1 are from orders of the District Court denying intervention in a suit to review and set aside certain determinations by the Secretary of Labor under the Walsh-Healey Act.2 The determinations fixed "the prevailing minimum wages" at a national level for the woolen and worsted industry in manufacturing goods under contracts with the Government. They raised previously determined minimums which had been fixed on a regional level.

Our appellees are employers in the industry, operating in regions where the prevailing wages are lower than the national level. They opposed these changes in the administrative proceeding and brought the suit for review in the District Court as "persons adversely affected or aggrieved" under the Fulbright Amendment to the Walsh-Healey Act.3

The following is a brief description of the appellants and their respective interests in the determinations which they instigated before the Secretary and now seek to defend by intervention in the review proceeding. Appellant in No. 12331 is a union of employees which will enjoy increased wages under the determination. Appellant in No. 12374 is an employer competing with the appellee companies in bidding for Government contracts and operating in a region where the prevailing rates are even higher than those fixed by the Secretary; hence its ability to compete with the appellees for Government business will be effectively destroyed if appellees succeed in their attack upon these determinations.

Appellees point to the Supreme Court's holding in Perkins v. Lukens Steel Co. that Walsh-Healey determinations are not judicially reviewable.4 From this they argue that the absence of any reference to intervention in the subsequently enacted Fulbright Amendment, granting aggrieved persons judicial review to attack the determinations, must be construed to preclude intervention in such review by persons who would be commensurately aggrieved if the determinations were set aside.5 We think this argument untenable. The Fulbright Amendment creates the right of action which brings the case into court. Once there, the case is governed by the principles which control the course of all litigation in the District Court.

Nor do we agree with appellees' contention that these principles, reflected in Rule 24 of the Federal Rules of Civil Procedure, 28 U.S.C.A., bar the interventions sought here.

Rule 24 provides:

"(a) Intervention of Right. Upon timely application anyone shall be permitted to intervene in an action: * * * (2) when the representation of the applicant\'s interest by existing parties is or may be inadequate and the applicant is or may be bound by a judgment in the action * * *.
"(b) Permissive Intervention. Upon timely application anyone may be permitted to intervene in an action: * * * (2) when an applicant\'s claim or defense and the main action have a question of law or fact in common. * * * In exercising its discretion the court shall consider whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties."6

Obviously tailored to fit ordinary civil litigation, these provisions require other than literal application in atypical cases. Administrative cases, as the present one demonstrates, often vary from the norm.

In conventional litigation, one is bound by a judgment in the action, within the meaning of Rule 24(a), when the judgment is res judicata as to him.7 Appellants in this case were not parties in a technical sense to the administrative proceeding; nevertheless they are "bound" by the determinations therein in a very practical sense. Authoritative rulings made in this proceeding fixed a wage at a national level. These rulings are under attack in the suit for review below. It is true that, if the attack succeeds, the final judgment would preclude neither the appellants nor the appellees from later pressing their interests at the administrative level. But ultimate victory at that point cannot overcome the "practical disadvantage" to which appellants may be subjected as a result of the prior judicial action.8 For example, if the determinations are upset, the membership of the appellant union will be deprived of economic benefits. That the union may subsequently receive other benefits from new determinations which it may procure cannot compensate for the losses suffered in the interim. Nor does the fact that the union may bargain for a wage higher than the minimum convince us that it and its members are not bound, in a practical sense, by minimum wage determinations. Similarly, if the appellant-employer is forced out of business by an injunction restraining the effectuation of the wage determinations, he can take little solace from a subsequent moral victory. Hence we think that the strict test of res judicata is inappropriate in applying Rule 24(a) to the present case.

The right of the appellants to intervene is not affected by the fact that the general position they assert is already represented in the action by the Secretary of Labor. The Secretary's response to the motions to intervene declares that neither the appellants nor the appellees can show themselves to be directly affected by the determinations. This is hardly an assurance of adequate representation for the appellants.9 Even if the Secretary espoused the appellants' interests with greater heart, it would not necessarily preclude their appearance to plead for themselves.10

Generally "a claim of an absolute right to intervene must be based upon the language of Rule 24(a)."11 But this rule is not "a comprehensive inventory of the allowable instances for intervention" as of right. Missouri-Kansas Pipe Line Co. v. United States, 1941, 312 U.S. 502, 505, 61 S.Ct. 666, 85 L.Ed. 975. In that case, in reversing an order denying intervention, the Supreme Court was not concerned with the distinctions between 24(a) and (b). In fact, the Court spoke in terms of permissive intervention:

"We are not here dealing with a conventional form of intervention, whereby an appeal is made to the court\'s good sense to allow persons having a common interest with the formal parties to enforce the common interest with their individual emphasis. Plainly enough, the circumstances under which interested outsiders should be allowed to become participants in a litigation is, barring very special circumstances, a matter for the nisi prius court. But where the enforcement of a public law also demands distinct safeguarding of private interests by giving them a formal status in the decree, the power to enforce rights thus sanctioned is not left to the public authorities nor put in the keeping of the district court\'s discretion."12

In that case, a consent decree specifically provided for such intervention. But the teaching of the case is not so narrowly limited. It expresses generally the proposition that failure to come within the precise bounds of Rule 24's provisions does not necessarily bar intervention if there is a sound reason to allow it.13 Even if 24(a) were inapplicable here, we are convinced that appellants would be entitled to intervene under the terms of 24(b). Appellees concede that appellants may have a "general interest" in the subject of the suit, but they assert that this interest does not constitute a "claim or defense" as required by the rule. Principal reliance is placed on Jewel Ridge Coal Corp. v. Local 6167.14 But, as Professor Moore points out, in commenting upon the Jewel Ridge case and others of similar purport, intervention has been allowed in situations where "the existence of any nominate `claim' or `defense' is difficult to find."15 And establishing a "claim or defense" for purposes of permissive intervention is, of course, not dependent upon a showing of "direct pecuniary interest" in the litigation.16

In any event, appellants have much more than a "general interest" to protect. They have a real economic stake in the outcome of this litigation. It is similar to the interest which prompted this court to approve the trial court's grant of intervention in Champ v. Atkins,17 the principal example cited by Professor Moore in his comment on the Jewel Ridge case. There members of a taxicab association sought a judgment declaring that their driving permits should not be suspended for nonpayment of a judgment. The judgment creditor, who was permitted to appear, obviously could present no "claim or defense" in the technical sense. But we recognized that the creditor's "economic interest" in inducing payment of the debt, which was likely to occur with suspension of the taxi drivers' licenses, was sufficient to justify intervention under Rule 24.18

It is clear, too, that there is a common question of "law or fact" at issue. Appellees have an economic interest in invalidating the wage determinations. The appellants'...

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    ...(rule was tailored for private actions and must be read differently in other contexts) (quoting Textile Workers Union v. Allendale Co., 226 F.2d 765, 767 (D.C.Cir.1955) (en banc)). In the present case, the district judge denied intervention on the basis of his finding that appellants failed......
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    ...& Improvement Co., supra, 310 U.S. at 459, 60 S.Ct. at 1055, 84 L.Ed. at 1293. See also Textile Workers Union of America, CIO v. Allendale Co., 96 U.S.App.D.C. 401, 226 F.2d 765 (D.C.Cir. 1955); United States v. Local 638, Enterprise Assn., Etc., 347 F.Supp. 164 (S.D.N.Y.1972). Two distingu......
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    ...19 See Pellegrino v. Nesbit, 203 F.2d 463, 467, 37 A.L.R.2d 1296 (9th Cir. 1953). 20 Textile Workers Union, etc. v. Allendale Co., 96 U.S.App.D.C. 401, 403, 226 F.2d 765, 767 (1955) (en banc), cert. denied, Allendale Co. v. Mitchell, 351 U.S. 909, 76 S.Ct. 699, 100 L.Ed. 1444 (1956), cited ......
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