United States v. LOS ANGELES MEAT & PROVISION DRIVERS U.

• Decision Date: 30 June 1961
• Docket Number: No. 515-59.,515-59.
• Citation: 196 F. Supp. 12
• Parties: UNITED STATES of America, Plaintiff, v. LOS ANGELES MEAT AND PROVISION DRIVERS UNION, LOCAL 626, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA, Meyer Singer, Lee Taylor, Hubert Brandt, Walter Klein, and Harold Carlis, Defendants.
• Court: U.S. District Court — Southern District of California

196 F. Supp. 12

UNITED STATES of America, Plaintiff, v. LOS ANGELES MEAT AND PROVISION DRIVERS UNION, LOCAL 626, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA, Meyer Singer, Lee Taylor, Hubert Brandt, Walter Klein, and Harold Carlis, Defendants.

No. 515-59.

United States District Court S. D. California, Central Division.

June 30, 1961.

George B. Haddock, Maxwell M. Blecher, Antitrust Div., Dept. of Justice, Los Angeles, Cal., for plaintiff.

Brundage, Hackler & Flaum, Los Angeles, Cal., for defendants.

BYRNE, District Judge.

The United States filed its complaint under Section 4 of the Sherman Act (15 U.S.C.A. § 4) seeking to prevent and restrain a continuing violation by defendants of Section 1 of the Act (15 U.S.C.A. § 1).

The defendant Los Angeles Meat and Provision Drivers Union, Local 626, is affiliated with the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, and has its principal place of business in Los Angeles, California. Defendant Meyer Singer is business representative of the Union who actively managed and coordinated the affairs and acts of the grease peddler members of the Union. Defendants Lee Taylor, Hubert Brandt, Walter Klein and Harold Carlis are grease peddler members of the Union.

"Grease peddlers" are defined as independent businessmen who are in the business of buying, transporting and selling waste restaurant grease for their own account. These self-employed peddlers have no established place of business; no employees, except an occasional loader; no capital investment, except a small equity in a truck; no skill or special qualifications except the ability to load, unload and drive a truck. Grease peddlers drive from restaurant to restaurant picking up small amounts of waste grease in cans and, on the same day, transport and unload the entire collection to one of the processing companies. Their earnings represent the difference between the buy and sell price of the waste grease, diminished by the cost of maintaining and operating the truck.

The processing companies who buy the waste restaurant grease from the peddlers then convert it into yellow grease, which they sell either directly to buyers in foreign countries or to buyers in California for shipment to foreign countries. Therefore, any restraint on or disruption in, or interference with, the purchase of waste restaurant grease by peddlers and its sales to processors, and any suppression or elimination of competition in the purchase and sale of waste grease by processors from peddlers, necessarily and directly restrains and affects the flow of yellow grease in foreign commerce.

Prior to 1954, the grease peddlers of Los Angeles were not members of, or in any way affiliated with, any labor union. However, in the fall of 1954, the defendant Singer, a business agent of defendant Union, and certain grease peddlers, caused most of the grease peddlers in Los Angeles County to become members of defendant Union. In soliciting their membership, Union representatives, including defendant Singer, proposed the following general plan: The Union would increase the profits of the grease peddlers by increasing the margin between the prices paid by said peddlers for restaurant grease and the prices they would be paid by processors; grease peddlers would be prevented from soliciting or buying grease from the accounts of other peddlers; the processors would be required to deal only with those grease peddlers who were members in good standing of the Union; and unless grease peddlers became members of the Union, they would have no place to sell their restaurant grease and would be forced out of business.

In October 1954, a majority of grease peddlers in Los Angeles County, including defendants Taylor, Brandt, Klein and Carlis, joined the defendant Union, thereby agreeing to make operative the plan outlined by defendant Singer and other Union representatives.

During the period between October 1954 and May 27, 1959 (the period covered by the complaint), there were in Los Angeles County about 40 to 50 grease peddlers, 35 to 45 of whom were members of defendant Union. After April 1955, these grease peddlers held their membership in a subdivision of the Union known as Local 626-B.

During this same period, there were in Los Angeles County eight processors of yellow grease, six of which acquired all or most of their waste grease from grease peddlers.

The parties filed a stipulation providing that seventy-two facts set forth therein were admitted, required no proof and should be accepted by the court as being true for purposes of the instant action. These facts relate in detail the plan and the activities of the defendants, and support fully the allegations of the complaint that defendants were guilty of price-fixing and elimination of competition in the gathering and sale of waste grease in the Los Angeles area.

It is further stipulated:

1. That the acts of defendants and their co-conspirators constitute a direct, substantial and unreasonable restraint upon foreign trade and commerce in yellow grease.

2. That defendants unlawfully combined and conspired in unreasonable restraint of trade in violation of Section 1 of the Sherman Act.

3. That the court may enter judgment that defendants have violated Section 1 of the Sherman Act as charged in the complaint.

4. That plaintiff is entitled to injunctive relief perpetually enjoining defendants from participating, and from forcing the processors to participate, in any plan the purpose and effect of which is to fix prices and eliminate competition in the peddlers' gathering grease and selling it to processors.

The sole remaining issue in the case is whether the decree should include a provision that the Union be ordered to terminate the membership of peddlers and be perpetually enjoined from accepting peddlers as members, unless they become bona fide employees, and that the peddler defendants be enjoined from holding membership in and participating in the affairs of the Union, unless they become bona fide employees.

Defendants' first argument in opposition to the ouster of peddlers from defendant Union, is that "membership of peddlers in a union does not transform the union into an illegal combination in restraint of trade under the antitrust laws." The proposition thus stated appears to be pointless, inasmuch as plaintiff and defendants have stipulated to the fact that the defendants (including the Union and its peddler members) "unlawfully combined and conspired in unreasonable restraint of foreign trade and commerce in yellow grease in violation of Section 1 of the Sherman Act." (Italics added.)

The issue at hand is whether, under the facts as stipulated, the court may properly enter a decree compelling the defendant Union to oust its peddler members. Defendants cite many Supreme Court cases which they claim condone a union's taking independent contractors into membership. Therefore, what defendants are presumably arguing is that since there is nothing illegal per se about an independent contractor's joining a union, this court has no power to compel the expulsion of defendant peddlers from defendant Union.

It may be noted at the outset that the precise issue of whether an independent contractor may properly join a union appears never to have been before the Supreme Court. At any rate, this issue was not decided in any of the cases cited by defendants in their brief. A reading of these cases discloses that only in the most indirect fashion did the court indicate its views as to the propriety of extending union membership to independent contractors, jobbers, vendors, or the like.

For example, in Bakery and Pastry Drivers and Helpers Local, etc. v. Wohl, 1941, 315 U.S. 769, 62 S.Ct. 816, 86 L. Ed. 1178, in an effort to compel peddlers (independent jobbers) to join the bakery drivers' union, members of that union had peacefully picketed bakeries from which peddlers obtained their goods, carrying placards with the peddlers' names and a true statement of the union's grievances. The Supreme Court held that a state court injunction against such picketing was an unconstitutional invasion of the right of free speech.

From the facts and the decision of the Bakery Drivers case, it may be obliquely inferred that peddlers can join, or properly be coerced to join, a union when they are engaged in the same kind of work as union members and compete with the members, thus lowering the working conditions and wages of the latter.

Another case cited by defendants is Milk Wagon Drivers' Union etc. v. Lake Valley Farm Products, 1940, 311 U.S. 91, 61 S.Ct. 122, 85 L.Ed. 63. Here, the Supreme Court held there existed a "labor dispute" within the meaning of the Norris-LaGuardia Act, 29 U.S.C.A. § 101 et seq.; and, the requirements of this Act not having been met, the District Court had no jurisdiction to grant an injunction, notwithstanding that the suit was based upon alleged violation of the Sherman Act. The Milk Wagon Drivers' court did not pass even indirectly upon the question of whether the picketing had a legitimate objective. The only point of the case for the purpose of this discussion is that it furnishes another instance of a union's attempt to compel the joinder of self-employed persons whose activities tend in some manner to compete with the functions of union members, thus affecting unfavorably the wages and employment of the union members.

Upon the basis of the Bakery Drivers and Milk Wagon Drivers' cases, supra, it may be said that the Supreme Court apparently and impliedly sanctions the union's coercing the joinder of independent contractors, jobbers or vendors (1) if these groups compete with union members by doing the same or similar work; and (2) if the object of having these groups join the union is to eliminate their unfair competition with union members, and the consequent lowering of the wages and working...