Upper Lakes Shipping, Ltd. v. Seafarers' Intern. Union of Canada

• Decision Date: 05 February 1963
• Citation: 119 N.W.2d 426,18 Wis.2d 646
• Parties: , 52 L.R.R.M. (BNA) 2494, 46 Lab.Cas. P 50,742 UPPER LAKES SHIPPING, LTD., a Canadian Corporation, Plaintiff-Respondent, Canadian Maritime Union, Intervenor-Plaintiff-Respondent, v. SEAFARERS' INTERNATIONAL UNION OF CANADA et al., Defendants-Appellants.
• Court: Wisconsin Supreme Court

Page 426

119 N.W.2d 426

18 Wis.2d 646, 52 L.R.R.M. (BNA) 2494,

46 Lab.Cas. P 50,742

UPPER LAKES SHIPPING, LTD., a Canadian Corporation Plaintiff-Respondent Canadian Maritime Union, Intervenor-Plaintiff-Respondent, v. SEAFARERS' INTERNATIONAL UNION OF CANADA et al Defendants-Appellants.

Supreme Court of Wisconsin.

Feb. 5, 1963.

Raskin & Zubrensky, Milwaukee, Max Raskin and Herbert S. Bratt, Milwaukee, of counsel, for appellants.

Foley, Sammond & Lardner, Milwaukee, Herbert P. Wiedemann and Eugene C Daly, Milwaukee, of counsel, for respondents.

WILKIE, Justice.

There are three principal issues on this appeal:

1. Does the National Labor Relations Act preempt the State of Wisconsin from taking jurisdiction in this controversy?

2. If there is no federal preemption, is the plaintiff (as a foreign corporation without a certificate of authority from the Secretary of State), precluded from invoking the jurisdiction of the courts of this state?

3. Was the trial court correct in enjoining the picketing by defendant?

Was there preemption by federal government? On the question of preemption this case is governed by Benz v. Compania Naviera Hidalgo (1957), 353 U.S. 138, 77 S.Ct. 699, 1 L.Ed.2d 709.

In that case the S.S. Riviera, owned by a Panamanian corporation and flying a Liberian flag, sailed into Portland, Oregon, for repairs, to load a cargo of wheat, and to complete an insurance survey. The crew was made up entirely of nationals of countries other than the United States, principally German and British. On or about September 9, 1952, the members of the crew went on strike on board ship. On September 26th the striking crewmen left the ship. The crew picketed the ship from September 9th to October 13th. The crew had designated the Sailors' Union of the Pacific as their collective bargaining representative. This latter union picketed the ship until restrained by an injunction. Damages were later awarded to the employer. All the picketing was peaceful but was enjoined because the purpose of the picketing was illegal.

The union and their representatives contended that the trial court was without jurisdiction because the Labor Management Relations Act of 1947 had preempted the field. The judgments were based on a common law theory that the picketing was for an unlawful purpose under Oregon law. The court ruled that there was no federal preemption and in its opinion stated:

'It [the controversy] was between a foreign employer and a foreign crew operating under an agreement made abroad under the laws of another nation. The only American connection was that the controversy erupted while the ship was transiently in a United States port and American labor unions participated in its picketing.' (p. 142, 77 S.Ct. p. 701)

'Our study of the act Leaves us convinced that Congress did not fashion it to resolve labor disputes between nationals of other countries operating ships under foreign laws. The whole background of the act is concerned with industrial strife between American employers and employees.' (pp. 143, 144, 77 S.Ct. p. 702)

'For us to run interference in such a delicate field of international relations there must be present the affirmative intention of the Congress clearly expressed.' (p. 147, 77 S.Ct. p. 704)

In the case at bar, the plaintiff Upper Lakes is a Canadian employer and its crew is composed entirely of foreign seamen, sailing under a Canadian flag, who were picketed by another Canadian union while the ship involved was transiently in an American port. Because there were no more internal United States contacts and controls in the instant case than in the Benz Case, supra, we are convinced that under the ruling in that case, there was no federal preemption here.

Defendant union contends that the ship makes many voyages to Milwaukee each year. Upper Lakes ships may visit Milwaukee from four to six times during the season. Furthermore, in Lauritzen v. Larson (1953), 345 U.S. 571, 73 S.Ct. 921, 97 L.Ed. 1254, the U. S. Supreme Court dismissed the argument that frequent and regular visits will of itself bring the subject matter under federal jurisdiction.

The defendant cites two cases decided by the National Labor Relations Board that hold that the State of Wisconsin is preempted from asserting jurisdiction in this case: West India Fruit & Steamship Co. (1961), 130 N.L.R.B. 343, and United Fruit Co. (1961), 134 N.L.R.B. 287. It is true that in both of these cases the N.L.R.B. did retain jurisdiction over the controversy. But both of these cases can be easily distinguished from the case at bar. In the West India Fruit Case, supra, the ship sailed only between Cuba and the United States and was owned by a United States corporation. In the United Fruit Case, supra, the ships were owned by a subsidiary which was in turn completely owned, operated and controlled by a United States corporation. The N.L.R.B. held there were substantial United States contacts which brought the case under the jurisdiction of the N.L.R.B. In oral argument the defendant also cited a recent supreme court decision Ex parte George (1962), 371 U.S. 72, 83 S.Ct. 178, 9 L.Ed.2d 133. In that case the Supreme Court of the United States held that the State of Texas did not have jurisdiction over a labor dispute involving the American Oil Co. and the National Maritime Union. The labor union peacefully picketed a refinery operated by a subsidiary of American that had a valid collective bargaining agreement with the Oil, Chemical and Atomic Workers International Union. The court held that the district court (of Texas) was without jurisdiction to enforce contempt proceedings against the union representative who did not abide by that court's injunction against the picketing of the refinery.

"In the absence of the Board's clear determination that an activity is neither protected nor prohibited or of compelling precedent applied to essentially undisputed facts, it is not for this Court to decide whether such activities are subject to state jurisdiction.' San Diego Building Trades Council, etc. v. Garmon, 359 U.S. 236, 246, 79 S.Ct. 773, 780, 3 L.Ed.2d 775. The Texas Supreme Court held that petitioner's conduct was neither arguably prohibited nor arguably protected by the Act. Tex., 358 S.W.2d 590. We disagree. Even assuming, without deciding, that the picketing would not fall within the prohibitions of § 8(b)(1)(A) or § 8(b)(4)(i)(B) of the National Labor Relations Act, as amended, we hold, in light of the District Court's finding that American wholly owns the subsidiary and 'directs and controls all of * * * [its] activities,' that petitioner's picketing was conduct at least arguably protected by § 7 of the Act.' (Emphasis ours.) (83 S.Ct. pp. 179, 180)

Thus a U. S. corporation was a real party to the dispute and that fact in itself also distinguishes the above case from the Benz Case, supra, and the case at bar. ¹

Is the plaintiff precluded from invoking the jurisdiction of the courts of this state?

Sec. 180.801(1), Stats., states:

'A foreign corporation shall procure a certificate of authority from the secretary of state before it shall transact business in this state * * *.'

Sec. 180.847(1), Stats., states:

'No foreign corporation transacting business * * * in this state without a certificate of authority * * * shall be permitted to maintain * * * a civil action * * * in any court of this state, unless such corporation shall have obtained a certificate of authority.'

Based upon the interpretation of these two statutes, the defendant argues that the plaintiff Upper Lakes is precluded from procuring an injunction because (1) it is a foreign corporation transacting business in the State of Wisconsin, and (2) it has not obtained a certificate of authority from the Secretary of State of Wisconsin to transact business in this state.

There is no question but that a state has the right to require a foreign corporation to obtain a certificate of authority to transact business in its jurisdiction. This is a matter of public policy to be determined by the legislature or by judicial decision. In State ex rel. Goldwyn D. Corporation v. Gehrz (1923), 181 Wis. 238, at page 242, 194 N.W. 418, this court stated at page 420:

'Whether such a foreign corporation may be permitted to become a suitor in the courts of any particular state, provided no question of interstate commerce is concerned, is exclusively a question of public policy to be declared through statute or by judicial decision in each particular state.' (Emphasis ours.)

Thus, when a question of interstate commerce is concerned, the federal government has jurisdiction to regulate the actions of a foreign corporation engaged in interstate commerce. However, a state still has the power to impose conditions which restrict a foreign corporation engaged in interstate commerce when in fact the foreign corporation is 'transacting business' in the particular state. This court, in Bulova Watch Company v. Anderson (1955), 270 Wis. 21, at page 27, 70 N.W.2d 243, held at page 247:

'In order for a foreign corporation to transact business in a state it must be physically present within the state in the sense of having an officer or agent there who is performing some act on behalf of the corporation.'

The problem, therefore, in the case at bar is to determine whether or not the plaintiff Upper Lakes is 'transacting business' in the State of Wisconsin. If the plaintiff Upper Lakes is found to be transacting business in this state, then it is precluded from invoking the jurisdiction of this state's courts because it did not in fact have a certificate of authority. If, on the other hand, it was not transacting business in this state, then the rule as stated In re Bell Lumber Company (1945), 7 Cir., 149 F.2d 980, would be applicable. That rule is as follows:

'If a foreign corporation is engaged in interstate commerce, and as a mere incident to such commerce, engages in business in Wisconsin,...