Wirtz v. Fowler

• Decision Date: 19 October 1966
• Docket Number: No. 22350.,22350.
• Parties: W. Willard WIRTZ, Secretary of Labor of the United States, Appellant, v. Cody FOWLER et al., Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

372 F.2d 315 (1966)

W. Willard WIRTZ, Secretary of Labor of the United States, Appellant, v. Cody FOWLER et al., Appellees.

No. 22350.

United States Court of Appeals Fifth Circuit.

October 19, 1966.

COPYRIGHT MATERIAL OMITTED

Robert C. McDiarmid, Alan S. Rosenthal, Attys., Dept. of Justice, Washington, D. C., for appellant.

P. D. Thomson, D. P. S. Paul, Miami, Fla., for appellees.

Before PHILLIPS,^* JONES and BROWN, Circuit Judges.

JOHN R. BROWN, Circuit Judge:

This appeal from a summary declaratory judgment, S.D.Fla., 1964, 236 F. Supp. 22, 40 N.Y.U.L.Rev. 366 (1965), holding that Appellees, partners engaged in the practice of law, have no duty under §§ 203(b), (c), (f), 204 of the Labor-Management Reporting and Disclosure Act of 1959 LMRDA, 29 U.S.C.A. §§ 433(b), (c), (f), 434 (1958) ed. Supp. V)¹ to file any report covering any of their activities during 1960 and 1961 on behalf of their Employer clients, presents a question of first impression as to the construction of these statutory provisions, the impact of the common-law attorney-client confidential communication privilege on such construction, and the constitutionality of the provisions as construed. We reverse in part, affirm in part, and remand. In short, we hold that the evidence — viewed, as it must be on summary judgment, most favorably to the Government — clearly shows that Appellees have engaged in "persuader" activities² on behalf of four employer-clients which must be reported under the 30-day and annual reporting requirements of § 203(b) and which are not exempt from these requirements by virtue of §§ 203(c), (f), or 204. However, contrary to the position taken by the Government, we conclude that the statute does not require Appellees to include in their annual reports a statement of receipts from and disbursements on behalf of other clients for whom they performed only nonpersuader labor relations activities in regard to which no 30-day report is required. As so construed and applied, the reporting requirements of § 203(b) are constitutional.

I

This suit was initiated by the Appellees in the District Court for a declaratory judgment that they were not subject in any manner to the reporting requirements of § 203(b) of the LMRDA. The Government counterclaimed seeking an injunction requiring Appellees to comply with the Act.

The Government contended that pursuant to arrangements with four of their clients,³ Appellees had engaged in persuader activities and that within 30 days of each such arrangement they were required to report the terms and conditions thereof. Furthermore, the Government contended that under § 203(b) the Appellees were required to file annual reports as to each fiscal year within which payments were received pursuant to those agreements, and that these reports had to include a statement of receipts from, and disbursements on behalf of, all clients to whom Appellees had rendered any kind of labor relations services or advice, including but not limited to the four clients for whom Appellees had performed persuader activities. According to the Government, attorneys qua attorneys are not exempt from the reporting requirements and must file a 30-day report as to each persuader agreement. An attorney who confines his activities to those enumerated in § 203(c) need not file any report, but once he undertakes on behalf of any client persuader activities not within the scope of § 203(c), he must not only file a 30-day report covering these activities, but must file an annual report covering even those activities described in § 203(c). And he must do so as to all clients. The Government's construction of the Act is that the § 203 (c) exemption applies solely to "who" must report rather than to "what" must be reported. If an attorney engages in persuader activities which are not exempt by § 203(c), this triggers the necessity for him to report all his labor relations activities on behalf of all his clients. Finally, the Government contended that neither § 203(f) nor § 204 exempt the Appellees from the reporting requirements of the Act. Section 204, in contrast, to § 203(c), limits "what" must be reported, not "who" must report, for it comes into play only once a report is required to be filed. And even then, it only exempts the attorney from reporting confidential communications within the traditional scope of the attorney-client privilege. According to the Government, the information required by his official report forms would not trespass on this privilege. As to § 203(f), there is simply no modification of the employer's rights under § 8(c) of the LMRA by requiring his attorney to report on labor relations activities.

The Appellees, on the other hand, did not deny that their activities on behalf of the named clients were those of a "persuader" or within the literal terms of § 203(b). Instead, they vigorously insisted that their activities were confined to those listed in § 203(c) because they were all things which a lawyer professionally and ethically might properly do in connection with, and in furtherance of, representation of their clients in administrative, judicial or collective bargaining proceedings. Furthermore, since these activities constituted a well-recognized part of the practice of labor law, they were exempted by virtue of § 204. And finally, Appellees attacked the Government's construction of the Act as unconstitutionally abridging their clients free-speech rights and their attorney-client privilege, the latter especially if they were required to report all nonpersuader activities on behalf of clients who hired them to do no persuader acts.

With the lines of contention thus clearly drawn, the Government, over many obstacles, sought by pretrial discovery to factually establish the types of activities it alleged Appellees undertook on behalf of their four named clients. Introduced into evidence by the Government were many, many pages of depositions, requests for admissions and their answers, interrogatories and their answers, stipulations, etc. Appellees, however, apparently content to rely on their position that, regardless of the precise nature of their activities, they were not, as a matter of law, subject to the reporting requirements of the Act, introduced little, if any, evidence to contradict the factual assertions of the Government or the evidence introduced in support of those assertions. Insisting then, as they now do, that the depositions presented by the Government are irrelevant, the deposition proceedings were often a frustrating experience in the effort of discovery. Time and time again, at the taking of the depositions, the Appellees objected to the Government's questions as violative of the attorney-client privilege, as irrelevant and immaterial, as leading, as calling for a conclusion of the witness. Question after question, they repeated the same objection. All in all, the lawyers did more talking than the deponents. If, as Appellees now assert, the deponents' testimony was confused, unsure, and vague, the Appellees are certainly partly responsible for this state of things, for the deponents could scarcely get a word in edgewise. The Government's requests for admissions, motions for production of documents, and motion to compel one of Appellees' partners to answer on deposition met with the same kind of stubborn resistance. And many of Appellees' objections to these requests were sustained by the Court on the ground that the requests were irrelevant and immaterial — a result, we may add, which was consistent with the Court's concept of controlling substantive principles which we hold to have been erroneous. Although the Government now complains of these rulings, many of which we agree are of doubtful propriety, our view of this appeal makes decision thereon unnecessary.

Neither need we pass on the Government's more serious complaint that the trial Court ruled on Appellees' motion for summary judgment without allowing it to complete its discovery and without ever definitively ruling on a number of its motions for discovery. For in any case, before completing discovery, the Government likewise moved for summary judgment stating the belief that it was so entitled on the basis of the evidence of record, even without the further discovery sought. The Government was at least half right. Construing the evidence most favorably to the Government,⁴ we conclude that the trial Court erred in granting summary judgment to Appellees as to their duty to report persuader activities. It does not follow, however, that the Court erred in not granting the Government's motion. As to it, much may well turn out on remand to be established as a matter of law under the principles we announce. But it is better administration that the trial Court examine it in the light of such principles and then determine just what is so established and what remains for resolution by the trier of fact.

II.

In granting Appellees' motion for summary judgment, the District Court purported to accept the Government's version of Appellees' activities, 236 F.Supp. at 25, and to resolve all factual disputes in favor of the Government, 236 F.Supp. at 28. However, the District Court summarized these facts in such a general way that it is impossible to tell whether this was really so. The Court below summarized them in such a general fashion as to mask the real nature of Appellees' persuader activities. Because these facts vividly portray these activities and are so essential to the applicability of the Act, we deem it appropriate to describe in some detail Appellees' activities on behalf of the four named clients.

L. D. Plante, Inc.

In 1960, Appellees represented L. D. Plante, Inc., and Paul Saad, an attorney associate in the firm and an agent of Appellees, performed certain services for that company. During a labor dispute arising out of a unionization drive⁵ Paul Saad, on at least two occasions, spoke to groups of employees...