Earl Warren: Number 398 Louisiana Power & Light Company, petitioner versus City of Thibodaux. MrMonroe.
J. Raburn Monroe: Mr. Chief Justice may it please the Court. This proceeding was commenced by the City of Thibodaux filing a suit in the District Court of Lafourche Parish state court, relying solely on the authority of Act 111 of 1900, an act which had never been interpreted by any state decision or state court decision and as far as we know had never been invoked before as a basis for a condemnation proceeding. The defendant, the Louisiana Power & Light, removed the case to the Federal District Court. After a -- after removal, the defendant filed answer in which it raised about eight of ten questions under state law involving the interpretation of the state act, the application of the state act, validity of the state act and its -- and several other questions of state law. At the pre-trial conference, the District Judge concluded to hear the issues of law prior to going into the matter of compensation. Argument was held at some great length in the District Court on these issues of law, and the District Court proceeded to exercise the questions of state law and grant a stay of proceedings until these questions should be decided by a Supreme Court of Louisiana interpretation. His reasons for doing this is, he points out, that although the power of eminent domain is inhere in the sovereign, it is never delegated to subdivisions by implication and that it is a power that is brought with great peril, a possibility of abuse. He then finds that there had been no state decisions interpreting this law, but that there has been an Attorney General's opinion in 1951 which is to the effect that municipalities do not have the power to condemn utilities. He, therefore, granted the stay, pending that proceeding.
William J. Brennan, Jr.: (Inaudible)
J. Raburn Monroe: That was -- I was going to come to the specific answers, yes. Well going -- I'll go back and fill in the facts. Louisiana Power & Light Company operates in about 44 parishes in the Louisiana and the property here involved in this condemnation suit was a property in the suburbs of the City of Thibodaux. Thibodaux which operates a municipal plant expanded its city limits and then sought to bring this condemnation proceeding. As I say Louisiana Power & Light operates a general electric utility, it generates electricity at remote points from Thibodaux and Monroe, Louisiana and in New Orleans, Louisiana, transmits that by high power transmission lines and then distributes it in Thibodaux. I bring this point out because part of the property involved here is not just a property within the city, new city limits of Thibodaux, but it is that portion that was built, that capacity that was built in all the way back to the power plant for the purpose of serving this area, which is one of the questions as to the applicability of this act. Now this act of 1900 speaks of -- says that municipality can condemn a plant and it goes on to say that if the person owning the plant owns two or more utility plants such as water plant, gas plant at the city condemning this, condemn all of the plants. And so the question or one of the questions state law arising here is whether the city would be required in this case to condemn the entire property of the Louisiana Power & Light which would raise a question as to its state constitutionality, if it was so interpreted. That is, courtesy of -- in one parish operate a general utility system throughout the state of Louisiana. Going on to the -- I might add here also the city of, the city is seeking here also to condemn the right of the Louisiana Power & Light to operate in this section of the city, that is its franchise. Now Louisiana Power & Light operates in that section by virtue of three franchises granted by the parish of Lafourche prior to the taking in of this territory by the city and the reason that the city wants to expropriate a portion of those franchise rights in this area is for the reason that the rates charged by the city to its inhabitants for residential service are approximately 55% higher than the rates charged by Louisiana Power & Light company, so that the city couldn't -- would not long-haul to any customers if they took the property, if we still had the right to operate in that territory. So -- and we -- we say that a careful examination of the statute will show that they are not specifically granted a right to acquire a franchise or a portion of the franchise. Well as I say we raise about eight or nine different questions of state law in this proceeding and unless the Court wants to me, I won't go into them all, it took about an hour's argument before the District Court. When the order of -- the sale order was entered by the District Court, the City of Thibodaux appealed and we filed a motion to dismiss the appeal on the ground that the order was an interlocutory order which is not appealable under the Judicial Code, Section 1291. The Court of Appeal consolidated the appeal and the motion to dismiss, both argued the same time. In argument on the – on the motion to dismiss, the City of Thibodaux argued that this was, this stay order was in effect an injunction setting the doctrine stemming from the (Inaudible) case. In other words, that in granting a stay the District Court was acting as a chancellor in equity, staying a proceeding or enjoining a proceeding on the law side of the case -- we -- which if it was a in junction, would be one of the exceptions provided in Judicial Code Section 1292 Sub 1. In the -- this doctrine has been (Inaudible), but in practically all the cases citing this doctrine it has differentiated the action of a court in granting the stay, acting as a chancellor in equity, enjoining a different proceeding and the action of the judge in the orderly process of trying a case. In all the cases, I admit that a judge trying a case where that law in equity has the inherent power and has discretion in handling the ordinary progress of the case to grant a stay. We claim that this is what this is. This is a exercise of the judge in orderly conduct of the case, granting a stay and we cite in our brief number of cases which have recognized specifically right of a court at law as distinguished from equity, court at law to grant a stay as a matter of its inherent power. Now if -- now in this particular case there was no equitable claim made. The court simply, in the same action before it, after the hearing the evidence on the argument and deciding that in view of the general law that the – following Erie v. Tompkins, that the state interpretation of state statutes should be followed by the federal court and finding no guide of any sort in the state jurisprudence, exercise his prerogative as a court at law in the control of proceedings to stay that particular segment. Now he did not -- he did not dismiss the suit and he still retained jurisdiction insofar as federal question is concerned, insofar as the compensation is concerned. So we say if this is what it is, an exercise of indiscretion of the Court, by then this suit is not appealable, because it's interlocutory order clearly. Now we come to the second question which we raise, which is the question of abusive discretion and that is, was the Court -- if the Court in granting the stay went so far beyond its discretion as a Court at law as to actually constitute this an injunction which makes the case appealable so that it gets here, then is his action nevertheless within his discretion as in granting such a injunction. Now we rely principally in this connection on the case of Leiter Minerals, which we believe is the last pronouncement in this subject in controlling, and that was the case on which the District Court relied, that's Leiter Minerals Inc., versus United States, 352 U.S. 220. In that case, if I can recall fact to you, the Leiter filed a predatory action in the State Court seeking to establish title, the suit was against the mineral lessee of the United States government and he sought to establish title under an interpretation of a 1940 Louisiana statute. The United States government and the lessee went into the Federal Court and brought a suit to quite title, and also asked for an injunction staying proceedings in the state court. The Court below granted the injunction and the Court of Appeals affirmed this and directed the District Court to go ahead and decide the case. This Court, however, affirmed the jurisdiction of the Federal Court, affirmed the issuing of the injunction staying state proceedings, but then directed the district judge to stay further proceedings in the District Court until such time as a determination could be made of the state law, of interpretation of state statute, by the state courts of Louisiana and we say that this is precisely the same situation as in that case. Now we also cite and rely on the Spector case, Spector Motor Company case, which involved an injunction to enjoin the collection of a tax on the ground that it pins down the communist power. In that case also, this Court held that a stay should be granted until such time as the case could be determined or the statute interpreted by a Connecticut Court. There are two leading cases which might be considered in conflict with this. One of them is the case of Meredith versus Winter Haven, involving a suit to enjoin -- a suit involving a question of Florida law. In that case the Federal District Court had decided the case under Florida law against the plaintiff. The Court of Appeals decided, affirmed the dismissal, but made it without prejudice to the plaintiff proceeding in the Florida Court. And the Supreme Court held that it was the -- that this thing, the diversity citizenship case, that it could not -- the Federal Court could not just relax all of its jurisdiction and dismiss a suit, it had -- and that is a case that has very frequently cited. I think there are two differences or distinctions with that case. In the first place here the Court has retained jurisdiction, the District Court has, and as to the compensation question and as to the questions, federal questions and had just temporarily stayed proceedings. And furthermore in the Florida case, the Meredith versus Winter Haven, the Supreme Court of Florida had passed on this very point, which was -- which the Federal Court was asked to pass on. The argument was simply that they would probably overrule this previous decision because a certain argument had not been made to them, so that there was a guide by which the Federal Court could go in an existing final interpretation of the law by Supreme Court of Florida.
Felix Frankfurter: Although the – the one thing I am – would like you to enlighten me, -- what questions there are in this litigation, that have any substantiality on which state law determinations become important.
J. Raburn Monroe: Well --
Felix Frankfurter: Other way around, if you dispel claim that there is nothing here on which the state court could shed light?
J. Raburn Monroe: Yes --
Felix Frankfurter: Isn't that at the heart of this (Inaudible) in this case?
J. Raburn Monroe: That's right, in other words its --
Felix Frankfurter: (Inaudible) is comparable --
J. Raburn Monroe: There is -- it begins with Act number 1011 of 1900. That is the sole authority for this action. Without that Act the city would have no authority per se. Now we say that, that Act is deficient from several respects in authorizing the city to bring this suit.
Hugo L. Black: Is that provision is set out in your brief, provision of the Act?
J. Raburn Monroe: It's quoted in the appendix to the --
Hugo L. Black: (Inaudible) controversy is that whether that should be send back to the State Court to conclude?
J. Raburn Monroe: Yeah, that's the question.
Hugo L. Black: (Inaudible)
J. Raburn Monroe: The Act is printed in the appendix to the city's briefs, the bound -- Now we say this is an -- we have raised quite a number of questions under this, because since 1900 there have been a number of accidents which apparently conflict with this -- this Act. For example there is an Act which says that no utility and utility is defined as any person, shall serve a customer of another utility without first obtaining permission of the Public Service Commission. Now that apparently would -- and it's admitted here that they've got no permission, and there is another order of the Public Service Commission outstanding which is apparently valid, which says that no utility shall transfer any property which it owns, to another without getting its permission, so whether the necessary authority exists for the basis of this suit. Now we also raise questions here considering obligation of contract. The city of Thibodaux in 1948, this question arose with the City of Thibodaux. The City of Thibodaux wanted an industrial customer, the Coca Cola Company and they wanted to serve a college was newly being built just outside their city limits and they proceeded to enter into a contract with Louisiana Power & Light company which is printed in I think page 36 in the record, in which they agreed that if we would transfer this industrial customer and this college to them for service that they would recognize our rights to continue indefinitely to serve in a territory which was then served, which is the territory here in question. So we say that is a valid contract plus the city contested that contract, we say it's a valid contract and reliance thereon we built (Inaudible) there and that any attempt to take our rights to serve in there would be a violation, particularly if we establish that it's a valid contract.
Speaker: Why did you remove this to federal court (Inaudible)?
J. Raburn Monroe: Well this has sort of the Gilbert and Sullivan looked to it. I must admit the statute which, under which this suit was brought we considered, gave a very, a cause of remedy which we considered very prejudicial to ourselves. For example, it provides for the appointment of six commissioners by the court and these six commissioners are to go and view the property, appraise it and make a report within 15 days. Well, suffice it to say I don't think you could possibly even inventory properly of this description of utility system within 15 days and of course these six commissioners, if you, the record will show, were appointed by the Judge the same day that the suit was filed, even before we were served. The act makes no provision for giving evidence to these commissioners. It makes no provision for hearings or for cross examining witnesses, it does say that after they have filed their report in the court that any party can object and the case will be tried out the usual manner. But when you got – go into court and you have six so called impartial experts put in a testimony you then have a great burden if you are going to contest it. And so -- in addition to that the act provides for a summary appeal with no, we call it suspended deal no supercilious. So we considered that this procedure and this act would be very prejudicial to us and so we removed as we of course had the right to do.
Hugo L. Black: In what court did the state court send it back, rather the District Court sent it back?
J. Raburn Monroe: Well we do not pray for that. The District Court came to that conclusion itself. Now why are we satisfied with that, we -- that isn't the, the interpretation of the state law isn't the reason that we removed it, the legal crisis. As a matter of fact as far as we have are concerned we think the District Court was right in the proper of working out of the two systems of law, harmonious working out, I think its correct since Erie versus Tompkins is the law and we are going to have to follow it state decision anyway, why make a preliminary guess about it.
Felix Frankfurter: Is it entirely sua sponte by the District Court?
J. Raburn Monroe: Yeah entirely following the Leiter case.
Felix Frankfurter: It's the same (Inaudible)
J. Raburn Monroe: Yes it's changed right, yes that's right. That's right.
Felix Frankfurter: Now you must told by us (Inaudible) state got instruction on what the state law is --
J. Raburn Monroe: Yeah.
Felix Frankfurter: (Inaudible) you ought to get state court instruction and the Court of Appeals no, you have no business as to that, is that it?
J. Raburn Monroe: That's right, that's what it boils down to. But I think a careful analysis will show that this is right within the, within the Leiter decision, because I think its --
Potter Stewart: (Inaudible) The Leiter case was one within historical jurisdiction of equity, wasn't an injunction being --
J. Raburn Monroe: Well no, not exactly. It was a suit to quite title and an injunction was asked to stay the proceedings in the court and that was granted. Now and that was the way the case came to this Court. But this Court also said we will stay the proceedings to quite title in the Federal Court and in a state proceeding. Now proceedings of quite title in Louisiana -- Louisiana -- the distinction between -- and as legal action is unknown and so it is a statutory proceeding and I would guess it was a legal proceeding and they still, they stayed in that Leiter case, in my opinion a legal proceeding.
Potter Stewart: Now it is true isn't it at least in opinion this court indicates that a federal constitutional question was involved in Leiter to the extent that one construction of that state statute would have raised federal constitutional questions that another construction would have not raised?
J. Raburn Monroe: Majority opinion said that was and --
Potter Stewart: The dissent.
J. Raburn Monroe: The dissent said it was --
Potter Stewart: Is there any -- is there a federal constitutional question (Inaudible)
J. Raburn Monroe: Well we think there is that, here so we think there is a federal constitutional question here of, in connection with the, violation obligation of contract, we have alleged that we have a contract here with the city, also alleged our franchise with the parish of constituted contract. Now I say that in considering whether there is a substantial federal question you got to concede that all of these state questions that we have raised are decided in our favor that that contract is valid.
Potter Stewart: (Inaudible) for information only because I don't remember in that, in Meredith against Winter Haven, and in Propper against Clark, those are primarily the decisions relied upon by your opponent I think, did either of those involve the construction of state statute? Do you remember? It was a just a matter of a state common law, it's a decisional law that's my question?
J. Raburn Monroe: Well the, I, in the Meredith case it was a question of whether the city could refund bonds without paying the deferred interest coupons. However, at the best I'd imagine that would rest on its own --
Potter Stewart: Probably statutory.
Felix Frankfurter: (Inaudible) Propper the other way?
J. Raburn Monroe: Propper and Clark I think the other way it was a question of the law of New York as to whether title vested when a moment they receiver was appointed.
Felix Frankfurter: That -- Mr. Monroe will you yield some of your time to ask what happened to the Leiter case after it went back to --
J. Raburn Monroe: I am sorry I really don't know where it is. I would have liked to.
Felix Frankfurter: Has nothing to do with your case just curiosity – and when disposed of cases here I want to know what happens to them.
J. Raburn Monroe: Well I do know what happened to the Spector case, it was --
Felix Frankfurter: That case came back to us –
J. Raburn Monroe: I would say that the controlling thing in this matter, I would like to quote from Mr. Justice Frankfurter's language, in the dissent in Propper versus Clark and that, because I think there is a issue in this case. So here there are no constitutional issue is present with regard for the respective orbits of state and federal tribunal is the best of reasons as a matter of judicial administration for requiring a definitive adjudication in New York courts, rather than a proceeding in the basis of own counter guess. I think the issue here in these various cases, various reasons have been assigned particularly for acquittal jurisdiction, diversity or something for either denying or granting. But I think the overriding consideration here is the whether this thing should be decided in the state court or the federal court. For instance in Propper versus Clark there is a significant statement by Justice Reed. He says the congressional purpose to control of foreign assets in the hands of the President through the custodian so there might be a uniform national policy in the administration of the act edges strongly for federal determination of issues of rights in black assets. In other words he felt that way that a consideration was the federal policy interest in that alien -- that -- trading with enemy act. I will save a minute if I have it.
Hugo L. Black: One other question?
J. Raburn Monroe: Yes.
Hugo L. Black: Are you claiming in this (Inaudible) I have just read it and I don't see any ambiguity.
J. Raburn Monroe: Well we --
Hugo L. Black: What does it mean to be construed for?
J. Raburn Monroe: We claim number one, well in our answer set out all of our claims, but one of the things, it never mentions the word franchise for example, in authorizing the construction. Number two it says when you acquire a plant you should acquire the whole plant. Now this was -- well this Act was written in 1900 when electric utility systems consisted of one plant in one city, they were not integrated service from central station. The answer is yes, we have a number of contentions with regard to the Act, also contentions that it's been superseded by other acts in certain respects.
Earl Warren: Mr. Claiborne.
Louis Fenner Claiborne: Mr. Chief Justice may it please the Court. The first question raised by the granting of the writ here, was the one of the power of the District Court to issue the stay order. The question of appealability of that stay order, which has been discussed by opposing counsel, was expressly eliminated by the order of granting the writ, the order of this Court granting the writ. As to the question whether the District Court had a right as a matter of power to grant the stay of proceedings before it, we had not anticipated that question. In fact, we had conceded it before the District Court and before the Court of Appeal and only took it up at the invitation of this Court. However, having once investigated it, we found that it was very doubtful, though not at all definite, whether this type of order, in this type of case was authorized, as distinct from the question of whether it was an abuse of discretion or not. The jurisprudence of this Court, and that's all we've dealt with on this question, is to the effect that a court in an equitable proceeding, a court appealed to on the equity side, may grant such as a stay order. It has been allowed also in cases involving admiralty, bankruptcy and even in a couple a law cases, strictly law cases as distinguished from admiralty or bankruptcy. However, in those two cases, the only two law cases involved, the stay was found necessary only because of a necessary preliminary administrative ruling or because the statute involved directed that the preliminary determination be made by another agency before the question came before a court. There is no ordinary civil case in which this Court has either authorized or directed a stay of proceedings. There is, however, language in two cases to the affect that stay orders are authorized because of the inherent power of all courts to conduct their proceedings in orderly manner. We invite this Court to a distinction here. We grant the fact that every court is entitled to control the proceedings before it, whether it's sitting in law or sitting in equity, and of course to grant continues -- continuances to delay its decision in any case, for a reasonable time, for a proper cause. And we don't think it makes any difference whether it delays its decision because it's curious to know what another tribunal in a similar case is going to do. We think it would have been perfectly proper in this case, for the District Court to say there is another case pending in the Louisiana Supreme Court, which is going to pass on this question, it is only proper that we await that determination, which will not control ours, but which may guide ours and which may under the Erie versus Tompkins case, insofar as it's applicable to this case, even control this case. But that is a very different thing from telling parties properly before the Court, we refuse to decide your case, go back to the State Court. We'll leave it up to the State Court to decide this issue at least in your controversy.
Felix Frankfurter: First thing is the disposition that was made by the District Judge, what you denominate a refusal to decide or does he just stays his hand and wait determination by the state court of these supposedly state issues.
Louis Fenner Claiborne: Your Honor --
Felix Frankfurter: (Inaudible)
Louis Fenner Claiborne: No Your Honor that's correct and he presumably would eventually pass on the federal issues involved if there are any and he would eventually pass on the question of a quantum, the amount of the award for condemnation. But he -- because there is no State Court action pending and no prospect of any, he presumably does intend to defer to the State Court decision on the interpretation of this Louisiana Act.
Felix Frankfurter: Would he have to defer to State Court's decisions on those issues, if in fact they had been in existence through decisions of your Supreme Court.
Louis Fenner Claiborne: Under Erie versus Tompkins Your Honor I think he would have to follow them and apply them, yes.
Hugo L. Black: Well you, as I gather from what you said, you agree that there are circumstances, exceptional circumstances on which the court should stay the issues and hand such state issues back for determination (Inaudible)
Louis Fenner Claiborne: That's correct You Honor, provided that it is done either in suit in equity, that is a refusal to enjoin state action, that I think a court of equity has the power to do.
Hugo L. Black: Is that (Inaudible)
Louis Fenner Claiborne: No it go further, it admits these exceptional cases in bankruptcy, admiralty and the cases where the preliminary agency determination, whether it's a state agency or a federal agency is necessary to the District Court's decision.
Hugo L. Black: (Inaudible) the case has indicated that if there are issues to be decided, there is a (Inaudible) consideration that the court does now refer those issues to state --
Louis Fenner Claiborne: Well Your Honor, there is no decision by this Court in which this type of case, that is an ordinary law case has -- and in which there is no statute involved which requires a preliminary determination, there is no decision by this Court authorizing such as stay of proceedings in this certain case.
Hugo L. Black: Very close to it is of course is the bankruptcy case if you can --
Louis Fenner Claiborne: That's correct.
Hugo L. Black: (Inaudible) I mean in (Inaudible)
Louis Fenner Claiborne: Yes which is essentially equitable.
Hugo L. Black: And I hope you will discuss, before you sit down (Inaudible) as suit, the court does have that power, why should they not do it? What are they arguing? What is the injury that would occur? Are you arguing that the statutory questions are so simple and so plain that they should be sent back because this is peculiarly a matter of state law I should think as to the powers (Inaudible) What I'd like you to do is discuss it on practical basis rather than on the legal basis of whether one case is (Inaudible)
Louis Fenner Claiborne: Well Your Honor, pre-emitting the question of power and getting simply to the second question presented, which is whether the Court in this particular instance abused, the District Court abused its discretion or not?
Hugo L. Black: (Inaudible) those words. What I would like to know is why shouldn't it have done it according to your view?
Louis Fenner Claiborne: Well for several reasons. First this suite unlike most of the suites in which this has -- this procedure has been authorized, does not in any way interfere with the administration of its own laws by the state. This is not a proceeding to enjoin a state official from doing something. It's not a proceeding to stop a pending state action. It's not a proceeding to enjoin the collection of a tax. There is no state action which is effected by this -- by a decision of the Federal District Court. It's simply one of applying a local law to local circumstances, which is that --
Hugo L. Black: Do you have a question of construction?
Louis Fenner Claiborne: Well, as to whether or not its difficult to apply this law, it's alleged that this is an old law since 1900 and that it has never been interpreted in the last 59 years, that appears to be true, though no one knows whether the District Courts of Louisiana have applied this law many times or few times, it has never been appealed, that's all we can say. However, it does not follow that because a law has not been interpreted, it's unclear. We see nothing and clear about the law. Furthermore we think it's easier for a court to determine the state law when there are no decisions then when there is a conflict, the confusion of decisions. Here we have a law which as Your Honor said on its face is quite clear. It reads very simply, the only pertinent thought of it is the first section which is quoted on Page 23 and 24 of the brief. There are no serious questions that arise under it. A lot has been manufactured as in every law case because they will be found or attempted to be found gaps, loopholes in the law. All of those attacks on this, on the application of this particular law to the particular facts of this case were answered by memorandum filed in the District Court. If this court is interested in the substance of those arguments, we'll be glad to furnish the court with copies.
Hugo L. Black: What are the practical injuries that will occur to the city of – here if this is sent back to state to interpret its law --
Louis Fenner Claiborne: Your Honor the -- now I have to go somewhere out of the record, well this much is in the record here the city files its suit in State Court expecting to have the matter determined there. The suit is removed to Federal Court, already one delay. This is a condemnation suit, one that normally is handled speedily, concluded quickly. It goes to the Federal Court, the judge takes a long time to decide whether he is going to decide it or not and finally decides that he is not going to decide which -- and tells us to go back to the State court and he tells us that we must obtain an interpretation by the Supreme Court of Louisiana of this particular statute before he will do another thing in the case.
Hugo L. Black: (Inaudible)
Louis Fenner Claiborne: Well, it's -- first it's time consuming. Secondly, it might be impossible because of this situation. If we can obtained a declaratory judgment, which is what the District Judge suggest in the State court, suppose the declaration is in our favor, we can't appeal from the favorable ruling the company's attitudes throughout this whole proceeding, and I don't blame them for it, is to delay this expropriation as long as possible. They quite legitimately would refuse to appeal it. This Louisiana Supreme Court would have no occasion to pass on it. Now this is what we would anticipate, this is what we would expect to happen since we have confidence in our courts.
Felix Frankfurter: (Inaudible) stand for that?
Louis Fenner Claiborne: No, but we would have to then go back to Judge Wright and ask him now is this sufficient for the judging this particular parish.
Hugo L. Black: Have you suggested to the opposing counsel at any time since they moved the case in there and they want federal judges instead of the State Court to pass on that case (Inaudible)
Louis Fenner Claiborne: No, Your Honor we have not, we --
Hugo L. Black: The reason, would it be much delay if they were demanded?
Louis Fenner Claiborne: Yes Your Honor because the question is now ripe for decision in the District Court assuming that the judgment of the Court of Appeal were (Inaudible). If we had to (Inaudible) remand the case back to the State Court, we have to go through the procedure of the appointment of viewers and then finally have an appeal to Louisiana Supreme Court.
Felix Frankfurter: May I ask you on the assumption that this came as a surprise to both sides that you are right – decide to have a State Court interpretation after he directed -- suggested or directed I suppose that State Court interpretation be sought, did your parish make the representations you now make here or the suggestions of all the difficulties in carrying out his -- desire to be informed rather than grope in the dark?
Louis Fenner Claiborne: No, Your Honor we --
Felix Frankfurter: This did come as a surprise to both of you? --
Louis Fenner Claiborne: It did, it did and --
Felix Frankfurter: And this came as an exercise of judicial discretion by a judge who is not I believe notorious (Inaudible)
Louis Fenner Claiborne: No, Your Honor, you are right.
Hugo L. Black: Who appealed?
Louis Fenner Claiborne: We appealed, the city appealed Your Honor, I believe simply on the question of whether the stay order was proper enough. Now to get back to the practical considerations Your Honor the city has had to float a bond issue anticipating this expropriation. It had to make commitments. Now I am going outside of the record in this respect, but it is understandable that this would be involved in an expropriation by a municipality necessarily involved. All of that has had to wait for over two years since this action was filed and the only reason for that delay has been because of the stay order entered in the District Court proceedings. Now whether we could go back to State Court itself is a question, quite outside of getting to Louisiana Supreme Court to pass on it, there is a question whether the District Court would accept the case. Our Declaratory Judgment Act which is quoted in appendix --
Hugo L. Black: Suppose you tried and they wouldn't do it, then you could go back to --
Louis Fenner Claiborne: Well, I suppose we have no alternative what to ask Judge Wright for a modification of his ruling or a withdrawal of it, I don't know how you can modify it to help us.
Hugo L. Black: I presume if you took it back there and the other side objected, go to the State Court, Federal Court wouldn't hesitate very long, and go ahead and try the case.
Felix Frankfurter: I suppose Mr. Monroe (Inaudible) we have more confidence than the average judge in the parish could (Inaudible)
Louis Fenner Claiborne: And quite understandably the company was delighted with the delay produced by the ruling. They have been fighting an expropriation. They are trying to say that the statute doesn't provide for it. There's no argument about the amount of money involved here. It's a question of whether the city is going to be able to take this property or not. Now I want to stress the distinction between --
Hugo L. Black: Is there any question about the ability of the city to pay?
Louis Fenner Claiborne: No Your Honor the money has already been appropriated through a bond issue and is set aside and is --
Felix Frankfurter: Then it's a question of power, isn't it?
Louis Fenner Claiborne: It's completely a question of power.
Hugo L. Black: Anything been said about a bond or an injunction?
Louis Fenner Claiborne: In –
Hugo L. Black: In (Inaudible) the city is being held up in gravy I should suppose the city might have raised some question about applying a bond, but (Inaudible)
Louis Fenner Claiborne: Well, yes the judge himself is responsible for the stay orders, the company is not.
Hugo L. Black: Well, that wouldn't have prevented you asking the judge --
Louis Fenner Claiborne: Well, it's not so much a matter of the bond, Your Honor. Here -- the situation is this in Thibodaux. We have a municipality which has extended its boundaries. In this new -- it furnishes electricity to the people in the old area. It naturally wants to extend its municipal system to the new area. It attempted to purchase and was unsuccessful. The only solution is to expropriate. In the meantime it's giving all the benefits of the city to these new residents and not getting it back from them the high electric rates which go to pay for the city service, so the city (Inaudible) money. On the other hand the money that it got from its residents through the bond issue has been accruing interest, but they built a substation which they can't use until such time this matter is decided. Now I wish to emphasize if I may the difference between this case and the two cases which have preceeded it on at least two grounds. First here there is no as distinguished in the first case, no constitutional issue involved. Any constitutional -- federal constitutional question, the only one that has been raised is the question of impairment of contract. Well now that question was decided by this court in 1848 in the West River Bridge versus Dix case. It was very clearly decided that a franchise was property and was subject to expropriation. A few years later in the Water-Supply Company it was decided that a contract between the city and a company to furnish all power -- or water in that case was likewise property subject to expropriation. There is no bonafide substantial federal constitutional question here. So that there is no excuse to saying we will differ passing on the constitutional question because it maybe eliminated by a State Court interpretation of its own law.
Felix Frankfurter: But in gamut of obligation (Inaudible) depends so much on the conception of allegedly conflicting state laws and it's the state law (Inaudible)
Louis Fenner Claiborne: Well, Your Honor --
Felix Frankfurter: -- strange, from my point of view, very strange construction as to what the state committed itself and they have got (Inaudible)
Louis Fenner Claiborne: Well, Your Honor here the only admitted claim of the company is a franchise which is a perfectly ordinary limited franchise to operate over the roads of the parish and put up their telephone poles and lines. Now there is no question whatever in the jurisprudence of this Court but that that type of franchise even in this case, a limited franchise not an exclusive one, is subject to expropriation. It was granted subject to the inherent right of the state and its municipality that delves into it to withdraw it and to inject that and say there's a constitutional question is possible in any case, but that is no excuse here for the refusal to decide the case. Now also as distinguished for most of the cases and as distinguished from the two cases previously argued, there is here no conflict between state action and federal action. This is not a suit to enjoin state officials of state action. It is not a proceeding in equity. It's a proceeding at law. It is not -- the jurisdiction of the court is based on diversity. Now, I know that federal jurisdiction should be a strong -- whether it's based on diversity or whether it's based on the existence of a federal question, but in a federal question case there is always the possibility that an interpretation of the state law involved will eliminate the federal question and therefore eliminate the federal jurisdiction while in a diversity case that possibility is impossible. It doesn't exist for the reason that diversity jurisdiction was granted to federal courts after all to decide state law questions not federal questions. Otherwise it would be unnecessary.
Potter Stewart: May I ask you and your Louisiana jurisprudence have a -- have the distinction between law and equity and suppose you don't, do you, it is not based on --
Louis Fenner Claiborne: No, we do not.
Potter Stewart: -- this law?
Louis Fenner Claiborne: I think Your Honor asked the question in connection with the Leiter case.
Potter Stewart: In the Leiter case and many of these cases where this whole doctrine has generally been referred to accurately or inaccurately as one of equitable abstention. There is no distinction in Louisiana between law and equity.
Louis Fenner Claiborne: Well I don't know that the distinction would have to be recognized by Louisiana law. This Court in applying the doctrine of abstention in the Leiter case certainly recognized that the suit involved equitable relief at least insofar has it enjoined the state court proceeding then in progress. Insofar as further more as Your Honor pointed out in the Leiter case there was a constitutional question which could be avoided under one interpretation of the statute and therefore it was appropriate to leave it to state courts to interpret it first.
William J. Brennan, Jr.: Well I gather that -- the key problem here is the power of the municipality under these several Louisiana statutes to do this, that is whether that has been delegated to the municipality this power --
Louis Fenner Claiborne: That is the problem Your Honor before the District Court.
William J. Brennan, Jr.: That's really the basic one, isn't it?
Louis Fenner Claiborne: That's right.
William J. Brennan, Jr.: Well now do you can consider it'd be pretty difficult job for the District Court to decide what the Louisiana law is in that regard?
Louis Fenner Claiborne: We have argued in our brief and I think I tried to explain that there is no real difficult problem of interpretation here. We have a Louisiana statute. The petition --
William J. Brennan, Jr.: What about the conflicts with later statutes which Mr. Monroe --
Louis Fenner Claiborne: They were -- there are no conflicts with later statutes. They were all arguments based on the Louisiana constitution. Now those are arguments all soft edged. They can be answered very readily. These constitutional provisions are not before this Court. The petitioner did not bother to bring them here.
Felix Frankfurter: (Inaudible)
Louis Fenner Claiborne: Judge Wright did not seem to find any difficulty with any question except this one which is that in 1900 so the Judge (Inaudible) without any evidence, the municipality -- the electric and other public utilities were largely located within the boundaries of the municipality and that therefore what this statute contemplated was the taking of that property within the city limits and that it was difficult to apply that old statute in visiting that situation to the modern situation where you have an electric company operating throughout the state.
Felix Frankfurter: (Inaudible)
Louis Fenner Claiborne: Unless we could find a – well, I think it would be safe to say that the city would have no claim to condemn the property if it goes, it must rely on statutory authority not being sovereign itself.
Potter Stewart: Is there any case in which, that you know of, that you run into in which the district judge on his own motion did what this judge did?
Louis Fenner Claiborne: Well Your Honor it's difficult to tell from the -- some of the decisions whether the judge did it on his own motion or not but I had found none in which it is clear that the judge did on his own motion and I am persuaded that Judge Wright did it in this case because he had been reversed – finally reversed in the Leiter case. In conclusion --
Hugo L. Black: I thought that the question really should be decided by the state Supreme Court. I would think that would be most likely (Inaudible) so I doubt if people decide (Inaudible)
Louis Fenner Claiborne: Well I think the judge was somewhat taken aback by the Leiter decision and quite understandably became less hesitant to decide state law questions thereafter.
Felix Frankfurter: (Inaudible) I inferred what you said that he was -- that there was question in his mind in the construction --
Louis Fenner Claiborne: Well --
Felix Frankfurter: -- a statute.
Louis Fenner Claiborne: Let me say this also, the judge's doubt was based partly on the opinion of the Attorney General which has been referred to, Louisiana Attorney General, which is cited in appendix in the brief of the petitioner. Now the judge, and that was our fault in argument for the District Court, did not see the clear flaw in that opinion, that opinion makes no reference whatever to this particular act. It is only to be assumed that the Attorney General or the Assistant Attorney General who signed the opinion did not find the statute when he advised another municipality in a similar case that it could not do what we are trying to do.
Felix Frankfurter: So he might, it is conceivable that even your Supreme Court might find might describe (Inaudible) that is conceivable isn't it?
Louis Fenner Claiborne: It is always conceivable, Your Honor but not very likely.
Felix Frankfurter: You mean you would never find a flaw in the decisions of lower court?
Louis Fenner Claiborne: I wouldn't say that Your Honor, but in the opinion goes far beyond any flaw that our Supreme Court (Inaudible) If I may conclude with this quotation from public utilities commission of Ohio versus United Fuel Gas company an opinion written for a unanimous -- for the majority by Mr. Justice Frankfurter pointing out the times when you do, when the times when you don't issue these stay orders. And in concluding in this particular case, Justice Frankfurter says the situation here is quite different from Railroad Commission versus Pullman Company, 312 U.S. 496, where the disposition of a doubtful question of local law might terminate the entire controversy and thus make it unnecessary to decide a substantial constitutional question considerations of equity justify a rule of abstention, but when as here, the litigation has already been in the Federal Court an inordinately long time which parenthetically is our situation, considerations of equity require that the litigation be brought to an end as quickly as possible. Decree in this case --
Hugo L. Black: We dissented in that case, but I assume what you are saying is I am bound by that now.
Louis Fenner Claiborne: (Inaudible)
Felix Frankfurter: -- I think the demand, I think your litigation is a model of these compared to that Ohio case.
Louis Fenner Claiborne: Well that was on the --
Felix Frankfurter: I forgotten (Inaudible)
Louis Fenner Claiborne: It is only --
Felix Frankfurter: If I remember that that really was a snail like process, wasn't it?
Louis Fenner Claiborne: Well it was only two years, Your Honor in the quotation I just read, it says more than two years but in our case it's also more than two years, that was all. But here we have a condemnation proceeding and none of the delay is our fault.
Felix Frankfurter: Neither is the other side, neither is the judge Wright, is it?
Louis Fenner Claiborne: No.
Felix Frankfurter: Except that -- except that they availed themselves of removal to which you know like the whole of (Inaudible) removal I take it properly from my point of view and now you are holding to it and they remove, and now they want to get the benefit of the state law --
Louis Fenner Claiborne: Your Honor --
Felix Frankfurter: (Inaudible)
Louis Fenner Claiborne: One last thought is that in considering this stay order, I think the Court should consider the reasonableness, assuming that it was proper at all in any sense to issue a stay order in such case. It was clearly improper to do so at the time and to the extent allowed. It should have been --
Hugo L. Black: You mean it did not require an action within a reasonable time?
Louis Fenner Claiborne: That is correct Your Honor, it's an indefinite order.
Hugo L. Black: What did it require?
Louis Fenner Claiborne: It doesn't. It leaves it up to the parties to wait 100 years. Thank you.
Earl Warren: Mr. Monroe we took your last minute or so, if you want a minute or so to --
J. Raburn Monroe: Thank you (Inaudible)
Earl Warren: -- you may do so.
J. Raburn Monroe: First about the Declaratory Judgment Act, this Court held in the Leiter case that the Declaratory Judgment Act was an adequate remedy and I think a fair reading of it will show that it is, it's a model to the Declaratory Judgment Act. The city cites a section which has to do with moot cases where the case is moot and the Court doesn't have to decide, well that's a usual rule, but I think a consideration of it will show that it's adequate.
Hugo L. Black: Have you asked for one yet?
J. Raburn Monroe: No, we have not.
Hugo L. Black: (Inaudible)
J. Raburn Monroe: The city has not asked for one, we are satisfied --
Hugo L. Black: (Inaudible)
J. Raburn Monroe: Well, I think it's rather up to the city, because they are bringing this condemnation to the city.
Hugo L. Black: Yes, but you are one that sent back to the same court --
J. Raburn Monroe: No, said Court, we didn't ask for that.
Hugo L. Black: Well you are the one (Inaudible)
J. Raburn Monroe: Well we are finally interested in having the Act construed by the state court. We are in that position now, yeah.
Felix Frankfurter: Could you bring a (Inaudible)
J. Raburn Monroe: I don't know whether we have right to bring it or not, because we are not offering to sell a property.
Tom C. Clark: Do you have a controversy?
J. Raburn Monroe: Well --
Tom C. Clark: There is a controversy and they are trying to condemn. You claim they can't (Inaudible) I should think on any declaratory judgment (Inaudible)
J. Raburn Monroe: Well, maybe we could file but I don't see any necessity for us filing and I --
Tom C. Clark: Well it seems to me like (Inaudible) and we got to pass under the circumstance of this case whether this should be done, and it is going to be more (Inaudible)
J. Raburn Monroe: Well, it was not our intention to make any delay in this case Mr. Justice Clark.
Felix Frankfurter: (Inaudible) It is your affirmative position that you will not.
J. Raburn Monroe: That's right it will --
Felix Frankfurter: You will not --
J. Raburn Monroe: We will state to the Court that --
Felix Frankfurter: You will delay the promotion of the earlier possible compliance that Judge Wright desire (Inaudible) what is controlling law.
J. Raburn Monroe: I will make that firm statement to this entire Court, yes.
Tom C. Clark: Does that go far enough to say that you will join (Inaudible) declaratory judgment.
J. Raburn Monroe: I don't see that the burden is on us Your Honor, but that --
Tom C. Clark: It's not a question on who the burden is on, it raises a quite different question.
J. Raburn Monroe: Well, the city is a moving party in this, but answering another question, if the lower court should decide in favor of the city we would appeal or the city would always have its remedy of going back to Judge Wright and say, the company will not appeal.
Felix Frankfurter: But here under the (Inaudible) judgment law, you couldn't go to the Supreme Court in the first instance?
J. Raburn Monroe: No it would have to go to the --
Felix Frankfurter: Therefore judge Wright said he would like know what the Supreme Court of Louisiana (Inaudible)
J. Raburn Monroe: Right.
Felix Frankfurter: Therefore, speaking for myself, (Inaudible) the decision of the Supreme Court (Inaudible)
J. Raburn Monroe: Yeah right.
Felix Frankfurter: On the other hand (Inaudible) in getting this rule which you did not solicit (Inaudible) In order to expose the state of the litigation, which is in the face where it is (Inaudible)
J. Raburn Monroe: I don't want to give the impression that I have any objection to starting a declaratory judgment. It never occurred to me to do so, because after all I have been in position of defendants (Inaudible)
Tom C. Clark: (Inaudible)
J. Raburn Monroe: - that's right.
Tom C. Clark: (Inaudible) this is merely a question of judgment, it seems to me like this time why the state court pass such construction, but unless you are willing to tell us you are going to (Inaudible)
J. Raburn Monroe: Well, I think I have stated my position, I am entirely willing to proceed in the state court, I am simply not going to delay on any proceedings, but I think it's in --
Tom C. Clark: What I understand by that, that you are not going to initiate in a state court (Inaudible)
J. Raburn Monroe: Well, I think I would do so if this Court said that was essential.
Felix Frankfurter: Is there any evidence controvert with the state, the Judge Wright was within administrative judicial discretion so (Inaudible) would the state have any reason for not -- for blocking this?
J. Raburn Monroe: I wouldn't think so, I would think if the city of Thibodaux would proceed immediately and I would --
Felix Frankfurter: I should think --
Tom C. Clark: (Inaudible) since do not know as I understand it, what the law applies (Inaudible)
Felix Frankfurter: That's right.
Tom C. Clark: And if you do not know which one they take up it for (Inaudible) and if it is to be sent back (Inaudible) I should think (Inaudible) should take steps immediately (Inaudible)


Warren E. Burger: -- next in 71-895, National Labor Relations Board against International Van Lines. Mr. Nash, I think you may proceed now.
Peter G. Nash: Mr. Chief Justice, may it please the Court. This case is here on certiorari to the Ninth Circuit which denied enforcement of provisions of the National Labor Relations Board order requiring -- excuse me, requiring the reinstatement of four employees who were engaged in a strike when they were discharged by their employer. The question presented here concerns the protection which the National Labor Relations Act affords to employees engaged in a strike against their employer for an economic objective, who are discharged for that activity before they have been permanently replaced by that employer. Thus do, such strikers have an unconditional right to reinstatement to their former jobs as the Board found or is that right to reinstatement lost if the employer can show substantial and legitimate business justifications for refusing to reinstate them as the court below found. The facts may be briefly summarized as follows. In August 1967, the Teamsters Union commenced an organizing campaign amongst the employees of 10 to 11 moving and storage companies within the Santa Maria, California area including the respondent, International Van Lines. On September 21st, the Union that had obtained authorization cards from five of six of International's employees filed a representation petition with the National Labor Relations Board, a copy of which was unserved upon the company and received by it on September 25. A week later on October 2nd and 3rd, this Union held meetings at which the Union representatives told the employees that certain companies being organized, including International had withdrawn their consent for an NLRB election. There was also some discussion at that time about the discharge of employees of other companies other than -- than International. In any event, the assembled employees decided to strike and did so on October 4th. Three of International's employees, Dicus, Manuel Vasquez, and Mr. Casillas refused to cross the picket line and the fourth, Robert Vasquez did not report for work that day because of the picket line. The president of International, Robert McEwan obtained temporary replacements the next day, October 5th, from his brother who had a similar moving and storage company within the area and sent telegrams to Manuel and Robert Vasquez and Dicus advising them that they had been permanently replaced. Seven days later, on October 12, the Union filed charges with the National Labor Relations Board alleging that Manuel and Robert Vasquez, Casillas, and Dicus had all been discriminatorily discharged in violation of the National Labor Relations Act. Between October 8th and October 28th, Dicus and Manuel Vasquez each asked the president of the company, Mr. McEwan, who was then hospitalized whether each was going to have a job and neither received any commitment. Dicus had the same experience shortly after Mr. McEwan left the hospital on October 28th. In the latter part of November, Casillas who had prior to that time, a casual worker, asked Mr. McEwan to put him back on the availability list for call. He received no particular commitment and he has not or had not at the time of the hearing been recalled to work. On October 12th, Manuel and Robert Vasquez and Dicus asked Mr. McEwan to be reinstated and were refused. The strike continued on at least through the hearing which commenced on April 3, 1968. The Board found that the company's employees were engaged in a protected strike to compel a consent election and that even if the objected strike was to compel immediate recognition by the company, of the Union, it was a protected strike. Further the Board found that Manuel and Robert Vasquez and Dicus were discharged by the telegram sent on October 5th for as a matter of fact, they had not been permanently replaced at that time. And further, that all four employees which includes -- included Casillas, the casual employee, were refused reinstatement upon their unconditional offers or applications for reinstatement which further violated Sections 8 (a) (3) and (1) of the National Labor Relations Act. The Board ordered reinstatement of all four of these employees even if that reinstatement required the discharge of strike replacements which may or may not had been hired since the time -- since the time of the discharge and the refusal of reinstatement of these employees. The Ninth Circuit found that all four of the employees have been discharged on October 5 for engaging in a protected strike which sought a consent election, but none had been permanently replaced up until that time and that as such, those discharges violated Sections 8 (a) (1) and (3) of the National Labor Relations Act. The Court further found that the three of the strikers excluding Casillas at this point, the casual, made unconditional request for reinstatement which were denied. And that Casillas had made a similar request, but because he was a casual employee, was not clear to the Ninth Circuit, whether in fact he had been denied reinstatement or whether there just had not yet been an opportunity for the employer to call him back to work. The Court remanded that latter -- that latter execution to the Board. However, despite these findings and despite an assumption by the Ninth Circuit, the employees who struck after the discharge of these employees, who continued their strike, might in fact be properly considered to be unfair labor practice strikers. The Court held that the discharge strikers remained economic strikers, finding that to be their status at the time they were in fact discharged. Accordingly, although these employees had not been replaced when fired, the Court found that they were not entitled to reinstatement if the employer had a legitimate and substantial business justification for refusing to reinstate them which includes the hiring of permanent replacement since the -- since their discharge. The Court remanded the case to the Board to make this determination. In argument, I think it might be helpful to discuss initially some of the general principles involved in this area which are not, in my judgment, disputed. Thus, there is no dispute between the parties concerning the validity of the consistently recognized distinction between the reinstatement rights of unfair labor practice strikers and economic strikers. Unfair labor practice strikers are those who strike activity, either begins and or is prolonged or aggravated of -- by reaction against employer of unfair labor practices and economic strikers are generally everybody else. Economic strikers are entitled to reinstatement at the end of their strike unless the employer can show some substantial and a legitimate business justification for failing to reinstate them such as the continuing presence of permanent replacers -- replacements in their jobs. The theory here is that although the employer may not discriminate against those strikers, it does have a legitimate interest in operating his business during the strike and may in the balancing of the interest and equities involved obtain permanent replacements for those strikers. Unfair labor practice strikers on the other hand are entitled to unconditional reinstatement regardless of the employer's business justification for not reinstating them including the presence of permanent replacements. The theory here is that such strikers are acting to protect themselves against the illegal acts of the employer which violate the Act. And although the employer can and has a legitimate interest in operating his business during the strike, he may not penalize his employees by permanently replacing them for the action which they've taken really in response to his transgression. Further elaborating on the foregoing, it's also clear that a strike that starts as an economic strike may in fact become an unfair labor practice strike, thus conferring the economic strikers and the unfair labor practice strikers where the employer's commission of an unfair labor practice has the effect of prolonging or aggravating a strike. And finally and apart from the discussion of unfair labor practice and economic strike of that distinction, I think it is also clear that the discharge of economic strikers for strike absences before they have been permanently replaced is discrimination and violates Sections 8 (a) (3) and (1) of the National Labor Relations Act. As I say, up to this point, I think there is no disagreement between the respondent, the petitioner nor indeed by the court below.
Speaker: Is that true even though or is that what this case is about even though a person who is fired before he is permanently replaced is -- what if he is fired but then permanently replaced?
Peter G. Nash: That -- that is what this case is about and if that is a protected -- protected strike, then in fact he has under all previous decisions as the --
Speaker: He does -- he does seem to be an employee until he is permanently replaced, is that it?
Peter G. Nash: That's correct and as a matter of fact he does -- do not necessarily cease to be an employee now.
Speaker: (Voice Overlap) -- terminate him is by a replacement?
Peter G. Nash: By permanent replacement, that -- that is correct. He may not fire that employee and if he fires that economic striker, he fires the economic striker prior to the time that that striker has been replaced, then that striker has the unconditional right to return to his job.
Speaker: If he replaces him permanently, then he may say to him, “you're fired”?
Peter G. Nash: Well that issue was not involved in this particular case and that gets into the questions of the Fleetwood and Laidlaw cases which extend additional -- additional rights to economic strikers, even replaced economic strikers, the right to go on a seniority register, if you will, and be called back other than discriminating against them by hiring someone in their place later on.
Speaker: If they -- if they never really completely terminate the right, is that total replacement?
Peter G. Nash: The full extent of the Fleetwood and Laidlaw doctrine to the Board, I don't think had been fully explicated or examined either by -- by this Court or by the Board and I -- that issue however is not involved in this particular case.
William H. Rehnquist: Well, didn't Mackay intimate that once a guy was replaced, that was pretty well the end of it if he was legitimately replaced under the doctrine you established?
Peter G. Nash: Yes, but that -- that proceeded by -- by some number of years. The Fleetwood decision of this Court and the ultimate Laidlaw decision of the Board which gives meaning I think to the -- to the Fleetwood.
William H. Rehnquist: You say Fleetwood then at least impart overruled Mackay?
Peter G. Nash: To the extent that Mackay indicated that perhaps an employee could be discharged and his employment status completely eliminated or terminated by -- by reasons of his replacement to the extent of the dicta, what I would call the dicta in that case is different from Fleetwood, yes. I think it's implicitly an extension of rights. The court below, however, did find in this case that all -- all four of the strikers were discharged before they had been permanent -- permanently replaced, they could not, as a matter of law require any greater reinstatement rights than those of economic strikers, for that was a status that they had held at the time of their discharge. And this is true in the Ninth Circuit's view even if those discharges converted the strike in question and the strikers, the non-discharge strikers in the unfair -- into an unfair labor practice strike and then into an unfair labor practice group of strikers. I think that the Court's position is erroneous for at least two reasons. First, wholly apart from whether the four dischargees became unfair labor practice strikers are not, the respondent, because of its action and unlawfully discharging them has an unconditional obligation to reinstate them. A classic remedy for an unlawful discharge of an employee is unconditional reinstatement for that's the best way to restore the status quo ante. This holds true whether the dischargee was unlawfully discharged from active duty or whether he's unlawfully discharged from a picket line before he had been replaced. In the latter case, the striker not having been replaced at that time -- at the time of his wrongful discharge had an unconditional right to return to work. He was terminated from that position and in order to replace and put things back into status quo, that wrongfully terminated striker should be in the same position that he was in before he was discharged which is the position of an economic striker with an unconditional ability to return. Thus, the circuits have uniformly held that without regard to whether the strikes subsequently takes on the nature of a protest against an employer's unfair labor practice, that that employer may not lawfully terminate economic strikers prior to the time they've been validly replaced and that the appropriate remedy therefore is reinstatement even if that requires the displacement of post-firing replacements. Just as an employer may not deny reinstatement to an employee unlawfully discharged while he is actively working on the grounds that he subsequently replaced that discharged employee, so too a striking employee can have no less protection. To hold otherwise, I think would be to recognize a distinction between non-strike concerted activities protected by Section 7 on the National Labor Relations Act, and strike activities similarly protected. Congress did not authorize such a distinction to be made and rightly so or no one can deny that the right to legally strike is one of the paramount protected activities under the National Labor Relations Act and indeed Congress so recognized specifically in passing Section 13 of that Act. Secondly, and contrary to the court below, the Board could properly find that by continuing to strike after their unlawful discharge, the four dischargees in this case became unfair labor practice strikers. It is I submit a reasonable inference for the Board to make that the dischargees had added to their protest against their employer, their unlawful discharge. And further that the unfair labor practice of firing a striker has such an effect upon a strike is to tend to prolong it. At the very least, the Board in the exercise of its expertise may, I submit, properly conclude that the discriminatory and unlawful discharge of strikers is so likely to have an impact upon the strike itself that such an act by the employer shifts the burden to that employer to show that the strike was not in fact impacted by the illegal discharges.
Harry A. Blackmun: Well, Mr. Nash --
Peter G. Nash: Yes sir.
Harry A. Blackmun: -- what do you think the record shows here as to that detail, that it or it did not have an effect on the prolongation of the strike?
Peter G. Nash: That is the second part of the argument here and I believe that the record shows quite clearly that it did have an effect upon the prolongation of the strike and certainly upon the prolongation of the strike by these four employees, who in fact they unconditionally asked to be reinstated were denied that request and continued on strike and that was back in December of 1967 and continued as strikers at least on through April 3, 1968. So that I think without -- without question at least as to those four particular employees, the strike -- strike continued well on as it would have had their original grievance been resolved.
Harry A. Blackmun: Incidentally now that I have you interrupted. Does the record show whether they knew why they were striking?
Peter G. Nash: The record indicates that some of the employees -- some of these four employees did know -- one of them at least was present at the meeting with the Union of which the employers believed withdrawal of his consent to a Board election was one of the circumstances that brought to the strike.
William H. Rehnquist: Well you hear -- you say that the Board justified in making these findings and I take it your complaint that the Court of Appeals didn't give full weight to them. What's this -- what's the question before us then under Universal Camera and Pittsburgh Steamship? We don't simply sit in the place of the Court of Appeals and say, “Would we have upheld the Board?” Do we?
Peter G. Nash: Well, no. The Court of Appeals merely said that even assuming that this is an unfair -- that this now becomes an unfair labor practice strike after you've discharged these four employees, because the four employees were themselves, economic strikers at the time they are discharged, there was no way as a matter of law, no matter what the Board may show, as a matter of fact, that those four people can ever become other than economic strikers because that's the status that they held at the time that they were discharged. And my complaint that I bring to you today is that the Ninth Circuit is as wrong as it can be in making that kind of judgment as a matter of law, they are wrong. That not only do those employees under the facts in this case become unfair labor practice strikers with full rights to reinstatement, but furthermore, even if they are economic strikers at the -- and remain economic strikers, they are fired economic strikers who at the time they were fired, had not been replaced by anyone else and thus must be -- and thus had the unconditional right to return to work on that day because they hadn't been replaced and that the appropriate remedy for that situation is to put them back into the situation they were in when they were discharged which is an unconditional right to reinstatement regardless of what happened after the day that they were discharged.
Warren E. Burger: Does it make any difference as to the time when the claimed unfair labor practice occurred in relation to the time of their conversion from an economic -- being economic strikers to unfair labor practice strikers?
Peter G. Nash: Oh yes, I think --
Warren E. Burger: But they were replaced before any unfair labor practice occurred.
Peter G. Nash: They were permanently replaced before an unfair labor practice occurred. That is -- it was not presented in this case but in my judgment, they would then be permanently replaced economic strikers who would have -- would not have the unconditional right to return.
Warren E. Burger: So their -- their conversion, if we can call it that, must relate to an unfair labor practice which had existed while they were economic strikers, is that what you're telling us?
Peter G. Nash: If -- if there is in fact to be a conversion rather than the strike starting it initially as an unfair labor -- yes, there must be an unfair labor practice and then there becomes -- they become unfair labor practice strikers.
Warren E. Burger: Then -- in effect then could it be said that they were striking in a dual capacity from the outset here?
Peter G. Nash: No, because they weren't fired until the second day of the strike. Initially, they could not have been obviously objecting to their discharge because they hadn't yet been discharged.
Warren E. Burger: Yes, but suppose there was some other kind of an unfair labor practice.
Peter G. Nash: Yes, they could very well have been dual purpose strikers in which event they would be unfair labor practice strikers unless the employer can come forward I believe with compelling evidence to disentangle the morass that he himself has caused by committing unfair labor practices and shown as a matter of fact that the unfair labor practice had nothing to do with the strike or the prolongation of the strike.
Speaker: Mr. Nash, in answering the Chief Justice, you suggested and hypothetically gave that had they been replaced by -- before the discharge, then that would be it. There would be no unfair labor practice and they'd be out.
Peter G. Nash: Had they been permanently replaced?
Speaker: Yes, they'd be out.
Peter G. Nash: Yes, they would be -- at the time they were fired.
Speaker: Yes. My question, how -- how is that consistent with the answer you gave Mr. Justice Rehnquist before as to the effect of Fleetwood and this Board case on Mackay?
Peter G. Nash: That is inconsistent with the answer I gave to Mr. Justice Rehnquist to this extent, when I mean they're out, I mean they are then replaced economic strikers at the time that they are fired and they would be returned to the position that replaced economic strikers which would mean that they don't have the unconditional right to return to work but may have the subsequent Fleetwood and Laidlaw rights which would be the rights to come back --
Speaker: Seniority list or something.
Peter G. Nash: Right, when all things in fact do -- do occur.
Harry A. Blackmun: And your position (Inaudible) on chronology, if on which happens first really. The discharge or the unfair or the permanent replacement if one happens the day before the other, one result ensues, it's just the reverse by one day.
Peter G. Nash: The employer -- yes I think strictly speaking, yes. The employer has a right during an economic strike to permanently replace striker. And to the extent that the employer does that, he commits no violation of the National Labor Relations Act. If the next day he --
Speaker: He commits it by -- no violation by what? By not employing the -- reemploying the striker?
Peter G. Nash: Well first of all he doesn't commit it by employing a permanent replacement.
Speaker: Right.
Peter G. Nash: Now, if on the next day he fires a striker even though he's been replaced, he commits a violation of the Act. He violates Section 8 (a) (3) as discriminatorily discharges a striker. He has taken away whatever rights Fleetwood and Laidlaw may give him. At the time, let's assume no discharge on the second day, the strike ends and the employees says -- and the strikers says, “I now want to come back to work.” The employer then says, “You have no unconditional right to return to work because you were replaced, permanently replaced. You'll go on a Laidlaw list if you will and when an opening occurs I will be -- I will be calling you under those circumstances.” And although that issue is not present in this case, there would be no violation in the refusal to reinstate at that point.
Speaker: (Inaudible)
Peter G. Nash: Yes sir.
Speaker: Is it really as simple as chronology Mr. Justice Blackmun referred to the discharge happening on one day and replacement being employed the next day. Suppose it went that of an hour or ten minutes, any principles involved or does it just depend on whether the employer were smart enough to say, “I hire you to replace John Smith” and then advices John Smith, “You are fired” or whether he reverses that process?
Peter G. Nash: I -- I don't know of any case on the books but in a different capacity as general counsel, as an investigator and prosecutor of unfair labor practices, I would look carefully of that set of events that you just told to see if in fact that that was not a ruse and what was not in fact intended was a discharge before replacement in those circumstances. And there might well -- very well under the facts of that case be found to be a violation. But given a clean permanent replacement and subsequently refusal to reinstate, there would not in my judgment be a violation.
Warren E. Burger: But that would be entirely a factual determination, wouldn't it?
Peter G. Nash: Yes.
Warren E. Burger: On a case-by-case basis. You couldn't have a general rule about that, could you? Except that subterfuge -- to the extent that it'd be a principle that subterfuge would be penetrated.
Peter G. Nash: Right, I think the only general principle is that you can't discriminate against people because they exercise their rights under Section 7 of the Act and that whether there's discrimination or not obviously involves a factual question on each case. I think the problem -- the problem with this case and the problem created by this case can best -- can best be put in focus by -- by a practical hypothetical. Under the circumstances now allowed by the Ninth Circuit an employer during an economic strike fire all of his economic strikers. At that point if the Ninth Circuit's decision stood, those employees would have no unconditional right to return to work unless they immediately came in and said to the employer, “We want to come back to work unconditionally at this point”, before they've been permanently replaced. That adds an additional risk, the risk of an unfair -- the risk of an economic striker which I don't think is justified in law nor by any of the decisions prior to the time that the Ninth Circuit came down with this decision. It adds an additional risk that the employees must immediately come back and the strikers must immediately come back in and say, “We give up our strike. We want to come back to work.” A risk that they don't have as economic strikers, for although they might be permanently replaced, the day of that replacement has not come to their attention immediately, they don't feel that kind of compunction to give up their strike and I submit to allow the Ninth Circuit's decision to stand in essence means that an employer can break strikes by violating the Act. Thank you very much. I'll save the rest of my time if I may for rebuttal.
Warren E. Burger: Thank you Mr. Nash. Mr. Kirshman.
Norman H. Kirshman: Mr. Chief Justice, may it please the Court. I think the essence of the case before you and the holding of the Ninth Circuit is very simple. The Ninth Circuit has held for a rule of evidence. The Ninth Circuit has said, “We will not call an automatic conversion of an economic striker to an unfair labor practice striker without substantial evidence that the unlawful act of the employer has prolonged the strike.” And I refer the Court to page 34 of our brief on the merits holding from the Court. The Court points out in the middle of the page that the Board has made a finding -- the Board has argued that the employer's unfair labor practices substantially prolonged the strike were a significant factor in the strike. And then the Court concludes by saying the Board adduces no evidence in support of this necessary effect. We submit that the Ninth Circuit has done no more and no less than say that it will not accept a per se conversion. Because the essence of an unfair labor practice striker is an individual who is on strike protesting the unfair labor practice. It's a question of cause and effect. And cause and effect must necessarily require evidence. Now the Ninth Circuit is not alone with all due respect to the General Counsel, the Ninth Circuit is in the company of the Second Circuit, and the Third Circuit, and the Seventh Circuit, in the Thompson case and the Frick case, and in the Jackson Printing. Each case the Circuits recognized the cause and effect situation and required evidence. I think that the Board has the burden if it is intending to impose a severe restriction of unconditional reinstatement. Approving that the conduct of the employer prolonged the strike and the court below merely said that the economic strikers were on strike for a prior complaint that there was no unfair labor practice strike at the time they went on strike. And that the employer's conduct though unlawful may or may not have had a bearing under a continued picket line conduct. And I respectfully refer the Court to the fact that the record shows that with the exception of the December 12 request for reinstatement all other request as late as April, a few days before the hearing in the case were predicated and conditioned upon the signing by the employer of a contract, and not any contract but a specific contract.
Speaker: Were these employees (Inaudible)
Norman H. Kirshman: The finding of the Board was unclear on that issue, Sir. And that -- and for that reason, the Court remanded. The Court said that they were not -- no, may I correct myself. The Court said they were not permanently replaced at the time of the unlawful discharge. But the Court said that the record was unclear as to whether they were permanently replaced before they applied for reinstatement. And that was one of the issues upon which the Board -- which the Court remanded to the Board for further proceedings to determine whether there was substantial business justifications.
Speaker: How could an employer -- how could an employer refuse to reinstate a striker if he hadn't been permanently replaced?
Norman H. Kirshman: There were temporary replacements hired. He cannot legally refuse to reinstatement if they have not been permanently replaced. But the Court did not find and the Board did not make it clear as to what the situation was when the employees applied for reinstatement. There was the two issues, one was --
Speaker: What -- what difference could it make when they apply it, if they hadn't been permanently replaced?
Norman H. Kirshman: If they were economic strikers, they were only entitled to reinstatement if they had not been permanently replaced.
Speaker: Well, until they've been permanently replaced they've got a right to reinstatement.
Norman H. Kirshman: That's -- so far it's true.
Speaker: Are these people in this case entitled to reinstatement absent a finding if having them permanently replaced?
Norman H. Kirshman: Because the record was not clear that at the time they applied for reinstatement --
Speaker: Well, we can't bring up another (Inaudible), why should we bring up an issue assuming they had been replaced, what would the law be?
Norman H. Kirshman: Assuming they had been --
Speaker: Why do we do give that issue up if there hasn't been a finding on the facts that they've been permanently replaced?
Norman H. Kirshman: The Court remanded it on that issue, Sir.
Speaker: Well --
Norman H. Kirshman: At -- at the time they applied for reinstatement, the Court held that when they were discharged, they had not been replaced.
Speaker: Well did the employer make any effort to prove that they hadn't been permanently replaced?
Norman H. Kirshman: The employer put in payroll record showing that certain employees were on the payroll.
Speaker: But did it take -- did the employer take the position if they had been permanently replaced?
Norman H. Kirshman: I cannot answer that Your Honor. I don't think that the lack of --
Speaker: I'm just wondering on the absence of a finding if there had been. I gather it's conceded they were economic strikers from the beginning -- at the beginning.
Norman H. Kirshman: Yes, Your Honor.
Speaker: Well if that's so, isn't the rule on MacKay that -- then at the time of application they're entitled to their jobs back unless they've been permanently replaced. Is it the employer's burden to show that they had been if he is to withstand the application of that principle?
Norman H. Kirshman: Well, we submit that the employer does not -- has the burden of showing that they had not been permanently replaced, yes, Your Honor.
Warren E. Burger: But the telegram --
Norman H. Kirshman: That they have been permanently replaced.
Warren E. Burger: The telegrams that were sent to them said, “You are being permanently -- you are being replaced.” They were speaking of the future time, so that -- unless they did something after that to clarify it, we have a very muddy picture, haven't we?
Norman H. Kirshman: That's exactly the picture that the Board certainly had before --
Warren E. Burger: (Voice Overlap) --
Speaker: The Board takes the attitude and makes the position that doesn't make any difference whether they were permanently replaced as long as they were fired beforehand. You don't need a finding of that (Voice Overlap).
Norman H. Kirshman: That's the position of the Board Your Honor. And the position of the Board is that that result occurs regardless of the evidence. Whether or not there is any evidence. And as I said, we submit that the Second, Third and Seventh Circuits provide for a more rational view of the case. I would like to proceed at this point to an issue that may or may be before the Court but respondent has included it in it's brief and in the answer of which we feel was in the nature of a cross petition. And that question is fairly comprised within the question of reinstatement and threshold to it. Before you can reach the question of reinstatement, we must have a finding of unlawful conduct in the first place. And we believe that in our supplemental brief which was filed with the Court that the 90-day period has not run from a jurisdictional standpoint and that the Court may consider this issue if it feels that the issue is worthy of consideration. As we have discussed, the decision of the Ninth Circuit was not a final decree. The employer was under no obligation to do anything at that point. The case was sent to the Board for the taking of further evidence. Therefore, we feel that there was no final judgment for purposes of the 90-day period in respect to a petition for a certiorari. The issue that we would like to address ourselves to is whether a strike to force the employer to consent to an election in effect to force the employer to forego his access to the Board is protected activity. And we've set out in our brief the legislative history and the actual wording of the statute and the regulations. And we conclude with all humility that the employer has an absolute right to his hearing in a representation case. This is a statutory right. There was a disagreement in the Congress in 1947 as to whether there should be provisions for pre-election -- for pre-hearing elections and the majority and the Congress determined that the hearing was important enough so that it would set forth in mandatory terms. The access to the Board for the hearing is critical. It provides, one, a question into the jurisdiction of the Board in the first instance, the appropriateness of the bargaining unit eligibility to vote in collateral issues, a strike to force the employee to forego this hearing we submit is a strike in derogation of the orderly process of the Board. It's an invitation to a labor union to stand up and say, “Well, we will strike unless you forego your right to have the Regional Director and the Board determine whether this election should be held in the first place. And if it is held, who should vote?” We don't believe that this is in the interest of the National Labor Policy. We don't believe it's consistent with the spirit of the Boy's Markets case. We don't believe it's consistent with those cases that indicate that arbitration is preferable to a strike or a muscle-to-muscle confrontation.
Speaker: Is this an argument that in fact this was an unfair labor practice strike in part of the Union?
Norman H. Kirshman: Yes, Your Honor.
Speaker: Yes.
Norman H. Kirshman: We believe further that to compound this problem, this particular strike had a dual facet. The Board found ultimately that it was a strike to force the consent and also could have been a strike for recognition. I already covered the question of a strike to force a consent. In respect to a strike to force an immediate recognition, I submit to the Court that the failure by the Union to notify the employer in any manner other than by receipt from the employer -- by the employer from the Board of the petition itself and the failure by the Union to comply with the Boards regulations in Section (9) (c) (4) of the Act which requires an allegation in the petition of a demand for recognition and a refusal, that this basic jurisdictional defect in that petition rendered the petition a nullity. I think that in the context of the Union's activity here in fabricating and this is a finding by the trial examiner which was not disturbed by the Board or the Court. That the Union have fabricated a labor dispute, willfully fabricated a dispute on a non-existent grievance that in the context of that fabrication, the failure to allege in the petition that there was a demand -- that there was a refusal renders that petition fatally defective. And the picketing which continued for more than 30 days was such a fatally defective petition. And our opinion rendered that strike a violation of Section (8) (b) (7) of the Act. And the authorities are quite clear that an employer has no obligation to reinstate any striker who strikes in violation of (8) (b) (7) of the Act. I think that we have a basic question before the Court on the consent and/or recognition issues. And that question is, “Do the processes of the Board prevail? Are they available to the employer in the same fashion that they are available to the employees?” Is the mandatory language of Congress and Congress didn't say it may, it said shout. Is the language of the implementing regulations which says that upon the filing of a petition in accordance with the rules and regulations prescribed by the Board, are they not setup as a condition proceeding to the processing of a valid petition? Or on the alternative, do we say that the right to strike is so powerful, is so important and we do not undermine that right? It is powerful. It is important. But where is the balance? Do we invite Labor to ignore the Board, not on peripheral issues where on a basic due process -- due process issue, the question of the employer's right to a hearing, I submit that that is what the Court is faced with on the underlying threshold issues which in respondent's view are far more significant, are far more important than the rule of evidence which has been promulgated by the court below. We can live with a rule of evidence. A rule of evidence can be interpreted very strictly by the Board. They give the Board clearly said in this case that the company failed to sustain its burden of proof if it has such a burden that the unfair labor practices did not prolong the strike, I might be able to accept that as a lawyer, but the Board didn't say that. The Board urges an automatic per se conversion theory. Notwithstanding the evidence, notwithstanding whether the unfair labor practice occurs one day before the strike, six months before the strike, six months after the strike. A per se rule and I believe in the law, especially in the law of labor relations, per se rules are very dangerous. Much in the practice of labor law and much in our functioning here in labor relations is not so much what the employer does. It's how he says what he does. And for example, if an employer says, “I am going to discharge you.” Or, “I'm going to replace you.” There are many -- there are entirely different connotations that the Board could place upon this semantical difference. Basically, these are our three issues, the consent -- a strike to force a consent is not protected activity, and the case decided by the Board do not support that properly. (Inaudible) Your Honors, I would like to comment briefly on Washington Aluminum which is cited by the Board as this Court‘s authority for the fact of a strike for immediate recognition or any protest without notice is still protected activity. I refer the Court to the fact that in Washington Aluminum, there was no labor union. The employees were not represented and the employees had instant sit down strike based upon working conditions, a cold shot. That is a far cry from International Van where there was a labor union, a petition filed with the Board, and a fabricated reason for the strike. I submit that as a further argument for the unprotected nature of these activities is that there was no labor dispute. And I'm well aware of the Mackay language which talks about the wisdom or unwisdom of the employee's activities in going on strike.
Speaker: Are you arguing that (Inaudible)
Norman H. Kirshman: I am arguing that the Court of Appeals, Your Honor, should have --
Speaker: You didn't cross petition?
Norman H. Kirshman: We believe we did, Your Honor. Our answer was in the nature of a cross petition and we believe that it was timely and we believe that there is such plain evidence in this record.
Speaker: (Inaudible)
Norman H. Kirshman: We feel it quite possibly, Your Honor that we -- that we are entitled to more than we received below because our answer was --
Speaker: (Inaudible)
Norman H. Kirshman: I think we do sir, with all due respect. Our answer was filed raising new issues. And although it didn't label itself as a cross petition, I think that the fact that we attempted to raise new issues if we are not jurisdictionally untimely.
Speaker: Well the way you -- the way you phrase it was the addition of the question presented by the Board, respondent -- respondent respectfully submits the following additional question.
Norman H. Kirshman: Yes, Your Honor.
Speaker: But as Mr. Justice White asked really, what you wanted was a denial of enforcement of the Board's order.
Norman H. Kirshman: (Inaudible)
Speaker: What you ended up with was a remand to the Board for further proceedings.
Norman H. Kirshman: That's correct Your Honor. But we got the remand on the -- on the issue that we were not as concerned about.
Speaker: Well that's just it. That's why I wonder whether without -- I mean maybe it sounds rather technical, but ordinarily if you want to raise an issue which gives you a different judgment then you're here to defend, you have to cross petition, don't you?
Norman H. Kirshman: But we believe that the doctrine --
Speaker: You think you have (Voice Overlap) --
Norman H. Kirshman: Yes, Your Honor. And further, Your Honor, we believe under the Court's rule 23 (1) (c), if the Court believes that the issues are so interrelated that you can't reach a question of damages which is the question of remedy without reaching the question of liability, that perhaps the Court in its discretion could take it.
Speaker: Did you deliberately choose the form you did rather than cross petition?
Norman H. Kirshman: No, Your Honor. I must confess this is my first trip before the Court and I fumbled somewhat. I -- I would like to comment just briefly on one more issue and that is the question of the labor dispute whether or not there was a labor dispute. I believe that under the facts in this case, the one element of Mackay which talks about the mistaken judgment of the employees or the wisdom or unwisdom of going on strike for a reason which is not correct implies good faith. I think when you -- when you examine a willful fabrication of a reason to go on strike, the element of a good faith mistake disappears and we open the door to permitting employees or a union -- or a union representing employees to fashion a labor dispute out of thin air anytime they want to bring the conduct within the purview of the Act. And once again, I believe that Section 2 of the Act says quite clearly or at least implies that the Board has no jurisdiction to inquire into a dispute which is not a labor dispute. And there again in my attempt to bootstrap, I would believe that this Court could inquire into a jurisdictional error even if not raised in the court below. But we did raise these issues at trial. They were commented upon by the trial examiner, and I believe that they have merit and should be considered by the Court. Thank you.
Warren E. Burger: Thank you Mr. Kirshman. Mr. Nash do you have anything further? Thank you gentleman. The case is submitted.