Opinion ID: 1478664
Heading Depth: 1
Heading Rank: 3

Heading: Fraud and Secondary Boycott.

Text: There is no proof in the record that any of the fraudulent acts or threats charged against the appellees, or any of the appellees' actions relied on by appellants as threatening an illegal secondary boycott of the garment companies' customers, were accompanied by violence or threats of violence. Appellants were, therefore, not under the burden in this branch of the action placed upon them by section 7(e) of the Norris-LaGuardia Act. See Wilson & Co. v. Birl, supra 105 F.2d at page 950. Appellants were, however, by section 7(a) of the Act required to prove, and the District Court was required to find, before an injunction against fraud or secondary boycott could issue, that acts constituting the offenses charged had been committed by appellees or their agents with appellees' knowledge and would be continued, or that such acts had been threatened and would be committed unless restrained. The trial court found that no present conspiracy existed among the appellees to compel the appellants to yield to the demands of the International Ladies Garment Workers Union by means of fraud or through an illegal secondary boycott of the retail stores handling the product of the Donnelly Garment Company. We can not say that this finding of fact is clearly erroneous. On the question of fraud, the evidence clearly established that one of the appellees, Meyer Perlstein, while acting as regional director of the International in charge of its campaign for the organization of appellants, made false and malicious statements regarding the conditions prevailing in the Donnelly Company's plant, and that he gave wide publicity to these falsehoods through advertisements published in the Kansas City papers and by distribution of printed circulars throughout the United States. Under Perlstein's directions agents of the International were supplied with pamphlets containing the false statements invented by him and sent far and wide throughout the country with instructions to deliver them to retail stores which sold the product of the Donnelly Garment Company. These malicious falsehoods were given publicity under Perlstein's direction for the purpose of inducing the customers of Donnelly Garment Company to sever commercial relations with it, and thus to compel the Garment Company to accede to the demands of the International through fear of irreparable damage to its business. Appellees tacitly admit Perlstein's guilt of these fraudulent acts. But this action was brought to trial in the District Court in 1943, and, under the provisions of the Norris-LaGuardia Act, the District Court was without jurisdiction to issue an injunction against fraud merely upon the finding that fraudulent acts had been committed by the appellees or any of them in the past. The court's power to issue an injunction was dependent upon the further finding that unless restrained the fraudulent acts committed in the past would be continued in the future, and, as noted above, the District Court declined to make this necessary finding. The false representations referred to were made and given publicity by Perlstein in 1937. Their falsity was completely exposed in December 1937 in one of the trials of the action brought by appellants under the Sherman Act. They were never again given publicity by advertisement in the press. There is some evidence to show that the circulars containing these false representations may have been distributed for a time in 1938 among retail stores selling the product of the Garment Company, but there is a sharp conflict in the evidence on the question whether the other appellees had knowledge of Perlstein's action in making the false representations before they were made, or whether the other appellees ratified Perlstein's action after knowledge. There is evidence on behalf of the appellees that, after the falsity of Perlstein's statements concerning appellants was exposed in the trial court in 1937, another circular in which the fraudulent statements were not repeated was prepared by Perlstein and circulated among appellants' customers, in substitution for the first circular. No charge of fraud is made in connection with the distribution of the second circular. Appellants contend, however, that the appellees discontinued the fraudulent acts charged against them only because compelled to do so by the institution of the action for an injunction. They point to the fact that none of the appellees took the stand at the trial to disavow the fraudulent actions of Perlstein or to give assurance that these actions would not be continued as soon as the restraining hand of the court was lifted. [1] They rely upon the principle that once a conspiracy and its continuation until stopped by the institution of proceedings against it are proved, it must be deemed to continue until the contrary is established; and that the failure of any of the appellees to disavow on the witness stand the acts charged against them justifies the inference that the unlawful acts which brought about the action for an injunction will be continued unless restrained. United States v. Perlstein, 3 Cir., 126 F.2d 789, 798; Local 167 of International Brotherhood of Teamsters v. United States, 291 U.S. 293, 298, 54 S.Ct. 396, 78 L.Ed. 804; Interstate Circuit v. United States, 306 U.S. 208, 226, 59 S.Ct. 467, 83 L.Ed. 610; Goldie v. Cox, supra. The infirmities in this argument are that appellants assume a conspiracy which the trial court found on substantial evidence did not exist; and that they ignore the finding of the trial court, supported by substantial evidence, that the unlawful acts of which they complain were discontinued upon the exposure of their falsity, and that the evidence failed to show any reasonable probability of their continuation. The injunction against fraud was properly denied. Champion Spark Plug Co. v. Reich, 8 Cir., 121 F.2d 769, 772. When an injunction is brought to restrain a continuing injury and, after suit is brought the defendant claims to have abandoned the course of conduct complained of, the question for the court to determine is whether the illegal conduct has in fact been abated or whether the menace to the plaintiff's rights still exists. If the menace exists an injunction should be granted; if not, it should be denied.    The question is one of fact for the determination of the court at the time the final decree is entered. The issues arising out of the charge of threats of illegal boycott of the retail stores handling the product of the Donnelly Garment Company were, like the issues arising on the charge of fraud, decided by the trial court upon conflicting evidence. On the finding that none of the appellees authorized the threats of a boycott of the Garment Company's customers, which may have been made by certain emissaries and agents of the International, or ratified them after actual knowledge, the court concluded that, because of the provisions of section 4 of the Norris-LaGuardia Act, an injunction against the so-called secondary boycott should not issue. Section 4 of the Act provides that no court of the United States shall have jurisdiction to issue any restraining order or injunction in any case growing out of a labor dispute to prohibit any person or persons participating or interested in the dispute from (e) Giving publicity to the existence of, or the facts involved in, any labor dispute, whether by advertising, speaking, patrolling, or by any other method not involving fraud or violence. There was no suggestion in the evidence that any acts of violence were done or threatened by any of the emissaries of the International, who called upon the retail stores handling the products of the Garment Company and urged them to sever commercial relations with the Garment Company; and, as noted above, the court found that the fraudulent representations made by these emissaries of the International to the customers of the Donnelly Garment Company were discontinued after 1937 and that there was no probability of their continuance. The questions on this branch of the case, therefore, are whether the court's finding of fact was clearly erroneous, and, if not, whether its construction of section 4(e) of the Norris-LaGuardia Act was correct. There was evidence from the operators of retail stores who sold the women's garments manufactured by the Donnelly Company that the emissaries of the International who called on them threatened the stores with boycott unless they discontinued the purchase and sale of the Donnelly Garment Company's product. Some of the interviews given to the press by Mr. Dubinsky, president of the International, and probably by some of the other appellees, contain language susceptible of interpretation as a threat to boycott all the retail stores selling Donnelly garments. Some of the articles published in Justice, the official publication of the International, edited by one of the appellees, read by all of them, and widely circulated among the members of the International contain similar language. These articles, however, when read in their entirety were more reasonably to be interpreted as statements of a plan of the appellees responsible for them merely to urge the retail stores in question not to patronize the Donnelly Garment Company, to publicize the labor dispute out of which the action arose, and to urge the public not to purchase from the retail stores the garments manufactured by the Donnelly Company. While there were references in the publicity of the International to picketing retail stores which refused to discontinue commercial relations with the Donnelly Garment Company, the proof shows that such picketing as did occur was limited to the patrol of the entrances of a retail store in St. Louis by pickets who carried signs stating that the Donnelly Garment Company was unfair to union labor, and advising the customers of the store not to purchase garments manufactured by it. There was also testimony by the appellee Dubinsky [2] that picketing of retail stores, as distinguished from the boycott of a product of any company which the International was attempting to organize, was contrary to the policy of the International and never in its history knowingly permitted. Emissaries of the International sent out by Perlstein denied that they threatened a boycott of the retailers they called on, as distinguished from the boycott of the products of the Donnelly Company by an appeal to the public not to purchase them. We conclude that the weight of the testimony supports the trial court's finding of fact on this issue, and that the court correctly held that A fair construction of this section (§ 4 (e)) of the Act indicates that Congress intended that the facts of a labor controversy might be given publicity by the patrolling of the streets or otherwise with banners and signs, and that such publicity might include or contain a request to the public not to buy the products of the factory where the labor dispute exists. [55 F.Supp. 601] Taxi-Cab Drivers Local Union No. 889 v. Yellow Cab Operating Co., 10 Cir., 123 F.2d 262; Levering & Garrigues Co. v. Morrin, 2 Cir., 71 F.2d 284; Carter v. Herrin Motor Freight Lines, supra, 131 F.2d at page 560; Wilson & Co. v. Birl, supra. Here the appellants rely on Duplex Printing Press Co. v. Deering, 254 U.S. 443, 41 S.Ct. 172, 65 L.Ed. 349, 16 A.L.R. 196, and Bedford Cut Stone Co. v. Journeyman Stone Cutters' Association, 274 U.S. 37, 47 S.Ct. 522, 71 L.Ed. 916, 54 A.L.R. 791, decisions which came down before the passage of the Norris-LaGuardia Act. We agree with the trial court that these opinions may not be accepted as law on the question now under discussion in view of the provisions of the Norris-LaGuardia Act. See United States v. Hutcheson, supra; Milk Wagon Drivers' Union v. Lake Valley Farm Products, Inc., supra. In conclusion it may not be amiss to say that nothing in the Norris-LaGuardia Act denies to the Federal courts the power to issue an injunction in an action growing out of a labor dispute where the evidence clearly establishes the requisite jurisdictional findings. Fraud and violence are as unlawful and as reprehensible in a labor controversy as elsewhere. But in an action for an injunction in a labor dispute the trial court is required to make certain findings as a prerequisite to the power and jurisdiction of the court to grant an injunction. The burden is upon the plaintiff to establish the findings by clear evidence. Since we conclude that the trial court's findings against the appellants in this case on issues necessary to its power and jurisdiction to enjoin the appellees are not clearly erroneous, the decree appealed from is affirmed.