Opinion ID: 2736107
Heading Depth: 3
Heading Rank: 2

Heading: Morton and Machinists

Text: The Court extended Garmon’s principles to the context of § 303 suits in Morton, 377 U.S. at 252. There, during a strike, the petitioner labor union engaged in secondary activities to induce customers and suppliers to cease dealing with the respondent employer. Id. at 253–54. The respondent filed suit in federal court for violation of § 303 and an Ohio law similar to the tort of tortious interference with a prospective business advantage. Id. at 254. The trial court awarded the respondent compensatory damages because the union had encouraged employees of a third-party to force their employer to stop doing business with the respondent (in violation of § 303), the union had persuaded the management of one of the respondent’s customers to cease doing business with the respondent (in violation of state law), and the union had caused the loss of a contract because there were not enough employees available during the strike to perform the contract (also in violation of state law). Id. at 255–56. Even though the strike was peaceful, the trial court also awarded punitive damages. Id. at 256. The U.S. Supreme Court reversed. It first held that the union’s attempts to induce the employees of the third party to coerce their employer into refraining from conducting business with the respondent were “a clear violation of § 303.” Id. at 256. The Court then took up the question “whether a court, state or federal, is free to apply state law in awarding damages resulting from a union’s peaceful strike conduct vis-a-vis a secondary employer.” Id. at 256. Quoting Garmon, the Court acknowledged that § 303 did not preempt all actions arising out of secondary union activity: doing so.” Id. at 202–03. RETAIL PROP. TRUST V. UBCJA 29 [W]e have allowed the States to grant compensation for the consequences, as defined by the traditional law of torts, of conduct marked by violence and imminent threats to the public order. State jurisdiction has prevailed in these situations because the compelling state interest, in the scheme of our federalism, in the maintenance of domestic peace is not overridden in the absence of clearly expressed congressional direction. Id. at 257 (quoting Garmon, 359 U.S. at 247–48) (alteration in original) (internal citations omitted). Nonetheless, the Court found those considerations “entirely absent in the present case.” Id. It described the state law at issue as an “Ohio law of secondary boycott” that, by regulating conduct that Congress chose to leave unregulated in § 303, “frustrate[d] the congressional determination to leave this weapon of self-help available” to unions. Id. at 259–60. The Court held that the Ohio-law claims were “displaced by § 303 in private damage actions based on peaceful union secondary activities.” Id. at 261. The Court also concluded that the preemptive scope of § 303 extended to claims for punitive damages for secondary activities which violated only state law. Morton, 377 U.S. at 260–61 (“[I]nsofar as punitive damages in this case were based on secondary activities which violated only state law, they cannot stand, because, as we have held, substantive state law in this area must yield to federal limitations. . . . Accordingly, we hold that since state law has been displaced by § 303 in private damage actions based on peaceful union secondary activities, the District Court in this case was without authority to award punitive damages.”). 30 RETAIL PROP. TRUST V. UBCJA In Machinists, the Court further explained the new form of preemption described in Morton. There, an employer’s dispute with its union regarding the length of the workweek led to the union’s adopting a resolution forbidding its members to work any overtime, defined as time in excess of 37.5 hours per week. 427 U.S. at 134. In addition to filing a complaint regarding the no-overtime resolution with the NLRB, the employer filed a separate complaint before Wisconsin’s state labor agency, which entered an order enjoining the union from enforcing the resolution. Id. at 135–36. The Wisconsin courts upheld the order. Id. The Court considered whether, assuming that the NLRB did not have primary jurisdiction (per Garmon), Congress nonetheless “intended that the conduct involved be unregulated [by states] because left to be controlled by the free play of economic forces,” as in Morton. Id. at 140 (internal quotation marks omitted); see also id. at 147–48 (explaining that the “crucial inquiry” under Morton is “whether the exercise of plenary state authority to curtail or entirely prohibit self-help would frustrate effective implementation of the [NLRA]’s processes” (internal quotation marks omitted)). The Court observed that there was no evidence that the no-overtime resolution “was enforced by violence or threats of intimidation or injury to property.” Id. at 154. Rather, the no-overtime resolution was “peaceful conduct”—purely economic self-help that Congress had intended to leave available to workers. Id. at 155. Accordingly, the Court held, state interference with such activity would frustrate the purposes of federal labor law and was preempted under Morton, because “Congress meant that these activities, whether of employer or employees, were not to be regulable by States any more than by the NLRB.” Id. at 149. RETAIL PROP. TRUST V. UBCJA 31 C. Preemption in This Case With that background, we are prepared to discuss whether § 303 preempts state actions in trespass and nuisance. Because we conclude that § 303 does not preempt all such claims (under field preemption), we then consider whether, in the circumstances of this case, the Mall’s claims conflict with § 303 (under conflict preemption). 1. Field Preemption The district court, following the Seventh Circuit’s decision in Smart, held that § 303 “completely preempts” claims related to secondary boycotts, a conclusion that we construe to be based on field preemption, as we have explained. We think the district court’s decision is contrary to Morton and Sears and that the Seventh Circuit’s broad statement in Smart is simply wrong. Morton did not hold that § 303 preempts all state causes of action that may affect secondary boycotts. To the contrary, it allowed that “in cases involving union violence, state law has been permitted to prevail.” Morton, 377 U.S. at 257. Morton was followed by United Mine Workers of Am. v. Gibbs, 383 U.S. 715 (1966). Gibbs brought suit in federal court against the United Mine Workers of America, alleging violation of § 303 and Tennessee tort laws prohibiting unlawful conspiracy to interfere with contractual agreements. Id. 719–20. The district court held that Gibbs had no claim under § 303 but allowed a verdict on the state claims. Id. 720–21. Because the federal claims were dismissed, the question before the Supreme Court was whether the district court properly exercised pendent jurisdiction over the 32 RETAIL PROP. TRUST V. UBCJA remaining state claims. The Court observed that the state claims were not preempted under Morton because Gibbs had alleged violence and intimidation. Id. at 721. Significantly, the Court stated that “the allowable scope of the state claim implicates the federal doctrine of pre-emption;” the state claim did not, however, “create statutory federal question jurisdiction.” Id. at 727 (citing Louisville & N. R. Co. v. Mottley, 211 U.S. 149 (1908)). The Court then emphasized that some state causes of action are not preempted by § 303: “This Court has consistently recognized the right of States to deal with violence and threats of violence appearing in labor disputes, sustaining a variety of remedial measures against the contention that state law was pre-empted by the passage of federal labor legislation.” Id. at 729 (citations omitted). Morton and Gibbs show that § 303 does not so fully occupy the field such that any claim related to secondary boycotts must be brought under § 303 or not all. Our reading of Morton comports with several sister circuits, which have emphasized that the Morton “Court was careful to limit its holding.” Gulf Coast Bldg. & Constr. Trades Council v. F.R. Hoar & Son, Inc., 370 F.2d 746, 748 (5th Cir. 1967); see Peabody Galion v. Dollar, 666 F.2d 1309, 1316 (10th Cir. 1981) (describing Morton’s application to a “small class of cases”); see also BE & K Constr. Co. v. United Bhd. of Carpenters & Joiners of Am., AFL-CIO, 90 F.3d 1318 (8th Cir. 1996) (comparing Morton and Gibbs and concluding “[s]tates may [ ] regulate” union secondary activity that is violent or threatens public order); Iodice v. Calabrese, 512 F.2d 383, 390 (2d Cir. 1975) (holding damages under state law were unavailable “[s]ince the district court . . . found no evidence of violence” and Morton held § 303 displaced actions based on peaceful union secondary activities); Gulf Coast Bldg., 370 F.2d at 748 (“Section 303 . . . has been held RETAIL PROP. TRUST V. UBCJA 33 to pre-empt state common law only when peaceful boycotts are involved.” (emphasis added)). Sears, for its part, simply confirmed what the Court said in Garmon and repeated in Morton: Trespass is one “threat[] to public order” that is not totally preempted by the NLRA. Garmon, 359 U.S. at 247. Sears expanded the Court’s discussion in Garmon of what torts a union might be liable for under state law where its picketing was either “arguably protected” under § 7 or “arguably prohibited” under § 8. See Sears, 436 U.S. at 190. Acknowledging that “some violations of state trespass laws may be actually protected by § 7,” id. at 204, the Court nevertheless held that it was “unwilling to presume that Congress intended the arguably protected character of the Union’s conduct to deprive the California courts of jurisdiction to entertain Sears’ trespass action.” Id. at 207. If a union’s “arguably protected” conduct is not necessarily preempted by the NLRB’s primary jurisdiction under § 7, we are hard pressed to understand how conduct arguably covered by § 303 must be preempted in toto. Sears’ analysis of whether trespass was “arguably prohibited” by § 8—a subsection of which is enforceable through a private right of action under § 303—likewise gives us confidence that state tort actions are not fully preempted by § 303. Indeed, in Sears, the Court acknowledged that even when “an unfair labor practice charge could have been filed [with the NLRB],” the state still had an interest in protecting its citizens where “the exercise of state jurisdiction over the tort claim” would not interfere with the NLRB. Id. at 196 (emphasis added). “[These] factors . . . warranted a departure from the general pre-emption guidelines.” Id. at 196 (emphasis added). The Court found that because “Sears only challenged the location of the picketing,” not its objective, 34 RETAIL PROP. TRUST V. UBCJA “the controversy which Sears might have presented to the [NLRB] is not the same as the controversy presented to the state court.” Id. at 198. Sears is conclusive evidence that the NLRA does not “so thoroughly occup[y the] legislative field ‘as to make reasonable the inference that Congress left no room for the States to supplement it.’” Cipollone, 505 U.S. at 516 (quoting Fidelity Fed. Sav. & Loan Ass’n v. De la Cuesta, 458 U.S. 141, 153 (1982) (internal quotation marks and citation omitted)). We have held as much by implication. In San Antonio Community Hospital v. Southern California District Council of Carpenters, 125 F.3d 1230 (9th Cir. 1997), the plaintiff filed a complaint in federal court alleging a federal claim under § 303 and various state tort claims—libel, trade libel, intentional interference with prospective economic advantage, negligent interference with prospective economic advantage, and interference with contractual rights. Id. at 1233–35. The district court preliminarily enjoined the respondent union’s picket. Id. at 1232. On appeal, citing Morton, we observed that “interference with prospective economic advantage and contractual rights claims are preempted by section 303 of the LMRA. And an employer cannot seek injunctive relief from a secondary boycott under section 303.” Id. at 1235 (citation omitted). Accordingly, we moved on to consider the propriety of an injunction in light of the other state tort claims, ultimately concluding that relief would be based on the hospital’s defamation claims. Id. at 1239. If we had believed that § 303 covered the field, we would have dismissed all of the state court torts as preempted, but we did not. We did not RETAIL PROP. TRUST V. UBCJA 35 then, and we do not now, believe that § 303 leaves no room for state action.9 The district court concluded differently. It relied on the Seventh Circuit’s decision in Smart to hold that § 303 preemption is “complete.” Smart, 562 F.3d at 808. We think Smart is not persuasive on this point and, indeed, is contrary to Morton and Sears. In Smart, the plaintiff was the sole proprietor of a non-union electrical company that contracted to perform work for the construction of a sports complex. Id. at 801. Smart alleged that, after he entered into the contract, the International Brotherhood of Electrical Workers, Local 702, “coerced” the owner of the sports complex to terminate his relationship with Smart by threatening “to withhold services and otherwise to shut down the building project if the owner did not employ union workers instead of Mr. Smart.” Id. Smart filed suit in federal court and “included only state causes of action in his complaint,” among them a claim under the Illinois Antitrust Act. Id. at 803. 9 In Ethridge v. Harbor House Restaurant, 861 F.2d at 1389, we observed that the Supreme Court has “noted that Congress has created some exceptions to the [NLRB’s] exclusive jurisdiction. Thus, cases involving section 8(b)(4) are removable, see 29 U.S.C. § 187, as are cases for breach of a collective bargaining agreement, see 29 U.S.C. § 185.” Id. at 1400 n.7 (citation omitted). Ethridge says nothing about “complete preemption” but correctly states that §§ 301 and 303 are statutory exceptions to the NLRB’s exclusive jurisdiction. 36 RETAIL PROP. TRUST V. UBCJA The Seventh Circuit held that Smart’s “state antitrust claim [wa]s preempted by federal law.” Id. at 804.10 It noted that “the activities described by Mr. Smart in his complaint,” specifically the union’s threats to “shut the project down if [the owner] continued to use Mr. Smart,” fell within § 158(b)(4)’s prohibition on secondary boycott activities. Id. (alteration in original) (internal quotation marks omitted). The court in Smart treated the question of the NLRB’s exclusive jurisdiction under Garmon and the question of complete preemption under § 303 as two different questions. The Seventh Circuit held that Garmon preemption was not “complete,” id. at 805, but then held that preemption was complete under § 303. Id. at 808. The court asked whether, in § 303, “Congress meant to ‘exercise [the] extraordinary pre-emptive power . . . that converts an ordinary state common law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule.’” Id. at 807 (quoting Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 65 (1987)). It then noted that the Supreme Court in Metropolitan Life Insurance Company had compared a provision in ERISA to § 301 and found that both provisions were subject to the complete preemption rule that permits 10 The procedural posture of Smart is complicated. Smart filed his suit in federal court, alleging only state claims and asserting diversity jurisdiction. The Seventh Circuit found that the parties were not diverse, but instead of dismissing the suit, it requested supplemental briefing from the parties on whether the court had jurisdiction because there was complete preemption under Garmon. See Smart, 562 F.3d at 803–05 & n.6. The court held that there was not “complete pre-emption” under Garmon, but that there was complete preemption under § 303. The court then concluded that it had subject matter jurisdiction and that Smart’s state claims were preempted by § 303. It then remanded with instructions to allow Smart to re-plead his case under § 303. Id. at 808–09. RETAIL PROP. TRUST V. UBCJA 37 removal of cases filed in state court, even if the complaint raises only state claims. See Metro. Life Ins., 481 U.S. at 63–67. Finding that § 303 “mirrors the broad language” of § 301,11 Smart concluded that § 303 “completely preempts state-law claims related to secondary boycott.” Smart, 562 F.3d at 808. The Smart court failed to cite Morton at all and, in our view, Morton is contrary and conclusive. Smart’s analogy of § 303 to § 301 might have been reasonable under other circumstances, but there is no reason to resort to analogies here; Morton tells us directly that § 303 is compatible with some state causes of action. As we and other courts have long recognized, § 303 does not displace all state actions that are in some way related to a secondary boycott. See, e.g., Gulf Coast Bldg., 370 F.2d at 748 (holding that claims under Mississippi law for violent or willful tortious conduct were not preempted by § 303); Brown & Sharpe Mfg. Co. v. All Individual Members of Lodges 1088 & 1142 of Dist. No. 64 of Int’l Ass’n of Machinists & Aerospace Workers, AFL-CIO, 535 F. Supp. 167, 170 (D.R.I. 1982) (holding that Rhode Island tort claims based on union violence were not 11 Section 301(a) provides: Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this chapter, or between any such labor organizations, may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties. 29 U.S.C. § 185(a). 38 RETAIL PROP. TRUST V. UBCJA preempted); J. Landowne Co. v. Paper Box Makers & Paper Specialties Union, Local 299, 278 F. Supp. 339 (E.D.N.Y. 1967) (holding that claims under New York tort law for violence and malicious destruction were not preempted by § 303); see also Offices at 2525 McKinnon, LLC v. Ornelas, 681 F. Supp.2d 778, 784–85 (N.D. Tex. 2010); Brawn v. Coleman, 167 F. Supp.2d 145, 153 (D. Mass. 2001).12 We do not doubt that there are some claims that will be preempted by § 303. Smart, for example, involved a claim under the Illinois Antitrust Act, and antitrust has long been an area of particular concern to labor law, since “there is an inherent tension between national antitrust policy, which seeks to maximize competition, and national labor policy, which encourages cooperation among workers to improve the conditions of employment.” H. A. Artists & Assocs., Inc. v. Actors’ Equity Ass’n, 451 U.S. 704, 713 (1981); see also Connell Constr. Co. v. Plumbers & Steamfitters Local Union No. 100, 421 U.S. 616, 635–37 (1975). Until Congress established exceptions to antitrust laws for union activity, courts often relied on antitrust laws to enjoin strikes as unlawful restraints on trade. See H.A. Artists, 451 U.S. at 713; see also 15 U.S.C. § 17 (“Nothing contained in the antitrust 12 We note, moreover, that § 303, unlike § 301, expressly provides for concurrent state-court jurisdiction. Compare 29 U.S.C. § 185 (“Suits for violation for contracts between an employer and a labor organization . . . may be brought in any district court of the united States having jurisdiction of the parties . . . .”), with id. § 187(b) (“Whoever shall be injured in his business or property by reason o[f] any violation of subsection(a) of this section may sue therefor in any district court of the United States . . . or in any other court having jurisdiction of the parties . . . .” (emphasis added)). This contrast is further evidence that Congress did not intend that § 303 occupy the field to the categorical exclusion of state law. RETAIL PROP. TRUST V. UBCJA 39 laws shall be construed to forbid the existence and operation of labor . . . organizations”); 29 U.S.C. § 105 (“No court” shall have jurisdiction to enjoin a labor dispute on the grounds that it is an “unlawful combination or conspiracy”); 2 John E. Higgins, Jr., The Developing Labor Law 2564–96 (6th ed. 2012) (detailing the relationship between the NLRA and federal antitrust laws). Similarly, a number of courts have found preemption of state causes of action addressing economic harms. See, e.g., BE & K Constr. Co., 90 F.3d at 1327–30 (holding that, because there was insufficient evidence of union violence, claim under Arkansas law for tortious interference with contractual relations was preempted by § 303); Iodice, 512 F.2d at 390 (holding that claim under New York law for tortious interference with contractual relations did not involve violence and was preempted by § 303); Hennepin Broad. Assocs., Inc. v. NLRB, 408 F. Supp. 932 (D. Minn. 1975) (holding that Minnesota claims for tortious interference with business relations and contracts was preempted by § 303). In the instant case, however, the Mall alleges propertybased torts, rather than economic causes of action. The Mall is not seeking to prevent or punish labor conduct, but only conduct that violates the Mall’s time, place, and manner rules. Thus, this suit is not, fundamentally, a labor case in the guise of an action in trespass; it is a trespass case complaining only incidentally, at most, about union conduct. In light of Morton, we conclude that § 303 does not fully preempt any suit that is based on conduct arguably prohibited by the secondary boycott provisions of § 8 and made actionable by § 303. 40 RETAIL PROP. TRUST V. UBCJA 2. Conflict Preemption Although we disagree with Smart and the district court that § 303 preempts all causes of action that regulate conduct arguably prohibited by the secondary boycott provisions of § 8, our inquiry does not end there. We still must determine whether the Mall’s state claims are preempted by § 303 in this case because they “conflict[] with federal law.” Bldg & Constr. Trades Council, 507 U.S. at 224. Because Garmon preemption does not apply in this case, see supra, we look to Machinists preemption to decide this question and inquire “whether the exercise of state authority [via trespass and nuisance law] to curtail or entirely prohibit self-help would frustrate effective implementation of the policies of the [NLRA].” N.Y. Tel. Co. v. N.Y. State Dep’t of Labor, 440 U.S. 519, 531 (1979). For several reasons, we do not think that adjudication of the Mall’s trespass and nuisance claims would “impinge on [any] area of labor combat designed to be free,” Morton, 377 U.S. at 260 (internal quotation marks omitted), and thus would not “frustrate effective implementation” of federal labor policy. First, as a general matter, trespass and nuisance are labor-neutral torts, far afield indeed from areas of state law, such as antitrust, that most commonly raise preemption concerns. Instead of directly regulating relations between unions and employers, trespass and nuisance law instead largely touch on noneconomic “interests . . . deeply rooted in local feeling and responsibility.” See, e.g., Sears, 436 U.S. at 195–97; Hotel Emps. & Rest. Emps. Union, Local 57 v. Sage RETAIL PROP. TRUST V. UBCJA 41 Hospitality Res., LLC, 390 F.3d 206, 212 n.4 (3d Cir. 2004).13 It is as true in the context of Machinists preemption as in that of Garmon preemption that we ought not be quick to “infer that Congress ha[s] deprived the States of the power to act” with respect to such local interests. Machinists, 427 U.S. at 136; see also, e.g., Golden State Transit Corp. v. City of Los Angeles, 686 F.2d 758, 759–60 (9th Cir. 1982). Under either of these forms of preemption, “the federal law governing labor relations does not withdraw ‘from the States . . . power to regulate where the activity regulated [is] a merely peripheral concern of the Labor Management Relations Act.’” Machinists, 427 U.S. at 137 (quoting Garmon, 359 U.S. at 243) (alteration in original).14 13 Trespass has been discussed much more extensively than nuisance in the case law on both Garmon and Machinists preemption, but—at least in California—the two torts are often interrelated and thus entail markedly similar considerations. See KFC W., Inc. v. Meghrig, 28 Cal. Rptr. 676, 685 (Cal. Ct. App. 1994) (“Because the creation of either a private or public nuisance is tortious, such conduct may support a claim for trespass.”); 5 Witkin, Summary of California Law Torts, § 693, at 1018 (10th ed. 2005) (“Trespass and nuisance are separate torts that protect different interests, although the same conduct may invade both.”); cf. Helmsley-Spear, Inc. v. Fishman, 900 N.E.2d 934, 937–38 (N.Y. 2008) (holding that a suit brought in nuisance arising out of the union’s drumming outside of the plaintiff’s premises was not preempted by federal labor law because “[t]he tort of private nuisance, much like the tort of trespass, has historically been governed by state law. It cannot be said that Congress, by enacting the NLRA, intended to preempt states from protecting their citizens from obnoxious conduct.”). 14 While we may not lightly infer that Congress intended to preempt state laws of general applicability that touch on deeply rooted local interests, there are nonetheless circumstances where such laws will frustrate effective implementation of federal labor policy and thus be preempted. See, e.g., San Antonio Cmty. Hosp., 125 F.3d at 1235 (“[L]ibel actions under state law [are] pre-empted by the federal labor 42 RETAIL PROP. TRUST V. UBCJA Second, and more importantly, the particular facts of this case suggest that it will work no interference with the purposes of federal labor law. The Mall claims not the right to quash all protest activity by the Union—an expansive claim that would present a much harder question with respect to Machinists preemption—but only the right to prevent Union members from “yelling, chanting loudly in unison, blowing whistles, hitting and kicking [a] construction barricade . . . and hitting their picket signs against the Mall railings.” Such threatening activity is not a “weapon of selfhelp” that Congress intended to leave available to unions. Cf. Farmer v. United Bhd. of Carpenters & Joiners, Local 125, 430 U.S. 290, 299 (1977) (“Nothing in the federal labor statutes protects or immunizes from state action violence or the threat of violence in a labor dispute” (citations omitted)). The sort of “peaceful” protest activities that Machinists preemption does squarely protect from state interference are left available by the Mall’s relatively modest time, place, and manner restrictions. See Morton, 377 U.S. at 259–60.15 laws to the extent that the State [seeks] to make actionable defamatory statements in labor disputes which were published without knowledge of their falsity or reckless disregard for the truth.” (internal quotation marks omitted)). 15 The free-speech provision of the California Constitution, moreover, has been recognized to be “more definitive and inclusive than the First Amendment” of the United States Constitution, Wilson v. Superior Court, 532 P.2d 116, 120 (Cal. 1975), and the California Supreme Court has specifically extended that provision’s protection to expressive activity in privately owned shopping malls. See Pruneyard, 592 P.2d at 347. This permissive legal framework gives us additional confidence that any state regulation here will not interfere with the Union’s activities to a sufficient extent to cause concern under Machinists. RETAIL PROP. TRUST V. UBCJA 43 As the Sears Court held in the related context of Garmon preemption, we hold that Machinists preemption does not “sweep[] away state-court jurisdiction over conduct traditionally subject to state regulation.” Sears, 436 U.S. at 188. Where, as here, a plaintiff’s claims for trespass and nuisance fall “within the longstanding exception for conduct which touche[s] interests so deeply rooted in local feeling and responsibility that pre-emption could not be inferred in the absence of clear evidence of congressional intent,” id. at 183, and concern only the application of time, place, and manner restrictions to raucous and threatening picket activity, cf. id. at 185, federal preemption does not bar the plaintiff’s claims from going forward, because the conduct at issue is, at most, “a merely peripheral concern” of federal labor law. Machinists, 427 U.S. at 137. To conclude otherwise would be to expand Machinists preemption beyond its proper scope.