Court Opinion

ID: 8902032
Source: CourtListenerOpinion
Date Created: 2022-11-27 01:13:35.406892+00
Date Added: 2024-06-11T17:07:55.854651
License: Public Domain

LUMBARD, Circuit Judge
(concurring in part and dissenting in part):
I agree with my brothers that any limitation of recovery under the injunction bond rule does not bar full recovery for violation of the antitrust laws.1 But I disagree with my brothers’ failure to find that there has been a violation of the antitrust laws since the record made in the court below furnishes ample basis for such a determination. In my view, it remains only for the district court to assess the damages and enter judgment.
Connell Construction Co. v. Plumbers & Steamfitters Local Union No. 100, 421 U.S. 616, 634, 95 S.Ct. 1830, 44 L.Ed.2d 418 (1975) squarely rejected the argument that § 303 of the LMRA provided the exclusive employer remedy for violations of the “hot cargo” prohibition of § 8(e) of the National Labor Relations Act (“NLRA”), 28 U.S.C. § 158(e). In determining whether to apply labor’s nonstatutory exemption, the Court observed that “labor policy requires tolerance for the lessening of business competition based on differences in wages and working conditions[,]” 421 U.S. at 622, 95 S.Ct. at 1835, but an agreement between a union and a nonlabor party which restrains competition in any other manner is not immune, 421 U.S. at 622-23, 95 S.Ct. 1830; see Mine Workers v. Pennington, 381 U.S. 657, 662, 85 S.Ct. 1585 (1965); Allen Bradley Co. v. Electrical Workers, 325 U.S. 797, 806-11, 65 S.Ct. 1533, 89 L.Ed. 1939 (1945). In applying these standards to the facts before it, the Connell Court analyzed the agreement in issue in terms of § 8(e) of the NLRA. Although the union argued that the agreement was saved by reason of the construction industry proviso to § 8(e), the Court disagreed and found it to be an illegal secondary boycott.
Once the Court reached the § 8(e) issue it deemed it unnecessary to engage in further scrutiny but concluded that the union was not immunized from antitrust liability. 421 U.S. at 634-35, 95 S.Ct. 1830. I believe that inasmuch as the National Labor Relations Board (“NLRB”), 196 NLRB No. 165 (1972), and this court, 486 F.2d 907 (2d Cir. 1973), cert. denied, 416 U.S. 970, 94 S.Ct. 1993, 40 L.Ed.2d 559 (1974), have adjudicated the NMU restraint-on-transfer clause and efforts at its enforcement to be a violation of § 8(e), there is no need for us or for the district court to re-examine this record. See Connell Construction Co. v. Plumbers & Steamfitters Local Union No. 100, 483 F.2d 1154, 1179 (5th Cir. 1973), rev’d, 421 U.S. 616, 95 S.Ct. 1830, 44 L.Ed.2d 418 (dissenting opinion of Circuit Judge Clark).
Implicit in our prior decision enforcing the Board’s order was an acceptance of its finding that the restraint-on-transfer clause prevented Commerce from selling the S.S. Barbara to Vantage, 486 F.2d at 911.2 We also ruled that the National Woodwork *804standards were met since the clause was not “addressed to the labor relations of the contracting employer vis-á-vis his own employees”, 486 F.2d 912, quoting National Woodwork Mfgrs. Ass’n v. NLRB, 386 U.S. 612, 645, 87 S.Ct. 1250, 1268, 18 L.Ed.2d 357 (1967). These two conclusions are sufficient to meet the Connell standard that the clause have “a potential for restraining competition in the business market in ways that would not follow naturally from elimination of competition over wages and working conditions.” 416 U.S. at 635,3 95 S.Ct. at 1841.
The majority suggests that inclusion of the clause in “a lawful collective-bargaining agreement” might save it from antitrust scrutiny, at 801, quoting Connell, supra 421 U.S. at 626, 95 S.Ct. 1830. But that argument has no application to the facts before us since we have already ruled that portion of the collective-bargaining agreement to be unlawful as violative of § 8(e).
The record before us requires a finding of liability on either a per se or rule-of-reason analysis of the NMU’s actions.4 Under the per se approach a well-meaning purpose will not insulate a group boycott from liability, see Fashion Originators Guild of America, Inc. v. FTC, 312 U.S. 457, 61 S.Ct. 703, 85 L.Ed. 949 (1941); Radiant Burners, Inc. v. Peoples Gas Light & Coke Co., 364 U.S. 656, 81 S.Ct. 365, 5 L.Ed.2d 358 (1961), and its anticompetitive effect will be presumed, see Northern Pacific Railway v. United States, 356 U.S. 1, 5, 78 S.Ct. 514, 2 L.Ed.2d 545 (1958).5 Under the balancing approach of the rule of reason, examination of the facts of this case indicates that the anticompetitive effects of this particular agreement outweigh any legitimate collective bargaining concerns.
Judge Griesa’s 58 page opinion carefully traced the bargaining practices in the shipping industry and found that the restraint-on-transfer clause had its genesis in complaints made by Joseph Curran, president of the NMU, in a January 22, 1968 letter to Edward Silver concerning the loss of NMU-represented vessels through sale and transfer. Silver, who testified at trial, was the lawyer and chief negotiator for the two major shipping owners associations, the Tankers Service Committee (“TSC”) and the Maritime Service Committee (“MSC”). The restraint-on-transfer clause was first successfully negotiated into a collective-bargaining agreement by the Maritime Engineers Beneficial Association (“MEBA”), a non-competing union, in a May, 1968 amendment to its contract with MSC. Judge Griesa found this version of the restraint-on-transfer clause to be the model for the NMU clause. The district judge found the purpose of the clause to have been memorialized in the following portion of a June 25, 1969 letter from J. M. Calhoon, president of MEBA to Silver:
The original and continuing purpose of said Memorandum is: To preserve the jobs and job rights of the Company’s *805engineers covered by our collective bargaining agreement and to protect and maintain the wages, pension rights and other economic benefits and working conditions provided such engineers under said Agreement.
411 F.Supp. 1224, 1233 (S.D.N.Y.1976). The clause was subsequently adopted without significant discussion in the NMU’s 1969 collective-bargaining agreement.
Allen Bradley Co., supra at 798, forecloses any argument that a labor agreement is not unreasonable simply because its general purpose is “to get and hold jobs for [the union members] at good wages and under high working standards”. As we noted in our prior decision, the NMU’s interest in job preservation was not directed at the crew members of the S.S. Barbara since it is the union’s practice to strip a ship of its crew when it is sold and to have it remanned from the hiring halls. 486 F.2d at 914.
The anticompetitive effect of the restraint-on-transfer clause is also apparent from the record before us. Its most immediate impact was to thwart the sale of the S.S. Barbara to Vantage, cause the cancellation of the lucrative SoCal charter, and virtually force the sale of the vessel for scrap. Beyond that, the clause prohibits shipowners from selling their vessels to United States Flag operators unless the prospective buyer agrees to enter into an NMU collective-bargaining agreement. Owners are effectively prevented from selling to a potential buyer whose employees are presently represented by the NMU’s rival, the Seafarer’s International Union (“SIU”). Sales are, therefore, limited to foreign flag operators, non-SIU operators, or those who would buy for scrap value. Mergers between small NMU represented owners and small SIU represented owners are foreclosed. By encouraging sales to foreign flag owners, the clause lessens competition among the American owners.
In summary, whether the appropriate inquiry is under a rule of reason or the per se measure, the record requires a finding that the Union must be held responsible for violation of the antitrust law.
I would hold that the NMU has violated § 1 of the Sherman Act, 15 U.S.C. § 1, and remand to the district court solely for determination of damages.

. It seems to me there is considerable doubt of the continued validity of the limitation of recovery for wrongful injunction to the amount of the bond. See Metzger & Friedlander, The Preliminary Injunction: Injury Without Remedy? 29 Bus.Law. 913 (1974); Note, Interlocutory Injunctions and the Injunction Bond, 73 Harv.L.Rev. 333 (1959); and Note, Recovery of Damages on Injunction Bonds, 32 Colum.L. Rev. 869 (1932). However, as appropriate recovery should be available for violations of the antitrust laws, no purpose would be served by further examination of that question.

. The district court’s opinion arrives at the same basic finding but for its legal conclusion which we today reject that the NMU’s resort to arbitration and the ensuing injunction were nonactionable superseding causes. 411 F.Supp. at 1239.

. This view is fully consistent with the thoughts of Professor Handler whose comments are favorably cited by the majority.
To me the test should be this: Whatever is required or expressly authorized under existing labor legislation should be exempt from the antitrust laws. And whatever is mandatory should be determined in the light of our national labor policy, which should override any countervailing antitrust considerations.
Handler, Labor and Antitrust: A Bit of History, 40 Antitrust L.J. 233, 238 (1971).
Perhaps a finding of no exemption entails a preliminary appraisal of the nature and merits of the underlying antitrust claim, but it does not necessarily follow that the labor organization will be found liable on that claim. “Exemption and liability are not co-extensive concepts.” Id at 237. The removal of the shroud of immunity simply means that the union must answer to the charge of violating the antitrust laws.

. In a post -Connell decision, the Eighth Circuit has found the per se approach to be inapplicable to a group boycott arising out of a labor agreement. See Mackey v. National Football League, 543 F.2d 606 (8th Cir. 1976), cert. filed, 45 U.S.L.W. 3511 (Jan. 25, 1977). A rule of reason inquiry in the context of a labor boycott might well be an appropriate means to balance the goals of the antitrust laws with the positive values of collective-bargaining.

. For a recent and thorough review of this subject see McCormick, Group Boycotts — Per Se or Not Per Se, That Is the Question, 7 Seton Hall L.Rev. 703 (1976).