Court Opinion

ID: 9637131
Source: CourtListenerOpinion
Date Created: 2023-08-22 14:58:29.444808+00
Date Added: 2024-06-11T18:09:53.854919
License: Public Domain

TREANOR, Circuit Judge
(dissenting).
I believe that the District Court correctly found as a fact and stated as a conclusion of law that the defendants’ activities did not burden or affect interstate commerce within the prohibitions of the Federal Anti-Trust laws. The correctness of such finding and conclusion turns upon the often recognized distinction between direct and indirect effect of intrastate activities upon interstate commerce. The Supreme Court has pointed out that there is a necessary distinction, and that although “the precise line can be drawn only as individual cases arise, * * * the distinction is clear in principle”; and that Court has declared that this “distinction between direct and indirect effects of intrastate transactions upon interstate commerce must be recognized as a fundamental one, essential to the maintenance of our constitutional system”; and that “otherwise * * * there would be virtually no limit to the federal- power, and for all practical purposes we should have a completely centralized government.”1
In the Schechter case the defendants were engaged in the business of slaughtering chickens and selling them to retailers. They bought their fowls from commission men in the market where most of the supply was shipped in from other states. When the defendants had made their purchases the poultry was trucked to their slaughter houses in Brooklyn for local disposition through retailers. The Supreme Court said that the interstate transaction in relation to that poultry then ended; and that neither the slaughtering nor the sales by defendants to retail dealers and butchers, who in turn sold directly to consumers, were transactions in interstate commerce. The Coúrt in its opinion further pointed out that the poultry had arrived and had become com*444mingled with the mass of property in the state, and that it was not held, used or sold by defendants in relation to any further transactions in interstate commerce and was not destined for transportation to other states. Consequently, the Court concluded that “decisions which deal with a stream of interstate commerce — where goods come to rest within a state temporarily and are later to go forward in interstate commerte — and with the regulations of transactions involved in that practical continuity of movement, are not applicable here.” 295 U.S. page 543, 55 S.Ct. page 849, 79 L.Ed. 1570, 97 A.L.R. 947.
In the instant case the “current” or “flow” of interstate commerce ended in the plant of the plaintiff, Lake Valley Farm Products Inc. where the milk which came from outside the state of Illinois was commingled with milk produced in Illinois and processed for local' consumption. The milk then was “held solely for local disposition and use * * *. ' It was not held, used, or sold by defendants [plaintiffs] in relation to any further transactions in interstate commerce and was not destined for transportation to other states.”2 The subsequent activities of the defendants which were directed to the local sale and distribution of milk could not interfere with the “flow” or “current” of interstate commerce in milk. Our question, then, becomes one of whether defendants’ activities, which were strictly intrastate, were such that their effect was substantially and directly to restrain and burden the shipment and movement of milk from Wisconsin to Illinois while, the milk unquestionably was in interstate commerce.
In the opinion of the Schechter case the Supreme Court pointed out that the case before it was not of the same sort as a prosecution of conspiracy to monopolize or restrain interstate commerce in violation of the Anti-Trust Act; but for purposes of differentiating between direct and indirect effect of intrastate acts the court had recourse to cases which involved the application of the Anti-Trust Act. The following statement is of special interest in view of the facts of the instant case 295 U.S. page 547, 55 S.Ct. page 850, 79 L.Ed. 1570, 97 A.L.R. 947:
“Where a combination or conspiracy is formed, with the intent to restrain interstate commerce or to monopolize any part of it, the violation of the statute is clear. Coronado Coal Co. v. United Mine Workers, 268 U.S. 295, 310, 45 S.Ct. 551, 69 L.Ed. 963. But where that intent is absent, and the objectives are limited to intrastate activities, the fact that there may be an indirect effect upon interstate commerce does not subject the parties to the federal statute, notwithstanding its broad provisions. This principle has frequently been applied in litigation growing out of labor disputes.”
The Supreme Court’s discussion in the Schechter case of the two cases of Local 167 v. United States3 and Levering & Garrigues Co. v. Morrin4 is most instructive for the problem of distinguishing between direct and indirect effect of intrastate activities of labor organizations upon interstate commerce. The case of Local 167 v. United States, supra, involved a suit to enjoin a conspiracy to restrain and monopolize interstate commerce in violation of the Anti-Trust Act. In the trial of that case it was shown that marketmen, teamsters and slaughterers had conspired to burden the free movement of live poultry into the metropolitan area in and about New York City. Marketmen had organized an association, had allocated retailers among themselves, and had agreed to increase prices.¡ To accomplish their objects, large amounts of money were raised by levies upon poultry sold, men were hired to obstruct the business of dealers who resisted, wholesalers and retailers were spied upon and by violence and other forms of intimidation were prevented from freely purchasing live poultry. Teamsters refused to handle poultry for recalcitrant marketmen and members of the shochtim union refused to slaughter. The Supreme Court said that the evidence disclosed that the defendants had conspired to burden the free movement of poultry into the metropolitan area of New York City and concluded that the “interference by appellants and others with the unloading, the transportation, the sales by marketmen to retailers, the prices charged, and the amount of profits exacted operate substantially and directly to restrain and burden the untrammelled shipment and movement of the poultry while unquestionably it is in interstate commerce.” The Court further stated that it was not neces*445sary to decide when interstate commerce ended and that which is intrastate began, since it was clear from the evidence that the activities of the defendants did substantially and directly restrain and burden the untrammelled shipment and movement of the poultry at a time when it unquestionably was in interstate commerce.
In Levering, etc., v. Morrin, supra, suit was brought in a Federal District Court to enjoin the commission of certain acts by the defendants, the acts complained of being alleged to interfere unlawfully with interstate commerce and to be a violation of the Federal Anti-Trust Acts. The question presented to the Supreme Court was whether the allegations of the bill disclosed the commission of acts which unlawfully interfered with interstate commerce and constituted a violation of the Federal AntiTrust Acts. It was stated in the opinion that the prayer for relief primarily was based upon the averment that the petitioners were engaged in fabricating and erecting structural iron and steel; that they were and had been for a long time, operating such business on the open shop method in relation to their employment of labor; that they had large contracts for the construction of work in the City of New York; that respondents were organizations of labor and officers and agents thereof who had conspired, and were attempting to compel petitioners and others to employ exclusively union labor in their building operations; that in pursuance of the conspiracy respondents had called out on strike petitioners’ union employees, and conducted boycotts, and undertaken other injurious interferences which particularly were set forth in the bill. The bill also contained averments to the effect that all the steel used by the petitioners in the City of New York was transported from other states and that the purpose and intent of respondents was to prevent the use of said steel in buildings to be erected by petitioners; that the effect of the success of respondents would be, among other things, to destroy the interstate traffic of petitioners in steel.
After a recital of the foregoing factual allegations of the bill the Supreme Court stated: “All this, however, is no more than to say that respondents’ interference with the erection of the steel in New York will have the effect of interfering with the bringing of the steel from other states. Accepting the allegations of the bill at their full value, it results that the sole aim of the conspiracy was to halt or suppress local building operations as a means of compelling the employment of union labor, not for the purpose of affecting the sale or transit of materials in interstate commerce. Use of the materials was purely a local matter, and the suppression thereof the result of the pursuit of a purely local aim. Restraint of interstate commerce was not an object of the conspiracy. Prevention of the local use was in no sense a means adopted to effect such a restraint. It is this exclusively local aim, and not the fortuitous and incidental effect upon interstate commerce, which gives character to the conspiracy. * * * If thereby the shipment of steel in interstate commerce was curtailed, that result was incidental, indirect, and remote, and, therefore, not within the anti-trust acts, as this court, prior to the filing of the present bill, had already held. United Mine Workers v. Coronado Coal Co., 259 U.S. 344, 410-411, 42 S.Ct. 570, 66 L.Ed. 975, 27 A.L.R. 762; United Leather Workers’ v. Herkert & Meisel Trunk Co., 265 U.S. 457, 44 S. Ct. 623, 68 L.Ed. 1104, 33 A.L.R. 566. The controlling application of these cases to the present one is apparent from the review of them in the later case of the Industrial Ass’n v. United States, 268 U.S. 64, 77, 78, 80-82, 45 S.Ct. 403, 408, 69 L.Ed. 849.”
The discussion and reasoning of the Supreme Court in the two foregoing cases, Local, 167 v. United States and Levering, etc., v. Morrin, furnish a helpful, if somewhat general guide for our appraisal of the intrastate activities of the defendant labor union. In the former case the defendants included approximately all of the groups and individuals who handled poultry from the moment it was delivered from interstate transportation to commission men in New York to its final sale to consumers. The facts disclose an organized effort to dominate the poultry business in the New York City area by securing control of prices and profits in the business and control of the unloading, transportation and sales of all poultry coming into that area through the channels of interstate commerce, such domination and control beginning at the very instant of the transfer from interstate to intrastate transportation. The Supreme Court summed up the factual situation and its obvious effect in the following statement : “The interference by appellants and others with the unloading, the transportation, the sales by marketmen to retailers, the prices charged, and the amount of profits exacted operates substantially and di*446rectly to restrain and burden the untrammeled shipment and movement of the poultry while unquestionably it is in interstate commerce.”
In the Levering case the activities of defendants were intended to halt or suppress building operations as a means of compelling the employment of union labor and not “for the purpose of affecting the sale or transit of materials in interstate commerce”; although it was obvious that the activities of the defendants were in fact indirectly affecting interstate commerce in steel. But as stated in the opinion of the Supreme Court, the ‘‘use of the materials was purely a local matter, and the suppression thereof the result of the pursuit of a purely local aim.” The Supreme Court further stated that it was this exclusively local aim and not the “fortuitous and incidental effect upon interstate commerce” which gave “character to the conspiracy,” and that any curtailment of the shipment of steel-in interstate commerce was an incidental, indirect and remote result and not within the prohibitions of the AntiTrust Acts.
In my opinion the facts of the instant case bring it within the reasoning and holding of the Supreme Court in Levering, etc., v. Morrin, supra.
There is no evidence of an actual intent on the part of defendants to interfere with interstate commerce. And there is no such direct and substantial effect upon interstate commerce resulting from defendants’ conduct as to furnish a necessary inference of the existence of the intent.5 The sole aim of the defendants in their interference with the local sale and distribution of milk was to secure a method of sale and distribution which would be more advantageous to them; and, in the words of the Supreme Court in the opinion in the Levering case, “it is this exclusively local aim, and not the fortuitous and incidental effect upon interstate commerce, which gives character to the conspiracy”; and if as a result of the defendants’ activities the shipment of milk in interstate commerce was curtailed “that result was incidental, indirect, and remote, and, therefore, not within the anti-trust acts.”
The “local aim” and the results of the activities of the defendants, both in the Levering case and in the instant case, contrast sharply with those of the defendants in the Local 167 case. There the aim, and the actual result of the organized activities of the defendants, was to directly intercept- and control substantially all of the poultry coming into the New York City area in the channels of interstate commerce and to intercept the “current” of commerce in poultry at the very moment of transition from interstate to intrastate commerce.
In Blankenship v. Kurfman6 this Court had occasion to pass upon the contention that certain intrastate activities of defendant unions and members thereof interfered with interstate commerce and amounted to a conspiracy or combination in violation of the Sherman Anti-Trust Act. It was pointed out in the opinion in that case that cases arising under the National Labor Relations Act, 29 U.S.C.A. § 151 et seq., do not involve the problem of determining the existence of a conspiracy or combination in restraint of commerce, to the existence of which it is essential that there be an intent to restrain or burden interstate commerce.
We are not concerned in this case with the question of the power of Congress under the Commerce Clause to regulate intrastate activities of labor organizations when these activities affect, or tend to affect, indirectly the current of interstate commerce. No doubt congressional findings and declaration of policy similar to those of the National Labor Relations Act, but directed to the intrastate activities of employees in their relation to commerce, would supply a basis for valid legislation aimed at the regulation of these activities. But the reasoning and holding in the Schechter case and in the Levering case, supra, surely raise doubt of the validity of the application of any such legislation to facts such as are found in the instant case. But no such legislation has been enacted and this suit is controlled by the decisions which have construed and applied the Anti-Trust Acts.
The District Court, as a further ground for refusing to grant the requested injunction, concluded that the facts of the controversy presented “a case involving or growing out of a labor dispute” within the terms of the Norris-LaGuardia Act. Assuming that the facts made “a case” within the terms of the Norris-LaGuardia Act, the court properly refused to grant the in*447junctive relief since the evidence did not disclose any basis for findings which the Act requires as a condition precedent to the exercise of the court’s power to issue restraining orders and injunctions.
The language of the Act forbids the granting of a restraining order or injunction, except upon conditions set out in the Act, “in a case involving or growing out of a labor dispute,” 29 U.S.C.A. § 101, and in a subsequent section express!y defines the term “a case involving or growing out of a labor dispute.” The congressional intent as evidenced in Section 13(a) (b) and (c) of the Act7 is to define two types of cases “involving or growing out of a labor dispute.” The first type is defined in terms of the persons who are disputing, the language being that “a case shall be held to involve or to grow out of a labor dispute when the case involves persons who are engaged in the same industry, trade, craft, or occupation; or have direct or indirect interests therein; or who are employees of the same employer; or who are members of the same or an affiliated organization of employers or employees * * *And it is further provided that it is immaterial whether the dispute is between employer or employees, or between employers and employers, or between employees and employees. In the foregoing type of “case involving or growing out of a labor dispute” there is no express limitation by reason of the subject matter of the dispute.
The last grammatical clause of Section 13(a) defines the second type of case in terms of the nature of the “labor dispute” as well as in terms of “persons participating in the labor dispute.” To fall within this type of “case involving or growing out of a labor dispute” the case must involve conflicting or competing interest in a “labor dispute,” as this term is subsequently defined in Section 13(c) ; and the “labor dispute” must involve “persons participating or interested,” as that term is subsequently defined in Section 13(b). In this second type of “case involving or growing out of a labor dispute” the subject matter of the dispute is limited to a particular kind of controversy, but the classes of persons who may be involved include persons whose interest is neither that of an employer nor of an employee. And in New Negro Alliance v. Sanitary Grocery Co.8- the Supreme Court held that the case was one “involving or growing out of a labor dispute” although the relation of employer and employee did not exist between the adverse parties in the case and although the defendants were not engaged in any business competitive with that of the plaintiff and even though the officers, members, or representatives of the defendant association were not engaged in the same business or occupation as the plaintiff employer or its employees. Also the Supreme Court held that the dispute was a labor dispute within the definition of Section 13(c) regardless of the fact that it did not involve terms and conditions of employment in the sense of wages, hours, unionization or betterment of working conditions.
In view of the Supreme Court's interpretation of the term “labor dispute” as defined in Section 13(c), and its interpretation of “persons participating or interested,” as defined in Section 13(b), I believe that the facts of the instant case bring it within the second type of “case involving or growing out of a labor dispute.”
Also I think that this case comes within the first type of case referred to above. It involves persons who are “engaged in the same industry, trade, craft or occupation” and is a dispute between the plaintiffs, consisting of employers and one association of employees, a C. I. O. local, and the defendants, another association of employees, an A. F. of L. local. As indicated above, I do not think that the term “labor dispute” as used in Section 13(a) is limited by the definition of “labor dispute” in Section 13(c). The primary intent of Section 13(a) (b) and (c) is to define two types of cases “involving or growing out of a labor dispute,” and it is only as an incident to the expression of the primary intent that “labor dispute” and “persons participating or interested” are defined. The terms “labor dispute” and “persons participating or interested” are defined in (b) and (c) merely for the purpose of clarifying the definition of the second type of case which is defined as a case which “involves any conflicting or competing interests in a ‘labor dispute’ * * * of ‘persons participating or interested’ therein * * *.” The possible kinds of disputes which can be involved in this latter type of “case” is less than those of the first type of case- because of the limitation imposed by the restricted definition of "labor dispute” in 13(c). But the *448classes of persons who may be involved are less restricted than in the first type of case because of the broad terms of the definition of “persons participating or interested.”
I agree with the District Court’s conclusion that the facts present “a case- involving or growing out of a labor dispute” as such “case” is defined in the NorrisLaGuardia Act!

 Schechter Poultry Corporation v. United States, 295 U.S. 495, 546, 548, 55 S. Ct. 837, 850, 851, 79 L.Ed. 1570, 97 A. L.R. 947.

 Schechter Poultry Corp. v. United States, supra, 295 U.S. page 543, 55 S. Ct. page 849, 79 L.Ed. 1570, 97 A.L.R. 947.

 291 U.S. 293, 54 S.Ct. 396, 398, 78 L. Ed. 804.

 289 U.S. 103, 53 S.Ct. 549, 551, 77 L.Ed. 1062.

 See the two Coronado cases, 259 U.S. 344, 42 S.Ct. 570, 66 L.Ed. 975, 27 A.L.R. 762, and 268 U.S. 295, 45 S.Ct. 551, 69 L.Ed. 963.

 7 Cir., 96 F.2d 450.

 Act of March 23, 1932, c. 90, 47 Stat. 70, 73, 29 U.S.C.A. § 113.

 303 U.S. 552. 58 S.Ct. 703, 82 L.Ed. 1012.