Court Opinion

ID: 9637034
Source: CourtListenerOpinion
Date Created: 2023-08-22 14:54:09.9671+00
Date Added: 2024-06-11T18:09:52.391679
License: Public Domain

HANEY, Circuit Judge
(dissenting).
The majority, confronted with the limitation of its powers by Toucey v. New York Life Insurance Company, November 17, 1941, 62 S.Ct. 139, 86 L.Ed. -, find power to enjoin the state court, but fall short of saying expressly what authorizes such exertion of power by this court.
On June 29, 1938, the National Labor Relations Board issued an order against Sunshine Mining Company, a corporation, hereafter referred to as respondent, requiring it to reinstate with back pay certain of its employees. 7 N.L.R.B. 1252. On April 3, 1940, this court entered its decree enforcing the Board’s order (9 Cir., 110 F.2d 780), and thereafter the decree became final after denial by the Supreme Court of the United States of respondent’s petition for certiorari. 312 U.S. 678, 61 S.Ct. 447, 85 L.Ed. 1118; 312 U.S. 713, 61 S.Ct. 619, 85 L.Ed. 1144.
A district court in Idaho, which is a court of general jurisdiction, entered a decree of divorce in an action against one of the employees (Jones), and decreed the back pay award to him to be the sole and separate property of his former wife. The *763same state court entered a decree of divorce in an action ■ against another employee (Stralovich), and decreed that the former wife owned one-half of all community property. The former wife then brought an action in the same state court to quiet her title to one-half of the former husband’s back pay award, and the state court restrained respondent from paying such one-half interest in the award while such action was pending. The same state court, in an action for divorce brought against another employee (McLeland), restrained respondent from paying the back pay award due such employee while such action was pending.
Twenty-seven actions were filed against employees to whom back pay awards were made, to recover on debts, and in each of them a ¡writ of attachment was issued whereby levy on the back pay awards was sought. One of the actions was brought in the state court above mentioned, and the remainder were brought in justice’s courts. Judgment was rendered against an employee in still another action brought to recover on a debt in a justice’s court, and the back pay award was sought to be seized on execution issued on the judgment. Actually only 23 employees are involved, because there are two or more actions pending against a few of the employees.
On November 24, 1941, the Board filed a petition alleging the above facts and praying: (1) that an order issue requiring respondent and all plaintiffs in the above mentioned actions to appear and show cause why they should not be restrained from preventing them, in general, enforcing any claim against or preventing payment to the respective employees of, the back pay awards; (2) that all plaintiffs be permanently restrained in the manner specified in (1); and (3) that pending return of the order a stay issue restraining the plaintiffs in the manner specified in (1). On the same day this court issued the order as prayed for in paragraphs (1) and (3).
Respondent filed an answer and cross petition for instructions as to whom and in what manner the back pay awards were to be paid, for a declaratory judgment regarding similar instances in the future, and for an injunction against the Board and the plaintiffs above mentioned restraining them from requiring or attempting to require respondent to make payment of the back pay awards in any way inconsistent with the order or decree of this court. It is suggested in the answer that some of the employees had made assignments of their back pay awards.
The Injunction.
The sole relief prayed for by the Board is an injunction restraining proceedings in the state court. May that relief be granted?
First. Judicial Code § 265, 28 U.S.C.A. § 379, provides:
“The writ of injunction shall not be granted by any court of the United States to stay proceedings in any court of a State, except in cases where such injunction may be authorized by any law relating to proceedings in bankruptcy”.
As I understand the Toucey case, it held that we could not enjoin proceedings in a state court, except in six instances: (1) bankruptcy proceedings; (2) removal of actions; (3) limitation of shipowners’ liability; (4) interpleader; (5) FrazierLemke Act; and (6) where a federal court has first acquired jurisdiction of a res.
It is obvious that the present case does not fall within any of the first five exceptions. Indeed the majority does not suggest to the contrary. Does this case fall within the sixth exception above stated? In other words, did this court by enforcing the Board’s order awarding back pay, take into its possession a res? It is argued in the affirmative by the Board, and while the majority does not expressly rest its decision on that ground, it does say: “In a sense the proceeding may be assimilated to the res cases. The subject matter of the awards is certainly a potential if nof an actual res.’’ Does the majority mean that this court had taken into its possession a res by acting on the petition for enforcement?
No authority is cited to support the court’s suggestion. In fact, the authority is contrary. The Toucey case and Kline v. Burke Constr. Co., 260 U.S. 226, 43 S.Ct. 79, 67 L.Ed. 226, 24 A.L.R. 1077, make it clear that if an action is in personam, the federal court may not enjoin proceedings in the state court. There can be little doubt that the proceedings before the Board and before this court on petition for enforcement are in personam. National Licorice Co. v. National Labor Relations Board, 309 U.S. 350, 362, 60 S.Ct. 569, 84 L.Ed. 799. If that conclusion were *764doubtful, it is conclusively settled by Grannis v. Ordean, 234 U.S. 385, 393, 34 S.Ct. 779, 58 L.Ed. 1363, where it is explained that a proceeding in rem, in a strict sense, is one taken directly against the property, but in a larger and more general sense, it also includes an action between parties where the direct object is to reach and dispose of property owned by them, or of some interest therein. The petition for enforcement was not taken directly against the property of respondent, and its object was not to reach and dispose of any of respondent’s property or any interest therein. Finally, such a proceeding, in its nature, does not differ from the proceedings to review orders of the Federal Trade Commission. As to the latter, this court has said they are proceedings in personam. California Lumbermen’s Council v. Federal Trade Comm., 9 Cir., 115 F.2d 178, 181.
I believe the Toucey case holds that proceedings in a state court may be enjoined by a federal court if, and only if, the proceeding in the federal court falls within one of the six exceptions mentioned in such case, and that there are no other exceptions. I further believe that it is apparent that the instant proceeding here does not fall within any of the six exceptions, and therefore the issuance of an injunction is and was erroneous.
The majority apparently decide, although not in express words, that they are not prohibited by the Toucey case from engrafting other exceptions on Judicial Code § 265. In this connection, the majority says:
“* * * As in removal cases and in proceedings in the district courts for limitation of shipowners’ liability, Toucey v. New York Life Ins. Co., supra, the authority [of this court] to enjoin proceedings inimical to the free exercise of [its] exclusive jurisdiction is implicit in the terms of the law. See provision quoted in note. 10. In cases of the type mentioned the federal courts have freely resorted to the implied power to enjoin. We see strong reasons for believing that the power should be exercised here and no good reason why it should not. * * * ”
In the first place I do not understand that the jurisdiction of the federal court in removal cases is “exclusive”. I believe that in cases to which the removal statutes apply the jurisdiction of the state and federal courts is concurrent. Secondly, the majority leave the so-called “strong reasons” to speculation and conjecture.
However, the majority merely assert the view mentioned in dicta in Looney v. Eastern Texas R. R. Co., 247 U.S. 214, 221, 38 S.Ct. 460, 462, 62 L.Ed. 1084, where it was said: “The use of the writ of injunction, by federal courts first acquiring jurisdiction over the parties or the subject-matter of a suit, for the purpose of protecting and preserving that jurisdiction until the object of the suit is accomplished and complete justice done between the parties is familiar and long established practice * * However sympathetic we may be with the view that we should exercise powers not given us as well as those granted, I think the action of the majority herein is condemned and characterized in the Toucey case [62 S.Ct. 147, 86 L.Ed. -], as follows: “It denies reality to suggest that litigants have shaped their conduct in reliance upon some loose talk in past decisions in the application of § 265 or, more concretely, upon erroneous implications drawn- from Looney v. Eastern Texas R. R. Co., supra * *
■ I believe the Toucey case makes it clear that there are no exceptions, other than the six mentioned, but notwithstanding that conclusion, I will consider the other claimed exceptions.
Second. Judicial Code § 262, 28 U.S.C. A. § 377, provides that federal courts shall have power to issue writs “which may be necessary for the exercise of their respective jurisdictions”. The Board’s original brief filed before decision of the Toucey case, contended that our power to enjoin the state court proceedings was based on § 262. While the Board has not expressly abandoned that position, it is of course untenable in view of f. n. 4 in the Toucey case where it is said that the “general powers thus given to the federal courts were obviously limited by the subsequent enactment of the specific prohibitory provisions of” § 265. The majority does not uphold the Board’s contention in this respect. It is clear that we cannot hold that § 262 is another exception to § 265.
Third. Finally, it is argued, and the majority hold that the National Labor Relations Act authorizes the injunction. The effect of this holding is that such act has made an exception to Judicial Code § 265. As before stated, I think the Toucey case is contrary. However, independently *765of that conclusion, I think there is no support for the view of the majority.
Power to issue the injunction must be found to have been expressly given by the act, or it must be implied from the act.
It is not asserted that power to enjoin the state court is expressly given by the act. Section 10(e) and (f) of the act authorize the grant of “temporary relief or restraining order” pending our determination of a petition for enforcement or petition to set aside the Board’s order, but not after such determination. The purpose is obvious, for whatever restraint is thought necessary is contained in the Board’s order if enforced.
Was the power granted by implication? The majority opinion stated that the problem here is “one which must be considered in the light of the policy and terms of the National Labor Relations Act” and that “the authority [of this court] to enjoin proceedings inimical to the free exercise of [its] exclusive jurisdiction is implicit in the terms of the law. See provision quoted in note 10.” Are we to understand that the majority holds that the power to enjoin the state courts is to be implied from the policy of the National Labor Relations Act? Are we to understand that the majority holds that the power to enjoin the state courts is to be implied from the provision quoted in footnote 10 of the opinion? From what provision are we to imply this power? The majority opinion falls short of expressly answering these questions, satisfactorily or otherwise.
The provision quoted in footnote 10 is that “the jurisdiction of the court shall be exclusive and its judgment and decree shall be final”, subject only to review by the Supreme Court. The state court proceedings assume such facts, and are based on the theory that in the exercise of our “exclusive” jurisdiction we have made a “final” decree, by which rights are awarded to persons, and that such rights are subject to seizure on process issued out of the state court. The state court proceedings are not “inimical” to the exercise of our exclusive jurisdiction because they neither challenge our exclusive jurisdiction nor contend that our decree is not final.
As to the policy of the act, referred to by the majority, it would seem that the Congressional statement of policy in § 1 is the best guide to such policy, yet the majority make no reference to that próvision. The real basis of the decision is a statement of conjured up fears having no foundation in fact.
The majority first says that “this court must of necessity retain full control over the subject matter until final compliance”. It is not pointed out how the state court proceedings in any way affect our “full control over the subject matter”. We still have as much control as we have ever had. Prior to the state court proceedings we could punish respondent on contempt proceedings for failure to obey our order, and we may still do so. I fail to see an evaporation of any control whatever.
Next it is asserted: “If, pending compliance, third persons were permitted to obtain fixed rights against the employer growing out of the back pay awards, the power of the court effectively to enforce its decree, either as originally entered or as modified as circumstances might require, would be subject to partial or complete frustration”. Again, it is not pointed out, how the state court proceedings frustrate our power, partially, completely, or otherwise or at all. We can as effectively enforce our decree, or any modification thereof, now as we could prior to the commencement of the state court proceedings. We could then punish for contempt, and we can do so now. If respondent chooses to pay in accordance with process of the state court, and such action is erroneous, our decree has not been complied with, and we may punish for contempt. There is no “frustration” of our power whatever.
It is next stated by the majority that until receipt of the award by the employees the subject matter remains exclusively under the administrative authority of the Board and in control of the court, and “outside interference of any sort would tend inevitably to shackle or impede the free exercise of their powers”. I am unable to agree with this apocryphal statement. How do the state court proceedings “shackle” either the authority of the Board or the control of this court? How do the state court proceedings “impede the free exercise” of either the authority of the Board or the control of this court? What are the “shackles” and the “impediments”? The answer to these questions are left, by the majority decision, to conjecture and speculation. If, as the majority holds, the state court proceedings are ineffective to accomplish their purpose, the obvious course for the Board and this court is to *766proceed as if the state court proceedings had not occurred. As previously stated, the Board and this court still have as much power as existed prior to the state court proceedings.
The majority also intimates that the state court proceedings amount to permitting the question, as to whether our order of enforcement is right or wrong, to be re-tried in the state court. Such conjecture is unfounded. The state court does not seek to try any question concluded by us. The proceedings are founded on the theory that we have conferred rights on employees, and that such rights are subject, to seizure in the state court. If the view of the state court is erroneous, certainly it furnishes no occasion for the use of injunctive powers.
It therefore appears that the only interference is with respondent. If it obeys the state court process, it may find it erred and. is subject to the ire of this court. Respondent has ample opportunity to protect itself in the state court proceedings, and by appeal therefrom ultimately to the Supreme Court of the United States.
Finally, the majority asserts: “The power to punish for contempt is not an adequate safeguard in any case. Certainly we cannot know that it would be. When the power is invoked it may prove futile, even as a purely punitive measure, as the employer by his enforced compliance with the state process may well have been stripped of the means of complying with our decree.” I believe this pronouncement to be based on groundless fears. It is based on at least two unwarranted assumptions finding no support in the record: (1) that respondent will risk the punishment which this court may impose by disobeying our order and declining to defend or take an appeal in the state court proceedings; and (2) that respondent is or will be insolvent.
There is little, if any reason, (certainly none appears in the record), for assuming that respondent will not protect itself from being compelled to pay the awards twice. If respondent was cautious enough to seek protection in this court, it seems likely that it would take similar action in the state courts, if the injunction were refused here. However, I can see no objection to a modification of the order, if requested by the Board, and the insertion of a provision enjoining payment of the awards to anyone but the employees named until further order of this court. Sufficient protection against financial disability would thus be afforded, because respondent, of necessity would be compelled to prosecute the state court proceedings to a conclusion in the Supreme Court of the United States.
Regarding the other assumption of the majority, I do not understand that by making the order awarding back pay, we guarantee that the awards will be paid. If respondent is insolvent, and unless bankruptcy or receivership intervenes, the race of diligence still controls suitors. Furthermore, if we may enjoin the state court proceedings in this case because they lessen the possibility of enforcement of the awards, why cannot we enjoin the proceedings in a state court wherein a third person —a stranger to respondent — seeks to enforce a judgment for personal injuries obtained against respondent. The possibility of payment of the awards is lessened in one case as much as the other, but I think no one would assert that we could enjoin such state court proceedings to insure payment of the back-pay awards prior to the judgment solely on the ground that respondent might not be able to pay the judgment and the awards.
The Respondent’s Answer.
Respondent has asked for a declaration of rights and liabilities under the decree, and for an injunction restraining all parties including the Board from taking any action contrary to the declaration to be made by us. The real relief sought is the injunction. This court has no more power to issue an injunction herein at the request of respondent than on the petition of the Board. Furthermore, our power to comply with respondent’s prayer is granted by the act, if at all, only by implication. The question is not argued, the situation here being more a consent proceeding than an adversary one. Under these circumstances, I think no declaration of rights and liabilities should be made.
The Board’s petition and respondent’s cross-claim should be denied.