Court Opinion

ID: 8904353
Source: CourtListenerOpinion
Date Created: 2022-11-27 01:39:21.536965+00
Date Added: 2024-06-11T17:08:04.034435
License: Public Domain

ADAMS, Circuit Judge,
dissenting.
I respectfully dissent, for I believe that the complaint does state a cause of action as to which relief may be granted. At the same time, however, I would not scrutinize the conduct of the New Jersey officials on the basis of the open-ended standard formulated by Judge Aldisert. Thus I am impelled to set forth separately my view that plaintiffs have advanced certain factual allegations that are sufficient to survive the defendants’ motion to dismiss.1
A.
Plaintiffs, fifteen local unions of the Amalgamated Transit Union, charged that New Jersey officials have violated the National Labor Relations Act (hereinafter NLRA) by interfering with collective bargaining between themselves and a number of transit companies. This alleged violation occurred when state officials, including the Governor, the New Jersey Commissioner of Transportation and the Governor’s Counsel, proclaimed that the state would no longer subsidize any troubled transit companies that agreed to include an “uncapped” cost of living clause in their collective bargaining contracts or to grant wage increases higher than those extended to state employ*1039ees.2 In particular, New Jersey officials announced to the unions that the state “objected to the cost of living principle as it existed in current contracts and was going to ‘destroy’ it.”3
The present action is grounded on the proposition that the warnings issued by the state officials, which under the circumstances severely limit the collective bargaining process insofar as provisions dealing with wages and cost of living increases are concerned, are at variance with federal labor law, and are therefore precluded under the Supremacy Clause.4
All parties to this dispute would appear to concede that the doctrine of preemption provides an appropriate framework for the analysis of the unions’ claims set forth here. Yet it is necessary to clarify the sense in which the preemption rationale applies to this particular case, for it does not present a classic preemption situation. In the classic preemption prototype, there is a federal statute that comprehensively regulates an area of conduct and there is a state statute or regulation that is said to violate the federal law.5 The state action sought to be proscribed here, however, is narrower in scope and of a different form than in the usual preemption context.
Nonetheless, the preemption cases cited by the majority provide a helpful analytical structure because they elaborate the general theory that undergirds federal preclusion of state conduct. The preemption decisions articulate the principle that, state action may be held violative of federal law not only when the Congressional intent to preclude state action is “ ‘clear and manifest,’ ”6 but also when the state action stands as “an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.”7 Thus, if the state action alleged here contravenes the fundamental aims of Congress in enacting the NLRA, then the conduct may be found to violate that statute and to be foreclosed by it, even if such act is not in the form of the presence of a statute or regulation. This is so because the rationale of preemption would not appear to require the presence of a stat*1040ute or regulation in order to be applicable, for the basic concern is with impinging upon the intent of Congress and undermining the federal statutory scheme.
In this case, then, the principal question is whether, viewing the complaint in the light most favorable to the plaintiffs, the warnings and other conduct of the state officials may be found to thwart the realization of any significant portion of the purposes and objectives of Congress as articulated in the NLRA.
B.
One of the central aims of the NLRA is to guarantee that the process of collective bargaining will be governed by “the free play of economic forces.”8 The legislation, was designed to afford private parties the opportunity to reach their own agreement regarding the terms and conditions of employment and to settle upon “an acceptable common ground” 9 without dictation by the government.10 As the Supreme Court stated in H. K. Porter Co., Inc. v. NLRB,11 the “fundamental premise” of the NLRA was one of “private bargaining under governmental supervision of the procedure alone, without any official compulsion over the actual terms of the contract.”
In order to establish that the basic statutory purpose of the NLRA, namely, to supervise the procedure but not to interfere with the substance of collective bargaining, was undermined by the conduct of the New Jersey officials, plaintiffs must demonstrate first, that the action complained of is governmental conduct and not merely private behavior,12 and second, that the primary aim of the NLRA in fact has been frustrated.
Surely, as stated, the conduct of the New Jersey officials cannot plausibly be construed, at least at this stage of the proceedings, as essentially non-governmental behavior. Perhaps it may be argued that, in a purely economic sense, New Jersey’s power with respect to the transit companies is similar to that of a private purchaser of a significant quantity of transportation service. Nevertheless, in the present situation New Jersey was not merely threatening to bring some economic pressure to bear on *1041the companies, as the majority suggests at p. 1029, but rather was warning that it would take definitive action which inevitably would lead to the financial ruin of the companies. This is so since a fair reading of the complaint discloses that the companies were able to survive only because of the state subsidies.13 Moreover, under the applicable statutory provisions, it would appear that the state government has additional power to take direct action against the transportation companies, while a private purchaser is ifestricted primarily to the economic impact it may have on the contracting companies.14 Thus, when the state officials conveyed their warnings to the unions and to the management negotiators, it must be assumed at this stage of the litigation that such officials operated in their capacity as representatives of government and not as private actors.
In considering whether the NLRA’s fundamental purpose of protecting private collective bargaining has been encroached upon, it is necessary to determine whether the warnings and conduct of the state administrators constitute an attempt by the government impermissibly to dictate substantive terms of the parties’ agreement.15 The majority states at p. 1027 of its opinion, “. . . in the present case New Jersey has not directly commanded or prohibited the conduct of third parties but has merely sought to influence private conduct by threatening to withhold discretionary subsidies.” However, at a minimum one declaration was made by the officials which as a practical matter is tantamount to a prohibition of certain terms in the collective bargaining agreement, namely, that the state would “destroy” a cost of living clause in the employment contract. This warning, which clearly goes beyond a general pronouncement of governmental policy, focuses immediately upon a crucial issue in the labor-management negotiations between the unions and the companies. When considering this charge in light of the defendant’s motion to dismiss, it is necessary, under the rules governing such motions, to draw the inference that the parties may have interpreted the admonition as a ban on critical clauses in the labor contract.16
In evaluating the union’s position, it is crucial to keep in mind the distinction between a particularized threat of drastic action, on the one hand, and a generalized policy statement regarding a program that the officials are responsible for superintending, on the other hand. When the unions claim that a threat has been made, they complain that the state officials in effect have sought to dictate specific terms of the collective bargaining agreement. Such an assertion is buttressed here by the strength of the denunciatory language, which threatens not just to oppose but rath*1042er to “destroy” a contractual clause. On the basis of this averment, the case should be remanded for further proceedings in which the validity of the unions’ charge may be properly and fully ascertained.17
C.
Although I would reverse the dismissal of the complaint and remand the case for a hearing, I am unable to accept the position advanced by Judge Aldisert that an attempt by New Jersey officials merely to alter the economic forces at work in the collective bargaining process or to influence the parties by itself violates the NLRA.18 In the context of an industry heavily subsidized by the state, a large number of statements of governmental policy could alter in some sense the economic forces or influence the terms which negotiating parties may reach. To establish a violation of the NLRA, however, the unions would first have to allege and then demonstrate that the state officials attempted to dictate specific terms of the collective bargaining agreement, such as by seeking squarely to prohibit the parties’ acceptance of an “uncapped” cost of living clause or wage increases greater than those granted to state employees.
To do anything further would be to expand the rationale present in preemption cases beyond its logical reach.19 Further, and quite significantly, narrowing the scope of state conduct that is foreclosed by the NLRA to activity by state officials designed to dictate substantive terms in labor contracts is compelled by a due regard for first amendment interests.20
The state administrators here are charged with having expressed themselves in a manner violative of the NLRA. The first amendment’s protection of expression traditionally has been of overriding significance in safeguarding public speech about political issues of great concern to citizens, and the matters involved in this case certainly fit within such a category.21 Because *1043of the importance of the first amendment and the emphasis on permitting officials to speak fully about public issues, courts have been cautious in restricting the scope of such expression, and only exceedingly narrow exceptions have been crafted to apply to comments amounting to violations of law, such as those referred to in Section B of this opinion 22
An analogous situation to that arising in this case occurs when an employer makes statements to his employees in an attempt to discourage them from joining a union. The Supreme Court in NLRB v. Gissell Packing Co., Inc.,23 indicated that an employer has a broad first amendment right to express himself that is consistent with the equal right of the employees to state their views. However, the employer may not make statements that contain a “ ‘threat of reprisal or force or promise of benefit,’ and the Court in Gissell proceeded to add:
“If there is any implication that an employer may or may not take action solely on his own initiative . . . the statement is no longer a reasonable prediction based on available facts but a threat of retaliation . . . and as such without the protection of the First Amendment.” 24
Apart from the narrowly circumscribed restriction pertaining to threats, the employer would appear to be entitled under Gissell, in the exercise of his first amendment rights, to express his views about unions in general or about the particular union organizing in his plant.25 Similarly, here, the state officials cannot be prevented from making general policy declarations, but may be restricted only from making statements in the nature of specific threats directed at the parties to labor negotiations.26
In sum, given the threat by state officials to ban or destroy critical clauses of a collective bargaining agreement, the complaint here should not be dismissed. But because I believe that it is essentially these specific threats that rise to the level of a violation of federal law, not the announcements expressing a generalized policy position, I cannot subscribe to an interpretation of the NLRA which would impose a blanket prohibition of declarations by state officials criticizing cost of living or similar provisions in a labor contract.

. As both Chief Judge Seitz and Judge Aldisert have noted, in reviewing a determination by a district court that plaintiffs have not stated a cause of action upon which relief may be predicated, the allegations in the complaint must be taken as true. In addition, all inferences must be drawn in favor of the plaintiffs, and dismissal may be affirmed only if it appears certain that no set of facts may be shown on which relief may be granted.

. New Jersey has been engaged in a program of subsidizing transportation companies in “imminent danger of terminating all bus services or all rail transit services” in order to guarantee the continuation of essential transportation throughout the state. See 27 N.J.Stat.Ann. § 1A-28.7 (Supp.1977).

. Plaintiffs alleged that on January 9, 1976, New Jersey’s Commissioner of Transportation, Alan Sagner, called a meeting of the local union officials involved in contract negotiations with the transit companies and there announced that “the State would not continue its policy of subsidizing troubled private transit companies if the unions insisted on retaining the ‘uncapped cost of living’ clause in their contract. ...” On February 6, 1976, Sagner and the Counsel to Governor Byrne, Lewis Kaden, met with union officials in Washington, D. C., and noted that the state objected to the cost of living clause in the existing contracts and would “destroy” it.
After the parties reached an impasse in their negotiations, a strike ensued during which Governor Byrne publicly declared, once again, that the state would not subsidize any transit company that had a cost of living clause in its labor contract. Also, Commissioner Sagner distributed to both sides in the controversy a written document announcing that if the labor contracts included salary and benefit increases above those awarded state employees, the state would terminate its subsidies to the affected companies.

. U.S.Const. Art. VI, § 2.

. See, e. g., DeCanas v. Bica, 424 U.S. 351, 96 S.Ct. 933, 47 L.Ed.2d 43 (1976); Florida Lime & Avocado Growers v. Paul, 373 U.S. 132, 83 S.Ct. 1210, 10 L.Ed.2d 248 (1963).

. Florida Lime & Avocado Growers v. Paul, 373 U.S. 132, 146, 83 S.Ct. 1210, 10 L.Ed.2d 248 (1963), quoting Rice v. Sante Fe Elevator Corp., 331 U.S. 218, 230, 67 S.Ct. 1146, 91 L.Ed. 1447 (1947). See also National Association of Regulatory Utility Commissioners v. Coleman, 542 F.2d 11, 13-14 (3d Cir. 1976).

. Hines v. Davidowitz, 312 U.S. 52, 67, 61 S.Ct. 399, 404, 85 L.Ed. 581 (1941). See DeCanas v. Bica, 424 U.S. 351, 363, 96 S.Ct. 933, 940, 47 L.Ed.2d 43 (1976) (“There remains the question whether, although the INA contemplates some room for state legislation, § 2805(a) (of the California Labor Code) is nevertheless unconstitutional because it ‘stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress’ in enacting the INA. . . We do not think that we can address that inquiry upon the record before us.”)

. NLRB v. Nash-Finch Co., 404 U.S. 138, 144, 92 S.Ct. 373, 377, 30 L.Ed.2d 328 (1971). See generally 29 U.S.C. § 151.

. 1 NLRB Ann.Rep., pp. 85-86, quoted in NLRB v. Insurance Agents, 361 U.S. 477, 485, 80 S.Ct. 419, 4 L.Ed.2d 454 (1960).

. See H. K. Porter Co., Inc. v. NLRB, 397 U.S. 99, 90 S.Ct. 821, 25 L.Ed.2d 146 (1970), which holds that although the NLRB has power to require the employer and employee to negotiate, it does not have power to compel either party to agree to substantive contractual provisions. The Board had found that the company’s refusal to bargain about the “check off” dues owed the union by its members was not in good faith. In refusing to approve this practice, the Court emphasized:
The object of this Act was not to allow governmental regulation of the terms and conditions of employment, but rather to ensure that employers and their employees could work together to establish mutually satisfactory conditions . . . But it was recognized from the beginning that agreement might in some cases be impossible, and it was never intended that the Government would in such cases step in, become a party to the negotiations and impose its own views of a desirable settlement, (pp. 103-104, 90 S.Ct. p. 823.)
See also Lodge 76, International Association of Machinists and Aerospace Workers, AFL-CIO v. Wisconsin Employment Relations Commission, 427 U.S. 132, 149-50, 96 S.Ct. 2548, 49 L.Ed.2d 396 (1976), and NLRB v. Insurance Agents, 361 U.S. 477, 490, 80 S.Ct. 419, 428, 4 L.Ed.2d 454 (1960), where the Court stated: “Our labor policy is not presently erected on a foundation of government control of the results of negotiations.”

. 397 U.S. 99, 108, 90 S.Ct. 821, 826, 25 L.Ed.2d 146 (1970).

. As the majority has pointed out, the NLRA interdicts the activities of private parties only if they are employers or labor organizations or the agents of either, and its definition of “employer” specifically excludes “any State or political subdivision thereof” acting in the capacity of employer. 29 U.S.C. § 152 (Supp.1977). See Judge Seitz’ opinion at p. 1029.
The suggestion has also been made that New Jersey’s role in this case is similar to that of an employer, and as such New Jersey is exempt from the NLRA. Inasmuch as facts supporting this latter view are not in the record before us, however, we are not able to address that important issue.

. The program of subsidies was specifically designed only for companies in “imminent danger” of terminating services. See 27 N.J.Stat. Ann. § 1A-28.7 (Supp.1977).

. The “purpose and intent” of New Jersey’s Transportation Act is “to establish the means whereby the full resources of the State can be used and applied” in order “to solve or assist in the solution of the problems of all modes of transportation.” 27 N.J.Stat.Ann. § 1A-1. The agency has power to "(i)nvestigate any matters concerning any carrier under contract to the agency and in aid of such investigation . . . The carrier shall make available its property, books, records, or documents.” 27 N.J.Stat. Ann. § 1A-25(b). Moreover, the agency may “. . .do and perform any and all acts or things necessary, convenient or desirable for the purposes of the agency or to carry out any power expressly given in this act.” 27 N.J.Stat.Ann. § lA-25(h).

. As the majority concedes at p. 1028 of its opinion: “It cannot be doubted that New Jersey would be barred under the Supremacy Clause from prohibiting private parties from agreeing to unlimited cost of living clauses in their collective bargaining agreements.”

. The prohibition of such a threat would not frustrate the state’s power to operate its Transit Subsidy Program so as to guarantee essential transportation services in New Jersey. Because the curbing of this warning would be a relatively narrow prohibition, it would not affect the state’s fundamental power to establish policy regarding the subsidization of the transportation industry. A basic attribute of state sovereignty, or a function essential to a state’s separate and independent existence, is thus not at stake here. Cf. National League of Cities v. Usery, 426 U.S. 833, 847-52, 96 S.Ct. 2465, 49 L.Ed.2d 245 (1976).

. In light of the fact that the majority does not address the question whether the Norris-LaGuardia Act precludes a district court from granting relief in this case, no purpose would be served by my discussing that Act at this point, especially given Judge Aldisert’s separate treatment of its application to this controversy.

. At page 1034 of his opinion, Judge Aldisert states: “What is beyond the pale of permissible action is official activity that seeks to alter the economic forces at work or to influence the substantive terms of collective bargaining agreements.”

. The Supreme Court has made it clear that preemption of state action is appropriate only when the nature of the regulated subject matter permits no other conclusion or when Congress has unmistakably so ordained. See Florida Lime & Avocado Growers v. Paul, 373 U.S. 132, 142, 83 S.Ct. 1210, 10 L.Ed.2d 248 (1963). It has not been demonstrated in this case, at' least thus far, that policy statements alone, in the absence of threats, fall within these categories or that they prevent the full accomplishment and execution of the purposes of Congress. See Hines v. Davidowitz, 312 U.S. 52, 67, 61 S.Ct. 399, 85 L.Ed. 581 (1941). Both Florida Lime and Hines are cited with approval in DeCanas v. Bica, 424 U.S. 351, 356, 364, 96 S.Ct. 933, 47 L.Ed .2d 43 (1976).

. It is important to bear in mind that where various constructions of a statute are possible, the judicial branch is admonished to adopt the one that avoids raising problems of constitutional dimensions. Cf. Ashwander v. TVA, 297 U.S. 288, 348, 56 S.Ct. 466, 483, 80 L.Ed. 688 (1936), quoting Crowell v. Benson, 285 U.S. 22, 62, 52 S.Ct. 285, 76 L.Ed. 598 (1932), where Justice Brandéis, in a concurring opinion, reaffirmed the rule that “(w)hen the validity of an act of the Congress is drawn in question, and even if a serious doubt of constitutionality is raised, it is a cardinal principle that this Court will first ascertain whether a construction of the statute is fairly possible by which the question may be avoided.”

. See e. g., Bond v. Floyd, 385 U.S. 116, 135-36, 87 S.Ct. 339, 349, 17 L.Ed.2d 235 (1966): “The manifest function of the First Amendment in a representative government requires that legislators be given the widest latitude to express their views on issues of policy. The central commitment of the First Amendment . is that ‘debate on public issues should be uninhibited, robust, and wide-open.’ ” The view, embraced by the Court in Bond, that legislators have “an obligation to take positions on controversial political questions so that their constituents can be fully informed . . id., applies equally to executive officials such as are involved in this case. See also Elrod v. Burns, 427 U.S. 347, 356-57, 96 S.Ct. 2673, 49 L.Ed.2d *1043547 (1976); New York Times Co. v. Sullivan, 376 U.S. 254, 270, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964).

. The Supreme Court has held from time to time that certain forms of speech are outside the protection of the first amendment, and that general regulatory statutes not intended to control the content of speech, but incidentally limiting its unfettered exercise, are permissible when they have been found justified by valid governmental interests. NAACP v. Button, 371 U.S. 415, 453, 83 S.Ct. 328, 9 L.Ed.2d 405 (1963) (Harlan, J., dissenting); Konigsberg v. State Board, 366 U.S. 36, 50-51, 81 S.Ct. 997, 6 L.Ed.2d 105 (1961); Breard v. Alexandria, 341 U.S. 622, 71 S.Ct. 920, 95 L.Ed. 1233 (1951); Cox v. New Hampshire, 312 U.S. 569, 61 S.Ct. 762, 85 L.Ed. 1049 (1941).
See also, Teamsters Union v. Vogt, Inc., 354 U.S. 284, 77 S.Ct. 1166, 1 L.Ed.2d 1347 (1957); Giboney v. Empire Storage & Ice Co., 336 U.S. 490, 69 S.Ct. 684, 93 L.Ed. 834 (1949).

. 395 U.S. 575, 617-18, 89 S.Ct. 1918, 23 L.Ed.2d 547 (1969).

. 395 U.S. at 618, 89 S.Ct. at 1942.

. See also, Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council Inc., 425 U.S. 748, 762 and 763 n.17, 96 S.Ct. 1817, 48 L.Ed.2d 346 (1976).

. Because the parties did not brief the first amendment issue in this case, it would not seem advisable, at least at this time, to consider it in further depth. Cf. U. S. v. O’Brien, 391 U.S. 367, 390, 88 S.Ct. 1673, 20 L.Ed.2d 672 (1968) (Douglas, J., dissenting).