Court Opinion

ID: 3017109
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:16:37.735885+00
Date Added: 2024-06-11T12:46:32.032570
License: Public Domain

__________

                         Nos. 95-1886 and 95-1944
                                __________

BE&K Construction Co.,              *
                                    *
      Plaintiff - Appellee,         *
                                    *
      v.                            *  Appeal from the United States
                                    *  District Court for the
United Brotherhood of               *  Eastern District of Arkansas
Carpenters and Joiners of           *
America, AFL-CIO; United            *
Paperworkers International          *
Union, AFL-CIO,                     *
                                    *
      Defendants - Appellants.      *
                               __________

                         Submitted:    January 10, 1996

                             Filed:    July 18, 1996
                                 __________

Before WOLLMAN, CAMPBELL,* and MURPHY, Circuit Judges.
                                __________

MURPHY, Circuit Judge.

     This case involves claims brought by BE&K Construction Company (BE&K)
against the United Paperworkers International Union (Paperworkers) and the
United Brotherhood of Carpenters and Joiners of America (Carpenters).   BE&K
alleged that the unions had violated federal labor law and tortiously
interfered with its contractual relations under Arkansas law.   After a jury
awarded BE&K $20,000,000 in punitive damages and $125,000 in compensatory
damages, the district court denied motions for judgment as a matter of law,
for a new trial, and for remittitur.    The unions appeal

     *The HONORABLE LEVIN H. CAMPBELL, United States Circuit
     Judge for the First Circuit, sitting by designation.
from   the order denying their post-trial motions and from the final
judgment.    We reverse and remand.

                                      I.

       BE&K is a non-union merit shop construction contractor headquartered
in Birmingham, Alabama.     It performs in-plant and construction work for
various industries throughout the country.        BE&K was hired by Potlatch
Corporation as the general contractor on a construction project scheduled
to begin in February 1992 at the Potlatch Cypress Bend mill in McGehee,
Arkansas.    Potlatch is a paper manufacturing company headquartered in San
Francisco, California that operates a number of mills in northern Idaho,
northern Minnesota, and southern Arkansas.

       In early 1991 the Cypress Bend mill solicited bids for installation
of a piece of equipment called a top former, or Bel Bond.     Four bids were
                                              1
received, including BE&K's bid of $582,000.       George Hight, the Potlatch
Project Engineer responsible for selecting a contractor for the Bel Bond
project, contacted a BE&K manager on October 10, 1991 and informed him that
Potlatch had decided to award the project to BE&K.    BE&K began preparations
for the project.

       Potlatch employees at the Cypress Bend paper mill are represented by
two local Paperworkers unions, a maintenance local and a production local.2
The Paperworkers are an international union that represents in-plant
production and maintenance workers at paper mills throughout the United
States.     The evidence at trial indicated that the local unions and the
company maintain a

       1
        The bid amount was later reduced to approximately $575,000.
       2
      The local unions were originally named as defendants in
this action, but prior to trial BE&K voluntarily dismissed with
prejudice its claims against them.

                                      2
cooperative   relationship.      Potlatch   management   meets   regularly   with
representatives of the local unions and the Paperworkers to discuss issues
of mutual interest concerning the operation of the Cypress Bend plant.

     One such mutual interest meeting took place at the Cypress Bend plant
on October 24, 1991, soon after Potlatch had hired BE&K for the Bel Bond
construction project.     The meeting was attended by thirteen Potlatch
officials, including John Richards, the president and chief operating
officer who was based in San Francisco but was in Arkansas to attend
meetings, George William Morton, the Cypress Bend plant manager, and
Beverly Burchfield, the Cypress Bend employee relations manager; ten local
union officials, including Paperworkers Local 1532 President Bob Barber;
and two international Paperworkers representatives, Joe Bradshaw and Tommy
McFalls.   The meeting lasted approximately two hours and covered a variety
of topics.

     At the meeting on October 24, Anna Haney, a Potlatch production
superintendent, made a short presentation about the status of various
projects in her division and mentioned that BE&K had been awarded a
contract on the Bel Bond project.    After her presentation, Tommy McFalls,
Joe Bradshaw and Bob Barber made brief comments expressing their concern
about the decision to hire BE&K and asked the company to reconsider.          All
three stated that they did not want anything to interfere with the good
relationship Potlatch had with the local unions and said that hiring BE&K
could lead to problems.       They mentioned that BE&K's involvement in the
project    would likely attract the attention of the Carpenters.              The
Carpenters are a separate international union that represents workers in
various trades and crafts, including carpenters and millwrights who build,
renovate, and maintain industrial plants and machinery.      They had organized
a national publicity campaign to expose disputed labor practices of BE&K
and other non-union construction contractors.      McFalls explained that the
Carpenters

                                       3
might picket and handbill at the site and that it was possible the
unionized employees at Potlatch might join in.               All the testimony from
those present at the meeting, including the union representatives and the
Potlatch officers, described the comments as bland and nonthreatening.              No
member of the Carpenters was present at the meeting.

        Potlatch president Richards later testified that he had not been
aware that BE&K had been hired for the Bel Bond project until it was
disclosed at the meeting.       When he heard that Potlatch had contracted with
BE&K, he was surprised.              He knew that BE&K had a reputation as a
confrontational non-union company.          He had also read about a riot that had
occurred two years earlier in International Falls, Minnesota after a
company had hired BE&K as construction manager for a major expansion
project.3      He feared that hiring BE&K could cause his company grief.            He
was surprised that the reaction of the union representatives was so low key
and bland.       When they suggested in their remarks that there could be
problems, he again thought about the incident at International Falls.
There was no evidence that that incident came to mind for any of the other
twelve Potlatch officials in attendance or any of the union officials.

        After the meeting, Richards told Morton that he was disturbed that
BE&K was involved in the construction project.              He was concerned that it
might interfere with the good relationship between the company and the
local       unions   and   present    possible   problems    similar   to   those   at
International Falls.       He asked Morton to review the situation and attempt
to get out of the contract.          Richards later called Dick Congrieve, Morton's
boss, and asked him to follow through on the situation.           After calculating
the costs

        3
      Richards had read articles from Minnesota papers about the
International Falls riot which had been supplied by a clipping
service.

                                            4
involved, Morton terminated the contract with BE&K4 and hired Boyed Sanders
Construction Co., a union contractor, to do the job.

      On October 28, a Potlatch official informed Bob Barber, the president
of   one   of   the   local   unions,   that   the   contract   with   BE&K   had   been
terminated, but that it would be better if that fact were not advertised.
In   April 1992, The Paperworker, the international union's magazine,
published a report on a campaign to oust BE&K and other non-union
contractors from paper mills and plants.             It included the statement that
"[e]fforts by Paperworkers Region Seven prevented BE&K from starting
already-scheduled work at Potlatch's McGehee, Ark., mill."                (Carpenters
Appendix at 345).

      There was no evidence that the Carpenters were involved in the
October 24 meeting or that they even knew about it at the time or knew that
Potlatch had hired BE&K, but there was evidence they were involved in a
national publicity campaign directed at disputed labor practices of BE&K
and other non-union contractors.        In that campaign they sought and obtained
substantial cooperation from the Paperworkers.            The campaign involved the
distribution of leaflets, informational picketing, publicity, speeches,
presentations, and communications urging companies not to award contracts
to BE&K. Neither party disputes that these activities are protected under
federal law.      The campaign raised issues concerning employee wages and
benefits, job related safety, and the use of non-local workers on its
projects.       BE&K admits that it has a reputation as a company that is
confrontational about union issues and has regularly worked in place of
striking union members.

      Edward J. Durkin, a leader of the Carpenters publicity

      4
      After the termination, Potlatch sent BE&K a check for
$35,400. This represented payment for costs that BE&K claimed to
have incurred on the project. Potlatch requested further
information about additional claimed expenses, but BE&K never
responded nor attempted to collect any additional payment.

                                           5
campaign, learned after the fact that Potlatch had terminated its contract
with BE&K.     On November 8, 1991 he described the termination in a letter
he sent to Carpenters agents involved in the campaign:

              The president of the [Paperworkers], Wayne Glenn,
              reported last week to the [Carpenters] general president
              that Potlatch Corporation cancelled a construction
              project with BE&K at McGee [sic], Arkansas, just two
              weeks after it began to man the job. Paperworkers Vice-
              President Joe Bradshaw forcefully presented to Potlatch's
              CEO the union's concerns about the presence of BE&K at
              the mill. Within several days of the discussion, BE&K's
              200 men were off the site [and] all evidence of BE&K was
              gone. . . . Solidarity works.

(Carpenters Appendix at 165).

     After the Bel Bond contract was terminated, BE&K brought this action
against the Carpenters and Paperworkers.     It claimed that the unions had
engaged in unlawful secondary boycott activity in violation of § 303(a) of
the Labor Management Relations Act (LMRA), 29 U.S.C. § 187(a), by using
threats and coercion to force Potlatch to cease doing business with BE&K.
It also asserted that the unions had tortiously interfered with its
contractual relationship or business expectancy under Arkansas law.

     Both the federal and state claims were based on the statements made
by Paperworkers McFalls, Barber, and Bradshaw at the October 24, 1991
mutual interest meeting with Potlatch officials.     BE&K alleged that those
comments amounted to threats of violence or other unlawful union conduct
that had caused Potlatch to terminate its contract with BE&K, and asserted
that the Paperworkers representatives were speaking as agents of the
Carpenters.

     The case was tried to a jury during four days in April 1994.         To
support its claims that the unions had threatened Potlatch, BE&K

                                       6
presented evidence describing what was said at the October 24 mutual
interest meeting.     This included excerpts from a deposition given by
Richards, testimony from Beverly Burchfield who had prepared the meeting
agenda and minutes, and deposition testimony from Morton who had also been
present at the meeting.    In addition, there was testimony describing the
project, the bidding, the oral acceptance, the termination of the contract,
and damages.   Ted Kennedy, the chairman and CEO of BE&K, talked about the
BE&K project at International Falls, and excerpts were read from Edward
Durkin's deposition describing the Carpenters publicity campaign.

     Over strong objections from the unions, BE&K was allowed to show a
videotape of a 1989 riot at a BE&K construction workcamp in International
Falls, Minnesota.     The seventeen minute video was recorded by three
cameramen hired by BE&K and featured some descriptive commentary by an
unnamed narrator.   It showed a large crowd gathering outside the camp gate,
the gate being battered down, groups of men milling around the camp, and
cars and trailers being overturned and burned.   The unions argued that the
videotape was irrelevant and prejudicial because neither the Carpenters nor
the Paperworkers had any connection to the events that it depicted.5   BE&K
stated it was offered to show what Richards had in mind when he thought
about the International Falls incident during the October 24 meeting.

     After BE&K presented its evidence, the unions jointly moved for
dismissal of its claims as a matter of law under Fed. R. Civ. P. 50(a).
The district court denied the motion as to the federal claim and took it
under advisement as to the state claim.    The

     5
      They also argued that the tape was inadmissible because
BE&K had not produced it during discovery.

                                     7
unions presented their case,6 and no rebuttal evidence was offered by BE&K.
The Rule 50 motion was not renewed at the end of all the evidence.

      The jury found in favor of BE&K on both the federal and state claims.
It   found    the   unions    jointly   and       severally   liable   for   $125,000   in
compensatory damages, without assigning those damages to either the federal
or state claims.       The jury also found each union separately liable for
$10,000,000 in punitive damages on the state law claim.

      After trial, the unions filed a joint motion for judgment as a matter
of law, or in the alternative, for a new trial or remittitur.                     After a
hearing on the motion, the district court denied it on the merits.                   BE&K
did not argue that the unions had waived their right to seek judgment as
a matter of law by failing to renew their Rule 50 motion at the close of
all the evidence, and the district court did not address the issue.

                                          II.

      The    arguments   on    appeal   are       not   identical   for   the   individual
appellants.    The Carpenters argue that they are entitled to judgment as a
matter of law because the evidence does not support any claim against them.
There is no evidence of their participation in the October 24 meeting where
the alleged threats were made, and there is insufficient evidence to
support any theory that the Paperworkers were acting as their agents.                 Both
unions argue that judgment as a matter of law should have been granted on

      6
      The unions called four witnesses at this point: Potlatch
President Richards, Plant Manager Morton, and union
representatives McFalls and Barber. Richards and Morton had
already testified by way of deposition as part of BE&K's case so
only McFalls and Barker were completely new witnesses. (Project
Engineer Hight had been called before the close of BE&K's case in
order to accommodate his schedule.)

                                              8
the state claim because of preemption and on the federal claim because of
insufficient evidence.    They argue in the alternative that a new trial
should be granted because the district court erred in admitting the riot
videotape and in instructing the jury on punitive damages.     Finally, the
unions argue for substantial remittitur of the punitive damages award
because it is grossly out of proportion to the legal wrong alleged.

     BE&K responds that the unions waived their claims for judgment as a
matter of law by failing to renew their Rule 50 motion at the close of
evidence.   It also contends that there is sufficient evidence in the record
from which the jury could reasonably infer an agency relationship and which
supports the verdict on both the federal and state claims.

                                     A.

     BE&K argues that both unions waived any right to judgment as a matter
of law because they failed to renew their Rule 50 motion at the close of
the case.   Rule 50(b) provides for the renewal of a motion for judgment
after trial when it has been made at the end of all the evidence.7      The
unions jointly moved for judgment at the close of the plaintiff's case, and
then again after trial.   During trial the court denied the unions' motion
as to the federal claim, but deferred ruling on the portion dealing with
the state claim.

     7
      Rule 50(b) provides:

     If, for any reason, the court does not grant a motion
     for judgment as a matter of law made at the close of
     all the evidence, the court is considered to have
     submitted the action to the jury subject to the court's
     later deciding the legal questions raised by the
     motion. The movant may renew its request for judgment
     as a matter of law by filing a motion no later than 10
     days after entry of judgment -- and may alternatively
     request a new trial or join a motion for a new trial
     under Rule 59.

                                     9
Not much new evidence was submitted after the motion was made.          The
additional testimony was completed in less than a day, and BE&K offered no
rebuttal evidence.

     If a party does not move for judgment as a matter of law at the close
of all the evidence, it normally cannot later argue that there was
insufficient evidence to support the verdict.    Pulla v. Amoco Oil Co., 72
F.3d 648, 655 (8th Cir. 1995).          There are at least two recognized
exceptions, however.   The first is where a Rule 50 motion is made shortly
before the close of the evidence and the court indicates in some way that
it need not be renewed in order to preserve the right to challenge the
verdict.   Id.; Halsell v. Kimberly-Clark Corp., 683 F.2d 285, 294 (8th Cir.
1982), cert. denied, 459 U.S. 1205 (1983); United States v. 353 Cases * *
* Mountain Valley Mineral Water, 247 F.2d 473, 477 (8th Cir. 1957).      The
second is where not allowing such claims would constitute plain error
resulting in a manifest miscarriage of justice.      Pulla, 72 F.3d at 655;
Jones v. St. Clair 804 F.2d 478, 479-80 (8th Cir. 1986); 353 Cases, 247
F.2d at 477 (court may review errors that are "obvious" or that "seriously
effect the fairness and integrity of the judicial proceedings").

     A variation of the standard exception has been recognized when 1) the
district court defers ruling on the motion, 2) no evidence related to the
claim comes in after the motion, and 3) very little time passes between the
motion and the close of the evidence.     See Purcell v. Seguin State Bank &
Trust Co., 999 F.2d 950, 956 (5th Cir. 1993); Boynton v. TRW, Inc., 858
F.2d 1178, 1186 (6th Cir. 1988) (en banc); see also Myers v. Norfolk
Livestock Market, Inc., 696 F.2d 555, 558 (8th Cir. 1982).

     BE&K raises waiver for the first time on appeal, claiming the unions
waived their rights to argue insufficiency of the evidence when they failed
to renew their motion at the close of evidence.      BE&K did not raise any
Rule 50 objection to the unions' post-trial

                                     10
motion, however, either in writing or at the hearing on it.     The district
court was therefore not asked to consider waiver and it ruled on the
merits.    If BE&K had raised waiver before the district court, that court
would have had the opportunity to consider all the relevant circumstances.

        Both sides missed a procedural step, and it is appropriate to reach
the merits under all the circumstances.       An exception to the Rule 50
requirement of renewal at the close of the evidence is    basically made out
here.    Only a short time elapsed between the unions' motion and the close
of all the evidence, only two witnesses were called who had not already
testified, no additional evidence was put in by BE&K, and the trial judge
deferred ruling on part of the motion.

                                     B.

        The Carpenters claim that they are entitled to judgment as a matter
of law because there is no evidence to show that they were involved in the
events leading to the termination of BE&K's contract.    Judgment as a matter
of law is appropriate only if the evidence on the record is susceptible of
no reasonable inference sustaining BE&K's position.     Kaplon v. Howmedica,
Inc., 83 F.3d 263, 266 (8th Cir. 1996); Smith v. World Ins. Co., 38 F.3d
1456, 1460 (8th Cir. 1994).   All conflicts must be resolved in BE&K's favor
and the court will not engage in a weighing or evaluation of the evidence
or consider questions of credibility.     Kaplon, 83 F.3d at 266.   A motion
for judgment as a matter of law presents a legal question, and its denial
is reviewed de novo.    Id.

        It is undisputed that the Carpenters and the Paperworkers are
completely separate entities and that no member of the Carpenters was
present at the October 24 meeting when the alleged threats were made.
There is no evidence that either the Paperworkers or the Carpenters had
advance knowledge of what would be announced or

                                     11
discussed at the meeting and no evidence that the Carpenters had any
contact with the Paperworkers regarding the BE&K contract until after it
had been terminated.

     BE&K's claims against the Carpenters rely on an agency theory.        It
argues that the cooperation of the Paperworkers with the Carpenters'
national publicity campaign forged an agency relationship between the two
unions and that the individual Paperworkers representatives who spoke at
the October 24 mutual interest meeting did so as agents of the Carpenters.

     The legal standards governing agency are not in dispute.          Agency
requires "manifestation by the principal that the agent shall act for him,
the agent's acceptance of the undertaking and the understanding of the
parties that the principal is to be in control of the undertaking."
Restatement (Second) of Agency § 1 cmt. b (1985).      An essential element
of any agency claim is that the asserted principal has the right to control
the actions of the asserted agent.     General Building Contractor Ass'n v.
Pennsylvania, 458 U.S. 375 (1982);   Pledger v. Troll Book Clubs, 871 S.W.2d
389, 392 (Ark. 1994); Restatement (Second) of Agency § 14.        The parties
agree that the jury was properly instructed as to the law of agency, but
dispute whether the evidence was sufficient to support a finding that the
Carpenters had the right to control the actions of the Paperworkers
representatives at the mutual interest meeting.
     To support its agency theory, BE&K relies on evidence describing the
Carpenters' publicity campaign against BE&K.      That evidence showed that
the publicity campaign was directed by the Special Programs Department of
the Carpenters, which is based in Washington but has field representatives
across the country.    A written manual described how representatives should
conduct campaign activities and included a section on soliciting the
assistance of Paperworkers representatives in locations where BE&K was
working or bidding.    The evidence also indicated that the two

                                      12
unions formed a national solidarity committee consisting of five or six
representatives of each union and that that committee determined that the
publicity campaign against BE&K was a top priority issue.                    In addition, the
two unions jointly published various handbills and leaflets related to the
BE&K campaign.

        Even when all possible inferences from this evidence are drawn in
favor    of    BE&K,     it   is   insufficient    to    show     that       the   Paperworker
representatives at the Potlatch meeting were acting as agents of the
Carpenters.       The sort of cooperation in the spirit of labor solidarity
undertaken in the campaign does not transform one union into the agent of
another.        See    International    Longshoremen's      Ass'n       v.    National    Labor
Relations Board, 56 F.3d 205, 213 (D.C. Cir. 1995), cert. denied, 116 S.
Ct. 1040 (1996).         Moreover, the October 24 meeting was one of a regular
series between Potlatch management and representatives of the Paperworkers
unions to which its employees belonged.                There was no evidence that any
labor representatives knew in advance of the meeting that a contract had
just been awarded to BE&K so there would have been no opportunity for the
Paperworkers and the Carpenters to confer about it.

        BE&K    claims    that     statements    and    actions    of     the      Paperworkers
representatives at, and after, the October 24 meeting created an inference
that they were acting under the Carpenters' control.                     BE&K points to two
pieces of evidence in the attempt to support an inference of control by the
Carpenters:       1) the fact that McFalls said at the meeting that the
Carpenters might come to the mill to picket and handbill and unionized
employees at the mill might get involved; and 2) the fact that Bradshaw
later told a member of the Carpenters involved in the solidarity campaign
that Potlatch terminated the contract with BE&K.

        This evidence is insufficient to give rise to an inference of
control.       There was no evidence presented at trial to suggest that the
Carpenters had prior or contemporaneous knowledge that BE&K had

                                            13
been hired by Potlatch, that a mutual interest meeting was taking place,
or that the Paperworkers representatives would make statements at the
meeting.   Nor was there evidence that the Paperworkers at the meeting
thought they were speaking on behalf of the Carpenters or that the
Carpenters attempted to direct their actions.

     After a careful review of the trial record, we conclude that the
Carpenters were entitled to judgment as a matter of law because there was
not evidence to link them to the statements made at the October 24 meeting
or to support an inference that the Paperworkers were acting as their
agents during the discussion.8   The Carpenters are therefore entitled to
judgment as a matter of law and dismissal of the claims against them.

                                    C.

     The Paperworkers argue that they are entitled to judgment as a matter
of law on BE&K's state law tort claim because it is preempted by federal
labor law.9   The state claim alleges that the Paperworkers tortiously
interfered with BE&K's contractual relations with Potlatch by threatening
union violence unless BE&K was removed from the project.   BE&K acknowledges
that state regulation of labor relations, including state tort remedies,
is generally preempted, but argues that this case involves an exception
that allows states to regulate violent conduct.

     8
      The state claim would have required even more than normal
proof of agency to succeed. The Norris-LaGuardia Act contains
special proof requirements in order to impose state tort
liability on a union for the acts of agents. 29 U.S.C. § 106.
Since there was insufficient evidence of agency, it is not
necessary to discuss the more stringent Norris-LaGuardia
requirements.
     9
      This argument, as well as others made by the Paperworkers,
was raised by both unions, but since there was no evidence that
the Carpenters were involved in the challenged statements, the
only issues remaining relate to the Paperworkers.

                                    14
     Both the state and federal claims in this case are based on the union
statements made at the October 24 meeting.             The Paperworkers argue there
is no evidence that the comments made at that meeting were meant to convey
a threat of union violence.        BE&K claims that the evidence related to the
riot at International Falls suggests that the statements were an implicit
warning of a similar riot.

     Threats of violence in labor disputes may in some cases violate both
state and federal law, but the standards for avoiding preemption of a state
claim and making out a federal claim are different.            A greater showing is
required in order to apply state law.            To avoid preemption of the state
claim, there must be evidence that the statements involved "violence or
imminent threats to the public order."          United Mine Workers of America v.
Gibbs, 383 U.S. 715, 721 (1966).       In contrast, a federal claim for damages
requires evidence of threatening or coercive statements with a prohibited
purpose.    See Ozark Interiors, Inc. v. Local 978 Carpenters, 957 F.2d 566,
568-69 (8th Cir. 1992).

     As     a   general   rule,     federal    labor    law   preempts   similar   or
contradictory state laws.         See Local 20, Teamsters, Chauffeurs & Helpers
Union v. Morton, 377 U.S. 252, 259-61 (1964) (LMRA); San Diego Building
Trades     Council v. Garmon, 359 U.S. 236, 244 (1959) (National Labor
Relations Act (NLRA)).      Congress has crafted a comprehensive statutory
framework that reflects its determination that a uniform law of labor
relations serves an important federal interest.            The federal system seeks
"to provide an informed and coherent basis for stabilizing labor relations
conflict" and to "equitably and delicately structur[e] the balance of power
among competing forces so as to further the common good."                Amalgamated
Ass'n of Street, Electric Railway and Motor Coach Employees of America v.
Lockridge, 403 U.S. 274, 286 (1971).          Any state regulation, that conflicts
with or frustrates the purpose of this federal policy must yield to it.
Morton, 377 U.S. at 259-61.        This

                                          15
includes state tort claims brought against parties to labor disputes.

       Section 303 of the LMRA regulates union secondary activities and
strikes      a    balance     between    the    interest   of   employers     in    prohibiting
secondary interference and a union's interest in free expression and its
right to engage in protected conduct.                 The statute makes it unlawful for
a labor organization to use threats or coercion to force a neutral employer
(such as Potlatch) to cease doing business with a primary employer (such
as BE&K), but it does not prohibit the use of persuasion to achieve the
same end.         29 U.S.C. § 187; 29 U.S.C. § 158(b)(4)(ii).                      It creates a
private right of action against labor unions for damages, and limits
recovery in such cases to actual, compensatory damages.                     29 U.S.C. § 187.
When Congress enacted section 303 it occupied the field of regulation of
secondary activities and closed it to state regulation.                     Morton, 377 U.S.
at 260-61.

       States may, however, regulate union conduct, including secondary
activity, that is marked by "violence and imminent threats to the public
order."      Gibbs, 383 U.S. at 721 (1966).           State regulation in such cases is
not    preempted because of the "the compelling state interest in the
maintenance of domestic peace."                 Id.   (citing Garmon, 359 U.S. at 247).
Any state remedies for secondary union activity must be "carefully limited"
to the protection of the state's compelling interest,                   Gibbs, 383 U.S. at
730,    in       order   to   avoid     state    interference    with   the    congressional
determinations in section 303 on how best to balance the competing
interests.

       This is particularly true in a case such as this involving arguably
protected union statements.               Although section 303 makes certain union
threats and coercion unlawful, threats or warnings that a union will engage
in protected conduct such as handbilling or primary picketing are not a
violation of federal law, and are in

                                                 16
fact protected by it.    See NLRB v. Servette, Inc., 377 U.S. 46, 54 (1964).
Federal labor law encourages free debate on issues dividing labor and
management and has long been characterized by a tolerance for robust union
speech.    See Old Dominion Branch No. 496, Nat'l Ass'n of Letter Carriers
v. Austin, 418 U.S. 264, 270-73; Linn v. United Plant Guard Workers of
America, 383 U.S. 53, 62 (1966).           Section 303 was carefully drawn to
balance union rights with legitimate restrictions on threats and coercion,
and state regulation cannot be allowed to interfere with that balance.          See
Morton, 377 U.S. at 260-61.

     The jury in this case was instructed that it must find that the
Paperworkers' statements "involved or were marked by threats of violence,"
either express or implied, before it could consider the elements of the
state tort claim.10     There is no allegation by BE&K that union violence
actually    occurred   in   McGehee   or   was   imminent   or   that   the   union
representatives explicitly referred to violence.         Its theory is that the
union representatives intended to convey a threat of violence in order to
eliminate BE&K from the Bel Bond project.        The parties agree that any such
threat of violence must have been intended by the speaker, as determined
from the statements themselves and the surrounding circumstances.               The
issue is whether there was evidence capable of supporting an inference that
the statements made at the October 24 meeting were intended to be threats
of violence.

     Neither International Falls nor the riot there was ever mentioned by
anyone at the October 24 meeting, and there was no evidence that the union
representatives were even aware of what had

     10
      The content of this instruction is not challenged and we
do not decide whether it was a sufficient statement of the law.
The unions argue in the alternative for a new trial because the
jury was not additionally instructed to consider only violent
conduct when it calculated the amount of punitive damages. See
Gibbs, 383 U.S. at 735. Dismissal of the state law claim will
make this issue moot.

                                       17
occurred there.   There was never any connection shown between any member
of the Paperworkers and those events, nor was there evidence that the
Carpenters union was involved in the riot.11     The fact that one person in
attendance thought about International Falls is not proof of what the
speakers   themselves   intended,   especially   given   the   content   of    the
statements.   The testimony by all present at the meeting was that the
statements made by the Paperworkers at the meeting were mild and that no
one understood them to be intended as threats of violence.        There was no
context at the meeting to suggest that such innocent terms as "pickets" or
"problems" were code-worded threats.12

      The only suggestion of union violence in the record concerned the
unrelated riot at BE&K's workcamp in International Falls, Minnesota.          Even
though no one at the October 24 meeting, including Richards, had been at
International Falls or ever seen the seventeen minute videotape of riot
scenes, it was introduced into evidence and shown to the jury.                 The
district court admitted the videotape to show      what Richards had in mind
when he thought about the International Falls incident, but the videotape
had

      11
      Ironworkers Local Union 783 of Marquette, Michigan was
found to have engaged in unfair labor practices related to the
riot because it condoned and ratified violent conduct by its
individual members who had travelled by bus to International
Falls. See BE&K Construction Co. v. NLRB, 23 F.3d 1459, 1470
(8th Cir. 1994), cert. denied, 115 S. Ct. 1195 (1995).

     BE&K executive Kennedy testified that he had heard that two
individual Carpenters members had been part of the riot, but
there was no evidence that the union or the publicity campaign
was involved or that those two men had anything to do with events
in McGehee, Arkansas.
      12
      BE&K suggests that references to picketing and handbilling
relate to the Carpenters publicity campaign against it and raise
violent connotations. Picketing and handbilling are generally
protected forms of union expression, however, and nothing in the
record suggests that they were conducted unlawfully by the
campaign or connects the Carpenters or its publicity campaign to
any act of violence.

                                      18
questionable probative value because the record did not contain evidence
to support the necessary link to make it relevant.         The legal focus for the
preemption issue was what the Paperworkers intended to convey by their
remarks at the Potlatch meeting, and there was no evidence to link the
speakers with the 1989 riot or the images of it.             Because of this and
because of the prejudicial effect of the videotape, it was an abuse of
discretion to admit it into evidence.          See Fed. R. Evid. 402 and 403.13

     The record contains uncontradicted testimony that no one at the
meeting intended or understood the Paperworkers comments to be threats of
violence or a riot.        Although the jury could choose to discredit this
testimony, BE&K offered no contrary evidence from which the jury could
reasonably infer violence was threatened.               There was no evidence of
violence involving the Paperworkers, and undisputed evidence that the local
unions    and   the   Paperworkers    maintained   an   ongoing   positive   working
relationship with Potlatch.          This was not a case involving a strike, a
bargaining impasse, or any ongoing labor dispute, but rather comments made
at a private meeting at which management and labor discussed matters of
mutual interest.14     The images of labor violence from elsewhere were used

     13
          The prejudice factor is discussed infra at 23.
     14
      The contrast between the facts here and those in cases
where state law was not preempted is instructive. In Gibbs there
was evidence that members of a local union forcibly prevented the
opening of a mine, threatened the mine superintendent, and beat
an organizer for a rival union. 383 U.S. at 721. In United
Construction Workers, Affiliated with United Mine Workers of
America v. Laburnum Construction Corp., 347 U.S. 656 (1954), work
on a construction project was stopped when a large, boisterous
crowd of union members arrived, some of them drunk, carrying guns
and knives, and using abusive language. Id. at 660 n. 4. In
Youngdahl v. Rainfair, Inc., 355 U.S. 131 (1957), strikers
shouted abusive language at nonstriking employees and engaged in
harassing conduct such as puncturing automobile tires, following
the manager home, and making anonymous telephone calls. Id. at
133-34. In International Union, United Automobile, Aircraft and
Agricultural Implement Workers of America (UAW-CIO) v. Russell,
356 U.S. 634 (1958), there were allegations that picketers had
blocked off a
street to prevent entrance to a plant and threatened bodily harm
and damage to property. Id. at 636.

                                          19
by BE&K to invite the jury to read them into the comments at the meeting.15

        After a careful examination of the entire trial record, we conclude
that there was insufficient evidence from which a reasonable jury could
infer    that the Paperworkers intended to suggest that they or their
associates would resort to violence to get BE&K off the job.    Because of
this lack of required proof, state tort law is preempted by federal labor
law, and the Paperworkers are entitled to judgment in their favor on the
state claim.16

                                     D.

        The Paperworkers argue that they are also entitled to judgment

        15
       Since the Paperworkers are entitled to judgment as a
matter of law on the state tort claim, which was the basis for
the punitive damages award, it is not necessary to consider the
requests for a new trial on the state claim or for remittitur.
Nevertheless, it would appear that the very large punitive damage
award of $20,000,000 was attributable to the admission of the
riot videotape and the way that evidence was discussed in
closing. The award was far above the compensatory damages of
$125,000 (160 times) in a case with no physical damage and little
proven economic harm. (BE&K claimed $82,249 in actual damages
and an unspecified amount for lost profits from potential future
contracts it might have been awarded by Potlatch.) The
statements at the meeting on which the claims were based were not
the sort of misconduct generally associated with punitive
damages. When viewed in light of the factors courts find
relevant, the award appears excessive. See BMW of North America,
Inc. v. Gore, 116 S. Ct. 1589, 1598 (1996); TXO Production Corp.
v. Alliance Resources Corp., 509 U.S. 403, 113 S. Ct. 2711, 2721-
23 (1993); Pulla v. Amoco Oil Co., 72 F.3d 648, 658-60 (8th Cir.
1995).
        16
      Because of this conclusion we need not reach the unions'
argument that First Amendment implications require additional
proof and more stringent review of the state tort claims or
BE&K's argument that this issue was waived.

                                     20
as a matter of law on BE&K's federal claim because there was insufficient
evidence that their statements were unlawful secondary activity.      BE&K's
federal claim is brought under section 303(a) of the Labor Management
Relations Act, 29 U.S.C. § 187(a), which creates a private right of action
for damages resulting from certain union secondary activities.

        Section 303(a) makes it unlawful for any labor organization "to
engage in any activity or conduct defined as an unfair labor practice in
[29 U.S.C. § 158(b)(4)]."      29 U.S.C. § 187(a).   The referenced section,
which is part of section 8(b) of the NLRA as amended, defines as an unfair
labor practice certain secondary boycott activity, including actions to
"threaten, coerce, or restrain any person engaged in commerce . . . where
. . . an object thereof is . . . forcing or requiring any person . . . to
cease doing business with any other person . . . ."             29 U.S.C. §
158(b)(4)(ii).    It would be an unfair labor practice under § 158(b)(4(ii),
and thus unlawful actionable activity under § 303(b), for the Paperworkers
to threaten or coerce Potlatch with the purpose of forcing it to cease
doing    business with BE&K.     See Ozark Interiors, Inc. v. Local 978
Carpenters, 957 F.2d 566, 568 (8th Cir. 1992).

        Not all union activities directed at a secondary employer are defined
as unfair labor practices.    Even if the purpose of the activity is to force
an employer to stop doing business with another, a union may attempt
peacefully to persuade, induce, or encourage it to cease the relationship.
NLRB v. Servette, Inc., 377 U.S. 46, 54 (1964) (conduct must be attended
by threats, coercion or restraint); see also Edward J. DeBartolo Corp. v.
Florida Gulf Coast Bldg. & Constr. Trades Council, 485 U.S. 568, 578 (1988)
(requirement of threats or coercion should not be interpreted broadly).
A union has a right to engage in conduct such as peaceful handbilling of
secondary employers or lawful primary picketing, and statements threatening
protected conduct are

                                      21
themselves protected.      See Servette, 377 U.S. at 57 ("statutory protections
. . . would be undermined if a threat to engage in protected conduct were
not itself protected").

       The conduct in question is again the statements made by Barber,
McFalls, and Bradshaw at the October 24 mutual interest meeting.             There is
no question that the object of those statements was to convince Potlatch
to cease doing business with BE&K.       The issue is whether there is evidence
from which a jury could infer that those statements rose to the level of
threats and that they were made to force Potlatch into action.

       In cases involving ambiguous statements the line between lawful
persuasion and unlawful threats is not easily drawn.            To determine whether
particular statements constitute a prohibited threat, the specific language
and    the   surrounding   facts   and   circumstances    are    examined,   not   the
subjective interpretation of the listener.       See, e.g., Apollo Drywall, 211
N.L.R.B. 291 (1974) (NLRB unfair labor practice decision); Champion
Exposition Servs., 292 N.L.R.B. 794 (1989) (same).                  Where there is
inconsistent or conflicting evidence about what message was intended, there
may be a fact question to be decided by a jury.          Ozark Interiors, 957 F.2d
at    568-69 (ambiguous and conflicting testimony regarding threats of
picketing created fact question for jury about intended message).

       In addition to its argument that the Paperworkers statements were
threats of violence, BE&K argued that they were intended as threats of
other unlawful union conduct.       There was some evidence         that could imply
that   the union representatives may have been contemplating unlawful
secondary picketing or other union conduct that might sour its relationship
with Potlatch.    This could support a finding that they intended to threaten
Potlatch with such action in order to force it to terminate its contract
with BE&K, and the verdict could be upheld on this theory under the
applicable deferential standard of review,         see Smith v. World Ins. Co.,
38

                                         22
F.3d 1456, 1460 (8th Cir. 1994), if it were not for the admission of the
videotape.

      BE&K's argument that the statements of the Paperworkers were threats
of potential nonviolent action was not emphasized at trial or on appeal,
for its primary argument was that the statements were actionable because
they were intended to threaten violence if BE&K were to continue with the
Bel Bond project.    Its theory on the federal claim was identical in this
latter respect to the one asserted on the state claim and cannot succeed
because of a lack of proof.      The jury's attention was directed to the
images on the videotape of the International Falls riot, and we cannot
conclude that the verdict was not based on this inadmissible evidence.

      Although the videotape was ostensibly offered to show what Richards
was thinking, counsel for BE&K argued in his closing that the tape would
"terrify" anybody who saw it, and he implied that the Carpenters and
Paperworkers were actually responsible for that riot:      "This is what they
are doing.   And what happens is, they get International Falls."   (Tr. 616).
He specifically asked the jury to send a message to "[t]hese large unions
who go around the country doing things like International Falls . . . that
the [publicity] campaign and the type of interference that they are doing
is not permitted in this country."        (Tr. 646-47).    This argument was
prejudicial and misleading, and any possible probative value of the
videotape was outweighed by its prejudicial effect.       Fed. R. Evid. 403.

      The videotape improperly focused attention on what took place in
International Falls on September 9, 1989 instead of what was actually said
at the October 24, 1991 meeting in McGehee, Arkansas.       Because it cannot
be said with certainty that the verdict would have been the same without
the   videotape, its erroneous and prejudicial admission affected the
substantial rights of the parties.    See Crane v. Crest Tankers, Inc., 47
F.3d 292, 296 (8th

                                     23
Cir. 1995); Hale v. Firestone Tire & Rubber Co., 756 F.2d 1322, 1333 (8th
cir. 1985).   The judgment against the Paperworkers on the federal claim
should therefore be reversed and the case remanded for a new trial on that
claim.

                                   V.

     The judgments are reversed.   The claims against the Carpenters are
dismissed due to insufficient evidence, and the state claim against the
Paperworkers is dismissed because of federal preemption.17      The federal
claim against the Paperworkers is remanded for a new trial.

     A true copy.

           Attest:

                 CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT

     17
      BE&K moved to strike an affidavit submitted by the
Paperworkers with its brief because it was not part of the record
below. Since the contents were not relevant to our analysis the
motion is dismissed as moot.

                                   24