Court Opinion

ID: 9640254
Source: CourtListenerOpinion
Date Created: 2023-08-22 17:01:54.637588+00
Date Added: 2024-06-11T18:10:28.664460
License: Public Domain

WILBUR, Circuit Judge
(dissenting).
I dissent.
The Supreme Court having decided in National Labor Relations Board v. Jones & Laughlin Steel Corp., 57 S.Ct. 615, 81 L.Ed. -, 108 A.L.R. 1352, and in the companion cases (National Labor Relations Board v. Friedman-Harry Marks Clothing Co., 57 S.Ct. 645, 81 L.Ed. -, 108 A.L.R. 1352; National Labor Relations Board v. Fruehauf Trailer Co., 57 S.Ct. 642, 81 L.Ed. -, 108 A.L.R. 1352; Washington, Virginia & Maryland Coach Co. v. National Labor Relations Board, 57 S.Ct. 648, 81 L. Ed. -; Associated Press v. National Labor Relations Board, 57 S.Ct. 650, 81 L.Ed. -), that the regulatory power of Congress under the interstate commerce clause of the Constitution extends to the protection of the collective bargaining system between employer and employee in those industries whose products enter so largely into interstate commerce that a strike of the employees preventing production would directly affect interstate commerce, it is necessary to apply the principles enunciated in those cases to the case at bar.
In. considering the interpretation of the Federal Constitution, it is quite true that the founders of our government did not realize the changes which would come by reason of the increased facilities for interstate communication and business such as the railroad, steamboat, airplane, telegraph, telephone, and radio. While these increased facilities have not changed the Constitution or its meaning, they have vastly extended its application. The framers of the Constitution probably never suspected that profanity whispered into a microphone in Portland, Ore., would be heard around the world and thus bring that subject under federal control. Duncan v. U.S. (C.C.A.) 48 F.(2d) 128. No one now questions the right of Congress to legislate concerning this vastly wider field. Laws regulating radio communication and airplane traffic have been accepted as a matter of course because they clearly relate to interstate commerce. The Constitution has not changed in that respect; it has not grown. It is interstate commerce which has grown. The activities of the people, however, in engaging in such interstate enterprises have brought them *797under the regulatory power of Congress under the Federal Constitution.
In the Jones & Laughlin Case, supra, it is pointed out that when industries organize themselves on a national scale so that interstate commerce is a necessary factor of their activities, they are subject to regulatory power of Congress under the commerce clause of the Federal Constitution.
It is our duty to support the Constitution of the United States.as interpreted by the Supreme Court. It is therefore of the utmost importance in this case to ascertain what the Supreme Court has decided with reference to the constitutionality and applicability of the Wagner Labor Relations Act (29 U.S.C.A. §§ 151-166) and to apply that conclusion to the factual situation presented in the case at bar.
The Supreme Court did not lay down any definite general rule upon the subject. It did hold, as to particular industries considered in the Jones & Laughlin Case and companion cases, that congressional power extended to the protection of collective bargaining in the plants of the employers there involved.
In the Jones & Laughlin Steel Corporation Case, supra, 75 per cent, of the product is shipped out of Pennsylvania. It is one of the four largest producers of steel in the United States. In the trailer case (National Labor Relations Board v. Fruehauf Trailer Co, 57 S.Ct. 642, 81 L.Ed.-, 108 A.L.R. 1352, supra), 50 per cent, of the material used was imported from other states, 80 per cent, of the product was shipped outside the state. In the clothing case (National Labor Relations Board v. Friedman-Harry Marks Clothing Co., 57 S.Ct. 645, 81 L.Ed. -, 108 A.L.R. 1352, supra), 99.57 per cent. of the goods came from other states, 75 per cent, being purchased in New York alone, 82.8 per cent, of the output purchased by customers outside the state.
None of these cases approximate the condition presented in the case at bar. All of them dealt with cases in which a large part of the raw material manufactured by the employers was imported into the state for the purpose of manufacture and was in fact exported from the state after manufacture. In the case at bar we have the defendant engaged in preparing homegrown products for the market knowing that according to its usual business 39 per cent, of that product would enter into interstate or foreign commerce. The grower who produces the fruit does not know what part of his fruit, if any, will enter into interstate commerce. He sells it to the respondent knowing, perhaps, that 39 per cent, of the product of the cannery will enter into foreign or interstate commerce. The cannery does not segregate its employees into groups, some working upon material to enter into interstate and foreign commerce, and others upon material to be sold in intrastate commerce. There is no segregation of the product at any time until after the cannery and warehousing operations are completed.
The decision of the Board is predicated upon the proposition that a strike might result if collective bargaining were denied and that if such a strike occurred it would directly affect interstate commerce by shutting off production. That decision, assuming jurisdiction over the respondent’s entire Oakland and Seabright plants so far as collective bargaining is concerned, is not predicated upon any clear line distinguishing between the employees working in the plant as to the character of the work performed but is based on the theory that inasmuch as 39 per cent, of the product finds its way in interstate commerce a restriction of the output of the plant would diminish the amount of material entering into interstate commerce pro tanto. There is no evidence to support this conclusion other than the assumption that the business would be divided in the same way whether the amount of the product was great or small. None of the cases decided by the Supreme Court went as far as does this decision of the Board. Not only was most of the raw material of the employer in those cases imported from outside the state, but in each case more than 75 per cent, of the resulting product entered into interstate and foreign commerce. Here we have none of the products from outside the state and less than half the product entering interstate commerce. As the cases decided by the Supreme Court are not directly applicable because the facts differ, we turn to the reasoning by which the majority of the Supreme Court reached its conclusion to see if such reasoning is applicable or decisive herein.
Taken broadly the logic of this reasoning would justify the conclusion of my associates, but the majority of the Justices of the Supreme Court, as well as the minority, foresaw the danger that the opinion, pressed to its logical conclusion, might result in leaving to the sovereign states only the empty hull of government and admonished that in applying' these decisions we must *798not only consider as a factor in the problem the direct effect upon interstate commerce of the collective bargaining system, but must also consider as a factor the authority of the state over domestic concerns expressly and impliedly reserved by and to them by the Constitution. In that regard I quote from the opinion of the majority, written by the Chief Justice, as follows (57 S.Ct. 615, 624, 81 L.Ed. —, 108 A.L.R. 1352): “Undoubtedly the scope of this power must be considered in the light of our dual system of government and may not be extended so as to embrace effects upon interstate commerce so indirect and remote that to embrace them, in view of our complex society, would effectually obliterate the distinction between what is national and what is local and create a completely centralized government. Id. The question is necessarily one of degree. As the Court said in Board of Trade of City of Chicago v. Olsen, supra, 262 U.S. 1, 37, 43 S.Ct. 470, 477, 67 L.Ed. 839, repeating what had been said in Stafford v. Wallace, supra [258 U.S. 495, 42 S.Ct. 397, 66 L.Ed. 735, 23 A.L.R. 229]: Whatever amounts to more or less constant practice, and threatens to obstruct or unduly to burden the freedom of interstate commerce is within the regulatory power of Congress under the commerce clause, and it is primarily for Congress to consider and decide the fact of the danger and to meet it.’ ”
The minority of the court, upon this subject, say: “It is vital that the independence of the commercial power and of the police power, and the delimitation between them, however sometimes perplexing, should always be recognized and observed, for, while the one furnishes the strongest bond of union, the other is essential to the preservation of the autonomy of the states as required by our dual form of government;' and acknowledged evils, however grave and urgent they may appear to be, had better be borne, than the risk be run, in the effort to suppress them, of more serious consequences by resort to expedients of even doubtful constitutionality.”
This danger was pointed out by the Supreme Court in Kidd v. Pearson, 128 U.S. 1, 9 S.Ct. 6, 32 L.Ed. 346, cited by the minority of the Supreme Court in the dissenting opinion in the Jones & Laughlin Case. The court there said (57 S.Ct. 615, 638, 81 L.Ed. —, 108 A.L.R. 1352): “ ‘If it be held that the term (commerce with foreign nations and among the several states) includes the regulation of all such manufactures as are intended to be the subject of commercial transactions in the future, it is impossible to deny, that it would also include all productive industries that contemplate the same thing. The result would be that congress would be invested, to the exclusion of the states, with the power to regulate, not only manufacture, but also agriculture, horticulture, stock-raising, domestic fisheries, mining, — -in short, every branch of human industry.’ ”
Nearly a half century ago, in the case of Kidd v. Pearson, 128 U.S. 1, 9 S.Ct. 6, 10, 32 L.Ed. 346, supra, the Supreme Court held that a state could prohibit the manufacturing of intoxicating liquor within its borders notwithstanding such liquor was intended for_ transportation to other states, and was manufactured for that purpose. The court stated: “It is true that, notwithstanding its [the state prohibition statute] purposes and ends are restricted to the jurisdictional limits of the state of Iowa, and apply to transactions wholly internal and between its own citizens, its effects may reach beyond the state, by lessening the amount of intoxicating liquors exported. But it does not follow that, because the products of a domestic manufacture may ultimately become the subjects of interstate commerce, at the pleasure of the manufacturer, the legislation of the state respecting such manufacture is an attempted exercise of the power to regulate commerce exclusively conferred upon congress. Can it be said that a refusal of a state to allow articles to be manufactured within her borders (for export) any more directly or materially effects her external commerce than does her action in forbidding the retail within her borders of the same articles after they have left the hands of the importers?”
To this query the Supreme Court answered: “No.” In answering the question the Supreme Court cited the earlier cases (the License Tax Cases, 5 Wall. 462, 470, 18 L.Ed. 497) decided seventy years ago, where it is said: “Over this commerce and trade [the internal commerce and domestic trade of the states] Congress has no power of regulation nor any direct control. This power belongs exclusively to the States. No interference by Congress with the business of citizens transacted within a State is warranted by the Constitution, except such as is strictly incidental to the exercise of powers clearly granted to the legislature. *799The power to authorize a business within a State is plainly repugnant to the exclusive power of the State over the same subject.”
This statement of elementary constitutional law was made arguendo in deciding that Congress could not authorize a business prohibited by the state and that its license tax did not operate to permit the licensee to conduct a business in a state which prohibited that business. It may well be that the recent decisions of the Supreme Court in the Wagner Act cases depart from this earlier rule in holding as they do that the volume of output of a local business entering into interstate commerce may become the subject of federal legislation because it directly affects interstate commerce, but the many decisions of the Supreme Court on the same subject must not be considered as completely brushed aside or disregarded or overruled by these recent decisions. Assuming, then, that the recent decisions extend the previous limits of federal power over local business because that business directly affects interstate commerce, the question in the case at bar is whether or not the conclusion of the petitioner that the ultimate destination of 39 per cent of respondent’s production in interstate and foreign commerce, subject to the regulatory power of Congress.should control the other 61 per cent, of the production normally subject to state regulation, is a reasonable recognition of the right of the state government to control its domestic affairs. In considering the relative rights of the state and federal governments it should he remembered that after the Revolution full sovereignty was vested in each of the original states subject to minor control by Congress under the Articles of Confederation and that the federal government now has only such powers as were then granted to it by the states in the Constitution of 1787, and such as were granted by the amendments thereto. This, although historically clear, was made definite by the Tenth Amendment to the Constitution ratified in 1791 expressly reserving to the states, and to the people, all powers not given to the United States. Is it to be believed that full power would have been given to Congress over interstate and foreign commerce if it had been thought by those who formed the Constitution in 1787 and consented to its adoption at that time, that lying dormant within this general grant of power was a power to control practically every activity in a state if a small percentage of the product of this activity entered interstate or foreign commerce ? The historical answer is clearly that such a provision so construed would not have been adopted.
In a sense we should view the case before us as if the parties involved were the state of California on the one hand, and the federal government on the other, each asserting jurisdiction over the parties to this action, and each asserting the. right to regulate the relation of employer and employee here involved. Is it logical to say that the federal government should control a confessedly intrastate or domestic activity because 39 per cent, of its product is shipped out of the state, and to- deny to the state government the power to regulate the industry or any part of it for that reason, although 61 per cent, of the product is consumed within the state? Was it the intention of the thirteen original states when they adopted the Constitution to grant such power to the federal government? As the Supreme Court has often declared, where interstate commerce is concerned the federal government is supreme by reason of the interstate commerce clause of the Constitution. This rule has been enunciated from the first, but in the instant case it is not asserted that the thing regulated is interstate commerce but merely something domestic — intrastate — which “directly affects” interstate commerce. So that we are concerned with an exercise of this corollary power rather than with the direct grant of power to Congress. Certainly in this broader and more nebulous field exercise of power by the federal government should give due recognition to the inherent right of the sovereign state to control its own domestic affairs. I cannot believe that where less than SO per cent, of the manufactured product enters into interstate and foreign commerce the federal government is justified under the interstate commerce clause in seizing or exercising jurisdiction over the whole industry. The line must be drawn somewhere and it seems to me that it must at least be drawn so that control will reside in the sovereignty most affected by the action.
The Wagner Act does not expressly authorize any interference with the powers of the state nor define what constitutes direct interference with interstate or foreign commerce. If Congress had asserted jurisdiction over industries and activities wherein a certain percentage, say SO per cent, or more, of its products, ultimately moved in *800interstate or foreign commerce, the court would sustain the action of Congress if it had any reasonable doubt of the constitutionality of its action. In such a case the presumption that Congress had acted constitutionally would only be overborne where it was clear beyond a reasonable doubt that its action was not authorized by the Constitution. But in the Wagner Act Congress did not undertake to draw the line to which it attempted to extend its authority other than by the general assumption of power over foreign and interstate commerce and over collective bargaining between employer and employee directly affecting such commerce, leaving to the National Labor Relations Board in the first instance the determination of whether or not the establishment of collective bargaining directly affected interstate commerce in each particular case. The conclusion of the Board upon the factual situation is made conclusive upon the courts. But the question of constitutional interpretation is one for the court to be applied by it to the facts found by the National Labor Relations Board. The ultimate fact found by the Board is that 39 per cent, of the output of the respondent enters into interstate and foreign commerce, for it must be Assumed as a matter of law under the decision of the Supreme Court in the Jones & Laughlin Steel Co. Case that as to such commerce the matter of collective bargaining directly affects it, and that Congress consequently has power to establish, protect, and maintain the right to collective bargaining. We may assume that if a line can be drawn between the employees engaged in producing goods for interstate and foreign commerce and those engaged in production for intrastate consumption, Congress would have legislative power over the former and the state over the latter; but we are concerned with a situation where no attempt has been made or could be made to segregate such employees, and where, because of that fact jurisdiction is asserted over all employees, thus in effect reversing the rule that federal power should clearly appear before its exercise is justified. We may agree, as the Supreme Court has decided, that control over a manufacturing plant may be asserted because a cessation of its activities on account of a strike would diminish the volume of interstate commerce, but to hold that the exercise of power extends to the intrastate products, and labor producing them, is to take another step away from the direct grant of power to Congress over interstate commerce in favor of federal power, which is not justified unless the federal interest preponderates.
Congress laid down no certain guide fof the Board or the court in reaching its conclusions, and has provided that the action of the Board is ineffective until approved by the court. The question as to whether under the facts found by the Board there is a direct effect upon interstate commerce is one to be solved by the court without any guide other than the proposition advanced by the statute and sustained by the Supreme Court as a valid exercise of constitutional authority, namely, that collective bargaining is a matter for federal control where the employees are engaged in activity which directly affects interstate commerce. As a matter of cold logic it may be said that if the decrease in the volume of output of a factory decreases the volume of interstate commerce it pro tanto directly affects such commerce, whether the amount is 100 per cent, or one per cent. For in either case the Supreme Court has decided that the effect is direct, and that the constitutional power of Congress attaches thereto. But we are not dealing with an abstract problem of mathematics, but with one of the practical construction of the Federal Constitution concerning the relative rights of states of the United States and of the individuals concerned. As the line of state and federal authority must be drawn somewhere, I can see no other logical division than that of the line which determines which interest preponderates, foreign and interstate commerce on the one hand, or domestic or intrastate commerce on the other. Let it be granted that this conclusion is not entirely logical or satisfactory, nevertheless it seems to be the only escape from a legalistic formulae which, under the guise of regulating commerce between the states, virtually transfers to the federal government substantially all the power which pertains to state sovereignty and which have been traditionally exercised by each of them ever since the Constitution was adopted. This formula is not based upon the clear grant of power to Congress over interstate commerce, but upon what is held to be a necessary incident thereto. I recognize the logic and discernment of my associates in this case, but I cannot assent thereto because it proves entirely too much, and this because in my opinion it ignores a vital and essential element in the problem, that *801is, the superior and dominant power of the state over its internal affairs. I therefore conclude that the application of the Board for an enforcement order in this case should be denied.
Thus far I have assumed, as my associates do, that the order of the Board relates to all the employees of the respondent. The cease and desist order quoted in the main opinion apparently applies to all the employees of the respondent but in the petitioner’s brief it is emphasized that the order of the Board relates to employees engaged as warehousemen at the Oakland plant. The petitioners state in their brief that:
“Approximately 3,000 to 4,000 cases.are loaded daily into the various vehicles of conveyance. The employees here involved are the warehousemen who do all of such loading. * * *
“Thus the employees here involved actually start all of the respondent’s products upon the course of transportation to their ultimate destination. * * *
“In a. concluding finding with respect to the nature of respondent’s business and the duties of these employees the Board found that all of the aforesaid constitutes a'continuous flow of trade, traffic and commerce among the several states, and with foreign countries; and that the warehousemen here involved are engaged in operations in the course and conduct-of such commerce and are an integral part of such commerce. *5 * *
“It is to be noted that we are concerned here only with that phase of the respondent’s business in which it is engaged in shipping its finished products to states outside of California and to foreign countries. We are not concerned with that phase of respondent’s business in which the products are processed. The employees with whom we deal here are solely those who are engaged in actually packing, loading, and shipping respondent’s finished products into box cars, trucks, and other interstate carriers destined for points in other states and in foreign countries. They are the employees who actually ship the respondent’s finished products in interstate and foreign commerce. We do not deal here with the other employees who are engaged in processing the various raw materials of the respondent. Therefore, we do not consider in this brief the application of the National Labor Relations Act (29 U.S.C.A. §§ 151— 166) to any other than shipping employees. * * ❖
“The activities of the respondent and the employees here involved are divorced from and are not affecfed by the other activities of the respondent. The respondent and its employees, insofar as the operations here involved are concerned, are directly engaged in interstate and foreign commerce and consequently are validly subject to congressional regulation under the Act. Gibbons v. Ogden, 9 Wheat. 1, 6 L.Ed. 23; Heyman v. Hays, 236 U.S. 178, 35 S.Ct. 403, 59 L.Ed. 527; Southern Operating Co. v. Hays, 236 U.S. 188, 35 S.Ct. 405, 59 L.Ed. 531; Sioux Remedy Co. v. Cope, 235 U.S. 197, 35 S.Ct. 57, 59 L.Ed. 193.
“The fact that the respondent is also engaged in the processing, production, or manufacture of canned goods does not divest its operations in selling and shipping its products to points outside of California of their interstate character.”
“For the purpose of our Constitutional argument we are therefore justified in ignoring the fact that the respondent is engaged in processing or production, with which activities we are not here concerned.”
In view of the fact that the petitioners in their brief limit the effect of their order to the warehousemen in the Oakland plant, I think the cease and desist order should be thus limited. However, this contention was advanced before the Supreme Court had sustained the validity of the Wagner Act as applied to intrastate activities which directly affect interstate commerce, and, consequently, the Board might not consider themselves now bound by the limitations which they thought advisable in presenting a constitutional question before the decision of the Supreme Court. My associates have dealt with the order of the Board as though it applied to all the operatives in the Oakland plant so far as the jurisdiction of the Board is concerned and so far as the order to cease and desist is concerned. I am inclined, however, to think that the Board’s interpretation of its own order confining the effect thereof to those engaged in shipping respondent’s product should be observed in our enforcement order.
In my opinion the application for the enforcement order should be denied, but if granted should be applied only to the employees of the respondent engaged in shipping at its Oakland plant.