Court Opinion

ID: 8827829
Source: CourtListenerOpinion
Date Created: 2022-11-26 15:52:43.738022+00
Date Added: 2024-06-11T17:04:50.087619
License: Public Domain

STONE, Circuit Judge
(dissenting). This is an appeal by a labor organization, certain officials and members thereof from a final decree of injunction.
Appellants contest the jurisdiction of the court as a federal court. There is no longer room to question the applicability of the Sherman Act, within the limits of the Clayton Act (38 Stat. 730), to labor organizations and strikes. But the Sherman Act relates solely to interstate commerce, and the contention made here is that this conspiracy has no legal connection with interstate commerce. The facts necessary bearing on this jurisdictional question are as follows: Appellees are trunk manufacturers. A part of their products are shipped in interstate commerce. Appellants desired to unionize the plants of appellees. If peaceful means "failed, they designed to call a strike and so picket the plants as to prevent their operation until the appellees would submit to unionizing the plants. In pursuance of this plan, strikes were called and picketing put in operation. The evidence substantially shows that this picketing was conducted in an unlawful manner. No attempt was made to prevent appellees from shipping any manufactured products or from receiving any raw material. There was no boycott of appellees’ products or customers, no interference with interstate transportation, no purpose to interfere with such commerce. The conspiracy was confined to preventing manufacture. The purpose of the conspiracy was to accomplish unionization by preventing manufacture and in no way include as an object preventing appellees, by boycott or otherwise, from purchasing, selling, sending, or receiving products or materials. The jurisdictional question turns, therefore, on the point of whether a conspiracy for the sole purpose of unionizing a manufacturing plant is a restraint of interstate commerce because some of the articles which are prevented from being made are intended for interstate commerce and would normally enter therein.
My Associates deem this situation reveals a conspiracy to interfere with interstate commerce, within the meaning of the Sherman Act. The points they make in their able opinion are: (1) That the manufacture of articles contracted, intended, or normally going into interstate commerce, constitutes a part of interstate commerce; (2) that where the purpose of the conspiracy is to prevent the manufacture of *459such articles, the inevitable effect is to interfere with interstate commerce, therefore an intent to so interfere must be inferred and the conspirators be estopped from denying that such was the actual intent (3) that the means of executing the conspiracy were unlawful. I cannot concur in these views or the conclusion reached, because I think controlling decisions of the United States Supreme Court are to the contrary.
As to the contention that because an article is contracted for, intended for, or normally enters into interstate commerce, the manufacture of it is a part of interstate commerce. This conclusion is based upon the .argument tfiat if the manufacture is prevented, the article cannot enter interstate commerce, and therefore manufacture is an “intermediate step” in and an integral part of such commerce. This is patently true as a result of logical reasoning, but is it true when the problem before the court is to define that somewhat difficult line which separates the powers of the nation over interstate commerce from the powers of the states over intrastate commerce and internal police regulation? Such a problem must be solvéd along “practical” as well as logical lines. As said in Diamond Glue Co. v. U. S. Glue Co., 187 U. S. 611, at page 616, 23 Sup. Ct. 206, at page 208 (47 L. Ed. 328):
“In modern societies every part is related so organically to every other, that what affects any portion must be felt more or less by all the rest. Therefore, unless everything is to be forbidden and legislation is to come to. a stop, it is not enough to show that, in the working of a statute, there is some tendency, logically discernible, to interfere with commerce or existing contracts. Practical lines have to be drawn and distinctions of degree must be made. See, further, Kidd v. Pearson, 128 U. S. 1, 21; Coe v. Errol, 116 U. S. 517, 525, 527; Tredway v. Riley, 82 Neb. 495.”
If this were otherwise, as said, in Hammer v. Dagenhart, 247 U. S. 251, at page 272, 38 Sup. Ct. 529, at page 531 (62 L. Ed. 1101, 3 A. L. R. 649, Ann. Cas. 1918E, 724), “all manufacture intended for interstate shipment would be brought under federal control to the practical exclusion of the authority of the states, a result certainly not contemplated by the framers of the Constitution when they vested in Congress the authority to regulate commerce among the states. Kidd v. Pearson, 128 U. S. 1, 21.”
In both of the preceding quotations, citation is made of Kidd v. Pearson, 128 U. S. 1, 21, 9 Sup. Ct. 6, 32 L. Ed. 346. The reasoning contained in that citation, approved in these later cases, as set out on page 21 of 128 U. S., on page 10 of 9 Sup. Ct. (32 L. Ed. 346), is as follows:
“If it be held that the term 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 manufactures, but also agriculture, horticulture, stock raising, domestid fisheries, mining — in short, every branch of human industry. Eor is there one of them that does not contemplate, more or less clearly, an interstate or foreign market? Does not the' wheat grower of the Northwest, and the cotton planter of the South, plant, cultivate, and harvest his crop with an eye on the prices at Liverpool, New York, and Chicago? The power being vested in Congress and denied to the states, it would follow as an inevitable result that the duty would devolve on Congress to regulate all of these deli*460cate, multiform, and vital interests — interests which in their nature are and must be, local in all the details of their successful management.
“It is not necessary to enlarge on, but only to suggest the impracticability of such a scheme, when we regard the multitudinous affairs involved, and the almost infinite variety of their minute details.
“It was said by Chief Justice Marshall, that it is a matter of public history that the object of vesting in Congress the power to regulate commerce with foreign nations and among the several states was to insure uniformity of regulation against conflicting and discriminating state legislation. See, also, County of Mobile v. Kimball, supra, at page 697.
“This being true, how can it further that object so to interpret the constitutional provision as to place upon Congress the obligation to exercise the supervisory powers just indicated? The demands of such a supervision would require, not uniform legislation generally applicable throughout 'the United States, but a swarm of statutes only locally applicable and utterly inconsistent. Any movement toward the establishment of rules of production in this vast country, with its many different climates and opportunities, could only be at the sacrifice of the peculiar advantages of a large part of the localities in it, if not of every one of them. On the other hand, any movement toward the local, detailed, and incongruous legislation required by such interpretation would be about the widest possible departure from the declared object of the clause in question. Nor this alone. Even in the exercise of the power contended for, Congress would be confined to the regulation, not of certain branches of industry, however numerous, but to those instances in each and every branch where the producer contemplated an interstate market. These instances would he almost infinite, as we have seen; but still there would always remain the possibility, and often it would be the case, that the producer contemplated a domestic market. In that case the supervisory power must be executed by the state; and the interminable trouble would be presented, that whether the one power or the other should exercise the authority in question would be determined, not by any general or intelligible rule, but by the secret and changeable intention of the producer in each and every act of production. A situation more paralyzing to the state governments, and more provocative of conflicts between the general government and the states, and less likely1 to have been what the framers of the Constitution intended, it would be difficult to imagine.”
In applying this rule of practical logic to the question of whether or not manufacture of an article of interstate commerce is, as such, a part of interstate commerce, I find, as it seems to me, a long unbroken line of decisions to the effect that it is not. These decisions, many in number, began in 1885 with Coe v. Errol, 116 U. S. 517, 6 Sup. Ct. 475, 29 L. Ed. 715, and came down to June, 1922, with the noted case of United Mine Workers of America v. Coronado Coal Co.
From these cases I will select a few quotations which, in my judgment, sustain the view that manufacture of articles to be shipped in interstate commerce is not a part of interstate commerce within the meaning of the Constitution, as construed by the Supreme Court. I am impelled to do so by my high regard for the ability and learning of the judges with whom I feet compelled to differ in this case. I shall endeavor, carefully, to choose, and italicize in part, extracts which were not merely vagrant expressions of the court but such as were made directly applicable to determination of the issues there involved.
In the United Mine Workers’ Case, supra (decided June 5, 1922), this court was reversed for holding that mining coal was interstate commerce. The facts and issues in that case seem to me directly controlling here. There was a strike the purpose of which was to unionize the mines in a certain locality. Here the strike was to unionize certain *461trunk factories, all of which were located in St. Louis, Mo. Unlawful means were there, as here, used to carry on the strike; the only difference being that in that case such means went to the further extent of murder, riot, and arson. In that case, Chief Justice Taft, for the court, said:
“Coal mining is not interstate commerce, and the power of Congress does not extend to its regulation as such. In Hammer v. Dagenhart, 247 U. S. 251, 272, we said: ‘The making of goods and the mining of coal are not [interstate] commerce, nor does the fact that these things are to be. afterwards shipped or used in interstate commerce make their production a part thereof. Delaware, Lackawanna & Western B. R. Co. v. Yurkonis, 238 U. S. 439. Obstruction to coal mining is not a direct obstruction to interstate commerce in coal, although it, of course, may affect it by reducing the amount of coal to be carried in that commerce.”
In Lemke v. Farmers Grain Co. (decided February 27, 1922), the court said:
“Nor is this conclusion opposed by cases decided in this court and relied upon by appellants, in which we have had occasion to define the line between state and federal authority under facts presented which required a definition of interstate commerce where the right of state taxation was involved, or manufacture or commerce of an intrastate character was the subject of consideration. In those cases we have defined the beginning of interstate commerce as that time, when goods begin their interstate journey by delivery to a carrier or otherwise, thus passing beyond state authority into the domain of federal control. Cases of that type are not in conflict with principles recognized as controlling here.”
In Crescent Cotton Oil Co. v. Mississippi (decided November 14, 1921), the Supreme Court considered the question of whether the Anti-Gin Act of Mississippi (Laws Miss. 1914, c. 162) interfered with interstate commerce. On that point the court said:
“It is clear that these decisions cannot be of aid in determining the question we are now considering, which is whether a cotton gin operated by an oil company in Mississippi is rendered an instrumentality of interstate commerce by the fact that the owner of it ships out of the state, for its use in another state, all of the cotton seed which may he purchased in connection with its ginning operations. * - *
“The separation of the seed from the fiber of the cotton, which is accomplished by the use of the cotton gin, is a short, but important, step in the manufacture of both the seed and the fiber into useful articles of commerce; hut that manufacture is not commerce was held in Kidd v. Pearson, 128 U. S. 1, 20, 21; United States v. E. C. Knight, 156 U. S. 1, 12, 13; Capital City Dairy Company v. Ohio ex rel. Attorney General, 183 U. S. 238, 245; McCluskey v. Marysville & Northern Railway Company, 243 U. S. 36, 38, and in Hammer v. Dagenhart, 247 U. S. 251, 252; Arkadelphia Milling Company v. St. Louis & South Western Railway Company, 249 U. S. 134, 151, 152. And the fact, of itself, that an article when in the process of manufacture is intended for export to another state does not render it an article of interstate commerce. Coe v. Errol, supra, and New York Central, etc., Company v. Mohney, 252 U. S. 152, 155. When the ginning is completed, the operator of the gin is free to purchase the seed or not, and, if it is purchased, to store it in Mississippi indefinitely, or to sell or use it in that state, or to ship it out of the state for use in another, and, under the eases cited, it is only in this last case, and after the seed .has heen committed to a carrier for interstate transport, that it passes from the regulatory power of the state into interstate commerce and under the national power.
“The application of these conclusions of law to the manufacturing operations of the cotton gins, which we have seen precede, hut are not a part of, *462interstate commerce, renders it quite impossible to consider them an instrumentality of such commerce, which is burdened by the Anti-Gin Act, and the first contention of the plaintiff in error must be denied.”
In Hammer v. Dagenhart, 247 U. S. 251, at page 272, 38 Sup. Ct. 529, at page 531 (62 L. Ed. 1101, 3 A. L. R. 649, Ann. Cas. 1918E, 724), the court said:
“When offered for shipment, and before transportation begins, the labor of their production is over, and the mere fact that they were intended for interstate commerce transportation does not make their production subject to federal control under the commerce power.
“Commerce ‘consists of intercourse and traffic * * * and includes the transportation of persons and property, as well as the purchase, sale and exchange of commodities.’ The malting of goods and the nvitmig of coal are not commerce, nor does the fact that these things are to be afterwards shipped or used in interstate commerce, make their production a part thereof. Delaware, Lackawanna & Western R. R. Co. v. Yurkonis, 238 U. S. 439.
“Over interstate transportation, or its incidents, thd regulatory power of Congress is ample, but the production of articles, intended for interstate commerce, is a matter of local regulation.
“ ‘When the commerce begins is determined, not by the character of the commodity, nor by the intention of the owner to transfer it to another state for sale, nor by his preparation of it for transportation, but by its actual delivery to a common carrier for transportation, or the actual commencement of its transfer to another state.’ (Mr. Justice Jackson in Re Green, 52 Fed. Rep. 113.) This principle has been recognized often in this court Coe v. Errol, 116 U. S. 517; Bacon v. Illinois, 227 U. S. 504, and cases cited. If it were otherwise, all manufacture intended for interstate shipment would be brought under federal control to the practical exclusion of the authority of the states, a result certainly not contemplated by the framers of the Constitution when they vested in Congress the authority to regulate commerce among the states. Kidd v. Pearson, 128 U. S. 1, 21.”
In Kidd v. Pearson, 128 U. S. 1, at page 20, 9 Sup. Ct. 6, at page 10 (32 L. Ed. 346), the court said:
“No distinction is more popular to the common mind, or more clearly expressed in economic and political literature, than that between manufactures and commerce. Manufacture is transformation — the fashioning of raw materials into a change of foi'm for use. The functions of commerce are different. The buying and selling and the transportation incidental thereto constitute commerce; and the regulation of commerce in the constitutional sense embraces the regulation at least of such transportation. The legal definition of the term, as given by this court in County of Mobile v. Kimball, 102 U. S. 691, 702, is as follows: ‘Commerce with foreign countries, and among the states, strictly considered, consists in intercourse and traffic, including in these terms navigation, and the transportation and transit of persons and property, as well as the purchase, sale, and exchange of commodities.’ If it be held that the term 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-manufactures, but also agriculture, horticulture, stock raising, domestic fisheries, mining — in short, every branch of human industry. For is there one of them that does not contemplate, more or less clearly, an interstate, or foreign market? Does not the wheat grower of the Northwest, and the cotton planter of the South, plant, cultivate, and harvest his crop with an eye on the prices at Liverpool, New York, and-Chicago? The power being vested in Congress and denied to the states, it would follow as an inevitable result that the duty would devolve on Congress to regulate all of these delicate* *463multiform, and vital interests — interests which in their nature are and must be, local in all the details of their successful management.
“It is not necessary to enlarge on, but only to suggest the impracticability of such a scheme, when we regard the multitudinous affairs involved, and the almost infinite variety of their minute details.”
In Capital City Dairy Co. v. Ohio, 183 U. S. 238, at page 245, 22 Sup. Ct. 120, at page 123 (46 L. Ed. 171), the court said:
“The contention that the statutes in question are repugnant to the commerce clause of the Constitution is manifestly without merit. All the acts of the corporation which were complained of related to oleomargarine manufactured by it in the state of Ohio, in violation of the laws of that state, and therefore operated on the corporation within the state and affected the product manufactured by it before it had become a subject of interstate convmerce. Kidd v. Pearson, 128 U. S. 1; United States v. E. C. Knight Co., 156 U. S. 1. It results that the plaintiff in error is not in a position to assail the validity of .the statutes, because of their supposed operation upon interstate commerce, and we are not called upon to express an opinion respecting the constitutionality of the statutes upon this assumption.”
The cases from which the above quotations are taken, as well as the many other similar decisions cited in those cases, establish the doctrine that the manufacture of goods, which are to be later transported in interstate commerce, is not a part of interstate commerce.
As to the second point in the majority opinion, to wit, the intent to interfere with interstate commerce: It is undoubtedly the law that a conspiracy formed with the specific intent to interfere with (usually by restriction of) interstate commerce is within the domain of national control and subject to the Sherman Act. This is true irrespective of the means employed toward its execution. Because this is so, there are cases in which the act has been held applicable where the means happened to be control of or prevention of production of the particular article of interstate commerce. Such are American Column & Lumber Co. v. U. S., 257 U. S. 377, 42 Sup. Ct. 114, 66 L. Ed. 284 (decided December 19, 1921); U. S. v. Reading Co., 226 U. S. 324, 33 Sup. Ct. 90, 57 L. Ed. 243. But, in that character of cases, it was not the means employed to effectuate the conspiracy that brought it within the federal control. It was the specific, actually existing unlawful intent and purpose of the conspiracy which had that effect.
This record is entirely barren even of a suggestion that there existed here any actual intent to affect interstate commerce. The sole purpose of this strike was to benefit and strengthen the labor unions here involved by unionizing these particular plants. Of course, this was intended to be accomplished by curtailing and, if possible, preventing complainants from manufacturing their products. This was to be brought about by preventing them procuring the necessary labor except through employment of members of the union. But there was no specific purpose or intent to affect interstate commerce such as was alleged, for example, in the United Mine Workers’ Case, supra. Nor is there a word of testimony tending to show that the respondents had any knowledge of or cared anything about whether the business of complainants was state or interstate in character. That consideration was unimportant to their purposes. Therefore, if an intent to inter*464fere with interstate commerce is to be found it must be imputed, as matter of law not fact, from the circumstances that to prevent this manufacture would naturally andl inevitably prevent tire products thereof going into interstate commerce.
It is generally true that men who do acts are presumed to intend the natural consequences thereof. But here again this logic and rule must be applied in a practical way. If it is riot so applied, the entire police power of the states is in danger of absorption by the national government. This is true because, in our complex social and economic life, production, as well as manufacture, of all kinds of things is generally followed by entrance of those articles, or some of them, into interstate commerce. This necessity for having always in mind constitutional limitations in applying such rules of logic and law has been repeatedly recognized and laid down by the Supreme Court. The applied rule is that state laws or individual acts which affect interstate commerce incidentally are to be distinguished from those which affect it directly. The former are without, the latter are within, national control. United Mine Workers v. Coronado Coal Co., supra; U. S. v. Patten, 226 U. S. 525, 33 Sup. Ct. 141, 57 L. Ed. 333, 44 L. R. A. (N. S.) 325; Ware & Leland v. Mobile County, 209 U. S. 405, 28 Sup. Ct. 526, 52 L. Ed. 855, 14 Ann. Cas. 1031; Hooper v. California, 155 U. S. 648, 15 Sup. Ct. 207, 39 L. Ed. 297; Leloup v. Mobile, 127 U. S. 640, 8 Sup. Ct. 1380, 32 L. Ed. 311; and many other cases.
Whether an act, a course of conduct, or a state statute affects inter-', state commerce incidentally or directly, within the above rule, depends upon the circumstances' of each particular case. It is not shown, in this evidence, that the volume of interstate business of these complainants was such as to affect prices, in interstate commerce, of such goods, if these factories ceased their output. It is shown that they manufactured several million dollars worth of goods annually and that much of this went into interstate commerce. But we are not, in any way, advised what percentage or proportion this business bore to the entire volume of interstate business in such goods. I do not think we are authorized, with no evidence whatsoever, to say that interstate business, as a whole, in this kind of products would be affected by this strike, and thus attempt to sustain our jurisdiction by bringing this case within the rule of application as laid down in U. S. v. Patten, 226 U. S. 525, 33 Sup. Ct. 141, 57 L. Ed. 333, 44 L. R. A. (N. S.) 325, and similar cases.
To my mind, the facts of this case are much stronger than the United Mine Workers’ Case, supra, and there the Supreme Court found no jurisdiction, although it said:
“The circumstances are such as to awaken regret that, in our view of the federal jurisdiction, we cannot affirm the judgment.”
The consequences of a legal rule are often useful in testing its accuracy. There can be no shadow of doubt as to the consequences of the rule laid down in the majority opinion. The natural, logical and inevitable result will be that every strike in any industry or even in any single factory will be within the Sherman Act and subject to *465federal jurisdiction provided any appreciable amount of its product enters into interstate commerce. Moreover, if this be true as to the products produced in such industry or factory, it is entirely logical the same rule should apply to the raw materials used in such production if any of them are subjects of interstate commerce. In a practical sense, this would result in all strikes being subject to federal jurisdiction, because scarcely any factory is so small that some of its finished products do not enter into interstate commerce.' And yet the Supreme Court has, within the six months, held that a strike in a mine shipping seventy-five percentum of its coal in interstate commerce and involving many miners and much property was without the federal jurisdiction (United Mine Workers’ Case, supra), and that court has never departed from, but has repeatedly and recently affirmed, the doctrine, announced almost 40 years ago, that manufacturing of interstate products is not interstate commerce.
As to the third basis of'the majority opinion. — that the means employed to execute this conspiracy were unlawful: Such means included intimidation and violence. The unlawful character of intimidation and violence is beyond question, but that has nothing to do with the question of whether punishment therefor or prevention thereof should be in the state of in the federal courts. In the United Mine Workers’ Case, supra, the means employed were far more vicious than here, including arson, riot, and murder. Yet it was not even suggested, in that bitterly contested case, that the means employed by the strikers had anything whatever to do with the jurisdiction of the court.
For the above reasons, .1 find myself unable to concur in the result or reasoning of my able Associates, and therefore dissent therefrom. I am further sustained by the case of Gable v. Vonnegut Machinery Co., 274 Fed. 66, recently decided by the Court of Appeals for the Sixth Circuit. In that case, by far the greater part of the products manufactured, in the plants affected, went into interstate commerce and contracts were in existence for much of such future product. In discussing the scope of the Sherman and Clayton Acts, that court said (page 73) :
“Neither of these statutes furnishes a remedy against acts merely because they incidentally and indirectly affect interstate commerce; they apply only to acts which directly and immediately relate thereto. Manufacturing is not commerce. None of the cases cited support the theory that a manufacturer may invoice the Jurisdiction of the federal court merely because a strike interferes with the manufacture of his products which are sold generally in interstate commerce.”
The court further said (page 74):
“The record before ns is barren of evidence that the object of the strike was to interfere with interstate commerce. So far as appears, either directly or inferentially, the strikers’ only object was to obstruct the operation of the tool company’s plant. The fact that shipment was interfered with, only1 because goods were not manufactured, merely incidentally and indirectly-affected interstate commerce.”