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JOHNSTON DEV. GROUP v. CARPENTERS LOCAL UNION NO.

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY


May 10, 1989

JOHNSTON DEVELOPMENT GROUP, INC., et al., Plaintiffs,
v.
CARPENTERS LOCAL UNION NO. 1578, et al., Defendants

The opinion of the court was delivered by: BROTMAN

STANLEY S. BROTMAN, UNITED STATES DISTRICT JUDGE.

 Presently before the court is the application of plaintiffs, Johnston Development Group, Inc. and Glassboro Development Co., Inc., for a temporary restraining order enjoining the defendants, Carpenters Local Union No. 1578, Frank Spencer, Ronald Jurnegan and "others acting in concert with them," ("Carpenters" or "the Union") from representing to prospective customers of plaintiffs that buying a home at plaintiffs' Hidden Creek development constitutes a health risk as a result of its close proximity to the Lipari Landfill.

 FACTS AND PROCEDURE

 Johnston Development Group, Inc., in a joint venture with Glassboro Development Co., Inc. d/b/a Plank Run Developers Partnership, L.P., is developing a residential subdivision known as "Hidden Creek." The subdivision is located in Glassboro, New Jersey, and is less than one mile from the Lipari Landfill, which is currently ranked number one on the United States Environmental Protection Agency's Superfund cleanup list. While plaintiffs do not directly employ any carpenters -- union or non-union -- or other trades persons in their development, they do subcontract all construction work to other companies and those companies apparently do not employ union carpenters.

 In the fall of 1988, Carpenters Local 1578 began picketing the Hidden Creek development. *fn1" In response to the picketing, plaintiffs filed an "unfair labor practice" charge with the National Labor Relations Board (NLRB or "Board"), alleging that the Union's actions violated sections 8(b)(4)(i) and (ii)(B) of the National Labor Relations Act, 29 U.S.C. § 158(b)(4)(i) and (ii)(B), as amended. *fn2"

 After an investigation, the NLRB filed an injunction action with this court, pursuant to 29 U.S.C § 160(l), *fn3" to enjoin what the Board had determined to be an unfair labor practice. The parties (the NLRB and the Union) settled the dispute by entering into a Stipulation on October 28, 1988, whereby the Union agreed to stop picketing the Hidden Creek site. See Stipulation and Order, attached to plaintiff's Memorandum of Law as Exhibit F.

 Subsequently, on February 8, 1989, plaintiffs filed the complaint in this action, alleging, inter alia, violations of the Racketeer Influenced and Corrupt Organizations law, antitrust law, and 29 U.S.C. § 158(b)(4)(ii)(B) *fn4" , as well as various state tort claims. Besides its prayer for monetary relief, the complaint requests that the court preliminarily and permanently enjoin the defendants' unlawful conduct (which, the complaint alleges, goes far beyond simple picketing to include extortion, violence and threats of violence), pursuant to section 7 of the Norris-LaGuardia Act, 29 U.S.C. § 107.

 Thereafter, beginning on or about February 18, 1988, and continuing on February 19 and every weekend until April 14, 1989, between two and five members of the union, dressed in white decontamination suits and wearing gas masks, have stood at or near the entrance to Hidden Creek and distributed handbills identical to those attached to plaintiff's Memorandum of Law as Exhibits A and B. Basically, the pamphlets, with the aid of somewhat hyperbolic -- but not clearly false -- language, photos and drawings, warned prospective home buyers of the potential dangers of living so close to the Lipari Landfill. Except for some very small print stating that they were paid for by Carpenters Local 1578, the pamphlets contain no indication of the underlying labor dispute.

 Plaintiffs responded to this latest union tactic in two ways. First, they amended their complaint in the underlying lawsuit to include the incidents of handbilling as examples of the defendants' alleged unlawful activity. Second, plaintiffs filed another unfair labor practice charge with the National Labor Relations Board alleging, once again, a violation of § 158(b)(4)(i) and (ii)(B). *fn5" This time, however, after an investigation of plaintiffs' allegations, the Regional Director of the Board refused to issue a complaint, stating: "The handbilling engaged in by the Union did not constitute picketing." See Letter of Regional Director of NLRB, attached to plaintiff's Memorandum of Law as Exhibit H. The Regional Director went on to state that, even if the handbilling had a secondary object within the meaning of § 158(b)(4)(i) and (ii)(B), it was not necessarily unlawful. Id. The Director relied on the recent Supreme Court decision in Edward J. DeBartolo Corp. v. Fla. Gulf Coast Bldg. & Const. Trades Council and NLRB, 485 U.S. 568, 108 S. Ct. 1392, 99 L. Ed. 2d 645 (1988), in which the Court stated that there is no "clear indication in the relevant legislative history that Congress intended § 8(b)(4)(ii) to proscribe peaceful handbilling, unaccompanied by picketing, urging a consumer boycott of a neutral employer." Id. 108 S. Ct. at 1402. Plaintiffs appealed the Regional Director's decision to the General Counsel of the NLRB and on May 4, 1989, the General Counsel affirmed the Regional Director's refusal to issue an unfair labor practice complaint. *fn6"

 Because of -- or in spite of -- the NLRB's refusal to issue a complaint against the defendants' most recent activity, plaintiffs first sought a temporary restraining order in the Chancery Division of New Jersey Superior Court. Before their claim could be heard, however, plaintiffs voluntarily dismissed their state case and brought this virtually identical application before this court seeking to enjoin the Carpenters from distributing the handbills at the Hidden Creek development.

 Oral argument and fact-finding hearings were held by this court on April 14, 21 and 27, 1989, and the parties have also conducted settlement negotiations. It was during one of these negotiating sessions on April 14, 1989, that the Union agreed to limit the number of handbillers present at Hidden Creek at any one time to two, to cease wearing the decontamination suits and gas masks, and to revise its handbills to contain less inflammatory language. *fn7" Plaintiffs, however, are not satisfied with these remedial measures and still seek injunctive relief on the grounds that the Union's actions constitute malicious libel and tortious interference with prospective contractual relations.

 DISCUSSION

 Before the court may address the merits of plaintiffs' claim, it must determine whether it may hear the matter at all, as there is a serious question as to whether federal labor law divests this court of jurisdiction over this dispute. *fn8"

  The basic question that must be answered by this court in determining its jurisdiction over the instant action is whether a federal district court has the power to enjoin "secondary" labor activity. Put simply, secondary activity, in the form of strikes, boycotts, picketing and appeals to consumers, is action taken by a union or other group not against the employer with whom they have a labor dispute, but against those who do business with the employer. The main purpose of such secondary activity is to force the employer to succumb to the union's demands by isolating it from the business community by cutting off its suppliers, customers and other economic partners.

 The twentieth century has seen Congress continually refine and curtail the jurisdiction of the federal courts over both primary and secondary labor activity. *fn9" In the early 1900's, when labor unrest was at its peak, employers found a strong ally in the federal courts which were active in enjoining concerted labor activities, mainly through the application of the Sherman Antitrust Act of 1890, 15 U.S.C. § 1 et seq.10 While passage of the Sherman Act was originally intended to combat the abusive practice of manufacturers combining to monopolize avenues of production and distribution, thus controlling prices and markets, the anti-labor courts of the era used it to frustrate the objectives of labor unions. In fact, in 1908 in Loewe v. Lawlor, 208 U.S. 274, 52 L. Ed. 488, 28 S. Ct. 301, the Supreme Court held a secondary boycott by members of a striking hatters' union to be illegal under the Sherman Law and sustained a private judgment for treble damages against individual employee defendants.

 A. The Clayton Act

 In response to this judicial trend, Congress passed the Clayton Act of 1914 the purpose of which was "to equalize before the law the position of workingmen and employer as industrial combatants." Duplex Printing Press Co. v. Deering, 254 U.S. 443, 484, 65 L. Ed. 349, 41 S. Ct. 172 (1921). In particular, Section 20 of the Clayton Act, 29 U.S.C. § 52, was intended to "[withdraw] from the general interdict of the Sherman Law specifically enumerated practices of labor unions by prohibiting injunctions against them." United States v. Hutcheson, 312 U.S. 219, 229-30, 85 L. Ed. 788, 61 S. Ct. 463 (1941). *fn11" While the language of § 20 was clearly broad enough to protect all peaceful strike activity, whether primary or secondary, Burlington Northern Railroad Co. v. Brotherhood of Maintenance of Way Employees, 481 U.S. 429, 438, 95 L. Ed. 2d 381, 107 S. Ct. 1841 (1987) (9-0 decision), the early courts did not read it that way. In Duplex Printing Press Co. v. Deering, 254 U.S. 443, 65 L. Ed. 349, 41 S. Ct. 172 (1921) (overruled by the Norris-LaGuardia Act of 1932, 29 U.S.C. §§ 101-115, see discussion infra), the Supreme Court held that § 20 did not prevent courts from enjoining peaceful secondary strike activity. In reaching its conclusion, the Court apparently relied on some remarks made during the legislative debates on the bill and on its general view of the significance -- both political and economic -- of secondary picketing. According to the Court, secondary picketing could be enjoined because "Congress had in mind [the protection of] particular industrial controversies, not a general class war." Id. at 472. See also Burlington Northern, 481 U.S. at 438.

 B. The Norris-LaGuardia Act

 In 1932 Congress responded to this unduly restrictive judicial construction of the Clayton Act by passing the Norris-LaGuardia Act, 29 U.S.C. §§ 101-115. The legislative history of the Act makes it clear that the intent of Congress was, once again, to attempt to limit the injunctive powers of the federal courts in labor disputes. As Representative LaGuardia stated in a speech typical of those in support of the bill:

 

Gentlemen, there is one reason why this legislation is before Congress, and that one reason is disobedience of the law on the part of whom? On the part of organized labor? No. Disobedience of the law on the part of a few Federal judges. If the courts had been satisfied to construe the law as enacted by Congress, there would not be any need of legislation of this kind. If the courts had administered even justice to both employers and employees, there would be no need of considering a bill of this kind now. If the courts had not emasculated and purposely misconstrued the Clayton Act, we would not today be discussing an anti-injunction bill.

 75 Cong. Rec. 5478 (1932). *fn12" The Supreme Court, too, has recognized that the purpose of the Norris-LaGuardia Act was to revitalize and strengthen the protection which the Clayton Act had tried to provide to labor unions. See United States v. Hutcheson, 312 U.S. 219, 235-36, 85 L. Ed. 788, 61 S. Ct. 463 (1941) ("The underlying aim of the Norris-LaGuardia Act was to restore the broad purpose which Congress thought it had formulated in the Clayton Act but which was frustrated, so Congress believed, by unduly restrictive judicial construction."). See also, Burlington Northern, 481 U.S. at 438.

 The Norris-LaGuardia Act addressed the judicially-crafted loopholes in the Clayton Act in three ways. First, it declared that no restraining order or injunction could be issued contrary to the public policy as declared in the Act. 29 U.S.C. § 101. That statement of public policy, in essence, declared that employees be permitted to organize and collectively bargain free of employer coercion. *fn13"

  Second, the Act removed any perceived distinction between primary and secondary labor disputes by extending its protection to those involved in any case " involving or growing out of a labor dispute. . . regardless of whether or not the disputants stand in the proximate relation of employer and employee." 29 U.S.C. §§ 101 & 113(c) (emphasis added). See also Burlington Northern, 481 U.S. at 439; United States v. Hutcheson, 312 U.S. at 231. Finally, the Norris-LaGuardia Act completely abolished the power of the federal courts to issue injunctions in certain enumerated instances, 29 U.S.C. §§ 104 & 105, *fn14" and severely limited the courts' power to enjoin labor activity in any case growing out of a labor dispute. 29 U.S.C. §§ 101, 107-09. *fn15"

 If the statutory development of labor law had ended with the Norris-LaGuardia Act, then this court would, arguably, have jurisdiction over the instant dispute and the power to issue an injunction. It is clear that this case involves or grows out of a labor dispute thus invoking the jurisdiction of the Norris-LaGuardia Act. The Supreme Court has traditionally read the phrase "involving or growing out of a labor dispute" very broadly, see Burlington Northern, 481 U.S. at 440-42; New Negro Alliance v. Sanitary Grocery Co., 303 U.S. 552, 560-61, 82 L. Ed. 1012, 58 S. Ct. 703 (1938), and if the court correctly understands the true history of this case, it is clear that the present handbilling "grows out of" a labor dispute. Plaintiffs argue that the Carpenters' handbilling is an effort to force plaintiffs to fire their nonunion subcontractors and while defendants have denied this, the court finds it to be so from the record. *fn16"

  Given the fact that this case grows out of a labor dispute, and if not for the operation of the National Labor Relations Act, see infra, the court's task would be to determine whether any of the specific prohibitions of the Norris-LaGuardia Act deprive it of jurisdiction to enjoin the union's activities. Absent such a specific prohibition, the court could, after making appropriate findings, grant plaintiffs' request for relief. This court's research reveals, however, that while the defendants' actions are not protected by any of the specific prohibitions of the Norris-LaGuardia Act, the National Labor Relations Act operates to deprive this court of jurisdiction over the matter.

 C. The National Labor Relations Act

 In 1935 Congress passed the Wagner Act, better known as the National Labor Relations Act, 29 U.S.C. § 151 et seq. (NLRA), which expanded the reach of federal labor law, declaring:

 

Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.

 

. . .

 29 U.S.C. § 157. Section 8 of the Act, 29 U.S.C. § 158, declared certain acts of employers, such as interfering with employees' exercise of their § 7 (§ 157) rights -- to be illegal. These "unfair labor practices," as they were called, were to be monitored and policed by the quasi-judicial administrative agency created by the Act -- the National Labor Relations Board. The NLRB was given exclusive jurisdiction to order the employer to remedy its unfair labor practices and to petition the United States District Court for injunctive relief. 29 U.S.C. § 160(a) & (j). Furthermore, the Act made final decisions of the Board reviewable by the Courts of Appeals.

 Twelve years later, in response to what it felt to be overzealous persecution of employers by the NLRB and in an effort to stem an increasing tide of secondary strikes and boycotts by labor unions which it felt unfairly involved "innocent" third-parties in labor disputes, Congress amended the NLRA by adding a list of unfair labor practices by labor organizations. *fn17" Once again, the NLRB was given exclusive jurisdiction over the regulation of the unfair labor practices.

 It is clear from a reading of the NLRA and relevant Supreme Court precedent that the NLRA governs the regulation of secondary labor activity and that the NLRB is vested with the exclusive authority to seek injunctions against prohibited forms of secondary activity. Indeed, in the recent case of Burlington Northern Railroad Co. v. Brotherhood of Maintenance of Way Employees, 481 U.S. 429, 95 L. Ed. 2d 381, 107 S. Ct. 1841, Justice Brennan, writing for a unanimous court, held:

 

The NLRA does not permit employers to seek injunctions against the activity that it does prohibit. It grants to the National Labor Relations Board (NLRB) exclusive authority to seek injunctions against some forms of secondary activity. Thus, congressional policy, as expressed in the NLRA, remains that employers are not permitted to obtain injunctions of secondary activity.

 Id. at 448 (citations omitted). See also Hirsch v. Building & Const. Trades Council, 530 F.2d 298, 307-08 (3d Cir. 1976).

 Consistent with the mandate of the NLRA, plaintiffs, just as they had done in the fall of 1988, filed unfair labor practice charges with the NLRB alleging violations of § 158(b)(4)(i) and (ii)(B). *fn18" This time, however, the Regional Director of the Board refused to issue an unfair labor practice complaint (which would have enabled the Board to petition this court for a temporary injunction under 29 U.S.C. § 160(l) (a "10(l) injunction")). As discussed above, the Director based his decision on the recent Supreme Court case of Edward J. DeBartolo Corp. v. Florida Gulf Coast Bldg. & Const. Trades Council, 485 U.S. 568, 108 S. Ct. 1392, 99 L. Ed. 2d 645 (1988) (8-0 decision). *fn19"

 In DeBartolo, the Court held unequivocally that "peaceful handbilling, unaccompanied by picketing, urging a consumer boycott of a neutral employer" is not proscribed by the terms of the NLRA, specifically § 158(b)(4)(ii). Id. 108 S. Ct. at 1402. As the court stated:

 

At no time did [the Congressional proponents of the NLRA] suggest that merely handbilling the customers of the neutral employer was one of the evils at which their proposals were aimed. Had they wanted to bar any and all nonpicketing appeals, through newspapers, radio, television, handbills or otherwise, the debates and discussions would surely have reflected this intention. Instead, when asked, Congressman Griffin, co-sponsor of the bill that passed the House, stated that the bill covered boycotts carried out by picketing neutrals but would not interfere with the constitutional right of free speech.

 Id. In essence, the Court based its determination on two different factors. First, it refused to interpret the statute in a way that would raise serious constitutional -- in this case, first amendment -- problems. Id. 108 S. Ct. at 1397 (citing NLRB v. Catholic Bishop of Chicago, 440 U.S. 490, 59 L. Ed. 2d 533, 99 S. Ct. 1313 (1979)). Second, the court held there to be a crucial distinction between "picketing" or "patrolling" and mere handbilling. The former, argued the court, "coerces" secondary employers in contravention of the language of the Act, while handbilling does not:

 

Picketing is "a mixture of conduct and communication" and the conduct element "often provides the most persuasive deterrent to third persons about to enter a business establishment." . . . The loss of customers because they read a handbill urging them not to patronize a business, and not because they are intimidated by a line of picketers, is the result of mere persuasion, and the neutral who reacts is doing no more than what its customers honestly want it to do.

 Id. 108 S. Ct. at 1400 (citations omitted). In light of the above analysis, it is clear that the environmental cleanup suits worn by the defendants cannot be seen as "coercive" as their effect seems to have been to encourage prospective customers to accept and read the handbills (the "message") and not simply to be frightened off. *fn20" Furthermore, the fact that the defendants may have had an ulterior motive behind their "public interest" handbilling is irrelevant if the message itself is protected. See NAACP v. Claiborne Hardware Co., 458 U.S. 886, 911, 73 L. Ed. 2d 1215, 102 S. Ct. 3409 (1982) (8-0 decision) (citing Organization for a Better Austin v. Keefe, 402 U.S. 415, 419, 29 L. Ed. 2d 1, 91 S. Ct. 1575 (1971)).

 The case at bar is factually strikingly similar to DeBartolo in the way the union conducted its secondary activity. In fact, the only major difference is that in the present case the handbills do not publicize the facts concerning the labor dispute, as specifically protected by § 158(b)(4)(ii). *fn21" However, the DeBartolo court dealt with this issue, concluding that the "publicity" proviso of § 158 was meant to ensure that publicity regarding the fact that certain products are produced by a struck employer is not considered "coercive" under the section but is given the same protection as other types of peaceful publicity, none of which is an unfair labor practice under the NLRA. Id. 108 S. Ct. at 1401.

 In short, the NLRB has exclusive jurisdiction to determine whether secondary labor activity constitutes an unfair labor practice, and only the NLRB may bring an action in federal district court to enjoin such activity. A party aggrieved by the decision of a Regional Director of the Board may appeal to the General Counsel of the NLRB and any appeals from his decision must be taken directly to the United States Court of Appeals. Furthermore, even if the NLRB were to bring an action to enjoin the union's activities in this case, it appears that DeBartolo would prevent this court form granting an injunction or restraining order.

 Plaintiffs advance two additional arguments in an attempt to invoke this court's jurisdiction. First, as discussed in footnote 4, above, plaintiffs contend that the Union's handbilling is in violation of the October 28, 1988, Stipulation entered into between the NLRB and the Union and approved by this court. This contention is without merit. The Stipulation itself is quite clear as to what union activity is proscribed; it prohibits efforts by the Carpenters to convince employees -- not customers -- of Johnston and its subcontractors and suppliers to cease doing business at Hidden Creek. Furthermore, Paragraph 2 of the Stipulation sets forth the procedure to be followed if a violation of its terms is deemed to have occurred. Significantly, only the NLRB ("the Petitioner") is given authority to request that the court reopen its injunction proceeding. *fn22" Such language in the Stipulation is, of course, consistent with the provisions of the NLRA which give the NLRB sole authority to determine whether secondary labor activity is an unfair labor practice, and to bring an action in federal court to enjoin the activity. See 29 U.S.C. § 160. See also Burlington Northern, 481 U.S. at 448; Hirsch, 530 F.2d at 307-08.

 On April 27, 1989, the Regional Director of the NLRB informed the court both in chambers and on the record that, not only did he feel that the Union's present activities do not constitute an unfair labor practice under the NLRA, but also that it was the Board's position that the defendants had not violated the October 28, 1988, Stipulation. As a result, the Regional Director requested that the court not take any action against the Union and suggested that the court lacked jurisdiction to do so in any event. The court is forced to agree.

 Plaintiffs' other argument, upon which they have placed great weight and expended considerable energy, must also fail. Plaintiffs rely on a series of cases which hold that state and federal courts are not deprived of jurisdiction by federal labor law where a union circulates false and defamatory statements about another party during a labor dispute. See, e.g., Linn v. United Plant Guard Workers of America, 383 U.S. 53, 15 L. Ed. 2d 582, 86 S. Ct. 657 (1966).

 While this court agrees with the reasoning behind these decisions, they are clearly inapplicable to the present case. What Linn and its progeny make clear is that for union activity such as that undertaken by the Carpenters to fall outside the preemptive jurisdiction of federal labor law, it must be false. As the Supreme Court stated in Linn :

 

We conclude that where either party to a labor dispute circulates false and defamatory statements during a union organizing campaign, the court does have jurisdiction to apply state remedies if the complainant pleads and proves that the statements were made with malice and injured him.

 Id. at 55 (emphasis added). While plaintiffs have, arguably, set forth facts sufficient to establish that the union's revised handbill has injured them (see Record of Testimony dated April 21, 1989), and has been distributed with malicious intent, they have not proven that the statements contained therein are false. Plaintiffs have presented testimony and supplied this court with numerous exhibits in an effort to establish that the Lipari landfill does not pose a threat to persons living nearby. However, plaintiffs have not presented sufficient evidence to carry their burden of proving that the statements contained in the Union's revised handbill are, in fact, false. Significantly, the handbill contains no opinions as to the dangerousness of the landfill. Instead, the union simply sets forth facts about the landfill -- facts that the plaintiffs have not established to be false and the court accepts as true -- and urges the public to "consider" and "investigate" the facts. Since plaintiffs have not presented any evidence that the "facts" presented in defendants' handbill are, indeed, false, the court is in no position to exercise jurisdiction over this matter under the Linn doctrine.

 CONCLUSION

 For the reasons stated above, the court must deny plaintiffs' application for a temporary restraining order. The court finds that its jurisdiction to grant injunctive relief is preempted by federal labor law and that the judicially crafted exception for false and defamatory speech does not apply to this case.

 An appropriate order will be entered.

 ORDER - May 10, 1989, Filed

 This matter having come before the court on the application of plaintiffs, Johnston Development Group, Inc. and Glassboro Development Co., Inc. for a temporary restraining order; and

 The court having considered the submissions of the parties, taken testimony, and heard arguments of counsel; and

 For the reasons set forth in the court's opinion filed this date;

 IT IS on this 10th day of May, 1989, hereby

 ORDERED that the application of plaintiffs for a temporary restraining order is DENIED.

 No costs.


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