McCOLLOCH, District Judge.
This is an injunction action. .Treble damages are also claimed.
Plaintiff has (or has had recently) receiving, packing, .canning and processing plants and equipment, including floating equipment, in Oregon, Washington, California and Alaska. Plaintiff does no fishing itself. It cans and processes sixty per cent, of the pack of salmon and other marine products put up in Oregon. Since the appearance of albacore tuna off the Oregon coast in recent years, plaintiff has prepared to pack that fish in commercial quantities. To that end, it has expended a large sum for additional plant and equipment at Astoria, Oregon.
The defendant union is an affiliate of the Congress of Industrial Organizations. Its membership includes 90% of the commercial troll fishermen, fishing off shore in Oregon and Washington. The union has a large additional membership among fishermen who fish in the rivers and bays of Oregon and Washington, not including the Columbia River. Union counsel stated at the argument that the defendant did not now claim jurisdiction over California and Alaska waters, but the evidence showed that quite recently defendant had asserted jurisdiction over fishermen in California and Alaska.
This controversy is over the requirement which defendant union imposes on all packers and canners contracting with it, that those contracting will not buy fish from .any one.not a member of the union. The •union’s constitution and by-laws obligate union members not to sell fish to packers ■or canners not under contract with the union. The record, I think, shows that all the packers and canners in Oregon, other than plaintiff, are under contract with defendant at the present time.
Towards the end of last year’s fishing season (1938), certain fishermen, residents of the State of Washington, not members of the defendant union, offered their fish for sale to plaintiff. Plaintiff’s officials informed the Washington fishermen that plaintiff could hot buy from them because of the said “exclusive clause” in the contract which plaintiff then had with the union, whereupon the Washington fishermen threatened plaintiff, with criminal prosecution and civil suits under the Federal Anti-Trust Laws. Caught between two fires — the demand of the union that it renew the exclusive buying clause of the union contract, and the threat of the independent fishermen to claim damages from plaintiff if it does renew the exclusive buying clause — plaintiff has now begun this proceeding at the opening of the 1939 fishing season for the adjudication of the legality of -the exclusive buying clause in defendant’s contracts.
Plaintiff asks for an injunction restraining defendant from interfering with purchases of fish by plaintiff from any source, for a judgment invalidating such portion of the contracts between defendant and other packers and canners of fish, whereby the packers and canners agree not to buy fish from others than defendant’s members, and whereby the defendant agrees for its members that they will not sell fish to any packers and canners not having exclusive contracts with it. Plaintiff also asks for damages caused by defendants’ interference with pending contracts for the 1939 season, and that these damages be trebled, as provided in the Anti-Trust Laws. 15 U. S.C.A. § 1 et seq.
Before beginning the suit, plaintiff offered to negotiate with defendant, in accordance with past practice, for a price to be paid on the season’s catch, but refused to sign a contract containing the exclusive buying clause. Thereupon, defendant’s members were notified by the union’s officers not to sell fish to plaintiff. This suit was then filed.
Plaintiff asserts that it cannot obtain the fish it needs to supply it’s customers throughout the United States and in other countries, if it is limited to the catch of fishermen not members of the union.
Defendant charges that plaintiff’s motive in
bringing this suit is to
destroy the
union, particularly that • plaintiff is seeking to obtain this season’s and later catches of the recently discovered run of albacore tuna off the Oregon coast at a lower price than it would have to pay if under exclusive contract with defendant.
The Norris-La Guardia Act.
Defendant claims that this is a “labor dispute”, and that the Norris-La Guardia Act, 29 U.S.C.A. § 101 et seq., which prohibits injunctions in labor disputes (except in cases involving fraud or violence), should apply. No fraud or violence is charged by plaintiff.
Plaintiff contends that the relation of employer-employee does not obtain between it and defendant’s members, and for that reason disputes the application of the Norris-La Guardia Act. Plaintiff claims that defendant’s members are free to fish as and when they please, and that it has no control over -defendant’s members or their operations in any of the respects which usually characterize the relation of employer and employee. Plaintiff’s complaint characterizes the fishermen as “independent contractors”. At the trial, plaintiff suggested that it was more apt to describe the fishermen as “merchants”, a characterization used by Judge H. K. Zimmerman of the Oregon State Circuit Court in a case between the same parties and involving the same questions, heard by him several years ago,
The union’s brief refers to the union as a “trade association”, and defendant union relies for further justification of its challenged practices on the provisions of the Act of Congress of June 25, 1934, 15 U.S.C.A. § 521, authorizing fishermen to market collectively. This Act contains a provision that the Secretary of Agriculture may order organizations of fishermen which market collectively, to cease and desist any operations which the Secretary has reason to believe restrain trade to the extent of unduly enhancing prices. The Act provides for injunctive proceedings by the Department of Justice, in the event that such orders- by the Secretary are not observed. Defendant urged at the trial that this procedure is exclusive in any case where a monopolistic practice has sprung up, but the Supreme Court has. lately rejected a similar contention in interpreting the Capper-Volstead Act, 7 U.S.C.A. § 291, after which the Fishermen’s Collective Marketing Act was copied. United States v. Borden
Company et
al., 1939, 308 U.S. 188, 60 S.Ct. 182, 84 L.Ed. 181.
Defendant also denies that the case involves interstate commerce.
Labor Dispute Not Involved.
Passing without comment the inconsistency in defendants’ position that the case presents on the one hand a labor dispute involving the relation of employer and employee, within the meaning of the Norris-La Guardia Act, and on the other hand that it presents a question of cooperative marketing by independent producers within the meaning of the Fishermen’s Collective Marketing Act, I deal: first with the contention that a labor dispute is involved. Defendant calls attention-to (a) of Section 13 of the Norris-La Guardia Act, 29 U.S.C.A.
Free access — add to your briefcase to read the full text and ask questions with AI
McCOLLOCH, District Judge.
This is an injunction action. .Treble damages are also claimed.
Plaintiff has (or has had recently) receiving, packing, .canning and processing plants and equipment, including floating equipment, in Oregon, Washington, California and Alaska. Plaintiff does no fishing itself. It cans and processes sixty per cent, of the pack of salmon and other marine products put up in Oregon. Since the appearance of albacore tuna off the Oregon coast in recent years, plaintiff has prepared to pack that fish in commercial quantities. To that end, it has expended a large sum for additional plant and equipment at Astoria, Oregon.
The defendant union is an affiliate of the Congress of Industrial Organizations. Its membership includes 90% of the commercial troll fishermen, fishing off shore in Oregon and Washington. The union has a large additional membership among fishermen who fish in the rivers and bays of Oregon and Washington, not including the Columbia River. Union counsel stated at the argument that the defendant did not now claim jurisdiction over California and Alaska waters, but the evidence showed that quite recently defendant had asserted jurisdiction over fishermen in California and Alaska.
This controversy is over the requirement which defendant union imposes on all packers and canners contracting with it, that those contracting will not buy fish from .any one.not a member of the union. The •union’s constitution and by-laws obligate union members not to sell fish to packers ■or canners not under contract with the union. The record, I think, shows that all the packers and canners in Oregon, other than plaintiff, are under contract with defendant at the present time.
Towards the end of last year’s fishing season (1938), certain fishermen, residents of the State of Washington, not members of the defendant union, offered their fish for sale to plaintiff. Plaintiff’s officials informed the Washington fishermen that plaintiff could hot buy from them because of the said “exclusive clause” in the contract which plaintiff then had with the union, whereupon the Washington fishermen threatened plaintiff, with criminal prosecution and civil suits under the Federal Anti-Trust Laws. Caught between two fires — the demand of the union that it renew the exclusive buying clause of the union contract, and the threat of the independent fishermen to claim damages from plaintiff if it does renew the exclusive buying clause — plaintiff has now begun this proceeding at the opening of the 1939 fishing season for the adjudication of the legality of -the exclusive buying clause in defendant’s contracts.
Plaintiff asks for an injunction restraining defendant from interfering with purchases of fish by plaintiff from any source, for a judgment invalidating such portion of the contracts between defendant and other packers and canners of fish, whereby the packers and canners agree not to buy fish from others than defendant’s members, and whereby the defendant agrees for its members that they will not sell fish to any packers and canners not having exclusive contracts with it. Plaintiff also asks for damages caused by defendants’ interference with pending contracts for the 1939 season, and that these damages be trebled, as provided in the Anti-Trust Laws. 15 U. S.C.A. § 1 et seq.
Before beginning the suit, plaintiff offered to negotiate with defendant, in accordance with past practice, for a price to be paid on the season’s catch, but refused to sign a contract containing the exclusive buying clause. Thereupon, defendant’s members were notified by the union’s officers not to sell fish to plaintiff. This suit was then filed.
Plaintiff asserts that it cannot obtain the fish it needs to supply it’s customers throughout the United States and in other countries, if it is limited to the catch of fishermen not members of the union.
Defendant charges that plaintiff’s motive in
bringing this suit is to
destroy the
union, particularly that • plaintiff is seeking to obtain this season’s and later catches of the recently discovered run of albacore tuna off the Oregon coast at a lower price than it would have to pay if under exclusive contract with defendant.
The Norris-La Guardia Act.
Defendant claims that this is a “labor dispute”, and that the Norris-La Guardia Act, 29 U.S.C.A. § 101 et seq., which prohibits injunctions in labor disputes (except in cases involving fraud or violence), should apply. No fraud or violence is charged by plaintiff.
Plaintiff contends that the relation of employer-employee does not obtain between it and defendant’s members, and for that reason disputes the application of the Norris-La Guardia Act. Plaintiff claims that defendant’s members are free to fish as and when they please, and that it has no control over -defendant’s members or their operations in any of the respects which usually characterize the relation of employer and employee. Plaintiff’s complaint characterizes the fishermen as “independent contractors”. At the trial, plaintiff suggested that it was more apt to describe the fishermen as “merchants”, a characterization used by Judge H. K. Zimmerman of the Oregon State Circuit Court in a case between the same parties and involving the same questions, heard by him several years ago,
The union’s brief refers to the union as a “trade association”, and defendant union relies for further justification of its challenged practices on the provisions of the Act of Congress of June 25, 1934, 15 U.S.C.A. § 521, authorizing fishermen to market collectively. This Act contains a provision that the Secretary of Agriculture may order organizations of fishermen which market collectively, to cease and desist any operations which the Secretary has reason to believe restrain trade to the extent of unduly enhancing prices. The Act provides for injunctive proceedings by the Department of Justice, in the event that such orders- by the Secretary are not observed. Defendant urged at the trial that this procedure is exclusive in any case where a monopolistic practice has sprung up, but the Supreme Court has. lately rejected a similar contention in interpreting the Capper-Volstead Act, 7 U.S.C.A. § 291, after which the Fishermen’s Collective Marketing Act was copied. United States v. Borden
Company et
al., 1939, 308 U.S. 188, 60 S.Ct. 182, 84 L.Ed. 181.
Defendant also denies that the case involves interstate commerce.
Labor Dispute Not Involved.
Passing without comment the inconsistency in defendants’ position that the case presents on the one hand a labor dispute involving the relation of employer and employee, within the meaning of the Norris-La Guardia Act, and on the other hand that it presents a question of cooperative marketing by independent producers within the meaning of the Fishermen’s Collective Marketing Act, I deal: first with the contention that a labor dispute is involved. Defendant calls attention-to (a) of Section 13 of the Norris-La Guardia Act, 29 U.S.C.A. § 113(a), reading as follows: “(a) A case shall beheld to involve or to grow out of a labor dispute when the case involves persons who are engaged in the same industry, trade, craft, or occupation; or have direct or indirect interests therein, * * But (c) of the same Section must also be considered. It reads: “(c) The term ‘labor dispute’ includes any
controversy
concerning
terms or conditions of employment,
or concerning; the association or representation of persons in negotiating, fixing, maintaining, changing, or seeking
to
arrange
terms or conditions of employment,
regardless of whether or not the disputants stand in the proximate relation of employer and employee.”' (Italicizing added.)
“Terms or conditions of employment” within the meaning of the Act are not, in-my opinion, involved in this controversy. Plaintiff refers'to defendants as “independent contractors”, but defendant union has more aptly described itself in claiming the benefits of the Fishermen’s Collective Marketing Act. It is truly a cooperative marketing association, and we look to the law of cooperative marketing rather than to labor law in the determination of the legality of defendants’ acts.
Defendant’s members are producers, just as cattlemen, grain growers, poultry raisers and orchardists, are producers. Could it be maintained that a cooperative association of any of the types of producers named, having substantial control of production in their given field, could require of all buyers that they agree not to buy from any other producers, and could forbid and prevent their members by fines and other dis
ciplinary measures from selling to buyers who did not thus agree to buy only from members of the cooperative? Research by counsel during the week’s trial and my own research has not disclosed so extreme a claim by any cooperative marketing association in the long history of cooperatives.
While the point was not pressed at the argument, I ask this question in behalf of the consuming public, whose interests are paramount in determining any controversy arising under the Anti-Trust Laws (Paramount Famous Lasky Corporation et al. v. United States, 1930, 282 U.S. 30, 51 S.Ct. 42, 75 L.Ed. 145) : In any year when defendant’s members did not choose to fish”, how would the consuming public get its needs of salmon, tuna and other marine products from North Pacific waters? Since the union’s contract does not guarantee a supply of fish, where would the canneries get fish, having agreed to look to the union for their sole supply? Surely reasonable men will agree that the public’s interest in an important item of food supply should not be put in such jeopardy. If an exclusive and monopolistic arrangement, as here insisted upon, can be legally made as to fish, it can he made as to milk, as to meat, and as to other necessities of life.
Defendant likens its claim to the closed shop in industry, but I cannot concede an analogy. The special and peculiar economic problems growing out of the true relation of employer and employee which _ have caused sanction to be given by modern decisions and legislation to the closed shop in industry, do not, in my opinion, furnish precedent for a monopoly in the taking and distribution of an important natural food stuff, the common bounty of all men.
Restraint of Trade and Interstate Commerce
Plaintiff distributes its product widely throughout the United States and abroad, and since defendants’ acts are directly intended, and will, if carried out, have the effect of denying plaintiff the
needed raw material to carry on its business, I entertain no doubt that the Federal Anti-Trust Laws apply. The movements of fish to plaintiff’s canneries across State lines and from territorial and international waters strengthen the conviction that here is a proper case for invocation of the Federal Statutes.
The exclusive buying clause in the union’s contract, which forbids plaintiff from buying fish from others than members of the defendant union, and the clauses in the union’s constitution and by-laws which forbid union members from selling to plaintiff and to others not contracting with the union on the exclusive terms demanded, are, in my view, in restraint of trade and void. The conduct of the present defendants is condemned by all three counts of the criteria reaffirmed in Apex Hosiery Co. v. Leader et al., 310 U.S. 469, 512, 60 S.Ct. 982, 84 L.Ed. 1311, 128 A.L.R. 1044 (May 27, 1940), that that restraint to come within the sweep of the statutes is actionable, which both in purpose and effect monopolizes the supply, controls its price, or discriminates between its would-be purchasers. All three elements are here present. And see Consolidated Terminal Corporation v. Drivers, etc., et al., D.C., 33 F.Supp. 645, 649, 1st col.
I desire to express my appreciation of the candor and reasonableness with which the case has been presented on both sides, and to say also that I deeply sympathize with the earnestness and zeal manifested by the leaders of the defendant union in their struggle for better prices for the fish caught by their members, as well as their great interest in conserving the food supply with which they deal.
Having organized the fishermen ninety per cent., the defendant union has a great power in its hands. Such control, approaching a complete monopoly in the production of one of life's necessities, calls for reasonableness and moderation in the exercise of the power. I am certain that with so complete an organization, the fishermen will find that the powers granted by the Federal cooperative statutes are ample to protect their markets. More power over their markets than exercised by the other producers of the nation in the fields of ag
«culture, horticulture and the raising of livestock the fishermen of the North Pacific, whose interests defendant represents, cannot expect and should not demand. Injunction granted.
Supplemental Opinion Damages Under the Sherman Act Effect of the New Rules
The remaining question undisposed of on the motion for new trial is whether damages can properly be claimed and allowed in a suit for an injunction under the Anti-Trust Laws. The authorities, prior to. the new Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c, held that damages might only be claimed in a separate law action. Fleitmann v. Welsbach Street Lighting Co., 1916, 240 U.S. 27, 36 S.Ct. 233, 67 L.Ed. 505; Decorative Stone Co. v. Building Trades Council of Westchester County, 2 Cir., 1928, 23 F.2d 426, certiorari denied, 277 U.S. 594, 48 S.Ct. 530, 72 L.Ed. 1005.
Have the New Rules changed this rule as to damages?
I believe they have.
Rule No. 2 reads as follows: “There shall be one form of action to be known as ‘civil action.’ ”
In Note 2 to the above rule we learn: “Reference to actions at law or suits in equity in all statutes should now be treated as referring to the civil action prescribed in these rules.”
. Rule 18 provides as follows:
“(a) The plaintiff in his complaint or in a reply setting forth a counterclaim and the defendant in an answer setting forth a counterclaim may join either as independent or as alternate claims as many claims either legal or equitable or both as he may have against an opposing party. * * *
“(b) Whenever a claim is one heretofore cognizable only after another claim has been prosecuted to a conclusion, the two claims may be joined in a single action; but the court shall grant relief in that action only in accordance with the relative substantive rights of the parties. 'In particular, a plaintiff may state a claim for money and a claim to have set aside a conveyance fraudulent as to him, without first having obtained a judgment establishing the claim for money.”
Rule 20 and Forms 12, 13, 16 and 17, following the Rules, 28 U.S.C.A. following section 723c, also have a bearing on the question.
Whether a defendant in an injunction suit under the Anti-Trust Laws is still entitled to a jury trial on the amount of damages, and whether in such jury trial the question of violation of the Anti-Trust Laws, in addition to the amount of the damages, is to be redetermined by the jury (assuming that the equitable features of the case have first been tried and ruled adversely to the defendant), are different questions.
The present defendants urge that they were not given fair warning by the complaint herein that damages, as well as injunctive relief, were to be claimed — if they had had notice that damages were to be claimed, they would have made timely demand for jury trial. On the other hand, plaintiff contends that jury trial was waived by failure to make timely demand.
The prayer of the complaint as to damages is as follows: “For a decree ascertaining the damages suffered by plaintiff by reason of the unlawful acts of the defendants herein complained of, and awarding judgment in favor of the plaintiff and against the defendants, and each of them, for thrice the amount of said damages.”
The body of the complaint contained no allegation of damage prior to the commencement of the action. The sole allegation as to damage is contained in paragraph XVI, which reads: “That if a restraining order is granted, no damage will ensue to the defendants, . nor to any fisherman, whereas if a restraining order is not granted, the plaintiff will suffer a daily damage
(excluding Sundays) continuing throughout the 1939 fishing season, in the aggregate amount of $20,000, and unless restrained by an order of this court the defendants will continue their said unlawful conduct, and cause the plaintiff to suffer said damage.”
Defendants did not object to the testimony offered by plaintiff of damages occurring prior to the action, but, at the argument of the cause, objected to any claim for damages, on the ground that they had not been pleaded, defendants’ counsel stating that if they had been advised by plaintiff’s pleading that damages for prior acts would be claimed, defendants would have demanded a jury trial.
Plaintiff thereupon offered an appropriate amendment to its complaint to accord with the proof of damages made at the trial. Decision was reserved on the amendment, and the amendment allowed on the date the judgment, which was favorable to plaintiff, was entered.
Plaintiff contends that defendants have waived their right to jury trial by failing to demand it earlier, but I take the view, first, that the complaint prior to amendment was not adequate to advise the defendants that damages for prior acts would be claimed; and, second, that my ruling on the date when judgment was entered for plaintiff, allowing the amendment to the complaint, to include the allegations of prior damage, was the first time that the defendants had fair notice that damages were claimed and might be allowed, and was the first time defendants were under compulsion by the terms of Rule 38 of the New Rules to demand a jury trial. By that Rule defendants were given ten days in which to make such demand. They were deprived of this right by the immediate entry of the judgment. It follows that the portion of the judgment awarding treble damages should be and it is hereby stricken.
The other portions of defendants’ motion (p.s indicated at the last hearing) will he denied.