Overnite Transportation Co. v. International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers

125 S.E.2d 277, 257 N.C. 18, 1962 N.C. LEXIS 542, 50 L.R.R.M. (BNA) 2377

• Court: Supreme Court of North Carolina
• Decided: May 2, 1962
• Docket: 245
• Status: Published

Opinion

PIiggiNS, J.

Before us are 1,500 pages of record, exhibits and briefs. The defendant’s assignments of error alone cover 165 pages of the record. They are based on 484 exceptions taken during the course of the long and hotly contested trial. Review in detail is not indicated. Procedural questions involving the service of process and motion to postpone the trial have been considered. They are without merit.

The plaintiff instituted this civil action in the Superior Court of Mecklenburg County to recover damages, both actual and punitive, alleged to have resulted from a strike and secondary boycott called by the defendant in an unlawful effort to compel the plaintiff to sign a union labor contract with plaintiff’s employees. The plaintiff alleges its business “affects interstate commerce within the meaning of the Labor Management Relations Act.” (29 U.S.C.A. 151, et seq.) Section 187(a) provides: “It shall be unlawful for the purposes of this sec tion only, in an industry or activity affecting commerce for any labor organization to engage in, or to induce or encourage the employees of any employer to engage in, a strike or a concerted refusal in the course of their employment to . . . transport . . . any goods, articles, materials, or commodities . . . where an object thereof is— ... (2) forcing or requiring any other employer to recognize or bargain with a labor organization as the representative of his employees unless such labor organization has been certified as the representative of such employees under the provisions of Section 159 of this title; ... (b) whoever shall be injured in his business or property by reason of any violation of subsection (a) of this section may sue therefor in any district court of the United States ... or in any other court having jurisdiction of the parties and shall recover the damages by him sustained and the cost of the suit.” (Note: Section 187(a) seems to have been amended effective September 14, 1959, a date subsequent to the conduct complained of.)

The right to maintain the action and the jurisdiction of the State court to hear it arise by congressional grant. In fixing the rights and liabilities of the parties, the Superior Court on the trial, and this Court on appeal, must accept the interpretation the Supreme Court of the United States has placed upon the Acts of Congress here involved. Constitution of the United States, Article VI, Section 2; Constitution of North Carolina, Article I, Sections 3 and 5; State v. Davis, 253 N.C. 86, 116 S.E. 2d 365; Constantian v. Anson County, 244 N.C. 221, 93 S.E. 2d 163; Norris v. Telegraph Co., 174 N.C. 92, 93 S.E. 465.

Three basic questions are presented by the assignments of error: (1) The liability of International for the damages which proximately resulted from the strike. (2) Sufficiency of the evidence of actual damages to support the jury’s finding. (3) Sufficiency of the pleadings and evidence to support an award of punitive damages. Discussion of these questions will necessarily involve the challenged portions of the court’s charge with respect to them.

Its constitution states: The International Brotherhood of Teamsters, etc., shall consist of an unlimited number of local unions chartered by International. The stated purpose is “To organize under one banner all workmen engaged in the craft, and to educate them to cooperate in every movement which tends to benefit the organization. . . . This organization has jurisdiction over all teamsters, chauffeurs, warehousemen and helpers; all who are employed on or around . . . automobiles, trucks, trailers, and all other vehicles hauling, carrying or conveying freight, merchandise, or materials.” So complete is International’s control over local unions that it may suspend the local charter and place the locals in trusteeship under the direct supervision of International’s president. Indeed, even in this case, two of the locals, No. 55 and No. 391, involved in this strike, were in trusteeship, operating under the direct authority of James R. Hoffa, International President.

The evidence shows an agent of the union sent out “hot cargo” letters and addressed members of locals, particularly employed by Roadway Express, requesting them not to handle exchange freight for Over-nite. The contribution to the expenses of maintaining the strike made by International, the active participation of its Locals Nos. 55 and 391, under trusteeship, and by its Joint Council No. 9, sufficiently show that International was using the locals as its hands and arms to carry on the strike throughout the area according to plans which originated in its own head. N.L.R.B. v. International Brotherhood of Teamsters, 267 Fed. 2d 870, Certiorari denied, 361 U.S. 914, Rehearing denied, 361 U.S. 945; Dairy Distributors, Inc. v. International Brotherhood of Teamsters, 8 Utah 2d 124, 329 P. 2d 414, Certiorari denied, 360 U.S. 909; United Mine Workers of America v. Patton, 211 Fed. 2d 742, Certiorari denied, 348 U.S. 824.

The evidence offered at the trial sufficiently established a principal-agency relationship between International and its local unions in fomenting the strike in order to force plaintiff, an unorganized freight carrier, to enter into an employment contract with the union. There is not a suggestion that the union had been designated or certified as a proper bargaining agent for plaintiff’s employees. With respect to the principal-agency relationship, Judge Pless charged the jury:

“Now, then, coming to the first issue: Was the plaintiff, referring to Overnite Transportation Company, damaged by the wrongful acts of the defendant, as alleged in the Complaint? Now, that issue, ladies and gentlemen, will depend upon several factors. In the first place, the defendant, and you will remember that there is nobody here as party to this case except International Brotherhood which I have referred to as the union in the charge, is the only defendant, and it could be held responsible for what was done by others only in the event this was done in law as agent of the union. ... To give you what is meant by agency, it is the relation which results where one party called the ‘principal’ authorizes another party, called an ‘agent’ to act for him or it. The relationship of principal and agent may be created by word of mouth, writing or implied, by consent or acquiescence. A servant is an agent of his master, to deal more generally with things rather than with persons. The distinguishing difference between an agent and servant is that an agent can contract for his principal and bind his principal contractually, whereas a servant cannot so bind in contract his master. Both principal and master are liable for the torts of their agents and servants when acting in the scope of their employment.

“A person is responsible for not only his own acts, but for the acts of his employees or his agent when they are done within the scope of their employment and in furtherance of the business which is entrusted to them. The test of the liability, in all cases, depends upon the question whether the injury was committed by the authority of the master, expressly conferred or fairly implied from the nature of the employment and the duties incident to it. The simple test is whether they were acts within the scope of his employment, not whether they were done while prosecuting the master’s business, but whether they were done by the servant in furtherance thereof, and were such as may fairly be said to have been authorized by him.”

The parol testimony and the exhibits, interpreted in the light of International’s constitution, clearly indicate the cords which joined the many locals together in the strike effort, binding them to act in close concert throughout the four states, were manipulated by International. The evidence was sufficient to warrant the jury in finding the plaintiff was damaged by defendant’s wrongful acts.

The second question presents a somewhat more difficult problem. For proof of its actual damages, Overnite relied upon the testimony of its vice president and general manager and accounting supervisor, Mr. P. S. Simmons. After completing business college training and a course in financing, he became bookkeeper and cashier of Motor Transit Company, Raleigh. He was appointed terminal manager and then traffic manager dealing with cost analysis.

Upon returning from service he accepted employment by the North Carolina Utilities Commission and traveled throughout the State instructing motor carriers as to the method of keeping records, checking costs, and making the reports required by the Commission. He testified before the Commission in matters involving rates, etc. In 1951 he became assistant traffic manager for Overnite. “In addition to our own company’s expense items and accounts in detail, I study and analyze, and compare with our own, rates reported of other carriers, . . . this information being obtained through . . . reports on file in the I.C.C. and various State commissions. . . . This is the kind of thing I deal in all the time. ... I testified in various finance cases before the I.C.C. and the State Commissions. ... 60 or 70 times.”

The evidence was sufficient to support the court’s finding the wit ness was an expert in cost accounting. With respect to the weight to be given his testimony, Judge Pless instructed the jury:

“Ladies and Ge&ílemen of the jury, in holding Mr. Simmons to be an expert inffche field of cost analyses, the court does not mean by that, that you are bound by his testimony, nor should you give it any more credit than you would any other witness that appeared to be qualified, that is, it permits him to analyze and to some extent synopsize figures that would otherwise take a great deal of time. Of course, in that field, he is also permitted to express opinions that he would not be permitted to express were he not held to be an expert. However, none of these things are binding upon you, you would treat him just as you would any other witness, to determine whether or not it is acceptable to you. The objection is overruled.”

Mr. Simmons testified he kept a daily record of the costs of the strike to his company. He gave the gross revenue each year beginning in 1955 as $5,843,530.00, which had increased to $12,000,000.00 in 1959. In 1958 the profit return was 9.2 per cent. In 1959 it was 3.11 per cent. The witness did not have in court the original records. He examined the records in 33 terminals operated by Overnite during 1959. Synopsis sheets made by him or under his direction, gave composite of the original records. In summary he testified the following losses resulted from the strike: Excess labor costs, $232,837.00; guards, $16,662.00; loss and damage to freight, $51,759.00; extra telephone and communications expense, $2,116.00; operating additional tractor-trailers, $20,170.00. The witness did not make a calculation showing the loss of profits during the term of the strike. However, counsel in the argument used the percentage of the net income fall-off during the strike which showed the loss to be $59,819.00. The jury accepted the evidence, including the calculation, and fixed plaintiff’s actual damages at $363,193.00.

The one debatable item in the recovery is the loss of profits. “If a regular and established business is wrongfully interrupted, the damage thereto can be shown by proving the usual profits for a reasonable time anterior to the wrong complained of. ... in a case of this kind it is open to the plaintiff to show a loss of profit upon the issue of injury and damage to his business, if he is able to present evidence from which the jury may be able to draw a reasonably accurate conclusion, not based on conjecture or speculation, as to the extent of the injury inflicted and amount of damage caused.” Steffan v. Meiselman, 223 N.C. 154, 25 S.E. 2d 626.

On the issue of actual damages, Judge Pless charged:

“I instruct you further that such actual damages, if any, allegedly sustained by the plaintiff must b;> proven with reasonable certainty, although it is not required til* such actual damages be proven with mathematical exactness or* with absolute certainty unless the damages are such as are susceptible of definite or precise proof. However, in no event may an award of damages be based on conjecture, speculation or guess.

“In your consideration of what actual damages, if any, were sustained by the plaintiff in this case, you are not authorized to presume any such damages or base your decision thereon on guesswork or speculation, but you must look to the evidence as introduced in the trial of this case and determine whether a preponderance of the evidence shows, with reasonable certainty, that plaintiff, in fact, sustained any actual damages, and if so, you must then determine whether the evidence shows, with reasonable certainty, that any definite sum of such damages was sustained by the plaintiff.

“Recovery for the loss of future profits may be had where they are reasonably certain in character and are the proximate result of the tort. The proof must pass the realm of conjecture, speculation, or opinion not founded on facts, and must consist of actual facts from which a reasonably accurate conclusion regarding the cause and the amount of the loss can be logically and rationally drawn.”

The plaintiff’s evidence made out a case for the jury on actual damages. It was sufficient to support the amount fixed.

Under the Labor Management Relations Act of Congress, recovery is authorized “for the damages sustained and the cost of the suit.” Damages sustained are limited to actual damages suffered as a result of the wrong inflicted. United Mine Workers v. Patton, 211 Fed. 2d 742. Punitive damages are never awarded as compensation. They are awarded above and beyond actual damages,' as a punishment for the defendant’s intentional wrong. They are given to the plaintiff in a proper case, not because they are due, but because of the opportunity the case affords the court to inflict punishment for conduct intentionally wrongful.

The plaintiff has stated one cause of action and only one. It does not allege a breach of the peace. It does not allege violence. So far as the evidence discloses, the picketing and the refusal to handle exchange cargo were peaceful. The cause of action arose by reason of the defendant’s unlawful activities and demands for a contract without its prior designation as the bargaining agent for the plaintiff’s employees. In this particular field, the Federal authority is exclusive.

Admittedly, where a cause of action is asserted for a tort involving violence under State law and is coupled with a cause of action for violation of the Labor Management Relations Act, the State court may proceed to hear and determine both causes. The court may award punitive damages if authorized by State law in the case involving the State tort, but actual damages only may be awarded in the cause of action under the Labor Management Relations Act. The Federal courts recognize the right of the State court in a proper case to award punitive damages for a tort committed in violation of a right the State has recognized under its police power, although it is coupled with a separate Federal right, the jurisdiction over which is given to the State court by Congress. The joinder is permitted because the Act of Congress does not forbid it. San Diego Trade Council v. Garmon, 359 U.S. 236; United Automobile Workers v. Russell, 356 U.S. 634.

In the Garmon case the Supreme Court of the United States used this significant language: “It is true that we have allowed the States to grant compensation for the consequences as defined by the traditional law of torts, of conduct marked by violence and imminent threats to- the public order. United Automobile Workers v. Russell, 356 U.S. 634; United Construction Workers v. Laburnum Corp., 347 U.S. 656. . . . State jurisdiction has prevailed in these situations because the compelling state interest, in the scheme of our Federalism, in the maintenance of domestic peace is not overridden in the absence of clearly expressed congressional direction.” (Citing International Union v. Wisconsin Board, 336 U.S. 245.) In cases where punitive damages have been allowed, a cause of action under State law was alleged, founded on violence, threats of violence, and intimidation. United Mine Workers v. Osborne Mining Co., Inc., 279 Fed. 2d 716, Certiorari denied, 364 U.S. 881; Youngdahl v. Rainfair, Inc., 355 U.S. 131; Automobile Workers v. Wisconsin Employer Relations Board, 351 U.S. 266.

In this case the plaintiff’s complaint fails to state any separate cause of action under State law based on violence. In view of the authorities here quoted, and others of like import, we conclude the plaintiff’s pleadings and evidence are insufficient to support an issue for punitive damages. Consequently the defendant’s prayer for instructions should have been given. The exception based on its denial is sustained. The award of punitive damages is without a proper foundation and is stricken from the judgment. The record, however, does not disclose error in the award of actual damages.

As to Actual Damages — No error.

As to Punitive Damages — Reversed.