United Brotherhood of Carpenters & Joiners of America v. United States

330 U.S. 395, 67 S. Ct. 775, 91 L. Ed. 973, 1947 U.S. LEXIS 2951, 19 L.R.R.M. (BNA) 2406

• Court: Supreme Court of the United States
• Decided: March 10, 1947
• Docket: 6
• Status: Published

Opinions

Mr. Justice Reed

delivered the opinion of the Court.

These are criminal cases in which conviction of various defendants has been obtained in the District Court of the United States for the Northern District of California, Southern Division, and affirmed by the Circuit Court of Appeals for the Ninth Circuit, 144 F. 2d 546. They were charged with conspiracy to violate the Sherman Act, § 1.¹ The parties to the alleged conspiracy were of two groups: on the one hand, local manufacturers of and dealers in the commodities affected and their incorporated trade associations and officials thereof; and, on the other, unincorporated trade unions and their officials or business agents. The indictment charged that the defendants below unlawfully combined and conspired together, successfully, to monopolize unduly a part of interstate commerce in mill-work and patterned lumber. The purpose and effect of the conspiracy was alleged to be to restrain out-of-state manufacturers from shipping and selling these commodities within the San Francisco Bay area of California and to prevent the dealers in that area from freely handling them. It was alleged that the conspiracy also sought to raise the prices of the products affected. To achieve the purpose, a contract was entered into between the defendants for a wage scale for members of labor unions working on the articles involved, combined with a restrictive clause, “. . .. no material will be purchased from, and no work will be done on any material or article that has had any operation performed on same by Saw Mills, Mills or Cabinet Shops, or their distributors that do not conform to the rates of wage and working conditions of this Agreement,” with specified exceptions not here material. This clause, it is alleged, was enforced to the mutual advantage of the conspirators by some of the parties through conference or picketing or acquiescence in the arrangement. By means of the conspiracy, union workmen obtained better wages, the employers higher profits and manufacturers against whom the conspiracy was directed were largely prevented from sharing in the Bay Area business, all to the price disadvantage of the consumer and the unreasonable restraint of interstate commerce. The legal theory which was followed in their conviction was that conspiracies between employers and employees to restrain interstate commerce violate the Sherman Act.

Five petitions for certiorari were presented to this Court by different defendants either singly or jointly with others. It is sufficient for the purposes of this review to say that they raised the question of the application of § 1 of the Sherman Act to conspiracies between employers and employees to restrain commerce and, except the petitions in the employer group, the application of § 6 of the Norris-LaGuardia Act in a trial of such an indictment.² On account of the importance of the federal questions raised and asserted conflicts in the circuits, the writs of certiorari were granted.³

Since these cases were taken the important question of the application of the Sherman Act to a conspiracy between labor union and business groups has been decided by us. We held that such a conspiracy to restrain trade violated the Sherman Act. Allen Bradley Co. v. Local Union No. 3, 325 U. S. 797. This holding causes us to approve the ruling of the trial and appellate courts on the first question presented by the certiorari but it left unresolved the question as to the application of § 6 of the Norris-LaGuardia Act, the point to which this decision is directed.

The indictment charges a conspiracy forbidden by the Sherman Act. On that issue, the power of the trial court is limited by § 6 of the Norris-LaGuardia Act. Note 2, supra. The limitations of that section are upon all courts of the United States in all matters growing out of labor disputes, covered by the Act, which may come before them. It properly is conceded that this agreement grew out of such a labor dispute and that all parties defendant participated or were interested in that dispute. See § 13, 47 Stat. 73. Section 6 of the Norris-LaGuardia Act first appeared in a draft bill of the Senate Committee on the Judiciary as § 6 thereof. At that time its form was precisely the same as at present. The draft was drawn as a comprehensive substitute for S. 1482 of the 70th Congress, a bill providing only for a limitation on the jurisdiction of equity courts in the issuance of injunctions. In the 71st Congress, a similarly limited bill on the same subject, S. 2497, was reintroduced and a like comprehensive substitute proposed. Neither substitute was reported out of the Committee.⁴ These substitute bills are quite similar in form to the Norris-LaGuardia Act. In substance, and therefore in effectiveness, they are the same.

In the next, the 72d Congress, the bill, H. R. 5315, which was to become the Norris-LaGuardia Act, was introduced. Section 2 succinctly states the public policy that it was designed to further—a definition of and limitation upon the jurisdiction and authority of courts of the United States in labor disputes.⁵ That purpose was in accord with that behind the earlier drafts referred to above.⁶ As the new bill was practically identical with these long considered committee substitutes, the hearings on H. R. 5315 were short.⁷ But even so, the attack continued on § 6 as a restriction on the general law of agency in labor disputes.⁸ The reply of the House Committee was that it did “not affect the general law of agency” and was necessary “under the circumstances” so that “the courts should know that Congress expects them not to hold officers or associations liable for the unlawful acts of a member without clear proof of actual participation in, or authorization of, any unlawful acts by the officer or association.” ⁹ The Senate Committee was of the view that it was a “rule of evidence,” not a “new law of agency.”

“There is no provision made relieving an individual from responsibility for his acts, but provision is made that a person shall not be held responsible for an ‘unlawful act’ except upon ‘clear proof’ of participation or authorization or ratification. Thus a rule of evidence, not a rule of substantive law, is established.” ¹⁰

We need not determine whether § 6 should be called a rule of evidence or one that changes the substantive law of agency. We hold that its purpose and effect was to relieve organizations, whether of labor or capital,¹¹ and members of those organizations from liability for damages or imputation of guilt for lawless acts done in labor disputes by some individual officers or members of the organization, without clear proof that the organization or member charged with responsibility for the offense actually participated, gave prior authorization, or ratified such acts after actual knowledge of their perpetration.¹²

Thus § 6 limited responsibility for acts of a co-conspirator—a matter of moment to the advocates of the bill.¹³ Before the enactment of § 6, when a conspiracy between labor unions and their members, prohibited under the Sherman Act, was established, a widely publicized case had held both the unions and their members liable for all overt acts of their co-conspirators.¹⁴ This liability resulted whether the members or the unions approved of the acts or not or whether or not the acts were offenses under the criminal law. While of course participants in a conspiracy that is covered by § 6 are not immunized from responsibility for authorized acts in furtherance of such a conspiracy, they now are protected against liability for unauthorized illegal acts of other participants in the conspiracy.

The legislative history makes the intended meaning of the word “authorization,” we think, almost equally clear. The rule of liability for acts of an agent within the scope of his authority, based on the Danbury Hatters Case, was urged as an argument against the language of § 6.¹⁵ When the Senate Committee on the Judiciary reported the bill, it dealt with this contention.

“But the argument is made that a man is held legally responsible for the acts of his agents taken in due course of employment. This argument is evidently based upon a doctrine of the civil law of negligence. It has no application to the criminal law. If a man is held responsible for an unlawful act, his responsibility rests on the basis of actual or implied participation. He is responsible for conspiring to do an unlawful act or for setting in motion forces intended to result, or necessarily resulting, in an unlawful act.

... it is high time that, by legislative action, the courts should be required to uphold the long established law that guilt is personal and that men can only be held responsible for the unlawful acts of associates because of participation in, authorization or ratification of such acts. As a rule of evidence, clear proof should be required, so that criminal guilt and criminal responsibility should not be imputed but proven beyond reasonable doubt in order to impose liability.”¹⁶

We hold, therefore, that “authorization” as used in § 6 means something different from corporate criminal responsibility for the acts of officers and agents in the course or scope of employment.¹⁷ We are of the opinion that the requirement of “authorization” restricts the responsibility or liability in labor disputes of employer or employee associations, organizations or their members for unlawful acts of the officers or members of those associations or organizations, although such officers or members are acting within the scope of their general authority as such officers or members, to those associations, organizations or their officers or members who actually participate in the unlawful acts, except upon clear proof that the particular act charged, or acts generally of that type and quality, had been expressly authorized, or necessarily followed from a granted authority, by the association or non-participating member sought to be charged or was subsequently ratified by such association, organization or member after actual knowledge of its occurrence.

In this prosecution the United Brotherhood of Carpenters and Joiners and all the local unions who were convicted requested an instruction or instructions that embodied the above interpretation of § 6.¹⁸ A similar request was made by the individual members by requested instruction No. 58. These requested instructions were refused and instead instructions were given that stated a different concept of law as is evidenced by the excerpts in the marginal note.¹⁹

So far as the Unions, both local and national, are concerned, the necessity under our construction for an instruction based on § 6 is apparent. The United Brotherhood was not a party to any of the agreements. Local unions took a more definitive part than the United Brotherhood. In some instances the name of a local union was signed to the agreement that contained the restrictive clause. Necessarily acts performed by or for the unions were done by their individual officers, members or agents. We do not enter into an analysis of the evidence that was relied upon to show the participation of the unions in the conspiracy. The evidence in any new trial may be quite different. No matter how strong the evidence may be of an association’s or organization’s participation through its agents in the conspiracy, there must be a charge to the jury setting out correctly the limited liability under § 6 of such association or organization for acts of its agents.²⁰ For a judge may not direct a verdict of guilty no matter how conclusive the evidence.²¹ There is no way of knowing here whether the jury’s verdict was based on facts within the condemned instructions, note 19 above, or on actual authorization or ratification of such acts, note 18.²² A failure to charge correctly is not harmless, since the verdict might have resulted from the incorrect instruction. We are of the opinion, therefore, that the judge should have instructed the jury as to the limitations upon the association’s liability for the acts of its agents under § 6. The error is aggravated by the failure to give the correct charge upon request.

The suggestion is made that the alert and powerful unions and corporations gain the greatest degree of immunity under our interpretation of § 6. That is not the case. Section 6 draws no distinction as to liability for unauthorized acts between the large and the small, between national unions and local unions, between powerful unions and weak unions, between associations or organizations and their members. And we draw no such distinctions.

There is no implication in what we have said that an association or organization in circumstances covered by § 6 must give explicit authority to its officers or agents to violate in a labor controversy the Sherman Act or any other law or to give antecedent approval to any act that its officers may do. Certainly an association or organization cannot escape responsibility by standing orders disavowing authority on the part of its officers to make any agreements in violation of the Sherman Act and disclaiming union responsibility for such agreements. Facile arrangements do not create immunity from the act, whether they are made by employee or by employer groups. The conditions of liability under § 6 are the same in the case of each. The grant of authority to an officer of a union to negotiate agreements with employers regarding hours, wages, and working conditions may well be sufficient to make the union liable. An illustrative but nonrestrictive example might be where there was knowing participation by the union in the operation of the illegal agreement after its execution. And the custom or traditional practice of a particular union can also be a source of actual authorization of an officer to act for and bind the union.

Our only point is this: Congress in § 6 has specified the standards by which the liability of employee and employer groups is to be determined. No matter how clear the evidence, they are entitled to have the jury instructed in accordance with the standards which Congress has prescribed. To repeat, guilt is determined by the jury, not the court. The problem is not materially different from one where the evidence against an accused charged with a crime is well-nigh conclusive and the court fails to give the reasonable-doubt instruction. It could not be said that the failure was harmless error.²³

It is suggested that since “conscious participation” was required for conviction by the instructions given, error as to the individual defendants cannot be found under any theory of the rule of § 6. But we think that failure to instruct the jury on the imputation of guilt from the acts of others as limited in labor disputes by § 6 affects the individuals as well as the associations. The section covers organizations and their members alike. Individuals, without association authority, may be guilty of such a conspiracy as this under the Sherman Act, but under § 6 they will not be guilty merely because they are members or officers of a guilty association. Nor are individuals guilty because of acts of other individuals in which they did not participate, or which they did not authorize or ratify. Although an illegal conspiracy under the Sherman Act was proven at the trial, the individuals are entitled to have their participation weighed by a jury under an instruction explaining the circumstances under which § 6 permits acts of other individuals or of associations or of organizations in labor disputes to create personal liability. To instruct only that conscious participation of the individual is required leaves a jury free to weigh an individual’s guilt in the light of unauthorized and unratified acts of others with whom he is associated but in whose acts he has not participated. As the evidence of any individual’s activities in the alleged conspiracy is a minor part of the evidence as to the entire scheme, this delimitation of his responsibility is important.

Certiorari was granted to two employer groups, Nos. 8 and 10, each containing an incorporated trade association and its officers and members, both individual and corporate. Both groups combatted the indictment by demurrer on the ground that, as the restrictive agreement was directed at the maintenance of proper working conditions, it did not state a crime under the Sherman Act. The demurrer was overruled by the trial court. Our decision in Allen Bradley Company requires us to uphold this conclusion. Thereafter pleas of nolo contendere were entered by each defendant in the employer petitioner groups.

Each of the employer petitioners, if they had stood trial, as we have indicated hereinbefore, would have been entitled to the same instruction under § 6 as we have held the union group should have received. And though the failure so to charge was not excepted to, we would not be precluded from entertaining the objection.²⁴ The erroneous charge was on a vital phase of the case and affected the substantial rights of the defendants. We have the power to notice a “plain error” though it is not assigned or specified.²⁵ In view of their plea of nolo contendere, does justice require that these employer groups should now be given an opportunity to stand trial in the situation created by our subsequent rulings in the Allen Bradley case and in this case ? We think that it does.

This present decision furnishes a guide for the application of § 6 to liability for acts of agents in labor disputes. Ordinarily a plea of nolo contendere leaves open for review only the sufficiency of an indictment.²⁶ However, in view of the then existing uncertainty as to liability for contracts between groups of employers and groups of employees that restrained interstate commerce and the application of § 6 of the Norris-LaGuardia Act, we conclude that in this exceptional situation the employer groups, also, should have an opportunity to make defense to the indictment.²⁷

The judgments in each case are reversed and the causes remanded to the District Court.

Mr. Justice Jackson took no part in the consideration or decision of this case.

1 15 U. S. C. § 1:

“Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal: . . . Every person who shall make any contract or engage in any combination or conspiracy declared by sections 1-7 of this title to be illegal shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished by fine not exceeding $5,000, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court.”

2 47 Stat. 70, 71:

“Sec. 6. No officer or member of any association or organization, and no association or organization participating or interested in a labor dispute, shall be held responsible or liable in any court of the United States for the unlawful acts of individual officers, members, or agents, except upon clear proof of actual participation in, or actual authorization of, such acts, or of ratification of such acts after actual knowledge thereof.”

3 323 U. S. 706-7. Compare Allen Bradley Co. v. Local Union No. 3, 145 F. 2d 215, and United States v. International Fur Workers Union, 100 F. 2d 541, 547, with the opinion of the Circuit Court of Appeals in this case, 144 F. 2d 546.

These cases were argued in the Supreme Court of the United States first on March 8, 1945. On June 18, 1945, they were restored to the docket and assigned-for reargument, counsel being requested to discuss (1) the scope of § 6 of the Norris-LaGuardia Act in relation to prosecutions under the Antitrust Act; (2) the scope of § 6 in relationship to § 13 (b); (3) the scope of the words “association or organization” appearing in § 6, in that section’s relationship to § 13 (b); and (4) consideration of the Court’s oral charge and written charges requested and refused involving § 6, in the light of objections and exceptions by each and all of the defendants and the state of the evidence on that issue as to each of them. Journal, Sup. Ct., U. S., October Term 1944, pp. 284-5. The cases were reargued on April 29-30, 1946, and again restored to the docket on June 10, 1946, for a third argument.

S. Rep. No. 1060, 71st Cong., 2d Sess., p. 4.

4 In the hearings on the proposed substitute, the language now incorporated into § 6 of the Norris-LaGuardia Act was criticized as changing the rules of agency, so as to relieve organizations of responsibility for acts of their agents in labor disputes. It was defended as intended to apply the law of agency to labor unions. Hearings, Subcommittee of the Committee on the Judiciary, U. S. Senate, 70th Cong., 2d Sess., on S. 1482, Part 5, p. 759, et seq.

5 47 Stat. 70.

6 S. Rep. No. 163, 72d Cong., 1st Sess.; H. Rep. No. 669, 72d Cong., 1st Sess.; S. Rep. No. 1060, 71st Cong., 2d Sess.; Hearings, Subcommittee of the Committee on the Judiciary, U. S. Senate, 70th Cong., 1st Sess., on S. 1482; Hearing, Subcommittee of the Committee on the Judiciary, U. S. Senate, 71st Cong., 2d Sess., on S. 2497.

7 Hearing, Committee on the Judiciary, House of Representatives, 72d Cong., 1st Sess., on H. R. 5315.

8 Id., p. 16:

“But section 6 effects a revolution in the substantive law of agency. By that section no officer or member of any organization, participating in a labor dispute, and this applies equally to employers, is to be held liable in any court of the United States for the unlawful act of agents acting in such dispute, unless there be clear proof of actual participation, authorization, or ratification of the agents’ acts after actual knowledge. The general law of agency is thus repealed or restricted to a labor dispute, and it applies equally to employers and employees. It applies to men who by collusion enter into agreements which may harmfully affect the public interests, and which in some instances might be violations of the antitrust act, although they may be the result, or grow out of, or involve terms of a labor dispute.”

See also pp. 33 and 39.

⁹

H. Rep. No. 669, 72d Cong., 1st Sess., p. 9.

¹⁰

S. Rep. No. 163, 72d Cong., 1st Sess., p. 19.

11 “Section 6 of the bill relates to damages for unlawful acts arising out of labor disputes. It is provided that officers and members of any labor organization, and officers and members of any employers’ organization, shall not be held liable for damages unless it is proven that the defendant either participated in or authorized such unlawful acts, or ratified such unlawful acts after actual knowledge thereof.” S. Rep. No. 163, supra, p. 19; 75 Cong. Rec. 4507; 47 Stat. 70, 73:

“Sec. 13. . . .

"(b) A person or association shall be held to be a person participating or interested in a labor dispute if relief is sought against him or it, and if he or it is engaged in the same industry, trade, craft, or occupation in which such dispute occurs, or has a direct or indirect interest therein, or is a member, officer, or agent of any association composed in whole or in part of employers or employees engaged in such industry, trade, craft, or occupation.”

12 See the full statement in S. Rep. No. 163, supra, pp. 19-21. Nothing has been found to give definition to the word "organization” as used in the act. We see no reason to restrict its meaning to unincorporated entities. Apparently it was employed by the draftsmen to cover, generically, all organizations that take part in labor disputes. See note 11, supra. We so apply the word. The corporate form, as is true in this case, is frequently employed for trade groups.

13 The Danbury Hatters Case—Loewe v. Lawlor, 208 U. S. 274, and Lawlor v. Loewe, 235 U. S. 522—involving damages against union members for their union’s acts in an Unlawful conspiracy, was in their minds. Hearings on S. 1482, supra, p. 760, et seq. Compare the partnership in crime theory. United States v. Kissel, 218 U. S. 601, 608; United States v. Socony-Vacuum Oil Co., 310 U. S. 150, 253.

14 United States v. Railway Employees’ Dept. A. F. L., 283 F. 479, 492.

15 Hearings on S. 1482, supra, p. 760:

“When that came before the Supreme Court of the United States Justice Holmes—I do not remember the exact language, but he had in mind that it might not be necessary to show that they knew or ought to have known or that they ought to have been warranted in their belief—that under the rule of agency as prevailing in all other activities, including bankers’ associations, to which you refer, and all other associations, it is the common accepted proposition, as fundamental as any I know in Anglo-Saxon jurisprudence, that a principal may be liable for the acts of his agent, even though he never knew or heard of them and actually forbade them, provided he was acting within the general scope of his authority, in furtherance of the purpose of the association. That is the law laid down by the Supreme Court of the United States, and that is the. law that I am afraid is curtailed by this provision in this section 6.”

Excerpts from Lawlor v. Loewe, 235 U. S. at 534-35, will explain the reference: “We agree with the Circuit Court of Appeals that a combination and conspiracy forbidden by the statute were proved, and that the question is narrowed to the responsibility of the defendants for what was done by the sanction and procurement of the societies above named.

“The court in substance instructed the jury that if these members paid their dues and continued to delegate authority to their officers unlawfully to interfere with the plaintiffs’ interstate commerce in such circumstances that they knew or ought to have known, and such officers were warranted in the belief that they were acting in the matters within their delegated authority, then such members were jointly liable, and no others. It seems to us that this instruction sufficiently guarded the defendants’ rights; and that the defendants got all that they were entitled to ask in not being held chargeable with knowledge as matter of law. ... If the words of the documents on their face and without explanation did not authorize what was done, the evidence of what was done publicly and habitually showed their meaning and how they were interpreted. The jury could not but find that by the usage of the unions the acts complained of were authorized, and authorized without regard to their interference with commerce among the States.”

¹⁶

S. Rep. No. 163, supra, p. 20.

17 See New York Central R. Co. v. United States, 212 U. S. 481, 494.

These cases now being passed upon have not involved the liability of an employer, whether a member or not of an association or organization of employers, for the acts, in a labor dispute, of his or its own officers. We express no opinion upon that.

18 A fair example, requested instruction No. 56, is as follows:

“You are instructed that no labor union or organization can be found guilty in this case for an unlawful act or acts, if any, of individual officers, members or agents, unless you find upon clear proof from the evidence that such labor organization actually participated in, or actually authorized such unlawful act, if any, or ratified such an act, if any, after actual knowledge thereof.”

19 “The act of an agent done for or on behalf of a corporation and within the scope of his authority, or an act which an agent has assumed to do for a corporation while performing duties actually delegated to him, is deemed to be the act of the corporation.

“If you find that there did exist a combination and conspiracy such as is charged in the indictment, and that any defendant corporation participated therein, then I instruct you that such act of participation is deemed to be also the act of the individual director, officer or agent of such defendant corporation who authorized, ordered or did such act in whole or in part.

“Likewise, the list of defendants includes a number of labor union organizations and several members thereof. It has been stipulated in this case that these labor unions are associations. Like corporations, associations are separate entities within the meaning of the Sherman Act, and may be found guilty of violations of that act, separately and apart from the guilt or innocence of their members.

“You are to determine the guilt or innocence of the labor unions which are defendants in this case in the same manner as you determine that of the corporations, that is, by an examination of the acts of their agents.

“In this case, several individuals are named as defendants, together with a number of corporations. While these defendants have been jointly indicted and charged with the offenses contained in the indictment, each defendant is entitled to an independent consideration by you of the evidence as it relates to his conscious participation in the alleged unlawful acts, and it is your duty to determine the guilt or innocence of each individual separately.”

20 See Battle v. United States, 209 U. S. 36, 38.

21 Sparf and Hansen v. United States, 156 U. S. 51, 105, dissent 173. Compare Capital Traction Company v. Hof, 174 U. S. 1, 13.

22 Bird v. United States, 180 U. S. 356, 361: “The chief object contemplated in the charge of the judge is to explain the law of the case, to point out the essentials to be proved on the one side and the other, and to brihg into view the relations of the particular evidence adduced to the particular issues involved.” See Pierce v. United States, 314 U. S. 306.

23 Weiler v. United States, 323 U. S. 606; Bruno v. United States, 308 U. S. 287.

24 Wiborg v. United States, 163 U. S. 632, 658; Brasfield v. United States, 272 U. S. 448, 450; see also United States v. Atkinson, 297 U. S. 157, 160. And see Rules of the Supreme Court, Rule 27.

25 Weems v. United States, 217 U. S. 349, 362; Mahler v. Eby, 264 U. S. 32, 45; Sibbach v. Wilson & Co., 312 U. S. 1, 16; see also Kessler v. Strecker, 307 U. S. 22, 34. And see Rules of Criminal Procedure, Rule 52 (b).

26 Nolo contendere “is an admission of guilt for the purposes of the case.” Hudson v. United States, 272 U. S. 451, 455; United States v. Norris, 281 U. S. 619, 622. And like pleas of guilty may be reviewed to determine whether a crime is stated by the indictment. Hocking Valley R. Co. v. United States, 210 F. 735, 738; Tucker v. United States, 196 F. 260, 262.

27 See Husty v. United States, 282 U. S. 694, 703; Ashcraft v. Tennessee, 322 U. S. 143, 155-56; R. F. C. v. Prudence Group, 311 U. S. 579, 582; Watts, Watts & Co. v. Unione Austriaca, 248 U. S. 9, 21; Montgomery Ward & Co. v. Duncan, 311 U. S. 243, 254.