United Mine Workers v. Coronado Coal Co. - 259 U.S. 344 (1922)
U.S. Supreme Court
United Mine Workers v. Coronado Coal Co., 259 U.S. 344 (1922)
United Mine Workers of America v. Coronado Coal Company
Argued October 15, 1920
Restored to docket for reargument January 3, 1922
Reargued March 22, 23, 1922
Decided June 5, 1922
259 U.S. 344
1. In view of the Conformity Act and the law of Arkansas respecting consolidation of causes, held that the district court did not abuse its discretion in permitting several allied corporations to be joined as plaintiffs in an action prosecuted by their receiver to recover triple damages under § 7 of the Sherman Act for the destruction of their properties and business committed in an alleged conspiracy to restrain interstate commerce. P. 259 U. S. 382.
2. Unincorporated labor unions, such as the United Mine Workers of America, and its district and local branches, impleaded in this case, recognized as distinct entities by numerous acts of Congress as well as by the laws and decisions of many states, are suable as such in the federal courts upon process served on their principal officers, for the torts committed by them in strikes, and their strike funds are subject to execution. P. 259 U. S. 385.
3. Such associations are included by § 7 of the Sherman Act, permitting actions for damages resulting from conspiracies in restraint of interstate commerce to be brought against "corporations and associations existing under or authorized by the laws of either the United States" or the laws of any territory, state or foreign country. P. 259 U. S. 392.
4. Where the constitution of a general association of workmen, organized for the declared purpose of improving their wages and working conditions through strikes and other means and subdivided into district and local unions, through which its treasury was supplied, authorized the several district organizations to order local strikes within their respective districts, but upon their own responsibility and without financial support from the general body unless sanctioned by its governing board, and a local strike in which serious trespasses were committed was called by a district without such sanction, but in accordance with its own constitution, and conducted by it at its own expense, held that the general association was not responsible, upon principles of agency, even though it had power to discipline the district and take over the strike at its own expense, and that liability on its part and that of its officers could not be sustained without substantial evidence of their participation in or ratification of the torts committed. P. 259 U. S. 393.
5. The overwhelming weight of evidence in this case establishes that the defendant district union and its officers, with other individual defendants, participated in a plot unlawfully to deprive the plaintiffs of their employees by intimidation and violence, and in its execution destroyed the plaintiffs' properties. P. 259 U. S. 396.
6. Where the constitution of a district organization of several local labor unions authorizes the district officers to order a local strike, the district is responsible for injuries unlawfully inflicted in a strike so ordered, and its strike funds may be subjected to a resulting judgment. P. 259 U. S. 403.
7. The mining of coal is not interstate commerce, and a conspiracy to obstruct mining at particular mines, though it may prevent coal
from going into interstate commerce, is not a conspiracy to restrain that commerce within the Sherman Act unless an intention to restrain it be proven or unless so direct and substantial an effect upon it necessarily result from the obstruction to mining that such intention must in reason be inferred. P. 259 U. S. 410.
8. Evidence that a union of coal miners belonged to a general association which, as an incident of its object to promote wages, etc., had a general policy to unionize coal mines by strikes, etc., and thus discourage competition of open shop against union in interstate commerce, held not sufficient to prove that a conspiracy of the lesser organization and its members, accompanied by a local strike, to prevent the employment of nonunion miners and the mining of coal at particular mines, was a conspiracy to restrain interstate commerce in violation of the Sherman Act, where the strike and its lawless activities were the affair of the conspirators, explained by local motives, and the normal output of the mines was not enough to have a substantial effect on prices and competition in interstate commerce from which a motive to assist the general policy might be inferred. Pp. 259 U. S. 403, 259 U. S. 412.
258 F. 829 reversed.
This is a writ of error brought under § 241 of the Judicial Code to review a judgment of the circuit court of appeals of the Eighth Circuit. That court, on a writ of error, had affirmed the judgment of the District Court for the Western District of Arkansas in favor of the plaintiffs, with some modification, and that judgment thus affirmed is here for review.
The plaintiffs in the district court were the receivers of the Bache-Denman Coal Company, with eight other corporations, in each of which the first-named company owned a controlling amount of stock. They were closely interrelated in corporate organization and in the physical location of their coal mines. These had been operated for some years as a unit under one set of officers in the Prairie Creek valley in Sebastian County, Arkansas. In July, 1914, the District Court for the Western District of Arkansas appointed a receiver for all of the nine companies by a single decree. The receiver then appointed
was Franklin Bache, whose successors are as such defendants in error here.
The defendants in the court below were the United Mine Workers of America and its officers, District 21 of the United Mine Workers of America and its officers, 27 local unions in District No. 21 and their officers, and 65 individuals, mostly members of one union or another, but including some persons not members, all of whom were charged in the complaint with having entered into a conspiracy to restrain and monopolize interstate commerce, in violation of the first and second sections of the Anti-Trust Act, and with having, in the course of that conspiracy, and for the purpose of consummating it, destroyed the plaintiff's properties. Treble damages for this and an attorney's fee were asked under the seventh section of the act.
The original complaint was filed in September, 1914, about six weeks after the destruction of the property. It was demurred to, and the district court sustained the demurrer. This was carried to the court of appeals on error, and the ruling of the district court was reversed. Dowd v. United Mine Workers, 235 F. 1. The case then came to trial on the third amended complaint and answers of the defendants. The trial resulted in a verdict of $200,000 for the plaintiffs, which was trebled by the court, and to which was added a counsel fee of $25,000, and interest to the amount of $120,600, from July 17, 1914, the date of the destruction of the property, to November 22, 1917, the date upon which judgment was entered. The verdict did not separate the amount found between the companies. On a writ of error from the court of appeals, the case was reversed as to the interest, but in other respects the judgment was affirmed. 258 F. 829. The defendants the International Union and District No. 21 have given a supersedeas bond to meet the judgment if it is affirmed as against both or either of them.
The third amended complaint avers that, of the nine companies, of which the plaintiff was receiver and for which he was bringing his suit, five were operating companies engaged in mining coal and shipping it in interstate commerce, employing in all about 870 men, and mining an annual product when working to their capacity valued at $465,000, of which 75 percent was sold and shipped to customers outside of the state. Of the five operating companies, one was under contract to operate the properties of two of the others, and four nonoperating companies were each financially interested in one or more of the operating companies either by lease, by contract, or by the ownership of all or a majority of their stock. The defendant the United Mine Workers of America is alleged to be an unincorporated association of mine workers, governed by a constitution, with a membership exceeding 400,000, subdivided into 30 districts and numerous local unions. These subordinate districts and unions are subject to the constitution and bylaws not only of the International Union, but also to constitutions of their own.
The complaint avers that the United Mine Workers divide all coal mines into two classes, union or organized mines, operating under a contract with the union to employ only union miners, and open shop or nonunion mines, which refuse to make such a contract; that, owing to the unreasonable restrictions and regulations imposed by the union on organized mines, the cost of production of union coal is unnecessarily enhanced so as to prevent its successful competition in the markets of the country with nonunion coal; that the object of the conspiracy of the United Mine Workers and the union operators acting with them is the protection of the union-mined coal by the prevention and restraint of all interstate trade and competition in the products of nonunion mines. The complaint enumerates twenty-three states in which coal
mining is conducted, and alleges that the coal mined in each comes into competition in interstate commerce, directly or indirectly, with that mined in Illinois, Kentucky, Alabama, New Mexico, Colorado, Kansas, Oklahoma, and Arkansas, in the markets of Louisiana, Texas, Oklahoma, Nebraska, Kansas, Missouri, Iowa, and Minnesota, where, but for the defendants' unlawful interference, plaintiffs would have been engaged in trade in 1914; that the bituminous mines of the greater part of the above territory are union mines, the principal exceptions being Alabama, West Virginia, parts of Pennsylvania, and Colorado, which the defendant has thus far been unable to organize.
The complaint further avers that, early in 1914, the plaintiff companies decided that the operating companies should go on a nonunion or open shop basis. Two of them, the Prairie Creek Coal Mining Company and the Mammoth Vein Coal Company, closed down and discontinued as union mines, preparatory to reopening as open shop mines in April. They were to be operated under a new contract by the Mammoth Vein Coal Mining Company. Another of the companies, the Hartford Coal Company, which had not been in operation, planned to start as an open shop mine as soon as convenient in the summer of 1914. The fifth, the Coronado Coal Company, continued operating with the union until April 18, 1914, when its employees struck because of its unity of interest with the other mines of the plaintiffs. The plaintiffs say that, in April, 1914, the defendants and those acting in conjunction with them, in furtherance of the general conspiracy, already described, to drive nonunion coal out of interstate commerce, and thus to protect union operators from nonunion competition, drove and frightened away with plaintiffs' employees, including those directly engaged in shipping coal to other states, prevented the plaintiffs from employing other men, destroyed the structures and facilities for mining, loading, and shipping coal, and the
cars of interstate carriers waiting to be loaded, as well as those already loaded with coal in and for interstate shipment, and prevented plaintiffs from engaging in or continuing to engage in interstate commerce. The complaint alleges that the destruction to the property and business amounted to the sum of $740,000, and asks judgment for three times that amount, or $2,220,000. Certain of the funds of the United Mine Workers in Arkansas were attached. The defendants the United Mine Workers of America, District No. 21, and each local union, and each individual defendant filed a separate answer. The answers deny all the averments of the complaint. The trial began on October 24, 1917, and a verdict and judgment were entered on November 22 following. The evidence is very voluminous, covering more than 3,000 printed pages.