Bill Johnson’s Restaurants, Inc. v. NLRB

PETITIONER:Bill Johnson’s Restaurants, Inc.
RESPONDENT:National Labor Relations Board
LOCATION:New Orleans District Attorney’s Office

DOCKET NO.: 81-2257
DECIDED BY: Burger Court (1981-1986)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 461 US 731 (1983)
ARGUED: Mar 29, 1983
DECIDED: May 31, 1983

ADVOCATES:
Carolyn F. Corwin – on behalf of the Respondents
Lawrence Allen Katz – on behalf of the Petitioner

Facts of the case

Question

Audio Transcription for Oral Argument – March 29, 1983 in Bill Johnson’s Restaurants, Inc. v. NLRB

Warren E. Burger:

We will hear arguments next in Bill Johnson’s Restaurants against National Labor Relations Board.

Mr. Katz, you may proceed whenever you are ready.

Lawrence Allen Katz:

Mr. Chief Justice, and may it please the Court, the issue before the Court in this case is the extent to which restraints should be placed upon the power of the National Labor Relations Board to interfere with civil proceedings instituted in state court and growing out of a labor dispute.

The civil litigation in this case was a suit filed in the Arizona Superior Court by petitioner, Bill Johnson’s Restaurants, against several persons who were demonstrating in front of the restaurant in September, 1978.

The suit alleged that the protesters had defamed the restaurant by publishing leaflets which accused the restaurant in engaging in a refusal to pay lawful overtime, in sexually harassing waitresses, in discharging a waitress for union activity, and maintaining filthy restrooms.

The suit also asked for injunctive relief and for damages for misconduct occurring during the demonstrations.

This Court has held in the past that some controversies arising out of labor disputes are so deeply rooted in matters of local concern and responsibility that the state courts have primary jurisdiction to hear and determine these controversies even though they may touch on matters of federal concern as well, and I refer here to suits growing out of labor controversies involving defamation, involving violence, involving trespass and other torts out of such labor disputes where the public peace and order are threatened.

In these cases, the state has been held to have an overriding interest in the resolution of the controversy.

Despite this history, the National Labor Relations Board has in the present case ordered the restaurant to withdraw its civil suit and to compensate the defendants for all expenses incurred by them in the defense of the suit, including expenses incurred by them in the prosecution of their counterclaims.

The Board does not justify its order in this case by any finding that the complaint filed by the restaurant on its face asked for relief barred by the National Labor Relations Act.

The Board does not justify its order in this case by any finding that the complaint filed by the restaurant was pre-empted by the National Labor Relations Act, or that it raised issues that were already pending before the Board.

Instead, the Board attempts to justify its intrusion into the parties’ civil litigation by a finding that the restaurant’s suit constituted an effort to retaliate against those demonstrators who were outside its premises.

To reach that result, the Board performed adjudicatory responsibilities that should have been performed by the state court.

After the restaurant filed its suit, the Board compelled the restaurant to demonstrate that the suit had some reasonable factual basis, that it had merit.

Considerable evidence was presented before the Board’s Administrative Law Judge on the same questions that were then pending in front of the state trial court.

For example, were the offensive statements of the demonstrators true or false?

Did the demonstrators publish those statements knowing them to be true or false?

Did the demonstrators improperly obstruct or interfere with the restaurant’s operations?

William H. Rehnquist:

Mr. Katz, were these–

Lawrence Allen Katz:

Yes, Your Honor.

William H. Rehnquist:

–questions of federal law, state law, or some of both?

Lawrence Allen Katz:

Questions of defamation arising out of a labor dispute are questions of state law.

The questions should have been heard and determined by the state court.

William H. Rehnquist:

Are you saying that the Administrative Law Judge examined issues that were concededly of state law, such as whether there was a publication under the Arizona law of libel?

Lawrence Allen Katz:

The question of whether there was a publication was not at issue, but other questions decided by the Administrative Law Judge, Justice Rehnquist, were in fact then pending before the state court.

For example, were the–

William H. Rehnquist:

A federal question could be pending before the state court.

I was more interested in whether the Administrative Law Judge also examined question that were concededly only of state law.

Did the Administrative Law Judge say there wasn’t anything to the suit under state law?

Lawrence Allen Katz:

–Yes, he did.

Lawrence Allen Katz:

Your Honor, the–

Byron R. White:

That is clearly a state law question.

Lawrence Allen Katz:

–It is purely a state law question.

The Administrative Law Judge determined… The Administrative Law Judge determined that in fact the statements on the relief work were truthful, and in fact the demonstrators had not engaged in obstructions or interference with restaurant property, and that in fact the restaurant’s lawsuit lacked a reasonable basis, and his interpretation had to be one of state law, because the issue was one of state law.

The Board–

Sandra Day O’Connor:

Mr. Katz, would you concede that perhaps the National Labor Relations Board, through its Administrative Law Judge, could still consider issues relating to whether it’s an unfair labor practice here to have filed the state suit at least for purposes of giving other remedial relief other than the cease and desist order, for example, requiring payment of costs of suit?

Lawrence Allen Katz:

–Justice O’Connor, I would say that the responsibility of the National Labor Relations Board in that circumstance would be to wait until the state court had issued its determination on the merits of the lawsuit.

At that point, if the state court had failed to issue sufficient relief to protect the federal rights that were then at issue, or to protect the rights of employees under the National Labor Relations Act, the Board certainly had the opportunity to take another look at the unfair labor practice charge that was in front of it and to determine whether the interests of the National Labor Relations Act required supplemental relief to be ordered.

Sandra Day O’Connor:

What do you see in the Act that would affect the timing of the Board’s jurisdiction in that regard?

Lawrence Allen Katz:

If I understand your question, Justice O’Connor, Section 10(j) of the Act would allow the National Labor Relations Board to file a petition with the United States District Court in order to protect the interests of the Act and the interests of employees against any direct infringement that might occur during the prosecution of that suit.

For example, if the plaintiff in such a state suit engaged in discovery which the Board determined might have an adverse impact on a proceeding then pending before the Board, it is arguable that the Board could apply under Section 10(j) to the United States District Court and obtain an appropriately limited injunction.

In this case, the Board might well have been able to do that, but instead–

William H. Rehnquist:

That’s an exception to the Anti-Injunction Act–

Lawrence Allen Katz:

–Yes, Your Honor.

That would be an exception to the Anti-Injunction Act, and this Court has recognized two or three exceptions to the Anti-Injunction Act in the past, and I think one of them would be applicable in this case, and that is, when the Board has to act in aid of its own jurisdiction.

If there is an issue pending before the Board which has also been raised before the state court, or if the proceedings in the state court threaten to impact directly on the proceedings before the National Labor Relations Board, that, I believe, is what Congress intended Section 10(j) of the National Labor Relations Act to be used for, and the Board could go into the District Court and petition for appropriate limited injunctive relief.

In this case, the Board did not seek an appropriate limited injunction from the District Court.

The Board petitioned the District Court under Section 10(j) for an injunction restraining the entire lawsuit that had been filed in the state court.

Sandra Day O’Connor:

–What if the Board had limited its relief to an order that court costs or legal fees be paid?

Lawrence Allen Katz:

While the state court suit was still pending?

Right.

Lawrence Allen Katz:

I think that would be an unwarranted infringement on the state suit.

I think any remedy that would come out of the state proceeding was within the original primary jurisdiction of the state court, and the Board could only interfere with that proceeding to the extent that there was a direct impact on a matter pending then before the Board.

In this case, there was no such finding.

Warren E. Burger:

You are saying, I take it, that the statute, the federal statute, 2283, I think, has not expressly authorized this kind of restraint to be put on the Board.

Lawrence Allen Katz:

It has not.

Warren E. Burger:

What is the scope of the Administrative Law Judge’s inquiry to determine whether there is harassment that would interfere with the Board’s jurisdiction?

Lawrence Allen Katz:

I think that if the civil suit on its face were to allege a cause of action barred by the National Labor Relations Act, then the Administrative Law Judge arguably would have authority to take action and perhaps that might include even the restraint of that suit.

I think, for example, of the 1970 Machinists case and the 1972 Textile Workers case, in which unions had allegedly violated the Act by seeking to impose fines on employees who had engaged in conduct that was against the union constitution, but the conduct had been engaged in after the employees had resigned from the union.

Such a complaint may well state a cause of action barred by the National Labor Relations Act, and in those cases the Board held an unfair labor practice had occurred, and the Board enjoined the state court action to enforce the fines.

Lawrence Allen Katz:

That, of course, is not our case, because the state court complaint filed in this case did not allege a cause of action barred by the National Labor Relations Act or pre-empted by the National Labor Relations Act.

Lewis F. Powell, Jr.:

Counsel, I think you mentioned that the regional director filed a petition with the Federal District Court seeking to enjoin the entire state action.

Lawrence Allen Katz:

Yes, Justice Powell.

Lewis F. Powell, Jr.:

I don’t think you have stated the result of that.

Lawrence Allen Katz:

The result of it was that the Federal District Court refused to issue the order requested by the Board.

Lewis F. Powell, Jr.:

Did the District Court file an opinion?

Is it in the record?

Lawrence Allen Katz:

Excuse me, Your Honor?

Lewis F. Powell, Jr.:

Did the District Court file an opinion?

Lawrence Allen Katz:

Yes, included in our opening brief as Appendix C are the findings of fact and conclusions of law of the District Court.

I might point out, if Your Honor will refer to Exhibit B attached to our brief, which is a selection from the transcript of proceedings before the District Court, District Judge Crane did suggest to the Board that he would be willing to consider an order enjoining the respondent from interfering with proceedings before the Board, but the Board did not pick up on that suggestion, and did not ask for any more limited injunction.

Instead, it asked only for the complete restraining order against the–

Byron R. White:

So what was the result, as Justice Powell asked?

Lawrence Allen Katz:

–The District Court’s order was entered.

An appeal was filed but was–

Byron R. White:

Well, did he file an opinion?

Lawrence Allen Katz:

–He did file findings of fact and conclusions–

Byron R. White:

So what was his reason for denying the injunction?

Lawrence Allen Katz:

–He found that there was no evidence produced by the Board to indicate that the state court suit lacked a reasonable basis.

He found no basis for determining that in fact an unfair labor practice had occurred in the filing of the state suit.

Byron R. White:

Was any appeal taken from that?

Lawrence Allen Katz:

There was an appeal initially taken.

That is not part of the record before the Court.

It was later withdrawn.

Byron R. White:

Could I ask you, how do you read the National Labor Relations Board views in this case?

In order to make out the unfair labor practice which they found, according to them, is it necessary to prove not only an anti-union bias or a harassment, but also that the action have no basis?

Lawrence Allen Katz:

It is difficult to read the National Labor Relations Board, because–

Byron R. White:

I know what the Administrative Law Judge said, but I don’t read the Board as relying on that other factor at all, just a finding that the suit was motivated by an anti-union bias or by retaliation.

Lawrence Allen Katz:

–I read the Board’s papers filed in this Court as taking the position that if the suit is motivated by the desire to retaliate, it is an unfair labor practice.

Byron R. White:

That is the end of it.

Lawrence Allen Katz:

Yes, sir.

Byron R. White:

Whether the suit has any foundation or not.

Lawrence Allen Katz:

Well, although the Board is willing to look at the merits of the state court suit in order to determine whether it has a foundation in fact–

Byron R. White:

Well, I know, but even… assume that it does have a foundation in fact.

The Board would still find an unfair labor practice.

Lawrence Allen Katz:

–I think that’s a fair conclusion from the position the Board has taken.

Byron R. White:

I don’t think that’s true of what the Court of Appeals said in reviewing the Board though.

Lawrence Allen Katz:

The Court of Appeals indicated that even in the absence of an unlawful motivation, a suit which had a coercive impact on employees might well be a violation of Section 81.

Byron R. White:

I know, but they would require that the suit have no basis.

Lawrence Allen Katz:

That’s not… well, yes, I think I’d have to concede that.

The Court of Appeals would require the suit have no basis.

It is not clear the Board would do that.

The Ninth Circuit held that the restaurants also had a lawful objective on its face, and then the Ninth Circuit went on to say that the proper test of the legitimacy of a state cause of action is whether the plaintiff has evidence to support his allegations.

Now, we agree with that holding, but we disagree with the Ninth Circuit as to the appropriate forum in which such evidence should be tested.

Simply put, our position is that the NLRB is not entitled to adjudicate or to restrain a pending state court lawsuit which has a lawful objective on its face and its properly subject to state court jurisdiction.

I pointed out a moment ago that there might be some situations in which the state court suit asks for relief barred by the National Labor Relations Act.

In such a case, the Board might arguably have the right to restraint that suit, but in so considering, the Board might take into account the motive for filing the suit.

For example, there have been a number of suits where employers have sought injunctions against activity that was clearly protected, such as picketing.

In such cases, it has been the Board’s habit to evaluate the motive for such suit, and if the Board determines that the motive is one of good faith, the Board has typically not restrained the state court suit.

Sandra Day O’Connor:

Well, Mr. Katz, in this instance, unless I am mistaken, your client was found by the Board to have committed an unfair labor practice by prosecuting the suit.

Lawrence Allen Katz:

Yes, Your Honor.

Sandra Day O’Connor:

And you are not challenging that?

That is not an issue you raised in your cert petition?

Lawrence Allen Katz:

Well, we are certainly challenging that an unfair labor practice has occurred in the filing of the suit, and more importantly, we are challenging the process by which the Board reached its conclusion that an unfair labor practice had existed.

The Board–

Sandra Day O’Connor:

But that issue really wasn’t raised in your petition, was it?

Lawrence Allen Katz:

–The only issue that I think you may be referring to that is missing from the petition is a challenge to the specific findings that the leaflet was truthful and did not constitute defamation.

We did not challenge the–

Sandra Day O’Connor:

I read your petition as challenging the power of the Board to order you to cease and desist from the state court action.

Lawrence Allen Katz:

–And the ability of the Board to find that a suit filed in state court which has a lawful purpose on its face and is subject to state court jurisdiction is an unfair labor practice.

Lawrence Allen Katz:

The Board now asserts the right, and it is a very broad right, to conduct a threshold scrutiny of litigation involving labor disputes in order to determine whether the plaintiff’s motivation is to use an apparently lawful suit in order to retaliate against the defendant for conduct protected by the National Labor Relations Act.

We believe the Board has no such power.

When a civil suit has a lawful objective on its face, and is subject to state court jurisdiction, the state court interest is superior.

We recognize that there is a balancing of interests, when we are involved with a labor dispute, when there are some federal rights at issue, and when there are some state rights to be protected, but when the suit has a lawful objective, it is properly subject to state court jurisdiction, that balancing test requires that the state court interest be superior, and that the state court bears responsibility for trial on the merits and for all appropriate relief.

Concern that the litigation may be motivated by improper considerations should not allow the Board to subject the plaintiff in the suit to an administrative trial of the civil complaint in order to assess his motive by evaluating the factual and the legal support for his civil claims.

If the Board does intend to determine that the weakness in a plaintiff’s suit justifies an inference that the suit was brought for retaliatory purposes and is therefore an unfair labor practice, then the Board must await the decision of the state court, and to the extent that the state court fails to provide sufficient relief to accommodate the interests of the National Labor Relations Act, the Board still has the ability to step in and to award the proper relief.

Byron R. White:

Why must the Board hold its hand?

Why must the Board hold his hand?

Why shouldn’t the… if the state court can go forward, why, well and good.

But that is all you want, isn’t it?

Lawrence Allen Katz:

We want the state court to be able to go forward–

Byron R. White:

Yes.

Lawrence Allen Katz:

–but without interference from the Board.

Byron R. White:

Well, I know, but what… how is it interfering with your suit?

Lawrence Allen Katz:

Well, in the Linn case, and in the Farmers case–

Byron R. White:

How is it interfering with your case?

Lawrence Allen Katz:

–Well, for one thing, if the employer has to go forward and demonstrate the merit of his suit to an Administrative Law Judge and to the Board, he is doing so under the possible threat that his suit is orderly drawn.

That is certainly an interference with the suit.

He must do so without pretrial confrontation of witnesses.

He must do so without discovery.

He must do so without a civil judge, and without a civil jury.

And if he fails carrying that burden to prove his case in front of the Administrative Law Judge, then me might be ordered to have his suit withdrawn and to pay the other side’s expenses.

Byron R. White:

Don’t you think usually you could get to trial in a libel case in a state court before the Board would ever reach an unfair labor practice complaint?

Lawrence Allen Katz:

I would not presume that that would happen in all cases, but–

Byron R. White:

Well, but a lot of them, it would, wouldn’t it?

Lawrence Allen Katz:

–Well, it might, but–

Byron R. White:

And what if you won in the state court?

Lawrence Allen Katz:

–I am not sure that a victory in the state court would be meaningful to the National Labor Relations Board.

In this case, Your Honor, the National Labor Relations Board–

Byron R. White:

Well, it may not.

Byron R. White:

You may be guilty of an unfair labor practice, but you would nevertheless have damages in the state court.

Lawrence Allen Katz:

–Well, I don’t know that the Board would not try and interfere in some way with those damages.

For example, the Board might rule that the employer has no right to collect those damages.

We don’t know, because this is a new area for the Board.

The Board has not in the past extended itself this way.

Byron R. White:

Well, do you know of any cases where we have said that not only may the state court go forward, but that the Board must defer to the state proceedings?

Lawrence Allen Katz:

Your Honor, I construe Linn and Farmers to require that.

In the Linn case, this Court said–

Byron R. White:

Well, there was no issue… I don’t remember we ruled that made any such ruling as that–

Lawrence Allen Katz:

–No, no such–

Byron R. White:

–that the Board couldn’t go forward with its unfair labor practice.

Lawrence Allen Katz:

–No such ruling was necessary in the Linn case, but I think it’s a necessary corollary in the Linn case.

I would submit that this Court could not have intended to allow state courts to have pre-emptive jurisdiction to–

Byron R. White:

Pre-emptive?

We didn’t say it was pre-emptive.

You just said they weren’t pre-empted.

Lawrence Allen Katz:

–All right.

Let me correct that.

Pre-emptive is not a good word to use.

I don’t believe this Court would have allowed the state courts to have primary jurisdiction.

Byron R. White:

We didn’t even say they had primary jurisdiction.

We just said they had jurisdiction to go forward.

Lawrence Allen Katz:

Well, all right.

I stand corrected.

Let me say–

Byron R. White:

Well, didn’t we?

Lawrence Allen Katz:

–Excuse me?

Byron R. White:

I think that’s all we said.

We just said they were not pre-empted from going forward.

Lawrence Allen Katz:

If the state court under Linn is not pre-empted from going forward–

Byron R. White:

As a matter of fact, we said the interests of the two proceedings were different.

Lawrence Allen Katz:

–Yes, but it… I don’t think it would be consistent with Linn for the National Labor Relations Board to have the right to make a preliminary disposition of the merits of the state court suit in order to decide if the state court can go forward, and that’s what the Board is asking here.

The Board is saying, even if the state court has jurisdiction under Linn–

Byron R. White:

Well, I agree.

That is a different question.

But it doesn’t follow from that… if you win on that issue, it doesn’t necessarily follow that the Board can’t go forward.

Lawrence Allen Katz:

–Well, I think–

Byron R. White:

All you would say is, the Board shouldn’t interfere with the state suit.

Lawrence Allen Katz:

–I think that the Board cannot interfere with a pending state suit.

I think the Board cannot go forward because there are procedures that the employer will be required to go through in the Board that will adversely impact on his ability to go forward in the state case.

William H. Rehnquist:

Mr. Katz, what do you mean by the Board going forward?

Do you mean going forward with any of the possible proceedings against the employer, or do you mean just going forward in making a determination as to the merits of the employer’s state court suit?

Lawrence Allen Katz:

I mean the latter.

If the employer were alleged to have committed a series of unfair labor practices, one of which was the filing of a civil suit which is alleged to be retaliatory, I would certainly concede that the Board can go forward to adjudicate the other unfair labor practices, and perhaps to look at the entire pattern and say, this employer is engaged in a course of conduct which constitutes an unfair labor practice and must be stopped, but even in such circumstances, the Board could not restrain the pending state court suit.

Once the state court suit had run its course, and informed by the decision and the findings in the state court, the Board might then decide to supplement the relief it had provided by a further order enjoining the commencement perhaps of subsequent state court proceedings which might be a part of that same pattern and practice of coercive conduct.

Sandra Day O’Connor:

What if the action of the Board was initiated before the state court suit, on allegations of unfair labor practice, and then it develops that the suit is filed and they expand the case?

You say they have to stop?

Lawrence Allen Katz:

No, Your Honor.

The Board’s authority to find an unfair labor practice based on a threat to file a lawsuit is not challenged here, nor is the Board’s authority to enjoin an employer’s intention to commence something if there is sufficient substantial evidence to indicate that the employee is going to engage in some conduct, including perhaps a suit which would be a violation of the National Labor Relations Act, but of course that is not this case.

Our case is one in which a state court–

Sandra Day O’Connor:

Your position would be that if what had happened here was that Bill Johnson’s had threatened a lawsuit, that the National Labor Relations Board could go ahead and process a complaint.

Lawrence Allen Katz:

–That is correct, Justice O’Connor.

Sandra Day O’Connor:

But if the suit is filed by Bill Johnson’s, then it must stop what it is doing.

Lawrence Allen Katz:

That is not only my contention, Justice O’Connor.

It is what the Board has held for many, many years.

One year before our civil suit was filed, the Board decided the case of Essie Nichols Marcey, in 1977, cited in our papers.

In that case, the employer had threatened to file a lawsuit and the employer had filed a lawsuit.

The Board found the threat to file the lawsuit to be an unfair labor practice.

The Board found that the filing of the lawsuit itself was not an unfair labor practice.

We agree with that decision.

William H. Rehnquist:

Mr. Katz, do you know what the first case decided by the Board was in which the conducting of a state lawsuit was found to be an unfair labor practice?

Lawrence Allen Katz:

The first case that comes to mind, Your Honor, is the 1960 case, I believe it is, of Clyde Taylor, although I remember the Clyde Taylor overruled a case called W.T. Carter, which may have been on the same issue.

The W.T. Carter case and the Clyde Taylor case are, of course, opposites.

In Clyde Taylor there was a finding that the employer had as part of a bad faith effort to stop a union campaign filed a civil suit.

Nevertheless, the Board in that 1960 case, adopting the dissent in W.T. Carter, decided many years before, held that even… without specifically saying so, the Court held that even the bad faith motive which it had found would not deprive the employer of the right to file a civil action in court, because the right of an individual to go to court, to seek judicial protection of his claims, was too important to be declared an unfair labor practice.

What the Board has done in the 23 years since Clyde Taylor is really reverse itself almost completely.

We–

Warren E. Burger:

If I understand… let me see if I understand your argument.

First your argument is that Congress has not expressly or otherwise authorized any interference by the Federal Courts with the state court proceedings, that’s number one.

Number two, and they have not shown that it was necessary to protect the jurisdiction of the Labor Board, which is the second leg of the statute.

Is that your position?

Lawrence Allen Katz:

Let me correct, Mr. Chief Justice, if i may, Congress has provided some circumstances, by statute, in which the board may seek to protect federal interests even when there is a pending state court proceeding.

Warren E. Burger:

That’s the second statement that I just postulated to you.

If it interferes with the jurisdiction and functioning of the Labor Board, then they can enjoin the state action.

Lawrence Allen Katz:

No, I would not say that.

Warren E. Burger:

What is it that the statute says?

I’m just relying on the statute, which I would assume for your case you ought to be relying on.

Lawrence Allen Katz:

I don’t read the statute, Your Honor, as saying the Board has the right to enjoin a state court proceeding.

Warren E. Burger:

If it interferes with the Labor Board’s–

Lawrence Allen Katz:

–I’m sorry.

I misunderstand.

If the state court proceeding directly interferes–

Warren E. Burger:

–Yes.

Lawrence Allen Katz:

–with the National Labor Relations Board in the performance of its functions, yes.

Then it does have the right to enjoin that proceeding.

Warren E. Burger:

And you say it does not interfere with it here, and on the other leg of the statute, it is not an interference which has been expressly authorized by Congress.

The statute is expressly authorized by an Act of Congress.

This is not such a suit, you say, this interference.

This federal injunction has never been expressly authorized by Congress.

Lawrence Allen Katz:

Not where the Board has to try and adjudicate the state court action in order to determine what the underlying motive is for the proceeding.

Lawrence Allen Katz:

There is no allegation in this case that the state court action on its face interferes with the National Labor Relations Act or interferes with the National Labor Relations Board.

We recognize that the Board has some expertise in evaluating an employer’s motivation for suit, and some interest in the prevention of retaliatory suits, but we submit that an employer’s request for judicial relief stands on a different footing from any other kind of conduct that might be coercive or directly interfering with employee rights.

Thurgood Marshall:

You don’t consider a civil suit for damages coercive?

Lawrence Allen Katz:

I think all suits are coercive, Your Honor.

Thurgood Marshall:

I thought so.

Lawrence Allen Katz:

And I think plaintiffs in all civil suits, especially in suits arising out of labor disputes, are likely to bear some ill will toward the defendants.

Warren E. Burger:

But in this setting it must be coercive in a specific way under the federal statute, that is, coercive in the way that it interferes with the exercise of the union’s guaranteed rights.

Lawrence Allen Katz:

In order for the suit to be coercive in such a manner that the National Labor Relations Board can intervene, the suit has to ask for relief which is a violation of the National Labor Relations Act, or the suit has to include some procedure, for example, a specific abuse of process which interferes with the conduct of the National Labor Relations Board or with the National Labor Relations Act.

Your Honor, I think I would like to reserve a minute or two for rebuttal.

Warren E. Burger:

Ms. Corwin.

Byron R. White:

Ms. Corwin, I am sure you will make it clear as to what the Board’s position is as to whether or not as a matter of labor law, national labor law, the Board must find not only that the suit is retaliatory or harassing or in bad faith, but also that the state suit has no basis in fact in order to make out the unfair labor practice.

Carolyn F. Corwin:

Mr. Chief Justice, and may it please the Court, Justice White, the response to that is that the issue before the Board in an unfair labor practice proceeding is whether there has been a violation of the National Labor Relations Act, whether there has, for example, been a coercive interference with protection of rights, employee rights under Section 7.

Byron R. White:

Yes.

Carolyn F. Corwin:

The issue that the Board considers in a situation like this one, in which the allegation is that the bringing, the filing and prosecution of the civil suit itself is coercive conduct, and is thus an unfair labor practice, is essentially the motivation of the employer–

Byron R. White:

Right.

Carolyn F. Corwin:

–to the… there are a number of different sorts of evidence that can be used.

Byron R. White:

So that if he wouldn’t have… so that if he has the unlawful motivation, that’s… the unfair labor practice is complete at that point.

Carolyn F. Corwin:

The unlawful motivation is the central focus of the inquiry.

The Board has recognized that the filing of a civil suit for the purpose of retaliation has an inherently coercive effect, and to that extent effect is part of the calculus, but the Board’s essential inquiry in a charge like this is, what is the employer’s motivation.

Byron R. White:

Right, and if they find that his motivation is anti-union or whatever it takes to make an unfair labor practice, it could be that the unfair labor practice would be found even if, even if on any objective basis the lawsuit had… wasn’t frivolous, or that it had a foundation in fact.

Carolyn F. Corwin:

Well, I think that the Board frequently considers many different sorts of evidence.

Byron R. White:

I know, and I would suppose it would consider whether or not the suit had a foundation in fact, but even if they found that it had a foundation in fact, it could be an unfair labor practice.

That’s the way I read your brief.

Carolyn F. Corwin:

I think that is conceivable, but I think the Board looks at many different sorts of evidence, including whether the suit has a reasonable basis in fact.

William H. Rehnquist:

I know that.

I agree.

What if the Administrative Law Judge made the finding of fact that the employer bore extreme animus and anti-union sentiment against the employees in filing this suit, and made a second finding of fact that the suit was not pre-empted under any federal doctrine, was well grounded in state law, and would in all probability succeed, and that goes to the Board?

Would they say that is an unfair labor practice?

Carolyn F. Corwin:

Well, I have to say that I don’t think there has been a case like that before the Board.

It is certainly not this case, in which there were a lot of different kinds–

Byron R. White:

Well, under your brief, the answer would be yes, it would be an unfair labor practice.

Carolyn F. Corwin:

–I… my answer to that is that a case like that has not arisen.

I think it is an open question before the Board.

Warren E. Burger:

Maybe this is it.

0 [Generallaughter.]

Maybe this is the case.

Carolyn F. Corwin:

Well, I think in this case you have many different sorts of evidence that the Board found.

You have the statements of the employer’s supervisors to get even with the employees.

Byron R. White:

Well, let’s concede all the anti-union animus there is, but what if there’s… what if this case is well grounded in fact?

Carolyn F. Corwin:

I–

Warren E. Burger:

And state law.

Carolyn F. Corwin:

–I am simply reluctant to commit the Board at this point to that sort of hypothetical.

It seems to me that–

Byron R. White:

I thought you had in your brief already.

Carolyn F. Corwin:

–It seems to me that what the Board does in this area is an accommodation.

The Clyde Taylor rule, which is still in full effect, requires the Board… the Board has made the judgment that it must accommodate the interest to litigate with the concern for rights under the Act, and I think that the Board may never be faced with the hypothetical you suggest.

It may just not be very likely.

It is not clear that the general counsel would ever bring such a complaint before the Board.

I am simply–

Byron R. White:

Well, it brought a complaint… he pursued a complaint when the District judge, the United States District judge had said that the state court suit was not frivolous, and it had a basis in fact.

Carolyn F. Corwin:

–I think the District–

Byron R. White:

And the general counsel decided not to pursue that in the court system, but to take it to the Board, and he did.

Carolyn F. Corwin:

–Yes.

That’s correct, and that is the normal procedure of an unfair labor practice proceeding.

In this case, I think there was an initial effort to get temporary relief, and–

Byron R. White:

Well, it failed.

And it failed.

Carolyn F. Corwin:

–That’s correct.

The District judge was–

Byron R. White:

And it found it right on the point of whether there was a decent basis for the suit.

Carolyn F. Corwin:

–I think that was not the only point in the District Judge’s mind.

I think the transcript to which Mr. Katz referred–

Byron R. White:

Well, that was one of them.

Carolyn F. Corwin:

–Well, I think the transcript reflects that the District judge was quite reluctant to step in at that point.

The District judge had before it the affidavits, but did not have the four days of administrative hearings that the Administrative Law Judge of the Board had, and was quite reluctant to step in and order the suit to be stopped.

William H. Rehnquist:

Ms. Corwin, how many Administrative Law Judges are there for the National Labor Relations Board, just an order of magnitude?

Carolyn F. Corwin:

I’m sorry, I don’t know the order of magnitude.

I think co-counsel has indicated that there are approximately 100, but I myself have not–

William H. Rehnquist:

Are each of them grounded, say, in the libel law of all the 50 states?

Carolyn F. Corwin:

–Indeed not, and that is not what the Administrative Law Judge attempts to do in a case like that.

The issue before the Board is not the merits of the state court claim.

The issue before the Board is the motive of the employer in bringing a suit like this.

William H. Rehnquist:

Well, but then we are right back to the hypothetical that Justice White put to you, and it doesn’t seem to me… I realize you prefer not to answer the question, and certainly there may be good reasons for it, but if you are now going to again stress motive rather than the merit of the suit, it seems to me you do have to face up to the hypothetical.

What if… there is no question that all 100 Administrative Law Judges would have found anti-union animus, and yet any objective lawyer viewing the merits of the state court suit would have said it is grounded in fact and will probably succeed.

Carolyn F. Corwin:

Well, I don’t want to try to evade the question.

The concern is that this is an area in which the Board has attempted to accommodate interests, and I hesitate to commit the Board before it faces a case of the sort that you are describing.

William H. Rehnquist:

Well, your earlier answer to me was that the 100 Administrative Law Judges don’t have to be grounded in state law because all they look at is animus.

Carolyn F. Corwin:

No.

No, I must go further to explain.

They look at a number of different types of evidence, all for the purpose of determining whether or not the suit is motivated for a protected activity or anti-union animus.

There are many different sorts of evidence, and one that employers frequently urge and in fact which this employer urged is that the Administrative Law Judge take a look to see whether there is a reasonable basis in fact for the suit.

Here, the employer… the petitioner urged at the Administrative Law Judge stage that it had a reasonable basis for the suit, and the general counsel responded with evidence on that point.

The finding of the Administrative Law Judge was not addressed to the merits of that claim.

It was not the same sort of inquiry as the state court.

William H. Rehnquist:

Well, but was it addressed to a reasonable basis of the suit?

Carolyn F. Corwin:

It was addressed to the reasonable basis of the suit as one indication of the motive of the employer.

William H. Rehnquist:

Well, then, to the judge, to that… to the extent he made that sort of a finding, would have to know something about the law of the state.

Carolyn F. Corwin:

I think that the judge may need to know something about whether a particular statement is true or false.

I think perhaps the broad outlines most Administrative Law Judges would be familiar with.

William H. Rehnquist:

The broad outlines of what?

Carolyn F. Corwin:

Of the state… of the components of libel law, for example, the truth or falsity of a statement.

William H. Rehnquist:

Are you suggesting that libel law is uniform throughout the 50 states?

Carolyn F. Corwin:

I’m not suggesting that, but I’m suggesting that the inquiry of the Administrative Law Judge is very limited, and to the extent there is an examination of this reasonable basis concept, it is confined to the sorts of questions like, is the statement true or false, is there any indication that there was malice.

It is really a very–

William H. Rehnquist:

Well, how do you know when malice is necessary, without turning to the state law?

Carolyn F. Corwin:

–Well, I think that if one gets into the sort of questions that require further legal analysis or further inquiry into state law, I simply don’t think that’s the sort of thing the Administrative Law Judge is going to do.

It is a very basic inquiry.

John Paul Stevens:

But, Ms. Corwin, in his own findings he did conclude that the respondent did not have a reasonable basis for filing his lawsuit.

In two or three places, he says something similar to that.

So he had to make that inquiry before he made that finding.

Carolyn F. Corwin:

Well, I think the inquiry of whether there is a reasonable basis for the lawsuit is not the same inquiry as who is going to prevail under the particular state law, and how the merits–

John Paul Stevens:

It is a little hard for me to understand a lawsuit that has no reasonable basis succeeding.

Carolyn F. Corwin:

–Well, I think in this case, for example, you had the employer state that it had a reasonable basis for the lawsuit because on the face of it simply… it simply stated state law claims, and that was the end of that, and you had the employer saying, I filed the lawsuit because I felt that I was personally attacked for filthy restrooms and unwarranted sexual advances.

John Paul Stevens:

And the Administrative Law Judge looked at the facts and said those attacks were true.

Carolyn F. Corwin:

That’s correct.

John Paul Stevens:

I mean, you can’t say he didn’t look at the merits of the case, then.

Carolyn F. Corwin:

Well, he looked at some very basic facts of the case.

John Paul Stevens:

They go farther than motive.

They go… I mean, maybe he is right.

I am not reaching that question.

But I don’t know how you can argue that he didn’t look at the merits of the lawsuit, either.

Carolyn F. Corwin:

No, I don’t argue that he didn’t look at the merits.

I suggest he did not have the task of deciding the merits, and in fact what he did in this case was to see whether the employer had presented any evidence that might support some sort of a reasonable basis for bringing the suit.

Sandra Day O’Connor:

Well, is it your position that what the Board has to do is to simply find whether the employer had reasonable grounds for believing that the alleged facts he is relying on occurred?

Or what?

Carolyn F. Corwin:

Well, I think that is one possibility.

I think it depends on what the employer suggests.

The employer could come forward and say, I thought such and such was true because people informed me of X or Y.

Sandra Day O’Connor:

Well, but what’s the Board’s standard in these cases?

That is what I think we are concerned about.

Carolyn F. Corwin:

Well, again, I would have to reiterate that the Board is concerned with what the employer’s motive is.

The Board inquiry in an unfair labor practice proceeding is what sort of intent did an employer have, what sort of effect does the conduct have.

Is this–

Sandra Day O’Connor:

Well, is the determination of whether the lawsuit has a reasonable basis in fact just a means of assessing whether it was filed for a retaliatory purpose?

Carolyn F. Corwin:

–Yes.

It is an indicator.

Sandra Day O’Connor:

And that is all?

Carolyn F. Corwin:

It is an indication among many of what the employer’s motive was, whether it was for the purpose of coercing employees in the exercise of their protected activity.

Byron R. White:

Well, it now sounds like you have answered the question you were very reluctant to answer a while ago, if you answered yes to Justice O’Connor’s question, that it is only relevant to determination of motive, and it is not an independent factor required to… for the finding of an unfair labor practice.

Carolyn F. Corwin:

That is correct, and I didn’t mean to–

Byron R. White:

What is correct?

That it is not an independent factor?

Is that it?

Carolyn F. Corwin:

–That’s… it only goes to the question of motive, of the employer’s motive.

Byron R. White:

Well, so you have answered the question.

Yes, and you really answered it yes, it seems to me.

If the basic inquiry is motive, bad motive, and lack of merit of the suit is simply an element that goes to make up bad motive, now, am I faithfully following you?

Carolyn F. Corwin:

Yes, that’s correct.

William H. Rehnquist:

Then a conclusion of bad motive is enough even though it were decided that the lawsuit had merit.

Carolyn F. Corwin:

My reluctance to address that is–

Byron R. White:

You have just expressed absolutely no reluctance.

You said it is only relevant to determining motive.

Carolyn F. Corwin:

–It is certainly relevant to determining motive, but my concern is that I don’t know how the Board would weigh the evidence in a suit such as the one that you suggest.

I think it is certainly correct to say that the reasonable basis inquiry goes to motive.

It is simply that I don’t know whether there would ever be a case in which that was the only evidence of intent.

I think it is far more likely that you are going to have what you have in this situation, in which you have evidence of the employer making statements ahead of time, a week ahead of time, that petitioner would get even with these employees, and particularly with Mrs. Helton, one of the waitresses who had filed a charge with the Board.

Lewis F. Powell, Jr.:

Ms. Corwin?

Carolyn F. Corwin:

Yes.

Lewis F. Powell, Jr.:

We are not giving you much of an opportunity to argue your case, but I have a couple of questions.

Do you agree that the complaint in the state court on its face alleged an action of malicious libel?

Carolyn F. Corwin:

We have not questioned that.

I think I can say that we would accept that.

Lewis F. Powell, Jr.:

And the end result of the Board’s decision that was enforced by the Court of Appeals for the Ninth Circuit is to enjoin the prosecution of that suit, is it not?

Carolyn F. Corwin:

That is correct.

At least to enforce the Court’s cease and desist order requiring dismissal of that suit.

Lewis F. Powell, Jr.:

Yes.

So the effect of all of it is that the libel suit cannot go forward in the state court, so that the Labor Board where a federal court enforces its order may enjoin a libel suit bona fide on its face?

Carolyn F. Corwin:

That is the result only after the Board has found that the filing and prosecution of the suit is an unfair labor practice because it was for the purpose of harassing the employees for the exercise of their protected rights.

Only after finding a violation of the federal statute, the federal labor laws, does the Board then identify an unfair labor practice and provide a remedy for that.

In this case, the remedy is dismissal of the civil suit and reimbursement of legal expenses.

Lewis F. Powell, Jr.:

Which in effect decides the issue of malice in a libel suit, doesn’t it?

In effect?

Carolyn F. Corwin:

It decides whether the employer has violated the federal statute.

That is the inquiry of the Board.

Lewis F. Powell, Jr.:

May I ask you one other question?

Could both of these cases have gone forward simultaneously at the same time, the state suit and the proceeding before the Administrative Law Judge?

Carolyn F. Corwin:

In fact, yes, that is what occurred in this case.

Lewis F. Powell, Jr.:

Well, was a state suit prosecuted while the labor proceeding was going on?

Carolyn F. Corwin:

Yes, that’s correct.

The state suit was prosecuted through several stages.

On the day that the complaint was filed, the temporary restraining order was issued.

Lewis F. Powell, Jr.:

Yes, and some depositions were taken.

Carolyn F. Corwin:

That’s correct.

Some depositions were taken.

Lewis F. Powell, Jr.:

It never went to actual trial, did it?

Carolyn F. Corwin:

It did not go to trial.

There was a preliminary injunction stage at which the court denied a preliminary injunction to the employer and vacated the temporary restraining order.

There were cross-motions for summary judgment, and that occurred after the Administrative Law Judge hearing but before the final decision came out from the Administrative Law Judge.

Lewis F. Powell, Jr.:

Suppose it had gone to trial and a verdict and judgment entered on it for the plaintiff before the Labor Board acted.

Would it have been obligated to respect that, or what would have happened then?

Carolyn F. Corwin:

Well, I think the Board’s reaction to that development, had it occurred, which it did not in this case, but had it occurred, I think would depend on the circumstances in which that judgment were entered.

If it were, for example, a default judgment because the waitresses here couldn’t afford to hire a lawyer and to pursue the suit to that extent, I don’t think the Board would feel constrained by any default judgment, for example.

If it were a judgment on the merits, I think again it would depend on what the Board could identify in the decision as relevant to its inquiry into motive.

I think obviously the Board would think twice about what a state court had found on the merits, but again, it’s conceivable that a trial court would err in the state and that the employee wouldn’t have the money to pursue an appeal.

The waitresses in this case may not be able to pursue this sort of litigation through to the state Supreme Court, and again the Board might consider a situation like that.

Lewis F. Powell, Jr.:

If there were a final judgment in the state court, do you think the Board would defer to it?

Carolyn F. Corwin:

Again, I would have to say that it would depend on the circumstances–

Lewis F. Powell, Jr.:

Just on the libel issue.

That is all that is involved in the state court.

Carolyn F. Corwin:

–Well, in this case, there were two causes of action.

One was a business interference claim which was dismissed by the state court.

The libel action is still alive.

But again, I suggest it would really depend on the circumstances.

I think the Board might well take something like that into account if it were convinced that the waitresses had been able to be represented by good legal counsel that pursued their claims and that in fact the determination was an appropriate one in light of the procedural circumstances here.

John Paul Stevens:

Ms. Corwin, would you agree that your theory as you have given it to us in response to Justice White’s questions is quite different from the theory of the Court of Appeals, which did rely squarely on the absence of any reasonable basis in fact, and on that finding?

Carolyn F. Corwin:

Well, I think the Court of Appeals relied not only on the lack of reasonable basis in fact, but I think it recognized that there were other indications, other significant indications, such as the statement about getting even, the statement by a–

John Paul Stevens:

There is additional evidence of improper motive, but I think it was critical to their holding that there was a finding that has not been challenged, as I understand it, in the cert petition, that there was no reasonable basis in fact, which is quite different from your theory.

Your theory, as I understand it, is that if there is improper motive, no matter how good the lawsuit is, there is still an unfair labor practice.

Carolyn F. Corwin:

–I have tried to suggest that the reasonable basis inquiry is simply an element of the conclusion as to whether the–

John Paul Stevens:

I understand.

I don’t want… you don’t have to repeat that, but all I’m suggesting, that’s a very different theory than the Court of Appeals theory.

Carolyn F. Corwin:

–Well, I think the Court of Appeals spent considerable time on the reasonable basis point, but I think it, too, recognized that it goes to whether the motive of the employer is one that violates the federal labor laws.

Byron R. White:

Well, if we agree with you on that, that that is what the… it seems to me we really ought to remand to the Court of Appeals, because I thought they had relied on… I agree with Justice Stevens, they had relied on the lack of reasonable basis as an independent required element in the proof of the unfair labor practice.

Carolyn F. Corwin:

Well, I think that the Court of Appeals recognized that that was a significant–

Byron R. White:

In which event they may have violated Chainery for affirming on a ground that you say the Board doesn’t use.

Carolyn F. Corwin:

–I don’t read the Court of Appeals decision that way.

It seems to me that the Court of Appeals did refer to the other sorts of evidence that the get even evidence, the circumstances of the lawsuit.

Sandra Day O’Connor:

Well, what do we do if we read it that way, in your view?

Then what action should this Court take, assuming we read it as saying there has to be a finding of no reasonable basis in fact?

They really weren’t entitled to affirm on that basis, were they?

Carolyn F. Corwin:

I simply don’t read them as having affirmed on that basis.

Byron R. White:

All right.

Carolyn F. Corwin:

It seems to me that they had a lot of things in mind, and that obviously the discussion of the evidence took up more room in the opinion than the statements about the get even and the circumstances of the suit.

I don’t know what to respond about a remand, because I simply think… I think the Court of Appeals can be read to use reasonable basis as an indication of whether there was in fact a motive or not.

Byron R. White:

Ms. Corwin, Ms. Corwin, you… I don’t know whether you were up here for the argument in the Wright-Line case.

Carolyn F. Corwin:

Yes.

Byron R. White:

And there, the Board eschewed any suggestion that the unfair labor practice was complete upon proof of motivation, that if the employer could come back and prove that a non-discriminatory or a non-biased ground would have caused him to discharge the person anyway, it wasn’t an unfair labor practice at all.

Why shouldn’t the… in this case, the employer be permitted to come back and say, I had a reasonable basis for the lawsuit and I would have filed it anyway–

Carolyn F. Corwin:

Well–

Byron R. White:

–even if I had an anti-union bias.

Carolyn F. Corwin:

–In fact, I think that’s what the employer tried to do in this case.

Byron R. White:

I know.

He may have.

But on your position, he wouldn’t… it would be irrelevant.

The Board would say to him, don’t waste our time.

Once the motivation is proved, the case is over.

Carolyn F. Corwin:

Indeed not.

I think the Board considers carefully the employer’s reasonable basis argument that the Board considers that this can be something that might tend to countervail other evidence of motive.

I think that the analogy perhaps to the issue you are raising in the transportation management, the Wright-Line test, is that this might be analogized to a pretext case in which only one motive was found.

It is not a dual motive case here.

The Administrative Law Judge found that the reason for filing the suit was to retaliate against Mrs. Helton for filing her charge, her initial charge, and to harass the employees for having engaged in their protected activity, and it concluded that there was no other motive.

Byron R. White:

Well, if it were found that the lawsuit was well grounded in fact, and in state law, it would be difficult to say, wouldn’t it, that part of the motive of filing the lawsuit was to vindicate the employer’s reputation?

Carolyn F. Corwin:

Well, that is part of my reluctance in responding to your hypothetical, because I think the–

Byron R. White:

Well, you have responded well enough.

Carolyn F. Corwin:

–In a case like that, I think the general counsel might hesitate, and think that the evidence was close, and that the motivation was not as clear as it was in a case such as this one.

In this sort of case, I think petitioner’s view takes you to the conclusion that a particular sort of coercive conduct that may be analogous to other sorts of coercive conduct that employers use, that that… the particular form of conduct that this employer chose somehow ought to be immunized from the coverage of the federal labor laws.

Sandra Day O’Connor:

Ms. Corwin, is there anything in the legislative history of the National Labor Relations Act that would indicate Congress thought about the possibility that an employer or union prosecution of a state court suit could constitute an unfair labor practice?

Carolyn F. Corwin:

I am not aware of anything in the legislative history.

I think one can look to the plain terms of the statute and in a case such as the retaliatory suit we have here, one can say, it fits fairly clearly within the language of the statute, in that it’s intended to interfere with the exercise of protected rights, it’s intended to discriminate against the employee for the invocation of the processes of the Board, so I think our starting point is, it comes within the language of the statute.

Now, this Court has on several occasions indicated that the Board has considerable discretion to identify unfair labor practices.

Carolyn F. Corwin:

They are not enumerated in the Act.

Sandra Day O’Connor:

Well, my question was whether there was anything in the legislative history, and I thought perhaps you–

Carolyn F. Corwin:

Yes, and the answer to that is no.

I think here we can look to the plain language of the statute, and this kind of conduct falls pretty clearly within it.

William H. Rehnquist:

–When was the first time after 1935 that the Board entered an order such as this requiring the cessation of a state court lawsuit?

Carolyn F. Corwin:

Well, I think Mr. Katz referred to the Carter suit, which was quite early on.

I don’t have the date.

It must be around 1950 or so.

There have been a series of suits involving various factual situations, and–

William H. Rehnquist:

I am more interested in the chronology of it.

So, for the first 15 years after the enactment of the Wagner Act, there were no such orders entered by the Board?

Carolyn F. Corwin:

–I am simply unaware of any.

I suspect that there were not, but I really don’t know.

The rule that the Board follows and has followed since 1960 is the one referred to as the Clyde Taylor rule, and that is that the general practice of the Board is to not find an unfair labor practice in the case of good faith litigation.

That is the general rule, and that continues to be applied today.

However, the Board has recognized that in a case like this, when you have employees who are just faced with the devastating effect of a retaliatory suit, a suit for half a million dollars in punitive damages, that that can provide such a coercive effect that at least in the case where you have clear proof of retaliation, that the suit was brought for the purpose of harassment, that here you have an unfair labor practice, here you have to step apart from the general rule of Clyde Taylor and conclude that this sort of retaliatory suit is an unfair labor practice.

I think–

Sandra Day O’Connor:

Is there any way to accommodate the parallel interests here short of ordering a cease and desist of the state suit?

Carolyn F. Corwin:

–Well–

Sandra Day O’Connor:

Is there any middle ground or other means of accommodating these interests?

Carolyn F. Corwin:

–Well, to some extent, they have been accommodated already in the general rule that good faith litigation will not be the basis for an unfair labor practice.

In the narrow class of cases we are talking about here, where the Board has found that the suit is brought for the purpose of harassment, it doesn’t seem to me that you can vindicate the federal right, that you can protect the employee rights that the Act guarantees and that you can deter the sort of coercive employer conduct you have here without issuing a cease and desist order as you would against any unfair labor practice, telling the employer to stop.

And I think that there simply isn’t another remedy that is going to be very effective.

Sandra Day O’Connor:

You don’t think payment of fees and expenses and letting the state court determine the merits of the action would be an accommodation?

Carolyn F. Corwin:

Well, I think reimbursement of legal expenses may get you part of the way there, but it doesn’t do anything to solve the question of the employees, these waitresses, who are forced to engage legal counsel, to pay out a lot of expenses on things like depositions and trials and so on.

That is the sort of coercive conduct the Act was designed to deter and to prevent, and to provide a remedy for.

It doesn’t seem to me that one can provide that sort of remedy by simply saying, all right, we will let this unfair labor practice proceed.

That is simply not the sort of remedy that Congress intended in the case of coercive conduct of a particularly devastating type like the suit you have here.

John Paul Stevens:

Of course, I wonder if the suit can really be characterized as that devastating if it is frivolous on its face.

Carolyn F. Corwin:

Well, I think that the… what occurred in this case is an example of what can happen.

Carolyn F. Corwin:

Even with a suit like that, the employees were notified on Monday morning that a temporary restraining order hearing would be held at noon.

They attended that.

They had an order entered against them.

They were served with a complaint for half a million dollars.

And the employer sought to take their depositions beginning the following Wednesday, two days later.

I think you have to do a lot of sorting out–

John Paul Stevens:

But the bottom line is that once they’ve got their side presented to the state court judge, he found no significant merit to the complaint, and the risks, it seems to me, were minimal after that point.

Carolyn F. Corwin:

–Well, I… that’s–

John Paul Stevens:

True, they had damned them, and the complaint is for a lot of money, but you know, there are a lot of complaints like that that don’t have any merit to them.

Carolyn F. Corwin:

–Well, I think that is true for part of the litigation here.

The libel claim is still pending.

The state court–

John Paul Stevens:

But there is no basis in fact for it.

We have such a finding that everybody agrees is true.

So, I mean, what is the jeopardy?

Carolyn F. Corwin:

–Well, I–

John Paul Stevens:

I mean, we have to assume there is no merit to the suit, I believe, in analyzing the case.

Carolyn F. Corwin:

–Well, I think for purposes of federal law you do.

I am not sure that the state court is required by federal law to defer to the Board’s finding.

John Paul Stevens:

They sure are.

They can’t go forward with the case.

Carolyn F. Corwin:

I’m sorry?

John Paul Stevens:

They certainly must follow that the case is over in the state court, isn’t it?

Carolyn F. Corwin:

No, it is not.

John Paul Stevens:

Oh, I misunderstood.

It is pending.

Carolyn F. Corwin:

My understanding is, it has been held in abeyance.

That is, the libel portion of the suit has been held in abeyance–

Sandra Day O’Connor:

Oh, I see.

Right.

Carolyn F. Corwin:

–pending the outcome–

Sandra Day O’Connor:

Well, didn’t the state court deny a motion for summary judgment on the libel aspects?

Carolyn F. Corwin:

–Yes.

Sandra Day O’Connor:

And isn’t that waiting to go to trial?

Carolyn F. Corwin:

Yes, that is correct.

Warren E. Burger:

Do you have anything further, Mr. Katz?

Lawrence Allen Katz:

I have nothing further to add, Your Honor.

Warren E. Burger:

Fine.

Very well.

Thank you, counsel.

The case is submitted.