Before L. HAND, AUGUSTUS N. HAND, and CHASE, Circuit Judges.
AUGUSTUS N. HAND, Circuit Judge.
The plaintiffs are individual insurance agents employed by the defendant Metropolitan, a New York corporation. These agents are suing in their own behalf and for other agents similarly situated to obtain a declaratory judgment awarding to them a fund of $792,318.12 deposited by Metropolitan in Manufacturers Trust Company to the credit of the defendants North, Nicholas and Berney as escrowees. The plaintiffs were chosen by two agents' unions to represent a large number of individual claimants. They seek to obtain an award of the fund under a so-called directive order of the War Labor Board which granted an increased rate of pay and attempted to make it retroactive to the dates of certification to that Board by the Secretary of Labor of various disputes between Metropolitan and the bargaining agents.
The insurance agents were employed by Metropolitan in New York, New Jersey, Pennsylvania, Michigan, Massachusetts, Connecticut, and Illinois, were engaged in soliciting both life and industrial insurance, and had selected the United Office and Professional Workers of America with its affiliated local unions as their agents to secure for them higher compensation and other advantages. Conciliation efforts to settle disputes with Metropolitan in these States having failed, the cases were certified to the National War Labor Board by the Secretary of Labor, and were ultimately consolidated by order of the Board. During the proceedings before the Board, the question of retroactive pay arose, and Metropolitan took the position that it would be unable to comply with any decision of the Board which might award retroactive increased pay, because of the provisions of Sections 213(7) and 213-a(5) of the New York Insurance Law, Consol.Laws, c. 28. On July 19, 1944, while the case was pending before the Board and in anticipation of a decision granting retroactive pay, the Union and Metropolitan entered into a stipulation which is set forth in the margin.*fn1 In general it provided that Metropolitan would deposit in escrow whatever amount of money might be ordered by the Board as retroactive pay in these disputes subject to a determination by a court of competent jurisdiction of the controversy with respect to Metropolitan's ability to pay such an award in view of the provisions of the New York Insurance Law. The Union agreed not to apply to any governmental authority for enforcement of the Board's order. On September 18, 1944, the War Labor Board made a decision awarding increased pay in the sum of $2.85 per week, retroactive to the date of certifications of the disputes to the Board, and the necessary amount was deposited in escrow by Metropolitan.
In the case at bar the District Court held that Sections 213(7) and 213-a(5) of the State Insurance Law did not forbid the retroactive payments ordered by the War Labor Board, and that even if those provisions be interpreted as prohibiting these payments ordered by the Board under the federal War Labor Disputes Act its order superseded the State enactments and rendered them inoperative. Accordingly a decree for plaintiffs was directed by the District Court.
In the circumstances disclosed we are not disposed to discuss either the issue of the proper interpretation of the State Act or the merits of the somewhat delicate questions of possible conflict between United States and State laws which might be involved in the litigation. There is not only the disputed question as to the scope of Sections 213(7) and 213-a(5) of the State Insurance Law,*fn2 but there is the further issue whether, if these sections be interpreted as prohibiting the retroactive payments, they would transgress the order of the War Labor Board claimed by the plaintiffs to be controlling as made in the exercise of the war powers of the federal government or alternately federal powers exercised under the National Labor Relations Act, 29 U.S.C.A. § 151 et seq.
If we should hold the payment permitted under a proper interpretation of the State Insurance Law we would not bind the State which is not a party to the present suit but has filed a brief by its Attorney General as amicus curiae arguing that the New York Insurance Law prohibits the retroactive payments. Thus if we held these payments valid we would leave Metropolitan subject to criminal penalties which the State Might impose under Section 5 of that law*fn3 for violation of its provisions, if the State Court did not accept our views. On the other hand, if we should hold the payments forbidden by the terms of the State Act, it would then be necessary to determine the validity of those provisions within the respective areas of federal and state powers existing under the Constitution.
If we should pass upon the question of statutory construction now, m the absence of any authoritative interpretation by the State, our decision might embarrass the State authorities in exercising important functions in regulating insurance. On the other hand, a decision by the State Court as to the meaning of the statute will be binding upon the parties and may obviate any necessity of determining constitutional questions which are present. In view of the above considerations the judgment of the District Court awarding the fund deposited in the Manufacturers Trust Company to the plaintiffs should be reversed and the case remanded to that court with directions to retain the bill pending the determination of proceedings to be brought with reasonable promptness in the New York Supreme Court in conformity with this opinion.
This appeal should receive the above disposition under the doctrine enunciated by the Supreme Court in Railroad Commission of Texas v. Pullman Co., 312 U.S. 496, 61 S. Ct. 643, 85 L. Ed. 971; Chicago v. Fielderest Dairies, 316 U.S. 168, 62 S. Ct. 986, 86 L. Ed. 1355; Spector Motor Co. v. McLaughlin, 323 U.S. 101, 65 S. Ct. 152, 89 L. Ed. 101; A.F. of L. v. Watson, 327 U.S. 582, 66 S. Ct. 761, 90 L. Ed. 873. The situation disclosed in the case at bar is one where the State Court should be allowed to construe its own law because only its decision can be regarded as definitely authoritative and also because such a determination by the State Court might render it unnecessary to pass upon the constitutional question we have discussed. These were reasons given in the decisions in the Supreme Court in the above cases. We do not violate the admonition in Meredith v. Winter Haven, 320 U.S. 228, 234, 64 S. Ct. 7, 11, 88 L. Ed. 9, that "the difficulties of ascertaining what the state courts may hereafter determine the state law to be do not in themselves afford a sufficient ground for a federal court to decline to exercise its jurisdiction to decide a case which is properly brought to it for decision." We think the absence of the State as a party here does not render the above authority inapplicable since there exists not only the risk which Metropolitan would undergo of criminal prosecution but the contention of the Attorney General in his brief as amicus curiae that the payments to plaintiffs are forbidden by the terms of the New York Insurance Law.
The judgment is reversed and the case is remanded to the District Court with directions to proceed in accordance with the ...