The opinion of the court was delivered by: KAUFMAN
The defendants move pursuant to Rule 12(b) of the Federal Rules of Civil Procedure, 28 U.S.C.A., to dismiss this action upon the grounds that (1) the court lacks jurisdiction over the subject matter of the action, and (2) the court lacks jurisdiction over the person of the defendant, United Packinghouse Workers of America.
Plaintiff, an employer, has brought this suit to recover the sum of $ 50,000 as damages for an alleged breach of a written collective bargaining agreement made by it with the defendants in October of 1947. Plaintiff alleges that it is engaged in a business affecting commerce and that the defendants are labor organizations and voluntary unincorporated associations representing employees in an industry affecting commerce and have officers and agents engaged in such representation in this district. The defendants are alleged to have breached the terms of the agreement by causing strikes and work stoppages in March of 1948 in certain of the plaintiff's plants located in New York.
Jurisdiction is invoked under Section 301(a) of the Labor Management Relations Act, 1947, 29 U.S.C.A. § 185(a) (hereinafter referred to as the 'Act'), which provides that 'suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this Act, or between any such labor organization representing employees in an industry affecting commerce as defined in this Act, or between any such labor organizations, may be brought in any district Court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties'; and under 28 U.S.C.A. § 1337, which provides that 'the district court shall have original jurisdiction of any civil action or proceeding arising under any Act of Congress regulating commerce * * * .'
The constitutionality of Section 301, 29 U.S.C.A. § 185, has been drawn in question by the Defendants' motion and the United States has intervened. 28 U.S.C.A. § 2403.
First. It is contended by defendants that Section 301(a) is unconstitutional as applied to this case, in that it extends the jurisdiction of this court beyond the limitations prescribed by Article III, Section 2, of the Constitution of the United States, which, insofar as here material, provides that 'the judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, * * * to Controversies * * * between Citizens of different States * * * .'
Defendants argue that the action is one for breach of contract, to enforce a right existing under the common law of the State of New York; that there is no diversity of citizenship, and the case is not one arising under the Constitution or laws of the United States or upon any other ground set forth in Article III, Section 2 of the Constitution. Consequently, runs the argument, Congress was without power to confer jurisdiction over the case on the District Court. Hodgson v. Bowerbank, 5 Cranch 303, 3 L. Ed. 108; Ex parte Bakelite Corporation, 279 U.S. 438, 449, 49 S. Ct. 411, 73 L. Ed. 789; Behlert v. James Foundation of New York, D.C.N.Y., 60 F.Supp. 706.
The spirit as well as the letter of the Act makes it clear that in setting up the machinery for the negotiation of collective bargaining agreements, their execution, effect and enforcement, Congress recognized and regarded the observance and enforcement of such contracts as a matter of federal concern incident to the regulation of commerce, and intended to create a right in each of the parties to such contracts to the observance and the performance thereof by the other. Section 301(a) of the Act, authorizing suits for violation of such agreements, would be meaningless on any other hypothesis and would attribute to Congress the anomalous action of providing for remedy and a forum in which to enforce it, without creating a right to remedy or to enforce. The very inclusion of Section 301 shows, on its face, and the legislative history of the Act confirms the Congressional intention, that other provisions of the Act, for redressing unfair labor practices, were not an exclusive statement of the rights created by the Act, and did not eliminate or militate against the right to seek relief in the federal courts for violations of collective bargaining agreements between employers and labor organizations.
There can be no doubt that Congress, under its power to regulate commerce, could constitutionally create such substantive rights (see Section 22(a), Securities Act, 1933, as amended, 15 U.S.C.A. § 77v(a); Section 16(b), Fair Labor Standards Act, 1938, as amended, 29 U.S.C.A. § 216(b); and the legislative history of the Act fully supports the conclusion that Congress not only intended to do so, but that it regarded the language it used as sufficient and effective to do so. S. Rept. No. 105, 80th Cong., 1st Sess., pp. 3, 15-17; H. Rept. No. 245, 80th Cong., 1st Sess., pp. 6, 45, 46; House Conference Rept. No. 510, 80th Cong., 1st Sess., p. 52, 93 Cong.Rec. 6443, 7537.
To adopt defendants' contention would violate the cardinal principles that a court should adopt that construction of a statute which will sustain its constitutionality, Grenada County Supervisors v. Brogden, 112 U.S. 261, 268, 5 S. Ct. 125, 28 L. Ed. 704; United States v. Delaware & Hudson Co., 213 U.S. 366, 407, 29 S. Ct. 527, 53 L. Ed. 836; National Labor Relations Board v. Jones & Laughlin Steel Corporation, 301 U.S. 1, 30, 57 S. Ct. 615, 81 L. Ed. 893, 108 A.L.R. 1352, and effect the Congressional purpose, Durousseau v. United States, 6 Cranch 307, 314, 3 L. Ed. 232; United States, for Use of Hill, v. American Surety Co., 200 U.S. 197, 203, 26 S. Ct. 168, 50 L. Ed. 437; United States v. Hutcheson, 312 U.S. 219, 235, 61 S. Ct. 463, 85 L. Ed. 788; worse than that, it would give to the Act a construction at variance with the one put upon it by the Congress which enacted it.
The question now under discussion was raised and decided in Colonial Hardwood Floor Co. v. International Union, D.C. Md. 76 F.Supp. 493, affirmed 4 Cir., 168 F.2d 33. In overruling the contention on which defendants rely here, Judge Chesnut said, 76 F.Supp. 493, at page 496:
'The defendants also raise various constitutional questions. First it is said that the court is without jurisdiction of the case in the absence of diversity of citizenship. The point made is that under Article III of the Constitution judicial power is limited to cases of diverse citizenship or to cases arising under the Constitution, Treaties or laws of the United States; and that the controversy in this case does not arise under a law of the United States. See Barnhart v. Western Maryland Ry. Co., D.C. Md. 41 F.Supp. 898, affirmed 4 Cir., 128 F.2d 709. But I think this contention untenable here. Osborn v. Bank of United States, 9 Wheat. 738, 6 L. Ed. 204; Markham v. Allen, 326 U.S. 490, 66 S. Ct. 296, 90 L. Ed. 256. The Labor Management Act creates important substantive rights between employers and employees engaged in interstate commerce, and section 301 expressly authorizes suits of this character in district courts of the United States. It is clearly, therefore, a suit arising under a law of the United States.'
See also Note, 57 Yale L.J. 630.
Second. It is contended by defendants that Section 301 infringes upon the rights reserved to the States under the Tenth Amendment in that it sets forth the circumstances when and the manner in which a Union may be sued in a case which does not involve the enforcement of a federal right. In view of the fact that the enforcement of a federal right is involved in the instant case, the argument falls. It is clear that Congress, having created a substantive right in the exercise of its power under the commerce clause, art. 1, § 8, Cl. 3, may also provide the procedure for enforcing that right by making voluntary labor organizations legal entities for the purpose of suit. United Mine Workers of America v. Coronado Coal Co., 259 U.S. 344, 383-392, 42 S. Ct. 570, 66 L. Ed. 975, 27 A.L.R. 762; cf. ...