The opinion of the court was delivered by: WEINFELD
This action was instituted by the plaintiff Union to set aside an order of the National Labor Relations Board dismissing the Union's petition for its certification and to compel the Board to conduct a representation election pursuant to provisions of the Labor Management Relations Act.
The Board moves to dismiss the complaint pursuant to Rule 12(b) of the Federal Rules of Civil Procedure on the grounds that (1) the court is without jurisdiction over the subject matter of the action; and (2) the complaint fails to state a claim upon which relief can be granted. For the reasons hereafter discussed, the court dismisses the complaint on both grounds.
In October 1965 the Union filed a petition under section 9(c) of the Labor Management Relations Act of 1947
seeking certification as the representative of the clerical employees of the United Fruit Company at its terminal in the Panama Canal Zone. An evidentiary hearing was held, and after consideration of the briefs of the Union and the employer, the petition was dismissed. The principal issue was whether, under the Act, the Board's jurisdiction extended to the employees in question.
The hearing disclosed and the Board found that the United Fruit Company, the employer, is a New Jersey corporation, with its principal place of business in Boston, Massachusetts, and operates throughout the United States and various countries of Central and South America, where it is engaged, inter alia, in the business of providing transportation in interstate and foreign commerce. The Board further found that the employees the Union seeks to represent are Panamanian nationals; that they perform their work at United Fruit's shipping terminal in the Canal Zone; that United Fruit pays them wages in accordance with the Fair Labor Standards Act; that the employees reside outside the Zone, are forbidden to make purchases in the Zone, are subject to the laws of the Republic of Panama, and pay taxes to Panama.
The employer's basic position before the Board was that it was without jurisdiction over its operations with respect to the employees in question, since the Canal Zone is not a state, foreign country or territory within the commerce definition of the Act.
The Union, on the other hand, contended that the Board had jurisdiction under the Act in view of the sovereignty over the Canal Zone granted to the United States under the treaty of 1903 between our government and the Republic of Panama.
The Board did not reach the jurisdictional issue. It dismissed the petition on the ground it deemed it inappropriate to assert jurisdiction. The bases of its decision were contemporaneous negotiations between the United States and Panama for a new treaty and the announcement by President Johnson that the two countries had already agreed that the 1903 treaty would be abrogated and that the new treaty would effectively recognize Panama's sovereignty over the area of the present Canal Zone.
Here the National Labor Relations Board has declined to process a representation petition filed by the Union under section 9(c). Ordinarily Board orders in such proceedings are not subject to direct review by the courts. Congress has provided an indirect and deliberately delayed review by the Courts of Appeals of representation orders by permitting challenge to them
whenever, based thereon, an unfair labor practice order has been issued under section 10(c) and its enforcement or review is sought under section 10(e) or (f).
Congress, by so vesting jurisdiction in the Courts of Appeals to review representation orders, necessarily foreclosed District Court review. Nevertheless, the Supreme Court has held that the District Courts, under section 1337 of Title 28, have jurisdiction to set aside such orders in certain extraordinary circumstances.
These exceptions to the normal rule precluding District Court intervention apply when the Board's order (1) violates a specific prohibition of the Act,
or (2) interferes with our government's foreign relations.
The Union contends that the Board's instant order comes within both exceptions.
First, it argues the Board improperly invaded the field of our foreign relations by predicating its dismissal upon the negotiations concerning the Zone and the President's statement with respect thereto. However, the Board's action is the converse of McCulloch v. Sociedad Nacional,
which created the exception based upon foreign affairs considerations and where the Supreme Court carefully limited its holding to Board orders which create urgent international problems.
Unlike McCulloch, there is no claim that the Board's declination of jurisdiction "aroused vigorous protests from foreign governments and created international problems for our Government,"
nor that the effect of the Board's action is that "an act of congress [will] . . . be construed to violate the law of nations . . . ."
On the contrary, a statement of the Bureau of Public Affairs of the State Department concerning the negotiation of the new treaty for the Panama Canal and the President's announcement thereon notes that a basic conflict in interpretation of the sovereignty provision of the 1903 treaty has been the source of contention between our government and the Republic of Panama for more than sixty years, has become "a highly nationalistic, emotional issue in Panama" and was a factor contributing to the January 1964 demonstration in the Canal Zone and the break in relations between Panama and the United States.
The Board's declination of jurisdiction was calculated to avoid any action which might have been deemed an interference with international affairs and might have served to exacerbate the situation or disturb the progress of negotiations between the two governments. The Board's action, rather than "create international problems for our Government," sought to avoid them. Upon the facts, the McCulloch exception is inapplicable to the instant case.
The Union next contends that this case falls within the Leedom v. Kyne exception.
There, the court held that the District Courts have jurisdiction "to strike down an order of the Board made in excess of its delegated powers and contrary to a specific prohibition in the Act."
The Union's position here is that the Kyne exception extends also to Board orders which decline to assert jurisdiction in the face of clear commands of the Act; that section 9(c)(1)
contains such a clear mandate; and that the Board's action here violated this command. This contention must be viewed against the Supreme Court's admonition that the Kyne exception is a "narrow" one and that McCulloch was "not to be taken as an enlargement of the exception in Kyne."
The latter case itself indicates a distinction between statutory prohibitions and affirmative commands.
The difficulty with extending the Kyne exception to purported commands is highlighted by Local 1545, United Bhd. of Carpenters v. Vincent,
where affirmative statutory language was held not sufficiently clear and specific to support District Court jurisdiction. As the Carpenters case shows, the meaning of affirmative statutory declarations can generally be discovered only through statutory interpretation, whereas the meaning of prohibitions, as in Kyne, is apparent on the face of the statute. Such is the problem in the instant case.
Section 9(c)(1), relied upon by the Union, provides:
"Whenever a petition shall have been filed . . . the Board shall investigate such petition and if it has reasonable cause to believe that a question of representation affecting commerce exists shall provide for an appropriate hearing upon due notice. . . . If the Board finds upon the record of such hearing that such a question of representation exists, it shall direct an election by secret ballot and shall certify the results thereof."
The Union contends that this provision is mandatory and that if a petition is presented and a question of representation affecting commerce exists, the Board is entirely without discretion but must direct an election. The Union's position disregards prior interpretations of and practice under 9(c)(1).
This statutory provision sets out the general steps to be followed in the processing of representation petitions: investigation; hearing; election; certification. Since the provision for each stage is preceded by the word "shall," accepting the Union's literal interpretation would mean that the section imposes upon the Board a series of mandatory steps which it must follow in processing representation petitions. Section 9(c)(1) has never been interpreted or applied in this manner; the Board has been permitted and has exercised considerable discretion in processing representation petitions.
For many years, for example, the Board has declined to assert jurisdiction in representation proceedings over disputes within its statutory jurisdiction because the business done by the employer is not sufficiently substantial within the Board's self-defined standards.
Prior to the 1959 amendment to the Act which codified the Board's practice,
it met with judicial acceptance.
Section 9(c)(1) read then as it reads now,
and no other provision in the Act authorized the Board to decline jurisdiction; yet the "shall" in the section was not deemed to preclude the Board's discretion in this respect.
In 1959 the Act was amended by the addition of section 14(c)(1) which grants the Board power to decline jurisdiction over insubstantial disputes.
Although this section seems by its terms to apply to representation as well as unfair labor practice proceedings,
and has been so applied by the Board
with apparent judicial approval,
it was not deemed necessary to amend section 9(c)(1) to reconcile what - if the Union's interpretation of the latter section is correct - would be a blatant inconsistency in the statutory scheme. The very existence of section 14(c)(1), in addition to the prior accepted practice of the Board, precludes a finding ...