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STRIP CLEAN FLOOR REFINISHING & PAINTING CORP. V.

November 10, 1971

Strip Clean Floor Refinishing and Painting Corporation et al., Plaintiffs,
v.
New York District Council No. 9 Brotherhood Of Painters, Decorators and Paper Hangers of America, AFL-CIO et al., Defendants


Travia, D. J.


The opinion of the court was delivered by: TRAVIA

TRAVIA, D. J.

Plaintiffs move for summary judgment on the issue of liability and for a trial on the issue of damages only.

 The plaintiffs, Strip Clean Floor Refinishing and Painting Corporation ("Strip Clean") and Delta Contracting Corporation ("Delta"), are New York corporations engaged in commercial painting and contracting.

 The defendants include New York District Council No. 9, Brotherhood of Painters, Decorators and Paperhangers of America, AFL-CIO, ("D.C. 9") and twenty-six affiliated local unions, labor organizations which supply through their membership labor services to the commercial painting and contracting industry. The affiliates include six local unions characterized by the defendants as "autonomous locals" and twenty locals of a non-autonomous character.

 The defendant D.C. 9 and the twenty affiliate local unions, one of which, Local 1507, was not served and, therefore, not a party, which are not characterized as autonomous locals oppose the motion of the plaintiffs, and the so-called autonomous locals 206, 806, and 1087 oppose the plaintiffs' motion and, by formal motion, move for summary judgment dismissing the complaint against them. *fn1" The so-called autonomous locals 230, 829, and 1456 oppose the plaintiffs' motion and moved orally, without opposition at the time of argument, for summary judgment dismissing the complaint against them.

 The complaint alleges that this action arises under the Labor Management Relations Act of 1947, 29 U.S.C. § 151 et seq. ("Act"). Plaintiffs allege that in the course of performing work for the Board of Education of the City of New York ("B.O.E."), the plaintiffs employed members of a union unaffiliated with defendant D.C. 9; that for periods throughout 1968, the defendants did partake in activity proscribed by the Act, threatening and restraining B.O.E. from doing business with the plaintiffs, and caused employees of B.O.E. and others engaged in commerce to strike and refuse to perform services for their employers; and that the activities of the defendants amounted to unfair labor practices which caused damage to the plaintiffs, entitling them to punitive and compensatory damages in the sum of $3,000,000. The plaintiffs also allege that, at all times relevant, D.C. 9 did in fact act as agent for the defendant affiliates and that the defendant affiliates ratified all of the acts of D.C. 9 upon which the complaint is based. The plaintiffs, also and more pertinent to the motions being considered, state in an affidavit by John Durandes, presently General Manager of Strip Clean and formerly General Manager of Delta, that as a result of the activities engaged in by the defendants, application was made by the plaintiffs herein to this Court in 1968 for injunctive relief against D.C. 9; a simultaneous application was presented to the National Labor Relations Board ("NLRB"); and after a hearing on the matter, this Court granted a temporary injunction staying the defendants *fn2" from engaging in proscribed acts against B.O.E., which stay was subject to the pending proceedings before the NLRB. It is further stated that, thereafter, a hearing was held before a Trial Examiner of the NLRB, and, after having made findings of fact and conclusions of law, the Trial Examiner determined that the defendant D.C. 9 did engage in unfair labor practices violating Section 8(b)(4)(ii)(B) of the Act. Thereafter, the NLRB reviewed and affirmed the decision, findings, conclusions and recommendations of the Trial Examiner. The Circuit Court of Appeals, Second Circuit, granted, upon review, enforcement of the order of the NLRB.

 It is these unfair labor practices on which the instant suit is based. The plaintiffs now argue that the doctrine of collateral estoppel applies in this case and that the plaintiffs are entitled to summary judgment in their favor on the issue of liability based on the decision of the NLRB.

 I.

 Prior to 1966, the cases which dealt with the res judicata effect of administrative determinations on a subsequent suit at law held that res judicata could not be applied. In 1966, however, the Supreme Court, in United States v. Utah Construction and Mining Co., 384 U.S. 394, 421-22, 86 S. Ct. 1545, 16 L. Ed. 2d 642 (1966), remarked that the prior holdings should not be accepted as dogma. The Court stated:

 
"Occasionally courts have used language to the effect that res judicata principles do not apply to administrative proceedings, but such language is certainly too broad. When an administrative agency is acting in a judicial capacity and resolves disputed issues of fact properly before it which the parties have had an adequate opportunity to litigate, the courts have not hesitated to apply res judicata to enforce repose."

 The question on this motion is, therefore, whether that principle can be applied in this case.

 In this suit, the plaintiffs are seeking damages under the Labor Management Relations Act of 1947, and they invoke the jurisdiction of this Court because the cause of action arises thereunder. They do not specify the particular section of the Act which confers jurisdiction; however, it is section 303 of the Act, 29 U.S.C. § 187, which states:

 
"(a) It shall be unlawful, for the purpose of this section only, in an industry or activity affecting commerce, for any labor organization to engage in any activity or conduct defined as an unfair labor practice in section 158(b)(4) of this title.
 
(b) Whoever shall be injured in his business or property by reason or* any violation of subsection (a) of this section may sue therefor in any district court of the United States subject to the limitations and provisions of section 185 of this title without respect to the amount in controversy, or in any other court having jurisdiction of the parties, and shall recover the damages by him sustained and the cost of the suit."

 There have been labor cases involving the application of res judicata after an administrative determination based on § 303 of the Act since 1966, some somewhat similar to the instant case.

 The United States Court of Appeals for the Fifth Circuit, in Painters District Council 38 v. Edgewood Contracting Co., 416 F.2d 1081 (1969), determined that res judicata would apply to a proceeding of this nature. The Edgewood Contracting case involved an employer seeking damages after it had been determined by the NLRB that the defendant had committed an unfair labor practice by conducting a secondary boycott against the plaintiff with the intent to force the plaintiff to cease using non-union subcontractors. There the plaintiff moved for partial summary judgment on the issue of liability and the district court granted it on the grounds that the NLRB determination was res judicata on the issue of liability. The Court of Appeals in affirming the lower court based their decision on Utah Construction, supra, and the reasoning of Professor Davis. See 2 K. Davis, Administrative Law, § 18.12 (1965). *fn3" The Court stressed that the district court had determined that the NLRB had conducted a full hearing, with the parties represented by counsel, and with full opportunity to present evidence and to call, examine, and cross-examine witnesses. Both parties also made oral arguments. It was also noted that the NLRB was acting in a judicial capacity and that factual issues were properly before it. Moreover, the union made no claim that it was denied a full or fair hearing or that the action by the NLRB was arbitrary or capricious or that the determination was unsupported on the record as a whole. Finally, the court, quoting from the District Court opinion, stated that:

 
" [It] should not 'perpetuate the possibility of inconsistent holdings resulting from dual litigation of the same issues between the same parties.'" (416 F.2d at 1083).

 As will be discussed hereinafter, dual litigation of the same issues between the same parties does not exist in the case at bar.

 The Court of Appeals, Fifth Circuit, again in H.L. Robertson & Associates, Inc. v. Plumbers Local 519, 429 F.2d 520 (1970), a case which appears to be virtually on all fours with the case now before this Court, held that a determination of the NLRB was res judicata on the issue of liability. It based its decision on the Edgewood Contracting case, supra, and stated:

 
" . . . the record in this case shows that the Board conducted a full hearing on the issue of the legality vel non of Local 519's activities at the job site, with the present parties represented at that hearing by counsel." (429 F.2d at 521).

 The plaintiffs also cite the case of Paramount Transport Systems v. Teamsters Local 150, 436 F.2d 1064 (9th Cir. 1971), which appears to be identical to the instant one. In affirming a district court application of the doctrine of res judicata the Court of Appeals, Ninth Circuit, stated:

 
"We believe that the district court correctly applied United States v. Utah Construction & Mining Company, supra, to foreclose the union from litigating in this action those material issues of fact decided adversely to it in the proceedings culminating in a final order by the National Labor Relations Board. But we do not construe Utah Construction to require that the doctrine of collateral estoppel be applied across the board to all determinations of such issues by administrative agencies. Reading Utah Construction with United States v. Carlo Bianchi & Company, 373 U.S. 709, 10 L. Ed. 2d 652, 83 S. Ct. 1409 (1963), we conclude that collateral estoppel effect should be given only to those administrative determinations that have been made in a proceeding fully complying with the standards of procedural and substantive due process that attend a valid judgment by a court and further, that such effect should be accorded only to those findings upon material issues that are supported by substantial evidence on the administrative record as a whole." (436 F.2d at 1065, 1066).

 Both the H. L. Robertson and the Paramount Transport cases, supra, are distinguishable from the case before this Court as will be discussed hereinafter.

 It would seem that there exists an abundance of authority supporting the plaintiffs' motion.

 The plaintiffs, however, fail to mention a case quite similar to the instant one decided in this District in 1968. That case, Old Dutch Farms, Inc. v. Milk Drivers Local 584, 281 F. Supp. 971 (E.D.N.Y. 1968), involved an employer suit for damages resulting from union activity determined by the NLRB to have been an unfair labor practice. On a motion for summary judgment on the issue of liability, the Court denied the motion. Judge Mishler presented a thorough treatment of the issue involved, discussing arguments made by the opposing sides. He stated:

 
"Where there is some good reason for a new judicial inquiry into the same facts, however, the courts will not view the administrative findings as final. See, United States v. Utah Const. & Mining Co., supra at 421 n. 18, 86 S. Ct. at 1559 n. 18. Indeed, they appear in accord with Professor Davis's view that the doctrine of res judicata should be used when the reasons for it are present in full force, modified when such modification is needed, and rejected when the reasons against its use outweigh those in its favor. 2 Davis, Administrative Law § 18.02 at 548 (1958)." (281 F. Supp. at 974).

 He determined that the issue involved in the motion was whether there was some factor present in the prior proceedings or the nature of an action under § 303 which would militate against the application of the doctrine. He concluded not only that there were factors present in the prior proceeding which militated against res judicata (substantial factual issue remained unresolved) but also ...


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