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Iodice v. Calabrese

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT


decided: February 25, 1975.

ANTHONY IODICE, BART RUGGIERO, PELHAM TRANSPORTATION CO., INC., AND THORNWOOD EXCAVATORS AND MOVERS, INC., PLAINTIFFS-APPELLEES-APPELLANTS,
v.
ADELE CALABRESE AND TEAMSTERS AND CHAUFFEURS LOCAL 456, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, DEFENDANTS-APPELLANTS-APPELLEES

Appeal from a judgment of the United States District Court for the Southern District of New York, David N. Edelstein, Chief Judge, sitting without a jury, finding Local 456 liable for damages under §§ 301 and 303 of the Labor Management Relations Act, 29 U.S.C. §§ 185, 187 (1970) and dismissing claims brought under New York law and the antitrust laws. Affirmed as to liability under § 303, remanded as to damages under that section; reversed as to liability under § 301; affirmed in all other respects.

Smith, Hays and Mansfield, Circuit Judges.

Author: Hays

HAYS, Circuit Judge:

Plaintiffs filed suit in New York Supreme Court alleging that defendants Peter Calabrese and Teamsters and Chauffeurs Local 456 of the International Brotherhood of Teamsters had violated § 303 of the Labor Management Relations Act, 29 U.S.C. § 187 (1970), the labor contract between plaintiff Pelham Transportation Co. and Local 456, and various provisions of New York state law.*fn1 On defendants' motion, the case was removed to the United States District Court for the Southern District of New York. See Iodice v. Calabrese, 291 F. Supp. 592 (S.D.N.Y. 1968). After trial, Chief Judge Edelstein, sitting without a jury, held that the defendants had violated § 303 and the labor contract with Pelham. Iodice v. Calabrese, 345 F. Supp. 248 (S.D.N.Y. 1972). For the violation of § 303, he granted plaintiff Anthony Iodice nominal damages of $100 and plaintiff Thornwood Excavators and Movers, Inc. damages of $5,000. For violation of the labor contract, he granted Pelham damages of $14,900. The other claims were dismissed.

We reverse the decision as to the violation of the labor contract. We affirm the holding as to the § 303 claim but remand to the district court on the issue of damages. In all other respects, we affirm.

I.

For many years, Anthony Iodice has worked in the Westchester County construction industry operating his own trucking equipment. During that time he has had a stormy relationship with Local 456 of the Teamsters and particularly with its secretary-treasurer, Peter Calabrese.*fn2 At one time Iodice was a member of the Local as an owner -driver, but in 1949 the union decided that owner-drivers should not continue to be allowed to become or remain members of the union. The union offered the owner-drivers an opportunity to sign contracts with the union as owners. Iodice was among many who declined to do so.

In October 1951, Iodice testified that while driving for a company against which Local 456 was striking, he had witnessed an assault by Calabrese. Calabrese was convicted and served nine months in prison.

Since 1953 Iodice has been in the business of moving heavy construction machinery by use of a low-bed trailer and tractor. He operated under his own name until 1965, when he sold his equipment to Thornwood Excavators and Movers, Inc., which was formed by his sister Elissa Guiliano, and went to work for Thornwood as a manager and driver.

The district court found that at various times, both on his own and with Thornwood, Iodice lost business because of pressure put on customers by Local 456 not to deal with him. 345 F. Supp. at 254. The district court enumerated five specific instances in which contractors had hired Iodice to move their equipment but later let him go. 345 F. Supp. at 254-55. In each instance Peter Calabrese threatened the customer with either work stoppages or fines or both if he did not stop dealing with Iodice. In three of the cases, he imposed fines on contractors for having already dealt with Iodice.

Early in 1965 Iodice entered into a contract on behalf of his friend Bart Ruggiero to buy Pelham Transportation Co., which held certificates of public convenience and necessity from the Interstate Commerce Commission and the New York State Public Service Commission. Iodice held no formal position with Pelham but he did serve as an informal adviser on such matters as the computation of rates and the selection of routes. Iodice also contacted Local 456 on behalf of Pelham to propose a contract and to request that the union accept Pelham's two drivers, Nicholas Tramonti and Joseph Nicolai, as members. Calabrese agreed and on April 9, 1965, Iodice and Ruggiero came to the union hall where, at Calabrese's insistence, Iodice signed the contract.

On November 5, 1965, Local 456 began picketing Pelham's premises. Calabrese told Ruggiero that the reason for the picketing was Pelham's failure to make fringe benefit payments as required by the union contract. On December 17 Ruggiero had checks sent to cover what was owed. Calabrese sent the checks back on December 20 on the grounds that the amounts sent were inadequate and that Pelham also owed Tramonti $1,323 for the seven weeks he had not worked because of the picketing. Calabrese claimed that this money was due to Tramonti because Iodice had driven for Pelham in place of Tramonti in violation of the union contract. The picketing continued for two years, during which time Pelham could not do any work. Eventually, Ruggiero sold its equipment and the ICC revoked its certificate of public convenience.

Around the beginning of 1969, Iodice went to work as manager and driver for Pleasant Excavators and Equipment Rental Company, another corporation owned by his sister.

II.

Local 456 argues that the action it took against the contractors who dealt with Iodice was protected primary activity because it was intended to enforce the work preservation clauses in the union's contract.*fn3 However, the district judge found that the pressure exerted on contractors dealing with Iodice was intended to force them to cease doing business with Iodice. The court concluded therefore that Local 456 had violated § 8(b)(4)(B)*fn4 and consequently § 303*fn5 of the Labor Management Relations Act, 29 U.S.C. §§ 158(b)(4)(B), 187 (1970), regardless of whether other factors had also led it to take action against Iodice's customers. We agree.*fn6

Section 8(b)(4)(B) makes it an unfair labor practice for a labor organization to "threaten, coerce or restrain" any person engaged in commerce "where an object thereof" is to force him to cease doing business with any other person. It is well settled that such action is not immunized merely because the union claims to be enforcing the terms of its contract. Landstrom v. Chauffeurs, Teamsters, Warehousemen & Helpers, Local 65, 476 F.2d 1189, 1192-93 (2d Cir. 1973); N.L.R.B. v. Milk Drivers and Dairy Employees Local 584, 341 F.2d 29, 32-33 (2d Cir.), cert. denied, 382 U.S. 816, 15 L. Ed. 2d 64, 86 S. Ct. 39 (1965); N.L.R.B. v. International Union of Operating Engineers, Local 12, 293 F.2d 319, 322-23 (9th Cir. 1961). When a labor organization takes action for the purpose of forcing an employer to cease doing business with another, it violates § 8(b)(4)(B) even if it has other purposes as well. N.L.R.B. v. Denver Building and Construction Trades Council, 341 U.S. 675, 689, 71 S. Ct. 943, 95 L. Ed. 1284 (1951); Local 74, United Brotherhood of Carpenters and Joiners v. N.L.R.B., 341 U.S. 707, 713, 95 L. Ed. 1309, 71 S. Ct. 966 (1951); N.L.R.B. v. New York Lithographers & Photo-Engravers Union, No. One-P, 385 F.2d 551, 554-56 (3d Cir. 1967).

The union argues that under the Supreme Court's decision in National Woodwork Manufacturers Ass'n v. N.L.R.B., 386 U.S. 612, 18 L. Ed. 2d 357, 87 S. Ct. 1250 (1967), the action which it took allegedly to enforce its work preservation clause*fn7 should be considered a protected activity under the statute, regardless of the impact on third parties such as Iodice. This argument misconstrues the holding in National Woodwork. In that case, the Court dealt with the refusal by a carpenters' union to hang prefitted doors, use of which was prohibited by its collective bargaining agreement with the contractors. The Court upheld a finding that this action "related solely to preservation of the traditional tasks of the jobsite carpenters," and therefore held it to be protected primary activity. 386 U.S. at 646; Id. at 648 (Memorandum of Harlan, J.); see Houston Insulation Contractors Ass'n v. N.L.R.B., 386 U.S. 664, 668, 18 L. Ed. 2d 389, 87 S. Ct. 1278 (1967). Here, however, the district court found that the union's action against the contractors was intended at least in part as a weapon in its dispute with Iodice. The intention to hurt Iodice by putting pressure on his customers brings the case squarely within the secondary boycott provisions of § 8(b)(4)(B).

III.

The plaintiffs argue that the district court erred in awarding Thornwood only $5,000 and Iodice only nominal damages of $100 for injury suffered as a result of the union's violations of § 303. The district court awarded damages of $5,000 to Thornwood based on the testimony of five customers as to the amount of business they normally did with Thornwood before the union pressured them into dealing elsewhere. 345 F. Supp. at 273. Further damages were denied because the court was dissatisfied with the proof Iodice submitted concerning the profits he earned individually and with Thornwood up to 1969, when his labor problems subsided.*fn8 345 F. Supp. at 271-73.

In actions under § 303, the courts have held that

"while the employer must prove that he has sustained some injury to his business or property, he need not detail the exact amount of damages suffered. It is sufficient if the evidence supports a just and reasonable approximation." Sheet Metal Workers, Local 223 v. Atlas Sheet Metal Co., 384 F.2d 101, 109 (5th Cir. 1967).

See Landstrom v. Chauffeurs, Teamsters, Warehousemen & Helpers, Local 65, 476 F.2d 1189, 1195 (2d Cir. 1973); Mason-Rust v. Laborers' International Union, Local 42, 435 F.2d 939, 945-46 (8th Cir. 1970); Flame Coal Co. v. United Mine Workers, 303 F.2d 39, 44 (6th Cir.), cert. denied, 371 U.S. 891, 9 L. Ed. 2d 125, 83 S. Ct. 186 (1962).

In light of these principles, we remand to the district court for a reassessment of plaintiffs' damages. The district court obviously found Iodice's testimonial and documentary evidence insufficient to establish precisely how much profit was lost from 1963*fn9 until 1969. However, the court did find that during that time the union had engaged in a largely successful campaign to keep business away from Iodice. 345 F. Supp. at 254-55. On remand the district court should "make a just and reasonable estimate of the damage [suffered by Iodice and Thornwood] based on relevant data," Bigelow v. RKO Radio Pictures, Inc., 327 U.S. 251, 264-65, 90 L. Ed. 652, 66 S. Ct. 574 (1946), including the testimony of Iodice and of customers, and evidence of profits realized by Pleasant Excavators after the unfair labor practices had ceased.

IV.

In addition to the actions by Iodice and Thornwood under § 303, Pelham and Bart Ruggiero sued under § 301 of the Labor Management Relations Act, 29 U.S.C. § 185 (1970), for breach of Pelham's labor contract. The district court held that Local 456 had violated the agreement by continuing its strike beyond December 20, when Calabrese rejected Pelham's offer and insisted that Tramonti be paid for the time he had missed. 345 F. Supp. at 267. Accordingly, the court granted Pelham $14,900 in damages. We disagree with the district court's determination that Local 456 was liable under § 301 for breach of contract.

The union contract to which Pelham and Local 456 agreed contained neither a no-strike nor an arbitration clause. 345 F. Supp. at 265. In such cases the courts will not imply an absolute contractual bar to strikes during the term of the agreement. See Local 174, Teamsters, Chauffeurs, Warehousemen & Helpers v. Lucas Flour Co., 369 U.S. 95, 105 n.14, 7 L. Ed. 2d 593, 82 S. Ct. 571 (1962).

Recognizing this fact, the district court nevertheless held that our "national labor policy" requires that strikes for "no legitimate labor purpose" be forbidden as breaches of contract, even absent no-strike or arbitration clauses. 345 F. Supp. at 266-67. In the view of the district judge, the union's strike was for a "legitimate labor purpose" as long as its demand for fringe benefit payments went unanswered. As soon as the union rejected Pelham's tender of payment as inadequate and added the demand that Tramonti's back wages be paid, the strike became illegitimate.

In our view, national labor policy does not permit the courts to outlaw a strike solely on the ground that it appears to be unreasonable. Unless the strike is itself an unfair labor practice under § 8(b) of the Act, see, e.g., United Mine Workers v. Osborne Mining Co., 279 F.2d 716 (6th Cir.), cert. denied, 364 U.S. 881, 5 L. Ed. 2d 103, 81 S. Ct. 169 (1960), or is prohibited by a no-strike or arbitration clause in a contract, see, e.g., Boys Markets, Inc. v. Retail Clerks Union, Local 770, 398 U.S. 235, 26 L. Ed. 2d 199, 90 S. Ct. 1583 (1970); Local 174, Teamsters, Chauffeurs, Warehousemen & Helpers v. Lucas Flour Co., supra, it remains a legitimate economic tool which labor organizations may use as they see fit. Cf. § 13 of the Labor Management Relations Act, 29 U.S.C. § 163 (1970). We therefore hold that the continuation of the strike beyond December 20 did not give rise to a cause of action under § 301.

V.

After trial plaintiffs amended their complaint to allege that the union's interference with Iodice's customers not only violated § 303 of the LMRA but also constituted a tortious interference with contractual relations, in violation of New York's common law. 345 F. Supp. at 259. The district court granted leave to amend but then dismissed the cause of action on the merits. Id. at 274. We affirm the dismissal.

In Local 20, Teamsters, Chauffeurs & Helpers Union v. Morton, 377 U.S. 252, 12 L. Ed. 2d 280, 84 S. Ct. 1253 (1964), the Supreme Court held that "state law has been displaced by § 303 in private damage actions based on peaceful union secondary activities . . .." 377 U.S. at 261. Since the district court in the present case found no evidence of violence, 345 F. Supp. at 264-65, the plaintiffs are entitled to neither compensatory nor punitive damages under state law.*fn10 See United Mine Workers v. Gibbs, 383 U.S. 715, 721, 729-30, 16 L. Ed. 2d 218, 86 S. Ct. 1130 (1966).*fn11

VI.

In their amended complaint, plaintiffs also alleged that Local 456 violated § 1 of the Sherman Act, 15 U.S.C. § 1 (1970), by conspiring with a non-labor group, the employers association, to restrain trade in the Westchester County construction industry. They claimed that the conspiracy encompassed the union's practices of requiring non-association employers to pay the same wages as the association was paying, fining employers for hiring non -union labor, and "featherbedding." The district court dismissed the antitrust cause of action, 345 F. Supp. at 274, and we affirm.

Union activity of the type complained of here does not lose its exemption from the antitrust laws*fn12 unless it is part of a conspiracy or combination between a union and a non-labor group. See United Mine Workers v. Pennington, 381 U.S. 657, 661-62, 14 L. Ed. 2d 626, 85 S. Ct. 1585 (1965); United States v. Hutcheson, 312 U.S. 219, 232, 85 L. Ed. 788, 61 S. Ct. 463 (1941). The district court found that there was insufficient evidence of any such conspiracy between Local 456 and the employers association. 345 F. Supp. at 269. We therefore hold that Local 456 did not violate the antitrust laws.

The decision of the district court as to the cause of action under § 301 is reversed. The decision of the district court as to the cause of action under § 303 is affirmed but the case is remanded for a reassessment of damages in a manner consistent with this opinion. In all other respects, the decision of the district court is affirmed.


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