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Consolidated Express Inc. v. New York Shipping Association Inc.

decided as amended may 18 1979.: April 16, 1979.



Before Seitz, Chief Judge, and Gibbons and Weis, Circuit Judges.

Author: Gibbons


We here review an order denying plaintiffs' motion for partial summary judgment on issues of liability in a suit pleading causes of action under § 303 of the Labor Management Relations Act (LMRA), 29 U.S.C. § 187, and § 4 of the Clayton Act, 15 U.S.C. § 15. The order is before us on an interlocutory appeal pursuant to 28 U.S.C. § 1292(b). The district court, 452 F. Supp. 1024, identified four controlling questions of law which in its view were worthy of interlocutory review, and a panel of this court granted leave to appeal. Before this court the parties have addressed those questions as well as other considerations which are urged in support of and in opposition to the district court's ruling. We reverse the court's order denying summary judgment on the § 303(b) claim. Because we conclude that material issues of fact may remain regarding the availability of the non-statutory labor exemption to the antitrust laws we affirm the denial of summary judgment on the antitrust claim.


A. The Parties and their Businesses

The plaintiffs are Consolidated Express, Inc. (Conex) and Twin Express, Inc. (Twin). They are non-vessel owning common carriers engaged in the business of consolidating less than container load (LCL) or less than trailer load (LTL) cargo for shipment between Puerto Rico and the Port of New York (the Port). At their off-pier facilities, they pack the shipments of several customers into large containers which are then trucked to pierside facilities and loaded on board ship. The defendant New York Shipping Association (NYSA) is an association of employers who engage in various businesses related to the passage of freight through the Port. On behalf of its members NYSA conducts collective bargaining negotiations and enters into collective bargaining agreements with various labor organizations, including the defendant International Longshoremen's Association, AFL-CIO (ILA), a labor organization representing longshoremen in the Port. Defendants International Terminal Operating Co., Inc., John M. McGrath Corp., Pittston Stevedoring Corp., United Terminals Corp., and Universal Maritime Services Corp. (the stevedores) are members of NYSA and employers of ILA longshoremen. They provide stevedoring services to vessels in the Port. Defendants Sea-Land Service, Inc. and Seatrain Lines, Inc. (the vessel owners) are operators of vessels engaged in common carriage by water between the Port and Puerto Rico. Their vessels are designed for the accommodation of large containers. As a part of their business they furnish shippers with containers and trailers for use on board their ships, as well as terminal facilities. They also provide stevedoring services for cargo shipped on their vessels, and thus, like the stevedores, employ ILA longshoremen.

B. Pre-litigation History

Until shortly after World War II most dry cargo was crated by the shipper, delivered to the pier by rail or truck, and loaded into a vessel piece-by-piece by longshoremen. That method of cargo handling has now generally been replaced by the use of vessels specially designed to accommodate mammoth containers. The cargo of large volume shippers may fill one or more containers. That of lower volume shippers is consolidated with the cargo of others in a single container. Many of these containers, when removed from the vessel, serve as semi-trailers, and virtually all are readily shipped by truck. Thus they can be loaded or unloaded ("stuffed" or "stripped" in longshoreman parlance) at sites remote from the pier. This innovation has increased productivity in the movement of cargo by water, but has produced a decline in the demand for longshoreman labor.

When in 1958 ILA struck the members of NYSA, a central issue was the growing use of containers on the docks. The strike was not, however, successful in prohibiting their use, and in the ILA-NYSA contract adopted in 1959 ILA conceded that "any employer shall have the right to use any and all types of containers without restrictions." In the next decade fully containerized ships were introduced, and dockside work opportunities for ILA members declined still further. These developments led ILA to negotiate with NYSA, as a part of its 1969 collective bargaining agreement, the Rules on Containers (Rules). The Rules dealt specifically with the consolidation of LCL and LTL cargo. NYSA agreed that all consolidated LCL and LTL cargo lots originating from or to be shipped to a point within fifty miles of the dock would be stripped by longshoremen at dockside. Outbound cargo was to be restuffed into a container, while inbound cargo was to be left on the pier for pickup by the consignees. The Rules provided for a penalty against the employer of $250 for every such container which passed through the dockside without being stripped and stuffed. In 1970 the penalty was increased to $1000 per violation.

Shortly after the 1969 Rules became effective Intercontinental Container Transportation Corp. (ICTC), a consolidator with a business similar to that of Conex and Twin, brought an action in the Southern District of New York seeking injunctive relief and damages from NYSA and ILA on the ground that the Rules violated the Sherman Act. At the same time ICTC filed unfair labor practice charges before the NLRB. In the antitrust action, then District Judge Mansfield granted a preliminary injunction prohibiting the defendants from refusing to handle containers stuffed or stripped by the plaintiff. On appeal from that interlocutory order the Second Circuit reversed, holding that there was little likelihood of ultimate success on the merits, because the collective bargaining agreement of which the Rules were a part probably fell within the labor exemption to the antitrust laws. Intercontinental Container Transp. Corp. v. New York Shipping Ass'n, 426 F.2d 884 (2d Cir. 1970) (ICTC). In ICTC's unfair labor practice case, the Regional Director refused to issue a complaint on the ground that the Rules on Containers were a valid work preservation agreement, and the General Counsel denied the appeal. Joint App. 303a-305a.

The Rules on Containers were carried forward in the 1971-1974 collective bargaining agreement negotiated between ILA and the Council of North Atlantic Shipping Associations (CONASA), an employer bargaining unit composed of NYSA and employer associations in five other North Atlantic ports. But for reasons that are in dispute, the Rules were not consistently enforced. Conex and Twin were therefore able to continue in the business of consolidating LCL and LTL lots, using containers furnished by the vessel owners. Access to such containers was essential to the business of the consolidators, since the vessel owners' ships could carry only specially designed containers, and since prior to October, 1974, Sea-Land and Seatrain were two of only three container carriers operating between the Port and Puerto Rico.*fn1

The failure to enforce the Rules led to attempts to improve their effectiveness. On January 25-29, 1973, representatives of CONASA, acting for the employers it represented, met with representatives of ILA in Dublin, Ireland. There those parties negotiated and executed Interpretive Bulletin No. 1, generally known as the Dublin Supplement. The Dublin Supplement established new mechanisms for the enforcement of the Rules against consolidators. It provided that off-pier consolidators operating within fifty miles of the Port were to be considered as operating in violation of the Rules. Consolidators could not avoid application of the Rules by relocating their facilities beyond the fifty mile limit, because the agreement contained a so-called "evasion" or "runaway shop" provision. The Supplement also provided for the establishment and circulation to all carriers and stevedores of a list of such violators, and vessel owners were to be fined $1000 for each container furnished to them. The Dublin Supplement was to be policed by a joint ILA-NYSA Container Committee.

In February, 1973, the vessel owners, using ILA labor, commenced stripping and restuffing outbound LCL and LTL containers which had already been stuffed by employees of Conex and Twin at their off-pier facilities and trucked to the pier for shipment to Puerto Rico. Beginning in March, 1973, the three vessel owners operating in the Puerto Rican trade refused to furnish Conex and Twin with empty containers. On April 13, 1973, NYSA and ILA issued a joint statement to NYSA members, naming fourteen consolidators, including Conex and Twin, as operating in violation of the Rules. The notice activated the provision in the Dublin Supplement requiring all NYSA members to refuse containers to the listed companies. These actions had the effect of terminating the plaintiffs' business of freight consolidation for the New York-Puerto Rico trade.

On June 1, 1973, Conex, faced with the destruction of its business, filed charges with the National Labor Relations Board (NLRB). It alleged that by agreeing to the Rules and Dublin Supplement NYSA and ILA had violated § 8(e)*fn2 of the Labor Management Relations Act (LMRA), and that by seeking to enforce that agreement ILA had violated § 8(b)(4)(ii)(B) of the Act.*fn3 Thereafter the General Counsel of the NLRB, acting pursuant to § 10(L ), of the Act, 28 U.S.C. § 160(L ), filed a complaint against ILA in the United States District Court for the District of New Jersey seeking preliminary injunctive relief pending final disposition of those charges by the Board. Judge Lacey conducted a hearing on the § 10(L ) application at which an extensive record was compiled respecting the Rules, the Dublin Supplement, and their effect upon the business of Conex. In that hearing the General Counsel contended that the Conex containers had not historically been stripped and restuffed at the docks by longshoremen, and thus that the activity of which Conex complained was secondary, without a work preservation justification, and in violation of §§ 8(b)(4)(ii)(B) and 8(e). ILA made the opposite contention, and testimony was presented on the issue so drawn. The district court concluded that the General Counsel's theory was substantial and not frivolous. It therefore enjoined enforcement of the Rules against Conex, the charging party. Balicer v. International Longshoremen's Ass'n, 364 F. Supp. 205 (D.N.J.), aff'd, 491 F.2d 748 (3d Cir. 1973). Following a separate hearing on substantially identical charges filed with the NLRB by Twin, the General Counsel later obtained a § 10(L ) injunction prohibiting enforcement of the Rules against it. Balicer v. International Longshoremen's Ass'n, 86 L.R.R.M. 2559 (D.N.J.1974).

Before the NLRB the Conex and Twin charges were consolidated for hearing. The parties stipulated that the record made before Judge Lacey in the § 10(L ) case, as supplemented by affidavits submitted by intervenor International Brotherhood of Teamsters, Local 807, which represents Conex employees, and by additional affidavits submitted by ILA and NYSA, would constitute the record for the unfair labor practice proceedings. On the basis of that record an Administrative Law Judge found that the Rules and Dublin Supplement, and the resulting boycott of Conex and Twin, were addressed to the labor relations of the NYSA employer-members with their own employees. He therefore concluded that the boycott involved protected primary activity. The NLRB disagreed. The Board rejected the argument that the agreement was a valid effort by ILA to preserve for its members work which they had historically performed. In the Board's eyes, the "work in controversy" was the stuffing and stripping work performed by LCL and LTL consolidators at their off-pier facilities, not loading and unloading of ships at dockside by longshoremen. Thus the Rules could not be justified as a work preservation agreement, valid under the Supreme Court's interpretation of § 8(e) in National Woodwork Manufacturers Ass'n v. NLRB, 386 U.S. 612, 87 S. Ct. 1250, 18 L. Ed. 2d 357 (1967). Moreover, even if ILA once had a valid claim to the work of stuffing and stripping containers, the Board concluded, that claim had been abandoned in the 1959 ILA-NYSA agreement authorizing the use of container vessels. It therefore held the agreement embodied in the Rules and Dublin Supplement to be a violation of § 8(e) because its object was to force NYSA members to cease doing business with the consolidators. The NLRB also held that ILA's actions in enforcing the agreement were unfair labor practices under § 8(b)(4)(ii)(B). It entered an appropriate cease and desist order on December 4, 1975. Consolidated Express, Inc., 221 N.L.R.B. No. 144 (1975).

NYSA and ILA petitioned for review to the United States Court of Appeals for the Second Circuit. The NLRB cross-petitioned for enforcement. Conex, Twin and Teamsters Local 807 intervened. The Second Circuit held that the Board's conclusion that the work in controversy was that historically performed by employees of the consolidators was supported by substantial evidence, and thus that its analysis of the § 8(b)(4) and § 8(e) issues was sound.*fn4 It therefore enforced the Board's order and denied the NYSA and ILA petitions for review. International Longshoremen's Ass'n v. NLRB, 537 F.2d 706 (2d Cir. 1976), cert. denied, 429 U.S. 1041, 97 S. Ct. 740, 50 L. Ed. 2d 753, Reh. denied, 430 U.S. 911, 97 S. Ct. 1187, 51 L. Ed. 2d 589 (1977). A petition for reconsideration and recall of mandate was denied by the Second Circuit on December 16, 1977. A subsequent petition to the NLRB to reopen the unfair labor practice hearing was denied on August 12, 1978.


Conex and Twin filed substantially identical complaints in the district court, and on April 22, 1977 the two actions were consolidated. In Count I the plaintiffs alleged that the defendants' enforcement of the Rules on Containers and Dublin Supplement constituted a group boycott of the plaintiffs that is Per se illegal under §§ 1 and 3 of the Sherman Act. 15 U.S.C. §§ 1, 3. They sought treble damages pursuant to § 4 of the Clayton Act, 15 U.S.C. § 15, for injury to their business or property resulting from that boycott. In Count III plaintiffs alleged that ILA committed unfair labor practices in violation of § 8(b)(4)(ii)(B) of the LMRA, that those violations injured plaintiffs in their business or property, and that ILA was liable for such damages under § 303(b) of the LMRA, 29 U.S.C. § 187(b).*fn5 A jury trial was demanded. Thereafter Conex and Twin moved for partial summary judgment as to liability on Counts I and III. They contended that the decision of the NLRB, enforced by the Second Circuit, established all facts material to liability issues, and that the defendants were collaterally estopped from attempting to relitigate those issues. Thus, they urged, only the amount of damages remained for trial.

In response to that motion the defendants contended that the judgment in the Second Circuit should have no issue-preclusion effect; that the activities complained of were within the protection of the non-statutory labor exemption to the antitrust laws; that if non-exempt, those activities should be tested by the rule of reason; that there were material issues of fact as to certain defenses; and that the § 303(b) claim was time barred.

The district court, although it accepted the Conex-Twin contentions in several respects, nevertheless denied partial summary judgment on both counts. Recognizing, however, that the order involved controlling questions of law as to which there is a substantial ground for difference of opinion, and that if those questions were decided in plaintiffs' favor partial summary judgment on one or both of the counts in issue might have been proper, the court on February 22, 1978 amended the opinion to include the formal statement required by 28 U.S.C. § 1292(b). The plaintiffs filed a timely notice of appeal, and this court permitted it.


The parties disagree as to what legal issues may be considered on this appeal. Both sides agree that the four questions of law certified by the district court are properly before us.*fn6

In supporting their motion to strike portions of the appellees' briefs, appellants suggest that since the defendants prevailed in the district court on the motion for summary judgment they may not raise issues of law decided adversely to them, or not decided at all. Absent a cross-appeal, which is unavailable to a prevailing party, they contend that these issues are not properly before this court. The appellees in turn argue that because the district court refused to identify as controlling questions several equitable defenses, those defenses may not be considered in a § 1292(b) appeal. Neither view is correct. In Katz v. Carte Blanche Corp., 496 F.2d 747 (3d Cir.) (en banc), Cert. denied, 419 U.S. 885, 95 S. Ct. 152, 42 L. Ed. 2d 125 (1974), the court stated the rule governing § 1292(b) interlocutory appeals:

(Once) leave to appeal has been granted the court of appeals is not restricted to a decision of the question of law which in the district judge's view was controlling.

496 F.2d at 754. Accord, Link v. Mercedes-Benz of North America, Inc., 550 F.2d 860, 865 n. 2 (3d Cir.) (Seitz, C. J., concurring), Cert. denied, 431 U.S. 933, 97 S. Ct. 2641, 53 L. Ed. 2d 250 (1977); Johnson v. Alldredge, 488 F.2d 820 (3d Cir. 1973), cert. denied, 419 U.S. 882, 95 S. Ct. 148, 42 L. Ed. 2d 122 (1974). This rule accords with fundamental principles of appellate review. An appeal pursuant to § 1292(b), like any other, is taken from the order of the district court, not from its opinion, and the court is "called upon not to answer the question certified but to decide an appeal." Johnson v. Alldredge, supra, 488 F.2d at 823. When an order or judgment is before a reviewing court, "(t)he prevailing party may . . . assert in a reviewing court any ground in support of his judgment, whether or not that ground was relied upon or even considered by the trial court." Dandridge v. Williams, 397 U.S. 471, 475 n.6, 90 S. Ct. 1153, 1156 n. 6, 25 L. Ed. 2d 491 (1970); Mills v. Electric Auto-Lite Co., 396 U.S. 375, 381 n.4, 90 S. Ct. 616, 24 L. Ed. 2d 593 (1970); See Note, Federal Jurisdiction and Procedure Review of Errors at the Instance of a Non-Appealing Party, 51 Harv.L.Rev. 1058, 1059-60 (1938).

In this case each argument advanced by the appellees would, if accepted, support the refusal to enter summary judgment of liability in favor of Conex and Twin on one or both counts. If, on the other hand, there are no genuine issues of material fact remaining to be tried, and the district court committed the legal errors of which appellants complain, we may correct those errors, and direct the entry of such a judgment. We could, of course, decline to consider all of the legal issues tendered once we found one which would sustain the denial of summary judgment. But considerations of judicial economy suggest that when a § 1292(b) appeal is taken from the denial of summary judgment an appellate court should ordinarily consider all issues "properly put in dispute" bearing upon whether entry of judgment was appropriate. Johnson v. Alldredge, supra, 488 F.2d at 823. Thus the several motions to strike portions of the parties' briefs will be denied, and we will consider all grounds advanced in support of the grant of summary judgment and all grounds suggested for sustaining its denial.


Under § 303(a) of the National Labor Relations Act, 29 U.S.C. § 187(a), it is unlawful for a labor organization to engage in any activity or conduct defined as an unfair labor practice in § 8(b)(4) of the Act. Persons injured in their business or property by such a violation may bring suit for money damages against the labor organization which committed it.*fn7 Conex and Twin pointed out that the NLRB found that ILA had committed § 8(b)(4) unfair labor practices, and that the Second Circuit affirmed that finding. That determination, they suggest, is binding here, leaving nothing to be litigated except the determination of damages. The appellees resist this suggestion for reasons we now address.

A. Collateral Estoppel

The district court held that the NLRB's finding that the ILA had committed a § 8(b)(4) violation, made in a proceeding to which both ILA and the plaintiffs were parties, collaterally estops it from litigating its liability for damages on the § 303(b) count. ILA contends this holding was error.

First, ILA urges that the finding by the NLRB, an administrative agency, that the boycott complained of was illegal, is not entitled to res judicata effect. The cases relied upon in support of this contention*fn8 were, however, decided before the Supreme Court's decision in United States v. Utah Construction & Mining Co., 384 U.S. 394, 422, 86 S. Ct. 1545, 1560, 16 L. Ed. 2d 642, (1966), which stated that:

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.

Since Utah Construction courts in several circuits have held that prior NLRB unfair labor practice determinations were controlling on the issue of liability, as to both facts and law, in a subsequent § 303(b) damage action. E. g., International Wire v. Local 38, IBEW, 475 F.2d 1078 (6th Cir.), cert. denied, 414 U.S. 867, 94 S. Ct. 63, 38 L. Ed. 2d 86 (1973) (res judicata against charging party); Texaco, Inc. v. Operative Plasterers & Cement Masons, 472 F.2d 594 (5th Cir.), Cert. denied, 414 U.S. 1091, 94 S. Ct. 721, 38 L. Ed. 2d 548 (1973) (res judicata against charged party); Painters District Council 38 v. Edgewood Contracting Co., 416 F.2d 1081 (5th Cir. 1969); Eazor Express, Inc. v. General Teamsters Local 326, 388 F. Supp. 1264, 1266-67 (D.Del.1975). These holdings are undoubtedly sound. The NLRB has been designated by Congress as the tribunal of choice for the adjudication of unfair labor practices, and the doctrine of primary jurisdiction is a judicial recognition of the importance of that designation. See, e.g., Meat Cutters v. Jewel Tea Co., 381 U.S. 676, 684-85, 85 S. Ct. 1596, 14 L. Ed. 2d 640 (1965). Board decisions are subject to judicial review on all issues of law. Factual issues are reviewed by a substantial evidence standard, one at least as rigorous as that applied in reviewing non-jury judicial determinations, Fed.R.Civ.P. 52(a), and a good deal more rigorous than is applied to jury verdicts. When an NLRB decision subject to such judicial review has become final it is not readily apparent that it should have any less issue preclusion effect than would judgments resulting from non-jury or jury trials.

ILA next argues that even assuming applicability of collateral estoppel to issues of fact, the issues in this case are primarily legal, and on legal issues less deference to a prior decision is appropriate. The § 303(b) cases referred to above, giving res judicata effect to NLRB unfair labor practice judgments, recognize no such distinction. Moreover, both the Supreme Court and this circuit have rejected that approach. In Commissioner of Internal Revenue v. Sunnen, 333 U.S. 591, 601-02, 68 S. Ct. 715, 92 L. Ed. 898 (1948), the Court made clear that issue preclusion applies both as to issues of fact and as to issues of law, so long as the same transactions and legal principles are involved and there has been no subsequent change in the governing law. See Vanderveer v. Erie Malleable Iron Co., 238 F.2d 510, 514-15 (3d Cir. 1956), Cert. denied, 353 U.S. 937, 77 S. Ct. 815, 1 L. Ed. 2d 760 (1957). In Scooper Dooper, Inc. v. Kraftco Corp., 494 F.2d 840, 844-45 & n.10 (3d Cir. 1974), which concerned the collateral estoppel effect of a prior judicial determination that a collective bargaining agreement fell within the labor exemption to the antitrust laws, we expressly recognized that a prior determination of a mixed question of fact and law precluded relitigation of that issue, provided that the party to be estopped had "a full and fair opportunity" to present his claim in the prior litigation. Id. at 844.*fn9

It is a settled principle of administrative law that the courts give considerable deference to the construction of statutes by those agencies charged with the primary responsibility for their enforcement. E.g., Red Lion Broadcasting Co. v. FCC, 395 U.S. 367, 381, 89 S. Ct. 1794, 23 L. Ed. 2d 371 (1969). Thus it is arguable that the scope of judicial review of agency decisions on questions of law is narrower than would be appellate review of court decisions on legal issues. But that difference does not suggest that res judicata on legal issues should be less applicable to agency judgments, for the rule of deference to agency interpretations of governing statutes is binding not only on a court reviewing an agency decision, but also on a court deciding a legal issue in the first instance. E.g., Zemel v. Rusk, 381 U.S. 1, 11-12, 85 S. Ct. 1271, 14 L. Ed. 2d 179 (1965). Moreover, in this case the decision of the NLRB was taken to the Court of Appeals for the Second Circuit which passed upon the legal issues involved.

Finally, ILA suggests that for two reasons it did not receive a "full and fair opportunity" to litigate before the NLRB. First, it contends that the Board's procedures provided inadequate opportunity for discovery against Conex and Twin. Had ILA been able to avail itself of the discovery provisions of the Federal Rules of Civil Procedure, it argues, it might have been able to establish that Conex and Twin had developed their "tradition" of off-pier consolidation by fraudulent avoidance of the 1969 Rules on Containers, and had such evidence been available it might well have led to a different result before the Board.

As a general rule, recognition of a judgment in a prior action between the same parties should be denied only upon a compelling showing of unfairness. See Restatement (Second) of Judgments (Tentative Draft No. 1, 1973) § 68.1 and Comment f. This is particularly true where, as here, the parties litigant were represented by expert lawyers who had every reason to expect that a defeat in the first action might lead to a second suit founded on the judgment. The Supreme Court has suggested, however, that in an appropriate case a district court may deny collateral estoppel effect on the ground of unfairness, even to a judgment in a prior action between the same parties, if there are "procedural opportunities available to the (defendant) that were unavailable in the first action of a kind that might be likely to cause a different result." Parklane Hosiery Co. v. Shore, 439 U.S. 322, 331, 99 S. Ct. 645, 652 & n. 15, 58 L. Ed. 2d 552 (1979). The court included discovery among the procedural devices the unavailability of which in the first action may militate against application of estoppel by judgment. Id. at n.15. On the record considered by the district court, however, ILA has made no showing of unfairness. It stipulated before the NLRB that the record in Balicer v. ILA, 364 F. Supp. 205 (D.N.J.), aff'd, 491 F.2d 748 (3d Cir.1973), together with the supplemental affidavits submitted, sufficed for the decision of the unfair labor practice charges. When it made that stipulation ILA knew that Mr. Jacobs, a principal witness for the charging parties in Balicer, had previously testified before the Federal Maritime Commission regarding a pattern of payoffs on the docks which facilitated evasion of the 1969 Rules. Thus the parties before the Board were undoubtedly on notice of the likely existence of the same evidence they seek to introduce in this proceeding. Nevertheless, ILA stipulated to a more limited record, bypassing the opportunity to resort to the not insubstantial provisions for production and examination of witnesses and documents available in NLRB cases. See 29 C.F.R. §§ 102.30, 102.31 (1977). Instead of probing the transactions described in the Jacobs testimony, ILA stipulated that "there (were) no material issues of credibility in the record before the (Board) for resolution requiring a formal hearing," and assured the ALJ that the unfair labor practice charges "(could) be fully resolved on the basis of the exhibits and transcripts of testimony entered in the (Balicer case)." Joint App. 209-10. Thus whatever the faults of the discovery procedures available before the Board, ILA's failure to discover additional evidence was not the consequence of those procedures, but of its own decision not to seek or present further evidence in the NLRB proceeding. It cannot rely on procedural inadequacies in the NLRB case which in no way affected its outcome.

ILA relies on Hudson River Fishermen's Ass'n v. FPC, 498 F.2d 827 (2d Cir. 1974), for the proposition that collateral estoppel should not be applied where relevant evidence has come to light that could not have been discovered in the prior proceeding by the exercise of due diligence. That case involved an application to reopen a licensing proceeding before the Federal Power Commission in order to correct an error in a technical report which had been relied upon in that proceeding, which error could not have been discovered by the exercise of due diligence. The Second Circuit, reviewing the FPC's refusal to reopen the hearing, construed Section 313(b) of the Federal Power Act, 16 U.S.C. § 825L (b), as permitting reopening, and remanded for a hearing. Id. at 833-34. Assuming that a principle similar to that announced in the Hudson River case also applies in NLRB proceedings, this is not the proper forum for its application. For as that case suggests, if ILA has found new evidence, its appropriate remedy is to seek to reopen the unfair labor practice case either before the NLRB or the Second Circuit. We note that such attempts have been made and rejected.*fn10

Second, ILA argues that collateral estoppel is unfair because the Board's resolution of the unfair labor practice issue represented an abrupt and unanticipated change in the applicable legal doctrine. Prior to 1975, they argue, there were indications that the Rules on Containers were legal under both the antitrust laws and the Labor Act.*fn11 ILA cites no authority for the proposition that collateral estoppel effect may be denied to a judgment because it reflects a change in the prior applicable law, and in the § 303 context such a rule appears unwarranted. A primary purpose of the § 303(b) remedy is to make the plaintiff whole for injury done to his business in violation of federal labor law. Teamsters Local 20 v. Morton, 377 U.S. 252, 260, 84 S. Ct. 1253, 12 L. Ed. 2d 280 (1964). To allow the union a defense of belief in legality in § 303 cases would cast the burden of such losses upon innocent parties in direct contravention of that policy. While the unforeseeability of an unfair labor practice judgment may reduce the deterrent value of the § 303 sanction, Congress's essential compensatory purpose remains, and should not be thwarted. Even if such a rule were recognized it might not help ILA here, for the prior actions upon which it claims to have relied never resulted in a final determination that the Rules on Containers were legal. Moreover, both the ICTC cases were decided prior to the adoption and enforcement of the Dublin Supplement, a development which might well have changed the earlier tribunals' views of the problem. The claim of an unanticipated change in the law does not persuade us that the judgment in the NLRB case should not bind ILA.

B. The Statute of Limitations

ILA pleads that the § 303(b) claim is time-barred by the one year Puerto Rico statute of limitations, P.R. Laws Ann. tit. 31, § 5298(2), because Conex and Twin are incorporated in that Commonwealth and each conducts one end of its freight consolidator business there. The district court rejected that contention, holding that the consolidators' § 303(b) claim was governed by New Jersey's six year statute of limitations for actions in contract, N.J.Stat.Ann. § 2A:24-1 (West Supp. 1978), and thus was not time-barred. No federal statute imposes an express limitation upon actions brought under § 303(b) of the Labor Management Relations Act. The parties agree that in such a vacuum a federal court will apply the law of the state in which it sits. See, e.g., United Auto Workers v. Hoosier Cardinal Corp., 383 U.S. 696, 86 S. Ct. 1107, 16 L. Ed. 2d 192 (1966); Cope v. Anderson, 331 U.S. 461, 67 S. Ct. 1340, 91 L. Ed. 1602 (1947). At this point they part company.

ILA argues that a federal court sitting in New Jersey on a § 303(b) case would look not to the most closely analogous New Jersey statute of limitations, but rather to New Jersey's choice of law rules. Under those rules, it suggests, New Jersey would apply not its own six year statute of limitations, but that of Puerto Rico. In advancing this argument ILA relies on the Rules of Decision Act, 28 U.S.C. § 1652, as interpreted in Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S. Ct. 1020, 85 L. Ed. 1477 (1941), and Guaranty Trust Co. v. York, 326 U.S. 99, 65 S. Ct. 1464, 89 L. Ed. 2079 (1945). That statute and those authorities, however, deal with the law governing causes of action arising under state law. When, as in § 303(b) cases, the cause of action arises under federal law, they have no applicability. Which state statute is to be borrowed and how it is to be applied to a cause of action based on federal law are federal law questions, and are determined by federal statutory policy. Holmberg v. Armbrecht, 327 U.S. 392, 395, 66 S. Ct. 582, 90 L. Ed. 743 (1946). Thus state choice of law rules can govern the choice of a statute of limitations for a § 303(b) claim only if reference to those rules furthers substantive federal policy. Moviecolor, Ltd. v. Eastman Kodak Co., 288 F.2d 80, 83-84 (2d Cir.), Cert. denied, 368 U.S. 821, 82 S. Ct. 39, 7 L. Ed. 2d 26 (1961).

This principle has been recognized in § 303(b) cases. In United Mine Workers v. Railing, 401 U.S. 486, 91 S. Ct. 991, 28 L. Ed. 2d 272 (1970), a case presenting, as does this, both a § 303(b) claim and an antitrust claim against a labor organization, the Court remanded to the Fourth Circuit so that it could consider whether the state statute of limitations applicable to the § 303(b) claim should be construed to apply, with respect to accrual of the cause of action, in the same manner as 15 U.S.C. § 15b had been construed in Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 91 S. Ct. 795, 28 L. Ed. 2d 77 (1970), as applying to an antitrust claim. On remand Judge Craven recognized that both § 303(b) and § 4 of the Clayton Act provided for recovery for injury to business or property, and concluded that the state statute of limitations governing the § 303(b) claim should be interpreted in the same manner as 15 U.S.C. § 15b. Indeed he went further, suggesting to the district court that on remand it should consider whether to read into the state statute a tolling provision similar to 15 U.S.C. § 16(b) (which tolls § 15b for private antitrust actions during the pendency of government enforcement actions), to toll the time bar against the § 303(b) count during the pendency of unfair labor practice proceedings before the NLRB. Railing v. United Mine Workers, 445 F.2d 353 (4th Cir. 1971); Cf. Kreshtool v. International Longshoremen's Ass'n, 242 F. Supp. 551, 554 (D.Del.1965). See also Kinty v. United Mine Workers, 544 F.2d 706, 723 (4th Cir. 1976), Cert. denied, 429 U.S. 1093, 97 S. Ct. 1107, 51 L. Ed. 2d ...

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