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72D CONGRESS 1st Session

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SENATE

(REPT. 163 PART 2

TO DEFINE AND LIMIT THE JURISDICTION OF COURTS SITTING IN EQUITY

FEBRUARY 16 (calendar day, FEBRUARY 5), 1932.-Ordered to be printed

Mr. HEBERT, from the Committee on the Judiciary, submitted the

following

MINORITY VIEWS

[To accompany S. 935]

The Committee on the Judiciary, to whom was referred the bill (S. 935) to amend the Judicial Code and to define and limit the jurisdiction of courts sitting in equity, and for other purposes, having considered the same, reported favorably thereon on the 4th day of February, 1932. (Rept. No. 163.)

The undersigned, constituting a minority of the Judiciary Committee, while in harmony with the views of the majority in respect to some of the provisions of the bill, are not in accord with all of the recommendations made by the majority, and beg leave to submit the following observations:

TEXT OF SUBSTITUTE

[S. 935, Seventy-second Congress, first session]

A BILL To amend the Judicial Code and to define and limit the jurisdiction of courts sitting in equity, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That no court of the United States, as herein defined, shall have jurisdiction to issue any restraining order or temporary or permanent injunction in a case involving or growing out of a labor dispute, except in strict conformity with the provisions of this act; nor shall any such restraining order or temporary or permanent injunction be issued contrary to the public policy declared in this act.

SEC. 2. In the interpretation of this act and in determining the jurisdiction and authority of the courts of the United States, as such jurisdiction and authority are herein defined and limited, the public policy of the United States is hereby declared as follows:

Whereas under prevailing economic conditions, developed with the aid of governmental authority for owners of property to organize in the corporate and other forms of ownership association, the individual unorganized worker is commonly helpless to exercise actual liberty of contract and to protect his

freedom of labor, and thereby to obtain acceptable terms and conditions of employment, [wherefore] wherefore, though he should be free to decline to associate with his fellows, it is necessary that he have full freedom of association, selforganization, and designation of representatives of his own choosing, to negotiate the terms and conditions of his employment, and that he shall be free from the interference, restraint, or coercion of employers of labor, or their agents, in the designation of such representatives or in self-organization or in other concerted activities for the purpose of collective bargaining or other mutual aid or protection; therefore, the following definitions of, and limitations upon, the jurisdiction and authority of the courts of the United States are hereby enacted.

SEC. 3. Any undertaking or promise, such as is described in this section, or any other undertaking or promise in conflict with the public policy declared in section 2 of this act, is hereby declared to be contrary to the public policy of the United States, shall not be enforceable in any court of the United States and shall not afford any basis for the granting of legal or equitable relief by any such court [of the United States], including specifically the following:

Every undertaking or promise hereafter made, whether written or oral, express or implied, constituting or contained in any contract or agreement of hiring or employment between any individual, firm, company, association, or corporation, and any employee or prospective employee of the same, whereby

(a) Either party to such contract or agreement undertakes or promises not to join, become, or remain a member of any labor organization or of any employer organization; or

(b) Either party to such contract or agreement undertakes or promises that he will withdraw from an employment relation in the event that he joins, becomes, or remains a member of any labor organization or of any employer organization. SEC. 4. No court of the United States shall have jurisdiction to issue any restraining order or temporary or permanent injunction in [cases] any case involving or growing out of any labor dispute to prohibit any person or persons participating or interested in such dispute (as these terms are herein defined) from doing, whether singly or in concert, any of the following acts:

(a) Ceasing or refusing to perform any work or to remain in any relation of employment;

(b) Becoming or remaining a member of any labor organization or of any employer organization, regardless of any such undertaking or promise as is described in section 3 of this act;

(c) Paying or giving to, or withholding from, any person participating or interested in such labor dispute, any strike or unemployment benefits or insurance, or other moneys or things of value;

(d) By all lawful means aiding any person participating or interested in any labor dispute who is being proceeded against in, or is prosecuting, any action or suit in any court of the United States or of any State;

(e) Giving publicity to the existence of, or the facts involved in, any labor dispute, whether by advertising, speaking, patrolling, or by any other method not involving fraud or violence;

(f) Assembling peaceably to act or to organize to act in promotion of their interests in a labor dispute;

(g) Advising or notifying any person of an intention to do any of the acts heretofore specified;

(h) Agreeing with other persons to do or not to do any of the acts heretofore specified; and

(i) Advising, urging, or otherwise causing or inducing without fraud or violence the acts heretofore specified, regardless of any such undertaking or promise as is described in section 3 of this act.

SEC. 5. No court of the United States shall have jurisdiction to issue a restraining order or temporary or permanent injunction upon the ground that any of the persons participating or interested in a labor dispute constitute or are engaged in an unlawful combination or conspiracy because of the doing in concert of the acts enumerated in section 4 of this act.

SEC. 6. No officer or member of any association or organization, and no association or organization participating or interested in a labor dispute, shall be held responsible or liable in any court of the United States for the unlawful acts of individual officers, members, or agents, except upon clear proof of actual participation in, or actual authorization of, such acts, or of ratification of such acts after actual knowledge thereof.

SEC. 7. No court of the United States shall have jurisdiction to issue a temporary or permanent injunction in any case involving or growing out of a labor

dispute, as herein defined, except after hearing the testimony of witnesses in open court (with opportunity for cross-examination) in support of the allegations of a complaint made under oath, and testimony in opposition thereto, if offered, and except after findings of fact by the court, to the effect

(a) That unlawful acts have been committed and will be continued unless restrained;

(b) That substantial and irreparable injury to complainant's property will follow;

(c) That as to each item of relief granted greater injury will be inflicted upon complainant by the denial of relief than will be inflicted upon defendants by the granting of relief;

(d) That complainant has no adequate remedy at law; and

(e) That the public officers charged with the duty to protect complainant's property are unable or unwilling to furnish adequate protection.

Such hearing shall be held after due and personal notice thereof has been given, in such manner as the court shall direct, to all known persons against whom relief is sought, and also to those public officers charged with the duty to protect complainant's property: Provided, however, That if a complainant shall also allege that, unless a temporary restraining order shall be issued without notice, a substantial and irreparable injury to complainant's property will be unavoidable, such a temporary restraining order may be issued upon testimony under oath, sufficient, if sustained, to justify the court in issuing a temporary injunction upon a hearing after notice. Such a temporary restraining order shall be effective for no longer than five days, and shall become void at the expiration of said five days. No temporary restraining order or temporary injunction shall be issued except on condition that complainant shall first file an undertaking with adequate security sufficient to recompense those enjoined for any loss, expense, or damage caused by the improvident or erroneous issuance of such order or injunction, including all reasonable costs (together with a reasonable attorney's fee) and expense of defense against the order or against the granting of any injunctive relief sought in the same proceeding and subsequently denied by the court.

The undertaking herein mentioned shall be understood to signify an agreement entered into by the complainant and the surety upon which a decree may be rendered in the same suit or proceeding against said complainant and surety, the said complainant and surety submitting themselves to the jurisdiction of the court for that purpose. But nothing herein contained shall deprive any party having a claim or cause of action under or upon such undertaking from electing to pursue his ordinary remedy by suit at law or in equity.

SEC. 8. No restraining order or injunctive relief shall be granted to any complainant who has failed to comply with any obligation imposed by law which is involved in the labor dispute in question, or who has failed to make every reasonable effort to settle such dispute either by negotiation or with the aid of any available governmental machinery of mediation or voluntary arbitration.

SEC. 9. No restraining order or temporary or permanent injunction shall be granted in a case involving or growing out of a labor dispute, except on the basis of findings of fact made and filed by the court in the record of the case prior to the issuance of such restraining order or injunction; and every restraining order or injunction granted in a case involving or growing out of a labor dispute shall include only a prohibition of such specific act or acts as may be expressly complained of in the bill of complaint or petition filed in such case and as shall be expressly included in said findings of fact made and filed by the court as provided herein.

SEC. 10. Whenever any court of the United States shall issue or deny any temporary injunction in a case involving or growing out of a labor dispute, the court shall, upon the request of any party to the proceedings and on his filing the usual bond for costs, forthwith certify as in ordinary cases the [entire] record of the [case, including a transcript of the evidence taken,] case to the circuit court of appeals for its review. Upon the filing of such record in the circuit court of appeals, the appeal shall be heard and the temporary injunctive order affirmed, modified, or set aside with the greatest possible expedition, giving the proceeding precedence over all other matters except older matters of the same character. SEC. 11. In all cases [where] in which a person shall be charged with [indirect criminal] contempt for violation of a restraining order or injunction issued by a court of the United States (as herein defined), the accused shall enjoy the right to a speedy and public trial by an impartial jury of the State and district wherein the contempt shall have been committed: Provided, That this [requirement] right shall not [be construed to] apply to contempts committed in the presence

of the court or so near thereto as to interfere directly with the administration of justice or to apply to the misbehavior, misconduct, or disobedience of any officer of the court in respect to the writs, orders, or process of the court.

SEC. 12. The defendant in any proceeding for contempt of court [is authorized to] may file with the court a demand for the retirement of the judge sitting in the proceeding, if the contempt arises from an attack upon the character or conduct of such judge and if the [attack occurred otherwise than in open court] contempt occurred elsewhere than in the presence of the court or so near thereto as to interfere directly with the administration of justice. Upon the filing of any such demand the judge shall thereupon proceed no further, but another judge shall be designated in the same manner as [provided in case of the approval of an affidavit of personal bias or prejudice under section 21 of the Judicial Code] is provided by law. demand shall be filed prior to the hearing in the contempt proceeding. SEC. 13. When used in this act, and for the purposes of this act

The

(a) A case shall be held to involve or to grow out of a labor dispute when the case involves persons who are engaged in the same industry, trade, craft, or occupation; or have direct or indirect interests therein; or who are employees of the same employer; or who are members of the same or an affiliated organization of employers or employees; whether such dispute is (1) between one or more employers or associations of employers and one or more employees or associations of employees; (2) between one or more employers or associations of employers and one or more employers or associations of employers; or (3) between one or more employees or associations of employees and one or more employees or associations of employees; or when the case involves any conflicting or competing interests in a "labor dispute" (as hereinafter defined) of "persons participating or interested" therein (as hereinafter defined).

(b) A person or association shall be held to be a person participating or interested in a labor dispute if relief is sought against him or it and if he or it is engaged in the same industry, trade, craft, or occupation in which such dispute occurs, or has a direct or indirect interest therein, or is a member, officer, or agent of any association composed in whole or in part of employers or employees engaged in such industry, trade, craft, or occupation.

(c) The term "labor dispute" includes any controversy concerning terms or conditions of employment, or concerning the association or representation of persons in negotiating, fixing, maintaining, changing, or seeking to arrange terms [and] or conditions of employment, or concerning employment relations, or any other controversy arising out of the respective interests of employer and employee, regardless of whether or not the disputants stand in the proximate relation of employer and employee.

(d) The term "court of the United States" means any court of the United States whose jurisdiction has been or may be conferred or defined or limited by act of Congress, including the courts of the District of Columbia.

SEC. 14. If any [provisions] provision of this act [or the application thereof to any person or circumstance] is held unconstitutional or otherwise invalid, the [remainder] remaining provisions of the act [and the application of such provisions to other persons or circumstances] shall not be affected thereby.

SEC. 15. All acts and parts of acts in conflict with the provisions of this act are hereby repealed.

SCOPE OF SUBSTITUTE BILL

The 15 sections of the proposed substitute bill deal, under one guise or another, with the jurisdiction and procedure of the Federal courts. In section 2 the proposal announces a public policy of the United States. In section 3 it defines certain classes of contracts as being contrary to such public policy and provides that any promise falling within the definition shall not be enforceable and shall not afford any basis for the granting of legal or equitable relief by any court of the United States.

Section 4 defines nine acts or classes of acts which the courts may not enjoin whether done singly or in concert. Section 5 provides that the courts of the United States shall not have jurisdiction to issue any temporary or permanent injunction in labor disputes upon the ground of unlawful combination or conspiracy because of the doing

in concert of any of the acts enumerated in section 4. Section 6, in & narrow sense, has no relation to the jurisdiction of the courts or to the subject of injunction, but deals entirely with the liability of certain associations and the officers thereof for unlawful acts of individual officers, members, etc.

Section 7 denies jurisdiction to the courts of the United States in injunction cases in labor disputes except upon certain conditions and the following of certain procedure therein enumerated. Section 8 limits injunctive relief to those who have complied with the law and who have made "every reasonable effort to settle such dispute either by negotiation or with the aid of any available governmental machinery." Section 9 further defines the procedure in granting restraining orders or temporary or permanent injunctions. Section 10 provides the procedure in connection with appeals in injunction cases. Section 11 deals with what is referred to as "indirect criminal contempt" cases and provides that the accused shall enjoy, upon demand, the right of trial by jury. The right provided by this section is applicable in labor disputes and apparently is also applicable in every other contempt case falling within the scope of said section. Section 12 authorizes trial by a judge other than the sitting judge where contempt arises from an attack upon the character or conduct of such judge. This section is not limited to contempts in labor disputes. Section 13 defines the terms used in the act. Section 14 provides a rule for determination of the validity of the act, and section 15 repeals all other acts and parts of acts in conflict with the provisions of the proposed substitute.

POLICY STATED IN SECTION 2 BASED ON ERRONEOUS PREMISES Section 2 states:

Whereas under prevailing economic conditions developed with the aid of governmental authority for owners of property to organize in the corporate and other forms of ownership association

The natural inference to be gained from a reading of this language in the bill is that corporate and other forms of ownership came into being through the enactment of laws by the Congress of the United States, and yet the fact is that practically all corporations are creatures of the several States.

In adopting a public policy which the Government of the United States shall follow in the future, the minority believe that it should be based upon accurate statements of fact, and, above all, it should not be misleading.

While it is true that corporations organized under State laws are in some instances, as for example, when they engage in interstate commerce, subject to certain regulations by Congress, yet these relations with their employees are regulated by State law and it follows that any legislation to provide for liberty of contract for those whom they employ is within the domain of the legislative power of the States and not of Congress.

In our opinion, based upon the experience of recent times, and particularly within the last three years, when labor disputes have been practically unknown, the mutual interests of employers and employees can best be advanced and fostered through a spirit of cooperation and good will, and that many of the provisions of the

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