Ramsey v. America, 416 F.2d 655 (6th Cir. 1969)

ON REHEARING EN BANC

PER CURIAM.

After consideration of these appeals by a panel of this court, rehearing en banc was granted. Upon rehearing, the court was evenly divided as to affirmance or reversal of the District Court. Accordingly, the judgment of the District Court stands affirmed. The opinions of Judge EDWARDS for affirmance and Judge O’SULLIVAN for reversal, respectively are filed with this order.

EDWARDS, Circuit Judge, with whom PHILLIPS, Chief Judge, and PECK and COMBS, Circuit Judges, concur. These cases are on appeal from judgments entered in the United States District Court for the Eastern District of Tennessee, Southern Division, which dismissed the joint complaints of plaintiffs-appellants coal operators against

defendant-appellee United Mine Workers.

They are the latest appeals in this circuit which present the conflicts between the national policy opposing trusts and monopolies (Sherman Antitrust Act §§ 1 and 2, 15 U.S.C. §§ 1, 2 (1964)), and the national policy favoring collective bargaining (National Labor Relations Act § 1, 29 U.S.C. § 151 (1964); Norris-LaGuardia Act §§ 1, 2 and 5, 29 U.S.C. §§ 101, 102, 105 (1964); Clayton Antitrust Act §§ 6 and 20, 15 U.S.C. § 17 (1964), 29 U.S.C. § 52 (1964)). Plaintiffs are coal operators in southeastern Tennessee who allege that defendant, United Mine Workers of America, entered into a national conspiracy with certain major coal producers to create a monopoly, to suppress competition, and to drive plaintiffs (and other marginal operators) out of business.

At the outset we note that of all the major coal companies, whose economic interests defendant is alleged to have conspired to serve, none were joined as co-defendants at trial.

In all controlling respects the issues presented by these appeals are identical with the major issues in the Pennington cases which have been the subject of original trial, judgment, and affirmance by this court, Pennington v. United Mine Workers, 325 F.2d 804 (6th Cir. 1963) reversal and remand by the United States Supreme Court, Pennington v. United Mine Workers, 381 U.S. 657, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965), retrial and judgment, Lewis v. Pennington, 257 F.Supp. 815 (E.D.Tenn.1966), and affirmance of judgment on retrial by this court, Lewis v. Pennington, 400 F.2d 806 (6th Cir. 1968), cert. denied, 393 U.S. 983, 89 S.Ct. 450, 21 L.Ed.2d 444 (1968). The opinions of Justice White in the Supreme Court remand of Pennington, of Judge Peek in the latest consideration of Pennington by this court, and the opinion of Judge Wilson, who tried these cases without a jury and entered thorough findings of fact and carefully reasoned conclusions of law, Ramsey v. United Mine Workers, 265 F.Supp. 388 (E.D.Tenn.1967), should serve to foreshorten our appellate consideration.

Appellants present three questions before this court:

Only the last two of these questions are pertinent to decision of the instant appeals. And we decline the invitation to write an advisory opinion on the first question seeking to interpret or expand on the views of the United States Supreme Court, as particularly expressed in Pennington v. United Mine Workers, 381 U.S. 657, 85 S.Ct. 1585 (1965); Allen Bradley Co. v. Local 3, IBEW, 325 U.S. 797, 65 S.Ct. 1533, 89 L.Ed. 1939 (1945), and United States v. Hutcheson, 312 U.S. 219, 61 S.Ct. 463, 85 L.Ed. 788 (1941).

The second issue requires us to determine whether or not the Supplemental Agreement of 1958 (the Protective Wage Clause) between the Bituminous Coal Operators Association (BCOA) and the United Mine Workers of America (UMW) constituted an express or per se violation of the antitrust laws. The specific language complained of follows:

rity of this contract in all of its parts. The objective of this contract is to provide the maximum possible continuity and stability of employment under the conditions set forth herein. The parties hereto agree that bituminous coal mines shall be so operated as not to debase or lower the standards of wages, hours, safety requirements and other conditions of work, established by this contract. The parties recognizing their obligation each as to the other to exercise all possible efforts and means to attain these objectives further agree as follows:

cilities as a subterfuge for the purpose of avoiding the application of this Clause.” (Emphasis added.)

Defendant sought to persuade the District Court, and now seeks to persuade us, that this language taken in the historic context of the bargaining relationship constitutes an express undertaking by defendant to impose the BCOAUMW wage scale on all nonsignatory coal operators in order to force some (including plaintiffs) out of business.

We simply do not find language to support this contention. The italicized portions of the disputed agreement clearly indicate that it is expressly limited in its effect to its signatories.

Further, as Judge Peck recently pointed out for this court:

The third appellate issue is, however, such as to require greater analysis. In it plaintiffs-appellants contend that even if defendant did not make an express commitment in contractual language, it did in fact form an illegal conspiracy • with BCOA to impose a wage scale upon the total industry which had the effect (and if such were needed, the predatory intent also) of driving smaller operators like plaintiffs out of business.

There is, of course, no doubt that defendant could in serving the purposes of its membership seek vigorously to impose a uniform wage scale throughout the coal industry and that in doing so its lawful labor objectives were exempt from antitrust regulation. See American Federation of Musicians, etc. v. Carroll, 391 U.S. 99, 88 S.Ct. 1562, 20 L.Ed.2d 460 (1968).

In United States v. Hutcheson, 312 U.S. 219, 61 S.Ct. 463 (1941), the Supreme Court said:

See also Clayton Act § 20, 29 U.S.C.A. § 52, and Norris-LaGuardia Act, 18 U.S.C. § 3692, 29 U.S.C. §§ 101-115 (1964); Apex Hosiery Co. v. Leader, 310 U.S. 469, 60 S.Ct. 982, 84 L.Ed. 1311 (1940).

The critical questions pertaining to this issue are 1) whether defendant acted in its’ own self-interest or whether defendant acted in illegal conspiracy with BCOA to stifle competition; and 2) by what standard of proof this decision should be made.

One major difference between the appellate record in Pennington and that presented herein must be pointed out here. Both District Judges (Judge Taylor in the retrial of the Pennington case, and Judge Wilson in Ramsey) concurred in holding that the standard of proof imposed upon plaintiffs in establishing its allegations of antitrust conspiracy against defendant labor union was “clear proof” rather than “preponderance of the evidence.” Judge Taylor,

however, stated that on the record before him plaintiffs’ proofs failed to justify judgment under either standard; whereas in the instant record Judge Wilson said:

In the second Pennington case Judge Peck dealt with these identical issues:

tion of the Sherman Act even if the mechanism is the imposition of a wage scale which the union is free unilaterally to impose. It was upon this premise (that the purpose of the bargaining agreement was to drive some employers out of business), that Mr. Justice Douglas, joined by Justices Black and Clark, concurred;

We have previously noted that certiorari has recently been denied by the Supreme Court in relation to the second Pennington case from this court, which we have just quoted so fully. While we are well aware that denial of certiorari does not represent affirmance, we consider it inappropriate to discount completely the denial of certiorari in second Pennington. The Supreme Court had granted certiorari in relation to this court’s first decision in the same case and had remanded it with instructions for retrial. If the trial court, or this court, had interpreted those instructions erroneously in the course of retrial or appeal, we find it difficult to believe that the Supreme Court would have ignored the error.

We believe that Judge Peck (and Judges Wilson and Taylor) were right in holding that the “clear proof” standard of the Norris-LaGuardia Act is the proper standard of proof applicable to a Sherman Act suit against a labor union. United Brotherhood of Carpenters v.

United States, 330 U.S. 395, 67 S.Ct. 775 (1947); United Mine Workers v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130 (1966).

The Norris-LaGuardia Act states specifically :

It is, of course, impossible for a labor union to act except by dint of actions of its officers, members, or agents. Even more specifically pertinent to the standard of proof applicable to this case is the fact that this action is a claim of violation of the Sherman Antitrust Act by an illegal conspiracy to drive plaintiffs out of business on the part of the United Mine Workers. Such a conspiracy could obviously be carried out only by officers, members, or agents of the union acting in an agency relationship.

There is, of course, no doubt that the agreement between the UMW and the BCOA containing the Protective Wage Clause was the action of fully authorized agents. Defendant UMW concedes this and as to this phase of the case, the standard of proof whether “clear proof” or “preponderance of the evidence” would make no difference.

But Judge Wilson found, and we have found, that the language of the agreement- did not per se constitute an illegal conspiracy. Plaintiffs also charged, however, that such a conspiracy could be appropriately implied by the District Court from the BCOA-UMW contract, plus the subsequent actions of the UMW officers and members in the organizational and strike activities in the Southeastern Tennessee coalfields and in defendant’s purchase of stock in West Kentucky Coal about which plaintiffs-appellants complain. The history and the specific language of the NorrisLaGuardia Act indicate that its “clear proof” standard was designed to apply to just such charges as these.

The United States Supreme Court recognized these facts when it said in the Carpenters’ case:

Any reconciliation of national labor policy with national antitrust policy demands application of this interpretation in this case. Since in every instance labor unions are seeking agreements with employers on wages, hours and working conditions, and in every such instance both the employer and the union have a strong (albeit separate) motive for extending such agreement to other employers in the same field, it would be simple to defeat the national policy of encouraging collective bargaining by allowing easy implication of union-employer antitrust conspiracies. See Mr. Justice Goldberg’s dissent in Local Union No. 189, Amalgamated Meat Cutters & Butcher Workmen, etc. v. Jewel Tea Co., Inc., 381 U.S. 676, 697, 85 S.Ct. 1596, 14 L.Ed.2d 640 (1965); see also Senate Report No. 163, 72d Cong. 1st Sess., p. 19. Two members of the Supreme Court joined Mr. Justice White’s opinion which employed the language, “clearly shown,” in describing the applicable standard of proof. 381 U.S. at 665, 85 S.Ct. 1585.

We also read Mr. Justice Douglas’ opinion (with which two members joined) as concurring on this point.

Since we agree with this court’s second Pennington decision (quoted above) that the “clear proof” standard applies to this appeal, we find no reason to undertake an analysis of what result would follow application of a different standard.

Further, in agreement with the reasoning in the second Pennington decision in this court, we believe that the Supreme Court1 in Pennington has required a finding of “predatory intent.” Such intent may be represented by an-agreement by a labor union to serve the interests of an employer in eliminating that employer’s economic competition.2

With these two standards in mind, we turn to consideration of whether or not plaintiffs’ total evidence concerning the alleged antitrust conspiracy constituted “clear proof” of such a conspiracy. As to this issue we deal with a somewhat different factual record than that made in the second Pennington case.

The essence of appellants’ evidence of conspiracy to drive BCOA’s competitors out of business consisted of 1) evidence of UMW attempts to organize the Southeastern Tennessee coalfields, including the operations of appellants; 2) the claimed violent and disastrous economic impact of these activities, and 3) the purchase of substantial stock in the West Kentucky Coal Co. by the UMW and the subsequent “price cutting” activities of West Kentucky Coal which appellants assert served to drive Southeastern Tennessee coal out of the TVA market.

The District Judge’s analysis of the evidence he heard is masterly. His opinion covers 52 pages of volume 265 of Federal Supplement and while we affirm it for purposes of our decision on the facts, in view of its ready availability we shall quote from it selectively.

Briefly put, the District Judge found in essence that 1) the UMW in its organizing activities in the Southeastern Tennessee coalfields was pursuing its own and its own members’ interests rather than those of the BCOA; 2) appellants’ economic troubles stemmed as much (or more) from the geological structures of the Southeastern Tennessee coalfields which made mechanization of the mines to meet oil, gas and electrical competition difficult and from undercapitalization and bad management as they did from the activities of the UMW, and 3) that the total record did not support the charge that defendant conspired with West Kentucky Coal so as to engage in predatory price cutting in the TVA market.3

The District Judge’s findings on these issues included:

America, 265 F.Supp. 388, 430 (E.D.Tenn.1967).

particularly during the period from 1956 through 1958, forcing the price from 21.370 per million b. t. u. in 1956 down to 16.500 per million b. t. u. in 1958. (In translating a b. t. u. price to a tonnage price, the quality of coal is a significant factor. However, on the average one cent per million b. t. u. is equal to approximately 250 per ton on a tonnage price basis.) The evidence does not sustain the plaintiffs’ charge. Although West Kentucky bid in 1956, its bid in each instance was well above the market and it did not receive a single award. An analysis of the bids in 1957 and 1958 reveals that West Kentucky bid 22 times on the spot market, but received only five awards, these successful bids all being from Nashville Coal Company’s Union-town mine to the T.V.A. Shawnee steam plant. In not a single instance was West Kentucky the low bidder. In the first eight bids it was unsuccessful. On the ninth bid it got an award, but was the highest successful bidder. Its 10th, 11th and 12th bids were unsuccessful. Its 13th bid was successful, but again it was the highest successful bidder. Its 14th and 15th bids were unsuccessful. Its 16th and 17th bids were bid at the same price as the 14th and 15th bids, and were successful this time. In the 16th bid it was the highest successful bidder and in the 17th there were several lower bids. The 18th and 19th bids, at the same price as the four previous bids, were unsuccessful. The 20th bid was successful but was the second highest offer and there were no unsuccessful bidders on this solicitation. The 21st bid, at the same price, was unsuccessful. The 22nd bid was successful, but only by .02 mils per million b. t. u.” 265 F.Supp., supra at 419.

Company and the Tennessee Valley Authority joined in requesting a rate reduction of railway freight rates for hauling coal from the western area of Kentucky to the Widow’s Creek steam plant, the request being to reduce this rate from $2.40 per ton to $1.60 or $1.40 per ton, depending upon the volume hauled. This reduction was opposed by coal operators in the Southeastern Tennessee coal field. The reduction was granted by the Interstate Commerce Commission. There is no evidence that this had any relation to any conspiracy involving either the U. M.W. or West Kentucky Coal Company. In any event, since it involves an appeal to a governmental agency, it could not involve a Sherman Act violation. United Mine Workers v. Pennington, 381 U.S. 657, 86 S.Ct. 1585, 14 L.Ed.2d 626.

There is ample evidence in this record to support these findings; and we certainly cannot hold them to be “clearly erroneous.” Fed.R.Civ.P. 52(a).

As indicated at the outset, the judgments of the District Court are affirmed by an equally divided vote in this court.

O’SULLIVAN, Circuit Judge,

with whom WEICK, CELEBREZZE and McCREE, Circuit Judges, concur.

The question of law which divides us in this case is whether Section 6 of the Norris-LaGuardia Act, 29 U.S.C. § 106, requires that all elements of a cause of action for antitrust violation must be made out by “clear proof” where a labor union is a defendant, as my brother Edwards holds, or whether the “clear proof” standard of Section 6 is limited to the determination of the authority of “individual officers, members, or agents” to act for a labor union or other organization, as I contend. Such Section 6 of Norris-LaGuardia provides;

This is plain language which, in my view, clearly exposes the Section’s limitation. While not controlling, this is the meaning of the Section as it appeared to the compilers. The black letter title of the Section reads:

The chief assertion of the opinion for affirmance is that in United Mine Workers v. Pennington, 381 U.S. 657, 85 S.Ct. 1585 (1965), the United States Supreme Court announced a rule that Section 6 of the Norris-LaGuardia Act controls the standard of proof as to all issues in any antitrust action against a labor union. That it did not do so is, in my view, made clear by the fact that nowhere in the opinions filed in that case (by Justices White, Douglas and Goldberg) is Section 6 of the Norris-LaGuardia Act even mentioned or discussed.

The opinion for affirmance places subsidiary reliance on United Mine Workers v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130 (1966), and United Bhd. of Car

penters v. United States, 330 U.S. 395, 67 S.Ct. 775 (1947). Gibbs, however, had nothing to do with an antitrust action and considered only the question of a union’s authorization of acts of violence committed by its members. Carpenters was a criminal case which considered Section 6 of Norris-LaGuardia only in dealing with the authority of an agent to act for a principal, whether that principal was a labor union or an employer. It did not construe Section 6 of Norris-LaGuardia as providing a special rule for labor unions. In this ease the District Judge apparently considered that such a special rule existed. He said:

Such also was District Judge Taylor’s view in Lewis v. Pennington, 257 F.Supp. 815 (E.D.Tenn.1966), aff’d 400 F.2d 806 (6th Cir. 1968), cert. denied 393 U.S. 983, 89 S.Ct. 450, 21 L.Ed.2d 444 (1968).

Carpenters clearly limits the “clear proof” rule to the matter of proving the authority of an alleged agent. I consider that these District Court opinions, as well as the opinion of my brothers here, fail to properly limit the “clear proof” rule as in Carpenters.

Plaintiffs-appellants are, or were, coal mining companies operating in southeastern Tennessee. They appeal from a judgment of the United States District Court for the Eastern District of Tennessee, Southern Division, which dismissed their joint action against the United Mine Workers of America, defendant-appellee. Plaintiffs’ action sought damages claimed to have been suffered by them as a consequence of alleged violations by the United Mine Workers of Section 1 and 2 of the Sherman Antitrust Act, 15 U.S.C. §§ 1 and 2. This is one of the many lawsuits that have grown out of the substantially successful organization by the UMW of coal mining operations in the southeastern part of Tennessee. Plaintiffs charge that the United Mine Workers had long sought to forbid anyone from carrying on coal mining in the involved territory except those who would pay the wages and meet other conditions imposed by the United Mine Workers. It is their claim that this objective was ultimately accomplished by an illegal combination and conspiracy between a few big coal companies, who formed the Bituminous Coal Operators Association, and the United Mine Workers. Appellants further assert that the plan of the conspiracy was that only those who signed and adhered to the terms of a contract identified as the National Bituminous Coal Wage Agreement of 1950 and its 1958 supplement, the Protective Wage Clause,1 would be permitted to carry on

coal mining in southeastern Tennessee. It is claimed that the terms of these illegal undertakings were, when needed, implemented by violence visited upon anyone, including the plaintiffs, who essayed to operate independently. Success ultimately marked the United Mine Workers’ campaign. We need not here consider the good or evil of the economic and social philosophy which holds that only those industries which, by size and profits, are able to pay wages that are considered adequate by the Unions of their employees, are fit to survive in today’s economy.

The history of which this lawsuit is a part will be better learned by reading the District Court opinion in this case, reported as Ramsey v. United Mine Workers, 265 F.Supp. 388 (E.D.Tenn.1967), and the opinions in related cases: Pennington v. United Mine Workers, 325 F.2d 804 (6th Cir. 1963); United Mine Workers v. Pennington, 381 U.S. 657, 85 S.Ct. 1585 (1965); Lewis v. Pennington, 257 F.Supp. 815 (E.D.Tenn.1966); and Lewis v. Pennington, 400 F.2d 806 (6th Cir. 1968), cert. denied, 393 U.S. 983, 89 S.Ct. 450 (1968). The above-mentioned opinions and related opinions shall be referred to herein as Pennington I, II, III and IV, respectively. All of these refer to an action by Pennington and others against the United Mine Workers to recover damages for the claimed Mine Workers’ violation of the Sherman Antitrust Act. Pennington I was our affirmance of a District Court judgment entered upon a jury verdict which found the Mine Workers guilty of such violation. Pennington II was the Supreme Court’s reversal of Pennington I, remanding the case for a new trial. Pennington III was a District Court judgment, entered after trial upon the remand, and Pennington IV is this Court’s affirmance in part and reversal in part of Pennington III.

In the case at bar, the District Judge, in dismissing plaintiffs’ action, held that although plaintiffs had made out a ease of the Mine Workers’ violation of the antitrust laws by a preponderance of the evidence, a labor union cannot be convicted of such violation except by the “clear proof” rule of Section 6 of the Norris-LaGuardia Act, 29 U.S.C. § 1062 Testing the sufficiency of plaintiffs’ proofs by such rule, he exonerated the Mine Workers of liability. We consider that such ruling was the product of the District Judge’s misreading and misapplication of two Supreme Court decisions, viz: United Mine Workers v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966); and United Bhd. of Carpenters v. United States, 330 U.S. 395, 67 S.Ct. 775, 91 L.Ed. 973 (1947). He concluded that these cases announced a rule that labor unions, as distinguished from all others who might be so accused, cannot be convicted of violation of the Sherman Act unless such violation be established by the so-called “clear proof” rule of Norris-LaGuardia. We would reverse.

It is clear that had the District Judge considered that the ordinary preponderance of the evidence rule applied, he would have found that the United Mine Workers were guilty of Sherman Act violations. The critical question was whether the United Mine Workers and the Bituminous Coal Operators Association had agreed to control wages and

working conditions. On this, the District Judge said:

In Pennington v. United Mine Workers, 325 F.2d 804 (6th Cir. 1963)— Pennington I—this Court affirmed a judgment, entered upon a jury verdict, finding the United Mine Workers guilty of violating the Sherman Act. The jury awarded plaintiff $90,000 damages, which sum was trebled by the District Court. As will be discussed later herein, the District Judge had advised the jury that plaintiffs’ burden was to make out their case by a preponderance of the evidence. In our affirmance, we followed the United States Supreme Court’s holding in Allen Bradley Co. v. Local 3, IBEW, 325 U.S. 797, 65 S.Ct. 1533, 89 L.Ed. 1939 (1945), that the exemption granted labor unions from the provisions of the Sherman Act by Section 6 of the Clayton Act, 15 U.S.C. § 17,

While we cannot say that the facts of Pennington I parallel the case at bar in all respects, we are satisfied that the plaintiffs’ evidence in that case did not portray with more probative force a violation of the Sherman Act than does the record here. We there held that United Mine Workers were not entitled to a directed verdict and that there was sufficient evidence to permit the jury to find that the United Mine Workers had, to the damage of the plaintiffs — a group of small mine operators — violated the Sherman Act. We affirmed the judgment which was entered on the verdict.

The United States Supreme Court reversed us, United Mine Workers v. Pennington, 381 U.S. 657, 85 S.Ct. 1585 (1965)—Pennington II—not, however, on the ground that a case of violation of the Sherman Act had not been made out, but remanded for a new trial because of some instructions which the Supreme Court held should not have been given. The criticized instructions had nothing to do with the standard of proof which governed plaintiffs’ burden. They affirmed our holding that Pennington, et al., had made out a case to go to the jury. This is made plain by the Court’s disposition of the Mine Workers’ claim that a verdict should have been directed.

the answer is clearly in the negative and that the union’s motions were correctly denied.” 381 U.S. at 661, 85 S.Ct. at 1589. (Emphasis supplied.)

Therefore, we consider that the Supreme Court has said that the evidence in the case at bar — legally equivalent to Pennington — would permit a factfinder —jury or judge — to find the United Mine Workers guilty of violating the Sherman Act. The accused agreement here, as well as in Pennington I, was the so-called National Bituminous Coal Wage Agreement, with the 1958 addition to it of the Protective Wage Clauses under which (as charged by plaintiff) “the Union bound itself not to enter into, be a party to, or permit any other kind of labor contract in the industry except the National Agreement which it signed with Bituminous Coal Operators Association.” Lewis v. Pennington, 257 F.Supp. at 820.

In Pennington I, the charge of antitrust violation against the Mine Workers was made in the cross-complaint of Pennington, et al. In his general submission of the case to the jury, the District Judge charged that,

It should be noted that in the Mine Workers appeal from the verdict in Pennington I, none of its five Questions Involved attacked the style of the above instruction. They did question the instructions which the Supreme Court found erroneous, but those did not relate to standard of proof. In their appeal to us, in urging that a verdict should have been directed for insufficient proof, the Mine Workers contended that Section 6 of Norris-LaGuardia should have been applied in testing whether there was any sufficient evidence to allow the jury to find the Mine Workers guilty of Sherman Act violations. In our opinion in Pennington I, 325 F.2d 804, we rejected such contention by finding that the District Judge correctly submitted the case to the jury and by sustaining the District Judge’s denial of the Mine Workers’ motion for new trial which, inter alia, again asserted that Section 6 of Norris-LaGuardia was the controlling rule.

In their brief to this Court in Pennington I, the Mine Workers asserted:

In their petition to the Supreme Court for writ of certiorari to review Pennington I, the United Mine Workers included in its Questions Presented the following:

We read the Supreme Court’s holding in Pennington II, as rejecting the assertion presented by that question.

District Judge Taylor’s opinion upon retrial — Pennington III — was the first announcement by any court that labor unions are insulated from liability under the Sherman Act unless their violations are made out by the “clear proof” standard of Norris-LaGuardia. He stated:

and further that:

The quotations from Justices Brennan and Harlan set out by Judge Taylor immediately preceding the above are both from the Gibbs case. Judge Taylor did not cite the Supreme Court opinion in Pennington II as support for the new “clear proof” rule that he announced. His reliance was on Gibbs, but the Gibbs case had nothing whatever to do with the Sherman Act or the Clayton Act.

Gibbs had sued the United Mine Workers and recovered damages for secondary boycott and a state common law tort. The relevant question was whether UMW could be held liable for violence committed by some of its members in stopping Gibbs’ effort to begin a mining operation. The Supreme Court merely held that Section 6 of the Norris-LaGuardia Act required Gibbs to make “clear proof” that the UMW had authorized, approved or ratified the violence. This is the case’s holding:

It found that Gibbs’ evidence did not, by “clear proof,” establish the union’s authorization of or participation in the violence committed. In the case at bar, except as to responsibility for violence, there was no issue as to whether what was done by the Mine Workers’ officers or agents had the approval of the union. No such question was raised. The National Bituminous Coal Wage Agreement and the 1958 Protective Wage Clause made between the Bituminous Coal Operators Association and the United Mine Workers were admittedly executed by the proper authorities of the union and Norris-LaGuardia was in no way involved in these critical matters.

The application of the Norris-LaGuardia “clear proof” rule as the standard of proof in Sherman Act suits against labor unions had its genesis in Lewis v. Pennington, 257 F.Supp. 815

(.Pennington III). A reading of the opinion of Judge Taylor in that case will disclose that he did not rely upon the Supreme Court’s opinion in Pennington II for the rule he announced — Gibbs was his authority. The first intimation that the Supreme Court’s opinion in Pennington II contained such a rule came in Judge Wilson’s opinion in the case at bar and in this Court’s opinion in Pennington IV, 400 F.2d 806 (1968), affirming Judge Taylor’s Pennington III. Our opinion in that case emphasizes the words “clearly shown” in quoting from one of the sentences in Mr. Justice White’s Pennington II opinion, where he said:

This is followed by this Court’s language :

We are not persuaded that the context of Mr. Justice White’s use of the words “clearly shown” in the sentence quoted justifies their being read as announcing a new rule giving labor unions special treatment in defending suits under the Sherman Act. The concurring opinion of Mr. Justice Douglas, joined by Mr. Justice Black and Mr. Justice Clark, does not even discuss the subject. Neither does Mr. Justice Goldberg, who was joined by Mr. Justice Harlan and Mr. Justice Stewart in dissenting form Pennington II.

That the words “clearly shown” were not employed by Justice White to announce the rule claimed by Judge Taylor in Pennington II and by Judge Wilson in this ease is made clear by the fact that neither in Justice White’s opinion nor in any of the others in Pennington II is Section 6 of Norris-LaGuardia even mentioned. It is that statute which is the sole basis for the claim that “clear proof” is the standard applicable to the burden of proving all elements of a labor union’s violation of the Sherman Act.

Congress has been attentive to the needs of organized labor. Lest, in serving their own ends, labor unions be swept into the prohibitions of the Sherman Act, the Clayton Act came into being in 1914 to protect the unilateral activities of a labor union from antitrust condemnation. The Supreme Court’s opinion in Allen Bradley Co. v. Local 3, IBEW, 325 U.S. 797, 65 S.Ct. 1533 (1945), however, forbade labor unions from joining hands with management in conduct proscribed by the Sher

man Act. The Norris-LaGuardia Act was enacted in 1932 as a restraint upon the then-increasing intrusions of federal court injunctions into genuine labor disputes; its Section 6 (29 U.S.C. § 106) provided that the participants in labor disputes, whether employer or a union of employees, could not be cast in damages, or be made otherwise liable for unlawful acts of their agents, except by clear proof of the authority of such agents to act for their principals. The “clear proof” rule was created by Congressional Act, with clear definition of its limited application. We are not at liberty to do violence to its plain language by reading into it new and special antitrust insulation of labor unions not contained in the exemption granted them by the Clayton Act. Certainly the Gibbs case did not do so, and we are not persuaded that two words included in a general observation by one of the Justices in Pennington II did so.

Judge Wilson specifically found that, by preponderance of the evidence, plaintiffs had established that the joint action of the BCOA and the Mine Workers in entering into and using the National Bituminous Coal Wage agreement with its Protective Wage Clause, and the implementing of them, established an agreement violating the Sherman Act. While he did not express himself as to how he would have found as to all of the other issues of fact had he adhered to the traditional preponderance of evidence rule, he made it plain that he followed the “clear proof” rule in passing on responsibility for violent conduct by agents or members of the union. The Gibbs rule was correctly applied to that issue.

The other case relied upon to support the “clear proof” rule was United Bhd. of Carpenters v. United States, 330 U.S. 395, 67 S.Ct. 775, 91 L.Ed. 973 (1947). In that criminal case, unincorporated trade unions and their officials were alleged to have conspired with some manufacturers and dealers and their incorporated trade associations to monopolize and restrain trade in the manufacture of and dealing in, millwork and patterned lumber. The only holding relevant to the Norris-LaGuardia Act was that, wherein the government sought to hold the involved trade associations or parent unions responsible for acts done by their individual officers, members, or local unions, the authority to so act for their principals had to be made out by clear proof. This is the totality of the case’s relevant holding:

This, indeed, is not a holding that the “clear proof” rule has, in antitrust cases against labor unions, replaced the substantive rule of preponderance of the evidence. The Supreme Court in Carpenters was careful to express the limit of the rule:

Had adherence to or establishment of a rule that plaintiffs had to establish their entire case by the “clear proof” of Norris-LaGuardia been decisive of our Pennington IV, stare decisis would forbid this early a departure from it. But the adoption or approval of such a rule was dictum in Judge Taylor’s opinion and in

our affirmance.6 He concluded his finding on Sherman Act violation as follows:

Thus, it is clear that Judge Taylor’s exoneration of the Mine Workers was not dependent upon application of the clear proof rule of Norris-LaGuardia. He found that plaintiffs had not made out a case under the traditional rule of preponderance of the evidence.

Plaintiffs’ evidence in this case generously portrayed how propitious was the setting for the victory achieved by the BCOA and the Mine Workers in implementing their agreement. The District Court opinion at length sets out the relevant facts. Among other things, it was shown that the Mine Workers loaned to one Cyrus Eaton some $25,000,000 to enable him to acquire for them control of the capital shares of West Kentucky Coal Company — the biggest of the members of BCOA — and its subsidiary, Nashville Coal Company. By having Eaton so invest the union’s money, the Mine Workers acquired the voting rights of West Kentucky Coal Company and Eaton became Chairman of the Board, and:

Judge Wilson further observed:

It would indeed be over kind to accord credence to the asserted claim that the making of the National Bituminous Coal Wage Agreement and the Protective Wage Clause between the United Mine Workers and their controlled West Kentucky Coal Company was an arm’s length” transaction, free of conspiratorial and predatory purpose. The Mine Workers lost eight of the twenty-five million dollars which it invested in the management side of the accused transactions. For its victory, it was apparently willing to pay this bill as well as the many hundreds of thousands of dollars which it paid for the depredations and violence — the reign of terror — which it employed in driving out of coal mining those who could not live with the terms of the National Bituminous Wage Agreement. See Flame Coal Co. v. United Mine Workers, 303 F.2d 39 (6th Cir. 1962); United Mine Workers of

America v. Osborne Milling Co., 279 F.2d 716 (6th Cir. 1960), cert. denied, 364 U.S. 881, 81 S.Ct. 169, 5 L.Ed.2d 103 (1960); Gilchrist v. United Mine Workers, 290 F.2d 36 (6th Cir. 1961). District Judge Wilson described the Mine Workers’ conduct in this language:

and further,

He sums up the situation as follows:

There is nothing in the record of this case to suggest that the conception and prosecution of the grand plan we deal with was the work of irresponsible underlings. The total enterprise was directed from high echelons of authority. Top people of the United Mine Workers and the Bituminous Coal Operators Association did not need the protection of Norris-LaGuardia when they negotiated and signed the National Bituminous Coal Wage Agreement and its Protective Wage' Clause, nor when the Mine Workers invested $25,000,000 to aid the big coal companies to fulfill the promise of the plan.

Peace has indeed come to Southeastern Tennessee’s part of Appalachia, but it is the peace of obedience to the overlords of big business and big labor. Of this situation, Mr. Justice Douglas, in his Pennington concurrence, appropriately observes:

We would vacate the judgment of the District Court and remand the cause for further proceedings consistent herewith.