TELEGRAPHERS v. CHICAGO & N. W. R. CO.

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Argument of Lester P. Schoene

Chief Justice Earl Warren: Number 100, the Order of Railroad Telegraphers et al, Petitioners versus Chicago and North Western Railway Company.

Mr. Schoene.

Mr. Lester P. Schoene: If the Court please, this case is here as a result of this Court's order of October the 12th, 1959, granting a petition for a writ certiorari to the United States Court of Appeals for the Seventh Circuit.

That judgment reversed the judgment of the District Court for the Northern District of Illinois, which had denied a permanent injunction against a strike and have dismissed the complaint.

The attempted strike arose out of a union's proposal under the Railway Labor Act to amend the existing agreements to include a rule, providing that no position in existence on December 3rd, 1957, will be abolished or discontinued except by agreement between the carrier and the organization.

The opinion of the court below, goes into considerable discussion of the facts which we believe to be largely irrelevant and I think its holding can be readily summarized by a few quotations, beginning on page 382 of the record where the Court of Appeals' opinion appears, it actually begins a few pages earlier than that on page 377 of the record.

With respect to the proposal that I have quoted, the Court of Appeals said on page 382, “Certainly, the Railway Labor Act does not divest a carrier of the right to manage and control the administrative functions of its business enterprise and conduct its business operations without exercise of a veto power by the union.”

Here, the union is demanding such veto power over the abolition of any position in existence on December 3rd, 1957.

The union is attempting to obtain through the collective bargaining processes through Railway Labor Act that which would prohibit North Western from complying with the orders of the South Dakota Public Utilities Commission and the Iowa State Commerce Commission.

In short, this is an attempt by the union to erogate to itself the prerogatives that have been traditionally and rightfully managements while at the same time assuming none of the corresponding burdens and responsibilities.

Then turning to page 384, near the bottom of the page, the Court in further substantiation of that holding sirs, we see no material difference between the Howard case and the case before us, the reference to the Howard case is of course to the decision of this Court in Brotherhood of Railroad Trainmen against Howard at 343 U.S. 768.

And then on page 385 of the record, the Court says, “We therefore hold that such a demand thus here made by the union is completely outside the ambit of rates of pay rules and working conditions as those words are used in the Railway Labor Act and cites the North Shore case and hence, is not within the scope of mandatory bargaining.

Therefore, the terms of the Norris-LaGuardia Act are here inapplicable.

In further support, the Court relied on this Court's decision last term in the Borg-Warner case.

Now the – with this holding, the Court disposed off a number of issues that were not specifically considered.

As you will note from reference to the petitioner's brief, pages 14 to 15, there are a considerable variety of issues embraced in this case, all of which are disposed out by the Court's determination that a permanent injunction against the strike should have been issued by the District Court.

Now, in the course of the development of this case, there have been so many instances in which by taking facts out of context.

Justice William J. Brennan: Did you raise the jurisdictional question on the diversity issue below?

Mr. Lester P. Schoene: No we did not, but the basic jurisdictional question is raised here for the first time.

Justice William J. Brennan: May we hear you on it?

Mr. Lester P. Schoene: Yes, I would --

Justice William J. Brennan: I mean, are you entitled to be heard?

Mr. Lester P. Schoene: I beg your pardon?

Justice William J. Brennan: Are you entitled to be heard on it?

Mr. Lester P. Schoene: Yes, I think so.

I think the question of jurisdiction might arise at any time.

Justice Felix Frankfurter: What if -- would you mind stating what you deem the basic jurisdictional question?

Mr. Lester P. Schoene: Yes, the -- the jurisdiction on the Court would've -- of the District Court was invoked on the theory that rights were being claimed under the Constitution and laws of the United States.

At the time that the complaint was filed, at least the part of the complaint seemed to have similarities to Chicago River -- Brotherhood of Railroad Trainmen against the Chicago River Railroad and it seemed at point to present his sufficient claim of federal right.

There was never any jurisdictional claim on any other head of jurisdiction, but as the case has proceeded the nature of the federal right claim has seemed to us to become more and more vague until we felt compelled to bring to the attention of this Court that in the present posture of the case, there appears to be a basic lack of federal jurisdiction.

Justice William J. Brennan: You mean --

Mr. Lester P. Schoene: I -- I'm going to tackle that --

Justice William J. Brennan: Meaning that they can't prove diversity and therefore --

Mr. Lester P. Schoene: That's a -- the federal right is not sufficient to support federal jurisdiction.

Justice Tom C. Clark: Well diversity was not alleged?

Mr. Lester P. Schoene: Diversity was not alleged.

Now, the -- I -- I say the -- the federal jurisdiction was claimed only on the basis of a claim under the constitutional laws of United States.

Now there have been so many --

Justice William J. Brennan: This was left open in the Toledo case, was it?

Mr. Lester P. Schoene: That -- that is exactly the point that was left open in the TP&W case and discovery incidentally, I must apologize for the fact that I have overlooked that fact in courts below and it came to my attention in the course of the preparation of petition for certiorari in this Court and therefore the question was raised.

As I said the taking effects out of sequence, out of context and drawing inferences form them has lead I believe to a considerable degree of confusion as to what the facts actually were and how this controversy arose and I believe that I can be of greatest assistance to the Court if I first take a little time, in fact a fair amount of time to review in some details the actual sequence of the events that lead to this controversy and this litigation.

Justice Felix Frankfurter: You -- you do that I take it because you think that will make clearer the jurisdictional problem?

Mr. Lester P. Schoene: Well, it will include the jurisdictional problem but I think it is necessary for the understanding of any of the issues in the case that the Court --

Justice Felix Frankfurter: All right.

I put my question because usually, I like to refresh my mind first it was so clear that there's no jurisdiction.

Is that a good reason for not starting with that.

That's why I assumed that I --

Mr. Lester P. Schoene: I -- I don't -- I don't think it's completely clear, Mr. Justice.

Justice Felix Frankfurter: All right.

Mr. Lester P. Schoene: I think this is in one of these vague areas in which I'm not quite sure of what the holdings of this Court indicate.

Now, this controversy began when on December the 23rd, 1957, the union, pursuant to Section 6 of the Railway Labor Act served a formal notice on the carrier in which it proposed to amend the existing agreement by including the rule which I have already quoted that is that, “No position in existence on December 3rd, 1957, will be abolished or discontinued except by agreement between the carrier and the organization.”

Now, prior to that date, and since Mr. Ben Heineman had taken over the management of the railroad in -- on April the 1st, 1956, approximately a year-and-half before, the total employment had been reduced from 26,000 approximately to approximately 18,000.

And that reduction in employment had included some 100 positions of the telegrapher's class other than the station agency positions.

Also, the Railroad had applied on November the 5th, 1957 to the South Dakota Public Utilities Commission for permission to close 69 stations in South Dakota or alternatively, if it proved feasible to close 53 stations and enlarge the agents' assignments at 16 others to include limited service at the closed stations.

Hearings in South Dakota had not then concluded.

Now, you may wonder why I'm diverting to the proceedings in South Dakota, the reason is that throughout this case, the carrier, the railroad has taken the position that actually this strike was not motivated by the refusal of the carrier to bargain under Section 6 proposal, but was really a protest against the railroad station agency problem and was in protest or for the purpose of frustrating orders of state commissions.

Therefore, I think it is important that the Court have in mind that at the time this proposal was made, over a 100 non-agency positions have been lost and the proposal to close agencies had been made only in South Dakota, hearings in South Dakota had not yet been concluded and of course no action by the South Dakota commission had been taken, and that was the posture in which the Section 6 notice was served.

Now incidentally I should have stated earlier that virtually all the facts that I'm reviewing are to be found in the Court of Appeal -- in the District Court's findings of facts and some inclusion of law which appear at page 351 and following of the printed record that is before you.

Now, after the service of this notice, the railroad refused to bargain.

It flatly refused to entertain the proposal.

That is borne out by finding number four on page 352 of the record.

The letter of December 24th there referred to appears on page 34 of the record and it will be noted that the reason for the refusal to bargain by simply the carrier regarded here is not a proper subject for bargaining and the use of patient of management prerogatives and it made no mention of any of the other reasons that were later adduced for its refusal to bargain.

Subsequently, as finding number four also points out this same position was reiterated in discussions and in correspondence.

On January the 27th, 1958, as finding number five points out, the union notified the Railroad that it would have to treat the railroad's actions as a refusal to bargain under the Railway Labor Act and that it would proceed further in accordance with the provisions of the Railway Labor Act.

In accordance with that announced position, the union on February the 5th, 1958 invoked the services of the National Mediation Board that is covered by finding number 6.

Now, I would like to read specifically finding numbers 7, which says the on the date of February 24th, 1958, the National Mediation Board by its Executive Secretary addressed a letter to the Director of Personnel and the plaintiff, Mr. TM Van Battan and to the President of the Telegraphers G.E. Leighty advising that the application filed by the Telegraphers has been reviewed by the Board, advising further that the Board considered that apparently at proper Section 6 notice has been filed in this manner and accordingly, the Board have docketed the application as case number 25696 and that's a typographical error that should be number A-5696 as would appear from the record at page 43.

I call the attention specifically to the reaction of the Mediation Board because insofar as there is any room for administrative determination, as to what is a proper subject to be entertained under the Railway Labor Act, this is it.

Now, there's no specific finding that is bargainable, and that is subject of mandatory bargaining as Mr. Elson pointed out in the District Court in response to a question.

But insofar as there is room for an administrative determination under the Railroad Labor Act, the Board after reviewing the application from Mediation wrote to party saying that apparently, a proper Section 6 notice had been served.

Pursuant to the docketing of the case, mediation was actively progressed under the assignment of the mediator from May the 22nd to May the 26th, 1958.

That is not included in the findings of fact but appears from the testimony undisputed appearing at page 154 of the record.

Now at this point, I need again to diverge from the exact sequence of events shown in the progression of the case because Mr. Heineman testified, and it's not disputed, that on May the 26th while the mediation was going on in Chicago, then his Director Personnel Mr. Van Batten was there representing the Railroad, and Vice President of the union was there representing the -- representing the organization.

On that date in Madison, Wisconsin, Mr. Heineman had a brief conversation in the car near the state office building with Mr. Leighty, the President of the Union and me.

During this conversation, according to his testimony and we don't deny it, he asked us whether we would care to discuss the central agency problem, and made no offer to discuss the Section 6 notice, but having recently procured authority of the South Dakota Commission of close 53 stations that enlargely assigned with others, he wanted to know whether we were -- would like to talk about the central agency plan.

We thought we were too far apart to talk about it.

And I think the best evidence that this had nothing whatever to do with the -- with the proposed contract change is to be found in the fact that although the mediation was going on that date in Chicago, neither Mr. Heineman nor Mr. Leighty reported the conversation to their representatives who were conducting or representing their respective organizations in the mediation conferences.

It was something entirely apart.

Now, the reason I mention that is that that incident has been used in this Court by the railroad to seek to create the impression that it was the union rather than the railroad that was refusing to bargain whereas the record is perfectly planned from the acknowledgment by the railroad of the very first letter that the union wrote namely on December the 24th, 1957 that the railroad positively and consistently refused to bargain.

And it was admitted in the testimony by Mr. Heineman that he never had agreed to bargain upon this particular proposal.

And it is also --

Justice John M. Harlan: I don't understand you as far it was, you just preferred to what was the proposal that you turned down?

Mr. Lester P. Schoene: Well, we didn't turned down any proposal by --

Justice John M. Harlan: Or that you have said you could discuss?

Mr. Lester P. Schoene: Well, what Mr. Heineman had said he was willing to discuss with us was the program when he had to outline of which by this time had developed or include several other States besides South Dakota, although proceedings in other States except South Dakota was still going forward.

And he was willing to discuss the impact of that problem upon the employees represented by the union.

And with that that -- I mean, we went too far apart on that subject to enter into any negotiations upon it.

Now, at page 2 of our reply brief, we have quoted, “Testimony of Mr. Heineman and which I cite he had mentioned that he had consistently refused to bargain upon the particular proposal that we make.”

Justice Charles E. Whittaker: There was just one proposal as I understand, am I right Mr. Schoene?

Mr. Lester P. Schoene: That is correct.

One --

Justice Charles E. Whittaker: You proposed the insertion of the covenant that no position in existence on December 3, 1957, it would be abolished or discontinued except by agreement between the carrier and the organization.

Mr. Lester P. Schoene: That's the proposal.

Justice Felix Frankfurter: Could I ask you this just to --

Mr. Lester P. Schoene: Sure, sure Mr. Justice.

Justice Felix Frankfurter: Could such a – isn't such an agreement depended upon what state commission is doing abolishing stations and so on?

Mr. Lester P. Schoene: I think not.

I would come to that in the course of the argument, but I don't get that the Railway Labor Act can be subordinated to the actions of state commissions.

I have --

Justice Felix Frankfurter: Then this must be a bargainable question under the Railway Labor Act?

Mr. Lester P. Schoene: Yes, sir.

And that's a --

Justice Felix Frankfurter: In your view?

Mr. Lester P. Schoene: That is in our view with this, that's right.

Justice Felix Frankfurter: I'm thinking of the early case of New Heavens where we held that certainly the public service commission except that it is called I have forgotten what, can abolish (Inaudible) the Railway Labor Act that's involved in the --

Mr. Lester P. Schoene: Well, I think that makes a big difference.

Justice Felix Frankfurter: All right.

Mr. Lester P. Schoene: Well, Mr. Heineman's testimony was as it appears at page 104 of the record, you understood my testimony correctly that after the proposed rule of the order of railroad telegraphers served in December of 1957, I personally participated in making the decision that the telegraphers should be told then it is not a bargainable subject matter.

I was then fully aware of that attitude of the carrier from its inception.

That attitude on the party -- on the particular rule has not been modified nor in my opinion, can it be.

Mediation services of the National Mediation Board, as shown in finding number 8 on page 353 of the record terminated on May of the 27th, 1958.

Arbitration was proffered as the Mediation Board has required to do as its last final act when in finds that it cannot resolve the controversy and both parties declined the arbitration.

Accordingly, on July the 10th, 1958, as shown by finding number 10, the Union initiated a strike both among its membership and received almost unanimous authorization to call a strike over the failure and refusal of the railroad to bargain about this issue.

Strike call and instructions were issued to the membership on August the 18th calling a strike for August the 21st and that's covered by finding number 11.

Now, on that same day, August the 18th, the National Mediation Board, although it had previously completely processed the case through the normal procedures have mediated it and it concluded that it could not resolve the issues and proffered arbitration as its last required act, again, entered the case on an emergency basis which it frequently does when a strike is eminent and adopted in this case, this new entry into the matter as its docket number E175.

That appears in finding number 12 and it mediated the case from the -- under that emergency intervention until August 20th, 1958, the day before that the date set for the strike.

On August the 20th, it again withdrew and the strike was set to begin the following morning.

I mention this emergency mediation particularly because it too, gives rise to an issue in the case.

As I indicated in description of the District Court's decision, the District Court denied any prominent injunction.

He did however feel that the reentry into them abide the Mediation Board in to the case on the eve of the strike set a second 30-day waiting period into operation, and that therefore, the strike would have to be postponed until September the 19th and they issued that's -- an injunction accordingly until September the 19th, 1958 enjoining the strike until that date.

Justice Charles E. Whittaker: Would you tell me right exact place Mr. Schoene how did he ordered the action to dismiss and at the same time ordered an injunction to issue?

Mr. Lester P. Schoene: What -- what the Court did in its order which appears at page 259 is first to order the injunction of issue until midnight September 19, 1958.

Following that is that it is further ordered that the prayer for injunctive relief extending beyond September the 19th, 1958 and --

Justice William J. Brennan: 1959?

Mr. Lester P. Schoene: No that's –-

Justice William J. Brennan: Page 259 of the record?

Mr. Lester P. Schoene: No, 359 I'm sorry.

It is further ordered that the prayer for injunctive relief extending beyond September 19, 1958 and any other relief prayed for in the complaint is amended and it this hereby denied and except for the relief here in above given the complaint as amended is hereby dismissed.

Now, on the same day Mediation Board terminated its emergency service --

Justice Felix Frankfurter: May I just put in a minute?

Mr. Lester P. Schoene: Surely.

Justice Felix Frankfurter: This injunction in of December 19th because of his assumption that 30 days more could be (Inaudible) have a substantial order of that --

Mr. Lester P. Schoene: That -- that's right.

Justice Felix Frankfurter: Was that contested before the District Court?

Mr. Lester P. Schoene: Oh, yes.

That -- by that.

Justice Felix Frankfurter: I mean, it's merely as to the -- as to the discretionary power to issue it but as to the power to issue this?

Mr. Lester P. Schoene: As to the --

Justice Felix Frankfurter: On the fraction of 30-day extension?

Mr. Lester P. Schoene: A certain power as to the propriety, as to -- and if an appeal was taken from that portion of the order as well as --

Justice Felix Frankfurter: I know that there is no second 30-day?

Mr. Lester P. Schoene: That's right.

Justice Charles E. Whittaker: I must admit this new order because I never have seen a notice like this?

Mr. Lester P. Schoene: Well, I don't think I have either, but, I -- I don't see that there's anything basically improper about it except the 30-day restraint that -- And also on the same day that the -- that the Mediation Board terminated its services on August 20th.

This -- the complaint in this action was filed in the District Court and the motion for temporary restraining order also filed.

The Court heard arguments on the motion for temporary restraining order throughout the day and throughout the afternoon of August 20th and at the close of the day, issued a temporary restraining order and continued the hearing for the next several days.

At this point, another diverting factor enters in.

The Railroad on August the 21st, the day after the litigation had began, the day after the temporary restraining order had been issued wrote a letter to the union saying your proposal of December 23rd is in violation of Article 6, of the National Mediation Agreement of November 1, 1956.

Now Article 6 of the Mediation Agreement of November 1, 1956 set a term on certain kinds of proposals such as wages, overtime payments, changes and rights of pay, changes in health and welfare payments which would not be proposed for change until after November 1, 1959.

Proposals relating the stabilization of employment were expressly accepted from Article 6 and as I say this was raised for the first time after the proposal had been before the railroad for well over nine months, after the strike had been called, after the litigation had been begun, and the temporary restraining order had been issued, the railroad also announced its proposal to submit to the National Railroad Adjustment Board the question of whether the proposal was in violation of Article 6 of the 1956 agreement.

This was obviously an opportunistic and belated effort to invoke the authority of the Chicago River case.

And the reason for this particular submission is very easy to trace because in the argument in the District Court, the day before, with respect to the temporary retraining order, the Railroad had argued that the real heart of this controversy is the union's claims that the station agency program would give rise to claims under the existing agreement.

And therefore, the Court should look behind this proposal to amend the contract and should enjoin the strike on the authority of the Chicago River case.

We responded that even though -- even if you assume that the railroad is right in its inferences, still it's not with Chicago River case because as this Court's decision a few weeks after the Chicago River case pointed out in Manion against the Kansas City Terminal Railway Company that the Chicago River case is predicated upon claims being pending before the National Railroad Adjustment Board and they had no claims pending before the National Railroad Adjustment Board with respect to violations of existing contracts.

Not only that, they were not in a position to submit even belatedly and opportunistically any claims about violation of the existing contract because they had no such claims on the property.

They had no controversy on the property about it.

So in order to get around the Manion case --

Justice Felix Frankfurter: I don't understand that Mr. Schoene.

They had no claims on the property?

Mr. Lester P. Schoene: That's right.

Justice Felix Frankfurter: I don't know what that means.

Mr. Lester P. Schoene: The -- the organization have made no claims that the Station Agency Program violated the existing agreement.

There was -- there was disagreement about that but -- but no claims had been filed on the management for any violation existing --

Justice Felix Frankfurter: To clear up another thing, first is the outstanding agreement which they sought to -- of which they gave the notice -- to which you gave the notice that you wanted an amendment.

A minute ago, few minutes ago you spoke of the Mediation Agreement of 1956, what was that?

Mr. Lester P. Schoene: The Mediation Agreement of 1956 contains amendments to existing agreements of some 15 organizations on a national basis with the railroads represented by Carriers Conference Committees.

Those amendments related to rates of pay --

Justice Felix Frankfurter: Including Chicago North Western?

Mr. Lester P. Schoene: Including Chicago North Western and that dealt primarily with rates of pay and revisions in the health and wealth program.

Justice Charles E. Whittaker: Would that then just a part of the -- of the bargaining agreement between departments?

Mr. Lester P. Schoene: Yes.

That occurs frequently in the railroad industry Mr. Justice Whittaker.

It's the only industry that I know of where it happens with such frequency.

Our basic agreements continue from year to year and are amended from time to time and sometimes by joint agreements which in this case should have 15 unions and about a 150 railroads.

Justice Felix Frankfurter: They continue automatically?

Mr. Lester P. Schoene: They continue automatically until somebody serves the notice to change it under the Railway Labor Act which requires a 30-day notice.

So, quite obviously because the railroad was not in the position to put before the Adjustment Board any claims under the existing collective bargaining agreement, it felt nevertheless, that by asserting on each part, a violation by the union of the National Mediation Agreement that it could generate a controversy that it could then submit to the Adjustment Board and come in and say, “now we have a dispute pending.”

Are they --

Justice Potter Stewart: Your -- your point is that their tactic was to convert this into a so-called "minor disputes?"

Mr. Lester P. Schoene: That actually the exactly, Mr. Justice.

Justice William J. Brennan: But to do so, solely for the purposes of this jurisdiction conjunctive relief, is that it?

Mr. Lester P. Schoene: That -- that's right, that's right.

And the -- on -- on that point incidentally, the District Court found as a matter of fact that no dispute giving rise to this part was a minor dispute and found specifically that's been the dispute that did give rise to the attempted strike was the proposal from contract amendment.

Justice Felix Frankfurter: Mr. Schoene, would you take care of curiosity of mine if you stay --

Mr. Lester P. Schoene: If I can.

Justice Felix Frankfurter: By referring to finding that it becomes now that discussing the significance whether there is a controversy as to whether the findings are challenged in the Court of Appeals and they are challenged here?

Mr. Lester P. Schoene: There is no challenge to any on the findings with the exception of the last sentence of finding number 17.

That -- that finding is a --

Justice Felix Frankfurter: Could that (Voice overlap) substantially identical to the rule?

Mr. Lester P. Schoene: That's right and the challenge there as I understand it is that the evidence on which that particular sentence was based on those copies of two agreements which are identical in substance to the proposal here involved except that they are for a term instead of they, as in this proposal indefinite with subject to revision at any time.

Justice Felix Frankfurter: I mean, was that challenged before the Court of Appeals?

Mr. Lester P. Schoene: I believe it was although --

Justice Felix Frankfurter: (Voice overlap) --

Mr. Lester P. Schoene: I beg your pardon.

Justice Felix Frankfurter: Could they have relevance to the constitution?

Mr. Lester P. Schoene: I don't think so.

Justice Felix Frankfurter: All right.

So --

Mr. Lester P. Schoene: I -- I don't think so, but with that one exception, the brief here says that they are challenging none other findings.

Justice Felix Frankfurter: All right.

Mr. Lester P. Schoene: Now, the hearings before the District Court continued with some interruptions until September the 5th, 1958 and under extensions of the temporary restraining order, that appears from the documentaries on the first page of the record.

On September the 5th, the District Court rendered its opinion which as I have already indicated, denied injunctive relief beyond September the 19th but granted injunctive relief until that date.

That was on Friday and so, by mutual agreement, the entry of the final decree and findings in order was postponed until Monday, September the 8th so as to give both sides an opportunity to draft proposed findings and decree.

Now, in addition to the findings that I have already referred to under my discussion of the facts, I would like to make a number of other significant findings, beginning with the finding number 17 on page 356 of the record.

The Court found number 17, the proposed contract change incorporated on the Section 6 notice served by the defendant to (Inaudible) on December 23rd, 1957 relates to the length or term of employment as well as stabilization of employment.

Collective bargaining as to the length of term of employment is common place.

There are a variety of collective bargaining provisions in the railroad industry relating to stabilization of employment as such including provisions for severance allowance, supplementary unemployment compensation benefits and guaranteed employment.

The latter provision in one instance goes back more than 30 years and then the challenged finding of the contract provision substantially identical to the rule proposed here -- proposed by the defendant to (Inaudible) are in existence on at least two railroads and as I understand, the challenge goes to the substantial identity rather than for the existence on the agreements.

Justice John M. Harlan: Was that finding overruled by the Court of Appeals?

Mr. Lester P. Schoene: No.

No, the Court of Appeals did not disturb any of the findings of the District Court.

Justice John M. Harlan: (Inaudible) if I remember –-

Mr. Lester P. Schoene: 18 in the contract changed proposed by defendant (Inaudible) in the Section 6 notice of December 23, 1957 relates to rates of pay rules and working conditions and these are bargaining relations under the Railway Labor Act.

19, the dispute giving rise to the proposed strike goes out on the failure of the parties to reach agreement on the proposed contract change incorporated on the Section 6 notice served by defendant (Inaudible) by the plaintiff on December 23rd, 1957.

20, the plaintiff has refused to negotiate, infer, mediate or otherwise treat with defendant (Inaudible) on the proposed change and agreement set forth in the Section 6 notice served by defendant to (Inaudible) on plaintiff on December 23rd, 1957.

The plaintiff did show willingness to negotiate upon the Central Agency Plan including a possibility concerning severance pay.

That last sentence grows out of the conversation with Mr. Heineman in Madison, Wisconsin on May the 26th.

21, the dispute giving rise to the proposed strike is a major dispute and not a minor agreement under the Railway Labor Act.

There is no issue involved there and is properly referable to the National Railroad Adjustment Board.

From the various findings, the Court concluded as a matter of law, first that the complaint as amended fails to state a claim upon which relief can be granted except for the issuance of an injunction expiring at midnight, September 19, 1958 to the defendant to (Inaudible) serving and progressing in Section 6 notice of December 3rd -- 23rd 1957 has conformed to all the procedures and requirements of the Railway Labor Act.

Three, no issue no involved in the proposed strike which plaintiff seeks to enjoin is properly referable to the National Railroad Adjustment Board.

Four, the proposal contained in Section 6 notice served on December 23, 1957 by the defendant to (Inaudible) upon the plaintiff presents an issue which is a proper subject of negotiation and is bargainable under the provisions of the Railway Labor Act.

Five, the proffer of services on an emergency basis by the National Mediation Board and its acceptance by the plaintiff and the defendant to (Inaudible) initiated the new 30-day cooling off period under the Railway Labor Act running from the termination of such services on August 20, 1958.

Sixth, the Court is without jurisdiction to grant injunctive relief except for an injunction expiring at midnight, September 19, 1958.

And --

Justice Potter Stewart: You -- you understand that the -- any part of the Court's conclusion to the law were based on the Norris-LaGuardia Act?

Mr. Lester P. Schoene: Yes, indeed.

I think it is -- it is clear that from the argument before the Court which on our part was devoted almost entirely to the Norris-LaGuardia Act by the conclusion number six.

Justice Potter Stewart: There's no reference at all, direct sanction is there?

Mr. Lester P. Schoene: I beg your pardon?

Justice Potter Stewart: Is there any reference in these findings and conclusions to the statute?

Mr. Lester P. Schoene: There is in the opinion, Mr. Justice Stewart.

The opinion of the Court appears at page 165 and following and I think -- and I think it's there indicated that the -- the finding number six is predicated on the Norris-LaGuardia Act.

It is also apparent from the issues before the Court particularly the issues raised by our answer that the Norris-LaGuardia Act was invoked and is the basis for our conclusion number six that the Court is without jurisdiction to grant injunctive relief except for an injunction expiring at midnight, September the 19th, 1958.

Justice Charles E. Whittaker: That raises the old question that I had a while ago.

I don't understand how the Court is without jurisdiction, it can be subject to some exemption for truth and then maybe it doesn't make any difference here, don't waste time about it but I just want to withstand it.

Mr. Lester P. Schoene: Well I -- I can -- I can understand your difficulty and as a matter of fact, this morning I struck out of my notes an argument predicated upon that.

And the union appealed from a temporary restraining order on the basis by the Norris-LaGuardia Act and from the continuances of the temporary restraining order and from the injunction to September the 19th.

The railroad on the other hand appealed from the denial of permanent relief and the dismissal of the complaint.

Then on September the 16th, 1958 having filed the appeal, the railroad appeared before the District Court and sought an injunction pending appeal pursuant to Rule 62 (c) of the Federal Rules of Civil Procedure.

The Court, although very much troubled about its jurisdiction to grant such an injunction under the Norris-LaGuardia Act, having just held eight days before that it was without further jurisdiction in the matter, nevertheless granted an injunction pending appeal.

The difficulty that the Court had with respect to this inconsistency between its having held that it had no jurisdiction beyond September the 19th is set forth in the record at page 369.

The Court said it was very much troubled about whether he has jurisdiction.

He doesn't want to exceed his jurisdiction.

He recognizes the inconsistency between holding that he has no jurisdiction and still exercising jurisdiction purportedly under Rule 62 (c) in clear contravention of the Norris-LaGuardia Act.

Nevertheless, the injunction was issued and the union then amended its notice of appeal to include appeal from the injunction pending appeal.

Justice John M. Harlan: Is that issue before us the 62 (c) issue?

Mr. Lester P. Schoene: I beg your pardon?

Justice John M. Harlan: Is that 62 (c) issue before us?

Mr. Lester P. Schoene: Yes, it is.

Justice John M. Harlan: Where is that?

I would suppose that was all merged (Inaudible) injunction.

Mr. Lester P. Schoene: No.

Both the injunction until September the19th and the injunction pending appeal are not moot because in both cases, bond was posted in the amount of in the amount of $50,000.

And if those injunctions were wrongfully issued we're entitled in these very procedures and in the Norris-LaGuardia Act to recover under the bond.

And the issue as to both injunctions was preserved on appeal and although not specifically considered by the Court of Appeals was necessarily disposed of by its holding that a permanent injunction should have issued.

Justice Charles E. Whittaker: Well I didn't understand Mr. Justice Harlan to ask you to moot but that whether they were merged in the merits -- in the (Inaudible)

Mr. Lester P. Schoene: Yes, I -- you are right.

I thought Mr. Justice Harlan's first question was, is the issue --

Justice John M. Harlan: What you are saying is if they are -- they are now appears so that we can reach them if we want to.

Mr. Lester P. Schoene: That's -- now, that -- that completes the resume of the facts up to the decision of the Court of Appeals which I have already outlined.

I -- my time is running short.

I want to reserve a little time for rebuttal so I'm going to have to be rather rapid in my discussion of the legal issues.

Justice Hugo L. Black: Would mind repeating or could rebound it and state it now very briefly what you consider the legal issues that we have to decide?

Mr. Lester P. Schoene: Yes.

I think the -- the legal issues are before you are in the first place whether this proposal presents a bargainable issue under the Railway Labor Act.

If it does, then I think some of the other tendered issues disappear because in that case, I'd take it there would be no doubt that the Norris-LaGuardia Act is applicable and the jurisdiction of the District Court limited by the terms of that Act.

Even it is our position that even if no proposals for compulsory bargainability under the Railway Labor Act is presented, it nevertheless does not follow that there's anything illegal about making the proposal or anything illegal about striking on the count of the carrier's refusal to bargain about it nor any reason to hold the Norris-LaGuardia Act inapplicable to the resulting labor dispute.

Justice Hugo L. Black: In other words, if they could have decided that you had the right to bargain on that --

Mr. Lester P. Schoene: But then I see no -- I -- I think then the issue as to Norris-LaGuardia disappears because Norris-LaGuardia clearly is applicable, the contention that it is not --

Justice Hugo L. Black: But suppose it decided the other way, what's left is --

Mr. Lester P. Schoene: Well, that then, it is still our contention that there's nothing illegal about the strike even if the railroad didn't have to bargain with the --

Justice Hugo L. Black: Do you mean -- do you mean if it's permitted?

Mr. Lester P. Schoene: That it's permitted and that there is no basis for holding the Norris-LaGuardia Act inapplicable even in that situation.

Justice Hugo L. Black: Well I don't see the difference between those two, I don't quite understand it.

It seems to me you're saying that if you're authorized to bargain on those points by the Act and that the Court was wrong in saying so -- even in wrong in saying so that the Norris-LaGuardia Act should not have been ignored.

Mr. Lester P. Schoene: I think the difference is simply this.

The -- it's a question of whether the railroad is under a legal obligation to bargain with us on the one hand --

Justice Hugo L. Black: But it is -- it is if it is permitted, isn't it?

Mr. Lester P. Schoene: I don't think so.

Justice Hugo L. Black: You don't think so?

Mr. Lester P. Schoene: Well, wait a minute --

Justice John M. Harlan: Mandatory bargaining exactly.

Mr. Lester P. Schoene: And I -- my basic position is exactly what you have just stated, Mr. Justice Black, namely that the entire area of interest between employers and employees is subject to bargaining and subject to mandatory bargaining.

If however --

Justice Felix Frankfurter: Do you mean anything that may forgetting the law, anything that seems rationally related to the industrial relations, to the employer and employees on railroad is the fit subject to be tendered by the union?

Mr. Lester P. Schoene: Well, that is right.

Justice Felix Frankfurter: And -- and required to be responded through the Railway Labor Act, is that it?

Mr. Lester P. Schoene: That's exactly it.

Justice William J. Brennan: And that Norris-LaGuardia?

Mr. Lester P. Schoene: Well Norris-LaGuardia, I say, is applicable –-

Justice Felix Frankfurter: That follows –-

Mr. Lester P. Schoene: That follows -- Norris-LaGuardia is applicable --

Justice William J. Brennan: That's not another issue here although it'd be --

Mr. Lester P. Schoene: Yes.

Justice William J. Brennan: It was related this way.

Whether -- whether the dispute which brought you before the Adjustment Board.

Mr. Lester P. Schoene: That -- that is correct that there is another issue which is imposed and which the respondent says is an independent ground for sustaining the decision below is this related submission to the Adjustment Board.

And --

Justice Felix Frankfurter: Mr. Schoene, in the interest of time, I wonder if you can help all of us, if you state it again without arguing, leaving your time, what the materials are on which the first issue that you've stated to be resolved by this Court?

And what am I look in decisions of this Court in practice before those various branches under the Railway Labor Act, et cetera, et cetera?

Mr. Lester P. Schoene: Yes.

I'll be glad to indicate that.

You look first to the Railway Labor Act itself and you will find that Section 2 first of the Railway Labor Act, that's 152 in Title 45 of the U.S. Code says it shall be the duty of all carriers --

Justice Felix Frankfurter: Would you mind reading it to me again?

Mr. Lester P. Schoene: It's Title 45 --

Justice Felix Frankfurter: Yes, I know that.

Mr. Lester P. Schoene: 152 first.

Justice Felix Frankfurter: All right, thank you.

Mr. Lester P. Schoene: It should be the duty of all carriers, their officers, agents, and employees to exert every reasonable effort to make and maintain agreements concerning rates of pay, rules, and working conditions, and to settle all disputes, and thus, it has limited to making agreements concerning rates of pay rules, and working conditions, but to settle all disputes whether arising out of the application of such agreements or otherwise in order to avoid any interruption to commerce or to the operation of any carrier growing out of any dispute between the carrier and the employees thereof.

Justice Felix Frankfurter: I don't want to argue it but --

Mr. Lester P. Schoene: Secondly --

Justice Felix Frankfurter: But may I ask whether in the breathe of your statement, would I be entitled to infer if the trainmen today, 1960 think that their interest requires protection from membership on the Board of Directors, you would regard that as something that you have the right to present?

Mr. Lester P. Schoene: No, I would not.

And I think that would be called contrary to the specific prohibition that neither side shall interfere with the choice by the other of its representatives under the Act.

And I think just as if a railroad felt that it required representation in the union which would violate the counterpart of that prohibition similarly, the brotherhood would have no right to bargain for representation on the -- on the Board of Directors directly.

Justice Felix Frankfurter: Well, but it isn't as broad as I have phrased it namely, anything which to thinking person not versed in law would be a relevant consideration to industrial relation at all.

Mr. Lester P. Schoene: Well, I -- I suppose it is subject to those specific limitations contained in the Act. But I wouldn't recognize any others.

Now secondly, you have 27 years of construction by the parties of what this scope of bargaining is.

We have included in the appendix to our brief a survey what has been the subject matter of bargaining under this Act, a great variety of it particularly bargaining without question until 1953 by the parties over all sorts of subject matter especially stable as action of employment.

And --

Justice Potter Stewart: Of course there's -- what your opponents call the lengthy excursion beyond the courtroom.

In other words, that's not in the record, free of the dusty baggage of cross-examination, authentication, and similar inconveniences entrusted upon the judicial process.

Mr. Lester P. Schoene: Yes, that's what I call the ultimate version that they've cast on it (Voice Overlap) --

Justice Potter Stewart: That isn't true but that was not -- that's not in the record.

Mr. Lester P. Schoene: That's entirely true, that is not in the record, this is a matter of public information that shall -- that contemporaneous construction of the law by the parties.

Justice Felix Frankfurter: Not judicial knowledge but judicial notice.

Mr. Lester P. Schoene: That's right and beginning at page 57 of that brief, we have also assembled what has happened since 1953 when this issue of the limited conception of bargainability was first raised with respect to our health and welfare proposals.

You will note from that tabulation that with respect to over 50 proposals since 1953, the railroads have raised this issue of non-bargainability.

It has become a regular tactic of bargaining puts all that issue into the picture.

So that the railroad -- the union is put in the position where it must take what the railroad wants or face litigation upon that issue.

I will reserve the balance of my time for rebuttal.

Chief Justice Earl Warren: Mr. McGowan.

Argument of Carl Mcgowan

Mr. Carl Mcgowan: Mr. Chief Justice and may it please the Court.

I will address myself first to the question of jurisdiction of the Federal District Court because the Court expressed interest in it.

Mr. Schoene concluded by saying that he would prefer to admit that he was not clear on whether there was jurisdiction and whether there wasn't.

I think I can make that clear if not to him at least to this Court.

The reference was made to the fact that the T P&W case, in the TP&W case, this Court left the question of jurisdiction unresolved in that situation which was one of where the injunction is found upon the back of their acts of violence committed by the brotherhood.

And I think Mr. Justice Stewart in the New York Central case, when he was still on Circuit, dissented from a finding of federal jurisdiction in that case because he felt that the reasoning in the -- in the -- judgment in dissent in the TP&W case was persuasive.

My comment on that is that I think the TP&W case has turn analogous to the case of the man who stands along the right of way and shoots the gun on interstate train.

And whether or not, there is federal jurisdiction in that situation, I think it is a real question.

I would respectfully call your attention, Justice Stewart, to the -- to a case decided earlier in Sixth Circuit, the Grand International Brotherhood of Locomotive Engineers, 226 F.2d, in which a white employee sought an injunction against a contract which the -- his union and the railroad that was proposed -- supposed to enter into.

There was no diversity there, there was no diversity in our case that the District Court in that case dismissed the complaint because of lack of jurisdiction.

The Sixth Circuit reversed noting that what was really asserted there was a right of action accruing under the Railway Labor Act to be free of the kind of contract which the railroad and the brotherhood proposed to negotiate and that whether or not that right could be established at trial of the case.

There was jurisdiction to hear and decide on the merits on that claim.

Justice William O. Douglas: What was the citation to that case?

Mr. Carl Mcgowan: That sir is 226 F.2d, 604, certiorari denied, 350 U.S. 967 and I suggest to, if I may, to Justice Stewart that his participation in that opinion seems to me to be more relevant to the question of jurisdiction here than the doubts he expressed in New York Central case when he was addressing himself to the rationale.

It was worked out by judgment in the Seventh Circuit followed by your colleagues in New York Central case.

I myself in the New York Central case would not have depended, I believe, on the sheer interference with the carriers' obligation under the Interstate Commerce Act to base jurisdiction.

Because I think in the New York Central case, what the carrier really was claiming was a right under the Railway Labor Act to be free of a strike under the circumstances where the union had moved to take no action under the Railway Labor Act by way of a new contract, demand, or anything else to lay illegal basis for a strike under the Railway Labor Act.

I think if the jurisdictional question of the trades in those terms, it would resemble the (Inaudible) case more than the TP&W case.

Justice Charles E. Whittaker: Mr. McGowan may I ask you sir, as I understand, your jurisdiction here was based upon 1331 and 1337.

Mr. Carl Mcgowan: Yes, sir.

Justice Charles E. Whittaker: Now, the right then to fall within those sections must be one “arising under” not involving the Constitution or laws, is that not true?

Mr. Carl Mcgowan: That is right, sir.

Justice Charles E. Whittaker: Now then here, does your action do more than involve the Constitution or laws?

Does it arise under the Constitution or laws of United States?

Mr. Carl Mcgowan: Well, I believe it does, sir.

I think I can make that clear if I state what our precise contention is.

And I won't unless I denote this moratorium issue and the (Inaudible) issue because that's unrelated aspect.

It was not central to our main contention.

We say that if this contract demand was proper under all the circumstances and by that I mean within the contemplation of Congress under all the circumstances as a proper demand upon the railroad, why of course it's in the basis of a legal strike.

And there could have been no injunction ground to us, Norris-LaGuardia Act or not.

Conversely, we say that if this demand was not within the congressional contemplation of the Railway Labor Act, it cannot be made the basis of illegal strike at the end of the exhaustion of the Railway Labor Act procedures.

And therefore, under the Railway Labor Act, construed in the light of -- of all the congressional policies reflected to other statutes and respect to transportation, we have a right to be free of that strike.

Now, that right in my judgment arises on the Railway Labor Act.

Its existence turns upon whether you construe the Railway Labor Act the way we say it should be construed or whether you do not construe the way we should do it.

We say it should be --

Justice Hugo L. Black: What you're saying isn't it that if the cases decided if the Act is construed one way, the case will have to be decided one way.

If the Act is construe the other way, the case has to be decided in another way?

Mr. Carl Mcgowan: If construe in other way, Mr. Justice Black, we win, if construed other way, we loose and as I understand it, that has been a familiar test of federal jurisdiction in these cases.

Now, I won't cite the language of that effect because I'm sure it's unnecessary.

Now, the ORT attached very premise upon which our contention rests, namely that they say there can be no such thing as an improper demand under Section 6 of the Railway Labor Act.

Mr. Schoene has now repeated somewhat from that because he recognized that case of one hypothetical that obviously one of the demands that could not be made the right -- the basis for legal strike.

And of course, they don't really mean what they say, when they say that no demand can be treated as improper under the Railway Labor Act because it must be remembered the Railway Labor Act is of two-way street.

The carriers can serve demands too and they can lock out the employees at the end of the exhaustion of the Railway Labor Act procedures if their demand was a proper one.

Suppose that we would decide that we couldn't live with this kind of obstructionism with respect to modernization and that we serve a contract demand on the ORT that you cannot intervene in legal proceedings for the state commissions, for the Interstate Commerce Commission in which we're seeking authority to modernize our operations without the consent of the railroad.

You think they would bargain about that, of course, not.

They wouldn't have to and we couldn't impound upon that a legal lockout at the end of the exhaustion of the procedures under the Railway Labor Act.

So it is obvious that they do not wish -- really wish to press the contention all the way that there are no limitations upon the kind of demands that can be met under Railway Labor Act.

The second more important reason why that attack on our premise is unsound is because this Court has held in the racial discrimination cases that there are demands which cannot be proper under Railway Labor Act and which cannot be made the basis of a legal strike on the Railway Labor Act and which can be enjoined without reference to Norris-LaGuardia.

And to the extent that they have tried to make it appear in their brief that all those cases deal with the situation where the brotherhood was bargaining for something which was contrary to the interest of a minority of the group, that brotherhood represented, I say, what about Howard?

Howard was the last case in that series.

Howard involved bargaining for the members of the class which the brotherhood represented because there, the Negro minority had their own union.

They were represented by the -- the brotherhood that came forward in that case with the demand that a class of jobs called porters be abolished.

I presume that the brotherhood in that case was stabilizing their employment.

They were asking for all the jobs and an another group failed and it didn't affect their members at all, so that that, that particular rejection of that demand is a proper demand under Railway Labor Act, didn't turn at all upon construction of the Railway Labor Act with respect to the duty owed by the union to the members of the class represented.

It was rejected because -- in the words of Howard Larvey which I think puts our whole case very well.

It was because of the repugnance of the union objectives in making demands to a federal policy implied judicial construction of the Railway Labor Act.

We say that when you look at the -- this demand, and the setting in which it was made with reference to its purpose and effect, and what was really aimed at, that there is an obvious repugnance between the union objectives lying behind that demand and a federal policy to be implied from a judicial construction of the Railway Labor Act.

Justice Felix Frankfurter: Mr. McGowan, how much would one have to travel outside the findings of the District Court to validate your last sentence?

Mr. Carl Mcgowan: Sir, I'd like to deal with those findings for a moment.

It is true as I've said in my brief that I challenge only one true finding of fact as distinct from the conclusions of law which were put under that heading.

And that was the last sentence of the finding number 17, and I agree that it's not a very important point, but if you will look at some of the last findings that Mr. Schoene read to you, number 18 for example, the contract change proposed by the defendant Telegraphers in Section 6 notice, December 23, relates to rates of payrolls and work conditions with the bargaining under National Railway Labor Act, that's our case.

That's the conclusion of law on the facts of this case and Judge Perry indeed said that he didn't distinguish too sharply between findings of fact and conclusions of law and this one is specific and I'm going to object to --

Justice Felix Frankfurter: Except by labelling them as such.

Mr. Carl Mcgowan: I beg your pardon?

Justice Felix Frankfurter: Except by labelling them as such.

Mr. Carl Mcgowan: Except by labelling.

That is right.

But in -- when I challenged this particular finding, he said, this again could very well be in the conclusions of law as far as that is concerned and the other findings that they in --

Justice Hugo L. Black: May I ask you this, if it doesn't bother you?

Mr. Carl Mcgowan: Yes, sir.

Justice Hugo L. Black: The Court of Appeals reversed precisely on that point, didn't it?

That this language didn't permit --

Mr. Carl Mcgowan: Yes --

Justice Hugo L. Black: -- bargaining on the proposal they made.

Mr. Carl Mcgowan: Well, Mr. Schoene said that the Court of Appeals didn't disturb the findings that like and less that the Court of Appeals virtually wiped out the findings in this case and found that the -- that the demand was aimed at an objective which I will describe in a moment and that it was not -- that Section 6 notice did not relate to rates of payrolls and working conditions but again, if it is treated as a finding of fact they reversed it, I say this is the conclusion of law.

But there's nothing in these findings, there are nothing in these findings with which we cannot live and still establish in this Court the propriety of relief we got from the Court of Appeals.

Justice Hugo L. Black: I didn't mean to indicate that they reversed it to these findings of facts.

I meant that they held that the statute, under that statutory language, this proposal could not be made.

Mr. Carl Mcgowan: That is right, sir.

Justice Hugo L. Black: I don't know to what extent that depends on the fact.

Justice Charles E. Whittaker: But the whole -- it couldn't be made -- if the whole couldn't be made or only that it was on exclusive management prerogative over which (Inaudible) bargained.

Now, which is (Inaudible)?

Mr. Carl Mcgowan: Sir, let me hasten to say that I don't think this Court is held very far to our decision by analyzing this problem in terms of management prerogative.

I think I can agree with my brother counsel in that effect.

He won't agree with me when I also said I don't think this Court is going to be held very far towards our decision by analyzing this problem in terms of the right to strike or the literal provisions of religion to the Norris-LaGuardia Act or most importantly, the allegedly limitless scope of collective bargaining in an unregulated industry.

That brings me to the -- to the -- what the facts are and then what this command is really all about and what this lawsuit is really all about.

We have set forth in our brief a number -- based on the testimony whatever I know is about the condition of railroad industry and that is that without modernization, it is in real trouble that if the North Western Railroad presents an aggravated condition of that I can tell you.

The testimony shows that when the new management took control on April 1, 1956, there had been $8 million loss in the first quarter.

The payrolls were in danger.

Our wage revenue ratio was the highest of any railroad in the country which is to say that ratio of wages paid to revenues and the North Western is slipping right down that slide towards this Court where it was less than 20 years ago.

One of the -- the new management did a number of things.

They dieselized fully, they spent what few funds they had on a new car shop in Iowa which centralized repair operations.

One of the things they found that was most in need of action was the fact that Northwestern was built to the grainger country and it is a grain-carrying railroad very heavily, and it was laid out from the last century where about every five to 10 miles where there's an elevator and a lumber yard, there was a station with a one-man agent there.

With the passage of time, the building of hard roads right alongside of this railroad, business, now like business language, trains disappeared, and the agents found themselves without anything to do.

We conceives a project of trying to keep down the expense of those branch lines and these are the mostly rural branch lines by trying to reduce the cost of the agent's expense and with the hard road and the telephone, we thought it was perfectly feasible to have one agent go up the road five miles and do whatever is needed up there and down the road five miles and do whatever is needed there.

So, we devised the Central Agency Plans.

We filed our petition under the state statute.

We filed in South Dakota, November 5, 1957.

Hearings were held throughout the State.

November 26 to January 17, the Telegraphers appeared in those hearings, protested, gave evidence, filed briefs, participated in oral argument and did everything they could.

It's perfect to proper of the litigant to try to convince the Commission that it was not in the company's interest, for the convenience necessity for that plan we put in effect.

They did the same thing in Iowa.

They did the same thing in Minnesota.

They did the same thing in Wisconsin.

In all four of which States, we received eventually orders from the State Commission ordering us or directing us, authorizing us to put into effect with the one exception of South Dakota where South Dakota said, “We think this is so important that we direct you to put it into effect under the terms of the quite separate statute giving us power over the regulation of service and the requirement of service of a railroad.

Now --

Justice John M. Harlan: Could these State Commissions have directed you to curtail your agency -- your stations if you had not wished to do so?

Mr. Carl Mcgowan: South Dakota said that it only could but that's what it did.

We filed them --

Justice John M. Harlan: Under an application?

Mr. Carl Mcgowan: We filed under a separate section of the statute which said that whenever we -- even if it's close or consolidated a station or remove the agent, we should get permission of the state authority.

They said that well, you're not really changing the service here because the agents here were serving both places, the customers are going to get the service that therefore, we don't even think this statute is perhaps adequate, but just to make it clear, we're going to ship over on another statute on which we could have gone out and ordered you too rearrange station service, either of increasing it or lowering it and therefore you are directed to -- to put this order in effect forthwith.

Now in the three other states, they simply issued orders approving and authorizing us to put the matter in effect (Inaudible) with.

Justice Felix Frankfurter: Now the dates of these state orders are relevant to the dates of this litigation?

Mr. Carl Mcgowan: Very well, Your Honor, (Inaudible).

We filed in South Dakota November 5.

We announced at that time that this was -- we want to reassure South Dakota in order to single him out for discrimination.

So we made a public announcement and put it into petition that we were not doing this in South Dakota.

This was going to be a systemwide program.

So that Telegraphers knew on November 5 that we were going to initiate far reaching reorganization of a station agency program.

It was less than six weeks later that we were served with this Section 6 demand.

Now, I think the chronology is -- is very significant and I like to thank Mr. Schoene of being the good lawyer that he is, but he had also read the New York Central case of Justice Stewart, where the brotherhood simply walking out in protest against the closing of the yard, had nothing under the Railway Labor Act on which to found a -- to found a legal strike.

He knew as long as knew that we were starting a long hard battle with the Telegraphers that a lot of other people for that matter over the Central Agency Plan, these hearings were going to drag on for the States for months and months and that's just the way it work out.

By putting that demand and when they did, and assuming the exhaustion of the Railway Labor Act Procedures withstanding order about the time they got -- we got our first order if we got one, they would have the muscle of the strike weapon and that's exactly the way it worked out.

Now, why do I say that -- why do I say that -- that this demand was aimed at the Central Agency Plan?

I'm not just drawing inferences myself, I take it right out of their own words and that is to be found in the -- in the record in the strike ballot.

July 10, 1958 confirmed all of our suspicions about what this is all about.

Justice William J. Brennan: What page is that?

Mr. Carl Mcgowan: It's on page 53 of the record am I am going to take the liberty of reading it to some degree because I think this is critical.

Justice Hugo L. Black: Is there any dispute between you on that point?

Mr. Carl Mcgowan: Sir, there certainly is.

Justice Hugo L. Black: I was asking.

I don't know.

Mr. Carl Mcgowan: There is.

Indeed, when they presented findings in the District Court, there was no mention of the Central Agency Plan in those findings.

You can read the findings as they repost are annoying of Central Agency Plan and the only reference now is the one we got in because Judge Perry was willing to add a sentence the fact that we didn't try to bargain about the Central Agency Plan.

But that -- this is the circular in which they insert the distributor strike ballot and ask for authority, they ask that the worker -- the members to vote on the strike ballot.

Page 53, since Mr. Ben Heineman's described, security control has gotten on North Western Railway System, and we have all witnessed a revolution in the management of this railroad.

All types of service on which the railroad has now a monopoly had been drastically curtailed with corresponding inhuman slashes in employment (Inaudible).

The loss of business resulting in the curtailed service in turn leads to further reductions enforced and further reduction of services (Inaudible).

Well, last fall, a program of this sort that is a violent concern to our members that initiated by this management.

This program has directed the elimination of vast majority of agents serving one-man stations.

Proceedings are begun of where the public service command of South Dakota, Minnesota, Iowa and Wisconsin seeking authority either to close nearly all of one-man stations or to have one agent serve two, three, or four stations.

Similar proceedings in other States maybe expected momentarily.

In the public interest as well as the interest of our members and the organization as a whole, we have done everything possible to resist this program to reliance on the provisions of our agreements and by that he means the existing agreement and they made the claim that South Dakota that we couldn't this on existing agreement.

Through informing the residents, the effect in (Inaudible) is the consequences of the Railway's actions and to attendance that all the hearings of the various commissions with presentation of the evidence and argument, we have tried to make reasoned common sense, and humanity prevail.

Since last November, practically, all the time as your general chairman and four vice presidents as well as much of the time of a number of our local chairman and our general counsel, and our president had been devoted to these efforts.

And now, listen to this, however, it became evident that on early date, that they meet this on this law effectively would require strengthening of our agreements.

What does that mean?

That means we have got to get something new into our agreements if we're going to be able to deal with this situation effectively.

Justice Hugo L. Black: Do you think that affects a legal problem?

Mr. Carl Mcgowan: I do, sir.

Justice Hugo L. Black: To that motive?

Mr. Carl Mcgowan: I do because our argument is that -- that in deciding what is the scope and content of rates of pay rules and work conditions under Railway Labor Act, we're entitled to have that -- that should be construed in the light of congressional policies and purposes with respect to transportation.

And if we can demonstrate to you as I think we can that there is a federal interest in avoidance of waste and in good efficient regulation, both at the State and federal levels are both regulated in interstate commerce after all.

But then construed in the light of that policy, and with reference to its purposes and effect in this particular setting of facts, we do not believe that Congress could have intended or did intend that we should be put to the test of a legal strike in order to try to modernize the railroad and that's our case.

Justice William O. Douglas: Is there any provision in this Act for a second or third or fourth go around in the mediation in the 30-day period, mediation (Inaudible)?

Mr. Carl Mcgowan: In the act itself, Mr. Justice Douglas, there are no limitations on the number of times the Mediation Board could come in and mediate.

There is the first mediation referred to as a part of the process and then the usual practices whether there'd be a second mediation.

Would that happen in this case, the only controversy that in this case is over whether or not the -- the second mediation start a new 30-day period (Inaudible).

The District Judge held that it did and gave us an injunction on the merits on September 18.

That is disputed by the other side and I -- I --.

Justice William O. Douglas: What is your conception of the Act with this 30-day cooling of period, the recurring thing when the end of the 30-day arrives as new mediation effort and (Voice Overlap) --

Mr. Carl Mcgowan: Well neither the -- excuse me sir, neither --

Justice William O. Douglas: -- no result and then another 30 days?

Mr. Carl Mcgowan: Neither side has to accept the emergency mediation so that each party has in its power after the first mediation not to participate in another emergency mediation because that's a proper service and both sides have to accept.

Our contention is that if they both accepted, if they both accepted, and there was another emergency mediation.

I knew that the -- we think that the Act lies in the congressional purpose is to try to give and make the mediation effective would call for a new 30-day period and that was the point on which Mr. Justice --

Justice William O. Douglas: What -- what -- is there any terminal point on that for either party?

Mr. Carl Mcgowan: The terminal point is that neither party has to accept the proper services by the Mediation Board.

Justice William O. Douglas: And then the -- the -- well, isn't that what has happened here?

Mr. Carl Mcgowan: Well, the -- the district judge decided it since both parties here accepted the emergency offer of mediation, the railroad -- the union could not strike until 30 days after that mediation had finished.

That was -- that was the injunction we got on the merits of September 19 in the District Court.

Justice William O. Douglas: As a practical matter, what -- what happens after the end of that 30-day period?

Mr. Carl Mcgowan: I suppose that the Mediation Board can offer a -- well I presume there's a legal right to strike or lockout as the case maybe.

I presume the Mediation Board could offer a new emergency mediation, but neither party would have to accept it.

Justice Felix Frankfurter: If there is no -- if mediate -- if emergency intervention by the Mediation Board is not accepted just as the right to strike, is there any -- any more left under the Railway Labor Act to accommodate, I am using it purposely useful word or non technical word short to accommodate the claim on one side of this, on the other short of economic tussle.

Mr. Carl Mcgowan: The Mediation Board can certify the dispute to the White House and the President may call an emergency board and that consumes another 60 days before that could be a legal right to strike approved.

Justice Hugo L. Black: May I ask you that you don't have time this afternoon, I would like to get your idea what you think are the criteria to control the decision as whether these things are within the definition of rule of working (Inaudible) and so forth.

Do we have to look at the statistics and practices or what?

Mr. Carl Mcgowan: I think I can answer that quickly.

I think -- I think that this demand in the first place, let me say this demand goes far beyond anything that they have demonstrated either in the record or outside the record in terms of a complete veto power over the discontinuance of positions, not -- not limiting layoffs where the man is affected and when he -- if he dies or resigns, his job disappears.

This -- this demand is a veto power over the discontinuance of positions.

And that is why we think at all that we are on sound ground and we say it also underlines the purpose here of the brotherhood was to get control over the modernization plan known as the Central Agency Plan because by freezing the position as distinct from the men in the jobs, they could ward off this threat to the number -- total number of jobs for their members.

And we think that's the basic distinction, but when we talk about stabilization of employment.

I know of no true stabilization employment scheme which is concerned with having men do work that is not there to be done.

Their concern was trying to balance the work over the year so that the maximum numbers of men are allowed to participate, but if they all assume work to be done.

Justice Hugo L. Black: Well, have they always done that?

I suppose some of the (Inaudible) vary from time to time.

Mr. Carl Mcgowan: One of the reasons -- one of the reasons, sir that they haven't been able to do it in the Railway experience, at least in the experience of one railroad has stated the section then.

They're the ones that are always feel the grant of the impact of downturn conditions because the railroad doesn't want to spend what money it has to keep the section -- to keep the railway in good shape.

No, because they -- they never let go off the job, they have no permanent jobs and they get six months a year sometimes if they're lucky.

The reason is because the dollars that could be used to employ them more are being paid.

In this case, we say the station agents who are not really engaged in productive labor and for whom there is not enough work to be done.

Chief Justice Earl Warren: We'll recess now.

Print this transcript Transcript: 

Argument of Carl Mcgowan

Chief Justice Earl Warren: Number 100, the Order of Railroad Telegraphers et al. versus Chicago North Western Railway Company.

Mr. McGowan you may continue your argument.

Mr. Carl Mcgowan: May it please the Court.

At the conclusion of yesterday's argument, Mr. Justice Black addressed an inquiry to me which I would like to respond at this time.

The inquiry as I understand it, Mr. Justice Black, was that assuming that there is a showing in this record of a purpose -- of a purpose and effect on the part of the demand made here by the telegraphers to negate and frustrate orders of the State Commissions approving and authorizing the Central Agency Plan, what would be the relevance of that showing?

You couple with that I think another inquiry as to what are the criteria to be followed in judging whether or not a particular contract demand is within the contemplation of Congress under the railway --

Justice Hugo L. Black: Do you claim in the context of the language that the Court of Appeals construed as controlling in that?

Mr. Carl Mcgowan: Yes, sir.

I think that my answer to the first inquiry will cover the ground of the second.

I recognize that this inquiry goes to the very heart of this case and I propose to answer it with a distinct sense of the feeling on my part that if I cannot make myself clear on this, I will not have exposed that for the informed consideration of this Court what we believe to be, at least the real issue in this case.

If the purpose and effect on the demand are as you are prepared assuming to be, for the purpose of this inquiry namely, directed a demand directed at the Central Agency Plan and designed to frustrate its operation then I suggest to you that there is no difference in substance between the demand phrased that is it as it is and the demand as it would be if the telegraphers had said, "We want a contract provision to the effect that the railroad cannot comply with nor carry out any order of a State Commission placing -- approving the Central Agency Plan without the prior consent.

Justice Hugo L. Black: If you'll permit me to say so, I wouldn't -- I was not assuming as that.

I was assuming if they were asked to sit in with the -- as far as that question is concerned, with the representatives of the railroad in connection with those proffered requests might be requested by the railroad so that they --

Mr. Carl Mcgowan: But sir I --

Justice Hugo L. Black: -- are abandoned.

Mr. Carl Mcgowan: I suggest to you --

Justice Hugo L. Black: I would -- I would suppose that -- frankly I wouldn't suppose there'd be any much question if they were asking you violate a valid law.

Mr. Carl Mcgowan: That is not the position of (Inaudible) Mr. Justice Black.

Mr. Justice Frankfurter asked Mr. Schoene yesterday whether he considered that this contract demand, it had become effective would operate as against the directions and authorizations of a State Commission order and I think it is quite clear from the language of the strike circular that I read yesterday at some length that they did not make this demand for the -- just to be ineffective.

They were -- they said to the membership, we have tried to defeat this Central Agency Plan on its merits before the State Commissions.

We are not getting anywhere.

Therefore we have to strengthen our agreements and I think you recall I underlined emphasis of that language, therefore we have to strengthen our agreements by bringing into being something which will do the job of -- of opposing, and frustrating and preventing the carrying out of this Central Agency Plan.

It's also quoted in our brief the language of the -- of the strike call issued one week after the second commission had acted namely, Iowa in which the strike call says, I quote from memory, “but with the need for this rule has been tragically demonstrated again.”

What happened in South Dakota has now happened in Iowa and there's no assurance that it will not happen in the other States.

Now I suggest to Your Honor that -- but that --

Justice Hugo L. Black: You're assuming -- and I would not assume that in this and I would -- I'd think quite differently on this but it's something -- you're assuming that they're saying that you must meet with them and agree to break the law is valid.

I would think there are many things that could happen before there becomes a legal order which could be negotiated about.

Now that might not come within the meaning of the crucial section of the Act, but I would think there'd be many things that you could negotiate about as to whether you would go actively and requested on what position you would take, whether you had resisted if they asked for it in a legal way, and resisted legally and so forth.

Mr. Carl Mcgowan: Sir, that brings me to the -- perhaps I should digress at this point to deal with what I understand your suggestion to be now and that is that if we had met and negotiated with the union, we would have worked out something presumably that would have been less than a complete veto power by the union over our compliance with the State Commission order.

Justice Hugo L. Black: I don't know that you would have worked out anything.

It's a question to whether you should negotiate with them as I don't understand it.

Mr. Carl Mcgowan: But --

Justice Hugo L. Black: I mention with this and whether that comes within the meaning of those words, wages, working hours and so forth.

Mr. Carl Mcgowan: May I address myself to that.

Justice Hugo L. Black: Yes.

Mr. Carl Mcgowan: Mr. Schoene yesterday emphasized that the management had taken the position that this demand was not a proper demand under the Railway Labor Act and that we do not have to recognize it as an eventual legal basis of a strike.

That is true.

Mr. Heineman testified directly in the record that he could not recognize this demand for bargaining purposes and the reason for that was that if we had recognized it as a proper demand under Section 6 by bargaining about it formally, when the -- when the purely voluntary procedures of the Railway Labor Act have been exhausted and if the litigants were still standing firm on this demand as we had every reason to think they were going to be, we could not presumably have into a Court and sought to enjoin the resulting strike on the ground of the impropriety of the demand.

At least there would have been a serious question about it.

I certainly know what position the laborers would have taken in that case.

They would have said, "Well you recognize the demand is proper, you bargain about it.

The purely non -- non-compulsory procedures of the Railway Labor Act are now completed.

We have the right to strike and you can't enjoin them because you at the very beginning recognized the propriety of it."

So rightly or wrongly, for legal reasons we felt that we could not protect ourselves by any action which recognized propriety of it.

If we had stopped there -- if we had stopped there and remained adamant, then I would say that we would be in a very different posture before the Court than what we are.

One of the facts in the record though at length -- we didn't stop there.

The record shows that Mr. Heineman within a few days after the Iowa order -- the South Dakota order, the first order came down, talked to his director of personnel and to me about the question of whether we should not open negotiations, discussions with the telegraphers to see whether they would not be interested in some of kind of an arrangement which would take care of the men who might be adversely affected by this order and the later orders which we hoped to get although we had no assurance at that time and facilitate their transition from non-productive employment to productive employment with the least human injury.

That was the occasion on which the decision was that the next chance to see Mr. Lye would be in Madison, Wisconsin where he would be testifying in opposition to the Wisconsin plan.

That was ten days away.

It was decided that Mr. Heineman would formally approach Mr. Lye on that occasion and ask him whether he would be interested in conferring about the Central Agency Plan either with respect to South Dakota or a system-wide basis.

Mr. Lye didn't say, "Get back in the channel of the Railway Labor Act and bring it up to mediation."

He said, "We are too far apart, there is no purpose to be served."

Justice Felix Frankfurter: Mr. McGowan, if the recital that you just made is, I am inviting the colloquy of this case, leads me to ask this question.

Is there anything in the findings of fact that the District Court dealing with the relation of the demand of the telegraphers to the Central Agency Plan, in the findings of fact?

Mr. Carl Mcgowan: Mr. Justice Frankfurter I can answer that in this way.

The only finding which the telegraphers have ever relied upon as supplying that kind of a finding is number -- is number 10 really and I'm excluding, mind you those findings of fact which I regard as conclusions of law.

Justice Felix Frankfurter: Yes.

Mr. Carl Mcgowan: Under Section 10, the Court found on the date of July 10, 1958, the telegraphers submitted to it's membership on the property a strike ballot seeking the views of the membership as to whether a strike should be authorized if necessary to secure a satisfactory settlement of a dispute arising from the proposal of the telegraphers to add to the existing agreements with the plaintiff, the rule proposed under Section 6 of the notice that I referred to.

I accepted that finding on the ground that it tended to characterize what the strike or what the demand was addressed to.

And Judge Perry said, "I'm not interested in characterizing in anything.”

I said -- I said defining is in conflict with the language of the strike circular which indicated that they had a purpose to -- to strike at the Central Agency Plan and that's what this lawsuit is all about.

He said, "I do not characterize it at all except as a strike ballot."

They had the word circular in first and he said, "Strike the word circular and leave it a strike ballot seeking the views of membership."

And the higher court in reviewing this matter has the exhibit in front of it that was the -- what I read them yesterday, that whatever attachments are there - “the importance” he said, “the importance of this finding to me is the sending around of a strike ballot.”

Now I proposed findings of fact and one of those findings of fact was a finding that the strike of -- that the contract demand was aimed at the Central Agency Plan and that this lawsuit arose out of it.

Judge Perry decided to work from the -- from the defendant's findings of fact which as I said had no representative to the Central Agency Plan.

You could have read the whole findings without knowing what the (Inaudible) of the Central Agency Plan and the only reference to it came in because of my suggestion that he at least ought to add a finding that we were willing to bargain about the Central Agency Plan.

He said, "As to my findings," now I think -- he didn't take them up when -- and when he said that -- I think for the record, I should probably deny it, but he said these things.

"I would not have any objections certainly with this -- to some of the findings of fact in there.

However, I find that most of those which are not only incorporated in this matter are irrelevant.”

He said later, "I understand that a lot I have pointed out what I think many of them, most of them that I saw”, and we just have been talking about these things were fundamentally true but are not related to the case."

Justice Potter Stewart: How about the -- excuse me -- I don't mean to interrupt you but how about the last sentence of finding a fact number 20 on page 357, or are you going to get that?

Mr. Carl Mcgowan: The last sentence?

Justice Potter Stewart: Yes the finding of fact number 20 on page 357.

Mr. Carl Mcgowan: That plaintiff did show willingness?

Justice Potter Stewart: Yes.

Mr. Carl Mcgowan: That was put in at my request.

That's the one thing he gave me on the findings.

As I said that's the only reference in all these findings which were prepared in the first sentence by the laborers to the Central Agency Plan.

Now I would suggest to Mr. Justice Black to what Judge Perry did was answer the question which I thought you would put me by saying, "Well even if it's true that the purpose and effect of the Central -- of the strike, of the demand was to -- was to frustrate the Central Agency Plan and to frustrate the Section 6 notice, it's irrelevant.

The Court of Appeals simply disagreed with his -- his conclusion on that.

They found that it was highly irrelevant that this strike, this contract demand had been aimed at the Central Agency Plan.

It was designed to frustrate an operation.

Therefore when we talk about what the Court of Appeals did to his findings, they simply said his whole theory of -- of regarding those facts is irrelevant was wrong.

They were highly relevant.

Justice Felix Frankfurter: I'm grateful even turning counsel, my difficulties with this -- with this case and I say that my difficulty with your case is addressed just here as to findings and what was relevant -- to what was relevant in the way we -- we have faced the record that turns here.

As I understand your case is the way you put just two minutes ago or minute-and-half ago namely, that their demand, that's set forth in Section 3, no position that existed or did not say an attack on and an objection to the Central Agency Plan for which you have the authority to say if you have forced the commission, that is correct, is it not?

Mr. Carl Mcgowan: That's right, sir.

Justice Felix Frankfurter: There is nothing in the way of the findings as I read them or as you expound them in which that issue is dealt with, is that correct?

Mr. Carl Mcgowan: Nothing in the findings as such.

The --

Justice Felix Frankfurter: I am talking about the findings -- There's nothing --

Mr. Carl Mcgowan: That is --

Justice Felix Frankfurter: -- in the findings as such.

Therefore the case goes up to the Court of Appeals on the basis of the findings and no so far as I've been informed, no conduct of -- no counter submission of findings by you, the denial of which was accepted through you by so that you then go up to the Court of Appeals saying that the findings do not reflect the evidence, the findings do not reflect the issues that were contested and therefore that was error and there should be either a reversal of the decree with a remission to the District Court to deal with that matter or as I gather from what you indicated, though not said, that isn't necessary because on the face of things the findings have no relation to the record.

And therefore I – my difficulty is that the issue you present is really not contained within the finding, the jury might ask to disregard the findings in a -- in an appropriate way of objection to the findings having been made in the Court of Appeals.

Mr. Carl Mcgowan: Sir, at the District Court level, I accepted to the -- to the findings made. I accepted to the failure to make the findings I proposed and in the Court of Appeals I pointed out that the -- the findings did not reflect the -- the true showing on the record and the Court of Appeals wrote an opinion in which they said in -- in effect and substance the -- the findings made by Judge Perry were on a improper theory of law and in effect we -- over -- we set them aside.

Justice Felix Frankfurter: And now today -- and I -- I want to be informed if this -- is this -- if this were -- the old equity rules apply and an appeal in equity permits the appellate court to ascertain the facts on its own basis, on its own authority, I would have no trouble about this.

The Court of Appeals sit before the -- that the old rule, before the new rule, the Court of Appeals could as a de novo proceedings assess on the record that the findings were not justified and did not relate to the record.

Is that still, is that the basis on which the Court of Appeals and now we are allowed not merely to say the District Court was wrong in not making findings to which you say accepted, you do not make it but that we make the finding rather than have (Inaudible) make it on the record.

Mr. Carl Mcgowan: Well my first answer to that if Your Honor please, there's in the District Court in our view has not made any finding that the Central Agency Plan, that the strike demand was not aimed at the Central Agency Plan.

Justice Felix Frankfurter: That's quite right.

Mr. Carl Mcgowan: And the Court of Appeals--

Justice Felix Frankfurter: It has made findings as to what the telegraphers proposed and on that basis, it made it's ruling (Inaudible) you that's wrong.

Mr. Carl Mcgowan: Simply that --

Justice Felix Frankfurter: -- to the Court.

Mr. Carl Mcgowan: Simply that --

Justice Felix Frankfurter: And you say that's wrong.

Mr. Carl Mcgowan: Simply the fact that they proposed this contract demand and then a conclusion of law in a -- in effect that this was within the scope of the Section 6, the Railway Labor Act.

Justice Felix Frankfurter: But not -- are you going to answer that the Court of Appeals may make findings on the basis of the record in lieu of or because of this, the Court didn't make it?

Mr. Carl Mcgowan: I think the Court --

Justice Felix Frankfurter: More simply the word that you say that this was really directed against your being allowed to carry out the decrees or the orders, whatever you call them as the Four-State Commission is the word for them.

Suppose I agree with you, is the record in such shape that I can make that finding here?

Mr. Carl Mcgowan: I believe it is, sir because I think that is exactly what the Court of Appeals has cited it could do.

Justice Felix Frankfurter: Could it --

Mr. Carl Mcgowan: It found -- it found the record in such shape that it could -- it could say -- that it could say this contract demand really was directed at the Central Agency Plan and had it's -- as it's purpose and effect the frustration of the Central Agency Plan.

And that was what the Court of Appeals did.

Justice Felix Frankfurter: I know the Court of Appeals.

My question is but could it do it?

In other words it made it properly such a -- such a conclusion, partly rests on the documents, doesn't it, namely, that the -- the proceedings before the South Dakota and the other commission partly rest on proceeding that the Court can take judicial notice of.

It partly also rests on human testimony doesn't it?

Mr. Carl Mcgowan: It rests on testimony and on exhibits in the record.

Justice Felix Frankfurter: Sure and therefore my question is and on -- and really the question in my mind -- that's my difficulty, whether that can be done by an appellate court rather than sending it back to the District Court with instructions to make findings relevant to that issue?

Mr. Carl Mcgowan: Well I understand.

I -- I understand your difficulty Mr. Justice Frankfurter and I appreciate your pointing out to me.

I think my answer has to be that I believe it could under these circumstances.

Justice Felix Frankfurter: That is it's so clear that there isn't anything left for a (Inaudible) Court to deal with.

Mr. Carl Mcgowan: Because and I have buttressed that by saying that Judge Perry in the words I read you, recognized, recognized that there wasn't any real issue about the truths of -- of these -- of these findings that I propose with respect to what the strike demand was supposed to do.

He simply said to that they are as far as I saw them, they look all true to me but I regard them as irrelevant.

Justice Felix Frankfurter: Well I couldn't help but see that you read some -- it's not a printed record but from a document, now is that before us?

Mr. Carl Mcgowan: I'm -- no, sir that's a part of the transcript that was not printed in the appendix.

The reason I feel that I can read that is because the -- the (Inaudible) was printed in their reply brief, my proposed finding which they had not printed either in the -- in the transcript.

Justice Felix Frankfurter: I'm also a great believer in having all relevant documents before the Court if it's to decide a case.

Mr. Carl Mcgowan: Well I think it's very true that the -- those findings -- the proposed findings should have been in the record and I apologize for not being done.

Justice Felix Frankfurter: Well, this was meant to be a criticism that anybody, just sought to elicit whether some way if this really so, if the judge, the District Judge ruled that this issue is irrelevant under -- then let's have testimony on that whether it's relevant or not, I should think that that Court decides on that.

Mr. Carl Mcgowan: I am --

Justice Felix Frankfurter: So this could be probably before us.

Mr. Carl Mcgowan: I am reading let's say from the trail of their proper --

Justice Felix Frankfurter: I have no doubt that you're reading from it.

Mr. Carl Mcgowan: I regret it that it is not in the record, but that was a theory on which he proceeded and it seems to me that what the Court of Appeals said was there really isn't any issue here about that the facts.

The District Judge has simply regarded certain facts as irrelevant.

Justice Felix Frankfurter: Well --

Mr. Carl Mcgowan: And we say he was wrong on that.

Justice Felix Frankfurter: I for -- just for my own self would be glad that arrangements could be made whereby -- either by agreement of counsel or by leave of Court that could come before us.

It is one thing to have a District Court say something isn't relevant when on the face of things to me at least it is relevant, that's certainly pertinent to the issues in this case?

Mr. Carl Mcgowan: I will very see if that document --

Chief Justice Earl Warren: Was -- was this document before the Court of Appeals?

Mr. Carl Mcgowan: This was -- this was not in the transcript.

Chief Justice Earl Warren: Then how could -- how could they have decided that if the -- they didn't have it either?

Mr. Carl Mcgowan: I think these -- these matters were discussed if Your Honor please and that's my only -- the only answer I can give to that.

It was not in the transcript as such.

Justice Hugo L. Black: May I ask you a question, when I'm troubled it's a little difficulty with Justice -- different with Justice Frankfurter, maybe the same after all.

What you have here is a judgment of the Court of Appeals setting aside of the -- the very statement, the District Court which had entered an injunction.

The closing part of it is that the District Court's finding, in the proposed contract change related to rates of pay, rules and working conditions and was thus a bargain of militia under the Railway Labor Act is clearly erroneous.

Now on that they held that the injunction would lie despite the Norris-LaGuardia Act and the only thing it was proposed was this, no position in existence on December 3, 1957 would be abolished or discontinued except by agreement between the carrier and the organization.

They asked you to negotiate and talk about that.

It seems to me that that is your issue whether or not, that comes within the term of which the pay rules and working conditions, that's what they decided?

If it does come within it the injunction was improperly granted -- would be improperly granted, wouldn't it, under the Norris-LaGuardia Act?

Mr. Carl Mcgowan: If – if the -- if the decision is that this is a proper demand under --

Justice Hugo L. Black: I'm not talking about proper demand.

If this request they made relates to the statutory definitions the Court passed on rates of pay, rules and working conditions if it's included in it then why the proper demand, wasn't it?

Mr. Carl Mcgowan: It -- I would say -- if -- if it is a matter of law, it is held -- held by this Court to be within the contemplation of Congress and those words and maybe they were -- why of course they the -- they have the right to strike.

Justice Hugo L. Black: That's the only issue decided by the Court of Appeals, wasn't it?

Mr. Carl Mcgowan: Yes, sir but that's the critical issue in my opinion.

Justice Hugo L. Black: Why I certainly, I agree with you, it's a critical issue.

Now at the time they made this request, were you on the order from various, all the States that this railroad went to abolish these officers, these positions?

Mr. Carl Mcgowan: This demand was served in December of 1957, six weeks after we had filed our petition in South Dakota and South Dakota order came down in May.

So that it was a South Dakota order as such came in after --

Justice Hugo L. Black: Came after, and they were asking you to negotiate and at that time they were asking you negotiate it with reference to whether you'd make an agreement which if you had made, would've required you to withdraw your application from the State I suppose, wouldn't it?

Mr. Carl Mcgowan: We might as well abandon the whole project.

Justice Hugo L. Black: But in that Court you were negotiating with them wasn't it?

Whether you would make an agreement with them and so far as you were concerned, you would not abolish any of these places without an agreement from the (Inaudible) and why isn't that the issue we have to decide whether that is a proper bargainable issue under the definition in the -- they asked?

Mr. Carl Mcgowan: Sir it is the issue and --

Justice Hugo L. Black: But I wanted to find from you.

Mr. Carl Mcgowan: If I may go back to --

Justice Hugo L. Black: What-- what criteria are we are to use in determining whether that is a proper issue.

The Court does --

Mr. Carl Mcgowan: The criteria if Your -- if You Honor please are what Congress intended to be the scope of the -- of collective bargaining under that section or statute.

And that was what I was trying to get at in answer to what I thought was your inquiry yesterday and it's -- and I would like to deal --

Justice Hugo L. Black: But why -- why wouldn't they?

Hadn't -- hadn't there been depth -- hadn't there been a backup practice?

I -- I may be entirely wrong here but I thought just from a general idea, it was common practice to bargain between -- employers and employees bargained as to whether they would abolish certainly jobs or not abolish certain jobs.

Mr. Carl Mcgowan: Sir, so far as I know and nothing in the record supports it now in the -- out of the record, material contained in our appendix, there is no contract in being which imposes a veto power over the discontinuance of positions as distinct from severance pay plans, limitation of layoffs which effect the individual in the job when he dies, resigns or get promoted, the position does not have to be continued.

Justice Hugo L. Black: What about the --

Mr. Carl Mcgowan: This is a unique demand.

Justice Hugo L. Black: What about the so-called feather beddings?

I -- I had an idea that one great argument had been that the union is forcing employees to make this so-called feather bedding agreement.

It was a bad practice and there'd been much, many efforts made to get the laws changed so as to forbid it, maybe rightly I don't say, but I thought that was -- was the kind of thing, perhaps they were asking you to argue about that.

Mr. Carl Mcgowan: Let me illustrate it if I may by the -- by the passenger train analogy.

At the present time if we run a passenger train, we have to have a fireman on the diesel.

We don't think he's -- that on a passenger train, a train, a freight train or a switching.

But if business dries up so that we don't have to run that freight train, we don't have to maintain the position.

Justice Hugo L. Black: But I -- I'm not saying if -- if -- can they negotiate with that?

Mr. Carl Mcgowan: My answer to that is the one I gave at the beginning.

If we had negotiated with them about it, we would have recognized the propriety of the demand.

Justice Hugo L. Black: But you -- you just don't want to grant it?

Mr. Carl Mcgowan: I beg your pardon?

Justice Hugo L. Black: But you finally get back to the question of whether -- whether you -- whatever consequence would be they have a right to try to negotiate with you to get you to make that agreement.

Mr. Carl Mcgowan: I do not think so, sir and I will cite for that reason the -- the Howard case.

Now in the Howard case, the demand served upon the railroad was you discontinue the class of the positions that bears the name of porters.

Now the railroad there under strike pressure and not willing to take its chances in trying to get an injunction later caved in and signed up.

Justice Hugo L. Black: That was the racial question, was it not?

Mr. Carl Mcgowan: It was a racial question but established the first --

Justice Hugo L. Black: I can ask him -- That was illegal demand made.

Mr. Carl Mcgowan: And we -- It was -- it was not an illegal demand if Your Honor please?

It was held to be without the contemplation of Congress under the statutory scope of bargaining on the Railway Labor Act.

There was no constitutional problem.

Justice Hugo L. Black: Well what was the basis of the holding?

Mr. Carl Mcgowan: The basis of the holding was that under the Railway Labor Act, a demand --

Justice Hugo L. Black: And of course represented by --

Mr. Carl Mcgowan: And --and a contract of this kind and presumably the demand which gave rise to the contract was not a proper subject of bargaining.

And let me ask if I may this question, suppose the railroad, instead of caving in and agreeing to that demand in the Howard case and said, "We think this an improper subject of bargaining and we will not negotiate with you about it."

Do you think they would have been obliged to?

Justice Hugo L. Black: But suppose then it had come up to the Courts, and it was shown that the purpose was to create racial discrimination, of course I should think, that would be quite a different thing, the one which simply required the so-called feather bedding contract applying to everybody alike.

Mr. Carl Mcgowan: There are different kinds of discrimination if Your Honor please and -- and racial is only one of them.

As I tried to say yesterday, we think that a veto power or the discontinuance of any position has its own discriminations.

It discriminates against the employees who would be paid more money if there were dollars to pay them.

It discriminates against the section hand who was laid off because of these fellows who were going to keep on working eight hours a day even though they only have 15 minutes work to do as the State Commission found.

It discriminates against the -- a management who's trying to modernize and to comply with the congressional policy of bringing the railroad into the 20th century.

It discriminates against the investors, in case of the North Western Railroad that hasn't been returned --

Justice Hugo L. Black: All of that is --

Mr. Carl Mcgowan: -- to the stockholder.

Justice Hugo L. Black: -- policy, against the policy which may be --

Mr. Carl Mcgowan: It's the policy --

Justice Hugo L. Black: -- which may have to be here.

Mr. Carl Mcgowan: It's the policy of Congress that we're trying to find and we -- we -- if the Court say --

Justice Hugo L. Black: Where do you find anything in the policy of Congress that says they cannot negotiate in order to try to preserve certain jobs at certain places?

Mr. Carl Mcgowan: If we had negotiated, we would have recognized the propriety of the demand --

Justice Hugo L. Black: And this Court --

Mr. Carl Mcgowan: If the -- if the union had stood on it and there is no power in this land it could've made them depart from it, if they didn't want to under Railway Labor Act, we would have been faced with a strike and I say that if we had recognized it, we would not have been able to go into a District Court and contend that we were entitled to injunction because the demand has been improper.

That was why our hands were tied with respect to negotiating and fought with it -- about it formally.

What we did do and I haven't even had a chance to -- completed the history of this negotiation, I'm sorry -- was that we went outside.

We went -- the -- the formal demand and tried to find out.

We tried to negotiate with them on some basis other than one which would recognize the propriety of the demand.

We found out in that process that they weren't interested in anything except that demand that they were going to stand on.

Why?

Because it gave them the veto power over the positions and kept the jobs in being, despite the Central Agency Plan authorizations.

Every -- every suspicion we had about this was confirmed by efforts to negotiate with them.

We offered them -- yesterday, Mr. Schoene talked about supplemental employment benefits, I mean about -- about how we have reduced employment at the volume we did.

In the Summer of 1956 when a -- when the new management took over and it was plain that we had to do a lot of things at North Western to keep it alive, our management sought out Mr. George Harrison and we negotiated with him the first supplemental employment benefits agreement in way of history and we were criticized for it by the other railroads.

We offered that -- that -- S.U.B. agreement that was entered into by every non-operating union except the Telegraphers.

This record shows it was offered to the telegraphers.

In 1957, barely the time it was entered into also and Mr. -- Mr. Lye testified on the stand that he assumed as he knew was the case that this S.U.B agreement was available to him in respect to his employees on a date, on a basis retroactive to December 3, 1957.

Justice Felix Frankfurter: Before you sit down I just want to ask you one short question.

The Court of Appeals that granted to -- that this is my -- what might be called procedural problems of which I think better the -- from the people concerned and I'm Jew.

The employee -- the Court of Appeals acted with reference to the orders of the South Dakota and the Iowa commission and if they were going to interpret it the demand of the Telegraphers in relation to the authority of those two States, but I'm not ignoring them.

What basis, what was the argument, what was the -- what was the material on the basis of which the Court of Appeals rested its decision in interpreting the demands of the telegraphers in light of what the State Commission, what to do and did in fact do?

Mr. Carl Mcgowan: As I understand your question Your Honor it is, what was there in the record which would enable the Court of --

Justice Felix Frankfurter: It wasn't just on the record without any knowledge of Judge Perry's remarks or judgment that all that was irrelevant.

Mr. Carl Mcgowan: I -- I believe that's right Your Honor.

Justice Felix Frankfurter: That is on the basis of what is contained between the covers of this paper volume.

Mr. Carl Mcgowan: That is right.

Justice Felix Frankfurter: They concluded that you cannot take the demand of the Telegraphers in isolation but you must tie them to this Central Agency program, is that it?

Mr. Carl Mcgowan: They concluded on the basis of what was in the record and we submit that there was ample evidence in the record to support that conclusion.

Chief Justice Earl Warren: Thank you Mr. McGowan.

Mr. Schoene, you may proceed.

Argument of Lester P. Schoene

Mr. Lester P. Schoene: Mr. Chief Justice, I have only a few moments left and I would like to devote that to seeing whether I can shed some light on the matters that have just recently been under discussion with Mr. McGowan.

We have cited on page 7 of our reply brief, the railroads proposed finding number five.

Justice Felix Frankfurter: Is that in the printed record?

Mr. Lester P. Schoene: That is not in the printed record, it was there --

Justice Felix Frankfurter: Well if we're going have part of what's not in the printed record, we ought to have everything that's relevant to this problem.

Unknown Speaker: (Inaudible)

Mr. Lester P. Schoene: I -- I think not.

I think not -- not in this portion of it.

Justice William J. Brennan: (Inaudible)

Mr. Lester P. Schoene: I beg your pardon?

Justice William J. Brennan: And you may start on what's in here and --

Mr. Lester P. Schoene: I think it can.

Justice William J. Brennan: It is?

Mr. Lester P. Schoene: I'm -- I -- I think it probably should be.

Justice William J. Brennan: (Inaudible)

Mr. Lester P. Schoene: (Laughter)

In -- insofar as it's in our power to do so, and I think it is.

It -- it will be.

Justice Felix Frankfurter: Then you have no objection to considering what the colloquy between Judge Perry and yourself and Mr. McGowan, do you?

Mr. Lester P. Schoene: Not at all, not all.

Justice Felix Frankfurter: All right.

Mr. Lester P. Schoene: The proposed finding reads, “This proposal, Section 6 notice was prompted by and was directly addressed to plaintiff's action in announcing and moving to seek authority for its Central Agency Plan.

And the threatened strike founded on this proposal results from the Central Agency Plan.

Justice Potter Stewart: That's a proposed finding that you read.

Mr. Lester P. Schoene: That's the proposed finding which was rejected by Judge Perry and instead Judge Perry made the findings that we have already referred to.

Unknown Speaker: Do you have page 6 to do all --

Mr. Lester P. Schoene: Page 7 in the footnote.

Judge Perry instead specifically found that the dispute giving rise to the proposed strike grows out of the failure of the parties to reach agreement on the proposed contract change incorporated in the Section 6 notice served by defendant Telegraphers on the plaintiff on December 23, 1957.

Now as to the effect the proposal might have in frustrating orders of State Commissions as Mr. McGowan is fond of saying, bear in mind that in each of these States where it was sought to put the Central Agency Plan into effect, it was upon the carrier's initiative.

The State Commissions announced no policy that you ought to close up the stations in this State.

The carrier went to the State Commissions and asked permission to close certain stations and that permission was granted in every state except South Dakota where the matter was acted upon.

The order is expressly -- permits them.

In South Dakota, the commission conceived the notion that it could relieve the railroad from any necessity of bargaining with the Telegraphers (Inaudible) and its original order included that it should pay only one day's pay to a man serving at a number of stations.

We brought an injunction suit against that order in Sioux Falls, South Dakota.

Statutory review was not a available because the commission was sitting on our motion for reconsideration which is a prerequisite to statutory review.

But our grounds for injunction were -- at least included that this was an interference with the collective bargaining under the Railway Labor Act.

When that suit was filed, the South Dakota Commission amended its order expressly to declare that it was not intended in anyway to interfere with collective bargaining under the Railway Labor Act.

However, it seems to me that even if the States assume to tell the railroads what their wages and working conditions would be, what the economies they should affect by reductions in pay, reductions in jobs, most anything of that sort would conceivably be within the commission's province.

If it did that, it would if such an order could not stand because it would be in conflict with the collective bargaining obligations of the railroad under the Railway Labor Act.

Now this Court held in California against Taylor that even a state-owned railroad where rates of pay had been fixed pursuant to the civil service laws of the state the Railway Labor Act governs and even a collective bargaining agreement pursuant to that law superseded the state law.

Justice Felix Frankfurter: Can I ask you one --

Justice Hugo L. Black: Can I ask you one – Excuse me.

I just want to ask you one question.

Is there anything in the record, or any of the record which indicates that what you ask them to negotiate about was whether they would defy valid orders of the railroad commissions any where?

Mr. Lester P. Schoene: There is nothing I know of that even suggests that, that is that they would defy valid orders.

Justice Hugo L. Black: Are you taking the position here that you could negotiate with them and require them to negotiate to whether they would obey a valid law?

Mr. Lester P. Schoene: No.

Justice Felix Frankfurter: May I ask you this question, sir?

Mr. Lester P. Schoene: Sure.

Justice Felix Frankfurter: What the telegraphers asked was not something that was already in the collective agreement, is that right?

Mr. Lester P. Schoene: That's right.

Justice Felix Frankfurter: So that you were asked for something new?

Mr. Lester P. Schoene: That's correct.

Justice Felix Frankfurter: The Interstate Commerce Act has a very specific provision on which a lot of subsidiary provisions are based, requiring railroads to be conducted in the most efficient and economic method.

I'm not now in engaged in dealing with what is negotiable or not, but there's nothing in the Railway Labor Act that would prevent a railroad in going to the commission or the commission on its own motion the cutting down jobs, (Inaudible) if -- if they found that the commission -- as the ICC found that the most economic and efficient conduct of the railroad.

Mr. Lester P. Schoene: The Interstate Commerce Commission has always in the exercise of that power disclaimed any notion that it could interfere with rights of pay rules or working conditions as determined under the Railway Labor Act.

In fact we have cited --

Justice Felix Frankfurter: I understand that, but could it not say you've got a lot of redundant jobs?

Mr. Lester P. Schoene: Could -- could it say that without such a provision as we were here proposing?

Justice Felix Frankfurter: Well suppose if both--

Mr. Lester P. Schoene: Well--

Justice Felix Frankfurter: In absence of --

Mr. Lester P. Schoene: In the absence of -- of an existing rule--

Justice Felix Frankfurter: As I understand here and was told here is you can't cut down what the Railway Labor Act demanded, but in the absence of something, that it is within collective agreement, could not the Interstate Commerce Commission tomorrow say in carrying out that major policy on which so much of the rest of the Act of the Interstate Commerce Transportation also saying, "You have a lot of redundant jobs and except the vice president's job" or even exceptive general counsel if I may say so?

Mr. Lester P. Schoene: I've -- in an answer to your question, Mr. Justice, I -- I think in the absence of some collective agreement such as here proposed, the commission could probably do that.

However if our proposal here were in effect as part of a collective agreement, I think the extent to which the commission could go would be to order the railroad to try to get rid of these redundant jobs pursuant to the established agreement.

I do not think it could tell the railroad to violate its agreement --

Justice Felix Frankfurter: I'm sure of that.

Mr. Lester P. Schoene: And -- and there's an interesting --

Justice Felix Frankfurter: Dealing here are we not -- I don't know what its relevance is but we're dealing here not with a provision in a collective agreement but a proposal to put something into it?

Mr. Lester P. Schoene: That's right if -- if it were in there now we wouldn't be here.

Justice Felix Frankfurter: You wouldn't be here?

Mr. Lester P. Schoene: That's right.

Chief Justice Earl Warren: Do any -- do any railroads as far as you know have such an agreement?

Mr. Lester P. Schoene: There are in the record two agreements with the Railroad Yardmasters of America by two different railroads which the -- which Judge Perry was lie -- relying upon in the final sentence of finding number 17 when he said that there were at least two agreements in effect substantially identical to this proposal.

The carrier challenges that finding and says the agreements are not substantially identical because of a difference in their duration.

They are for a fixed period whereas our proposal was for a continuing agreement subject to change on 30 days notice as provided in the Railway Labor Act.

Justice Felix Frankfurter: Mr. Schoene the argument or the Court of Appeals or the controversy before the Court of Appeals was essentially on the -- on sustaining or rejecting the findings of the trial court on the basis of which (Inaudible), is that right or not?

Mr. Lester P. Schoene: No I don't think that's true Mr. Justice.

The -- the findings as such were not challenged before the Court of Appeals and the Court of Appeals as I read the opinion did not set aside any findings of -- of Judge Perry insofar as they applied to particular facts.

They disagreed with the conclusion as Mr. Justice Black has pointed out that it related to rates, pay rules and working conditions but the essential holding of the Court of Appeals is that Judge Perry was wrong in holding that it's a bargainable issue.

They said it was an infringement on management prerogatives, and an attempt to negotiate something that the -- that the organizations were not permitted under the Railway Labor Act to propose.

Now that's the essential holding.

Justice Felix Frankfurter: But if rejected proposed finding by the railroad that was incorporated by Judge Perry if they were different -- there would have been a different record before the Court of Appeals, wouldn't they?

Mr. Lester P. Schoene: They certainly would.

Justice Felix Frankfurter: So that -- so that if there was to that extent a controversy about the scope of the findings they need permission.

Mr. Lester P. Schoene: That there was controversy about it, but that did not enter into the argument before the Court of Appeals.

The carrier did not go to the Court of Appeals and say, “this finding and that finding of Judge Perry's is wrong or the Court erred in not adopting our proposed finding number five, there was nothing like that before the Court of Appeals.