Opinions of the United
1995 Decisions States Court of Appeals
for the Third Circuit
9-11-1995
Building & Contstruct v NLRB
Precedential or Non-Precedential:
Docket 95-3330
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UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
No. 95-3330
BUILDING AND CONSTRUCTION TRADES COUNCIL OF PHILADELPHIA
AND VICINITY, AFL-CIO; PATRICK GILLESPIE,
Petitioners
v.
NATIONAL LABOR RELATIONS BOARD,
Respondent
Sur Motion To Dissolve Permanent Injunctions
and Vacate Contempt Adjudications
Argued July 31, 1995
Before: SLOVITER, Chief Judge, BECKER and
SAROKIN, Circuit Judges
(Opinion filed September 11, l995)
Bernard N. Katz (Argued)
Steven David Masters
Meranze and Katz
Philadelphia, PA 19102
Attorneys for Petitioners
Stanley R. Zirkin (Argued)
Deputy Assistant General Counsel
Contempt Litigation Branch
William Wachter
Assistant General Counsel
Washington, D.C. 20570
Attorneys for Respondent
OPINION OF THE COURT
SLOVITER, Chief Judge.
The Building and Construction Trades Council (BCTC or
"unions"), an unincorporated association composed of affiliated
labor organizations, and Patrick Gillespie, its business manager,
have moved to dissolve three consent judgments enforcing orders
of the National Labor Relations Board and to vacate four consent
contempt adjudications for violating the consent judgments. The
NLRB vigorously opposes the motion. After giving the parties the
opportunity to file written memoranda in support of their
respective positions, we heard oral argument. We will deny the
motion for the reasons that follow.
I.
The history of this case goes back more than twenty
years. On March 4, 1974 this court entered a consent judgment
pursuant to stipulation by the parties enforcing an order issued
by the NLRB against BCTC and J. Yorck, the business agent for the
local union. Some indication of the background of the order can
be gleaned from the Board's Findings of Fact that the Firestone
Tire and Rubber Company was engaged in the manufacture and sale
of tires at Pottstown, Pennsylvania, and that it engaged the M.A.
Matlock Construction Company as a subcontractor to perform
certain work at its plant. The agreed-upon order directed BCTC
to cease and desist from picketing at the Pottstown plant and
inducing or encouraging any of Firestone's employees to refuse to
work or handle goods with the object of getting Firestone to
cease doing business with Matlock.
The language of the order tracked section 8(b)(4)(B) of
the Labor Management Relations Act, 29 U.S.C. § 158(b)(4)(B),
which prohibits secondary boycotts by labor organizations, and
directed BCTC to cease and desist from:
In any manner or by any means . . . engaging
in, or inducing or encouraging any individual
employed by . . . any . . . person engaged in
commerce or in an industry affecting commerce
to engage in, a strike or a refusal in the
course of his employment . . . to perform any
service, or in any manner or by any means,
threatening, coercing, or restraining . . .
any . . . person engaged in commerce or in an
industry affecting commerce where, in either
case, an object thereof is forcing or
requiring . . . any . . . person . . . to
cease doing business with . . . any other
person.
Exhibit A to Affidavit of Patrick Gillespie at 3.
In 1980, this court was again presented with a Decision
and Order of the NLRB reflecting a settlement stipulation and a
consent judgment, which we entered on November 28, 1980, that
provided that the unions would cease and desist from engaging in
a secondary boycott, this time of Atlantic Richfield Company
(Arco) and Gulf Oil Company. Specifically prohibited was any
action encouraging employees of Gulf, Arco or others to refuse to
work or handle any goods with the object of requiring Gulf, Arco
or others to cease doing business with Refinery and Industrial
Maintenance, Inc., a company engaged in the business of providing
maintenance and repair work for refineries and industrial plants
from its Eddystone, Pennsylvania facility. The order enforced by
this consent judgment contained the same language quoted above.
Exhibit B to Gillespie affidavit.
On May 24, 1982, following proceedings brought by the
NLRB to hold BCTC in civil contempt, BCTC stipulated that it was
in civil contempt of the judgments entered March 4, 1974 and
November 28, 1980 and consented to the entry of a Contempt
Adjudication. The adjudication ordered BCTC to purge the
contempt by, inter alia, complying with the consent judgments and
imposed a fine of $6500 for each future violation and $500 per
day that each such violation continued. Exhibit D to Gillespie
affidavit.
Almost contemporaneously, the NLRB once again found
itself faced with charges that BCTC was responsible for secondary
boycotts, and once again it entered a Decision and Order, this
time on February 22, 1983, approving a Settlement Stipulation
that BCTC would cease and desist from such activity designed to
coerce anyone from dealing with a long list of companies. Once
again, this court entered a consent judgment, on June 10, 1983,
which enforced the order containing language requiring BCTC to
cease and desist from the secondary boycott activity. Exhibit C
to Gillespie affidavit. Significantly, one of the charging
parties in the 1983 matter, Schnabel Associates, Inc., a company
engaged in the construction business as a general contractor from
its Harleysville, Pennsylvania facility, objected to the
inclusion in the Settlement Stipulation of the "nonadmission
clause" traditional in such settlements. Schnabel argued that
the stipulation should contain an admission of liability, and
cited "the Respondent's proclivity to violate the Act" in support
of its objection. Id. at 2. The General Counsel took the
position before the Board "that a nonadmission clause is not
inappropriate under the circumstances of this case," and that he
was satisfied that "the Settlement Stipulation fully remedies the
unfair labor practices alleged." Id. The Board upheld the
General Counsel's position.
Nonetheless, on January 31, 1984 BCTC once again agreed
to a consent contempt adjudication for violating the March 4,
1974 and November 28, 1980 judgments and the May 24, 1982
contempt adjudication. This adjudication required payment of a
compliance fine of $3,000 to purge BCTC of the contempt, imposed
a compliance fine of $13,000 for each future violation, and set a
further compliance fine of $1,000 a day for each continuing
violation. See Exhibit E to Gillespie affidavit.
The activity prohibited by the three consent decrees
and the two earlier consent contempt adjudications continued. On
August 4, 1986 and again on August 4, 1989 BCTC agreed to consent
contempt adjudications which increased the stipulated violation
and per diem fines. See Exhibits F and H of the Gillespie
affidavit. The proceeding culminating in the 1986 consent
adjudication had also been brought against the individual members
of BCTC's Executive Board. Under the 1989 consent adjudication
Gillespie himself, the BCTC business manager, was deemed
personally in contempt. The 1989 contempt adjudication required
BCTC and Gillespie to purge the contempt by, inter alia,
complying with the prior judgments and contempt adjudications,
notifying officers, agents, members and employees of BCTC and its
affiliated unions of the contempt adjudication, and refraining
from authorizing and permitting picketing by any representatives
or agents of BCTC without taking prescribed steps to ensure that
the picketing will be lawful and permissible under the prior
judgments and contempt adjudications. BCTC was also assessed the
sum of $250,000 for past noncompliance, with $150,000 payable in
installments and $100,000 suspended on condition of future
compliance. The prospective fines against BCTC were increased to
$100,000 per violation and $10,000 per day that each such
violation continues. A prospective fine of $5000 per violation
and $500 per day was imposed against the business manager and any
other officer, employee, agent, or representative of BCTC who
knowingly violates the order. Finally, BCTC agreed that, upon
filing of any unfair labor practice charge alleging acts falling
within the scope of this court's prior orders and adjudications,
it would furnish the NLRB with all evidence in its possession
concerning the charge within 14 days of a request by the NLRB.
BCTC now moves to dissolve the consent judgments and
vacate the contempt adjudications on the grounds that (1) BCTC
has completely purged itself of contempt; (2) BCTC has completely
complied for a significant length of time; (3) BCTC is suffering
"undue hardships and vexatious harassment" because of the
judgments and contempt adjudications; and (4) continued
enforcement is no longer equitable.
The NLRB opposes the motion because (1) BCTC has not
demonstrated that it has complied with and will comply with the
judgments and contempt adjudications; (2) the purpose of the
judgments and adjudications -- permanently restraining BCTC from
violating section 8(b)(4)(B) -- has not been accomplished; (3)
BCTC has failed to show any substantial injury or hardship; and
(4) BCTC has failed to demonstrate any other change of
circumstances justifying exceptional relief.
II.
The parties dispute the correct legal standard to be
applied to BCTC's motion to dissolve the injunctions. The NLRB
would have us apply a standard culled from language used by the
Supreme Court more than sixty years ago in United States v. Swift
& Co., 286 U.S. 106 (1932). In Swift, the government had sued
the five leading meat packers to dissolve a monopoly that they
had acquired in meat products and which they were taking steps to
extend into other foods. In 1920, defendants entered into a
consent decree consenting to some dismemberment and, inter alia,
prohibiting them from manufacturing, selling or transporting any
of 114 grocery products. Although defendants managed to avoid
the full impact of the decree through legal proceedings for a
while, when they could no longer do so they moved to modify the
decree, citing changed conditions in the industry. The district
court granted a modification to permit defendants to deal at
wholesale in groceries.
The Supreme Court reversed, finding no "grievous wrong"
arising from continued operation of the decree. The Court stated
that when a party seeks to modify or dissolve an injunction,
entered by consent or otherwise, because of changed
circumstances, the inquiry differs from the framing of a decree:
The inquiry . . . is whether the changes are
so important that dangers, once substantial,
have become attenuated to a shadow. No doubt
the defendants will be better off if the
injunction is relaxed, but they are not
suffering hardship so extreme and unexpected
as to justify us in saying that they are the
victims of oppression. Nothing less than a
clear showing of grievous wrong evoked by new
and unforeseen conditions should lead us to
change what was decreed after years of
litigation with the consent of all concerned.
Id. at 119 (emphasis added).
BCTC argues that labor injunctions "enjoy a greater
presumption of limited duration" than other injunctions. BCTC
Reply Memorandum of Law at 3. Surprisingly, it relies for this
proposition on Milk Wagon Drivers Union v. Meadowmoor Dairies,
Inc., 312 U.S. 287 (1941), in which the Court upheld an
injunction imposed by the state supreme court prohibiting
peaceful picketing as well as acts of violence by a union which
had interfered with the distribution of the products of a dairy.
Because of the heavy reliance BCTC places on the Milk Wagon
Drivers Union case, we examine it closely.
The Supreme Court had previously held that state
statutes prohibiting all picketing near an employer's place of
business violated the constitutional protection of free speech.
See Thornhill v. Alabama, 310 U.S. 88 (1940); Carlson v.
California, 310 U.S. 106 (1940). The Milk Wagon Drivers Union
case gave the Court the opportunity to consider again the
constitutional issue of the right of a state to prohibit peaceful
picketing. In upholding the injunction, the Supreme Court
explained that this case was different than the preceding cases
because of the coercive effect of the violence. The following
language repeatedly stressed by BCTC was written in the context
of injunctions limiting the free speech right to picket, not in
connection with any motion for modification of a consent decree
or a litigated injunction applicable to labor injunctions in
general:
The injunction which we sustain is
"permanent" only for the temporary period for
which it may last. It is justified only by
the violence that induced it and only so long
as it counteracts a continuing intimidation.
Familiar equity procedure assures opportunity
for modifying or vacating an injunction when
its continuance is no longer warranted.
Milk Wagon Drivers Union, 312 U.S. at 298. The Court continued
this paragraph by noting that there was no argument by the union
that the coercive effect of the violence had disappeared.
Thus, the facts are not "closely parallel" as BCTC
contends, nor does this language support BCTC's argument that the
Supreme Court has "held" that labor injunctions are to be viewed
in a different light. To be sure, a "permanent" injunction does
not automatically operate in perpetuity and a labor injunction,
like any other injunction, may be modified or vacated according
to "familiar equity procedure." However, nothing in the Milk
Wagon Drivers Union case suggests that labor injunctions enjoy
any presumption of limited duration greater than any other
injunction.
Nor does it suggest that Swift was not to be applied in
labor cases. This court has regularly applied Swift in
evaluating a defendant's request for relief from an injunction,
both in labor cases and otherwise. In International Bhd. of
Teamsters v. Western Pa. Motor Carriers Ass'n, 660 F.2d 76 (3d
Cir. 1981), an employers' association which had entered into a
consent decree with the union that it would not engage in
"spotting" (the practice of instructing a driver not to remain
with the trailer during loading and unloading and assigning the
driver to other duties) moved to modify the injunction so that it
would apply only to the Allegheny County members. We affirmed
the district court's denial of the motion to modify, stating that
the association had not made the necessary "showing of
exceptional circumstances." Id. at 85; see also United States v.
Wheeling-Pittsburgh Steel Corp., 818 F.2d 1077, 1088 (3d Cir.
1987).
Similarly, in Mayberry v. Maroney, 558 F.2d 1159 (3d
Cir. 1977), we denied modification of a consent decree entered in
1973 that enjoined prison officials from confining any inmate at
the State Correctional Institute at Pittsburgh in a basement
facility known as the Behavior Adjustment Unit (BAU). The
district court had granted the motion of prison officials to
vacate the decree so that unruly prisoners could be confined
there on an emergency basis for a maximum of 48 hours. We
reversed, holding that where the parties agreed to and the court
sanctioned the closing of an allegedly offensive facility, "the
Commonwealth may not now artificially create its own 'changed
circumstance,' and thus relieve itself from a free, calculated
and deliberate choice, by offering a substitute remedy which
provides a lesser safeguard against the injuries complained of on
behalf of the class." Id. at 1163. We recognized that the
alternative remedy would have been more convenient for the
defendants and might have been "neither unjust nor unreasonable,"
but we confined our inquiry to whether anything had happened to
justify changing the decree, not how the decree might best have
been framed. Id. at 1163-64. Inasmuch as the need to use the
BAU in event of emergency was not found to be greater than that
which existed at the time of the decree, the "changed
circumstances" asserted by the defendants were insufficient to
warrant vacating the decree.
Different considerations apply when the party seeking
to modify the consent decree wishes to strengthen its prohibition
because the purpose for which the decree had been framed has not
been fully achieved. In United States v. United Shoe Machinery
Corp., 391 U.S. 244 (1968), the government sought a modification
of a consent decree adopted to settle an antitrust case. When
the government sought further relief than that originally
provided, defendant relied on Swift for its claim of the
immutability of the original consent decree. The Supreme Court
reversed, explaining that nothing in Swift precludes such a
modification "upon an appropriate showing." Id. at 248.
The principal issue before us is to analyze the effect
of the Supreme Court's recent decision in Rufo v. Inmates of
Suffolk County Jail, 502 U.S. 367 (1992), on the standard
previously applied to requests to modify an injunction. In Rufo,
four years after the modification of a consent decree which
prohibited double bunking of pretrial detainees in a new jail to
be constructed, the county sheriff moved to modify the decree to
allow double bunking, citing an increase in the pretrial detainee
population. Federal Rule of Civil Procedure 60(b)(5), which was
promulgated more than a decade after the Swift decision,
authorizes a court to grant relief from a final judgment if "it
is no longer equitable that the judgment should have prospective
application." The district court denied the sheriff's motion,
holding that Rule 60(b)(5) codified the "grievous wrong" standard
of Swift. The Court of Appeals affirmed. The Supreme Court
disagreed.
In Rufo, the Court engaged in an extensive discussion
of the considerations relevant to the issue before us. It
disagreed with the lower court's construction of Rule 60(b),
explaining that Swift did not represent a hardening of the
traditional flexible standard for modification of consent
decrees. Id. at 379. It noted that the Court in Swift itself
distinguished the facts before it from the case in which genuine
changes required modification of a consent decree. The "grievous
wrong" standard was not intended to take on a "talismanic
quality, warding off virtually all efforts to modify consent
decrees." Id. at 380. Instead, the language of Rule 60(b)
"permits a less stringent, more flexible standard" for relief
from a final judgment and allows a court to decide when "it is no
longer equitable that the judgment have prospective application."
Id.
The Rufo Court then turned to the case before it,
noting that the upsurge in institutional reform litigation since
Brown v. Board of Education, 347 U.S. 483 (1954), has made a
district court's ability to modify a decree in response to
changed circumstances all the more important. A flexible
approach "is often essential to achieving the goals of reform
litigation." Rufo, 502 U.S. at 381. The rigidity displayed by
the district court was thus "neither required by Swift nor
appropriate in the context of institutional reform litigation."
Id. at 382.
Nonetheless, the Court inserted a note of caution,
stating that modification is not warranted in all circumstances.
It stated that even when seeking modification of an institutional
reform consent decree, the party seeking modification must
establish "that a significant change in circumstances warrants
revision of the decree." Id. at 383. Rule 60(b)(5) does not
authorize relief merely "when it is no longer convenient to live
with the terms of a consent decree." Id. Modification may be
appropriate when changed factual conditions make compliance with
the decree substantially more onerous, when a decree becomes
unworkable because of unforeseen obstacles, or when enforcement
of the unmodified decree would be detrimental to the public
interest. Id. at 384. However, modification should not
ordinarily be granted "where a party relies on events that
actually were anticipated at the time it entered into a decree."
Id. at 385.
The Court stated in conclusion, "[W]e hold that the
Swift 'grievous wrong' standard does not apply to requests to
modify consent decrees stemming from institutional reform
litigation. Under the flexible standard we adopt today, a party
seeking modification of a consent decree must establish that a
significant change in facts or law warrants revision of the
decree and that the proposed modification is suitably tailored to
the changed circumstance." Id. at 393.
This court has not yet decided whether it should read
the Supreme Court's decision in Rufo as generally applicable to
modifications of consent decrees. In Favia v. Indiana Univ. of
Pa., 7 F.3d 332, 341 n.15 (3d Cir. 1993), we noted that "the
Court in Rufo specifically limited its holding to the
institutional reform setting," but we expressly reserved the
question "whether Rufo entirely displaces the more rigid Swift
standard."
The NLRB would have us limit Rufo to the specific
problem of "the ability to alter the affirmative provisions of
institutional reform consent decrees," a context in which there
is a likelihood of significant changes occurring during the life
of the decree. Board's Opposition Memorandum at 12 (citing Rufo,
502 U.S. at 380). It urges us to adopt the rationale of the
courts of appeals of the Sixth and Federal Circuits which it
reads as treating the Rufo standard as limited to institutional
reform litigation. See W.L. Gore & Assoc. v. C.R. Bard, Inc.,
977 F.2d 558 (Fed. Cir. 1992) (affirming a district court
decision refusing to modify a consent decree that enjoined the
defendant from infringing plaintiff's patent, but noting that
less stringent Rufo modification standard applies to
institutional consent decrees); Lorain NAACP v. Lorain Bd. of
Educ., 979 F.2d 1141, 1149 (6th Cir. 1992) (less stringent
modification standard applies to institutional consent decrees
because they are "fundamentally different" from private consent
decrees, affect more than the rights of the immediate litigants,
and present higher likelihood of significant changes due to their
long life), cert. denied, 113 S. Ct. 2998 (1993).
Two other courts of appeals have stated that Rufo gave
the "coup de grace" to Swift and that the Rufo standard applies
to all types of injunctive relief. See United States v. Western
Electric Co., 46 F.3d 1198, 1203 (D.C. Cir. 1995) (affirming
modification of AT & T antitrust consent decree); In re Hendrix,
986 F.2d 195, 198 (7th Cir. 1993) (affirming modification of
bankruptcy discharge). Another court has held that Rufo is not
limited to litigation against a governmental entity, although it
left open the question whether Rufo displaces Swift in all cases.
Patterson v. Newspaper & Mail Deliverers' Union, 13 F.3d 33 (2d
Cir. 1993), cert. denied, 115 S. Ct. 58 (1994).
We do not dwell upon the facts of the cases arising in
the various circuits because we have now concluded, after
considerable reflection, that it would be a mistake to limit the
Supreme Court's decision in Rufo as the NLRB argues. Although
there is language in the opinion that speaks in terms of the
issues that arise in connection with institutional reform cases,
those references are attributable to the fact that the Rufo case
arose in that context. We deem more significant that much of the
opinion represents an interpretation of the generally applicable
Rule 60(b)(5) and a discussion of the equitable considerations
that courts must take into account in ruling on requests to
modify injunctions. In this respect, we agree with the court's
statement in Western Electric that although the Rufo Court
"interspersed its . . . discussion with references to
institutional reform litigation," it did so in the context of
interpreting Rule 60(b)(5), which does not draw distinctions
based on the nature of the litigation. 46 F.3d at 1203. But we
reject Western Electric's more sweeping claim that there is no
longer any place for Swift, particularly since the Supreme Court
was careful in Rufo not to overrule Swift but to explain it.1 We
deem it cautious to leave to the Supreme Court the province of
overruling its own decisions, particularly since we conclude that
petitioners are not entitled to relief under either standard.
In many respects, we agree with the approach enunciated
by the Court of Appeals for the First Circuit in Alexis Lichine &
Cie. v. Sacha A. Lichine Estate Selections, Ltd., 45 F.3d 582
(1st Cir. 1995), where the court declined to modify a consent
decree entered following a commercial dispute between competing
members of the same family which barred one party from using the
trademarked name of the other in connection with its business.
The court did not read Rufo as being confined in principle to
institutional reform cases. It stated instead that "Rule
60(b)(5) sets forth the umbrella concept of 'equitable' that both
1
While Judge Becker concurs in the judgment he would follow the
holdings of United States v. Western Electric Co. and In re
Hendrix, Op. at 15, that Rufo governs with respect to requested
modification of all types of injunctive relief.
Swift and Rufo apply to particular, widely disparate fact
situations." Id. at 586.
The court noted Swift's distinction between permanent
decrees and provisional or tentative decrees involving the
supervision of changing conduct or conditions and stated, "Swift
illustrates the former and Rufo the latter." Id. The court saw
this difference "not as a limited dualism but as polar
opposites of a continuum" in which each case must be located. Id.
In the case before it, where the decree was based on a negotiated
bargain in a commercial case between private parties who had been
represented by counsel, the court refused to modify the
injunction and emphasized the importance of finality. The court
noted that a different approach might be appropriate when
commercial cases "involve issues more laden with a public
interest, such as antitrust." Id. at 586 n.2.
We believe that the generally applicable rule for
modifying a previously issued judgment is that set forth in Rule
60(b)(5), i.e., "that it is no longer equitable that the judgment
should have prospective application." It would be a mistake to
view either Rufo or Swift as encapsulating a universal formula
for deciding when that point has been reached. Instead, each of
those cases represents a response to a particular set of
circumstances. A court of equity cannot rely on a simple formula
but must evaluate a number of potentially competing
considerations to determine whether to modify or vacate an
injunction entered by consent or otherwise.
Accordingly, the standard for modifying an injunction
cannot depend on whether the case is characterized as an
institutional reform case, a commercial dispute, or private or
public litigation. Different considerations may have greater or
lesser prominence in different cases, not because the cases are
characterized one way rather than another but because equity
demands a flexible response to the unique conditions of each
case.
We abjure establishing a rigid, pervasively applicable
rule, although it may be helpful to set forth the factors that
generally should be considered in deciding whether to modify an
injunction. These include the circumstances leading to entry of
the injunction and the nature of the conduct sought to be
prevented; the length of time since entry of the injunction;
whether the party subject to its terms has complied or attempted
to comply in good faith with the injunction; and the likelihood
that the conduct or conditions sought to be prevented will recur
absent the injunction. Central to the court's consideration will
be whether the modification is sought because changed conditions
unforeseen by the parties have made compliance substantially more
onerous or have made the decree unworkable. Courts which have
faced similar issues also have identified as a relevant factor
whether the conduct previously enjoined has become legal due to a
change in the law, see, e.g., System Federation No. 91 v. Wright,
364 U.S. 642, 649-50 (1961); Gore, 977 F.2d at 561-63. On the
other hand, the fact that the party is now subject to a contempt
sanction for violation of the decree in addition to the statutory
punishment is not generally a factor to be considered. NLRB v.
General Motors, 179 F.2d 221, 222 (2d Cir. 1950). Nor is the
mere fact that the injunction is in prohibitory language rather
than "mandatory" language in itself a factor that makes it
resistant to modification, as the NLRB urges. See Western
Electric, 46 F.3d at 1206.
Inasmuch as it is unlikely that all of the factors will
tilt in one direction, the court must balance the hardship to the
party subject to the injunction against the benefits to be
obtained from maintaining the injunction. Cf. 7 James W. Moore,
Moore's Federal Practice ¶ 60.26[4], at 60-258 to 60-260 (2d ed.
1995) ("A continuing injunction may be modified when the
modification would work no harm to the one for whom the
injunction ran and would serve a beneficial purpose for the
movant. A subsequent change in the controlling facts on which
the injunction rested . . . may warrant a modification or
vacation of the continuing restraint."). Finally, the court
should determine whether the objective of the decree has been
achieved and whether continued enforcement would be detrimental
to the public interest. In this connection, cases such as Rufo
which deal with institutional reform, particularly in the context
of federal courts' supervision over state institutions, require
that the federal courts be sensitive to the unique federalism
issues presented. See, e.g., Harris v. City of Philadelphia, 47
F.3d 1311, 1331 (3d Cir. 1995). It follows that the interest in
finality of judgments may assume greater or lesser prominence
according to the nature of the case and the private and public
interests implicated, but should not be either deprecated or
ignored.
III.
Having sketched the general principles, we conclude
that application of them to this case leads us ineluctably to
resolution of the issue before us. BCTC bases its contention
that it is no longer equitable for the judgments to have
prospective application on the allegations in the Gillespie
affidavit that it has fully complied with the decrees for the
last six years and is suffering vexatious harassment and undue
hardship due to the continuing existence of the decrees. We
examine each contention in turn.
A.
We will assume arguendo, as Gillespie states in his
affidavit, that from August 4, 1989 to the present "BCTC has not
committed any acts nor engaged in any conduct in violation of the
outstanding consent contempt adjudications and consent decree
injunctions." Affidavit of Patrick Gillespie ¶ 31. However, we
are unwilling to hold, and BCTC cites no persuasive authority,
that the mere passage of time and temporary compliance are
themselves sufficient to constitute the type of changed
circumstances that warrant lifting of an injunction, and
certainly not an injunction under the circumstances of this case.
BCTC relies principally on this court's affirmance of
the dissolution of a permanent injunction that restrained the
defendant from violating certain securities laws and regulations
four years after its entry. See SEC v. Warren, 583 F.2d 115 (3d
Cir. 1978). In 1973, Warren, the defendant, had consented to the
entry of a decree that enjoined him from violating the margin
requirements of the Securities and Exchange Act and Regulation U.
In 1977 Warren moved to dissolve the injunction. Following an
evidentiary hearing, the district court made findings that
approximately ten years had passed since the violation and four
years since entry of the injunction, during which time the
violation did not recur; the violation itself was of limited
duration; and Warren suffered "personal humiliation and business
embarrassment" as a result of the injunction. Id. at 122.
Moreover, an intervening change in regulations diminished the
need for administrative enforcement by contempt. On appeal, we
rejected the SEC's argument that Warren had not satisfied the
Swift standard, then considered the prevailing approach. Instead,
we stated that Warren's "technical violation of the margin
requirements . . . in no way approaches the outrageous conduct
enjoined in Swift." Warren, 583 F.2d at 121. Unlike Swift, no
great public interest was implicated, and the purpose of the
injunction appeared to have been fully achieved. In light of
these circumstances, we concluded that the district court did not
abuse its discretion in dissolving the injunction.
BCTC emphasizes the paragraph in Warren where we stated
that in weighing the convenience of "enforcing a future violation
by contempt proceedings," we must determine whether in the
present circumstances "the decree works extreme and unnecessary
hardship upon the defendants." Id. The facts before us in this
case are far different than those in Warren where the defendant
committed a "single isolated offense in an esoteric area of the
law," which was voluntarily corrected within six months and never
repeated, and did not resist the injunction once it was entered.
Id. Here, by contrast, BCTC consented to the entry of three
different consent decrees over a period of nine years that
reflected charges based on substantially similar conduct at
different sites affecting different employers. The statutory
secondary boycott provisions that BCTC was restrained from
violating are neither technical nor complex. The entry of four
consent contempt adjudications against BCTC in a period of seven
years reflects, at the very least, repeated violations by BCTC,
and in later years by its officials, of the prohibitions which it
had previously voluntarily agreed to observe. BCTC's history of
compliance for the last six years does not erase its history of
noncompliance, as evidenced by the contempt adjudications.
BCTC also refers us to the Supreme Court's decision in
Board of Educ. of Oklahoma City v. Dowell, 498 U.S. 237, 249-50
(1991), where the Court held that a school desegregation decree
could be dissolved if the defendant had complied in good faith
with the decree since it was entered and if the vestiges of past
discrimination had been eliminated to the extent practicable.
BCTC argues that Dowell permits dissolution of the decrees in
this case on a showing that it has fully complied with the
decrees. Otherwise, BCTC claims that it will be subject to the
type of "judicial tutelage for the indefinite future" referred to
in Dowell. Id. at 249.
The situation before us is hardly analogous to the
school desegregation case at issue in Dowell, which presented
"[c]onsiderations based on the allocation of powers within our
federal system." Id. at 248. Federal supervision of local
school systems was intended as a temporary measure to remedy past
discrimination, and was "not intended to operate in perpetuity"
or to displace local control over education beyond the extent
necessary to correct a constitutional violation. Id.
Even assuming that the principles announced in Dowell
extend to this case notwithstanding the unique context of school
desegregation, BCTC has not shown, as the Board of Education
showed in Dowell, that it has complied with the decrees since
they were entered. Indeed, although it is not set forth in
Gillespie's affidavit, BCTC's counsel stated at oral argument,
and we fully accept his statement, that the unions have not
engaged in any picketing for a large portion of the six years.
There is therefore no background upon which any findings could be
made that would show that BCTC has in fact learned how to picket
without treading on the prohibitions against secondary boycott
contained both in the law and the various negotiated consent
decrees. BCTC's statement that it "has fully transformed its
conduct into a model of lawful compliance," BCTC Memorandum at 5,
must be evaluated in light of that decision not to picket at all.
We can no more assume "lawful compliance" for six years with the
secondary boycott prohibitions than we could assume a design
trademark infringer had learned to produce a non-infringing
product from its decision not to produce a comparable product at
all. Under these circumstances, the mere passage of a six-year
period of alleged compliance with the decrees cannot be the basis
for a modification of the decrees.
B.
As a separate basis in support of its motion, BCTC
contends that it has met its burden to show that there has been a
change in facts sufficiently significant to warrant dissolution
of the injunctions and that dissolution is suitably tailored to
the changed circumstances. In support of this argument, it
argues that employers and the NLRB have used the injunctions and
adjudications as a "sword of Damocles" over it, "repeatedly
bringing baseless charges" of unfair labor practices, which were
then withdrawn, "with the aim of harassing the Council and
threatening the imposition of further fines and sanctions."
Affidavit of Patrick Gillespie ¶ 32. In a somewhat related vein,
it also contends that the compliance and recordkeeping
requirements of the most recent contempt adjudication result in
extreme hardship to its members because they inhibit the members'
rights.
We do not take lightly a contention that the rights of
labor union members to freedom of association and expression
protected by both the Constitution and federal law have been and
are being repressed by decrees which this court has approved.
However, it was BCTC's repeated failure to observe the decrees to
which it had agreed that led to the provisions which it now
claims inhibit picketing. The Supreme Court has stated that
modification of a decree is not ordinarily warranted when a party
relies on events actually anticipated at the time it entered into
the decree. Rufo, 502 U.S. at 385. BCTC has not identified any
significant hardship to which it and its members are subject that
was unforeseen at the time it agreed to the 1989 contempt
adjudication, the decree that imposes the procedure for
establishing a picket line and the consequent recordkeeping that
it now contends are burdensome. Nor did BCTC make any effort to
propose to the NLRB even a modest modification of the particular
requirements of picket line procedure which it claims in
conclusory fashion are so burdensome that they warrant wholesale
dissolution of the injunction. BCTC itself explains that the
detailed procedure of the 1989 decree was inserted "to guard
against violations of the Court's judgments." BCTC Memorandum at
4. It does not contend, as we deemed relevant in Warren, "that
the decree is not properly adapted to accomplishing its
purposes." 583 F.2d at 120 (quotation omitted).
While the potential for contempt fines, particularly
the high fines to which it is now subject, certainly heightens
the stakes for BCTC, those progressively increasing fines -- to
which it agreed -- were raised to their present level only after
the earlier less severe sanctions proved ineffective. Therefore,
we need not decide the equity vel non of including a prospective
noncompliance fine at the outset, see Blankenship & Assoc. v.
NLRB, 54 F.3d 447, 449 (7th Cir. 1995), particularly because
these fines accrue with each day of continuing violations. See
id. at 450. Moreover, any attempt at a contempt adjudication,
even on the basis of a stipulated fine, would entitle BCTC and
those subject to the order to judicial overview. See, e.g.,
Harris, 47 F.3d at 1321-25. We have no question that the courts
will be able to distinguish between intentional violations of the
decrees and unjustified harassment by what BCTC denominates as
"vicious anti-labor law firms and employers." BCTC Memorandum at
10. The few instances referred to in the Gillespie affidavit do
not support a claim of unfair or unwarranted wholesale
harassment.
Nothing shown by BCTC approaches the type of changed
circumstances which we held justified a modification in
Philadelphia Welfare Rights Org. v. Shapp, 602 F.2d 1114 (3d Cir.
1979), cert. denied, 444 U.S. 1026 (1980). In that case, after
Pennsylvania agreed in a consent decree to provide certain
medical services to a specified number of welfare recipients by a
date certain, it moved to vacate or modify the decree, contending
that it had attempted good faith compliance with the numerical
requirements but fell short because eligible recipients refused
services or failed to show for appointments and because of a
shortage of participating physicians and dentists. It introduced
evidence that it had committed substantial resources to complying
with the decree and that the total population eligible for
services was significantly lower than that expected at the time
of the decree due to declining welfare rolls.
We affirmed the district court's order eliminating the
numerical requirement, noting that this requirement had proven
impossible of performance due to circumstances beyond the
defendants' control and not contemplated by the court or the
parties at the time of the decree. We held that where an
affirmative obligation is imposed on the assumption that it is
realistically achievable and defendants have made a good faith
effort to comply, but compliance has not been achieved, "a court
of equity has power to modify the injunction in light of
experience." Id. at 1120-21.
In this case, BCTC has made no showing that changed
circumstances have made adherence to the compliance procedure
substantially more onerous or have made the compliance procedure
unworkable.
IV.
For the foregoing reasons, we will deny BCTC's motion
to dissolve the consent judgments and vacate the consent contempt
adjudications.