District 65, Distributive Workers of America v. National Labor Relations Board

BAZELON, Circuit Judge,

concurring in part and dissenting in part:

I fully concur in Parts I-IV of Judge Jameson’s opinion. However, on this record I am unable to join the court in affirming the Board’s decision rejecting the Administrative Law Judge’s (ALJ) recommended award of fees and expenses to District 65.

Congress has given the NLRB considerable discretion in fashioning remedies to effectuate the policies of the National Labor Relations Act.1 Moreover, the award of fees and expenses is an extraordinary remedy.2 Nonetheless, the facts of this case suggest that, at a minimum, the Board’s decision should have addressed the record more carefully and clearly in modifying the remedial aspect of the ALJ’s recommended order.

The Board has made clear that the award of fees and expenses is not a punitive tool to be used against repeated violators of the Act,3 but rather serves to deter abuse of the Board’s processes, such as frivolous litigation pursued only for the purpose of delay.4 At the same time, fee awards should not create a disincentive to the assertion of good faith defenses.

*14The Board has thus articulated a rationale for awarding fees which bears a strong resemblance to the equitable doctrine that “when the losing party has ‘acted in bad faith, vexatiously, wantonly, or for oppressive reasons’ ” in the course of the litigation, a court, may award fees to the prevailing party.5

The ALJ’s careful and thorough opinion is replete with evidence that suggests that the company’s conduct in the Board proceedings constituted just such “bad faith.” Repeatedly the ALJ noted direct and inexplicable self-contradictions in the testimony of key witnesses for the company.6 After noting instance after instance self-contradiction in the testimony of company Vice-President Kay, the ALJ observed: “This is but another example of what might be regarded as a penchant for misleading with words or a high degree of carelessness with candor and accuracy.”7

The Board has held that “where the merit of [a defense] in the last analysis rests upon *15a trial examiner’s resolution of credibility” an award of attorneys fees would be improper because it would discourage legitimate resort to the Board’s processes.8 But to permit a party to defeat an award of fees simply by exhibiting “carelessness with candor” would render meaningless the Board’s attempt to discourage frivolous litigation through the remedy of fee awards endorsed in Heck’s, Inc., 215 N.L.R.B. 765 (1974) (Heck’s II) and Tiidee Products, Inc., 194 N.L.R.B. 1234 (1972).

It is true that, in his “Conclusions of Law”, the ALJ did not point with any precision to the company's conduct during the hearings as a basis for his recommendation that the company reimburse District 65’s expenses. Nonetheless, the ALJ’s opinion is hardly silent on this point, as is clear from even a cursory review. And the Board’s response to the ALJ’s recommendation fails to illuminate with much clarity the basis of the Board’s disagreement with the ALJ.9 While the Board does have considerable discretion in this area, the talismanic characterization of the company’s defense as “not patently frivolous”, without more, gives us little guidance in determining whether the Board’s conclusion reflects “reasoned decisionmaking.” 10 As the Board itself has recognized in fashioning a remedy the Board must explicate the application of existing criteria to the case at bar.11 Yet the Board’s decision sheds no light on what aspects of the record support the conclusion that the company’s defense was not frivolous.

In light of the Supreme Court’s decision in NLRB v. Food Store Employees Local 347, 417 U.S. 1, 94 S.Ct. 2074, 40 L.Ed.2d 612 (1974), it would be inappropriate for us to exercise our authority under §§ 10(e) and (f) of the Act, 29 U.S.C. §§ 160(e) and (f) (1976), and modify the Board’s order to provide for the award of fees. Nonetheless, it is my view that a limited remand is necessary to elucidate the' basis for the Board’s decision not to accept the ALJ’s recommended award.12 In this connection, it may be appropriate for the Board to consider its own suggestion in Heck’s II whether it “ought to apply some more definitive criterion than the distinction between ‘debatable’ and ‘frivolous’ defenses which thus far [the Board] has been utiliz*16ing.”13 Such a course would “effectuate the policies of the Act by making workable the system of restricted judicial review in relation to the wide discretionary authority which Congress has given to the Board” 14 and would help assure that future decisions on the award of fees are based on ascertainable and predictable criteria “without unreasonable discrimination.”15 Such, after all, is the essence of the rule of law.

. NLRB v. Food Store Employees Local 347, 417 U.S. 1, 8, 94 S.Ct. 2074, 40 L.Ed.2d 612 (1974).

. See, e. g., Heck’s Inc., (Heck’s II) 215 N.L.R.B. 765, 767 (1974).

. Id. at 767, 768; Heck’s Inc. (Heck’s I), 191 N.L.R.B. 886, 889 (1971).

. Tiidee Products Inc., 194 N.L.R.B. 1234, 1236 (1972):

[Fjrivolous litigation ... is clearly unwarranted and should be kept from the nation’s already crowded court dockets, as well as our own. While we do not seek to foreclose access to the Board and courts for meritorious cases, we likewise do not want to encourage frivolous proceedings. The policy of the Act to insure industrial peace through collective bargaining can only be effectuated *14when speedy access to uncrowded Board and court dockets is available.

. Runyon v. McCrary, 427 U.S. 160, 183, 96 S.Ct. 2586, 49 L.Ed.2d 415 (1976), quoting F. D. Rich Co. v. United States ex rel. Industrial Lumber Co., 417 U.S. 116, 129, 94 S.Ct. 2157, 40 L.Ed.2d 703 (1974). See Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 258-59, 95 S.Ct. 1612, 44 L.Ed.2d 141 (1975).

. Illustrative examples abound throughout the ALJ’s decision, e. g., Hartz Mountain Corp., 228 N.L.R.B. 492, 512 (1977):

On cross-examination, [Company Personnel Manager] Morales retreated into his “I don’t remember” pattern when asked so broad a question as whether he ever had any discussion with any employee concerning Teamsters Local 806; although Morales subsequently acknowledged informing employees that “normally, the contract had to have a security clause that called for the employees to join the union . . . ,” he again pulled back into denial of ability to “recall” the occasion or context of, or any person involved in, any such remarks by him. In contrast we observe Morales’ assertion in his July, 1974 affidavit to the United States District Court -that “I did indicate on a few occasions that I thought the Teamsters were a good union, and that once a union achieved recognition, all employees would probably have to join that union or be fired.” (CP Exh. 9, p. 4). After first denying that he ever discussed Distributive Workers District 65, Retail Clerks Local 888, or any other union, with any employee, Morales’ attention was drawn to his statement in his District Court affidavit (id.) that “Occasionally I would discuss unions with an employee at his initiative” and he was asked which unions; his response, characteristically, was that he does “not recall” and,' further, that he could not “remember” how that information got into his affidavit to the District Court.

And, id. at 523 n.148:

[Company Vice-President for Engineering and Labor Relations] O’Connor also conceded on the record at the trial that — contrary to his July 22, 1974 affidavit to the United States District Court (GC Exh. 143, p. 1, para. “2(c)”), part of paragraph “29” of Kaye’s affidavit to that Court (GC Exh. 138, p. 14) is not true, and that O’Connor in effect misled the District Court in that Section 10(j) injunction proceeding by failing to state the true facts thereon (Trial transcript, pp. 5712-5718). Contrary also to his earlier testimony at this trial itself, O’Connor swore on cross-examination that he extended recognition to Local 806 for a “clerical and maintenance unit” not on December 17 but on December 21.

And, again, id. at 517:

But there is, again, as in so many instances and aspects of [Company Vice-President] Kaye’s testimony, a degree of apparent incongruity if not outright inconsistency between his own statements in the record here. For example, although his stipulated (GC Exh. 114) “testimony” is that he “noticed that they [i. e., “some” of the Local 806 cards presented to him by Calagna on November 30] were signed and dated,” his actual testimony is that he could see no dates on any but the top card and paid no attention to any dates; while he swore in his July 22, 1974 affidavit to the United States District Court that he “checked” a “random sample” (GC Exh. 138, p. 9) of those cards, he testified at the trial here that he did not take a random sample; and while he swore to the District Court that he “looked” at “many” of the cards (id.) and he testified here that he “thumbed through most” (later, “looked at”; still later, “didn’t look at” but merely “thumbed through”) of the cards in the batch, his stipulated testimony states that “I did not look at most of the cards in the batch.”

.Id. at 523 n.146.

In my view, such factual contradictions, particularly in statements under oath to governmental authorities, like others elsewhere pointed out herein — are substantial and seri*15ous, should be seriously regarded, and merit poor marks for their affiant’s credibility if, indeed, not more serious consequences.

Id. at 523 n.147.

. Heck’s 1, supra, 191 N.L.R.B. at 889. The same principle applies with equal force under bad faith rationale for shifting fees in the courts. See, e. g., Runyon v. McCrary, supra, 427 U.S. at 183-84, 96 S.Ct. at 2601:

Simply because the facts were found against the schools does not by itself prove that threshold of irresponsible conduct for which a penalty assessment would be justified. Whenever the facts in a case are disputed, a court perforce must decide that one party’s version is inaccurate. Yet it would be untenable to conclude ipso facto that that party had acted in bad faith.

. The Board’s only discussion of this issue appears in footnote 2 of the Board’s opinion, Hartz Mountain Corp., supra, 228 N.L.R.B. at 492 n.2 (1977).

Respondent has excepted to the portion of. the Administrative Law Judge’s recommended Order which requires Respondent to reimburse District 65 for reasonable counsel fees and disbursements incurred in the course of this proceeding and for expenses incurred in connection with the organizing campaign at Respondent’s Jersey City plant prior to December 1, 1973. ' We conclude that Respondent’s defenses in this proceeding are not patently frivolous and consequently, in accord with our, usual policy, this extraordinary remedy is not warranted in this proceeding. Cf. Heck’s Inc., 215 NLRB 765 (1974). We shall therefore modify the recommended Order by deleting the reimbursement requirement.

. Greater Boston Television Corp. v. FCC, 143 U.S.App.D.C. 383, 444 F.2d 841, 851 (1970), cert. denied 403 U.S. 923, 91 S.Ct. 2229, 29 L.Ed.2d 701 (1971).

. Heck’s II, supra, 215 N.L.R.B. at 768.

. NLRB v. Food Store Employees Local 347, supra, 417 U.S. at 10, 94 S.Ct. at 2080:

Thus, when a reviewing court concludes that an agency invested with broad discretion to fashion remedies has apparently abused that discretion by omitting a remedy justify in the court’s view by the factual circumstances, remand to the agency for reconsideration, and not enlargement of the agency order, is ordinarily the reviewing court’s proper course.

. Heck’s II, supra, 215 N.L.R.B. at 768.

. Phelps Dodge Corp. v. N. L. R. B., 313 U.S. 177, 196, 61 S.Ct. 845, 85 L.Ed. 1271 (1941).

.Greater Boston Television Corp. v. FCC, supra, 444 F.2d at 851.