United Mine Workers of America v. Coronado Coal Company

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This is a writ of error brought under section 241 of the Judicial Code (Comp. St. § 1218) to review a judgment of the Circuit Court of Appeals of the Eighth Circuit. That court on a writ of error had affirmed the judgment of the District Court for the Western District of Arkansas, in favor of the plaintiffs, with some modification, and that judgment thus affirmed is here for review.

The plaintiffs in the District Court were the receivers of the Bache-Denman Coal Company, with eight other corporations, in each of which the first-named company owned a controlling amount of stock. They were closely interrelated in corporate organization and in the physical location of their coal mines. These had been operated for some years as a unit under one set of officers in the Prairie Creek valley in Sebastian county, Ark. In July, 1914, the District Court for the Western District of Arkansas appointed a receiver for all of the nine companies by a single decree. The receiver then appointed was Franklin Bache, whose successors are as such defendants in error here.

The defendants in the court below were the United Mine Workers of America and its officers, District 21 of the United Mine Workers of America and its officers, 27 local unions in District No. 21 and their officers, and 65 individuals, mostly members of one union or another, but including some persons not members, all of whom were charged in the complaint with having entered into a conspiracy to restrain and monopolize interstate commerce, in violation of the first and second sections of the Anti-Trust Act (Comp. St. §§ 8820, 8821), and with having, in the course of that conspiracy, and for the purpose of consummating it, destroyed the plaintiff's properties. Treble damages for this and an attorney's fee were asked under the seventh section of the act (Comp. St. § 8829).

The original complaint was filed in September, 1914, about six weeks after the destruction of the property. It was demurred to, and the District Court sustained the demurrer. This was carried to the Court of Appeals on error, and the ruling of the District Court was reversed. Dowd v. Inited Mine Workers, 235 Fed. 1, 148 C. C. A. 495. The case then came to trial on the third amended complaint and answers of the defendants. The trial resulted in a verdict of $200,000 for the plaintiffs, which was trebled by the court, and to which was added a counsel fee of $25,000, and interest to the amount of $120,600, from July 17, 1914, the date of the destruction of the property, to November 22, 1917, the date upon which judgment was entered. The verdict did not separate the amount found between the companies. On a writ of error from the Court of Appeals, the case was reversed as to the interest, but in other respects the judgment was affirmed. 258 Fed. 829. The defendants the International Union and District No. 21 have given a supersedeas bond to meet the judgment, if it is affirmed as against both or either of them.

The third amended complaint avers that of the nine companies, of which the plaintiff was receiver, and for which he was bringing his suit, five were operating companies engaged in mining coal and shipping it in interstate commerce, employing in all about 870 men, and mining an annual product when working to their capacity valued at $465,000, of which 75 per cent. was sold and shipped to customers outside of the state. Of the five operating companies, one was under contract to operate the properties of two of the others, and four nonoperating companies were each financially interested in one or more of the operating companies, either by lease, by contract, or by the ownership of all or a majority of their stock. The defendant the United Mine Workers of America is alleged to be an unincorporated association of mine workers, governed by a constitution, with a membership exceeding 400,000, subdivided into 30 districts and numerous local unions. These subordinate districts and unions are subject to the constituttion and by-laws, not only of the International Union, but also to constitutions of their own.

The complaint avers that the United Mine Workers divide all coal mines into two classes, union or organized mines, operating under a contract with the union to employ only union miners, and open shop or nonunion mines, which refuse to make such a contract; that, owing to the unreasonable restrictions and regulations imposed by the union on organized mines, the cost of production of union coal is unnecessarily enhanced, so as to prevent its successful competition in the markets of the country with nonunion coal; that the object of the conspiracy of the United Mine Workers and the union operators acting with them is the protection of the union-mined coal by the prevention and restraint of all interstate trade and competition in the products of nonunion mines. The complaint enumerates 23 states in which coal mining is conducted, and alleges that the coal mined in each comes into competition in interstate commerce, directly or indirectly, with that mined in Illinois, Kentucky, Alabama, New Mexico, Colorado, Kansas, Oklahoma, and Arkansas, in the markets of Louisiana, Texas, Oklahoma, Nebraska, Kansas, Missouri, Iowa, and Minnesota, where, but for the defendants' unlawful interference, plaintiffs would have been engaged in trade in 1914; that the bituminous mines of the greater part of the above territory are union mines, the principal exceptions being Alabama, West Virginia, parts of Pennsylvania, and Colorado, which the defendant has thus far been unable to organize.

The complaint further avers that early in 1914 the plaintiff companies decided that the operating companies should go on a nonunion or open shop basis. Two of them, the Prairie Creek Coal Mining Company and the Mammoth Vein Coal Company, closed down and discontinued as union mines, preparatory to reopening as open shop mines in April. They were to be operated under a new contract by the Mammoth Vein Coal Mining Company. Another of the companies, the Hartford Coal Company, which had not been in operation, planned to start as an open shop mine as soon as convenient in the summer of 1914. The fifth, the Coronado Coal Company, continued operating with the union until April 18, 1914, when its employes struck because of its unity of interest with the other mines of the plaintiffs. The plaintiffs say that in April, 1914, the defendants and those acting in conjunction with them, in furtherance of the general conspiracy, already described, to drive nonunion coal out of interstate commerce, and thus to protect union operators from nonunion competition, drove and frightened away with plaintiffs' employees, including those directly engaged in shipping coal to other states, prevented the plaintiffs from employing other men, destroyed the structures and facilities for mining, loading, and shipping coal, and the cars of interstate carriers waiting to be loaded, as well as those already loaded with coal in and for interstate shipment, and prevented plaintiffs from engaging in or continuing to engage in interstate commerce. The complaint alleges that the destruction to the property in business amounted to the sum of $740,000, and asks judgment for three times that amount, or $2,220,000. Certain of the funds of the United Mine Workers in Arkansas were attached. The defendants the United Mine Workers of America, District No. 21, and each local union, and each individual defendant filed a separate answer. The answers deny all the averments of the complaint. The trial began on October 24, 1917, and a verdict and judgment were entered on November 22, following. The evidence is very voluminous, covering more than 3,000 printed pages.

Messrs. Wm. A. Glasgow, Jr., of Philadelphia, Pa., G. L. Grant, of Ft. Smith, Ark., Henry Warrum, of Indianapolis, Ind., Webb Covington, of Ft. Smith, Ark., and Charles E. Hughes, of New York City, for plaintiffs in error.

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Messrs. Henry S. Drinker, Jr., of Philadelphia, Pa., and James B. McDonough, of Ft. Smith, Ark., for defendants in error.

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Messrs. Daniel Davenport, of Bridgeport, Conn., Walter Gordon Merritt, of New York City, and Thomas Hewes, of Hartford, Conn., amici curiae.

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Mr. Chief Justice TAFT, after stating the case, delivered the opinion of the Court.