Unpublished Disposition, 884 F.2d 1395 (9th Cir. 1987)

MEMORANDUM^* 

Appellants International Association of Bridge, Structural & Ornamental Iron Workers, Local 29 ("Local 29") and Iron Workers District Council of the Pacific Northwest ("District Council") challenge the district court's order holding them in contempt of an injunction prohibiting violations of 29 U.S.C. §§ 158(b) (4) (A) & (B). Appellants also challenge the district court's imposition of sanctions. Appellee NLRB challenges the amount of sanctions awarded. The district court had jurisdiction pursuant to 29 U.S.C. § 160(1), and we have jurisdiction under 28 U.S.C. § 1291. We affirm.

In early July of 1986, charges of unfair labor practices were filed against both unions with NLRB. NLRB Regional Director, John D. Nelson, filed a petition in the district court alleging that he had "reasonable cause to believe" that Local 29 and the District Council were violating sections 8(b) (4) (A) & (B) of the National Labor Relations Act ("the Act"). On July 17, 1986, the district court granted a temporary injunction pursuant to 29 U.S.C. § 160(1) pending the final disposition of the underlying unfair labor practices claim before the NLRB. The district court based its ruling on a magistrate's report.

On August 28, 1986, the NLRB filed the petition for civil contempt and imposition of fines against the unions which is the subject of this appeal. The NLRB alleged that the unions had resumed the picketing activities forbidden by the injunction between August 18-22 with the same unlawful purpose of seeking a contract in violation of section 8(e). The district court held a hearing on the contempt petition on September 25, 1986, and found both unions in contempt for violating part (a) of the injunction.

On February 2, 1987, the district court held a hearing on the appropriate sanction. On April 10, 1987, the court awarded sanctions of $5088.70 to the NLRB. The court did not award the NLRB the full amount of its expenses, deleting the hours of several attorneys.

Both parties timely appealed.¹ 

This court reviews a district court's determination of contempt for abuse of discretion. General Signal Corp. v. Donallco, Inc., 787 F.2d 1376, 1379-80 (9th Cir. 1986). We review the district court's findings of fact under the clearly erroneous standard. Hoffman v. Cement Masons Local 547, 468 F.2d 1187, 1193 (9th Cir. 1972), cert. denied, 411 U.S. 986 (1973).

The NLRB must prove every element of contempt by clear and convincing evidence. Hoffman v. San Francisco Typographical Union No. 21, 465 F.2d 53, 57 (9th Cir. 1972). The unions were in contempt if they failed to take all reasonable steps within their power to comply with the injunction. Schuffler v. Heritage Bank, 720 F.2d 1141, 1146 (9th Cir. 1983).

Appellants argue that the NLRB failed to prove that the unions violated the Act and that the district court thus erred in finding them in contempt of the injunction. Appellants contend that their conduct did not violate the Act because they are exempt from section 8(b) (4) (A) because of the construction proviso of section 8(e), and because their conduct fits within an exception for agreements pursued within collective bargaining relationships. See Connell Constr. Co. v. Plumbers Local 100, 421 U.S. 616 (1973). Appellants argue that they could have established that their post-injunction conduct did not violate the Act if the court permitted evidence of the history of the collective bargaining relationship between the parties.

The district court issued the injunction because it had "reasonable cause to believe" appellants' pre-injunction conduct violated the Act. The purpose of section 10(1) injunctive actions is to enable the Board to obtain relief pending administrative determinations of whether conduct violates the Act. Miller v. United Food & Commercial Workers Union, 708 F.2d 467, 470 (9th Cir. 1983). Thus, the litigation over whether an actual violation has occurred takes place in the underlying unfair practices administrative proceedings.

Appellants argue that this court should allow them to challenge the validity of the injunction in this appeal because no other opportunity for effective review of the injunction was available before the alleged violation occurred. See Wright, Miller & Cooper, Practice & Procedure: Jurisdiction 2d Sec. 3537, at 541, 546 (1984). However, the unions had an opportunity to contest the validity of the injunction. Although the unions claim that they had no chance to respond to the district court's initial order to show cause, this court has already determined that the unions lost the opportunity to challenge the injunction by failing to appear and that no "manifest injustice" was presented. No. 86-4159 (Oct. 19, 1987). Parties subject to an injunction cannot relitigate its validity in contempt proceedings. See Local 28 of the Sheet Metal Workers' Int'l Ass'n v. EEOC, 106 S. Ct. 3019, 3032 n. 21 (1986) (citing Maggio v. Zeitz, 333 U.S. 56, 69 (1948)). Parties must obey an injunction, even if it is vague. McComb v. Jacksonville Paper Co., 336 U.S. 187, 191-92 (1949); see Walker v. City of Birmingham, 388 U.S. 307, 321 (1967). Any vagueness challenge should have been brought up in the earlier proceedings before this court. See Szabo v. United States Marine Corp., 819 F.2d 714, 718 (7th Cir. 1987).

The unions have had a full opportunity to litigate whether their conduct violated the Act in the underlying administrative unfair labor practices proceedings. In that action, an administrative law judge ruled on September 30, 1987 that the unions had violated sections 8(b) (4) (A) & (B) in their pursuit of a subcontracting clause and by engaging in illegal picketing of neutrals. The ALJ held that the unions were not exempt because of the construction industry proviso and that they did not qualify for section 8(e) exception under the collective bargaining history analysis. That decision has been affirmed by the NLRB with a minor revision in the order, and the unions could choose to petition this court for review of those proceedings. At that time, this court can consider whether the unions' activities violated section 8(e).

The purpose of the injunctive proceeding was to determine whether there was reasonable cause to believe that the union's picketing and related activity was done with the object of forcing or requiring Hoffman Construction Company of Oregon ("Hoffman") to enter into an agreement with a provision restricting the ability to subcontract ironworkers' craft work was an unfair labor practice. The court found reasonable cause and issued the injunction. The injunction's wording in part (a), which is here in issue, prohibited

Picketing Hoffman, or inducing and encouraging any individual employed by Hoffman, and by other persons engaged in commerce, or in an industry affecting commerce ... to engage in strikes and refusals in the course of their employment to use, manufacture, process, transport, or otherwise handle or work on goods, articles, materials, or commodities or to perform services where in either case an object thereof is to force to require Hoffman to enter into a collective bargaining agreement containing provisions prohibited by Section 8(e) of the Act.

The unions argue that the agreement they sought to obtain was not in violation of section 8(e) because they were entitled to the construction industry exemption of that section. They contend that the wording of the injunction begs the question of the underlying dispute, and thus, the court could not find contempt unless it determined that the contract they sought did violate section 8(e). There is no doubt that the wording of the injunction would have been clearer had it specifically prohibited the unions from engaging in the picketing, and other specified activity, where an object thereof was to force or require Hoffman to enter into a collective bargaining agreement containing a provision restricting subcontracting ironworkers' craft work. However, the object of the unions' picketing was to require Hoffman to sign the very same contract that was the object of the prior enjoined picketing. It tests credulity to believe that the unions were not well aware of the fact that this violated the very purpose of the injunction.

We read the injunction "in light of the issue and the purpose for which the suit was brought." Terminal Railroad Ass'n v. United States, 266 U.S. 17, 29 (1924). The unions were aware that their prior conduct, upon which the injunction was based, was temporarily prohibited pending resolution of the unfair practices claim. See Hoffman, 465 F.2d at 57. The district court based its order on the magistrate's report. The magistrate specifically found the unions' conduct as meeting the "reasonable cause" standard because one of the objects of the strike was to force Hoffman to enter into a collective bargaining agreement containing a subcontracting clause such as that contained in the former contract with Hoffman.

The unions' only argument properly within the scope of the contempt proceedings is that their conduct after the injunction differed from their conduct prior to the injunction and that their post-injunction conduct was not prohibited by part (a) of the injunction. The unions contend that after the injunction they did not seek a "naked" subcontracting clause. The unions argue that they were just seeking to negotiate a new contract and were open-minded about possible terms. The district court noted that the unions "do not deny that they continued to picket Hoffman after the issuance of the order. Rather, [they] contend that the purpose of their picketing both before and after the issuance of the injunction was not in violation of the Act, or ... unlawful." The district court found that the only purpose in continuing the negotiations, since they did not represent any ironworkers currently working for Hoffman, was to seek a subcontracting clause. The union leaders relied extensively on a phrase added to the picket signs during August at the direction of their counsel: "We seek no contract in violation of law." The district court considered this alteration only one of form in light of the unions' other picketing and negotiating activities. See Hoffman, 465 F.2d at 57. We do not find this clearly erroneous.

Further, the unions conceded in a hearing before the district court that this issue revolves around the credibility of the negotiators from the unions and Hoffman. The district court considered the testimony of Hoffman's negotiator, James D. Hutchison, credible. The union leaders' testimony did not support their claim that their conduct was different after the injunction. Our review of the evidence shows that the district court's reliance upon the credibility of Hutchison rather than the union leaders was not clearly erroneous.

The District Council's argument that it should not be held in contempt must fail. The district court's findings that Worley authorized the picketers to change their signs and used the strike to pressure Hoffman illegally were not clearly erroneous. LeRoy Worley, President of the District Council, conducted the post-injunction negotiations with Hutchison in large part. When Worley left for a two-week vacation in August, he said that he told Hutchison who would be handling negotiations while he was gone. Hutchison testified that Worley used his vacation to threaten Hoffman, leaving the impression he was in charge of the negotiations for both unions. Worley admitted that "we tried to comply with [the injunction] ... Picket signs at Hoffman were altered...." The injunction forbade encouraging others to strike for an illegal purpose and participating with others to pressure Hoffman illegally.

The district court's determination that the unions were in contempt was not an abuse of discretion.

We review the district court's decision to award sanctions to NLRB for civil contempt for an abuse of discretion. General Signal, 787 F.2d at 1379-80.

"The amount of a compensatory contempt fine is in the discretion of the court." United States v. Asay, 614 F.2d 655, 660 (9th Cir. 1980) (citing United States v. United Mine Workers, 330 U.S. 258, 304 (1947)).

The district court here termed its award of attorneys' fees and costs to NLRB "compensatory sanctions." See Schuffler, 720 F.2d at 1147. The unions argue that the district court improperly awarded attorneys' fees and expenses to NLRB personnel because the award was not compensatory for any actual damage suffered by NLRB personnel as a result of the contumacious action. United Mine Workers, 330 U.S. at 303-04. However, attorneys' fees and expenses, including the salaries of NLRB personnel involved in the contempt proceedings can be included as compensatory sanctions. Hoffman v. San Francisco Typographical Union, 78 L.R.R.M. 2309, 2325-26 (N.D. Cal. 1970), aff'd, 492 F.2d 929 (9th Cir. 1974); NLRB v. Carpinteria Lemon Ass'n, 274 F.2d 492 (9th Cir. 1960); NLRB v. J.P. Stevens & Co., Inc., 563 F.2d 8 (2d Cir. 1977), cert. denied, 434 U.S. 1064 (1978); NLRB v. Clinton Packing Co., Inc., 527 F.2d 560 (8th Cir. 1976); see also Squillacote v. Local 248, Meat & Allied Food Workers, 534 F.2d 735, 748 (7th Cir. 1976). The NLRB's expenses in this action were certainly incurred as a result of the unions' contumacious conduct. Cf. Donallco, 787 F.2d at 1380 (award refused because fees were not incurred as a result of the contempt). Thus, the district court's award of sanctions in the form of compensation for NLRB attorneys' fees and costs expended in the contempt proceedings against the unions was within the court's discretion.

The unions also challenge the amount of the award as unreasonable. The amount of sanctions is generally limited to the actual damage caused by the conduct in civil contempt. Asay, 614 F.2d at 660-61. This is not an "exceptional" case involving the "wholesale" adoption of proposed findings, Sealy, Inc. v. Easy Living, Inc., 743 F.2d 1378 (9th Cir. 1984), or the " 'absence of contemporary time records, in conjunction with extraordinarily high hourly rates and claims for time spent in the most punctilious appellate research and preparation.' " Southerland v. International Longshoremen's & Warehousemen's Union, Local 8, No. 85-4428, slip op. at 9 n. 4 (9th Cir. Dec. 15, 1987) (quoting Grendel's Den, Inc. v. Larkin, 749 F.2d 945, 950 (1st Cir. 1984)). Although hourly time records were not kept in this case, daily sheets of what tasks NLRB personnel performed were kept and the district court did not adopt the time records wholesale. It deducted the fees of several attorneys. Further, the NLRB's hourly rates awarded for the contempt proceedings (ranging from $21.73 to $32.66 per hour) were not extraordinarily high. Further, the NLRB submitted detailed affidavits to support that the hours expended were reasonable and not duplicative.

Finally, appellants argue that the NLRB should not be compensated for all of the time expended because they did not prevail on every issue. We examine the outcome of the basic controversy when compensating a civil litigant, United Mine Workers, 330 U.S. at 304, and conclude that the NLRB did prevail in large part by securing a determination that the unions' conduct violated the injunction.

The district court properly denied appellants' discovery, briefing, and hearing on the amount of the sanctions because of the additional costs that would have been involved.

On cross-appeal, the NLRB challenges the amount of the award. The NLRB argues that it was an abuse of discretion for the district court to deduct the hours expended by some of its Washington personnel, the Regional Director, and his assistant. This decision was not an abuse of discretion. See Asay, 614 F.2d at 660 n. 3. We believe that the district court carefully considered the reasonableness of the number of hours expended.

The district court's contempt order is affirmed because the unions had adequate opportunity to challenge the validity of the injunction in No. 86-4159. The unions have further opportunity to litigate the issue of whether their conduct constitutes unfair labor practices in violation of sections 8(b) (4) (A) & (B) in the underlying NLRB proceedings. If the unions contest the ultimate NLRB disposition, they can petition this court for review.

The district court's award of compensatory damages to the NLRB and the amount of the award are upheld as within the court's discretion.

AFFIRMED.