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Chicago Automobile Trade Association v. Madden

February 18, 1964


Author: Castle

Before HASTINGS, Chief Judge, CASTLE and KILEY, Circuit Judges.

CASTLE, C. J.: The defendants-appellants, Ross M. Madden, the Regional Director of the Thirteenth Region of the National Labor Relations Board, et al.*fn1 prosecute this appeal from an order of the District Court enjoining and restraining the National Labor Relations Board, its officers, employees and agents from conducting a hearing de novo in consolidated unfair labor practice cases pending against plaintiffs-appellees and directing the Board and George Bokat, the Board's Chief Trial Examiner, to reassign trial examiner Arthur Reyman to re-open the hearings, which he had recessed sine die, to complete the same and to prepare and issue his Intermediate Report therein within one year.

Plaintiffs-appellees, Chicago Automobile Trade Association, and seven of the association's corporate automobile-dealer members,*fn2 instituted this action in the District Court against the defendants. Plaintiffs' complaint alleged, among other things, that after extensive hearings had before trial examiner Arthur Reyman, and with the Association's motion to dismiss the complaint against it still pending, Reyman adjourned the consolidated hearing sine die on December 12, 1962, and that defendant George Bokat notified the plaintiffs the hearing would commence de novo on January 15, 1963 (later changed to January 22, 1963) before a newly designated trial examiner to be named by Bokat. The complaint charged, in substance, that Reyman's disqualification of himself and withdrawal from the hearing of the consolidated cases "for reasons concerning my personal health" are unauthorized, that Reyman is not "unavailable"*fn3 within the meaning of Section 5(c) of the Administrative Procedure Act (5 U.S.C.A. ยง 1004(c)) and that the order to proceed de novo :

". . . violates Section 11 of the Administrative Procedure Act (5 U.S.C.A. 1011) in that it violates the constitutional rights of plaintiffs to due process of law as guaranteed by Article V of the Constitution of the United States. Specifically, the order of the defendant George Bokat has the effect of affording the Board the opportunity to retry all issues against the plaintiffs, to adduce additional evidence against plaintiffs in the face of a record which shows that the Board examined seven of plaintiffs' witnesses as adverse witnesses under Rule 43(b) of the Federal Rules of Civil Procedure, and thereby disclosed to the Board all of the plaintiffs' defenses."

The defendants moved to dismiss the complaint on the grounds that the District Court was without jurisdiction over the subject matter of the action and that the complaint failed to state a claim upon which relief could be granted; in the alternative, defendants moved for summary judgment in their favor, presenting attached exhibits and affidavits in support of the motion.*fn4 The District Court denied defendants' motions and entered the order from which defendants appeal.

Our conclusion that the District Court lacked jurisdiction of the subject matter (Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41, Vapor Blast Manufacturing Company v. Madden, 7 Cir., 280 F.2d 205, 208-209) makes it unnecessary that we consider or discuss the merits of the contentions advanced by plaintiffs, or the conclusions of the District Court, with respect to the withdrawal of Reyman and the rescheduling of the consolidated cases for de novo*fn5 hearing before another examiner.

We perceive nothing in the record before us which removes this case from the application of the doctrine expressed in Myers and applied by this Court in Vapor Blast . All of the issues raised by plaintiffs' complaint, including their assertion of denial of procedural due process, can be raised on review if the Board's ultimate disposition of the cases is adverse to any of the plaintiffs. The Board's decision and its order are subject to review before the Board's order can be enforced. Section 10(e) and (f) of the National Labor Relations Act affords an exclusive and adequate review procedure which precludes exercise of equitable intervention by the District Court at this stage of the administrative proceeding.

The holding in Myers that the Act provides an exclusive and adequate review procedure is an important facet of the broader doctrine requiring exhaustion of administrative remedies. As Mr. Justice Brandeis stated in Myers (303 U.S. at 50-51) the assertion of district court jurisdiction to interfere with and enjoin unfair labor practice proceedings before the issuance of a final Board order "is at war with the long settled rule of judicial administration that no one is entitled to judicial relief for a supposed or threatened injury until the prescribed administrative remedy has been exhausted."

In Vapor Blast we pointed out (280 F.2d 205 at 209 that:

". . . Merely raising a constitutional issue as to Board procedures in its complaint for declaratory judgment, when full appellate review of the administrative proceedings is available and in the absence of any extenuating circumstances, is insufficient to give the district court jurisdiction over the subject matter in the face of the well-established doctrine of exhaustion of administrative remedies."

An allegation of unconstitutional harm is insufficient to warrant equitable intervention where pursuit of administrative remedies might ultimately render judicial disposition of such issues unnecessary. In an analogous situation in Aircraft & Diesel Equipment Corp. v. Hirsch, 331 U.S. 752, 772 it was observed that:

". . . the very fact that constitutional issues are put forward constitutes a strong reason for not allowing this suit either to anticipate or to take the place of the Tax Court's final performance of its function.When that has been done, it is possible that nothing will be left of appellant's claim."

And, the principle which requires administrative finality as a prerequisite to judicial review has particular force where, as here, the interlocutory order sought to be reviewed relates to the agency's case-handling procedures. United Air Lines, Inc. v. Civil Aeronautics Board (C.A.D.C.), 228 F.2d 13.

Nor does the record before us disclose the existence of any "extenuating circumstances" which warrant departure from the well-established principle applied in the cases above cited. No factor such as that which existed in Leedom v. Kyne, 358 U.S. 184, relied upon by plaintiffs, is present here. The basis for the exception formulated in Kyne was that the party adversely affected by the Board's action could not secure ultimate judicial review thereof under the Act's review provisions. Kyne involved a representation determination not of itself subject to review. The Supreme Cour pointed out (358 U.S. 184 at 190) that in the absence of federal district court jurisdiction the employees involved had no other means within their control to protect and enforce the right Congress ...

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