This is a re-post of Jack Goldsmith’s August 21, 2013 post titled, “Three Problems in Mulhall.“
I have already explained why the Supreme Court’s grant of certiorari in Mulhall seemed to defy its usual criteria for cert-worthiness, and suggested that at least four members of the Court were itching to affirm. After further pondering the case, and acknowledging that Respondent’s merits brief is not yet filed, I am beginning to think that the procedural hurdles to affirmance are so great that the grant might have been imprudent. There are at least three fundamental problems.
Private Right of Action. Section 302 is a criminal statute. Sections 302 (a) and (b) make unlawful certain employer practices, Section 302(c) lists exceptions, and Section 302(d) prescribes “penalties for violations.” How then, is plaintiff Mulhall bringing a civil suit under Section 302, seeking injunctive relief? The statutory basis is Section (e), which confers “jurisdiction” on federal district courts “to restrain violations of this section.” In the context of a statute that is otherwise criminal, this provision appears to confer on the government the authority to seek injunctions in addition to penalties. One indication to the contrary is that Section 302(e) provides for injunctive relief “without regard to” statutes (15 U.S.C. §17 and 29 U.S.C. §52) that prohibits private parties from seeking injunctive relief in labor contexts. I doubt that this indirect indicator of legislative intent would, in any other context, satisfy the Supreme Court’s modern insistence (in cases like Sandoval) on something close to a clear congressional statement for the existence of both a private right of action and a private remedy. (This is especially so since the “without regard to” statutes appear to be a basis for governmental injunctions in the labor context as well.)
It is true that Supreme Court in its 1962 decision Sinclair Refining, relying in part on the “without regard to” language,” stated in dicta that Section 302(e) allowed “private litigants to obtain injunctions in order to protect the integrity of employees’ collective bargaining representatives in carrying out their responsibilities.” And lower courts have relied on Sinclair Refining’s dicta ever since in allowing private parties to seek injunctions under Section 302(e). But Sandoval pooh-poohed the “ancien regime” that casually recognized private causes of action, even (the Court said explicitly) with regard to statutes enacted (as Section 302 was) under this now-rejected casual attitude toward implying private rights. The Sinclair Refining dicta thus should not control in the Supreme Court. Nor, if other recent cases involving a plain statement rule are any guide, should decades-long lower court understandings about the meaning of Section 302(e) stand in the way of its proper interpretation under modern principles of construction. In short, the Court has a messy and potentially embarrassing private right of action issue on its hand should it wish to affirm. (By the way, the private right of action issue was one the District Court likely would have addressed on remand from the Eleventh Circuit’s decision, which underscores the imprudence of granting certiorari in a case in an interlocutory posture.)
Pleading Problem. Plaintiff Mulhall’s theory of Section 302 – in his Complaint, and in subsequent briefing – is that employer concessions in neutrality agreements (neutrality, access, information, etc.) are “things of value” the payment of which violates Section 302(a). Mulhall essentially argued that all neutrality agreements (and other cooperation agreements) violate Section 302. The Eleventh Circuit rejected this argument. It ruled: “It is too broad to hold that all neutrality and cooperation agreements are exempt from the prohibitions in § 302. Employers and unions may set ground rules for an organizing campaign, even if the employer and union benefit from the agreement.” It then added: “But innocuous ground rules can become illegal payments if used as valuable consideration in a scheme to corrupt a union or to extort a benefit from an employer.” The Court ruled that Mulhall’s Complaint stated a “claim for relief,” and then remanded for the District Court to “determine the reason why [UNITE HERE] and Mardi Gras agreed to cooperate with one another.”
The problem is that one searches in vain in Mulhall’s Complaint (App. 63 ff.) for any allegation that the neutrality agreement was part of a scheme to corrupt the union or extort a benefit from the employer. Mulhall simply alleged that the employer concessions violated Section 302, and said nothing about those concessions furthering a corrupt scheme. (It did allege in general terms in Paragraph 28 that “Unions have made, and are liable to make, wage, benefit, and other concessions at the expense of employees they exclusively represent in collective bargaining in exchange, quid pro quo, for” employee concessions, but it pled no such facts with regard to the neutrality agreement in the case.) Under its “corrupt scheme” test, the Court of Appeals should have dismissed the case under Iqbal because Mulhall failed to allege a corrupt scheme. Thus a second a messy and potentially embarrassing issue if the Supreme Court should wish to affirm: The Complaint does not allege facts consonant with the proposed legal regime.
Mootness. It is doubtful that the neutrality agreement in Mulhall remains in force. The agreement states that it is in force “for 4 years from” the first installation of gaming devices in its casino, which occurred in 2006. An arbitrator interpreting the agreement extended it a year because of the employer’s violations. The agreement thus appears to have expired years ago, rendering moot Mulhall’s request for injunctive relief against enforcement of the agreement.
Here are the arguments against mootness, and the government’s response, as set forth in the USG’s amicus brief at the certiorari stage:
UNITE HERE and Mulhall make various arguments why this case is not moot. UNITE HERE notes that an arbitration proceeding is pending, and it suggests that the arbitrator could order extension of the agreement as a remedy for Mardi Gras’ breach of the agreement. See UNITE HERE Cert. Reply Br. 6. It also suggests that Mulhall’s complaint seeks to enjoin the union from ever participating in another such neutrality agreement. Id. at 7. Mulhall, for his part, suggests that the agreement’s terms could be extended, and he also contends that the union would continue to request the access to employer property, employee lists, and neutrality in the absence of an agreement. 12-99 Mulhall Cert. Reply Br. 18. The possibility that an arbitrator in a different proceeding may extend the terms of the agreement seems quite speculative, and this Court has found a case moot under similar circumstances. See Local No. 8-6, Oil, Chem. & Atomic Workers Int’l Union v. Missouri, 361 U.S. 363, 367-368 (1960) (injunction against a strike expired by its terms and the pendency of collateral litigation did not save case from mootness); cf. United States v. Juvenile Male, 131 S. Ct. 2860, 2864 (2011) (per curiam) (a “possible, indirect benefit in a future lawsuit cannot save this case from mootness” as a result of expiration of a challenged registration condition). Moreover, the complaint by its terms appears to seek relief limited to the particular agreement that expired sometime in 2011.
I find the government’s arguments persuasive here. At the very least, mootness is a third messy and potentially embarrassing issue if the Supreme Court should wish to affirm.
Perhaps the Court will reverse in Mulhall on the basis of one of these three arguments (it is not clear that any of them is properly presented, though the first issue might be included within the general interpretation of the statute, and the third is probably jurisdictional). Or perhaps the Court will reverse after determining that employer concessions are not “things of value” under Section 302. (I think this is hard to do, if the Court gets this far.) Or perhaps it will dismiss the case as improvidently granted. But if (as many people think) the right side of the Court is set to affirm on the Eleventh Circuit’s theory of Section 302, it will have to do so in the face of some pretty important conservative principles, including freedom of contract, a presumption against private rights of action, a commitment to strict pleading rules, and respect for the limited subject matter jurisdiction of federal courts.