Syllabus

SUMMIT VALLEY INDUSTRIES, INC. v. LOCAL 112, UNITED BROTHERHOOD OF CARPENTERS & JOINERS OF AMERICA

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

No. 81-497. Argued April 28, 1982-Decided June 1, 1982

As the result of a labor dispute between petitioner employer and respondent union, petitioner filed an unfair labor practice charge against the union, alleging that it had violated the secondary boycott and jurisdictional picketing prohibitions of § 8(b)(4) of the National Labor Relations Act (NLRA). The National Labor Relations Board (Board) found against the union, and the Board's order was judicially enforced. Petitioner filed this action in Federal District Court pursuant to § 303 of the Labor Management Relations Act (LMRA), seeking damages resulting from the union's illegal activity in an amount that included both business losses and attorney's fees incurred during the Board proceedings. Section 303(a) makes it unlawful for a union to engage in conduct defined as an unfair labor practice under § 8(b)(4) of the NLRA, and § 303(b) provides that whoever is injured in his business or property because of a violation of § 303(a) may sue in a federal district court “and shall recover the damages by him sustained and the cost of the suit." The District Court entered judgment for petitioner, awarding it an amount that represented its business losses, but concluded that petitioner was not entitled to recover attorney's fees as part of its damages. The Court of Appeals affirmed.

Held: Attorney's fees incurred during Board proceedings are not a proper element of damages under § 303(b) of the LMRA. Pp. 721-727.

(a) Neither the language nor the legislative history of § 303 supports petitioner's contention that §303 provides statutory authorization for such attorney's fees for purposes of the American Rule that attorney's fees are not ordinarily recoverable in the absence of a statute or enforceable contract providing therefor. The legislative history instead shows that Congress did not intend to expand the ordinary meaning of the term "damages" in § 303(b) to include attorney's fees. Cf. Teamsters v. Morton, 377 U. S. 252. Pp. 721-724.

(b) Nor can allowance of attorney's fees incurred during Board proceedings be justified on the asserted ground that it would further Congress' intent to protect employers from the adverse effects of a union's illegal secondary activity. This interest is adequately protected by the

award of compensatory damages for the business losses resulting from the union's prohibited conduct. Even assuming that attorney's fees are necessary to "fully" compensate the victimized employer, this justification alone is not sufficient to create an exception to the American Rule in the absence of express congressional authority. Cf. F. D. Rich Co. v. United States ex rel. Industrial Lumber Co., 417 U. S. 116, 128129. To adopt petitioner's analysis would authorize the recovery of attorney's fees in every case where the plaintiff has prevailed against the defendant in prior litigation involving the same issues. Such a result is clearly barred by this Court's prior decisions and by the American Rule. Pp. 724-726.

652 F.2d 65, affirmed.

MARSHALL, J., delivered the opinion for a unanimous Court.

Donald C. Robinson argued the cause and filed briefs for petitioner.

David S. Paull argued the cause for respondent. him on the brief was Paul T. Bailey.*

With

JUSTICE MARSHALL delivered the opinion of the Court. We granted certiorari to decide whether §303 of the Labor Management Relations Act (LMRA), 61 Stat. 158, as amended, 29 U. S. C. § 187, authorizes the recovery of attorney's fees incurred in prior proceedings before the National Labor Relations Board (Board). 454 U. S. 1079 (1981). The Courts of Appeals have divided on this issue.' In this

*J. Albert Woll, Laurence Gold, and George Kaufmann filed a brief for the American Federation of Labor and Congress of Industrial Organizations as amicus curiae urging affirmance.

'The Fifth, Sixth, and Eighth Circuits have held that attorney's fees may be recovered. See Texas Distributors, Inc. v. Local Union No. 100, 598 F.2d 393 (CA5 1979); Local Union No. 984, International Brotherhood of Teamsters v. Humko Co., 287 F. 2d 231 (CA6), cert. denied, 366 U. S. 962 (1961); Associated General Contractors of Minnesota v. Construction and General Laborers Local No. 563, 612 F. 2d 1060 (CA8 1979). The First Circuit has expressed approval of this rule in dicta. See F. F. Instrument Corp. v. Union de Tronquistas de Puerto Rico, 558 F. 2d 607, 611 (1977). The Ninth Circuit alone has reached contrary conclusion. See Mead v. Retail Clerks International Assn., 523 F. 2d 1371 (1975).

case, the Court of Appeals for the Ninth Circuit held that attorney's fees may not be recovered. We affirm.

I

Petitioner Summit Valley Industries, Inc. (Summit Valley), manufactures prefabricated modular homes. These homes are completed at petitioner's plant and sold directly to home buyers. The buyer then independently obtains the services of a local contractor to install the completed home and to attach ancillary structures. In June 1972, Summit Valley opened a plant in the Butte, Mont., area. Rather than utilizing skilled union carpenters at this plant, petitioner hired unskilled workers. These workers were represented by Butte Teamsters Union, Local No. 2 (Teamsters), under a collective-bargaining agreement between the Teamsters and Summit Valley.

Upon learning that Summit Valley employed no skilled carpenters, respondent Local 112 of the United Brotherhood of Carpenters and Joiners of America (Union) filed unfair labor practice charges against Summit Valley. The Union claimed that Summit Valley had violated a valid work-preservation agreement between the Union and area contractor associations. Although the Union withdrew these charges when it realized that Summit Valley was not a signatory to the agreement, it ordered its members not to work on the installation of petitioner's homes. On at least two occasions, Summit Valley sent its own employees to complete the installation work that would otherwise have been done by the Union. As a result, respondent began picketing petitioner's plant.

Summit Valley filed an unfair labor practice charge against the Union, alleging that respondent's work stoppage and picketing violated the secondary boycott and jurisdictional picketing prohibitions of the National Labor Relations Act (NLRA). §§ 8(b)(4)(B) and (D) of the NLRA, 29 U. S. C. §§ 158(b)(4)(B) and (D). The Regional Director of the Board

initiated a §10(1) proceeding, 29 U. S. C. §160(1), in the United States District Court for the District of Montana. The District Court imposed a temporary restraining order pending the outcome of the proceeding before the Board. Henderson v. United Brotherhood of Carpenters and Joiners of America, Local 112, Civ. Nos. 2235 & 2239 (1972). The Union ceased picketing in November 1972, and its members resumed the installation of Summit Valley's homes.

Summit Valley then initiated a § 10(k) proceeding, 29 U. S. C. §160(k), seeking resolution of its claim that the Union had engaged in illegal jurisdictional picketing, prohibited by §8(b)(4)(D). After a 2-day hearing, the Board found against the Union, holding that Summit Valley had validly assigned the work in question to the Teamsters. Carpenters, Local 112 (Summit Valley Industries), 202 N. L. R. B. 974, 83 LRRM 1013 (1973). The Union agreed not to pressure Summit Valley to reassign work in violation of its collective-bargaining agreement with the Teamsters. However, the Union maintained that it had the right to truthfully advise the public that petitioner did not employ its members in the construction of modular homes.

After the § 10(k) proceeding, an Administrative Law Judge (ALJ) conducted 15 days of hearings on the unfair labor practice charges. The ALJ concluded that the Union had violated §§ 8(b)(4)(B) and (D), but that the Union had sought to enforce the work-preservation clause on the good-faith belief that its actions were lawful. The Board adopted the findings of the ALJ, and it ordered the Union to cease and desist from these unfair labor practices, and to fully comply with the Board's order obtained as a result of the § 10(k) proceeding. Carpenters, Local 112 (Summit Valley Industries), 217 N. L. R. B. 902, 89 LRRM 1799 (1975). The Court of Appeals for the Ninth Circuit enforced the Board's order. Chamber of Commerce of United States v. NLRB, 574 F. 2d 457 (1978).

This action was filed pursuant to § 303 of the LMRA in the United States District Court for the District of Montana.

Summit Valley sought damages resulting from the Union's illegal secondary and jurisdictional activity in the amount of $17,279.33: $3,675.00 in business losses, and $13,604.33 in attorney's fees incurred during the Board proceedings. The District Court found that the Board's decision that the Union had committed unfair labor practices collaterally estopped the Union from relitigating this issue in the § 303 action. Relying on Mead v. Retail Clerks International Assn., 523 F. 2d 1371 (CA9 1975), the District Court concluded that Summit Valley was not entitled to recover attorney's fees as part of its damages. The court entered judgment for Summit Valley, awarding it an amount that represented its business losses. 475 F. Supp. 665 (1979). The Court of Appeals affirmed in an unpublished per curiam. Civ. No. 79-4663 (CA9 1981); 652 F. 2d 65 (1981) (affirmance order).

II

Under the American Rule it is well established that attorney's fees "are not ordinarily recoverable in the absence of a statute or enforceable contract providing therefor." Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U. S. 714, 717 (1967). This Court has endorsed certain exceptions to this rule where necessary to further the interests of justice. See, e. g., Vaughan v. Atkinson, 369 U. S. 527 (1962) (bad faith); Toledo Scale Co. v. Computing Scale Co., 261 U. S. 399 (1923) (willful disobedience of a court order); Central Railroad & Banking Co. v. Pettus, 113 U. S. 116 (1885) (common fund). In the absence of one of these equitable exceptions, however, the rule has been consistently followed for almost 200 years. See Alyeska Pipeline Co. v. Wilderness Society, 421 U. S. 240, 249–250 (1975); Arcambel v. Wiseman, 3 Dall. 306 (1796). Recognizing this consistent adherence to the American Rule, petitioner contends that § 303 provides express statutory authorization for the recovery of attorney's fees incurred in prior Board proceedings. We find this contention unsupported by either the language or the legislative history of § 303.