New York Post Corp. v. Kelley

In the first above-entitled action, plaintiff, a newspaper publisher, seeks a declaratory judgment that the provisions of the New York State Labor Relations Act, hereinafter referred to as N. Y. S. L. R. Act, do not apply to it; that certain newsdealers, licensed by the City of New York, are not its employees; that two organizations, viz.: “ Newsdealers Fed

The complaint alleges in brief that the plaintiff is the publisher of the daily newspaper known as the New Yorlt Post; that the Board has been organized and is existing pursuant to the provisions of section 702 of the Labor Law of our State; that there are upwards of one thousand persons engaged in business in the city of New York as dealers in newspapers, magazines and other articles of merchandise who conduct their businesses on city property pursuant to licenses issued by the Department of Licenses of the City of New York; that those newsdealers are independent retail merchants, many of whom purchase copies of plaintiff’s newspapers from plaintiff and .resell them to the public at a profit; that none of said licensed dealers receives any wages or salary from the plaintiff and that all of them are free to, and do, fix their own hours of labor and are free to determine what newspapers, magazines or other articles of merchandise they wish to sell, without any restriction by the plaintiff; that the dealers conduct their businesses as independent retail merchants, subject only to such restrictions as may be imposed upon them by the city; that none of such dealers is an employee of the plaintiff.

The complaint then alleges that, in an action instituted by the People of the State of New York through the Attorney-General in 1941 against Joseph Masiello, individually and as president of Newsdealers Federal Labor Union, Local No. 22,371, et al., as defendants, pursuant to article 22 of the General Business Law, an injunction was issued by the Supreme Court of the State of New York enjoining the defendants therein named from picketing the- places of business of newsdealers engaged in selling the plaintiff’s newspaper and certain other newspapers published in the city of New York, from coercing the

It then alleges that there were certain proceedings had before the National Labor Relations Board, Second Región, hereinafter referred to as the National Board, by “ New York Newsboys Union, Local 471 ”, in which it was claimed among other things that the plaintiff had refused to recognize that local as the exclusive bargaining agent of certain licensed newsdealers; that thereafter the petition in that proceeding was withdrawn without prejudice following an informal conference at the office of the National Board at which representatives of plaintiff, other newspapers, and Local 471 were present; that thereafter a petition was filed with the State Board by Local 471 requesting that it be certified as the representative of certain licensed newsboys and newsdealers for the purpose of collective bargaining pursuant to the provisions of section 705 of the N. Y. S. L. E. Act; that thereafter pursuant to request of the Board plaintiff attended at an informal conference together with representatives of Local 471; that the attention of the Board was called to the decision in People v. Masiello (supra) and the fact that it had there been held that the licensed newsdealers were independent merchants and not employees of the plaintiff, but that the Board decided to entertain an amended petition of Local 471 .wherein it was alleged that the aforementioned licensed newsdealers were employees of plaintiff, that there were approximately fourteen hundred of them, and that a question or con

The complaints in the other three actions are substantially the same.

The Board answered in each action and then moved under section 476 of the Civil Practice Act and rule 112 of the Rules of Civil Practice for orders granting judgment that the Board had jurisdiction or dismissing the complaints on the ground that upon the face of the pleadings the defendants were entitled to the relief requested in their answers and upon the further ground that the complaints did not state facts sufficient to constitute causes of action. The relief asked for in the answers was that judgment be made and entered adjudging and decreeing that the complaints be dismissed or in the alternative that defendants have judgment against the plaintiffs. The defendants further moved under rule 113 of the Rules of Civil Practice for orders dismissing the complaints on the ground that the actions had no merit. The motions were denied at Special Term and, upon affirmance, the Appellate Division certified certain questions of law for review by us.

We think the complaints state facts sufficient to constitute causes of action for declaratory judgments. Jurisdiction over such actions has been confided to the Supreme Court, which is

Upon the controverted facts presented on those portions of the motions which were brought under the Rules of Civil Practice, rule 113, there can be proper determinations only after trial.

In each of the above-entitled actions the order should be affirmed, with costs, and the questions certified answered in the negative.

(dissenting). The plaintiffs are newspaper publishers in New York,City.

Local 471 of the Newsboys Union filed with appellant State Labor Relations Board a petition under section 705 of the Labor Law, alleging therein that plaintiffs had refused to recognize petitioner as the exclusive bargaining agent of certain newsboys and newsdealers. The union demanded that it be certified by the Board as such exclusive agent. Following its usual practice, the Board thereupon held, at its office, a preliminary conference to which plaintiffs were invited and at which their representatives attended. At that conference (a sort of “ pre-trial ” meeting) plaintiffs’ representatives stated to the Board that the newsboys or newsdealers, whose chosen agent Local 471 claimed to be, were not employees of any of the plaintiffs, but were independent merchants. This the union denied. The Board took no testimony and made no determination of any kind but gave notice of a formal public hearing (see Labor Law, § 705, subd. 3). Meanwhile another union (Local 22,371 of the Newsdealers Federal Labor Union) intervened in the proceeding pending before the Board, insisting that it, and not' Local 471 of the other union, was the chosen bargaining agent of the newsboys or newsdealers. This entrance into the proceedings, of Local 22,371, was the occasion for plaintiffs asserting another objection to the Board’s taking jurisdiction. Plaintiffs told the Board that the rival locals were both affiliates of the American Federation of Labor (controversies between such associated unions are removed from the Board’s jurisdiction by subdi

The Board served answers in these declaratory judgment suits. It denied any knowledge or information sufficient to form a belief as to the truth of the assertions made by plaintiffs that the union members are entrepreneurs, not employees, and that the two unions are both included ip the American Federation of Labor. Both these questions, alleged the Board in separate defenses, are “ for the Board alone to determine in the first instance.” Elsewhere in the answers the Board pointed out that it has taken no testimony and made no determination in the pending Board proceeding, that plaintiffs are not aggrieved at this time, that they have not exhausted the administrative remedies given by the Labor Law and that there is no justiciable controversy between plaintiffs and the Board. The Board prayed for a dismissal of the complaint or for judgments in its favor against plaintiffs.

After service of the pleadings, defendant Board moved in each of the four above-entitled actions, for judgment on the pleadings, and for summary' judgment. All motions were denied by the courts below. (For reasons to be stated at the end of this opinion, we will deal herein with the motions for judgments on the pleadings only.)

Stated in simplest terms, the position of plaintiffs is that they are entitled to maintain these actions because, as they con

Plaintiffs cite many precedents for the propriety of the use of a declaratory judgment suit to stay the hand of an administrative body when it attempts to act without jurisdiction. But those are all cases “ where a constitutional question is involved or the legality or meaning of a statute is in question and no question of fact is involved ” (New York Operators v. State Liquor Authority, 285 N. Y. 272 , 276, citing Dun & Bradstreet, Inc., v. City of New York, 276 N. Y. 198 , 206). Typical are the tax and licensing cases, such as New York Operators v. State Liquor Authority (supra); Dun & Bradstreet, Inc., v. City of New York, supra; Aerated Products Co. v. Godfrey ( 263 App. Div. 685 , revd. on other grounds, 290 N. Y. 92 ); and Booth v. City of New York ( 296 N. Y. 573 .) In such situations where it is not the facts which are in dispute but the meaning or legality of the statute under which the administrative body is purporting to deal with the citizen, then the, courts, doing the traditional work of courts, will entertain declaratory judgment suits to pass on the question of law as to the statute’s meaning or validity. Appellant Board was itself held subject to that kind of judicial control in Bank of Yorktown v. Boland ( 280 N. Y. 673 ) and Allegheny Ludlum Steel Corp. v. Kelley ( 295 N. Y. 607 ). But in the Yorktown and Allegheny cases the courts did not take over, as they are asked to do in the present cases, the arbitrament of factual questions which the Legislature has seen fit to submit to the Labor Relations Board. Of course, the presence of issues of fact does not in itself require the dismissal of a suit for declaratory judgment (see rule 213 of the

Whether or not the administrative process is “ our generation’s answer to the inadequacy of the judicial and the legislative processes ” (Landis on The Administrative Process, p. 46), the use thereof by our State Legislature, as an instrument of public control, is firmly established. No constitutional or other impediment stands in the way of the lawmakers when they use such processes to effectuate public policies declared by them. Nothing in the fundamental law prevents the Legislature from “ leaving to selected instrumentalities * * * the determination of facts to which the policy as declared by the legislature is to apply ” (Chief Justice Hughes in the Schechter case, 295 U. S. 495 , 530). In 1937, with the passage of a Labor Relations Act, New York entered into a wholly new State activity: the investigation and punishment of “ unfair labor practices ”, including the enforcement of the right of employees to collective bargaining through selected agents. Involved in that new State activity was the certification of such bargaining agents, by the Labor Relations Board. (No one, up to now, has ever suggested that any .tribunal other than the Board has this power and duty, so I do not see what turns on the omission of the unnecessary word “ exclusive ” from sections 705 and 706 of the Labor Law). In making such certifications the Board must, if a dispute arises, decide which one (if any), of competitor unions has in fact been selected by a group of employees as their bargainer. In plainest language the Legislature, in section 705 of the Labor Law, directed the Board to settle such contests by holding elections, or by other appropriate methods. Of course, this was all quite new. Just as this State had long ago changed the status of party nominating conventions as “ private fights ”, and brought them under strict regulation by public bodies, so, for sufficient reasons, this State, by enacting the Labor Relations Law, took upon itself the task of presiding over the selection of bargaining agents and of certifying the results thereof. In so doing, the Labor Relations Board is no one’s antagonist

Of course, the Board certifies bargaining agents for ‘1 employees ’ ’ only. When there is a preliminary dispute as to whether those who seek certification are or are not employees of the putative employer, who is to decide that question? Who decides the same question when in a hearing on a workmen’s compensation or unemployment insurance claim, issue is joined as to whether or not the claimant is or was in fact an employee ? Is it conceivable that all or any of thousands of hearings held before workmen’s compensation or unemployment insurance referees would be held up so that an alleged employer might take to the Supreme Court, in a declaratory judgment suit, his assertion that the claimant was no employee of his? Those questions answer themselves. The Legislature, in delegating to its creatures, the administrative tribunals, the trial of certain claims or petitions by “ employees ”, empowered those tribunals to decide simple questions of fact as to who are “ employees.” In acting under such grants of power, the boards usurp no constitutional or traditional office of the courts. Any questions of law are still for- the courts. As Justice Brandéis wrote in 1936: “ The supremacy of law demands that there shall be opportunity to have some court decide whether an erroneous rule of law was applied; and whether the proceeding in which facts were adjudicated was conducted regularly ” (concurring opinion in St. Joseph Stock Yards Co. v. United States, 298 U. S. 38 , 84). That requirement, however, does not

“ There should be mentioned, finally, the doctrine that in various circumstances a party must exhaust available administrative remedies before resorting to the courts, and the related doctrine that in various circumstances a statutory provision for one method of judicial review will exclude resort to other judicial proceedings ” (l Benjamin on Administrative Adjudication, pp. 365-366, and cases cited in footnotes 17 and 18).

The language of section 473 of the Civil Practice Act, which sets up declaratory judgment procedures in the State, is broad and comprehensive. But, while “ no limitation has been placed

Respondents argue that, by moving for judgment on the pleadings, defendant Board admitted the allegations of the complaint that the union members were independent businessmen and that the rival unions were both affiliated with the American Federation of Labor. “If the defendant moves, he admits every material fact set out in the complaint ® (Emanuel v. Walter, 138 App. Div. 818 , 819.) But such a constructive admission does not include every statement found in a complaint. What has been said in preceding paragraphs hereof establishes, we think, that the complaint’s averments that the newsdealers were not employees and that the unions were both members of the same Federation, were not material to any litigable controversy between plaintiffs and the State Labor Relations Board. The Board could not, by any kind of action or proceeding, be forced to carry on any such dispute with plaintiffs, in another forum. Plaintiffs, pleading their own unproven version of the facts as to these two mooted matters, could not put the Board to an admission or a denial thereof. The Board could, as it did, deny that it knew what the true facts were, and insist that whatever the facts were, the Board itself w%s the State agency commissioned by the Legislature to perform the judicial or quasi-judicial act of determining those facts. Plaintiffs say that the Board is frequently cast in the role of adversary to employers or alleged employers. So it is, where the Legislature has commanded it to play such a role. But not in representation proceedings, where the Board is the merest umpire or stakeholder.

Furthermore, plaintiffs have failed to join either of the unions, or any of the individual newsboys or newsdealers, as defendants. Plaintiffs say, and the courts below held, that this was at worst a mere defect of parties defendant, subject to correction but not

Plaintiffs argue that, at least as to the question of whether the disputant unions are or are not sister organizations, the Board is barred by the statute itself (Labor Law, § 705, subd. 3) from all “ authority to investigate any question or controversy ” between affiliates. Therefore, say plaintiffs, the Board may not even investigate to see whether such a relationship exists between the unions. That is the same as saying that an employer may stop a representation' proceeding merely by asserting the alleged affinity of unions whose competing claims are before the Board. We see no difference in kind between that question and the question of employer-employee relationship. The Board is, of course, of limited jurisdiction. But when the existence or not of that jurisdiction depends on an issue of fact, the Board itself, and no other tribunal, is the appointed trier of that fact. e

In all the above, we have been treating the question as to the status of the newsdealers as if it were a simple or single issue of pure fact, with no complications or complexes of fact, no room for conflicting inferences. It may turn out to be something quite different. Such seemingly simple problems as whether a transaction was or was not a sale, and whether a certain place was or was not a factory, turned out to be matters of judgment for experienced administrators (Matter of Mounting & Finishing Co. v. McGoldrick, 294 N. Y. 104 ; ReK Rooh Cold Storage Co. v.

The working out of the inter-relation between administrative agencies and courts has been a slow and difficult one. It is unfortunate that the discussion, too often carried on in an atmosphere of contest, has generated so much heat. The courts and the boards are not rivals. ‘ ‘ * * # in construing a statute setting up an administrative agency and providing for judicial review of its action, court and agency are not to be regarded as wholly independent and unrelated instrumentalities of justice, each acting in the performance of its prescribed statutory duty without regard to the appropriate function of the other in securing the plainly indicated objects of the statute. Court and agency* are the means adopted to attain the prescribed end, and so far as their duties are defined by the words of the statute, those words should be construed so as to attain that end through co-ordinated action. Neither body should repeat in this day the mistake made by the courts of law when equity was struggling for recognition as an ameliorating system of justice; neither can rightly be regarded by the other as an alien intruder, to be tolerated if must be, but never to be encouraged or aided by the other in the attainment of the common aim ” (United States v. Morgan, 307 U. S. 183 ,191). The dismissal of this suit will not take from the Supreme Court any of its time-honored functions. A reversal here leaves the law of this State as it has been for a century (People v. Goodwin, 5 N. Y. 568 ): duly authorized boards make their own findings of fact, independently of the courts. Neither at common law (People ex rel. Haines v. Smith, 45 N. Y. 772 , 776, 777) nor under any statute, past or present, have the courts in certiorari proceedings, or otherwise, ever had any duty or right of reviewing generally on the facts the decisions of Legislature-created administrative bodies. By defeating at the 1938 election the proposed new Judiciary Article of

We repeat: we are not saying that the Labor Relations Board may never be sued for a declaratory judgment (Bank of Yorktown v. Boland, supra; Allegheny Ludlum Steel Corp. v. Kelley, supra). If the Board strays outside its statutory bounds by taking any palpably arbitrary or unlawful action, then the protection of an affected party may, under special circumstances, require and justify the interposition of a court, even though there be lacking specific statutory provision for certiorari or other court review of, or stay of, the particular Board determination. Such a situation would be analogous to those above described (Booth v. City and similar cases cited, supra), where taxing bodies make levies against persons clearly not subject to the particular taxes. But no such stage has been reached in any procedures this Board has conducted against these plaintiffs. Defendant Board cannot be accused of making an arbitrary or capricious decision since it has made no decison at all, or even taken testimony. It cannot be held to have gone outside its statutory jurisdiction since the fact questions on which its jurisdiction depends are at issue, disputed and unresolved, before the Board itself. And surely the Board has not violated any constitutional right of plaintiffs, since the whole matter of designating bargaining agents is statutory, and no constitutional question is involved.

We have not treated at any length herein the denial by the courts below of the motions of defendant Board for summary judgments. Were defendant’s other motions for judgments on

In each of the above-entitled actions the orders appealed from should be reversed, with costs in all courts. The first certified question should be answered in the affirmative, the other certified question not answered.

Lotjghran, Ch. J., Lewis, Thacher and Dye, JJ., concur with Conway, J.; Desmond, J., dissents in opinion in which Fuld, J., concurs.

Orders affirmed, etc.