Coronado Coal v. UMWA

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Coronado Coal v. UMWA

United States 1925

Synopsis

The U.S. Supreme Court heard two separate Coronado cases, each of which issued from a violent Arkansas coal strike in 1914. In 1922 the Court ruled that the actions of the strikers did not violate the Sherman Antitrust Act because the plaintiff-company did not show that the strikers intended to impede interstate commerce. The plaintiffs then refiled their petition on the strength of new evidence, and in 1925 the Court reversed its earlier decision and ruled that the strike did in fact violate antitrust law. The Coronado doctrine was a major setback to organized labor, for it called into question the legality of any strike that interrupted production of goods that entered interstate commerce.

Timeline

1910: Neon lighting is introduced.
1915: A German submarine sinks the Lusitania, killing 1,195, including 128 U.S. citizens. Theretofore, many Americans had been sympathetic toward Germany, but the incident begins to turn the tide of U.S. sentiment toward the Allies.
1920: Bolsheviks eliminate the last of their opponents, bringing an end to the Russian Civil War. By then, foreign troops, representing a dozen nations that opposed the communists, have long since returned home.
1922: Inspired by the Bolsheviks' example of imposing revolution by means of a coup, Benito Mussolini leads his blackshirts in an October "March on Rome" and forms a new fascist government.
1923: Conditions in Germany worsen as inflation skyrockets and France, attempting to collect on coal deliveries promised at Versailles, marches into the Ruhr basin. In November an obscure political group known as the National Socialist German Workers' Party attempts to stage a coup, or putsch, in a Munich beer hall. The revolt fails, and in 1924 the party's leader, Adolf Hitler, will receive a prison sentence of five years. He will only serve nine months, however, and the incident will serve to attract attention for him and his party, known as the Nazis.
1925: Wyoming Democrat Nellie Tayloe Ross becomes the first woman governor elected in the United States.
1925: European leaders attempt to secure the peace at the Locarno Conference, which guarantees the boundaries between France and Germany, and Belgium and Germany.
1925: In Tennessee, John T. Scopes is fined for teaching evolution in a public school. There follows a highly publicized trial at which famed attorney Clarence Darrow represents the defense, while the aging Democratic populist William Jennings Bryan argues for the state. The "Scopes Monkey Trial" symbolizes a widening divisions between rural and urban America, and though the court decides in favor of the state, it is clear that the historical tide is turning against the old agrarian order symbolized by Bryan—who dies during the trial.
1925: Released from Landsberg Prison, Adolf Hitler is a national celebrity, widely regarded as an emerging statesman who offers genuine solutions to Germany's problems. This year, he publishes the first volume of Mein Kampf (My Struggle), which he dictated in prison to trusted confederate Rudolf Hess. The second and final volume of Hitler's opus, a mixture of autobiography, "history," and racial rant, will appear two years later.
1928: Sixty-five nations sign the Kellogg-Briand Pact, outlawing war.
1930: Naval disarmament treaty signed by the United States, Great Britain, France, Italy, and Japan.
1935: Italians invade Ethiopia, and the response by the League of Nations—which imposes sanctions but otherwise fails to act—reveals the impotence of that organization.

Event and Its Context

The Battle in the Coal Mines

The labor dispute began in 1914. The Bache-Denman Coal Company was the principal owner of a number of coal-mining companies in Sebastian County, Arkansas, including the Coronado Coal Company. For years Bache-Denman had operated most of its mines using union labor and in fact had a contract with local District 21 of the United Mine Workers of America (UMWA) that was due to expire on 1 July 1914. Like other unionized companies in the bituminous coal industry, Bache-Denman faced stiff competition from nonunion mines, which could sell coal at lower prices because they did not have to pay the relatively high wages unionized miners received. The UMWA realized that to survive, it had not only to organize non-union mines but also to ensure that unionized mines remained that way.

Bache-Denman, though, had different ideas. In March 1914 the company decided to close down its unionized mines and reopen them on 6 April on an open, or nonunion, basis. Anticipating trouble in the area's union towns, the company hired guards from a detective agency, armed them with rifles, stretched cable around Prairie Creek Mine No. 4, brought in a number of outof-state workers, and sent notices to workers in the company's houses that they had to vacate unless they remained in the employ of the company. In response, area miners gathered in protest, disarmed the guards, and shut down the mine, which filled with water when the pumps were stopped.

The company won an injunction against the union miners in federal district court and attempted to reopen the mine first under the protection of U.S. deputy marshals, and then of private guards. Mining operations were about to begin when, on 17 July, a force of union workers and sympathizers armed with guns that had been provided and paid for by District 21 attacked the mine, routed the guards, destroyed property and equipment with dynamite and torches, and even murdered two mine employees.

The Battle in the Courts

Organized labor in the 1920s was reeling. It thought that it had won the right to exert collective economic pressure on employers in the form of strikes, boycotts, and other means with the passage of the Clayton Act of 1914, which stated that union activities did not violate antitrust law. The act, however, granted employers an escape clause in its reference to unions' "lawfully carrying out legitimate objects," for it left it in the judiciary's hands to decide whether union activities were lawful or legitimate in particular cases. In one of the first of these cases, Duplex Printing Company v. Deering (1921), the U.S. Supreme Court ruled that the International Association of Machinists' boycott against the Duplex Printing Company violated the Sherman Antitrust Act because it was staged with the specific intent to restrain interstate commerce.

It was in this context that Bache-Denman, through the Coronado Coal Co., brought suit against the United Mine Workers in the District Court for the Western District of Arkansas, alleging that the union destroyed property to consummate a conspiracy to restrain interstate trade. The company claimed damages of $740,000, an amount that would be tripled under Section 7 of the Sherman Act. After prolonged litigation, the Court of Appeals essentially affirmed the district court's judgment of $200,000 against the union, which was then tripled.

The union appealed, and the case came before the U.S. Supreme Court in 1922 as United Mine Workers of America v. Coronado. In the "first" Coronado case, the union thought it won a victory when the Supreme Court overturned the Court of Appeals and vacated the judgment, ruling that the national union had not authorized the strike and that the local union had not violated the Sherman Act. The Court reasoned that because coal mining as such was not interstate commerce, federal antitrust law did not extend to it.

More important, however, the Court provided the company with grounds for an amended complaint. It noted that the company had failed to provide evidence that the local union's intent was to monopolize or restrain interstate commerce within the meaning of the Sherman Act. It was not enough to show simply that the strike reduced the amount of coal in the marketplace; any strike had that effect. Rather, the company had to show that there was a conspiracy to restrain trade or to suppress competition—that is, to keep nonunion coal from entering the marketplace. Virtually inviting the company to amend its complaint, the Court stated that if Bache-Denman could have produced evidence that the local union was part of a conspiracy to eliminate nonunion coal from the market, it would have won the case.

Bache-Denman accepted the Court's invitation and immediately began the search for new evidence. Based on the results of that search, the company amended its complaint and the legal process began again. The case, now Coronado Coal Co. et al. v. United Mine Workers of America et al., the "second" Coronado case, again worked its way to the Supreme Court, which heard it on 7 January 1925.

The company's chief new witness was James K. McNamara, who was secretary of Local Union No. 1526 and worked for the Central Coal and Coke Company, a unionized competitor of Bache-Denman. McNamara, one of the leaders of the bloody events of 17 July 1914, was convicted for violating the original injunction against the strike and sentenced to two years in prison. He testified that between the riot in April and the July conflict, he met with Pete Stewart, the president of District 21. During that meeting Stewart said that he had met with UMWA president John P. White and that the two had formed a plan to prevent Bache from producing coal. Later, McNamara himself met with White in Arkansas. During their conversation White said to him, "Stewart told me that they cannot get enough men to operate the mine. If they do that, we must prevent the coal from getting into the market." When asked whether White had said why, McNamara responded, "He said, 'Because if Bache coal, scab dug coal, got into the market it would only be a matter of time until every union operator in that country would have to close down his mine, or scab it, because the union operators could not meet Bache competition.'"

McNamara went on to testify that White instructed him to go back and tell the workers what he had said. He also testified that he heard a speech in which Stewart offered to provide guns and ammunition to all the families in the area and said that "if it was necessary he would sacrifice his own life to prevent Bache getting coal out there."

The company provided other new evidence as well. It entered an extract from the February 1914 convention proceedings of District 21 in which the delegates discussed the dangers of competition from nonunion mines in Colorado, Alabama, and Tennessee. It also brought forward a former president of District 21 who testified that the danger that nonunion coal would force a nonunion wage scale on the workers was a constant subject of discussion among the union's officers and members.

On 25 May, Chief Justice William Howard Taft delivered the opinion of the Court, which had been persuaded by the new evidence. The Court reiterated that the national union was not involved, but in ruling against the local union, the Court found that it had violated the Sherman Antitrust Act: "When the intent of those unlawfully preventing the manufacture or production [of an article of commerce] is … to restrain or control the supply entering and moving in interstate commerce, or the price of it in interstate markets, their action is a direct violation of the Anti-Trust Act." The opinion stated that the Court believed that the evidence of the second trial proved that there was intent to restrict the movement of nonunion coal to markets outside of Arkansas.

The Aftermath of Coronado

The Court's ruling in the second Coronado case had a profound impact on the United Mine Workers. The decision dampened the UMWA's organizing efforts. In the years that followed, many mine operators filed copycat suits against the union, alleging that the union violated the Sherman Act by attempting to suppress competition from nonunion coal; in fact, the UMWA in these years was named as the defendant in antitrust actions more than any other union.

More importantly, the Court's sweeping decision in Coronado cast doubt on the legality of virtually any strike. Until Coronado, the Court, in such cases as Danbury Hatters (1908) and Gompers v. Bucks Stove and Range Co. (1911), had applied the Sherman Act primarily to secondary boycotts. In Coronado, however, the Court ruled that a strike directly against a company and not involving other business enterprises was unlawful. All a company had to do to show a violation of antitrust law was prove that the union intended to suppress interstate trade.

It was not until 1940 that the Supreme Court nullified the doctrine that it had announced in Coronado. The case, Apex Hosiery Co. v. Leader, arose in connection with a labor dispute that in many respects resembled Coronado. The Apex Hosiery Company refused to accede to the demands of the Philadelphia hosiery workers union that it recognize the union as the workers' bargaining agent. The union called for a strike; workers occupied the plant, and the strike grew violent and destructive. The company filed suit, asking for triple damages under the Sherman Act. The Court ruled in favor of the union and declared finally that union efforts to eliminate nonunion competition by collective economic pressure did not violate the Sherman Antitrust Act.

Key Players

Taft, William Howard (1857-1930): Born in Cincinnati, Ohio, Taft enjoyed a long and distinguished career. Starting in 1892 he was a federal circuit judge until President Theodore Roosevelt appointed him civil governor of the Philippines in 1900, then secretary of war in 1904. Taft was elected president in 1908, but he lost the 1912 election to Woodrow Wilson. In 1913 he joined the Yale law school faculty, which he left in 1921 when President Warren Harding appointed him Chief Justice of the Supreme Court, where he served until a month before his death.

White, John P. (1870-1934): Born in Coal Valley, Illinois, White was head of the Iowa district of the UMWA when, in 1907, he was elected vice president of the national union. Then in 1911 he was elected to succeed Thomas Lewis as president. He served until 1917, when Woodrow Wilson appointed him to the Wartime Federal Fuel Board.