author: HAYS, Circuit Judge:

text:
    Anthony IODICE et al., Plaintiffs-Appellees-Appellants, v. Adele CALABRESE and Teamsters and Chauffeurs Local 456, International Brotherhood of Teamsters, Defendants-Appellants-Appellees.
    Nos. 73, 109, Dockets 73-2470, 74-1884.
    United States Court of Appeals, Second Circuit.
    Argued Nov. 20, 1974.
    Decided Feb. 25, 1975.

      Leon J. Greenspan, White Plains, N. Y. (Greenspan & Aurnou, White Plains, N. Y., on the brief), for plaintiffs-appellees-appellants.
    John J. Sheehan, New York City, for defendants-appellants-appellees.
    Before SMITH, HAYS and MANSFIELD, Circuit Judges.
   HAYS, Circuit Judge:

Plaintiffs filed suit in New York Supreme Court alleging that defendants Peter Calabrese and Teamsters and Chauffeurs Local 456 of the International Brotherhood of Teamsters had violated § 303 of the Labor Management Relations Act, 29 U.S.C. § 187 (1970), the labor contract between plaintiff Pelham Transportation Co. and Local 456, and various provisions of New York state law. On defendants’ motion, the case was removed to the United States District Court for the Southern District of New York. See Iodice v. Calabrese, 291 F.Supp. 592 (S.D.N.Y.1968). After trial, Chief Judge Edelstein, sitting without a jury, held that the defendants had violated § 303 and the labor contract with Pelham. Iodice v. Calabrese, 345 F.Supp. 248 (S.D.N.Y.1972). For the violation of § 303, he granted plaintiff Anthony Iodice nominal damages of $100 and plaintiff Thornwood Excavators and Movers, Inc. damages of $5,000. For violation of the labor contract, he granted Pelham damages of $14,900. The other claims were dismissed.

We reverse the decision as to the violation of the labor contract. We affirm the holding as to the § 303 claim but remand to the district court on the issue of damages. In all other respects, we affirm.

I.

For many years, Anthony Iodice has worked in the Westchester County construction industry operating his own trucking equipment. During that time he has had a stormy relationship with Local 456 of the Teamsters and particularly with its secretary-treasurer, Peter Calabrese. At one time Iodice was a member of the Local as an owner-driver, but in 1949 the union decided that owner-drivers should not continue to be allowed to become or remain members of the union. The union offered the owner-drivers an opportunity to sign contracts with the union as owners. Iodice was among many who declined to do so.

In October 1951, Iodice testified that while driving for a company against which Local 456 was striking, he had witnessed an assault by Calabrese. Calábrese was convicted and served nine months in prison.

Since 1953 Iodice has been in the business of moving heavy construction machinery by use of a low-bed trailer and tractor. He operated under his own name until 1965, when he sold his equipment to Thornwood Excavators and Movers, Inc., which was formed by his sister Elissa Guiliano, and went to work for Thornwood as a manager and driver.

The district court found that at various times, both on his own and with Thornwood, Iodice lost business because of pressure put on customers by Local 456 not to deal with him. 345 F.Supp. at 254. The district court enumerated five specific instances in which contractors had hired Iodice to move their equipment but later let him go. 345 F.Supp. at 254-55. In each instance Peter Calabrese threatened the customer with either work stoppages or fines or both if he did not stop dealing with Iodice. In three of the cases, he imposed fines on contractors for having already dealt with Iodice.

Early in 1965 Iodice entered into a contract on behalf of his friend Bart Ruggiero to buy Pelham Transportation Co., which held certificates of public convenience and necessity from the Interstate Commerce Commission and the New York State Public Service Commission. Iodice held no formal position with Pelham but he did serve as an informal adviser on such matters as the computation of rates and the selection of routes. Iodice also contacted Local 456 on behalf of Pelham to propose a contract and to request that the union accept Pelham’s two drivers, Nicholas Tramonti and Joseph Nicolai, as members. Calabrese agreed and on April 9, 1965, Iodice and Ruggiero came to the union hall where, at Calabrese’s insistence, Iodice signed the contract.

On November 5, 1965, Local 456 began picketing Pelham’s premises. Calabrese told Ruggiero that the reason for the picketing was Pelham’s failure to make fringe benefit payments as required by the union contract. On December 17 Ruggiero had checks sent to cover what was owed. Calabrese sent the checks back on December 20 on the grounds that the amounts sent were inadequate and that Pelham also owed Tramonti $1,323 for the seven weeks he had not worked because of the picketing. Calabrese claimed that this money was due to Tramonti because Iodice had driven for Pelham in place of Tramonti in violation of the union contract. The picketing continued for two years, during which time Pelham could not do any work. Eventually, Ruggiero sold its equipment and the ICC revoked its certificate of public convenience.

Around the beginning of 1969, Iodice went to work as manager and driver for Pleasant Excavators and Equipment Rental Company, another corporation owned by his sister.

II.

Local 456 argues that the action it took against the contractors wlio dealt with Iodice was protected primary activity because it was intended to enforce the work preservation clauses in the union’s contract. However, the district judge found that the pressure exerted on contractors dealing with Iodice was intended to force them to cease doing business with Iodice. The court concluded therefore that Local 456 had violated § 8(b)(4)(B) and consequently § 303 of the Labor Management Relations Act, 29 U.S.C. §§ 158(b)(4)(B), 187 (1970), regardless of whether other factors had also led it to take action against Iodice’s customers. We agree.

Section 8(b)(4)(B) makes it an unfair labor practice for a labor organization to “threaten, coerce or restrain” any person engaged in commerce “where an object thereof” is to force him to cease doing business with any other person. It is well settled that such action is not immunized merely because the union claims to be enforcing the terms of its contract. Landstrom v. Chauffeurs, Teamsters, Warehousemen & Helpers, Local 65, 476 F.2d 1189, 1192-93 (2d Cir. 1973); N.L.R.B. v. Milk Drivers and Dairy Employees Local 584, 341 F.2d 29, 32-33 (2d Cir.), cert. denied, 382 U.S. 816, 86 S.Ct. 39, 15 L.Ed.2d 64 (1965); N.L.R.B. v. International Union of Operating Engineers, Local 12, 293 F.2d 319, 322-23 (9th Cir. 1961). When a labor organization takes action for the purpose of forcing an employer to cease doing business with another, it violates § 8(b)(4)(B) even if it has other purposes as well. N.L.R.B. v. Denver Building and Construction Trades Council, 341 U.S. 675, 689, 71 S.Ct. 943, 95 L.Ed. 1284 (1951); Local 74, United Brotherhood of Carpenters and Joiners v. N.L.R.B., 341 U.S. 707, 713, 71 S.Ct. 966, 95 L.Ed. 1309 (1951); N.L.R.B. v. New York Lithographers & Photo-Engravers Union, No. One-P, 385 F.2d 551, 554-56 (3d Cir. 1967).

The union argues that under the Supreme Court’s decision in National Woodwork Manufacturers Ass’n v. N.L.R.B., 386 U.S. 612, 87 S.Ct. 1250, 18 L.Ed.2d 357 (1967), the action which it took allegedly to enforce its work preservation clause should be considered a protected activity under the statute, regardless of the impact on third parties such as Iodice. This argument misconstrues the holding in National Woodwork. In that case, the Court dealt with the refusal by a carpenters’ union to hang prefitted doors, use of which was prohibited by its collective bargaining agreement with the contractors. The Court upheld a finding that this action “related solely to preservation of the traditional tasks of the jobsite carpenters,” and therefore held it to be protected primary activity. 386 U.S. at 646, 87 S.Ct. at 1269; Id. at 648, 87 S.Ct. 1250 (Memorandum of Harlan, J.); see Houston Insulation Contractors Ass’n v. N.L.R.B., 386 U.S. 664, 668, 87 S.Ct. 1278, 18 L.Ed.2d 389 (1967). Here, however, the district court found that the union’s action against the contractors was intended at least in part as a weapon in its dispute with Iodice. The intention to hurt Iodice by putting pressure on his customers brings the case squarely within the secondary boycott provisions of § 8(b)(4)(B).

III.

The plaintiffs argue that the district court erred in awarding Thornwood only $5,000 and Iodice only nominal damages of $100 for injury suffered as a result of the union’s violations of § 303. The district court awarded damages of $5,000 to Thornwood based on the testimony of five customers as to the amount of business they normally did with Thornwood before the union pressured them into dealing elsewhere. 345 F.Supp. at 273. Further damages were denied because the court was dissatisfied with the proof Iodice submitted concerning the profits he earned individually and with Thornwood up to 1969, when his labor problems subsided. 345 F.Supp. at 271-73.

In actions under § 303, the courts have held that

“[w]hile the employer must prove that he has sustained some injury to his business or property, he need not detail the exact amount of damages suffered. It is sufficient if the evidence supports a just and reasonable approximation.” Sheet Metal Workers, Local 223 v. Atlas Sheet Metal Co., 384 F.2d 101, 109 (5th Cir. 1967).

See Landstrom v. Chauffeurs, Teamsters, Warehousemen & Helpers, Local 65, 476 F.2d 1189, 1195 (2d Cir. 1973); Mason-Rust v. Laborers’ International Union, Local 42, 435 F.2d 939, 945-46 (8th Cir. 1970); Flame Coal Co. v. United Mine Workers, 303 F.2d 39, 44 (6th Cir.), cert. denied, 371 U.S. 891, 83 S.Ct. 186, 9 L.Ed.2d 125 (1962).

In light of these principles, we remand to the district court for a reassessment of plaintiffs’ damages. The district court obviously found Iodice’s testimonial and documentary evidence insufficient to establish precisely how much profit was lost from 1963 until 1969. However, the court did find that during that time the union had engaged in a largely successful campaign to keep business away from Iodice. 345 F.Supp. at 254 — 55. On remand the district court should “make a just and reasonable estimate of the damage [suffered by Iodice and Thornwood] based on relevant data,” Bigelow v. RKO Radio Pictures, Inc., 327 U.S. 251, 264-65, 66 S.Ct. 574, 580, 90 L.Ed. 652 (1946), including the testimony of Iodice and of customers, and evidence of profits realized by Pleasant Excavators after the unfair labor practices had ceased.

IV.

In addition to the actions by Iodice and Thornwood under § 303, Pelham and Bart Ruggiero sued under § 301 of the Labor Management Relations Act, 29 U.S.C. § 185 (1970), for breach of Pelham’s labor contract. The district court held that Local 456 had violated the agreement by continuing its strike beyond December 20, when Calabrese rejected Pelham’s offer and insisted that Tramonti be paid for the time he had missed. 345 F.Supp. at 267. Accordingly, the court granted Pelham $14,900 in damages. We disagree with the district court’s determination that Local 456 was liable under § 301 for breach of contract.

The union contract to which Pelham and Local 456 agreed contained neither a no-strike nor an arbitration clause. 345 F.Supp. at 265. In such cases the courts will not imply an absolute contractual bar to strikes during the term of the agreement. See Local 174, Teamsters, Chauffeurs, Warehousemen & Helpers v. Lucas Flour Co., 369 U.S. 95, 105 n. 14, 82 S.Ct. 571, 7 L.Ed.2d 593 (1962).

Recognizing this fact, the district court nevertheless held that our “national' labor policy” requires that strikes for “no legitimate labor purpose” be forbidden as breaches of contract, even absent no-strike or arbitration clauses, 345 F.Supp. at 266-67. In the view of the district judge, the union’s strike was for a “legitimate labor purpose” as long as its demand for fringe benefit payments went unanswered. As soon as the union rejected Pelham’s tender of payment as inadequate and added the demand that Tramonti’s back wages be paid, the strike became illegitimate.

In our view, national labor policy does not permit the courts to outlaw a •strike solely on the ground that it appears to be unreasonable. Unless the strike is itself an unfair labor practice under § 8(b) of the Act, see, e. g., United Mine Workers v. Osborne Mining Co., 279 F.2d 716 (6th Cir.), cert. denied, 364 U.S. 881, 81 S.Ct. 169, 5 L.Ed.2d 103 (1960), or is prohibited by a no-strike or arbitration clause in a contract, see, e. g., Boys Markets, Inc. v. Retail Clerk’s Union, Local 770, 398 U.S. 235, 90 S.Ct. 1583, 26 L.Ed.2d 199 (1970); Local 174, Teamsters, Chauffeurs, Warehousemen & Helpers v. Lucas Flour Co., supra, it remains a legitimate economic tool which labor organizations may use as they see fit. Cf. § 13 of the Labor Management Relations Act, 29 U.S.C. § 163 (1970). We therefore hold that the continuation of the strike beyond December 20 did not give rise to a cause of action under § 301.

V.

After trial plaintiffs amended their complaint to allege that the union’s interference with Iodice’s customers not only violated § 303 of the LMRA but also constituted a tortious interference with contractual relations, in violation of New York’s common law. 345 F.Supp. at 259. The district court granted leave to amend but then dismissed the cause of action on the merits. Id. at 274. We affirm the dismissal.

In Local 20, Teamsters, Chauffeurs & Helpers Union v. Morton, 377 U.S. 252, 84 S.Ct. 1253, 12 L.Ed.2d 280 (1964), the Supreme Court held that “state law has been displaced by § 303 in private damage actions based on peaceful union secondary'activities . . ..” 377 U.S. at 261, 84 S.Ct. at 1259. Since the district court in the present case found no evidence of violence, 345 F.Supp. at 264-65, the plaintiffs are entitled to neither compensatory nor punitive damages under state law. See United Mine Workers v. Gibbs, 383 U.S. 715, 721, 729-30, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966).

VI.

In their amended complaint, plaintiffs also alleged that Local 456 violated § 1 of the Sherman Act, 15 U.S.C. § 1 (1970), by conspiring with a non-labor group, the employers association, to restrain trade in the Westchester County construction industry. They claimed that the conspiracy encompassed the union’s practices of requiring non-association employers to pay the same wages as the association was paying, fining employers for hiring non-union labor, and “featherbedding.” The district court dismissed the antitrust cause of action, 345 F.Supp. at 274, and we affirm.

Union activity of the type complained of here does not lose its exemption from the antitrust laws unless it is part of a conspiracy or combination between a union and a non-labor group. See United Mine Workers v. Pennington, 381 U.S. 657, 661-62, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965); United States v. Hutcheson, 312 U.S. 219, 232, 61 S.Ct. 463, 85 L.Ed. 788 (1941). The district court found that there was insufficient evidence of any such conspiracy between Local 456 and the employers association. 345 F.Supp. at 269. We therefore hold that Local 456 did not violate the antitrust laws.

The decision of the district court as to the cause of action under § 301 is reversed. The decision of the district court as to the cause of action under § 303 is affirmed but the case is remanded for a reassessment of damages in a manner consistent with this opinion. In all other respects, the decision of the district court is affirmed.

      . The plaintiffs originally claimed that the defendants had violated § 340 of the New York General Business Law (McKinney’s Consol. Laws, c. 20, 1968) and the New York commón law against secondary picketing and boycotting, and that Calabrese had violated the fiduciary duties which he owed to Local 456 under New York law. 345 F.Supp. at 258. The causes of action for violation of § 340 and for Calabrese’s breach of fiduciary duty were withdrawn in plaintiffs’ closing argument, and the cause of action for violation of New York’s secondary boycott law was dismissed by the district judge on the ground that § 303 pre-empts state law in the area of secondary activities. 345 F.Supp. at 274. See Part V infra. No objections to this dismissal were raised on appeal. After trial the plaintiffs moved for leave to amend their complaint to add causes of action for tortious interference with contractual relations and for violation of the antitrust laws. The district court granted leave to amend, 345 F.Supp. at 258, but dismissed the causes of action on the merits. Id. at 274. See Parts V and VI infra.

      . Some time after the conclusion of the trial in the district court, Peter Calabrese died. His wife, as executrix of his estate, has been substituted as a defendant. See 345 F.Supp. at 253 n. 1.

      . Article VII of the contract, entitled Extra Equipment, provided:
      “In the event the Employer hires additional equipment from employers not under contract with the Union, his employees shall operate such equipment if they are not otherwise assigned to work but, in any event, such hired equipment shall be operated by an employee in accordance with the provisions of this agreement.”
      Article XIII of the contract, entitled Outside Contracts, provided:
      “The Employer shall not, during the term of this agreement, contract or agree to contract or otherwise assign, work performed by employees covered by this agreement to any other firm, contractor, corporation, partnership, individual or otherwise, except as provided by Article VIII hereof. It is agreed that employees covered by this agreement shall continue to do all types of work heretofore performed by them. The Employer shall use employees covered hereby to move cranes, cats or shovels. However, if an independent contractor is engaged for such work, he shall perform the same under conditions not less favorable than those contained herein.”

      . § 8(b)(4)(B) of the Labor Management Relations Act, 29 U.S.C. § 158(b)(4)(B) (1970), provides the following:
      “(b) It shall be an unfair labor practice for a labor organization or its agents— “. . . [4] (ii) to threaten, coerce or restrain any person engaged in commerce or in an industry affecting commerce, where in either case an object thereof is— “. (B) forcing or requiring any person ... to cease doing business with any other person “Provided, That nothing contained in this clause (B) shall be construed to make unlawful, where not otherwise lawful, any primary strike or primary picketing . ..”

      . § 303 of the Labor Management Relations Act, 29 U.S.C. § 187 (1970), provides the following:
      “(a) It shall be unlawful, for the purpose of this section only, in an industry or activity affecting commerce, for any labor organization to engage in any activity or conduct defined as an unfair labor practice in section 158(b)(4) of this title.
      “(b) Whoever shall be injured in his business or property by reason or [sic] any violation of subsection (a) of this section may sue therefor . and shall recover the damages by him sustained and the cost of the suit.”

      . We are satisfied that the jurisdictional requirements of § 303 have been met. See 345 F.Supp. at 260 n. 8.

      . For' purposes of its opinion, the district court assumed without finding that the union acted in part to enforce the work preservation clause. 345 F.Supp. at 260-61. However, plaintiffs contend, with support in the record, that the contractors who hired Iodice did not have the equipment necessary to move the type of heavy machinery which Iodice was hired to move. They argue, therefore, that the union was really totally unconcerned with preserving its jobs with the contractors since those jobs were in no way affected by the hiring of Iodice.

      . Plaintiffs attempted to prove their damages by comparing the profit earned in 1969 by Pleasant Excavators and Equipment Rental Co., which they claim was almost identical to Thornwood in all relevant respects including ownership and management, with the average annual profits earned by Iodice, individually and with Thornwood, while the trouble with Local 456 was still a factor. See 345 F.Supp. at 271.

      . The parties stipulated that plaintiffs may recover damages only for the period subsequent to February 11, 1963. 345 F.Supp. at 270.

      . Punitive damages are also not available under § 303. See Local 20, Teamsters, Chauffeurs, & Helpers Union v. Morton, 377 U.S. at 260, 84 S.Ct. 1253.

      . Plaintiffs cite Linn v. United Plant Guard Workers, Local 114, 383 U.S. 53, 86 S.Ct. 657, 15 L.Ed.2d 582 (1966) and Abrams v. Carrier Corp., 434 F.2d 1234 (2d Cir. 1970) in support of their claim for damages under state law. We find these cases inapposite. In Linn the Court held that the interest of the state in protecting its residents from malicious libel is “an overriding state interest,” comparable to its interest in the “maintenance of domestic peace,” and that state law is therefore not preempted by the LMRA when such statements are made in the course of a union organizational campaign. 383 U.S. at 59-61, 86 S.Ct. 657. See Abrams v. Carrier Corp., supra, 434 F.2d at 1254. The Linn Court also distinguished previous preemption cases by pointing out that the LMRA is concerned only with the possible coercive effect of libelous statements in organizational campaigns, while a state libel action is the only means of vindicating the individual’s reputation regardless of the effect, if any, on the labor dispute. Id. 383 U.S. at 63, 86 S.Ct. 657. In the instant case, however, there is no claim of malicious libel and the private damage action under § 303 protects essentially the same interests as the plaintiffs’ proposed action under state law for tortious interference with contractual relations.

      . See §§ 6 and 20 of the Clayton Act, 15 U.S.C. § 17 and 29 U.S.C. § 52 (1970); §§ 4, 5 and 13 of the Norris-LaGuardia Act, 29 U.S.C. §§ 104-105, 113 (1970).


source: Caselaw Access Project

author: WILLIAM D. MURRAY, District Judge: CHAMBERS, Circuit Judge

license: Public Domain

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Nick Victor BERGERA, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. David Lynn MITCHELL, Defendant-Appellant.
    Nos. 72-2913 and 72-3049.
    United States Court of Appeals, Ninth Circuit.
    Jan. 21, 1975.
    Rehearing and Rehearing En Banc Denied June 25, 1975.
    Frank R. Ubhaus, Asst. Federal Public Defender (argued), San Francisco, Cal., for defendants-appellants.
    James Hazard, Asst. U. S. Atty. (argued), San Francisco, Cal., for plaintiffappellee.
    Before CHAMBERS and ELY, Circuit Judges, and MURRAY, District Judge.

       Honorable William D. Murray, Senior United States District Judge, District of Montana, sitting by designation.

   OPINION

WILLIAM D. MURRAY, District Judge:

On November 10, 1971, a Volkswagen bus, imported from Rotterdam, Holland, was unladen at Pier 9, San Francisco, California. The bus was given a routine Customs examination with the aid of a dog trained to detect marijuana. The dog indicated that marijuana was concealed behind the right and left rear quarter panels. The substance was analyzed and found to be marijuana.

The bus was kept under continuous surveillance by Customs officers from November 10 through November 18, 1971.

On November 12, 1971, at approximately 4:20 P.M. the bus was picked up by a Kymry Simonds at Pier 9. Kymry Simonds drove the bus to the middle of the 200 block of Miller Avenue, Mill Valley, California, where she parked the vehicle. On November 18, 1971, at approximately 3:35 A.M., a Volkswagen bus bearing California license 464 BPW parked behind the Volkswagen bus containing the marijuana. This bus had two occupants, later identified as Nick Bergera and David Lynn Mitchell, registered owner of the Volkswagen bus bearing California license 464 BPW.

At approximately 3:50 A.M. a tow truck arrived and towed the Volkswagen bus containing the marijuana to 34 Rice Street, Daly City, California, where it was placed in the garage.

The officers waited about 25 minutes after the bus had been placed in the garage and then approached the front of the residence. The defendants came out of the house and were arrested on the steps. Two agents entered the residence by force. Inside the residence, the agents found and arrested Cheryl Berg-era. Once in the house, the agents found three marijuana plants in a rear bedroom closet, a brown paper bag in a hallway closet containing approximately one kilo of marijuana and two 5" x 8" boxes in the kitchen that contained marijuana seeds, stems and residue. The Volkswagen bus containing the marijuana was found in the garage. The agents did not have a search warrant for the residence nor did they have anyone’s consent to search the house or garage. They had no arrest warrants.

Mitchell and Nick Bergera were indicted for the knowing possession with intent to distribute marijuana in hashish form. Appellants filed a motion to suppress evidence. Hearings on the motion were held before a United States Magistrate. The magistrate recommended that the motion to suppress be granted as to hashish found in the Volkswagen bus in the garage and as to marijuana found in the bedroom, closets and kitchen of the residence. On February 17,' 1972, the government filed a request for review of the magistrate’s decision by the district court judge and the case was certified to the district judge. The judge entered an order reversing the magistrate and denying the motion to suppress. Appellants were found guilty as charged on April 21, 1972.

On appeal, Bergera and Mitchell contend that (1) the trial court erred in setting aside the magistrate’s findings on the motion to suppress without taking additional evidence, and (2) the district court erred in failing to grant a mistrial when it became apparent that the government could not justify the seizure of small amounts of marijuana about which substantial testimony had been introduced.

Appellants’ first contention presents an important issue not previously considered by this court. In a recent decision, we held that a United States Magistrate may hold evidentiary hearings on a motion to suppress; however, the reports of the magistrate represent recommendations only, since the district court must make the final adjudication on the motion. Campbell v. United States District Court for the Northern District of California, 501 F.2d 196 (9th Cir. 1974). Campbell did not consider the question now before the court: whether the district court can enter an order inconsistent with the recommendations of the magistrate without itself hearing the evidence on the motion to suppress. We hold that it cannot and reverse the convictions.

Before making his recommendations to the district court on the motion to suppress, the magistrate has listened to each side present arguments, has seen the expressions and demeanor of witnesses, and has directed the course of the hearing. This experience places the magistrate in the best position to rationally determine the facts underlying the motion to suppress. The district court should not lightly disregard recommendations made from first-hand knowledge of relevant evidence. However, since the magistrate may only make recommendations, a question must inevitably arise with regard to what procedures must be adopted by the district court when it chooses to disregard the recommendations of the magistrate. Two alternatives immediately present themselves: (1) the district court can reject the recommendations of the magistrate and adjudicate the motion on the basis of records provided, or (2) the court can order that the motion to suppress be reheard and the evidence presented directly to it.

The crucial question to be considered when making a choice between these two alternatives is which of the two provides the strongest guarantee for the integrity and accuracy of the fact-finding process.

The ultimate result in many cases like the one presented here is determined by a ruling on a motion to suppress evidence. Since that ruling in turn is often dictated by a factual determination, the method used to ascertain facts must be as accurate as possible. Rules of law affecting the trustworthiness of the fact-finding process should be forged with these considerations well in mind. In Speiser v. Randall, 357 U.S. 513, 78 S.Ct. 1332, 2 L.Ed.2d 1460 (1958), the United States Supreme Court recognized the important role procedures for determining facts can have in the ultimate outcome of litigation:

“To experienced lawyers it is commonplace that the outcome of a lawsuit — and hence the vindication of legal rights — depends more often on how the factfinder appraises the facts than on a disputed construction of a statute or interpretation of a line of precedents. Thus the procedures by which the facts of the case are determined assume an importance fully as great as the validity of the substantive rule of law to be applied.” Speiser, supra at 520, 78 S.Ct. at 1339.

Requiring the district court to rehear the evidence if it decides not to follow the recommendations of the magistrate insures that any decision on the facts will be the result of first-hand observation of witnesses and evidence. The law has long recognized the value of these more immediate impressions, and gives them a measure of protection from easy modifications made on the basis of dry records. See 52(a) and 53(e)(2) of the Federal Rules of Civil Procedure and 8(d) of the Magistrate’s Rules. A rule of law permitting the district judge to assign evidentiary hearings to a magistrate, and then disregard the recommendation of the magistrate without hearing any testimony or seeing any evidence, would fly in the face of traditional legal respect for findings of fact made on the basis of full participation in the methods recognized as most effective for determining facts. When the vindication of important legal rights necessarily hangs in the balance, the law must require whatever is essential to preserve the integrity of the fact-finding process. The method most widely recognized as effective in that regard is imposition of the requirement that the fact-finder actually observe the evidentiary process so as to properly weigh and appraise testimony. This court has often recognized the value of observing witnesses in order to determine the truth. In United States v. Page, 302 F.2d 81 (9th Cir. 1962) we stated:

“ . . . [I]t is the trial judge who hears the witnesses and who must pass on the credibility. We sometimes tend to forget that the testimony of a witness, presented to us in a cold record, may make an impression upon us directly contrary to that which we would have received had we seen and heard that witness.” Page, supra at 84.

Similar concerns were before the Supreme Court when it decided Wingo v. Wedding, 418 U.S. 461, 94 S.Ct. 2842, 41 L.Ed.2d 879 (1974). Although it is clear that Wingo is not controlling here, the Supreme Court expressed some general standards applicable to the fact-finding process. After deciding that the district court was required to hold evidentiary hearings on applications for post-trial relief, the Court stated:

“The invalidity of Local Rule 16 is not cured by its provision that the ‘District Judge shall proceed to hear the recording of testimony given at the evidentiary hearing and give it de novo consideration.’ Holiday reasoned that the command of § 761, now § 2243, was designed by Congress in recognition that ‘one of the essential elements of the determination of the crucial facts is the weighing and appraising of the testimony.’ 313 U.S. at 352 [61 S.Ct. 1015.] ... In that circumstance, we ‘cannot say that any appraisal of the truth of the prisoner’s oral testimony’ based on listening to a recording of it, ‘is, in light of the purpose and object of the proceeding, the equivalent of the judge’s own exercise of the function of the trier of the facts.’ 313 U.S. at 352 [61 S.Ct. 1015].” Wingo, supra at 473, 94 S.Ct. at 2850.

In the case at bar, no statute compels the district court to conduct the evidentiary hearing on the motion to suppress. Hence, as was decided in Campbell, the district court can assign the hearing to a magistrate. Since the magistrate sees and hears the evidence, the district court is entitled to rely upon his recommendations when making its decision on the motion. If, however, the district court chooses to reject the recommendation of the magistrate, it must itself hear the testimony and see the evidence before deciding the motion. Permitting the district court to simply review dry records or listen to tape recordings of the evidentiary hearing conducted by the magistrate would not satisfy the high standard which must be set for factual determinations which by themselves can decide the outcome of a criminal trial. The defendant is entitled to the assurance that important factual conclusions will be drawn from the testimony and other evidence itself. That assurance is provided if the district court decides the motion in accordance with the recommendations of a judicial officer who observed the evidence. It is certainly provided if the district court sees and hears the evidence itself. But it is just as certainly absent if the district court is allowed to disregard the recommendation of the magistrate and decide the motion only on the basis of dry records and one dimensional tapes. Therefore we hold that the district court erred when it set aside the magistrate’s recommendation and ruled on the motion to suppress without hearing the evidence on the motion itself.

We need not reach appellants’ second contention.

Reversed and remanded for proceedings consistent with this opinion.

CHAMBERS, Circuit Judge

(dissenting):

I dissent. As I see it, the majority whittles down our Campbell v. United States District Court, 501 F.2d 196 (9 Cir., 1974). I cannot agree with the concept that a district judge can accept without hearing, as in Campbell, a magistrate’s ruling (recommendation), but he must hold a hearing de novo before he can reverse. In practice, fair as the judge may be, if he exercises a discretion to hold a hearing, it will usually mean that he has almost made up his mind to reverse the magistrate. That is not good.

For the most part, the evidence before the magistrate was undisputed. As to the small amount of disputed evidence, the magistrate made no findings. As I see it, the district judge really ruled on the motion as a matter of law.

Here, there was an added protection to defendants. All but one of the witnesses before the magistrate later testified at the trial. If the trial judge later at the trial came to the conclusion that certain witnesses before the magistrate were unreliable, he had continuing jurisdiction over the motion to suppress. Doubtless he would have reversed his earlier ruling if he had seen any reason during the trial to do so.

Maybe Campbell is wrong. Maybe if a party requests a full hearing de novo, the court will have to grant it, thus eliminating much of the value of magistrates. It is inescapable that the Supreme Court will have to fully cover the field of magistrates’ authority and the scope of review. But, meanwhile, I cannot go along with the basic idea that if a district judge wants to approve what the magistrate did, he may stamp it “approved,” but if he doubts the wisdom of the magistrate in the particular case, then we must have a hearing de novo.

      . In Wingo, the court struck down a local rule permitting full-time magistrates to hear evidence on petitions for writs of habeas corpus. The court found that the local rule was inconsistent with 28 U.S.C. § 2243, which provides for a determination of the facts in a habeas corpus case by “the court, justice, or judge.” Since 28 U.S.C. § 636 circumscribed the permissible scope of assignment to magistrates to “such additional duties as are not inconsistent with the Constitution and laws of the United States,” the local rule was not a valid promulgation pursuant to Section 636.

      . Holiday v. Johnston, 313 U.S. 342, 61 S.Ct. 1015, 85 L.Ed. 1392 (1941).

      . The Court’s memorandum of reversal, filed herein on April 18, 1974, is hereby withdrawn.


author: BREITENSTEIN, Circuit Judge.

text:
    KENT HOMES, INC., Plaintiff-Appellee, v. UNITED STATES of America, Defendant-Appellant.
    No. 74-1333.
    United States Court of Appeals, Tenth Circuit.
    Submitted Jan. 21, 1975.
    Decided March 12, 1975.

      Howard A. Spies of Schroeder, Heeney, Groff & Spies, Topeka, Kan., for plaintiff-appellee.
    F. Arnold Heller, Atty., Tax Div., Dept, of Justice (Scott P. Crampton, Asst. Atty. Gen., Gilbert E. Andrews and Elmer J. Kelsey, Attys., Tax Div., Dept, of Justice, and Robert J. Roth, U. S. Atty., of counsel, on the brief), for defendant-appellant.
    Before BREITENSTEIN, HOLLOWAY and DOYLE, Circuit Judges.
   BREITENSTEIN, Circuit Judge.

This is a suit for refund of federal income taxes. The question is whether receipts from a federal condemnation were taxable in 1962 or 1963. The government contends that because the taxpayer was on the accrual basis the receipts were taxable in 1962. The district court gave judgment for taxpayer and the government appeals. We affirm.

The taxpayer, plaintiff-appellee Kent Homes, Inc., participated in a Wherry Military Housing Act project at Fort Leavenworth, Kansas. To finance construction it gave notes and a mortgage which were held by New York Life Insurance Company under an assignment. A related corporation, Marshall Homes, Inc., controlled by the same stockholders as taxpayer, had an adjoining Wherry project financed through notes and mortgage assigned to American Irving Savings Bank.

The government brought proceedings to condemn the equities of taxpayer and Marshall, made a deposit of $137,000, and on January 1, 1958, obtained possession under a court order. In March, 1958, taxpayer withdrew its share of the deposit, $83,000. Before the withdrawal, negotiations involving New York Life, the Department of the Army, and the Federal Housing Administration resulted in a three-party agreement whereby Department agreed to assume and pay the mortgage. Taxpayer was not released from its liability under the notes and mortgage.

Taxpayer and Marshall asserted that the condemnation must be against the entire estates and not against the equities alone. In addition they claimed that the value fixed by the government was too low. The court appointed commissioners who made a total award of over $300,000 to both corporations and held that the equities could be condemned.

On December 18, 1961, the government deposited $ 230,400.50 for the joint benefit of taxpayer and Marshall. On the next day the United States Attorney presented a proposed court order authorizing withdrawal. The proposal required signatures for the two corporations and the two mortgagees. The signatures were not obtained until May, 1962. The withdrawal order was signed May 25 and taxpayer withdrew its share. On September 7 the district court held that the government had to condemn the entire estates. On September 26 New York Life released taxpayer from further liablility under the notes and mortgage.

Taxpayer and IRS disputed the tax consequences of the condemnation payments. In resulting litigation the tax court held that the gain from the first deposit was taxable in fiscal 1959. The court of appeals reversed because of the bar of the statute of limitations. Kent Homes, Inc. v. Commissioner of Internal Revenue, 10 Cir., 455 F.2d 316. Neither the tax court nor the court of appeals considered the taxability of the gain represented by the 1961 deposit.

In its 1963 return taxpayer reported the gain from the 1961 deposit. The Commissioner of Internal Revenue assessed additional taxes on the ground that the proceeds from the 1961 deposit were taxable in the fiscal year ending January 31, 1962. Taxpayer paid the assessment of $21,226.67 and brought this suit to recover. The district court held for the taxpayer that the taxable event occurred in fiscal 1963.

Taxpayer is on an accrual basis with a fiscal year ending January 31. If the second deposit on December 18, 1961, is the taxable event the taxable income was received in fiscal 1962. If that event did not occur until the May 1962 order and withdrawal the taxable event was in fiscal 1963. Because taxpayer had credit for operating losses, no tax was attributable to the gain as reported for fiscal 1963.

Section 446(c)(2), 26 U.S.C., permits the accrual method of accounting. IRS regulations provide, 26 CFR § 1.446— l(c)(ii), that:

“Generally, under an accrual method, income is to be included for the taxable year when all the events have occurred which fix the right to receive such income and the amount thereof can be determined with reasonable accuracy.”

Right to receive, rather than actual receipt, determines inclusion in gross income. Spring City Foundry Co. v. Commissioner of Internal Revenue, 292 U.S. 182, 184, 54 S.Ct. 644, 78 L.Ed. 1200. In United States v. Harmon, 10 Cir., 205 F.2d 919, 920, we said that: “When the right to receive income becomes fixed and absolute, the duty of one on the accrual basis to report it arises.”

The government argues that taxpayer had the right to the money when it was deposited with the court in December, 1961, and this event is determinative even though taxpayer did not have the use of the money until the following May. The contention requires further examination of the record.

Before the condemnation proceedings the Department of Justice wrote the United States Attorney at Topeka, Kansas, that no distribution of deposited funds should be made until the rights of the mortgagees were made clear. The letter pointed out the limited assets of taxpayer and Marshall. After the December, 1961, deposit the United States presented a proposed order for withdrawal. The proposal required the signatures for the two corporations and the two mortgagees. Taxpayer made efforts to obtain the signatures and its counsel went to New York in an effort to persuade American Irving to sign. The required signatures were not obtained until May, 1962.

Under the regulation and our Harmon decision, 205 F.2d at 920, the taxable event occurs when the right to receive income becomes fixed and absolute. When the government made the deposit the right was inchoate because of the intransigent position of the government requiring approval of the withdrawal by the two corporations and the two mortgagees. The deposit was the beginning step. The second step, power to withdraw, did not occur until the government imposed conditions were satisfied. The right was not fixed until the completion of the second step.

We see no significance in the fact that the reluctant signer, American Irving, held its mortgage on properties taken from Marshall. The government made a joint deposit and did not change its proposed withdrawal order to eliminate the need for approval by American Irving.

The trial court found that taxpayer “made every reasonable effort to try to get the deposit released to it, because no interest was accruing on this considerable sum while it was on deposit with the Court.” The court also said that until all parties approved the proposed withdrawal order “this Court would not have signed and entered it.”

In effect the government says that the conditions which it imposed were of no importance and did not determine the occurrence of the taxable event. We are not impressed by the shift in position. For reasons which it thought sufficient the government conditioned the right to the money. It would now ignore those conditions. We are convinced that the right did not become fixed until the conditions were satisfied. Accordingly, the income was received in fiscal 1963.

Affirmed.


text:
    William J. HEAD, Plaintiff-Appellant, v. BROTHERHOOD OF RAILWAY, AIRLINE AND STEAMSHIP CLERKS, FREIGHT HANDLERS, EXPRESS AND STATION EMPLOYEES (BRAC), et al., Defendants-Appellees.
    No. 532, Docket 74-2087.
    United States Court of Appeals, Second Circuit.
    Argued Jan. 23, 1975.
    Decided March 7, 1975.
    David J. Fleming, New York City (William J. Donlon, Rosemont, 111., Reilly, Fleming & Reilly, New York City, on the brief, Paul G. Reilly, Jr., New York City, of counsel), for defendant-appellees.
    John T. Collins, Buffalo, N. Y. (Collins, Collins & Dinardo, Buffalo, N. Y., on the brief), for plaintiff-appellant.
    Before LUMBARD, HAYS and MULLIGAN, Circuit Judges.
   HAYS, Circuit Judge:

This is an appeal from a judgment of the United States District Court for the Western District of New York dismissing an action brought against a union and its officers under § 501 of the Labor-Management Reporting and Disclosure Act, 29 U.S.C. § 501 (1970). The district court held that the plaintiff failed to state a cause of action upon which relief could be granted.

We affirm.

i.

The appellant is an Express Division General Chairman of the Brotherhood of Railway, Airline and Steamship Clerks [“BRAC”]. The Express Division represents those BRAC members who are employed by REA Express, formerly the Railway Express Agency. For various reasons membership in the Express Division has declined in recent years from a peak of between 40,000 and 50,000 to a 1974 total of 23,000, of which only 13,000 were active employees of REA.

Despite the drop in membership, the Express Division continued, until recently, to operate through 120 Local lodges, many of which faced increasing difficulties in carrying out their functions. In response to this problem, the 1971 Quadrennial Convention of BRAC adopted Resolution No. 201. The resolution established a Committee on Structure and authorized it to investigate the possibilities of improving the union’s structure and to recommend structural changes to the Executive Council. The Council was authorized to institute changes on a temporary, experimental basis, if the “involved units” accepted them. All such changes would be subject to approval by the 1975 Convention.

At a meeting in May, 1974, the National Association of Express General Chairmen, of which appellant was a member, adopted a restructuring proposal for the Express Division and submitted it to the Structure Committee. The proposal called for the elimination of the local lodges and the institution of a unified, nationwide Express Division system. Area representatives would replace the local lodges, which would be required to forward their funds to the Express Division offices. The plan was subsequently approved by the Structure Committee and the Executive Council and has gone into effect. Since the new structure must still be approved by the 1975 Convention before it becomes permanent, the secretary-treasurer of the newly formed Express Division is keeping the funds from the local lodges separate from the general treasury, so that anything remaining can be returned to them, in proportion to what they contributed, should the Convention disapprove of the new system.

II.

In his complaint, appellant alleged that the adoption and implementation of the restructuring plan violated the union’s constitution, as well as the terms of Resolution No. 201. He argued before the district court and again here that any plan abolishing the local lodges must be approved not by the Express Division General Chairmen but rather by the lodges themselves or by the entire 1975 Convention and that absent such approval, the restructuring, even on a temporary basis, should be enjoined. The district court held that under the decisions of this Circuit, appellant had failed to state a claim under 29 U.S.C. § 501. We agree.

Section 501(a) provides that it is the duty of the officers and agents of a labor organization

“to hold its money and property solely for the benefit of the organization and its members and to manage, invest, and expend the same in accordance with its constitution and bylaws and any resolutions of the governing bodies adopted thereunder . . ..”29 U.S.C. § 501(a) (1970).

In Gurton v. Arons, 339 F.2d 371, 375 (2d Cir. 1964), and again in Coleman v. Brotherhood of Railway and Steamship Clerks, Freight Handlers, Express and Station Employees, 340 F.2d 206, 209 (2d Cir. 1965), we held that § 501

“applies to fiduciary responsibility with respect to the money and property of the union and that it is not a catch-all provision under which union officials can be sued on any ground of misconduct with which the plaintiffs choose to charge them.”

In the instant case, Head is charging BRAC officials with improperly tampering with the union’s structure. Although he envisions the possibility that union funds will be mishandled in the future as a result, he does not allege any present wrongdoing of that type. We therefore hold that Head’s complaint does not state a cause of action under § 501.

In an attempt to satisfy the language of § 501 and to distinguish Gurton and Coleman, appellant stresses the fact that under the restructuring plan, the funds of the local lodges were transferred to the central Express Division treasury and certain BRAC officials received increases in salary. However, it is clear that the gravamen of appellant’s complaint is the decision to restructure BRAC so as to eliminate the local lodges. The fact that funds were transferred from the now defunct lodges to the Express Division is of secondary importance. Any restructuring which entails a significant shift in responsibility from one unit to another inevitably leads to a shift in funds. Furthermore, in Coleman the allegedly improper creation of the office of “Chief Executive,” with a salary of $60,000 a year, undoubtedly had an effect on union funds similar to some of the effects claimed here. We nevertheless held in Coleman that the complaint was insufficient because it centered on improper voting procedures and not on the present mishandling of union funds. We likewise hold in this case that the complaint is aimed at the procedures through which the Express Division was restructured and not at misconduct by union officials in connection with union money.

III.

Finally, appellant cites a number of cases from other circuits in support of the proposition that § 501 is applicable to the facts alleged in his complaint. See Pignotti v. Local # 3 Sheet Metal Workers’ Int. Ass’n, 477 F.2d 825 (8th Cir.), cert. denied, 414 U.S. 1067, 94 S.Ct. 576, 38 L.Ed.2d 472 (1973); Sabolsky v. Budzanoski, 457 F.2d 1245 (3d Cir.), cert. denied, 409 U.S. 853, 93 S.Ct. 65, 34 L.Ed.2d 96 (1972); Johnson v. Nelson, 325 F.2d 646 (8th Cir. 1963). Insofar as these cases differ with Gurton and Coleman on the scope of § 501, we decline to follow them. However, even these cases are not necessarily supportive of appellant’s position. For example, in Johnson v. Nelson, supra, the plaintiffs claimed that the union president and treasurer violated their fiduciary duties by refusing, for personal reasons, to sign checks for payments which had been duly approved by the membership. See 325 F.2d at 653. Similarly, in Sabolsky v. Budzanoski, supra, 457 F.2d at 1248, the complaint alleged that union officers had expended funds to maintain 37 “rotten borough” locals; and in Pignotti, supra, 477 F.2d at 827-30, the complaint charged union officials with wrongfully authorizing deductions from members’ paychecks, with the amounts deducted to be paid into a union pension fund. In all these instances, the actual misuse of union funds for personal or political reasons was an essential element of the case.

IV.

We conclude that the conduct attacked in this case is not within the intended scope of § 501. The defendants have been charged not with misappropriating or misusing union funds but rather with restructuring the union. It is not for the courts to mediate such disputes. See Gurton v. Arons, supra, 339 F.2d at 375.

Affirmed.

      . Although the district court did not reach the issue, it is clear that § 501 does not provide for an action against a labor organization but only for such an action against an “officer, agent, shop steward, or representative” of a labor organization. 29 U.S.C. § 501(b) (1970).
      The individual defendants claim that in addition to the ground relied upon by the district court, they are entitled to dismissal because the plaintiff did not comply with the procedural requirements of § 501(b) that he request the union to bring the action and that he obtain leave of court before bringing suit. We have held that those requirements must be given “full effect.” Coleman v. Brotherhood of Railway and Steamship Clerks, Freight Handlers, Express and Station Employees, 340 F.2d 206, 208 (2d Cir. 1965). See Cassidy v. Horan, 405 F.2d 230, 232 (2d Cir. 1968). In view of our disposition of this case, we need not reach the question of the effect of plaintiff’s noncompliance with § 501(b).

      . Resolution No. 201 provides, in part:
      WHEREAS, a Committee on Structure be authorized by the 1971 Convention and be charged with the responsibility of recommending specific changes in structure to the 1975 Convention, and
      WHEREAS, Such task cannot be effectively undertaken unless the Committee on Structure is specifically authorized as to the scope of its functions, operations and financial resources, and
      WHEREAS, In order for the Committee on Structure to effectively carry out its duties, it is imperative that experimentation be allowed to test the desirability of proposed improvements in the Brotherhood structure.
      THEREFORE, Be It Resolved, That the 1971 Convention authorize the Committee on Structure as follows:
      1. Functions. The Committee shall be invested with the specific responsibility to investigate the forms and types of union structure in existence today; to solicit and receive suggestions for improvement of our present structure from our membership and officers on a local, system, and national level, and to report to the next regular BRAC Convention with specific recommendations, based on its studies, for improvements of the basic structure of the BRAC.
      2. Operations. The Committee shall hold meetings, hearings, special investigations and any other related activities as may be deemed appropriate by the Chairman or by a majority of the members of the Committee.
      3. Finances. The Grand Lodge will absorb the travel, per diem, and other appropriate expenses as may be incurred by the Committee in the pursuit of its assigned duties and responsibilities.
      Therefore, Be It Further Resolved, That such Committee on Structure be authorized by Convention Action to recommend to the Executive Council, on a temporary experimental basis, structural changes in subordinate units of the BRAC, which can only be effective if the involved units accept these changes. Subordinate units shall also have the right to propose structural changes which, if approved by the Committee and the Executive Council, may be implemented on an experimental basis; and
      THEREFORE, Be It Further Resolved, That any successful experiment cannot be automatically accepted as a permanent change in the structure unless it is within the framework of the Constitution and approved by the next regular Convention

      . The legislative history cited in Pignotti, supra, 477 F.2d at 832-35, does not convince us that § 501 was intended by Congress to cover union abuses having nothing to do with money or property. While it is true that § 501 as enacted is somewhat more explicit in its detail than the corresponding provision originally passed by the Senate, see Section 610 of S. 1555, 86th Cong., 1st Sess. 61-62 (1959), the final bill nevertheless defines the fiduciary duties of union officers solely in terms of their treatment of the “money and property” of the union and their financial dealings visá-vis the union.


author: MANSFIELD, Circuit Judge:

text:
    Harry HENRY and Robert E. Braye, Jr., Plaintiffs-Appellees, v. A/S OCEAN and John P. Pederson & Sons, Defendants and Third-Party Plaintiffs-Appellees & Appellants, v. PITTSTON STEVEDORING CORPORATION, Third-Party Defendant-Appellant.
    Nos. 5, 460, Dockets 73-2153, 73-2868.
    United States Court of Appeals, Second Circuit.
    Argued Nov. 1, 1974.
    Decided Jan. 6, 1975.

      Albert V. Testa, New York City (Sidney A. Schwartz, Alexander, Ash, Schwartz & Cohen, New York City, of counsel), for third-party defendant-appellant.
    Morris Cizner, New York City (Zimmerman & Zimmerman, New York City, of counsel), for plaintiffs-appellees.
    William P. Kain, Jr., New York City (Stephen R. Remsberg, Haight, Gardner, Poor & Havens, New York City, of counsel), for defendants and third-party plaintiffs-appellees and appellants.
    Before LUMBARD, MOORE and MANSFIELD, Circuit Judges.
   MANSFIELD, Circuit Judge:

Henry and Braye, two longshoremen, sued the shipowner A/S Ocean and its managers John P. Pederson & Sons for damages for injuries sustained as the result of an accident which occurred while they were working aboard defendant’s vessel M/S Dagrun. The shipowner impleaded plaintiffs’ employer, the Pittston Stevedoring Company (“Pittston”). Following a trial in the Southern District of New York before Judge Robert L. Carter, the jury returned a verdict finding the M/S Dagrun seaworthy, the shipowner negligent, and that Pittston had breached its warranty of workmanlike performance, thus obligating it to indemnify the shipowner for damages awarded to the plaintiffs. The jury assessed damages of $57,500 in favor of Henry and $10,000 in favor of Braye.

On this appeal Pittston challenges the jury’s verdict in favor of Henry as inconsistent with its finding that the vessel was seaworthy and as unsupported by the evidence. It attacks Braye’s verdict as unsupported by competent proof of causation. Pittston further contends that the jury’s finding of seaworthiness is inconsistent with its award of indemnity to the shipowner for Pittston’s breach of its warranty of workmanlike performance, and that the shipowner’s conduct precludes it from obtaining indemnity from Pittston. We affirm the award of damages to Henry and the indemnity award to the shipowner. We agree that liability to Braye was established but find the award of $10,000 excessive and remand for a new trial on damages unless Braye consents to a reduction of the award by $5,000.

On the morning of February 26, 1966, longshoremen employed by Pittston began unloading a cargo of Volkswagen automobiles from the hold of the M/S Dagrun, which was moored at Port Newark. These cars, which were lashed together by ropes and sticks, were stowed in the hold by means of “false decks” consisting of large pontoons. The longshoremen, using the ship’s booms, removed the automobiles forming each layer by hoisting them through the hatch and onto the pier. As a layer was removed the lashing debris that remained was placed in a netting, hoisted out of the hold, and dumped at a designated spot on the deck. The pontoons making up the false deck were then removed and placed in special racks on the ship’s deck. Thereupon the longshoremen began removal of the next layer of cars.

There was evidence that the ship’s mate had directed that the lashing debris be dumped on the deck at a point forward of the pontoon rack between hatches # 1 and # 2. Because the pontoon rack was equipped with cross-pieces at each end, the netting containing the lashings could not be lowered by the boom directly to the spot on the deck where it was to be dumped. Instead, the longshoremen landed the netting atop the pontoons in the rack. They were then required to push it several feet to the forward end. The height of the pontoon rack on top of which the longshoremen worked was 11 feet. On the outboard side there was a direct drop to the water of some 60 feet. At no time was there a safety line or netting around the pontoons stacked in the rack.

Prior to the accident pontoons from two false decks had been removed and stacked, and the third draft of lashings was about to be removed, lowered to the pontoons and dumped onto the deck. The rack then contained about 6 to 10 feet of stacked pontoons. In order to dump the lashings off the forward end of the pontoons and onto the deck, it was necessary to change the position of the boom from that used to unload the automobiles. Otherwise, as the netting was being dumped, the cargo lift lines would tend to pull the netting back toward the middle of the pontoons, spilling the lashings onto the pontoons. To dump the lashings onto the deck, the longshoremen would have to stand atop the pontoons and push the net forward against the pulling force of the lines.

There was evidence that the winch used to hoist and dump the net of lashings, which was operated by a longshoreman and controlled the cargo lines, had been malfunctioning. In addition the ship’s mate had instructed the longshoremen not themselves to reposition the booms but rather to allow the crew to perform the task. When the crew failed after some 15 minutes to respond to a call to reposition the boom preparatory to removal of the third draft, plaintiffs’ evidence indicates that the stevedore foreman, one “Bosco,” gave an order to proceed without repositioning the boom. To correct the resulting tendency of the lashings draft to be pulled back across the top of the pontoons, plaintiff Henry and a co-worker pushed forward on the lashings draft during the dumping process.

At this point Henry’s accident occurred. While Henry pushed forward on the draft, the winch jerked the cargo lines backward. The cargo hook caught in the cross-piece of the pontoon rack. This caused the line suddenly to go taut, striking Henry in the left shoulder and knocking him overboard.

Plaintiff Braye, on learning of Henry’s plight, ran onto the deck, removed his clothes, and jumped into the water to rescue Henry. It then took the ship’s mate 15 minutes to locate and toss a lifebuoy into the water. Eventually a pontoon was lowered to remove Henry and Braye from the water. Thus Braye was obliged to remain in the cold and polluted water for about 20 minutes. He testified that following his immersion he suffered colds and a skin rash over a three-year period following the accident and ultimately was forced to move to California.

DISCUSSION

I. Inconsistency of the Jury’s Verdict

Pittston argues that the jury’s finding that the ship was not unseaworthy eliminates any basis for its finding of negligence on the part of the shipowner, since the claim of negligence was based on alleged unseaworthy conditions, i. e., defectiveness of the winch, improper spotting of the boom and failure to provide a safe place to work on top of the pontoons. We disagree. Some of the conditions, it is true, might be common to both claims. Unseaworthiness, for instance, has been broadly defined in some cases to encompass employment of a dangerous method of operating equipment that would otherwise be seaworthy, Crumady v. The J.H. Fisser, 358 U.S. 423, 79 S.Ct. 445, 3 L.Ed.2d 413 (1959); Blassingill v. Waterman Steamship Corp., 336 F.2d 367 (9th Cir. 1964); Sanchez v. Lubeck Linie A.G., 318 F.Supp. 821 (S.D.N.Y.1970), or failure to provide appropriate safety equipment, Salem v. United States Lines, 370 U.S. 31, 82 S.Ct. 1119, 8 L.Ed.2d 313 (1962); White v. Rimrock Tidelands, Inc., 414 F.2d 1336 (5th Cir. 1969).

If the trial judge had used such a general definition of unseaworthiness in the present case, Pittston might conceivably have some support for its position. Judge Carter, however, limited the jury to a narrow definition of the term, instructing that the jury could find unseaworthiness only if it found that plaintiffs’ injuries were caused by defective equipment, i. e., equipment that was not reasonably fit for its intended purpose. In view of the court’s limitation of unseaworthiness to the condition of the ship’s equipment the jury may reasonably have concluded that other claims (e. g., failure to reposition the booms properly) could only be resolved on a negligence theory. The jury’s findings on unseaworthiness and negligence were therefore not necessarily inconsistent. The situation here is thus distinguishable from that in Spano v. N.V. Koniklijke Rotterdamsche Lloyd, 2 Cir., 472 F.2d 33, 35 n.l, where the court stated that “[i]t is hard to imagine . . . how an owner could be negligent, if the ship was not unseaworthy.” See also Rice v. Atlantic Gulf & Pacific Co., 484 F.2d 1318, 1320 (2d Cir. 1973).

Even if the court had defined unseaworthiness in broader terms, we would hesitate in these circumstances to overturn the jury’s findings of seaworthiness and negligence on grounds of inconsistency. Verdicts finding negligence but no unseaworthiness have been accepted despite an apparent conflict in the findings. See, e. g., Weyerhaeuser Steamship Co. v. Nacirema Operating Co., 355 U.S. 563, 78 S.Ct. 438, 2 L.Ed.2d 491 (1958); Drago v. A/S Inger, 305 F.2d 139 (2d Cir.), cert. denied sub nom., Daniels & Kennedy, Inc. v. A/S Inger, 371 U.S. 925, 83 S.Ct. 292, 9 L.Ed.2d 232 (1962) . In Malm v. United States Lines, 269 F.Supp. 731 (S.D.N.Y.), affd. on the district court’s opinion, 378 F.2d 941 (2d Cir. 1967), for instance, Judge Weinfeld, observing that the law “at times recognizes the jury’s right to an idiosyncratic position,” upheld just such a verdict. The general rule that a court should reconcile the jury’s verdict if at all possible, Gallick v. Baltimore & Ohio R.R., 372 U.S. 108, 83 S.Ct. 659, 9 L.Ed.2d 618 (1963) , is entitled to broad application. No straining is required in this case, however, to reconcile what might at first blush appear to be an inconsistency.

II. Recovery of Indemnity when Shipowner is Negligent

Pittston next contends that the jury’s determination that the shipowner was negligent, although its ship was seaworthy, should preclude the shipowner from obtaining indemnity from Pittston based upon breach of its warranty of workmanlike performance. This warranty, which arises from the stevedore’s contract to render services to the shipowner, requires the stevedore to perform its tasks in a competent and safe manner. Ryan Stevedoring Co. v. Pan-Atlantic Steamship Corp., 350 U.S. 124, 133-134, 76 S.Ct. 232, 100 L.Ed. 133 (1956). Pittston argues that a finding of unseaworthiness should be a condition precedent to a shipowner’s recovery over against the stevedore for breach of its warranty of workmanlike service and that the shipowner’s liability for negligence in causing the accident should preclude its recovery over against the stevedore upon the warranty. We disagree.

The stevedore’s liability for breach of warranty does not rest upon the nature of the shipowner’s liability (i. e., whether it is based upon unseaworthiness rather than upon negligence) but upon the stevedore’s own contractual obligation to the shipowner. Ryan Stevedoring Co. v. Pan-Atlantic Corp., 350 U.S. 124, 131-132, 76 S.Ct. 232, 238, 100 L.Ed. 133 (1956) (“the contractor, as the warrantor of its own services, cannot use , the shipowner’s failure to discover and correct the contractor’s own breach of warranty as a defense”). The breach of this contractual obligation is readily apparent where the stevedore’s failure to provide workmanlike service brings into play the defect upon which the unseaworthiness claim is founded, see Crumady v. The J.H. Fisser, 358 U.S. 423, 79 S.Ct. 445, 3 L.Ed.2d 413 (1959). In such a case, moreover, the doctrine of indemnity serves to allocate risks among those segments of the enterprise best able to minimize the particular risk involved. Italia Societa per Azioni di Navigazione v. Oregon Stevedoring Co., 376 U.S. 315, 323, 84 S.Ct. 748, 11 L.Ed.2d 732 (1964); Seas Shipping Co. v. Sieracki, 328 U.S. 85, 94, 66 S.Ct. 872, 90 L.Ed. 1099 (1946); DeGioia v. United States Lines, 304 F.2d 421, 426 (2d Cir. 1962). The stevedore’s warranty requires it to perform its services properly in the face of known defects, and therefore the stevedore has been required to correct those defects or stop work until they are corrected. Mortensen v. A/S Glittre, 348 F.2d 383 (2d Cir. 1965); Brock v. Coral Drilling, Inc., 477 F.2d 211, 216 (5th Cir. 1973). Since the stevedore is in immediate control of the area of the ship in which he performs his functions, risks are minimized by requiring the stevedore to indemnify the shipowner whenever a substandard performance renders the shipowner liable. See Bertino v. Polish Ocean Line, 402 F.2d 863, 866 (2d Cir. 1968); DeGioia v. United States Lines, supra, 304 F.2d at 425. Where the shipowner’s liability for violation of his non-delegable duties, whether cognizable under a theory of unseaworthiness or of negligence, is attributable to the stevedore’s action or inaction in breach of his contractual obligation, the recovery of indemnity should not turn on the particular theory selected by the plaintiff as the basis of his suit against the shipowner.

Tort principles have no application to an indemnity claim, even though the stevedore’s breach depends on whether he “rendered a substandard performance.” Ryan Stevedoring Co., supra, 350 U.S. at 134, 76 S.Ct. 232, 100 L.Ed. 133. The tort law concept that there shall be no contribution among joint tortfeasors therefore becomes irrelevant, and, as Weyerhaeuser implied, indemnity may be awarded even though both stevedore and shipowner are in some sense “at fault.”

For these reasons the shipowner’s negligence does not necessarily preclude it from recovering indemnity against the stevedore. See Weyerhaeuser Steamship Co., supra; Drago v. A/S Inger, supra; Williams v. Pennsylvania Railroad Company, 313 F.2d 203, 209-212 (2d Cir. 1963); Nicroli v. Den Norske Afrika-O.G. Australielinie, etc., 332 F.2d 651, 656 (2d Cir. 1964); McNamara v. Weichsel Dampfschifffahrts A.G. Kiel, 293 F.2d 900, 903 (2d Cir. 1961); Albanese v. N.V. Nederl. Amerik. Stoom.-Maats, 346 F.2d 481, 484 (2d Cir.), revd. on other grounds, 382 U.S. 283, 86 S.Ct. 429, 15 L.Ed.2d 327 (1965) (per curiam). As the Supreme Court stated in Italia Soc. v. Ore. Stevedoring Co., 376 U.S. at 321, 84 S.Ct. at 752 (1964):

“[Rjecovery in indemnity for breach of the stevedore’s warranty is based upon an agreement between the shipowner and stevedore and is not necessarily affected or defeated by the shipowner’s negligence, whether active or passive, primary or secondary. Weyerhaeuser S.S. Co. v. Nacirema Operating Co., supra.”

The shipowner’s own conduct will preclude it from obtaining' indemnity from the stevedore only where it prevented or seriously handicapped the stevedore in his effort to perform his duties. “Merely concurrent fault is not enough,” Albanese v. N.Y. Nederl. Amerik. Stoom.-Maats, 346 F.2d at 484, citing Misurella v. Isthmian Lines, 328 F.2d 40 (2d Cir. 1964), and Weyerhaeuser S.S. Co., supra.

Applying these principles to the present case, there was ample evidence to support the conclusion that Pittston’s conduct was responsible for the plaintiff’s accident and that Pittston was not prevented by the shipowner from rendering safe and workmanlike service that would have avoided the accident, even though the shipowner was negligent. Although the shipowner may have failed to respot the boom, it was the stevedore’s foreman who, instead of waiting for the shipowner to do so, gave the order to remove the lashings draft while the boom remained in the incorrect position. Similarly, while the shipowner may have permitted the use of a dangerous method of unloading the lashings, Pittston took no action to stop its employees from working atop the pontoons or to supply a safety line. Since the stevedore was in a position to avert the injuries, the jury was entitled to find that Pittston’s actions did not constitute reasonable performance of its warranty.

III. Other Errors in the Indemnity Verdict

Pittston contends that, as a matter of law, the shipowner engaged in conduct sufficient to preclude recovery of indemnity, Weyerhaeuser, supra. However, this argument must be rejected for the reason that it is based solely on the view that the ship’s mate gave an order to the longshoremen to continue using the defective winch, whereas the verdict indicates that the jury rejected plaintiffs’ claims founded on the winch and relied instead on his alternate theories.

Pittston finally contends that it was entitled to a special interrogatory on the question of whether the shipowner’s conduct precluded recovery of indemnity, since other interrogatories, including one on the indemnity question, were submitted to the jury. Under certain circumstances it is error to submit a special verdict on some but not all issues, Palmiero v. Spada Distrib. Co., 217 F.2d 561 (9th Cir. 1954); United States v. Trinity Univ. Ins. Co., 457 F.2d 950 (5th Cir. 1972). If, for example, an interrogatory is submitted on one of two alternative claims that are neither inconsistent nor mutually exclusive, an interrogatory should also be submitted with respect to the other. The question of “conduct sufficient to preclude” indemnity, however, can hardly be considered an issue distinct from that of indemnity. Furthermore, where a jury must make a finding on a certain issue in order to reach its verdict, failure to submit a special interrogatory on that issue is not reversible error. Bolan v. Lehigh Valley R.R., 167 F.2d 934, 937 (2d Cir. 1948). Judge Carter properly instructed the jury that indemnity should be denied if conduct on the shipowner’s part obstructed or hindered the stevedore in his effort to perform a workmanlike job. We assume the jury took this instruction into account in answering the indemnity interrogatories. The jury, therefore, had to find no obstruction or hindrance by the shipowner before awarding it indemnity against Pittston.

IV. Damages Awarded Braye

Pittston argues that there was insufficient evidence to establish Braye’s damage claim. The shipowner generally agrees with this position, but urges that we merely exercise our power to grant a remittitur, Dagnello v. Long Island R.R., 289 F.2d 797 (2d Cir. 1961).

Braye, of course,' was obligated to offer some reasonable proof that his injuries were proximately caused by the shipowner’s breach of duty. Fitzgerald v. A. L. Burbank & Co., 451 F.2d 670, 681 (2d Cir. 1971). Direct medical testimony of causation need not be introduced in every case, Sentilles v. Inter-Caribbean Shipping Corp., 361 U.S. 107, 109-110, 80 S.Ct. 173, 4 L.Ed.2d 142 (1959). But a jury “is not permitted to speculate on proximate cause in the absence of reasonably persuasive proof that the negligence was the probable cause of the injury,” Fitzgerald', supra, at 681 of 451 F.2d.

In this case Braye testified that he suffered continuous colds and a skin rash after the accident, and introduced a hospital report suggesting the existence of a rash. But he offered no proof whatever to link the colds and the rash to the accident. Defendants, on the other hand, produced expert medical testimony that plaintiff’s skin rash could not have been caused by exposure to the water of Jersey Bay. The defendants’ expert testified that the rash appeared only in two isolated places on Braye’s cheeks, while a rash caused by contact with polluted water would have been visible over plaintiff’s entire body. While admitting that the exposure might have caused a serious cold, he stated that there was absolutely no connection between the exposure and the subsequent colds plaintiff claims to have suffered.

Braye thus failed to offer any evidence that his subsequent colds or skin rash were caused by the accident, and a jury could not reasonably have so found. Judge Carter excluded testimony by Braye concerning the cause of his conditions, and this was proper since lay testimony to the medical fact beyond the witness’s knowledge would be entitled to no weight. See Franklin v. Shelton, 250 F.2d 92, 97 (10th Cir. 1957), cert. denied, 355 U.S. 959, 78 S.Ct. 544, 2 L.Ed.2d 533 (1958); Sheptur v. Procter & Gamble Dist. Co., 261 F.2d 221, 223 (6th Cir. 1958), cert. denied, 359 U.S. 1003, 79 S.Ct. 1136, 3 L.Ed.2d 1031 (1959). The jury was thus left with no competent proof of causation.

Braye was entitled to some damages since the jury did have evidence that he suffered some pain from his 20-minute exposure to the cold water, that he lost his clothing, and that he suffered a bad cold. But an award of $10,000 for these limited injuries is grossly excessive. We therefore order a new trial on Braye’s damage claim unless he consents to a reduction of his award by $5,000.

Affirmed in part and reversed in part.

      . On the issue of unseaworthiness Judge Carter instructed the jury:
      “An injury is proximately caused by unseaworthiness of a vessel when it appears from the evidence in a case that the allegedly defective equipment played a substantial part in bringing about or actually causing the injury or damage. The shipowner is required to provide equipment which is only reasonably fit.” (Emphasis added).

      . “The shipowner’s action is not changed from one for a breach of contract to one for a tort simply because recovery may turn upon the standard of the performance of petitioner’s stevedoring service.” 350 U.S. at 134, 76 S.Ct. at 237.

      . Schwartz v. Compagnie General Transatlantique, 405 F.2d 270 (2d Cir. 1968), upon which Pittston relies, is clearly distinguishable. That case dealt solely with the question of whether the relationship between the shipowner and the proposed indemnitor, the United States Government, permitted the implication of a warranty of workmanlike service. The case held that it could not.

      . A stevedore is required to supply a safety line or net when the edge of a hatch section or stowed cargo is more than eight feet high and presents a danger of persons falling. U. S. Dept. of Labor, Safety and Health Regulations for Longshoring § 9.32(b).

      . Plaintiff argues that we are powerless to consider a remittitur since Pittston failed expressly to move before the district court to set aside the verdict for excessiveness, which would have permitted that court to exercise its discretion in the matter. See Vaught v. Childs Co., 277 F.2d 516 (2d Cir. 1960); 6A Moore’s Federal Practice fl 59.14. However, Pittston’s post-trial motion to set aside the verdict and for a new trial may be interpreted as seeking a remittitur since it rested on the argument that while Braye may have suffered a cold and hospitalization, he had failed to establish that his skin rash and later colds were in any way attributable to the accident. In a post-trial affidavit filed with the district court, shipowner so construed Pittston’s motion. Shipowner urged that the jury’s award should be “very substantially reduced” or a new trial granted on the issue of damages. Since the alternative of remittitur thus was presented to the district court, we may in these circumstances direct that such relief be granted.