In a 23 page opinion released July 21, 2015 in the Trump Entertainment Resorts case (Bank. D. Del. 14-12103), Judge Kevin Gross of the Delaware Bankruptcy Court opined upon the interaction of the Bankruptcy Code’s automatic stay and the Norris-LaGuardia Act (“NLA”). Judge Gross’ opinion is available here (the “Opinion”).
We have previously posted about the Trump Bankruptcy and the conflict between the Debtors and UNITE HERE Local 54 (the “Union”) concerning the collective bargaining agreement (“CBA”):
As discussed in the prior post, the Debtors were allowed to reject the CBA pursuant to Section 1113 of the Bankruptcy Code. Around the same time as the Debtors were pursuing a rejection of the CBA, the Union began calling organizations and individuals who had scheduled events at the Taj Majal to inform them of the dispute the Union and Debtors had over the CBA. Opinion *2-3. The Debtors then filed the “Stay Motion” which is decided by the Opinion. In the Stay Motion, the Debtors argue that the Union’s communication with Taj Mahal customers violated the automatic stay. The Union objected to the Stay Motion, arguing that its communications were protected by the NLA. Opinion at *5.
Judge Gross analyzed the NLA in detail, devoting pages 7-15 of the Opinion to the NLA and related case law. The comments made during the House debate on the NLA proved quite informative: “Gentlemen, there is one reason why this legislation is before Congress, and that one reason is disobedience of the law on the part of whom? On the part of organized labor? No. Disobedience of the law on the part of a few Federal judges.” Opinion *8, quoting 75 Cong. Rec. 5478 (1932). The NLA was created in an effort to limit the power of Federal Judges, who had previously been seen as pro-management.
Judge Gross determined that “the dispute between the Union and the Debtors … qualifies as a labor dispute…” thus implicating the NLA to protect their communications. Opinion *9. However, “the Union’s protections under the NLA arguably run headlong into the Bankruptcy Code’s automatic stay…” Opinion *10. As Judge Gross opined, “if the statutes are read to cover the same conduct, application of the automatic stay will essentially work to repeal the NLA in the bankruptcy context. It is incumbent upon the Court to adopt an interpretation that would, if possible, avoid such a result while giving effect to both statutes.” Opinion at *14-15. Judge Gross held that “the Court is duty-bound in this instance to select the interpretation which would give effect to both the automatic stay and the NLA….” Opinion *22. In this case, Judge Gross determined that the automatic stay of Section 362(a)(6) is inapplicable to the Union’s forward-looking labor activities, including their calls to potential clients in an effort to influence negotiations of a new collective bargaining agreement.
In his opinion and ruling, Judge Gross “attempted to walk an interpretive tightrope to arrive at a construction of the automatic stay which would give effect to both the stay and the NLA.” Opinion *22. One of the responsibilities of the court is to interpret laws in such a manner as to avoid creating a conflict between them. It behooves an attorney to try and help the court navigate the inconsistencies of a conflict in a manner that gives effect to all of the implicated statutes, rather than arguing for one statute to be revised or struck. If one party to a conflict proposes an interpretation that allows both statutes to remain in effect and the other does not, the court will be more influenced by the interpretation that gives full effect to both statutes.