VARGAS v. RETAIL CLERK UNION LOCAL 1428 (1989)

INTRODUCTION

Defendants Retail Clerk's Union Local 1428 and Jesse Gonzales appeal from a judgment in favor of plaintiffs Peter Vargas, Kenneth Henderson and Chino Farms Market.   The jury awarded Chino Farms Market $2,602,765 in compensatory damages and $2,602,765 in punitive damages against the union for intentional interference with business relations, and $1,000 in compensatory damages and $1,000 in punitive damages against Jesse Gonzales for intentional interference with business relations.   The jury awarded Peter Vargas $300,000 against the union and $8,000 against Jesse Gonzales for intentional infliction of emotional distress.   Kenneth Henderson also was awarded $300,000 against the union for intentional infliction of emotional distress.

STATEMENT OF FACTS

The power of an appellate court begins and ends with the determination whether any substantial evidence, contradicted or uncontradicted, will support the trial court's finding.  (Foreman & Clark Corp. v. Fallon (1971) 3 Cal.3d 875, 881, 92 Cal.Rptr. 162, 479 P.2d 362.)

Plaintiffs Peter Vargas (Vargas) and Kenneth Henderson (Henderson) opened plaintiff Chino Farms Market (the market) in June 1974;  the market was incorporated and owned by Vargas and Henderson.   Both Vargas and Henderson had previous experience in the grocery business, and had worked together in the past.

The market was unionized, its employees belonging to defendant Retail Clerk's Union Local 1428 (the union).   When the employees' contract expired in March 1975, an interim contract was agreed to while negotiations for a new contract took place.   The market and the union did not reach an agreement on a new contract and on September 22, 1975, the employees went on strike.   The strike lasted until October 31, 1976.

On the first night of the strike, Henderson spoke to Carl Smith (Smith), the union's local business agent at the time.   He said, “ ‘Carl, why don't you get these pickets jobs.’ ”   Smith replied, “ ‘We don't care about the people.   We're gonna break you.’ ”

Although the first week or two of the strike were peaceful, the situation then changed drastically.   The pickets began blocking the entrance to the store and the driveways, swearing at customers, taking down their automobile license numbers, and scattering nails or carpet tacks in the parking lot.   Plaintiffs obtained a temporary restraining order limiting the number and location of pickets, preventing the pickets from obstructing, blocking or hindering access to the market or parking lot, from threatening or intimidating customers, employees or people doing business with the market, and from damaging plaintiffs' property.   Plaintiffs' attorney gave copies of the TRO to Smith and the other pickets, who promptly tore them up and threw them on the parking lot.

The pickets continued to block doors and driveways and to swear at customers, and plaintiffs obtained a preliminary injunction with the same provisions as the TRO.   This had as much effect on the pickets as the TRO.   When Henderson told Smith he was violating the injunction, Smith told Henderson to take him back to court—he would go broke quicker.   The pickets continued to exceed the permitted number and to block access to the market and parking lot.

A number of acts of vandalism occurred during the strike.   The market's delivery truck had its windows broken and was spray-painted.   Bales of cardboard stored behind the market were broken up and the cardboard strewn about.   The sump pump in the loading dock was damaged.   Graffiti was placed on the walls of the market.

When Vargas was helping to unload a delivery truck, picket Shirley Miller disrupted the process, endangering the workers.   Another time, picket Judy Cuthbertson Caro (Caro) and a second picket blocked the unloading;  Caro then sued Vargas for assault and battery.   She later told him that Smith and Jesse Gonzales (Gonzales), the picket captain, told her to file the suit;  they would have witnesses to back her up and would share in the proceeds.

Vargas heard from a picket that Smith was offering money for breaking market and truck windows.   He also heard the union was offering extra money to pickets who vandalized the market and employees' automobiles.   Both Smith and Gonzales threatened Vargas, and Smith told him the union, to which Vargas belonged, would not allow him to receive his pension.   Vargas received telephoned threats at the market that it would be bombed, and at home, in the middle of the night, that there was a bomb in the house.   His home sprinkler system also was vandalized.

John Camacho (Camacho) worked at the market both before and during the strike.   He frequently observed pickets standing on the pressure plates to open the market's doors.   The pickets pushed shopping carts into the street, where he would have to retrieve them.   When he tried to return shopping carts to the market, pickets would block him or push the line of carts aside.   On more than one occasion, he had to sweep up nails on the parking lot and he observed locks on the market doors jammed with foreign substances.   He heard pickets curse at customers and saw them writing down customers' automobile license numbers and blocking their access to the store either by standing in their way or by pushing shopping carts in front of them.   More than once, Gonzales taunted him as he was working the parking lot.   As the strike progressed, Camacho noticed “a lot less” customers shopping at the market.

Brent Felbob (Felbob) was employed by the market during the strike.   He also observed the pickets blocking market entrances and driveways, bumping into customers and directing obscenities at them.   He saw nails spread all over the parking lot and flat tires on customers' automobiles.   The pay telephones, vending machine, flowerbeds and sidewalk in front of the market were vandalized;  food and beverages were thrown against the store windows and graffiti was written on the walls;  Felbob saw the pickets engage in much of this vandalism.   Felbob himself was taunted and challenged;  his motorcycle was tampered with and destroyed, but he did not see who did it.   As the strike wore on, Felbob observed, customers complained about the picketers' activities and finally stopped shopping at the market.

Viola Schaefer, a regular customer of the market, observed the pickets, including Gonzales, block doors and driveways, verbally harass customers, flatten tires in the parking lot, place graffiti and commit other vandalism on market premises.   On several occasions the pickets blocked her entrance into the market and used foul language in her presence.   She often saw customers approach the market, turn around, and leave when confronted with the picketers;  as the strike progressed, there were fewer and fewer customers.

Ethel Martin (Martin) was another regular customer of the market;  at the time of the strike she was 69 years old and lame.   On one occasion two pickets pushed a shopping cart in front of Martin and her husband as they attempted to enter the market and asked why they were shopping at Chino Farms Market instead of another store.   Martin explained she was crippled and the store was closest to her house.   The pickets did not move and Martin and her husband were forced to go around them;  as they did so, one of the pickets told Martin, “I hope you break your leg.”

Gary Riezebos (Riezebos) was a young teenager during the strike and went to the market after school with his friends almost every day;  they played the pinball machines there and sometimes volunteered to help Vargas doing odd jobs around the market.   He observed the pickets blocking the market entrance, standing on the door pressure plate, and throwing trash around the market.   He also saw graffiti painted all over the walls, a broken window, and damage to the delivery truck.   When the truck was spray-painted, he took a rag and some turpentine to clean its headlights.   Gonzales attempted to photograph him, so Riezebos kept his head down to avoid him.   As he returned to the market, he held the rag in front of the camera to avoid having his picture taken.   Gonzales threatened him and Riezebos began to run;  Gonzales followed and kicked him in the back.   On another occasion, Riezebos and his friends hid by the loading dock to see who was painting graffiti on the walls.   One of the strikers spotted them, so they started for the door to the market;  the striker and Gonzales blocked them.   The striker attempted to take a walking stick from one of Riezebos' friends and, when the boy wouldn't let go of it, threw him against the wall hard enough to loosen the stick;  he then picked up the stick and broke it over his knee.

Edward Flannagan and Larry Nordell, patrol officers with the City of Chino Police Department during the strike, were called to the market at various times to investigate incidents occurring there.   Neither was able to make any arrests because the crimes occurring at the market during the strike were misdemeanors committed out of their presence.   Whenever Officer Nordell spoke with a picket regarding something which had occurred, the picket responded by asking, “Can you prove it?”

Louis Moreno was a captain with the City of Chino Police Department and a regular customer of the market.   When various people told him about problems with strikers at the market he contacted the strike captain and pickets to let them know violence and illegal acts would not be tolerated.   He nonetheless observed pickets blocking the driveways and the doors to the market.   He also saw broken glass and nails in the parking lot and water balloons that had been thrown into the store, but he was unable to make any arrests because he had not seen the pickets cause these problems.   On one occasion he attempted to enter the market to shop but a picket blocked him;  he was in plain clothes at the time.   The picket told him he (Captain Moreno) did not want to shop at the market and said, “You know, it wouldn't be very healthy for you to walk in the store.   Why don't you just leave.   Don't you know there's picketing going on?”   Captain Moreno insisted on shopping at the market and showed the picket his badge;  the picket then walked away.   Captain Moreno identified the picket as Larry Sooter (Sooter), who was then a business agent for the union.   Captain Moreno observed a dramatic decrease in the number of customers at the market over the course of the strike.

Daniel Valdez (Valdez) was hired as a picket by Gonzales one to two weeks after the strike began;  he was one of a number of hired pickets.   He received no instruction as to how to conduct himself on the picket line.   He and other pickets would walk slowly across the driveways to prevent vehicles from entering the parking lot.   He also removed tire stems from tires on vehicles on the parking lot;  when Gonzales learned of it, he told Valdez he should have gotten all the tires.   On several occasions, Valdez put tacks or nails under the tires of vehicles on the lot;  he got the nails from Gonzales's automobile, and Gonzales told him to throw the nails under the customers' tires.   Valdez would physically block customers trying to enter the market and curse at them;  other pickets did the same.   Gonzales was present when this occurred.   Valdez also threatened to beat up people, but Gonzales told him not to do so because it would bring the police.   Valdez estimated the pickets were successful in preventing two out of ten customers from shopping at the market.   Valdez ultimately either was fired from the picket line due to the number of complaints about his conduct or left because he was arrested and jailed;  he could not recall which.

Judy Cuthbertson Caro was also hired by Gonzales as a picket and was not given any instruction on how to conduct herself while picketing.   She observed pickets—including Gonzales—throw tacks or nails in the parking lot.   She also saw pickets put substances such as horse manure in front of the market doors to offend people.   One picket, Jeff Grimes, told her he had broken the windows of the market's delivery truck.

At one point, Smith offered Caro and fellow picket Marie Braun Bartlett (Bartlett) $100 to burn Vargas's house or automobile;  they refused the offer.   Smith also offered money to the pickets if they would break the market's windows.

Caro admitted filing the lawsuit against Vargas, but did so at the union's behest.   She ultimately had it dismissed, no longer wanting to be a part of what the union was doing.

Dr. Gerhard N. Rostvold, an economist, was plaintiffs' expert witness;  he undertook to determine the financial effects of the strike.   He testified that a peaceful, noninterfering strike would generally lead to a 20 percent decrease in a market's net sales.   He defined a peaceful, noninterfering strike as one in which pickets walk back and forth near the market, letting their signs speak for them.   A violent, interfering strike would include:  “harassment of customers as they walked in the door or try to walk in the door;  verbal threats;  intimidation;  interference;  blocking the doorway;  nails on the parking lot;  damaged vehicles;  vandalism:  you cut the wires of trucks;  you splatter eggs around the premises;  you let air out of a tire;  you put graffiti paint on the wall;  the citizens of Chino driving by and seeing police cars on the lot.”

He calculated the total financial loss to the market and subtracted 20 percent attributable to a peaceful, noninterfering strike, which left a loss of $2,602,765 attributable to the violent, interfering nature of the strike.   Further, it was these elements which eventually put the market out of business in early 1977;  had the strike been peaceful and noninterfering, the market would have been able to survive.

CONTENTIONS

I

Defendants contend that the tort of intentional interference with business relations, which lay at the heart of the entire complaint, was preempted by federal labor law and was not a proper basis for awarding damages.

II

Defendants further contend that even if the tort of intentional interference with business relations is not preempted, the trial court erroneously failed to instruct the jury that the union could be held vicariously liable for the tort only upon clear proof of its actual responsibility for violence or threats of violence.

III

Defendants assert that the opinion testimony of Dr. Rostvold, plaintiffs' expert, should have been excluded, in that it was based upon assumed facts not in evidence and unreliable hearsay.

IV

Defendants additionally assert that the trial court committed reversible error when it permitted the jury to hear irrelevant out-of-court declarations and inflammatory evidence.

V

Finally, defendants contend that the punitive damages award must be reversed because federal labor law preempts state law in this area and does not permit such awards against labor unions.

DISCUSSION

I

Defendants contend the tort of intentional interference with business relations, which lay at the heart of the entire complaint, was preempted by federal labor law and was not a proper basis for awarding damages.   We disagree.

Under the doctrine of preemption, where federal and state law cover the same area, federal law preempts state law.  (7 Witkin, Summary of Cal.Law (9th ed. 1988) Constitutional Law, § 7, p. 49.)   If the federal law does not clearly state an intent to preempt state law, the state law will be upheld “unless it conflicts with federal law or would frustrate the federal scheme, or unless the courts discern from the totality of the circumstances that Congress sought to occupy the field to the exclusion of the States.”  (Malone v. White Motor Corp. (1978) 435 U.S. 497, 504, 98 S.Ct. 1185, 1190, 55 L.Ed.2d 443.)

Labor law cases addressing preemption generally involve the National Labor Relations Act (NLRA) (29 U.S.C. § 151 et seq.), the Labor Management Relations Act (LMRA) (29 U.S.C. § 141 et seq.) or the Norris–LaGuardia Act (29 U.S.C. §§ 101–115);  the principles applied to one act are equally applicable to the others (see, e.g., Mine Workers v. Gibbs (1966) 383 U.S. 715, 730–731, 86 S.Ct. 1130, 1141–1142, 16 L.Ed.2d 218).   Discussing the preemptive effect of the NLRA, the United States Supreme Court stated in Wisconsin Dept. of Industry v. Gould Inc. (1986) 475 U.S. 282, 286, 106 S.Ct. 1057, 1061, 89 L.Ed.2d 223:  “It is by now a commonplace that in passing the NLRA Congress largely displaced state regulation of industrial relations.   Although some controversy continues over the Act's pre-emptive scope, certain principles are reasonably settled.   Central among them is the general rule set forth in San Diego Unions v. Garmon (1959) 359 U.S. 236 [79 S.Ct. 773, 3 L.Ed.2d 775], that States may not regulate activity that the NLRA protects, prohibits, or arguably protects or prohibits.   Because ‘conflict is imminent’ whenever ‘two separate remedies are brought to bear on the same activity,’ Garner v. Teamsters Union 346 U.S. 485, 498–499 [74 S.Ct. 161, 169–170, 98 L.Ed. 228] (1953), the Garmon rule prevents States not only from setting forth standards of conduct inconsistent with the substantive requirements of the NLRA, but also from providing their own regulatory or judicial remedies for conduct prohibited or arguably prohibited by the Act.  (See San Diego Unions v. Garmon, supra, 359 U.S. 236, 247 [79 S.Ct. 773, 780].)   The rule is designed to prevent ‘conflict in its broadest sense’ with the ‘complex and interrelated federal scheme of law, remedy, and administration,’ (id. at p. 243 [79 S.Ct. at p. 778] ), and this Court has recognized that ‘[c]onflict in technique can be fully as disruptive to the system Congress erected as conflict in overt policy.’  Motor Coach Employees v. Lockridge (1971) 403 U.S. 274, 287 [91 S.Ct. 1909, 1918, 29 L.Ed.2d 473].”

However, “[f]ederal labor policy as reflected in the National Labor Relations Act, as amended, has been construed not to preclude the States from regulating aspects of labor relations that involve ‘conduct touch[ing] interests so deeply rooted in local feeling and responsibility that ․ we could not infer that Congress had deprived the States of the power to act.’  ․ Policing of actual or threatened violence to persons or destruction of property has been held most clearly a matter for the States.”   (Machinists v. Wisconsin Emp. Rel. Comm'n (1976) 427 U.S. 132, 136, 96 S.Ct. 2548, 2551, 49 L.Ed.2d 396, footnote and citation omitted.)   The state retains “ ‘its historic powers over such traditionally local matters as public safety and order and the use of streets and highways.’ ”  (Garner v. Teamsters Union, supra, 346 U.S. 485 at p. 488, 74 S.Ct. 161 at p. 164.)   While federal labor law leaves much to the states, however, it does not specify how much, as the number of cases on the subject of preemption reflects.

In general, preemption cases involve restriction by the states of conduct protected or regulated by federal law.   One line of cases has held, “ ‘ “When it is clear or fairly may be assumed that the activities which a State purports to regulate are protected by § 7 of the National Labor Relations Act, or constitute an unfair labor practice under § 8, due regard for the federal enactment requires that state jurisdiction must yield.   To leave the States free to regulate conduct so plainly within the central aim of federal regulation involves too great a danger of conflict between power asserted by Congress and requirements imposed by state law.” ’ ”  (Machinists v. Wisconsin Emp. Rel. Comm'n, supra, 427 U.S. 132, 139, 96 S.Ct. 2548, 2552.)

A second line of cases has inquired “whether Congress intended that the conduct involved be unregulated because left ‘to be controlled by the free play of economic forces.’ ”  (Id. at p. 140, 96 S.Ct. at p. 2553.)   Even if section 7 does not specifically protect conduct, Congress could have intended such conduct to be unrestricted by any government regulation because it is among the permissible “economic weapons in reserve.”  (Id. at p. 141, 96 S.Ct. at p. 2554.)   In the federal scheme, “ ‘the use of economic pressure by the parties to a labor dispute is ․ part and parcel of the process of collective bargaining.’ ”  (Id. at p. 144, 96 S.Ct. at p. 2555.)

Relying on the foregoing principle, defendants in the instant case argue:  “The tort alleged, and that upon which liability was based, is the tort of intentional interference with business relations․  Yet federal law authorizes a labor union intentionally to interfere with an employer's business relations.”   Defendants acknowledge state courts may provide a monetary remedy for torts in the area of labor relations which are based on violence or threats of violence but they imply that damages must be based on a cause of action other than intentional interference with business relations.   They make no suggestion as to what such causes of action might be, especially in the case of a business whose main loss would be in the area of its business relations.

 In our view, defendants have misinterpreted the case law in this area.   The focus of the inquiry in dealing with preemption should not be on the type of harm suffered or the nature of the cause of action but on the type of conduct affected by state law.   If federal labor law protects or regulates the conduct involved, there can be no state-law action for damages.   If the conduct is unprotected and amenable to state regulation, a state-law action may be maintained for damages and it may be whatever type of action is appropriate for the type of injury suffered.

San Diego Unions v. Garmon, supra, 359 U.S. 236, 79 S.Ct. 773, involved the question whether the state court had jurisdiction to award damages arising out of peaceful union activity which it could not enjoin.   The court noted that in enacting labor law, “ ‘Congress formulated a code whereby it outlawed some aspects of labor activities and left others free for the operation of economic forces.’ ”  (Id. at p. 240, 79 S.Ct. at p. 777.)   Thus, in determining the question of preemption, the court's focus was on the nature of the activities the state sought to regulate, not the method of the regulation adopted.   (Id. at pp. 243, 246–247, 79 S.Ct. at pp. 778, 780–781.)   The state's jurisdiction had to yield if the activities it sought to regulate were protected by, or an unfair labor practice under, the NLRA.  (Id. at p. 244, 79 S.Ct. at p. 779.)   Since only peaceful union activity was involved, the state court had no jurisdiction to award damages.  (Id. at pp. 247–248, 79 S.Ct. at pp. 780–782.)

In Mine Workers v. Gibbs, supra, 383 U.S. 715, 86 S.Ct. 1130, a mining company hired plaintiff as a mine superintendent and gave him a contract to haul the mine's coal;  he was to employ workers who were members of a union which was defendant's rival.   Armed members of defendant's local union forcibly prevented the opening of the mine and beat the rival union's organizer.   When the area field representative for defendant, the international union, learned of the violence, he instructed the local to establish a limited picket line, prevent further violence and prevent the spread of the strike to other mines, which it did.   However, plaintiff lost his job, the hauling contract, and other trucking contracts at nearby mines.   He sued defendant for violating section 303 of the LMRA prohibiting secondary boycotts, and raised state law claims for unlawful conspiracy and boycott and interference with contract.   He recovered damages under state law for interference with his employment relationship.  (Mine Workers v. Gibbs, supra, 383 U.S. 715, 718–721, 86 S.Ct. 1130, 1135–1136.)

The court was called upon to determine whether damages properly were awarded under state law.   The court reviewed numerous cases consistently recognizing states' rights to deal with violence and threats of violence during labor disputes.  (Id. at pp. 729–730, 86 S.Ct. at pp. 1140–1141.)  San Diego Unions v. Garmon, supra, 359 U.S. 236, 247, 79 S.Ct. 773, 780–781, held that states had the right “to grant compensation for the consequences, as defined by the traditional law of torts, of conduct marked by violence and imminent threats to the public order.”  Automobile Workers v. Russell (1958) 356 U.S. 634, 638, footnote 3, 78 S.Ct. 932, 935, footnote 3, 2 L.Ed.2d 1030, observed that such damages required a proximate relation between the loss and the violence and threats of force and violence.  (Mine Workers v. Gibbs, supra, 383 U.S. 715, 730, 86 S.Ct. 1130, 1141.)   In Allen–Bradley Local v. Board (1942) 315 U.S. 740, 748, 62 S.Ct. 820, 825, 86 L.Ed. 1154 and Auto Workers v. Wisconsin Board (1956) 351 U.S. 266, 269–270, footnote 3, 76 S.Ct. 794, 796–797, footnote 3, 100 L.Ed. 1162, the court noted that state administrative injunctive relief could prohibit only the continuation of unlawful picketing.  (Mine Workers v. Gibbs, supra, 383 U.S. 715, 730, 86 S.Ct. 1130, 1141.)   And Youngdahl v. Rainfair, Inc. (1957) 355 U.S. 131, 139, 78 S.Ct. 206, 211, 2 L.Ed.2d 151, declared that a state court could not enjoin all picketing of premises but must permit peaceful picketing;  however, the state court could enjoin future acts of violence, intimidation and threats of violence.

In some cases, the court had allowed a state injunction against all picketing, but that picketing had been enmeshed with violent conduct and the two could not practically be separated.   If the same facts that appeared in those cases appeared in an action for damages, there might be support for the conclusion that all damages were caused by the violent component of the picketing.   However, where the consequences of peaceful and violent conduct are separable, a plaintiff may recover damages for the latter only.  (Mine Workers v. Gibbs, supra, 383 U.S. 715, 731–732, 86 S.Ct. 1130, 1141–1142.)

On the facts before the Gibbs court, only the early violence occurring in the first two days would justify applying state tort law.   Thus, the question was whether the pleadings, arguments and jury instructions adequately defined the compass within which damages could be awarded under state law.   The tort claimed was in essence a conspiracy to interfere with plaintiff's contractual relations, and the record showed the notion of conspiracy employed by plaintiff expanded the application of state law beyond the limits of defendant's involvement in violence.   Under the state law of conspiracy, in order to impose liability on defendant it was necessary to show defendant had a part in a conspiracy, some of whose members engaged in violence in furtherance of the conspiracy's purposes;  it was not necessary to show defendant actually authorized, participated in, or ratified the use of violence.  (Id. at pp. 732–733, 86 S.Ct. at pp. 1142–1143.)   By not requiring a finding of defendant's involvement in the violence before liability was imposed, the jury instructions did not keep the conspiracy concept within any proper bounds.   (Id. at pp. 733–734, 86 S.Ct. at pp. 1142–1143.)   Because violence or threats of violence were “the essential predicate” of any recovery, it was necessary to reverse the judgment.  (Id. at pp. 735–742, 86 S.Ct. at pp. 1143–1147.)

Both Garmon and Gibbs focused on the conduct involved in determining whether federal labor law preempted the state-law claims.  Gibbs did not hold that plaintiff could not sue for interference with his contractual relations, or that the entire tort was preempted by federal law which allows unions to use economic weapons in labor disputes.   Rather, it held plaintiff could maintain the cause of action so long as it was based upon the union's use of violence and threats of violence, conduct not protected by federal labor law and which the state properly regulated.  (383 U.S. at pp. 730, 735, 86 S.Ct. at pp. 1141, 1143.)

California cases, too, have focused on the nature of the conduct in determining whether to apply state law.   In M Restaurants, Inc. v. San Francisco Local Joint Exec. Bd. Culinary Etc. Union (1981) 124 Cal.App.3d 666, 177 Cal.Rptr. 690, during a labor dispute defendants set up a picket line around plaintiff's restaurant.   They stationed 50 to 100 pickets at the entrances, blocking the doorways;  pickets jeered and booed potential customers, tried to force handbills on them and made negative statements about the restaurant.   The restaurant obtained a temporary restraining order and preliminary injunction enjoining defendants from blocking access to the restaurant, from threatening and/or committing acts of intimidation and physical violence, and from disturbing the peace.  (Id. at pp. 671–672, 177 Cal.Rptr. 690.)

The question before the court was whether the legislation permitting issuance of the injunction (Code Civ.Proc., § 527.3 [patterned after the Norris–LaGuardia Act, which regulates the issuance of injunctions in labor disputes] ) conflicted with federal labor policy.   The court viewed the statute not as restricting otherwise permitted conduct but as enlarging the scope of conduct left to the free play of economic forces designed to further union rights by limiting unnecessary judicial intervention.  (Id. at p. 678, 177 Cal.Rptr. 690.)   The statute allowed an injunction to be issued to bar conduct involving at the least fraud, violence, or breach of the peace, and at the most other unlawful conduct.   It is well established that states may enjoin unlawful activities, such as violence, intimidation, obstruction, public safety hazards and threats;  federal labor policy does not protect such conduct and the states have the right to police it.   Thus the court could properly enjoin picketing that obstructed access to the restaurant and would tend to lead to violence.  (Id. at pp. 680–682, 177 Cal.Rptr. 690.)

Although Maheu v. CBS, Inc. (1988) 201 Cal.App.3d 662, 247 Cal.Rptr. 304 involves federal copyright law rather than labor law, it nonetheless illustrates how the preemption doctrine focuses on conduct rather than on the nature of the cause of action.   Plaintiff in Maheu sued defendants for intentional interference with contract or prospective economic advantage based upon their publication of letters belonging to him;  defendants claimed preemption by federal copyright law.   The court pointed out that “[i]n enacting the Copyright Act of 1976, Congress intended that state law claims for interference with contract or prospective economic advantage would be preempted where based on unauthorized use or copying of copyrightable property.  ‘[T]o the extent that the unfair competition concept known as “interference with contractual relations” is merely the equivalent of copyright protection, it would be preempted.’  [Citations.]”  (Id. at p. 677, 247 Cal.Rptr. 304.)   Because the foregoing was the basis of plaintiff's claim, it was preempted.   (Id. at p. 678, 247 Cal.Rptr. 304.)

There is no support for the contention that federal labor law has preempted the entire tort of interference with business relations in a labor dispute.   Rather, that tort has been preempted only to the extent it is based upon conduct protected or regulated by the federal law.

If the conduct is that which has been left to the states to regulate, such as violence and threats of violence, it may form the basis of a state-law suit for intentional interference with business relations.

II.

 Defendants claim on appeal that even if the tort of intentional interference with business relations is not preempted, the trial court erroneously failed to instruct the jury that the union could be held vicariously liable only upon clear proof of its actual responsibility for violence or threats of violence.   We disagree.

As this opinion has pointed out, the United States Supreme Court has recognized the right of states to provide remedies for violence and threats of violence arising in labor disputes “as defined by the traditional law of torts.”  (Mine Workers of America v. Gibbs, supra, 383 U.S. 715, 729–730, 86 S.Ct. 1130, 1140–1141.)   That case held that section 6 of the Norris–La Guardia Act applied “to federal court adjudications of state tort claims arising out of labor disputes․”  (Id. at p. 737, 86 S.Ct. at p. 1144.)   Gibbs does not, however, extend section 6 to a state court's adjudication of state torts, and we do not believe section 6 extends that far.

McCarroll v. Los Angeles County Etc. Carpenters (1957) 49 Cal.2d 45, 63, 315 P.2d 322, likewise states that the Norris–La Guardia Act's terms limit the federal courts.   The act, however, “did not limit the remedial power of the state courts [citations], and could not constitutionally have done so since its prohibition was not restricted to injunctions in labor disputes affecting interstate commerce or any other subject over which Congress has paramount power.”   The act primarily intended to restrict the federal equity power to issue injunctions in a case growing out of a labor dispute.  (Id. at p. 63, 315 P.2d 322;  29 U.S.C., §§ 101 and 113, subd. (d).)  Insofar as conduct affected the “compelling state interest in the maintenance of domestic peace,” state tort law provided remedies for the direct consequences of violent conduct.  (Mine Workers v. Gibbs, supra, 383 U.S. 715, 730, 86 S.Ct. 1130, 1141.)

M Restaurants, Inc. v. San Francisco Local Joint Exec. Bd. Culinary Etc. Union, supra, 124 Cal.App.3d 666, 674–676, 177 Cal.Rptr. 690, went further than McCarroll.  M Restaurants stated that the Norris–La Guardia Act limited federal jurisdiction to issue injunctions in labor disputes except where fraud or violence occurred.   Moreover, the act relied constitutionally on Congressional power under article III, section 1, to define and limit federal court jurisdiction.  “The act merely restricted and limited equitable remedies and did not make substantive changes in the law.”  (Id. at p. 675, 177 Cal.Rptr. 690, citing Frankfurter & Greene, The Labor Injunction (1930), p. 215.)

Besides the Act's jurisdictional origins, limitations upon its intended purpose, and the lack of federal Supreme Court extension of section 6 to encompass adjudication of state torts in state courts, an issue arises concerning the substance of section 6.   That section states:  “No officer or member of any association or organization, and no association or organization participating or interested in a labor dispute, shall be held responsible or liable in any court of the United States for the unlawful acts of individual officers, members, or agents, except upon clear proof of actual participation in, or actual authorization of, such acts, or of ratification of such acts after actual knowledge thereof.”  (29 U.S.C., § 106.)

Some controversy once existed about the effect and nature of section 6.   As summarized in Brotherhood of Carpenters v. U.S. (1947) 330 U.S. 395, 402–403, 67 S.Ct. 775, 779–780, 91 L.Ed. 973, some commentators felt section 6 changed the substantive law of agency in labor disputes, while others considered it simply a rule of evidence.   The analysis in Mine Workers v. Gibbs, supra, 383 U.S. 715, 737, 86 S.Ct. 1130, 1144, however, indicates that the latter view is correct.   The statute's history and rationale “suggest that Congress meant ․ to signify a meaning like that commonly accorded such similar phrases as ‘clear, unequivocal, and convincing proof.’   Under this standard, the plaintiff in a civil case is not required to satisfy the criminal standard of reasonable doubt on the issue of participation, authorization or ratification;  neither may he prevail by meeting the ordinary civil burden of persuasion.”

This analysis conforms to California Evidence Code section 115, stating that “[t]he burden of proof may require a party to ․ establish the existence or nonexistence of a fact by a preponderance of the evidence, by clear and convincing proof, or by proof beyond a reasonable doubt.”   Section 6, specifying the burden of proof required in cases under its jurisdiction, does not therefore apply to state torts outside the scope of the statute.   It is true that a state court exercising concurrent jurisdiction may not employ a state rule of practice or procedure to defeat substantively a federal right.   (Lehto v. Underground Constr. Co. (1977) 69 Cal.App.3d 933–943, 138 Cal.Rptr. 419.)   But where a federal statute leaves state torts intact and the cause of action arises from state substantive law, no question about a choice between federal and state law arises.   It is elementary that a state court not exercising concurrent federal jurisdiction will apply state rules of evidence in adjudicating state tort remedies.

The only California case on point, J.R. Norton Co. v. General Teamsters, Warehousemen & Helpers Union, Local 890 (1989) 208 Cal.App.3d 430, 256 Cal.Rptr. 246, in which the California Supreme Court denied defendant union's petition for review on May 18, 1989, confirms this view.   In Norton, the trial court had awarded compensatory and punitive damages to an employer on several causes of action for losses caused by a union's negligent supervision of strikers during a labor dispute.  Norton rejected the union's claim on appeal that 29 U.S.C. section 106 preempted state law.   Citing Gibbs, United Workers v. Laburnum Corp. (1954) 347 U.S. 656, 663–664, 74 S.Ct. 833, 836–838, 98 L.Ed. 1025, and Garner v. Teamsters Union, supra, 346 U.S. 485, 488, 74 S.Ct. 161, 164, Norton demonstrated that the Norris–La Guardia Act and subsequent judicial interpretation did not disturb state tort remedies for harm caused by violent conduct in labor disputes, and did not override a state's exercise of jurisdiction to satisfy its compelling state interest in regulating traditional local matters of public safety.  (J.R. Norton Co. v. General Teamsters, Warehousemen & Helpers Union, Local 890, supra, 208 Cal.App.3d 430, 440, 256 Cal.Rptr. 246;  see also M Restaurants, Inc. v. San Francisco Local Joint Exec. Bd. Culinary Etc. Union, supra, 124 Cal.App.3d 666, 678–679, 177 Cal.Rptr. 690.)

 Norton moreover cited the Legislature's failure to incorporate the section 6 provisions, even though the Agricultural Labor Relations Act, California Labor Code section 1140 et seq. and the Moscone Act, Code of Civil Procedure section 527.3 relied on other aspects of the Norris–La Guardia Act.  Norton concluded that this nonincorporation of section 6 reflected a conscious legislative determination to retain California law as it existed at the time the statutes were enacted, and held that the provisions of section 6 do not preempt California law.   Hence the union's liability was determined according to the established state rule that acts of union officers, agents, or employees within the scope of their office, agency, or employment bind the union.  (J.R. Norton Co. v. General Teamsters, Warehousemen & Helpers Union, Local 890, supra, 208 Cal.App.3d 430, 441–443, 256 Cal.Rptr. 246.)

We therefore conclude that in the case at bench, the trial judge correctly instructed the jury according to the California standard of proof.¹

 Defendant on appeal also argues that a union is not responsible for every act of its anonymous members or employees.   The three authorities cited, however, do not support this proposition in light of the circumstances of the instant case.

In Marshall v. International Longshoremen's & Warehouseman's Union (1962) 57 Cal.2d 781, 22 Cal.Rptr. 211, 371 P.2d 987, a union member sued his own union for injuries caused by a fall over a concrete obstruction in the union parking lot allegedly maintained by the union and its officers, named as defendants.  Marshall stated that while each union member may not be liable under the respondeat superior doctrine for acts of union officers, agents, and employees, the union as a legal entity may nevertheless be responsible for negligence.  (Id. at p. 785, 22 Cal.Rptr. 211, 371 P.2d 987.)  Marshall held that the union member could sue his union for negligent acts he neither participated in nor authorized, and could satisfy from union funds alone any judgment he might recover against the union.  (Id. at p. 787, 22 Cal.Rptr. 211, 371 P.2d 987.)   The case at bench does not adjudicate a union's negligence liability to one of its own members.   With different facts and a different cause of action from those in the case at bench, Marshall nonetheless actually supports the principle that a union as a legal entity can sustain tort liability.

United States v. White (1944) 322 U.S. 694, 64 S.Ct. 1248, 88 L.Ed. 1542, also cited by defendant, simply holds that the constitutional privilege against self-incrimination does not apply to unions faced with a subpoena duces tecum to produce union records in its custody and that might tend to incriminate a union officer.  (Id. at pp. 698–701, 64 S.Ct. at pp. 1251–1252.)   The case at bench does not implicate this constitutional right.

White does reference the rule that “[t]he actions of one individual member no more bind the union than they bind another individual member unless there is proof that the union authorized or ratified the acts in question.”  (Id. at p. 702, 64 S.Ct. at p. 1253.)   The third case defendant cites, In re Coleman (1974) 12 Cal.3d 568, 116 Cal.Rptr. 381, 526 P.2d 533, indicates the circumstances under which a union can be held liable for acts during a labor dispute.   In Coleman, union officials, members, and employees who planned and carried out daily mass picketing committed “numerous acts of violence, harassment, and intimidation.   For such conduct the organization as an entity must properly be held accountable.”   Although conceding that an individual member's acts do not bind the union without proof that the union authorized or ratified the acts in question, Coleman held that “the evidence uniformly indicates the mass picketing and acts of violence were integral to a concerted organizational effort to debilitate the [employer, a convalescent hospital].”   (Id. at p. 573, 116 Cal.Rptr. 381, 526 P.2d 533.)

Coleman thus establishes that a consistent pattern of violence and threats of violence can prove a concerted effort by a union which will support the union's tort liability for those acts.   By instructing the jury that “if you find that union officials, agents, members and/or employees, both named and unnamed, planned and carried out any unlawful acts, then the union itself must be held accountable,” the trial court in the case at bench gave an instruction consistent with In re Coleman.  (Id. at p. 573, 116 Cal.Rptr. 381, 526 P.2d 533.)

Defendant also objects to several jury instructions because they authorized the jury to find liability for “unlawful” conduct by the union local.²

 In reviewing jury instructions, an appellate court considers not whether a particular instruction's wording misstates applicable law, but whether the instructions viewed as a whole misguided the jury.  (People v. Southern Pacific Co. (1983) 139 Cal.App.3d 627, 634, 188 Cal.Rptr. 913.)   Moreover, a jury instruction must be interpreted to support rather than to defeat the judgment if it is reasonably susceptible to such interpretation.   (Tele–Count Engineers, Inc. v. Pacific Tel. & Tel. Co. (1985) 168 Cal.App.3d 455, 463, 214 Cal.Rptr. 276.)

Instructional error, like any error, must be affirmatively shown, and an appellate court indulges all intendments and presumptions to support a lower court's judgment as to matter about which the record is silent.  (Jacques Interiors v. Petrak (1987) 188 Cal.App.3d 1363, 1369, 234 Cal.Rptr. 44.)   The plaintiff on appeal cites its “memorandum of law re special jury instructions,” filed February 23, 1987, arguing only that federal law entirely preempts state law claims.   No other objection in the trial court is cited on appeal.

The existence of federal labor law, as we have pointed out, does not preempt state remedies for torts arising out of labor disputes.  “Labor has no sanctuary in any federal right when it departs from the bounds of peaceful persuasion and resorts to acts of violence, physical intimidation or false statement.”  (United Farm Workers of America v. Superior Court (1976) 16 Cal.3d 499, 505, 128 Cal.Rptr. 209, 546 P.2d 713.)   The instructions are consistent with M Restaurants, Inc. v. San Francisco Local Joint Exec. Bd. Culinary Etc. Union, supra, 124 Cal.App.3d 666, 679–680, 177 Cal.Rptr. 690, permitting the courts to enjoin actual or threatened violence to persons, actual or threatened destruction of property, fraud, breach of the peace, disorderly conduct, unlawful blocking of access or egress to premises where a dispute exists, or other unlawful activity, activity containing threats of injury, violence or reprisals, and activity creating public safety hazards or which obstructs ingress and egress.   Each of the specified activities in the instructions can be reasonably construed as containing either violence or the threat of violence.

During the strike, the pickets blocked store entrances and driveways;  swore at customers;  took down automobile license numbers;  and scattered nails or carpet tacks in the parking lot.   The pickets disregarded both the preliminary injunction and temporary restraining order against these activities.   Numerous acts of vandalism also occurred during the strike, damaging or defacing plaintiff's business property.   Pickets also disrupted deliveries, endangered workers, and blocked unloading;  Vargas received telephone threats that the market would be bombed and that there was a bomb in his home, and found that his home sprinkler system had been vandalized.   Pickets pushed shopping carts into the street, jammed locks on market doors with foreign substances, blocked the way of customers entering or leaving the store, vandalized pay telephones, a vending machine, flower beds, and the sidewalk in front of the market, threw food and beverages against store windows, wrote graffiti on the walls, placed horse manure in front of market doors to offend people, and flattened tires and removed tire valve stems from cars in the parking lot.   Customers were threatened;  one was told by a picket, “You know, it wouldn't be very healthy for you to walk in the store.   Why don't you just leave.   Don't you know there's picketing going on?”

Construing the instructions as a whole, keeping in mind the burden of proof on the appellant to show error affirmatively, and with due regard to the presumptions favoring the correctness of the trial court's judgment, we find no prejudice or other basis upon instructional error to disturb the trial court's judgment.   No “miscarriage of justice” occurred.  (People v. Watson (1956) 46 Cal.2d 818, 835–836, 299 P.2d 243.)

III

Defendants assert that the opinion testimony of Dr. Rostvold, plaintiffs' expert, should have been excluded, in that it was based on assumed facts not in evidence and unreliable hearsay.   We disagree.

Dr. Rostvold, an economist, was plaintiff's expert witness.   At a hearing under Evidence Code section 402, he testified that he undertook, at plaintiffs' request, to determine what the effect of a peaceful strike on a grocery store would be.   He “talked to several members of the food industry to learn whether there was a rule of thumb in the industry which provided a benchmark for a peaceful strike.”   These people were Jan Charles Gray (Gray), vice president and counsel for Ralphs Markets in Los Angeles;  Steve Hoffman (Hoffman), owner and manager of Stonecreek Market, an independent market in Irvine;  and Terry Burnside (Burnside), director of marketing for Alpha Beta stores in California.   They all said a peaceful strike with picketing would generally lead to a 20 percent reduction in net sales.   Dr. Rostvold relied on this information in formulating his opinions.   He also used his own method of analysis for separating the effects of the strike itself from the effects of the violent incidents, which yielded a similar conclusion.   The trial court found him qualified as an expert witness but made it clear the defense could cross-examine him as to the validity of his opinions.

In his trial testimony, Dr. Rostvold went into greater detail about the backgrounds of three men with whom he spoke.   He described Gray as vice president and general counsel for public affairs for Ralphs Markets in Los Angeles.   Defendants objected to testimony regarding what Dr. Rostvold learned from Gray on the ground there was no foundation as to Gray's knowledge;  the objection was sustained.   Dr. Rostvold then testified that Hoffman had been a grocer for many, many years and had been in a peaceful strike;  Hoffman said the general perception in the food industry was that a peaceful strike would generally produce a 20 percent decline in net sales.   Dr. Rostvold testified Burnside was responsible for opening new Alpha Beta stores in California;  Burnside gave a general rule of thumb that a peaceful strike with pickets would translate into a 20 percent decline in net sales.   Defendant then objected there was a lack of foundation as to the basis of Burnside's knowledge;  the court found the question of foundation to be one of weight rather than admissibility and overruled the objection.   Dr. Rostvold later testified his own statistical analysis corroborated the 20 percent figure given by Hoffman and Burnside.

Evidence Code section 801, subdivision (b), provides an expert may testify in the form of an opinion if that opinion is “[b]ased on matter (including his special knowledge, skill, experience, training and education) perceived by or personally known to the witness or made known to him at or before the hearing, whether or not admissible, that is of a type that reasonably may be relied upon by an expert in forming an opinion upon the subject to which his testimony relates․”  When the expert's opinion is not based on his own perception or knowledge, but depends upon information furnished by others, it is of little value unless the source is reliable.  (1 Witkin, Cal.Evidence (3d ed. 1986) § 477, p. 448.)   If unreliable, the opinion should be rejected.  (Id. at § 482, pp. 452–453.)   The same applies to an opinion based on speculative or conjectural information.  (Hyatt v. Sierra Boat Co. (1978) 79 Cal.App.3d 325, 338, 145 Cal.Rptr. 47;  Richard v. Scott (1978) 79 Cal.App.3d 57, 63, 144 Cal.Rptr. 672.)

 Where the expert does rely on information made known to him, the reasonableness of that reliance is a foundational question affecting the credibility and authority of the expert's opinion.  (Mosesian v. Pennwalt Corp. (1987) 191 Cal.App.3d 851, 861, 236 Cal.Rptr. 778.)   Reasonableness generally affects the weight of the expert's testimony more than the admissibility of the opinion itself.  (Ibid.;  see Pfingsten v. Westenhaver (1952) 39 Cal.2d 12, 20, 244 P.2d 395.)   However, clearly unreasonable reliance may affect the admissibility of the expert's opinion.   (E.g., Isaacs v. Huntington Memorial Hospital (1985) 38 Cal.3d 112, 133–134, 211 Cal.Rptr. 356, 695 P.2d 653 [reliance on information obtained from an “unidentified contact in an unidentified police department”].)   The reasonableness of an expert's reliance on information made known to him by others depends upon the circumstances.  (Buckwalter v. Airline Training Center (1982) 134 Cal.App.3d 547, 553–554, 184 Cal.Rptr. 659.)   One of these circumstances is whether the expert has strayed outside his own area of expertise and does not have the knowledge, training and experience to evaluate the reliability of information obtained from others.  (Mosesian, supra, 191 Cal.App.3d at p. 862, 236 Cal.Rptr. 778.)

Since the trial court is in the best position to determine the question of reasonableness, it retains discretion on whether to admit the expert's opinion testimony.  (Board of Education v. Haas (1978) 82 Cal.App.3d 278, 282, 147 Cal.Rptr. 88;  Richard v. Scott, supra, 79 Cal.App.3d at pp. 63–64, 144 Cal.Rptr. 672.)   Its determination may not be disturbed except for an abuse of discretion.  (Hyatt v. Sierra Boat Co., supra, 79 Cal.App.3d at p. 339, 145 Cal.Rptr. 47;  Richard, supra, 79 Cal.App.3d at pp. 63–64, 144 Cal.Rptr. 672.)

 The question here is whether the trial court abused its discretion in allowing Dr. Rostvold to testify as to the information he obtained from Hoffman and Burnside regarding the general perception in the food industry about the effect on sales of a peaceful strike.   The two men were professionals in the retail grocery industry, involved in different ways with the operation of markets;  one had experience with a peaceful strike.   Dr. Rostvold was able to testify as to their experience, giving a basis upon which the reliability of their information could be judged.   Additionally, he was able to corroborate while they provided information outside of Dr. Rostvold's area of expertise, their information by his own statistical analysis using facts surrounding the strike at plaintiff Chino Farms Market.   Based on the foregoing, we conclude Dr. Rostvold's reliance on the information obtained from Hoffman and Burnside was not so clearly unreasonable as to render it an abuse of discretion to allow his opinion testimony;  any questions of reasonableness were properly left to the jury to decide when weighing Dr. Rostvold's credibility.

IV

Defendants additionally assert that the trial court committed reversible error by permitting the jury to hear irrelevant out-of-court declarations and inflammatory evidence.   Again, we disagree.

 Defendants point first to parts of Peter Vargas's testimony.   Vargas testified that a customer complained to him she was blocked by the strikers.   Defendants objected to this testimony as hearsay and irrelevant;  plaintiffs claimed it was not being offered for the truth of the matter stated but to show the incident was reported to Vargas.   The objections were overruled and Vargas testified that the customer said she was bumped by two male pickets and observed other customers bumped by them.

Vargas later attempted to testify about what one of his employees, Brent Felbob, reported that he observed.   Defendants again objected on hearsay grunds and made a continuing objection to such hearsay statements;  the trial court made a continuing ruling that such objections were overruled.   Vargas then testified that Felbob reported a picket was throwing a large bag of trash in front of the store.   The trial court later indicated this testimony was not hearsay but direct evidence.   Vargas then testified that customer Garry Riezebos reported to him that he saw striker Clara Bickley throw a bottle against the store entrance, and customer Ethel Martin told him she and her husband were walking into the store and two pickets told them, “ ‘We oughta roast you.’ ”

Hearsay evidence is “evidence of a statement that was made other than by a witness while testifying at the hearing and that is offered to prove the truth of the matter stated.”  (Evid.Code, § 1200, subd. (a).)  It is inadmissible except under certain circumstances not applicable here.  (Id. subd. (b)).  Evidence of another's out-of-court statement is not hearsay if it is not offered to prove the truth of the matter stated but to prove the recipient witness's state of mind, e.g., the witness's knowledge or belief.  (1 Witkin, Cal.Evidence, supra, § 596, p. 569.)   The statement may be admitted to prove the witness obtained information from the other person and, believing it to be true, acted in conformity with that belief.   In such a situation the trier of fact confronts no issue whether the other person accurately perceived the facts in the statement or related them to the witness.  (Jefferson, Synopsis of Cal.Evidence Law (1985) The Hearsay Rule, § 1.4, p. 21.)

Plaintiffs aver, inasmuch as Vargas's mental state was in issue due to his claim of intentional infliction of emotional distress, that the foregoing evidence was not hearsay but was properly admitted to show Vargas's state of mind.   The truth of the statements made to Vargas did not matter, in that a claim of intentional infliction of emotional distress may be based on false statements.

 The problem here is that the statements, whether true or false, were not made by defendants or their agents or employees, but by other people.   Defendants are not generally responsible for reactions to anything others say about them, but for reactions to what they themselves say or do, whether observed directly or related by others.   As defendants point out, in order to prove intentional infliction of emotional distress one must prove a causal connection between defendants' conduct and plaintiffs' emotional distress.   (Kiseskey v. Carpenters' Trust For So. California (1983) 144 Cal.App.3d 222, 229, 192 Cal.Rptr. 492.)

The relevance of Vargas's testimony depends upon the truth of the declarants' statements—that defendants actually did the things they were said to have done.   If they did these things, Vargas's learning of them helps to establish the chain of causation between defendants' conduct and his emotional distress.   If they did not do these things, Vargas's reaction to hearing about them does not help to establish any link between defendants' conduct and his emotional distress.

There was no evidence that defendants, their agents, or their employees actually did the things other people told Vargas they did.   Therefore, the statements in question, while ostensibly admitted to show Vargas's state of mind, in effect served as inadmissible hearsay to prove defendants did the things the declarants claimed;  this was the only way they would have been relevant.   Thus, the trial court erred in allowing Vargas to testify as to what the declarants told him.   However, we conclude the error was not prejudicial in view of the vast amount of other evidence that the pickets blocked customers, verbally assaulted them, and littered and vandalized the store premises.

 Vargas also was asked about allegations that Carl Smith solicited strikers Judy Cuthbertson Caro and Marie Braun Bartlett to firebomb Vargas's house and/or automobile.   Defendants objected to his testimony on the issue as being hearsay, without foundation, and prejudicial under Evidence Code section 352;  plaintiffs countered that the testimony was being offered to prove Vargas's state of mind, and the foundation was Caro's and Bartlett's testimony at Smith's criminal trial and in their depositions.   The trial court overruled the objections and allowed Vargas to testify that Caro and Bartlett told him they were offered money by Smith to firebomb Vargas's house and/or automobile.

Once again, this testimony without more was hearsay in that its relevance depended upon the truth of the matter asserted in the declarants' statements.   However, in view of the fact Caro herself later testified as to Smith's offer, any error in admitting it was harmless.

 Other challenged testimony is that of Captain Louis Moreno of the Chino Police Department.   He was asked whether he learned of problems at the Chino Farms Market during the strike, and replied that various people had told him they had been verbally assaulted as they walked into the market.   Defendants objected to this testimony as hearsay and irrelevant;  the trial court overruled the objections but reserved defendants' right to strike the testimony if “no connection is made.”   Captain Moreno was then asked whether the people who talked to him requested that he respond to their complaints.   Defendants objected that the question called for hearsay and the answer was irrelevant;  the objection was overruled, and Captain Moreno testified that the people asked him to stop the problems at the market.   He later volunteered that he had received information about the situation from other patrol people.   Defendants objected that there was no question pending and the testimony was hearsay;  plaintiffs' counsel responded by asking Captain Moreno whether he had heard about problems at the market from other sources, and asked what he had heard.   Defendants objected on the grounds of hearsay and relevance;  the trial court sustained the objection as to what Captain Moreno heard but allowed questioning about whether the captain did anything on the basis of what he heard.   Captain Moreno then testified as to what he did with respect to the situation at the market.

Captain Moreno's testimony about what he was told served as a foundation for his later testimony concerning his actions in response to what he heard;  the truth of what he was told was not actually in issue.   Therefore, his testimony was not hearsay.  (Jefferson, op. cit. supra, at p. 21;  cf. People v. King (1956) 140 Cal.App.2d 1, 5, 294 P.2d 972.)

 Finally, defendants object to a portion of Jesse Gonzales's testimony regarding a letter to Jack Loveall of the international union signed by him, Smith and others.   Gonzales was being questioned about relationships among various people involved with defendant Local 1428 and was asked specifically whether he recalled testifying in a deposition that he knew of no disputes between Larry Sooter and Smith.   When he said he did not, plaintiffs sought to introduce evidence of the letter;  defendants objected on the grounds of relevance and of prejudice under Evidence Code section 352.   The trial court allowed plaintiffs' counsel to ask Gonzales whether he recalled certain statements made and, if he did not, to use the letter to refresh his recollection.

Gonzales was asked whether he recalled Sooter telling him that if he had problems with anybody Sooter would have them “snuffed.”   Gonzales said he recalled this, but Sooter made the statement “kiddingly.”   Plaintiffs' counsel then brought out the letter, which discussed problems at Local 1428, and read portions of it.   The letter stated:  “ ‘The rape of the Local 1428 membership continues and the day of destruction is fast approaching unless some type of action is taken immediately,’ ” and “ ‘[Local president Ira Van Valkenberg] was never and still is not executive officer material, and may God help our members if Larry Sooter ever becomes president of the Local Union 1428.’ ”   The letter also included allegations regarding Sooter but did not explain that Sooter was kidding when he made certain statements.   Gonzales, attempting to explain this, testified that he took the things Sooter said seriously even though they were said kiddingly.

Defendants contend that the contents of the letter were part of the “robust language and clash of strong personalities” protected by federal labor law (Farmer v. Carpenters (1977) 430 U.S. 290, 305–306, 97 S.Ct. 1056, 1066, 51 L.Ed.2d 338), and had no relation to the violence or threats of violence for which defendants could be held accountable to plaintiffs, but that they could have influenced the jury nonetheless.   The letter was used to impeach Gonzales's testimony regarding relationships among various union officials and the seriousness of Sooter's statements.   For this purpose, it was admissible as a prior inconsistent statement.  (Evid.Code, §§ 770, 1235.)   Further, it is unlikely that evidence of intra-union disagreement over the running of the union could have prejudiced the jury against the union;  it was not particularly inflammatory, since it did not refer to any violence or misconduct.   Hence, there was no error in admitting the portions of the letter.

V

 Finally, defendants contend that the punitive damages award must be reversed, in that federal labor law preempts this area and does not permit such awards against labor unions.   The contention lacks merit.

Defendants make two lines of attack on award of punitive damages against the union.   First, they point out that the United States Supreme Court allows the states to “grant compensation” under state tort laws for violent conduct by unions (Mine Workers v. Gibbs, supra, 383 U.S. 715, 721, 86 S.Ct. 1130, 1136), and “[p]unitive damages ‘are not compensation for injury [but] are private fines levied by civil juries to punish reprehensible conduct and to deter its future occurrence’ ” (Electrical Workers v. Foust (1979) 442 U.S. 42, 48, 99 S.Ct. 2121, 2125, 60 L.Ed.2d 698).   Thus, defendants argue, state courts have no jurisdiction to award punitive damages since their jurisdiction is limited to “compensation.”

Second, relying primarily on Foust, defendants argue that allowing punitive damages would undermine the federal labor relations scheme.   In Foust, the issue was whether the Railway Labor Act (45 U.S.C. § 151 et seq.) permitted an employee to recover punitive damages for the union's breach of its duty of fair representation.  (Id. at p. 43, 99 S.Ct. at p. 2123.)   The court noted that while allowing punitive damages would encourage the union to provide fair representation and union members to bring unfair representation actions, consistent with federal policy, “offsetting these potential benefits is the possibility that punitive awards could impair the financial stability of unions and unsettle the careful balance of individual and collective interests which this Court has previously articulated in the unfair representation area.”   (Id. at p. 48, 99 S.Ct. at p. 2126.)   The court further noted that juries have broad discretion as to the imposition and amount of punitive damages, and the impact of such awards is potentially substantial;  it could deplete union treasuries and impair the union's effectiveness and the interests of other union members.  (Id. at pp. 50–51, 99 S.Ct. at pp. 2126–2127.)   Mindful of the foregoing, as well as the “ ‘essentially remedial’ ” objectives of federal labor law and the Railway Labor Act, the general labor policy disfavoring punishment and the lack of congressional intent to allow punitive damages under the Act, the court held they were not allowed in suits under the Act.  (Id. at p. 52, 99 S.Ct. at p. 2127.)

However, plaintiffs' suit here, while it involves a labor union and labor dispute, was not brought under labor law.   It was brought under state tort law which allows awards of punitive damages for certain types of wrongs.   Thus, Foust is inapposite.   While it is true an award of punitive damages has the potential for a substantial impact on the union's treasury and therefore its effectiveness in representing its members, the United States Supreme Court has allowed such awards where warranted by the union's behavior.  (Automobile Workers v. Russell, supra, 356 U.S. 634, 646, 78 S.Ct. 932, 939;  United Workers v. Laburnum Corp., supra, 347 U.S. 656, 657–658, 669, 74 S.Ct. 833, 834, 840.)   California law also permits punitive damage awards against a labor union in appropriate circumstances.  (See J.R. Norton Co. v. General Teamsters, Warehousemen & Helpers Union, Local 890, supra, 208 Cal.App.3d 430, 443–445, 256 Cal.Rptr. 246.)   Accordingly, federal labor law did not preempt or prohibit the award of punitive damages.

DISPOSITION

The judgment is affirmed.

While I concur in the majority's holdings in parts I, III, IV and V, ante, I respectfully dissent as to the holding in part II, ante.   I would agree with defendants the trial court erred in failing to instruct the jury the union could be held vicariously liable for the tort only upon clear proof of its actual responsibility for violence or threats of violence.

As the majority points out, a union may not be held liable for the acts of its members involved in a labor dispute unless it actually authorized, participated in or ratified the use of violence or threats of violence which injured the plaintiff.  (In re Coleman (1974) 12 Cal.3d 568, 573, 116 Cal.Rptr. 381, 526 P.2d 533;  see Mine Workers v. Gibbs (1966) 383 U.S. 715, 733–735, 86 S.Ct. 1130, 1142–1144, 16 L.Ed.2d 218.)   Plaintiffs do not challenge the application of this rule to the instant case but try to expand the scope of the conduct amenable to state regulation.   They cite San Diego Unions v. Garmon (1959) 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775, a pre-Gibbs case, which allows state tort compensation for conduct “marked by violence and eminent threats to the public order” (at p. 247, 79 S.Ct. at p. 781).   They also cite United Workers v. Laburnum Corp. (1954) 347 U.S. 656, 74 S.Ct. 833, 98 L.Ed. 1025, another pre-Gibbs case, as affirming a judgment awarding damages for “tortious conduct that was also characterized as ‘unlawful.’ ”   However, Laburnum merely said the Labor Management Relations Act did not expressly relieve unions from liability for “unlawful conduct.”  (347 U.S. at p. 666, 74 S.Ct. at p. 839.)   The case itself clearly involved violence and threats of violence.  (Id. at pp. 657–658, 74 S.Ct. at p. 834.)

Plaintiffs also cite cases which characterize mass picketing and certain language as threatening violence or likely to provoke violence (Youngdahl v. Rainfair, Inc. (1957) 355 U.S. 131, 138, 78 S.Ct. 206, 211, 2 L.Ed.2d 151;  Rainbow Tours v. Hawaii Joint Council (9th Cir.1983) 704 F.2d 1443, 1447).   These cases simply illustrate when conduct falls within the “violence and threats of violence” which Gibbs holds is the proper basis for a state-law action;  they do not expand that proper basis.

Gibbs also discusses the standard of proof by which a union may be held liable for the acts of others involved in a labor dispute.  Gibbs points out section 6 of the Norris–LaGuardia Act (29 U.S.C. § 106) imposes a special burden of proof on those seeking to hold a labor organization liable for the acts of others.  (383 U.S. at p. 735, 86 S.Ct. at p. 1143.)   That section provides:  “No officer or member of any association or organization, and no association or organization participating or interested in a labor dispute, shall be held responsible or liable in any court of the United States for the individual acts of individual officers, members, or agents, except upon clear proof of actual participation in, or actual authorization of, such acts, or ratification of such acts after actual knowledge thereof.”  (Emphasis added.)   Defendant claimed section 6 applied to state-law claims adjudicated in federal court and the court agreed.  (Gibbs, supra, 383 U.S. at p. 735, 86 S.Ct. at p. 1143.)

The court noted it held in Brotherhood of Carpenters v. U.S. (1947) 330 U.S. 395, 403, 67 S.Ct. 775, 780, 91 L.Ed. 973:  “ ‘whether § 6 should be called a rule of evidence or one that changes the substantive law of agency ․ its purpose and effect was to relieve organizations ․ and members of those organizations from liability for damages or imputation of guilt for lawless acts done in labor disputes by some individual officers or members of the organization, without clear proof that the organization or member charged with responsibility for the offense actually participated, gave prior authorization, or ratified such acts after actual knowledge of their perpetration.’ ”  (383 U.S. at p. 736, 86 S.Ct. at p. 1144.)   Shortly thereafter the Labor Management Relations Act was passed which expressly provided, for the purposes of that statute, the responsibility of a union for acts of its members is judged by ordinary principles of agency, not the more stringent standards of section 6.   (Ibid.)  But section 6 remained applicable to state law claims, which was not surprising since punitive damages may be recovered on state claims and the driving force behind section 6 was the fear unions could be destroyed if held liable for damage caused by acts beyond their control.  (Id. at pp. 736–737, 86 S.Ct. at pp. 1144–1145.)   The “clear proof” required by section 6 is the equivalent of “ ‘clear, unequivocal, and convincing proof.’ ”  (Id. at p. 737, 86 S.Ct. at p. 1144.)

Section 6 of the Norris–LaGuardia Act, by its terms, applies only to federal courts.  (McCarroll v. L.A. County etc. Carpenters (1957) 49 Cal.2d 45, 63, 315 P.2d 322.)   It applies even when the federal courts are adjudicating state-law claims.  (Gibbs, supra, 383 U.S. at p. 735, 86 S.Ct. at p. 1143.)   The question, then, is whether it applies to state courts adjudicating state-law claims.

Until recently, there has been no California authority on point, but other courts had addressed the issue.   Michigan has held section 6 applicable to state-law claims in state court, based upon the policy underlying its enactment.  (Sowels v. Laborers' Intern. Union of N. Am. (1981) 112 Mich.App. 616, 317 N.W.2d 195, 196–197.)   Louisiana has applied section 6 to state-law claims.  (Coates v. Loc. 270 of Int. Bro. of Teamsters (La.App. 4 Cir.1984) 449 So.2d 662, 663–664;  Melancon v. United Ass'n of Journeymen (La.App.1980) 386 So.2d 669, 670.)   Kansas, while holding section 6 does not apply to the states, nonetheless adopted section 6's standard of proof for the purposes of consistency with the federal courts and conformity with congressional intent.  (Hiestand v. Amalgamated Meatcutters, etc. (1983) 233 Kan. 759, 666 P.2d 671, 675.)   The Hiestand court opined:  “Consistency between our state and federal courts would be obtained by adopting the clear proof standard of § 6.   The United States Supreme Court in Mine Workers v. Gibbs, [supra,] 383 U.S. at 737 [86 S.Ct. at p. 1144] ․ held 29 U.S.C. § 106 applied to federal court adjudications of state tort claims arising out of labor disputes.   Forum shopping would not loom as a possibility.   Plaintiffs would have no reason to commence actions in state courts attempting to avoid the clear proof standard of federal courts thereby bypassing Congressional intent.   Defendant unions would have no reason to attempt removal to federal courts in an effort to obtain the added protection of the clear proof standard.   In addition, consistency in the state and federal courts regarding the burden of proof would eliminate the injustice to those litigants having no right to federal jurisdiction.   One may prevail in the state system but fail in the federal system under the same factual situation due to different burdens of proof required.”  (666 P.2d at p. 675.)

As previously mentioned, the California Supreme Court already has held in McCarroll v. L.A. County etc. Carpenters, supra, 49 Cal.2d at page 63, 315 P.2d 322 that section 6 by its terms applies to the federal courts only, but it did not address the standard of proof issue.   The Legislature has not enacted, as have other state legislatures, its own version of section 6.   Plaintiffs therefore “respectfully submit that this Court should not act as a judicial substitute for the State Legislature” by adopting the clear proof standard set out in section 6.

However, the courts sometimes do adopt the clear and convincing evidence standard in the absence of a legislative pronouncement on the issue.   In Lillian F. v. Superior Court (1984) 160 Cal.App.3d 314, 206 Cal.Rptr. 603, the court addressed the question as to the standard of proof to apply in hearings under Welfare and Institutions Code section 5326.7, subdivisions (f) and (g), to determine whether convulsive treatment may be administered to an involuntarily-committed mental patient.   The court observed:  “Evidence Code section 115 provides in relevant part that ‘[e]xcept as otherwise provided by law, the burden of proof requires proof by a preponderance of the evidence.’  Evidence Code section 160, however, specifies that ‘law’ includes decisional and constitutional as well as statutory law.  Evidence Code section 115 also specifies three different burdens of proof:  1) proof beyond a reasonable doubt;  2) proof by clear and convincing evidence;  and 3) proof by a preponderance of the evidence.”  (160 Cal.App.3d at p. 320, 206 Cal.Rptr. 603.)   The purpose of the standard of proof “ ‘is to “instruct the factfinder concerning the degree of confidence our society thinks he should have in the correctness of factual conclusions for a particular type of adjudication.”  [Citation.]  The standard serves to allocate the risk of error between the litigants and to indicate the relative importance attached to the ultimate decision.’ ”  (Id. at p. 322, 206 Cal.Rptr. 603.)

To determine the correct standard of proof, the court considered the nature and purpose of the proceeding at issue and the interests involved and, balancing the state's interest in obtaining appropriate treatment for the patient with the patient's right not to have such a drastic procedure forced on her, the court concluded the clear and convincing evidence standard should be applied in the proceedings at issue.  (Id. at pp. 321, 323, 206 Cal.Rptr. 603;  see also, e.g., In re Angelia P. (1981) 28 Cal.3d 908, 915–922, 171 Cal.Rptr. 637, 623 P.2d 198 [clear and convincing evidence standard applied to proceedings under Civil Code section 232, subdivision (a), to free a minor child from parental custody];  People ex rel. Cooper v. Mitchell Brothers' Santa Ana Theater (1982) 128 Cal.App.3d 937, 940, 180 Cal.Rptr. 728 [applied to proof of obscenity in public nuisance abatement action];  Conservatorship of Sanderson (1980) 106 Cal.App.3d 611, 618–620, 165 Cal.Rptr. 217 [applied to conservatorship proceedings under Probate Code].)

As the foregoing cases demonstrate, this court may adopt the higher standard of proof—by clear and convincing evidence—where warranted in the absence of a legislative enactment to that effect.   In my view, the propriety of adopting the higher standard of proof is supported by Congress' determination such a standard of proof should apply in federal court adjudications of state-law claims in order to protect unions from potential destruction through compensatory and punitive damage awards based upon acts beyond their control (Mine Workers v. Gibbs, supra, 383 U.S. at pp. 736–737, 86 S.Ct. at pp. 1144–1145).   Adoption of the higher standard of proof also is justified to combat the tendency to blame unions for everything occurring during a strike, whether authorized or ratified or not (Ramsey v. Mine Workers (1971) 401 U.S. 302, 310, 91 S.Ct. 658, 663, 28 L.Ed.2d 64) and to prevent forum-shopping for the most favorable standard of proof (Hiestand v. Amalgamated Meatcutters, etc., supra, 666 P.2d at p. 675).

The question whether the higher standard of proof should be adopted has recently been addressed by J.R. Norton Co. v. General Teamsters, Warehousemen & Helpers Union, Local 890 (1989) 208 Cal.App.3d 430, 256 Cal.Rptr. 246, review denied May 18, 1989.  J.R. Norton Co., as does the instant case, involved a labor dispute and the contention “section 6 preempts state agency liability and preponderance-of-evidence standards.”  (At p. 437, 256 Cal.Rptr. 246.)   In discussing the issue, the court first notes the enactment of section 6 was motivated by “ ‘the fear that unions might be destroyed if they could be held liable for damage done by acts beyond their practical control.’ ”  (Id. at p. 439, 256 Cal.Rptr. 246, quoting from Mine Workers v. Gibbs, supra, 383 U.S. at pp. 736–737, 86 S.Ct. at pp. 1144–1145.)   However, “Congress did not intend to shield unions from all liability for wrongdoing” and did not intend that the stringent standards of section 6 be applied in all situations.  (J.R. Norton Co., supra, 208 Cal.App.3d at p. 439, 256 Cal.Rptr. 246.)   Neither did Congress intend to preclude all state court tort actions.  (Id. at p. 440, 256 Cal.Rptr. 246.)   This means different rights and remedies will exist in different jurisdictions.   (Ibid.)

The court then discusses the application of section 6 in various states, noting six states have applied section 6 to tort claims in their courts and three have declined to do so.  (Id. at pp. 440–441, 256 Cal.Rptr. 246.)   It points out our Supreme Court in McCarroll v. L.A. County etc. Carpenters, supra, 49 Cal.2d 45, 315 P.2d 322 held the Norris–LaGuardia Act did not limit the state courts' remedial power.  (208 Cal.App.3d at p. 441, 256 Cal.Rptr. 246.)   Defendant nonetheless “urge[d] the court to apply the strict federal standard in state tort cases on the ground that California follows federal labor law in many respects and that California labor policy and federal labor policy are identical.”  (Ibid.)

The court acknowledges California has adopted federal labor law in part.   (Ibid.)  In 1975 the Legislature enacted the Agricultural Labor Relations Act (Lab.Code, § 1140 et seq.) based on the National Labor Relations Act (29 U.S.C. § 151 et seq.).   It also enacted the Moscone Act (Code Civ.Proc., § 527.3), patterned after section 4 of the Norris–LaGuardia Act (29 U.S.C. § 104).  (208 Cal.App.3d at pp. 441–442, 256 Cal.Rptr. 246.)

But, the court observes, when the Legislature adopted section 4 of the Norris–LaGuardia Act, it did not adopt section 6, even though the stated purpose of the Moscone Act was similar to that of the Norris–LaGuardia Act.  (Id. at p. 442, 256 Cal.Rptr. 246.)   In the court's opinion, “[t]his choice on the part of the Legislature cannot be considered to be inadvertent,” and it concludes the Legislature's failure to enact section 6 meant it intended to follow preexisting California law.  (Id. at pp. 442–443, 256 Cal.Rptr. 246.)   It therefore holds section 6 does not preempt California law.  (Id. at p. 443, 256 Cal.Rptr. 246.)

I am unpersuaded by the J.R. Norton Co. opinion for several reasons.   First, the opinion does not make clear the specific limitations as well as requirements of section 6.   It is true the section is limited in scope:  it applies only to state law claims in federal courts (Mine Workers v. Gibbs, supra, 383 U.S. at pp. 736–737, 86 S.Ct. at pp. 1144–1145), and only when it is sought to hold union or employer liable for the acts of others during the course of a labor dispute (Ramsey v. Mine Workers, supra, 401 U.S. at p. 310, 91 S.Ct. at p. 663).   But in all federal cases where it is applicable, it must be applied to require clear proof the organization participated in, authorized or ratified the acts before the organization may be held liable.   (Id. at pp. 310–311, 91 S.Ct. at pp. 663–664.)   Different standards of proof only apply to different issues or types of cases.  (Id. at p. 309, 91 S.Ct. at p. 663.)

More importantly, the crux of the opinion is the court's conclusion the Legislature's failure to enact the provisions of section 6 when it enacted the provisions of section 4 was a deliberate choice not to adopt section 6.   (J.R. Norton Co., supra, 208 Cal.App.3d at p. 442, 256 Cal.Rptr. 246.)   In support of this conclusion, the court cites the principle:  “The omission of a provision contained in a foreign statute providing the model for action by the Legislature is a strong indication that the Legislature did not intend to import such provision into the state statute.”  (Ibid., citing 73 Am.Jur.2d, Statutes, § 334, p. 478.)

However, there is also a “general rule that the intent of the legislature is indicated by its action, and not by its failure to act.”  (Id., § 169, p. 372, fn. omitted.)   In accordance with this principle, it has been held, for example, evidence of unpassed bills has little value in determining legislative intent.  (Miles v. Workers' Comp. Appeals Bd. (1977) 67 Cal.App.3d 243, 248, fn. 4, 136 Cal.Rptr. 508;  see also 58 Cal.Jur.3d, Statutes, § 162, pp. 564–565.)

Moreover, the legislative history of Code of Civil Procedure section 527.3, the Moscone Act patterned after section 4 of the Norris–LaGuardia Act, which has been provided to this court by defendants, does not reveal any intent to reject section 6;  rather, it reveals an intent to deal with one specific problem—the issuance of injunctions during labor disputes—by adoption of provisions similar to those in section 4.   Section 6 does not deal with this problem.

In determining legislative intent, which is a primary guide in construing a statute (California Teachers Assn. v. San Diego Community College Dist. (1981) 28 Cal.3d 692, 698, 170 Cal.Rptr. 817, 621 P.2d 856), the court may rely on extrinsic aids such as legislative committee reports, which are presumed to express legislative intent (Southland Mechanical Constructors Corp. v. Nixen (1981) 119 Cal.App.3d 417, 427, 173 Cal.Rptr. 917).   The Senate Committee on Judiciary report on Senate Bill 743, the Moscone Act, as introduced, indicates the bill would prohibit issuance of restraining orders or injunctions which prohibit the enumerated activities.   It states the purpose of the bill is to “[p]rotect the rights of workers engaged in collective bargaining, picketing, or other mutual aid from interference by the courts with the normal processes of dispute resolution between employers and recognized employee organizations.”   It comments the bill is patterned after the Norris–LaGuardia Act and the “so-called ‘Little Norris–La Guardia Acts' enacted by at least ten states․  However, the ‘Little Norris La Guardia Acts [sic ]’ are much broader than this bill.   In addition to prohibiting injunctions against leafleting and picketing, they generally severely restrict the right to obtain an injunction against any labor-related activity, and prescribe substantial procedural requirements in addition to those normally applicable in proceedings for injunctive relief.   Compared to those statutes, this bill is quite limited in its scope.  [¶]  This bill appears to do little more than to codify existing constitutional case law concerning the First Amendment rights of workers.”

The Senate Republican Caucus Third Reading analysis of the bill points out the proponents of the bill contend “superior court judges routinely issue injunctive relief against labor activities whenever the threat of conflict is present, without giving due regard to the decisions of the United States Supreme Court invalidating such decrees.   The right to appeal these decrees, even when a reversal is certain, is of little value, according to the proponents, since time is crucial in labor disputes, and a timely review on appeal is virtually impossible.”

The Senate Democratic Caucus Third Reading analysis and the Assembly Committee on Labor Relations report express similar views to the two foregoing documents.   The Assembly Third Reading analysis prepared by the Assembly Republican Caucus notes Senator Moscone states the bill is an attempt to codify present case law which is being ignored by many judges.

The Assembly Third Reading analysis, prepared by the Assembly Office of Research, comments:  “According to the Assembly Labor Relations Committee analysis, labor unions have long held that injunctions and temporary restraining orders issued by superior courts to restrict pieketing [sic ] and other strike activity constitute an unfair infringement of a union's conduct in a labor dispute.   The ability of an employer or a law enforcement agency to obtain a court order which restricts the number and location of pickets during a strike can so seriously hamper a union's effort that the effect of the strike is negated or prolonged unreasonably.   The committee analysis advises there may also be validity to the argument that injunctions and temporary restraining orders may in fact increase the likelihood of violence in labor disputes rather than minimize it, as employers and some law enforcement agencies have contended.

“This measure provides restraints on the courts' power to issue prohibitory injunctions and orders on a considerably narrower basis than those contained in the Norris–LaGuardia Act.   Protected activities are specifically limited to peaceful picketing, assembly, and dissemination of information.   The committee analysis also notes that in large part, the right to engage in these activities is guaranteed under the First Amendment of the Constitution.”

The foregoing legislative history reveals the intent to deal with one specific problem—the interference of the courts in labor disputes by issuing restraining orders and injunctions—and to codify existing constitutional law with respect to the First Amendment rights of the workers in such situations.   Section 4 of the Norris–LaGuardia Act addresses this issue;  section 6 does not.   This leads ineluctably to the conclusion the Legislature in enacting the Moscone Act did not intend to reject section 6;  it did not consider the matter at all.

This being the case, the basic foundation on which J.R. Norton Co. rests is faulty, and I would decline to follow the case.   Based on the reasons previously stated, I would adopt the higher standard of proof to conform with section 6.

Turning now to the issue at hand, the propriety of the jury instructions, defendants contend the instructions misstated the basis on which the union could be held liable for interference with plaintiff Chino Farms Market's business relations.   The court, on its own motion, gave the following version of BAJI No. 2.60, delineating plaintiff's burden of proof:  “In order to recover for intentional interference with business relations, Plaintiff CHINO FARMS INCORPORATED has the burden of proving by a preponderance of the evidence all of the following:  [¶] 1. That there was an economic relationship between Plaintiff and its customers and that this relationship was likely to produce future economic benefits to Plaintiff;  [¶] 2. That Defendants knew of that relationship;  [¶] 3. That the Defendants intentionally committed unlawful acts that were designed to disrupt the relationship;  [¶]  4. That the Defendants' intentional unlawful acts were the proximate cause of the disruption of the economic relationship;  and, [¶] 5. That Plaintiff suffered damages caused by the disruption of the relationship.”   This instruction erroneously allowed the jury to find defendant union liable for the acts of others by a preponderance of the evidence, and to find the union liable even when those acts were merely unlawful and not necessarily violent or threatening violence.

Plaintiffs' special instructions numbers 13 and 14 compounded the problem, referring to defendants' “unlawful” conduct when discussing intent and causation.   Plaintiffs' special instruction number 10 described the conduct upon which liability could be based;  it included conduct which was unlawful but clearly not violent or threatening violence:  “Plaintiff, Chino Farms, Inc., may recover damages proximately caused by defendants [sic ] interference with prospective business advantage where the right to pursue a lawful business was intentionally interfered with by any of the following:  by employing more pickets on plaintiffs [sic ] premises than allowed by court order[;]  by obstructing, blocking or hindering ingress or egress of plaintiffs' customers;  by obstructing, hindering, stopping, slowing or interfering with the movement of vehicles owned by plaintiffs' customers;  threatening and/or committing acts of intimidation and/or physical violence against plaintiffs' business property, officers, customers, patrons or others desiring to do business with plaintiff, or by the filing of groundless civil lawsuits.”

As to the union's liability for the acts of others, the court instructed, on its own motion:  “If you find that union officials, agents, members and/or employees, both named and unnamed, planned and carried out any unlawful acts, then the union itself must be held accountable.”  (Emphasis added.)   The court also gave instructions on general principles of agency:  “One is an agent of another person called a ‘principal’ at a given time if he is authorized to act for or in place of such person.   One may be an agent although he receives no payment for his services.   For the purposes of this trial, the term ‘agent’ includes servants and employees and the term ‘principal’ includes employers.”   (BAJI No. 13.00.)  “It is not necessary that a particular act or failure to act be expressly authorized by the principal to bring it within the scope of the agent's authority or employment.   Such conduct is within the scope of his authority [or] employment if it occurs while the agent is engaged in the duties which he was employed to perform and relates to those duties.   Conduct for the benefit of the principal which is incidental to, customarily connected with or reasonably necessary for the performance of an authorized act is within the scope of the agent's authority [or] employment.”  (BAJI No. 13.01.)   These instructions allowed the jury to find union liability for acts not actually authorized, participated in or ratified by the union.   And, as with the other instructions, union liability was extended to “unlawful acts” rather than violence or threats of violence.

Plaintiffs contend defendants waived any objections to these instructions.   Although the proceedings at which the jury instructions were discussed were not recorded, there is a record of those instructions which were refused or withdrawn.   Some of those requested by defendant, which set forth the proper standard of proof and bases for liability, were withdrawn;  based on this, plaintiffs claim waiver.

However, the reason for withdrawing the instructions is not shown by the record, and there are other instructions, refused by the court, which cover the same topics.   Defendants' special instruction number 1 provided in pertinent part:  “[I]n order to recover damages from defendant Union, plaintiff Chino Farms Market has the burden of proving by clear, convincing and unequivocal evidence that defendant Union authorized or ratified such wrongful conduct by defendant Gonzales, or by any agent, officer, or employee.”

Defendants' special instruction number 2 stated:  “The activity of unions and their members in the course of strike and picketing activity is generally afforded the protection of law as an expression of the constitutional right of freedom of speech and assembly and under state and federal statutes favoring collective bargaining.   Only acts of violence, threats of violence, intimidation, and physical interoference [sic ] with the coming and going into the premises is a basis for recovery in this action.   Because ‘intimidation’ is an inherently subjective and ambiguous term, I instruct you further on the permissible and impermissible forms of verbal expression by picketers during a strike.”   However, the court modified this instruction by striking everything after the word ‘assembly,’ i.e., everything referring to violence and threats of violence.

After the court refused defendants' special instruction number 1 and modified number 2, there was no reason for defendants not to withdraw other instructions which they then knew would be unacceptable to the court.   Having proposed correct instructions, their objection to the incorrect instructions given was preserved.  (See Code Civ.Proc., § 647;  7 Witkin, Cal.Procedure (3d ed. 1985) Trial, § 242, p. 248.)   Moreover, waiver must be clear and unequivocal, not open to speculation or doubt.  (City of Ukiah v. Fones (1966) 64 Cal.2d 104, 107–108, 48 Cal.Rptr. 865, 410 P.2d 369;  Harper v. Kaiser Cement Corp. (1983) 144 Cal.App.3d 616, 619, 192 Cal.Rptr. 720.)   The record before the court contains no clear and unequivocal evidence of waiver.

Since the instructions given were erroneous, it must be determined whether they were prejudicial.   Instructional error requires reversal where the erroneous instructions were likely to mislead the jury and thus become a factor in the verdict.  (Searle v. Allstate Life Ins. Co. (1985) 38 Cal.3d 425, 439, 212 Cal.Rptr. 466, 696 P.2d 1308;  Henderson v. Harnischfeger Corp. (1974) 12 Cal.3d 663, 670, 117 Cal.Rptr. 1, 527 P.2d 353.)

The instructions given allowed the jury to find the union liable for conduct for which it could not be held liable—that not involving violence or threats of violence and that not actually authorized or ratified by the union.   There was evidence of acts which, although unlawful, were not necessarily violent or threatening violence.   Such acts included violations of the preliminary injunction as to number and location of picketers, defacing the market with graffiti, thrown food and other objects, littering on market premises, putting horse manure by the door of the market, insulting customers and subjecting them to foul language.   There also was conflicting evidence as to what acts strike captain Jesse Gonzales and union business agent Carl Smith were aware of, not to mention authorized or ratified.¹  Compounding the problem was the instruction lowering the standard of proof, making it easier for the jury to find authorization or ratification in the face of conflicting evidence.   I would conclude the instructions given were quite likely to have misled the jury and become a factor in the verdict, making the instructional error prejudicial and requiring reversal of the verdicts in favor of plaintiff Chino Farms Market and against defendant union.²

Although defendants do not raise the issue, I would address sua sponte the question whether the same infirmities which affect the market's award against the union also affect the awards to Vargas and Henderson for intentional infliction of emotional distress by the union.   Again, the higher burden of proof was not applied and the instructions covered only ordinary principles of agency.

A state-law action for intentional infliction of emotional distress in the context of a labor dispute may be maintained against a union where based on outrageous conduct.  (Farmer v. Carpenters (1977) 430 U.S. 290, 301–306, 97 S.Ct. 1056, 1064–1066, 51 L.Ed.2d 338.)   As previously discussed, as a matter of federal policy, the union may not be held liable for such conduct unless it actually participated in, authorized or ratified such conduct.  (29 U.S.C. § 106;  see Mine Workers v. Gibbs, supra, 383 U.S. at pp. 733–735, 86 S.Ct. at pp. 1142–1144.)   Additionally, there must be clear proof of the union's participation, authorization or ratification.  (29 U.S.C. § 106;  Gibbs, supra, at pp. 736–737, 86 S.Ct. at pp. 1144–1145.)   In conformity with this policy, and for the sake of consistency with the federal courts, these rules must apply to a state court action for intentional infliction of emotional distress.  (Cf. Hiestand v. Amalgamated Meatcutters, etc., supra, 666 P.2d at p. 675.)   They were not applied here, and this was error.   For the reasons previously discussed, I would hold the error was prejudicial and requires reversal of the verdicts in favor of plaintiffs Vargas and Henderson and against defendant union as well.

FOOTNOTES

1.   The trial court delivered the following jury instruction, based on BAJI No. 2.60:  “In order to recover for intentional interference with business relations, Plaintiff CHINO FARMS INCORPORATED has the burden of proving by a preponderance of the evidence all of the following:  1. That there was an economic relationship between Plaintiff and its customers and that this relationship was likely to produce future economic benefits to Plaintiff;  2. That defendants knew of that relationship;  3. That the defendants intentionally committed unlawful acts that were designed to disrupt the relationship;  4. That the Defendants' intentional unlawful acts were the proximate cause of the disruption of the economic relationship;  and 5. That Plaintiff suffered damages caused by the disruption of the relationship.”   The trial court also instructed the jury that “[i]f you find that union officials, agents, members and/or employees, both named and unnamed, planned and carried out any unlawful acts, then the union itself must be held accountable.”

2.   The instruction based on BAJI No. 2.60 has been quoted, supra, in footnote 1.   The instruction based on Seaman's Direct Buying Service, Inc. v. Standard Oil Co. (1984) 36 Cal.3d 752, 765–768, 206 Cal.Rptr. 354, 686 P.2d 1158, and Buckaloo v. Johnson (1975) 14 Cal.3d 815, 827, 122 Cal.Rptr. 745, 537 P.2d 865, read as follows:  “One of the essential elements that plaintiff Chino Farms, Inc., must prove to succeed on its claim for intentional interference with prospective economic relationship is that defendants intended to unlawfully interfere with plaintiff's economic relationship with plaintiff's customers.   To prove this intent, plaintiff must show that defendants' unlawful acts were designed to disrupt the relationship.   However, if you find that defendants were substantially certain that their unlawful conduct would interfere with plaintiff's prospective economic advantage, you may infer from that fact that defendants intended to cause the disruption.”   The instruction based on Fifield Manor v. Finston (1960) 54 Cal.2d 632, 7 Cal.Rptr. 377, 354 P.2d 1073, and Lipman v. Brisbane Elementary Sch. Dist. (1961) 55 Cal.2d 224, 232, 11 Cal.Rptr. 97, 359 P.2d 465, read as follows:  “Another essential element that plaintiff Chino Farms, Inc., must establish to prevail on a claim for intentional interference is the actual disruption of the economic relationship between plaintiff and its customers.   To establish this element, plaintiff must prove that defendants' unlawful conduct either prevented plaintiff from continuing on with its relationship with its customers and/or made plaintiff's continuance of that relationship more burdensome or expensive.”   The defendant union also objects on appeal to the following instruction:  “Plaintiff, Chino Farms, Inc., may recover damages proximately caused by defendants interference with prospective business advantage where the right to pursue a lawful business was intentionally interfered with by any of the following:  by employing more pickets on plaintiff's premises than allowed by court order;  by obstructing, blocking or hindering ingress or egress or plaintiff's customers;  by obstructing, hindering, stopping, slowing or interfering with the movement of vehicles owned by plaintiff's customers;  threatening and/or committing acts of intimidation and/or physical violence against plaintiff's business, property, officers, customers, patrons or others desiring to do business with plaintiff, or by the filing of groundless civil lawsuits.”

1.   For example, Gonzales testified he did not see pickets block the traffic flow into the store;  he knew nothing about the damages to the delivery truck, baled cardboard, sump pump or Vargas' sprinkler system;  as far as he knew, the pickets did not throw trash in front of the market or paint graffiti on the walls.   He denied giving Valdez nails to spread on the parking lot.Smith testified he instructed the pickets to obey the TRO and preliminary injunction;  he never instructed them to commit acts of violence or vandalism, saw them commit such acts or committed such acts himself.   He denied offering Caro and Bartlett money to firebomb Vargas' house or automobile.

2.   It might be noted the jury based its damage award figure on the testimony of Dr. Rostvald.   He testified that 20 percent of the total loss to the market was attributable to the strike itself, while the remainder of the loss was attributable to the “violent and interfering” elements of the strike.   His figure for total losses less 20 percent was the one chosen by the jury as the damage award.   However, this does not render the instructional error harmless.   Dr. Rostvald's definition of “violent and interfering” included such activity as vandalism to the market premises, all verbal interaction between picketers and customers, and the presence of police vehicles on the market parking lot.   A peaceful, noninterfering strike was defined as simply picketers walking back and forth near the market.   Dr. Rostvald's definition of violence was quite broad and included nonviolent and even protected conduct, such as vigorous efforts to dissuade customers from shopping at the market.   Therefore, the fact the jury accepted his figures as to damages does not negate a finding of prejudice.

L. THAXTON HANSON, Associate Justice.

ORTEGA, J., concurs.