372 U.S. 10 (1963), 107, McCulloch v. Sociedad Nacional de Marineros de Honduras

Docket Nº:No. 107
Citation:372 U.S. 10, 83 S.Ct. 671, 9 L.Ed.2d 547
Party Name:McCulloch v. Sociedad Nacional de Marineros de Honduras
Case Date:February 18, 1963
Court:United States Supreme Court
 
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372 U.S. 10 (1963)

83 S.Ct. 671, 9 L.Ed.2d 547

McCulloch

v.

Sociedad Nacional de Marineros de Honduras

No. 107

United States Supreme Court

Feb. 18, 1963

Argued December 11-12, 1962

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Syllabus

1. A corporation organized and doing business in the United States beneficially owns vessels which make regular sailings between the United States, Latin American ports, and other ports, transporting the corporation's products and other supplies. Each of the vessels is legally owned by a foreign subsidiary of the American corporation, flies the flag of a foreign nation, carries a foreign crew represented by a foreign union and has other contacts with the nation of its flag.

Held: the jurisdictional provisions of the National Labor Relations Act do not extend to the maritime operations of such foreign flag ships employing alien seamen. Pp. 11-22.

2. Although the members of the crews of these vessels were already represented by a foreign union, the National Labor Relations Board held that the Act extends to them, and it ordered representation elections. This assertion of power to determine the representation of foreign seamen aboard vessels under foreign flags aroused vigorous protests from foreign governments and created international problems for our Government. On application of the foreign bargaining agent of the vessels' crewmen, the United States District Court for the District of Columbia enjoined the members of the Board from conducting the elections.

Held: this action falls within the limited exception fashioned in Leedom v. Kyne, 358 U.S. 184; the District Court had jurisdiction of the original suit

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to set aside the Board's determination because it was made in excess of the Board's powers; and the judgment of the District Court is affirmed. Pp. 14-17.

201 F.Supp. 82 affirmed.

300 F.2d 222, judgment vacated and cases remanded.

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CLARK, J., lead opinion

MR. JUSTICE CLARK delivered the opinion of the Court.

These companion cases, involving the same facts, question the coverage of the National Labor Relations Act, as amended, 61 Stat. 136, 73 Stat. 541, 29 U.S.C. § 151 et seq. A corporation organized and doing business in the United States beneficially owns seagoing vessels which make regular sailings between United States, Latin American, and other ports transporting the corporation's products and other supplies; each of the vessels is legally owned by a foreign subsidiary of the American corporation, flies the flag of a foreign nation, carries a foreign crew, and has other contacts with the nation of its flag. The question arising is whether the Act extends to the crews engaged in such a maritime operation. The National Labor Relations Board, in a representation proceeding on the application of the National [83 S.Ct. 673] Maritime Union, held that it does, and ordered an election. 134 N.L.R.B. 287. The vessels' foreign owner sought to enjoin the Board's Regional Director from holding the election, but the District Court for the Southern District of New York denied the requested relief. 200 F.Supp. 484. The Court of Appeals for the Second Circuit reversed, holding that the Act did not apply to the maritime operations here, and thus the Board had no power to direct the election. 300 F.2d 222. The N.M.U. had intervened in the proceeding, and it petitioned for a writ of certiorari (No. 93), as did the Regional Director (No. 91). Meanwhile, the United States District Court for the District of Columbia, on application of the foreign bargaining agent of the vessels' crewmen, enjoined the Board members in No. 107. 201 F.Supp. 82. We granted each of the three petitions for certiorari, 370 U.S. 915, and consolidated the cases for argument.1

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We have concluded that the jurisdictional provisions of the Act do not extend to maritime operations of foreign flag ships employing alien seamen.

I

The National Maritime Union of America, AFL-CIO, filed a petition in 1959 with the National Labor Relations Board seeking certification under § 9(c) of the Act, 29 U.S.C. § 159(c), as the representative of the unlicensed seamen employed upon certain Honduran flag vessels owned by Empresa Hondurena de Vapores, S.A., a Honduran corporation. The petition was filed against United Fruit Company, a New Jersey corporation which was alleged to be the owner of the majority of Empresa's stock. Empresa intervened, and, on hearing, it was shown that United Fruit owns all of its stock and elects its directors, though no officer or director of Empresa is an officer or director of United Fruit, and all are residents of Honduras. In turn, the proof was that United Fruit is owned by citizens of the United States, and maintains its principal office at Boston. Its business was shown to be the cultivation, gathering, transporting and sale of bananas, sugar, cacao and other tropical produce raised in Central and South American countries and sold in the United States.

United Fruit maintains a fleet of cargo vessels which it utilizes in this trade. A portion of the fleet consists of 13 Honduran-registered vessels operated2 by Empresa and time chartered to United Fruit, which vessels were included in National Maritime Union's representation proceeding. The crews on these vessels are recruited by Empresa in Honduras. They are Honduran citizens (save one Jamaican), and claim that country as their

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residence and home port. The crew are required to sign Honduran shipping articles, and their wages, terms and condition of employment, discipline, etc., are controlled by a bargaining agreement between Empresa and a Honduran union, Sociedad Nacional de Marineros de Honduras. ,Under the Honduran Labor Code only a union whose "juridic personality" is recognized by Honduras and which is composed of at least 90% of Honduran citizens can represent the seamen on Honduran-registered ships. The N.M.U. fulfills neither requirement. Further, under Honduran law, recognition of Sociedad as the bargaining agent compels Empresa to deal exclusively with it on all matters covered by the contract. The current agreement, in addition to [83 S.Ct. 674] recognition of Sociedad, provides for a union shop, with a "no strike or lockout" provision, and sets up wage scales, special allowances, maintenance and cure provisions, hours of work, vacation time, holidays, overtime, accident prevention, and other details of employment as well.

United Fruit, however, determines the ports of call of the vessels, their cargoes and sailings, integrating the same into its fleet organization. While the voyages are, for the most part, between Central and South American ports and those of the United States, the vessels each call at regular intervals at Honduran ports for the purpose of taking on and discharging cargo and, where necessary, renewing the ship's articles.

II

The Board concluded from these facts that United Fruit operated a single, integrated maritime operation within which were the Empresa vessels, reasoning that United Fruit was a joint employer with Empresa of the seamen covered by N.M.U.'s petition. Citing its own West India Fruit & Steamship Co. opinion, 130 N.L.R.B. 343 (1961), it concluded that the maritime

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operations involved substantial United States contacts, outweighing the numerous foreign contacts present. held that Empresa was engaged in "commerce" within the meaning of § 2(6) of the Act,3 and that the maritime operations "affected commerce" within § 2(7),4 meeting the jurisdictional requirement of § 9(c) (1).5 It therefore ordered an election to be held among the seamen signed on Empresa's vessels to determine whether they wished N.M.U., Sindicato Maritimo Nacional de Honduras,6 or no union to represent them.

As we have indicated, both Empresa and Sociedad brought suits in Federal District Courts to prevent the election, Empresa proceeding in New York against the Regional Director -- Nos. 91 and 93 -- and Sociedad in the

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District of Columbia against the members of the Board -- No. 107. In Nos. 91 and 93, the jurisdiction of the District Court was challenged on two grounds: first, that review of representation proceedings is limited by § 9(d) of the Act, 29 U.S.C. § 159(d), to indirect review as part of a petition for enforcement or review of an order entered under § 10(c), 29 U.S.C. § 160(c); and, second, that the Board members were indispensable parties to the action. The challenge based upon § 9(d) was not raised or adjudicated in Sociedad's action against the Board members -- No. 107 -- and the indispensable parties challenge is, of course, not an issue. [83 S.Ct. 675] Sociedad is not a party in Nos. 91 and 93, although the impact of the Board order -- the same order challenged in No. 107 -- is felt by it. That order has the effect of canceling Sociedad's bargaining agreement with Empresa's seamen, since Sociedad is not on the ballot called for by the Board. No. 107, therefore, presents the question in better perspective, and we have chosen it as the vehicle for our adjudication on the merits. This obviates our passing on the jurisdictional questions raised in Nos. 91 and 93, since the disposition of those cases is controlled by our decision in No. 107.

We are not, of course, precluded from reexamining the jurisdiction of the District Court in Sociedad's action, merely because no challenge was made by the parties. Mitchell v. Maurer, 293 U.S. 237, 244 (1934). Having examined the question whether the District Court had jurisdiction at the instance of Sociedad to enjoin the Board's order, we hold that the action falls within the limited exception fashioned in Leedom v. Kyne, 358 U.S. 184 (1958). In that case judicial intervention was permitted since the Board's order was "in excess of its delegated powers and contrary to a specific prohibition in the Act." Id. at 188...

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