Benz v. Compania Naviera Hidalgo

Decision Date08 April 1957
Docket NumberNo. 204,204
PartiesWilliam BENZ et al., Petitioners, v. COMPANIA NAVIERA HIDALGO, S.A., a Corporation
CourtU.S. Supreme Court


Kneland C. Tanner, Portland, Or., for petitioners.

Mr. John D. Mosser, Portland, Or., for respondent.

Mr. Justice CLARK delivered the opinion of the Court.

While the petitioners in this diversity case present several questions, the sole one decided is whether the Labor Management Relations Act of 19471 applies to a controversy involving damages resulting from the picketing of a foreign ship operated entirely by foreign seamen under foreign articles while the vessel is temporarily in an American port. We decide that it does not, and therefore do not reach other questions raised by the parties.

The S.S. Riviera on September 3, 1952, sailed into harbor at Portland, Oregon, for repairs, to load a cargo of wheat, and to complete an insurance survey. It was owned by respondent, a Panamanian corporation, and sailed under a Liberian flag. The crew was made up entirely of nationals of countries other than the United States, principally German and British. They had agreed to serve on a voyage originating at Bremen, Germany, for a period of two years, or until the vessel returned to a European port. A British form of articles of agreement was opened at Bremen. The conditions prescribed by the British Maritime Board were incorporated into the agreement, including wages and hours of employment, all of which were specifically set out. The crew further agreed to obey all lawful commands of the Master of the Riviera in regard to the ship, the stores, and the cargo, whether on board, in boats, or on shore.

On or about September 9, 1952, the members of the crew went on strike on board the vessel and refused to obey the orders of the Master. They demanded that their term of service be reduced, their wages be increased, and more favorable conditions of employment be granted.2 They refused to work, demanding their back pay and transportation or its cost to their ports of engagement. The Master told the crew to continue their work or they would be discharged. When they declined to work he discharged them and ordered them to leave the ship, which they refused to do. This situation continued until September 26, 1952, when the striking crewmen left the vessel pursuant to an order of the United States District Court entered in a possessory libel filed by the respondent. The crew had picketed the vessel from September 9, 1952, when the strike began, until September 26, when they left the ship. On September 15, 1952, they had designated the Sailors' Union of the Pacific as their collective bargaining representative. The striking crew or others acting for them continued the picketing from September 26, 1952, until they withdrew the picket line on October 13, 1952. The Sailors' Union of the Pacific began picketing the Riviera on October 14 and continued to do so until restrained by an injunction issued in an action for injunctive relief and damages filed against it and its principal representatives by the respondent. Two days later Local 90 of the National Organization of Masters, Mates and Pilots of America set up a picket line at the Riviera which was maintained until December 8, 1952. This picketing was stopped by a writ issued against that union and its representatives in the second action for injunction and damages filed by respondent and consolidated here. On December 10, 1952, another picket line was established at the vessel. It was maintained this time by the Atlantic and Gulf Coast District, S.I.U.,3 until it too was enjoined on December 12 in a third action filed by the respondent in which the prayer likewise was for an in- junction and damages. These three cases have been consolidated for consideration here. All of the picketing was peaceful.

The ship sailed in December 1952. In June 1953, the injunction orders were vacated on appeal to the Court of Appeals and were ordered dismissed as moot. The cases were returned to the District Court for trial on the damage claims. 9 Cir., 205 F.2d 944. The ship had not returned to an American port at the time of trial in 1954. At the trial the court found that the purpose of the picketing 'was to compel the (respondent) to re-employ' the striking members of the crew for a shorter term and at more favorable wage rates and conditions than those agreed upon in the articles. The court further found that as a result of the picketing the employees of the firms repairing and loading the vessel refused to cross the picket line and the ship was forced to stand idly by without repairs or cargo, all to the damage of respondent. The unions and their representatives contended that the trial court was without jurisdiction because the Labor Management Relations Act had pre-empted the field. However, the trial court entered judgment for damages against the three unions as well as their principal representatives. The judgments were based on a common-law theory that the picketing was for an unlawful purpose under Oregon law. The court found that respondent had no remedy under the Labor Management Relations Act because that Act 'is concerned solely with the labor relations of American workers between American concerns and their employees in the United States, and it is not intended to, nor does it cover a dispute between a foreign ship and its foreign crew.' The Court of Appeals thought that United Construction Workers, Affiliated with United Mine Workers of America v. Laburnum Construction Corp., 1954, 347 U.S. 656, 74 S.Ct. 833, 98 L.Ed. 1025, governed, but that Oregon law did not permit recovery against the unions since they were unincor- porated associations. 9 Cir., 233 F.2d 62.4 This, in effect, left the judgments standing against the individual representatives of the unions, the petitioners here. We granted certiorari in order to settle the important question of jurisdiction 352 U.S. 889, 77 S.Ct. 125, 1 L.Ed.2d 84.

It should be noted at the outset that the dispute from which these actions sprang arose on a foreign vessel. It was between a foreign employer and a foreign crew operating under an agreement made abroad under the laws of another nation. The only American connection was that the controversy erupted while the ship was transiently in a United States port and American labor unions participated in its picketing.

It is beyond question that a ship voluntarily entering the territorial limits of another country subjects itself to the laws and jurisdiction of that country. Wildenhus' Case, 1887, 120 U.S. 1, 7 S.Ct. 385, 30 L.Ed. 565. The exercise of that jurisdiction is not mandatory but discretionary. Often, because of public policy or for other reasons, the local sovereign may exert only limited jurisdiction and sometimes none at all. Cunard S.S. Co. v. Mellon, 1923, 262 U.S. 100, 43 S.Ct. 504, 67 L.Ed. 894. It follows that if Congress had so chosen, it could have made the Act applicable to wage disputes arising on foreign vessels between nationals of other countries when the vessel comes within our territorial waters. The question here therefore narrows to one of intent of the Congress as to the coverage of the Act.

The parties point to nothing in the Act itself or its legislative history that indicates in any way that the Congress intended to bring such disputes within the coverage of the Act. Indeed the District Court found to the contrary, specifically stating that the Act does not 'cover a dispute between a foreign ship and its foreign crew.' The Court of Appeals, though not passing on the question, noted that 'It may well be that American laws should not be construed to apply, without some more explicit Congressional indication than we are able to find in the National Labor Relations Act, as amended, to situations with as many points of foreign contact as the situation at bar.' 233 F.2d at page 65.

Our study of the Act leaves us convinced that Congress did not fashion it to resolve labor disputes between nationals of other countries operating ships under foreign laws.5 The whole background ground of the Act is concerned with industrial strife between American employers and employees. In fact, no discussion in either House of Congress has been called to our attention from the thousands of pages of legislative history that indicates in the least that Congress intended the coverage of the Act to extend to circumstances such as those posed here. It appears not to have even occurred to those sponsoring the bill. The Report made to the House by its Committee on Education and Labor and presented by the coauthor of the bill, Chairman Hartley, stated that 'the bill herewith reported has been formulated as a bill of rights both for American workingmen and for their employers.' The report declares further that because of the inadequacies of legislation 'the American workingman has been deprived of his dignity as an individual,' and that it is the purpose of the bill to correct these inadequacies. (Emphasis added.) H.R.Rep. No. 245, 80th Cong., 1st Sess. 4. What was said inescapably describes the boundaries of the Act as including only the workingmen of our own country and its possessions.

The problem presented is not a new one to the Congress. In the Seamen's Act of March 4, 1915, 38 Stat. 1164, the Congress declared it unlawful to pay a seaman wages in advance and specifically declared the prohibition applicable to foreign vessels 'while in waters of the United States.' Id., at 1169, as amended, 46 U.S.C. § 599(e), 46 U.S.C.A. § 599(e). In Sandberg v. McDonald, 1918, 248 U.S. 185, 39 S.Ct. 84, 63 L.Ed. 200, this Court construed the Act as not covering advancements 'when the contract and payment were made in a foreign country where the law sanctioned such contract and payment * * *. Had Con- gress intended to make void such contracts and payments a few words would have stated that intention, not leaving...

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