Bowers v. Transportes Navieros Ecuadorianos, 88 Civ. 5481 (RJW).

• Decision Date: 27 July 1989
• Docket Number: No. 88 Civ. 5481 (RJW).,88 Civ. 5481 (RJW).
• Parties: John BOWERS, Albert Cernadas, M. Brian Maher, Anthony Pimpinella, Anthony J. Tozzoli, and Peter F. Vickers, as Trustees for and on behalf of the NYSA-ILA Pension Trust Fund, Plaintiffs, v. TRANSPORTES NAVIEROS ECUADORIANOS (TRANSNAVE), Defendant.
• Court: U.S. District Court — Southern District of New York

719 F. Supp. 166

John BOWERS, Albert Cernadas, M. Brian Maher, Anthony Pimpinella, Anthony J. Tozzoli, and Peter F. Vickers, as Trustees for and on behalf of the NYSA-ILA Pension Trust Fund, Plaintiffs, v. TRANSPORTES NAVIEROS ECUADORIANOS (TRANSNAVE), Defendant.

No. 88 Civ. 5481 (RJW).

United States District Court, S.D. New York.

July 27, 1989.

Lambos & Giardino (C.P. Lambos, Donato Caruso, Nicholas G. Maglaras, of counsel), Thomas W. Gleason (Kevin Marrinan, Ernest L. Mathews, Jr., of counsel), New York City, for plaintiffs.

Kirlin, Campbell & Keating (Michael J. Walsh, of counsel), New York City, Kirlin, Campbell & Keating (Robert J. Hickey, of counsel), Washington, D.C., Healy & Baillie (John D. Kimball, Leroy Lambert, of counsel), for defendant.

OPINION

ROBERT J. WARD, District Judge.

Plaintiffs, the trustees of the NYSA-ILA Pension Trust Fund, brought this action, pursuant to the Multiemployer Pension Plan Amendments Act of 1980, 29 U.S.C. §§ 1381-1461, to collect withdrawal liability payments.¹ In the instant motion, plaintiffs seek interim withdrawal liability payments, pursuant to 29 U.S.C. § 1399(c)(2). In addition, plaintiffs seek liquidated damages in accordance with 29 U.S.C. § 1132(g)(2)(C), interest in accordance with 29 U.S.C. § 1132(g)(2)(B), and attorney's fees and costs in accordance with 29 U.S.C. § 1132(g)(2)(D). For the reasons hereinafter stated, plaintiffs' motion is hereby granted.

BACKGROUND

Defendant Transportes Navieros Ecuadorianos ("Transnave") is a steamship carrier which has engaged in operations in the Port of New York and New Jersey ("the Port"). In October 1981, Transnave enrolled as a member of the New York Shipping Association ("NYSA") and began paying yearly dues to the NYSA of $150.00. Since its incorporation in 1955, NYSA has acted as the multiemployer bargaining representative for its members (including carriers, stevedores and other employers of longshoremen) in negotiating and administering collective bargaining agreements with the International Longshoremen's Association, AFL-CIO ("ILA"). These collective bargaining agreements, known as the General Cargo Agreement(s) ("GCA"), contain the terms and conditions of longshore employment in the Port.

The GCA established a tonnage assessment on cargo and imposed on carriers an obligation to pay such assessments to the NYSA for the purpose of funding longshore employee benefits. A portion of these assessment revenues is contributed to the NYSA-ILA Pension Trust Fund ("the Fund"). The Fund is the multiemployer pension plan that provides the retirement benefits, prescribed in the GCA, to longshore workers in the Port.

As a member of the NYSA, Transnave paid $1,384,337.17 to the NYSA between 1982 and 1986 in accordance with its assessment obligations. No Transnave vessel has called at the Port since late June, 1987. The Fund determined that Transnave had withdrawn from the plan within the meaning of the MPPAA, and made a demand for withdrawal liability payment, pursuant to 29 U.S.C. §§ 1382, 1399(b)(1). The Fund demanded that Transnave satisfy its withdrawal liability by making quarterly payments of approximately $27,000 for a period of seven years, with the first payment due April 1, 1988. Defendant did not pay any of these assessments, and on August 5, 1988 plaintiffs filed this action.

Defendant argues that it is immune from suit under the Foreign Sovereign Immunities Act ("FSIA"), and that service of the summons and complaint was improper. Further, defendant argues that the relief plaintiffs seek, interim withdrawal liability payments, is prohibited by the FSIA. Defendant contends that plaintiffs are not entitled to interim payments by virtue of plaintiffs' failure to abide by the demand and arbitration procedures required by the MPPAA. On the merits, defendant asserts that it is not an employer within the meaning of the MPPAA, and that plaintiffs have not established defendant's liability under the collective bargaining agreement.

DISCUSSION

The Court will first consider defendant's jurisdictional arguments regarding the FSIA, and will then discuss defendant's procedural and substantive arguments relating to the MPPAA.

A. Subject Matter Jurisdiction

Sovereign immunity is the doctrine of international law under which domestic courts, in appropriate cases, relinquish jurisdiction over a foreign state.² The FSIA governs the assertion of subject matter and personal jurisdiction over a foreign state. 28 U.S.C. §§ 1602-1611.

Subject to existing international agreements to which the United States is a party at the time of the enactment of this Act a foreign state shall be immune from the jurisdiction of the courts of the United States and of the States except as provided in sections 1605 to 1607 of this chapter.

28 U.S.C. § 1604. The FSIA codifies a restrictive theory of sovereign immunity which confines immunity from suit to a foreign sovereign's public, governmental acts. Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480, 487-88, 103 S.Ct. 1962, 1968, 76 L.Ed.2d 81 (1983). The district courts are endowed with both subject matter and personal jurisdiction over nonjury civil actions against foreign states in which an exception to sovereign immunity is applicable. 28 U.S.C. § 1330(b). When an exception to immunity applies, "the foreign sovereign is liable in the same manner and to the same extent as a private individual under like circumstances." 28 U.S.C. § 1606.

There is no dispute that Transnave is a "foreign state" within the meaning of the FSIA. Plaintiffs contend, rather, that the commercial activity exception provided in section 1605 applies, and that Transnave, accordingly, is subject to suit in this Court.

Section 1605(a)(2) provides in part that:

(a) A foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any case —

....

(2) in which the action is based upon a commercial activity carried on in the United States by the foreign state; or upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere....

The FSIA defines a commercial activity to include "either a regular course of commercial conduct or a particular commercial transaction or act." 28 U.S.C. § 1603(d). Although the determination whether a particular course of conduct constitutes "commercial activity" is often determinative of the outcome of an action brought pursuant to the FSIA, and may sometimes implicate sensitive foreign policy issues when suit is brought against a foreign state, Congress has not provided a precise definition of this term. The courts have a great deal of latitude in determining what constitutes "commercial activity" for purposes of the FSIA. H.R.Rep. No. 1487, 94th Cong., 2d Sess. 16, reprinted in 1976 U.S.Code Cong. & Admin.News 6604, 6615 (hereinafter referred to as "House Rep."). Such determinations are made on a case by case basis, in light of Congress' prescription that "the commercial character of the activity shall be determined by reference to the nature of the course of conduct or particular transaction or act, rather than by reference to its purpose." 28 U.S.C. § 1603(d).

Congress has emphasized, in the legislative history accompanying the FSIA, that where "an activity is customarily carried on for profit, its commercial nature could readily be assumed." Included among examples of a commercial enterprise is the "employment or engagement of laborers." House Rep. at 16, 1976 U.S.Code Cong. & Admin.News at 6615.

Sailing a ship into a United States port and discharging or receiving cargo constitute commercial activity. Velidor v. L/P/G Benghazi, 653 F.2d 812, 819 (3d Cir.1981), cert. dismissed, 455 U.S. 929, 102 S.Ct. 1297, 71 L.Ed.2d 474 (1982). Even further, defendant retained a company to service its vessels in port, and arranged for longshoremen working out of a United States port to load and unload Transnave's ships while in port. Accordingly, the Court holds that the commercial activities exception to sovereign immunity applies to this action, and the Court has subject matter jurisdiction to hear the action.

B. Personal Jurisdiction

The jurisdictional provisions of the FSIA provide that:

Personal jurisdiction over a foreign state shall exist as to every claim for relief over which the district courts have jurisdiction under subsection (a) providing for subject matter jurisdiction where service has been made under Section 1608 of this title.

28 U.S.C. § 1330(b). Section 1608 imposes different service requirements, depending whether the party to be served is "a foreign state or political subdivision of a foreign state," on the one hand, or "an agency or instrumentality of a foreign state," on the other.

Absent a special arrangement between the parties, service of process is proper upon a foreign state or a political subdivision thereof only if made in accordance with an applicable international convention, or if sent by mail, return receipt requested, by the clerk of the court to the head of the ministry of foreign affairs of the foreign state concerned. Service by the clerk of the court must include a translation of each document into the official language of the foreign state. 28 U.S.C. § 1608(a).³

Service of process upon an agency or instrumentality of a foreign state is proper if made in accordance with any special arrangement between the parties, in accordance with an applicable international convention, or "by delivery of a copy of the summons and complaint either to an officer, a managing or general agent, or to any other agent authorized by appointment or by law to receive service of process in the United States." Id. § 1608(b).

In the instant case, plaintiffs served the summons and complaint upon defendant by personally delivering a copy to Kerr Steamship Company ("Kerr") as defendant's agent.⁴ Thus, service was proper pursuant to section 1608(b), so long as defendant is an...