Chaparro-Febus v. International Longshoremen Ass'n, Local 1575

• Decision Date: 06 November 1992
• Docket Number: CHAPARRO-FEBUS,No. 92-1658,92-1658
• Citation: 983 F.2d 325
• Parties: 142 L.R.R.M. (BNA) 2182, 123 Lab.Cas. P 10,490, 25 Fed.R.Serv.3d 256 Miguel Angel, et al., Plaintiffs, Appellants, v. INTERNATIONAL LONGSHOREMEN ASSOCIATION, LOCAL 1575, et al., Defendants, Appellees. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 325

983 F.2d 325

142 L.R.R.M. (BNA) 2182, 123 Lab.Cas. P 10,490,

25 Fed.R.Serv.3d 256

Miguel Angel CHAPARRO-FEBUS, et al., Plaintiffs, Appellants, v. INTERNATIONAL LONGSHOREMEN ASSOCIATION, LOCAL 1575, et al Defendants, Appellees.

No. 92-1658.

United States Court of Appeals First Circuit.

Heard Nov. 6, 1992.

Decided Dec. 31, 1992.

As Amended Jan. 4, 1993.

Emmalind Garcia Garcia, for plaintiffs, appellants.

Jose G. Fagot-Diaz with whom Ramirez & Ramirez was on brief, for defendant, appellee Puerto Rico Maritime Shipping Authority.

Rafael Cuevas Kuinlam with whom Cuevas Kuinlam & Bermudez was on brief, for defendant, appellee Puerto Rico Marine Management, Inc.

Nicolas Delgado Figueroa, for defendant, appellee Intern. Longshoremen Ass'n, Local 1575.

Before STAHL, Circuit Judge, CAMPBELL, Senior Circuit Judge, and SKINNER, ^* Senior District Judge.

LEVIN H. CAMPBELL, Senior Circuit Judge.

Plaintiffs, appellants are sixteen mechanics employed by Puerto Rico Marine Management, Inc. ("PRMMI") who are members of the International Longshoremen Association, Local 1575 ("Local 1575"). They sued PRMMI and Local 1575, under section 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185, in the United States District Court for the District of Puerto Rico alleging that PRMMI had broken its collective bargaining agreement with Local 1575 ("Agreement"); that Local 1575 had breached its duty of fair representation by arbitrarily agreeing to changes which violated their seniority rights under the Agreement; and that Local 1575 further breached its duty of fair representation by refusing to submit plaintiffs' claims against PRMMI to the internal grievance procedure and arbitration established by the Agreement. The Puerto Rico Maritime Shipping Authority ("PRMSA") was also named as a defendant and alleged to be plaintiffs' employer. The district court dismissed the claim against PRMSA for lack of subject matter jurisdiction, denied plaintiffs' request for a preliminary injunction, and granted summary judgment in favor of PRMMI and Local 1575. We affirm.

I.

PRMSA, which is also known as "Autoridad de las Navieras" or simply "Navieras," is a government agency created by the Commonwealth of Puerto Rico in 1974 to facilitate maritime transportation of cargo and passengers to and from Puerto Rico. 23 L.P.R.A. § 3051, et seq. To effectuate this purpose, Puerto Rico purchased several shipping companies and authorized PRMSA to enter into contracts with private enterprises for the management of its operations. Id. § 3055. PRMSA was additionally authorized to create subsidiary corporations. Id. § 3056.

In 1976, PRMSA entered into a contract with PRMMI, then an independent Delaware corporation, to manage longshoring services for it. Two years later PRMSA acquired PRMMI and converted it into a subsidiary of PRMSA. In March of 1985, PRMSA sold its stock in PRMMI to a private corporation, TNT Containerships, Inc. At that time, PRMSA and PRMMI entered into a contract giving PRMMI exclusive control over the daily longshoring operations. ¹

PRMMI began to encounter serious economic problems in 1990. At that time PRMMI provided two different systems for loading and unloading vessels: the ro-ro system, which operates from small ships with ramps; and the lo-lo system, which operates from larger ships by means of cranes. Local 1575 then, as now, represented the employees managed by PRMMI, under a collective bargaining agreement between the two parties. PRMMI notified Local 1575 of its intention to eliminate the ro-ro fleet. A series of bargaining meetings between PRMMI and Local 1575 were held between April and June of 1990. Eventually a stipulation was signed in which PRMMI agreed not to carry out any more reductions during the remaining life of the Agreement and to give work preference to employees with more seniority in accordance with the seniority clause of the Agreement and Act No. 80 of 1976, 29 L.P.R.A. § 185a et seq. ²

Article I § C of the Agreement, which governs seniority rights, states the following:

Seniority is defined as the continuous time of service in the Company by department (Warehouse and Car Division, Maintenance, Marine) from the date on which the person began as an employee in said Company within the contracting unit, provided that the employee is efficient and complies with the conditions of this Agreement and the rules of the Company for which he works, and except in the Marine Department that seniority shall be by gangs and not by the seniority of the employee within the contracting unit and in the Maintenance Department that seniority shall be by classification within the same department. (emphasis added).

Paragraph 96 of Article VI, entitled "General Conditions," is an administrative provision which also mentions seniority:

PRMMI shall keep separate the LO/LO and RO/RO seniorities, and in the receipt and dispatch may use a RO/RO or LO/LO line to receive or dispatch when the job so warrants it. In the maintenance area, the employer shall keep said area separate, except that he may pass work from one area to another, provided that the situation so warrants. ³

Pursuant to Paragraph 96, work as well as equipment in the maintenance department have in the past been transferred from lo-lo to ro-ro.

PRMMI maintains two separate seniority lists for lo-lo and ro-ro employees. These lists determine which employees are called to work on a daily basis. Each morning, supervisors call the personnel from each list in the order in which they appear on the list. Regular employees, who are guaranteed forty hours of work each week, are called first. If more personnel is needed or if some of the regulars are absent, substitute employees, who must appear each morning and wait to be informed if there is available work, are called.

On July 26, 1990, in response to the sharp decline in work at the ro-ro area and in accordance with its stipulation with Local 1575, PRMMI examined the seniority of its regular mechanics in the maintenance department. The fifteen mechanics with the highest seniority, without regard to whether the mechanics were lo-lo or ro-ro employees, were kept as regular employees. The rest went into a list of substitute employees. Due to the changes, three ro-ro mechanics in the maintenance department were transferred to work the lo-lo list as regular lo-lo mechanics in the maintenance department.

Plaintiffs are sixteen lo-lo mechanics in the maintenance department. As a result of the changes, three plaintiffs who had been lo-lo regular employees were downgraded to substitute employees. Likewise, those plaintiffs who were substitute mechanics were downgraded by the formerly-regular plaintiffs who became substitutes. Irrespective of the changes, all plaintiffs have continued to work full time--albeit occasionally working night shifts--and to make the same amount of money as they did before their status was altered.

Plaintiffs contend that on July 27, 1990, they met with a Local 1575 delegate and a PRMMI official, who informed them that the union and company had signed a stipulation agreeing to the modifications. On August 1, plaintiff Chaparro Febus spoke with the union's vice-president, who told Chaparro Febus there was nothing he could do. The next day, plaintiffs contend that they asked to see Local 1575's president in order to persuade him to file a grievance against the company, and that the president refused to see them. Plaintiffs filed a written complaint with the union on August 3. On August 27, plaintiffs again requested in writing that a grievance be filed against PRMMI. The president of Local 1575 informed plaintiffs in a letter dated September 5, 1990, that their complaint would be taken before the Grievance Committee.

Plaintiffs' grievances, however, were not taken to arbitration. On January 20, 1991, plaintiffs filed the present action against PRMMI, Local 1575, and PRMSA. The district court dismissed the action against PRMSA for lack of subject matter jurisdiction. It subsequently denied a preliminary injunction and granted PRMMI's and Local 1575's motion to dismiss, which the court treated as a motion for summary judgment. This appeal followed.

II.

A. Subject matter jurisdiction over PRMSA

The district court dismissed plaintiffs' § 301 complaint against PRMSA for lack of subject matter jurisdiction because PRMSA, as a political subdivision of the Commonwealth of Puerto Rico, is specifically excluded from the term "employer" as defined by 29 U.S.C. § 152(2). ⁴ Section 152(2) of the LMRA provides in pertinent part the following:

The term 'employer' includes any person acting as an agent or an employer, directly or indirectly, but shall not include the United States or any wholly owned Government corporation, or any Federal Reserve Bank, or any State or political subdivision thereof....

29 U.S.C. § 152(2).

"Political subdivisions" within the meaning of section 152(2) are "entities that are either (1) created directly by the state, so as to constitute departments or administrative arms of the government, or (2) administered by individuals who are responsible to public officials or to the general electorate." NLRB v. Natural Gas Util. Dist. of Hawkins County, 402 U.S. 600, 604-05, 91 S.Ct. 1746, 1749-50, 29 L.Ed.2d 206 (1971). PRMSA, as a "public corporation and governmental instrumentality of the Commonwealth of Puerto Rico" that is administered by officials who are directly responsible to the Legislature and the Governor, 29 L.P.R.A. § 3054, meets either test. As this court has noted in dicta in the past, "it cannot be seriously disputed that PRMSA is a 'political subdivision' excluded from the definition of employer under 29 U.S.C. § 152(2)." Puerto Rico Marine Management, Inc. v. International Longshoremen's Ass'n, AFL-CIO, 540 F.2d 24, 25 (1st Cir.1976).

Plaintiffs raise several arguments in an attempt to avoid this result. In essence, plaintiffs contends that...