Consolidated Exp., Inc. v. New York Shipping, Inc.
| Decision Date | 11 May 1978 |
| Docket Number | 77-156.,Civ. A. No. 76-1645 |
| Parties | CONSOLIDATED EXPRESS, INC., Plaintiff, v. NEW YORK SHIPPING ASSOCIATION, INC., et al., Defendants. TWIN EXPRESS, INC., Plaintiff, v. NEW YORK SHIPPING ASSOCIATION, INC., et al., Defendants. |
| Court | U.S. District Court — District of New Jersey |
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Crummy, DelDeo, Dolan & Purcell by John A. Ridley, Newark, N. J., Steptoe & Johnson by Richard Whiting, Washington, D. C., for plaintiffs Consolidated Exp., Inc. and Twin Exp., Inc.
Carpenter, Bennett & Morrissey by Michael S. Waters, Newark, N. J., Lorenz, Finn, Giardino & Lambos by C. P. Lambos, New York City, for defendants New York Shipping Ass'n, Inc., Intern. Terminal Operating Co., John McGrath Corp., Pittston Stevedoring Corp., and Universal Maritime Services Corp.
Irwin Herschlag, Montclair, N. J., Thomas W. Gleason, New York City, for defendant Intern. Longshoremen's Ass'n, AFL-CIO.
Thomas F. Durkin, Jr., Newark, N. J., for defendants United Terminals Corp. and Seatrain Lines, Inc.
Meyner, Landis & Verdon by Jeffrey L. Reiner, Newark, N. J., Davis, Polk & Wardwell, New York City, for defendant Sea-Land Service, Inc.
In this lawsuit, plaintiff Consolidated Express (hereinafter Conex) seeks to recover money damages for injuries it claims to have suffered by reason of the implementation of the infamous 1969 Rules on Containers, a collectively-bargained response to the perceived threat to waterfront labor posed by technological change in the shipping industry.1
Since World War II, the introduction of increasingly large containers has enabled the shipping industry gradually to replace piece-by-piece loading and unloading work performed by the longshoremen on the piers with block handling of cargo. By use of mammoth containers, shipments of diverse firms can be consolidated into one container which can be "stuffed" far from the waterfront. The containers are then sent to the piers where they are loaded onto waiting ships. This innovation has increased productivity, but has produced decline in demand for the services of the members of the defendant International Longshoremen's Association (ILA).
In 1958, the ILA protested the use of containers and commenced a strike against defendant New York Shipping Association (NYSA). In the contract adopted in 1959, the union conceded that "any employer shall have the right to use any and all types of containers without restriction."2
In the following decade, fully containerized ships were introduced and the use of containers increased dramatically. The loss of work opportunities occasioned by these developments led the ILA to negotiate the "Rules on Containers" in 1969. By these agreements, the NYSA guaranteed that all cargo lots which had been of less than a container size but which had been consolidated with other lots into one container would be stripped when the container arrived on the docks by longshoremen on the dock, if the cargo had originated from or was to be shipped to a point within 50 miles of the dock. The Rules provided for a penalty against the carrier in the amount of $250 per container for any container which went through dockside without being stripped and stuffed in accordance with the Rules.3 In 1970, the penalty was increased to $1,000 per violation. Disputes continued and, in 1973, CONASA (an organization of shipping associations, including NYSA, with authority to negotiate) and the ILA met and entered into the "Dublin Supplement" which provides, in part, as follows:
Consolidated Express, a Puerto Rican corporation, is a nonvessel owning common carrier engaged in the business of containerizing less than container load (LCL) or less than trailer load (LTL) cargo for shipment between Puerto Rico and its inland facilities located within 50 miles of the Port of New York. In the trade, plaintiff is known as a "consolidator," that is, it is in the business of handling LCL or LTL goods for customers wishing to ship such goods. Consolidators "unitize" or consolidate the crates of several customers into large containers provided by the shipping companies. The consolidators pack their customers' crates into containers, and then truck them to pierside facilities where they are loaded onto ships.
Defendant New York Shipping Association is an association of employers engaged in various operations related to the shipment of freight into and out of the Port of New York. On behalf of its member-employees, NYSA conducts collective bargaining negotiations and enters into collective bargaining agreements with labor organizations, including defendant ILA which represents the employees of NYSA's member employers. Defendants Sea-Land and Sea-train are common carriers by water. As part of their business, they furnish containers and trailers, terminal facilities, and cargo space on vessels which they own or lease. They are also in the business of providing stevedoring services for cargo shipped aboard their vessels. Such services include loading and unloading cargo on and off their vessels and receiving delivery of cargo at dockside. Defendants International Terminal Operating Co., Inc., John M. McGrath Corp., Pittston Stevedoring Corp., United Terminal Corp., and Universal Maritime Services Corp. are members of the NYSA. Each is engaged, in part, in the business of providing stevedoring services as described above.
On June 1, 1973, Conex filed charges with the National Labor Relations Board alleging that the ILA had violated § 8(b)(4)(ii)(B) of the National Labor Relations Act, which forbids union activity which forces any employer "to cease doing business"4 with any other employer, and that the ILA and NYSA had violated § 8(e)5 which prohibits agreements requiring such a cessation. Complaints issued and the General Counsel, pursuant to § 10(l) sought preliminary injunctive relief against the union and the shipping association.
The complaint came before Judge Lacey who granted the petition for a preliminary injunction. Balicer v. ILA, 364 F.Supp. 205 (D.N.J.1973). Testimony of nine witnesses before Judge Lacey consumed seven days and 1,200 pages of transcript.6 Noting the limited role of the Court in a 10(l) proceeding, Judge Lacey held that the NLRB's legal theory — that the challenged activities were impermissible work reacquisition — was substantial, and that the issuance of a temporary injunction was "just and proper." The Court of Appeals for the Third Circuit affirmed. Balicer v. ILA 491 F.2d 748 (3rd Cir. 1973) (mem.)
The case was then submitted to an Administrative Law Judge on the basis of a stipulated record consisting of the record of the injunction proceeding before Judge Lacey, including extensive documentary evidence, and supplementary affidavits. The Administrative Law Judge determined that the ILA boycott of Conex and the contractual agreement between the union and the shipping association were addressed to the labor-management relations of the NYSA employer-members vis-a-vis their own employees. He held that the activities were therefore protected "primary conduct."
The NLRB reversed. Consolidated Express, Inc., 221 NLRB No. 144 (1975). The Board found the agreement to be improper under § 8(e) because its objective was to force the NYSA to cease doing business with the consolidators. The NLRB rejected the argument that the contract constituted a valid effort by the ILA to preserve for its members a type of work which they had historically performed. It reasoned that the "work in controversy" was that work performed by the consolidators at their off-pier facilities, not the traditional cargo handling done at dockside by longshoremen. The agreement thus could not be viewed as work preservation lawful under the Supreme Court decision in National Woodwork Manufacturers Ass'n v. NLRB, 386 U.S. 612, 87 S.Ct. 1250, 18 L.Ed.2d 357 (1967). Moreover, reasoned the Board, even assuming that the ILA once had a valid claim to the strip and stuff work, that claim had been abandoned in the 1959 ILA-NYSA agreement. Finally, the Board considered the "economic personality of the industry" and noted that the absence of a clear distinction between strip and stuff work and the work related to preparing containers for shipment could lead to a future ILA claim to all such work with "enormous impact on the shipping industry". The Board further ruled that the union's actions in enforcing the agreement were unfair labor practices under § 8(b)(4)(ii)(B).
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