Copra v. Suro

• Decision Date: 06 July 1956
• Docket Number: No. 5062.,5062.
• Citation: 236 F.2d 107
• Court: U.S. Court of Appeals — First Circuit
• Parties: Antonio COPRA et al., Plaintiffs, Appellants, v. Jose A. SURO et al., Defendants, Appellees.

236 F.2d 107 (1956)

Antonio COPRA et al., Plaintiffs, Appellants, v. Jose A. SURO et al., Defendants, Appellees.

No. 5062.

United States Court of Appeals First Circuit.

July 6, 1956.

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Samuel M. Cole, Jersey City, N. J., R. V. Perez-Marchand, Rio Piedras, Puerto Rico, on the brief, for appellants.

Francisco Ponsa-Feliu, San Juan, Puerto Rico, for appellees.

Before MAGRUDER, Chief Judge, and MARIS and WOODBURY, Circuit Judges.

MAGRUDER, Chief Judge.

This case, arising out of a controversy as to which of two unions is entitled to represent longshoremen in Puerto Rico in the management of the health and welfare funds created for their benefit through collective bargaining, presents a number of difficult questions of jurisdiction and statutory application pertaining to § 301 and § 302 of the Labor Management Relations Act of 1947, 61 Stat. 156, 157, 29 U.S.C.A. §§ 185, 186. However, the present appeal from the United States District Court for the District of Puerto Rico was taken, under 28 U.S.C. § 1292(1), from the denial of a temporary injunction. "All we have to decide on this appeal, and all we do decide," therefore, is the limited question of whether "denial of an interlocutory injunction in the circumstances disclosed was * * * an improvident exercise of the discretion confided to the trial court." Hannan v. City of Haverhill, 1 Cir., 1941, 120 F.2d 87, 90, certiorari denied 1941, 314 U.S. 641, 62 S.Ct. 81, 86 L.Ed. 514; cf. State of Alabama v. United States, 1929, 279 U.S. 229, 49 S.Ct. 266, 73 L.Ed. 675. The reason for this limitation that was quoted in the Hannan opinion has particular force in the circumstances of the present case:

"The granting of a preliminary injunction is an exercise of a very far reaching power, never to be indulged in except in a case clearly demanding it; and the decision of a court of first instance, refusing such an injunction, will not, except for very strong reasons, be reversed by this court." New York Asbestos Mfg. Co. v. Ambler Asbestos Air-Cell Covering Co., 3 Cir., 1900, 102 F. 890, 891.

The somewhat complicated facts and proceedings herein must be reviewed, then, with this narrow function of the appellate court in mind.

On June 30, 1952, the companies represented by the Puerto Rico Steamship Association (hereinafter PRSSA) and the local unions represented by the International Longshoremen's Association, District Council of Puerto Rico (hereinafter ILA), executed an "Agreement and Declaration of Trust ILA-PRSSA-Welfare Plan." This contract carried forward the health and welfare plan originally set forth in the collective bargaining agreement signed by the same parties in 1950 and extended it for a five-year term that was stated to expire June 30, 1957. In outline, the 1952 agreement provided a number of separate funds each of which was to be made up of a stated contribution by the employer "for each hour worked by each and every one of its employees represented by the Union and covered by the current Collective Bargaining Agreement between the Contributing Companies and the Union." There was a Welfare Fund, to pay health and insurance benefits, there were a Vacation Fund and a Christmas Fund, each to pay out the full amount contributed before the end of every calendar year, and there was a Sick Leave Fund. Provision was made for the separate creation of a pension plan to be funded out of surplus accumulated in the Welfare Fund. Benefits out of the various funds were to be paid to "All the employees represented by the Union and included in the Collective Bargaining Agreement between the Companies and the Union" who met the stated eligibility tests. Administration of the entire welfare plan was to be "the joint responsibility" of three trustees to be appointed by PRSSA and three trustees to be appointed by ILA. Provision for a neutral member was made, but in fact none was ever appointed. The details of the powers and procedures of the trustees are not necessary here except to note that the trustees were appointed "to serve for the duration of this trust," and while each organization could remove or replace its own trustees, otherwise "a Trustee can be removed only for malfeasance or misfeasance in the execution of his trust," with adjudication of such a charge to be made as provided in the agreement.

The agreement also incorporated the provision of the collective bargaining contract by which PRSSA and ILA agreed that contributions could be made to the funds by employers who were not members of PRSSA so that their employees would be covered in the benefits. However, such an employer had to agree that the PRSSA trustees would represent it in the administration of the plan; that is, the non-PRSSA employers contributing would have no direct representation in the board of trustees. The collective bargaining agreement listed nineteen companies which would be eligible to contribute on that basis (hereinafter "the independent companies"). It is not clear how many independent companies took advantage of this opportunity. Counsel for PRSSA said at the argument that the PRSSA companies made 80 per cent of the total contributions to the funds.

When the welfare plan was put in the collective bargaining contract in 1950 and when the separate agreement of trust was executed in 1952, the ILA represented all the longshoremen in the ports of Puerto Rico, those employed by the independent companies as well as those employed by the six member companies of PRSSA. In January, 1954, the National Labor Relations Board conducted a representation election in Puerto Rico among the employees of the PRSSA companies only. ILA lost this election to a union called the Union de Trabajadores de Muelles y Ramas Anexas de Puerto Rico (hereinafter UTM). UTM has represented the PRSSA employees from 1954 at least up to the time when this suit was brought in 1955, while ILA has continued to represent the employees of the independent companies.

In April, 1954, counsel for PRSSA wrote the independent companies that thenceforth the PRSSA trustees would decline to accept contributions or to administer the welfare funds for the benefit of employees other than those of the PRSSA companies. In June, 1954, UTM designated three trustees for the trust then in existence. On August 20 the UTM trustees met with the PRSSA trustees, and they recognized each other as the lawful trustees of the ILA-PRSSA Welfare Fund. At least from that time forward (and perhaps since January 1, 1954), the welfare plan has been administered on the basis that contributions were received only from the PRSSA companies and benefits paid only to their employees, including such ILA longshoremen as would become eligible for benefits by working the requisite number of hours for PRSSA companies. On November 22, 1954, PRSSA and UTM executed a new trust agreement, designated the "UTM-PRSSA Trust Agreement," which embodied the provisions of the former trust agreement (except that UTM was substituted throughout for ILA) and which provided that it should continue until June 30, 1957, the termination date of the former ILA trust.

On December 30, 1954, the six UTM-PRSSA trustees filed a declaratory judgment action in the United States District Court for the District of Puerto Rico, Suro v. Arroyo Lighterage Co., No. 9013, which will be more fully described later. This suit sought a declaratory judgment and injunction to establish the right of those trustees to refuse to accept further contributions from the independent companies. Since that time, certain of the independents (seven of them were named as defendants) have paid their contributions into court. The total amount in the hands of the district court is said to be around $100,000. The UTM-PRSSA trustees continue to hold, unsegregated in their trust funds, any amounts that had been contributed by the independents prior to the ILA's loss of representation in the trust and which had not been paid out in benefits prior to that time to employees of the independent companies. The record does not indicate what amount, if any, falls in this category.

The complaint in the instant case was filed on June 20, 1955. It named as plaintiffs eight individual longshoremen as representatives of a class, and the three ILA trustees. Named as defendants were the three current PRSSA trustees and the three UTM trustees, who were named "individually and as alleged members of the Board of Trustees of the ILA-PRSSA Welfare Fund, and as members of the Board of Trustees of the PRSSA-UTM Fund." It was alleged that the longshoremen plaintiffs, and others whom they represented, had been deprived of benefits due under the welfare trust agreement, that the ILA trustees had not acted as trustees since June of 1954, and that the six defendants had acted wrongfully as trustees of the fund since that date, with details spelled out. Plaintiffs demanded broad injunctive relief against the defendant trustees, against banks holding money of the welfare funds, and against members of the PRSSA. Motions for a temporary restraining order and for a preliminary injunction against the trustees were made at the same time. These sought to freeze the power of the trustees in sweeping terms, to prevent them from collecting or disbursing any money or doing any other act as trustees.

A hearing on the motion for a preliminary injunction was set for July 1, 1955, and on June 30 an amended complaint was filed. The only changes were to add the ILA as a plaintiff and the UTM as a defendant and to allege jurisdiction under § 302 of the Labor Management Relations Act as well as under § 301, which was the sole jurisdictional basis stated in the first complaint. The hearing on the preliminary injunction took place the next day, although the UTM had not yet appeared. At that hearing counsel for the plaintiffs apparently conceded that the court's ruling on his motion would not bind the UTM under...