Hotel and Restaurant Employees and Bartenders Intern. Union Local 54 v. Danziger

• Decision Date: 06 June 1983
• Docket Number: 82-5234 and 82-5260,Nos. 82-5210,s. 82-5210
• Citation: 709 F.2d 815
• Parties: 113 L.R.R.M. (BNA) 2868, 113 L.R.R.M. (BNA) 3311, 97 Lab.Cas. P 10,232, 4 Employee Benefits Ca 1947 HOTEL AND RESTAURANT EMPLOYEES AND BARTENDERS INTERNATIONAL UNION LOCAL 54; and Frank Gerace, President Hotel and Restaurant Employees and Bartenders International Union Local 54 and International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America, Local 331, Intervenor v. Martin DANZIGER, Acting Chairman; Donald Thomas, Commissioner; Madeline McWhinney, Commissioner; Carl Zeitz, Commissioner, Constituting the Casino Control Commission, State of New Jersey; G. Michael Brown, Director Department of Law and Public Safety, Division of Gaming Enforcement, State of New Jersey; Department of Law and Public Safety, Division of Gaming Enforcement, State of New Jersey; and Thomas Kean, Governor, State of New Jersey Appeal of HOTEL AND RESTAURANT EMPLOYEES AND BARTENDERS INTERNATIONAL UNION LOCAL 54 and Frank Gerace, President, Hotel and Restaurant Employees and Bartenders International Union Local 54. Appeal of The CASINO CONTROL COMMISSION. Appeal of G. Michael BROWN, Director, Dept. of Law and Public Safety, Division of Gaming Enforcement; and Thomas Kean, Governor.
• Court: U.S. Court of Appeals — Third Circuit

Page 815

709 F.2d 815

113 L.R.R.M. (BNA) 2868, 113 L.R.R.M. (BNA) 3311,

97 Lab.Cas. P 10,232,

4 Employee Benefits Ca 1947

HOTEL AND RESTAURANT EMPLOYEES AND BARTENDERS INTERNATIONAL UNION LOCAL 54; and Frank Gerace, President Hotel and Restaurant Employees and Bartenders International Union Local 54 and International Brotherhood of Teamsters, Chauffeurs Warehousemen & Helpers of America, Local 331, Intervenor v. Martin DANZIGER, Acting Chairman; Donald Thomas Commissioner; Madeline McWhinney, Commissioner; Carl Zeitz, Commissioner, Constituting the Casino Control Commission, State of New Jersey; G. Michael Brown, Director Department of Law and Public Safety, Division of Gaming Enforcement, State of New Jersey; Department of Law and Public Safety, Division of Gaming Enforcement, State of New Jersey; and Thomas Kean, Governor, State of New Jersey Appeal of HOTEL AND RESTAURANT EMPLOYEES AND BARTENDERS INTERNATIONAL UNION LOCAL 54 and Frank Gerace President, Hotel and Restaurant Employees and Bartenders International Union Local 54 Appeal of The CASINO CONTROL COMMISSION. Appeal of G. Michael BROWN, Director, Dept. of Law and Public Safety, Division of Gaming Enforcement; and Thomas Kean, Governor.

Nos. 82-5210, 82-5234 and 82-5260.

United States Court of Appeals, Third Circuit.

Argued Nov. 15, 1982.

Decided June 6, 1983.

Bernard N. Katz (argued), Michael N. Katz, Meranze, Katz, Spear & Wilderman, Philadelphia, Pa., for Hotel and Restaurant Employees and Bartender Intern. Union Local 54, et al.

Irwin I. Kimmelman, Atty. Gen., State of N.J., Anthony J. Parrillo, Asst. Atty. Gen. (argued), Gary A. Ehrlich, Deputy Atty. Gen., Dept. of Law & Public Safety, Div. of Gaming Enforcement, Trenton, N.J., for New Jersey Dept. of Law and Public Safety, Div. of Gaming Enforcement.

Robert J. Genatt, Gen. Counsel, Thomas N. Auriemma, Deputy Director/Legal Div., John R. Zimmerman, Senior Asst. Counsel (argued), Thomas O'Neill, Asst. Counsel, Ted M. Rosenberg, Asst. Counsel, N.J. Casino Control Com'n, et al., Trenton, N.J., for New Jersey Casino Control Com'n, et al.

Before GIBBONS, HIGGINBOTHAM and BECKER, Circuit Judges.

OPINION OF THE COURT

GIBBONS, Circuit Judges:

Hotel and Restaurant Employees and Bartenders International Union No. 54 (the Union) and its president, Frank Gerace appeal from an order of the district court denying their motion for a preliminary injunction against enforcement of certain provisions of the New Jersey Casino Control Act, N.J.Stat.Ann. 5:12-1 to -152 (West Supp.1982). ¹ The defendants are members of the New Jersey Casino Control Commission (the Commission) and officials of the New Jersey Department of Law and Public Safety, Division of Gaming Enforcement (the Division.) The Commission and the Division cross-appeal from the denial of their motions to dismiss the complaint. We hold that we lack appellate jurisdiction over the cross-appeals. With respect to the Union's appeal we vacate the denial of the motion for a preliminary injunction and remand for further proceedings consistent with this opinion.

I. Parties and Proceedings in the District Court

The Union is an unincorporated labor organization within the meaning of section 2(5) of the National Labor Relations Act, (NLRA) as amended. 29 U.S.C. Sec. 152 (1976). It has approximately 12,000 members of whom over 8,000 are employed as waiters, waitresses, bartenders, cooks, kitchen help, housekeepers and other hotel service employees in those establishments in Atlantic City, New Jersey, licensed to operate gambling casinos. The Union has been duly certified by the National Labor Relations Board (the Board), pursuant to section 9 of the NLRA, 29 U.S.C. Sec. 159 (1973), as the representative of those employees for purposes of collective bargaining. It is similarly certified for employees of other businesses in southern New Jersey which do not hold gambling casino licenses. The Union participates on behalf of its members in the Hotel and Restaurant Employees and Bartenders International Union Pension Fund, and its Health and Welfare Fund. Both of these funds are employee benefit plans within the meaning of the Employee Retirement Income Security Act of 1974 (ERISA), as amended. 29 U.S.C. Secs. 1001-1381 (1976). President Frank Gerace is a trustee of those funds.

In 1977 the New Jersey Legislature passed the Casino Control Act (the Act), which authorizes the licensing of hotels in Atlantic City for casino gambling. That act establishes a Casino Control Commission with broad regulatory authority over casinos and related industries. N.J.Stat.Ann. 5:12-63 to -75 (West Supp.1982) It also establishes in the Department of Law and Public Safety, which the Attorney General heads, a Division of Gaming Enforcement, charged with responsibility for investigating all applicants for licenses, certificates, or permits, and prosecuting before the Commission or in the state criminal courts all proceedings for violation of the Act or regulations promulgated under it. N.J.Stat.Ann. 5:12-76 to -79 (West Supp.1982). The Act requires licensing not only of casinos, but of casino key employees (supervisors), N.J.Stat.Ann. 5:12-89 (West Supp.1982), and of casino employees. N.J.Stat.Ann. 5:12-90 (West Supp.1982). Casino hotel employees include those performing "service or custodial duties not directly related to operations of the casino, including, without limitations, bartenders, waiters, waitresses, maintenance personnel, kitchen staff, but whose employment duties do not require or authorize access to the casino." N.J.Stat.Ann. 5:12-8 (West Supp.1982). For casino hotel employees the Act requires registration. N.J.Stat.Ann. 5:12-91 (West Supp.1982). Section 86 of the Act lists criteria for the disqualification of casino licensees, and the section dealing with registration of casino hotel employees authorizes the Commission to revoke, suspend, limit or otherwise restrict the registration of any such employee who would be disqualified for a license. N.J.Stat.Ann. 5:12-86, -91(b) (West Supp.1982). All industries offering goods or services to the casinos must also be licensed and are subject to the disqualification criteria of section 86. N.J.Stat.Ann. 5:12-92 (West Supp.1982).

Particularly relevant to this case is the provision in section 93 of the Act, requiring that every labor organization seeking to represent employees licensed or registered under the Act and employed at a casino hotel register with the Commission annually. N.J.Stat.Ann. 5:12-93(a) (West Supp.1982). Section 93 also provides:

No labor organization, union or affiliate registered or required to be registered pursuant to this section and representing or seeking to represent employees licensed or registered under this act may receive any dues from any employee licensed or registered under this act and employed by a casino licensee or its agent, or administer any pension or welfare funds, if any officer, agent, or principal employee of the labor organization, union or affiliate is disqualified in accordance with the criteria contained in section 86 of this act. The commission may for the purposes of this subsection waive any disqualification criterion consistent with the public policy of this act and upon a finding that the interests of justice so require.

N.J.Stat.Ann. 5:12-93(b) (West Supp.1982). Thus section 93 cross-references to the disqualification criteria in section 86. The criteria include convictions of a list of designated offenses or "any other offense which indicates that licensure of the applicant would be inimical to the policy of this act and to casino operations." N.J.Stat.Ann. 5:12-86(c)(4) (West Supp.1982). They also include:

The identification of the applicant or any person who is required to be qualified under this act as a condition of a casino license as a career offender or a member of a career offender cartel or an associate of a career offender or career offender cartel in such a manner which creates a reasonable belief that the association is of such a nature as to be inimical to the policy of this act and to gaming operations. For purposes of this section, career offender shall be defined as any person whose behavior is pursued in an occupational manner or context for the purpose of economic gain, utilizing such methods as are deemed criminal violations of the public policy of this State. A career offender cartel shall be defined as any group of persons who operate together as career offenders.

N.J.Stat.Ann. 5:12-86(f) (West Supp.1982). A union may be disqualified under section 93, therefore, if an officer, agent or principal employee is an "associate of any person whose behavior is pursued in an occupational manner or context for the purpose of economic gain, utilizing such methods as are deemed criminal violations of the public policy of [New Jersey]."

In 1978 the Union filed with the Commission the annual registration statement required by section 93(a). Thereafter the Division of Gaming Enforcement conducted an investigation, and reported to the Commission that in its view Frank Gerace, President, Robert Lumino, Secretary-Treasurer, and Frank Materio, Grievance Manager, were disqualified under the criteria of section 86. The Division requested the Commission to prevent the Union from collecting dues from or administering pension or welfare funds on behalf of employees in the casino hotels. The Commission determined to hold a hearing on the Division's report. At a prehearing conference on June 1, 1981 counsel for the Union raised objections to the constitutionality of sections 86 and 93. The Commission requested briefing on the question of its authority to rule upon such objections, and on August 5, 1981 it ruled that since it was not a court it lacked competence to consider them. The Commission then fixed September 9, 1981 as the date for commencement of an evidentiary hearing on disqualification. Counsel for the Union advised the Commission of his client's...