West Winds, Inc. v. M.V. Resolute, 82-4717

• Decision Date: 21 November 1983
• Docket Number: No. 82-4717,82-4717
• Citation: 720 F.2d 1097
• Parties: , 99 Lab.Cas. P 34,469 WEST WINDS, INC., Nautical Electric, Inc., and Schou-Gallis Co., Ltd., Plaintiffs-Appellees, and R. Rothmann, J. Wagner, A. Patterson, G. Valentine, J. O'Laughlan, S. Veal, et al., Applicants-in-Intervention-Appellants, v. M.V. RESOLUTE, and M.V. Pvt. Peters, in rem, and Coast Line Associates, in personam, Defendants-Appellees, and Coast Line Associates, Claimant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1097

720 F.2d 1097

1984 A.M.C. 319, 99 Lab.Cas. P 34,469

WEST WINDS, INC., Nautical Electric, Inc., and Schou-Gallis Co., Ltd., Plaintiffs-Appellees and R. Rothmann, J. Wagner, A. Patterson, G. Valentine, J O'Laughlan, S. Veal, et al Applicants-in-Intervention-Appellants, v. M.V. RESOLUTE, and M.V. Pvt. Peters, in rem, and Coast Line Associates, in personam, Defendants-Appellees and Coast Line Associates, Claimant-Appellee.

No. 82-4717.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted June 13, 1983.

Decided Nov. 21, 1983.

Richard S. Zuckerman, Washington, D.C., Leonard & Carder, San Francisco, Cal., for applicants-in-intervention-appellants.

Mark J. Kenney, Severson, Werson, Berke & Melchior, San Francisco, Cal., for appellees.

Appeal from the United States District Court for the Northern District of California.

Before ALARCON, CANBY, and REINHARDT, Circuit Judges.

REINHARDT, Circuit Judge:

Appellants are 23 seamen and the trustees of their union's trust funds whose motion to intervene of right under Fed.R.Civ.P. 24(a)(2) was denied by the district court. The sole issue on appeal is whether contributions to trust funds created for the benefit of the employees are "wages of the crew" that may serve as the basis for a preferred maritime lien under 46 U.S.C. Sec. 953 (1976). We are compelled by precedent in this circuit to hold that they are not, at least in the absence of a loss of benefits. Accordingly, we affirm the district court's denial of the motion to intervene.

West Winds, Inc., Nautical Electric, Inc., and Schou-Gallis Co., Ltd., filed an admiralty complaint against the M/V RESOLUTE, in rem, and Coast Line Associates, the owner and operator of the vessel, in personam, under 46 U.S.C. Sec. 971 (1976), to recover the costs of repairs, supplies, and other necessaries furnished to the vessel. The 23 seamen appellants were employed by Coast Line Associates between January and June 1982. Under the provisions of its collective bargaining agreement with the International Organization of Masters, Mates and Pilots, Coast Line was required to contribute to trust funds that provide health, retirement, pension, training, vacation, and similar benefits to the seamen. Coast Line failed to make the contributions for the 23 seamen as required by the collective bargaining agreement. To protect their interest in procuring the payment of the delinquent trust fund contributions, the trustees and the seamen sought to intervene of right in the underlying action under Fed.R.Civ.P. 24(a)(2).

Appellants claim that the delinquencies give rise to a preferred maritime lien as "wages of the crew" under the Ship Mortgage Act of 1920, section 30, subsection M, 46 U.S.C. Sec. 953 (1976). Under the Act, "a lien for ... wages of the crew of the vessel" is a "preferred maritime lien" that has priority over all other claims and may be asserted in any in rem proceeding brought against a vessel. Id. Appellants maintain that, because contributions to the trust funds are a form of compensation, they should be treated as "wages of the crew." They do not allege, however, that the failure to make contributions has caused or will cause any loss of benefits.

The district court issued a memorandum and order denying appellants' motion to intervene. Relying upon Long Island Tankers Corp. v. S.S. Kaimana, 265 F.Supp. 723 (N.D.Cal.1967), the district court held that the delinquent trust fund contributions were not "wages of the crew" for purposes of section 953 and that therefore there was no basis for the assertion of a preferred maritime lien. Accordingly, the district court held that the applicants-in-intervention did not allege "an interest relating to the property or transaction which is the subject of the action" as required for intervention of right under Fed.R.Civ.P. 24(a)(2).

I

Intervention of right under Fed.R.Civ.P. 24(a)(2) requires a timely showing that the applicant possesses an interest relating to the property or transaction which is the subject of the suit and is so situated that the disposition of the suit may as a practical matter impair the ability to protect that interest, and in addition that the applicant's interest is not adequately represented by the existing parties.

State of Idaho v. Freeman, 625 F.2d 886, 887 (9th Cir.1980) (citations omitted); see Sagebrush Rebellion, Inc. v. Watt, 713 F.2d 525, 527 (9th Cir.1983); Smith v. Pangilinan, 651 F.2d 1320, 1323-25 (9th Cir.1981); Blake v. Pallan, 554 F.2d 947, 951-55 (9th Cir.1977). Denial of a motion to intervene of right is a final order and therefore appealable under 28 U.S.C. Sec. 1291 (1976). See Sagebrush Rebellion, 713 F.2d at 527; County of Fresno v. Andrus, 622 F.2d 436, 438 (9th Cir.1980) (citing Blake v. Pallan, 554 F.2d at 951 n. 5). Because we agree with the district court that applicants-in-intervention do not possess a cognizable interest under 46 U.S.C. Sec. 953, we need not decide whether the other requirements of Rule 24(a)(2) are met.

II

As appellees argue, there is Ninth Circuit precedent directly on point in this case. In Cross v. S.S. Kaimana, 401 F.2d 182 (9th Cir.1968) (per curiam), cert. denied, 393 U.S. 1095, 89 S.Ct. 879, 21 L.Ed.2d 785 (1969), in a one sentence opinion, we adopted the reasoning of the district court and held that contributions of employers to trust funds created pursuant to collective bargaining agreements to provide vacation, pension, and welfare benefits to seamen do not constitute "wages of the crew" under 46 U.S.C. Sec. 953. The district court decision, Long Island Tankers Corp. v. S.S. Kaimana, 265 F.Supp. 723 (N.D.Cal.1967), affirmed in Cross, addressed a factual situation strikingly similar to the one before us. In that case, as here, the employers were required to make contributions to the trust funds based upon the number of days and type of work performed by their employees. In Long Island Tankers, after several employers failed to make contributions the trustees of the funds brought an action seeking to assert preferred maritime liens to recover the contributions as "wages of the crew" under 46 U.S.C. Sec. 953. The district court dismissed the action and held that the contributions were not "wages of the crew" that could serve as the basis for the trustees' assertion of preferred maritime liens. See 265 F.Supp. at 726-27.

Appellants contend that we should distinguish Long Island Tankers because seamen, as well as trustees of the trust funds, seek to assert the lien here. We decline to do so. Appellants correctly assert that Long Island Tankers reserved a question regarding the right of seamen to assert a preferred maritime lien. The question reserved, however, was only whether seamen could assert a preferred maritime lien for a loss of benefits caused by an employer's failure to make trust fund contributions. 265 F.Supp. at 727-28. The court did not reserve the question whether seamen could assert a preferred maritime lien for a failure to make contributions when no accompanying loss of benefits was claimed. In reserving the question it did, the court expressly relied on the distinction between contributions that merely serve to fund benefits and the benefits themselves. Id. at 727-29. Because the seamen here do not allege any loss of benefits due to Coast Line's failure to make the trust fund contributions, we hold that they fall within the rule established in Long Island Tankers. However, like the court in that case, we reserve to another day the question whether seamen may assert a preferred maritime lien for a loss of benefits caused by an employer's failure to make contributions.

Appellants challenge the present-day validity of the reasoning of Long Island Tankers. In Long Island Tankers the court relied heavily upon the Supreme Court's decision in United States v. Embassy Restaurant, Inc., 359 U.S. 29, 79 S.Ct. 554, 3 L.Ed.2d 601 (1959). Embassy Restaurant held that employer contributions to trust funds were not entitled to priority over other debts as "wages ... due to workmen" under the Bankruptcy Act. See 359 U.S. at 35, 79 S.Ct. at 558. Claiming that Embassy Restaurant was "overruled" by Congress in the Bankruptcy Reform Act, Pub.L. No. 95-598 Sec. 507, 92 Stat. 2549, 2583-85 (1978), appellants argue that Long Island Tankers is no longer good law. We disagree.

In the Bankruptcy Reform Act, Congress placed "contributions to employee benefit plans" immediately below "wages, salaries, or commissions" on the hierarchy of debt priorities in bankruptcy proceedings. See 11 U.S.C. Sec. 507(a)(3), (4). Although the legislative history of 11 U.S.C. Sec. 507(a)(4) states that it "overrules" Embassy Restaurant, see S.Rep. No. 989, 95th Cong., 2nd Sess. 69 (1978), reprinted in 1978 U.S.Code Cong. & Ad.News 5787, 5855, the statement is not entirely accurate. In Embassy Restaurant, the Court declined to treat contributions as wages; when Congress adopted the Bankruptcy Reform Act, it, too, refused to treat contributions as wages. Instead, it created a completely new category, with a lesser priority than wages, for such claims. Under the Bankruptcy Reform Act, if there are insufficient funds to pay both wages and contributions, the wages are paid and the contributions are not. This type of lesser priority for contributions was not considered by the Embassy Court.

In any event, Congressional action in response to a court's interpretation of a statute may not necessarily indicate disagreement with the court's analysis. See generally 1A J. Sutherland, Statutes and Statutory Construction ch. 22 (C. Sands 4th ed. 1972) (discussing judicial treatment of amendments to a statute). In fact, Congressional amendment of a statute may mean that Congress agrees with the court's interpretation of the existing statute, but believes that changed circumstances require amendment. All that can be said with certainty about the fact that a statute has been amended is that the amendment presumably...