13‐3903‐cv Continental Terminals, Inc. v. Waterfront Commʹn of N.Y. Harbor
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
August Term 2014
(Argued: August 25, 2014 Decided: April 3, 2015)
Docket No. 13‐3903‐cv
CONTINENTAL TERMINALS, INC.,
Plaintiff‐Counter‐Defendant‐ Appellant,
v.
WATERFRONT COMMISSION OF NEW YORK HARBOR,
Defendant‐Counter‐Claimant‐ Appellee.
ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
Before: RAGGI, CHIN, AND CARNEY, Circuit Judges.
Appeal from a judgment of the United States District Court for the
Southern District of New York (Swain, J.), granting summary judgment in favor
of the Waterfront Commission of New York Harbor and holding that Continental
Terminals, Inc.ʹs operations at a warehouse in Jersey City, New Jersey fall within
its jurisdiction.
AFFIRMED.
____________________________
RYAN M. FINN, Hacker Murphy, LLP, Albany, NY, for Plaintiff‐Counter‐Defendant‐Appellant Continental Terminals, Inc.
PHOEBE S. SORIAL, General Counsel, Waterfront Commission of New York Harbor, New York, NY, for Defendant‐Counter‐Claimant‐ Appellee Waterfront Commission of New York Harbor. ____________________________
CHIN, Circuit Judge:
In this case, Continental Terminals, Inc. (ʺContinentalʺ) sued the
Waterfront Commission of New York Harbor (the ʺCommissionʺ) for a
declaratory judgment that its operations at a warehouse in Jersey City, New
Jersey were outside the Commissionʹs jurisdiction. Because we conclude that
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Continental engages in stevedoring activities at the warehouse and that the
warehouse is an ʺother waterfront terminalʺ within the meaning of the
Waterfront Commission Act (the ʺActʺ), we hold that its operations fall within
the jurisdiction of the Commission.
STATEMENT OF THE CASE
A. The Commission
In August 1953, the States of New York and New Jersey entered into
an interstate compact, the Act, to address pervasive corruption in New York
Harbor. The Act created the Commission to govern operations at the Port of
New York‐New Jersey. See Waterfront Commʹn of N.Y. Harbor v. Mercedes‐Benz of
N.A., Inc., 99 N.J. 402, 410 (1985).
When the Act was passed, most of the cargo coming through New
York Harbor was handled in the ʺbreak‐bulkʺ shipping method. See id. at 411‐12.
Individual pieces of cargo were loaded onto trucks, driven to the pier, and then
unloaded. The cargo was then loaded piece‐by‐piece onto the vessel. Similarly,
when cargo arrived in New York Harbor, it was unloaded from vessels piece‐by‐
piece, placed on trucks, and then delivered to another destination. Id. at 412.
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Containerization transformed the shipping business. With
containerization, a shipper loaded cargo into a box‐shaped container, typically 20
feet long, 8 feet high, and 8 feet wide, see In re M/V DG Harmony, 394 F. Supp. 2d
649, 652 n.3 (S.D.N.Y. 2005), affʹd in part, vacated in part, and revʹd in part, 533 F.3d
83 (2d Cir. 2008), which was then loaded onto a truck, see Waterfront Commʹn of
N.Y. Harbor, 99 N.J. at 411‐12. The truck transported the container to the pier,
where the container was lifted aboard a ship. Waterfront Commʹn of N.Y. Harbor,
99 N.J. at 412. Upon arrival at the final port, the container was removed from the
vessel, eventually to be transported to a further destination. Id. Container ships
are substantial in size and can hold thousands of containers. See Harmony, 394 F.
Supp. 2d at 652 (describing container ship, which was 176.57 meters long and
27.5 meters wide, and could hold 1,799 containers). See generally Ne. Marine
Terminal Co. v. Caputo, 432 U.S. 249, 269‐79 (1977).
B. Continentalʹs Warehouse Operations in Jersey City
Continental operates a number of warehouses in New Jersey,
including a warehouse at 112 Port Jersey Boulevard, in Jersey City (the ʺ112
Warehouseʺ). As part of its operations there, large cranes that sit on
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ʺstringpiecesʺ1 lift containers of coffee from ships and move them to the
Container Yard at the Global Marine Terminal. See Complaint, Ex. D.
Continental then picks up the containers from the Container Yard and transports
them to its facilities, including the 112 Warehouse.
Once the containers arrive at the 112 Warehouse, Continental
unloads them and removes their contents. Continental stores the freight for
periods ranging from fewer than 30 days to up to 6 months. Continental
provides a number of services for its customers, including unloading cargo;
sampling and weighing cargo to facilitate sales between its customers (shippers
and importers) and buyers; palletizing it; and strapping or wrapping it for future
delivery. Continental draws samples from approximately 25% of its cargo and
provides weighing services for approximately 10% of its cargo. As of October
2010, Continental transported between approximately 100 and 150 containers a
week to its 112 Warehouse.
1 A ʺstringpieceʺ is ʺthe heavy square timber laying along the top of the piles forming a dock front or timber pier.ʺ Special App. 4 n.2 (quoting United States Naval Supply Operational Training Center, Shiploading: A Picture‐Dictionary of Shiploading Terms (1945)). ‐ 5 ‐
C. The Commissionʹs Determination
By letter dated April 12, 2011, the Commission advised Continental
that it was required to obtain a stevedore license for its operations. Continental
disputed that determination. By letter dated May 17, 2011, the Commission
reiterated its decision that Continental was subject to the Commissionʹs
jurisdiction, and that it was required to be licensed as a stevedore. The letter
advised that the Commission concluded that the ʺproperty line and building of
[the 112 Warehouse]ʺ were within 1,000 yards of a pier. The Commission
advised Continental that its determination was ʺfinalʺ and therefore subject to
judicial review.
The Commission identified three pinpoints for determining whether
the 112 Warehouse was within 1,000 yards of a pier: (1) the corner of the Global
Terminal fence line closest to Continentalʹs facilities; (2) the corner of the
Bayonne Tank Ro‐Ro Pier closest to Continentalʹs facilities; and (3) the corner of
the Bayonne Pier located at the U.S. Coast Pier closest to Continentalʹs facilities.
A survey later revealed that at least two of these pinpoints were within 1,000
yards of the 112 Warehouse. Continental disputes that these are proper
pinpoints. D. Procedural History
Continental commenced this action below on July 14, 2011, seeking
(1) a declaratory judgment that its operations at the 112 Warehouse were outside
the jurisdiction of the Commission and (2) a permanent injunction enjoining the
Commission from requiring Continental to register and obtain a license for those
operations. Continental Terminals, Inc. v. Waterfront Commʹn of N.Y. Harbor, No. 11
Civ. 4869, 2013 WL 5477487, at *1 (S.D.N.Y. Sept. 30, 2013).2 The Commission
filed a counterclaim seeking a declaratory judgment that Continentalʹs
warehouse operations fell within its jurisdiction. The parties cross‐moved for
summary judgment. On September 30, 2013, the district court issued a
memorandum order denying Continentalʹs motion for summary judgment and
granting the Commissionʹs motion. Judgment was entered accordingly on
September 30, 2013. This appeal followed.
2 The district court had subject matter jurisdiction over the case pursuant to 28 U.S.C. § 1331 because the case presents a federal question: the Commission is a bi‐state agency formed pursuant to a compact between New York and New Jersey authorized by Congress, and interpretation of such a congressionally authorized compact presents a question of federal law. See M.F. v. State of N.Y. Executive Depʹt Div. of Parole, 640 F.3d 491, 494 (2d Cir. 2011) (holding that interstate compact approved by Congress ʺhas the force of federal lawʺ and thus its interpretation ʺclearly presents a federal questionʺ); see also NYSA‐ILA Vacation & Holiday Fund v. Waterfront Commʹn of N.Y Harbor, 732 F.2d 292, 297 (2d Cir. 1984) (ʺ[T]he Waterfront Commission Compact should be viewed as federal law.ʺ). DISCUSSION
A. Applicable Law
We review the granting of a motion for summary judgment de novo.
Scaria v. Rubin, 117 F.3d 652, 653 (2d Cir. 1997) (per curiam).3
Under the Act, a company engaging in ʺstevedoringʺ activities must
be licensed by the Commission and its employees must be registered as
longshoremen. N.Y. Unconsol. Laws § 9819. A ʺstevedoreʺ is defined as:
a contractor (not including an employee) engaged for compensation pursuant to a contract or arrangement with a carrier of freight by water, in moving waterborne freight carried or consigned for carriage by such carrier on vessels of such carrier berthed at piers, on piers at
3 The district court did not discuss the standard of review to be applied to the judicial review of a determination of the Commission, and it considered the question de novo. On appeal, the Commission suggests that its decision implementing the Act should be afforded ʺsubstantial deference.ʺ See Waterfront Commʹn of N.Y. Harbor v. Constr. & Marine Equip. Co., 928 F. Supp. 1388, 1400 (D.N.J. 1996). In fact, the Commissionʹs decision relies on two subsidiary findings: (1) under the Act, the 112 Warehouse was within 1,000 yards of a ʺpierʺ; and (2) under the Commissionʹs own rulings interpreting the Act, Continental was engaged in stevedoring activity at the 112 Warehouse. The deference accorded to these determinations may vary as a result of their different contexts. Compare Belmonte v. Snashall, 2 N.Y.3d 560, 565‐66 (2004) (observing that agency interpretation is entitled to deference if interpretation involves ʺsome type of specialized knowledge,ʺ but that no deference is warranted where ʺthe question is one of pure statutory reading and analysisʺ), with Building Trades Empʹrsʹ Educ. Assʹn v. McGowan, 311 F.3d 501, 507 (2d Cir. 2002) (ʺWe defer to a state agencyʹs interpretation of its own regulations, unless the interpretation is arbitrary or capricious.ʺ). We need not pursue the question further, however, because, even applying de novo review to the whole, we conclude that the Commissionʹs determination that Continental is subject to its jurisdiction was correct. ‐ 8 ‐
which such vessels are berthed or at other waterfront terminals.
Id. § 9806 (emphasis added). This includes contractors who ʺperform labor or
services incidental to the movement of waterborne freight on vessels berthed at
piers, on piers or at other waterfront terminals, including, but not limited to,
cargo storage, cargo repairing, coopering, general maintenance, mechanical and
miscellaneous work, horse and cattle fitting, grain ceiling, and marine carpentry.ʺ
Id. § 9905(1)(b). The term also includes contractors who ʺperform labor or
services involving, or incidental to, the movement of freight into or out of
containers (which have been or which will be carried by a carrier of freight by
water) on vessels berthed at piers, on piers or at other waterfront terminals.ʺ Id.
§ 9905(1)(c).
Further guidance is provided by the Commissionʹs Rulings, which
define stevedoring activities to include ʺweighing and scaling,ʺ ʺstrapping,ʺ and
ʺsamplingʺ at other waterfront terminals. Rulings of the Waterfront Commission
of New York Harbor on the Applicability of the 1969 Legislative Amendments to
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the Waterfront Commission Act to Certain Situations (the ʺRulingsʺ) II.A.1,2.4
The Rulings also define stevedoring activities to include ʺload[ing] or
unload[ing] containers with freight which has been . . . carried by a carrier of
freight by water . . . within 1,000 yards of a pier,ʺ as well as services performed at
deconsolidation stations, at which a business ʺreceives containers from piers and
4 The Rulings provide in pertinent part:
A. Situations Requiring Licensing and/or Registration
1. Companies engaged in weighing and scaling where the services are performed at piers, vessels or other waterfront terminals are required to be licensed as stevedores and their employees registered.
2. Companies which provide services such as . . . strapping, . . . crating, labeling, marking, . . . cargo inspection and sampling, etc. . . . [must] be licensed and its employees registered where the services are performed at a pier or marine terminal or other waterfront terminal . . . .
Rulings II.A.1, 2. Under the Rulings, a company engaging in ʺregular warehousingʺ is not required to obtain a stevedore license ʺeven though it may on occasion load or unload containers incidental to its warehouse function, except for operations covered under Paragraph [1.A.3].ʺ Rulings I.B.1. Paragraph 1.A.3 provides, in turn, that ʺ[a] warehouse operation by a general stevedore (including loading and unloading of vessels) . . . or a consolidation or deconsolidation station (an operation which moves freight into or out of containers as a regular practice) which is a true extension of the stevedoreʹs . . . or consolidation or deconsolidation stationʹs regular operation and which is performed at a pier or other waterfront terminal requires that the company . . . be licensed as a stevedore and its employees performing the covered work be registered.ʺ Rulings I.A.3.
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terminals and strips cargo from said containers for distribution to consignees.ʺ
Rulings III.A.1.5
An ʺother waterfront terminalʺ is a ʺwarehouse, depot or other
terminal (other than a pier) which is located within one thousand yards of any
5 The Rulings provide in pertinent part:
1. Contractors who, for compensation pursuant to a contract or arrangement with any person, load or unload containers with freight which has been or will be carried by a carrier of freight by water at a pier or a marine terminal, or within 1,000 yards of a pier (other waterfront terminal), require licensing as stevedores and their employees require registration. . . . A deconsolidation station is a facility which in the regular course of business receives containers from piers and terminals and strips cargo from said containers for distribution to consignees. In determining whether . . . deconsolidation is conducted ʺin the regular course of businessʺ the percentage of such . . . stripping as compared to the contractorʹs other work or services shall not be a factor.
B. Situations Which Do Not Requiring Licensing and/or Registration
1. The occasional loading or unloading of containers as incidental to the function of a warehouse or other facility which is not primarily in the business of such loading or unloading of containers does not require the licensing of the company performing such work or the registration of its employees.
Rulings III.A., B.
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pier in the port of New York district and which is used for waterborne freight in
whole or substantial part.ʺ N.Y. Unconsol. Laws § 9806. 6
B. Application
Continental argues that it was not required to be licensed as a
stevedore under the Act for its activities at the 112 Warehouse because (1) its
ʺprimary functionʺ is ʺregular warehousing (i.e., issu[ing] warehouse receipts),ʺ
and that any stevedoring activity was ʺincidental to its warehouse function,ʺ
Appellantʹs Br. at 31 (quoting Rulings I.B.1), and (2) the 112 Warehouse is not an
ʺother waterfront terminalʺ because it is not located within 1,000 yards of a
ʺpier.ʺ We disagree, in both respects.
1. Continental’s Activities
We conclude that the district court correctly held, as a matter of law,
that Continental engages in ʺstevedoring activities.ʺ
6 An ʺother waterfront terminalsʺ is also defined as ʺany warehouse, depot or other terminal (other than a pier), whether enclosed or open, which is located in a marine terminal in the port of New York district and any part of which is used by any person to perform labor or services involving, or incidental to, the movement of waterborne freight or freight.ʺ N.Y. Unconsol. Laws § 9905(10). A ʺmarine terminalʺ is defined as ʺan area which includes piers, which is used primarily for the moving, warehousing, distributing or packing of waterborne freight or freight to or from such piers, and which, inclusive of such piers, is under common ownership or control.ʺ Id. ‐ 12 ‐
Continental provided quintessential stevedoring services under the
Act, as it provided services ʺincidental to the movement of waterborne freight . . .
at other waterfront terminals,ʺ N.Y. Unconsol. Laws § 9905(1)(b), and provided
services ʺinvolving, or incidental to, the movement of freight into or out of
containers . . . at other waterfront terminals,ʺ id. § 9905(1)(c). Continental also
provided stevedoring services under the Commissionʹs Rulings, which, as
discussed above, require licensing and registration for companies and
contractors who provide services including cargo storage; weighing, strapping,
crating, labeling, marking, inspecting, and sampling cargo; and unloading
containers with freight that has been carried by a carrier of freight by water. See
Rulings II.A.1, 2 & III.A.1. As the undisputed facts show, Continental provided
all of these services in connection with containerized cargo removed from
ships ‐‐ some 100 to 150 containers per week ‐‐ at the 112 Warehouse.
Continental picked up the cargo from various local steamship piers, took it back
to its facilities, stored it, and provided the services identified above.
Continental argues, however, that its primary function is regular
warehousing, and that the above‐detailed activities were merely ʺincidentalʺ to
its regular warehousing activities. The district court correctly rejected this
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argument. Continental Terminals, Inc. v. Waterfront Commʹn of N.Y. Harbor, No. 11
Civ. 4869, 2013 WL 5477487, at *4 (S.D.N.Y. Sept. 30, 2013). Even assuming that
Continentalʹs ʺprimary functionʺ is regular warehousing, the level of these other
activities engaged in by Continental was more than ʺincidental.ʺ Indeed,
Continentalʹs business was to ʺgo to the piers, marine terminals, pick up
containerized freight,ʺ and then take the cargo back to its facility where it
ʺunload[ed] the cargo, and then . . . palletize[d] . . . [it] and put it into the
warehouse and h[e]ld it for the client,ʺ providing weighing, strapping, sorting,
and other stevedoring services. Joint App. 42. Clearly, unloading containers was
more than ʺincidentalʺ to its warehouse function; indeed, Continental unloaded
100 to 150 containers per week.
2. Other Waterfront Terminals
The question remains whether Continentalʹs stevedoring activities
take place at an ʺother waterfront terminal.ʺ N.Y. Unconsol. Laws § 9806. The
112 Warehouse is an ʺother waterfront terminalʺ if it is a ʺwarehouse, depot or
other terminalʺ that ʺis located within [1,000] yards of any pier . . . and . . . is
used for waterborne freight in whole or substantial part.ʺ Id.
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Continental argues that the 112 Warehouse is not within 1,000 yards
of a ʺpierʺ because a ʺpierʺ is limited to structures located on the water that are
used for loading and unloading waterborne freight from vessels. Under
Continentalʹs definition, a pier does not include the area where containers are
stored after being removed from a vessel. Thus, according to Continental, the
correct measurement should be from the Global Marine Terminal stringpiece that
directly abuts the water (the actual structure next to which boats dock) to the
corner of the 112 Warehouse, which is 1,119.70 yards. Continental contends that
the Container Yard that is part of the Global Marine Terminal should not be
included.
The Commission argues that a ʺpierʺ is an area where waterborne
freight is loaded, unloaded, and stored, including any area where containers are
stored once removed from the vessel. The Commission contends that the correct
measurement is from the Global Marine Terminal fence line (the border of the
Container Yard where containers are stored) to the corner of the 112 Warehouse.
It is undisputed that the distance from the Global Marine Terminal fence line to
the corner of the 112 Warehouse is 521.99 yards.
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The district court held that the 112 Warehouse is an ʺother waterfront
terminalʺ because it is located within 1,000 yards of a ʺpier.ʺ Continental
Terminals, Inc., 2013 WL 5477487, at *4. Specifically, the district court found that
the ʺpierʺ included the Container Yard within the Global Marine Terminal, and
that therefore the correct measurement was from the Global Marine Terminal
fence line to the corner of the 112 Warehouse. Id. Using that pinpoint, the 112
Warehouse lies within 1,000 yards of a ʺpier.ʺ
We agree. As the district court noted, the definition of ʺpierʺ
includes a ʺwharf.ʺ Id. at *3 (relying on N.Y. Unconsol. Laws § 9806). While a
ʺwharfʺ is not defined in section 9806, it is defined in Blackʹs Law Dictionary as a
ʺstructure on the margin of navigable waters, alongside of which vessels can be
brought for the sake of being conveniently loaded or unloaded, or a space of
ground, artificially prepared, for the reception of merchandise from a ship or vessel, so as
to promote the discharge of such vessel.ʺ Blackʹs Law Dictionary 1767 (4th ed.
1951) (emphasis added); see Taniguchi v. Kan Pac. Saipan, Ltd., 132 S. Ct. 1997, 2002
(2012) (holding that ʺ[w]hen a term goes undefined in a statute, we give the term
its ordinary meaning,ʺ and then consulting ʺdictionaries in use when Congress
enacted [statute in question]ʺ for ordinary meaning); see also The Maritime and
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Shipping Dictionary 654 (2006 ed.) (defining ʺwharfʺ as ʺ[a] structure of open,
rather than solid construction, along a shore or bank which provides berthing for
ships and which generally provides cargo‐handling facilities. A platform
alongside navigable water where ships are loaded and unloaded.ʺ); Oxford‐
English Dictionary Vol. XX 185 (2d ed. 1989) (defining ʺwharfʺ as ʺ[a] place raised
or otherwise marked out on which stuff is deposited for subsequent removal to
another placeʺ). Because a ʺwharfʺ includes the area where containers are
temporarily placed upon discharge while awaiting removal to another location,
the Container Yard at the Global Marine Terminal is part of a ʺpier.ʺ Therefore,
the Commission correctly used the fence line at the Container Yard as the point
of measurement, which is 521.99 yards from the corner of the 112 Warehouse.
In urging otherwise, Continental argues that the Commissionʹs
interpretation equates a pier with a marine terminal, rendering the latter term
superfluous under the Act. We disagree. A ʺmarine terminalʺ is statutorily
defined as ʺan area which includes piers, which is used primarily for the moving,
warehousing, distributing or packaging of waterborne freight or freight from
such piers, and which, inclusive of such piers, is under common ownership or
control.ʺ N.Y. Unconsol. Laws § 9905(10). Thus, a marine terminal is distinct
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from a pier because it consists of a larger area, including piers, which is under
common ownership or control. Further, the movement of waterborne freight
within a marine terminal is subject to more stringent licensing and registration
requirements under the Act. Compare id. § 9806 (defining ʺother waterfront
terminalʺ to include any warehouse located within 1,000 yards of a pier ʺand
which is used for waterborne freight in whole or substantial partʺ (emphasis
added)), with id. § 9905(10) (defining ʺother waterfront terminalʺ to include any
warehouse located in a marine terminal and ʺany part of which is used by any
person to perform labor or services involving, or incidental to, the movement of
waterborne freightʺ (emphasis added)). Accordingly, we identify no error in the
Commissionʹs interpretation.
Our conclusion is consistent with the modern‐day realities of the
handling of waterborne freight and port operations. Containerized freight is
carried in large container ships, large cranes are used, and piers have expanded
to accommodate the high volume of containers discharged from vessels. There
must be room for ʺthe reception of merchandise,ʺ Blackʹs Law Dictionary 1767,
and thus there must be storage areas adjacent to the stringpieces to which
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containers can be moved and held temporarily until they can be carried away.7
These storage areas ‐‐ such as the Container Yard at the Global Marine
Terminal ‐‐ are an important part of the ʺpierʺ as they facilitate the high‐volume
discharge of merchandise from container ships. See Continental Terminals, Inc. v.
Waterfront Commʹn of N.Y. Harbor, 486 F. Supp. 1110, 1115 (S.D.N.Y. 1980)
(holding that Continentalʹs definition of a ʺpierʺ as being limited to the
stringpiece is ʺexcessively restrictiveʺ); Mahoney v. City of Chelsea, 478 N.E.2d 160,
163 (Mass. App. Ct. 1985) (experts agreeing that ʺcommercial dockʺ includes ʺa
storage area to which the cargo can be efficiently moved from the stringpiece and
where it can be held until it is carried awayʺ). Because the 112 Warehouse is
within 1,000 yards of a ʺpier,ʺ it is an ʺother waterfront terminal,ʺ and
Continental is within the jurisdiction of the Commission.8
7 As the Supreme Court has noted, ʺ[c]ontainerization permits the time‐consuming work of stowage and unstowage to be performed on land in the absence of the vessel. The use of containerized ships has reduced the costly time the vessel must be in port and the amount of manpower required to get the cargo onto the vessel. In effect, the operation of loading and unloading has been moved shoreward; the container is a modern substitute for the hold of the vessel.ʺ Ne. Marine Terminal Co., 432 U.S. at 270. 8 In light of our conclusion that the Commissionʹs first pinpoint, the fence line at the Container Yard, is within 1,000 yards of the 112 Warehouse, we do not discuss the second and third pinpoints relied upon by the Commission. ‐ 19 ‐
CONCLUSION
For the foregoing reasons, the judgment of the district court is
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