Incres Steamship Co. v. International Maritime Workers Union

11 A.D.2d 177, 202 N.Y.S.2d 692, 46 L.R.R.M. (BNA) 2644, 1960 N.Y. App. Div. LEXIS 8628

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: July 6, 1960
• Status: Published

Opinions

Breitel, J.

The question in this case is whether an American labor union may strike a foreign ship engaged in foreign commerce while such ship is in an American port- and, if not, whether a State court may enjoin such activity.

After a trial, Special Term granted a permanent injunction. The union has appealed.

Plaintiff is a Liberian corporation, actually owned and controlled by Italian nationals. It owns two cruise ships, which are registered in Liberia and fly, as a flag of convenience, the flag of that nation. The ships are claimed to have Monrovia, Liberia, as their home port, although it is conceded that the ships have not been known to have visited that port. The ships, catering largely to American custom, generally ply the sea lanes between New York City and ports in the Caribbean. Their crews are of Italian nationality and are recruited under written articles in Italy. The crews take their leave, and the ships are refitted or repaired in Genoa, Italy, on annual European cruises.

Defendant union is called the International Maritime Workers Union. It was conceived in 1959 at a conference of maritime unions held in London, England, and was formed shortly thereafter by two American maritime unions. Its purpose is to organize foreign seamen employed in ships flying various foreign flags of convenience, which ships are competitive with those that fly the American flag and maintain high labor standards.

The union picketed, organized, and eventually struck plaintiff’s two ships while in New York City. As a result the sailings were cancelled. This action ensued and resulted in the permanent injunction which now bars the union from such activity.

There are some peripheral issues and facts raised in the case-but they are hardly determinative: The union stresses the American contacts of the ships by pointing out that their affairs are largely managed in New York City, by an agency corporation, controlled and owned by plaintiff, but incorporated in New York. It stresses too that the cruises run by plaintiff originate in New York City and return there. Plaintiff, on the other hand, stresses various disputed acts committed by the union which it claims to be illegal, but which, on the analysis in this case, it is not necessary to reach.

There are some simple conclusions to be first derived, before the more difficult aspects of the case are considered.

First, the Liberian nationality of plaintiff and the Liberian registry of the ships should not be conclusive of the character of shipping involved. The National Labor Relations Board, in appropriate cases involving “American” ships flying foreign flags of convenience has so determined, and the conclusions are entirely persuasive (Peninsular & Occidental S. S. Co., 120 N. L. R. B. 1097 [7958]; Eastern Shipping Corp., N. L. R. B. Case No. 12-RC-415 [1959], CCH-NLRB Dec. ¶56,698 [1959-1960]). So, too, has the United States District Court in this district (Afran Transp. Co. v. National Mar. Union, 169 F. Supp. 416 [Bryan, J.], in an especially well-considered opinion, cited with evident respect by the Supreme Court in Marine Cooks v. Panama S. S. Co., 362 U. S. 365). Looking beyond the flag of convenience, however, does not change the character of the ships here from foreign to domestic. The shipping is still foreign— Italian in fact — because of Italian ownership, Italian crews, Italian contracts of hiring, and because the ships are engaged in foreign commerce on the high seas. Quite a different case would be presented if the ships were used exclusively or largely on inland waterways,, or for that matter, if one or more of the other factors mentioned were changed. This does not mean that a change in any of these factors would require a contrary result. It is that there would then be a doubtful question of applicability of the Federal labor statute and the rule in Garner v. Teamsters Union (346 U. S. 485) and San Diego Unions v. Garmon (359 U. S. 236) would apply. (See Dooley v. Anton, 8 N Y 2d 91.)

Second, in the absence of Federal pre-emption of the field by' Federal labor statutes or preclusion of jurisdiction by virtue of labor anti-injunction statutes, the striking or other interference with the internal management of the crew of a vessel away from its home port is illegal (Southern S. S. Co. v. Labor Board, 316 U. S. 31). Such interference is illegal because it violates public policy, and, in the case of an American ship, is even a criminal act (U. S. Code, tit. 18, §§ 2192, 2193). Thus, in the Southern 8. S. case, it was held that the National Labor Relations Board could not order the reinstatement of seamen discharged for striking an American ship away from its home port even though it had also found that the men had struck because of the employer’s unfair labor practices in violation of the then National Labor Relations Act. The court said (pp. 38-39): “Ever since men have gone to sea, the relationship of master to seaman has been entirely different from that of employer to employee on land. The lives of passengers and crew, as well as the safety of ship and cargo, are entrusted to the master’s care. Every one and every thing depend on him. He must command and the crew must obey. Authority cannot be divided. These are actualities which the law has always recognized. On the one hand, it has imposed numerous prohibitions against conduct lay seamen which destroys or impairs this authority. We shall consider in a moment the nature and scope of the criminal sanctions imposed in case of revolt and mutiny. But it is worth noting here that the form of the ‘ shipping articles, ’ which the master and every member of the crew must sign prior to the voyage, has been carefully prescribed by Congress, and that these articles contain this promise: ‘ And the said crew agree * * * to be obedient to the lawful commands of the said master * * * and their superior officers in everything relating to the vessel, and the stores and cargo thereof, whether on board, in boats, or on shore * * * ’ TJ. S. C., Title 46, §§ 564, 713. On the other hand, workers at sea have been the beneficiaries of extraordinary legislative solicitude, undoubtedly prompted by the limits upon their ability to help themselves. The statutes of the United States contain elaborate requirements with respect to such matters as their medicines, clothing, heat, hours and watches, wages, and return transportation to this country if destitute abroad. U. S. C., Title 46, §§ 651-692, 1131. It is in this setting of fact and law that we must test the validity of the Board’s order of reinstatement.” The court went on to find that “ the strike was unlawful from its very inception ” (p. 48). The policy underlying this principle in the law of the sea is one that has had recognition for a long time, and insofar as foreign ships are concerned, has special vitality because of the comity among nations (cf. Wildenhus’s Case, 120 U. S. 1; Lauritzen v. Larsen, 345 U. S. 571).

Third, apart from the question of public policy pervading foreign shipping, and particularly the law of the sea as to the management of a ship’s crew, the union activity would be privileged. That is, the economic self-interest of American workers to protect themselves from the competitive depredations of others using foreign labor working under substandard conditions would provide just cause for the intentional economic injury directed to such competition (see Frankfurter and Greene, Labor Injunction, 24 et seq.; Forkosch, Treatise on Labor Law, 398 et seq.; Exchange Bakery & Restaurant v. Rifkin, 245 N. Y. 260). While most of the cases and most of the commentators have considered only domestic disputes, the same principle of justification which applies in the domestic dispute in reason and policy should apply to one involving foreign commerce, provided of course, no other overriding policy or law makes the activity illegal.

*

On application of but these three conclusions last discussed, the union’s activity was wrongful and not privileged, because it interfered with the engagement and management of the ships’ crews while the ships were away from the home port. For this purpose, obviously, Monrovia is not the home port, but neither is New York City, merely because the latter is the most important port in the traffic carried by the ships. For the purposes of this de facto Italian line, it is evident that G-enoa in Italy is the home port.

But the discussion may not be concluded at this point. The questions still remain whether there has been Federal preemption by virtue of the Federal labor statutes and whether there are any jurisdictionally inhibiting labor anti-injunction statutes.

The Supreme Court has held that the National Labor Management Relations Act does not apply to foreign shipping. In Benz v. Compania Naviera Hidalgo (353 U. S. 138,142-144), the court said, referring to the Federal Labor Management Relations Act:

“ The parties point to nothing in the Act itself or its legislative history that indicates in any way that the Congress intended to bring such disputes within the coverage of the Act. Indeed the District Court found to the contrary, specifically stating that the Act does not ‘ cover a dispute between a foreign ship and its foreign crew ’ * * *

“ Our study of the Act leaves us convinced that Congress did not fashion it to resolve labor disputes between nationals of other countries operating ships under foreign laws. The whole background of the Act is concerned with industrial strife between American employers and employees.”

Later, in Marine Cooks v. Panama S.S. Co. (362 U. S. 365, 369), the court, speaking of its holding in the Benz case, said: “ The question in the Benz case was whether the Labor Management Relations Act of 1947 governed the internal labor relations of a foreign ship and its foreign workers under contracts made abroad while that ship happened temporarily to be in American waters. The Bens case decided that the Labor Management Relations Act ’ ’ had no such scope or coverage and that it accordingly did not ‘1 pre-empt the labor relations field so as to bar an action for damages for unlawful picketing under Oregon law.”

Notably, the Supreme Court did not hold that there was a Congressional abstention from regulating in the field, so that there might be a pre-emption by silence, that is, an intention to leave the area of foreign shipping untrammelled by the several regulatory prohibitions and protections provided in the Federal statute. Instead, it held that Congress did not intend to apply the Federal statute at all to foreign shipping. In consequence, the rule in Garner v. Teamsters Union (346 U. S. 485, supra) and San Diego Unions v. Garmen, supra, (359 U. S. 236, supra) is similarly inapplicable.

True, in this case, as distinguished from the Bens case, the contact with the American port is regular rather than a one-instance occurrence. But, in both cases, the custom is American: in the one a cargo of wheat was to be taken on for transhipment, while in the other it consists of American passengers. The distinction is not sufficient to avoid the impact of the holding in the Bens case.* Moreover, until the Supreme Court narrows the major premise of the holding in the Bens case, a State court is concluded by it.

In the airline field- there is an example of intentional Congressional abstention from applying a labor statute to events and relationships occurring in foreign commerce outside the continental United States. Thus it has been held that the Railway Labor Act (U. S. Code, tit. 45, § 151 et seq.) does not apply to employees of American airlines engaged in flights between points outside the continental United States, based entirely and exclusively on legislative intention (Air Line Stewards v. Northwest Airlines, 267 F. 2d 170, cert, denied 361 U. S. 901; see, also, Air Line Dispatchers Assn. v. National Mediation Bd., 189 F. 2d 685, 690, cert, denied 342 U. S. 849).

Consequently, it is not possible to find that the Federal labor statute applies to foreign shipping or to the dispute which gave rise to this case. Hence, there is no Federal pre-emption ousting the State courts of jurisdiction.

The Federal labor anti-injunction statute (U. S. Code, tit. 29, § 101 et seq.) applies, of course, only to the Federal courts. In Marine Cooks v. Panama S. S. Co. (362 U. S. 365, supra), it was held that the Federal anti-injunction statute deprived Federal courts of jurisdiction to enjoin illegal labor union activity in foreign shipping, even though the Federal labor statute (Labor Management Relations Act) did not apply. In brief, it was held that the anti-injunction statute had a broader applicability than did the regulatory labor statute.

While it is true that New York’s labor anti-injunction statute (Civ. Prac. Act, § 876-a) was closely fashioned after the Federal statute, and it is even arguable that it was intended to be even more restrictive of judicial labor injunctions, the New York statute has been much more narrowly defined by the highest court of this State. It has been held that, in order for a dispute to qualify under the statute as a “ genuine labor dispute ”, the dispute must have had a ‘1 lawful purpose ’ ’. (Goodwins, Inc. v. Hagedorn, 303 N. Y. 300, 305; Dinny & Robbins v. Davis, 290 N. Y. 101; cf. Florsheim Shoe Store Co. v. Shoe Salesmen’s Union, 288 N. Y. 188; American Guild of Musical Artists v. Petrillo, 286 N. Y. 226; Opera on Tour v. Weber, 285 N. Y. 348; Thompson v. Boekhout, 273 N. Y. 390; see May’s Furs & Ready-to-Wear v. Bauer, 282 N. Y. 331; Arnold Bakers v. Strauss, 1 A D 2d 604, 608, appeal dismissed 2 N Y 2d 721.) As a novel question one might well quarrel with such a rendition of the statute, but the weight of authority is hardly escapable by an intermediate appellate court.

Consequently, it is concluded that no labor anti-injunction statute precludes the State court from enjoining the “ illegal ” activity of defendant union in striking plaintiff’s ships and picketing for the purpose of inducing a breach of the articles of hiring of .the ships’ crews and the disciplines of the ships.

In reaching these conclusions one is aware of the substantial competitive effect of these foreign flag ships upon the condition of the American seaman. But the problem is one for Congress. It has the power to take whatever action is necessary, for the solution is largely limited only by its own discretion (Benz v. Compania Naviera Hidalgo, 353 U. S. 138, 142, supra). Indeed, the Federal Government has not hesitated in many areas to intrude on the “internal economy ” of a foreign ship as a condition to entry into American ports (see Benz case, supra, pp. 144-145). It is one thing for Congress to intrude in this field; it would be quite another for the courts to do so. This was expressed succinctly in the Bens case: “ For us to run interference in such a delicate field of international relations there must be present the affirmative intention of the Congress clearly expressed. It alone has the facilities necessary to make fairly such an important policy decision where the possibilities of international discord are so evident and retaliative action so certain. We, therefore, conclude that any such appeal should be directed to the Congress rather than the courts.” (p. 147.) A State court can hardly say less; it should not say more.

On the foregoing reasoning the order and judgment granting a permanent injunction should be substantially affirmed. In one respect, however, it requires modification. The second ordering paragraph should be modified to provide that the words ‘ ‘ also from picketing said vessels for any purpose ” should read “ also from picketing said vessels for any such purpose ”, the word ‘6 such ” being necessary to limit the injunction to the condemned activity as presented in this case.

Accordingly, the order and judgment should be modified, on the law and the facts, and in the exercise of discretion, to insert the word “ such ” in the second ordering paragraph as herein-above-mentioned, and should otherwise be affirmed, with costs to plaintiff-respondent.

On this analysis, there is disagreement with the conclusion of the trial court that defendant union did not have an economic self-interest in seeking to organize plaintiff’s ships, which interest might justify the union’s economic activity, provided its methods did not fail of legality for other reasons, sue* as interference with the ship’s discipline, secondary boycott, and the like.

“ But application of American statutes to labor relations on board foreign oceangoing vessels only transitorially in United States waters presents different problems and must be considered in light of principles of international law. Under settled doctrine, ports and adjacent waters are within the sovereign territory of the coastal state, which may, therefore, prohibit access by foreign vessels or permit entry only on such conditions as it may choose to impose. The absolute power of the coastal state is tempered, however, by the demands of comity among nations, which require it to exercise a high degree of self-restraint, particularly in matters involving the ‘ internal economy ’ of a foreign vessel.

“ In determining whether to exercise its sovereign prerogatives, the coastal state must consider its self-interest shared with other nations — an ‘ inclusive ’ interest — in free commercial navigation in addition to the local interests which it seeks to protect by exercise of jurisdiction — its 1 exclusive ’ interests -— and the exclusive interests of foreign states. Regulation which constitutes an unreasonable interference with the internal economy of foreign ships may evoke defensive exercise of jurisdiction by other coastal states, thus subjecting oceangoing vessels to different laws in every port. For example, if a coastal state required that every vessel entering its waters employ a crew consisting entirely of the coastal state’s nationals, other states might be forced to respond by comparable legislation, and mutually beneficial world trade would be brought to a virtual standstill.” (Comment: The Flag-of-Convenience Fleet, 69 Yale L. J. 498, 504-505.)