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Korea Shipping Corp. v. New York Shipping Association

decided: July 24, 1989.

KOREA SHIPPING CORPORATION, PLAINTIFF-APPELLANT,
v.
NEW YORK SHIPPING ASSOCIATION -- INTERNATIONAL LONGSHOREMEN'S ASSOCIATION PENSION TRUST FUND AND THE BOARD OF TRUSTEES OF THE NYSA-ILA PENSION TRUST FUND, DEFENDANTS-APPELLEES; DELTA STEAMSHIP LINES, INC., PLAINTIFF-APPELLANT, V. NEW YORK SHIPPING ASSOCIATION -- INTERNATIONAL LONGSHOREMEN'S ASSOCIATION PENSION TRUST FUND, THE BOARD OF TRUSTEES OF THE NEW YORK SHIPPING ASSOCIATION INTERNATIONAL LONGSHOREMEN'S ASSOCIATION PENSION TRUST FUND, DEFENDANTS-COUNTERCLAIM PLAINTIFFS-APPELLEES, DELTA STEAMSHIP LINES, INC., CROWLEY MARITIME INTERNATIONAL (INC) AND CROWLEY MARITIME CORPORATION, COUNTERCLAIM CO-DEFENDANTS APPELLANTS



Korea Shipping Corporation and Delta Steamship Lines, Inc. appeal from the grants of summary judgment in the United States District Court for the Southern District of New York (Weinfeld, J., Conboy, J. and Leisure, J.) respectively, in favor of the New York Shipping Association--International Longshoremen's Association Pension Trust Fund, et ano, determining that appellants are employers subject to withdrawal liability under the Multiemployer Pension Plan Amendments Act, 29 U.S.C. § 1381 et seq. (1982). Affirmed and remanded.

Oakes, Kearse and Cardamone, Circuit Judges.

Author: Cardamone

CARDAMONE, Circuit Judge

We consider two separate appeals presenting identical legal issues: Whether appellants shipping companies are "employers" under the Multiemployer Pension Plan Amendments Act (MPPAA or the Act), 29 U.S.C. § 1381 et seq. (1982), and whether they are therefore subject to "withdrawal liability" under that Act upon ceasing their operations in the Port of New York. The carriers' chief contention is that Congress' use of the term "employer" requires us to construe that word as it is generally understood in the common law, and that under that definition they are not employers for purposes of MPPAA withdrawal liability. On appeal, they argue in effect that the trial courts' wholly different reading of the word employer reinforces the notion that words don't mean what they say but only, as Alice tells us, what we say they mean. See L. Carroll, Alice's Adventures in Wonderland (London 1865).

Appellant Korea Shipping Corporation (Korea) appeals a grant of summary judgment in favor of defendants, the New York Shipping Association -- International Longshoremen's Association Pension Trust Fund (Fund) and its Board of Trustees, that held appellant to be an employer subject to withdrawal liability under the MPPAA. The district court decision, entered on June 25, 1987 by the United States District Court for the Southern District of New York (Weinfeld, J.), reported at 663 F. Supp. 766, was reaffirmed following Judge Weinfeld's death on a motion for reconsideration by Judge Conboy of the Southern District on June 8, 1988. Appellant Delta Steamship Lines (Delta) appeals a similar determination entered on April 5, 1988 in the same district court (Leisure, J.), reported at 688 F. Supp. 1560.

These suits were commenced by the carriers as declaratory judgment actions in which they sought rulings that they were not employers under the MPPAA. In both actions, the Fund counterclaimed for the amounts allegedly due as the carriers' withdrawal liabilities. The parties cross-moved for summary judgment on the employer issue in each case, and in both instances the Fund prevailed. The carriers appeal the district court's determinations that as MPPAA employers ceasing operations in the Port of New York they are subject to withdrawal liability. We affirm.

FACTS

A. Operations at the Port of New York

The only real dispute between the parties is appellants' status as employers under the MPPAA, and the facts necessary to its resolution are largely agreed upon. To put this issue in proper perspective, it is necessary to examine briefly the unique history of the longshore industry in the Port of New York.

Appellants' vessels called at the Port's marine terminals that are owned and operated by stevedoring companies engaged in the business of loading and unloading ships. A registered pool of longshore employees is available to work the vessels of any carrier; the longshoremen constitute a "floating" work force whose employers change frequently and whose seniority and eligibility for fringe benefits are determined on the basis of their work throughout the Port, not by attachment to any particular company. Carriers provide the work and their ships the workplace. The longshoremen's union negotiates collective bargaining agreements with the stevedoring companies and the carriers that establish the terms and conditions of the longshoremen's employment in the Port.

In litigation concerning whether the Rules on Containers and the work preservation provisions in the longshore contract constituted unlawful secondary activity under §§ 8(b)(4)(B) and 8(e) of the National Labor Relations Act, the carriers were recognized to be longshore employers. See NLRB v. Int'l Longshoremen's Ass'n, 447 U.S. 490, 496 n. 10, 65 L. Ed. 2d 289, 100 S. Ct. 2305 ; id. at 499 n. 13; id. at 512 (1980); see also NLRB v. Int'I Longshoremen's Ass'n, 473 U.S. 61, 74 n. 12, 87 L. Ed. 2d 47, 105 S. Ct. 3045 (1985). In the Port of New York, the National Labor Relations Board (NLRB) has certified the New York Shipping Association, Inc. (NYSA) as a bargaining unit. Although NYSA's membership consists of carriers, stevedoring companies, carrier agents, and other maritime concerns, the NYSA has historically been under the control of its carrier members.

The obligation for funding the costs of the longshoremen's fringe benefits has been imposed by contract upon the carriers, not on the stevedoring companies. The bitter collective bargaining conflict between the carriers and the International Longshoremen's Association (ILA) sparked by the introduction of containerized methods of cargo handling was finally resolved in 1968 after a lengthy strike and the intervention of a presidential mediator. The labor accord reached required the union to relinquish its demands for limits on containerization in exchange for, among other things, the establishment of a program of enhanced fringe benefits to compensate longshoremen for the effects of the job displacement caused by containerization.

Thus, the advent of containerization and the execution of the 1968 labor contract brought about significant new developments in the carriers' status in the Port of New York. From 1968 to the present the carriers not only continued to negotiate the terms and conditions of longshore employment and the level of longshore employee benefits, but also directly undertook the obligation to pay-- and did in fact pay -- the contributions necessary to fund these benefits. The key feature of the assessment system in effect in the Port of New York for the past two decades is that the obligation for longshore fringe benefit assessments is placed directly upon the vessel carriers based on the tons of cargo loaded and unloaded by longshoremen from their vessels.

Korea and Delta engaged in steamship carrier operations at the Port from 1967 to 1985 and 1978 to 1983 respectively, undertaking a variety of operations which included the loading and unloading of their general cargo and container vessels. Neither company directly employed its own labor force to service its ships, and neither operated its own marine terminal facility. When appellants' ships entered the Port, they called at terminals operated by the stevedoring companies where their vessels loaded and discharged their cargo with the aid of longshoremen directly employed by the stevedoring companies.

B. Collective Bargaining Agreements

Operations at the Port are carried out under two collective bargaining agreements -- (1) the so-called "master contract," encompassing operations at major ports on the Atlantic and Gulf coasts of the United States, and (2) a local New York labor accord known as the General Cargo Agreement (GCA). The master contract governs the general terms of employment that apply uniformly in eastern ports where the ILA functions. Both agreements were negotiated by the ILA as the representative of the rank and file longshoremen and by the New York Shipping Association and its counterpart organizations in other eastern ports as the representatives of the carriers, the stevedores, and other employers of longshoremen.

The master contract sets uniform terms applicable to ports in which the ILA functions and covers such items as wages, hours, pension and welfare contributions, containerization agreements, and the payment of "job security program assessments" as a means of offsetting shortfalls in contributions to, inter alia, longshoremen pension funds. As members of the NYSA, Korea and Delta were parties to the master contract and, in some instances, were also direct signatories. The General Cargo Agreement, also a product of bargaining between the ILA and the NYSA, governs the local terms and conditions of employment in the Port of New York such as pension benefits, seniority, hiring, safety, ...


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