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WATERFRONT COMM'N OF NEW YORK HARBOR v. CONSTRUCTI

June 18, 1996

WATERFRONT COMMISSION OF NEW YORK HARBOR, Plaintiff
v.
CONSTRUCTION AND MARINE EQUIPMENT COMPANY, INC., Defendant.



The opinion of the court was delivered by: WALLS

 Walls, District Judge

 The Waterfront Commission of New York Harbor ("Commission") has applied for a preliminary injunction restraining Construction and Marine Equipment Co., Inc. ("CME") from performing certain activities that allegedly violate the Waterfront Commission Act, N.J.S.A. § 32:23-1 et seq. (the "compact"). *fn1" Pursuant to N.J.S.A. § 32:23-90, the Commission seeks to enjoin CME from performing services as a stevedore without being licensed, as required by N.J.S.A. § 32:23-19; employing persons to perform the services of longshoremen and checkers who are not included in the longshoremen's register, required by N.J.S.A. § 32:23-27 and - 105; and employing persons as pier superintendents or hiring agents without those employees having first obtained a license, as required by N.J.S.A. § 32:23-12. The defendant, CME, offers several defenses.

 For reasons discussed below, the Court grants the Commission's application for a preliminary injunction.

 I. Background

 In June 1953, the legislatures of New Jersey and New York adopted identical statutes creating the Waterfront Commission, a bi-state instrumentality. N.J.S.A. § 32:23-1 et seq.; N.Y. Unconsol. Laws § 9801 et seq. (McKinney). Plaintiff, the Commission, was formed to seek to eliminate racketeering and other criminal, corrupt and evil labor conditions on the waterfront of the Port of New York District. Reporting for work, large groups of longshoremen would appear at "shape ups." To get work, they would have to pay kickbacks, gamble with a particular person, or borrow at usurious rates from designated lenders. These practices not only "depressed and degraded" waterfront labor, as Article I of the compact put it, but also were criminal or led to crime.

 As required by Article I, § 10 of the United States Constitution, the compact was submitted to Congress for its consent. On August 12, 1953, consent was given. Pub. L. No. 83-252, 67 Stat. 541 (1953). This, though, was no mere approval. Congress not only consented to "all of [the compact's] terms and provisions," but also pre-approved "the carrying out and effectuation of said compact, and enactments in furtherance thereof." In addition, the compact states that

 
amendments and supplements to the compact to implement the purposes thereof may be adopted by the action of the Legislature of either State concurred in by the Legislature of the other.

 N.J.S.A. § 32:23-70.

 Mainly, the supply of waterfront labor would be regulated by a longshoremen's register. *fn2" This register would include "all qualified longshoremen eligible." N.J.S.A. § 32:23-27. And after December 1, 1953, no person could work as a longshoreman within the Port of New York district unless his name was on the register, and no person could employ someone to work as a longshoreman in the district unless that worker was registered. The register was meant to ensure that the supply of waterfront labor did not outstrip demand, and thus remove the vulnerability of laborers to unscrupulous hiring practices.

 A primary duty of the Commission is to maintain the longshoremen's register. This responsibility, as contained in N.J.S.A. §§ 32:23-34 and -38, allowed the Commission to control the labor supply by adding or removing names from the register. The Commission can eliminate individuals from the register who had not been working as longshoremen or looking for such work, and to include additional individuals "on a temporary basis to meet special or emergency needs." See N.J.S.A. §§ 32:23-34 & -38.

 In the early 1960s, new technological developments transformed the cargo transportation industry. The traditional labor-intensive methods of unloading break-bulk vessels gave way to more efficient methods such as containerization. Ships now regularly carry their goods in gigantic containers, which can be moved ashore by gigantic land-based cranes. Containerization has greatly reduced the need for longshoremen.

 Recognizing this, in 1965, waterfront management and labor entered into a collective bargaining agreement that guaranteed an annual income to waterfront laborers, regardless of the availability of work.

 In 1966, the New Jersey and New York legislatures passed legislation to amend the compact. This legislation, signed into law by the governors of the two states, included § 5-p, which places control over the opening and closing of the register in the Commission. In New Jersey, § 5-p was codified as N.J.S.A. § 32:23-114:

 
the commission shall suspend the acceptance of applications for inclusion in the longshoremen's register for a period of 60 days after the effective date of this act. Upon the termination of such 60 day period the commission shall thereafter have the power to make determinations to suspend the acceptance of applications for inclusion in the longshoremen's register for such periods of time as the commission may from time to time establish and, after any such period of suspension, the commission shall have the power to make determinations to accept applications, which shall be processed in the order in which they are filed with the commission, for such period of time as the commission may establish or in such number as the commission may determine, or both. Such determinations to suspend or accept applications shall be made by the commission on its own initiative or upon the joint recommendation in writing of stevedores and other employers of longshoremen in the Port of New York District....

 N.J.S.A. § 32:23-114.

 The statute then goes on to note that

 
in administering the provisions of this section, the commission shall observe the following standards:
 
(a) To encourage as far as practicable the regularization of the employment of longshoremen;
 
(b) To bring the number of eligible longshoremen into balance with the demand for longshoremen's services within the Port of New York District without reducing the number of eligible longshoremen below that necessary to meet the requirements of longshoremen in the Port of New York District;
 
(c) To encourage the mobility and full utilization of the existing work force of longshoremen;
 
(d) To protect the job security of the existing work force of longshoremen;
 
(e) To eliminate oppressive and evil hiring practices injurious to waterfront labor and waterborne commerce in the Port of New York District, including, but not limited to, those oppressive and evil hiring practices that may result from either a surplus or shortage of waterfront labor;
 
(f) To consider the effect of technological change and automation and such other economic data and facts as are relevant to a proper determination.
 
In observing the foregoing standards and before determining to suspend or accept applications for inclusion in the longshoremen's register, the commission shall consult with and consider the views of, including any statistical data or other factual information concerning the size of the longshoremen's register submitted by, carriers of freight by water, stevedores, waterfront terminal owners and operators, any labor organization representing employees registered by the commission, and any other person whose interests may be affected by the size of the longshoremen's register.

 Id.

 In fulfilling its responsibilities under this section, the Commission must consult with waterfront management, labor, and other interested parties. The Commission's determinations are subject to judicial review.

 Pursuant to its power under § 5-p to "suspend the acceptance of applications for inclusion in the longshoremen's register for such periods of time as the Commission may from time to time establish...," the Commission has opened and closed the register. However, since 1969, the Commission has chosen not to open the register. Recently, the Commission conducted public hearings to determine if the register should be opened.

 II. Analysis

 A. Subject matter jurisdiction

 This Court has subject matter jurisdiction over this matter pursuant to 28 U.S.C. §§ 1331 and 1337. As the Supreme Court defined in Cuyler v. Adams, 449 U.S. 433, 66 L. Ed. 2d 641, 101 S. Ct. 703 (1981), "because congressional consent transforms an interstate compact within the Compact Clause into a law of the United States, ... the construction of an interstate agreement sanctioned by Congress under the Compact Clause presents a federal question." Id. at 438 (citations omitted); see also Waterfront Comm'n v. Sea Land Service, Inc., 764 F.2d 961, 963 n.2 (3d Cir. 1985). For the reasons following, the Court determines that the Waterfront Commission compact, including § 5-p, is within the Compact Clause and that Congress has consented to it. Therefore, this Court has federal question jurisdiction.

 B. Standing

 The Commission argues that CME lacks "standing" to raise any constitutional defenses on behalf of its employees or others.

 It is certainly true that one may not claim standing to vindicate the constitutional rights of some third party. Barrows v. Jackson, 346 U.S. 249, 97 L. Ed. 1586, 73 S. Ct. 1031 (1953). However, standing is rarely raised with regard to a defendant. When it is, courts have generally focused on whether the defendant has a sufficient interest to present a justiciable controversy. Natural Resources Defense Council v. Jamison, 787 F. Supp. 231, 235 n.1 (D.D.C. 1990); Charles Alan Wright, Arthur R. Miller, & Edward H. Cooper, Federal Practice and Procedure: Jurisdiction 2d § 3531 (1995). It is undisputed that a significant portion of CME's business has been and will continue to be affected by this litigation. Therefore, CME might appear to have "standing" to raise any constitutional defenses.

 At the same time, the Court recognizes that if CME were to launch a declaratory action against the Commission and make the same constitutional arguments that it does here, it would clearly have to meet the applicable test for standing. And "there appears to be no reason in logic not to require a defendant who seeks to litigate the lawfulness of the government's conduct in such a context to demonstrate its rights to obtain a judicial determination of its contention." FDIC v. Main Hurdman, 655 F. Supp. 259, 269 (E.D. Cal. 1987). Because CME's posture in this case is analogous to that of a plaintiff in a typical standing dispute, the Court determines that CME must show that it has standing to raise any constitutional defenses.

 Three elements are necessary to satisfy "the irreducible constitutional minimum of standing:

 
First, the plaintiff must have suffered an 'injury in fact'--an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical. Second, there must be a causal connection between the injury and the conduct complained of.... Third, it must be likely, as opposed to mere speculative, that the injury will be redressed by a favorable decision.

 United States v. Hays, 132 L. Ed. 2d 635, 115 S. Ct. 2431, 2435 (1995) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 119 L. Ed. 2d 351, 112 S. Ct. 2130 (1992)).

 With regard to the first, the Commission claims that CME cannot suffer injury until it obtains the relevant licenses from the Commission, tries to hire from the longshore register, and then fails to hire any employees. However, there is no doubt that, if the Commission successfully enjoined CME from pursuing its present alleged illegal activities, CME would suffer imminent economic injury. Faced with an injunction, CME would have two stark options: it could simply end these activities from which it currently earns a profit or it could acquire the required licenses and hire longshoremen from the register. In this regard, CME has presented evidence that virtually all of the longshoremen on the register are union members, and that its employees are not. CME has also noted that unionized longshoremen receive wages greater than what it currently pays to its employees. Were the defendant to hire from the register, it would undoubtedly be forced to incur higher labor costs. In short, regardless of which option chosen, CME would have suffered an injury sufficient to confer standing. See Sierra Club v. Morton, 405 U.S. 727, 733, 31 L. Ed. 2d 636, 92 S. Ct. 1361 (1972); Association of Data Processing Service Org., Inc. v. Camp, 397 U.S. 150, 152, 25 L. Ed. 2d 184, 90 S. Ct. 827 (1970).

 The second constitutional element of standing--causation--requires that a plaintiff's injury be "fairly ... traceable to the challenged action of the defendant..." Lujan, 504 U.S. at 560-61 (quoting Simon v. Eastern Kentucky Welfare Rights Org., 426 U.S. 26, 41-42, 48 L. Ed. 2d 450, 96 S. Ct. 1917 (1976)). Here, CME's imminent economic injury stems directly from the attempt by the Commission to require it to comply with the compact.

 The third constitutional element of standing mandates that CME demonstrate that its injury is likely to be redressed by a favorable decision. If CME can defeat the Commission's preliminary injunction motion with its constitutional defenses, it will not suffer economic injury. Therefore, it meets this element.

 In addition to the above constitutional standing requirements, federal courts have also developed prudential standing considerations, which require that:

 
(1) a litigant assert his [or her] own legal interests rather than those of third parties, (2) courts refrain from adjudicating 'abstract questions of wide public significance' which amount to 'generalized grievances,' and (3) a litigant demonstrate that her interests are arguably within the zone of interests intended to be protected by the statute, rule or constitutional provision on which the claim is based.

 Wheeler v. Travelers Ins. Co., 22 F.3d 534, 538 (3d Cir. 1994) (citations and internal quotation marks omitted); see also Valley Forge Christian College v. Americans United for Separation of Church & State, Inc., 454 U.S. 464, 474-75, 70 L. Ed. 2d 700, 102 S. Ct. 752 (1982).

 The first prudential element specifies that a litigant assert his own legal rights, not those of others. Here, the Commission argues that CME attempts to raise constitutional issues on behalf of otherwise qualified individuals who want to be included in the longshoremen's register. However, if the Commission's motion for an preliminary injunction were granted, CME would clearly be directly injured. This Court concludes that CME properly asserts its "own legal interests."

 The second prudential element requires that the arguments of a party such as CME be more than mere "generalized grievances." The Commission contends that CME merely "addresses its case to the rights of the general public." The Court disagrees. CME alleges much more than just an interest "held in common by all members of the public," Schlesinger v. Reservists Comm. to Stop the War, 418 U.S. 208, 220, 41 L. Ed. 2d 706, 94 S. Ct. 2925 (1974), and does not merely use this Court "as a forum in which to air ... generalized grievances about the conduct of government." United States v. Richardson, 418 U.S. 166, 175, 41 L. Ed. 2d 678, 94 S. Ct. 2940 (1974) (citation omitted).

 The third prudential element obliges CME to demonstrate that its interests fall arguably within the zone of interests to be protected or regulated by the constitutional provisions upon which it relies. This is self-evident.

 Therefore, CME has standing to raises its ...


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