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Metropolitan Pilots Assoc. L.L.C. v. Schlosberg

July 6, 2001




COOPER, District Judge

This matter comes before the Court on the motion of third-party defendant Moran Towing & Transportation Company, Inc. ("Moran") for summary judgment against third-party plaintiff Rodin Schlosberg ("Schlosberg") pursuant to Federal Rule of Civil Procedure 56, and on Moran's appeal of the magistrate judge's March 23, 2001 Order to the extent it found that counsel for Moran violated 46 U.S.C. § 6308 and the magistrate judge's January 5, 2001 Order by providing the Court with a copy of a Coast Guard report as part of the reply papers filed in connection with Moran's motion for summary judgment. Schlosberg's third-party complaint alleges that as an employee of Moran he was terminated in violation of the Age Discrimination in Employment Act of 1967, 29 U.S.C. § 621 (the "ADEA"), the Americans with Disabilities Act, 42 U.S.C. § 12101 (the "ADA"), and the New York Human Rights Law, N.Y. Exec Laws § 296 (the "NYHRL"). In addition, Schlosberg's third-party complaint alleges that Moran breached a contract between Schlosberg and Moran by failing to provide adequate notice before termination. The motion for summary judgment will be granted as to the discrimination claims because we find as a matter of law that Schlosberg was not an employee of Moran when he was terminated but rather, as a member of the Metropolitan Pilots Association (the "MPA"), he was acting as an independent contractor. The motion for summary judgment will also be granted on the contract claims because we find as a matter of law that the contract sued upon had been superceded by a subsequent contract between the MPA and Moran, and had been abandoned by Schlosberg and Moran. In addition, Moran's appeal from the March 23, 2001 Order will be denied as moot based on our granting of summary judgment in favor of Moran as to all claims contained within the third-party complaint.


The Court has jurisdiction over this controversy based on 28 U.S.C. § 1332(a), in that there is complete diversity between the parties. In addition, the Court has jurisdiction over the third-party action based on 28 U.S.C. § 1331 because adjudication of the third-party action involves questions of federal law.


Schlosberg worked in conjunction with Moran as a tugboat captain and a docking pilot from 1974 until 1989. (Aff. of Captain Rodin Schlosberg ("Schlosberg Aff.") ¶ 4.) Moran contracts with companies to provide docking services to vessels entering and leaving New York harbor. (Aff. of Francis Dee ("Dee Aff.") Ex. D: Dep. of Mark Vanty ("Vanty Dep.") at 1082.) From 1974 until 1988, Schlosberg's duties were interchangeable and included piloting the tug vessels owned by Moran and boarding and piloting the ships entering and leaving the harbor. (Dee Aff. Ex. A: Dep. of Rodin Schlosberg ("Schlosberg Dep.") at 165.) For these services, Schlosberg received income as a W-2 employee as well as medical benefits directly from Moran. *fn1 (Schlosberg Aff. ¶¶ 4, 15.)

On February 14, 1989, following a union strike, Schlosberg and five other docking pilots formed the MPA. (Id. ¶¶ 5, 13.) Each individual member of the MPA then individually contracted with Moran in 1989 and subsequently again in 1992 to provide exclusive piloting services to ships using Moran's tugs to dock or leave port. *fn2 (See, e.g., Dee Aff. Ex. H: Agreement Between Moran Towing & Transportation Co., Inc. and Rodin Schlosberg dated 2-14-89 ("1989 Agreement"); Schlosberg Dep. Ex. Schlosberg-1: Agreement Between Moran Towing & Transportation Co., Inc. and Rodin Schlosberg dated 5-1-92 ("1992 Agreement").) While Moran was paid for its tugboat service, Schlosberg and the other members of the MPA were being paid by the shipowners, through the MPA, for their piloting services. (See Schlosberg Dep. at 177.) The contract also stated Schlosberg would receive income as a 1099 independent contractor from Moran for any non-piloting services provided to Moran during the term of the contract. (1989 Agreement ¶ 7; 1992 Agreement ¶ 7.) Although medical coverage was not available to Schlosberg through Moran's employee health care plan, Moran allowed Schlosberg and the other pilots associated with the MPA to participate in Moran's health care plan if the MPA reimbursed Moran for all the expenses and premiums of the plan. (Aff. of William Muller ("Muller Aff.") ¶ 7.) Moran also provided the MPA pilots with a space on Moran's property to park a trailer. (Dee Aff. Ex. E: Dep. of Douglas Brown ("Brown Dep.") at 445.) This trailer provided sleeping quarters for the MPA pilots during their work shifts and allowed easier communication between the dispatcher and the pilots. (Id.)

In 1996, Moran formed an agreement (the "1996 Agreement") directly with the MPA. *fn3 (Dee Aff. Ex. O: Agreement Between Moran Towing & Transportation Co., Inc. and Metropolitan Pilots Association, L.L.C. dated 4-8-96 ("1996 Agreement").) As a result, the shipowners paid, and were billed by, the MPA for piloting services and the MPA, in turn, paid the pilots. *fn4 (Schlosberg Dep. at 177-79.) Moran paid one fee to the MPA for the non-piloting services of the pilots and the MPA divided the money between its members. (Id.) Moran continued to offer health care coverage to the MPA pilots under its own company plan but the MPA reimbursed Moran for these costs. (Muller Aff. ¶ 8.) MPA employees were not entitled to benefits of a Moran employee such as annual leave, pension, or profit sharing. (Id. at 10, 11.)

When an order came into Moran for tugboat assistance, Moran suggested that the shipowners employ the services of the MPA. (Dee Aff. Ex. C: Dep. of William Muller ("Muller Dep.") at 681.) If the shipowner agreed, Moran would radio the MPA pilot on duty and inform him of the location of the ship. (Vanty Dep. at 1094.) Moran would contact a pilot from a work rotation list given to Moran by the MPA. (Schlosberg Dep. at 252.) If the vessel was leaving, the pilot would board the ship and through help from the tugboats, guide the ship away from the harbor. (Vanty Dep. at 1090.) If the vessel was docking, the pilot would board a Moran tugboat, travel to where the vessel was located, board the vessel, and dock the vessel into the harbor. *fn5 (Id.) The Moran tugboats and the MPA docking pilots must work in collaboration to ensure the safe voyage of the vessel. (Id. at 1082.) The shipowner then pays Moran for its tugboat service and the MPA separately for its piloting services. (Muller Aff. ¶ 3.)

In 1994, the Internal Revenue Service ("IRS") audited Moran and questioned why Moran was not paying employment taxes on the MPA pilots. (Id. ¶ 14.) After Moran submitted a position paper explaining that the MPA pilots provide the bulk of their services to the shipowners, are paid the majority of their income by the shipowners, pay for their own benefits, are not covered under Moran's profit sharing or pension plan and are not instructed or supervised by Moran employees, the IRS concluded that the MPA pilots were not employees of Moran for tax purposes. (Id. ¶¶ 15-16.)

Starting in May 1998, Schlosberg was involved in three accidents over a period of seven months involving the ships he was piloting. *fn6 (Schlosberg Dep. at 292, 318, 333.) On December 18, 1998, the same day as Schlosberg's third accident, Schlosberg had a heart attack that required hospitalization. *fn7 (Schlosberg Aff. ¶ 40.) After Schlosberg's third accident, Moran informed the MPA by telephone that it did not want Schlosberg's name on the rotation of docking pilots and the MPA complied by informing Schlosberg in writing that he was no longer a member of the MPA *fn8 (Vanty Dep. at 1187; Muller Aff. ¶ 17; Naughton Dep. Ex. M: Letter from Naughton to Schlosberg dated 4/14/99.)

Schlosberg subsequently filed a charge with the Equal Employment Opportunity Commission (the "EEOC") alleging that Moran discriminated against him under the ADEA and the ADA. (Dee Aff. Ex. F: Notice of Charge of Discrimination dated 1/12/00.) The EEOC closed its file on the charge finding no employee/employer relationship. (Dee Aff. Ex. G: Dismissal and Notice of Rights dated 3/23/00.)

On October 8, 1999, the MPA filed this action in the Superior Court of New Jersey against Schlosberg seeking a declaratory judgment to expel Schlosberg from the organization. Schlosberg removed the case to this Court based upon the diversity of the parties. Schlosberg filed a counterclaim against the MPA on December 14, 1999, seeking damages for his improper expulsion from the MPA. *fn9 Schlosberg filed a third party complaint against Moran on December 30, 1999. Schlosberg filed an amended third-party complaint on June 23, 2000 stating claims under the ADEA, the ADA, the NYHRL, and state contract law alleging he was terminated from the MPA because of discrimination and breach of his 1992 contract with Moran. Moran has moved for summary judgment claiming that (1) Schlosberg was not an employee of Moran and thus not subject to regulation under the ADEA, the ADA or the NYHRL and (2) the 1996 contract with the MPA superseded the 1992 contract with Schlosberg, therefore the clause in the latter contract entitling Schlosberg to ten days written notice before termination is void and does not constitute a breach of contract. (Third-Party Def.'s Br. in Supp. of Mot. for Summ. J. ("Def.'s Br.") at 1.)


Federal Rule of Civil Procedure 56(c) provides that summary judgment is proper "if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). The party moving for summary judgment bears the initial burden of showing that there is no genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the moving party has met its initial burden, the non-moving party must present evidence that establishes that a genuine issue of material fact exists, making it necessary to resolve the difference at trial. Id. at 324; Jersey Cent. Power & Light Co. v. Lacey Township, 772 F.2d 1103, 1109 (3d Cir. 1985). A non-moving party may not rely on mere allegations; it must present actual evidence that creates a genuine issue of material fact. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986).

In deciding a motion for summary judgment, the Court must view the evidence in the light most favorable to the non-moving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). The role of the judge at the summary judgment stage is not to weigh the evidence, but to determine whether there is a genuine issue for trial. Anderson, 477 U.S. at 249. "By its very terms, the standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Id. at 247-48. Material facts are only those facts that might affect the outcome of the action under governing law. Id. at 248; Boyd v. Ford Motor Co., 948 F.2d 283, 285 (6th Cir. 1991). "[T]here is no issue for trial unless there is sufficient evidence ...

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