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New York Shipping Association, Inc v. Waterfront Commission of New York Harbor

March 18, 2011

NEW YORK SHIPPING ASSOCIATION, INC., PLAINTIFF,
v.
WATERFRONT COMMISSION OF NEW YORK HARBOR, DEFENDANT.



The opinion of the court was delivered by: Linares, District Judge.

NOT FOR PUBLICATION

OPINION

This matter comes before the Court by way of a motion to dismiss filed by Defendant on February 3, 2011 for lack of subject matter jurisdiction under Rule 12(b)(1) of the Federal Rules of Civil Procedure and for failure to state a claim upon which relief can be granted under Rule 12(b)(6). The Court has considered the parties' submissions in support of and in opposition to the present motion and decides the matter without oral argument pursuant to Rule 78. For the reasons set forth below, Defendant's motion is granted.

I. BACKGROUND

The following facts are taken from Plaintiff's Amended Complaint unless otherwise noted. Plaintiff, the New York Shipping Association (the "NYSA") is an association of marine terminal operators, stevedoring companies, and vessel operators engaged in international trade and commerce in the Port of New York and New Jersey (the "Port"). The NYSA negotiates and administers collective bargaining agreements with workers represented by various trade unions.

Defendant, the Waterfront Commission of New York Harbor (the "Commission") is an instrumentality of the States of New York and New Jersey that oversees operations of the Port through licensing, regulatory, and investigatory powers. The Commission was created in 1953 under the Waterfront Commission Compact, an interstate compact between New York and New Jersey. The Commission operates pursuant to the Waterfront Commission Act ("WCA"), N.J. Stat. Ann. §§ 32:23-1, et seq., which incorporates the terms of the Waterfront Commission Compact. Among the Commission's duties is the issuance of licenses to companies that operate in the Port. The Commission bases its licensing determinations on the "good character and integrity" of the applicant company. Id. at § 32:23-21(b). The Commission obtains revenue from statutory assessments paid by companies operating in the Port, including members of the NYSA. The WCA limits this assessment as not to exceed two percent. Id. at § 32:23-58.

In August 2010, the Commission announced a plan to implement a program in which Independent Private Sector Inspectors General ("IPSIGs") could provide additional oversight of operations within the Port. The Commission circulated a "Request for Expressions of Interest and Statements of Qualification in Being Considered for Appointment as an Independent Private Sector Inspector General," seeking applicants interested in acting as IPSIGs and describing the IPSIG program as follows:

The IPSIG will establish and maintain internal controls designed to deter unethical or illegal conduct, and will report any unethical or illegal conduct observed to the Commission. The IPSIG will examine the operations of stevedoring companies to ensure that they run effectively without fraud, criminal influence, improper accounting and/or hiring practices, or other malfeasance. The Commission may require a stevedoring company to retain an IPSIG pursuant to a responsibility agreement or stipulation with the Commission, in order for that stevedoring company to continue to operate in the Port.

Upon selection by the Commission, the IPSIG will be hired by the stevedoring company but will report directly to the Commission, with the stevedoring company retaining responsibility for payment of the IPSIG's services. (Am. Compl. Ex. 1 (emphasis added).)

On September 23, 2010, members of the Commission appeared before the New Jersey Senate Economic Growth Committee.*fn1 The Commission's Executive Director, Walter Arsenault, testified that the Commission will not in fact "require" that a stevedoring company retain an IPSIG, as suggested in the August 2010 circular, but rather that such companies would have the option to retain an IPSIG in order to maintain their license to operate in the Port, should licensure have otherwise been denied by the Commission.*fn2 Mr. Arsenault testified that applications for licenses are reviewed by the members of the Commission, and if the Commission finds that the company does not possess the "requisite good character and integrity," it then issues a notice of hearing. Senate Committee Hr'g at 31. Mr. Arsenault stated that following the denial of a license application,

[the applicant] can go and have the hearing, or they can request and accept an IPSIG. If they lose the hearing, they have the opportunity to appeal it to the Commissioners, or they can accept an IPSIG. If they lose with the Commissioners, they have the opportunity to accept an IPSIG or to appeal it to the courts in the states of New York and New Jersey. And even after they lose that hearing -- rather than close down the company, we want to give those companies an opportunity to continue to employ people in the Port of New York, and we're willing to offer them an IPSIG program.

Id. Plaintiff does not dispute Mr. Arsenault's description of the IPSIG program and its relevant procedures.

On October 29, 2010, the NYSA filed the instant action seeking a declaratory judgment that the IPSIG program exceeds the Commission's statutory authority, violates the Commission's enabling statute, and violates constitutional separation of powers. The NYSA further seeks an ...


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