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International Longshoremen's Association v. New York Shipping Association Inc.

decided: November 18, 1968.


Feinberg, C. J.

Author: Feinberg


Petitioner International Longshoremen's Association, AFL-CIO ("the Union") appeals from an order of the United States District Court for the Southern District of New York, Edward C. McLean, J., denying the Union's petition to compel arbitration of a dispute between it and the New York Shipping Association, Inc. The apparent basis for the district court order was that there was no arbitrable dispute. Because we disagree with that conclusion, we reverse.

The Union and the Shipping Association are parties to a collective bargaining agreement covering the employment of longshoremen in the Port of New York. The agreement was entered into in April 1965, although its terms were effective as of October 1, 1964. It requires, inter alia, an increase in employer contributions to a joint Medical and Clinical Services Fund, which furnishes such services to covered employees at four separate medical centers in Manhattan, Brooklyn, Hoboken and Newark. The agreement also provides for a review in October 1967 of "the question of Medical and Clinical Services income," and states that if such income has fallen, the Union may raise the issue of additional employer contributions. If the parties cannot agree, arbitration is called for.

In November 1967, claiming "there is insufficient income to the [Manhattan] Medical Center . . . for its proper operation," the Union invoked the agreement and requested negotiations to increase employer contributions to the Manhattan Medical Center. In reply, the Shipping Association denied that it had any obligation to negotiate on an increase in employer contributions because the income to the Fund had "not fallen below the measuring period." It suggested, however, that surplus moneys allocated to the three medical centers outside of Manhattan might be made available to the Manhattan Center. Further discussions ensued, but they were inconclusive.

In May 1968, the Union petitioned the district court to appoint an arbitrator to decide:

(1) Whether the Medical and Clinical Services income has fallen substantially below the level existing as of the effective date of the collective bargaining agreements; and

(2) In the event it is determined that such income has fallen substantially below said level, the amount of additional employer contributions needed to bring said income to the level existing as of that time . . .

The parties appear to agree that under the applicable agreement this procedure was proper,*fn1 if the dispute was arbitrable. As to that, however, there is sharp disagreement. Judge McLean denied the petition because he concluded that fund income had not fallen and, therefore, the event that entitled the Union to raise the question of additional employer contributions had not occurred. The Union argues to us that the court thus decided the first of the issues to be arbitrated, which is impermissible under the Steelworkers trilogy.*fn2 The Shipping Association contends that the court correctly decided the issue of arbitrability, relying on Strauss v. Silvercup Bakers, Inc., 353 F.2d 555 (2d Cir. 1965). The case thus poses the familiar question whether a court has improperly decided the merits of a controversy rather than its arbitrability.

It is, of course, true, as the Association vigorously urges, that no one can be compelled to arbitrate a dispute if he has not agreed to do so. As Mr. Justice Brennan put it in United Steelworkers v. American Mfg. Co., 363 U.S. 564, 570-71, 4 L. Ed. 2d 1403, 80 S. Ct. 1343 (1960):

To be sure, since arbitration is a creature of contract, a court must always inquire, when a party seeks to invoke its aid to force a reluctant party to the arbitration table, whether the parties have agreed to arbitrate the particular dispute. In this sense, the question of whether a dispute is "arbitrable" is inescapably for the court.

But the trilogy also instructs us in United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582-83, 4 L. Ed. 2d 1409, 80 S. Ct. 1347 (1960), that:

An order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted ...

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