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DISTRICT 2, MARINE ENGRS. BEN. ASSN. v. FALCON CAR

April 22, 1974

District 2, Marine Engineers Beneficial Association, AFL-CIO et al., Plaintiffs
v.
Falcon Carriers, Inc., Defendant


Cannella, D.J.


The opinion of the court was delivered by: CANNELLA

CANNELLA, D.J.:

Defendant, by order to show cause, has applied for an order permanently staying arbitration on the issue of the existence and effect of an alleged oral "side agreement " and has further moved for an order, pursuant to Fed. R. Civ. P. 56(b), directing the entry of summary judgment in its favor, dismissing plaintiff's claim to arbitrate this issue. The application for a permanent stay of arbitration is granted and the motion for summary judgment is denied.

 The instant dispute arises out of an agreement entered into between the defendant, a shipowner, and the Military Sea Lift Command of the Navy (MSC), whereby defendant and MSC agreed to transfer the operation of four vessels, previously chartered to MSC on a consecutive voyage basis, pursuant to bare-boat charters. The effect of this arrangement, as it relates to the plaintiff Unions, is that MSC would not operate the involved vessels with their present union crews, but, rather, would man them with civil service personnel.

 Plaintiffs, when informed of these bare-boat charter agreements, demanded arbitration pursuant to the terms of a collective bargaining agreement entered into between plaintiffs and defendant. Specifically, plaintiffs sought the arbitration of three issues: (1) Severance pay, pursuant to Article II Section 9(A) of the Collective Bargaining Agreements; (2) Notice, pursuant to Article II Section 9(D) of the Collective Bargaining Agreements; and (3) Certain contractual obligations to maintain the involved vessels in continuous service and employ upon them members of plaintiff Unions, the alleged oral "side agreements."

 In response to plaintiff's demand, defendant agreed to arbitrate the claims relating to severance pay and notice, but objected to any arbitration concerning the alleged contractual obligations to maintain the vessels in continuous service and employ plaintiffs' union members thereon, asserting that such agreement did not exist, and that, in any event, it was not part of the collective bargaining agreements and, therefore, not subject to compulsory arbitration. The parties thereafter engaged in various discussions concerning the issues to be submitted to the arbitrator, however, no agreement was reached between them.

 On April 9, 1974 an arbitration proceeding was conducted before Benjamin Heller, the permanent arbitrator appointed under the collective bargaining agreements. At that time, and over the objections of the defendant's counsel, plaintiffs' counsel presented evidence on the third issue, the alleged oral "side agreements." Defendant's counsel refused to participate in the arbitration with regard to this issue and did not present any evidence or make argument with respect thereto. On the following day, April 10, 1974, defendant made the present application for a stay of arbitration on the alleged oral "side agreements."

 The issue before the court on the instant application can be simply stated: Is an alleged oral promise to maintain the four involved vessels in continuous operation for a period of twenty-three years (their useful life) and to employ plaintiffs' union members thereon for that entire period, subject to the compulsory arbitration provisions of the collective bargaining agreements? Is an arbitrable controversy thereby presented? In the opinion of this court, the question posed must be answered in the negative.

 Before addressing itself to the instant question of arbitrability the court must first respond to a challenge directed at its present jurisdiction. Such challenge, by plaintiffs, arises from their filing of a notice of appeal from the court's denial of a preliminary injunction on April 10, 1974.

 Plaintiffs sought that this court issue a preliminary injunction restraining the defendant from transferring any of the involved vessels to MSC pursuant to the bare-boat charter agreements, prior to a decision by the arbitrator with respect to the issues presented at the April 9, 1974 arbitration hearing. After hearing counsel, the court denied the application, concluding that plaintiffs had not demonstrated sufficient cause for the entry of equitable relief. On April 12, 1974, plaintiffs filed a notice of appeal from the court's decision.

 Plaintiffs presently contend that their filing of a notice of appeal from the court's decision of April 10, served to divest the court of all jurisdiction in this case. In this assertion, plaintiffs are incorrect. The complaint herein, which predicates jurisdiction upon Section 301 of the Labor Management Relations Act, 29 U.S.C. § 185, seeks relief and raises issues other than those presented on the application for the preliminary injunction and it is settled that an interlocutory appeal from the denial of preliminary injunctive relief divests the court only of jurisdiction with regard to questions raised and decided upon the interlocutory order appealed from. As was long ago stated by the Supreme Court:

 
An appeal from an interlocutory order does not divest the trial court of jurisdiction to continue with other phases of the case. "The case, except for the hearing on the appeal from the interlocutory order, is to proceed in a lower court, as though no such appeal had been taken, unless otherwise specifically ordered."

 Ex Parte National Enameling & Stamping Co., 201 U.S. 156, 50 L. Ed. 707, 26 S. Ct. 404 (1906). See also, De Pinto v. Provident Security Life Ins. Co., 374 F.2d 50, 51, n. 2 (9 Cir. 1967); Janousek v. Doyle, 313 F.2d 916, 921 (8 Cir. 1963); Phelan v. Taitano, 233 F.2d 117, 119 (9 Cir. 1956); Students Challenging Reg. Agency Proc. v. United States, 353 F. Supp. 317, 320, n. 2 (D.D.C. 1973); Securities and Exchange Commission v. Crofters, Inc., 351 F. Supp. 236, 264 (S.D. Ohio 1972); 9 J. Moore, Federal Practice P203.11 at 739; Cf., Fed. R. Civ. P. 62(c).

 Having concluded that the court is not divested of jurisdiction to entertain the instant application by virtue of plaintiffs' filing of the notice of appeal, the court need only address itself to one further procedural-jurisdictional point; the authority of the court to grant the sought after relief. In that regard, the court indicates that it has jurisdiction under Section 301 of the Labor Management Relations Act, 29 U.S.C. § 185, to consider the present application and to grant the requested stay. The Second Circuit's decision in Black-Clawson, Inc. v. International Association of Machinists, 313 F.2d 179 (2 Cir. 1962), and the line of cases which has developed therefrom, clearly establish that the court has authority under Section 301 to issue an order preventing submission of an issue to arbitration. See also, Sperry Rand Corp. v. Engineers Union, 371 F. Supp. 198, 85 L.R.R.M. 2615 (S.D.N.Y. 1974).

 The point of departure for the court's present inquiry is the so called Steelworkers Trilogy. United Steelworkers of America v. American Mfg. Co., 363 U.S. 564, 4 L. Ed. 2d 1403, 80 S. Ct. 1343 (1960); United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 4 L. Ed. 2d 1409, 80 S. Ct. 1347 (1960); United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 4 L. Ed. 2d 1424, 80 S. Ct. 1358 (1960). The Trilogy establishes the following relevant propositions: (1) The function of the court is limited "to ascertaining whether the party seeking arbitration is making a claim which on its face is governed by the contract", United Steelworkers of America v. American Mfg. Co., supra, 363 U.S. 568, and (2) Doubts as to the coverage of the arbitration clause should be resolved in favor of arbitration; United Steelworkers of America v. Warrior ...


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