The opinion of the court was delivered by: SOFAER
This suit was commenced by plaintiffs International Longshoremen's Association ("ILA"), Atlanta Coast District, ILA, AFL-CIO, and Local 1233, ILA, seeking to enjoin enforcement on statutory and constitutional grounds of Section 8 of the New York Waterfront Commission Act ("WCA § 8"), N.Y.Unconsol.Laws (65) § 9933 (McKinney 1974). Defendants are the Waterfront Commission of New York Harbor ("Commission"), an instrumentality created to enforce the Waterfront Commission Compact ("Compact"); and the New York Shipping Association, Inc. ("NYSA") and Metropolitan Marine Maintenance Contractors Association, Inc. ("MMCA"), two organizations of employers which, under a collective bargaining agreement with the ILA, collect and pay to the ILA dues from union members. No genuine issues of material fact exist, and all the parties have moved for summary judgment.
Judgment is now granted to each of the parties in accordance with the following opinion. In summary, an injunction is denied in all respects, since it is unnecessary. The following declaratory judgment is entered, however: (1) WCA § 8 may lawfully be enforced against individuals whom it disqualifies from service as waterfront union employees; (2) WCA § 8 may not lawfully be enforced against persons other than disqualified union employees for collecting and distributing union dues; and (3) WCA § 8 may lawfully be enforced against the ILA or its officers for knowingly employing a disqualified individual.
Numerous challenges have been made in this case to the legality and application of WCA § 8. These challenges have in turn raised jurisdictional questions. A brief review of the Compact, the WCA, and of section 8 in particular, will clarify the parties' respective positions. Some of the matters being disputed relate to whether certain union officials, recently sentenced after trial, should be forced out of their union jobs now rather than after their appeals have been completed. Other issues are of far greater import, pertaining to the standards which govern the States of New York and New Jersey when they regulate unions and employers to achieve the legitimate objective of forcing convicted criminals out of waterfront union employment.
I. THE WATERFRONT COMMISSION ACT AND SECTION 8
Waterfront employment in New York Harbor is governed by the Waterfront and Airport Commission Act ("WCA"), Chap. 1, Title 29, N.Y.Unconsol.Laws (65), §§ 9801 et seq. (McKinney 1974) ("N.Y.Laws"). The Act is divided into three parts. Part I, comprising Sections 9801 to 9873, is a restatement of the Waterfront Commission Compact consented to by Congress on August 12, 1953. 67 U.S.Stat. 541 (1953). Parts II and III of the Act, covering respectively Sections 9901 to 9920, and Sections 9931 to 9937, contain supplementary provisions, including regulations and prohibitions, which have been enacted by New York and New Jersey, with only slight variation, but have not been consented to by Congress. Section 8 of the WCA, the provision challenged in this action, is found in Part III.
The Compact's background and objectives have been discussed in several decisions, most notably De Veau v. Braisted, 363 U.S. 144, 80 S. Ct. 1146, 4 L. Ed. 2d 1109 (1960); Bradley v. Waterfront Comm'n of N.Y. Harbor, 12 N.Y.2d 276, 239 N.Y.S.2d 97, 189 N.E.2d 601 (1963); and Hazelton v. Murray, 21 N.J. 115, 121 A.2d 1 (1956). A central purpose of the "drastic reform" implemented by the Compact was to eliminate the presence of corrupt and irresponsible persons in any waterfront employment. De Veau, supra, 363 U.S. at 147, 80 S. Ct. at 1148. To accomplish this end, the Compact created the Waterfront Commission, granting it extensive administrative, adjudicatory and enforcement powers. Among the Commission's primary tasks is the supervision of a detailed licensing procedure for several employment categories, all of which were found to be "affected with a public interest." N.Y.Laws § 9805. The Commission is authorized to deny, revoke, cancel or suspend certain licenses or registrations if the applicant or licensee has "without subsequent pardon, been convicted" by any state or federal court of certain crimes. N.Y.Laws §§ 9814(b), 9818(c) (pier superintendents and hiring agents); §§ 9821(e), 9824(a) (stevedores); §§ 9829(a), 9831(a) (longshoremen); §§ 9841(b), 9844(a) (port watchmen).
To deny, revoke, cancel or suspend a license or registration, however, the Commission must follow certain procedures, designed to protect the rights of the applicant or licensee. See N.Y.Laws §§ 9845, 9846.
The Compact anticipates that this statutory scheme may lead to regulatory efforts that conflict with national labor policy. It provides explicit safeguards against such efforts. Thus, N.Y.Laws § 9868 states that the "compact is not designed and shall not be construed to limit in any way any rights granted or derived from any other statute or any rule of law for employees to organize," to bargain collectively, to strike, and to act in any other way individually, collectively, and through labor organizations "or other representatives of their own choosing." See also N.Y.Laws § 9869. At the same time, N.Y.Laws § 9872 provides that the Compact "shall be liberally construed to eliminate the evils described therein and to effectuate the purposes thereof."
The Compact has been supplemented by provisions as extensive and important as those it contains. Many of these were adopted contemporaneously with the Compact in 1953, but have never been approved by Congress.
Section 8 of the WCA, the statute challenged in this lawsuit, is one of these supplementary provisions. A slightly different version has been adopted by New Jersey.
Section 8 has proved the WCA's most controversial provision. Like the licensing regulations set forth in the Compact, WCA § 8 sets employment qualifications, but for waterfront unions rather than waterfront workers. The statute limits those who may serve as officers, agents or employees of any waterfront union, which in practical effect means the ILA. In contrast to the Compact's regulatory scheme, however, WCA § 8 establishes no licensing or registration mechanism, no hearing procedure, no right to judicial review. In its present form, it simply imposes criminal penalties for violating any of three prohibitions relating directly or indirectly to the employment by a waterfront union of certain "convicted" officers or employees.
The first prohibition of WCA § 8, and the only part in the section as adopted in 1953, is its most inclusive and potentially consequential. It prohibits any "person" (defined in the Compact to include virtually any individual or entity imaginable other than a governmental unit, N.Y.Laws § 9806), from soliciting, collecting or receiving any dues or other charges within New York for or on behalf of any labor organization representing the employees regulated by the WCA, "if any officer, agent or employee" of such labor organization or of a fund it administers "has been convicted" of certain crimes by a federal or state court, unless he has been subsequently pardoned or has received an appropriate certificate of good conduct. The convictions presently covered by this section include all felonies, "any misdemeanor involving moral turpitude," and certain other crimes or offenses. See N.Y.Laws § 9918(3)(b). This prohibition seems clearly to apply to employers and organizations such as NYSA and MMCA that aid in the collection of union dues or other charges. The provision also seems applicable to union officials, or locals, or anyone else participating in dues collection, including those individuals disqualified by the statute from union employment.
WCA8's second prohibition, adopted in 1969, is its most narrow and discriminate. It simply prohibits any person "so convicted" from serving as an officer, agent or employee of a labor organization or fund, unless he has been pardoned or received the requisite certificate of good conduct. It applies only to disqualified individuals.
The third prohibition of WCA § 8, also adopted in 1969, is that "no person," including the labor organizations covered by the section, "shall knowingly permit such convicted person to assume or hold any office, agency, or employment in violation of this section." Though the statute's language prohibits employing a disqualified individual in any capacity, the Commission is authorized, in its discretion, to exempt certain salaried workers, who "perform manual, mechanical or physical work of a routine or clerical nature." N.Y.Laws § 9934. No such discretionary exemption is permitted for union officials or managerial employees.
II. PROCEDURAL HISTORY AND CONTENTIONS
On May 23, 1979, Carol Gardner, Assistant General Organizer of the ILA and President of Local 1233, was convicted in this district for violating 29 U.S.C. § 186(b) by receiving four loans totalling $ 68,000 that were arranged by an officer of an employer of unionized longshoremen. Gardner was sentenced to one year imprisonment and a fine of $ 40,000. By letter dated August 6, 1979, the Commissioner notified the ILA that it considered "Mr. Gardner's convictions to be misdemeanors involving moral turpitude" within the meaning of WCA § 8. The Commission informed the union that, "unless the said Carol Gardner resigns from each union office or position which he presently holds with the (ILA and its locals), a violation of the provisions of Section 8 . . . will occur each and every time union dues, assessments, levies, etc. are collected or received." The letter ended by quoting from the remaining provisions of WCA § 8. Simultaneously, the Commission informed the NYSA and MMCA that continued collection of union dues would violate the statute. These employer groups thereafter notified the ILA and Local 1233 that, as of August 30, 1979, they would cease paying to plaintiffs the funds they collected from union members pursuant to the collective bargaining agreement in force between the employers and the ILA and its locals.
Plaintiffs commenced this action on August 14, 1979, seeking injunctive and declaratory relief. Shortly thereafter, Carol Gardner was granted leave to intervene as a plaintiff. A preliminary injunction was entered on August 22, 1979, preventing enforcement of WCA § 8 pending final disposition.
During January 1980, five additional officers of the ILA were sentenced by federal courts after having been found guilty of violating various federal felony provisions.
As in the case of Gardner, the Commission, by letter, warned the ILA, NYSA and MMCA, as well as each of the officers concerned, some of whom serve outside the Port of New York, that during the incumbency of these officers "a violation of Section 8 will occur each and every time dues, assessments, etc. are collected or received in the States of New York and New Jersey on behalf of any entity covered by Section 8." The Commission's letters referred as well to the parts of WCA § 8 making it a misdemeanor for certain convicted officers to serve in a union position or for any person knowingly to permit such an officer to serve. These letters led the plaintiff unions to move for leave to file an amended and supplemental complaint, and to modify the existing preliminary injunction to cover all cases similar to that of Gardner.
Meanwhile, the Commission moved on January 14, 1980, to vacate the preliminary restraints in effect since August 22, 1979. On January 31, 1980, the court denied the Commission's motion to vacate, granted plaintiffs' motion to amend, and modified the preliminary injunction previously in force. The modified preliminary injunction prohibited enforcement against any person of WCA § 8's prohibitions aimed at dues collection and at persons who permit "convicted" individuals to serve in union positions. At the same time, a temporary restraining order was granted against enforcement of that part of WCA § 8 that made it a misdemeanor for persons disqualified by the statute to serve in union positions. After further briefing, however, this temporary restraint was vacated on February 21, in an order leaving the Commission free to enforce WCA § 8 against union employees who continued to serve despite their disqualification as "convicted" individuals, and to seek authority from the court to enforce the other parts of WCA § 8 upon a showing that such enforcement is necessary to achieve the statute's objectives. No such application has been made. Finally, during the course of these proceedings, the Attorney General of New York has been joined as a defendant, and ILA Local 1814 (which employs two "convicted" officers) has been joined as a plaintiff.
Plaintiffs' attack on WCA § 8 concerns, first, its threatened enforcement under the circumstances presented in this case. Thus, plaintiffs argue that, as a matter of statutory construction, the union officials covered by the amended complaint have not been "convicted" within the meaning of WCA § 8, since the officials' appeals from the judgments against them have not been exhausted. Furthermore, plaintiffs contend, if "conviction" is interpreted to occur at the time of sentence, as the Commission argues, such an interpretation conflicts with federal labor law and thus violates the Supremacy Clause of the United States Constitution. Plaintiffs also contend that Carol Gardner's conviction under 29 U.S.C. § 186(b)(1) is not a conviction of a "misdemeanor involving moral turpitude" within the meaning of WCA § 8. They argue, moreover, that WCA § 8's inclusion of "misdemeanors involving moral turpitude" as a basis for disqualifying a union official conflicts with, and is pre-empted by, standards established by the federal labor laws.
Plaintiffs also challenge the validity of WCA § 8 on broad federal grounds. In addition to the supremacy arguments noted above, they contend that, despite the Supreme Court's decision in De Veau v. Braisted, supra, WCA § 8 conflicts with federal labor policy as reflected by Sections 1 and 7 of the National Labor Relations Act ("NLRA"), 29 U.S.C. §§ 151, 157; Section 504 of the Labor-Management Reporting and Disclosure Act ("LMRDA"), 29 U.S.C. § 504(c); and Section 411(c)(1) of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1111(c)(1). Plaintiffs further claim that aspects of WCA § 8 violate due process and equal protection as guaranteed by the Fourteenth Amendment, as well as the First Amendment right of union members freely to associate. Defendants controvert all these contentions.
The threshold questions presented are whether, as the State of New York argues, an injunction should be denied because of pending state proceedings, Younger v. Harris, 401 U.S. 37, 91 S. Ct. 746, 27 L. Ed. 2d 669 (1971); and, alternatively, whether the state courts ought to be permitted to construe WCA § 8 before a federal court reaches federal statutory or constitutional issues, Railroad Comm'n of Texas v. Pullman, 312 U.S. 496, 61 S. Ct. 643, 85 L. Ed. 971 (1941).
Younger requires the federal courts ordinarily to abstain from interfering with state criminal proceedings, once initiated. 401 U.S. at 46, 49, 91 S. Ct. at 751, 753. This doctrine, based on considerations of federalism, has also been held to govern the issuance of injunctions against enforcement of a state court judgment in a nuisance case, Huffman v. Pursue, Ltd., 420 U.S. 592, 603, 95 S. Ct. 1200, 1207, 43 L. Ed. 2d 482 (1975) ("more akin to a criminal prosecution than are most civil cases"); of contempt proceedings, Juidice v. Vail, 430 U.S. 327, 338, 97 S. Ct. 1211, 1218, 51 L. Ed. 2d 376 (1977); and of "civil proceedings in which important state interests are involved," Moore v. Sims, 442 U.S. 415, 423, 99 S. Ct. 2371, 2377, 60 L. Ed. 2d 994 (1979) (custody proceeding for child abuse; interest in family relations and child welfare); Trainor v. Hernandez, 431 U.S. 434, 444, 97 S. Ct. 1911, 1918, 52 L. Ed. 2d 486 (1977) (civil enforcement and attachment proceeding; interest in protecting integrity of public assistance program). Proper respect for important state interests has in fact led the Supreme Court to condemn injunctions against state officers even where no particular criminal or civil proceeding is pending. O'Shea v. Littleton, 414 U.S. 488, 500, 94 S. Ct. 669, 678, 38 L. Ed. 2d 674 (1974) ("anticipatory interference in the state criminal processes"); Rizzo v. Goode, 423 U.S. 362, 378-80, 96 S. Ct. 598, 607-08, 46 L. Ed. 2d 561 (1976) (extensive interference with state law enforcement officials in management of police).
No criminal or civil proceeding was pending when the present action began, and none has been commenced despite this court's refusal to enjoin preliminarily the enforcement of WCA § 8 directly against union officials who have been found guilty and sentenced. New York's Attorney General contends that "the mailing of notice by the Commission . . . was a significant step in the State proceedings to enforce the State statute, whether criminally or civilly. So any injunction by this Court is an improper interference with State ongoing administrative enforcement proceedings." Brief for N. Y. State, p. 5. The State essentially argues that the Commission's letters gave notice of "incipient state proceedings," interference with which "will create an unnecessary frustration to valid state policy."
The Commission's warning letters were significant. Without them, plaintiffs might have failed to demonstrate a need for immediate relief.
But the letters no more commenced a proceeding than the policeman's warnings did in Steffel v. Thompson, 415 U.S. 452, 94 S. Ct. 1209, 39 L. Ed. 2d 505 (1974). Even where a plaintiff has been restrained on a prosecutor's information, making a preliminary hearing imminent, no proceeding is deemed underway to make Younger applicable. Gerstein v. Pugh, 420 U.S. 103, 108, 95 S. Ct. 854, 860, 43 L. Ed. 2d 54 (1975). While the Commission has broad power to institute proceedings in implementing its licensing responsibilities under the WCA, N.Y.Laws § 9849, it has no such responsibility or authority under WCA § 8. Authority to enforce WCA § 8 is vested directly in local prosecutors. The Commission's warning letter is in fact unnecessary to the statute's enforcement; it is at most a signal that, unless the perceived violation ceases, the Commission will refer the matter for prosecution. Finally, at no time prior to actual prosecution will plaintiffs in this case have "had an opportunity to present their federal claims in the state proceedings." Juidice v. Vail, supra, 430 U.S. at 337, 97 S. Ct. at 1218. To abstain in this context would force plaintiffs (and the employer defendants) to await prosecution before raising their defenses, or to avoid criminal liability by surrendering their claims,
some of which are based on the First Amendment.
Nor does this case involve so great an interference with important state administrative functions that abstention is necessary despite the absence of any specific state proceeding. Unlike the judicial and prosecutorial functions impinged upon in O'Shea and Rizzo, supra, the Commission is a specialized agency, representing two states and approved by the federal government. Enforcement of WCA § 8 is undoubtedly an important and valid state objective. But, as several of the parties note, although the statute and the Compact are regarded as state legislation for many purposes,
they regulate conduct in an area of substantial federal interest.
Furthermore, this suit challenges only one, limited aspect of the Commission's responsibilities; it seeks no relief that would disrupt to any extent the Commission's primary function of regulating licensed or registered waterfront employees. Finally, because no state proceeding has been commenced, a declaratory judgment, which is a less harsh remedy than an injunction, entailing less federal intrusion, appears sufficient in this case. See generally Steffel v. Thompson, supra, 415 U.S. at 462-74, 94 S. Ct. at 1217-23.
Abstention on the basis of Younger v. Harris and its progeny is therefore inappropriate.
An argument for abstention is also possible for the reasons identified in Railroad Commission of Texas v. Pullman, supra. Abstention is normally required "where the challenged state statute is susceptible of a construction by the state judiciary that would avoid or modify the necessity of reaching a federal constitutional question." Kusper v. Pontikes, 414 U.S. 51, 54, 94 S. Ct. 303, 306, 38 L. Ed. 2d 260 (1973). No party argues in favor of abstention on this ground, but it is sufficiently related to Younger abstention to merit discussion. See Moore v. Sims, supra, 442 U.S. at 427-28, 99 S. Ct. at 2379-80. Abstention may be required, moreover, even if no party requests it, see Wisconsin v. Constantineau, 400 U.S. 433, 437, 91 S. Ct. 507, 510, 27 L. Ed. 2d 515 (1971), although the parties' desire to avoid the delay abstention frequently entails is a factor to consider in determining whether to abstain, see Hostetter v. Idlewild Bon Voyage Liquor Corp., 377 U.S. 324, 329, 84 S. Ct. 1293, 1296, 12 L. Ed. 2d 350 (1964).
The Supreme Court has mandated essentially "a two-step approach (in Pullman abstention) . . . (1) whether the state law is unclear and, if it is, whether state court resolution of the unclear state issue will obviate or modify the federal constitutional issue, and (2) whether the costs of abstention are too great in a particular case or there is some other aspect of the case which weighs in favor of or against abstention." 1A J. Moore, W. Taggart, A. Vestal & J. Wicker, Moore's Federal Practice P 0.203(1), p. 2115 (2d ed. 1979). The process is more easily described than applied.
How "unclear" or "unsettled" must an issue of state law be to warrant abstention? "The answer does not emerge easily from analysis of the decisions, since the Court frequently states only its conclusion on the point with little elaboration of its reasons." P. Bator, P. Mishkin, D. Shapiro & H. Wechsler, Hart & Wechsler's The Federal Courts and the Federal System 991 (2d ed. 1973). A test suggested in Pullman itself would find most questions unsettled, since any federal judge's decision of an issue not authoritatively determined is "a forecast rather than a determination." Railroad Comm'n of Texas v. Pullman Co., supra, 312 U.S. at 499, 61 S. Ct. at 645. But the Court has more recently said that abstention is inappropriate merely because a state law issue is "doubtful." Baggett v. Bullitt, 377 U.S. 360, 375, 84 S. Ct. 1316, 1324, 12 L. Ed. 2d 377 (1964). Even a question on which the state courts have not passed may be decided by federal courts under proper circumstances. E. g., Doud v. Hodge, 350 U.S. 485, 487, 76 S. Ct. 491, 492, 100 L. Ed. 577 (1956). Thus, although a two-step analysis seems desirable and orderly, the ultimate question may depend as much upon where the second step leads as the first.
Several state-law issues are presented, each of which must be separately considered. See, e.g., Babbitt v. United Farm Workers Nat'l Union, 442 U.S. 289, 305-12, 99 S. Ct. 2301, 2312-16, 60 L. Ed. 2d 895 (1979). The issues are described in detail below. It suffices here to note that, while the clarity of New York law differs on each of the issues presented, no substantial doubts exist as to how New York's courts will resolve any of the questions that need to be decided. Compare id. 307-12, 99 S. Ct. 2313-16.
Furthermore, although decisions on these state law issues might conceivably avoid some federal questions,
most of the difficult questions that could possibly be avoided are federal pre-emption matters rather than ordinary questions of constitutional interpretation.
The interests that support Pullman abstention are to some extent applicable to pre-emption decisions.
Normally, however, a pre-emption decision is an exercise in determining Congress' intent, and is subject to legislative review. Such decisions, therefore, often lack that dangerous combination of judicial subjectivism and jurisprudential finality associated with constitutional determinations, which makes the avoidance of constitutional issues especially important.
The weight of authority seems in fact strongly against treating abstention as applicable to pre-emption decisions, even though they may be based ultimately upon the Supremacy Clause.
Furthermore, the development of several grounds for abstention other than Pullman assures that federal courts will abstain in appropriate cases involving important state interests. No need exists to create a doctrinal basis for permitting federal courts to avoid exercising their ordinary and expected function of construing federal laws.
Finally, the federal constitutional questions that would be avoided by certain possible interpretations of state law are insubstantial, and seem clearly to warrant rulings upholding the validity of those parts of WCA § 8 that are in question. In such a context where the constitutional decisions reached by refusing to abstain uphold the state law the potential for embarrassment or "needless friction with state policies," Railroad Commission of Texas v. Pullman, supra, 312 U.S. at 500, 61 S. Ct. at 645, is minimized, since the federal court decision on these issues does not foreclose the state court from later adopting a different, more restrictive construction of state law.
The costs of abstention in this case are, moreover, too substantial to justify obtaining the minimal benefits that abstaining might confer. All the parties save the intervenor New York State oppose abstention, largely because of the delay it would cause. Time is particularly crucial to the Commission, since its principal aim here is to remove from union office those individuals who have been found guilty of crimes before their appeals have been exhausted. WCA § 8 loses much of its impact after appeals are final, since, at that point, federal law would usually make it unlawful for convicted officials to continue to serve the union. See 29 U.S.C. § 504. Thus, even a relatively short delay is likely to deprive the Commission of the opportunity to vindicate its reading of WCA § 8.
The impact of WCA § 8 on the employers, NYSA and MMCA, as well as on the public, must also be considered. The employers are faced with serious injury if WCA § 8 is enforced against them for collecting dues; they predict a strike if they fail to abide by collective bargaining agreements permitting a dues checkoff procedure. Their claims are based on federal pre-emption and constitutional arguments that almost certainly would not be avoided by abstaining on any state law question, and which therefore should be reached now rather than after a further period of delay and uncertainty. Finally, abstention would cause considerable judicial diseconomies in this case.
The sanctions of WCA § 8 are triggered when a union official or employee "has been convicted" of one of the enumerated crimes. Plaintiffs and defendants NYSA and MMCA argue that a "conviction" should be held to occur under WCA § 8 only after all appeals have been exhausted. They argue, in particular, that WCA § 8 should be interpreted consistently with related federal statutes, which expressly define conviction to mean the later of the date of the trial court's judgment or of "the final sustaining of such judgment on appeal . . . ."
No New York decision has addressed the meaning of conviction as used in WCA § 8. But in a thoughtful and well-reasoned decision, the New Jersey Superior Court recently held that an individual is "convicted" under New Jersey's counterpart to WCA § 8, N.J.Stat.Ann. 32:23-80 and 32:23-80.2, at the time a guilty verdict is returned or guilty plea is entered, and not after affirmance on appeal. Local 1804, International Longshoremen's Association, AFL-CIO v. Waterfront Commission of New York Harbor, 171 N.J.Super. 508, 410 A.2d 73 (1979). In the context of bi-state legislation designed to remedy problems shared by New York and New Jersey, a New York judge ...