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District 2 Marine Engineers Beneficial Association-Associated Maritime Officers v. Grand Bassa Tankers Inc.

decided: October 29, 1981.


Appeal by a labor organization from an order of the Eastern District of New York entered by Judge Jacob Mishler dismissing, for lack of jurisdiction under § 301(a) of the Labor Management Relations Act, 29 U.S.C. § 185(a), its action against an owner of an oil tanker fleet for breach of its agreement to contract for operation of the fleet by an operator having labor agreements with the labor organization. Affirmed .

Before Mansfield and Van Graafeiland, Circuit Judges, and B. Newman, Judge.*fn*

Author: Mansfield

District 2 Marine Engineers Beneficial Association-Associated Maritime Officers, AFL-CIO ("MEBA"), appeals from a judgment of the Eastern District of New York entered by Judge Jacob Mishler denying MEBA's motion for a preliminary injunction and dismissing for lack of jurisdiction its complaint against Grand Bassa Tankers, Inc. ("Grand Bassa"), formerly known as International Oil Transport Corporation ("IOTC"), owner of an oil tanker fleet. Invoking jurisdiction under § 301(a) of the Labor-Management Relations Act, 29 U.S.C. § 185(a) ("the Act"), MEBA claimed that Grand Bassa refused to perform a contract entered into between them on January 5, 1979, obligating Grand Bassa to contract for operation of its vessels by an operator-employer having labor agreements with MEBA and sought specific performance of the contract. We affirm on the ground that federal jurisdiction under § 301(a) is lacking.

Although Grand Bassa and its predecessor IOTC have been owners of vessels, they have not at any relevant times employed the crews manning the ships or entered into collective bargaining agreements with unions representing the crews. Instead the management and operation of the vessels were in 1976 turned over to Interocean Management Corporation ("IOM"), an independent company operating vessels for various shipowners (including Standard Oil of Ohio, Shell Oil and the First National Bank of Boston), pursuant to a contract making IOM wholly responsible for the operation, management and conduct of the business of the ships, including the employment of their crews and labor policies. IOM as employer had entered into a labor agreement with MEBA providing that deck and engineer officers who were members of MEBA would man IOM-managed ships. Upon IOM's becoming the operator of ships owned by Grand Bassa, then known as IOTC, the agreement became applicable to IOM and MEBA with respect to those ships. Under this agreement the sole employer of the officers on these ships was IOM. When the IOM-MEBA agreement expired in June, 1978, they negotiated a new collective bargaining agreement, to which they alone were parties. Neither Grand Bassa nor its predecessor IOTC ever participated in negotiations leading up to any IOM-MEBA collective bargaining agreements nor were they parties to those agreements.

In December, 1978, Grand Bassa, then named IOTC,*fn1 sold one of its tankers, the S.S. Fort Hoskins, which had previously been operated by IOM, to a company that did not use an operator employing MEBA members. MEBA thereupon asserted a severance pay claim against IOM, relying on the collective bargaining agreement which it had with IOM. In order to accelerate resolution of the dispute, IOTC (Grand Bassa) entered into direct communication with MEBA. On January 5, 1979, IOTC and MEBA entered into an agreement settling the dispute, under which, in return for a $20,000 contribution by IOTC (Grand Bassa) to the MEBA benefit plan, MEBA agreed to abandon its claim against IOM growing out of the sale of the Hoskins. The agreement also provided that "any Operator employed by (IOTC (Grand Bassa)) to operate its U.S.-flag ships shall have Labor Agreements with (MEBA) until June 15, 1981."*fn2

On August 8, 1980, Grand Bassa notified IOM that it intended to terminate its management operation contract with IOM on August 15, 1980, and that it was retaining Trinidad Corporation as manager and operator in IOM's place. Trinidad does not have a collective bargaining agreement with MEBA. Instead, its collective bargaining agreement with respect to officers on ships managed by it is with another union, which under the fleet-wide accretion principle represents all deck and engineer officers aboard Trinidad ships, just as MEBA represents all such officers employed by IOM. MEBA then brought the present action for specific performance of its January 5, 1979, agreement with Grand Bassa obligating the latter to contract with an operator for its ships which would have a labor agreement with MEBA. MEBA sought to enjoin IOTC (Grand Bassa) from transferring operation of its tankers from IOM to Trinidad.

Federal jurisdiction was invoked by MEBA under § 301(a) of the Act, which confers such jurisdiction over "(suits) for violation of contracts between an employer and a labor organization representing employees."*fn3 Grand Bassa moved to dismiss the complaint on the ground, among others, that subject matter jurisdiction was lacking because there was no employer-employee relationship between itself and MEBA or its members, the sole such relationship being between IOM and MEBA. MEBA argued in reply that (1) since Grand Bassa had employees of its own who were admittedly not members of MEBA, it should be deemed an "employer" as that term is used in § 301(a), bringing the January 5, 1979, Grand Bassa-MEBA contract within the Act, and (2) Grand Bassa, because of its relationship with IOM, should be considered an employer of MEBA members. Judge Mishler after an evidentiary hearing held that, although the Supreme Court in Retail Clerks International Assoc. v. Lion Dry Goods, Inc., 369 U.S. 17, 82 S. Ct. 541, 7 L. Ed. 2d 503 (1962), had stated that the term "contracts" in § 301(a) was not limited to collective bargaining agreements, § 301(a) applied only to contracts between parties linked by an employer-employee relationship. Jurisdiction under § 301(a) therefore did not exist because Grand Bassa was not an employer of MEBA members and the January 5, 1979, agreement did not relate to Grand Bassa's employees. IOM was the sole signatory to the MEBA collective bargaining agreement and the management agreement between Grand Bassa and IOM left the elements of the employer-employee relationship (e.g., wages, hours, promotions) entirely to IOM's exclusive discretion as employer. Accordingly the district court dismissed the action for lack of federal jurisdiction and denied injunctive relief, from which MEBA appeals.


Section 301(a) confers federal jurisdiction over suits "for violation of contracts between an employer and a labor organization representing employees." Read literally, as MEBA asks us to do, this language would embrace contracts between an employer and a labor organization even though the employer, like Grand Bassa, does not employ any person represented by the labor organization, in this case MEBA. In construing the language of a statute, however, we must look beyond its literal language to its purpose. As Learned Hand warned "it is a commonplace that a literal interpretation of the words of a statute is not always a safe guide to its meaning," Peter Pan Fabrics Inc. v. Martin Weiner Corp., 274 F.2d 487, 489 (2d Cir. 1960). Equally appropriate for present purposes are his remarks in Guiseppi v. Walling, 144 F.2d 608, 624 (2d Cir. 1944) (concurring opinion), where he stated:

"It does not therefore seem to me an undue liberty to give the section as a whole the meaning it must have had, in spite of the clause with which it begins.... There is no surer way to misread any document than to read it literally; in every interpretation we must pass between Scylla and Charybdis; and I certainly do not wish to add to the barrels of ink that have been spent in logging the route. As nearly as we can, we must put ourselves in the place of those who uttered the words, and try to divine how they would have dealt with the unforeseen situation; and, although their words are by far the most decisive evidence of what they would have done, they are by no means final."

See also Federal Deposit Ins. Corp. v. Tremaine, 133 F.2d 827, 830 (2d Cir. 1943) (L. Hand, C.J.) ("There is no surer guide in the interpretation of a statute than its purpose when that is sufficiently disclosed; nor any surer mark of over solicitude for the letter than to wince at carrying out that purpose because the words used do not formally quite match with it.")

As the legislative history of § 301(a) and Supreme Court decisions interpreting it make clear, Congress' aim in enacting it was to promote industrial peace through the collective bargaining process by assuring the enforceability by federal courts of collective bargaining agreements between employers and labor unions. Atkinson v. Sinclair Refining Co., 370 U.S. 238, 82 S. Ct. 1318, 8 L. Ed. 2d 462 (1962); Dowd Box Co. v. Courtney, 368 U.S. 502, 509, 82 S. Ct. 519, 523, 7 L. Ed. 2d 483 (1962); Retail Clerks v. Lion Dry Goods, 369 U.S. 17, 82 S. Ct. 541, 7 L. Ed. 2d 503 (1962); Complete Auto Transit, Inc. v. Reis, 451 U.S. 401, 101 S. Ct. 1836, 68 L. Ed. 2d 248 (1981).*fn4 As the Supreme Court observed in Dowd, 368 U.S. at 509, 513, 82 S. Ct. at 525-26:

"The Labor Management Relations Act of 1947 represented a far-reaching and many-faceted legislative effort to promote the achievement of industrial peace through encouragement and refinement of the collective bargaining process. It was recognized from the outset that such an effort would be purposeless unless both parties to a collective bargaining agreement could have reasonable assurance that the contract they had negotiated would be honored. Section 301(a) reflects congressional recognition of the vital importance of assuring the enforceability of such agreements.

"This basic purpose of § 301 is epitomized in the Senate Report: "It is apparent that until all jurisdictions, and particularly the Federal Government, authorize actions against labor unions as legal entities, there will not be the mutual responsibility necessary to vitalize collective-bargaining agreements.' S.Rep.No.105, 80th Cong., 1st Sess., p. 17."

Federal jurisdiction was granted because of the need for a uniform federal law fashioned from a national labor policy, see Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 77 S. Ct. 912, 1 L. Ed. 2d 972 (1957), and because many state courts could not provide adequate relief because of local rules or decisions inhibiting suits by or against labor organizations as entities, leading to "checkerboard ...

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