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DISTRICT NO. 1 v. TRINIDAD CORP.

March 16, 1984

DISTRICT NO. 1 -- PACIFIC COAST DISTRICT, MARINE ENGINEERS" BENEFICIAN ASSOCIATION, AFL-CIO, Plaintiffs, against TRINIDAD CORPORATION, Defendant.


The opinion of the court was delivered by: SWEET

SWEET, D.J.

Plaintiff District No. 1 - Pacific Coast District, Marine Engineers' Beneficial Association, AFL-CIO ("MEBA") has moved to remand this action against Trinidad Corporation ("Trinidad") to the Supreme Court of the State of New York, County of New York. For the reasons set forth below, the motion is granted, and the action is remanded.

 Facts

 MEBA is an unincorporated association that represents the licensed marine engineers including those employed by Trinidad. Trinidad is a Delaware corporation with its offices and place of business in Philadelphia, Pennsylvania, engaged in the ownership and operation of U.S. Flag vessels. Trinidad was aquired by the Apex Shipping Company, Inc., a Missouri corporation, in 1981. Apex Shipping, Inc. is owned in turn by the Apex Holding Company, also a Missouri corporation.

 The collective bargaining agreement in effect between Trinidad and MEBA, the "Tanker Vessels Agreement" (the "Agreement"), was negotiated by the Tanker Services Committee, which was comprised of various tanker companies including Trinidad. The Agreement sets forth the rates of pay, hours of employment and other conditions of employment of Trinidad's licensed marine engineers and contains a grievance and arbitration provision that calls for arbitration of disputes between Trinidad and MEBA before a licensed personnel board. The Agreement states as follows:

 The award of the Arbitrator may be enforced in the courts of the State of New York. Any action to modify or vacate an arbitration award shall be instituted in the courts of the State of New York. It is expressly agreed that neither the Company nor the Union will seek the removal from the courts of the State of New York to the federal courts of any such proceeding to enforce, modify or vacate the award, and both the Company and the Union hereby expressly waive their right to seek such removal or institute proceedings to enforce, modify, or vacate the award in any forum other than the courts of the State of New York. Nothing in this paragraph shall preclude either the Company or the Union from initiating proceedings in any appropriate state or federal court with regard to any matter other than the enforcement, modification, or vacating of an arbitration award.

 On October 11, 1983, MEBA demanded that Trinidad arbitrate a grievance arising out of an alleged violation of the Agreement. MEBA's grievance alleged that Trinidad had breached the Agreement by failing to apply its terms to the employees of Crest Tankers, Inc. ("Crest") and Clayton Tankers, Inc. as an affiliate of Trinidad ("Clayton").MEBA alleged that Trinidad, Crest and Clayton were actually "alter egos" of "single employers" and, consequently, that MEBA was entitled to the work of the licensed marine engineers of all these employers.

 Crest, which was incorporated in Missouri in September of 1982, is also engaged in the ownership and operation of U.S. Flag vessels. Clayton, which was incorporated in Missouri in January of 1983, is also engaged in the ownership of U.S. Flag vessels. Apex Holding Company owned Crest, Clayton as well as Trinidad each of which are are separate corporations.

 Crest and Trinidad formulate and administer separate labor relations policies. Trinidad and Crest assert that they have separate operations, personnel and accounting departments, do not interchange equipment, cargo or vessels or personnel, and have no interrelationship in financing, loans or services. Since October of 1982, Crest's employees have been represented by Crest Tanker Officers' Association ("CTOA"), a labor organization which operates an office in Palisades, New York. Clayton employs no shipboard employees.

 Prior Proceedings

 On November 1, 1983, Trinidad filed a complaint against MEBA in the United States District Court for the District of Columbia seeking: (1) an injunction prohibiting MEBA from pursuing the grievance, (2) a declaratory judgment that Trinidad, Crest, and Clayton are separate employers, and (3) an order compelling multi-partite arbitration. On November 4, 1983, Crest and Clayton filed a complaint against MEBA, in the United States District Court for the District of Columbia, seeking an injunction against arbitration of MEBA's grievance, a declaratory judgment, and monetary damages for tortious interference with the collective bargaining agreement between Crest and CTOA. The District Court consolidated the Crest/Clayton and Trinidad actions.

 The initial arbitration hearing was held on October 19, 1983. Trinidad requested a continuance, and the hearing was rescheduled for November 9, 1983. On November 4, 1983, the District Court issued a temporary restraining order enjoining the November 9, 1983 arbitration hearing. Four days later, on November 8, 1983, a panel of the District of Columbia Circuit vacated the temporary restraining order and issued their opinion on November 15, 1983. *fn1"

 Despite Trinidad's request for a continuance, W. J. Usery, a permanent arbitrator and member of the licensed personnel board, allowed the arbitration hearing to proceed on November 9, 1983. On December 23, 1983, Arbitrator Usery issued an opinion and award sustaining MEBA's grievance. Specifically, the Arbitrator ruled that Crest and Trinidad are "alter egos" and a "single, common employer" and therefore that the licensed ...


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