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JSP Agency Inc. v. American Sugar Refining Co.

decided: January 11, 1985.

JSP AGENCY, INC., PLAINTIFF-APPELLANT,
v.
AMERICAN SUGAR REFINING CO. OF NEW YORK, AMSTAR CORP., NORTHERN LINES, INC., ATHENIAN SHIPPING CORP., CARIBBEAN CHARTERERS & OPERATORS, LTD., AMBRIT SUGARS, INC., C. CZARNIKOW, INC., CZARNIKOW-RIONDA COMPANY, INC., B.W. DYER & COMPANY, FARR MANN & CO., INC., M. GOLODETZ & CO., INC., LONRAY, INC., AMEROP, DIVISION OF WESTWAY TRADING CORPORATION, WOODHOUSE, DRAKE & CAREY, INC., FLORIDA SUGAR MARKETING AND TERMINAL ASSOCIATION, INC., HOGAN & COMPANY, INC., PHILIPPINE SUGAR TRADING CORP., SUBSIDIARY OF NATIONAL SUGAR TRADING ASSOCIATION, MARC RICH & CO., SUGAR LTD. AND ALLIED TOWING CORPORATION, SUBSIDIARY OF ALLIED MARINE INDUSTRIES, DEFENDANTS-APPELLEES



Appeal from a final judgment of the Southern District of New York (Knapp, J.), granting summary judgment in favor of the defendants. The district court held that (1) non-consenting, non-signatory parties are not bound by the terms of an agreement merely because that agreement is approved by the Federal Maritime Commission, and (2) none of the defendants signed or adopted the tonnage assessment agreement involved in this case. The judgment is affirmed.

Oakes, Van Graafeiland, Circuit Judges, and Tenney, Senior District Judge*fn* .

Author: Tenney

TENNEY, District Judge

The JSP Agency appeals from a judgment of the United States District Court for the Southern District of New York, Whitman Knapp, Judge, granting summary judgment in favor of the defendants.*fn1 This appeal requires us to determine two issues -- first, whether non-consenting, non-signatory parties may be bound by the terms of an agreement, merely because that agreement has been approved by the Federal Maritime Commission ("FMC") under Section 15 of the Shipping Act, 46 U.S.C. § 814 (1982) ("§ 814"),*fn2 and second, whether the agreement in question was adopted by one of the appellees as a result of the conduct, long-term practice, or cooperation of that appellee.

For the reasons stated below, we answer both questions in the negative, and affirm the decision of the district court.

BACKGROUND

The undisputed facts establish that the following events occurred. In 1977, after two months of striking, the International Longshoremen's Association ("ILA") entered into a labor agreement -- the Job Security Program Agreement, also known as the JSP Agreement ("Agreement") -- with a group of approximately 200 carriers. The Agreement provided that the signatory carriers would pay a tonnage assessment on cargo loaded or unloaded by ILA labor in specified ports. It was agreed that the assessments would be placed in a central fund and would be used to guarantee certain benefits for ILA members. The Agreement was approved by the FMC pursuant to § 814. The JSP Agency, the plaintiff-appellant in this action, was established to administer the fund created by the Agreement.

Subsequent to the signing of the Agreement, a separate document, known as the Master Contract, was signed by the ILA and the New York Shipping Association ("NYSA").*fn3 NYSA is a multi-employer bargaining unit representing management. Its members include carriers, stevedores, terminal operators and other groups generally employing ILA labor in handling cargo. The Master Contract, which ultimately ended the strike, was negotiated and signed independently of the JSP Agreement. The district court found that the JSP Agreement had been appended to the Master Contract, but had not been absorbed by or incorporated as part of the Master Contract.

Because the JSP Agency had difficulty collecting assessments from the signatory carriers, the Agreement was amended in 1982 ("Amendment"). The Amendment was signed by the ILA, on behalf of its members, and by the JSP Agency on behalf of the carriers that had previously signed the Agreement.

The 1982 Amendment is the basis of the case at bar. It mandates that all carriers using ILA labor must subscribe to the JSP Agreement and that New York terminal operators and stevedores must obtain subscription agreements from the carriers with whom they deal. The Amendment also provides that the terminal operators and stevedores are jointly liable for tonnage assessments due on cargo if they provide services to a carrier and fail to obtain the carrier's subscription. The Amendment states in relevant part:

Every stevedore and terminal operator employing ILA labor subject to the JSP Agreement shall first procure a Subscription Agreement from the Carrier requesting the services of ILA labor in the loading or unloading of its vessel(s).

Stevedores and terminal operators who fail to get such Subscription Agreement from Carriers utilizing ILA labor in the ports subject to the JSP Agreement shall be jointly liable with the non-subscribing Carrier for the amount of any unpaid JSP Tonnage Assessment. Such Subscription Agreement shall not be necessary where the Carrier has directly subscribed to the Master [Contract] and the JSP Agreement.

The Amendment was also submitted to the FMC and was approved pursuant to § 814.

Based on the 1982 Amendment, the JSP Agency brought this action against the defendants-appellees to collect tonnage assessments on bulk raw sugar that was purchased by the appellee Amstar Corporation and was unloaded by the appellee American Sugar Refining Company of New York, Inc. ("American Sugar"), a stevedoring company.*fn4 The sugar was transported to the United States on vessels that were owned, chartered or operated by the other appellees in ...


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