of crews on "flag of convenience" vessels. The term "flag of
convenience" denotes a cost-cutting business practice used by
shipowners. A flag of convenience ("FOC") vessel is effectively
owned by interests in one nation but is registered in another.
Its owners can then avoid the first nation's higher taxes and
more stringent labor laws. Under international maritime law,
registry not ownership determines the country to which a ship
Since the late 1940s ITF has attempted to become the
worldwide representative for FOC crews, directing its affiliate
unions to negotiate agreements with FOC vessel owners. In a
number of ports around the world, ITF employs "inspectors" who
board FOC vessels to check for a "blue certificate" which is
given to ships whose owners sign ITF agreements. If a vessel
does not carry a blue certificate, the inspector tries to
persuade the captain to sign an ITF agreement. If the captain
refuses, the inspector informs the captain that portside unions
(usually ITF affiliates) will boycott or "black" the vessel
until an ITF agreement is signed. For example, "blacking" could
entail a refusal to handle the ship in any way, such as a
refusal to supply tugboats or pilotage services or refusal by
the dockers to load or unload the ship. See May 30, 1989
Defendant's Memorandum in Support of Motion for Summary
Judgment, page 3 ("Deft's Memo for Summary Judgment").
Local 6 was initially chartered by the International
Federation of Health Professionals and has primarily
represented factory, health and restaurant workers located in
the tri-state area (New York, New Jersey, Connecticut).
See Deposition of William Perry, April 18, 1989, pp. 10-11. In
1972 Local 6 became affiliated with the International
Longshoremen's Association ("ILA"). Id. at 13. That affiliation
continued until 1984. Id.
In 1982 Local 6 began a drive to organize FOC seamen. During
1980-84 ISA's primary function was to negotiate collective
bargaining agreements between labor unions and shipowners.
See May 30, 1989 Plaintiffs' Memorandum of Law in Support of
Motion for Partial Summary Judgment ("Pltf's Memo for Summary
Judgment"), at 2. ISA acted through its New York agent,
Venturas Ship Chartering, Ltd., represented by Evangelos
In 1982 Perry and Venturas (on behalf of ISA's member
shipowners) executed agreements with four shipowners. Among
these four was an agreement with the owners of the ship Ocean
Sky, signed on November 24, 1982.
On February 4, 1983, the Ocean Sky arrived in the port of
Haifa, Israel to discharge cargo. During its stay in Haifa, an
ITF inspector named Captain Groman ("Groman") boarded the Ocean
Sky and sought to organize the crew by obtaining execution of
the standard ITF collective bargaining agreement. When the
vessel's owners refused to deal with ITF, citing their contract
with Local 6, an Israeli pilots' union affiliated with ITF
declined to furnish a pilot for the Ocean Sky's departure from
Haifa, thereby effectively detaining the ship there. Plaintiff
alleges that as of February 25, 1983, ITF was aware of and had
approved the blacking of the Ocean Sky. See May 30, 1989
Plaintiff's Notice of Motion, ¶ 42.
Local 6 commenced this action in March 1983, by an order to
show cause seeking a temporary restraining order directing ITF
to release the Ocean Sky from detention in Haifa. This court
issued the TRO on March 18, 1983, but by March 22 or March 23,
1983 the Ocean Sky had managed to leave Haifa without a pilot
under cover of night.
In a Memorandum Decision dated November 7, 1986 this court
denied plaintiff's motion for a preliminary injunction
prohibiting ITF from engaging in an alleged worldwide boycott
of FOC vessels operating under Local 6 labor contracts. We also
found that we had in personam jurisdiction over defendants
International Transport Workers' Federation, William Lindner,
John Law and the Transport Workers' Union of America. See
William Perry v. International Transport Workers' Federation,
No. 83 Civ. 2059 (S.D.N.Y. Nov. 7, 1986).
Rule 56(c) of the Federal Rules of Civil Procedure provides
that summary judgment may be granted if a review of the
materials before the court shows that no genuine issue of
material fact remains for trial and that the movant is entitled
to judgment as a matter of law. Fed.R.Civ.P. 56(c). A summary
judgment may be rendered on the issue of liability alone even
though there is a genuine issue as to the amount of damages.
Id. All reasonable inferences and any ambiguities are drawn in
favor of the nonmoving party. See David Thompson v. Davor
Gjivoje, 896 F.2d 716, 720 (2d Cir. 1990); Katz v. Goodyear
Tire and Rubber Co., 737 F.2d 238, 244 (2d Cir. 1984). The
movant has the initial burden of establishing that there is no
genuine issue of material fact. See Celotex Corp. v. Catrett,
477 U.S. 317, 323, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986).
Summary judgment is an extreme remedy that should not be
granted unless the moving party has established a right to
judgment with such clarity as to leave no room for doubt and
unless the nonmoving party is not entitled to recover under any
In antitrust cases, summary judgment should be granted
sparingly, "especially where an allegation of conspiracy raises
issues of fact as to motive and intent." See Burlington Coat
Factory Warehouse v. Belk Bros., 621 F. Supp. 224, 231 (S.D.N Y
1985). Summary judgment is also inappropriate where the
resisting party "comes forth with affidavits or other material
. . . that generates uncertainty as to the true state of any
material fact . . ." Quinn v. Syracuse Model Neighborhood
Corp., 613 F.2d 438, 445 (2d Cir. 1980). Nevertheless, summary
judgment is appropriate in some antitrust cases. See, e.g.,
First National Bank v. Cities Service Co., 391 U.S. 253,
274-88, 88 S.Ct. 1575, 1585-92, 20 L.Ed.2d 569 (1968). Where
plaintiff fails to present significant probative evidence to
demonstrate that a genuine issue of material fact exists,
summary judgment is appropriate. See Western Systems, Inc. v.
Dynatech Corp., 610 F. Supp. 585, 588 (D.Colo. 1985).
1. The Anti-Trust Claims
Plaintiffs allege that ITF violated Sections 1 and 2 of the
Sherman Anti-Trust Act, 15 U.S.C. § 1-2,*fn5 in that the
steps taken by ITF and its affiliates to enforce the ITF's
"blacking" policy constitute an unlawful group boycott,
combination and conspiracy in restraint of interstate and
international trade. Second Amended Complaint at ¶ 22. Further,
plaintiffs allege that the ITF and its co-conspirators try to
force FOC vessels and/or their owners to sign an ITF agreement
and make payments to the ITF welfare fund. Id. at ¶ 17.
Defendant ITF argues that plaintiffs' antitrust claim should
be dismissed because the activities which plaintiffs contend
violate the antitrust laws come within a statutory exemption
accorded to labor activity. See Deft's Memo for Summary
Judgment at 1. We agree.
The Sherman Act, which prohibits concerted action in
restraint of "trade or commerce among the several states or
with foreign nations was enacted primarily "to protect
consumers from monopoly prices, and not to serve as a
comprehensive code to regulate and police all kinds and types
of interruptions and obstructions to the flow of trade."
Allen Bradley Co. v. Local Union No. 3, 325 U.S. 797, 806, 65
S.Ct. 1533, 1538, 89 L.Ed. 1939 (1945). The Second Circuit has
explicitly adopted this interpretation, stating that the
laws "were designed principally to outlaw restraints upon
commercial competition in the marketing and pricing of goods
and services and were not intended as instruments for the
regulation of labor-management relations." Kennedy v. Long
Island Railroad Co., 319 F.2d 366, 372 (2d Cir. 1963).
To assure that the Sherman Act was applied in accordance with
its original purpose, Congress enacted the Clayton Act, which,
in relevant part, states "[t]he labor of a human being is not
a commodity or article of commerce. [T]he antitrust laws shall
[not] be construed . . . to forbid or restrain individual
members of such [labor] organizations from lawfully carrying
out the legitimate objects thereof." 15 U.S.C. § 17. Thus, two
declared congressional policies must be reconciled, one seeking
to preserve a competitive business economy, and the other
preserving the rights of labor to organize to better its
conditions through the agency of collective bargaining. Allen
Bradley, 325 U.S. at 806, 65 S.Ct. at 1538.
Further, the Norris-LaGuardia Act, ("Norris-LaGuardia" or the
"Act") was passed to restrict the application of the Sherman
Act to labor disputes and to reduce the power of the federal
courts to intervene in such disputes. See Bodine Produce, Inc.
v. United Farm Workers Organizing Committee, 494 F.2d 541, 546
(9th Cir. 1974). The Act stripped the federal courts of
jurisdiction "to issue any restraining order or temporary or
permanent injunction in a case involving or growing out of a
labor dispute." 29 U.S.C. § 101. Section 13 of the Act defines
a labor dispute as "any controversy concerning terms or
conditions of employment, or concerning the association or
representation of persons in negotiating, fixing, maintaining,
changing or seeking to arrange terms or conditions of
employment, regardless of whether or not the disputants stand
in the proximate relation of employer and employee." 29 U.S.C. § 113.
The parties agree that to invoke the statutory labor
exemption, three conditions must be met: 1) the party seeking
exemption must be a labor group; 2) the labor group must not
have acted in concert with a nonlabor group; and 3) the
activity must have occurred in the context of a labor dispute.
See United States v. Hutcheson, 312 U.S. 219, 232, 61 S.Ct.
463, 466, 85 L.Ed. 788 (1941).
Plaintiffs do not dispute defendant's contention that federal
labor law governing the applicability of anti-trust law to
labor disputes applies in this case. Nor do plaintiffs dispute
that ITF is a labor group. However, plaintiffs deny that
defendant satisfies the other two requirements for the labor
exemption, and allege that 1) there was no labor dispute in
Haifa and 2) ITF acted in concert with non-labor entities in
effecting its boycott. See July 11, 1989 Plaintiffs' Memorandum
of Law in Reply to Defendant's Motion for Summary Judgment
("Pltfs' Reply Memo") at 2.
Plaintiffs argue that the occurrence of violence in a dispute
deprives it of status as a "labor dispute" and thus precludes
eligibility for the labor exemption from antitrust laws.
Specifically, plaintiffs allege that a statement made by
Captain Groman, ITF's local inspector in Haifa, in a telex to
the owners of the Ocean Sky was a threat of violence warning
that they should sign an ITF Special Agreement "in order to
avoid damages to the vessel." In addition, plaintiffs contend
defendant's actions were "violent" when ITF representatives
boarded the Ocean Sky and moved the vessel to another berth in
the port, over the objections of its crew. Finally, the ship
had to resort to leaving the port without the assistance of
pilotage services which it was required to have to leave the
port. These actions, plaintiffs contend, take the dispute out
of the confines of a labor dispute and deprive it of the labor
activity exemption. Pltfs' Reply Memo at 4. We disagree.
Defendant correctly points out that plaintiffs rely on cases
which decided only whether a federal court had jurisdiction to
issue an injunction against unlawful activity. Even though a
court issues an injunction prohibiting violent or unlawful
activity, such an action does not necessarily
change the nature of the dispute as a labor dispute. Plaintiff
relies heavily on Scott v. Moore, 680 F.2d 979 (5th Cir. 1982),
rev'd on other grounds, 463 U.S. 825, 103 S.Ct. 3352, 77
L.Ed.2d 1049 (1983), a case involving an attack by a group of
people on a construction site where nonunion labor was being
used. In that case the Fifth Circuit Court of Appeals upheld
the issuance of an injunction enjoining the violent conduct,
and found that there was not a labor dispute within the meaning
of the Norris-La-Guardia Act. Scott, 680 F.2d at 986 n. 3.
In our view plaintiffs misconstrue Scott. The Scott holding
was based on the Fifth Circuit's ruling that the attack in that
incident did not grow out of any legitimate union activity. Id.
at 1000. The court noted there was no collective bargaining
agreement, no effort to seek recognition, no solicitation, no
informational picketing, nor any other organizational efforts
to achieve representation of the nonunion workers. The
employer-employee relationship was not the matrix of the
controversy. Id; see also Jacksonville Bulk Terminals, Inc. v.
International Longshoremen's Association, 457 U.S. 702, 713 n.
12, 102 S.Ct. 2672, 2680 n. 12, 73 L.Ed.2d 327 (1982) (test for
determining a labor dispute is whether the employer-employee
relationship is the "matrix of the controversy.") Indeed, in
Scott the Fifth Circuit stated specifically that "a labor
dispute does exist where unlawful conduct occurs in conjunction
with some legitimate labor activity." Scott, 680 F.2d at 1001.
In our case there was legitimate labor activity in that
Inspector Groman was attempting to protect the interests of the
ITF by trying to find out whether the Ocean Sky was covered by
an ITF-approved agreement and thus eligible for full service
and cooperation from Israeli and ITF-affiliated union members
in Haifa. Therefore, it is our view that even if the activities
in the instant case are characterized as "violent," the
presence of violence alone is not enough to deprive defendant
of the labor exemption to anti-trust liability. The cases
suggest that the presence of violence does not necessarily
allow an anti-trust claim, but rather only allows courts to
issue injunctions or to take other action to control the
In the instant case the parties do not dispute that the goal
of the ITF activities prompting this lawsuit was the signing of
a collective bargaining agreement with the owners of the Ocean
Sky, as well as with other FOC shipowners. Nor is there any
dispute that the alleged "violence" occurred in the context of
ITF's organizing activity. Therefore, we conclude that this was
a legitimate labor activity aimed at the employer-employee
relationship, and thus a labor dispute.
Plaintiffs' other argument for denying the labor exemption is
that ITF's "blacking" of the Ocean Sky was accomplished in
concert with non-labor groups, namely, Histadrut, an Israeli
organization, and the shipowners with whom the ITF or its
affiliates had a collective bargaining agreement. Pltfs' Reply
Memo at 15.
Plaintiffs assert that Histadrut is an Israeli labor
organization which is also an employer owning a conglomerate of
industries "responsible for 20-25% of the gross national
product of Israel." Id. They allege that defendant's
cooperation with Histadrut in refusing to provide pilotage
services for the Ocean Sky to leave the port of Haifa "may"
constitute a combination with a non-labor entity within the
meaning of the Norris-LaGuardia Act. Id. Plaintiffs assert that
even the "mere possibility of the existence of such a
combination" along with defendant's alleged "demonstrated
tenor" of an intent to drive Mr. Perry out of the FOC business
is enough to defeat a motion for summary judgment on the
antitrust claims. Id. We disagree.