Carson v. Waterfront Comm. of NY Harbor , 73 F.3d 24 ( 1995 )

Opinions of the United
1995 Decisions States Court of Appeals
for the Third Circuit
12-28-1995
Carson v. Waterfront Comm. of NY Harbor
Precedential or Non-Precedential:
Docket 95-5309
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Recommended Citation
"Carson v. Waterfront Comm. of NY Harbor" (1995). 1995 Decisions. Paper 321.
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UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 95-5309
DONALD CARSON,
Appellant
v.
WATERFRONT COMMISSION OF NEW YORK HARBOR;
GERALD P. LALLY;
INTERNATIONAL LONGSHOREMEN'S ASSOCIATION, ("ILA");
ATLANTIC COAST DISTRICT OF THE ILA;
JOHN BOWERS;
INTERNATIONAL LONGSHOREMEN'S ASSOCIATION LOCAL 1588
On Appeal from the United States District Court
for the District of New Jersey
(D.C. No. 94-cv-01594)
Argued November 28, 1995
BEFORE: MANSMANN, COWEN and SEITZ,
Circuit Judges
(Filed December 28, 1995)
Fredric J. Gross (argued)
7 East Kings Highway
Mount Ephraim, New Jersey 08059
COUNSEL FOR APPELLANT
DONALD CARSON
David B. Greenfield (argued)
Waterfront Commission of New York Harbor
42 Broadway
New York, New York 10004
1
COUNSEL FOR APPELLEE
WATERFRONT COMMISSION OF NEW YORK HARBOR
OPINION
`
COWEN, Circuit Judge.
This case presents a Supremacy Clause challenge to New
Jersey's implementation of the Waterfront Commission Act of 1953,
an interstate compact between New York and New Jersey aimed at
eliminating racketeering and other pernicious activities in the
Port of New York District. Appellant Donald Carson contends that
§ 8 of that Act conflicts with a 1984 amendment to the Labor-
Management Reporting and Disclosure Act of 1959. 29 U.S.C.
§504(d). Finding that the 1984 amendment effected no change in
Carson's rights whatsoever, we hold that his preemption claim is
barred by the Supreme Court's decision in De Veau v. Braisted,
363 U.S. 144, 80 S. Ct. 1146 (1960) (plurality opinion), which
rejected a claim that § 8 conflicted with the pre-1984 version of
§ 504. We therefore will affirm the district court's order
dismissing Carson's claims against the Waterfront Commission
pursuant to Fed. R. Civ. P. 12(b)(6).
I.
Donald Carson was an officer in the International
Longshoremen's Association ("ILA") and two related entities when
a jury in the United States District Court for the District of
New Jersey found him guilty of racketeering conspiracy in
violation of 18 U.S.C. § 1962(d), and extortion conspiracy in
2
violation of 18 U.S.C. §§ 2 and 1951. Two days later, Gerald
Lally, the General Counsel to the Waterfront Commission
("Commission"), advised John Bowers, ILA's President, that
Carson's continued employment after his conviction would place
the union in violation of New Jersey's enactment of section 8 of
the Waterfront Commission Act ("WCA"), N.J. Stat. Ann. § 32:23-
80,1 which forbids a union from operating as such in New Jersey
if one of its officers has been "convicted" of certain crimes.
Bowers forwarded a copy of Lally's letter to Carson and
advised him that in light of his conviction, he was suspended
from his union positions. Several days later, the Commission,
through Lally, advised Bowers that suspension of a convicted
union officer was insufficient to comply with § 8 of the WCA.
Accordingly, Bowers sent Carson another letter informing him that
he was being "removed from all offices of the ILA and its
affiliates and all fringe benefit funds." Letter from Bowers to
Carson of 4/25/88, at 1. Carson appealed his criminal
1
No person shall solicit, collect or
receive any dues, assessments, levies, fines
or contributions, or other charges within
this State of New Jersey for or on behalf of
any labor organization, which represents
employees registered or licensed pursuant to
the provisions of this act . . . if any
officer . . . has been convicted by a court
of the United States, or any State or
territory thereof, of treason, murder,
manslaughter or any felony, high misdemeanor
or misdemeanor involving moral turpitude, or
any crime or offense enumerated in
subdivision 3(b) of section 5-n of this act,
unless he has been subsequently pardoned
therefor . . . .
N.J. Stat. Ann. § 32:23-80.
3
conviction, and we vacated the judgment. United States v.
Carson, 969 F.2d 1480 (3d Cir. 1992). The indictment ultimately
was dismissed.
Carson brought this suit against the Commission, Lally
and various ILA officials.2 His principal claim was that by
enforcing § 8 of the WCA, which required his removal upon the
return of a guilty verdict, the defendants conspired to deprive
him of wages to which he claims convicted-but-exonerated
officials are entitled under the 1984 amendment to § 504 of the
Labor-Management Reporting and Disclosure Act of 1959 ("LMRDA").
Section 504(d) of the LMRDA requires unions to escrow the wages
of an official "barred by virtue of [that] section" and to remit
those wages to the official if he is ultimately exonerated. 29
U.S.C. § 504(d). Since the escrow provision does not take effect
until there is a "conviction," which § 504(c) defines as the
entry of a judgment of conviction (i.e., at sentencing), Carson
alleged that the Commission's action in seeking and obtaining his
removal based on the state-law interpretation of the term
2
Carson's claims against the ILA officials were enjoined pursuant
to a December 21, 1994, order of the United States District Court
for the Southern District of New York, which had before it a
massive civil RICO action against ILA and Carson. That action
ultimately resulted in a judgment against Carson, and an appeal
to the Court of Appeals for the Second Circuit was partially
successful. United States v. Carson, 52 F.3d 1173 (2d Cir.
1995). Both parties to that appeal have petitioned for
rehearing. In the meantime, Carson had appealed separately from
the Southern District's order enjoining his claims against the
ILA defendants. By stipulation, however, that appeal was being
held in abeyance pending the resolution of the parties'
respective petitions for rehearing. The district court,
therefore, granted Carson's request for an administrative
termination of his claims against the ILA defendants.
4
"conviction" in § 8 of the WCA (i.e., a guilty verdict)
contravened the Supremacy Clause and was unlawful.
In granting the Commission's motion to dismiss for
failure to state a claim, the district court disagreed.
Separating its analysis into two parts, the district court first
looked to whether the definition of "conviction" in § 8 of the
WCA contravened the pre-1984 version of § 504 of the LMRDA, which
defined "conviction" as a judgment from which no further appeals
could be taken. The district court noted initially that the
Supreme Court in De Veau v. Braisted, 363 U.S. 144, 80 S. Ct.
1146 (1960) (plurality opinion), held that § 8 of the WCA was not
preempted by the pre-1984 version of § 504 of the LMRDA. Then,
relying on International Longshoremen's Ass'n v. Waterfront
Commission, 642 F.2d 666 (2d Cir.), cert. denied, 454 U.S. 966,
102 S. Ct. 509 (1981), and Local 1804, International
Longshoremen's Ass'n v. Waterfront Commission, 428 A.2d 1283(N.J. 1981), the district court concluded that "[i]t has been
judicially settled that section 504(c)'s pre-1984 definition of
'conviction' did not pre-empt the viability of section 8." J.
App. at 91.
The district court then turned to the current version
of § 504 of the LMRDA and determined that
[t]he present definition of
"conviction" under section 504(c)
reads closer to the original,
practical thrust of section 8. The
addition of section 504(d) has not
imposed additional responsibilities
upon the Commission or Lally. That
section does not require the
Waterfront Commission to establish
5
and maintain an escrow account for
the benefit of union officials.
Therefore, neither the change of
504(c) nor the addition of 504(d)
presents a significant departure
from section 504 pre-1984 to
invalidate section 8.
App. at 91-92. After holding that Lally, the Commission's
General Counsel, was entitled to qualified immunity, the district
court dismissed Carson's complaint against both the Commission
and Lally. This appeal followed. Carson does not challenge the
district court's qualified immunity determination in this appeal.
II.
The district court's jurisdiction was premised upon 28
U.S.C. §§ 1331, 1332 and 1367. The district court directed entry
of final judgment on Carson's claims against the Commission under
Fed. R. Civ. P. 54(b). Our jurisdiction over this appeal from a
final determination of the district court rests on 28 U.S.C.
§1291. We exercise plenary review over a district court's
dismissal pursuant to Fed. R. Civ. P. 12(b)(6) for failure to
state a claim.
III.
The gravamen of Carson's Supremacy Clause challenge is
that the 1984 amendment to § 504 of the LMRDA, which created the
escrow requirement, expressed a clear congressional intent that
criminally convicted union officials who are removed from office
but ultimately exonerated should be entitled to their wages:
"[t]his new subsection . . . is designed to mitigate the harm of
a wrongful conviction." Carson's Br. at 13. Since strict
6
application of New Jersey's interpretation of the term
"conviction" in § 8 of the WCA operates to remove convicted union
officials before § 504(d)'s escrow requirement can be triggered,
Carson contends, the Supremacy Clause requires that the WCA bow
to the paramount federal policy. We disagree.
A.
Carson hinges his claim on the 1984 amendment to § 504
ostensibly because the Supreme Court's decision in De Veau, 363
U.S. at 144, 80 S. Ct. at 1146, rejected a generalized claim that
§ 8 of the WCA was preempted by the pre-1984 version § 504 of the
LMRDA and because both the Court of Appeals for the Second
Circuit and the New Jersey Supreme Court, prior to 1984, rejected
the very claim Carson raises here. See International
Longshoremen's Ass'n v. Waterfront Comm'n, 642 F.2d 666 (2d
Cir.), cert. denied, 454 U.S. 966, 102 S. Ct. 509 (1981); Local
1804, Int'l Longshoremen's Ass'n v. Waterfront Comm'n, 428 A.2d
1283 (N.J. 1981). Therefore, as a way around this rather
formidable body of precedent, Carson has attempted to demonstrate
an intervening change in the law which would render De Veau and
its progeny inapplicable.
Carson's argument that the escrow provision added by
the 1984 amendment to § 504 demonstrates a special congressional
concern with "mitigat[ing] the harm of a wrongful conviction" is
fatally flawed at its inception. As the district court's
discussion implied, the post-1984 version of 29 U.S.C. § 504expressed no more of a congressional intent "to mitigate the harm
of a wrongful conviction" than did the pre-1984 version. On the
7
contrary, convicted union officials are in fact worse off after
the 1984 amendment. A comparison of the former and current
versions of § 504, the pertinent provisions of which we will set
forth in the margin, demonstrates this conclusively.
Under the pre-1984 version of § 504,3 a union official
was required to be suspended for five years upon being
"convicted" of certain crimes. The statute defined "conviction"
as a judgment from which no further appeals have been or could
have been taken. Thus, under federal law, union officials
convicted of a crime listed in § 504 could retain their positions
and receive wages until such time as their appeals had been
exhausted; only those officials whose convictions were upheld on
appeal were required to step down. The obvious effect was that
criminally convicted officials were entitled to work and receive
3
(a) [P]ersons convicted of robbery, bribery, etc.
No person who . . . has been convicted of, or
served any part of a prison term resulting from his
conviction of, [certain enumerated crimes] . . . shall
serve--
(1) as an officer . . . of any labor
organization,
. . . .
during or for five years after . . . such conviction .
. . .
. . . .
(c) Definitions
For the purposes of this section, any person shall
be deemed to have been "convicted" . . . from the date
of the judgment of the trial court or the date of the
final sustaining of such judgment on appeal, whichever
is the later event . . . .
29 U.S.C. § 504 (1982) (amended 1984 & 1987).
8
wages during the pendency of their appeals irrespective of
whether they were ultimately exonerated.
The 1984 amendment, however, required that convicted
union officials be removed far sooner than under the previous
version of § 504. Under the current version,4 all convicted
4
(a) [P]ersons convicted of robbery, bribery, etc.
No person who . . . has been convicted of, or
served any part of a prison term resulting from his
conviction of, [certain enumerated crimes] . . . shall
serve or be permitted to serve--
. . . .
(2) as an officer . . . of any labor
organization,
. . . .
during or for the period of thirteen years after such
conviction or after the end of such imprisonment,
whichever is later . . . .
. . . .
(c) Definitions
For the purpose of this section--
(1) A person shall be deemed to have been
"convicted" . . . from the date of the judgment of the
trial court, regardless of whether that judgment
remains under appeal.
. . . .
(d) Salary of person barred from labor organization
office during appeal of conviction
Whenever any person--
(1) by operation of this section, has been
barred from office . . . as a result of a conviction,
and
(2) has filed an appeal of that conviction,
any salary which would be otherwise due such person by
virtue of such office or position, shall be placed in
escrow by the individual employer or organization
responsible for payment of such salary. Payment of
such salary into escrow shall continue for the duration
9
officials must be removed from office upon entry of a judgment of
conviction (i.e., at sentencing). See 29 U.S.C. § 504(c). If
that had been the extent of the 1984 amendment, exonerated and
non-exonerated officials alike no longer would have been entitled
to wages during the pendency of their appeals. Therefore,
Congress also added subsection (d) to § 504, requiring that
unions place the wages of a convicted official into an escrow
account in the event that the official ultimately is exonerated.
If the official is not exonerated, the wages revert back to the
union. If the official is exonerated, however, he is entitled to
the wages, but, unlike the pre-1984 state of affairs, is barred
from office in the interim.
Far from representing the significant, beneficial
change in the rights of wrongfully convicted officials that
Carson would have us ascribe to it, the escrow requirement added
by the 1984 amendment simply maintains the status quo.
Convicted-but-exonerated officials, both before and after 1984,
are entitled to receive their wages during the pendency of their
appeals. But viewed as a whole, the 1984 amendment contained two
of the appeal . . . . Upon the final reversal of such
person's conviction on appeal, the amounts in escrow
shall be paid to such person. Upon the final
sustaining of such person's conviction on appeal, the
amounts in escrow shall be returned to the individual
employer or organization responsible for payments of
those amounts. Upon final reversal of such person's
conviction, such person shall no longer be barred by
this statute from assuming any position from which such
person was previously barred.
29 U.S.C. § 504 (1988) (as amended) (emphasis added).
10
serious drawbacks for convicted union officials: (1) non-
exonerated officials no longer are entitled to their wages during
appeal; and (2) exonerated officials, although entitled to wages
during the pendency of their appeals, are not permitted to work
during that time. Accordingly, Carson's claim that Congress'
1984 amendment to § 504 evinces a special concern with
"mitigat[ing] the harm of a wrongful conviction" is inaccurate.
B.
Since the 1984 amendment worked no positive change in
Carson's rights as a wrongfully convicted official, his only
plausible Supremacy Clause claim is that to the extent state-
court decisions define the term "conviction" in § 8 of the WCA as
a verdict of guilty, that definition has always been preempted by
section 504 of the LMRDA. Indeed, prior to 1984, federal law
permitted all convicted officials to remain in office until their
appeals had been exhausted, which necessarily means that the
conflict between § 8 and the pre-1984 version of § 504 was even
more glaring. If Carson is correct, then § 8 presumably must
yield to § 504 after 1984 since it should have yielded all along.
To prevail on the merits of his claim, however, Carson
faces a nearly insurmountable hurdle in form of the Supreme
Court's decision in De Veau, 363 U.S. at 144, 80 S. Ct. at 1146.
As we noted above, De Veau specifically rejected a challenge to §
8 of the WCA as being inconsistent with the pre-1984 version of §
504 of the LMRDA, and two subsequent pre-1984 decisions, relying
on De Veau, rejected the very claim Carson advances here. There
are two potential paths around De Veau and the decisions relying
11
on it; Carson urges that we follow both. We consider each one in
turn.
1.
Carson implies that De Veau should not apply here
because it was decided in 1960 and it was not until 1981 that
state and federal courts began to interpret the term "conviction"
in § 8 of the WCA to mean a guilty verdict. See, e.g.,
International Longshoremen's Ass'n, 642 F.2d at 666; Local 1804,
428 A.2d at 1283. Thus, the argument continues, De Veau could
not have foreclosed a claim of inconsistency between § 8 of the
WCA and §504 that was essentially unforeseeable in 1960. While
this argument has some logical appeal, De Veau's broad rationale
requires that we reject it.
De Veau was a declaratory judgment action in which the
plaintiffs alleged that § 8 of the WCA, through its rather severe
disqualification provisions, unduly interfered with their rights
under the National Labor Relations Act ("NLRA") to choose
bargaining representatives. Plaintiffs also alleged that § 8's
disqualification provisions were harsher than those contained in
§504 of the LMRDA and, thus, the former was impliedly preempted
by the latter. (The most glaring inconsistency was that § 8
provided for a lifetime bar of convicted officials whereas § 504
required only a five-year disqualification.) After exhaustively
tracing the developments leading to the submission to and
approval by Congress of the WCA and its enactment by the New York
and New Jersey legislatures, Justice Frankfurter, writing for the
plurality, rejected the preemption claim regarding the NLRA. He
12
did so on the ground that Congress, in approving the WCA, had
expressly consented to supplemental legislation like § 8 even
though it technically was not part of the compact. De Veau, 363
U.S. at 150-54, 80 S. Ct. at 1150-51.
Turning to the plaintiffs' contention that § 8
conflicted with the federal policy codified in § 504 of the
LMRDA, Justice Frankfurter observed two separate reasons strongly
militating against a finding of preemption. The first was that
Congress itself has . . . imposed
the same type of restriction upon
employees' freedom to choose
bargaining representatives as New
York seeks to impose through § 8,
namely, disqualification of ex-
felons for union office[. That] is
surely evidence that Congress does
not view such a restriction as
incompatible with its labor
policies.
Id. at 156, 80 S. Ct. at 1152. Significantly, the general policy
of excluding convicted officials, not specific claimed
inconsistencies, was the focus of the High Court's preemption
analysis.
Responding to the plaintiffs' specific contention that
"any state disablement from holding union office on account of a
prior felony conviction, such as § 8, which has terms at variance
with § 504(a), is impliedly barred by it," id., Justice
Frankfurter concluded that
[j]ust the opposite conclusion is
indicated by the 1959 Act, which
reflects congressional awareness of
the problems of pre-emption in the
area of labor legislation, and
which did not leave the solution of
questions of pre-emption to
13
inference. When Congress meant
pre-emption to flow from the 1959
Act it expressly so provided.
Sections 205(c) and 403 . . . are
express provisions excluding the
operation of state law,
supplementing provisions for new
federal regulation. No such pre-
emption provision was provided in
connection with § 504[a]. That
alone is sufficient reason for not
deciding that § 504(a) pre-empts §
8 of the [WCA].
Id. at 156, 80 S. Ct. at 1152-53 (emphasis added). The plurality
then cited to a provision in the LMRDA that, in its view,
expressed a clear congressional intent to allow state legislation
such as §8 of the WCA:
And to make the matter conclusive,
§ 603(a) is an express disclaimer
of pre-emption of state laws
regulating the responsibilities of
union officials, except where such
pre-emption is expressly provided
in the 1959 Act. . . . In view of
this explicit and elaborate
treatment of pre-emption in the
1959 Act, no inference can possibly
arise that §8 is impliedly pre-
empted by §504(a).
Id. at 157, 80 S. Ct. at 1153.
The ratio decidendi of the De Veau plurality's decision
is that § 8 and § 504(a) are compatible precisely because they
both are aimed at removing criminal elements from union office;
any friction between the two is constitutionally permissible
because §504 lacks specific preemption language. We understand
De Veau, therefore, to reject a "facial" challenge to any and all
claimed inconsistencies between § 8 of the WCA and § 504 of the
14
LMRDA. Standing alone, this would appear to mandate an affirmance
since no preemption language has been added to section 504 since
De Veau was decided.
2.
Carson urges, however, that to the extent that De
Veau's holding purports to bar any prospective claim of
inconsistency between § 8 of the WCA and § 504 of the LMRDA, it
was a plurality opinion and, thus, De Veau and its progeny do not
stand as a per se bar to his preemption claim. While this
argument also has some measure of surface appeal, after reading
Justice Brennan's opinion concurring in the judgment, we are not
persuaded.
We would agree with Carson had Justice Brennan refused
to join Justice Frankfurter's opinion because he believed that
its reliance on the lack of express preemption language would
needlessly bring within its sweep all future claims of
inconsistency between § 8 and § 504 and impliedly reject them.
But that is not why Justice Brennan wrote separately. On the
contrary, Justice Brennan agreed with the plurality's result
precisely because Congress expressly had consented to parallel
state legislation in enacting the LMRDA:
Mr. Justice BRENNAN is of the
opinion that . . . the [LMRDA]
explicitly provides that it shall
not displace such legislation of
the States. He believes that New
York's disqualifications of ex-
felons from waterfront union
office, on all the circumstances,
and as applied to this specific
area, is a reasonable means for
15
achieving a legitimate state aim .
. . .
De Veau, 363 U.S. at 160-61, 80 S. Ct. at 1155 (Brennan, J.,
concurring in the judgment). This language essentially mirrors
the second reason Justice Frankfurter offered for finding that §
504 did not preempt § 8.
Justice Brennan's concurrence suggests at most a
disagreement with the plurality's methodology in rejecting the
plaintiff's initial contention that § 8 was preempted by the
NLRA. By noting that the LMRDA itself was sufficient evidence of
a congressional intent not to preempt § 8, Justice Brennan
implied that there was no need to conclude, as had the plurality,
that in approving the WCA Congress gave its express imprimatur to
state legislation like § 8 (which was not technically part of the
compact). Because the NLRA is not offered as a basis for
preemption in this case, the concurrence's differences with the
plurality on that issue are irrelevant. Quite simply, five
Justices agreed in De Veau that in enacting the LMRDA in 1959,
Congress explicitly assented to the enactment of parallel state
restrictions on convicted union workers except where it expressly
had provided to the contrary. Accordingly, Carson's claim that
De Veau lacks precedential value because it was a plurality
opinion is without merit.
Finally, we observe that in 1984 the Supreme Court
specifically reaffirmed De Veau's basic premise that the LMRDA
expressed a clear congressional intent not to preempt state
regulation of union officials. Brown v. Hotel & Restaurant
16
Employees & Bartenders Int'l Union Local 54, 468 U.S. 491, 506,
104 S. Ct. 3179, 3188 (1984) ("[Section] 504 itself makes clear
that Congress did not seek to impose a uniform federal standard
on those who may serve as union officials."). Although Brown
dealt with a claim that New Jersey's regulation of unions in the
casino industry conflicted with the NLRA, much of the Brown
Court's analysis was devoted to comparing New Jersey's regulatory
scheme to the New York version of § 8 of the WCA scrutinized in
De Veau. In the process, Brown reaffirmed De Veau's refusal to
find § 8 preempted by federal labor policy. Since De Veau
controls, we conclude that Congress' refusal to add any specific
preemption language to § 504 since De Veau was decided compels an
affirmance.
The district court's order of April 7, 1995, dismissing
Carson's claims against the Waterfront Commission will be
affirmed.
17