Navios Corp. v. National Maritime Union of America , 402 Pa. 325 ( 1960 )

Dissenting Opinion by

Mb. Justice Bell,

December 16, 1960:

There are two important questions involved: (1) has a State Court of Equity jurisdiction to enjoin the picketing and the interference with unloading and servicing of the Liberian ship S.S. Ore Monarch; and (2) if so, should it do so? I would answer both questions in the affirmative. The highlights of the facts (which are set forth in the majority opinion in detail) are:

Navios Corporation, the Appellant in No. 147, is a Liberian corporation having its only office or place of business at Nassau, Bahamas, British West Indies. This corporation is in the business of transporting bulk commodities in worldwide service and for this purpose operates 37 chartered vessels of which the S.S. Ore Monarch, which is involved in these appeals, is one.

Universe Tankships, Inc., the Appellant in No. 148 is the owner of the Monarch which it charters to Navios Corporation. Universe owns and operates a fleet of ocean-going bulk cargo vessels in worldwide service. It is a foreign corporation which is incorporated in Liberia ,^* with its principal office in Hamilton, Bermuda, British West Indies, and has an existing labor agreement with the G-lobal Seamen’s Union. This labor agreement was executed at Port-of-Spain, Trinidad, on January 6, 1960. The Articles of Agreement between Master and crew of the Monarch provide pertinently: “Between Master and Seamen in the Merchant Service of Liberia. ... It is agreed that all of the rights of the parties hereto without limitation shall be governed by the Laws of the Republic of Liberia. . . . Any disputes arising between the Master or owner and members of the crew regarding this agreement, wages and/or working conditions is to be settled by the proper competent representative of Liberia.”

Plaintiffs’ vessel the Monarch, was built in Japan, registered in Liberia and flies the Liberian flag. On this voyage it was carrying a load of Venezuelan ore from Puerto Ordaz, Venezuela, to the Fairless Works of the United States Steel Corporation at Morrisville, Pennsylvania.^** Because of the limited depth of the Delaware River the Monarch docked at Philadelphia to unload a part of her cargo and consequently is temporarily in American waters. All of the Monarch’s crew of 48 men are, with three exceptions, nationals and residents of foreign countries, and all except for the Master and Chief Engineer, are members of the Global Seamen’s Union. The Global Seamen’s Union is an unincorporated association, registered in the Cayman Islands, British West Indies.

The defendant Unions, i.e., four American national and/or international unions, waited at Pier 122 South, Philadelphia, for the arrival of the Monarch. Pickets carried in front of the entrance to the pier, signs bearing the legend “American Maritime Union Protests Unfair Labor Practices of Owners of the Ore Monarch” and “American Maritime Union Protests Substandard Wages and Working Conditions on the Ore Monarch.” The Unions also caused a small boat carrying pickets with similar signs to cruise in the vicinity of the Monarch. They also caused the pickets to prevent, or attempt to prevent, the unloading of ore and the delivery of supplies and victuals to the Monarch. Even more important, two agents of the defendant, the International Longshoremen’s Association, boarded the Monarch and ordered the members of its Local to cease working, which orders were promptly obeyed. Perhaps most important of all, the Unions induced three hatch-men to leave the boat and depart with them, thereby paralyzing the unloading. It is as clear as crystal that the aforesaid actions by defendants were taken for the obvious fourfold purpose (1) to induce the members of the Global Seamen’s Union to break their Union contract and (2) to induce the Monarch’s seamen to enter into a contract with one of the defendants in breach of their present Union contract and (3) to coerce the employers, i.e., the owner and/or the charterer of the Monarch to enter or induce the seamen to enter into a contract with one of the defendants and (4) to prevent the unloading and servicing of the Monarch until their purposes and objectives are accomplished. The Global Seamen’s Union intervened as a party plaintiff and vigorously attacked the actions of the defendants and sought the same injunctive relief against the defendant Unions as was prayed for by Navios Corporation and Universe Tankships, Inc.

The lower Court refused an injunction and dismissed the complaint on the ground that the National Labor Eelations Board had (primary) jurisdiction of this labor dispute and therefore the State Court lacked jurisdiction. This decision was today affirmed by this Court.

The National Labor Eelations Act, as amended by the Labor Management Eelations Act of 1947,^* will be searched in vain for any language which would give the National Labor Eelations Board jurisdiction under the aforesaid facts. The majority opinion is unable to quote or even point to any language of the Act in support of its interpretation. On the contrary, the purpose, the intent and the whole background of the Act is concerned with the industrial relationship between American workingmen and their employers — it was never intended to apply to foreign unions or to Union contracts made by foreigners with foreigners.

That the Labor Management Eelations Act of 1947 does not apply to cases of this nature is demonstrated by Benz et al. v. Compania Naviera Hidalgo, S. A., 353 U. S. 138 (1957). That case is directly in point^** and governs this case. In that case the owner of a foreign vessel (1) was granted an injunction against peaceful picketing by seamen and by three American Unions, and (2) damages were assessed against the Unions, including the three American Unions which were doing the peaceful picketing. Six months after the vessel sailed, the injunction orders were vacated and were ordered dismissed as moot and hence the appeal of the Unions only involved the right to and the amount of damages. The Supreme Court affirmed the judgment of the Federal District Court (which applied Oregon law) and, we repeat, had awarded damages to the foreign shipowner against the American Labor Unions which had been peacefully picketing the ship. In the course of its opinion the Supreme Court said (pages 139-147) :

“The S.S. Riviera on September 3, 1952, sailed into harbor at Portland, Oregon, for repairs, to load a cargo of wheat, and to complete an insurance survey. It was owned by respondent, a Panamanian corporation, and sailed under a Liberian flag. The crew was made up entirely of nationals of countries other than the United States, principally German and British. They had agreed to serve on a voyage originating at Bremen, Germany, for a period of two years, or until the vessel returned to a European port. A British form of articles of agreement was opened at Bremen. The conditions prescribed by the British Maritime Board were incorporated into the agreement, including wages and hours of employment, all of which were specifically set out. . . .

“On or about September 9, 1952, the members of the crew went on strike on board the vessel and refused to obey the orders of the Master. They demanded that their term of service be reduced, their wages be increased, and more favorable conditions of employment be granted. ... On September 15, 1952, they had designated the Sailors’ Union of the Pacific as their collective bargaining representative. The striking crew or others acting for them continued the picketing from September 26, 1952, until they withdrew the picket line on October 13, 1952. The Sailors’ Union of the Pacific began picketing the Riviera on October 14 and continued to do so until restrained by an injunction issued in an action fox* injunctive relief and damages filed against it and its principal x*epresentatives by tbe respondent. Two days later Local 90 of tbe National Organization of Masters, Mates and Pilots of America set up a picket line at the Riviera wbicb was maintained until December 8, 1952. This picketing was stopped by a writ issued against that union and its representatives in tbe second action for injunction and damages filed by respondent and consolidated bere. On December 10, 1952, another picket line was established at tbe vessel. It was maintained this time by tbe Atlantic and Gulf Coast District, S.I.U., until it too was enjoined on December 12 in a thix*d action filed by tbe respondent in wbicb tbe prayer likewise was for an injunction and damages. . . . All of tbe picketing was peaceful.

“. . . Tbe only American connection was that tbe controversy erupted while tbe ship was transiently in a United States port and American labor unions participated in its picketing.

“It is beyond question that a ship voluntarily entering tbe territorial limits of another country subjects itself to tbe laws and jurisdiction of that country. Wildenhus’s Case, 120 U. S. 1 (1887). Tbe exercise of that jurisdiction is not mandatory but discretionary. ... It follows that if Congress bad so chosen, it could have made tbe Act applicable to wage disputes arising on foreign vessels between nationals of other countries when tbe vessel comes within our tex*ritorial waters. Tbe question bere therefore narrows to one of intent of tbe Congress as to tbe coverage of tbe Act.

“Tbe parties point to nothing in tbe Act itself or its legislative history that indicates in any way that the Congress intended to bring such disputes within tbe coverage of tbe Act. . . .

“Our study of the Act leaves us convinced that Congress did not fashion it to resolve labor disputes between nationals of other countries operating ships under foreign laws. The whole background of the Act is concerned with industrial strife between American employers and employees. In fact, no discussion in either House of Congress has been called to our attention from the thousands of pages of legislative history that indicates in the least that Congress intended the coverage of the Act to extend to circumstances such as those posed here. It appears not to have even occurred to those sponsoring the bill. The Eeport made to the House by its Committee on Education and Labor . . ., stated that ‘the bill herewith reported has been formulated as a bill of rights both for American workingmen and for their employers.’ The report declares further that because of the inadequacies of legislation ‘the American workingman has been deprived of his dignity as an individual,’ and that it is the purpose of the bill to correct these inadequacies. (Emphasis added.) H. E. Eep. No. 245, 80th Cong., 1st Sess. 4. What was said inescapably describes the boundaries of the Act as including only the workingmen of our own country and its possessions.

“. . . Soon thereafter several proposals were made in Congress designed to extend the coverage of the Seamen’s Act so as to prohibit advancements made by foreign vessels in foreign ports. A storm of diplomatic protest resulted. Great Britain, Italy, Sweden, Norway, Denmark, the Netherlands, Germany, and Canada all joined in vigorously denouncing the proposals. In each instance the bills died in Congress.

“And so here such a ‘sweeping provision’ as to foreign applicability was not specified in the Act. The seamen agreed in Germany to work on the foreign ship under British articles. We cannot read into the Labor Management Relations Act an intent to change the contractual provisions made by these parties. For us to run interference in such a delicate field of international relations there must he present the affirmative intention of the Congress clearly expressed. It alone has the facilities necessary to make fairly such an important policy decision where the possibilities of international discord are so evident and retaliative action so certain. We, therefore, conclude that any such appeal should be directed to the Congress rather than the Courts.”

In addition to the controlling Benz case, are there any persuasive or controlling reasons to indicate whether Congress did or did not intend the National Labor Relations Board to have jurisdiction of questions and matters such as are herein involved? The answer is: Yes, there are two — practicalities and treaties.

This case is not just a question of whether one or more American unions can tie up the Ore Monarch which carries Venezuelan ore from Venezuela and flies the Liberian flag. This case reduced to its basic essentials, affects British, French, and all foreign ships and all foreign commerce — the sellers, the buyers, the owners, the charterers, the shippers, the consignees, the railroads, the trucking industry and all other carriers. As a necessary consequence, it likewise affects American and foreign unions and businesses and the Government of the United States. Most important of all, it directly affects (a) our treaties with other nations, and (b) international trade, which our Federal Government is attempting to expand, and (c) our friendship with other countries.

From ancient times international trade has grown up like Topsy — first to promote prosperity and later to foster friendships throughout the world. In order to maintain and protect trade between nationals of different countries and later international trade from banditry and conflicting national or domestic or group interests, certain protecting principles gradually took form. This form probably first appeared in the law-merchant. The need for international understandings or agreements affecting trade on the waters of the deep became especially vital and necessary. Hence there gradually evolved the internationally recognized doctrine of freedom of the seas. This doctrine presented, from time to time, problems which were approached or decided differently by different Nations at different times to suit their particular interests at a particular time. If a variety of tests could be adopted with each Nation establishing or applying the test which it momentarily preferred, maritime trade would be stifled, if not paralyzed. Maritime and international trade could not and cannot wait until the stockholders or the holding companies or eventually the owner (as distinguished from the registered or record owner) can be ferreted out and/or determined by Court proceedings in one or in many Nations. Consequently Nations have sought a common sign which would be visible, and easily recognizable and understandable by everyone— the Flag. For these reasons the historic doctrine of the flag (of registry) has been internationally recognized for over a century :Wildenhus’ Case, 120 U. S. 1; United States v. Flores, 289 U. S. 137; Benz v. Compania Naviera Hidalgo, S. A., 353 U. S. 138; Lauritzen v. Larsen, 345 U. S. 571, 584; Article V of the Geneva Convention on the High Seas of 1958, which was ratified by the United States Senate on May 26, 1960; Constitution of the Maritime Safety Committee of the Inter-Governmental Maritime Consultive Organization, I C.J. Reports 1960, page 150. In an opinion in connection therewith rendered on June 8, 1960, the International Court of Justice recognized that the registry and the flag of Liberia are entitled to the same national status which is accorded the registry and the flag of any other Nation. These are likewise the views of the Attorney General of the United States and of the Secretary of State of the United States and of the Secretary of Defense of the United States as presented to the National Labor Relations Board by the United States Intervener as Amicus Curiae in the very recent case of West India Fruit and Steamship Co., Inc., and three unions.

Confronted with this historical background^* and with the knowledge which every Congressman undoubtedly possesses — namely, that unless immediate and permanent relief were granted in this class of case, irreparable damage and disastrous international repercussions were inevitable — it is inconceivable to me, as it has been to the Attorney General and to the Secretary of State of the United States (see infra) that Congress intended to oust the historical jurisdiction of Courts of Equity in this maritime class of cases where damage is so obvious, so swift and so irreparable, and to vest jurisdiction as if it were a mere domestic matter or a domestic labor dispute in the tortoiselike processes of the National Labor Relations Board.^**

The majority in order to find jurisdiction only in the National Labor Relations Board attempt to pierce the corporate veil of all the holding companies and find that the vessel, by virtue of the ultimate stock ownership, is owned by American citizens. In the first place, for reasons hereinabove set forth, this is irrelevant — in these cases they cannot tear the flag from the masthead. In the next place, it would avail them nothing because of our treaty with Liberia.

Article VI, Clause 2, of the Constitution of the United States proclaims that “all Treaties made . . . under the Authority of the United States, shall be the Supreme Law of the Land and the Judges in every State shall be bound thereby.”

The nationality of the Ore Monarch is Liberian> and under the applicable treaty and the Constitution of the United States, as well as settled principles of International and Maritime Law, she must be treated as such. Article XV of the Treaty of Friendship, Commerce and Navigation of August 8, 1938^* between the United States and the Republic of Liberia provides:

“Merchant vessels and other privately owned vessels under the flag^** of either of the High Contracting Parties, and carrying the papers required by its national laws in proof of nationality shall, both within the territorial waters of the other High Contracting Party and on the high seas, be deemed to be the vessels of the Party whose flag is flown.”

As the Supreme Court of the United States stated in Lauritzen v. Larsen, 345 U. S. (supra), page 584 (1953) : “. . . the most venerable and universal rule of maritime law ... is that which gives cardinal importance to the law of the flag. Each state under International Law may determine for itself the conditions on which it will grant its nationality to a merchant ship, thereby accepting responsibility for it and acquiring authority over it. Nationality is evidenced to the world by the ship’s papers and its flag. The United States has firmly and successfully maintained that the regularity and validity of a registration can be questioned only by the registering 'state.”

This principle was recognized long ago in Wildenhaus’ Case, 120 U. S. 1 (1887), and followed in Umted States v. Flores, 289 U. S. 137 (1933). In addition, Article V of the Geneva Convention on the High Seas of 1958 (which was ratified by the United States Senate on May 26, 1960) provides pertinently:

“1. Each State shall fix the conditions for the grant of its nationality to ships, for the registration of ships in its territory, and for the right to fly its flag. Ships have the nationality of the State whose flag they are entitled to fly. . . .

“2. Each State shall issue to ships to which it has granted the right to fly its flag documents to that effect.”

And, in an advisory opinion, the International Court of Justice recognized that the registry and flag of Liberia are entitled to the same national status accorded the registry and flag of any other nation: Constitution of the Maritime Safety Committee of the Intergovernmental Maritime Consultive Organization, I C.J. Reports 1960, page 150.

As the Attorney General of the United States stated in his brief as Amicus Curiae before the National Labor Relations Board, in the matter of West India Fruit and Steamship Company, Inc., supra: “Another consideration compelling the recognition of the international law principle that the nationality of a ship is determined by the flag she flies is the fact that the principle is incorporated in various treaties of the United States with other nations. Honduras and Liberia, nations whose flags are flown on ships involved in these proceedings, have treaties with the United States, providing in essence that vessels flying their flags and carrying papers as required by their laws in proof of nationality must be recognized by the United States as ships of the flag-flying country within the territorial waters of this country. These provisions, or comparable ones, are common to a number of Treaties of Friendship, Commerce and Navigation which the United States has entered into with other friendly foreign nations, such as The Netherlands, Nicaragua, Iran, the Federal Republic of Germany, and Japan.

“A refusal to treat merchant vessels flying the flag of Liberia and Honduras as vessels of those nations would be in direct conflict with our treaty obligations and would, as the Under Secretary of State has pointed out in his letter of October 27, 1960, to the Attorney General, create serious difficulties in our foreign relations not only with nations signatory to these treaties but with other nations, such as Panama, which would be entitled to interpret a refusal to recognize the flag of the ship as a violation of the rules of international law upon which there had been mutual reliance.

"The flag rule of international law accords all nations equal status without discrimination and the flags of small nations such as Honduras, Liberia and Panama are entitled to the same recognition as those of the flags of such great maritime nations as the United States, Britain, France, and Germany. . . .

“A general application of the Taft-Hartley Act to ships flying the flags of Liberia, Honduras, and Panama would have far-reaching effects upon the internal economy of the ships, would displace the labor relations policies of the flag states as well as labor unions organized under their laws and would prejudice the foreign relations of the United States with these independent nations. In such event the flag nations involved would consider assumption of jurisdiction by the Board to be an unwarranted intrusion into their own domestic matters.

“It is difficult to conceive of a greater prejudice to maritime commerce and the foreign relations of the United States than attempts of administrative agencies of the United States or its courts to distinguish between nationality flags upon the basis of the internal legislation of the flag state fixing the conditions for the grant of its flag or other comparable factors.”

The Secretary of Defense by letter dated October 26, 1960 also requested the Attorney General to intervene in the cases pending before the National Labor Relations Board and point out to the Board the vital necessity of having “ships flying the flags of Liberia, Panama and Honduras . . . available for United States usage . . . during periods of national emergency” in accordance with agreements made by the United States with those countries. The Secretary of Defense said, inter alia: “In my considered judgment the subjection of these foreign flag vessels to the jurisdiction of the United States Labor Management Act would very likely have the effect of driving them to registration under the flags of other nations . . . and under such registries these ships would no longer he available for the emergency use of the United States . . . with consequent loss of control over a vital resource by the United States in the event of a national emergency.”

An analysis of Marine Cooks and Stewards v. Panama Steamship Co. and San Diego Building Trades Council v. Garmon and the other decisions of the Supreme Court upon which the majority relies will demonstrate that they are, because of their facts and/or a different Congressional Act, clearly distinguishable.

It is clear that the National Labor Relations Board does not have jurisdiction and that the Court of Common Pleas of Philadelphia (sitting in Equity) where the complaint was filed, does have jurisdiction. It is even clearer that the lower Court should enter the injunction prayed for. Even if the picketing in this case, in spite of taking the three hatchmen off the boat, is considered peaceful, the appellees (labor unions) continue under the delusion that all peaceful picketing is lawful. Of course that is not the law. It is well settled that a State Court may enjoin peaceful picketing if it is conducted in an unlawful manner, or if one of its objects is unlawful even though it is not the sole object: International Brotherhood of Teamsters Union, Local 309 v. Hanke, 339 U. S. 470; Building Service Employees International Union, Local 262 v. Gazzam, 339 U. S. 532; Wilbank v. Chester & Delaware Counties Bartenders, Hotel & Restaurant Employees Union, 360 Pa. 48, 50, 60 A. 2d 21, 22; Phillips v. United Brotherhood of Carpenters and Joiners of America, 362 Pa. 78, 82, 66 A. 2d 227, 228; Wortex Mills, Inc. v. Textile Workers Union of America, C.I.O., 369 Pa. 359, 369, 85 A. 2d 851, 857; Sansom House Enterprises, Inc. v. Waiters & Waitresses Union, Local 301, A.F.L., 382 Pa. 476, 480, 115 A. 2d 746, 748; Anchorage, Inc. v. Waiters & Waitresses Union, 383 Pa. 547, 119 A. 2d 199; Garner v. Teamsters, Chauffeurs & Helpers, Local Union No. 776, 373 Pa. 19, 22, 94 A. 2d 893, 895; Baderak v. Building & Construction Trades Council, 380 Pa. 477, 482, 112 A. 2d 170, 173; West Penn Township School District v. International Brotherhood of Electrical Workers, 396 Pa. 408, 145 A. 2d 258; Northampton Area Joint School Authority v. Building & Construction Trades Council, 396 Pa. 565, 152 A. 2d 688; Act of June 2,1937, P. L. 1198, as amended by tbe Act of June 9, 1939, P. L. 302, §4(a), (b).

It is clear that defendants have violated (a) tbe fundamental law of the land as well as (b) tbe law of Pennsylvania, and (c) that tbeir unlawful objects, conduct and activities have caused and are causing plaintiffs and buyers and carriers irreparable damage^* and tbeir conduct is in violation of our international treaties and will likely injure our friendly relationships with many other countries. In my judgment plaintiffs have made out a case clearly requiring tbe issuance of an appropriate injunction.

For each and all of tbe aforesaid reasons, I dissent.

* Universe Tankships, Inc., is wholly owned by Oceanic Tank-ships, S. A., a Panamanian corporation, which in turn is wholly owned by two individuals, both of whom are American citizens. Navios Corporation is wholly owned by Navigen Corporation, which is in turn a wholly owned subsidiary of the United States Steel Corporation.

** Since this vessel was registered, she has made various voyages between South American ports and ports in the United Kingdom and Canada, as well as the United States.

* 61 Stat. 136, 29 U.S.C.A., §141.

** Tliis case was decided by tbe U. S. District Court under Oregon law wbicb is like Pennsylvania law and contains different provisions from tbe Norris-LaGuardia Act and other Federal Acts.

* The enormous damage to plaintiffs and interveners which is mounting daily has necessitated this as well as the pertinent principles and authorities to be presented in capsule form.

** My sympathies are naturally entirely with American workers such as are represented by the defendant Unions, because they have become unemployed or are threatened with unemployment and distress by our National policy of more and more billions for economic non-military foreign aid. For years this economic foreign aid which has exceeded 30 billion dollars was both wise and necessary, but many non-communist Countries have, with the help of our enormous financial aid, recovered to such an extent that they are now flooding our Country with cheaply made foreign goods and creating vast unemployment. I am convinced that it would be far wiser to spend or give our money to distressed areas and distressed and unemployed people in our Country. However, that policy is a matter for Congress and the President of the United States and not for Labor Unions, or Labor Relations Boards, or Courts.

* 54 Stat. 1739 (1939), TIAS No. 956. This same or a similar provision is also found in the Treaties of Friendship, Commerce and Navigation which the United States has entered into with the Federal Republic of Germany, 7 UST 1839, TIAS No. 3593 (October 29, 1954) ; Honduras, 45 Stat. 2618 (1928), TIAS No. 764 (December 7, 1927) ; Iran, 8 UST 899, TIAS No. 3853 (August 15, 1955) ; Japan, 4 UST 2063, TIAS No. 2863 (April 2, 1953) ; The Netherlands, 8 UST 2043, TIAS No. 3942 (March 27, 1956) ; and Nicaragua, 9 UST 449, TIAS No. 4024 (January 21, 1956).

** Italics throughout, ours.

* During the three weeks following October 21, 1960, twelve vessels flying a foreign flag have already been diverted from the Port of Philadelphia, resulting in a loss of approximately 405,000 tons of ore to this Port. The loss to the Port, to the shippers, the buyers, the railroads, and other carriers has not been estimated, but is obviously tremendous.