Opposition Brief — Gardiner v. Sea-Land Service, Inc.

aE.

Supreme Court, U.S,

: FILED

h

/ SEP 25 1968

No. 86-329 JOSEPH F. SPANIOL, JR,

CLERK

In the Supreme Court

OF THE

United States

OCTOBER TERM, 1986

CORY GARDINER, et al.,

Petitioners,

Vv.

SEA-LAND SERVICE, INC., et al.,

Respondents.

On Petition for a Writ of Certiorari

to the United States Court of Appeals

for the Ninth Circuit

RESPONDENTS’ BRIEF IN CPPOSITION

SAMUEL D. DELICH* J. STEWART HARRISON

SANDRA R. MCCANDLESS BROBECK, PHLEGER &

MARTIN H. Dopp HARRISON

GRAHAM & JAMES Spear Street Tower

One Maritime Plaza, Suite 300 One Market Plaza

San Francisco, CA 94111 San Francisco, CA 94105

(415) 954-0200 (415) 442-0900

DANIEL J. DOUGHERTY HowarbD L. GANz*

KIRLIN, CAMPBELL & KEATING PROSKAUER, ROSE, GOETZ &

14 Wall Street MENDELSOHN

New York, NY 10005 300 Park Avenue

(212) 732-5520 New York, NY 10022

(212) 909-7000

Counsel for Respondents

September 24, 1986

*Counsel of Record for Respondents

BOWNE OF SAN FRANCISCO INC. «¢ 19O NINTH ST * SF CA 94103 « (415) 864-2300

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QUESTION PRESENTED

It is settled maritime law that seamen may contract with

respect to maintenance and other traditional rights if they are not

overreached and receive quid pro quo for any diminution of such

rights. It is equally settled under federal labor law that courts

should be reluctant to interfere with the private bargaining pro-

cess upon which collect've bargaining rests. Petitioners were

represented by their respective maritime labor unions in collective

bargaining and are the beneficiaries of comprehensive benefits

packages, which include an $8.00 per day maintenance rate,

established in their collective bargaining agreements. Petitioners

do not contend that these overall benefits packages are unfair or

inadequate, but instead argue that, viewed in isolation, the main-

tenance rates are inadequate and unenforceable.

The question presented, therefore, is whether the United States

Court of Appeals for the Ninth Circuit properly held that:

(a) “when a benefits package includes an express refer-

ence to a precise rate of maintenance, the adequacy of this

rate, considered in isolation, is not a subject for judicial

speculation when the rate is part of a total package of wages

and benefits resulting from the process of collective

bargaining”

and correctly concluded that:

(b) “the national labor policy of encouraging the use and

reliability of collective bargaining agreements, together with

the realistic give and take occurring within the collective

bargaining process, justify enforcement of the specific rate of

maintenance contained in the agreement here.”

Gardiner v. Sea-Land Service, Inc., 786 F.2d 943, 949-50 (9th

Cir. 1986).

il

LIST OF ALL PARTIES

Petitioners are: Cory Gardiner; William E. Bishop; William

Wheat; Yung Kong Ho; Juan P. Sanchez; Eugene A. Carter and

Alfonso Di Fabrizio.

Respondents are: Sea-Land Service, Inc.; Delta Steamship

Lines, Inc.; American President Lines, Inc.; Keystone Shipping

Co.; Lykes Bros. Steamship Co., Inc.; Matson Navigation Co.;

United States Lines, Inc., and Chevron Shipping Company.*

*Pursuant to Rule 28.1 of the Rules of the United States Supreme

Court, respondents hereby list their parent corporations and less than

wholly owned subsidiaries and affiliates. Sea-Land Service, Inc. is a

wholly owned subsidiary of Sea-Land Corporation. CSX Corporation,

through its wholly owned subsidiary CSA Acquisition Corporation, has

offered to purchase all outstanding shares of Sea-Land Corporation,

pending approval of the acquisition by the Interstate Commerce Com-

mission. Buyers Consolidated, Inc., Arabian Container Terminals Lim-

ited and Sea-Land Container Terminal Administration Co., Ltd. are less

than wholly owned subsidiaries or affiliates of Sea-Land Service, Inc.

All other subsidiaries of Sea-Land Service, Inc. are wholly owned.

Delta Steamship Lines, Inc. is a wholly owned subsidiary of Crowley

Marine International, Inc. which, in turn, is a wholly owned subsidiary

of Crowley Maritime Corporation. Liberian Development Corp. is a less

than wholly owned subsidiary of Delta Steamship Lines, Inc. All other

subsidiaries of Delta Steamship Lines, Inc. are wholly owned.

American President Lines, Inc. is a wholly owned subsidiary of

American President Companies, Ltd. All subsidiaries of each company

are wholly owned.

Keystone Shipping Co. is owned by Chas. Kurz & Co., Inc. Keystone

Tankship Corporation is the only less than wholly owned subsidiary of

Keystone Shipping Co.

Lykes Bros. Steamship Co., Inc. is a wholly owned subsidiary of

Interocean Steamship Corp. which, in turn, is owned in various percent-

ages by the following companies: Shore Management, Inc., Carondelet

Street Corp., Edgelake Corp. and McCormick Management Corp.

Lykes Bros. Steamship Co.’s oniy subsidiary is wholly owned.

Matson Navigation Co., Inc. is a wholly owned subsidiary of Alexan-

der & Baldwin, Inc.

United States Lines, Inc. is a wholly owned subsidiary of First Colony

Farms, Inc. which, in turn, is a wholly owned subsidiary of McLean

Industries, Inc. All subsidiary or related companies of United States

Lines, Inc. are wholly owned by either United States Lines, Inc. or

McLean Industries, Inc.

Chevron Shipping Company intends to file its own brief in opposition

to the petition for writ of certiorari and will provide therein the

information required by Rule 28.1

iil

TABLE OF CONTENTS

Page

Pot ye ke 1 6 Ss i

RU AMS WOWEEIEED 6g civ ees cece cess censeeens il

TABLE OF AUTHORITIES CITED ................. iv

SrAsmmcms OF THE CASE ....:.. 0... eee eee |

eee eee l

Dm me mapnt 10 Maeimtenance.................000. 2

REASONS FOR DENYING THE WRIT OF CERTIO-

a a as wide dds 4k ese heen kcee.s 4

A. The Court Of Appeals Properly Found, And The

Evidence Showed, That The Maintenance Provisions

Of The Collective Bargaining Agreements Are

Enforceable As One Part Of A Complete Benefits

Package And Cannot Be Judicially Reviewed In

ee Lag 5s 6a 66464-68666 be oa we es 4

B. The Court Of Appeals’ Decision Is Consistent With

Federal Labor Law And Policy.................. 8

C. The Court Of Appeals’ Decision Is Consistent With

ES 10

D. The Court Of Appeals’ Decision Creates No Conflict

With Decisions Of This Court Or The Fifth Circuit 12

as Spi sch as cebebecdeesvenness 14

ates ss ce nee k reer se veeesesese's A-1

iV

TABLE OF AUTHORITIES CITED

Cases

Page

Bailey v. Moore-McCormick Lines, Inc., 280 F. Supp. 310

Sr OED) Mss bose bck ase oe shale arden aes 12

Bonici v. Standard Oil Co., 103 F.2d 437 (2d Cir.), cert.

Gomiad, SUB UB. S60 CUT) oc ccc ce ceecccessvs 3, 10, 11

Brown v. Lull, 4 F. Cas. 407 (C.C.D. Mass. 1836) (No.

BM cas ess te eae eee tik bomen bend 3

Clinton v. United States, 254 F.2d 409 (9th Cir. 1958), cert.

ro mS | ee 3, 11

Cortes v. Baltimore Insular Line, Inc., 287 U.S. 367 (1932)

Bae ac tala ae ea ae yn we ee ee ree 12, 13

Covert v. Centennial Queen, 185 F. Supp. 552 (D. Or. 1960) 12

DeZon v. American President Lines, 318 U.S. 660 (1943) 13

Dixon v. Maritime Overseas Corp., 490 F. Supp. 1191

(S.D.N.Y.), affd, 646 F.2d 560 (2d Cir. 1989), cert.

re ee Uh Gk ee Gi ne codec cweeay acca es 1]

Ford Motor Co. v. Huffman, 345 U.S. 330 (1953) ....... )

Gajewski v. United States, 540 F. Supp. 381 (S.D.N.Y.

| RR eres Gamenemnmntpan AR Mikasa ap 12

Gardiner v. Sea-Land Service, Inc., 786 F.2d 943 (9th Cir.

CN Sikes So a 5G hs BRR a ee ees passim

Grove v. Dixie Carriers, Inc., 553 F. Supp. 777 (E.D.

2 er a er ee re FS Ry

Harden v. Gordon, 11 F. Cas. 480 (C.C.D. Me. 1823) (No.

OD ick ook lee ee eee eee ee 3, 10

H.K. Porter Co. v. N.L.R.B., 397 U.S. 99 (1970)........ 8

Hodges v. Keystone Shipping Co., 578 F. Supp. 620 (S.D.

pc, 2 rer rere rer? errr errr A

Irwin v. Carpenters Health & Welfare Trust Fund, 745 F.2d

| Sen oe re Pae A enn A every heart ge 8

Johnson v. United States, 333 U.S. 46 (1948) ........... 8, 14

Vv

TABLE OF AUTHORITIES CITED

CASES

Page

Ladzinski v. Sterling S.S. & Trading Corp., 300 F. Supp. 947

OS | Peper ere rt een na 12

Law v. United Fruit Co., 264 F.2d 498 (2d Cir.), cert.

pe ROR eG) | rr 3, 11

Mahramas v. American Export Isbrandtsen Lines, 475 F.2d

i Soc | ee rey create ira ate 7-8

McWilliams v. Texaco, Inc., 781 F.2d 514 (Sth Cir. 1986) 13

Meade v. Skip Fisheries, Inc., 385 F. Supp. 725 (D. Mass.

SNE sos dp ease cee ake REE eee ae 12

N.L.R.B. v. Allis-Chalmers Mfg. Co., 388 U.S. 175 (1967) 13

Pedersen v. Diesel Tankers, 280 F. Supp. 421 (S.D.N.Y.

kd da ee Res se dE ee ee eee 12

Reardon v. California Tanker Co., 260 F.2d 369 (2d Cir.

1958), cert. denied, 359 U.S. 926 (1959) ........... 2,9, 12

Rutherford v. Sea-Land Service, Inc., 575 F. Supp. 1365

CO Ss SE oe irs po eras hak 0 ea ee ee

Tague v. American Pres. Lines, Ltc., 1975 A.M.C. 1129

a es goes als ea er eee 12

The Atlantic, 2 F. Cas. 121 (S.D.N.Y. 1849) (No. 620).. 3

Thomas v. Humble Oil & Refining Co., 420 F.2d 793 (4th

Re a i a 55 heer een ee ern iN ela e 11

Toyota Landscape Co. v. Teamsters, 726 F.2d 525 (9th Cir.

SER hd 5 Sao eee as hh cee eRe eer 9

United Steelworkers of America v. Warrior & Gulf Nav.

oe A ey Be re re eee rere 9

Vitco v. Joncich, 130 F. Supp. 945 (S.D. Cal. 1955), afd,

cee Bie. te a) rrr fan 82

Williams v. Barge Foss, 528 F. Supp. 226 (W.D. Wash.

Oe GPR Spree ne re “mmr OA alge Ar MRA rE ge 12

W.R. Grace & Co. v. Rubber Workers Local 759, 461 U.S.

Cree Cs a Ge wea ea ee kee oe ee ek ee 10

v1

TABLE OF AUTHORITIES CITED

CASES

Page

Zoldan v. American Export Isbrandtsen Lines, Inc., 1969

A.M.C. 471 (S.D.N.Y. 1969), affd per curiam, 1970

Pee BEE? COG TOFOD iis eccs¥ iene vinwaceoe 3, 11

Treatises

Gilmore & Black, The Law of Admiralty (2d ed. 1975) .. 5

No. 86-329

In the Supreme Court

OF THE

United States

OCTOBER TERM, 1986

Cory GARDINER, et al.,

Petitioners,

V.

SEA-LAND SERVICE, INC., et al.,

Respondents.

On Petition for a Writ of Certiorari

to the United States Court of Appeals

for the Ninth Circuit

RESPONDENTS’ BRIEF IN OPPOSITION

STATEMENT OF THE CASE

A. Procedural Summary

Petitioners are members of various maritime unions and pur-

port to represent several thousand similarly situated union

seamen.’ Petitioners brought suit in August 1983 seeking to

invalidate the “maintenance” provisions of their collective bar-

gaining agreements. Those agreements currently provide for

maintenance to be paid at the rate of $8.00 per day. Respondents

moved to dismiss the action or for summary judgment, arguing

' Petitioners Gardiner, Ho and DiFabrizio are members of the Seafar-

ers International Union (“SIU”); petitioner Sanchez is a member of the

Marine Engineers Beneficial Association (“MEBA”); petitioners

Wheat and Bishop are members of the National Mantime Union

(“NMU”); and petitioner Carter is a member of the Marine Fireman’s

Union (“MFU”).

5

that the collectively-bargained rates of maintenance were binding

upon petitioners as a matter of federal labor and maritime law.

Relying upon its earlier decision in Rutherford v. Sea-Land

Service, Inc., 575 F. Supp. 1365 (N.D. Cal. 1983), the district

court denied the mution and certified the question to the United

States Court of Appeals for the Ninth Circuit. pursuant to the

agreement of all parties.

The Ninth Circuit reversed, finding that as a result of the “give

and take” of collective bargaining, petitioners’ unions had negoti-

ated a comprehensive benefits package which included contractu-

ally specified rates of maintenance. The Court of Appeals

concluded that the broad policies which underlie federal labor law

required that the maintenance rates be enforced, holding that:

when a benefits package includes an express reference to a

precise rate of maintenance the adequacy of this rate, consid-

ered in isolation, is not a subject for judicial speculation

when the rate is part of a total package of wages and benefits

resulting from the process of collective bargaining. Gardiner

v. Sea-Land Service, Inc., 786 F.2d 943, 949 (9th Cir. 1986).

Accord Hodges v. Keystone Shipping Co., 578 F. Supp. 620 (S.D.

Tex. 1983); Grove v. Dixie Carriers, Inc., 553 F. Supp. 777 (E.D.

La. 1982). See also Reardon v. California Tanker Co.. 260 F.2d

369 (2d Cir. 1958), cert. denied, 359 U.S. 926 (1959).

B. The Right To Maintenance

Maintenance, as described by the Court of Appeals, is:

the duty of a shipowner to provide food and lodging to a

seaman who falls ill or becomes injured while in the service

of the ship. Calmar S.S. Corp. v. Taylor, 303 U.S. 525. 528,

58 S.Ct. 651, 653, 82 L.Ed. 993 (1938). The night to

maintenance is tied to the right to cure, i... necessary

medical services, and both extend to the point of “maximum

recovery.” Vaughn v. Atkinson, 369 U.S. 527, 531. 82 S.Ct.

997, 999, 8 L.Ed. 2d 88 (1962). In addition, a seaman is

entitled [to] recover unearned wages. The Osceola, 189 U.S.

158, 175, 23 S.Ct. 483, 487, 47 L.Ed. 760 (1903): Norris.

The Law of Seamen § 26.7 at 15-16 (4th ed. 1985). In sum.

3

the elements of the common law maintenance and cure

action included a living allowance during the recovery period

(maintenance), reimbursement for medical expenses (cure),

and unearned wages for the period from the onset of injury or

‘IIness until the end of the voyage. Gilmore and Black, 281,

305, 309. Gardiner, supra, 786 F.2d at 945-46.

Maintenance, like its counterpart “cure,” is a legally imposed

term and condition of the seaman’s contract of employment, first

recognized in the maritime law of the United States by Justice

Story in Harden v. Gordon, 11 F. Cas. 480 (C.C.D. Me. 1823)

(No. 6,047), long before the advent of national labor laws and

unionization of seamen. The court in Harden specifically recog-

nized that seamen can legally contract with respect to mainte-

nance (and other traditional rights) so long as they are not

overreached and receive compensation (1.e., quid pro quo) “en-

tirely adequate to the diminution of the right or privilege on the

part of the seamen.” Id. at 485.

The seaman’s ability to contract with respect to his terms and

conditions of employment, including maintenance, has been con-

sistently recognized and upheld where the seaman has not been

overreached and receives an adequate quid pro quo for any

diminution of his rights. See, e.g., Law v. United Fruit Co., 264

F.2d 498, 499-500 (2d Cir.), cert. denied, 360 U.S. 932 (1959);

Clinton v. United States, 254 F.2d 409, 410-11 (9th Cir. 1958),

cert. denied, 358 U.S. 941 (1959); Bonici v. Standard Oil Co., 193

F.2d 437, 438-39 (2d Cir.), cert. denied, 308 U.S. 560 (1939);

Brown v. Lull, 4 F. Cas. 407, 409 (C.C.D. Mass. 1836) (Ne.

2,018); Zoldan v. American Export Isbrandtsen Lines, Inc., 1969

AMC. 471, 474 (S.D.N.Y. 1969), aff'd per curiam, 1970

A.M.C. 2177 (2d Cir. 1970); The Atlantic, 2 F. Cas. 121, 128

(S.D.N.Y. 1849) (No. 620). As the district court below expressly

recognized, therefore, maintenance is a proper subject for bar-

gaining between maritime unions and shipowners. Rutherford,

supra, 575 F. Supp. at 1373: Petition for Writ of Certioran

(‘“*Pet.”), Appendix (“App.”) B at B-1.

As set forth below, the Court of Appeals’ decision is based

upon the undisputed evidence inttoduced by respondents, is fully

consistent with settled federal labor and maritime law, and is not

4

in conflict with the decisions of this Court or of other circuit

courts. Accordingly, the Ninth Circuit opinion in Gardiner

presents no issue for consideration by this Court and respondents

respectfully submit that the petition for a wnt of certiorari should

be denied.

REASONS FOR DENYING THE WRIT OF CERTIORARI

A. The Court Of Appeals Properly Found, And The Evidence

Showed, That The Maintenance Provisions Of The Collec-

tive Bargaining Agreements Are Enforceable As One Part

Of 4 Complete Benefits Package And Cannot Be Judicially

Reviewed In Isolation

Petitioners have, from the beginning of this action, attempted

to isolate the maintenance provisions of the collective bargaining

agreements in an effort to portray those provisions as “starvation

payments” and as “an inadequate allowance.” Pet. at 4, 6. The

Court of Appeals properly held, however, that the maintenance

provisions cannot be viewed in isolation, but are part and parcel of

a package of benefits which provide for seamen both on board

ship and on shore. Gardiner, supra, 786 F.2d at 949. A review of

those collectively-bargained benefits utterly dispels the notion

that petitioners are poor and friendless, destined to live on a mere

$8.00 per day. The undisputed evidence in the record below

demonstrates that petitioners are the beneficiaries of a compre-

hensive and generous benefits packages negotiated by their unions

which they enjoy shoreside as well as aboard ship.’

Petitioners’ collective bargaining agreements regulate all as-

pects of their employment and indisputably include substantial

benefits packages including wages, overtime pay, full health and

welfare benefits, pensions and liveral vacation benefits in addition

to maintenance.’ Collectively-bargained benefits available to

? Indeed, the Court of Appeals noted that petitioners had made “no

allegation that the collective bargaining agreement as a whole is unfair

or inadequate.” /d. at 949.

> Certain of the benefits available to petitioners are summarized in

Appendix A hereto which has been reproduced from respondents’ reply

5

members of petitioners’ unions include, inter alia, wage rates

which range, exclusive of overtime, from $1,823.29 to $5,262.45

per montii for MEBA members; $1,081.06 to $2,415.90 per

month for SIU members; and $1,026.66 to $2,508.59 per month

for NMU members. Unearned wages* and vacation pay are based

upon these union wage rates. Members also receive premium and

penalty pay for unpleasant tasks, substantial overtime pay and

extremely liberal vacation benefits which range from one vacation

day for each three days worked for SIU members to one vacation

day for each day worked for some MEBA members. Union

members may, and frequently do, receive pay in lieu of vacation

time earned. Upon permanent disability or retirement, members

receive pensions and the SIU and NMU pension plans provide

spousal pensions and annuities, respectively.

Most significantly, the unions have negotiated health and

welfare plans that far exceed the shipowners’ historical duty to

provide “cure” to the ill or injured seaman.” The undisputed

evidence below showed that the MEBA Medical and Benefits

Plan provides MEBA members and their dependents with cover-

age for all hospital confinements and surgical, maternity, major

medical, dental and optical benefits, together with free medical

examinations at Diagnostic Centers established by the Plan and

reimbursement of transportation expenses incurred in traveling to

brief in the Court of Appeals. The evidence of benefits available to

petitioners individually and to maritime union members generally was

undisputed in the courts below.

* Disabled seamen are entitled under maritime law to receive their

unearned wages from the onset of injury or illness to the end of their

contract of employment. Gilmore & Black, The Law of Admiralty, 309-

10 (2d ed. 1975).

* The shipowner is required by maritime law to provide “cure” to the

seaman disabled in the service of the ship only to the point of “maxi-

mum recovery.” Gardiner, supra, 786 F.2d at 946. Accordingly, a

permanently disabled seaman at “maximum cure” is not entitled to

ongoing care at the shipowner’s expense. This is in distinct contrast to

the medical benefits and disability pensions provided to seamen and

their dependents for shoreside as well as shipboard disabilities pursuant

to petitioners’ collective bargaining agreements.

6

such Diagnostic Centers. Significantly, in addition to mainte-

nance, the MEBA Plan provides a $50 per week disability benefit

to a MEBA member unable to perform his regular employment

duties.

The SIU Welfare Plan provides major medical and other

benefits, including hospitalization for any disability, maternity

benefits, an alcoholic rehabilitation and counseling program,

death and dismemberment benefits and a scholarship program for

union members and their dependents. The SIU Welfare Plan also

provides a sickness and accident benefit of $8.00 per day for up to

39 weeks, payable during any period when a disabled seaman

would not otherwise be entitled to maintenance. The NMU

Welfare Plan provides for a comprehensive major medical plan

with a $250,000 lifetime maximum for members and their depen-

dents. Additionally, the health and welfare plans provide that “the

ill or injured seaman receives free transportation to his home port

and a disability pension.” Gardiner, supra, 786 F.2d at 949.

Petitioners themselves were direct beneficiaries of these corn-

prehensive benefits packages. For example, petitioner Sanchez, a

member of MEBA, was injured, and declared not fit for duty, on

the 15th day of an 88-day voyage aboard a Sea-Land vessel. That

same day, he received earned wages of $2,947, after authorized

deductions. Following treatment at a hospital in Manila, Mr.

Sanchez was flown to the United States by tourist class air,

receiving (pursuant to the collective bargaining agreement) a

payment of $831 for the differential between tourist and first class

airfare. He received unearned wages of $2,369 for 73 days and

was credited with vacation benefits of over $6,000 based on the

entire 88-day voyage. In addition to maintenance, he was also

eligible to receive the $50 MEBA weekly disability benefit.

Finally, the MEBA Welfare Plan paid approximately $10,000 for

Sanchez’s hospital and medical bills.

Petitioner Bishop, a Lykes employee represented by the NMU,

became ill and left the service of the ship on the 48th day of a

124-day voyage. He received unearned wages of approximately

$2,800 for the remaining 76 days of the voyage. In addition to

maintenance, and earned wages exceeding $3,000, he also re-

7

ceived vacation benefits of more tha> $3,000 based upon the full

124-day voyage.

Petitioner Wheat signed articles for a 42-day voyage, but left

the vessel after 22 days because of an injury. In addition to earned

wages of more than $2,000 and maintenance and cure, he re-

ceived unearned wages of more than $1,400 and vacation benefits

of approximately $2,200 based upon the entire voyage.

As summarized above, petitioners, like other union seamen,

receive maintenance merely as one part of a comprehensive,

collectively-bargained compensation and benefits package. Con-

trary to petitioners’ intimations, they are neither starving nor

forced to survive on their maintenance benefits alone. Instead,

they enjoy the benefits of their collective bargaining agreements

on shore as well as aboard ship. Like courts before it, therefore,

the Ninth Circuit found that the collectively-bargained mainte-

nance rates were enforceable because those maintenance rates

were “part of an overall benefits package.” Hodges v. Keystone

Shipping, supra, 578 F. Supp. at 622; Grove v. Dixie Carriers,

Inc., supra, 553 F. Supp. at 780.

The Court of Appeals also found that its holding was supported

by the evidence of actual bargaining between the parties over the

rate of maintenance.

A second consideration which persuades us the bargained for

rate should be enforced is that the facts in this case demon-

strate that there was real bargaining over the maintenance

rate. In 1975 the Marine Engineers Beneficial Association

requested an increase in the maintenance rate to $20.00 and

in 1981 the Seafarers International Union asked for an

increase to $12.00. Both proposals were withdrawn as part of

the give and take of collective bargaining. Thus, the parties

have bargained for maintenance as a part of the overall

benefits package. Gardiner, supra, 786 F.2d at 949 (empha-

sis added).

8

In summary, the evidence demonstrated that petitioners and their

unions had barg2**#s! for and received quid pro quo for the

specified rate of ma.iitenance.°

B. The Court Of Appeals’ Decision Is Consistent With Federal

Labor Law And Policy

The Court of Appeals correctly held that, pursuant to federal

labor policy, courts should refrain from interfering with the

choice, freely made by petitioners through their unions during

collective bargaining, to accept the specified rates of maintenance

in return for other substantial benefits.

This Court has emphasized that federal labor policy rests upon

the “fundamental premise” of “private bargaining under govern-

mental supervision of the procedure alone, without any official

compulsion over the actual terms of the contract.” H.K. Porter

Co. v. N.L.R.B., 397 U.S. 99, 108 (1970) (emphasis added).

Courts must be reluctant to interfere with the collective bargain-

ing process, for otherwise “[j]udicial rewriting of labor contract

terms that are clear in both the language used and situations

addressed would undermine [the] private bargaining process

which federal labor policy promotes.” /rwin v. Carpenters Health

& Welfare Trust Fund, 745 F.2d 553, 557 (9th Cir. 1984).

The parties to the collective agreement are best able to deter-

mine how their relationship should be structured in the interests

of all because, as this Court has stated, “[t]he mature labor

agreement may attempt to regulate all aspects of the complicated

relationship, from the most crucial to the most minute over an

extended period of time.” United Steelworkers of America v.

* Although not mentioned by the Court of Appeals, the non-union

seaman may recover for maintenance on/y the amount of his own actual

and reasonable expenditures and may not recover if he has incurred no

such expense. Johnson v. United States, 333 U.S. 46, 50 (1948);

Mahramas v. American Export Isbrandtsen Lines, 475 F.2d 165, 172

(2d Cir. 1973). In contrast, the union seaman is not required to offer

proof of actual expenditures or the reasonableness of those expenditures

in order to receive maintenance at the predetermined union contract

rate. Reardon v. California Tanker Co., supra, 260 F.2d at 374-75;

Grove v. Dixie Carriers, Inc., supra, 553 F. Supp. at 781.

9

Warrior & Gulf Nav. Co., 363 U.S. 574, 580 (1960). Thus,

interference by the courts with the decisions made in collective

bargaining is particularly to be avoided because a collective

bargaining agreement is not merely a “private agreement, but

rather an instrument of government.” Toyota Landscape Co. v.

Teamsters, 726 F.2d 525, 529 (9th Cir. 1984). In view of this

comprehensive nature of a collective bargaining agreement, the

“complete satisfaction of all who are represented is hardly to be

expected.” Ford Motor Co. v. Huffman, 345 U.S. 330, 338

(1953). A “wide range of reasonableness must be allowed a

statutory bargaining representative in serving the unit it repre-

sents, subject always to complete good faith and honesty of

purpose....” /d. at 338.

Consistent with the foregoing principies, the Court of Appeals

enforced the maintenance rates, concluding that it could not

fairly say that this [maintenance] rate, as a consequence of

the normal “give and take” process of collective bargaining,

is not entitled to the same reliability accorded to other terms

and conditions within the same agreement.

** *

“The rate of maintenance is but one of many elements

contained within the Union contract and over which the

parties negotiate, and there may be a considerable amount of

‘give and take’ exercised by the parties in coming to a final

agreement on all of the elements.” Grove v. Dixie Carriers,

Inc., 553 F. Supp. 777, 780 (E.D. La. 1982).

* * *

The adequacy of the maintenance rate should not be ex-

amined in isolation by the court because the determination of

its adequacy in relation to the whole scheme of benefits has

already been made by the union and the seamen who voted

for the contract. 786 F.2d at 949.’

’ The Court of Appeals also stressed that “courts which have held that

seamen must receive more than $8.00 for maintenance were deciding on

10

Courts should respect the choices made in coilective bargaining

for the additional reason that doing so promotes industrial stabil-

ity, a hallmark of federal labor policy. Gardiner, supra, 786 F.2d

at 948. Singling maintenance out for judicial scrutiny from the

total package of benefits negotiated by the parties would threaten

industrial stability because “parties to a collective bargaining

agreement must have reasonable assurance that their contract will

be honored.” W.R. Grace & Co. v. Rubber Workers Local 759,

461 U.S. 757, 771 (1983). The Court of Appeals therefore

properly found that the maintenance rates should be enforced

because “[t]he national iabor policy of promoting and encourag-

ing collective bargaining agreements would be unduly compro-

mised were we to conclude otherwise.” Gardiner, supra, 786 F.2d

at 949.

C. The Court Of Appeals’ Decision Is Consistent With Settled

Maritime Case Law

The Gardiner opinion presents no issue to be considered by this

Court because it is consistent with settled maritime law, as well as

federal labor law. Virtually every court in the past thirty years

which has considered the enforcement of a collectively-bargained

rate of maintenance has reached the same result.

As discussed above, courts have long held that seamen may

contract with respect to maintenance and other traditional rights

if they receive quid pro quo. Harden v. Gordon, supra, \\ F. Cas.

at 485. Consistent with this quid pro quo principle under mari-

time law, courts agree that the “rate and mode of payment of

maintenance” may be set by contract. Hodges v. Keystone Ship-

ping Co., supra, 578 F. Supp. at 622. Indeed, the district court

below recognized that “parties may surely contract with respect to

the rate of maintenance. .. .” Pet. App. B. at B-1. See also

Rutherford, supra, 575 F. Supp. at 1373 (maintenance is a proper

“subject of bargaining” between unions and employers).°

the adequacy of the rate for nonunicn seamen [citing cases].” /d.

(Emphasis in original. )

* Similarly, a seaman may freely release his claim for maintenance in

settlement of a lawsuit where the release agreement is fair and the

seaman comprehends the rights so waived. Bonici v. Standard Oil Co..,

11

In Hodges v. Keystone Shipping Co., supra, 578 F. Supp. 620,

for example, the court set forth the legal principles underlying the

rule that a maintenance rate established in a collective bargaining

agreement is enforceable. In remitting a jury award of mainte-

nance in excess of the negotiated rate, the court stated:

[P]laintiff's rate of recovery of maintenance is limited by the

NMU contract... . The right to maintenance originates from

an individual’s seaman status and is a term of the employ-

ment which cannot be contracted away.... The rate and

mode of payment of maintenance, however, can be regulated

by contract. The contract between the seaman and his

employer “establishes as a matter of law, the rate of mainte-

nance to be paid.” Jd. at 622 (emphasis added) (citation

omitted).

In reaching its result, the Hodges court relied upon Grove v.

Dixie Carriers, Inc., supra, 553 F. Supp. 777. The plaintiff in

Grove, like petitioners here, sought maintenance in excess of the

$8.00 rate in a collective bargaining agreement. The Grove court

denied the relief requested, stating:

[W]here the seaman, through the Union as his representa-

tive, expressly contracts with his employer for a specific rate

of maintenance, whether it be higher or lower than it would

otherwise be, the contract between the seaman and his

employer establishes, as a matter of law, the rate of mainte-

nance to be paid. /d. at 780.

Similarly, in Dixon v. Maritime Overseas Corp., 490 F. Supp.

1191 (S.D.N.Y.), affd, 646 F.2d 560 (2d Cir. 1980), cert.

denied, 454 U.S. 838 (1981), the jury was instructed that:

supra, 103 F.2d 437; Clinton v. United States, supra, 254 F.2d 409.

Individual seamen may even waive their right to future maintenance if

the release agreement is freely given in return for adequate considera-

tion. See Law v. United Fruit Co., supra, 264 F.2d 498; Zoldan v.

American Export Isbrandtsen Lines, Inc., supra, 1969 A.M.C. 471.

Seamen may also contractually forego the receipt of maintenance per se

in return for a maintenance substitute in a collective bargaining agree-

ment. Thomas v. Humble Oil & Refining Co., 420 F.2d 793 (4th Cir.

1970).

12

Despite inflation or other factors, the union contract estab-

lishes the rate for payment of maintenance and cure at $8.00

per day. That is binding on the plaintiff. /d. at 1193.

Accord Reardon v. California Tanker Co., supra, 260 F.2d at 374-

75, 376 (rate of maintenance set forth in a collective bargaining

agreement is binding on both seaman and shipowner).

In addition to the foregoing cases, numerous other decisions

have consistently recognized the validity of a collectively-

bargained rate of maintenance and have treated such a rate as

binding on the seaman. See, e.g., Gajewski v. United States, 540

F. Supp. 381 (S.D.N.Y. 1982); Williams v. Barge Foss, 528 F.

Supp. 226 (W.D. Wash. 1981); Tague v. American Pres. Lines,

Lid., 1975 A.M.C. 1129 (N.D. Cal. 1975); Meade v. Skip

Fisheries, Inc., 385 F. Supp. 725 (D. Mass. 1974); Ladzinski v.

Sterling S.S. & Trading Corp., 300 F. Supp. 947 (S.D.N.Y.

1969); Bailey v. Moore-McCormick Lines, Inc., 280 F. Supp. 310

(S.D.N.Y. 1967); Pedersen v. Diesel Tankers, 280 F. Supp. 421

(S.D.N.Y. 1967); Covert v. Centennial Queen, 185 F. Supp. 552

(D. Or. 1960); Vitco v. Joncich, 130 F. Supp. 945 (S.D. Cal.

1955), aff'd, 234 F.2d 1161 (9th Cir. 1956).

In sum, the Court of Appeals’ decision in Gardiner is merely

the latest in a long line of decisions which respect the contractual

choices regarding maintenance which have been freely made by

the seamen involved.

D. The Court Of Appeals’ Decision Creates No Conflict With

Decisions Of This Court Or The Fifth Circuit

Notwithstanding that the Court of Appeals’ decision is consis-

tent with long-settled federal labor and maritime law, petitioners

erroneously contend that the decision is in conflict with decisions

of this Court and the Fifth Circuit Court of Appeals.

Petitioners argue that the Court of Appeals’ decision will

permit unions to “bargain away” the right to maintenance and is

therefore violative of the rule stated in Cortes v. Baltimore Insular

Line, Inc., 287 U.S. 367, 371 (1932), that “no private agreement

er *

SE ene ere ea eee

13

may abrogate the right to maintenance.” A simple reading of the

decision belies petitioners’ view of Gardiner. The Court of Ap-

peals acknowledged the foregoing statement from Cortes (786

F.2d at 946) and was careful to point out that it would not enforce

“a mere token amount [which] is designated for maintenance

without a genuine quid pro quo arrived at through collective

bargaining.” Jd. at 950. Indeed, the Court of Appeals expressly

stated that an earlier Ninth Circuit decision, Vitco v. Joncich, 130

F. Supp. 945 (S.D. Cal. 1955), affd, 234 F.2d 1161 (9th Cir.

1956), retained vitality and would control to invalidate any such

token maintenance rate arrived at without quid pro quo.

The Court of Appeals thus accommodated the teaching of

Cortes with federal labor policy which “is built on the premise

that employees can bargain most effectively for improvements in

wages, hours, and working conditions by pooling their economic

strength and acting through freely chosen labor organizatiuns.”

Id. at 948, citing N.L.R.B. v. Allis-Chalmers Mfg. Co., 388 U.S.

175, 180 (1967). In short, the Court of Appeals correctly found

that the negotiated rate of maintenance “does not abrogate a

maritime right. Rather, it expressly recognizes the maritime nght

to maintenance and seeks to preserve it as part of the overall

negotiating process.” Jd. at 950.

Finally, there is no conflict with McWilliams v. Texaco, Inc.,

781 F.2d 514 (5th Cir. 1986), as petitioners’ claim. The court in

McWilliams neither addressed nor even considered the issues

presented in this case or the fundamental federal labor policies

which underlie the decision of the Court of Appeals. The issue

discussed by the Fifth Circuit was whether evidence of food and

lodging costs in the community could be introduced in a mainte-

nance action, irrespective of McWilliams’ actual expenditures for

maintenance. Indeed, to the extent that the McWilliams court

permitted evidence of such costs for maintenance in excess of

McWilliams’ actual expenditures, it contradicted this Court’s

9 It should be noted that neither Cortes nor the other decision cited by

petitioners, DeZon v. American President Lines, 318 U.S. 660 (1943),

involved a collectively-bargained rate of maintenance.

14

holding in Johnson v. United States, 333 U.S. 46 (1948) (no

recovery for maintenance where no expenditures).

CONCLUSION

For all the foregoing reasons, defendants respectfully request

that the Court deny the petition for writ of certiorari.

SAMUEL D. DELIcH* J. STEWART HARRISON

SANDRA R. MCCANDLESS BROBECK, PHLEGER &

MARTIN H. Dopp HARRISON

GRAHAM & JAMES Spear Street Tower

One Maritime Plaza, Suite 300 One Market Plaza

San Francisco, CA 94111 San Francisco, CA 94105

(415) 954-0200 (415) 442-0900

DANIEL J. DOUGHERTY HOwARD L. GANz*

KIRLIN, CAMPBELL & KEATING PROSKAUER, ROSE, GOETZ &

14 Wall Street MENDELSOHN

New York, NY 10005 300 Park Avenue

(212) 732-5520 New York, NY 10022

(212) 909-7000

Counsel for Respondents

*Counsel of Record

Monthly

Base Wages

[1981 Wages]

$5,262.45

(high)

$1,823.29

(low)

[ Indexed to

CPI]

for 8 hours

work

Monday-

Friday

A-]

APPENDIX A

SUMMARY OF SELECTED CONTRACT PROVISIONS

FOR MEBA

Living Health

Conditions Work Rules and Welfare Vacation

Free board and

lodging

Clean linens twice

a week

Engineer's lounge

with TV, VCR,

and movies

Separate state-

rooms wired for

TV

In addition to base wages:

Overtime rate of $15.78 to

$45.56/hour for work in

excess of 8 hours during

weekdays and on weekends

and holidays.

Premium rate of $8.01/hour

for “broken meal” hour,

confinement to vessel in

port, blowing boiler tubes,

welding outside machinery

areas, delayed sailing, doing

work usually done by unli-

censed seamen, etc.

Penalty rate of $8.01/hour for

working in confined or dirty

spaces or dirty work, plus

ten percent if after normal

work hours.

Non-watch allowance of

$1,473.55 to $510.54/ month.

Penalty and overtime pay often

paid simultaneously.

Major Medical

Dental

Hospitalization

$1,500 out-of-pocket

maximum per year

Deductible carry-over

from last quarter of

previous year can

be applied to fol-

lowing year

Optical benefit

$120.00 per year

Increased from 19

days per 30

working days in

1981 to 22 days

per 30 in 1984

Chief Engineers

get | vacation

day for each

day worked

Persion

20 years = $340

or 40% of pay

25 years = $425

or 50% of pay

30 years = $535

or 60% of pay,

whichever is

higher

Over 30 = 2% of

pay per year up

to age 65

Monthly

Base Wages

[1983 Wages]

$2,415.90

(high)

$1,081.06

(low)

[Indexed to

CPI]

for 8 hours

work

Monday-

Friday

A-2

SUMMARY OF SELECTED CONTRACT PROVISIONS

Living

Conditions

Free board and

lodging

TV, VCR, movies

Clean linens once

a week

Varied, posted

menus

Choice of entrees

— meats

cooked to order

Guaranteed meal

times or over-

time (“O.T.”)

is paid

FOR SIU

Work Rules

In addition to base wages:

Premium rates of $9.49 to

$20.39/hr for work per-

formed on Sat., Sun. and

holiday;

Overtime rates: $6.19 to

$10.20/hr for all work in

excess of 8 hrs — Monday

through Friday;

Penalty rates: $4.20 to

$17.82/hr for certain tasks

like cleaning bilges and cer-

tain weekend work; rate of

$8.23 to $15.42/hr for crew

doing longshoremen’s work

Mon. to Fri.; $12.35 to

$23.13/hr if on Sat., Sun. or

holiday;

Rate of $7.27 to $17.82 for

tank cleaning; penalty and

premium pay ior certain

tasks added to OT when

performed between 5:00 p.m.

& 8:00 a.m.

Health

and Welfare

Major Medical, hospi-

tal, surgical, pre-

scription drugs,

optical, medical

exam for Seaman

and dependents

Dental benefits

Death benefits for

beneficiary up to

$15,000

Accidental dismem-

berment benefits

Maternity benefit

Mental disorder bene-

fits

Alcohol rehabilitation

Upgrade and recertifi-

cation education

Vacation

[1981 benefit]

Four months’

base pay for

365 days of

covered

employment

(i.e., one vacation

day for each

three days

worked)

Pension

Regular Normal

Pension = $240

to $1,000

per/mo

Deferred Vested

Pension

Early Normal

Pension

Special Early

Normal Pen-

sion

Disability Pension

Survivor Spouse

Annuity Bene-

fits

Monthly

Base Wages

[1982 Wages]

$2,508.59

(high)

$1,026.66

(low)

[Indexed to

CPI]

for 8 hours

work

Monday-

Friday

A-3

SUMMARY OF SELECTED CONTRACT PROVISIONS

Living

Conditions

Free board and

lodging

Clean linens once

a week

TV, VCR, movies

Varied menu

Guaranteed meal

times or O.T. is

paid

FOR NMU

Work Rules

In addition to base wages:

Overtime rate of $9.56 to

$21.72 per hour for weekday

rate in excess of 8 hours and

weekend and holiday work;

Penalty rates of $5.11 to $3.87

for all work between 5 p.m.

and & a.m., and certain

tasks; making ice cream,

spray painting, etc.

$5.82 for “dirty work”;

14 times penalty rate for

cleaning tanks between 5

p.m. and 8 a.m. on overtime

and penalty rate if between 8

a.m. and 5 p.m.;

Longshore work at rate of New

York Longshore rate, no less

than $14.00 per hour, but no

less than $28/hour if han-

dling explosives;

On-watch rate of 1% times

penalty rate for removing

garbage, manure, cleaning

bilges, working ballast,

Continuous overtime if less

than 2 hours break between

O.T. and next scheduled

work period;

At least one paid day off when

in port.

Health

and Welfare

Hospitalization and

Major Medica!

(Family Coverage)

Life Insurance

Accidental Death and

Dismemberment

Dental Benefits

Optical Benefits

Alcoholism Program

Personal Services

Unit

Free Prescription

Drugs

Upgrading and Train-

ing Program includ-

ing meals, stipend

and travel expenses

Vacation

13-17 days per 30

worked;

Vacation pay

approx. $150-

$300 more than

base monthly

wage

Pension

Regular Pension

Service Pension

Disability Pension

Pro Rata Pension

Partial Pension

Vested Pension

Survivor Spouse

pension