Stanley Kowalik, Plaintiff-appellant, v. General Marine Transport Corp. et al., Defendants-appellees, 550 F.2d 770 (2d Cir. 1977)

Plaintiff, Stanley Kowalik, appeals from a judgment, granted in favor of defendants upon their motion for summary judgment (1) dismissing the complaint in an action for overtime wages and (2) releasing the bond posted by defendant General Marine Transport Corp. ("GMT") to discharge an attachment of the vessel SAM BERMAN obtained by plaintiff in said action.

In view of the dismissal of the complaint and to avoid a discussion of irrelevant generalities, it is incumbent upon us to examine plaintiff's specific allegations. Plaintiff alleges that on or about April 1, 1970, Marine Towing and Transportation Employers Association ("Employer"), on behalf of the defendant GMT, and others, and Local 333, United Marine Division, National Maritime Union (the "Union") "entered into a contract (the "Agreement") of which the plaintiff was a third party beneficiary, providing for the payment of stated wages and overtime for work on vessels of the 'Employer' including the defendant"; that the contract (with one renewal) continued in effect until March 31, 1976; that the contracts provided for overtime from February 1, 1970 to April 1, 1975 at rates varying from $2.68 to $3.72; that plaintiff worked overtime "as defined in the contract" but only received straight time pay; that he worked on eight different vessels during this period; and that there is due and owing to him a total of $22,352.12.¹ 

It is clear from the face of the complaint that plaintiff's claim derives from the Agreement between the Employer and the Union. The Agreement does not come to light except as attached to an affidavit of GMT's president and as referred to in the parties' statements of fact. Thus, plaintiff states (Pltf's Br., p. 2) that his "employment was covered by a collective agreement (Exhibit A) fixing the rates of pay to be paid for regular and overtime work . . . ." Plaintiff concedes that the "agreements fixing the rates of pay" provide for "adjustment of grievances and arbitration of such disputes not settled by agreement . . . ." (Pltf's Br., p. 3). Adjustment and Grievance Committees were specified and in the event of the failure to settle the controversy, arbitration procedures were provided.

Plaintiff, making no effort to comply with the terms of the Agreement, upon which he bases his overtime claim, sought to by-pass it entirely by seeking, as he calls it, "the seaman's traditional remedy in the District Court", namely, a suit in personam against GMT and a suit in rem against the SAM BERMAN.

On the motion for summary judgment the District Court found that "(t)here are no material issues of fact."²  411 F. Supp. 1325, 1326 (S.D.N.Y. 1976) but it had to cope with several legal problems, such as, where the complaint discloses the agreement allegedly giving rise to the wage claim, does failure to allege submission of such claim to the grievance and arbitration procedures constitute a failure to state a claim and, must plaintiff allege a failure by his union adequately to represent him to give him standing in the courts? Furthermore, the effect of the Supreme Court's decision in U.S. Bulk Carriers, Inc. v. Arguelles, 400 U.S. 351, 91 S. Ct. 409, 27 L. Ed. 2d 456 (1971) had to be considered.

The District Court recognized that the question of whether the "method of collecting seamen's wages contained in 46 U.S.C. § 596³  has been displaced by § 301 of the Labor Management Relations Act . . ." had been answered in the negative by Arguelles, supra, at 352 and 357, 91 S. Ct. 409, but believed that Arguelles was not applicable here, because of the exclusion by 46 U.S.C. § 544⁴  from the provisions of § 596 of vessels in coastwise trade as was the SAM BERMAN.

Quite apart from the exclusionary provisions of § 544, it is quite obvious that § 596 does not apply to plaintiff's claim. Plaintiff does not allege termination of the agreement under which he was shipped. To the contrary, the Employer-Union Agreement, i. e., the only basis for his claim, persisted and controlled his rights, if any, during the entire period. Until his overtime claim (and there is no allegation that any such claim was made at the end of any voyage) was made known or asserted, no master or owner could have paid or have failed to pay "within two days" any wages due. Obviously it required proceedings pursuant to the Agreement to establish the "due", if any.

Furthermore, plaintiff does not allege that he was not paid wages at the end of every voyage. The overtime claim concept apparently came into being in June 1975 as the result of an Employer-Union controversy.

Plaintiff, however, does not stake his claim upon § 596. He asserts (Pltf's Br., p. 12) that: "(t)he libel nowhere asserts any rights pursuant to 596." Rather, he bases his claim on "the seaman's traditional right to sue for his wages in the Federal court" as a right deriving from Article III of the Constitution (giving jurisdiction to cases of admiralty). In short, he relies upon a traditional right of seamen since 1790 to have access to the federal courts. But this status does not obtain in this case. The very concept of "wages" depends upon some agreement, expressed or implied, with respect thereto. Plaintiff here specifically delegated the Union to act on his behalf. Having done so, he should adhere to the method selected by him to determine "wages". Until that step is taken, it would seem premature to debate enforcement procedures.

The District Court considered plaintiff's contention that in any event the action should be stayed pending arbitration rather than being dismissed. The Court was troubled by the fact that "only speculation could forecast that a claim may some day come to exist" and, since that day had not come and would not come until contract procedures determined the merits, if any, of plaintiff's wage claim, decided that "(t)he fitting remedy now . . . is dismissal." 411 F. Supp. at 1328.

Quite apart from statutes and decisions in other cases, it is important that the parties respectively receive the full benefits of their rights under the Agreement and any other rights to which they are justly entitled. Plaintiff is a member of the Union. The Union and the Employer have an Agreement respecting wages. Plaintiff asserts that he is "a third party beneficiary" of that Agreement and claims no independent relationship with the Employer. There would appear to be no just reason why plaintiff should obtain such wage benefits as the Agreement may provide but simultaneously repudiate the means specified in the Agreement for the determination thereof. Nor by the District Court's dismissal is plaintiff left without further recourse. If he follows the Agreement's directions, his overtime claim can be decided on the merits; if his Union fails in its duty, such conduct may well be actionable. But the preservation of a lien on the SAM BERMAN can only be justified by a foundation therefor. As the District Court said: "If this could be a case for a lien, it would arise only if and when plaintiff can establish, in a permissible forum, that wages are owed to him." 411 F. Supp. at 1328. At this time, at least, this is not that forum.

Judgment affirmed. No costs.

MANSFIELD, Circuit Judge (dissenting in part):

In U.S. Bulk Carriers, Inc. v. Arguelles, 400 U.S. 351, 91 S. Ct. 409, 27 L. Ed. 2d 456 (1971), the Supreme Court held that § 301 of the Labor Management Relations Act, 29 U.S.C. § 185, which provides for enforcement of grievance and arbitration provisions of collective-bargaining agreements, did not displace the earlier alternative method available to a seaman under 46 U.S.C. § 596, which permits him to sue directly for wages due, invoking federal jurisdiction under 28 U.S.C. § 1333. Thus the seaman was held to have been given an additional remedy which does not preclude his invoking the federal courts as traditional protectors of seamen's rights since 1790.

The majority agrees with Judge Frankel that Arguelles may be side-stepped in this case on the ground that 46 U.S.C. § 544 expressly precludes a coast-wise seaman, such as the plaintiff here, from availing himself of the rights granted by § 596 to trans-oceanic seamen to sue for penalty wages. Although this conclusion is in my mind far from certain, in view of the checkered legislative history of §§ 544 and 596, see Gardner v. The Danzler, 281 F.2d 719 (4th Cir. 1960), and a respectable argument may be made to the effect that coast-wise seamen have the right to invoke federal jurisdiction over a claim for wages, see Mahar v. Gartland S.S. Co., 154 F.2d 621 (2d Cir. 1946), I do not believe it necessary to resolve that issue in this case. Whether or not a coast-wise seaman is relegated by § 301 to exhaustion of grievance and arbitration procedures for adjudication of his wage claims in line with the policy favoring arbitration, see Textile Workers v. Lincoln Mills, 353 U.S. 448, 77 S. Ct. 912, 1 L. Ed. 2d 972 (1957); Republic Steel Co. v. Maddox, 379 U.S. 650 (1965), 85 S. Ct. 614, 13 L. Ed. 2d 580, he still has a time-honored right to obtain a maritime lien to secure his wage claims, which dates back to the Act of July 20, 1790, ch. 29, § 6, 1 Stat. 133, currently expressed in 46 U.S.C. §§ 603-604.¹  Nothing in the union's collective bargaining agreement with Kowalik's employer waives or modifies this right.

A seaman claiming wages is entitled, unless the ship's master shows that the wages claimed have been "paid or otherwise satisfied or forfeited," to obtain a court order directing issuance of process against the vessel, see 46 U.S.C. § 604. Otherwise the only security available for payment might sail out of the harbor beyond reach of the court's process before his claim had been reduced to an award or judgment, or the seaman might risk losing his lien by reason of subordination to other intervening creditors or the employer's bankruptcy. Rather than force the seaman to underwrite these risks, I would permit him to maintain the present action as one for enforcement of his lien to secure his wage claim and exercise the court's inherent power to stay the action pending the arbitration award. Indeed, implicit in the majority opinion is the concept that, once he had reduced his claim to an award through arbitration, he might invoke federal jurisdiction to enforce the award and his lien rights. I believe he has the right to perfect the lien before obtaining such an arbitration award, just as an Arguelles seaman would have the right to do so before reducing his wage claim to judgment.