WCNYH

U.S. District Court Issues Declaration in Favor of the Commission and Dismisses Complaint Filed by Continental Terminals, Inc.

September 30, 2013

           On September 30, 2013, the United States District Court for the Southern District of New York dismissed the complaint filed by Continental Terminals, Inc. against the Commission in its entirety, and issued a finding in the Commission’s favor that Continental’s warehousing activities in Jersey City, New Jersey cause it to fall within the Waterfront Commission Act’s definition of a “stevedore” and thus, subject to being licensed by the Commission. In its complaint challenging the Commission’s licensing jurisdiction, Continental contended that: (1) its warehouses did not fall within 1,000 yards of a pier as is required by the Act, and (2) it was not engaging in the type of activities that would require it to be licensed as a stevedore under the Act. In response, the Commission filed a counterclaim against Continental, seeking a judicial declaration that the Continental was, in fact, performing stevedoring activities and that its facilities fell within 1,000 yards of a pier.

           With respect to Continental’s first challenge, the primary dispute was over the definition of “pier.” The Commission rightly contended that a pier includes the area where waterborne containerized freight is loaded, unloaded and stored, and that the 1,000 yard measurement should therefore be taken from the property line of the Global Marine Terminal. Continental argued that a pier must be directly adjacent to water, and is limited to the area where waterborne freight is loaded and unloaded from vessels only. Continental maintained that its facilities must be measured from the farthest tip of the Global Marine Terminal’s stringpiece and, when using this method of measurement, it was located more than 1,000 yards away from a pier.

           The Honorable Judge Laura Taylor Swain, U.S.D.J., rejected Continental’s “unduly narrow” definition of a pier, and found instead that a pier includes areas within a marine terminal, such as the container yard, that are used for the placement and handling of containerized freight after the containers are lifted by cranes from vessels into the terminal. In its Memorandum Order, the Court noted that, “[m]odern shipping practices have changed the way waterborne shipments are handled. Cargo is now packed into large freight containers. Containerized freight is carried on large vessels, and large cranes, not necessarily stationed on stringpieces, are used to move containerized freight to container yards. There, companies receive freight and transport the containers using trucks.” The Court found that, “under these circumstances, it would frustrate the purpose of the Act to interpret the term ‘pier’ so narrowly that it would exclude waterfront areas such as container yards, where containerized freight is actually handled.”

           The Court further rejected Continental’s argument that its warehousing operations fall outside of the scope of stevedoring activities contemplated by both the Act and the Commission’s subsequent Rulings. By its own admission, Continental not only strips waterborne freight from containers at its warehouses, but it also palletizes, weighs, scales, straps and samples a portion of that freight. The Court found that these activities are more than mere generation of receipts for regular warehousing, as was claimed by Continental, and are instead stevedoring activities that require Continental to be licensed and its employees registered.

           Accordingly, the Court issued a declaration that Continental’s warehouse operations fall within the Commission’s licensing jurisdiction, and dismissed Continental’s complaint against the Commission in its entirety.

            A complete copy of the Court's Memorandum Order is attached.

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Court Decision and Order: