1995 Decisions

Opinions of the United

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Precedential or Non-Precedential: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.

http://digitalcommons.law.villanova.edu/thirdcircuit_1995/321
1 

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 
2 

 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 LaborManagement 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 
3 

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. 
4 

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 

 

2Carson'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. 
5 

"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 
6 

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 
7 

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. § 504 

expressed no more of a congressional intent "to mitigate the harm 

of a wrongful conviction" than did the pre-1984 version. On the 
8 

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). 
9 

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 
10 

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). 
11 

serious drawbacks for convicted union officials: (1) nonexonerated 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 statecourt 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 
12 

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 
13 

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 exfelons 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 
14 

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 preemption 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 preempted 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 
15 

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 exfelons from waterfront union 

office, on all the circumstances, 

and as applied to this specific 

area, is a reasonable means for 
16 

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 
17 

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.