Court Opinion

ID: 9481939
Source: CourtListenerOpinion
Date Created: 2023-08-05 08:35:54.629311+00
Date Added: 2024-06-11T17:48:40.111427
License: Public Domain

DAVID A. NELSON, Circuit Judge,
dissenting.
I would affirm the judgment, but for reasons that differ from the district court’s.
The issue before us, as I see it, is not whether the Marine Officer Policy precludes the payment of separation allowances. The issue, rather, is whether, on the facts of this case, the language of the Policy must be said to mandate the payment of such allowances.
Nothing in the Marine Officers Policy can be read as mandating the payment of separation allowances except where a ma-' rine officer’s employment has been terminated as a result of his vessel’s having been “permanently removed from service” within the meaning of those words as used in the first sentence of Article VII B of the Policy. The threshold question, then, is whether the plaintiffs’ vessels — the sale of which did not put the plaintiffs out of work — can fairly be said to have remained in service notwithstanding the sale. Marine officers who found themselves out of work for some reason other than removal of their vessel from service might qualify for separation allowances under policies applicable to Ford Motor and Rouge Steel employees generally, we are given to understand, but marine officers who continued working on the same vessel could not receive such benefits under the Marine Officer Policy or any other plan, as far as we know, unless the vessel was “permanently removed from service.”
Rouge Steel sold its three-vessel marine fleet to Lakes Shipping Company under a purchase agreement dated March 23, 1989. Notwithstanding the sale, a transportation agreement of even date recited that Rouge still wished to have iron ore, limestone and *462coal transported to its facilities at Dear-born, Michigan. Lakes Shipping Company and its parent corporation, the other parties to the transportation agreement, recited their willingness “to transport the raw material requirements of [Rouge] via water transportation on the Great Lakes to the same extent as currently so transported by [Rouge],” and Lakes Shipping was employed to transport 100 percent of Rouge’s iron ore, limestone and coal requirements during each navigation season in a term commencing in 1989 and continuing to December 31, 1999. Under § 6(d) of the purchase agreement, Lakes Shipping agreed to “offer employment to such of the active licensed officers employed by [Rouge] and assigned to the Vessels who are necessary to operate [two of the boats being sold,] the S.S. Benson Ford and the S.S. William Clay Ford.”1
One of the three vessels, the M.S. Henry Ford II, was apparently taken out of service at or before the point of sale because it was unseaworthy. Any officer who lost his job because of the Henry Ford’s removal from service was entitled to separation pay under the Marine Officer Policy. The other two vessels continued in service, staffed by the same people and carrying the same cargo to the same destination for the same company. The question, to repeat, is whether the fact that these vessels now had a new owner meant that they had been “removed from service” within the meaning of those words as used in the Marine Officer Policy.
In rejecting Rouge Steel’s argument that the vessels had not been removed from service, the district court reasoned thus:
“At least three officers who were terminated when the sale to Lakes Shipping occurred were given separation allowances, even though their vessels continued to sail under Lakes Shipping. Thus, Rouge Steel has clearly acknowledged that the sale of the vessels constituted removal of those vessels from service.”
If these officers received separation allowances under the Marine Officer Policy, I would agree that payment of the allowances could be taken as evidence that Rouge Steel considered the Benson Ford and William Clay Ford to have been removed from service. But there has been no showing, to my knowledge, that Rouge viewed the separation allowances as payments made under the Marine Officer Policy-
The record makes it abundantly clear that the Marine Officer Policy was not designed to cover the waterfront, so to speak; the Policy spelled out some of the benefits available to marine officers, but not all of them.2 If a marine officer returned from military service at a time when no suitable position was available, for example, he would receive separation pay— not because of the retirement of a vessel from service, but because it was the practice to accord separation pay to all salaried employees of Ford and Rouge Steel under these circumstances. Similarly, as I understand it, marine officers could receive separation pay if they were simply laid off and *463not offered another position paying at least 80 percent as much, or if they retired at age 65 without having qualified for noncontributory retirement pay under the general retirement plan. These separation benefits were available to salaried employees on a company-wide basis, and were not contingent, in the case of marine officers, on a vessel’s having been permanently removed from service. The mere fact that separation allowances were paid to three officers who were put out of work when the fleet was sold, therefore, does not indicate that Rouge was acknowledging a removal from service of any vessel other than the Henry Ford II. And the plaintiffs in this case, as I understand it, are not claiming a right to severance benefits under any company-wide plan or policy; if they have a right to severance benefits, it is under Article YII B of the Marine Officer Policy.
Several of the plaintiffs admitted in deposition testimony that they themselves did not believe that their vessels had been taken out of service when title to the vessels passed from Ford to Rouge Steel several years earlier. It is true that Rouge was a Ford subsidiary, while Lakes Shipping was a subsidiary of a different company. Given that Lakes Shipping was going to operate two of the vessels with the same people who had served on them before the transfer of title, however, and given that the vessels were to be operated in the same trade, carrying the same type of cargo for the same consignee, I do not think it would be arbitrary or capricious to conclude that the vessels had not been taken out of service. Such a conclusion gives a commonsense, non-technical meaning to the language of the Policy. This interpretation is by no means inevitable, but it strikes me as perfectly reasonable — and if it is reasonable, it is permissible.
The fact that the Marine Officer Policy says that “[a] vessel may be removed from service by sale” does not, to my mind, suggest that a vessel must automatically be deemed to have been removed from service whenever a sale occurs. A vessel is removed from service if it is sold for scrap, or sold for conversion into a floating restaurant, or sold for operation in a different trade with different crews, but it does not follow that a vessel is removed from service by sale when the sale is made on terms that contemplate no removal from service.3
If it had been intended that a separation allowance be payable upon the removal of a vessel from service as a company-owned, boat, it would have been simple enough to say so. In a different context, indeed, the Marine Officer Policy uses the phrase “Company service.” If some such phraseology had been used in the first line of Article VII B, the plaintiffs would have had a far stronger case than the one actually presented.
I agree, finally, that the potential conflict between the interests of Rouge Steel and the interests of the plaintiffs is a factor that must be weighed in determining whether Rouge Steel abused the broad discretion it had in making decisions as to the interpretation and application of the Marine Officer Policy. But such a conflict “is only one factor to be considered....” Varhola v. Cyclops Corp., 914 F.2d 259 (6th Cir.1990). This factor cannot change the plain language of the Marine Officer Policy— and that language simply does not provide for payment of a separation allowance unless a vessel is “permanently removed from service.” Under the particular facts presented here, I do not believe that Rouge *464Steel was required to find that the two vessels which continued to carry the company’s iron ore, limestone and coal, using the same personnel, were vessels that had been “removed from service.”
There is no dispute as to the material facts in this case, and the case was thus ripe for disposition on the parties' cross-motions for summary judgment. If it is arbitrary and capricious to say that the S.S. Benson Ford and the S.S. William Clay Ford were not “removed from service,” we should, in my view, direct the district court to grant the plaintiffs’ motion for summary judgment against Rouge Steel. If it is not arbitrary and capricious to say so, I think we should affirm the summary judgment in favor of Rouge Steel. The argument in favor of the former course has been very ably presented by the plaintiffs’ counsel, but the argument in favor of the latter course strikes me as stronger.

. Lakes Shipping also agreed that if any of the Rouge Steel marine officers hired under § 6(d) should be laid off during the year following the sale, each such officer would receive a separation allowance. Under the plaintiffs’ interpretation, therefore, it would be possible for officers to receive double separation allowances; one by reason of the sale of the vessels, and the other by reason of a subsequent lay off.

. The affidavit of Marlene Bankwitz, the Marine Representative at Ford Motor Companys’ Rouge Steel subsidiary, states that in resolving pay and benefit questions for marine officers it was often necessary for Rouge Steel to refer to Ford’s Industrial Relations Administration Manual and other Ford documents. This was so, Ms. Ban-kwitz’s affidavit explains, because the Marine Officer Policy "was only a summary of the unique terms and conditions of employment, pay and benefits for the marine officers.” (Emphasis supplied.) The record shows without contradiction that Ford’s administration manual applied to all Rouge Steel employees. See ¶ 2 of the affidavit of Howard Johnson, of Ford’s Employee Relations Staff. And the uncontradicted affidavit of Richard Wood, also of Ford’s Employee Relations Staff, states that ”[e]xcept for unique situations that arose as a result of the special aspects of marine officer employment, the practice at Ford and Rouge Steel was to treat the marine officers the same as other salaried employees of Ford and Rouge Steel in similar situations.”

. Although Article VII B says that a vessel "may" be removed from service by sale, I do not, of course, read this as meaning that Rouge Steel has discretion to characterize a sale that results in removal from service as a sale that does not result in removal from service. Whether to make a sale at all, and whether to make a sale on terms that in fact keep the vessel in service, are matters that lie in the sole discretion of the company; but once a sale has been made, the company cannot act arbitrarily and capriciously in characterizing the terms of the sale for purposes of applying the Marine Officers Policy.
If the terms of a particular sale leave room to say that there is no removal from service, what gives the company discretion to say so is not the word “may” in Article VII B, but the second sentence of the Policy’s first paragraph: “Final decisions shall be made by the Company as to the interpretation and application of this [P]oli-cy.”