CC Lumber Co. v. Waterfront Commission, 31 N.Y.2d 350 (1972)
The Waterfront Commission has broad discretion in licensing stevedores and related entities, and its determinations will be upheld if supported by substantial evidence and not arbitrary or capricious, especially when considering applicants’ character and integrity.
Summary
CC Lumber Co. applied for a stevedore’s license, which was denied by the Waterfront Commission based on findings of overbilling, financial transactions with a union officer (Anthony Scotto), and fraud during a commission interview by Leo Lacqua. The New York Court of Appeals reversed the Appellate Division’s annulment of the commission’s decision, holding that substantial evidence supported the commission’s determination that the Lacquas lacked the requisite good character and integrity for a stevedore license. The court emphasized the commission’s broad discretion in licensing to combat waterfront corruption.
Facts
CC Lumber Co. acquired Court Carpentry, Inc. Joseph Lacqua, previously the sole stockholder of CC Lumber, became president of both companies. Leo Lacqua, former sole stockholder of Court Carpentry, became secretary-treasurer. The Waterfront Commission denied CC Lumber’s application for a stevedore’s license based on the Lacquas’ conduct. The commission cited overbilling by Court Carpentry, improper financial dealings with union officer Anthony Scotto, and fraudulent statements by Leo Lacqua during a commission interview.
Procedural History
The Waterfront Commission denied CC Lumber’s stevedore license application. The Appellate Division annulled the commission’s determination. The Court of Appeals reversed the Appellate Division’s order, reinstating the Waterfront Commission’s denial of the license.
Issue(s)
Whether the Waterfront Commission’s denial of a stevedore license to CC Lumber Co., based on findings of overbilling, improper financial transactions with a union officer, and fraud during a commission interview, was supported by substantial evidence.
Holding
Yes, because substantial evidence supported the Waterfront Commission’s determination that the Lacquas lacked the requisite good character and integrity for a stevedore license, and the commission’s findings were not arbitrary or capricious.
Court’s Reasoning
The Court of Appeals found substantial evidence supporting each of the commission’s grounds for denying the license. Regarding the overbilling, the court noted the undisputed discrepancy between hours billed and hours paid, concluding that the commission could reasonably infer intentional overbilling, with the Lacquas having knowledge. The court noted the employees of CC Lumber working for Court Carpentry was insufficient to account for the discrepancy in overtime hours. As for the financial transactions with Anthony Scotto, the court found sufficient evidence that Scotto violated his fiduciary duty as a union officer by participating in the loan transactions for the Englewood Golf and Pool Club, and that the Lacquas knowingly participated in these illegal acts. The court cited the policy against labor leaders benefiting from employers they deal with, stating that, “[t]he law demands a clear line of financial demarcation between labor leaders and employers with whom they deal on behalf of their members.” Regarding Leo Lacqua’s fraud during the commission interview, the court found ample evidence that Leo Lacqua was aware of Scotto’s activities on behalf of Newbrook Enterprises, contradicting his disavowal of knowledge. The court emphasized the broad discretion given to the Waterfront Commission to combat waterfront corruption, stating: “[i]f it is to accomplish these goals, it requires a full measure of discretion in licensing stevedores and others. Its determinations should, therefore, be upheld unless they are unsupported by substantial evidence or are otherwise arbitrary or capricious.”