New York Law Review

Tag: Waterfront Commission Act

  • Matter of Costello v. Waterfront Commission, 72 N.Y.2d 1019 (1988): Applicability of Correction Law to Interstate Compact Agencies

    Matter of Costello v. Waterfront Commission of New York Harbor, 72 N.Y.2d 1019 (1988)

    Article 23-A of the New York Correction Law, concerning employment opportunities for former inmates, does not apply to the Waterfront Commission, an agency established by an interstate compact between New York and New Jersey.

    Summary

    Costello, convicted of multiple felonies, sought restoration to the longshoremen’s register as a checker, arguing the Waterfront Commission improperly denied his application by ignoring Article 23-A of the Correction Law. The Commission cited the seriousness of Costello’s crimes and his lack of good character. The Appellate Division reversed the Supreme Court’s annulment of the Commission’s determination, finding a rational basis for the denial. The Court of Appeals affirmed, agreeing with the Appellate Division’s rationale and adding that Article 23-A does not apply to the Waterfront Commission because the legislature did not properly amend the interstate compact that created the commission.

    Facts

    Costello had four felony convictions stemming from two schemes to defraud Las Vegas casinos.
    He applied for restoration to the longshoremen’s register as a checker with the Waterfront Commission of New York Harbor.
    The Waterfront Commission denied his application, citing the severity of his crimes and a lack of good character and integrity required for the checker position.

    Procedural History

    Costello initiated an Article 78 proceeding to challenge the Waterfront Commission’s decision.
    Supreme Court initially granted Costello’s petition, annulling the Commission’s determination.
    The Appellate Division reversed the Supreme Court’s decision and dismissed the petition, finding a rational basis for the Commission’s denial.
    Costello appealed to the New York Court of Appeals.

    Issue(s)

    Whether the Waterfront Commission erred in denying Costello’s application for restoration to the longshoremen’s register.
    Whether the provisions of Article 23-A of the Correction Law apply to the New York/New Jersey Waterfront Commission.

    Holding

    No, the Waterfront Commission did not err in denying Costello’s application because a rational basis existed for the decision due to the seriousness of Costello’s prior felony convictions and his lack of good character.
    No, Article 23-A of the Correction Law does not apply to the Waterfront Commission because the New York Legislature did not properly amend the interstate compact that created the Commission to include the requirements of Article 23-A.

    Court’s Reasoning

    The Court of Appeals agreed with the Appellate Division that the Waterfront Commission had a rational basis to deny Costello’s application, referencing the Waterfront Commission Act and the precedent set in Matter of Sudano v Waterfront Commn., 87 AD2d 633.
    The court emphasized that the Waterfront Commission was established by an Interstate Compact approved by Congress, making it subject to specific requirements for amendments and supplements as outlined in McKinney’s Unconsolidated Laws of NY § 9870.
    According to the compact, amendments require legislative action by both New York and New Jersey.
    The Court found no indication that the New York Legislature intended Article 23-A to apply to the Waterfront Commission. The court emphasized the absence of any reference to the Waterfront Commission in the text and legislative history of Article 23-A.
    The court reasoned, “In the present case, the absence from the text and legislative history of article 23-A of any reference to the Waterfront Commission, coupled with the absence of an express statement that the Legislature was amending or supplementing the provisions of the ‘Compact’ and that article 23-A would take effect upon the enactment by New Jersey of legislation of identical effect, if it had not already done so, indicates that the New York Legislature never intended article 23-A to apply to the Waterfront Commission.”
    The Court rejected the argument that similar public policies in New York and New Jersey regarding employment opportunities for former inmates were sufficient to amend the compact.
    Therefore, the Waterfront Commission did not err by not applying Article 23-A when denying Costello’s application.

  • CC Lumber Co. v. Waterfront Commission, 31 N.Y.2d 350 (1972): Upholding Commission Discretion in Licensing Based on Lack of Good Character

    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.”