Agesen v. Catherwood — 26 N.Y.2d 521

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p. 521

In the Matter of Bruce Agesen et al., Appellants, v. M. P. Catherwood, as Industrial Commissioner of the State of New York, Respondent, and Port of New York Authority, Intervenor-Respondent. (And Two Other Titles.)

Argued April 13, 1970;

decided May 27, 1970.

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W. Bernard Richland, Michael A. Buonora, Abrashkin & Krieger and Harold Stern for appellants.

I. Section 220 of the Labor Law requires the payment of prevailing rates of wages upon all public works of every State instrumentality and every public, municipal or public benefit corporation. Since the Port Authority is a State instrumentality, a municipal and public benefit corporation, its public works performed in New York come directly within the express terms and the purview of the statute. (Matter of Gaston v. Taylor, 274 N. Y. 359 ; Wright v. State of New York, 223 N. Y. 44 ; Schwartz v. Board of Educ. of City of N. Y., 209 App. Div. 738 , 239 N. Y. 566 ; McAvoy v. City of New York, 52 App. Div. 485 , 166 N. Y. 588 ; Wood v. City of New York, 274 N. Y. 155 ; Austin v. City of New York, 258 N. Y. 113 ; Smith v. Joseph, 275 App. Div. 201 , 300 N. Y. 516 ; Nolan v. New York City Housing Auth., 199 Misc. 599 ; Campbell v. City of New York, 244 N. Y. 317 ; Trippe v. Port of N. Y. Auth., 14 N Y 2d 119 .) II. Neither the 1921 Compact nor any other law exempted the Port Authority from the pre-existing Prevailing Rate of Wage Law. (Jewish Consumptives’ Relief Soc. v. Town of Woodbury, 230 App. Div. 228 , 256 N. Y. 619 ; Lawrence Constr. Corp. v. State of New York, 293 N. Y. 634 ; Whittaker v. Franklinville, 265 N. Y. 11 ; Civil Serv. Forum v. New York City Tr. Auth., 4 A D 2d 117 , 4 N Y 2d 866 ; People ex rel. Kieley v. Lent, 166 App. Div. 550 , 215 N. Y. 626 ; People ex rel. Elkind v. Rosenblum, 184 Misc. 916 ; Matter of Consolidated Edison v. Village of Briarcliff Manor, 208 Misc. 295 ; Trippe v. Port of N. Y. Auth., 14 N Y 2d 119 ; Estrada v. Parking Assoc. Corp., 37 Misc 2d 1033 ; People v. Cowles, 13 N. Y. 350 .)

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Joseph Lesser, Sidney Goldstein, Isobel E. Muirhead, Arthur P. Berg and John J. Graubard for intervenor-respondent.

I. The Port Authority’s very nature as a joint agency of New York and New Jersey, created by an interstate compact between them, precludes either State acting alone from directing its administrative affairs as if it were a governmental instrumentality created solely by the laws of one State. (hinderlider v. La Plata Co., 304 U. S. 92 ; Petty v. Tennessee-Missouri Bridge Comm. 359 U. S. 275 ; Williams v. Williams, 23 N Y 2d 592 .) II. The unilaterally enacted provisions of section 220 of the New York Labor Law cannot constitutionally be applied to difect employees of the bi-State Port Authority. (Matter of Nicolay v. Port of N. Y. Auth., 32 A D 2d 619 ; Dyer v. Sims, 341 U. S. 22 ; Green v. Biddle, 8 Wheat. [21 U. S.] 1; Ryan v. City of New York, 177 N. Y. 271 ; People ex rel. Sweeney v. Sturgis, 175 N. Y. 470 ; Wood v. City of New York, 274 N. Y. 155 ; Matter of Gaston v. Taylor, 274 N. Y. 359 ; Matter of Corrigan v. Joseph, 304 N. Y. 172 ; Matter of Yerry v. Goodsell, 4 A D 2d 395 ; Trustees of Dartmouth Coll. v. Woodward, 4 Wheat. [17 U. S.] 518.) III. The Legislature never intended the unilaterally enacted provisions of section 220 of the New York Labor Law to apply to direct employees of the bi-State Port Authority. (Matter of Plumbing Assn. v. Thruway Auth., 5 N Y 2d 420 ; Bush Term. Co. v. City of New York, 282 N. Y. 306 .)

Louis J. Lefkowitz, Attorney-General (Irving L. Rollins and Samuel A. Hirshowitz of counsel), for respondent.

Since it appears that The Port of New York Authority, a joint or common governmental agency of the States of New York and New Jersey were performing functions beyond State lines, it was not bound by the unilateral provisions of section 220 of the Labor Law of the State of New York because such statute was not concurrently or otherwise adopted by the Legislature of the State of New Jersey. Accordingly, the Industrial Commissioner properly dismissed for lack of jurisdiction appellants’ complaints to effectuate for appellants and others similarly situated under that statute the prevailing rate of wages. Lacking the power to render a decision on the merits, the Industrial Commissioner was relieved from further investigation of such complaints or hearing thereon since such effort could have served no useful purpose. (Red Hook Cold Stor. Co. v. Depart

p. 524

ment of Labor of State of N. Y., 295 N. Y. 1 ; Matter of Colgate-Palmolive-Peet Co. v. Joseph, 308 N. Y. 333 ; Matter of Marsh [Catherwood], 13 N Y 2d 235 .)

Petitioners, direct employees,of the Port of New York Authority engaged in the building and mechanical trades, appeal in consolidated proceedings under CPLE article 78, in which they urge the applicability to their employment of New York’s prevailing rate of wage legislation (Labor Law, § 220).

The Industrial Commissioner, by order and determination dated August 4, 1967, dismissed petitioners’ claims that they were receiving less than the prevailing rate of wage, on the ground that the Commissioner lacked jurisdiction. Special Term of Supreme Court annulled the Commissioner’s determination (55 Mise 2d 744). The Appellate Division, however, unanimously reversed, confirmed the Commissioner’s determination, and dismissed the petitions ( 32 A D 2d 416 ).

The problem is presented because of the special character of the Port of New York Authority, a public authority created by compact between two States and approved by Congress as required by the United States Constitution (L. 1921, ch. 154, § 1; N. J. S. A., § 32: 1-1 et seq.; 42 U. S. Stat. 174; U. S. Const., art. I, § 10, subd. 3).

The facts and legal issues were succinctly presented at the Appellate Division in the opinion by the late Mr. Presiding Justice Beldook. Two variations must be noted, however, from that opinion.

First, article XIV of the applicable compact between the States of New York and New Jersey reads: “The port authority shall elect from its number a chairman, vice-chairman, and may appoint such officers and employees as it may require for the performance of its duties, and shall fix and determine their qualifications and duties ” (L. 1921, ch. 154, § 1). This language does not expressly empower the' Authority to fix salaries. The fixing of salaries, however, although not a power expressly granted to the Authority, is undoubtedly one of its implied powers. Certainly, as to employees not covered by prevailing wage statutes, there would otherwise be no power anywhere to fix their salaries, a consequence hardly conceivable and not tolerable.

Secondly, a disparate wage scale dependent upon the geographic location of work sites, although occasionally burden

p. 525

some/ is not necessarily “ unworkable.” Presumably, similar problems were involved, and surmounted, in the Authority’s Workmen’s Compensation coverage, since both New York and New Jersey each have independent statutes and agencies (see N. J. S. A. §§ 34:1A-11 to 34:1A-13, 34:15-1 et seq.; Workmen’s Compensation Law, esp. § 140 et seq.).

Consequently, the inapplicability of section 220 of the Labor Law results not from any express exclusion or inherent unworkability, but rather from a general intent, amply reflected in the compact, that the internal operations of the Authority be independent of the direct control of either State acting without the concurrence of the other. Section 220, enacted long before the creation of the Authority, should not be construed to impose a unilateral regulation of the wages of only a fraction of the Authority’s employees, namely, those building and mechanical workers who, it is alleged, work solely on projects within the State of New York.

The distinction between the internal operations and conduct affecting external relations of the Authority is crucial in charting the areas permitting unilateral and requiring bilateral State action. New York and New Jersey have each undoubted power to regulate the external conduct of the Authority, and it may hardly be gainsaid that the Authority, albeit bistate, is subject to New York’s laws involving health and safety, insofar as its activities may externally affect the public (see 1949 Opns. Atty.Gren. 118-121).

Indeed, given sufficient social or economic justification, the lines of external and internal operation may shift, justifying increased regulation as the impact outside the Authority becomes more pronounced. Finally, even as to internal matters, the two States, by bilateral action, may always regulate Authority action, when unilateral action is ineffective or impractical.

Although the Authority’s participation in New York’s Workmen’s Compensation and State Employees’ Retirement systems constitute qualified exceptions to the scheme of internal autonomy, these exceptions are not controlling. Participation in the retirement system is governed by a statutory clause most broad in scope, authorizing participation at the option of any ‘ ‘ public or quasi-public organization ” (Retirement and Social Security

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Law, § 31, subd. [a]). Although the basis for the application of the Workmen’s Compensation statute is less clear, the administrative and legislative (see L. 1950, eh. 301, § 7) acceptance of the Authority as covered by the statute over many years constitutes, at most, a practical construction by the entities involved of markedly limited precedent or effect. Arguably, workmen’s compensation is not quite as internal a matter as the adjustment of the wage level to prevailing wages.

In the instant matter, however, there is no showing of any sort that section 220 of the Labor Law was ever intended to apply to the Authority, or any justification, by way of practical construction or otherwise, for the unilateral imposition of such regulation on its internal operations.

Accordingly, the order of the Appellate Division should be affirmed without costs.

Chief Judge Fuld and Judges Burke, Scileppi, Bergan, Jasen and Gibson concur. -

Order affirmed.

Cases cited

Gaston v. Taylor 274 N. Y. 359 N.Y. 1937-05-25 p. 522, p. 523
Wright v. State 223 N. Y. 44 N.Y. 1918-02-26 p. 522
Schwartz v. Board of Education 239 N. Y. 566 N.Y. 1924-11-25 p. 522
Wood v. City of New York 274 N. Y. 155 N.Y. 1937-04-27 p. 522, p. 523
Austin v. City of New York 258 N. Y. 113 N.Y. 1932-01-05 p. 522
Smith v. Joseph 300 N. Y. 516 N.Y. 1949-11-17 p. 522
Nolan v. New York City Housing Authority 199 Misc. 599 N.Y. Sup. Ct. 1950-06-29 p. 522
Campbell v. City of New York 244 N. Y. 317 N.Y. 1927-02-23 p. 522
Tripee v. Port of New York Authority 14 N Y 2d 119 N.Y. 1964-04-02 p. 522
Jewish Consumptives' Relief Society v. Town of Woodbury 256 N. Y. 619 N.Y. 1931-05-12 p. 522
Lawrence Construction Corp. v. State 293 N. Y. 634 N.Y. 1944-12-30 p. 522
Whittaker v. Village of Franklinville 265 N. Y. 11 N.Y. 1934-07-03 p. 522
Civil Service Forum v. New York City Transit Authority 4 A D 2d 117 N.Y. App. Div. 1957-05-20 p. 522
Civil Service Forum v. New York City Transit Authority 4 N Y 2d 866 N.Y. 1958-04-03 p. 522
People ex rel. Kieley v. Lent 215 N. Y. 626 N.Y. 1915-05-04 p. 522
People ex rel. Elkind v. Rosenblum 184 Misc. 916 N.Y. Sup. Ct. 1945-02-21 p. 522
Consolidated Edison Co. of New York, Inc. v. Village of Briarcliff Manor 208 Misc. 295 N.Y. Sup. Ct. 1955-08-02 p. 522
Estrada v. Parking Associates Corp. 37 Misc 2d 1033 N.Y. Sup. Ct. 1962-12-04 p. 522
People ex rel. Davies v. Cowles 13 N. Y. 350 N.Y. p. 522
Hinderlider v. La Plata River & Cherry Creek Ditch Co. 304 U. S. 92 SCOTUS 1938-04-25 p. 523
Petty v. Tennessee-Missouri Bridge Commission 359 U. S. 275 SCOTUS 1959-04-20 p. 523
Williams v. Williams 23 N Y 2d 592 N.Y. 1969-01-23 p. 523
West Virginia ex rel. Dyer v. Sims 341 U. S. 22 SCOTUS 1951-04-09 p. 523
Ryan v. City of New York 177 N. Y. 271 N.Y. 1904-01-29 p. 523
People ex rel. Sweeney v. Sturgis 175 N. Y. 470 N.Y. 1903-05-19 p. 523
Corrigan v. Joseph 304 N. Y. 172 N.Y. 1952-05-29 p. 523
Yerry v. Goodsell 4 A D 2d 395 N.Y. App. Div. 1957-07-24 p. 523
Plumbing, Heating, Piping & Air Conditioning Contractors Ass'n v. New York State Thruway Authority 5 N Y 2d 420 N.Y. 1959-04-09 p. 523
Bush Terminal Co. v. City of New York 282 N. Y. 306 N.Y. 1940-03-05 p. 523
Red Hook Cold Storage Co. v. Department of Labor 295 N. Y. 1 N.Y. 1945-11-29 p. 524
Colgate-Palmolive-Peet Co. v. Joseph 308 N. Y. 333 N.Y. 1955-03-11 p. 524
In re the Claim of Marsh 13 N Y 2d 235 N.Y. 1963-12-30 p. 524
Agesen v. Catherwood 32 A D 2d 416 N.Y. App. Div. 1969-07-25 p. 524

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Cases cited

Statutes and regulations cited