McCulloch v. Sociedad Nacional de Marineros de Honduras

PETITIONER:McCulloch
RESPONDENT:Sociedad Nacional de Marineros de Honduras
LOCATION:James Wah Toy’s Laundry

DOCKET NO.: 107
DECIDED BY: Warren Court (1962-1965)
LOWER COURT: United States Court of Appeals for the District of Columbia Circuit

CITATION: 372 US 10 (1963)
ARGUED: Dec 11, 1962 / Dec 12, 1962
DECIDED: Feb 18, 1963

Facts of the case

Question

  • Oral Argument – December 12, 1962 (Part 1)
  • Oral Argument – December 11, 1962
  • Audio Transcription for Oral Argument – December 12, 1962 (Part 1) in McCulloch v. Sociedad Nacional de Marineros de Honduras
    Audio Transcription for Oral Argument – December 11, 1962 in McCulloch v. Sociedad Nacional de Marineros de Honduras

    Audio Transcription for Oral Argument – December 12, 1962 (Part 2) in McCulloch v. Sociedad Nacional de Marineros de Honduras

    Earl Warren:

    Solicitor General.

    Archibald Cox:

    Chief Justice, I have just one or two moments remaining and I would like to take them with the Court’s permission to indicate how the Incres case which is to be heard after these N. L. R. B. cases fits in to our scheme.

    The — we’ve not asked for time in that case and I think to round out the problem, it might be proper to say just a word or two about it.

    Our basic proposition as I indicated before lunch is that the flag is not only so much the most convenient but indeed the only convenient way of determining which nation may regulate a unitary problem of labor management relations, that the flag should be regarded as decisive where it has some solid foundation and usually in the fact that the vessel is carrying the trade of the flag country.

    Now the Incres case which is to follow this, you will find that the vessel sails under the Liberian flag but has virtually no contact with Liberia and specifically carries no Liberian trade.

    If the vessel were U.S. owned and beneficially operated, if it were operated as part of an enterprise based on the United States, shall I say, in the sense that the aluminum industry is based on the United States or the parts of the steel industry.

    Then we would have the question which the Government does not reach.

    But in the Incres case, the vessel is not beneficially owned or managed by what is essentially a domestic corporation.

    The vessel is Italian owned and operated in every beneficial sense and the immediate corporate owner is a Liberian corporation.

    The crew and articles are Italian.

    The owner of the New York agency which handles the bookings for these cruises is Italian.

    The home port of the vessel is Italian and the only connection with this country really is that it carries trade out of New York to the Caribbean and back again.

    So that even if it be said that the flag is a fiction, in our view, there is not a sufficient U.S. interest in this case to attack the fiction assuming that it can ever be attacked, virtually, everything about it is formed.

    Now the case does have one added complication.

    It’s been held that a state court does not have jurisdiction to deal with a labor management relations problem where it is arguably dealt with in the National Labor Relations Act.

    And in the case involving the Great Lakes last term, the Court said that this rule applied where the question was whether these were employees and this was a labor organization arguably within the meaning of the National Labor Relations Act.

    We think those cases but notwithstanding those cases, the Court of Appeals of New York erred here because on these factual reason.

    This fact, it is not even arguable we think, that the National Labor Relations Board would have jurisdiction.

    Now the facts, the decisive facts in our view are all known.

    There’s no problem of growing inferences.

    No problem of weighing or balancing or occasion for the use of expert discretion.

    Second, we think the doctrine of arguably subject should not be applied in this area where the question is one of the statutory jurisdiction of the Board, vis-à-vis the claims of foreign nations because this is a matter of some one person must do it.

    You can’t all take hold of it.

    This is not a field which involves the interpretation of some broad term contained in the Act such as employee or labor organization.

    It’s a matter in which the Board has no particular expertise and we would think therefore that it is not cut in to the usual doctrine to say that it has no application here.

    We conclude therefore that to disregard the registry of either the Honduran vessels or the Liberian vessels in the words of this Court, does not fit the accommodations that become relevant in fair and prudent regard for the interest of foreign nations in relation to their own ships and their own nationals, and the effect upon our interest of our treatment of the legitimate interest of foreign nations.

    Potter Stewart:

    Where were those words spoken?

    Archibald Cox:

    Those come from the Romero case.

    Potter Stewart:

    Alright.

    Could I ask you one question before you sit down?

    It is the injunction of the District of Columbia case refer to the same certification as the two Court of Appeals?

    Archibald Cox:

    The same direction of an election.

    So you’ve got two injunctions out.

    Archibald Cox:

    We got two injunctions out against the same election.

    So it would be conceivably possible to decide this case on either one of those.

    Archibald Cox:

    Oh yes, I think that if the case were decided in the District of — on this certiorari to review the decree of the District Court and the District of Columbia, the other one in the sense, I take it would become moot.

    It is — and it’s the other one that presents the employer situation.

    Archibald Cox:

    That’s correct.

    And that’s one of the reasons we didn’t bring the question here.

    Earl Warren:

    Mr. Mandon — Marden, is that it?

    Orison S. Marden:

    Mr. Chief Justice, may it please the Court.

    There is a division among counsel seated on the same side of the table in this case just as there happens to be a division within the Government of the United States.

    For example, Mr. Cox, although arguing more persuasively than could I, the merits of Empresa’s case before this Court on the facts of our particular case has asked the Court to affirm on a theory which in our view as expressed by him has no foundation in our law or in international law and is based really on a combination of flag law with the universal arranging plus the context test that the Board, as we contend, erroneously applied here.

    And Mr. Cox has affirmed the power of Congress to legislate with respect to labor relations in foreign countries on the high seas which is a thesis we deny.

    On the other hand, Mr. Manoli, our opponent, has expressed the view that this Court must face up to the law of the flag problem and that somewhat contrary to the position, I think, expressed in his brief that the law of the flag is really the controlling concept which either we must affirm or deny.

    To me, the impact of this case on the world community of nations can best be seen if we reverse the nationalities.

    If we assume a fleet of American flag vessels based in Baltimore, home port Baltimore, flying between the ports of this country and Honduras and other South and Central American ports manned by American seamen represented by an American union, the National Maritime Union, regulated by the National Labor Relations Board.

    I can hear the outcry from Maine to California if the Republic of Honduras in that situation were to assert the right to handle labor relations and regulate labor relations upon our ships on the high seas and in the reports of nations other than Honduras.

    Now my friends will say, “You haven’t mentioned one little fact”, and that fact is that in your supposititious case, the stock of the ship owning company in the United States was owned by Honduran interest and furthermore, you have time chartered your ships to that Honduran interest.

    I say it makes no difference whatsoever.

    In either case, we have the Stars and Stripes over these vessels carrying the protection of this country subject to the regulation of our Labor Board manned by American seamen and that we would reject with all the power in our — in our — at hand, any attempt by another country to interfere in that situation.

    Now that is precisely, precisely what has happened here in the reversed situation.

    For more than 20 years, Empresa and essentially a genuinely Honduran corporation as the findings of the Board show independently operated all its officers in Honduras, all its directors in Honduras, owning property in Honduras, owning land, they’re paying taxes to Honduras, owning these ships, a perfectly respectable trade since the memory of man, one is not to own ships and to charter them out.

    This cooperation subject to Honduran law, registering its vessels there, subject to a whole complex of labor legislation and ship legislation governing these ships, has now been told by an instrumentality of our Government that all these is to be swept aside and that each ships, at least while they’re within the territorial waters of the United States, must conform to the orders and regulations of the National Labor Relations Board.

    And yet, Mr. Manoli tells this Court that none of these intrudes on the sovereignty of Honduras.

    Now, I won’t go into the facts in great detail.

    Mr. Cooper made a very impassioned plea on the facts, very much the same contentions that were made before the Board.

    The Board in large part rejected his contentions as the findings of the Board show.

    Board found that Empresa was independently operated and insofar as Labor Relations go on the facts putting — is leaving aside the erroneous legal conclusion that the Board reached.

    On the facts, each and every step in Labor Relations without any exception whatsoever were handled by Empresa, Empresa alone.

    Orison S. Marden:

    Empresa hires his men in Honduras.

    They sign ships articles there.

    They — it is a Honduran crew entirely subject to the direction at all times of Empresa masters.

    The fact that they are time chartered does not detract in the slightest from the responsibility of the shipowner over Labor Relations, that’s true of every time charter unless Cooper speaks of the fact that the time charter were here.

    The holder of the time charter controls the movements of the ship, well, of course he does, of course he does.

    That’s true in any case.

    That’s true if we have — if we had — if United Fruit had chartered a Norwegian vessel or a Greek vessel.

    Of course, it controls the movement of the ship but Labor Relations on those ships so time chartered are handled by the shipowner, and that’s universally true.

    Now under Honduran law to which we are subject as a Honduran corporation and parenthetically during the recess, I have made inquiry with respect to Mr. Justice Stewart’s question with respect to whether an — a U.S. interest could register under Honduran law and I believe I’m reliably informed that they could but in that event, they would of course subject the entire operation to the whole colloquy of labor laws and other regulations of Honduras and with all labor grievances would have to be handled under the laws of that country and not under the laws of our country.

    Now the Board order here is — which is a strange result.

    It directs that an election be held on these foreign-flag ships on a ballot which gives the unlicensed seaman a choice between the N.M.U., a Honduran union known as Sindimar and no union.

    Now the N.M.U. could not possibly represent these seamen under Honduran law.

    It’s specifically forbidden that any union not composed of 90% Honduran citizens and not directed by a full compliment of Honduran citizens as officers and whose — who has not been recog — which has not been recognized under the laws of Honduras cannot, in any case, in any situation, represent Honduran citizens.

    So it’s completely —

    William J. Brennan, Jr.:

    Mr. Marden —

    Orison S. Marden:

    — aborted.

    William J. Brennan, Jr.:

    I gather Honduran law is that the crew must be Honduran citizens and not really Honduran vessels?

    Orison S. Marden:

    I think citizens, yes sir.

    Now that has never been — that has never been denied since we first brought it out and I am still puzzled as to why the National Maritime Union continues a purs — to pursuit an objective — pursue an objective which cannot possibly result in any benefit through that union under the conceded law of Honduras and over the protest of its Government.

    Now the Honduran union, Sindimar, contrary to what has been said was never a party really to the proceeding before the Board.

    It sought to intervene long after the hearings had been closed and was on other claims that it represented a growing number of the seamen on our ships.

    It was allowed to intervene by the Board without any hearing, without anybody having an opportunity to say anything about it.

    It’s a paper organization as was said was found in another Board proceeding.

    It has shown no interest in the litigation before this Court or in the Court of Appeals.

    The third choice is no union.

    But our employees are members of a Honduran union with whom we have an existing contract and with which we’ve had an existing contract for over 20 years.

    And yet, they were not under the Board order even given the opportunity to vote for their own union.

    Now one can imagine the chaos and the confusion of the implementation of such an order by our Labor Board.

    On these — among these unlicensed seamen, not only coming into the ports of this country but under the Board order, the balloting was to take place even outside the territorial waters of the United States.

    A seaman sitting in his cabin at Puerto Cortés in Honduras would be required to want a ballot as prescribed by this — to them of foreign administrative agency.

    Orison S. Marden:

    Now, if the Board’s theory that a conflicts test such as the court — this Court announced in Lauritzen is to be applied here and we say it should not and cannot because it’s an entirely different situation but assuming that it should be applied, then I think Mr. Cox has presented a most persuasive and conclusive argument for the proposition that the Honduran context far outweigh those of this country and that on application of that test, the judgment must be affirmed.

    Judge Friendly found below in this as the Solicitor General has argued.

    But the very fact that we have these differences illustrates to my mind the difficulties with applying the context of test.

    Here we have the Board applying what they call the Lauritzen rule and reaching a conclusion different from that reached by the Court of Appeals below differing from that, urged by the Government of the United States here.

    One can imagine if you apply this internationally, the difference is in the weight that Honduras would give to certain of the context or Venezuela, or Great Britain to those that others would give.

    It’s an impossible theory, I submit, that is being urged on this Court and while it’s sufficient for the purpose of my case, I respectfully suggest to the Court that it is a test that should not be applied and without basis in law.

    Now the flag, the flag rule, is one of our most ancient in international law.

    It’s a rule that this nation has followed since its beginning.

    It’s a rule that was followed long before we were — this nation was formed.

    It’s a rule that is universal.

    It’s certain.

    It’s definite.

    Everyone knows what it means.

    It is not susceptible of the differences of opinion that come from applying such an uncertain rule as the context rule.

    Now even our enemies observe the law of the flag and it is the rule, we submit, that should be applied here.

    Now under that rule, on the high seas and in the ports of the flag state, the internal management of the vessel is governed entirely by the law of the flag state.

    Some people call it a fiction.

    Is citizenship a fiction?

    Within the territorial waters of a literal state, it’s perfectly true that there is power and international law recognizes that power to a limited degree to interfere with the jurisdiction of the flag state in such matters as policing the harbor at local matters.

    In some cases, the wages of seamen where there’s a local difficulty with free payment of wages and that sort of thing.

    But with that slight exception, it is the universal rule that flag law governs.

    Now why should —

    Of course the kind of a case as I understand it, the Solicitor General says need not be decided here is the situation where in effect the foreign nation licenses out its flag to somebody else.

    Orison S. Marden:

    Well, Mr. Justice Harlan, it is also the cardinal principle of international law as I understand it and that has been reaffirmed in the convention of the sea that Geneva Convention on the sea, that only the sovereign which issues the registry — permits the registry is confident to judge as to its own regulations and what it enforces.

    But there is an admonition that came out of the Geneva Convention that each flag nation should actively assert its jurisdiction and really, really control the vessel and its internal management by its laws and regulations.

    And I submit that category number four which is given by Mr. Cox is equally entitled to all the benefits that flow from a flag registering.

    I think that if there are evils of any kind in such registrations, they must be handled in some other way.

    It’s too important in a world that’s grappling for agreement on many things to let this matter as to which there has been agreement for so many centuries as they set aside by a unilateral action on our part.

    We know of no case by any nation in any jurisdiction where a state has sought to impose its labor laws aboard foreign flag vessels.

    These are — this is the first attempt of which we know this attempt by the Labor Board.

    Orison S. Marden:

    Our neighbor Canada had the question before them recently.

    The case is attached.

    The decision is attached to Canada’s brief amicus here.

    There, vessels of British registry but owned by Canadian interest 100% and spending more than six months of each year within Canadian waters were held not to be subject to the labor laws of Canada on a state basis of application of the international rule of flag law government.

    Now, this Court in the Benz case, it seems to me has already decided this one.

    A close reading of that case which makes a close study of the text of the Act, the congressional debates, and the canons of construction which governed the construction of congressional legislation, came to the square conclusion that the Act was not intended to reach out and cover Labor Relations Board foreign flag, foreign ships manned by foreign crew.

    The fact that that ship happened to be, as I say temporarily here, it is not in our view, the slightest consequence every vessel is here temporarily and it — that is true in any case.

    And that illustrates another fallacy in the context rule.

    Empresa might win this case on the facts here.

    Who knows what will happen tomorrow?

    Who knows where our stock may lodge tomorrow?

    Who knows where our vessels maybe time chartered and between what ports they will apply next year.

    Well, in each of these cases, we have — well, we have to come back to the Labor Board and have it adjudicated all over again whether we are subject to the laws of this country or the laws of Honduras.

    And that can — that sort of conjecture can be carried on adding some item.

    And it seems to me it demonstrates so clearly that flag law must be the governing principle.

    Now the Solicitor General very rightly says that this Court should not go beyond the facts of this case.

    I don’t suggest the contrary.

    But in deciding the case, if the Court decides it on a theory which is erroneous and mischievous, and one that can only lead to further litigation and difficulty, whereas it can be decided on a simple universally applied rule.

    I would think that the choice is clear and it is that choice that we respectfully urge upon the Court.

    Now, so much has been covered by the earlier argument that I am going to skip some things I wanted to say.

    I do want to point out that there is an existing Treaty between this country and Honduras which in our view requires application of flag law in our situation.

    It’s a statute which is not noble to Honduras and the United States.

    It has been applied in the — it is in existence here in a number of other cases.

    I think one other — with one other —

    Hugo L. Black:

    What part of that Treaty do you think based on that?

    Orison S. Marden:

    I think Article X, Mr. Justice Black, which affirms the —

    Hugo L. Black:

    I’m speaking of your brief.

    Orison S. Marden:

    They respect — it is in the appendix to our brief at pages — page 65.

    Hugo L. Black:

    Well, I found it on page 30.

    Orison S. Marden:

    Oh, I see.

    Orison S. Marden:

    Well, it’s the same Treaty.

    Article X affirms with respect of each contracting party for vessels flying a flag of the other and Article XXII also on page 20 — 65, advance counsel officers exclusive jurisdiction over controversies arising out of the internal order and so forth.

    Hugo L. Black:

    What about the last sentence, the part with —

    Orison S. Marden:

    The last sentence, Your Honor, I think illustrates what I said earlier that there is an exception to the general rule of international law namely, that in the port and within the territorial waters of another nation, it is recognized that local conditions would — might — may warrant exercise of undoubted power to take some action and I think this might, for example, have to do with — an illustration might be prepayment of wages which under one of our statutes is forbidden.

    But —

    Hugo L. Black:

    I would suppose that so far as reliance on your Treaties stand alone, the last (Inaudible) would make it rather difficult because it says that the local laws permits, they can exercise jurisdiction over each — it’s concerning the adjustment of wages and the execution of contracts relating they do.

    I would think it’s probably that we can draw argument on your Treaty, would it not?

    Orison S. Marden:

    I think that there is — there is power within the territorial limits of the United States to take action of almost any kind, but international comity has — so thus far prevented this country and others from taking any steps within their territorial waters with respect to internal management of foreign-flag vessels except in certain limited areas and it’s only as a matter of comity that I present the argument as test to what can happen within territorial waters.

    When you go beyond territorial waters, I think there is serious doubt as to the power of Congress to legislate with respect to labor conditions on foreign-flag vessels on the high seas and in their home and other ports.

    We present that in our brief.

    It’s — I don’t think that’s ever going to reach it because I think the statutory construction points are so strong that it’s unnecessary to consider constitutional points but we do urge it and we urge it seriously.

    We think that —

    Hugo L. Black:

    On what constitutional provision do they have —

    Orison S. Marden:

    Commerce, commerce power of Congress.

    We suggest that Congress does not have the power to legislate under the commerce clause with respect to labor relations for example in a factory in Honduras.

    We don’t think the people have the power to give it to Congress in the first place under international law in the context to which our Constitution was adopted.

    Hugo L. Black:

    Why wouldn’t that — I don’t know that we have ever reach that but it’s been held that the commerce power of nation can regulate the kind of goods that will be shipped in commerce and the hours that which people work in the states or matters where they couldn’t.

    Federal government does not have jurisdiction.

    Now, I think that would — might be an answer to your argument about commerce clause?

    Orison S. Marden:

    I appreciate as a difficult point to Your Honor but I think a point is reached where our sovereign power cannot lawfully legislate.

    And I think that the high seas on foreign-flag vessels is such a point and is not different in truth from legislating with respect to labor conditions in a factory in Honduras or on a banana plantation that — in Honduras.

    Hugo L. Black:

    As I recall that one thing which (Inaudible) had a pretty exhibitory effect on the act of Congress was that when Congress wasn’t sure with committee reports with respect to (Inaudible) this kind of ship and (Inaudible) as any place in the world unless they’ve — as they work more than five days a week.

    Orison S. Marden:

    Of course we can prevent anything from coming into this interest and anything from going out.But when we assume to govern relations between the management and labor not within our own territories but in some other part of the world, it seems to me that we’ve reached the point that where we’ve exceeded our power.

    Hugo L. Black:

    Of course the questions I’ve asked have no relationship whatever to your main argument that the Act should not be read in going beyond what you have said.

    Orison S. Marden:

    Yes Your Honor.

    Now, as I’ve stated, we feel that the Benz — the Benz holding is controlling here and that its application disposes of the case.

    The labor laws of Honduras have been referred to earlier in the — by the Solicitor General.

    They’re very elaborate, very complex, very detailed, very foreign, and Empresa and its employees are subject to those laws, all labor grievances must be processed before the labor courts of Honduras and in the Ministry of Labor.

    And this Board order, of course, in its element effect, if it’s sustained, not only requires us in precedent to breach its contract with the Honduran union with whom it has and has had an existing contract but also would require us to violate the law of Honduras in a number of respects.

    The Board’s order sows the seeds as Judge Friendly said below of continuous conflict between the regulatory measures of two jurisdictions.

    Orison S. Marden:

    The Solicitor General pointed out so persuasively I thought that it is impossible in this area and to have a workable arrangement whereby two nations governed the labor relations of — on a — aboard vessels.

    You could have them changing from port to port and — rather than assist the free flow of commerce, you will be putting a straightjacket on Congress — on commerce.

    Certainly, we couldn’t enforce it beyond the three-mile limit.

    Honduras could send a gunboat up here and take charge as soon as they got outside the territorial limits of the United States.

    Now, we’ve raised as I’ve already indicated some constitutional questions.

    I don’t think it’s necessary to go into them in argument.

    They’re in reserve.

    We’ve urged them from the beginning.

    A question of jurisdiction was raised by Mr. Justice Brennan.

    It hasn’t been referred to by our opponents.

    It is our view that (Inaudible) sustained the jurisdiction of the District Court.

    There as the Court will recall, a union brought suit to vacate a Board order which has been issued in violation of statutory command and as Mr. Justice Whitaker pointed out the sole and narrow question presented was whether the Board had acted in excess of its power.

    We say here that the Board did act in excess of its powers and if there ever was a case where a court should have stepped in when it did, this was that case because if this election had proceeded, the fact would’ve been in the fire.

    The point to Honduras would’ve occurred.

    The breach of contract, our breach of contract would have occurred.

    Our violation of law with Honduran law would have occurred.

    If we say the rule is the same for employer and employee and as Judge Friendly pointed out below.

    And parenthetically, I think it’s of interest with all the talk of avoiding the delay of judicial action that as Mr. Cooper pointed out, we were two years in obtaining a decision of the Labor Board, I say that without any criticism.

    The Board decision here came down on November 17th.

    The District Court took two days to dispose of our application for a temporary injunction.

    The Court of Appeals acted on January the 12th so that we were in fact ready for this Court within two months following the entry of the Board decision.

    For the reasons given, we respectfully urge a premise and we particularly urge upon the Court that flag law should be the decisive basis for your premise.

    Earl Warren:

    Mr. Rhyne.

    Charles S. Rhyne:

    Mr. Chief Justice and may it please the Court.

    I represent Sociedad, the Honduran union which has for the past 20 years represented the crewmen, the unlicensed crewmen aboard these vessels of Empresa.

    There are 335 of these unlicensed crewmen.

    All of them are Honduran citizens except one who is a Jamaican.

    I believe that the impact of the Board’s order upon Sociedad and the crewmen that it represents is probably more drastic than on any other party before this Court.

    Because if the Board order is upheld and the Board is successful in enforcing it throughout the world, it means literally this that Sociedad will go out of existence and these crewmen will lose their jobs.

    Because, number one, Sociedad is not named and cannot be named under Honduran law as one of the unions for which these crewmen are allowed to vote under the Board’s order

    Charles S. Rhyne:

    .Number two, under American law, if full American jurisdiction is shoved aboard these vessels at 75% of the master crew of each vessel must be American citizens just as the requirement that has been referred to in answer to Mr. Justice Brennan’s questions.

    Honduran law requires 90% of the master crew to be Honduran citizens.

    Now, I’m glad that Mr. Manoli corrected his statement that our contract has gone out of existence because as we have alleged in our complaint and as they admit, the contract is in existence to April 15, 1963 and there’s a provision set forth on page 21 of the record which provides that unless either party gives 30 days notice, the contract is renewed automatically for another two years.

    There was one other fact that was said here by someone much more expert than I, Mr. Cooper, about wage rates in this field when he said that the Honduran wage rate were about one-fourth those of American seamen.

    I can’t believe that is accurate.

    I have merely hearsay information but if you look at pages 16 and 17 of the record where we set forth the wage rates of these Honduran seamen in American dollars.

    Some of them get as much as $210 a month and I doubt seriously that we have many crewmen aboard American vessels earning $900 a month.

    So with those statements about the factual situation, I would merely say that what the — we are faced with here is the replacement aboard these Honduran vessels of the very complex, the very modern Honduran Labor Code which, as it’s been pointed out, it’s attached to their brief of Honduras here which is in many ways much more modern as the Solicitor General has mentioned some of the things in our own law with the complex labor law of the United States of America through the National Labor Relations Act.

    Hugo L. Black:

    Excuse me, did you say page 16 and 17 of the record?

    Charles S. Rhyne:

    Yes.

    Hugo L. Black:

    In number 91 and 3.

    Charles S. Rhyne:

    No.

    It’s in 107, Mr. Justice Black.

    Hugo L. Black:

    107.

    Thank you.

    Charles S. Rhyne:

    If you look at page 15 and 16 of the record you’ll see the wage rates set forth there that are required to be paid under this contract in American dollars.

    Now, he really believed that the issue before this Court is frankly whether or not this Treaty that has been referred to for the international law shall govern or whether or not the National Labor Relations Act should govern.

    And in approaching an answer to that question, we feel that very important that we stress the regulatory scheme that exist now throughout the whole world for this flag state sovereignty that’s existed for many centuries.

    It is to prevent turmoil and conflict.

    Its contained rules of practical necessity which Mr. Marden says, even our enemies adhere to.

    Now that is what the Board would tear down because what it says is that instead of Honduras having the exclusive power and control over Honduran flag vessels throughout the world, the National Labor Relations Act would replace that regulation whereas under international law today, Honduras has the full physical power and control over every vessel that flies its flag.

    Now, this juridical order that exist on the high seas today is key to the flag and the flag isn’t just an empty gesture because with the flag, goes many duties and responsibilities in addition to the taxes and other things that were referred to here that the country might get.

    For example, this Board order would, we feel, prevent Honduras from carrying out these duties and responsibilities that go with the flag.

    One illustration of how important the flag is, is that it’s only the flag nation which can order ships around for its own national interest.

    A good illustration is the order issued by the President of Honduras telling all Honduras’ vessels long before this quarantine to stay out of Cuba.

    That is the power of the flag and it’s universally recognized and followed.

    And I think we have to also keep in mind in connection with this problem that all international law rules are really two-way streets.

    Everything that we can do to Honduras here and Honduran crewmen as — was pointed out by Mr. Marden, they can do to us and I think one other fact that I should call to the Court’s attention is set forth in the brief of the Republic of Honduras here and that is its entire merchant fleet consists of 22 vessels.

    The 13 vessels here are therefore more than one-half its entire merchant fleet.

    So the impact on the Republic of Honduras is not inconsiderable.

    Charles S. Rhyne:

    So this regulatory scheme that exist now and what we would tear down if the National Labor Relations Board order is allowed to go into effect, is one that is not only universally adhered to but — and workable but it comes into conflict with this election order rather quickly because the conduct of this election in foreign ports, ports of Honduras or any other place where these ships might be by a mail or anything else is a flagrant violation of Honduran authority under international law.

    And the Honduran government has filed its protest here.

    You’ll find in the record the very concisely stated protest of the ambassador.

    He protested through the diplomatic channels which are referred to by the Solicitor General.

    But we have not only the problem of clash of sovereignties on the open seas and imports throughout the whole world.

    For example, if this Board order is upheld and some of these ships go into the harbor in London, who will the London authorities look to, the United States of America or Honduras?

    They fly in with a Honduran flag yet you have this Labor Relations Act that might have something to do with some instance that might occur there.

    Because the nations of the world look to the flag state, if a ship cuts an international cable or anything like that, the protest always go to the flag state.

    So this flag is not an empty gesture.

    The country that grants the use of its flag accepts rather grave and important responsibilities.

    Now there’s been a reference here to comity.

    I think that while it’s true that within the territorial waters of the United States, we have under this comity practice never interfered in the internal management affairs of vessels flying foreign flags that this Treaty that is referred to which recognizes our flag and the flag of Honduras is conclusive within the territorial waters of each nation really makes the international law rule that applies on the open seas, applied within the territorial waters of each nation so it makes this rule universal.

    And I think it’s rather interesting that while so many nations throughout the whole world have adopted new labor code within the last 15, 20, or 30 years, not a single nation has ever before asserted that its Labor Relations Act applies on board a foreign flag vessel in its own territorial waters, although it applies that labor code to its own ships within it’s own territorial waters very naturally.

    So — and certain it is that no court has ever upheld any such assertion because other than in Canada, it’s probably the only place that has even been raised.

    Now, we come to the National Labor Relations Act.

    A lot has been set about it, but I wanted to stress just one point.

    And that is from the days of Chief Justice Marshall, that has been referred to until now.

    There’s been a universal, uniform rule that unless there is an expressly — expressed intention to apply a domestic statute of general terms internationally, it will not be so applied as Mr. Justice Clark said in Benz, it requires an affirmative intent clearly expressed.

    Now Congress legislated here undoubtedly with that in mind, and there’s a quotation in the brief of Empresa over on page 24 and 25 from a decision by Chief Justice Marshall in the exchange — Schooner case where he said that to apply one of these domestic statutes internationally would be a breach of faith with the — our nation throughout the civilized world.

    Well, I think it would almost be a breach of faith with Congress in having acted on one rule, a rule that has been universally enunciated and adhered to by this Court to how it changed now under these circumstances because it undoubted — it relied upon that rule in treating the very statute that’s before this Court now.

    And I come then to the so-called contacts theory.

    I believe the Solicitor General uses the term interest and the Board uses the term contacts, and they both defined it differently.

    And I would agree empathetically with what Mr. Marden have said that the law of the flag should govern because the contacts theory is not a rule of law that we can establish internationally at least but unilaterally.

    As I’ve said before the — a rule of international law is a two-way street.

    And this contacts theory disturbs also because what we’re saying in effect that we’ll add up the contacts and that we think the contacts are great enough, will nullify international law.

    Now such a self-assessing, self-determination of our own self-interest in deciding whether or not to abide by rules of international law, I submit, is a rather shocking thing.

    This self-judging disturbs greatly because we have another instance in international law where we have self-judging involved, that we have the so-called county reservation.

    We decide whether or not in our own self-interest, we’re going to let a case be decided by the world court.

    Now if we’re going to say that in our self-interest, every time that we add up the contacts with the United States of America or in some certain way that judging those facts ourselves, we are going to — either let international law apply or not.

    We will in effect have injected another type of self-judging reservation for which there certainly is no precedent in law or experience to tear down and wipe out this international law rule which is so universally adhered to throughout the whole world.

    Charles S. Rhyne:

    And —

    Potter Stewart:

    Do you understand Judge Friendly’s opinion in the Second Circuit to have — been based upon this contacts or interest, contacts primarily or not?

    Charles S. Rhyne:

    Mr. Justice Stewart, I would say that I do not quite understand that he places the entire emphasis upon it.

    It’s true that my distinguished adversaries and others have referred to it as a contacts decision.

    I would say that if it is so interpreted, I believe that it’s based on a wrong principle.

    I agree with Mr. Marden that the law of the flag should govern here and not some new theory based upon rather nebulous criteria with the Board stating one group of criteria and the Solicitor General stating still another and then the Board coming before this Court and saying to you, “We disagree with the way that Judge Friendly added up the contacts.

    We think he was wrong”.

    It means just this to a small union like the one I represent would be here once under the law of the flag will be here many times under the contacts theory.

    It just comes down to that practical application.

    Now the —

    Hugo L. Black:

    Do you say we have to adopt one of the two or the theory in order to determine what the — what’s the scope of the National Labor Relations Act?

    Charles S. Rhyne:

    Mr. Justice Black, I think that you can interpret the National Labor Relations Act as not reaching foreign flag crewmen and that ends the case, in other words, reaffirm Benz.

    So, one thing that really — that serves me about the fourth category of the Solicitor General is this.

    He doesn’t explain what is going to happen about the dual sovereignty under those circumstances.

    He does a very effective job in his argument in his brief in saying that you just can’t have two jurisdictions or two government exercising jurisdiction on a single vessel.

    But yet, he seems to leave this open, this dual sovereignty thing which he really can’t answer, I agree with him in that fourth category which I feel really is not much different from the other categories.

    Now a lot has been said here about the fact that the vital interests of the United States require this or require that.

    It seems to me and I agree with Mr. Manoli, you ought to tell the Board whether they stay in or stay out because look at the tremendous interest of these foreign governments as shown not only by the briefs filed here but by the protest which the Solicitor General mentioned that come through diplomatic channels.

    Literally, the eyes of the seafaring nations of the world are upon this Court, are you going to abide by the law of flag state sovereignty?

    Are you going to break it down?

    Are you going to try to state a new exception to the rule of flag state sovereignty?

    And I urge very strenuously upon the Court that the real United States interest here is not entirely in the commercial field.

    The real United States interest in this case, I submit, is building up not tearing down international law.

    And I think that this can lead to just one conclusion and that would be a reaffirmance of the law of flag state sovereignty.

    And so, I urge that the Court in affirming — affirm on the basis of the District Court’s decision of Judge Holtzoff and reaffirm the rule that this Court has said so many times of flag state sovereignty and help to build up and maintain this system of world law that we’re all working for.

    It hasn’t been very long time less than two years when I sat across here, a couple of blocks and I’ve heard the President of the United States in a very dramatic and noble address say that the ultimate objective of the United States of America is a new world of law where the strong or just and the weak secured and the peace preserved forever.

    It seems that this Court has a rare opportunity to — in this case, in reaffirming the law of flag state sovereignty to say to the whole world that we’re interested in building up not tearing down rules of international law to which the nations of the whole world and ourselves up to now have been affirmatively and completely committed.

    And so we ask that the decision of the District Court be reaffirmed.

    Earl Warren:

    Mr. Cooper, I think you have a few minutes left if you want to —

    Herman E. Cooper:

    (Inaudible)

    Earl Warren:

    Very well.