text:
    CREST TANKERS, INC., and Clayton Tankers, Inc., Plaintiffs, v. NATIONAL MARITIME UNION OF AMERICA, Defendant.
    No. 83-1481C(1).
    United States District Court, E.D. Missouri, E.D.
    April 4, 1985.

      Thomas M. Hanna, St. Louis, Mo., for plaintiffs.
    Robert Bogard, St. Louis, Mo., Ned R. Phillips, New York City, Sandor Korein, East St. Louis, Ill., for defendant.
   MEMORANDUM

NANGLE, Chief Judge.

This case was tried to this Court sitting without a jury. This Court having considered the pleadings, the testimony of the witnesses, the documents in evidence, and the stipulations of the parties, and being fully advised in the premises, hereby makes the following findings of fact and conclusions of law, as required by Rule 52 of the Federal Rules of Civil Procedure. Fed.R.Civ.P. 52.

A. FINDINGS OF FACT

1. Crest Tankers, Inc. (hereinafter “Crest”) is a Missouri corporation and a wholly-owned subsidiary of Apex Holding Co. (hereinafter “Apex Holding”). Clayton Tankers, Inc. (hereinafter “Clayton”) is a Missouri corporation and a wholly-owned subsidiary of Apex Holding. Clayton is engaged in the ownership of United States flag vessels and Clayton’s vessels are operated by Crest under contract. Crest is engaged in the ownership and operation of United States flag vessels on the high seas.

2. Trinidad Corp. (hereinafter “Trinidad”) is a Delaware corporation and a wholly-owned subsidiary of Apex Shipping, Inc. (hereinafter “Apex Shipping”), which, in turn, is a wholly-owned subsidiary of Apex Holding. At all relevant times herein, Trinidad had offices in Philadelphia, Pennsylvania; Long Beach, California; and Clayton, Missouri. Trinidad engaged in the ownership and operation of United States flag vessels, including vessels of the Military Sealift Command of the United States Navy.

3. Apex Holding is a wholly-owned subsidiary of Apex Oil Co. (hereinafter “Apex Oil”). Apex Oil is a partnership that owns approximately 60 companies. The business of Apex Oil can be generally described as that of “oil traders”. Oil traders make a profit by purchasing oil at a low price in one part of the world and transporting it to another part of the world to sell at a higher price.

4. On a flow chart, the corporate relationship of Apex Oil, Apex Holding, Apex Shipping, Trinidad, Clayton and Crest, is, as follows:

5. Trinidad was purchased by Apex Shipping in January, 1981. By the summer of 1982, Trinidad owned, inter alia, five (5) tanker vessels outright, all of which were under continuous voyage charters to Apex Oil. At that time, Trinidad was the only Apex Oil subsidiary operating American-Flag tankers. Each of these had a capacity of 26,000 long tons. In addition, Trinidad was operating, under a management contract, two ships, the “Allegiance” and the “Banner”, which were owned by Grand Bassa Tankers, Inc. Under said management agreement, Trinidad had the right of first refusal at any given price to purchase the Allegiance and the Banner.

6. The National Maritime Union (hereinafter “NMU”) is a “labor organization” within the meaning of § 152(5) of the Labor Management Relations Act, as amended (hereinafter “LMRA”), 29 U.S.C. § 152(5). NMU is the collective bargaining representative of the unlicensed sea-going personnel of Trinidad. NMU and Trinidad are parties to a multi-employer collective bargaining agreement covering said unlicensed sea-going personnel. Said contract between Trinidad and NMU was effective June 16, 1981, through June 16, 1984. NMU and its duly authorized agents maintain an office in Granite City, Illinois, and do business in St. Louis, Missouri.

7. The collective bargaining agreement between Trinidad and NMU provides, in pertinent part, as follows:

The company in entering into this Agreement hereby recognizes the Union as the sole collective bargaining agent for the Unlicensed Personnel employed aboard all vessels of the Company where the Company also recognizes the Union as such agent. The Company also recognizes the Union as the sole collective bargaining agent for the Unlicensed Personnel employed by the Company on board all U.S. Flag oceangoing vessels including, but not limited to passenger, freighter, bi-cargo, tanker and bulk carriers, which are owned or operated (both at present or at any time during the life of this Agreement), by the Company or any of its subsidiaries or affiliates (whether so at present or at any time during the life of this Agreement), except those companies and vessels already covered by another AFL-CIO Maritime Union, as an owner, as an agent, as a General Agent of the United States, or under bareboat charter....
The term “subsidiaries” or “affiliates” shall be deemed to include any business entity whether corporate, partnership, trust or individual which is effectively controlled by or effectively controls the Company either directly or indirectly. The Union may in its discretion at any time require that any such subsidiary or affiliate execute this Agreement and a refusal to do so will give the Union the right upon a 10-day written notice to the Company to cancel this Agreement. The failure of the Union to request a subsidiary or affiliate to sign this Agreement shall not in any way affect the obligation of the Company herein that this Agreement does cover and include all unlicensed personnel on all the vessels described above whether owned or operated by the Company or any of its subsidiaries or affiliates.

Article I, Section 1 (emphasis added).

8. Crest was organized on or about September 15, 1982, and began to make preparations for the ownership and operation of United States flag vessels on the high seas. Crest’s first employee was William McHenry, who was hired on September 1, 1982, as Crest’s fleet manager. Immediately prior to his employment by Crest, Mr. McHenry was a port captain and operations manager for Trinidad. When Mr. McHenry moved from Trinidad to Crest, he continued to be covered under the same savings and health plans. Mr. McHenry’s titles with Crest were personnel manager and assistant to the vice president of operations. The remainder of Crest’s , management staff was assembled from either outside sources or the ranks of Apex Oil.

9. Crest began operations by purchasing two vessels, the “New York Getty” and the “Delaware Getty”, from the Getty Oil Company. Said vessels were subsequently renamed the “Beaujolais” and “Pommard”, respectively. Said vessels were purchased for Crest by an entity known as Apex Marine, Inc. Because of the sale of said vessels, the Getty Oil Company intended to lay off a number of licensed and unlicensed personnel aboard said vessels. Getty Oil Company furnished Crest with a list of employees that were going to be laid off and Crest then made inquiries among both licensed and unlicensed personnel to ascertain whether they desired employment with Crest. Crest actually manned said vessels almost entirely with unlicensed personnel laid off by Getty Oil Company. Said unlicensed employees of Getty Oil Company were represented by the Getty Tanker-men’s Association. In the fall of 1982, the Crest Tankermen’s Association was formed among the unlicensed employees aboard the Beaujolais and Pommard and said Association demanded and received recognition by Crest as the bargaining representative of said employees. A collective bargaining agreement was executed on October 29, 1982, between the Crest Tankermen’s Association and Crest.

10. On November 1, 1982, Crest began to operate with the two vessels it purchased from Getty Oil Company. A few days later Crest began to operate a third vessel which was purchased from a subsidiary of Gulf Oil Company. The vessel purchased from Gulf Oil Company, the “Gulf Crest”, was renamed the “Montrachez”. Although the unlicensed employees of Gulf Oil Company aboard the Gulf Crest were laid off as a result of the sale, Crest did not seek out said employees to man the Montrachez. The unlicensed employees aboard the Gulf Crest were represented by NMU. The Montrachez was purchased from Gulf Oil Company in the name of Apex Oil for Crest.

11. Clayton was formed in December of 1982. Clayton is a “paper” company. On January 26, 1983, Clayton agreed to purchase two vessels, the “Centimilion” and the “St. Emillion”, from Grand Bassa Tankers, Inc., a subsidiary of Cities Service Oil Company. Said vessels were renamed the “Allegiance” and the “Banner”, respectively. Said vessels were purchased with “working capital” obtained from Apex Holding. Prior to their purchase by Clayton, said vessels had been operated by Trinidad under a management contract with Grand Bassa Tankers, Inc. After their purchase by Clayton, said vessels were operated by Crest. Crest did not offer employment to any former Trinidad crew member aboard the Allegiance and Banner when Crest began operating said vessels.

12. In accordance with the right of first refusal under the management contract between Grand Bassa Tankers, Inc. and Trinidad, Grand Bassa Tankers, Inc. made several offers of sale to Trinidad. Upon the instructions of P.A. Novelly (hereinaftér “Novelly”), Trinidad rejected said offers and the lowest offer was ultimately accepted by Clayton. However, prior to their purchase in January, 1983 by Clayton, both the Allegiance and the Banner were out of operation and were in “lay up”. In addition, both vessels had been on the market for sometime prior to their lay up.

13. Subsequent to its purchase by Clayton, the Banner was sailed on one voyage and then sold for scrap. Thereafter, Clayton purchased the former “Gulf Oil” from Gulf Oil Company and renamed it the “Chablis”.

14. On November 5, 1982, Shannon J. Wall, President of NMU, advised Novelly that NMU was aware of the fact that Apex Oil had purchased two vessels from the Getty Oil Company and one vessel from a subsidiary of Gulf Oil Corporation and that the NMU had not been asked to crew said vessels. Mr. Wall advised Novelly that the collective bargaining agreement between NMU and Trinidad applied to the purchase of said vessels and that in the event of Apex Oil’s failure to apply said contract to said vessels, the NMU intended to file unfair labor practice charges with the National Labor Relations Board and to seek arbitration on the issue.

15. On March 31, 1983, NMU filed with the National Labor Relations Board charges of discrimination in employment against Clayton, alleging that Clayton had refused to hire the former NMU crews of the Allegiance and Banner because of their union affiliation. On April 15, 1983, NMU amended its charges to add a claim that Clayton had engaged in a refusal to bargain. On June 22, 1983, NMU, by its attorney, withdrew said charges against Clayton. On June 29, 1983, the Regional Director of Region 12 of the National Labor Relations Board in Tampa, Florida, approved NMU’s withdrawal of said charges.

16. By letter dated April 19, 1983, NMU notified Trinidad, “Apex Tankers Co.”, Crest, and Clayton, that Crest and Clayton were breaching Article I, Section 1 of the Collective Bargaining Agreement between NMU and Trinidad. NMU demanded arbitration.

17. On May 20, 1983, Jessie Simons Arbitration’s, Inc. notified Trinidad, “Apex Tankers Co.”, Crest, Clayton and NMU that it had scheduled the arbitration demanded by NMU for July 13 and 14, 1983, at the offices of the American Arbitration Association in New York City, New York.

18. Crest and Clayton filed this suit on June 21, 1983.

19. At the time of trial, none of the five (5) vessels which Trinidad had been operating on charter to Apex Oil in the summer of 1982, were operating. By the time of trial, three (3) of said vessels had been sold for scrap and two (2) had been laid up. However, at the time of trial, Crest was operating five (5) vessels under continuous voyage charters to Apex Oil. These vessels included the two owned by Crest, the Montrachez and the Beaujolais, the two owned by Clayton, the Allegiance and the Chablis, as well as a fifth vessel, the “Dina”, owned by an unaffiliated company, the Los Angelas Steamship Company. By the time of trial, the Pommard and the Banner had been scrapped.

20. The Directors of Crest, Clayton, Trinidad, Apex Shipping, and Apex Holding are the same: Samuel R. Goldstein, P.A. Novelly, and Israel Treiman. Samuel R. Goldstein is Chairman of the Board of Trinidad, Crest, Clayton, Apex Shipping, and Apex Holding.

21. P.A. Novelly is President of Trinidad, Crest, Clayton, Apex Shipping, Apex Holding, and Apex Oil. As President of these companies, Novelly makes all major financial decisions for all of them. Novelly also hires and directs the designated chief operating officers of Trinidad and Crest. Novelly determines when a vessel owned by Trinidad, Crest or Clayton is to be scrapped. Novelly made the decision that Clayton, rather than Trinidad, should buy the Allegiance and the Banner from Grand Bassa Tankers, Inc.

22. A. Bryant Foster is an Executive Vice President of Trinidad, Crest, Clayton, Apex Shipping and Apex Holding.

23. Robert W. Ziha is Secretary of Crest, Clayton and Apex Holding, and an Assistant Secretary of Trinidad and Apex Shipping.

24. Thomas Cornwall is the Executive Vice President of Crest and Clayton. He is also Apex Oil’s chartered ship broker. In this latter capacity, his subordinates issue sailing orders to the vessels under Apex Oil charter, instructing them where to pick up and discharge cargo. The only U.S. flag tankers which have been under charter to Apex Oil while Cornwall has been its chartered ship broker have been those operated by Trinidad and Crest.

25. Apex Oil has, on occasion, initially designated a Crest vessel to take cargo and then substituted a Trinidad vessel to take said cargo, and vice versa. Apex Oil, as a chartering party, has the prerogative to designate which vessel carries which cargo.

26. The day-to-day operations of Crest and Trinidad are not interrelated. Crest and Trinidad do not perform any work for each other. There is little or no routine or other official contact between the day-today management and staff of Crest and Trinidad. Crest and Trinidad operate out of separate ports: Crest operates out of St. Louis, Missouri, and Trinidad operated out of Philadelphia, Pennsylvania, and Long Beach, California. Trinidad now maintains its headquarters in St. Louis County, Missouri, but its offices are at a different location than Crest’s. Moreover, Trinidad maintains its operation staff in Philadelphia to manage the Military Sealift Command vessels and its Long Beach officers as home port for commercial vessels on the west coast. Crest maintains no staff outside of St. Louis County, Missouri. The vessels operated by Crest maintain their own registration, safety certificates, classification documentation and other necessary certification on board ship with copies in St. Louis. Trinidad vessels are registered in Wilmington, Delaware. Crest and Trinidad maintain separate books and records, separate bank accounts and separate lines of credit. Crest and Trinidad each constitute a separate profit center and each is responsible for reporting its operating results to its parent. Crest and Trinidad have separate operating personnel. There is no interchange of operations management, or supervisory or operations personnel between Crest and Trinidad. Crest and Trinidad’s unlicensed employees are represented by separate unions functioning under separate union contracts. Crest reimburses Apex Oil for salaries paid by Apex, office space used by Crest, and other related office expenses. Trinidad also pays its own rent, office expenses, and its own management salaries from its own payroll. Crest and Trinidad are separately responsible for decisions regarding repairs to vessels, dry docking, and machinery overhaul. Crest and Trinidad separately provide logistical support necessary for the operation of their vessels. Each company separately arranges for its own agents at port, port financing, as well as port safety and liaison with the charterer. Crest and Trinidad each has its own purchasing department.

27. The scope of operations performed by Crest and Trinidad are not identical. All of the vessels operated by Crest have been and are under charter to Apex Oil. Trinidad’s operations, on the other hand, have been and are more extensive. Prior to Crest’s creation, Trinidad operated several ships under charter to Apex Oil. In addition, Trinidad operated several vessels for the Military Sealift Command, operated under consecutive voyage charters to Apex Oil subsidiaries, and operated vessels under consecutive voyage charters to Standard Oil Company and Atlantic Richfield under a joint venture agreement with Sun Oil Company. At the present time, Trinidad is not operating any vessels under charter to Apex Oil, but its other operations are extant. Crest does not solicit any business for itself, because its vessels are under charter to Apex Oil. Trinidad may secure business by Apex Oil charter, Government contract, or by management contract to other oil companies. Crest vessels generally ply a trade route consisting of the U.S. Gulf and Florida to northeast trade ports and occasionally, Caribbean ports. Trinidad operates on both the east and west coasts of the United States and plies trade routes in Europe and the Far East. There is a significant difference in the size of the ships operated by Trinidad and those operated by Crest. Trinidad’s ships that were chartered by Apex Oil were “T-2’s”, which have a capacity of 26,000 long tons. Crest’s fleet, on the other hand, consists of one “T-2” and four “jumboized T-2’s”, which have a capacity of 30,000 long tons.

28. The labor relations operations of Crest and Trinidad are separate. Crest and Trinidad hire their own seagoing personnel. The first contract between Crest and the Crest Tankerman’s Association was drafted initially by a Crest executive and then negotiated by an attorney on the staff of Apex Oil. Trinidad’s most recent contract with NMU was negotiated on behalf of Trinidad by the Tanker Services Committee, a multiemployer association of which Trinidad is a member and as such paid $80,000.00 in annual dues. The Tanker Services Committee is an association of independently owned corporations who join together for the purpose of collective bargaining with NMU. The wage reopener contained in the contract between Crest and the Crest Tankermen’s Association was negotiated in 1983 on behalf of Crest by the Crest Vice President of Operations and Fleet Manager. Grievances and labor disputes are handled separately by Crest and Trinidad. Grievances and disputes are handled with the Crest Tankermen’s Association on behalf of Crest by either the Fleet Manager or the Vice President of Operations. All disputes under the Crest Tankermen’s contract are subject to resolution pursuant to the terms of the grievance machinery contained therein. Trinidad has its own separate grievance machinery including the use of an arbitrator mutually selected by the Tanker Services Committee and NMU. There is no substantial continuity or overlap between the employees of Trinidad and the employees of Crest.

29. Apex Holding files a consolidated tax return covering all of its subsidiaries, including Crest, Clayton, and Trinidad.

30. Apex Holding has a legitimate purpose for placing the ownership of vessels under charter to Apex Oil in separate corporate entities, namely to reduce exposure to risk and limit liability for accidents, etc.

31. Business conditions in the shipping industry are depressed.

32. There was evidence presented at trial which suggested that Crest officials and supervisors were opposed to hiring NMU sympathizers. There was also evidence that Novelly is less than friendly towards NMU. Novelly does not respond to letters from NMU President Shannon Wall. Mr. McHenry has stated that Crest did not hire employees from the traditional maritime union halls because it has a “different philosophy”.

CONCLUSIONS OF LAW

This is an action by Crest and Clayton to obtain a judgment declaring that they are not parties to, nor bound by, the collective bargaining agreement between NMU and Trinidad, as well as injunctive relief against NMU’s efforts to compel Crest and Clayton to arbitrate. On April 19, 1983, NMU, relying on the accretion clause in its contract with Trinidad, demanded that Crest and Clayton arbitrate NMU’s claim that Crest’s unlicensed seagoing personnel were covered by the NMU/Trinidad contract on the theory that Crest and Clayton were “affiliates” of Trinidad within the meaning of said contract. See Findings of Fact No. 16. For the reasons stated in this Court’s Order and Memorandum of August 23, 1983, this Court has jurisdiction over plaintiffs’ claim under § 301(a) of the Labor Management Relations Act, as amended, 29 U.S.C. § 185(a). Crest Tankers, Inc. v. National Maritime Union of America, No. 83-1481C(1) (E.D.Mo., August 23, 1983).

An employer is not under an obligation to arbitrate a labor dispute unless it is bound by an agreement to arbitrate said dispute in a collective bargaining agreement. Maas v. Dubuque Packing Company, No. 84-1388, slip op. at 8 (8th Cir., February 8, 1985) (Gibson, J., concurring in part and dissenting in part); Morello v. Federal Barge Lines, Inc., 746 F.2d 1347, 1350 (8th Cir.1984). As this Court explained in the prior Order and Memorandum, a non-signatory employer may be bound by a collective bargaining agreement signed by another employer, and thus bound by any agreement to arbitrate found therein, if two independent findings are made: first, that the nonsignatory employer and the signatory employer constitute a “single employer”; and second, that the employees of both employers constitute a single appropriate bargaining unit. Service, Hospital, Nursing Home and Public Employees Union, Local No. 47 v. Commercial Property Services, Inc., 755 F.2d 499, 501 (6th Cir.1985); Iowa Express Distribution, Inc. v. National Labor Relations Board, 739 F.2d 1305, 1310 (8th Cir.1984); Carpenters Local Union No. 1846 v. Pratt-Farnsworth, 690 F.2d 489, 505 (5th Cir.1983). Pursuant to this Court’s prior Order and Memorandum, the trial in this action focused solely on the single employer issue. Accordingly, this Court does not express an opinion on whether this Court has subject matter jurisdiction to consider the bargaining unit issue nor does this Court express an opinion on the merits of said issue. See Brotherhood of Teamsters Local No. 70 v. California Consolidators, Inc., 693 F.2d 81 (9th Cir.1982), cert. denied, — U.S. -, 105 S.Ct. 263, 83 L.Ed.2d 199 (1984) (White, J., dissenting).

In its brief, NMU argues that the alter ego doctrine, in addition to the single employer doctrine, is applicable to this case. However, the reported decisions make it clear that the two doctrines are distinct and that the alter ego doctrine does not apply in the case at bar. The single employer doctrine was created by the National Labor Relations Board to allow the Board or a court to treat “two or more related enterprises as a single employer for purposes of holding the enterprises jointly to a single bargaining obligation or for the purpose of considering liability for any unfair labor practices.” Iowa Express Distribution, Inc., at 1310 (citation omitted). The alter ego doctrine, on the other hand, “focuses on whether one business entity should be held to the labor obligations of another business entity that has discontinued operations.” Id. (citation omitted) (emphasis added). Although similar factors are considered in applying both doctrines, “[t]he essential inquiry under the alter ego analysis is ‘[w]hether there was a bona fide discontinuance and a true change of ownership ... or merely a disguised continuance of the old employer.’ ” Id. (citation omitted). See also Pratt-Farnsworth, 690 F.2d at 504-09. The alter ego doctrine has no applicability to the case at bar, because Trinidad is not a discontinued employer. See Findings of Fact Nos. 2, 27. Thus, the appropriate analytical framework is the single employer doctrine.

Four factors must be considered to determine whether two distinct business entities constitute a single employer. These factors are: 1) interrelation of operation; 2) common management; 3) centralized control of labor relations; and 4) common ownership or financial control. Iowa Express Distribution, Inc., at 1310; Pratt-Farnsworth, 690 F.2d at 504-05. No one of these factors is controlling. Id. “Single employer status ultimately depends on ‘all the circumstances of the case’ and is characterized as an absence of an ‘arm’s length relationship found among unintegrated companies’.” Pratt-Fansworth, 690 F.2d at 505 (citations omitted). Application of these factors to the facts of this case presents a close question. There is evidence which supports both parties with respect to almost every factor.

The first factor that must be considered is the degree of interrelation between the operations of Crest and Trinidad. In the opinion of this Court, the degree of interrelation between Crest and Trinidad is not great. Although the work being done now by Crest under charter to Apex is similar to the work that was done by Trinidad under charter to Apex, prior to the scrapping and laying up of several of Trinidad’s vessels, the scope of Trinidad’s operations is greater than Crest’s. See Findings of Fact No. 27. Trinidad’s trade route coverage is also much greater than that of Crest. Id. The size of the ships operated by the two companies is also significantly different. Id. There is no intermingling of the employees of Crest and Trinidad. This Court does not deem it significant that, during the period when there was enough business to keep both Crest’s and Trinidad’s vessels working for Apex Oil, a Crest vessel was occasionally substituted for a Trinidad vessel to take cargo, and vice versa. See Findings of Fact No. 25. More importantly, almost every aspect of the day-to-day management and operations of Crest and Trinidad are entirely separate. See Findings of Fact No. 26. This Court’s conclusion that there is no significant degree of interrelation of operations between Crest and Trinidad, is not defeated by the fact that Thomas Cornwall is the common source for allocation of cargos and routes to vessels under Apex charter. Crest and Trinidad are nevertheless kept at an arm’s length from each other.

The second factor that must be considered is the extent to which the management of Crest and Trinidad is common. It is true that the directors and several of the officers of Crest, Clayton and Trinidad are shared. See Findings of Fact Nos. 20, 21, 22, 23, and 24. However, the control of operations and the supervisors of day-today operations and management are entirely separate. See Findings of Fact No. 26.

The third factor, labor relations, is concerned with the extent to which the labor relations operations of the two firms are integrated. In the case at bar, the labor relations operations of Crest and Trinidad are separate. See Findings of Fact No. 28. There is no continuity between the employees of Trinidad and those of Crest. The unlicensed seagoing personnel of both companies operate under separate collective bargaining agreements with separate unions. Moreover, the day-to-day hiring, firing, and handling of grievances and labor disputes are separate. Id. Although Novelly and other common directors and officers of Crest and Trinidad have the authority to dictate labor relations policies, there was insufficient evidence that such authority had, in fact, been exercised.

The final factor is whether or not there is common ownership. In this case plaintiffs admit that Crest, Clayton and Trinidad are commonly owned by Apex Holding. See Findings of Fact Nos. 1, 2, 3, and 4. One distinction, of course, is that Trinidad is held by Apex Shipping for Apex Holding, whereas Crest and Clayton are held directly by Apex Holding. See Findings of Fact No. 4.

It is clear that there is sufficient evidence to support both a finding that Crest and Trinidad constitute a single employer and a contrary finding. On balance, this Court concludes that Crest and Trinidad do not constitute a single employer for purposes of holding Crest and Clayton to the obligations of Trinidad’s collective bargaining agreement with NMU. In terms of both form and function, Crest and Clayton are operated as entities which are separate and distinct from Trinidad. This Court is not convinced that Crest and Clayton were created for improper purposes. See Findings of Fact No. 30. Moreover, it is not surprising that Crest’s vessels are operating and Trinidad’s vessels are not, because Crest’s vessels are able to carry greater loads. See Findings of Fact No. 27. It is not fatal to plaintiff’s case that persons at the top of the “pyramid” have the power to affect Trinidad and Crest as they see fit. This is true of almost every integrated business where there is a parent with several subsidiaries. Ultimate control at the very top, standing alone, should not and does not result in two subsidiaries being treated as a single employer. Here, those at the top keep Trinidad and Crest at “arm’s length” apart. Thus, this Court holds that Crest, Clayton and Trinidad do not constitute a single employer and plaintiffs are entitled to a judgment declaring that they are not bound by Trinidad’s collective bargaining agreement with NMU or Trinidad’s agreement to arbitrate with NMU.

NMU urges this Court to follow the recent decision by Justice Maresca of the Supreme Court of New York, County of New York, in District No. 1-Pacific Coast District, Marine Engineers’ Beneficial Association, AFL-CIO v. Trinidad Corporation, No. 92884-83 (November 14, 1984). In that case, to which Crest and Clayton were not parties, Justice Maresca confirmed an arbitration award in favor of “MEBA”, the union representing Trinidad’s officers and engineers. The arbitrator ruled that Crest, Clayton and Trinidad are alter egos and constitute a single employer. In addition, the arbitrator ruled that Crest and Clayton are subsidiaries or affiliates within the meaning of Trinidad’s contract with MEBA. This Court declines to follow Justice Maresca’s decision, because it does not provide any meaningful discussion of why Clayton and Crest are the alter egoes of Trinidad and together constitute a single employer.

This Court notes that plaintiffs seek injunctive relief that will extend to Trinidad and the entire Apex chain of ownership, as well as Crest and Clayton. This Court declines to go that far. The sole issue presented to and decided by this Court is whether, by virtue of the single employer doctrine, Crest and Clayton are bound by the Trinidad/NMU agreement to arbitrate. Having answered this issue in the negative, it does not follow that Trinidad, or any of its parent corporations, are not bound to arbitrate or otherwise negotiate with NMU with respect to the operations of Clayton and Crest. See Commercial Property Services, Inc., at 501. Accordingly, this Court’s permanent injunction is directed only to NMU’s efforts to compel Crest and Clayton to arbitrate.


source: Caselaw Access Project

author: SACHS, District Judge.

license: Public Domain

text:
    Barbara A. HESS, Patrick F. Samples, Larry G. DeClue, Clyde L. Daniels, David McClain, Robert E. Appleby and David Lee Merritt, on behalf of themselves and all others similarly situated, Plaintiffs, v. The ST. JOSEPH POLICE PENSION FUND, an unincorporated association and its trustees and members; Marvin Atkins III; James R. Hays; Ronald E. Fisher; Donald Conroy; Tony Marsola; Mary S. Parker, Director of Finance; James O. Turner, City Attorney; Walter T. Welsh, City Clerk; and The City of St. Joseph, Missouri, Trustees of The St. Joseph Police Pension Fund, individually, jointly, and as class representatives of the members, contributors, officers, directors, trustees, stakeholders and beneficiaries of said unincorporated association, Defendants.
    No. 83-6074-CV-SJ.
    United States District Court, W.D. Missouri, St. Joseph Division.
    April 4, 1985.
    Ronald M. Sokol, St. Joseph, Mo., for plaintiffs.
    Richard Steinberg, Asst. City Atty., St. Joseph, Mo., for defendants.
   ORDER

SACHS, District Judge.

As stated in the Order of January 14, 1985, the parties have agreed to submit this case on the basis of exhibits heretofore offered into evidence, the stipulation of facts, the pretrial order, relevant statutes, constitutional provisions, case law, and the parties’ briefs. The parties have now completed all briefing. Thus, this case is ready for resolution.

Prior to November of 1961 St. Joseph, Missouri, operated pursuant to § 72.010, RSMo (repealed 1975) as a first class city. Stipulation of Facts No. 1 (filed October 12, 1984) (“Stip.”). While operating as a first class city the St. Joseph Police Department and the City of St. Joseph established the St. Joseph Police Pension Fund (“Fund”) pursuant to §§ 86.510-86.577, RSMo. (Stip. 2.)

At the election of October 31,1961, certified November 6, 1961, St. Joseph adopted its first city charter. (Stip. 3.) Section 7.8 of that charter provided that “[a]ll existing retirement plans shall be continued. Additional retirement plans may be established for any department or agency as authorized by the Constitution or by law, but only after submission to and adoption by the voters.” (Stip. 4.) As of the date of this opinion, no election has subsequently been held concerning adoption of a police pension fund. (Stip. 5.)

No written rules, regulations, standards, or policies have been adopted by the Fund’s Board of Trustees (“Board”) subsequent to the adoption of the first charter. (Stip. 6.) St. Joseph police officers who were in the Fund at the time of the adoption of the first charter were required to continue in the Fund thereafter. (Stip. 7.) All physically qualified officers joining the St. Joseph Police Department after the adoption of the first charter have been required to participate in the Fund. (Stip. 8.) Some physically disqualified officers, however, were admitted to the Fund on “waivers.” Id. Officers over age or physically disqualified from the Fund have been provided with alternate pension rights under the Missouri Local Government Employees Retirement System (“LAGERS”) program (§ 70.605 RSMo) which was open to other city employees. Id. Police officers who qualified for the Fund have not been allowed to participate in the LAGERS program. Id. The LAGERS program was created in 1967, L.1967, p. 141, § 2, and is designed to apply, to local employees not included in “any other plan similar in purpose.” § 70.600(10)(a), RSMo. Not all police officers have been advised prior to their employment that participation in the Fund was required. Id. This failure to advise appears to have been inadvertent; there is no record of any such unadvised officers having made an objection at the time deductions for the benefit of the Fund were taken from their paychecks. Pretrial Order at 4 (filed December 14, 1984). All Fund participants have been required to contribute to the Fund from their gross pay. (Stip. 8.) The St. Joseph Finance Department has routinely withheld contributions from the Police Department payroll for the benefit of the Fund. Id. The City has also contributed to the Fund. Id. All donations and receipts from vending machines at the Police Department have routinely been deposited in the Fund. (Stip. 9.) For the last six years rewards have been deposited in the Fund. Id.

Officers leaving the Police Department and Fund with less than five years service have been denied refund of any monies contributed or interest thereon. (Stip. 10.) A complete limitation on refund rights for short-term police force employees was initially enacted in 1961. See § 86.523 RSMo and Historical Note in 6 V.A.M.S. Officers leaving the Police Department and Fund with more than five years and less than twenty-five years of service have been refunded two-thirds of their contributions, but have been denied refund of the balance or interest thereon. (Stip. 11.) In the discretion of the Board, officers returning to the Police Department have been allowed to “tack” periods of service in the Police Department and Fund. (Stip. 12, Pretrial Order at 4.)

Other City employees participating in the LAGERS program are paid their accumulated contributions in full when their City employment ceases, unless they retire and receive benefits thereby. (Stip. 13.) LAGERS participants may not receive benefits until they reach age sixty-five. Pretrial Order at 5. Fund participants need only serve twenty-five years in the Police Department, regardless of age, before receiving Fund benefits. Id.

All lay members of the Board, as reflected by the Board’s minutes, correspondence, and public utterances, and the City Attorney’s office as legal advisor to the Fund, believed and publicly represented that §§ 86.510-86.577 RSMo governed the operation of the Fund until advised of the theories and authorities asserted by plaintiffs’ counsel in late 1982 and early 1983. Pretrial Order at 3-5.

The St. Joseph City Council and the Board have never received any actuarial or other form of evidence justifying differences in refund policies to members of the Fund based upon years of service. Id. Defendants have no actuarial or other evidence justifying the existing differences in refund policies of the Fund. Id.

The only ordinance adopted by the St. Joseph City Council concerning the Fund is § 2-88. (Stip. 14.) Subsections (a) and (b) predate the first city charter. Id. Subsection (c) was enacted on December 6, 1976. Id. City ordinance § 2-87, also predating the first charter, authorizes the Director of Finance to withhold pension fund assessments from Fund members’ wages. (Stip. 15.)

On August 4, 1981, an election was held adopting a new charter for the City of St. Joseph. (Stip. 16.) The new charter included the following section:

16.2 Ordinances to Remain in Force.
All ordinances, regulations and resolutions in force at the time this Charter takes effect, which are not inconsistent with the provisions of this Charter, shall remain and be in force until altered, modified, or repealed by or under authority of this Chapter or ordinance.

Id.

Civilian employees of the Police Department are denied membership or participation in the Fund and are LAGERS participants. (Stip. 17.)

I.

In this class action plaintiffs, former police officers, contend that they were denied their property without due process of law; that they were denied equal protection under the law; and that they have had their property taken for public use without due process of law or just compensation by certain acts of defendants under color of state law in violation of the protections guaranteed plaintiffs under the Fifth and Fourteenth Amendments to the United States Constitution. Specifically, plaintiffs claim as damages their contributions to the Fund while employed as St. Joseph police officers together with interest on their contributions. These contributions have been withheld either in whole or in part: Officers leaving the Police Department within five years received no refund and officers leaving after five years received a refund of two-thirds of the amounts they had contributed. Neither group received interest on their contributions. The action is for damages pursuant to 42 U.S.C. § 1983 and attorney’s fees pursuant to 42 U.S.C. § 1988.

The federal issue before the court is whether the refund policies of the Fund deny plaintiffs due process or equal protection under the law. The Fifth Circuit in Muzquiz v. City of San Antonio, 520 F.2d 993 (5th Cir.1975), aff’d on other grounds, 528 F.2d 499 (5th Cir. en banc 1976), vacated and remanded, 438 U.S. 901, 98 S.Ct. 3117, 57 L.Ed.2d 1144, aff’d on original grounds, 586 F.2d 529 (5th Cir. en bane 1978) (per curiam), dealt with a similar question. In Muzquiz, former San Antonio policemen and firemen challenged the operation of the city’s firemen’s and policemen’s pension fund, and sought refunds of amounts they had contributed while they were serving. The opinion of Judge Tuttle ruled that none of the plaintiffs’ constitutional claims had merit. 520 F.2d at 1001. The court held first that

there was no “taking” which would require compensation. While the plaintiffs contributed to the Pension Fund, they in turn received protection in the event of death or disability far in excess of their contributions. This protection continued so long as they remained employed as firemen or policemen. They thus enjoyed the benefits of their contributions during the term of employment, and no other compensation is due them.

Id. Second, the court rejected plaintiffs’ argument that they were denied equal protection since other civil employees in San Antonio were not required to participate in the same pension program and since police and firemen in small Texas towns were not similarly affected by the Texas statute. Judge Tuttle wrote:

While it is true that the plaintiffs were treated differently from certain other public employees, it does not seem to us that this difference was in any way irrational or a violation of equal protection. Certainly as a class, policemen and firemen in San Antonio cannot be considered as a “suspect class,” thus requiring strict scrutiny of the legislative purposes for the difference in treatment. Nor could the interest the plaintiffs assert in their contributions to the Pension Fund be thought of as some fundamental personal right. Absent a suspect classification, or an infringement on some fundamental right, a classification is deemed permissible if it is found to have a “reasonable relationship” to a legitimate governmental interest.

Id. (Footnotes omitted.) Cf. Reeder v. Kansas City Board of Police Commissioners, 733 F.2d 543, 549 (8th Cir.1984) (remand ordered on equal protection issue involving important First Amendment rights—political contributions—because the type of classification involved “may require more than simply a rational basis to withstand constitutional attack.”). See also Beverlin v. Board of Police Commissioners of Kansas City, Missouri, 722 F.2d 395, 396 (8th Cir.1983).

In the case at bar, defendants assert that the distinction between those officers serving less than five years and those serving over five years “motivates those on the force to serve, after education and training, for at least five years. A trained officer, one who has served on a police force for several years, provides leadership for the remainder of the force and provides the public with the benefits of his long experience.” Defendants’ Trial Brief at 15. Defendants further explain the difference between members of the Fund and those in LAGERS: “Police officers can retire at a much earlier age under their plan than can the city employees under LAGERS ...” Id. at 16.

That these may be post hoc rationalizations is not dispositive. The distinctions were created by a statutory plan drawn by the Missouri legislature. See § 86.523, RSMo. Section 86.523 applies to first class cities and provides that

[i]n the event of resignation or dismissal from the force, any member who has faithfully served at least five years and less than twenty-five years in the department shall receive a refund from the pension fund of all moneys he may have heretofore paid in as salary contribution, except thirty-three and one-third percent of his salary contribution the member shall have paid into the fund, except that no refund shall be made from the fund because of the death or retirement of members or when the resignation or dismissal of a member was occasioned or required by the culpable misconduct of the member.

Section 86.537 allows for the trustees to pay disabled members from the Fund. Sections 86.540 and 86.543 provide for the pensions of police officers after twenty-five and twenty . years, respectively. Section 86.547 grants certain benefits to widows and dependent children. Finally, § 86.557 permits an appropriation for funeral expenses. All of these sections demonstrate the legislature’s special concern for police officers in first class cities. See Muzquiz, 520 F.2d at 1002. Although designed for one group of employees, the plan is not unreasonable and establishes no invidious distinctions. Simply because another session of the General Assembly adopted other reasonable provisions for other groups of municipal employees not already covered creates no constitutional violation. More uniform treatment of all municipal employees as a group may be legislatively desirable, but is not mandated by the Equal Protection Clause. At worst the difference in legislation can be characterized as an accident of history or an “historical anomaly” (Reply Brief, p. 4). Plaintiffs have not shown, however, that under current constitutional law the courts require that all new legislation in economic matters make perfect sense, when compared with other legislation on arguably related subjects. On the contrary, the test of reasonableness provides a wide target for legislative action.

Plaintiffs seem to argue that when the LAGERS system was enacted in 1967, previously existing pension plans for local employees should have been terminated as to new employees or revised to conform with the most current legislative view of ideal fairness and reasonableness. The difficulties in reopening and revising existing plans, without causing new controversy, may be judicially noticed. Where purely economic interests are involved, there appears to be neither reason nor authority for the court to conclude that the General Assembly in 1967 engaged in unconstitutional classification when it enacted legislation differing from and inapplicable to existing, reasonable local employee pension plans. Nor was the City of St. Joseph constitutionally required to change the police officers’ pension plan to bring it into conformity with a subsequent plan adopted for the benefit of other city employees.

Plaintiffs also argue, without citing authority, that it is constitutionally prohibited to have pension fund provisions for police officers in St. Joseph that differ from the provisions of such funds for police officers in larger and smaller communities in Missouri. The court is aware that a logically related claim of discrimination between police officers in different Missouri cities is pending before Chief Judge Wright, on remand from the court of appeals. Reeder v. Kansas City Board of Police Commissioners, 733 F.2d 543, 548-9 (8th Cir.1984). As Judge Arnold noted in remanding that case, the political contribution issue there presented involves First Amendment rights, and the justification “may require more than simply a rational basis to withstand constitutional attack.” The present case, however, is subject to less critical scrutiny, and different but reasonable laws can readily be justified by concepts of local self-government.

Home rule charters are adopted by cities and counties in Missouri for the very purpose of avoiding uniformity dictated from Jefferson City. City managers in Kansas City can thus be paid twicé as much, or half as much, as County Executives in St. Louis County. While the Missouri Constitution forbids “special legislation” (Art. III, § 40(30) as a refinement on the Equal Protection Clause, this has rarely prevented legislation tailored to the needs of a single community, or small group of municipalities, as perceived by local lobbyists and representatives. E.g. Walters v. City of St. Louis, 364 Mo. 56, 259 S.W.2d 377 (1953) (St. Louis earnings tax), aff’d. 347 U.S. 231, 74 S.Ct. 505, 98 L.Ed. 660 (1954) without expressly considering the issue of inter-city discrimination; Herald Co. v. McNeal, 511 F.Supp. 269, 275 (E.D.Mo.1981) (St. Louis closure of police records), summarily dispatching equal protection contention based on inter-city differences, without discussion, on remand from Herald Co. v. McNeal, 553 F.2d 1125, 1128 (8th Cir.1977). Variety is inherent in such specialized legislation, and unexplained differences do not, in themselves, violate the Equal Protection Clause.

When a comprehensive statute has inexplicable provisions, however, denying economic benefits to persons who are obviously similarly situated, an Equal Protection challenge may sometimes be sustained. Ranschburg v. Toan, 709 F.2d 1207 (8th Cir.1983). But where legislative classifications have been established, on a population basis or otherwise, differences in legislation governing the economic rights and obligations of public employees, in accordance with the classifications, doubtless can generally be given constitutional approval as “not invidious but sanctioned and indeed conventional.” Nashville, C. & St. L. Ry. v. Browning, 310 U.S. 362, 370, 60 S.Ct. 968, 972, 84 L.Ed. 1254 (1940) (sustaining variations in assessment rates for different classes of property).

Judicial insistence on a unifying rationale would defeat a major purpose of classification. Classifications are at least partly intended and are normally used to liberate governmental units from state-wide uniformity across classification lines.

II.

Plaintiffs further argue that all of the sections dealing with first class cities are inapplicable in this case since St. Joseph adopted a constitutional charter form of government. Plaintiffs cite Leoffler v. Kansas City, 485 S.W.2d 633, 634 (Mo.App.1972), vacated on other grounds, 557 S.W.2d 656 (Mo.App.1977), for the proposition that “where a statute refers to a first class city, it has no application to a city operating under the charter form of government.” In Leoffler plaintiff sued for damages for fire loss resulting from mob violence in Kansas City, based upon a statute which held that cities of the first or second class were liable for such damages. Kansas City, however, had elected a charter form of government, and was not within the statutory classification. Thus, the Missouri Court of Appeals held that the statute was not applicable. That case has no bearing on the present issue, where the procedures in question were adopted and used prior to adoption of the charter.

The precise issue presently before the court does not appear to have been previously decided by any Missouri court. Article VI, § 19(a) of the Missouri Constitution provides that:

[a]ny city which adopts or has adopted a charter for its own government, shall have all powers which the general assembly of the state of Missouri has authority to confer upon any city, provided such powers are consistent with the constitution of this state and are not limited or denied either by the charter so adopted or by statute. Such a city shall, in addition to its home rule powers, have all powers conferred by law.

Thus, if the Missouri legislature had conferred upon St. Joseph the power to withhold money from plaintiffs’ paychecks for purposes of the Fund and to condition refunds upon the plaintiffs working for five years, the Funds’ actions to so withhold and condition refunds would be lawful. Cf. State ex rel. Sanders v. Cervantes, 480 S.W.2d 888, 893 (Mo. banc 1972); State ex rel. St. Louis Fire Fighters Ass’n. Local No. 73, AFL-CIO v. Stemmler, 479 S.W.2d 456, 459-64 (Mo. banc 1972); In re Schrader, Mo. Att’y.Gen.Op. No. 219 at 3 (Oct. 27, 1972). This power to withhold and refund monies does not mean that the legislature could necessarily compel the Fund to follow certain policies. Article VI, § 22 of the Missouri Constitution states that:

[n]o law shall be enacted creating or fixing the powers, duties or compensation of any municipal office or employment, for any city framing or adopting its own charter under this or any previous constitution, and all such offices or employments heretofore created shall cease at the end of the terms of any present incumbents.

Whether the pensions involved in this case would fall within § 22’s proscription is an open question. See generally City of St. Louis v. Grimes, 630 S.W.2d 82, 83-85 (Mo. banc 1982), and cases cited therein. Although the court may have pendent jurisdiction over the issue, in the interests of comity and federalism, the court declines to make any dispositive ruling on the legality of the Fund’s operation under state law. Merely because the federal claims were not disposed of prior to the submission of this case on stipulated facts does not require the court to exercise pendent jurisdiction and adjudicate the state law claims. See Almendral v. New York State Office of Mental Health, 743 F.2d 963, 967 (2d Cir.1984); Weissinger v. White, 733 F.2d 802, 807 (11th Cir.1984). The court is satisfied that it is not abusing its discretion in dismissing the pendent state law claims. See Verdegaal Bros., Inc. v. Union Oil Co. of Calif., 750 F.2d 947, 950-52 (Fed.Cir.1984), and cases cited therein. Unnecessarily ruling on such claims would impact on pension rights of present and former police officers not parties to this litigation, and would deprive the losing parties of careful review of important state law issues by the appellate courts of Missouri. If plaintiffs desire a further ruling on the Fund’s legality, they should proceed in state court. Cf. Pennhurst State School & Hospital v. Halderman, 465 U.S 89, 104 S.Ct. 900, 920 & n. 34, 79 L.Ed.2d 67 (1984). Accordingly, it is hereby

ORDERED that judgment be entered in defendants’ favor on the federal constitutional claims. The court abstains from ruling on the legality of the Fund’s operations under state law.

      . Section 2-88 Pension fund for police.

      (a) Establishment. There shall be a pension fund for the pensioning of retired, crippled and disabled members of the police department and the dependent widows and minor children of deceased members.
      (b) Operation. Said pension fund shall be managed by a board of trustees with the director of finance of the city as the treasurer of said fund, and shall organize and operate in a manner and within the limits provided by the Constitution and laws of the state.
      (c) Municipal contributions. Beginning with the fiscal year 1977-1978 and each fiscal year thereafter, there shall be set apart and paid to the board of trustees of the police pension fund a municipal contribution which shall be equal per capita for each member of the police pension fund to the municipal contribution per capita for each member of the firemen’s pension fund to the board of trustees of the firemen’s pension fund.

        Id.

      . The court acknowledges that it might be possible to avoid a constitutional ruling by holding that the Fund operation is not authorized by state law, for reasons mentioned below. Because of the importance and delicacy of the state law issues, the court might defer this ruling while plaintiffs resort to the state courts. This would unduly delay resolution of a two-year old case. Moreover, it seems probable that the Fund operations enjoy at least de facto status, although conceivably being subject to future judicial direction for technical lack of current authority under state law. Buckley v. Valeo, 424 U.S. 1, 142-43, 96 S.Ct. 612, 693, 46 L.Ed.2d 659 (1976); Cherry v. City of Hayti Heights, 563 S.W.2d 72 (Mo.1978).

      . This is not to say that specialized legislation can always be sanctioned, against an Equal Protection challenge, where civil liberties are at stake, or the discrimination may be otherwise subject to strict scrutiny, as in the pending case before Chief Judge Wright.

      . In another civil rights suit involving a policemen’s pension fund, the Eighth Circuit held that "[a] merely erroneous application of a state statute to a particular case does not present a question of federal constitutional dignity.” Hirrill v. Merriweather, 629 F.2d 490, 496 (8th Cir.1980). See also Colon-Rivera v. Puerto Rico Dept. of Social Services, 736 F.2d 804 (1st Cir.1984).


author: NANGLE, District Judge.

text:
    Larry Darnell GRAVES, Plaintiff, v. NARCOTICS SERVICE COUNSEL, INC., et al., Defendants.
    No. 84-1990C(1).
    United States District Court, E.D. Missouri, E.D.
    April 4, 1985.

      Anthony S. Bruning, St. Louis, Mo., for plaintiff.
    Theodore Y. Blumoff, Clayton, Mo., Melinda Corbin, Asst. Atty. Gen., Jefferson City, Mo., for defendants.
   MEMORANDUM

NANGLE, District Judge.

This matter is before this Court on the motion to dismiss for failure to state a claim upon which relief can be granted, or alternatively for summary judgment filed by defendants Narcotics Service Counsel, Inc., Maliaka Horne, John Washington and Judy Miller. Defendants’ motion for summary judgment shall be granted because plaintiff has not alleged sufficient facts to establish that his claim arose under color of law pursuant to 42 U.S.C. § 1983.

Plaintiff has filed this action against the various above-named defendants under 42 U.S.C. § 1983. He complains that said defendants failed to properly treat him for his drug addiction and prematurely released him from a drug detoxification program. He had been ordered into the program by a state judge, as a condition of probation.

Plaintiff alleges and defendants confirm via affidavits that the Narcotics Service Counsel, Inc. (Nasco) is a non-profit corporation which serves as a halfway house, alcohol and drug rehabilitation facility, and employment facilitator for inmates, former inmates, parolees and non-inmates. Nasco receives funds from the federal government, the State of Missouri and private donations. The federal government reimburses Nasco for 100% of its costs in treating federal inmates. The State of Missouri provides for 90% of the costs incurred for state inmates, and provides for 60% of the costs to serve Nasco’s non-inmate clientele. Private contributions make up the difference. In addition to receiving funds from the government, Nasco is subject to a number of state regulations. It must be certified by the Department of Mental Health before it is eligible for referrals from a State. Defendants Maliaka Horne, John Washington and Judy Miller are Nasco employees.

Because defendants have submitted matters outside the pleadings, this Court shall treat the instant motion as a motion for summary judgment. Fed.R.Civ.P. 12(b). Under Rule 56 of the Federal Rules of Civil Procedure, a movant is entitled to summary judgment if he can “show that there is no genuine issue as to any material fact and that [he] is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c). See also Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 82 S.Ct. 486, 7 L.Ed.2d 458 (1962). In passing on a motion for summary judgment, a court is required to view the facts and inferences that may be derived therefrom in the light most favorable to the non-moving party. Buller v. Buechler, 706 F.2d 844, 846 (8th Cir.1983); Vette Co. v. Aetna Casualty and Surety Co., 612 F.2d 1076, 1077 (8th Cir.1980). The burden of proof is on the moving party and a court should not grant a summary judgment motion unless it is convinced that there is no evidence to sustain a recovery under any circumstances. Buller, 706 F.2d at 846. However, under Rule 56(e), a party opposing a motion for summary judgment may not rest upon the allegations of his pleadings but “must set forth specific facts showing that there is a genuine issue for trial.” Fed.R.Civ.P. 56(e). See also 10A Wright, Miller and Kane, Federal Practice and Procedure: Civil 2d, § 2739 (1983).

In view of the facts before the Court, plaintiff has not presented sufficient information to establish that the actions of the above-named defendants were under color of law. It is clear that in § 1983 cases, the under color of law requirement is identical to the state action requirement of the fourteenth amendment. Lugar v. Edmondson Oil Co., 457 U.S. 922, 928, 102 S.Ct. 2744, 2749, 73 L.Ed.2d 482 (1982); United States v. Price, 383 U.S. 787, 794 n. 7, 86 S.Ct. 1152, 1156 n. 7, 16 L.Ed.2d 267 (1966). Thus, this Court may consider the “state action” cases in resolving the question at hand.

The question of whether Nasco and its employees acted under color of law appears to be clearly controlled by two recent cases, Rendell-Baker v. Kohn, 457 U.S. 830, 102 S.Ct. 2764, 73 L.Ed.2d 418 (1982) and Blum v. Yaretsky, 457 U.S. 991, 102 S.Ct. 2777, 73 L.Ed.2d 534 (1982). In Rendell-Baker, the Supreme Court held that a non-profit private school with specialized programs for students with drug, alcohol, behavioral or other special problems was not sufficiently connected to the state to subject it to suit under § 1983. The school in Rendell-Baker received most of its students by referral from local school districts or the state Department of Mental Health. In addition, public funds accounted for at least 90% of the school’s budget, and the school was subject to detailed regulations on behalf of the state and the local school districts. The Court found that these factors were insufficient to establish a public function or symbiotic relationship between the school and the state. Id., 457 U.S., at 842, 102 S.Ct. at 2772. See also Jackson v. Metropolitan Edison Co., 419 U.S. 345, 353, 95 S.Ct. 449, 454, 42 L.Ed.2d 477 (1974); Burton v. Wilmington Parking Authority, 365 U.S. 715, 81 S.Ct. 856, 6 L.Ed.2d 45 (1961).

In Blum v. Yaretsky, 457 U.S. at 991, 102 S.Ct. at 2777, the Court considered the state action requirement for nursing homes which were extensively regulated by the state and which received more than 90% of their budgets from public sources. In Blum, the plaintiffs challenged the decisions of nursing home administrators to transfer patients from intensive treatment centers to less expensive facilities. The Court held that although state and federal regulations encouraged the nursing homes to transfer patients to less expensive facilities, the plaintiffs failed to show a sufficiently close nexus between the state and the challenged action so as to attribute defendants’ actions to the state itself. Id. at 1004, 102 S.Ct. at 2785.

The facts at hand are sufficiently similar to those of Rendell-Baker and Blum to compel the same result. Nasco is much like the nursing homes or the private school of these cases. Therefore, Nasco, along with its employees, Maliaka Horne, Judy Miller and John Washington are dismissed from the action because there are insufficient facts to establish that these defendants acted under color of law. The claim against Stephanie Brown shall remain, however.

ORDER

Pursuant to the memorandum filed herein this day,

IT IS HEREBY ORDERED that the motion to quash service on Attorney General of Missouri be and is granted and service of process upon the Attorney General of Missouri be and is quashed.

IT IS FURTHER ORDERED that this order shall not affect service upon defendant Stephanie Brown.

IT IS FURTHER ORDERED that the motion for summary judgment of defendants Narcotics Service Counsel, Inc., Maliaka Horne, John Washington and Judy Miller, be and is granted and the complaint against these defendants be and is dismissed.