author: BRATTON, Chief Judge.

text:
    The CITY OF EL PASO, By and Through its PUBLIC SERVICE BOARD, Ray Pearson, Carlton C. Homan, Jr., Louie Giallanza, Clinton E. Wolf, and Thomas D. Westfall, Plaintiffs, v. S.E. REYNOLDS, individually and as State Engineer of New Mexico, Paul G. Bardacke, individually and as Attorney General of New Mexico, Lalo Garza, individually and as New Mexico District Attorney for Dona Ana County, Defendants, Elephant Butte Irrigation District, the City of Las Cruces, New Mexico, and Stahmann Farms, Inc., Defendants-Intervenors.
    Civ. No. 80-730HB.
    United States District Court, D. New Mexico.
    Aug. 3, 1984.

      Vinson & Elkins, Harry M. Reasoner, Charles L. Berry, Houston, Tex., P.M. Schenkkan, Austin, Tex., Jeffrey Civins, Charles W. Schwartz, Houston, Tex., Scott, Hulse, Marshall & Fueille, James L. Gallagher, El Paso, Tex., Hinkle, Cox, Eaton, Coffield & Hensley, Harold L. Hensley, Jr., K. Douglas Perrin, Roswell, N.M., Paul L. Bloom, Washington, D.C., William Booker Kelly, Benjamin Phillips, White, Koch, Kelly & McCarthy, Sante Fe, N.M., for plaintiffs.
    Stephen D. Dillon, Jeffrey L. Fornaciari, Richard A. Simms, Sp. Asst. Attys. Gen., Douglas Meiklejohn, Asst. Atty. Gen., Water Resources Division, Santa Fe, N.M., Michael B. Browde, Albuquerque, N.M., for defendants Paul Bardacke and S.E. Reynolds.
    Ralph Wm. Richards, Weinbrenner, Richards, Paulowsky & Sandenaw, P.A., Las Cruces, N.M., for defendant/intervenor Stahmann Farms, Inc., and defendant Lalo Garza.
    Stephen A. Hubert, Steven L. Hernandez, James A. Roggow, Martin, Cresswell & Hubert, P.A., Lás Cruces, N.M., for defendant/intervenor Elephant Butte Irrigation District and defendant Lalo Garza.
    Ray E. Riordan, City Atty., Robert B. Kelley, Deputy City Atty., Las Cruces, N.M., for defendant City of Las Cruces.
   MEMORANDUM OPINION

BRATTON, Chief Judge.

The City of El Paso et al. filed this suit in 1980 seeking a declaratory judgment that New Mexico’s embargo on the out-of-state use of ground water, N.M.Stat.Ann. § 72-12-19 (1978), impermissibly burdened interstate commerce in contravention of the Commerce Clause of the United States Constitution. Defendants, the state officials responsible for enforcing New Mexico’s water laws, responded that it was the Rio Grande Compact and the state constitution, not the embargo statute, which blocked El Paso’s proposed ground water exports, making § 72-12-19 irrelevant. Defendants also denied that the embargo statute impermissibly burdened interstate commerce.

On January 17, 1983, the Court issued its Memorandum Opinion disposing of these issues. City of El Paso v. Reynolds, 563 F.Supp. 379 (D.N.M.1983). The Court rejected defendants’ interpretation of the Rio Grande Compact, held that it was immaterial whether the water embargo was based on the state constitution or a state Statute and found that the embargo violated the Commerce Clause. Accordingly, the embargo was declared unconstitutional, and defendants were enjoined from enforcing it.

On February 22, 1983, the New Mexico Legislature enacted S.B. 295 which repealed § 72-12-19, enacted provisions dealing with the out-of-state use of water and otherwise amended New Mexico’s water code. Following enactment of S.B. 295 defendants appealed this court’s decision to the Tenth Circuit. Defendants also urged the Court of Appeals to hold that S.B. 295 had rendered the entire case moot and to order the case dismissed. Instead, the Court of Appeals vacated the Judgment and remanded the entire matter “for fresh consideration of the respective rights and obligations of the parties in light of whatever intervening changes of law and circumstance are relevant.” The Court of Appeals gave this court “full and complete latitude” to enter a judgment appropriate to the new circumstances. Approximately two months after remand, in February, 1984, the New Mexico Legislature enacted a two year moratorium on new appropriations of ground water hydrologically connected to the Rio Grande below Elephant Butte. H.B. 12.

In its Second Amended and Supplemental Complaint, El Paso challenges the constitutionality of both S.B. 295 and H.B. 12. El Paso also asks the court to reenter those portions of the prior Memorandum Opinion dealing with the Rio Grande Compact and state constitutional issues, matters which defendants claim are moot. The parties now present for decision the issues of mootness and the facial constitutionality of S.B. 295 and H.B. 12. The factual background for this suit having been set out in the earlier Memorandum Opinion, the court turns directly to the issues.

Senate Bill 295

With § 72-12-19 the Court analyzed and applied Sporhase v. Nebraska, 458 U.S. 941, 102 S.Ct. 3456, 73 L.Ed.2d 1254 (1982) and other Supreme Court cases interpreting the Commerce Clause as they related to an absolute embargo on interstate commerce in ground water. On its face the statute now under review purports to effect a dramatic change in New Mexico law. By repealing § 72-12-19, New Mexico purportedly abjured its attempts to prohibit water exports. The present statute sets out conditions under which water can be exported. Commerce Clause analysis of this type of statute is materially different from that which applies to an explicit barrier to interstate commerce. The Court’s discussion in the prior Memorandum Opinion of the Commerce Clause as it applied to § 72-12-19 is not applicable to S.B. 295 and, therefore, is superseded by that which follows.

S.B. 295 made numerous changes in New Mexico’s water laws which are codified at different sections of its water code. It repealed § 72-12-19. It deleted the words “within the state of New Mexico” from § 72-12-18 which formerly provided that “all underground waters of the state of New Mexico are hereby declared to be public waters and to belong to the public of the state of New Mexico and to be subject to appropriation for beneficial use within the state of New Mexico.” S.B. 295 amended N.M.StatAnn. § 72-12-3 E (Cum.Supp.1984) by requiring the State Engineer to find that a proposed appropriation “is not contrary to conservation of water within the state and is not detrimental to the public welfare of the state” before granting a permit for a new appropriation for in-state use of ground water from a declared basin. Finally, S.B. 295 enacted N.M.Stat.Ann. § 72-12B-1 (Cum.Supp.1984) which purports to permit and regulate the out-of-state use of ground water. (The complete text of § 72-12B-1 is given at Appendix A.) The statute contains a severability provision.

It is the export statute, § 72-12B-1, to which El Paso addresses its constitutional challenge. It requires the State Engineer to find that El Paso’s export of water from the Mesilla and Hueco Bolsons “would not impair existing water rights, is not contrary to the conservation of water within the state and is not otherwise detrimental to the public welfare of the citizens of New Mexico” before he may approve the City’s applications. § 72-12B-1 C. The statute also directs the State Engineer to consider six additional factors when acting upon applications for export. § 72-12B-1 D. The first four factors involve an analysis of the effect of the proposed export on in-state shortages. The last two factors involve an evaluation of the applicant’s water supply and demand and the alternate sources of water supply available to the applicant in the state of import. The statute empowers the State Engineer to condition export permits and provides that applicants must comply with New Mexico’s water laws.

El Paso claims that the export statute is unconstitutional because it facially discriminates against water exportation in several respects. The parties have reserved for future proceedings all issues regarding the constitutionality of the statute as applied. The court first addresses the City’s contention that allowing exports only when they are “not contrary to the conservation of water within the state and [are] not otherwise detrimental to the public welfare of the citizens of New Mexico” unconstitutionally discriminates against interstate commerce.

The Conservation and Public Welfare Criteria

El Paso argues that the “conservation of water within the state” criterion prohibits the interstate use of water — water that is transported outside the State is not conserved or kept within it. It further argues that conversely, any in-state use of ground water, again by definition, cannot be contrary to the conservation of water within the state. If this simplistic interpretation of the conservation criterion in § 72-12B-1 C is correct, then that provision by itself would unconstitutionally prohibit export of any ground water from New Mexico. Hughes v. Oklahoma, 441 U.S. 322, 337, 99 S.Ct. 1727, 1736, 60 L.Ed.2d 250 (1979); El Paso v. Reynolds, supra. So interpreted, the criterion would also directly contradict the statement at § 72-12B-1 A that “under appropriate conditions the out-of-state transportation and use of [New Mexico’s] public waters is not in conflict with ... the conservation of its waters.” The remainder of the statute presumably would be superfluous under such an interpretation.

The conservation criterion cannot be interpreted so literally. Such a construction would be contrary to the rule that statutes should be construed so as to avoid unconstitutional results. 2A D. Sands, Statutes and Statutory Construction, § 45.11 (4th Ed.1973). By bringing the conservation criterion into conflict with the remainder of the statute which purports to permit water exportation, El Paso’s interpretation violates other precepts of statutory construction, i.e., the various provisions of a statute should be construed so as to be consistent with each other and so that no part is rendered superfluous. Atchison, Topeka & Santa Fe Railway Co. v. United States, 617 F.2d 485, 493 (7th Cir.1980); Hughes Air Corp. v. Public Utilities Comm’n, 644 F.2d 1334, 1338 (9th Cir.1981); National Insulation Transportation Committee v. Interstate Commerce Commission, 683 F.2d 533, 537 (D.C.Cir.1982). Any plausible interpretation of the conservation criterion which is consistent with these rules must be preferred over an interpretation that violates them. Such an interpretation is readily apparent.

By permitting exportation of ground water only when it is “not contrary to the conservation of water within the state” the statute acknowledges the fact that New Mexico cannot legislate as to ground water that is not found within the State. The phrase “water within the state” defines the water which is to be conserved; it does not dictate that all the State’s waters must be retained within its borders. This interpretation of the conservation criteria in § 72-12B-1 C brings it into alignment with the declaration at § 72-12B-1 A that the export of water may not be contrary to the conservation of New Mexico’s waters. If applied in a manner which does not unduly burden interstate commerce, the regulation of ground water appropriations for the purpose of promoting conservation is constitutionally permissible. Sporhase, 458 U.S. at 954-957, 102 S.Ct. at 3463-3465.

On its face, S.B. 295 appears to apply the conservation and public welfare criteria evenhandedly, at least to new appropriations. As amended, § 72-12-3 E, which deals with applications for new in-state appropriations of ground water from declared basins, now mirrors the requirements for approval of out-of-state appropriations in § 72-12B-1 C. Under both § 72-12-3 E and § 72-12B-1 C the State Engineer must deny applications for new in-state and out-of-state appropriations if the proposed use is “contrary to the conservation of water within the state [or] detrimental to the public welfare of the state.” El Paso contends that this evenhandedness is only superficial because for in-state uses these criteria are meaningless.

El Paso is correct that New Mexico’s general policy has been to put as much water to use within the State as soon as possible, the converse of conservation, at least as to underground waters. In addition, prior to the passage of S.B. 295, the constitution and laws of New Mexico have not been construed to authorize prioritization of uses of underground waters. All uses have been considered beneficial uses, equally beneficial to the public welfare, with the first in time having the better right. N.M. Const, art. XVI, Sections 2 and 3. Both parties take the position that S.B. 295 does not change these principles insofar as they apply to in-state water uses. Therefore, that issue need not now be addressed.

It is unclear at this time how the conservation and public welfare criteria Will be applied to in-state appropriations. New Mexico’s surface water statutes, though, contain a similar criterion: the State Engineer may deny permits for in-state use “if, in his opinion, approval thereof would be contrary to public interest.” N.M.Stat.Ann. § 72-5-7 (1978). Only one case has construed this criterion. Young & Norton v. Hinderlider, 15 N.M. 666, 110 P. 1045 (1910). In that case both the defendant Hinderlider and the plaintiffs Young & Norton had filed applications to appropriate the same water from the La Plata River. Both parties wished to construct a storage reservoir for the purpose of irrigating land in San Juan County. The reservoir proposed by Hinderlider was larger and contemplated the irrigation of almost three times the acreage as the Young project. Hinderlider’s application was first in time. The Territorial Engineer rejected Hinderlider’s application and approved Young’s, on the ground that Hinderlider’s proposed project was more expensive, that irrigation thereunder would cost more per acre than under the Young project, and that the Young project was more within the available water supply.

Hinderlider appealed to the Board of Water Commissioners which held that the statute authorized the Territorial Engineer to deny the first application and approve the second if he found that the Hinderlider project was contrary to the “public interest,” but it construed the “public interest” to encompass only health and safety concerns. The New Mexico Supreme Court also found that the prior appropriation doctrine did not prevent the Territorial Engineer from preferring the later application if the application which was first in time was contrary to the “public interest.” The court further found, however, that the “public interest” was not limited to public health or safety concerns but also permitted the Territorial Engineer to protect the public against fraudulent or excessively expensive irrigation projects. Young, 15 N.M. at 677-680, 110 P. 1045.

The State Engineer and state courts may consider the conservation and public welfare criteria equivalent to the “public interest” standard in § 72-5-7 and construe them accordingly. In light of the Young decision, which gives substance in one context to the “public interest” criterion, it cannot be concluded that the conservation and public welfare criteria are on their face meaningless as applied to in-state uses. But, however the criteria are applied to in-state water uses, the statute does not on its face direct the State Engineer to apply them differently to out-of-state uses.

El Paso contends that “the public welfare of the citizens of New Mexico” is an intrinsically discriminatory criterion precluding evenhanded regulation of water usage. This contention rests on the assumption that a state may not decide whether to allow any particular export on the basis of the public welfare of its own citizens.

The Supreme Court in Sporhase examined a public welfare criterion very similar to New Mexico’s. Neb.Rev.Stat. § 46-613.-01 (1978). The Court held that a facial examination of the first three conditions of Nebraska’s water export statute did not indicate that they impermissibly burdened interstate commerce. 458 U.S. at 957, 102 S.Ct. at 3465. One of those conditions was that “the withdrawal of the ground water requested ... is not otherwise detrimental to the public welfare.”

El Paso tries to distinguish the Nebraska and New Mexico public welfare criteria on the basis that the Nebraska statute did not limit the public welfare with which it was concerned to that of its own citizens. El Paso argues that the qualifying phrase “of the citizens of New Mexico” is intrinsically discriminatory because it directs the State Engineer to disregard the public welfare of noncitizens. There is no real distinction between the Nebraska public welfare criterion approved by the Supreme Court and the New Mexico public welfare criterion. Although not expressly stated, surely the public welfare the Nebraska statute attempts to protect is that of Nebraska’s citizens. The Supreme Court apparently assumed so. The Court’s conclusion that a state may, under certain circumstances, give a limited preference to its own citizens in the utilization of scarce water resources would have been unnecessary if the Nebraska statute did not regulate interstate water transfers according to the public welfare of the citizens of Nebraska.

The Court reached that conclusion in the process of applying the test set out in Pike v. Bruce Church, 397 U.S. 137, 142, 90 S.Ct. 844, 847, 25 L.Ed.2d 174 (1970) to determine the facial validity of the first three conditions of the Nebraska statute. First, the Court found that the Nebraska statute had the legitimate purpose of conservation and preservation of ground water. It then compared the first three conditions imposed on interstate transfers with the restrictions placed on intrastate transfers and found that they might well regulate evenhandedly. The Court went on to declare itself “reluctant to condemn as unreasonable measures taken by a State to conserve and preserve for its own citizens this vital resource in times of severe shortage.” The Court then discussed several factors which led to its reluctance and which must be considered in determining whether the burdens on commerce imposed by state ground water regulations are reasonable or unreasonable when weighed against the local interests they advance.

Although the court in Sporhase did not delineate the extent to which a state may prefer its own citizens in the utilization of water, it provided some guidelines. A state may not limit water exports merely to protect local economic interests. 458 U.S. at 956, 102 S.Ct. at 3464. This is true even though the health of the state’s economy has a direct bearing on the public welfare of its citizens. Baldwin v. Seelig, 294 U.S. 511, 522-523, 55 S.Ct. 497, 500, 79 L.Ed. 1032 (1935); West v. Kansas Natural Gas Co., 221 U.S. 229, 255, 31 S.Ct. 564, 571, 55 L.Ed. 716 (1911). Other than excluding . economic interests, however, the Court did not limit the public welfare interests a state may protect by regulating interstate commerce in ground water.

On its face, § 72-12B-1 C does not direct the State Engineer to deny applications for exports that would be detrimental only to the economic interests of New Mexico’s citizens. “Public welfare” is a broad term including health and safety, recreational, aesthetic, environmental and economic interests. Admittedly, except to the extent that it refers to bare human survival, every aspect of the public welfare has economic overtones. This does not mean that New Mexico may constitutionally exercise a limited preference for its citizens only when their survival is at stake. The Supreme Court in Sporhase did not equate “public welfare” with “human survival.” However, when the State exercises a preference for its citizens under the rubrie of protecting their public welfare and economic interests are implicated, the resulting burden on interstate commerce must be weighed against the putative, non-economic local benefits. Pike, 397 U.S. at 142, 90 S.Ct. at 847. If the public welfare criterion is used to effectuate simple economic protectionism, a per se rule of invalidity will be applied. Philadelphia v. New Jersey, 437 U.S. 617, 623-4, 98 S.Ct. 2531, 2535, 57 L.Ed.2d 475 (1978). If it is used to promote a legitimate purpose with only incidental burdens on interstate commerce, the Court must try to accommodate the competing local and national interests. Id. If equally effective, less burdensome alternatives are available, the State must use them. Hughes v. Oklahoma, 441 U.S. 322, 337, 99 S.Ct. 1727, 1736, 60 L.Ed.2d 250 (1979).

A state may favor its own citizens in times and places of shortage. Sporhase, 458 U.S. at 956-957, 102 S.Ct. at 3464-3465. Of course, this does not mean that a state may limit or bar exports simply because it anticipates that one day there will not be enough water to meet all future uses. Even some of the most water-abundant states predict shortages at some future date. The preference envisioned by the Supreme Court must be limited to the times and places where its exercise would not place unreasonable burdens on interstate commerce relative to the local benefits it produces.

On the other hand, it would be unreasonable to require a state to wait until it is in the midst of a dire shortage before it can prefer its own citizens’ use of the available water over out-of-state usage. A limited preference which could not be exercised until water resources were almost depleted would be no preference at all. If the limited preference is to be meaningful the states must be permitted to prefer local usage while there is still water to conserve. The proximity in time of a projected shortage, the certainty that it will occur, its predicted severity, and whether alternative measures could prevent or alleviate the shortage are all factors which must be weighed when balancing the local interests served by the exercise of a preference against the burdens it places on interstate commerce.-

New Mexico need not wait until the appropriate time and place of shortage arises to enact a statute limiting exports. The State may enact a law to provide for future contingencies. If facially valid, any constitutional attack on such a statute for violation of the Commerce Clause must await its application.

Other factors which inform the determination whether a state’s preference for its own citizens reasonably or unreasonably burdens interstate commerce are the degree to which the state claims public ownership of ground water and whether the availability of the water is in part the result of the state’s conservation efforts. Sporhase, 458 U.S. at 956-957, 102 S.Ct. at 3464-3465. These factors, as with those relating to the extent of shortages and the public welfare interests being protected, cannot be evaluated in a vacuum. Only when the defendants exercise a preference for the citizens of New Mexico can the local benefits from the preference be weighed against the resulting burden on interstate commerce.

El Paso argues that it is not necessary to await application of the statute because the evidence of legislative intent shows that the “public welfare” criterion directs the State Engineer to limit exports in order to minimize in-state shortages for local economic advantage. The City points to definitions of “the public welfare of the state of New Mexico” offered by the defendants and utilized by the court when the embargo statute was under review as evidence that the Legislature intended “public welfare” to include economic interests.

Prior to the passage of S.B. 295 the State Engineer testified, and defendants argued, that the public welfare of the citizens of New Mexico required the conservation and preservation of all available water for instate use. Defendants maintained that they could retain New Mexico’s ground water for any purpose related to the public welfare, including purposes which were predominantly economic. The Court found that this policy was impermissible economic protectionism. If defendants’ past construction of the “public welfare” were incorporated into § 72-12B-1 C, the statute would constitute an unconstitutional embargo. The Court must reject constructions which render the statute unconstitutional if there are plausible interpretations which avoid constitutional conflicts. 2A D. Sands, Statutes and Statutory Construction, supra.

S.B. 295 was obviously passed in direct response to the Court’s decision that “the policy of maximizing all ‘public welfare’ uses of water in New Mexico, and the furthering of that policy by prohibiting interstate commerce in ground water,” was unconstitutional. The New Mexico Legislature in S.B. 295 explicitly disavowed defendants’ position that the public welfare justified an absolute embargo. Defendants themselves now disavow their former position, arguing that the “public welfare” arguments they advanced when defending the embargo are irrelevant to the meaning of the term as used in S.B. 295. Under these circumstances, it cannot be assumed that the Legislature intended to incorporate the same impermissible economic protectionism into S.B. 295 that made § 72-12-19 unconstitutional. The term “public welfare” includes many interests, some of which the State may legitimately advance by regulating water exportation. The statutory use of the term is not forbidden since it can be narrowed by construction in this court, in the state administrative proceedings and in the state courts.

El Paso contends that the “conservation” criterion is also inherently discriminatory. As with the City’s attack on the “public welfare” criterion, this too rests on the assumption that New Mexico may not constitutionally regulate ground water withdrawals solely to minimize shortages within the State for the well-being of its citizens. El Paso relies on West v. Kansas Natural Gas Co., 221 U.S. 229, 31 S.Ct. 564, 55 L.Ed. 716 (1911) and Pennsylvania v. West Virginia, 262 U.S. 553, 43 S.Ct. 658, 67 L.Ed. 1117 (1923), where Oklahoma and West Virginia statutes, which had as their avowed purpose the “conservation” of natural gas within those states for the present and future use of their citizens, were held unconstitutional. The Court found that this was only “conservation” in a commercial sense, “ — the business welfare of the state, as coal might be, or timber.” West, 221 U.S. at 255, 31 S.Ct. at 571. The Court found it irrelevant that the states’ supplies of natural gas were rapidly waning and were no longer sufficient to supply local needs.

Sporhase carves an exception to this precedent when the states regulate scarce water resources. As discussed above, the Court in Sporhase held that in the regulation of water a state may exercise a limited preference for its own citizens in times and places of shortage. 458 U.S. at 956-957, 102 S.Ct. at 3464-3465. Logically, such a preference can only be implemented by keeping or “conserving” within the state water that would otherwise go out. A state may, therefore, “conserve” water within its borders for the use of its citizens to the same limited extent that it may prefer its citizens in the utilization of the resource.

The Six Factors of § 72-12B-1D

At subsection 72-12B-1D the export statute lists six factors the State Engineer must consider when acting upon any application to export ground water. The statute does not require the State Engineer to consider these factors with regard to instate uses of ground water. El Paso charges that this is facial discrimination which violates the Commerce Clause.

The first four factors require the State Engineer to determine whether there are water shortages within the State which could be alleviated by the intrastate transportation of the water sought for export. There is a legitimate reason for requiring that this determination be made before granting a permit to export water. If the State Engineer is. to constitutionally exercise a preference for the citizens of New Mexico in accordance with the precepts enunciated in Sporhase he must first determine if there is a shortage within the State. The State Engineer must consider such factors as whether there is a shortage in the area of export or elsewhere in the State, whether it is economically and technologically feasible to transport the water to areas experiencing a shortage, and whether there is an actual intent to transport the water.

The fifth and sixth factors require an evaluation of the export applicant’s water supply, the demand placed on that supply and the alternative sources of supply available to the applicant in the state of import. There is also a legitimate reason for requiring consideration of these factors before permitting the exportation of ground water. A state may favor its own citizens in the utilization of scarce water resources “unless the burden imposed on [interstate] commerce is clearly excessive in relation to the putative local benefits.” Pike v. Bruce Church, 397 U.S. at 142, 90 S.Ct. at 847. The local benefits cannot be weighed against the burdens on commerce without knowledge of the export applicant’s need for the water relative to that of prospective in-state users.

Commerce Clause analysis of the State’s exercise of a preference for its own citizens in the utilization of scarce water resources is a complex inquiry; it must be made case-by-case. Each of the six factors listed at § 72-12B-1 D informs the determination whether the burdens on commerce imposed by state ground water regulation are reasonable or unreasonable. Consequently, it cannot be said that consideration of these factors by the State Engineer when acting upon an application for export impermissibly discriminates against interstate commerce.

Interstate Transfers and Domestic Wells

The conservation and public welfare criteria apply to all interstate uses of ground water — new appropriations from declared and undeclared basins, new surface water appropriations, transfers of water rights, and supplemental and domestic wells. Instate, the conservation and public welfare criteria apply only to new appropriations from declared basins. El Paso charges that this discriminatory treatment is unjustified and imposes an impermissible burden on interstate commerce.

El Paso has not filed any applications to appropriate surface water or ground water from undeclared basins. Nor does it presently seek a permit for a supplemental well. The City has no standing, therefore, to attack the application of the conservation and public welfare criteria to appropriations from these sources.

Plaintiffs do have a personal stake in the determination whether the conservation and public welfare criteria may constitutionally be applied to interstate transfers and domestic wells. The City owns a tract of land which straddles the Texas-New Mexico border and it intends to drill a domestic well in the New Mexico portion for use by a tenant on the Texas portion of the tract. One of the individual plaintiffs has purchased a water right which permits him to divert and use ground water from four existing wells in New Mexico. He intends to transport this water to Texas for use there. Plaintiffs have standing to challenge the application of the conservation and public welfare criteria to their attempts to export water from domestic and transfer wells and this issue is ripe for adjudication.

By requiring the State Engineer to consider the interests of the conservation of water and the public welfare of the citizens of New Mexico when acting on applications to export water from domestic and transfer wells but not when acting on applications for in-state transfers and domestic wells, S.B. 295 discriminates on its face against interstate commerce. Consequently, the statute is subject to the strictest scrutiny. Defendants must show that the disparate treatment of intrastate and interstate transfers and domestic wells serves a legitimate local purpose, that it is narrowly tailored to that purpose and that there are no adequate nondiscriminatory alternatives. Hughes v. Oklahoma, 441 U.S. at 337, 99 S.Ct. at 1736. Defendants have not met this burden.

Under S.B. 295 no permit to transfer a water right or drill a domestic well may be granted if the use of the water is (1) out-of-state and (2) contrary to the conservation of water and public welfare of the citizens of New Mexico. In-state, no permit to transfer a water right or drill a domestic well can be denied on the ground that it would be contrary to the conservation of water or detrimental to the public welfare. These factors are irrelevant with regard to in-state transfers and domestic wells. N.M.Stat.Ann. § 72-12-1 and 72-12-7 (1978).

There may be circumstances in which the interstate transfer of a water right would be detrimental to the public welfare of the citizens of New Mexico while the intrastate transfer of the same right would not. In such an instance it may not be an unreasonable burden on interstate commerce to deny the interstate transfer but permit the intrastate transfer of the water right. S.B. 295 sweeps too broadly though. The intrastate transfer may also be detrimental to the public welfare yet the State Engineer is powerless to deny it on that ground.

While the State may constitutionally regulate water usage to promote the conservation of water and the public welfare of its citizens, it may not require interstate commerce to shoulder the entire burden of furthering those interests. There is no legitimate reason to deny interstate transfers and domestic wells if detrimental to those interests yet permit intrastate transfers and domestic wells when they are detrimental to them. The application of the conservation and public welfare criteria to interstate transfers and domestic wells is not narrowly tailored to effectuate its purpose and it, therefore, impermissibly burdens interstate commerce.

It follows that the State Engineer may not consider the six factors listed at § 72-12B-1 D when acting on applications for interstate transfers and domestic wells. These factors are relevant only because they bear on the determination whether the conservation of water and the public welfare of the citizens of New Mexico are affected by a proposed water use and, if they are, whether the State may constitutionally prefer its own citizens in the utilization of the resource. As the State Engineer will be enjoined from considering the conservation or public welfare criteria when acting upon applications for interstate transfers or domestic wells, consideration of the six factors would serve no purpose.

House Bill 12

In the same session that S.B. 295 was passed, the New Mexico legislature passed S.B. 300 which directed the Governor, after consultation with the State Engineer and the Attorney General, to appoint a committee to study the impact on the State’s water resources of “recent court decisions concerning water and interstate commerce.” The decision holding New Mexico’s embargo statute unconstitutional had been entered approximately two months prior to the passage of S.B. 300. The Governor appointed counsel for former defendant Attorney General Bingaman to chair the Committee. S.B. 300 directed the Attorney General and State Engineer to provide staff and support facilities for the Committee, which they did. The Committee’s Report was presented to the Governor and the Legislative Council prior to the 1984 legislative session. In his address to the 36th New Mexico Legislature, Second Session, 1984, the Governor asked the Legislature to act upon the following four recommendations made by the Committee: (1) seek Congressional action to allow states to maintain their water resources within their boundaries; (2) seek a compact between Texas and New Mexico to clarify the division of surface and related ground water of the Rio Grande below Elephant Butte; (3) fund a study of the possibility of appropriating to the State all unappropriated ground water should the “first two proposals fail to protect us;” (4) place a five year moratorium on new ground water permits in the Mesilla Bolson.

The Committee presented as rationale for the recommended moratorium that such a measure would give the State time to develop good hydrological information, to negotiate the recommended compact with Texas, to obtain Congressional authorization of an embargo, and to study the possibility of State entry into the water market. The Report analyses the economic implications for New Mexico of the four recommended actions and concludes that “the principal consequences would be to exclude prospective out-of-state water users, such as El Paso, from access to New Mexico ground water.” Following the receipt of the Report, the Legislature enacted H.B. 12.

H.B. 12 stays for two years the granting of new appropriations of ground water hydrologically related to the Rio Grande at or below Elephant Butte, i.e. the Hueco and Mesilla Bolsons. (The complete text of the statute is given at Appendix B.) Actually, the moratorium is of little practical consequence. H.B. 12 does not prevent the State Engineer from proceeding with the consideration of El Paso’s applications; all administrative hearings necessary to the granting or denying of the applications may be held. The administrative proceedings could conceivably outlast the moratorium. Unquestionably, if this court’s ruling is appealed, the stay will have expired long before there is a final determination of its constitutionality. Nevertheless, the issue is properly presented and must be addressed.

The statute recites that a stay is necessary to ensure competent administration of the subject ground water because (1) there is a deficiency of hydrological information as to the ground water, (2) the pending applications for the water far exceed the supply, and (3) the allocation between New Mexico and Texas of the surface water of the Rio Grande needs further clarification. If bona fide, these would be legitimate purposes. A statute need not openly disclose “an avowed purpose to discriminate against interstate [commerce],” though, to violate the Commerce Clause. Dean Milk Co. v. City of Madison, 340 U.S. 349, 354, 71 S.Ct. 295, 297, 95 L.Ed. 329 (1951). The stated purposes may be feigned, pretextual or illusory. Foster Fountain Packing Co. v. Haydel, 278 U.S. 1, 10, 49 S.Ct. 1, 3, 73 L.Ed. 147 (1928); Raymond Motor Transportation, Inc. v. Rice, 434 U.S. 429, 449-450, 98 S.Ct. 787, 798, 54 L.Ed.2d 664 (1978) (Blackmun, J., concurring). It is the duty of the court to look behind the legislative recitals of purpose to discover the true purpose of a challenged statute.

H.B. 12 states that a “deficiency of hydrological information” hinders or prevents the competent administration of the ground water in the Hueco and Mesilla Bolsons. Defendants point to the ongoing United States Geological Survey (“USGS”) study of these bolsons as evidence that there is a deficiency of hydrological information. Unquestionably, there is some uncertainty as to the hydrological characteristics — the transmissivity and storage coefficient — of the Mesilla Bolso.n.. The information now available is not exact and, hopefully, the USGS study will much increase the knowledge of the aquifer. The same can be said, however, of a number of other basins throughout the State where no moratorium on new appropriations has been deemed necessary. Annual Report of the State Engineer of New Mexico, June 30, 1983, pp. 20-24. Dozens of permits for new appropriations have been granted in some of these basins in spite of the uncertainty of the hydrological data. Id, p. 11.

Furthermore, the State Engineer must utilize some values for transmissivity and the storage coefficient when evaluating the effects of any new well drilled in the Mesilla Bolson. Yet the New Mexico Legislature apparently did not deem the lack of exactitude as to these factors significant enough to halt the drilling of transfer or supplemental wells.

Defendants do not contend that there is insufficient hydrological data as to the Hueco Bolson. From the evidence before the Court, the current USGS study does not appear to involve the Hueco Bolson at all. Thus, this alleged purpose has no relevance to the administration of the Hueco Basin.

Also revealing is the fact that defendants acknowledge that the USGS study will be far from complete by February, 1986. The lack of information which allegedly requires the stay, therefore, will not be available by the time the stay expires. In any event, El Paso is required to establish in the administrative proceedings on its permit applications that there is unappropriated water available in the Hueco and Lower Rio Grande Underground Basins and that no prior rights will be impaired. The State Engineer can address the sufficiency of El Paso’s proof in the light of any significant uncertainty as to the relevant hydrological data.

H.B. 12 states that the stay is necessary because “the amount sought to be appropriated in pending applications far exceeds available supplies.” As with the “deficiency of hydrological data,” this justification does not apply to the Hueco Basin. Other than El Paso’s, there are very few pending applications for appropriations from the Hueco Basin. Defendants do not dispute that the Hueco Basin contains 6.2 million acre feet of appropriable water. The amount of water sought by the pending applications, other than El Paso’s, is minimal in comparison, as is the 3300 acre feet of water now being withdrawn annually.

There has been a glut of applications for permits to appropriate ground water from the Mesilla Bolson since El Paso filed its applications. Although the exact amount of recoverable water in the Mesilla Bolson is unknown, the pending applications may exceed the unappropriated supply. The staying of new appropriations to deal with this circumstance, however, is a procedure which circumvents the prior appropriation doctrine on which New Mexico has always relied to determine who has the right to use the water available. Under this doctrine the first applicant in line is not denied a water right simply because there may not be enough water for subsequent applicants. Thus, heretofore, whenever the potential demand threatened to exceed the unappropriated supply of water from any particular source, New Mexico’s water laws required the State Engineer to consider applications in the order in which they had been filed, granting permits until there was no more unappropriated water. The only factor that distinguishes the Hueco and Mesilla Bolsons which would explain their special treatment is that El Paso has filed applications for export from those aquifers.

The third reason H.B. 12 gives for the stay is that, “the allocation of surface water between the states of New Mexico and Texas needs further clarification.” Once again, this has little relevance insofar as it concerns the Hueco Basin. The State Engineer’s, chief hydrologist testified that the minor effect on the Rio Grande in New Mexico caused by pumping from the Hueco Basin would probably not materially affect the day-to-day administration of that Basin.

In sum, the three concerns listed by the New Mexico Legislature as motivation for the stay are inapplicable to the Hueco Basin; the stay does nothing to ensure the competent administration of that Basin. In its Report the Committee identified only the Mesilla Bolson as “the area of primary interest” for the recommended moratorium. The application of the stay to the Hueco Basin, therefore, is unwarranted. The inclusion of the Hueco Basin within the reach of the moratorium casts doubt on the legitimacy of the Legislature’s concerns with regard to the Lower Rio Grande Underground Basin. Again, the one thing the two Basins do have in common is that El Paso has filed applications to appropriate from both of them. Thus, the moratorium statute on its face discloses an impermissible, discriminatory purpose. Consideration of the circumstances surrounding the passage of H.B. 12 only substantiates the conclusion that the true purpose of the statute is to prevent El Paso from obtaining any ground water from New Mexico.

The purpose of blocking interstate commerce in ground water is, of course, a protectionist purpose. Defendants maintain that the moratorium does not offend the Commerce Clause because it regulates evenhandedly, i.e., it stays new appropriations for in-state use as well as for export. A state statute, however, may be invalid because of its protectionist purpose as well as its discriminatory effect. Minnesota v. Cloverleaf Creamery Co., 449 U.S. 456, 471 n. 15, 101 S.Ct. 715, 727 n. 15, 66 L.Ed.2d 659 (1981). The balancing test set out in Pike v. Bruce Church, Inc., 397 U.S. at 142, 90 S.Ct. at 847, presupposes that the statute being tested has a legitimate local purpose. Thus, evenhandedness does not validate an illegitimate purpose.

Moreover, the evenhandedness of the moratorium is only superficial. The Committee analyzed the economic impact on New Mexico of a stay for five and ten years, respectively. It found an adverse economic effect on the state from a five year stay only under one unlikely scenario: all pending applications for the subject ground water are granted except one exceptionally large application for an irrigation water right, the irrigation water rights granted are put to immediate use, and the municipal and industrial rights granted are put to use after ten years. The Committee did not even address the possible economic impacts on New Mexico of a two year moratorium. The Report thus represents that a stay, even for five years, might possibly have no effect on the New Mexico economy while excluding El Paso from access to its ground water while the State pursues more permanent measures.

Even if H.B. 12 were deemed to regulate evenhandedly, it quite clearly is intended to effectuate an illegitimate local purpose— the complete blockage of interstate commerce in water. Its effects on interstate commerce are not incidental; they are. calculated. The effect on interstate commerce is not minimal but substantial. Further, if the moratorium were not per se invalid because of its illegitimate purpose, it would fall under the Pike balancing test because it is not narrowly tailored to apply to basins where the deficiency of hydrological information, excessive demand and uncertainty of the apportionment of related surface water affect the administration of the ground water. H.B. 12 impermissibly burdens interstate commerce in violation of the Commerce Clause of the United States Constitution and it cannot be enforced.

Mootness

In the earlier stages of this litigation when § 72-12-19 was under consideration, defendants claimed that the Rio Grande Compact and the New Mexico Constitution prevented El Paso from obtaining any ground water in New Mexico. Defendants no longer raise these defenses. They contend, therefore, that the repeal of § 72-12-19 and enactment of § 72-12B-1 permitting ground water exportation render the Compact and state constitutional issues moot.

A large percentage of the efforts of the parties and the court have been directed towards the Compact and state constitutional issues. The New Mexico Legislature has demonstrated its reluctance to accept the Court’s decision that the Compact does not apportion the Rio Grande between Texas and New Mexico below Elephant Butte by citing as a reason for H.B. 12 that “the allocation of surface water between the states of New Mexico and Texas needs further clarification.” It is quite possible that defendants would find it expedient to again raise the Compact and state constitutional- defenses if the Court did not reenter its rulings on these matters. They should not have to be relitigated between these parties at the trial level. United States v. W.T. Grant Co., 345 U.S. 629, 73 S.Ct. 894, 97 L.Ed. 1303 (1953). The Court will reenter its findings of fact and conclusions of law as to the Rio Grande Compact and state constitutional issues.

Conclusion

In summation, the Court finds that the limitation of water exports to those which are “not contrary to the conservation of water within the state and [are] not otherwise detrimental to the public welfare of the citizens of New Mexico” does not render N.M.Stat.Ann. § 72-12B-1 C (Cum.Supp.1984) facially unconstitutional. The consideration by the State Engineer of the six factors listed at § 72-12B-1 D when acting on applications for new appropriations of water to be used outside New Mexico does not violate the Commerce Clause. The utilization of the conservation and public welfare criteria and the six factors listed at § 72-1B-1 D to evaluate applications for domestic wells and transfers of existing rights where the water is to be used outside the State creates an unconstitutional burden on interstate commerce. H.B. 12 has an illegitimate protectionist purpose and is facially unconstitutional. The Rio Grande Compact and state constitutional issues are not moot and are reaffirmed. The court's findings of fact and conclusions of law relating to the Commerce Clause and N.M.Stat.Ann. § 72-12-19 in the Memorandum Opinion of January 17, 1983 are superseded by the findings and conclusions stated herein.

The parties have made a number of other arguments each of which the court has considered and found to be without merit. A Judgment in accordance with this Opinion will be entered herewith.

APPENDIX A

N.M.Stat.Ann. § 72-12B-1 (Cum.Supp.1984).

APPLICATIONS FOR THE TRANSPORTATION AND USE OF PUBLIC WATERS OUTSIDE THE STATE.

A. The state of New Mexico has long recognized the importance of the conservation of its public waters and the necessity to maintain adequate water supplies for the state’s water requirements. The state of New Mexico also recognizes that under appropriate conditions the out-of-state transportation and use of its public waters is not in conflict with the public welfare of its citizens or the conservation of its waters.

B. Any person, firm or corporation or any other entity intending to withdraw water from any surface or underground water source in the state of New Mexico and transport it for use outside the state shall apply to the state engineer for a permit to do so. The state engineer shall accept for filing and act upon all applications filed under this section in accordance with the provisions of this act. The state engineer shall require notice of the application and shall thereafter proceed to consider the application in accordance with existing administrative law and procedure governing the appropriation of surface or ground water.

C. In order to approve an application under this act, the state engineer must find that the applicant’s withdrawal and transportation of water for use outside the state would not impair existing water rights, is not contrary to the conservation of water within the state and is not otherwise detrimental to the public welfare of the citizens of New Mexico.

D. In acting upon an application under this act, the state engineer shall consider, but not be limited to, the following factors:

(1) the supply of water available to the state of New Mexico;

(2) water demands of the state of New Mexico;

(3) whether there are water shortages within the state of New Mexico;

(4) whether the water that is the subject of the application could feasibly be transported to alleviate water shortages in the state of New Mexico;

(5) the supply and sources of water available to the applicant in the state where the applicant intends to use the water; and

(6) the demands placed on the applicant’s supply in the state where the applicant intends to use the water.

E. By filing an application to withdraw and transport waters for use outside the state, the applicant shall submit to and comply with the laws of the state of New Mexico governing the appropriation and use of water.

F. The state engineer is empowered to condition the permit to insure that the use of water in another state is subject to the same regulations and restrictions that may be imposed upon water use in the state of New Mexico.

G. Upon approval of the application, the applicant shall designate an agent in New Mexico for reception of service of process and other legal notices.

APPENDIX B

House Bill 12, 36th Legislature, 2d Session, 1984 Laws of New Mexico:

RELATING TO WATER; PROHIBITING FOR A CERTAIN PERIOD THE GRANTING OF PERMITS TO APPROPRIATE CERTAIN GROUND WATER; DECLARING AN EMERGENCY.

Section 1. CERTAIN GROUND WATER — FINDING—GRANT OF PERMITS —STAY—EXCEPTIONS.—

A. The state of New Mexico recognizes that with respect to ground water hydro-logically related to the Rio Grande at or below Elephant Butte dam there is a deficiency of hydrologic information, the amount sought to be appropriated in pending applications far exceeds available supplies and the allocation of surface water between the states of New Mexico and Texas needs further clarification.

B. In the interest of ensuring competent administration of the ground water hydrologically related to the Rio Grande at or below Elephant Butte dam, a stay is declared on the granting of permits with respect to all pending and future applications to appropriate unappropriated ground water from aquifers hydrologically related to the Rio Grande at or below Elephant Butte dam. The stay shall be for a period of two years commencing on the effective date of this act.

C. Nothing in this section shall preclude the granting of permits:

(1) to appropriate unappropriated ground water for public health emergencies;

(2) to appropriate unappropriated ground water for domestic, stock water and other uses pursuant to Section 72-12-1 NMSA 1978; or

(3) to replace or change the location of existing wells.

Section 2. EMERGENCY. — It is necessary for the public peace, health and safety that this act take effect immediately.

      . The Young decision predates the adoption of the New Mexico constitution in 1911. The prior appropriation doctrine, however, has always determined the priority of water rights in New Mexico. The state constitutional provisions and statutes declaring prior appropriation to be the basis and measure of the right to use water were "merely declaratory of the prior existing law.” Yeo v. Tweedy, 34 N.M. 611, 614, 286 P. 970 (1929).

      . Although El Paso asserts in its latest brief that it owns a surface water right in New Mexico which it intends to use in Texas, the paragraph in the Second Amended and Supplemental Complaint to which the City cites does not explicitly support this claim. The court is unaware of any evidence in the record which does. At this stage in the litigation the court cannot simply assume that El Paso owns a surface water right.


source: Caselaw Access Project

author: DOUMAR, District Judge.

license: Public Domain

text:
    HAMPTON ROADS SHIPPING ASSOCIATION, on behalf of its members, jointly and severally, Plaintiffs, v. INTERNATIONAL LONGSHOREMEN’S ASSOCIATION (AFL-CIO), and its Affiliated Locals in the Port of Hampton Roads, Defendants.
    Civ. A. No. 84-500-N.
    United States District Court, E.D. Virginia, Norfolk Division.
    Aug. 24, 1984.
    As Corrected Aug. 27, 1984.

      Braden Vandeventer, Jr., Daniel R. Weckstein, Vandeventer, Black, Meredith & Martin, Norfolk, Va., for plaintiffs.
    Charles S. Montagna, C. Arthur Rutter, Breit, Rutter & Montagna, Norfolk, Va., for defendants.
   OPINION

DOUMAR, District Judge.

I. INTRODUCTION

Seeking a preliminary injunction, the plaintiffs brought this suit to enforce an arbitration clause in a contract between the Hampton Roads Shipping Association (HRSA) and the International Longshoremen’s Association (ILA), as well as its affiliated locals in the port of Hampton Roads, Virginia. The plaintiffs seek to require the defendants to arbitrate pursuant to the “Hampton Roads contract” while maintaining the status quo in the port, and to enjoin the defendants from striking or creating a work stoppage in Hampton Roads pending an arbitrated determination of the issue in accordance with Sections 37 and 38 of said contract (See Exhibits 3 and 4). The underlying issue concerns the utilization of the stevedore gang on the one hand or the size of the gang on the other. It is a question of requiring more men to do the work formerly performed by less through interpretation of the contract rather than negotiation of the contract.

The defendants argue that the issue has already been arbitrated pursuant to other agreements affecting the parties, some parts of which are specifically entitled the “Master Agreement” and some parts of which are referred to from time to time as the “master contract” and which are contained in Exhibit 5 as parts: 1; 2; 3(a); 3(d); 8; and 10. The defendants contend that there is nothing left to arbitrate as they claim that an arbitration of a local grievance between the West Gulf Maritime Association and Local 20 of the ILA of Galveston, Texas conclusively decided the issue at an earlier date. According to the defendants, the resolution of the Galveston Local 20 grievance eliminated any requirement for arbitration and, therefore, any jurisdiction for arbitration in Hampton Roads. The defendants maintain that the Hampton Roads contract is at variance with the Master Agreement and that the Master Agreement takes precedence over the Hampton Roads contract. (See paragraph 5 of the answer).

In essence, the Union maintains that the final determination of the Galveston, Texas Local 20 grievance with the West Gulf Maritime Association bound each and every port association which was a party to the portion of what the Union calls the Master Contract, specifically the Work Incentive Agreement of June 19, 1981. All parties agree that there is a grievance between Hampton Roads Shipping Association and the defendants and that the agreements contain no-strike clauses. However, the defendants claim exception from the no-strike clauses by virtue of the Galveston, Texas — West Gulf mediation.

After hearing the evidence and analyzing the Hampton Roads contract and the other varied agreements between or affecting the parties, this Court has adopted the plaintiffs position requiring the defendants to proceed with the local arbitration, invoking the no-strike provisions and rejects the defendants’ position for the reasons set forth herein.

The various agreements seem to create a reader’s quagmire which to some may appear to have been the result of a drafter’s nightmare. This Court endeavors to chart a course in the hopes that others do not sink into the many strands of quicksand that lie along the paths waiting to engulf the unwary explorer.

II. HOW THE DISPUTE AROSE: FACTUAL BACKGROUND

The Hampton Roads Shipping Association is a multi-employer collective-bargaining association which represents the Hampton Roads maritime industry employers in their negotiations with the International Longshoremen’s Association and its local affiliates. HRSA also belongs to and is a member of the Council of North Atlantic Shipping Associations.

The ILA (AFL-CIO), and its affiliated Locals in the Port of Hampton Roads, including Local 846, 970 and 1248, are all defendants and supply the stevedores or longshoremen on the vessels arriving and departing the Hampton Roads ports.

Due to the rapid growth of containerization of cargo at seaports, by 1968 maritime industry management and union representatives entered into agreements incorporating containerization rules accommodating the interests of both sides.

Initially in 1968, the agreements specified the size of the gang to be 19 men. In 1977, “the Containerization agreement” was amended to provide as follows:

5. The minimum size of the container gang used in loading or unloading containers to or from container ships shall consist of 18 men plus two drivers.

The Council of North Atlantic Shipping Associations, of which Hampton Roads Shipping Association is a member, and other shipping associations entered into contracts which adopted the same language with the Union in 1977 and in 1980 and lastly in Bal Harbour, Florida on September 26, 1983, which extended the provision to September 30, 1986 (See Exhibit 5, Part 1, pages 2 and 3; Exhibit 5, Part 3(a), paragraph 5).

Entered into in Virginia on February 2, 1984, the Hampton Roads contract contains a provision relating to the gang size which may be found at Section 50A of Exhibit 3 and Exhibit 4. The provision reads as follows:

1. GANG SIZE FOR HANDLING OF CONTAINERS .
When handling containers eighteen (18) men plus two (2) drivers will be used. The utilization and placement of the men in the gang to be at the Employer’s discretion. Crane operators, whether hired by the terminal company or by the stevedore, will be counted as part of the eighteen (18) man gang.
The container gang will perform no lashing. When lashing or unlashing is required, a lashing gang, with a minimum of a header and six (6) men, will be utilized. This clause does not apply to barges. When working container or combo ships, lashing gangs will receive a 20 cents differential.
(a) When holdmen are being used to stuff or unstuff containers on the dock or on deck there will be no simultaneous loading or discharging in the hatch by the gang.
(b) When carpenters are required for securing cargo, a minimum gang of a header and three men shall be employed.

The wording concerning size and utilization in the local agreement, except for the last sentence of paragraph 2 concerning the 20 cent differential, was the same for the 1977 through 1980 contract, the 1980 through 1983 contract and the 1983 through 1986 contract last negotiated on February 2, 1984.

The Union alleges in paragraph 5 of its answer that the wording of the local agreement with regard to the size of the gang “is at variance with the Master Contract which takes precedent over the local agreement.”

The only agreement which the undersigned could find that made reference to the various agreements and seemingly tied the different contracts and agreements together was the agreement signed on January 26, 1984 in Miami, Florida. The Union and various steamship carriers and shipping associations including the Council of North Atlantic Shipping Associations incorporated the various agreements and provided in Articles II and III as follows in Part 2 of Exhibit 5:

II. Said Steamship Carriers by executing this Agreement hereby subscribe to and become parties to the following Agreements and any amendments thereto with the same force and effect as if said Steamship Carrier actually executed, signed and subscribed to said Agreements. Said Agreements are the following:
1. The Master Agreement first executed May 27, 1980 as thereafter amended on April 16, 1983 and on September 26,1983. [Exhibit 5, parts 1, 2, 3(a), 3(d), 8 and 10]
2. The Management ILA Agreement dated December 6,1980. [Exhibit 5, part 4]
3. The Resolution of March 26, 1981. [Exhibit 5, part 5]
4. The Tampa Agreement of May '4, 1981. [Exhibit 5, part 6]
5. The Charleston Agreement of May, 1981. [Exhibit 5, part 7]
6. The Work Incentive Agreement of June 19, 1981. [Exhibit 5, part 8]
7. The Rules on Containers as now in effect and as may hereafter be amended in accordance with its terms. [Exhibit 5, part 3(d) ]
8. The Containerization Agreement. [Exhibit 5, parts 3A and 10]
9. The JSP Agreement. [Exhibit 5, parts 3(c) and 9]
10. Each and every Local Agreement which may hereafter be entered into or which is presently in effect in each of said 36 ILA ports affecting the terms and conditions of employment of employees actually employed or utilized aboard the steamship vessels of said Steamship Carriers. [Exhibits 3 and 4, HRSA agreement]
III. The Steamship Carriers agree to be bound by the determination of the various management and labor tribunals named in each said Master and Local Agreements.
Any determination of the tribunal named in the Master Agreement or in any of the Local Agreements shall have the effect of an arbitration determination and may be enforced by either party in any Federal District Court having jurisdiction of the parties.

All of the contracts expire on September 30 every three years, thus, in 1977, 1980, 1983 and 1986. The negotiations generally are conducted for all contracts by an international vice president of the ILA, including the local agreements such as in Hampton Roads. The local agreements are executed on behalf of the international union by an international vice president and by the respective shipping associations.

III. HRSA POSITION ON EVENTS

On July 25,1984, HRSA was informed by the international vice president of the ILA that as of August 1, 1984, the ILA would no longer allow additional drivers to be taken from the 20 man cargo gang other than the two specified drivers, and further that any additional drivers would have to be added to the 20 man crew. (See Exhibit 6). This position - was contrary to the understanding that existed in Hampton Roads for a minimum of at least the proceeding seven years as evidenced by the negotiations of the three local contracts for the period beginning in 1977, 1980, and 1983 as well as for the negotiations of the three so-called Master Contracts. The Union claims that the new interpretation was mandated by a resolution of a Management-ILA Emergency Panel determination relating to dispute concerning the Galveston, Texas port to be discussed later in the opinion.

HRSA immediately brought a grievance and contended that this new union labor demand constituted a strike or work stoppage under the Hampton Roads contract and sought arbitration thereunder. The pertinent contract provisions follow:

SECTION 37
PROHIBITION OF LOCKOUTS, STRIKES OR WORK STOPPAGES
During the life of this agreement, the party of the first part agrees there shall be no lockouts or work stoppages by the Employers, but this shall not be construed to mean a lay-off of Employees due to business conditions, and the party of the second party agrees there shall be no strikes or work stoppages by the Employees. The right of the Employees not to cross a bona fide picket line is recognized by the Employers.

In addition, said contract provides under Section 38:

SECTION 38
ARBITRATION CLAUSE
(a) DISPOSITION
Any grievance, dispute, complaint or claim arising out of or relating to this agreement shall be handled and disposed of in the manner hereinafter provided, and all the parties hereto agree to abide by any decision made in accordance therewith.
(b) INTITAL PROCEDURE
On Job. When a dispute occurs, either the employer representative (Stevedore, Pier Superintendent or appropriate designate of the Employer) or Hatch Foreman or the ILA representative shall immediately call the problem to the attention of the other party. Meanwhile, work must continue. Every effort shall be made to reach a settlement consistent with the contract. If there be a failure to reach agreement, either party may immediately call for a member of the Arbitration Committee of the Hampton Roads Shipping Association and the International Vice President of ILA, AFL-CIO for the Port of Hampton Roads or his designated representative to come at once to the place of the dispute and attempt to resolve the problem.
(c) ARBITRATION COMMITTEE ...
(d) APPLICATION TO FEDERAL MEDIATION AND CONCILIATION SERVICE ...

On August 1, 1984, prior to the commencement of working by the first crew, the HRSA sought an on-site dispute resolution under Section (b) which ended in deadlock. Later that day, an arbitration committee (Section (c)) deadlocked as ILA representatives claimed “no jurisdiction” existed in the Hampton Roads area since, in their opinion, an Emergency Panel decision of June 12, 1984 in New York had decided the very issue in a Galveston, Texas dispute.

HRSA denied that the Emergency Panel had heard any grievance which even purported to affect Hampton Roads or that the Panel’s decision in any way applied to the Hampton Roads ports. HRSA moved this Court for a preliminary injunction to require arbitration to prevent work stoppage and to stop irreparable harm to the Hampton Roads port resulting from potential economic diversion.

IV. THE ILA POSITION

Though it had complied initially with Hampton Roads arbitration procedures by appearing, the ILA asserted that the container gang utilization problem was entirely a “Master” Agreement issue. Further, the ILA claimed that the arbitration procedures of the Master Contract governed this controversy and the use and size question was already conclusively decided by virtue of a decision concerning Galveston, Texas. The pertinent arbitration provisions of the Master Agreement are contained in the Work Incentive Agreement of June 19, 1981, which is Part 8 of Exhibit 5 and states:

6. Management, the Carriers and Direct Employers hereby re-affirm and clarify the enforcement procedures which will be followed in order to protect and preserve the work of the ILA which is covered by the said Master Agreement. The enforcement procedures shall be as follows:
A. An initial charge of alleged violation of the Containerization Agreement in the Master Agreement shall be heard under the procedures agreed upon in a local port by the local Port Association and the local representatives of the ILA. Such procedure shall be completed within ten days after the charge is filed.
B. Where there is a failure to agree on the local level, or where a party desires to appeal any decision rendered pursuant to Step One in Paragraph (1) above, such cases shall be referred to the Management-ILA Emergency Hearing Panel referred to below.
C. The Management-ILA Emergency Hearing Panel shall consist of the following members
(i) Representing Management
NEW YORK SHIPPING ASSOCIATION, INC. -1
COUNCIL OF NORTH ATLANTIC SHIPPING ASSOCIATIONS -1
WEST GULF MARITIME ASSOCIATION -1
NEW ORLEANS STEAMSHIP ASSOCIATION -1.
MOBILE STEAMSHIP ASSOCIATION -1
SOUTHEAST FLORIDA EMPLOYERS ASSOCIATION -1
SOUTH ATLANTIC EMPLOYERS NEGOTIATING COMMITTEE -1
CARRIERS -2
DIRECT EMPLOYERS -2
(ii) Representing ILA
An equal number of ILA Vice Presidents, or other ILA representatives are to be designated by the President of the ILA.
(iii) A quorum shall consist of a majority of each side of the panel and each side of the panel shall have an equal number of votes. Each side shall have the right to designate alternates.
(iv) The decision of the panel, rendered by a majority vote thereof shall be final and binding and shall constitute an enforceable award. In the event of a deadlock by the Panel, the President of the ILA and the President of NYSA shall select (within two days of the deadlock) a third party to break the deadlock.
D. Appeals from a decision by the local port association and the ILA, under Step One, must be taken within twenty (20) days after such decision. Pending such appeal work will continue.
E. The ILA shall have the right to refuse to render service to any carrier or direct employer (but only with respect to the carrier charged) who, after a determination under Steps One or Two above, has been found to have violated the provisions of the said Master Agreement, and who refuses to abide by the decisions rendered under Steps One and Two above, and the provisions of any no-strike clause shall be rendered inapplicable in such situation.
F. Charges of alleged violations of the Master Agreement involving more than one port shall be referred directly to the Management-ILA Emergency Hearing Panel for final determination.

The Management-Union Emergency Panel mentioned, supra, met on June 12, 1984 in New York City to hear eleven (11) grievances which were unresolved at the local level of various ports pursuant to arbitration procedures (Sections 6(A)-(D), supra).

On June 7, 1984, a letter from the ILA’s executive secretary added the following “grievance” to the 10-item agenda of the panel. It stated:

GALVESTON, TEXAS
Local # 20, ILA against West Gulf Maritime Association complaint that heavy lift operators (Port-O-Packer operators) are assigned out of the 20-man gang (Letters of May 22, 1984 and June 7, 1984 attached). [Defense Exhibit 5]

As can be seen, the port of Galveston, Texas was underlined in capital letters; there was no mention of “driver”. Further the letter was noted to be “a grievance” ... “against West Gulf Maritime Association.” As added to the minutes it provided as follows:

Min. 6. Galveston, Texas. — Local # 20, ILA against West Gulf Maritime Association complaint that heavy lift operators (Port-O-Packers) are assigned out of the 20-man gang (Letters of May 22, 1984 and June 7, 1984 attached) (Item # 6 on the Agenda).

In each instance the port is Galveston, Texas. At all times “grievance” was identified as a Local ILA Number 20 issue not a national or international one. It in no way applied to Local 846, 970 or 1248.

The Galveston Local 20 had “charged” the port of Galveston, Texas and not any other port. Evidently there was no agreement at the local level under Section (A), supra, and accordingly, the Emergency Panel heard the grievance. Following what can best be interpreted through the minutes as disputed dialogues, the following resolution arose from Mr. Bowers, the international vice president of the Union, who also was a negotiator at Hampton Roads:

... that the gang size shall be 18 plus two with drivers added to the twenty.

The minutes of the meeting of June 12, 1984, concerning the action of one of management’s representatives, stated as follows:

Mr. Costello stated that he would abstain from voting, however, he subsequently stated he would stand by the Master Contract. This was considered a vote in favor of the Motion.

This wording by Costello was considered the winning vote in favor of the Union because without his statement the Union would not have had the sufficient votes.

The charge made by Local 20 of the ILA against the West Gulf Maritime Association concerning the port of Galveston, Texas, on the basis of the above motion was then codified as follows:

That in accordance with the provisions of the Master Collective Bargaining Agreement, negotiated by and agreed to by the parties, the minimum size of a container gang shall be 18 men plus two drivers and that should additional drivers be required such drivers are to be drawn from outside the gang and shall not be part of the regular 20 man gang.

V. THE COURT’S VIEW

In making a determination as to the nature of this contract, and what has taken place, there is no requirement that either party exercise due process, but the Court notes that it was completely lacking in any alleged determination which was supposedly rendered on June 12 and 13; 1984, if indeed there was one so rendered. The Court finds as a fact that what was acted upon on June 12 and 13, 1984 by the Emergency Hearing Panel was a local grievance or charge made against the West Gulf Maritime Association concerning only the port of Galveston, Texas, a local port. No other port was listed, either in the notice or in the agenda. No other association was “charged” other than the West Gulf Maritime Association.

This Court further finds that the Hampton Roads Shipping Association has never been charged with a grievance. This Court invited the Union to charge the Hampton Roads Shipping Association with a grievance under Clause 6(A) of the Master Agreement. The ILA chose instead to rely on the Emergency Panel resolution of June 12,1984, which supposedly solved a Galveston, Texas port problem, and no other port problem. The so-called Master Agreement gave no right to Locals 846, 970 or 1248 to engage in a work stoppage since the very wording of paragraph E of the so-called Master Contract allows refusal to render service “only with respect to the carrier charged”. Hampton Roads Shipping Association was not “charged”. Neither Hampton Roads nor any of its ports such as Norfolk, Portsmouth or Newport News were charged.

VI. CONTRACT

In analyzing the contract, the Court must apply certain stated contractual principles. The meaning of the parties must be ascertained by the terms of the writing and not by looking at a part of it. See Boardman v. Reed, 6 Pet. 328, 344, 31 U.S. 327, 344, 8 L.Ed. 415 (1832). Nor can the mental purpose of one of the parties to the written agreement change its terms. See New York Central Ry. Co. v. Mohney, 252 U.S. 152, 157, 40 S.Ct. 287, 289, 64 L.Ed. 502 (1920). Where several writings are connected by internal references to each other, even if they were executed on different dates and were not among all of the same parties, they will constitute a single contract as long as they involve the same subject matter and prove to be parts of an entire transaction. See Gordon v. Vincent Youmans, Inc., 358 F.2d 261 (2d Cir.1965); Commercial Contractors, Inc. v. U.S. Fidelity & Guaranty Co., 524 F.2d 944, 950 (5th Cir.1975). Moreover, it appears that any conflicting contractual provisions are to be construed with a view towards reconciliation and that interpretation and construction must be such as to reconcile clauses that might seem repugnant. See International Erectors, Inc. v. Wilhoit Steel Erectors and Rental Service, 400 F.2d 465, 469 (5th Cir.1968); Papayo Tribal Utility Authority v. Federal Energy Regulatory Commission, 610 F.2d 914, 929 (D.C.Cir. Decided 1979, as amended 1980).

These principles require this Court to conclude that the Hampton Roads contract, Exhibits 3 and 4, executed by the ILA by its international vice president, dispatched from New York is on a par with all the other ILA contracts affecting the Hampton Roads Shipping Association. Counsel has pointed to no clause requiring one contract to take precedence over another, nor has this Court found such a clause. This Court finds, indeed, that the parties to the agreement of January 25, 1984, executed in Miami, Florida, on January 26, 1984, intended to list all the agreements and give them an equivalent status. This Court finds that neither type of arbitration is superior to the other. The arbitration listed or provided by the Emergency Panel as set forth in the Work Incentive Agreement of June 19, 1981, is on a par with the arbitration provisions provided in the contract with HRSA (Exhibit 3). Moreover, the Court finds as a fact for the purposes of this opinion, on the limited evidence presented, that Paragraph 5 of the Containerization Agreement concerning the minimum size and utilization of the gang is in no way repugnant or contrary to Section 50A of the HRSA contract with ILA, Exhibit 3. They supplement one another rather than contradict.

There is no question that it had been the understanding of all the parties from at least 1977 up until at least June 12, 1984, that the utilization of the 18 men was at the employer’s discretion. Thus, the employers decided whether they could be utilized as drivers. Up to 6 men had been utilized as drivers from the 20 men and this custom was known throughout the industry and other ports as the “Norfolk Agreement.” This Court finds as a fact that the ILA was aware of the terms of this Norfolk Agreement, was well versed in it and had negotiated with HRSA on at least three different contracts with this Norfolk Agreement in mind. In contrast to the Norfolk Agreement, the Baltimore Agreement provided that members of the container gang perform the work of lashing and unlashing of containers from the 18 men crew while 8 men were to be holdmen in Baltimore. In Hampton Roads, a separate lashing crew of 7 men is required'by the local contract. Ports to the south and ports to the north have different agreements concerning utilization of crews. All of these agreements were negotiated with the understanding that the contractual reference to “men” in the gang was to be construed as bargained for by the international vice presidents for the ILA and by the employer shipping associations in regard to the demands of particular ports and practices in these ports.

VII. BOYS MARKETS INJUNCTION REQUISITE MET AND IRREPARABLE INJURY TO HAMPTON ROADS PORTS IMMINENT

In a labor dispute such as this, a federal district court must determine whether an injunction to enforce arbitration is proper within the dictates of Boys Markets, Inc. v. Retail Clerks Union Local 770, 398 U.S. 235, 90 S.Ct. 1583, 26 L.Ed.2d 199 (1970).

In the Boys Markets case, the Supreme Court was required to construe the anti-injunction provisions of the Norris-LaGuardia Act, 29 U.S.C. § 104, in light of arbitration clauses enforceable under Section 301(a) of the Labor Management Relations Act, 29 U.S.C. § 185(a), which delineates United States district court jurisdiction in labor contract disputes. In Boys Markets, a strike was called which violated a collective-bargaining agreement no-strike clause which required arbitration. It held that, in such narrow circumstances, federal court injunctive action was proper to enforce and promote arbitration. The Boys Markets case is considered to have established three prerequisites for a federal district court’s jurisdiction to enjoin a strike: (1) the strike must be in breach of a no-strike obligation under an effective collective-bargaining agreement; (2) the strike must be over an arbitrable grievance; and (3) both parties must be contractually bound to arbitrate the underlying grievance caused by the strike. Jacksonville Maritime Association v. ILA, 571 F.2d 319, 323 (5th Cir.1978). Additionally, the Fifth Circuit in Jacksonville stated with regard to traditional injunctions, at page 322 of the opinion, as follows:

[A] preliminary injunction remains an extraordinary remedy, and the district court may exercise its discretion only within certain well-established guidelines. In every case the court must con-elude that the movant has met four prerequisites for this drastic remedy. These are: (1) a substantial likelihood that the movant will ultimately prevail on the merits; (2) a showing that the movant will suffer irreparable injury unless the injunction issues; (3) proof that the threatened injury to the movant outweighs whatever damage the proposed injunction may cause the opposing party; and (4) a showing that the injunction, if it is issued, would not be adverse to the public interest.

Therefore, seven criteria must be reviewed by this Court to determine whether an injunction enforcing arbitration is appropriate. Jacksonville, supra, at 323.

Effective August 1, 1984, the ILA ordered that no more than 2 men from within the 20 man gang act as drivers in loading and unloading containers in Hampton Roads. Not only was this a complete change from prior practice, it was also a complete change from the contract provisions. Management immediately brought a grievance against the Union the same day that the Union desired to implement this rule. Under the terms of Hampton Roads contract, Section 38, the Union would be bound to follow arbitration rules as contained therein, particularly if the ILA’s actions constituted a strike or work stoppage barred by Section 37 of the contract.

Since Section 37 of the Hampton Roads contract does not clearly define “strike or work stoppage”, the Court referred to the definition as stated in the National Labor Relations Act, 29 U.S.C. § 142(2):

The term “strike” includes any strike or other concerted stoppage of work by employees (including a stoppage by reason of the expiration of a collective-bargaining agreement) and any concerted slowdown or other concerted interruption of operations by employees.

This Court concludes that the- ILA’s refusal to allow gang members from the 18 men gang to act as drivers as was previously customary constituted a strike or work stoppage in violation of this no-strike clause. In the Jacksonville case, the district court utilized a similar analysis and the Fifth Circuit in affirming the lower court stated:

We cannot say that this conclusion, or the method by which the district court arrived at it, was erroneous. Certainly federal law permeates the relationships between the parties, and in the absence of specific contractual provisions the federal statutory definition is strong evidence of the understanding of the parties about the meaning of “strike.” Id. at 323.

The Court finds that the underlying issue in this matter, that is, the composition of work gangs in Hampton Roads, was fully arbitrable under the Hampton Roads contract clause, Section 38 above, and that the parties to this cause were bound by the local contract. Hence, the dictates of the Boys Markets case are satisfied in this case.

As for traditional injunction requisites, the Court finds that the plaintiff HRSA would likely prevail on the merits, in that the underlying dispute is arbitrable under the Hampton Roads contract. Further, this Court believes that the balancing of hardships favors the HRSA since it merely seeks to retain the status quo that existed at the time of the requested arbitration of August 1,1984, without a sudden change in labor requirements. The public interest certainly favors the resolution of a dispute in order to avoid a strike in a competitive seaport.

Moreover, the Agreement dated January 25, 1984 executed January 26, 1984 clearly anticipates enforcement of any “arbitration determination ... by either party in any Federal District Court having jurisdiction____” (See Roman Numeral III on Page 7 of this opinion).

Thus, the parties anticipated enforcement in a Federal District Court and, certainly, and necessarily anticipated “the enforcement” would include arbitration. This Court is merely enforcing what the parties contracted for in a court the parties anticipated such enforcement to take place.

This Court further finds as a fact that the Union exercised selective enforcement by choosing to use the ports in Norfolk or Hampton Roads. This Court finds as a factual matter that serious economic losses will cause irreparable harm to this port if allowed to continue. The ports to the north and south will gain substantial economic preference causing severe economic loss to this port.

In fact, the Court finds the elements of a traditional injunction were met and adopts its opinion of August 2, 1984. A second hearing was set to determine what the other ports were doing concerning this matter in order to determine if there was irreparable injury. At this second hearing, the Court allowed the ILA to present further evidence, but it did not change any of the reasoning set forth in its opinion of August 2, 1984, nor was the Court convinced of any reason to change its opinion previously set forth. The Hampton Roads Shipping Association was permitted to present its evidence. The Court learned that the other United States ports, from the period of time from August 1, 1984 through and including August 6, 1984, were not complying with any new ILA work gang demands. In fact, they were not even requested to comply until after the information concerning this suit was promulgated to them. Even then, Baltimore was not requested to comply until August 6th, two days before the contemplated second hearing in this matter and in a manner which does not seem possible under the Master Contract or the so-called Emergency Hearing Panel resolution. The Hampton Roads ports were used by the ILA in that it was the first port tested by the new ILA work gang issue.

The Jacksonville court held that “the effect of a long-term diversion of business from the port” constituted irreparable injury, and this Court finds that the same would undeniably result in Hampton Roads without the maintenance of the status quo that existed before August 1, 1984. To understand the irreparable harm Hampton Roads would suffer under the ILA position, one need only compare how the issue would effect Baltimore, Maryland just up the Chesapeake Bay. Under the local Baltimore contract, members of the container gang perform the work of lashing and unlashing of containers. In Hampton Roads, the container gang will perform no lashing when lashing or unlashing is required. A lashing gang with a minimum of a header and six men must be utilized. Thus, seven more men must be brought on the job in Hampton Roads by the local agreement to perform lashing.

It can then be easily seen that Baltimore could order four more drivers, as is the custom of some of the employers in Hampton Roads, making a crew of 24 and out of this crew of 24 have all the lashing done. In Hampton Roads, if one wanted four more drivers and had to have lashing performed, one would need a crew of 31. This would include seven more men for a period of a minimum of four hours at a cost of $35.00 per hour per man instead of three-man differential favoring Baltimore which existed on July 31, 1984.

The change of the drivers alone would cause a differentiation of $5.00 per container which for 400 containers would be $2,000.00, plus any extra charges for the lashing crew. This indeed is a substantial differentiation. Presently, the ports to the south are utilizing the Norfolk Agreement, which Norfolk itself can no longer use according to the ILA. There is no question about irreparable injury in this instance. This Court further adopts the findings of August 2, 1984, and the findings it found on August 8,1984, and this opinion is merely an elaboration of those findings.

In conclusion, this Court finds that the ILA, under the provisions of the Hampton Roads contract, must arbitrate this issue rather than attempt to engage in a strike in Hampton Roads. ILA’s reliance on the Emergency Panel determination is not well taken and this Court finds that the panel decided a local grievance applying to the port of Galveston, Texas. This Court further finds that at no time was the Hampton Roads Shipping Association “charged” in accordance with the requirements of Clause 6(A) of the Emergency Panel arbitration provision. The mere reading of the Emergency Panel arbitration provision provides in subparagraph (E) that the “ILA shall have the right to refuse to render service to any carrier or direct employer (but only with respect to the carrier charged) who, after a determination under Steps 1 and 2 above, have been found to have violated the provisions ____” Third, this Court further finds that Paragraph (F) respecting “charges of alleged violations involving more than one port” does not apply because the paragraph deals only with .multi-port issues and bypasses any local grievance step. The notice, the charge and the minutes all apply to Galveston, Texas. It mentioned nothing about the word “driver” but referred to “heavy lift operators” or “port-o-packer operators”. At no time was there any indication of “drivers” and at no time was there any indication that any more than one port was involved. At no time was there any indication that HRS A or Norfolk, Virginia, or anything or any place or anybody other than Galveston, Texas and Union Local 20 of the ILA were involved.

This Court was assured by the ILA that it would hear this grievance on August 16, 1984 in New York before the same panel but it is unknown what was or was not done at that hearing.

Lastly, arbitration is to be preferred over litigation and that a resolution without resort to a strike benefits not only parties but also the public. The status quo of August 1, 1984 should be maintained until this problem is finally resolved. It does not appear that a further hearing in this Court would present any other evidence in conflict with that already offered and neither party has requested an immediate trial which this Court is willing to provide.

      . The last sentence of the second paragraph concerning the 20 cent differential was added as a result of the February 2, 1984 negotiations between the ILA and the Hampton Roads Shipping Association.


author: HARPER, District Judge.

text:
    EXCALIBUR INSURANCE COMPANY, Plaintiff, v. SLAY TRANSPORTATION COMPANY, INC., and Bee Line Trucking Company, Inc., Defendants.
    No. 83-2511C(A).
    United States District Court, E.D. Missouri, E.D.
    Aug. 29, 1984.
    Order Oct. 19, 1984.
    F. Douglas O’Leary, St. Louis, Mo., for plaintiff.
    Thomas A. Connelly, St. Louis, Mo., for defendant.
   MEMORANDUM OPINION

HARPER, District Judge.

This matter is before the Court on the complaint of plaintiff, Excalibur Insurance Company, for insurance premiums and deductibles not paid allegedly owed it from defendants, Slay Transportation Company, Inc. and Bee Line Trucking Company, Inc.

Plaintiff is an insurance corporation duly organized and existing under the laws of the State of Minnesota, is authorized to do business in the State of Missouri, and maintains its principal place of business in the State of Texas.

Defendants, Slay Transportation Company, Inc. and Bee Line Trucking Company, Inc., are corporations organized under the laws of the State of Missouri, with their principal places of business in the State of Missouri. The amount in controversy exceeds ten thousand dollars.

The case was tried before the Court without a jury. Based on the testimony before the Court and the offered exhibits, the following constitutes this Court’s findings of fact:

1) : Defendants, Slay Transportation Company, Inc. and Bee Line Trucking Company, Inc., purchased a policy of insurance, Policy Number 210009878-79, from plaintiff. The policy was in effect from February 5, 1978 to February 24, 1980.

2) : The insurance policy contains a formula for determining the amount of premiums owed plaintiff. This formula is located in the Earned Premium Endorsement, dated February 5, 1978, and the Rate Endorsement, dated February 5, 1979.

3) : The deductibles contained in the policy are as follows:

Cargo deductible of $500.00 for each occurrence with respect to losses resulting from injury to, destruction or loss of goods or merchandise.
Collision loss deductible of $10,000.00 for each occurrence, and the same deductible applies also to property damage and cargo legal liability.

4) : The term “incurred losses” is defined in the earned premium endorsement as “all losses paid by the company during the accounting period, minus salvage and subrogation recoveries thereto, plus reserves as established by the company on outstanding losses.”

5) : The “underwriting expense fee” for each defendant yearly is found by this Court to be as follows:

1978 1979
Slay Transportation $5,810.15 $5,001.78
Bee Line 1,175.53 885.55

6): The “bodily injury paid losses” for each defendant yearly is found by this Court to be as follows:

1978 1979
Slay Transportation 32,306.40 3,000.00
Bee Line 4,819.88 27,000.00

7) : The “bodily injury loss reserves” for each defendant yearly is found by this Court to be as follows:

1978 1979
Slay Transportation .00 33,500.00
Bee Line .00 .00

8) : The “claim supervision expense — bodily injury” for each defendant yearly is found by this Court to be as follows:

1978 1979
Slay Transportation 3,553.70 4,015.00
Bee Line 530.19 2,970.00

9) : The “losses paid other than bodily injury” for each defendant yearly is found by this Court to be as follows:

1978 1979
Slay Transportation 32,543.36 20,925.61
Bee Line 15,478.01 .00

10) : The “loss reserves other than bodily injury” for each defendant yearly is found by this Court to be as follows:

1978 1979
Slay Transportation 5,000.00 .00
Bee Line .00 .00

11) : The “claim supervision fee — other” for each defendant yearly is found by this Court to be as follows:

1978 1979
Slay Transportation 3,003.47 1,674.05
Bee Line 1,238.24 .00

12) : The “loss adjustment expense” for each defendant yearly is found by this Court to be as follows:

1978 1979
Slay Transportation 20,371.38 6,325.61
Bee Line 7,306.24 6,604.88

13) : The “premium tax” for each defendant yearly is found by this Court to be as follows:

1978 1979
Slay Transportation 4,103.54 2,977.68
Bee Line 1,221.92 1,498.42

14) : The “total retrospective charges” obtained by adding the above losses, reserves, fees and taxes are as follows:

1978 1979
Slay Transportation 106,692.00 77,419.73
Bee Line 31,770.01 38,958.85

15) : To be subtracted from the “total retrospective charges” are the “provisional retrospective premiums below:

1978 1979
Slay Transportation 58,101.56 45,470.77
Bee Line 11,755.32 8,050.51

16) : The resulting “retrospective status” of each defendant yearly is found by this Court to result in the following deficits owed by each defendant to plaintiff:

1978 1979
Slay Transportation 48,590.44 31,948.96
Bee Line 20,014.69 30,908.34

17) : Defendant, Slay Transportation Company, Inc. has a credit of $36,000.00 due toward any premiums owed by it to plaintiff.

18) : It is determined by this Court that an additional “premium receivable” is due plaintiff from defendant, Bee Line Trucking Company, Inc., in the amount of $2,732.56.

19) : It is determined by this Court that plaintiff is entitled to receive $4,096.81 from defendant, Slay Transportation Company, Inc., and $1,929.38 from defendant, Bee Line Trucking Company, Inc. for deductibles not paid.

The following constitutes this Court’s conclusions of law:

1) : This Court has jurisdiction over the parties and subject matter of this claim pursuant to 28 U.S.C. § 1332.

2) : The insurance policy issued to defendants by plaintiff is unambiguous in its terms and provisions. This Court’s findings are the result of these unambiguous provisions in the insurance policy.

3) : Defendant has failed to show that the agreed-upon premium tax percentage of four percent in the policy is improper, illegal, or against the public policy of the State of Missouri. Therefore, defendants will be held liable for the percentage agreed upon by the parties as contained in the policy.

4) : The weight of the credible evidence results in a conclusion that plaintiff is due premiums and deductibles owed in the total amount of $48,636.21 from defendant, Slay Transportation Company, Inc.

5) : The weight of the credible evidence supports a conclusion that plaintiff is due premiums and deductibles owed in the total amount of $55,584.97 from defendant, Bee Line Trucking Company, Inc.

Accordingly, judgment is rendered herein in favor of plaintiff, Excalibur Insurance Company, in the amount of $48,636.21 as against defendant, Slay Transportation Company, Inc., and in the amount of $55,-584.97 as against defendant, Bee Line Trucking Company, Inc., with interest as to each amount from the date of the judgment.