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November 16, 2023–The Supreme Court of the United States (SCOTUS) is currently considering an appeal by the South Carolina Ports Authority (SPA) to overturn earlier decisions by a government agency and a lower court favoring the International Longshoremen’s Association (ILA), which represents thousands of dockworkers on the Atlantic and Gulf Coasts.

The case centers on legal actions taken by the ILA in 2021 that have led to a near shutdown of the Hugh K. Leatherman Terminal, a main container handling facility at the Port of Charleston and a major investment project by the state of South Carolina. 

But SPA Chief Executive Officer Barbara Melvin claims the case goes beyond the Port of Charleston, saying the virtually idle terminal is “a significant supply chain asset for all port-dependent businesses in South Carolina and beyond.” 

She said the case before SCOTUS is of “national importance as it will impact how all operating ports are run.” 

THE ILA FILES SUIT

The ILA filed a lawsuit against the United States Maritime Alliance (USMX) and one ocean carrier in April of 2021, initially seeking damages of $200 million for breach of contract and other infractions that hurt union members. 

The ILA later added a second ocean carrier to the lawsuit, upping the total claim to $300m.

The lawsuit came just after the opening of the Leatherman Terminal in 2021, with the ILA alleging that non-union workers were operating ship-to-shore cranes and other heavy-lift equipment at the facility.

Under its agreement with USMX, which represents ocean carriers in the employment of all dockworkers at the Atlantic and Gulf Coast ports, the ILA claimed that all jobs coming online at new terminals must be given to union members. 

But non-union workers were being employed at the Leatherman Terminal under what the SPA calls its “hybrid” work model which rules that ILA members can move containers around the docks but may not operate cranes or other heavy lift equipment, work that is left to non-union labor.

OCEAN CARRIERS AVOID LEATHERMAN

The impact of the ILA lawsuit was immediate: all other ocean carriers declined to call at the Leatherman Terminal to avoid being included in the union’s legal action. That means the facility has largely been unused, except for the two ocean carriers now being sued by the ILA. 

“Ocean carriers transport goods for U.S. importers and exporters, who benefit from our operational excellence,” the SPA’s Melvin said in a statement. “The union’s intent is to displace our operators with union members.”

The SPA has twice tried to have the ILA’s legal action nullified, first before the National Labor Relations Board and second before the 4th U.S. Circuit Court of Appeals. But the SPA has lost both decisions and has turned to SCOTUS as a result.

THE SPA HAS SUPPORTERS

The SPA is hardly alone in its determination to have the ILA’s case overturned, with six amicus briefs filed in support of the appeal against the union, including one from the State of Georgia and the Georgia Ports Authority (GPA).

In their amicus brief to the Court, Georgia and the GPA stressed the importance of the case in support of the SPA, echoing concerns about the potential impact of the ILA’S lawsuit on other ports in the region.

“The Authority has requested approval to expand and build a new 395-acre terminal that will allow it to move an additional two million containers per year through the Port of Savannah,” the GPA said. “But that plan, and the potential for billions of investment dollars, was jeopardized by the 4th Circuit’s erroneous decision,” the GPA told the Court.

The nine justices on the SCOTUS bench have yet to decide whether they will even review the dispute, much less rule on it. The Court receives some 7,000 appeals each year and generally agrees to hear 100 to 150 of them.

The case comes at a sensitive time, with the ILA’s national contract expiring at the end of September 2024 and negotiations expected to be difficult—even without the complication of a very public and clearly rancorous case before the highest Court in the land.

For more on the Port of Charleston, see Cargomatic’s earlier take here.