California company sues Broward over port dispute
Prevented from doing business at Port Everglades, a California stevedoring company has taken Broward County to court.
Posted on Wed, Jan. 07, 2009 | The Miami Herald
BY PATRICK DANNER
Metro Cruise Services contends Broward is violating federal interstate commerce laws by extending favoritism to the existing stevedoring companies that serve the cruise lines at the port, creating a ''classic oligopoly.'' The companies are ''like a club, operating in a Broward County sanctioned, anti-competitive environment,'' Metro alleges in a lawsuit filed last week.
David Arthur, an assistant county attorney, declined to respond to the suit. Port Everglades staff referred inquiries to Arthur.
The suit appears similar to one filed in 2005 against Miami-Dade County by Florida Transportation Services. Port of Miami's former director repeatedly denied the Fort Lauderdale company a permit because he found there was no need for more stevedores at the port. Stevedoring companies hire longshoremen to handle baggage and cargo.
U.S. District Judge Adalberto Jordan in April found Miami-Dade violated an interpretation of the Commerce Clause of the U.S. Constitution that prevents unreasonable burdens on interstate commerce.
The judge concluded the county was essentially protecting stevedoring companies already at the port.
''Under this protectionist scheme,'' Jordan wrote in his ruling, ``new competitors are not allowed as long as the entrenched nine stevedores are willing to serve the need for stevedore services, even if these new competitors could provide the expanded services in a more advantageous way.''
Florida Transportation Services seeks more than $10 million in damages from Miami-Dade County for lost profits for the six years it was denied a permit, said Jeffrey Crockett, the company's lawyer. A lawyer for the county couldn't be reached. A trial on damages is scheduled for April. Metro is seeking unspecified damages in its lawsuit against Broward County.
Unlike Florida Transportation Services, which was never granted a permit to operate at the Port of Miami, Metro actually received a one-year franchise to operate at Port Everglades beginning in February 2007.
RESTRICTED
But Metro was only allowed to provide services for Norwegian Cruise Lines, Crystal Cruises and any other business it could generate at the port. It wasn't allowed to go after business handled by other stevedoring companies at the port.
Metro did provide some stevedore services during the year, according to its lawyer Charles Lichtman.
But then the company, citing a clerical error, let its franchise lapse after a year and didn't reapply for a franchise until September.
At a meeting in November, Broward County commissioners twice voted against granting a franchise to Metro. Commissioners weren't persuaded Metro could abide by a county code that requires an applicant to prove it can ``attract and retain new business.''
Lichtman called the county's requirement an impossible standard. ''Cruise lines aren't going to give a contract to a stevedore unless the stevedore already has a contract to work at the port,'' he said.
Metro's suit adds the county's code ``restricts interstate commerce because they fail to consider that a new stevedore franchise holder can provide better service for equal or less cost than an existing Port Everglades franchise holder.''
Michael Moskowitz, a Fort Lauderdale lawyer who has defended Broward County in interstate commerce cases, said the county requirement doesn't violate federal law.
''They don't want an unlimited number of companies killing each other out there,'' Moskowitz said. ''They [also] want to promote more business at the port and the way to do that is to ask new companies to the port to bring new business to the port.'' He is not involved in the Metro case.
ELLER MARITIME
Among those opposing awarding Metro a franchise was Eller Maritime, a longtime stevedoring firm that was forced into bankruptcy court by some of its creditors in October. Eller hasn't been providing stevedoring services at the port. Nevertheless, an Eller official told commissioners the company was restructuring and would remain in business at the port.
Metro argues in its suit that Eller's bankruptcy situation should prevent it from having a franchise at the port.