327 U.S. 437 (1946), 44, United States v. American Union Transport, Inc.

Docket Nº:No. 44
Citation:327 U.S. 437, 66 S.Ct. 644, 90 L.Ed. 772
Party Name:United States v. American Union Transport, Inc.
Case Date:February 25, 1946
Court:United States Supreme Court

Page 437

327 U.S. 437 (1946)

66 S.Ct. 644, 90 L.Ed. 772

United States


American Union Transport, Inc.

No. 44

United States Supreme Court

Feb. 25, 1946

Argued October 11, 1945




1. A forwarder of freight for transshipment by common carriers by water in foreign commerce, although not contractually or corporately affiliated with a common carrier by water, held to be "carrying on the business of forwarding . . . in connection with a common carrier by water," hence an "other person subject to this Act" within the meaning of § 1 of the Shipping Act of 1916, and therefore subject to the regulatory provisions of that Act. Pp. 441, 443.

2. The conclusion that independent forwarders are subject to the Act's regulatory provisions is supported by the broad terms of

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its definition of "other person subject to this Act;" by the policy implicit in the scheme of regulation; by the legislative history, and by the decision in California v. United States, 320 U.S. 577. P. 443.

3. A different conclusion is not required by the fact that the administrative agencies had not previously exercised jurisdiction over such forwarders, nor by the history of interstate commerce legislation affecting nonwater transportation, nor by judicial decisions relating to that legislation. Pp. 454-455.

4. The fact that no question is involved of the use of forwarders by carriers to evade regulation gives no basis for relieving independent forwarders from the Act's provisions. P. 456.

5. The wisdom of regulating forwarders -- with the corresponding restriction of competitive freedom in the business -- is a question for Congress, not the court. P. 457.


Appeal from a decree of a district court of three judges, enjoining enforcement of an order of the Maritime Commission. See 55 F.Supp. 682. Reversed, p. 457.

RUTLEDGE, J., lead opinion

MR. JUSTICE RUTLEDGE delivered the opinion of the Court.

The United States appeals from a decree entered by a District Court of three judges permanently enjoining enforcement of an order of the United States Maritime Commission. The order required the appellees and others to answer within thirty days a questionnaire concerning certain aspects of their business transacted during 1940, 194 and 1942.1 The central issue is whether

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appellees are within the coverage of the Shipping Act, 46 U.S.C. § 801, for this purpose.

On August 21, 1942, the Commission, upon its own motion, ordered an investigation concerning the lawfulness of the rules, regulations, practices, and operations of [66 S.Ct. 646] named persons and firms, described as carrying on "the business of forwarding in foreign commerce." T he order stated that, from information before the Commission, it appeared that a certain forwarding firm was engaging in practices which seemed to be in violation of § 17 of the Shipping Act, 46 U.S.C. § 816, and further

that the public interest requires a general inquiry to determine the extent of the said practices among all other forwarders in the port of New York subject to said Act, and the lawfulness of said practices under section 17 thereof. . . .

Accordingly, the Commission sent to the persons and firms named a questionnaire containing the inquiry, among others, "Do you carry on the business of forwarding in connection with common carriers by water in foreign commerce?"2 Each of the appellees answered this in the affirmative.3 But negative answers were given to the question, "Is your company owned or controlled by or affiliated with any shippers for whom you act as forwarder or with any common carrier?"

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In December, 1942, the Commission held public hearings before a trial examiner pursuant to the investigation order. On the second day, the hearings were adjourned sine die so that the Commission might obtain additional information. T hey have not been resumed.

On January 14, 1943, the Commission entered an order, pursuant to § 21 of the Shipping Act, 46 U.S.C. § 820, directing appellees and others to answer a questionnaire relating to their forwarding operations in 1940, 1941, and 1942. The answers were to be filed within thirty days. Before this period expired, appellees instituted this suit to enjoin the carrying out of that order and the general order of investigation. Thereafter, the Commission extended the time for answering the questionnaire, and, on May 18, 1943, withdrew its order of January 14, issuing instead another under § 21. This order, like the earlier one, required the appellees to answer a questionnaire concerning their forwarding operations. The only difference, apparently, was that the information sought was somewhat more extensive. The parties agreed that the suit should be continued as against the order of May 18 without formal amendment of the complaint.

On November 30, 1943, the District Court denied the Commission's motion for summary judgment and granted a temporary injunction restraining execution of the May 18, 1943, order. The injunction was made permanent on November 30, 1944.4 The court held that the Maritime Commission had no jurisdiction over the appellees, since, in its view, they did not come within the definition of the term "other [persons] subject to this Act" given in § 1 of the statute, 46 U.S.C. § 801. It refused, however, to enjoin

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the order of August 21, 1942, on the ground that it had no jurisdiction to annul an order which itself did not adversely affect the complaining parties.

The question we are to review is whether the appellees are included within the designation "other person subject to this Act" as that phrase is defined in § 1 of the Shipping Act. The definition reads:

The term "other person subject to this Act" means any person not included in the term "common carrier by water," carrying on the business of forwarding or furnishing wharfage, dock, warehouse, or other terminal facilities in connection with a common carrier by water.

(Emphasis added.)

Substantially, the issue turns upon the [66 S.Ct. 647] meaning of "in connection with" -- that is, whether some relation of affiliation with the carrier is required, such as that exemplified in Railroad Retirement Board v. Duquesne Warehouse Co., 326 U.S. 446, or, on the other hand, the statutory phrasing is satisfied by the type of relationship illustrated by the companion cases of California v. United States and City of Oakland v. United States, 320 U.S. 577.5

If, as appellees contend, "in connection with" covers only forwarding businesses actually affiliated with a common carrier by water in a corporate sense, or under the control of or pursuant to a continuing contract with such a carrier, then plainly the Maritime Commission is without jurisdiction over these appellees, since none of them is controlled by or affiliated with a common carrier by water in any such manner. All are so-called independent

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forwarders and the case comes down to whether such forwarders are covered by the Act.

There is little or no dispute as to the nature of their business. They are primarily forwarders of freight, as that term is generally understood,6 for transshipment in foreign commerce. The foreign freight forwarding business is a medium used by almost all export shippers. An exporter, intending to send goods abroad, consigns the merchandise to a forwarder, who then makes all the arrangements for dispatching it to a foreign port. The forwarder must arrange for necessary space with the steamship companies, procure and prepare the many documents, obtain permits for the acceptance of freight at piers, and at times must find available storage space for the shipment until steamers are available. If requested to do so, a forwarder will secure whatever insurance is needed.

Forwarders also have many other incidental duties. They check the marks on shipping papers and containers

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in order to be certain that they are in accordance with the regulations of the country of destination. They convert weights and measurements into the metric system when necessary. They keep records, for the convenience of the exporter, of all shipments dispatched. They also prosecute such claims as may be required by the exporter against carriers, insurance companies, and any other parties in interest.

By engaging in these many activities of the forwarding business, independent forwarders -- and particularly the appellees -- act as agents of the shipper. They assume no responsibility for the transportation of goods.

We think the appellees are within the coverage of § 1. This conclusion is required not only by the broad and literal wording of the definition, but also to make effective the scheme of regulation the statute established and by considerations of policy implicit in that scheme, as well as by the legislative history and the decision in the California and Oakland cases, supra. In order to place the discussion of our reasons in statutory as well as factual setting, we sketch below some of the more pertinent [66 S.Ct. 648] statutory provisions. In doing so, we shall emphasize the consequences of including or excluding so-called independent forwarders, like the appellees, for effective administration of the Act and achievement of its policy. But first we turn to the definition in § 1 itself.

The language is broad and general. No intent is suggested to classify forwarders, covering some but not others, just as none appears to divide persons "furnishing wharfage, dock, warehouse, or other terminal facilities" into regulated and unregulated groups. California v. United States; City of Oakland v. United States, supra. The...

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