United States v. American Union Transport, 44

Decision Date25 February 1946
Docket NumberNo. 44,44
PartiesUNITED STATES v. AMERICAN UNION TRANSPORT, Inc., et al
CourtU.S. Supreme Court

Appeal from the District Court of the United States for the Southern District of New York.

Mr.Walter J. Cummings Jr., of Washington, D.C., for appellant.

Mr. Harold L. Allen, of New York City, for appellees.

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 appellees are within the coverage of the Shipping Act, 46 U.S.C. § 801, 46 U.S.C.A. § 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 named persons and firms, described as carrying on 'the business of forwarding in foreign commerce.' The 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, 46 U.S.C.A. § 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?'

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. They 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, 46 U.S.C.A. § 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, 4 U.S.C.A. § 801. It refused, however, to enjoin 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 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, 66 S.Ct. 238; or, on the other hand, the statutory phrasing is satisfied by the type of relationship illustrated by the companion cases of State of California v. United States and City of Oakland v. United States, 320 U.S. 577,5 64 S.Ct. 352, 88 L.Ed. 322.

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 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 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 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. State of California v. United States; City of Oakland v. United States, supra. The absence of any such suggestion becomes highly significant by contrast with similar definitions of other statutes more or less related to the Shipping Act. In these Congress when regulating carriers and 'other persons,' repeatedly has made plain the intent to cover only affiliates or other specially limited groups when this has been in fact its purpose.

Thus, in the legislation relating to railroads, forwarders were first covered expressly in 1942. 49 U.S.C. (Supp. IV) § 1002(a)(5), 49 U.S.C.A. § 1002(a) (5). The definition in shortened paraphrase is limited to any 'person,' other than a carrier, holding itself out 'to transport or provide transportation' which 'in the ordinary and usual course of its undertaking' (A) performs the usual functions of a forwarder, 'and (B) assumes responsibility for the transportation of such property from point of receipt to point of destination, and (C) utilizes, for the whole or any part of the transportation of such shipments, the services of a carrier or carriers * * *.' (Emphasis added.) Not only would language so explicitly limited be difficult to apply to a person not performing any part of the 'transportation service' proper, cf. Lehigh Valley R. Co. v. United States, 243 U.S. 444, 37 S.Ct. 434, 61 L.Ed. 839; but the very limitations, altogether absent from § 1 of the Shipping Act, forbid identical constructions of the two definitions. See also, in relation to the different treatment of rail forwarders, the correlated definition of 'service subject to this chapter.' 49 U.S.C. (Supp. IV) § 1002(a)(7), 49 U.S.C.A. § 1002(a)(7).

The same difference applies with reference to the definitions of the term 'employer' in the Railroad Retirement Act of 1937, 45 U.S.C. § 228a, 45 U.S.C.A. § 228a, and the Railroad Unemployment Insurance Act of 1938, 45 U.S.C. § 351 45 U.S.C.A....

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