383 U.S. 607 (1966), 63, Consolo v. Federal Maritime Commission

Docket Nº:No. 63
Citation:383 U.S. 607, 86 S.Ct. 1018, 16 L.Ed.2d 131
Party Name:Consolo v. Federal Maritime Commission
Case Date:March 22, 1966
Court:United States Supreme Court
 
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Page 607

383 U.S. 607 (1966)

86 S.Ct. 1018, 16 L.Ed.2d 131

Consolo

v.

Federal Maritime Commission

No. 63

United States Supreme Court

March 22, 1966

Argued December 6-7, 1965

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Syllabus

Respondent Flota, a common carrier by water, made an exclusive contract with Panama Ecuador to transport bananas. The contract was executed after a Federal Maritime Board ruling, later reiterated, that Flota's competitor had violated the Shipping Act, 1916 by its exclusive contracts and refusal to allocate banana shipping space among all qualified shippers. Petitioner, a competitor of Panama Ecuador, demanded a reasonable amount of Flota's banana carrying space under the Board's decisions and threatened litigation if rejected. Flota rejected the demand and brought a proceeding before the Board for declaratory relief exonerating it from liability to petitioner. Petitioner then filed a complaint with the Board asking for damages. The actions were consolidated, and the Board ruled that Flota's exclusive contract violated the Shipping Act, and ordered a fair allocation of banana shipping space. Flota, pursuant to the Administrative Orders Review Act, petitioned the Court of Appeals to set aside the order, and the appeal was stayed pending determination of the reparation proceeding. Following the Board's reparation order, Flota and petitioner each appealed, Flota asking that the award and finding of a Shipping Act violation be set aside, petitioner that the award be increased. After holding that it had jurisdiction over the appeals, the Court of Appeals affirmed the Board's finding of a Shipping Act violation, but remanded the case for the Board to consider whether it was inequitable to make Flota pay reparations. The Federal Maritime Commission (FMC) held that it was not inequitable, but reduced the award. Following renewed appeals, the Court of Appeals reversed and vacated the award as inequitable and an abuse of discretion, in effect on the ground that there was substantial evidence to support a conclusion contrary to that reached by the FMC.

Held:

1. The Court of Appeals had jurisdiction to consider petitioner shipper's direct appeal challenging the adequacy of the FMC reparation order. Section of the Administrative Orders Review Act in conjunction with Section 31 of the Shipping Act, 1916 provides a procedure for direct review of FMC orders similar to that applicable to ICC orders. Such orders are reviewable on

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direct appeal by a shipper denied reparations in whole or in part, since the adequacy of a reparation award cannot be challenged in an enforcement proceeding, United States v. Interstate Commerce Comm'n, 337 U.S. 426. Pp. 612-614.

2. Since the jurisdiction of the Court of Appeals had been invoked by the shipper seeking to increase the amount of his damages, that court also had jurisdiction over the carrier's direct review appeal as to the validity of the FMC order and the amount of reparations, whether considered as a consolidated appeal or as an intervenor's cross-claim. ICC v. Atlantic Coast Line R. Co., ante, p. 576. Pp. 614-618.

3. The FMC's finding that it would not be inequitable to require Flota to pay petitioner reparations was supported by substantial evidence, and must be sustained on review. Pp. 618-626.

(a) A reviewing court is not at liberty to weigh the evidence and substitute its discretion for that of the administrative agency. Pp. 619-621.

(b) In determining whether to exercise its discretion to award reparations to a complainant under the Shipping Act, the FMC may be guided by such factors as whether an award would further the Act's enforcement, injury to the shipper, the carrier's culpability, and whether the award would conform to previous application of the Act. P. 622.

(c) The findings that Flota had unjustly discriminated against petitioner and given undue preference to his competitor in violation of the Shipping Act undercut Flota's claimed equities. Pp. 622-623.

119 U.S.App.D.C. 345, 342 F.2d 924, reversed.

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WHITE, J., lead opinion

[86 S.Ct. 1021] MR. JUSTICE WHITE delivered the opinion of the Court.

We have been asked in this case to determine whether the Court of Appeals had jurisdiction to set aside a reparation order of the Federal Maritime Commission which was before it upon the consolidated appeals of the shipper and the carrier, the shipper asking that the award be increased and the carrier asking that it be set aside. In addition, we have been asked to determine whether the Court of Appeals applied the proper standard of review when it set aside the reparation award. We answer the first question in the affirmative and the second in the negative. Accordingly, we reverse.

Flota Mercante Grancolombiana, S.A. (Flota) is a common carrier engaged in carrying bananas from South America to the United States. In July, 1955, it entered into an exclusive two-year carrying contract with Panama Ecuador, a banana shipper, and gave Panama Ecuador an option to renew the contract for an additional three years, subject to its meeting the rate offered by any other shipper. This exclusive contract was executed after the Federal Maritime Board, in June, 1953, had ruled that Flota's competitor, Grace Line, was a common carrier of bananas and had violated the Shipping Act, 1916, §§ 14 Fourth1 and 16 First2 by refusing

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to allocate its banana shipping space equitable among all qualified shippers.3 In April, 1957, the Board reiterated its view that Grace Line had violated the Shipping Act by signing exclusive carrying contracts and it ordered Grace Line to offer to all qualified shippers, upon a fair basis, shipping space on forward-booking contracts not to exceed two years in length.4 One month after this ruling, Flota rejected a bid by Consolo, a banana shipper competing with Panama Ecuador, for the entire shipping space and honored the option given Panama Ecuador by executing to it a three-year exclusive carrying contract. Shortly thereafter, Consolo demanded a "fair and reasonable" amount of the carrying space pursuant to the previous Grace Line decisions of the Board, and threatened to file a complaint if its demand were rejected. Flota rejected the demand, and itself filed a petition before the Board for declaratory relief exonerating it from liability to Consolo. Consolo followed with a complaint before the Board asking for damages. These proceedings were consolidated, [86 S.Ct. 1022] and, in June, 1959, the Board ruled that Flota's three-year exclusive contract with Panama Ecuador

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violated the Shipping Act, §§ 14 Fourth and 16 First, and it ordered Flota to allocate its space fairly among all qualified banana shippers.5 Pursuant to § 2(c) of the Administrative Orders Review Act (64 Stat. 1129, as amended, 5 U.S.C. § 1032(c) (1964 ed.)), Flota petitioned the Court of Appeals for the District of Columbia Circuit to set aside this order. This appeal was stayed pending determination of the reparations proceeding. In March, 1961, the Board ordered Flota to pay Consolo certain reparations for the violation of the Shipping Act.6 Both Flota and Consolo appealed from this reparation order, and each intervened in the appeal of the other, Consolo asking that the reparation award be increased and Flota asking that it be set aside. These appeals were consolidated together with Flota's appeal to set aside the Board's finding of a violation of the Shipping Act.

The Court of Appeals held that it had jurisdiction to consider these appeals. It affirmed the Board's finding that Flota had violated the Shipping Act, but remanded to the Board the issue of reparations so that it could "consider whether, under all the circumstances, it is inequitable to force Flota to pay reparations. . . ."7 On remand, the Federal Maritime Commission8 concluded that it was not inequitable to require Flota to pay Consolo reparations, although it did reduce the amount of the award.9 Again, both Flota and Consolo appealed to the Court of Appeals for the District of

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Columbia Circuit, each intervened in the appeal of the other, and the two appeals were consolidated.10 Again Consolo maintained that the award was too small, and Flota argued that it should be set aside in part or in whole. The Court of Appeals reversed and vacated the reparation award, concluding that,

[i]n view of the substantial evidence showing that it would be inequitable to assess damages against Flota in favor of Consolo, . . . the Commission abused the discretion granted it under Section 22 of the Shipping Act11 [to issue reparation awards]. . . .

119 U.S.App.D.C. 345, 352, 342 F.2d 924, 931. Consolo petitioned this Court for a writ of certiorari to review that decision, which we granted. 381 U.S. 933.

I

The first question we have is whether the Court of Appeals had jurisdiction of the appeals filed by Consolo and Flota.12

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[86 S.Ct. 1023] As we read the controlling statutory provisions, it seems clear that the Court of Appeals had jurisdiction to consider Consolo's direct appeal from the Commission's reparation order granting only part of the relief requested. Section 2 of the Administrative Orders Review Act (5 U.S.C. § 1032 (1964 ed.)) gives the courts of appeals

exclusive jurisdiction to enjoin, set aside, suspend (in whole or in part), or to determine the validity of . . . (c) such final orders of the . . . Federal Maritime Board . . . as are now subject to judicial review pursuant to the provisions of section 830 of Title 46. . . .

Section 830 of Title 46 (§ 31 of the Shipping Act, 1916, 39 Stat. 738, as amended), in turn, says that, "except as otherwise provided," orders of the Federal Maritime Board are reviewable pursuant to the same procedures as are available "in similar suits in regard to orders of the Interstate Commerce Commission. . . ."...

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