Port of Boston Marine Terminal Assn v. Rederiaktiebolaget Transatlantic

• Citation: 400 U.S. 62,91 S.Ct. 203,27 L.Ed.2d 203
• Decision Date: 08 December 1970
• Docket Number: No. 99,99
• Parties: PORT OF BOSTON MARINE TERMINAL ASSN. et al. v. REDERIAKTIEBOLAGET TRANSATLANTIC
• Court: U.S. Supreme Court

400 U.S. 62

91 S.Ct. 203

27 L.Ed.2d 203

PORT OF BOSTON MARINE TERMINAL ASSN. et al.

v REDERIAKTIEBOLAGET TRANSATLANTIC.

No. 99.

Argued Oct. 22, 1970.

Decided Dec. 8, 1970.

Syllabus

Petitioner Terminal Association, a maritime terminal operators conference operating under an agreement approved by the Federal Maritime Commission (FMC), pursuant to § 15 of the Shipping Act, 1916, revised a tariff on file with the agency by shifting the incidence of a wharf demurrage charge from consignees to carriers. When several carriers refused to pay the revised charge, which had not previously been approved by the FMC, the Terminal Association sued the association that represented them and their agents (Shipping Association). The District Court stayed the proceedings to allow the Shipping Association to obtain from the FMC a ruling on the validity of the change. After a hearing, the FMC concluded, on June 23, 1967, that its prior approval of the revised tariff was not necessary under § 15 of the Act. On September 19, 1967, the Shipping Association filed with the Court of Appeals a petition for review which that court dismissed for lateness. On September 4, 1968, respondent, a carrier that had been assessed charges, made application to the FMC for reconsideration (on the basis of a decision this Court rendered after the FMC's ruling), which the FMC returned as untimely filed under its rules. Thereupon respondent, contending that its agent had inadequately represented it in the proceeding brought by the Shipping Association, sought and was allowed to intervene in the still-pending action in the District Court. That court, concluding that the FMC had primary jurisdiction of the subject matter of the dispute and that the District Court did not have jurisdiction to review the FMC's decision, rendered judgment against the Shipping Association and respondent. Respondent appealed. The Court of Appeals reversed on the merits, after concluding that respondent was not a party to the FMC proceeding and was therefore free to seek independent collateral review in the District Court of that agency's order. Held;

1. The FMC, the agency responsible under the Shipping Act for supervising conferences of marine terminal operators and uniquely qualified to consider disputes involving overall conference policies, had primary jurisdiction over the question whether prior administrative approval of the tariff amendment was required. Pp. 68-69.

2. The District Court correctly concluded that it had no authority to review the FMC's decision, which constituted a final order and as such, under the Administrative Orders Review Act, was exclusively reviewable by the Court of Appeals. Pp. 69-71.

3. Respondent, having been represented by its agent in the administrative hearing and having also had every opportunity to participate before the FMC and to seek timely review in the Court of Appeals, cannot collaterally attack the FMC's order. Pp. 71-72.

4. When the case returned to the District Court, the time for review by the Court of Appeals had expired, precluding any judicial review on the merits of the FMC decision. P. 210.

420 F.2d 419, reversed.

John M. Reed, Boston, Mass., for petitioners.

Daniel M. Friedman, Washington, D.C., for the United States and Federal Maritime Commission, as amicus curiae, by special leave of Court.

George F. Galland, Washington, D.C., for respondent.

Mr. Justice MARSHALL delivered the opinion of the Court.

The underlying dispute here is whether vessel owners or consignees will pay charges¹ for cargo left on the wharves at the Port of Boston. But the central ques- tion we face is whether a resolution of this dispute by the Federal Maritime Commission is binding on respondent. We believe that the Court of Appeals was in error in holding that the Commission's determination was not binding. Accordingly, we reverse.

The Port of Boston Marine Terminal Association is a conference of maritime terminal operators acting pursuant to an agreement² approved in 1962 by the Federal Maritime Commission.³ Prior to 1964, the Terminal Association administered a tariff,⁴ on file with the Commission, which assessed charges against a consignee whenever cargo remained on a pier or wharf for more than five days.⁵ In that year, the Terminal Association, without prior approval of the Commission, shifted the incidence of the tariff so that a daily fee of one-half cent per 100 pounds was charged a carrier-vessel whenever the failure to remove cargo resulted from a strike by longshoremen.

In 1965 there was a longshoremen's strike that caused cargo to be left on the wharves beyond the five-day—free time—limit. Several vessels refused to pay the revised charges; and the Terminal Association brought a state court action for damages and declaratory relief against the Boston Shipping Association, ⁶ an organization representing vessel owners and their agents. Following removal to the United States District Court, the Shipping Association defended on the grounds that the revised tariff was not within the scope of the 1962 Terminal Association agreement and could not become effective without Commission approval.⁷

The District Court stayed the proceedings to allow the Shipping Association to obtain a ruling by the Commission on the validity of the change. On June 23, 1967, after a full evidentiary hearing, the Commission issued a report and order concluding that prior approval was not necessary because shifting the incidence of the charge did not 'constitute a new agreement or a modification to the existing agreement calling for a new * * * rate-fixing scheme not contemplated in the original agreement.'⁸ The Commission also approved the change in the fee structure insofar as the change affected cargo that was in free time when the strike started but held that it was unreasonable within the meaning of § 17 of the Shipping Act, 46 U.S.C. § 816,⁹ to assess charges against the vessel when the cargo was not in free time¹⁰ at the start of the strike.

On September 19, 1967, the Shipping Association petitioned the Court of Appeals for the District of Columbia Circuit for review. But since the petition was filed after the expiration of the 60-day period specified in the Administrative Orders Review Act, 28 U.S.C. § 2344 (1964 ed., Supp. V), the petition was dismissed as untimely. On September 4, 1968, Rederiaktiebolaget Transatlantic, respondent here and one of the carrier-vessels that had been assessed charges, filed an application with the Commission for reconsideration. Transatlantic claimed that it had been represented by an agent¹¹ in the proceeding brought by the Shipping Association and thus had standing to request a rehearing. Transatlantic urged that the Commission's decision was inconsistent with this Court's intervening decision in Volkswagenwerk Aktiengesellschaft v. FMC, 390 U.S. 261, 88 S.Ct. 929, 19 L.Ed.2d 1090 (1968), in that the Commission had held the tariff change could be effective without prior approval. The Commission did not, however, pass on the claim but returned the petition as untimely under its Rules of Practice and Procedure.¹²

Transatlantic did not seek direct judicial review of the Commission's denial of the application for rehearing. Instead, it moved to intervene¹³ in the action still pending in the District Court. Transatlantic argued that its agent had provided inadequate representation and that it would be liable for a substantial portion of any judgment rendered against the agent. Intervention was granted. The District Court refused, however, to review the merits of the Commission's decision and rendered judgment against the Shipping Association and Transatlantic.¹⁴

Transatlantic, the only defendant to appeal, was more successful in the Court of Appeals for the First Circuit. That court concluded that Transatlantic was not a party to the Commission proceeding and, therefore, was free to seek independent collateral review of the merits of the Commission's order in the District Court. The Court of Appeals also accepted Transatlantic's position on the merits and reversed,¹⁵ concluding that the Commission's ruling was indeed inconsistent with Volkswagenwerk.

I

Transatlantic argues that the District Court erred at the outset in referring the case to the Commission. But this Court recognized early in the development of administrative agencies that coordination between traditional judicial machinery and these agencies was necessary if consistent and coherent policy were to emerge. See Texas & P.R. Co. v. Abilene Cotton Oil Co., 204 U.S. 426, 27 S.Ct. 350, 51 L.Ed. 553 (1907). The doctrine of primary jurisdiction has become one of the key judicial switches through which this current has passed. ¹⁶ When there is a basis for judicial action, independent of agency proceedings, as to certain issues to the agency charged as to certain issues to the agency charged with primary responsibility for governmental supervision or control of the particular industry or activity involved. Whitney National Bank in Jefferson Parish v. Bank of New Orleans, 379 U.S. 411, 425, 85 S.Ct. 551, 560, 13 L.Ed.2d 386 (1965). Far East Conference v. United States, 342 U.S. 570, 574—575, 72 S.Ct. 492, 494—495, 96 L.Ed. 576 (1952).

This is an almost classic case for engaging the doctrine. Plainly, the Federal Maritime Commission is primarily responsible for supervising these conferences of marine terminal operators. Just five years earlier, the Commission approved the very agreement that established the basic pattern of this conference's operation, and the scope of this same agreement was the subject of the present dispute. The Commission was uniquely qualified to consider the dispute in light of the overall policies concerning terminal conferences and the conferences' relationship with both carrier-vessels and consignees. The District Court did not err in determining, for purposes of this litigation, that an Article III court, acting on a single,...