American Export-Isbrandtsen Lines, Inc. v. Federal Mar. Com'n, 20286.

• Decision Date: 18 January 1968
• Docket Number: No. 20286.,20286.
• Citation: 389 F.2d 962
• Parties: AMERICAN EXPORT-ISBRANDTSEN LINES, INC., et al., Petitioners, v. FEDERAL MARITIME COMMISSION and United States of America, Respondents, Empire State Highway Transportation Association, Inc., Middle Atlantic Conference (MAC), Harbor Carriers of the Port of New York, James Hughes, Inc., Henry Gillen's Sons Lighterage Line, Inc., McAllister Lighterage Line, Inc., and Petterson Lighterage & Towing Corporation, Intervenors.
• Court: U.S. Court of Appeals — District of Columbia Circuit

389 F.2d 962 (1968)

AMERICAN EXPORT-ISBRANDTSEN LINES, INC., et al., Petitioners, v. FEDERAL MARITIME COMMISSION and United States of America, Respondents Empire State Highway Transportation Association, Inc., Middle Atlantic Conference (MAC), Harbor Carriers of the Port of New York, James Hughes, Inc., Henry Gillen's Sons Lighterage Line, Inc., McAllister Lighterage Line, Inc., and Petterson Lighterage & Towing Corporation, Intervenors.

No. 20286.

United States Court of Appeals District of Columbia Circuit.

Argued September 11, 1967.

Decided January 18, 1968.

Mr. Mark P. Schlefer, Washington, D. C., with whom Mr. Stuart C. Law, Washington, D. C., was on the brief, for petitioners.

Mr. Joseph F. Kelly, Jr., Attorney, Federal Maritime Commission, with whom Asst. Atty. Gen. Donald F. Turner and Messrs. James L. Pimper, General Counsel, Federal Maritime Commission, Robert N. Katz, Solicitor, Federal Maritime Commission, Walter H. Mayo III, Attorney, Federal Maritime Commission, at the time the brief was filed, and Irwin A. Seibel, Attorney, Department of Justice, were on the brief, for respondents.

Mr. Herbert Burstein, New York City, of the bar of the Court of Appeals of New York, pro hac vice, by special leave of court, with whom Mr. Joseph Rotwein, Washington, D. C., was on the brief, for intervenor Empire State Highway Transportation Association, Inc.

Mr. Christopher E. Heckman, New York City, of the bar of the Court of Appeals of New York, pro hac vice, by special leave of court, with whom Mr. L. Agnew Myers, Jr., Washington, D. C., was on the brief, for intervenor Harbor Carriers of the Port of New York and certain other intervenors.

Mr. Thomas M. Knebel, Washington, D. C., was on the brief for intervenor Middle Atlantic Conference.

Before DANAHER, BURGER and WRIGHT, Circuit Judges.

J. SKELLY WRIGHT, Circuit Judge:

This case is before the court on a petition to review an order of the Federal Maritime Commission issued and served on May 16, 1966, pursuant to the Shipping Act of 1916, 39 STAT. 728 (1916), as amended, 46 U.S.C. § 801 et seq. (1964). The order deals with certain provisions of the truck and lighterage tariffs filed by the petitioners here, the New York Terminal Conference, and grows out of the New York waterfront investigation ordered by the Commission in October 1963. The purpose of the investigation was to determine whether the rates, rules, regulations and practices contained in petitioners' Lighter Tariff No. 2 and Truck Tariff No. 6 violated Sections 15, 16 and 17 of the Shipping Act.¹

A full and lenghty hearing was conducted at which petitioners and various intervenors were permitted to introduce evidence, cross-examine witnesses and present oral argument. The hearing examiner filed an extensive initial decision and exceptions were taken. On May 16, 1966, the Commission issued its report and order, which generally adopted the findings and recommendations of the examiner. The Commission found that several of petitioners' practices were in violation of the Act and ordered petitioners to modify certain provisions of their tariffs so as to comply with the requirements of the Act. Petitioners object on several grounds to virtually every segment of the Commission's order. Before assessing the order and the objections thereto, it is necessary to summarize briefly the workings of the New York waterfront and the role which petitioners perform there as terminal operators.

Petitioners are companies which operate maritime terminals in New York Harbor. They are associated in the New York Terminal Conference and operate under a Conference Agreement² which permits them to establish uniform reasonable rates and regulations covering loading, unloading and storage of waterborne cargo.³ With respect to oceangoing cargo, these terminal operators enter into negotiated stevedoring contracts with steamship companies, under which the terminal's employees load and unload the vessels.⁴ At least 85 per cent of this cargo is brought to and from the wharf or pier by truck, while the small and diminishing remainder is handled by lighters⁵ and barges which transfer the cargo between the pier (or ship) and some other point in the harbor.

When a trucker arrives at the pier he must check in with a clerk employed by the terminal operator. Once his papers are processed he receives a gate pass and takes his place in line. Though all truck loading must be done by the terminal operators, the trucker has an option either to unload his truck himself or, for an additional charge, to have the terminal operator perform or assist in the unloading. But the so-called "three o'clock rule" of petitioners' truck tariff assures the same-day services of forklift operators and checkers, who must be terminal employees, at straight-time rates only if the unloading is done exclusively by terminal employees. No matter who does the initial unloading, the cargo is then moved by hilo or forklift from the base of the truck to a place of rest on the pier or, occasionally, directly to the hold of the ship. These forklift operators, as well as the checker who inventories the cargo, must be employees of the terminal operators. Though the piers are under their direct authority and control, the operators in Item 16 of Truck Tariff No. 6 disclaim all liability for truck delays, whatever their cause.⁶

Lighter loading and unloading is also done in one of two ways — "over the side" or "to the pier." When the lighter is unloaded "to the pier," it is moored alongside the pier and, using the rigging on the lighter or a crane on the pier, the cargo is transferred from the lighter to the pier. From there the cargo is usually moved to a less congested area for later transfer to the ship. Virtually all "to the pier" operations are performed by the Wm. Spencer Stevedoring Company, whose longshoremen, known as "Chenangos," compose a separate local of the International Longshoremen's Association. The lightermen pay Spencer for unloading the lighter at a negotiated contract rate. When Spencer labor is unavailable, the terminal operators provide the necessary labor for "to the pier" work, also at a negotiated rate.

When a lighter is loaded (or unloaded) "over the side," it is moored along the non-pier side of the oceangoing vessel and the cargo is transferred directly from the hold of the ship to the deck of the lighter (or vice versa), usually with the use of the ship's rigging. This work is always performed by longshoremen employed by the terminal operator in its stevedoring capacity. When the lighter is loaded or unloaded alongside the ship, the lighterman is required under the tariff to pay the terminal operator for the services of its men. Since the cargo need not be transferred either to or from the pier, this procedure avoids one step in the process of getting cargo on or off the ship. The method by which a lighter will be worked and when it will be worked are entirely within the control of the terminal operator who has, by contract, assumed the stevedoring function for the ship. Yet there is no provision in the lighterage tariff for compensation to lightermen for delays within the terminal operator's control.

It is primarily with the foregoing practices that the Commission's investigation and order are concerned.

(1) The truck detention rule.

Much of the testimony before Hearing Examiner Jordan concerned the congestion and excessive delays experienced by truckers waiting to load and unload their trucks at the piers. Petitioners do not take issue with the Commission's amply supported finding that the problem of truck delay is a very serious one,⁷ and they agree that what can reasonably be done should be done to facilitate and expedite the exchange of cargo between trucks and ocean carriers at piers in New York Harbor. Nor do they take issue with the Commission's finding that there are increased operating costs resulting from this inefficient use of equipment and labor which affect the truckers' ability to compete with other modes of transportation.⁸

The examiner, after hearing several witnesses testify of inordinate delays, concluded that the "truckmen have a right to expect handling as expeditiously as possible, and they have a right to get better handling than they have had in many specific cases." He found that the terminal operators' failure to include a reasonable detention rule in their truck tariff violated Section 17 of the Shipping Act,⁹ and ordered them to frame such a rule. However, because delays frequently occur which are not the fault of petitioners, the examiner allowed that the rule should "acknowledge causation and exonerate the terminal for delays which it cannot control."

The Commission adopted the examiner's findings and conclusions.¹⁰ It agreed that the disclaimer of all liability for truck detention in Item 16 of the terminal operators' Truck Tariff No. 6 was a violation of Section 17. While conceding the difficulty the terminal operators might face in drafting a truck detention rule, it affirmed the examiner's order that Item 16 be deleted from the tariff and that a reasonable detention rule which would compensate truckers "for unusual truck delays caused by or under the control of the terminals" be inserted. (Emphasis added.)

Petitioners contend that the Commission's order is arbitrary because inconsistent with its findings. They argue that the order requiring them to frame a rule of liability for truck delays is inconsistent with the finding that "it is virtually impossible to determine responsibility for truck delay because of the many and varied factors which may or do contribute toward a particular instance of delay." But the Commission also found that "* * * most of the delays are within the control of petitioners." It has not told the terminal operators that to free themselves of liability they must prove what the cause of the delay was and that the delay was beyond their control. The Commission may well...