Consolo v. Federal Maritime Commission

• Decision Date: 22 March 1966
• Docket Number: No. 63,63
• Citation: 86 S.Ct. 1018,16 L.Ed.2d 131,383 U.S. 607
• Parties: Philip R. CONSOLO, Petitioner, v. FEDERAL MARITIME COMMISSION et al
• Court: U.S. Supreme Court

383 U.S. 607

86 S.Ct. 1018

16 L.Ed.2d 131

Philip R. CONSOLO, Petitioner,

v FEDERAL MARITIME COMMISSION et al.

No. 63.

Argued Dec. 6 and 7, 1965.

Decided March 22, 1966.

[Syllabus from pages 607-608 intentionally omitted] Robert N. Kharasch, Washington, D.C., for petitioner.

Richard A. Posner, Washington, D.C., for United States and Federal Maritime Commission, pro hac vice, by special leave of Court.

J. Alton Boyer, Washington, D.C., for respondent, Flota Mercante Grancolombiana, S.A.

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 Penama 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 Fourth ¹ and 16 First,² by refusing 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 and, in June, 1959, the Board ruled that Flota's three-year exclusive contract with Panama Ecua- dor 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 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, 85 S.Ct. 1764, 14 L.Ed.2d 698.

I.

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

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 * * *.' Accordingly, if pursuant to provisions in the Interstate Commerce Act a shipper can bring a direct review proceeding to challenge the adequacy of a reparation award issued by the interstate Commerce Commission, he should be permitted to bring a similar proceeding to challenge the adequacy of a reparation award from the Federal Maritime Commission, subject of course to any special provisions applicable to maritime cases such as the provision in § 2 of the Administrative Orders Review Act that direct review proceedings shall be conducted in the courts of appeals rather than the district courts.

The Court has previously held that an order of the Interstate Commerce Commission denying a shipper's reparation claim is subject to direct review at the instance of the shipper, United States v. Interstate Com- merce Comm., 337 U.S. 426, 69 S.Ct. 1410, 93 L.Ed. 1451, primarily because the adverse order would be wholly unreviewable unless the shipper is permitted to bring an appeal. See Rochester Tel. Corp. v. United States, 307 U.S. 125, 59 S.Ct. 754, 83 L.Ed. 1147. Likewise, in D. L. Piazza Co. v. West Coast Line, Inc., 2 Cir., 210 F.2d 947, cert. denied, 348 U.S. 839, 75 S.Ct. 42, 99 L.Ed. 661, the Court of Appeals for the Second Circuit was of the opinion that the principles of United States v. Interstate Commerce Comm. were authority for allowing the shipper to seek direct review of an order of the Federal Maritime Board denying a major part, but not all, of the shipper's reparation claim. We think Piazza was correct in this respect and we accordingly agree with the court below that it would have jurisdiction to consider Consolo's appeal.

As for Flota's appeal, much of what we have said in Interstate Commerce Comm. v. Atlantic Coast Line R. Co., 383 U.S. 576, 86 S.Ct. 1000, decided today, is pertinent to our consideration here. In that case, where direct review had not been sought by the shipper, we held that the carrier may have review of a reparation order of the Interstate Commerce Commission only in connection with the shipper's enforcement action under § 16(2) of the Interstate Commerce Act. Section 30 of the Shipping Act, 39 Stat. 737, as amended, provides for a similar action by the shipper to enforce a reparation award by the Maritime Commission and extends certain procedural advantages to the shipper generally comparable to those provided by § 16(2) of the Interstate Commerce Act. He has a wide scope of venue; he is not liable for costs unless they accrue on his own appeal; he is allowed reasonable attorney fees if he ultimately prevails; he is the beneficiary of broad service of process and joinder provisions; and the findings and order of the Commission are given prima facie effect in the enforcement action. These advantages were given to the shipper because he was considered generally to be the weaker party in the controversy and he serves an impor- tant role in the enforcement of the Shipping Act. It was to protect advantages similar to these by preventing the carrier from emasculating the enforcement action that we concluded in Interstate Commerce Comm. v. Atlantic Coast Line R. Co., that the carrier could not seek review of the reparation award except in connection with a shipper's enforcement action. It is readily apparent, we think, that this holding is applicable to Shipping Act cases when the shipper himself has not sought direct review in the Court of Appeals.

Here, however, the jurisdiction of the Court of Appeals has been invoked by the shipper, who seeks to increase the amount of his damages. In these circumstances, we find nothing in the Shipping Act or the Administrative Orders Review Act that would prevent the Court of Appeals from also considering Flota's request, either...