New York Shipping Ass'n, Inc. v. Federal Maritime Com'n, AFL-CI

Citation854 F.2d 1338
Decision Date09 August 1988
Docket NumberC,Nos. 82-1347,87-1370,AFL-CI,s. 82-1347
Parties129 L.R.R.M. (BNA) 2001, 1988 A.M.C. 2409, 272 U.S.App.D.C. 129, 57 USLW 2147, 109 Lab.Cas. P 10,681 NEW YORK SHIPPING ASSOCIATION, INC., International Longshoremen's Association,ouncil of North Atlantic Shipping Associations, Atlantic Container Line, Ltd., Dart Containerline Company, Limited, Hapag-Lloyd Aktiengesellschaft, "Italia" S.P.A.N., Nedlloyd Lines B.V., Puerto Rico Maritime Shipping Authority, Sea-Land Service, Inc., Trans Freight Lines, Inc., and United States Lines, Inc., Petitioners, v. FEDERAL MARITIME COMMISSION and United States of America, Respondents. NEW YORK SHIPPING ASSOCIATION, INC., et al., Petitioners, v. FEDERAL MARITIME COMMISSION and United States of America, Respondents, American Trucking Assoc., Inc., American Warehousemen's Assoc., West Gulf Maritime Assoc., National Customs Brokers & Forwarders Association of America, Inc., International Association of NVOCCs, et al., Intervenors.
CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)

Donato Caruso, with whom C.P. Lambos, New York City, for New York Shipping Association, Inc.; William Karas, Washington, D.C., for Atlantic Container Line, Ltd.; Thomas W. Gleason and Ernest L. Mathews, Jr., New York City, for Intern. Longshoremen's Ass'n, AFL-CIO; Robert S. Zuckerman, Edison, N.J., for Sea-Land Service, Inc.; Francis A. Scanlan, for Council of North Atlantic Shipping Associations, were on the joint brief, for petitioners. Nicholas G. Maglaras, New York City, also entered an appearance for New York Shipping Ass'n, Inc. in 87-1370. Edwin Longcope and Allan J. Berdon, New York City, also entered appearances for petitioner, Dart Containerline Co., in 82-1347.

James W. Pewett and Ronald A. Capone, Washington, D.C., entered appearances for petitioner Puerto Rico Maritime Shipping Authority in 82-1347.

Stanley O. Sher, John R. Attanasio and Robert A. Hazel, Washington, D.C., entered appearances for petitioners, Hapag-Lloyd Aktiengesellschaft, "Italia" S.P.A.N. and Nedlloyd Lines in 82-1347.

John C. Cunningham, Atty., Federal Maritime Com'n, with whom Robert D. Bourgoin, Gen. Counsel, Federal Maritime Com'n, Robert B. Nicholson, Robert J. Wiggers, Attys., Dept. of Justice and Gordon M. Shaw, Atty., Federal Maritime Com'n, Washington, D.C., were on the brief, for respondents. C. Jonathan Benner, Atty., Federal Maritime Com'n, Washington, D.C., also entered an appearance for respondent Gerald Ullman, New York City, for Nat. Customs Brokers and Forwarders Ass'n of America, Inc., with whom, Kenneth E. Siegel, Kevin M. Williams, Alexandria, Va., for American Trucking Associations, Inc.; William H. Towle, for American Warehousemen's Ass'n; Raymond P. deMember, Fairfax, Va., for Intern. Ass'n of NVOCC's and Florida Customs Brokers and Forwarders Ass'n, were on the joint brief, for intervenors, American Trucking Ass'n, Inc., et al. in 87-1370. Daniel R. Barney, Alexandria, Va., also entered an appearance for intervenor, American Trucking Ass'n, Inc., in 87-1370.

Federal Maritime Com'n, in No. 82-1347.

R. Frederic Fisher, Lawrence N. Minch, San Francisco, Cal., and Richard D. Gluck, Washington, D.C., were on the brief, for intervenor, West Gulf Maritime Ass'n, in 87-1370.

Before BUCKLEY and D.H. GINSBURG, Circuit Judges and MARKEY, * Chief Judge.

Opinion for the Court filed by Circuit Judge D.H. GINSBURG.

D.H. GINSBURG, Circuit Judge:

These two petitions for review require us to revisit the legal imbroglios arising from a collective bargaining agreement between the International Longshoremen's Association (ILA) and ocean common carriers, known as the Rules on Containers. The Rules implement, in ports along the Eastern Seaboard and the Gulf of Mexico, a technological innovation in the ocean shipping industry referred to as "containerization." The Supreme Court has held that the Rules are a valid work preservation agreement under the federal labor laws, in a case where the "difficult and complex problems" that the Rules pose under the federal shipping laws were "not properly before [the Court]." NLRB v. International Longshoremen's Ass'n (ILA I), 447 U.S. 490, 512, 100 S.Ct. 2305, 2317, 65 L.Ed.2d 289 (1980). These shipping law problems are now ripe for our consideration.

The only issue in No. 82-1347 is whether the Commission properly assumed jurisdiction over the provisions of the Rules filed in carrier tariffs. 1 In No. 87-1370, we review the Commission's decision on the merits that certain shipping practices mandated by the collectively bargained for Rules violate, as published in tariffs, the shipping laws. 2

The Commission held that its regulatory jurisdiction extends to those provisions of the Rules that must be published in the tariffs of the signatory carriers. In exercising that jurisdiction, the Commission concluded that "any effort ... to balance 'labor considerations' against the clear evidence of unreasonable transportation burdens and discriminations before [it] would represent a failure ... to discharge the duties assigned to [it] by Congress...." "50 Mile Container Rules" Implementation by Ocean Common Carriers Serving U.S. Atlantic and Gulf Coast Ports, 24 Shpg.Reg.Rep. (P & F) 411, 415 (1987) (hereinafter 50-Mile Rules ). Analyzing the Rules under "traditional transportation factors," the Commission held that the shipping practices mandated by the Rules were unreasonable and unjustly discriminated against certain classes of shippers.

Accordingly, the respondent carriers were ordered to cease and desist from publishing the Rules in their tariffs and from enforcing them. In Part I of this opinion, we discuss the background to this dispute, containerization and its effect on the shipping industry, the Rules and prior litigation surrounding them, and the proceedings before the Commission in this case. In Part II, we determine that this court has jurisdiction over the petition for review in No. 82-1347, and that the Commission properly assumed jurisdiction over the Rules as carrier tariffs. In Part III, we uphold the Commission's conclusion that the Rules were unreasonable and discriminatory insofar as transportation criteria alone are considered, and approve its determination to exclude from its analysis the labor policy considerations urged upon it by petitioners.

Having found that the Commission's decisions concerning both the scope of its jurisdiction and the substantive validity of the Rules are consistent with its statutory mandate, and that substantial evidence supports its ruling on the merits, we deny the petitions for review.

I. BACKGROUND

The introduction of container technology revolutionized the maritime shipping industry, altering in fundamental ways the methods by which large quantities of ocean-bound cargo are handled and transported. It has been hailed as "the single most important innovation in ocean transport since the steamship displaced the schooner." ILA I, 447 U.S. at 494, 100 S.Ct. at 2308 (quoting Ross, Waterfront Response to Technological Change: A Tale of Two Unions, 21 Lab.L.J. 397, 398 (1970)).

A. Containerization and the Rules

Containerization is important to the shipping industry primarily because it is an efficient intermodal means of transporting ocean-bound cargo to and from inland origins or destinations. Both shippers (those seeking to have cargo transported) and carriers (those actually transporting the cargo) benefit from the efficiencies of containerization. Before containerization was implemented, all cargo to be shipped by ocean common carriers was transported to the pier from inland origination points by truck or railcar. The loose, or "break-bulk," cargo was there unloaded by employees of the ocean carriers or of stevedoring companies, known as longshoremen. These workers then transferred the cargo piece by piece to the ship. This process is self-evidently labor-intensive, requiring longshoremen to check and sort the cargo, place it on pallets, hoist it by means of a forklift or hook onto the deck of the ship, and stow it into the ship's hold. For incoming cargo, the process was essentially reversed.

Containers eliminate much of the on-pier handling of cargo. They are large metal receptacles that can be loaded (or in the parlance of the trade, "stuffed") at off-pier facilities, attached to a truck chassis or a rail flatcar at those facilities, transported to a pier, and finally, loaded directly into specially designed "container ships." The containers can likewise be removed from the ship and transported directly to the ultimate consignee for unloading (or "stripping"). Containers thus link land-bound methods of transportation to ocean-bound methods, with obvious advantages:

The use of containers is substantially more economical than traditional methods of handling cargo. Because cargo does not have to handled and repacked as it moves from the warehouse by truck to the dock, into the vessel, then from the vessel to the dock and by truck or rail to its destination, the costs of handling are significantly reduced. Expenses of separate export packaging, storage, losses from pilferage and breakage, and costs of insurance and processing cargo documents may also be decreased. Perhaps most significantly, a container ship can be loaded or unloaded in a fraction of the time required for a conventional ship. As a result, the unprofitable in-port time of each ship is reduced, and a smaller number of ships are needed to carry a given volume of cargo.

ILA I, 447 U.S. at 494-95, 100 S.Ct. at 2308-09 (footnotes omitted). See generally Note, Containerization and Intermodal Service in Ocean Shipping, 21 STAN.L.REV. 1077, 1078 (1969).

The efficiencies of containerization as a means of transporting cargo between shippers and carriers have also been exploited by various cargo-handling businesses. "Non-vessel operating common carriers" (NVOs), also referred to as consolidators,...

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