New York Shipping Ass'n, Inc. v. Federal Maritime Commission
| Decision Date | 30 July 1980 |
| Docket Number | ZIM-AMERICAN,78-1871,Nos. 78-1479,s. 78-1479 |
| Citation | 202 U.S.App.D.C. 253,628 F.2d 253 |
| Parties | NEW YORK SHIPPING ASSOCIATION, INC., Petitioner, v. FEDERAL MARITIME COMMISSION and United States of America, Respondents, Japan Line, Ltd., Kawasaki Kisen Kaisha, Ltd., Mitsui O. S. K. Lines, Ltd., Nippon Yusen Kaisha, Yamashita-Shinnihon Steamship Co., Ltd., Korea Shipping Corporation, D/S AF 1912, A/S and Svendborg, D/S A/S (Maersk Line), Intervenors.ISRAELI SHIPPING CO., INC., Petitioner, v. FEDERAL MARITIME COMMISSION and United States of America, Respondents, New York Shipping Assoc., Inc., Intervenor. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Petition for Review of Order of the Federal Maritime commission.
Donato Caruso, New York City, with whom C. P. Lambos, New York City, was on brief, for New York Shipping Association, petitioner in No. 78-1479 and intervenor in No. 78-1871.
Allan J. Berdon, New York City, with whom Edwin Longcope and Frederick L. Shreves, II, Washington, D. C., were on brief, for Zim-American and Israeli Shipping Co., Inc., petitioner in No. 78-1871.
Gordon M. Shaw, Atty., Federal Maritime Commission, Washington, D. C., with whom Edward G. Gruis, Deputy Gen. Counsel, Federal Maritime Commission, Robert B. Nicholson, Barry Grossman and Robert J. Wiggers, Attys., Dept. of Justice, Washington, D. C., were on brief, for respondents.
Charles F. Warren and George A. Quadrino, Washington, D. C., also entered appearances for intervenor, Japan Line in No. 78-1479.
Seymour H. Kligler, New York City, also entered an appearance for intervenor Korea Shipping Corporation in No. 78-1479.
Carroll E. Dubuc, Washington, D. C., also entered an appearance for intervenor D/S AF 1912, A/S and Svendborg, D/S A/S in No. 78-1479.
Before McGOWAN and ROBINSON, Circuit Judges, and OBERDORFER, * United States District Judge for the District of Columbia.
Opinion for the court filed by Circuit Judge McGOWAN.
In No. 78-1479, petitioner New York Shipping Association (the Association) seeks review of that part of an order of the Federal Maritime Commission (the Commission) which awards certain members of the Association refunds for overpayments made to the Association's employee-benefits fund. For reasons which appear below, we find that this aspect of the Commission's order was not legally defective, and we affirm it. In No. 78-1871, petitioner Zim-American Israeli Shipping Co., Inc., (Zim) seeks review of that part of the order which denies Zim refunds because of Zim's failure to file a timely claim. For reasons which appear below, we find that this aspect of the Commission's order was arbitrary and capricious, and we reverse it.
For many years, the economic future of American ports was imperilled by chronic labor problems and the obsolescence of port facilities and practices. 1 Eventually, the future of these ports was assured by a series of agreements between labor unions and associations of employers. The essence of these agreements was that modern, mechanized methods should be instituted, and that employees should be secured against ensuing hardships by enhanced benefits. These benefits are paid out of special funds to which a port's employers contribute. Because the Supreme Court held in Volkswagenwerk Aktiengesellschaft v FMC, 390 U.S. 261, 88 S.Ct. 929, 19 L.Ed.2d 1090 (1968), that section 15 of the Shipping Act of 1916, 46 U.S.C. § 814, requires the employer associations to seek the Federal Maritime Commission's prior approval of agreements allocating the burdens of collectively bargained benefits, the administration of these funds is, in effect, supervised by the Commission. We now have before us the latest installment in a protracted dispute over the assessment of contributions to such a fund in the Port of New York.
The New York fund was established in 1968, when a fifty-seven day strike resulted in a collective bargaining agreement between the New York Shipping Association (the Port's employers' organization) and the longshoremen's union. The agreement covered 1969-1971 and, in keeping with the pattern of such agreements, it "assured longshoremen of considerably enhanced fringe and guaranteed-annual-income benefits." New York Shipping Association v. FMC, 571 F.2d 1231, 1234 (D.C. Cir. 1978). Members of the Association contributed to the fund from which these benefits were to be paid in proportion to the number of hours of longshore labor each member used. However, one group of carriers the States Marine Group protested that since its members handled cargo which could only be loaded in labor-intensive, unmechanized ways, assessment by the hour over-burdened them. By 1970, the union had come to fear that this disagreement over assessment methods jeopardized the fund. When the union warned of a second strike, the Association devised a compromise assessment agreement which used both man-hours and weight. The Commission approved the agreement conditionally, "subject to any and all adjustments and conditions as shall be ordered by the Commission in its final disposition of this proceeding." 2 Thus reassured, the ILA forbore to strike.
In 1972, the Commission, pursuant to its obligation under section 15 3 to decide the propriety of the agreement, determined that under the agreement the "Puerto Rican Group" of ocean carriers had been over -assessed, but that, for reasons not relevant here, it also had underpaid. 4 This court upheld the Commission's determination in Transamerican Trailer Transport v. FMC, 492 F.2d 617 (1974). The significant fact for the case at bar is that, since one group had underpaid, other members of the Association had overpaid.
By the time of the Commission's 1972 decision, the 1969-1971 agreement had expired, and the Association had had to use the conditionally approved formula for a second period. In this second period, the Puerto Rican group was not only over-assessed, it also overpaid. In 1974, the Association, apparently prodded by the union, sought to resolve at least some of these assessment difficulties by agreeing with the Puerto Rican Group "to offset the refunds due all other Association members from (the Puerto Rican Group) for the first period against those claimed by (the Puerto Rican Group) from the other members in the second period." New York Shipping Association v. FMC, 571 F.2d 1231, 1236 (D.C. Cir. 1978).
The agreement with the Puerto Rican Group was opposed by the States Marine Group, whose discontent with the original assessment plan had sparked the 1970 compromise plan. In its order approving the agreement with the Puerto Rican Group, the Commission acknowledged the States Marine Group's opposition to the agreement by ordering that that agreement "shall in no way affect or diminish the rights" of the States Marine Group. 5 Those rights were in fact not diminished, for on September 17, 1976, the Commission awarded the States Marine Group the refunds it sought from the Association, 6 an award this court approved in New York Shipping Association v. FMC (NYSA I), 571 F.2d 1231 (D.C. Cir. Jan. 13, 1978).
The Association was also aware, however, that the States Marine Group did not represent the only members who might feel they had overpaid and who thus might wish to seek refunds from the Association. Before the Board of Directors of the Association finally approved the agreement with the Puerto Rican Group, its counsel, Mr. C. P. Lambos, advised it of the
possibility that certain interests such as the break-bulk carriers may seek to recover amounts which they may claim are owing by the Puerto Rican carriers for the 1969-1971 period. In considering this agreement, therefore, this possibility must be weighed. NYSA and ILA counsel nevertheless recommend the proposal to their respective clients.
J.A. NYSA I 822a (emphasis added). This possibility was embodied in the Puerto Rican agreement itself, which stated that it was reached "as between the parties to this agreement, without regard to the continuance of said litigation by any other parties." 7
In its order of September 17, 1976 (the same order in which the Commission awarded refunds to the States Marine Group), the Commission said that, "(s) ince only the States Marine Group, of all the potential recipients of refunds, has participated in this phase of the proceeding and pressed its claim here, it would be inappropriate to attempt to make any determinations with respect to the rights of others to refunds." 8 The Commission therefore announced that during the following sixty days "we will receive filings of claims on behalf of persons other than the members of the States Marine Group for assessment adjustments." 9 The Commission added that, "to insure that all possible claimants will be fully advised, we will publish in the Federal Register a notice of our action herein." 10 Id.
A number of members of the Association responded to the Commission's notice, and on April 3, 1978, the Commission ordered the Association to satisfy the claims of a list of members the Commission found to have properly qualified for refunds. 11 The Commission began by explaining that
(t)he mere facts that the additional claimants, unlike the States Marine Group, did not actively pursue their claims prior to the issuance of our Report and Order herein and were not specifically referred to in settlement agreements do not appear to us to constitute sufficient reasons to demonstrate a settlement, waiver, or agreement not to pursue their claims. As was true with respect to the States Marine Group, "nothing resembling a settlement has been produced on the record here, . . . (and) no such settlement has been approved by us as is required by section 15 of the Shipping Act and as was done with respect to the settlements with the other interests with which NYSA has reached agreements, i. e., the Puerto Rican carriers, newsprint, and automobiles." (Report and...
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