Opinion ID: 433516
Heading Depth: 2
Heading Rank: 2

Heading: The Alleged Violations of the Coastwise Laws

Text: 23 1. Section 289. Section 289 prohibits any foreign vessel from transporting passengers between United States ports either directly or by way of a foreign port. 46 U.S.C. Sec. 289. At first blush SWC's service would seem to fall within the range of activity that Section 289 proscribes. Most passengers on SWC's foreign-flag vessels are traveling from New York to Florida by way of a foreign port. Were we writing on a tabula rasa we might well agree with appellants that SWC's conduct amounts to an invasion of Section 289's guarantee of domestic monopoly. Contrary agency interpretation of Section 289 and strong indicia that this interpretation reflects the specific intent of Congress constrain us, however. 24 In a letter ruling the United States Customs Service (Customs) specifically approved SWC's proposed indirect New York to Florida passenger service. Interpreting Section 289, Customs stated: The transportation of passengers between ports in the United States either directly or by way of a foreign port, as contemplated by the statute, includes only those cases where but one foreign vessel is involved in the continuous transportation. Customs Ruling 103340 (1978) at 1-2, JA 83-84. Since SWC uses two vessels to provide its indirect New York to Florida service, Customs found no violation of Section 289. The agency's ruling in this case accords with consistent Customs interpretation of Section 289. See Customs Ruling 100636 (1973), JA 82 (In view of the fact that the passengers [on a Maine to Nova Scotia to Florida service] are not transported by a foreign vessel between two ports in the United States, two separate vessels being used with the transfer of the passengers in a foreign country, no violation of section 289    will occur.); Customs Ruling of July 1, 1954 (unnumbered), JA 80. In short, Section 289, as interpreted by Customs, aims at the route of the vessel, not the route of the passengers. 25 We have some trouble seeing how a focus on the route of the vessel rather than the route of the passengers better advances the congressional purpose of assuring domestic monopoly over coastwise transportation of passengers. And even if we are bound to give deference to this agency interpretation of its governing statute, we can of course overturn that interpretation if we find that it is inconsistent with a statutory mandate or    frustrate[s] the congressional policy underlying a statute. NLRB v. Brown, 380 U.S. 278, 291, 85 S.Ct. 980, 988, 13 L.Ed.2d 839 (1965). Two indicia of congressional intent lead us to conclude, however, that Customs' interpretation is not only consistent with the statutory scheme but also accurately embodies Congress' specific intent that Section 289 not prohibit the type of indirect service challenged here. 26 First, Congress has acquiesced in Customs' interpretation for almost a century 5 and has not acted to change it during several revisions of the coastwise laws. When an agency interpretation has been officially published and consistently followed, Congress is presumed to be aware of [the] administrative    interpretation of a statute and to adopt that interpretation when it re-enacts a statute without change[.] Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Curran, 456 U.S. 353, 382 n. 66, 102 S.Ct. 1825, 1841 n. 66, 72 L.Ed.2d 182 (1982). Second, the legislative history of an attempt to amend Section 289 in 1920 indicates that Congress did not intend the section to prohibit the type of service at issue in this case. In a 1920 overhaul of the coastwise laws the Senate Commerce Committee reported out a proposed amendment to Section 289 that would have explicitly prohibited indirect foreign-flag passenger transportation functionally identical to the service at issue here: passengers sailed on Canadian-flag ships from Seattle to Victoria, British Columbia, and transferred there to another Canadian-flag vessel for the trip from Victoria to Alaska. See S.Rep. No. 573, 66th Cong., 2d Sess. 18 (1920). After consideration on the floor, 59 Cong.Rec. 7348 (1920) (remarks of Sen. Jones in favor); id. at 7350 (remarks of Sens. McCumber and Nelson in opposition), the Senate rejected the proposed amendment. In light of these indicia of congressional intent that indirect service involving more than one foreign-flag vessel does not violate Section 289, we hold that SWC's passenger service is not prohibited by the coastwise laws. 27 2. Section 883. In Customs Ruling 103340 Customs approved SWC's proposals for both passenger transport and automobile transport. The ruling stated that automobiles accompanying passengers on a movement not in violation of section 289 would be deemed to be accompanying baggage of passengers and not merchandise within the meaning of Section 883. Customs Ruling 103440 at 2, JA 84. Given that SWC's passenger service does not violate Section 289, we cannot say that the transport of automobiles belonging to passengers violates Section 883. Customs has long treated automobiles accompanying passengers as baggage, not merchandise, see Customs Ruling 104112 (1979), JA 85, and rulings cited therein. This interpretation reflects the basic international understanding that luggage is any article or vehicle except those carried under a bill of lading or other contract primarily concerned with the carriage of goods. Convention Relating to the Carriage of Passengers and Their Luggage by Sea, signed at Athens on December 13, 1974, IMCO No. 75.03E, reprinted in 6 A.W. & C.R. Knauth, Benedict on Admiralty, Doc. 2-2 (7th ed. 1982). Most importantly, we find this interpretation consistent with the congressional intent behind Section 883. In Section 883 Congress aimed at ensuring domestic monopoly for the coastwise shipment of goods. Though SWC transports many automobiles to Florida, the point of the shipment is to provide a service to passengers; they pay the same price whether or not they bring their automobiles. And SWC does not ship automobiles unaccompanied by passengers. Having found that SWC's passenger service does not violate Section 289, we find no reason for holding that the shipment of accompanying automobiles independently violates Section 883. We thus affirm the District Court ruling that this service does not violate Section 883.