Opinion ID: 510613
Heading Depth: 3
Heading Rank: 2

Heading: Shipping Law Issues

Text: 23 Well before the Supreme Court decided the labor law issues in ILA I and ILA II, the Rules were embattled under the shipping laws before the Federal Maritime Commission. On March 15, 1973, two common carriers, Sea-Land Services, Inc. and Gulf Puerto Rico Lines, Inc., filed with the Commission proposed amended tariffs, which included provisions of the Rules on Containers then in effect. The Commission, acting pursuant to its authority under the Intercoastal Shipping Act, 1933, 46 U.S.C.App. Sec. 843 et seq. (1982), suspended the tariffs and instituted an investigation to determine whether the Rules, if implemented by the carriers, violated specified sections of the Shipping Act, 1916, 46 U.S.C.App. Sec. 813 et seq., and the Intercoastal Act. 24 Hearings were conducted before an Administrative Law Judge (ALJ), who concluded that the Commission properly exercised jurisdiction over the Rules and that the Rules violated all the cited provisions of the shipping laws. Sea-Land Serv., Inc. and Gulf Puerto Rico Lines, Inc.--Proposed Rules on Containers, Initial Decision, 21 F.M.C. 7 (1978). The ALJ noted the fundamental truth ... that the FMC has jurisdiction over tariffs (rules, rates, etc.) of ocean common carriers, from which it followed the FMC clearly has jurisdiction over the lawfulness of [the] tariff rules under investigation. He went on to observe that unlawful tariff rule discrimination is unlawful tariff rule discrimination, regardless of the fact that it may have been caused by a work preservation rule, and it matters not at all whether the work preservation rule is lawful in and of itself. Id. at 29. 25 The Commission adopted the ALJ's decision, changing only the effective date of the cease and desist order. In discussing the parties' exceptions to that decision, however, the Commission addressed the issue of labor policy considerations in somewhat different terms than had the ALJ. It concluded that 26 the existence of a collective bargaining agreement which affects but is not a part of the transportation aspects of a shipper's relationship with his carrier, need not be given overwhelming priority or weight as a transportation factor by which to justify dissimilarity of treatment [among shippers]. We may agree that such an agreement is a factor to be considered. However, there are other factors. The mere existence of a collective bargaining agreement does not pre-empt those other factors or foreclose our consideration of them.... We do not view the impact of the National Labor Relations Act as permitting a common carrier to disregard entirely its statutory obligations when conducting and resolving labor/management negotiations. 27 Sea-Land Serv., Inc. and Gulf Puerto Rico Lines, Inc.--Proposed Rules on Containers (Sea-Land), 21 F.M.C. 1, 4 (1978) (emphasis in original). 28 The Commission's decision came before this court for review, but the only issue briefed by the petitioners was whether the Commission had jurisdiction to investigate the carriers' tariffs. CONASA, 672 F.2d at 179. The carriers seeking review there argued that practices arising out of the terms of a collective bargaining agreement, even if they must be set forth in the carriers' tariffs, are exempt from Commission scrutiny for either or both of two reasons: (1) the limitations on the Commission's jurisdiction set forth in section 5 of the Maritime Labor Agreements Act of 1980 (the MLAA), 46 U.S.C.App. Sec. 841c; and (2) a nonstatutory labor exemption. 29 We rejected these arguments, holding first that section 6 of the MLAA, which states that that law shall not affect ... formal Commission proceedings prior to the date of [its] enactment, Pub.L. No. 96-325, 94 Stat. 1021 (1980), rendered the jurisdictional limitations that section 5 placed on the Commission inapplicable to the case. CONASA, 672 F.2d at 182-83. We also found it was unnecessary to determine 30 whether [a] nonstatutory [labor] exemption applies to the substantive provisions of the shipping laws, because the Rules on Containers would not qualify for such an exemption under the definition adopted by the Supreme Court. In 1978 the Court decided, in FMC v. Pacific Maritime Ass'n [(PMA), 435 U.S. 40, 98 S.Ct. 927, 55 L.Ed.2d 96 (1978) ], that an agreement is not exempt if it directly imposes terms on persons or entities outside the agreement.... We conclude that, because enforcement of the Rules on Containers by inclusion in steamship company tariffs imposes terms on third parties, it raises shipping law issues which are within the FMC's statutory responsibilities. 31 Id. at 183. 32 Although we thus concluded that the Commission properly exercised jurisdiction over the Rules in that case, we remanded the matter on the merits. Two important Supreme Court cases bearing on the issues before the Commission had been decided between the Commission's final order and our decision on review. See PMA, supra; ILA I, supra. We thought that, [i]n the interests of justice, the FMC should have the opportunity to reconsider its previous determination in light of these two decisions. CONASA, 672 F.2d at 189. On remand, the Commission reaffirmed its initial opinion. By order of this court, however, further proceedings in that case were held in abeyance pending the Commission's decision in the investigation presently before us.