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

Heading: This Case Before the Commission

Text: 33 After the Supreme Court decided ILA I, the union insisted that all signatory carriers unaffected by the Commission's Sea-Land decision adhere to the practices mandated by the Rules. Many carriers complied, and the Rules were implemented until the Third Circuit enforced an NLRB order requiring carriers to cease and desist from doing so pending its decision on remand in ILA I. Pascarell v. New York Shipping Ass'n, No. 81-13 (D.N.J.), aff'd, 650 F.2d 19 (3d Cir.1981). The Rules were thus implemented only briefly during January and February 1981. 34 This brief implementation of the Rules, however, prompted several complaints from shippers and freight handlers. In response to these complaints, the Commission opened Docket No. 81-11, an investigation naming over 140 carriers as respondents. New York Shipping Association, the Council of North Atlantic Shipping Associations, the Pacific Maritime Association, and the ILA intervened in support of the carriers and of the Rules. 35 In an Interim Report and Order, the Commission identified five basic issues that the investigation was designed to resolve: 36 (1) must practices determining the availability of carrier-controlled containers be published in FMC tariffs; (2) does the [MLAA] alter the Commission's jurisdiction over tariff rates and practices; (3) is Commission regulation of the Container Rules precluded or limited by the policies of the National Labor Relations Act; (4) does the refusal to furnish containers to non-ILA consolidators located within 50 miles of the carrier's pier, or the other Container Rules practices ... violate sections 14 Fourth, 16 First, 17 or 18(a) of the Shipping Act, 1916; and (5) which of the Respondents have implemented or would necessarily implement all or part of the Container Rules. 37 50-Mile Container Rules Implementation By Ocean Common Carriers Serving U.S. Atlantic and Gulf Coast Ports--Possible Violations of the Shipping Act, 1916, Interim Report and Order, 21 Shpg.Reg.Rep. (P & F) 544, 548 (1982) (hereinafter Interim Report ). 38 The Commission held that because the Rules restrict the shipping public's use of shipping privileges and facilities, [t]he basic features of the Container Rules must be published in an ocean carrier's tariff, id. at 554; that under the tariff matter provision of the MLAA, jurisdiction over the Rules was expressly conferred upon the Commission; and that the Rules were therefore subject to the substantive provisions of the shipping laws. Id. at 556. The Commission also determined that the Rules did not meet the criteria for immunity from Commission scrutiny under the nonstatutory labor exemption recognized in past Commission decisions: 39 The Container Rules have a direct and practical impact upon both labor and shipping interests. Nonetheless, a Commission order prohibiting this particular method of resolving labor/management conflict as an unjust ocean carrier practice would not undermine the basic collective bargaining process created by the National Labor Relations Act, whereas the absence of Shipping Act regulation would eliminate the fundamental premise of the Shipping Act and other common carrier statutes--that similarly situated shippers be treated equally. 40 Id. at 557 (footnote omitted). The Commission referred the remaining issues to an Administrative Law Judge for further hearings. 41 Before the ALJ, the dispute among the parties centered on the extent to which, if any, national labor policy considerations must be taken into account in determining whether the Rules, insofar as they must be set forth in the respondent carriers' tariffs, constituted unreasonable or unjustly discriminatory shipping practices. The ALJ, assaying this conflict, concluded that [w]hat is needed then is to establish a methodology or criteria to be used in reconciling 'labor policy' with the requirements of the shipping statutes. 50 Mile Container Rules Implementation By Ocean Common Carriers Serving U.S. Atlantic and Gulf Coast Ports, Initial Decision, 22 Shpg.Reg.Rep. (P & F) 1660, 1680 (1985) (hereinafter Initial Decision ). In fashioning such a methodology, the ALJ concluded that: 42 The problem reduces itself to one of how far the ILA may go in its work preservation efforts before it impermissibly intrudes upon the rights of [others] to conduct their business free of any discrimination or prejudice resulting from the efforts of the ILA. The answer lies in balancing the harm done to [others] against the benefits derived by the ILA. 43 Id. at 1683. 44 The ALJ acknowledged that the disparate treatment of shippers mandated by the Rules could not be justified by transportation considerations, and that his  'balance of interest' test is not itself without difficulty. Id. at 1684, 1687-88. Nonetheless, the ALJ held that neither the parties urging the Commission to declare the Rules unlawful nor the Commission's Hearing Counsel had demonstrated that the Rules had any measurable impact upon the complaining shippers and cargo handlers. Id. at 1684. Without such a showing, he concluded, the Commission and the complainants had failed to carry their evidentiary burden; the Rules, as a consequence, were upheld. 45 In an exhaustive opinion, the Commission reversed the Initial Decision, rejecting the ALJ's balancing test as an illogical and intellectually untenable exercise. 50-Mile Rules, 24 Shpg.Reg.Rep. at 458. The Commission concluded: 46 [O]ur review of the twenty-year history of efforts by this agency, the [NLRB], the courts and Congress to reconcile the demands of the federal maritime and labor statutes indicates that any effort by the Commission to balance labor considerations against the clear evidence of unreasonable transportation burdens and discriminations before us would represent a failure by the Commission to discharge the duties assigned to us by Congress, and would undermine the balance between labor and shipping interests devised by Congress when it enacted the Maritime Labor Agreements Act of 1980, Pub.L. No. 96-325, 94 Stat. 1021. We believe that our responsibility to take labor considerations into account is limited to ensuring that the appropriate remedy for violations of the Shipping Acts is drawn no more broadly than necessary, so as to avoid any unwarranted impact on the legitimate collective bargaining interests of the carriers and the union. 47 Id. at 415. 48 The Commission also rejected as inappropriately harsh the evidentiary burden the ALJ had imposed on the Commission's Hearing Counsel and the complaining shippers. In the Commission's view, unless the complaining parties were seeking reparations, it is sufficient that the testimony supports and confirms the evidence provided by the text of the Rules themselves. Id. at 460. The Commission went on to note that, in any event, the complainants had adduced substantial evidence of injury. Id. at 461. 49 Applying traditional transportation factors, the Commission held that the shipping practices mandated by the Rules violated sections 14 Fourth, 16 First, 17 second paragraph, and 18(a) of the 1916 Act; sections 10(b)(6)(C), 10(b)(11)-(12), and 10(d)(1) of the Shipping Act of 1984; and section 4 of the Intercoastal Act. Id. at 468. Petitioners now seek review of these rulings. 50