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

Heading: The Scope of the Commission's Jurisdiction Under the Maritime Labor Agreements Act

Text: 66 The Commission's jurisdiction over carrier practices and agreements arising out of or related to collective bargaining agreements has been a contentious issue for the past twenty years. See generally Godwin & Hilton, A History of FMC Jurisdiction Over Maritime Labor Agreements, 53 TRANSP.PRACT.J. 127 (1986). The knotty legal issues and policy considerations associated with this long-running dispute have been exhaustively considered and discussed, primarily in the context of the Commission's power to review and approve maritime agreements under section 15 of the 1916 Act. 67 Until section 15 of the 1916 Act was superseded by the 1984 Act, carriers were required to file with the Commission certain agreements into which they entered with another such carrier or other person, 46 U.S.C. Sec. 814 (1982), and the Commission was empowered to 68 disapprove, cancel or modify any agreement ... that it finds to be unjustly discriminatory or unfair as between carriers, shippers, exporters, importers, or ports, or between exporters from the United States and their foreign competitors, or to operate to the detriment of the commerce of the United States, or to be in violation of this Act, and shall approve all other agreements. 69 Most significantly, section 15 further provided that any such agreement was lawful only when and as long as approved by the Commission; before approval or after disapproval it shall be unlawful to carry out in whole or in part, directly or indirectly, any such agreement.... 70 For many years, the Commission resisted the suggestion that maritime collective bargaining agreements were subject to the pre-implementation filing and approval requirements of section 15. PMA, 435 U.S. at 64, 98 S.Ct. at 941 (Powell, J., dissenting). Subjecting collective bargaining agreements to such procedures might, as Justice Douglas noted, frustrate the collective bargaining process, exposing the parties to possibly lengthy freezing or stultification of solutions to troublesome labor problems while an intimate part of the proposed agreement is sent to the FMC for approval. Volkswagenwerk v. FMC, 390 U.S. 261, 312, 88 S.Ct. 929, 956, 19 L.Ed.2d 1090 (1968) (Douglas, J., dissenting); see Pacific Maritime Ass'n v. FMC, 543 F.2d 395 (D.C. Cir.1976) (noting that the pre-implementation filing and approval requirements of section 15, if applied to collective bargaining agreements, make nearly impossible the maintenance or prompt restoration of industrial peace), rev'd, PMA, supra. 71 Collective bargaining agreements were not categorically exempt from the Commission's jurisdiction under section 15, however. The Supreme Court concluded that 72 Section 15 on its face reaches any contract between carriers controlling, regulating, preventing, or destroying competition. If a contract is of that nature, it is within the reach of Sec. 15 and subject to the Commission's jurisdiction, and it is quite untenable to suggest that collective-bargaining contracts never control, regulate, prevent, or destroy competition. 73 PMA, 435 U.S. at 53, 98 S.Ct. at 935 (emphasis in original). 74 In 1980 Congress limited the effect of the Court's decision in PMA by enacting the MLAA, Pub.L. No. 96-325, 94 Stat. 1022 (1980) (codified in scattered portions of 46 U.S.C.), section 5 of which provides: 75 The provisions of this chapter and of the Intercoastal Shipping Act, 1933, shall not apply to maritime labor agreements and all provisions of such agreements.... And that: 76 Notwithstanding the preceding sentence, nothing in this c apter shall be construed as providing an exemption from the provisions of this chapter or of the Intercoastal Shipping Act, 1933, for any rates, charges, regulations, or practices of a common carrier by water in interstate commerce or other person subject to this chapter which are required to be set forth in a tariff, whether or not such rates, charges, regulations or practices arise out of, or are otherwise related to a maritime labor agreement. 77 46 U.S.C. Sec. 841c. 78 The Commission, addressing the jurisdictional limitations of section 5 in its Interim Report, concluded that the basic features of the Container Rules must be published in an ocean carrier's tariff. Interim Report, 21 Shpg.Reg.Rep. at 554. The agency ruled that a container is a facility within the meaning of section 18(b)(1) of the Shipping Act, and explained that a tariff notifies the shipping public of the 'privileges and facilities' offered by ocean carriers, the conditions applicable to the use of these privileges and facilities, and all rates and charges assessed. Id.; see 46 U.S.C. Sec. 817(b)(1) (describing tariff filing requirements). As a consequence, it concluded that practices in the Rules affecting the provision and use of containers must be published in the signatory carriers' tariffs. Id. 5 It then concluded that 79 although various phrases associated with section 5 are susceptible to more than one interpretation, the language of the entire statute and its legislative history taken as a whole firmly support the conclusion that the MLAA preserves the status quo concerning Shipping Act regulation of labor-related activities under the Shipping Act sections other than section 15. A tariff practice arising out of or otherwise related to a maritime labor agreement therefore includes practices described by language taken verbatim from a labor agreement and practices mandated by the terms of the agreement. Any other interpretation would render the second sentence of MLAA section 5 meaningless. 80 Id. at 555. The Commission thus held that notwithstanding the general exemption for maritime labor agreements in the first sentence of section 5, the tariff matter provision that follows in the second sentence renders the Rules subject to the Commission's regulatory jurisdiction. 81 The petitioners dispute the Commission's interpretation of section 5. They argue that the statutory language is clear, categorically exempting all maritime labor agreements from all regulation under the shipping laws. They construct the following pair of syllogisms to support their plain meaning argument: Syllogism I 82 Major premise: Maritime labor agreements are exempt from all provisions of the shipping statutes. 83 Minor premise: The tariff filing requirements of [section] 18 of the 1916 Act, [of section] 2 of the 1933 Act and [of section] 8 of the 1984 Act are provisions of the shipping statutes. 84 Conclusion: Maritime labor agreements are exempt from the tariff filing requirements of the shipping statutes. Syllogism II 85 Major Premise: Only matters required to be set forth in a tariff lose the statutory labor exemption. 86 Minor Premise: Maritime labor agreements are not required to be set forth in a tariff (Conclusion of Syllogism I). 87 Conclusion: Maritime labor agreements do not lose their statutory labor exemption. 88 The petitioners contend that giving effect to this plain meaning of section 5 would not, as the Commission claimed, render the tariff matter provision meaningless. In their view, that sentence would still apply to unilateral carrier practices that implement collective bargaining agreements such as the Rules, because such unilateral practices are not maritime labor agreements within the exemption from FMC jurisdiction provided by the first sentence of section 5. 6 It is thus the Commission's interpretation that does violence to the language of section 5, they argue, because before the MLAA was enacted only two types of labor agreements triggered the Commission's jurisdiction: (1) those that affected carriers' relations with other carriers, which were subject to pre-implementation filing with the Commission and approval under section 15; and (2) those that affected carriers' relations with shippers, which were subject to the tariff filing requirements of section 18 of the 1916 Act. Under the Commission's interpretation, only those agreements subject to section 15 would gain an exemption, even though the first sentence of section 5 on its face extends the exemption for maritime labor agreements to the other provisions of the 1916 Act as well. 89 In Volkswagenwerk v. FMC, supra, the Supreme Court held that [t]he construction put on a statute by the agency charged with administering it, is entitled to deference by the courts, and ordinarily that construction will be affirmed if it has a 'reasonable basis in law.'  Volkswagenwerk, 390 U.S. at 272, 88 S.Ct. at 935 (quoting NLRB v. Hearst Publications, 322 U.S. 111, 131, 64 S.Ct. 851, 860, 88 L.Ed. 1170 (1944) and Unemployment Comm'n v. Aragen, 329 U.S. 143, 153-54, 67 S.Ct. 245, 250, 91 L.Ed. 136 (1946)). More recently, in a series of cases, the Court has clarified the nature of the judicial role in deciding claims that an agency has misinterpreted a statute it is charged with administering. That role is fulfilled by engaging in a two-step analysis. First, using traditional tools of statutory construction, we must determine whether Congress has spoken to the disputed issue with clarity. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 2781, 81 L.Ed.2d 694 (1984). If, in step one of that analytic exercise, the court is unable to discern a clear congressional resolution of the disputed issue, then the question for the court is whether the agency's answer is based on a permissible construction of the statute. Id. at 843, 104 S.Ct. at 2782; see NLRB v. United Food and Commercial Workers Union, Local 23, --- U.S. ----, 108 S.Ct. 413, 421, 98 L.Ed.2d 429 (1987); INS v. Cardoza-Fonseca, 480 U.S. 421, 107 S.Ct. 1207, 1220-21 & n. 29, 94 L.Ed.2d 434 (1987); Continental Air Lines, Inc. v. Department of Transportation, 843 F.2d 1444, 1449 (D.C. Cir.1988). 90 For present purposes, we need not explore the question whether the Commission administers the MLAA or, if it does, how rigorously we must scrutinize the Commission's interpretation of section 5 in order to determine whether that interpretation is permissible under step two of the analysis mandated by Chevron. Our independent examination of the text of section 5 and its legislative history leads us to conclude that the meaning and purpose of that section can fairly be discerned. In the terms the Supreme Court used in Chevron, we conclude that Congress has directly spoken to the precise question at issue. Chevron, 467 U.S. at 842, 104 S.Ct. at 2781. Even if it could fairly be said that Congress has not spoken to this issue with utter clarity, moreover, we would be inclined to accept the Commission's interpretation as reasonable, no matter how strictly that term is applied. 91 In CONASA, we opined that the second sentence of section 5 92 appears to retain existing FMC jurisdiction over the Rules on Containers as applied to shipping customers through steamship tariffs. Explicitly aware of the clash of interests created by the Rules, Congress sought to retain FMC jurisdiction to scrutinize the Rules' adverse effects upon shippers. 93 CONASA, 672 F.2d at 182. 94 To be sure, this passage from CONASA is merely dicta, because the case was resolved under section 6 of the MLAA, which excluded from the reach of section 5 all formal Commission proceedings commenced prior to the date of enactment of the MLAA. Id. at 182-83 (quoting MLAA section 6). Having reexamined the text of the statute and its legislative history, we are nonetheless convinced that our original impression was correct. 95 The text of the tariff matter provision makes clear that it qualifies the scope of the exemption in the first sentence. That is the unambiguous meaning of the phrase notwithstanding the previous sentence. As if to reinforce the qualifying nature of the provision, Congress then stated that nothing in this section shall be construed as providing an exemption ... for any rates, charges, regulations, or practices of a common carrier ... which are required to be set forth in a tariff, whether or not such rates, charges, regulations, or practices arise out of, or are otherwise related to a maritime labor agreement. Given the obvious and rational meaning conveyed by this language--that the exemption simply does not apply if, prior to the MLAA's enactment, the terms of the agreement in question must have been published in a tariff--we readily reject the unnatural interpretation offered by the petitioners. American Trucking Ass'ns v. ICC, 602 F.2d 444, 449-50 (D.C. Cir.1979). 96 The petitioner's syllogisms ignore the qualifying nature of the second sentence, effectively redacting the phrase notwithstanding the previous sentence. Indeed, their second syllogism turns the statute on its head, treating the first sentence of section 5 as an exception to the provision. 97 We also agree with the Commission that, under the petitioners' construction, the tariff matter provision would add nothing to section 5. As we have noted above, when a carrier unilaterally implements practices mandated by the terms of a collective bargaining agreement, and publishes those practices in its tariff, section 5 does not apply, because unilateral practices are not maritime labor agreements as defined in section 2 of the MLAA, 46 U.S.C.App. Sec. 801. It is this definitional limitation, not the tariff matter provision in the second sentence of section 5, that excluded such practices from the concern of the exemption in the first sentence of section 5. Petitioner's interpretation therefore offends the principle that, in construing statutes, one must wherever possible give effect to each word or sentence that the legislature has chosen in expressing its will. Central & Southern Motor Freight Tariff Ass'n v. United States, 757 F.2d 301, 319 (D.C. Cir.1985). 98 Petitioners' argument that the tariff matter provision is limited to unilateral carrier practices is also anomalous in view of MLAA's legislative history and the basic economic considerations underlying its purpose. The original version of section 5 was introduced in the House of Representatives. As we have previously observed, The House bill removed FMC jurisdiction to review maritime labor agreements, before or after implementation, or to determine their legality under the substantive provisions of the shipping law. CONASA, 672 F.2d at 181 (citing H.R.REP. NO. 876, 96th Cong., 2d Sess. 11 (1980)). The Senate Committee on Commerce, Science, and Transportation, however, agreed with shippers, consolidators, and others that the broad exemption in the House bill stripped the FMC of jurisdiction to assure equal treatment of shippers, cargo, and localities and to prevent abuses made possible by one [sic] concerted activity of carriers and others. S.REP. NO. 854, 96th Cong., 2d Sess. 10 (1980). This prompted the Senate to propose an amended bill, in the nature of a substitute, that featured the tariff matter provision, mak[ing] it clear that the exemption granted would not affect the authority of the Commission to exercise authority [sic] over matters which are properly the subject of tariffs required to be filed with the agency, whether or not those matters arise out of a maritime labor agreement. Id. at 14. The revised bill, as thus authoritatively interpreted, was adopted by the Senate without debate, and was passed by the House without further comment on the provision. It is therefore clear that carriers may not, by implementing the terms of a collective bargaining agreement negotiated by a multiemployer bargaining agent, insulate themselves from the Commission's regulatory supervision. 99 Petitioners' approach is not only at odds with the Senate's clear statement, however; it makes no sense, in view of the overall purpose of the Shipping Act, for the tariff matter provision of the MLAA to deprive shippers of any protection except against unilateral carrier practices. The discriminatory potential of unilateral practices is tempered by the availability of alternative means of ocean carriage and the competitive pressures that all carriers exert on the practices of any single carrier. The risk that shippers will be subjected to unreasonable or discriminatory practices therefore increases directly with the number of individual carriers that agree to implement a particular practice that was negotiated with the union by a multiemployer bargaining agent. Such concerted activity, by effectively instituting a regime of adhesion contracts, limits competition among carriers as a regulator for the protection of consumers (shippers) and increases their dependence upon the Commission's regulatory authority for their protection. Because the tariff matter provision indicates that the Congress was concerned with the abusive potential inherent in a broad exemption for carrier practices implementing collective bargaining agreements, we cannot ascribe to that body the intention to exclude concerted activity from Commission scrutiny, while preserving the Commission's regulatory authority over the much less threatening practices of a single carrier, absent some clear indication. Such a result would be plainly inconsistent with the manifest purposes of the Shipping Act. See FMC v. Svenska Amerika Linien, 390 U.S. 238, 243, 88 S.Ct. 1005, 1008, 19 L.Ed.2d 1071 (1968) (noting that the shipping laws permit concerted activity among shippers by granting antitrust immunity, but only at the cost of subjecting agreements among carriers to Commission review); Plaquemines Port, Harbor and Term. Dist. v. FMC, 838 F.2d 536, 542-43 (D.C.Cir.1988) (same). It is not surprising that the only relevant legislative history is directly to the contrary. 100 Finally, we cannot accept the petitioners' argument that the Commission's interpretation of the tariff matter provision, which makes section 5 an exemption from section 15 only, frustrates Congress's apparent intent to exempt maritime labor agreements from all the provisions of the shipping laws. In addition to the obvious constraint that the tariff matter provision was intended to have some limiting effect, it would not be incongruous for section 5 to preclude only Commission scrutiny of agreements that would otherwise be subject to the preimplementation filing and approval requirements of section 15. Although we need not decide whether the effect of the exemption is so limited, it is clear that Congress was primarily concerned with the pressures that the procedures of section 15 put on the collective bargaining process. See California Cartage Co. v. United States, 721 F.2d 1199, 1206 (9th Cir.1983). Indeed, the original House bill was drafted as an amendment to section 15, and the House Report states that the legislation was intended primarily to exclude collective bargaining agreements and certain other related agreements from the filing requirements of Section 15. H.R.REP. NO. 876, supra, at 7. 101 The Senate was narrowly concerned with reversing the Supreme Court's decisions in PMA and Volkswagenwerk. See S.REP. NO. 854, supra, at 7-10. As we have noted above, both of these cases held that, under section 15, carriers could not implement potentially anticompetitive agreements prior to FMC approval, even though they arose out of or were related to collective bargaining agreements. 102 The House bill also included miscellaneous other deletions of Shipping Act jurisdiction over labor-related matters, id. at 10, however. Opponents of the bill testified before the Senate that those other deletions went beyond what was necessary to assure free and unfettered collective bargaining.... Id. The Senate agreed, and added the tariff matter provision. 103 Against this legislative and judicial background, we are quite unprepared to say that the Commission's interpretation of the MLAA is inconsistent with Congressional intent. We therefore hold that the Commission properly exercised jurisdiction over the Rules as incorporated in tariffs, and deny the petition for review in No. 82-1347.