Court Opinion

ID: 9423627
Source: CourtListenerOpinion
Date Created: 2023-08-02 23:08:31.788014+00
Date Added: 2024-06-11T17:22:45.134540
License: Public Domain

Mr. Justice Harlan,
concurring.
Although I agree with the conclusions reached by the Court in this case, I deem it desirable to amplify the reasons, as I see them, for what is decided today. More especially, I think that further justification is needed for the Court’s decision (1) that the “assessment agreement” falls within the Commission’s jurisdiction under *283§15 notwithstanding its intimate connection with the underlying collective bargaining agreement; and (2) that the Commission should give further consideration to the §§16 and 17 issues notwithstanding that it has already determined them.
I.
The Pacific Maritime Association is a multi-employer collective bargaining group. Its “assessment agreement” directly in question here is closely related to a collective bargaining agreement covering a subject about which employers are required to bargain, “terms and conditions of employment.”1 This underlying labor agreement was, according to apparently unanimous industry and expert opinion, a highly desirable step forward in the shipping industry.
Multi-employer collective bargaining units have long been recognized as among the unit classifications that the National Labor Relations Board may deem “appropriate.” In Labor Board v. Truck Drivers Union, 353 U. S. 87, we held that Congress intended
“that the Board should continue its established administrative practice of certifying multi-employer units, and intended to leave to the Board’s specialized judgment the inevitable questions concerning multi-employer bargaining bound to arise in the future.” Id., at 96.
We specifically referred to longshoring as an industry with a long history of multi-employer bargaining, and we noted
“cogent evidence that in many industries the multi-employer bargaining basis was a vital factor in the effectuation of the national policy of promoting labor peace through strengthened collective bargaining.” Id., at 95.
*284The Board has authorized a multi-employer bargaining unit for West Coast shipping, and the labor agreement that forms the background to this case is additional “cogent evidence.”
At the same time, the very existence of multi-employer units, and the obvious need for the employers involved to agree on collective policy, must invariably have competitive effects. The signatories to a collective bargaining agreement are frequently, by the very act of signing, agreeing with their own competitors on matters such as labor costs, certain nonlabor costs, services to be provided to the public, and (indirectly) price increases.
Multi-employer collective bargaining must therefore be reconciled with the sometimes competing policies of federal laws promoting and regulating competition, viz., the antitrust laws and, in the case of maritime labor relations, the Shipping Act. This is a problem on which Congress has provided relatively little direct guidance,2 but it is one of a kind that the Court has repeatedly grappled with since Allen Bradley Co. v. Union, 325 U. S. 797. It is a problem of line-drawing.
The Court, noting that the assessment agreement levied $29,000,000, thus “necessarily resulting in substantially increased stevedoring and terminal charges,” ante, at 277, holds that the assessment agreement must be filed under § 15 of the Act. It says that the underlying labor agreement is not before us and the “continuing validity” of that agreement is not brought into question by today’s decision. Ante, at 278.
*285On the other hand, my Brother Douglas argues that on the Court’s premise the assessment agreement could not be distinguished from any collective bargaining agreement that “raised labor costs beyond the point at which PMA members could be expected to absorb those costs without raising prices or charges.” Post, at 313. He further contends that if part of a collective bargaining agreement is subject to Commission approval, this will stifle labor negotiation.3 Consequently, he suggests that a proper accommodation between “labor” and “competition” interests can be reached by exempting both labor agreements and labor-related agreements from the filing requirement of § 15 but leaving them subject to the specific prohibitions of the antitrust laws and §§16 and 17 of the Shipping Act.
This suggested accommodation seems to me demonstrably wrong. In the first place, as the Court notes, the filing requirement of § 15 was drafted broadly, and the filing-and-approval process includes review of questions arising under §§16 and 17, and specifically creates an exemption from antitrust attack. Hence, if the question were simply whether substantive challenge to a maritime agreement (dealing with labor or with any other matter) is to take place in advance of implementation of the agreement or, instead, during its operation, I should have thought it clear that Congress chose the former alternative. Furthermore, I would find it very difficult to see why provision for advance approval and exemption of labor-related agreements would not be *286preferable, from the standpoint of facilitating collective bargaining, to the “wait-and-see” approach.
The real difficulty in this case is not to distinguish between agreements that must be filed and agreements whose impact on competition will be evaluated after implementation, but to define the Commission’s jurisdiction in such a way that (whether challenges arise before or after implementation) the Commission will not improperly be brought into labor matters where it does not belong. The Court’s only suggestion is that the labor agreements involved in this case “fall in an area of concern to the National Labor Relations Board.” Ante, at 278.
More circumspect analysis than this is needed, I believe. In the first place, since the later validity and antitrust immunity of all agreements subject to § 15 depend upon filing, it is desirable that signatories to agreements be given more precise instructions than that they need not file if they are in an area of Labor Board “concern.” Furthermore, I see no warrant for assuming, in advance, that a maritime agreement must always fall neatly into either the Labor Board or Maritime Commission domain; a single contract might well raise issues of concern to both.
The Commission took the position that § 15 of the Act, requiring filing, was meant to apply “only to those agreements involving practices which affect that competition which in the absence of the agreement would exist between the parties when dealing with the shipping or traveling public or their representatives.”4 I agree with the Court’s conclusion that proper application of that principle to this case would require the opposite result from the one the Commission reached. The difficulty, however, is that the principle is exces*287sively broad: any significant multi-employer agreement on economic matters “affects competition” with respect to prices and services to the public, even if it is a collective bargaining agreement or an employer agreement collateral thereto.
Since maritime employers are permitted to bargain as a group, and since they are required to bargain about certain subjects, the resulting agreements must have some exemption from the filing requirements of § 15 and from successful challenge under the antitrust laws or under the substantive principles in §§16 and 17 of the Shipping Act. The exact extent of the “labor exemption” or “labor immunity” from statutes regulating competition has troubled this Court before;5 however, since no collective bargaining agreement in the maritime industry is now before us, it would be inappropriate to suggest the affirmative extent of the immunity. The important point in this case is an opposite and two-edged one: the assessment agreement before us is not immune or exempt, for it raises “shipping” problems logically distinct from the industry’s labor problems; at the same time, Commission review itself must be circumscribed by the existence of labor problems that it is not equipped to resolve.
The assessment agreement was, of course, consequent upon the labor agreement committing PMA to raise the fund. The union side was concerned with a guarantee that the fund would be raised somehow, and the *288labor agreement guaranteed only that much. But whenever any multi-employer bargaining unit agrees to provide benefits for employees there arises a problem of how to allocate the costs among the various employers and (in consequence) among their customers.
Often, the “allocation” decision follows directly from the terms of the labor agreement. In the case of a multi-employer agreement to raise wages, for example, each employer simply bears the cost of benefiting his own employees. In the present case, had it been possible to make the levy on each employer directly proportional to, and roughly simultaneous with, the savings to that employer from modernization, two things would have followed: the “allocation” decision could be said to stem directly from the terms of the labor agreement, and the modernization program would “pay for itself” as it went along, leaving shipping customers unaffected.
The PMA, however, did not (and presumably could not) apportion costs in this manner. To the extent that, under the plan chosen, individual employers were unable to absorb the levy and debit it against future savings from modernization, the decision how much each employer was to pay necessarily affected that employer’s customers as a class. To the extent that the plan went on to determine which of an employer’s customers would ultimately pay which share of an employer’s dues, the agreement also made choices among customers of an individual employer.
The Commission nevertheless held that the agreement did not “affect competition” because there was “no agreement” to pass the levy on to individual customers. Whether the error be deemed one of “fact” or one of “law” these conclusions are irreconcilable with reality. Terminal companies such as MTC compete with each other for the business of unloading Volks-*289wagens. The allocation agreement involved in this case increases the cost to a terminal company of unloading one Volkswagen by $2.35. This is a substantial (25%) increase in the company’s cost for handling this one product. Since the mechanization and modernization program is not expected to produce a significant (much less a compensatory) saving in the other costs of handling Volkswagens, no terminal company could, in the long run, “absorb” this cost: companies do not absorb costs that are not expected to pay dividends in the future.6 MTC’s only choice was whether to pass the $2.35 on directly to Volkswagen or to pass it on to its other customers in the form of higher charges or lower future savings from mechanization. Since the latter alternative would presumably have driven these other customers to deal with other terminal companies not bearing the Volkswagen curse, MTC was in practice compelled to pass at least a large part of the additional cost on to Volkswagen.
The statements of numerous officials of the participating companies to the effect that there were no “agreements” affecting Volkswagen (statements constituting in large part the “substantial evidence” on which the Commission is supposed to have relied, 125 U. S. App. D. C., at 291, 371 F. 2d, at 756), are at best quibbles about the meaning of words. The members of the Association must be taken to have agreed to the obvious consequences of the paper they all signed. That paper did not destroy price competition for Volkswagen’s trade; nor would a specific agreement to “pass on” the addi*290tional $2.35 charge have done so. But the allocation agreement made Volkswagen a less desirable customer to each and every terminal company unless it did pass on the $2.35 charge. How the Commission could conclude that this collective imposition, by the terminal companies on themselves, of a heavy tax for handling one kind of product did not “affect” competition among them for the trade of shippers of that product I simply cannot understand.
Commission review of the fairness of the agreement allocating the cost burden of mechanization does not mean Commission review of a labor agreement and does not imply consequences in conflict with national labor policy. Whether to mechanize, or otherwise modernize, and what provision should be made for displaced workers, are obviously matters of union concern, and negotiations about these things should be governed by the law of collective bargaining. Resolution of such questions by a decision to create a “Mech Fund” gave rise to a subsidiary “allocation” question. The union was concerned that the question receive some answer, but had no proper interest in which of the possible cost allocation plans was adopted, so long as any such plan raised the amount promised. On the other hand, in the present case no one has suggested that Maritime Commission review of a particular method of cost allocation may properly reach the question whether the obligation necessitating the allocation should have been entered into, or that the Commission may reject an allocation plan when there are no preferable alternative routes to collection of the necessary amount. Review of the fairness and propriety of a taxing scheme is not the same thing as reviewing the fairness and propriety of the uses to which the tax money, once collected, is put. When the Court notes that only the assessment agreement must be filed and examined, it seems clear that it contemplates a Com*291mission examination starting from the premise that the obligation to collect the Mech Fund will be fulfilled; at issue will be only the propriety of the choice of the route to that objective.7
II.
With respect to the §§16 and 17 issues, I consider that the Commission’s approach to those questions rested, as indeed the Court’s opinion now intimates, upon an erroneous understanding of the “assessment agreement” necessitating reconsideration of those matters on remand of the case.
The agreement that was before the Commission was, so far as appears, quite unlike any agreement that body had considered before. It dealt neither with a charge for particularized services in the carrying, handling, or storage of goods, nor with how such services would be provided. Rather, the agreement levied a “tax” on Association members, a tax which (insofar as the modernization program did not directly “pay its own way”) would be passed on to members’ customers and ultimately to the public. The tax would be used to pay for a general benefit to the shipping industry, but the allocation of that tax bore no direct relationship to benefits received by customers.
The Court holds that it was error for the Commission to reject challenges to this agreement under § 16 simply because there was no showing that the tax was discriminatory as between competitive customers. It declares that such a rule may be sound in cases involving rates *292for sea carriage of goods because of the “particularized economics” resulting from the finite capacity of ships, but that it is not sound elsewhere, including this case, for unspecified reasons.
On the surface, it might appear that the argument should be the other way around: it makes some sense to speak of an “undue or unreasonable preference or advantage” to, say, watermelons over automobiles when they are “competing” for a finite amount of shipping space; it becomes much more difficult to find anything that can be called a “preference” between such products with respect to any services that are available to both in unlimited quantities.
My Brother Douglas states that the Commission has consistently adhered to its insistence upon a competitive relationship between the product preferred and the product disadvantaged, except where “there are services that are not dependent upon the nature of the cargo and the various charges therefor.” Post, at 314, n. 30. Yet, if ever it was clear that “the nature of the [products]” was not the basis for a difference in rates, it is in this case.
The true solution of the matter, it seems to me, is that in each situation the problem has been to devise some workable basis for determining whether rates are fair vis-á-vis other rates. It simply would not be feasible, as the Second Circuit has noted,8 to assess the fairness of charges for shipping heavy industrial equipment by comparison with the cost of shipping bananas. The notion of a “preference” for bananas over heavy equipment is simply too elusive to be implemented. At the same time, when the service rendered is, for example, procuring insurance or arranging for cartage, *293the nature of the product has very little to do with either the value to the customer of the services rendered or the cost of supplying them; in such cases the Commission has quite reasonably held that charging different classes of shippers different amounts for equivalent services may be preferential.9
In the present case, the problem before PMA was the allocation of a pre-specified total cost among its various members and their customers. Since this was very much a case of first impression, the Commission would have done well to go back to the language of § 16, which proscribes any “undue or unreasonable preference or advantage to any . . . description of traffic in any respect whatsoever.” 10 Certainly, since a “modernization tax” on any one group of customers lowered, by an equivalent amount, the cost of modernization to others obligated to pay for it, an unfair allocation of the burden could properly be described as a “preference” between that “description of traffic” bearing a heavy burden and that “description of traffic” whose burden was correspondingly lightened.
The real difficulty in this case is to formulate a workable definition of whether the burdens have been “unfairly” allocated. Obviously, as the debates in the PMA indicate, there was no “perfect” way to apportion the costs. Any analysis of the present problem must leave room for the implementation of some uniform, practical, general rule of assessment even though it have some features that are less desirable than some alternative imperfect rule. The difficulty with the method of assessment adopted by PMA is that it was not uniform and general but made special provision for automobiles. The fact that all automobiles are treated alike should *294not have prevented the Commission from inquiring whether special treatment for this class of goods was necessary- under the circumstances and, if so, whether the special rule adopted was the fairest that could be devised.
The Commission’s interpretation of § 17 was also erroneous. The Commission held that since petitioner received substantial benefits from the modernization program it would not make minute inquiry into whether petitioner’s benefits precisely corresponded to the costs imposed. The first difficulty is with the conclusion that petitioner received “substantial benefits.” Petitioner apparently is not in a position to profit appreciably from maritime modernization. ' Petitioner will, of course, benefit from any lessening of labor disputes in shipping and related services; but the only disruptions that are avoided by the labor agreement reached here are those that would otherwise have resulted from the efforts of other shippers and of maritime employers to institute the very modernization practices that will not benefit petitioner. It may be that those who will directly benefit from modernization and those who will benefit only from increased stability during the course of a modernization program in which they have no interest (and which others have imposed on them) should both pay part of the cost of the Mech Fund. However, the existence of such a categorical difference between the benefits received by different groups should at least invite inquiry whether charges are as appropriately proportioned as would be feasible.
In fact, the tax assessed is not “equal” as between Volkswagen and other shippers who will benefit more. The charge to MTC per Volkswagen was figured on a different basis from the assessments for handling other products; the figure reached was a substantially higher percentage of existing costs and charges; and the figure was so high that the additional cost apparently could *295not be absorbed and debited against future sayings from modernization but had to be passed on to the customer. Of course charges need only be “reasonably” related to benefits, and not perfectly or exactly related, Evans Cooperage Co. v. Board of Commissioners of the Port of New Orleans, 6 F. M. B. 415, 418, but in this case inquiry ceased before it had reached even that nearer point.
Finding no disagreement in principle between myself and the Court, I join the Court’s opinion upon the premises stated in this opinion.

 Section 6 of the Clayton Act, 38 Stat. 731, 15 U. S. C. § 17, provides that “[tjhe labor of a human being is not a commodity or article of commerce.” Section 15 of the Shipping Act, 39 Stat. 733, 46 U. S. C. § 814, provides that agreements filed and approved by the Commission “shall be excepted from the provisions of sections 1-11 and 15 of Title 15 [antitrust provisions] . . . .”

 Of course, Congress did not, in § 15, require “good” agreements to be filed and exempt bad ones. Nor did Congress provide a special exemption for cases in which it would create a special hardship to require filing of an agreement that was not filed when it should have been. My Brother Douglas is making a much more relevant and serious point than that the Court’s decision will do incidental damage to a “good” agreement.

 9 F. M. C., at 82.

 E. g., Mine Workers v. Pennington, 381 U. S. 657; Meat Cutters v. Jewel Tea, 381 U. S. 676; cf. Kennedy v. Long Island R. Co., 319 F. 2d 366, 372-374. In Mine Workers the Court said, “We think it beyond question that a union may conclude a wage agreement with the multi-employer bargaining unit without violating the antitrust laws ...” 381 U. S., at 664. It seems equally obvious that the employers are not violating the antitrust laws either when they confer about wage policy preparatory to bargaining or when they sign an agreement.

 The fact that the figure $2.35 was in fact arithmetically larger than MTC’s computed profit per Volkswagen on the accounting basis MTC used is of course not in itself critical. If MTC’s computed profit per vehicle had been $2.36, it would have had nevertheless to make up the $2.35 additional cost somewhere.

 The fact that the “labor” agreement and the “assessment” agreement were on different pieces of paper is of course not critical. What is important is that the whole process raised both labor problems and distinct shipping problems. It would not be impossible for there to be a single agreement raising some problems of Labor Board “concern” and other, separate problems appropriate to Commission review.

 New York Foreign Freight Forwarders and Brokers Assn. v. FMC, 337 F. 2d 289, 299.

 Ibid,.; see, e. g., Investigation of Free Time Practices — Port of San Diego, 9 F. M. C. 525.

 46 U. S. C. §815.