Respondent Flota, a common carrier by water, made an exclusive
contract with Panama Ecuador to transport bananas. The contract was
executed after a Federal Maritime Board ruling, later reiterated,
that Flota's competitor had violated the Shipping Act, 1916 by its
exclusive contracts and refusal to allocate banana shipping space
among all qualified shippers. Petitioner, a competitor of Panama
Ecuador, demanded a reasonable amount of Flota's banana carrying
space under the Board's decisions and threatened litigation if
rejected. Flota rejected the demand and brought a proceeding before
the Board for declaratory relief exonerating it from liability to
petitioner. Petitioner then filed a complaint with the Board asking
for damages. The actions were consolidated, and the Board ruled
that Flota's exclusive contract violated the Shipping Act, and
ordered a fair allocation of banana shipping space. Flota, pursuant
to the Administrative Orders Review Act, petitioned the Court of
Appeals to set aside the order, and the appeal was stayed pending
determination of the reparation proceeding. Following the Board's
reparation order, Flota and petitioner each appealed, Flota asking
that the award and finding of a Shipping Act violation be set
aside, petitioner that the award be increased. After holding that
it had jurisdiction over the appeals, the Court of Appeals affirmed
the Board's finding of a Shipping Act violation, but remanded the
case for the Board to consider whether it was inequitable to make
Flota pay reparations. The Federal Maritime Commission (FMC) held
that it was not inequitable, but reduced the award. Following
renewed appeals, the Court of Appeals reversed and vacated the
award as inequitable and an abuse of discretion, in effect on the
ground that there was substantial evidence to support a conclusion
contrary to that reached by the FMC.
Held:
1. The Court of Appeals had jurisdiction to consider petitioner
shipper's direct appeal challenging the adequacy of the FMC
reparation order. Section of the Administrative Orders Review Act
in conjunction with Section 31 of the Shipping Act, 1916 provides a
procedure for direct review of FMC orders similar to that
applicable to ICC orders. Such orders are reviewable on
Page 383 U. S. 608
direct appeal by a shipper denied reparations in whole or in
part, since the adequacy of a reparation award cannot be challenged
in an enforcement proceeding,
United States v. Interstate
Commerce Comm'n, 337 U. S. 426. Pp.
383 U. S.
612-614.
2. Since the jurisdiction of the Court of Appeals had been
invoked by the shipper seeking to increase the amount of his
damages, that court also had jurisdiction over the carrier's direct
review appeal as to the validity of the FMC order and the amount of
reparations, whether considered as a consolidated appeal or as an
intervenor's cross-claim.
ICC v. Atlantic Coast Line R. Co.,
ante, p.
383 U. S. 576. Pp.
383 U. S.
614-618.
3. The FMC's finding that it would not be inequitable to require
Flota to pay petitioner reparations was supported by substantial
evidence, and must be sustained on review. Pp.
383 U. S.
618-626.
(a) A reviewing court is not at liberty to weigh the evidence
and substitute its discretion for that of the administrative
agency. Pp.
383 U. S.
619-621.
(b) In determining whether to exercise its discretion to award
reparations to a complainant under the Shipping Act, the FMC may be
guided by such factors as whether an award would further the Act's
enforcement, injury to the shipper, the carrier's culpability, and
whether the award would conform to previous application of the Act.
P.
383 U. S.
622.
(c) The findings that Flota had unjustly discriminated against
petitioner and given undue preference to his competitor in
violation of the Shipping Act undercut Flota's claimed equities.
Pp.
383 U. S.
622-623.
119 U.S.App.D.C. 345, 342 F.2d 924, reversed.
Page 383 U. S. 609
MR. JUSTICE WHITE delivered the opinion of the Court.
We have been asked in this case to determine whether the Court
of Appeals had jurisdiction to set aside a reparation order of the
Federal Maritime Commission which was before it upon the
consolidated appeals of the shipper and the carrier, the shipper
asking that the award be increased and the carrier asking that it
be set aside. In addition, we have been asked to determine whether
the Court of Appeals applied the proper standard of review when it
set aside the reparation award. We answer the first question in the
affirmative and the second in the negative. Accordingly, we
reverse.
Flota Mercante Grancolombiana, S.A. (Flota) is a common carrier
engaged in carrying bananas from South America to the United
States. In July, 1955, it entered into an exclusive two-year
carrying contract with Panama Ecuador, a banana shipper, and gave
Panama Ecuador an option to renew the contract for an additional
three years, subject to its meeting the rate offered by any other
shipper. This exclusive contract was executed after the Federal
Maritime Board, in June, 1953, had ruled that Flota's competitor,
Grace Line, was a common carrier of bananas and had violated the
Shipping Act, 1916, §§ 14 Fourth [
Footnote 1] and 16 First [
Footnote 2] by refusing
Page 383 U. S. 610
to allocate its banana shipping space equitable among all
qualified shippers. [
Footnote
3] In April, 1957, the Board reiterated its view that Grace
Line had violated the Shipping Act by signing exclusive carrying
contracts and it ordered Grace Line to offer to all qualified
shippers, upon a fair basis, shipping space on forward-booking
contracts not to exceed two years in length. [
Footnote 4] One month after this ruling, Flota
rejected a bid by Consolo, a banana shipper competing with Panama
Ecuador, for the entire shipping space and honored the option given
Panama Ecuador by executing to it a three-year exclusive carrying
contract. Shortly thereafter, Consolo demanded a "fair and
reasonable" amount of the carrying space pursuant to the previous
Grace Line decisions of the Board, and threatened to file
a complaint if its demand were rejected. Flota rejected the demand,
and itself filed a petition before the Board for declaratory relief
exonerating it from liability to Consolo. Consolo followed with a
complaint before the Board asking for damages. These proceedings
were consolidated, and, in June, 1959, the Board ruled that Flota's
three-year exclusive contract with Panama Ecuador
Page 383 U. S. 611
violated the Shipping Act, §§ 14 Fourth and 16 First, and it
ordered Flota to allocate its space fairly among all qualified
banana shippers. [
Footnote 5]
Pursuant to § 2(c) of the Administrative Orders Review Act (64
Stat. 1129, as amended, 5 U.S.C. § 1032(c) (1964 ed.)), Flota
petitioned the Court of Appeals for the District of Columbia
Circuit to set aside this order. This appeal was stayed pending
determination of the reparations proceeding. In March, 1961, the
Board ordered Flota to pay Consolo certain reparations for the
violation of the Shipping Act. [
Footnote 6] Both Flota and Consolo appealed from this
reparation order, and each intervened in the appeal of the other,
Consolo asking that the reparation award be increased and Flota
asking that it be set aside. These appeals were consolidated
together with Flota's appeal to set aside the Board's finding of a
violation of the Shipping Act.
The Court of Appeals held that it had jurisdiction to consider
these appeals. It affirmed the Board's finding that Flota had
violated the Shipping Act, but remanded to the Board the issue of
reparations so that it could "consider whether, under all the
circumstances, it is inequitable to force Flota to pay reparations.
. . ." [
Footnote 7] On remand,
the Federal Maritime Commission [
Footnote 8] concluded that it was not inequitable to
require Flota to pay Consolo reparations, although it did reduce
the amount of the award. [
Footnote
9] Again, both Flota and Consolo appealed to the Court of
Appeals for the District of
Page 383 U. S. 612
Columbia Circuit, each intervened in the appeal of the other,
and the two appeals were consolidated. [
Footnote 10] Again Consolo maintained that the award
was too small, and Flota argued that it should be set aside in part
or in whole. The Court of Appeals reversed and vacated the
reparation award, concluding that,
"[i]n view of the substantial evidence showing that it would be
inequitable to assess damages against Flota in favor of Consolo, .
. . the Commission abused the discretion granted it under Section
22 of the Shipping Act [
Footnote
11] [to issue reparation awards]. . . ."
119 U.S.App.D.C. 345, 352, 342 F.2d 924, 931. Consolo petitioned
this Court for a writ of certiorari to review that decision, which
we granted. 381 U.S. 933.
I
The first question we have is whether the Court of Appeals had
jurisdiction of the appeals filed by Consolo and Flota. [
Footnote 12]
Page 383 U. S. 613
As we read the controlling statutory provisions, it seems clear
that the Court of Appeals had jurisdiction to consider Consolo's
direct appeal from the Commission's reparation order granting only
part of the relief requested. Section 2 of the Administrative
Orders Review Act (5 U.S.C. § 1032 (1964 ed.)) gives the courts of
appeals
"exclusive jurisdiction to enjoin, set aside, suspend (in whole
or in part), or to determine the validity of . . . (c) such final
orders of the . . . Federal Maritime Board . . . as are now subject
to judicial review pursuant to the provisions of section 830 of
Title 46. . . ."
Section 830 of Title 46 (§ 31 of the Shipping Act, 1916, 39
Stat. 738, as amended), in turn, says that, "except as otherwise
provided," orders of the Federal Maritime Board are reviewable
pursuant to the same procedures as are available "in similar suits
in regard to orders of the Interstate Commerce Commission. . . ."
Accordingly, if, pursuant to provisions in the Interstate Commerce
Act, a shipper can bring a direct review proceeding to challenge
the adequacy of a reparation award issued by the Interstate
Commerce Commission, he should be permitted to bring a similar
proceeding to challenge the adequacy of a reparation award from the
Federal Maritime Commission, subject of course to any special
provisions applicable to maritime cases such as the provision in §
2 of the Administrative Orders Review Act that direct review
proceedings shall be conducted in the courts of appeals rather than
the district courts.
The Court has previously held that an order of the Interstate
Commerce Commission denying a shipper's reparation claim is subject
to direct review at the instance of the shipper,
United
States v. Interstate Commerce
Page 383 U. S. 614
Comm'n, 337 U. S. 426,
primarily because the adverse order would be wholly unreviewable
unless the shipper is permitted to bring an appeal.
See
Rochester Tel. Corp. v. United States, 307 U.
S. 125. Likewise, in
D. L. Piazza Co. v. West Coast
Line, Inc., 210 F.2d 947,
cert. denied, 348 U.S. 839,
the Court of Appeals for the Second Circuit was of the opinion that
the principles of
United States v. Interstate Commerce
Comm'n were authority for allowing the shipper to seek direct
review of an order of the Federal Maritime Board denying a major
part, but not all, of the shipper's reparation claim. We think
Piazza was correct in this respect, and we accordingly
agree with the court below that it would have jurisdiction to
consider Consolo's appeal.
As for Flota's appeal, much of what we have said in
Interstate Commerce Comm'n v. Atlantic Coast Line R. Co.,
decided today, is pertinent to our consideration here. In that
case, where direct review had not been sought by the shipper, we
held that the carrier may have review of a reparation order of the
Interstate Commerce Commission only in connection with the
shipper's enforcement action under § 16(2) of the Interstate
Commerce Act. Section 30 of the Shipping Act, 39 Stat. 737, as
amended, provides for a similar action by the shipper to enforce a
reparation award by the Maritime Commission, and extends certain
procedural advantages to the shipper generally comparable to those
provided by § 16(2) of the Interstate Commerce Act. He has a wide
scope of venue; he is not liable for costs unless they accrue on
his own appeal; he is allowed reasonable attorney fees if he
ultimately prevails; he is the beneficiary of broad service of
process and joinder provisions; and the findings and order of the
Commission are given
prima facie effect in the enforcement
action. These advantages were given to the shipper because he was
considered generally to be the weaker party in the controversy, and
he serves an important
Page 383 U. S. 615
role in the enforcement of the Shipping Act. It was to protect
advantages similar to these by preventing the carrier from
emasculating the enforcement action that we concluded in
Interstate Commerce Comm'n v. Atlantic Coast Line R. Co.
that the carrier could not seek review of the reparation award
except in connection with a shipper's enforcement action. It is
readily apparent, we think, that this holding is applicable to
Shipping Act cases when the shipper himself has not sought direct
review in the Court of Appeals.
Here, however, the jurisdiction of the Court of Appeals has been
invoked by the shipper, who seeks to increase the amount of his
damages. In these circumstances, we find nothing in the Shipping
Act or the Administrative Orders Review Act that would prevent the
Court of Appeals from also considering Flota's request, either as a
consolidated appeal pursuant to § 2 of the Administrative Orders
Review Act or as an intervenor's cross-claim, to have the
reparation order set aside or reduced, a result which will not, in
our view, substantially impair the procedural advantages intended
for a shipper under § 30.
Concerning venue, the shipper will still be able to select the
forum. Although the venue provisions governing an appeal are
somewhat different from those governing an enforcement suit, the
shipper still has relatively wide opportunities to find a
convenient forum. Section 3 of the Administrative Orders Review Act
(64 Stat. 1130, 5 U.S.C. § 1033 (1964 ed.)) enables the petitioner
to bring suit in the judicial circuit where he resides, where his
principal office is located, or in the District of Columbia. By
requiring that the carrier's review proceeding be brought in the
court selected by the shipper for his appeal, all the issues in the
controversy will be tried in a relatively convenient forum for the
shipper.
Page 383 U. S. 616
The shipper will not have the benefit in a direct review of
those provisions in § 30 that exempt him from his costs and enable
him to collect his attorney's fees if he ultimately prevails.
[
Footnote 13] However, the
only additional costs and attorney's fees that the shipper will
incur if the carrier is permitted to challenge the reparation award
upon a consolidated appeal or cross-claim are those costs and fees
attributable to additional issues not otherwise raised by the
shipper's appeal. To the extent the arguments a carrier may advance
to decrease or set aside an award would be asserted in any event as
defenses to the shipper's claim for increased reparations, no
additional costs or fees will be incurred beyond those which the
shipper would normally assume for his appeal. And if the shipper
prevails against the carrier's appeal, any additional costs,
although not attorney's fees, as are incurred may be assessed
against the carrier as the losing party under 28 U.S.C. § 1912
(1964 ed.).
See also District of Columbia Cir.R.
20(b).
The minimal disadvantages resulting to the shipper from
permitting the carrier to attack the reparation order are more than
offset by the desirability of a prompt and efficient determination
of the validity of the Commission's order. Many of the arguments a
carrier might make in defense against a shipper's suit to increase
the award could also be advanced to show that the award should be
reduced or set aside entirely. And once the carrier intervenes in
the shipper's appeal, all the parties interested in the complete
resolution of the validity of
Page 383 U. S. 617
the Commission's order are before the court. In this situation,
it would make little sense to require the carrier to break off his
argument short of its logical conclusion and relitigate it anew
before a district court in an enforcement action. [
Footnote 14]
With the jurisdiction of the Court of Appeals properly invoked
by the shipper, there is, therefore, every reason to permit the
carrier not only to litigate the amount of the reparation order,
but also to insist upon a determination of the validity of the
Commission's order, both with respect to the carrier's violation of
the Act [
Footnote 15] and
with respect to the reparation award itself. If the carrier finally
prevails on either of these claims, there would then be no occasion
for a separate enforcement suit in the District Court. If the
carrier's claims going to the validity of the order are rejected by
the Court of Appeals, the determination of a violation by the
carrier would be binding in the subsequent enforcement action by
the shipper; nor would there be any basis in the course of a
subsequent enforcement action conducted in accordance with § 30 to
redetermine whether or not the award itself is supported by
substantial evidence in the administrative record. [
Footnote 16] Hence, the shipper will need
to litigate the
Page 383 U. S. 618
issue of validity only once, and this in the Court of Appeals at
the instance of the carrier. Although two proceedings may be
required to collect his damages, this is only a necessary incident
of the shipper's decision to bring his appeal in the first
place.
In short, although a shipper may lose some of the procedural
advantages given him by § 30 if he is forced to defend the validity
of the Commission's order in conjunction with his appeal, these
losses generally will not be substantial. To the extent that he is
disadvantaged, this is the result of a conscious choice he has
made. And from the point of view of the enforcement of the Shipping
Act, it is certainly less important that the shipper be assisted in
his efforts to obtain a greater award than it is to assist him in
his efforts to enforce an existing award. The Court of Appeals was
correct in sustaining its own jurisdiction to hear Flota's
appeal.
II
We turn, then, to the standard of review used by the Court of
Appeals when it reversed the Commission's reparation order.
The Court of Appeals rejected the Commission's finding that it
would not be inequitable to award Consolo reparations because it
felt this finding "ignores . . . the substantial weight of the
evidence. . . ." 119 U.S. App.D.C. 345, 347, 342 F.2d 924, 926. It
then concluded that the Commission abused its discretion in
ordering reparations because "of the substantial evidence showing
that [the reparations] would be inequitable."
Id. at 352,
342 F.2d, at 931. In effect, the standard of review applied and
articulated by the Court of Appeals in this case was that, if
"substantial evidence" or "the substantial evidence" supports a
conclusion contrary to that reached by the Commission, then the
Commission
Page 383 U. S. 619
must be reversed. [
Footnote
17] This standard is not consistent with that provided by the
Administrative Procedure Act.
Section 10(e) of the Administrative Procedure Act (60 Stat. 243,
5 U.S.C. § 1009(e) (1964 ed.)) gives a reviewing court authority to
"set aside agency action, findings, and conclusions found to be (1)
arbitrary, capricious, [or] an abuse of discretion . . . [or] (5)
unsupported by substantial evidence. . . ."
Cf. United States
v. Interstate Commerce Comm'n, 91 U.S.App.D.C. 178, 183-184,
198 F.2d 958, 963-964,
cert. denied, 344 U.S. 893. We have
defined "substantial evidence"
Page 383 U. S. 620
as "such relevant evidence as a reasonable mind might accept as
adequate to support a conclusion."
Consolidated Edison Co. of
New York v. Labor Board, 305 U. S. 197,
305 U. S.
229.
"[I]t must be enough to justify, if the trial were to a jury, a
refusal to direct a verdict when the conclusion sought to be drawn
from it is one of fact for the jury."
Labor Board v. Columbian Enameling & Stamping Co.,
306 U. S. 292,
306 U. S. 300.
[
Footnote 18] This is
something less than the weight of the evidence, and the possibility
of drawing two inconsistent conclusions from the evidence does not
prevent an administrative agency's finding from being supported by
substantial evidence.
Labor Board v. Nevada Consolidated Copper
Corp., 316 U. S. 105,
316 U. S. 106;
Keele Hair & Scalp Specialists, Inc. v. FTC, 275 F.2d
18, 21.
Congress was very deliberate in adopting this standard of
review. [
Footnote 19] It
frees the reviewing courts of the time-consuming and difficult task
of weighing the evidence; it gives proper respect to the expertise
of the administrative tribunal and it helps promote the uniform
application of the statute. [
Footnote 20] These policies are particularly important
when a court is asked to review an agency's
Page 383 U. S. 621
fashioning of discretionary relief. [
Footnote 21] In this area, agency determinations
frequently rest upon a complex and hard-to-review mix of
considerations. By giving the agency discretionary power to fashion
remedies, Congress places a premium upon agency expertise, and, for
the sake of uniformity, it is usually better to minimize the
opportunity for reviewing courts to substitute their discretion for
that of the agency. These policies would be damaged by the standard
of review articulated by the court below.
Ordinarily, we would be inclined to remand to the Court of
Appeals for further consideration in light of the standard of
review established by the Administrative Procedure Act.
Universal Camera Corp. v. Labor Board, 340 U.
S. 474;
Labor Board v. Walton Mfg. Co.,
369 U. S. 404.
However, in view of the fact that this controversy already dates
back more than eight years, that it has been before the Court of
Appeals twice, and that the relevant standard is not hard to apply
in this instance, we think this controversy had better terminate
now.
See O'Leary v. Brown-Pacific-Maxon, Inc.,
340 U. S. 504.
Section 22 of the Shipping Act, 1916, provides that "The Board .
. .
may direct the payment . . . of full reparation to the
complainant for the injury caused by such violation." 46 U.S.C. §
821 (1964 ed.). (Emphasis added.) This contemplates that the
Commission shall have a certain amount of discretion, [
Footnote 22] but it does not
Page 383 U. S. 622
specify what factors are to be considered by the Commission in
exercising this discretion. However, we assume that the Commission
could validly consider such factors as whether a reparation award
would enhance the enforcement of the Act, whether the shipper had
suffered compensable injury, and whether the award of reparations
would be consistent with the previous application of the Act, as
well as the factor of culpability of the carrier. [
Footnote 23] Hence, even if the carrier's
conduct were such that it would be inequitable to require it to pay
a reparation award, this, by itself, might not be sufficient to
establish that the Commission abused its discretion under the Act.
However, we need not rest upon this distinction, because we feel
that it is clear that there is substantial evidence in the record,
considered as a whole, to support the Commission's findings that it
would not be inequitable in this case to require Flota to pay
Consolo reparations.
The Maritime Board determined, and the Court of Appeals agreed,
that Flota had been guilty of "unfairly" or "unjustly"
discriminating against Consolo and of giving an "undue unreasonable
preference" to Panama Ecuador in violation of § 14 Fourth and § 16
First
Page 383 U. S. 623
of the Shipping Act. [
Footnote 24] These findings, which were essential to the
determination that Flota had violated the Shipping Act,
substantially undercut any equities that Flota might claim.
Nevertheless, the Court of Appeals considered it inequitable to
make Flota pay reparations because Flota might have believed, in
view of the unsettled law, that it was not illegal to exclude
Consolo.
Prior to Flota's rejection of Consolo's request for a fair
portion of the shipping space, the Federal Maritime Board had
decided only two cases relevant to this issue:
Consolo v. Grace
Line, supra, and
Banana Distributors, Inc. v. Grace Line,
supra. Both cases held invalid exclusive dealing contracts
similar to the one in question here. The Court of Appeals would
minimize these two cases as precedents because no order was issued
in the first
Grace Line decision and the second
Grace
Line decision was ultimately reversed and remanded by the
Court of Appeals for the Second Circuit. Nevertheless, at the time
Flota entered into the 1957 exclusive contract with Panama Ecuador,
and at the time it rejected Consolo's request for a fair share of
the shipping space, these decisions were authoritative
pronouncements by the agency primarily responsible for
administering and interpreting the Shipping Act. And, although the
second
Grace Line decision was ultimately reversed and
remanded, upon reconsideration, the Board still found the exclusive
contract there is question to be illegal, and that
Page 383 U. S. 624
decision was ultimately affirmed upon appeal to the Second
Circuit. [
Footnote 25]
As further evidence of good faith, the Court of Appeals was of
the opinion that Flota could reasonably have believed its situation
was different from that presented to the Board in the
Grace
Line cases because of physical differences between its vessels
and those owned by Grace Line. However, in its first decision
affirming the Board's finding of a violation the Court of Appeals
had affirmed that the record "adequately supported" the Board's
finding that "the differences between Flota's vessels and Grace's
vessels are not impressive." 112 U.S.App.D.C. 302, 307, 302 F.2d
887, 892. We think the Court's first judgment was the correct one.
The record is adequate to establish that Flota took a deliberate,
and we think substantial, risk when it gambled that the previous
contrary precedent could be distinguished. We agree with the
Commission that there is nothing inhering in this situation that
would make it inequitable to require Flota to pay reparations.
Nor do we feel the record reveals that the reparation award is
inequitable because Flota had asked for declaratory relief or
because that request was pending before the Board for almost two
years. In the first place, Flota did not request declaratory relief
until after it had entered into the offending exclusive dealing
contract with Panama Ecuador and until it became clear that Consolo
was going to sue anyway. Under these circumstances, the Commission
was justifiably skeptical about Flota's motives in bringing suit.
Further, although Flota's suit was pending for about two years, the
record indicates that much of the delay involved in this case was
at the request or approval of Flota. At any rate, it has never
Page 383 U. S. 625
been the law that a litigant is absolved from liability for that
time during which his litigation is pending.
Labor Board v.
Electric Vacuum Cleaner Co., 315 U. S. 685;
Louisville & Nashville R. Co. v. Sloss-Sheffield Steel
& Iron Co., 269 U. S. 217.
During this time, Flota was able to postpone the predictable demise
of its discriminatory contract and Consolo continued to suffer
injury.
Similarly, we do not believe that Flota acquired any "equities"
by being caught between the conflicting demands of Consolo and
Panama Ecuador. Not only was this a dilemma of Flota's own making,
but, in 1958 Flota rejected an opportunity to escape it. At that
time, Panama Ecuador announced that it was going to cancel the
contract unless Flota reduced its rates. Although believing itself
under no legal obligation to reduce rates, Flota nevertheless did
so in order to perpetuate the illegal exclusive dealing contract
with Panama Ecuador. Finally, there was a provision in Flota's
contract with Panama Ecuador that absolved Flota from liability for
refusing to comply with the contract if it was illegal. Although
absolution of liability depended upon the contract being declared,
in fact, illegal, in light of the previous
Grace Line
decisions, we think this would have been the more reasonable course
of action.
Finally we reject the argument that Flota did not benefit from
its policy of excluding Consolo, and that Consolo lost "only"
expected profits. There is evidence in the record that Flota
considered its exclusive dealing contract with Panama Ecuador more
profitable than would have been a multiple contract with several
shippers. [
Footnote 26] If
Flota did not believe there was an advantage
Page 383 U. S. 626
in retaining its exclusive contract with Panama Ecuador, it is
reasonable to think that it would have taken the opportunity given
it in 1958 by Panama Ecuador to cancel that contract and offer
space equitably to all shippers. Furthermore, we think the court
below wrongly minimized the sting of losing expected profits
resulting from being unjustly and illegally denied shipping space.
Such a loss is real, and it is certainly compensable under the
Shipping Act.
See McLean & Co. v. Denver & Rio Grande
R. Co., 203 U. S. 38,
203 U. S. 48-49;
Roberto Hernandez, Inc. v. Arnold Bernstein
Schiffahrtsgesellschaft, M.B.H., 116 F.2d 849,
cert.
denied sub nom. Compania Espanola de Navegacion Maritima, S.A. v.
Roberto Hernandez, Inc., 313 U.S. 582.
Without further belaboring this issue, suffice it to say that
there is substantial evidence in the record, considered as a whole,
for the Commission to conclude that
"Flota initiated and pursued the unlawful act without good cause
and without a satisfactory showing of good faith, and we have been
unable, except as noted, to find any equity in its contentions,
whether viewed separately or together."
This being so, it was clear error on the part of the Court of
Appeals to reverse the Commission's award of reparations. [
Footnote 27]
Reversed.
MR. JUSTICE BLACK took no part in the consideration or decision
of this case.
[
Footnote 1]
"§ 14 Fourth. [No common carrier by water shall] [m]ake any
unfair or unjustly discriminatory contract with any shipper based
on the volume of freight offered, or unfairly treat or unjustly
discriminate against any shipper in the matter of (a) cargo space
accommodations or other facilities, due regard being had for the
proper loading of the vessel and the available tonnage; (b) the
loading and landing of freight in proper condition; or (c) the
adjustment and settlement of claims."
39 Stat. 733, as amended, 46 U.S.C. § 812 (1964 ed.).
[
Footnote 2]
"§ 16 First. [It shall be unlawful for any common carrier by
water] [t]o make or give any undue or unreasonable preference or
advantage to any particular person, locality, or description of
traffic in any respect whatsoever, or to subject any particular
person, locality, or description of traffic to any undue or
unreasonable prejudice or disadvantage in any respect whatsoever. .
. ."
9 Stat. 734, as amended, 46 U.S.C. § 815 (1964 ed.).
[
Footnote 3]
Philip R. Consolo v. Grace Line Inc., 4 F.M.B. 293
(1953). No order was issued pursuant to this report.
[
Footnote 4]
Banana Distributors, Inc. v. Grace Line Inc., 5 F.M.B.
278 (1957). This decision predicated liability upon the theory that
bananas were "susceptible to common carriage" and could be carried
by a carrier only under terms of common carriage. This decision was
reversed and remanded by the Second Circuit,
Grace Line, Inc.
v. Federal Maritime Board, 263 F.2d 709. On remand, the Board
dropped its "susceptibility" theory, but nevertheless found Grace
Line to be a common carrier under the Shipping Act and held it
could not evade the requirements of the Act as to any part of the
goods it carried. 5 F.M.B. 615 (1959). This was affirmed by the
Second Circuit upon appeal. 280 F.2d 790,
cert. denied,
364 U.S. 933.
[
Footnote 5]
5 F.M.B. 633, 641. This order was issued on July 2, 1959. Flota
complied by September 1, 1959.
[
Footnote 6]
6 F.M.B. 262.
[
Footnote 7]
112 U.S.App.D.C. 302, 311, 302 F.2d 887, 896.
[
Footnote 8]
The functions and duties of the Federal Maritime Board, so far
as relevant to this case, were transferred to the Federal Maritime
Commission on August 12, 1961. Reorganization Plan No. 7 of 1961,
75 Stat. 840, 46 U.S.C. § 1111, note (1964 ed.).
[
Footnote 9]
7 F.M.C. 635.
[
Footnote 10]
None of the parties challenged, at this time, the jurisdiction
of the Court of Appeals to hear these consolidated appeals.
[
Footnote 11]
"Any person may file with the Federal Maritime Board a sworn
complaint setting forth any violation of this chapter by a common
carrier by water, or other person subject to this chapter, and
asking reparation for the injury, if any, caused thereby. . . . If
the complaint is not satisfied, the Board shall, except as
otherwise provided in this chapter, investigate it in such manner
and by such means, and make such order as it deems proper. The
Board, if the complaint is filed within two years after the cause
of action accrued, may direct the payment, on or before a day
named, of full reparation to the complainant for the injury caused
by such violation."
39 Stat. 736, as amended, 46 U.S.C. § 821 (1964 ed.).
[
Footnote 12]
Much of what we said in
Interstate Commerce Comm'n v.
Atlantic Coast Line R. Co., ante, is relevant to the
jurisdictional issue presented by this case. The Senate Report
explaining the Shipping Act expressly observed that the enforcement
provisions of the Shipping Act were "modeled very closely after the
interstate commerce act. . . ." S.Rep.No.689, 64th Cong., 1st
Sess., p. 13. That report also counsels that
"the administration and enforcement provisions of the
[interstate commerce] act and the nearly 30 years' experience of
the Interstate Commerce Commission [may] be adopted with slight
modifications to the purposes of [the Shipping Act]."
Id., p. 12.
[
Footnote 13]
Unlike the Interstate Commerce Commission situation, there is no
possibility here that an enforcement action can be joined with a
direct review proceeding (thereby raising the possibility that the
favorable provisions of the enforcement section may become
applicable and ensuring that the Commission will be a party),
because enforcement suits must be in the district courts and direct
reviews can be taken only to the courts of appeals.
[
Footnote 14]
These same considerations of judicial economy and fairness to
all the parties lie behind the doctrine of ancillary jurisdiction,
Moore v. New York Cotton Exchange, 270 U.
S. 593;
Siler v. Louisville & Nashville R.
Co., 213 U. S. 175; 2
Moore, Federal Practice 8.07(5) (2d ed. 1965), and the doctrine
that an intervenor of right may assert a cross-claim without
independent jurisdictional grounds, 4 Moore, Federal Practice �
24.17 (2d ed. 1963).
[
Footnote 15]
Of course, in this case, the issue of Flota's violation of the
Act was resolved in a previous direct appeal by Flota from the
Board's cease and desist order. There is no question of the
jurisdiction of the Court of Appeals to consider that appeal.
[
Footnote 16]
See our discussion of the defenses available to a
carrier in an enforcement action at
Interstate Commerce Comm'n
v. Atlantic Coast Line R. Co., ante, p.
383 U. S. 594,
n. 6.
[
Footnote 17]
In its first opinion, remanding the issue of reparations to the
Commission, the Court of Appeals said,
"But, in reviewing the evidence (as opposed to reviewing issues
of law), we are confined to a much more restricted standard, as the
Administrative Procedure Act, § 1
et seq., 5 U.S.C. § 1001
et seq., and a long line of Supreme Court decisions,
clearly indicate.
See, e.g., Universal Camera Corp. v. National
Labor Relations Board, 340 U. S. 474 (1951);
United
States v. Carolina Freight Carriers Corp., 315 U. S.
475,
315 U. S. 489 (1942). We
have examined the appeals from the reparations award with these
considerations in mind."
112 U.S.App.D.C. 302, 309, 302 F.2d 887, 894. However, in its
second opinion, when it reviewed the Commission's finding that it
would not be inequitable to award reparations, the Court of Appeals
made no reference to the Administrative Procedure Act. The standard
of review articulated and apparently applied in that opinion was
inconsistent with the Administrative Procedure Act.
We do not read the opinion below as asserting that the Court of
Appeals, in a direct review proceeding, may conduct a
de
novo review of the equities of a reparation award. We find
nothing in the Shipping Act, the Hobbs Act, or the Administrative
Procedure Act that would authorize a
de novo review in
these circumstances, and, in the absence of specific statutory
authorization, a
de novo review is generally not to be
presumed. 4 Davis, Administrative Law Treatise § 29.08 (1958).
See United States v. Carlo Bianchi & Co., Inc.,
373 U. S. 709,
373 U. S. 715;
Morrison-Knudsen Co. v. O'Leary, 288 F.2d 542,
543-544.
[
Footnote 18]
Although these two cases were decided before the enactment of
the Administrative Procedure Act, they are considered authoritative
in defining the words "substantial evidence" as used in the Act. 4
Davis, Administrative Law Treatise § 29.02.
[
Footnote 19]
The test of substantial evidence in the record considered as a
whole had been applied by some reviewing courts even before
Congress acted.
See Universal Camera Corp. v. Labor Board,
340 U. S. 474,
340 U. S. 483,
340 U. S.
490.
[
Footnote 20]
See Federal Trade Comm'n v. Mary Carter Paint Co.,
382 U. S. 46;
Labor Board v. Southland Mfg. Co., 201 F.2d 244, 246.
These same policies are behind the "primary jurisdiction doctrine."
Far East Conference v. United States, 342 U.
S. 570,
342 U. S.
574-575;
United States Navigation Co., Inc. v.
Cunard Steamship Co., Ltd., 284 U. S. 474.
See generally, Stason, "Substantial Evidence" in
Administrative Law, 89 U.Pa.L.Rev. 1026 (1941).
[
Footnote 21]
See Labor Board v. Seven-Up Bottling Co. of Miami,
Inc., 344 U. S. 344;
Securities & Exchange Comm'n v. Chenery Corp.,
332 U. S. 194,
332 U. S.
207-209;
Phelps Dodge Corp v. Labor Board,
313 U. S. 177.
See also Federal Security Administrator v. Quaker Oats
Co., 318 U. S. 218,
where considerable deference was given the Federal Security
Administrator in the promulgation of rules pursuant to the Federal
Food, Drug, and Cosmetic Act.
[
Footnote 22]
See Grace Line, Inc. v. Skips A/S Viking Line, 7 F.M.C.
432.
See also Johnston Seed Co. v. United States, 90 F.
Supp. 358,
aff'd, 191 F.2d 228;
Boston Wool Trade
Assn. v. Director General, 69 I.C.C. 282, 309, where, to avoid
an award of reparations that would be inequitable, the ICC and the
courts found certain practices by the carriers to be unreasonable
only prospectively.
See also Delaware, Lackawanna & Western
Coal Co. v. Delaware, Lackawanna & W. R. Co., 46 I.C.C.
506, 509.
[
Footnote 23]
The Senate Report says that the enforcement provisions in the
Shipping Act "confer upon the board power to make orders necessary
for the
enforcement of the act. . . ." S.Rep.No.689, 64th
Cong., 1st Sess., p. 13. (Emphasis added.) Later on, the report
says the board shall "make such order as may be proper, including
an award of reparation for an injury resulting from the violation."
Ibid.
[
Footnote 24]
The Court of Appeals said it is "beyond question" that the Board
considered and made sufficient findings, supported by the record,
that Flota's exclusive contract with Panama Ecuador was "unjust"
and "unreasonable." It also said that the Board was
"entitled to conclude that neither the exclusive contract nor
the request for a declaratory order rendered Flota's discriminatory
refusal of space reasonable or just."
112 U.S.App.D.C. 302, 307-308, 302 F.2d 887, 892-893.
[
Footnote 25]
It is important to distinguish this situation from one where a
litigant affirmatively relies upon an agency declaration, later
reversed, that specifically authorized particular behavior.
See
Arizona Grocery Co. v. Atchison, Topeka & Santa Fe R. Co.,
284 U. S. 370.
[
Footnote 26]
Flota's operating manager in the United States testified that
"it is better to deal with one [shipper] than with three." There is
also evidence that Flota had been able to settle Panama Ecuador's
claims for shipment damages on a basis of only "2.4%, which is a
very low percentage in comparison with the usual 15% deduction
which applies to this type of transportation."
[
Footnote 27]
Because of its disposition of this case, the Court of Appeals
found it unnecessary to consider Flota's objection that counsel for
the Commission, who participated in the writing of the Commission's
reparation award upon remand, had violated 5 U.S.C. § 1004 (1964
ed.) because he had previously participated as Public Counsel in
the trial before the Hearing Examiner on the issue of whether Flota
had violated the Shipping Act (although not in the trial on the
reparations issue), and had defended the Commission's finding of
violation and award of reparations before the Court of Appeals in
the first consolidated appeals. We have examined Flota's contention
in this regard, and find it without merit.