Volkswagenwerk AG v. FMC
Annotate this Case
390 U.S. 261 (1968)
U.S. Supreme Court
Volkswagenwerk AG v. FMC, 390 U.S. 261 (1968)
Volkswagenwerk Aktiengesellschaft v.
Federal Maritime Commission
Argued November 13, 1967
Decided March 6, 1968
390 U.S. 261
The Pacific Maritime Association (PMA), representing the Pacific Coast shipping industry employers, and the International Longshoremen's and Warehousemen's Union reached an agreement whereby the union consented to the use of labor-saving devices and the elimination of certain restrictive work practices in return for PMA's promise to create a $29,000,000 fund to mitigate the effect of technological unemployment. The agreement reserved to PMA the right to determine how to raise the fund from its members. PMA approved an assessment per "revenue ton," based either on weight (2,000 pounds) or measurement (40 cubic feet), determined by the manner in which cargo had customarily been manifested, with the exception of automobiles, which were to be declared by measurement. For petitioner's automobiles, the assessment came to $2.35 per vehicle, an increase in unloading costs of 22.5%, rather than 25 cents under an assessment by weight, or about 2.4% increase in costs, comparable to the average fund assessment of 2.2% for all other general cargo. Petitioner obtained a stay of the action brought by PMA to collect the assessment from the terminal company unloading petitioner's automobiles, to permit it to invoke the primary jurisdiction of the Federal Maritime Commission (FMC) to determine whether the assessments were claimed under an agreement required to be filed with and approved by the FMC under § 15 of the Shipping Act, 1916, and whether the assessments violated §§ 16 and 17 of that Act. The FMC dismissed petitioner's complaint, holding that the agreement did not "affect competition," and did not come within § 15 in the absence of an additional agreement by PMA to pass on all or a portion of the assessments to the carriers and shippers served by the terminal operators; that § 16 was not violated, since petitioner had not shown any unequal treatment between its cars and other automobiles or cargo competitive therewith, and that there was no violation of § 17, since the petitioner
had received "substantial benefits" in return for the assessment. The Court of Appeals affirmed.
1. The agreement was required to be filed with the FMC under § 15 of the Act. Pp. 390 U. S. 268-278.
(a) The FMC recognized that the assessment formula was a "cooperative working agreement" clearly within the plain language of § 15. P. 390 U. S. 271.
(b) In holding that the agreement did not "affect competition," the FMC ignored economic realities which required most of the assessments to be passed on. P. 390 U. S. 273.
(c) The FMC has not previously limited § 15 to horizontal agreements among competitors, but has applied it to other agreements within its literal terms. P. 390 U. S. 274.
(d) The legislative history of this broad statute indicates that Congress intended to subject to the scrutiny of a specialized agency the myriad of restrictive maritime agreements. Pp. 390 U. S. 275-276.
(e) While the FMC may determine that some de minimis or routine agreements need not be filed under § 15, this agreement, levying $29,000,000, binding the whole Pacific Coast shipping industry, and resulting in substantially increased stevedoring and terminal charges, was neither de minimis nor routine. Pp. 390 U. S. 276-277.
(f) The only agreement involved here is the one among PMA members allocating the impact of the fund levy, and only the assessment on automobiles is challenged. P. 390 U. S. 278.
2. When the agreement is filed, the FMC may consider anew whether the mere absence of a competitive relationship should foreclose inquiry under § 16. Pp. 390 U. S. 279-280.
3. The proper inquiry under § 17 is whether the charge levied is reasonably related to the service rendered. Pp. 390 U. S. 280-282.
125 U.S.App.D.C. 282, 371 F.2d 747, reversed and remanded.