Sea-Land Service, Inc. v. Department of Transportation
137 F.3d 640 | D.C. Cir. | 1998
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 12, 1997 Decided March 13, 1998
No. 93-1846
Sea-Land Service, Inc.,
Petitioner
v.
Department of Transportation, et al.,
Respondents
No. 97-1083
Sea-Land Service, Inc.,
Petitioner
v.
Federal Maritime Commission and United States of America,
Respondents
American President Lines, Ltd.,
Intervenor
Consolidated with
Nos. 97-1084, 97-1085
On Petition for Review of Orders of the
Federal Maritime Administration
John M. Nannes argued the cause for petitioner. With
him on the briefs were Richard L. Brusca, Robert S. Zucker- man, James P. Moore and Gary A. MacDonald.
Steve Frank, Attorney, U.S. Department of Justice, argued
the cause for respondent, Department of Navy, Military
Sealift Command. With him on the briefs were Frank W.
Hunger, Assistant Attorney General, Robert V. Zener, and
Barbara C. Biddle.
Carol J. Neustadt, Attorney, Federal Maritime Commis- sion, argued the cause and filed the brief for respondent,
Federal Maritime Commission.
Robert T. Basseches and John Townshend Rich were on
the briefs for amicus curiae American President Lines, Ltd.
Before: Williams and Rogers, Circuit Judges and
Buckley, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge Williams.
Williams, Circuit Judge: In 1993 the United States Mari- time Administration ("MarAd") issued two orders (the "modi- fication orders") deleting from several of its own previous
orders a clause that it had become convinced was legally
invalid. In No. 93-1846 Sea-Land Service, Inc. ("Sea-Land")
appealed from the modification orders. In the course of that
appeal it became apparent to the court that its resolution
turned in part on a question within the primary jurisdiction
of, and then pending before, the Federal Maritime Commis- sion ("FMC"); accordingly we stayed our proceedings pend- ing the FMC's decision. That decision, appealed by both
sides, is now before us in No. 97-1083 and consolidated cases.
We uphold a portion of the FMC decision and do not reach
the other portion. For reasons that will become apparent,
our ruling on the FMC decision completely undermines Mar- Ad's modification orders, which we accordingly vacate. With
the modification orders removed from the picture, the earlier
MarAd orders resume their full original effectiveness.
* * *
Sea-Land is an ocean common carrier, transporting con- tainerized freight, and a U.S. citizen within the meaning of
certain maritime legislation, namely 46 U.S.C. app.
s 808(c)(1). In 1988 Sea-Land acquired twelve large contain- erships that had been built for and operated by United States
Lines, Inc. until its bankruptcy in 1986. Sea-Land's pur- chase was made in conjunction with a Cooperative Working
Agreement with two foreign carriers, P&O Containers (TFL)
Limited and Nedlloyd Lijnen P.V. Under the Agreement,
Sea-Land agreed to charter two of the ships to the foreign
carriers for a period of time, and to charter and cross-charter
space with the foreign carriers on all twelve ships. Article
5(i) of the Agreement, the source of this litigation, prohibited
the foreign carriers from carrying on Sea-Land's vessels
cargo that was reserved to U.S.-flag vessels under the cargo
preference laws of the United States.1 __________
1 The Cargo Preference Acts require the Department of Defense
to use U.S.-flag vessels for ocean transport of military supplies and
to transport at least fifty percent of all other Department cargo on
Ocean common carriers are regulated by the Shipping Act
of 1916, 46 U.S.C. app. ss 801-842, administered by MarAd,
and the Shipping Act of 1984, 46 U.S.C. app. ss 1701-1720,
administered by the FMC. Cooperative working agreements
among ocean common carriers must be filed with the FMC,
which must reject agreements not meeting certain formal and
substantive requirements. See 46 U.S.C. app. ss 1704,
1705(b). If not rejected, an agreement becomes effective
shortly after its filing. See id. s 1705(c). If the FMC at any
time determines that an agreement is "likely, by a reduction
in competition, to produce an unreasonable reduction in trans- portation service or an unreasonable increase in transporta- tion cost," it may seek an injunction against its operation. Id.
s 1705(g). The 1984 Act exempts these agreements from the
antitrust laws, but prohibits certain anti-competitive conduct.
See id. ss 1706, 1709.
If a cooperative working agreement provides for the char- ter of U.S.-flag ships to foreign carriers, it must also be filed
with MarAd for its approval of the charter arrangements.
See 46 U.S.C. app. s 808(c). Under s 41 of the 1916 Act
MarAd is to approve charter agreements "either absolutely or
upon such conditions as the Secretary of Transportation
prescribes." 46 U.S.C. app. s 839.
Sea-Land accordingly submitted its agreement to both
agencies in early 1988. The Military Sealift Command
("Sealift Command"), the branch of the Navy Department
responsible for procuring transportation of military cargo,
opposed Article 5(i) of the Agreement before both agencies on
the grounds that it would "unreasonably restrict competition"
and raise the costs of such transportation. Despite the
Sealift Command's objections, MarAd issued charter orders
approving the agreements. Indeed, the orders, in their Con- __________ such vessels if carriage is available at "fair and reasonable rates."
See 10 U.S.C. s 2631(a); 46 U.S.C. app. s 1241(b)(1).
dition 4, required the parties to adhere to cargo-preference
limitations identical to those of Article 5(i).
The Sealift Command's attempt to persuade the FMC to
pursue an injunction proved equally unavailing. The FMC
noted that Article 5(i) "raised issues under the 1984 Act," but
correspondence with MarAd apparently satisfied it that Mar- Ad, in imposing Condition 4, saw its orders as "an expression
of the laws and policies of the United States." This being so,
the FMC advised the Sealift Command, "this agency has no
authority to directly overturn an action by MarAd taken
under sections 9 and 41 of the 1916 Act on any ground; such
a result must be sought by [Sealift Command] in some other
forum." The FMC decided to defer any decision on an
investigation--a preliminary step to requesting an injunc- tion--in order to allow the Sealift Command to pursue its
challenges elsewhere.
On February 16, 1990 the Sealift Command filed a com- plaint against Sea-Land with the FMC, alleging that Article
5(i) violated, inter alia, s 10(c)(6) of the 1984 Act, 46 U.S.C.
app. s 1709(c)(6). That section bars carriers from
allocat[ing] shippers among specific carriers that are
parties to the agreement or prohibit[ing] a carrier that is
a party to the agreement from soliciting cargo from a
particular shipper, except as otherwise required by the
law of the United States or the importing or exporting
country, or as agreed to by a shipper in a service
contract. 46 U.S.C. app. s 1709(c)(6) (emphasis added). The Sealift
Command's complaint alleged that Article 5(i) constituted a
proscribed "allocation." Sea-Land responded with a motion
to dismiss, based in part on a contention that the agreements
were not "allocations," and in part on the proposition that
they fell within s 10(c)(6)'s exception because MarAd's char- ter orders constituted "law of the United States" and, by
incorporating the restrictive condition, "required" the cargo- preference arrangement.
The Sealift Command had also petitioned MarAd to recon- sider its approval of the charter orders. MarAd denied this
petition while the FMC proceeding was under way. The
Sealift Command then notified the administrative law judge
presiding over the FMC proceedings that it was making a
"recommendation to proper higher authority for further ac- tion on the MarAd denial," and the ALJ stayed the FMC
proceeding to await the result. The "higher authority"
turned out to be the Department of Defense (Sealift Com- mand's parent Department). That Department, accurately
viewing the matter as a legal dispute between two executive
branch agencies, itself and the Department of Transportation
(MarAd's parent), asked the Justice Department's Office of
Legal Counsel ("OLC") for a resolution. The Sealift Com- mand argued to OLC that MarAd had exceeded its authority
in imposing Condition 4 as part of its charter orders.
On October 19, 1993 OLC issued a memorandum answering
the agencies' claims. First, it found that Article 5(i) of the
Cooperative Working Agreement was an allocation under
s 10(c)(6) of the 1984 Act. It was therefore unlawful unless
s 10(c)(6)'s exception for allocations "required by the law of
the United States" applied. And the exception could not
apply, thought OLC, because MarAd had no legal authority to
validate an illegal act. As a result, MarAd on December 3,
1993 sent orders to Sea-Land modifying each of the charter
orders by removing the restrictive Condition 4. Sea-Land
promptly sought judicial review of MarAd's modifications
here, arguing in part that the restrictive clause did not
constitute an allocation of shippers within the meaning of
Section 10(c)(6), and that even if it did, it was legitimized by
the original MarAd orders, which counted as "law of the
United States" under the "except" clause. Just after oral
argument of the case here, MarAd stayed its modification
orders until 20 days after our resolution of the case.
That resolution did not follow with the customary speed.
After oral argument we issued an order on our own initiative
staying our proceedings pending a decision by the FMC on
the Sealift Command's complaint against Sea-Land. The
validity of the MarAd charter conditions depended at least in
part on their status under s 10(c)(6), which was, we said, a
question within the primary jurisdiction of the FMC.
The FMC proceeding, of course, had itself been stayed
pending our decision, so the matching stays created the risk
of an Alphonse and Gaston standstill. In fact, however, the
ALJ promptly lifted the stay in the FMC proceeding. Ameri- can President Lines, Ltd. ("APL"), a carrier with interests
akin to Sea-Land's, was allowed to intervene to present legal
arguments. After initial decisions by the ALJ, the FMC
issued its report and order on December 10, 1996. The FMC
agreed with OLC that Article 5(i) did constitute an allocation
within the meaning of s 10(c)(6). But, disagreeing with OLC,
the FMC also found that valid MarAd orders were "law of the
United States," so that the arrangements in question fell
within the exception, at least potentially. Whether these
MarAd orders were valid depended on whether they were
"within the scope of the authority delegated by Congress to
[MarAd]."
This last issue, the FMC said, was beyond its jurisdiction,
and already before this Court in No. 93-1846. Presuming the
MarAd orders valid in the absence of any judicial decision to
the contrary, the FMC found no violation of s 10(c)(6) and
dismissed the Sealift Command's complaint, without prejudice
to reinstitution of the proceeding following our decision in No.
93-1846. The Sealift Command, Sea-Land, and APL all
appealed; we consolidated the petitions as No. 97-1083 et al.
With the ball once more in this court, we ordered supple- mental briefing in No. 93-1846, limited to the question of
whether MarAd was "authorized by Congress to issue charter
orders which contain the military cargo restriction at issue in
this case." We thus have before us the appeals from both
agencies.
In No. 97-1083, we affirm the FMC's decision as to the
operation of the "except" clause: valid MarAd orders are
"law of the United States"; therefore, if valid, the orders here
trigger s 10(c)(6)'s exception and shield Article 5(i) from its
prohibitions. In No. 93-1846, we reject the Sealift Com- mand's (and the United States's) attack on MarAd's authority
to issue the orders--namely, their contention that the orders
violate s 10(c)(6) itself. As that supposed invalidity was
MarAd's sole ground for modifying its original orders impos- ing Condition 4, we vacate the modification orders, thus
reviving the original orders in full.
* * *
On the question of whether MarAd orders constitute "law
of the United States" for purposes of s 10(c)(6)'s "except"
clause, the contending parties before us are the FMC and the
Sealift Command, the Command having appealed from the
FMC decision. Sea-Land and APL--beneficiaries of the
original MarAd orders (or parallel ones) and now caught in
the crossfire between MarAd and the Sealift Command--have
intervened in support of the FMC's view that the orders are
"law."
The Sealift Command starts with the argument that the
FMC did not decide the question we asked it to decide, so
that we should decide it for ourselves without any deference
to the FMC. This idea depends on a confusion of the
issues--oddly, a confusion that the FMC order was at pains
to dispel. The order separated the application of the "except"
clause into two distinct issues. First was the law question:
whether valid MarAd orders count as "law of the United
States" for the purposes of the "except clause." Second was
the question of whether these particular orders were valid
MarAd orders, i.e., whether they were within the agency's
authority. These inquiries are clearly distinct. If, for exam- ple, the Securities and Exchange Commission ("SEC") had
issued the charter orders in question, a court could readily
find that while valid SEC orders have the force of law, those
particular ones were ultra vires and invalid. The FMC did
decide the first question, and that is the one before us on
review in No. 97-1083.
We thus turn to the merits of the FMC decision on whether
a MarAd order is "law of the United States" within the
meaning of s 10(c)(6). This is, of course, a question of
statutory interpretation. But whether MarAd should have
the authority to exempt carriers from the s 10(c)(6) prohibi- tions is a policy question, one requiring a balancing of the
pro-competitive interests behind s 10(c)(6) and the rival de- mands of other policies, such as the promotion of the Ameri- can merchant marine, entrusted to maritime agencies like
MarAd. (Here the policies conflict to the extent that the
cargo preference provisions, aimed at protecting the U.S.
merchant marine by fencing off certain kinds of foreign
competition, may raise the cost of U.S. military shipments.)
It is precisely in answering questions of this sort that the
expertise and political accountability of administrative agen- cies command judicial deference. See Chevron v. National
Resources Defense Council, Inc., 467 U.S. 837, 844-45 (1984);
Health Ins. Ass'n of America v. Shalala, 23 F.3d 412, 416
(D.C. Cir. 1994).
We have in fact recognized that the FMC's interpretations
of the 1984 Act are entitled to Chevron deference. See
Chemical Manufacturers Ass'n v. FMC, 900 F.2d 311, 314
(D.C. Cir. 1990). Such deference comes into play, of course,
only as a consequence of statutory ambiguity, and then only if
the reviewing court finds an implicit delegation of authority to
the agency. See Chevron, 467 U.S. at 842-844. The second
condition is not questioned; as to the first, while the plain
meaning of s 10(c)(6) may tilt too powerfully against the
Sealift Command to justify the label "ambiguous," that is a
defect that does not help the Command.
Violation of a condition imposed by a MarAd order under
s 41 is a criminal act punishable by fine or imprisonment.
See 46 U.S.C. app. s 839. The Sealift Command concedes
that agency orders bearing criminal sanctions for violation
generally qualify as law. It argues, however, that the "ex- cept" clause was intended to exempt only the cargo prefer- ence laws of the United States and other countries. Had
Congress intended to include administrative orders, the Sea- lift Command claims, it would have done so explicitly. The
Sealift Command then offers a raft of supportive theories,
arguing that the specific prohibitions of s 10(c)(6) should take
precedence over any general MarAd mandate to foster the
merchant marine; that Congress could not have intended to
allow administrative agencies to provide exemptions from
s 10(c)(6); and that a "liberal interpretation" of the "except"
clause would undermine the general purpose of s 10.
The first argument is sufficiently answered by the observa- tion that had Congress intended to exempt only cargo prefer- ence laws, it could well have done that explicitly. The plain
meaning of a statute is (at least for starters) the one pro- duced by reading its words to have the meaning they do in
most contexts, and in most contexts, "law" includes an admin- istrative command backed by a criminal sanction. See, e.g.,
Chrysler Corp. v. Brown, 441 U.S. 281, 295 (1979) (substan- tive agency regulations have "force and effect of law"); Sing- er v. United States, 323 U.S. 338, 345-46 (1945) (regulations
backed by criminal sanctions are law); General Motors Corp.
v. Abrams, 897 F.2d 34, 39 (2d Cir. 1990) (regulations and
orders have force of law); Black's Law Dictionary 884 (6th
ed. 1990) ("That which must be obeyed and followed by
citizens subject to sanctions or legal consequences is a law.");
see also, e.g., Fidelity Federal Savings & Loan Ass'n v. De
La Cuesta, 458 U.S. 141, 153 (1982) (federal regulations count
as law for Supremacy Clause). The Sealift Command tells us
that the FMC's position is in this context "extraordinary" and
"contrary to common sense," but does not explain why.
Under the FMC's reading, s 10(c)(6) allows some federal
agencies to create exceptions to the section's otherwise un- conditional prohibitions. Here that means that agencies
charged with promoting federal maritime policies can tailor
the application of s 10(c)(6) to the needs of those policies.
We fail to see how such a mechanism is either extraordinary
or wanting in common sense.
The Sealift Command notes that s 10(c)(6) limits its excep- tion to requirements of "the law of the United States or the
importing or exporting country" and would have us infer an
intent to limit the exception to cargo preference laws. Of
course the import/export reference does suggest the subject
matter of the laws Congress had in mind, but Condition 4 of
the MarAd charter approvals addresses that subject matter: 2
it is an administrative order demanding a certain cargo
preference. But the limitation to exporting or importing
countries says nothing about the form of legal mandate, i.e.,
whether the term includes administrative as well as direct
statutory edicts.
Needless to say, the Sealift Command pursues the usual
quest for support in the legislative history of s 10(c)(6). The
quest is even more than usually unavailing and requires no
comment.
If "law of the United States" is in this context ambiguous,
we think the FMC's reading of the term to encompass the
MarAd charter orders handily meets Chevron's requirement
of reasonableness.
* * *
We now turn to the residue of No. 93-1846, which indirect- ly poses the issue of whether MarAd acted within the scope of
its delegated authority in issuing the original charter orders.
In this phase of the case, Sea-Land, joined by intervenor
APL, staunchly defends the original orders and thus contin- __________
2 Congress may well have thought that since its language allowed
exceptions to be created only by laws requiring an "allocation," such
laws would necessarily deal with cargo preferences. We do not
reach the issue of whether there is any independent subject-matter
prerequisite.
ues the attack on the modification orders; the United States
and Department of Transportation (MarAd's parent Depart- ment) defend the modification orders and thus, necessarily,
attack the validity of the original orders. As a general
matter, MarAd rested its original imposition of Condition 4 on
s 41 of the 1916 Act, which empowers the agency to approve
charter agreements "either absolutely or upon such condi- tions as the Secretary of Transportation prescribes." 46
U.S.C. app. s 839.
In No. 93-1846, it will be recalled, Sea-Land challenged
MarAd's 1993 modification orders, which MarAd had justi- fied exclusively by reference to OLC's theory that its original
charter orders imposing Condition 4 were invalid under
s 10(c)(6). If OLC's theory is wrong, the modification orders
lack a necessary foundation, and the original orders must be
reinstated. The FMC, to be sure, in denying relief to the
Sealift Command, noted that application of s 10(c)(6)'s excep- tion depended on the validity of the original charter orders;
but we do not think that observation miraculously expanded
the set of issues properly raised in No. 93-1846, giving
MarAd and the Sealift Command license to raise other possi- ble attacks on the original orders. Thus, although MarAd's
authority under s 41 of the 1916 Act is obviously limited--it
cannot, for example, condition its approval on payment of a
fee, see Clapp v. United States, 117 F. Supp. 576, 581 (Ct. Cl.
1954)--we confine ourselves to the single attack on the origi- nal orders that was put before us in No. 93-1846.
The United States re-asserts OLC's conclusion that "[w]ith- out specific authorization, either in its own organic statute or
in the other statute at issue, an agency lacks authority to
require private parties to violate a federal statute." This is
quite true, see Maislin Indus., U.S. v. Primary Steel, Inc.,
497 U.S. 116, 134-35 (1990), but irrelevant. Given the "ex- cept" clause and our earlier conclusion that valid MarAd
orders are law for purposes of s 10(c)(6), MarAd was not
requiring a violation of s 10(c)(6) so long as it was acting
within its statutory authority. It was issuing orders that
under s 10(c)(6) had the effect of triggering an exception to
that section's otherwise broad prohibition; s 10(c)(6) cannot
itself invalidate those triggering orders.
MarAd's belief that the original orders ran afoul of
s 10(c)(6) was thus incorrect. And as this erroneous belief
was the sole basis for the modification of the orders, the
modifications cannot stand. An agency action, however per- missible as an exercise of discretion, cannot be sustained
"where it is based not on the agency's own judgment but on
an erroneous view of the law." Prill v. National Labor
Relations Board, 755 F.2d 941, 947 (D.C. Cir. 1985); see also
Securities and Exchange Commission v. Chenery Corp., 318
U.S. 80, 94 (1943) ("[I]f the action is based upon a determina- tion of law as to which the reviewing authority of the courts
does come into play, an order may not stand if the agency has
misconceived the law.").3 In No. 93-1846, accordingly, we
vacate the modification orders, thus automatically reinstating
the orders imposing Condition 4. In consequence, Sea-Land's
agreement does not violate s 10(c)(6), and the FMC's dis- missal of the Sealift Command's complaint (appealed in No.
97-1084) was correct. We express no opinion as to whether
at this stage the Sealift Command can initiate some new
proceeding before or against MarAd, raising any new ques- tion about Condition 4 (e.g., a claim that its imposition was an
abuse of discretion).
* * *
We thus affirm the FMC's Order dismissing the Sealift
Command's complaint. There remains the ALJ's finding,
affirmed by the FMC, that Article 5(i) constituted an "alloca- tion" within the meaning of s 10(c)(6). The only parties
__________
3 Some courts explain this via the principle that agency action
founded on mistake of law is arbitrary and capricious within the
meaning of s 706(2) of the Administrative Procedure Act. See, e.g.,
Maez v. Mountain States Tel. & Tel., Inc., 54 F.3d 1488, 1505 (10th
Cir. 1995).
taking issue with that finding are Sea-Land and APL. Yet
they have no complaint with the Order dismissing the Sealift
Command's complaint against Sea-Land; they do not want
anything other than a dismissal.4 Instead, they take issue
only with the part of the FMC's decision saying that Article
5(i) is an allocation.
If they are asking for review merely of that determination,
an immediate obstacle arises. The statute that provides our
jurisdiction in this case, 28 U.S.C. s 2342(3), allows review of
"rules, regulations, or final orders" of the FMC--not of
reports, reasoning, or findings. See AT&T v. FCC, 602 F.2d
401, 406-07 (D.C. Cir. 1979) (where AT&T challenged not the
order but only some underlying findings, court lacked author- ity to hear appeal under s 2342(1), allowing review of "final
orders" of FCC). Here the FMC's action appears to be only
a finding: the ALJ found that Article 5(i) was an "allocation,"
and the FMC "ordered" that that finding "is affirmed." We
doubt whether the Commission's wrapping its finding in the
mantle of an order can make it an order for purposes of
s 2342; we have said that an FCC letter cannot be consid- ered an order under that section (and the FCC-specific 47
U.S.C. s 402(a)) without "some modicum of injury, some
concrete effect upon the station sufficient to support a court's
jurisdiction," Straus Communications, Inc. v. FCC, 530 F.2d
1001, 1006 (D.C. Cir. 1976), and the label placed by the
__________
4 The FMC Order dismisses the Sealift Command's complaint,
"without prejudice to reinstitution of this proceeding upon motion to
reinstate the complaint, after issuance of the mandate in D.C. Cir.
No. 93-1846." A prevailing party may appeal a dismissal without
prejudice on the grounds that it wants one with prejudice, see, e.g.,
LaBuhn v. Bulkmatic Transport Co., 865 F.2d 119, 122 (7th Cir.
1988), but given our decision that the original MarAd orders were
within the scope of MarAd's authority, the FMC Order will become
dismissal with prejudice by its own terms. Once it has failed to
prevail in No. 93-1846, the Sealift Command cannot reinstate its
complaint before the FMC. In any case, the Sea-Land/APL brief
makes nothing of the FMC's "without prejudice" characterization,
asking only that its "ruling" on the allocation issue be reversed or
vacated. Pet. Br. at 44.
agency on its action is normally not conclusive, Columbia
Broadcasting System, Inc. v. United States, 316 U.S. 407, 416
(1942). In any event, apart from the statutory hurdle, there
is an Article III barrier as well: Sea-Land and APL run
afoul of the principle that prevailing parties lack standing to
appeal.
Appellate courts "review[ ] judgments, not statements in
opinions." California v. Rooney, 483 U.S. 307, 311 (1987)
(quoting Black v. Cutter Laboratories, 351 U.S. 292, 297
(1956)). Where the judgment gives a party all the relief
requested, appeal may not be taken simply to challenge the
court's reasoning. See, e.g., In re Reporters Committee for
Freedom of the Press, 773 F.2d 1325, 1328 (D.C. Cir. 1985)
(citing Electrical Fittings Corp. v. Thomas & Betts Co., 307
U.S. 241, 242 (1939)).
Aware of this difficulty, Sea-Land and APL turn to Inter- national Brotherhood of Elec. Workers v. ICC ("IBEW"), 862
F.2d 330 (D.C. Cir. 1988), but the exception it carves out is
too small to accommodate this case. In IBEW, the petitioner
union challenged the ICC's determination that it had jurisdic- tion to review an arbitrator's award. The ICC had affirmed
the award, making the union the prevailing party, but we
found that the union had standing to challenge the intermedi- ate decision as to the ICC's jurisdiction. Tellingly for pres- ent purposes, we noted that the union was "not merely
quibbling over the agency's rationale in a case in which it has
prevailed," since what was at issue was not the agency's
reasoning but its "decision to review arbitration awards."
862 F.2d at 334. That decision was a policy of general
applicability, with the same effects as though "the Commis- sion had promulgated a rule," id., and the policy inflicted
cognizable harm. Indeed, we have since characterized IBEW
as standing for the proposition that "a party who prevails on
a challenge to a rule as applied is nonetheless permitted to
appeal from an adverse decision on a facial challenge to the
rule itself." Telecommunications Research and Action Cen-
ter v. FCC, 917 F.2d 585, 588 (D.C. Cir. 1990); compare id. at
588-89 (Silberman, J., concurring) (agreeing on judgment as
to lack of standing, but distinguishing IBEW as a case
allowing a winning party "to challenge a general rule if that
rule remains in existence and creates a cognizable harm
through its effects on that party's future rights").
But, petitioners might protest, every adjudication embodies
at least one rule, often several. The FMC's determination
that agreements like Sea-Land's are allocations is a generally
applicable interpretation of s 10(c)(6); why cannot Sea-Land
appeal it? The answer is that what petitioners fail to show is
not so much the rule as the harm. IBEW's facts were quite
different. The agency's assertion of jurisdiction there im- posed another layer of review on arbitration awards. The
decision did not suggest that petitioners would lose future
litigation; it ensured that future litigation would be more
costly, no matter how often petitioners prevailed. The con- crete cost of an additional proceeding is a cognizable Article
III injury. Cf. Telecommunications Research and Action
Center v. FCC, 917 F.2d at 588-89 (Silberman, J., concurring)
(noting need for "cognizable harm"). But mere precedential
effect within an agency is not, alone, enough to create Article
III standing, no matter how foreseeable the future litigation.
See, e.g., Abbs v. Sullivan, 963 F.2d 918, 924 (7th Cir. 1992);
Radiofone, Inc. v. Federal Communications Comm'n, 759
F.2d 936, 938 (D.C. Cir. 1985) (separate opinion of Scalia, J.);
see generally Shell Oil Co. v. FERC, 47 F.3d 1186, 1200-03
(D.C. Cir. 1995) (reviewing types of continuing harm from
contents of decision that are enough to give winner of the
judgment standing); Crowley Caribbean Transport, Inc. v.
Pena, 37 F.3d 671 (D.C. Cir. 1994) (no standing to assail
agency's legal reasoning absent concrete injury). Sea-Land
and APL have pointed us to no consequences flowing from
the FMC's general interpretation of s 10(c)(6) that suffice to
confer standing.
If not the FMC's general interpretation of s 10(c)(6)'s term
"allocation," what of its particular classification of Article 5(i)
and equivalent language? Sea-Land and APL pin their
hopes on a dictum in IBEW--the suggestion that "the pros- pect that an unfavorable ruling would act as collateral estop- pel in subsequent litigation" is sufficient to confer standing on
an otherwise prevailing party. IBEW, 862 F.2d at 334 (cited
in Pet. Br. at 2). The dictum in turn relied on Electrical
Fittings Corp. v. Thomas & Betts Co., 307 U.S. 241 (1939);
see also Deposit Guaranty Nat'l Bank v. Roper, 445 U.S. 326,
334-35 & n.7 (1980) (explaining Electrical Fittings). In fact,
however, review in Electrical Fittings of the findings against
the winning party did not turn on collateral estoppel effects;
as the Court later noted, the Electrical Fittings Court did not
question the court of appeals's statement that there would be
no preclusive effect. See Roper, 445 U.S. at 334-35.
In any event, an argument from collateral estoppel conse- quences has elements of circularity. As collateral estoppel
does not apply to an unappealable determination, see War- ner/Elektra/Atlantic Corp. v. County of DuPage, 991 F.2d
1280, 1282 (7th Cir. 1993), simply holding a ruling unappeala- ble eliminates any prospect of preclusion, id. at 1282-83. To
cut out of the circle one must inquire whether the disputed
component of the agency decision has the prerequisites for
collateral estoppel independent of appealability; if not, then
collateral estoppel cannot be the basis for appealability.
We need not here explore the conditions under which an
administrative determination might have an issue-preclusive
effect in a later judicial proceeding. To have such an effect, it
must not only satisfy the ordinary requirements of collateral
estoppel but must also result from a process sufficiently
similar to a judicial proceeding. See Restatement (Second) of
Judgments s 83 (1982). Here, the FMC's decision on the
"allocation" issue lacks one of the ordinary prerequisites: it
was not necessary to the judgment. See, e.g., Montana v.
United States, 440 U.S. 147, 153 (1979); Abbs, 963 F.2d at
924. Thus, quite independently of their lack of appealability,
FMC's findings on allocation can give Sea-Land no reason- able concern about preclusive effect. Indeed, ongoing FMC
proceedings show that the agency understands this: while
maintaining its position on s 10(c)(6), it does not suggest that
the findings are preclusive. See 63 Fed. Reg. 3115, 3116
(1998).
Neither the general interpretation of s 10(c)(6), nor the
specific findings about these agreements, makes the FMC's
decision adverse to Sea-Land and APL. Without an adverse
judgment, or extraordinary circumstances such as enunciation
of a rule with the kind of injury inflicted in IBEW, objectiona- ble interpretations and findings are not enough to ground an
appeal.
That does not mean that Sea-Land and APL had no way of
challenging the FMC's decision on the allocation issue. The
Sealift Command's appeal, No. 97-1084, is properly before us,
and Sea-Land and APL have intervened in support of the
FMC. They could, as intervenors, properly have urged affir- mance or remand on any ground presented to the FMC,
including their argument about the allocation clause. See
Showtime Networks, Inc. v. FCC, 932 F.2d 1, 4-5 (D.C. Cir.
1991). This method of presenting issues, defensively and in
the alternative, is the usual way for prevailing parties to
protect themselves on appeal from the risk that the appellate
court may reverse the decisions attacked by the appellants.
Sea-Land and APL did not employ it; their brief as interve- nors, at 2, explicitly restricts itself to the question of whether
MarAd orders are "law of the United States."
An alternative risk-control device would have been a "con- ditional" cross-appeal, asking to be heard only if we accepted
the Sealift Command's argument about the "except" clause.
While some circuits treat conditional cross-appeals as outside
their jurisdiction in these circumstances, evidently on the
ground that parties may rely on the more conventional inter- vention procedure, see, e.g., Great American Audio Corp. v.
Metacom, Inc., 938 F.2d 16, 19 (2d Cir. 1991), most apparent- ly accept them. See generally 15A Charles A. Wright et al.,
Federal Practice & Procedure s 3902 at 78-79 (1992) (collect- ing cases).
The carriers in fact framed their appeal unconditionally,
but this circuit, in Showtime, 932 F.2d at 5, appeared willing
to entertain even a conditional cross-appeal styled as an
unconditional petition for review--if the feared judicial em- brace of the appellant's position materialized. See also Hart- man v. Duffey, 19 F.3d 1459, 1465-66 (D.C. Cir. 1994) (dis- cussing conditional cross-appeals). Thus, if we had accepted
the Sealift Command's position on s 10(c)(6)'s exception, we
would hesitate to reverse the FMC without considering Sea- Land's and APL's claims on the "allocation" issue.
But where, as here, the losing party's theories are rejected,
courts appear uniformly to dismiss a conditional cross-appeal.
Showtime reaches this result, noting to be sure that the party
bringing the appeal conceded its mootness in such circum- stances. See 932 F.2d at 5; see also, e.g., Maschka v.
Genuine Parts Co., 122 F.3d 566, 572 n.4 (8th Cir. 1997)
(dismissing cross-appeal as moot after affirming district
court); Wilson v. New York, 89 F.3d 32 (2d Cir. 1996) ("no
occasion to reach issues" without reversal); Hartman, 19
F.3d at 1465 (stating that "the cross-appeal is reached only if
and when the appellate court decides to reverse or modify the
main judgment"); see generally Wright, et al., Federal Prac- tice & Procedure, s 3902 at 78-79 (stating that courts decide
cross-appeals "only if disposition of the appeal makes it
appropriate"); cf. Council 31 v. Ward, 978 F.2d 373, 380 (7th
Cir. 1992) (noting that reversal "invigorat[es] the cross-appeal
and support[s] our jurisdiction"). While characterizing such a
cross-appeal as moot may be in tension with the general
recognition that a court's acceptance of one of an appellant's
two independent bases for attack does not render the second
basis moot, see Air Line Pilots Ass'n, Int'l v. UAL Corp., 897
F.2d 1394, 1397 (7th Cir. 1990), this case presents no reason
to break out of conventional practice. Thus, on affirming the
FMC decision on the operation of the "except" clause, we
dismiss Sea-Land's appeal without reaching the merits.
* * *
In No. 93-1846 we vacate MarAd's modifications to the
charter orders; in No. 97-1083 and consolidated cases we
affirm the FMC's dismissal of the Sealift Command's com- plaint.
So ordered.
