UNITED STATES v. AMERICAN UNION TRANSPORT, INC. ET AL.
No. 44
Supreme Court of the United States
Argued October 11, 1945.—Decided February 25, 1946.
327 U.S. 437
I think that one who complains that a state tax, though not discriminatory on its face, discriminates against interstate commerce in its actual operation should be required to come forward with proof to sustain the charge. See Southern Railway Co. v. King, 217 U. S. 524, 534-537. This does not, of course, require proof of the obvious. But, as Mr. Justice Brandeis pointed out, cases of this type should not be decided on the basis of speculation; the special facts and circumstances will often be decisive. Hammond v. Schappi Bus Line, 275 U. S. 164, 170-172. Without evidence and findings we frequently can have no “sure basis” for the informed judgment that is necessary for decision. Terminal Railroad Assn. v. Brotherhood of Trainmen, 318 U. S. 1, 8. That seems to me to be the case here. Proof should be required to overcome the presumptive validity of this local legislation as applied to Nippert.
Walter J. Cummings, Jr. argued the cause for the United States. With him on the brief were Acting Solicitor General Judson, John F. Sonnett and David L. Kreeger.
Harold L. Allen argued the cause and filed a brief for appellees.
MR. JUSTICE RUTLEDGE delivered the opinion of the Court.
The United States appeals from a decree entered by a District Court of three judges permanently enjoining enforcement of an order of the United States Maritime Commission. The order required the appellees and others to answer within thirty days a questionnaire concerning certain aspects of their business transacted during 1940, 1941 and 1942.1 The central issue is whether
On August 21, 1942, the Commission, upon its own motion, ordered an investigation concerning the lawfulness of the rules, regulations, practices and operations of named persons and firms, described as carrying on “the business of forwarding in foreign commerce . . .” The order stated that from information before the Commission it appeared that a certain forwarding firm was engaging in practices which seemed to be in violation of
Accordingly, the Commission sent to the persons and firms named a questionnaire containing the inquiry, among others, “Do you carry on the business of forwarding in connection with common carriers by water in foreign commerce?”2 Each of the appellees answered this in the affirmative.3 But negative answers were given to the question, “Is your company owned or controlled by or affiliated with any shippers for whom you act as forwarder or with any common carrier?”
On January 14, 1943, the Commission entered an order, pursuant to
On November 30, 1943, the District Court denied the Commission‘s motion for summary judgment and granted a temporary injunction restraining execution of the May 18, 1943, order. The injunction was made permanent on November 30, 1944.4 The court held that the Maritime Commission had no jurisdiction over the appellees since, in its view, they did not come within the definition of the term “other person subject to this Act” given in
The question we are to review is whether the appellees are included within the designation “other person subject to this Act” as that phrase is defined in
Substantially, the issue turns upon the meaning of “in connection with,” that is, whether some relation of affiliation with the carrier is required, such as that exemplified in Railroad Retirement Board v. Duquesne Warehouse Co., 326 U. S. 446; or, on the other hand, the statutory phrasing is satisfied by the type of relationship illustrated by the companion cases of California v. United States and Oakland v. United States, 320 U. S. 577.5
If, as appellees contend, “in connection with” covers only forwarding businesses actually affiliated with a common carrier by water in a corporate sense, or under the control of or pursuant to a continuing contract with such a carrier, then plainly the Maritime Commission is without jurisdiction over these appellees, since none of them is controlled by or affiliated with a common carrier by water in any such manner. All are so-called independent
There is little or no dispute as to the nature of their business. They are primarily forwarders of freight, as that term is generally understood,6 for transshipment in foreign commerce. The foreign freight forwarding business is a medium used by almost all export shippers. An exporter, intending to send goods abroad, consigns the merchandise to a forwarder who then makes all the arrangements for dispatching it to a foreign port. The forwarder must arrange for necessary space with the steamship companies, procure and prepare the many documents, obtain permits for the acceptance of freight at piers, and at times must find available storage space for the shipment until steamers are available. If requested to do so, a forwarder will secure whatever insurance is needed.
Forwarders also have many other incidental duties. They check the marks on shipping papers and containers
By engaging in these many activities of the forwarding business, independent forwarders—and particularly the appellees—act as agents of the shipper. They assume no responsibility for the transportation of goods.
We think the appellees are within the coverage of
The language is broad and general. No intent is suggested to classify forwarders, covering some but not others, just as none appears to divide persons “furnishing wharfage, dock, warehouse, or other terminal facilities” into regulated and unregulated groups. California v. United States; Oakland v. United States, supra. The absence of any such suggestion becomes highly significant by contrast with similar definitions of other statutes more or less related to the Shipping Act. In these Congress,
Thus, in the legislation relating to railroads, forwarders were first covered expressly in 1942.
The same difference applies with reference to the definitions of the term “employer” in the Railroad Retirement Act of 1937,
In the face of such repeated demonstrations that Congress makes its purpose plain, when it actually intends to limit the coverage of others than carriers to affiliates or to persons performing part of the transportation service, the conclusion hardly is tenable that it means the same thing when it employs more broadly inclusive language and wholly omits all such limitations. This view is further emphasized, as will appear, by the fact that to cut down the meaning of
In view of these facts, it is doubtful that the wording of the definition is sufficiently ambiguous to require construction, more especially in view of the decisions in the California and Oakland cases. But if room for doubt remains, it is altogether removed by the considerations of policy and history to which we have referred. We turn accordingly to the statutory setting.
In several sections, for example,
Section 157 requires filing of specified agreements or memoranda with the Commission and exempts from the
Section 169 forbids various forms of discrimination, as well as other practices, on the part of any common car-
Whether or not the premise is correct, the conclusion does not follow. That the Commission may have jurisdiction over one of the two parties to a discriminatory agreement or arrangement hardly means that it shall not have jurisdiction over both. Indeed, unless the juris-
The purpose of § 17,10 in relevant part, is to provide for the establishment, observance and enforcement of just and reasonable regulations and practices relating to or in connection with the receiving, handling, storing or delivering of property. By the nature of their business, independent forwarders are intimately connected with these various activities. Here again, unless the Commission has jurisdiction over them, it may not be able effectively to carry out the policy of the Act.
Section 20,11 which for the most part was copied from
Finally,
The intimate relationship of the forwarder to both shipper and carrier, essentially that of go-between, gives him not only unique sources of information, perhaps in its totality available to no one else, but also unique opportunity to engage in practices which the Act contemplates shall be subject to regulation, some of which we have emphasized in quoting the statutory provisions. The statute throughout is drawn in very broad terms. It forbids direct or indirect accomplishment of the outlawed acts. It broadly covers specific practices, including false billing, classification, weighing, and the manner of placing insurance,
The legislative history clearly supports this view, although for explicit statement it is scanty. No discussion concerning the meaning of “any person [not a carrier] carrying on the business of forwarding . . . in connection with a common carrier by water” appears except in the statement of the manager of the bill in the House of Representatives.13 When dealing with the breadth of the term “other person subject to this act,” he said: “Hence, if this board [the United States Shipping Board] effectually regulates water carriers, it must also have supervision of all those incidental facilities connected with the main carriers . . . .” 53 Cong. Rec. 8276. Certainly this language is not indicative of intent to give a narrowly restricted scope to the definition‘s coverage. Quite the opposite is its effect.
The more significant legislative history, however, appears in the metamorphosis which this provision of
“The term ‘other person subject to this Act’ means any person not included in the term ‘common carrier
by water’ and carrying on the business of forwarding, ferrying, towing, or furnishing transfer, lighterage, dock, warehouse, or other terminal facilities in or in connection with the foreign or interstate commerce of the United States.” (Emphasis added.)
As this was revised in the bill which was enacted (H. R. 15455, 64th Cong.), two changes occurred, apart from adding explicit mention of wharfage as among the terminal services. One was to eliminate the words “ferrying, towing . . . transfer, lighterage.” The other was to substitute “in connection with a common carrier by water” for “in or in connection with the foreign or interstate commerce of the United States.”
Had this latter wording been retained there could not have been the remotest basis for suggesting that independent forwarders were not covered, as there could have been none with reference to any of the other businesses or services mentioned. But, for a reason wholly unrelated to narrowing the class of forwarders and others not carriers who had been included, the original concluding phraseology was changed. That language was obviously inexact when applied, as the Shipping Act did apply, to carriage by water and incidental activities. Taken literally, the broad wording would have included forwarders and others furnishing terminal facilities in connection with shipments by rail. Obviously it was to eliminate this incongruity, and not to constrict the classes of “other persons” previously enumerated, that this change was made.
That it had no other purpose appears, moreover, from the elimination of “ferrying, towing . . . transfer, lighterage,” which shows that when Congress wished to cut down the classes originally covered it did so attentively and explicitly. These eliminated persons were included originally, along with forwarders and others, not simply
Indeed, we held as much in the cases of California v. United States and Oakland v. United States, supra. The decision was that the Commission has jurisdiction over state and municipally owned businesses furnishing terminal facilities. The ruling would include a fortiori pri-
What has been said disposes of the principal contentions and issues. Appellees however offer other arguments, founded chiefly in the absence of prior established administrative practice,18 but also in the history
It remains only to notice the further objections that the case does not involve the use of forwarders by carriers to evade regulations applicable to carriers; and that to hold independent forwarders “subject to this Act” will bring them under its regulatory provisions, in other words, will make them “subject to this Act.”
Needless to repeat, it is precisely because we think the latter effect is required by the considerations already set forth that our conclusion has been reached. Moreover, support for it is given by the very terms of the specific regulatory provisions cited to contradict it, as we have pointed out.21 The ground need not be traversed again. The cited provisions, like
The common sense of all this, of course, is that Congress knew what it was about in both instances. We cannot ignore its repeated demonstrations of that fact. To do so would be to rewrite the statute, injecting limitations of affiliation no more rightfully within our function than inserting others of physical participation in the transportation service proper or of financial responsibility for it. These admittedly cannot go in, although there would be as much warrant for adding them as for putting in affiliation.
It is inherent in the view we take of the statute that more is involved than merely a carrier‘s attempt to immunize itself against the Act‘s penalties by using a forwarder to evade the regulations made binding on carriers. In that respect forwarders are obviously no different from other persons, for the Act does not permit such evasion by a carrier whether through the use of forwarders or any other persons. What is more important is that the Act is designed and in terms undertakes not only to prevent such evasion by carriers through denying them immunity when they hide behind forwarders; it also denies immunity to the forwarders themselves when they commit the acts or practices carriers and others subject to the Act are forbidden to perform.
The judgment is reversed and the cause is remanded for further proceedings in conformity with this opinion.
MR. JUSTICE JACKSON took no part in the consideration or decision of this case.
MR. JUSTICE FRANKFURTER dissenting, with whom MR. JUSTICE BLACK and MR. JUSTICE DOUGLAS concur.
It is important to keep in mind what this case is not. It does not involve the power of the Maritime Commission to obtain from a forwarder all information relevant to any inquiry by the Commission, based on complaints of violations of the Shipping Act or on its own motion. Section 27 of that Act gives the Commission such subpoena powers and subjects every person, forwarder or
The case is this. The business of these appellees is to negotiate on behalf of shippers for shipping space and to make the necessary administrative arrangements for the carriage of goods. They have no part in the physical process of moving goods. They have no corporate, physical, or financial tie with the carriers. The sole question here is whether such business has been brought under the regulatory scheme of the Act. The Commission contends that they are “persons subject to the Act.” If the Commission is correct, these forwarders would have to submit all sorts of agreements with carriers and with other forwarders to the Commission for approval (39 Stat. 733,
The Shipping Act has been on the statute books since 1916. Yet not until 1942 did the agency charged with
A consideration of the language of the legislation in its proper setting makes it abundantly clear that the failure of the Commission and its predecessor for more than twenty-five years to exercise the authority which it now claims was due neither to ignorance nor to indifference. The explanation that would spontaneously occur to one for such administrative practice is, I believe, the right one: the power was not exercised because Congress did not grant it.
It is a fair generalization that Congress has never supplanted the forces of competition by administrative regulation until a real evil had, in the opinion of Congress, manifested the need for it. One turns in vain to the Congressional investigation which led to the Shipping Act, to the hearings on the bills which became that Act, to the reports on which it was based, to the experience under the
The Commission‘s claim of jurisdiction must rest on construction of the phrase “business of forwarding . . . in connection with a common carrier by water.” 39 Stat. 728,
Abstractly it may be argued that “forwarding” was intended to cover only those activities which included the physical transportation or movement of goods from one place to another. Cf. e. g., H. R. 9089, 9090, 9888, 76th Cong., 3d Sess. (1940); S. 3665, 3666, 4096, 76th Cong., 3d Sess. (1940). Support for such a restrictive meaning might be drawn from the fact that the “other persons” subject to the Act were those concerned with the physical handling of the goods. But such a construction would disregard the purpose of the statute. Again, the term may be said to cover only those businesses in which the forwarder assumes the liability for safe shipment of the goods from point of shipment to their desti-
But Congress did not regulate “forwarders“; it regulated the “business of forwarding . . . in connection with a common carrier by water.” When, then, is forwarding “in connection with a common carrier by water“? That term may mean a business or financial connection; it may mean a physical connection, i. e., the mutual handling of goods; it may mean both. Or it may mean any share in the process of offering of goods for water shipment. This last construction would mean that the restriction could have been included only for the purpose of excluding forwarders like these but concerned with shipment by rail. Such is the Commission‘s essential argument, that the phrase is merely a saving clause against its application to forwarders dealing with land carriers. To suggest that such a roundabout method was used for the purpose of saying that this statute was not impliedly intended as an amendment to the familiar Interstate Commerce Act, 24 Stat. 379,
Significance must be given to the qualification. What more reasonable than to hold that this phrase means those forwarders who are so closely tied to the business of the water carrier, by corporate, financial, or physical union, as to make regulation of them appropriate in order to control effectively the carriers with which they are affiliated? Such a forwarder is really a part of the process of carrying. Here the forwarders are closely connected not with the carrier but with the shipper.
That such construction respects Congressional purpose is reinforced by Congressional action regarding forwarders dealing with land carriers. When Congress, in 1942, first regulated such land-carrier forwarders, 56 Stat. 284,
California v. United States, 320 U. S. 577, involved a totally different situation. That case was concerned with wharves—facilities physically connected with water carriers. These were just as much the agents of the carrier as of the shipper; they formed an integral part of the carrier‘s business. As a matter of physical fact, the “connection” of these forwarders to a carrier is very different from the “connection” of wharf facilities to the carrier. Awareness of that fact was demonstrated by the specific omission, in the California opinion, of the term “for-
Notes
“The board [commission] may by order disapprove, cancel, or modify any agreement, or any modification or cancellation thereof, whether or not previously approved by it, that it finds to be unjustly discriminatory or unfair as between carriers, shippers, exporters, importers, or ports, or between exporters from the United States and their foreign competitors, or to operate to the detriment of the commerce of the United States, or to be in violation of this Act, and shall approve all other agreements, modifications, or cancellations.
“Agreements existing at the time of the organization of the board [commission] shall be lawful until disapproved by the board [commission]. It shall be unlawful to carry out any agreement or any portion thereof disapproved by the board [commission].
“All agreements, modifications, or cancellations made after the organization of the board [commission] shall be lawful only when and as long as approved by the board [commission], and before approval or after disapproval it shall be unlawful to carry out in whole or in part, directly or indirectly, any such agreement, modification, or cancellation.
“Every agreement, modification, or cancellation lawful under this section shall be excepted from the provisions of the Act approved July second, eighteen hundred and ninety, entitled ‘An Act to protect trade and commerce against unlawful restraints and monopolies,’ and amendments and Acts supplementary thereto, and the provisions of sections seventy-three to seventy-seven, both inclusive, of the Act approved August twenty-seventh, eighteen hundred and ninety-four, entitled ‘An Act to reduce taxation, to provide revenue for the Government, and for other purposes, and amendments and Acts supplementary thereto.
“Whoever violates any provision of this section shall be liable to a penalty of $1,000 for each day such violation continues, to be recovered by the United States in a civil action.” 39 Stat. 733;
“That it shall be unlawful for any common carrier by water, or other person subject to this Act, either alone or in conjunction with any other person, directly or indirectly—
“First. To 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.
“Second. To allow any person to obtain transportation for property at less than the regular rates or charges then established and enforced on the line of such carrier by means of false billing, false classification, false weighing, false report of weight, or by any other unjust or unfair device or means.
“Third. To induce, persuade, or otherwise influence any marine insurance company or underwriter, or agent thereof, not to give a competing carrier by water as favorable a rate of insurance on vessel or cargo, having due regard to the class of vessel or cargo, as is granted to such carrier or other person subject to this Act.
“Whoever violates any provision of this section shall be guilty of a misdemeanor punishable by a fine of not more than $5,000 for each offense.” 39 Stat. 734, as amended by 49 Stat. 1518;