Consolo v. Federal Maritime Commission – Oral Argument – December 07, 1965

Media for Consolo v. Federal Maritime Commission

Audio Transcription for Oral Argument – December 06, 1965 in Consolo v. Federal Maritime Commission

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Earl Warren:

Consolo, Petitioner, versus Federal Maritime Commission et al.

Mr. Posner.

Richard A. Posner:

Mr. Chief Justice and May it please the Court.

If the Court will bear with me briefly, I’ll try to restate the government’s position on the jurisdictional issue here in such a way as to answer some of the questions that members have put — had yesterday and were left unresolved at the recess.

We’re trying to make sense here of a statutory pattern, a network of interrelated statutory provisions in the Shipping Act.

Now, putting aside for a moment the question of the bearing, if any of the Hobbs Act on this question, the pattern here is the same as under the Interstate Commerce Act, the issue discussed in the Atlantic case yesterday.

Now review briefly, the salient features of this statutory pattern in the Shipping Act.

First, Section 22 provides that any person may file with the Commission a complaint against the carrier and if the carrier doesn’t satisfy the complaint than after the usual administrative proceedings and hearing, the Commission can issue an order and it can issue orders of two types.

On the one hand, it can make an order prospect of an effect, a prescriptive, or injunctive or declaratory order, regulating the carrier’s practices for the future.

And on the other hand, it can issue a damages order that is a reparations order directing the carrier to pay, to make a money payment to the shipper to make him hold for the damages that he suffered as a result of an unlawful act by the carrier.

The next section, I want to mention is Section 31 of the Act which provides that the venue and procedure and actions to enforce, set aside or suspend orders of the Maritime Commission shall be the same as in similar actions involving ICC orders.

This Section incorporates by reference the Urgent Deficiencies Act which is now codified in Section 1336, the Judicial Code, which empowers the District Courts to set aside orders of the Maritime Commission at the behest of the carrier and these review proceedings are brought against the Commission of the United States.

Now, on its face of Section 31 would seem to embrace and make reviewable in these actions against the Commission of the United States, both kinds of orders under Section 22, both the prescriptive, injunctive type orders and the reparations orders.

We think that Section 31 should not be so construed, however, and we rely for this distinction in result on two further sections of the Shipping Act, Sections 29 and 30.

And their interrelation is really the core of this case.

Under Section 29, the Commission and the Attorney General as well as the charging party is empowered to bring Federal District Court proceedings to enforce orders of the Maritime Commission.

But not all orders, only those orders prescriptive or injunctive in effect, our orders for the payment of money that is reparations orders are expressly excluded.

The procedure for enforcing reparations orders is different.

It is set forth in Section 30.

This enforcement action provided for by Section 30 is one brought by the shipper against the carrier.

The Maritime Commission or the Attorney General are not parties, have no power to enforce such orders.

Moreover, in the shipper’s enforcement action, the shipper has been given distinct procedural advantages, a wide choice of form, freedom from costs and a reasonable attorney’s fee if he prevails.

There is no counter part in Section 29 relating to the enforcement of non-reparations order to these procedural advantages in Section 30.

Now why did Congress make a distinction in the enforcement mechanism for non-reparations and reparations orders?

Why the first enforceable by the — by the government but not the second and why does the shipper enjoy special advantages in his enforcement suit of reparations orders?

The answer we think has to do with a limited public interest in a reparations proceeding.

If the Commission issues an order prescribing a rate, that’s an order that governs the relationship between the carrier and the shippers — and all shippers for the future.

If on the other hand, it goes on to award the shipper damages for the past misconduct of the carrier for the unjust rate say that the carrier charged.

This is just an adjustment between shipper and carrier, an assessment of damages and the process of assessing damages is one traditionally left to private litigation and so here to a shipper’s enforcement suit in which the government plays no role.

Could I ask you a question of this point and it goes back to something that you said at the conclusion of the argument yesterday that interested me.

As a basis for making an award of damages, are there not usually questions involved that are of more than personal interest between the particular railroad or particular carrier and a particular shipper?

Richard A. Posner:

That depends.

Very often in reparations case, involving say an overcharge under a tariff, the tariff or the rate is no longer in existence.

Now in other cases, the rate or tariff that’s found unlawful is continuing.

But in a case like that, the Maritime Commission or the Interstate Commerce Commission will issue two orders.

The one prescribing the just and reasonable rate which the carrier is required to charge the shipper and then going on from there and assessing damages.

Now, the first order is of public significance and is reviewable in this action brought by the carrier against the United States and the Commission to set aside the order.

But the damages phase of the proceeding in which there is a much less public interest.

That’s the subject of the shipper’s enforcement action.

Yes but when you get to a enforcement action, shipper’s enforcement action going back to the Interstate Commerce numbers which I can remember easier and the other section numbers.

Under 16 (2) of the Interstate Commerce Act, that basic order of the Commission that is a general public interest is drawn in question there too, isn’t it in the shippers action?

Richard A. Posner:

No, as I understand the practice of the Commission.

It issues two separate orders and only the reparations order is at issue in the shipper’s enforcement act and it is true that the underlined violation of law which is at issue in the shipper’s enforcement action may have continuing significance because it was a subject of an order prescribed in a new rate but that order will be reviewable in the ordinary mode where the Commission and the United States participate.

The only issue on a shipper’s action would be the amount of damages do you think?

Richard A. Posner:

No.

The — the question on whether the carrier had violated the Act could also be an issue.

However —

And what can the Commission’s determination will be examined de novo and that — in the shipper’s action on that?

Richard A. Posner:

No.

I think clearly not because the question on whether a carrier has violated the Shipping Act, the Interstate Commerce Act is the kind of question on which this Court has said that the basic determination is for the expert tribunal.

It must evaluate and appraise the evidence.

Therefore, it would not be opened to shipper or carrier in the enforcement action to introduce new evidence and ask the District Court to review a de novo, the question of a violation or it can ask the District Court to prescribe the just and reasonable rate.

So that in that aspect of the reparations action at least the prima facie — only the prima facie — the prima facie provisions of Section 16 give way to a substantial evidence test, I suppose, and the Commission’s determination on that is not reviewable if there is substantial evidence to support it, is that it?

Richard A. Posner:

That’s correct.

I might point —

You have to reach that through a primary jurisdiction doctrine and put that kind of a gloss on the face in Section 16.

Richard A. Posner:

Yes.

And I might point out that the language of prima facie evidence in Section 16 (2) which was then carried over to Section 30 goes back to 1887 which precedes this Court’s primary jurisdiction decisions and here as in the case of actions by shippers against carriers under Sections 8 and 9 of the Interstate Commerce Act.

It’s been necessary to put this gloss on the — on the language.

That’s been done in the lower courts has it?

Richard A. Posner:

It’s been assumed in all the courts which have passed on this issue that the same standard applies to judicial handling of the Commission’s finding of violation in an enforcement action as in a review action.

If the Commission’s finding is supported by substantial evidence, the Court cannot upset it nor will it receive evidence to impeach that finding.

You don’t see if the — if the government’s point of view is taken as to — which you summarized here.

You don’t see any danger there being inconsistent decisions on Commission questions that are of general public interest when I could be an affirmative by having these multiple actions brought to different courts.

Richard A. Posner:

No, for two reasons.

First, because the Commission’s primary jurisdiction is in any event protected; and second, because insofar as a finding of violation has continuing significance, it’s not just a dead practice but gives rise to a rate setting order or other order of prospective effect.

It will be the subject of review and actions in which the Commission and the government are a party and can protect their interest.

Abe Fortas:

But isn’t the manner of what you’re saying that there is no form in which the Commission’s findings and order can be judicially reviewed in a reparations case.

Let’s assume which I guess is possible that you have a case involving only the issue of reparations and not the question of prescription or injunctive relief.

Now, as I understand your argument, despite the use of the words prima facie in Section 30, you’re saying that the Commission’s findings have to be accepted as inclusive if I understand what you’re saying and where do you get an opportunity for a judicial review on the basis of your approach to this?

Richard A. Posner:

Our position is that — where the shipper sues upon a reparations order, the District Court in which he sues and the Court of Appeals reviewing the District Court’s decision has power to review the findings, all the findings, which underlie that order in the same manner as if the carrier were attacking it in a conventional appeal proceeding.

Now, one of the basic findings in every reparations order would be that the carrier had violated the Shipping Act and this finding is subject to judicial review of the same scope and extent as in any action.

What I suggest —

(Inaudible)

Richard A. Posner:

Yes, because judicial review of administrative order is limited to ascertain whether there is substantial evidence and a legal basis for the Commission’s findings.

Abe Fortas:

Now, what you would — the math of what you’re saying then is that the phrase, prima facie evidence in Section 30, I think you’ve stated that very candidly that you have to read those words with a very heavy gloss.

Is there any other situation that you know of or therefore calling in your brief in which those words have been used by the Congress with the effect that you now attribute to them?

Richard A. Posner:

I can’t think of an example involving the words prima facie.

But I — but it has been a reoccurring theme in the review of Interstate Commerce Commission orders that glosses must be supplied on Congressional language dating from the 19th century, preceding the doctrines dealing with review of administrative orders.

For example, in Section 8 of the Interstate Commerce Act, a shipper is empowered to sue a carrier directly without going to the Interstate Commerce Commission as in the case of a Section 16 (2) action to collect damages for a violation of the Interstate Commerce Act and Congress has held — excuse me, this Court has held that a low — the Section in terms purports to create a damages remedy which is completely independent of the Interstate Commerce Commission.

That action cannot be maintained without reference to the Interstate Commerce Commission for a decision on those issues which are within the Commission’s primary jurisdiction or narrow the basic issue of violation.

(Inaudible)

Richard A. Posner:

Yes.

(Inaudible)

Richard A. Posner:

Yes, I think that’s certainly true.

(Inaudible)

Richard A. Posner:

That is true and the only — the reason that that is not a matter of concern to the government is simply that variant results having to do with the damages awarded —

(Inaudible)

Richard A. Posner:

That’s true also.

There can be differences in the fine and violation.

Richard A. Posner:

But as I say, if the — if the violation complained of is a matter of continuing importance, if the practice found unlawful is continuing, the Commission’s Section 22 proceeding will give rise to an order prescribing a new rate.

Now, this order having general application is reviewable at the suit of the carrier.

If the carrier prevails in this suit and the Commission’s rate order is set aside, all danger of uniformity vanishes and the only element of possible dis-uniformity would be of variant damages of recovery.

But so far as the obligations of shippers and the carrier are concerned, there will always be a mode of dealing with the Commission’s finding and affirming it or setting it aside across the Board.

(Inaudible)

Richard A. Posner:

No, if a carrier challenges in order prescribing a rate as an invalid order.

And the reviewing court sets that order aside no shipper can be required to pay the rate prescribed by the Commerce Commission.

This goes to one of the shipper as they brought the State Court as well as Federal Courts.

Richard A. Posner:

True.

(Inaudible)

Richard A. Posner:

No.

The enforcement court has no power to set an order aside.

That’s clear in the language of Section 16 (2) and Section (30).

All the enforcement court can do is decline to enter a damages judgment.

It can say that the order is invalid as between the parties.

This has no bearing on what the shipper is required to pay the carrier.

That depends on the prescriptive or injunctive order and that kind of order is reviewable in proceedings to set the order aside.

Hugo L. Black:

Suppose an order of the Commission has two problems like this.

The whole number one if the order is — that the rate is unlawful and gives all its reasons and it’s decided on which should do on the primary jurisdiction basis.

It says, furthermore, we find that damages and award reparations from $100, that they’d both be tried at the same time in the Court?

Richard A. Posner:

Well, in —

Hugo L. Black:

Or suppose that the shipper started to sue on them before that, although, the carrier had attacked the whole law then because of the invalidity of its — determining the rate was unlawful.

Richard A. Posner:

Well, I think there could be a problem there.

Ordinarily, what the Commission would be to issue two orders, one, prescribing rate and one awarding reparations.

Now, if the shipper goes into court to enforce the reparations order and the carrier at the same time challenges the underlying Commission finding of illegality then presumably, the enforcement action would be stayed while the basic validity of the Commission’s action was determined.

But in this action by the carrier to set aside the order, the Commission and the Attorney General are properly the parties respondent who are responsible for upholding the validity of the order and there’s no problem of the shipper being compelled to intervene in this distant form.

Hugo L. Black:

Is it a correct understanding of your argument that to take a case where those two issues had been in it and it’s been held that the order is lawful you were saying.

Then it comes up and say, what you mean by order de novo — trial de novo as to damages.

Is it correct to say that what you are arguing in effect here is that all they can raise there is the question of the amount of damages?

Richard A. Posner:

If the validity of the Commission’s underlying findings had been determined in a review proceeding, the carrier would certainly be bound by that determination and only the issue of damages would be left —

Hugo L. Black:

Computation —

Richard A. Posner:

Could —

Hugo L. Black:

— and how long that thing had been going on and how many transactions were involved in it and so forth, they get a completely new trial on that issue, computation and so forth, is that it?

Richard A. Posner:

They get a completely new trial except insofar as damages questions themselves maybe for the primary jurisdiction of the Commission.

Hugo L. Black:

Yeah, that has either — assuming now that’s already been settled.

Richard A. Posner:

Yes.

Hugo L. Black:

With the rates, you know what it is, would be?

How may shipments did he make?

Where does he go from?

How much did he pay?

Are you saying that the findings of the Commission as to the amount of damages would or not be — would be or not be final and binding of the debt that the factual questions involved under that issue could be re-determined?

Richard A. Posner:

Well, I think —

Hugo L. Black:

Implication of damage.

Richard A. Posner:

I think in principle, there are damages questions which can be re-determined de novo without invading that area which is reserved to the Commission for the application of its expert judgment.

For example, if the Commission made a simple arithmetical error in computation.

But if in determining damages, the Commission based judgment on the kind of discretionary factors which are confined to agency judgment then I don’t think you could have de novo re-determination of these Commission findings but only review.

Earl Warren:

Mr. Boyer.

J. Alton Boyer:

Mr. Chief Justice and May it please the Court.

I would like to discuss a neglected area of the case first, the merits and then the jurisdictional issue, if the Court will permit.

I would also like to inform the Court that there were number of other issues before the Court of Appeals which the Court of Appeals found it unnecessary to decide.

These issues involved matters of the propriety of the procedure followed by the Maritime Commission on remand that involved illegal question as to the proper measure of damages and various questions as to the applicability of the proper measure of damages and the actual calculation of damages.

We have not attempted to brief these issues for the Court.

We have, however, referred to two of them in our brief to show that there were issues of substance if the Court could reach them which we trust it will not — we request the Court to remand the case to the Court of Appeals for consideration of all of the issues.

The respondent Flota is a steamship company owned by the governments of Ecuador and Columbia.

It has a limited amount of refrigerated or rifer space on board its vessels which should operate and service between South America and the North Atlantic Coast of the United States.

Between 1950 and 1955, it had very few — it was able to obtain very few shippers of bananas to utilize the space.

Never more than one at the time and for a period of about 16 months prior to mid-1955, it was unable to obtain a single shipper to use — the shipper of bananas to use its refrigerated space, the rifer space was unused.

In mid-1955, it entered into a contract with a new banana shipper who was willing to risk its capital to undertake the importation of bananas into the United States.

The contract was entered into — only after public advertisements by the carrier to which it received no response.

The contract was for a period of two years and it provided that the shipper might have an option for an additional three-year period.

J. Alton Boyer:

The shipper exercised its option, qualified for its option in March 1957.

The contract was formally extended to reflect the exercise of the option on May 22, 1957.

As of that time, there had been some additional — some interest expressed in the use of the space by shippers including the petitioner Consolo and one other.

But each of these shippers had bid for its space only for the exclusive use of the rifer space on Flota’s vessels.

On August 20, 1957, the Maritime Board handed down an order in another case to which Flota was not a party, directing that carrier respondent in that case to cancel contracts which it had with banana shippers.

William J. Brennan, Jr.:

Well, that was — that was the Grace Line case.

J. Alton Boyer:

That was the Grace Line case.

The Board’s order in the Grace Line case — excuse me.

The Board’s report in the Grace Line case was handed down in late April 1957.

It was subjected to petitions for reconsideration.

Considerable dispute between the parties to that proceeding as to how the report was to be effectuated, the terms of the order and these matters were not resolved until August 20, 1957 when the Board’s order — directing Grace Line to cancel its contracts was issued.

Consolo, the petitioner, was one of the shippers on the Grace Line vessels.

On August 23, Consolo wrote a letter to Flota in which he for the first time requested that he’d be permitted to share space on Flota’s vessels with other shippers.

The letter was addressed to Flota in Bogota, Colombia.

It referred to the recent decision of the Maritime Board in the Grace Line case.

I may say that that decision which clearly contrary to existing practice up to that time, it was based upon a novel and untested theory of law which was in fact later rejected by the Court of Appeals for the Second Circuit.

And the order itself was clearly an experiment by the Maritime Board with the regulation of the carriage of bananas, a specialty item in the commerce of the United States.

Judge Moore of the Court of Appeals for the Second Circuit in a still later case in which he dissented referred to the Maritime Board order of May 1957, the one that had been reversed as a guinea pig experiment on the shipping industry and an autocratic use of powers by the Board.

The August 23, 1957 letter from Consolo did not state when he wanted to ship bananas he did not state how much space he wanted, he did not offer to post the guarantees which the Board had already said, a carrier was entitle to before it was required to give space to a shipper, and it committed Consolo to nothing whatsoever.

It cost him only cost of paper and postage.

He threatened to sue Flota if we did not give him space.

Flota also received similar demands from other shippers and other shipper’s lawyers, likewise, threatening to sue.

At the same time, its existing contract shipper, Panama Ecuador said that if you do give space to anyone else, we’ll sue.

Flota was faced with a lawsuit whichever way it turned.

However, it had a clause in its contract with Panama Ecuador which said that if any portion of the contract were declared invalid or unenforceable, Flota might terminate it on seven or ten days notice.

Flota’s officials came from New York, his manager and director from Bogota and met with the staff of the Maritime Board on August — excuse me.

On October 1st, 1957, presented the problem to the staff and said in effect, we will do whatever you tell us but just tell us what to do.

The Board staff said that it was unable to advice Flota as to its proper course of action.

Flota then filed a petition for declaratory order with the Maritime Board itself on October 30.

The Board sat on the order for six months.

J. Alton Boyer:

It did not assign a docket number to the petition, excuse me, until May 1, 1958.

When it did decide to entertain the petition, it consolidated it with complaints or reparations and against — complaints against Flota’s practice and for reparations filed by Consolo and also by another banana shipper.

As a result of the initial six months delay and the consolidation with the reparations claim, the case did not go to hearing until November 1958, more than a year after the petition for declaratory order had been filed and no decision was rendered as to whether or not the contract was valid and should be canceled until early July 1959.

All of these matters are fairly explored in the opinion of the Court of Appeals.

The Board directed Flota in July 1959 to cancel its existing contract.

As Flota had told the Board, it would do whatever it said. Flota in fact canceled its existing contract and it complied with the Board’s order which was served in July 2, 1959.

The Board then held supplemental hearings on the issue of reparations and in 1961, directed Flota to pay $143,000 to Mr. Consolo’s reparations.

Both the shipper and the carrier then appealed to the Court of Appeals under the Hobbs Act.

The Court of Appeals found that the order directing Flota to open its space was valid.

Flota had challenged the order only to the extent that it would serve as a basis — might serve as a basis for reparations.

It remanded the case to the Maritime Board having found — the court having found that there was substantial evidence in support of Flota’s contention that under all of the circumstances, it would be inequitable to award reparations to Consolo.

The Court of Appeals said that the mere fact that there had been a finding in July 1959, directing Flota to open its space and finding that its contract was in violation of the law.

It did not mean that the Board was not permitted to examine the circumstances of the violation in the context of Flota — of Consolo’s reparation claim in order to determine whether or not it would be fair to assess reparations.

The central finding of the Commission on remand, the Commission having meanwhile succeeded to the Maritime Board was that Flota was not acting in good faith when it undertook the contract with Panama Ecuador in May 1957.

The Government’s brief to the Court of Appeals admitted that the Commission’s award stood or fell on the good faith finding.

That finding, challenging Flota’s good faith was the first such challenge in six years, six decisions and as many years of litigation.

There was not a suggestion of bad faith.

And any of the trial examiners, two decisions on the subject and any of the Maritime Board’s two decisions on the subject or for that matter in any of the briefs of the public counsel who had participated in the first phase of the proceeding.

The procedure followed by the Commission on remand as we submit significant.

It did not refer the case to its hearing examiner although the same hearing examiner was then a member of the Commission staff and was available.

The Commission’s minutes show that five days after argument to the Commission had called in its general counsel and submitted the case to him with the direction to prepare a proposed report and order.

The minutes state that the general counsel was given instructions.

They do not state what instructions were given.

The Commission’s next meeting on the subject was, 11 months later, when the general counsel submitted a proposed report and order and the Commission adopted it.

Perhaps, this practice is ordinarily unobjectable — unobjectionable for a Commission and agency requires resort to legal counsel.

But here, the general counsel and his deputy had participated before the Court of Appeals in the first proceeding as advocacy against Flota taking the position that Flota had violated the law and should be required to pay reparations.

The same gentlemen then were given an opportunity to write the Commission’s opinion on remand.

And the Commission’s opinion on remand was in many respects a restatement of arguments which the Commission’s advocates had unsuccessfully made to the Court of Appeals for the first time.

(Inaudible)

J. Alton Boyer:

The participation of the general counsel was made known only after the Commission’s decision was handed down, if I correctly understand Your Honor’s question.

(Inaudible)

J. Alton Boyer:

No, sir.

No — no, Your Honor, that was not the case.

The minutes show my knowledge of what happened is dependent upon the Commission’s official minutes which are a part of the record.

We were required to obtain an order from the Court of Appeals to make them a part of the record but over the agency’s opposition, the Court issued the order.

The minutes show that the Commission requested the general counsel to prepare a proposed report and order in accordance with instructions given by the Commission that’s the minute of September 1962, I believe — early October ‘62.

A minute — the next minute on the subject in September 1963 shows that the general counsel submitted a proposed report and order which had been prepared in accordance to the instructions given by the Commission and the Commission adopted the report.

It’s perfectly obvious that the general counsel didn’t take 11-months merely to mechanically transcribe detailed instructions which the Commission might have given him.

The Commission admitted before the Court of Appeals that the general counsel had in fact participated in the Commission’s decision making function.

The Court of Appeals referred to the fact that the general counsel had formulated the Commission’s opinion but it found that it was unnecessary for it to reach the legal issues which this fact raises because it said, the Commission’s findings were in any event unsupported — were contrary to the substantial weight of the evidence and that the Commission had abused its discretion.

We contended to the Court of Appeals that the procedure followed violated constitutional guarantees of fair hearing, the Administrative Procedure Act in the Commission’s own rule.

Not only are the provisions or the requirements of law with respect to the separation of functions involved but also the requirements of the Administrative Procedure Act with respect to the formulation of the proposed report an order by hearing examiners service to parties opportunity to make exceptions and so on.

The petitioner contends that the court below did not hold that there was no substantial evidence to support the Commission’s decision.

This is at legal contention not dependent upon the particular facts of the controversy but a contention that the court below failed to apply the substantial evidence rule.

The Court’s actual holding was that the Commission’s determination and I quote omitting a few words that I don’t think it’s important, “ignored the substantial weight of the evidence before it”, and later in the Court’s opinion that the Commission had abused its discretion.

In amplifying these findings, the lower court stated that there was strong evidence of Flota’s good faith, that Flota’s conduct was completely consistent with its assertive that they — that the law was unsettled and Flota’s legal obligation was not clear during the period in question that it was clear that Flota had acted on the basis of reasonable doubts with good grounds, with substantial justifications that Flota had sought and administrative determination of its duties as promptly as possible and then noted, in addition, that Consolo had suffered no out of pocket laws as a result of the exclusion space during — exclusion of him from Flota’s space during a reparations period.

Hugo L. Black:

On what page did you read this?

J. Alton Boyer:

It aren’t the — the Court of Appeals’ opinion.

I — I was quoting variously from 690, 691, 692, 693, and 697 —

Hugo L. Black:

(Inaudible)

J. Alton Boyer:

— which is the Court of Appeals’ opinion —

Hugo L. Black:

Yes.

J. Alton Boyer:

— under review.

It’s clear in context that the Court of Appeals was fully aware of the limitations of a reviewing court, that it was fully aware of this court’s decision in the universal camera case which it cited of the limitations of review under the Administrative Procedure Act.

And in context, we submit it’s clear that it did apply the substantial evidence rule and the Government’s brief in this case admits that the lower court’s judgment was a decision that the Commission’s decision itself was not supported by substantial evidence.

So to the extent that the petitioners here trying to create a legal issue, what he terms as a noble standard of review, it, I submit, is to make weight without merit.

The Government’s contention on briefs is different.

The Government says, not that the Court of Appeals fail to apply the substantial evidence rule but that it applied it, but applied it wrongly.

This requires a review of the evidence to meet.

In fact, the issue as to the insubstantiality of the evidence was not raised in the petition for writ of certiorari but we do not believe this properly before the Court.

J. Alton Boyer:

Consolo’s opening brief explicitly states that he does not expect the Court to review the evidence.

Even if the issue had been raised, the Court has many times said that where a lower court has made a decision on an issue of insubstantiality, this Court will do no more and to decide whether there was a fair assessment by the lower court.

Here, the case was before the Court of Appeals twice, before the same panel of judges, each decision was unanimous.

There was on the same record, the same issues were involved the first time as the second time the case was thoroughly briefed on the merits some 16 times by all parties, and the Court’s decision in the second proceeding analyzed the problem and issues in detail and as I believe, far more better presentation of Flota’s case than I can make in the time and context of this proceeding.

We believe that the Court, if it decides to review the substantiality of evidence will conclude — must conclude that the Court of Appeals did make a fair assessment of the record.

If it goes beyond that, beyond the fair assessment test, then I wish to point out just a couple of omissions in the Commission’s decision, which I think really, completely indicts the integrity of the decision.

I don’t mean that’s moral integrity but its integrity as a meaning decision on the basis of the record before it.

The Commission charged that in May 1957, Flota deliberately violated the law in the face of what it regarded as two authoritative Board announcements, the decisions in the Grace Line cases.

First, the Court — the Commission assumed that Flota had some obligation to Consolo in May 1957 but the hearing examiner, the Maritime Board and the Court of Appeals and indeed the Commission itself in its brief the first time before the Court of Appeals, all found that Flota had no obligation or whatever to Consolo at that particular time and not until August when we receive this $100,000 letter.

This fact, this holding the Commission in his opinion on remand completely ignored and this holding is not now an issue before this Court.

Potter Stewart:

What was the nature of the obligation that the Commission and the Board found that Flota had prior to the letter?

Is this the obligation that any common carrier has to all shippers to?

J. Alton Boyer:

Mr. Justice Stewart, there is no explicit finding that Flota had any obligation to any shipper prior to the time that it first received a request from a shipper for an allocation of the rifer space as opposed to a request for an exclusive contract.

And no such request had been received in May 1957 and none was received until — there was a request in early August, the Consolo request, the one that’s pertinent here was on August 23.

There is some question even as to when Flota’s status as a common carrier of bananas, as a common carrier of that particular commodity arose.

The question is not important in the context of this particular issue but the record isn’t precise.

The examiner found that Flota’s status as a common carrier of bananas did not arise until August.

The Commission I believe stated in a parenthesis, tucked away in a paragraph that it had arose when it first started to carry bananas but, in any event, no duty rested upon it to a shipper until August.

Abe Fortas:

Mr. Boyer, If it won’t interrupt you.

Do you agree that the Court of Appeals had jurisdiction of the shipper’s appeal?

J. Alton Boyer:

Yes, Mr. Justice Fortas, I do agree that the Court of Appeals had jurisdiction of the shipper’s appeal and I will —

Abe Fortas:

That was for the purpose of getting a review of the known damages.

J. Alton Boyer:

That is correct.

Abe Fortas:

Now, is it your view that the amount of damages could also be reviewed and the District Court action had the shipper chosen to proceed that way by instituting an action in the District Court to enforce the award or so-called award in the Commission’s order.

J. Alton Boyer:

The question as to review of the amount of damages has two aspects, review upon the instance of the shipper and review upon the instance of the carrier.

It is our position —

Abe Fortas:

You’re talking only about the shipper at the moment.

J. Alton Boyer:

Do not worry about the shipper.

Abe Fortas:

I said, I’m talking only about the shipper at the moment.

J. Alton Boyer:

It is our position that the shipper can obtain review of the amount of damages only in a review proceeding, not in enforcement proceeding.

J. Alton Boyer:

And under the Shipping Act and the Hobbs Act, that review proceeding must be in the Court of Appeals.

Under the Interstate Commerce Act, it is also in a District Court but it is a different type of proceeding.

Abe Fortas:

So, it’s your view that not only did the shipper’s appeal like here but that it was the only remedy that the shipper had with respect to the quantum of damages.

J. Alton Boyer:

That is correct and in addition, excuse me sir.

Abe Fortas:

I beg your pardon, go ahead.

J. Alton Boyer:

In addition, the first time that the shipper, petitioner Consolo has cast any doubt whatever on that proposition is before this Court.

Abe Fortas:

Now, let me ask you this question.

With respect to respondent’s standing, is it your position that respondent had standing to appeal the order to the Court of Appeals even if the shipper had not filed its appeal?

J. Alton Boyer:

That is our position under the Hobbs Act.

The carrier must file a petition for review within 60 days of the Commission’s order and the Court of Appeals had exclusive review.

It was just as certain as night follows day that if we had not appealed, not petitioned for review under the Hobbs Act to the Court of Appeals within that 60-day period, we would then have been met by a complaint for enforcement in a Section 30 proceeding and the contention that whatever review we might have had in such a proceeding prior to 1950 when the Hobbs Act was passed.

Now, failure to have appealed under the Hobbs Act would have precluded.

Abe Fortas:

And in that respect, your position does differ from the Government’s position here, am I correct in that understanding?

J. Alton Boyer:

The Government’s position here as opposed to its position in the Court of Appeals is that the Court of Appeals does not have jurisdiction to entertain only the carrier’s petition for review of a reparations order.

But that once the jurisdiction has been vested by the shipper’s petition then the Court has jurisdiction to determine the validity of the order in its entirety.

Now, this — this position in which we join as an alternative ground for the lower court’s jurisdiction is supported not only by general principles of ancillary jurisdiction but also by the specific language of Section 9 (a) of the Hobbs Act which says that once the record has been filed with the Court of Appeals and the Court is vested with jurisdiction, it then has jurisdiction to the — exclusive jurisdiction to determine the validity of the order.

Now, if the validity of the order is reviewable at the instance of one party, it ought to be reviewable at the instance of another party and that’s the basic —

Byron R. White:

Mr. Boyer, what’s left for the shipper’s action in the District Court under your view?

J. Alton Boyer:

If the proceed — if there is a reparations order which is sustained upon review, I think it’s safe to assume that that will result in payment in a substantial number of cases once the carrier has received its day in a reviewing court and has raised such legal issues as it might have and loses then I think that’s the end of the proceeding in many cases.

If the carrier is recalcitrant and still does not refuse to pay then the shipper must bring an enforcement action in a District Court.

Byron R. White:

Well, what are the issues then in the District Court?

J. Alton Boyer:

The area is not entirely clear but I believe that the Government has — the Government’s statement of its position is fairly close to mine.

To some extent, the primary jurisdiction doctrine has imposed a gloss, rightly or wrongly, whether or not it was within the intention of Congress.

Byron R. White:

But what I would have supposed under your position, all of the glosses used would be determined in the review proceeding.

I gather that hypothetically that your position is that the shipper would have in the first instance to initiate a review proceeding is that right?

J. Alton Boyer:

If the shipper was seeking additional reparations.

Byron R. White:

The shipper has a reparation to it and it hasn’t been — the reparations have not been paid, now if I understood what you have just said to Justice Fortas, it is that in that instance, the shipper is not paid.

He cannot go into a District Court proceeding but has to initiate a review proceeding, did I correctly understand?

J. Alton Boyer:

I don’t think I’ve made myself clear sir.

Byron R. White:

Oh, I see.

Byron R. White:

Alright.

J. Alton Boyer:

There are two situations. One in which the shipper has received from the agency, all of the reparations which he has asked.

In that case, there is no occasion for the shipper to seek review of the agency order.

Byron R. White:

I see.

J. Alton Boyer:

If the carrier wishes review, he must under the Shipping Act proceed under the Hobbs Act.

If —

Byron R. White:

But the shipper in the instance — in that instance could go into the District Court, could he?

J. Alton Boyer:

Yes, Your Honor.

Byron R. White:

I see.

It’s where he hasn’t had from the Commission all he thinks he should have and he wants more that you’re suggesting has first to go in the reviews.

J. Alton Boyer:

That is correct.

The answers of Government counsel in this case as to the practice with respect to reparations orders under the Shipping Act.

I think is not entirely correct so far as the Maritime Commission is concerned.

There have been between 1916 and 1961 when the account was made by the petitioner here, only five reparation orders under the Shipping Act.

The question is one of very little significance in the overall picture.

There really is no practice as to whether there is one order which will be — one order with respect to a violation and a separate order with respect to reparations.

The matter is a matter of discretion for the examiner as to whether you will hear everything in one bowl or separate the proceeding. You might just as likely have a single order with two paragraphs, one violation, one reparation as two orders.

Here, in fact, we have two orders.

But in fact, the issues before the Court of Appeals even as to violation were related only to the reparations.

We specifically advise the Court of Appeals that we had no interest, we did not intend to oppose or challenge the Commission’s orders so far as it had a prospective operation.

We were seeking to challenge the question of — the finding of violation only to the extent as it was involved with reparations.

Abe Fortas:

Mr. Boyer, may I ask you just one more question.

Suppose a shipper in your view, a petition’s Maritime Commission for reparations and the Maritime Commission denies any reparations awards.

In your view does the shipper then have a remedy by way of appeal to the Court of Appeals?

J. Alton Boyer:

I think there’s no question about that Your Honor that he — that he has a remedy, I think there’s no question under this Court’s decision —

Abe Fortas:

Yes.

J. Alton Boyer:

— in United States versus ICC.

Abe Fortas:

But does he have — does he have — can he appeal to the Court of Appeals?

J. Alton Boyer:

And it is our position that his remedy is under the Hobbs Act to the Court of Appeals.

Abe Fortas:

Thank you.

J. Alton Boyer:

And I may say that this is the first case in any reparations problem under the Hobbs Act which there had been since 1950, perhaps four or five on both sides denial and grant.

This is the first case in which the Court of Appeals jurisdiction has been challenged since the Piazza case, where the Court of Appeals was held to have jurisdiction of a shipper’s suit to reveal a denial.

The Government has always been on the Hobbs Act side of the question until it reached this Court in this particular case after the Court had granted certiorari in the ICC case.

I will leave the remaining issues on the merits to the briefs.

I would like, however, to answer Mr. Chief Justice Warren’s question to Mr. McDonnell yesterday as to whether Senator Bacon was the Floor Manager of the Hepburn Bill.

The answer is that he was not the Floor Manager.

However, he was a proponent.

There were a number of amendments under consideration at the time the statement Mr. McDonnell quoted was made and proponents and opponents and various mixtures in combinations involving several different amendments, all agreed with Senator Bacon’s statement which he repeatedly said. He said, is there any word or combination of words in the English language which could possibly be broader than these, any order or requirement and in one instance, Senator — on the other side of the question which he was debating would say, I understand or know and agree.

So, it’s clear in the context of that particular section of the debates that everyone understood that this was the broadest possible language.

The question was not, what orders would be reviewable but what the scope of review would be?

This was 1906, the question that was really a primary jurisdiction kind of debate in the halls of the Senate.

I should also like to make the position of parties before the Court of Appeals clear to this Court.

The — the petitioner here, first, raised the jurisdictional question in the first proceeding before the Court of Appeals by a preliminary motion.

It was an alternative motion in which he said, either dismissed for lack of jurisdiction or require the carrier to post a bond.

The Court held the motion in advance and decided that — decided the issue at the time it rendered this decision of the merits.

In his briefs on the merits after he — the motion had been held in advance, Consolo argued unequivocally that because the case was before the Court.

The Court should take in jurisdiction in dispose the entire controversy that was the first proceeding before the Court of Appeals.

When the case returned to the Court of Appeals the second time neither Consolo or the Government nor anybody else said a word about the jurisdictional issue.

Everybody assumed jurisdiction, exercised it and only after Consolo and the Government had lost on the merits did they take the position in this case — in this Court but the Court of Appeals do not have jurisdiction.

And the Government says even now that the Court of Appeals had jurisdiction on the narrow ancillary ground.

The Hobbs Act is a subject which has been referred to but not really discussed here.

The very purpose of Congress in passing the Hobbs Act in 1950 was to solve the kind of problems that we’ve all been wrestling here in the context of the Interstate Commerce Act situation.

A clear and overriding intention of the Congress was to provide what it considered to be an improved and uniform procedure for review of all orders of the Maritime Commission.

The Bill as it originally was introduced extended both to the ICC and also to the Maritime Commission and it did not extend to all of the orders of either of these agencies.

The ICC came in and said, our volume of litigation is just too great, we fear that if we are — if jurisdiction to review all ICC orders is placed in the Court of Appeals, it will bog down the judiciary system.

So please exempt us from the Bill and that the Congress did.

The Maritime Commission representatives its Chairman and its then Solicitor came before the congressional committees and said, “We like this Bill except it isn’t broad enough.

Please make it sufficiently broad to cover all reviewable orders of the Maritime Commission.”

And the Commission Solicitor specifically said, as you have written the bill now, it does not include orders under Section 22 under which we issue a great volume of orders.

Section 22 is the section under which reparation orders are issued.

J. Alton Boyer:

And the Congress amended the bill in accordance with the request of the Maritime Commission to extend to all reviewable orders of the Commission.

Now, no specific mention was made of reparation orders except as they fell within broad category of orders under Section 22.

But there was before the Congress a list of reviewable orders of the ICC at the time that the ICC was proposed to be subject to the Bill and one of these lists had been prepared by the administrative office of the United States courts and it’s set forth in the Senate judiciary report which is cited in our brief.

And that list did specifically refer to reparation orders of the ICC.

The Congress was fully aware of the identity or the parallel situation between the Shipping Act and the Maritime Commission.

In addition, this Court handed down its decision in United States versus ICC in mid-1949.

The Hobbs Act was passed in December of 1950.

The petitioner here argues to the court that the Congress intended to vest under the Hobbs Act jurisdiction to review only actions which had formally been the subject to three-judge court actions but that are not the fact.

The Senate judiciary committee after United States versus ICC was handed down, said that the purpose of the bill is to provide a uniform procedure with respect to all reviewable orders and in discussing this, it said in many cases, not in all cases.

In many cases, these orders are three-judge court orders.

So from the standpoint of the overall objective of the Hobbs Act, from the standpoint of the language of the Hobbs Act, reparation orders should be in the Court of Appeals.

The language of the Act is analyzed thoroughly in our brief.

We submit that even if reparation orders of the ICC are not reviewable at the instance of the carrier, I believe they are.

But even if they are not, they were made reviewable under the Hobbs Act and that any contrary decision would defeat it clear, overriding purpose of Congress in 1950 to provide modern system of review for reparation orders.

Thank you.