Volkswagenwerk Aktiengesellschaft v. Federal Maritime Commission

PETITIONER: Volkswagenwerk Aktiengesellschaft
RESPONDENT: Federal Maritime Commission
LOCATION: Street Corner

DECIDED BY: Warren Court (1967-1969)
LOWER COURT: United States Court of Appeals for the District of Columbia Circuit

CITATION: 390 US 261 (1968)
ARGUED: Nov 13, 1967
DECIDED: Mar 06, 1968

Facts of the case


Media for Volkswagenwerk Aktiengesellschaft v. Federal Maritime Commission

Audio Transcription for Oral Argument - November 13, 1967 in Volkswagenwerk Aktiengesellschaft v. Federal Maritime Commission

Earl Warren:

Volkswagen, Petitioner, versus Federal Maritime Commission et al.

Walter Herzfeld:

Mr. Chief Justice.

Earl Warren:

Mr. Herzfeld.

Walter Herzfeld:

Mr. Chief Justice and may it please the Court.

This is a writ of certiorari to the Court of Appeals for the District of Columbia to review the affirmance by that court of an order of the Federal Maritime dismi -- Commission which dismissed the complaint of the present petitioner, Volkswagenwerk which had been bought Volkswagen in its capacity as a large shipper for the mobiles.

The case raises issues in the three provisions of the Shipping Act of 1916 as amended Sections 15, 16 and 17.

The United States as a statutory party to this review proceeding has filed a brief in support of the position of the petitioner and I have agreed with counsel for the Solicitor General here on a division of the argument in such a way that it will be my task to briefly outline the facts and to present the issues arising in the Sections 16 and 17 of the Shipping Act by counsel for the Solicitor will then argue the case with respect to Section 15.

My statement as to the facts will rely throughout on findings of the Commission except that in two occasions which I will identify them, I come to them and rely on undisputed evidence on which no finding was made.

Pacific Maritime Association, the intervener in the proceedings below and here is an association of shipping lines, common carriers by water, stevedores and terminal operators, operating at the United States Pacific Coast.

The purpose of the Association is to negotiate and administer collective bargaining agreements with the various unions involved in the shipping industry.

In 1960 and 1961, a number of agreements were entered into -- between Pacific Maritime Associations, the intervener and International Longshoremen's and Warehousemen's Union, the bargaining representatives of all the onshore laborers, the stevedoring and terminal labor on the Pacific Coast.

The agreements so far as here relevant provided in substance that the union would waive its prior objections to restrict the -- both practices and federal bidding and that the union would consent to the application by the employers of automation and labor-saving devices in return for the creation of the so-called mechanization and modernization fund, both of which certain benefits there to be paid to members of the union.

The mechanization fund under the agreement was to reach over a period of five and a half year an amount of altogether $29 million, $5 million a year was to be raised for the period from -- the beginning of 1961 to the middle of 1966.

After these agreements were entered into the employer association, PMA, considered the method by which the contribution to the fund is $5 million contribution should be raised and as a result of PMA's internal procedures, the recommendation by special committee appointed to this purpose, recommendation by the Board, both of the membership and the final decision of the Board of PMA as a result of all of this, a method was devised which in effect provided that every stevedoring or terminal operator member of PMA should pay a certain amount.

At the beginning that was $27 and a half cent to PMA for each ton of cargo discharged or loaded at the Pacific Coast.

It is this tonnage tax imposed by PMA which is under attack in this proceeding so far as it applies to automobiles.

Before considering the impact of the tonnage tax on automobiles, it is necessary for me to briefly present the competitive relationship between the parties here.

Pacific Maritime Association is dominated by shipping lines and common carriers.

There is testimony in the record by the vice president and treasurer of PMA to the effect that as long he was with the Association for some 19 years, the liners had the majority on the Board.

There's an admission in one of the earlier briefs by counsel for PMA that members of PMA are not philanthropist and that they vote in membership meetings in their own self-interest.

Without going any deeper in the evidence, I think it is clear that if the liners had the majority of the Board and if that is the result of vote in the self-interest of the members, that the liners have a dominating position in PMA.

There are substantially more evidence on this which I like to skip in order to focus more quickly.

In any event, we have made throughout the contention that the liners control PMA and this contention is been completely ignored both by the trial examiner and by the Commission.

It finally was vindicated in a Footnote in the opinion of the Court of Appeals where the Court summarizes the evidence which I just outlined and some more, and then very dryly edit.

The trial examiner made a statement to the effect that there was no substantial evidence to show liner domination of PMA.

I submit that undisputed evidence although no finding established this right of fact.

The disregard of this fact by the examiner and by the Commission that was in the -- first of four serious defects which in my opinion affects the administrative determination here and I will point out here the defect as I come to them.

While PMA is liner dominated, Volkswagen for its very large shipments to the Pacific Coast uses primarily chartered vessels.

Obviously, the chartering by a shipper or vessels is a form of transportation which is entirely competitive with the business of common carriers and liners.

Volkswagen -- and this was found is the largest shipper of dry cargo to the Pacific Coast on chartered vessels and obviously, Volkswagen is a party which the liner interest in control of PMS do not precisely like because all business which goes to Volkswagen is business which the liners are using.