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UNITED STATES v. ABC CONTAINERLINE N.V.

September 28, 1983

UNITED STATES of America and Federal Maritime Commission, Plaintiffs,
v.
ABC CONTAINERLINE N.V., et al., Defendants



The opinion of the court was delivered by: WERKER

MEMORANDUM DECISION

 WERKER, District Judge.

 This is a complaint brought by the United States and the Federal Maritime Commission ("FMC") asking for no substantive relief but for the issuance of a preliminary injunction enjoining the defendants, some 115 ocean common carriers, from implementing or enforcing the "50 mile rules" ("Rules") pending the outcome of the Commission's investigation into their validity. *fn1" Plaintiffs moved by order to show cause on September 9, 1983 for a preliminary injunction pursuant to Fed.R.Civ.P. 65. Oral argument and an evidentiary hearing were held on September 19, 1983. Defendants presented testimony at the hearing but plaintiffs rested on the affidavits provided in their moving papers. For the reasons that follow, the motion is denied. The following are also my findings of fact and conclusions of law as required by Fed.R.Civ.P. 52(a).

 FACTS

 In short, the "50 mile rule" is a provision which requires members of the International Longshoremen's Association ("ILA") to load and unload certain containers of cargo coming from or destined to areas within 50 miles from an ILA represented port. The Rule further requires the defendants to deny containers to persons performing cargo consolidation services within 50 miles of that port. The most recent version of the Rules is incorporated into the Master Contract between defendants and the ILA which is due to expire on September 30, 1983. *fn2"

 The Rule has a complex history. In 1978, the FMC addressed the 50 mile rule in two proceedings wholly separate from the instant action. The 1978 actions, FMC Docket Nos. 73-14, 74-40, resulted in a finding by the Commission that the Rule as it applied to three respondents violated the Shipping Act of 1916, 46 U.S.C. § 801, et seq., and the Intercoastal Shipping Act of 1933, 46 U.S.C. § 843 et seq. The decision was appealed to the United States Court of Appeals for the District of Columbia and on March 2, 1982, the Court affirmed the FMC's exercise of jurisdiction over the matter but remanded to allow the FMC to consider the effect of two recent Supreme Court cases, FMC v. Pacific Maritime Ass'n, 435 U.S. 40, 98 S. Ct. 927, 55 L. Ed. 2d 96 (1980), and NLRB v. International Longshoremen's Ass'n, 447 U.S. 490, 100 S. Ct. 2305, 65 L. Ed. 2d 289 (1980). Council of N. Atlantic Shipping Ass'n v. FMC ("CONASA"), 217 U.S. App. D.C. 318, 672 F.2d 171 (D.C.Cir.), cert. denied, 459 U.S. 830, 103 S. Ct. 69, 74 L. Ed. 2d 69 (1982).

 While the D.C. decision was pending, the Commission referred the instant action, FMC Docket No. 81-11, to an Administrative Law Judge for investigation and review for possible violations of the Shipping Act. FMC Docket No. 81-11 is virtually identical to the 1978 actions except that the number of respondents has increased from 3 to approximately 115.

 With the 81-11 action pending and on May 27, 1982, the FMC reaffirmed its findings in the 1978 actions but discontinued proceedings in favor of the larger 81-11 investigation. Respondents petitioned the Supreme Court for review of the case. CONASA, 217 U.S. App. D.C. 318, 672 F.2d 171 (D.C.Cir.), cert. denied, 459 U.S. 830, 103 S. Ct. 69, 74 L. Ed. 2d 69 (1982). While this petition was pending, the District of Columbia Circuit issued a Supplemental Opinion Following Remand. CONASA, 690 F.2d 1060 (D.C.Cir.1982). The Court vacated the FMC's order to discontinue the 1978 actions and ordered it to defer action on those cases until the FMC had resolved the 81-11 proceeding and until the Supreme Court had acted on the petition.

 Throughout the FMC's investigation of the Rules, there had been considerable parallel action before the National Labor Relations Board ("NLRB"). The NLRB enjoined the implementation of the Rules in January and February of 1981. The NLRB dissolved the injunction in late February when it found that the Rules were valid work preservation provisions. ILA (Dolphin Forwarding, Inc.), 266 NLRB No. 54 (Feb. 28, 1983). The NLRB decision is now pending in the Fourth Circuit. American Trucking Ass'n v. NLRB, Nos. 1185, 1214, 1424 and 1486 (filed Mar. 1, 1983).

 On April 18, 1983, the Rules were reimplemented by agreement between a number of multi-employer bargaining units and local ILAs to the extent permitted by the NLRB. On June 30, 1983 the ILA gave notice of its intent to reopen the collective bargaining agreements to consider problems that had arisen with the Rules. The parties reached a new agreement which was subsequently filed with the FMC.

 The FMC is presently investigating the lawfulness of the Rule in Docket No. 81-11. Hearings before the administrative law judge were concluded on August 4, 1983 and the post hearing briefs are due in December. A decision is expected in July or August, 1984.

 Plaintiffs argue that a preliminary injunction should issue to preserve the status quo pending resolution of the 81-11 proceeding now before the FMC. They argue that there is a significant likelihood of success in light of the 1978 proceedings finding the Rules unlawful and that the earlier actions have already established that irreparable injury will ensue to various cargo consolidators who have already lost substantial revenue or been forced out of business as a result of the implementation of the Rule. The Longshoremen are protected from harm by "container royalties" and guaranteed income protection incorporated into the collective bargaining agreements. Plaintiffs argue further that the Rule as it stands is detrimental to the public interest because it adds significantly to the cost of transportation. Finally, plaintiffs submit that an injunction will merely return the parties to their pre-April 1983 status.

 In support of their motion, plaintiffs present the affidavits of 24 shippers and consolidators ("affiants") as well as the affidavit of an FMC economist. Each of the affiants outline the effect the Rules have had on their various industries in terms of loss of business, loss of jobs, costs of relocation or of leasing containers, and diminution of efficiency. The economist provides data on the adverse impact an implementation of the Rules will have on the public in terms of increases in the cost of transportation as the result of decreases in efficiency in the shipping industry.

 The essence of defendants' argument is that if the court enjoins action on the Rule, the injunction will interrupt collective bargaining now in progress. This, in turn, will stall the signing of an agreement and will result in strikes across the country on October 1. Moreover, defendants' argue that plaintiffs have not been irreparably ...


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