New York Shipping Association, Inc., Petitioner, v. Federal Maritime Commission and United States of America, Respondents,states Marine International, Inc., et al., Intervenors.states Marine International, Inc., et al., Petitioners, v. Federal Maritime Commission and United States of America, Respondents,new York Shipping Association, Inc., Intervenor, 571 F.2d 1231 (D.C. Cir. 1978)

To alleviate the impact on dock workers of mechanization in the loading and unloading of ocean carriers, associations of waterfront employers have agreed, through collective bargaining with labor unions, to establish new and larger fringe benefit funds for longshoremen. In 1968, the Supreme Court, through its decision in Volkswagenwerk Atkiengesellschaft v. FMC, 390 U.S. 261, 88 S. Ct. 929, 19 L. Ed. 2d 1090, imposed an overlay of governmental regulation upon this bargaining structure by construing section 15 of the Shipping Act of 1916, 46 U.S.C. § 814 (Supp. V 1975), as requiring multi-employer associations to seek prior approval of agreements allocating the burdens of the collectively bargained fringe benefit obligations.

These consolidated petitions reflect the continuing efforts of the multi-employer association in the Port of New York to gain Commission approval of a plan allocating the obligations established in a three-year collective bargaining agreement signed, after a lengthy strike, in the very year Volkswagenwerk was decided. No. 76-2024 involves the question of whether the Commission properly ordered the petitioner association to reimburse certain member employers for overassessments paid by them under that plan, which the Commission, in order to avert another strike, conditionally approved in 1970, and finally approved in 1972 subject to major revisions. No. 76-2026 raises the derivative question of whether the Commission properly refused to force the association to pay interest on the refunds awarded to the overassessed member employers. We find that the Commission acted within its authority in both instances; and we accordingly affirm its order requiring the refunds but denying interest thereon.I

An understanding of the issues raised in these petitions requires some feel for the painful transition in maritime transportation from labor-intensive cargo handling to the modern and largely mechanized system of containerized cargo, and for the employees' efforts at the bargaining table to preserve their financial security in the face of these sweeping changes. Large portions of this history have been set forth in New York Shipping Association v. FMC, 495 F.2d 1215 (2d Cir.), cert. denied, 419 U.S. 964, 95 S. Ct. 224, 42 L. Ed. 2d 178 (1974), and Transamerican Trailer Transport, Inc. v. FMC, 160 U.S.App.D.C. 351, 492 F.2d 617 (1974); and our description will be confined to the facts immediately involved in this case.

A decade of industrial strife occasioned by waterfront mechanization, described in general labor relations terms in Volkswagenwerk, supra at 295-306, 88 S. Ct. 929 (Douglas, J., dissenting), came to a head in the Port of New York in 1968 with a 57-day strike. The result of that strike was a collective bargaining agreement between the New York Shipping Association (the Association), which represents all of the employers here involved,¹  and the International Longshoremen's Association (ILA). That agreement, among other things, assured longshoremen of considerably enhanced fringe and guaranteed-annual-income benefits. Traditionally the employers had paid for their share of such benefits by contributing a certain amount of money for each hour of longshore labor used. With the coming of automation in large segments of the industry, however, and with the escalation of benefits, this man-hour system imposed an inordinate burden upon the minority of remaining "break-bulk carriers" that continued to handle cargo unsuitable for any but labor-intensive, unmechanized handling. Consequently, these carriers, including intervenors in No. 76-2024 and petitioners in No. 76-2026, a group of twelve break-bulk shipping companies, referred to as the States Marine Group (SMG),²  argued that contributions to the benefits fund under the 1969-1971 collective bargaining agreement should be based on tonnage handled, rather than man hours utilized, by each employer.

Disagreement over the method of funding the benefits called for in the collective bargaining agreement in 1968 had, by early 1970, raised the spectre that funds would not be forthcoming, which in turn led the ILA to threaten a second strike. In order to avert that possibility, the Association, in February 1970, asked the Commission, in advance of the usual round of hearings and proposed and final decisions, to approve immediately but conditionally a compromise allocation agreement calling for man-hour assessments of some employers and tonnage assessments of others. The Commission accepted this approach and conditionally approved the assessment plan,³  upon assurances by the Association that it would later adjust the assessment burdens should the Commission, following more extended consideration, modify the allocation plan pursuant to section 15 of the Shipping Act of 1916.⁴ 

Armed with these assurances, the bulk of the employers for the moment put aside their claims that the allocation plan was inequitable and contrary to section 15, went along with the temporary solution, and thereby averted a strike.⁵ 

Not until 1972 did the Commission reach a final decision on the compatibility of the 1968-1971 allocation plan with section 15.⁶  It then held that a group of ocean carriers serving Puerto Rico the Puerto Rican Group (PRG) which had been assessed on a tonnage basis but had paid on a man-hour basis, should have been assessed partially on each basis.⁷  The upshot was that, while technically overassessed, PRG actually underpaid. To the extent that PRG had underpaid, all other members of the Association, including the States Marine Group, had overpaid and accordingly were due compensation, according to the Commission.⁸  Challenged in this court, the Commission's final order was upheld in Transamerican Trailer Transport, Inc. v. FMC, supra; and the parties returned to the Commission to devise a means of making the necessary adjustments.

It is with this later implementation phase of the Commission's modification of the 1969-1971 allocation plan that we are concerned. This phase overlapped with the efforts of Association members to adjust their rights and liabilities under two subsequent and successive collective bargaining agreements fixing the level of benefits that they would have to fund for the 1971-1974 and 1974-1977 periods respectively. Consequently, the efforts to adjust the rights and liabilities in all three periods became intertwined, necessitating some discussion by us of events related to the second two assessment periods.

Pertinent to the present case is the fact that the Association extended through the second labor contract period, 1971-1974, the same allotment plan that the Commission had conditionally approved in 1970 without the modifications it ordered in 1972. This extension led the Puerto Rican Group, following the Commission's final decision on the 1969-1971 allocation plan, to claim that it had overpaid in the second period to the same degree that the Commission had found it to have been overassessed in the first period.⁹  In 1974, the following potential claims, as relevant here, lay before the Association:

(1) Pursuant to the Commission's 1972 Order, all members other than PRG sought refunds of approximately $5 million to reimburse them for the amount that they overpaid during the 1969-1971 period because PRG had underpaid.¹⁰ 

(2) Pursuant to extrapolations from the Commission's 1972 Order,¹¹  PRG sought refunds of approximately.$7.4 million for overassessments in the 1971-1974 period, which had resulted in underassessment of all other members.¹² 

Like 1968, 1974 was a watershed year for labor-management relations in the New York Port. In that year a new collective bargaining agreement went into effect for the 1974-1977 period with respect to which the Association adopted an assessment formula based entirely on tonnage. Moreover, the Association, in response to pressure from the ILA, entered into a series of settlements in 1974 that largely, but, as this case attests, not entirely, resolved the claims pending before it and arising out of the first three assessment periods. Most important here, the Association and the Puerto Rican Group agreed to offset the refunds due all other Association members from PRG for the first period against those claimed by PRG from the other members in the second period.¹³  Unlike the other settlements, however, see note 13 supra, this one did not pass through the Commission unscathed. Following opposition by SMG, the Commission approved the settlement subject to the following caveat:

IT IS FURTHER ORDERED that such agreement and our approval herein shall in no way affect or diminish the rights of States Marine International, Inc., et al. (i. e., SMG) to refunds under Docket No. 69-57 (i. e., under the 1968-1971 allocation plan as modified by the Commission's 1972 Order).¹⁴ 

The Board of Directors of the Association accepted this caveat without withdrawing the agreement as conditioned, so that the settlement went into effect. In fact, months before the Commission acted, the Board of Directors evinced an awareness of the "possibility that certain interests such as the break-bulk carriers (i. e., SMG) may seek to recover amounts which they may claim are owing by the Puerto Rican carriers for the 1969-1971 period." Nonetheless, following the recommendation of the Association's counsel, the Association approved the settlement and submitted it to the Commission, which in turn made the SMG caveat explicit.¹⁵ 

By early 1975, in summary, the situation on the New York waterfront left the break-bulk carriers in the States Marine Group with the full tonnage assessment formula for the future that they desired, and it left the Association free, with one exception, from all of the Volkswagenwerk litigation that had plagued it since 1968.¹⁶  Even so, the legacy of the strike and collective bargaining agreement of 1968, as well as of the Supreme Court's Volkswagenwerk decision of that year, have continued to haunt the Association and the Commission until this day, almost a decade later. Because the settlements left pending the SMG claims from the first assessment period, the Commission in 1975 and 1976 proceeded with the implementation phase of its consideration of the 1969-1971 assessment plan. In this phase, SMG argued that either or both the Association and PRG must reimburse it for the amount it overpaid in 1969-1971, plus interest calculated at two percent per month (not compounded) payable from September 30, 1971, in order to make up for PRG's underpayments in that first period. Over the vigorous opposition of the Association, and PRG, see note 7 supra, and contrary to the finding of the trial examiner, the Commission in September 1976, by a 3-2 vote, awarded SMG the refunds it sought from the Association, which it preliminarily calculated at $689,599, but it denied interest on these refunds.¹⁷  Both the Association and SMG petitioned this court for review of the parts of the Commission order adverse to themselves.

II

Given the detail required even to sketch the complex labor relations scene in the New York Port over the past decade, the task advocated by petitioners of rearranging that scene by reference to the broad and amorphous language of section 15 of the Shipping Act, see note 4 supra, should and must be approached with caution. In a setting already cluttered with prolonged multiparty negotiations between labor and employers as well as among the employers themselves, and in one dotted with strikes and threatened strikes, the Commission properly limits its function under Volkswagenwerk and section 15 to that essentially of a neutral arbiter seeking to assure that the parties acting independently have achieved a broadly equitable arrangement of benefits and burdens. See Volkswagenwerk, supra at 282, 88 S. Ct. 929, authorities cited in note 16 supra.

Beyond assuring the neutrality and procedural circumspection of the Commission in that endeavor, which are not in question here, the role of this court is even more circumscribed, aiming only to assure that the parties' and the Commission's broad equalization of benefits and burdens has substantial evidentiary support for its necessary factual predicates and is reasonable. See generally Consolo v. FMC, 383 U.S. 607, 86 S. Ct. 1018, 16 L. Ed. 2d 131 (1966).

III

The Association has advanced two major arguments in favor of relieving its members collectively of any obligation to the States Marine Group arising out of the 1969-1971 assessment period. To the Commission, the Association argued primarily that the settlement with PRG freed SMG of a liability to PRG in respect to the second assessment period that equaled or exceeded PRG's liability to SMG from the first assessment period. In this court, the Association has placed somewhat greater emphasis upon the argument that whatever SMG claims have survived the settlement run against PRG directly rather than through or against the Association.¹⁸ A.

In addressing the first argument, that SMG's first-period claims were satisfied by PRG's abandonment of its second-period claims, we face primarily a factual question as to which the Commission's answer has substantial support in the record before us. In essence, a majority of the Commission found that SMG's fully adjudicated right to payments of approximately $600,000 arising out of PRG's underpayments in the 1969-1971 period were not satisfied when PRG gave up its highly contingent rights to a like, or perhaps slightly larger, amount arising out of SMG's alleged underassessments during the 1971-1974 period. Although our review must be concerned primarily with the Commission's and not the Administrative Law Judge's finding, Transamerican Trailer Transport, Inc. v. FMC, supra 160 U.S.App.D.C. at 360, n. 10, 492 F.2d at 626 n. 10, we note that in this instance the two findings were not in accord. Nonetheless, consideration of the ALJ's reasons for finding against SMG on this point, which the Association has reiterated to us, reveals no reason to overturn the Commission's contrary finding.¹⁹ 

Initially, the ALJ contended that by approving the overall settlement between PRG and the Association, the Commission already had decided, pursuant to section 15 and Volkswagenwerk, that trading off the 1969-1971 rights of Association members (including those of SMG) against the 1971-1974 rights of PRG achieved a reasonable equalization of benefits and burdens for all concerned during the two periods. A predicate for such a decision, of course, would be that PRG's second-period rights approached the degree of solidity that the Commission's 1972 Order had given the other Association members' first-period rights, so that subtracting one from the other would leave a zero sum. The Commission tells us, however, that its approval of the settlement was not based on Volkswagenwerk's "reasonable equalization of benefits and burdens" standard, but instead upon a requirement that each party receive "valuable compensation" from the compromise agreement.²⁰  Hence, because the Commission recognizes even the savings of litigation costs as valuable compensation, its approval of the settlement does little to dispel the cloud of uncertainty over PRG's second-period claims.

Nor are we impressed with the ALJ's independent conclusion, based on his review of the facts, that the settlement and other events surrounding the 1971-1974 and 1974-1977 periods afforded SMG benefits that equitably offset its overpayments in the 1969-1971 period. This conclusion stems primarily from the ALJ's static view of how the industry's fringe benefits obligations should have been allocated among the Association's members during the entire 1969-1977 time frame. Under this view, the ALJ assumed that the Commission would have made the same adjustments in the second period assessment agreement as it made in the identical first period agreement. Consequently, he reasoned, PRG was overassessed and SMG was underassessed. This static view further led the ALJ to assume that the solely-tonnage-based formula developed in the third period awarded SMG a special benefit vis-a-vis the rest of the Association that should be applied against the amount due it in the first period.

A majority of the Commission takes a far more evolutionary view in assessing the propriety of assessment formulas during the three periods from 1969 to 1977. It correctly notes that its first-period concessions to the Puerto Rican interests were based on the need to protect the ocean-cargo-dependent economy of Puerto Rico from too abrupt a change-over from man-hour to tonnage assessments. See Transamerican Trailer Transport, Inc. v. FMC, supra 160 U.S.App.D.C. at 362, 492 F.2d at 628. By 1971, of course, the abruptness and surprise of a switch-over to tonnage assessment could no longer be cited in PRG's favor. More broadly, the Commission endorses the industry-wide trend in the New York Port toward assessments based on tonnage alone a trend culminating in the 1974-1977 agreement.

The Commission reasonably views this trend as an equitable industrial-relations response to rising labor-benefits costs that are themselves brought on by a more pervasive trend toward mechanization on the waterfront. Under this view, the Association's adoption of the same formula in 1971-1974 as it used in 1969-1971, because it resists the trend toward an all-tonnage-based formula, was more likely to have overburdened the break-bulk carriers in the States Marine Group than it was to have harmed the mechanized carriers in the Puerto Rican Group. And, by like reasoning, the all-tonnage formula used in the third period, rather than specially benefiting SMG, might well have given it no more than its equitable due. As such, we accept the Commission's conclusion that all three of the ALJ's critical assumptions that PRG was overassessed in the second period, and that SMG was underassessed in both the second and the third periods cannot bear scrutiny.

In sum, we agree with the Commission that because it has no evidence before it that definitely establishes special benefits to the States Marine Group from the second and third periods, it cannot justify withholding from those carriers the fully adjudicated adjustments owed it from the first period.²¹ B.

We examine the Association's second argument that PRG rather than it should bear responsibility for satisfying SMG's claims against the background of its promise in 1970 to be responsible for making all adjustments necessary to bring the assessment plan conditionally approved by the Commission into conformity with whatever plan the Commission finally approved. Not only did these explicit assurances pave the way for the Commission's and its membership's acceptance of a modus vivendi sufficient to avert a second strike in two years. They also reflected a long-standing modus operandi in the Port under which employers deal collectively, rather than individually, in arranging their rights and liabilities in labor-related matters. From this perspective the Association's attempt to absent itself from this dispute in admittedly unprecedented fashion seems untenable to us, as it did to the full Commission and the ALJ.²² 

More credence, perhaps, is due the Association's somewhat more sophisticated variation of this argument, that is to say, because SMG's claims arise solely out of underpayments by PRG, to force all of the members of the Association to satisfy those claims cannot help but burden many of them more than they are benefited by the assessment plan and the labor peace it assures. Hence, so the argument proceeds, the Commission's decision does not adhere to the standard that Volkswagenwerk read into section 15.

Even as restated in this manner, we are not inclined to accept the Association's argument. As the representative of its member employers, the Association may take action that, if not appropriately resisted, may act as a waiver by them of their section 15 rights.²³  Accordingly, any member that, unlike SMG, failed to disassociate itself from the settlement agreement with PRG, or from the preservation in that agreement of SMG's rights, cannot be heard to complain about increased assessments in the future that may result from the agreement. Moreover, all members, by joining the Association, accept their share of its current liabilities, so that no new member has cause to object to paying part of the amount owed SMG, even if it was not a member at the time the Association accepted responsibility for meeting those claims.²⁴ 

IV

As discussed earlier, the States Marine Group's rights growing out of the 1969-1971 period are predicated upon the Association's promise in 1970, in return for the Commission's conditional approval of its assessment formula, to make whatever "retroactive" adjustments were later required by the Commission's modifications of that formula. See note 4 supra and accompanying text. From this promise, SMG would have us derive a right on its behalf to interest on the Commission's award of payments and credits that we are leaving undisturbed. This argument is, however, inconsistent with the general rule that interest should not accrue until the amount of a liability is determined. Miller v. Robertson, 266 U.S. 243, 258-59, 45 S. Ct. 73, 69 L. Ed. 265 (1924); Belcher v. Birmingham Trust Nat'l Bank, 488 F.2d 474, 477-78 (5th Cir. 1973); Hansen & Rowland v. C. F. Lytle Co., 167 F.2d 170 (9th Cir. 1948).

That general rule seems especially appropriate in the present situation. Here the Commission is acting essentially as a neutral intermediary attempting to assure and effectuate reasonably equitable arrangements of rights devised by the employers themselves. Moreover, the employers' general assumption in 1970 seems to have been that interest would run from the time the rights were finally determined.²⁵  Consequently, we affirm the Commission's denial of interest before October 21, 1977.²⁶ 

For all of the above reasons, we are in agreement with the Commission that the Association undertook the responsibility for satisfying the States Marine Group's claims arising out of the 1969-1971 assessment period and that those claims were not satisfied by the Association's settlement with the Puerto Rican Group, but that the Association need not pay interest on those claims. Accordingly, the Commission's 1976 Order is affirmed and the petitions in Nos. 76-2024 and 76-2026 are denied.

It is so ordered.