A/S Ivarans Rederi v. United States

938 F.2d 1365, 291 U.S. App. D.C. 106, 1992 A.M.C. 292, 1991 U.S. App. LEXIS 14983, 1991 WL 126483
CourtCourt of Appeals for the D.C. Circuit
DecidedJuly 16, 1991
DocketNo. 90-1169
StatusPublished
Cited by4 cases

This text of 938 F.2d 1365 (A/S Ivarans Rederi v. United States) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
A/S Ivarans Rederi v. United States, 938 F.2d 1365, 291 U.S. App. D.C. 106, 1992 A.M.C. 292, 1991 U.S. App. LEXIS 14983, 1991 WL 126483 (D.C. Cir. 1991).

Opinion

Opinion for the Court filed by Circuit Judge CLARENCE THOMAS.

CLARENCE THOMAS, Circuit Judge:

We revisit in this case the Atlantic Agreement, one of the contracts that govern the shipment of goods between the United States and Brazil. In A/S Ivarans Rederi v. United States (Ivarans I), 895 F.2d 1441 (D.C.Cir.1990), we held that the Federal Maritime Commission had the authority to review after arbitration a dispute between the parties to the agreement but that the Commission had incorrectly found ambiguous some of the contract’s plain language. We decide here that the Commission has the authority to skip over the arbitration step in the agreement and that the Commission reasonably interpreted language in the agreement that it correctly found ambiguous..

I.

Brazilian and American officials signed a “Memorandum of Consultation” in 1970, leading carriers in turn to sign contracts in 1972 and the Federal Maritime Commission and the Superintendencia Nacional da Martin Mercante to approve them the following year. In two of the contracts, one called the Gulf Agreement and the other the Atlantic Agreement, the carriers in the trade agreed to pool revenue from goods shipped north, from Brazil to the United States. American Transport Lines, Inc. (AmTrans), a shipper flying the American flag and successor to the bankrupt United States Lines (S.A.), Inc. (which itself bought out two of the contracts’ original parties), is currently a party to both the Atlantic and the Gulf Agreements. A/S Ivarans Rederi, a shipper flying the Norwegian flag, never belonged to the Gulf Agreement but did belong (until it resigned in 1989) to the Atlantic Agreement.

Until 1985, all goods subject to both agreements went from Brazilian ports to American ports directly by water. That year, the Brazilian government repealed its prohibitions against intermodal service, in which goods are first sent by ship and then by truck or rail, with the carrier bearing both expense and responsibility. United States Lines responded with “alternate coast port” service, an intermodal service in which it discharged goods at Atlantic ports and then brought them overland to the Gulf ports shown in the bills of lading. In 1986, the parties to the Gulf Agreement amended it to state expressly that that contract included alternate coast port cargo. Parties to the contracts governing southbound trade between the United States and Brazil and between the United States and Argentina similarly amended those parallel pooling agreements, to include alternate coast port cargo in the Gulf contracts and to exclude it from the Atlantic contracts. Ivarans and its cosignatories began negotiating changes to the Atlantic Agreement. None of the parties would budge, however, so the Atlantic Agreement remained unchanged in relevant parts.

Ivarans argued that no matter the scope of the Gulf Agreement, the Atlantic Agreement covered alternate coast port cargo as well. (Other disputes over the Atlantic Agreement had led to Ivarans I, which wended its way through the agency and this court at about the same time.) Concerned about overlapping responsibilities deriving from the two pooling contracts, United States Lines, joined by AmTrans, its successor in interest, asked the Commis[108]*108sion for a declaratory order concerning their rights and responsibilities under the Atlantic Agreement. United States Lines and AmTrans argued that the Atlantic Agreement did not cover alternate coast port cargo. Ivarans argued that it did and that in any case United States Lines and AmTrans should have filed their claim in arbitration. The Commission decided that the issue was appropriate for resolution by the agency, not an arbitration board, but that the parties would benefit from the initial attention of an administrative law judge. United States Lines (S.A.) Inc., 24 Shipping Reg. (P & F) 1034 (Comm’n June 22, 1988) (Petition for Declaratory Order re: The Brazil Agreements). The administrative law judge then ruled in favor of United States Lines and AmTrans, 25 Shipping Reg. (P & F) 1 (A.L.J. Apr. 14, 1989), and the Commission affirmed with minor modifications, 25 Shipping Reg. (P & F) 755 (Comm’n Feb. 9, 1990). Ivarans now petitions this court for review of the Commission’s order.

II.

Article 21(a) (originally article 13(a)) of the Atlantic Agreement governs “Arbitration”:

Any and all differences and disputes of whatsoever nature as arising out of the Pooling Agreement which cannot be resolved by signators of this Agreement ..., shall be placed in arbitration____

In Ivarans I, Ivarans argued that this clause divested the Commission of jurisdiction to hear disputes between the parties and instead conferred that authority on an arbitration panel. Reaffirming Swift & Co. v. FMC, 306 F.2d 277 (D.C.Cir.1962), we rejected Ivarans’s argument. In approving contractual arbitration clauses, the Commission gives effect to the intentions of private parties. But because a shipping contract owes its legal existence to the statute under which the contract was filed, see Swift, 306 F.2d at 282, the Commission “always retains its statutory right to hear complaints that a filed agreement has been modified through an arbitration decision,” Ivarans I, 895 F.2d at 1446 (emphasis deleted).

In this case, Ivarans takes a slightly different tack. Although the Commission may, in the end, resolve a dispute between the parties, in Ivarans's view the Commission must wait until the parties have gone through arbitration before doing so. The Commission maintains that it need stay its hand only when the parties’ dispute involves the application of the contract to particular facts. If the dispute involves the interpretation of language in the contract itself, the Commission argues, the agency retains the discretion to resolve the dispute in the first instance.

Duke Power Co. v. FERC, 864 F.2d 823 (D.C.Cir.1989), addressed the same argument. We first held in that case that mandatory arbitration clauses do not divest the Federal Energy Regulatory Commission of jurisdiction over contract disputes (thus reaching the same result that we later reached in Ivarans I with respect to the FMC), since the enforcement of rate schedules filed with the agency is “a matter distinctly within the Commission’s statutory mandate,” id. at 829. We also noted that FERC bears the responsibility, derived from statute, to protect the public interest by enforcing filed rate schedules, and that this responsibility gives the agency “an independent interest as a regulatory body” in resolving contract disputes. Id. at 831. Accordingly, we held, when parties dispute the meaning of the terms in a schedule and thereby implicate the agency’s public duties, the agency can decide, in its judgment, whether to send the parties first to arbitration. See id. at 830-31.

The Federal Energy Regulatory Commission and the Federal Maritime Commission bear obvious family resemblances. The Shipping Act of 1984 requires that all pooling agreements be filed with the agency and that parties to the agreements operate under them only “in accordance with [their] terms.” 46 U.S.C. app. §§ 1704(a), 1709(a)(3). This case thus implicates the FMC’s enforcement authority. Moreover, this case does not involve only private parties. In determining the proper construe[109]

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A/S Ivarans Rederi v. United States
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938 F.2d 1365, 291 U.S. App. D.C. 106, 1992 A.M.C. 292, 1991 U.S. App. LEXIS 14983, 1991 WL 126483, Counsel Stack Legal Research, https://law.counselstack.com/opinion/as-ivarans-rederi-v-united-states-cadc-1991.