City of Milwaukee v. Block

688 F. Supp. 479, 34 Cont. Cas. Fed. 75,532, 1988 U.S. Dist. LEXIS 5438, 1988 WL 60058
CourtDistrict Court, E.D. Wisconsin
DecidedJune 15, 1988
DocketNo. 85-C-1509
StatusPublished
Cited by1 cases

This text of 688 F. Supp. 479 (City of Milwaukee v. Block) is published on Counsel Stack Legal Research, covering District Court, E.D. Wisconsin primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of Milwaukee v. Block, 688 F. Supp. 479, 34 Cont. Cas. Fed. 75,532, 1988 U.S. Dist. LEXIS 5438, 1988 WL 60058 (E.D. Wis. 1988).

Opinion

DECISION AND ORDER

WARREN, Chief Judge.

The Cargo Preference Act of 1954, 46 U.S.C.App. § 1241(b), (1970, West Supp. 1987), and its 1985 amendment, 46 U.S.C. § 1241f, require that whenever the federal government contracts to purchase and transport agricultural commodities to overseas nations, the federal agencies involved are to make certain that up to 75 percent of the commodities will be transported “on privately owned United States-flag commercial vessels, to the extent such vessels are available at fair and reasonable rates for United States-flag commercial vessels, in such manner as will insure a fair and reasonable participation of United States-flag commercial vessels in such cargos by geographic areas....” The Act has potentially grave ramifications for the Great Lakes shipping industry since, with rare exceptions, United States-flag commercial vessels do not serve the Great Lakes. The case now before the Court involves a statutory and constitutional challenge to the application of the Act to Title II of the Agricultural Trade Development and Assistance Act of 1954, 7 U.S.C. §§ 1721-1726b (also called “P.L. 480”). In particular, the dispute centers on the meaning and application of the Cargo Preference Act’s “available” phrase (also called the “Availability Clause”). Plaintiffs, representing various Great Lakes shipping interests, contend that the term exempts the application of the Act from the individual ports of the Great Lakes since no United States-flag ships are available. Defendants (officials of various federal government agencies) and defendant intervenors (representing United States-flag interests) oppose such an interpretation and seek to uphold the current application of the Act to Title II shipments. That current application considers availability on a national basis and [481]*481makes no exception for Great Lakes shipping.

Based on the decision below, the Court finds that the plain language of the Cargo Preference Act does not require that the Availability Clause be applied on a nationwide or port-by-port basis; rather, the Act requires availability to be considered by “geographic areas.”

BACKGROUND1

I. The Parties

The eighteen plaintiffs in this action include four operators of Great Lakes ports; six labor unions representing longshoremen working the harbor facilities of various Great Lakes ports; four stevedoring service and terminal operation companies servicing Great Lakes ports; one trade association representing various Great Lakes shipping interests; and two foreign-flag shippers and their agent.

The nine government defendants are officials of various federal agencies responsible for administering the provisions of Title II at issue here. They are sued in their official capacities.

The five defendant-intervenors consist of four companies operating United States-flag vessels or organizations with member companies operating United States-flag vessels, and one labor union representing seamen working aboard United States-flag vessels engaged in the United States foreign and domestic shipping trade.

II. Statutory and Regulatory Background

A. The Cargo Preference Act

The Cargo Preference Act was enacted to foster and preserve a strong United States merchant marine by aiding the United States-flag operators in their competition with lower cost foreign-flag vessels.2 H.R.Rep. No. 2329.83 Cong., 2d Sess. 1 (1954), U.S.Code Cong. & Admin.News, 1954 p. 3173. The Act seeks to achieve this purpose by requiring as follows:

Whenever the United States shall procure, contract for, or otherwise obtain for its own account, or shall furnish to or for the account of any foreign nation without provision for reimbursement, any ... commodities, within or without the United States, or shall advance funds or credits or guarantee the convertibility of foreign currencies in connection with the furnishing of such ... commodities, the appropriate agencies shall take such steps as may be necessary and practicable to assure that at least 50 percentum of the gross tonnage of such ... commodities ... which may be transported on ocean vessels shall be transported on privately owned United States-flag commercial vessels, to the extent such vessels are available at fair and reasonable rates for United States-flag commercial vessels, in such manner as will insure a fair and reasonable participation of United States-flag commercial vessels in such cargoes by geographic areas____

46 U.S.C.App. § 1241(b)(1).

The Cargo Preference Act remained substantially unchanged for 30 years following its enactment until December 23, 1985— seven weeks after this lawsuit’s commencement — when the President of the United States signed legislation, formally known as the “Food Security Act of 1985”, amending the Cargo Preference Act. Pub.L. 99-198 (1985). Four provisions in this legislation pertained to this litigation. Specifically, in summarized fashion, these four provisions were as follows:

i) The U.S.-flag participation goal for donated agricultural commodities is increased from 50 to 75 percent. The increase is to be phased in over a period of three years. Sec. 901b(a)(2).
ii) The required level of U.S.-flag participation must be achieved in each 12-month period beginning April 1, 1986. Thus, the compliance year now begins when the Great Lakes’ shipping season [482]*482begins. Sec. 901b(c)(2)(A); Complaint ¶ 59.
iii) The Secretary of Transportation is required, during the period 1986-1989, to take “such steps as may be necessary and practicable without detriment to any port range” to preserve the percentage share or metric tonnage of donated commodities exported from Great Lakes ports in 1984. Sec. 901b(c)(2)(B).
iv) Congress has established a detailed scheme for financing the increased ocean freight charges which may result from the increased utilization of relatively expensive U.S.-flag vessels mandated by the Cargo Preference Act. Sec. 901b(d)-(f).

Title XI, Subtitle C of Pub.L. 99-198 (1985) (“The 1985 Amendments”).

B. Title II, P.L. 480

Title II, P.L. 480 embodies a foreign food donation program by which the United States donates agricultural commodities overseas to curb famine, combat malnutrition, and promote economic and community development in friendly developing countries. See 7 U.S.C. § 1721(a). The President of the United States is authorized to carry out the Title II, P.L. 480 program. Id. Section 1-201 of Executive Order 12220 delegates the Title II, P.L. 480 functions vested in the President to the Director of the United States International Development Cooperation Agency (“IDCA”). 45 Fed.Reg. 44245 (June 27, 1980). The IDCA has internally redelegated these functions to the Agency for International Development (“AID”) who, in conjunction with the Commodity Credit Corporation (“CCC”), administers the Title II, P.L. 480 program. In the Title II, P.L.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
688 F. Supp. 479, 34 Cont. Cas. Fed. 75,532, 1988 U.S. Dist. LEXIS 5438, 1988 WL 60058, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-milwaukee-v-block-wied-1988.