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261

Opinion of DOUGLAS, J.

try. Neither the Court nor my Brother HARLAN is able to refer to any legislative history which indicates that Congress considered the Shipping Act to require the filing of labor agreements or provisions of those agreements under § 15.28 The Court instead takes the approach that the Shipping Act provisions were purposely drawn broad enough to encompass association agreements which have more than a de minimis effect on commerce. This rationale would require the filing of any collective bargaining provision agreed to by PMA members that raised labor costs beyond the point at which PMA members could be expected to absorb those costs without raising prices or charges.

The Court may well mean, as my Brother HARLAN suggests, that the "obligation to collect the Mech Fund," contained in the collective bargaining agreement, is not to be examined by the Commission on remand, but rather the question is to be limited to the "propriety of the choice of the route to that objective." But that misses the mark. My point is that the latter question is as much a part of the bargaining process as the former. Commission control over either question runs substantial risk of frustrating agreement by the parties on both issues, not to mention other matters in the collective bargaining pact. For example, if an allocation formula. satisfactory to PMA members and to the Commission could not be devised, the fund might never be established, requiring perhaps other changes in the agreement, such as higher wages or continuance of some or all of the restrictive work rules.

If the present practice is an abuse, there is an existing remedy. This agreement between employers could of

28 Indeed, the legislative history would appear to be to the contrary. See n. 9, supra.

Opinion of DOUGLAS, J.

390 U.S.

course be challenged in the courts as violative of the antitrust laws.29 Moreover, §§ 16 and 17 of the Shipping Act afford protection to foreign commerce in cases of undue discrimination or unreasonable practices affecting that commerce. While I cannot say that the Commission erred in finding no violation of § 16, I concur in a remand to the Commission for further findings under § 17.30

29 The circumstance that the funding plan originated in collective bargaining and was a part of a collective bargaining agreement would not automatically create an exemption from the antitrust laws. See Mine Workers v. Pennington, 381 U. S. 657; Meat Cutters v. Jewel Tea, 381 U. S. 676; Allen Bradley Co. v. Union, 325 U. S. 797.

30 The Commission held under § 16 that that section is violated only if there is discrimination between competitors, which was not the situation here because the marine terminal companies have imposed no higher charges on Volkswagens than on other automobiles. Although such an interpretation is supported by the construction placed on §3 (1) of the Interstate Commerce Act, 49 U. S. C. §3 (1), United States v. Great Northern R. Co., 301 I. C. C. 21, 26-27, on which § 16 of the Shipping Act is modeled, United States Nav. Co. v. Cunard S. S. Co., 284 U. S. 474, 480-481, it has been suggested that the Commission has undermined its own rule by not requiring a competitive relationship in cases not involving freight rates: Investigation of Free Time Practices-Port of San Diego, 9 F. M. C. 525 (1966) (port free time); New York Foreign Freight Forwarders and Brokers Assn. v. FMC, 337 F. 2d 289 (C. A. 2d Cir. 1964), cert. denied, 380 U. S. 910 (billing methods of freight forwarders); Swift & Co. v. Gulf & South Atlantic Havana Conference, 6 F. M. B. 215 (1961) (route restrictions); Storage Practices at Longview, Washington, 6 F. M. B. 178 (1960) (storage charges). Moreover, it is argued that the competitive relationship test employed by the ICC under § 3 (1) of the Interstate Commerce Act is not "an indispensable element in a situation of undue prejudice and preference. . . . Joseph A. Goddard Realty Co. v. New York, C. & St. L. R. Co., 229 I. C. C. 497, 501. The Maritime Commission's refusal to require a competitive relationship in certain cases, however, has diluted that principle only in those situations in which there are services that are not dependent upon the nature of the cargo and the various charges therefor. In the instant case, how

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Opinion of DOUGLAS, J.

If the finding is for petitioner, there may be an incidental and after-the-fact effect on the provisions of the collective bargaining agreement. But it will not produce

ever, there are different charges levied depending upon the nature of the cargo involved. Petitioner conceded before the Hearing Examiner that. "[w]e do not claim that the measurement formula 'regardless of how manifested' subjects Volkswagen automobiles to 'prejudice or disadvantage' as compared to other automobiles, and we admit that there is no other cargo classification in competition with automobiles." The competitive relationship rule has been applied consistently by the Commission in appropriate circumstances. The same rule has also been used by the ICC. Since I cannot say in the circumstances of this case that the requirement of a competitive relationship is unreasonable or inconsistent with the provisions of the Shipping Act, I would defer to the Commission's expertise. Consolo v. FMC, 383 U. S. 607.

With respect to § 17, the Commission expressly noted that (1) the measurement basis for assessing automobiles resulted in an assessment almost 10 times greater than a weight basis ($2.35 per vehicle as against approximately $0.25); (2) that although other cargo was assessed as manifested, vehicles were always assessed on a measurement basis; and (3) while automobile cargo would probably receive only general benefits from the mechanization plan (such as freedom from strikes and slowdowns), such cargo, unlike some other cargo, was unlikely to benefit from technological improvements in loading and unloading. Yet, the Commission held that the difference in treatment was not unreasonable because although automobile cargo may not have benefited as much as other cargo, it did receive "substantial benefits" from the mechanization agreement. As the Court holds, however, such a standard, which focuses on only the benefits received, represents too narrow a view of § 17. What petitioner is contesting essentially is PMA's decision to adopt as the revenue ton for automobiles not a weight ton (2,000 pounds) but a measurement ton expressed in volumetric terms (40 cubic feet/ton). Since the average Volkswagen weighs only 1,800 pounds, but measures about 8.7 tons on a volume basis, it is being assessed $2.35 compared with the $0.25 it would otherwise have to pay on the basis of a weight-ton n.easurement. It is argued that this exaction is grossly disproportionate in light of the limited benefits which petitioner could expect to receive from the mechanization agreement as compared with those which other shippers could antici

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390 U.S.

the paralyzing effect which will follow when prior approval is required. The application of §§ 16 and 17 in particular instances can indeed realistically be compared with enforcement of federal antitrust laws directed against specific practices.

pate.

To focus an inquiry solely on the benefits received may obscure the disparity between the charges ultimately, falling upon petitioner and those exacted from other shippers. The Commission should compare the benefits received with the charges imposed on petitioner's cargo and with those levied upon other cargo, which receives substantially similar benefits, before the question of reasonableness can be resolved. This determination is for the Commission to make in the first instance.

Syllabus.

NORFOLK & WESTERN RAILWAY CO. ET AL. v. MISSOURI STATE TAX COMMISSION ET AL.

APPEAL FROM THE SUPREME COURT OF MISSOURI.

No. 324. Argued January 25, 1968. Decided March 11, 1968.

Appellant N & W, a predominantly coal-carrying railroad with operations centered in the eastern part of the country and which owned no fixed property and only minimal rolling stock in Missouri, leased the property of the Wabash Railroad and became obligated to pay 1965 taxes on fixed property and rolling stock located in Missouri. A state statute prescribes a formula for determining the amount of rolling stock of an interstate railroad that Missouri shall assess for purposes of ad valorem taxation. The statute apportions to Missouri a part of the entire value of all rolling stock of an interstate railroad on the ratio of miles operated in Missouri to the railroad's total road mileage. Applying that formula, which resulted in the postulation that N & W's rolling stock in Missouri constituted 8.2824% of its total rolling stock, the Missouri Tax Commission put N & W's rolling stock assessment at $19,981,757. N & W challenged the assessment, which it showed was more than 21⁄2 times the value of N & W's rolling stock in the State on tax day and more than twice Wabash's assessment for practically the same property in the previous year. Neither N & W's rolling stock in Missouri (about 2.71% of N&W's total rolling stock by number of units and 3.16% by value), the overwhelming amount of which had been leased from Wabash, nor the Missouri operations of N & W and Wabash had materially increased in the intervening period. N & W's coal operations require a great deal of specialized equipment, scarcely any of which enters Missouri, and traffic density on Missouri tracks is but 54% of traffic density on the N & W syst m as a whole. The Tax Commission's assessment against N & W was affirmed on appeal. The Missouri Supreme Court held that use of the mileage formula could be justified on the theory that the rolling stock regularly employed in one State has an "enhanced

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