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January 13, 1977

UNITED STATES of America, Plaintiff,

The opinion of the court was delivered by: MEANOR

 This is a civil action wherein the United States seeks to recover a civil penalty for certain acts of the defendant which are alleged to violate (1) the terms of its tariff on file with the Federal Maritime Commission (FMC), and (2) a suspension order issued by the FMC.

 Sea-Land Service (SLS) is a common carrier by water. Before and during the relevant dates at issue it provided, among other services, containership services between Elizabeth, New Jersey, and Puerto Rico. This action concerns SLS's activities with certain "consolidators," or non-vessel-owning common carriers.

 Consolidators are in the business of receiving small or less than container-load shipments from shippers, consolidating such shipments and "stuffing" them into containers furnished by carriers, and then forwarding the loaded containers to the carrier's terminal for ultimate transportation. SLS was a furnisher of such containers, and provided containership service according to tariff provisions filed by SLS with the FMC which were in effect at all times relevant herein. Typically, consolidators are not located on the waterfront, and containers, full or empty as the case may be, are conveyed by land transportation between the consolidation site and the docks.

 Consolidation activities became a concern to the International Longshoremen's Association (ILA) which viewed the inland consolidation work as properly belonging to ILA members at the waterfront. In January 1973, the ILA met with the association representing SLS and other carriers, and an agreement was reached wherein the carriers agreed not to supply containers to consolidators' facilities within 50 miles of a port unless such facilities were located on a pier where vessels normally dock. The carriers further agreed to pay penalties for containers furnished in contravention of the agreement.

 On March 15, 1973, SLS commenced observance of the above agreement and denied containers to consolidators within a 50-mile radius. On the same date, SLS filed proposed amendments to its tariff with the FMC which were scheduled to become effective on April 14, 1973. The proposed amendments included the terms of the agreement made with the ILA. The amendments also included a provision authorizing SLS to pass on any penalty it incurred by supplying containers in breach of the ILA agreement to the consolidator receiving the containers.

 On April 13, 1973, the FMC ordered an investigation into the lawfulness of the submitted tariff amendments, and also ordered the suspension of the amendments until August 13, 1973. The order did not suspend the tariff in effect prior to the submission of the amendments.

 During the period between April 13 and August 14, 1973, SLS complied with the terms of the ILA agreement. Actual requests for containers which SLS refused to honor during this period, as reflected in the record before me, appear to be limited to five requests by a single consolidator, Consolidated Express, Inc. The record also reflects that during the first six months of 1973, SLS was assessed, and it paid, $102,000 in penalties for alleged violations of the ILA agreement. These penalties were not passed on to the individual consolidators involved. The parties have stipulated that in refusing to supply containers, SLS acted not in reliance on the tariff provisions which had been suspended by the FMC, but rather on its labor agreement and on its tariff which predated the amendments and the suspension order.

 On July 12, 1973, the consolidators' association filed a petition with the FMC alleging that SLS had not complied with the suspension order, and sought to have that order enforced. The FMC, realizing that the suspension order had effect for only one more month, and also aware that the NLRB was about to seek an injunction against the future observance of the ILA agreement, pursued no judicial relief at that time. *fn1"

 On November 20, 1973, the FMC gave notice to SLS of a claim and demand for recovery of $120,000 for 120 or more alleged violations of its April 13 suspension order. On October 24, 1974, the United States instituted this action against SLS asserting a claim for alleged violations of § 2 of the Intercoastal Shipping Act, 46 U.S.C. § 844, and § 32 of the Shipping Act, 46 U.S.C. § 831.


 46 U.S.C. § 844 requires all common carriers by water in intercoastal commerce to file tariffs with the FMC, and provides that no common carrier shall

deny to any person any privilege or facility, except in ...

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