Consolo v. Federal Maritime Commission
383 U.S. 607 (1966)
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Rule of Law:
Under the Administrative Procedure Act, a court reviewing an agency's factual findings must uphold the agency's decision if it is supported by substantial evidence in the record as a whole. The possibility of drawing two inconsistent conclusions from the evidence does not prevent an agency's finding from being supported by substantial evidence.
Facts:
- Flota Mercante Grancolombiana, S. A. (Flota) was a common carrier of bananas.
- The Federal Maritime Board, a federal agency, had previously ruled in cases involving Flota's competitor, Grace Line, that exclusive carrying contracts with a single shipper violated the Shipping Act of 1916 because they were discriminatory.
- One month after the Board's second ruling against Grace Line's exclusive contracts, Flota entered into a new three-year exclusive carrying contract with a shipper named Panama Ecuador.
- Flota then rejected a bid from a competing shipper, Consolo, for a 'fair and reasonable' amount of its shipping space, citing its exclusive contract with Panama Ecuador.
- Consolo threatened to file a complaint if its demand for space was rejected.
- Flota's exclusive contract with Panama Ecuador contained a clause absolving Flota from liability if the contract were later found to be illegal.
- During the contract term, Flota had an opportunity to cancel the agreement but instead chose to reduce its shipping rates to perpetuate the exclusive arrangement with Panama Ecuador.
Procedural Posture:
- Flota filed a petition for declaratory relief with the Federal Maritime Board, seeking a ruling that its exclusive contract was lawful.
- Consolo filed a complaint with the Board against Flota, asking for damages (reparations).
- The Board consolidated the proceedings, found Flota had violated the Shipping Act, and ordered Flota to cease its discriminatory practices.
- The Board subsequently ordered Flota to pay reparations to Consolo.
- Both parties appealed the reparation order to the U.S. Court of Appeals for the D.C. Circuit; Consolo sought a larger award and Flota sought to have it set aside.
- The Court of Appeals affirmed the finding that Flota violated the Act but remanded the reparations issue to the agency (now the Federal Maritime Commission) for a determination of whether it was 'inequitable' to award damages.
- On remand, the Commission concluded it was not inequitable and issued a new, slightly reduced reparation award.
- Both parties again appealed to the Court of Appeals, which then reversed and vacated the award, holding that the Commission had abused its discretion because there was substantial evidence showing it would be inequitable.
- Consolo petitioned the U.S. Supreme Court for a writ of certiorari.
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Issue:
Under the Administrative Procedure Act, is an administrative agency's decision 'unsupported by substantial evidence' merely because a reviewing court finds that substantial evidence also supports a conclusion contrary to the one reached by the agency?
Opinions:
Majority - Mr. Justice White
No. An agency's finding is supported by substantial evidence if the record contains such relevant evidence as a reasonable mind might accept as adequate to support a conclusion; the possibility of drawing two inconsistent conclusions from the evidence does not prevent the agency's finding from being upheld. The Court of Appeals applied the wrong standard of review by substituting its own judgment for that of the Federal Maritime Commission. The correct standard required the court to determine only if the Commission's decision was supported by substantial evidence, not to weigh the evidence anew or decide if it supported a different outcome. The court's role is not to choose between two competing conclusions. Here, substantial evidence supported the Commission's finding that it was not inequitable to award reparations to Consolo, given that Flota deliberately entered into a discriminatory contract despite recent agency precedents declaring similar contracts illegal. Flota took a calculated risk and cannot now claim it would be inequitable to be held liable for the resulting injury to Consolo.
Analysis:
This case is a cornerstone of administrative law, reinforcing the deferential 'substantial evidence' standard for judicial review of agency fact-finding. It clarifies that a reviewing court's role is not to re-weigh the evidence or substitute its judgment for that of the agency, especially concerning discretionary remedies. The decision significantly strengthens the authority and expertise of administrative agencies by limiting the scope of judicial oversight. For future cases, it establishes that as long as an agency's conclusion is reasonable and based on some solid evidence, it must be upheld, even if the record could also support a different result.
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