Source: https://supreme.justia.com/cases/federal/us/239/466/
Timestamp: 2019-04-19 04:27:24+00:00

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Justia › US Law › US Case Law › US Supreme Court › Volume 239 › United States v. Hamburg-Amerikanische Co.
This Court cannot pass upon questions which have, as an inevitable legal consequence of the European War now flagrant, become moot. This Court takes judicial notice of the European War, and that its inevitable consequence has been to interrupt the steamship business between this country and Europe.
It is a rule of this Court based on fundamental principle of public policy not to establish a rule for controlling predicted future conduct, and it will not decide a case involving a combination alleged to be in violation of the Anti-Trust Act which has become moot as a legal consequence of war because of probability of its being recreated on the cessation of war. California v. San Pablo R. Co., 149 U. S. 308.
The power of this Court cannot be enlarged or its duty affected in regard to the decision of a moot case by stipulation of parties or counsel.
Where a case to dissolve a combination alleged to be illegal under the Anti-Trust Act has become moot and this Court has thus been prevented from deciding it upon the merits, and the court below decided against the government, the course most consonant with justice is to reverse, with directions to dismiss the bill without prejudice to the government in the future to assail any actual contract or combination deemed to offend the Anti-Trust Act.
The facts, which involve the construction and application of the Sherman Anti-Trust Act of July 2, 1890 and the practice of this Court in regard to cases which have become moot, and the effect of the legal consequence of war, are stated in the opinion.
The United States, on January 4th, 1911, commenced this suit to prevent the further execution of an agreement to which the defendants were parties and which it was charged constituted the foundation of an illegal combination in violation of the Anti-Trust Act of July 2, 1890 (26 Stat. 209, c. 647). The relief asked, moreover, in the nature of things embraced certain subsidiary agreements made during the course of the execution of the main contract, in furtherance of its alleged prohibited result. The principal agreement was made in 1908, to last until February 28, 1911, but was to continue in force thereafter from year to year unless, not later than December 1st of each year a notice of the intention not to continue was given. On December 3, 1910, however, just a month before this suit was filed, the agreement in question was renewed for a period of five years.
We give from the argument on behalf of the United States a statement of the corporate defendants to the bill, some of whom had become parties to the alleged illegal combination by subsidiary agreement or agreements made at a later date than the original contract.
"1. The Allan Line Steamship Company, Limited, hereafter called the 'Allan Line,' a British corporation, operating from Portland, Boston, and Philadelphia to London, Liverpool, and Glasgow and return. "
"2. International Mercantile Marine Company, a New Jersey corporation, operating from New York and Philadelphia to Liverpool and Southampton and return."
"3. Its ships, together with those of its subsidiary company, defendant International Navigation Company, Limited, also operating from New York and Philadelphia to Liverpool and Southampton, . . . are referred to as the 'American Line.' Besides International Navigation Company, Limited, it also controls through stock ownership the defendants British & North Atlantic Steam Navigation Company, Limited, Societe Anonyme de Navigation Belge Americaine, and Oceanic Steam Navigation Company, Limited."
"4. British & North Atlantic Steam Navigation Company, Limited, a British corporation, hereafter called the 'Dominion Line,' operating from Portland to Liverpool and return."
"5. Societe Anonyme de Navigation Belge Americaine, a Belgian corporation, hereafter called the 'Red Star Line,' operating from New York and Philadelphia to Antwerp and return."
"6. Oceanic Steam Navigation Company, Limited, a British corporation, hereafter called the 'White Star Line,' operating from New York and Boston to Liverpool and Southampton and return."
"7. The Anchor Line (Henderson Brothers), Limited, a British corporation, hereafter called the 'Anchor Line,' operating from New York to Glasgow and return."
transports a substantial proportion (12%) of its steamship passengers to and from points in this country."
"9. The Cunard Steamship Company, Limited, a British corporation, hereafter called the 'Cunard Line,' operating from New York and Boston to Liverpool in England, Fiume in Hungary, and Trieste in Austria, and return."
"10. Hamburg-Amerikanische Packetfahrt-Actien Gesellschaft, a German corporation, hereafter called the 'Hamburg-American Line,' operating from New York to Hamburg and return."
"11. Nord Deutscher Lloyd, a German corporation, hereafter called the 'North German Lloyd Line,' operating from New York, Baltimore, and Galveston to Bremen and return."
"12. Nederlandsh-Amerikaansche Stoomvaart Maatschapij (Holland-Amerika Lijn), a Netherlands corporation, hereafter called the 'Holland-American Line,' operating between New York and Rotterdam and return."
"13. Russian East Asiatic Steamship Company, a Russian corporation, hereafter called the 'Russian-American Line,' operating between New York and Libau, Russia, and return."
The individuals named as defendants were the principal officers and agents in this country of the corporate defendants. We extract from the argument on behalf of the government the following statement of the main provisions of the principal agreement.
"(1) The parties guarantee to each other certain definite percentages of the entire steerage traffic carried by them both eastbound and westbound between European ports and the United States and Canada, except Mediterranean passengers."
which have not carried their full quota. It is expressly stated that this provision 'forms one of the main features of the entire contract.'"
"(3) Each line must make a weekly report of the number of steerage passengers carried, and from these the secretary of the pool compiles weekly statements showing the pool position of each line. He also prepares each month provisional accounts of the compensation due from lines which have exceeded their quota. This must be paid immediately on pain of heavy penalties. Final settlements are made at the end of each year."
"(4) Each line undertakes to arrange its rates and service in such manner that the number of steerage passengers it actually carries shall correspond as nearly as possible with the number allotted to it by the contract. If any line exceeds its proportion, it is in duty bound to adopt measures calculated to bring about a correct adjustment. The other lines may either await the action of the individual line, or a majority of the lines representing 75 percent of the pool shares can immediately order rates on a plus line to be raised or rates on a minus line to be lowered, and from this order there is no appeal. It is expressly stated, however, that"
"all parties were unanimously of the opinion that the adjustment is, whenever practicable, to be effected not by reducing the rates of one line, but, on the contrary, by raising the rates of one or several of the lines."
"(5) No line has the right to alter its steerage rates without having previously informed the secretary -- i.e., all lines are bound to maintain existing rates until the other pool members are notified."
"(6) No circulars or publications shall be issued by any line reflecting upon or instituting comparisons with any other conference line unfavorable to the latter, and no party shall support (advertise in) any newspaper which shall systematically attack any conference line."
each line deposits with the secretary a promissory note in the amount of £1,000 for each percent of traffic allotted to it in the pool. From this amount penalties may be collected ranging from £250 for smaller infractions to the forfeiture of the entire deposit if the line withdraws from the agreement before its expiration, refuses to pay compensation money, or assists directly or indirectly any opposition line."
"(8) New lines may be admitted or the terms of the agreement altered only by unanimous vote, unless otherwise provided in the contract."
"(9) To assist in the carrying out of the agreement, a secretary was appointed."
"(10) Regular meetings are to be held alternately at London and Cologne for the purpose of carrying out this agreement and agreements collateral thereto. These meetings constitute what is called the Atlantic Conference."
"Representatives of the Atlantic Conference Lines likewise meet in New York in what is called the American Atlantic Conference or New York Conference."
It is to be observed in addition that the agreement expressly provided that the withdrawal of any one of the lines from the contract should release all others from all future obligation unless the others agreed among themselves to continue.
To the elucidation of the view we take of the case, it suffices to say that, as the result of the answers of the defendants, the issues which arose for decision were two-fold in character: did the Anti-Trust Act relate to the business of ocean transportation with which the assailed agreement and those subsidiary to it were concerned, and if so, did the agreements and the conduct of the defendants under them constitute a violation of the provisions of the Anti-Trust Act?
transportation covered by the main agreement was under the control of the Anti-Trust Act, yet held that the assailed contract and the action of the parties under it were not within the terms of the act, and therefore that the complaint of the government on that subject was without foundation. The court, however, concluded that a certain subsidiary agreement which had been entered into in the process of the execution of the original agreement had given rise to a practice which was reprobated by the Anti-Trust Act, and the further execution of such agreement and the carrying out of the practice under it were by the decree forbidden. The court reached these conclusions upon opinions formed concerning the nature and character of ocean transportation with which the agreement was concerned, the evils which had existed in the traffic and which it was the purpose of the agreement to remedy, the practice of the commercial world in dealing with such transportation in the past, the benefit which had resulted to commerce from the execution of the agreement, the reflex light thrown upon its intent and object by the reasonable rates which had been applied in its execution, and many other conditions which had come to pass as a result of the agreement, tending to the amelioration of the conditions of steerage travel and the resulting benefaction to the safety, comfort, and health of the millions of human beings traveling by steerage, to which class of traffic alone the contract related. 216 F. 971.
with the conclusion that the Anti-Trust Act was applicable to such transportation.
in the case before it. No stipulation of parties or counsel, whether, in the case before the Court or in any other case, can enlarge the power, or affect the duty, of the Court in this regard."
See also Lord Veazie, 8 How. 251; Cheong Ah Moy v. United States, 113 U. S. 216; Little v. Bowers, 134 U. S. 547; Jones v. Montague, 194 U. S. 147; Security Life Insurance Co. v. Prewitt, 200 U. S. 446; Richardson v. McChesney, 218 U. S. 487; Stearns v. Wood, 236 U. S. 75.
"the combination against which this proceeding is directed, composed of two British and two German steamship companies, has been practically dissolved as a result of the European War,"
"In view of the fact that the logic of events has turned this investigation into an autopsy, instead of a determination of live issues, it seems unnecessary to discuss the persuasiveness of the proofs,"
etc. But we cannot give our implied sanction to what was thus done, or accept the persuasiveness of the reasoning upon which the action was based, in view of the settled decisions of this Court to the contrary and the fundamental principles of public policy upon which they are based. In fact, at this term, although we were pressed to take jurisdiction of a cause in a capital case after the death penalty had been inflicted on the accused, we declined to do so and dismissed for want of jurisdiction because the case had become a moot one. Director of Prisons v. Court of First Instance of the Province of Cavite, post, p. 633.
Nor is there anything in United States v. Trans-Missouri Freight Association, 166 U. S. 290, and Southern Pacific Terminal Co. v. Interstate Commerce Commission, 219 U.S.
498, which conflicts with this fundamental doctrine. In the first, the Trans-Missouri case, a combination between railroads, charged to be illegal, was by consent dissolved, and it was held that, in view of the continued operation of the railroads and the relations between them, their mere consent did not relieve of the duty to pass upon the pending charge of illegality under the statute of their previous conduct, since, by the mere volition of the parties, the combination could come into existence at any moment. Leaving aside some immaterial differences, in terms, the ruling in the Southern Pacific case was based upon the decision in the Trans-Missouri case. Here, on the contrary, the business in which the parties to the combination were engaged has, by force of events beyond their control, ceased, and by the same power and a continued relation concerning it between them has become unlawful and impossible. The difference between this and the Trans-Missouri case was clearly laid down in Mills v. Green, 159 U. S. 651, where, after announcing the general rule as to the absence of authority to consider a mere moot question, and referring to possible exceptions resulting from the fact that the want of actuality had arisen either from the consent of the parties or the action of a defendant, it was declared: "But if the intervening event is owing to the plaintiff's own act or to a power beyond the control of either party, the Court will stay its hand."
and must be based solely upon determining what will be "most consonant to justice" in view of the conditions and circumstances of the particular case. Coming to consider the question in that light, and in view of the nature and character of the conditions which have caused the case to become moot, we are of opinion that the ends of justice exact that the judgment below should not be permitted to stand when, without any fault of the government, there is no power to review it upon the merits, but that it should be reversed and the case be remanded to the court below with directions to dismiss the bill without prejudice to the right of the government in the future to assail any actual contract or combination deemed to offend against the Anti-Trust Act.

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