Source: http://www.law.cornell.edu/supremecourt/text/342/570
Timestamp: 2013-12-12 16:28:24
Document Index: 417627132

Matched Legal Cases: ['§ 1', '§ 262', '§ 1651', '§ 22', '§ 14', '§ 812', '§ 2', '§ 828', '§ 15', '§ 814', '§ 15', '§ 4', '§ 4', '§ 804', '§ 12', '§ 132', '§ 1114', '§ 1111', '§ 801', '§ 821']

FAR EAST CONFERENCE et al. v. UNITED STATES et al. | Supreme Court | LII / Legal Information Institute
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342 U.S. 570 (72 S.Ct. 492, 96 L.Ed. 576)
[HTML] Mr. John W. Davis, New York City, for petitioner Isthmian S.S. co.
26 Stat. 209, 15 U.S.C. 1 and 2, 15 U.S.C.A. §§ 1, 2. The defendants were the Far East Conference, a voluntary association, and its constituent members, steamship companies engaged in what is known as the 'outbound Far East trade.' The Conference was organized in 1922, and the Conference Agreement under which it operates was approved by the United States Shipping Board,
exercising authority under the Shipping Act of 1916, as amended.
Admitting the dual-rate system, the defendants justified on the merits but moved that the complaint be dismissed on the ground that the nature of the issues required that resort must first be had to the Federal Maritime Board before a District Court could adjudicate the Government's complaint. The Board, as intervenor, joined in this motion. It was denied by the District Court, 94 F.Supp. 900, and we brought the case here, under § 262 of the Judicial Code, 28 U.S.C. 1651(a), 28 U.S.C.A. § 1651(a), because there are in issue important questions regarding the relation between the Sherman Law and the Shipping Act. 342 U.S. 811, 72 S.Ct. 59.
But the Government argues that it should not be forced to go first to the Board because the United States may not be deemed a 'person,' who under § 22 of the Shipping Act may file a complaint with the Maritime Board.
Surely the large question here in issue ought not to turn on such a debating point. It is almost frivolous to suggest that the Maritime Board would deny standing to the United States as a complainant. The Board has consistently treated the United States as a 'person' within its rule for intervention. We ought not to dally longer with this objection, considering the fact that the United States, as a matter of common knowledge, is today one of the largest shippers in the Far East trade. The matter seems to be disposed of by United States v. Interstate Commerce Commission, 337 U.S. 426, 430, 69 S.Ct. 1410, 1413, 93 L.Ed. 1451 et seq., involving similar provisions of the Interstate Commerce Act.
Having concluded that initial submission to the Federal Maritime Board is required, we may either order the case retained on the District Court docket pending the Board's action, General American Tank Car Corp. v. El Dorado Terminal Co., 308 U.S. 422, 432433, 60 S.Ct. 325, 331, 84 L.Ed. 361; El Dorado Oil Works v. United States, 328 U.S. 12, 17, 66 S.Ct. 843, 846, 90 L.Ed. 1053; see United States v. Interstate Commerce Commission, supra, 337 U.S. at page 465, note 12, 69 S.Ct. 1430, or order dismissal of the proceeding brought in the District Court. As distinguished from the situation presented by the first El Dorado case, supra, which was a contract action raising only incidentally a question proper for initial administrative decision, the present case involves questions within the general scope of the Maritime Board's jurisdiction. Shipping Act of 1916, §§ 14, 15, 39 Stat. 728, 733, 46 U.S.C. 812, 814, 46 U.S.C.A. §§ 812, 814. An order of the Board will be subject to review by a United States Court of Appeals, with opportunity for further review in this Court on writ of certiorari. Pub.L.No.901, 81st Cong., 2d Sess., §§ 2, 10, 64 Stat. 1129, 1132. If the Board's order is favorable to the United States, it can be enforced by rpocess of the District Court on the Attorney General's application. 39 Stat. 728, 737, 46 U.S.C. 828, 46 U.S.C.A. § 828. We believe that no purpose will here be served to hold the present action in abeyance in the District Court while the proceeding before the Board and subsequent judicial review or enforcement of its order are being pursued. A similar suit is easily initiated later, if appropriate. Business-like procedure counsels that the Government's complaint should now be dismissed, as was the complaint in United States Navigation Co. v. Cunard Steamship Co., supra.
The Shipping Act would have to be amended for me to reach the result of the majority. The Conference agreement, approved by the Board in 1922, provides for the adoption by the Conference of a tariff of rates and charges. It states that there shall be no unjust discrimination against shippers and no rebates paid to them. There is no provision in the agreement for dual ratesno arrangement for allowing one rate to shippers who give all their business to the members and for retaliations against nonsubscribing shippers by exacting from them a higher rate. Nevertheless petitioners have prescribed this dual rate system for the purpose of barring from the outbound Far East trade steamship lines that are not members of the combination. At least these are the facts if we are to believe the allegations of the complaint, as we must on the motion to dismiss.
If the Board had expressly approved the dual rate system, and the dual rate system did not violate the Shipping Act, then there would be immunity from the Sherman Act, since § 15 of the Shipping Act, 39 Stat. 733, as amended, 46 U.S.C. 814, 46 U.S.C.A. § 814, gives the Board authority to approve agreements fixing or regulating rates, in effect makes 'lawful' the rates so approved, and exempts from the Sherman Act every 'lawful' agreement concerning them. But that exemption from the Sherman Act can be acquired only in the manner prescribed by § 15. Here no effort was made to obtain it. Hence the petitioners are at large, subject to all of the restraints of the Sherman Act.
If the rates were filed, of course the Board would have exclusive jurisdiction to pass on them. But even then it is restricted. Section 14, Third, for example, makes unlawful retaliation against any shipper by resort to discriminatory or unfair tactics because a shipper has patronized another carrier. And it would seem plain that when a shipper is charged one rate if he gives the Conference a monopoly of his business and another and higher rate if the shipper uses a carrier not a member of the Conference, the shipper is being retaliated against for shopping around among carriers.
The steamship companies, therefore, flout the law as plainly as if they used rates that had been disapproved by the Board. In either case the public interest needs protection if the Sherman Act is to be enforcedwhether it be represented in a criminal prosecution or, as here, in a civil proceeding brought by the United States.
The jurisdiction of the District Court was based on § 4 of the Sherman Law: 'The several district courts of the United States are invested with jurisdiction to prevent and restrain violations of sections 17 of this title * * *.' 26 Stat. 209, 15 U.S.C. 4, 15 U.S.C.A. § 4.
Section 3 of the Shipping Act of 1916 created the Shipping Board. 39 Stat. 728, 729, 46 U.S.C.A. § 804 note. Through several steps its functions have come to its present successor, the Federal Maritime Board. By Executive Order No. 6166, June 10, 1933, § 12, 5 U.S.C.A. § 132 note, its functions were transferred to the United States Shipping Board Bureau in the Department of Commerce. In 1936 Congress created the United States Maritime Commission, 49 Stat. 1985, 1987, 46 U.S.C. 1114, 46 U.S.C.A. § 1114; and in 1950 the present Federal Maritime Board was established. Reorganization Plan No. 21 of 1950, 15 Fed.Reg. 3178 3180, 46 U.S.C.A. § 1111 note.
39 Stat. 728, 46 U.S.C. 801 et seq., 46 U.S.C.A. § 801 et seq.
The irrelevance of the failure to file the rates themselves with the Board was laid bare in United States Navigation Co. v. Cunard Steamship Co., 284 U.S. 474, 486487, 52 S.Ct. 247, 251, 76 L.Ed. 408: 'If there be a failure to file an agreement as required by section 15, the Board, as in the case of other violations of the act, is fully authorized by section 22, supra, to afford relief upon complaint or upon its own motion. Its orders, in that respect, as in other respects, are then, under section 31, for the first time, open to a judicial proceeding to enforce, suspend, or set them aside in accordance, generally, with the rules and limitations announced by this court in respect of like orders made by the Interstate Commerce Commission.'
39 Stat. 728, 736, 46 U.S.C. 821, 46 U.S.C.A. § 821.