Opinion ID: 303595
Heading Depth: 1
Heading Rank: 1

Heading: The Agreement, the Statute, and the Issue

Text: 4 Seatrain Lines, Inc., petitions for review and reversal of the Federal Maritime Commission's approval without a hearing of Agreement No. 9903 between Pacific Far East Line, Inc., and Oceanic Steamship Company, covering the sale by Oceanic of its entire fleet of four vessels, currently in service in the North American Pacific Coast-Australasian Trade (Trade Route 27), as well as Oceanic's interest in two container ships still building in the United States with the aid of construction-differential subsidy. Included in the sale of these assets are transfers of Oceanic personnel and all shoreside equipment to Pacific Far East Line. This sale comprises all of Oceanic's assets, although Oceanic, a wholly-owned subsidiary of the Matson Navigation Company, retains its corporate existence and is not restricted by the agreement from re-entering the North American Pacific Coast-Australasian or any other trade. 5 The question presented at the outset is whether this agreement falls within the scope of the Commission's 1 jurisdiction as defined by the Shipping Act of 1916. 2 As enacted, Section 15 of the Act provided in relevant part as follows: 6 That every common carrier by water, or other person subject to this Act, shall file immediately with the board [now the Commission] a true copy, or, if oral, a true and complete memorandum, of every agreement with another such carrier or other person subject to this Act, or modification or cancellation thereof, to which it may be a party or conform in whole or in part, 7 fixing or regulating transportation rates or fares; 8 giving or receiving special rates, accommodations, or other special privileges or advantages; 9 controlling, regulating, preventing, or destroying competition; 10 pooling or apportioning earnings, losses, or traffic; 11 allotting ports or restricting or otherwise regulating the number and character of sailings between ports; 12 limiting or regulating in any way the volume or character of freight or passenger traffic to be carried; 13 or in any manner providing for an exclusive, preferential, or cooperative working arrangement. 14 The term agreement in this section includes understandings, conferences, and other arrangements. 15 The Board [now the Commission] may by order disapprove, cancel, or modify any agreement, or any modification or cancellation thereof, whether or not previously approved by it, that it finds to be unjustly discriminatory or unfair as between . . . 16 Agreements existing at the time of the organization of the Board [now the Commission] shall be lawful until disapproved by the Board. . . . 17 . . . Every agreement, modification, or cancellation lawful under this section shall be excepted from the provisions of the Act approved July 2, 1890, entitled An Act to protect trade and commerce against unlawful restraints and monopolies, and amendments and Acts supplementary thereto, and the provisions of sections 73 to 77, both inclusive, of the Act approved August 27, 1894, entitled An Act to reduce taxation, to provide revenue for the Government, and for other purposes, and amendments and Acts supplementary thereto. 3 18 While the agreement here at issue may at first impression be thought to fall within the third category-controlling, regulating, preventing, or destroying competition-inasmuch as the sale by Oceanic to Pacific Far East Line of all of its assets has the effect of eliminating Oceanic, at least for the present, from the North American Pacific Coast-Australasian trade, both the language and context of Section 15 itself and the legislative history accompanying it demonstrate that this particular agreement is not covered. 19