Opinion ID: 303595
Heading Depth: 2
Heading Rank: 1

Heading: Action by the Commission.

Text: 61 The Commission asserts that when confronted with transactions such as presented by the case at bar which affect competition, whether by sale or merger, it has held that they are subject to the requirements of Section 15. However, investigation of the cases cited by the Commission in support of this assertion reveals that in each instance the transaction at issue was one of a continuing nature calling for the supervision of the Commission, not a single transaction such as a sale of ships with no restrictions governing their subsequent use. 39 The Commission has not prior to this time asserted jurisdiction over a simple ship sale where the agreement does not limit competition between the parties, either by a merger or by a covenant not to compete. 40 The Commission's silence in this respect for over fifty years indicates that even in the view of the FMC, at least until the present, Section 15 does not provide for FMC jurisdiction over a sale of ships, absent either a provision limiting competition among the parties or a provision of some other type requiring continuing supervision. 62 The type of agreements which the FMC has approved is indicated by the following: 63 Any agreement on which the Commission stamps it [sic] approbation is specifically exempted from the antitrust laws under the act. . . . As of the time of the subcommittee's hearings [1962], there were in effect and approved by the Board [now the Commission] under section 15 roughly 129 conference agreements of one sort or another and some 400 related agreements dealing with transshipment of cargo, providing for joint service and joint sailing relationships, the pooling of cargo, etc. There had also been approved by the Board approximately 15 interconference agreements (not including agreements providing merely for joint administration of two or more conferences); 29 terminal agreements; 100 agreements between freight forwarders; and a relatively small number of miscellaneous agreements. 41 64 These are the type agreements which fall within the seven categories of Section 15 and which we would expect to find as the grist for the FMC mill. 65 We recognize that there is a certain apparent inconsistency (more apparent than real) in holding that the parties are not required to file with the Commission and the Commission is not required to approve or disapprove a simple contract for the sale of ships and all assets, and yet a similar contract coupled with an agreement not to compete, which may involve more complicated antitrust issues than the more simple sale contract, is required to be filed and the Commission may have jurisdiction to pass on all questions, including antitrust issues. The explanation lies in (1) the wording of Section 15, (2) its legislative history, (3) the fact that the degree of antitrust complexity is not what determines the Commission's jurisdiction, and (4) perhaps in a caveat. 66 As for (1), the wording of Section 15, a simple sale of ships and assets, nothing more, is just not covered by any of the seven categories of agreements listed in Section 15. As for (2), the legislative history, the Alexander Report and all the background of the Shipping Act of 1916 show that a simple ship sale, even of all ships and assets, was not the type contract which was to be filed with and regulated by the Commission. The Alexander Report and the Congress prescribed two remedies for what ailed the shipping industry: compel the public filing of all noncompetitive agreements; and let a government agency approve or disapprove initially, then observe and supervise the continuing effect of the agreements. A ship sale is necessarily recorded to pass title and thus comes to public notice without being filed with the Commission; once the sale is made, there is a completely executed contract, over which there is no purpose in requiring Commission supervision. Thus it is not (3), the complexity of the antitrust issues involved, which determines if the FMC has jurisdiction. The FMC has or does not have jurisdiction depending on its statutory grant, and this was largely done by Congress on the basis of its recognition of industry needs and the helpfulness of government regulation. We have construed the FMC jurisdiction in relation to the antitrust laws, and done so above on the well-established principle that the normal administration of the antitrust laws should apply unless the statutory grant in derogation thereof is clear. Now for (4), the caveat: of the Commission's own decisions exercising authority to pass on antitrust questions after the agreements had been filed with the FMC, only two have ever been challenged in court. 42 And in these two instances, the courts reached opposite conclusions. To be accurate, then, administrative practice with respect to ship sales plus other continuing elements offers no support one way or the other. 67