Document: 356 U.S. 481 78 S.Ct. 851 2 L.Ed.2d 926 FEDERAL MARITIME BOARD, Petitioner,v.ISBRANDTSEN COMPANY, Inc., United States of America and Secretary Agriculture. JAPAN-ATLANTIC AND GULF FREIGHT CONFERENCE; Mitsui Steamship Co., Ltd., et al. v. UNITED STATES America, Federal Maritime Board, Isbrandtsen Company, Ezra Taft Benson, Nos. 73 74. Argued Dec. 11, 1957. Decided May 19, 1958. Mr. Warner W. Gardner, Washington, D.C., for the board. Elkan Turk, New York City, petitioners Japan-Atlantic Gulf Freight Conference others. John J. O'Connor, respondent Inc. Philip Elman, respondents Justice BRENNAN delivered opinion Court. 1 The filed a petition in Court Appeals District Columbia Circuit to review, under 5 U.S.C. § 1034, U.S.C.A. an order Board1 approving rate system proposed by (the Conference).2 Under shipper would pay less than regular freight rates same service if he signs exclusive-patronage contract with Conference. Contract be set at levels 9 1/2 percent below noncontract rates. Appeals3 aside Board's on ground that this dual was illegal per se 14 Shipping Act, 1916, 39 Stat. 733, as amended, 46 812 Third, Third.4 We granted certiorari. 353 908, 77 664, 662. is voluntary association 17 common carriers water serving inbound trade from Japan, Korea, Okinawa ports Atlantic Coasts. Five are American lines, eight Japanese, four other nationalities. presently operates Board-approved Agreement made 1934. Prior World War II, had no direct liner competition little tramp competition. 3 After war, entered sole non-Conference line maintaining berth trade. From 1947 early 1949, isbrandtsen operated Japan Coast via Suez Canal. Since 1949 has approximately fortnightly Panama Canal part its Eastbound, Round-the-World Service.5 4 Although membership open any carrier regularly operating trade, refused join. Isbrandtsen's practice, between March 12, 1953, maintain 10 corresponding general understanding shippers underquoted percent. This practice undercutting during years 1950, 1951, 1952, captured 30 total cargo although provided only 11 sailings.6 outbound tonnage exceeds tonnage, overtonnaged, both vessels have substantial unused space after loading cargoes Japan. Total sailings rose 109 more 300 1953. (Cf. Note 6, supra.) re-entry Japanese lines 1951 greatly contributed excess tonnage. For first 6 months carried 15 percent, 49 66 respectively, trade's cargo. flag including but excluding two others, 53 34 21 respectively. When, late announced plan increase three or month, foresaw further participation which, because nationalistic preference shippers, probably expense non-Japanese lines. To meet outside attempted, November 10-percent reduction rates, answered 7 On December 24, dual-rate Board required General Order 76, CFR 236.3, which permitted changes become effective days unless postponed own motion protest interested persons. Protests were Department Justice. Agriculture intervened commercial opposed proposal. January 21, ordered hearing protests refused, pending determination, suspend operations system. Isbrandtsen, therefore, stay insofar it authorized institute dualrate court February 3, stayed 23, 1953.7 response allow each fix At meeting voted major commodities moving action primarily directed competition; found 'it hoped war lead joining institution system.' succeeding dates spring year, opened most items In resulting level dropped about 80 later 40 pre-March 12 some instances, fell handling costs. attempted keep competitive basis but, when pegging minimum did not improve position, July 50 date, Meanwhile proceeded issued report 14, 1955, followed 1956, orders system.8 question our decision whether correctly orders. 8 It long been almost universal foreign steamship engaging ocean commerce operate conference arrangements agreements. least 1913 recognized such agreements might run counter policy anti-trust laws; several cases against domestic alleged violations Sherman §§ 1—7, note. House Committee Merchant Marine Fisheries 62d Congress, committee Representative Alexander Chairman, undertook exhaustive inquiry into practices shipping conferences. work forth volumes hearings,9 volume diplomatic consular reports, fourth containing Committee's report, known Report.10 Contemporaneously British conducted Royal Commission Rings. Commission's available considered formulating recommended legislation. See Hearings, 369. Both inquiries brought light number predatory conferences designed give monopolies upon particular trades forestalling driving out all outsiders attempting compete. crudest form fighting ship. select suitable steamer among sail non-member vessel, reducing low enough capture outsider. expenses losses lower shared members conference. competitor means caused exhaust resources withdraw More sophisticated depended tie shipper. widely used tie, effective, deferred rebates. signed exclusively patronize steamers, so term, designated period thereafter, rebate certain percentage his payments him end latter period. way, constant obligation patronage suffer loss rebate, often amounted considerable sum. But also evidence practices. Shippers who patronized competitors denied accommodations future shipments even full freight, discriminated matter lighterage services. Outside met contracts, contracts large shipments, railroads giving docks, delivering through vessels. Report, 287—293. flat prohibition combinations restoration unretricted public interest depriving desirable advantages honestly fairly conducted. mentioned 'greater regularity frequency service, stability uniformity economy cost better distribution sailings, maintenance European markets parity, equal treatment elimination secret underhanded methods discrimination.' Id., 416. believed these could preserved 'only permitting given cooperate pooling arrangement Government supervision control,' ibid., 'that disadvantages abuses connected now inherent, can eliminated government control; control recommends preserving exporters importers enumerated, preventing complained of.' 418. 13 passing Act 728, Congress basic recommendations Committee.11 does forbid requires covering subjects submitted approval.12 No power Board. Subject familiar limitations, vested approve unjustly unfairly discriminatory violation 16 otherwise Act. Approved exempted antitrust laws. must emphasized freedom allowed agree terms subject approval limited regulating themselves. flatly prohibited purpose effect stifling independent carriers. Thus deferred-rebate (§ First) ship Second) specifically outlawed. Similarly, Third prohibits another 1913: '(r)etaliate refusing * *'; prohibition, moreover, enlarged condemn retaliation taken 'because carrier' 'has complaint charging unfair treatment, reason.' (Emphasis added.) addition proscribed abuses, previously noted, aware devices—some used, others contrived—might employed achieve results. Therefore, coordinate clauses aimed specific practices, category, couched language, added: 'resort discriminating *.' context clause construed constituting catchall meant prohibit devices enumerated similar those barred First, Second, 'retaliate' Third. reason to' added statute stifle revealed Report. information contained Report communication organization, outlawing adopt accomplish result. ties justified should tolerated achieving strong 369—381. However, Committee, adopting proposals, reached different conclusion. unwilling tolerate involving struck balance allowing muster 15, 16, limiting while destroy carriers.13 Ties unlawful. Whether instance determine. 'a necessary measure offset non-conference competition' 'to obtain greater trade,'14 follows methods' argues, however, use outlaw them therefore implicitly approved them. called attention bear resemblance here question. Those joint described follows: 18 'Such account agreement, carrying proportion tendered time time. contracting furnish steamers intervals agrees confine announce quantity shipped ample proper supply specified tariff, generally pursue small i.e. willing times terms.' 290. 19 These very ordinary requirements contracts. They obligated reasonably period, sometimes year. thus assured paramount importance him. Moreover, breach subjected damages. 20 By contrast, require carry shipper's 'so far their services available'; 'subject reasonable increase' within calendar plus unexpired portion month notice given; '(e)ach Member responsible Agreement'; agreement terminable either party months' notice; breach, 'the Shipper shall liquidated damages Carriers fifty centum (50%) amount paid shipment vessel currently effect.' Until payment reduced rate, violates once months, suffers cancellation denial until full. there guarantee liquidated-damages provision bears feature particularly objected outlawed Certainly coercive force having sum firmly prospect losing rebate. anomalous strike down rebates fail objectionable effect. Events proved accuracy prediction system, here, specially urged construction 'produces unqualified discrimination reason' converts rest surplusage. argument overlooks congressional That purpose, we said, elsewhere section characterization 'unjustly discriminatory' prejudicial' sections (§§ 17) imply intent latitude dealt sections, take gloss section; is, they confined competition.15 Petitioners argue foreclosed Court's decisions Navigation Co. Cunard S.S. 284 474, 52 247, 76 L.Ed. 408, Far East States, 342 570, 72 492, 96 576. A reading opinions immediately refutes suggestion issue expressly decided holding fully consistent disposition cases. petitioner alleging conspired tariff respondents.' U.S., page 479, 248. differentials unrelated wholly arbitrary unreasonable 'for coercing deal refrain petitioner, exclude entirely Great Britain.' 480, S.Ct., An injunction sought Clayton Acts, note, seq. held questions raised primary jurisdiction courts entertain suit matter. similarly precluded bringing proceedings 22 that, earlier thought way makes authorize, pass claims. case said: 23 'Whether contravene act may depend consideration economic relations, facts peculiar business history, conditions respect countries, relevant circumstances, unfamiliar judicial tribunal, well understood administrative body especially trained experienced intricate technical usages trade; body, consequently, able deal.' 485, 250. 24 case: 25 'The (in Cunard) applied principle, established, raising issues fact conventional experience judges requiring exercise discretion, agencies created passed over. though appraised specialized competence serve premise legal consequences judicially defined. Uniformity consistency regulation entrusted agency secured, functions review judiciary rationally exercised, preliminary resort ascertaining interpreting circumstances underlying equipped specialization, insight gained experience, flexible procedure.' 470, 574—575, 494. 26 clear cases, hear instance, signify left free disapprove attack. Rather, kinds litigation practical considerations dictate division preliminary, comprehensive investigation facts, analyzes them, applies statutory scheme construed. Compare Denver Union Stock Yard Producers Livestock Marketing Ass'n, 282, 738. courts, retaining final authority expound statute, avail themselves aid implicit agency's superiority gathering marshaling meaningful pattern. Cases decided, nor law appropriately understood, apart informed particularized factual controversy litigation. 27 deferral what come ultimate question—the Third—rather properly involved. jurisdiction, short, device prepare course, precise determination scope meaning circumstances. would, necessarily, involve comparatively abstract exposition. 28 consideration, compelling present holding. Since, hold, strikes systems where devices, then findings system's essential validity statute. neither assistance base validity. conclude, cases.16 29 Finally, construe overturn interpretation. '(T)he rulings, interpretations (particular agency) *, controlling authority, do constitute judgment litigants guidance. weight will thoroughness evident reasoning, pronouncements, factors persuade, lacking control.' Skidmore Swift & 323 134, 140, 65 161, 164, 89 124. confronted whose administration shifted one another, predecessors iniform positions regard Third.17 F.Supp. 883, 889—891. view instituted curtailing competition, becoming need various treatments FRANKFURTER, whom BURTON joins, dis senting. 31 today holds international tied exclusive competition—howsoever counteracting cutthroat 19161 cannot pursuant outlaws prevailed half century,2 hundred-odd jurisdiction,3 decrease probability ruinous wars industry.4 doing so, weighty rendering meaningless prior respected usual limits 32 involved typical loose associations 'conferences' effectuate systems. Marx, International Cartels, 207—210. forward 'trade' route bottoms 1). return, members, available,' goods charged noncontracting shippers; 2). adequate provide (who ordinarily members' goods) needed space, nonconference 4). If contract, entitled pays 5). twelve-month canceled, new (ibid.). Either cancel 9), dispute arising arbitration 10). 33 Such differences exist wide tranportation irrelevant judged test laid Court: competition? Of course integral And doubt today's result clouded reliance 'findings' 'consider(s) inauguration trade.' (4 F.M.B. 706, 736, 1956 A.M.C. 414, 450). 35 36 solution overtonnaging problem mitigate conference's F.M.B., 737, A.M.C., 451.) 37 statements nothing recognition dustinguishing situation before us concluding 'stifle' 38 While imposed enterprise itself governing principle limits, embodied laws, inapplicable to, destructive national in, transportation industry. obviously completely regulate compete (not mention compete). prevailing characteristics industry, became apparent t whole, industries deemed inadmissible. alternative, concluded, put unregulated seriously injure firms—both shippers—if not, indeed, business. development self-protective measures collective condemnation Acts. appreciate 1916 attempt political objections sweeping industry concept, begot recalled. second Nineteenth Century saw tremendous rise steamship. Unfor tunately, increased much rapidly demand it. inevitable cut-throat owners. turn mergers ownership concerted efforts individual owners limit pursued led demands correction, governments century began attention. series investigations parts Empire appointment 1906 Rings, rendered 1909. See, generally, supra, 45—50; see Johnson Huebner, Principles Ocean Transportation, 263—302. 1911 enjoin Prince Line, 220 F.230; Hamburg-American 216 F. 971.5 resolutions gave historic 1912—1913, H.Res. 425 587, Cong., 2d Sess., 48 Cong.Rec. 2835—2836, 9159 9160, manifest concern over thorough detailed. chairmanship Joshua Missouri, elicited great quantities data carriers, organizations Departments State Justice, copies many extensive hearings January-March, 1913. Fully providing see, e.g., Hearings Investigation Combinations, 248, 254, 262—263; id., 246, 263. 41 1914 report. summarizing discussed, heading 'Meeting conference,' systems, ships, railroads, types preferential following: 42 '(a) Joint whole.—Such Agreements Affiliations Foreign Domestic Trade, H.R. Doc. No. 805, 63d Sess. There amply alive subsequently discussing (id., 304—307) 'Disadvantages Conferences Agreements, Now Conducted,' make reference such, extensively disapprovingly, it, rebates, airing grievances. Nor strictures survey witnesses corrective legislation 307—314), noted favor prohibitions refusal 'he line, unjust reasons.' 313. 43 making 415—421), universally enter (among others) 'meeting lines.' 415. choose subjection supervision. 44 'It length ordering existing terminated. entire history shows happy medium peace engage Most numerous discussed foregoing outcome wars, represent truce contending arrangements, said invite leading monopoly exposure disastrous Among complaints relating unfairness methods—such threats refuse accommodations—used 417. concluded uprooted. Its curbed control. 45 file regulatory Interstate Commerce Commission) being empowered 'discriminating character, detrimental interests States' 420); investigate concerning 'unreasonably high, character shippers' (ibid.), '* 'fighting ships' export import States. retaliating available, resorting discrimination, 421. cautious generality last recommendation (and, surely, legislative based it) doubtless reflects feeling refrained describing forms reasons fear retaliated disclosures. 5. 47 1914, introduced bill, 17328, incorporating recommendations. bill provided, things, variety agreements, modify exporters, importers, ports, competitors, find detriment Act,' exempt laws 3). Where charges, classifications, regulations 'unjust unreasonable,' determine enforce just 7). 2) misdemeanor (punishable fine up $25,000) ship, or: 'Third. Retaliate refusing, threatening refuse, methods, As 17328 reintroduced 64th 1915 450. Shortly thereafter 10500, establish encouraging, developing, creating naval auxiliary reserve merchant marine territories possessions, purposes.' purchase charter leased private concerns peacetime wartime; 9, 10) Approximately later, April 14337, adapted (H.R. 450) framework 10500). substituting provisions language bill. 1st hearings, discussion 'retaliation' bill; concentrated controversial aspects, 51 close 15455, substitution detailed made, Alexander. 'Fourth' ships retaliation: circumstances; standard ('discriminating unfair') empowering unfair.' promptly reported extenso H.R.Rep. 659, 27—31. debate centered lease provisions. Senate, concerned provisions, floor debates. Once again, investigation. S.Rep. 689, 7—11. With amendment portions 15455 Senate September 1916. 728. enacted, then, following regulation. establishing (inter alia) cooperative arrangements. finds disapprove, modify; approve, 15). 'rate, fare, charge, classification, regulation, practice' unreasonable, 18). exception qualification upon, scheme, Board: reason. 54 treat ways; punishable $25,000 14).6 55 takes, background, purpose. discriminations inherent cooperation competitors. alternative and, particularly, working serious advantage conclusion domesticated exposed policed by, continuing process Only flagrant prohibited. pervading statement Burke, majority member bills: 56 'Your due deliberation valuable prohibiting grossest vicious *. 57 your established instances elements usefulness prominent ill best transportation.' 8095. 58 important mind relation enactment was, Government. surveillance pattern continue confrom affirmative high underlies condition placed railroads. outlawry Trans-Missouri 166 290, 540, 1007; Traffic 171 505, 25, 259. Not 1920 rail excepted 407, Transportation 1920, 456, amending 379, 380, transportation, beginning chose rejected court-determined preferred rely expert agency. 59 background consider imposes heavy conduct criminal strictly Yates 354 298, 304—305, 1064, 1069, 356. deserves narrow undoubted complex isolated piece writing reticulated included. demonstrates, points intention exclusion. 60 applicable word Appeals, initiation retaliation, sustained. framers conduct, notably accommodations, done things publicly filing concept takes after, of, latter. 'getting even'; parties simply guide depends arises past conduct. violence English language—and certainly duty context—to characterize contractual 'retaliation.' struggle combined prefer out—yes; reprisal—no. 61 'retaliation,' violate seems retaliation. rather inartfully drawn, ambiguities resolved narrower construction. extraordinarily degree aspects Bill, contemplated legislation, took substantially enacted. doubt, application recommendation; since purposefulness change, alternation regarded effected decisive change substance provision. Attaching drastic significance wording supporting contradicted philosophy Reports Houses quoted support without qualification. debate, briefly 'forbids complain *' 8080. Surely, suggest wished aware, everything respond solely problem, stretched embrace thereby undercut rationale 62 catchall. words, abstracted provision, these: 'No shall, directly indirectly remainder redundant inconsistent whole philosophy, say words indicate intended bury broad third four-part penal section. above, probable explanation cover afraid bring legislators' 63 merit 'deferred rebates' unlawful, prohibited—should unlawful mode approach utilization salesmanship offers something 'just good.' bad' principal precisely deferred. outlining '(b)y deferring six effectively merchants group sucessive periods.' 307. recited contention place position continual dependence results system' (ibid.); unlikely Swayne Hoyt, 297, 307, note 478, 482, 81 adopted point necessarily rebates,' 'continual dependence' forcing forfeit accumulated previous period.' 64 Twice accepts. render enforced combination essentially like Court, whereby carriage. decisions, 1932 again 576, 1952 differently constituted claim relief competing conference, case, Congerence immediate applicability 'primary jurisdiction'—that legality adjudicated matters of' (United 248) 'on merits' (Far 573, 493) offend doctrine jurisdiction' Chief achievement author, White, 'had placing vital useful judge.' (257 xxv.) empty ritual. virtue shipowner claimed hurt operation manufacturer analogous competitor. appeal Isbrandtsen. ensuing case. protests, amended Examiner October compiled record 4,500 pages testimony 150 exhibits. examiner 13, 1954, remanded supplemental fact; served 17, 1955. Eleven detailed, (as accordance report) unfair, likely elaborate legally meaningless. circumlocution office. function carnival procedural emptiness formal federal court. suit, holds, proceed complete disregard hearing, weighing ruling indifference appropriate law's policy. Surely playfulness prerequisite proceeding mockery interpret utterly wasteful futilities. observance scores futility. denying Courts situations devised purposeless delay sterile conduit denigrate distort movements law. Legal scholars rightly compared equity, endorsed Stone, himself scholar. Morgan, 307 183, 191, 795, 799, 83 1211. realization, respected, needs modern society law-enforcing tribunals courts. discharge normally training freedoms, aspect roles gives exploring realm exclusionary rules weigh expert's allowable inferences wise choice judgment.7 supplant broadly Rule Law. Appeal lies acted bounds, rational reasoned conclusion, ultimately satisfies constitutional requirement process. Within range discretion social policies myriad concrete calling application. reasonable, fair, arangements justified, fall afoul permissible regime extent supersedes laws—these merits. 67 Contrariwise, explicit implication uniform competence, function, occasion refer Northern R. Merchants Elevator 259 285, 477, 943 (reaffirmed Western Pacific 352 59, 69, 167, 126); Texas Gulf, C. S.F.R. 270 266, 263, 70 578; Civil Aeronautics Modern Air Transport, Cir., 179 F.2d 622, 624—625; Davis, Administrative Law, 666—668. accurately summarized Montana-Dakota Utilities Northwestern Public Service 341 71 692, 696, 95 912: know purpose.' travesty abuse undergo expensive merely delaying eventually determinations ascertainment sent Such, 68 mean suits plainest possible condemnation. illegality. plaintiffs dula-rate violated Brief Petitioner, pp. 47—56, 408; 22—23 (incorporating 21—45, A/S Ludwig Mowinckels Rederi 950, 623, 706); also, 408 (argument petitioner's counsel). Conference, prevails main dissent. 578—579, 496.8 When squarely presented says little, didactic elloptical. Otherwise few Holmes spoke tersely cryptically, formulated decisions. 69 distinguished facts. initiated eliminate cunard 479—480, Transcript Record, p. anything, closely 4) void, liable 'additional theretofore exceeding twelve preceding date shipment, non-contract .' 18. accumulation potential liability us. provides (i.e., lower, rate) agreement; void single violation. unreasonably actual sustains entitles twice theory wrongly knowledge lying discretion. I overturning well-reasoned proceedings, am reversed. HARLAN, dissenting. Except respect, dissenting FRANKFURTER. think attributes Despite logic flowing lack distinction one, unable read determined, discussion, far-reaching today. Cunard, 483—484, 487, 249—250, 251. merits, dissent FRANKFURTER's opinion. 706. hereinafter referred Board.' (1916 1933); Bureau (1933 1936); (1936 1950). named petition. appearing joined attacking order. Department's brief. leave 99 U.S.App.D.C. 312, 239 933. Section provides: indirectly, passengers property port State, Territory, District, possession country— 'First. Pay allow, combination, understanding, express implied, term rebate' chapter return money carrier, beyond completion paid, if, computed deferment, complied arrangement. 'Second. Use separately conjunction otherwise. ship' excluding, preventing, 'Fourth. Make offered, discriminate (a) facilities, tonnage; (b) landing condition; (c) adjustment settlement 'Any guilty offense.' refrigerated silkrooms, vessels, facilities. comparative carryings indicated table: Average Percentage Cargo (revenue Number tons) sailing Is Calendar brandt year sen Conf. 103 18,099 135,635 153,734 3,016 1,317 88 1950 137 158 120,381 229,829 350,210 5,780 1,678 174 195 93,450 219,343 312,793 4,450 1,261 221 245 98,834 281,308 380,142 4,118 1,273 74 1953—6 months. 153 165 37,308 189,503 226,811 3,109 1,239 84 handed hold approval. 93 293, 211 51. exclusivepatronage delete coverage Proceedings Combinations Resolution Cong. (Hereinafter 'Hearings.') H.R.Doc. 'Report.') 27; 7. passed. reintroduced, 'Every water, person chapter, true copy, or, oral, memorandum, every modification thereof, conform part, fixing fares; receiving special privileges advantages; controlling, regulating, destroying apportioning earnings, losses, traffic; allotting restricting ports; passenger traffic carried; manner exclusive, preferential, 'agreement' includes understandings, conferences, cancel, modifications, cancellations. modification, lawful Antitrust Acts) 814, 814. originally proposed, substituted unfair' untouched estimated lose two-thirds volume. (I)t (is) retain Am.Mar.Cas. 451. partial rule ejusdem generis related retaliatory ban urges enough, hand's breadth farther' relating—and limiting—the falls charges believe constructions reconciled plan. assumed settling sub silentio obvious difficulty plainly clearly expressed disposition. Petitioners' Ltd. misplaced. upheld 'undue advantage' Because sustained finding supported reach contentions Compare, Eden Mining Bluefields Fruit U.S.S.B. 41, Routing Restrictions, U.S.M.C. 220, 226—227, W.T. Rawleigh Stoomvart, 812, 812. 262—263 Respondent stated (at par. 10b) '(o)f hundred seventeen organized sixty-two employ 207. 739—740, 451, 454. appeal, decrees obtained reversed, 466, 212, 387; Asiatic 242 537, 233, dismissed score mootness I. worth noting Fourth speaks 'unjust' quite meaning. condemning provisions; relied prevent unwarranted found. adopted, kind toward directing identified shippers), irrespective practiced. '(The) origin (between preclude wholesale transplantation procedure, trial, evolved Thus, bodies Commission, mould cast recent agencies, 'should too narrowly constrained admissibility proof,' Baird, 194 44, 563, 568, 569, 860, fashion procedure capable multitudinous duties. England Divisions Case, 261 184, 270, 605. sure, prescribe fundamentals fair play. afforded opportunity assimilate relationship upper purposes movement traditional scope, however far-reaching, Unless differentiations observed, strary province distorting lenses doctrine.' Communications Comm. Pottsville Broadcasting 309 143—144, 437, 441—442, 656. terms: approved. clear. (W)hatever face, undoubtedly possess adjudge advance usurp authority. nature traffic, impossible apparently bad might, attending stand modifications.' dismissal complaining has, instant

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