Anglo Canadian Shipping Company, Ltd. v. United States of America and Federal Maritime Board

264 F.2d 405, 1959 U.S. App. LEXIS 5130, 1961 A.M.C. 52
CourtCourt of Appeals for the Ninth Circuit
DecidedFebruary 18, 1959
Docket15241_1
StatusPublished
Cited by5 cases

This text of 264 F.2d 405 (Anglo Canadian Shipping Company, Ltd. v. United States of America and Federal Maritime Board) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Anglo Canadian Shipping Company, Ltd. v. United States of America and Federal Maritime Board, 264 F.2d 405, 1959 U.S. App. LEXIS 5130, 1961 A.M.C. 52 (9th Cir. 1959).

Opinions

POPE, Circuit Judge.

This is a proceeding upon a petition seeking review of an order of the Federal Maritime Board.1 The order here in question was entered June 29, 1956, in a proceeding entitled Mitsui Steamship Co., Ltd. v. Anglo Canadian Shipping Co., Ltd., et al. The respondents there, who are the petitioners here, are a group of 24 common carrier steamship lines who had formed a voluntary association or conference known as the Pacific Coast European Conference. The member carriers operated in the trade from the Pacific Coast of the United States and Canada to Europe. The Conference was established pursuant to an organic agreement known as “Conference Agreement No. 5200.” This organic or basic agreement was initially approved on May 26, 1937, and copies filed with the Board pursuant to § 15 of the Shipping Act (46 U.S.C.A. § 814).

The controversy here presented arises out of a form of agreement between the Conference carriers and certain signatory shippers referred to in the record as the Conference’s exclusive patronage contract or shippers’ rate agreement. Through the use of this agreement the Conference implements an exclusive patronage contract/non-contract dual rate system whereby a shipper who agrees to make all his shipments in this trade by Conference carriers receives a lower freight rate than shippers who do not sign such an exclusive patronage contract. The agreement covers all export shipments of the shipper to European countries mentioned moving via any Pacific Coast port of the United States or Canada. It provides that all such shipments are required to be tendered to the Conference carriers; and in case of shipment in violation of this provision, the shipper is required to pay the Conference “liquidated damages” calculated in a manner specified in the agreement; and more than one violation in a period of 12 months may result in a cancellation of the contract by the Conference.

Prior to 1953 the Conference had no competition in this trade from outside or independent lines, but in September, 1953, Mitsui, a Japanese common carrier, began hauling merchandise between Pacific coast ports of the United States and ports of the United Kingdom and continental Europe. On October 1, 1954, Mitsui filed a complaint before the Board against the petitioners, as members of the Conference, alleging that the respondents had created and established an exclusive patronage contract/non-contract dual rate system under which signatory shippers agreed to patronize exclusively the vessels of Conference members and who would be charged a rate lower than would similar shippers who refused to sign those contracts and who patronized Mitsui’s vessels.

The complaint alleges that consignees and buyers of goods purchased in the United States on an F.O.B. or F.A.S. basis, and who are not signatories to the exclusive patronage contract, desired to designate the vessels on which their goods are to be shipped and to ship by Mitsui’s vessels; that the Conference members “by the use of unfair, coercive, discriminatory and illegal practices”, are coercing such consignees to ship exclusively on Conference vessels with resultant harm and damage to the complainant Mitsui; that the practices complained of were in violation of §§ 14, 15, 16 and 17 of the Shipping Act.

The respondents joined issue by answer and Public Counsel2 asked and was [408]*408granted leave to intervene in the proceeding in support of the complaint. Hearing was had before an examiner who found and recommended a decision that the respondents had not coerced foreign buyers and consignees to ship goods purchased by them in the United States exclusively on Conference vessels, and had not thus deprived these buyers and consignees of their right to ship on complainant’s vessels, and that the complaint be dismissed.

The Board, after hearing argument on the exceptions to the recommended decision proceeded to make its own findings and report. That report, while reviewing at some length the testimony of witnesses who testified in support of complainant and of respondents, was essentially devoted to a discussion of the terms of the shippers’ rate agreement as it applied to shipments in the trade of goods sold on F.O.B., F.A.S., C.I.F. or C. & F., basis.3

After an analysis of the agreement and an extended discussion of the rules of law relating to the question when title passes in F.O.B. or F.A.S. transactions, and a discussion of the use of these terms in foreign trade transactions, the Board found that F.O.B. and F.A.S. shipments are shipments of the foreign buyer and not of the signatory seller, (with certain exceptions not here relevant), and hence that F.O.B. and F.A.S. transactions, which are shipments of the buyer, are not covered by the shippers’ rate agreement. This, the Board held, was the meaning of the agreement as it was initially approved by the Board.4

The Board found that after Mitsui entered the trade, and during 1954, the Conference notified ten signatories to this shippers’ rate agreement that the Conference had information indicating shipment of cargoes via Mitsui in violation of that agreement; that not only then but generally the Conference was taking the position that its shippers’ rate agreement applied to all shipments regardless of the terms of sale; and that if a foreign buyer insisted that under the terms of an F.O.B. or F.A.S. sale he had the right to direct the routing via a non-conference vessel, the seller must refuse to make the sale.5

The Board found it unnecessary to consider whether this Conference interpretation of the shippers’ rate agreement was detrimental to commerce of the United States or whether such an interpretation [409]*409should be approved or disapproved.6 It stated that it could not find that the Conference’s interpretation had resulted in violation of §§ 14, 16 or 17 of the Act, and that no injury to any exporter had been shown to have resulted from Conference termination of the exporter’s right to contract rates because a shipment of the exporter had moved via non-conference vessel under F.O.B. or F.A.S. terms; that there was no evidence of any actual loss by specific discrimination against Mitsui; and that there was no evidence that any foreign consignee had suffered any loss or injury; or that unjust or discriminatory rates had been charged.

Notwithstanding all this, the Board proceeded to find that the Conference’s interpretation of the shippers’ rate agreement, as above described, was a new Conference interpretation or a modification of an approved agreement which had not been approved by the Board, and since that interpretation had been “effectuated prior to such approval in violation of § 15”, the respondents were ordered to cease and desist from effectuating any interpretation of the shippers’ rate agreement inconsistent with the Board’s interpretation set forth in the report.

The examiner’s report was dated October 18, 1955. On December 21, 1955, Mitsui wrote the Board advising that the Conference had adopted a resolution that Mitsui be admitted to membership in the Conference, effective February 1, 1956, “upon receipt by the Conference office of satisfactory information that Mitsui has withdrawn from pending litigation in which its position is opposed to that of the Conference,” and that it withdrew from the litigation before the Board. Mitsui was then advised that it must file an application for withdrawal with proper reasons therefor.

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264 F.2d 405, 1959 U.S. App. LEXIS 5130, 1961 A.M.C. 52, Counsel Stack Legal Research, https://law.counselstack.com/opinion/anglo-canadian-shipping-company-ltd-v-united-states-of-america-and-ca9-1959.