Pacific Coast European Conference and Members Thereof v. United States of America and Federal Maritime Commission, Latin America/pacific Coast Steamship Conference v. Federal Maritime Commission and United States of America, Pacific Coast River Plate Brazil Conference and Its Member Lines v. United States of America and Federal Maritime Commission

350 F.2d 197
CourtCourt of Appeals for the Ninth Circuit
DecidedApril 30, 1965
Docket19237-19239
StatusPublished
Cited by1 cases

This text of 350 F.2d 197 (Pacific Coast European Conference and Members Thereof v. United States of America and Federal Maritime Commission, Latin America/pacific Coast Steamship Conference v. Federal Maritime Commission and United States of America, Pacific Coast River Plate Brazil Conference and Its Member Lines v. United States of America and Federal Maritime Commission) 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
Pacific Coast European Conference and Members Thereof v. United States of America and Federal Maritime Commission, Latin America/pacific Coast Steamship Conference v. Federal Maritime Commission and United States of America, Pacific Coast River Plate Brazil Conference and Its Member Lines v. United States of America and Federal Maritime Commission, 350 F.2d 197 (9th Cir. 1965).

Opinion

350 F.2d 197

PACIFIC COAST EUROPEAN CONFERENCE and Members Thereof, Petitioners,
v.
UNITED STATES of America and Federal Maritime Commission,
Respondents.
LATIN AMERICA/PACIFIC COAST STEAMSHIP CONFERENCE, Petitioners,
v.
FEDERAL MARITIME COMMISSION and United States of America,
Respondents.
PACIFIC COAST RIVER PLATE BRAZIL CONFERENCE and Its Member
Lines, Petitioners,
v.
UNITED STATES of America and Federal Maritime Commission, Respondents.

Nos. 19237-19239.

United States Court of Appeals Ninth Circuit.

Feb. 3, 1965, Rehearing Denied April 30, 1965.

Leonard G. James, Robert L. Harmon, F. Conger Fawcett, Graham, James & Rolph, San Francisco, Cal., for petitioners.

James L. Pimper, Gen. Counsel, Robert B. Hood, Jr., Federal Maritime Commission, Wm. H. Orrick, Jr., Asst. Atty. Gen., Irwin A. Seibel, Atty., Dept. of Justice, Washington, D.C., for respondents.

Jerome H. Heckman, Robt. R. Tiernan, Keller & Heckman, Washington, D.C., for Dow Chem. Co. and Dow Chem. Intl., SA, intervenors.

Before HAMLEY, MERRILL and BROWNING, Circuit Judges.

MERRILL, Circuit Judge.

The orders here under review1 are two2 of twenty-two substantially similar orders issued by the Federal Maritime Commission pursuant to its report entitled The Dual Rate Cases.

The orders are here attacked as in excess of the Commission's authority as bestowed by 14b of the Shipping Act of 1916, as amended 46 U.S.C. 813a (Supp. V, 1964)3 (later discussed), and contrary to the intent of that section; and, through lack of notice and hearing, as in violation of the Administrative Procedure Act, 60 Stat. 237 (1946), 5 U.S.C. 1001-1011 (1958).

Petitioners are three of some sixty steamship conferences affected by The Dual Rate Cases and orders entered pursuant to that report. These conferences are rate-fixing associations of carriers, all of whom are engaged in the waterborne commerce of the United States and whose association is permitted by 15 of the Shipping Act of 1916, as amended 46 U.S.C. 814 (Supp. V, 1964), subject to approval of their agreements of association by the Federal Maritime Commission.

These proceedings involve those provisions of the several agreements of association which permit the fixing of 'dual rates': the granting by a conference of preferential rates to shippers who have agreed with the conference to patronize it exclusively.

Prior to the enactment of the legislation with which we are here concerned the lawfulness of dual rate contracts had long been questioned as contrary to established antitrust policy. In 1958 the Supreme Court in Federal Maritime Board v. Isbrandtsen Co., 356 U.S. 481, 78 S.Ct. 851, 2 L.Ed.2d 926 (1958), had held such a contract to be in violation of 14 Third of the Shipping Act of 1916, 39 Stat. 733 (1916), and had thus cast doubt on the validity of such arrangements. Congress sought to clarify and remedy the situation. After three years of study Public Law 87-346, 75 Stat. 762 (1961), was enacted October 3, 1961. Its declared purpose was '* * * to authorize ocean common carriers and conferences thereof serving the foreign commerce of the United States to enter into effective and fair dual rate contracts with shippers and consignees * * *.' By 3, interim validity of existing dual rate agreements was provided.

The meat of the Act was in what has become 14b of the Shipping Act of 1916, as amended, 75 Stat. 762 (1961), 46 U.S.C. 813a (Supp. V, 1964), which provides that the Federal Maritime Commission shall permit dual rate agreements,'* * * unless the Commission finds that the contract * * * will be detrimental to the commerce of the United States or contrary to the public interest, or unjustly discriminatory or unfair as between shippers, exporters, importers, or ports, or between exporters from the United States and their foreign competitors.'

The authority of the Commission to permit such contracts was limited by requiring that the contracts in eight specified respects meet the congressional judgment as to what they should include. Listed as specification Nine was the requirement that a contract shall contain '* * * such other provisions not inconsistent consistent herewith as the Commission shall require or permit.' Thus was imposed upon the Commission the task of reviewing and revising all agreements under which the conferences were operating with respect to dual rates.

The provisions for interim validity of existing dual rates contracts set forth a schedule for bringing those contracts into line with 14b's requirements. The conferences, within six months, were to file with the Commission their proposals as to how their existing contracts should be amended to meet the new requirements. Thereafter the existing contracts as so amended should be valid for a further period of one year, during which period 'the Commission shall approve, disapprove, cancel or modify all such agreements and amendments in accordance with the provisions of this Act.' By subsequent enactment the time allowed the Commission (and the period of interim validity) was extended to April 3, 1964, 77 Stat. 5 (1963).

These petitioners duly submitted their proposed amendments to the Commission before expiration of the six-month period specified.

On March 21, 1962, the Commission gave notice by publication in the Federal Register, 27 Fed.Reg. 2647 (1962), that pursuant to the provisions of the Shipping Act it was considering the promulgation of certain rules and regulations governing the use of contract rate systems as authorized by 14b.

On January 3, 1963, the Commission published in the Federal Register its 'Notice of Proposed Final Rules and Uniform Agreement.' Reciting its earlier notice the Commission stated:

'Having given due consideration to the comments of interested persons filed in response to said notice the Federal Maritime Commission hereby gives notice that it is considering the promulgation of final rules in this matter. These proposed final rules are as follows:' 28 Fed.Reg. 74 (1963).

There followed a proposed uniform contract for all conferences.

A storm of protest arose from the conferences over this proposed resort to a uniform contract. The conferences contended that the Commission's function under 14b was to conduct individual hearings on the amendments as proposed by the individual conferences to determine whether those amendments conformed to the requirements of that section.

The Commission acceded to conference demands.

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