Carnation Company v. Pacific Westbound Conference

PETITIONER:Carnation Company
RESPONDENT:Pacific Westbound Conference
LOCATION:Antinook Mill

DOCKET NO.: 20
DECIDED BY: Warren Court (1965-1967)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 383 US 213 (1966)
ARGUED: Nov 08, 1965
DECIDED: Feb 28, 1966

Facts of the case

Question

Audio Transcription for Oral Argument – November 08, 1965 in Carnation Company v. Pacific Westbound Conference

Arthur B. Dunne:

— from West Coast ports to Manila.

It commenced an action in the United States District Court for the Northern District of California, asserting that rates charged to it had been arrived at by an agreement in violation of the Sherman Act and it was suing for treble damages under Section 4 of the Clayton Act.

The defendants in the action were the regular berth carriers from the Pacific Coast, from the Gulf ports, and from the Atlantic Coast ports and an association, Pacific Westbound Conference made up of those carriers operating from the Pacific Coast ports and the Far East Conference made up of carriers operating from the Gulf and Atlantic Coast ports.

Immediately upon the beginning of the action, the carrier-defendants and the two conferences who were made — been made defendants, plus, the Chairman of the Westbound Conference appeared and moved to dismiss the action upon the ground that Shipping Act 1916 had, for the purposes of the action superseded the Clayton Act and the Sherman Act and that the court was without jurisdiction.

The Federal Maritime Commission, the agency charged with the administration of the Shipping Act moved and was granted leave to intervene, filed an answer which did not deny any of the averments of the complaint, but also moved to dismiss upon the ground that the court had no jurisdiction.

The District Court sustained the motions and dismissed the action.

Carnation Company appealed to the Court of Appeals for the Ninth Circuit.

That court affirmed, denied a petition for a re-hearing.

Carnation petitioned this Court to review that decision on certiorari.

That petition was granted, and the case is now here for decision.

Now more particularly as to the facts and the parties; the Westbound Surface Carriers from the Pacific Coast had formed an association, Pacific Westbound Conference under Conference Agreement 57, I believe is the number, filed with the then administrating agency of the Shipping Act and approved by it.

For our purposes, the principal term of that conference agreement is that the conference was made the rate-fixing agency for the carriers operating from the Pacific Coast.

Also sometime before the 1950s, the carriers from the Gulf and Atlantic ports, under a conference agreement filed with the then administrative agency under the Shipping Act, had formed a conference which was the rate-fixing body for those carriers and that conference agreement had been approved.

In 1952, the members of both these conferences, and incidentally these conferences are conferences of carriers which are in competing trades.

The trade from the Gulf and Atlantic ports competes for the trade to the Far East and the Pacific ports.

The members of these two conferences met and eventually entered into an agreement known as “8200,” which is set out in full in the record.

That agreement was filed with the Federal Maritime Board, the predecessor of the present Commission, and in December of 1952 was approved.

Following that approval, the members, well, I should first state that, primarily, that agreement — that the two provisions that are important are the first and second.

They provided for a meeting and organization and, in second, particularly in second, whatever else that agreement may have provided for, it retained to each of the conferences the right of independent action with respect to the fixing of rates.

In the early part of February of 1953, the members of these conferences met at Santa Barbara and organized, and eventually, as a result of that meeting and as a result of — they held annual meetings or further meetings and in 1956, as appears in the opinion of the Federal Maritime Commission, they had arrived at agreements to this effect with respect to the fixing of rates.

Certain bulk cargo was exempted from the arrangement.

Certain other items of freight were placed on what was known as an initiative list for either the Pacific Westbound Conference or the Far East Conference, and that meant that those conferences, for their own members, could fix the rates without concurrence of the other conference for those items which appeared on their initiative list.

It was also determined that items would not be placed upon the initiative list for either conference without the concurrence of the other.

It resulted that from 1956-on, an item could not be put on the initiative list without concurrence of both conferences.

Secondly, the rates for an item which was not on the initiative list could not be fixed by any one of the two rate-making conferences for its own members without the concurrence of the other conference.

Evaporated milk was not on the initiative list.

In 1957, effective as of May 1, 1957, the then existing rates of evaporated milk from Pacific Coast ports to the Far East theretofore properly fixed by Pacific Westbound Conference for its own members was raised by $2.50 a ton.

Later on that year, this petitioner applied to Pacific Westbound Conference to reduce that rate by $2.50 a ton and return it to the rate that it theretofore been fixed.

In February of the next year, Pacific Westbound Conference determined for itself that such a reduction was in order and applied to Far East Conference for concurrence.

Concurrence was denied.

Arthur B. Dunne:

Thereupon, Pacific Westbound Conference withdrew its request and the increased rate remained in effect until 1962.

At a later time, the Federal Maritime Commission undertook an investigation which had, for its purposes, it’s on its own motion, two matters; one, to determine whether this filed Agreement 8200, under which the two conferences were purporting to Act, represented the full agreement of the parties and, secondly, to determine the order being in effect in language of Section 15 of the Shipping Act, whether or not it was of such character that it should remain approved.

Earl Warren:

When was that initiated, Mr. Dunne?

Arthur B. Dunne:

That was in — it was initiated well before this suit.

Earl Warren:

Well before this suit?

Arthur B. Dunne:

Well before this suit, Your Honor, and it was in the course of this suit that — and we alleged this in the complaint, Carnation Company learned the facts which I have just recited and thereupon and before that proceeding before the Commission had been determined, brought this action in December of 1962.

Potter Stewart:

How many of these facts were hitherto secret or not published?

In other words, was the fact of an initiative list, a matter of public knowledge?

Arthur B. Dunne:

No, it was not, Your Honor.

These facts and the Commission so-found at least were unknown to Carnation Company and to the public generally.

Potter Stewart:

Well, I know that the ultimate, and to your point of view, the controlling fact, that is that in order to change the rates you’d have to have the approval of both conferences, as you say was unknown to you.

Arthur B. Dunne:

That’s correct.

Potter Stewart:

But I wonder how much of this other stuff was a matter of their open and disclose tariff system and procedures —

Arthur B. Dunne:

Yes, a very —

Potter Stewart:

Such as the initiative list and the —

Arthur B. Dunne:

The affirmance of the complaint are that these were not known.

Potter Stewart:

None of these facts?

Arthur B. Dunne:

No.

But, Your Honor, I want to be cautious now because you’re asking me something that’s — from an indistinct recollection as to the affirmance of the complaint.

I might make a mistake about it as to just how far the complaint went in stating that these matters were unknown.

Of course, the only purpose of stating that they were unknown was to meet a possible statute of limitations question.

Potter Stewart:

Statute of limitations question.

Arthur B. Dunne:

Yes, Your Honor.

The title plan in this action, and this I think is a matter of some significance in pleading these facts, planted itself squarely upon the proposition that there was an agreement to fix rates which was per se illegal under the Sherman Act.

It did not plant itself on any claim of discrimination.

It did not claim that the rates were unreasonable.

None of the ordinary regulatory questions, which ordinarily arise with respect to rates of carriers, are presented by the complaint.

Now, the question then of course is whether or not in these circumstances, whether a complaint setting a set of facts, as to which it’s never been questioned that it standing alone was a violation of the Sherman Act, and an action under the Clayton Act whether that situation was changed because of the provisions of the Shipping Act 1916, insofar as they deal with foreign commerce.

I emphasize that, if Your Honors please, because in the original Shipping Act of 1916, there was a marked distinction between the regulation of carriers in foreign commerce and those in interstate commerce.

Section 18, having to do with rates applying only to interstate commerce and not as to foreign commerce, and the Shipping Act neither then nor at any other time, as this Court pointed out in its decision in the East Branson case, has conferred upon the agency charged with the policing of the Shipping Act, the power to fix rates.

Byron R. White:

In foreign — in foreign commerce or both?

Arthur B. Dunne:

In foreign commerce only.

Now, the distinction that I have just made was made even more marked in that regard, Your Honor, by the Act of 1938 which applied to interstate carriage by water, the terms of the Inter-Coastal Shipping Act of 1933 which had further regulatory provisions.

And then, in 1940, with the adoption of part 3 of the Interstate Commerce Act, Congress introduced a completely new scheme or regulation with respect to water carriers in interstate commerce, made them subject to the jurisdiction of the Interstate Commerce Commission rather than the Commission administering the Shipping Act.

And it then went into a series of detailed regulations of carriage in interstate commerce paralleling for all practical purposes, the provisions of part 1, dealing with the regulation of carriers by rail within the United States.

Now with that distinction, going back to the Shipping Act of 1916 insofar as the facts of foreign commerce, I think it is fair to say that the statute arising out of a lengthy investigation by Congress, the results of which are summed up in the so-called Alexander Report, Congress undertook in 19 — with the Shipping Act of 1916 to do three things.

It undertook to correct certain specific — rather specific practices, which the investigation had developed, the so-called deferred rebates, use of fighting ships, and discriminatory practices as to shippers in retaliation as to shippers who used bottoms other than conference bottoms.

The second thing that it did was to set up in Section 15, which is the pivotal section of the Act, the real scheme of regulation of carriage by water in foreign commerce.

And the third portion of the Act was to set up the Commission itself or an administrative body provided with powers and provide for certain sanctions including granting of reparations under Section 22, the enforcement of orders other than money orders under Section 29, and the — an action to enforce the claims asserted when a money order was made and not complied with under Section 30.

Now, then going back to what is now the pivotal section and that is Section 15; for practical purposes, Congress adopted, rather than the regulatory scheme where the statute itself undertakes to regulate the activity of carriers as under part 1 of the Interstate Commerce Act, the original Act and part 1, it set up a scheme, under which the industry was to regulate itself by agreements between the carriers, among others these conference agreements.

But the very important thing that it did and this is what was pointed out at some length in the hearings, looking toward the adoption of the Bill, it provided that that method of regulation of the industry could operate only on those agreements represented to and approved by the agency set up to administer the statute.

And then it did one other thing and we think this is the highly important thing, it provided that those agreements, and so presented, and so approved to be accepted from the operation of the antitrust statutes.

Now, it is our position, and this was set out in the complaint, that these agreements of which I have spoken, the agreement to set up the initiative list, the procedures with respect to putting items on the initiative list, and the procedure requiring concurrence before the rate of an item not on the initiative list could be changed, that those supplemental agreements were never presented to the Commission, never filed with it, never approved by it, as to that, there is no question, and by consequence, are not accepted from the operation of the antitrust statutes and to use the language of Mr. Justice Douglas in dissenting in the Far East Conference case, the matters are set at large or to state it a little differently, one of the things, as this Court’s opinion in the East Branson case points out —

William O. Douglas:

May I interrupt at this point?

In other words, these — these rates that you’re talking about are not rates that the Commission could find to be so unreasonably high or low as to be detrimental to the commerce of the United States?

Arthur B. Dunne:

We never raised that question, never suggested that.

There are no facts in our complaint that would warrant an investigation of that question.

We stand —

William O. Douglas:

Is that because they weren’t — they were never on file?

Arthur B. Dunne:

It’s not the rates.

The rates were not — it may have been filed, that, I don’t know.

William O. Douglas:

But that’s what —

Arthur B. Dunne:

It said the agreement —

William O. Douglas:

The agreement —

Arthur B. Dunne:

– Under which they were fixed was never filed and never approved and, therefore under the procedure that Congress set up —

William O. Douglas:

I understand.

Arthur B. Dunne:

– Were not — that agreement, under which they were — was not exempted from the antitrust statutes and, by consequence, for that $2.50 a ton in excess of the only lawfully fixed rate, that is the matter for which we are suing.

William O. Douglas:

Were the rates – the rates under the agreements filed, do you know?

Arthur B. Dunne:

I believe that is the practice to file, but I can’t answer that, and we didn’t set that up, Your Honor.

It was a matter of which we were not concerned.

Arthur B. Dunne:

We were concerned only with the method by which they were fixed, and it was our position the method by which they were fixed would not permit this —

William J. Brennan, Jr.:

Well, is it — to narrow this, Mr. Dunne, not having the supplemental agreements proved the condition upon which the exemption comes into play was not met and therefore, you’re free if you can make out an antitrust law case, bring an antitrust action.

Arthur B. Dunne:

It’s exactly our position, Your Honor, exactly our position.

Byron R. White:

Well, if an agreement is made between two foreign carries or two carriers in foreign commerce on rates, setting rates in so many dollars and cents, and that agreement is filed.

Now, the Commission can either approve the agreement or not and one of the considerations, as Mr. Justice Douglas indicated, is that they might disapprove the agreement because the rates are so high or so low as to be detrimental to commerce of the United States.

Now, that’s a different question than the reasonableness of the rates, isn’t it?

Arthur B. Dunne:

That is a different question, yes.

Byron R. White:

But, nevertheless, the Commission might approve — disapprove an agreement on some factor related to rates?

Arthur B. Dunne:

It might as to practices or otherwise, it might disapprove an agreement.

Byron R. White:

Your position would be exactly the same here, I suppose, if agreements have been filed, the rates have been filed, and the Commission had disapproved them and they had gone ahead and done it anyway?

Arthur B. Dunne:

Except for one thing, and I don’t want to be super technical about this, Your Honor.

With respect to rates in foreign commerce, the Commission has no power to fix rates or determining it.

Byron R. White:

I understand it.

They can’t fix it, but they can disapprove an agreement on a factor related to rates?

Arthur B. Dunne:

Correct, exactly.

We say that an unfiled and unapproved agreement is the same status as a disapproved agreement.

Byron R. White:

They might say — they might say, “We disapprove this agreement, you can’t operate under it because the rates are too high?”

Arthur B. Dunne:

Conceivably, they could.

Conceivably, they could say that this agreement is operated in such way that operation under it is so prejudicial.

Byron R. White:

But the Commission, itself, could have just started proceeding and say “We’re going to investigate rates in foreign commerce?”

Arthur B. Dunne:

And not for the purpose of fixing them as such, no.

Byron R. White:

Yes.

Arthur B. Dunne:

Now, it is our position very shortly that the matter of possible impact to the antitrust statutes, having been drawn to the attention of Congress when it was considering the adoption of the Shipping Act, so that it had this problem of how the antitrust statutes and the Shipping Act were likely to affect each other, interoperate, and so forth.

With that being specifically drawn to its attention, Congress solved that problem and it solved that problem by Section 15 of the Shipping Act by providing that the agreements for the regulation of the industry which were entered into should be presented to the Commission administering the statute and, if it approved that they should be exact and that when Congress has so specified, and I know of no case — certainly no case in this Court to the contrary, in a regular industry regulatory statute a method for exemption and that method has not followed which has held that the parties are nevertheless as free from the operation of the antitrust statutes as though they had complied with the statute, filed an agreement, and had it approved.

Now, the problem which really presents itself then, the problem which arises under the so-called primary jurisdiction cases and it arises for this reason that, in 1932, a steamship company sought to bring an antitrust action against conference of carriers who had set out a so-called dual rate system to its prejudice, claiming that that was a violation of the antitrust statues, and that this particular dual rate system had not been presented to the Commission and had not been approved.

Mr. Justice Sutherland, relying upon the reasoning of the decision in Great Northern against Merchants Elevator, which is the other side of the coin from the famous Abilene Cotton Oil case, said “Yes, whether or not this type of agreement should be approved is a matter primarily, which calls for expertise and knowledge of the industry and it should go to the Commission and, until it goes to the Commission and the Commission has acted, the court should not act and, by consequence, the action should be dismissed, but there is one thing about that case which markedly distinguishes it from this case.

We are seeking treble damages only for past and completed conduct and indeed, before this action was commenced, the rate had been returned to the rate that it had originally been fixed at.

We couldn’t have sought injunctive relief as to the future.

The only thing we could seek and the only thing that we did seek was treble damages.

But, in United States Navigation against Cunard, the plaintiff was seeking an injunction which would be operated in the future and could very well interfere with action which the Commission might take in passing upon the same question.

Arthur B. Dunne:

Moreover, in that case, in all probability, the Commission could grant complete relief, it can’t in this case because it can’t award treble damages, because, by cease and desist order, it very well could give all of the relief that was sought in the action under the antitrust statutes which was seeking injunctive relief only.

You could get for reparation, single reparation?

Arthur B. Dunne:

Single reparation, yes, Your Honor.

And you intervened, did you, in the initial proceedings?

Arthur B. Dunne:

We did, but did not claim reparations, and with a proceeding started by the Commission on its own motion, it cannot award reparations.

In other words, the Commission cannot force a party to proceed before it for reparations and take reparations.

What do you think the purpose of that reparations remedy was, to give the [Inaudible]

Arthur B. Dunne:

More than an election, Your Honor, because there can be offenses under the Shipping Act which would not be offenses under the antitrust statutes, so that there were remedies given for criminal, civil penalty, and reparation sanctions under the Shipping Act which would well-apply to conduct which couldn’t possibly fall within the antitrust statutes.

Byron R. White:

But would there have been any real problem about your recovering reparations?

Let’s assume that you had decided to seek that —

Arthur B. Dunne:

No.

Byron R. White:

If you’d approved — if you approved an antitrust case, could you approve a reparations case?

Arthur B. Dunne:

No, I think not because the Commission has no jurisdiction to administer the antitrust statutes.

Byron R. White:

Well, I know, but if you could put — if there were —

Arthur B. Dunne:

The same facts — I beg your pardon

Byron R. White:

— the same facts could prove a reparations claim.

Arthur B. Dunne:

If the same facts showed a violation of the Shipping Act, yes, we could proceed under the Shipping Act for reparations.

Byron R. White:

Well, how about your — just the showing of the violation of the Act, whatever it was, hurt you?

Arthur B. Dunne:

I think that would be all that would be necessary for reparations and —

Byron R. White:

But would that be easy in this case?

Arthur B. Dunne:

I think just as easy as the antitrust statute, yes, Your Honor.

In fact, counsel on the other side had been good enough to tell us that if we had just gone to the Commission, we surely would have had reparations there.

Now —

Tom C. Clark:

What violations did they find?

Arthur B. Dunne:

Under the Shipping Act?

Tom C. Clark:

Yes.

Arthur B. Dunne:

Carrying out an agreement that was not filed and approved, that, itself was a violation of the Shipping Act Section 15.

Tom C. Clark:

That’s the only one they found?

Arthur B. Dunne:

No.

Oh, the Commission itself?

Tom C. Clark:

Just the Commission.

Arthur B. Dunne:

No, it also found discrimination under Section 16 of the Shipping Act, both as to the Pacific Westbound Conference and as to the Far East Conference.

Tom C. Clark:

Yes, discrimination between the shippers?

Arthur B. Dunne:

Apparently, although it mentions no other shipper and doesn’t set out what the nature of the discrimination is.

Byron R. White:

Well, how could you be hurt by that?

There’s a violation of the Act that would face reparations?

You have faced reparations on and then, not file it, is that right?

Arthur B. Dunne:

Yes, Your Honor, carrying out the agreement without filing or without approval.

Byron R. White:

How does not filing hurt you?

Let’s assume you knew all about the agreement and they just didn’t file it.

Arthur B. Dunne:

Because the Act makes it unlawful to carry out an agreement which is not approved, and this is a rate-fixing agreement.

Byron R. White:

So the violation of the Act is operating under an agreement that hasn’t been approved?

Arthur B. Dunne:

Operating under a rate-fixing agreement, which has not been approved by the Commission.

Tom C. Clark:

Of course, that’s the whole gravamen of your case, isn’t it, the fact that they did not approve it?

Arthur B. Dunne:

That’s right.

Tom C. Clark:

They didn’t file it, therefore, it was not legal is your argument, isn’t it?

Arthur B. Dunne:

Correctly and yes, Your Honor, and therefore there was no exemption from the antitrust statute.

Tom C. Clark:

Therefore, no immunity?

Arthur B. Dunne:

That’s correct, Your Honor.

William J. Brennan, Jr.:

Well, let me see now.

They’re two different things, I think.

You say you have an antitrust action because they didn’t — it was not filed and approved.

Arthur B. Dunne:

That’s right.

William J. Brennan, Jr.:

But that doesn’t prove that you got an antitrust claim.

Arthur B. Dunne:

Oh, no, Your Honor, we still have to show that the agreement was of such nature that it violated the antitrust statutes.

Tom C. Clark:

What I meant was you’d have a different case if they had filed it, perhaps if they had filed this?

Arthur B. Dunne:

If they had filed it and been approved, we’d have no case at all because of the express exemption provided for in Section 15.

Hugo L. Black:

Your argument, as I understand it, is this simple.

The Antitrust Act has been violated.

The question is whether immunity is granted by this Act.

Hugo L. Black:

You say it’s not because they didn’t approve it?

Arthur B. Dunne:

Just as simple as that, Your Honor.

Your Honor is quite correct.

Now, the only thing I could add to the statement of the Cunard case is that, in a somewhat similar case, the Far East Conference case where the same question was raised in a suit by — brought by the United States for injunctive relief, but the importance of that case is that Mr. Justice Frankfurter, in his opinion, saying that, in that case, it was proper to dismiss, recognized that if after-proceedings were completed before the Commission, the — there was not full satisfaction of the Government’s claim, then it would be time to consider whether or not the Government might not go forward with its action.

If I may suspend, Your Honor, because the Office of the Solicitor General must present the views of the Solicitor General.

Earl Warren:

Very well.

Mr. Friedman.

Daniel M. Friedman:

Mr. Chief Justice and may it please the Court.

As the Government sees this case, it involves basically two issues.

The first issue which I’ll just refer to very briefly is this.

Where an antitrust suit for treble damages alleges that members of a conference have acted pursuant to a rate-fixing agreement that has not been approved by the Federal Maritime Commission, are there any issues raised in that case which call for the exercise of the Commission’s primary jurisdiction?

The second issue, which I think is the major issue in the case, is whether the Shipping Act so has such a pervasive regulatory scheme that the provision for reparations in that Act may fairly be said to exclude the possibility of any relief under the Sherman Act for conduct which violates the Shipping Act.

Now, as to the first issue, we part company somewhat with the petitioner on this.

We think where an allegation is made that people are acting, but not under an agreement that has been approved, and if there is a question whether what they have done is authorized by an agreement, that is properly a matter in the first instance to be considered by the Maritime Commission.

That, we think, is the teaching of the Far East and the Cunard cases and that situation, seems to us, should be the result for two reasons.

First, it gives the court the benefit of the expert judgment of the Maritime Commission and, secondly, it avoids, what this Court was concerned about in both Cunard and Far East, the possibility of a conflict, of a clash, of the court saying something is a violation of the antitrust laws when, as a result by a ruling by the Maritime Commission, it turns out that it is exempt under the antitrust law, but we think that issue is out of this case now because, in the administrative proceeding that the Maritime Commission has conducted, only last Friday, the Commission issued an opinion on re-hearing which made it crystal clear, unequivocally, the Commission said that this Agreement No. 8200, the agreement between the two conferences, does not authorize any joint rate-fixing.

So, to whatever extent the argument might be made, that what these people have done is sanctioned by an agreement approved by the Maritime Commission, that argument is no longer open to them.

Hugo L. Black:

What was the reason for the holding in what you say, the Commission [Inaudible]

Daniel M. Friedman:

The Commission — its interpretation of the agreement which it previously had filed and had approved.

In other words, the Agreement No. 8200 between the two conferences, that agreement had been filed with the Commission and had been approved by the Commission, and then the Commission interpreted its agreement that it had approved and said, “No, this agreement does not authorize what it has claimed these people are doing.”

So, the Commission has taken out of the case, we think, any claim that what the conferences are doing is authorized under an approved decree and then the question, it seems to us, comes down as to whether, despite that fact, the Shipping Act somehow creates an immunity from the antitrust laws.

Whether, by implication, the statutory scheme of the Shipping Act is such, that Congress can fairly have said that — even though you have not gotten the approval of a Federal Maritime Commission, nevertheless, you have immunity from the antitrust laws.

We think the answer to that question is, no, the statute does not give that immunity.

We think this results from the language of the statute, from its design and policy and legislative history and, finally, as Mr. Dunne has indicated, from the holding in the Far East case itself.

I like to start as the —

Hugo L. Black:

Could the court determine whether the approval has been had or — suppose it has been filed, I don’t quite understand that.

Suppose it has just been filed, not even filed with the Commission but it’s an agreement to fix rates and that’s alleged in the complaint.

Why isn’t that enough?

Why would there be anything left for the Commission to determine?

Daniel M. Friedman:

Well, Mr. Justice, if —

Hugo L. Black:

Except whether it’s been filed, then that would be a pretty easy issue.

Daniel M. Friedman:

Well, that — if the question was just whether it had been filed, I assume there would be probably no need to have resort to the Maritime Commission for that, but if it has been filed and approved and there is a question whether what they have done is —

Hugo L. Black:

That’s right.

I understand that, but I understand that they just didn’t get that far.

They just alleged that it hadn’t been filed, and it hadn’t been approved.

Daniel M. Friedman:

That is correct, but there had been a — they allege that they were supplementary agreements, supplementary in agreements over and beyond the main agreement that had been approved.

This is what they alleged.

William O. Douglas:

But my difficulty is that even though an agreement hasn’t been filed, apparently the rates under those agreements were filed and, under Section 18, the Commission would have power to disapprove them.

Daniel M. Friedman:

Well, the Commission, Mr. Justice — this section, by the way, under 18 was a —

William O. Douglas:

It’s not the agreement per se that we’re interested in.

It’s the rates that are the product of the agreement.

Daniel M. Friedman:

Well, Mr. Justice, let me say about it two things.

First, it was only in 1961 that the Commission gained the authority to disapprove these rates in foreign commerce.

William O. Douglas:

Well, this is 1965 though.

Daniel M. Friedman:

1965 — these rates have been altered in 1962.

They reduced the rates, but even though — the Commission could disapprove these rates prospectively, but it doesn’t seem to us that makes any difference insofar as their right to relief for the past period when the rates were —

William O. Douglas:

Well, that may be the answer.

I don’t —

Daniel M. Friedman:

I think it is, Mr. Justice.

I’d like now to turn to the language of the statute itself which seems to us, should be the starting point for this argument and at page 3 of our brief, we have set forth Section 15 and Section 15 basically has three components.

The first part of it, at the top of page 3, requires all common carriers by water to file with the Commission every agreement fixing or regulating transportation rates or fares, as well as a host of other agreements.

Basically, all agreements restricting competition have to be filed with the Commission.

Then, down to the middle of the page, it states that all agreements shall be lawful only when and as long as approved by the Commission.

Now, the agreement of fixing rates is not lawful until it’s approved by the Commission, and then it goes on and says, “Before approval or after disapproval, it shall be unlawful to carry out in whole or in part, directly or directly, any such agreement” and then, finally, at the very end of the section, it says, “Every agreement, modification, or cancellation lawful under this section, and by definition lawful under this section means an agreement that has been approved by the Commission, any agreement lawful under this section shall be exempted from the antitrust laws,” but it seems to us, that this language means what it says that the only exemption is for agreements that are lawful under this section, that is, agreements that have been filed with and approved by the Commission and that this section does not somehow, in addition to that, give an antitrust immunity to agreements that have not been filed and approved with the Commission.

If that’s what Congress intended, it certainly used very odd language to say it.

It would have said all agreements covered by this section, all agreements whether or not approved shall be lawful.

It didn’t say that.

It said every agreement lawful under this section.

Now, it would seem to us to take a very strong showing on the part of either the legislative history of the scheme of the Act to impute the Congress from this language an intention to confer antitrust immunity upon agreements that are not lawful under this section.

When we look to the history and design of the statute, we think it makes it quite clear that that’s not what Congress intended because as Mr. Dunne has indicated, in 1916, Congress made the determination that the antitrust laws would not apply with full vigor to the shipping industry.

Daniel M. Friedman:

They recognized that the norms of competition that our antitrust laws provide may not properly be applicable there.

But —

Of course, they didn’t stop with that.

They had a system.

They built in remedies under the Shipping Act itself for agreements that didn’t — that weren’t submitted.

Daniel M. Friedman:

That — yes, Mr. Justice, they did provide us — they provided penalties for operating under an agreement that had not been approved by the Commission.

And we think the answer to that is that Congress was so concerned about the evils that might flow from the conferences acting pursuant to unapproved agreements that they in effect, provided a double penalty to encourage people to file agreements.

They imposed penalties under the Shipping Act and they also said, “You may get an antitrust immunity only if you file with the Commission.”

In other words —

William J. Brennan, Jr.:

Does that suggest that Carnation might have both treble damages and reparations?

Daniel M. Friedman:

We don’t suggest that, Mr. Justice, because in this case, Carnation has not sought reparations so there’s no way the Commission cannot award it.

I’d also like to point out —

William J. Brennan, Jr.:

But you do not suggest they could have both?

Daniel M. Friedman:

No.

We think this is a – it is a difficult question.

It may well be that, if they seek reparations, this might be viewed as an election.

We think that’s not faced in this case because of the fact that Carnation has not —

You can’t conceive of an election.

Anybody elected can take single damages and they could get approved.

Daniel M. Friedman:

Well, there might be situations, Mr. Justice, where they might feel perhaps problems of proof, they think, might be more difficult.

But of course the reparations, the reparations remedy is not just limited to conduct that violates the antitrust laws.

There are many things which may violate the Shipping Act which reparations would be appropriate for which an antitrust suit would not lie.

Now, in addition to that, I think it’s important to point out that permitting the additional remedy of an antitrust suit after the Maritime Commission has exercised any primary jurisdiction it may have, permitting that remedy presents no possible clash between any order of the Maritime Commission, on the one hand, and any decree of the court, on the other.

There isn’t the problem that the court was faced with in the Far East and Cunard situation where what we had was an attempt to seek injunctive relief where the court was being asked to enjoin something that the Maritime Commission subsequently might approve.

Is there any legislative history that bears directly on this problem [Inaudible]

Daniel M. Friedman:

There’s no legislative history, Mr. Justice, that bears directly on this problem, but I would like to refer to one bit of legislative history, which we have cited in our brief but we haven’t quoted from, and that is the committee report on the 1961 amendments to the Shipping Act.

In 1961, Congress made a number of rather extensive amendments in the Shipping Act and, in the course of that, the respondents rely on certain statements made by the Chairman of the Maritime Commission which they say indicates Congress didn’t intend the antitrust remedy.

But, I’d like to read to the Court two sentences from the committee report — the House Committee report on that 1961 legislative his — legislation which is set forth at Footnote 13 of page 25 of our brief.

And, I might say Mr. Justice, I have some doubt whether the legislative history of what Congress intended in 1961 cast too much light on what Congress intended in 1916.

But, to whatever extent it’s relevant, this is what the House Committee said, “In order to secure the benefits of such immunity from the Antitrust Acts, the conferences are required by Section 15 of the Shipping Act of 1916 to file all their agreements with the appropriate regulatory party, which at present is the Federal Maritime Board, and obtain approval of that body.”

Daniel M. Friedman:

In other words it said to obtain the benefits of such immunity, they’re required to obtain the approval of the body for an agreement that it is filed with and then it went on and said, “The Board has considerable jurisdiction under the terms of that Act to regulate the conferences and see that they observe the restrictions upon which their immunity from the operation of the Antitrust Acts is predicated.”

The restrictions upon which that immunity from the antitrust laws is predicated, we think is what this statute says.

They have to file and obtain the approval of the Commission.

Now, finally, I’d just like to refer very briefly to the Far East case and show why we think that supports our position.

In the Far East case, as has been indicated, the question was whether the Government might maintain an injunctive suit to enjoin enforcement of a dual rate system.

And this Court after analyzing the statute, concluded that the case was controlled by the Cunard case and it didn’t make any difference that the plaintiff in Far East was the government rather than a private party.

After reaching this conclusion, the opinion then said, “Well, what do we do with the case?”

The District Court had refused to dismiss it, and the question was put “Do we dismiss the case or do we hold it on the docket” and the court decided in the circumstances, dismissal was appropriate.

Well, if the respondents are correct that somehow the Shipping Act completely immunizes them from antitrust activity, it seems clear to us there was no need to make that choice.

If they’re correct, there was nothing to be held on the docket in the Far East case, the case should have been dismissed.

There was nothing to hold on the docket and then, and then the Court went on in explaining why it should be dismissed.

It added, “A similar suit is easily initiated later if appropriate”.

In other words, all that Far East said was that that was the kind of a question which in the first instance, should be submitted to the Commission, and let the Commission decide it.

They think the Commission probably can give adequate relief, but if not, a similar suit can then be initiated by the Government.

Here, a similar suit probably could not be initiated by the petitioner if this sort of dismissal stands because it would appear that the statute of limitations is already right.

Thank you.

Earl Warren:

Mr. Ransom.

Edward D. Ransom:

If the Court please.

Solicitor General’s Office now conceives of treble damages, under the Antitrust Act, as an additional remedy and additional means of enforcement of the Shipping Act inducing carriers to file their agreements.

Their nominal client incidentally, the Federal Maritime Commission, takes no position on that matter and, in fact, argued to the contrary below.

But what the Solicitor General’s Office is here attempting to have this Court do in adding antitrust remedies to the Shipping Act, contrary to the decision in Cunard, Congress considered in 1961 and Congress rejected this.

The Shipping Act was given a real thorough going over in 1961 by at least two Houses of Congress.

In the hearings before the House Marine Committee, the Department of Justice appeared and they urged there an amendment to the penalty section of — Section 15.

The amendment which they urged was one which would add to Section 15, the $1,000 per day sections — provisions of Section 15, “The penalties provided by the antitrust laws”.

Now, this was silently attacked by the Chairman of the then Federal Maritime Commission, the Federal Maritime Board on the basis that under this Court’s Doctrine of Supersession as expressed in Cunard and others, the remedies and penalties of the Shipping Act were the exclusive remedies and penalties and that the antitrust penalties and remedies did not apply.

And, he further expressed the conviction, and I use his words that if you introduce these antitrust into the Shipping Act, you will create irreconcilable inconsistencies.

The amendment which would have added in 1961, the very thing that is now being asked of this Court to add, that is the antitrust penalties, died in committee by contrast in 1961.

Congress, rather than believing additional remedies and penalties were needed, decided that the rigid $1,000 per day was too — was too rigid, was too severe for the areas of culpability that might exist in violating Section 15 and they changed that language to make it a discretionary not more than $1,000 per day.

Thus, Congress in 1961 made it quite clear that they feel that additional weapons, additional — the antitrust additional penalties are not necessary in enforcing the Shipping Act.

In rejecting this amendment, they in effect ratified the doctrine of Cunard and we say Far East in saying that the Shipping Act penalties that they provided are the exclusive remedies and penalties.

Edward D. Ransom:

The Shipping Act is exclusively that which operates so far as a violation of Section 15 is concerned.

Now again in 1964, Congress had the opportunity to take up this question of how severe is the penalties under Section 15.

And as a result of a Commission decision in what’s known as the Baton Rouge case, for the first time, the Commission laid down a rule to the effect that internal lease agreements, which contain certain restrictions of the lessee, must bore within Section 15 and must be filed and approved.

These were common throughout the country.

A number of suits asking for high penalties under Section 15 were filed by the Department of Justice.

And, the Department of Justice as well as the Federal Maritime Commission and the industry all went to Congress for relief and Congress gave them that relief.

No, certainly, no additional penalties were needed under Section 15.

As a matter of fact, I think that Congress would be quite astounded if they were to find, as is being urged here, that those that they relieved under the Shipping Act were still at large under the Antitrust Acts and this Terminal Amnesty Relief Act.

Now, the ship — the Solicitor General’s Office further argues that there’s no possibility of a clash of agency and court.

Whereas, in this situation as is now before you, not as it was when the District Court dismissed the action, but as it now appears before you, the agency has made the determination that the agreements had — did not follow.

They were beyond the scope of the agreement which was approved, but this statement that there’s now no clashing of court and agency overlooks the basic element of discrimination which exists insofar as the awarding of treble damages are concerned.

An underlying objective in the Shipping Act, and it appears in Section 14, Section 15, Section 16 and 17, the operating Sections, is to have equal treatment by the carriers of their — of their customers.

And, without any preference, without any discrimination, without any prejudice, if the parties were given a choice of treble damages or given the double treble damage remedy, there would be all types of possibilities of discrimination.

The — those that receive treble damages, as far as the two-thirds part which is the punitive part, would be getting an advantage over those who sought reparations.

They would also be getting advantage over those who, like in this case, paid the rate that was on file which, but for this agreement which five years later has been determined not to be filed or approved, was unfiled and was at that time the rate which everybody was paying.

If Carnation were to get treble damages, they would have a two-thirds advantage over those who paid the rate.

And, even if everybody sued and they got treble damages, as the court has pointed out on frequent occasions, the juries and the courts are not going to award the same amount.

Now, Carnation, in its subsequent — its reply brief says, “Well, that doesn’t apply here because it’s a matter — those cases were a matter of reasonableness of the rate,” and we’re not concerned here with the reasonableness of the rate.

We’re just talking about $2.50 and that’s it.

But that in itself overlooks, I think, an important allegation in Carnation’s complaint and that is that Carnation choose to absorb the $2.50 and to come into court, as they are coming into court now and seek treble damages.

Some might have chose to pass on this amount in part, some in whole so that you would in any event have, if it went to the courts and the juries, you’d — you would undoubtedly have a situation of discrimination or differences, non-uniform treatment.

Now, the only way you can avoid that non-uniform treatment — the uniform — the only way you can avoid lack of uniformity and to obtain uniformity is to do exactly what the Shipping Act said you should do or what they provided, and that is under Section 22, the one agency determines all of these matters of claims and the one agency also then can award not treble damages, but just make the party whole and give him reparations.

The Shipping Act also, by the very fact that it makes the fine payable not to enrich the shipper but makes the fine it has, the $1,000 a day, payable to the Government, carries out this plan of uniformity.

Now, I think that that —

Abe Fortas:

Mr. Ransom.

Edward D. Ransom:

Yes?

Abe Fortas:

Let’s suppose that instead of absorbing the excess rate it had been passed on, would the person to whom it had been passed on, to have a claim for reparations under the Shipping Act?

Edward D. Ransom:

I think so, Your Honor.

Abe Fortas:

You think so?

They would have an antitrust claim, wouldn’t they?

Edward D. Ransom:

I think that they — it would depend on the ocean documents and bills of lading as to whether or not — they would or not —

Abe Fortas:

If they had a claim for reparations, then I assume that your position would be that they would be foreclosed from an antitrust action.

Edward D. Ransom:

Yes, yes it is.

Abe Fortas:

But — and you do feel that —

Edward D. Ransom:

I don’t — I honestly don’t know the answer to that, Mr. Justice Fortas.

Abe Fortas:

Whether they had a claim for reparations or not?

Edward D. Ransom:

Whether they would or not, I think it might well depend upon the ocean shipping document.

I do want to emphasize, however, that this — the whole theory of uniformity does go out the window as soon as you let this element of treble damages come in, and this — that’s the feature that this Court, in the original Abilene case, the original primary jurisdiction talked about in Keogh, in the Terminal Warehouse case in 1936, and in Georgia against the Pennsylvania Railroad insofar as the damage feature of that case is concerned.

Now, the situation which the Solicitor General suggests also places the industry in a very difficult position, an untenable position in this regard.

One of the most difficult features, one of the most difficult problems that this Commission has had to wrestle with from the inception of Section 15 is, ‘when is an agreement which you file — and then you act under that agreement and you have procedures, some of which are in your term, when are those subsequent procedures something beyond that which you obtained approval for.

This case presents a classic example of that.

These so-called supplemental agreements and the matter of the — of the concurrence is a situation where the Commission took several years to finally determine.

In the mean time, the Circuit Court, the Ninth Circuit took a different view as to whether or not concurrence was allowable.

In the Solicitor General’s brief, they agreed, more or less, with the Circuit Court that there was some area for making joint rates within the approved agreement 8200.

And, now, the Commission has come out with a clarification saying that they didn’t really mean there was any area for this.

And the Commission in this case did exactly the problem that can punch the industry.

They said, “We are announcing a new test as to when agreements may be considered as having gone beyond that — the scope of that which you’ve already filed and as to when the approval you’ve already obtained gives you the blanket of approval.”

Whenever the Commission announces — the test they announced incidentally was in effect, has been interpreted by in some sources as indicating that if you have a tariff provision that differs from you basic Section 15 agreement, if you’ve got a tariff rule, then that tariff rule itself goes beyond the scope and you have to have a separate Section 15 agreement.

Now, this puts the industry in the situation, as this one, where the Solicitor General who says, “We will acknowledge Cunard and Far East as the Doctrine Supersession and then that you should refer to the Commission for those determinations.

But once those determinations are made, then immediately you’re subject — you’re at large under the Antitrust Acts.”

It puts the industry in the position of having — now faced with the new rule and having themselves subjected, in effect, to a double penalty statute.

And —

Earl Warren:

Do you claim — do you claim now that the conference had the right to do what it did in this case, come to an agreement as to the $2.50 raise or is that issue foreclosed to you now by reason of the action of the Commission?

Edward D. Ransom:

Mr. Chief Justice Warren, the — I — what I would claim would be that the conference, under the present decision of the Commission, did violate Section 15 at the time that they made this rate because they — the Commission has now determined that they went beyond the scope of their filed agreement.

However, this rate you see is no longer a problem.

Back several years ago, they changed the rate back.

But, the procedures by which they adopted this rate, I say it’s now the Commission has said to them “Alright, you didn’t get approval, bring your agreements in and we’ll consider them, make up — make up what it was you were acting under and bring them in” and, this is — and, so that, the Commission doesn’t say so, but it certainly hints that what they did was not unapprovable.

It’s simply that they hadn’t been gotten approved.

Is that —

Earl Warren:

Well, can the Commission give approval to those illegal acts that occurred years ago?

Edward D. Ransom:

No, there is — so far as any cases are concerned, there is no such thing as retroactive approval.

What the Commission can do is go forward with — in the future, they can say yes in the future, you may do this but they cannot give approval to the retroactive — retroactively.

Earl Warren:

Well, then the recent action of the Commission would not inure to your benefit, would it?

Edward D. Ransom:

No, no, no, the recent action of the Commission would not inure to our benefit at this time.

We’ve not — we’re not claiming that, if Your Honor please.

Earl Warren:

Do you claim the issue is as simple as Mr. Dunne has stated in here as between the parties, as to whether you’re wholly beyond the antitrust laws even where you act without the approval of the Shipping Board, or do you claim that the issue was broader than that?

Edward D. Ransom:

I think the issue is — the basic issue in the case as introduced by Mr. Dunne, enlarged by the Solicitor General’s Office, but I think the basic issue in the case is whether the decision of this Court in 1932, in the Cunard case, is correct or incorrect.

And that case incidentally, of course was followed in the Far East case in 1952 because there they did dismiss it.

That case adopted the principle of — that since the Shipping Act has set up its set of penalties and remedies an since the Shipping Act has acted upon and take over — taken over and completely encompassed this matter of filing anticompetitive agreements, the matter of filing them or, if unfiled, penalizing the parties for them, that it’s the Shipping Act and not the Antitrust Act which takes over.

Earl Warren:

I still don’t know whether you —

Edward D. Ransom:

I’m sorry.

Earl Warren:

Do you agree that the issue is as simple as Mr. Dunne has stated?

Can you answer that categorically?

Edward D. Ransom:

I would answer categorically, yes.

Earl Warren:

It is as simple as he states it.

Edward D. Ransom:

Yes, I think it is.

Earl Warren:

Yes.

Byron R. White:

Then what — and why do you — why was it do you suggest the Congress felt it necessary to put the Commission in the — in Section 15 with regard to the antitrust laws because, I take it, your position would be —

Edward D. Ransom:

Yes.

Byron R. White:

— the same whether the provision was in or out?

Edward D. Ransom:

Well, if —

Byron R. White:

Does this mean that this is —

Edward D. Ransom:

If Congress had — had in 1961 expressly added the — that which was asked for them to do, then I think–

Byron R. White:

— that isn’t what I’m asking.

I’m asking, originally, they put in Section 15 that agreements filed and approved would be exempt from the antitrust laws.

That provision is in Section 15.

Edward D. Ransom:

That still is in there, yes, Your Honor.

Byron R. White:

Yes, and it was in there from the start.

Edward D. Ransom:

Yes.

Byron R. White:

Why was it ever necessary to put it in?

Byron R. White:

I mean, your position —

Edward D. Ransom:

Oh, why was it ever necessary to put it in the first place?

Byron R. White:

— your position would be the same if it never been put in.

Edward D. Ransom:

Yes, yes my position would be the same.

Byron R. White:

So, why — why did they need it?

Edward D. Ransom:

I think that a reason, if you can impute to Congress the sophistication, which we like to impute to Congress after the Act, I think that the reason that they needed the express immunity at that time for approved agreements was because they were making approved agreements lawful.

Therefore, having made approved agreements lawful, they would still be unlawful approved agreements under the Antitrust Acts if they did not go for — further and say, “But, we make them lawful here but –“

Byron R. White:

They wouldn’t need to say that if your argument is correct.

Edward D. Ransom:

Well, may I finish?

Byron R. White:

Sure.

Edward D. Ransom:

They would need to say that, if my argument is correct insofar as approved agreements.

My argument is that for unapproved agreements, and this is the Cunard case that for unapproved agreements, they made those unlawful.

Now, having made those unlawful, they at the same time, provided penalties and remedies.

There is no penalties and remedies provided for approved agreements.

It’s the provision of penalties and remedies under the Shipping Act, which takes it out of the orbit of the antitrust penalties and remedies.

So that, approved agreements do — do need some protection from the Antitrust Acts.

Unapproved agreements, having provided the penalties and remedies and, as the Cunard case says, the doctrine that the agency’s penalties and remedies apply, if they provide them, that doctrine was already well-known in 1916.

Byron R. White:

Are you saying approved agreements needed more protection than unapproved agreements under your approach to the Act?

Edward D. Ransom:

Yes.

I say that approved agreements needed more protection than unapproved agreements because approved agreements didn’t have any — any violation that we were talking about to take over, whereas, the unapproved agreements did have penalties and remedies that were substituted.

I — on this point, while we’re on that Mr. Justice White, I would — I would say also that the distinction which both Mr. Dunne from Carnation and the Solicitor General make between our case and the Cunard and Far East case, that is the distinction which they make that those cases dealt with injunctions and ours deal with treble damages and they seem, in fact they’ve expressed in their brief, quite willing to concede that supersession takes over so far as injunctions are concerned, but no — not with treble damages.

If that’s the case, then they have destroyed the argument that you can only get immunity because — for approved agreements because approved agreements are expressly exempt.

Now to restate that, injunctions and treble damage actions, both unapproved, should be treated the same as — so far as whether it’s an express exemption or not an express exemption and if you attempt to make Cunard and Far East cases be distinguished because they deal with another kind of remedy, you simply must agree or they must agree that you do not only get your immunity from express exemptions.

You get your immunity because the Shipping Act is — provides these penalties and remedies, and the Shipping Act is unique among all statutes that this Court has dealt with on this general subject.

The Shipping Act alone is the only Act that provides penalties and remedies.

It’s the only Act that requires that you take these anticompetitive agreements and file them.

It’s the only Act which provides both injunction and damages.

It’s the only Act which provides the — a penalty for failure to bring them in and file them.

It contains no savings clause for saving to — as the CAB and the ICC does, and it does have a right of judicial review.

So that, of all the Acts, which this Court has dealt with on this subject, the Shipping Act is unique.

Edward D. Ransom:

Thank you.

Earl Warren:

Mr. Turk.

Elkan Turk, Jr.:

Mr. Chief Justice, if it please the Court.

It’s discouraging, this late in an argument, to go back to the beginning, but the question was raised of Mr. Ransom as to what we conceive really to be the nub of this case and I think that there’s some difficulty for all of us in appreciating that.

We don’t know really whether we are here to establish whether U.S. Navigation against Cunard and Far East Conference are still good law or whether we are here just to determine whether they are good law but some little corner must be carved out of a doctrine of those cases to permit this treble damage remedy even though those cases are still in full force and effect as to the fact situations which were involved in them.

If the broad question is “Are Far East and U.S. Navigation against Cunard still good law,” we submit that they are the principle on which they were decided is as applicable today, as it was then, and that there are some logical inconsistencies.

In allowing this private party the right to seek treble damages under the antitrust laws for matters totally covered under the Shipping Act, whereas, those cases say that neither a private party nor even the Attorney General may obtain an injunction against conduct claimed to violate the antitrust laws but also thoroughly covered by the Shipping Act.

It seems somewhat anomalous that the Arm of the United States Government which has the responsibility for the enforcement of administration of the antitrust laws should be barred from coming to court and challenge an unfiled, unapproved agreements, as was held in Far East Conference against the United States.

But, that this antitrust treble damage plaintiff who absolutely gambled by not filing any reparation complaint before the Commission for his rights under Section 15 in the event there was an unapproved agreement, should be able to come in with his treble damage suit and succeed when he could under Section 22 of the Act, the Shipping Act, have had full, single reparation putting him in on a par with all other shippers and not giving him two-fold preference over other shippers.

The Attorney General says that the power of the Federal Maritime Commission, to order parties to cease and desist from violations of the Shipping Act, renders the antitrust injunction remedy superfluous.

We say the same logic leads to the conclusion that the power of the Federal Maritime Commission to make a private party whole, where carriers subject to the Act have enhanced a rate by an agreement which has not been filed and approved, equally renders superfluous, the treble damage remedies under an entirely different statutory scheme which has a different method of penalizing parties at the instance of the government and uses this treble damage remedy as a sort of auxiliary enforcement process.

Now, the Solicitor General has suggested this treble damage possibility in the wings may cause us ocean carriers to become more cautious and to file everything with the Commission which, in the past or possibly in the future as was done in this very case, Docket 872, may for the first time be held by this Commission to be a matter requiring Section 15 approval.

Abe Fortas:

Mr. Turk.

Elkan Turk, Jr.:

Yes?

Abe Fortas:

In your — as you look at this case, is there any area in which the treble damage provisions of the Antitrust Act would operate with respect to the rate procedures of these carriers?

Elkan Turk, Jr.:

I would say, Mr. Justice Fortas, that in the difficult to conceive situation in which a private party claimed he’d been damaged by some collective action of a person subject to the Shipping Act, but the Commission upheld, let’s say, on judicial review had found that that did not entitle this party to a remedy under the Shipping Act, not because he just didn’t prove his case but because there is something inherent, either substantively or procedurally, in the Shipping Act which denies party complainant a remedy under the Shipping Act, then one of the predicates of supersession, as we call it, would be absent.

He couldn’t get his relief under the Shipping Act.

If he had a case under the antitrust laws, he would be entitled to proceed, but, I suggest to you it’s pretty difficult to imagine that that would occur because Section 15 of the Shipping Act so thoroughly and completely describes anticompetitive agreements of carriers and says they must be filed and that the Commission must approve them, unless it makes specified findings which have nothing to do with the antitrust laws, they have to do with carrier regulatory concepts, discrimination, public interest, detriment to commerce, et cetera, we submit that the entire philosophy of what to do with the agreements of ocean common carriers and other parties described in Section 1, as within the coverage of the Shipping Act is —

Earl Warren:

Mr. Turk, having thought about it as much as you have and making that slight distinction as to the antitrust laws, can you give us any hypothetical case in which the antitrust laws might apply?

Elkan Turk, Jr.:

Well, I think that gets us to that perplexing last portion of the opinion in Far East Conference against the United States where as the Solicitor General suggested, Mr. Justice Frankfurter said “We’ll dismiss here.

A similar suit is easily instituted later.”

Now, it is conceivable, or at least it may have been conceivable, in the author — in the mind of the author of that opinion, but if the Attorney General did go before the Federal Maritime Commission, (a) the Commission might say he didn’t have standing.

That’s discussed in the opinion.

It’s considered frivolous, but it is a possibility that cannot be neglected.

If the Attorney General had filed a complaint with the Commission, the Commission might have said “we are Uncle Sam just as much as you are, we’re not going to listen to your story about this” or it is conceivable that the Attorney General might approve to state of facts with which the Commission, either on its own motion, felt incapable of adjudicating or on court review, it might have been held was outside the ambit of the Commission’s powers, and that would’ve left the Attorney General remedy was under the Shipping Act.

And then, as Mr. Justice Frankfurter indicated, a similar suit, namely an injunction suit, under the antitrust laws is easily instituted later.

As to giving you a specific set of facts, which I do not conceive to be covered by Section 15, if it in any way involves restraint of competition by cooperative action of ocean common carriers, I submit to you, I cannot suggest it.

I don’t believe that others can.

Earl Warren:

Well I wonder — I wonder why if it was to be that simple, why Congress couldn’t have said so in very simple language instead of the language it used in Section 15?

Elkan Turk, Jr.:

Mr. Justice Warren, without undue levity, I would like to suggest that we are here and a good deal of this Court’s business arises because, in advance of these complicated arguments and contentions which resourceful people make up many years later, Congress does not always use the clearest manner of expressing its purpose.

Elkan Turk, Jr.:

However, if one refers to the Alexander Committee report which was the underlying source of the Shipping Act, I believe that one can discern there an intent whether or not it was aptly expressed in the 1916 Congress that a thorough consideration of ocean carrier agreements — in the first place, they did not start off by considering the disadvantages.

They started off by considering that there were many advantages to these agreements that they wanted to secure and they recognize that the only way they could secure that was to get them out from under the antitrust laws.

Then, they did also state that the testimony —

Earl Warren:

For all purposes?

Elkan Turk, Jr.:

Yes.

There’s no reservation in the committee’s consideration of the securing of advantages.

These advantages, and this is from page 416 in the Alexander Committee report, these advantages, the committee believes, can be secured only by permitting the several lines in any given trade to cooperate through some form of rate and pooling agreement under Government’s supervision and control.

Now, they don’t say, at that point, whose supervision and control, but if you go on, there are numbered recommendations that the Committee made.

And number two, which appears on pages 419-20 of the Alexander report, is that all carriers engaged in the foreign trade of the United States, parties to any agreements, understandings, or conference arrangements, hereinafter referred to, be required to file for approval with the Interstate Commerce Commission.

They, at that time, contemplated the ICC would administer this, a copy of all written agreements or a complete memorandum, if oral, entered into with other steamship lines, et cetera.

There is nothing stated about exempting only approved agreements.

As a matter of fact, there’s nothing stated about exemption at all.

I think it’s clear that they concede that by adopting this specific Act, which covered agreements from stem to stern and left nothing untouched, there was no scope at all left.

Abe Fortas:

Mr. Turk, I understand your point.

You don’t rely at all on the specific language of Section 15 with respect to the exemption provisions.

In other words, if that language were not in the statute, your argument would be exactly the same.

Is that right?

Elkan Turk, Jr.:

I must agree with that entirely.

Abe Fortas:

Now, what you’re doing then, if I understand it, is that you are inferring from the structure of the Act, in the absence of any specific provision, you are inferring from the structure of the Act an antitrust exemption.

Is that correct?

Elkan Turk, Jr.:

Yes.

But, in the field of interstate commerce, we sometimes here refer to as completely occupying the field.

This is no subtle repeal by an implication which must be finally broad.

We got a statute which occupies the subject of ocean carrier agreements completely and thoroughly and far beyond even antitrust coverage because there are some agreements —

Abe Fortas:

Your adversary, if I understand it, makes precisely the opposite argument, which is that, since the statute does contain a specific and narrow exemption from the antitrust laws, that this Court should not infer that Congress really intended a much broader exemption because Congress was specific, it was indefinite and the specific indefinite exemption stated in the statute doesn’t help you in this situation.

Elkan Turk, Jr.:

No.

I think we’re at some pains to understand why, in view of the Alexander Committee’s obvious intent.

They express the exemption in the very narrow way that they did.

I think Mr. Ransom’s suggestion is a helpful one.

They provided the penalties for dealing with non-filed agreements in Section 15 and wanted to be sure that if you did go the right route and get your approval and got your agreement lawful under Section 15, you would not somehow be left with some contention that, nevertheless, the agreement still violated the antitrust laws.

Elkan Turk, Jr.:

I can’t say —

Hugo L. Black:

If they were so meticulous in that regard, why didn’t they add “If you did not file, then your remedy was under the Act”.

Elkan Turk, Jr.:

Well, that is a speculation that is very difficult to answer these 50 years later, Mr. Justice Black.

I think we might pose an equally pertinent question, why did not Congress in the Shipping Act, as it did in the Interstate Commerce and many of these other Acts, include a provision saving to all suitors their rights and remedies under the common law and all other statutes?

That was left out.

I submit that that was deliberate.

The Congress was aware at least of the Abilene Cotton case at that time.

It was not, however, aware of the Keogh case which was not decided in 19 — until 1922 and that was really the starting point of supersession as distinguished from just primary jurisdiction under an administrative Act.

In Keogh, you had the element of a suit for treble damages under the antitrust laws and notwithstanding this savings of remedies under other statute’s clause of the Interstate Commerce Act, this Court held Keogh had no right to proceed for treble damages under the antitrust laws.

That’s somewhat the irony of this whole situation that brings us here today.

Hugo L. Black:

Do we still have the same language as was put in recently on this point?

Elkan Turk, Jr.:

On the exemption?

Hugo L. Black:

Yes.

Elkan Turk, Jr.:

Yes, Your Honor.

There has been no change.

In 1961, there was this proposed change —

Hugo L. Black:

I know that.

Elkan Turk, Jr.:

But that was deleted.

So that we stand in the same position.

Hugo L. Black:

That was in 1916.

Elkan Turk, Jr.:

1916, yes, Your Honor.

Hugo L. Black:

That was along about the time they were pretty active over there in connection with enforcing the antitrust laws, wasn’t it?

Elkan Turk, Jr.:

Yes, indeed.

As a matter of fact, the Alexander report came out in 1914, which was the same year that the Clayton Act was passed.

Hugo L. Black:

This was in two years of the passage of the Clayton Act?

Elkan Turk, Jr.:

That’s right.

Hugo L. Black:

Which strengthen the antitrust laws?

Elkan Turk, Jr.:

Yes, indeed.

I submit that this was an appropriate time to settle this point that Far East and U.S. Nav are good doctrine with respect to the kind of a regulatory statute that you have in the Shipping Act where you have this complete occupation of the field by the shipping regulatory law.

We should not have to come back every few years and consider whether some new little corner should be carved out of that, chip-away — chip-away at it.

Elkan Turk, Jr.:

I note that, at some point, the Solicitor General has seemed to conceive that Far East and U.S. Nav are good law but they ought to have this treble damage right.

Well, they don’t ordinarily come in just to help a private suitor get damages.

And, from the argument that was made here this morning on behalf of the Solicitor General, I submit they’re really trying to get the whole camel under the tent and get rid of Far East and get back on our back.

And —

Abe Fortas:

Mr. Turk.

Elkan Turk, Jr.:

Yes.

Abe Fortas:

Do you agree with Mr. Ransom that the Commission would have no jurisdiction on ex post facto or no proto basis to declare lawful these rates which by hypothesis for purposes of this case, were unlawful [Inaudible]

Elkan Turk, Jr.:

In other words, would retroactive effect wipe out the unlawful as of the date when Carnation —

Abe Fortas:

As I understand Mr. Ransom, he said that the Commission would have no such power.

Elkan Turk, Jr.:

I must concede the same on the basis of the River Plate & Brazil against Prestil Carr case and —

Abe Fortas:

And then Far East and Cunard, as I recall them, isn’t it the fact that the — what was sought there was an injunction as to future action and the Commission did have jurisdiction to commit or disallow the action in question.

Elkan Turk, Jr.:

No question that it can approve in both cases.

The approval has prospective but not retrospective effect.

Hugo L. Black:

And an injunction would undoubtedly have interfered with the primary jurisdiction of the Commission, wouldn’t it?

Elkan Turk, Jr.:

Yes, Your Honor.

If there are no further questions, my time has elapsed.

Thank you.