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

Media for Carnation Company v. Pacific Westbound Conference

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appeared and moved to dismiss the action upon the ground that Shipping Act 1916 had, for the purposes of the action superseded the Clayton Act and the Sherman Act and that the court was without jurisdiction.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.