Federal Maritime Commission v. Aktiebolaget Svenska Amerika Linien

PETITIONER: Federal Maritime Commission
RESPONDENT: Aktiebolaget Svenska Amerika Linien
LOCATION: South Boston Court

DOCKET NO.: 257
DECIDED BY: Warren Court (1967-1969)
LOWER COURT: United States Court of Appeals for the District of Columbia Circuit

CITATION: 390 US 238 (1968)
ARGUED: Jan 25, 1968
DECIDED: Mar 06, 1968

Facts of the case

Question

Media for Federal Maritime Commission v. Aktiebolaget Svenska Amerika Linien

Audio Transcription for Oral Argument - January 25, 1968 in Federal Maritime Commission v. Aktiebolaget Svenska Amerika Linien

Earl Warren:

No. 257, Federal Maritime Commission, et. al., petitioner versus Svenska Amerika Linien and 258, The American Society of Travel Agents versus Svenska Amerika Linien.

Mr. Seibel or Seibel rather.

I beg your pardon.

Irwin A. Seibel:

Mr. Chief Justice, may it please the Court.

These consolidated cases are here on writ of certiorari to the Court of Appeals for the District of Columbia Circuit to review the judgment of that Court which reversed in Order of the Federal Maritime Commission issued under Section 15 of Shipping Act.

The Order required two closely interrelated Trans-Atlantic steamship passenger conferences to modify certain provisions of their conference agreements.

The proceedings in which the Commission’s Order was entered were triggered by a complaint filed by the American Society of Travel Agents, the other petitioner in this case, complaining about certain practices of the conferences and requesting the Commission to undertake an investigation of the interrelationship between the travel agents and the conferences.

This was the first comprehensive investigation undertaken by the Commission of this relationship since the enactment of the Shipping Act in 1916.

The two conferences here involved are informed distinct legal entities though they are closely coordinated and they determine the uniform practices and policies for their member lines including the fixing of transportation fares, the fixing of commissions paid to their travel agents and also the selection, supervision and control of the agents they appoint.

One of the conferences is responsible for fixing the fares and the commissions for the travel agents and the other is responsible generally for picking the travel agents and seeing to it that they stay in line; that they observe the proper conference rules.

Membership in each conference is identical or almost identical, each consisting of the same 25 lines with one unimportant exception.

Seven of the lines do not serve the ports of the United States or at least very minimally.

The conference lines carry 99%, 99% of all the Trans-Atlantic passengers going by ship.

They obtain most of this traffic through the travel agents they appoint.

Typically, these agents account for about 75% to 80% of all the tickets sold in the United States for Trans-Atlantic steamship passage.

These agents almost always also serve as agents for airlines.

After a full evidentiary hearing, the Commission’s examiner recommended disapproval of certain provisions and of certain practices of the conference.

Among those disapproved was the so-called “tying-rule”.

This is a rule which forbids the travel agents under penalty of disqualification from serving any competing non-conference steamship line.

In other words, it ties the agents to the conference members.

The other rule, the “unanimity rule”, so-called is one the examiner did not recommend be disapproved.

This is a rule which requires the agreement of all the member lines, all 25 member lines before any change can be made in the level of commissions payable to the travel agents.

William J. Brennan, Jr.:

These conference/agreements, I suppose, are very old and were filed under Sectiion15 long ago?

Irwin A. Seibel:

That’s right.

William J. Brennan, Jr.:

Is that correct?

Irwin A. Seibel:

Indeed.

William J. Brennan, Jr.:

And did they from the -- have they always contain these two provisions?

Irwin A. Seibel:

Almost always.

I think the provisions have probably been in the conference agreement ever since the inception of the conferences and perhaps.

William J. Brennan, Jr.:

So up until now, they’ve been approved as part of the agreements that were filed under Section 15?