The Monrosa v. Carbon Black Export, Inc.

PETITIONER:The Monrosa
RESPONDENT:Carbon Black Export, Inc.
LOCATION:Union Station

DOCKET NO.: 178
DECIDED BY: Warren Court (1958-1962)
LOWER COURT: United States Court of Appeals for the Fifth Circuit

CITATION: 359 US 180 (1959)
ARGUED: Mar 03, 1959 / Mar 04, 1959
DECIDED: Mar 30, 1959

Facts of the case

Question

  • Oral Argument – March 04, 1959
  • Audio Transcription for Oral Argument – March 04, 1959 in The Monrosa v. Carbon Black Export, Inc.

    Audio Transcription for Oral Argument – March 03, 1959 in The Monrosa v. Carbon Black Export, Inc.

    Earl Warren:

    Number 178, Steamship Monrosa et al, Petitioner versus Carbon Black Export Incorporated.

    Mr. Vickery.

    E. D. Vickery:

    Mr. Chief Justice, may it please the Court.

    This case arises out of a shipment of a cargo of Carbon Black from the ports of New Orleans, Louisiana, and Houston, Texas to four different ports in Italy; Genoa, Naples, Venice, and Trieste.

    The shipment was made aboard petitioner’s vessel, the Monrosa.

    Petitioner is an Italian steamship company.

    During the course of the vessel’s voyage to Italy while the vessel was in the Atlantic Ocean, one of the plates in one of the cargo holes gave way and permitted seawater to enter into the vessel’s hole.

    As a consequence, all of the carbon black in one of the holes of the vessel was damaged by the seawater.

    Although it was all — it was destined for four separate ports in Italy.

    The force — the first port of call was Genoa, as it was all damaged, it was all discharged at Genoa as it would be impossible to make substantial delivery in the other three Italian ports.

    The liable was instituted against the vessel in rem and against the petitioner in personam in the United States District Court in Houston praying for damages somewhat in excess of $100,000 by virtue of this damage.

    As a warrant of seizure was issued for the vessel and the vessel placed under arrest by the marshal, petitioner of necessity posted the necessary corporate surety bond to secure the release of the vessel so it could continue in its normal operations.

    A claim of the owner was also filed at this time as it is usual and customary and admiralty, and maritime matters.

    Because the contract of carriage, the bill of lading, the bills of lading rather, some 27 in number insofar as they relate to this particular cause of action had a cause in them which provided that no legal proceedings for the recovery of loss or damage to this cargo should be instituted except in the courts of Genoa, Italy.

    For this reason, the petitioners filed a motion to decline jurisdiction.

    In filing this motion, the petitioners did not contest or question the basic admiralty jurisdiction of the United States District Court in Houston.

    The jurisdiction of the Court, both in personam and in rem is admitted.

    There is no question with respect to basic jurisdiction.

    However, the petitioner requested the District Court to decline to hear this litigation because the agreement made to litigate claims in Genoa, Italy was not and an unreasonable one and that in fact, the only reasonable forum for the adjudication of this controversy was in the courts of Italy, the agreed upon forum.

    The District Court granted this motion and declined jurisdiction, upon its finding that the agreement was not an unreasonable one.

    It required the respondent in the District Court and the petitioners here, however, to give appropriate security to the libelant in the total amount of the initial bond of $100,000 conditioned that the petitioner would pay any judgment that might be awarded by the Italian courts.

    This was to protect the security which the respondent was able to obtain upon a seizure of the vessel in Houston.

    So, insofar as a security for its loss, if it is able to establish liability, the respondent has full security as if the case were pending in the United States.

    The Court, in granting this motion, relied on a decision from the Court of Appeals of the Second Circuit, the William H. Muller case by which we shall talk at some length further in the argument.

    The Court, however, went somewhat further then the Court of Appeals for the Second Circuit require in the Muller case when it required the posting of a corporate surety bond to protect the security which the respondent had obtained by issuing a warrant of seizure against the vessel.

    When the matter was taken before the United States Court of Appeals for the Fifth Circuit, that Court remanded the case to the District Court primarily on two grounds.

    First of all, that the agreement to adjudicate claims in Genoa, Italy only was void as contrary to public policy.

    And secondly, on the grounds that the agreement in the contract of carriage, the bill of lading, was not sufficient to cover in rem actions against the vessel itself as well as in personam actions against the owners of the vessel.

    So, we turned first to the question of whether or not an agreement such as this, upon a particular forum for the litigation of any controversies that might arise with respect to a particular shipment of cargo, aboard a foreign vessel, is valid and enforceable or whether it is as the Court of Appeals below held contrary to the public policy.

    This is a clause contained in all (Inaudible)

    E. D. Vickery:

    This is a clause that is contained as far as I know in all of the bills of lading of this particular foreign ship owner and I think a similar clause is very universal insofar as most foreign ship owners are concerned.

    (Inaudible)

    E. D. Vickery:

    Clauses, so far as I know, with the experiences that I have had, the American Steamship Companies that I have represented have not had such clauses in them whether any American companies do or not, I don’t know.

    (Inaudible)

    E. D. Vickery:

    They are not recognized such agreements or not recognized in Italy because of a specific enactment of the Italian legislature that such clauses are void.

    Of course, we make no contention here that had Congress said such an agreement was void that we could enforce it.

    Hugo L. Black:

    Well, is there any — has there been any exclusion in any acts of Congress?

    E. D. Vickery:

    The only Act of Congress that relates to this problem is the United States’ Carriage of Goods by Sea Act which was passed in 1936.

    It — it’s exactly the same almost word for word for the so-called Brussels Convention which was an international agreement with respect to Carriage of Goods by Sea Act and almost all maritime nations have now ratified that — that particular convention.

    Now, insofar as the question of whether or not this matter was considered by Congress at the time the Carriage of Goods by Sea Act was passed, which I assume that’s what Mr. Justice Black is getting at.

    Hugo L. Black:

    That was one thing and in other laws whether there has been any proposals to amend the Act which gives jurisdiction to the courts, via lawsuit.

    E. D. Vickery:

    The only proposals that I know of to amend the acts with respect to jurisdiction of controversy such as this have arisen in the proceedings before the Maritime Law Association of the United States, which is of course an organization of admiralty and maritime lawyers and in the application for the writ of certiorari which we filed, we put excerpts from the — from the proceedings before the Maritime Law Association and in those a specific — a specific wording of the statute was suggested in a majority report I believe by Mr. Longley, the amicus curiae and the Court permitted to file a brief yesterday in this particular case.

    He suggested that the Maritime Law Association sponsor a bill in Congress to expressly make such clauses as this invalid and void.

    And at the meeting, I believe, it was November of 1957, if my recollection served me correctly, the Maritime Law Association voted that proposal down by vote of 70 to 30 or something as I recall the vote.

    It was a — those meetings do not constitute a very substantial portion of the membership of the association but that was the action at that particular time.

    Now, with respect to whether Congress has considered such clauses as this and whether or not the Congress has given us any expression on these particular clauses, we have only the Carriage of Goods by Sea Act to go by and we can only look at certain portions of the legislative history because it does not appear that these jurisdictional clauses or these clauses to litigate claims in a particular forum were specifically considered by the Congress.

    The only indication we have that Congress was aware of agreement such as this is contained in the fact that they were very conscious about following the Brussels Convention.

    They were very conscious of being uniformed in the enactment of the United States Carriage of Goods by Sea Act insofar as all of the acts in other maritime countries were concerned.

    They were also aware and the legislative history amply reflects this, that the Australian Carriage of Goods by Sea Act and the Canadian Carriage of Goods by Sea Act, both contains provisions which prohibited such agreements as this.

    Now then, Canada has since amended its Act and has taken out the prohibition which eliminates — which prohibited agreements such as this and its Act, and it was doing that at approximately the same time that the Congress of the United States was considering the Carriage of Goods by Sea Act.

    Now, with respect to that, the Court of Appeals for the Second Circuit, in considering the Muller case, expressly states that had Congress intended for agreement such as this to be invalid and they intended to adopt in effect the minority rule of Canada and Australia rather than the majority rule of the rest of the maritime nations which permitted such agreements then the second — the Court of Appeals for the Second Circuit says they would have done it in plain and unequivocal language that they wouldn’t have left it to implication.

    Felix Frankfurter:

    When you said the other maritime nations, what does the English law permits them?

    E. D. Vickery:

    The English law permits them.

    Felix Frankfurter:

    Did the Brussels Convention deal with this problem?

    E. D. Vickery:

    No, sir.

    Felix Frankfurter:

    So that — that was left free at that time.

    By the way, had we ratified the Brussels Convention?

    E. D. Vickery:

    Yes, sir, on two separate occasions.

    Felix Frankfurter:

    (Inaudible)

    E. D. Vickery:

    Yes, sir.

    E. D. Vickery:

    I don’t recall and what the difference was but the Senate ratified it twice.

    Felix Frankfurter:

    The convention, it came out of the Brussels Convention?

    E. D. Vickery:

    Yes, sir.

    Felix Frankfurter:

    The whole of it?

    E. D. Vickery:

    Yes, sir.

    This was — the Carriage of Goods by Sea Act was considered to be a supplement to eliminate any questions of that is applying to any and all shipments out of the United States.

    There seem to be some question with —

    Felix Frankfurter:

    But you just they do allow them.

    E. D. Vickery:

    Not so far as I know.

    Felix Frankfurter:

    But you just said they do allow them in contact.

    E. D. Vickery:

    It’s my — it’s my understanding that —

    Felix Frankfurter:

    But it’s not — it’s not authorized specifically nor specifically prohibited.

    E. D. Vickery:

    That’s correct.

    Felix Frankfurter:

    And it has not come up that you indicate in the Court, is that right?

    E. D. Vickery:

    No, sir.

    Felix Frankfurter:

    But do the English — do the English line was supposed like this?

    E. D. Vickery:

    Yes, sir.

    The ones that I have seen to —

    Felix Frankfurter:

    Scandinavian countries?

    E. D. Vickery:

    Yes, sir.

    The two of the Circuit — two of the Court of Appeals’ cases from the Second Circuit involved Swedish and Norwegian vessels and they both have clauses such as this.

    It’s an almost — I think I’m safe in saying it’s an almost universal clause insofar as foreign vessels are concerned, whether it is a sharp blade of competition and the unfavorable bargaining position that an American ship owner finds himself in and competing for the international market which causes him to leave in that.

    I don’t know.

    But as I say, the ones that I have seen in American bills do not contain agreements such as this.

    Felix Frankfurter:

    Do you happen to know whether — although I think you said our lines, the American lines do not have such a restrictive agreement.

    Do you happen to know when a suit — is when — if a suit in foreign countries with the American lines raised the question of forum non conveniens?

    That’s an old admiralty law on that long before the common law court.

    E. D. Vickery:

    Yes, of course, I’m familiar with Mr. Justice Frankfurter’s opinion in which — in the Consumers Import case which he discusses that question that this Court has endorsed that rule expressly except in cases where an American citizen is involved and you indicated in your opinion in that case that if appropriate security is given and in personam jurisdiction in the foreign country is permitted that in fact, I guess you would call it dictum because we’re not necessarily the decision in the case, you say that forum non conveniens would permit a transfer under those circumstances.

    So I think that without any question, what you are thinking of here is that even without the agreement, the Court under the doctrine of forum non conveniens, if it had considered Italy to be the more convenient forum could have sustained the motion of the petitioners here for the motion was made in the alternative on the basis of the agreement or forum non conveniens and I believe this Court has both questions before it at this time.

    Earl Warren:

    Is there any reason — is there any reason why our people wouldn’t use that kind of a contract or that kind of a clause in order to have the cases heard in our Court as the same as other countries do or theirs?

    E. D. Vickery:

    I’m frank to say I was not aware that they didn’t have that clause until I got the checking into it in connection with this case, the dealing with bill of lading involving American ship owners for 10 years until I got involved in this case.

    I didn’t realize they even have such a clause.

    What the reason would be, I don’t know unless it is a fact that — because of the difference in the cost of operations particularly with respect to laborer and things to that nature, the Americans were in an unfavorable bargaining position.

    That may be the answer to it.

    I just don’t know.

    Now then, in considering the question of public policy and why Congress might not have thought it appropriate to include such a specific agreement as this, I have already mentioned to the Court first of all the Congress is concern that we have uniformity among the maritime nations and their adoption of what I would call the majority rule of such agreement as this were not excluded in the acts, but there is still another.

    There is still another reason behind Congress’ action in this regard as I see it and that would be Congress’ desire to encourage American shippers to ship on American ships.

    Now, if American shippers are interested in litigating any claims they might have for loss or damage to their cargo, which are being shipped abroad, they in effect have a choice by shipping on American ships they can sue in American courts.

    If they want to ship on foreign ships and the foreigners say, “In return for your shipping on my ship, I am requiring you to agree to litigate your claims in Italy,” then they ought to be relegated to the courts of Italy.

    And in this particular case, there is no question about what the — about what the respondent in this case had a choice or one of the largest American steamship companies in the country operate vessels out of these same ports, to the ports of Italy each two weeks, every month out of the year.

    So, it’s not a question of the respondent having to take this or not having any choice.

    It’s not something that’s forced on the responded against his will.

    Potter Stewart:

    That as you say is true in this particular case, but would it always be true?

    E. D. Vickery:

    No.

    I — I am certain that it would not always be true, but the shipper is adequately protected as long as the rule obtains that the agreement is valid only if reasonable.

    Now then, if it reaches the point where a shipper in effect doesn’t have a choice, and is forced to take such an agreement, then the District Court in the exercise of its sound discretion can say this agreement is unreasonable because the shipper in this particular case didn’t have an opportunity to ship any other way.

    You force this down his throat without his consent.

    As long as the courts require that the agreement be reasonable, it —

    And at what time?

    Is it (Inaudible)

    E. D. Vickery:

    Well, the question of reasonableness, if the Court please, it turns on similar questions that you — the question similar to the doctrine of forum non conveniens.

    What if it is a reasonable stipulation and if it is a convenient forum that is the primary test as to the reasonableness of the agreement.

    This one was for Genoa, one of the courts of call on this particular vessel where part of the cargo was destined to be discharged.

    Now, I don’t think that any District Court would hold if this agreement says you have to litigate only in Siberia, that any court would hold that to be a reasonable agreement or even London, England.

    It might not be a reasonable agreement.

    That’s something addressed to the sound discretion of the District Court.

    And in determining the question of the reasonableness of the agreement, the Court looks primarily to what has to be done in order to establish the libellant’s case or in order for the ship owner to establish its defenses.

    Now then, to look at the reasonableness of this agreement, rather quickly and rather basically and to get it in the very sharp contrast, let’s imagine if you will that we’re preparing to try this case on the merits for the cargo damage.

    There are only two real issues in this lawsuit.

    First of all, was the vessel owner, did the vessel owner used due diligence to make the vessel seaworthy before and at the beginning of the voyage as required by the United States Carriage of Goods by Sea Act?

    E. D. Vickery:

    And secondly, if petitioners did not use that diligence, what is the amount of damages to which the respondents are entitled for the damage to this cargo?

    Those are the only two issues in this case, first on the question of diligence to make the vessel seaworthy — seaworthy before and at the beginning of the voyage.

    Let’s separate that into two parts.

    First of all, before the beginning of the voyage, where is the evidence going to come from to establish diligence before the commencement of the voyage?

    It can come only from Italy.

    Where does it come from?

    It comes from members of the vessel’s crew to reside in Italy and sail on Italian ships.

    Secondly, it comes from petitioner’s shore-based personnel in Italy who are responsible for periodic surveys and periodic inspections of the vessel in Italy.

    Thirdly, it comes from records of the petitioners, records of the Italian ship owner that are available only in Italy.

    Fourthly, it comes from Italian surveyors who are present and periodic, annual or semiannual inspections of the vessel.

    They reside and are available only in Italy.

    Fifth, it may come from records of Italian shipyards where repairs to this vessel have been made from time to time.

    And sixth, it may come from personnel of the same Italian shipyards.

    Not a single order of evidence on this diligence of the ship owner to make this vessel seaworthiness before the commencement of this voyage is available in the United States.

    It’s all got to come from Italy on — sir?

    Charles E. Whittaker:

    (Inaudible)

    E. D. Vickery:

    The voyage commenced in Italy.

    Charles E. Whittaker:

    (Inaudible)

    E. D. Vickery:

    The — the voyage, the roundtrip voyage of the vessel was from Italy to the United States and return.

    Charles E. Whittaker:

    (Inaudible)

    E. D. Vickery:

    So far as the shipper is concerned, there is an appreciable conflict as to where the voyage began.

    I’m willing to assume, for the sake of argument on the reasonableness of the agreement as counsel or respondent contends, that the beginning of this voyage as to them was Houston and New Orleans where the cargo was loaded.

    Charles E. Whittaker:

    (Inaudible)

    E. D. Vickery:

    It — it has some bearing and I wasn’t going to overlook that.

    I just hadn’t gotten to it yet.

    Our obligation is twofold on diligence before and at the beginning of the voyage.

    That is the statutory language.

    It’s not — it’s not — that counts to Carriage of Goods by Sea Act.

    These points I’ve been talking about here is before the beginning of the voyage which would be while the vessel was in Italy.

    Hugo L. Black:

    How long do you think it would take in the ordinary course of events for a shipper to use the — passed out in the District Court whether or not it’s reasonable for him to sue in this country under the jurisdiction of the District Court and to have that tried out to the Court of Appeals and then up here?

    E. D. Vickery:

    Well, I think this case, except for — this case is probably a reasonably good example of about how long it would take.

    There was some delay.

    There was some delay in my office for which I’m personally responsible of about six months immediately after the institution of this litigation.

    Hugo L. Black:

    How long had it been there?

    E. D. Vickery:

    This damage occurred in January of 1956.

    It was loaded in December of 1955 and the vessel got to Italy in January of 1956.

    So it was instituted in April of 1956 upon the return of the Monrosa to the Port of Houston, and there was some delay as I say for about six months in my office, sir.

    Hugo L. Black:

    About three years?

    E. D. Vickery:

    Yes, sir.

    Hugo L. Black:

    After that, if he loses here, he can go in Italy.

    E. D. Vickery:

    Well, in this particular case, he has a suit pending now in Italy while the District Court was considering the question.

    The one year limitation period was about to elapse and the respondent requested us to give him an extension of time in which to sue in Italy and it was readily granted.

    William O. Douglas:

    The Italian court will be handling it.

    E. D. Vickery:

    As I understand, it is just simply hasn’t reached on the docket over there.

    Our correspondents in Italy tell us that it is simply it’s not been reached and it’s my understanding that the respondents are not interested in pressing that until they see the end result here.

    They obviously would much prefer to have it in this country and they’re not pressing it and obviously, send its money out of the Italian ship owner’s pocket, if he loses the case he’s not too anxious to get it decided either.

    So it’s just pending in Italy.

    We gave an extension of time after the District Court’s decision in the case.

    However, we decline to give any further extension and told them that we thought it appropriate with the decision declining jurisdiction that they institute a necessary suit.

    Charles E. Whittaker:

    (Inaudible)

    E. D. Vickery:

    I think it — I think it bears on the enforceability of it rather than the legal aspects of it.

    Charles E. Whittaker:

    (Inaudible)

    E. D. Vickery:

    Yes sir.

    Charles E. Whittaker:

    (Inaudible)

    E. D. Vickery:

    Well, I don’t know why the Fifth Circuit considered the in rem question once they declare the agreement to be void.

    They give — they gave the Italian ship owner in personam jurisdiction when they do that and the decision with respect to the in rem aspect of it was wholly unnecessary to give the respondent the jurisdiction which they were asking for.

    It was not necessary.

    Once that — if this agreement is void, well then of course, they’re perfectly free to proceed.

    In Houston, they have in personam jurisdiction there.

    There isn’t any question about it.

    E. D. Vickery:

    They could get in personam jurisdiction over the same shipper today if they wanted.

    I mean the same steamship company.

    (Inaudible)

    E. D. Vickery:

    They have it, yes, sir.

    (Inaudible)

    E. D. Vickery:

    Yes sir, yes, sir.

    There are both in rem and in personam jurisdictions in Houston.

    There is no question at all about that, not at all.

    Now, may — Mr. Justice Whittaker, may I address my remarks again to you with respect to this question of diligence and the reasonableness with respect to it before and at the beginning of the voyage.

    As I pointed out, it is a double burden and the items that I listed before related to — before the commencement of the voyage back in Italy.

    At the beginning of the voyage, there are two possible sources of evidence on that particular issue.

    First of all, insofar as the ship owner is concerned, it will have to rely primarily on the testimony of the master and the chief mate of the vessel itself on that particular issue because they were the men who were charged with the ultimate responsibility for making whatever inspections were necessary with respect to the seaworthiness of the vessel while it was away from its home territory and its home port.

    Now then, there is possible — there is possibly another witness or two in Houston or in New Orleans, which might have some evidence to give in this case if a question of proper or improper stowage comes up.

    The facts as I know them, there is not any question that stowage involved and unless there is a question of proper and improper stowage, I don’t contemplate the necessity of any witnesses at all in either Houston or New Orleans, but at best on just a part — part of the evidence on this one half of the respondent’s burden.

    It’s possibly available in the ports of New Orleans and Houston.

    Now the other issue in the case, all of the evidence is available only in Italy.

    That is with respect to the amount of damages to which the respondents would be entitle if petitioners are liable for the loss and damage which has occurred.

    Charles E. Whittaker:

    (Inaudible)

    E. D. Vickery:

    Market value of the goods at destination.

    And they have to establish not only the market value of the goods at destination.

    They also have to establish the nature and the extent of the laws in what the value of the cargo was in its damaged condition and I think if that there is a — may possibly based on experts in this country that the Court might permit to testify with respect to market value in Italy, but primarily, your market value on the date of the arrival of the vessel would have to come from my Italian sources.

    So, as I see it, all of the evidence in connection with the two issues that are really involved in this case except possibly for a witness or two in Houston or in New Orleans is — is obtainable primarily in Italy.

    I’m not saying that we can’t go over there and get their positions and come back over and try this lawsuit.

    That’s not what I’m saying.

    What we are considering is the reasonableness or the convenience of the forum and I think obviously, that the convenience — the only convenient forum in the case is in fact the courts of Genoa, Italy where all of the evidence or substantially all of the evidence rather is readily available for live witnesses and this includes on the — on the amount of damages, this includes respondents on witnesses.

    They had surveyors present at the time that a cargo arrived.

    They ascertain the nature and extend of it and they’re all witnesses with respect to the amount of damages are available in Italy to the court there.

    Of course, we have some translation problems involved somewhere along the line whether the case is tried in America or is tried in Italy.

    Something is going to have to be translated, but I submit that with substantially all of the evidence coming from my Italian witnesses that the translations that would be necessary would be substantially greater in the United States than in Italy, or as I see the matter, primarily, the only translation to be involved would be of the bill of lading.

    William J. Brennan, Jr.:

    What’s the Italian tribunal?

    E. D. Vickery:

    I can’t tell you the name of the tribunal, Mr. Justice Brennan.

    William J. Brennan, Jr.:

    Was it Italian jurisdiction, I believe so.

    E. D. Vickery:

    The clause does not specifically designate the tribunal.

    It just says in Genoa.

    William J. Brennan, Jr.:

    Where is it pending, in Genoa?

    E. D. Vickery:

    It is pending in Genoa, but what court is this pending in, in Genoa, I do not know.

    I do not have copies of those court papers.

    So what — to just exactly what tribunal it’s in, I do not know, but I would assume that the able counsel for the respondent has it in — has it in a court familiar with maritime matters.

    What’s your view of the Second Circuit cases?

    These contracts are good unless they’re shown to be unreasonable or that they must be showing to be reasonable before they’re in court?

    E. D. Vickery:

    Well, it seems to me — well, I just have to be perfectly frank with you, Mr. Justice Harlan.

    That’s a problem that’s worried me ever since I got in this case, whether we had the burden to show that the agreement was reasonable or they had the burden to show that it was unreasonable.

    We have tried to carry the burden so the Court would have the information available and I think the record amply reflects the circumstances and the reasonableness of the agreement regardless of whose burden if the — whose burden it is.

    The Court I believe and the Second Circuit speaks in terms of the agreement being enforceable if it is not shown to be an unreasonable one.

    I believe that’s why —

    You’re not in this case, I take it, just specifically as a forum non conveniens case almost, authority for the Court to treat it on that as if it worse of the case.

    E. D. Vickery:

    I believe it is that substantially — substantially, that’s what it is except it is — it is a much stronger case, it seems to me than a pure case of forum non conveniens because here are two parties who have agreed by contract, the American courts and the Italian courts both have jurisdiction, but by agreement, we in effect agree that the Italian courts should have more convenient forum.

    That’s where we want to litigate this case.

    So I think it’s stronger even than your forum non conveniens cases.

    (Inaudible)

    E. D. Vickery:

    I think that’s true.

    And you can have that, in fact, you can have the right to (Inaudible)

    E. D. Vickery:

    I think it is binding under the McAllister case so this Court is binding unless clearly erroneous.

    It’s a fact binding.

    It’s an ascertainment by the district judge that under all of the facts and circumstances of this case, the reasonable forum is Italy.

    Now, under McAllister, unless the District Court is clearly erroneous in that determination, then I believe it’s binding on the Court of Appeals, I believe it’s binding on this Court.

    Felix Frankfurter:

    But they should have the difference between the duty to determine with an agreement between two parties is reasonable and if it is reasonable to withstand and having the Court decide as a matter of discretion taking all factors into consideration that’s on the whole better of the case be tried in the forum in which it was brought rather than be sent somewhere else.

    They are two very different things.

    E. D. Vickery:

    There are two very different things but the thing I think that creates the confusion in the minds of some, including myself is a fact that the same factors that determine the reasonableness of a forum, determine the reasonableness of the agreement.

    Felix Frankfurter:

    I would agree you say that, I think what you said earlier is true certainly both — both namely whether an agreement between the parties to have the litigation determined in a designated tribunal and a determination by the forum that instead of be tried elsewhere have any common factor that on the whole administration justice would be furthered if the litigation is held somewhere else than in the forum that it is brought to be sure.

    Felix Frankfurter:

    But it makes a difference whether what weight you attach to the agreement of the parties and again, the determination of the Court and its discretion that on the whole it’s more desirable to have the litigation disposed of elsewhere.

    What you said earlier is true, but if the party themselves agreed, you have a — you have elements behind that consideration.

    If you haven’t got it, the Court does it of its own volition.

    E. D. Vickery:

    That’s quite true.

    I see the distinction the Court is making now.

    I did — I didn’t see it earlier.

    Charles E. Whittaker:

    May I —

    E. D. Vickery:

    Yes sir.

    Charles E. Whittaker:

    I might have heard to say that one who discovers was not enforceable.

    E. D. Vickery:

    Not so far.

    As I am concerned, I don’t think so.

    I submit that a party who makes such an agreement to the — to a contract should not be able to say that it is not enforceable.

    Charles E. Whittaker:

    Well, what parties who are able to conclude forth in (Inaudible)

    E. D. Vickery:

    I believe so.

    Yes, sir.

    I think so very strongly.

    Felix Frankfurter:

    But your answer assumed that the parties aren’t beating its arm’s length and that the situation doesn’t contain with itself an ingredient that negatives in the — in most instances as conclusion.

    E. D. Vickery:

    I assume.

    Felix Frankfurter:

    That’s the — that’s the problem in this case really, but to this Court can say on the whole the parties are not free to do what they plea, but the public element enters into it which you decide to answer in this case.

    There are other ships, other lines in which you could have shipped these goods.

    Charles E. Whittaker:

    (Inaudible) that does not have to do with permission rather than with reasonableness of the company.

    Parties are — find themselves stuck to the coverage that they didn’t actually deemed to negotiate (Inaudible)

    E. D. Vickery:

    Yes.

    Charles E. Whittaker:

    Right?

    E. D. Vickery:

    I would think so.

    Yes, sir.

    So therefore, as I understand you (Inaudible) unreasonable.

    E. D. Vickery:

    Yes, I think — I think that’s true.

    They would be attempting to set it aside on the basis of not being able to make an arm’s length deals between the parties, and therefore, something that can do coercion of fraud.

    Felix Frankfurter:

    Yes, but not proof of coercion as to the particular contrast that in the generality of instances, there’s a presence of element that is so likely to operate with a certain amount of unfairness on one side, but the law says this type of an agreement is not to be tolerated.

    E. D. Vickery:

    That’s correct.

    Felix Frankfurter:

    That’s the theory —

    E. D. Vickery:

    Yes sir.

    Felix Frankfurter:

    — on which there is hostility to this kind or reason, right?

    E. D. Vickery:

    That is correct.

    Yes sir.

    Hugo L. Black:

    May I ask you what law would govern if it’s tried in Italy?

    What statute of limitation would govern?

    E. D. Vickery:

    The United States Carriage of Goods by Sea Act is expressly made to apply to this shipment in the bill of lading, and it would undoubtedly have to be applied by the Italian court.

    But for the extension of time granted by the petitioners in this case, the one year statute of limitations in the United States Carriage of Goods by Sea Act would apply in Italy.

    The contract — the bill of lading expressly makes the United States Carriage of Goods by Sea Act apply to this shipment.

    There is no question, but what the petitioner has been able to adequately institute its case in Italy, well within time, there’ll be no question of limitations with respect to the further assertion of the claim in this case.

    There can’t be any question about it.

    Potter Stewart:

    So the same substantive law would apply in the courts of Genoa, Italy as would apply in the District Court of Houston, Texas?

    E. D. Vickery:

    The bill of lading expressly says that if there are any terms to the bill of lading that are contrary to United States Carriage of Goods by Sea Act, those terms are void.

    So, the Carriage of Goods by Sea Act expressly applies.

    It has to be applied by the court in Italy.

    One other — one other point which I should like to try to consider with the Court and that relates to the holding of the Court of Appeals for the Fifth Circuit that this agreement is not broad enough to cover in rem as well as in personam actions.

    I want to make just a few comments with respect to this and save my remaining time, if I may, for a possible rebuttal tomorrow.

    First of all, a look at the clause, a reading of the clause will indicate the obvious intent of the party that any legal proceedings be started in Genoa, Italy that they be handled and carried on in Genoa, Italy.

    Only if we can — if we uphold the validity of the agreement, only if we can say that the vessel itself is a separate and distinct legal entity can you divorce the in rem action from the in personam action and permit the in rem action to proceed in Houston while the in personam action proceeds in Italy.

    Now then, this Court has — had occasion to consider the personification of the vessel on a separate legal entity theory on many occasions.

    I decided three cases in my initial brief, not from this particular Court, but dealing with the Longshoremen’s Act.

    They’re from Courts of Appeals, one from the Court of Appeals for the Fifth Circuit, even in which a longshoreman employed by the vessel had sued the vessel owner, and was held to not be able to maintain that suit because of the exclusive remedy provisions of the Longshoremen and Harbor Workers’ Compensation Act.

    And Genoa’s counsel then sues the vessel in rem and says that my employer was the vessel owner and I am now suing the vessel in rem.

    It is a separate and a distinct entity and the Court, in all of those cases, struck it down and said, “No,” that when you talk about the vessel owner and the vessel itself.

    In effect, what this Court has said when you say the vessel owner is not liable, but the vessel is liable, you’re talking in riddles.

    (Inaudible)

    E. D. Vickery:

    That is correct.

    Hugo L. Black:

    Or instead of cargo, this has been a passenger getting on in Houston, would the same rule apply?

    E. D. Vickery:

    No sir.

    You mean with respect to where the suits could be brought?

    Hugo L. Black:

    Yes.

    E. D. Vickery:

    Unless — unless there is something in the passenger ticket to the —

    Hugo L. Black:

    Suppose it was in the passenger ticket, the same rule applies?

    E. D. Vickery:

    I’m not aware of any cases in which that has occurred.

    I simply can’t —

    Hugo L. Black:

    What — what would be the difference?

    E. D. Vickery:

    I can’t — I can’t think of any.

    Felix Frankfurter:

    Isn’t in the passenger’s ticket?

    E. D. Vickery:

    I don’t know, sir.

    I can’t answer the question.

    I simply don’t know.

    Potter Stewart:

    I said certainly it might be — your argument is valid that each of these things has to be looked at from the point of view of its reasonableness that there may — might be a great deal of evidence between the reasonableness of this freight bill of lading as between — I guess contrasting with the passenger’s ticket.

    E. D. Vickery:

    I would think so if you have passengers from America on the vessel and they’re all in United States very evidenced with respect to the circumstances the injury or such as to make it readily available here.

    That’s the reason for the requirement that the agreement be reasonable before the courts will enforce it.

    Now then, this —

    Hugo L. Black:

    What that gets down to is a question whether when a court has a jurisdiction and can decline it on the ground that they think it’s unreasonable to exercise.

    E. D. Vickery:

    That is correct.

    Felix Frankfurter:

    Is that correct if it’s — I don’t see —

    E. D. Vickery:

    Well, if I understood his question — if I understood his —

    Felix Frankfurter:

    If a contract is valid and you’re bond by the contract not to sue, you had given jurisdiction.

    You can be enjoined from suing there if the contract is valid, not because it’s out of grace that the Court doesn’t want you to sue there but because you bound yourself not to sue there.

    William J. Brennan, Jr.:

    Well if the amount involves — what gives jurisdiction and so forth, I should suppose that the reason the Court can decline jurisdiction is on the ground if the parties themselves if there agreement is reasonable, can oust the Court’s jurisdiction?q

    E. D. Vickery:

    Well, I don’t think it’s a — I guess you’d call it an ouster of jurisdiction, my side of this case that there’s a little bit of repugnance over that phrase to me, if the Court please.

    Felix Frankfurter:

    It’s like all the question agreements.

    We always use this language of “ouster of court”.

    E. D. Vickery:

    Ouster of the Court’s jurisdiction.

    Felix Frankfurter:

    If an arbitration agreement is valid and you contracted the way your right to exercise the right to go to a court.

    Hugo L. Black:

    It’s a question of whether you can contract to it whether Congress intended for you to contract the way your right to exercise your power in court to sue.

    Felix Frankfurter:

    That determines whether it’s a valid contract.

    If it’s a valid contract you can.

    Hugo L. Black:

    You can if you read the — the statute is correct, you have to mean that, yes, but you have to get — read the statute.

    You got to read the statute which — gives jurisdiction.

    E. D. Vickery:

    That’s correct.

    Hugo L. Black:

    They have jurisdiction.

    E. D. Vickery:

    They have jurisdiction, he have jurisdiction in this case in a District Court.

    There any question about it.

    Limitation had not run.

    They would still be in a position of being able to start a claim in that same jurisdiction.

    Thank you.

    Earl Warren:

    We’ll recess now Mr. —