298 F.Supp. 1339 (S.D.N.Y. 1969), 66 Civ. 3617, Sabre Shipping Corp. v. American President Lines, Limited

Docket Nº:66 Civ. 3617.
Citation:298 F.Supp. 1339
Party Name:SABRE SHIPPING CORPORATION, Plaintiff, v. AMERICAN PRESIDENT LINES, Ltd., et al., Defendants. JAPAN LINE, Ltd., et al., Third-Party Plaintiffs, v. AMERICAN PRESIDENT LINES, Ltd., et al., Third-Party Defendants.
Case Date:April 24, 1969
Court:United States District Courts, 2nd Circuit, Southern District of New York

Page 1339

298 F.Supp. 1339 (S.D.N.Y. 1969)



AMERICAN PRESIDENT LINES, Ltd., et al., Defendants.

JAPAN LINE, Ltd., et al., Third-Party Plaintiffs,


AMERICAN PRESIDENT LINES, Ltd., et al., Third-Party Defendants.

No. 66 Civ. 3617.

United States District Court, S.D. New York

April 24, 1969

Page 1340

Strasser, Spiegelberg, Fried & Frank, New York City, for plaintiff (Leon Silverman and Victor Friedman, New York City, of counsel).

Shearman & Sterling, New York City, for defendant American President Lines, Ltd. and third-party defendants American President Lines, Ltd., Barber-Fern-Ville Lines, Blue Sea Line, Fearnley & Eger, Inc., Fern-Ville Lines, Lykes Bros. Steamship Co., Inc., A. P. Moller-Maersk Line, Prince Line, Ltd., States Marine Lines, Inc., United Philippine Lines, Inc., United States Lines, Inc., Waterman Steamship Corporation and Wilh. Wilhelmsen (Robert L. Clare, Jr., and Dennis J. Helms, New York City, of counsel).

Kirlin, Campbell & Keating, New York City, for defendant P & O Orient Lines (Elmer C. Maddy, New York City, of counsel).

Hill, Betts, Yamaoka, Freehill & Longcope, New York City, for defendants Six Trans-Pacific Lines (Edwin Longcope, New York City, of counsel).

Baker & McKenzie, New York City, for defendants and third party plaintiffs Japan Line, Ltd., Kawasaki Kisen Kaisha, Mitsui O.S.K. Lines, Nippon Yusen Kaisha, Ltd. and Yamashita-Shinnihon Steamship Company, Ltd. (Philip A. Ryan, Washington, D.C., and Gregor F. Gregorich, New York City, of counsel).

Poles, Tublin, Patestides & Stratakis, New York City, for third party defendant Marchessini Lines (John G. Poles, New York City, of counsel).


RYAN, District Judge:

Fourteen third-party defendants, who have settled with plaintiff and obtained from it dismissal of the complaint without prejudice and a Covenant Not to Sue, move for summary judgment on the third party complaint. Familiarity with the claim in suit is presumed from the decision of this Court in Sabre Shipping Corp. v. American President Lines, Ltd., 285 F.Supp. 949; aff'd Japan Line, Ltd. et al. v. Sabre Shipping Corporation, 407 F.2d 173, 2nd Circuit, January 14, 1969. It is sufficient on this motion to state that the complaint charged third party plaintiffs and moving defendants with violation of the antitrust laws and destruction of plaintiff's business by a conspiracy effected under authority of the Japan Conference and the Hong Kong Conference, of which all defendants were members, under F.M.C. Agreement 3103 and 5700 respectively. Plaintiff alleged that the reduction of rates effected by defendants which drove it out of the

Page 1341

competition was outside the scope of the Conference and the protection of the Shipping Act. The main complaint was filed in October, 1966; in July, 1967 twenty-five of the defendants settled with plaintiff and entered into a 'Covenant Not to Sue and Covenant Not to Sue Further', and a Stipulation of Dismissal without prejudice as to those defendants was so ordered by the Clerk of the Court in August, 1967. The third party plaintiffs, who are five Japanese Lines, refused to join in the settlement and, after moving unsuccessfully for summary judgment to dismiss the complaint, filed the third party complaint on August 14, 1968 against some of the settling defendants.

The third party complaint alleges that the third party action arises under the Sherman and Clayton Antitrust Acts; that it is brought pursuant to Rule 14, F.R.Civ.P., against 17 third party defendants who are or may be liable to third party plaintiffs for all or part of the plaintiff's claim against them; and that all these defendants as well as the two Conferences maintain a place of business in this District. After reciting the background of the suit-- the claim by SABRE in the main suit that defendants conspired to monopolize the trade and drive SABRE out of business; the settlement and Covenant between the plaintiff and 25 defendants; and the dismissal of the action against these defendants; and the third party plaintiffs' exclusion from the settlement and dismissal-- the third party complaint pleads two separate counts.

In the first count, third party plaintiffs deny liability to plaintiff SABRE but claim that, if the acts alleged were done, they were the joint acts of third party plaintiffs and third party defendants; that any liability of the Japanese Lines will arise out of their joint acts; and that the third party defendants will be liable to the Japanese Lines, if SABRE recovers a judgment against them.

In the second count, third party plaintiffs plead Paragraph 32 of the Conference Agreement, to which they and some of the third party defendants were signatories, which they allege provides that if legal expenses are incurred by a member as a result of compliance with the agreement and without fault on the part of the member, these expenses shall be prorated among the members for the account of the Conference. They then charge that any expenses and damages incurred by the five Japanese Lines and any liability to SABRE will have been incurred as a result of compliance with F.M.C. 3103 and will arise out of the joint acts of the third party plaintiffs and third party defendants who will be liable over to them. The prayer for relief asks judgment for all sums that may be adjudged in favor of SABRE, together with the 'legal expenses' in both actions.

The moving defendants have interposed a general denial and plead the following affirmative defenses: failure to state a claim; failure to perform a condition precedent to establishing liability under Paragraph 32 of the Agreement; failure to join the Conference and all the signatories to the Agreement; reduction of the SABRE claim by payment from the third party defendants; and reduction of third party plaintiffs' claim in that they represent 9 signatories to the Agreement. Five of the defendants further defend on the ground that they were never signatories to the Agreement durment during any relevant period. All defendants admit that they maintain an office for the transaction of business here.

The Covenant Not to Sue and Not to Sue Further entered into on July 27, 1967 between SABRE as Covenantor and 25 defendants as Covenantees, among whom are the two Conferences, recites that the consideration for its execution does not represent full compensation for the damages alleged to have been suffered by plaintiff, that plaintiff retains all claims and causes of action against the other defendants in the action, and that the agreement is not a release to any

Page 1342

person whosoever including the Covenantees in the pending suit or any other suit.

The theories underlying the first count of the third party complaint according to the Japanese Lines are that, since the liability charged under SABRE's...

To continue reading