American Export Lines, Inc. v. United States

• Decision Date: 02 December 1963
• Citation: 224 F. Supp. 580
• Parties: AMERICAN EXPORT LINES, INC., Libelant, v. UNITED STATES of America, Respondent.
• Court: U.S. District Court — Southern District of New York

224 F. Supp. 580

AMERICAN EXPORT LINES, INC., Libelant, v. UNITED STATES of America, Respondent.

United States District Court S. D. New York.

December 2, 1963.

Chadbourne, Parke, Whiteside & Wolff, New York City, Kominers & Fort, Washington, D. C., for libelant. Frank B. Stone, New York City, J. Franklin Fort, T. S. L. Perlman, J. Lovering Truscott, Washington, D. C., of counsel.

Robert M. Morgenthau, U. S. Atty., for the S. D. New York, for respondent. Louis E. Greco, Attorney in Charge Admiralty & Shipping Section Dept. of Justice, New York City, Leavenworth Colby, Lawrence F. Ledebur, Attys. Admiralty & Shipping Section Dept. of Justice of counsel.

WEINFELD, District Judge.

The libelant, contending that no triable issues of material fact exist, moves for summary judgment, declaring, with respect to the charter-party between it and the respondent, (1) that in the calculation of "net voyage profits," the profits and losses over the entire charter period are to be determined by the so-called "cumulative accounting" method, and (2) that libelant is entitled, under the charter and the applicable statute, to a ten per cent return on its "capital necessarily employed" in the operation of the chartered vessel in "an amount to be agreed, or in the absence of an agreement, to be determined by a commissioner of this Court."

As to the latter claim, the Government does not deny that the libelant is entitled to a ten per cent return on "capital necessarily employed" in the operation of the vessel; what it disputes is the amount of "capital necessarily employed," which must first be determined before the return can be calculated. The Government, in regulations promulgated under statutory authority in determining the "capital necessarily employed," takes into account (1) adjusted net worth to reflect capital actually available in the various operations of the charters, including the charter operation itself, and (2) allocation of such adjusted net worth to determine the amount available for charter operations as distinguished from other operations of the charterer. The libelant challenges the Government's definition as unreasonable, unfair and arbitrary. It proposes different formulae under which the basic capital sum would be larger than that reached by the Government's definition, and which would yield to the libelant a greater allowance before reaching the amount of profits to be divided equally between it and the Government. According to libelant, the...