ASSOCIATED-BANNING COMPANY v. United States

• Citation: 101 US App. DC 151,247 F.2d 557
• Decision Date: 21 June 1957
• Docket Number: No. 13384.,13384.
• Parties: ASSOCIATED-BANNING COMPANY et al., Petitioners, v. UNITED STATES of America, Federal Maritime Board, Respondents, Matson Navigation Company, Encinal Terminals, Matson Terminals, Inc., Matcinal Corporation, Intervenors, Howard Terminal, Intervenor.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

101 US App. DC 151, 247 F.2d 557 (1957)

ASSOCIATED-BANNING COMPANY et al., Petitioners, v. UNITED STATES of America Federal Maritime Board, Respondents Matson Navigation Company, Encinal Terminals, Matson Terminals, Inc., Matcinal Corporation, Intervenors, Howard Terminal, Intervenor.

No. 13384.

United States Court of Appeals District of Columbia Circuit.

Argued February 4, 1957.

Decided June 21, 1957.

Petition for Rehearing Denied September 12, 1957.

Mr. Odell Kominers, Washington, D. C., with whom Messrs. J. Alton Boyer, Henry G. Fischer, Washington, D. C., and Allan P. Matthew, San Francisco, Cal., were on the brief, for petitioners, and intervenor, Howard Terminal.

Mr. Donald F. Melchior, Atty., Dept. of Justice, with whom Mr. Daniel M. Friedman, Atty., Dept. of Justice, was on the brief, for respondent United States of America.

Mr. Charles H. Weston, Atty., Dept. of Justice, also entered an appearance for respondent United States of America.

Mr. Edward Aptaker, Chief, Regulation Branch, Federal Maritime Board, with whom Messrs. Edward D. Ransom, Gen. Counsel, Federal Maritime Board, and James L. Pimper, Asst. Gen. Counsel, Federal Maritime Board, were on the brief, for respondent Federal Maritime Board.

Mr. Alvin J. Rockwell, San Francisco, Cal., with whom Messrs. Hugh T. Fullerton and Tom Killefer, San Francisco, Cal., were on the brief, for intervenors Matson Nav. Co., and others.

Mr. Noble McCartney also entered an appearance for intervenor Encinal Terminals.

Before WILBUR K. MILLER, WASHINGTON and DANAHER, Circuit Judges.

DANAHER, Circuit Judge.

Petitioners¹ seek review of an order of the Federal Maritime Board approving Agreement No. 8063² which had been filed with the Board on January 9, 1956, pursuant to the requirements of § 15 of the Shipping Act, 1916, 46 U.S.C.A. § 814 (1952).³ After notice of the filing of the Agreement had been published in the Federal Register, petitioners lodged a protest, and, six days later, filed a formal complaint to which the Board assigned Docket No. 788.

Summarized, the protest alleged that Agreement No. 8063 was not a "true and complete" memorandum as required by § 15 of the Act; otherwise charged in some detail that the new corporation, Matcinal, would enjoy an unfair competitive advantage over petitioners; and finally, that the Agreement, in violation of § 15 of the Act, would be detrimental to commerce, unjustly discriminatory and unfair as between carriers and ports and would further violate §§ 14, 16, 17 and 20 of the Shipping Act, 1916.

Matson and Encinal responded, separately but in substance: that the protest failed to disclose any ground for disapproval of the Agreement; petitioners had failed to show any injury to themselves; Matcinal had not yet engaged in business and had taken merely preliminary steps in that operations would commence only upon approval of Agreement No. 8063; § 15 afforded petitioners no basis for relief; the Agreement does not violate the Shipping Act of 1916; petitioners have a complete remedy under the Act if there should be "in the future any illegal discrimination or any other conduct violative of the Shipping Act of 1916"; and, finally, that petitioners really sought, as a coalition controlling the stevedoring business in San Francisco, "to prevent or delay the emergence of a competitor."

The complaint, Docket No. 788, charged that the Agreement to form Matcinal contemplated future activities and organization beyond what had been disclosed and that the Agreement failed to constitute a "true and complete memorandum," because of which "the activities of Matson and Encinal * * * are unlawful and in violation of § 15 * * * of the Act." The complaint further alleged that through the business relationships of Encinal and Matson, the formation of Matcinal would constitute an unjust and unfair device or means through which illegal rebates of ocean freights would result, and accordingly, the plan in practice, will be unjustly discriminatory and otherwise violate §§ 14, 15, 16, 17 and 20 of the Shipping Act, 1916.

With answers denying the charges in the complaint, Matson and Encinal also filed a joint motion to dismiss. Petitioners thereupon prayed the issuance of an order of investigation upon the protest, and its consolidation with Docket No. 788.

The Board by its April 6, 1956, order granted the motions of Matson and Encinal and dismissed the complaint "as to all allegations except the allegation under § 15 of the Shipping Act, 1916, as amended, to the effect that respondents are operating under an agreement which has not been filed for approval under said section."⁴ These review proceedings followed.⁵

The protest and the complaint before the Board, as well at the petition here, proceed primarily from and depend upon allegations as to invalid Board action within the applicable provisions of § 15 of the Shipping Act, 1916.⁶ Petitioners ask us to set aside and annul the Board's order of April 6, 1956, approving Agreement No. 8063; to remand the proceedings to the Board for the purpose of holding a hearing with respect to whether or not Agreement No. 8063 is a true and complete copy of the agreement between the parties thereto, and if so, whether the agreement shall be approved by the Board; or alternatively that we transfer the proceedings to an appropriate United States District Court for de novo hearing and determination; and that we set aside or annul the Board's order "granting in part" the respondents' motion to dismiss the complaint in Docket No. 788, with remand thereafter to the Board that a hearing be held upon all allegations of the complaint. Unless there be a "final" order by the Board, we lack jurisdiction to grant relief in any of the particulars sought.⁷

We may preliminarily note that § 15 of the Act specifically authorizes the Board to "disapprove, cancel, or modify any agreement * * * whether or not previously approved by it, that it finds to be unjustly discriminatory or unfair * * * or to be in violation of this chapter * * *." Moreover, agreements which shall have been approved "shall be lawful only when and as long as approved by the Board," and there is provision, in the event of violation, for a penalty of $1,000 for each day such violation may be continued, to be recovered by the United States in a civil action. In addition, "any person may file with the Board a sworn complaint setting forth any violation of this chapter by a * * person subject to this chapter, and asking reparation for the injury, if any, caused thereby,"⁸ and, after hearing, upon determination by the Board of any such violation, the Board may order "full reparation to the complaint for the injury caused by such violation." Present, clearly, are possibilities of remedial action, both public and private in character, as a deterrent to premature action by any persons subject to the Act.

Quite apart, however, Agreement No. 8063 not only spoke of the desire of the parties "to create a corporation," which they agreed they "shall cause * * to be formed" upon a proposed subscription basis "subject to the prior approval of any regulatory agencies whose approval is required," but said further:

"Section 6: To the extent that the activities of the Corporation are subject to the prior approval or permission of any regulatory body the parties agree to use, and to cause the Corporation to use, all reasonable efforts to obtain such approval or permission.

"Section 7: The parties recognize that the agreement herein contained requires the approval of the Federal Maritime Board under Section 15 of the Shipping Act, 1916, as amended (Title 46, United States Code, Section 814). Unless and until such approval is obtained, this agreement shall be of no force or effect."

The Act in § 15 provides for the filing of a "true copy, or, if oral, a true and complete memorandum, of every agreement * * *." The Board certainly knows as the section provides, that the term "agreement" includes "understandings, conferences, and other arrangements." Its order dismissed the complaint as to all allegations except that under § 15 "to the effect that respondents are operating under an agreement which has not been filed for approval under said section."

So far as the Board approved Agreement No. 8063, it was passing first upon a written document calling for the creation of a corporation to be formed. Unless that plan met with Board approval, the agreement as the parties themselves provided, supra, was to be of no force and effect. Next, the Board's order clearly contemplated proceedings looking to an ascertainment of whether or not the respondents "are operating"; if operating, whether or not under an "agreement" as defined in the Act; if under such an agreement in writing, whether or not the Board had a "true copy," including "understandings, conferences, and other arrangements"; if oral, whether or not there had been filed "a true and complete memorandum" of every "agreement" as defined in the section.

The language of the Act does not look inanely to mere Board approval of a business agreement for the formation of a corporation, but to an agreement the aims and purposes of which will bring it within the reach of the section and the results therein proscribed. Thus, not the extent of any or all "operating" was the objective of the hearing, but only such as occurred "under," i. e., pursuant to, an agreement subject to approval and required to be approved to effectuate the purposes of the section. The continuing power of the Board and the sanctions and penalties provided, considered with the section as a whole, make clear the intent of Congress as to the basis upon which the exemption may be accorded. Thus the Board ordered a hearing to determine whether or not Respondents had been operating under such circumstances and pursuant to such an "agreement" as came within the section, that is, the whole agreement, whatever it may be.

We do not know what the result...