ORLEANS MATERIALS AND EQUIPMENT CO. v. Isthmian Lines, Inc., Civ. A. 11934

• Decision Date: 08 January 1963
• Docket Number: Civ. A. 11934,11935.
• Citation: 213 F. Supp. 325
• Parties: ORLEANS MATERIALS AND EQUIPMENT CO. Inc. v. ISTHMIAN LINES, INC. ORLEANS MATERIALS AND EQUIPMENT CO. Inc. v. MATSON NAVIGATION COMPANY.
• Court: U.S. District Court — Eastern District of Louisiana

213 F. Supp. 325

ORLEANS MATERIALS AND EQUIPMENT CO. Inc. v. ISTHMIAN LINES, INC.

ORLEANS MATERIALS AND EQUIPMENT CO. Inc. v. MATSON NAVIGATION COMPANY.

Civ. A. 11934, 11935.

United States District Court E. D. Louisiana.

January 8, 1963.

Henry J. Read, New Orleans, La., for plaintiffs.

Edward S. Bagley, New Orleans, La., for defendants.

Daniel Leach, Washington, D. C., Kathleen Ruddell, New Orleans, La., for the United States.

FRANK B. ELLIS, District Judge.

On January 12, 1962, Orleans Materials and Equipment Co., Inc., a Louisiana Corporation, brought an action in the Civil District Court for the Parish of Orleans, State of Louisiana, seeking judgment against Matson Navigation Co., a foreign corporation doing business in Louisiana, in the amount of $18,871.80, and against the Isthmian Lines, Inc., a foreign corporation doing business in Louisiana, in the amount of $1,547.58, due to alleged overcharges on a contract of marine shipping. On January 31, 1962, both defendants removed their cases to this court stating that this court had original jurisdiction of this case as one arising under Acts of Congress regulating commerce, the Intercoastal Shipping Acts. 46 U.S.C.A. § 844 et seq. and the Shipping Act, 46 U.S.C.A. § 801 et seq. Plaintiffs have not sought a remand to the state court. The District Judge consolidated the cases on motion of the parties. The cause is here now on defendants' motion to dismiss or stay proceedings and alternatively for summary judgment dismissing the complaint. The United States has intervened as defendant and likewise seeks a dismissal or stay of the proceedings. The alleged basis for dismissing or staying the proceedings is that primary jurisdiction of this suit is vested in the Federal Maritime Commission. In addition defendants state that they are entitled to judgment as a matter of law.

Since this case has given rise to a variety of problems, a detailed statement of the alleged facts is in order. Between May 25, 1960, and January 21, 1961, plaintiff made some nine shipments of structural steel aboard defendants' ships from New Orleans to Honolulu. Defendants are members of the Atlantic and Gulf Hawaiian Conference, a group of steamship lines organized to engage in this trade under an agreement filed with, and approved by, the Federal Maritime Commission pursuant to the provisions of Section 15 of the Shipping Act, 46 U.S.C.A. § 814. These carriers are subject to the Intercoastal Shipping Act, 46 U.S.C.A. § 843, the application of this Act being provided by 46 U.S.C.A. § 845b. In addition they are subject to the Shipping Act as provided by 46 U.S. C.A. § 847. The tariff in issue, Freight Tariff 13, had been published by the carriers and submitted to, and approved, by the Federal Maritime Board.

Under the tariff the freight rate is $29.26 per ton of 2000 pounds or $29.96 per 40 cubic feet, whichever is the greater. When plaintiff's steel arrived at dockside the steel was weighed and measured to determine which basis would bring the higher rate. It is this measurement which causes the dispute. Instead of applying the rate to the cubic footage which the steel actually occupied in the hold of the ship, the defendants measured the steel at dockside assuming that each angled member of each consignment of steel occupied a squared area. However, in the hold of the ship the defendants actually "nested" the steel which caused it to occupy a smaller cubic space than it did at dockside. Plaintiff says that had the "nested" space been used, the rate by weight would have been higher and that defendants are merely using a device to create larger cubic space so that the rate will be higher. In short, plaintiff says the space rate should be applied to displacement in the hold and defendants say the rate should be applied to displacement at dockside of the cargo in the condition delivered by the shipper.

Plaintiff apparently challenged defendants' rates, but, since it was under contractual obligations to deliver the steel in Hawaii, it paid the rate under protest. It now seeks to recover the alleged overcharge. Defendants deny the overcharge and claim, moreover, that the challenge to the freight bill must be presented initially to the Federal Maritime Board.

At every step in a case, a court must be wary of its jurisdiction. All the more should it be wary when an action is removed from state court.¹ The rule is clear that if, at any time during a litigation, it is discovered that a case was improvidently removed, the court must remand the case to the state court regardless of whether a motion to remand is made by the parties.² The parties may not confer jurisdiction on the court by acquiescence in the removal.³

Removal may be effected only when the District Court would have had original jurisdiction of the matter.⁴ That original jurisdiction must spring from the petition filed in state court and not from the petition for removal.⁵ Defendants' petition for removal invokes § 1337 of Title 28 as its grounds for removal. This case, says defendant, rises under an "Act of Congress regulating commerce", i. e. the Intercoastal Shipping Act and the Shipping Act. These statutes do not give this court original jurisdiction of this case.⁶ In the first instance, there is nothing in either statute specifically conferring jurisdiction on this Court. In the second instance, the concept "arising under an Act of Congress", better known as "Federal question", has a circumscribed meaning. To present a federal question, the decision of the case must directly affect, or derive its power from, a federal statute.⁷ In the words of Justice Cardozo, "The right or immunity must be such that it will be supported if the Constitution or laws of the United States are given one construction or effect, and defeated if they receive another."⁸ This is not the case here. Plaintiff's petition suggests a conflict over the the Atlantic Hawaiian tariff and the result on the substantive issue will in no way directly affect, or be affected by, either federal statute.⁹ Moreover, the very federal statutes which defendants submit give this Court original jurisdiction are the statutes which they now submit initially preclude this Court's jurisdiction.

The distinction between original and primary jurisdicton must be made clear. A case may properly originate in the Federal District Court on one jurisdictional ground and then, for different reasons, be referred to an administrative agency which has primary jurisdiction.¹⁰ In certain instances, administrative law completely divests the District Court of jurisdiction it might normally have had.¹¹ However, primary jurisdiction in an administrative agency based on a federal statute does not pre-suppose that the District Court had original jurisdiction. There must be some independent source of original jurisdiction.¹² Clearly, the Shipping Act might divest this Court of primary jurisdiction, but it does not confer original jurisdiction.¹³

The petition in the state court discloses diversity of citizenship between plaintiff and defendants. The claim against Matson Navigation Co. is for $18,871.80 and satisfies the jurisdictional amount. However, the claim against the Isthmian Lines, Inc., is only for $1,547.58 and is below the requisite amount. Consequently, the suit against Matson Navigation was properly removed¹⁴, while the suit against Isthmian must be remanded to state court.

The remaining question is whether primary jurisdiction of this suit is vested in the Federal Maritime Board. Defendant maintains that this case involves a challenge to the reasonableness of a tariff and hence should first be addressed to the Maritime Board.¹⁵ Plaintiff states that this case does not come within the jurisprudence defining primary jurisdiction and, in any event, reference to the Federal Maritime Board will deny plaintiff a trial by jury.

The Shipping Act does not, in terms, vest primary jurisdiction in the Federal Maritime Board. However, judicial reference of principles enunciated under the Interstate Commerce Act to the Shipping Act¹⁶ and the growth of the primary jurisdiction concept under the Shipping Act make it necessary to consider whether this Court should proceed with this case without initial reference to the Maritime Board.

The rule of primary jurisdiction places initial exclusive jurisdiction of a controversy in the Federal Maritime Board when the case presents a question peculiarly addressed to the expertise of the Board or a question whose solution directly affects the uniformity sought by the Shipping Act.¹⁷ The issue has generally been: does the matter actually in controversy call for determination of certain issues by a Congressionally-created agency before being finally decided by a court? In an effort to set guideposts of jurisdiction, reference has been had to the "fact question v. law question" test,¹⁸ the "construction of a document v. fact-finding" test,¹⁹ and the "uniformity-expertise" test.²⁰,²¹ Without presuming to state a general rule distilled from the cases, it does seem safe to say that the spectrum of cases as applied to the case before this court runs from Great Northern Railway Co. v. Merchants Elevator Co., 259 U.S. 285, 42 S.Ct. 477, 66 L.Ed. 943, to United States v. Western Pacific Railroad Co., 352 U.S. 59, 77 S.Ct. 161, 1 L.Ed.2d 126.²²

In Great Northern Railway, Justice Brandeis held that the question of whether a shipment of grain was included under the general rule or the exception of a tariff was a simple matter of construction of a document for the Court and should not be referred to the Interstate Commerce Commission. In Western Pacific, Justice Harlan held that the question of whether a shipment of steel casings filled with napalm gel was included in the term "incendiary bombs" in a railroad tariff required initial determination by experts and was within the exclusive primary jurisdiction of the Interstate Commerce Commission. The Court in ...