Pennsylvania Railroad Company v. Dillon

• Decision Date: 26 June 1964
• Docket Number: 17756,17755,17764.,No. 17753,17753
• Citation: 335 F.2d 292
• Parties: The PENNSYLVANIA RAILROAD COMPANY et al., Appellants, v. C. Douglas DILLON, Secretary of the Treasury, et al., Appellees. AMERICAN UNION TRANSPORT, INC., Appellant, v. C. Douglas DILLON, Secretary of the Treasury, et al., Appellees. AMERICAN-HAWAIIAN STEAMSHIP COMPANY, Appellant, v. C. Douglas DILLON, Secretary of the Treasury, et al., Appellees. SEATRAIN LINES, INC., Appellant, v. C. Douglas DILLON, Secretary of the Treasury, et al., Appellees.
• Court: U.S. Court of Appeals — District of Columbia Circuit

335 F.2d 292 (1964)

The PENNSYLVANIA RAILROAD COMPANY et al., Appellants, v. C. Douglas DILLON, Secretary of the Treasury, et al., Appellees.

AMERICAN UNION TRANSPORT, INC., Appellant, v. C. Douglas DILLON, Secretary of the Treasury, et al., Appellees.

AMERICAN-HAWAIIAN STEAMSHIP COMPANY, Appellant, v. C. Douglas DILLON, Secretary of the Treasury, et al., Appellees.

SEATRAIN LINES, INC., Appellant, v. C. Douglas DILLON, Secretary of the Treasury, et al., Appellees.

Nos. 17753, 17755, 17756, 17764.

United States Court of Appeals District of Columbia Circuit.

Argued January 2, 1964.

Decided June 26, 1964.

Certiorari Denied December 14, 1964.

Mr. Warren E. Baker, Washington, D. C., for appellant in No. 17756, argued for all appellants.

Mr. Joseph F. Healy, Jr., Washington, D. C., also entered an appearance for appellant in No. 17764.

Mr. Jeremiah C. Waterman, Washington, D. C., was on the brief for appellants in No. 17753.

Mr. George F. Galland, Washington, D. C., was on the brief for appellant in No. 17755.

Mrs. Amy Scupi, Washington, D. C., also entered an appearance for appellant in No. 17755.

Mr. Gordon P. MacDougall, Washington, D. C., was on the brief for appellant in No. 17756.

Miss Kathryn H. Baldwin, Atty., Dept. of Justice, with whom Messrs. David C. Acheson, U. S. Atty., and Alan S. Rosenthal, Atty., Dept. of Justice, were on the brief, for appellees Dillon, Nichols and Bureau of Customs.

Mr. Daniel M. Gribbon, Washington, D. C., with whom Mr. William H. Allen, Washington, D. C., was on the brief, for appellee Sea-Land Service, Inc.

Mr. Robert L. Randall, Washington, D. C., also entered an appearance for appellee Sea-Land Service, Inc.

Before BAZELON, Chief Judge, and FAHY and BURGER, Circuit Judges.

Certiorari Denied December 14, 1964. See 85 S.Ct. 437.

BURGER, Circuit Judge:

Complaints filed by appellants in the District Court sought declaratory judgments and injunctive relief to require appellees to apply Section 27 of the Merchant Marine Act of 1920, 41 STAT. 999 (1920), as amended, 74 STAT. 321 (1960), 46 U.S.C. § 883 (Supp. IV 1963), and pertinent Treasury Regulations adopted pursuant thereto¹ so as to deny enrollment in the coastwise trade to certain vessels. The District Court dismissed the complaints and these appeals followed.

Three of appellants are coastwise carriers who compete directly with Sea-Land Service, Inc., intervenor, the present owner of the two vessels claimed by appellants to have been illegally enrolled; other appellants are railroads who were granted leave to intervene in the District Court on their allegation that their transcontinental freight carriage is also in substantial direct competition with Sea-Land. Appellants claim that the documenting of two rebuilt vessels by the Commissioner of Customs was a violation of Section 27 of the Act as amended in 1960² and its relevant regulations. The 1960 amendment, except for a limited saving clause,³ prohibited enrollment and licensing of vessels "jumboized" by installation of foreign-made midbodies, or midsections. Additionally, two appellants contend that an administrative hearing was required on the eligibility of the vessels for enrollment.⁴

Appellees contend that appellants are without standing to challenge in court the actions of the Commissioner of Customs and the Secretary of the Treasury with regard to these ships. We agree. Allegation of a legally protected right is a constitutional predicate of standing to attack governmental action. See Joint Anti-Fascist Refugee Committee v. McGrath, 341 U.S. 123, 140, 71 S. Ct. 624, 95 L.Ed. 817 (1951) (principal opinion); Gonzalez v. Freeman, 118 U.S. App.D.C. ___, ___, 334 F.2d 570, p. 576. The tests for standing to review agency action are found in Section 10(a) of the Administrative Procedure Act:

"Right of Review

"Any person suffering legal wrong because of any agency action, or adversely affected or aggrieved by such action within the meaning of any relevant statute, shall be entitled to judicial review thereof."

60 STAT. 243 (1946), 5 U.S.C. § 1009(a) (1958). Under this statute appellants have standing to challenge agency action which they allege either causes them a "legal wrong," or adversely affects or aggrieves them "within the meaning of any relevant statute."

"Legal wrong," as we have only recently noted, is the invasion of a legally protected right. See Gonzalez v. Freeman, supra, 117 U.S.App.D.C. at ___ n.6, 334 F.2d at 576 n.6. Thus, in order to make out a claim of "legal wrong" under Administrative Procedure Act § 10(a), appellants must assert some legally protected right to be free of the competition provided by the two vessels whose documentation they are challenging. This court has very recently spoken on this aspect of standing. When "Congress has not given them any such standing by express or implied provision of statute * * *, mere economic competition made possible by governmental action (even if allegedly illegal) does not give standing to sue in the courts to restrain such action. Tennessee Electric Power Co. v. Tennessee Valley Authority, 306 U.S. 118, 59 S.Ct. 366, 83 L.Ed. 543 (1939); Alabama Power Co. v. Ickes, 302 U.S. 464, 58 S.Ct. 300, 82 L.Ed. 374 (1938); Kansas City Power & Light Co. v. McKay, 96 U.S.App.D.C. 273, 225 F.2d 924, cert. denied, 350 U.S. 884, 76 S.Ct. 137, 100 L.Ed. 780 (1955)." Texas State AFL-CIO v. Kennedy, 117 U.S.App.D.C. 343, 345, 330 F.2d 217, 219 (1964). For purposes of standing in this case, the sufficiency of appellants' allegations of "legal wrong" thus depend upon congressional intent to bestow upon them a legal right to protection from such competition.

Similarly, appellants' allegations that they are "adversely affected or aggrieved * * * within the meaning of any relevant statute" depend for their adequacy as to standing upon the congressional purpose underlying the relevant sections of the Merchant Marine Act of 1920, as amended. See Kansas City Power & Light Co. v. McKay, 96 U.S.App.D.C. at 281, 225 F.2d at 932; Jaffe, Standing to Secure Judicial Review: Private Actions, 75 HARV.L.REV. 255, 287 (1961). Under either leg of Section 10(a), therefore, since appellants complain only of government enhancement of economic competition, they must demonstrate "statutory aid to standing." Cf. United Milk Producers of New Jersey v. Benson, 96 U.S.App.D.C. 227, 229, 225 F.2d 527, 529 (1955).

Appellants contend that the statutory scheme of barring from the coastwise trade ships which were rebuilt abroad or whose midbodies were built abroad was intended to promote on equal terms competition between coastwise carriers and thus to protect and benefit the shipowner appellants in the interests they are asserting. That some competitive parity is one of the consequences of these statutory provisions is doubtless correct; but the broad congressional purpose underlying these particular enactments was to stimulate and encourage resort to domestic shipyards and thus ensure them sufficient business so that their facilities would be adequate in time of national emergency. Congress did not intend to insulate coastwise carriers from other domestic competition or to give them any legally protected right to be free of such competition.⁵

Finally, appellants rely upon Atchison, Topeka and Santa Fe Railway Company v. Summerfield, 97 U.S.App.D. C. 203, 229 F.2d 777 (1955), cert. denied, 351 U.S. 926, 76 S.Ct. 779, 100 L.Ed. 1456 (1956), for the proposition that their prior investments in American-built and -rebuilt ships as prerequisite to engaging in the coastwise trade give them standing to challenge action which may diminish the value of those investments. The Atchison case does not stand for that proposition; there this court found that the appellant railroads had standing to challenge a decision of the Postmaster General to conduct an experimental program of transporting first-class mail between certain points via air rather than the customary rail route. It was the "present interest stemming from substantial investments in cars and equipment" so purchased that gave "the plaintiff railroads * * * standing in court to challenge the alleged illegal act." 97 U.S.App.D.C. at 205, 229 F.2d at 779. Essential to Atchison's standing in that case was the fact that the Postmaster had "explicitly discontinued the use of certain railroad equipment," which the railroads had "acquired * * * because they were commanded to do so by law." Ibid. Although appellants are required to use vessels built or rebuilt in American yards in order to engage in the coastwise trade, any economic loss from competition with carriers who secure the benefit of lower construction costs under the saving clause of the 1960 amendment is a speculative injury which does not afford a basis for standing.⁶

We therefore conclude that under Administrative Procedure Act § 10(a), 60 STAT. 243, 5 U.S.C. § 1009(a) (1958), appellants' allegations do not sufficiently claim that appellants have suffered a "legal wrong" or have been "adversely affected or aggrieved * * * within the meaning of" the Merchant Marine Act of 1920, as amended.

Affirmed.

1 19 C.F.R. §§ 3.2(f), 3.28(d) (1964).

2 "No vessel of more than five hundred gross tons which has acquired the lawful right to engage in the coastwise trade, by virtue of having been built in or documented under the laws of the United States, and which has later been rebuilt, shall have the right thereafter to engage in the coastwise trade, unless the entire rebuilding, including the construction of any major components of the hull or superstructure of the vessel, is effected within the United States, its Territories (not including trust territories), or its possessions * * *."

74 STAT. 321 (1960), 46 U.S.C. § 883 (Supp. IV 1963).

3 "This Act shall be effective from the time of enactment hereof: Provided, however, That no vessel shall be deemed to have lost its coastwise privileges as a result of the amendments made by this...