United States Nav. Co. v. Cunard SS Co.

• Decision Date: 18 May 1931
• Docket Number: No. 5.,5.
• Parties: UNITED STATES NAV. CO., Inc. v. CUNARD S. S. CO., Limited, et al.
• Court: U.S. Court of Appeals — Second Circuit

50 F.2d 83 (1931)

UNITED STATES NAV. CO., Inc. v. CUNARD S. S. CO., Limited, et al.

No. 5.

Circuit Court of Appeals, Second Circuit.

May 18, 1931.

COPYRIGHT MATERIAL OMITTED

Rumsey & Morgan, of New York City (Mark W. Maclay and John Tilney Carpenter, both of New York City, of counsel), for appellant.

Burlingham, Veeder, Fearey, Clark & Hupper, of New York City (Roscoe H. Hupper and Burton H. White, both of New York City, of counsel), for appellees.

Before L. HAND, SWAN, and AUGUSTUS N. HAND, Circuit Judges.

AUGUSTUS N. HAND, Circuit Judge (after stating the facts as above).

The agreement set forth in the amended bill of complaint involved a violation of the Sherman Anti-Trust Act, 15 USCA §§ 1-7, 15 (United States v. Pacific & Arctic Co., 228 U. S. 87, 33 S. Ct. 443, 57 L. Ed. 742; Thomsen v. Cayser, 243 U. S. 66, 37 S. Ct. 353, 61 L. Ed. 597, Ann. Cas. 1917D, 322), at least in the absence of approval by the United States Shipping Board pursuant to section 15 of the Shipping Act (46 USCA § 814). That section provides that "all agreements * * * made after the organization of the board shall be lawful only when and as long as approved by the board, and before approval or after disapproval it shall be unlawful to carry out in whole or in part, directly or indirectly, any such agreement. * * * Every agreement * * * lawful under this section shall be excepted from" the Sherman Act and acts supplementary thereto.

As the amended bill alleges that the agreement declared upon has not been approved by the Shipping Board, the exception of section 15, supra, does not apply. From this the plaintiff reasons that an injunction may be properly sought under section 16 of the Clayton Act (15 USCA § 26), which permits "injunctive relief" to private parties "against threatened loss or damage by a violation of the anti-trust laws."

Prior to the enactment of the Clayton Act in 1914, private parties were not entitled to sue to restrain violations of the anti-trust laws embodied in the Sherman Act, though injunctive remedies were given to the government. Minnesota v. Northern Securities Co., 194 U. S. 48, 24 S. Ct. 598, 48 L. Ed. 870; Paine Lumber Co. v. Neal, 244 U. S. 459, 37 S. Ct. 718, 61 L. Ed. 1256.

The Clayton Act (section 16 15 USCA § 26) provided that no person except the United States shall be entitled "to bring suit in equity for injunctive relief against any common carrier subject to the provisions of the Act to regulate commerce * * * in respect of any matter subject to the regulation, supervision, or other jurisdiction of the Interstate Commerce Commission." The Supreme Court has held that, while a combination of land carriers to fix rates may be illegal under the Anti-Trust Acts and may be prosecuted by the United States, private shippers who claim to be injured must seek their remedies against such a combination under the Interstate Commerce Act (49 USCA § 1 et seq.) (Texas & Pac. Ry. v. Abilene Cotton Oil Co., 204 U. S. 426, 27 S. Ct. 350, 51 L. Ed. 553, 9 Ann. Cas. 1075), and cannot even sue at law to recover damages under section 7 of the Sherman Act (15 USCA § 15). Keogh v. C. & N. W. Ry. Co., 260 U. S. 156, 43 S. Ct. 47, 67 L. Ed. 183. The court below, per Caffey, J., applied similar reasoning to the combination of water carriers in the case at bar and dismissed the amended bill on the ground that relief must be sought under the Shipping Act.

It is said, however, that the Clayton Act contains no exception, affecting carriers by water, similar to the provision of section 16 of that act (46 USCA § 815), which precludes private parties from bringing suits for injunctive relief against land carriers in respect to matters subject to the regulation of the Interstate Commerce Commission; and it is therefore insisted that the general provisions of the Clayton Act permitting injunctive relief to private parties "against threatened loss or damage by a violation of the antitrust laws" should have unrestricted application to the case at bar.

But, in spite of the provision in the Interstate Commerce Act that nothing contained therein "shall in any way abridge or alter the remedies * * * existing at common law or by statute" and that its provisions "are in addition to such remedies" (49 USCA § 22), the Supreme Court has been increasingly disposed to treat the remedies afforded by that act as exclusive. Private parties have not been permitted to pursue remedies under the Sherman or Clayton Acts in cases where the Interstate Commerce Act has afforded relief. Keogh v. C. & N. W. Ry. Co., 260 U. S. 156, 43 S. Ct. 47, 67 L. Ed. 183.

It is said that remedies afforded by the Interstate Commerce Act have been held exclusive only where administrative questions have been involved. But the tendency to extend the requirement of a preliminary inquiry by the Commission is significant.

In the pioneer case of Texas & Pac. Ry. v. Abilene Cotton Oil Co., 204 U. S. 426, 27 S. Ct. 350, 51 L. Ed. 553, 9 Ann. Cas. 1075, it was held that the right of a shipper to recover a rate alleged to be discriminatory must first be submitted to the Interstate Commerce Commission. Robinson v. Balt. & Ohio R. R., 222 U. S. 506, 32 S. Ct. 114, 56 L. Ed. 288, and Mitchell Coal Company v. Penna. R. R. Co., 230 U. S. 247, 33 S. Ct. 916, 57 L. Ed. 1472; were to the same effect. In Balt. & Ohio R. R. v. Pitcairn Coal Co., 215 U. S. 481, 30 S. Ct. 164, 54 L. Ed. 292, Morrisdale Coal Co. v. Penna. R. R., 230 U. S. 304, 33 S. Ct. 938, 57 L. Ed. 1494, and Midland Valley R. R. v. Barkley, 276 U. S. 482, 48 S. Ct. 342, 72 L. Ed. 664, the question involved was whether a distribution of coal cars to shippers was discriminatory. It was held that the matter involved preliminary action by the Interstate Commerce Commission, in the absence of which the federal courts had no jurisdiction. Similarly in Tex. & Pac. Ry. Co. v. American Tie Co., 234 U. S. 138, 34 S. Ct. 885, 58 L. Ed. 1255, the question whether a tariff established by the Commission covered a certain product was held to require the preliminary determination of the Commission. In Northern Pac. Ry. Co. v. Solum, 247 U. S. 477, 38 S. Ct. 550, 62 L. Ed. 1221, the reasonableness of a practice of routing shipments was held to involve preliminary administrative determination. In Western & Atlantic v. Public Service Comm., 267 U. S. 493, 45 S. Ct. 409, 69 L. Ed. 753, a bill which was filed to enjoin a state commission from enforcing an order directing a railroad to maintain service on an industrial switch track was dismissed because the question was one which must first be presented to the Interstate Commerce Commission. In Board v. Great Northern Ry., 281 U. S. 412, 50 S. Ct. 391, 74 L. Ed. 936, it was held that the question whether intrastate railroad rates ordered by state authority should be set aside as working unreasonable discrimination against interstate commerce must be determined in the first instance by the Interstate Commerce Commission, and a suit to enjoin a state commission from enforcing an order as to such rates was dismissed.

In the following situations suits were allowed without preliminary resort to the Interstate Commerce Commission because pure questions of law were thought to be involved: In Pennsylvania R. R. v. Sonman Coal Co., 242 U. S. 120, 37 S. Ct. 46, 61 L. Ed. 188, the coal company sued to recover damages from the railroad on the ground that the latter had failed to supply a sufficient number of cars and had discriminated against it unjustly. It was found that conditions of traffic were normal and that the railroad had plenty of cars for the coal company if it chose to supply them. In these circumstances there was no administrative question to be passed upon. The court emphasized the fact that section 22 of the Interstate Commerce Act (49 USCA § 22) preserved such "appropriate common law or statutory remedies" as could be enforced consistently with the purpose of the act, that no administrative question was presented, and held that the claim might therefore be prosecuted without any precedent action by the Commission. In Great Northern Ry. v. Merchants' Elev. Co., 259 U. S. 285, 42 S. Ct. 477, 66 L. Ed. 943, where the question whether a tariff established by the Commission covered a certain product involved no matters of fact as it had in Tex. & Pac. Ry. Co. v. American Tie Co., 234 U. S. 138, 34 S. Ct. 885, 58 L. Ed. 1255, but only a construction of the meaning of the word "lumber" in the tariff, a suit by a shipper to recover alleged overcharges by the railroad was sanctioned without preliminary resort to the Commission. In Tex. & Pac. Ry. v. Gulf, etc., Ry., 270 U. S. 266, 46 S. Ct. 263, 70 L. Ed. 578, a direct judicial remedy was allowed under paragraph 20 of section 402 of the Transportation Act of 1920, 49 USCA § 1 (20). In Turner Lumber Co. v. C., M. & St. Paul Ry., 271 U. S. 259, 46 S. Ct. 530, 70 L. Ed. 934, the question whether the Commission had violated the Constitution in fixing so-called penalties for demurrage of cars was held properly determinable by a court without prior resort to the Commission, since it involved the jurisdiction of that body and its right to proceed at all.

It seems evident that the Supreme Court, after first holding in the Abilene Case, 204 U. S. 426, 27 S. Ct. 350, 51 L. Ed. 553, 9 Ann. Cas. 1075, that prior resort to the Commission must be had where uniformity of rates is affected by the decision of a question of fact, has proceeded far beyond the natural limitations of such a doctrine, and has, in general, insisted upon prior resort to the Commission wherever complicated questions of fact will arise and experience in technical matters is required. Thus in Midland Valley R. R. v. Barkley, 276 U. S. 482, 48 S. Ct. 342, 72 L. Ed. 664, the carrier's practice of distributing coal cars was involved. Though the question was not one of discrimination or of rates, but of the reasonableness of the practice, yet prior resort to the Commission was...