United States v. Anchor Line, Ltd.

CourtUnited States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
Writing for the CourtKirlin, Campbell & Keating, New York City, for defendants
Citation232 F. Supp. 379
PartiesUNITED STATES of America, Plaintiff, v. ANCHOR LINE, LTD., the Bristol City Line of Steamships, Ltd., Canadian Pacific Railway Co., the Cunard Steamship Co., Ltd., Furness, Withy & Co., Ltd., the Ulster Steamship Co., Ltd., (Head Line & Lord Line) and Manchester Liners, Ltd., Defendants.
Decision Date17 July 1964

232 F. Supp. 379

UNITED STATES of America, Plaintiff,
v.
ANCHOR LINE, LTD., the Bristol City Line of Steamships, Ltd., Canadian Pacific Railway Co., the Cunard Steamship Co., Ltd., Furness, Withy & Co., Ltd., the Ulster Steamship Co., Ltd., (Head Line & Lord Line) and Manchester Liners, Ltd., Defendants.

United States District Court S. D. New York.

July 17, 1964.


232 F. Supp. 380

Robert M. Morgenthau, U. S. Atty., and Louis E. Greco, New York City, for plaintiff; Gilbert S. Fleischer, New York City, of counsel.

Kirlin, Campbell & Keating, New York City, for defendants.

EDELSTEIN, District Judge.

This action was brought by the Government to recover penalties from the defendants, foreign shipping corporations, for alleged violations of Section 15 of the Shipping Act of 1916, 46 U.S. C.A. § 814.1 Section 15, hereinafter referred to as § 814, requires "common carriers by water" to file immediately for approval with the Federal Maritime Board2 copies of all "anti-competitive" agreements that fix rates or fares, allocate ports, establish working arrangements and the like, or, in general, control, regulate, prevent or destroy competition. See 39 Stat. 733, 46 U.S.C.A. § 814. The provisions of this section make it unlawful to carry out any non-competitive agreement that has not been thus filed, and the section further provides that whoever contravenes any of the provisions of this section shall be liable to a penalty of $1,000 for each day that such violation continues.

The defendants, it is alleged, are common carriers by water in the foreign commerce of the United States operating

232 F. Supp. 381
between the ports of the United Kingdom and the Great Lakes and St. Lawrence River ports in the United States and Canada. Acting on the complaint of competing lines, the Board held hearings and found that the defendant shipping companies had violated § 814 of the Act by entering into and carrying out agreements which effectuated the following: allocated ports and established joint working arrangements, fixed or regulated transportation rates in the trade between the United Kingdom and United States ports on the Great Lakes without filing immediately with the Board a "true copy" or "a true and complete memorandum" of such agreements. The Board entered an order, which was sustained on appeal, directing the defendants to desist from the violations found. See Anchor Line, Ltd. v. Federal Maritime Commission, 112 U.S.App.D.C. 40, 299 F.2d 124 (1962), cert. denied, 370 U.S. 922, 82 S.Ct. 1563, 8 L.Ed.2d 503 (1962). Thereupon, the matter was referred to the Department of Justice for appropriate action. A complaint was filed on June 7, 1962, and an amended complaint was subsequently filed on January 7, 1963.3 The defendants, all of whom are foreign corporations, were served in the Southern District of New York, where they maintained offices for the transaction of business. Jurisdiction of the court to entertain the action is based on 28 U.S.C. § 1337 (1952).4 Each of the defendants has entered a general appearance and has thereby conceded jurisdiction over its respective corporate person. What they have not conceded, however, is jurisdiction of this court over the subject matter of the action, see Fed.R.Civ.P. 12(b) (1), by reason of which they have moved to dismiss the complaint

Defendants contend that inasmuch as § 814 does not grant jurisdiction over the subject matter of an action which, they urge, involves acts of foreign corporations committed outside the territorial jurisdiction of the United States, the complaint should be dismissed. In addition, they claim that the complaint is defective in any event because it fails to allege that (1) the agreements or arrangements were entered into in the United States, (2) that shippers in the United States were affected by any of the agreements or arrangements, and (3) that ports in the United States were affected thereby. In the alternative, those defendants who are not named in paragraphs Seventh, Eighth or Ninth of the complaint have moved to dismiss those paragraphs as against them.5 But should Counts Seventh, Eighth or Ninth

232 F. Supp. 382
not be dismissed, these defendants urge that "the counts contained in paragraphs Sixth, Seventh, Eighth and Ninth should be severed from one another," on the ground that "nothing in the amended complaint indicates that these four counts arise out of the same transaction, occurrence or series of transactions or occurrences" and that no "question of law or fact common to all defendants will arise in the action."6 See Fed.R.Civ.P. 20(a), 21.7 Finally, those defendants specifically named in paragraphs Sixth, Seventh, Eighth and Ninth move for a more definite statement of the allegations contained in those paragraphs. See Rule 12(e), Fed.R.Civ.P

The broad sweep of the defendants' major contention is that § 814 is a statute of a quasi-penal nature and is sought to be applied extraterritorially so as to contravene the canon of statutory construction which dictates that an Act of Congress should be confined in its operation and effect to the territorial limits of the United States, unless a contrary intention is clearly and affirmatively expressed. See Foley Bros., Inc. v. Filardo, 336 U.S. 281, 285, 69 S.Ct. 575, 93 L.Ed. 680 (1949); American Banana Co. v. United Fruit Co., 213 U.S. 347, 357, 29 S.Ct. 511, 53 L.Ed. 826 (1909). Beechwood Music Corp. v. Vee Jay Records, 328 F.2d 728 (2d Cir. 1964). Defendants' reliance on the canon of construction set forth above might be persuasive in an appropriate context. But an examination of § 814 reveals quite clearly that Congress intended that the statute reach the activities and operations of persons such as these foreign shipping companies even beyond the territorial limits of the United States.

46 U.S.C.A. § 814 provides that its filing provisions apply to "every common carrier by water, or other person subject to this chapter." Section 1 of the Act, the definitions section, 46 U.S. C.A. § 801, defines "common carrier by water" as a "common carrier by water in foreign commerce or a common carrier by water in interstate commerce on the high seas or the Great Lakes on regular routes from port to port." The definition of person "includes corporations, partnerships, and associations, existing under or authorized by the laws of the United States, or any State, Territory, District, or possession thereof, or of any foreign country." (Emphasis supplied.) These definitions of the applicable terms of § 814 indicate a quite unmistakable and unequivocal Congressional intention that the filing and penalty provisions of § 814 were intended to apply extraterritorially to these defendant shipping companies. But the court's determination that the Statute, § 814, may be given extraterritorial effect does not resolve the real issue posed by the parties' contentions because the dispositive issue does not involve the extraterritorial application of § 814 to conduct abroad. The real issue is: May a United States statute be applied to the alleged conduct of British corporations when that conduct was devised abroad but was effectuated within the United States and allegedly had affect here? Judicial construction of related sections of the Shipping Act as well as a canvass of the relevant cases indicates that § 814 is applicable

232 F. Supp. 383
to these defendants. See Montship Lines, Ltd. v. Federal Maritime Board, 111 U.S.App.D.C. 160, 295 F.2d 147 (1961)

In Kerr Steamship Co. v. United States, 284 F.2d 61 (2d Cir. 1960), the court was concerned with § 21 of the Act, 46 U.S.C.A. § 8208 which requires every common carrier by water to file a list identifying in detail every contract made with any other common carrier by water, freight forwarder, terminal operator, stevedore, or ship's agent, if such contract involved the waterborne commerce of the United States. In overruling the objection raised by foreign carriers that the contracts should not be produced since they were located outside the United States, Judge Learned Hand stated:

"The investigation was to acquaint the Board with what were the practices of carriers engaged in commerce with the United States, and it was essential to that purpose to know what took place outside the United States as well as inside. Nobody would argue, we should suppose, that oral agreements made in other countries could have no effect upon the commerce of the United States, which was the subject being investigated." Id. at 64. (Emphasis supplied.)

And the Court of Appeals for the District of Columbia, in considering the jurisdictional reach of the Shipping Act, stated in the Montship case that "In enacting the Shipping Act, which deals with foreign as well as interstate commerce, Congress was clearly mindful of the fact that foreign flag as well as United States carriers were subject to regulation thereunder. See H.R.Rep.No. 659, 64th Cong. 1st Sess. (1916)." Montship Lines, Ltd. v. Federal Maritime Board, supra 295 F.2d at 154.

The vital principle to be applied in determining whether the United States courts have jurisdiction over foreign-flag carriers who fail to file contracts entered into abroad is whether the performance of those contracts or effectuation of those arrangements operated in this country so as to affect our foreign commerce directly and materially. See United States v. Aluminum Co. of America, 148 F.2d 416, 443-444 (2d Cir. 1945). This principle was explicitly and clearly enunciated in United States v....

To continue reading

Request your trial
4 practice notes
  • Zenith Radio Corp. v. Matsushita Elec. Indus. Co., Civ. A. No. 74-2451
    • United States
    • United States District Courts. 3th Circuit. United States District Court (Eastern District of Pennsylvania)
    • May 13, 1981
    ...(1938); Civil Aeronautics Board v. Alitalia-Li-nee Aeree Italiane, 328 F.Supp. 759 (E.D.N.Y. 1971); United States v. Anchor Line, Ltd., 232 F.Supp. 379 (S.D.N.Y.1964). Plaintiffs also suggested that the letter should be excluded under F.R.E. We denied plaintiffs' motion to strike Ambassador......
  • In re OPM Leasing Services, Inc., Bankruptcy No. 81 B 10533
    • United States
    • United States Bankruptcy Courts. Second Circuit. U.S. Bankruptcy Court — Southern District of New York
    • July 16, 1982
    ...Accord, New Home Appliance Center, Inc. v. Thompson, 250 F.2d 881, 883-84 (10th Cir. 1957); United States v. Anchor Line, Ltd., 232 F.Supp. 379 (S.D.N.Y.1964). To be sure, there is a requirement of particularized pleading mandated by Fed.R.Civ.P. 9(b). However, that requirement is reserved ......
  • In re Lee Way Holding Co., Bankruptcy No. 2-85-00661
    • United States
    • United States Bankruptcy Courts. Sixth Circuit. U.S. Bankruptcy Court — Southern District of Ohio
    • August 15, 1989
    ...The General Motors Corp., supra; Nagler v. Admiral Corporation, 248 F.2d 319 (2d Cir.1957); United States of America v. Anchorline Ltd., 232 F.Supp. 379 The Court is satisfied that joinder of the Defendants is proper under Federal Rule of Civil Procedure 20(a) and Bankruptcy Rule 7020, and ......
  • State ex rel. Blond v. Stubbs, No. KCD
    • United States
    • Missouri Court of Appeals
    • September 7, 1972
    ...cases have reached a contrary conclusion: Wilson v. Algeria, 5 Mis.2d 520, 165 N.Y.S.2d 190; United States v. Anchor Line, Ltd., D.C., 232 F.Supp. 379; Potter v. Clark, 19 A.D.2d 585, 240 N.Y.S.2d 495; Mullett v. Sacco, 47 Misc.2d 441, 262 N.Y.S.2d 796. Bearing also on this general problem,......
4 cases
  • Zenith Radio Corp. v. Matsushita Elec. Indus. Co., Civ. A. No. 74-2451
    • United States
    • United States District Courts. 3th Circuit. United States District Court (Eastern District of Pennsylvania)
    • May 13, 1981
    ...(1938); Civil Aeronautics Board v. Alitalia-Li-nee Aeree Italiane, 328 F.Supp. 759 (E.D.N.Y. 1971); United States v. Anchor Line, Ltd., 232 F.Supp. 379 (S.D.N.Y.1964). Plaintiffs also suggested that the letter should be excluded under F.R.E. We denied plaintiffs' motion to strike Ambassador......
  • In re OPM Leasing Services, Inc., Bankruptcy No. 81 B 10533
    • United States
    • United States Bankruptcy Courts. Second Circuit. U.S. Bankruptcy Court — Southern District of New York
    • July 16, 1982
    ...Accord, New Home Appliance Center, Inc. v. Thompson, 250 F.2d 881, 883-84 (10th Cir. 1957); United States v. Anchor Line, Ltd., 232 F.Supp. 379 (S.D.N.Y.1964). To be sure, there is a requirement of particularized pleading mandated by Fed.R.Civ.P. 9(b). However, that requirement is reserved ......
  • In re Lee Way Holding Co., Bankruptcy No. 2-85-00661
    • United States
    • United States Bankruptcy Courts. Sixth Circuit. U.S. Bankruptcy Court — Southern District of Ohio
    • August 15, 1989
    ...The General Motors Corp., supra; Nagler v. Admiral Corporation, 248 F.2d 319 (2d Cir.1957); United States of America v. Anchorline Ltd., 232 F.Supp. 379 The Court is satisfied that joinder of the Defendants is proper under Federal Rule of Civil Procedure 20(a) and Bankruptcy Rule 7020, and ......
  • State ex rel. Blond v. Stubbs, No. KCD
    • United States
    • Missouri Court of Appeals
    • September 7, 1972
    ...cases have reached a contrary conclusion: Wilson v. Algeria, 5 Mis.2d 520, 165 N.Y.S.2d 190; United States v. Anchor Line, Ltd., D.C., 232 F.Supp. 379; Potter v. Clark, 19 A.D.2d 585, 240 N.Y.S.2d 495; Mullett v. Sacco, 47 Misc.2d 441, 262 N.Y.S.2d 796. Bearing also on this general problem,......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT