Waterman SS Corporation v. Land

• Decision Date: 18 June 1945
• Docket Number: No. 8862.,8862.
• Citation: 151 F.2d 292
• Parties: WATERMAN S. S. CORPORATION v. LAND, Chairman of Maritime Commission, et al.
• Court: U.S. Court of Appeals — District of Columbia Circuit

151 F.2d 292 (1945)

WATERMAN S. S. CORPORATION v. LAND, Chairman of Maritime Commission, et al.

No. 8862.

United States Court of Appeals, District of Columbia.

Argued March 20, 1945.

Decided June 18, 1945.

Certiorari Granted November 5, 1945.

Mr. Bon Geaslin, of Washington, D. C., with whom Mr. Allen J. Krouse, of Washington, D. C., was on the brief, for appellant.

Mr. Walker Lowry, Attorney, Department of Justice, of San Francisco, Cal., pro hac vice, by special leave of court, with whom Assistant Attorney General, Francis M. Shea, and Messrs. Edward M. Curran, United States Attorney, of Washington, D. C., Arnold Levy, Special Assistant to the Attorney General, and A. Morris Kobrick, Attorney, Department of Justice, of Washington, D. C., were on the brief, for appellees.

Before GRONER, Chief Justice, and MILLER and ARNOLD, Associate Justices.

GRONER, C. J.

This is an appeal by Waterman Steamship Corporation, plaintiff below, from a final judgment entered by the District Court dismissing Waterman's complaint for an injunction and declaratory judgment. Waterman is the owner and operator of a large fleet of ocean going steamvessels, and on April 25, 1941, and on several dates subsequent thereto, chartered to British Ministry of War Transport, an agency of the British Government, certain of its vessels for the transportation of war goods from two United States Atlantic Coast ports to two ports of discharge in the Gulf of Aden and the Red Sea. The charter parties covering the several vessels were approved by the Maritime Commission in accordance with § 808 of the Shipping Act of 1916,¹ and were in all respects performed by Waterman, and the charter hire, except in respect to several small items of demurrage, paid to appellant on or before November 28, 1941.²

In November, 1943, appellees, constituting the Price Adjustment Board of the Maritime Commission (hereinafter called "Commission"), purporting to act pursuant to the provisions of the Renegotiation Act,³ served notice upon Waterman to appear before it on December 13, 1943, for the commencement of renegotiation of the charters in question to determine whether Waterman had realized excessive profits.⁴

Waterman, pointing out that the charters were to a foreign government, denied that the Commission had any jurisdiction or authority in relation thereto, and declined to consent to renegotiation. The Commission, however, adhered to its position and insisted that the contracts should be construed to be between "the vessel owner and the Maritime Commission" (italics supplied), and hence that the Renegotiation Act was applicable.⁵ Waterman, as a result of the impasse, brought this suit June 28, 1944, charging that there exists an actual and immediate controversy between the parties and that accordingly suit is brought for the purpose of enjoining enforcement of the Renegotiation Act as to Waterman's British contracts, and for a judgment declaring that the contracts are not subject to its provisions.

The Commission, without answering, moved to dismiss and the District Court granted the motion on the ground that Myers v. Bethlehem S. Corp., 303 U.S. 41, 58 S.Ct. 459, 82 L.Ed. 638, is controlling, i. e., that Waterman had not exhausted its administrative remedies.

On this appeal Waterman argues first, that the charters with the British Ministry were not charters with the Commission, or any "Department" of the United States Government, within the meaning of the Act, and accordingly that there is no law or statute which requires or authorizes their renegotiation; second, that final payment was made prior to April 28, 1942, and the charters are accordingly specifically exempted from the provisions of the Act; and third, that the charters were completed and terminated in a fiscal year which expired more than one year prior to the date on which appellees purported to commence renegotiation, and hence are excluded from renegotiation by the express provisions of the Act.

If the correctness of the judgment below depended upon answers to Waterman's points two and three, it might perhaps be affirmed, for the questions of the time of payment and completion of contracts may very well be matters as to which Congress has committed the answer primarily to the Commission.⁶ But, in the view we take of the first point, we are of opinion that the District Court was wrong in holding against Waterman's legal right to a declaratory judgment on the jurisdictional question. For obviously, if there is no law compelling renegotiation of the contracts here in dispute, and if there is a real and substantial controversy, the question, as the Commission admits, in the present state of the pleadings, is jurisdictional and fundamental and Waterman is clearly entitled to invoke the Declaratory Judgment Act,⁷ to the end that the controversy in that regard be settled promptly and without the loss and expense and delay which otherwise is inevitable.

Section 403(c) of the Renegotiation Act, on which the Commission relies, authorizes renegotiation of contracts made with "Departments" of the Government of the United States and provides that notice by registered mail to the contractor or subcontractor, shall constitute the commencement of the renegotiation proceeding. The word "Department" (as to whose contracts, alone, the Commission has jurisdiction) is defined as including "War Department, Navy Department, Treasury Department, Maritime Commission, War Shipping Administration, Defense Plant Corporation, Metals Reserve Company, Defense Supplies Corporation, and Rubber Reserve Company, respectively." There is not, and of course there cannot be, any claim that the Commission is authorized to reexamine or renegotiate a contract of a foreign government. And if it is a fact, as the complaint alleges — and as the motion to dismiss admits — that the contracts (charter parties) in issue were contracts with the British Government, it follows, of course, that the Commission, in undertaking to investigate profits, is exceeding its statutory powers.

Here, as we have seen, the complaint charges that Waterman, the owner of certain steamships, entered into the charter agreements with the British Ministry of War Transport, an agency of the British Government. And an inspection of a copy of a typical charter party — filed as an exhibit with the complaint — confirms this allegation, for it shows in express terms that it is an agreement "between Waterman Steamship Corporation Owners" and the "British Ministry of War Transport Charterers." And the only thing in the complaint which in any degree connects a Department of the United States Government in any way with the transaction is the statement in allegation 13, as follows:

"The plaintiff is informed and believes and therefore avers that the United States or a department or agency thereof entered into an arrangement, agreement or contract with the British Government or an agency thereof with respect to payments required to be made to the plaintiff by the British Ministry of War Transport, under the form of charter agreements entered into by the plaintiff with the British Ministry of War Transport. The details of said arrangement, agreement or contract are unknown to plaintiff, except as the same are set forth in a letter from the Office for Emergency Management, an agency of the United States, to the British Merchant Shipping Mission, dated the 9th day of June, 1941, a copy of which letter is attached hereto and made a part of this complaint as though fully set forth herein, and marked Exhibit `E.' The plaintiff was not a party to, nor was it consulted with respect to the arrangement, agreement or contract aforesaid, and took no part in the discussions or negotiations which led to its consummation."

Exhibit "E," referred to, is a letter from the United States Office for Emergency Management to the British Merchant Shipping Mission, as follows:

"The following arrangement with respect to payments required to be made by the British Ministry of War Transport under the form of charter party prepared by the Maritime Commission shall be effected:

"A. The United States Maritime Commission will make the following payments required to be made to the owners or chartered owners by the British Ministry of War Transport under the terms of the charter:

"1. Freight required to be paid under Clause 1 of the charter.

"2. Demurrage, if any, required to be paid under Clause 11 of the charter.

"3. Any increase in charter hire which may become payable under Clause 24 of the charter.

"4. Loading and other expenses payable by the charterer under Clauses 4 and 5 of the charter.

"B. The U. S. Maritime Commission shall receive any payments to be made by the owners or chartered owners pursuant to adjustment or reduction of charter hire under the charter which includes:

"1. Refunds which may be made under Clause 1 of the charter.

"2. Adjustments of freight which may be made under Clause 2 of the charter.

"3. Net amounts which may become payable under Clause 25 and reductions in freight resulting from any reduction in insurance rates under Clause 24 of the charter.

"The foregoing arrangement will be effective on vessels covered by requisition No. 1503A and on all future vessels which sail from U. S. loading ports to the Red Sea until further notice. It is understood, however, that such arrangement will be the subject of further discussion in connection with any changes which may be made in the near future in the charter arrangement.

"Sincerely yours "Signed — J. H. Burns "Major General, U. S. Army."

Giving effect to all that is contained in this correspondence between a bureau of the United States and the British Shipping Mission, it shows no more than an understanding between the two governments that the United States would defray the expenses of the delivery from this country to ports on the Red Sea of war supplies to the British. And we may, perhaps, assume that the...