Panama Canal Co. v. Grace Line, Inc.
356 U.S. 309 (1958)

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U.S. Supreme Court

Panama Canal Co. v. Grace Line, Inc., 356 U.S. 309 (1958)

Panama Canal Co. v. Grace Line, Inc.

No. 251

Argued April 2-3, 1958

Decided April 28, 1958*

356 U.S. 309

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

Syllabus

Certain American shipping companies using the Panama Canal sued in a Federal District Court to compel the Panama Canal Company to prescribe lower tolls for the use of the Canal and to refund tolls alleged to have been collected illegally in the past. That Company is an agency of the United States wholly owned by the United States and created by Congress for the purpose of operating and maintaining the Canal and conducting business operations incidental thereto. It is authorized, subject to the approval of the President, to fix and to change from time to time the toll charged for the use of the Canal, but such toll are required to be fixed in accordance with a formula stated in the Act. In a report to Congress, based partly on his interpretation of the Act and partly on his views as to proper cost accounting methods, the Comptroller General expressed the opinion that the tolls being charged were too high under existing law, and that opinion was the basis of this suit.

Held: the controversy at present is not one appropriate for judicial action. Pp. 356 U. S. 310-319.

(a) The mere fact that the Company may sue and be sued in its corporate name does not necessarily mean that this suit can be maintained. P. 356 U. S. 317.

(b) The initiation of a proceeding for readjustment of the tolls of the Canal is not a ministerial act, but is a matter that Congress has left to the discretion of the Company, and such matters are excluded from the categories of cases subject to judicial review under § 10 of the Administrative Procedure Act. Pp. 356 U. S. 317-318.

(c) The question whether the Company, as the creature of Congress and agent of the President, should now fix new tolls turns on doubtful or highly debatable inferences from large or loose statutory terms, and on problems of cost accounting involving questions

Page 356 U. S. 310

of expert judgment requiring close analysis and nice choices, and it is so wide open and at large as to be left at this stage to agency discretion. Pp. 356 U. S. 318-319.

243 F.2d 44, reversed.

MR. JUSTICE DOUGLAS, delivered the opinion of the Court.

Respondents, American shipping companies using the Panama Canal, brought this suit in the District Court to compel petitioner, the Panama Canal Co., to prescribe new tolls for the use of the Canal and to refund tolls which it was alleged had been illegally collected in the past. The District Court dismissed the complaint for lack of jurisdiction of the subject matter, 143 F.Supp. 539. The Court of Appeals refused relief for a refund, but, on other phases of the complaint, entered a summary judgment for the respondent 243 F.2d 844. The cases are here on petitions for certiorari which we granted because of the importance of the questions presented. 355 U.S. 810. [Footnote 1]

Page 356 U. S. 311

Petitioner was created by Congress in 1950. 64 Stat. 1041. It holds the assets of the Panama Canal, and has the duty of operating and maintaining it. It may sue and be sued in its corporate name. Canal Zone Code, Tit. 2, § 248, 62 Stat. 1078, as amended, 64 Stat. 1038. Prior to 1950, the Panama Canal was operated by the President through the Governor of the Canal Zone. 37 Stat. 561. Business activities incident to that operation were conducted by the Panama Railroad Co., a federal corporation, 62 Stat. 1076, which was an agency and instrumentality of the United States, ibid. Those auxiliary business activities were "designed and used to aid" in the management and operation of the Canal. See New York ex rel. Rogers v. Graves,299 U. S. 401, 299 U. S. 406. Since 1950, all those business activities have been carried on by petitioner, the Panama Canal Co., all of whose stock is held by the President or his designee, Canal Zone Code, Tit. 2, § 246(a), the present designee being the Secretary of the Army.

The Hay-Pauncefote Treaty, proclaimed February 22, 1902, 32 Stat. 1903, provided in Article III that the "charges of traffic shall be just and equitable." Under the original Panama Canal legislation, 37 Stat. 562, the President was authorized to fix the tolls on six months' notice by proclamation. Under that Act, the tolls were to be not less than 75

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