The United States brought this suit in the District Court to
enjoin alleged violations of the Sherman Antitrust Act. The
defendants were the Far East Conference, a voluntary association,
and its constituent members, steamship companies engaged in
"outbound Far East trade." The agreement under which the Conference
operated was approved by the predecessor of the Federal Maritime
Board, exercising authority under the Shipping Act of 1916, as
amended. Under this agreement, the Conference established a dual
system of rates, whereby shippers who agreed to use exclusively
bottoms of Conference members paid one rate, while those who did
not so bind themselves paid a fixed higher rate. This dual system
of rates constituted the gravamen of the Government's suit.
Held:
1. The case is initially within the exclusive jurisdiction of
the Federal Maritime Board.
United States Navigation Co. v.
Cunard S.S. Co., 284 U. S. 474. Pp.
342 U. S.
573-576.
(a) A different result from that reached in the
Cunard
case is not required by the fact that there, a private shipper
invoked the Antitrust Acts, whereas here it is the Government. P.
342 U. S.
576.
(b) The United States is a "person" who under § 22 of the
Shipping Act may file a complaint with the Federal Maritime Board.
P. 576.
2. Rather than order the case retained on the District Court
docket pending action by the Board, this Court orders dismissal of
the proceeding brought in the District Court. Pp.
342 U. S.
576-577.
94 F.
Supp. 900 reversed.
In a suit brought by the United States to enjoin alleged
violations of the Sherman Act, the District Court denied the
defendants' motion to dismiss.
94 F.
Supp. 900. This Court granted certiorari. 342 U.S. 811.
Reversed, p.
342 U. S.
577.
Page 342 U. S. 571
MR. JUSTICE FRANKFURTER delivered the opinion of the Court.
This is a suit in the District Court for New Jersey to enjoin
violations of the Sherman Law. [
Footnote 1] 26 Stat. 209, 15 U.S.C. §§ 1 and 2. The
defendants were the Far East Conference, a voluntary association,
and its constituent members, steamship companies engaged in what is
known as the "outbound Far East trade." The Conference was
organized in 1922, and the Conference Agreement under which it
operates was approved by the United States Shipping Board,
[
Footnote 2] exercising
authority under the Shipping
Page 342 U. S. 572
Act of 1916, as amended. [
Footnote 3] Under this Agreement there has been
established a dual system of rates, called the contract and
noncontract rate system. [
Footnote
4] Shippers who agreed to use exclusively bottoms of Conference
members paid one rate; those who did not bind themselves by such
exclusive patronage contract paid a fixed higher rate. Shippers who
adhered to the exclusive patronage contract were not tied to a
particular carrier; they were free to choose among Conference
carriers. The Conference members, however, were obligated to supply
facilities sufficient to handle freight destined for the Far East.
This system of two levels of freight rates constituted the gravamen
of the Government's suit.
Admitting the dual-rate system, the defendants justified on the
merits, but moved that the complaint be dismissed on the ground
that the nature of the issues required that resort must first be
had to the Federal Maritime Board before a District Court could
adjudicate the Government's complaint. The Board, as intervenor,
joined in this motion. It was denied by the District Court,
94 F.
Supp. 900, and we brought the case here, under § 262 of the
Judicial Code, 28 U.S.C. § 1651(a), because there are in issue
important questions regarding the relation between the Sherman Law
and the Shipping Act. 342 U.S. 811.
Page 342 U. S. 573
At the threshold, we must decide whether, in a suit brought by
the United States to enjoin a dual-rate system enforced in concert
by steamship carriers engaged in foreign trade, a District Court
can pass on the merits of the complaint before the Federal Maritime
Board has passed upon the question. We see no reason to depart from
United States Navigation Co. v. Cunard Steamship Co.,
284 U. S. 474.
That case answers our problem. There, a competing carrier invoked
the Antitrust Acts for an injunction against a combination of
carriers in the North Atlantic trade which were alleged to operate
a dual-rate system similar to that here involved. The plaintiff had
not previously challenged the offending practice before the United
States Shipping Board, the predecessor in authority of the present
Maritime Board. This Court sustained the two lower courts,
39 F.2d 204
and 50 F.2d 83, dismissing the bill because initial consideration
by the Shipping Board of the circumstances in controversy had not
been sought. After a detailed analysis of the provisions of the
Shipping Act and their relation to the construction theretofore
given to the Interstate Commerce Act, this was the conclusion:
"The [Shipping] act is restrictive in its operation upon some of
the activities of common carriers by water, and permissive in
respect of others. Their business involves questions of an
exceptional character, the solution of which may call for the
exercise of a high degree of expert and technical knowledge.
Whether a given agreement among such carriers should be held to
contravene the act may depend upon a consideration of economic
relations, of facts peculiar to the business or its history, of
competitive conditions in respect of the shipping of foreign
countries, and of other relevant circumstances, generally
unfamiliar to a judicial tribunal, but well understood
Page 342 U. S. 574
by an administrative body especially trained and experienced in
the intricate and technical facts and usages of the shipping trade,
and with which that body, consequently, is better able to deal.
Compare Chicago Board of Trade v. United States,
246 U. S.
231,
246 U. S. 238;
United
States v. Hamburgh-American S.S. Line, 216 F. 971."
"A comparison of the enumeration of wrongs charged in the bill
with the provisions of the sections of the Shipping Act above
outlined conclusively shows, without going into detail, that the
allegations either constitute direct and basic charges of
violations of these provisions or are so interrelated with such
charges as to be, in effect, a component part of them, and the
remedy is that afforded by the Shipping Act, which to that extent
supersedes the antitrust laws.
Compare Keogh v. Chicago & N.W. Ry.
Co., supra, 260 U.S. [156] at
260 U. S.
162. The matter therefore is within the exclusive
preliminary jurisdiction of the Shipping Board. The scope and
evident purpose of the Shipping Act, as in the case of the
Interstate Commerce Act, are demonstrative of this conclusion."
284 U.S.
474,
284 U. S.
485.
The Court thus applied a principle, now firmly established,
that, in cases raising issues of fact not within the conventional
experience of judges or cases requiring the exercise of
administrative discretion, agencies created by Congress for
regulating the subject matter should not be passed over. This is so
even though the facts after they have been appraised by specialized
competence serve as a premise for legal consequences to be
judicially defined. Uniformity and consistency in the regulation of
business entrusted to a particular agency are secured, and the
limited functions of review by the judiciary are more rationally
exercised, by preliminary resort for ascertaining
Page 342 U. S. 575
and interpreting the circumstances underlying legal issues to
agencies that are better equipped than courts by specialization, by
insight gained through experience, and by more flexible
procedure.
It is significant that this mode of accommodating the
complementary roles of courts and administrative agencies in the
enforcement of law was originally applied in a situation where the
face of the statute gave the Interstate Commerce Commission and the
courts concurrent jurisdiction. "The pioneer work of Chief Justice
White" in
Texas & Pacific R. Co. v. Abilene Cotton Oil
Co., 204 U. S. 426, as
his successor characterized it, 257 U.S. xxvi, was one of those
creative judicial labors whereby modern administrative law is being
developed as part of our traditional system of law. In this case,
we are merely applying the philosophy which was put in memorable
words by Mr. Justice (as he then was) Stone:
". . . court and agency are not to be regarded as wholly
independent and unrelated instrumentalities of justice, each acting
in the performance of its prescribed statutory duty without regard
to the appropriate function of the other in securing the plainly
indicated objects of the statute. Court and agency are the means
adopted to attain the prescribed end, and, so far as their duties
are defined by the words of the statute, those words should be
construed so as to attain that end through coordinated action.
Neither body should repeat in this day the mistake made by the
courts of law when equity was struggling for recognition as an
ameliorating system of justice; neither can rightly be regarded by
the other as an alien intruder, to be tolerated if must be, but
never to be encouraged or aided by the other in the attainment of
the common aim."
United States v. Morgan, 307 U.
S. 183,
307 U. S.
191.
Page 342 U. S. 576
The sole distinction between the
Cunard case and this
is that there, a private shipper invoked the Anti-Trust Acts, and
here it is the Government. This difference does not touch the
factors that determined the
Cunard case. The same
considerations of administrative expertise apply whoever initiates
the action. The same Anti-Trust Laws, and the same Shipping Act,
apply to the same dual-rate system. To the same extent, they define
the appropriate orbits of action as between court and Maritime
Board.
But the Government argues that it should not be forced to go
first to the Board, because the United States may not be deemed a
"person," who under § 22 of the Shipping Act may file a complaint
with the Maritime Board. [
Footnote
5] Surely the large question here in issue ought not to turn on
such a debating point. It is almost frivolous to suggest that the
Maritime Board would deny standing to the United States as a
complainant. The Board has consistently treated the United States
as a "person" within its rule for intervention. We ought not to
dally longer with this objection, considering the fact that the
United States, as a matter of common knowledge, is today one of the
largest shippers in the Far East trade. The matter seems to be
disposed of by
United States v. Interstate Commerce
Commission, 337 U. S. 426,
337 U. S. 430
et seq., involving similar provisions of the Interstate
Commerce Act.
Having concluded that initial submission to the Federal Maritime
Board is required, we may either order the case retained on the
District Court docket pending the Board's action,
General
American Tank Car Corp. v. El Dorado Terminal Co.,
308 U. S. 422,
308 U. S.
432-433;
El Dorado Oil Works v. United States,
328 U. S. 12,
328 U. S. 17;
see United States v. Interstate Commerce Commission,
supra, at
337 U. S. 465,
note 12, or order dismissal of the proceeding brought in the
District
Page 342 U. S. 577
Court. As distinguished from the situation presented by the
first
El Dorado case,
supra, which was a contract
action raising only incidentally a question proper for initial
administrative decision, the present case involves questions within
the general scope of the Maritime Board's jurisdiction. Shipping
Act of 1916, §§ 14, 15, 39 Stat. 728, 733, 46 U.S.C. §§ 812, 814.
An order of the Board will be subject to review by a United States
Court of Appeals, with opportunity for further review in this Court
on writ of certiorari. Pub.L.No.901, 81st Cong., 2d Sess., §§ 2,
10, 64 Stat. 1129, 1132. If the Board's order is favorable to the
United States, it can be enforced by process of the District Court
on the Attorney General's application. 39 Stat. 728, 737, 46 U.S.C.
§ 828. We believe that no purpose will here be served to hold the
present action in abeyance in the District Court while the
proceeding before the Board and subsequent judicial review or
enforcement of its order are being pursued. A similar suit is
easily initiated later, if appropriate. Business-like procedure
counsels that the Government's complaint should now be dismissed,
as was the complaint in
United States Navigation Co. v. Cunard
Steamship Co., supra.
The judgment of the District Court must be
Reversed.
MR. JUSTICE CLARK took no part in the consideration or decision
of this case.
[
Footnote 1]
The jurisdiction of the District Court was based on § 4 of the
Sherman Law:
"The several district courts of the United States are invested
with jurisdiction to prevent and restrain violations of sections
1-7 of this title. . . ."
26 Stat. 209, 15 U.S.C. § 4.
[
Footnote 2]
Section 3 of the Shipping Act of 1916 created the Shipping
Board. 39 Stat. 728, 729. Through several steps, its functions have
come to its present successor, the Federal Maritime Board. By
Executive Order No. 6166, June 10, 1933, § 12, its functions were
transferred to the United States Shipping Board Bureau in the
Department of Commerce. In 1936, Congress created the United States
Maritime Commission, 49 Stat. 1985, 1987, 46 U.S.C. § 1114, and, in
1950, the present Federal Maritime Board was established.
Reorganization Plan No. 21 of 1950, 15 Fed.Reg. 3178-3180.
[
Footnote 3]
39 Stat. 728, 46 U.S.C. § 801
et seq.
[
Footnote 4]
The irrelevance of the failure to file the rates themselves with
the Board was laid bare in
United States Navigation Co. v.
Cunard Steamship Co., 284 U. S. 474,
284 U. S.
486-487:
"If there be a failure to file an agreement as required by
section 15, the Board, as in the case of other violations of the
act, is fully authorized by section 22,
supra, to afford
relief upon complaint or upon its own motion. Its orders in that
respect, as in other respects, are then, under section 31, for the
first time, open to a judicial proceeding to enforce, suspend, or
set them aside in accordance, generally, with the rules and
limitations announced by this court in respect of like orders made
by the Interstate Commerce Commission."
[
Footnote 5]
39 Stat. 728, 736, 46 U.S.C. § 821.
MR. JUSTICE DOUGLAS, with whom MR. JUSTICE BLACK concurs,
dissenting.
The Shipping Act would have to be amended for me to reach the
result of the majority. The Conference agreement, approved by the
Board in 1922, provides for the adoption by the Conference of a
tariff of rates and charges.
Page 342 U. S. 578
It states that there shall be no unjust discrimination against
shippers, and no rebates paid to them. There is no provision in the
agreement for dual rates -- no arrangement for allowing one rate to
shippers who give all their business to the members and for
retaliations against nonsubscribing shippers by exacting from them
a higher rate. Nevertheless, petitioners have prescribed this dual
rate system for the purpose of barring from the outbound Far East
trade steamship lines that are not members of the combination. At
least these are the facts if we are to believe the allegations of
the complaint, as we must on the motion to dismiss.
If the Board had expressly approved the dual rate system, and
the dual rate system did not violate the Shipping Act, then there
would be immunity from the Sherman Act, since § 15 of the Shipping
Act, 39 Stat. 733, as amended, 46 U.S.C. § 814, gives the Board
authority to approve agreements fixing or regulating rates, in
effect makes "lawful" the rates so approved, and exempts from the
Sherman Act every "lawful" agreement concerning them. But that
exemption from the Sherman Act can be acquired only in the manner
prescribed by § 15. Here no effort was made to obtain it. Hence,
the petitioners are at large, subject to all of the restraints of
the Sherman Act.
Why should the Department of Justice be remitted to the Board
for its remedy? The Board has no authority to enforce the Sherman
Act. [
Footnote 2/1] If the rates
were filed, of course, the Board would have exclusive jurisdiction
to pass on them. But even then it is restricted. Section 14, Third,
for example, makes unlawful retaliation against any shipper by
resort to discriminatory or unfair tactics because a shipper has
patronized another carrier. And it
Page 342 U. S. 579
would seem plain that, when a shipper is charged one rate if he
gives the Conference a monopoly of his business and another and
higher rate if the shipper uses a carrier not a member of the
Conference, the shipper is being retaliated against for shopping
around among carriers.
Petitioners, therefore, operate outside the law not only because
they have failed to submit their schedule of rates to the Board,
but also because the rates adopted would, if approved, be illegal.
[
Footnote 2/2] The steamship
companies, therefore, flout the law as plainly as if they used
rates that had been disapproved by the Board. In either case, the
public interest needs protection if the Sherman Act is to be
enforced -- whether it be represented in a criminal prosecution or,
as here, in a civil proceeding brought by the United States.
The jurisdiction of the Department of Justice must commence at
this point, unless we are to amend the Act by granting an antitrust
exemption to rate-fixing not only when the rates are filed by the
companies and approved by the Board, but also when they are not
filed at all, or are rates which, if filed, could not be approved.
I would read the Act as written and require the steamship companies
to obtain the antitrust exemption in the precise way Congress has
provided.
[
Footnote 2/1]
The remedy provided by § 22 of the Shipping Act is for "any
violation of this Act." The charge in the present case is a
violation of the Sherman Act.
[
Footnote 2/2]
There is less room for expertise where the rates used by the
steamship companies are unfiled rates or unlawful rates.
Cf.
284 U. S. S.
Navigation Co. v. Cunard S.S. Co., 284 U.
S. 474.