Brief for the Respondent in Opposition — Gulf/Mediterranean Ports Conference v. Federal Maritime Commission

t PE A ais “ez ; Ve / , 4 ’ 7

. Fepera, Marrrme Commission, Unirep STATES OF

_... America, H, KEMPNER, GaLveston CoTTON Com-

_: PANY, ‘Texas Corton INDUSTRIES, AND THE MeEm™-~

‘BERS OF THE Far East CONFERENCE, Respondents.

| ase 766

3 Far East ConFERENCE, AMERICAN ‘PRESIDENT LINES, : 3

Lav., IstHMiAN LINES, Inc.; 2T AL., Petitioners, |

Unirep States or AMERICA, FEDERAL MARITIME Com:

- . wassion, H. KeEMpNER, GALVESTON ‘Corton Com-.

< pany, AND Texas. COTTON Inpvustris, INo., |

Rei » ost Sts. Respondents.

‘ On Petition for Writ of Cerilozari to the United States Court

of Appeals for the District of

a 8 ey ae : ; Attorneys for Responde

24 ee: 1000 Vermont. Avenue

Of Counsel: Washington 5, D. C

_ Davims, Ricnsexe, TyDines, :

- Lanpa& Durr

1000 Vermont Avente, N. W.

-~ Washington 5, D. C.

—- Sune 6, 1963

Pazss or Brnox S. Apams, Wasuincron, D.C.

2

Biss

- INDEX Brera et

ivie> Page

‘Options BELOW ...... eee Nueac ee ae arene vouecunee

STATUTES SUMENOD. «cc 4c ass csnavecless painter e

CoUNTER-QUESTIONS PRESENTED ...... 0004. , ae

Cov “STR STATE MENT OF THE CASE «22... os sees Ja ee

‘ ARGUMENT ..... Coane aes een Py tors MPa eee Dene ten

| Preliminary State ment rer rere Paha Pe a

These Cases Do Not Warrant. Review on Writ

of Certiorari PORES Ce eeRS OOS Rae eee eT 6

I. T HE Cov rT OF APPEALS —n Fouun Tuat

Mere Siteence oN THE Part oF THE FEDERAL Manri-

: -TIME Boarp Din Nor ConstiruTe,PRIoR APPROVAL

Unprek Secrion 15 of tHE SHrppinGc AcT OF THE

Excuusive Patroxacr, Duau-RaTe SysTEMs: Ix-

VOLVED HEREIN ...:...... ens ee oe

Il. Tue 1958 Moratorire mu Act Dm Nor havens.

‘ TivELy Destroy RESPONDENTS’ REPARATION CLaims 15 __

1. The Legtslative History bas Moratorium

BM cise ean Be rer Oe

2, The Respondénts’ Re sparation c laims te Pre-

served by the General Saving Statute ..... ya

1. THe Question oF DAMAGES ° Is Nor PROPERLY

arom Tim COUR oon csc cnifeacnendsceegans 24

Commie occas ccs nc cs aes mya ns Heeate er a ee ae

ee Sx A—Statutes ane BE ede hen PA eres ee

Sections 14 and 15 of the Shipping Act, 1916, ; 39 Stat.

733, as Amended (extracted from Title 46, U .C.A.) | ia

Public Law 85-626; 72 Stat: v4

Puablie Law wicca i4 Stat. 253 . eelecewwnsess ‘ava: ae

ii’ | - Index Continued ;

cs : Page

Publie Law 87-75; 75 Stat. 195 ....7....... Chaka cs ’ 5a

Public Law er-521 70 emt. GSI :..... Peer ee da

-The Saving Statute, Title 1, U.S.C., See ‘tion 109,

G1 Stat. -653 ..... er MevaN been eka Ss Soe eye aes os a

CITATIONS

CASES:

Anglo Canadian Shipping Company v. United States,

264 F.2d 405 (9th Cir. 1959) 2... eee eee 13, 19, 20.-

Auffm’ordt v. Rasin (1880), 102 U.S. G20 .........6.. iff

Brewster v. Gage (1929), 280 TLS. 3: << SRO eater 16

Chew Hgong v. United. States (1884), 1: SUS. 896 .... 6

Claridge partments Co. v. Commissioner of Internal

Revenue (1944), 323 US. 141... 0.0... Pee ees 16

Cox v, Hart (1922), 200 U.S. 427 2 oes cc cece see ccen 16

‘De Tia Rama S.S. Co., Ine. v. United States*(1955),

ES yh ne een ros eure anew er nn 23

Empire State Highway Transportation. Association,

Inc. v. Federal Maritime Board (1961), 110 U.S

“App. D.C. 208, 291 F.2d 336, Cert. Den. 368 TU. S.

Om NS IN rR Soe a he Coa aria eae a aac dierent ay 20, 9]

Far Kast Conference vy. United States (1952), 342 ELS

TEN rome mnie bo ks hy Given nk se ee aes 10, 24 .

Feders] Maritime Board v. Isbrandtsen Co., Ine., et al.

(1958), 856 U.S. 481, 78'S. CE. S851. . .6, 14, 18, 19, 20, 21

‘Forbes Degg hk Boat Line v. Board of Commissioners , /

(1922), ie eae ee ee 15

Fullerton- “Eades Lumber Co. -v. Northern Pacific Ry.

Co., et al. (1924), 266 UB. 450 0.24.06... Ree 16

Harvey v. Tyler (1664), 2 Wall. 228. .... 6.8. ey 16

Hassett v. Welch (1938), 308. U.S. 303 ...0......6.16,17

Isbrandtsen Co., Ine. v. United States’ (1951), 96 F.

_ Supp. 883, aff’d. by an equally divided Court,

sub nom. Rederi v. Isbrandtsen Co., 542 U.S. 950

$4 ee rae hal © Wiese ganarehe erat gre eras Se . 14,19, 20

Isbrandtsen Co., Ine. v. United States (1954), 93 TLS.

App: D.C, 298, 211 F.2d 51, Cert. Den. (1954),:

Sei U.S. OO0:...02 2c CTs ew ao oN 59, 9, 1 de Bay 1D

Tl. Kempner, et al. v. Federal Maritime Commission,

ot ab. (T9GS), BIS. OE OO. crn s Sai cssnceceseaecs 1,8

Miller v. United States (1935), 264 U.S. 435

pe

?

Index Continued . il

: Page

Morehead v. Hunter (10 Cir... 1952), 198 F. 2d 42 2... 28

Murrav v. Gibson (1853), 15 How: 420 ...-.......... 16

®N ational Liihor Relations Board ee National Garment

Co. (8 Cir, 1948), 166 F. 2d 2 ; 23

Ochoa v. Hernandez v Nor ales free , 230 U.S. 139 .: 15

Pacifie West-bound Conference v. Lev oA We Co., Ine.

(1954), 201- Ore, 390, 269 P. 2d 541, Cert. Den.

‘348 US. 897 (1994)....... al ey ent et any he Ae

Parsons & Whittemore, Inc.’ v. Rederiaktiebolaget if

Nordst-Jernan, et al. (FM. B. Dockets Nos. S05,

7) nS re rr eee ae

Reynolds v.-MeArthur (1829), 2 Pet. 417 2.22... eS

Rice. v. Sioux City Memorial Parks Cemetery. (1955),

40 U.S. 70, 74 SEE AA Ng Oy ER PR ee OE. a

River’ Phite & Brazil Conferences v- “eee Steel Car.

Company Inc. (2d Cir. 1955), 227 F. 2d 60.2... 3

Shawh v. Devle (1922), 958 US. 529 2000... he are 16

Sohn v. Waterson (1875) 17 Ww ON gy Sa aa 16

_ Twenty Per Cent Cases (1873), 20 W * 3, ree 16

‘United States v. American Sugar Refining Co. (1906),

we aero G as ep oe aoe 2 t0 282 16,17

United States vo Burr (1805). 1 9 US Ss Ba Sey AE Ma Ot - 16

United States v. Heth (1866), o-€ nay er eis ag 92

United States v. Magnolia Potroleun: Co. (1928), 27 ;

ge SD. DR Gee a Men ana ean nre.. cara ee ory

United States Navigation Co. v. Cunard 5, . Co., OR4

Vg ERR Ss nea peed ine Pee ree ages 24

- United States v. St. Louis: SF. & -T.R. Co. (1925),

yi Sif ae ere eer a rae Tee re ees ae ee

United States v. Taylor US. DN.Y. 1954), 125 F, Supp.

O20), 922. aff'd, DPT FL 2d 948, Cert. en. Bo} US.

SR Se TR ON nc oR are Loa apy are wasn a ae.b ee ee ee 25

Upited States Fidelity and Guaranty Co, United

“* Cin 4 Ge, Oe CIO gn cf erew cc win a peas as 16, 17

Union Pacifie Rv. R. Co. v. Laramie: Stock Yards Co.

El ees! Pe eee Peni, pr reer eae 16

White v. United States (1905), 191 TLS. 546... .16,17

STATUTES:

Moratorium Act (see Pub. L.. infra) — -

Portal to Portal: Act of 1947, 61 Stat. S4, wy US.C.

Dh, Cl BOQ. cise e ican cicencesoresescrsccseses -, “18

Pub. L. 85-626, 72 Stat. 974-.......5.. 2,6, 15, 20, 21, 22, 23

‘ : ” ‘

iv Index Continued

: Page

ee 6,15

a, eR eR SS ee eee 6,15

Pub, L. 87-252, 75 Stat. 521 ...... iu a ae See uy

Sherman Antitrust Act, 26 Stat. 209 (1890), as .

amended, 15 U.S.C., Section 1, ef seq. ....%. 5

Shipping Act, 1916, 39 Stat. 728, et seq., as. amended,

MRIs OR, Hk ku de k's ok We.c bk nu cecawnn 6

~ Seetion 14 (46 U.S.C. See. 812) oo 0000000... 2, D, 18

Section 15 (46 UIS.C. Sée. | ea 2, 4, KA, 8, _

11, 13, 14, 19, 20 ;

Section 16 (46 U.S.C. See. 815)*.......22...-. 5, 19

Section 17 (46 U:S.C. See. 816) -.....0......... 5, 20

® Section 22 (46 U.S.C. See. 824) ...........-.. 7

US.C., Title 1, Seetion’109. as Stat. 633) (The: General

Savi ing. Statute) PET AUR ARG itr Ot Pte ag eae ee oN y Mie

TREATISES: int . ~ ey

82 C.J.S., Statutes, Section 413 ........... ins ba eets 18

o 82 (C.J.S., Statutes, Section 414 ..:.............. eerie

82 C.J.S., Statutes, Section 415 ................. so Ath 1a

>: rawford. Statutery Construction (1940), See. «a : . oe

Sutherland, Statutory Construction” “ard” Edition

(1943), a ee ee Se rer ka tire ee ts 16

Misc 'ELLANKOUS :

104 C ong. Ree. 12008 (1958) (¢ *hairsnai Magnuson). .19, 21

id. aut p. 15641 (Chairman Bonner) ............ 19, 21:

Hearings”on H.R, 6775 Before the Merchant Merine

& Fisheries Subcommittee of tlie Senate Commerce

Committee, 87th -C ong., Ist Sess. 16 (1961) (Chair-

man ¢ ‘eller) cases thet eRe Cee Rae oe cole eee 21

H. Rep. 2055, 85th © ong... 2d Reus. Fi. Seen - 19

Sen, Rep.1709, 85th Cong., 2d Sess. 2 (1998) 29.00... 19

-" RS ee ee eeena ae 21

Sen, Rep. 1497, 86th Cong., 2d Sess. 2 (1960) 2.2... > 20, 2)

Sen. Rep, 860, August OL, 1961, Sith Cong., Ist Sess. .. 18, 20

Reorganization Plan No, 7 of 1916. Section” 103 (a)

RE OE Ses son re a eye ais oC cate ee yee, co

Rule 19 of the Supreme SOG MOON Sa ye ees 6

US. Code Cong. and Adin. News, 1960, Vol. 2, p. 2461

20), 21

US. ( Code Come and Adm. News, 1961, Vol. 2¢ p. 3108 20

U.S. Code Cong. and Adm. News, 1961, Vol. ; 2, p. 3128 18

IN THE RN

Supreme Court of the United Stajes

OcTOBER TERM, 1962

No. 1002 -

GULF. MEDITERR ANTAN Ports CONFERENCE, ET-AE;

Pe titioners,

; v.

KM RDERAL MARITIME ComMiss}ox, U NITED STATES:

America, H, Kempner, GALVESTON Corrox “sheng

PANY, TEXAS Corron TNpu STRIES, AND THE Méen-

BERS OF THE Far East CONFERENCE, Respondents.

No 1138

-F AR E AST CONFERENCE, _Asenes—PHESIENT ton.

Lrp., isTHMIAN LINks, Inc., ET AL., Petitioners,

~ Le

* . % : . .

Unitep Staves or America, FEDERAL MARITIME Com-

Mission, H. KeMpNer, Gatveston Corrox Com- -

PANY, AND TEXAS Corton INpustrigs,*INc., |

Respondents.

On Petition for Writ of Certioreri to the United States: Court

of Appeals for the District of Columbia Circuit

BRIEF FOR RESPONDENTS, H. KEMPNER,

GALVESTON COTTON COMPANY, AND TEXAS

_COTTON INDUSTRIES, IN OPPOSITION -

ad

OPINIONS BELOW

The opinion of the United States Court of Appeals

for the District of ¢ ‘olumbia Cirenit is reported in 318

F. 2d 586. The opinion of thie Federal Maritime

‘

9.

a

Board has not been offic ially printed, but appears im

1962 A.M.C. 748 sub wom. Isbrandtsen Co.,. Ine.*s

States Marine Co., of Delaware, et al.

| STATUTES INVOLVED

The statutes involved. in this” proceeding are: Sec-

tiens 14 and 15 of the Shipping Act, 1916, 39 Stat. 733-.

(1916) as amended, 46 U.S.C. 812. 814 (as they ex-

isted prior to the Moratorium); the interim dual-rate-

Moratorium Act, Pub. L. 85-626; 85th Cong.; 72 Stat. -

oT4, together with its several extensions; and The Sax-

ing Statute, 1 U.S.C. 109, 61 Stat. 633.. These statutes

~ appear in Appendix A. of this Brief. |

———~ COUNTER-QUESTIONS PRESENTED

The. following are the only questions presented for.

de ‘termination by this Court:

1. Whether mere silence and inaction, -on the part

of the Federal Maritime Board, constituted formal.or

" specifie prior approval by the Board, required under -

‘Seetion-15 of the Shipping Act, 1916, as amended, of .

the institution of exclusive patronage contract non-~

seontract dual-rate systems by the Petitioners herein,

thereby giving the systems immunity under the Anti-

trust laws.

2. Whether the dual-rate Moratorium Act, Pub. L.

sh. 626, 72 Stat. 574, retroactively destroyed Respond-

‘ents’ reparation chkims existing, and being prosecuted,

prior. ‘to. its enactment. — 4

COUNTER- STATEMENT OF THE CASE

This case involves the legality of the exclusive pa-

tronage: contract non-contract dual-rate systems em-

ployed by the Petitioners, Gulf-Mediterranean Ports -

Conference and its Member Lines, and the Far East

Conference and its Member Lines.

3 co

The terms “‘exelusive patronage contract non-con-

‘tract dual-rate system”’, or ‘*dual-rate system’, as

used herein, refer to a groupsof common ‘arriers of

freight by water, operating in ua Corfference, that

charge different rates to shippers for identicak trans-”

portation services,. based solely upon whether the ship.

ee

per agrees to- give. the carriers his entire—patronage. .

The sole consideration for a! enjoyment of the lower

- rate is the. agreement of the shipper to patronize the -

«Conference lines .exe lusively, ‘and the sole reason for

the exaetion of: the higher non-contract rate is the

refusal of the shipper to-sign exclusive patronage con-

tracts with the Conference.

“The Gulf- Meditefrancan' Ports ¢ ‘onferenee, and the

Far East ‘Conference, are voluntary associations of

steamship lines operating (among other ports) be-

tween the Gulf of Mexico ports in the United,States,

and ports in the Mediterranean and in the Fat East.

areas, respectively. “The Board found that the basic

agreements of hoth ¢ Ps uciaachionina have never, and do

not now contain any ** provisions expressly ir 4

ing the use of an exclusive patronage contract”

. differentials in freight rates for reel veting ie

ners’?«(App. A" 25 , 28—Rep. of Bd. ).

On July J, 1949, the Gulf. Mediterranean Ports Con-

ference instituted the exé ‘lusive patronage dual-rage

system on cotton, fixing the non-contract rates at 20°

' For th> convenience of the Court we shall refér to the printed

version of the Re ‘port of the Federal Maritime Board set ont as

Appendix “*A’’ (App ‘A’ toe the Petition for Petitioners, Gulf-

Mediterranean Ports Conference, ef al. All other references in

this Brief refer fo the page number of the Joint Appendix (.J.A.)

filed in the Court of Appeals below, and constituting a part of the

certified transcript pf Record transmitted to the Supreme Court.

49

‘higher than the contract rates. ~The Far East Con-

. ference initiated its dual-rate system on cotton on

- February 7, 1950, with a spread or. differential of

> $4.00 per ton between the contract and ‘non-contract

rates. Neither of the Conferences submitted the dual-

rate arrangements to the Federal Maritime Board for

approval, and the Trial Examiner expressly found that

the ‘‘eontract system”’ of either Conference had “never

heen specifically and separately approved by order

under section 15 @the Act” (S.A. 473, 422-_Exain- .

iner’s Recommended Decision, Findings of Fact 31

and 57). These Findings of the Examinér were not.

disturbed. by the Board.

_ It should be*carefully sila witli respect to the Far

East Conference Peti itioners that the exe ‘lusive patron-

age contract dual-rate system involved herein is the

one instituted on cotton on Fe bruary 7, 1950. Insofar

as the Far East Gonference is concerned, this was the

only dual-rate system considered by the Board in its

Report. “It is especially important to hear this fact.

in mind, inasmuch as the Far East Conference Peti-

- tioners, in their Statement of the Case, have set- forth

at some length alleged facts, occurring over a period

of’ approximately 21 years, concerning other dual-rate

svstems, initiated by the Far East Conference prior to

the one @n cotton on’ February 7, 195 W. - Such alleged

facts were not considered by thé Board, and are wholly

irrelevant and immaterial to the question of approval

of the dual-rate system on cotton instituted on Fe bru-

ary 7, 1950. i

Beginning i in early 1951,-and continuing the reafter,

the Respondents herein (Complainants” before the

Board), while engaged in the business of exporting

‘cotton from Gulf ports in the United States. made

%

- ~

a

certain shipments of high density cotton on € iulf-Medi-

terranean Ports, and Far East, Conferences’ vessels,

owned or operated by member lines. The stedmship

companies demanded of, and charged, the Respond-

euts’ the higher non-contract rates. At the-times and

dates that Respondents made said shipments, no other .

adequate means were available to transport said cot-

ton: (App: ‘*A’’ 32-Rep. of Ba.y. ,

In F ebruary and March of 1953, the Respondents

~ filed. Complaints with the Federal Maritime Board

(F.M.B. Dockets 782-735) to recover reparations in

the amount of the differential between contract rates

and the higher charges paid by them on the variyus

shipments. The Complaints alleged that the exe we ve

patronage contract dual-rate systems employed by the

Gulf-Mediterranean Ports, and the Far East,, Confer-

ences, were. illegal in that they were in violation of

the Sherman Antitrust Act,’ and Sections 14, 15, 16,

and 17.of the Shipping Act of 1916, as amended.‘

Among the spécified charges was the ‘charge that the

‘dual-rate systems had‘ never been approved by the,

Board under Section 15 of the Act.

The Board consolidated the Complaints for hearing,

pages on with a similar Complaint filed by Isbrandtsen

Inc... (F.M.B. Docket. 726). The Board heard

- arguments in February, 1959, but withheld its

2 All known cotton exporters from the Gulf ports shipped under

the contract rates (1A. 416;_417, 421—Examiner’s Findings 42,

43. 50). Thus the Conference had a 100% monopoly on the carriage

of all cotton, other than Respondents’; cetton constituting the most

important commodity and the ‘life blood?’ of the Gulf trade (.J.A.

130, 172). *

396 Stat. 209 (1890), as amended, 15 U.S.C. i ef seq.

#39 Stat. 733 (1916),.as amended, 46 U:S.C. 812, 814; 39% Stat.

734 (3916), as amended, 46 U.S.C. 535, 816.

6

Report. until the Supreme Court ‘decided Federal * |

; Maritime ‘Board v: Isbrandtsen Po., Inc., 356 U.S. 48T,

and Congress had passed the Moteteciinn Act, Pub.

LL. 85-626, 72 Stat. 574, and the@&econd extension —

thereof (App. “A”’ 21—Rep. of Bd.). The Report of °

the Board, decided August 4, 1961, was served August

9, 1961, together with its Order. dismissing the ‘Com-

plaints.

On Petition for Review, the United S tates Court of -

Appeals for the District of Columbia Circuit, on Jan-

uary 10, 1963, revers sed and remanded the matter to

the Commission® for assessment of reparations. Peti-

tions of the Gulf-Mediterranean ‘Ports Conference,

and Members of the Far East Conference, for Rehear-

_ing en Banc were denied en Bane on February 15, 1963, .

| and February 26, (1963, respectively.

Any additional facts which may ‘be applic: ible or

: pertinent to the determination of the questions pre-

ss

sented will be set t forth in the argument of the s¢ ey

0 sea:

a ARGUMENT

Preliminary Statemert .@

These Cases Do Not ‘Warrant Review on Writ of Cértiorari

Rule 19 of the Supreme Court Rules provides that

a review on Writ of Certiorari is a matter of judicial

diseretion; and will be granted only wheve there are

special and important reasons therefor,

’ The Federal Maritime Board, w shich made the final Report and

Order, was abolisked, and all 6f its functions under the Shippjng

Act, 1916, 39 Stat. 728, ef seq.. as amgnaed, 46:U.S.C_ 801, et seq.

insofar as here material, were transferred to the Federal Maritime

Commission by Section 103(a) of Reorganization Plan No. 7- of

1961, effective August 12, 1961 (26 F.R.7315). ;

SAE ed 7

In the itistanit cases there are no special and impor-

~ tant reasons for the granting of the Writs, inasmych as

the underlyi ing principles of the law involved have been

clearly settled and decided. There is no cenflict be-

tween the various Courts of Appeals, nor do the eases

present important questions of Federal law w hich

have not been, but should be settled by this Court, or.

which are in'any way in conflict with this Court’s de-

cisions... In Ishrandtsen Co., Ine. v. United States

(1954),.93 U.S, App. D.C. 293,211 F. 2d 51, Cert. Den.

(1954) 347 U.S. 990, where it.was first specifically held

that under Section 15 of the Shivping Act, 191, a

dual-rate system cannot be-effectuated prior to formal

er specifie approval by the Federal Maritime Board,

‘the Supreme Court denied a Writ of Certiorari. Simi-

larly, the Supreme Court denied. a Writ-in Pacific

West-bound Conference vy. Leval aid Co., 201 Ore. 390,

269 P. 2d 541, Cert. Den. 348 U.S. 89 (1954), ‘involv- °

ing the same question. “The fundamental principles of

statutory construction pater ay to the question eon-

cerning the retroactivity of the dual-rate system Mora-

_torium Act have been decided hy. the Supreme. Court

’ in a long line of consistent decision’ for well over 150

years,

Furthermore, the questions involved hii are of

no wublic importance or inte rest, as distinguishefl from

thavof the partiés (Rice vi Siour City Memorial Parks

Cemetery (19955), 349 U.S. 70, 74), masmuch as the two

year period of limitations, provided by Section 22 of

the Shipping Act, has long since run on every other

dual-rate reparation claim, except those of the Re-

spondents, and of Parsons & Whittemore, Ine. v. Red-

criaktiebolaget Nordst-Jernan, et al. (F.M.B. Dockets

Nos. 805, 809-813), which, in so far as counsel can as-

j

8 ; °

certain, are the only dual-rate reparation claims that

oecurred * prior to August 12, 1958, and which were ©

filed within the two’ year statutory period.

It is, therefore, respectfully submitted that no spe-

cial and impcrtant reasons for the granting of W rits

of Certiorari exist in these cases.

THE COURT OF APPEALS PROPERLY FOUND THAT —

MERE SILENCE ON THE PART OF THE FEDERAL’

MARITIME BOARD DID NOT CONSTITUTE PRIOR |

APPROVAL UNDER SECTION 15 OF. THE SHIPPING ~

ACT OF THE EXCLUSIVE PATRONAGE DUAL-RATE

SYSTEMS INVOLVED HEREIN ;

_ The Court of Appeals below, in a succinct and tren-

chant Per Curiam opinion, held that mere silence on _

the part of: the Federal Maritime Board did not con-

stitute prior approval. under Section’15 of the Ship-

ping Act, 1916,°‘of the exclusive dual-rate systems em-

‘ ployed by the’ Petitioners. herein, the Court stating ~

(313 F. 2d 586-7) :

“THe. Federal Maritime’ Board. denied repara-_

tions sought by the petitioners because of the ini+, :

- . _ position of dual rates said to have been unlawful.

It held that, since it had not disapproved the rates,

it had in effect approved. them; .....

“The dise ‘rinfinatory rates here involved were

not approved by the regulatory agency “merely be-

cause it was silent cone erning ‘them, ‘and the rates:

were therefore iNegal.” ad

* 39 Stat. 733 (1916), as amende ry 46 U.S.C. S14 (as it existed

prior to the a) -

Hie ndy

9

‘There is no eonfliet ; in the record with respect to the

facts concerning: the question of approval. It is un-

disputéd that no efforts ‘were ever made by either of |

the Conferences to obtain approval of the dual- rate

systems, and that no action was ever taken by the Fed-

eral Maritime Board.

The Board, while recégnizing that’ the. Conference

” * agreements of the Gulf- Mediterranean Ports Confer-

ence and ‘of the Far East Conference contain no ‘lan-

guage or provisions expressly authorizing the use of

an exclusive patronage contract or differentials: in

freight rates for contracting shippers, and that {t had

never specifically approved or authorized either of the

- two Conferences to institute, use or operate’ under the -

exclusive patronage contract/non-contract dual-rate -

sy stem, nevertheless, erroneously found: approval of

such systems under Section 15 of the Shipping Act, as

amended.

In support of this anaing. the Board stated that it

knew of the existence of the dual-rate systems in these’

~. Conferences, by virtue of the fact that said Confer-—

enees had filed eertain minutes and tariffs with the

~ Board’ indicating that they were. using. the sy “stems.

In this connection, the Board ree ‘ited: two extracts from

> filnutes of the Gulf-Mediterranean Ports Conference,

_ dated June 21, 1949, and February 1, 1950 (seven

months after the institution of the system), w hich the

- Board ‘stated, established the existencagof the practice '

(App. ‘A’? 25-27-Rep: of Bd. )s

Similarly, the Board referred to extracts from the-

minutes of special meetings of the Far East Confe Doe

ence on February 14 and-16, 1950, the svstem having

been instituted on February 7, 1950 ( App. as 2...

‘two **he ‘ts,

Rep. of Ba.).7 It further appears from the Board’s

Report fhat tariffs containing the dual-rates were also

filed, at sometime or other, with the Boaid by both-

Conferences.

10 ‘

The Board then stated, in substance, that since it

took no action to disapprove the foregoing documents,

it, therefore, approved the dual-rate systems, initiated

by the Conferences, merely by doing nothing. This

silence and inaction on the part of the Board was

labeled by it as “‘tacit approval”’ (App. ‘fA”’ i ;

of Bad.), the Board stating: :

‘Approval has been tacit where, no action ‘was

token and no order was#issued, and this has at-

ways been considered as ere and. e¢on-:

sisterit with Section 15.”"

The foregoing statement of the Board was in. fla-

grant disregard of the decision in Ishrandtsen Co., Ine.

v. United States (1954), 93 U.S. App. D.C. 293, 211

F. 2d 51, Cert. Den. (1954) 347: US. 990, where the

7 The alleged ‘22°’ aets and documents ref¢rred to by the Far

East Conference Petitioners (pp. 5-7, 12 of said Petitioners’ Peti-

- tion), occurring over about the same number of: years, were not

found. by the Boatd, and; insofar as they occurred prior to the

institution, by the Far East Conference of, the dual-rate system

on cotton on February, 7 1950, are in no way pertinent. The

* which seem ‘o have taken plac e subsequent to 19: 50

(see pp. 6-7 of Petitioh) are statements in a brief, and a ruling

by the Board in a whoily extraneous matter: where dual-rate

contracts were not even -mentioned., Furthermore, neither of these

two *‘acts’’. involved the dual-rate system om cotton instituted. on

Febriary 7, 1950,

It may -be of interest’ to note that in the case of oe East Con-.

ference ¢. United States (1952), 342 U.S.. 470, 578, where ‘said

brief was allegedly filed, Mr. Justice Douglas, in his dissenting

opinien, explicitly found that there had“been no approval of the

dual- rate system used by ‘the Far Fast Conference, stating that,

“Here no effort was m ade to obtain it.’ ,

li

Court of+ Appeals, District of Colunibia Circuit, ex-

plicitly held that under Section 15 of the Shipping

Act, a dual-rate system cannot be effectuated prior to

formal or specific approval by the Board. In that

e case, the Japan-Atlantie and Gulf, Freight Conference

in December, 1952, filed a statement with the Board,

“pursuant to ‘the requirements of Géneral Order 76,

‘proposing initiation of an exclusive patronage con-

tract ‘non-contract dual-rate system. In accordance

with Board procedure, notice of the / filing of the Con-

ference’s proposal was, published in the Federal Reg-’

ister. The Attorney General, on behalf of the United

States, and Isbrandtsen filed protests, and requested

an immediate hearing. Thereafter, without a hearing,

the Board issued an order permitting the proposed,

system to go into effect within forty-cight hours, setting

a hearing date subsequent to the institution of the

system. Upen application of Isbrandtsen, the Court

of Appeals granted an interlocutory injunction.

The Court, in its decision, in addition to the question

of jurisdiction, stated that: the issue involved was

‘‘doés the Shipping Act require Board approval of

‘the dual rate system before it can become effective 2?"

In deciding this issue in the affirmative, the Court

stated (211 sé 2d 51, 56).

= ‘ Agreements’ referred ie in the Shipping: Act

are defined to include’ understandings, COUNFEPENEES,

and other arrangements.” Clearly, a schéme ‘of i

dual rates like that involved here is an ‘agreement?

inthis sense. It can hardly be classifigd as an in-

- terstitial sort of adjustment since it introdiices an

entirely new scheme of rate combination and dis-

crimination not embodied in the basie agreement.

But even if it were not a new agreement, it would

ce rtainly he classe dias a ‘modification’ of Ute ex-.

12

isting basic agreement.” Iv cither case § 15 requires

that such agreements or modifications ‘shall be

lawful anly when and as long as approved’. by the

Board Until such approval is obtained, the

Shipping Act makes it illegal to institute.the dual -

rate system, And this Wegality cannot be spirited

away by action which the Board labels ‘interlocu-

tory * * * of a discretionary nature.” ’ (Emphasis

supplied; footnotes deleted except footnote 23)

*8*-We anderstand the Board to agree. that if the‘dual rate

agreement here requires Board approval under § 15, the agree-

ment could not be validated by the General Order 76. prove-

dure prier to such approval. See Board's Brief, p. 13:

The Board's analogy between the Shipping Act and

the Interstate Commerce Act, under which “rates are

effective and lawful mérely upon filing’’ (‘bid.), was

found wanting’ (p. 57): . :

In marked contrast, as we have seen above, the

Shipping Act which governs here contemplates an

entirely different scheme of regulation. 1t makes

orders with respect to agreements unlawful until

approved. This pre-approval illegality stems from

the fact that the Shipping Act specifically provides

yet Sesapsiee for legalizing that which would other-

wise be illegal ender the anti-trust, laws.

The condition upon which such authority is granted

* is that the ageney entrusted withthe duty to pro-

teet the public interest scrutinize the-agreement to

make sure that the conduct thus legalized does mot

invade the prohibitions of the pnti-trust laws anv

more than is necessary to serve the purposes of

the regulatory statute. Rut until this is done, th.

agreement is subject to the operation of the anti-

trus? laws, under which price firing mre Wye Wits.

‘are legal per se” ( Emphasis supplied ; footnotes

deleted) ,

d

13

«

The foregoing case was cited awd relied upon\by the:

Supreme Court of Oregon in’ Pacife West-bound Con-

ference Vv. Leval & Co., Ine. (1954), 269P. 2d 5A1, Cert.

Den. 384 US. 897; and in River Plate d& Brazil Con.

ferences Vv. Pressed Steel Car Company Ine., (20 Cir,

1955), 227 F. 2d 60, wherein the dual rate systems in-

volved were held to be illegal because net having had

‘prior approval.”

In River Plote d: Brazil Conferences v. Pressed Steel

Company Inc., supra, theeCourt of Appeals for the

Second Cireuit, in holding that there was no approval,

said (p. 63):

“Such approval could not come subsequently, or.

retroactively, or by some interpret: ition of the

Board made long after the event.’

_In the instant case, the Board’s insistence that mere

knowledge of the existence of the dual-rate systems,

plus total inaction on its part, constituted Section 15

approval, is so clearly incompatible with Isbrandtsen,

supra, as to make argument unnecessary. .

In Isbrandtse n, supra, there was no “tacit” approval.

There was an actual order of the Board: authorizing

the initiation of the svstem prior to a hearing thereon.

It is submitted, that. this affirm: tive. action carried in-

comparably greater weight than any so-called silent

or “tacit approval: Neve theless; the system was heid

to be unlawful beeause there had been no. férmal ap-

proval. A fortiori, if the Board's affirmative Order

“Accord: Anglo Canadian Shipping Co. v. United States, 264

F. 24.405, 410, 411 (9th Cir. 1959); Encpire State Highway Trans-

portation Ass'n., Inc. vy. Federal Maritime Board Ss )», M10 U.S.

App. D. C. 208, 201 F. 2d $36, 339 (D.C. Cir.), Cert. Den. 368

U.S. 931 (1961). .

. 14

ona specific proposal for the initiation of a system was

inadequate under the Shipping Act to legalize the dual-

‘ate system, the Board's total-sttence .and inaction,

here, would be wholly ineffectyel.

- F inally, in further obvious refutation.of the ‘ tacit”

or silent theory of approval advanced by the Board,

there is the overall fatutity implic it in the decision of

Isbrandtsen Co. v.cUnited States (1951), 96 F. Supp.

883, aff’d. (1952), by an equally divided C ourt sub Hom,

Rederi v. Isbrandtse n Co., 342 U.S. 950. In that ease

the Court expressly stated that it was incumbent upon

the Board to inquire into, and pass upon, eousidera-

tions as to reasonableness of the spread or differential

‘between the cantract and non- contract rates. Of course;

this necessary inquiry, prerequisite to the Board's ap-

proval, could not possibly have been made under a do

iothing procedure, labeled by the Roard as “tacit”?

approval, It is also in. obyious refutation of, and in-

compatible with, the ‘precise findings by the Board

as to a partic ular system's intent and effeet’’, as stated

by the Supreme Court in. Federal Maritime Board ¥;

Isbrandtsen Co. » Ine., 396 U.S. 481, 499.

Section 15 of the Act is a atatutors ¢ directive which

is mandatory, and which may not he dispensed with

either by the wilful or careless disregard thereof by

the carrier, or by the silent acquiescence therein by the

Board. Approval must be actual and specific, and can-

not be waived, or implied. The statutory mandate re-

quiring prior approval not having been complied with

by the Conferences, the dual rate systems emploved by-

the Conferences were, necessarily, illegal, as found by

the Court of Appeals, below.

: Ir |

THE 1958 MORATORIUM ACT DID NOT RETROACTIVELY

DESTROY RESPONDENTS’ REPARATION CLAIMS

~The Petitioners seem te claim, that the Moratorium

- Act (Pub. L. 85-626, 72 Stat. 574, August 12, 1958)" os

Was retroaétive in its effeet and relieved them trem all ;

oc .

—_—

aa

liability for, reparations arising front a violation of:. -

the Shipping Act of 1916, which violation occurred

long prior to the tnactment of the Moratorium Act.

The Court of Appeals below, Per Curiain, disposed of

this contention by stating (313 F. 2d 586, 587):

“We think, too, that the Moratorium Act ix. pro-

spective only and sO does not relieve an offender

from Nability for reparations arising from a vio- .

lation which oceurred prior to its enactment.”

Retroactivity is net favored in law. For this there

are sound reasons, in some cases, as in the instant case

Jinyolving vested and substantial rights, serious con-

"” stitational ones.” However, we do not think that it

is necessary. for this Court to pass upon the question

as to whether Congress had the power to make the legis-

lation under consideration retroactive, for it is clear

that Congress had no intention to make such legisla-

tion retroactive, nor did it, in fact, do so.

It is a firmly established and fundamental -principal

of statutory. construction that all statutes are to be

*Pub. L. 85-626, 72 Stat..574, ceased to be effective on June 30,

10, but was extendéd to. June 30, 1961, by Pub. L. 86-542, 74

* Stat. 203. being further extended to September 15, 1961, Ry Pub.

L.. 87-75,-75 Stat. 195; and was finally extended to Octoher 15,

1961, by Pub.-L. 87-252, 75 Stat. 521.

MCf. Forbes Pioncer. Boat Line vy. Board of Commissioners *

(W922), 255°U. 8S. 338; Ochoa v. Hernandez y- Morales (1915), 230

U. 8. 139, °-

~ 16

a

construed as having only a prospeetive operation, un-

less the Act clearly, -by-erpress lafiguage, or by neees-

sary or unav oidable implication, requires a retroactive

_ application. "If any reasonable doubt exists, it.should’

be resolved in favor of prospective operation. This

rule has been‘ recognized sinee the early days of the.

United States, and was trenehantly stated by this Conrt

“more than 157 years ago in United States v. Heth

(1806), 3 Craneh 399, 413:"'

“Words in a statute ought net to have a retro-

spective operation, unless they are so clear, strong

‘and tmperative, that no other meaning can be an-

nexed to them, or unless the intention of the legis-

lature cannot be othe TWise satisfied: * *-*

“Te fortify the foregoing construction, it may

be added; that the words ef a statute, if dubious,

ought, in eases of the present kind, te be taken

Inest strongly against the law ‘makers.’ "aa

" Also Ser: R: ynolds , MeArthur (1829), 2 ‘Pet. 417, 434;

Murray vo Gibson (1853), 15 How. “420, 423: Harrey v. Tyler

(18t4+e2-Wall. 32s, OAR: Nohn v. Waterson (1873), 17 Wall. 596,

598: Twenty Per Cent Cases (1873), 20 Wall. 179, 187 ;-Auffm ‘ordt

v Rasin (1880), 102 U.S. 620,-622; Chew Heong v. United States

ISS84). 112 US. 536-559; United States v. Burr (1895), 159 US

78, 82; White v- United States (1903), 191 U.S. 445, 552: Vnited .

States vo American Sugar Refining Co. (1906), 202 Tos. 563,577;

United States Frebelita and Guaranty fo. vo United States (1908),

MO TS. 306, B14: Union Pacitic Ru. Ro Co. y. Laramie Stock

Yards Co. (1913), 231 US. 191, 199; Shawb v. Doyle (A922). 258

US. 529, 534; Cor vo Hart (Y22), 260 U.S. 427, 454; Fullerton-

“Krueger Lumber Co. v. Northern Pacitic Ry. Co: et al. (1924), 266

Us er 437. United States v. St. Louis, SF. & TR. Co 1925);

70 Uv. we Spee United States \ Magnaita Petroleum Co (1928),

‘216 U. S. 160-162; Brewster v. Gage (1929), 280, Ur 8S. 327, 335;

Miller v. United States. (1935), 294 U.S. 435, 439; Hassett -v.

Welch (1938), 303 U.S. 303, 314; Claridge Apartments Co. v

Commisswoner of Internal: Revenue V4, 323 1 S. 141, 164; 82

C.J.8., Statutes, Sections 414-415; Sutherland, Statutory Con-

‘struction, Srd Editron ©1943). Vol. Z. Sec, 2201; Crawford Stat-

utory Construction, (1940), See. 277.

ee

| i rege % 8 to

any other:

17

. ral

Similarty. Mr. ‘Chief. Justice Marshall in Reynolds

O-+ rans MeArthur 1829), 2 9 ) Det. 417, 434, said:

Vipmetoy Teme

“ht in a principle whis h has always . ice held

sacred in the United States, that Jaws by whieh

humarry action, is to be regulated, look forwards,

rot hae ‘Awards; and are never to be construed

retrospectively, unless -the language of the act

shall render such construction indispensable.”

Indeed, as stated by Mr. Justice Peckham in United

States Fidelity and Guaranty’ Co. v. United States

(1908), 209 ULS. 306, 314, there is a’ SaaS Sam

against retrospective operation, and a statute’ should

hot receive such a construction if it is susceptible of

tz

“There are certain principles which have been

adhered to with great strietness by the eourts in.

relation te the construction of statutes as, te -~

whether they are or are net retreactive in their

effect. The presunmption is very strong that a.

statute Was Mot mednt to aet retrospectively, and

>it ought never to‘receive such a construction if it_

ix susceptible of any other. It ought not te re-

celve such a construction unless the words used are

‘so clear, strong amd imperative that no other mean-

lng ean be annexed fo them or unless the intention

of the legislature cannot be otherwise satistied.”2

Certainly, there is no declaration of retroactivity,

‘Selear, strong aid imperative” in the language of the

Nos Moratorium. Act whieh would justify a retro.

wetive construction. In faet. there is nething in the

language of the Act, nor in its legislative history, which

12 See also: White v. United Statés (1903), 1MU. S. 545, 552:

United States v. American Seyar Refining Co. (1906... 22 U.S.

563, 577: Hassett vo. Weleh (1938), 303 1: S. 303, 314; 8° C.J.S..

* Statutes, Sec. 415.

18

even remotely supports a retroactive construction.

Had Congress so intended, it would have used: corre-

spondingly appropriate language, of which it is quite

cognizable and capable.'* To the, contrary, the lan-

guage of the Act was directed to the future, and See-

tion 2 of the Act explicitly: provided that **’Fhis Act

shall be effective immediately upow enactment”’, there- |

by making it prospective only in its operation. 82

(J. S., Statutes, Sec. 413. |

: 1. The Legislative Histcry of the Moratorium Act

On May 19, 1958, the Supreme Court decided the

ease of Federal Maritime Board vy. Isbrandtsen Co.,

Ine., et al, 356 U.S. 481, 78°S. Ct. 851, stating (356

U.S. at p. 493): ; |

“Since the Board found that the dual-rate con-

tract of the Conference was ‘a necessary competi-

- tive measure to offset the effect of non-conference

competition, required ‘+ meet the competition of

Isbrandtsen in order to obtain for its members a

greater participation in the cargo moving in this

trade.’ it follows that the contract was 4 ‘resort to

to other diseriminating or unfair methods’ to.

stifle outside competition in violation of §-14

Third.’ i eal

This decision cast grave doubts upon the legality

per se of all dual-rate systems and Congress, in order

13 See Portal te Portal Act of 1947, 61 Stat. 84, 29 U.S.C, 251,

et seq. 2

1439 Stat. 733 (1916), as amended, 46 USC, 812.

‘SAS stated in Senate Report No.-s60, Augyst 31, 1961, S7th .

Cong Ist Sess: °°... . every effective dual-rate contract: used by

a conference is intended, and geasonably likely, and_tends to cause :

nonconference lines either to join the conference using the contract

or to leave the trade for happy hunting elsewhere.”” (US. Code .

Congressional gnd Administrative News, 1961, Vol. 2, p. 3128).

(Emphasis supplied). :

2 nee eee”

the intent or purpose of Congress in passing such legis-*

‘Section 15 (Isbrandtsen’ Co., Ine. vy. United States.

19

to stay the effects of the decision pending sincts time

tliat it could undertake and complete a thorough study

of steamship cénferences and their dual-rate -prac-

tices,'® passed the interim legislation amending Sec-

tion 14 of the Shipping Act, 1916. That the sole and’

only purpose of the legislation was to stay the effects

of the Supreme Court’s decision in Federal Maritime’

Board v. Isbrandtsen C o., Inc., supra, is undisputed,

and there is nothing in its legislative history. to indi-

cate otherwise.

Thus, the interim legislation authorized existing

dual-rate arrangements affected by the Isbrandtsen

decision to remain in effect." However, it was never

lation, to relax, modify, or render impotent, the then

existing statutory procedures and requirements. con-

tained or implicit in other provisions of the Shipping

Act, such as the necessity for prior approval under

(1954), 93 U.S. App. D.C. 293, 211 F. 2d 51, Cert? Den.

(1954), 347 U.S. 990), and that the spreads or differen-

tials between the contract and nen-contract rates#epuld

not be arbitrarily fixed in violation of Sections 16-and

1 Sen. Rep. 1709, 85th Cong., 2d. Sess. 2 (1958); H. Rep. 2055,

85th Cong., 2d. Sess. 1 (1958); 104 Cong’ Ree. 12908 (1958)

(Chairman Magnuson) ; id. at 1: At (Chairman Bonner). *

-17 However, even with re eck to those, the Board still retained

the power under the Moratorium Act to disapprove, cancel or

modify, in accordance with the standards set forth in Section 15

of the Act, which standards‘contain, among other specified criteria,

‘or to be in violation of this chapter,’’ as well as the approval

' requirement. Hence, the Board not only had ‘the authority, but

had a compulsive duty-to determine ‘the legality of any éxisting

dual-rate system. Anglo Canadian Shipping Co. v. United States

264 F. 2d 405, 411; Isbrandtsen Co. v. United States, 96 F. Supp

883, 892.

20 ! .

17 (Isbrandtsen Co., Inc. v. United States (1951), 96

FE, Supp. 883, aff’d.-by an equally divided Court, sub

nom. Redert v. Isbrandtsen Co, 342 U.S..950 (1952).

Thus, the purpose of the legislation was to “extend

. the right of’’* (S.R. No. 1497, June 1, 1960, 86th

Cong. 2d Sess., U.S. Code Cong. and Adm. News, 1960,

Vol. 2, p. 2461), or to ‘‘authorize’’” (S:R. No..860, Aug.

31, 1961, 87th Cong. 1st Sess., U.S. Code Cong. and Adm.

News, 1961, Vol. 2, P. 3108), conferences to employ a.-

dyal-raté system. The clear intent and purpose of Con-

gress was to permit or authorize the use of the dual-

rate system, from the effective date of the first mora-

=torium, notwithstanding Isbrandtsen, supra, if a con-.

ference so desired. The criteria and standagds con-

tained in other provisions of the Shipping Act, and

which had no bearing whatsoever on the question of

iHegality per se of dual-rate systems, w ere in no-way

disturbed. - } :

Th. Anglo Canadian. Shipping Company v. United

States (1959), 264 F. 2d 405, 410, the Court of Appeals,

Ninth wry after noting the provisions of Publie.

Law 85-626,.72 Stat. 574, proceeded ‘to hold that ap-

-proval of the dual-rate agreement was required: under

Section 15 of the Shipping Act. It is further to be

observed that the United States Court of Appeals, Dis-

-triet of Columbia Cirenit, in Empire State Highway —

_ Fransportation Association, Inc, v. Federal Maritime ~

: j A

18 Accordingly, H. R. 10840, would amend Publie Law § 5-626

’ in order. to extend for one year ‘the right of eligible conferences to

empioy a dual-rate system.’” (Emphasis supplied).

19% ‘The primary purpose of this amended bill is to authorize

o¢ean common carriers-and: conferences: thereof serving the foreign

commerce of the United States .to enter into effective and fair

dual-rate contracts with shippers.’’ (Emphasis supplied) —

21

Board (1961), 110 U.S. App. D.C. 208, 291 F, 2d 336,

341, Cert. Den..368 U.S. 931, stated that in the wake of

Isbrandtsen, supra, *‘Congress moved t¢ preserve the

gq status quo as far as dual-rate arrangements affected by

_that decision were concerned.’’ (Emphasis Supplied).

- Thus, the effect of the interim legislation was limited

to those dual-rate .drrangements affected by the Is-

brandtsen decision, and that did jiot include dual-rate

arrangements that were invalid because there had been

no prior approval, or because the spreads had been

arbitrarily fixed without reference toe an adequate

determining principle or standard. Indeed the status

quo, Which existed as of the date of the Isbrandtsen

decision; and srage it was the purpose of the interim

law to preserve,” clearly included the prese rvation of

the approval requirement. ee '

It is submitted that the plirase ‘‘forbid or make un-

lawful’? centained ‘in, Pub. L. 85-626, when viewed in

light of the “Act’s legislative history, clearly refers to

a per_se illegality of the dval-rate system. And-even

~Aith respect to this per se illegality, there is nothing

»” Empire State Highway Transportation’ Ass'n, Ime. v. United

States, supra, 291 F. 2d at 3417; 104 Cong. Rae. 12998 (1958)

(Chairman Magnuson); id. at 15641 (Chairman Bonner); Hear-

Ings on H.R. 6775 Before the Merchant Marine & Fisheries Sub-

committee of the Senate Commerce Committee, 87th Cong.,- 1st

Sess. 16 (1961) (Chairman Celler) ; S. Rep. 1799, 85th Cong.; 2d

Sess. (1958), at 5.-6,9 (Board Vice Chairman Guill }3 ad. at 5 ( Aet-

ing Secretary of p Setoetbhcaey Willianis). ,

21 Phat this is ipa ord with the ‘intent of Congress is borne out:

by the Senate Report on’ the first extengign of ‘the Moratorium.

The Committee described the Moratorium as allowing ‘* the con-

tinued use by conferences of a dual rate system ralidly in effect

on the date of the Supre me Court's decision.’’ S.R. No. 1497,

86th. Cong., 2d Sess: 2 (1960). U.S. Code Cong. and, Adm. News,

1960, Vol. 2, p. 2461. (Emphasis supplied )

22

in the Act, nor in, its legislative history, that would re-

quire a retroactive construction. .

However, this Court need not decide the question as.

to whether the Moratorium Act legalized dual-rate

systems not theretofore approved by the Board. The

issue in this ease is considerably more limited—

wliether the interim dual-rate legislation retroactively

validated existing unapproved dual-rate systems, there-

by retroactively destroying reparation claims which

had previgusly arisen. When the intent of Congress

to wipe out the approval requirement even prospec-

tively is so ambiguous, a fortiori there can be no yalid

basis for concluding that the approval. requirement

was abolished retroactively for the period prior to the

enactment of. the interim legislation: ;

It is submitted that, so far from the Court being com--

pelled by the language of the Act to give a retrospec-

tive operation, the plain and obvious meaning of the

Act, interpreted with ‘reference to the general scope

and declared legislative purpose, utterly forbids the.

eonelusion that there was any. intention to impair or

destroy rights previously existing.” Certainly, there is

‘no declaration of retroactivity ‘‘so clear, strong: anid

imperative, that no other meaning can he annexed’,

nor does the intention of Congress demand such a con- |

struction.” 3 : fe

22 The letter from the Department of Justice to Chairman Bonner

of the House Committee, referred to ‘by Judge Danaher in his

dissenting opinion (313°P. 2d 586, 587), is entirely inapposite. to ;

the question of retroactivity, since, at the most, it merely expresses

‘an opinion as to the possible future effeets of the proposed

_ legislation :

23 [United States V. Heth (1806), 3 Cranch 399, 413, "supra, aad

cases cited in footnote 11, supra.

~~

93

2. The Respondents’ Reparation Claims Are Preserved by the:

, General Saving Statute |

Title. a U S.C.; Seciion 109 (61 Stat. 633 ) evielabie

in pertinent part:

“The repeal of any statute shall not have. the

effect to release or extinguish any penalty, for:

feiture, or liability incurred under such statute,

unless the repealing Act. shall so expressly ‘provide,

and such statute shall be treated as still remaining

iu force for the purpose of sustaining any proper

> action or prosecution for the enforcement of such

penalty, forfeiture, or liability.” .. + #4

endl

cal

It is to be noted that this statute not only saved from

extinction a lability incurred under the repealed stat-

ute, but it saved the statute itself “‘for the purpose of

sustaining any proper action... . for the enforcement

of such... liability.” De Le Benié SS. Co., Brie. v

United States (1953), 344 U.S. 886, 389. This statute.

applies not only in the case of repeal, but also to amend-

ments, for in either event a new statute comes- into

being, and the old one ceases to exist. Morehead vy.

Hunter (10 Cir., 1952), 198 F. 2d 52,53; United States

v. Taylor (S.D.NLY. 1954), 123 F. Supp. 920, 922,

aff’d. 227. F. 2d 958, Cert. Den. 353 U.S. 961; National

Labor Relations Board v. piri Grarment Co. (8

Cir., 1948), 166 #. 2d 233, 236-2

“WwW hilé these Stisaresihionn contend th: it the’ dual-rate

Moratorium Act was clearly prospective in its opera-

*- tion, nevertheless, even if it were, retroactive in any’

respect, there Gan be no question but that the abilities:

of the warriers which Respondents sought ‘to enforce

before the Board fall digeetly within’ the purview -of

Section 109. Tenee, sind the interim dual-rate Mora--

torium did not “expressly provide’ that such liability

y

.

a

f

”

<<

e ee

“was to be ‘‘released”’ or “extinguished”, the Respond-

ents’ claims were preserved, to the extent, that. they

existed ig to the Moratorium of and 12, 1958.

Ill

THE QUESTION OF DAMAGES. Is NOT. PROPERLY

BEFORE THIS COURT

The Far East Conference -Petitioners have raised

the question concerning the assessment of ‘reparations,

the essence of said Petitioners’ contention being that

the Respondents have not proves. the proper measure

of damages. :

This question was’not passed upon by either the

Federal Maritime Board, or the Court of Appeals be-

low. The Board, in its Report, upon finding that no

liability, of any nature whatsoever, existed by virtue

of the fact that the dual-rate systems had been prop-

erly approved, and were otherwise legally instituted,

issuedgan Order dismissing the Complaints without

passing upon the question of reparations, or the meas-

ure. thereof. Although the question concerning the

measure of damages was raised in the Brie’: of all

Parties upon appeal to the United “States Court of

Appeals for the District of Columbia Circuit, the

Court of Appeals did not past upon this cuestion, but

remanded the matter te the Commission for assessment~

of reparations. Apparently, this action on the part of

the Court of Appeals was induced by the fact the Court—-

considered that it was within the province of the Com-

mission. to pass upon the matter in the first instance.

f. mg States Navigation Co. v. Cunard S.S. Co., 284

U. . Ht: Far East Conference v. United States , 342

rs . 970,

Since, under the Mregoing cases, the Pidersl Mari-,

time Commission has the. primary jurisdiction to pass

7?

* Of Counsel, Washington 5. D.C.

25 4

“upon this question, it is submitted that the action of

the Court of Appeals, in remanding the case 4

Commission for assessment of reparations, was ®n-

tirely ie |

-

| CONCLUSION

. For the foregoing reasons, it is submitted that the

Petitions of the Gulf-Mediterranean Ports Conference,

et al., and of the Far East Conference, et al., for Writs

of Certiorari to the United States Court of Appeals

for the Districc of Columbia Circuit, should be denied.

Respectfully submitted,

SHELBY Firze

De_mar W. Hottoman

James T. Wencu |

Attorneys for Respondents

1000 Vermont Avenue, NAW...

Davies, RICHBERG, TyYDINGs,

- Lanna & Durr

1000 Vermont Avemie, NW.

Washington 5, D. ©,

/ June 6, 1963

5