# Appendix — Carnation Co. v. Pacific Westbound Conference > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386411_0217%3A01 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1966 - **Citation:** 383 U.S. 213 ## Text SUPREME COURT OF THE UNITED STATES OCTOBER TERM, 1964/7265 No. 57 2o CARNATION COMPANY, PETITIONER, vs. PACIFIC WESTBOUND CONFERENCE, ET AL. ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT INDEX Original Print Record from the United States District Court for the Northern District of California, Southern Division Docket entries 1 1 SIA aca es LR ce OO NR 6 9 Motion to dismiss of defendants, members and former members of the Far East Conference, SRS EE ES Fete ee oe 23 26 Schedule of defendants on whose behalf this motion is made inlets siah ailisRsbstidedsbrsmaficune 26 28 Notice of hearing of motion to dismiss pro- ceedings Sennen eer sr 27 29 Motion to dismiss of defendants Pacific West- bound Conference, W. C. Galloway, et al. 28 30 Notice of hearing of motion to dismiss pro- - SAE EERE ee Fa A 30 32 Recorp Press, Printers, New York, N. Y., Apri 30, 1965 INDEX Record from the United States District Court for the Northern District of California, Southern Division—Continued Motion of Federal Maritime Commission to in- tervene as defendant _....-.---- Notice of hearing of motion str Motion of Federal Maritime Commission to ESSE SRE SS Notice of hearing of motion = IT OI ante Affidavit of Thomas Lisi, Secretary, Federal Maritime Commission as to authenticity of Federal Maritime Board proceedings ___ Exhibit 1—Order of Federal Maritime Board in Docket No. 872, dated October 26, 1959 for investigation Exhibit 2—Petition of Carnation Company to intervene in Docket No. 872 —.... Exhibit 3—Ruling granting petitions to in- tervene in Docket No. 872 . Exhibit 4—Extract from Page 8 “of Brief dated October 5, 1962, filed by Carnation Company in Federal Maritime Commis- sion Docket No. 872 - d Exhibit 5—Federal Maritine Board “Agree- ment No. 8200, approved December 29, 1952, Far East Conference and Pacific Westbound Conference _... Ps nse AAS UN Plaintiff’s objection to motion of the Federal Maritime Commission for leave to intervene as defendant Transcript of hearing on motion te dmies and motion of Federal Maritime Commission for leave to intervene as defendant, April 8, 1963 Aen nena Colloquy between Court and counsel - as Statement by Mr. Ransom on behalf of aelen- dant, Westbound Conference, et al. mn Statement by Mr. Dunne on behali of plaintiff Argument by Mr. Turk on behalf of co-defen- dant, Far East Conference . Original Print 32 33 33 34 34 34 35 35 36 36 38 37 40 39 42 41 45 44 46 45 47 45 57 60 61 62 62 62 64 64 65 65 76 72 1 al INDEX Record from the United States District Court for the Northern District of California, Southern Division—Continued Transcript of hearing on motion to dismiss and motion of Federal Maritime Commission for leave to intervene as defendant, April 8, 1963 —Continued Appearances __ Statement by the Court cs Statement by Mr. Dunne on behalf of plaintiff Statement by Mr. Hocd on behalf of Federal Maritime Commission Statement of Mr. Turk on behalf of Far East ps abe gp ee OE OS OD eG opie: Oe NTE ee Seren Tae I Memorandum of opinion, Sweigert, J. Order and judgment of dismissal Mn Or WI ieee Bond on appeal (omitted in printing) —__ Statement of points on which plaintiff intends to rely on appeal and designation of record, ete. Appellees’ designation of additional portions of OP I iccathticctae te Proceedings in the United States Court of Appeals Ti I a Statement of points on which appellant intends to rely and designation of record = Original Print 107 93 111 96 115 98 128 107 130 108 131 108 133 110 134 110 135 111 139 114 149 121 159 127 168 133 174 137 176 138 178 140 180 141 181 141 188 147 192 150 192 150 iv INDEX Original Print Minute entry of order directing filing of opinion and filing and recording of judgment 208 156 Opinion, Pope, J. 204 7 Judgment . 232 187 Petition for rehearing 233 18s Minute entry of order denying petition for rehear- ing M46 200 Opinion on petition for rehearing 247 200 Clerk's certificate 249 202 Order allowing certiorari 250 208 [fol. 1] IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA [fol 2 DATE 1962 Dee 4 6 »1 SOUTHERN DIVISION 41158 FILINGS PROCEEDINGS Filed complaint, issued summons Kiled order appointing W. J. Kelley of San Francisco, Calif, for the purpose of serving summons in this action (Weigel) Filed summons, exeented as to American Mail Line, Ltd. Daido Kaiun Kaisha, Ltd. The East Asiatic Company, Ltd. Nippon Yusen Kaisha, aka NUY.K. Line, Pacifie Westkound Conference, States Steamship Co. United States Lines Co, Dee. 6, 1962; American Presi dent Lines, Ltd. Far East Conference, Fern-Ville Far East Lines—-Fearnley & Keer, AL FL Klaveness & Co, AUS, Skib- saktieselskapet Varild, Skibsaktieselska. pet Marina, Aktieselskabet Glittre, Damp- skibsintoressentskabet Garonne, Skibsak tieselskapet Sangstad, Skibsaktieselska. pet Solstad, Skibsaktieselskapet Siljestad, Dampskibsaktieselskabet International, Skibsaktieselskapet) Mandeville, Skibsak- tieselskapet Goodwill, Aktieselskabet Standard, Fearnley & Egers Bef ragtning- sforretning A/S, TINO) Kaiun Kaisha, Ltd, Java Pacitie & Hoegh Lines—Joint Service, N. V. Stoomvaart Maatschappij “Nederland”, Koninklijke: Rotterdamsche Llevd, NV. Skibsaktieselskapet Arizona, Skibsaktieselskapet Astrea, Skibsaktiesel. skapet Aruba, Skibsaktieselskapet Nor. ~ i 2 DATE FILINGS—PROCEEDINGS 1962 Dee 21 3 euga, Skibsaktieselskapet Abaco, A/S At- (Cont) lantiea, Kawasaki Kisen Kaisha, Ltd., Klaveness Line-Joint Service, Skibsaktie- selskapet Sangstad, Skibsaktieselskapet Solstad, Skibsaktieselskapet Siljestad, Dampskibsaktieselskapet International, Skibsaktieselskapet Mandeville, Skibsak- tieselskapet Goodwill, Knutsen Line-Joint Service. Dampskibsaktieselskapet Jean- ette Skinner, Skibsaktieselskapet Pacific. Skibsaktieselskapet Marie Bakke, Damp- skibsaktieselskapet Golden Gate, Damp- skibsaktieselskapet Lisbeth, Skibsaktiesel- skapet Ogeka, Hvalfangstaktieselskapet Suderoy, Lykens Bros. S.S. Co. Ine., A. P. Moller-Maersk Line-Joint service, Dampskibsselskabet AF 1912, Akticsel- skabet Dampskibsselskabet Svendborg, Nitto Shosen Co. Ltd., Pacifie Far East Line, Inc., Pacific Transport Lines, Inc., Shinnihon Steamship Co., Ltd., Trans- ocean Transport Corp. (sometimes d/b/a Magsaysay Lines), United Philippine Lines, Ine., and Yamashita Kisen Kaisha December 7, 1962; as to Isthmian Lines, Inc.; Mitsubishi Kaiun Kaisha, Ltd., Mit- subishi Shipping Co. Ltd., Kokusai Line- Joint service, Mitsui Steamship Co., Ltd. Nippon Kisen Kaisha, Ltd. (sometimes d/b/a Nissan Pacific Line), Nissan Kai- sen Kaisha, Ltd., Osaka Shosen Kaisha, Ltd., Prince Line Ltd., States Marine Corp., States Merine Corp. of Delaware, | States Marine Lines, Ine. (a/k/a Global | Bulk Transport Corp.), Waterman Steam- ship Corp., Wilhelmsens Dampskibsak- biti ope amet LOT RENT RSREE ene cede 59 UNITED STATES LINES COMPANY (American Pioneer Line) By: (signed): P. E. McIntyre P. E. McIntyre Title: General Freight Traffic Manager WATERMAN STEAMSHIP CORPORATION By: (signed) : J. W.O. Vow Hersvutia J. W.O. Von Herbulia Title: Vice President WILHELMSENS DAMPSKIBSAKTIESELSKAB A/S Den Norske Afrika-Og Australielinie A/S Tonsberg A/S Tankfart I A/S Tankfart IV ( A/S Tankfart V A/S Tankfart VI (Barber Stean..i:p Lines, Inc., Agents.) By: (signed): V. G. Barnett * V. G. Barnett Title: President (fol. 56] MEMBERS of the FAR EAST CONFERENCE (continued) YAMASHITA KISEN KAISHA (Norton, Lilly & Company, General Agents. ) By: (signed): S. S. Norton S. S. Norton Title: Partner USCOMM-MA-DC 60 [fol. 57] [File endorsement omitted] In tHe Unirep States District Court For tHe NorTHerN District oF CALIFORNIA SouTHERN Division Civil Action File No. 41153 CarnaTION CoMPANy, a corporation, Plaintiff, v. Paciric WestsounD CONFERENCE, an unincorporated as- sociation, Far East CoNFERENCE, an unincorporated as- sociation, et al., Defendants. PLAINTIFF’s OBJECTION TO MOTION OF THE FEDERAL MapI- TIME CoMMISSION FOR LEAVE TO INTERVENE AS DEFEN- pant—Filed March 21, 1963 {fol.58] Plaintiff, Carnation Company, a corporation, ob- jects to the granting of the motion of the Federal Maritime Commission for leave to intervene herein as a defendant and for ground of objection shows as follows: 1. The Federal Maritime Commission has no interest in the subject matter of this action, or any part of the sub- ject matter thereof or any other interest herein and does not present or suggest any matter of interest upon its part in any phase of this action. 2. The Federal Maritime Commission does not present, or seek to present, any claim or defense herein or any mat- ter in aid of or connected with any matter of ciaim or de- fense herein and by its intervention does not seek to par- ticipate in the determination of any issue in this action but by its motion for leave to intervene and by its purported answer (tendered for filing, apparently, in attempted com- pliance with FRCP Rule 25 (c)) seeks to intervene not to PE MISE TE SNE EI NE CTE LEN HS INT LLNS NT NETL LITE —— -_ present any question of law or fact or any matter con- nected with any issue of Jaw or fact in the action but solely for the purpose of moving to dismiss the action and the said answer sets forth no matter of claim or defense to this action. 61 ' 3. In this action plaintiff does not rely for ground of claim upon any statute administered by the Federal Mari- time Commission or any regulation, order, requirement or agreement issued or made pursuant to the Shipping Act i of 1916 or any executive order and does not rely on any { alleged nonapproval by the Federal Maritime Board or the Federal Maritime Commission as alleged in the complaint or otherwise and does not rely on any claim of violation of the Shipping Act of 1916 but relies in this action solely upon violation of the antitrust statutes of the United States and sets up the nonapproval, referred to in the complaint, only to show that there is no impediment to the claim made by plaintiff or to the operation of the antitrust statutes of the United States by reason of any provision of the Shipping Act of 1916. [fol.59] 4. The application for leave to intervene is not properly made and should not be granted under FRCP Rule 24 (b). Respectfully submitted, Arthur B. Dunne, Wallace R. Peck, James R. Baird, Jr., William H. Birnie, Dunne, Bledsoe, Smith, Phelps, Catheart & J ohnson, By Arthur B. Dunne, Attorneys for Plaintiff. Authorities Plaintiff will rely on the authorities in authority memo- randum which plaintiff will file in opposition to the motions to dismiss. Arthur B. Dunne, Wallace R. Peck, James R. Baird, Jr., William H. Birnie, Dunne, Bledsoe, Smith, Phelps, Catheart & J ohnson, By Arthur B. Dunne, Attorneys for Plaintiff. 62 Receipt of a copy of the foregoing objections is acknowl- edged this day of March, 1963. Edward D. Ransom, William H. King, Lillick, Geary, Wheat, Adams & Charles, By H. D. Harris, Jr., Attorneys for Defendants. [fol.60] Certificate of Service by Mail (omitted in print- ing). [fol. 61] [File endorsement omitted] In tae Unitrep States District Court For THE NortHERN District OF CALIFORNIA SoutHERN Division Before: Hon. William T. Sweigert, Judge. No. 41153 CaRNATION ComMPANy, a corporation, Plaintiff, vs. Pactric WestspounpD CONFERENCE, an unincorporated as- sociation, Far East CoNFERENCE, an unincorporated us- sociation, et al., Defendants. Transcript oF HEARING ON Motion To Dismiss AND MoTIon or FreperRAL MaritiME CoMMIsSsION FoR LEAVE TO INTER- VENE AS DEFENDANT—April 8, 1963 [fol.62] APPEARANCES: On behalf of the Plaintiff: Messrs. Dunne, Bledsoe, Smith, Phelps, Catheart & Johnson, 315 Montgomery Street, San Francisco, California, By: Arthur B. Dunne, Esquire and James R. Baird, Jr., Esquire. 63 On behalf of Defendant Westbound Conference and de- fendant carriers in that Conference: Messrs. Lillick, Geary, Wheat, Adams & Charles, 311 California Street, San Francisco, California, By: Edward D. Ransom, Esquire, William H. King, Esquire. On behalf of Co-defendant Far East Conference: Elkan Turk, Jr., Esquire, 120 Broadway, New York 5, New York. On behalf of Defendant-Intervener Federal Maritime Commission: Robert B. Hood, Jr., Esquire, Federal Maritime Com- mission, Washington 25, D. C. [fol. 63] Monday, April 8, 1963 2:00 o’elock p.m. The Court: All right, gentlemen. Whenever you are ready. The Clerk: Civil Action 41,153. Carnation Company versus Pacific Westbound Conference. Motion to dismiss and motion for Federal Maritime Commission for leave to intervene as defendant. Will counsel please state their appearances for the record. Mr. Ransom: Edward D. Ransom of Lillick, Geary, Wheat, Adams & Charles, counsel for the defendant Pacific Westbound Conference and the defendant carriers in that Conference. With the leave of this Court, which I hope will be granted, Elkan Turk, Jr., from New York City for the Far East Con- ference and its member-line carriers, co-defendant in this case. The Court: We are glad to grant the motion. We wel- come you. 64 We had some lawyers in our last trial from New York. I hope we treated them all right. Mr. Ransom: Also with the leave of the Court, Robert B. Hood, Jr., for the Federal Maritime Commission. Mr. Dunne: For the plaintiff, Arthur B. Dunne and [fol. 64] James R. Baird, Jr. Mr. Ransom: May I formally move for the admission for the purpose of this proceeding Mr. Elkan Turk, Jr., member of the Bar of New York, and Mr. Robert Hood, Jr., member of the Bar of Virginia. The Court: No objection. I am glad to grant the motion for appearance in this court for this case. CoLttoquy Between Court anp CouNSEL Gentlemen, I have read, as best I could, the memoranda and I have an abstract of the situation before me. I do not claim to know all about it, but as I understand it, this is an action brought under the Sherman and Clayton Acts. It is in the nature of an antitrust action against these defen- dants. It arises out of a claim that the defendants entered into an agreement to fix certain shipping rates, and the charge is that this was a conspiratorial agreement contrary to antitrust. The defendants point out that any rates which they charge are supposed to be approved by the Federal Mari- time Commission although these particular rates involved, as far as I can understand the matter, were not actually approved. As I understand it, the fixing of rates without approval of the Federal Maritime Commission is unlawful and contrary to the terms of the Shipping Act itself. The Federal Maritime Commission asks leave to inter- vene in this case for the purpose of making a motion to dis- miss the Complaint. The defendants also move to dismiss the Complaint. [fol. 65] The dismissals, as I understand it, are asked upon the ground that the Federal Maritime Commission has the primary exclusive jurisdiction over these matters. 65 The defendants, however, take the position, as I read your briefs, that since these particular rates were not approved by the Federal Maritime Commission that they are just an ordinary garden-variety part of some conspiratorial anti- trust agreement and that the Federal Maritime Commission has nothing to do with it. Let me ask this one question before we get going on the matter: Am I correct in assuming that it is admitted here that the rates which are the subject of this suit or a part of the alleged conspiracy were not in fact approved by the Federal Maritime Commission? SraTeMENT By Mr. Ransom on BEHALF OF DEFENDANT, WEsTBoUND CONFERENCE, ET AL. Mr. Ransom: If Your Honor please, that is approxi- mately correct. It is not really the rate that is approved. It is the agreement, the method of fixing the rates, the agree- ment by which the rates were arrived at. It is our position, Your Honor, that in fact they were and that this is an issue in the case which will have to be determined in the case, whether or not the approvals of the agreements which have been approved cover the particular transaction of which the plaintiff complains. The Court: Let me ask this question: Does the Shipping [fol. 66] Act contain provisions whereby shippers can under certain circumstances and with the approval of the Mari- time Commission enter into agreed tariffs? Agree upon tariffs among themselves? Mr. Ransom: You mean the carriers. Yes, it does. The Court: That is why it has the provision that if that type of agreement is approved it is taken out of the anti- trust action. Mr. Ransom: It is our position, Your Honor, and I really have to almost argue the case to answer that, that while there is an express exception out of the antitrust for that which is approved, the exception from the antitrust laws under the cases which have been decided, under the doctrine of primary jurisdiction, whether approved or not approved, 66 it still comes within the Shipping Act, its set of regulations, and is taken out of the Court’s power to— The Court: You cite certain cases which you say hold that? - Mr. Ransom: Yes, Your Honor. The Court: Do I understand you to say that these cases which you have cited actually hold as they appear to hold, that even though the rates involved or the agreements for rates involved have not been approved, actually approved, by the Maritime Commission, that nevertheless the subject matter of those agreements and rates is within the exclusive [fol. 67] primary jurisdiction of the Federal Maritime Com- mission? Mr. Ransom: Very definitely, Your Honor. The Court: If the cases hold as you say they do, isn’t that the end of this matter? Mr. Ransom: Precisely, Your Honor. The Court: Let’s ask counsel for the other side if they have any contention to the contrary. You have just heard the statement of counsel made here concerning the cases. I have not read them, but that is coun- sel’s version of them. I would like to ask the plaintiff if the eases do hold that when agreements are made between car- riers for fixing rates, if that is the term to use, that, then, even though those agreements and rates have not been ap- proved by the Maritime Commission that nevertheless the subject matter is still the primary exclusive jurisdiction of the Federal Maritime Commission. Mr. Dunne: It is our position that the cases do not so hold. The Court: That is what I wanted to hear. Mr. Dunne: If we can get right down to what I think it is, it becomes comparatively simple. Counsel very correctly told Your Honor with respect to rates of foreign carriers. Now, Your Honor will have an occasion to look at the [fol. 68] Shipping Act. I call Your Honor’s attention to the fact that in dealing with carriers by water it deals with two ‘ 67 classes of carriers; carriers in interstate commerce, or do- mestic carriers, and carriers in foreign commerce. The first section of the Act is very explicit in its definitions of car- riers in foreign commerce and carriers in interstate com- merce. The provisions of the Act are different in some re- spects with respect to carriers in foreign commezce and carriers in domestic commerce. The Court: Would they be different in the connection that counsel has referred to these cases? Mr. Dunne: Yes, Your Honor. The Court: You, then, make a distinction between inter- state commerce and foreign commerce? Mr. Dunne: That is correct, because of certain provi- sions of the Act with respect to filing of tariffs by domestic carriers and the maintaining of reasonable rates by do- mestic carriers. There are provisions that apply to all of them about preferences and discrimination, but with re- spect to the rates of domestic carriers the scheme is very much like the scheme of the Interstate Commerce Act as to the carriers by railroad for the filing of tariffs and main- taining of reasonable rates, My recollection is that they charge only the rates that are filed. The scheme as to rates as to foreign carriers is quite dif- (fol. 69] ferent. At least it was before the amendment of 1961. I want to call Your Honor’s attention to the fact that this case arises before the 1961 amendment. The 1961 amendment changed the scheme of regulation as to foreign carriers, carriers in foreign commerce, to make it very much like that of railroads and like that for domestic carriers re- quiring that rates be filed and that the carriers collect neither anything more nor less and different from the filed rates. But until the 1961 amendment the scheme of this Act as to foreign carriers in foreign commerce was quite differ- ent as to rates. The Court: Before you get into the distinction, let me ask you this question: With respect to interstate carriers, would counsel’s version of the cases be substantially cor- rect? Mr. Dunne: Certainly would in certain respects as to rail carriers. One of the cases they rely on is the Teal case, common carriers by railroad. As far as I know, none of us have cited any case that touches on that exact point, even on domestic water carriers. As to the rail carriers, the leading case there, as to the file and approved rates, is the Teal case. The Court: In other words, counsel would be correct if he said that there are cases which hold, let us say, that inter- state rail agreements and rates, even though not actually approved by the Maritime Commission, would remain {fol. 70] within the exclusive primary jurisdiction of the Commission. Mr. Dunne: The Maritime Commission applies, of course, only to carriers by water. You put a question as to rail carriers. The Court: That is right. An analogy. Mr. Dunne: The situation as to rail carriers is slightly complicated. The Court: Well, let’s stay away from the rail carriers. Let me ask counsel this question. I am going to let you go your own way later on. I just want to see if we can nar- row it down a little bit. Mr. Ransom, will you state again your version of what these cases hold as you described them before. I am not going to interrupt your train of thought here, Mr. Dunne. You can later on go into this in your own way. [ am making it a little difficult, I guess, for you now. Mr. Dunne: Your Honor is trying to see if we cannot meet head-on on this. The Court: That is right. Mr. Ransom: I think we can, Your Honor. The Court: You state how we can, then. Generally there is an issue in these cases and sometimes it is a very cir- cuitous route by which we try to get at those issues, and I am trying to see if we cannot cut through and see if there is [fol. 71] not an issue of fact or law, or whatever it is, be- tween you people that at least you can agree on the issue. RIE LEE RN TLE LEER TL IIE SEI RIOR IVE. CPT ENERO EE I IIE TY CASI: Se hanna — 69 Mr. Ransom: Your Honor, I do not think this question of the difference in how rates are made up, foreign or do- mestic, goes to the essence of this case at all. What Carna- tion is complaining about is that a rate was set by reason of agreements between these carriers and that the agreements were beyond the scope of agreements which had been ap- proved. Therefore, they say the agreements by which these rates were set were unapproved, and being unapproved they are subject to the Antitrust Laws. We say whether approved or not approved they are still subject to the Shipping Act and unapproved agreements making rates between foreign carriers is unlawful under the Shipping Act. The Shipping Act is the act which deals with that particular unlawfulness and that the Sherman Act to that extent is superseded. Now, we also say, and this is an issue of fact, that the agreement which was approved was broad enough to in- clude in fact the actions of these parties so that we will con- tend as a factual matter and a legal matter in the Commis- sion when we are there, or if we have to, in this Court, that you do not ever really reach the question of approved or un- approved because we acted under an approved agreement. Now, this is an issue where We say this is an issue of dis- [fol. 72] agreement. The further issue of disagreement is: Assuming we are wrong about whether we are approved or disapproved, Mr. Dunne and Carnation Company say if that is the case you are at large under the Antitrust Laws. We say: no, the courts have decided that question and we are still under the Shipping Act and we are not under the Antitrust Laws. The Court: All right. Let’s get a little specific. What are those cases that you say have established that proposition? Mr. Ransom: I would like to review them at some length. The Court: Befor® we review them at length, and we probably will have to, do you know offhand which ones they are? Mr. Ransom: Yes, Your Honor. It is United States Navi- gation Company against Cunard, which was decided in 1932; the Far East Conference against United States, de- 70 cided in 1952. Those are the two Supreme Court cases. Those deal with injunction proceedings. The third case which settled the issue for all time, as far as we believe, is the American Union Transport against River Plate and Brazil Conference. That is a District Court decision of the District of New York, affirmed without even writing an opinion. {fol. 73] .The Court: Yes. That is the 1954 case. Mr. Ransom: Yes. The Court: Those are the three cases? Mr. Ransom; Those are the three cases which we think this case should be decided on without the necessity of re. ferring to any other cases, and those are the cases we say hit the issue right exactly between us. The Court: Will you just, then, if you will, state for me as concisely as you can what those cases hold. Mr. Ransom: I will endeavor to. I should add this, if Your Honor please, that all these three cases concern themselves with not domestic water carriers but water carriers in foreign commerce that we are concerned with here. The Court: You say these three cases deal with water carriers in foreign commerce as in this case Mr. Ransom: As in this case. Now, the first one, the Cunard case was a suit—Do you wish me to— The Court: Let’s start with the general and then get down to the details. I may not be able to understand it if you get too much detail. Tell me what you think they hold just a plain garden-variety statement as to what you think they hold related to this case. Mr. Ransom: These cases hold, if Your Honor please. [{fol. 74] that where an agreement is entered into betweer carriers in foreign commerce of an antitrust, anticompeti tive nature, a rate-making agreement, and the agreement has not either been submitted to or approved by the Fed eral Maritime Commission, the parties find their remedy they must seek their remedy under the Shipping Act be. ~~ ee | . 71 cause the Shipping Act has for the steamship industry a scheme of regulations, a scheme of antitrust regulations, which applies as to that industry and which is the exclusive remedy for matters which come within or which relate to agreements of a shipping act section 15 type. I think that is exactly what they hold. The Court: Let's put it this way: If they do hold that, I take it from your statement that they would be dispositive of this case because, as you have described them, they seem to be on all fours. Is that correct? Mr. Ransom: Yes, Your Honor. | would say the only at- tempt that I can see, the only possibility of trying to dis- tinguish these cases from our case, is that in the two Su- commerce. In neither case is there any indication or hint or suggestion that the fact that they are seeking an injunction has anything to do with the theory of the case, [fol. 75] The reason that I cite to Your Honor the third case is that it dealt with treble damages. It was as Carna- tion here. It sought treble damages under the Antitrust Act. The Court there had the benefit of the opinion in the Cunard case and in the Far Kast case, and the Court there again dismissed the treble- damage action. I should say, also, that of these cases there was a dissent in the Far East Conference case by Mr. Justice Douglas. The Court: That is the last one? Mr. Ransom: That is the second of the two Supreme Court cases. Mr. Justice Douglas’ dissent presented the same argu- ment which Carnation has presented here in its brief : namely, if you do not have an approval you do not have an exception. The Court discussed Mr. Justice Douglas’ dissent and said: whether there is merit to it or not merit, we are bound = P ——— 72 by the decision of the Supreme Court in the Cunard and the majority in the Far East. So this point was argued in that ease, if Your Honor please. I should also like to point out that the Cunard decision was a unanimous decision of all nine Justices, written by Mr. Justice Sutherland. {fol. 76] The Court: I will have to read that myself. Mr. Ransom: It is very unusual, Your Honor. It had on the Court at that time such quite well known Justices as Justice Holmes and Justice Brandeis. . In the Far East case, six out of the eight of the Supreme Court Justices were in favor of our position. Stepping back a moment, in the Cunard case in the Sec- ond Circuit, Judge Augustus Hand wrote the opinion, which I think is a classic. All the arguments that could have been brought up were disposed of. Justice Learned Hand con- curred with it. The A.U.T. ease, which I mentioned, was by Judge Edel- stein in New York. When it got to the Second Circuit, Justices Clark, Medina and Dimock adopted the opinion, considering that the law was so well established that there was no need to write a further opinion. Now, there are other cases besides these that follow then, but those three cases we say are definitely dispositive of this case. The Court: Let’s stop here for a minute. Mr. Dunne, you have heard that version of the situation. STaTEMENT BY Mr. DunNE on BEHALF OF PLAINTIFF Mr. Dunne: And you would like me to be just as short and concise and confine myself to a few main authorities as coun- sel from the other side. {fol. 77] Now, our first proposition, and I do not under- stand it to be disputed directly, is this: Section 15 of the Shipping Act, actually providing that carriers in foreign commerce might enter into agreements to fix rates, should be lawful when approved by the Federal Maritime Com- mission. PENH POR NPE IE MARMOT FOAL MOOV Nn, RINNE OV eR IRR as —— — ———— 73 Now, we are all going to refer to it as the Commission. There have been various agencies from time to time which have been charged with the administration of this Act. They then should be lawful. It provided that to carry out unapproved agreements was unlawful. Then it said this: “Every agreement, modification, or cancellation law- ful under this section . . . shall be excepted from the provisions”— I am reading now from the Code. “of Sections 1-11 and 15 of Title 15 and amendments and Act supplementary thereto.” So it provided a method of getting an exemption from the antitrust statutes which were by approval by the Federal Maritime Commission. On Page 6 of our brief we have cited cases. The last one which we have quoted is California against Federal Power Commission approving the holding in Maryland and Vir- ginia, the Bar Association, and so forth, for the proposition that when Congress has provided a method for exemption [fol. 78] from the antitrust statutes you get an exemption only in the way provided for by Congress. That is one point upon which we have never really met anywhere. Now, the second thing is this. Counsel calls your attention to the Cunard case and the Far East case, two decisions of the Supreme Court of the United States. We are going to submit to Your Honor that aside from this first point, the question which Your Honor eventually is going to decide is this: Is the ease in hand controlled by Cunard or is the case in hand controlled by Great Northern against Merchants Elevator, 259 U.S, 285. Now, there is a very significant thing about Great North- ern against Merchants Elevator. It is cited and quoted at great length, and is the principal reliance of Justice Suther- land in the Cunard ease. In due time when we argue this I will point out where Great Northern fits into this whole pie- ture. I just say now it was Mr. Justice Sutherland's princi- 74 pal reliance, with a long quotation, for the explanation of the doctrine upon which he was relying in Cunard. When we get to the facts of this case, then I will point out to Your Honor what Great Northern against Merchants Elevator holds. Well, it is not exactly flippant, but in an endeavor in the closing brief to dispose of the Merchants Elevator case, it is pointed out somewhat solemnly that the case was de- cided in 1922. [fol.79] But in the United States against Western Pacific Railroad Company, 352 U.S. 59, Mr. Justice Harlan was very careful to point out that the Court reaffirmed and ad- hered to the distinction made in Great Northern against Merchants Elevator. So it is not a case, by any means, that has lost its vitality. The Court: Let’s call it the Great Northern case. Mr. Dunne: Yes, Your Honor. In due time we will enlarge on that, Your Honor. Now, to go back to the two United States Supreme Court cases that counsel has called Your Honor’s attention to, the Cunard case and the Far East Conference case, Mr. Chief Justice Warren in his landmark opinion in this field in United States against Radio Corporation of America, RCA, 358 U.S. 334, undertook some discussion of the United States Supreme Court decisions in this field and noticed both Cu- nard and Far East Conference. He cited them both but he eited them this way, as explained in Federal Maritime Board against Isbrandtsen Co., 356 U.S. 481— The Court: In what? Federal Maritime—? Mr. Dunne: Federal Maritime Board against Isbrandt- sen Co., 356 U.S. 481. When we come down to that case, when we compare on the one hand the case upon which Cunard relied, the Great Northern case, and its theory, and, then, on the other hand [fol. 80] look at the reaffirmation of the theory of Great Northern in Isbrandtsen, and Mr. Chief Justice Warren’s citation of Cunard and Far East, but as explained in Isbrandtsen, I think we will come down to the nub of the issue in the case, Your Honor wanted a very short statement of what we think are the few controlling authorities, although there are ee SF Nal ENR IP NET POSS — 75 other decisions of the Supreme Court that deal with various facets. The Court: Let me ask you a few questions so I can get these in order. What was the date of Far East ané Cunard, each of those cases? If you know. Mr. King: Cunard was 1932, Your Honor, and Far East | was 1952. Federal Maritime Board against Isbrandtsen was . 1958, | Mr. Dunne: Great Northern is 259 U.S., and that would come before Cunard. About 1932, or so. Mr. King: 1922. The Court: U.S. versus Western Pacific, approximately? Mr. Dunne: That is 1961 or so. U.S. against RCA, that is a little later. That is 358. That is about 1961 or 62. No. It is farther back than that. The Court: Approximately. Mr. Dunne: It is in the late fifties. These cases come after Far East Conference. The Court: Your position is, then, that these cases that he cites, properly read, properly understood, are not ap- [fol. 81] plicable to this? Mr. Dunne: Have nothing to do with this case. This isa simple overcharge case which falls squarely within Great Northern. There is not an administrative question in this case. It is a plain case of charging more than the only law- ful rate and doing it because there was a conspiracy in viola- tion of the antitrust statutes. The Court: This is not an action. if there is such an ac- tion, provided under the Shipping Act to collect overcharges or recover overcharges, is it? Mr. Dunne: Not under the Shipping Act, no, because the overcharge was unlawful under the antitrust statutes. The Court: You mean arguendo. Mr. Dunne: That is right. It is not remitted to the Ship- ping Act because the Shipping Act cannot give us the full remedy we are entitled to under Antitrust Acts. The Court: What remedy does the Shipping Act give? Mr. Dunne: It hasa two-year limitation, whereas we have four under the antitrust. They give single damages; we get —— PRA I sa anes 76 treble in antitrust. If it is a jury trial, under the antitrust statutes the Government awards attorney fees whereas the Shipping Board Commission cannot give us anything. The Court: The Shipping Act gives what, a two-year limited right to what? Mr. Dunne: Reparations. {fol.82] The Court: To reparations. By a suit? Mr. Dunne: By a proceeding before the Commission. The Court: By a proceeding before the Commission. Mr. Dunne: That is right. The Court: Whereas by proceeding under the Antitrust Act you have more time, the right to a jury trial, and et cetera. Mr. Dunne: In other words, we should point out that the remedy under the Shipping Act does not displace any rem- edy under the Antitrust Act assuming the same conduct violates both the Shipping Act and the Antitrust Act be- cause it does not give the complete remedy and does not displace the other remedies. The Court: Maybe this would be the time for you to tell me as briefly as you can, remembering that you can go into detail later to any extent you wish, just what you mean when you say that those cases referred to by Mr. Ransom, on which he has given his version, are distinguishable in the light of, let us say, Great Northern. Mr. Dunne: Great Northern— The Court: Before you do it, let me see if 1 can repeat what he said. He said that where agreements between car- riers in foreign commerce have not been submitted to or ap- proved by FMC, the parties must seek their remedies under the Shipping Act because it has a scheme of antitrust regu- {fol. 88] lation, and so forth, and that this is exclusive. He says that that in effect is what has been held by Far East, by Cunard, and followed by what we will call Brazil. Mr. Ransom: American Union Transport versus River Plate and Brazil Conference. The Court: Now, you must say and you say impliedly, that it really cannot hold exactly that. nies ‘ ae gPrtseic asic x te et _ 77 Mr. Dunne: That is right. The Court: What do these three cases hold, that is, Far Kast, Cunard, and the New York case, according to your version in the light of, jet us say, Great Northern? Very briefly. Mr. Dunne: Let me put Great Northern on its very lowest common terms. I have to go back just a little bit to do that. Of course, the fountainhead about which we are all talk- ing about is Mr. Chief Justice Fuller’s opinion in the Texas versus Abiline Cotton Oil Company case. He held in that case that where there was a regulatory statute—in this case the Interstate Commerce Act, which had set up, to use a later expression of Mr. Chief Justice Warren, a pervasive scheme of regulation of the particular industry, that there were certain things that were committed to that Commis- sion, it would act on certain matters, and where uniformity Was essential to the whole regulatory scheme, and particu- [fol. 84] larly where the question upon which uniformity turns, Was not a question of law which could be resolved for everybody by an appeal to the United States Supreme Court. [am not relying on my imagination on this. The cases have later pointed that out. But where it turned on question of fact—and as Your Honor knows, the courts on question of fact can only bind the parties immediately before them—that in such cases to determine who should act, then in aid of the general regula- tory scheme, so that it should be applied generally, the regu- latory commission should be permitted to act. That is the beginning of the primary jurisdictien doetrine. Following that, there were p series of cases involving railroad rates in which it was held thet these disputes over these rates amount toa question upon which there must be u.formity. Indeed, as Mr. Justice Brandeis pointed out in the Great Northern ease, it may also require some expertise. Those cases had to go to the Commission first. Then eame along Great Northern. Now, in Great Northern there was an overcharge, or so it: was claimed, and the suit was . . eee eer ow ie... PRONE SG re: ee epucte Hs es AEN HE Hl Eanes WAP AMP ROM Kem. ale . —— 78 brought to collect that overcharge without first going to the Interstate Commerce Commission. The Supreme Court of the United States looked at the matter and said: this is just a question of construction of a tariff, it is a question of law. A decision of the United [fol. 85] States Supreme Court will establish uniformity on this question of law. We can construe this tariff as well as anybody else can. Accordingly they held that that over- charge did not present an administrative question which must first go to the Interstate Commerce Commission but that the matter might be presented in the courts. That case held that the primary jurisdiction doctrine did not require resort to the administrative agency before bringing suit in court, when there was no intricate question of fact, there was no question of upsetting a general regula- tory scheme. It was a simple question of construction of a tariff. If the tariff was construed one way, it was an over- charge; if it was construed the other way, there was not an overcharge. Now, that has been compared with Cunard. Going back some considerable time, water carriers, at least water carriers in foreign commerce, having organized conferences with approved conference rates, the agreement to fix rates was approved, and then they issued their rates. Under some of those approved agreements, these confer- ences set up the so-called dual rate structure. That was this kind of a scheme. They would set up the regular tariff rates and anybody who offered shipments to them, who ordered their service, could have it, paying those rates. But if the shipper would agree to ship only in conference bottoms, then he got a lower rate. This question of the validity of [fol. 86] this dual rates has been going on in the Commis- sion and before the courts and even before the Congress, and finally was upset by the Isbrandtsen case, and they had to go to Congress for legislation to change that situation, and eventually did get legislation. They got a moratorium statute for awhile and then some more permanent legisla- tion. FR OE CEILI REED nin? — ‘aa US Bete ea lS PIA. ee 79 The United States Navigation brought an action under the antitrust statutes. It was not a conference member and it claimed that this agreement for this dual-rate structure was illegal under the Antitrust Laws, and so it brought an action under the Antitrust Laws only for an injunction, not for mere damages for past conduct, but an injunction which would be prospective in its operation. Now, there were two things that were peculiar about that. The Court: Pardon me. What case are we talking about? Mr. Dunne: Cunard. United States Navigation Company against Cunard Steamship Company. The question was when there is an attack on dual-rate structure and when the question is whether or not it is valid or whether or not it falls within the original approval of a conference agree- ment, you have got a question of such nature that you ought to go to the Federal Maritime Commission first and not sue first. Now, remembering that the relief that was sought there was by way of injunction only, Judge Hand in the Court of (fol. 87] Appeals in the Second Circuit Court pointed out this peculiar thing that would happen. He said, suppose the Court went ahead and gave relief here and issued an injune- tion and then the dual-rate structure is submitted to the Federal Commission and be approved. It might be ap- proved even while the case is pending out of court. In view of the fact that the only remedy sought was prospective in operation by way of an injunction. Mr. Justice Sutherland who did not adopt that line of reasoning, or at least did not mention it in his opinion, but his general line of reasoning was this: this is a complicated industry. It is not within the general province of Courts to know about the details of an industry like the shipping in- dustry and how a whole rate structure is constructed, and it is something upon which there should ‘e uniformity and regularity. Now, I do not want counsel on the other side to get up and tell me that I haven’t accurately quoted the case because I do not pretend to quote the case. I am stating to Your 80 Honor my reading of the case and my interpretation of the case. So Mr. Justice Sutherland, looking at the distinctions made in the Great Northern itself, said this kind of a case is a case for an administrative remedy first. Let me carry that on just very briefly, and if necessary we can now dis- [fol. 88] cuss the details of that. That was a suit by the United States Navigation Company, private suitor. Some time later in the Far East Conference case the United States itself made an attack on the dual-rate structure. Mr. Justice Frankfurter wrote the opinion in Far East Confer- ence, and he said—the relief there being asked, of course, was prospective in operation only. He said, why, this is just like Cunard. This is asking for relief in the future, injunc- tive relief on this dual-rate structure; what difference whether the United States is the plaintiff or whether it is a private suitor; it is the same type of question. He said this is a primary question for the administrative agency. Then comes up something that is extremely interesting in Far East Conference. He then said shall we dismiss or shall we retain this case until we see what the agency does. Your Honor must remember that the agency here had the power to issue a cease and desist order which in effect is an injunction. So he said in this case we are going to dismiss because the Commission can give the United States all the relief to which it is entitled. Then he added a very signifi- cant sentence, which in effect is this, but if it does not, then the Government can bring a similar suit. There is only one way to read Mr. Justice Frankfurter’s opinion in that case, and that is: we will dismiss, we won’t pertain. [fol. 89] No.1, because the Government can get all the r. . lief to which it is entitled and which it seeks before the Com- mission, but if it does not, then, there will be time enough for it to complain, and in that event it can bring a similar suit, which was a suit for injunctive relief under the Anti- trust Laws. Let me call Your Honor’s attention to one other thing. I do not think there is any mistake about what we had to say about this in our brief but there has been an attempt to cast = a few stones at it. If Your Honor will read Mr. Justice Frankfurter’s dissent in the Isbrandtsen case, if you will look at that dissent, it is an extremely important dissent be- cause it is his reading of what the majority was doing so far as Cunard and their decision in Isbrandtsen. This is a pretty long answer to a rather simple question which Your Honor put as to what do we think that Cunard holds. We think Cunard with its explanation in effect in Far East Conference where Mr. J ustice Frankfurter points out that two remedies that the Court can have, either by re- ’ taining and waiting to see what the Commission is going to do, or either by dismissal, because if they do not get all the relief they want they can still bring an action. Then, if you will read the majority opinion in the Is- brandtsen and the way it is highlighted by Mr. Justice Frankfurter’s dissent, Your Honor will then see why it is we say that Cunard is not controlling here, but the case that is [fol. 90] controlling here is the case that Cunard relied on, ¥ which is Great Northern. Your Honor, we are caught in a curious bind. One brief on the other side accuses us of being entirely too pedantic and introducing into this matter a heap of confusion. One of the other briefs on the other side said we are oversim- plifying it. I do not know quite where we stand. The Court: Plead guilty to both. Allright. Fine. We can hear from you later on this. Mr. Dunne: Yes. As I understood Your Honor, you wanted me to present our central line of argument, what we have, and then these modifications, details, and peripheral decisions can be dealt with later. The Court: That is right. Mr. Ransom, you have now heard Mr. Dunne’s comments. Who wants to be heard on that? 81 ARGUMENT By Mr. Turk ON BEHALF oF Co-DEFENDENT, Far East CONFERENCE Mr. Turk: Your Honor, that depends somewhat on whether you are ready to hear us present our arguments in 82 the order in which we had planned to make them or whether you wish— The Court: I would like to hear without reference to your agenda, just to stand up here and tell me what is wrong with Mr. Dunne’s picture. Mr. Turk: Quite a few things in our view of it, Your Honor. {fol.91] In the first place, the Great Northern case was strictly a question of primary jurisdiction under the Inter- state Commerce Act. There was no question there of the relationship between the Antitrust Laws and the Interstate Commerce Act. What has not been fully emphasized here is the manner in which the Supreme Court dealt with, first, the question of the relationship between the Antitrust Laws and the Shipping Act in both United States against Cunard and the Far East case, and then proceeded to decide where the proceedings should be tried. Now, you will observe in reading United States Naviga- tion against Cunard— The Court: Let’s call these by familiar names. Cunard, Far East, Great Northern. If you mention the defendants, sometimes I think you are talking about another case. Mr. Turk: All right. In Cunard the Court at the outset stated the nature of the charges and then it made a review of the provisions of the Shipping Act and it found that the provisions of the Ship- ping Act fully covered every detail of the conduct charged to be unlawful by the antitrust complaint, finding full reme- dial and substantive procedure in the Shipping Act. The Court did not say this is a technical matter and we will get rid of it. It said the Shipping Act pro tonto supersedes the [fol. 92] Antitrust Laws. Then it had the question of what do we do with a Shipping Act case charging an unfiled agreement among common ear- riers by water. It examined Section 15 of the Shipping Act which makes it unlawful to carry out an unfiled agreement among com- mon carriers by water and said, well, there is no remedy un- ; ) der Section 16 of the Clayton Act because that is as we have said before, it has been superseded, and even though this agreement that is charged in U.S, N avigation, its complaint looks pretty bad and looks horrible to a judge, it is entirely possible that on a full consideration of all the economic fac- tors involved the then Shipping Board might approve it and we will not attempt to decide that in court, but following the primary jurisdiction doctrine, the question was referred to the Shipping Board. At least the plaintiff was remitted to seek his remedy there. The same question arose in Far East. Again, you had an antitrust complaint by the United States. Right at the out- set Mr. Justice Frankfurter, who did write the majority opinion in this case, said we had a problem here of consider- ing the relationship between the Antitrust Laws and the Shipping Act. U.S. Navigation against Cunard answers our H problem and the Court proceeded on the theory that the (fol. 93] Antitrust Laws, again, have been superseded inso- far as the agreements of common carriers by water are con- cerned. Disagreeing with the District J udge in that case, Judge Frankfurter stated that the Attorney General had a right to bring a complaint before the Federal Maritime Board as it then was charging the very conduct which he was charging in his Antitrust complaint. I think it must be clarified here what the gist of the griev- ance here is. Now, it may seem presumptuous of the defen- dants to tell the plaintiff what his gripe is, but still I think that we must analyze that in order to appreciate the applica- tion of supersession first, and then primary jurisdiction. There has been a lot of talk here about the power of the Fed- eral Maritime Commission over its rates and agreements. The two are quite different. Carriers in foreign commerce are authorized to initiate rates individually or pursuant to approved agreements and there is no requirement of approval of the individual rates, and until quite recently there was no provision for suspen- sion and a determination as to reasonableness. But it is 83 St equally true that interstate carriers do not have to get ad- vance approval of their rates. They file their rates. After they have been on file after a stated period they become law- ful rates unless the Commission on its own motion, Inter- state Commerce Commission, or some other carrier or ship- {fol. 94] per brings a suspension~proceeding and attacks the rates. So there is not quite all this great difference be- tween ocean foreign commerce rates and domestic rail rates as it first may have appeared. Secondly, and most important, Section 15 of the Shipping Act specifically requires the filing with the Commission of any agreement for the fixing of rates or the limiting or de- stroying of competition, pooling, allocation of traffic, et cetera. That is not limited to domestic commerce. It ap- plies, or it at least had applied originally, with equal vigor to domestic or foreign commerce. In 1940 the Water Carriers Act transferred jurisdiction over strictly interstate rates to the Interstate Commerce Commission and at the same time repealed the Shipping Act insofar as it applied to carriers who were going to be regu- lated thereafter by the Interstate Commerce Commission. So far as having a domestic regulatory act here, the Shipping Act has the exclusive application to foreign com- merce. I think the air should be cleared on this subject. These agreements that are charged here are agreements of car- riers of foreign commerce. Section 15 applies with full force to agreements of carriers in foreign commerce. Now, Section 15, after prescribing the filing of these [{fol. 95] agreements, tells the Commission that if it makes findings that these agreements are unjustly discriminatory among carriers, shippers or ports, or discriminate against American exporters as compared with their foreign com- petitors, something that Carnation refers to in its com- plaint, or are detrimental to the commerce of the United States or violate any other section of the Shipping Act, the Commission shall disapprove such agreement, otherwise it shall approve the agreement. ee a 85 A further paragraph of Section 15 states that it is unlaw- ful to carry out an agreement before or after approval. The further paragraph of Section 15 states that anybody who violates any provision of this section shall be liable to a civil penalty. It used to be a flat $1,000 a day. Since 1961 it is up to a thousand dollars for each day that the violation continues. The reason I am bothering you with the details of what Section 15 describes as to the agreements which must be filed, what it says the Commission is entitled to do, the standards that are applied under the statute by the Com- mission and what the penalty is, is to give Your Honor a full appreciation of the fact that an agreement among common carriers by water in foreign commerce, free onppetition, is subject to the fullest kind of regulatory scheme ander Sec- tion 15. (fol. 96] The Court: What I am interested in right now is something just specifically to Mr. Dunne’s statement which was generally to the effect that the Cunard and the Far East cases involved application for injunctive relief only, pro- spective relief, and that that some way or another distin- guishes those cases from Great Northern which was an attempt to collect overcharges in the courts without going to the Commission and on which it was held that the issue involved only the question of law and that it was not an ad- ministrative question. But before hearing from you on that, let’s give this re- porter a little recess. (Recess taken.) Mr. Turk: Your Honor, I will bring myself directly to the question you put before me before the recess ; namely, where do we stand on this question of injunction versus treble damages. I think there are two answers to that. One is the easy one. In the cases under the Shipping Act or involving carriers subject to the Shipping Act regulations where com- plaints have been brought under the Sherman Act seeking treble damages, they have been dismissed. Now, the leading case on that, of course, is the American Union Transport. saennenineiiienaes —_ 86 The Court: You are referring to some other case now? Mr. Turk: No. I think you have that listed. {fcl.97} The Court: Is that the New York case? That is the Antitrust Act. Mr. Turk: Yes. The Court: As I understand it, that case was ordered dis- missed on the authority of Far East and Cunard. Mr. Turk: Exactly. The Court: I am trying to find out, though, from you what you think is wrong with Mr. Dunne’s attempt to dis- tinguish these three cases by reference to other cases re- ferred to in some of these decisions. Mr. Turk: You mean, for example, his reference to the re- cent cases of California against Federal Power Commis- sion? The Court: No, I do not. Mr. Turk: I do not— The Court: Well, you heard his statement in answer to your version of what these cases hold. Mr. Turk: You mean his reference to the Isbrandtsen decision? The Court: Isbrandtsen, Great Northern ... In other words, why do you think that Mr. Dunne has attempted to tell me to distinguish these three case? Mr. Turk: That isa very long story. The Court: Make it a short one. Mr. Turk: Let’s start out with the Isbrandtsen decision of 1958. Mr. Dunne says in his brief and in his argument [fol. 98] that that explains away U.S. Navigation and Far East Conference as authorities requiring the application of the supersession and primary jurisdiction doctrines. [ think this involves misapprehension as to what went on between the majority and the dissent in the Isbrandtsen case. In the first place, | think we must emphasize that Is- brandtsen was not an antitrust case and it was not even a primary jurisdiction case, It arose under the Review Act of 1950 to review an order of the Maritime Commission granting Section 15 approval to one of these dual-rate con- __ tract systems. The case first came up.in the District of Co- lumbia Cireuit and that Court held that these dual-rate systems are rendered illegal, per se, by Section 14 of the Shipping Act. One of the questions presented to the Supreme Court was that was the Court below correct in holding that these are illegal proceedings. Now, arguing there for the conference there involved, it Was asserted that these earlier cases of Cunard and Far East Conference could not have been decided the way they were if the Court, the Supreme Court, had entertained the notion that these dual-rate systems were illegal per se. Someone on the Great Northern argued that if it were sim- ple question of law the Court would not have had to defer to the administrative agency for its expertise; the Court would have said, well, maybe the Antitrust Laws do not apply but under Section 14 of the Shipping Act these sys- (fol. 99] tems are so clearly illegal that we will grant an in- junction under the Shipping Act. Well, we were repulsed in that argument. The majority in the Isbrandtsen said: no, that this is not a correct in- terpretation of those earlier decisions; the primary jurisdic- tion doctrine applies to give the Court the benefit of a preliminary consideration by the expert ageney which can compile a full factual record and develop all of the economic situations involved; then when the agency is done we still have the right to say whether their result was correct under the law. It should be noted that the majority in the Isbrandtsen did not hold contract rate systems to be unlawful per se. They said that they are unlawful if they have certain at- tributes, if they are predatory, stifle competition, et cetera. Mr. Justice Frankfurter in his dissent in Isbrandtsen al. most quarreled with the good faith of the majority. He re- viewed the history of these dual-rate Systems and said they are always used to meet competition and to protect the carryings of conferenees as against non-conference lines so that in effect the majority of today ruled them illegal per se a iiaeresienceaceeniinsiaonas 87 . nna 88 even though they do not come out and say it. He says that in so doing I think that they go contrary to the necessary (fol. 100] implication of Far East and U.S. Navigation against Cunard. This has nothing to do at all with the issue of supersession and the issue of primary jurisdiction in U.S. Navigation and Far East with which we are concerned with here. Fx Our position is that dsbrandtsen has nothing to do with the present case. r The Court: What about Great Northern? Mr. Turk: Great Northern, again, as | believe I said be- fore—if I did I think it bears repetition—was not an anti- trust case. It was a case brought to recover a charge claimed to have been excessive under the tariff. Now, in that connection I think it must be remembered that Section 9 of the Interstate Commerce Act gives persons who claim that they had been injured by a carrier subject to that act the right to proceed either before the Interstate Commerce Commission or before a Court so that there has had to evolve some philosophy of what type of question is more appropriate for administrative consideration and what type of question is appropriate for judicial decision. The Court said all that is involved here is a reading and interpretation of a tariff provision. The Courts read con- tracts, wills, and statutes every day of the week; that is the kind of thing we can do; and as long as there is no technical question of the nature of the commodity and its use with which we are not familiar, we can decide the case as well as [fol. 101] the Commission. The Court: Right. Suppose that the plaintiff here was bringing the suit in this court to collect a claim for excessive charges. Would he then be in the same position as Great Northern? Mr. Turk: You mean under the Shipping Act? If he was bringing a suit— The Court: Right here in this court. Mr. Turk: Overcharge by water carrier? The Court: Yes. P w Mr. Turk: I don’t think he would for this reason, that the Shipping Act does not contain any provision giving the option to sue either by a complaint for reparations to the Commission or— The Court: Isn’t that what was held in Great N orthern? Mr. Turk: That was the Interstate Commerce Act. The Court: That is right. Mr. Turk: That involved a railroad regulated under LC.C. I think that this would be an appropriate time to say that in considering a case under any other regulatory statute you have got to be careful to compare the regulatory scheme and the provisions as far as power to award reparations, the savings of remedies under other statutes, the savings of the (fol. 102] right to proceed in court before you can conclude that that case is authority for similar result under the Shipping Act. The Court: At any rate, in Great Northern, it was held you coula bring a suit in the court to collect what was claimed overcharges beyond the tariff. Mr. Turk: I would not agree that is an overcharge case. As I understand it, Your Honor, under the Interstate Com- merce Act an overcharge has technically become the ter- minology for a case where for used shoves the railroad has a rate of $2.00 a hundred pounds and it charged this shipper 2.10 a hundred pounds. The difference between the tariff rate and what he was charged was an overcharge. The Court: That is what I understand to be an over- charge. Mr. Turk. Yes. But I think the Great Northern involved the question of whether Commodity Q which good shippers ship properly should have been charged the rate for this kind of old shoes or whether it was actually used clothing. It was a question of which was the correct tariff provision to apply rather than strictly a charge of a rate higher than : the rate clearly applicable. | The Court: Your position is, then, that as far as claimed overcharges by a water carrier under the Shipping Act pro- a SO A ee Seas aE ‘ nee 90 visions is concerned that the aggrieved party could not come [fol. 103] into court here and collect that overcharge. Mr. Turk: That is correct. The Court: Because the situation is different from I.C.C. Mr. Turk: There is no choice provided under the Ship- ping Act to proceed either before the Commission or the Court. The only provision is in Section 22 of the Shipping Act which gives the Commission the right to award repara- tions for violation of the Act. Now, I do not concede at all that this is an overcharge case. The Court: Well, the next question I was going to ask is this: This is a suit for treble damages by reason of alleged antitrust conspiracy. I suppose it is based upon the fact that charges were made which were arrived at by unap- proved agreements. Mr. Turk: That is the gravamen of it. The Court: That may be the gist of it but it is not specifi- cally an overcharge case. Mr. Turk: No, it couldn’t be an overcharge case. The Court: I do not even know whether the damages would be the same, the elements would be quite the same. I am not sure. Mr. Turk: I think Mr. Dunne would agree that he does not claim that Carnation was charged anything in excess of [fol. 104] what the Pacific Westbound tariff showed. Mr. Dunne: I claim Carnation is charged exactly $2.50 a ton more than the only lawful tariff. Mr. Turk: You haven’t answered my question. I guess I can’t get an agreement on it. Mr. Dunne: You cannot get an agreement from me that any kind of conduct which purports to fix a tariff which is expressly declared to be illegal can fix a tariff. It is illegal conduct made expressly illegal by the Antitrust statutes as well as the Shipping Act. Mr. Turk: I think what has been said makes it clear that the claim is for concerted action, whatever elevation of the rate may have resulted from concerted action. TEE ESR ERE EAE REE IOS, RS ELE IA IMIR IE TEST FEM wn » ‘ re | ; It is our position, of course, that Section 15 is the sub- stantive law and that Section 22 of the Shipping Act pro- vides the remedy. Now, just because Section 22 does not provide for treble damages and lawyers’ fees is, we submit, no basis for holding that the plaintiff is entitled to proceed under the Antitrust Laws. After all, if supersession means what it says, the theory is that Congress removed this seg- ment of our industrial structure, these public servants, from antitrust and subjected them to an entirely different regulatory philosophy, and if it did provide a remedy of reparations for the injury suffered that was deliberate and it was deliberately different from the standard of damages [fol. 105] prescribed for commercial enterprises generally. I think that to the extent there is talk of a difference be- tween the prospective operation of an injunction and the retrospective operation of damages the interference with obedience to a coherent regulatory policy is equal. It is trae that the injunction focuses our attention on the fact that the Court under antitrust may enjoin conduct which the Com- mission under Section 15 might well approve. But we of the industry are subject to equal pulling and hauling if we take the combined action which is conceivably approvable under Section 15 but for thai action may be subjected to treble-damage suits under the Antitrust Laws we are again being compelled te serve two inconsistent miasiers if this type of suit is allowed to succeed. I think that the representative of the Government may have more to say on that aspect of it, the degree to which the allowance of treble-damage suits under the Antitrust Laws would interfere with the Commission’s activity. Speaking for the industry, I think we would be equally saddled with two inconsistent philosophies of regulation if we are subject to reguiation and, indeed, punishment by treble-damage suits under the Antitrust Laws and at the same time have to obey the dictates of the Shipping Act. The Court: This is all on the assumption that these de- [fol. 106] fendants did not obey the provisions of the Ship- ping Act. 92 Mr. Turk: Yes. We are assuming, as I believe we must on a motion to dismiss, that what the Complaint says is so, but what we have done here has been done without approval. The Court: isn’t that precisely what was done in Cunard? Mr. Turk: It certainly was. The Court: .And Far East, and more specifically in the New York case. Mr. Turk: Certainly. There is no question about it, that the same claim was made there, that because these agree- ments were not submitted and approved they are at large. In the New York ease the opinion | think is noteworthy because Judge Edelstein said that he is a little tempted by Mr. Justice Douglas’ philosophy in his dissent in Far East but he said he felt he was precluded from following it be- cause, after all, the majority said the other way around. Mr. Ransom: | would like to comment briefly on the Great Northern situation of that case and what I understand Mr. Dunne is citing it for. It is my understanding that what he is saying that the Great Northern case says that the doe- trine of primary jurisdiction or supersession does not apply if all you have is a simple issue of law which the Court car decide and you do not need to concern yourself with the expertise of the Commission and there is no problem, no [fol. 107] issue involved that has anything to do with this expertise. Now, this, then, addresses itself to, really, what would the issues be in the event of a trial of the case; with what is- sues would the Court be concerned; would there be any is- sues which the Commission itself should first have a erack at and which you should take advantage of the faet that they are experts in the field; and that there should be a uniformity of regulation. The Court: Are you saying that in this case this Court would have to necessurily determine whether or not these agreements referred to by Mr. Dunne were actually beyond the scope of any approval? 93 ARGUMENT BY Mr. Ransom on BEHALF OF DEFENDANT, WestBouND CONFERENCE, ET AL. Mr. Ransom: Yes. Not for the purpose of determining the motion to dismiss but for the purpose of trial. It is that to which I would like to address myself briefly, if I may. This is where Mr. Dunne says his ease is simple; he has a simple overcharge case. This is where we say the case is most complex when it comes to the Complaint itself. The Court: In other words, you deny that these agrev- ments which he is complaining of were in fact unapproved or beyond the seope of any Commission's approval. Is that right? Mr. Ransom: Yes, Your Honor. What our position would be, which is the position actually already taken by the par- ties in a proceeding now before the Federal Maritime Com- [fol. LOS] mission, which Government counsel will no doubt speak of—what our position would be on the trial of this case is that the agreement which was approved— First, the Westbound Conference has an agreement to approve rates and, then, the Far East Conferenee, represented by Mr. Turk, they have a rate-making section 15 agreement. Then these two groups decided that they were naturally competi- tive to one another. The cargo coming from the East Coast to the Philippines was in competition with cargo from the West Coast to the Philippines and they developed almost a rate war between the groups. In order, then, to stabilize that situation they formed the two groups of carriers and entered into another agreement, a third agreement, this joint agreement, which is not un- usual in the steamship industry. That agreement was Agreement S200 and was appreved. That agreement by its very terms calls for subsequent meetings of the parties to make provision for the machinery for rate making. Now, the position which the parties would take in the suit is that all they did, all of the activities which the Complaint alleges, were extracurricular, or outside of the agreement, were in fact actually approved by the agree- ment, or if not within the language, were implementations ERE rath RS 2 ca 94 of the agreement or were actions which do not need ap- proval separately. That is an issue, if Your Honor please, that has plagued the Federal Maritime Commission and its predecessors [fol. 109] since 1916. That is an issue which, just thumbing through the decisions this morning—I found eight cases in the Federal Maritime Commission and Federal Maritime Board decisions since 1955 on the question: when is it when parties have approved agreement that they are acting out- side the agreement and when are they not. The Commission is attempting to determine uniform policy. This is the very type of issue for which the docirine of pr#fmary jurisdiction was invented. The Court: In other words, this joint agreement was approved. Mr. Ransom: The joint agreement was approved. The Court: Counsel apparently contends that the par- ties did something that was beyond the terms of it. Mr. Ransom: Precisely. The Court: It would seem, offhand, that if the Commis- sion approved an agreement and the question came up as to whether or not actions of the parties were arguably with- in or without that agreement that the Commission should be the one to determine what it approved or did not approve. We will hear from Mr. Dunne on that. Mr. Ransom: Exactly, Your Honor, and in just almost those words was Judge Pope’s decision on March 6, just this March 6, 1968, on a case which did not involve the mat- ter of primary jurisdiction. It is the Transpacific Freight [fol. 110] Conference of Japan against Federal Maritime Commission. The Court: Transpacific Freight Conference of Japan against— Mr. Ransom: Against Federal Maritime Commission. The Court: Is that in the brief? Mr. Ransom: Yes, it is, Your Honor. It is an unpub- lished decision and it is in the reply brief. The Court: To what point? Mr. Ransom: To the point— 95 The Court: Don’t read the case. Tell me what the point of it is, Mr. Ransom: The point I wish to make from this case is that involved in that case was a question of the construe- tion of an agreement between carriers, an agreement which had been approved, and the Commission had determined what it thought, how far it thought that agreement would go, whether the action was within or without. The Court in that case said that the Board itself or the Commission itself is the one that approved it and the Com- mission is the one, therefore, that ought to be able to have the opportunity to decide what it says. And it says that if the Commission does not have this discretion and power, it simply does not have the power to carry out the policies of the Act. I state that case because it is exactly what Your Honor (fol. 111] has said, and that is our position, that this is not simple; this case involves many complicated issues. Just one other issue that it does involve. The agreement says that the parties shall file their action taken at these subsequent meetings. They filed the actions, they filed a record of their actions at the meetings. The Court: Pursuant to the original agreement. Mr. Ransom: Pursuant to the original agreement. Now, query: Did they file correct statements? This is an issue of fact. Did they file what in fact took place at the meetings ? Having filed it, what they did file, and the Com- mission having accepted it, did the Commission by that approve that action or not approve it? What is the effect of the Commission’s action? That is another issue which has been a matter of con. tention before this Commission for a great number of years, These matters are simply matters which the Commission is going to have to make and is trying to make uniform policy. The Court: All right. Let’s see. Mr. Ransom: We have not heard from the Government yet. The Court: Well, we have to hear from the Government. ; — ARGUMENT BY Mr. Hoop on BEHALF OF FeperaL Maritime CoMMIsSsION Mr. Hood: Your Honor, I think what Mr. Ransom, Mr. Turk and Mr. Dunne have all said really must have pretty well disposed of by this time that there is a reliance or (fol. 112] claim here of the statutes administered by the Commission. It is under 24B that we have moved for leave to intervene. The limit of our intervention is this motion to dismiss that we filed simultaneously with our petition for leave to intervene. Also, Mr. Ransom and Mr. Turk have pretty well covered the field on the exclusive remedies of the Shipping Act. Therefore, my remarks must be brief. First, I should like to point out, again, Your Honor, that Section 15 contains provision for penalites against persons who violate it. Those penalties are $1,000 a day; that Sec- tion 22 of the Shipping Act furnishes a procedure whereby a party injured by any violation of the Act can come to the Commission, file the Complaint, and following trial re- ceive damages if such is approved. Therefore, the Shipping Act unlike many regulatory statutes, does provide full relief both for the Government by way of injunction, as has been shown in Cunard and Far East, both by the way of monetary penalties collectible by the Government, as in the case of antitrust statutes, and, lastly, in the sense of damages collectible by persons who are injured by any violation of the statutes. Perhaps I should point out, Your Honor, that as a repre- sentative of the Commission I am not here suggesting at all that the two defendants should be turned loose. It is our belief that they should be brought before the Commis- [fol. 113] sion. The Commission has currently pending an investigation into the very behavior on a much broader scale than is alleged in the Complaint in this case. As was mentioned a moment ago by Mr. Ransom, there exists currently a joint agreement between the two confer- ences. That agreement looks toward the establishment of rates and rules and regulations relating to rates for move- _— 97 ment of cargo from both the East Coast and the Pacific Coast to the Far East. There is contained in that agree- ment a clause that permits either of the conferences on a stated notice to take independent action if they feel their best interest demands that. ; The proceeding that is currently before the Commission, Style Docket 872, was instituted to determine whether this agreement was a full and complete agreement between these conferences; are they carrying out something in addi- tion to what they have received Commission approval for. An additional issue in that proceeding is whether the Commission should continue its approval of that agreement. The Court: Should what? Mr. Hood: Continue its approval of that agreement. If at any time the Commission finds an agreement that has already been approved by it which is detrimental to the commerce or being carried out in a fashion that does not comport with the statutes the Commission may cancel the agreement or it may modify the agreement. So that also [fol. 114] becomes a part of Docket 872 before the Commis- sion. That leaves us in this position: The Commission must ultimately decide what the limit of the behavior is permitted by Agreement 8200. That case is currently pending the Examiner’s decision. Following the Examiner’s decision, the parties to that case, which includes Carnation, will be given an opportunity to file exceptions, and then the Com- mission must ultimately issue its decision. The Court: When they decide, who reviews that? Mr. Hood: That is reviewable by the United States Court of Appeals under the reviewable act of 1950. So, again, we are not here asserting that the Commission is only capable of construing the Act but what we are say- ing is that in order that the Commission be given first op- portunity to do that that the trial of the matter under the Shipping Act should be before the Commission. Whatever the Commission does is going to be reviewable in court. If the instant litigation is permitted to proceed here, we run the risk of the Court and the Commission running head- 98 or. It may happen and it may not. I don’t know. None of us can know. The Commission may construe the agree- ment in one fashion and the Court or a jury may take a different attitude. Therefore, if it is placed before the Com- mission, we will have what we believe to be a desirable uniformity. Mr. Ransom mentioned the recent Ninth Circuit case {fol. 115] wherein the Court clearly indicated that the Com- mission is the proper form for the initial determination of what is permitted by an approved agreement. In addition to that, I would cite to the Court a case that is also cited in our brief. That is Swift Company versus Federal Maritime Commission. In that instance the Com- mission overturned the construction placed upon the agree- ment by arbitrators. That was a Fifth Circuit Court case, and there the Court emphasized that the Commission has the duty to construe the agreement. 1 believe, Your Honor, I have nothing further. The Court: All right. Do you want to close the matter up, Mr. Dunne? CLosinc ARGUMENT BY Mr. DuNNE on BEHALF OF PLAINTIFF Mr. Dunne: I do not know if I have everything quite in order here, but let me start with what was just said . The suggestion was made here that if the Commission ean proceed here, then there would be a desired uniformity. If the question is one of law, there will be uniformity when the Supreme Court of the United States determines that question of law. When this matter of uniformity has been suggested and the matter has been one of law, the Supreme Court has said if uniformity is desired, we can provide it. Those cases are cited in our brief, starting at page 24 and following. The Court: What about this point in this case? It is (fol. 116] denied by the defendants that their actions were beyond the scope of an approval. As I understand it, they state that a so-called a third or joint agreement was ap- ies Sp 8S ANGLE OLLIE SE REO OIE IS. BABES. REEL RAR LL ph? UN REI sat a i a . proved by the Commission and it had some provisions in it which contemplated meetings between the parties and the filing of the reports thereof and that the parties met and did file reports thereof. Doesn’t that present the type of question which the Commission would have to determine whether or not these meetings and what happened at these meetings would be within the purview of what they had approved, and, also, whether or not the Commission should continue this third joint agreement in effect or not? Now, should I decide those questions? Mr. Dunne: I will come to that, Your Honor. That is the reason I emphasized in our brief, quoted Mr. Justice Harlan’s opinion in United States against Western Pacific, that each case must be taken on its own basis. The reason I want the facts of this case squarely before Your Honor, the precise facts—and I do not say this un- kindly and I do not say it in the sense of criticism—because this discussion this afternoon has developed somewhat in- formally—but I do not think Your Honor has been fairly informed as to what was approved and what was not ap- proved, and I would like to call that very specifically to Your Honor’s attention. [fol.117] The Court: I know. But is there an arguable point about it? Mr. Dunne: No. Couldn't possibly be an arguable point, couldn’t possibly be. But if I may, I should like to pick up one or two of these other things. It was last suggested by counsel for the Commission that the Commission could review this first and could go over the facts and that if the Court acted they might come head-on. That is just exactly the reason I cited in our brief the very recent case of California against the Federal Power Commission. The Federal Power Commis. sion had a matter before it which involved the same issue that is before the Court. The question was who should go ahead first. Mr. Justice Douglas said the policy of the antitrust statutes has been entrusted to the Courts and the Courts are going to see that the policy of the antitrust statutes is vindicated; the Court 100 should not defer to the Commission but should decide the antitrust question. . Some of these recent cases have taken a lot of color out of the language of the earlier cases. Now, going back a little, this Transpacific case that was recer.tly decided by the Ninth Circvit has nothing to do with this here. It has an entirely different question of con- struction. It was a matter which was before the Commis- [fol. 118] sion. It does not have this question of primary jurisdiction or sole remedy in it at all . That is not involved. Well, the other thing I called Your Honor’s attention to is that counsel slipped from two things, from one to the other. They slip from arguing the primary jurisdiction doctrine and then they slip into sole remedy. There was a case on which— The Judge went so far to say that sole remedy was so far under the Shipping Act that the Govern- ment couldn’t even prosecute criminally. That has been knocked in the head by the recent decision in January in the Panagra case. So what I am suggesting to Your Honor is that a lot of water has run over the dam since Cunard was decided and these are some things— The Court: Which is the case that held the Government could not prosecute? : Mr. Dunne: Pan American World Airways against— I do not know whether it is against the CAB or not. Mr. Ransom: It is cited in all the briefs, Your Honor. The Court: All right. Mr. Dunne: Just decided in January. Pan American World Airways against United States. I don’t have the official citation. The Court: That is all right. If it is in the briefs I will find it. That held that the Government could prosecute for— (fol. 119] Mr. Dunne: It actually applies to the primary jurisdiction doctrine, and held that the Government could not proceed civilly. But’the Court went way out of its way to point out that this was not in any way to restrict or to be taken as restricting the Department of Justice in pro- ceeding criminally or in proceeding civilly in those areas — 101 outside of what would be covered before the Commission. I do not undertake to quote, but the language is quoted in our brief. Now, some remarks—before I get back to the question which I-know is bothering Your Honor—it was said that Great Northern was not an antitrust case and the implica- tion is, therefore, it has no bearing here. Well, if it does not have any bearing, why did Mr. Justice Sutherland in Cunard rest his decision on the language of Great Northern? The Supreme Court did not think Great Northern was so far away from the point involved in Cunard that it should not be cited; not only cited, but relied on it. But there is more than that. There is a case that involved railroads in the antitrust statutes which is cited in our brief, and that is Georgia against the Pennsylvania Rail- road, where it was held that where the conspiracy involved was beyond what the Interstate Commerce Commission could do the Courts could act, and the State of Georgia was permitted to maintain an action. Do not be misled by what is said in the briefs, quoting another case, because that case (fol. 120] would not be decided the same way today. It would not be in certain circumstances because since Georgia against Pennsylvania the Interstate Commerce Act—See- tion 5B I think it is, but I am not sure of it—has been amended to provide that combinations of rail carriers shall not violate the antitrust statutes if approved, which brings me to another point that was argued before you. J thought Mr. Turk was talking about that the industry was in a pathetic position if it was being tugged one way by the Commission and going to be tugged another way under the antitrust statutes. Congress thought of that. Congress provided a very simple way so they would not be tugged in two directions. When they have an agreement, file it with the Commission ind have it approved and the antitrust statutes have noth- ing to do with it. The Court: Can’t the Commission approve sort of an open agreement? Mr. Dunne: Sure it could. _ ne : — 102 The Court: Calling for further action and reports. Mr. Dunne: Yes, they could. What has not been called to Your Honor’s attention, we have pled this and we are not pleading in the dark because we had documentation when we drew this Complaint, docu- mentation which, indeed, was developed in a proceeding which is now pending before the Commission. There was {fol.121] this Agreement 8200—we have pleaded this in substance in our Complaint—entered into by the members of both the Pacific Westbound Conference and the Far Kast Conference. We had a copy of that agreement and we knew it had been submitted to the Commission, had been ap- proved. This Complaint was drawn in the light of that approved agreement. That Agreement 8200 provided in Section 1 which, possibly, standing alone, might be subject to some question of interpretation although I think the question of construction which is a routine matter and a traditional matter of Courts, the Court can construe it as well as anybody else, that for a meeting of the members or the signatories of this Agreement 8200, it said: “The initial meeting shall make ‘rules, not incon- sistent with the provisions of this agreement, for the conduct of all meetings to be held hereunder, and for the transaction of such other business as the parties may be permitted to conduct by virtue hereof, includ- ing the provision of the machinery for the change of any rates, rules or regulations adopted at the initial meeting or at any subsequent meeting.” Notice that, the machinery. Not for making the change it- self, but for the machinery of making the change of any rates, rules and regulations adopted at the initial meeting [fol. 122] or at any subsequent meeting. What they did, they went down and had their first meet- ing in Santa Barbara, the January following the approval of this meeting. Then they proceeded to enter into agree- ments and there were certain memoranda of those agree- ments which were known as Memoranda of Decisions. — 103 Now, the substance of this matter, again, is pleaded. The agreements between these carriers were that they should set up a list of initiative items. Those items on the initiative list were items upon which either Conference, Pacific West- bound Conference or the Far East Conference, could act independently of the other in fixing rates, but that item as to rates not on the initiative list neither Conference should act without the concurrence of the other. Now, let’s test that. This is the thing that they tell Your Honor is necessary to go to a Commission and a body of experts and the Courts really don’t know enough to decide. Testing that agreement, that was made at these meetings with the provision of Paragraph 2 of Agreement 8200. I have read you the first part of it, from Paragraph, 1, about the machinery for changing rates. This is Para- graph 2: “Anything contained herein or in the rules and regu- lations adopted at the initial meeting as from time to [fol. 123] time amended to the contrary notwithstand- ing, if either group of Lines should determine that con- ditions affecting its operations require an immediate change in its tariffs, it may notify the other group - thereof, specifying the changes which it proposes to put into effect 48 hours after the giving of such notice if given by telegram or 72 hours after the giving of such notice if given by air mail, and a summary of the facts which justify the changes on said short no- tice.” So here was an express provision expressly reserved to each of these two Conferences; the right of independent action to fix its own rates without the concurrence of the other Conference, Now, that is just exactly contrary, just exactly opposite to what was agreed when they sat down and met. When they sat down and met they agreed that they would not independently change any rates if they were not on the initiative list. i itieissieneenneneneemee « i 104 Now, what do we allege in this Complaint, and we will prove it by their own minutes and by their own telegrams. They first raised the rates. We do not even have to go to the original tariffs to find out what was done. There is no {fol. 124} questien of construction. They first raised the rates some time before January 1, 1957 for Pacific West- bound Conference carriers—tlis was by joint action, by concurrence—effective May 1, 1957 by $2.50 a ton. Now, there is no question of construction of a tariff. They just simply increased by $2.50. It does not take any expertise for a Court to look at the two tariffs and to see that the one, the newer one, is $2.50 a ton more than the first one. Now, that is all the question of fact that is there. It is as simple as that. But that is not all. In November plaintiff Carnation ap- plied to the Pacifie Westbound Conference to reduce the tariff by two and a half a ton to the old rate, the rate which Pacific Westbound alone had lawfully fixed in 1951 and before this Agreement 8200 was entered into. Under approval of Agreement 57, Pacific Westbound Conference had the right and duty to fix the tariff for its member, and that became a lawful tariff. It had done so and fixed the tariff on evaporated milk in 1951. Then, the next step is the Agreement 8200 which was approved, but approved by the Commission with the reser- vation in Paragraph 2 of this right of indepeadent action to either one of these two Conferences. So taere was never any approval of any agreement which @eprived either of these Conferences of the right of independent action. Never. [fol.125] It does not claim to be; if there had been they could come in here and we would be out of court in two min- utes. Then the rate is increased by this side agreement by two and a half a ton. In November 1957, Carnation asked them to go back to the old rate, the 1951 rate, which was fixed by Pacific West- beund Conference by itself. Pacific Westbound Conference determined that that should be done, that the rate should be reduced by two and a half a ton. It then applied to ORI CNS eR ASS APE RRR RII Nha SCORER Nae ot Bas Re Te ——— —, 105 Far East Conference to concur, operating under the side agreement. When Far East Conference would not concur because of the side agreement for concurrence, a Pacific Westbound Conference withdrew its request and the rate was not re- duced. Stating it definitely, under Paragraph 2 of Agreement 3200, approved by the Commission, Pacific Westbound Con- ference had the right on a maximum of 78 hours notice to reduce that rate by two and a half a ton, just exactly as it had determined to do. It did not exercise that right. It did not exercise it because of the side agreement, never filed with the Commission for approval and never approved by the Commission. Now, that is how simple this case is, And when you talk about construction of contracts and policy in the industry, and all the rest, with all due defer- ence, Your Honor, to counsel on the other side, that is plain nonsense. The facts are just as simple as I have told to Your Honor. There isn’t an administrative question in [fol. 126] this case.. This is a simple question of charging two and a half a ton more than the only rate that was ever lawfully fixed, which was the 1951 rate fixed by the Pacific Westbound Conference. That is why I say this is an over- charge case, because the increase of two and a half a ton was by reason of the side and unapproved agreement. The refusal to reduce it on the request of Carnation and Pacific Westbound Conference, Pacific Westbound Confer- ence requested concurrence of Far East Conference and it was refused, it was because of an illegal side agreement. One of the things that Georgia against Pennsylvania Rail- road Company held was that an agreement giving someone a veto power over the change of rates is an illegal agree- ment in violation of the antitrust statutes. That is exactly what happened in this case, and it is just as simple as that. That is the reason we say there is no administrative question here. May I say just one other thing. There has been a good deal of talk about primary jurisdiction and then sliding - vito el 106 off to other matters, The only case that T know of—there is certainly no United States Supreme Court case on this decided before the Isbrandtsen is the American Association case that was referred to Your Honor. That was a case decided by the District Court, Southern District of New York. The Court: Is this the 1954 case that they referred a [fol. 127] matter of law, is illegal per se, it is playfulness- that is the word he used—it is playfulness to apply the Far East Doctrine and the Cunard doctrine and make par- ties go to a Commission on a question that the Court itself is going to decide as a matter of law. We suggest to Your Honor that when you have time to read the Complaint more carefully you will find that the only question, possible question of faet—and Tam sure there is an Answer filed, there never will be a denial—is whether our statement in the Complaint here that the side agreement requiring concurrence was not approved, There cannot be the slightest doubt about the side agreement, Counsel have gone outside of the Complaint and pre sented to Your Honor other matter. If there had been ap- proval by the Commission of that side agreement it would be staring us in the face now. There is no such approval. The only other question, then, is a pure question of law when Paragraph 2 of Agreement 8200 reserved to each of the two Conferences the right of independent action on 48 hours telegraph notice or 78 hours air mail notice that they were going to change rates, and that was not lived up to and was not adhered to because there was a side agreement that neither Conference would change its rates without the concurrence of the other, You have got the simplest kind of an antitrust issue, The Courts have been traditionally | fol. 128] bandling this before there was any such thing as a Shipping Act or Commission, This is the importance of the MeLean Trucking ease, which is cited in our brief, along with Mr. Chief Justice Warren's opinion in U.S. against RCA, plus the fact that Commissions are not competent, are not competent, are not given the power to determine ne ROR te ee REN BRT ae ale a il POWRIEMON RATA — 107 antitrust issues as such. There is no case that | know of to the contrary. They can exempt from the antitrust statutes under See- tion 15 of the Shipping Act if you proceed the way Con- gress said you are going to proceed. But there is nothing to permit the Commission to entertain antitrust issues as such. IT suggest that has been argued to you here today from beginning to end. Congress has said you can exempt, ex- cept, from the antitrust statutes by going to the Commis- sion and getting appreval of your agreement. Counsel on the other side are arguing to Your Honor exactly the same result follows even if you do not go to a Commission and get approval. CoLLogvy Mr. Ransom: You have been very patient, but could | take just one more second. The Court: Yes, we ean close this up. 1 will examine these briefs and issues in the case a little bit more closely and if I can rule on it, all right, and if 1 cannot I will ask for the parties to answer the question, Mr. Ransom: I merely want to comment that I think Mr. Dunne has done a very good job of proving the point that [fol. 129] L had in mind in his long recital about how simple itis. I think it was quite difficult to follow and IT think it shows it is quite complex, Secondly, the latest expression of the Supreme Court on the whole subject is the Panagra ease decided on January 14, 1963. That case, which applied the doctrine of primary jurisdiction to dismiss and sent back to the CAB a matter Which had already gotten to the Supreme Court and which the CAB, in the first place, did not want, that reafirmed as good, solid law the Cunard and the Far East by saying dismissal of antitrust suits where administrative remedy has suspended a judicial one is the usual course; see Uaited States Navigation against Cunard SS Co., Far East Con- ference against United States. We, Your Honor, still stand ‘ on Far Kast, Cunard, and AUT. eo i 108 Mr. Hood: The Georgia versus Pennsylvania case re- ferred to by Mr. Dunne, did say that as to railroads there was some scope of antitrust principle. What he fails to mention is that the State of Georgia brought a Complaint seeking two remedies; one, treble damages under the Anti- trust Laws and, two, an injunction. On the authority of the Teal case, the Supreme Court held that it was not entitled to maintain the treble-damage suit, but because the rail- roads, not protected by any I.C.C. approval at large under the Sherman Act, they allowed the injunction proceeding to stand. [fol. 130] The Court: All right, gentlemen. Thank you very much, I shall look into it a little further and if I can rule on it I will. If I can’t, I will ask for help. Reporter’s Certificate to foregoing transcript (omitted in printing). [fol. 131] [File endorsement omitted] In tHE Unitep States District Court For tHe NortHers District oF CALIFORNIA SouTHERN Drvision No. 41153 CarnaTION Company, a corporation, Plaintiff, vs. Paciric WestBouND CONFERENCE, an unincorporated as- sociation, Far East CoNFERENCE, an unincorporated as- sociation, et al., Defendants. Orper GRANTING Motion oF FepERAL MariITtIME CoMMISSION to InteRveNE—April 30, 1963 The Court, having reviewed the record and the briefs, desires further argument. — . Mainly, the Court wishes to direct counsel’s attention to the question, not heretofore raised or argued, whether the Shipping Act, 46 U.S.C. See. 821 (the remedy-reparation section) can be read as providing a remedy to plaintiff herein, bearing in mind that the only violation of the Shipping Act charged herein is the carrying out of an agree- ment prior to its approval by the Commission, and bearing in mind, further, that Section 821 provides reparation only for such injury, if any, as is caused by a violation of the Act. Can the particular violation here charged be con- sidered the cause of any loss to plaintiff? Did plaintiff pay any more as a result of this violation than it would have paid if the violation had not occurred, i.e., if the rate change [fol. 132] agreement had been approved before being car- ried out? Was not the legal cause of any recoverable loss the violation of the Anti-Trust Act rather than the violation of the Shipping Act? Counsel will arrange a hearing time with the Clerk. If not possible, the Court will fix a time. The motion of the Federal Maritime Commission to in- tervene as a defendant under F.R.C.P. 24(b) is granted. So Ordered. Dated: April 30, 1963. - W. T. Sweigert, United States District Judge. 110 [ fol. 133] [File endorsement omitted] In tae Unirep Srares Disvaicr Courr For ture Norruern District or Cauirornia Soutuern Division Before: Hon. William T. Sweigert, Judge. Civil No, 41,153 Carnation Company, a corporation, Plaintiff, Vs. Paciric Wrstrounp Conrerencer, et al, Defendants. Transcript of Further Hearing on Motion to Dismiss —June 11, 1963 | fol. 134] APPEARANCES : For the Plaintiff; Messrs. Dunne, Bledsoe, Smith, Phelph, Catheart & Johnson, 315 Montgomery Street, San Francisco, California, By: Arthur B, Dunne, Esquire, and James R. Baird, Jr, Esquire. For the Defendant Westbound Conference and defendant carriers in that Conference: Messrs. Lillick, Geary, Wheat, Adams & Charles, SUL California Street, San Francisco, California, By: Edward D. Ransom, Esquire, and William H. King, Esquire. For the Defendant Far East Conference: Elkan Turk, Jr., Esquire, 120 Broadway, New York 5, N.Y. 111 For the Defendant-Intervenor Federal Maritime Com- mission: Robert B. Hood, Jr., Esquire, Federal Maritime Com- mission, Washington, D. C. [fol. 135] Tuesday, June 11, 1963 2:00 o'clock p.m, The Clerk: Civil Action 41,153, Carnation Company versus Pacitic Westbound Conference for f urther hearing on motion to dismiss. STATEMENT BY THE Courr The Court: Counsel, in this matter, as you recall, I sent out a memoranda, and subsequent to that memoranda, [ have received further memoranda here from plaintiff and from, | think, all of the defendants, ineluding the intervenor, Federal Maritime Commission. Now, | have gone over those memoranda received subse- quent to my notice in order to get the general purport of them. I have examined them carefully. I did examine all of the original briefs, and I did examine most of the important cases relied on by the various parties, and I proceeded to try and put the matter together to my own satisfaction, and it was then that I came to more or less of a standstill concerning an examination of the so-called Reparations Section of the Act. L read that section carefully in the light of the three named Supreme Court cases, and then, because the particu- lar matter that was bothering me had not been discussed at any length by counsel, | thought the best thing to do Was to advise you of my problems so that you could have a hand in it. I didn’t want to proceed on that basis without hearing from you. (fol. 186] However, I don’t expect you to reargue the Whole ease at this time by any means. I have gone over it pretty thoroughly. However, | do want to have your reae- 112 tion as briefly as you can give it to me in connection with the point that I asked for help upon. Now, the Complaint here alleges that this agreement concerning change of tariff was not within the terms of the previously approved joint agreement 8200. Under this Complaint, as far as the Shipping Act is concerned, no al- leged unjust or unfair method of practice discriminatory against others, as provided by Sections 815 and 816 is al- leged, nor does it appear from the Complaint that there was any violation of the Shipping Act inherent in the agree- ment itself. Under the Act, the defendants, as conference members, have the right to make such an agreement. The Act simply provides that it would be unlawful for the defendants to carry out that agreement prior to the approval by the Commission. Further, under the Act, Section 814, the Commission was required to approve such an agreement and prevent undue discrimination or unfairness to others. As far as the Shipping Act is concerned, the only un- lawful act alleged against the defendants herein is the carrying out of the rate change agreement prior to its filing with and approval by the Federal Maritime Commis- sion, as required by Section 814. For such a violation of [fol. 137] Section 814, the Act itself provides a specific penalty against the carrier of $1,000 for each day such violation continues, the penalty to be recovered by the United States in a civil action. The question now arises whether Section 821, provid- ing that any person may file with the Commission a com- plaint setting forth any violation of the Shipping Act and ask reparation for the injury, if any, caused thereby was available to plaintiff herein. It will be noted that Cunard, noting the allegations there charging “a discriminatory dual-rate system constituted a direct and basic violation of the Shipping Act,” and the Court went on to hold that a “remedy was afforded by the Shipping Act, Section 821, which,” said the Court, “to that RE ee a a ee Re PERLE ONOUI. BRS omnayeeneie nine ence } 113 extent supersedes the Antitrust Laws,” and further that, “Mere failure to file the agreement there in question would not be ground for antitrust action, which depends upon the right to seek a remedy under Antitrust Law,” a right, which we have seen, does not here exist, since the only alleged vio- lation of the Shipping Act in the case at bar is the failure of the defendants to file and gain approval of the rate change agreement prior to carrying it out, and since Section 821 provides reparation only for such injury, if any, as is “eaused by the particular violation,” the further question arises whether the plaintiff herein could show that such par- ticular violation was the cause of any loss of damage, to-wit, (fol. 138] not merely that it might have caused damage to him, but did not, but that by its very nature it couldn’t have caused damage to him. Certainly, the failure of the defendants to file or gain ap- proval of the rate change agreement before carrying it out was not of itself a cause of loss to the plaintiff. The agree- ment between the Conference members concerning tariffs, as I read the cases, was not illegal itself under the Shipping Act, and as far as absence of Commission approval is con- cerned, plaintiff would have paid for shipping evaporated milk under the increased rate if approved by the Commis- sion, exactly the same amount it claims to have paid under alleged unapproved rate change agreement. It would seem that any recoverable expense or loss to the plaintiff here was caused not by the particular violation of Section 814 of the Shipping Act, but by a violation of the antitrust action, making any combination to fix or maintain prices er rates illegal, and giving in such case the right of action for damages. Such an agreement between the Conference members, not having been filed with or approved by the Commission would not, and this is purely tentative for the purpose of provoking discussion, would apparently not be exempted from the antitrust action under Section 815 of the Shipping Act. Cunard, as we read the case, did not hold that all agree- (fol. 139] ments between Conference members, whether filed 114 or approved or not were excepted from the provisions of the Antitrust Acts. It simply held that the Antitrust Acts were superseded to the extent that the Shipping Act pro- vided a remedy for violations of the Act, or charges so re- lated, with such violations to be, in effect, a component part of them. Well, that’s enough to indicate the particular question that T wanted to ask you to discuss, and-you can proceed in > your own way. My mind is completely open on this case. I E intend to keep it so until I hear the matter. We can hear either from the plaintiff, it seems to me, as to his reaction to whether he thinks that it has any merit or hasn’t any merit. Then I’d like to hear from the Federal Maritime Commission intervenor to see what they think of it. The statement that I made before, namely, that I don’t expect you to reargue this case. In fact, I would suggest that you not do it. I will read carefully anything that you filed with me subsequent to the Notice sent out, but I’m rather intrigued with this point, and I’d like to see what the reaction is. STATEMENT BY Mr. DuNNE ON BEHALF OF PLAINTIFF Mr. Dunne: Let me say this first, Your Honor: I know of no direct authority that answers the question which Your Honor put, but in looking over the cases which have been cited in the memoranda on the other side—I won’t say this (fol. 140] of all of the cases—but in the cases, particularly in the memorandum on behalf of the Pacific Westbound Conference, in two of them in particular to which Mr. Ren- som ealled attention, the Swift case and the Kemper case, Mr. Ransom in his memorandum at page 11, line 21 very frankly concedes that those cases are not strictly in point, and very frankly concedes there something upon which Your Honor put his finger, and that was that in that case, not only was the agreement between the Conference mem- bers not approved, but in the action which was taken, there was an independent violation of the Shipping Act itself. _——— 115 That is the character of the conduct, apart from the fact that there was a non-approved agreement, which constituted violations of the statute. Now, I think you will find that the Smith—Muir-Smith case, which is also referred to, if you will look at it— The Court: M-u-i-r? Mr. Dunne: M-u-i-r hyphen Smith; which is cited in their “memorandum, is-a~substantially different case, because ~~ there again there was a violation of an independent provi- sion of the Shipping Act. Now, in reading that case, Your Honor must bear in mind that that was an interstate shipment. Interstate shipments were involved and not foreign. And the provisions of the Shipping Act are somewhat different as to interstate busi- ness and as to foreign business. {fol. 141] And there the violation was in charging a rate which was higher than the public rate. Again, a case of an independent violation. Now, considerable time was spent in the memoranda on the American Union Transport case, and I think that case— The Court: That’s the New York case? Mr. Dunne: That’s the New York case. Against River Plate. And again in the memorandum for Pacific Westbound Conference the matter is spelled out. The memoranda has given the full story of what happened in that ease. Now, the opinion of the District Court in that case in- dicated that there was something more involved in that case that a mere agreement among the carriers not to pay bro- kerage which was unapproved; and it indicated that there might then be involved in that case some application or in- terpretation of regulations of the Commission—whether it was the Commission or one of its predecessors, I refer to it as the Commission—aside from the agreement not to pay brokerage. ) The matter was fully developed, and the plaintiff in that case then proceeded before the Commission. But then it was fully developed in the hearings that the profession of brokers, insofar as it affected foreign commerce in the cir- 116 cumstances of that case, was a business which was regu- lated, and under the regulations which applied to this regu- [fol. 142] lated business of brokerage, it was ultimately determined as a matter of application of those regulations, that the broker in no event was entitled to any brokerage. What the cases— And of course, if he was entitled in no event to anything, ~~ then it wouldn’t have made any violation of the Antitrust ~~ Statute. Any different violation of the Shipping Act would be a matter of no consequence. In somewhat reverse, I think that has some application to the questions that Your Honor put. Now, let me go back a little. Your Honor, I have some notes here, but I want to be very careful to follow Your Honor’s suggestion and not argue other aspects of the case, but address myself solely to the matter which Your Honor has called to our attention. Notice this, and I don’t say that this is conclusive of what Your Honor’s determination should be, but the Commission itself takes a very peculiar position here. The facts that we are now discussing, the basis upon which this case is now being discussed before Your Honor on a motion to dismiss, are undisputed facts. There is no question of fact as to what did or did not happen. The Commission says, “Oh, well, we want to try this,” but the Commission will not avow whether or not those undisputed facts constitute matters upon which, if they had been before the Commission, we would be en- titled to reparations. [fol. 143] The Far East Conference, it seems to me, is tak- ing exactly the same position. They are saying, “If you get before the Commission, we are going to deny certain of these averments.” The Court: Well, this is a motion to dismiss your Com- plaint. Mr. Dunne: Exactly. The Court: It will have to be determined on the undis- puted facts. Mr. Dunne: On the undisputed facts, exactly, Your Honor. 117 And yet, we can’t get an avow out of the Far East Con- ference that on these undisputed facts, we would have a remedy before the Commission. So far as the Pacific Westbound Conference memorandum is concerned, they at some point indicated that perhaps we would have a remedy, but in the latter part of the mem- orandum they leave themselves an escape hatch on that, and ~~~again will not commit themselves. But I think that that memorandum makes a very interest- ing attempt to characterize our case. It is suggested in that memorandum that we’re really not complaining because this agreement is not approved, but we’re really complaining that the rate that was charged was unreasonable. Now, it seems to me— [fol. 144] The Court: I didn’t understand that to be the complaint, that the rate was unreasonable. Mr. Dunne: Nor do I, Your Honor. The Court: I think that the complaint is just a complaint that there was a combination to fix prices, and that it was not exempt from the Antitrust Laws. Mr. Dunne: That’s right, and that’s all we claim. The Court: If there were an issue here as to whether or not the rate fixed was reasonable or not, I suppose then remedy would be initially commissioned. Mr. Dunne: Might very well be. And I would suppose as to interstate commerce, although I haven’t gone into this and wouldn’t want to commit myself, but as to interstate watergoing traffic, that might very well be the situation. But what this does, though, suggests to us a hint of what the position would be if this matter were before the Com- mission. The position there would be that whatever the test may be under the Antitrust Statutes as to the fact of dam- age, and whatever the test under the Antitrust Statutes may be as to the extent of damage, under the Shipping Acts something more must be shown. It is not enough to show that there was an unfiled or filed and unapproved agree- ment, but it may very well be argued, and it might very well be the position that would be taken, that so far as the Shipping Act is concerned, something else must be shown 118 because as Your Honor pointed out, it well may be that [fol. 145] approved or unapproved, whether the parties had made this agreement or hadn’t made this agreement, the rate would have been exactly the same; or as Mr. Ransom has pointed out, we would be out just as much money absent this unapproved agreement. Now, we’ve got to get ourselves in a position where there is something illegal, so that we’re not only out the money, in fact, have lost that amount of money, but it has become a recoverable loss. Now, our position the:e is perfectly simple. It would be recoverable loss under the provisions of the Antitrust Statute, because the making of this agreement under the Antitrust Statutes is the violation. The conspiracy— The Court: And the statute gives the right to recover damages. Mr. Dunne: And treble damages, too. The Court: Well, treble damages, also. Mr. Dunne: Now, in our memorandum, we pointed that out, but this is a separate matter, this question of whether or not there is an adequate remedy, if there is any remedy under the Shipping Act. The Court: I’m not asking whether there’s an adequate remedy, I’m asking whether within the meaning of that sec- tion, the so-called remedy or Reparations Section, there is (fol. 146] any remedy at all on the facts which you allege in your Complaint. Mr. Dunne: Put it this way: If it can be said that we have been hurt by what the other side has characterized as— The Court: You may have been hurt, but was your hurt caused by the violation of the Shipping Act? That’s what I’m getting at. Mr. Dunne: A purely technical violation of the Shipping Act. Is that the thing that gave us a recoverable position under the Shipping Act? Now, counsel on the other side said this, and this may bear upon what Your Honor has in mind, they have said, with which [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386411_0217%3A01. Public record. Not legal advice.