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04/12/62 Trans-Pacific Freight v. Federal Maritime Board

April 12, 1962




Before WILBUR K. MILLER, Chief Judge, and WASHINGTON and BASTIAN, Circuit Judges.



Marine Lines, Inc., and Global Bulk Transport

Corporation, Intervenors.

April 12, 1962.


WASHINGTON, Circuit Judge.

This case raises questions as to the authority of the Federal Maritime Board *fn1 to issue restraining orders against a regulated group, pending final determination of complaints made against it.

The order now before us on appeal directs petitioners, the Trans-Pacific Freight Conference of Japan and its members, to refrain from assessing fines against intervenors, States Marine Lines, Inc., and its affiliate, Global Bulk Transport Corporation, or taking any action to collect such fines, pending the final disposition of proceedings which intervenors instituted against the Conference before the Board.

The Conference is a group of steamship companies operating from Japan, Korea and Okinawa to Hawaii and the Pacific Coast ports of North America. Petitioners act in concert in the conduct of their business by authority of an agreement filed with and approved by the Federal Maritime Board pursuant to Section 15 of the Shipping Act of 1916, 46 U.S.C.A. § 814. So long as approved by the Board, such agreements are exempted from the antitrust laws. Petitioner's Section 15 agreement permits them to combine to fix tariff rates and trade practices, and sets out a code of business practices. It also contains a schedule of monetary penalties, payable to the Conference, for violating various provisions. As a means of enforcement, an amendment to the agreement provides for employment of a "neutral body," empowered to investigate the complaint of any member line and to impose a fine upon discovery of an infraction of the agreement. One of the offenses for which a fine may be imposed is the refusal of a Conference member to make its business records available to the neutral body on demand.

Intervenors are members of the Conference. On January 13, 1959, the accounting firm of Lowe, Bingham & Thomsons, which was acting as the "neutral body" under the Conference agreement, sought to examine the books of States Marine in Tokyo. Lowe-Bingham claimed that it was acting upon the complaint of a member line that intervenors had engaged in "malpractices" in connection with the 1958 movement of mandarin oranges from Japan. Although the Tokyo office of States Marine acquiesced in the request for examination, intervenors refused to give access to their New York records to Lowe-Bingham's designee in New York, the firm of Price, Waterhouse & Co. *fn2 For this refusal, Lowe-Bingham subsequently levied a fine against intervenors in the amount of $10,000, the maximum assessment authorized for a first offense under the Conference agreement. Approximately six months later, on February 22, 1961, Lowe-Bingham claimed that it had received a second complaint relative to alleged misbehavior of intervenors during the 1960 movement of mandarin oranges from Japan, and again demanded access to States Marine's business records. States Marine again refused and Lowe-Bingham assessed a fine in the amount of $15,000, the maximum for a second offense. After imposition of each of the fines, States Marine gave notice of withdrawal from the Conference, and filed a formal complaint with the Maritime Board. Both complaints prayed, inter alia, that the Conference be enjoined from using Lowe-Bingham as a neutral body, and requested interim relief. The complaints were consolidated, and hearings were held. During the pendency of the hearings, the Board entered an order directing that petitioners show cause why they should not be ordered to cease and desist pendente lite from taking action to collect the second fine and from using Lowe-Bingham as a neutral body, or why "such other order as may be deemed appropriate" should not issue. As provided for in the order, affidavits and memoranda of law were submitted and oral argument was heard. Thereafter, the Board issued the cease and desist order here under review. After stating that intervenors (complainants before the Board) were threatened by Lowe-Bingham and the Conference with irreparable injury, the order in part provides:

"It is Ordered, that from the date of this order and until the Board issues a final order in this proceeding, respondents shall cease and desist: (1) from assessing or collecting any fines against complainants; and (2) taking any action to collect fines heretofore assessed against the complainants . . .."

Respondents and intervenors contend that the Board's order is not final and consequently not reviewable under the Administrative Orders Review Act of 1950 (the Hobbs Act), 5 U.S.C.A. § 1031 et seq. But, as we said in the Isbrandtsen case -

"Whether or not the statutory requirements of finality are satisfied in any given case depends not upon the label affixed to its action by the administrative agency but rather upon a realistic appraisal of the consequences of such action. 'The ultimate test of reviewability is not to be found in an overrefined technique, but in the need of the review to protect from the irreparable injury threatened in the exceptional case by administrative rulings which attach legal consequences to action taken in advance of other hearings and adjudications that may follow, the results of which the regulations purport to control.' Thus, administrative orders are ordinarily reviewable when 'they impose an obligation, deny a ...

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