circumstances was unlawful and was irreparably harmful in at least some degree. In addition, should any shipping company be able to divert cargo, all should be able to so do. To emphasize the significance of this argument, the Court was reminded of the eight defendants who stipulated to discontinue all of the challenged practices until the Federal Maritime Commission could rule on their legality. The plaintiffs countered the defendant's contention of laches that defendant had been utilizing the practice for many years by contending that plaintiffs did not have any knowledge of it; and had they received such knowledge, they would have brought suit at an earlier date.
At the conclusion of the hearing, all parties agreed to the continuance of the temporary restraining order until the decision of this Court is filed on the motion for a preliminary injunction.
The first issue facing this Court is whether it has jurisdiction to enter a preliminary injunction in aid of the administrative process of Federal Maritime Commission, until the Commission has decided the substantive issues in the complaint before it. While jurisdiction was originally contested by the defendant, such contest appears to have been abandoned at the hearing on August 10th. Even if it were not, it is clear from decided cases that a district court does have jurisdiction to grant a preliminary injunction for this purpose. Federal Maritime Commission v. Atlantic & Gulf/Panama Canal Zone, 241 F. Supp. 766, 774 (S.D.N.Y. 1965) (application denied); Pennsylvania Motor Transport Assn. v. Port of Philadelphia M.T. Assn., 183 F. Supp. 910, 915-917 (E.D. Pa. 1960), appeal dismissed, 276 F.2d 931 (3rd Cir. 1960).
The remaining and most sensitive issue to be decided is whether upon a balancing of the equities the plaintiffs will suffer such irreparable harm if the injunction is not issued that it should outweigh the possible harm to defendant. This Court is not permitted to adjudicate the ultimate issues in this case. It is for the Federal Maritime Commission as the competent administrative board to determine if the conduct alleged here is in fact illegal. Far East Conference v. United States, 342 U.S. 570, 573-574, 72 S. Ct. 492, 96 L. Ed. 576 (1952). Other courts dealing with the same problem in determining whether to issue a preliminary injunction have first determined if the status quo was being changed by the allegedly illegal conduct and if so, whether in the balance of equities, considering the harm which could occur to either party, the petitioner would be seriously and irreparably harmed if the conduct continued. Federal Maritime Commission v. Atlantic & Gulf/Panama Canal Zone, supra, 241 F. Supp. at 777; Pennsylvania Motor Transport Assn. v. Port of Philadelphia M.T. Assn., supra, 183 F. Supp. at 917.
The practice of American President Lines, Ltd., to import cargo bound for the Philadelphia area, through some other port and absorb the inland freight charge should be treated as altering the status quo that should be maintained pending the final administrative determination. While this practice may have continued over a period of years, plaintiffs had no knowledge of these practices until recently. Although defense contends that notice of these practices was evident from certain tariffs it filed, the Federal Maritime Commission points out that such does not legalize such rates or practices nor in any way amount to approval by the Commission. Chicago, M. St. P. & P.R. Co. v. Alouette Peat Products, 253 F.2d 449, 455-456 (9th Cir. 1957); American Export Isbrandtsen Lines v. Federal Maritime Commission, 409 F.2d 1258, 1260, fn. 4 (2d Cir. 1969). Plaintiffs are, therefore, not barred by any doctrine of laches.
Even though the alleged illegal practice continued for a period of years, there is substantial law that a preliminary injunction may nevertheless be entered in aid of administrative proceedings to re-establish and thereafter maintain the status quo as it existed prior to the alleged illegal practices. Angle v. Sacks, 382 F.2d 655 (10th Cir. 1967); Westchester Lodge 2186 v. Railway Express Agency, Inc., 329 F.2d 748 (2d Cir. 1964); Greene v. Mr. Wicke Ltd. Co., 270 F. Supp. 1012 (D.C. Conn. 1967). Otherwise, in any case of alleged illegal activities, a preliminary injunction restoring the situation prior to such activities could never be granted, because, by its very nature, such injunctive relief alters the conditions then existing and restores the status quo ante.
The development in recent years of containerized shipping makes the results of any diversionary shipping practices more significant. Containers aboard large container ships greatly facilitate transfer of cargo from port of entry to place of destination overland by motor freight. Thus, the potential harm to the port whose cargo has been diverted is immeasurably increased. Although most, if not all of the cargo destined for the Philadelphia area that defendant, American President Lines, Ltd., has imported through ports other than Philadelphia has been carried in general cargo ships as opposed to containerized cargo ships, a portion of such cargo has been put ashore in containers for convenient transshipment overland by motor freight.
The entry and active participation by the Federal Maritime Commission is significant. The Commission lacks authority to issue as part of the administrative process a preliminary "cease and desist order." Trans-Pacific Freight Conference of Japan v. Federal Maritime Board, 112 U.S. App. D.C. 290, 302 F.2d 875 (D.C.C.A. 1962).
Injunctive relief has frequently been granted by the Courts as an adjunct to the administrative process. West India Fruit & Steamship Co. v. Seatrain Lines, 170 F.2d 775 (2d Cir. 1948), cert. denied, 336 U.S. 908, 69 S. Ct. 514, 93 L. Ed. 1072. Especially where, as here, the commission intervenes and actively seeks injunctive relief. Id. 170 F.2d at 778.
In attempting to balance the equities, it appears clear that the plaintiffs as well as the general public in the Philadelphia Port Area (including Camden and other areas of New Jersey), will suffer extensive irreparable harm if the conduct alleged by plaintiffs, and as shown to exist by the testimony, continues for any extensive period of time. The Federal Maritime Commission proceedings require a "full hearing" and investigation. 46 U.S.C. § 822. The estimated minimum time required for its final decision was stated without controversy to be one year. American President Lines, Ltd., presently diverts only a small quantity of cargo which, in and of itself, would not create any severe harm to the Port of Philadelphia on the basis of past history. Unless prohibited, however, defendant, as well as other shippers who are not bound by the stipulation would be free to engage in the diversionary practices both as to imports and exports to an unlimited extent. Substantial or mass diversion even for a very short period of time would have a disastrous and irreparably harmful effect on the Port of Philadelphia.
The injury resulting to the defendant by granting a preliminary injunction would in comparison be minimal. The defendant claims that only a very small amount of cargo is being shipped by the challenged practice and its direct loss of cargo and thus profits although not insignificant would be small. The defendant contends that although it handles this cargo primarily as a customer service, it will permanently lose customers (mostly to foreign shipping companies), if it is prohibited from accepting cargo for Philadelphia and unloading cargo in other ports and absorbing the inland transportation charges. This seems doubtful since shipping rates would not be altered, nor would defendant be placed in any competitive disadvantage. Some customers might prefer to ship with lines that actually dock ships in Philadelphia, but this is so irrespective of whether defendant diverts the cargo to other ports and pays the inland freight to Philadelphia. Enjoining defendant will give no other line any economic advantage. On the contrary, if, as contended by plaintiffs and counsel for the Federal Maritime Commission, defendant is engaging in illegal discriminatory practices, the injunction will merely place defendant on an economic par with the other lines. Importation through ports other than Philadelphia will not be prohibited by a preliminary injunction but merely the absorption of the inland freight charges by defendant where such cargo is diverted.
Defense witnesses also testified that a substantial portion of the "diverted cargo" consisted of shipments at government's expense of personal belongings of military and government personnel. It seems unlikely that if defendant is enjoined from continuing to absorb the inland freight to the Philadelphia area by order of this Court, that the government would discontinue this and other shipping with the defendant. More likely, the government would continue to utilize defendant, and pay the inland freight itself, which, of course, would be economically beneficial to defendant, although still not beneficial to the Port of Philadelphia. Almost the precise issue was raised in the recent case of Delaware River Port Authority, et al. v. Sea-Land Service, Inc., C.A. 71-1372 (E.D. Pa. 1971). A stipulation for entry of an agreement similar to the agreements entered into in this case as to eight of the defendants was approved by the parties including the Secretary of Defense.
To the extent that this opinion sets forth additional findings of fact and/or conclusions of law, the same shall be deemed as part of the findings of fact and conclusions of law.
The preliminary injunction will be granted, pending final determination of whether a permanent injunction should be granted until a final determination of the complaint before the Federal Maritime Commission is made. Since plaintiffs are either public corporations or otherwise financially responsible parties, and since the loss, if any, to defendant if this injunction is improperly granted is monetary loss of profits on the small amount of freight testified to by defendant, the amount of the bond will be fixed in the modest sum of $5,000.00.
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