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NEW YORK & PORTO RICO S.S. CO. v. UNITED STATES

April 15, 1940

NEW YORK & PORTO RICO S.S. CO. et al.
v.
UNITED STATES et al.



The opinion of the court was delivered by: BYERS

BYERS, District Judge.

Motion to dismiss petition and complaint for declaratory judgment (filed in this court on December 19, 1939) for the asserted reason that the court is without jurisdiction of the subject-matter of the action, as appears from the plaintiffs' pleading. The latter alleges:

That The New York and Porto Rico Steamship Company is a corporation of this state and a common carrier between the port of New York and ports in Puerto Rico and elsewhere, and until early in September, 1939, it operated a common carrier service from New Orleans to Puerto Rico; that the other plaintiff, Waterman Steamship Corporation, is an Alabama corporation, and also a common carrier between ports in the Gulf of Mexico and ports in Puerto Rico and elsewhere, with its principal office in Mobile, Ala.

 That the United States Maritime Commission is a governmental body or agency of its co-defendant, the United States of America, "established by law for the purpose of performing certain duties entrusted to it by virtue of the Shipping Act, 1916 [46 U.S.C.A. § 801 et seq.], and the several Merchant Marine Acts".

 That this suit arises under the laws of the United States and involves and actual controversy between the several parties "concerning a right and power claimed by the defendants but denied by the plaintiffs under Section 15 of the Shipping Act, 1916 [46 U.S.C.A. § 814], in respect of an agreement dated September 1, 1939, entered into between the two plaintiffs for the sale and purchase of the good will of the common carrier freight service which had been operated from New Orleans to Puerto Rico by plaintiff The New York and Porto Rico Steamship Company, which service it had decided to terminate." A copy of that agreement was furnished to the Maritime Commission and is annexed to the petition.

 That on November 21, 1939, the Maritime Commission made an order (Exhibit B, Docket 556) allegedly under Section 15 of the Shipping Act of 1916, which order purported to embrace the agreement "within the provisions of said Shipping Act as requiring approval by said Commission under said Section 15 * * *, and purporting to exercise jurisdiction in respect of the same * * *".

 That a hearing was set pursuant to the said order, for December 20, 1939, although the plaintiffs without avail had objected thereto on jurisdictional grounds.

 That the agreement in question does not provide for common carrier cooperative activities, as appears from the terms thereof, but pertains only to a sale of good will at an agreed price, and that it does not fall within Section 15 of the Shipping Act, 1916, in either terms or intent; that "no matter of administrative action or of discretion or of quasi-judicial determination is conferred on said Commission by law" respecting the said agreement or the rights of the parties to enter into it.

 That the Maritime Commission is proceeding to exercise an alleged jurisdiction in respect of said agreement, in violation of the plaintiffs' rights under the Constitution and laws of the United States, in that the Commission may "seek to impose conditions, restrictions or adjudications on the plaintiffs" without warrant of law.

 That in the attempted exercise of jurisdiction the Commission has entered the order referred to, in which it is recited that the said agreement "is one restricting freedom of competition between carriers and, therefore, subject to the jurisdiction of the Commission under Section 15, and the failure of parties to submit the same for approval has resulted in a violation of the Shipping Act, 1916, as amended".

 That in another proceeding, entitled Docket 553, the Commission has entered an order (Exhibit C) purporting "to suspend tariff publication of the fact" of the suspension of the New York and Porto Rico Steamship Company's service from the Gulf to Puerto Rico, "which fact said plaintiff was bound to publish in order to comply with the Intercoastal Shipping Act, 1933 [46 U.S.C.A. §§ 843-848]". That such order purports to be dealing with regulations and practices affecting rates and charges -- contrary to the fact.

 That the first-named plaintiff has requested the Commission to rescind the order, but the request was not granted, and a hearing in respect thereof had also been noticed for December 20, 1939.

 For the purpose of the motion to dismiss, the allegations in the petition must be taken to be true, and the only question for decision is whether the petition presents a state of facts under which a declaratory judgment would be appropriate.

 The argument for the defendants involves these two propositions:

 First: That there is no actual controversy and therefore no occasion for the plaintiffs to seek a declaratory judgment.

 Second: That, if the basis for the relief sought should be deemed present, still the plaintiffs may not proceed, since they could not have an injunction, under settled principles; a declaratory judgment is merely a procedural expedient and the plaintiffs may not now seek a declaration of their asserted rights, because if they should prevail, they might ultimately apply for "further relief" under paragraph (2) of the Act, Title 28 U.S.C. § 400 (2), 28 U.S.C.A. § 400 (2).

 It will be convenient to examine the second contention at once:

 That an injunction may not be awarded to a party cited to appear before the National Labor Relations Board, upon the ground that requisite jurisdiction is lacking (i.e., interstate commerce not involved), was clearly decided in Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41, 58 S. Ct. 459, 82 L. Ed. 638, (See cases ...


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