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ISBRANDTSEN CO. v. UNITED STATES

UNITED STATES DISTRICT COURT, SOUTHERN DISTRICT OF NEW YORK


March 21, 1951

ISBRANDTSEN CO., Inc.
v.
UNITED STATES et al.

The opinion of the court was delivered by: FRANK

The earlier stage of this litigation is reported in D.C., 81 F.Supp. 544. As the statement of facts therein makes clear, Eastbound Conference Agreement No. 4490 -- from its initial approval by the U.S. Maritime Commission on August 25, 1935, through subsequent amendments as approved by the Commission down to the present -- has provided for contract-non-contract rates, although the Conference has not availed itself generally of this power in the past. Agreement No. 7920-1, to which the Westbound Conference is a party, as approved by the Commission on August 24, 1948, similarly undertakes to authorize the use of contract-noncontract rates in the Westbound trade. On October 1, 1948, the defendant carriers sent notices to all known shippers in the North Atlantic trade that effective November 1, 1948, the exclusive patronage contract-noncontract rate system would be inaugurated; the contract rates were to be the then prevailing freight rates, but shippers who refused to enter into contracts to ship with the conference lines exclusively when those lines could provide transportation, were to be charged noncontract rates to be fixed by an arbitrary differential at a level 20% to 30% higher than the contract rates. On Isbrandtsen's motion, this court granted a temporary injunction, restraining the defendant carriers from instituting the exclusive patronage system, conditioned upon Isbrandtsen's diligent prosecution before the Maritime Commission of a complaint challenging the validity of these Conference agreements.

Subsequently, Isbrandtsen filed a complaint with the Maritime Commission. The United States (by the Attorney General) and the Secretary of Agriculture intervened in support of the complaint. Evidence was taken before a trial examiner who made two reports. Before the Commission finally acted on these reports, it was abolished.

 Its successor, the Federal Maritime Board, thereafter made a decision and order on December 1, 1950, which will be found in 3 F.M.B. -- , approving the contract-noncontract rate provisions of the conference agreements and dismissing Isbrandtsen's complaint.

 Isbrandtsen then filed in this court an amended complaint, which referred to the Board's order and asked that it be enjoined. The United States (by the Attorney General) appeared, and the Secretary of Agriculture was permitted to intervene. *fn1" They argued in support of the injunction. The Board and the conference carriers appeared, moved to dismiss the suit, and argued in opposition to the proposed injunction.


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