The opinion of the court was delivered by: RYAN
Since November 12, 1965 the Federal Maritime Commission has endeavored to secure compliance with subpoenas duces tecum, directed to the several respondents, requiring production of certain documents. These respondents named are C. J. Moran described as a resident of New York, the general freight manager of Cunard Steamship Co., Ltd., agents for Thos. & Jno. Brocklebank, Ltd., and Thos. & Jno. Brocklebank, Ltd.: T. C. Hopkins who is described as executive vice-president of United States Navigation Co., Inc., agents for Scindia Steam Navigation Co., Ltd., Hopkins apparently being a resident of New York, and Scindia Steam Navigation Co., Ltd., being an Indian corporation, and also as respondent, United States Navigation Co., Inc., S.S. Norton who is the president of Norton, Lilly & Company, a New York corporation, a respondent, agents for the Shipping Corporation of India, Ltd., also a named respondent which is, from the evidence presented to me, an Indian corporation owned and entirely operated by the Government of India; J. C. Severiens, a resident of New York; and Nedlloyd Lines, Inc., a New York corporation of which Severiens is president and which is, according to the evidence, uncontradicted, agent for and entirely owned, operated and controlled by N. V. Nedlloyd Lijnen, Holland, a corporation organized and existing under the laws of the Netherlands.
The Commission has moved now for an order adjudging the several respondents in civil contempt for failure to obey and comply with subpoenas which were returnable on January 4, 1967 and for their failure to obey the order of this Court directing compliance with such subpoenas.
It is of record that on December 9, 1965 the respondents refused to comply with the subpoenas issued by the Commission on November 15, 1965. A petition filed in this court for an order of enforcement was granted after hearing, and on February 2, 1966 an order was entered directing respondents to produce the documents specified.
This was accompanied by a memorandum endorsement of the Court which is reported in Ludlow Corp. v. DeSmedt, D.C., 249 F. Supp. 496. The order was affirmed on appeal by the Court of Appeals of this circuit on August 29, 1966 and the opinion written by the Court of Appeals is found reported in 366 F.2d 464. A petition for a writ of certiorari filed with the Supreme Court of the United States was denied on December 5, 1966, reported in 385 U.S. 974, 87 S. Ct. 513, 17 L. Ed. 2d 437.
The Court of Appeals, in affirming the order of this Court upholding the power of the Commission to issue the subpoenas, wrote in their opinion, 366 F.2d page 473 of the reported opinion:
"We are not unmindful of the problems the Federal Maritime Commission may face in endeavors whether under § 21 or § 27, to require foreign shipping lines to produce documents located aboard. But we are not now confronted with an effort to hold a foreign carrier in contempt or to assess fines for refusing at its government's command to produce documents in response to a subpoena, and we ought not to anticipate that the problem will inevitably arise."
The problem referred to by the Court of Appeals has actually arisen and is presented by the motion now before us, and we are required now to find and to determine whether the documents sought by the subpoenas are in the possession or under the control of the respondents or any of them, and whether the respondents should be required to produce them or be adjudged in civil contempt, as is sought by this motion.
If the respondents-agents are not in possession or control of the documents sought, we must inquire whether these respondents, in the light of their relationship with and the transactions had by them as agents or otherwise on behalf of those respondents who have such possession and control, have made all reasonable and honest efforts to comply with the subpoenas of this Court. If they have done so, this motion must be denied. If they have wilfully failed in this respect, respondents, or such of them as are at fault, should be adjudged in civil contempt.
It has been represented by each of these respondents that the documents sought are located abroad, and that their production has been specifically forbidden by law or official directive of their respective governments. It is required, before such a defense can be asserted, that the statute or authority under which an agency of a foreign government prohibits the disclosure of documents within its borders, in order to be recognized by this Court, contain criminal sanctions, and that is the decision of the First National City Bank of New York v. Internal Revenue Service reported at 2 Cir., 271 F.2d 616 at page 619.
On a review of all of the evidence here, considering the culpability of each one of these respondents separately and apart from the others, I have come to the conclusion that the motion must be denied at this time with reference to some but not all, of the defendants.
There has been no question raised here in this hearing as to the relevance or materiality of the documents subpoenaed in the proceeding before the Commission in the matter of Ludlow Corporation against The Calcutta, East Coast of India and East Pakistan U.S.A. Conference. The individual respondents whom I have named before are all employees, officers or agents of the corporate respondents, save only Charles J. Moran who is now an ex-employee. The corporate agent respondents themselves are not members of the Conference, but it appears that some of them are corporate subsidiaries of members of the Conference and all function in the United States as general steamship agents for members of the Conference, for members who own and operate vessels and trade from Pakistan and India to the United States Atlantic and Gulf ports.
There is no evidence that they have been granted or have exercised other than the usual, customary and primary functions of such steamship agents - that is, the solicitation of cargo and the making of arrangements for the berthing, stevedoring and the like in the United States - save with respect to Nedlloyd where the American corporation is entirely owned, dominated and controlled by the Netherlands corporation.
The record establishes to my satisfaction, and apparently is uncontradicted by any evidence of the Commission, that both the corporate respondents and the individual respondents have produced all documents and records called for by the subpoenas excepting only net revenue figures requested in items I-A, I-B and I-C and the port and ...