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D.L. PIAZZA CO. v. WEST COAST LINE

October 1, 1953

D.L. PIAZZA CO. ET AL.
v.
WEST COAST LINE, INC. ET AL.



The opinion of the court was delivered by: LA Buy, District Judge.

On May 5, 1948 the plaintiff filed a complaint with the United States Maritime Commission, predecessor of the Federal Maritime Board, alleging that the private defendants had entered into an oral charter party with the plaintiff whereby the plaintiff was to have exclusive use of the vessel Argentinean Reefer for a direct voyage from Valparaiso, Chile, to New York, and that the defendants failed to perform their obligations with respect to said agreement whereby the rates and charges made therefor were discriminatory, prejudicial and unfair and in violation of the Shipping Act of 1916, as amended, 46 U.S.C.A. §§ 812, 815 and 816. The plaintiff sought the sum of $51,132.69 with interest, as an award of reparation for unlawful rates and charges. On December 11, 1951 the Federal Maritime Board entered an order denying reparations as to two of the private defendants and awarded the sum of $2,500 to be recovered from the remaining defendant, J. Lauritzen. It appears that said sum was tendered to the plaintiff by said defendant on December 17, 1951 and December 31, 1951, but both tenders were returned by the plaintiff. On December 10, 1952 the plaintiff filed the present suit in this court.

It is alleged the jurisdiction of this court exists under Title 28 United States Code, Section 1331, in that the matter in controversy exceeds the sum of $3,000 and arises under the laws of the United States; and also under Section 1332 in that diversity of citizenship exists between the litigants and the amount in controversy exceeds the sum of $3,000. In addition, jurisdiction is also premised upon Section 829 of the Shipping Act, 46 U.S.C.A. The complaint prays that plaintiff recover judgment against the private defendants and that the orders of the Federal Maritime Board be set aside, annulled and suspended upon the entry of the judgment prayed for.

All defendants have moved to dismiss the aforesaid complaint for the following reasons: (1) the court lacks original and review jurisdiction of the subject matter, (2) the service of summons issued herein as to private defendants should be quashed since none are present in this jurisdiction, (3) the action should be dismissed on the ground of improper venue, (4) if the action be not dismissed, it should be transferred to the United States District Court for the Southern District of New York.

It is essential before proceeding to any of the other grounds of dismissal that this court determine whether or not jurisdiction of this action rests in this court.

It is the contention of defendants that the procedure established under the Shipping Act renders the jurisdiction of the Federal Maritime Board exclusive; that the plaintiff cannot pursue his cause of action anew in the district court when it has already been adjudicated by that administrative body.

In Roberto Hernandez, Inc., v. Arnold Bernstein Schiffahrtsgesellschaft, 2 Cir., 1941, 116 F.2d 849, 851, the Shipping Board found that the defendant was guilty of unlawful discrimination as charged in the complaint before it and ordered the defendants to pay damages as reparations. In an action in the district court to enforce the payment of said damages under 46 U.S.C.A. § 829, the award was confirmed but the district court failed to hold that the plaintiff was entitled to damages on the proof made. On appeal, the defendants resisted enforcement of the order not only on the grounds upheld by the district court, but also on the ground that the Commission had no jurisdiction. In considering that contention, the Court of Appeals said:

    "* * * The theory is that suit should have been
  brought in the first instance without making any
  complaint to the Commission. It is argued that, as
  the gist of the plaintiff's grievance was that the
  defendants had wholly refused and neglected to
  perform a legal duty to provide available freight
  space, the issue was uncomplicated by technical and
  intricate factual matters which needed the action of
  any expert commission to bring about uniformity in
  administration and prevent discrimination. * * * But
  we cannot agree that the facts in this case did not
  call for technical knowledge in the solution of the
  problem of deciding whether the defendants were
  guilty of unjustly discriminatory practices in the
  light of the tonnage and the manner in which their
  vessels should be loaded with these automobiles which
  were to be shipped uncrated. The contrary seems
  self-evident and the Maritime Commission had power to
  entertain the complaint. 46 U.S.C.A. § 821. And
  where, as here, involved questions of fact must be
  determined and given proper effect in view of the
  requirements of correct maritime methods relating to
  the stowage of the particular kind of freight, the
  remedy by way of complaint first to the Commission is
  exclusive. United States Navigation Co. v. Cunard
  S.S. Co., 284 U.S. 274, 52 S.Ct. 247, 76 L.Ed. 408."

And, in the United States Navigation Co. v. Cunard S.S. Co., 284 U.S. 474, 52 S.Ct. 247, 249, 76 L.Ed. 408, the Supreme Court stated as follows:

    "The Shipping Act is a comprehensive measure
  bearing a relation to common carriers by water
  substantially the same as that borne by the
  Interstate Commerce Act to interstate common carriers
  by land. When the Shipping Act was passed, the
  Interstate Commerce Act had been in force in its
  original form or in amended forms for more than a
  generation. Its provisions had been applied to a
  great variety of situations, and had been judicially
  construed in a large number and variety of cases. The
  rule had become settled that questions essentially of
  fact and those involving the exercise of
  administrative discretion which were within the
  jurisdiction of the Interstate Commerce Commission,
  were primarily within its exclusive jurisdiction,
  and, with certain exceptions not applicable here,
  that a remedy must be sought from the Commission
  before the jurisdiction of the courts could be
  invoked. In this situation, the Shipping Act was
  passed. In its general scope and purpose, as well as
  in its terms, that act closely parallels the
  Interstate Commerce Act; and we cannot escape the
  conclusion that Congress intended that the two acts,
  each in its own field, should have like
  interpretation, application, and effect. It follows
  that the settled construction in respect of the
  earlier act must be applied to the later one, unless,
  in particular instances, there be something peculiar
  in the question under consideration, or dissimilarity
  in the terms of the act relating thereto, requiring a
  different conclusion."
  The sections which the plaintiff claims were violated by defendants were §§ 812, 815, and 816 relating to discriminatory acts and rates. Preliminary resort to the administrative body
  "must be had where a rate, rule, or practice is
  attacked as unreasonable or as unjustly
  discriminatory, and also where it is necessary, in
  the construction of a tariff, to determine upon
  evidence the peculiar meaning of words or the
  existence of incidents alleged to be attached by
  usage to the transaction. In all such cases, the
  uniformity which it is the purpose of the Commerce
  Act to secure could not be obtained without a
  preliminary determination by the Commission.
  Preliminary resort to the Commission is required
  because the enquiry is essentially one of fact and of
  discretion in technical matters; and uniformity can
  be secured only if its determination is left to the
  Commission. Moreover, that determination is reached
  ordinarily upon voluminous and conflicting evidence,
  for the adequate appreciation of which acquaintance
  with many intricate facts of transportation is
  indispensable; and such acquaintance is commonly to
  be found only in a body of experts. * * *'" United
  States Navigation Co. v. Cunard S.S. Co., supra, 284
  U.S. at page 482, 52 S.Ct. at page 249.

See also Switchmen's Union of North America v. National Mediation Board, 1943, 320 U.S. 297, 301, 64 S.Ct. 95, 88 L.Ed. 61; Far East Conference v. U.S., 1951, 342 U.S. 570, 574, 72 S.Ct. 492, 96 L.Ed. 576.

Thus, in the instant situation where determination is to be made of whether unjust discriminatory rates were charged by the defendant, the court is of the opinion the jurisdiction of the Shipping Board is primary and exclusive and this court has no jurisdiction to determine the issues of damages as prayed for in the complaint.

With respect to the incidence of review jurisdiction by this court, it is pertinent to determine the effect of the decision of the Supreme Court of the United States in United States v. Interstate Commerce Commission, 1948, 337 U.S. 426, 69 S.Ct. 1410, 93 L.Ed. 1451, together with the review provisions of Interstate Commerce orders existing in Title 28, ยง 1336 and Chapter 157 of that title; and the construction and interpretation to be accorded Sec. 1032 of the administrative procedure act. 5 U.S.C.A. as it relates to Sec. 830 of the Shipping Act, 46 U.S.C.A. Primary consideration should be given to the nature of an order denying ...


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