John Marshall Harlan II

“ Whether rates are reasonable, whether discriminations are fair, whether particular combined economic arangements are justified, whether practices that would, for industry generally, fall afoul the Sherman Act are permissible under a legislative regime for a particular industry that to that extent supersedes the antitrust laws-these and like questions come within the operation of the doctrine of primary jurisdiction, and it limits the power of courts to pass on their merits. ”

“ While limits have been imposed upon enterprise in meeting competition, which is itself the governing principle of our economic system, these limits, embodied in the antitrust laws, were found to be inapplicable to, because destructive of our national interest in, the international ocean transportation industry. The United States obviously could not completely regulate the foreign carriers with whom American carriers compete (not to mention the carriers that serve foreign shippers with whom American shippers compete) . ”

“ Prior to the enactment of the Shipping Act, the ocean transportation industry was, of course, subject to the antitrust laws, and, indeed, as has been noted, proceedings under the Sherman Act had been brought against several conferences by the Government. Congress might have provided that, in addition to being subjected to the general surveillance involved in a comprehensive pattern of regulation, the steamship owners must continue to confrom to the affirmative policy in favor of a high level of competition that underlies the antitrust laws. ”

“ Contrariwise, where a decision of a case depends on determination of a question of law as such, either because of explicit statutory outlawry of some specific conduct or by necessary implication of judicial power because not involving the exercise of administrative discretion or the need of uniform application of specialized competence, the doctrine of primary jurisdiction has no function, because there is no occasion to refer a matter to the administrative agency. ”

“ Eleven months later the Board filed its detailed, comprehensive report approving the conference's dual-rate system (as amended in accordance with the Board's report) as not unjustly discriminatory or unfair, nor likely to operate to the detriment of the commerce of the United States, nor in violation of the Shipping Act. But all this elaborate process and determination are legally meaningless. The agency is made to serve as a circumlocution office. The sole function of this carnival of procedural emptiness is that of a formal preliminary to a suit in a federal court. ”

“ The entire history of steamship agreements shows that in ocean commerce there is no happy medium between war and peace when several lines engage in the same trade. Most of the numerous agreements and conference arrangements discussed in the foregoing report were the outcome of rate wars, and represent a truce between the contending lines.' Id., at 416. To prohibit existing arrangements, said the Committee, would be to invite rate wars leading to monopoly or to the exposure of American shippers and lines to disastrous competition with foreign shippers and lines. ”

“ In the dual-rate contract system, there is nothing of this 'getting even'; the parties simply enter into an agreement that is designed to guide their future conduct but in no way depends upon or arises out of past conduct. It does violence to the English language-and certainly to the duty of reading congressional language in context-to characterize such a contractual arrangement as 'retaliation.' As conduct relating to the competitive struggle between carriers combined in a conference and those who prefer to stay out-yes ”

“ Appeal lies to courts to test whether an agency acted within its statutory bounds, on the basis of rational evidence supporting a reasoned conclusion, and ultimately satisfies the constitutional requirement of due process. Within these limits, a large range of discretion is entrusted to administrative agencies to make effective the social and economic policies adopted by Congress in the myriad concrete situations calling for their application. ”

“ It was further found that the alternative to cooperation was cut-throat competition leading to monopoly and, more particularly, working to the serious detriment of American carriers and shippers and to the advantage of their foreign competitors. The conclusion was that the system of cooperation must be domesticated and exposed to, and policed by, a continuing process of regulation. ”

“ It gives these agencies the necessary scope for exploring a wide realm of facts, not to be confined within the exclusionary rules of evidence controlling proceedings in courts, to weigh such facts with an expert's understanding and to choose between allowable inferences where wise choice so often depends on informed judgment. ”

“ There can be no doubt that the Committee was amply alive to the primary purpose of the dual-rate system. But it did not, in subsequently discussing (id., at 304-307) the 'Disadvantages of Shipping Conferences and Agreements, as Now Conducted,' make any reference to the system as such, although it dealt extensively and disapprovingly, on the basis of evidence put before it, with such practices as deferred rebates, fighting ships, and retaliation against shippers for airing grievances. ”

“ By virtue of these two decisions, an independent shipowner who claimed to be hurt by the operation of a dual-rate contract system, employed as a competitive measure against him by a shipping conference, could not bring his complaint to court as might a manufacturer hurt by an analogous combination competitor. Such a shipowner would have to appeal to the Federal Maritime Board, as did Isbrandtsen. The ensuing Board proceedings would probably be similar to those in this case. ”

“ The pervading purpose of the Shipping Act is to be found in a statement made in the House debate by Representative Burke, a majority member of the Alexander Committee during both the investigation and the consideration of the various bills:
'Your committee at the conclusion of such hearings and after consideration and due deliberation made its report to Congress upon the subject with many valuable recommendations. Among the recommendations made in such report to Congress were that laws should be passed prohibiting the grossest and most vicious of such unfair practices * * *. ”

“ With respect to ocean transportation, however, Congress from the beginning chose to exempt agreements among carriers and between carriers and shippers from the antitrust laws. They thus rejected court-determined competition and preferred to rely upon regulation under an expert administrative agency. ”

“ Its disadvantages and abuses must be curbed by effective government control.
Among the specific recommendations of the Committee were that carriers be required to file for approval with the regulatory agency (the Committee recommended use of the Interstate Commerce Commission) any agreements among themselves or with shippers, with the agency being empowered to cancel agreements it found to be 'discriminating or unfair in character, or detrimental to the commercial interests of the United States' (id., at 420) ”

“ To be sure, the laws under which these agencies operate prescribe the fundamentals of fair play. They require that interested parties be afforded an opportunity for hearing and that judgment must express a reasoned conclusion. ”