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AMERICAN PRESIDENT LINES, LTD. v. FEDERAL MARITIME

May 21, 1953

AMERICAN PRESIDENT LINES, Limited,
v.
FEDERAL MARITIME BOARD et al.



The opinion of the court was delivered by: HOLTZOFF

This case came on for hearing on cross motions made by the plaintiff and each of the defendants for summary judgment.

This action is brought for a declaratory judgment and an injunction setting aside the grant of a subsidy made by the Federal Maritime Board to two steamship lines. Pursuant to authority granted by the Merchant Marine Act, Sec. 601(a) et seq., U.S. Code, Annotated, Title 46, Sec. 1171 et seq., the Federal Maritime Board granted what are called operating-differential subsidies to the defendants Pacific Far East Line, Inc., and the Pacific Transport Lines, Inc., which operate merchant vessels on a route between the West Coast and Oriental ports. The plaintiff, American President Lines, which for some time has been operating ships over the same route and is in receipt of a similar subvention, brings this action for an adjudication that the subsidies granted to its competitors have been illegally allowed.

 There are two preliminary questions to be determined in this litigation: first, whether the action of the Board is subject to judicial review, and, if so, to what extent; and if this question is answered in the affirmative, then second, whether the plaintiff has a standing to bring this action.

 The plaintiff seeks to predicate its right to a judicial review on the Administrative Procedure Act, U.S. Code Annotated, Title 5, Sec. 1009. This Act excludes from its provisions matters in respect to which statutes preclude judicial review, or in respect to which agency action is by law committed to agency discretion. In this instance, no statute precludes judicial review. On the other hand, the granting or withholding of a subsidy is clearly committed by law to agency discretion. In this respect the action of the Board in granting or withholding a subsidy is similar to the action of other Federal agencies in making or withholding loans and grants. It is not mandatory for the Board to grant a subsidy merely because the applicant complies with specified conditions. It must consider and weigh many aspects of public policy and expediency in reaching a conclusion. A steamship line that petitioned for a subsidy would hardly have any right to secure judicial review to a denial of its application in the exercise of the discretion of the Board. The conclusion necessarily follows that since the action of the Board in passing on an application for a subsidy depends on its discretion, the decision of the Board will not be reviewed by the judicial branch of the Government. The courts may not substitute themselves for the Board in determining whether it is in the interest of public policy to grant or withhold a subsidy to a particular steamship line. To that extent the decision of the Board is not subject to judicial review, as being within the ambit of matters committed to agency discretion.

 The statute, however, provides certain limitations and prescribes specific procedure to be followed in connection with applications for subsidies. To the extent of determining whether any of these restrictions have been transcended, and only to that extent, judicial review is permissible. In other words, the courts may determine whether the Board has acted illegally. Beyond that the courts have no function to perform in respect to the subsidies.

 The second preliminary question is whether the plaintiff has a standing to bring this suit. It is axiomatic that the judicial process extends only to actual cases and controversies. The courts may not pass upon the legality of official action merely because some one desires a judicial opinion on the subject. A member of the public, who has no other interest in the matter than that of any other citizen or taxpayer, has no standing to secure an injunction against official action on the ground that it may be illegal, Com. of Massachusetts v. Mellon, 262 U.S. 447, 43 S. Ct. 597, 67 L. Ed. 1078. The fact that a person is a competitor of a party receiving a loan or grant from the Government does not give him a standing to challenge the legality of such action, Alabama Power Co. v. Ickes, 302 U.S. 464, 478, 58 S. Ct. 300, 82 L. Ed. 374, et seq. These well established doctrines are not in dispute.

 It is claimed by the plaintiff, however, that the Administrative Procedure Act gives it a standing to sue, which otherwise it might not have. The pertinent provision of that Act, U.S. Code, Annotated Title 5, Sec. 1009(a), reads as follows:

 '(a) Any person suffering legal wrong because of any agency action or adversely affected or aggrieved by such action within the meaning of any relevant statute, shall be entitled to judicial review thereof.' (Emphasis supplied.)

 Obviously the plaintiff has not suffered any legal wrong and, therefore, cannot bring itself within the first clause of the foregoing paragraph.

 We are not without guidance in this matter. In Federal Communications Commission v. Sanders Brothers Radio Station, 309 U.S. 470, 642, 60 S. Ct. 693, 698, 84 L. Ed. 1037 a rival radio station sought to challenge an order of the Federal Communications Commission granting a competitor's application for a construction permit to erect a broadcasting station. The right of the petitioner to bring the proceeding was questioned. The Supreme Court referred to section 402(b) of the Federal Communications Act, U.S. Code, Annotated, Title 47, Sec. 402(b), which authorized an appeal to the Court of Appeals for the District of Columbia by an application for a license or permit or 'by any other person aggrieved or whose interest are adversely affected by any decision of the Commission granting or refusing any such application'. The conclusion was reached that the competitor had the requisite standing to appeal from the decision of the Commission and to raise any relevant question of law in respect to the order of the Commission.

 It will be observed that the phraseology of the pertinent provisions of the Administrative Procedure Act and of the Federal Communications Act are practically identical. The Administrative Procedure Act uses the words, 'Any person * * * adversely affected or aggrieved'. The Federal Communications Act uses the words 'any other person who is aggrieved or whose interests are adversely affected'. If a competitor who fears adverse economic effects, has a right to challenge the legality of official action under one of the Acts, the conclusion is inescapable that he may do so under the other Act.

 It is important to observe in this connection that section 605(c) of the Merchant Marine Act provides that in certain contingencies a public hearing must be held by the Commission, notice of which is to be given to each line serving the route. In other words, the Congress felt that under certain circumstances a competitor should have a ...


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