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U.S. Supreme Court

Seatrain Shipbuilding Corp. v. Shell Oil Co., 444 U.S. 572 (1980)

Seatrain Shipbuilding Corp. v. Shell Oil Co.

No. 78-1651

Argued November 28, 1979

Decided February 20, 1980

444 U.S. 572


Petitioner Seatrain Shipbuilding Corp. (Seatrain) received a construction differential subsidy (CDS) under Title V of the Merchant Marine Act, 1936 (Act), to construct a supertanker, and, as required by § 506 of the Act, Seatrain and petitioner Polk Tanker Corp., the initial owner of the vessel, agreed to operate it exclusively in foreign trade except as otherwise authorized in § 506. When the vessel was completed, petitioners asked the Secretary of Commerce to terminate all restrictions on the vessel's operation in domestic trade in exchange for their fully secured note repaying in full the vessel's CDS. The Secretary granted their application. Thereafter, certain competitors in the domestic trade (respondents) brought suit in District Court seeking declaratory and injunctive relief prohibiting the Secretary from granting a permanent release from the § 506 "foreign trade only" requirement. The District Court held, inter alia, that the Secretary had the authority permanently to release vessels from trade restrictions imposed pursuant to § 506 in exchange for full CDS repayment, but remanded the case to the Secretary for consideration of the competitive consequences of granting the release in question. Apparently relying on Federal Rule of Civil Procedure 54(b), the court subsequently certified its decision as a "final judgment." The Court of Appeals reversed, concluding that by specifying certain exceptions to the "foreign trade only" requirement, § 506 occupied the field and impliedly prohibited the Secretary from making any other exceptions under the Act's more general provisions.


1. The District Court's determination that the Secretary was empowered to waive permanently the restrictions required by § 506 was a "final decision" certifiable under Rule 54(h) and appealable to the Court of Appeals under 28 U.S.C. § 1291, and thus this Court has jurisdiction to hear the case. Although respondents' claim that the Secretary's waiver of § 506 restrictions as to petitioners' vessel was an abuse of discretion caused the District Court to remand to the agency for consideration of the economic consequences of granting the release, respondents' request for a general declaration that the Secretary lacks

Page 444 U. S. 573

authority to grant a permanent release from § 506 restrictions under any circumstances was finally decided, and meets the case or controversy requirement of Art. III of the Constitution. Pp. 444 U. S. 579-584.

2. The Act empowers the Secretary to approve "full repayment/permanent release" transactions of the type at issue here. On the face of the statute, the Secretary's broad contracting powers and discretion to administer the Act seem to comprehend the authority to grant permanent releases. The specific exceptions to the "foreign trade only" requirement in § 506 speak only to temporary releases from that requirement, and nothing in § 506, or in any other provision of Title V of the Act, either expressly or implicitly addresses the issue of permanent revocation of a CDS contract. Furthermore, the legislative history doe not demonstrate that Congress intended to rule out permanent release of the type involved here, and the agency has consistently concluded that the Act permits such releases. Pp. 584-596

194 U.S.App.D.C. 7, 595 F.2d 814, revered and remanded.

BRENNAN, J., delivered the opinion for a unanimous Court.

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