US v. Southern Motor Carriers Rate Confer., Inc.

• Citation: 467 F. Supp. 471
• Decision Date: 20 March 1979
• Docket Number: Civ. A. No. 76-1909A.
• Parties: UNITED STATES of America, Plaintiff, v. SOUTHERN MOTOR CARRIERS RATE CONFERENCE, INC., Motor Carriers Traffic Association, Inc., North Carolina Motor Carriers Assoc., Inc., National Association of Regulatory Utility Commissioners, Defendants.
• Court: U.S. District Court — Northern District of Georgia

467 F. Supp. 471

UNITED STATES of America, Plaintiff, v. SOUTHERN MOTOR CARRIERS RATE CONFERENCE, INC., Motor Carriers Traffic Association, Inc., North Carolina Motor Carriers Assoc., Inc., National Association of Regulatory Utility Commissioners, Defendants.

Civ. A. No. 76-1909A.

United States District Court, N. D. Georgia, Atlanta Division.

March 20, 1979.

Robert M. Silverman, Robert N. Dempsey, Judy L. Goldstein, Antitrust Div., U. S. Dept. of Justice, Washington, D. C., Joen Grant, Washington, D. C., William L. Harper, U. S. Atty., Atlanta, Ga., Paul Rodgers, Nat. Ass'n of Regulatory Utility Comm'rs, Washington, D. C., for plaintiff.

J. Raymond Clark, L. C. Warren, Washington, D. C., for Motor Carriers Traffic Ass'n, Inc.

Allen I. Hirsch, Ellis Arnall, Arnall, Golden & Gregory, Atlanta, Ga., for Southern Motor Carriers Rate Conference, Inc.; Homer S. Carpenter, Rice, Carpenter & Carraway, Washington, D. C., of counsel.

Charles L. Gowen, King & Spalding, Chas. Shaffer, Jr., Michael Eric Ross, Atlanta, Ga., for N. C. Motor Carriers Ass'n, Inc.

Alabama Service Commission, Susan Beth Farmer, Asst. Atty. Gen., Montgomery, Ala., Georgia Public Service Commission, R. Douglas Lackey, Asst. Atty. Gen., Atlanta, Ga., Tennessee Public Service Commission, William C. Koch, Jr., Deputy Atty. Gen., Nashville, Tenn., Eugene W. Ward, Gen. Counsel, Tennessee Public Service Commission, Nashville, Tenn., Mississippi Public Service Comm., Bennett E. Smith, Jackson, Miss., North Carolina Utilities Commission, Maurice W. Horne, Deputy Gen. Counsel, Utilities Commission, Raleigh, N. C., David H. Coburn, Counsel for NMFTA, Rea, Cross & Auchincloss, Washington, D. C., Paul Rodgers, Charles A. Schneider, William R. Nusbaum, Washington, D. C., John Wallace, Asst. Atty. Gen., Raleigh, N. C., Homer S. Carpenter, Arlington, Va., Charles D. Gray, Deputy Asst. Gen. Counsel, National Assn. of Regulatory Utility Commissioners, Washington, D. C., for amicus curiae.

ORDER

RICHARD C. FREEMAN, District Judge.

On November 17, 1976 the United States filed a complaint under Section 4 of the Sherman Act, 15 U.S.C. § 4,¹ to enjoin the continuing violation of Section 1 of the Sherman Act, 15 U.S.C. § 1.² The three rate bureau defendants, Southern Motor Carriers Rate Conference, Inc. ("SMCRC"), Motor Carriers Traffic Association, Inc. ("MCTA"), and North Carolina Motor Carriers Association, Inc. ("NCMCA"), represent common carriers before the regulatory commissions of the States of Alabama, Georgia, Mississippi, North Carolina, and Tennessee. On behalf of their members, the defendants publish tariffs containing proposed rates for intrastate for-hire transportation of general commodities. The complaint alleges that the defendants and their co-conspirators have engaged in a continuing conspiracy to fix these rates within the five subject states. The parties completed discovery following the court's ruling, on July 4, 1977, on the defendants' motions to dismiss the complaint and the plaintiff's motion to strike certain affirmative defenses. United States v. Southern Motor Carriers Rate Conference, Inc., 439 F.Supp. 29 (N.D.Ga. 1977). As a part of that order, we invited the Attorneys General of the States of Alabama, Georgia, Mississippi, Tennessee and North Carolina "to participate in the instant action by filing briefs, memoranda, or evidence which may be a critical aid in the ultimate resolution of the issues presented ...." Id. at 52. The action is presently before the court on the parties' cross-motions for summary judgment, Rule 56, Fed.R.Civ.P. For the reasons set forth below, we GRANT the government's motion for summary judgment and DENY the summary judgment motions filed by the defendants.

Discovery in this action has led to the development of a substantial record. While the parties vigorously dispute the significance of the facts in the record, they do not dispute the facts themselves, and have filed extensive stipulations of fact. The statement of the case which follows will review first, the regulatory schemes in the five subject states; second, the operations of the defendants in formulating and publishing intrastate rates before the state commissions; and finally, the procedures followed by the commissions in reviewing the proposed rates. The regulatory schemes of the various states differ somewhat, and we will survey each separately. As the rate formulation practices are similar among the defendant conferences, and as the review mechanisms are similar among the commissions, we will describe these by reference to the North Carolina example. To the extent that there is a dispute among the parties, we will of course view the facts in a light most favorable to the defendants. See Adickes v. S. H. Kress & Co., 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962).

THE STATE REGULATORY SCHEMES

Alabama — Under Alabama law, all non-exempted motor carriers are subject "to control, supervision and regulation by the Alabama Public Service Commission." Title 48, Ala.Code § 301(3). That authority includes regulation of intrastate commerce "except insofar as the same may be in conflict with the provisions of the constitution of the United States and the acts of congress" in force in 1940 or thereafter enacted. Title 48, Ala.Code § 301(4). The powers and duties of the Alabama Public Service Commission are set forth in Title 48, Ala.Code § 301(5), and include:

1. The duty to regulate common carriers by motor vehicle as provided in this article and to that end the commission may establish reasonable rules and requirements with respect to adequate service, transportation of passengers, baggage, freight and express, . . .

. . . . .

4. To supervise and regulate common carrier in all matters affecting the relationship between such common carriers and the traveling and shipping public. . . .

Alabama Code § 301(17) further places concomitant duties on the common carriers with respect to rates, fares, and charges, including, inter alia:

B. . . . the duty of every common carrier of property by motor vehicle to provide safe and adequate service, equipment and facilities for the intrastate transportation of property in the State of Alabama; to establish, observe and enforce just and reasonable rates, charges and classifications, and just and reasonable regulations and practices relating thereto . . . for all . . . matters relating to or connected with the intrastate transportation of property in the State of Alabama.

C. Common carriers of property by motor vehicle may establish reasonable through routes and joint rates, charges and classifications with other such carriers or with common carriers by railroad or express or water; . . . In case of such joint rates, fares or charges, it shall be the duty of the carrier parties thereto to establish just and reasonable regulations and practices . . ..³

These provisions illustrate a common pattern among the subject states: motor carriers are required to cooperate for the limited purpose of establishing joint rates, i. e., rates covering a shipment in which one carrier operates over only part of the route and another carrier serves the remainder. In this fashion, a shipper is able to obtain a single price for a shipment involving more than one carrier. On the other hand, Alabama does not require that two carriers providing identical service along the same route charge identical prices, or confer as to the prices each will charge.

Georgia — Motor common carriers came under the jurisdiction of the Georgia Public Service Commission in 1929. Pursuant to the requirements of the Georgia statutes all common carriers must obtain certificates of public convenience and necessity. The Public Service Commission has the sole authority to prescribe just and reasonable rates, fares and charges. The Commission maintains a staff of seven professionals and additional clerical personnel to analyze motor common carrier costs of Class "A" carriers.⁴ As in Alabama, Georgia law sanctions cooperation between motor carriers in establishing through routes at prescribed joint rates. The statutory framework requires that the Georgia Public Service Commission

prescribe just and reasonable rates, fares, and charges for transportation by motor common carriers of passengers, baggage and property, and for all services rendered by motor common carriers in connection therewith, and the tariffs therefor shall be in such form, and shall be filed and published in such manner and on such notice as the commission may prescribe, and shall be subject to change on such notice and in such manner as the commission may prescribe.

Ga.Code Ann. § 68-613. Rule 10(a), General Motor Carrier Rules and Regulations of the Georgia Public Service Commission provides that

Motor carriers of property operating under certificates Class `A' will be required to receive property destined to stations located on routes of other Class `A' carriers, and to interchange such property at rates prescribed by this Commission, with such connecting carriers.

Mississippi — The regulation of motor common carriers operating in intrastate commerce within Mississippi was vested in the Mississippi Public Service Commission by the Motor Carrier Regulatory Act of 1938. The public policy expressed by the 1938 Act substantially paraphrases the National Transportation Policy, see 49 U.S.C. preceding §§ 1, 301, 901 and 1001, and provides that the purpose of the regulation of motor common carriers is to ensure "reasonable charges . . . without unjust discriminations, undue preferences or advantages, and unfair or destructive competitive practices . . .."

Mississippi law comes the closest to requiring uniform rates to be charged by competing carriers serving the same route. Rule 39d(4) of the Mississippi Public Service Commission provides:

Where two or more freight rates are published to apply on

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