476 U.S. 409 (1986), 85-21, Square D Co. v. Niagara Frontier Tariff Bureau, Inc.

Docket Nº:No. 85-21
Citation:476 U.S. 409, 106 S.Ct. 1922, 90 L.Ed.2d 413, 54 U.S.L.W. 4520
Party Name:Square D Co. v. Niagara Frontier Tariff Bureau, Inc.
Case Date:May 27, 1986
Court:United States Supreme Court
 
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Page 409

476 U.S. 409 (1986)

106 S.Ct. 1922, 90 L.Ed.2d 413, 54 U.S.L.W. 4520

Square D Co.

v.

Niagara Frontier Tariff Bureau, Inc.

No. 85-21

United States Supreme Court

May 27, 1986

Argued March 3, 1986

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR

THE SECOND CIRCUIT

Syllabus

Petitioner shippers brought class actions in Federal District Court against respondent motor carriers and respondent ratemaking bureau, alleging that, during the years 1966 through 1981, respondents engaged in a conspiracy, in violation of the Sherman Act, to fix rates for transporting freight between the United States and Canada without complying with an agreement filed by the bureau with, and approved by, the Interstate Commerce Commission. Petitioners sought treble damages, measured by the difference between the allegedly higher rates they paid and the rates they would have paid in a freely competitive market, and also sought declaratory and injunctive relief. The District Court dismissed the complaints on the authority of Keogh v. Chicago & Northwestern R. Co., 260 U.S. 156, wherein it was held that a private shipper could not recover treble damages under § 7 of the Sherman Act in connection with ICC-filed tariffs. The Court of Appeals affirmed the dismissal as to the treble damages claims.

Held: Petitioners are not entitled to bring a treble damages antitrust action. Keogh, supra. Pp. 415-423.

(a) Nothing in the Reed-Bulwinkle Act or in its legislative history indicates that Congress intended to change or supplant the Keogh rule. Similarly, there is no evidence that Congress, in enacting the Motor Carrier Act of 1980, intended to change the Keogh rule. And cases like Carnation Co. v. Pacific Westbound Conference, 383 U.S. 213, emphasizing the necessity to strictly construe immunity of collective ratemaking activities from antitrust laws, do not render Keogh invalid. Pp. 417-422.

(b) The various developments that have occurred since Keogh -- the development of class actions, the emergence of precedents permitting treble damages even when there is an available regulatory remedy, greater sophistication in evaluating damages, and the development of procedures in which judicial proceedings can be stayed pending regulatory proceedings -- are insufficient to overcome the strong presumption of continued validity that adheres in the judicial interpretation of a statute. P. 423.

760 F.2d 1347, affirmed.

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STEVENS, J., delivered the opinion of the Court, in which BURGER, C.J., and BRENNAN, WHITE, BLACKMUN, POWELL, REHNQUIST, and O'CONNOR, JJ., joined. MARSHALL, J., filed a dissenting opinion, post, p. 424.

STEVENS, J., lead opinion

JUSTICE STEVENS delivered the opinion for the Court.

Petitioners have alleged that rates filed with the Interstate Commerce Commission by respondent motor carriers during the years 1966 through 1981 were fixed pursuant to an agreement forbidden by the Sherman Act, 26 Stat. 209, as amended, 15 U.S.C. § 1 et seq. The question presented is whether the carriers are subject to treble damages liability in a private antitrust action if the allegation is true.

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The question requires us to give careful consideration to the way in which Congress has accommodated the sometimes conflicting policies of the antitrust laws and the Interstate Commerce Act, 49 U.S.C. § 10101 et seq. (1982 ed. and Supp. II). Our analysis of the question will include three components: (1) the sufficiency of the complaint allegations in light of [106 S.Ct. 1924] the bare language of the relevant statutes; (2) the impact of the Court's decision of an analogous question in 1922 in Keogh v. Chicago & Northwestern R. Co., 260 U.S. 156; and (3) the extent to which the rule of the Keogh case remains part of our law today.

I

Two class action complaints making parallel allegations against the same six defendants were filed in the United States District Court for the District of Columbia and then transferred to Buffalo, New York, where a similar action brought by the United States was pending. The Government case was ultimately settled by the entry of a consent decree;1 after the two private actions had been consolidated, the District Court granted a motion to dismiss the complaints. We therefore take the well-pleaded facts as true.2

Five of the respondents are Canadian motor carriers engaged in the transportation of freight between the United States and Canada. They are subject to regulation by the Ontario Highway Transport Board, and by the Interstate

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Commerce Commission (ICC). They are all members of the Niagara Frontier Tariff Bureau, Inc. (NFTB), which is also a defendant. NFTB is a nonprofit corporation organized to engage in collective ratemaking activities pursuant to an agreement filed with and approved by the ICC.3

Petitioners are corporations that have utilized respondents' services to ship goods between the United States and Canada for many years. In their complaints, they allege that, at least as early as 1966 and continuing at least into 1981, respondents engaged in a conspiracy

to fix, raise and maintain prices and to inhibit or eliminate competition for the transportation of freight by motor carrier between the United States and the Province of Ontario, Canada, without complying with the terms of the NFTB agreement and by otherwise engaging in conduct that either was not or could not be approved by the ICC.4

The complaints allege five specific actions in furtherance of this conspiracy. First, senior management officials of the NFTB used a "Principals Committee," which was not authorized by the NFTB agreement, to set rates and to inhibit competition.5 Second, respondents set and controlled NFTB rate levels without complying with the notice, publication, public hearing, and recordkeeping requirements of the NFTB agreement and ICC regulations.6 Third, respondents planned threats, retaliation, and coercion against NFTB members to inhibit independent actions.7 Fourth, respondents actually used pressures, threats, and retaliation to interfere

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with independent actions.8 Finally, still in furtherance of the conspiracy, respondents filed tariffs [106 S.Ct. 1925] with the ICC.9

Because of respondents' unlawful conduct, the complaints continue, petitioners and the members of the large class of shippers that they represent have paid higher rates for motor carrier freight transport than they would have paid in a freely competitive market.10 They seek treble damages measured by that difference, as well as declaratory and injunctive relief.

The legal theory of the complaints is that respondents' conspiracy is not exempted from a private antitrust, treble damages action even though the rates that respondents charged were filed with the ICC, as required by law. The complaints note that the ICC requires motor carriers to file tariffs containing all their rates, to make the tariffs available for public inspection, and to give advance notice of any changes in the filed rates.11 Although the ICC has the power to determine those rates, the rates are set by the carriers, not the ICC, in the first instance.12 The Reed-Bulwinkle Act, enacted in 1948, expressly authorizes the ICC to grant approval to agreements establishing rate bureaus for the purpose of setting rates collectively.13 The joint Betting of rates pursuant to such agreements is exempted from the antitrust laws, but the statute strictly limits the exemption to actions that conform to the terms of the agreement approved by the

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ICC.14 In this case, according to the theory of the complaints, the activities of respondents were not authorized by the NFTB agreement; hence the alleged conspiracy was not exempt from the antitrust laws, and, indeed, blatantly violated those laws.

Under the plain language of the relevant statutes, it would appear that petitioners have alleged a valid antitrust action. The stated activities are clearly within the generally applicable language of the antitrust laws;15 nothing in the language of the Interstate Commerce Act, moreover, necessarily precludes a private antitrust treble damages remedy for actions that are not specifically immunized within the terms of the Reed-Bulwinkle Act.16

The District Court nevertheless dismissed the complaints on the authority of the Keogh case. 596 F.Supp. 153 (WDNY 1984). The Court of Appeals for the Second Circuit affirmed insofar as the District Court's judgment dismissed the claims for treble damages based on respondents' filed rates, but remanded for a further hearing to determine whether petitioners are entitled to injunctive relief and to give them an opportunity to amend their complaints to state possible claims for damages not arising from the filed tariffs. 760 F.2d 1347 (1985). We granted certiorari to consider whether the rule of the Keogh case was correctly applied in barring a treble damages action based on the filed tariffs, and,

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[106 S.Ct. 1926] if so, whether that case should be overruled. 474 U.S. 815 (1985).

II

In Keogh, as in this case, a shipper's complaint alleged that rates filed with the ICC by the defendants had been fixed pursuant to an agreement prohibited by the Sherman Act. The rates had been set by an agreement among executives of railroad companies "which would otherwise be competing carriers," 260 U.S. at 160. They were "higher than the rates would have been if competition had not been thus eliminated." Ibid. The shipper claimed treble damages measured by the difference between the rates set pursuant to agreement and those that had previously been in effect.

In their special plea, defendants averred that every rate complained of had been filed with the ICC and that, after hearings in which Keogh...

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