658 F.2d 1256 (9th Cir. 1981), 79-4266, Murphy Tugboat Co. v. Crowley

Docket Nº79-4266.
Citation658 F.2d 1256
Party NameMURPHY TUGBOAT COMPANY, Plaintiff-Appellant, v. Thomas B. CROWLEY; Shipowners & Merchants Towboat Company, Ltd,; Bay Cities Transportation Company; Harbor Tug & Barge Company; Tug Sea Cloud, Inc.; Tug Sea Fox, Inc.; Tug Sea Horse, Inc.; Tug Sea King, Inc.; Tug Sea Lark, Inc.; Tug Sea Lion, Inc.; Tug Sea Prince, Inc.; Tug Sea Robin, Inc.; Tug Sea Ro
Case DateMay 11, 1981
CourtUnited States Courts of Appeals, Court of Appeals for the Ninth Circuit

Page 1256

658 F.2d 1256 (9th Cir. 1981)

MURPHY TUGBOAT COMPANY, Plaintiff-Appellant,

v.

Thomas B. CROWLEY; Shipowners & Merchants Towboat Company,

Ltd,; Bay Cities Transportation Company; Harbor Tug & Barge

Company; Tug Sea Cloud, Inc.; Tug Sea Fox, Inc.; Tug Sea

Horse, Inc.; Tug Sea King, Inc.; Tug Sea Lark, Inc.; Tug Sea

Lion, Inc.; Tug Sea Prince, Inc.; Tug Sea Robin, Inc.; Tug

Sea Rover, Inc.; Tug Valiant, Inc.; Tug Trojan, Inc.; Tug

Atlas, Inc.; Tug Sea Wolf, Inc.; Crowley Launch & Tugboat

Company; Cary-Davis Tug & Barge Company and Long Beach

Tugboat Company, Inc., Defendants-Appellees.

No. 79-4266.

United States Court of Appeals, Ninth Circuit

May 11, 1981

Argued and Submitted Jan. 12, 1981.

As Amended on Denial of Rehearing and Rehearing En Banc Oct. 15, 1981.

Page 1257

Ronald Lovitt, Lovitt & Hannan, Inc., San Francisco, Cal., argued, for plaintiff-appellant; Robert L. Palmer, Martori, Meyer, Henricks & Victor, Phoenix, Ariz., Henry I. Bornstein, San Francisco, Cal., on brief.

Kristina M. Hansen, San Francisco, Cal., argued, for defendants-appellees; Richard J. Archer, Sullivan, Jones & Archer, San Francisco, Cal., on brief.

Appeal from the United States District Court for the Northern District of California.

Before WALLACE and POOLE, Circuit Judges, and SMITH, [*] District Judge.

WALLACE, Circuit Judge:

In this treble damages antitrust action pursuant to section 4 of the Clayton Act, 15 U.S.C. § 15, Murphy Tugboat Company appeals from a judgment n. o. v. in favor of defendant competitor tugboat companies. We affirm.

I

Defendants Shipowners & Merchants Towboat Company (Red Stack) and Bay Cities Transportation Company (Bay Cities) have been long established in the ship assisting and ship towing business in San

Page 1258

Francisco Bay and its tributaries. Defendant Crowley Maritime Corporation is a holding company for the two tugboat companies. Defendant Thomas B. Crowley was the principal officer of and had substantial ownership interest in each of these companies. Plaintiff Murphy Tugboat Company (Murphy) entered the ship assisting business in the fall of 1971. It remained in business until September 1975.

Ship assisting is the providing of tugs to aid vessels in docking or undocking. Although some ships under some circumstances can dock or undock without the use of tugs, they frequently require the assistance of one or more tugs. Tugs also perform "flat tows," moving vessels that are not under power.

From 1971 to 1975 Red Stack and Bay Cities performed at least 70% of the tug assisted docking and undocking in San Francisco Bay (excluding military and other proprietary operations). Bay Cities, operating small tugs, served primarily small vessels vessels of less than 14,000 net tons. It charged a flat rate per tug. Red Stack, operating larger tugs, usually served larger vessels. It used a grid tariff that took into account the size of the vessel and the length of the ship assist move. This grid tariff generally produced higher charges.

For some years prior to Murphy's entry into the market, Red Stack and Bay Cities had a policy of refusing, except in emergencies, to provide service to a vessel that was being assisted by tugs of another company. Red Stack and Bay Cities justified this policy in terms of the hazards of divided responsibility in ship handling. However, other companies under common control with Red Stack and Bay Cities, but operating in different harbors, did not have such a policy. There was evidence before the jury that large vessel and flat tow customers were deterred from hiring a Murphy tug by the knowledge that if the need for additional tugs arose during the operation, they would not be available.

Most docking and undocking requires the services of an inland pilot. The masters of Red Stack tugs were licensed inland pilots. When Red Stack tugs assisted a vessel, the master of one of the tugs would, at the vessel's request, serve as pilot. Red Stack made no extra charge for this service, but the Red Stack employee pilot collected a fee from the vessel. That fee was set by agreement between Red Stack and the Red Stack Pilots' Association (RSPA).

The jury awarded damages of $700,000 against several defendants for violation of section 2 of the Sherman Act, 15 U.S.C. § 2, predicated on the boycott of ships making use of the tugs of other companies. The jury also awarded $100,000 against Red Stack for violation of section 1 of the Sherman Act, 15 U.S.C. § 1, by virtue of the RSPA agreement. The district judge granted judgment n. o. v. on the section 1 claim on the basis that the RSPA agreement was immune under the labor exemption of the Clayton Act, 15 U.S.C. § 17, and under the theory that a corporation and its employees cannot conspire to restrain competition within the meaning of section 1 of the Sherman Act. In addition, the district judge found that the jury damages award under section 1 was unsupported by the evidence. Judgment n. o. v. was granted on the section 2 claim, involving the boycott of ships assisted by other companies' tugs, because the district judge found that there was insufficient evidence supporting Murphy's damages theory on this claim. Murphy Tugboat Co. v. Shipowners & Merchants Towboat Co., 467 F.Supp. 841 (N.D.Cal. 1979).

II

In asserting its section 1 claim, Murphy relies on the fact that when a Red Stack pilot was used, the fees, as fixed by the RSPA agreement, were lower than the fees otherwise charged by pilots in the San Francisco Bay area. Murphy argues that this agreement was anticompetitive and that Murphy was injured thereby because the Red Stack package price, including tugs and pilot fee, was lower as a result of the agreement than it otherwise would have been. If the Red Stack package price had been higher, Murphy contends that it would

Page 1259

have been able either to have charged a higher price itself, while maintaining its market share, or to have maintained its price thereby obtaining a larger market share.

We conclude that if Murphy was injured by the RSPA agreement it was not "by reason of anything forbidden in the antitrust laws ...." 15 U.S.C. § 15. 1 By keeping pilots on its payroll as part of its five man tugboat crews, Red Stack was indirectly able to make available to its customers pilot services at discount rates. Thus, the RSPA agreement amounts to an indirect subsidy given by Red Stack to its customers, at a cost to Red Stack of the wages of its pilot-employees.

Because Murphy did not itself provide pilot services, it is not in a position to, and does not, complain that it was injured by the RSPA fee, except as that fee was perceived by customers as a component of Red Stack's package...

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46 practice notes
  • 78 Cal.App.4th 1368, B136095, PMC, Inc. v. Kadisha
    • United States
    • California California Court of Appeals
    • 14 Marzo 2000
    ...9 [156 Cal.Rptr. 375]; Murphy Tugboat v. Shipowners & Merchants Towboat (N.D.Cal. 1979) 467 F.Supp. 841, 852, affd. (9th Cir. 1981) 658 F.2d 1256; 18B Am.Jur.2d, supra, Corporations, § 1877; 3A Fletcher Cyclopedia of the Law of Private Corporations (perm. rev. ed. 1994) § 1135.) As the ......
  • Retirement Housing Group Foundation v. Fuld, 091112 CAAPP2, B230243
    • United States
    • California California Court of Appeals
    • 11 Septiembre 2012
    ...9 [156 Cal.Rptr. 375]; Murphy Tugboat v. Shipowners & Merchants Towboat (N.D.Cal. 1979) 467 F.Supp. 841, 852, affd. (9th Cir. 1981) 658 F.2d 1256; 18B Am.Jur.2d, supra, Corporations, § 1877; 3A Fletcher Cyclopedia of the Law of Private Corporations (perm. rev. ed. 1994) § 1135.).... In ......
  • 590 F.Supp. 561 (D.Ariz. 1984), Civ. 80-251, United States v. ACB Sales & Service, Inc.
    • United States
    • Federal Cases United States District Courts 9th Circuit District of Arizona
    • 19 Junio 1984
    ...Murphy Tugboat Company, Ltd. v. Shipowners & Merchants Towboat Co., Ltd., 467 F.Supp. 841, 852 (N.D.Cal.1979), aff'd, 658 F.2d 1256, 1257 (9th Cir.1981), cert. denied, 455 U.S. 1018, 102 S.Ct. 1713, 72 L.Ed.2d 135 (1982). "Personal liability must be founded upon specific acts by th......
  • The Divergence of Corporate Officer Liability Doctrine Under Patent and Copyright Law
    • United States
    • American Business Law Journal Nbr. 52-3, September 2015
    • 1 Septiembre 2015
    ...plaintiff may pursue the22See Murphy Tugboat Co. v. Shipowners & Merchants Towboat Co., 467 F. Supp. 841,852 (N.D. Cal. 1979), aff’d, 658 F.2d 1256 (9th Cir. 1981) (“Courts have . . . consistentlystated that a corporate executive will not be held vicariously liable, merely by virtue of ......
  • Free signup to view additional results
45 cases
  • 78 Cal.App.4th 1368, B136095, PMC, Inc. v. Kadisha
    • United States
    • California California Court of Appeals
    • 14 Marzo 2000
    ...9 [156 Cal.Rptr. 375]; Murphy Tugboat v. Shipowners & Merchants Towboat (N.D.Cal. 1979) 467 F.Supp. 841, 852, affd. (9th Cir. 1981) 658 F.2d 1256; 18B Am.Jur.2d, supra, Corporations, § 1877; 3A Fletcher Cyclopedia of the Law of Private Corporations (perm. rev. ed. 1994) § 1135.) As the ......
  • Retirement Housing Group Foundation v. Fuld, 091112 CAAPP2, B230243
    • United States
    • California California Court of Appeals
    • 11 Septiembre 2012
    ...9 [156 Cal.Rptr. 375]; Murphy Tugboat v. Shipowners & Merchants Towboat (N.D.Cal. 1979) 467 F.Supp. 841, 852, affd. (9th Cir. 1981) 658 F.2d 1256; 18B Am.Jur.2d, supra, Corporations, § 1877; 3A Fletcher Cyclopedia of the Law of Private Corporations (perm. rev. ed. 1994) § 1135.).... In ......
  • 590 F.Supp. 561 (D.Ariz. 1984), Civ. 80-251, United States v. ACB Sales & Service, Inc.
    • United States
    • Federal Cases United States District Courts 9th Circuit District of Arizona
    • 19 Junio 1984
    ...Murphy Tugboat Company, Ltd. v. Shipowners & Merchants Towboat Co., Ltd., 467 F.Supp. 841, 852 (N.D.Cal.1979), aff'd, 658 F.2d 1256, 1257 (9th Cir.1981), cert. denied, 455 U.S. 1018, 102 S.Ct. 1713, 72 L.Ed.2d 135 (1982). "Personal liability must be founded upon specific acts by th......
  • 704 F.2d 1449 (9th Cir. 1983), 81-4668, Rickards v. Canine Eye Registration Foundation, Inc.
    • United States
    • Federal Cases United States Courts of Appeals Court of Appeals for the Ninth Circuit
    • 3 Mayo 1983
    ...v. Shipowners & Merchants Towboat Co., 467 F.Supp. 841, 863 (N.D.Cal.1979), aff'd sub nom. Murphy Tugboat Co. v. Crowley, Page 1453 658 F.2d 1256 (9th Cir.1981), and appellees were thus entitled to judgment on the damages issue as a matter of law. See Ron Tonkin Gran Turismo, Inc. v. Fi......
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1 books & journal articles
  • The Divergence of Corporate Officer Liability Doctrine Under Patent and Copyright Law
    • United States
    • American Business Law Journal Nbr. 52-3, September 2015
    • 1 Septiembre 2015
    ...plaintiff may pursue the22See Murphy Tugboat Co. v. Shipowners & Merchants Towboat Co., 467 F. Supp. 841,852 (N.D. Cal. 1979), aff’d, 658 F.2d 1256 (9th Cir. 1981) (“Courts have . . . consistentlystated that a corporate executive will not be held vicariously liable, merely by virtue of ......