838 F.2d 1445 (6th Cir. 1988), 84-3653, Pinney Dock and Transport Co. v. Penn Cent. Corp.

Docket Nº:(84-3653), Plaintiff-Cross Appellee (84-3654),
Citation:838 F.2d 1445
Party Name:PINNEY DOCK AND TRANSPORT CO., Plaintiff-Appellant
Case Date:February 03, 1988
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit

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838 F.2d 1445 (6th Cir. 1988)


(84-3653), Plaintiff-Cross Appellee (84-3654),


Litton Industries, Inc.; Litton Systems, Inc.; Litton

Great Lakes Corp.; and Erie Marine, Inc.,

Plaintiffs-Appellees (84-3876),

Plaintiffs-Cross Appellants (84-3877),


PENN CENTRAL CORP.; the Chessie System Co.; N & W Railway

Co.; NWS, Inc.; and Bessemer & Lake Erie Railroad Co.,

Defendants-Appellees (84-3653), Defendants-Cross Appellants

(84-3654), Defendants-Appellants (84-3876), Defendants-Cross

Appellees (84-3877),

Chesapeake & Ohio Railroad Co.; Baltimore & Ohio Railroad

Co.; and CSX Corp., Defendants-Appellants

(84-3876), Defendants-Cross Appellees (84-3877).

Nos. 84-3653, 84-3654, 84-3876 and 84-3877.

United States Court of Appeals, Sixth Circuit

February 3, 1988

Argued Oct. 29, 1985.

Rehearing and Rehearing En Banc Denied April 13, 1988.

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Richard T. Colman, argued, Robert G. Abrams, Thomas N. Heyer, Howrey & Simon, Washington, D.C., Harry C. Nester, Hahn, Loeser, Freedheim, Dean and Wellman, Cleveland, Ohio, for Pinney Dock & Transport and Litton.

Kenneth N. Hart, Donovan, Leisure, Newton & Irvine, New York City, for Penn Central.

Richard J. Flynn, argued, Stephen S. Hill, Sidley & Austin, Washington, D.C., R. Merinda Wilson, Thomas H. Yancey, for Norfolk & Western Ry.

Kenneth C. Anderson, Lead Counsel, Squire, Sanders & Dempsey, Washington, D.C., Sean F. Boland, James V. Dick, Timothy W. Bergin, for Bessemer & Lake Erie R. Co.

Anthony J. Celebrezze, Jr., Atty. Gen. of Ohio, Kenneth James, Doreen C. Johnson, Columbus, Ohio, amicus curiae--State of Ohio.

William C. Leiper, John D. Morrison, Monroeville, Pa., for Bessemer & Lake Erie R.R. Co.

Lawrence R. Velvel, Memel, Jacobs, Pierno, Gersh & Ellsworth, Bruce J. Ennis, Ennis, Friedman, Bersoff & Ewing, Washington, D.C., amicus curiae for C.D. Ambrosia Trucking Co., David W. Reaney, Reaney Dock Co.

John Doar (Lead Counsel) John Doar Law Offices, New York City, Stephen J. Pollak, Richard T. Conway, Stephen J. Hadley, Shea & Gardner, Washington, D.C., for Baltimore & Ohio R.R., Chesapeake & Ohio Ry. & CSX Corp.

Donald L. Flexner, Richard McMillan, Jr., Crowell & Moring, Washington, D.C., for other petitioners.

Before ENGEL and KENNEDY, Circuit Judges, and HIGGINS, [*] District Judge.

ENGEL, Circuit Judge.

These consolidated antitrust cases are before the court pursuant to 28 U.S.C. Sec. 1292(b) after a panel of this court granted permission on August 14, 1984 to appeal several orders of the United States District Court for the Northern District of Ohio.

Plaintiffs originally commenced these separate actions in district court, seeking treble damages and injunctive relief for injuries to their business and property allegedly caused by defendants' violations of sections 1 and 2 of the Sherman Act, 15 U.S.C. Secs. 1 and 2; section 3 of the Clayton Act, 15 U.S.C. Sec. 14; and parallel provisions of Ohio's antitrust laws under the Valentine Act, Ohio Rev.Code Secs. 1331.01-02, 1331.04, 1331.06, 1331.08, 1331.12, and 1331.14. Plaintiffs' actions are based on similar allegations that "from at least the mid-1950's" the defendant railroads conspired to restrain trade in, and monopolize, the movement of iron ore by ship across the Great Lakes to docks located on the south shore of Lake Erie, the unloading of these ships at those docks, and the subsequent movement of the ore to steel mills located inland.

The issues certified for interlocutory appeal involve a number of jurisdictional questions, including antitrust immunity under the Interstate Commerce Act, 49 U.S.C. Sec. 10706, application of the Keogh doctrine which bars antitrust damage claims in certain situations, exclusive and primary jurisdiction

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of the Interstate Commerce Commission, standing, statute of limitation/fraudulent concealment under the antitrust laws, and federal preemption of the Ohio antitrust statute of limitations.


A. The Parties

The plaintiffs in this consolidated action are Pinney Dock and Transport Company (Pinney) and Litton Industries, Inc., Litton Great Lakes Corporation, and Erie Marine, Inc., (collectively Litton). Pinney provides dock services at Ashtabula, Ohio, for iron ore and other bulk commodities moving over the Great Lakes by ship. For at least part of the time period relevant to these cases, Litton was engaged in the design and construction of large self-unloading vessels and the operation of these vessels, along with conventional bulker vessels, in the movement of iron ore and other commodities over the Great Lakes. In 1974, however, Litton ceased operating such vessels on the Great Lakes.

The defendants are certain railroad companies, including Penn Central Corporation (Penn Central), Baltimore & Ohio Railroad Company (B & O), Chesapeake & Ohio Railway Company (C & O), CSX Corporation, Chessie Systems Company (Chessie), Norfolk & Western Railway Company (N & W), and Bessemer & Lake Erie Railroad Company (B & LE). 1 The defendant railroad companies are all engaged in the business of providing common carriage of goods and commodities by rail to or from Lake Erie docks. In addition, each of the railroad companies owns or has owned, was affiliated with, or operated one or more of these Lake Erie docks.

B. Historical Background

Pursuant to its authority under the Interstate Commerce Act, 2 the Interstate Commerce Commission (ICC) has for many years regulated the rates set by railroads for the common carriage of goods and commodities by rail to and from Lake Erie. See Iron Ore Rate Cases, 44 I.C.C. 181 (1916), as supplemented, 44 I.C.C. 368 (1917). Under the Act, the carriers themselves initiate rates and include them in tariffs which must be filed with the ICC. 49 U.S.C. Sec. 10762(a)(1). 3 Unless and until suspended, set aside or disapproved, these rates become the lawful rate as between carrier and shipper. 4

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In setting rates under the Act, a carrier may provide interstate transportation services only at the rate specified and the tariff filed with the ICC. Id. Sec. 10761. In addition, a carrier is strictly prohibited from charging any person a different rate for a "like and contemporaneous service in the transportation of a like kind of traffic under substantially similar circumstances." Id. Sec. 10741(a). These provisions reflect one of the preeminent purposes of the Act: the prevention of unjust discrimination in interstate commerce. 5 Differences in rates, classifications, rules, or practices, however, do not violate the anti-discrimination provisions of the Act if they reflect substantive differences in services performed.

Under the Interstate Commerce Act, rail carriers have long been permitted to act jointly in setting rates despite the potential for antitrust liability. Indeed, although the Interstate Commerce Act of 1887 was silent on the issue of collective ratemaking, the ICC condoned the practice even after the enactment of the federal antitrust laws. See In re Trans-Continental Freight Bureau, 77 I.C.C. 252 (1923). 6 Beginning in the 1940's, however, the Department of Justice began enforcing the antitrust laws against related common carriers. In 1944, the State of Georgia brought an action against 21 railroads alleging rate discrimination, antitrust violations and price fixing. This suit culminated in Georgia v. Pennsylvania Railroad, 324 U.S. 439, 65 S.Ct. 716, 89 L.Ed. 1051 (1945), in which the Supreme Court held that a conspiracy "to use coercion in the fixing of rates and to discriminate against Georgia in the rates which are fixed" stated a cause of action under the antitrust laws. Id. at 462, 65 S.Ct. at 728. In so holding, however, the Court emphasized that the State could not directly challenge the continuance of any tariff, since such an action would be within the jurisdiction of the ICC.

Congress responded to this decision in 1948 with the Reed-Bulwinkle Act. 7 This Act specifically authorizes rate bureaus to agree collectively upon "rates ..., classifications, divisions, or rules related to them, or procedures for joint consideration, initiation, publication, or establishment of them...." 49 U.S.C. Sec. 10706(a)(2)(A). This Act further provides that parties to an ICC-approved rate agreement are exempt from the antitrust laws with respect to making and carrying out the agreement. 49 U.S.C. Sec. 10706(a)(2)(A). 8 In addition to the qualified immunity under the Reed-Bulwinkle Act, the Keogh doctrine 9 has long

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protected carriers from antitrust damages based on alleged discriminatory rates which have been approved by the ICC.

Although these protections from the antitrust laws are considerable, an aggrieved party is not without a remedy for injuries inflicted in violation of the Act. The Act permits any person to bring a complaint at any time for violations of the Act. The Commission must investigate the complaint unless the complaint "does not state reasonable grounds for investigation and action." 49 U.S.C. Sec. 11701(b). Also, a person injured by a violation of the Act can seek damages in a civil action or in a proceeding before the ICC. Id. Sec. 11705. In addition to these private remedies, a carrier which willfully violates the Act may be subject to various penalties, fines, and civil damages, as well as other equitable relief, which may be sought by the Government. Id. Secs. 11703, 11901-11907.

C. Factual Background

The defendant railroads in the instant case formed a rate bureau and entered into a collective ratemaking agreement shortly after the passage of the Reed-Bulwinkle Act. This agreement was subsequently approved by the ICC in 1950 pursuant to 49 U.S.C. Sec. 5b (now codified at 49 U.S.C. Sec. 10706). See Eastern Railroads--Agreements, 277 I.C.C....

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