American Ass'n of Cruise Passengers, Inc. v. Carnival Cruise Lines, Inc., 88-7229

• Citation: 911 F.2d 786
• Decision Date: 24 August 1990
• Docket Number: No. 88-7229,88-7229
• Parties: , 286 U.S.App.D.C. 44, 59 USLW 2179, 1990-2 Trade Cases 69,153 AMERICAN ASSOCIATION OF CRUISE PASSENGERS, INC., Appellee, v. CARNIVAL CRUISE LINES, INC., et al., Appellants.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 786

911 F.2d 786

1990 A.M.C. 2705, 286 U.S.App.D.C. 44,

59 USLW 2179,

1990-2 Trade Cases 69,153

AMERICAN ASSOCIATION OF CRUISE PASSENGERS, INC., Appellee, v. CARNIVAL CRUISE LINES, INC., et al., Appellants.

No. 88-7229.

United States Court of Appeals District of Columbia Circuit.

Argued Nov. 16, 1989.

Decided Aug. 24, 1990.

J. Michael Cavanaugh, with whom David C. Nolan, Stuart S. Dye, and Mary Boney Denison for Kloster Cruise Ltd., Mark E. Warren and Phillip H. Rudolph, for The Peninsular and Oriental Steam Navigation Co., et al., David L. Roll and Virginia L. White-Mahaffey for Carnival Cruise Lines, Inc., Burton A. Schwalb for Marriott Corp. d/b/a Sun Line Cruises, Sanford M. Litvack, Royal Caribbean Cruise Line, Inc., Edward Schmeltzer for CLIA, Michael Joseph for Ocean Cruise Lines, Inc., and Edward P. Henneberry for Holland America Line-Westours, Inc., were on the brief for appellants. Paul M. Honigberg for Cruise Lines Intern. Ass'n also entered an appearance, for appellants.

Paul C. Warnke, with whom John G. Calendar and Harold E. Kohn were on the brief, for appellee.

R. Frederic Fisher and Lawrence N. Minch for Transpacific Westbound Rate Agreement, Jeffrey F. Lawrence for The Asia North America Eastbound Rate Agreement and Howard A. Levy, for Gulf-European Freight Ass'n, et al., were on the brief, for Amici Curiae Transpacific Westbound Rate Agreement, et al.

Robert D. Bourgoin, Gen. Counsel, and John C. Cunningham, Atty., Federal Maritime Com'n, were on the brief for Amicus Curiae Federal Maritime Com'n, urging reversal. Robert J. Wiggers, Atty., Dept. of Justice, also entered an appearance, for FMC.

Before MIKVA, SILBERMAN, and D.H. GINSBURG, Circuit Judges.

Opinion for the Court filed by Circuit Judge D.H. GINSBURG.

D.H. GINSBURG, Circuit Judge:

The American Association of Cruise Passengers (AACP), which is a travel agency, brought an antitrust action against several vacation cruise lines and two trade associations, alleging an unlawful boycott agreement among them. The district court denied the defendants' motion to dismiss, which was based upon their assertions that a cruise line is a "common carrier" within the meaning of Sec. 3(6) of the Shipping Act of 1984, 46 U.S.C.App. Sec. 1702(6), and that an agreement to which cruise lines are parties is therefore subject to the exclusive jurisdiction of the Federal Maritime Commission.

We hold that, except to the extent that a cruise calls only at foreign ports, a cruise line is a common carrier under the Shipping Act; to the extent that it is a common carrier, the FMC has exclusive jurisdiction to adjudicate this dispute. With respect to a cruise that calls only at foreign ports, however, the district court has jurisdiction under the Clayton Act. Hence, we affirm in part, and reverse in part.

I. BACKGROUND

The AACP sued various vacation cruise lines, the Cruise Lines International Association, and the American Association of Travel Agents (hereinafter collectively "defendants" or "carriers"), alleging that they engaged in a concerted refusal to deal with the AACP, in violation of federal and state antitrust laws. In its complaint, the AACP defines "vacation cruises" to "include but not be limited to any travel by a person as a passenger on a cruise ship for vacation purposes." It seeks treble and punitive damages, as well as injunctive relief, under Secs. 4 and 16 of the Clayton Act, 15 U.S.C. Secs. 15, 26, under the Maryland Antitrust Act, Commercial Law, Sec. 11-204, and on the common law claim that the defendants' conduct constituted a tortious interference with its business relationships.

The carriers filed motions to dismiss on the ground that the district court lacks jurisdiction over the federal anti-trust aspect of this dispute (and hence over the state law claims pendent thereto). Section 7(c)(2) of the Shipping Act provides: "No person may recover damages ... or obtain injunctive relief under [the Clayton Act] for conduct prohibited by [the Shipping Act]." 46 U.S.C.App. Sec. 1706(c)(2). The carriers asserted that the Shipping Act prohibits a boycott of the type that the AACP alleges--they pointed specifically to Sec. 10(c)(1) of the Shipping Act, which prohibits "two or more common carriers" from engaging in a "boycott or tak[ing] any other concerted action resulting in an unreasonable refusal to deal," id. Sec. 1709(c)(1)--and that the antitrust claim is therefore subject to the exclusive jurisdiction of the FMC. The AACP opposed the motion to dismiss, arguing that a cruise line is not a "common carrier" within the meaning of Sec. 3(6) of the Shipping Act, and is therefore not subject to the prohibition of boycotts therein.

The district court denied the carriers' motion to dismiss, holding that a cruise line is not a common carrier under the Act. The court stayed the proceedings, however, pending our review of Petchem, Inc. v. Canaveral Port Authority, 23 Ship.Reg.Rep. (P & F) 974, 983-85 (1986), in which the FMC had held that a ship sailing from and to Europe, which let passengers disembark temporarily at Port Canaveral, Florida for a visit to Disney World, and a ship offering voyages from Port Canaveral to the Bahamas, are common carriers. The Commission based this decision upon several factors: a cruise comes within the common meaning of "transportation," i.e., the conveyance of cargo or passengers; the Act "plainly include[s] carriers of passengers"; the Congress did not distinguish between one-way and round-trip passenger service, nor exclude trips solely for pleasure; and, because there is no longer a significant amount of one-way passenger service at sea, excluding vacation cruises from the coverage of the Act "would amount to an abandonment of [the FMC's] responsibilities" thereunder. Id. at 984-85. As it turned out, however, we did not, in Petchem, reach the issue of whether a cruise line is a common carrier. Petchem, Inc. v. FMC, 853 F.2d 958, 961 (C.A.D.C.1988).

Following our non-decision in Petchem, the district court returned to this case and granted defendant Cunard Lines' motion to dismiss. Based upon its finding that "Cunard is primarily in the business of providing transportation, in contrast to round-trip cruises," the court decided that it is a common carrier under the Act. The court thus held that the FMC has exclusive jurisdiction over the claims against Cunard.

The district court also reaffirmed its decision that, because the other defendants are not common carriers under the Act, the court has jurisdiction over the claims against them. At the same time, the court certified the remaining defendants' application for interlocutory appeal of this issue, pursuant to 28 U.S.C. Sec. 1292.

The carriers argue that the plain language and the legislative history of the Shipping Act, and the FMC's consistent interpretation of the Act (and of its predecessor, the Shipping Act of 1916), all lead to the conclusion that a cruise line is a common carrier. They also assert that when the Congress passed the 1916 and the 1984 Acts, it adopted the common law, under which a cruise line was held to be a common carrier. Lastly, the carriers contend that the approach taken by the district court, in which a cruise line is a common carrier if it is "primarily involved in point-to-point," as opposed to round-trip, transportation, creates just the kind of jurisdictional dichotomy that the Congress sought to avoid when it passed the Shipping Act.

The Commission, as amicus curiae, supports the carriers' claim that cruise lines are common carriers, and contends that its decision to that effect in Petchem is entitled to deference under Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837, 842-45, 104 S.Ct. 2778, 2781-83, 81 L.Ed.2d 694 (1984).

II. ANALYSIS

Without deciding how much, if any, deference we owe to the Commission's interpretation of the term "common carrier," we hold that a cruise ship is a common carrier under the Shipping Act if it travels between a U.S. and a foreign port.

A. Standard of Review

Our decision addresses only issues of law. Therefore, we do not defer to the views of the district court. See, e.g., Molerio v. FBI, 749 F.2d 815, 820 (D.C.Cir.1984).

That a cruise line is a common carrier under the Shipping Act is a jurisdiction-enlarging position, to which the Chevron rule of deference to the agency's statutory interpretation may or may not apply. See, e.g., Business Roundtable v. SEC, 905 F.2d 406, 408 (D.C.Cir.1990) (collecting cases that discuss whether an agency's interpretation of statute "delimiting its jurisdiction" is entitled to deference). We need not decide how much deference to accord the FMC's decision in Petchem, however, because after an independent examination of the issue before us, we arrive at essentially the same conclusion as does the Commission.

B. U.S.-Foreign Cruises

Section 3(6) defines "common carrier" to mean:

a person holding itself out to the general public to provide transportation by water of passengers or cargo between the United States and a foreign country for compensation that--

(A) assumes responsibility for the transportation from the port or point of receipt to the port or point of destination, and

(B) utilizes, for all or part of that transportation, a vessel operating on the high seas or the Great Lakes between a port in the United States and a port in a foreign country....

1. Textual Arguments

Although Sec. 3(6) does not expressly mention cruise lines, the natural reading of that provision leads to the conclusion, contra the district court, that a U.S.-foreign cruise ship is a common carrier regardless of whether it is engaged in one-way or round-trip transportation.

First. A cruise line clearly "hold[s] itself out to the general public to provide transportation by water." Nothing on the face of the Shipping Act suggests that the Congress equated "transportation" with "point-to-point" conveyance, and thereby excluded cruises. Moreover, the reference to "pas...