Dreisbach v. Murphy

• Decision Date: 08 October 1981
• Docket Number: 80-4009,Nos. 79-4775,s. 79-4775
• Parties: 1981-2 Trade Cases 64,322 Ronald T. DREISBACH, individually and dba Dreisbach Enterprises, Inc., et al., Plaintiffs-Appellants, v. John MURPHY, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 720

658 F.2d 720

1981-2 Trade Cases 64,322

Ronald T. DREISBACH, individually and dba Dreisbach Enterprises, Inc., et al., Plaintiffs-Appellants, v. John MURPHY, et al., Defendants-Appellees.

Nos. 79-4775, 80-4009.

United States Court of Appeals Ninth Circuit.

Argued and Submitted May 13, 1981.

Decided Oct. 8, 1981.

Chris G. Gasparich, Crosby, Heafey, Roach & May, Oakland, Cal., for plaintiffs-appellants.

Richard A. Ardoin, Bronson, Bronson, & McKinnon, Nathan Lane, III, Graham & James, R. Frederic Fisher, Llick, McHose & Charles, James D. Boughey, Dorr, Cooper & Hays, San Francisco, Cal., for defendants-appellees.

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

Before MARKEY, ^* Chief Judge, United States Court of Customs and Patent Appeals, MERRILL and FARRIS, Circuit Judges.

MARKEY, Chief Judge.

Appellants (collectively, Dreisbach) appeal from an order of the District Court for the Northern District of California granting summary judgment and dismissing an antitrust action against Farrell Lines, Inc., Columbus Line, Inc., and Pacific Australia Direct Line, Inc. (collectively, Carriers), and from an order granting summary judgment and dismissing the action against Weighmaster Murphy, Inc., Murphy Transportation Company, Inc., John Murphy, and Charles Murphy (collectively, Murphy). We affirm.

Background

Carriers transport frozen meat in large containers from Australia and New Zealand to Pacific Coast ports in the United States. Carrier-owned containers have been likened to "detachable stowage compartments of the ship" wherein cargo is stowed "utilizing stevedoring practices and materials analogous to those employed in traditional on board stowage." Matsushita Electric Corp. v. S. S. Aegis Spirit, 414 F.Supp. 894, 907 (W.D.Wash.1976).

Federal law requires inspection of imported meat, necessitating the unloading or "devanning" of the containers, each holding up to 18 tons. Before 1972, containers were devanned at the pier. That was costly and unsatisfactory. Cartons of meat were removed and laid out, waiting arrival of a federal meat inspector and adding to pierside congestion. The inspector would randomly select cartons, take them to an inspection facility, inspect the meat and return, sometimes the following day. Only then could meat be taken from the pier. Meanwhile it sat, thawing and sometimes spoiling, in the unrefrigerated terminal.

In 1972, Murphy opened a devanning facility three miles from the piers used by Carriers in Los Angeles. For a fee ("devanning allowance"), Murphy picks up containers at the piers, takes them to his refrigerated facility, "unstuffs" them, prepares the cartons for inspection, and promptly returns the empty containers to the pier.

Because ocean carriers have the devanning responsibility, each contracts with an agent in each port to devan its containers and pays a devanning allowance. Importers have the inspection responsibility and pay for the inspection. Importers have the right to designate the site for inspection. Though economics dictate a combined inspection and devanning facility, sufficient importer support may influence carriers to select a devanning/inspection facility preferred by the importers.

Since 1972, Carriers and importers have used only Murphy's devanning/inspection facility in Los Angeles. In August, 1976, Dreisbach decided to open a competing facility, proposing to charge Carriers the same devanning allowance charged by Murphy. Dreisbach's facility would be 18 miles from the piers.

According to Dreisbach's complaint: (1) officials of two Carriers assured Mr. Dreisbach in September, 1976, that they would use his services; (2) relying on those assurances, he expended large sums of money in leasing and outfitting a facility; (3) the two Carriers reneged; and (4) all three Carriers conspired to "boycott" Dreisbach's services.

On April 21, 1978, Dreisbach sued Carriers and Murphy. The amended complaint of December 13, 1978, contained allegations under sections 1 and 2 of the Sherman Act (Counts 1-3), section 5 of the Federal Trade Commission Act (Count 4), California antitrust and unfair competition statutes (Counts 5 and 6), and California contract law (Counts 7-9). Dreisbach sought only money damages for past and completed unlawful conduct. After substantial discovery, Carriers and Murphy moved for summary judgment seriatim. At a hearing on the motion, Dreisbach abandoned all but an assertion that Carriers' agreement to use only Murphy's devanning services adversely affected his opportunities to engage in inspection and transportation of the meat delivered by Carriers. The district court granted the motions.

Though the court's order of October 22, 1979, granting Carriers' motion, does not state reasons, the transcript makes clear the court's view that the alleged conspiracy, if established by competent evidence, ¹ would be within the antitrust exemption conferred by Federal Maritime Commission (FMC) approval of certain Conference Agreements, Agreements 10012 and 10252, under section 15 of the Shipping Act, 46 U.S.C. § 814 (1976). ²

Based on the initial order, Murphy moved for summary judgment. On December 17, 1979, the court granted that motion, stating in relevant part:

The Court finds that the immunity which covers the alleged agreement between defendants Farrell Lines, Inc., Columbus Lines, Inc., and Pacific Australia Direct, Inc. under the Shipping Act of 1916 also extends to defendants John Murphy, Charles Murphy, Weighmasters Murphy, Inc., and Murphy Transportation Co., Inc. in order to protect and further the legislative purpose of such Act.

Approved FMC Agreements

The Carriers are parties to two Conference Agreements filed under section 15 of the Shipping Act and approved by the FMC. Agreement 10012, approved in March, 1973, governs "the transportation of freight from ports in Australia, and inland points via such ports, to ports on the Pacific Coast of the United States, and inland points via such ports." It provides in pertinent part:

1. Consultation and Agreement; Notification, Independent Action. The parties may confer with each other and discuss together, from time to time, at the request of any party, any subject of common interest in the trade, including rates, charges, classifications, practices, brokerage, equalization, absorption, transshipment, and overland and/or other inland movements, and tariff matters relating and/or pertaining to any of the said subjects, and rules and regulations to govern the parties' conduct in connection therewith. Subject to the limitations contained in the second paragraph of this Article 1, the parties may agree upon any such subject and/or matter, to be observed by each of them respectively, in the trade.... (Emphasis added)

Agreement 10252, approved in December, 1976, governs the trade from New Zealand (One Carrier does not participate in the New Zealand trade and is not a party to that Agreement). Article 1 of Agreement 10252 is substantially identical with Article 1 of Agreement 10012.

The Issues

(1) Whether the case should be referred to the FMC under the doctrine of primary jurisdiction.

(2) Whether the district court correctly held that FMC approval of Agreements 10012 and 10252 exempted the Carriers from liability in damages under the federal antitrust laws for activities alleged by Dreisbach.

(3) Whether the district court correctly held that FMC approval of Agreements 10012 and 10252 exempted Murphy from liability under the federal antitrust laws for activities alleged by Dreisbach.

(4) Whether the district court correctly held that it lacked jurisdiction to entertain Dreisbach's complaint under § 5 of the Federal Trade Commission Act, 15 U.S.C. § 45 (1976).

OPINION

(1) Referral to FMC

At the request of this court, the parties separately briefed the question of whether this case should be referred to the FMC, under the doctrine of primary jurisdiction. Each party strenuously and vigorously argues against referral. Each, however, in an exercise of caution, says referral should be ordered if the court would otherwise, on this record, decide for the other party.

Dreisbach says referral is improper because he seeks only money damages for past conduct and an award would thus not interfere with any future action of the FMC, citing Litton Systems, Inc. v. Southwestern Bell Tel. Co., 539 F.2d 418, 423 (5th Cir. 1976), and Allied Air Freight, Inc. v. Pan American World Airways, Inc., 393 F.2d 441, 447-49 (2d Cir. 1968), cert. denied, 393 U.S. 846, 89 S.Ct. 131, 21 L.Ed.2d 117 (1968), and because "the FMC cannot immunize conduct whose sole aim is to destroy competition in markets unaffected by its regulatory control". Carriers say referral is not required because their conduct clearly is authorized as a matter of law. ³

There is no fixed formula for applying the doctrine of primary jurisdiction. United States v. Western Pacific Railroad, 352 U.S. 59, 64, 77 S.Ct. 161, 165, 1 L.Ed.2d 126 (1956). Reference to an administrative agency may be appropriate if an issue before the court "involves technical questions of fact uniquely within the expertise and experience of an agency," or if reference would facilitate uniformity of regulation, Nader v. Allegheny Airlines, 426 U.S. 290, 304, 96 S.Ct. 1978, 1987, 48 L.Ed.2d 643 (1976), or if the agency's determination would materially aid the court's resolution of an issue, Ricci v. Chicago Mercantile Exchange, 409 U.S. 289, 302, 93 S.Ct. 573, 580, 34 L.Ed.2d 525 (1973). There are here no questions of fact, technical or otherwise. There is no indication that uniformity of regulation, or any future FMC action, is in any manner implicated.

Though reference to FMC would escape the need to decide the issue, even that aid would be but temporary if the loser before the FMC should elect to appeal its decision to the court. Reference to FMC would thus not truly aid our resolution of the controversy presented,...