Interface Group, Inc. v. MASS. PORT AUTHORITY

• Decision Date: 31 March 1986
• Docket Number: Civ. A. No. 84-4065-C.
• Citation: 631 F. Supp. 483
• Parties: The INTERFACE GROUP, INC., Plaintiff, v. MASSACHUSETTS PORT AUTHORITY, Defendant.
• Court: U.S. District Court — District of Massachusetts

631 F. Supp. 483

The INTERFACE GROUP, INC., Plaintiff, v. MASSACHUSETTS PORT AUTHORITY, Defendant.

Civ. A. No. 84-4065-C.

United States District Court, D. Massachusetts.

March 31, 1986.

Richard J. Innis, James C. Burling, David Millon, Hale & Dorr, Boston, Mass., for plaintiff.

Scott P. Lewis, and Daniel O. Mahoney, Palmer & Dodge, Paul Johnson, and Richard J. Lettieri, Boston, Mass., for defendant.

MEMORANDUM

CAFFREY, Chief Judge.

This is a civil action brought by the Interface Group, Inc. ("Interface"), a Massachusetts corporation with its principal place of business in Needham, Massachusetts, against the Massachusetts Port Authority ("Massport"). Interface brought this action under Section 16 of the Clayton Act, 15 U.S.C. § 26, seeking injunctive relief against threatened loss or damage by reason of Massport's alleged violations of §§ 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 and 2. Interface also seeks damages and injunctive relief under the Federal Aviation Act, 49 U.S.C. § 1349, the Federal Anti-Head-Tax Act, 49 U.S.C. § 1513, and the Airport and Airway Improvement Act of 1982, 49 U.S.C. § 2210. Lastly, Interface seeks damages and injunctive relief under Mass.Gen.Laws Ann. chs. 93 and 93A, requesting this Court to exercise jurisdiction over these claims by virtue of the doctrine of pendent jurisdiction.

The matter is now before the Court on the defendant Massport's motion to dismiss the complaint, filed pursuant to Fed.R. Civ.P. 12(b)(1) and 12(b)(6). The defendant moves to dismiss Counts I and II, the federal antitrust law claims, on the grounds that those claims are barred by the state action doctrine and that, if they are not so barred, they should be dismissed because the complaint fails to sufficiently allege illegal monopolization or an illegal agreement in restraint of trade. The defendant also moves to dismiss Counts V, VI, and VII of the complaint, the federal aviation law claims, contending that those claims are barred because there is no express or implied right of action under the federal aviation laws and, if they are not barred on that ground, the claims should be dismissed because Interface has failed to allege sufficient facts to state claims under those laws. Lastly, the defendant requests that the Court refuse to exercise pendent jurisdiction over the plaintiff's state law claims, but if the Court should exercise jurisdiction over those claims, the defendant argues that the state law claims also should be dismissed as a matter of law.

This case raises important and difficult questions concerning the amenability to suit of Massport and similar entities under the federal antitrust and aviation laws. After careful consideration of the ably presented arguments on behalf of both parties, I rule that Interface's federal antitrust law claims in Counts I and II should be dismissed on the basis of the state action doctrine; that Interface's claims in Counts V, VI, and VII under the federal aviation laws should be dismissed for lack of an express or implied right of action under those laws; and that Interface's state antitrust claim under Chapter 93 of the Massachusetts General Laws in Count III should be dismissed because, under Massachusetts law, any activities exempt from the federal antitrust laws are also exempt from the state antitrust laws and, as stated above, Interface's claims under the federal antitrust laws are barred by the state action doctrine. Finally, the Court declines to exercise its discretionary pendent jurisdiction over Interface's claim under Chapter 93A of the Massachusetts General Laws.

In deciding this motion to dismiss, the Court has taken all of the allegations of the complaint to be true and has viewed them in the light most favorable to Interface. O'Brien v. DiGrazia, 544 F.2d 543, 545 (1st Cir.1976). The Court recognizes that it would be improper to dismiss any of Interface's claims "unless it appears beyond doubt that Interface could prove no set of facts which would entitle it to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957).

The complaint alleges that, on October 22, 1984, Interface entered into agreements with Trans World Airlines ("TWA") pursuant to which Interface purchased from TWA two L-1011 aircraft (the "aircraft") for a total price of $21 million. Under the agreements, TWA leased back the aircraft from Interface for six months out of every year, May through October, during which period the aircraft were to be operated as part of TWA's regular fleet. During the remainder of the year, November through April, Interface was to use the planes for high-quality, low-cost, regularly scheduled charter flights, primarily between Boston and the Carribean area. The lease has a seven-year term. Interface and TWA also agreed that TWA would provide year-round maintenance, ground service, passenger service, and fueling to the aircraft at Logan Airport in Boston, and that TWA would utilize TWA's facilities, located at Terminal C, in servicing the aircraft.

This arrangement, the complaint alleges, promised to yield significant efficiencies. Use of TWA's ground services facilities and experienced personnel allegedly would allow Interface to obtain superior service at lower cost than could be obtained from the two fixed-base operators ("FBOs") servicing non-tenant airlines' planes at Terminal E. The arrangement would also enhance TWA's operating efficiency by allowing TWA to liquidate part of its huge capital investment, to adjust to the seasonal nature of the demand for its product, to retain seasonal use of the aircraft during its peak season, and to increase use of its terminal and ground services capacity during the off-peak season, when Interface was to operate the aircraft. At the same time, TWA would retain the assurance that its own ground services facilities would be maintaining the aircraft not only while operated by TWA, but throughout the year, in a manner that TWA knows to be safe and cost-effective. This provision of the agreement, the complaint alleges, is particularly important because the aircraft requires special servicing equipment and specially-trained servicing personnel. The end result of Interface's efficiency-enhancing arrangement, according to the complaint, would be increased consumer welfare in the form of lower prices, greater safety, and higher quality service for airline customers.

The complaint further alleges that Massport, which has a monopoly on commercial airports in the Greater Boston area, has imposed restrictions on TWA and Interface that injure competition both in the market for ground services to commercial flights from Logan Airport and in the market for charter and other flights from Logan Airport to vacation destinations. These restraints also allegedly frustrate the purpose and viability of Interface's arrangement with TWA.

According to Interface, Massport has refused to allow Interface to use TWA's facilities at Terminal C, insisting that Interface use Terminal E instead. Interface therefore cannot use TWA's ground services at Terminal C and is forced to use the services provided by the two FBOs at Terminal E. All of TWA's maintenance equipment, spare parts, maintenance personnel, and service manuals are located at TWA's facilities at Terminal C. The complaint alleges that the FBOs lack the specialized equipment and specially-trained personnel necessary to maintain the aircraft safely and efficiently. In addition to impeding Interface's access to TWA's ground services, Massport has given the FBOs the exclusive right to fuel all non-tenant aircraft.

None of these requirements, Interface argues, are necessitated by any legitimate need of Massport. According to Interface, many other major airports in the United States allow tenant airlines, such as TWA, to perform ground services for the non-tenant airlines at the tenant airlines' own terminals; moreover, the complaint alleges that Massport permits tenant airlines with terminal space at Logan Airport to operate their own charter flights from such terminals.

The economic impact on Interface, if it can operate at all under the constraints imposed by Massport, will be approximately $10 per passenger flown, or approximtely $7,000 per in-season day, $35,000 per in-season week, and more than $5,000,000 over the seven-year term of the arrangement with TWA. The $10 additional per passenger expense to Interface will arise largely from per passenger fees imposed by Massport on flights originating from Terminal E, but not on those originating from Terminal C, and from the additional cost of having ground services provided by TWA at Terminal E.

The Federal Antitrust Law Claims

Counts I and II of the complaint, respectively, allege that Massport's acts constitute monopolizing, attempting to monopolize, and conspiring to monopolize in violation of § 2 of the Sherman Act,¹ and that Massport's exclusive agreements with the FBOs constitute contracts and conspiracies in restraint of trade in violation of § 1 of the Sherman Act.² Massport seeks dismissal of the plaintiff's federal antitrust claims on the grounds that they are barred by the state action doctrine established in Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943).

In Parker v. Brown, the United States Supreme Court addressed the question whether the federal antitrust laws prohibited a state, in the exercise of its sovereign powers, from imposing certain anticompetitive restraints. Id. at 350-52, 63 S.Ct. at 313-14. These restraints took the form of a "marketing program" adopted by the State of California for the 1940 raisin crop, which prevented the plaintiff from freely marketing his crop in interstate commerce. The Supreme Court noted that California's program "derived its authority ... from the legislative command of the state" and went on to hold that the program was therefore exempt, by virtue of the Sherman Act's own limitations, from antitrust attack:

We

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