Massachusetts Furniture & Piano Movers Ass'n, Inc. v. F.T.C., 83-1892

• Decision Date: 30 September 1985
• Docket Number: No. 83-1892,83-1892
• Citation: 773 F.2d 391
• Parties: 1985-2 Trade Cases 66,811 MASSACHUSETTS FURNITURE & PIANO MOVERS ASSOCIATION, INC., Petitioner, v. FEDERAL TRADE COMMISSION, Respondent.
• Court: U.S. Court of Appeals — First Circuit

Page 391

773 F.2d 391

1985-2 Trade Cases 66,811

MASSACHUSETTS FURNITURE & PIANO MOVERS ASSOCIATION, INC., Petitioner, v. FEDERAL TRADE COMMISSION, Respondent.

No. 83-1892.

United States Court of Appeals, First Circuit.

Sept. 30, 1985.

James C. McMahon, Jr., New York City, with whom Rory J. Fitzpatrick, Boston, Mass., Lori Samet Schwartz and Brodsky, Linett, Altman, Schechter & Reicher, New York City, were on brief, for petitioner.

Peter B. Ellis, Gerald L. Neuman, and Foley, Hoag & Eliot, Boston, Mass., on brief, for the Bekins Co. and Bekins Moving & Storage Co., Inc., amici curiae.

John H. Carley, Gen. Counsel, Washington, D.C., with whom Howard E. Shapiro, Deputy Gen. Counsel, Ernest J. Isenstadt, Asst. Gen. Counsel, Joanne L. Levine, Atty., and Leslie Rice Melman, Atty., F.T.C., Washington, D.C., were on brief, for respondent.

Before COFFIN and BREYER, Circuit Judges, and DOYLE, ^* Senior District Judge.

COFFIN, Circuit Judge.

The Massachusetts Furniture and Piano Movers Association (the Association) appeals from a decision of the Federal Trade Commission (FTC) ordering the Association to cease and desist from collective rate setting. Appellant is a Massachusetts trade association comprised of two hundred and seventy carriers of household goods and office equipment, a number equal to approximately eighty percent of such carriers in Massachusetts. Since 1938, the Association has followed the practice of developing "tariffs", or price schedules, for its members and filing these tariffs with the Massachusetts Department of Public Utilities (MDPU). In 1977 the FTC began an investigation of this practice. It concluded that the Association's rate-setting activities violated Section 5 of the Federal Trade Commission Act, 15 U.S.C. Sec. 45, and it ordered the Association to cease filing joint tariffs. In light of Southern Motor Carriers Rate Conference, Inc. v. United States, --- U.S. ----, 105 S.Ct. 1721, 85 L.Ed.2d 36 (1985), we reverse in part, vacate in part, and remand. ¹

Massachusetts law requires a mover to file a tariff with the MDPU setting the mover's rates and conditions for service. The MDPU may reject a proposed tariff; but if it takes no action within a certain period (usually thirty days), the tariff automatically becomes effective. Mass.Gen.Laws Ann. ch. 159B, Sec. 6. The regulations promulgated by the MDPU permit one mover to adopt another mover's tariff by filing a concurrence. MDPU 10405(1), Part III, Sec. 6(b). The MDPU does not, however, require common carriers to file joint tariffs or to adopt uniform rates.

The Association's Tariff Committee develops a comprehensive tariff that sets out two tables of rates for packing and unpacking services, ten tables of hourly rates for moves of 25 miles or less, and a table of rates calculated by weight and mileage for moves of more than 25 miles. This tariff is approved by the Association's Board of Directors and ratified by the members. Although members of the Association have the right to file independent tariffs, the Administrative Law Judge (ALJ) who rendered the initial decision in this case found that the right was rarely exercised. Indeed, between 1972 and 1980, the average participation in the Association's tariff was greater than ninety-five percent.

The ALJ also found that the Association organizes member carriers into geographic zones and encourages carriers in each zone to adopt uniform rates, or to move uniformly to a higher rate table within the Association's tariff. The ALJ indicated that the Association "acts as a fire brigade which at the first sign of a price reduction rushes into action to discourage such competitive activity." In addition, the ALJ found that the Association "serves as a constant source of inspirational messages to the members which have as their dominant theme that movers should increase prices to consumers."

In response to the FTC's charge that its rate-setting practices constitute an unfair method of competition, the Association argues that the FTC's conclusion is not supported by substantial evidence, and that the Association's practices are immune from the antitrust laws under the "state action" doctrine of Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943). Amici Bekins Company and Bekins Moving & Storage Company argue that the FTC does not have jurisdiction to regulate the purely intrastate activities of the Association. ²

I. Jurisdiction

The Interstate Commerce Act (ICA) expressly reserves the regulation of common carriers' intrastate rates to the states, even where these rates affect interstate commerce. 49 U.S.C. Sec. 10521(b). Southern Motor Carriers, 105 S.Ct. at 1723 n. 1. The ICA also confers statutory immunity from the operation of the federal antitrust laws to approved interstate collective rate bureau activity. 49 U.S.C. Sec. 10706. ³ Amici argue that as applied to them these provisions of the ICA irreconcilably conflict with the federal antitrust laws and thereby warrant an implied repeal of the antitrust laws for intrastate rate bureau activity. Intervention by the FTC or any federal administrative agency in this situation, they contend, offends Congress's clear policy to refrain from exercising its power to regulate intrastate trucking. Significantly, they argue, no provision of the Federal Trade Commission Act explicitly confers on the FTC the authority to intervene in intrastate rate-making processes.

The Supreme Court has repeatedly stated that:

"Repeals of the antitrust laws by implication from a regulatory statute are strongly disfavored, and have only been found in cases of plain repugnancy between the antitrust and regulatory provisions." United States v. Philadelphia National Bank, 374 U.S. 321, 350-51 [83 S.Ct. 1715, 1734, 10 L.Ed.2d 915] (1963), quoted in Otter Tail Power Co. v. United States, 410 U.S. 366, 372 [93 S.Ct. 1022, 1027, 35 L.Ed.2d 359] (1973).

The presumption against implied repeal, normally applied to conflicts between federal antitrust laws and federal regulations, applies with equal force to conflicts involving state regulatory policy. Cantor v. Detroit Edison Co., 428 U.S. 579, 596-597 & nn. 36, 37, 96 S.Ct. 3110, 3120-21 nn. 36, 37, 49 L.Ed.2d 1141 (1976). And even where such repugnancy is found, the antitrust laws are abrogated only to the extent necessary for the effective functioning of the regulatory scheme. Silver v. New York Stock Exchange, 373 U.S. 341, 357, 83 S.Ct. 1246, 1257, 10 L.Ed.2d 389 (1963).

We find no irreconcilable conflict of federal antitrust policy as embodied in Section 5 of the Federal Trade Commission Act with either the Interstate Commerce Act, 49 U.S.C. Secs. 10521(b), 10706, or with the existence of state regulation. First, the Association concedes that it is not a "common carrier" subject to the ICA and the provisions of that act do not govern even those of the Association's actions which affect interstate commerce. The Interstate Commerce Act therefore poses no bar to the application of the federal antitrust laws to collective intrastate rate making.

Second, despite the reservation to the states of the regulation of intrastate trucking, nothing in the provisions of the ICA or its legislative history demonstrate congressional intent to renounce any or all federal antitrust regulation in the field. Amici contend that Congress implicitly immunized intrastate price fixing from the antitrust laws by deleting from the 1980 amendments to the Interstate Commerce Act a provision prohibiting regional rate bureaus from handling rates for intrastate transportation. The legislative history reveals, however, that this provision was not retained in the final version of the act because Congress determined that further study was necessary, and not because Congress approved intrastate rate bureau activities. See H.R.Rep. No. 96-1069, 96th Cong., 2d Sess. 29 (1980), U.S.Code Cong. & Admin.News 1980, 2283, 2311. The Interstate Commerce Act did not deprive the states of the power to regulate intrastate motor carriers, but neither did it create an exemption from the federal antitrust laws for that state regulated activity. Absent a statutory exemption, or state created immunity, see post, the collective preparation or filing of intrastate motor carrier rates which affect interstate commerce is subject to federal regulation.

Likewise, we refuse to imply an exemption from antitrust regulation from the Federal Trade Commission Act because nothing in that statute reflects congressional intent to withhold from the FTC the power to oversee intrastate rate-making activities. To the contrary, we think that Section 201(a) of the Magnuson-Moss Act, Pub.L. 93-637, 88 Stat. 2183 (codified in scattered sections of 15 U.S.C.), which extends the reach of Section 5 of the FTCA from acts "in commerce" to acts "in or affecting commerce" supports our conclusion that the FTC has jurisdiction to regulate the intrastate activities of the Association which affect interstate commerce. ⁴

II. State Action Immunity

The Supreme Court ruled in Southern Motor Carriers Rate Conference v. United States that the collective intrastate rate making of a private motor carrier conference was immunized from antitrust liability under the "state action" doctrine of Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943) (the Sherman Act was not intended to prohibit states from imposing restraints on competition, and will not be used to compromise the states' ability to regulate their domestic commerce). 105 S.Ct. 1721. The Court reasoned that state action immunity existed because the private parties' conduct was undertaken pursuant to "clearly articulated and affirmatively expressed" state policies to displace competition, and the anticompetitive activity was "actively supervised" by the respective states, California Retail Liquor Dealers Ass'n v. Midcal Aluminum, Inc., 445 U.S. 97, 105-06, 100 S.Ct. 937, 943, 63 L.Ed.2d 233 (1980) (Midcal ). Southern...