Mt. Hood Stages, Inc. v. Greyhound Corp.

• Decision Date: 26 February 1980
• Docket Number: No. 79-4071,79-4071
• Citation: 616 F.2d 394
• Parties: 1980-1 Trade Cases 63,206 MT. HOOD STAGES, INC., doing business as Pacific Trailways, Plaintiff-Appellee, v. The GREYHOUND CORPORATION and Greyhound Lines, Inc., Defendants-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 394

616 F.2d 394

1980-1 Trade Cases 63,206

MT. HOOD STAGES, INC., doing business as Pacific Trailways, Plaintiff-Appellee, v. The GREYHOUND CORPORATION and Greyhound Lines, Inc.,

Defendants-Appellants.

No. 79-4071.

United States Court of Appeals, Ninth Circuit.

Feb. 26, 1980.

Rehearing Denied April 23, 1980.

John R. Reese, McCuthen, Doyle, Brown & Enersen, San Francisco, Cal., on brief for defendants-appellants.

Eugene C. Crew, Broad, Khourie & Schulz, San Francisco, Cal. (argued), for plaintiff-appellee.

Appeal from the United States District Court for the District of Oregon.

Before BROWNING, WRIGHT and KENNEDY, Circuit Judges.

BROWNING, Circuit Judge:

This antitrust case is before us for the third time. On the first appeal we affirmed a judgment for plaintiff on the merits, and held the suit not barred by limitations because the running of the statutory period had been tolled under 15 U.S.C. § 16(i). 555 F.2d 687 (9th Cir. 1977). On certiorari the Supreme Court held section 16(i) inapplicable, but remanded for consideration of whether the running of limitations had been tolled under equitable principles. 437 U.S. 322, 337 n. 21, 98 S.Ct. 2870, 2379 n. 21, 57 L.Ed.2d 239 (1978). We in turn remanded to the district court, 583 F.2d 469 (9th Cir. 1978). The district court held that running of the statute of limitations had been tolled during the pendency of related proceedings before the Interstate Commerce Commission. This appeal followed. We affirm.

I.

Between 1947 and 1956 Greyhound acquired a number of bus companies whose routes together encircled the routes of Mt. Hood. On October 7, 1964, Mt. Hood filed a petition with the Commission asking that the acquisition proceedings be reopened, and the orders approving the acquisitions be modified. The United States petitioned to intervene in the Commission proceedings on December 14, 1964, and leave to intervene was subsequently granted. The Commission issued an opinion granting relief in April 1968.

This antitrust suit was filed in July 1968. Mt. Hood was awarded damages for the twenty year period from 1953 to 1973. The period of limitations is four years. 15 U.S.C. § 15b. The jury found Greyhound had fraudulently concealed the antitrust violation from 1953 to December 14, 1960. The trial court ruled that the statute of limitations was tolled during that period. We affirmed this ruling on the prior appeal. 555 F.2d at 698-99. We also held on the prior appeal that under 15 U.S.C. § 16(i) the running of limitations was tolled on December 14, 1964 by the intervention of the United States in the Commission proceeding and remained suspended until the administrative proceeding was completed, after this suit was commenced. 555 F.2d at 699-701. Since the time between the period of fraudulent concealment and the government intervention did not exceed four years, the two tolling periods were "tacked" and Mt. Hood was allowed recovery for the full twenty year damage period extending from 1953 to 1973. 555 F.2d at 698 n. 26.

The Supreme Court reversed, holding that intervention by the United States in the Commission proceeding could not be treated as equivalent to institution by the United States of a civil proceeding to enforce the antitrust laws within the meaning of 15 U.S.C. § 16(i).

The question now before us is whether the pendency of the administrative proceeding initiated by Mt. Hood suspended the running of limitations on Mt. Hood's antitrust action on a basis other than section 16(i). ¹ If it did, no part of the damage award is barred. ²

Whether the time limitation on filing suit under a federal statute is tolled during the pendency of a prior judicial or administrative proceeding depends upon whether permitting the subsequent litigation to proceed will further the purposes of Congress in creating the cause of action and in limiting the period for filing. Burnett v. New York Central Railroad, 380 U.S. 424, 426-27, 85 S.Ct. 1050, 1053, 13 L.Ed.2d 941 (1965); American Pipe & Construction Co. v. Utah, 414 U.S. 538, 554-56, 94 S.Ct. 756, 766-67, 38 L.Ed.2d 713 (1974). We conclude that tolling the running of limitations serves the important federal interest in accommodating enforcement of the Sherman Act with enforcement of the Interstate Commerce Act, and is not inconsistent with the purposes of the Clayton Act's limitation period.

II.

The governing principle is succinctly stated in Burnett v. New York Central Railroad, supra, 380 U.S. at 427, 85 S.Ct. at 1054:

(T)he basic inquiry is whether congressional purpose is effectuated by tolling the statute of limitations in given circumstances.

In order to determine congressional intent, we must examine the purposes and policies underlying the limitation provision, the Act itself, and the remedial scheme developed for the enforcement of the rights given by the Act.

A.

We consider first whether tolling would serve the purpose and policies of the antitrust laws and the remedial scheme developed for the enforcement of the rights conferred by those laws.

Tolling the statutory period of limitations would serve the basic purpose of 15 U.S.C. §§ 15 and 26 to secure enforcement of the antitrust laws by encouraging persons injured to bring suit against antitrust violators. But this justification would be present in any private suit under the Act, and if no more were required to toll the running of the period of limitations the provision requiring suit to be filed within a limited period would be meaningless. However, tolling the limitations period pending Mt. Hood's resort to the ICC serves Congressional purpose in a much more precise sense. It contributes to a reasonable accommodation of the ICC's responsibility for furthering the national transportation policy with the responsibility of the courts to effectuate the national antitrust policy.

To effectuate the purposes of the Interstate Commerce Act, Section 5(11) of the Act, 49 U.S.C. § 5(11), expressly exempts from the antitrust laws certain carrier conduct that might otherwise violate those laws. Section 5(11) provides that when one carrier acquires another with the approval of the Commission, the carriers are

"relieved from the operation of the antitrust laws . . . insofar as may be necessary to enable them to carry into effect the transaction so approved or provided for in accordance with the terms and conditions, if any, imposed by the Commission, and to hold, maintain, and operate any properties and exercise any control or franchises acquired through such transaction."

The heart of Mt. Hood's antitrust claim is that Greyhound used the power gained through acquisition of encircling routes for the purpose and with the effect of eliminating Mt. Hood as a competitor. Prior to the acquisitions, Mt. Hood had cooperative traffic arrangements with the acquired companies and a through-bus arrangement with Greyhound. Mt. Hood opposed the acquisitions on the ground that these arrangements would be terminated if Greyhound gained control of the bus companies, and that Greyhound would route passengers around Mt. Hood's shorter routes. Greyhound responded by assuring the Commission that it was not the policy of Greyhound to route passengers over circuitous routes and by representing to the Commission that the cooperative arrangements would be continued. Relying upon Greyhound's representations the Commission approved the acquisitions. After encircling Mt. Hood, Greyhound, with the purpose of driving Mt. Hood out of business, did exactly what it represented to the Commission it would not do: Greyhound cancelled the through-bus connection, scheduled connecting services to preclude reasonable connection with Mt. Hood, caused ticket agents to direct traffic over Greyhound's longer routes, and interfered with the distribution of Mt. Hood's schedules and the quotation of its rates and services.

These activities alleged in Mt. Hood's antitrust complaint were directly related to and, indeed, dependent upon, the acquisitions approved by the Commission. A substantial question was therefore raised whether these activities were immunized from the antitrust laws by Section 5(11) of the Interstate Commerce Act.

If, as Greyhound insisted, the conduct underlying Mt. Hood's claim was necessary to carry the acquisitions into effect or to hold, maintain, or operate the routes acquired, the conduct was immune from the antitrust laws under § 5(11). If the practices were not necessary to these purposes there would be no antitrust immunity. See 555 F.2d at 688-95.

Whether Greyhound's transportation practices were necessary to carry the acquisitions into effect or hold, maintain or operate the acquired property raised "issues of fact not within the conventional experience of judges" and involved subject matter Congress has given the Commission jurisdiction to regulate. Far East Conference v. United States, 342 U.S. 570, 574-75, 72 S.Ct. 492, 494, 96 L.Ed. 576 (1952). ³ Moreover Mt. Hood's allegations, denied by Greyhound, that the Commission had approved the acquisitions in reliance upon Greyhound's false representations that it would not engage in these very practices, created a dispute only the Commission could resolve, and one that bore directly upon the integrity of the Commission's procedures.

These issues, critical to the question of immunity, were therefore within the primary jurisdiction of the Commission. Accordingly, the resolution of these issues by the Commission was required before a court could address the immunity question. Chicago Mercantile Exchange v. Deaktor, 414 U.S. 113, 94 S.Ct. 466, 38 L.Ed.2d 344 (1973); Ricci v. Chicago Mercantile Exchange, 409 U.S. 289, 93 S.Ct. 573, 34 L.Ed.2d 525 (1973); Carnation Co. v. Pacific Westbound Conference, 383 U.S. 213, 86 S.Ct. 781, 15 L.Ed.2d 709 (1966); Far East Conference v. United States, supra. United States Navigation Co. v. Cunard Steamship Co., 284 U.S. 474, 52 S.Ct. 247, 76 L.Ed. 408 (1932).

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