Seawinds Ltd. v. Nedlloyd Lines BV
| Decision Date | 24 June 1987 |
| Docket Number | No. C-86-2409 DLJ.,C-86-2409 DLJ. |
| Citation | 80 BR 181 |
| Parties | SEAWINDS LIMITED, Plaintiff, v. NEDLLOYD LINES, B.V.; Royal Nedlloyd Group, N.V.; KNSM Lines, B.V.; American President Companies, Ltd.; American President Lines, Ltd.; Sea-Land Corporation; Sea-Land Service, Inc.; Dampskibsselskabet AF 1912 A/S; A/S Dampskibsselskabet Svenborg; A.P. Moller-Maersk Line; HapagLloyd Aktingesellschaft; and Intercontinental Transport (ICT) B.V., Defendants. |
| Court | U.S. District Court — Northern District of California |
Thomas R. Fahrner, of Furth, Fahrner, Bluemle & Mason, San Francisco, Cal., for plaintiff.
M. Laurence Popofsky, Peter A. Wald, and Andrea G. Asaro, of Heller, Ehrman, White & McAuliffe, and Charles S. Donovan, of Walsh, Donovan, Lindh & Keech, San Francisco, Cal., for defendants Nedlloyd Lines, B.V., Royal Nedlloyd Group, N.V., and KNSM Lines, B.V.
John F. McLean, of Pillsbury, Madison & Sutro of San Francisco, Cal., for defendants American President Companies, Ltd. and American President Lines, Ltd.
Terry M. Gordon, of Lasky, Haas, Cohler & Munter, San Francisco, Cal., for defendants Sea-Land Corp. and Sea-Land Service, Inc.
Marc J. Fink, of Dow, Lohnes & Albertson, Washington, D.C., and Gary S. Anderson, of Farella, Braun & Martel, San Francisco, Cal., for defendants Dampskibsselskabet AF 1912 A/S, A/S Dampskibsselskabet Svenborg, A.P. Moller-Maersk Line, and Hapag-Lloyd Aktiengesellschaft.
Nathan Lane III, of Graham & James, San Francisco, Cal., for defendant Intercontinental Transport (ICT) B.V.
ORDER GRANTING MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION
On November 5, 1986 this Court heard oral argument on defendants' motion to dismiss for lack of subject matter jurisdiction and failure to state a claim upon which relief may be granted, Fed.R.Civ.P. 12(b)(1) & (6). All parties appeared through their respective counsel. Because the motion raises a question of first impression—application of section 108(a) of the Bankruptcy Code, 11 U.S.C. § 108(a), to the "savings provisions" of the Shipping Act of 1984, 46 U.S.C. §§ 1701-1720—the Court requested supplemental briefing. The parties have filed their supplemental memoranda, and the Court has considered carefully all materials submitted, as well as the parties' arguments advanced at the hearing. For the reasons set forth below, the Court is persuaded that the policies embodied in the Shipping Act mandate dismissal of this action.
Plaintiff Seawinds Limited ("Seawinds") bases this private maritime antitrust action on an alleged conspiracy to drive it out of the transpacific container shipping business. Seawinds, incorporated in Hong Kong in late 1982, engaged in the transpacific container shipping business between April 1983 and October 1984. On October 22, 1984 plaintiff filed a petition in the Northern District of California for Chapter 11 bankruptcy. Subsequently, on May 9, 1986, it commenced this action, alleging that defendants, in conjunction with various non-defendants, conspired to put it out of business.
The defendants may be classified in two groups. The "Nedlloyd defendants" consist of three Netherlands corporations: Nedlloyd Lines, B.V. ("Nedlloyd"), the Royal Nedlloyd Group, N.V. ("Nedlloyd Group"), and KNSM Lines, B.V. ("KNSM"). The nine "non-Nedlloyd defendants" consist of four American corporations, American President Companies, Ltd. ("APC"), American President Lines, Ltd. ("APL"), Sea-Land Corporation ("SLC"), and Sea-Land Service, Inc. ("SLS"); three Danish corporations, Dampskibsselskabet AF 1912 A/S, A/S Dampskibsselskabet Svenborg, and A.P. Moller-Maersk Line; one German corporation, Hapag-Lloyd Aktiengesellschaft; and one Netherlands corporation, Intercontinental Transport (ICT) B.V. ("ICT"). With the possible exception of ICT, all the non-Nedlloyd defendants appear to be involved in the transpacific container shipping business.
The complaint alleges federal antitrust and pendent state law claims. In brief, Seawinds alleges that defendants and others conspired to drive it out of the transpacific container shipping market by fixing reduced tariff rates, inducing suppliers and potential customers to boycott plaintiff, engaging in unfair practices, and breaching fiduciary duties. Counts One through Three allege violations of sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2, for which plaintiff seeks damages under 15 U.S.C. § 15. The remaining four counts allege pendent state claims for breach of contract, breach of fiduciary duty, conspiracy to violate fiduciary duties, and tortious interference with contractual relations to drive plaintiff out of business. All seven counts are based on a common core of charging allegations, which recount conduct occurring between late 1982 and March 15, 1984.1
Defendants move to dismiss under Federal Rule of Civil Procedure 12(b)(1) and (6) for lack of subject matter jurisdiction and failure to state a claim. Defendants submit that the challenged conduct falls within the purview of the Shipping Act of 1984, 46 U.S.C. §§ 1701-1720 ("the Act"), which abolished private antitrust actions for conduct prohibited by the Act, and instead vested in the Federal Maritime Commission exclusive jurisdiction over damage claims based on such conduct. They contend that because Seawinds' claims are covered by the Act, the Court is without jurisdiction over this action. Nor, they argue, does the action fall within the narrow, one-time exception embodied in the Act's "savings provisions."
Seawinds, on the other hand, contends that the 1984 Act does not even apply to its claims because they rest upon conduct occurring prior to the statute's date of enactment, March 20, 1984. Alternatively, even if the Act applies, plaintiff argues, this action is "saved" from the Act's substantive provisions because it was filed within the exemption period set forth in 46 U.S.C. § 1719(e)(2)(B), as "boosted" by Bankruptcy Code § 108(a), which extends by two years the point at which a bankrupt debtor's cause of action would otherwise have expired. Under plaintiff's analysis, this private antitrust suit is specifically exempted by the terms of the Act, as read in conjunction with the applicable provision of the Bankruptcy Code.
The parties thus raise two issues: the applicability of the 1984 Shipping Act to pre-Act conduct, and the applicability of section 108(a) of the Bankruptcy Code to the savings provisions of the 1984 Shipping Act. The Court takes up each issue in turn. First, however, it is useful to set forth the relevant provisions of the Act, as well as excerpts from its legislative history.
The 1984 Act, enacted on March 20, 1984 as Public Law 98-237 (98 Stat. 67), effected various changes in the law of international ocean commerce while carrying forward several provisions of the otherwise repealed Shipping Act of 1916, 46 U.S.C. § 801 et seq. See Compagnie Generale Maritime v. S.E.L. Maduro (Florida), Inc., 23 S.R.R. 1085, 1087 & n. 5 (ALJ Opn. FMC 1986). Of particular note here are changes pertaining to maritime antitrust claims.
The Shipping Act of 1984 expressly bars private antitrust suits based on conduct prohibited by the Act. Section 7(c)(2) of the Act provides:
No person may recover damages under section 15 of Title 15, or obtain injunctive relief under section 26 of Title 15, for conduct prohibited by this chapter.
46 U.S.C. § 1706(c)(2). Prohibited acts are enumerated in 46 U.S.C. § 1709. In place of private antitrust actions the Act establishes an administrative complaint process before the Federal Maritime Commission ("FMC"). "Any person" may file a sworn complaint with the FMC to obtain reparation for injuries caused by violations of the Act. 46 U.S.C. § 1710(a). There is a three-year statute of limitation for such complaints. Id. § 1710(g). The FMC is authorized to award actual damages (and, in appropriate circumstances, double damages) as well as attorney's fees. Id. Injunctive relief is available to either the Commission or the complainant. Id. § 1710(h).
The Act does not impose an absolute bar on private maritime antitrust actions as of the date of enactment. Rather, it contains "savings provisions" which limit application of the Act with respect to certain pending and accrued causes of action. Section 20(e)(2) provides:
These substantive provisions must be understood in the context of the Act's legislative history. Among the major purposes to be accomplished by the Shipping Act of 1984 were clarification of antitrust immunity for international ocean carriers, vesting in the Federal Maritime Commission of exclusive jurisdiction over administration of the Shipping Act's provisions, and minimizing government involvement in regulation of shipping operations. See Report of the House Committee on Merchant Marine and Fisheries, H.R.Rep. No. 53(I), 98th Cong., 1st Sess. 3-4, reprinted in 1984 U.S.Code Cong. & Ad.News 167, 168-69 hereafter "Report (I)".
The Shipping Act of 1984 was intended to clarify and broaden the antitrust immunity provided by the previous Shipping Act of 1916. That statute had established the United States Shipping Board (predecessor of the FMC) to regulate the ocean shipping industry, setting out a comprehensive regulatory scheme and granting limited immunity to ocean shipping lines. See 46 U.S.C. § 801 et seq. In the following years judicial interpretations narrowed the scope of this antitrust immunity and created parallel jurisdiction between the regulatory agency and the federal courts in certain cases. See, e.g., Sabre Shipping Corp. v. American President Lines, Ltd., 285 F.Supp. 949 (S.D.N.Y.1968), aff'd on other grounds sub nomine Japan Line...
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