Yellow Cab Co. of Nevada v. CAB EMP., AUTO. & W., LOC.# 881

• Decision Date: 01 March 1972
• Docket Number: No. 25567.,25567.
• Citation: 457 F.2d 1032
• Parties: YELLOW CAB COMPANY OF NEVADA, a Nevada corporation, Appellant, v. CAB EMPLOYERS, AUTOMOTIVE & WAREHOUSEMEN, LOCAL #881, et al., Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

457 F.2d 1032 (1972)

YELLOW CAB COMPANY OF NEVADA, a Nevada corporation, Appellant, v. CAB EMPLOYERS, AUTOMOTIVE & WAREHOUSEMEN, LOCAL #881, et al., Appellees.

No. 25567.

United States Court of Appeals, Ninth Circuit.

March 1, 1972.

Rex A. Jemison (argued), of Singleton, Beckley, Delanoy, Jemison & Reid, Las Vegas, Nev., for appellant.

Madison B. Graves (argued), of Graves, Crawford & Phillips, Ltd., George Rudiak (argued), Las Vegas, Nev., for appellees.

Before CHAMBERS and WRIGHT, Circuit Judges, and BYRNE,^* District Judge.

WILLIAM M. BYRNE, Senior District Judge:

Pursuant to the Sherman Anti-Trust Act, 15 U.S.C. § 1 et seq., appellant Yellow Cab Company of Nevada (Yellow Cab) brought suit in United States District Court to recover nearly $4,000,000 in damages, actual and treble, for alleged conspiracies to restrain trade and to monopolize, violations of Sections 1 and 2, respectively, of the Sherman Act. The District Court first denied, but upon reconsideration, granted, appellees'¹ joint Motions for Summary Judgment. In granting these motions, the District Court expressly found that there was no genuine issue as to any of the jurisdictional facts upon which its subject-matter jurisdiction depended and that appellees were entitled to judgment as a matter of law. Now before this court, Yellow Cab maintains that the lower court's assessment of federal jurisdiction was incorrect.

In its complaint, Yellow Cab sought recovery by way of two theories, namely, an "in commerce" violation of the Sherman Act and a violation of the Sherman Act which "affected commerce."

A. In Interstate Commerce.

In part, Yellow Cab claimed that it was engaged in interstate commerce because pursuant to an exclusive contract with Union Pacific Railroad, it transported passengers from the interstate terminal at the railroad depot to the interstate air terminal at McCarran Field, located in Clark County, Nevada. Additionally, Yellow Cab held a permit from the California Board of Equalization which authorized it to transport passengers to Nevada from California and vice versa.

These activities, which accounted for an annual revenue of approximately $8,500.00, constituted only .5% of Yellow Cab's over-all business ($2,313,096.15). The trial judge held that Yellow Cab's interstate taxicab operations were so insignificant in scope as to be de minimis to its over-all business enterprise.

Appellees concede that certain aspects of Yellow Cab's business may be regarded as "interstate in character." Nevertheless, they maintain that the Sherman Act is without applicability to this case because Yellow Cab's interstate activities are "infinitesimal" in scope. Indeed, they particularly note that Yellow Cab's contractual arrangement to transport passengers from interstate terminal to interstate terminal contributes, in effect, only a "percentage of a percentage" to its over-all revenue. Accordingly, appellees argue that the district court did not err when it deemed Yellow Cab's interstate business to be de minimis to its intrastate activity.

In United States v. Yellow Cab Co., 332 U.S. 218, 67 S.Ct. 1560, 91 L.Ed. 2010 (1947), the court held that transporting passengers between so-called "interstate terminals" was "clearly a part of the stream of interstate commerce." Here, a slight portion of Yellow Cab's business activity consisted of such passenger transportation. Although such activity amounts to only a tiny fraction of its business, Yellow Cab maintains this is sufficient participation to invoke the protection of the Sherman Act. The basis of Yellow Cab's position is the well-settled rule that where the activities are interstate in nature, a per se violation of the Sherman Act presumes, as a matter of law, an effect upon interstate commerce, thus negating a showing of the amount of commerce involved. Under such circumstances, it is no defense that this amount may be small. United States v. McKesson & Robbins, Inc., 351 U.S. 305, 76 S.Ct. 937, 100 L.Ed. 1209 (1956); Las Vegas Merchant Plumbers Association v. United States, 210 F.2d 732 (9th Cir. 1954), cert. denied 348 U.S. 817, 75 S.Ct. 29, 99 L.Ed. 645 (1954). Yellow Cab argues that it comes within the purview of this "well-settled rule" because it alleged the appellees conspired "to divide the market," an action which this court has deemed a per se violation of the Sherman Act. Las Vegas Merchant Plumbers Association v. United States, supra.

In the main, appellees base their opposition to Yellow Cab's "in commerce" theory on the jurisdictional formula worked out by this court in Page v. Work, 290 F.2d 323, 330, (9th Cir. 1961), cert. denied, 368 U.S. 875, 82 S.Ct. 121, 7 L.Ed.2d 76 (1961): "The test of jurisdiction is not that the acts complained of affect a business engaged in interstate commerce, but that the conduct complained of affects the interstate commerce of such business." There, the defendants were charged with conspiring to eliminate the "Los Angeles Daily Journal" as a competitor in the field of legal advertising in Los Angeles. Although both the defendants and the Journal were engaged in some form of interstate commerce, the court held that it was not an "in commerce" case because the conspiracy was directed at the local legal advertising market.

Yellow Cab acknowledges the viability of the Page formula, but argues that it is without applicability to this controversy. Specifically, it is pointed out that in Page the plaintiff continued to purchase newsprint and carry national news and advertising and mailed copies of its newspapers to its 13 out-of-state subscribers. By contrast, here, all of Yellow Cab's activities, interstate and intrastate, were interrupted by the alleged conspiracy.

In our view, Yellow Cab seeks to avoid the "well-settled" rule regarding per se violations of the Sherman Act by tailoring the thrust of the alleged conspiracy to come within general principles of antitrust law. Although it is true that the courts have held that a small amount of interstate commerce is sufficient to obtain federal jurisdiction, they have done so when the nature of the conspiracy has been directed against interstate commerce. Illustrative of this point is the recent case of United States v. Bensinger Co., 430 F.2d 584 (8th Cir. 1970). There, the defendants were convicted of violating Section 1 of the Sherman Act by conspiring to fix the price of a single dishwasher. The background of this alleged conspiracy is this: A St. Louis, Missouri, restaurant decided as part of the remodeling of its dishwashing facilities to install a Hobart dishwasher. Bid forms were sent to three St. Louis area Hobart dealers, only two of which expressed interest in the project. After its receipt of this form, one of these companies, Almar, was purportedly contacted by Hobart's St. Louis representative and told that it was not to underbid Bensinger. Almar was warned that its Hobart franchise would be in jeopardy if it submitted the low bid. Indeed, the representative warned that if Almar were awarded the contract, the dishwasher would not be sent from the home office. Thereafter, Almar submitted a perfunctory bid and the contract went to Bensinger.

The defendants maintained that the conspiracy to fix the price of one dishwasher was so insignificant that it did not meet the jurisdictional test of interstate commerce. The court disagreed, noting that the dishwasher had to be shipped from out of state (Troy, Ohio, to St. Louis, Missouri) and that the order to obtain the machine had to be placed and accepted in Hobart's main office in Troy. Of even greater significance was Hobart's threat not to deliver the dishwasher if Almar were awarded the contract. Thus, in the words of the court, ". . . the conspirator Hobart was engaged in interstate commerce, its product which was the subject of the conspiracy moved in interstate commerce, and that movement in interstate commerce was directly threatened by the conspiracy. This is sufficient to establish that the conspiracy occurred in the course of interstate commerce." (Emphasis supplied). 430 F.2d at 589. The court, nevertheless, noted the following clarification of its decision: "In the...