A series of reported antitrust decisions in 1999 and 2000 involved transportation companies. A discussion of those cases follows.

Robert’s Hawaii School Bus, Inc. v. Laupahoehoe Transportation Company, Inc., 982 P.2d 853 (Haw. 1999).

On July 15, 1999, the Supreme Court of Hawaii upheld the dismissal of a claim that bus transportation companies had attempted to monopolize the state school bus industry in violation of Haw Rev. Stat. § 480, which tracks §§ 1-2 of the Sherman Act (15 U.S.C. §§ 1-2). The Court affirmed the decision of the trial court that the plaintiff had failed to present sufficient evidence that the defendants had a dangerous probability of monopolizing the industry, as well as held that there is no private right of action under Hawaii law for "unfair" competition. The relevant Hawaii statute is based on § 5 of the Federal Trade Commission Act (15 U.S.C. § 45) and, according to the Court, cannot be invoked by private parties.

United States v. Tucor International, Inc., 189 F.3d 834 (9^th Cir. 1999).

On September 2, 1999, the Ninth Circuit Court of Appeals upheld the dismissal of price fixing charges and indictments under § 1 of the Sherman Act (15 U.S.C. § 1) against Philippine corporations and individuals which were engaged in trucking from U.S. bases to seaports in the Philippines the household goods of military personnel returning to the U.S. The goods were transported between the Philippines and the U.S. under a single bill of lading. The Court affirmed the decision of the District Court for the Northern District of California that the challenged conduct fell within the exemption provided by § 7(a)(4) of the Shipping Act of 1984 (46 U.S.C. App. § 1706(a)(4)), which provides that U.S. antitrust laws do not apply to any agreement concerning the foreign inland segment of through transportation that is part of transportation provided in a U.S. import or export trade.

Western Parcel Express v. United Parcel Service of America, Inc., 190 F.3d 974 (9^th Cir. 1999).

On September 14, 1999, the Ninth Circuit Court of Appeals upheld the dismissal of predatory pricing claims under § 2 of the Sherman Act (15 U.S.C. § 2) against UPS. WPX alleged that exclusive contracts between UPS and its customers created insurmountable barriers to competition in the package delivery market in California, Arizona, and Nevada. The Court affirmed the decision of the District Court for the Northern District of California that there is no evidence UPS had or will have the ability to exclude competition in the relevant markets. UPS’s customer contracts are terminable on short notice, and do not prohibit the use of other delivery services. Further, although WPX’s profit margins have declined since the deregulation of the package delivery market, it has experienced significant growth and is profitable, and competitors such as RPS and FedEx (independently of its purchase of RPS) also have aggressively entered the market.

Alabama Ambulance Services, Inc. v. City of Phenix City, Alabama, 71 F. Supp.2d 1188 (M.D.Ala. 1999).

On October 21, 1999, the District Court for the Middle District of Alabama dismissed a ambulance service’s claim that the termination of its subcontract to provide ambulance services violated § 2 of the Sherman Act (15 U.S.C. § 2). The Court held that because the contractor had won the overall contract for ambulance services in open bidding against the plaintiff, lacked the power to control prices, and did not have monopoly power actionable under the Sherman Act.

Western Coal Traffic League v. Surface Transportation Board, 169 F.3d 775 (D.C.Cir. 1999).

On March 23, 1999, the D.C. Circuit Court of Appeals upheld the STB’s decision to approve the merger of the Union Pacific Railroad Co. and the Southern Pacific Rail Corp. The STB concluded that the benefits of the merger outweighed the resulting reduction in competition. The Court found that the STB’s decision was supported by substantial evidence. The Court also rejected the League’s claim that the merger would lead to duopoly pricing and reduced source competition in western coal markets as well as the League’s claim that the trackage rights the merging railroads had agreed to provide to the Burlington Northern and Santa Fe Railway Co. would not create effective competition because the fees charged to the BNSF were too high.

Wills Trucking, Inc. v. Baltimore & Ohio Railroad Co., 1999 WL 357775 (6^th Cir. 1999).

On May 14, 1999, the Sixth Circuit Court of Appeals, in an unpublished decision, upheld the dismissal of the Bessemer & Lake Erie Railroad Company’s claim that it was entitled to indemnification from Penn Central Corporation with respect to the monies it had paid to settle an antitrust case filed against Bessemer and Penn Central by Wills Trucking. The Court affirmed the decision of the District Court for the Northern District of Ohio that indemnification is not available among joint tortfeasors. The Court rejected Bessemer’s claim that it was an innocent actor, that had been held vicariously liable for conduct by Penn Central; the Court noted that a criminal jury had found that Bessemer participated in a conspiracy to restrain the iron ore trade in the Great Lakes region, and that as a member thereof Bessemer was liable for the acts of its co-conspirators.

Pinney Dock & Transport Co. v. Penn Central Corporation, 196 F.3d 617 (6^th Cir. 1999).

On November 16, 1999, the Sixth Circuit Court of Appeals upheld the dismissal of the Bessemer & Lake Erie Railroad Company’s claim that it was entitled to indemnification and/or contribution from Penn Central with respect to the monies it had paid to settle an antitrust case against Bessemer and Penn Central by Pinney. The Court affirmed the decision of the District Court for the Northern District of Ohio that indemnification and contribution are only available to a party that is an innocent actor, the liability of which stems from a legal relationship with the truly culpable party. Bessemer, in contrast, was found by a criminal jury to have knowingly, voluntarily, and intentionally participated in a conspiracy to restrain the iron ore trade in the Great Lakes region. The Court in part relied on its earlier decision in the Wills Trucking case.

USX Corporation v. Penn Central Corporation, 738 N.E.2d 13 (Ohio Ct. App. 2000).

On March 1, 2000, the Ohio Eighth District Court of Appeals upheld the dismissal of USX and the Bessemer & Lake Erie Railroad Company’s claims that they were entitled to indemnification and/or contribution from Penn Central with respect to the monies they had paid to settle an antitrust case against them all. The Court affirmed the decision of the Cuyahoga County Court of Common Pleas that indemnification and contribution are not available to a tortfeasor which had intentionally caused or contributed to an injury, and that both plaintiffs had been intentional participants in a conspiracy to restrain the iron ore trade in the Great Lakes region. The Court in part relied on the earlier decisions in Wills Trucking and Pinney Dock.

USX Corporation v. Adriatic Insurance Co., 99 F. Supp.2d 593 (W.D.Pa. 2000).

On March 22, 2000, the District Court for the Western District of Pennsylvania dismissed USX and the Bessemer & Lake Erie Railroad Company’s claims that they were entitled to indemnification from their insurers with respect to the monies they had paid to settle various antitrust cases against them. The Court held that indemnification was not available to an insured which had intended to produce the kind of harm which caused injuries, and that both plaintiffs had been intentional participants in a conspiracy to restrain the iron ore trade in the Great Lakes region.

Western Coal Traffic League v. Surface Transportation Board, 216 F.3d 1168 (D.C.Cir. 2000).

On July 14, 2000, the D.C. Circuit Court of Appeals upheld (2-1) the STB’s decision to impose a 15-month moratorium on the filing of railroad merger applications. The STB instituted the moratorium in December 1999 after it received notice that the Burlington Northern and Santa Fe Railway Company and the Canadian National Railway Company planned to submit a merger application. The majority of the Court concluded that the STB had shown a reasonable need for the moratorium, and that the risks of forcing the STB to act without an opportunity to re-evaluate its standards for railroad mergers included a loss of competition that might never be restored.

Midwestern Machinery, Inc. v. Northwest Airlines, Inc., 167 F.3d 439 (8^th Cir. 1999).

On February 2, 1999, the Eighth Circuit Court of Appeals ruled that Midwestern’s claim that Northwest’s acquisition of Republic Airlines had violated § 7 of the Clayton Act (15 U.S.C. § 18) could proceed despite the completion of the merger in 1986. In reversing the decision of the District Court for the District of Minnesota to dismiss the claim, the Court held that an action pursuant to the Clayton Act’s prohibition on acquisitions that substantially lessen competition is not barred by the completion of the acquisition. The court reasoned that § 7 was intended to address "smoldering" anti-competitive activity, which may blaze up into a fire at a later time.

Omega World Travel, Inc. v. Airlines Reporting Corporation, 1999 WL 46756 (4^th Cir. 1999).

On February 3, 1999, the Fourth Circuit Court of Appeals, in an unpublished decision, upheld the dismissal of Omega’s claim that the ARC had conspired with the major airlines to restrain trade in the airline ticket industry, in violation of § 1 of the Sherman Act (15 U.S.C. § 1). The Court affirmed the decision of the District Court for the Eastern District of Virginia that Omega had not produced evidence through which a scheme might be inferred between ARC and the airlines, as well as that there was substantial evidence that travel agencies used ARC as a clearinghouse instead of dealing individually with airlines because doing so was efficient and financially advantageous.

Chase v. Northwest Airlines Corporation, 49 F. Supp.2d 553 (E.D.Mich. 1999).

On April 23, 1999, the District Court for the Eastern District of Michigan held that the Airline Reporting Corporation and Northwest must defend against a claim under §§ 1-2 of the Sherman Act (15 U.S.C. §§ 1-2) that airlines conspired through ARC to charge monopoly prices to passengers traveling to or from Northwest’s hub airports. The Court in part relied on the carrier’s ban on "hidden-city ticketing," by which a passenger purchases an inexpensive ticket connecting through a hub city, and then flies on only the first leg of the flight. But the Court also dismissed claims that Northwest likewise conspired with travel agents and ARC directly.

Laker Airways, Inc. v. British Airways, PLC, 182 F.3d 843 (11^th Cir. 1999).

On July 30, 1999, the Eleventh Circuit Court of Appeals ruled that British Airways must defend against a claim by Laker that BA conspired to monopolize air service between Miami and London. The Court affirmed the dismissal of most of Laker’s claims by the District Court for the Southern District of Florida, on the grounds that that Airport Coordination, Ltd., the corporation that coordinates slots at British airports, was an indispensable party to the action, but was shielded by the act of state doctrine. However, the Court found that the District Court had erred in dismissing a claim that rested solely on BA’s refusal to enter into interline agreements with Laker, which did not implicate ACL, and the Court remanded that claim for further proceedings.

Virgin Atlantic Airways Ltd. v. British Airways, PLC, 69 F. Supp.2d 571 (S.D.N.Y. 1999).

On October 22, 1999, the District Court for the Southern District of New York dismissed Virgin’s claims that British Airways’ use of incentive agreements with certain customers (travel agents and corporations) violated §§ 1-2 of the Sherman Act (15 U.S.C. §§ 1-2). The Court stated that Virgin had not met its burden of proof. Instead of relying on market data, Virgin tried to prove predation primarily through expert economic opinion, which rested on unrealistic and unproven assumptions such as that incentive agreements caused BA to operate additional flights.

Ports Authority of Puerto Rico v. Compania Panamena de Aviacion (COPA), S.A., 77 F. Supp.2d 227 (D.P.R. 1999).

On November 22, 1999, the District Court for the District of Puerto Rico dismissed a counterclaim against American Airlines under §§ 1-2 of the Sherman Act (15 U.S.C. §§ 1-2) stemming from American’s contract with the Ports Authority to build and operate the Federal Inspections Service facility at the Puerto Rico Airport. American sued COPA for non-payment of its management fees; COPA responded with an antitrust counterclaim. The Court held that the state action doctrine shielded American from liability, because the fees it charged had been assessed pursuant to government policy and were closely monitored by the Ports Authority.

Evac, L.L.C. v. Pataki, 89 F. Supp.2d 250 (N.D.N.Y. 2000).

On March 3, 2000, the District Court for the Northern District of New York dismissed a claim under § 1 of the Sherman Act (15 U.S.C. § 1) and § 1 of the Clayton Act (15 U.S.C. § 15) that Evac’s medical air transport business had been harmed by the free medical transport services offered by the state police. The Court held that Evac failed to state a claim because it alleged not market-wide but individual harm, and had not defined a relevant product or geographic market.

Cedarhurst Air Charter, Inc. v. Waukesha County, 110 F. Supp.2d 891 (E.D.Wis. 2000).

On March 30, 2000, the District Court for the Eastern District of Wisconsin held that Waukesa County must defend against Cedarhurst’s claim under §§ 1-2 of the Sherman Act (15 U.S.C. §§ 1-2) that Waukesa required the owners of all aircraft stored at the county airport to buy fuel from the fixed based operator hired by the county to operate and manage the airport. The Court held that the state action doctrine did not shield Waukesa, because the doctrine is in conflict with the purposes of Wisconsin state antitrust law (Wis. Stat. § 133.03), which parallels the Sherman Act, is to be interpreted liberally, and which allows municipalities to be sued.

Continental Airlines, Inc. v. United Air Lines, Inc., 120 F. Supp.2d 556 (E.D.Va. 2000); __ F. Supp.2d __, 2001 WL 25507 (E.D.Va. 2001).

On November 6, 2000, the District Court for the Eastern District of Virginia held that United and Dulles Airport must defend against Continental’s claim that the use of templates to restrict the size of carry-on bags allowed to pass through security checkpoints at Dulles Airport (which are operated by United) violates § 1 of the Sherman Act (15 U.S.C. § 1) and its Virginia counterpart (Va. Code § 59.1-9.5). The Court held that Continental stated a claim sufficient to survive a motion to dismiss because the baggage sizing restriction was a per se unreasonable restraint on competition and also imposed an unreasonable restraint on competition if evaluated under a rule of reason analysis. Subsequently, on January 5, 2001, the Court held that the use of the templates should be enjoined, as a restraint on competition intended to lower the quality of airline service available to consumers. An additional hearing will be held to assess damages.

Ocean Logistics Management, Inc. v. NPR, Inc., 38 F. Supp.2d 77 (D.P.R. 1999).

On February 26, 1999, the District Court for the District of Puerto Rico dismissed a claim by OLMI against NPR, a maritime carrier, which alleged that NPR’s filing of new tariff rates for the shipment of containers violated § 1 of the Sherman Act (15 U.S.C. § 1) by eliminating a price differential that OLMI by contract had enjoyed. The Court decided that the filed-rate doctrine, which requires that causes of action based upon rates filed by carriers in regulated transportation industries be remitted exclusively to the appropriate regulatory agency, controlled and barred the antitrust claim: the Surface Transportation Board had exclusive jurisdiction over the claim.

Sea-Land Service, Inc. v. Atlantic Pacific Int’l, Inc., 57 F. Supp.2d 1048 (D.Haw. 1999); 61 F. Supp.2d 1092 (D.Haw. 1999); 61 F. Supp.2d 1102 (D.Haw. 1999).

On July 12, 1999, the District Court for the District of Hawaii issued three decisions in which it held that Sea-Land must defend against a claim that it tied the purchase of its shipping services to the purchase of the use of its shipping containers. Sea-Land had filed suit to recover unpaid shipping charges from API and other freight consolidators, who in turn filed antitrust and other counterclaims against Sea-Land. With respect to the defendants’ antitrust counterclaims, the Court held that Sea-Land’s inclusion of the cost of its containers in its shipping charges, and its 33% share of the relevant market, justified a trial on the issue of tying pursuant to § 1 of the Sherman Act (15 U.S.C. § 1) and Hawaii state law (H.R.S. § 480-4). At the same time, however, the Court dismissed all of the other antitrust counterclaims (that Sea-Land had refused to deal with certain shippers; engaged in price-fixing; given illegal preferential tariff rates to certain shippers; and illegally monopolized the shipping market between Hawaii and the west coast).

Coastal Fuels of Puerto Rico, Inc. v. Caribbean Petroleum Corporation, 175 F.3d 18 (1^st Cir. 1999), cert. denied 528 U.S. 931 (1999).

On April 14, 1999, the First Circuit Court of Appeals ruled that a reseller of marine bunker fuel, which had prevailed in a antitrust claim under Puerto Rican law against a fuel refinery, was entitled to a new trial to reassess its damages. Coastal Fuels, a new entrant, had filed suit against Caribbean Petroleum, the only local source of marine bunker fuel, on the grounds that it had entered into discriminatory price agreements with Coastal Fuel’s established competitors. Caribbean Petroleum subsequently cut off Coastal Fuels and the reseller went out of business. The Court held that the District Court for the District of Puerto Rico incorrectly had instructed a jury to assess damages based on the lost profits and going-concern value of Coastal Fuels at the time of trial, instead of at the time that Coastal Fuels had gone out of business.

Mover’s & Warehousemen’s Association of Greater New York, Inc. v. Long Island Moving & Storage Association, Inc., 1999 WL 1243054 (E.D.N.Y. 1999).

On December 27, 1999, the District Court for the Eastern District of New York, in an unpublished decision, dismissed a claim that certain moving companies had conspired to induce plaintiff’s customers to boycott and fraudulent litigation, in violation of § 1 of the Sherman Act (15 U.S.C. § 1). The Court held that the plaintiff’s conspiracy allegations were conclusory and did not plead sufficient facts to entitle it to relief, and that the sham litigation allegations were barred by the Noerr-Pennington doctrine because the suits had not been objectively baseless.

Endsley v. City of Chicago, 230 F.3d 276 (7^th Cir. 2000).