Opinion ID: 382196
Heading Depth: 1
Heading Rank: 1

Heading: Jurisdiction of the FTC

Text: 6 Petitioner's first argument is that the Commission lacks jurisdiction over it in this case. 2 Section 5(a)(2) empowers the Commission to prevent . . . corporations, except . . . air carriers . . . subject to the Federal Aviation Act of 1958, . . . from using unfair methods of competition . . . and unfair or deceptive acts or practices in or affecting commerce. 15 U.S.C. § 45(a)(2). 3 7 Donnelley is not subject to the Federal Aviation Act and, therefore Donnelley is really arguing that the FTC cannot even regulate non-carrier corporations when the FTC's purpose is to prevent unfair competition in the airline industry. But this argument confuses the broad mandate given to the Commission to enforce section 5 with the narrow exemption from the Commission's jurisdiction that is granted to air carriers subject to CAB jurisdiction. The analogous surface common carrier exemption in the FTC Act, as the Seventh Circuit has held, is in terms of status as a common carrier subject to the Interstate Commerce Act, not activities subject to regulation under that Act. FTC v. Miller, 549 F.2d 452, 455 (7th Cir. 1977). Similarly, here, it is of no significance that the publishing of airline schedules is an activity affecting competition among air carriers subject to the Federal Aviation Act. Since Donnelley is not itself an air carrier, it is not beyond the Commission's jurisdiction. Cf. Breen Air Freight, Ltd. v. Air Cargo, Inc., 470 F.2d 767, 771-72 (2d Cir. 1972) (corporation formed as subsidiary of airlines for purpose of acting as agent for terminal and cartage services was not an air carrier within Federal Aviation Act), cert. denied, 411 U.S. 932, 93 S.Ct. 1901, 36 L.Ed.2d 392 (1973). 8 The only case that petitioner really has to go on is Fruit Growers' Express Inc. v. FTC, 274 F. 205 (7th Cir. 1921), cert. dismissed, 261 U.S. 629, 43 S.Ct. 518, 67 L.Ed. 835 (1923). In that case the Commission had issued a cease and desist order, holding unlawful a contract between the petitioner supplier of equipment and certain common carriers who were exempt from the Commission's jurisdiction. The reviewing court held that the carriers were necessary parties to any proceeding concerning the contract, and therefore the Commission could not enter any order affecting it because the carriers were all subject to exclusive ICC jurisdiction. But in the present case there is no claim that air carriers are necessary parties. The Commission has specifically found Donnelley's action to be unilateral abuse of its market position and has specifically found that air carriers were not parties to the allegedly illegal acts.