Opinion ID: 771934
Heading Depth: 2
Heading Rank: 2

Heading: Transpacific

Text: 23 In 1987, the FMC proposed a rule that would have allowed voluntary filing of agreements that are not subject to the filing requirement of Section 5(a). 52 Fed. Reg. 46,501 (proposed Dec. 8, 1987). Under the proposed rule, such voluntarily filed agreements would thereby be brought within the Section 7(a)(1)--(2) antitrust immunity for filed agreements. Id. 24 After receiving comments from various parties, including vigorous opposition from the Department of Justice, the FMC withdrew the proposed rule. The FMC reasoned that an entity is a common carrier only insofar as it provides transportation services between the United States and a foreign country-when such a carrier provides foreign-to-foreign transportation services, it does not, as regards those services, qualify as a common carrier under the Act. Thus, agreements concerning foreign-to-foreign transportation are not agreements within the scope of the Act under Section 4, because they are not agreements among common carriers (i.e., for purposes of those agreements, the parties are not acting as common carriers). See Transpacific, 951 F.2d at 953. On this basis, the FMC issued an order in which it held that it had jurisdiction only over agreements concerning transportation between the United States and a foreign country. The order rejected the concept of voluntary filing and stated that an agreement that concerned both regulated and unregulated activity (a mixed agreement) could no longer be filed in its entirety. Thus, only those portions of a mixed agreement that concerned United States--to-foreign transportation could be filed and thereby brought within the antitrust immunity provisions of Section 7(a)(1)--(2). See Transpacific, 951 F.2d at 952. 25 The Transpacific Westbound Rate Agreement, an association of ocean common carriers, challenged the FMC's order. Transpacific argued that the FMC did have jurisdiction over the foreign-to-foreign portions of mixed agreements and, in the alternative, defended the concept of voluntary filing. Transpacific, 951 F.2d at 952. The Department of Justice and the FMC jointly filed a brief in support of the order. This court found no error in the FMC's interpretation of the Shipping Act and upheld the FMC's order. Transpacific, 951 F.2d at 957. 26 Appellants now argue that the government's position in Transpacific conflicts with the government's position in the Tucor prosecution, for the following reasons: In Transpacific, the government defended the FMC's position that an entity qualifies as a common carrier only insofar as it engages in United States--to-foreign transportation. Section 7(a)(4), the antitrust immunity provision at issue in the Tucor prosecution, concerns only foreign-to-foreign transportation. Therefore, under the reasoning successfully advocated by the government in Transpacific, Section 7(a)(4) cannot apply to common carriers. But the government contended throughout the Tucor prosecution that Section 7(a)(4) applies to common carriers and to no one else. 27 This argument amounts to nothing more than a terminological confusion. The government's position in the Tucor prosecution was that the immunity provisions in Section 7 apply only to entities that engage in some common carrier activity, that is, to entities that do qualify as common carriers for at least some of the transportation services that they provide. On this reading, Section 7(a)(4) immunizes any agreements among such entities that concern foreign-to-foreign transportation. It is true that, under the reasoning of Transpacific, those entities are not common carriers for purposes of those agreements. But the government's position in the Tucor prosecution was simply that those entities would not be eligible for the Section 7(a)(4) immunity if they were not common carriers for purposes of some other transportation services that they provide. 28 There is no substantive conflict between that position and the position successfully advocated by the government in Transpacific. At most, Appellants' argument shows that the government should have used the term common carrier more carefully in describing its position in the Tucor prosecution. Instead of saying that Section 7(a)(4) applies only to ocean common carriers, the government should have said that Section 7(a)(4) applies only to entities that engage in some activity that qualifies them as ocean common carriers with respect to that activity, although the activity that makes them ocean common carriers is not itself immunized by Section 7(a)(4). 29 Moreover, some of the reasoning of Transpacific actually supports the underlying premise of the government's position in the Tucor prosecution, namely, that the scope of the antitrust immunities granted by the Act should be tied to the regulatory jurisdiction conferred on the FMC by the Act. In Transpacific, we reasoned that because the Act describes the FMC's regulatory powers as limited to common carriers, it is unlikely that the Act was meant to confer antitrust immunity on any entities that are not common carriers. See 951 F.2d at 954. It does not seem logical that Congress intended to confer antitrust immunity on parties largely outside of the regulatory power of the FMC . . . . Id. In this way, the reasoning of Transpacific actually embraces, rather than conflicts with, the position advocated by the government in the Tucor prose-cution. Transpacific thus makes the government's position in the Tucor prosecution look more plausible than it otherwise would; it does not undermine it. 30 For all of these reasons, we reject Appellants' argument that the government's position in the Tucor prosecution was contrary to the position successfully advocated by the government in Transpacific.