Opinion ID: 771934
Heading Depth: 2
Heading Rank: 1

Heading: The Shipping Act and Appellee's Interpretation of the Antitrust Immunities

Text: 14 Section 3 of the Shipping Act defines common carrier as follows: 15 [C]ommon carrier means a person holding itself out to the general public to provide transportation by water of passengers or cargo between the United States and a foreign country for compensation that-- 16 (A) assumes responsibility for the transpor tation from the port or point of receipt to the port or point of destination, and 17 (B) utilizes, for all or part of that transpor tation, a vessel operating on the high seas or the Great Lakes between a port in the United States and a port in a foreign coun try . . . . 18 46 U.S.C. app. S 1702(6). Person is defined to include individuals, corporations, partnerships, and other associations recognized by law. Id. S 1702(18). An ocean common carrier is defined as a vessel-operating common carrier. Id. S 1702(16). 19 Section 4 of the Act, entitled Agreements within scope of chapter, provides that the Act applies to agreements by or among ocean common carriers regarding certain specified activities, and also to a narrower range of agreements among marine terminal operators. Id. S 1703(a), (b). Section 5 then provides that a true copy of any agreement covered by Section 4 must be filed with the Federal Maritime Commission (FMC), but Section 5 also creates an exception to the filing requirement for agreements related to transportation to be performed within or between foreign countries and agreements among common carriers to establish, operate, or maintain a marine terminal in the United States. Id. S 1704(a). 20 Section 7 then lists certain agreements and activities to which [t]he antitrust laws do not apply.  Id. S 1706(a). In particular, Sections 7(a)(1) and 7(a)(2) essentially immunize all agreements filed under Section 5. Id.S 1706(a)(1)--(2). Section 7(a)(4), which in Tucor II was held to apply to Appellants' conduct, immunizes any agreement or activity concerning the foreign inland segment of through transportation that is part of transportation provided in a United States import or export trade. Id. S 1706(a)(4). Section 7(a)(4) does not make any explicit reference to common carriers or to ocean common carriers. Also, it deals only with foreign-toforeign transportation (the foreign inland segment of through transportation), whereas the Act defines common carrier in terms of transportation between the United States and a foreign country. 21 These considerations tend to make the government's position in Tucor I and Tucor II, namely, that the grant of immunity in Section 7(a)(4) applies only to ocean common carriers, look unreasonable. But the government's position gains at least some measure of reasonableness when it is understood in terms of the following general underlying premise: According to the government, the antitrust immunities granted by the Shipping Act were intended to be limited to the entities, activities, and agreements that are brought within the FMC's regulatory jurisdiction by the Act. In essence, the point of Section 7(a)(4), according to the government, is to immunize agreements (and consequent activities) that are within the scope of the Act under Section 4 but that fall within Section 5(a)'s exception for foreign-to-foreign agreements among ocean common carriers. Because such agreements are not required to be filed under Section 5(a), they are not immunized by Sections 7(a)(1) and 7(a)(2). The purpose of Section 7(a)(4), according to the government, is to fill part of that gap, but as a result it is limited to agreements (and consequent activities) among ocean common carriers. 22 These considerations do not, of course, entirely resolve the tensions between the statutory text and the position that the government advocated, and its interpretation of Section 7(a)(4) was ultimately rejected by this court in Tucor II. But placed in the context of the government's understanding ofthe interplay between the regulatory scope of the Shipping Act and the antitrust immunities that the Act provides, the government's interpretation of Section 7(a)(4) does not seem nearly as contrary to the plain meaning of the statute as it might appear on first look. Other than repeatedly asserting that the government's position is obviously at odds with the statutory text, Appellants have presented no arguments to show that the district court abused its discretion in finding that that position was not so obviously wrong as to be frivolous.