Opinion ID: 428294
Heading Depth: 1
Heading Rank: 2

Heading: the commission's jurisdiction over the dart agreement

Text: 11 The first issue in this case is necessarily that which this Court remanded to the Commission for a full report: whether the FMC had statutory jurisdiction over Agreement No. 9745, establishing Dart, and amendments thereto. The Commission's Report on Remand has convinced us that the FMC had a sufficient factual basis for its assertion of jurisdiction. 12 Preliminarily, it is important that it was Dart itself that invoked the Commission's jurisdiction. While Dart may have initially contended that FMC approval of the stock transfer was not necessary, Dart did ultimately petition for, and receive the agency's approval. Even more importantly, Dart initially invoked the Commission's jurisdiction when it first sought approval of Agreement No. 9745 as a shield against the antitrust laws, and when it sought the first two amendments to the Agreement. In a case remarkably similar to that at bar, the Supreme Court held:[A]ppellant, having invoked the power of the [Interstate Commerce] Commission to approve the transfer of the amended certificate to it, is now estopped to deny the Commission's power to issue the certificate in its present form and as it existed prior to the time the appellant sought its transfer. United Fuel Gas Co. v. Railroad Comm'n, 278 U.S. 300, 307-08 [49 S.Ct. 150, 151-152, 73 L.Ed. 390 (1929) ]; St. Louis Malleable Casting Co. v. Prendergast Construction Co., 260 U.S. 469 [43 S.Ct. 178, 67 L.Ed. 351 (1923) ] ... The appellant cannot blow hot and cold and take now a position contrary to that taken in the proceedings it invoked to obtain the Commission's approval. 13 Callanan Road Improvement Co. v. United States, 345 U.S. 507, 513, 73 S.Ct. 803, 806, 97 L.Ed. 1206 (1953); see Admiral Towing Co. v. Woolen, 290 F.2d 641, 644-45 (9th Cir.1961). Although a party's petition cannot bestow statutory jurisdiction upon an agency, the party's invocation of an agency's jurisdiction may preclude later attacks on that jurisdiction, at least where a colorable basis for jurisdiction exists. In this case, Dart apparently did not deny the Commission's jurisdiction over Agreement No. 9745 until oral argument in this case. 3 Thus under the present circumstances, Dart's attack on the FMC's jurisdiction is launched from a very weak position. 14 In any event, the Commission has demonstrated adequately that its jurisdiction was well founded. The statutory requirement is as follows: 15 Every common carrier by water, or other person subject to this Act, shall file immediately with the Commission a true copy, or, if oral, a true and complete memorandum, of every agreement with another such carrier or other person subject to this chapter, or modification or cancellation thereof, to which it may be a party or conform in whole or in part, fixing or regulating transportation rates or fares; giving or receiving special rates, accommodations, or other special privileges or advantages; controlling, regulating, preventing, or destroying competition; pooling or apportioning earnings, losses, or traffic; allotting ports or restricting or otherwise regulating the number and character of sailings between ports; limiting or regulating in any way the volume or character of freight or passenger traffic to be carried; or in any manner providing for an exclusive, preferential, or cooperative working arrangement. 16 46 U.S.C. Sec. 814 (1976 & Supp. V 1981) (emphasis added). The term common carrier by water is broadly defined as a common carrier by water in foreign commerce ... on regular routes from port to port. 46 U.S.C. Sec. 801 (1976 & Supp. V 1981). 17 In 1969, Dart first filed Agreement No. 9745 over which the Commission exercised its statutory jurisdiction. The original Agreement, paragraph 1, stated: 18 Each of the parties to this Agreement is, or will be either in its own name or through its wholly-owned subsidiary, at the time of the operative events hereinafter described, a common carrier by water in the commerce between Europe and/or Eastern Canada and the United States. 19 Having thereby in 1969 conceded the common carrier status of the individual parties to the Agreement, Dart did not attempt to refute the Commission's jurisdiction until this appeal. At no time has Dart provided any evidence, fresh or otherwise, to back up its present claim that the Commission lacks jurisdiction; rather it has preferred to rely upon conclusory statements. Most notably, Dart held itself aloof from participation in the Commission's inquiry into jurisdiction upon remand. 20 Dart's basic contention is that as a single entity (a Bermuda corporation formed by three steamship company shareholders) it was not subject to Commission jurisdiction under Section 15. Dart's Reply to Report on Remand at 2. Dart's claim to single-carrier status for section 15 purposes is unconvincing. First, the contention flies in the face of the above-quoted provision of the original Agreement, which conceded the common carrier status of each participant. Second, elementary principles of antitrust law render Dart's legal status as a Bermuda corporation immaterial to its status under statutes regulating competition. See United States v. Penn-Olin Chemical Co., 378 U.S. 158, 168, 84 S.Ct. 1710, 1715, 12 L.Ed.2d 775 (1964); United States v. Mammoth Oil Co., 14 F.2d 705, 729 (8th Cir.1926), aff'd, 275 U.S. 13, 48 S.Ct. 1, 72 L.Ed. 137 (1927). The Commission is duty-bound to look beyond the corporate facade to the functional substance of the Dart arrangement. In substance, as opposed to corporate form, Dart is comprised of three carriers acting in concert. By its very terms, paragraph 2(b) of the Agreement forecloses competition among its parties: [N]one of the parties hereto will act as principal or agent for any competing service in the trade covered herein. 21 Furthermore, the Commission demonstrated upon remand that evidence on the record supported the FMC's conclusion that two affiliates of the parties to the Agreement, Belge and Consolidated, are presently operating as statutory common carriers by water. The share purchase and shareholder agreements between the Dart parties, as well as paragraph 2(b) of Agreement No. 9745 itself, impose obligations and restrictions upon such affiliates. Thus on the record before the Commission, it was fully justified in concluding that an adequate basis for statutory jurisdiction existed in that Dart involved several carriers. 22