Square D Company v. Niagara Frontier Tariff Bureau, Inc.

PETITIONER: Square D Company, et al.
RESPONDENT: Niagara Frontier Tariff Bureau, Inc., et al.
LOCATION: United States District Court for the Western District of New York

DOCKET NO.: 85-21
DECIDED BY: Burger Court (1981-1986)
LOWER COURT: United States Court of Appeals for the Second Circuit

CITATION: 476 US 409 (1986)
ARGUED: Mar 03, 1986
DECIDED: May 27, 1986
GRANTED: Oct 07, 1985

ADVOCATES:
Donald L. Flexner - on behalf of the respondents
Douglas V. Rigler - on behalf of the petitioners
Lawrence G. Wallace - on behalf of the United States as amicus curiae in support of the petitioners

Facts of the case

The petitioners represented a group of corporations that used a group of motor carriers regulated by the Niagara Frontier Tariff Bureau, Inc. (NFTB), an organization that engaged in collective ratemaking activities for shipping goods over the border between the United States and Canada. The petitioners sued the carriers and alleged that, between 1966 and 1981, the group had engaged in price fixing that violated the terms of the NFTB agreement and could not be approved by the Interstate Commerce Commission (ICC). The petitioners argued that during those years they paid higher rates than they would have in a freely competitive market and sought treble damages on that difference, along with declaratory and injunctive relief. The district court dismissed the case based on precedent set by a previous Supreme Court decision. The U.S. Court of Appeals for the Second Circuit affirmed the district court’s decision regarding the treble damages and remanded for further hearings to determine whether the petitioners were entitled to injunctive relief.

Question

If prices were fixed in such a way that should be forbidden by the Sherman Act and should not have been approved by the Interstate Commerce Commission, should the carriers be subject to treble damages?

Media for Square D Company v. Niagara Frontier Tariff Bureau, Inc.

Audio Transcription for Oral Argument - March 03, 1986 in Square D Company v. Niagara Frontier Tariff Bureau, Inc.

Warren E. Burger:

We will hear arguments first this morning in Square D Company against Niagara Frontier Tariff Bureau.

Mr. Rigler, you may proceed whenever you are ready.

Douglas V. Rigler:

Mr. Chief Justice, and may it please the Court, the issue presented in this proceeding is whether motor carriers who conspire in violation of the antitrust laws, who violate their filed rate bureau agreement, and who violate provisions of the Interstate Commerce Act are immune from damage suits brought under the antitrust laws by the victims of their illegal conspiracy.

The petitioners here today are two shippers who brought suit in a class representative capacity with respect to the transport of commodities by motor freight between points in the eastern and central United States and the province of Ontario, Canada.

The respondents are the Niagara Frontier Tariff Bureau, a regulated rate bureau, and five member trucking company carriers of that bureau.

The action closely parallels the United States Government action not brought under the antitrust laws which was settled by consent decree.

At the District Court level the defendant's carriers moved to dismiss the case, and the District Court granted that motion, holding that maintenance of an action for damages under the antitrust laws was barred by application of this Court's 1922 decision in Keogh versus Chicago and Northwest Railroad.

The Second Circuit Court of Appeals reluctantly upheld the District Court, holding that the task of overruling Keogh if it is to be overruled is for this Court, but the Second Circuit expressed substantial doubt that any of the basic rationale which necessitated the Court's Keogh ruling in 1922 is valid today.

Harry A. Blackmun:

Are you asking that Keogh be overruled?

Douglas V. Rigler:

Yes, I am, Your Honor.

Harry A. Blackmun:

Specifically?

Douglas V. Rigler:

Yes.

Keogh should be overruled because the passage of the Reed-Bullwinkle Act and subsequent decisions of this Court have rendered it inapplicable under the clear repugnancy doctrine which necessitated it in the original instance.

William J. Brennan, Jr.:

Do you lose if we don't overrule?

Douglas V. Rigler:

Do I lose?

William J. Brennan, Jr.:

If we don't overrule Keogh.

Douglas V. Rigler:

We are not able to pursue our damage claims.

We still have an action pending for injunction, and the Second Circuit did give leave to amend in the event there were claims outside of the Keogh doctrine, but basically the answer is, yes, we do, Mr. Justice Brennan.

The allegations of the complaint are to be accepted as correct for purposes of this proceeding.

Those allegations are that notwithstanding the fact that they had a Bureau agreement on file at the ICC which would have given these carriers antitrust exemption, they organized a secret committee of principles or top management executives, and that these principles met to fix prices, to engage in anticompetitive acts, and to coerce other carriers into withdrawing or withholding independent rate filings which were lower and would have had the effect of lowering the overall tariff structures.

Now, the act of coercing other carriers into withholding or withdrawing their independent rate filings is explicitly and specifically forbidden by the Interstate Commerce Act.

Thus the conduct at issue here violates the antitrust laws and the Interstate Commerce Act.

Lewis F. Powell, Jr.:

May I ask this question?

If there had been no violation of the filed rate schedules, would you be making the same argument?

Douglas V. Rigler:

I am not sure I entirely understand the question, Justice Powell, because the part of the damage claim relating to coercion would still be valid.

In other words, they prevented rates from being filed, and yes, we would be asserting an antitrust clause of action based on the coercion which precluded other carriers from exercising their statutory right to file lower rates.

Lewis F. Powell, Jr.:

I am not sure I understand the case either, but if the filed rates had been specifically approved by the Interstate Commerce Commission, would you be here?

Douglas V. Rigler:

Yes, sir, I would.

Lewis F. Powell, Jr.:

Assuming no violation.

Douglas V. Rigler:

We are not attacking the ratemaking process.