Siegel Transfer, Inc. v. Carrier Express, Inc.

Opinions of the United
1995 Decisions States Court of Appeals
for the Third Circuit
5-12-1995
Siegel v Carrier Express
Precedential or Non-Precedential:
Docket 94-1885
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UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 94-1885
___________
SIEGEL TRANSFER, INC.; ROBIN EXPRESS
TRANSFER, INC.; JORUSS TRUCKING, INC.,
Appellants
vs.
CARRIER EXPRESS, INC.; BETHRAN, INC.;
BETHLEHEM STEEL CORPORATION
___________
Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil No. 92-cv-07370)
___________
Argued
March 27, 1995
Before: MANSMANN, COWEN and LEWIS, Circuit Judges.
(Filed May 12, 1995)
___________
David H. Moskowitz, Esquire (ARGUED)
David H. Moskowitz & Associates
1890 Rose Cottage Lane
Malvern, PA 19355
COUNSEL FOR APPELLANTS
Nancy J. Gellman, Esquire (ARGUED)
Debra C. Swartz, Esquire
Conrad, O'Brien, Gellman & Rohn
1515 Market Street
16th Floor
Philadelphia, PA 19102
COUNSEL FOR APPELLEES
___________
OPINION OF THE COURT
__________
MANSMANN, Circuit Judge.
This case arises out of the termination of a motor
carrier contract. The plaintiffs, Siegel Transfer, Inc., Robin
Express Transfer, Inc., and Joruss Trucking, Inc., alleged that
the contract's termination and subsequent refusals to deal on the
part of the defendants, Bethlehem Steel Corporation and its
subsidiaries, Bethran, Inc. and Carrier Express, Inc., violated
section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1. The
plaintiffs also charged the defendants with violations of the
Interstate Commerce Act, 49 U.S.C. § 10101 et seq., and the
Elkins Act, 49 U.S.C. §§ 11901-11903, 11915-11916, and with
several state law causes of action. The plaintiffs now appeal
the district court's decision to grant the defendants' motion for
summary judgment and motion to dismiss. The issues we address
are whether the companies in the Bethlehem Steel corporate family
and their agents were legally capable of engaging in an antitrust
conspiracy with each other, whether the plaintiffs had a private
right of action under the federal transportation statutes, and
whether the defendants breached the parties' agreement.
In the wake of the Supreme Court's decision in
Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752 (1984),
we hold that the defendants were legally incapable of conspiring
with one another or with their agents. We also find that neither
the Interstate Commerce Act nor the Elkins Act authorizes the
plaintiffs to file a private cause of action in a federal court.
Finally, we conclude that the defendants are not liable for
breach of contract. Thus, we will affirm the judgment of the
district court.
I.
We begin our analysis by reviewing the evidence
presented in this case. In considering a motion for summary
judgment, a court does not resolve factual disputes or make
credibility determinations, and must view facts and inferences in
the light most favorable to the party opposing the motion. Big
Apple BMW, Inc. v. BMW of North America, Inc., 974 F.2d 1358,
1363 (3d Cir. 1992), cert. denied, ___ U.S. ___, 113 S. Ct. 1262(1993).
Siegel Transfer, Robin Express, and Joruss Trucking
were owned by Russell Siegel and his wife, and were based in
Sparrows Point, Maryland. Siegel Transfer, a motor contract
carrier,1 hauled steel, lumber, telephone poles and heavy
1
. Under the Interstate Commerce Act, motor carriers fall
into two defined categories: motor common carriers and motor
contract carriers:
§ 10102. Definitions
In this subtitle --
(14) "motor common carrier" means a person
holding itself out to the general public to
provide motor vehicle transportation for
compensation over regular or irregular
routes, or both.
(15) "motor contract carrier" means --
(A) a person, other than a motor
common carrier, providing motor vehicle
transportation of passengers for
equipment for various shippers; Robin Express leased trucks,
trailers and drivers to Siegel Transfer and other carriers; and
Joruss Trucking also leased trucks to Siegel Transfer.
In 1985, Bethlehem Steel made plans to acquire two
motor carriers, Bethran and Carrier Express, through its
subsidiary, the Philadelphia Bethlehem and New England Railroad.
While Bethlehem Steel did not anticipate that it would satisfy
all of its transportation needs by acquiring these carriers, it
hoped to capture at least a portion of the revenue it was paying
to outside truckers.
(..continued)
compensation under continuing
agreements with a person or a limited
number of persons---
(i) by assigning motor vehicles
for a continuing period of time
for the exclusive use of each
such person; or
(ii) designed to meet the
distinct needs of each such
person; and
(B) a person providing motor vehicle
transportation of property for
compensation under continuing
agreements with one or more persons--
(i) by assigning motor vehicles
for a continuing period of time
for the exclusive use of each
such person; or
(ii) designed to meet the
distinct needs of each such
person.
49 U.S.C. § 10102(14),(15).
Because section 11341 of the Interstate Commerce Act
gives the Interstate Commerce Commission exclusive authority to
oversee acquisitions of this type, Bethlehem and the Railroad
filed a petition, requesting permission to acquire control2 of
Bethran and Carrier Express, without having to engage in the
Commission's prior approval process. Section 11343(e) authorizes
the Commission to exempt an acquisition from regulatory oversight
if it finds that regulation is not necessary to carry out the
transportation policy of the Act,3 and the acquisition is limited
in scope or unlikely to result in an abuse of market power. 49
U.S.C. § 11343(e). Finding that the proposed acquisition met
these criteria, the Commission exempted it from the Act's prior
approval requirements. Under section 13341, the Commission's
exemption not only authorized the parties to proceed with the
acquisition, but immunized it from the antitrust laws as well.
49 U.S.C. § 13341. Once the acquisition was finalized, Bethlehem
Steel owned 99.92% (8,993 of 9,000 shares) of the Railroad's
2
. The Act defines "control" in pertinent part as "actual
control, legal control, and the power to exercise control,
through or by (A) common directors, officers, stockholders, a
voting trust, or a holding or investment company, or (B) any
other means." 49 U.S.C. § 10102(7).
3
. The Act aims to recognize and preserve the inherent
advantages of various modes of transportation; promote safe,
economical and efficient transportation; encourage sound economic
conditions among carriers; encourage the establishment and
maintenance of reasonable rates without unreasonable
discrimination or unfair or destructive competitive practices;
coordinate federal and state efforts on transportation matters;
and encourage fair wages and working conditions in the
transportation industry. 49 U.S.C. § 10101.
stock;4 the Railroad owned 100% of Bethran's stock; and Bethran
owned 100% of Carrier Express' stock.
Carrier Express, already a licensed common and contract
carrier, obtained broker authority from the Commission.
Organized to operate without exit barriers, Carrier Express did
not hire employees, acquire equipment or engage its own drivers.
Instead, it used commissioned, non-exclusive agents in different
parts of the country to make arrangements with owner-operators or
with other carriers who had access to trucks and drivers to carry
the freight it was under contract to transport. The agents made
hauling arrangements with whomever Carrier Express authorized to
transport its freight.
Carrier Express operations were managed by Oak
Management, Inc. Under the parties' contract, Oak Management
oversaw all of Carrier Express' day-to-day functions and received
a percentage of Carrier Express' revenues as payment for its
services. Thomas Rediehs, a Vice President of Carrier Express,
was the owner and President of Oak Management, and Kermit Bryan
was Oak Management's Executive Vice President.
Oak Management also managed the operations of Rediehs
Express, a motor common carrier, motor contract carrier and
broker. Rediehs' wife and children owned Rediehs Express, and
Bryan was its Operations Manager. Rediehs Express hauled
4
. The seven shares of stock that Bethlehem Steel did not
own were issued in the name of the Railroad's current officers,
and could not be sold or transferred. Whenever the Railroad
replaced an officer, the stock was reissued in the new officer's
name.
Bethlehem Steel products from Bethlehem Steel's plant located in
Burns Harbor, Indiana, and did some business with Carrier
Express.
Under its motor contract carrier operating authority,
Carrier Express entered into a contract dated January 15, 1986
with Bethlehem Steel, agreeing to transport Bethlehem Steel goods
at given rates. In July, 1988, a contract between Bethlehem
Steel and Bethran was assigned to Carrier Express,5 which
obligated Carrier Express to refund to Bethlehem Steel a sum
equal to 5% of the total revenue it received for transporting
Bethlehem Steel freight.
In late 1985, Siegel Transfer, Carrier Express and
"Bethran doing business as Carrier [Express]" executed a
"Contract for Transportation of Property Between A Motor Carrier
Broker [Carrier Express] and a Motor Contract Carrier [Siegel
Transfer] In Accordance With the Provisions of 49 C.F.R. 1053."
The contract took effect on January 4, 1986, and after an initial
term of three years, remained in effect from year to year,
subject to the right of either party to terminate upon thirty
days' written notice. Under the contract, Carrier Express was
obligated to offer Siegel Transfer a minimum of 30,000 pounds of
authorized commodities per year for transport and to pay Siegel
Transfer 90% of the freight rate received by Carrier Express from
the shipper. Russell Siegel was named a Carrier Express agent
for the Baltimore area and agreed to receive a 6% commission from
5
. In July, 1988, Bethran ceased motor carrier operations.
Carrier Express on the loads he arranged for shipment by
companies other than Siegel Transfer.
While the contract was in effect, Siegel Transfer
transported Bethlehem Steel goods received from Carrier Express
almost exclusively out of Bethlehem Steel's Sparrows Point plant.
As to the Bethlehem Steel freight offered by Carrier Express to
Siegel Transfer for transport, the 5% refund that Carrier Express
owed to Bethlehem Steel was paid from the 10% of the freight rate
Carrier Express retained, not from the 90% of the freight rate
that Siegel Transfer was paid.
In 1988, while carrying freight received from Carrier
Express, a Siegel Transfer vehicle was involved in a serious
accident in Alabama. Joined in the lawsuit which followed,
Carrier Express paid a substantial sum of money to settle the
claims brought against it. That same year, another Siegel
Transfer vehicle was involved in another serious accident in
Georgia. In December of 1989, Carrier Express was temporarily
suspended from transporting goods for Bethlehem Steel because
Siegel Transfer had violated Bethlehem Steel's loading and weight
limit rules.
James C. Matthews, Vice-President of Carrier Express
and Bethran, was aware of and concerned about these incidents.
In 1989, Matthews decided to terminate Carrier Express' contract
with Siegel Transfer. This decision was based, according to
Matthews, on his unwillingness to expose Carrier Express to the
continued risks of doing business with Siegel Transfer. Matthews
spoke of his intention to terminate the contract with Carl
Eckenrode, the President of Bethran, Carrier Express and the
Railroad, and a Bethran director; Steven Mollman, Bethran's
operations manager and one of its directors; and William Van
Heel, a district transportation manager of Bethlehem Steel and a
Bethran director. Additionally, Matthews informed Rediehs and
Bryan of his decision. Believing that Carrier Express would not
be able to find owner-operators or carriers to perform the
hauling that Siegel Transfer was handling and would, therefore,
suffer a loss of revenue and profit, Rediehs argued against the
termination.
Matthews, Rediehs, Bryan and Van Heel convened on
January 4, 1990 at Bethlehem Steel's Sparrows Point plant to
inform Siegel that Carrier Express' contract with Siegel Transfer
was terminated. Prior to their speaking personally with Siegel,
Rediehs again voiced his opposition to the termination.
Matthews, however, refused to alter his decision. Consequently,
when Siegel arrived at the meeting, he was told of the
termination, and later that day, received written notice from
Matthews.
During the thirty-day notice period which followed,
Carrier Express offered Siegel Transfer over 600,000 pounds of
freight to transport. At Carrier Express' direction, Oak
Management commenced instructing Carrier Express agents that the
contract with Siegel Transfer had been terminated and that Siegel
Transfer was no longer authorized to carry Carrier Express
freight. As an accommodation to Carrier Express, Oak Management
assumed responsibility for the Baltimore Carrier Express agency
at a 4% commission rate, but only reluctantly, expecting that the
agency would be unprofitable. Just as Rediehs had anticipated,
Carrier Express was unable to find trucks to replace those that
Siegel Transfer had made available; the amount of freight that
Carrier Express transported out of Sparrow Point decreased and
its revenues declined. Oak Management, in turn, suffered a
financial loss. Moreover, Oak Management lost money as Carrier
Express' Baltimore agent and relinquished the position in 1991.
Shortly after the contract's termination, Robin Express
leased all of its trucks and drivers to Ligon Nationwide, a
trucking company of substantial size. Under the arrangement with
Ligon Nationwide, which lasted for approximately one year, Robin
Express trucks were used to transport freight for several
shippers, including Bethlehem Steel. During this time, one of
the Bethlehem Steel district transportation superintendents, for
whom Siegel Transfer's safety record was unacceptable, advised an
agent for Glass Container, a motor carrier, not to use Siegel
equipment to haul products from the Bethlehem Steel rod mill
located in Sparrows Point.
In February, 1990, Siegel Transfer relinquished its
contract carrier operating authority and ceased doing business;
Joruss Trucking suspended operations in July, 1990. In November
1990, Robin Express entered into lease agreements with other
truckers, who used Robin Express trucks and drivers to carry
loads for Bethlehem Steel and a number of other shippers. Unable
to secure a sufficient amount of business, however, Robin Express
ceased to operate in 1991.
On December 23, 1992, Siegel Transfer, Robin Express
and Joruss Trucking commenced this action against Carrier
Express, Bethran and Bethlehem Steel. On February 15, 1994, the
plaintiffs filed an Amended Complaint, asserting two federal
causes of action, one under section 1 of the Sherman Act, 15
U.S.C. § 1 (Count I), and the other under the Interstate Commerce
Act, 49 U.S.C. § 10101 et seq., and the Elkins Act, 49 U.S.C. §§
11901-11903, 11915-11916 (Count XI), as well as several state law
claims: violations of the Maryland Antitrust Act (Count II),
breach of contract (Counts III and IV), breach of the implied
covenant of good faith (Counts VII and VIII), promissory estoppel
(Count VI) and civil conspiracy (Count XI).
On March 21, 1994, the defendants filed a motion to
dismiss the plaintiffs' Interstate Commerce Act and Elkins Act
claims or, in the alternative, to refer them to the Interstate
Commerce Commission, and a motion for summary judgment on the
plaintiffs' other claims. On July 1, 1994, the district court
dismissed the federal transportation law claims, concluding that
neither the Interstate Commerce Act nor the Elkins Act gave the
plaintiffs a private right of action. Siegel Transfer, Inc. v.
Carrier Express, Inc., 856 F. Supp. 990, 1002-05 (E.D. Pa. 1994).
The court also granted summary judgment in the defendants' favor
on the plaintiffs' remaining claims, with the exception of Count
VI for promissory estoppel.6 On the antitrust and civil
conspiracy claims, the court concluded that the plaintiffs failed
to show that "two or more economic actors" conspired against
them, applying the Supreme Court's decision in Copperweld Corp.
v. Independence Tube Corp., 467 U.S. 752 (1984). 856 F. Supp. at
995-1002, 1005, 1009. As to the contract and implied duty of
good faith claims, the court rejected the plaintiffs' theory of
breach, finding it contrary to the clear and unambiguous language
of the parties' agreement. Id. at 1005-06, 1008-09.
On August 22, 1994, judgment was entered for the
defendants, and on September 8, 1994, the plaintiffs filed an
appeal. We will first address the federal antitrust issues this
appeal raises, the federal transportation law issues second, and
the state law questions third.
II.
Summary judgment may present the district court with an
opportunity to dispose of meritless cases and avoid wasteful
trials. Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1985).
This is true even in antitrust cases "where motive and intent
play leading roles, proof is largely in the hands of alleged
conspirators, and hostile witnesses thicken the plot." Big Apple
6
. Finding genuine issues of disputed fact, the district
court denied the defendants' motion for summary judgment as to
the promissory estoppel claim. Siegel Transfer, Inc. v. Carrier
Express, Inc., 856 F. Supp. 990, 1007-08 (E.D. Pa. 1994). On
August 22, 1994, a stipulation and order dismissing this claim
without prejudice was entered.
BMW, Inc. v. BMW of North America, Inc., 974 F.2d 1358, 1362 (3d
Cir. 1992), cert. denied, ___ U.S. ___, 113 S. Ct. 1262 (1993),
quoting Pollar v. Columbia Broadcasting System, Inc., 368 U.S.
464, 473 (1962).
Summary judgment must be granted where no genuine issue
of material fact exists for resolution at trial and the moving
party is entitled to judgment as a matter of law. Fed. R. Civ.
P. 56(c). On summary judgment, the moving party need not
disprove the opposing party's claim, but does have the burden to
show the absence of any genuine issues of material fact.
Celotex, 477 U.S. at 323. If the movant meets this burden, then
the opponent may not rest on allegations in pleadings, but must
counter with specific facts which demonstrate that there exists a
genuine issue for trial. Id. As in this case, when the
nonmoving party will bear the burden of proof at trial, the
moving party may meet its burden by showing that the nonmoving
party has not offered evidence sufficient to establish the
existence of an element essential to its case. Id. at 322. We
remain mindful that in ruling on a motion for summary judgment, a
court must assess the material facts against the proof required
of the plaintiff on substantive issues.
III.
Section 1 of the Sherman Act provides in pertinent part
that "[e]very contract, combination in the form of trust or
otherwise, or conspiracy, in restraint of trade or commerce . . .
is declared to be illegal." 15 U.S.C. § 1. For a section 1
claim under the Sherman Act, "a plaintiff must prove ``concerted
action,' a collective reference to the ``contract . . .
combination or conspiracy.'" Big Apple, 974 F.2d 1364, quoting
Bogosian v. Gulf Oil Corp., 561 F.2d 434, 445 (3d Cir. 1977),
cert. denied, 434 U.S. 1086 (1978). "Unilateral action, no
matter what its motivation, cannot violate [section] 1." Edward
J. Sweeney & Sons, Inc. v. Texaco, Inc., 637 F.2d 105, 110 (3d
Cir. 1980), cert. denied, 451 U.S. 911 (1981). A "``unity of
purpose or a common design and understanding or a meeting of the
minds in an unlawful arrangement' must exist to trigger section 1
liability." Copperweld, 467 U.S. at 771, quoting American
Tobacco Co. v. United States, 328 U.S. 781, 810 (1946). Proof of
concerted action requires evidence that two or more distinct
entities agreed to take action against a plaintiff. Weiss v.
York Hospital, 745 F.2d 786, 813 (3d Cir. 1984), cert. denied,
470 U.S. 1060 (1985).
Here the plaintiffs assert that Bethlehem Steel,
Bethran and Carrier Express, with several unnamed co-
conspirators, combined to eliminate the plaintiffs and stifle
competition among motor contract carriers transporting steel
products in the traffic lanes out of and back to Bethlehem
Steel's Sparrow Point plant. While it is difficult to derive
from the plaintiffs' pleadings and proof who participated in a
conspiracy to achieve this goal, we understand them to contend
that the companies in the Bethlehem Steel corporate family joined
with Oak Management to terminate the Carrier Express contract
with Siegel Transfer, and thereafter, enlisted assistance from
Oak Management, Thomas Rediehs, Kermit Bryan, Carrier Express
field agents, other motor carrier agents, and Rediehs Express to
deny them the opportunity to haul products for Bethlehem Steel.
The plaintiffs' evidence of concerted action with regard to
contract termination is the meeting the representatives of
Bethlehem Steel, Bethran, Carrier Express and Oak Management held
on January 4, 1990 to inform Russell Siegel that Siegel
Transfer's contract with Carrier Express would not be renewed;
their evidence of a concerted refusal to deal are the post-
termination contacts Oak Management had with Carrier Express
agents to advise them that Siegel Transfer was no longer
authorized to haul Carrier Express freight, and the directive
from a Bethlehem Steel district transportation superintendent to
a Glass Container agent not to use Siegel equipment to transport
Bethlehem Steel goods. The plaintiffs also contend that the 5%
refund Carrier Express paid to Bethlehem Steel is a per se
violation of the Sherman Act.
Before we evaluate the plaintiffs' evidence, we will
address the threshold issue of conspiratorial capacity in order
to determine who among the defendants and their alleged co-
conspirators, if anyone, could participate in an antitrust
conspiracy.
Until the Supreme Court's decision in Copperweld Corp.
v. Independence Tube Corp., 467 U.S. 752 (1984), related
corporations were generally perceived as separate entities
capable of concerted activity, a view which came to be known as
the "intra-enterprise conspiracy" doctrine. Id. at 759. In
Copperweld, however, the Supreme Court considered whether a
parent company and its wholly owned subsidiary are legally
capable of conspiring with one another under section 1 of the
Sherman Act, and determined that they are not. Id. at 759-77.
The fundamental question the Court confronted was whether an
agreement between a parent and its wholly owned subsidiary
represents the conduct of one economic actor or two.
In its opinion, the Court acknowledged that the Sherman
Act contains a basic distinction between concerted and
independent action, and discussed the reason why Congress chose
to treat concerted behavior more strictly:
Concerted activity inherently is fraught with
anticompetitive risk. It deprives the
marketplace of the independent centers of
decisionmaking that competition assumes and
demands. In any conspiracy, two or more
entities that previously pursued their own
interests separately are combining to act as
one for their common benefit. This not only
reduces the diverse directions in which
economic power is aimed but suddenly
increases the economic power moving in one
particular direction.
Id. at 768-69.
The Court then noted that although "[n]othing in the
literal meaning of [the] terms [of section 1] excludes
coordinated conduct among officers or employees of the same
company", it is obvious that an "internal ``agreement' to
implement a single firm's policies does not raise the antitrust
dangers that [section] 1 was designed to police." Id. at 769(emphasis in original).
Recognizing that section 1 is not violated by the
internally coordinated conduct of a corporation and one of its
unincorporated divisions because such conduct is essentially
undertaken by one economic actor pursuing a single firm's
interests and goals, the Court stated:
Although this Court has not previously
addressed the question, there can be little
doubt that the operations of a corporate
enterprise organized into divisions must be
judged as the conduct of a single actor.
. . . A division within a corporate
structure pursues the common interests of the
whole rather than interests separate from
those of the corporation itself . . . .
Because coordination between a corporation
and its division does not represent a sudden
joining of two independent sources of
economic power previously pursuing separate
interests, it is not an activity that
warrants § 1 scrutiny.
Id. at 770-71 (footnote omitted).
Similarly, the Court concluded that given the control a
parent wields over its wholly owned subsidiary, these parties
always share a "unity of purpose or a common design", and thus,
cannot engage in section 1 concerted activity:
A parent and its wholly owned subsidiary have
a complete unity of interest. Their
objectives are common, not disparate; their
general corporate actions are guided or
determined not by two separate corporate
consciousnesses, but one. . . . If a parent
and a wholly owned subsidiary do "agree" to a
course of action, there is no sudden joining
of economic resources that had previously
served different interests, and there is no
justification for § 1 scrutiny. . . .
[I]n reality a parent and a wholly owned
subsidiary always have a "unity of purpose or
a common design." They share a common
purpose whether or not the parent keeps a
tight rein over the subsidiary; the parent
may assert full control at any moment if the
subsidiary fails to act in the parent's best
interests.
Id. at 771-72 (footnote omitted)(emphasis in original).
Although the Court limited its holding to the case of a
parent and wholly owned subsidiary, it nonetheless encouraged the
courts to analyze the substance, not the form, of economic
arrangements when faced with allegations of intra-corporate
conspiracies:
The intra-enterprise conspiracy doctrine
looks to the form of an enterprise's
structure and ignores the reality. Antitrust
liability should not depend on whether a
corporate subunit is organized as an
unincorporated division or a wholly owned
subsidiary. A corporation has complete power
to maintain a wholly owned subsidiary in
either form. The economic, legal, or other
considerations that lead corporate management
to choose one structure over the other are
not relevant to whether the enterprise's
conduct seriously threatens competition.
Id. at 772-73 (footnote omitted).
IV.
A.
We turn now to examine the evidence proffered by the
plaintiffs in response to the defendants' motion for summary
judgment and their supporting evidence.
1. The Alleged Conspiracy Among the Bethlehem Steel
Companies
It is undisputed that, with the exception of the
Railroad, the Bethlehem Steel companies were wholly owned by the
parent company. Although Bethlehem Steel did not own .08% of the
Railroad's stock, the difference between its 99.92% ownership and
the 100% ownership in Copperweld is de minimus. See Satellite
Financial Planning Corp. v. First Nat'l. Bank, 633 F. Supp. 386,
395 (D. Del.), aff'd on reconsideration, 643 F. Supp. 449 (1986)
(the de minimus difference between 99% plus ownership and 100%
ownership does not diminish Copperweld's applicability).7 The
plaintiffs have not shown why an absolute rule of 100% ownership
must be applied in this case.8
Moreover, it is also beyond dispute that Bethlehem
Steel, with 8,993 of the Railroad's 9,000 outstanding shares of
7
. The courts have not only applied Copperweld in cases
involving de minimus deviations from 100% ownership, but have
also extended its principles to situations where parental
ownership was in the 80% to 91.9% range. Stephen Calkins,
Copperweld in the Courts: The Road to Caribe, 63 Antitrust L.J.
345, 351-41 (1995) (reviewing and commenting on the several
categories of judicial treatment of Copperweld).
8
. The plaintiffs argue that the mere fact that Bethlehem
Steel did not wholly own the Railroad requires that we reject
Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752 (1984),
and instead, seek guidance from the Supreme Court's decision in
United States v. Yellow Cab Co., 332 U.S. 218 (1947). In
Copperweld, the Supreme Court suggested that Yellow Cab may stand
"for a narrow rule based on the original illegality of the
affiliation" between a parent and its subsidiary. 467 U.S. at762 n. 6. Even this "narrow rule" does not apply: the
plaintiffs did not challenge Bethlehem Steel's original
acquisition of Bethran and Carrier Express on antitrust grounds;
nor do they challenge it here. We note, also, that the
Interstate Commerce Commission's order exempting the original
acquisition from regulation immunized it from the antitrust laws.
See supra, page 5.
stock, had complete control over the Railroad,9 as well as over
Bethran and Carrier Express. Hence, these companies were, in
substance, one economic unit, incapable of an antitrust
conspiracy under Copperweld. See Advanced Health-Care Services,
Inc. v. Radford Community Hosp., 910 F.2d 139, 146 (4th Cir.
1990) (under Copperweld, two subsidiaries wholly owned by the
same parent are legally incapable of conspiring with one another
for purposes of section 1); Century Oil Tool, Inc. v. Production
Specialties Inc., 737 F.2d 1316 (5th Cir. 1984) (under
Copperweld, separate corporations commonly owned by three men,
two of whom owned 30% of each corporation and one of whom owned
the remaining 40% of each corporation, were incapable of an
antitrust conspiracy).
The plaintiffs contend, without citation to authority,
that the Interstate Commerce Act does not legally permit a parent
company shipper to control the affairs of a motor carrier
subsidiary and requires that a parent shipper and its carrier
subsidiary conduct their affairs independently of each other.
The Act, however, neither prohibits such control nor requires
such independence. To the contrary, the Act specifically permits
a shipper to acquire control of a motor carrier in appropriate
9
. The defendants correctly point out that Bethlehem Steel
ultimately determined who held the seven shares it did not own.
Since the Railroad was a Pennsylvania corporation, under
Pennsylvania's corporation law, Bethlehem Steel, as the
Railroad's controlling shareholder, selected the Railroad's
directors. The directors, in turn, appointed the Railroad's
officers, in whose names the seven shares were issued. 15 Pa.
C.S.A. §§ 1502(a)(16), 1721, 1725(a).
circumstances, 49 U.S.C. § 11343, and in this case, the
Interstate Commerce Commission sanctioned such control when it
permitted Bethlehem Steel and the Railroad to acquire Bethran and
Carrier Express.10
We thus hold that the companies in the Bethlehem Steel
corporate family lacked the capacity to conspire with one another
under section 1 of the Sherman Act.
2. The Alleged Conspiracy Among the Bethlehem Steel
Companies, Oak Management, Rediehs, Bryan and Carrier
Express Agents
The plaintiffs also assert that a number of unnamed co-
conspirators joined with one another and with the Bethlehem Steel
companies in various combinations to restrain trade. We start
with allegations which suggest that Thomas Rediehs, as an officer
of Oak Management, and Kermit Bryan, as one of its employees,
conspired with each other or with the company. In Copperweld the
Court made clear that section 1 does not capture coordinated
activity among the employees and officers of the same firm or
police "internal agreements" between a corporation and these
10
. The plaintiffs further maintain that Copperweld is
rendered inapplicable by a commitment in the petition Bethlehem
Steel and the Railroad filed with the Commission to operate
Bethran and Carrier Express separately, and by the Commission's
order granting the petition on the "specifically-stated
condition" of separate operation. Not only is the plaintiffs'
characterization of the petition and the Commission's order
plainly incorrect, but more importantly, under Copperweld, the
control a parent corporation exercises over its subsidiary is
relevant, not whether a parent operates the subsidiary
separately.
individuals. Copperweld, 467 U.S. at 769; Tunis Bros. Co. v.
Ford Motor Co., 763 F.2d 1482, 1496 & n.21 (3d Cir. 1985) ("A
corporation can act only through its agents, thus the acts of
corporate directors, officers, and employees on behalf of the
corporation are the acts of the corporation and a corporation
cannot conspire with itself."), vacated and remanded, 475 U.S.
1105 (1986), reinstated, 823 F.2d 49 (1987), cert. denied, 484
U.S. 1060 (1988).
We turn next to the plaintiffs' theory that a
conspiracy existed among Carrier Express, its agents in the
field, and Oak Management, and must determine whether a corporate
principal and its agents should be treated as one enterprise or
two. On another occasion, we were faced with a similar inquiry.
In Weiss v. York Hospital, 745 F.2d 786 (3d Cir. 1984), cert.
denied, 470 U.S. 1060 (1985), an osteopathic physician brought,
both individually and as a class representative, an antitrust
action under, inter alia, section 1 of the Sherman Act against
the York Hospital, the York Medical and Dental Staff and ten
individual physicians, alleging, inter alia, that the defendants
had conspired to deny him staff privileges. Following trial, the
jury found that only the staff had conspired against the
plaintiff class. Upholding the jury's verdict in this regard, we
held that the medical staff, comprised of individual, competing
doctors, satisfied the plurality requirement of section 1, but
that the staff as an entity, "operat[ing] as an officer of a
corporation . . . [and having] no interest in competition with
the hospital", could not conspire with the hospital when making a
staff privilege decision. Id. at 817.
In Pink Supply Corp. v. Hiebert, Inc., 788 F.2d 1313(8th Cir. 1986), the Court of Appeals for the Eighth Circuit held
that certain types of corporate agents, even if separately
incorporated, are not capable of conspiring with their principal
where their relationship necessarily involves a unity of economic
interest and design. There, a dealer in office furniture
manufactured by Hiebert whose dealership had been terminated
commenced a section 1 antitrust action against Hiebert and four
of its sales representatives, alleging a price-fixing and boycott
conspiracy. At all relevant times, the sales representatives
served as commissioned sales agents for Hiebert, generating
business for the manufacturer by persuading potential customers
to select the Hiebert line. They did not set prices, arrange
terms of sales or accept orders, and did not compete in any sense
with Hiebert or its dealers. Viewing the sales representatives
as corporate agents who performed the tasks of employees and
noting that they were an integral part of the corporate entity,
the court concluded that Hiebert and the sales agents were so
closely intertwined in economic interest and purpose as to amount
to a unified economic consciousness incapable of an antitrust
conspiracy. Id. at 1316.
When we examine the economic substance of the
affiliation between Carrier Express and its agents in the field,
as Copperweld instructs we must, we find a similar unity of
interest and purpose. The agents, whose only function was to
make arrangements for the transport of Carrier Express freight
with authorized carriers, did not compete with Carrier Express.
As the conduit between Carrier Express and those with trucking
equipment and drivers, the agents were an essential part of
Carrier Express operations. Because the agents received a
commission from Carrier Express based on the loads they arranged
for the company to transport, the parties' economic interests
were entirely congruent. In our view, therefore, Carrier Express
and its agents represented a single enterprise.
We reach the same conclusion when we consider the
relationship between Carrier Express and Oak Management. As
Carrier Express did not have employees of its own, it used Oak
Management to handle its day-to-day operations. Contractually
obligated to manage Carrier Express affairs, Oak Management was,
in effect, an inseparable part of Carrier Express' structure.
Since its fee was a percentage of Carrier Express' revenue, Oak
Management's economic well being was directly tied to Carrier
Express' success. Oak Management did not compete with Carrier
Express; instead, it stood to gain or lose from overseeing
Carrier Express operations in an economical and efficient manner,
as did Carrier Express itself. Hence, Carrier Express and Oak
Management constituted one economic unit. Thus we hold that Oak
Management and the Carrier Express agents could not conspire with
Carrier Express or with each other under section 1, or for that
matter, with Bethran or Bethlehem Steel.
B.
Our inquiry into the possibility of a conspiracy
between Carrier Express and Oak Management, however, does not end
here. The plaintiffs argue that even if Carrier Express and Oak
Management were part of a single enterprise, they were capable of
conspiring to terminate Siegel Transfer's contract with Carrier
Express because Oak Management's representatives, Thomas Rediehs
and Kermit Bryan, each had an interest in Rediehs Express.11 The
plaintiffs further maintain that Rediehs and Bryan were motivated
to agree to the contract's termination so that Oak Management
could replace Russell Siegel as Carrier Express' Baltimore agent.
These arguments call into question the exception to the
general rule that a corporation cannot conspire with its
employees, officers or agents that we and other courts of appeal
have recognized.12 In Johnston v. Baker, 445 F.2d 424, 427 (3d
Cir. 1971), we concluded that a corporation can conspire with its
agent where the agent acts for "personal reasons."13 Although
11
. The plaintiffs do not allege that Rediehs Express
itself, through Thomas Rediehs, Kermit Bryan or any other person,
participated in this alleged restraint. They contend only that
by virtue of Rediehs' and Bryan's respective interests in Rediehs
Express, Oak Management was a separate entity with separate
interests, capable of conspiring with Carrier Express.
12
. In Copperweld, the Supreme Court observed without
comment that "many courts have created an exception for corporate
officers acting on their own behalf." 467 U.S. at 769-70 n.15,
citing, inter alia, Johnston v. Baker, 445 F.2d 424 (3d Cir.
1971).
13
. In Weiss v. York Hospital, 745 F.2d 786 (3d Cir. 1984),
cert. denied, 470 U.S. 1060 (1985), we noted the exception but
did not have occasion to discuss it. Id. at n.43. We again
noted the exception in Tunis Bros. Co. v. Ford Motor Co., 763
F.2d 1482, 1496-97 (3d Cir. 1985), vacated and remanded, 475 U.S.
1105 (1986), reinstated, 823 F.2d 49 (1987), cert. denied, 484
the Court of Appeals for the Eighth Circuit, in Morton Bldgs. of
Neb. Inc. v. Morton Bldgs., Inc., 531 F.2d 910, 917 (8th Cir.
1976), held that the exception arises "when the officers or
agents were, at the time of the conspiracy, acting beyond the
scope of their authority or for their own benefit", the Court of
Appeals for the Fourth Circuit, in Greenville Pub. Co. v. Daily
Reflector, Inc., 496 F.2d 391, 399 (4th Cir. 1974), determined
that the exception "may be justified when the officer has an
independent personal stake in achieving the corporation's illegal
objective."
Over time, however, the exception expanded and came
under criticism for threatening to swallow the general rule.
Oksanen v. Page Memorial Hosp., 945 F.2d 696, 705 (4th Cir.
1991), cert. denied, 502 U.S. 1074 (1992). See Nurse Midwifery
Assoc. v. Hibbett, 918 F.2d 605, 613 (6th Cir. 1990), modified by
927 F.2d 904, cert. denied, 502 U.S. 952 (1991) (declining to
adopt the "independent personal stake" exception for substantial
policy reasons); 7 PHILLIP E. AREEDA, ANTITRUST LAW, ¶ 1471d&g
(1986). Accordingly, our sister courts refined the exception to
insure that it is appropriately applied. In Pink Supply Corp. v.
Hiebert, Inc., for example, when the plaintiff raised the
exception, contending that one of Hiebert's sales representatives
recommended that its dealership be terminated so as to control
dealer pricing and bolster his own credibility, the Eighth
(..continued)
U.S. 1060 (1988), but because the factual issues relating to the
exception were unresolved, we remanded the case to the district
court for trial without analyzing the exception further.
Circuit refused to apply the exception, finding an absence of
evidence in the record that the representative secured a direct
financial gain from the plaintiff's elimination from the Hiebert
organization:
Our decisions have required more than mere
speculation regarding the benefit to an agent
to be realized from participation in a
conspiracy with the principal. . . .
Hiebert's sales representatives derived no
financial benefit from the elimination of
Pink Supply from the Hiebert organization.
We construe "for the agent's own benefit" to
mean at least an economic stake in the gain
to be realized from the anticompetitive
object of the conspiracy.
788 F.2d at 1318 (footnote omitted).
In Oksanen v. Page Memorial Hosp., an antitrust action
arising out of the revocation of medical staff privileges, the
plaintiff argued that even if a hospital and its medical staff
were considered part of the same enterprise and incapable of
conspiring, the exception applied because the individual doctors
on the staff had personal stakes in the outcome of the peer
review process. Addressing the plaintiff's argument, the Fourth
Circuit expressly declined to extend the exception beyond the
rationale underlying its prior decision in Greenville, where the
president of the defendant company had a financial interest in a
firm that competed with the plaintiff and the power to control
the defendant's decisions. Oksanen, 945 F.2d at 705. The court
of appeals thus examined whether the staff included members who
directly benefitted from the plaintiff's elimination as a
competitor, and whether the staff caused the hospital to engage
in the alleged restraint. Id. at 705-06. Finding that neither
of these criteria was met, the court concluded that the general
rule, and not the exception, controlled. Id.14
In our view, in order for the concept of a conspiracy
between a principal and an agent to apply in the antitrust
context, the exception to the general rule should arise only
where an agent acts to further his own economic interest in a
marketplace actor which benefits from the alleged restraint, and
14
. In his antitrust treatise, Professor Phillip E. Areeda
opines that the exception should, as a general proposition, only
capture an employee's pursuit of an outside interest which
competes with the plaintiff. To do otherwise, Professor Areeda
maintains, would be unwise given the varied personal interests
that may motivate employees to act for themselves. 7 PHILLIP E.
AREEDA, ANTITRUST LAW § 1471e2 & n.27 (1986).
Professor Areeda also states that if an employee cannot
cause the employer to engage in the restraint, an independent
interest on his part is largely irrelevant to an antitrust
analysis:
[T]he employee's "personal stake" bears on
antitrust policy, if at all, only if it
brings about an alleged restraint by his
employer that would not otherwise have
occurred. The employer's self-interest may
have been insufficient to induce the alleged
restraint in the absence of the "conspiring"
employee's independent interest. The
employee's independent interest is simply
irrelevant to an employer act that would have
occurred without regard to it.
Thus, the premise for finding an
employer-employee conspiracy is that an
employee's personal stake causes the employer
to adopt a restraint that would not otherwise
have been adopted by the employer in his own
self-interest.
Id. at § 1471d1.
causes his principal to take the anticompetitive actions about
which the plaintiff complains. In this way, the exception
captures agreements that bring together the economic power of
actors which were previously pursuing divergent interests and
goals, the type of activity that section 1 was intended to
oversee. Copperweld, 467 U.S. at 752.
Our review of the record confirms that the exception as
we have defined it does not apply in this case. With regard to
the respective interests that Rediehs and Bryan had in Rediehs
Express, the plaintiffs did not offer any evidence to show that
Rediehs Express competed with Siegel Transfer or that Rediehs
Express would benefit from Siegel Transfer's elimination from the
Sparrows Point market. To the contrary, the defendants presented
evidence which established that Rediehs Express did not haul
steel products from Sparrows Point and that the tonnage of
freight it received from Bethlehem Steel out of Burns Harbor
declined following termination of Siegel Transfer's contract with
Carrier Express. Nor did the plaintiffs proffer any evidence to
demonstrate that Oak Management, acting through Rediehs and
Bryan, caused Carrier Express to terminate its contract with
Siegel Transfer. Again, the record is to the contrary, showing
that James Matthews, Carrier Express' Vice President, possessed
and retained the authority to decide such matters, and indeed
exercised that authority in favor of contract termination. At
most, Oak Management was asked to give Carrier Express advice.15
The giving of advice, however, when requested by the decision
maker, is not equivalent to making the decision. Pennsylvania
Dental Ass'n v. Medical Serv. Ass'n., 745 F.2d 248, 259 (3d Cir.
1984), cert. denied, 471 U.S. 1016 (1985).
We also reject the plaintiffs' alternative argument
regarding Rediehs' and Bryan's purported desire for Carrier
Express' Baltimore agency. First, the record conclusively
establishes that neither Rediehs nor Bryan sought the agency, and
that Rediehs only reluctantly accepted it on Oak Management's
behalf at Carrier Express' request. Second, Oak Management had
nothing to gain, and indeed did not gain, from Siegel's ouster as
a Carrier Express agent. Third, any losses that Siegel
personally may have sustained are not relevant to the plaintiffs'
case. Finally, Siegel's termination as a Carrier Express agent
was a natural consequence of contract termination, an event that
Oak Management did not cause or control.
V.
When we apply our conclusions regarding conspiratorial
capacity to the evidence, and evaluate the undisputed facts of
record, we find that the plaintiffs have failed to offer proof
sufficient to establish the element of concerted action. With
respect to their allegations that Bethlehem Steel, Bethran,
15
. The record shows that Rediehs advised Carrier Express
not to terminate its contract with Siegel Transfer, and that
Bryan did not offer any advice one way or the other.
Carrier Express and Oak Management conspired on January 4, 1990
to end Siegel Transfer's contract with Carrier Express, we
conclude that these companies constituted one economic unit which
met to announce Carrier Express' decision to terminate the
agreement. With regard to the plaintiffs' contention that Oak
Management's instructions to Carrier Express' agents not to make
transportation arrangements with Siegel Transfer constitute
evidence of a conspiracy to exclude Siegel Transfer from the
Sparrows Point market, we hold that this activity was undertaken
by a single enterprise in order to implement the contract's
termination.
As to the plaintiffs' complaint that the defendants
combined with other parties to refuse Siegel Transfer the
opportunity to haul freight for Bethlehem Steel, we find nothing
more in the record than a unilateral, and under the antitrust
laws, lawful choice on the part of one of Bethlehem Steel's
transportation superintendents not to use Siegel equipment to
transport products out of the company's Sparrow Point mill.
Monsanto Co. v. Spray-Rite Service Corp., 465 U.S. 752, 761
(1984) (A buyer or a seller "generally has the right to deal, or
refuse to deal, with whomever it likes, as long as it does so
independently."). In addition, the record is uncontroverted that
Bethlehem Steel, through other transportation managers, did
indeed permit carriers with whom the company had direct business
ties to use Siegel equipment to haul Bethlehem Steel freight
after Carrier Express' termination of the Siegel Transfer
contract. Further, although the plaintiffs suggested in their
brief that Rediehs Express assisted Carrier Express in a
"horizontal restraint", they did not present a factual basis for
this belief. As we have stated, "[l]egal memoranda and oral
argument are not evidence and cannot by themselves create a
factual dispute sufficient to defeat a summary judgment motion."
Jersey Cent. Power & Light Co. v. Lacey Township, 772 F.2d 1103,
1109 (3d Cir. 1985), cert. denied, 475 U.S. 1013 (1986).
Lastly, we conclude that the plaintiffs' contention
that the refund contract between Carrier Express and Bethlehem
Steel represents a per se violation of section 1 of the Sherman
Act lacks merit. Because the only parties to the contract were
members of the Bethlehem Steel corporate family, the requisite
element of concerted action is missing. Moreover, we do not find
any support for the plaintiffs' theory that a per se violation of
the antitrust laws can be stated merely by alleging that an
otherwise lawful arrangement is contrary to the "pro-competitive"
polices of the Interstate Commerce Act.
VI.
In Count XI of the amended complaint, the plaintiffs
claim that the defendants violated the Interstate Commerce Act
and the Elkins Act. According to the plaintiffs, Siegel
Transfer's contract with Carrier Express was an unlawful
"brokerage" agreement which improperly provided a "commission" to
Carrier Express and a "rebate" to Bethlehem Steel; the refund
agreement between Carrier Express and Bethlehem Steel amounted to
another unlawful "rebate"; and Bethlehem Steel impermissibly
owned and controlled the operations of Bethran and Carrier
Express.
Congress gave the Interstate Commerce Commission
primary responsibility to enforce the Interstate Commerce Act,
authorizing it to investigate infractions, compel compliance
where violations have occurred, bring civil actions to enjoin
certain violations, and enforce its orders and regulations. 49
U.S.C. § 11702. The Act also authorizes the Attorney General to
enforce the Act upon the Commission's request, and to bring civil
actions against common carriers for discriminatory practices. 49
U.S.C. § 11703.
In only a limited number of sections of the Act does
Congress allow a private party to file suit in a court of law.16
The plaintiffs do not cite to any of these sections in Count XI,
nor do they apply in this case.
The other private action currently permitted under the
Act involves "undercharge" claims, the allegation by a common
carrier that it received a lower rate from a shipper than that
filed with the Commission. See, e.g., Maislin Industries, U.S.
16
. Section 11704 permits an interested person to enjoin an
abandonment of service; section 11705 provides a private right of
action to one injured in specified ways by certain carriers;
section 11707 permits a private action against a common carrier
for liability under receipts and bills of lading; and section
11708 allows a person to sue to enforce the Act's provisions
relating to the issuance of operating certificates and permits.
49 U.S.C. §§ 11704-11705, 11707-11708.
We note also that the plaintiffs did not raise the
question of an implied right of action under either the
Interstate Commerce Act or the Elkins Act.
v. Primary Steel, 497 U.S. 116 (1990). Because contract carriers
are exempt from the tariff filing and uniform rate requirements
of the Act, Central and Southern Motor Freight Tariff Assoc.,
Inc. v. United States, 757 F.2d 301 (D.C. Cir.), cert. denied,
474 U.S. 1019 (1985), there is no basis for an undercharge claim
in this, a motor contract carrier case.
The Elkins Act, the other statute upon which the
plaintiffs rely, does not regulate motor contract carriers or
provide for private remedies. 49 U.S.C. §§ 11901-11903, 11915-
11916.
We therefore find that the district court correctly
dismissed the plaintiffs' federal transportation law claims for
lack of subject matter jurisdiction because neither the
Interstate Commerce Act nor the Elkins Act grants the plaintiffs
the right to pursue their allegations in a federal court.
Merrell Dow Pharmaceuticals, Inc. v. Thompson, 478 U.S. 804(1986) (the existence of a private cause of action is a
jurisdictional requirement).
VII.
We turn finally to the plaintiffs' state law claims.
Because the plaintiffs failed to establish the antitrust claim
they brought under federal law, their Maryland Antitrust Act
claim also fails. Natural Design, Inc. v. Rouse Co., 302 Md. 47,
53, 485 A.2d 663, 666 (1984) (the Maryland courts follow the
federal courts' interpretations of section 1 of the Sherman Act
when evaluating state antitrust claims). Likewise, the
plaintiffs' civil conspiracy claim is deficient for failing to
establish that the defendants engaged in an unlawful conspiracy.
Thompson Coal Co. v. Pike Coal Co., 488 Pa. 198, 211, 412 A.2d
466, 472 (1979) (under Pennsylvania law, the essential elements
of civil conspiracy include malice and proof of a combination or
agreement by two or more persons to do an unlawful act or to use
unlawful means to accomplish an otherwise lawful act).17
In their breach of contract claim, the plaintiffs
contend that Carrier Express' January 4, 1990 notice of contract
termination was ineffective because the contract required that
notice be given by December 4, thirty days before the contract's
January 4 renewal date. The defendants argue that the contract
renewed from year to year, with resulting yearly obligations, but
that the year term could be cut short at any time by either party
upon proper notice.18
17
. The district court analyzed the civil conspiracy claim
under Pennsylvania law. On appeal, both parties applied
Pennsylvania law to this claim.
18
. The contract's termination provision provided:
(13) This AGREEMENT is to become effective
January 4, 1986 and shall remain in effect
for a period of three yrs from such date, and
from year to year thereafter, subject to the
right of either party hereto to cancel or
terminate the AGREEMENT at any time upon not
less than thirty (30) days written notice of
one party to the other. (emphasis in
original).
In Maryland,19 the courts interpret written contracts
that are clear and unambiguous. Rothman v. Silver, 245 Md. 292,
296, 226 A.2d 308, 309 (1967). The cardinal rule in the
interpretation of contracts is that effect must be given to the
intention of the parties, Kasten Constr. Co., Inc. v. Rod
Enterprises, Inc., 268 Md. 318, 328, 301 A.2d 12, 18 (1973), and
to all provisions of the agreement. Rothman, 245 Md. at 296, 226
A.2d at 309. When the language of a contract is clear, the true
test of what is meant is not what one of the parties to the
contract understood it to mean, but what a reasonable person in
the position of the parties would have thought it meant. Kasten
Constr., 268 Md. at 329, 301 A.2d at 18.
In our view, the plaintiffs' interpretation of the
contract is strained, ignores the "at any time" termination
language and adds a notice period that the contract did not have.
The defendants' interpretation, on the other hand, is reasonable
and gives meaning to all of the contract's provisions. We
therefore find that the district court did not err in holding
that the defendants' January 4, 1990 notice of termination
complied with the terms of the parties' contract.
The plaintiffs also argue that Carrier Express failed
to honor the thirty-day notice period. The record and the
contract itself belie this argument. On January 4, 5 and 12,
1990, Carrier Express offered Siegel Transfer more than 600,000
19
. The district court determined that Maryland law applies
to the plaintiffs' contract claims. Neither party disagreed with
the court's choice of law on appeal.
pounds of freight to transport. While the plaintiffs contend
that arrangements for transport of this freight were made prior
to January 1, 1990, the fact remains that Carrier Express' offer
and Siegel Transfer's transport occurred in January 1990. The
plaintiffs also assert that the parties' agreement required a
minimum of twenty-five loads a day. To the contrary, the
contract expressly obligated Carrier Express to offer "a minimum
quantity of 30,000 pounds per year for each year this Agreement
remains in effect."20
Finally, we agree with the district court that the
plaintiffs' claim for breach of the implied duty of good faith
must fail because the claim amounts to no more than an
impermissible attempt on their part to alter the termination
provision of the contract. Parker v. Columbia Bank, 91 Md. App.
346, 365, 604 A.2d 521, 531 (1992) (the duty of good faith and
fair dealing is an implied term, but this duty "simply prohibits
one party to a contract from acting in such a manner as to
prevent the party from performing his obligations . . . .").
VIII.
For the foregoing reasons, we will affirm the district
court's grant of summary judgment on Counts I, II, III, IV, VII,
20
. The plaintiffs' additional claim that the contract was
not a "trip lease" and their discussion regarding the necessary
elements of a motor carrier agreement under the Interstate
Commerce Act are not relevant, and do not alter the fact that the
defendants properly exercised the termination right they had
under the contract.
VIII and XI in the defendants' favor, and the court's dismissal
of the federal claims in Count XI of the plaintiffs' Amended
Complaint.