In Re Vehicle Carrier Services Antitrust Litigation

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
______________
Nos. 15-3353, 15-3354 and 15-3355
______________
IN RE: VEHICLE CARRIER SERVICES ANTITRUST
LITIGATION
Direct Purchaser Plaintiffs Cargo Agents, Inc.;
International Transport Management Corp.;
and Manaco International Forwarders, Inc.;
Appellants in 15-3353
Martens Cars of Washington, Inc.; Hudson Charleston
Acquisition, LLC d/b/a Hudson Nissan; John O’Neil Johnson
Toyota, LLC; Hudson Gastonia Acquisition, LLC; HC
Acquisition, LLC d/b/a Toyota of Bristol; Desert European
Motorcars, Ltd; Hodges Imported Cars, Inc. d/b/a Hodges
Subaru; Scotland Car Yard Enterprises d/b/a San Rafael
Mitsubishi; Hartley Buick/GMC Truck, Inc. d/b/a Hartley
Honda; Panama City Automotive Group, Inc.d/b/a John Lee
Nissan; Empire Nissan of Santa Rosa, LLC,
Appellants in 15-3354
End Payor Plaintiffs; Truck and Equipment Dealer Plaintiffs,
Appellants in 15-3355
______________
ON APPEAL FROM THE UNITED STATES DISTRICT
COURT FOR THE DISTRICT OF NEW JERSEY
(No. 2:13-cv-03306, MDL No. 2471)
District Judge: Hon. Esther Salas
______________
Argued: November 17, 2016
______________
Before: AMBRO, SHWARTZ, FUENTES, Circuit Judges.
(Opinion Filed: January 18, 2017)
______________
Kit Pierson
Christopher J. Cormier
David A. Young
Cohen Milstein Sellers & Toll PLLC
1100 New York Avenue, N.W.
Suite 500 West
Washington, D.C. 20005
Robert N. Kaplan
Richard J. Kilsheimer [ARGUED]
Gregory K. Arenson
Joshua H. Saltzman
Kaplan Fox & Kilsheimer LLP
850 Third Avenue, 14th Floor
New York, NY 10022
Steven A. Kanner
2
Michael J. Freed
Michael E. Moskovitz
Freed Kanner London & Millen LLC
2201 Waukegan Road, Suite 130
Bannockburn, IL 60015
Lewis H. Goldfarb
McElroy, Deutsch, Mulvaney & Carpenter, LLP
1300 Mount Kemble Avenue
P.O. Box 2075
Morristown, NJ 07962
Solomon B. Cera
C. Andrew Dirksen
Cera LLP
595 Market Street, Suite 2300
San Francisco, CA 94105
Joseph C. Kohn
Douglas A. Abrahams
William E. Hoese
Kohn Swift & Graf, P.C.
One South Broad Street, Suite 2100
Philadelphia, PA 19107
Lee Albert
Gregory B. Linkh
Glancy Prongay & Murray LLP
122 East 42nd Street, Suite 2920
New York, NY 10168
Gregory P. Hansel
Randall B. Weill
3
Michael Kaplan
Jonathan G. Mermin
Michael S. Smith
Preti, Flaherty, Beliveau & Pachios LLP
One City Center
P.O. Box 9546
Portland, ME 04112
Eugene A. Spector
Jeffrey J. Corrigan
Jay S. Cohen
Rachel E. Kopp
Spector Roseman Kodroff & Willis, P.C.
1818 Market Street, Suite 2500
Philadelphia, PA 19103
W. Joseph Bruckner
Heidi M. Silton
Lockridge Grindal Nausen P.L.L.P.
100 Washington Avenue South, Suite 2200
Minneapolis, MN 55401
Vincent J. Esades
Heins Mills & Olson, P.L.C.
310 Clifton Avenue
Minneapolis, MN 55403
Joseph J. DePalma
Katrina Carroll
Steven J. Greenfogel
Lite DePalma Greenberg, LLC
570 Broad Street, Suite 1201
Newark, NJ 07102
4
Edward D. Greenberg
David K. Monroe
GKG Law, P.C.
1055 Thomas Jefferson Street, N.W.
Suite 500
Washington, D.C. 20007
Benjamin Bianco
Gregory A. Frank
Frank LLP
275 Madison Avenue, Suite 705
New York, NY 10016
Counsel for Appellants Cargo Agents, Inc.,
International Transport Management Corp.,
and Manaco International Forwarders, Inc.
Peter S. Pearlman
Cohn Lifland Pearlman Herrmann & Knopf LLP
Park 80 Plaza West-One
250 Pehle Avenue, Suite 401
Saddle Brook, NJ 07663
Jonathon W. Cuneo
Joel Davidow
Katherine Van Dyck
Daniel Cohen
Cuneo Gilbert & LaDuca, LLP
507 C Street N.E.
Washington, D.C. 20002
Benjamin David Elga
5
Cuneo Gilbert & LaDuca, LLP
16 Court Street, Suite 1012
Brooklyn, NY 11241
Don Barrett
David McMullan
Brian Herrington
Barrett Law Group, P.A.
404 Court Square
P.O. Box 927
Lexington, MS 39095
Shawn M. Raiter
Paul A. Sand
Larson King, LLP
2800 Wells Fargo Place
30 East Seventh Street
St. Paul, MN 55101
Dewitt Lovelace
Valerie Nettles
Lovelace & Associates, P.A.
Suite 200
12870 U.S. Highway 98 West
Miramar Beach, FL 32550
Gerard V. Mantese
David Hansma
Brendan Frey
Mantese Honigman Rossman & Williamson, P.C.
1361 East Big Beaver Road
Troy, MI 48083
6
Ben F. Pierce Gore
Pratt & Associates
1871 The Alameda, Suite 425
San Jose, CA 95126
Charles Barrett
Charles Barrett, P.C.
6518 Highway 100, Suite 210
Nashville, TN 37205
Thomas P. Thrash
Thrash Law Firm, P.A.
1101 Garland Street
Little Rock, AR 72201
Armand Derfner
Derfner, Altman, & Wilborn
575 King Street, Suite B
Charleston, SC 29403
Counsel for Appellants Martens Cars of Washington,
Inc, Hudson Charleston Acquisition, LLC, d/b/a
Hudson Nissan, John O’Neill Johnson Toyota, LLC,
Hudson Gastonia Acquisition, LLC, HC Acquisition,
LLC, d/b/a Toyota of Bristol, Desert European
Motorcard, Ltd, Hodges Imported Cars, Inc., d/b/a
Hodges Subaru, Scotland Car Yard Enterprises d/b/a
San Rafael Mitsubishi, Hartley Buick/GMC Truck,
Inc., d/b/a Hartley Honda, Panama City Automotive
Group, Inc, d/b/a John Lee Nissan and Empire Nissan
of Santa Rosa
Warren T. Burns [ARGUED]
7
Daniel H. Charest
Will Thompson
E. Lawrence Vincent
Burns Charest LLP
500 North Akard, Suite 2810
Dallas, TX 75201
Hollis Salzman
Bernard Persky
Meegan Hollywood
Robins Kaplan LLP
601 Lexington Avenue, Suite 3400
New York, NY 10022
Joseph W. Cotchett
Steven N. Williams
Cotchett, Pitre & McCarthy, LLP
San Francisco Airport Office Center
840 Malcolm Road, Suite 200
Burlingame, CA 94010
James E. Cecchi
Carella, Byrne, Cecchi, Olstein, Brody & Agnello, P.C.
5 Becker Farm Road
Roseland, NJ 07068
Counsel for Appellant End Payor Plaintiffs
Eric R. Breslin
Duane Morris LLP
One Riverfront Plaza
1037 Raymond Boulevard, Suite 1800
Newark, NJ 07102
8
Wayne A. Mack
J. Manly Parks
Andrew Sperl
Duane Morris LLP
30 South 17th Street
Philadelphia, PA 19103
Counsel for Appellant Truck and Equipment Dealer
Plaintiffs
John R. Fornaciari
Robert M. Disch
Baker & Hostetler LLP
1050 Connecticut Avenue, N.W.
Suite 1100
Washington, D.C. 20036
Counsel for Appellees Nippon Yusen Kabushiki
Kaisha and NYK Line North America Inc.
James L. Cooper
Anne P. Davis
Adam M. Pergament
Arnold & Porter LLP
601 Massachusetts Avenue, N.W.
Washington, D.C. 20001
Robert B. Yoshitomi
Eric C. Jeffrey
Nixon Peabody LLP
799 New York Avenue, N.W.
Washington, D.C. 20001
9
Counsel for Mitsui O.S.K. Lines, Ltd., Mitsui O.S.K.
Bulk Shipping (U.S.A.), LLC, World Logistics Service
(U.S.A.) Inc., and Nissan Motor Car Carrier Co., Ltd.
Mark W. Nelson [ARGUED]
Jeremy Calsyn
Cleary Gottlieb Steen & Hamilton LLP
2000 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
Counsel for Appellees Kawasaki Kisen Kaisha, Ltd.
and “K” Line America, Inc.
Roberto A. Rivera-Soto [ARGUED]
Jason A. Leckerman
Ballard Spahr LLP
210 Lake Drive East
Suite 200
Cherry Hill, NJ 08002
Benjamin F. Holt
Hogan Lovells US LLP
555 Thirteenth Street, N.W.
Washington, D.C. 20004
Counsel for Appellees Wallenius Wilhelmsen
Logistics AS, Wallenius Wilhelmsen Logistics
America LLC, and EUKOR Car Carriers, Inc.
Steven F. Cherry
Brian C. Smith
Wilmer, Cutler, Pickering, Hale & Dorr LLP
10
1875 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
Counsel for Appellees Compañía Sud Americana de
Vapores, S.A. and CSAV Agency, LLC
Jeffrey F. Lawrence
Wayne Rohde
Cozen O’Connor PC
1200 Nineteenth Street, N.W.
Washington, D.C. 20036
Melissa H. Maxman
Cohen & Gresser LLP
1707 L Street, N.W., Suite 550
Washington, D.C. 20036
Counsel for Höegh Autoliners AS and Höegh
Autoliners, Inc.
Renata B. Hesse
James J. Fredericks
Sean Sandolski
United States Department of Justice
Antitrust Division
Room 3224
Washington, DC 20530
Counsel for Amicus Curiae United States of America
Tyler J. Wood
William H. Shakely
Joel F. Graham
11
Federal Maritime Commission
800 North Capitol Street, NW
Washington, DC 20573
Counsel for Amicus Curiae Federal Maritime
Commission
______________
OPINION OF THE COURT
______________
SHWARTZ, Circuit Judge.
Ocean common carriers transport cargo between
foreign countries and the United States. In this case,
Plaintiffs1 used the services of such carriers to transport
vehicles. Some plaintiffs made arrangements with and
received vehicles directly from the carriers (direct purchaser
plaintiffs or “DPPs”), while other plaintiffs obtained the
benefit of the carrier services by ultimately receiving vehicles
transported from abroad (indirect purchaser plaintiffs or
“IPPs”). Plaintiffs allege that Defendants, who are ocean
common carriers, entered into agreements to fix prices and
reduce capacity in violation of federal antitrust laws and
various state laws. Because the ocean common carriers
allegedly engaged in acts prohibited by the Shipping Act of
1984, 46 U.S.C. § 40101 et seq. (the “Shipping Act” or the
1
The plaintiffs fall into two categories: Direct
Purchase Plaintiffs (“DPPs”) and Indirect Purchase Plaintiffs
(“IPPs”). The latter category consists of Auto Dealer IPPs,
End-Payor IPPs, and Truck Center IPPs.
12
“Act”), and the Act both precludes private plaintiffs from
seeking relief under the federal antitrust laws for such
conduct and preempts the state law claims under
circumstances like those presented here, the District Court
correctly dismissed the complaints. We will therefore affirm.
I2
Defendants transport vehicles from their country of
origin to the country where they will be sold, including the
United States, at which point the vehicles are delivered to
dealers and individuals, such as Auto Dealer IPPs, Truck
Center IPPs, and End-Payor IPPs. The vehicle manufacturers
and DPPs purchase vehicle carrier services from Defendants,
and the costs of these services are passed on to IPPs.
In September 2012, law enforcement raided
Defendants’ offices in connection with antitrust
investigations, and several Defendants thereafter pleaded
guilty to antitrust violations based on price-fixing, allocating
customers, and rigging bids for vehicle carrier services to and
from the United States and elsewhere.
Plaintiffs filed complaints with jury demands alleging
that Defendants entered into “secret” agreements in
connection with Defendants’ carriage of vehicles. These
agreements included: (1) price increase coordination
agreements; (2) agreements not to compete, including
2
Because this appeal arises from an order dismissing
the complaints pursuant to Fed. R. Civ. P. 12(b)(6), the facts
are derived from the complaints and are accepted as true.
Connelly v. Lane Constr. Corp., 809 F.3d 780, 786 (3d Cir.
2016).
13
coordination of responses to price reduction requests and
allocation of customers and routes; and (3) agreements to
restrict capacity by means of agreed-upon fleet reductions.
Plaintiffs claim they suffered economic injuries as a result of
these agreements and seek relief under the Clayton Act for
violations of the Sherman Act. IPPs also assert state antitrust,
consumer fraud, and unjust enrichment claims.
Defendants moved to dismiss the complaints pursuant
to Fed. R. Civ. P. 12(b)(6), claiming they are immune from
antitrust liability under the Shipping Act and that the state law
claims are preempted. The District Court agreed and
dismissed the complaints with prejudice.
While the motions to dismiss were pending, IPPs
informed the District Court that they reached a putative class
action settlement in principle with two groups of defendants,
“K” Line and MOL Defendants (the “Settling Defendants”),
but no motions to approve any settlement were filed. After
the Court dismissed the complaints, IPPs filed a motion for
reconsideration under Fed. R. Civ. P. 59(e) and 60(b) and
Local Civil Rule 7.1(i) alleging that, before the cases were
dismissed, they had notified the Court that they agreed in
principle to settle and requested that it retain jurisdiction to
approve a class settlement.
The District Court denied IPPs’ motion for
reconsideration because it had determined that the Federal
Maritime Commission (“FMC”) was the appropriate forum to
hear the dispute3 and because IPPs “did not identif[y] an
3
While IPPs’ motion for reconsideration was pending,
Plaintiffs filed complaints with the FMC.
14
intervening change in the controlling law, alert[ ] the Court to
the availability of new evidence that was not available when
the Court issued its Opinion, or allege[ ] that the Opinion was
the result of a clear error of fact or law or will result in
manifest injustice.” Joint App. 62-63.
Plaintiffs appeal the order dismissing the complaints
and IPPs also appeal the order denying reconsideration.4
II
4
The District Court had jurisdiction pursuant to 28
U.S.C. §§ 1331 and 1337, and we have jurisdiction pursuant
to 28 U.S.C. § 1291. We exercise plenary review of a district
court’s order granting a motion to dismiss under Rule
12(b)(6), Burtch v. Milberg Factors, Inc., 662 F.3d 212, 220
(3d Cir. 2011), and apply the same standard as the District
Court. See Santomenno ex rel. John Hancock Tr. v. John
Hancock Life Ins. Co., 768 F.3d 284, 290 (3d Cir. 2014).
Under this standard, we must determine whether the
complaints “contain sufficient factual matter, accepted as
true, to ‘state a claim to relief that is plausible on its face,’”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007)), “but we
disregard rote recitals of the elements of a cause of action,
legal conclusions, and mere conclusory statements.” James v.
City of Wilkes-Barre, 700 F.3d 675, 679 (3d Cir. 2012). Our
review of the District Court’s order denying IPPs’ motion to
reconsider is “plenary where the denial was based on the
‘interpretation and application of a legal precept.’ Otherwise,
we review such denials for abuse of discretion.” United
States v. Smith, 445 F.3d 713, 716 (3d Cir. 2006) (citations
omitted).
15
To resolve this appeal, we must first examine the
Shipping Act of 1984. Broadly, the Shipping Act establishes
a uniform federal framework for regulating entities, such as
ocean common carriers,5 and attempts to place U.S.-flag
5
Under the Shipping Act, the “term ‘ocean common
carrier’ means a vessel-operating common carrier.” 46
U.S.C. § 40102. Under the Act, a
“common carrier”—(A) means a person that—
(i) holds 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; (ii) assumes
responsibility for the transportation from the
port or point of receipt to the port or point of
destination; and (iii) uses, for all or part of that
transportation, a vessel operating on the high
seas or the Great Lakes between a port in the
United States and a port in a foreign country;
but (B) does not include a carrier engaged in
ocean transportation by ferry boat, ocean tramp,
or chemical parcel-tanker, or by vessel when
primarily engaged in the carriage of perishable
agricultural commodities—(i) if the carrier and
the owner of those commodities are wholly-
owned, directly or indirectly, by a person
primarily engaged in the marketing and
distribution of those commodities; and (ii) only
with respect to the carriage of those
commodities.
Id.
16
vessels on a level economic playing field with their foreign
counterparts. The Act sets forth four specific purposes:
(1) establish a nondiscriminatory regulatory
process for the common carriage of goods by
water in the foreign commerce of the United
States with a minimum of government
intervention and regulatory costs;
(2) provide an efficient and economic
transportation system in the ocean commerce of
the United States that is, insofar as possible, in
harmony with, and responsive to, international
shipping practices;
(3) encourage the development of an
economically sound and efficient liner fleet of
vessels of the United States capable of meeting
national security needs; and
(4) promote the growth and development of
United States exports through competitive and
efficient ocean transportation and by placing a
greater reliance on the marketplace.
46 U.S.C. § 40101. Taken together, these purposes show that
the Act seeks to promote economically sound, evenhanded,
and efficient ocean commerce that responds to international
shipping practices. See also Waterfront Comm’n of N.Y.
Harbor v. Elizabeth-Newark Shipping, Inc., 164 F.3d 177,
185 (3d Cir. 1998) (“The primary purpose of the Shipping
Act . . . is to eliminate discriminatory treatment of shippers
and carriers.”).
One way the Act sought to achieve these goals was to
broaden the provisions of the prior law that provided very
17
limited antitrust immunity.6 The House Committee on
Merchant Marine and Fisheries, which reported on the bill,
noted “[t]he perception . . . that the threat of U.S. antitrust
prosecution weighs much more heavily on U.S. operators
than their foreign-flag competition” and recognized “the need
to foster a regulatory environment in which U.S.-flag liner
operators are not placed at a competitive disadvantage vis-a-
vis their foreign-flag competitors.” Report of the House
Committee on Merchant Marine and Fisheries, H.R. Rep. No.
98-53(I), 98th Cong., 1st Sess., at 9, 10.7 To address this
disadvantage, the Shipping Act “exempt[ed] from the
antitrust laws those agreements and activities subject to
6
The Shipping Act of 1916, 46 U.S.C. § 801 et seq.,
provided antitrust immunity for rate-making agreements
approved by the FMC. See, e.g., Carnation Co. v. Pac.
Westbound Conf., 383 U.S. 213, 216-18 & n.1 (1966) (noting
that the Shipping Act of 1916 included only a limited antitrust
exemption and holding that the implementation of rate-
making agreements not approved by the FMC was subject to
the antitrust laws); Nat’l Ass’n of Recycling Indus., Inc. v.
Am. Mail Line, Ltd., 720 F.2d 618, 618 (9th Cir. 1983)
(stating that the Shipping Act of 1916 immunized collective
rate-making activity provided that the rate-making was
authorized by agreements which the FMC approved and all
rates were filed with the FMC).
7
H.R. Rep. No. 98-53 relates to the proposed Shipping
Act of 1983, S. 504, H.R. 1878, 98th Cong., 1st Sess., which
was not passed but was considered by the same Congress that
passed the Shipping Act of 1984. The proposed Shipping Act
of 1983 is the same in all relevant respects as the Shipping
Act of 1984.
18
regulation by the” FMC. H.R. Rep. No. 98-53(I), at 3. Such
agreements include those that:
(1) discuss, fix, or regulate transportation rates,
including through rates, cargo space
accommodations, and other conditions of
service;
(2) pool or apportion traffic, revenues, earnings,
or losses;
(3) allot ports or regulate the number and
character of voyages between ports;
(4) regulate the volume or character of cargo or
passenger traffic to be carried;
(5) engage in an exclusive, preferential, or
cooperative working arrangement between
themselves or with a marine terminal operator;
(6) control, regulate, or prevent competition in
international ocean transportation; or
(7) discuss and agree on any matter related to a service
contract.
Id. § 40301.
The Act provides federal antitrust immunity for
agreements filed with the FMC that address these topics.8
The FMC reviews each filed agreement and can seek
information about it. 46 U.S.C. § 40304. If the FMC takes
8
46 U.S.C. § 40302 provides that a “true copy of
every agreement referred to in section 40301(1) or (b) of this
title shall be filed with the [FMC]. If the agreement is oral, a
complete memorandum specifying in detail the substance of
the agreement shall be filed.”
19
no action on such an agreement, that agreement becomes
effective,9 and, pursuant to § 40307(a), the federal antitrust
laws, such as the Sherman Act and the Clayton Act, “do not
apply to [such] an agreement.” 46 U.S.C. §§ 40102,
40307(a). Thus, activities described in § 40301 that are
undertaken pursuant to agreements filed with the FMC are
immune from federal antitrust laws.
The Act also provides immunity from private antitrust
suits based on conduct prohibited by the Act. For example,
the Act prohibits conduct undertaken pursuant to agreements
that are not effective or have been rejected. Specifically,
§ 41102(b) provides:
Operating contrary to agreement.—A person
may not operate under an agreement required to
9
Under the Shipping Act, an agreement is effective:
(1) on the 45th day after filing, or on the 30th
day after notice of the filing is published in the
Federal Register, whichever is later; or
(2) if additional information or documents are
requested under subsection (d)—(A) on the 45th
day after the Commission receives all the
additional information and documents; or (B) if
the request is not fully complied with, on the
45th day after the Commission receives the
information and documents submitted and a
statement of the reasons for noncompliance
with the request.
46 U.S.C. § 40304.
20
be filed under section 40302 or 40305 of this
title if—
(1) the agreement has not become effective
under section 40304 of this title or has been
rejected, disapproved, or canceled; or
(2) the operation is not in accordance with
the terms of the agreement or any
modifications to the agreement made by the
Federal Maritime Commission.
46 U.S.C. § 41102(b). If an agreement has not been filed, it
cannot become effective and thus operating under such an
unfiled agreement is prohibited. See 46 C.F.R. § 535.901
(“Any person operating under an agreement . . . that has not
been filed and that has not become effective pursuant to the
Act . . . is in violation of the Act . . . .”). A party injured by
activities occurring under such an unfiled, and hence not
effective, agreement may not obtain Clayton Act relief. Id. §
40307(d) (stating that “[a] person may not recover damages
under section 4 of the Clayton Act (15 U.S.C. 15), or obtain
injunctive relief under section 16 of that Act (15 U.S.C. 26),
for conduct prohibited by” the Shipping Act); see also H.R.
Rep. No. 98-53(I), at 12 (“The antitrust exposure for these so-
called ‘secret’ agreements is limited to injunctive and
criminal prosecution by the Attorney General, and does not
carry with it any private right of action otherwise available
under the antitrust laws.”).
Although the Act bars private federal antitrust lawsuits
based on such prohibited conduct, it does provide an avenue
for relief before the FMC. A & E Pac. Constr. Co. v. Saipan
Stevedore Co., 888 F.2d 68, 71 (9th Cir. 1989). Either on a
complaint filed by a private party, 46 U.S.C. § 41301(a), or
21
its own motion, the FMC may investigate alleged violations
of the Shipping Act, id. § 41302. In such proceedings, the
parties may engage in discovery, id. § 41303, and request
hearings before the FMC, id. § 41304. If a plaintiff shows the
Act has been violated, the FMC may assess penalties, id.
§ 41109(a), award damages of up to double the amount of the
actual injury, grant attorneys’ fees, id. § 41305, and provide a
means to obtain equitable relief, id. § 41307.10 A & E Pac.
Constr. Co., 888 F.2d at 71 (noting that “while no private
party may sue for damages or for injunctive relief under the
antitrust laws for conduct falling within the purview of the
[Shipping] Act, the FMC is empowered to order reparations,
including double damages, to impose sanctions and penalties
for prohibited conduct, and to file suit in federal district court
against the offending party” (citations omitted)); see also Fed.
Mar. Comm’n v. S.C. State Ports Auth., 535 U.S. 743, 759
(2002) (“[T]he similarities between FMC proceedings and
civil litigation are overwhelming.”). Congress gave the FMC
this broad authority to, among other things, “provide a
deterrent effect which has previously been available only by
invoking the antitrust laws,” H.R. Rep. No. 98-53(I), at 4, and
“end the uncertainty and delay that surrounds U.S.
Government regulation of ocean liner shipping, by providing
a predictable legal regime and streamlined regulatory process
administered and enforced by a single independent Federal
agency (the [FMC]) to better serve the needs of U.S. foreign
commerce,” Report of the Senate Committee on Commerce,
Science, and Transportation, S. Rep. No. 98-3, 98th Cong.,
10
After filing a complaint, a private party may also file
a complaint in a district court for injunctive relief, id. §
41306, and seek enforcement of FMC orders in a district
court, id. § 41309.
22
1st Sess. at 1.11 See also H.R. Rep. No. 98-53(I), at 12
(“[T]he remedies and sanctions provided in the Shipping Act .
. . will be the exclusive remedies and sanctions for violation
of the Act.”); Seawinds Ltd. v. Nedlloyd Lines, B.V., 80 B.R.
181, 184, 185 (N.D. Cal. 1987) (stating that, “[b]y removing
the courts from this regulatory process, Congress removed the
potential for continuing regulatory uncertainty” under the
antitrust laws), aff’d, 846 F.2d 586 (9th Cir. 1988).
Thus, the Shipping Act’s text, scheme, and legislative
history demonstrate Congress’s intent to create a
comprehensive, predictable federal framework to ensure
efficient and nondiscriminatory international shipping
practices.
III
Mindful of this framework, we will first address
whether the Shipping Act bars Plaintiffs’ Clayton Act claims.
There is no dispute that operating under unfiled price fixing
and/or market allocation agreements is prohibited under
§§ 40301 and 40302 of the Shipping Act.
Plaintiffs assert, however, that the Shipping Act does
not prohibit a carrier from operating under unfiled agreements
to restrict capacity. For support, they point to a statement by
an FMC Commissioner made at a trade symposium during
which he said that agreements to restrict capacity “would be
11
Like H. Rep. 98-53 discussed above, supra note 7, S.
Rep. No. 98-3 relates to the proposed but not passed Shipping
Act of 1983, which is the same as the Shipping Act of 1984 in
all relevant respects.
23
outside of the Shipping Act purview.” DPP Appellants’ Br.
24. Plaintiffs assert that we should treat this comment as the
agency’s interpretation of a statute it administers. This
argument fails for several reasons. First, the Commissioner
stated that “[m]y remarks today reflect my personal views and
thoughts and are not offered as the official position of the
United States or the Federal Maritime Commission.” Joint
App. 39-40. Second, and relatedly, Chevron deference only
applies to agency action, and by his own statements the
Commissioner acknowledged that he was not speaking or
acting for the agency. Thus, Chevron deference is not
applicable. See Chevron U.S.A. Inc. v. Nat. Res. Def.
Council, Inc., 467 U.S. 837 (1984); Br. for Fed. Mar.
Comm’n and United States as Amici Curiae 16 n.22.
Moreover, the Commissioner’s statement is
undermined by the Act itself. Sections 40301(a)(3) and (4)
require parties to file agreements that restrict capacity. For
example, § 40301(a)(4) requires carriers to file agreements
that “regulate the volume or character of cargo or passenger
traffic to be carried.” Relatedly, § 40301(a)(3) requires
carriers to file agreements that “regulate the number and
character of voyages between ports.” Entering agreements
concerning these activities without filing them is prohibited.
Plaintiffs allege they were injured by acts taken
pursuant to these unfiled, and thus prohibited, agreements and
seek damages under the Clayton Act. The Shipping Act,
however, bars them from obtaining Clayton Act relief. Id.
§ 40307(d); see Seawinds, 80 B.R. at 183 (“The Shipping Act
of 1984 expressly bars private antitrust suits based on conduct
prohibited by the Act.”). As explained above, the Shipping
Act specifically provides that operating under an unfiled, and
hence ineffective, agreement is a prohibited act, id. §
24
41102(b), and those injured by such a prohibited act cannot
obtain Clayton Act relief, id. § 40307(d).
Plaintiffs nonetheless argue that Clayton Act immunity
set forth in § 40307(a) must be read in light of § 40307(d) and
suggest that the two provisions cover the same subjects. They
are mistaken. In § 40307(a), Congress granted immunity
from antitrust prosecution for conduct permitted by the
Shipping Act, while in § 40307(d) Congress provided
immunity from private Clayton Act liability for conduct
prohibited by the Shipping Act. Plaintiffs’ reading destroys
this carefully drawn delineation.
For all of these reasons, Plaintiffs cannot obtain
Clayton Act relief, and the District Court correctly dismissed
Plaintiffs’ Clayton Act claims.12
12
Plaintiffs alternatively argue that the complaints
should not be dismissed with respect to contracts for the
shipping of “new[ly] assembled motor vehicles.” 46 U.S.C.
§ 40502. They raised this argument for the first time during
oral argument before the District Court, and when the District
Court confronted them with the fact that this was a new
argument, they agreed not to “make those arguments.” Defs.
App. 141. Despite this statement, Plaintiffs argue that they
did not waive the argument because it is currently pending
before the District Court in a different case. Raising the
argument in another case does not cure their failure to raise
the argument here, and this failure waives the argument.
Brenner v. Local 514, United Bhd. of Carpenters & Joiners of
Am., 927 F.2d 1283, 1298 (3d Cir. 1991).
Even if the argument were not waived, it would not
change the outcome. Section 40502 provides that the
25
IV
We next examine whether the District Court correctly
concluded that IPPs’ state law antitrust, consumer protection,
and unjust enrichment claims are preempted.
A
The preemption doctrine is based on the Supremacy
Clause, which provides that “the Laws of the United States . .
. shall be the supreme Law of the Land . . . any Thing in the
Constitution or Laws of any State to the Contrary
notwithstanding.” U.S. Const. art. VI, cl. 2. Congress thus
has the power to preempt state law. Arizona v. United States,
132 S. Ct. 2492, 2500 (2012) (citation omitted).
Preemption is an affirmative defense, In re Asbestos
Prods. Liab. Litig. (No. VI), 822 F.3d 125, 133 n.6 (3d Cir.
2016), and so we examine only the defense asserted before
requirement to file a service contract with the FMC does not
apply to contracts regarding “new[ly] assembled motor
vehicles.” 46 U.S.C. § 40502(b) (“Each service contract
entered into under this section by an individual ocean
common carrier or an agreement shall be filed confidentially
with the Federal Maritime Commission. . . . [This provision]
does not apply to contracts regarding . . . new assembled
motor vehicles.”). This exemption from filing service
contracts for newly assembled motor vehicles, however, does
not relieve Defendants from their obligation to file the other
agreements referred to in § 40301(a) or (b) with the FMC.
26
us, see Oneok, Inc. v. Learjet, Inc., 135 S. Ct. 1591, 1595,
1602 (2015). Defendants argue that IPPs’ state law claims
are subject to conflict preemption.13 There are two types of
conflict preemption: (1) where “compliance with both federal
and state duties is simply impossible,” and (2) where
“compliance with both laws is possible, yet state law poses an
obstacle to the full achievement of federal purposes.” MD
Mall Assocs. v. CSX Transp., Inc., 715 F.3d 479, 495 (3d Cir.
2013). Defendants rely on “obstacle” conflict preemption.
Thus, we will examine whether IPPs’ state law claims pose an
obstacle to achieving Congress’s goals under the Shipping
Act.
B
1
We recognize that “all preemption cases ‘start with the
assumption that the historic police powers of the States were
not to be superseded by [a] [f]ederal [a]ct unless that was the
clear and manifest purpose of Congress.’” Sikkelee v.
Precision Airmotive Corp., 822 F.3d 680, 687 (3d Cir. 2016)
(quoting Wyeth v. Levine, 555 U.S. 555, 565 (2009)), cert.
denied sub nom. Avco Corp. v. Sikkelee, --- S. Ct. ----, 2016
13
Although the Shipping Act contains no express
preemption clause or savings clause, that does not “‘bar[ ] the
ordinary working of conflict pre-emption principles.’”
Buckman Co. v. Plaintiffs’ Legal Comm., 531 U.S. 341, 352
(2001) (quoting Geier v. Am. Honda Motor Co., 529 U.S.
861, 869 (2000)).
27
WL 4944476 (Nov. 28, 2016).14 From this assumption, we
presume claims based on laws embodying state police powers
are not preempted. This “presumption against preemption,”
however, does not apply here because our case concerns the
regulation of international maritime commerce, an area
uniquely in the federal domain. United States v. Locke, 529
U.S. 89, 108 (2000) (“The state laws now in question bear
upon national and international maritime commerce, and in
this area there is no beginning assumption that concurrent
regulation by the State is a valid exercise of its police
powers.”); see also Farina v. Nokia Inc., 625 F.3d 97, 116 (3d
Cir. 2010) (“The presumption applies with particular force in
fields within the police powers of the state, but does not apply
where state regulation has traditionally been absent.” (citation
omitted)).15
2
As there is no presumption against preemption in this
case dealing with maritime conduct, we will determine
whether the Shipping Act preempts IPPs’ state law claims.
This requires us to consider Congress’s intent. Mabey Bridge
14
This assumption is invoked “because respect for the
States as ‘independent sovereigns in our federal system’ leads
us to assume that ‘Congress does not cavalierly pre-empt
state-law causes of action.’” Wyeth, 555 U.S. at 565 n.3
(quoting Medtronic, Inc. v. Lohr, 518 U.S. 470, 485 (1996)).
15
Even if the presumption did apply, the text,
purposes, scheme, and legislative history of the Shipping Act
embody a “clear and manifest” congressional intention to
preempt the state laws in question. See Farina, 625 F.3d at
117 (citation omitted).
28
& Shore, Inc. v. Schoch, 666 F.3d 862, 868 (3d Cir. 2012);
see also Wyeth, 555 U.S. at 565. To do so, we consider the
language, structure, and purpose of the statute, as well as
legislative history where appropriate. See Sikkelee, 822 F.3d
at 687; Bruesewitz v. Wyeth, Inc., 561 F.3d 233, 243-44 (3d
Cir. 2009).
As noted previously, one purpose of the Act is to
“establish a nondiscriminatory regulatory process for the
common carriage of goods by water in the foreign commerce
of the United States with a minimum of government
intervention and regulatory costs.” 46 U.S.C. § 40101(1). A
second purpose is to ensure that U.S.-flag ships are on a level
playing field with foreign vessels. See, e.g., id. § 40101(2)
(stating that a purpose of the Act is to provide an efficient
system of ocean transportation that is “in harmony with, and
responsive to, international shipping practices”).
To those ends, the Act granted ocean common carriers
certain antitrust immunities. Section 40307(a) expressly
immunizes agreements filed with the FMC from the federal
criminal and civil antitrust laws, and § 40307(d) bars
recovery of damages and injunctions under the Clayton Act
for conduct prohibited by the Act. Through these provisions,
Congress sought to limit the application of the antitrust laws
to enable U.S.-flag carriers to compete against their foreign
counterparts who may not be subject to similar restrictions.
See H.R. Rep. No. 98-53(I), at 9, 10 (noting “[t]he perception
. . . that the threat of U.S. antitrust prosecution weighs much
more heavily on U.S. operators than their foreign-flag
competition” and recognizing a “need to foster a regulatory
environment in which U.S.-flag liner operators are not placed
at a competitive disadvantage vis-a-vis their foreign-flag
competitors”); S. Rep. No. 98-3, at 7 (noting trading partners’
29
“blocking statutes” and stating that “[c]lear antitrust
immunity . . . marks a major step in revitalizing our maritime
industry because it removes a major handicap created by
uneven enforcement”); see also S. Rep. No. 98-3, at 1
(recommending the bill “in order to . . . harmonize U.S.
shipping practices with those of our major trading partners,
especially by reaffirming antitrust immunity for certain
carrier and conference activities”). To allow state antitrust
claims to proceed would interfere with this goal. See Am.
Ass’n of Cruise Passengers, Inc. v. Carnival Cruise Lines,
Inc., 911 F.2d 786, 792 (D.C. Cir. 1990) (“Congress was
concerned about a carrier being subject to ‘parallel
jurisdiction,’ i.e., remedies and sanctions for the same
conduct made unlawful by both the Shipping Act and the
antitrust laws.” (emphasis and citation omitted)); H.R. Rep.
No. 98-53(I), at 12 (reflecting Congress’s intent “that
violations of this Act not result in the creation of parallel
jurisdiction over persons or matters which are subject to the
Shipping Act”). Put simply, to subject the carriers to
potential state antitrust liability would essentially undo
Congress’s work in expanding antitrust immunity and
undermine its efforts to assist U.S.-flag ships avoid a
competitive disadvantage. See H.R. Rep. No. 98-53(I), at 25
(noting that the Act would meet the objective to keep ocean
liners “free of . . . threatened penalties under changing
interpretations of the antitrust laws”). Thus, we hold that the
Shipping Act preempts IPPs’ state law antitrust claims.
IPPs’ consumer protection and unjust enrichment
claims are also preempted. While these state laws reflect the
exercise of traditional police powers, applying them here
would allow the States to impose rules in an area Congress
has historically regulated: maritime commerce. Locke, 529
30
U.S. at 108. It would also thwart Congress’s goal of ensuring
uniform regulation of ocean common carriers’ business
practices.16 See 46 U.S.C. § 40101(1)-(2); Report of the
Senate Committee on Commerce, Science, and
Transportation, S. Rep. No. 98-3, 98th Cong., 1st Sess. at 1
(supporting the bill to end, among other things, “the
uncertainty and delay that surrounds U.S. Government
regulation of ocean liner shipping, by providing a predictable
legal regime and streamlined regulatory process administered
and enforced by a single independent Federal agency (the
[FMC])”).
To achieve these goals, Congress prohibited certain
activities. Among other things, the Shipping Act makes
certain unfair devices unlawful, such as operating under
unfiled and ineffective agreements on specific matters, id.
§ 41102(b), failing to establish just and reasonable regulations
and practices regarding receiving, handling, storing, or
delivering property, id. § 41102(c), unreasonably refusing to
deal or negotiate, id. §§ 41104(10), 41105, and allocating
shippers in an unauthorized manner among specific carriers
who were parties to an agreement, id. § 41105.
In addition to prohibiting such acts, Congress created
specific enforcement mechanisms for persons and entities
injured by these illegal practices. It empowered the FMC to
16
This is not to say that all conduct in which ocean
common carriers engage is never subject to state law. See,
e.g., Pasha Auto Warehousing, Inc. v. Phila. Reg’l Port Auth.,
No. CIV. A. 96-6779, 1998 WL 188848, at *6-9 (E.D. Pa.
Apr. 21, 1998) (concluding that the FMC did not have
exclusive or primary jurisdiction over declaratory relief action
concerning lease agreements).
31
investigate and punish illegal conduct pursuant to a uniform
regime. By granting the FMC this authority, Congress has
put in place a regulator familiar with complex foreign
commerce issues confronting ocean common carriers. This
expertise enables the FMC to make informed decisions about
whether conduct violates the Act and warrants punishment.17
See Farina, 625 F.3d at 126; 46 U.S.C. §§ 41109, 41305.
17
At least where the subject matter is technical and the
history and background are complex and extensive, we give
some deference to an agency’s explanation of how state law
affects the federal scheme. See Farina, 625 F.3d at 126-27.
The weight accorded to “the agency’s explanation of state
law’s impact on the federal scheme depends on its
thoroughness, consistency, and pervasiveness.” Wyeth, 555
U.S. at 577 (citing United States v. Mead Corp., 533 U.S.
218, 234-35 (2001), and Skidmore v. Swift & Co., 323 U.S.
134, 140 (1944)). Here, the FMC and United States, as amici,
assert that IPPs’ state law antitrust claims are not preempted
(but appear to take no position with respect to IPPs’ other
state law claims). We decline to defer to their views on
preemption in this case. First, they discuss field preemption
but, as stated above, that is not the preemption defense
asserted before us. Second, to the extent amici seek to draw a
distinction between filed and unfiled agreements, we need not
address that distinction because only unfiled agreements are
at issue here. Finally, the FMC’s and United States’ position
on conflict preemption is not “persuasive[ ].” See Wyeth,
555 U.S. at 577. We recognize, as they assert, that the
Shipping Act and its legislative history are silent regarding
state law claims. However, the position that the Shipping Act
contemplates state law antitrust enforcement is inconsistent
with the conclusion that the Shipping Act bars Clayton Act
32
Moreover, Congress provided a means for private
parties injured by the illegal acts of such carriers to seek relief
ranging from double damages and attorneys’ fees to
injunctions. Allowing state laws to impose different
standards would upset this carefully crafted scheme.18 See
Farina, 625 F.3d at 123 (“Allowing state law to impose a
different standard permits a re-balancing of those
considerations.”); cf. Buckman Co. v. Plaintiff’s Legal
Comm., 531 U.S. 341, 348 (2001) (“The balance sought by
claims (with which amici agree); it also overlooks the
purposes of the Act as set forth in the statute and legislative
history as well as the comprehensive scheme for enforcement
of Shipping Act violations before the FMC.
18
We have observed that situations in which the
federal government “is required to strike a balance between
competing statutory objectives lend themselves to a finding of
conflict preemption.” Farina, 625 F.3d at 123; see also
Buckman, 531 U.S. at 348 (“The conflict stems from the fact
that the federal statutory scheme amply empowers the FDA to
punish and deter fraud against the [FDA], and that this
authority is used by the [FDA] to achieve a somewhat
delicate balance of statutory objectives. The balance sought
by the [FDA] can be skewed by allowing fraud-on-the-FDA
claims under state tort law.”); City of Burbank v. Lockheed
Air Terminal Inc., 411 U.S. 624, 638-39 (1973) (“The Federal
Aviation Act requires a delicate balance between safety and
efficiency, and the protection of persons on the ground. . . .
The interdependence of these factors requires a uniform and
exclusive system of federal regulation if the congressional
objectives underlying the Federal Aviation Act are to be
fulfilled.” (citation omitted)). This case presents such a
situation.
33
the Administration can be skewed by allowing fraud-on-the-
FDA claims under state tort law.”). Further, allowing juries
to decide liability, as IPPs seek, would conflict with the
scheme that vests the FMC with decision-making power. See
Farina, 625 F.3d at 125 (“Allowing juries to impose liability
on cell phone companies for claims like Farina’s would
conflict with the FCC’s regulations.”). For these reasons,
permitting IPPs to pursue their state law claims that
Defendants allegedly had secret agreements to coordinate
price increases, not to compete, and to restrict capacity would
interfere with Congress’s goal of uniform regulation of
common carriers’ international maritime activity. See 46
U.S.C. § 40101(1)-(2).
Accordingly, we hold that the Shipping Act preempts
IPPs’ state law consumer protection and unjust enrichment
claims because allowing them to proceed would pose an
obstacle to achieving Congress’s objectives in passing the
Act.
V
IPPs’ challenge to the District Court’s order denying
their request that it reconsider the dismissal order also fails.
A judgment may be altered under Rule 59(e) if the party
seeking reconsideration shows at least one of the following:
“(1) an intervening change in the controlling law; (2) the
availability of new evidence that was not available when the
court granted the motion . . . ; or (3) the need to correct a
clear error of law or fact or to prevent manifest injustice.”
Howard Hess Dental Labs. Inc. v. Dentsply Int’l, Inc., 602
F.3d 237, 251 (3d Cir. 2010) (citation and internal quotation
34
marks omitted). Similarly, Rule 60(b) provides, in relevant
part, relief from a judgment for: (1) “mistake, inadvertence,
surprise, or excusable neglect,” Fed. R. Civ. P. 60(b)(1); (2) a
“judgment [that] is void,” Fed. R. Civ. P. 60(b)(4); or (3)
“any other reason that justifies relief,” Fed. R. Civ. P.
60(b)(6).
IPPs asked the District Court to reconsider its
dismissal order and “retain jurisdiction over claims asserted
against K Line and MOL [Defendants] for the limited
purpose” of approving class action settlements. Joint App.
60. However, IPPs did not submit a motion for preliminary
and final approval of any settlement or a motion to stay the
matter before the District Court dismissed Plaintiffs’ claims.
Furthermore, IPPs did not identify an intervening change in
the controlling law, present new evidence, allege that the
District Court’s opinion was the result of a clear error of fact
or law, or point to any extraordinary circumstance that would
warrant granting relief. Because IPPs failed to meet any of
the grounds for reconsideration, the District Court did not
abuse its discretion in denying their motions for
reconsideration.19
19
IPPs argue that the District Court “erred in
concluding that it lacked subject matter jurisdiction to
effectuate settlements with the two largest defendants.” IPP
Appellants’ Br. 44. The Court did not deny IPPs’ motions for
reconsideration on the basis of a lack of subject matter
jurisdiction. Indeed, it was aware that it possessed subject
matter jurisdiction over the dispute and exercised its
discretion not to entertain the request to approve the
settlements because it had determined that the FMC provided
a forum to resolve Plaintiffs’ dispute.
35
VI
For the foregoing reasons, we will affirm.
36