DocketNumber： No. C 07-05634 CRB
Citation Numbers： 69 F. Supp. 3d 940
Judges： Breyer
Filed Date： 9/23/2014
Status： Precedential
Modified Date： 7/25/2022
MEMORANDUM AND ORDER GRANTING IN PART AND DENYING IN PART MOTIONS FOR SUMMARY JUDGMENT
The five remaining Defendants in this antitrust suit — Air New Zealand, All
I. BACKGROUND
Defendants are various airlines alleged to have agreed to fix, raise, maintain, and/or stabilize air passenger travel, including associated surcharges, for international flights between the United States and Asia/Oceania, in violation of section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1. Plfs.’ 2d Consolidated Amended Compl. (“Second CAC”) (dkt. 741) ¶¶ 1-2. Plaintiffs are a class of individuals who purchased from one or more of the Defendants air transportation services that in-eluded at least one flight segment between the United States and Asia/Oceania. Id. ¶¶8-23. The Second CAC alleges that, beginning no later than January 1, 2000, Defendants and their co-conspirators agreed and began to impose air fare increases, including fuel surcharge increases, that were in substantial lockstep both in their timing and their amount. See id. ¶ 74.
A. Procedural History
In May 2011, the Court granted in part and denied in part Defendants’ motions to dismiss, reserving for summary judgment the question of whether the filed rate doctrine bars Plaintiffs’ claims. Order Re Mot. to Dismiss (dkt. 467) at 13-14. At the time, the Court found that several factual matters were still unresolved, including which rates were actually filed with the DOT, and whether the DOT believed that the air fares and surcharges were covered by the filed rate doctrine. Id. at 14; see also Opp’n (dkt. 885) at 4 (citing Tr. of Nov. 1, 2010 (dkt. 448) at 45).
Now before the Court are five individual motions for summary judgment, based solely on the filed rate doctrine.
B. Legislative and Regulatory Background
In 1958, Congress enacted the Federal Aviation Act (“FAA”) to require every airline to establish and maintain “reasonable prices, classifications, rules, and practices related to foreign air transportation.” 49 U.S.C. § 41501. By definition, the word “price” includes any “fare or charge” for air transportation. See 49 U.S.C. § 40102(a)(39). The FAA tasked the DOT’s predecessor agency, the CAB,
The parties differ dramatically in how they characterize the fifty years following the enactment of the FAA. Defendants assert that the DOT’s regulatory regime “changed little in more than 50 years,” Joint Memo, at 3, while Plaintiffs counter that the regulatory scheme has “undergone a massive change” that has fundamentally altered the DOT’s oversight of the airlines, Opp’n at 7. Central to the parties’ disagreement on this point is the impact of the International Air Transportation Competition Act of 1979 (“IATCA”).
Certainly the IATCA gave the DOT more discretion over tariff filing requirements. See RJN Ex. 28 (Pub.L. No. 96-192 § 14, 94 Stat. at 40-42; S.Rep. No. 96-329, September 24, 1979) (dkt. 870-28) at *10. It empowered the DOT to exempt air carriers engaged in international transportation from all statutes pertaining to economic regulation or the requirement to file fares. 49 U.S.C. § 40109(c). The IATCA also limited the DOT’s ability to grant antitrust immunity to carriers’ agreements. See 49 U.S.C. § 41308(b); RJN Ex. 14 (Int’l Air Transport Assoc. Tariff Conf. Proceeding July 6, 2006) (dkt. 870-14) at *78 (“In deregulating the airline industry, Congress drastically reduced the Board’s authority to approve and immunize agreements between airlines” and “Congress explained that it made these changes ... as part of its determination that airline service levels and fares should be controlled by competition, not by government regulation.”); see also RJN Ex. 28 at *7 (“The antitrust laws remain fully applicable to any agreement not filed by the Board or even to approved agreements for which no specific section 414
The DOT did not change its practices immediately after the passage of the IAT-CA, although it made various statements that bear on the subject of competition. In 1988, the DOT announced a proposed policy on the practice of rebating international fares, explaining that it intended to no longer prosecute airlines that charged rates lower than their filed rates. See RJN Ex. 21 (Statement of Enforcement Policy on Rebating) (dkt. 870-21) at 3 (“technical rebating by itself, without competitive or consumer abuses amounting to violations of other provisions or legal standards, will not result in enforcement action.”). It noted that after passage of the ADA and IATCA, “many of the traditional tariff-adherence rules were recast or replaced to accommodate the procompetitive policies of these' statutes.” Id. at 2.
The Court now looks to how the DOT, post-IATCA, regulated the three types of rates at issue in this case: (1) air fare for flights originating from the United States;
1. Air Fares
The first type of rate at issue in this case is air fares. In 1997, nearly 20 years after the IATCA was passed, the DOT signaled its intent to detariff some air fares. See generally RJN Ex. 24 (“Ex
Selectively exempting U.S. and foreign am carriers from the statutory and regulatory duty to file international passenger tariffs would appear to be the next logical step in the continuing evolution of a policy where we rely on market forces rather than continual government oversight to set prices for air transportation. In many cases, tariffs continue to be filed in markets where all prices have been effectively deregulated. In others, market forces are usually sufficient to ensure that most fares are reasonably priced without government intervention. Indeed, the continued filing of passenger fares serves a meaningful regulatory purpose only in those markets where foreign government policies or actions seriously hinder competitive forces, or where we continue to supervise normal economy fares.
Id. at 4 (emphasis added); see also id. (“We now question whether any purpose is served in burdening U.S. and foreign carriers with continuing to file passenger fares for approval in markets where pricing has been effectively deregulated by government agreement, and the evolution of competitive market forces.”). In the same announcement, the DOT stated that such a rule “[would] not materially lessen [the DOT’s] ability to intervene in passenger pricing matters should it be necessary.” Buschell Ex. E (dkt. 917-6) at 10763. The DOT asserted that it “has always had the statutory authority to take action directly against unfiled passenger fares and rules under a variety of circumstances” and “reserved the option ... of reinstating the tariff-filing obligation ... where consistent with the public interest.” Id.
In July 1999, the DOT issued a final rule, finding that certain filings were “no longer necessary or appropriate.” RJN Ex. 25 (“Exemptions From Passenger Tariff-Filing Requirements in Certain Instances,” July 27, 1999) (dkt. 870-25) at 2. The rule created three filing categories— A, B, and C; Category C had the strictest filing requirements and Category A the most relaxed. Joint Memo, at 5-6 (citing RJN Ex. 25 at 47). The rule required that (1) airlines headquartered in Category C countries, and (2) airlines flying between the United States and Category C countries, file all air fares with the DOT. See id. at 5. The rule also required airlines to submit “normal” one-way economy fares to and from Category B countries.
During the class period, all Defendants used the Airline Tariff Publishing Company (“ATPCO”), a privately held fare clearinghouse, as an intermediary for filing air fares with the DOT. Bryant Decl. (dkt. 728) Ex. A at ¶ 10. ATPCO distributes air fares to various entities — from online travel agents like Expedia to government databases, including the Government Filing System (“GFS”). Opp’n at 17 (citing Schwartz Decl. ¶¶8, 14). An algorithm, based on the DOT’s current category designations (A, B, or C) determines whether to “present” a fare within the database to the DOT. Id. at 18; Schwartz Decl. ¶ 16.
Plaintiffs further contend that the DOT did not “evaluate the reasonableness” of the fares, but rather, used the filing requirement to press foreign governments to adopt more procompetitive bilateral agreements. Opp’n at. 13 (citing Levine Decl. ¶¶ 2(d), 6, 25 (“In no cases was the filing requirement used to actually evaluate reasonableness and I am not aware of any instance in which it was used to definitively and finally reject a rate.”), 37, 40, 43, 45). Defendants conceded at the motion hearing that there is no direct evidence that the DOT evaluated rates for reasonableness. Tr. of Aug. 15, 2014 at 17. Indeed, the Court is aware of no evidence of a fare that was disapproved by the DOT based on its pricing level or reasonableness.
The second type of rate at issue in this case is fuel surcharges. A fuel surcharge is an additional per-ticket fee based on the increased cost of fuel to the carrier. In 1999, the DOT issued a notice stating without any elaboration that “all surcharges are to be filed.” Buschell Deel. Ex. C Attach. B (DOT Notice of Exemption from the Department’s Tariff-Filing Requirements, October 7, 1999) (dkt. 917-4) at 3. Nonetheless, the DOT would not let airlines charge fuel surcharges as separately stated charges until 2004. See Tr. of Aug. 15, 2014 at 28, 31. Indeed, the DOT confirmed in a 2004 letter to parties filing, tariffs that (stand-alone) fuel surcharges were prohibited prior to 2004. See RJN Ex. 5 (Letter from Paul Gretch, Dir. Office of Int’l Aviation, October 14, 2004) (dkt. 870-5) (explaining that the DOT had barred filings of separate surcharges “consistent with longstanding [DOT] policy that carriers should recoup fuel expenses through increases in their base fares”). That letter went on to say that the policy against separate filing of surcharges “was established at a time when the Department was regulating fares much more actively than is the case today, and we were concerned that tariff surcharges could undermine our regulatory supervision of fare levels.” Id. The DOT explained in that 2004 letter that, in light of more competitive market conditions, the “general prohibition of separate fare surcharges ... is no longer necessary to support the limited degree of pricing supervision that continues.” Id. Plaintiffs expert asserts that the DOT only disapproved certain fuel surcharges before October 2004 when the DOT did not accept such filings. See Schwartz Deck ¶ 18.
As of October 2004, the DOT permitted, but did not require, airlines to file their fuel surcharges separately from fares. See RJN Ex. 5 (“carriers are free to file surcharges in general rules tariffs.”).
In November 2004, the DOT explained that it would no longer allow airlines to designate surcharges as “government-approved” in fare advertising. See RJN Ex. 26 (“Notice of Disclosure,” November 15, 2004) (dkt. 870-26) at 2. In that announcement, the DOT stated that it could not “effectively monitor” fuel surcharges that are filed separately from “base fares.” Id. It further stated that it would consider the separate listing of such charges in fare advertisements “an unfair and deceptive trade practice.” Id.
3. ANA Discount Fares
The final type of rate at issue in this case is ANA’s discount air fares (also known as “ethnic fares”). Plaintiffs allege that Defendant ANA coordinated with Japan Airlines
ANA sold its discounted tickets through travel agents by first establishing a “net fare” or an amount below the filed rate of certain “B,” “M,” and “C” class fares. Id. ANA then entered into an agreement with the travel agent, whereby the agent would remit the net fare to ANA and keep as commission any difference between the net fare and the amount paid by the customer. Id. ANA acknowledges that it did not file its “net fares” with the DOT, but it argues that these discounted fares are covered by the “B,” “M,” and “C” fare codes class fares that it did file. See id. at 2.
The discounted fares differed in some ways from the “unrestricted economy class fares” that ANA filed with the DOT. See Opp’n at 55 (citing Fukuda Depo. (dkt. 887-2) at 71-77, 88-84). The Satogaeri and business discount fares had highly restrictive fare rules that did not apply to the unrestricted economy class fares. Id.; Schwartz Decl. ¶¶ 29-89. The unrestricted fares were fully refundable, re-routeable, and had no time limits for the return leg of the flight; in contrast, the discounted fares were non-refundable, non-re-routeable, and imposed strict time limits for the return leg of the flight. Id.
II. LEGAL STANDARD
Summary judgment is proper when “the movant shows that there is no. genuine dispute as to any material fact and the movant is entitled to a judgment as a matter of law.” Fed. R. Civ. P. 56(a). An issue is “genuine” only if there is a sufficient evidentiary basis on which a reasonable fact finder could find for the nonmov-ing party, and a dispute is “material” only if it could affect the outcome of the suit under governing law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A principal purpose of the summary judgment procedure “is to isolate and dispose of factually unsupported claims.” Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). “Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no ‘genuine issue for trial.’ ” Matsushita Elec. Ind. Co. v. Zenith Radio, 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).
III. DISCUSSION
The filed rate doctrine is a judicial creation derived from principles of federal preemption. E. & J. Gallo Winery, 503 F.3d at 1033. “At its most basic, the filed rate doctrine provides that state law, and some federal law (e.g. antitrust law), may not be used to invalidate a filed rate nor to assume a rate would be charged other than the rate adopted by the federal agency in question.”
Where it applies, the filed rate doctrine bars claims for treble damages on the basis of antitrust injury. See Square D Co., 476 U.S. at 421-22, 106 S.Ct. 1922. In this Circuit, the essential question in filed rate cases is not whether the rates were actually “filed,” but whether the rates were “authorized” by the relevant regulatory agency, or whether the agency was doing enough to preempt federal antitrust laws. See Carlin, 705 F.3d at 871, n. 11 (citing E. & J. Gallo Winery, 503 F.3d at 1040-43). Thus, the doctrine does not apply where the agency “has effectively abdicated its rate-making authority.” E. & J. Gallo Winery, 503 F.3d at 1040 (citing Pub. Utility Dist. No. 1 of Grays Harbor Cnty. Wash. v. IDACORP Inc., 379 F.3d 641 (9th Cir.2004); Pub. Utility Dist. No. 1 of Snohomish Cnty. v. Dynegy Power Marketing, Inc., 384 F.3d 756, 760 (9th Cir.2004)). It also does not apply where the agency has “adequately expressed its disapproval” of the filed rates — something that has not happened here. See Carlin, 705 F.3d at 879.
Application of the filed rate doctrine in any particular case is not determined by the culpability of the defendant’s conduct or the possibility of inequitable results. Carlin, 705 F.3d at 869. Rather, courts decide whether to apply the filed rate doctrine based oh three underlying principles.
Originally, the filed rate doctrine arose in the context of a relatively stable para
Defendants here move for summary judgment, asking the Court to apply the filed rate doctrine to the filed and unfiled air fares, the fuel surcharges, and ANA’s discount fares. Plaintiffs argue that Congress did not intend to exempt the rates from the antitrust laws, and in the alternative, that the DOT effectively abdicated its regulatory authority over the rates.
A. Air Fares
The Court turns its attention first to air fares.
1. Filed Air Fares
As to the filed air fares, the Court concludes that Congress, through the FAA, gave the DOT authority over all fares, 49 U.S.C. § 41504(a) and (b), and that Plaintiffs have not identified any point at which Congress stripped the DOT of this authority, or at which the DOT effectively abdicated this authority.
a. Congressional Intent
Plaintiffs assert that Congress deregulated the airline industry and did not intend for the filed rate doctrine to bar Plaintiffs’ antitrust claims. Opp’n at 7-15. But Congress did not fully deregulate the international airline industry, and its intentions as to the filed rate doctrine are not known.
Plaintiffs assert that the IAT-CA “radically changed [the DOT’s] authority to approve and grant antitrust immunity to airline agreements,” with a goal of making “the airline industry subject to the same competitive and antitrust standards applicable to other industries, as far as practicable.” RJN Ex. 14 at *36, 80. This is the DOT’s statement, not Congress’s.
Moreover, while the IATCA empowered the DOT to exempt carriers engaged in international air transportation from all statutes pertaining to economic regulation or the requirement to file fares, 49 U.S.C. § 40109(c), it did not abolish the carriers’ filing requirements. Congress knows how to' eliminate tariff filing requirements; it did so in the ADA. See 14 C.F.R. § 399.40; Tariffs for Post-1982 Domestic Travel (April 7, 1982), 47 FR 14892-01. Detariffing was also the subject of Ting, 319 F.3d 1126, upon which Plaintiffs rely heavily. Judge Tashima explained in Ting that in the early 1980’s, the FCC tried to prohibit tariff-filing, but courts rejected that effort as inconsistent with the terms of the Communications Act. Id. at 1131—32. “[Fallowing a 15 year effort to suspend tariff-filing obligations for telecommunications carriers, the Commission was forced to wait for Congress to act.” Id. at 1132. The Telecommunications Act of 1996 “fundamentally altered” the regulatory scheme by directing the FCC to “forbear from applying any regulation of that chapter if it determined that such regulation was not necessary ...” Id. “Finally armed with the requisite congressional authorization, the FCC promptly” began rulemaking,' and passed an order of mandatory detariffing.” Id. The FCC “stated on a number of occasions that one of the major purposes of detariffing was to eliminate the filed rate doctrine and its harmful effect on customers.” Id. at 1145. Congress also made that goal explicit. See id. at 1139 n. 7 (stating in Notice of Proposed Rule Making, “In addition, the absence of tariffs would eliminate possible invocation by carriers of the filed rate doctrine.”) (citing 11 F.C.C.R. 7, 141, at ¶31); see also id. at 1132 (Congress wanted “to provide for a pro-competitive, deregulatory national policy framework ... by opening all telecommunications markets to competition.”). The filed rate doctrine did not apply in Ting because, empowered by Congress, the FCC renounced its authority over tariffs. Id. at 1146.
As Plaintiffs’ expert acknowledges, Congress could not act on its own accord to deregulate international air fares. See Levine Deck ¶ 14. The IATCA did not purport to abolish the DOT’S tariff filing system, but merely gave the DOT the authority to calibrate its filing requirements to reciprocate the restrictions that other countries imposed on domestic airlines. See id. Indeed, far from removing the DOT’s jurisdiction over filed rates, Congress reaffirmed it. See Pub.L. No. 96-192, § 14, 94 Stat. at. 40-42 (explaining that the DOT could, among other things,
b. Agency Action
Plaintiffs next argue that the DOT did not review the filed air fares for reasonableness, and thus, abdicated its regulatory authority over them. Opp’n at 43-45; Levine Decl. ¶¶ 6 (explaining that the DOT used the filing requirements to negotiate more favorable bilateral agreements with foreign countries), 47 (“filing tariffs during the class period of this case didn’t imply an expectation that the fares and surcharges they contained would be assessed for reasonableness or subjected to any of the normal mechanisms that accompany tariff filings for the purpose of facilitating regulation.”); Tr. of Aug. 15, 2014 at 18 (Plaintiffs’ counsel: “There’s no evidence in this record — we have not found any — to show that anything DOT has done has any relationship whatsoever to just and reasonable rates.”). Defendants concede that there is no direct evidence that the DOT evaluated rates for reasonableness. Id. at 17. But, as Defendants were quick to add, it does not Really matter. Id. at 16.
Abundant authority supports the proposition that meaningful review of rates is not required for the filed rate doctrine to apply. See, e.g., Carlin, 705 F.3d at 871-72 (meaningful review is not a “sine qua non” for the applicability of the filed rate doctrine); Wah Chang v. Duke Energy Trading & Mktng., LLC, 507 F.3d 1222, 1227 (9th Cir.2007) (“laxness does not indicate, much less establish, that [plaintiff] can turn directly to the courts for rate relief’); Areeda on Antitrust ¶ 247a at 443 (4th ed. 2013) (“It need not have been actively reviewed for accuracy or public interest considerations — indeed, it need not have been reviewed at all in any meaningful sense.”). This Circuit has recognized that federal agencies have wide latitude to determine the most effective way to carry out their charge from Congress, and that acting with a “light hand” to authorize just and reasonable rates is not abdication. See, e.g., E. & J. Gallo Winery, 503 F.3d at 1039, 1042.
In the case at hand, the Court does not pretend that the DOT regulated the filed air fares with anything other than a light hand. See, e.g., RJN Ex. 15 (Aviation Enforcement and Proceedings, November 6, 2012) (dkt. 870-15) at 5 (noting, “in the 34 years since the passage of the [ADA], the Department has declined to use this authority to strike down fare rules in foreign air transportation”)
In deference to Congress’s tariffing scheme, and to the DOT’s action in authorizing rates, the Court finds that the filed rate doctrine applies to the filed air fares in this case.
2. Unfiled Air Fares
The Court takes a different view of the unfiled air fares in this case. The Court concludes that, empowered by the IATCA, the DOT effectively abdicated its authority over the unfiled air fares in 1999. Put another way, while the DOT regulated the filed air fares with a light hand, the DOT did not regulate the unfiled air fares at all.
The Ninth Circuit explained in E. & J. Gallo Winery, 503 F.3d at 1040, that “so long as [the agency] ‘continues to engage in regulatory activity’ and has not effectively abdicated its rate-making authority, FERC’s approval of market-based rates” has “the same preclusive effect on antitrust claims ... as [its] approval of literally filed rates.” This Court asked Defendants at the motion hearing what evidence they could point to that the DOT continued to engage in regulatory activity vis-a-vis the unfiled air fares. See Tr. of Aug. 15, 2014 at 9. Defendants argued first that the DOT continued to require carriers to file all -rates for twenty years after the enactment of the IATCA. Id. at 10. But that is evidence that the IATCA did not strip the DOT of its authority over rates (and that the DOT was not nearly as eager to detariff as was the FCC in Ting,) not that the DOT never abdicated its authority. Defendants argued next that the DOT issued four more notices of exemption since 1999, which detariffed still more fares. Id. at 10-12; see also Schwartz Decl. ¶ 25. But the Court agrees with Plaintiffs’ characterization of such action: “That’s not regulation. That’s deregulation.” See Tr. of Aug. 15, 2014 at 14.
Defendants’ best argument that the DOT continued to engage in regulatory activity was its last one: that when the DOT proposed exempting certain rates from filing in 1997, it claimed that doing so “will not materially lessen the Department’s ability to intervene in passenger pricing matters should it be necessary” and that it “has always had the statutory authority to take action directly against unfiled passenger fares.” See id. at 11; Buschell Ex. E at 10763. There are a few problems with this statement. First, it is difficult to believe. Given that the DOT had just ten log-ins in the ATPCO system to monitor the thousands of filed rates, see Bryant Depo. at 213-15, 228-29, it is improbable that the DOT could nonetheless effectively monitor thousands of rates that were never filed and to which it might have had no access, see Tr. of Aug. 15, 2014 at 5 (Plaintiffs’ counsel represents that most of the rates at issue in this case were unfiled); Schwartz Deck ¶¶ 10, 13 (“It is my understanding that DOT does not have access to fares included in the GFS private database”); but see Joint Memo, at 7 n.12 (citing no evidence other than 14 C.F.R. § 221.180(b), which re
In this Circuit, “light handed regulation” is sufficient to avoid abdication, and whether a rate is literally filed is not determinative of whether the filed rate doctrine applies. See E. & J. Gallo Winery, 503 F.3d at 1040, 1042 (“the principles underlying this doctrine preclude challenges to a wide range of [agency] actions, not just the act of literal rate filing.”). Nonetheless, the actions the DOT took as to the unfiled air fares here constitute far less regulation than what courts have found sufficient in other cases.'.
In Grays Harbor, 379 F.3d at 651,
E. & J. Gallo Winery also emphasized the agency’s ongoing oversight of the market. The Ninth Circuit there explained that FERC only permitted market-based rates “[a]fter determining that no seller of natural gas could obtain market power and that market-based rates would be ‘just and
In their Reply brief, Defendants tout In re Hawaiian and Guamanian Cabotage Antitrust Litigation, 450 Fed.Appx. 685, 688 (9th Cir.2011), as an example of a court applying the filed rate doctrine to “a regulatory regime largely identical to the one at issue here.” See Reply at 12. Ca-botage is an unpublished memorandum disposition and therefore has no precedential value. See Circuit Rule 36-3(a). Assuming arguendo that it did, the Court agrees that it initially appears helpful to Defendants. Cabotage pertained to Surface Transportation Board (“STB”) regulations that required some shipping rates to be filed but exempted others from filing. In re Hawaiian & Guamanian Cabotage Antitrust Litig., 754 F.Supp.2d 1239, 1253 (W.D.Wash.2010), aff'd 450 Fed.Appx. 685. The court concluded that the STB had exercised its authority to regulate rates sufficiently to trigger the filed rate doctrine “by choosing not to require the filing of rates but rather to monitor the rates through a complaint process.” Cabotage, 450 Fed.Appx. at 688.
Despite superficial similarities, the regulatory regime in Cabotage differs from the regime here.' For one thing, Cabotage involved a different industry: cargo shipping between Hawaii and Guam, in which the two carrier defendants controlled nearly 100% of the trade, and, Plaintiffs represented to this Court, “95 percent of the rates at issue were pursuant to surcharges that were filed.” Cabotage, 450 Fed.Appx. at 687; Appellants Br., 2011 WL 2455536, at *3 (9th Cir. April 1, 2011); Tr. of August 15, 2014 at 19. But more significantly, the complaint process there was robust and actually used. Defendants in Cabo-tage represented to the Circuit that the ICCTA (the applicable law) “prevents the STB from exempting water carriers in the noncontiguous domestic shipping trade from the ICCTA’s rate reasonableness requirements,” and that the STB had actually “considered complaints challenging the reasonableness of rates.” Appellees Br., 2011 WL 2130612, at *30 (9th Cir. May 23, 2011) (describing STB adjudication of Guam’s challenge to reasonableness of rates in the Guam trade lane). Indeed, in the course of considering such rate challenges, the STB had established a detailed approach for analyzing rate reasonableness “just like the market-based analysis employed by FERC [in Gallo].” Id. at *30. STB: (1) “stated that it would determine whether there was sufficient competition in the Guam trade to preclude the exercise of market power”; (2) “would con
Here, there is no evidence that any consumer has ever used the complaint process to challenge the reasonableness of any international air fare. See Avent Decl. (dkt. 899) ¶ 2(d)
In short, the DOT effectively abdicated its authority over the unfiled air fares in 1999, and there is no evidence of any ongoing regulation of the unfiled air fares thereafter. Accordingly, Defendants may not use the filed rate doctrine as a shield from civil liability. See E. & J. Gallo Winery, 503 F.3d at 1040. Though “the filed rate doctrine has been given an expansive reading and application in this Circuit,” Carlin, 705 F.3d at 868, it cannot be read so expansively as to require deference to an agency that is not regulating. Deference to agency inaction invites, and shelters, anticompetitive conduct. See E. & J. Gallo Winery, 503 F.3d at 1050 (Fletcher, J., concurring) (“Without minimum standards for FERC oversight, the Filed Rate Doctrine threatens to come unmoored from its rationale of respecting the actions of a federal agency to which Congress has delegated authority. Instead, I fear respect is being given to agency passivity, allowing anticompetitive and otherwise illegal actions to escape review.”). That cannot be the law.
For -similar reasons, the Court also concludes that the filed rate doctrine does not apply to the fuel surcharges. Despite disagreeing about the proper interpretation of the 1999 “all surcharges are to be filed” statement, see Buschell Decl. Ex. C Attach. B; Opp’n at 34 (“the 1999 regulation cannot possibly be read to require the filing of fuel surcharges at a time when they were expressly prohibited by the DOT.”); Reply at 9 (“The phrase ... does not require an airline to impose any particular surcharge, let alone a surcharge affirmatively prohibited by the DOT. [It means] that, should an airline choose to impose a surcharge, that surcharge must be filed.”), the parties agree that the DOT did not permit airlines to file separate surcharges until 2004, see Tr. of Aug. 15, 2014 at 28, 31. Moreover, Plaintiffs represented at the hearing that the 1999 statement “doesn’t matter, because none of the surcharges we’re talking about took place until 2004.” Id. at 31. As of 2004, the DOT permitted, but did not require, carriers to file surcharges in general rules tariffs. See RJN Ex. 5. It then promptly announced that it could not “effectively monitor” fuel surcharges, and announced the designating such charges as “government-approved” would be “an unfair and deceptive trade practice.” RJN Ex. 26.
The Court sees no evidence that the DOT actively regulated fuel surcharges before October 2004, when such surcharges were not permitted to be separately filed. Nor does the Court find that the DOT had any intention of regulating fuel surcharges after October 2004, when it permitted their filing
C. ANA Discount Fares
Finally, the Court will not apply the filed rate doctrine to ANA’s discount fares. ANA asserts that those fares, which it did not file, are merely discounted versions of its filed fares, because they relate to the same subject matter. ANA Mot. at 18-19. ANA argues that Plaintiffs’ claims therefore “require a finding that [they] should have paid hypothetical rates below the filed rates.... ” Id.; Tr. of Aug. 15, 2014 at 40-41. ANA goes on to argue that “the filed rate doctrine absolutely bars [Plaintiffs’ claims because they seek] to assume a rate different
ANA relies primarily on Maislin Indus., U.S., Inc. v. Primary Steel, Inc., 497 U.S. 116, 110 S.Ct. 2759, 111 L.Ed.2d 94 (1990) (holding that the filed rate doctrine governs the legal relationship between the parties even when the parties negotiate lower rates) and AT & T Co. v. Central Office Tel., Inc., 524 U.S. 214, 118 S.Ct. 1956, 141 L.Ed.2d 222 (1998) (holding that the filed rate doctrine governs the legal relationship between the parties even when the parties negotiate better service terms) as support for the proposition that, its discount fares are materially similar to the filed fares and are therefore governed by the filed rate doctrine. ANA Mot. at 19-23; ANA Reply at 10-11; Tr. of Aug. 15, 2014 at 39-42.
In Maislin, Quinn Freight Lines (“Quinn”), a motor common carrier and subsidiary of Maislin Industries, U.S., Inc., negotiated a shipping rate with Primary Steel that was below Maislin’s filed rate. 497 U.S. at 122-23, 110 S.Ct. 2759. Maislin later billed Primary Steel for the difference between the filed rate and the negotiated rate and brought suit when Primary Steel refused to pay. Id. The International Chamber of Commerce (“ICC”) found that, while the filed rate was not unreasonable, charging Primary Steel the full amount after the parties had negotiated a lower rate was an “unreasonable practice,” and exempted Primary Steel from liability. Id. at 123-24, 110 S.Ct. 2759. The Supreme Court stated that the statute at issue, “as it incorporates the filed rate doctrine, forbids as discriminatory the secret negotiation and collection of rates lower than the filed rate.” Id. at 130, 110 S.Ct. 2759. The Court held that strict adherence to the filed rate was required after the ICC deemed the filed rate reasonable, because doing otherwise would be contrary to clear Congressional intent. Id. at 135-36, 110 S.Ct. 2759 (citation omitted).
In Central Office, Central Office Telephone, Inc. (“COT”) brought federal and state law claims for AT & T’s failure to provide benefits promised in connection with a telecommunication services contract. 524 U.S. at 220-21, 118 S.Ct. 1956. The Ninth Circuit held that “the filed rate doctrine [was] inapplicable because [the] case [did] not involve rates or ratesetting, but rather involve[d] the provisioning of services and billing.” Id. at 223, 118 S.Ct. 1956 (quotation omitted). The Supreme Court reversed, holding that “[r]egardless
In both Maislin and Central Office, strict adherence, to the rate and terms of the tariffs was required to avoid the potential for discrimination. Courts have consistently refused to calculate a hypothetical rate other than the filed rate for a particular product, because doing so would require the courts to independently determine what is reasonable, contrary to the underlying principles of the filed rate doctrine. See Carlin, 705 F.3d at 880-82; see also Cnty. of Stanislaus v. Pac. Gas & Elec. Co., 114 F.3d 858, 863 (9th Cir.1997) (holding that courts may not entertain damage claims that assume a hypothetical rate different from the filed rate). ANA argues that it simply wishes to extend this principle to the present case. ANA Mot. at 19-23; Reply at 10-11; Tr. of Aug. 15, 2014 at 39-42.
Critically, the unfiled Satogaeri and discount business class, fares at issue here have lower rates than the filed fares, but also have more restrictive terms — a situation not considered by the Supreme Court in either Maislin or Central Office. See Schwartz Decl. ¶¶ 28-39; Tr. of Aug. 15, 2014 at 38-39. Enforcement of the filed fare here would entitle ANA to the full rate of the filed fares, but it would also entitle the passengers to the filed fare’s unrestricted terms. See generally Maislin, 497 U.S. at 116, 110 S.Ct. 2759; Central Office, 524 U.S. at 214, 118 S.Ct. 1956. Because the flights took place between approximately 2000 and 2007, the filed terms cannot be enforced. See Second CAC ¶¶ 128-74.
ANA’s reasoning would allow it to file its highest rate and least restrictive terms for each class of fare, then sell passengers unfiled fares with far more restrictive terms — and hide behind the filed rate doctrine so long as the rates charged were below the filed rate.
IV. CONCLUSION
For the foregoing reasons, the Court GRANTS Defendants’ summary judgment motions as to the filed rates (Class B and C air fares), and DENIES those motions
IT IS SO ORDERED.
. The filed rate doctrine does not bar Plaintiffs' claims for injunctive relief. See Square D Co. v. Niagra Frontier Tariff Bureau, Inc., 476 U.S. 409, 422 n. 28, 106 S.Ct. 1922, 90 L.Ed.2d 413 (1986).
. Several Defendants — Thai Airways (dkt. 830), Cathay Pacific (dkt. 919), Qantas Airways (dkt. 926) and Singapore Airlines (dkt. 927) — also filed motions for summary judgment, which they withdrew upon settlement.
.The Court is not persuaded that either Aloha Airlines, Inc. v. Hawaiian Airlines, Inc., 489 F.2d 203 (9th Cir.1973) (which predates deregulation and involves a claim that Hawaiian Airlines had attempted to monopolize the inter-island air transportation system on the Hawaiian islands), or Pan American World Airways, Inc. v. United States, 371 U.S. 296, 83 S.Ct. 476, 9 L.Ed.2d 325 (1963) (which predates deregulation and involves a suit by the government alleging that Pan American had violated sections 1 and 2 of the Sherman Act by interfering with a competing airline’s efforts to extend its flight routes in South America), answers these questions.
. As Plaintiffs point out, the Court does not have the benefit of a statement from the DOT about whether it understands the filed rate doctrine to apply in this case. See Opp’n at 50 (citing Tran Decl. (dkt. 875) ¶¶ 3-6, Exs. 1-2).
. The CAB was abolished in January 1985 under the Civil Aeronautics Board Sunset Act of 1984 (98 Stat. 1703) and the Airline Deregulation Act of 1978 (92 Stat. 1744). The Court will use "DOT” throughout this Order to avoid confusion.
. The ADA effectively removed the DOT’s jurisdiction over domestic fares and the DOT ceased approving or accepting tariff filings on January 1, 1983. See 14 CFR § 399.40; Tariffs for Post-1982 Domestic Travel (April 7, 1982), 47 FR 14892-01 ("the intent of the statute would be best fulfilled by reading it to prohibit tariff filings for transportation provided after the sunset date”). It is not directly relevant to the dispute at issue, although the parties compare it to the IATCA.
. Plaintiffs offer Michael Levine as an expert on the airline industry and deregulation. Levine Deck (dkt. 898) Att. A. Defendants object to Levine’s testimony, arguing among other things that he is not qualified to offer opinions on either Congress’s or the DOT’s intent, as he has never been a member of Congress and never worked at the DOT, only having worked at the CAB from 1965-1966 and 1978-79, and as a CAB consultant in 1977 and 1980. See Reply (dkt. 917) at 19. The Court recognizes Levine as an expert in the airline industry but not on Congress or the DOT’s understanding of the antitrust laws or the filed rate doctrine. Nor does the Court accept Levine’s legal conclusions. See, e.g., Levine Deck ¶ 21.
.Section 414 of the FAA provides that "Any person affected by an order made under sections 408, 409, or 412 of this Act shall be, and is hereby, relieved from the operations of the " 'antitrust laws' ... and of all other restraints or prohibitions made by, or imposed
. Notably, the DOT withdrew this statement of proposed rulemaking in 2002. See Withdrawal of Proposed Rulemaking Action; Statement of Enforcement Policy on Rebating, 67 F:R. 72396-01.
. The Court dismissed with prejudice all of Plaintiffs' claims for alleged price-fixing on flights originating in Asia as barred by the Foreign Trade Antitrust Improvements Act. Order Re Mot. to Dismiss at 12. Thus, the remaining claims are limited to flights originating in the United States.
. "Normal” fares are those with Economy Restricted and Economy Unrestricted- fare types, which are a small subset of economy class fares that tend to have relatively few restrictions. Fare codes (also known as “booking codes” or "fare basis codes”) are a way for the airlines to identify exactly what type of ticket a customer purchased. Schwartz Decl. (dkt. 886) at 4 n.3. Fare codes could indicate the week, day or time of the flight or a required minimum or maximum stay at a destination, among other factors. Id.
. Plaintiffs contend that many fares in GFS are listed as “private,” meaning that they are viewable only by parties that have been approved by an airline to view those fares, such as the carriers’ network of travel agents. Id. (citing to Schwartz Decl. ¶¶ 10, 13). Defendants dispute this, asserting that the DOT may view all of the fare and surcharge information in any ATPCO database, including GFS, regardless of whether ATPCO formally “presented” the fare or not. Joint Memo, at 7 n.12 (citing no evidence other than 14 C.F.R. § 221.180(b), which requires that the DOT be able to monitor all filed tariffs on a 24-hour a day, 7-day a week basis); Tr. of Aug. 15, 2014 (dkt. 938) at 29 (Defendants’ counsel: "The DOT has access to the ATPCO database, and can see every fare that’s in there.”).
. The DOT may designate the fare as: (1) "Acknowledged,” if the DOT acknowledged the filing in its entirety; (2) "Approved,” if DOT approved the filing in its entirety; (3) "ApprovedC,” if the DOT approved the filing with comments; (4) "ApprovedX,” if the DOT approved the filing, except as noted on individual fare, arbitrary, or text information; (5) “Disapproved,” if the DOT disapproved the filing in its entirety; (6) "DisapprovedX,” if the DOT disapproved the filing, except as noted on individual fare, arbitrary, or text information; (7) "Suspended,” if the DOT suspended the filing in its entirety. Schwartz Decl. ¶ 23.
. But see Reply at 21 (citing Avent Depo. Ex. F (dkt. 917-7) at 16, 116-18, 124) (challenging Avent declaration stating that he was unable to find any DOT action to suspend or reject airfares because Avent admitted in his deposition that he did not review either the
. Defendants's argument that the 2004 announcement "did nothing to change the filing requirements,” Reply at 10, does not ring true.
. Japan Airlines has settled with Plaintiffs. See Mot. for Settlement (dkt. 900).
. Plaintiffs also alleged that ANA coordinated with Japan Airlines to set the price of a third discount fare, Yobiypse fares, which were Asia-originating fares sold in the United States. FAC (dkt. 493) ¶¶ 114-23. The Court
. ANA notes that the Complaint also referred to a published fare called “Business Value” or "Biz-Value,” which ANA advertised and sold in 2006. ANA Mot. at 6. Despite its name, Business Value tickets were not discounted, and ANA contends that they were filed with DOT. Id.
. The filed rate doctrine is also sometimes referenced as the "filed tariff doctrine,” see, e.g., Davel Commc'ns, Inc. v. Qwest Corp., 460 F.3d 1075, 1084 (9th Cir.2006), or the "Keogh doctrine,” see, e.g., Cost Mgmt. Servs., Inc. v. Wash. Natural Gas Co., 99 F.3d 937, 943 & n. 7 (9th Cir.1996), after the case where it was
. Some courts have recognized only two rationales for the filed rate doctrine: nondiscrimination and justiciability. See, e.g., Verizon Del., Inc. v. Covad Commc’ns Co., 377 F.3d 1081, 1086 (9th Cir.2004); Fax Telecommunicaciones, Inc. v. AT & T, 138 F.3d 479, 489 (2d Cir.1998). In those cases, Courts typically define the nonjusticiability strand broadly to include the preemption issues that are central to the third strand here.
. The Ninth Circuit has held “that the principle of nondiscrimination still suggests the filed rate doctrine should be applied in class actions...." Id. at 882.
. Plaintiffs rely excessively on the DOT’s rulemaking statements for the proposition that Congress intended to remove the DOT’s jurisdiction over international air fares. See, e.g., Opp'n at 9. The statements are not determinative of congressional intent. See Ting, 319 F.3d at 1136 (noting that Congress’s purpose is the "ultimate touchstone" in a preemption analysis); see also Cain v. Air Cargo, Inc., 599 F.2d 316, 320 (9th Cir.1979) (holding that courts must examine congressional intent in enacting a regulatoiy regime in a specific industry to determine applicability of the filed rate doctrine).
. No one knows this more than ANA, who pled guilty to criminal charges of price-fixing during the class period, but asserts the filed rate doctrine as a defense in this civil case. See Opp'n at 58 (citing RJN Ex. 2 (ANA Plea) (dkt. 870-2) ¶ 4).
. To be clear, the Court does not hold that Congress needs to have made an explicit statement as to the filed rate doctrine, only that the Court does not accept Plaintiffs’ suggestion that Congress did so. See, e.g., Opp’n at 8-13.
. Because of this distinction between antitrust immunity and the filed rate doctrine, the Court will not follow In re Ocean Shipping Antitrust Litigation, 500 F.Supp. 1235, 1240 (S.D.N.Y.1980), which predates all of the relevant case law in this Circuit, and which found that courts could not use the filed rate doctrine to grant "implied” antitrust immunity to commercial carriers when Congress had already designated an "express" path to antitrust immunity for those same carriers in the same law. It is not correct to characterize the filed rate doctrine as a "repeal of the antitrust laws.” See id. at 1241.
. But see id. (adding that "the Department is authorized pursuant to 49 U.S.C. § 41509 to cancel a rule that is unreasonable after notice and hearing,” and that it declined to exercise that authority because there was no "specific evidence that [the challenged rates were] unreasonable.”).
. Grays Harbor is one of a number of cases that arise out of the California Energy Crisis of 2000-2001, when shortages of power and high electricity prices caused blackouts and general turmoil in the West Coast electricity markets. See, e.g., E. & J. Gallo Winery, 503 F.3d 1027; Wah Chang, 507 F.3d 1222; Snohomish Cnty., 384 F.3d 756; California ex rel. Lockyer v. Dynegy, Inc., 375 F.3d 831 (9th Cir.2004). Plaintiffs generally alleged that defendant energy producers manipulated the market and restricted electricity supplies in order to cause artificially high prices in the market.
. See also Snohomish, 384 F.3d at 760-61 (describing extensive actions FERC took to "continue[] to oversee wholesale electricity rates”).
. The court specifically held that "The STB’s regulation of rates in noncontiguous domestic trade parallels FERC’s regulation of natural gas rates in Gallo." Id.
. Plaintiffs in that case had also argued that meaningful agency review was required for the doctrine to apply — an argument the memorandum disposition rightly rejected out of hand. See id. at 688.
. Defendants challenge this testimony, arguing that Avent contradicted himself at his deposition by admitting that he is aware of a customer who sought to challenge a fuel surcharge through the complaint process. See Reply at 21. Defendants fail to point to any contradiction as to air fares.
. The Court notes that Defendants challenge this testimony. See Reply at 21.
. Nor is it the law that because foreign regulators approved some of the unfiled rates, the filed rate doctrine should apply. See Joint Memo, at 16-17. Defendants cite no authority so holding, and their argument that this Court should be the first forgets that the filed rate doctrine is grounded in principles of federal preemption and deference to agency decision making. See E. & J. Gallo Winery, 503 F.3d at 1033. The reasons that a court would
. Plaintiffs also point to a good deal of evidence that Defendants did not effectively file many of their fuel surcharges at issue. See Opp’n at 35-36.
. Providing some further support for this interpretation of the DOT’s intentions is the DOT’s failure' to approve the carriers’ 2003 request for immunity for collusivp fuel surcharge rate setting. See RJN Ex. 9 (Application for Approval of Agreements by the Int’l Air Transport Assoc., Aug. 25, 2003) (dkt. 870-9); Opp’n at 16.
. As an initial matter, Plaintiffs argue that ANA cannot even invoke the filed rate doctrine because: (1) it is judicially estopped, based on its criminal trial; (2) it waived its right to assert this defense; and (3) the Department of Justice has disapproved of ABA's conduct. Opp’n at 56-60. Judicial estoppel generally prevents a party from prevailing in one phase of a case on an argument and then relying on a contradictory argument to prevail in another phase. Milton H. Greene Archives, Inc. v. Marilyn Monroe, LLC, 692 F.3d 983, 993 (9th Cir.2012). ANA pleaded guilty to price-fixing "unpublished” passenger fares, including the Satogaeri and Biz-wari fares at issue in this case. Opp'n at 57. Plaintiffs note that the D.C. District Court stayed an award of damages against ANA "in light of [the] pending civil action.” Id., but see ANA Reply (dkt. 914) at 5 (ANA paid a $73 million fine). But ANA is not taking inconsistent positions — it argues here that the doctrine applies to bar recovery as to its fares, not that its fares were not the result of price-fixing. Moreover, the filed rate doctrine applies regardless of the culpability of a defendant's conduct or the possibility of inequitable results. Carlin, 705 F.3d at 869. Plaintiffs next argue that ANA waived the filed rate defense by pleading guilty, and knowingly and voluntarily acknowledging that this litigation was the appropriate vehicle for resolving the amount of ANA's financial exposure. Opp’n at 58. The Court does not find waiver here. Nor is the Court persuaded that the DOJ is interchangeable with the DOT. ANA is not barred from invoking the doctrine.
. Plaintiffs would contend that that is nearly what happened here. See Opp'n at 55 (citing Fukuda Depo. at 71-77, 83-84; Schwartz Decl. ¶¶ 29-39).
. The Court further rejects Plaintiffs’ assertion that the Court cannot grant summary judgment on some rates while leaving others intact. See Opp’n at 52. E. & J. Gallo Winery does not support Plaintiffs’ assertion. In the case at hand, Plaintiffs’ claims are not based on an index or any other compilation of air fares. The Court does not now reach the issue of Defendants' joint and several liability or whether Plaintiffs have proven a conspiracy. See id. at 52-53.