Management was under a duty to act in the interests of Carrier Express, and Carrier Express ultimately controlled the actions of its agent, Oak Management. As such, an agreement between Oak Management and Carrier Express to terminate the Siegel Transfer contract "does not represent a sudden joining of two independent sources of economic power previously pursuing separate interests." Copperweld, supra, 104 S. Ct. at 2741; see also Pennsylvania Independent Business Association, Inc. v. Unicorn Marketing, LEXIS GENFED Library DIST. File, 1985 WL 2812 (E.D.Pa. September 23, 1985) (motion to dismiss granted where court concludes insurance company incapable of conspiring with its agents over whom it had power to assert control in the conduct of its business affairs). Therefore, Tom Rediehs and Kermit Bryan, acting in their capacity as officers/employees of Oak Management, cannot be found to have conspired with the defendants for purposes of our section 1 scrutiny.
Plaintiffs argue that Tom Rediehs and Kermit Bryan stood to gain from the termination of the Siegel contract, and that a jury trial is necessary to determine the true motives and intentions behind their participation in the termination decision. For example, plaintiffs argue that Tom Rediehs, by virtue of his relationship to Rediehs Express, another carrier, stood to gain by the potential increase in business resulting from the termination of the Siegel Transfer contract. (Plaintiffs' Opposition Memorandum, at 20.) While they do not cite to the relevant authorities, we assume that plaintiffs are attempting to invoke the recognized exception to the Copperweld rule that if corporate officers or employees act for their own interests, and outside the interests of the corporation, they are legally capable of conspiring with their employers for purposes of section 1. Tunis Brothers Co. v. Ford Motor Co., supra, 763 F.2d at 1496; International Travel Arrangers v. NWA, Inc., 991 F.2d 1389, 1398 (8th Cir. 1993), cert. denied, 126 L. Ed. 2d 309, 114 S. Ct. 345 (1993).
Plaintiffs cannot rely on this exception. While plaintiffs hypothesize about the potential interests and motivations of James Matthews, William Van Heel, Tom Rediehs, Kermit Bryan, the fact remains that these men were acting on behalf of Carrier Express in terminating the contract. "It is perfectly plain than an internal 'agreement' to implement a single, unitary firm's policies does not raise the antitrust dangers that § 1 was designed to police." Copperweld, supra, 104 S. Ct. at 2740. What's more, while plaintiffs make reference to alleged personal interests of the four men which are distinct from those of Carrier Express, plaintiffs have alleged no interest on their part in competition with Carrier Express. It is the joining together of formerly competitive interests which implicates the antitrust laws. See Weiss v. York Hospital, supra, 745 F.2d at 817. Pennsylvania Independent Business Association, Inc. v. Unicorn Marketing, supra.
Finally, and most importantly, plaintiffs have conceded that Tom Rediehs opposed the termination of the contract.
(Plaintiffs' Opposition Memorandum, at 47). Given his opposition to the termination, it would be impossible for Mr. Rediehs to have a "unity of purpose or common design and understanding, or a meeting of the minds" in the decision that is necessary to become a co-conspirator under § 1. Copperweld, 467 U.S. at 771.
Thus, plaintiffs cannot establish concerted action by pointing to Mr. Redieh's attendance at the January 4 meeting.
Plaintiffs have presented no evidence, besides mere speculation,
that Matthews, Van Heel, Rediehs or Bryan were seeking to terminate the Siegel contract for any reason aside from the fulfillment of their duties to their respective employers.
As the Third Circuit has stated, the party resisting the motion for summary judgment is required to identify specifically the evidence of record which supports the claim and upon which a verdict in its favor may be based. Childers v. Joseph, 842 F.2d 689 (3d Cir. 1988). Indeed, the evidence we do have suggests the opposite - that Rediehs opposed the termination decision and that the decision went against his own personal choices. Because plaintiffs have produced no evidence that Matthews, Van Heel, Rediehs or Bryan were actually acting in their own interests and against the interests of Carrier Express, we are obligated to grant summary judgment.
3. Post-Termination Refusals to Deal
In their attempt to demonstrate concerted action with respect to defendants' alleged refusal to deal, plaintiffs have only made allegations against officers, employees, and agents of Bethlehem and its subsidiaries. Our earlier analysis applies equally well to these refusal to deal claims.
As the Third Circuit held in Weiss, actions by commonly owned companies in deciding with whom to do business cannot constitute a concerted refusal to deal in violation of section 1 of the Sherman Act. Weiss v. York Hospital, supra, 745 F.d at 819 n. 57. Plaintiffs refusal to deal claim is based on nothing more than the alleged refusal of Bethlehem and Carrier Express to do business with Siegel Transfer following the termination of the contract.
The only people plaintiffs point to in their Opposition Memorandum are either (1) employees of Oak Management carrying out Carrier Express's instruction not to load Siegel Transfer trucks with Carrier Express freight following the contract termination, or (2) Bethlehem employees who allegedly stated that they would not use Siegel equipment to haul Bethlehem Steel freight. (Plaintiffs' Opposition Memorandum, at 23, 56). We have already held that the conduct of Bethlehem's employees and its subsidiary's agents cannot constitute concerted action.
For example, plaintiffs point to evidence that Mr. Larry Rogers, a Bethlehem Steel Transportation Manager at the Company's Johnstown, Pennsylvania plant, told Mr. Steve Everette, an agent for various motor carriers used by Mr. Rogers to transport Bethlehem products, not to use Siegel equipment to haul Bethlehem freight from its rod mills and expressed concern about Siegel's safety record. (Plaintiffs' Exhibit 22, at P 26). Following the termination of the Siegel contract, it obviously became necessary for Bethlehem and Carrier Express employees to tell its agents not to use Siegel trucks to transport freight for Carrier Express. As defendants argue, there would not be much purpose or effect in terminating the contract with Siegel Transfer if Carrier Express could not tell its own agents, the individuals who actually place Carrier Express freight with motor carriers, about the termination. This simply constitutes unilateral and independent action by a company deciding with whom it will do business. Monsanto Co. v. Spray-Rite Service Corp., supra, 465 U.S. at 761. See also International Logistics Group v. Chrysler Corp., 884 F.2d 904, 907 (6th Cir. 1989), cert. denied, 494 U.S. 1066, 108 L. Ed. 2d 784, 110 S. Ct. 1783 (1990) (no section 1 conspiracy where company acts unilaterally in formulating and implementing its own marketing policy, even if dealer or distributor involuntarily complies with that policy in order to continue doing business with that company). Therefore, plaintiffs' boycott claims are fatally defective for the same reasons we detailed above.
4. Other Antitrust Claims
Plaintiffs remaining antitrust claims suffer from the same defect -- they concern unilateral conduct only. The "five percent rebate" claim and the "transportation law" claims cannot survive as antitrust claims because plaintiffs have presented no evidence of concerted action. These claims involve the contractual relationship between a parent corporation and its subsidiaries. As we have already detailed, contractual relations within commonly controlled corporations do not raise section 1 Sherman Act concerns. Similarly, plaintiffs' "control" claim defies logic. Plaintiffs' claim that a parent corporation's "control" of its subsidiary is somehow violative of section 1 is absurd -- as we have detailed above, a parent corporation and its subsidiary are considered a single entity for the purposes of section 1.
Furthermore, even if plaintiffs can establish a violation of the Interstate Commerce Act by virtue of their "transportation law claims,"
such a violation would not thereby constitute a section 1 Sherman Act claim. "Conduct not within the scope of the [Sherman] Act is not made into an antitrust violation by accompanying conduct which is . . . illegal under some other law." Sitkin Smelting & Refining Co. v. FMC Corp., 575 F.2d 440, 447 (3d Cir. 1978), cert. denied, 439 U.S. 866, 58 L. Ed. 2d 176, 99 S. Ct. 191 (1978).
Thus, for all of these reasons, we will grant defendants motion for summary judgment as to Count I of Plaintiffs' Amended Complaint.
B. Transportation Law Claims
In Count XI of their Amended Complaint, plaintiffs state various "civil conspiracy" and "transportation law" claims. Plaintiffs allege that aspects of the contractual relationship between Bethlehem Steel and Carrier Express were violative of the Interstate Commerce Act, 49 U.S.C. § 10761 et seq., and the regulations adopted pursuant thereto. Specifically, plaintiffs first allege that the ten percent commission received by Carrier Express from Bethlehem was an improper rebate pursuant to 49 U.S.C. §§ 10741(a), 10749, 10761, 10762 and 11901 and the regulations of the ICC (Amended Complaint, P 92). Second, plaintiffs allege that the five percent rebate for all shipments by Bethlehem Steel carried by the Plaintiffs was illegal under 49 U.S.C. §§ 10741(a), 10749, 10761, 10762 and 11901 and the regulations of the ICC, as well as the Elkins Act 49 U.S.C. §§ 11902, 11903 and 11915 (Amended Complaint, P 93). Third, plaintiffs argue that the ownership and control arrangement between Bethlehem Steel, PB&NE Railroad, Bethtran and Carrier Express is illegal.
Defendants move to dismiss Count XI for plaintiffs' failure to state a claim pursuant to Fed.R.Civ.Proc. 12(b)(1) and 12(b)(6).
A private federal remedy for violating a federal statute is a prerequisite for finding federal question subject matter jurisdiction. As the Supreme Court stated in Merrell Dow Pharmaceuticals Inc. v. Thompson, 478 U.S. 804, 106 S. Ct. 3229, 92 L. Ed. 2d 650 (1986):
a complaint alleging a violation of a federal statute as an element of a state cause of action, when Congress has determined that there should be no private, federal cause of action for the violation, does not state a claim "arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331.
Id., 106 S. Ct. at 3237; see also Smith v. Industrial Valley Title Ins. Co., 957 F.2d 90, 93 (3d Cir. 1992), cert. denied, 120 L. Ed. 2d 903, 112 S. Ct. 3034 (1992) ("a private federal remedy for violating a federal statute is a prerequisite for finding federal question jurisdiction.") Plaintiffs bring their claims under the Interstate Commerce Act and, therefore, it must be determined whether plaintiffs are entitled to a private federal remedy under the Act.
With its creation of the Interstate Commerce Commission, Congress created an administrative agency charged with the primary responsibility for the investigation, regulation, adjudication and enforcement of controversies arising under the Interstate Commerce Act. F.P. Corp. v. Ken Way Transportation, Inc., 821 F. Supp. 1032, 1036 (E.D.Pa. 1993). In most instances, a private party is required by the Act to petition the ICC to enforce any alleged violations of the Act. See e.g. 49 U.S.C. § 11701(b). In addition, both civil and criminal penalties for violations of the Act are generally paid to the United States Government. See e.g. 49 U.S.C. §§ 11902, 11903 (civil and criminal penalties for accepting rebates from common carriers and rate discrimination are paid to the United States Government).
There are a few limited sections of the Interstate Commerce Act that do indeed permit a private party to seek a remedy in federal court. See Vosch v. Werner Continental, Inc., 734 F.2d 149 (3d Cir. 1984), cert. denied 469 U.S. 1108, 83 L. Ed. 2d 779, 105 S. Ct. 784 (1985) (holding that section 11708(a) of the Act provides the only basis for private enforcement of the Act). These sections, however, are neither relied upon by the plaintiffs and, more importantly, are inapplicable to this case. These sections include 49 U.S.C. §§ 11704, 11705(b) (1) & (2), 11707 and 11708. Section 11704 permits a private party to bring a suit to prevent abandonment of freight forwarder service, a situation inapplicable here. Section 11708 is limited to clear violations of certain provisions of the Act that regulate carriers' operating certificates and permits, issues which are not present here.
Sections 11705 and 11707 both permit private suits against common carriers. However, plaintiffs have conceded that when operating as a carrier, Carrier Express was operating at all relevant times as a contract carrier. (Plaintiffs' Reply Memorandum in Support of Plaintiffs' Motion to Amend Complaint, at 12.) They have similarly conceded that Siegel Transfer acted as a motor contract carrier. (Answer and Memorandum of Plaintiffs in Opposition to Defendants' Motion to Dismiss, at 9.) Since there are no allegations regarding common carriers in this case, sections 11705 and 11707 are inapplicable here.
The only other area of private actions permitted under the Act involve so-called "undercharge" claims. In a typical undercharge case, a common carrier negotiates with a shipper for a lower rate than the tariff that the common carrier is required to file with the ICC. After the common carrier receives payment for the shipments, it sues the shipper under the so-called "filed rate doctrine" for the difference between the filed tariff rate and the negotiated rate. See e.g., Maislin Industries, U.S. v Primary Steel, 497 U.S. 116, 120, 110 S. Ct. 2759, 2762-63, 111 L. Ed. 2d 94 (1990). As stated above, a common carrier may only charge the rate that is contained in the tariff it files with the ICC. 49 U.S.C. § 10761. This rule forms the basis for the "filed rate doctrine." Since 1983, contract carriers have been exempt from the rate filing and uniform rate requirements of the Interstate Commerce Act.
Exemption of Motor Contract Carriers from Tariff Filing Requirements, Ex Parte No. MC-165, 133 M.C.C. 150 (1983), aff'd, Central and Southern Motor Freight Tariff Association, Inc. v. United States, 244 U.S. App. D.C. 226, 757 F.2d 301, 305-306, 322-330 (D.C.Cir.), cert. denied, 474 U.S. 1019, 88 L. Ed. 2d 553, 106 S. Ct. 568 (1985). Thus, the undercharge theory necessarily involves only common carriers, not contract carriers.
Once again, there is no allegation that any of the parties in this case was a common carrier. Consequently, the undercharge line of cases are inapplicable here.
While conceding that Siegel Transfer and Carrier Express were contract carriers at all relevant times, plaintiffs argue that Carrier Express was a "broker" and was prohibited by ICC regulation (45 CFR 1045.9) from receiving a "commission" or paying a "rebate." Plaintiffs argue that undercharge claims may be brought against brokers who violate the regulations of the ICC. See Memorandum of Plaintiffs in Opposition to Defendants' Motion to Dismiss, at 8-9. Once again, plaintiffs seem to misunderstand the nature of an undercharge claim. An undercharge claim must involve a common carrier subject to the filing and uniform rate requirements of the Interstate Commerce Act. While brokers may or may not be liable in such cases,
post-1983 undercharge cases always involve common carriers, an element glaringly absent in this case. See e.g. Reiter v. Cooper, 122 L. Ed. 2d 604, 113 S. Ct. 1213 (1993); F. P. Corp. v. Ken Way Transportation, Inc., supra ; Atlantis Express, Inc. v. Standard Transportation Services, Inc., 955 F.2d 529 (8th Cir. 1992).
Plaintiffs cite no other sections of the Interstate Commerce Act which provide for private enforcement. Instead, they simply restate those sections of the Interstate Commerce Act and the ICC regulations which they claim were violated by defendants. The only sections cited by plaintiffs in their Amended Complaint are sections 10741(a), 10749, 10761, 10762, and 11901 and the Elkins Act, 49 U.S.C. §§ 11902, 11903 and 11915. None of these sections contains an enforcement provision permitting a private litigant to bring an action in federal court to remedy an alleged violation of the section. See e.g. Bloomer Shprs Ass'n v. Ill. Cent. Gulf R. Co., 655 F.2d 772 (7th Cir. 1981) (no private right of action under the Elkins Act).
In fact, these sections contain no enforcement provisions at all.
Even if plaintiffs did identify conduct on the part of the defendants which would constitute a violation of the Interstate Commerce Act and the relevant ICC regulations, we would not pass judgment on the legality of defendants actions under these laws. Such a determination is most properly left to the Interstate Commerce Commission, the expert administrative body charged with investigating and remedying such violations. See B.F. Goodrich Co. v. Northwest Industries, Inc., 424 F.2d 1349, 1355 (3d Cir. 1970), cert. denied 400 U.S. 822, 27 L. Ed. 2d 50, 91 S. Ct. 41 (1970) ("private party injured by a violation of the [Interstate Commerce] Act must seek remedial relief from the [Interstate Commerce] Commission.") We hold, therefore, that plaintiffs have brought their grievances before the wrong forum because they lack a private cause of action under the Interstate Commerce Act to complain of such conduct in federal court.
C. State Law Claims
1. Maryland Anti-Trust Act
Defendants have moved for summary judgment with respect to Count II of Plaintiffs' Amended Complaint, which has been brought under the Maryland Anti-Trust Act, Md.Comm.Law.Code Ann. § 11-204(a)(1)(1990). The Maryland Anti-Trust Act was designed to complement the federal antitrust laws. Section 11-202(a) of the Act states that, in construing the Act, "the courts [are to] be guided by the interpretation given by the federal courts to the various federal statutes dealing with the same or similar matters."
Section 11-204(a)(1) of the Maryland Act is essentially the same as Section 1 of the Sherman Act. "Thus, the decisions of the federal courts interpreting Section 1 of the Sherman Act guide us here." Natural Design, Inc. v. Rouse Company, 302 Md. 47, 53, 485 A.2d 663, 666 (1984) (applying the Copperweld doctrine in determining whether conspiracy to violate Section 11-204(a)(1) of the Maryland Act has been adequately demonstrated).
We have already determined that plaintiffs cannot demonstrate concerted action and, as a result, defendants are entitled to summary judgment with respect to plaintiffs' federal antitrust claims. Because plaintiffs' claims under the Maryland Act are duplicative of their Section 1 claims under the federal antitrust laws, summary judgment must likewise be granted in favor of defendants as to Count 2 of Plaintiffs' Amended Complaint. See Purity Products, Inc. v. Tropicana Products, Inc., 702 F. Supp. 564, 574 (D. Md. 1988), aff'd, 887 F.2d 1081 (4th Cir. 1989) (dismissing duplicative Maryland antitrust claim where federal claim failed).
2. Breach of Contract
In Counts III and IV of their Amended Complaint, plaintiffs allege that defendants Carrier Express and Bethtran breached the Siegel Transfer/Carrier Express contract. The issue presented by plaintiffs' breach of contract claim is whether, as defendants contend, Carrier Express and Bethtran were entitled, pursuant to P 13 of the contract (hereinafter the "termination clause") to terminate the contract. Both plaintiffs and defendants agree that the interpretation of the Siegel Transfer/Carrier Express contract is a question of law rather than of fact and is for the Court, rather than a jury, to decide. (Memorandum in Support of Defendant's Motion for Summary Judgment, at 18; Plaintiffs' Opposition Memorandum at 3). We conclude that, as a matter of law, the clear and unambiguous language of the contract demonstrates that defendants were justified in terminating the contract and, therefore, that they did not breach the contract.
To begin with, both parties have analyzed the breach of contract issue under the assumption that Maryland law governs the construction of the contract. (Memorandum in Support of Defendants' Motion for Summary Judgment, at 20 n. 59; Plaintiffs' Amended Complaint, P 25). As we have diversity jurisdiction over this state law claim,
we apply Pennsylvania's (the forum state's) choice of law rule. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 61 S. Ct. 1020, 85 L. Ed. 1477 (1941). Pennsylvania's rule requires examination of the significant contacts as they relate to the states' public policies underlying the issue in question. General Star National Insurance Co. v. Liberty Mutual Insurance, 960 F.2d 377, 379 (3d Cir. 1992); Melville v. American Home Assurance Co., 584 F.2d 1306, 1312-15 (3d Cir. 1978) (predicting Pennsylvania would apply the combination of significant contacts and interest analysis to contract actions). Since the contract was prepared and executed in Maryland, and plaintiffs are all incorporated and/or have their principal places of business in Maryland, (Plaintiffs' Amended Complaint, PP 7-9, 25), we agree with the approach taken by plaintiffs and defendants and we will interpret the contract utilizing Maryland law. Nonetheless, we are confident that our conclusion would be the same under the law of Pennsylvania.
Maryland courts employ the so-called "objective test" when interpreting contracts. The written language of a contract governs "the rights and liabilities of the parties, irrespective of the intent of the parties at the time they entered into the contract, unless the written language is not susceptible of a clear and definite understanding." Pantazes v. Pantazes, 77 Md. App. 712, 551 A.2d 916, 919 (Md. Ct. Spec. App. 1989), cert. denied 315 Md. 692, 556 A.2d 673 (1989); Kasten Construction Co. v. Rod Enterprises, Inc., 268 Md. 318, 301 A.2d 12, 17-18 (1973) (true test of what is meant in a contract is what "a reasonable person in the position of the parties would have thought it meant").
Paragraph 13 of the contract defines the duration of the agreement as well as the procedure for renewal and termination. It reads as follows:
This AGREEMENT is to become effective January 4, 1986 and shall remain in effect for a period of three yrs from such date, and from year to year thereafter, subject to the right of either party hereto to cancel or terminate the AGREEMENT at any time upon not less than thirty (30) days written notice of one party to the other.