independent capacities. See PSF paras. VI-V - VI-X; DRPF paras. VI-V - VI-X. Atlas carrier-agents, nevertheless, continued to reap a substantial benefit from the use of the Atlas infrastructure -- including Atlas-leased trucks, Atlas-trained personnel, Atlas uniforms, and the extremely valuable Atlas origin and destination network -- on their own, independent, non-Atlas hauls. See DSF paras. 24-29; PSGI paras. 24-29. After deregulation, moreover, this practice threatened to saddle Atlas with significant liability problems: as part of the deregulation of the industry, Congress made national van lines expressly liable for actions committed by an agent when the agent is operating "within the actual or apparent authority" of its principal van line. 49 U.S.C. § 10934(a) (1982). Thus, to the extent that the independent shipments of Atlas's carrier-agents were often carried out with many of the trappings of an official Atlas shipment, the new liability provision placed Atlas at an enhanced, statutory risk of being held legally responsible for those non-Atlas shipments. See DSF paras. 31-34; PSGI paras. 31-34.
Atlas initiated several policies in anticipation of and in response to the changes accompanying deregulation, though it aborted each of these initiatives in turn until it finally settled on the policy at issue in this suit.
On February 11, 1982, Atlas announced that it planned to exercise its right to cancel its pooling agreement, and that it would terminate its relationship with any agent company
that continued to operate an independent, interstate authority for its own account in addition to serving as an Atlas agent. PSF paras. VI-K - VI-P; DRPF paras. VI-K - VI-P. In effect, the policy meant that Atlas would thenceforth deal only with "non-carrier" agents. PSF para. VI-N; DRPF para. VI-N. Atlas indicated that its existing carrier-agents could retain their independent authority without being terminated as Atlas agents only if they transferred that authority to a separate corporation to be operated under a new and distinct name. PSF paras. VI-N - VI-P; DRPF paras. VI-N - VI-P; DSF paras. 52-53; PSGI paras. 52-53. Under the policy, the separate company could remain legally "affiliated" with the agency company -- that is, both companies could remain under common ownership. However, the separate company would be outside the Atlas network: it would generally not have access to Atlas origin and destination services provided by other Atlas agent companies around the country, PSF para. VI-M; DRPF para. VI-M, in that Atlas agent companies were contractually barred from providing such services for the shipments of non-Atlas companies to the extent that doing so would "infringe upon the exclusivity of representation which is a part of the agency agreement." PSF para. VI-N; DRPF para. VI-N.
Announcement of the new Atlas policy and its imminent implementation predictably triggered a challenge before the Interstate Commerce Commission. On August 16, 1982, in response to this challenge, the ICC inter alia affirmed Atlas's right to withdraw from its pooling agreement, holding that "nothing in [the] existing modified pooling agreement precludes withdrawal by any party from the agreement." Atlas Van Lines, Inc - Pooling, ICC Docket No. MC-F-14784, Finance Docket No. 29972 at 3 (August 16, 1982) (Appendix A to Second Amended Complaint). On February 17, 1983, moreover, the ICC announced that the new arrangement proposed by Atlas did not require a new pooling agreement:
the ICC held that because the independent authority to be retained by the agents would be transferred to an entirely separate competitive entity outside of the Atlas network, no "pooling" between competitive carriers would be taking place and thus no pooling agreement was necessary. Atlas Van Lines, Inc. - Pooling, ICC Docket No. MC-F-14784, Finance Docket No. 29972 at 8-11 (February 17, 1983) (Appendix B to Answer to Second Amended Complaint).
Soon after Atlas announced its new policy, it contacted all of its agents by mail and asked them to respond by signing a form indicating whether or not they would comply with the new requirements for Atlas agency. PSF paras. VI-S, VI-U; DRPF paras. VI-S, VI-U. Most if not all of Atlas's agents eventually did respond, and the policy went into effect on August 18, 1983. At the time the policy was announced, Atlas had approximately 490 agents, 91 of whom were carrier-agents. Following implementation of the new policy, 48 of the carrier-agents shifted their independent authority to separate corporations, 20 gave up their authority entirely but remained as Atlas agents, 12 were terminated by Atlas for failure to comply with the policy, and 11 chose to leave Atlas either to operate on their own or to become carrier-agents for one of the other national carriers. DSF para. 82; PSGI para. 82. In February, 1984, Atlas imposed on its reconstituted agents an enhanced system of fines to enforce its prohibition against shipment of non-Atlas hauls on Atlas-leased trucks, given that under the new arrangement, as noted, the use of Atlas's service and equipment infrastructure was intended to become restricted to Atlas shipments alone. See PSF para. VI-AA; DRPF para. VI-AA; Plaintiffs' Motion to Further Supplement Summary Judgment Pleadings, Attachment A (February 24, 1984).
Plaintiffs argue that the institution of the new Atlas policy represents a "boycott" of those Atlas agent companies that failed to comply, and that the Atlas policy constitutes price-fixing because it is aimed at preventing price-cutting by carrier agents in their independent capacities. As such, plaintiffs argue that Atlas's policy should be treated as a per se violation of the antitrust laws, and that even if the policy does not merit per se treatment, it nevertheless should be condemned under the rule of reason. Defendant responds by arguing that undisputed facts establish that 1) the institution of the policy is statutorily immune from the antitrust laws under 49 U.S.C. 10934(d), 2) per se treatment, as urged by the plaintiffs, is inappropriate, and 3) no violation under the rule of reason can be shown.
It is necessary at the outset to determine whether undisputed material facts make it possible to resolve this matter on the pending cross-motions for summary judgment. Under Fed. R. Civ. P. 56(c), a motion for summary judgment may be granted only when "there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law." It is well established that the undisputed facts and "inferences to be drawn" from those facts "must be viewed in the light most favorable to the party opposing the motion." United States v. Diebold, Inc., 369 U.S. 654, 655, 8 L. Ed. 2d 176, 82 S. Ct. 993 (1962) (per curiam). To support summary judgment, the record "must demonstrate that [the] opponent 'would not be entitled to [prevail] under any circumstances. '" National Ass'n of Governmental Employees v. Campbell, 192 U.S. App. D.C. 369, 593 F.2d 1023, 1027 (D.C. Cir. 1978) (quoting Semaan v. Mumford, 118 U.S. App. D.C. 282, 335 F.2d 704, 705 n.2 (D.C. Cir. 1964)).
Courts have been cautioned to be especially careful about premature termination of a cause of action filed under the federal antitrust laws. Poller v. C.B.S., Inc., 368 U.S. 464, 473, 7 L. Ed. 2d 458, 82 S. Ct. 486 (1962). Nonetheless, summary judgment may well be appropriate even in an antitrust action where a court has permitted extensive discovery and the requirements of Fed. R. Civ. P. 56(c) have been met. See First National Bank of Arizona v. Cities Service Co., 391 U.S. 253, 289-90, 20 L. Ed. 2d 569, 88 S. Ct. 1575 (1968). In this case, both parties have moved for summary judgment, and their respective statements of undisputed material fact demonstrate that plaintiffs and defendant are in substantial agreement on the essential facts making up the core of this case.
On the basis of these facts, the Court concludes that the motions for summary judgment are ripe for disposition.
In order to prevail on a claim under Section 1 of the Sherman Act, a plaintiff must show both 1) the existence of a "contract, combination . . . or conspiracy," and 2) an unreasonable restraint of trade under either the per se rule or the rule of reason, as appropriate. Title 15 U.S.C. § 1 (1982); see ABA Antitrust Law Developments at 2 (2d ed. 1984). The undisputed facts demonstrate that plaintiffs in this action cannot meet either of these criteria.
Plaintiffs argue that a conspiracy to effectuate the Atlas policy in question existed 1) among the members of the Atlas board of directors, who voted to institute the policy, and 2) between Atlas and its agents in the field, who responded to Atlas's request for an indication of whether the agents would comply with Atlas's demands.
As to the alleged conspiracy among the members of the Atlas board of directors, it is firmly established that the actions of a corporation's board of directors do not constitute a conspiracy within the meaning of Sherman Act § 1. See Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752, 104 S. Ct. 2731, 2741 n.15, 81 L. Ed. 2d 628 (1984); Harvey v. Fearless Farris Wholesale, 589 F.2d 451, 455 n.7 (9th Cir. 1979). A corporation, which can only function pursuant to the group decisions of the members of its board of directors, cannot in this fashion be found to have conspired with itself. See Nelson Radio & Supply, Co. v. Motorola, Inc., 200 F.2d 911, 914 (5th Cir. 1952), cert. denied, 345 U.S. 925, 97 L. Ed. 1356, 73 S. Ct. 783 (1953). An exception to this rule may exist, however, where individual members of the board of directors possess an independent personal stake in a particular action of the board, that is, where they act "on their own behalf." Copperweld, supra, at n.15; accord Smith v. Northern Michigan Hospitals, Inc., 703 F.2d 942, 950 (6th Cir. 1983). Plaintiffs attempt to invoke this exception on the ground that Atlas's board of directors included the executives of some of Atlas's own agents and carrier-agents, which are separate corporate entities, independent from Atlas and from each other; plaintiffs argue that the new Atlas policies would necessarily affect both the Atlas and non-Atlas business potential of these separate companies in some fashion and thus give the agent companies on the board an independent stake in whether the policy was adopted.
In an effort to illustrate and substantiate this claim, plaintiffs allege more specifically that one non-carrier agent represented on the board received a 2% royalty from Atlas for every shipment carried on Atlas's account within a certain geographic area, and thus stood to benefit individually from the adoption of the new policy because the new policy would predictably cause tonnage previously carried on the independent accounts of Atlas's carrier-agents to be shifted to Atlas's own account. Plaintiffs' Memorandum in Opposition to Defendant's Motion for Summary Judgment, at 10-12. Plaintiffs also observe that at least one carrier-agent represented on the board subsequently sought to benefit from the policy by competing more vigorously for the business of an agent that was experiencing difficulty complying with the new Atlas policy. Id. at 8-10. Thus, plaintiffs argue that in voting for the Atlas policy at issue, the executives of Atlas's agents and carrier-agents who served on Atlas's board had a sufficiently independent stake to render their participation in the decision a conspiracy within the meaning of the Sherman Act.
There exist two, independently sufficient grounds for rejecting plaintiff's claim. The first is that even if the allegedly conflicting interests of some directors sufficed to trigger the "personal stake" exception, Congress has provided a special exemption from the antitrust laws that would preclude liability on account of the alleged agreement in question. Title 49 U.S.C. § 10934 provides, in pertinent part, that
d) The antitrust laws . . . do not apply to discussions or agreements between a motor common carrier . . . and its agents (whether or not an agent is also a carrier) related solely to . . . (4) ownership of a motor common carrier . . . by an agent or membership on the board of directors of any such motor common carrier by an agent.
(emphasis added). Defendant acknowledges that the agent companies represented on the board are separate entities from each other and from Atlas. Thus, the non-carrier and carrier-agents alike presumably possess at least some degree of interest in the success of their own companies, which on occasion may diverge from those of Atlas in general and other Atlas agents and carrier-agents individually. However, 49 U.S.C. 10934(d) does not retain any "personal stake" exception. Rather it expressly allows agents and carrier-agents of a van line to serve on the van line's board of directors, participate in its deliberations and decisions, and exercise responsibility for the affairs of the principal free of the risk of antitrust lability for doing so, despite their obvious status as independent entities with at least these basic independent interests. See infra note 11. The statute, moreover, specifically immunizes "discussions and agreements" regarding the "ownership of motor common carriers" by a van line's agents. The legislative history of this provision clarifies that it was intended to "immunize carriers and their agents from the antitrust laws with respect to certain dealings between them." S. Rep. No. 497, 96th Cong., 1st Sess. 8 (1979).
Congress's aim, in particular, was to
"assure that discussions between a principal carrier and its agents related solely to [ inter alia ] . . . pooling or divisions between the principal carrier and its agents . . . and ownership of a principal carrier by an agent . . . are not discussions that would be in violation of the antitrust laws."