The opinion of the court was delivered by: OBERDORFER
This is a private antitrust action brought pursuant to Section 1 of the Sherman Act, 15 U.S.C. § 1 (1982), against Atlas Van Lines, Inc. ("Atlas"), a nationwide van line company.
Plaintiffs are ten present and former agents of Atlas. They challenge an Atlas policy -- made effective in August, 1983 -- under which Atlas announced that it would terminate its agency relationship with any agent that maintained independent operations in the interstate moving business unless the agent transferred its independent authority to do so to a separate and distinct (albeit affiliated) company. The case is presently before the Court both on defendant's motion for summary judgment and on plaintiffs' motion for partial summary judgment as to liability. After careful consideration of undisputed facts developed after extensive discovery and set out pursuant to Fed. R. Civ. P. 56 and Local Rule 1-9(h), as well as the arguments advanced by the parties in their memoranda and at oral argument, the Court concludes that, for the reasons set forth below, plaintiffs' motion for partial summary judgment as to lability must be denied, and defendant's motion for summary judgment must be granted.
This lawsuit involves, in essence, the legality of Atlas's response to the regulatory and commercial changes resulting from the deregulation of the household goods moving industry in 1980. A brief overview of Atlas's methods of operation and of the recent changes in the industry is necessary to an understanding of the nature of the claims at issue.
Defendant Atlas Van Lines holds authority from the Interstate Commerce Commission ("ICC") to transport goods from state to state on a nationwide basis. Statement of Material Undisputed Facts in Support of Plaintiffs' Motion for Partial Summary Judgment As To Liability para. II-A (hereinafter "PSF" ["Plaintiffs' Statement of Facts"]); Defendant's Response to Plaintiffs' Statement of Material Undisputed Facts para. II-A (hereinafter "DRPF" ["Defendant's Response to Plaintiffs' Facts"]); " Defendant's Statement of Material Facts As To Which There Is No Genuine Issue para. 1 (hereinafter "DSF" ["Defendant's Statement of Facts "]); Plaintiffs' Statement of Genuine Issues para. 1 (hereinafter "PSGI").
As has been typical of the operation of other national van lines, Atlas exercises this authority primarily through a group of "agent" moving companies around the country. These "agent" companies are independent entities that have entered into standardized "Agency Agreements" with Atlas to carry out interstate shipments under Atlas's authority, PSF paras. II-C, V-P, DRSF paras. II-C, V-P, Plaintiffs' Appendix I (hereinafter "Plaintiffs' App."), and that agree -- in making Atlas shipments -- to abide by the operating procedures, painting and maintenance standards, and uniform rates, inter alia, provided for by the Agency Agreement. See PSF paras. V-O - V-X; DRPF paras. V-O - V-X; DSF paras. 2-13; PSGI para. 2-13. In addition, representatives of some of Atlas's agent companies sit on the Atlas board of directors, PSF para. II-K, V-A; DRPF paras. II-K, V-A -- a practice that has been typical in the industry during many years of ICC oversight, see S. Rep. No. 497, 96th Cong., 1st Sess. 8 (1979); H. Rep. No. 1372, 96th Cong., 1st Sess. 10 (1979), and that won express legislative immunity from the federal antitrust laws -- as described below -- with the enactment of 49 U.S.C. § 10934(d) in 1980.
Nonetheless, the agent companies in the field remain wholly independent from Atlas itself and interact with Atlas in accordance with standard contractual arrangements. PSF para. V-P, DRPF para. V-P.
It has also been common in the industry, in addition, for many agent companies to hold their own, separate interstate authority from the ICC. E.g., PSF paras. I-E, I-G; DRPF paras. I-E, I-G; see Practices of Motor Common Carriers of Household Goods (Agency Relationships), 115 M.C.C. 628, 629 (1972) (hereinafter referred to as " Practices "). Agent companies that hold such independent authority in their own right are termed "carrier-agents"; agents that hold no such independent authority are termed "non-carrier" agents. Practices, supra, at 629. While a non-carrier agent accepts shipments solely as an agent for the principal van line that it serves, a carrier-agent has more flexibility. It may, like a non-carrier agent, accept shipments for carriage on the account of its principal carrier. But a carrier-agent may also accept certain shipments for carriage on its own account -- rather than that of the principal carrier for which it serves as an agent -- when the distance of the shipment does not exceed the geographic range of its independent authority and when other factors render it profitable for the carrier-agent to do so. E.g. PSF paras. V-H - V-J; DRPF paras. V-H - V-J; see Practices, supra, at 629. A carrier-agent, in this fashion, simultaneously functions both as an agent of the principal van line that it serves, and, on certain shipments, as one of the van line's competitors, in that it may shift to its independent account certain shipments that might otherwise have been carried on the van line's account. E.g. PSF paras. V-G, V-I; DSF para. 22; PSGI para. 22; see Practices, supra, at 629. Some carrier-agents, moreover, enjoy the distinct benefit of using van line personnel, van line uniforms and equipment (with van line insignia), and van line origin and destination services even on shipments carried out on their own, independent authority, e.g., DSF paras. 24-29; PSGI paras. 24-29; see Plaintiffs' App. G, and thus can avoid the costs of building the business infrastructure necessary to exercising their independent carrier authority effectively. See DSF para. 27; PSGI para. 27. Atlas carrier-agents, for example, enjoyed this latter benefit prior to the events at issue in this lawsuit. DSF paras. 24-29; PSGI paras. 24-29.
Federal law has long given special immunity from the antitrust laws to carrier-agent relationships, but only if 1) the van line and its carrier-agents enter into a "pooling agreement" that spells out the division of business, sharing of facilities, and other terms according to which the van line will allow its "agents" to compete with it, and 2) the pooling agreement meets ICC approval. See 49 U.S.C. §§ 11341-11342 (1982); Practices, supra, at 633. Significantly, a pooling agreement may be terminable unilaterally by either the national van line or its carrier-agents, and the exercise of this option eliminates the automatic antitrust immunity that a carrier-agent relationship otherwise enjoys. See DSF para. 24; PSGI para. 24. Atlas entered into a pooling agreement in 1957, which set the terms according to which, thereafter, it allowed its agents to acquire and operate their own independent ICC authority. DSF para. 24; PSGI para. 24. Other van lines, by contrast, have declined to enter into pooling agreements at all, and indeed have traditionally chosen to employ only non-carrier agents. E.g., PSF para. III-I; DRSF para. III-I. Representatives of carrier-agents -- where the van line uses them -- may sit on a van line's board of directors just as do representatives of non-carrier agents, both pursuant to prior practice, e.g., PSF para. V-A; DRPF para. V-A, and under the more recently enacted federal antitrust exemption contained in 49 U.S.C. § 10934(d) (1982).
Finally, it is a central feature of the van line industry that agents within a van line's infrastructure often must agree to provide their services only to that particular van line and to other agent companies within the van line's network. See, e.g., PSF para. V-Q; DRPF para. V-Q; Plaintiffs' App. G.As in many other industries, "exclusive dealing" is a common method of operation. See Plaintiffs' App. G, at 1-3. For van lines that have exclusive dealing arrangements and that utilize only non-carrier agents, thus, only shipments on the van line's own account are carried within the van line's infrastructure. For van lines that have exclusive dealing arrangements and that use carrier-agents as well as non-carrier agents, however, non-van line shipments originating from the carrier-agents' independent operations may be carried within the van line's infrastructure as well. The establishment of such arrangements for the benefit of a van line's carrier-agents is a matter of voluntary accommodation on the part of the van line -- though once established, it may be governed by the van line's ICC-certified pooling agreement. See, e.g., DSF para. 24; PSGI para. 24; see Practices, supra, at 633. Nonetheless, almost no van line, apparently, allows the agents within its network regularly to handle the traffic of any company that is not also one of the van lines' agents. E.g., DSF para. 22; PSGI para. 22; see Plaintiffs' App. G.
Prior to the deregulation of the moving industry beginning around 1979, the extent to which agents could and did make use of independent ICC authority -- if their van lines allowed them to do so at all -- was limited. DSF para. 23; PSGI para. 23. First, then-existing ICC regulations made it very difficult for non-carrier agents to obtain, or for existing carrier-agents to augment, their own interstate authority. DSF para. 35; PSGI para. 35. Second, even for agents that did possess such authority, it was usually -- due to ICC regulations -- of limited geographic scope. DSF para. 35; PSGI para. 35. Most important, the ICC required that carrier-agents use the same rates for their "independent carrier" shipments as for their "agency" shipments -- that is, price competition between van lines and the independent operations of their carrier-agents was expressly barred. DSF para. 36; PSGI para. 36.
The advent of deregulation in the moving industry represented a dramatic change in these business circumstances. With deregulation, agents could obtain independent interstate authority or expand existing interstate authority quite easily. DSF para. 35; PSGI para. 35. By the same token, independent carriers and local moving companies wishing to offer interstate service could readily obtain their own interstate authority rather than associating with a national van line in order to do so. Also, the ICC no longer imposed narrow geographic limits on the scope of such new authority. Agents, as well as independent carriers, could obtain authority allowing them to carry goods on their own account not only locally, but regionally or even nationally as well. See DSF para. 35; PSGI para. 35. Moreover, and perhaps most significantly, the ICC abandoned the rule that carrier-agents were required to charge identical rates on their agency and non-agency shipments. DSF para. 36; PSGI para. 36.
Thus, as a result of deregulation, Atlas faced the prospect of potential Atlas shipments being shifted to independent carrier-agent accounts 1) by many more agents than before, 2) on long distance hauls as well as local hauls, and 3) with greater frequency due to newly authorized price competition from its carrier-agents in their 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 ...