# Petition — Greyhound Corp. v. Mt. Hood Stages, Inc.

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385004_2724%3A1

## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition
- **Published:** January 1, 1978
- **Citation:** 437 U.S. 322

## Text

Supreme Court, U. S.
FILED

7 25 1977

—————

In the Supreme Court of the 100.12. 0%
United States

OcTOBER TERM, 1977

THE GREYHOUND CORPORATION AND GREYHOUND LINES, INC.,

Petitioners,
vs.
MrT. Hoop Sraces, INC.,
doing business as PACIFIC TRAILWAYS,
Respondent.

Petition for Writ of Certiorari to the United States
Court of Appeals for the Ninth Circuit

JOHN R. REESE
RICHARD C. BRAUTIGAM

McCuTCcHEN, DoyLe, BRowN bg ponte nar agd
& ENERSEN rancisco, ornia 94111
Three Embarcadero Center (415) 393-2000
San Francisco, California 94111 Attorneys for Petitioners
JAMES H. CLARKE

DEZENDORF, SPEARS,
LUBERSKY & CAMPBELL
800 Pacific Building
Portland, Oregon 97204

KEITH A. JENKINS
| Greyhound Tower
) Phoenix, Arizona 85077

Of Counsel

———
SORG PRINTING COMPANY OF CALIFORNIA, 346 FIRST STREET, SAN FRANCISCO 94105

SUBJECT MATTER INDEX

Page
2 RR ALIN, Fel eA aed RA AD SPORT iii
8 ER ELIE or OU LE SNM Cen dere idalsdbelinia 1
FEE eT ET NO Ie RTO FS ee 2
Questions Presented .......................-......-0------ Kiaiaaimetianins 2
IE viitiiiaslintitsenicaniceenntiintinaiphlanion a 4
I I icin csisdiichinatascunediuniiinidiniiieaibnaniuenineliie 5
Reasons for Granting the Writ -...... lepine 8

I. The Court of Appeals’ Decision Is Inconsistent with
Section 5{12) of the Interstate Commerce Act and
Conflicts with Prior Decisions of This Court ............ 8

A. The Court of Appeals’ Decision Is Contrary to
Established Principles of Exclusive Regulatory
SEE. -ehsscanteemssticnninsinigpnineiiiinbipnatsiseniaentiteindaiann 9

B. The Court of Appeals’ Decision Is Contrary to
the Express Immunity Provision of 49 U.S.C.
I ciebiacciiecitiadinsdceisninsianvitienattactibioe 19

II. The Court of Appeals’ Decision Is Contrary to Sec-
tion 5(a) of the Clayton Act and Presents Important
Questions of Antitrust Law and Enforcement ........_ 22

Ili. The Court of Appeals’ Decision Presents Important
Questions of the Application and Tolling of the
Statute of Limitations in Antitrust Cases ............ 26
A. The Decision Below Is Contrary to 15 U.S.C.

DID cccteccstenienscsntinccnnctnceenenennanisnnnmsnccansaseneasennss 26

il

SUBJECT MATTER INDEX

Page

B. The Court of Appeals’ Decision Raises Serious

Questions Concerning the Application of the
Doctrine of Fraudulent Concealment to Private

NE CED cskciicissnictshiuitninccinsinsuieppitiaaictn en 32
ID scsipicscdeeciecicinctelesejucnioceneiaitecnininiseamtepuiisinbtagiainsaiiiinies 36
SII oe seitetcnnccescscsanssinininscipcngansssnatentinabnesaqsniamiiinvieetiii 37

TABLE OF AUTHORITIES

CASES
Pages
Additional Service to Latin America, 6 C.A.B. 857 (1946) .. 16
Air Freight Haulage Co., Inc. v. Ryd-Air, Inc., 408 F.Supp.
RF Es CIPI: Senitlasnicpirecincniiicdateiilperhnictnisatinnedepcaiece 14
Aloha Airlines, Inc. v. Hawaiian Airlines, Inc., 489 F.2d
203 (9th Cir. 1973), cert. denied, 417 U.S. 913 (1974) .. 19

Bausch Mach. Tool Co. v. Aluminum Co. of America, 79

F.2d 217 (2d Cir. 1935) -...cccccccocecceee00-0-- Ro ae En 25
Buckeye Powder Co. v. Du Pont Powder Co., 248 U.S. 55

(1918) PE erage le A TOO 22
Buckhead Theatre Co. v. Atlanta Enterprises, Inc., 327 F.2d

365 (Sth Cir.), cert. dented, 379 U.S. 888 (1964) ........... 22.
Buffalo Forge Co. v. United Steelworkers of America, 428

ac ec caecTacn iNadebliitienhenasitnns 18

California Parlor Car Tours Co., 93 M.C.C. 392 (1963)... 5

_City of Burbank v. General Electric Co., 329 F.2d 825 (9th

I: icnicsiniclsbleseilildsieietuiennpitecl tdciebiienetsiiinenei 24, 25
Control Data Corp. v. IBM Corp., 421 F.2d 323 (8th Cir.
1970) invisiblatpnihepideintiiidihiaiieniyineniniomnspemenvinen 25

Control Data Corp. v. IBM, 306 F.Supp. 839 (D. Minn.
1969), aff'd per curiam sub nom., Data Proc. Fin. & Gen.
Corp. v. IBM, 430 F.2d 1277 (8th Cir. 1970) 00000... = 25

County of Marin v. United States, 356 U.S. 412 (1958) .. 19

Emich Motors Corp. v. General Motors Corp., 340 US.

AT AS RTT eR ea 23
Falls Sand & Gravel Co. v. Western Concrete, Inc., 270

TS ee 34
Feak v. Marion Steam Shovel Co., 84 F.2d 670 (9th Cir.),

cert. denied, 299 U.S. G04 (1936) eee ene enen ee 34

Foster & Kleiser Co. v. Special Site Sign Co., 85 F.2d 742
(9th Cir. 1936), cert. denied, 299 US. 613 (1937) ..... 34

iv TABLE OF AUTHORITIES

Pages
Gordon v. New York Stock Exchange, Inc., 422 U.S. 659
(2GTDD
tolled by fraudulent } with considerable reservation and
0 ee eee ae eee ae ane ©
examine the problem and resolve it.” Westinghouse Elec. Corp. v
City of Burlington, Vermont, 326 F.2d 691, 692-693 (D.C. Cir.
1964) (Burger, J., concurring specially).
See generally Note, Fraudulent Concealment and Section 4(b) of the
Clayton Act, 49 U.Va.L.Rev. 276 (1963); Comment, Clayton Act Statute
of Limitations and Tolling by Fraudulent Concealment, 72 Yale L.J.
600 (1963).

36
CONCiUSION

A writ of certiorari should issue to review the judgment and
opinion of the Court of Appeals for the Ninth Circuit.

Respectfully submitted,

JOHN R. REESE

RICHARD C. BRAUTIGAM
Three Embarcadero Center
San Francisco, California 94111
(415) 393-2000

Attorneys for Petitioners
McCutTcHEN, DoyLe, BRowN
& ENERSEN

James H. CLARKE

DEZENDORF, SPEARS, LUBERSKY
& CAMPBELL

KEITH A. JENKINS

Of Counsel
October 24, 1977.

Appendix

Appendix A
Decision and Opinion of the Court of Appeals

MT. HOOD STAGES, INC., dba Pacific
Trailways, Plaintiff-Appellee,
v.

The GREYHOUND CORPORATION and
Greyhound Lines, Inc.,
Defendants-Appellants.

No. 74-1282.
United States Court of Appeals,
Ninth Circuit.
June 9, 1977.
Appeal from the United States District Court for the District
of Oregon.

Before BROWNING and WRIGHT, Circuit Judges, and
LINDBERG,* District Judge.

BROWNING, Circuit Judge:

Greyhound Corporation and Greyhound Lines, Inc., appeal
from a judgment entered on a jury verdict awarding damages to
Mt. Hood Stages, Inc., for injuries resulting from violations of
sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2.1 We affirm.

I.
Immunity
Greyhound is the largest common carrier by bus of passengers
and package express in the United States, moving more than 80
percent of this traffic in the western states and operating over

*Honorable William J. Lindberg, Senior United States District Judge,
Western District of Washington, sitting by designation.

1. The judgment was for $13,146,090 (after trebling) and attorneys’
fees of $1,250,000, plus costs.

2 Appendix A—Court of Appeals’ Opinion

routes throughout the country. Mt. Hood is one of Greyhound’s
small competitors, operating over routes in Oregon, Idaho, and
Utah. The essence of Mt. Hood’s antitrust claim is that Grey-
hound acquired bus companies whose routes circled those of Mt.
Hood and thereafter deprived Mt. Hood of connecting or
“bridge” traffic with the purpose and effect of eliminating Mt.
Hood as a substantial competitor.

Greyhound does not deny the sufficiency of the evidence to
establish a violation of sections 1 and 2 of the Sherman Act,
assuming that statute applies. Its principal contention is that Mt.
Hood bases its claim upon acquisitions approved by the Interstate
Commerce Commission and implementation by Greyhound of con-
trol over the acquired companies, and that such activities are
immune from antitrust attack by virtue of section 5(11) of the
Interstate Commerce Act, 49 U.S.C. §5(11), applied in light
of the Supreme Court’s analysis in Hughes Tool Co. v. Trans
World Airlines, Inc., 409 U.S. 363, 93 S.Ct. 647, 34 L.Ed.2d 577
(1973).

Section 5(2) of the Interstate Commerce Act, 49 U.S.C. § 5(2),
provides that one carrier may acquire another with Commission
approval; the Commission is required to grant such approval, sub-
ject to any-terms and conditions it deems reasonable, if the acqui-
sition “will be consistent with the public interest,” id. Section
5(11) provides that carriers participating in transactions approved
by the Commission are “relieved from the operation of the anti-
trust laws . . . insofar as may be necessary to enable them to carry
into effect the transaction so approved or provided for in accord-
ance with the terms and conditions, if any, imposed by the Com-
mission, and to hold, maintain, and operate any properties and
exercise any control or franchises acquired through such trans-
action.”

From 1947 to 1956 Greyhound acquired eight bus companies
operating in the area relevant here. Each acquisition was approved

Appendix A—Court of Appeals’ Opinion 3
by the Commission pursuant to section 5(2). Mt. Hood opposed
four of the acquisitions. It argued that if the acquisitions were
approved, Mt. Hood would be encircled and Greyhound could
route traffic around it, depriving the public of the most convenient
service and Mt. Hood of revenues necessary to its survival. Mt.
Hood's argument to the Commission thus foreshadowed its present
antitrust claim.

Greyhound responded by representing to the Commission that
the acquisitions “would not adversely affect connecting carriers;
that arrangements with such carriers, including interchange of
traffic and open gateways, would be maintained; that it was not the
policy of Greyhound to route passengers over circuitous routes;
that its agents were instructed to quote the direct route as well as
the Greyhound route and give passengers their choice; and that
Greyhound had always carried [Mt. Hood's} schedules in its
folders and cooperated in every way to acquaint the public with
its service and thus promote additional traffic and business for
their lines.’”’* Greyhound also represented to the Commission that
Greyhound would continue a joint through-bus arrangement with
Mt. Hood.’ As the Commission later found, Greyhound intended
the Commission to rely upon these representations in determining
whether the proposed acquisitions were in the public interest, and
the Commission did in fact rely upon them in approving the
acquisitions.

2. The quotation is from the Commission’s opinion in the section
5(9) proceedings, described later. Mt. Hood Stages, Inc., 104 M.C.C.
449, 452 (1968).

3. This agreement, initiated in 1949, provided for a through-bus from
San Francisco, California, to Spokane, Washington, using Mt. Hood's
bridge route between Klamath Falls and Biggs, Oregon. Revenue and
expenses were shared according to the miles traveled over each company’s
route. The arrangement shortened the San Francisco-Spokane trip by 110
miles and several hours as compared with the all-Greyhound route via
Portland. It provided better service to travelers and was profitable for
both companies.

4 Appendix A—Court of Appeals’ Opinion

In 1964 Mt. Hood filed a petition with the Commission pur-
suant to section 5(9) of the Act, 49 U.S.C. § 5(9),* asking it to
reopen the acquisition proceedings and enter a supplemental order
requiring Greyhound to live up to its representations. The allega-
tions in Mt. Hood's petition to the Commission were essentially
the same as those Mt. Hood later made in this antitrust suit—
namely, that Greyhound had cancelled the through-bus connec-
tion, had scheduled connecting service so as to preclude reasonable
connections with Mt. Hood, had directed Greyhound’s agents and
independent joint ticket agents to send traffic by longer routes
around those of Mt. Hood, and had interfered in various ways
with the distribution of Mr. Hood’s schedules and the quotation
of Mt. Hood's rates and services, all with the intent of injuring
Mt. Hood. The United States intervened in support of Mt. Hood.

After an extensive evidentiary hearing, a hearing examiner re-
solved all issues against Greyhound and recommended entry of the
order sought by Mt. Hood. In April, 1968, the Commission issued
an opinion sustaining the examiner’s findings that Greyhound had
made the representations alleged, that Greyhound had intended
the Commission to rely on them, that the Commission had relied
on them in approving the acquisitions, that Greyhound had not
fulfilled the representations, and that Greyhound’s actions “were
inspired by a desire to stifle competition” and “injure or destroy”
Mt. Hood. Mt. Hood Stages, Inc., 104 M.C.C. 449, 459-63 (1968).
The Commission concluded that Greyhound’s failure to abide by
its commitment “constitutes destructive competition in contraven-
tion of the national transportation policy, is not consistent with
the public interest, and provides good cause” for a supplemental
order under section 5(9) of the Act. The Commission deferred

4. Section 5(9) reads:

Supplemental orders by Commission.—The Commission may from
time to time, for i cause shown, make such orders, supplemental
to any order made under paragraph (1), (2), or (7) of this sec-
tion, as it may deem necessary or appropriate.

Appendix A—Court of Appeals’ Opinion 5
entry of a supplemental order to allow voluntary negotiations
between the parties. Id. at 462-63.

Two months later, in July, 1968, Mt. Hood filed this suit alleg-
ing violations of the antitrust laws and common law and statutory
unfair competition. With respect to the antitrust violations the
complaint alleged that, beginning in 1947 and continuing to the
date of the complaint, Greyhound had restrained and monopolized
commerce in the carriage of passengers and their luggage between
points in Oregon, Idaho, and Utah by means essentially the same
as those that were the subject of the Commission's proceeding;
that is, the acquisition of independent bus lines with Commission
consent obtained by the misrepresentations outlined by the Com-
mission and thereafter engaging in the destructive competitive
tactics found by the Commission. Greyhound sought, unsuccess-
fully, to eliminate these issues from the litigation on the ground
that they fell within the exclusive jurisdiction of the Commission.

In the Commission proceedings, meanwhile, the efforts of the
parties to agree upon an order failed. The Commission entered
its own order requiring Greyhound to restore the practices and
traffic patterns existing when the acquisitions at issue were author-
ized, and, specifically, to restore the joint through-bus service, to
revise Greyhound’s schedules to permit reasonable connections
with Mt. Hood, to see that through routes and fares were quoted
and quoted accurately, and to eliminate other destructive prac-
tices. Greyhound Lines, Inc. v. United States, 308 F.Supp. 1033,
1037 (N.D. Ill. 1970). A three-judge district court affirmed the
Commission and issued its own order in similar terms. Jd. at 1040-
41. Following entry of the district court order enforcing the Com-
mission decision, Mt. Hood amended the complaint in this anti-
trust proceeding to eliminate the prayer for injunctive relief.

In June, 1971, the United States and the Commission filed peti-
tions with the district court in the enforcement proceeding, asking
that Greyhound be held in contempt for failing to comply with

6 Appendix A—Court of Appeals’ Opinion

the court’s order enforcing the Commission's decision. The court
found Greyhound had willfully failed to comply with portions of
the order and held Greyhound in criminal and civil contempt.
United States v. Greyhound Corp., 363 F.Supp. 525 (N.D.IIL.
1973). The court imposed fines totaling $600,000, United States
v. Greyhound Corp., 370 F.Supp. 881, 883-85 (N.D.III.1974),
ordered Greyhound to file semiannual reports of compliance ef-
forts for five years, and granted members of the Department of
Justice staff ‘“‘visitorial and document examination rights so that
they may further monitor Greyhound’s compliance efforts,” id. at
886. Because Greyhound appeared to be attempting to comply
fully, no further injunctive relief was ordered. :

While the proceeding to enforce the Commission's order was
in progress, this antitrust case had come to trial and concluded
with the verdict in Mt. Hood’s favor. The opinion of the court in
the enforcement proceeding noted that ‘many of Greyhound’s
actions that were found to be in violation of the order, were also
found to be in violation of the antitrust laws” in this private suit.
Id. at 884 n. 2. The enforcement court denied Mt. Hood's prayer
for damages for expenses related to the contempt action and for
injury to its business as a result of the contempt, on the ground
that the damages awarded in this antitrust proceeding “will ade-
quately compensate [ Mt. Hood] for any damages it may have also
suffered as a result of Greyhound’s contempt. This is particularly
true since many of the same acts of Greyhound that were found
to be contemptuous were also involved in the private antitrust
case.” Id, at 888. The court of appeals affirmed the criminal con-
tempt convictions, stating, “the record of this case shows a flagrant
disregard of a court order” that was intended “to insure that
Greyhound would comply with representations it made at the
acquisition hearings and cease its predatory practices toward Mt.
Hood.” United States v. Greyhound Corp., 508 F.2d 529, 540-41
(7th Cir. 1974).

Appendix A—Court of Appeals Opinion 7

From. this cecital it is evident that the conduct uaderlying the
regulatory proceedings and that underlying the antitrust suit are
essentially the same. The Commission's authority to regulate this
conduct is not challenged.

Whether conduct Congress has made subject to administra-
tive regulation is exempt from the antitrust laws depends upon
Congress’ intent. No direct evidence of a congressional intent rele-
vant here has been cited.* The only applicable statutory language
dealing with the question of antitrust immunity is that found in
section 5(11), quoted above. The conduct charged in this action
is not within the express exemption afforded by sections 5(11),
particularly because provisions of this kind are strictly construed.*
Since the Commission approved the acquisition in reliance upon
Greyhound’s commitment that the conduct underlying the anti-
trust complaint would not occur if the acquisitions were approved,
it can hardly be argued that antitrust immunity for such conduct
is “necessary” to enable Greyhound “‘to carry into effect the trans-

action so approved . . . and to hold, maintain, and operate any
properties and exercise any control . . . acquired through such
transaction.”

The inclusion of this express exemption in the statute implies a
congressional intention that conduct not within the exemption re-
mains subject to the antitrust laws.’ But this conclusion does not
always follow; despite a grant of express immunity that does not

5. The subject of antitrust immunity was touched upon briefly during
the House debates. 58 Cong.Rec. 8593-94 (1919). The scope of the
immunity was not discussed. Representative Sanders assured other House
members that the antitrust laws were not being “wiped out’’—that a
merger will only be allowed if it would benefit the public. Id.

6. Federal Maritime Comm'n v. Seatrain Lines, Inc., 411 U.S. 726,
733, 93 S.Ct. 1773, 36 L.Ed.2d 620 (1973); United States v. McKesson
& Robbins, Inc., 351 US. 305, 316, 76 S.Ct. 937, 100 L.Ed, 1209
(1956).

7. Carnation Co. v. Pacific Westbound Conference, 383 U.S. 213,
216-17, 86 S.Ct. 781, 15 L.Ed.2d 709 (1966); United States v. Borden
Co., 308 U.S. 188, 201, 60 S.Ct. 182, 84 L.Ed. 181 (1939).

8 Appendix A—Court of Appeals Opinion
cover the conduct charged, antitrust immunity may still be im-
plied.*

Because of the “fundamental national policies embodied in
the antitrust laws,” Oster Tail Power Co. v. United States, 410
US. 366, 374, 93 S.Ct. 1022, 1028, 35 L.Ed.2d 359 (1973), how-
ever, repeal of those laws is not lightly implied from congres-
sional adoption of a regulatory scheme.* Conduct is not immunized
merely because it falls within the jurisdiction of the regulatory
agency,”® as it did in this case. Immunity is not implied merely
because the applicable regulatory standard requires the agency to
give weight to antitrust policy,”’ as it did in this instance.”

8. See International Tel. & Tel. Corp. v. General Tel. & Elec. Corp.,
518 F.2d 913, 918-19 & n. 24 (9th Cir. 1975). Hughes Tool Co. v.
Trans World Airlines, Inc., 409 U.S. 363, 93 S.Ct. 647, 34 L.Ed.2d
577 (1973), the decision relied upon most heavily by Greyhound, in-
volved an express exclusion, and it is not entirely clear that the conduct
that case held to be immunized from the antitrust laws was within the
express exclusion, narrowly construed. The Court suggested as much
when it noted, “a statutory scheme that does not create a total exception
from antitrust laws may, nonetheless, in particular and discrete instances
by implication grant immunity from an antitrust claim.” Id. at 385 n. 14,
93 S.Ct. at 660 (emphasis added). The Supreme Court has twice cited
Hughes Tool as a case in which immunity was implied. See Gordon v.
New York Stock Exch., Inc., 422 U.S. 659, 682, 95 S.Ct. 2598, 45 L.Ed.
2d 463 (1975); United States v. National Ass'n of Sec. Dealers, Inc.,
422 U.S. 694, 734-35, 95 S.Ct. 2427, 45 L.Ed.2d 486 (1975).

9. United States v. National Ass'n of Sec. Dealers, Inc., 422 U.S. 694,
719-20, 95 S.Ct. 2427, 45 L.Ed.2d 486 (1975); United States v. Philadel-
phia Nat'l Bank, 374 US. 321, 350-51, 83 S.Ct. 1715, 10 L.Ed.2d 915
(1963).

10. Cantor v. Detroit Edison Co., 428 U.S. 579, 596-97 n. 36, 96
S.Ct. 3110, 49 L.Ed.2d 1141 (1976); Gordon v. New York Stock Exch.,
Inc., 422 U.S. 659, 692, 95 S.Ct. 2598, 45 L.Ed.2d 463 (1975) (Stewart,
J., concurring); Otter Tail Power Co. v. United States, 410 U.S. 366,
372, 93 S.Ct. 1022, 35 L.Ed.2d 359 (1973).

11. Gulf States Util. Co. v. Federal Power Comm'n, 411 U.S. 747,
758-60, 93 S.Ct. 1870, 36 L.Ed.2d 635 (1973); Otter Tail Power Co.
v. United States, 410 US. 366, 373, 93 S.Ct. 1022, 35 L.Ed.2d 359
(1973).

12. Port of Portland v. United States, 408 U.S. 811, 841, 92 S.Ct.
2513, 33 L.Ed.2d 723 (1972); Northern Lines Merger Cases, 396 US.

Appendix A—Court of Appeals’ Opinion 9
The applicable interpretative standard was restated by the Su-
preme Court in Cantor v. Deiroit Edison Co., 428 U.S. 579, 597,
96 S.Ct. 3110, 3120, 49 L.Ed.2d 1141 (1976): “The Court has
consistently refused to find that regulation gave rise to an implied
exemption without first determining that exemption was necessary
in order to make the regulatory act work, ‘and even then only to
the minimum extent necessary.’ "’** As the Court had written in
the preceding term, “Certain axioms of construction are now
clearly established. Repeal of the antitrust laws by implication is
not favored and not casually to be allowed. Only where there is
a ‘plain repugnancy between the anfitrust and regulatory provi-
sions’ will repeal be implied.” Gordon v. New York Stock Ex-
change, Inc., 422 U.S. 659, 682, 95 S.Ct. 2598, 2611, 45 L.Ed.2d
463 (1975) .™4
Applying these standards, we find no reason to imply immunity
here. No “plain repugnancy” exists between the Interstate Com-
merce Act and the Sherman Act as applied to Greyhound’s con-
duct, and it is not necessary to exempt Greyhound’s conduct from
antitrust restraints “to make the [Interstate Commerce Act]
work.” This is evident from the course taken in the administrative
and judicial proceedings under both statutes. Clearly there has
been no conflict between the regulatory and antitrust regimes. On
the contrary, they have accommodated and supplemented each
other. The policies of both have been advanced. There has been
initial resort to the Commission for an application of its expertise
to the factual issues relevant to whether application of the anti-

491, 511-16, 90 S.Ct. 708, 24 L.Ed.2d 700 (1970); McLean Trucking
Co. v. United States, 321 U.S. 67, 83-87, 64 S.Ct. 370, 88 L.Ed. 544
(1944).

13. Quoting Silver v. New York Stock Exch., 373 U.S. 341, 357,
83 S.Ct. 1246, 10 L.Ed.2d 389 (1963).

14. Quoting United States v. Philadelphia Nat'l Bank, 374 U.S. 321,
350-51, 83 S.Ct. 1715, 10 L.Ed.2d 915 (1963). See International Tel. &
Tel. Corp. v. General Tel. & Elec. Corp., 518 F.2d 913, 918-19 (9th
Cir. 1975).

10 Appendix A—Court of Appeals’ Opinion

trust laws would be incompatible with regulatory objectives, see
Ricci v. Chicago Mercantile Exchange, 409 U.S. 289, 93 S.Ct. 573,
34 L.Ed.2d 525 (1973), and the Commission has unqualifiedly
indicated that it has not approved and continues to disapprove
Greyhound’s conduct under regulatory standards applied in the
light of antitrust principles. See Mt. Hood Stages, Inc., 104
M.C.C. 449, 458, 460-63 (1968) (citing Marnell v. United Parcel
Service of America, Inc., 260 F.Supp. 391 (N.D.Cal.1966) ).

The remedies afforded under the two statutes have also meshed.
The injunction issued in enforcement of the regulatory determina-
tion was not duplicated in the antitrust proceeding. In assessing
the penalty for contempt for violation of that injunction, the court
was careful to avoid the possibility of double damages. See United
States v. Greyhound Corp., supra, 370 F.Supp. at 888. The losses
sustained by Mt. Hood during the contempt period (approximately
February 5, 1970, to March 15, 1973, see id. at 884 n.2) were only
a small part of the total damages Mt. Hood sustained from the
inception of Greyhound’s wrongful conduct in 1947. The remain-
ing damages could be and were recovered only in the antitrust
action. Trebling the damages—an effective support for the com-
petitive policy reflected in both statutes—could be and was accom-
plished only in the antitrust proceeding. Since the transactions
involved offended the policies of both statutes and those policies
were advanced and not impaired by the application of both
statutes, it is reasonable to assume Congress would have intended
both to apply.

Greyhound leans heavily upon Hughes Tool Co. v. Trans
W orld Airlines, Inc., 409 U.S. 363, 93 S.Ct. 647, 34 L.Ed.2d 577
(1973). From this decision Greyhound draws the general prin-
ciple that when antitrust immunity is conferred by a statute upon
participants in an acquisition approved by a regulatory agency,
the immunity extends to conduct made possible by the acquisition
whether or not the conduct itself was approved, at least where the
agency considered the possibility such conduct might occur and
retained continuing jurisdiction to regulate it in the public interest.

Appendix A—Court of Appeals’ Opinion 11

But antitrust exemption is: implied “on/y to the minimum
extent necessary” to make the regulatory scheme work (emphasis
added). Quoting this principle, and citing Hughes Too/ and Pan
American World Airways, Inc. v. United States, 371 US. 296,
83 S.Ct. 476, 9 L.Ed.2d 325 (1963), the Supreme Court recently
wrote, “[W]e have implied immunity in particular and discrete
instances to assure that the tederal agency entrusted with regula-
tion in the public interest could carry out that responsibility free
from the disruption of conflicting judgments that might be voiced
by courts exercising jurisdiction under the antitrust laws.” United
States v. National Association of Securities Dealers, Inc., 422 US.
694, 734-35, 95 S.Ct. 2427, 2450, 45 L.Ed.2d 486 (1975) (em-
phasis added).

Greyhound’s generalization may accommodate the facts of both
Hughes Tool and the present case, but it omits the distinguishing
particulars that made antitrust immunity appropriate in Hughes
Tool and would make it inappropriate here. The crux of the
distinction between the two cases is that, as the Supreme Court
viewed the record in Hughes Tool, the regulatory agency involved
had considered the type of conduct which underlay the antitrust
complaint and had approved it as in the public interest;* a suc-
cessful antitrust suit therefore necessarily would have been repug-
nant to operation of the regulatory scheme. The opposite is true
in this case; the Interstate Commerce Commission did not con-
template Greyhound’s challenged conduct as likely to occur and
thus did not approve such conduct when it approved the acquisi-
tions.’* The Commission also subsequently disapproved that con-
duct.

15. See In re REA Express. Inc., 412 F.Supp. 1239, 1261 (E.D.Pa.
1976); Air Freight Haulage Co. v. Ryd-Air, Inc., 408 F.Supp. 446
(S.D.N.Y. 1976).

16. See Scroggins v. Aw Cargo, Inc., 534 F.2d 1124, 1131 (Sth
Cir. 1976).

12 Appendix A——Court of Appeals’ Opinion

In Hughes Tool the Civil Aeronautics Board issued orders
approving acquisition of control of TWA by Hughes Tool Co.
The applicable statute relieved persons affected by such an order
from operation of the antitrust laws so far as necessary “to do
anything authorized, approved or required by such order.” Section
414, Federal Aviation Act, 49 U.S.C. § 1384. The agency-author-
ized control later ended, and an antitrust suit was brought by
TWA against Hughes Tool Co. based upon transactions between
the two during the period of Hughes Tool Co.'s control. The anti-
trust complaint alleged, in effect, that the controlling company had
exercised its control to dictate the completion of the transactions
in a way that injured the controlled company.

Hughes Tool Co.'s control of TWA was acquired in two steps
—an initial acquisition of 45.6 percent of TWA's stock, and a
later acquisition increasing Hughes Tool Co.'s holdings to 80
percent. Both acquisitions were approved by the Board. In hear-
ings relating to the second acquisition the Board examined the
manner in which Hughes Tool Co. had exercised its de facto
control over TWA in the earlier period, particularly with respect
to the acquisition of new flight equipment, which was the subject
matter of the transactions on which the antitrust suit was based.
The Board conceded allegations of abuse of the kind alleged in
the antitrust complaint. Nonetheless, the Board concluded that
continuation and enhancement of Hughes Tool Co.'s control was
in the public interest. Moreover, the Board's order required that
all substantial sales transactions between the two companies be
submitted to the Board for approval, and, pursuant to this require-
ment, the transactions upon which the antitrust complaint rested
were submitted to the Board and approved as in the public interest.

The Supreme Court noted that the subject matter of the Board's
approval had been the acquisition and exercise by Hughes Tool
Co. of control over the same kind of transactions as those at issue.
Hughes Tool, supra, 409 U.S. at 386, 93 S.Ct. 647. By its approval

ke NE Se 8 ae OU OR te

Appendix A—Court of Appeals’ Opinion 13
the Board had determined that such control was in the public
interest and consistent with the regulatory statute’s prohibitions
against monopoly and restraining competition. Sections 102(c)
and 408(b), Federal Aviation Act, 49 U.S.C. §§ 1302(c) and
1378(b).’* The Court further noted that the Board had also
approved the very transactions underlying the antitrust suit as
meeting the same standard. 409 U.S. at 379, 387, 93 S.Ct. 647.

An antitrust suit challenging these transactions, the Court said,
would seek “to negate what the Board, after full investigation,
had found consistent with § 408’s anti-monopoly provision, con-
sistent with § 102’s competition standard, and consistent with the
public interest.” Jd. at 388, 93 S.Ct. at 661. TWA’s antitrust suit
sought ‘‘to terminate a relationship the continuation of which the
Board had found essentia! to both TWA and the public interest
and to penalize the type of conduct which the Board expressly
contemplated and preferred would continue unless and until a
different order from the Board was forthcoming.” IJd.* The Court
concluded that the transactions were exempt from suit under the
Sherman Act.*

17. Acquisition of control of one company by another necessarily
contemplates exercise by the parent of control over the internal business
operations of the subsidiary, When the agency has approved acquisition
of control, exclusive agency jurisdiction over its exercise is more readily
implied. See Hughes Tool Co. v. Trans World Airlines, Inc., 409 US.
363, 385-86, 93 S.Ct. 647, 34 L.Ed.2d 577 (1973), citing Pan American
World Airways, Inc. v. United States, 371 U.S. 296, 83 S.Ct. 476, 9
L.Ed.2d 325 (1963), as such a case.

18. See also Pan American World Airways, Inc. v. United States, 371
US. 296, 309, 83 S.Ct. 476, 9 L.Ed.2d 325 (1963).

19. The Court summarized its holding in almost identical language
at two points in the opinion:
At pages 387-88, 93 S.Ct. at page 661, the Court said:

We repeat, however, what we said in the Pav American case
that the Federal Aviation Act does not letely displace the
antitrust laws. . . . But where, as here, the CAB authorizes control
of an air carrier to be acquired by another person or corporation,
and where it specifically authorizes as in the public interest specific
transactions between the parent and the subsidiary, the way in

14 Appendix A—Court of Appeals’ Opinion

In sum, in Hughes Tool, the propriety under the regulatory
statute of the activity challenged in the antitrust suit (control by
Hughes Tool Co. of the manner in which its TWA subsidiary
acquired new aircraft) was the central issue presented to the
agency for consideration in the exercise of its regulatory authority,
and the agency had resolved the issue by approving such control
as in the public interest. Exemption from the antitrust laws was
implied because a successful application of the antitrust laws to
the conduct would have negated the regulatory agency's determi-
nation and faced the regulated carrier with inconsistent govern-
mental commands. In the present case, as has been seen, the
premise of inconsistent regulatory and antitrust demands is absent.
Also unlike Hughes Tool, the instant suit is not brought by a sub-
sidiary against its parent and does not challenge the effect on the

which that control is exercised in those precise situations is under
the surveillance of the CAB, not in the hands of those who can
invoke the sanctions of the antitrust laws. As noted, the parent com-
pany which controls an air carrier is subject to pervasive control by
the CAB. The control which the CAB is authorized to grant or to
deny under § 408 involves an appraisal of the impact of that con-
trol in terms of monopoly and competition; and the on super-
vision entrusted to the CAB by § 415 is broad enough to put all
transactions between parent and subsidiary—as ori conceived
or subsequently exercised—under CAB supervision.

And again at page 389, 93 S.Ct. at page 661-662:
We by no means hold that the Federal Aviation Act

displaces the antitrust laws. Pan American, 371 US., at 305, [83
S.Ct. at 482}. But pre A So the CAB authorizes control of
an air carrier to be another person or and
where the CAB pouty authorizes as in the pablic in interest
specific transactions between the parent and the subsidiary, the way
in which that control is exercised in those precise situations is under
the surveillance of the CAB, not in the hands of those who can
invoke the sanctions of the antitrust laws. The control which the
CAB is authorized to grant or to deny under § 408 involves an
appraisal of the impact of that control in terms of monopoly and

competition; and the ongoing entrusted to the CAB by
§ 415 is broad enough to put all transactions between parent and
subsidiary —as originally mabe or subsequently exercised—under

CAB supervision.

Appendix A—Court of Appeals’ Opinion 15
acquired company of the daily intercompany control that was
integral to the acquisition. See a/so Pan American World Airways
v. United States, 371 US. 296, 83 S.Ct. 476, 9 L.Ed.2d 325
(1963). Rather, the instant suit is brought by a third party to the
approved acquisitions, challenging conduct with regard to the
third party that not only was not integral to the Commission's
acquisition approvals but was violative of specific representations
made by Greyhound at the acquisition hearings. In these circum-
stances, Greyhound’s conduct is not immune from antitrust
strictures.

II.

Jury Instructions and Admission of Evidence

Many of Greyhound’s assertions of error in evidentiary rulings
and instructions rest upon Greyhound’s theory of antitrust im-
munity and fall with it.

Greyhound complains of the district court's “failure to instruct
on Section 5(11).”” It is not clear precisely what Greyhound has
in mind. The extent to which Greyhound’s conduct was exempt
from the antitrust laws by the Interstate Commerce Act was a
legal question, not an issue of fact for the jury.” The instructions
proposed by Greyhound were properly rejected for this reason and
because they reflected Greyhound’s uncompromising position that
the acquisitions approved by the Commission and all conduct
involving exercise of control over the acquired carriers were
exempt from the antitrust laws and were not to be considered by
the jury for any purpose whatever.”"

20. See Gordon v. New York Stock Exch., Inc., 422 U.S. 659, 688,
95 S.Ct. 2598, 45 L.Ed.2d 463 (1975).

21. For example, Greyhound requested an instruction that since the
Commission had approved the acquisitions, ‘the manner in which defend-
ants have used or exercised the control of these carriers” was within the
exclusive jurisdiction of the Commission, and therefore the jury “must
exclude from [its} consideration all conduct by defendants involving
exercise of control over the acquired bus companies.” Greyhound also
requested instructions referring to the specific conduct the Commission

16 Appendix A—Court of Appeals’ Opinion

The court was required to provide the jury with standards
to apply in determining whether Greyhound was liable under the
antitrust laws, and it did so. The court defined the elements of
monopolization, attempt to monopolize and unreasonable restraint
of trade in the usual way, and Greyhound does not object to these
instructions in themselves. The court also told the jury that the
fact that Greyhound was regulated affected what activities of
Greyhound were subject to the antitrust laws; that in a regulated
industry the existence of monopoly power was not evidence of
monopolization, but “use of monopoly power even if lawfully
acquired, to foreclose or restrain competition, to gain a competi-
tive advantage or to eliminate a competitor’ was such evidence.”
Under these instructions the jury could not base a finding of
monopolization on the approved acquisitions themselves; improper
use of the acquired power was required. This was at least as favor-
able to Greyhound as the law warranted.

had condemned, and telling the jury that regulation of such conduct was
within the exclusive jurisdiction of the Commission and could not be the
basis of any findings by the jury.

In addition, Greyhound requested an instruction essentially in the
words of the statute, telling the jury that the antitrust laws did not apply
to the approved acquisitions “or to anything done by defendants which
was necessary to hold, maintain or operate the properties or operating
rights obtained in these approved transactions.” Since the scope of the
immunity conferred by the statute was a legal question for the court to
decide, this instruction was properly refused. See note 20, supra, and re-
lated text. The court’s decision as to the scope of the statutory immunity
shaped and conditioned the court’s instructions spelling out what facts
the jury must find before Greyhound could be held liable.

22. The quoted portion of the instruction is settled law. See Otter
Tail Power Co. v. United States, 410 U.S. 366, 377, 93 S.Ct. 1022, 35
L.Ed.2d 359 (1973); United States v. Griffith, 334 US. 100, 107, 68
S.Ct. 941, 92 L.Ed. 1236 (1948). Indeed, section 2 is violated if exclu-
sionary tactics are used to maintain a lawfully acquired monopoly. Indus-
trial Building Materials, Inc. v. Interchemical Corp., 437 F.2d 1336,
1344-45 (9th Cir. 1970), interpreting United States v. United Shoe
Machinery Corp., 110 F.Supp. 295, 343 (D.Mass. 1953), aff'd per curiam,
347 U.S. 521, 74 S.Ct. 699, 98 L.Ed. 910 (1954). See also TV Signal
Co. v. American Tel. & Tel. Co., 462 F.2d 1256, 1261 (8th Cir. 1972).

Appendix A—Court of Appeals’ Opinion 17

Greyhound objects to the admission of evidence regarding the
administrative and related court proceedings, and to jury instruc-
tions that this evidence could be considered “in determining the
issue of Greyhound’s motive, intent and purpose and reasonable-
ness of its behavior.” Greyhound objects on several grounds, but
primarily on the basis of Greyhound’s immunity argument, which
we have rejected. Greyhound’s other objections are also without
merit.** The evidence was properly used for the purpose stated
by the court.

The lengthy instructions contained two brief passages appar-
ently inspired by Walker Process Equipment, Inc. v. Food
Machinery & Chemical Corp., 382 U.S. 172, 177, 86 S.Ct. 347,
15 L.Ed.2d 247 (1965), and California Motor Transport Co. v.
Trucking Unlimited, 404 U.S. 508, 92 S.Ct. 609, 30 L.Ed.2d 642
(1972). Greyhound argues that these passages permitted imposi-
tion of liability if the jury found no more than that Greyhound
had perpetrated a fraud on the Conumission or had acted in bad
faith in the administrative and related judicial processes, rendering
those processes ineffective. Even considered alone, however, both
passages also required the jury to find, as a condition of liability,
that the fraud or abuse of process resulted in an administrative
order that conferred a monopoly or an unreasonable competitive

23. One of these additional grounds of objection warrants brief
comment. Greyhound argues that the instructions permitting use of evi-
dence of the administrative proceedings in determining Greyhound’s
intent and the reasonableness of its conduct “infringe” Greyhound’s
constitutional privilege to seek relief before administrative agencies, citing
Eastern R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365
U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961). But “{i}t is well settled
that First Amendment rights are not immunized from regulation when
they are used as an integral part of conduct which violates a valid statute.”
California Motor Transport Co. v. Trucking Unlimited, 404 U.S. 508,
514, 92 S.Ct. 609, 613, 30 L.Ed.2d 642 (1972). The antitrust laws havc
been applied in many factual contexts that included utilization of adm‘nis-
trative processes by the antitrust violator. See, e.g., Otter Tail Power
Co. v. United States, 410 U.S. 366, 93 S.Ct. 1022, 35 L.Ed.2d 4359
(1973); Aloba Airlines, Inc. v. Hawaiian Airlines, Inc., 489 F.2d 202
(9th Cir. 1973).

18 Appendix A—Court of Appeals’ Opinion

advantage upon Greyhound. At most, therefore, the only question
raised by these passages is whether the doctrine of Walker Process
applies outside the patent field.

When the passages are read in light of the parties’ contentions,
the evidence in the case, and the instructions as a whole, however,
we do not believe they present even this issue. Mt. Hood did not
contend that the acquisitions themselves or the power Greyhound
gained through them, standing alone, constituted a violation of
the antitrust laws. Mt. Hood relied instead upon Greyhound’s
exclusionary practices made possible by the acquisitions. The
instructions were generally to the same effect. The jury was not
instructed on any theory that Greyhound’s purchase of other
carriers might constitute the unlawful acquisition of monopoly
power. On the contrary, as we have seen, the jury was told that in
such a regulated industry the mere possesion of monopoly power
did not violate the Sherman Act, and that abuse of monopoly
power to eliminate competition was required. The only fraud or
abuse of process presented by the evidence was that Greyhound
represented to the Commission that it was not using and would
not use any of the acquired routes to engage in the predatory
practices we have outlined earlier, and that Greyhound nonethe-
less did so. Since these same predatory practices underlay Mt.
Hood's antitrust claim, since the instructions also conditioned
liability upon a finding of monopolization or unreasonable re-
straint of competition defined in the usual way, and since the judge
properly ruled without submitting the issue to the jury that Grey-
hound’s challenged conduct was not immunized from antitrust
attack, the passages amounted to no more than a reiteration in
another form of the general instruction that unreasonable restraint
of competition or use by Greyhound of monopoly power to fore-
close or restrain competition would violate the antitrust laws.**

24. Thus even if appellant was entitled to an instruction that “fraud”
must be proven by “clear and convincing” evidence, as Greyhound urges,
failure to give it was harmless under Fed.R.Civ.P. 61.

Appendix A—Court of Appeals’ Opinion 19

Greyhound attacks the use made at trial of two antitrust consent
decrees entered into by Greyhound and the United States. The
decrees, which were admitted in evidence, prohibited Greyhound
from refusing to establish through-routes with competitors and
from continuing other practices the same as or similar to those
charged in this suit. The jury was told it could consider the decrees
and Greyhound’s conduct with respect to obeying or disobeying
them in determining the issues of Greyhound’s intent and purpose
and the reasonableness of Greyhound’s behavior.

A trial judge must be accorded “wide latitude” in determining
the relevance of evidence in antitrust cases. Gray v. Shell Oil
Co., 469 F.2d 742, 751 (9th Cir. 1972). The admissibility of
a consent decree is a matter committed to the court’s discretion.
See Control Data Corp. v. IBM Corp., 421 F.2d 323, 326 (8th
Cir. 1970). See also Vitagraph, Inc. v. Perelman, 95 F.2d 142, 146
(3d Cir. 1938). There was no abuse of discretion here. The court
warned the jury of the limitations implicit in decrees entered into
by consent, and confined their use to a proper purpose.

Greyhound’s claim that the jury should not have been asked to
determine whether Greyhound had a dominant share of the
market because Greyhound’s market share resulted from ICC-
approved transactions is but ‘another reflection of Greyhound’s
rejected theory of immunity.

Other objections to the instructions regarding the relevant
market are without merit. While it is true that the court did not
refer to the “interchangeability of services” in those terms, the
court accomplished the same purpose by use of illustrations and
by instructing the jury that a “relevant” market must be one for
a “distinct service” with ‘peculiar characteristics,” serving “‘dis-
tinctive purposes.” with “dissimilar” price characteristics, and
relatively “insensitive to price variations,” so that an increase in
bus fares would not result in large numbers of customers switching
to other forms of intercity transportation. If these indices of dis-
tinctness were not found, the jury was told, intercity bus trans-

20 Appendix A—Court of Appeals’ Opinion
portation would not constitute a relevant market for antitrust

purposes.”
Il.

Statute of Limitations

The jury awarded Mt. Hood damages for injuries sustained
from 1953 to 1973. The applicable statute of limitations, 15 U.S.C.
§ 15b, bars all claims on which suit is not commenced within four
years after they accrue—in this case, all claims that accrued before
July 5, 1964, since Mt. Hood’s suit was filed on July 5, 1968.
However, Mt. Hood asserts that the running of the limitations
period was suspended from 1953 to 1960 by Greyhound’s fraudu-
lent concealment of its wrongdoing, and from 1964 to the date of
suit by the intervention and participation of the United States in
the section 5(9) proceedings brought by Mt. Hood before the
Commission.”*

In accordance with the universal rule, our circuit holds that
fraudulent concealment of the existence of an antitrust cause
of action tolls the four-year statute of limitations provided by
section 15b.7” The jury found Greyhound had fraudulently con-

25. Greyhound contends the jury was instructed as to several con-
tentions for which there was no evidentiary support. We have examined
the record with respect to each of these issues and conclude that either
there was sufficient evidence to justify an instruction or the instruction
was harmless under Fed.R.Civ.P. 61.

26. See note 4, supra, and related text. The iod of fraudulent
concealment and the government intervention tolling period can be
“tacked” or “bridged” to suspend the statute for the entire period since
the time between the two did not exceed four years, albeit short by only
a day. See, e.g. City of Detroit v. Grinnell Corp., 495 F.2d 448, 460-61
(2d Cir. 1974); Union Carbide & Carbon Corp. v. Nisley, 300 F.2d 561,
567-72 (10th Cir. 1962); Maricopa County v. American Pipe & Constr.
Co., 303 F.Supp. 77, 84-86 (D.Ariz.1969), aff'd, 431 F.2d 1145 (9th
Cir. 1970).

27. Westinghouse Elec. Corp. v. Pacific Gas & Elec. Co., 326 F.2d 575
(9th Cir. 1964); accord. Charlotte Telecasters, Inc. v. Jefferson-Pilot
Corp., 546 F.2d 570 (4th Cir. 1976); Dayco Corp. v. Goodyear Tire &
Rubber Co., 523 F.2d 389 (6th Cir. 1975); City of Detroit v. Grinnell
Corp., 495 F.2d 448 (2d Cir. 1974); Crummer Co. v. Du Pont, 255 F.2d
425 (Sth Cir. 1958).

Appendix A—Court of Appeals’ Opinion 21
cealed its antitrust violations from 1953 to December 14, 1960,
and that Mt. Hood neither knew nor should have known of these
violations prior to December 14, 1960.

Greyhound does not deny the sufficiency of the evidence to show
it attempted to conceal its conduct. It argues, however, that Mt.
Hood had notice of Greyhound’s activities long before December
14, 1960.

The record shows that Mt. Hood complained about quoting and
routing practices of Greyhound agents on various occasions during
the 1953-1960 period. The record also shows, however, that Grey-
hound continuously represented to Mt. Hood and to the Commis-
sion that these were isolated incidents not countenanced by Grey-
hound’s management.”

The record shows that Mt. Hood suspected Greyhound of un-
lawful conduct prior to December 14, 1960, but “{s}uspicion will
not substitute for knowledge of facts from which fraud could
reasonably be inferred.” Friedman v. Meyers, 482 F.2d 435, 439
(2d Cir. 1973).

There was evidence that Mt. Hood's president expressed con-
cern over Greyhound’s expansion by acquiring other carriers, and
that he also stated his belief that the consent decrees were being
violated. Awareness of Greyhound’s growing dominance of the
market was not equivalent to notice of monopolization, however,
for the acquisitions were approved by the Commission and pre-
sumably immunized from the antitrust laws. Nor was knowledge

28. Greyhound argues that such representations, denials, and other
attempts at concealment are immaterial citing such cases as Foster & Kleiser
Co. v. Special Site Sign Co., 85 F.2d 742, 752 (9th Cir. 1936); Feak v.
Marion Steam Shovel Co., 84 F.2d 670, 673 (9th Cir. 1936). But as these
cases demonstrate, attempts at concealment lose their relevance only when
they occur after plaintiff already knew or should have known of the unlaw-
ful conduct. In the “vain case the jury weighed the evidence and con-
cluded that, in part use of Greyhound’s attempts at concealment, Mt.
Hood neither knew or should have known of Greyhound’s antitrust
violation.

22 Appendix A—Court of Appeals’ Opinion

of violations of the consent decrees equivalent to such notice, for,
as Greyhound itself is careful to point out, violations of consent
decrees are not in themselves violations of the antitrust laws.

Greyhound asserts that Mt. Hood was charged with the duty
to investigate once it became aware of facts from which antitrust
violations should reasonably have been inferred.” But in the face
of Greyhound’s assurances and denials of responsibility, we can-
not say as a matter of law that Mt. Hood’s awareness of the
growth of Greyhound’s power through acquisitions and of the
commission of predatory acts by some of Greyhound’s agents
amounted to notice of potential antitrust claims against Grey-
hound.

We conclude, therefore, that the trial court properly refused to
set aside the jury’s determination that Greyhound fraudulently
concealed its antitrust violation, and that Mt. Hood had neither
actual nor constructive knowledge of the violation until December
14, 1960.

Four years later, on December 14, 1964, one day before
Mt. Hood's antitrust claim would have been barred, the United
States intervened in the section 5(9) proceedings Mt. Hood had
instituted before the Commission in October, 1964. The trial court
held that, under the provisions of 15 U.S.C. § 16(i), the interven-
tion and the subsequent participation by the United States in the
Commission proceedings tolled the running of the statute of limi-
tations until those proceedings terminated in 1974, well after the
filing of the present suit.

Section 16(i) provides that running of the limitations period on
a private cause of action is suspended during the pendency of “any
civil or criminal proceeding . . . instituted by the United States
to prevent, restrain, or punish violations of any of the antitrust

29. See note 28, supra, and cases cited therein.

Appendix A—Court of Appeals’ Opinion 23
laws."** Greyhound argues that section 16(i) is inapplicable be-
cause the administrative proceedings were not “instituted by the
United States’ and because they were not proceeding “‘to prevent,
restrain, or punish violations of any of the antitrust laws.”

The literal wording of section 16(i) is not controlling. Where
one possible interpretation of the language would effect the con-
gressional purpose and another defeat it, the former is to be
adopted. Minnesota Mining & Manufacturing Co. v. New Jersey
Wood Finishing Co., 381 U.S. 311, 321, 85 S.Ct. 1473, 14 L.Ed.2d
405 (1965). The clearly expressed purpose of section 16(i) is to
further effective enforcement of the antitrust laws by permitting
private litigants to have the benefits that may flow from govern-
mental antitrust enforcement efforts. Jd. at 320, 85 S.Ct. 1473. This
purpose would be served by interpreting section 16(i) to encom-
pass the government's intervention and participation in the section
5(9) proceedings before the Commission—a reading the language
readily permits.

The proceedings were of a kind likely to produce benefits to
Mt. Hood as a plaintiff in a subsequent antitrust suit.** The issues,

30. 15 U.S.C. § 16(i) reads in part:

Whenever any civil or criminal proceeding is instituted by the
United States to prevent, restrain, or punish violations of any of the
antitrust laws . . . the running of the statute of limitations in respect
of every private or State right of action arising under said laws and
based in whole or in part on any matter complained of in said pro-
ceeding shall be suspended during the pendency thereof and for
one year thereafter: Provided, however, That whenever the running
of the statute of limitations in respect of a cause of action arising
under section 15 or 15c of this title is suspended hereunder, any
action to enforce such cause of action shall be forever barred unless
commenced either within the period of suspension or within four
years after the cause of action accrued.

31. The question is not whether the government a actually
conferred benefits upon the private antitrust plaintiff, but whether the
character of the proceedings was such that they were likely to do so.
Thus in analyzing the issue the Supreme Court spoke of government
action which “may aid the private litigant.” Minnesota Mining & Manu-
facturing Co. v. New Jersey Wood Finishing Co., 381 U.S. 311, 319, 85
S.Ct. 1473, 14 L.Ed.2d 405 (1965). If actual benefit were the test, it

24 Appendix A—Court of Appeals’ Opinion

as we have seen, were largely the same. Governmental investi-
gative and legal resources were made available to fully develop the
facts and the law favorable to the common position of the govern-
ment and Mt. Hood on these issues. The successful resolution of
these issues was critical to the defeat of Greyhound’s claim of anti-
trust immunity.

It would make form controlling to hold section 16(i) inapplica-
ble merely because Mt. Hood rather than the United States insti-
tuted the proceedings. The United States intervened little more
than 60 days after the filing of Mt. Hood's petition and partici-
pated actively in all subsequent stages of proceedings that required
nearly a decade to complete. Nothing would be gained, and a good
deal of judicial and administrative time and efficiency would be
lost, if the United States were compelled to institute a separate
independent proceeding in district court under 15 U.S.C. § 26 to
assure private treble damage litigants the benefits Congress in-
tended they should have from the government's action. As the
trial court concluded, “the Congressional intent behind [16(i) }
is better served by treating intervention by Antitrust Division law-
yers as the functional equivalent of a direct action by them.”

In addition to relying on the language of the statute, Greyhound
argues that section 16(i) applies only when the United States ini-
tiates rather than intervenes in a proceeding because of the Su-
preme Court's statement in Minnesota Mining that the purpose of
section 16(i) is to permit private parties the benefit of “prior gov-
ernment actions.” 381 U.S. at 320, 85 S.Ct. 1473 (emphasis by
Greyhound). Obviously, the Court was referring only to actions
occurring before the antitrust suit was commenced. Greyhound’s
argument epitomizes the kind of “grudging interpretation” which
“would collide head-on with Congress’ basic policy objectives.” Id.

might be impossible to determine whether the government proceedings
would toll the running of limitations until those proceedings were finally
concluded. Private plaintiffs would be compelled to file their antitrust suits
although government proceedings involving the same subject matter were
still in progress.

Appendix A—Court of Appeals’ Opinion 25

When the substance of the government's intervention and par-
ticipation before the Commission is examined, it falls fairly within
the class of proceedings “to prevent, restrain, or punish violations
of any of the antitrust laws” to which section 16(i) applies. It is
not controlling that the government's action was taken in an ad-
ministrative rather than judicial setting, Minnesota Mining, supra,
381 US. at 320, 85 S.Ct. 1473, nor that the proceedings were not
brought under the antitrust laws, Luria Steel & Trading Corp. v.
Ogden Corp., 484 F.2d 1016, 1020-21 (3d Cir. 1973); Rader v.
Balfour, 440 F.2d 469, 473 (7th Cir. 1971). The government
action suspends the running of the limitation period under sec-
tion 16(i) if it “is directed at alleged conduct which appears to
involve an existing or incipient violation of the antitrust laws,”
Rader v. Balfour, supra, 440 F.2d at 473, for it is government
participation in such a proceeding that is likely to produce the
benefits that Congress intended plaintiffs in later private treble
damage actions to have.

The government's petition to intervene demonstrates that its
interest lay in the possibility of antitrust violations should Mt.
Hood's allegations prove correct. To explain its interest in the
proceedings and its desire to participate as a party, the government
stated:

The allegations of the petition of Mt. Hood Stages, Inc.
make a serious charge: that Greyhound has been permitted
through the series of acquisitions the Commission approved
in these proceedings to extend its system in all directions
around Mt. Hood; that Greyhound has now begun to route
around Mt. Hood over all Greyhound’s routes traffic which
it used to interchange with Mt. Hood or handle in through
buses over shorter and quicker routes and to engage in nu-
merous other acts and practices which as they are described
in Mt. Hood’s petition (pp. 8-9) have in the aggregate the
appearance of a studied effort to force Mt. Hood out of
business. . . .

26 Appendix A—Court of Appeals’ Opinion

The petition noted Mt. Hood’s increasing vulnerability to and

dependence on Greyhound. It referred to Greyhound’s “predatory

conduct” and to the possibility of Mt. Hood’s “extinction at the

hands of an infinitely more powerful rival.” The petition con-

cluded:
Behind the immediate issues before the Commission are
further issues of applicability of the antitrust laws. The
Commission’s approvals of the acquisitions relieved Grey-
hound and its officials from accountability under these laws
only to the extent necessary to put the acquisitions into effect.
While actions taken to give effect to the acquisitions are com-
pletely immune, exercise of economic power the acquisitions
conferred so as to isolate and destroy a competitor is not.

As Greyhound itself admitted before the district court in its
motion to dismiss the complaint, a purpose of the Justice Depart-
ment’s intervention was “to assure the adequate consideration of
antitrust issues.”

Antitrust issues were an appropriate part of the proceedings.
The Commission was required to consider the anticompetitive
effects of the section 5(2) transactions in framing, and modifying,
its order.** Early in the proceedings Greyhound was reminded
“that the antitrust laws and the national transportation policy. . .
offer certain broad guidelines to be kept in mind in determining
this proceeding.” M+. Hood Stages, Inc., supra, 104 M.CC. at
451. The Commission rested its decision upon the conclusion that
Greyhound’s conduct “constitutes destructive competition in con-
travention of the national transportation policy.” Id. at 463.** In
sustaining the Commission’s order the district court wrote:

32. Port of Portland v. United States, 408 U.S. 811, 841, 92 S.Ct. 2513,
33 L.Ed.2d 723 (1972); Northern Lines Merger Cases, 396 U.S. 491,
511-16, 90 S.Ct. 708, 24 L.Ed.2d 700 (1970); McLean Trucking Co. v.
United States, 321 U.S. 67, 83-87, 64 S.Ct. 370, 88 L.Ed. 544 (1944).

33. The Commission rejected Greyhound’s ar, t that Greyhound’s
practices were not in themselves unlawful on basis of the antitrust

rinciple that “actions which are not in themselves unlawful may be unlaw-
sh chan Gay ese pest of © stan t quanpelin or sutedn cauaueen”
Mt. Hood Stages, Inc., 104 M.C.C. 449, 458 (1968). The Commission
cited the Sherman Act case of Marnell v. United Parcel Service of Amer-
ica, Inc., 260 F.Supp. 391 (N.D.Cal.1966).

Appendix A—Court of Appeals’ Opinion 27
It is inconceivable to us that Congress intended that destruc-
tive practices made possible by acquisition approvals may not
be corrected by supplemental order under Section 5(9),
especially in light of the ICC’s duty to take the antitrust
policy of the United States into account in its decision
making.
Greyhound Lines, Inc. v. United States, supra, 308 F.Supp.
at 1038.

Because Congress’ purpose in enacting section 16(i) will be
served by this interpretation, and because the language of the
section does not bar it, we conclude that the government's inter-
vention in the section 5(9) proceedings on December 14, 1964,
tolled the running of the limitations period from that date.™
Accordingly, Mt. Hood's antitrust complaint was timely filed.

IV.
Damages and Attorneys’ Fees

Greyhound contends that Mt. Hood failed to offer adequate
proof either that Mt. Hood was injured by Greyhound’s
conduct or of the amount of the damage. With respect to the
fact of damage, Greyhound’s claim is frivolous. The jury may
infer the fact of damage if “plaintiff proves a loss, and a violation
by defendant of the antitrust laws of such a nature as to be likely
to cause that type of loss.” Continental Ore Co. v. Union Carbide
& Carbon Corp., 370 US. 690, 697, 82 S.Ct. 1404, 1409, 8 L-Ed.2d
777 (1962). Mt. Hood offered evidence that its bridge traffic
declined sharply during the relevant period.*®* Greyhound’s con-
duct found to violate the antitrust laws was directed at creating

34. We need not reach Mt. Hood’s contention that the statute was
tolled to December 14, 1960, by virtue of Mt. Hood’s commencement of
the section 5(9) proceedings.

35. Mt. Hood offered evidence, for example, that Mt. Hood’s bridge
traffic consisted of 25,258 passenger trips, or approximately 44 percent of
the total relevant bridge traffic, in 1963 and had fallen to 930 passenger
trips, or approximately three percent of the total, by 1969.

28 Appendix A—Court of Appeals’ Opinion

precisely this kind of loss.** There was no indication of an alterna-
tive source of loss sufficient to negate an inference that Grey-
hound’s violation was a material cause. Zenith Radio Corp. v.
Hazeltine Research, Inc., 395 US. 100, 114 n. 9, 89 S.Ct. 1562,
23 L.Ed2d 129 (1969).

Mt. Hood's proof of the amount of damage was less certain,
and necessarily so. What Mt. Hood's business volume and profits
would have been except for Greyhound’s antitrust violation is
inescapably uncertain. See Flintkote Co. v. Lysfjord, 246 F.2d
368, 391 (9th Cir. 1957). In such a case, the amount of damages
may be shown “as a matter of just and reasonable inference, al-
though the result be only approximate.” Story Parchment Co. v.
Paterson Parchment Paper Co., 282 U.S. 555, 563, 51 S.Ct. 248,
249, 75 L.Ed. 544 (1931).

The premise of Mt. Hood's calculation of lost profits was that
95 percent of bus passengers would have traveled Mt. Hood's
shorter bridge routes if they had had that choice. Greyhound
asserts that Mt. Hood’s premise “defies the record as well as com-
mon sense and is untenable,” and therefore the entire calculation
of damage fails. There was ample evidence from which the jury
could reasonably infer that the shortest bus route is generally
fastest, including studies comparing Greyhound’s and Mt. Hood's
schedules from 1950 to 1970 with regard to mileage and time.**

36. As described previously, Mt. Hood alleged and offered substantial
evidence to prove that Greyhound had cancelled the north-south through-
bus connection arrangement on which Mt. Hood depended for a sub-
stantial portion of its traffic, scheduled its services so as to preclude reason-
able connections with Mt. Hood, directed independent and joint ticket
agents to long-haul traffic around Mt. Hood, and interfered with distribu-
tion of Mt. Hood schedules.

37. These studies were part of a larger damage study commissioned by
Mt. Hood. The study was supplemented by the testimony of three expert
witnesses over a two-week period. The study was based on statistical
computations verified by Arthur D. Little & Co., an independent manage-
ment consulting firm. Mr. Jizmagian, Arthur D. Little & Co.'s representa-
tive who supervised the study, testified that maximum use was made of all

Appendix A—Court of Appeals’ Opinion 29
Mt. Hood also introduced evidence from which the jury could
reasonably infer that as a general rule 95 percent of bus pas-
sengers would take the fastest route when given a choice.* It is
of course true that the evidence did not demonstrate to a cer-
tainty that 95 percent of passengers would have traveled Mt.
Hood’s shorter routes absent the restraints imposed by Grey-
hound’s violation, but in the nature of the case proof to a
certainty is not possible and is not required.

Greyhound challenges virtually every other facet of Mt. Hood's
proof of damage. We have examined each of Greyhound’s objec-
tions in light of Mt. Hood's response and the evidence in the
record. No useful purpose would be served by a tedious recapitu-
lation of these materials. We are satisfied that the evidence offered
by Mt. Hood permitted the jury to make a reasonable and just
inference of the amount of Mt. Hood’s damage.*®

We also sustain the award of attorneys’ fees. Greyhound
objects that the amount of the award divided by the number of
hours devoted to the litigation by plaintiff's attorneys yields
an exorbitant hourly rate. But as the experienced trial judge
stated, “compensation at an hourly rate would be inadequate
in a case of this kin _* which “is, in many ways, unusual . . . its

available data supplied by Greyhound and where such data was not avail-
able every assumption and method “and every use of statistics and every
use of ratios was done . . . with standard statistical techniques and there
was, in my opinion, we pre agen use of numbers.” He concluded that the
study accurately refi Mt. Hood’s damages.

38. For example, Mt. Hood’s damage study, see note 37, supra, in-
cluded a comparison of passenger utilization of three available “ ‘All
Greyhound’ routes from Oregon and Washington points to Los Angeles,”
showing that more than 95 percent of the bus passengers chose the shortest
of the three available routes.

39. This holding also encompasses the damage awards for express
traffic Mt. Hood lost between 1964 and 1971, and for local traffic it lost
between 1964 and 1970.

30 Appendix A—Court of Appeals’ Opinion
complexity and difficulty set it apart from the common run of
antitrust cases, if such a category in fact exists.” The trial court
based the award upon knowledge gained in four years’ involve-
ment in all aspects of the case, the evidence presented by the
parties on this issue, and the factors prescribed in Twentieth
Century Fox Film Corp. v. Goldwyn, 328 F.2d 190 (9th Cir.
1964). The award represented an appropriate exercise of the dis-
trict court’s discretion.
Affirmed.

Appendix B—Court of Appeals’ Order Denying Rehearing 31
Appendix B
Order Denying Rehearing

United States Court of Appeals
for the Ninth Circuit

Mt. Hood Stages, Inc., dba Pacific Trailways,

Plaintiff-Appellee,
v.
No. 74-1282
The Greyhound Corporation and
Greyhound Lines, Inc.,
Defendants-Appellants.

[August 3, 1977}

ORDER

Before: BROWNING and WRIGHT, Circuit Judges, and
*LINDBERG, District Judge

The panel as constituted in the above case has voted to deny
the petition for rehearing and to reject the suggestion for a
rehearing in banc.

The full court has been advised of the suggestion for in
banc rehearing, and no judge of the court has requested a vote
on the suggestion for rehearing in banc. Fed. R. App. P. 35(b).

The petition for rehearing is denied and the suggestion for
a rehearing in banc is rejected.

*Honorable William J. Lindberg, Senior United States District Judge,
Western District of Washington, sitting by designation.

32 Appendix C—District Court’s Memorandum and Order
Appendix C
District Court’s Memorandum and Order

In the United States District Court
for the District of Oregon

Civ. No. 68-374
Mt. Hood Stages, Inc., doing business as Pacific
Trailways,
Plaintiff,
v.

The Greyhound Corporation and Greyhound
Lines, Inc.,
Defendants.

[November 29, 1973}

MEMORANDUM AND ORDER
GOODWIN, Judge:*

Greyhound has moved for a judgment notwithstanding the
verdict and for a new trial in this treble-damage antitrust action
which resulted in a verdict and judgment for Mt. Hood Stages.
The principal issue is whether Hughes Tool Co. v. Trans World
Airlines, 409 U.S. 363 (1973), compels a judgment n.o.v.

Greyhound asserts:

(1) The action is barred by Section 5(11) of the Interstate
Commerce Act, 49 U.S.C. § 5(11);

(2) There was insufficient evidence (of conspiracy and of
monopolization) to sustain the verdict;

(3) A new trial should be granted because of the numerous
errors of law in the taking of evidence and in the instructions to

the jury.

*The Honorable Alfred T. Goodwin, United States Circuit Judge,
sitting as District Judge by designation.

Appendix C—District Court's Memorandum and Order 33

All of these contentions rehearse issues which were briefed
and argued extensively at trial and in hearings before trial. Now,
as then, the law and the facts of this case are such that the issues
must be resolved against the defendants. If there was error here
or there in an evidentiary ruling, none was so prejudicial as to
warrant the abortion of a lengthy trial. See Fed. R. Civ. P. 61.

The evidence revealed long-standing, calculated, and damag-
ing conduct which, but for Section 5(11) of the Interstate
Commerce Act, plainly would have violated Sections 1 and 2
of the Sherman Act, 15 U.S.C. §§ 1, 2.

Mt. Hood proved, imter alia, that Greyhound had: (1)
directed independent and joint ticket agents to long-haul traffic
around Mt. Hood; (2) interfered with the distribution of Mt.
Hood’s schedules; (3) scheduled connecting service so as to
preclude reasonable connections with Mt. Hood; and (4) dis-
continued through bus service important to Mt. Hood's sched-
uled routes.

The IL.C.C. and reviewing courts have found that Greyhound
willfully breached earlier representations made to the Commis-
sion in acquisition proceedings and engaged in destructive com-
petition.’ The destructive practices established by the record be-
fore the Commission were enjoined by a three-judge panel of a
district court,? and Greyhound was subsequently held in criminal
contempt for violating that injunction.’ I mention these collateral

1. See, e.g., Petition for Modification—Greyhound Mergers (Western
Div.), 104 M.C.C. 449 (Div. 3, 1968); I.C.C. Affirmance of the Order of
Division 3, No. MC-F-9136 (Dec. 11, 1968; April 14, 1969); Greyhound
Lines, Inc. v. United States, 301 F.Supp. 356 (N.D. Ill. 1969) (denying
motion for temporary restraining order).

2. Greyhound Lines, Inc. v. United States, 308 F. Supp. 1033 (N.D.
Ill. 1970).

3. United States v. Greyhound Corp., No. 71-CR-924 (N.D. IIL,
June 27, 1973).

34 Appendix C—District Court's Memorandum and Order
cases, not because I relied upon them in this case, but because
they establish two points that do have some relevance to policy
considerations that bear upon this case.

In the first place, the litigation before the Commission has
proceeded for approximately a decade with no apparent impact
upon Greyhound’s conduct. If Congress intended the Interstate
Commerce Act to provide a remedy for competitors injured by
predatory behavior on the part of regulated carriers, then the
legislation is woefully inefficient. Second, if proof outside the
abundant proof in this record were needed, the collateral cases
strip away any pretense that Greyhound’s conduct toward its
competitors was simply the result of good-faith aggressive man
agement. The costs to Greyhound of the prolonged litigation
before the Commission apparently have been more than offset by
the profits Greyhound has derived by flouting the Commission's
cease-and-desist orders. If there was ever a case in which a
private action for damages is demonstrably necessary to carry out
national antitrust policy, this is it.

Section 5(11) of the Interstate Commerce Act obviously is the
key issue. That section provides, in relevant part:

“* * * [Any carriers or other corporations, and their
officers and employees and any other persons, participating
in a transaction approved or authorized under the provisions
of this section shall be and they are relieved from the
operation of the antitrust laws and of all other restraints,
limitations, and prohibitions of law, Federal, State, or muni-
cipal, insofar as may be necessary to enable them to carry
into effect the transaction so approved or provided for in
accordance with the terms and conditions, if any, imposed
by the Commission, and to hold, maintain, and operate any

properties and exercise any control or franchises acquired
through such transaction * * *.” 49 U.S.C. §5(11).

The effect of a similar statute on the antitrust liability of a
supplier of airline equipment was recently decided by the Supreme

Appendix C—District Court's Memorandum and Order 35
Court in Hughes Tool Co. v. Trans World Airlines, supra. When
an agency, with the authority to immunize transactions from the
operation of the antitrust laws, necessarily considers the public
interest and approves conduct explicitly or implicitly before the
agency as part of a proposed transaction, such conduct is thereby
made immune from antitrust liability.

Mt. Hood poses the “flip side” of the Hughes Tool question:
where a regulating agency with the authority to immunize conduct
from the operation of the antitrust laws has not approved the
conduct complained of, and indeed has ordered it stopped, does
the approval by the agency of related transactions and the exist-
ence of a pervasive regulatory scheme, including the availability
of some remedy, adequate or not, under that scheme preclude
antitrust liability, I hold that it does not. See Hughes Tool Co. v.
Trans World Airlines, 409 U.S. at 387:

“We repeat, however, what we said in the Pan American
case that the Federal Aviation Act does not completely dis-
place the antitrust laws.”

The Supreme Court has repeatedly made it clear that repeal
of the antitrust laws is not to be lightly assumed. See, e.g., Ricci
v. Chicago Mercantile Exchange, 409 U.S. 289 (1973); United
States v. Philadelphia Nat'l Bank, 374 US. 321, 350 (1963);
Georgia v. Pennsylvania R.R., 324 US. 439, 456-57 (1945). See
also Price v. Trans World Airlines, 481 F.2d 844 (9th Cir. 1973)
(post-Hughes Tool Co. antitrust action stayed pending resort to
Civil Aeronautics Board).

Mt. Hood is not here seeking the kind of relief that could be
provided by the LLC.C* That kind of relief has been sought, and
for nearly ten years has proven to be illusory. Here Mt. Hood is

4. See 49 U.S.C. §§ 9, 16. Though the I.C.C. has jurisdiction to award
damages, this power is limitéd to cases in which damages result from
activity which can be classified as a violation of the Interstate Commerce
Act. National Trucking & Storage Co. v. Pennsylvania R.R., 228 F.2d 23,
30 (D.C. Cir. 1955).

36 Appendix C—District Court's Memorandum and Order
seeking only the antitrust remedy of treble damages, relief that
can be granted only in court and which is supplemental to those
administrative remedies which could be ordered by the I-C.C.

The antitrust issues raised by Greyhound’s conduct were not
considered or passed upon by the Commission in the initial acqui-
sition proceedings. Were this court to hold that merely because
the I.C.C. has authority to approve acquisitions, routes and sched-
ules and order some relief with respect to some of the conduct
complained of Congress has thereby placed exclusive jurisdiction
in the L.C.C. over all conduct related to the approved trans-
actions, this would amount to an almost total exemption of a
carrier's conduct from the antitrust laws. Rather, all that Hughes
Tool teaches is that the substantive exemptions from the antitrust
laws created by Congress or required by the structure of the
regulatory scheme are not destroyed through by-passing or
overriding the forum chiefly entrusted with the regulation of
the industry in question. See REA Express v. Alabama Great So.
Ry., 412 U.S. 934 (1973) (affirming a three-judge court’s stay
of an antitrust suit pending I.C.C. reconsideration of a prior
financing arrangement order on the issue of possible antitrust
immunity).

A court's antitrust jurisdiction is ousted only when the specified
agency, pursuant to its statutory authority, approves the challenged
actions. If an agency thus grants an exemption from the antitrust
laws, that determination is binding unless a court should set it
aside for one of the reasons enumerated in Section 10(c) of the
Administrative Procedure Act.’ By the same token, however,
conduct which not only has not been expressly approved but

5. E.g.,5 U.S.C. § 706(2):

_ “(A) arbitrary, capricious, an abuse of discretion * * *;
“(B) contrary to constitutional right * * *;
“(C) in excess of statutory jurisdiction * * *;
“(D) without observance of procedure required by law;
“(E) unsupported by substantial evidence * * *;
“ee eee”

ee Met te ae

Appendix C—District Court's Memorandum and Order 37
which has been expressly disapproved by the agency ought then
to be subject to antitrust remedies supplemental to those which
could have been granted by the agency.

A contrary decision would not only be an unsound reading of
legislative intent, but would also be impractical. It would fore-
close from the courts the option of utilizing primary jurisdiction,
a technique which does not preclude a later judicial antitrust
proceeding should the agency first determine that the complained-
of acts were not immunized. Cf. Ricci v. Chicago Mercantile
Exchange, 409 U.S. at 305-06; Federal Maritime Board v. Is-
brandtsen Co., 356 U.S. 481, 498-99 (1958). Greyhound’s read-
ing of Section 5(11) would place upon the I.C.C. the impossible
burden of anticipating and ruling upon all the possible antitrust
implications of all conduct conceivably related to any transaction
subject to I.C.C. approval at the risk of subsequently being held
to have conferred a blanket antitrust immunity.

In my other rulings, and in rejecting various proposed instruc-
tions, I tried to state my reasons as the case progressed. Accord-
ingly, I will not extend this Memorandum by repeating those
reasons here.

IT IS ORDERED:

(1)-The motion for judgment notwithstanding the verdict is
denied;

(2) The motion for a new trial is denied;

(3) The court will hear counsel on the matter of attorney's
fees at 10:00 a.m., December 14, 1973.

DATED this 29th day of November, 1973.
/s/ ALFRED T. GooDWIN
Alfred T. Goodwin

United States Circuit Judge,
sitting as District Judge
by designation.

38 Appendix D—Memorandum and Order re Attorneys Fees
Appendix D

District Court’s Memorandum and Order re Attorneys Fees

In the United States District Court
for the District of Oregon
Civ. No. 68-374

Mt. Hood Stages, Inc., doing business as Pacific
Trailways,
Plaintiff,
v.

The Greyhound Corporation and Greyhound
Lines, Inc.,
Defendants.

{December 21, 1973}

MEMORANDUM AND ORDER ON ATTORNEY FEES

After reviewing the file, the exhibits offered in support of
the claim for attorney fees, and all the evidence offered by both
parties on the question of a reasonable attorney fee, I have con-
cluded that compensation at an hourly rate would be inadequate
in a case of this kind.

I have considered all of the factors Judge Hamley enumerated
in Twentieth Century Fox Film Corp. v. Goldwyn, 328 F.2d 190
(9th Cir.), cert. denied, 379 US. 880 (1964), and have given
weight to all of them. I believe that this case is, in many ways,
unusual, and that its complexity and difficulty set it apart from
the common run of antitrust cases, if such a category in fact exists.

I will not attempt to go through the figures, or the evaluation
process, by assigning cash value to the various elements. Rather,
I have decided to give substantial effect to the result achieved,
and to the other factors in the perspective of the four years I
have known the case in all its details. I have concluded that a

ee eee

Appendix D—Memorandum and Order re Attorneys Fees 39
reasonable fee to be assessed against the defendant is the sum of
$1,250,000. The attorney's fee is to bear interest at the statutory
rate for judgments until paid.

The Clerk will draw and submit for my signature a final judg-
ment, accordingly in the total sum of $14,396,090.00, plus costs
to be taxed.

/s/ ALFRED T. GoopwiINn

United States Circuit Judge,
sitting as District Judge
by designation.

40 Appendix E—Statutes Involved
Appendix E

Statutes Involved

Section 5 of the Interstate Commerce Act, 49 U.S.C. $5, pro-
vides in relevant part as follows:

(2) (a) It shall be lawful, with the approval and authorization
of the Commission, as provided in subdivision (b) or paragraph
(3) of this paragraph—

(i) for two or more carriers to consolidate or merge their
properties or franchises, or any part thereof, into one corporation
for the ownership, management, and operation of the properties
theretofore in separate ownership; or for any carrier, or two or
more carriers jointly, to purchase, lease, or contract to operate the
properties, or any part thereof, of another; or for any carrier, or
two or more carriers jointly, to acquire contro] of another through
ownership of its stock or otherwise; or for a person which is not a
carrier to acquire control of two or more carriers through owner-
ship of their stock or otherwise; or for a person which is aot a
carrier and which has control of one or more carriers to acquire
control of another carrier through ownership of its stock or other-

(b) Whenever a transaction is proposed under subdivision (a)
of this paragraph, the carrier or carriers or person seeking author-
ity therefor shall present an application to the Commission, and
thereupon the Commission shall notify the Governor of each
State in which any part of the properties of the carriers involved
in the proposed transaction is situated, and also such carriers and
the applicant or applicants (and, in case carriers by motor vehicle
are involved, the persons specified in section 305(e) of this title),
and shall afford reasonable opportunity for interested parties to
be heard. If the Commission shall consider it necessary in order
to determine whether the findings specified below may properly
be made, it shall set said application for public hearing; and a

Appendix E—Siatutes Involved 41
public hearing shall be held in all cases where carriers by railroad
are involved unless the Commission determines that a public hear-
ing is not necessary in the public interest. If the Commission finds
that, subject to such terms and conditions and such modifications
as it shall find to be just and reasonable, the proposed transaction
is within the scope of subdivisiou (a) of this paragraph and will
be consistent with the public interest, it shall enter an order ap-
proving and authorizing such transaction, upon the terms and
conditions, and with the modifications, so found to be just and
reasonable: .

(10) The Commission may from time to time, for good cause
shown, make such orders, supplemental to any order made under
paragraph (1), (2), or (8), of this section, as it may deem
necessary Or appropriate.

(12) The authority conferred by this section shall be exclusive
and plenary, and any carrier or corporaiion participating in or
resulting from any transaction approved by the Commission there-
under, shall have full power (with the assent, in the case of a
purchase and sale, a lease, a corporate consolidation, or a corpo-
rate merger, of a majority, unless a different vote is required under
applicable State law, in which case the number so required shall
assent, of the votes of the holders of the shares entitled to vote
of the capital stock of such corporation at a regular meeting of
such stockholders, the notice of such meeting to include such
purpose, or at a special meeting thereof called for such purpose)
to carry such transaction into effect and to own and operate any
properties and exercise any control or franchises acquired through
said transaction without invoking any approval under State
authority; and any carriers or other corporations, and their officers
and employees and any other persons, participating in a trans-
action approved or authorized under the provisions of this section
shall be and they are relieved from the operation of the antitrust
laws and of all other restraints, limitations, and prohibitions of

42 Appendix E—Statutes Involved

law, Federal, State, or municipal, insofar as may be necessary
to enable them to carry into effect the transaction so approved
or provided for in accordance with the terms and conditions, if
any, imposed by the Commission, and to hold, maintain, and
Operate any properties and exercise any control or franchises
acquired through such transaction. .. .

Section 4B of the Clayton Act, 15 U.S.C. §15b, provides as
follows:

Any action to enforce any cause of action under sections 15 or
15a of this title shall be forever barred unless commenced within
four years after the cause of action accrued. No cause of action
barred under existing law on the effective date of this section and
sections 15a and 16 of this title shall be revived by said sections.

Section 5 of the Clayton Act, 15 U.S.C. $8 16(a), (i), provides
in relevant part as follows:

(a) A final judgment or decree heretofore or hereafter rendered
in any civil or criminal proceeding brought by or on behalf of the
United States under the antitrust laws to the effect that a de-
fendant has violated said laws shall be prima facie evidence
against such defendant in any action or proceeding brought by any
other party against such defendant under said laws or by the
United States under section 15a of this title, as to all matters
respecting which said judgment or decree would be an estoppel
as between the parties thereto: Provided, That this section shall
not apply to consent judgments or decrees entered before any
testimony has been taken or to judgments or decrees entered in
actions under section 15a of this title.

* * * «

(i) Whenever any civil or criminal proceeding is instituted by
the United States to prevent, restrain, or punish violations of any
of the antitrust laws, but not including an action under section 15a
of this title, the running of the statute of limitations in respect of
every private or State right of action arising under said laws and
based in whole or in part on any matter complained of in said

Appendix E—Statutes Involved 43
proceeding shall be suspended during the pendency thereof and
for one year thereafter: Provided, however, That whenever the
running of the statute of limitations in respect of a cause of action
arising under section 15 or 15c of this title is suspended here-
under, any action to enforce such cause of action shall be forever
barred unless commenced either within the period of suspension
or within four years after the cause of action accrued.

44 Appendix F—Excerpts from CCH Trade Reg. Rpts.

Appendix F

Excerpts From CCH Trade Regulation Reports,
Number 285 PT. |, pp. 8-10 (June 13, 1977).
AIRLINES

TRANSATLANTIC NO-FRILLS—Justice view . . . Laker Air-
ways’ proposed transatlantic “Skytrain” service should be approved
without delay, the Department of Justice told the Civil Aero-
nautics Board.

* * * *

. . . The Department supported a consolidated proceeding to
consider the applications of U. S. carriers to provide a low-fare,
no-frills transatlantic service competitive to that offered by Laker,
it said. ...

While acknowledging that some type of consolidated and
expedited proceeding is required, the Department opposes delay-
ing the processing of Laker’s application until resolution of the
consolidated proceeding: “There is no reason to deprive U. S.
passengers of immediate benefits of a creative, low-cost air
service simply to accommodate U. S. carriers” (Statement of
Position of U. S. Department of Justice, June 6, 1977, Agree-
ments Among Members of the International Air Transport Assn.,
CAB Dkt. No. 28672).

TRAVEL AGENT COMMISSION PACT—Justice view .. .
Proposed International Air Transport Association agreements to
fix the commissions earned by travel agents on sales of inter-
national airline tickets should be disapproved, the Department of
Justice advised the Civil Aeronautics Board.

The Department's views were filed by the Antitrust Division
with the Board after hearings on the matter. The hearings con-
firmed the Division's previously expressed view that approval of
the agreements would not be in the public interest, according to
Joe Sims of the Antitrust Division.

* * * #
(Consolidated Answer of the U. S. Department of Justice, June
6, 1977, CAB Dkt. Nos. 30927, 25908, 25427, 25457, 30912 and
30917).

Appendix F—Excerpts from CCH Trade Reg. Rpts. 45
INTERCITY BUSES

LATIN EXPRESS—Justice view on denial of application . . .
Denial to a small bus company of authority to provide new inter-
city service incurred competition policy protests from the Depart-
ment of Justice.

This was the second time in two months that such an applica-
tion was rejected by the Interstate Commerce Commission and,
in each case, denial was premised on the potential harm that the
new service could have on Greyhound and Trailways bus opera-
tions, according to the Department's June 6 announcement.

The Department said its comments were in a petition filed
by the Antitrust Division supporting the application of Latin
Express Service, Inc.. to operate new service between Miami,
Florida, and Union City, New Jersey. . . .

* * * *

RAIL/WATER

ALASKA RATE FIXING—Justice view .. . Reject a rate-
fixing agreement filed by the Alaska Rail-Water Association, the
Department of Justice stated to the Interstate Commerce Commis-
sion.

* * * *

The Association is asking the Commission to approve an
agreement by its members to fix rates for through routes be-
tween continental United States and Alaska; approval, if lawful,
would immunize Association members from antitrust liability for
rate-fixing, according to the Department's Antitrust Division. It
told the ICC that the proposed agreement would eliminate com-

46 Appendix F—Excerpts from CCH Trade Reg. Rpts.
petition for rail-watec movements on these routes and was beyond
the Commission's authority to approve because the Railroad
Revitalization and Regulatory Reform Act of 1976 limits Com-
mission authority to immunize rate-fixing agreements from anti-
trust prosecution. . . .

TELEVISION

FCC NETWORK INQUIRY—Justice view . . . Listing a num-
ber of national television network contractual and advertising
practices that it believes should be given special attention, the
Department of Justice recommended procedures to expedite a
Federal Communications Commission inquiry into practices of
television networks and suggested measures to ensure effective
participation by all interested parties.

* * * &

The comments were filed to help the Commission identify
practices that may deter competition in television broadcasting,
Joe Sims said, adding that the recommended procedures should
help the inquiry explore fully all network-affiliate relationships
and should guarantee prompt availability of a complete record
to the full Commission (Motion of U. S. Department of Justice
for Leave to File Late Comments, June 8, 1977, Commercial Tele-
vision Network Practices and the Ability of Station Licenses to
Serve the Public Interest, FCC Dkt. No. 21049 RM-2749).

2

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385004_2724%3A1. Public record. Not legal advice.