Opposition Brief — Carter v. American Telephone & Telegraph Co.

Supreme Court brief1967

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F a “United States v. ade Air Transport, In¢., 275 F. 2d °: .

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United States v. Borden Co., 347 U.8514" fy” Eee ea ae

United States v. Corrick, 298 CE. GID) sic 1

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e geesens BRAY IN AE RN, Sek NEED eae NOE : +48

United States v. FMC Corp., 218 F. Supp. 817. (N. D, Cal.

_~~ 1963), app . dismissed for want of juris., 321 F. 2d 534

(9th Cir 1963), application for preliminary injunction

’ denied by enems J. ‘ in chambers, 11 . Ed. 2d 20

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: United States v. "Western Pacific RR.Co., 352 U.S. 59 (1956) 9

United — v. Philadelphia Bank, 874 U.S. 321 (1963) 13:

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United 'v., Radio Corp. of America, 9584U.S. 384,

348 (1959) wc... 6, 10

United States v. Standard Oil Co. (Ty. )s 1961 Trade Cases. !

_ 170,181 (ND, Cal. 1968) .... 16

Western States Tel. Co. v. AT&T: “Civ, No. 64-175 PH ee:

(al. 1964) (Unreported Decision ; RB. 14D). .ncoccecoree Siinten li,n.3°

“Wooton v. Ohler, 303 F. 2d 759 (bth Cir. TEE Ce

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Communications Aét of 1934, 47 U. SC. §151, §§ 201.282 4, passim ’

15 US. C. §§ 1 and 2, ‘Shermian Act. §§ 1 and, 2 wversnnesn 4

15 U.S.C. §§ 14, 15 and 26, Clayton Act, §§3, 4, and 164

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Supreme Court of the United States

na? OcTosrr TERM, 1966 sate

ee No. 772

THontas F. Carrer AND Geum Secale Courcaanon,

Gos ‘ hmaemaice

3 “Y. \ “

. American TELEPHONE aND TELEGRAPH CoMPANY,

SouTHWESTERN BELL TELEPHONE CoMPANY, AND |

GENERAL TELEPHONE "COMPANY OF THE SouTHWwEst,

Respondents.

_. BRIEF OF RESPONDENTS = ~*~

- AMERICAN TELEPHONE AND TELEGRAPH

_COMPANY AND SOUTHWESTERN BELL

TELEPHONE COMPANY IN OPPOSITION -

*, ‘TO PETITION FOR WRIT OF CERTIORARI __

_ .-This is a case seeking review of the exercise of discre-

tion by the trial court in denying petitioners’ application

for a preliminary injunctionzin a private antitrust treble

iii damage action. After hearing on respondents’ motions to

dismiss (R. 99, 145), the action was stayed bythe trial court -

_pending institution and completion of appropriate pro-

- ceedings before the Federal: Communications Commission,

because the FCC was held to have primary jurisdiction to

determine the. justness, reasonableness, and validity of FCC

tariff provisions which the antitrist action attacked. 250

F. Supp.- 188-192 (App. A). This order staying thé action

was interlocutory and not appealable under the provisions

of 28 U.S.C. § 1292(a). Several days later, petitioners made _

a motion for hearing on their application for preliminary —

injunction (R. 161). The trial court denied this motion “for

the reasons stated” in the earlier memorandum order.

° pr . 2 .

(R. 162). The court of appeals, having held that this ruling

constituted a denial of a preliminary injurfttion and was,

therefore, appealable under the provisions of § 7 a) ( 1),

affirmed the trial court’s action.

. . Petitioners claim demnalatiie for the alleged interference

by respondents with their attempts to market the Carter-

‘ fone, a device designed to permit the subscribers of respond-

ent telephone companies to establish interconnections be-

tween the common carrier telephone channels of respond-

ents and the channels of private mobile radio systems. The ~

“interference” referred to is the enforcement by respond-

ents of their FCC tariffs forbidding interconnection. The

éssence of petitioners’ theory is succinctly contained in

- paragraph XI (R. 86) of their complaint, which alleges:

“The Defendants and the afecemsations’ non-party

telephone companies,;in order to accomplish the’ vio-

lation of the federal antitrust: laws heretofore set -

forth, have published a regulatory tariff which pur-

- ports to prevent the use of a device similar to the:

- Carterfone as it relates to telephone company equip-- > — * *

ment. Such tariffs are similar or sdentiosl. to. 8-tryiesl

tariff published by Defendant-American Te Prat and

= ‘Telegraph Company known as AT&T Tariff FCC No.

132, Message Toll Telephone Service, the language of

which i is shown on Exhibit A attached hereto and in-

corporated herein. Although the Plaintiffs . deny that-

such tariff é is a valid tariff and that such tariff is appli: | .

cablé to the Carterfone, regardless of its validity and.

its application, the Defendants and the aforementioned

- non-party telephone . companies have, as part of a

common design and scheme, in uniformly publishing

* and enforcing ch tariff, ‘wrongfully used stich tariff

to accomplish a Violation of the antitrust laws of the”

United States. Such’tariff does not and may not author-

ize or excuse the aforementioned violation of the anti-

trust laws of the United States.’ “1 me 86). satel aan

supplied. y.

Soe }

“i

| "the ehaitaaneat & tariffs pene the telephone industry’s

. basic and long standing interconnection policies which have

Fd evolved over years. of administrative proceedings and regu-

lation. The’ tariffs are applied. uniformly to interconnec-.

tions, ‘and respondents have a statutory duty to enforce ae

such tariff provisions. Recognizing the need for accommo-

dation of the antitrust laws to the pervasive regulatory

jschéme contemplated by the Communications Act of 1934,

“the district court stayed the action ‘and referred the case

to'the FCC under the doctrine of primary jurisdiction for

determination of the justness, reasonableness, and validity

of the tariff provisions. 250 F. Supp. at 192 (App. A at 7a).

__ On the basis of their complaint and ex parte affidavit, peti-

_“tioners seek peremptory relief nullifying these tariffs.

The relevant facts are well stated by the Fifth Circuit:

Court of Appeals! which affirmed the district court’s denial

- of a preliminary injunction and upheld the lower court’s”

‘stay of the action pending proceedings in the FCC-based c= 7

on the oct jurisdiction. |

— ee - a

OPINIONS BELOW

The opinion of the United States District ‘Coast for ;

the Northern District of Texas (App. A) is reported at

250 F. Supp. 188. The opinion of the Court of Appeals for"

: the Fifth Circuit (App. B). is E eageniee at 355 F. a 486.

’ .

before the lower courts, both courts took judicial notice of the

records and orders of the. Federal Communications C mmission,

as is their prerogative in considering a question of pri

jurisdiction. Interstate Natural Gas Co. v. Southern California

Gas Co., 209 F. 2d 380, 385 (9th Cir. 1953) ; Fletcher v. Jones,

105. F. 2d 58 (D:C. ‘Cir. ), cert. denied, 308 U.S. 555 (1939) ;

. Greeson v. Imperial Irr. a 59 F. 24 529° a sciny Cir. 1932).

o 4+ + Contrary to petites? assertion that only the’ ice was

7 /

ad 4°

“STATUTES AND REGULATIONS INVOLVED :

Couisininieations Act of 1934, 47 U. 8. C. § 151, 82 201-222

(App. C, PP. dette). 2

Sherman Act, 1 and 2, 15 USE. §§1 and 2 (App. ( c,

pp.l4c-l6c). eC |

Clayton Act, §§ 3, 4, ik 16, 15 U. S.C.: $s 14, 15, a 26

(App. C, pp. A6e-17e). . ees bet oa

8 USC. 61202 (a) Cap. ie We).

coe Tariff FCC No. 132, § BY, (9 BMB28 63

(App: =

QUESTION PRESENTED

Respondents submit that the first question ‘presented by |. |

petitioners may be more accurately stated as follows:

Was it an abuse of the trial court’s. discretion to

deny a preliminary injunction after a stay of the anti-

trust treble damage action pending the institution and

a completion of appropriate proceedings before the Fed-

eral Commurfications Commission relating to the just- 3

. Pops reasonableness, and validity of the tariff provi-

‘sions attacked i in the action?

eae

ARGUMENT

he aan

_ THE COURT oF. APPEALS WAS CORRECT IN

| AFFIRMING THE TRIAL COURT’S DENIAL OF

PETITIONERS’ - < REQUEST FOR A PRELIMINARY

INJUNCTION. fe

re ees

. The courts below correctly held that the doctrine

_.-0f primary jurisdiction requires that the “FCC

vie initially determine all questions relating to the

' ' tariff and tariff. practices complained of by -

petitioners. 4

While the collvnsibiaaiiiets @inions of ee siioes courts ; are

so sound and unassailable in both law and logic on the issue |

of: primary jurisdiction that together they constitute the

best and most conélusive answer to the petition for writ

-of. certiorari, respondents will briefly respond to. the: var-.

ious arguments. actvanced by petitioners, - “a \

~ 1

‘Regulation of the interconnection of telephone °

channels with other communications’ channels _

has been entrusted to the FCC.

The regulation of the telephine par poses prob-

lems of the highest complexity. The Congress‘of the United

States: long ago recognized that common carrier communi-

cations service must be provided on a ‘public utility basis; :

that is, subject to careful and pervasive ‘Tegulation, rather

than with unregulated competition. The national commu-

nications policy,as reflected in the Communications Act of

(1934 (47 U.S.C. ben §§ 201-222) is broadly stated “to—-

make available . . . to all the people of the United States

fe .

a rapid, efficient, nation-wide and world-wide wire and radio

* communication service with adequate facilities at reason-

able charges . ...” 47 U.S.C. $151. To achieve these goals, —

- *- the Communications Act grants a broad range of powers

to.the Federal Communications. Commission.. 47%, U.S.C.

§§ 201-222. Among other-requirements, the telephone utility

is required to file in its schedules and tariffs “the classifica- _ | ;

tion, practices, and regulations affecting ‘such charges.”

. 47 U.S.C.-§ 203(a): ‘The “classification, practices, and: reg- -

‘ ulations,” :as well as the charges, -must be “just and rea- -

. sonable.” 47 U.S.C. §201(b). The Commission is empowered .

— to determine whether the | tariffs are just, reasonable,

and nondiscriminatory (47.U.8.C. § 205(a)) either on its

own initiative or upon a filed by third casa 47

i U.S.C. $ 208.

Further, the Commission has the power to ‘caitlin, Q

such rules and regulations as are “necessary_in the public -

‘ interest”. to carry out-the provisions ‘of the-Act. 47 U.S.C.

§ 201(b). Each telephone company is required td” file with

._ the Commission, and to keep open for public inspection, a.

tariff setting forth its charges, classifications, regulations,

-and practices. 47 U.S.C. § 203(a). Such tariffs must be fol- :

lowed until such time as. they are amended in the manner —

‘provided by thd statute. 47 U.S.C. § 203(b). A’ telephone

company may not provide. service unless tariffs are filed _

covering such service and the company may not* deviate

' from the rates, classifications, regulations, or praétices con-

tained in the tariffs so filed. 47 U.S.C. § 203(c). The Com-_

- {munications Act, therefore, presents an intricate and per-

vasive statutory structure of continuous regulation and_

administrative review, as this Court has recognized. United

States v. Radio Corp. of America, 358 US. 334, 348 (1959).

- Petitioners claim damages for the ae interference ‘by

the respondents with petitioners’ attempt to market the

Carterfone, a devise designed for petitioners’ customers to:

_ use to establish an interconnection between the telephone -

channels of respondents and channels of private mobile sys-

_ tems. Petitioners claim: that this “interference” through - re

enforcement of FCC tariffs forbidding interconnections -

. Violates\the antitrust laws Petitioners’ complaint in para-

graph XI (RB. 86). specifically alleges that “the Defendant .

... telephone companies, in order to.accomplish the viola-

tion of the federal antitrust laws heretofore set.forth, have

- publisi€d a regulatory tariff which purports to prevent the

' - useof a device similar to the Carterfone as it relates to

telephone company equipment.” The tariff provisions re- .

ferred to are §§B.7 and B.24 of AT&T's Message Toll

Telephone Service Tariff FCC No. 132, which petitioners

" attached to their complaint as Exhibit A (R. 90). These

provisions (App. D at 1d) prohibit the. interconnection of: *

the respondents’ communications channels with communi-

_* eations channels of others except as expressly provided in’

e°

other sections of the tariff? .

-2 Tariff FCC No. 132 section¢ which allow interconnections under

_ certain conditions are as folléws: Séetion B.25 (connection with

facilities of power pipe line, and railroad companies pursuant

- to Tariff FCC No. 134) ; Section B.26 (connectjons with experi-

mental satellite facilities through connection” equipment pro- —

vided ‘by the telephone company); Section B.27 (connection

with N.A.S.A. installations pursuant to Tariff FCC No. 134) ;

- Section B.28 (connections with certain facilities of the U,:8..

Army, Navy, and Air Force provided tthe appropriate Secretary

of. such Department certifies that connection is required by

reason of military necessity) ; Section J (service through mis-

cellaneous common carriers utilizing telephone company intra-

exchange equipment). (App. D) ~—_. sit ge

The Commission itself has advised pétitioners in reply to an

inquiry that use of the Carterfone device to effectuate inter-

connection appeared to violate respondents’ tariff (R. 112;

letter of M. J. Morris, Secretary of the FCC to Jeremiah Court...

ney, one for Carter Electronics Corporation, March 24,

ar ssbb ina both of the courts cao, the gravamen of

petitioners’. action is a dixect challenge to the validity of -

‘Tariff FCC No. 132. The challenged tariffs were filed in -

- compliance with the Communications. Act. They have. the

force of law and are binding on the respondents and their

'- eustomers alike. Crancer.v. Lowden, 316 U.S. 631, 635 -

(1942); Atchison; T & S.F. Ry. Co. v. City of Chicago, 240

F. 2d 930, 937 (7th Cir. *1957),. aff'd, 357 U.S. 77 (1958) ;

Compania Anonima: Venézolana De Nav. v. A. J. Perez

Exp, Co., 303 F. 2d 682, 696 and n. 12 (5th Cir.), ‘cert.

denied, 371 U.S. 942 (1962) ; : United States v. Associated Air .

Transport, Inc., 275 F. 2d 827 (5th Cir. 1960). When placed

, against the comprehensive regulatory scheme of the Com-.

munications Act,-respondents submit that it is clear. that |

a dispute involving the basic. intercdnnection policy of.

interstate telephone companies roust first be brought before .

; the regulatory agency created by Congress specifically for |

the er of ‘peed of this natyre. Peake \.

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The doctrine of primary jurisdiction requires a ane:

. that issues relating to the validity, justness, and

reasonableness of the’ challenged tariff be first ;

_ determined by the Federal Communications |

" ,Commission. 3 hs

se *. “4 . .

‘The doctrine of primary jurisdiction, which was 3 judi.”

éially created to insure effective regulation, is a procedural —

. device under which a. court refrains from exercising its

jurisdiction pending preliminary administrative determina- 2

tion of the matters referred by it to -the administrative

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agency. 3 Rook: re He Law, £3906 seq. <¢1958)..

“The principal reason behind the doctrine is recognition.

of the need for orderly and sensible coordination of the

work of agencies: and of courts.”*3 Davis, Admifist¥ative - xe

Law, §319. 01 at 5 (1958). Thus; the doctrine of primary juris-. oe

diction “is congernéd with promoting propert relationships

between the courts and. administrative agencies charged

with particular regulatory dtities ... [and] applies where | -

a claim is originally cognizable in the courts, and comes -

into play whenever enforcement of the ¢laim requires the

resolution of i issues Which, under. a regulatory scheme, have

been placed ‘within the special competence of an “adminis-

_ trative body; in “such a case the judicial process | is suspended

pending referral of such issues to the administrative body |

for its views.” United States v.. Western Pacific RR Co.,

352 U.S. 59, 63 (1956) ; see also, Far East Conference v.

. United States, 342 U.S. 570, 572 (1952). ©"

Ag ‘noted by: poth the district ‘court ink the Court

of “Appeals for.the Fifth Circuit, all of the grounds. for. the’

application of the doctrine of primary jurisdiction ar are met

,in this case. There is clearly a necessigy for uniformity. .

. Conflicting décisions reached in district courts throughout

‘-\ this country .would completely frustrate:the attempts of _

the FCC to effectuate the’ statutory scheme of regulation

set forth in the Communications Aét, incl iding both super- |

vision of technical standards and supervision of costs and

charges. Telephone. companies waquld be faced. with the ss

dilemma of contradictory orders from the courts and from *

“the FCC: Further, the adoption of polyglot technical and»

méchanical standards.throughout the country could. raise’

great difficulty im sthe operation and maintghance of the

4 ‘interstate telephone network. Petitioners assert that there cf

is no necessity for the FOC tognake an initial determination ~ .

regarding the validity of the nation-wide interconnection ~

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tariff. At the same » time they seek to abrogate and ihe

ineffective such tariff. This position 4s contradictory on

its face. ‘

Se as, United States v. Radio Corp. of ‘heaven: 358 U. S. 334,

o "348 (1959), indicates clearly that the doctrine of primary

} ‘jurisdiction i is tote applied in antitrust cases’ involving the —

telephone industry. In. that case, this-Court distinguished

between television broadcasters, which are not included in —

the definition of common‘ carriers jin the Communications

- Act, and the telephone industry. The Court pointed out —

that the telephone companies are controlled under a perva-.

sive regulatory scheme, and recognized that in such situa-

tidy where tariff structures might be thrown “out; of bal-

_. “,’ ance” and “sporadic action by séveral courts” might “work _

__% ,,. mischief”, 359°G,8. at 350, primary jurisdiction is appli-. !

ite. Also squidly ; supporting the lower courts’ holdings -.:

‘is Ambassador, Inc. v.. United States, 325 U.S. 347 (1945),

_ Commission is not limited to rates and to services, but .

the Commissi f range of power. over regulatéd companies

[extends. to] {4 ‘charges, practices, classifications, and

regulations for anki in connection with such communication

‘ service.” The Court further -said-that “where the. élaim

of unlawfulness of a regulation i is grounded in lack of rea- -

sonableness, the objection must. be addressed to the Com-

. mission and not as an original matter brought to the: court, ”

325 U, S. at 323-25.

< -Finally, this Court’s receftt decision in Carnation. Caz y.

Pacific Westbound Conf., 383 U.S. 213 (1966), confirms the

lower courts’ application of the doctrine of primary juris-

diction. The plaintiff in. Carnation attacked certain rate-

making agreements on the grourid that they had not been

>? approved by the Federal. Mgritime Comphission and were

per se violations of the antitrust laws. ” The defendants

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argued, inter alia, that the rate making was done pursuant

to a 1952 agreement which had been approved bythe FMC.

- This Court held that the doctrine of primary jurisdiction

, eo be applied i in a case challenging conduet of “debatable.

_ legality” even where it-is alleged that the conduct is with-

out any agency approval or sanction. 383 U.S. at 220. It\.

emphasized that courts must “refrain from taking action ~

which might interfere with the Commission exercise of its

lawful,powers. ” The Court clearly recognized that'a pri-

mary determination of. whether the rates challenged were

within the approved orders of the Commission - ‘must be.

“made by the Commission and that the lower court should

h aye the-case pending a final outcome of the FMC |

pro ings. It is equally clear here that an initial detér-

mination of whether the FCC tariff prohibition of inter-.

connections by use of the Carterfone is valid, just, and

reasonable must be made by the FCC and that the lower

courts properly stayed the case for that agi ...

There i is no confiiet between this decision and -

« the cases relied upon by petitioners.

Petitioners have asserted that respondents’ conduct con-

stitutes a per se violation of antitrust laws and, therefore, eas

‘8 As noted by the court of: appeals, like decisions have* been

reached in at least four other cases: Marcom, Inc. v. AT&T;

Civ. No. 43215 (N.D. Cal. 1965) (Unreported Decision: R. 134) ;

Western States Tel. Co. v. AT&T, Civ. No. 64-175 PH (S.C.

Cal. 1964) (Unreported: decision ; R. 142) ; Secrafone v. Illinois’

Bell Tel.:Co., Civ. No. 60C 1022 (N. D. Ill. 1961) ; and Pastor v,

. ATET Co., 76 F., Supp. 781 (S.D. N.Y. 1940). “In: each case

_ it was alleged : that the actions of the defendants, taken in

accordance with their foreign attachment and interconnection

. tariff provisions, had prevented plaintiffs from marketing their —

variéus devices designed for attachment to or interconnection

with the channels of the defendants. Plaintiffs alleged that such

interference constituted a violation of the antitrust laws. In each

casé it. was held that primary jurisdiction of the action lay ©

in the FCC and appropriate‘s state commissions.” capac 2d at .

498 (App. B at baa

ad, : : :

the doctrine of primary jurisdiction has no application. in

thé instant case. Petitigners.in effect argue that concerted —

conduct which constitutes.a per se violation of the anti-

_ _ trust laws in a non-regulated industry necessarily consti-

tutes a per se violation of the antitrust laws in a regulated

industry. This is an’ incorrect view: of ‘the law: Examination

must be thade to determine whether accommodation of the

antitrust laws and the regulatory scheme contemplated hy

the appropriateregulatory statutes justifies.or necessitates _—

ats whatever restraint may occur under a particular regulatory

provision. As this Court has held, traditional antitrust .

concepts have sufficient. flexibility when applied to a regu--

lated: industry to permit the mandate of the ore

statute to be carried out. Silver v. New: York Stock Ex-

change) 373 U.S. 341, 360-61 (1963); McLean Trucking

Co. v. United States, 321 U.S. 67, 80 #1944); Keogh v. Chi-

cago & Northwestern Ry., 260. U.S. 156, 162 (1922). Both ©

of the courts below appropriately recognized this estab-

lished principle in applying the doctrine of primary juris- ©

diction. 365 F. 2d at_492-93 (App. B at 11b) ; 250 F. Supp.

190 (App. A at 4a).4 :

Petitioners also seek to. Noid the doctrine of primary.

jurisdiction with the argument that no immunity from the

antitrust laws is conferred upon the regulated telephone

, -compaaies by the Communications Act of 1934 and, there-

¢ Tuite petitioners” ‘thine thereon, Georgia v Vv. : Pennsylvania

RR Co., 324 U.S. 489: (1945), does not in any manner conflict

with the position on primary jurisdiction. reached by the lower

courts. eThis Court in Georgia permitted the State of Georgia

to seek injunctive relief against an alleged rate-seeking- con-

spiracy but held that regulatory tariffs could not be attached

through the vehicle.of an antitrust suit, stating: i

“Georgia in this proceeding is not seeking an injunction

- against the continuance of any tariff; nor does she seek: to

have any tariff provision changed. ” 394- U.S: at 455...

Contrast this to the position of petitioners who seek to have

respondents enjoined from obeying and ertforcing - ‘the intércon--

nection provisions of Tariff FCC No. 1382.

~ ee ; “~

; 13 é

fore, the doctrine is inapplicable.® This argument is clearly

erroneous for the doctrine applies whether immunity is -

conferred or not.. United States Nav. Co. v. Cumard S.S. Co.,

_ 384 US. 474, 487 (1932) ; Far East Conf. v. United States, .

~ 342 U.S. 570, 575 (1952); Maddock & Miller, Inc. v. United

States Lines, 365 F. 2d 98, 102 (2d Cir. 1966); 3 Davis

Administrative Law, § 19.07 at 40 (1958). See also the court

of appeals oe below, 365 F, 2d at 499 (App. B at 24b).

Califerma v. Federal Power Commi’n, 369 U.S. 482. (1962),

and United States v. Philadelphia Nat'l Bank, 374 U.S. 321

(1963), relied axpon by petitioners, are not contrary to the .

position of the courts below. Both are cases involving mer- ~_

- gets challenged under Section .7 of the Clayton Act. This

Court has recognized that the legislative policy. behind —

Section 7 requires reseryation to the courts of the resolution |

of the complex competitive issues presented by mergers.

California v. Federal Power Comm'n, 369 U.S. at 487-90. In

- Philadelphia Bank the appropriate agency proceeding had.

been completed prior. to the commencement of the antitrust

- agtion, thereby removing any possible need for admjnistra-

tive referral. 374 U:S. at 353. In California the trial court |

did not seek to utilize the primary jurisdiction doctrine.

Rather the defendants there sought to deprive the trial

court of jurisdictiqn’ by beginning a collateral administra-

5\It must be noted that respondents have not contended that the

‘Communications Act .“immunizes” them from the application

Bove antitrust laws, nor has — of the lower courts so held. ~

pondents have only urged and the lower court# have only

held that the FCC must first determine the justness, reason-

* ableness, and validity of the tariff provisions prohibiting Car- ©

. terfone interconnections before the courts can adjudicate the

. antitrust issues. 365 F. 2d at 498 (App. B. at 21b et seq) ; ;°250 F.

Supp. at 192 (App. A at 7a). The effect to be given the

. agency decision is to be determined when that issue.is reached

in the antitrust trial (365 F. 2d at 499, App. B at 24b, 25b), and .

no such question is now before the Court. :

- \

= S ves 14 :

tive proceeding. Thus neither case even.involved the pro-

' priety of the exercise of the doctrine of primary jurisdiction.

In summary, it is apparent from the face of the com-"

plaint that petitioners claims for damages and demand for

. injunction. inescapably raise the question of how and by.-

whom. the interconnection. of telephone channels is to be _

regulated. Petitioners’ claims involve a direct attack upon | ee

the respondents’ interconnection tariffs which have been) |

filed with and are subject to-the broad regulation of the =

__FCC. No clearer’ case requiring the application ofthe doc-

~ trine of primary jurisdiction can be imagined;and the care-

fully reasoned opinions of the trial court and of the‘court -

of appeals, affirming the trial court’s stay of the action

pending the FCC proceedings, were clearly correct.®

Cmts en Ne &B. Eps.

‘The grant or refusal of a preliminary injunction

was in the sound discretion of the trial, court.

- Regardless of the proprie yof the trial court’s finding

of primary jurisdiction in the FCC, the grant or refusal

of a preliminary injunction was in the sound discretion of |

6 On October 20, 1966, the Federal Communications Commission.

- took cognizance of the opinions of the two lower courts and upon

its own motion commenced a proceeding (FCC Docket No.

16942) to determine the reasonableness of the subject tariff pro-

visions as applied to the use of Carterfone (Appendix E). The.

‘prehearing conference was held on November 17, 1966, before ©

the Commission Hearing Examiner. appointed’to conduct the

proceeding. Following such conference an order was entered on

November. 21, 1966, specifying the procedures to be followed in Z

presenting evidence on the designated issues (Appendix F)._ oe

This order requires that the respondent telephone companies and .

the petitioners exchange copies of the sworn written testimony

to be put in exhibit form, lists of witnesses whose evidence will

be presented orally, and a brief statement as to the scope of each |

witnesses’ testimony. This evidence is to be directed to the first

three of the five issues previously specified by the commission.

The hearing is scheduled to commence on January 23, 1967 .

, (App. F).

- supra.

the trial court. The standard on review is abuse of diecre-

tion. "Yakus v. United States, 321 U.S..414 (1944); Nalco

Chemical Co. v. Hall, 347 F. 2d 90. (5th Cir. 1960) ; Home

Decorators, Ine. v. Herfort, 179 F. 2d 398 (5th Cir. 1950) ;

' United States v. Corrick, 298 U.S. 435 (1936); 3 Barron es,

Holteoff, Federal Practice ¢.Proceduré "91433 (Wright-.

ed. 1958). Consequently, at this stage of the proceedings

the merits of.a case are not usually to be decided. Tatum

v. Blackstock, 319 F. 2d 397 (5th Cir. 1963) ; Barnwell Drill-

ing Co. v. Sun Oil Co. 300 F. 2d 298 (5th Cir. 1962) ; Miami

‘Beach Federal Savings & Loan Ass’n v. Callander, 256 F. 2d

410 (5th Cir. 1958).-The trial°court in exercising his dis-

_..eretion.“balances the convenience of the parties and pos-

. sible i injuries to them according as they may be affected by

‘ the granting or withholding of the injunction. ” Vakus v.

United States, supra; Wooton v. Ohler, 303 F. 2d 759, 762

(5th Cir. 1962). Where important public interests are at

stake, especially -in the preliminary stage of. proceedings,

where neither the facts nor law are clearly in favor of the ©

_ moving parties,.a court should ‘withhold. injunctive relidf

until there,has been a-final determination ‘of the rights of

the parties, ‘though the postponement may be burdensome

to the plaintiff. Yakus v. United States, supra}. ‘Huard-

Steinheiser Inc. v. Henry, 280 F. 2d 79, 83 (6th Cir. 1960) ;

Miami Beach Federal nia & Loan Ass'n v. Callendar, °

Petitioners sought . through preliminary. injunction to

obtain affirmative relief which would have drastically al-

- tered the status quo. Petitioners had been advised for over

five years prior to the institution of this law suit that the

use of their device with the public utility telephone facilities

of respondent was contrary to the applicable interconnec-

tion tariff provisions (R. 112-14): Nonetheless, upon insti-

- tuting their suit, they requested that'a United States dis-

trict court by a preliminary order prohibit the enforcement.

oe ene *

and

Pra.

e : *

‘of such tariff provisions’ which have embodied the basie

interconnection. policy of the telephone industry evolved

through years of regulation and administrative proceedings.

Disruption of the status quo has long been held in disfavor

___ by. the courts. Celebrity, Inc: v. Trino, Inc., 264 F. 2d 956,

“$58 Uist Cir ~1959) ; Miami Beach Federal Savings. &- Loan

Ass'n V. Calendar, supra at 415. |

‘Both the district court, 250 F. Supp. at 192, and the court

of appeals, 356 F. 2d at 496, recognized thatthe nullifica-

tion of -the tariff by injunction prior to reference to the

FCC could disrupt the regulatory scheme contemplated by

the Communications Act of 1934 and create “operational .

chaos.” This would be clearly. contrary to the public in-

terest. ae eke @ os

The courts have held in antitrust wit that prelim: .

inary ‘injunction relief should be denied .where it would

_ inflict irreparable injury upon the enjoined parties. United |

States v. Standard Oil Co. .(Ind.), 1961 Trade Cases

170,131 (N.D. Calo 1961); United States v. FMC Gorp.,

218 F. Supp, 817, 832 (N.D. Cal. 1963);-app. dismissed for

‘want of juris., 321 F. 2d 534 (9th Cir. 1963), application for

preliminary injunction denied, by Goldberg, J., in chambers,

. 11 L. Ed. 2d 20 (1963). Clearly respondents would be irre-

parably. injured if forced to operate their nationwide sys- |

tem without an effective. interconnection tariff.

Further, petitioners’ allegations in support of their mo-

tion for a preliminary injunction have been limited to the

claim of lost sales. (See Petitioners’ i for Preliminary -

Injunction R. 92-98.) Petitioners have~never alleged or

offered to prove any facts tending tg show irreparable in-

jury. Section 16 of the Clayton Act, 15 U.S.C. § 26, the

controlling statute in private antitrust suits, explicitly re-

. quires that a plaintiff make “a showing that the danger of |

irreparable loss or damage is immediate.” The mere allega-

’ tion or showing of acts in violation of the antitrust laws —

eet sss nesses nen es Se Se

gives no standing to. obtain a preliminary injunction, be- -

cause the authority to seek injunctive reliéf to vindicate

the public interest by enforcing the antitrust laws is vested

exclusively in the Attorney General of the United States, .

§ 15 of the Clayton Act, 15 U.S.C. § 25. See eee States

orden Co., 347 U. S. 514, 518.

The foregoing facts and authorities conclusively demon-

eres that the trial court’s Gone of the preliminary i injunc-

. tion was ateren.

‘THE LOWER COURT’S ORDER DOES NOT FALL

WITHIN THE RESTRICTED CLASS OF CASES

APPEALABLE UNDER THE COLLATERAL ORDER

DOCTRINE.

Perhaps recognizing that the denial of their application —

for preliminary injunction presents merely the question .

whether the trial court abused its discretion, petitioners .

conditionally urge that the primary jurisdiction order*is pn

_ appealable under the collateral order doctrine. This Court

_has long recognized a small class of orders, which are off-

shoots of the principal litigation, as being appealable under —

thé collateral order doctrine. Respondents submit that peti-

_tioners are clearly wrong in* asserting that the primary

jurisdiction order falls within this class. ene: v. een

|‘ Industrial Loan Corp., 337 U.S. 541 (1949).

Cohen was a stockholder’ Ss derivative action iis federal - |

court jurisdiction was predicated solely on diversity * -of

citizenship. The trial court refused a ‘motion to-require the

plaintiff to post a bond to indemnify the defendants for

expenses and attorney’s fees if the plaintiff did not prevail .-

in the suit, such indemnity bend being required by state .

law. This Court held the order refusing to require the

indemnity bond as-a ‘predicate. for the prosecution of the ;

' suit was appealable because the defendants would lose the

protection of an indemnity bond forever if the case. were.

| . permitted. to proceed to final judgment on the merits with-

| out it. It held that. the order was appealable -because it .

_ would have “a final\ and irreparable effect on the rights: of

‘the parties.” Since the propriety, of the trial court’s appli; -

cation of the doctrine of primary, jurisdiction can be re-

_ viewed on appeal from final judgment, it. does not have “final

and irreparable effect on the rights ‘of the ‘parties.” This

ia:

| is demonstrated bythe stay. order itself, which provides

that “jurisdiction remains in the court to pass ultimately &

upon the antitrust nee! (B. 156). ; :

Clearly, the instant appeal does not involve a decision :

— within the “small class” of collateral orders which |

re “not an ingredient of: the cause of action.” The issue

ror primary jurisdiction in\the FCC and the trial court’s

stay on the basis thereof go to the very heart of petitioner’ e

action. Petitioners have not: suffered, nor can they show ©

irreparable injury if they do not obtain review immediately.

of the trial court’s order. Petitioners having failed to meet

_ . the strict requirements of the doctrine, this court is “with-

out jurisdiction to review the primary: jurisdiction decision

by use of the collateral, order doctrine. See, 6: Moore, Fed-

eral Practice, 54.14 (1965) ; 3 Barton & H oltzoff, Federal.

Practice and Procedure § 1193.3 (Wright ed. 1958); Note,

-Appealability i in the Federal Courts, 79 Harv. # Rev. 351,

364-67 (1962).

: 2 19 & 3

‘CONCLUSION

” For the foregoing reasons, it is seapectfelly submitted

that this petition for writ of certiorsst should be denied.

Respectfully submitted, |

: CHARLES Ryan

195 Broadway

ee New York, N. Y.

. ies cates WAYNE Bapurr.. '

ve eas ee ae

-. 1010 Pine Street

St. Louis, Missouri 63101

Epcar MayFieLp

308 South Akard -

Dallas, Texas ©

-Lznoy Jzp ms: eee

Riesiaa P. Kreton 5° @& |

POSSESS O TERETE HSER EEE SHEET EEEHEEEEEOEEEEEEEEEE SEES ESESESED

a | First City N ational Bank .

Building. . |

Houston, Texas 77002

Attorneys for Respondents

——— eee

“American Telephone and'Tele- |

on ue graph Company and South- .

western Bell rake ghar Com-

pany

| ‘Vinson, ELE1ns, Weems & Sranis Ly Pa ane

,. ° First City National Bank Building ate

Houston,. Texas 77002 ©

\ as” b-

—\\ Of Counsel for Respondents - ie

- \ Py ma ral | : ee | |

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ee aoe ew ee Fe ee eee ef ee — oe en ee ae ee nite Bee rel ae Le be Pe

: Petitioners 3 in said case:

-@*

° @ , Me PE, ; ee 20 |

sg CERTIFICATE OF SERVICE wen

? hihi J effers, an attorn¢y’ for Respohdents American r :

Telephone and Telegraph Company ; and Southwestern Bell’

Telephone’ Company, depose and say that I have this day |

. served copies of the foregoing Brief by mailing the. same

by United States certified mail, return receipt, requested,

postage prepaid, to the besten counsel of neate? for.

Bill Brice .

Ray Besing

tj wt oO |

' 2500 LTV .Tower Ris Gar Ss 1s ee

Dallas, Texas 75201 sae Pea a aie ae ’

William VanDerereek - i

® 3315-Daniels —

sioner: Texas- a

Leroy J offers

Subscribed ion sworn to Kefore me on this the 12th day

_ of December, 1966. Re ea

Lv]

: |Notary Public in and for 4

° Harris County, Texas

{)

“

. Ja ae

Me es APPENDIX A

ao ‘TEXAS.

see THOMAS ¥. CARTER AND:

_ CARTER ELECTRONICS CORPORATION,

ef & : ee yiaiahs Pjaintitts, .

| . v ae

ee TELEPHON E AND TELEGRAPH

CORFANT, ET AL,

: _ Defendants.

eee on aie Py! No, 3-1294 isonet!

ie .- rat wet °

“,. + ESTES, Chief Judge . - ;

February. 8, 1966

Plaintiffs, Thenies F. Carter — Carter Naas Cor- .

poration, claim that they manufacture and sell a°device

' called the “Carterforie,” which permits a person receiving. .

an incoming teléphone call to transmit such call from the

“ location received to another: location by the use of two-way

oy telephone call places the telephone receiver handset ona:

; ' cradle which forms part.of the Garterfone; and by ‘process

‘of induction, “without ‘any electrical connection,” the two- |

. way radio communication system is activated, and the tele- e

_ phone ‘¢aller ¢an communicate with another” person who |

_ May be located’ several miles away from the telephone re-

—~ *° eeiver. ‘Plaintiffs assert that defendants,. American Tele-

~phione and Telegraph Company, Southwestern Bell Tele-

_ phone Company and The General Telephone Company of

° * °

-_@ e artes ° ‘eo

Ate States Bistrict Court — 5

i LAE LTRT IE AMR enh SS Hah dl” a NPN oN dnd eR Ne eden RE a oe

Pin .2a

a . the Southwest, using their, monopoly powers over telephone Wee

communications, have conspired to and did prevent: plain-

tiffs.from. selling. their device by threats to prospective

. customers ‘that their ‘teléphone service: would be discon-

tinued. if they used plaintiffs’ device, thereby substantially

- lessening competition between the Carterfone and defend-

‘ants’ mobile radio-telephone units and tending to create and

further maintain. defendants’ monopoly over.such products, ~ |

all in violation of the antitrust.laws, 15 U.S.C. 1, 2, and 14,

for which eantite seek treble damages and injunctive

relief. *. + |

Portions of ATeT Tariff FCC No. 132, “Message Toll

Telephone Service,” are attached as Exhibit “A” to plain-

tiff's Complaint. Section 7 of the Tariff gives the Telephone

Company the right to suspend or terminate service if an-

' unauthorized device is “attathed to or connected with the

facilities. furnished by the Telephone Company, whether

physically, by induction or bcanints apa as per

in this Tariff. * |

Section 24 pathiichion miscellaneous devices provided by | |

the telephone customer “provided any such device so used . .

‘would not endanger. the safety of Telephone Company em- —

ployees or the public; damage, require change in or altera-

tion of, or involve direct electrical connection to, the equip-

Si ‘ment or other facilities of the Telephone Company; or.

interfere with the proper functioning of such equipment or —

facilities ; or impair the operation of the telephone system

or otherwise } injure the public in its use of the. Telephone

| Company’s services.” s & ran

In their cousplaint plaintiffs State ‘that:

. Although the Plaintiffs deny that such tariff j is *

a vaiia tariff and that such tariff is applicable to the «

Carterfone, regardless of its bet d ‘and its appii ica-

SIG eR RI pe ee mem gpa

.. eee

‘3a

_ tion, the Defendants and the aforementioned non-party

telephone companies have, as part of a common design

and scheme, in uniformly publishing and enforcing such

tariff, wrongfully used such tariff to accomplish a vio-

lation of the antitrust laWs of the United States... .”

Z pe |

The defendants have filed motions to dismiss on the:

grounds that primary jurisdiction lies with the Federal .

Communications Commission and that the complaint fails

_ to state a claim upon which relief can be granted. - .

The Communications Act (47 U.S.C. 151, et seq) was

- enacted for the stated purpose of regulating .interstate .

commerce in communication by wire and radio‘so as to make

.available “a rapid, efficient, nation-wide and world-wide”

communication service with adequate facilities at reason-

able charges and created the Federal Communications Com- «

mission to execute and enforce the provisions of the Act.

The Commission’s authority and responsibility encompass

_ “charges, practices, elassifiéativns, and regulations for and

in connection with such communication service” which must

be just and reasonable (47 U.S.C. 201(b)-) ¢ the commion

carrier. may. not make any unjust or unreasonable discrimi-

nation in charges or practices directly or indirectly by any

means or devices (47 U.S.C. 202(a)); no change may be

made ip such charges, classifications, regulations or prac-

tices except after thirty days’ notice to the Commission .

and to the public (47 U.S.C: 203(b).) ; telephone. companies

may not participate in communication unless schedules have

_ been filed and published in accordance with the eae \

_ of the Act (47 U.S.C. 203(c)); whenever a new charge, ‘\

classification, regulation or practice is filed with the Com- \

mission, the Commission may, upon ‘complaint or upon its

own initiative, “enter upon a hearing concerning the law-

fulness thereof” (47 U.S.C. 204) and prescribe the just

_ and reasonable charges or practices (47 U.S.C. 205) ;“(a)ny

da.

Deal

person jee complaining of anything done or omitted to

_ be done by any common carrier wee may apply to said Com-

mission (and) . , (i)f ... there shall appear to be any

complained of in such manner and by such means’‘as it

shall deem proper” (47 U.S.C. 208); and the Commission .

- has the’ power to require any telephone company “to. pro-.

vide itself with adequate facilities for the expeditious and °

reasonable crewed ‘for ‘uviebiteaiine said complaint, it shall

be. the duty.of the Commission to investigate the matters

efficient performance of its service as a common carrier”

"(47 U.S.C. 214 (d)). The’:Federal Communications Com-

'. mission administers a “pervasive regulatory scheme” for

telephone companies. When the antitrust policy of free

competition i is placed beside so pervasive a regulatory

scheme involving rates and practices of those providing

telephone service to the public, some resolution is obviously

- necessary. The regulatory agency which is expert in, and

‘responsible for, administering the controls should be given

. the opportunity to determine oll questions within its special

cuit has held i in McCleneghan v. Union Stock Y ards Co. of -

competence

“as an aid to mn courts in resolving federal ‘antitrust

policy and federal regulatory patterns into a cohésive

- whole. . . . Accordingly, this Court consistently held

that when rates and practices relating thereto were

' challenged under the antitrust laws, the agencies had

primary jurisdiction to consider the . reasonableness

of such rates and practices in the light of the many

relevant factors including alleged antitrust violations,

for otherwise sporadic action by federal courts would |

disrupt an agency’s delicate regulatory. scheme, and.

-would throw existing rate structures out of balance.”

* United States v, R. C. A., 358 U.S. 334, 348.

~sS ;

' In an oman saretel and comprehensive opinion ap-

plying the doctrine of primary jurisdiction, the Eighth*Cir-

’

ieee ee A SSR LE ALTE DET Me OR, Care

Omaha, 298 F. 2d 659 (1962), a private: antitrust‘action ©

' aGainst the stockyards company for treble damages; that

the Court should refuse to assume jurisdiction as to an

issue subject to the Secretary of Agriculture’s. power of

regulation under the Packers and Stockyards Act, 7

U.S.C.A. $§ 201-203 and 205-217(a), but held that the Court

should retain jurisdiction pending proceedings before the

- Secretary. Provisions of the Packers and Stockyards Act

requiring exercise of primary jurisdiction by the Secretary:

of Agriculture are analogous to those in the Communica-.

- tions Act. et :

McCleneghan, 298° F. 2d 659, 665, 666, contains the follow-

ing Supreme Court ‘pronouncements regarding primary

jurisdiction of administrative bodies: — :

“Whenever a rate, rule, or practice is attacked ‘as -

. » unreasonable or as unjustly discriminatory, there must

be preliminary resort to the Commission. . . . It is

* required because the inquiry is essentially one of fact .

and of discretion in technical matters; and uniformity

can be secured only if its determination is left to the

Commission. ...’” Great Northern R. Co. v. Merchants -

Elevator Co., 1922, 259 U.S. 285, 291; -

; waa * * Sas

“<The doctrine of primary jurisdiction, like the rule

'- requiring exhaustion of administrative ‘remedies, is

concerned with. promoting proper relationships be- -

tween the courts and administrative agencies charged

with particular regulatory duties... . “Primary juris-

diction”... . comes into play whenever enforcement of

the claim requires the resolution of issues which, under

a regulatory scheme, have been placed within the special. ©

_ competence of ‘an administrative body; in such a case

the judicial process is suspended pending referral of

such issues to. the administrative body for its views.

...’” United States v. Western Pac. R. Co., 1956, 352

_- U8. 59, 63-64; and

@ v4

ete es |

ar |

7 .* 2

uy Asi leoneien created by Censined for regalating

the subject matter should not be passed over. This is

so even though the facts after they have been appraised

by specialized competence. serve aS a premise for legal

consequences to be judicially defined. : . .’’- Far East

Conference v. United States (an antitrust bse 1952, .

342 u: S. 570, 574-575. 3

Onastiies with respect to the “value and qualit? of tele-

phone service” resulting from interconnections as well as .

whether the tariff provisions were reasonable and in the

- public interest (Peters Sunset Beach v. Northwestern Bell

Tel. Co., 60 PUR 3d 363, 370 (Minn. ‘R. R. and Warehouse _

Comm’n., 1965) ) and whether there i is any deterioration in a

the efficiency of service because ‘of the intergonnections

(City of Los Angeles v.-Southern California Telephone -

Company, 2 PUR (N.S.) 247 (California R. R. Commission, .

1933) ) have been resolved in proceedings initiated before |

administrative bodies. . ; ,

‘Determinations. that: regulatory. tariffs are just, réason-

able and valid permeate every aspect of telephone communi-.

cations regulation. The sections of the AT&T Tariff quoted

- above'leave no doubt that the validity, application and effect.

of this tariff involve technical and complex matters within

the special competence and “expertise” of the Federal Com-

_ munications Commission. The revenues the telephone com-_

panies receive from mobile radio-telephone communication ~

services, which plaintiffs say compete with their device, may

‘be considered in setting rates for the Telephone Company. °

Thus, any action by this Court bypassing the FCC might

disrupt that agency’s delicate regulatory scheme and throw

existing rate structures out of balance.

The antitrust laws and the precise ingredients .of this

case are among the relevant factors for FCC consideration _

, Va

in determining the justness, reasonableness, validity, ap-

plication and effect of the fariff and practices here involved:

7 _.McCleneghan v. Union’ Stock Yards Co. of Omaha, supra. |

“(R)esort to the courts is still open after the agency has

‘acted, (and) the doctrine (of primary jurisdiction) applies. 3

even if the agency has no jurisdiction to grant the relief

sought.” 3 Davis, Administrative Law Treatise, 1958, §19.07.

‘Accordingly, the defendants’ api to Dismiss should be:

and is denied.

The Court i is rat the opinion, however, that primary juris-

diction in a case of this kind to resolve all questions relating’

to the. justness; reasonableness, validity and effect of the

. tariff and practices complained of is vested im the Federal.

. Comunications Commission, the agency charged with ‘main- |

tenance of a pervasive regulatory system over the telephone —

industry, and that all proceedings herein should be stayed .

and held in abeyance* pending the conclusion of appropriate

- administrative proceedings initiated before the’ Federal °

Comunications Commission and that jurisdiction remains ote

in the ‘Court to pass ultimately upon the antitrust i issues. |

It i is 80 ORDERED

s/s. Joe E: Estes

UNITED STATES DISTRICT -

| JUDGE 3

* Louisville & Nashville Railroad Co. v. Knox Hiniies Corp., 343

F. 2d 887 (5 Cir. 1965) ; McCleneghan v. Union Stock Yards

Co. of Omaha, 298 F. a 659 (8 Cir., — -

San 1°

\ a)

S e wee

ieee B-

ee THE

Monten States Court of Appeals

FOR ‘THE FIFTH CIRCUIT.

No. 23556 \ °

THOMAS F. CARTER ind CARTER ELECTRONICS

CORPORATION © “4

‘Appellants,

_, versus ns

AMERICAN TELEPHONE & TELEGRAPH

COMPANY; ET AL,

nae Pee fests

. °°

| ‘Appeals Pah the » United States District Court for eas

‘Northern District of Tewas. 4

No. 23557

THOMAS F. CARTER “ia CARTER ELECTRONICS

CORPORATION,

Appellants,

_ versus - 3

HONORABLE JOE E. ESTES, Chief Judge, United

_ States District Court, Northern District of Texas,

- ET AL, é

Appellees.

M or ¥

LSS aoe haat RS Ree Sy |

SER de I RT NS SARE CHER OU AL eS Ry

. . S

ce eee eet

eos

On Petition for Writ of Mandamus to the United States

District Court for the Northern District of Texas.

; 2 g i

. August 17, 1966.)

Before BROWN and COLEMAN, Circuit J udges, and

DAWKINS, District J udge. oa

BROWN, Circuit Judge: At issue here is whether a Dis-

‘trict Court in a’ private antitrust action for triple damages

and injunctive relief should invoke the doctrine of primary

jurisdiction to refer a question of tariff validity to the regu-

_ latory agency. It comes to us froma denial of a preliminary

injunction. We agree with the District Court’s primary

jurisdiction reference to the Federal Communications Com-

mission and affirm.. }

: ; ve

At the outset we conclude that we have jurisdiction of

‘the appeal under 28 USCA §1292(a)(1) ‘as a denial of a

preliminary injunction and the Telephone Company’s mo-

_tion to dismiss the appeal must accordingly be denied. ©

We need only briefly sketch the chronology. The com-

. plaint, filed November 29; 1965, was accompanied by a

-separate formal motion for: preliminary injunction. The _

plaintiffs-appellants requested an early setting which would —

include the application for preliminary injunction. There-

' after by an exchange of letters among counsel and the

- Court and an informal pretrial conference in mid-Decem- ,

ber, the Judge extended the time for the defendants’ respon-

sive motions or answers to Ss anuary 14, 1966. The defend-

ants filed a motion to dismiss on the dual ground (a) assert-

- ing primary jurisdiction in the FCC and (b) failure to

state a claim! The Court subsequently fixed a hearing for

February 7, 1966, and by the Court’s direction, this hearing

; 6, mee a

was to be (and was) confined.to the motions to dismiss, At

_.the conclusion. of the extended hearing February 7, the |

Judge announced orally his decision denying the ‘motion to

dismiss for failure to state a claim, but holding the case

in abeyance until determination of the tariff’s validity by

the FCC. This was followed February 8 by a formal written

‘memorandum order; Subsequently on February 16, the

plaintiffs-appellants filed separate motions for rehearing ~

and for a hearing on the motion for preliminary injunction.

se, On February 24, each motion. was denied.’

Thus there is no doubt that both by the initial prayer in. .

| thy complaint and by formal motion, the plaintiffs-appel-—

- lants ‘sought a preliminary injunction. Equally uncontra-

dicted is the faét that such injunction was not grarited. But,

appellees argue, it is not that simple. Og tHeir theory, the

Court having on February 8 put the case in abeyance pend-.

ing reference to the FCO, the application for preliminary

injunction was but a part of the case thus deferred, for the

Court did not deny the préliminary injunction, only the —

hearing thereori. Consequently, the argument runs, the for-

- mal motion for a. preliminary injunction was but a paper .

means of casting’ the primary jurisdiction reference rnling

into an appealable: form and not, as it réally ‘was, a mere

- stay order. This rests, in turn, on the generally accepted

ue proposition that orders merely staying further action pend: ae

= ing some event are not generally appealable.’

_—— <

1 The order as to preliminary injunction stated : ay

“Having duly considered, Plaintiffs’ Motion for Hearing

‘on Preliminary. Injunction filed herein on Fébruary 16, 1966,

the Court-is of the opinion that for the reasons stated in its

Memorandum Order enteied herein on February 8, 1966,

such Motion should be and is hereby DENIED.”

- 2 Republic of China vy: National City Bank, 2 Cir., 1952, 194 F.

2d 170; Brande v. S & S.Mach. Co., 2 Cir., 1958, 252 F. "2d 297;

Internationah Nickel Co. v. Martin ts Barry, Inc., 4 Cir., 1953, 7

204 F, 2d 583 ; United, Gas Pipeline Co. v. ‘Tyler Gas Serv. Co.,

re 1 ee

/ ra

\ 2

Ps an, |.

pe KS

,, ie a

tee Te

AAS eee Saree

On this sepa the J Tiilige Was simply declining to en- *

- tertain. any requests. until after the reference. But we read °

‘it differently. In the colloquy at the end-of the February 7 ,

~ hearing the Judge made. it plain that the plaintiffs could .

* file'and he would consider all motions desired. The Judge:

did not treat-the reference order. asa ground merely for not. -

re considering the request ‘for’ preliminary injunction. Rather,

--he. treated the ‘reference. order. gs the reason why the in-

junction’ should be denied. It’is, of course, the denial of a

> preliminary ‘injunction, not the validity’ of ‘the reasons

therefor, which triggers ‘the: interlocutory appeal as.a mat-

ter of right under § 1292( a) (1)..Our conclusion is not in any,

eae Airlines, Inc. For

“certs: denied; :346 0 S-806

a ‘Allied Air Freight: the unsuccessful plaintiffs in a triple

n, 3 Cir.;,1953, 204 -F, 24 230,

. damage action. Q ot injunction) Sought. to make- thestay a. :

, Vicarious granting of a preliminary injunction. On familiar

{pees see note 2, supra, this would not work. In Amer-:

"ican ‘ Airlines the defendant sought te. appeal from a. denial

“of its motion to-dismiss on the ground that: primary. juris-

diction was in the CAB, Not.unexpectedly the Court of Ap-,

- peals: found Bevappeslable brtier and also denied relief nae :

A -s--

-<mandémns.. Moe Meg Me fees

"The: serious question of grimaty jurisdiction reference i is et

theretare properly before us

“5 Gir, 1957, 247 F.. 2d 681, ant. denied, 355, US. 895, a

8: -Ot. "263, 2 ‘L. Ed. 2d 193;. Jackson Brewing Co. v. Clarke,

5 Cir., 1962, 303 .F. 2d 844, cert. denied, 371 U.S. 891, 83 S. Ct.

190, 9 L. Ed. 24 124; United States v. Richardson’, ad, Cir, 1953, _

204 F. 2d 552; 6 ‘Moore, Federal Practice. § 54.07.

oe bila

3 Phe companion case f for mandamus: (No. 23 557)" is ‘ditiinad

__ a8_is the effort te appeal the February 8 stay order after denial

* "of checmaenes by the trial ‘Court under 28 USCA. TRO)..

‘

ee iag *

rae |

°. «

's sense at odds with Allied Air Freight; Inc.'v. Pan Ameri- * a

* Can World Airways, 2 Cir.; +4965, 340 F:: 2d 160, cert::de- ~

nied, 3 81 U.S. 942, 85 §.Ct. 1560, 14 L: Ed. 2d 683, or Amer

74 st 5h 98 L. Ed: 336: In

ae.

_ In analyzig’the plaintiffs’ complaint, it, is well to bear :

in mind their’ blunt, bold position. The appellants claim a

‘that the trial Court by applying. the doctrine ‘of primary’. — -

jurisdiction has effectively: ‘precluded them from obtaining

the antitrust_relief ‘which they seek. Further, it is their

-position that the. doctrine of primary jurisdiction does not. |

‘apply because administrative agency approval does. not ,

immunize the Telephone Company’ $ ¢onduct from the opera-

___tion of the antitrust laws, especially where the violation :

. of those laws.i is claimed to be per se since an administrative | |

* determination of reasonableness - would be. ‘irrelevant, and

because there are no issues relevant to a disposition of the

case at bar which require administrative expertise for their

oe determination. “4 ‘ .

The complaint maid triple damages wad injunctive ‘relief

| ‘under the antitrust laws. 15 ‘USCA §§ 15, 22: Only two

... defendants were named and served, A.T.&T. and General.

- These two along with 26 othet named, but nonparty, tele-

. phone companies, 19 of which are ‘owned-and controlled by

A.T.&T. were alleged to: have jointly and severally con-

spired as a part of a common design to prevent the plaintiffs

jo marketing and distributing their Carterphone. device..

“With: ‘the flexibilit} given § 1292(b) by this \Cireuit, ‘Winlifos

ae sh . Some others, Hadjipateras v. Pacifica S.A., 5 Cir., 1961, 290. -

' F. 2d 697, 1962 AMC 1417, Agricultural Trans. Ass'n. v. King, ee

5 Cir., 1965, 349 F. 2d 873; Ex parte Tokyo Marine & Fire Ins. ,

_ Co., Ltd., 5 ‘Cir., ‘1963, 322 F. 2d 113, the interlocutory certifi-- - _

~ eation method has many attractions in primary jurisdiction

refererice situations. Since the Court of Appeals must affirma-

tively allow a 1 (b) appeal, it affords a very early look-see

as.to whether in given situation the’ pecans. referenk order ,

will ultiraately be sustained in all likelihood. .

“ American Telephone and Telegraph h Company, and the General.

Telephone Company of the South thwest

baa)

The Carterphone, developea by the individual plaintiff -

. Carter and manufactured and distributed by the corporate .

. plaintiff, Carter Electronics,"is a device for use with the. °

traditional telephone handset. When in use, the telephone:

receiver handset is placed on a cradle which forms part of

the Carterphone unit and by-the process of induction, with- |

out any electrical connection or wiring or physical attach-

ment, the Carterphone unit activates a two-way radio com- |

. munication system, to pérmit the telephoné caller to con-—

_ verse with another person who.may be locatéd miles away’

from the telephone receiver handset. Similarly, the device

works in the opposite direction : to permit further trans-

mission by land-lines of voice signals originating me mobile

radio transmitter.

- A substantial market throughout the United States has

been developed competing in the product-relevant-market

of the manufacture and sale of devices permitting private

bseribers from regulated telephone companies to trans-

~ mit telephone calls to and from points beyond the handset.

Despite this economic demand the defendant Telephone

Companies acting in concert with one or more or all of the

named nonparties have taken concerted action to.monopo-

lize interstate commerce. These Telephone Companies sell

and lease mobile radio-telephone units to their subscribers

throughout the United States. These mobile units perform

_ a function essentially similar to that afforded by the Cartér-

phone and thus both are directly competitive. In violation -

of the antitrust laws, the Telephone Companies: are under-

_ taking to exclude the’ plaintiffs and other similar competi-

' tors from manufacturing or selling devices which would

compete with Telephone Company-furnished mobile units.

To bring this about the Telephone Companies as sellers :

and lessors have’ required private subscribers, as gp ho .

and lessees, not’ to deal with the ia eat unit. Such *

cs)

requirements, conditions and understandings constitute

concerted action which have no reasonable purpose - bet

' which do have a damaging effect on competition. The Tele-

phone Companies with the specific intent to restrain trade

and commerce have deliberately and purposefully issued

instructions to their agents and those of the nonparty Tele-

‘ phone Companies’to forbid the use of the Carterphone de-.

vice by their private subscriber customers. Each of the

Telephone Companies, due to its size and economic re-

_ sources, has both the power to control the prices of com-*

petitive communication devices and the power( to,,exclude

competitors. The Telephone Companies in conspiracy and °

‘ combination with other as well as the named non-party

companies have’ exercised their economic power within the °

relevant market to require their customers to refrain from

purchasing or using the Carterphone.

‘At this point in the complaint, the plaintiffs, ies we.

think, anticipated the matter of regulatory fariffs. They

expressly allege in Paragraph XI that the Telephone Com- |

panies, “in order to accomplish the violation of the federal . -

antitrust laws heretofore set forth, have published a regu-

_ latory tariff which purports to prevent the use of a device

similar to the Carterphone * * *. Such tariffs are similar

or identical to * * * AT&T tariff FCC-No. 132,” a copy of

which was annexed to the complaint “and incorporated

= herein.”*

5 5 Tariff FCC No. 132:

“MESSAGE TOLL TELEPHONE SERVICE

“B. GENERAL REGULATIONS (Cont’d) aye

Pia Unauthorized Attachments or Connections

“No equipment, apparatus, circuit or device not

furnished by the Telephone Company shall be. -

attached to or connected with the facilities furn-

ished by the Telephone Company, whether: physi-

ae eally, by induction or otherwise, except as provided

: 4 _ inthis Tariff, In case any such unauthorized attach-

: ment or connection ‘is py: ™ sacred Com-

Sb ie tn ee

' The plaintiffs then go on to allege that “although the —

Plaintiffs deny that such tariff is a valid tariff and that

‘such tariff is applicable to the Carterphone, regardless of

its validity and its application,” the Telephone Companies

“have, as a part ‘of a@ common design and scheme, in uni- .

formly publishing and enforcing such tariff, wrongfully

used such tariff to accomplish a violation of the antitrust

laws of the United States..Such tariff does not and may not

authorize or excuse the aforementioned violation of the

antitrust laws i i

pany shall have the right to remove or discBanect

the same; or to suspend the service during the

~ eontinuance ‘of said attachment or connection ; Or.

-to terminate the service.” —

Though the tariff was amended in response to ‘the Commiission’s

- order in Hush-A-Phone Corp. v. American Tel. & Tel. Co., No. -. :

9189, FCC, Feb. 6, 1957, following the decision in Hush-A-Phone

‘ y, United States, D.C. Cir., 1956, 238 F.. 2d 266, to permit the

attachment of devices similar to the Hush- A-Phone for the

convenience of the user, the prohibition on nonfurnished equip- —

~- ment such as the Carterphone was carried forward in the con- .

cluding paragraph of Section B. 24:

“Exeept as otherwise provided. in ‘this tariff, nothing

herein: shall be construed to permit the use of a recording

device, or of a device to interconnect any line or channel —

of the Telephone Company with any other communications |

: line or-channel of the Company-or of any other person.”

See FCC Public Notice No. 57-518, May 15,-1957. :

It rounds out the tariffese that ‘the interconnection privileges

“otherwise provided in. this tariff” (§ B.24, supra) do not pur- —

_ port to. touch the Carterphone or similar "devices. Tariff FCC

No. 132 sections which allow interconnections under certain:con-

ditions are as follows: § B.25 (connections with facilities of

- power, pipe line, and railroad companies pursuant to Tariff

‘ FCC No. 134) ; § B.26 (connections with experimental satellite -

facilities through connecting equipment provided by the tele-

phone company) ; § B.27 (connection with N.A.S.A. installa-

tions pursuant to Tariff C No. 134); § B.28 (connections with

‘eertain facilities of the U. S.. Army, Navy, and Air Force pro:

vided the appropriate See etary of such Department certifies -

that connection is required: by reasons of military necessity) ;

§ J (service through miscellaneous common carriers wiles

telephone on intraexchange er

Ped

Then followed a brief description of the damage suffered. | |

because a large number of orders for Carterphones had

been tancelled by customers and dealers due to the conduct :

_ of the Telephone Companies. The formal prayer for in-

junctive relief, broad and sweeping in its terms, would for-

bid enforcement or application of Tariff No. 132.°

On the basis of the complaint, tariffs; regulations, and

agency ordérs of which it could take judicial knowledge,”

the District Court held that “primary. jurisdiction” is “vest-

ed in the’ FCC “to resolve all’ questions relating to the '

_ justness, reasonableness, validity, .and effect of the tariff

and practices complained of.” The Court accordingly stayed ~ :

further proceedings but recognized “that jurisdiction: re-

mains in the Court to pass ultimately up6h the .antitrust

issues.” ‘3 3

ees Oe

Til.

No matter from what vantage viewed, the conclusion is _

unerringly indicated that this was a case permitting, indeed

‘Tequiring, primary jurisdiction reference to the FCC.

Our principal difficulty in the case comes from the fact,

made quite clear in the probing from the bench, that we

simply ‘do not understand the theories the plaintiffs so

earnestly press. We can accept their insistence that the

- 6 The prayer was for a permanent order “enjoining the defend:

ants. * * * from interfering with, harassing or prevéhting. the

‘Sale and distribution of .the Carterphone * * *”. and “from

' threatening or intimidating any customer or prospective cus-

- tomer * * * with the curtailment * * * or removal of such

customers’ telephone service and from “directly or indirectly

Suggesting or advising the customers, prospective customers,

and users of the Carterphone device that the use of such device

may subject said persons * * * to any loss of * * * the telephone

service provided by * * * [the telephone companies] * * *.”

7 Interstate Natural Gas Co. v. Southern Cal. Gas Co., 9 Cir.,

1953, 209 F. 2d 380; Fletcher v. Jones, D.C. Cir., 1939, 105

F. 2058, cert. denied, 308 U.S. 555, 60 S. Ct. 116, 84 L. Ed. 467;

Greeson v. Imperial Irr. Dist., 9 Cir., 1932, 59 F. 2d 529: .

- . 10b

| Telephone Ceaneabin read the complaint too narrowly i in

their argumentative effort. to confine its total claim to Par.

XI, see text accompanying note 5, supra, which ofaraaneevaly %

brings in and’ challenges AT&T Tariff FCO No. 132,'note , '

_5, supra. But. both from the formal allegations of the com-.

plaint, and more so from a broader consideration of the

very nature of the case,® the tariff is inescapably at the

center of this controversy. ‘3 ee ae ee

_ It is here that their position becomes an enigma wrigned

in.a mystery. After formally denying validity or inappliea-

‘bility of Tariff No. 132 in Par. XI (note 5; supra), in a

number of ways and at eridless times throughout the

briefs to us they assert that they “have not attacked the -—

_ reasonableness or validity” of the tariff’“as a regulatory

measure,” and they “are quite content to assume, for the |

purposes of this appeal, that the tariff is valid under

: agency standards, but” they add, “not under antitrust.

8 The primary jurindietion eeiind? is not t te Be approached with -

any narrow, technical pleading point of view. As is well stated

by McGovern, Types of Questions Over Which Administrative

‘Agencies Do Not Have Primary Jurisdiction, 13 ABA, Anti-

trust Section 57, 66-67 (1958) :

“The doctrine of primary jurisdiction was not conceived

as a shield to relieve regulated industries from all respon-

sibility under the antitrust laws for their unlawful conduct.

‘But neither does the addition of the epithet - ‘conspiracy’ to

- an agreement for concerted activity approved by an agency

automatically convert an otherwise lawful agreement into an

unlawful contract and combination under the antitrust laws. |

The purpose of the doctrine of primary jurisdiction in’ this

field is not merely .to place a premium upon pleading skills —

. but rather to évaluate whether the critical issues posed in

- the antitrust case ‘actually fall within the policymaking

- competence of the regulatory agency.”

- Indeed,. what. was denominated a motion to dismiss because

primary jurisdiction was in the FCC was, in effect, transmuted

by the Court into a motion to require,‘and a stay pending,

reference to the FCC. See 3 Davis, ee Law §: 19. 07,

at 42-44 (1958 | ed.).

1b.

. standards.”® Struggling as we do to divine their theory,

. we see two possibilities. The first is their repeated in-

/Sistence that, as pleaded, this is a case of a concerted |

‘refusal to deal, and as. such is a classic per se violation —

of the antitrust laws. The second, perhaps, is that this

is an instance of the Arnall attack on the primary monopo-

listie purpose of an industr¥-wide adoption of a restrictive

tariff. Georgia v. Pennsylvania R.R., 1945, 324 U.S. 439,

65 §.Ct. 716, 89 L.Ed. 1051. But neither of these, alone or

together, rule out the tariff as a critical issue. .

As to-the first, the’ theory is really question-begging,

‘for while concerted refusal to deal is a per se violation,’

the extent and nature of the regulation of a regulated

* industry may make such concerted action legal.11 Keogh: v..

® Appellants’ Brief, -p. 31. ;

10 Appellants vigorously press: Radiant Burners, Inc. v. Peoples

Gas, Light & Coke Co., 1961, 364 U.S. 656, 81 S. Ct. 365, 5,

L. Ed. 2d 358; Klors, Inc. v. Broadway Hale Stores, 1959, 359

U.S. 207, 79 S. Ct. 705, 3 L. Ed. 2d 741; Eastern States Retail

Lumber Dealers Ass’n v. United States, 1914, 234 U.S. 600, 34 ©

« §. Ct. 951, 58 L. Ed. 1490; Associated Press v. United States,

1945, 326 U.S. 1, 65 S. Ct. 1416, 89 L. Ed. 2013; Fashion. Orig-

inators Guild of America v. FTC, 1941, 312 U.S. 457, 64,8. Ct.

703, 85 L. Ed. 949; affirming 2d Cir. 1940: —

~ 11In Silver v. New York Stock Exchange, 1963, 373 U.S. 341,

83 S. Ct. 1246, 10 L. Ed. 2d 389, the Supreme Court made this .

clear beyond doubt. First, the Court recognized that under the

ceases relied on by appellants here, see note 10, supra, —

“It is plain, to begin with, that removal of the wires by

collective action of the Exchange and its members would, had.

it occurred in a context free from other federal regulation,’

: constitute a per se violation of § 1 of the Sherman Act.” ,

373 U.S. at 347, 83 S. Ct. at. 1252, 10 L. Ed. 2d at 394, but the

Court went on to state that “in this case, however, the presence

of another statutory scheme, that of the Securities Exchange -

Act of 1934, means that such @ conclusion is only the beginning,

not the end, of inquiry,”: 373 U.S. at 349, 88.8. Ct. at 1252, 10

iL. Ed. 2d at 395. Pinpointing he problem as being one of

reconciling the aims of the antitrust laws with the policies of |

the Securities Exchange Act, after analyzing.these policies the —

ead

ee 12b

Chicago &: Northwestern Ry., 1922, 260 U.S. 156, 162, 43

S.Ct. 47, 49, 67 L.Ed. 183, 187. This contention in ‘effect _

therefore anticipates the ultimate detision of the FCC?

‘

Court found no legislative intention to immunize completely the —

exchange’ s actions fromthe operation of the antitrust laws. See

note 25, infra. But the Court made clear that the absence of

total immunity does not automatically mean that. actions in a

regulated industry are to bé judged by per se standards in

_ applying the antitrust laws: .

“But, under the aegis of the rule of reason, traditional

antitrust concepts are flexible enough to permit: the Ex- .

» change sufficient ‘breathing space :within which to carry out

‘ the mandate of the Securities Exchange Act. * * * Although

* * * the statutory scheme of that Act is not sufficiently ~

- pervasive to create a total exemption. from the antitrust laws,

* * * it is also. true that particular instances of exchange

self-regulation which fall within the scope and purposes of

the Securities Exchange Act may be regarded as justified ; in.

answer to the assertion of an antitrust claim.”

373. U.S. at 360-61, 83'S. Ct. at 1259, 10 L. Ed. 2d at 402.

12 When used throughout the expression FCC order, etc. refers

' to the first! decision thereon after appropriate judicial review.

_ There are two methods of obtaining judicial review of an FCC

decision provided by the Communications Act, 47 USCA § 402.

- For reference to this special statutory review provision and for

supplementary methods of review, see §10(b) of the Admin-

istrative Procedure Act, 5 USCA §1009(b). Under § 402 the

* method of review depends- on -the kind of decision sought to

have reviewed. Decisions granting, denying, modifying, ‘and

‘revoking designated permits and licenses, and § 312 cease. and

desist orders.are reviewable exclusively by the Court of Appeals

for the District of Columbia. 47 USCA § 402(b). Proceedings

seeking to enjoin, set aside, annul, or suspend any other orders

of the FCC must be brought pursuant to the Administrative

Orders Review Act of 1950 (Hobbs. Act), 5 US § 1031 et

seq., 47 USCA § 402(a), in the circuit where the petitioner re- —

, sides or has its principal office or in the District of Columbia

. Cireuit. 5 USCA § 1033. See generally 3 Davis, Administrative ~

law § 23.03, at 305. It thus appears that judicial review of the ~ ©

FCC’s determination of the validity and applicability of Tariff

No. 132 would follow this second method. See, e.g., Hush-A-

Phona:v. United States, supra. Therefore, it is possible that the

‘review of the FCC’s determination and the review of the Anti-

trust Court’s subsequent decision may be by different Courts of

Appeals. This is to be contrasted. to the situation where a Dis-.

—_—-

“13b

and later the Antitrust Court as to the validity é int ‘signifi-

~ cance of the tariff.12 The same is really true as to the second,

., Since it is difficult to believe that the FCO, from the com-

: munication-utility-point of view, could uphold as “just and

-sreasonable,” 47 USCA §201(b), 205, a tariff proved .to

have been brought into being ‘by 4 concerted action whose

‘aim was monopolistic, not the maintenance or. improvement

of telephone service.

The extravagant brandishing of antitrustees, the repi-

- tition of inflammatory epithets of combination, conspiracy,

_ concerted action, monopolistic aim, the frequent incantation

of the antitrust laws, and the fervent desire to keep the

ease for jury resolution in a Federal Court cannot either

extinguish’ the Communications Act of 1934 or erase Tariff

No. 132 as a significant, if not decisive, factor. it

The starting point is the Communications: Act of. 1934, |

47 USCA § 151 et seq. The National communications policy

is broadly stated “to make available * * * to all the people

of the United States a rapid, efficient, nation-wide and.

world-wide wire and radio communication service with ade- .

* quate facilities at reasonable charges * * *,” 47 USCA § 151.

trict Court refers a matter to the ICC under the primary juris- -

diction doctrine. There the statute expressly provides that “the

court which-referred the question or issue shall have exclusive

jurisdiction of a civil action to enforce, enjoin, set aside, annul, .

or suspend *\* * any order * * * arising. gut of such referral:”

28 USCA §.1336; see Agricultural Transp. Ass’n v. acacd 5 Cir.,

1965, 349 F. 2d 873, 885 n. 35.

13 See 3 Davis, Administrative Law § 19.05, at 25 :

“* * * [T]hé problem i¢ not one of application of the anti-

-’ trust laws but is one of-accommodation of the antitrust pol-

iey to the regulatory policy. * * * The courts are obviously

well equipped to make initial decisions involving applica- -.

tion of the antirust policy. But, before the particular Tegu- |

latory agency has defined the particular regulatory policy in ~ .

.the particular case, the courts are not well equipped to make

initial decisions involving accommodation of the antitrust

policy. to the ed ow oT he ‘

- -hensive regulation:

The execution of the statutory scheme is committed to the —

FCC. And this structure, with. infinite’ detail, indertakes

to subject communication utilities to refined and compre-

Do achieve these goals,.the Communications Act grants

a broad range of powers to the Federal Communications

Commission.. 47 USCA §4§ 201-222. The Commission has

the. power to_require a telephone company to furnish —

“service upon reasonable request therefor,” and, where the

‘Commission “finds such ‘action necessary or desirable in

the public interest,” to require interconnection with other

carriers at rates sét by the Commission after opportunity

for hearing. 47.USCA §201(a). “All charges, practices,

| classifications, and regulations” of telephone companies

“shall ‘be just and reasonable ;” “anjust or unreasonable”

charges are unlawful, 47 USCA § 201(b). The Commission

has the power to prescribe such rules and regulations as

are “necessary in the public interest” to carry out the pro-

visions of the Act. 47 USCA § 201(b). To this end, the Com-

mission has promulgated 493 pages of regulations governing

' the common carrier’ services provided by telephone com- _

' panies. 47 C.F.R., Parts 20-69. It is unlawful for a telephone. ~

company to disorinninate's in any “unjust or unreasonable”

manner in its “charges, practices, classifications, regula-

tions, facilities, or services.” 47 USCA §202(a). Each >

telephone company is required to file with the Commission,

and keep open for public inspection, tariffs setting forth

its ‘charges, classifications, regulations, and practices. 47

_ USCA § 203(a). Such- tariffs must be followed until such

time as they are amended in the manner provided by the,

statute. 47, USCA § 203(b). A: telephone company may not.

provide service unless tariffs are filed covering such service

. and the company may not deviate from the rates, classifica-

-15b-

“tions; regulations or practices éontatned in the’ tariffs so ea

filed. 47 USCA § 203(¢). Dalene Kee Ciara kM

The FCC has’ the power anal duty to ‘examine all tariffs

aS filed and may either on comiplaint or on its own initiative

: determine and prescribe what charges, classifications, regu-

- “fations, and practices-are “just, fair, and reasonable” and

aretp be thereafter followed by the telephone company in

question. 47 USCA § 205(a). The Commission is given ex-

tensive power to assess the value of the facilities of tele-

phone companies. 47. USCA § 213. The Commission has the

power to order a telephone company to provide additional —

f facilities for the performance of its duties as a public utility, .

-af such addition is “in the interest of public convenience and

necessity” or “the expense involved therein will not impair

-the ability of the carrier to perform its duty to the public.”

47 USCA § 214(d). However, a carrier does not have the

right to, extend its’ lines unless the Commission. authorizes

it to do so by the issuance of a certificate of: public conven-

ience and necessity. 47 USCA § 214(a). The Commission has .

power to examine transactions entered into by any. comnion

carrier which may affect the carrier’s charges or services..

47 USCA § 215 (a), The Commission has the specific psig

to keep informed as to “technical developments and im- ,

provements in wire and radio communication *** to the end

that the benefit of new inventions and developments may

‘be made available to the people of the United States, ” ae

e USCA § 218. :

Againat this intricate statutory structure i in orl s®carce-

ly a single business act i is free from continuous regulation

or at. least’ administrative governmental -review, one thing © cs

emerges clearly. It is that Tariff No. 132, its meaning, its

‘scope, its-applicability, its validity for any or all govern-

- mental purposes, is ever-present. The best illustration is

to accept momentarily the concession’ of appellants that

2 teh Pe ab ces ae a 4.

< ‘the tariff is ‘authoritatively held ti bei valid. sleitiiaten: : re

tively for regulatory purposes, to. which they add, but not - ;

‘valid for antitrust purposes. We can recognize, of course,

that in this sometime weird antitrust world, in which anti-

‘trust policies appear to have an overpowering influence in

the running clash between supposedly | coordinate execu- —

tive agencies or departments of the same Government, a

_ California v. FPC, 1962, 369° U.S. 482, 82 8: Ot. 901, 8

L. Ed. 2d 54, it is possible for the Courts to hold finally

that this result could occur. But that choice ought not to.

be ‘made, the occasion for facing such a possibility ought

a o.

3 ‘not tobe forced until it is inescapably necessary. The very oe

ae a inherent i in that “ran es demonstrate that. .

On any ‘giteh hypothesis; of course, a scotanaia thie og

i wil be the FCC determination ofthe validity of Tariff -

'No.-132. If, as the law elearly permits,!5 the monopolistic

: and fatitrast oe of the ee we by

. @: ‘ ad :

————E oe

Pad egel Nee

4 Appellants i not’ ‘make: this. as an ‘eguende: -assumption. On

their thesis they accept it. as valid o. so-called , , administra-

_ tive” regulatory purposes. . A r

» 15 Under statutory rate and pre” tice standards of sast ona rea-

‘sonable,” many technical anc administrative factors are: in-

volved in the liglit of the industry being regulated. Some of

the factors, many complex and highly technical, as we advance

in the electronic age, concerning maintenance "and upkeep of

non-furnished equipment with resulting deterioratign™ of high . *°

quality service for both incoming and outgoing calls, are illus-

-trated in %everal cases. See, e.g., Petem Sunset Beach, Ine. v.: 2,

Northwestern Bell Tel. Cé., Minn. R.R. & Warehouse. Comm’ n,

1965, 60 P.U.R. 3d 368; City of Los Angeles v. Southern Cal.

Tel. Co’, Cal. R.R. Comm’n, | 1933, 2° P.U.R. (NS) 247; In the

Matter of AT&T & Western Union Tel, Co., F.C,C., 1948, Docket’

- No. '8963. One of the factors, especially whete,. as here, the mat-

ter is precipitated. by antitrust claims, is the propriety, if not.

the duty, of the administrative agency to consider monopolistic -

> and antitrust. implications, The Supremé Court has made this

clear. Ta. ‘United a v. +: Radio — of ae, 1959, 858

“

17b.

‘the tariff. were among thr factors considered and evaluated

“by the, FCO, a. Court would be hard put in either contriv-*

ing or thereafter. verbalizing.a concept which, in.a sort of

-.: now-you-see-it, now-yot-don’t sleight of hand,’ would allow

the tariff-to be valid and yet. invalid at one. and the same

time." 16.”

U.S. 834, 348, 79 S.Ct A5T, 466 3 L. Ea. 2a 354, 364, the a

“- Gourt said: a 4

a= “Accordingly, this Court comsletenthy held that when

rates and practices relating thereto were challenged: under

the antitrust laws, the agencies had primary jurisdiction to

consider the reasonableness of such rates and practices in the

light of the many relevant factors including alleged antitrust

- violations, for otherwise sporadic action by federal courts:

pt an agency’s delicate regulatory scheme, ag

»\s ;

woutd-disru

would throw existing rate structures out of balance.”

Even more pointed is the holding in McLean Trucking Co.: v.”

United States, 1944, 321 U.S. 67, 80, 64 8. Ct. 370, 377, 88 L. Ed.

_ 544, 553, where the Court held:

“But in executing those policies [of the hinmmsentniiee”

Act committed directly to the ICC] the Commission may be’

. faced with overlapping and at -times inconsistent policies —

eanbodiad-i in other legislation enacted at different times and._

, «= with different problems in-view. When this is true, it can-

not, without more, ignore the latter. The precise adjustments

which it must, make, hoWgver, will vary from instance to

i, instance depending ‘on: te extent to which Congress indi-

. cates a desire to have those policies leavened 4 implemented

- in the enforeement of the. various specific provisions of the.

legislation with which the Commission i is primarily and di-

rectly concerned.” -

See also FCC v. RCA Communications,’ Ine., 1953, 346. US.

86, 73 S.Ct. 998, 97 -L. Ed. 1470; Only, of Pittsburgh v. FPC,

D.C. Cir., 1956, 237 F. 3d. 741, 754...

16 Cf, Pan American’ Airways .v. United States, 1963, 371 US.

* 296, 309, 83 S.Ct. 476, 484, 9 L. Kd. 2d 325, 335: -

“Tt would be strange, indeed, if a ‘division of territorion

or an allocation of: routes. which met the requirements of the ©

* ‘public interest’ as defined in § 2 were. held to be antitrust

_ Violations. It would also be odd to conclude that an affiliation -_

between. a common carrier and.an air®?carrier that passed -

muster under § 408 should run : afoul .of the antitrust laws.”

ok, ener eee pa tee

+> Despite the disparagement of plaintiffs that the tariff = §=—#

is initially the handwork ‘of the Telephone Companies’ :

seriveners and is, at any event, not a.rate but a mere

~ equipment. tariff, _two.things are po sitive.» » First, a ‘tariff, o

- required by law to be filed, is not a mere contract." It is’

the ‘law, Compania Anonima.Venezolana. De Navegacion

-v, A. J. Perez Export Co., 5 Cir., 1962, 393 F. 2d 692, 696

” &n. 12, cert; denied, 371 U.S. 942, 83 S. Ct? 321, 9 L. Ed...

2d 276; United States v.\ Associated Air Transp. Inc., 5 - -

Cir., 1960, 275 FY? 2d 827, 833. ‘Second; the telephone utility

_ is required to. file in its schedules and tariffs “the classi- :

* fications, practices, and regulations affecting such charges,”, oe

7 USCA‘ § 203(a). ‘The “classifications, ‘practices, and =~

regulations,” . as well.as the charges, must be “Gust and .

reasonable.” 47 USCA § 201(b). The Commission ‘is em-

= powered to determine whether they are and its power ex-

- tends to détesmining “what classification, regulation, or.

- , practice is or will be just, fair, and reasonable. ” AT. USCA ,

§205(a). The “* * * Commission’s range of power over ?

the regulated companies” extends to “* * * ‘charges, prac-

tices * * *” and is not limited to rates and * * * services.”

| Aaland, Inc. v. United States; 1945, 325 U.S. 31/, 323,

_ « « 6 8. Ct. 1151, 1154, 89 L. Ed. 1637, 1642. Considering

that. so long as the tariff is. “administratively” valid and

; applicable — as. is assumed — the Telephone Company vot

only may, but: must,-enforce it-uniformly_as_to_al)_simil¢ oe

‘situated, to permit the Antitrust Court to declare it in-.

valid would be putting judicial imprimatur on operational

chaos. It woul require in effect that the Telephone Com-

pany discon ck service to those using Carterphones but

‘who do not sue, while continuing service to those who sue.

Worse, retepegters, including those coerced under the op-—

erative effect of the tariff to discontinue Carterphone,

would bear their proportionate part of the amount of =

— damages and attorneys’ fees paid out to.the success-

¥ | ee gy Yon. rae wea

| ke estates suing customer. 17 hut chads, of: course, edaaa Sethe

_. be eliminated by the Antitrust. Court holding that despite

eee earlier . FCC approval of the tariff, the monopolistie . im- .

\o plications are so great that it gannot stand for any pur-

pose. This, in effect, would be a first, second, or third tier _

_ re-review*® of an already reviewed administrative deci-<

” gion.!9 The likelihood of. this occurring is remote enough.

to. say that the prospect ought not to be anticipated. . :

eee - There is, thus, the strong possibility that all, or a prin-

“~... - eipal part, of: the .antitrust suit will effectually be deter-

ee mined by the resolution by the FCC of the validity and

; application of the tariff to Carterphone. This is not to.

‘ ~ gay, as- the appellants’ briefs. “contend, that contrary to

_ | . ‘United States v: Radio Corp. of America, ‘ supra, 358 U.S.

pmre at 343-46 79 S. Ct. at 463-465, 3. Li.. Ed. 2d at. 361-62;

' *'. California v.: FPC, ‘supra; United States v. Philadelphia —

_ Nat'l Bank, supra, 374 U.S. at 350-54, 83 S. Ct. 1715 at

° 1734-1737, 10 L. Ed. 2d at 937-39; and Silver v. New York: ~

Stock Exchange, supra, the Communications Act of 1934 ©

.. either confers immunity :on- telephone. companies or com- —

\. mits to the FCC the determination * antitrust issues Me 6s.

. 17 §ée cameialiens vori Mehren Te alicatt lowe and Regulated

' Industries: The Doctrine of Primary Jurisdiction, 67 Harv. L.

1 _ Rev. 929 (1954), who concludes :

| _ “The doctrine of primary jeriediction is empantial to sffee—-—

———-——. - tive regulation. Without it members of ‘regulated industries

: ’- ..* would be subject to the commands of two masters — the reg--

\ | ulatory statute.as administered by the agency and the-anti-

7 ie , trust laws as administered by the courts. * * * It is nothing* ;

more than a procedural device to secure preliminary admin-

istrative determinations of. regulatory ma earn

Ta. at 965-66

_- _ *We would adq this caveat: “Nothing” 3 isa a very very posi-

tive word, perhaps too mu 3 |

18 First tier|theDistrict Court et es thecantitrust suit ; ad :

tier, the Court of Appeals reviewing that-decision; third tie wend N atk

Sera the Supreme Court: : Stes

eae = ee mate 26, supra. -

aid Se

| oe . ‘

such. What, we do say is that inescapably presented is the

“ _ question whether the practice permitted, indeed required, |

- by Tariff:No: 132 is lawful. If it is legal, and if it must’

‘be applied to all alike, then surely a significant issue hav-

eee, Jd ing important, if. not decisive, impact, on the onjeomne of |

_ the re litigation has -been* excised. oa

That this; is a. role of pgimary jfisdiction. refesqnise. is

- demonstrated by assuming the success of the present ap-

- peal, our reversal of the ktay pending reference and the ‘

immediate trial of the antitrust suit. Bypassing the difficult

problems. of what treatment, if any, the trial Judge would .. .

", give to’ Tariff +132 either i in the admission’ of evidence or

jury instructions,®° how ‘would the validity. and application

. of the tariff ever be effectively determined by 1 the FCC with..

” respect to this particular antitrust ease and the assumed .

judgntent for triple. damages? In the face of the Seventh

- Amendment, could the-District Court after jury trial and

verdict then make a reference? Could the Court of Appeals?

; ‘

. is the District, J udge’s memorandum opinion, he stated:

- “Determinations that regulatory tariffs are just, reason-

ae able and valid permeate every. aspect. of-telephone communi-

SR --_eations regulation. * * * The antitrust laws-and the precise —

fe ingredients of this case are among the relevant factors for .

n eeeane FCC consideration in determining the justness, feasonable-

‘ ¥ ness, validity, application and effect of the tariff and prac- ae

, tices here involved.”

This is not, "as sited from some of the J diate: sonanastitn

during colloquy or as asserted in appellant’s brief, to. be read

as a predetermination that the FCC either would or could or :

should evaluate this in the. traditional. antitrust Sherman Act

ee “tule of reason” concept C v. RCA’ Communications,

eee cLeah Trucking Co, v..United States, supra, or

that the question of reasonableness is even open for inquiry in

the per se case, see note 10, supra; but see note 11, supra. The

regulatory statutory standard of “ust, and reasonable” reflects.

* many factors, arene antitrust amass S See note 15,

wuprs. “sy a

21b

7 The Supetais Court If referred at that late’ stage what

_ record would the FCG consider? fhe one hammered ‘cut

under the narréw rules of episodic civil trial? A broad.-

industry-wide survey with full ‘administrative exploration oo

_ of the scientific and technical problems?-Assuming the ulti- -*

mate FCC determination thereafter of applicability and eae"

validity, how or in what manner could this be applied to

penetrate the ‘foggy. mystery of the jury’s general verdict?

To ‘these questions we do*not‘even begin to suggest an -

answer. Nor do the plaintiffs. They simply ignore them on

the simple, but natural, desire that, through. the incantation

. of these: magic antitrust epithets, these serious pect,

about Tariff No. 132 and its effective enforcement will some- .

_ how go away. :

‘Embracing fully and cathusiastically the ‘siete that

“no fixed formula exists for applying the doctrine of prim-

ary jurisdiction” /and that in “every case the questiolis

whether te reasons for the\existence of the doctrine. ingyre

present : d whether. the purposes-it serves will be ai

by its ap ication i in the particflar litigation,” this Court —

has give full voice to this device. And in nearly every. :

instance here we order it, it ought first to have been : ie

dered by he trial Court,.Thus, contrary to the suggestion —

of appellants that as Judges we are in as good a position. ©»

to read Tariff No. 132 as the FCC, we sent a tariff construc- be

tion problem to: the ECC ‘in: Louisville & -N.R.R. v. Knox

Homes Corp., 5 Cir., , 1965, par 2 2d. 867. Therenit Was °

-21 Cf, Clay v. Suni Ins. Office, Ltd., 1960, 368 US.. 207, 80 S. Ct.

61222, 4 4 ‘Ed. 2d 1170, on certification mn remand, Fla., 1961,

133 So, 2d 735,. on receipt of answers: certification, 5 Cir:,

1963, $19 F. 2d 505, rev'd, 1964,.3877 U.S. 179, 84 S. Ct. 1197,

12 L. Ed. 2d 229; Hopkins v. Lockheed Aircraft Corp., 5 Cir., )

- 1966, 358 F. 2d 347. fv

22 United States v. Western Pac. RR., 1956, 352 U. 8. 59, 64, 7

$. Ct. 161, hi 1L. a 2d 126, 132.

22.

tariffese which sia the sedition: Here it is largely tech-

nological eonsideration as to the equipment, apparatus,

* Terminals Corp.. v. Southwestern Sugar 'é Molasses Co. eo. en

etc., reasonably within the tariff’s description. In River

' 5 Cir, 1958, RF. 2d 922, aff'd, 1959, 360 U.S. 411, 79 S.Ct

., @serious problem of law under publis Ls

-. we sent to the ICC for-

1210, 3:‘L. Ed. 2d 1834, we ordered. reference to-thé ICC of

.d-tériffs. And in Ag-

: Cir. , 1965, 349 F. 2.873,

itial determination the Serious and

far-reachi estion of law. concerning the interpretat tion |

- _and-epplication of the, Transportation Act and the interplay *

ricultural Transp. Ass’n v. Ki

“of the Agricultural Marketing Act, 12 USCA § 1141,

The brief analysis which we. have made demonstrates

convincingly that the construction, application, ; and validity

. of Tariff No. 132 is a critical, if not decisive, issue. “As in.

many other antitrust or similar cases, primary jurisdiction

‘reference was imperatively called for.2* Far East Confer-.

"ence v. United States, 1952, 342 U.S. 570, 72 8. Ot. 492, 9

LL. Ed. 576; United ‘States Nav. Co, v. Cunard 8.8. Co.,

1932, 284 U.S. 474, 52 S.Ct. 247, 76 L. Ed. 408; Pan Amer-.

ican: World Airways, ‘Inc. v. United States,. 1963, 371 U.S.

296, 83 S. Ct.A76, 9 L. Ed. 2d 325; Carnation Co. v. Pacific

23 Indeed, the Télephone Companies have referred. us ‘to at least

' _* four cases in which the precise relationship of the antitrust. laws

to the jurisdiction of the FCC’ has been considered by District

‘Courts. Marcom,. Inc. v. "American Tel. & Tel. Co.; No. 43215,

N:D. Cal., July, 28, 1965, Western Statés Tel. Co. v.. American |

Tel. & Tel. Co., ‘No. 64-175-PH, S.Dy Cal., July 28, 1964; Secra-

_* ° fone -v. Illinois Bell Tel. Co., ‘Civ. No. 600-1022 ; ND. Il, 1961;

-Pastor v. American Tel. & Tel. Co., 8.D.N.Y., 1940, 16 F. Supp.

781. .In.each case it was alleged that the- actions of the defendant -

telephone ‘companies, taken in accordance with their foreign —

attachment and interconnection tariffs, had prevented the plain-

tiffg from marketing their various devices designed for attach-

ment to or interconnection with the channels of the defendants,

and that such actions thus violated the antitrust laws. In each

case it was held that primary jurisdiction lay in the ‘FOC and.

appropriate — commissions. :

_ L. Ed. 2d 709, as amended, 383 U.S. 213, 86'S. Ct. 781, 15

: Wetioesd Conference, 1966, 383 U.S. 213, 86 8. Ct. 781, 15.

I, Ed.-2d 851. Although United States v: Radio Corp. of

' America, supra, stands for the proposition that'there‘is no

necessity to invoke the. primary ‘jurisdiction of the FCC in |

an antitrust suit challenging a television acquisition, the

Court, contrasting television With the “pervasive regulatory ee

. Scheme” prescribed in the ‘Communications .Act. for tele-:

“phone and telegraph companies, fully. recognized that where

' . tariff structures might be thrown “out: of ‘balance” and

‘ * sporadic action by federal -courts” might “work *.* *

_" mischief,” 358 U.S. ‘at 350, 79 S. Ct. at 467, 3 L. Ed. 2a at

365; primary jurisdiction i is ‘available. So did the Court-in

Silver v. New Y ork Stock Exchange, 1963, 373 U.S, 341, 83

_ S. Ct. 1246;-10 L, Ed. ” 389.25 That te ultimate decision

a AltHough’ this wieseitiie is certainly laid down, it was unnec- ©

‘essary to the holding of the Court since the’ FCO -had already: -

approved the acquisition and there was nothing left for the

' Court but the task of accommodating the policies of the Com-

munications Act to the aims of the antitrust laws. The Court

indeed: undertook this task, held that the approval of the FCC

did not immunize the acquisition from the antitrust laws, and —

- could have disposed of the case solely on this ground. Sée 3

- Davis, Administrative Law § 19.06, at 16 (1965 Supp.). This is

- precisely what the Court did in United States v. Philadelphia

Nat’l Bank, supra. Assuming, but expressly not deciding, 374 _

U.S. at 353 n. 82, 83 S. Ct. at ...-. nm. 32, 10 L. Ed. at 939

n. 82, “the applicability of the doctrii’ [of primary jurisdic-

- tion] to ‘merger-application proceedings Sefore the banking. ~

agencies,” the Court noted that “the pr ; action would not:

” be barred, for the agency proceeding was completed before the

antitrust action ‘was commeneed,” 374 U.S. at 353, 88S. Ct. at

1736 n. 32 10 L. Ed: 2d at 939; and. disposed of the case on, the -

ground that the Comptroller’s approval of the bank merger did

— immunize the transaction from the operation of the antitrust

aws.

Silver, the Court held that “the Commission’s ek of juris-

diction over. particular applications of exchange rules mearis -

that. the question of antitrust exemption does not involve |

. any problem of ¢onflict or rand noted of coverage with

the agency’ s Teguistory Bowers:

and noted that “this aspect of |

of the FCC may not be an end to the matter is neither un- o

expected nor decisive. For the doctrine ‘applies “even

- though the-facts after they have been appraised by special-

- ized competence. serve ag a premise for legal consequences

- to be judicially defined.” \ Far East Conference v. United

” States, 1952, 342 U.S. 570, ‘574, 72 S.Ct. 492, 494; 96 L. Ed.

576, 582. Nor is. it feven if the court. thinks that the ar-

‘rangement alleged to violate the antitrust laws cannot be ©

legally approved by the agency” for “the court should still cS

- allow the agency first to pass upon the question.” 3-Davis |

a. Administrative Law § 19.07,-at 40 (1958). Nor is a refer-

ence a prejudgment that the regulatory act or agency offers ©

- antitrust immunity: as such for. “reference to an adminis-

‘\ \trative a 0 ET is not regtricted to. situations when the

‘

the statute Waban: obeiates any need to. consider whether. peti- ue

tioners were required to resort to the Commission for relief.

before coming into Court,” 373 U.S. at 358 &.n. 12, 360, 83.

~ §. Ct. at 1247 & n. 12, 1258, 10 L. Ed. 2d at 400 & n. 12, 402. se

. . Pursuing this further, the Court noted that “there is nothing

built into the- regulatory scheme which performs the antitrust

function of insuring that an exchange will not in some’cases __ ‘

‘apply dts rule so as to do injury to competition which cannot

be justified" as furthering legitimate self-regulative ends,”. and.

recognized in footnote 12 that “should review of exchange self- -

. regulation be provided through a ‘vehicle other than the anti-

trust laws, a different’ case as to antitrust exemption would be |

presented.” Ibid. Here, to the contrary, not only can the parties

resort to the FCC for.a determination of whether the “practice” |

. of the telephone companies pursuant to Tariff No. 132 is “just

and reasonable,” 47 USCA § 205, with ‘a right to have this deter- __

mination reviewed in the. appropriate Court. of Appeals, see, -

note 12, supra, but that determination must certainly include.

meee of .antitrust policies, see note 15, supra. These

‘ differences}#rom the SEC scheme there in issue require that the’ -

Antitrust Court not decide this question until the FOC’s deter-

mination makes it nécessary, and then with the guidance of the

FCC's resolution of the-technical problem involved.

. -¢ 7 i

eae aes an

wink if

; agency has oo power. to i immunize. 2726 Maddock & Miller,

"Ine. ’. United-States Lines, 2 Cir., 196, 365 F. 2d 98.

‘In. ‘affirmizig this primary. jurisdiction reference. to’ the i

FCO, 27 we must sound to all‘hands this caveat. In analyzing

+ the contentions pro and con. in. the guest for seeking and ,

| identifying critical issues for initial administrative. deter- |

4 mination, nothing we have-said or-left unsaid, nothing ex-

essed or implied, is. to be considered: as ‘even a remote

possible whisper of a suggestion as to how any one or more —

. or-all of the issues: now disclosed. or hereafter revealed are. '

ultimately to be decided. All of those decisions are to be.

made first by the trial J udge/when and after. the primary

jurisdiction ssa tinns has been concluded.

te r ; Be

‘ She ~. 2 j

eae oe ey Waele AFFIRMED.

mg :

me Sy ~ - . P a,

€

26 ces to appellants’ contention, ‘the trial J udge . did not

directly or impliedly pass on the question of immunity. This and

- all other questions were deferred pending: reference to the FCC..

ar While the. effect of ‘the order of reference is to impose on the

"appellants the burden of filing a complaint with the Commis-

sion, 47 USCA §-208; 47 CFR §§ 1.701-735, the obligation to.

institute and prosecute such reference in good. faith rests equally

-..on the Telephone Companies ag a condition to the.cdntinuation

of the stay order. -The Commission can on its own initiative _

order an investigation on whether.a particular practice is “just

and reasonable” and thereupon issue a cease and desist order,

47. USCA § 205(a). More significant it may, in accordance with

§ 5(d): -of the APA, 5 USCA ‘ 1004(d), “on-motion or its own

motion issue a declaratory ruiing terminating a controversy or .

removing uncertainty.” 47 CFR § 1.2. We again emphasize that ~

nothing we have said here is intended to limit the manner in |

‘which the referred question (and all matters related thereto).

are to be presented to the Commission, blueprint the type. of

proceeding to be followed by the’ Commission, limit the scope of

the Commission’s inquiry, delineate the factors to be considered’

by the Commission, or indicate the conclusion to be reached by

either the Commission or the District Court after the former has ©

" . ated.

o, Mis e e : , ” = “ e be ba

CRAM NIRA NNR an Ayton 1p yr ui aparece per gy saeael pike tthe se

. ° °

a? . .

f © ’

PONG OME RD, i el aaa

OF sa Me APPENDIX c ite

1 Communications Act of 1934, 47 US. C. 8 151, 201 222

§ — Purposes of chapter; Federal Communications Com-

> mission created” ,e ae

Fer the purpose of regulating tateratate and foreign

commerce in’ communication by wire and radio so as to .-

make available, so far as possible, to all the people of the

_.° “ United States a rapid, efficient, Nation-wide, and world-

wide wire-and radio ccmmenfietion service with adequate |

_ facilities at reasonable charges, for the purpose of the na-

‘tional defense, for the purpose of promoting safety of life:

and property through the use of wire and radio edminuni-

_ eation, and for the purpose of securing a more effective

exe n. of this- policy by centralizing authority hereto-

oe ene by law to several agencies and by granting .

ad nal authority with-respect to interstate and foreign

‘ commerce in wire and radio commanication, there is cre- ©

ated a commission to be known as the “Federal: Communi- <

catigns Commission”, which:shall be constituted as here- —

: inafter provided, and which shall execute and enforce the

provisions, of this chapter. June 19, 1934, c. 652, Title I;

$1, 48 Stat: 1066; May 20, 1937, c. 229, $1, 50. Stat. 189.

SUBCHAPTER I. COMMON CARRIERS

§ 201. Service and charges _

“4 a) It shall be the’ duty of every common carrier en-

gaged in interstate or foreigp communication by wire or

radio to furnish such communication service upon reason-_

able request therefor; and, i in accordance with the orders _

of the Commission, i in cases where the ‘Commission, after

opportunity for hearing, finds such action. ‘necessary oP

desirable. in the‘ “public interest, to establish physical con-

nections with other uh biped to. establish: through routes

Om ee

-~ .

- and charges applicable thereto aa the divisions of such

-charges, and to establish and provide facilities. and ee

tions for cise such through routes.

(by all charges, ‘practices, classifications, and regula-

‘ tions for and.in connection with such communication serv-

. ice, shall be just and reasonable, and any such charge,

practice, classification, or regulation that is unjust or

unreasonable is “declared to be unlawful: Provided, That

‘communications by wire or radio subject to this chapter .

‘may be classified into day, night, repeated, unrepeated,

letter, commercial, press, “Government, and such other _ .

sonable, and different charges may be made for the-differ- .

“ent classes of communications: Provided further, That.

nothing in this chapter or in any other provision ,of law

- shall be construed to prevent a common carrier subject: to

. this chapter from entering into or operating under any

contract with any common carrier not subject to this chap-

, ter, for the exchange of their services, if the Commission .

is of the opinion that such contract is not contrary to the. .

_ public interest: Provided further, That -nothing’ in . this"

_ chapter-or in any other provision of law shall prevent a

_ tommon carrier subject to this chapter from Purnishing

reports of positions, of ships. at sea to newspapers of gen-

eral cireulation, either at a nominal charge or without -

charge, provided the name of such common carrier is dis¢

played along with. such ship position, reports. The Com-

mission may prescribe-such rules and regulations as. may -

be necessary in- the public interest to carry out the provi-

- sions of this chapter. June 19, 1934, c. 652, Title II’§ 201,

48 oe: 1070; sei 31, 1938, c. 296, 52 Stat. 588,

; : rw 4

§ 202.. Discriminations and preferences

(a) .It shall be unlawful for any common carrier to make

any unjust or unreasonable discrimination i in charges, prac-.

: tices, classifications, regulations; facilities, or services for ee

or indirectly, by any means or device, or to make or give,

any undue or unreasonable ‘preference or advantage to any

particular person, class “of persons, or locality, or to sub-

ject any particular person, class of persons, or locality to

> any undue or unreasoniible prejudice or disadvantage. :

—, &b).. Charges or services, whenever referred to in, this

chapter include charges for,-or services in connection with,

the use of comman carrier lines of communication, whether

derived from wire or radio facilities, in chain broadcasting

. or incidental to radio communication of Wy, kind.

-of this section shall forfeit to the United States the sum of

$500 for each such offense and $25 for each and every. day

of the continuance of such offense. June 19, 1934, ¢. 652,

.. Title II, § 202, 48 Stat. 1070; Sept. 13, 1960, Pub. L. 86 —

751, 74 Stat. 888. ee ) Gee

§ 203. Schedules of* ilies filing swith: Ounaiihen:

7 changes in- schedules; organ and “sat

‘penalty: for violations

(a). Every common carrier, except éonnecting earriece,

shall, within such reasonable time as the Commission shall

designate, file with the Commission and print and keep open

for public inspectioa schedules showing ali charges for it-

self and its connecting carriers for interstate and foreign

_ wire or radio communication between the different points -

on its own system, and between points on its own system: |

and: points on the system of its connecting carriers or

@ Seas . = al

points on the system of any othe caxrior subject to this

» chapter when a through route has been established, whether

such charges are joint or separate, ang, showing the classi-

na fications, practices, and regulations affecting’ such charges.

Such schedules shall contain such other information, and’

be printed in such form, and be posted and kept open for

public inspection in such places, as the Commission may

by regulation require, and each such schedule shall give

notice. of its effective date; and such common carrier shall

furnish such schedules to each of its connectizig carriers,

and such connecting carriers shall keep such’ schediles open

for inspection in such — places as the — may

require.

'(b) No change shall be made in ‘the charges, Sittin: a

tions, regulations, or practices which have been so filed and

published except after thirty days’ notice to the Commission

and to the public, which shall be ‘published in such form and .

contain such information, as the Commission may by: regu-

lations prescribe; but the Commission may, in its discretion

and for good cause shown, modify the requirements made

by or under authority of this section in particular instances

(e). No carribr,. unless ‘otherwise provided by or enite

authority of this chapter, shall engage or participate in

‘or by a general order applicable to epecial al circumstances-or———

‘conditions. eT ee Re .

such communication unless schedules have been filed and

published in accordance with the provisions of this chapter

and with the regulations made: thereunder; and no carrier

shall (1) charge, demand, collect, ‘or receive a greater: or

less or different compensation for such communication, or

_ for any servicéjn connection therewith, between the points

named i in any such schedule than the charges | specified in

‘the schedule then in effect, or (2) refund or remit by any

means or device any portion ofthe charges so specified, or

G a ee

(3) extend to any person any privileges or facilities i in- such

“gommunication, or employ or enforce any classifications,

regulations, or practices affecting such charges, a as

; specified i in such. schedule. ; :

(d) The Commission may reject and vitene to file any.

- Schedule entered for filing which does not provide and give

lawful notice of its effective date. Any schedule so rejected

by the Commission shall be void and its use shall be unlaw- |

re *

(e) In case of failure or refusal on the part of any car-

’ rier to comply with the provisions of this section or of any

regulation or order made by the Commission thereunder,

such carrier shall forfeit to the United States the sum of.

$500 for each such offense, and $25 for each and every day .

e. of the continuance of such offense. June 19, 1934, e¢, 652,

Title II, § 203, 48 Stat. 1070.

$204. Hearings oif new chee; suspension pending hear- =

ing; refunds fe

—

——er

; ! Whenever there is. filed-with ‘the Commission any new

charge, classification, regulation, or practice, the Commis-:

sion may either upon complaint or upon its own initiative _

without complaint, upon reasonable notice, enter upon a

hearing concerning the lawfulness thereof; and pending

such hearing and the ‘decision thereon the Commission,

* upon delivering to the carrier or carriers affected thereby ~

‘a statement in writing. of its‘reasons for such suspension,

may suspend the operation ‘of such charge, classification,

regulation, or practice, but not for a longer period than

three months beyond the time when it would hr hae go.

into effect; and after full hearing the Ce ssion may —

make such order. with reference thereto as would be-proper’ :

in a proceeding initiated after it had become effective. If

the proceeding has: not been concluded and an order made

: 5 oh * ae

g "et g 2

e be

of charge, classification, regulation, or. practice ‘shall go

~ into effect at the end of such period; buf in case of a pro-

posed increased charge, the Commission may by order re-

quire the interested carrier or carriers to keep accurate

aa account of all amounts received by. reason of such i increase,

ie - specifying by whom and in whose behalf’ such amounts are

‘ paid, and upon completion of the hearing and decision may

by further o -derieequire the interested carrier or carriers |

to refund, with interest, to the persons in ‘whose behalf

such amounts were paid, such portion of. such increased eerea

a, charges .as by: its decision shall be found net: justified. At

es . . any hearing involving a ¢ -ficreased, or sought to be

increased,.after“the organization of the Commission, the

-burden of proof to show that the increased charge, or pro- .

posed . increased charge, is just. ‘and reasonable shall be

- upon the carrier, and the Commission shall give to the hear-

ing and decision of such questions preference over all other

7 questions pending before it and decide the same as speedily

jo as possible. June 19,, 1984, ce. 652, Title II, § 204, 48 Stat.

1071.

- Q@«

°- youk

—g 205. Commission authorized to- preseribe ae and rea- e

sonable charges; penalties for. Violations

Se . Whenever, after. ‘full opportunity for hearing, upon

8 complaint or under an order. for investigation and hear-.

ing made by the Commission on its own- initiative, the Com-

‘ mission shall be of opinion that ‘any charge, classification,

% _ *regulation, or practice of any carrier or carriers is or will

a violation of any of the provisions of this chapter, the .

‘ , Commission is authorized and empowered to determine and .

-. prescribe what will be the just and reasonable charge or |

_ the maximum: or minimum, or maximum and minimum, ~

. charge or marge to be thereafter observed, and what clas-

_ sification, regulation, or practice-is or will be just, fair,

and reasonable,:.to be thereafter followed, and to make an ,

order that the carrier or carriers shall cease and desist ~

from such violation to the extent that the Commission finds *

that the same does or will exist, and shall not thereafter

so prescribed, or in excess of the maximum or less than the

_ minimum so prescribed, as the case may be, and shall adopt

the classification and shall conform, to and observe the reg-

ulation or practice so prescribed.

. (b) Any carrier, any officer, representative, or agent of - °

. & carrier, or any réceiver, trustee, lessee, or agent of either _

of them, who knowingly fails or neglects to obey any. order

made under the provisions of this section shall forfeit to

-the United States‘the sum of $1 ,000,for each offense. Every

of continuing violation each day shall‘be deemed a separate

offense. June ‘19, 1934, c. 652, Title Hi, § 205, 48 Stat. 1072.

| § 206, Carriers’ liability for damages

In case any common carrier‘shall do; or cause or permit .

to be done, any act, matter, or thing in this chapter pro-

_ hibited or declared to-be unlawful, or shall omit to do any

act, matter, or thing in this chapter required to be done,

such common carrier shall be liable t® the person or per-

sons injured thereby for the ‘full amount of damages .sus-

_ tained in consequence of’ any such violation of the provi- _

_. sions of: this chapter, together.with & reasonable counsel

or attorney’s fee, to be fixed by the court in every case of . -

recovery, ‘which attorney’s fee shall be taxed and collected:

' as part of the costs in ot case. June 19, 1934, c. . 652, Title

II, § 206, 48 Stat. 1072.

fy .

‘ or State commission,

| F 207. Recovery of damages

Any person. claiming to be damaged by any common car-

rier subject to the provisions of this chapter may either

make complaint ‘to the Commission as hereinafter provided .

for, or may bring suit for the recovery of the damages for

which such common carrier may be liable under the provi-

sions of this chapter, in any district court of. the United

States of competent jurisdiction;, but ‘such. person shall not .

have the right to pursue both such remedies, June 19, 1934,

C. 652, Fifle: Il, § 207, 48 State 1073.

a § 208. Complaints to Commission; investigations

_Any person, any bod 7 ‘ politic or municipal organization,

omitted- to be done. by any common carrier subject to this

chapter, in contravention of the provisions : thereof, may

apply to said Commission by petition which shall briefly. . .

state ¢he facts; whereupon a statement. of the complaint

thus made shall be forwarded by: the Commission to such

common -carrier, who shall be called upon,to satisfy the

complaint or to answer the same in writing within a reason-

able time to be specified by the Commission. If such com-

. mon carrier within the time specified shall make reparation .

for thé injury alleged to have been caused, the. common

_ carrier shall be relieved of liability tothe complainant only —

___ for the particular violation of law thus complained of. If ~

such carrier or, carriers shall not satisfy the complaint

within the: time specified or there shall. appear ‘to be any.

reasonable ground for investigating said complaint, it shall

~ be the duty of the Commission to investigate the matters

complained of in such manner and by such means as it shall

deem proper. No complaint shall at any time be dismissed -

because of the absence of direct damage to the complainant.

: June 19, 1934, C. , 652, Title IT, § 208}, 48 a 1073.

omplaining of anything done or

- &

ae : | 9c ~

§ 208. ‘Orders for payment of money _

“If, after hearing on a complaint, the Conittiission shail

determine that any party complainant is. entitled ‘to an ;

award of damages under the provisions of this chapter, .

the Coimmission shall make ‘an order directing the carrier —

to pay to the complainant the sum to. which he is entitled

on or before a day nanted. June 19, 1934, cs . 652, Title H,

‘$209, 48 Stat. 1073.- ? es

@ 210. Franks and passes; ‘es service to governmental |

‘agencies in sense with national defense

LAwYEr’s Note .

- [While part of the comprehensive regulatory scheme that the tele- -

phone companies are subject to, the text of this section is omitted

. because not directly involved in the instant case. ] ;

§ 211. - Contracts of carriers; filing with Commission

(a). ‘Every carrier subject: to’ ‘this chapter shall file with

* the Commission copies’ of all. contracts, agreements, or

arrangements with other carriers, or with common earriers —

not subject to ‘the provisions of this chapter, i in relation to.

any traffic affected. By the provisions of this chapter to...

which it may be a party.”

? :

(b) - The. Commission shall lave authority to require

the filing of any other contracts of any carrier, and shall

also have authority to exempt any carrier from ‘submitting

copies of such minor contracts as the Commission may i

determine. June 19, 1934, c. 652, Title If, si 48 Stat. 1073.

$212. “Interlocking directorates; officials dealing in

ae securities |

_ [While part of the ciiaiiasiins sania scheme that the téle-

. phone companies are subject to, the text of this section is omitted

- because not oe involved in the instant case. ].

pi ,

ieee 10¢

" 2013, Valuation of property of ‘carrier

YLawim’s NoTE

he.

[While part of the ccmnpeediunaive) regulatory scheme that ee tele-—

' phone: ‘companies are subject to, the text of this.section is omitted

_ because not directly involved i in the instant case. ]

i g214. Extension of lines; certificate of public convenience “

ui - .. and necessity; discontinuance of service .° -

(a). No carrier. shall undertake the: construction of a

~ new line or pf an extension of any line, or shall acquire

or operate any ling, or ‘extension thereof, or shall engage

.in transmission over or by means of such additional a _

extended line, unless and until there shall first have’ been.

- obtained from the Commission a certificate that the present

or future ‘public convenience and necessity require or-will

- require the construction, or operation, or construction and

- operation, of such additional or extended: line: Provided, ~

_ That no such certificate shall be required under this section

for the construction, acquisition, or operation of (1) & line

within a single. State unless. such -line constitates part of

an interstate line, (2) local, branch, or terminal ‘tines. not

exceeding ten milés iri length, or (3) any: line acquired under.

“section 221 or 222 of this title: Provided further, That the

_ Commission may, upon appropriate request being made, ;

>. + authorize temporary or emergency service, or, the supple- |

menting of existing facilities, without regard to- the pro-

visions of this section. No carrier shall discontinue, reduce,

or impair-service to a community, or part of a community,*¢

unless and until the¥e shall first have'been obtained from :

the Commission a certificate that neither the present nor

' future public cényeniende and necessity. will be adversely

affected thereby; except that the Commission may, upon

is appropriate request being made, authorize temporary or | Seg

- + emergency discontinuance, reduction, of impairmént of _

seryice, or partial discontinuance, reduction, or impairment

_ ELEY : J,

oD,

| of service, withéut regard. to the provisions. of this séction:

ave i > ° ‘ E

of communication established by thésuse- of appropriate

equipment, other than a channel of communication’ estab-

lished by the interconnection of two or’ more existing chan-

nels: Provided, however, That nothing i in this section shall

- ‘De constyued.to require a certificate or, other authorization . ' 3

from the Commission for any installation, replacement, or: |

other changes i in plant,,operation, or equipment, other than

new iy afhervoe :which will. not impair the 2 ey oe:

quality of*service provided:

(b) Upon’ receipt of an application for any wich: certifi-.

*.° . cate, the Commi ion shall cause notice thereof to be given

_ with, the Secre of the Army, the Secretary of the Navy,

an@ the Governor of each State in which such ‘line.is. pro-

posed. to be constructed, extended, acquired, or operated,

or in which such discontinuance, réduction, or impairment -

of service is proposed, with the right to those notified to. be

heard; and the. Commission may require stich puplighed

“notice as if shall determine. 8. | € :

a |

tificate as applied for, or to refuse to issue it, or. to issue it _

for a portion or portions of a line, or ixtinsion thereof, or

discontinuance, ‘reduction, or - impairment of. service, des-

- eribed ‘in the application, or’ for the partial exercise only .

of such right or privilege, and may attach to the issuance

. of the certificate such terms and o@nditions as in its.judg-

ment the public convenience and necessity may require.

. -- After issuance of such certificate, and not ga the carrier

may, without securing approval other such certificate,

: comply” with the‘terms. and conditions contained/in_or- at-

; tached to the i issuance £33 such certificate and proceed with

o : a : t i “ i

| ae i 3

geome ie

“”

, the construction, extension, acquigition, operation, or dis-

” continuance, reduction, or impairment of service covered ~

thereby. Any construction, extension,. acquisition, operation,

discontinuance, reduction, or impairment of service contrary . .

to, the provisions of this section maybe enjoined by any

court of competent jurisdiction at the suit ofthe United

States, the Commission, the State commission, any State

‘i affected, or any party in interest.

-. @

(dy The Commission may, after full sovoitniity for

hearing, in a proceeding upon complaint or upon its own

/ initiative without, complaint, authorize oF require by order .

-* any carrier, party to. such proceeding, to provide itself with’

adequate facilities for the expeditious and efficient perform-s

ance of. its service as a.common carrier and. to extend its _

- _ lie offices, or: as to such extensi¢n, that. it is reasonably re-

quired i in the interest of public convenience and ‘necessity, --

or as to such extension or facilities that the expense involved.

‘therein will not impair the ability of the-carrier to perform

" ~ its ctype public. Any carrier which.refuses or neglects

‘to comply With any order of the Commissién made in pur- -

suance of this ‘subsection shall forfeit to the United States

$100 for each day during which such refusal or neglect con-

tinues. June 19, 1934,.%. 652; Title. II, § 214, 48 Stat. 1075;

‘Mar. 6, 1943, c. 10, §§ 2-5, 57 Stat. 11. Serca. coe

: sis: Services, ‘equipment, etc.; examination of transac. -!

. tions by ———

Lawyer’s Nore |

_[{While part of the ‘ciipiidiiaae requlateey scheme that the tele _

* phone companies are subject to, the text of this Bection is omitted

because not directly involved in the instant case. ]

a ae ae

line or to establish a public office; but no such’ eee ee

13¢

. §216.: Recetveds and truatoon; s; application of chapter >

LAWYER’S Nore. orf ee

[While part of the. comprehensive dilate. ssliainih that the tele-

. phone companies are subject to, the text of this section i is omitted

“ao bufiness of all

because not directly involved i in the instant ease. ]

§ 217. Agents’ dots and omissions; liability of carrier

_Lawyer’s Nore

- {While part of the comprehensive gulatects seb that the tele-

phone companies are subject to, the text of this section is omitted

, oe. not maid meer in the instant case. ].

eo:

§ 218. Management ‘of business; inquiries by Commission’

The Commission ay inquire into the management of :

pire subject to this chapter, and'shall -

keep itself informed as to the manner and method inwhich _

the same is conducted and as to technical developments

_ and improvements in wire and radio communication and

"may obtain from such carriers and from persons directly F

or indirectly controlling or controlled by, or ‘under. direct

or indirect common control with, such carriers full and’

radio transmission of energy to.the end that the benefits

of néw inventions and developments may be made avail-

able to.the people of the United States. The Commission

: complete information necessary to enable the Commission

to perforin the duties and carry out the objects for which

it was: created. June 19, 1934, c. 652, Title Ii, § 218, 48 -

Stat.’1077.

§ 219." Reports by carriers; contents and requireinents

_ LAwYErR’s Notre

| im

" generally

[While part of the comprehensive regulatory tibiae that the tele-

‘phone com ob aie are subject to, the text of this section js: omitted

because no

fepatcina tavelved 5 in the instant case. J

@- . Pi

— -§ 220. “Accounts, records, and ‘memoranda; depreciation

: ee Nore :

' _ [While part ‘of the comprehensive regulatory scheme that the tele-

‘phone companies dre subjéct to, the text of this section is omitted

a not- directly involved i in the instant ease. ]. -

14¢e

aide

charges; forfeitures and penalties

LAWwY¥ER’s NOTE

[While part of the comprehensive sitters scheme that the tele-

phone companies are subject to, the text of this section is one

because not directly involved in the instant case. ]

§ 221. Telephoné companies; peer meen state juris-

2 diction over services, charges, etc., unaffected;

. determination of property used i in interstate toll -

service; heenacanen !

Are

| § 222. ~ Consolidations and’ mergers of telegraph carriers —

eee. Definitions

LAWYER’s NoTE

_ [While part of the comprehensive sidney slit that the tele- «

_phone companies are subject to, the text of this section is omitted

because not directly involved in the instant case. ]

2. Sherman Act, gg i and 2, 15 USC. §§ 1 and 2

$1. Trusts, etc., in restraint of trade illegal; exception of

resale price agreements; penalty

Every contract, combination ‘in the form of we or’.”

otherwise, or conspiracy, in restraint of trade of commerce

among the several States, or with foreign nations, is de-_ .

clared to be ‘illegal : Provided, That nothing contained in ~

sections 1-7 of this. title shall render illegal, ¢ontracts or

agreements prescribing minimum prices for the resale of

_a commodity: which bears, or the fabel’ or container of |

_ which bears, the trademark, brand, or name of the pro-

‘ducer or distributor of such commodity and which is in free

and open. competition with commodities of the same gen-

. 15e im,

eral class produced or distributed by others, when contracts

or agreements of that description are lawful as applied to

intrastate transactions, under any statute, law, or public

policy now or hereafter in effect in any State, Territory, | .

or the District of Columbia in which such resale'is to be

made, or to which the commodity is to be transported for —

such resale, and the making of such contracts or agree-

ments shall not.be an unfair method of competition under

section 45 of this title: Provided further, That: the pre-

- ceeding Proviso shall not make lawful any contract or agree-*

ment, providing for the’ establishment or maintenance of _

minimum resale prices. on any commodity herein involved,

between, manufacturers, or between producers, or between

wholesalers, or between. brokers, or between factors, or

between retailers, or between persons, firms, or corpora-

tions «in competition with each other. Every person who

Shall make any contract or engage in any combination. or

conspiracy declared by sections 1-7 of this title to be illegal a”

shall be deemed guilty of a misdemeanor, and, on convic-

tion thereof, shall be punished by fine not exceeding fifty

thousand dollars, or by imprisonment not exceeding one

year, or by both said punishments, in the discretion of the

‘court. July 2, 1890, c. 647, § 1, 26 Stat. 209; “Aug. 17, 1937,

_ ¢ 690, Title VIII, 50 Stat. 693; July 7, 1955, «. 281, 69

Stat. 282.

§ 2. Sittin trade a misdemeanor; penalty

Every person who shall monopolize, or attempt to mo-

persons, to monopolize any part of the trade or commerce

amgug the several States, or with foreign nations, shall be

deemed guilty of a misdemeanor, and; on conviction thereof,

shall be punished by fine not’ exceeding fifty thousand dol-

lars, or by imprisonment not exceeding one year, or by

both said punishments, in the diseretion of the court. J uly

16¢ _

~ :

2, 1890,-c. 647, $2, 26 Stat. 2095; July 7, _ e. 281, 69

a Stat. 282.

eee det §§3, 4, and 16, 15 USC. §§ 14, 15, and 26

’ competitor :

‘ --It'shall be unlawful. for any person ‘etarhined in com-

. Inerce, in: the course of such commerce, to lease or make a

sale or contract for sale of goods, wares, merchandise,

-tmachinery, supplies, or other commodities, whether pat-—

ented or unpatented; for use, consumption; or resale with-

in the United States or any Territory thereof or the Dis-

trict of Columbia or any insular | possession. or other place

. under the jurisdiction of the United States, or ‘fix a price

charged therefor, or discount from, or rebate upon, such

price, on the condition, agreement, or understanding that

the lessee or purchaser. thereof shall not use’ or deal in the |

goods, wares, ‘merchandise, machinery, supplies, or other

| commodities of a competitor or competitors of the lessor _

or seller, where the effect of such lease, sale, or contfact

for sale or such conc joh, agreement, or understanding

may be to‘ substantially lessen competition or tend to cre-

ate a monopoly in any line of commerce. Oct, 15, 1914, ¢.-

.” 323, $3, 38, wee 731..

§ 15. Suits by persons injured; amount of recovery

_ Any person who shall be. injured in his business or prop-

erty by reason of anything forbidden i in the antitrust laws

may’sue therefor i in any district court of the United States

in the district in which the defendant resides or is found

. or ‘has an agent; ‘without respect to the amount in contro-—

. versy,-and shall. recover threefold the damages’ by him sus-

tained, and the cost of suit, including a reasonable attor-

ney’s fee. Oct. 15, 1914, c. 323, § 4, 38 Stat. 731.

—_—

. §26. . Injunctive relief for private parties; exception

_Any person, firm, éorporation; or association shall be

- entitled to sue for and have injunctive relief, in any ‘court’

_ title, when and under. the same-eonditions and principles~

as injunctive relief against threatened conduct’ that will

of the United States having jurisdiction over the parties,

Against threatened loss or damage by a violation of the :

antitrust laws, including sections 13, 14, 18, and 19 of this

cause loss or damage i is granted by courts of equity, under

‘the rules governing such proceedings, and upon the execu-

_ ,tion of proper bond against damages for an injunction

irreparable loss or damage is immediate, a preliminary in--

junction may issue: Provided, That’ nothing herein con-

tained shall be construed to entitle any person, firm, cor- __

poration, or association, except the United States, to bring

. suit in equity for injunctiye -relief against any common

carrier subject to the provisions of the Act to regulate —

commerce,. approved February fourth, eighteen hundred

- and eighty-seven,. in respect of :any matter subject to the -

regulation, supervision, or other jurisdiction of thé Inter-

state Commerce. Commission. Oct. 15, 1914, c. 323, § 16,

38 Stat. 737-

| ; as ~ ee EO

4. 28 V8.0. § 1292(a) (1) . an

§. 1292. , Interlocutory decisions ies ae

(a) “The courts of appeals shall ‘haye paren of

: appeals from:

( 1) Tniterlocutory otlee of ihe district courts of the

United States, the United States District Court for the

District of the Canal Zone, the District Court of Guam,

_ and “the District Court ‘of the Virgin Islands, or of the

judges thereof, gzanting, contineing, modifying, refusing ‘ é

18¢ AREe

or dissolving injunctions, or refusing to dissolve or modify

hy Pea.

injunctions, except where a direct review may be had in

the apres Court;

ee ae

_ APPENDIX D = a

| TARIFF F.0.C. NO. 132

- AMERICAN 'TELEPHON E AN D“

TELEGRAPH COMPANY.

LONG LINES DEPARTMENT

| | ei ee:

| MESSAGE TOLL TELEPHONE SERVICE

B: GENERAL REGULATIONS (Cont'd)

"7. ‘Unauthorized Attachments or Connections ceties

'. No equipment, apparatus, circuit or device not

a2 - . furnished by the Telephone Company shall be at-

3 tached to or connected with-the facilities furnished —

by the Telephone Company, whether physically,

. . by induction or otherwise, except as provided in

« - this Tariff. In case any such unauthorized attach-

ment or.connection is made, the Telephone Com-

pany shall have the right to remove or disconnect

the same; or to suspend the service during the

continuance of. said attachment or connection ; ‘or

to terminate the service.

- res 2 @

24. : Miscellaneous Devices. Provided by the Customer

(Filed in compliance with Federal ‘Communica-

ik, tions Commission order dated abaciciad fy 6, 1957, in

SENS: ' Docket No. 9189)

- The provisions of Paragraph 7.. preceding shall

_ onot be construed or applied to bar a customer from

-using devices whieh serve his convenience in his _

use of the facilities of the Telephone.Company in —

* the service for which they are furnished under

this tariff, provided any such device so used would

not endanger the safety of Telephone Company

AL?

er cee ies 2d

in or wiinneiioe of, or involve direct’ élostrical. con-

nection to, the equipment or other facilities of the

_ Telephone Company; or interfere with the proper

functioning of such equipment or facilities; or im-

- pair the operation of the telephone. system or

otherwise injure the publié in its use of the Tele-

phone’ ‘Company’s. services,

‘Except as other kine. provided i in ee tariff, noth-

_ ing herein shall be construed to permit the ‘use of

a recording device, or of a device to interconnect

’ any line or channel: of. ‘the Telephone Company

with apy other communications line or channel of.

the Company or of any other person.

| Connectidns with Certain Facilities of Power Pipe

Litie and Railroad Companies

Telephone facilities of an electric power company :

or oil, oil products or natural gas pipe line com-

pany, or railroad company, provided primarily to

communicate with points located along a right-of-

way (including premises of such’ company. any-

where in cities, towns or villages along the right-.

extending between’ or beyond exchange areas of

the Telephone Company, will be connected with -—

Message Toll Telephone Service furnished by the

Telephone Company subject to the regulations and ~~ -

7 conditions stated in Tariff F.C.C. No. 134 of this

Company, and amendments thereto and successive

‘ issues thereof, for conneqtion of such facilities to

Telephone Company eon line services and.

channels.

a £

cc. eB

‘26. Connection te Experimental Satellite Facilities

Message toll talephone service may be connected

through suitable connecting equipment provided

* by the Telephone Company to ground stations for

a a transmission to or from experimental satellites. ?

97, Connections with Certain Facilities of the National -

Aeronautics and Space Administration |

Telephone facilities-of the N ational Aeronautics ~

and Space Administration will be connected with

me Message Toll Telephone Service furnished by the.’

' ° Telephone Company subject to the regulations and |

conditions stated in Tariff F. 0.0. No. 134 of this

Company, and amendments thereto and successive -

‘issues thereof, for eonnection of such facilities to .

Telephone Company private line services and chan-

"nels. | | ) pee

28. Connéctions i. Facilities of. the Us. .

_ Army, Navy and Air Force . a

Facilities of-a telephone system of the Uv. S..

Department of the Army, Navy or Air Force °

which serves an establishment ° operated and ~ .

| administered under the direction of the Depart-.

ment and commanded by authorities of .such

Department, and which ‘is located generally

within the boundaries of such establishment,

_ will be connected with Message Toll Telephone

Service furnished by the Telephone ,Company

where the Secretary of the Department certifies

in writing. that reasons of military necessity

_Tequire that the establishment be served by -a

‘telephone ‘system of the Department. In addi-

tion, the facilities of ‘a temporary telephone 3

e 3

*@*

svahaah oft yuch: Distieians Leasted off a perma-

nent establishment of the Department for ma-

aeuvers, mobilization tests or r technical senha

. tests. will be 80 connected. * é

b. “Telephone facilities of the U. 18. euaeiasan of

the Army, Navy or Air Force, other.than those

, described - ‘in‘*a.. above, will be connected by

' means: of switching or connecting equipment: | i

furnished by the Telephone Company, toa pri- |

' vate branch exchange switchboard or other.

telephone switching. or terminal equipment of

_* the Telephone Company, for communication

with stations and private line facilitiés asso-

_ ciated ‘with said. switching or terminal equip-

ment, where the Secretary of the Department

or his authorized representative notifies the

. Delephone' Company in writing that such con-

nection ‘is: required for . reasons of: military

necessity. Such Department. telephone facilities

will be connected with Message Toll Telephone

Service furnished by the Telephone Company

only in cases of emergency involving safety

of life or property, unless the aforesaid De-—

| partment facilities are in locations where it is

impracticable for the ios oi Company to — |

furnish its facilities.

J. SERVICE THROUGH ‘MISCELLANEOUS’ COM.’

‘MON CARRIERS i as defined in Part 21 of the F. ap C.

_ rules) mae 7 +

Service is available to and from customers of the mis-

“cellaneous common carriers listed"below through intra-

exchange connecting facilities provided by the Tele- |

phone Company,

ADS int 4 hee ot vow

' Lawyer’s Nore:

* The states between the Pe wire telephone rate -

center and the rate center of the common carrier listed

| below are the rates set forth in C. and D. of this tariff.

An additional charge, which the miscellaneous Common

carrier bills to and collects from its customer, is: ap- \

- plicable to the remainder of the haul, as set forth j dn. 1. x

following or in -” tariff indicated i in » iets 8 \:

[Section J then lists by name 114 inleoeinewas | common a

whose customers the Telephone Company provides-service =

forth _ may be found at wee 105-109 of the — : ee fo

. @

2 ¢ /

‘ _ ee ae

a -. + APPENDIX E |

# ee - gr OS ees FCC 66-924

RS ; | , 89476 .-

“Federal Communications - Canctsilon

| Washington, D. C. 20554

, oe " Deekcst No. 16942

: ae Re. ‘

In the Matter. of

Use of the Oniterrhidin Device in

eas , Maninge Toll i cea Service. -

os | “sh p 0

ORDER *

* By the Commission: es, eee as ee

At a session of the Federal Commmnications Commission

held at its offices in Wasting, D. C., on the 20th ol of

i October*4966; ‘ Ane ee

The Commission having under. consideration the decision

of the United States Court of Appeals for the Fifth Circuit

in Carter, et al. v. American Telephone and Telegraph Co.,

_ et al. (No. 23556, Slip Opinion, ae 17, 1966) and the

regulations published in American: Telephone and Tele-

graph Company Tariff F.C.C. No. 132 (Message Toll Tele-

phone Service) which purport to ihe gan extent to which

telephone users may attach or connect devices to the facili-

_ ties of the operating telephone companies for use in inter-

state or foreign message toll telephone service : J

PB APPEARING, That the Court, in the above-refer ed

wee py. decision affirmed. a February 8, 1966, decision by ee

nh ee fi States _— Court for the Northern District

he *

Ye *

‘Texas, Dallas Division, wherein the District Court, in a

private antitrust action for.triple damages and injunctive

relief filed by Thomas F. Carter and, Carter Electronics * :

. ‘Corporation against American Télephone and Telegraph .

Co. and.the General Telephone Company of the. Southwest,

invoked the doctrine-of primary jurisdiction and referred

to this Commission for resolution, the quéstion of the just-

° ness, reasonableness, v validity and effect of the-tariff regu-

. lations and ‘practices complained. of in ‘the aforesaid action

and wherein the said. District Court stayed the proceedings

- in the aforesaid action pending the conclusion of appro-

“priate administrative proceedings initiated before the

Commission, Carter, et al. v. American Telephone and Tele-

graph Co.,' et al., (Memorandum~ Order filed dasciad 8,

1966, Civil Action No. 3- 1294).- e

_ . JT IS ORDERED, That, ihciraiaadit to the provision of.

'_ Sections 201, 202, 2055403 and 411 of the Communications _

' Act of 1934, as amended, a public hearing shall be held at a’

time and place to be hereinafter designated upon the follow-

ing specific 1 issues::, 9, @

ISSUES oc.

1. Tie nature and extent of the public need and demand

for the use of the Carterphone device in connection with

interstate or foreign message. toll telephone service ;

2. The effect of the use of the Carterphone device upon

the operation of the telephone system used to provide inter--. -

state and foreign telephone message toll telephone services —

_to the public or upon:the employees and facilities of the

. telephone companies providing such services: or upon the

public i in its use of ‘such telephone ‘system;

3. Whether the provisions of Tariff F.C.C; No. 132 filed

by | American | Telephone rer Telegraph Company may

properly be construed to prohibit any telephone user from

attaching the Carterphone device to the facilitieg of the -

‘telephone companies for use in connection with interstate

and foreign message toll telephone services;

4, -If the aforesaid tariff provisions may properly be

construed to prohibit. any telephone user from attaching

. the Carterphone device to the facilities of the telephone

companies for use in tonnection with interstate or foreign |

message toll telephone services : . PL:

(a) Whether such regulations are, or will be, unjust

_and unreasonable and, ‘therefore, unlawful within the

- meaning of Section 201(b) of the Communications Act

of 1934, as.amended, or are, or will be, unduly discrim-

-inatory or preferential i in violation of Section nee?

of said Act;

(b) Whether, in the light of facts deveined’ in con- °

“tection with the foregoing issues, the Commission, in .

accordance with the provisions of Section 205 of the

Act, should prescribe tariff hoe deri will per- .

mit the use of the Carterphone device in connection.

with interstate and foreign message toll telephone serv- -

ice and, if so, the kind of tariff eae tee which aan

be so prescribed ;

. > & the aforesaid 4 tariff vegulatinie of the telephone

companies may not properly be construed to prohibit tele-

- phone users from attaching the Carterphone device to the

.. facilities of the telephone companies for use in connection |

with interstate or foreign message toll telephone’ Services,

what*action, if any, should be taken by the Commission 7

with respect thereto. _

IT IS FURTHER. ORDERED, That chins F. Carter,

Carter Electronics Corporation, the American Telephone

ae al

and Telegraph Co., the General Telephone Company of the.

Southwest, and the associated Bell System companies listed ~

in the attached Appendix are hereby made parties respond-

ent.to this proceeding and a copy of this Order shall be

served upon such: party respondents ; :

IT IS FURTHER ORDERED, That any suai: :

; connecting: and other participating carrier, listed as such

_. in-the aforesaid tariff, the United States Independent Tele-

phone Association, the Gerferal Telephone and Electronics

Service Corporation, the National Association of Railroad

and Utilities Commissioners and any state regulatory body

is HEREBY GRANTED leave to intervene upon the filing

of a notice of intention” to appear and participate in these

proceedings within 30 days from the date of the publication

of this Order in the Federal Register;

IT IS FURTHER ORDERED, That a hearing examiner

SHALL BE DESIGNATED to preside in the proceedings

ordered herein who shall prepare an initial decision on, all

of the issues as provided i in Section 1. 267 of: the Commis-

sion’ s Rules.

FEDERAL COMMUNICATIONS a ra caiare |

Ben F. Waple :

Secretary

hice

Released : Onion 21, 1966

APPENDIX F —— °

Before the epee & . oo

Faderal Communications Commission

| | Washington, D. C. 20554

FOC 66M-1569

92182 °

In the Matter of | 5

Use of the Carterphone

Device in Message. ,

Toll: Telephone § Service

+ DOCKET NO. 16942

: ORDER |

A prehearing conference having been held on November

17, 1966, at which certain agreements were reached and

certain rulings were made; — :

ITIS ORDERED, This 17th re of November, 1966, t that:

(1) The parties’ direct cases on Issues 1, 2 and 3 may be:

presented either orally or, in whole or in pant, in the

ferm of sworn, written exhibits;

( 2) On or before J anuary 9, 1967, the parties shall ex-

change copies of their said exhibits, and shall also

exchange a list of their witnesses to be presented

orally togethér with a brief — as to the scope

_ of each witness’s testimony ; i

(8). Any party wishing to all for cross-examination the

sponsor of any other parties’ exhibit shall give notifi-

cation thereof on or before January 16, 1967 ;

‘ rps

Released: November 21, 1966:

ee Oey

Tere

(4) Hearing limited to the ariiee’ direct, affirmative.

cases on [§sues 1, 2 and 3 shall commence on January

~ 23, 1967 at 10:00 a.m. in the offices of the Commission

at Washington, D. C. .

ee - Cuester F. Navmowicz, JR. ,

Kays Hearing Hixaminer o

Federal Communications —

_ Commission

ie)

Baw F. Warns

' Secretary:

1The specification of hearing site is, of course, subject to the

action of the Chief Hearing, Examiner on ane now pend-

ing before him. ;

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.