# Opposition Brief — Bessemer & Lake Erie Railroad Co. v. Wheeling-Pittsburgh Steel Corp. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386009_0614%3A03 ## Record - **Collection:** Supreme Court brief - **Document type:** Opposition Brief - **Published:** January 1, 1993 - **Citation:** 510 U.S. 1032 ## Text roo ' c ™ ' ouDrens Vout, > No. 93-643 IN THI Siyrenw Cort of the United States 4" OcTOBER TERM, 1993 BESSEMER & LAKE ERIE RAILROAD COMPANY, Petitioner, Vv. REPUBLIC STEEL CORPORATION, ef al.. ) la Respondents, On Petition for a Writ of Certiorari to the United States Court of Appeals for the Third Circuit BRIEF IN OPPOSITION OF RESPONDENTS C.D. AMBROSIA TRUCKING COMPANY, ERIE-WESTEKN PENNSYLVANIA PORT AUTHORITY AND CODAN CORPORATION, AND TFAURO BROTHERS TRUCKING COMPANY Mi | |) ) } a Ey Lett Wit 7 Cs Bee | { [’ Cr / 1 P t)| ‘| 11 P | iH f f { — ‘ } Tt ; Phuhy { ( } ANN ( ( i I ) R- T's o' A | 1 4 i N\ vi \ | \\ Su) (600) W. D.C. 20005 ’ ryt t7 Counsel for La iro brothers Trucking Company WILSON - EPES PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001 QUESTIONS PRESENTED 1. Whether the holding of Keogh vy. Chicago & N.W. Ry. Co., 260 U.S. 156 (1922), should be expanded to bar antitrust damages for any party—customer or competitor —when: (a) plaintiffs did not challenge the lawfulness of any rate filed with the Interstate Commerce Commis- sion and did not seek any rebate of alleged filed-ra.e overcharges; (b) damages were not measured by refer- ence to hypothetical regulated railroad rates: (c) the jury was specifically instructed that liability could not be prem- ised on rate-related claims; and (d) the court of appeals “conclude[d] from the evidence produced that .. . plain- tiffs proved at trial an antitrust conspiracy that was not grounded in rate-related claims.” 2. Whether, assuming Keogh is expanded to bar such antitrust damage claims by shippers, it should further be expanded to bar damages for competitors, where: (a) this Court’s decisions and those of the lower courts have consistently declined to apply Keogh to competitor claims; (b) the competitor claims do not create the risk of dis- criminatory rebates that was the concern in Keogh, and (c) the competitors’ claims are not measured by reference to hypothetical rates that would require Interstate Com- merce Commission approval. 3. Whether Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977), should be extended to bar the antitrust damage claims of the steel company plaintiffs, notwithstanding that the court of appeals in this and a related case held those steel companies to be directly-injured victims of a conspiracy to exclude competition. (i) aa il RULE 29 STATEMENT Pursuant to Rule 29.1, there are no parent or sub- sidiary corporations to be listed. TABLE OF CONTENTS TABLE OF AUTHORITIES STATEMENT A. The Facts B. District Court Proceedings 1. Pretrial Proceedings .. 2. Trial Proceedings . 3. Post-trial Proceedings ................ C. The Third Circuit’s Decision REASONS FOR DENYING THE WRIT 1. THE COURT OF APPEALS CORRECTLY APPLIED SETTLED LAW RESPECTING KEOGH A. The Limits of the Keogh Doctrine Are Well- Established and Were Properly Respected by the Court of Appeals B. There Is No Need For Plenary Review of the Court of Appeals’ Holding That Keogh Does Not Bar Damages In Suits Brought By Com- petitors Il. B&LE’S ILLINOIS BRICK ARGUMENT IS INAPPLICABLE TO THE COMPETITOR PLAINTIFFS, AND INCORRECT WITH RE- SPECT TO THE STEEL COMPANIES CONCLUSION (iil) Page Oo) | iv TABLE OF AUTHORITIES Cases Page Associated General Contractors v. California State Council of Carpenters, 459 U.S. 519 CRE sitssidcsouadeseussakaneecoanaeeca eee 26, 27 Barnes v. Arde n Mayfair, Inc., 759 F. 2d 676 (9th Cir. 1985)... DRED Bre sanen hae 15 CLR. v. McCoy, 484 U Ss. 3 (1987). Rid Te spo eee hd 18 Capital Freight Serv. v. Trailer Marine Trans- port, 704 F. Supp. 1190 (S.D.N.Y. 1989) ............ 15, 24 City of Groton v. Connecticut Light and Power Co., 662 F.2d 921 (2d Cir. 1981) ....................15, 22, 23 City of Kirkwood v. Union Electric Company, 671 F.2d 1173 (8th Cir. 1982), cert. denied, 459 is St. 5 | er eee ae 15, 22, 23 City of Mishawaka, Indiana v. Indiana & Michi- gan Electric Company, 560 F.2d 1314 (7th Cir. 1977), cert. denied, 436 U.S. 922 (1978) ........... 15 Clipper Exxpress v. Rocky Mountain Motor Tariff Bureau, 690 F.2d 1240 (9th Cir. 1982), cert. dented, 459 U.S. 1227 (1988)............................-..... 15, 23 Concord v. Boston Edison Co., 915 F.2d 17 (1st Cir. 1990), cert. denied, 499 U.S. 931 (1991)... 23 Dart Drug Corp. v. Corning Glass Works, 480 F. a, ROR CE Tete BCID ohcndancnecsteesccer eres 26 Delaware & Hudson Ry. Co. v. Conrail, 654 F. Bane. TIGG CHIN. F . UBC). vcccen-cccncnvecesceservsnvies 15, 24 Essential Communications Systems, Inc. v. AT&T, 610 F.2d 1114 (3d Cir. 1979) ..................... 22 Federal Maritime Comm'n v. Seatrain Lines, Ine. ee a ee I a laa ss eae 14 Fontana Aviation, Inc>v. Cessna Aircraft Co., 617 F.2d 478 (7th Cir. 1980) 2.0.0... 26 Frontier Enterprises, Inc. v. Amador Stage Lines, 624 F. Supp. 137 (E.D. Cal. 1985) —.....__.. 24 Georgia v. Pennsylvania R.R. Co., 324 U S. 439 2) URS ane iets Kainisssyanter asses ar esuie nn me et nner Under the statutory provisions in effect during the bulk of the alleged conspiracy period, any party, including the ICC, cou!d initiate proceedings to determine whether the rates so promulgated were reasonable and/or whether they were issued pursuant to appropriate agreement procedures.® If the ICC concluded that the filed ° The defendant railroads are parties to the Eastern Railroads Agreement. See 277 ICC 279 (1950). The Coal, Coke and Iron Ore Committee (CCIOC) was established by defendants to carry out the agreement by, inter alia, meeting publicly to discuss and propose rates. Plaintiffs charge that defendants failed to comply with the agreement procedures in setting rates, although this charge is only a corollary to plaintiffs’ larger concern with the railroads’ predatory behavior. 6 oe changes have been made in the jurisdiction of the ICC by recent legislation. See The Staggers Rail Act of 1980, Pub. L. No. 96-448, 94 Stat. 1895 | (1980); The Railroad Revitalization And Regulatory Reform (4R) Act of 1976, Pub. L. No. 94-210, 90 Stat. 31 (1976). Although the ICC's power to regulate rates has been curtailed, it still possesses the authority to ensure that rates are promulgated pursuant to approved agreements and to award damages, costs, and attorneys fees as reparation for illegal 8A rates were improper for any reason, it could disapprove them and, if circumstances warranted, award the complainant its actual damages, together with costs and attorneys fees. See 49 U.S.C. §§ 10706, 10762, 11705. An exhaustive review of the legislative history of the Reed-Bulwinkle Amendments is found in Square D Co. v. Niagara Frontier Tariff Bureau, Inc., No. 84-7831 (2d Cir. Apr. 9, 1985), in which the court rejected every argument pressed by plaintiffs here, and concluded that the rule of Keogh is still valid.” In light of the admirable summary presented by Judge Friendly in Square D, I will present here only a brief capsulization of the relevant history. In Georgia v. Pennsylvania R.R. Co., 324 U.S. 401 (1945), decided shortly before the enactment of Reed-Bulwinkle, the Court held that Keogh barred Georgia from recovering treble damages in its parens patriae suit against defendant railroads for price-fixing on the basis of rates paid by private shippers. The Court noted, however, that Keogh was not a bar to government or so-called public antitrust actions against the railroad; nor did it prevent private shippers from obtaining injunctions against conspiratorial behavior, a matter not within the jurisdiction of the ICC. See id. at 454-55. Nor does Keogh apply to suits by competitors. See, e.g., Pinney Dock and Transport Co. v. Penn Central Corp., No. C80-1733, slip op. at 46 (Memorandum and Order denying Motion to Dismiss) (N.D. Ohio Aug. 26, 1983). rates. In any event, much of the conspiracy here alleged occurred before the enactment of the amendments alluded to above, and plaintiffs have not suggested that these amendments are in any way outcome determinative. 7 As transferee judge, I am bound to apply the law as if | were sitting in the transferor district. See Manual for Complex Litigation § 5.22 n.410 at 197 (2d ed. 1984). Hence, I am bound by the Second Circuit's - determination in Square D, supra, in ruling on the present motion in the Republic Steel case, which was filed in the Southern District of New York. The other four cases were filed in the District of Columbia; I am aware of no binding precedent treating Keogh in that Circuit. iiaiatietaaeeineeeinnamamaall 9A There being a general consensus to the effect that the public would be better served by filling some of the gaps alluded to in Georgia, at least to the extent that railroads could not be subjected to antitrust liability by any entity for the appropriate joint setting of rates, routes, fares, classifications, etc., Reed-Bulwinkle was enacted. As Judge Friendly points out in Square D, Congress had been reminded of Keogh several times during the hearings that preceded the bill's enactment (see Square D, supra, slip op., at 3269-70), and nevertheless announced: The bill leaves the antitrust laws to apply with full force and effect to carriers, so far as they are now applicable, except as to such joint agreements or arrangements between them as may have been submitted to the Interstate Commerce Commission and approved by that body .... H.R. Rep. No. 1100, 80th Cong., 2d Sess., reprinted in 1948 U.S. Code Cong. & Ad. News 1844, 1848 (emphasis added). Several courts have thus rightly held that Keogh was not swallowed up by Reed-Bulwinkle. See, e.g., Square D, supra; In the Matter of Wheat Rail Rate Antitrust Litigation, Nos. 84- 1883, 84-1505 (7th Cir. Apr. 17, 1985). As I noted above, Keogh held that shippers could not pursue antitrust claims for treble damages against railroads on the basis of filed rates (although plaintiffs dispute this latter characterization, see discussion infra). Reed-Bulwinkle extended that protection by granting immunity against suits from all comers, not simply shippers, for all matters, not simply filed rates, that were jointly undertaken in compliance with an ICC-approved agreement; thus, the simple act of filing rates would not be sufficient to warrant Reed-Bulwinkle protection, but would, under the right circumstances, warrant Keogh protection. In view of Congress’ expressed intention that Reed-Bulwinkle only add to the railroads’ existing antitrust protection, it would be improper to shun Keogh on this basis. 10A Finally, as Judge Friendly noted: Beyond this, the legislative history contains no suggestion of any intention to overrule Keogh, and it is somewhat difficult to suppose that an act for relief of railroads silently operated against them in so material a respect. Square D, supra, slip op. at 3269. Plaintiffs next contend that their cases do not fall within the proscriptions of Keogh, since (1) Keogh was a "rate" case, and in this case a much broader conspiracy is alleged, rates being only a "symptom" of the problem, and (2) the rates in Keogh had been approved by the ICC, whereas the rates charged here were simply filed with the ICC, thus occasioning no conflict between agency and court jurisdiction. I do not find these arguments persuasive. Although it is true that the conspiracy alleged goes farther than the mere fixing of rates, that does not divest the court of its duty to ensure that antitrust immunity is afforded as the law directs. The attempts of both sides of this litigation to label it as a rate matter or a monopolization matter do little to advance the inquiry. I am aware of no law that dictates that I view these actions with tunnel vision; on the contrary, a legal line has been drawn by the Keogh court which I am not free to cross, no matter how “artificial” it may seem to plaintiffs. See, e.g., Square D, supra, slip op. at 3248-49, 3282 ("A shipper [should be allowed to amend its complaint and] may recover damages if it can show that carriers caused injury to the shipper's business or property other than by higher tariffs, such as by impeding its ability to transport its goods to other markets and thus decreasing its sales."). The portion of plaintiffs’ damage claims which involves rates must, under Keogh, be separated from the rest of the action. And this is so whether the rates at issue have been approved by the ICC or simply filed with that body. See, 11A e.g., Square D, supra, slip op. at 3280. As noted above, Justice Brandeis clearly stated in Keogh that the filed rate is "the legal rate" under the ICA unless and until the rate is disallowed by the ICC or otherwise displaced. 260 U‘S. at 163. Notwithstanding this straightforward language, plaintiffs argue that subsequent Supreme Court decisions have revealed that ICC approval is a prerequisite to Keogh immunity. In Hanover Shoe, Inc. v. United Shoe Machinery, Inc., 392 U.S. 481 (1968), the Court rejected the "passing on" defense to claimed overcharges in antitrust suits. The Hanover Court took note of Keogh in a footnote, since Justice Brandeis had appeared to give credence to that defense. He wrote that the same legal rate had been exacted from all shippers, and that a lower rate (one that would have existed but for the conspiracy) might not have benefited [ Keogh] .... Under these circumstances, no court or jury could say that, if the rate had been lower, Keogh would have enjoyed the difference between the rates or that any other advantage would have accrued to him. The benefit might have gone to his customers, or conceivably, to the ultimate consumer. Keogh, 260 U.S. at 165. The Hanover Court stated that in Keogh "[b]ecause the rates had been approved as reasonable after a proceeding before the Interstate Commerce Commission, the shipper was held to have no cause of action under the antitrust laws .... We ascribe no general significance to the Keogh dictum for cases where the plaintiff is free to prove that he has been charged an illegally high price.” Hanover, 392 U.S. at 491 n.8. It is thus clear that the concern of the Hanover Court was to distance itself from one of several arguments advanced by Justice Brandeis in support of his ruling in Keogh. The Court did not, and indeed had no need to focus on the issue of filed rates versus approved rates. Hence, it would be folly to hold that the 12A dictum in Hanover rejecting the dictum in Keogh in any way detracts from the holding of the latter.® In Carnation Co. v. Pacific Westbound Conference, 383 U.S. 20 (1966), the Court held that a shipper in foreign commerce could maintain an antitrust action for treble damages against maritime conferences and their members based on rates set without prior approval of the Federal Maritime Commission (FMC) pursuant to the Shipping Act. The Shipping Act, like the ICA, provides the commercial maritime industry with limited antitrust immunity for rates jointly set in accordance with FMC-approved agreements. See 46 U.S.C. § 814. Without mention of Keogh, the Court held that if rates were set pursuant to an unapproved agreement, the carriers could be subjected to antitrust liability for joint rate-setting. Paying due heed to the doctrine of primary jurisdiction, the Court concluded that such an antitrust action, whether for damages or for an injunction, should be stayed pending the FMC's resolution of whether the rates were set in conjunction with an approved agreement. Id. at 221, 223. If the FMC should find that the rates were not lawfully set, the shipper would then have the option of seeking recovery under the Shipping Act or under the antitrust laws. Id. at 224. The shippers in the present cases do not overtly argue that Carnation overrules Keogh sub silentio, but that it limits its application to approved rate cases. But the Carnation Court was concerned with unapproved agreements, not unapproved rates.? Moreover, it was construing an 8 The same may be said with respect to Terminal Warehouse Co. v Pennsylvania R.R. Co., 297 U.S. 500 (1936), which the plaintiffs argue is inconsistent with Keogh. But, although the Terminal Warzhouse Court found Keogh “apposite and helpful", it stated that it was not “decisive”. Id. at 511. Its musings regarding when an antitrust action may be pursued by a shipper are dicta and cannot be construed to alter Keogh. Id. at 515. 9 Indeed, one might venture that if Keogh were to be read as an approved rate case, the Carnation Court would have cited it as support for its position that in un- or disapproved rate cases, an antitrust action could lie. 13A exemption contained not in the ICA, but in the Shipping Act, a statute which, albeit similar in many respects to the ICA, is not at issue in the present cases. Nor was the Keogh Court confronted with a statutory exemption of any kind, since none existed in the ICA at that time. Hence, I must reject plaintiffs’ contention that Keogh does not apply to this case, and with it their arguments regarding the changing regulatory climate. Keogh continues to be cited by the Court as good law. See, e.g., ATA v. McLain v. Real Estate Board of New Orleans, Inc., 444 U.S. 232, 243 (1980). See also Minsky v. Auto Driveway Co., 757 F.2d 718 (7th Cir. 1984); Square D, supra; Wheat Rail Cases, supra; Essential Communication Systems, Inc. v. American Telephone & Telegraph Co., 610 F.2d 1114, 1121-22 (3d Cir. 1979). Although plaintiffs may well be correct in arguing that the Supreme Court would elect to overrule Keogh if it had the opportunity to do so today, that is not for this court to decide. Thus, insofar as plaintiffs’ damage claims are based on rates charged the plaintiffs by defendant railroads -- all dock-handling and storage rates at railroad docks and railroad line haul rates (class or commodity) from private and railroad docks -- their claims will be dismissed. As I read the various complaints, this leaves the steel companies with two presently animated antitrust claims: (1) that they could have paid lower dock-handling rates (sooner) to the private docks than they did to the railroad docks if the railroads had not retarded the development of the self-unloader industry; and (2) that they could have paid lower land transport rates (sooner) to the truckers, had the railroads not restrained competition by that industry and monopolized line-hauling from their docks.!° In my view, 10 In Jones & Laughlin's summary of facts, presented to the transferor court but not alluded to in its present motion to dismiss, it contends that the railroads intended to “cramp” the trucking industry by, inter alia, threatening “elimination of services to steel companies.” Puzzlingly, however, no such allegation of a refusal to deal by the railroads is found in any of the present steel company complaints, nor for that matter, in the — Oe ‘ , 14A plaintiffs’ generalized claims regarding savings they would have realized had defendants not impeded self-unloader development and had they been able to choose the most economic combination of transportation alternatives come within these two categories. Defendants vigorously contest plaintiffs’ standing to pursue these remaining claims. B. Antitrust Standing The definition of who may be an antitrust plaintiff has been an elusive one. From the wording of § 4 of the Clayton Act (15 U.S.C. § 15), one might not have imagined that such a problem would evolve: [A]ny person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor 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 controversy, and shall recover threefold the damages by him sustained and the cost of suit, including a reasonable attorney's fee. Read literally, this all-encompassing language would seem to contemplate litigation recoveries by all who claim to have suffered any form or degree of antitrust injury. But the courts do not read this section literally; indeed, over the years, the appellate courts have devised a variety of tests, through which prerequisites for maintaining suit beyond the simple allegation of injury have been engrafted upon this language. See Merican, Inc. v. Caterpiller Tractor Co., 713 F.2d 958, 964, n.12 (3d Cir. 1983) (and cases cited therein). complaints of the trucking companies. Hence, none is now properly before the court. 15A In Associated General Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S. 519 (1983), the Supreme Court attempted to harmonize the various standards by setting forth a list of factors which are to “circumscribe and guide the exercise of judgment in deciding whether the law affords a remedy in specific circumstances." Id. at 537. As elucidated by our court of appeals in Merican, supra, those factors are (1) the causal connection between the alleged antitrust violation and the harm to plaintiff (specific intent to harm plaintiff is not required); (2) the nature of plaintiff's injury (Is it the sort of injury Congress intended § 4 to address, and does it flow from the unlawful nature of defendant's acts?); and (3) the directness or indirectness of the injury. Merican, 713 F.2d at 964-65 & nn.13-15 (citing Associated General Contractors, 459 U.S. at 537-40). The latter factor requires an analysis of (a) whether there exists ‘an identifiable class of persons whose self-interests would normally motivate them to vindicate the public interest’; (b) the speculative nature of the damages; (c) the potential for duplicative recovery; and (d) the danger of the court becoming involved in complex apportionment of damages. Associated General Contractors, 459 U.S. at 541-44; Merican, 713 F.2d at 965 n.15. This final set of considerations is precisely the one focused upon in Hanover Shoe, Inc., supra, and Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977); in Hanover, the Court rejected the "passing on" (of the overcharge) defense to the claim of an innocent middleman in a price- fixing scheme, and in Illinois Brick, the Court completed its thought: it barred the indirect purchaser from maintaining an antitrust action based on the overcharge. Although plaintiffs clearly allege the requisite form of injury, and thereby satisfy the second requirement of Associated General Contractors, their claims cannot withstand the scrutiny mandated by factors 1 and 3. With respect to factor 3, the Third Circuit's opinion in Mid-West Paper Products Co. v. Continental Group, 596 F.2d 16A 573 (3d Cir. 1979), is instructive. The Mid-West Paper court applied the Hanover Shoe-Illinois Brick rationale to a case without a middleman,!! a case analogous in many respects to those presently under consideration. The court held that a customer of a non-conspiring competitor of defendant supplier could not maintain an antitrust action based on an “umbrella” pricing theory (ie., the notion that the effect of defendant's conduct in an oligopolistic market was to inflate the prevailing market rates charged by all competitors in the relevant market, and not simply by defendant). In an analysis which mirrors that prescribed by Associated General Contractors,12 the Court conceded that the nature of plaintiff's injury was within the reach of the antitrust laws (factor 2), but ruled that the chain of causation was too speculative (factor 1) and the amount of the damages too conjectural (factor 3). Id. at 584. Said the Court: The outcome of any attempt to ascertain what price the defendants’ competitors would have charged had there not been a conspiracy would at the very least be highly conjectural. As noted in Hanover Shoe, "[a] a wide range of factors influence a company's pricing policies. Normally, the impact of a single change in the relevant conditions cannot be measured after the fact; ... ." Id. The Mid-West Paper opinion was not met with universal agreement (see, e.g., In re Uranium Antitrust Litigation, 552 F.Supp. 518, 523 (N.D. Ill. 1982) (and cases cited therein).!% 11 Criticism of the Mid-West Paper court should now be abated in light of the ruling in Associated General Contractors to the effect that these factors are of concen in any antitrust case. 12 The Mid-West Paper analysis was cited with a proval by the post- Associated General Contractors Merican court. See 713 F.2d at 965 n.15. 13 But neither the Second Circuit nor the District of Columbia Circuit has rejected Mid-West Paper; indeed, the Second Circuit embraced its reasoning in Reading Industries, Inc. v. Kennecott Copper Corp., 631 F.2d 10, j 17A Nevertheless, I am persuaded that the Hanover Shoe-Illinois Brick rationale applies with even more force in the present circumstances (where plaintiffs are only potential customers of non-conspiring competitors) than in the Mid-West Paper scenario. With respect to plaintiffs’ first claim -- that they could have paid less sooner to the private dock owners had the railroads not retarded the development of self-unloaders -- the plaintiffs ask the Court to engage in an exercise in prophecy. I have not lost sight of the fact that plaintiffs claim they can prove that the private docks did charge less than the railroads when they finally began to avail themselves of the self-unloaders. Nevertheless, had the railroads not interfered, when would the private docks have begun to handle the self-unloaders? Moreover, even if a date could be pinpointed with reasonable accuracy, there is no assurance that the rate charged would be the rates alluded to by plaintiffs. As the Mid-West Paper court observed, quoting Hanover Shoe, "[a] wide range of factors influence a company's pricing policies.” 596 F.2d at 584 (quoting 392 U.S. at 492). This is precisely the sort of complex apportionment of damages which the Supreme Court has warned must be avoided. Furthermore, there exist in this litigation two identifiable classes which are actively pursuing their antitrust remedies against the defendants -- the self-unloader manufacturer, Litton, and the non-railroad dock owners, Pinney and Erie-Western. I also note my firm belief that these damages are actually claims for overcharge in other clothing.!* Although plaintiffs claim to be seeking recovery for "lost savings,” this is only an exercise in semantics. What plaintiffs actually seek is reimbursement for the inflated rates they suffered as a result of defendants’ predatory practices; while this brings 14 (2d Cir. 1980), cert. denied, 452 U.S. 916 (1981). Hence, I perceive no problem with alluding to it here. See n.7 supra. 14 The tortured nature of the description of the surviving claims is probably in direct proportion to the tenuousness of their causation. In any event, I need not rule on this factor in view of the findings expressed above. 18A plaintiffs out from under the constraints of Illinois Brick (i.e., they are no longer indirect potential purchasers), it runs them squarely into the brick wall of Keogh. !° I need not repeat the above analysis with respect to plaintiffs’ claim for denied savings on truck hauling because of defendants’ conspiratorial and monopolistic behavior; it is the same. I will only add that five trucking concerns are currently pursuing their antitrust remedies against the defendants in this MDL. All of plaintiffs' damage claims must therefore be dismissed. But plaintiffs will be granted leave to amend their damage claims in accordance with this Memorandum, if it is possible for them to do so. See Square D, slip op. at 3248-49 (quoted at p. 12 supra). II. PLAINTIFFS' CLAIMS FOR INJUNCTIVE RELIEF Neither Keogh nor the antitrust standing restrictions that have grown out of § 4 affect plaintiffs’ ability to maintain actions for injunctive relief (although, curiously, no one has addressed this issue). See, e.g., Square D, slip op. at 3280-81; Weiss v. York Hospital, 745 F.2d 786, 806-07 (3d Cir. 1984). The only possible complication with respect to this issue is whether the discretionary doctrine of primary jurisdiction 15__No matter which view is taken of these claims, Blue Shield of Virginia v. McCready, 457 U.S. 465 (1982), which plaintiffs advance in support of their position, is inapposite. In McCready, plaintiff challenged Blue Cross’ olicy of refusing to reimburse subscribers for fees paid to psychologists or psychotherapy, while at the same time reimbursing such fees when paid to psychiatrists. The Court noted at the outset that the Illinois Brick rationale did not apply since there was no risk of duplicative recovery and nothing speculative about the damages (precisely equal to McCready's out-of-pocket expenses). Moreover, the court observed that McCready's injury was not remote, since "it was a necessary step in effecting the ends of the alleged conspiracy.” Id. at 479. McCready is readily distinguishable from the present ae since here the indirect damages are clearly speculative and since the savings allegedly denied the plaintiffs did not constitute a "necessary step” in the effectuation of the yer Soo -- they are consequential. And I note, a rhage gw ff that McCready cannot be construed to impinge on the holding of the later- decided Associated General Contractors, supra. 19A requires that the actions be stayed pending referral to the ICC. In my view, neither stay nor referral is required. The policy underlying primary agency jurisdiction is to avoid conflict between the roles of court and agency, and to utilize special agency expertise while conserving the resources of the court. In these actions, plaintiffs seek a finding that defendants’ conduct violated antitrust laws and an injunction ordering an end to that behavior and barring defendants from resorting to such illegal combinations in the future. The ICC does not have the power to issue such an injunction. See Georgia, 324 U.S. at 454-55, cited in Square D, slip op. at 3281. Moreover, there are no underlying facts to be established that could best be sifted by the ICC; the issue here is not whether the railroads conformed to a rate agreement, but whether they engaged in a broad-based conspiracy. As a panel of the District of Columbia Circuit noted in the criminal adjunct to this civil litigation: [Reed-Bulwinkle] immunity reaches only those actions factually taken “in conformity with" the rate agreement and the terms and conditions laid down by the ICC. It does not sweep within it a larger conspiracy which utilizes a Section 5a rate bureau as a means to an end; it does not legitimate illegal schemes which happen to coincide at points with the legitimate actions of a rate bureau. United States v. Bessemer and Lake Erie R.R. Co., 717 F.2d 593, 600 (D.C. Cir. 1983). In view of this, I perceive no reason why the matter, now devoid of all rate-based damage claims, should be referred to the ICC; plaintiffs may proceed with their claims for injunctive relief. !¢ 16 Although, as I noted above, neither Sharon nor National specifically requested injunctive relief, they did include catch-all requests and hooey the court's jurisdiction, inter alia, on 15 U.S.C. § 26 (§ 16 of layton Act) which addresses injunctive relief. Hence, their complaints will be construed to include such claims. 20A Ill. DI I BI AIM Plaintiffs Jones & Laughlin, National, and Wheeling- Pittsburgh also charge defendants with violations of the antitrust laws of the District of Columbia. See D.C. Code Ann. §§ 28-4501, 28-4502, 28-4503, 28-4508. Defendants assert that these pendent claims must be dismissed since (1) the D.C. Code must be construed in a manner consistent with federal law (which, in light of the conclusions expressed above, would leave standing plaintiffs’ injunction claims); (2) none of the trade or commerce alleged to have been restrained is within the District of Columbia; and (3) application of the D.C. Code to these cases would violate the Commerce Clause of the U.S. Constitution. In my view, detendants’ second argument is dispositive; in order to obtain relief under District of Columbia law, plaintiffs must allege that defendants’ conduct restrained trade in the District. That law provides: Every contract, combination in the form of a trust or otherwise, or conspiracy in restraint of trade or commerce, all or any part of which is within the District of Columbia, is declared to be illegal. D.C. Code Ann. § 28-4502. Section 28-4503 provides: It shall be unlawful for any person to monopolize, attempt to monopolize, or combine or conspire with any other person or persons to monopolize any part of trade or commerce, all or any part of which is within the District of Columbia. In my view, the above-quoted language, read together and individually,!” clearly requires that, before the alleged 17 Admittedly, a strained reading of § 28-4501 could lead one to conclude that any conspiracy, etc., any part of which occurs in the District, which has as its effect the restraint of trade anywhere (in or out of - the District), is illegal. But the “Ey of the next section counsels that such an interpretation would be unwise; for various reasons of grammatical immutability, it clearly demonstrates that the phrase “all or a 21A offensive conduct can rise to the level of an antitrust violation, it must restrain trade or commerce in the District of Columbia. In so construing the statutes to require local effect as a jurisdictional prerequisite, I do nothing unusual. I note first that the stated purpose of the law is "to promote the unhampered freedom of commerce and industry throughout the District of Columbia by prohibiting restraints of trade and monopolistic practices.” D.C. Code Ann. § 28-4501(b). Clearly, the concern is with local trade. Second, this chapter of the Code also provides that [i]t is the intent of the Council of the District of Columbia that in construing this chapter, a court of competent jurisdiction may use as a guide interpretations given by feceral courts to comparable antitrust statutes. Id. § 28-4515. Section 1 of the Sherman Act is a comparable antitrust statute: "Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several states, or with foreign nations, is declared to be illegal. . ." (emphasis added). Federal courts routinely construe the emphasized language as a jurisdictional prerequisite which must be pleaded. See, e.g., McLain v. Real Estate Board of New Orleans, 444 U.S. at 242. In this regard, plaintiffs’ complaints are lacking. In their complaints, they allege that all of the defendants reside, are found, transact business, or have agents in the District of Columbia. This allegation may suffice for Sherman Act venue purposes,!§ but clearly does not support plaintiffs’ any part of which is within the District of Columbia” is meant to modify “trade or commerce,” and not "contract, combination . . . or conspiracy." See also the following discussion in the text on the chapter's purpose and proposed rules of construction. 18 In so stating, I express no opinion on the motions of Norfolk and Western Railway to dismiss the Jones & Laughlin and Wheeling-Pittsburgh 22A claims for breach of the substantive law of the District of Columbia. In further support of venue in the District, Jones & Laughlin and Wheeling-Pittsburgh (but not National) do allege that "[c]ertain of the unlawful acts alleged herein were performed or had effects within the District of Columbia." Complaints of Jones & Laughlin and Wheeling-Pittsburgh, {@ 2 (emphasis added). But in those portions of their complaints entitled "Trade and Commerce", these plaintiffs (and National) state only that "[t]he violations of law alleged herein occurred in and substantially and adversely affected interstate and foreign commerce." Id. at 14; see also complaint of National, { 9. National thus makes no allegation of restraint of trade in the District of Columbia, while the allegations of Jones & Laughlin and Wheeling-Pittsburgh in that regard are, at best, ambiguous. In response to the present motions to dismiss, the latter argue only that they have "alleged a conspiracy which took place, at last [sic] in part, within the District of Columbia."!? Brief of Jones & Laughlin at 76 (emphasis added). Curiously, in response to defendants’ square challenge on the issue, plaintiffs do not even allude to the "effects" language contained in the venue allegations of their complaints. actions for lack of venue. That motion will be addressed in a subsequent Memorandum and Order. 19 Jones & Laughlin points out in its summary of facts that in the companion criminal case, it was established that two overt acts evidencing the conspiracy occurred in the District of Columbia: (1) the filing of tariffs with fhe ICC, and (2) a meeting of the conspirators on July 6, 1976, to discuss trucking competition. Summary at 30. Even assumin that I could properly take note of these "facts", plaintiffs’ claims woul still be deficient, since, in my view, the fact that a part of the conspirac occurred in the District of Columbia (while perhaps sufficient to establis venue, but see n.18 supra) is in itself insufficient to state a claim under District law. See n.17 supra. 23A Hence, I conclude that none of the three plaintiffs has properly pleaded its District of Columbia claims. Those claims will therefore be dismissed, but with leave to amend. An appropriate Order follows. 24A APPENDIX B IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA IN RE LOWER LAKE ERIE IRON ORE ANTITRUST LITIGATION THIS DOCUMENT RELATES TO JONES & LAUGHLIN STEEL, INC. V PENN CENTRAL CORP, et al. REPUBLIC STEEL CORP. y PENN CENTRAL CORP. NATIONAL STEEL CORP. Vv PENN CENTRAL CORP, et al. WHEELING-PITTSBURGH STEEL CORP. Vv PENN CENTRAL CORP, et al. SHARON STEEL CORP. v. PENN CENTRAL CORP, et al. MASTER FILE NO. MDL 587 CIVIL ACTION NO. 84-2135 CIVIL ACTION NO. 84-2079 CIVIL ACTION NO. 84-2134 CIVIL ACTION NO. 84-2138 CIVIL ACTION NO. 84-5562 25A _ ORDER NO. 4 AND NOW, this 5th day of June, 1985, in consideration of the motions of defendants Chesapeake & Ohio Railway Co., Baltimore & Ohio Railroad Co., Norfolk & Western Railway Co., Norfolk Southern Corp., Pittsburgh & Lake Erie Railroad Co., Bessemer & Lake Erie Railroad Co., Consolidated Rail Corp., and CSX Corp. to Dismiss the above-captioned actions or for a Stay Pending Reference of Certain Issues to the ICC, and the responses and replies thereto, it is ORDERED: 1. Defendants’ Motions are hereby GRANTED with respect to plaintiffs’ claim for damages, costs, and attorneys’ fees. Said claims are DISMISSED WITHOUT PREJUDICE. Plaintiffs may file amended complaints in accordance with the foregoing Memorandum within thirty (30) days of the date of this Order. 2. Defendants’ motions are hereby DENIED with respect to plaintiffs’ claims for injunctive relief. 3. Defendants’ motions are GRANTED with respect to the claims of plaintiffs’ Jones & Laughlin, Wheeling- Pittsburgh and National for relief pursuant to the District of Columbia Code. Said claims are DISMISSED without prejudice. Plaintiffs may file amended complaints in accordance with the foregoing Memorandum within thirty (30) days of the date of this Order. /s/ John P. Fullam } 4 ENTERED: 6-6-85 CLERK OF THE COURT 26A APPENDIX C IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA IN RE LOWER LAKE ERIE MASTER FILE IRON ORE ANTITRUST LITIGATION NO. MDL 587 THIS DOCUMENT RELATES TO JONES & LAUGHLIN STEEL,INC. _ : CIVIL ACTION v. PENN CENTRAL CORP, et al. NO. 84-2135 REPUBLIC STEEL CORP. : CIVIL ACTION v. PENN CENTRAL CORP. NO. 84-2079 NATIONAL STEEL CORP. : CIVIL ACTION v. PENN CENTRAL CORP, et al. NO. 84-2134 WHEELING-PITTSBURGH STEEL CORP. CIVIL ACTION v. PENN CENTRAL CORP, et al. NO. 84-2138 SHARON STEEL CORP. CIVIL ACTION v. : PENN CENTRAL CORP, et al. : NO. 84-5562 27A N IAL 11 FULLAM, Ch. J. FEBRUARY 12, 1987 In Pretrial Order No. 4 for this multidistrict litigation, I dismissed plaintiffs’ antitrust claims for treble damages, costs, and attorneys’ fees. The dismissals were without prejudice, however, and plaintiffs were allowed to file amended complaints. This they did, prompting defendants again to move for dismissal. The renewed motion will be granted in part and denied in part. Pretrial Order No. 4 details the background of this litigation. Allegations relevant to the present motion, presumed true, are as follows: Plaintiffs are steel companies that, from the early 1950s through the early 1980s, hired transport for ore from iron mines in Michigan, Minnesota, and Canada, to mills in Pennsylvania and Ohio. The ore traveled overland and aboard ships from the mines to docks on lower Lake Erie, and again overland to the mills. Through the early 1950s, ore left the mines in a mud-like form containing a relatively low concentration of iron. This raw material crossed the Great Lakes on ships that required special dock unloading equipment. The ships were owned and operated by companies whose conduct is not here being challenged. However, on lower Lake Erie most docks were controlled by defendants and, in Pennsylvania and Ohio, defendants also provided rail facilities used by plaintiffs. To supply these services, defendants invested in equipment to unload and carry the ore in this form. By the mid-1950s, mines began preparing ore for shipment by processing it into concentrated pellets of iron. This enabled development of cheaper transport services. 28A Specifically, the ore could be carried in self-unloading ships that obviated much of the old dock equipment and, for some inland routes, could be carried more efficiently by trucks than by trains. Whenever introduced, these services would have saved plaintiffs money. Recognizing the prospect of owning obsolete equipment in markets ripe for picking by competitors, defendants conspired to preserve (or increase) their profit margins. In concert, they fixed prices for dock and rail services that exceeded the amounts chargeable in fairly competitive markets. The set prices were protected by coordinated action to frustrate use of self-unloaders for lake transport, provision of dock services by independent operators, and truck carriage of ore. The protective strategy capitalized on defendants’ dominance of the market for dock services on the lower Lake Erie shore. At the docks they controlled, defendants sometimes refused to permit self-unloaders to discharge cargo and sometimes refused to let trucks pick up ore. When self-unloaders and trucks could gain access to the docks, defendants imposed non-cost-based charges that significantly reduced or eliminated plaintiffs’ economic advantages gained with the new technologies. Moreover, defendants blocked some would-be competitors from buying sites where new docks could be built and, where the blocking strategy failed, interfered with the non- conspirators’ construction and operation plans; defendants also discouraged investment in self-unloaders by lake transporters. Thus, for many years defendants postponed full-scale implementation of a new transport system whereby pelletized ore could be shipped on self-unloaders, modern docks, and trucks, perpetuating a more costly system of shipping by outdated vessels, wasteful docks, and trains. 29A I. These facts, if true, would demonstrate violations of the Sherman Act §§ 1 & 2, 15 U.S.C. §§ 1 & 2. They allegedly caused treble-able damages that plaintiffs, at pages 3-4 of their brief opposing dismissal, sort into seven categories (J 1-7). These claims will be assessed in four groups. A. All plaintiffs identify harms based on hypothetically lower prices that, but for the conspiracy, defendants would have charged for dock and rail services. Generally, plaintiffs claim "damages directly resulting from defendants’ fixing the charges paid by plaintiffs for unloading, transshipment and inland transportation services at artificially high and non-competitive levels." ¥7. Particularly, they claim "damages directly resulting from charges by defendants for unloading and transshipment services never rendered to plaintiffs." { 5. Under either theory, recovery would require estimation of what charges would have been accepted by the Interstate Commerce Commission (ICC). Such an inquiry is forbidden by Keogh v. Chicago & Northwestern Railway Co., 260 U.S. 156 (1922), reaffirmed in Square D Company v. Niagara Frontier Tariff Rate Bureau, Inc., 106 S. Ct. 1922 (1986). "In Keogh, the Court held that an action for damages consisting of the difference between rates set illegally and the rates that would have been set absent a conspiracy was barred because plaintiff's sole remedy was an action before the ICC." Barnes v. Arden Mayfair, Inc., 759 F.2d 676, 679 (9th Cir. 1985); see also Minsky v. Auto Driveway Co., 757 F.2d 718, 720 (7th Cir. 1984) ("A customer of a carrier, who was charged the filed rate, cannot maintain an antitrust action against the carrier for an alleged conspiracy in setting the rate.") (emphasis original). Keogh applies whether filed tariffs "result from a combination to file higher tariffs or from a combination to prevent others from taking 30A independent action to file lower tariffs," Square D Co. v. Niagara Frontier Tariff Bureau, Inc., 760 F.2d 1347, 1365 (2d Cir. 1985) (Friendly, J.), aff'd, 106 S. Ct. 1922 (1986), and applies even when defendant carriers cover up their conspiracy by failing to follow procedures specified in an agreement with the ICC, In re Wheat Rail Freight Rate, 759 F.2d 1305, 1313-16 (7th Cir. 1985), cert. denied, 106 S. Ct. 2275 (1986). Under this precedent, I will dismiss these claims. B. Concerning the market for lake transport services, plaintiffs make two sets of claims. National Steel Corporation, with an in-house fleet, claims "damages directly resulting from defendants’ delay and suppression of National's use of self-unloader technology ...." 2. The other plaintiffs, having hired lake transport services, claim "damages directly resulting from defendants’ foreclosure of self-unloading vessels . . ." from the lake transporters’ fleets. 71. These claims depend on proof that plaintiffs would have realized saviags whenever lake transporters began using self-unioaders. By quantifying the costs saved by lake transporters using self-unloaders, and from evidence of the lake transport industry rates of return, plaintiffs other than National offer to prove what prices they would have been charged for lake transport of ore. Such an endeavor might make sense in another context, but not to justify treble damages under the federal antitrust laws. Notwithstanding the broad language in 15 U.S.C. § 15, Congress clearly intended to limit the type of harms entitling victims to treble damages. Associated General Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S. 519, 529-35 (1983). Although "the infinite variety of claims that may arise" has prevented 31A announcement of "a black-letter rule that will dictate the result in every case," the Supreme Court instructs that "previously decided cases identify factors that circumscribe and guide the exercise of judgment in deciding whether the law affords a remedy in specific circumstances." Id. at 536- 37. The case most relevant for the present purposes is IIlinois Brick Co. v. Illinois, 431 U.S. 720 (1977). In Illinois Brick, the Court "held that treble damages could not be recovered be indirect purchasers of concrete blocks who had paid an enhanced price because their suppliers had been victimized by a price-fixing conspiracy.” Associated General Contractors, 459 U.S. at 544. To hold otherwise, the Court explained, would have created great unavoidable difficulties: if indirect purchasers could recover while suppliers’ claims against defendants were not correspondingly reduced, antitrust violators would be exposed to hextuple damages, far more than Congress envisioned and engendering complicated evidentiary efforts by indirect purchasers to prove how, precisely, the increased price charged to suppliers generated in increased prices charged by suppliers, 431 U.S. at 730-32; if courts attempted to apportion the harm suffered between suppliers and indirect purchasers, the pressure to adjudicate in one action the claims of all persons affected in some way by the conspiracy would create massive lawsuits with concomitant complexity, id. at 731 n.11 & 737-45. By preventing indirect purchasers from suing and by reaffirming the rule that defendants could not argue that indirect rather than direct purchasers were injured by antitrust violations, id. at 736-37 (citing Hanover Shoe, Inc. v. United Shoe Machinery Corp. , 392 U.S. 481 (1968)), the Court minimized the potential for complexity and gave one class of plaintiffs the full statutory incentive to sue, thus maximizing the chance that the most directly injured party would enforce the antitrust laws. The problems recognized in Illinois Brick are not limited to circumstances where defendants conspire to effect above- market fixed prices on sales to providers of goods or services to indirect purchasers. Therefore, in each case involving 32A purchasers from providers of goods or services whose prices might be elevated because of defendants’ antitrust violations, as here, judges must consider the policies underlying Illinois Brick to decide if lawsuits by the indirect purchasers could enable improper duplicative recovery or massive and complex litigation. Merican, Inc. v. Caterpillar Tractor Co., 713 F.2d 958, 967-68 & n.20 (3d Cir. 1983), cert. denied, 465 U.S. 1024 (1984). In general, under the “mutuality” principle, an indirect purchaser may sue if and only if the antitrust defendant may argue for a corresponding reduction in the provider's damages. Illinois Brick, 431 U.S. at 728. Justifications for such actions constitute passing-on theories. "Absent unusual circumstances, Illinois Brick and Hanover Shoe limit the use of passing-on theory in antitrust actions without regard to the parties’ characterization of the offense." In re Beef Industry Antitrust Litigation, 600 F.2d 1148, 1157 (5th Cir. 1979) (Wisdom, J.), cert. denied, 449 U.S. 905 (1980). Unusual circumstances have been recognized when the amount passed on is indisputably determinable, as with cost-plus contracts, and when the provider is either owned or controlled by a plaintiff or functionally united with a defendant, as a division or co-conspirator. E.g., Illinois Brick, 431 U.S. at 735-36 & n.16; see also von Kalinowsky, 16G Business Organizations: Antitrust Laws and Trade Regulations § 101.02[3] n.35 (Nov. 1986 Supp.) (collecting cases). Neither exception is pled in this case. Instead, plaintiffs’ claims for damages in the lake transport market closely resemble the claim made in Hanover Shoe. There, defendants attempted to monopolize a market by leasing, but refusing to sell, certain advanced technology. 392 U.S. at 483-84. This supported an action by would-be buyers of the machines, who could have reduced their production costs. Id. at 487. Defendants unsuccessfully urged the Supreme Court to approve a passing-on theory to the effect that plaintiffs were not damaged; in view of the prices then charged their customers (indirect purchasers). Id. at 487-94. Under the mutuality principle, those indirect 33A purchasers could not have sued defendants for potential reduced shoe prices that, but for the conspiracy, plaintiffs would have set. In the present context, by analogy, | conclude that the steel company plaintiffs other than National cannot succeed on this claim; damages related to the lake transport market should be pursued by more directly injured plaintiffs, the transporters that could have reduced their costs but for the conspiracy. In response, plaintiffs suggest that a simple proceeding could allocate damages between lake transporters and the mills. They propose to prove the price that, but for defendants’ conspiracy, lake transporters would have charged. The Supreme Court, however, has anticipated difficulties in such an endeavor: "A wide range of factors influence a company’s pricing policies. Normally the impact of a single change in the relevant conditions cannot be measured after the fact; indeed a businessman may be unable to state whether, had one fact been different (a single supply less expensive, . . . for example), he would have chosen a different price.” Id. at 492-93. Accordingly, I reject plaintiffs’ suggestion and will dismiss claims based on potential savings in the lake transport market by plaintiffs other than National. National's claim for damages in the lake transport market depends on evidence that defendants’ actions delayed introduction of the cheaper self-unloader technology by National; it does not implicate any hired lake transporters. No Keogh problem arises because damages will not be measured by reference to any tariffs filed with the ICC and, allegedly, the damages in significant part flow from defendants’ illegal activities other than price-fixing. See also Square D, 106 S. Ct. at 1925 (acknowledging the Second Circuit's decision that plaintiffs could amend their complaints to state possible claims for damages not arising from the filed tariffs"); Barnes, 759 F.2d at 679 (Keogh 34A inapplicable to antitrust violation interfering with markets tangential to those where defendants do business). Further, National's claim should not be barred by the rule against unduly speculative actions, because the causal connection is reasonably alleged, the injury is of a type Congress intended to prevent, no potential plaintiff suffers from this injury more directly, and no other plaintiff could pursue such recovery. See Associated General Contractors, 459 U.S. at 536- 45. Defendants respond with two contrary arguments. First, they suggest that National's claim should be dismissed because it creates potential for duplicative recovery. This might occur because National's claim depends on proof of its costs to buy self-unloaders, and Litton Industries also may be claiming damages for lost sales of such vessels (or parts thereof) to National, see Litton Industries, Inc. v. Penn Central Corp., No. C81-372 (N.D. Ohio). Given separate trials, it is argued, the price of sale proven by Litton may, to defendants’ detriment, exceed the cost of purchase proven by National. Assuming arguendo that Litton can claim treble damages for lost sales to National, the potential for duplicative recovery is not impermissible. Defendants’ antitrust violation affects the price of self-unloaders only to the extent that economies of scale come into play. This uncertainty cannot be of the type feared by the Supreme Court, because otherwise all companies losing business due to antitrust activity would face a claim-barring uncertainty in the cost of their inputs for production. This shows that defendants’ first argument proves too much. I reject it. Defendants’ second, related argument is that too much speculation would attend any attempt to prove how rapidly the self-unloader technology would have developed. | disagree. It cannot be denied that the technology did develop, so the only question is how much earlier the technology would 35A have been introduced, absent the alleged antitrust violations. Although this involves some uncertainty, if National can prove that defendants did delay use of self-unloaders, it proves a real harm; the magnitude of harm being made uncertain by defendants’ acts, and National, as a buyer of the product, being a party well placed to develop the facts, the claim is not too speculative. See also Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 123 (1969) (recognizing ‘practical limits of the burden of proof which may be demanded of a treble-damage plaintiff who seeks recovery for injuries from a partial or total exclusion from a market’). Accordingly, I will not dismiss National's claim for excessive costs incurred in lake transport. os Republic Steel Corporation claims "damages directly resulting from the delay in the construction and use of Republic's own dock facilities for the unloading and transshipment of iron ore." { 4. These facilities allegedly would have served self-unloaders at a net cost below the prices defendants charged, but were delayed both by the delay in building a self-unloader fleet and by defendants’ blocking strategies involving docks and inland transport. This claim provokes a two-pronged response by defendants. First, citing Associated General Contractors, defendants argue that the claim entails too much speculation to prosecute. However, any uncertainties relate to the measurement, not the direct causation of damages, and if defendants did violate the antitrust laws then they created the uncertainties. For the reasons I rejected the speculation defense with respect to National's individual claim, I reject the speculation defense with respect to Republic's individual claim. See also Pinney Dock & Transport Co. v. Penn Central Corp., 600 F.Supp. 859, 882-85 (N.D. Ohio 1983) (allowing claims by a non-railroad dock that allegedly lost business due to defendants’ conspiracy). 36A Defendants also argue that Keogh bars Republic's claim. This would require an untenably broad reading of Keogh, to the effect that if a party pays for services under a tariff filed with the ICC, then the party never can claim that antitrust violations prevented use of a cheaper but otherwise equivalent service. Keogh stands for the proposition that legislation creating the ICC's regulatory authority causes an implied repeal of the antitrust laws “only . . . in cases of plain repugnancy between the antitrust and regulatory provisions." United States v. Philadelphia National Bank, 374 U.S. 321, 351 & n.29 (1963); see also United States v. Radio Corp. of America, 358 U.S. 334, 347-48 (1959) (Keogh “emphasized the need for administrative uniformity and uniform rates"). Such plain repugnancy exists with respect to the determination of rates that defendants would have charged, but not with respect to costs that Republic would have incurred in operating a dock. Indeed, in this claim Republic makes no assertion that defendants’ dock tariffs were illegal, but only for damages caused by actions outside the ICC's exclusive jurisdiction, those constituting an illegal blockade of what, in effect, would have been a competitor dock. Competitor docks retain power to sue defendants in this case, Keogh notwithstanding. Pinney Dock, 600 F.Supp. at 878-82; see Essential Communications Systems, Inc. v. American Telephone & Telegraph Co., 610 F.2d 1114, 1121-22 (3d Cir. 1979). These docks will attempt to establish what, but for the conspiracy, would have been their costs, prices, and volume of business. Republic similarly deserves the chance to prove what would have been its costs and volume of ore off-loaded, from which its damages may be calculated. Accordingly, I will not dismiss Republic's claim for excessive expenditures to obtain dock services. 37A D. All plaintiffs join in raising two final claims. They seek "damages directly resulting from defendants’ elimination of competitive non-railroad dock facilities from the market of providing unloading and transshipment services to plaintiffs.” ¥ 3. They also seek "damages directly resulting from defendants’ elimination of competition from trucking in the market of inland transportation services to plaintiffs." { 6. These claims both depend on proof that the conspiracy delayed competitors’ entry into defendants’ markets (for dock services and inland transport) and that the competitors’ prices (for docks tailored to self-unloaders and for trucks) would have undercut defendants’ prices, with damages to be calculated by multiplying the difference between defendants’ actual and the competitors’ probable prices times the volume of ore shifted from defendants’ carriers to the competitors’ carriers. In response, defendants argue that Keogh and Associated General Contractors preclude plaintiffs’ claims. I disagree. 1. With respect to Keogh analysis shows that these claims resemble Republic's individual claim (discussed in II.C). Plaintiffs need not prove what prices, but for the conspiracy, defendants would have charged; plaintiffs need prove only that, in the context of tariffs that I must accept as legitimate, defendants’ exclusionary activities and other antitrust violations slowed penetration of the relevant markets by defendants’ competitors. Thus, plaintiffs’ damages do not depend on proof of price-fixing by defendants, which Keogh would bar, but on proof that defendants conspired to exclude low-cost competitors from the market, which does not implicate the ICC's exclusive jurisdiction and therefore is not barred by Keogh. In short, as Judge Friendly has explained, "[a] shipper may recover damages if it can show that carriers caused injury to the shipper's business or Did the Bessemer & Lake Erie Railroad participate in a conspiracy which had the purpose of restricting trade or preventing competition in the transportation of iron ore through or in the State of Ohio in violation of the Ohio Valentine Act? Yes Vv No __ 50A CLAIMS OF REPUBLIC STEEL CORPORATION 6. Was the agreement, combination or conspiracy a material cause of any injury to the business or property of Republic Steel Corporation? Yes vv No _ If Yes, did injury result from: (a) foreclosure and/or delay in the utilization of self-unloading vessels for the delivery of iron ore? Yes Vv No __ (b) inability to fully use private docks to handle iron ore? Yes _V No __ (c' inability to fully use trucks to move iron ore to its Warren and Youngstown, Ohio mills? Yes _ No _V_ 51A CLAIMS OF JONES & LAUGHLIN STEEL INCORPORATED 7. Was the agreement, combination or conspiracy a material cause of any injury to the business or property of Jones & Laughlin Steel Incorporated? Yes Vv No _ If Yes, did injury result from: (a) foreclosure and/or delay in the utilization of self-unloading vessels for the delivery of iron ore? (b) inability to fully use private docks to handle iron ore? Yes _¥ No __ (c) inability to fully use trucks to move iron ore to its Ohio, mills? 52A CLAIMS OF WHEELING-PITTSBURGH STEEL CORPORATION 8. Was the agreement, combination or conspiracy a material cause of any injury to the business or property of Wheeling-Pittsburgh Steel Corporation? Yes Vv No __ If Yes, did injury result from: (a) foreclosure and/or delay in the utilization of self-unloading vessels for the delivery of iron ore? Yes Vv No _ (b) inability to fully use private docks to handle iron ore? Yes Vv No _ 53A CLAIMS OF NATIONAL STEEL CORPORATION 9. Was the agreement, combination or conspiracy a material cause of any injury to the business or property of National Steel Corporation? Yes Vv No __ If Yes, did injury result from: (a) foreclosure and/or delay in the utilization of self-unloading vessels for the delivery of iron ore? Yes Vv No _ (b) inability to fully use private docks to handle iron ore? Yes Vv No _ 10. 544 CLAIMS OF SHARON STEEL CORPORATION Was the agreement, combination or conspiracy a material cause of any injury to the business or property of Sharon Steel Corporation? Yes Vv No __ If Yes, did injury result from: (a) (b) foreclosure and/or delay in the use of self- unloading vessels for the delivery and unloading of iron ore? foreclosure and/or delay in the use of independent docks to handle iron ore? foreclosure and a delay in the use of trucks to move iron ore to its Farrell, Pennsylvania, mill? CLAIMS OF THE REANEY PLAINTIFFS 11. Was the agreement, combination or conspiracy a material cause of any injury to the business or property of Reaney? If Yes, did injury result from: (a) acts to prevent the Reaneys from engaging in an iron ore business at Grand River? (b) acts to prevent the Reaneys from engaging in an iron ore business at the Minnesota slip? 56A CLAIMS OF ERIE-WESTERN PENNSYLVANIA PORT AUTHORITY AND CODAN CORPORATION 12. Was the agreement, combination or conspiracy a material cause of any injury to the business or property of the Erie plaintiffs? If Yes, did injury result from: (a) acts to prevent the Erie from subleasing or ' purchasing the Erie ore dock? Yes _v_ No (b) acts to prevent Erie from having competitive iron ore rail rates at the Erie ore dock? 57A CLAIMS OF C.D. AMBROSIA TRUCKING COMPANY 13. Was the unlawful conspiracy a material cause of any injury to the business or property of the C.D. Ambrosia Trucking Company? Yes wv. No If “Yes,” did injury result from: (a) acts to remove hopper cars from steel mills or otherwise cramp and impede _ truck transportation of iron ore? (b) acts to discourage or prevent truck transportation of iron ore from railroad-owned docks? Yes __ No _\N (c) acts to prevent truck transportation of iron ore from Minnesota slip dock by use of a lease restriction prohibiting trucking from that dock? (d) acts to prevent or delay iron ore handling by private docks that would permit trucking of iron ore? 58A CLAIM OF TAURO BROTHERS TRUCKING COMPANY 14. Was the agreement, combination or conspiracy a material cause of any injury to the business or property of Tauro Brothers? If Yes, did injury result from: (a) denial of access to railroad docks to truck iron ore? Yes __ No _V_ (b) foreclosure and/or delay in the utilization of self-unloading vessels to be used to bring iron ore to docks to which truckers were allowed access? Yes vV No (c) inability of steel mills to fully use private docks, to which trucks were allowed access. 59A CLAIMS OF THE WILLS COMPANIES Was the agreement, combination or conspiracy a material cause of any injury to the business or property of Wills’ dock companies (Toledo World Terminals, Inc., and its predecessors, Consolidated Dock, Inc. and Consolidated Dock & Storage, Inc.)? If Yes, did any such injury result from: (a) (b) (c) acts in furtherance of the conspiracy, including the refusal to lease dock property without restrictions, to prevent Wills from engaging in an iron ore business at the Minnesota slip (Ashtabula)? Yes No _yv acts in furtherance of the conspiracy, including the refusal to lease dock property, to prevent Wilis from engaging in an iron ore business at Whiskey Island (Cleveland)? acts in furtherance of the conspiracy, including the refusal to lease or sell dock properties or the refusal to lease or sell dock properties without restrictions, to prevent Wills from engaging in an iron ore business at Toledo, Ohio? 16. 60A Was the agreement, combination or conspiracy a material cause of any injury to the business or property of Wills Trucking, Inc. because it was unable to provide a trucking service in combination with Wills' dock services? 61A CONCEALMENT 17. Did any participant in the unlawful conspiracy take affirmative acts to conceal the conspiracy, or to conceal any act in furtherance of the conspiracy? [f you answered "Yes" to question 17, answer question 18. 18. Have the following plaintiffs shown that they did not have actual knowledge of the unlawful conspiracy prior to October 14, 1977 and did not have knowledge of facts prior to that time which, through the exercise of due diligence, should have caused them to discover the unlawful conspiracy? (Answer as to each plaintiff.) (a) C.D. Ambrosia Trucking Co., Inc. Yes _V._ No (b) Erie-Western Pennsylvania Port Authority and Codan Corporation (c) (d) (e) 19. 20. 62A Reaney Dock Company and David W. Reaney, individually or on behalf of Warford Reaney Yes _V_ No Tauro Brothers Trucking Co. Yes _V_ No Wills Trucking Co. and Toledo World Terminal, Inc., including Consolidated Dock and Storage, Inc. and Consolidated Dock, Inc. Yes Vv No __ If you have found that the defendant violated the antitrust laws, state whether each act in furtherance of the agreement, combination or conspiracy was taken in a good faith belief that it was required by ICC regulations. Was defendant's conduct reasonable under the circumstances, including possible justification under the regulatory policies under which defendant operated? 63A MDL 587 QUESTIONS TO BE ANSWERED BY THE JURY DAMAGE CLAIMS OF REPUBLIC STEEL CORPORATION 8 (b) State the amount of damages that will fairly and reasonably compensate Republic Steel Corporation for injury to its business or property resulting from (i) foreclosure and/or delay in the utilization of self-unloader vessels for the delivery of iron ore and (ii) inability to fully use private docks to handle iron ore. (Answer for each time period and for each category of damages) Damage Period I (Jan. 1, 1968 - Oct. 13, 1977) (i) Self-Unloader Damages $ 13,100,000 (ii) Dock Damages $ _5,300,000 Damage Period II (Oct. 14, 1977 - Dec. 31, 1983) (i) Self-Unloader Damages $ 60,600,000 (ii) Dock Damages $ 8,000,000 64A DAMAGE CLAIMS OF JONES & LAUGHLIN STEEL INCORPORATED (INCLUDING YOUNGSTOWN SHEET & TUBE COMPANY) 2. State the amount of damages that will fairly and reasonably compensate Jones & Laughlin Steel Incorporated, including Youngstown Sheet & Tube Company, for injury to its business or property resulting from (i) foreclosure and/or delay in the utilization of self-unloader vessels for the delivery of iron ore and (ii) inability to fully use private docks to handle iron ore. (Answer for each time period and for each category of damages) (a) Damage Period | (Jan. 1, 1968 - Oct. 13, 1977) (i) Self-Unloader Damages $ 25,900,000 (ii) Dock Damages $ _6,900,000 (b) Damage Period II (Oct. 14, 1977 - Dec. 31, 1983) (i) Self-Unloader Damages $ 39,000,000 (ii) Dock Damages $ _3,700,0 4 Je (a) 65A DAMAGE CLAIMS OF WHEELING-PITTSBURGH STEEL CORPORATION State the amount of damages that will fairly and reasonably compensate Wheeling-Pittsburgh Steel Corporation for injury to its business or property resulting from (i) foreclosure and/or delay in the utilization of self-unloader vessels for the delivery of iron ore and (ii) inability to fully use private docks to handle iron ore. (Answer for each time period and for each category of damages) Damage Period I (Jan. 1, 1968 - Oct. 13, 1977) (i) Self-Unloader Damages $ 7,100,000 (ii) Dock Damages: Material Handling $ 4,400,000 Demurrage $ 1,300,000 Damage Period II (Oct. 14, 1977 - Dec. 31, 1983) (i) Self-Unloader Damages $ 7,800,000 (ii) Dock Damages: Material Handling $ 5,300,000 Demurrage $ 1,000,000 66A DAMAGE CLAIMS OF NATIONAL STEEL CORPORATION 4. State the amount of damages that will fairly and reasonably compensate National Steel Corporation for injury to its business or property resulting from (i) foreclosure and/or delay in the utilization of self- unloader vessels for the delivery of iron ore and (ii) inability to fully use private docks to handle iron ore. (Answer for each time period and for each category of damages) (a) Damage Period I (Jan. 1, 1968 - Oct. 13, 1977) (i) Material Handling (Dock) Damages $ 2,200,000 (ii) Vessel Operating Cost Savings $ 10,000,000 (iii) Great Lakes In-Plant Handling Savings $ 1 (iv) Investment Cost Savings $ 10,400,000 (b) Damage Period II (Oct. 14, 1977 - Dec. 31, 1983) (i) Material Handling (Dock) Damages $ 3,400,000 (ii) Vessel Operating Cost Savings $ 4,400,000 (iii) Great Lakes In-Plant Handling Savings eee (iv) Investment Cost Savings $_6,300,000 (a) (b) 67A DAMAGE CLAIMS OF SHARON STEEL CORPORATION State the amount of damage that will fairly and reasonably compensate Sharon Steel Corporation for injury to its business or property resulting from (i) foreclosure and/or delay in the use of self-unloading vessels for the delivery and unloading of iron ore and (ii) foreclosure and/or delay in the use of independent docks to handle iron ore. (Answer for each time period and for each category of damages) Damage Period I (Jan. 1, 1968 - Oct. 13, 1977) (i) Material Handling (Dock) Damages $ 3,700,000 (ii) Self-Unloader Premium Damages oe OM Damage Period II (Oct. 14, 1977 - Dec. 31, 1983) (i) Material Handling (Dock) Damages $ 1,400,000 (ii) Self-Unloader Premium Damages $ 1 (a) (b) 68A DAMAGE CLAIMS OF ERIE WESTERN PENNSYLVANIA PORT AUTHORITY AND CODAN CORPORATION State the amount of datnages that will fairly and reasonably compensate the Erie plaintiffs for injury to their business or property resulting from (i) acts to prevent Erie from subleasing or purchasing the Erie ore dock and (ii) acts to prevent Erie from obtaining competitive iron ore rail rates from the Erie ore dock. (Answer for each time period and for each category of damages) Damage Period I (Jan. 1, 1968 - Oct. 13, 1977) (i) Lost Profit Damages $ 1,700,000 (ui) Opportunity Cost Damages $ 1 Damage Period I (Oct. 14, 1977 - Dec. 31, 1983) (i) Lost Profit Damages $ 5,000,000 (ii) Opportunity Cost Damages $ ; ~ 69A DAMAGE CLAIMS OF C. D. AMBROSIA TRUCKING COMPANY State the amount of damages that will fairly and reasonably compensate C. D. Ambrosia Trucking Company for injury to its business or property (during the period January 1, 1965 - December 31, 1979) resulting from acts to prevent or delay iron ore handling by non- railroad docks that would permit trucking of iron ore. (Answer for each time period and for each category of damages) (a) Lost Profit Damages $ _ (b) Opportunity Cost Damages $ ___ — ©) — J00 ] —_—— i | 70A DAMAGE CLAIMS OF TAURO BROTHERS TRUCKING COMPANY 8. State the amount of damages that will fairly and reasonably compensate Tauro Brothers Trucking Company for injury to its business and property resulting from (i) foreclosure and/or delay in the utilization of self-unloading vessels to be used to bring ore to docks to which truckers were allowed access and (ii) inability of steel mills to fully use independent docks to which truckers were allowed access. (a) Lost Profit Damages $ 3,800,000 (b) Opportunity Cost Damages $ 1 10. 71A DAMAGE CLAIMS OF THE WILLS COMPANIES State the amount of damages that will fairly and reasonably compensate Wills’ dock companies (Toledo World Terminal, Inc. and _ its predecessor, Consolidated Dock, Inc.) for injury to its business or property resulting from acts in furtherance of the conspiracy, including the refusal to lease or sell dock properties or the refusal to lease or sell dock properties without restrictions, that prevented Wills from engaging in an iron ore business at Toledo for Armco. Dock Damages: D wl State the amount of damages that will fairly and reasonably compensate Wills Trucking, Inc. for injury to its business or property resulting from being deprived of the opportunity to provide a trucking service to Armco in combination with Wills’ dock services. Trucking Damages: $ _ 1 --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386009_0614%3A03. Public record. Not legal advice.