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07/27/81 Sea-Land Service, Inc., Et v. the Alaska Railroad

July 27, 1981

SEA-LAND SERVICE, INC., ET AL., APPELLANTS

v.

THE ALASKA RAILROAD, ET AL. 1981.CDC.195 DATE DECIDED: JULY 27, 1981



Before WRIGHT, MacKINNON and GINSBURG, Circuit Judges.

UNITED STATES COURT OF APPEALS, DISTRICT OF COLUMBIA CIRCUIT

Appeal from the United States District Court for the District of Columbia (Civil Action No. 80-01277).

APPELLATE PANEL:

Opinion for the Court filed by Circuit Judge GINSBURG.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE GINSBURG

This appeal presents the question whether the Alaska Railroad , an entity wholly owned and operated by the United States, is amenable to suit for treble damages and injunctive relief under the Sherman Act for alleged anticompetitive conduct. Appellants Sea-Land Services, Inc., and its wholly owned subsidiary, Sea-Land Freight Services, Inc., assert that ARR and a private corporation, Alaska Hydro-Train Corp., are engaged in a conspiracy to drive out competition and monopolize the Alaska trade. On the ground of sovereign immunity, the district court dismissed the action as to ARR and the United States agencies and officials responsible for ARR's supervision. *fn1 We affirm the district court's order dismissing the case against these defendants, although our analysis differs in part from that of the district judge.

Insofar as appellants seek equitable relief, we conclude that sovereign immunity does not bar the way. See 5 U.S.C. § 702, as amended by Pub.L.No. 94-574, 90 Stat. 2721 (1976) (eliminating sovereign immunity defense in all actions for specific, non-monetary relief against a United States agency or officer acting in an official capacity). However, we further conclude that Congress did not place the United States or its instrumentalities under the governance of the Sherman Act. For that reason, we hold that appellants may not maintain this action against the Alaska Railroad and the United States agencies and officers that supervise its operation. I

The district court stated tersely that § 702 of the Administrative Procedure Act "does not afford (appellants) a statutory cause of action" in this case. Sea-Land Service Inc. v. Alaska Railroad, 1980-2 Trade Cas. P 63,481, at 76,523-24 (D.D.C.1980). That statement bears elaboration. Section 702 of the Administrative Procedure Act, as amended by Pub.L.No. 94-574 (1976), provides in pertinent part:

An action in a court of the United States seeking relief other than money damages and stating a claim that an agency or an officer or employee thereof acted or failed to act in an official capacity or under color of legal authority shall not be dismissed nor relief therein be denied on the ground that it is against the United States .... Nothing herein (1) affects other limitations on judicial review or the power or duty of the court to dismiss any action or deny relief on any other appropriate legal or equitable ground; ....

The Judiciary Committees of both Houses, in their reports on the 1976 amendment, identified as the measure's clear purpose "elimina(tion of) the sovereign immunity defense in all equitable actions for specific relief against a Federal agency or officer acting in an official capacity." S.Rep.No.996, 94th Cong., 2d Sess. 8 (1976) (emphasis added); H.R.Rep.No.1656, 94th Cong., 2d Sess. 9 (1976), U.S.Code Cong. & Admin.News 1976, p. 6121, 6129 (emphasis added). The legislative history plainly reveals a congressional intent to strengthen Government accountability and dispel the confusion, uncertainty, and unfairness sovereign immunity defenses generated. See S.Rep.No.996 at 7; H.R.Rep.No.1656 at 8. While the amendment "with(drew) the defense of sovereign immunity in actions seeking relief other than money damages," Congress intended no alteration in existing law governing the recovery of money damages against the United States. S.Rep.No.996 at 4; H.R.Rep.No.1656 at 4-5, U.S.Code Cong. & Admin.News 1976, p. 6124. Were sovereign immunity our sole concern, therefore, to the extent that appellants seek injunctive relief, we would hold the named United States agencies and officials answerable in this action.

Although amended § 702 eliminates the defense of sovereign immunity in actions for specific, non-monetary relief, *fn2 the amendment does not mean that all such actions, in which a sovereign immunity defense formerly would have required dismissal, now will be decided on the merits. By its terms, amended § 702 does not affect "the power or duty of the court to dismiss any action or deny relief on any other appropriate legal or equitable ground." We hold that such a ground bars this action. The Sherman Act, we conclude, does not expose United States instrumentalities to liability, whether legal or equitable in character, for conduct alleged to violate antitrust constraints. II

Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2, which appellants allege have been violated by the Alaska Railroad and its supervising United States agencies and officials, prohibit contracts, combinations, or conspiracies in restraint of trade or commerce and monopolization or attempts or conspiracies to monopolize trade or commerce by any "persons." The word "person" or "persons" is defined for purposes of the Sherman Act in 15 U.S.C. § 7 to include corporations and associations existing under or authorized by state or federal law. In United States v. Cooper Corp., 312 U.S. 600, 61 S. Ct. 742, 85 L. Ed. 1071 (1941), the Supreme Court held that the United States does not qualify as a "person" within the compass of the statutory provision (now 15 U.S.C. § 15) authorizing an injured "person" to maintain an action for treble damages against an alleged violator of the antitrust laws. The Court pointed out that if the United States qualified as a "person" entitled to maintain a treble damage action, it would also qualify as a "person" subject to Sherman Act liability. Id. at 606, 61 S. Ct. at 744.

Congress ultimately responded to the precise question raised in Cooper Corp. In 1955, § 4A was added to the Clayton Act *fn3 authorizing the United States to sue alleged antitrust law violators for actual, but not treble, damages. Although Congress was well aware of the view the Court indicated in Cooper Corp., that Congress had not described the United States as a "person" for Sherman Act purposes, *fn4 Congress addressed only the direct holding in that case the ruling that the United States was not authorized to proceed as a Sherman Act treble damage action plaintiff. The 1955 alteration simply added an action for single damages to the Government's potent antitrust enforcement arsenal, which already included criminal prosecutions under §§ 1-3 of the Sherman Act, 15 U.S.C. §§ 1-3, proceedings for injunctive relief under § 4, 15 U.S.C. 4, and seizure of property under § 6, 15 U.S.C. § 6.

Appellants stress the broad policy of the Sherman Act and ask us to develop from that policy coverage of the United States and its instrumentalities as defendants. Given the discrete consideration Congress gave to the situation of the United States, after the decision in Cooper Corp., as a Sherman Act damage action plaintiff, and the legislature's total silence on the situation of the United States as a Sherman Act defendant, we decline to take the step appellants invite. The Cooper Corp. Court apparently assumed the United States was not exposed to liability under the Sherman Act, subsequent case law is consistent with that view, *fn5 Congress had a clear occasion to address the issue in 1955 but failed to do so. Under these circumstances, we are unwilling "to engraft on (the) statute additions ... the legislature might or should have made." Cooper Corp. (supra) 312 U.S. at 605, 61 S. Ct. at 744. Cf. Texas Industries, Inc. v. Radcliff Materials, Inc., 451 U.S. 630, 101 S. Ct. 2061, 2070, 68 ...


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