News

May 24, 2017

Firm Requests U.S. Supreme Court for Review of Circuit Opinion in Maritime Case

WASHINGTON, D.C.– Three classes of indirect purchasers have asked the U.S. Supreme Court to review an opinion by the Third Circuit finding that the federal Shipping Act of 1984 preempts state antitrust law. The Third Circuit reached its decision in January 2017, after the Federal Maritime Commission and the United States appeared to support the indirect purchasers’ claims.

In the original claim, automobile purchasers and dealerships, along with truck and equipment dealerships, each filed suit against the world’s largest vehicle carrier service companies for an alleged price-fixing and bid-rigging conspiracy. While the suits were pending, the federal government obtained guilty pleas and levied hundreds of millions in fines against the carriers.

In September 2015, the district court dismissed the complaints, finding that the Shipping Act of 1984 preempted state law antitrust claims and that indirect purchasers should pursue claims in front of the FMC. The indirect purchasers appealed. In a remarkable development before the Third Circuit, the FMC and the United States appeared to support the indirect purchaser claims, arguing that the state laws did not conflict with the Shipping Act. The Third Circuit disagreed and affirmed dismissal of the claims.

“We believe the Third Circuit failed to give the Commission’s and the United States’ preemption determination appropriate deference. That decision conflicts with Supreme Court precedent and decisions by other courts of appeal,” said Warren Burns of Burns Charest LLP, who represents the indirect purchasers.

The indirect purchasers have asked the Supreme Court to clarify the earlier determination of an agency preemption, and have argued that the Third Circuit opinion conflicts with a Ninth Circuit opinion finding that courts should apply a presumption against preemption, even when the case involves maritime commerce.

The indirect purchasers are now pursuing claims against the same carriers before the Federal Maritime Commission. The carriers have moved to dismiss, arguing that the indirect purchasers do not have standing to bring claims before the Commission.

“The carriers pulled a fast one in federal court, arguing that my clients’ claims belonged in front of the Commission and that we had the ability to pursue the claims there. Now that we are in front of the Commission, they are arguing the exact opposite,” said Burns.

The indirect purchasers have asked the Commission to find that the carriers standing arguments have been waived or are judicially estopped.

The Supreme Court case is Alban, et al. v. Nippon Yusen Kabushiki Kasha, NYK Line (N. Am.) Inc., et al. A Docket number has not been assigned.

The Federal Maritime Commission case is In re Vehicle Carrier Services, Docket Nos. 16-07, 16-10, and 16-11.