Middle Atlantic Conference

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IN THE MATTER OF MIDDLE ATLANTIC CONFERENCE DISMISSAL ORDER IN REGARD '1'0 ALLEGED VIOLATION OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT Docket 9185. Complaint, Sept. 1984-order Dismissing Complaint, June, 1985 The Federal Trade Commission has dismissed the complaint in this matter since the collective r3teffaking activities of respondent are immunized by the state action doctrine. The Commission has found that "further prosecution of this matter does not appear to be in the public interest."

COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act and by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that Middle Atlantic Conference, a corporation, hereinafter sometimes referred to as !!respondent " has violated the provisions of said Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint stating its charges as follows:

For the purposes of this complaint the use of the present tense includes the past tense and the following definitions apply: Carrier means a common carrier of property by motor vehicle. Intrastate transportation means the pickup or receipt, transportation and delivery of property for compensation wholly within any State of the United States by a carrier authorized by that state to engage therein.

Tariff means a publication and any supplements thereto stating the rates ofa carrier for the intrastate transportation of property, excluding general rules and regulations.

Member means any carrier or other person that pays dues or belongs to Middle Atlantic Conference or to any successor corporation. Rate means a charge, payment or fixed price according to a ratio, scale or standard for direct or indirect transportation service. Collective rate means any rate or charge established under any contract, agreement, understanding, plan, program, combination or conspiracy between two or more competing carriers, or between any carrier and respondent.

PARAGRAPH 1. Respondent, Middle Atlantic Conference, is a corpot-;nn nrD" nl'7P(L pxi t.lnp" 2nd doine- business under and by virtue of 406 Complaint the laws ofthe District of Columbia, with its offce andprincipaLplace of business located at 6410 Kenilworth Avenue, Riverdale, Maryland. Respondent publishes and issues tariffs containing rates for the intrastate transportation of property on behalf of its member carriers. PAR. 2. Carriers engaging in intrastate transportation of property within Pennsylvania do so under certiicates of public convenience and necessity granted by the Pennsylvania Public Utilities Commission. Such carriers are subject to rate regulation by the said Commission and are required to charge just and reasonable rates. Carriers in Pennsylvania are required to charge the rates fied once they have been accepted by the said Commission.

PAR. 3. The statute which provides for regulation of carriers engaged in the intrastate transportation of property within Pennsylvania does not compel, command, authorize or otherwise provide for the establishment, operation or continuation of collective rates among carriers or others on their behalf PAR. 4. Except to the extent that competition has been restrained as herein alleged, respondent's members are now in competition among themselves and with other carriers.

PAR. 5. Respondent's membership consists of approximately 100 carriers engaging in intrastate transportation of property within Pennsylvania. Respondent's members are entitled to and do, among other things, vote for and elect the officers and directors of respondent. The control, direction and management of respondent are vested in the Board of Directors, which employs a general manager who acts as chief administrative offcer of the corporation with direct charge of and supervision over the affairs of the corporation. PAR. 6. The acts and practices of respondent set forth in Paragraph Eight are in or affecting commerce as " commerce" is defined in the Federal Trade Commission Act, as amended, and respondent is subject to the jurisdiction of the Federal Trade Commission. Respondent' s acts and practices:

(A) Affect the flow of substantial sums 0(' money across state lines from businesses and other private parties to respondent's members tor rendering intrastate transportation services; (B) Affect respondent' s members' purchase and use of equipment and other goods and services which are shipped across state lines; and (C) Are supported by the receipt of dues and fees which are sent across state lines.

PAR. 7. Shippers use the intrastate services of respondent's members to transport property from warehouses and distribution centers in Pennsylvania to customers in Pennsylvania, which property was originally shipped into Pennsylvania from other states. For such in- Complaint 105 F.

trastate deliveries of property from warehouses and distribution centers, carriers charge shippers or shippers' customers the intrastate rates published by respondent. These intrastate shipping charges are factors which influence the prices of such property. The intrastate delivery services of these carriers are an essential and integral part of the interstate business transactions of such shippers. Thus, the activities of these carriers have a substantial and direct effect upon interstate commerce.

PAR. 8. Respondent, its members, offcers, directors, and others are engaging in a combination, conspiracy, agreement, concerted action or unfair and unlawful acts, policies and practices, the purpose or effect of which is to unlawfully hinder, restrain, restrict, suppress or eliminate competition among carriers engaged in the intrastate transportation of property within Pennsylvania. Pursuant to and in furtherance thereof, respondent, its members and others engage in the following acts, policies and practices, among others:

(A) Initiating, preparing, developing, disseminating, and taking other actions to establish and maintain collective rates for the intrastate transportation of property within Pennsylvania; (B) Participating in the collective rates; and (C) Filing collective rates with the Pennsylvania Public Utilities Commission.

PAR. 9. The acts and practices of respondent, its members and others as alleged in Paragraph Eight have the effect of: (A) Fixing, stabilizing, raising, maintaining, or otherwise interfering or tampering with the rates charged by carriers for the intrastate transportation of property within Pennsylvania; (B) Restricting, restraining, hindering, preventing or frustrating rate competition among carriers for the intrastate transportation of property within Pennsylvania;

(C) Depriving shippers patronizing carriers for intrastate transportation of property within Pennsylvania of the benefits of free and open competition in the provision of said services; and (D) Depriving consumers in Pennsylvania ofthe benefits of free and open competition in the intrastate transportation of property. PAR. 10. The acts, policies and practices of respondent, its members and others, as herein alleged, are all to the prejudice and injury ofthe public and constitute unfair methods of competition in or affecting commerce in violation of Section 5 ofthe Federal Trade Commission Act, as amended. The acts and practices of respondent, as herein alleged, are continuing and will continue in the absence of the relief hprpin rpnl1C";;+PO lVJUULE ATLA'NTIC CONFERENCE 409 406 Dismissal Order ORDER DISMISSING COMPLAINT The Commission has considered this matter on complaint counsel's unopposed motion that the complaint be withdrawn. In this case respondent has argued that its collective ratemaking activities are immunized by the state action doctrine. Complaint counsel now represents that all the elements of a state action defense as articulated by the Supreme Court in Southern Motor Carriers Rate Conference v. United States 105 S.Ct. 1721 (1985), are available to the respondent. Accordingly, further prosecution of this matter does not appear to be in the public interest. The complaint is therefore dismissed.

, Complaint 105 F.