633 F.Supp.3d 209
D.D.C.2022Background
- Plaintiff APL (American President Lines) is a foreign-owned container carrier that began U.S.-to-Guam service in 2015 using U.S.-flag vessels enrolled in the Maritime Security Program (MSP); Matson (defendants) is the incumbent carrier providing U.S.-Guam and U.S.-Hawaiʻi service.
- The Jones Act generally restricts who may operate between U.S. ports, but MSP vessels (and foreign-owned U.S.-flag vessels) can serve Guam; Congress narrowed MSP access to Guam in the 2018 NDAA, which APL attributes to Matson lobbying.
- APL alleges Matson has maintained >70% share of the mainland-to-Guam market (and dominant share of U.S.-Hawaiʻi) and raised prices after acquiring Horizon Lines in 2011.
- APL claims Matson engaged in exclusionary conduct after APL’s entry: threats/retaliation against shippers and suppliers, a loyalty/discount program conditioned on high share, bundled discounts across Hawaii and Guam, a proposal to limit APL’s vessel calls by offering capped slot allocations, and other retaliatory acts (including in Alaska).
- Procedural posture: APL sued under Section 2 of the Sherman Act (monopolization and attempted monopolization) and Clayton Act injunctive relief; Matson moved to dismiss. The court denied dismissal as to Matson Navigation Co. and Matson Logistics, Inc., but dismissed Matson, Inc. (parent) for lack of specific allegations tying it to wrongdoing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Antitrust injury (standing) | Matson’s conduct foreclosed APL and harmed competition (reduced choices, higher prices, diminished service) | Matson says discounts benefit consumers and no cognizable antitrust injury | Court: APL plausibly alleged antitrust injury (foreclosure, coercion of customer choice) |
| Market definition | Relevant markets: container shipping U.S.-mainland to Guam and U.S.-mainland to Hawaiʻi (with ports/submarkets) | Matson: APL’s markets are inconsistent and deficient | Court: Market definitions plausible at pleading stage; not “glaringly deficient” |
| Monopoly power | Matson has >70% share and entry barriers (Jones Act, MSP change, high capital costs, foreclosure) | Matson: APL’s own strategic choices and noncompetition in segments undercut alleged barriers | Court: Allegations suffice to plead monopoly power and barriers; factual disputes reserved for discovery |
| Exclusionary threats/retaliation | Matson threatened customers/suppliers with worse rates/service to deter business with APL | Matson: Allegations vague; regulatory rate filing limits discrimination | Court: Threats and retaliation plausibly constitute exclusionary conduct; allegations adequate at this stage |
| Loyalty/exclusive-dealing discounts | Matson’s 90% threshold discounts (first-dollar) function as de facto exclusive dealing and foreclose substantial market share | Matson: Discounts are procompetitive; no predatory pricing alleged | Court: Loyalty program plausibly anticompetitive; predatory-pricing allegation unnecessary at pleading stage (Surescripts cited) |
| Bundled discounts (Hawaii+Guam) | Bundling makes Guam uncompetitive for APL because Hawaii volumes are larger | Matson: Bundling benefits buyers; courts are skeptical of condemning bundled discounts | Court: Permitted discovery on bundled-discount theory; reserved judgment on ultimate legality |
| Lobbying to change MSP scope | Matson lobbied to exclude MSP vessels from Guam, shrinking potential entry | Matson: Lobbying is lawful advocacy | Court: Noerr-Pennington protects lobbying; cannot be used as antitrust conduct evidence |
| Corporate attribution (Matson, Inc.) | APL lumps corporate defendants together; CEO statements/slot discussions implicate parent | Matson: Parent not liable absent specific allegations | Court: Dismissed Matson, Inc. (no specific wrongdoing alleged); retained Matson Navigation and Matson Logistics (factual allegations implicate operational units) |
Key Cases Cited
- United States v. Microsoft Corp., 253 F.3d 34 (D.C. Cir. 2001) (defines monopoly/attempted monopolization elements and analyzes exclusionary conduct)
- Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477 (1977) (antitrust injury must be harm to competition, not merely competitors)
- Brown Shoe Co. v. United States, 370 U.S. 294 (1962) (market-definition framework: product and geographic markets and submarkets)
- Lorain Journal Co. v. United States, 342 U.S. 143 (1951) (threats to customers/suppliers can be exclusionary conduct under §2)
- Eastern R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127 (1961) (petitioning/lobbying immune from antitrust liability)
- United Mine Workers of Am. v. Pennington, 381 U.S. 657 (1965) (Noerr-Pennington: joint efforts to influence government are not antitrust violations)
- FTC v. Surescripts, LLC, 424 F. Supp. 3d 92 (D.D.C. 2020) (discounts enforcing de facto exclusive dealing need not be predatory to be exclusionary)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading standard: plausibility)