[00:00:01] Speaker 00:
Case number 14-1208, Lisa Ann Cornell and Gee Ware Cornell, Jr.

[00:00:06] Speaker 00:
Petitioners, versus Federal Maritime Commission at Elle.

[00:00:10] Speaker 00:
Mr. Cornell for the petitioners, Mr. Schofield for the respondents.

[00:00:31] Speaker 03:
Please the court where Cornell on behalf of petitioners.

[00:00:38] Speaker 03:
I come from a district in which 10 million passengers come on cruise ships through two ports.

[00:00:49] Speaker 03:
The case which was brought against Princess Cruise Line before the Federal Maritime Commission involved an admitted refusal to deal, which violates 10B10 of the Shipping Act.

[00:01:08] Speaker 01:
This has unreasonably refused to deal.

[00:01:12] Speaker 03:
Right.

[00:01:13] Speaker 03:
It involved an unreasonably refusal to deal.

[00:01:17] Speaker 01:
And what we have here, did they admit that their refusal was unreasonable?

[00:01:23] Speaker 03:
Oh, no.

[00:01:23] Speaker 03:
But the A. L. J. Found that their refusal had nothing to do with the transportation related reason.

[00:01:31] Speaker 04:
Yeah.

[00:01:31] Speaker 04:
Can I?

[00:01:32] Speaker 04:
Yes, Judge.

[00:01:33] Speaker 04:
See if I fully understand your argument.

[00:01:35] Speaker 04:
Yes, I get your argument.

[00:01:38] Speaker 04:
It is that

[00:01:40] Speaker 04:
In the past, the Commission has required a reason to be transportation-related.

[00:01:47] Speaker 04:
In this case, they did not.

[00:01:49] Speaker 04:
They used business judgment rather than transportation-related.

[00:01:52] Speaker 04:
They did so without an explanation for the change, and that's what I'm trying to prove.

[00:01:55] Speaker 03:
Not only that.

[00:01:57] Speaker 03:
Wait a minute.

[00:01:59] Speaker 04:
That's your argument.

[00:02:02] Speaker 04:
That's the only argument I can tease out of your brief, but if you have another one, let me know.

[00:02:06] Speaker 03:
No, that is our argument.

[00:02:08] Speaker 03:
And when you look at what a reasonable transportation-related basis is, we come to the definition of common carrier, which

[00:02:19] Speaker 03:
They, the FMC, in their order, admits that cruise lines are common carriers.

[00:02:26] Speaker 03:
So that's not an issue.

[00:02:28] Speaker 03:
Right.

[00:02:28] Speaker 03:
That's not an issue.

[00:02:29] Speaker 04:
The only issue is the one that you've told me is your, right?

[00:02:32] Speaker 03:
Right.

[00:02:33] Speaker 03:
But Your Honor and Judge Tatel both said on the CSI aviation panel, which defined and said it's a well, what a common carrier is is a well-known

[00:02:43] Speaker 03:
creature of the common law.

[00:02:45] Speaker 04:
Does that have anything to do with this case?

[00:02:47] Speaker 03:
I think it does, and here's why Judge Santel.

[00:02:51] Speaker 03:
If the standard is a reasonable business judgment, it stands on the head of cases of the United States going back to 1867 and probably before.

[00:03:10] Speaker 03:
If you look at Justice Story's treatise, which we cite in our brief, which was in the 1850s, you find that basically they can't unreasonably refuse transport.

[00:03:24] Speaker 03:
Now, can they refuse transport to beekeepers who are bringing their bees on board?

[00:03:30] Speaker 03:
Can they refuse transport to people who are on terrorist watch lists?

[00:03:37] Speaker 03:
Of course, because those reasons are transportation related.

[00:03:40] Speaker 01:
But their business is great.

[00:03:42] Speaker 01:
Go ahead.

[00:03:43] Speaker 01:
Can I just pursue Judge Sentel's question for a minute here?

[00:03:46] Speaker 01:
Yes, Your Honor.

[00:03:46] Speaker 01:
Because I didn't hear an answer.

[00:03:48] Speaker 01:
You said that your major argument, your primary argument, is that the Commission departed from its earlier cases saying these had to be transportation-based, right?

[00:03:59] Speaker 03:
It did.

[00:04:00] Speaker 01:
OK.

[00:04:01] Speaker 01:
I saw that, and that's this New Orleans decision that the ALJ cited, right?

[00:04:06] Speaker 03:
I'm sorry, I didn't hear.

[00:04:07] Speaker 01:
The New Orleans decision?

[00:04:09] Speaker 01:
The New Orleans Stephen Doran case.

[00:04:10] Speaker 01:
Yes, Judge.

[00:04:11] Speaker 01:
I didn't see that argument raised until your reply brief.

[00:04:16] Speaker 03:
The primary argument we raised.

[00:04:18] Speaker 03:
Did you cite the New Orleans case?

[00:04:20] Speaker 03:
Not in the initial brief.

[00:04:22] Speaker 01:
Yeah, by the way, I had some trouble finding it, because at least in my copy of the brief, your table of authorities wasn't alphabetical.

[00:04:28] Speaker 01:
It was not cited in the – it was not cited in – It's not cited, and I actually – I mean, I saw you argued that the ALJ – you argued that the ALJ found your case plausible and the commission didn't, and you argue that's a basis – Correct.

[00:04:48] Speaker 01:
– for reversal, and you argue that the statute – you have a couple of other arguments, but I didn't see this argument about departing from prior precedent until your reply brief.

[00:04:59] Speaker 01:
And we don't consider arguments raised for the first time in reply briefs on this circuit.

[00:05:05] Speaker 03:
Well, the principal argument is, court please, is that the refusal to deal, which is set forth in the brief, was on the basis of matters that were not reasonably transportation- Do you have that in your original brief?

[00:05:26] Speaker 03:
I have, I do not cite... Where is your clearest statement of that in your blue brief?

[00:05:31] Speaker 03:
In my blue brief, I do not cite New Orleans' Steve Adore.

[00:05:35] Speaker 04:
Then why isn't Judge Tatel's proposition correct and fatal to your argument if it's raised for the first time in the Gray Bridge?

[00:05:44] Speaker 03:
I think that because it is implicit in all of this that the problem is it really doesn't matter.

[00:05:53] Speaker 00:
On page 21 of your blue brief, you say, in all cases of common carriage, those reasons must be related to transportation.

[00:06:00] Speaker 00:
That's your argument, correct?

[00:06:01] Speaker 00:
Yes, that's my argument.

[00:06:02] Speaker 00:
So there it is in your blue brief, right?

[00:06:04] Speaker 00:
You didn't cite the case, but the argument's there.

[00:06:05] Speaker 03:
The argument is there, Judge Miller.

[00:06:08] Speaker 03:
That's correct.

[00:06:08] Speaker 03:
It is there.

[00:06:09] Speaker 03:
The problem that we have here is that we have Congress which says you can't unreasonably refuse to deal.

[00:06:18] Speaker 03:
They say this applies to all common carriers, including passenger carriers, passenger vessels.

[00:06:27] Speaker 03:
The Federal Maritime Commission says the implausibility under Twombly is that we don't think the Congress intended for us to decide passenger cases.

[00:06:41] Speaker 04:
To decide for you on that basis, we have to decide whether that two-paragraph, short paragraph on page

[00:06:48] Speaker 04:
21 that make reference to transportation related is sufficient to raise this issue.

[00:06:58] Speaker 04:
You have no better place, no better argument that it's raised in the original brief than this.

[00:07:05] Speaker 03:
That is where it's raised in the original brief, Judge Santel.

[00:07:08] Speaker 04:
And there's no authority stated, and it's not really stated as a positive proposition,

[00:07:16] Speaker 03:
It is no judge.

[00:07:18] Speaker 03:
It's not cited in that.

[00:07:19] Speaker 01:
So the argument you were just making, were you saying that the commission erred by saying that the statute 10-by-10 doesn't apply to passenger vessels?

[00:07:34] Speaker 01:
Is that what you were saying?

[00:07:35] Speaker 01:
No.

[00:07:35] Speaker 03:
The commission correctly decided that it applies to passenger vessels.

[00:07:40] Speaker 03:
What they decided was that they shouldn't have to consider cases

[00:07:46] Speaker 03:
that involve passengers.

[00:07:48] Speaker 03:
They say, we don't think the Congress intended for us to decide passenger cases.

[00:07:55] Speaker 03:
And they cite a bunch of things, like people will file lawsuits before our agency, which deal with dining room reservations and itineraries.

[00:08:05] Speaker 03:
That's not what we're talking about.

[00:08:07] Speaker 03:
We have a very specific refusal to deal.

[00:08:10] Speaker 03:
They admit it.

[00:08:12] Speaker 03:
They trumpet it.

[00:08:14] Speaker 03:
It is, and it absolutely violates 10b2.

[00:08:19] Speaker 03:
Now, they've set up a new standard, reasonable business judgment, which is a dangerous standard.

[00:08:26] Speaker 03:
It is violative of your decision in the CSI case, plus cases in the United States going back hundreds of years, pretty close.

[00:08:38] Speaker 03:
that common carriers have to accept those willing to pay the fare.

[00:08:44] Speaker 01:
Willing to pay, but that doesn't answer the question about what is a reasonable basis for rejecting someone willing to pay.

[00:08:53] Speaker 03:
But it would have to be transportation related.

[00:08:55] Speaker 03:
If they don't like me because I'm a Democrat.

[00:08:58] Speaker 01:
Well, then they couldn't.

[00:08:59] Speaker 01:
But suppose they... I mean, in this case they rejected the appellant because they viewed her as a vexatious litigator.

[00:09:09] Speaker 03:
Maybe and maybe not.

[00:09:10] Speaker 03:
Well, that's the reason.

[00:09:11] Speaker 03:
The ALJ rejected every one of their arguments.

[00:09:16] Speaker 01:
But the commission sits in the place of the ALJ.

[00:09:20] Speaker 01:
The commission can set aside an ALJ decision.

[00:09:24] Speaker 03:
The commission also said that because the Congress didn't intend it for it to decide passenger claims,

[00:09:34] Speaker 04:
But they did decide this claim.

[00:09:36] Speaker 04:
They did decide this claim.

[00:09:38] Speaker 04:
That can't be the basis upon which you're appealing.

[00:09:41] Speaker 03:
But they said the Congress didn't intend it, and that's the implausibility under Twombly, and therefore we will not consider these other issues.

[00:09:52] Speaker 04:
What other issues?

[00:09:53] Speaker 03:
The other issues are whether or not that they were unjustly refusing to deal on a transportation-related basis.

[00:10:04] Speaker 03:
That's the issue.

[00:10:04] Speaker 04:
What are the other issues that you're talking about?

[00:10:06] Speaker 03:
Well, we had issues about whether or not we were able to recover certain items of damages, which we put in the brief.

[00:10:14] Speaker 01:
But the Commission never reached those questions, so those are before us.

[00:10:18] Speaker 03:
Right.

[00:10:18] Speaker 03:
I put them in the brief, Judge, because

[00:10:21] Speaker 03:
And my circuit, I don't want to have considered to have waived those things.

[00:10:28] Speaker 04:
If you came close to waiving, the one issue is you may have a chance of winning.

[00:10:33] Speaker 04:
We're not going to decide that, and you brought in all this other stuff.

[00:10:36] Speaker 03:
I understand that New Orleans, Steve Adorin should have been in there.

[00:10:41] Speaker 04:
But on the other hand, the argument that they arbitrarily and capriciously departed from prior decisions, they certainly did.

[00:10:48] Speaker 04:
And now we may be able to tease it out of those two paragraphs.

[00:10:51] Speaker 04:
But whether you set that case or not, for us to consider that issue, you needed to put it in your region brief.

[00:10:58] Speaker 04:
And while I'm on the subject of your breathing, just take a look at this.

[00:11:01] Speaker 04:
I've been here 20

[00:11:03] Speaker 04:
627 years.

[00:11:04] Speaker 04:
I've never seen a table of authorities that walk in an alphabetical order.

[00:11:09] Speaker 03:
I I I've never.

[00:11:10] Speaker 03:
I I apologize to the judge to the court.

[00:11:14] Speaker 03:
The court is a whole.

[00:11:18] Speaker 03:
You know I I I've never seen one either and I don't know how this one happened that way and I apologize.

[00:11:27] Speaker 02:
Thank you.

[00:11:40] Speaker 06:
May it please the court, Paul Schofield, for the respondents, the Federal Maritime Commission, and the United States of America?

[00:11:46] Speaker 06:
Your Honor, the main issue, the only issue before this case, is whether or not under 46 U.S.

[00:11:52] Speaker 06:
Code 411.04, subsection 10, there was an unreasonable refusal to deal or negotiate.

[00:11:58] Speaker 00:
No, no, no, no, no, no, no.

[00:11:59] Speaker 00:
I think what the Commission decided was that they failed to state a claim under Twombly of unreasonable decision making.

[00:12:08] Speaker 00:
Correct?

[00:12:08] Speaker 00:
Yes sir.

[00:12:09] Speaker 00:
We have to decide the commission, that they didn't even colorably, plausibly allege a violation of 10 v 10.

[00:12:17] Speaker 00:
How can you defend that?

[00:12:21] Speaker 00:
If the district court complaint came in with these same allegations, do you really think it would get kicked out on Twombly grounds?

[00:12:28] Speaker 06:
Well, we believe that it's clearly so reasonable, such a reasonable decision that was made by Princess Cruz.

[00:12:37] Speaker 00:
From the face of their, the Cornell's complaint.

[00:12:40] Speaker 06:
From the face of their pleadings, we believe that it's... From their complaint, the face of their complaint.

[00:12:43] Speaker 00:
Show me where on the face of the complaint you can tell that it was an indisputably reasonable determination not to sell them a ticket.

[00:12:53] Speaker 00:
Well... Not the litigation history.

[00:12:57] Speaker 06:
Your Honor, we contend that from the facts that were alleged in the complaint, it was not plausible.

[00:13:02] Speaker 00:
Can you show me which ones?

[00:13:03] Speaker 00:
Tell me which ones.

[00:13:05] Speaker 00:
Do you have the complaint there with you?

[00:13:13] Speaker 00:
Yes, Your Honor.

[00:13:14] Speaker 00:
You have to show implausibility from the face of their document.

[00:13:18] Speaker 00:
That's the judgment you have to defend.

[00:13:21] Speaker 00:
Under Channery, we're stuck with how the commission decided that issue, right?

[00:13:46] Speaker 05:
Well, so your honor, starting with the factual allegations and their complaint, we believe that the facts as a whole do not state a plausible violation on the complaint.

[00:14:02] Speaker 00:
Where is that?

[00:14:03] Speaker 00:
Where do they allege that it was vexatious litigation?

[00:14:08] Speaker 00:
I mean, can you tell from this complaint whether there was any merit to their complaint, their litigation, from the face of this complaint?

[00:14:19] Speaker 00:
I think that's our test.

[00:14:21] Speaker 00:
The test the Commission chose to adopt is that framework for decision-making.

[00:14:25] Speaker 06:
Yes, I understand, Your Honor.

[00:14:31] Speaker 06:
Our contention is that the

[00:14:35] Speaker 06:
Facts that were alleged here clearly demonstrate that Princess Cruise Lines was not unreasonable in making their decision.

[00:14:46] Speaker 00:
The test is because again the Commission chose to go down the Twombly path here in the face of what a 60 to 70 page ALJ decision which included

[00:14:58] Speaker 00:
factual determinations about the nature of the history of litigation, and not accepting, under a much more rigorous standard, essentially a summary judgment standard, not accepting Princesses Griswold's view of the history of that litigation.

[00:15:18] Speaker 00:
We don't sit as fact-finders.

[00:15:20] Speaker 00:
The Commission could have made facts, but instead chose to go off on this Twombly theory, which seems to me

[00:15:28] Speaker 00:
It's indefensible as a matter of law.

[00:15:30] Speaker 00:
I don't know how you can have a 70-page district court decision, make resolving disputed factual questions about the history of litigation between two parties in favor of the plaintiff, and then have an appellate court say that their petition didn't even state a plausible claim when there's nothing on the face of the complaint.

[00:15:48] Speaker 00:
If they admitted on the face of their document that it had been frivolous or vexatious, it would be a different thing.

[00:15:53] Speaker 00:
But you can't tease that out from the face of this document.

[00:15:56] Speaker 00:
So what am I supposed to do with a commission decision

[00:15:58] Speaker 06:
Well, Your Honor, I believe that the Commission's decision looked at the case de novo and looked at it as a case of first oppression and still looked at all the facts and considered everything before it.

[00:16:11] Speaker 00:
Well, then it would have been clear error for it to say, as its heading is, that they failed to plea a claim, citing Twombly.

[00:16:20] Speaker 06:
Yes, Your Honor.

[00:16:21] Speaker 00:
And then there's a separate question that I think Judge Santel has already alluded to, and that is when the Commission discussed making it grounded, this determination in non-transportation

[00:16:37] Speaker 00:
business decision making being a legitimate, a reasonable basis for decisions.

[00:16:43] Speaker 00:
Where did they explain why they were evolving the precedent to go from transportation reasons to business reasons and what the limitations on those business reasons would be?

[00:16:57] Speaker 06:
Well, I believe the commission cited the cases on points seek on terminals versus Seattle Port Authority, Peckham v. Canaveral Port Authority, and New Orleans.

[00:17:09] Speaker 06:
Well, those two cases were cited.

[00:17:13] Speaker 06:
And New Orleans, Steve Adorin versus FMC, I believe that was also discussed.

[00:17:18] Speaker 06:
And I think all three of those cases lend support for the proposition that a reasonable business decision

[00:17:26] Speaker 06:
that discretionary business decision can be the basis for a reason.

[00:17:35] Speaker 06:
Yes, they did, Your Honor.

[00:17:36] Speaker 04:
However... So really, they're not authority for the proposition that you can exclude for a non-transportation-related, reasonable business reason?

[00:17:45] Speaker 06:
I believe they are, Your Honor.

[00:17:47] Speaker 04:
I believe... How can they be if they were dealing with transportation-related?

[00:17:52] Speaker 06:
Because, Your Honor, those cases did not state that a reasonable basis was limited to transportation-related or security and safety measures.

[00:17:58] Speaker 06:
They gave an example of a transportation-related issue that could be a reasonable basis.

[00:18:03] Speaker 06:
Safety and security could be a reasonable basis.

[00:18:05] Speaker 06:
But at the heart of each one of those cases, even the common law cases the petitioner cites, at the end of the day, it's a business decision.

[00:18:12] Speaker 04:
Well, that doesn't answer the question.

[00:18:15] Speaker 04:
It's a business decision.

[00:18:17] Speaker 04:
Nobody disputes that they can do it on the basis of a business decision if it's transparent and related.

[00:18:22] Speaker 04:
Do you have any authority for the proposition that they can do it on the basis of a business-related decision?

[00:18:29] Speaker 04:
Period.

[00:18:30] Speaker 04:
That is one that's not transparent.

[00:18:32] Speaker 04:
Your Honor, I can't say that they couldn't reach that result.

[00:18:36] Speaker 06:
I believe the facts in those cases, Your Honor, show that the decision was made by the Commission for this court in Peckham were based on

[00:18:48] Speaker 06:
financial considerations that were, in fact, business-related state, there was something in the shipping act.

[00:18:56] Speaker 04:
What were those financial considerations?

[00:18:59] Speaker 06:
When Peckham, the Canaveral Port Authority, Your Honor, there was a situation where there's two tugboat companies that were operating.

[00:19:06] Speaker 06:
And the decision was made that it was reasonable to go with one tugboat company compared to another company, because that one was going to be able to provide the service better for the port.

[00:19:16] Speaker 04:
In New Orleans, even in New Orleans... That sounds like it's transportation related, doesn't it?

[00:19:21] Speaker 06:
It is transportation related, but it's not limited.

[00:19:23] Speaker 04:
Now what's the... Your Honor, if I may discuss... What was the other issue in that case that wasn't transportation related?

[00:19:29] Speaker 06:
In Peckham?

[00:19:30] Speaker 06:
Yeah.

[00:19:32] Speaker 06:
I believe there was a discrimination claim also, Your Honor.

[00:19:35] Speaker 04:
discrimination.

[00:19:37] Speaker 06:
They were choosing one carrier over another carrier in that case.

[00:19:40] Speaker 04:
Well they had to be choosing one carrier over another to have a case.

[00:19:43] Speaker 04:
That had to have happened, right?

[00:19:45] Speaker 04:
Yes.

[00:19:45] Speaker 04:
So it really has nothing to do with the issue that we're talking about now, does it?

[00:19:49] Speaker 06:
Well, Your Honor, if I could address New Orleans, even New Orleans, even in that case, which there was also a discrimination claim in that case, and there was an unreasonable deal to negotiate in that case.

[00:20:01] Speaker 06:
Even in that case, one carrier was chosen over another because of the ability to have fixed price to, because of the assumption of fixed cost.

[00:20:13] Speaker 06:
Fixed price for transportation service, right?

[00:20:15] Speaker 06:
Yes, Your Honor.

[00:20:15] Speaker 04:
So we need each transportation related, right?

[00:20:19] Speaker 06:
It was, but Your Honor, it was still based on.

[00:20:22] Speaker 06:
whether or not this was a good business decision.

[00:20:25] Speaker 04:
Of course it was.

[00:20:26] Speaker 04:
Nobody is disputing that.

[00:20:28] Speaker 04:
Yes, Your Honor.

[00:20:29] Speaker 04:
The dispute comes over whether that business-related decision has to be also transportation-related or not.

[00:20:36] Speaker 04:
You keep going back to saying these cases said you could do it on a business decision.

[00:20:40] Speaker 04:
Of course they did.

[00:20:41] Speaker 04:
That's the first line.

[00:20:43] Speaker 04:
The next line is can they do it on a business decision that's not transportation-related.

[00:20:48] Speaker 04:
Isn't your better argument that it's not adequately raised in the original decision?

[00:20:52] Speaker 06:
That is also our contention, Your Honor.

[00:20:57] Speaker 06:
But I'd also say there's nothing in the Shipping Act that states that it needs to be transportation related.

[00:21:03] Speaker 06:
And with regards to regulating... What does the Shipping Act say that supports your position?

[00:21:08] Speaker 06:
Well, the statute that this is brought under 46 U.S.C.

[00:21:11] Speaker 06:
411.04 subsection 10 states, the common carrier may not unreasonably refuse to deal or negotiate.

[00:21:16] Speaker 04:
How does that state the proposition, one way or the other, as to whether the reasonableness involved has to be with respect to a transportation?

[00:21:25] Speaker 06:
Well, Your Honor, it doesn't.

[00:21:26] Speaker 06:
It's ambiguous, and therefore I believe that the FMC should be reported.

[00:21:31] Speaker 00:
If they give a reasoned explanation for

[00:21:35] Speaker 00:
moving beyond where precedent has been before.

[00:21:38] Speaker 00:
And I think you would, I think your brief agrees that not every business decision is going to be allowed.

[00:21:49] Speaker 00:
But there are limitations on that, right?

[00:21:50] Speaker 00:
Absolutely, Your Honor.

[00:21:51] Speaker 00:
Can't be race.

[00:21:53] Speaker 06:
such as if it was discrimination or if it was an Orloff... Constitutionally protected status.

[00:21:59] Speaker 00:
Yes, Your Honor.

[00:21:59] Speaker 00:
Constitutionally protected activities.

[00:22:02] Speaker 00:
Exactly.

[00:22:02] Speaker 00:
Activities.

[00:22:03] Speaker 00:
Isn't due process and seeking redress of grievance a constitutionally protected activity?

[00:22:11] Speaker 06:
Well, I thought it was.

[00:22:12] Speaker 06:
Yes, Your Honor.

[00:22:13] Speaker 00:
OK.

[00:22:13] Speaker 00:
What if the lawsuit had actually been meritorious and very important in identifying, say, problems on a cruise line involving food poisoning or drunk captain at the stern?

[00:22:31] Speaker 00:
So they had won their lawsuit.

[00:22:33] Speaker 00:
Would it still be an appropriate business decision to deny sales going forward?

[00:22:37] Speaker 06:
Well, I believe every case would have to be looked at individually based on the facts.

[00:22:42] Speaker 06:
And there would need to be a determination based on the facts.

[00:22:45] Speaker 00:
Well, that's why it would be important to have a reasoned decision from the commission saying when business decision.

[00:22:51] Speaker 00:
That's why non-transportation is very different.

[00:22:54] Speaker 00:
from general business decisions that are unhinged from transportation considerations, and that's why it would be important to have a commission decision that actually explains the contours of when business decisions are in.

[00:23:07] Speaker 00:
Did you see that explanation in the commission decision here?

[00:23:11] Speaker 06:
Well, Your Honor, I believe that was the intent of the commission is to explain that.

[00:23:18] Speaker 00:
I don't think we can affirm an intent.

[00:23:20] Speaker 00:
I think the problem is we have a decision here.

[00:23:22] Speaker 00:
We have a complaint that does not, on its face, reveal whether their litigation was meritorious or not meritorious.

[00:23:31] Speaker 00:
And so taking the facts in the light most favorable to them, and as the ALJ found them, actually, let's assume it was meritorious.

[00:23:39] Speaker 00:
And then can we say that they failed to state a claim under Twombly for it being inappropriate under the Shipping Act to bar passage to people just because they exercised their constitutional right to enforce the law when those laws are for passenger safety?

[00:23:59] Speaker 06:
Well, Your Honor, getting back to addressing the passenger safety issue, the passenger safety is not an area that is actually regulated by the FMC.

[00:24:11] Speaker 06:
The FMC regulates commerce.

[00:24:14] Speaker 06:
Safety and security issues are generally regulated by the FMC.

[00:24:17] Speaker 00:
No, you're talking here, I'm talking about the litigate.

[00:24:19] Speaker 00:
You said it's fine to make a business decision.

[00:24:21] Speaker 00:
Yes, Your Honor.

[00:24:22] Speaker 00:
The commission, not you.

[00:24:23] Speaker 00:
The commission made a business decision.

[00:24:25] Speaker 00:
It's fine to make a business decision because someone

[00:24:28] Speaker 00:
They exercise their constitutional rights.

[00:24:31] Speaker 00:
And let's assume, taking facts in the light most favorable to the plaintiffs, as the commission has chosen for its procedural approach here, that this were incredibly important, meritorious litigation.

[00:24:44] Speaker 00:
I just throw out that it actually would have promoted passenger safety in my hypothetical.

[00:24:50] Speaker 00:
I'm not asking you to regulate it.

[00:24:52] Speaker 00:
I'm asking you to say how I can tell from the commission's decision

[00:24:56] Speaker 00:
that that type of business decision would be unreasonable.

[00:25:01] Speaker 00:
But this one is, looking only at the face of this complaint.

[00:25:05] Speaker 06:
Well, I believe that the Commission addressed the facts that were before it, and they... No, it did more than that.

[00:25:14] Speaker 00:
It went on to say there was a vacuous litigant, and of course, Princess could decide.

[00:25:18] Speaker 00:
It's not that the Commission couldn't have come to a reasoned decision in this case.

[00:25:22] Speaker 00:
The question is, have they done it?

[00:25:26] Speaker 00:
consistent with how they set up the procedures and how they set up the statutory requirements.

[00:25:32] Speaker 00:
It's not whether you could have a recent explanation.

[00:25:35] Speaker 00:
Agencies have wide range.

[00:25:37] Speaker 00:
I just need to know where it is in here because I haven't been able to see it.

[00:25:42] Speaker 06:
Understood, Your Honor.

[00:25:46] Speaker 06:
The best I can say is that I believe that the

[00:25:52] Speaker 06:
Commission's decision demonstrates that the facts that were presented did not state a plausible violation of the Shipping Act under Twomley.

[00:26:04] Speaker 06:
They decided that they had failed to state a claim upon which they would be granted.

[00:26:09] Speaker 01:
Thank you.

[00:26:11] Speaker 01:
Did you have something else you want to say?

[00:26:13] Speaker 06:
Your Honor, I did want to point out that in CCOM terminals for Seattle Court Authority,

[00:26:19] Speaker 06:
In that case, which was an FMC decision, the inconsistent profitability of one MTO was the basis to choose another MTO who appeared more financially attractive long-term.

[00:26:32] Speaker 06:
So again, as Judge Sentelle pointed out, business decisions were the heart of the decision, I believe, in all these cases.

[00:26:41] Speaker 04:
I don't know why you keep trying to win an argument that you don't have.

[00:26:46] Speaker 04:
Nobody is arguing with the proposition that they can use business-related decisions.

[00:26:50] Speaker 04:
The argument is coming over whether those business-related decisions have to be transportation-related.

[00:26:57] Speaker 04:
But you keep coming back with this, look here,

[00:27:08] Speaker 01:
Okay, thank you.

[00:27:11] Speaker 01:
Did Mr. Cornell have any time left?

[00:27:14] Speaker 01:
You can take two minutes if you'd like it.

[00:27:19] Speaker 03:
Let me just address a couple of quick things.

[00:27:22] Speaker 03:
Princess Quizline was never involved in the original litigation, which was brought under Padukta, the Deceptive and Unfair Trade Practices Act.

[00:27:30] Speaker 03:
The way Princess got involved was that their general counsel also represented global fine arts.

[00:27:39] Speaker 03:
The cruise was on a carnival vessel, not on a princess vessel.

[00:27:43] Speaker 03:
And there was a settlement which called basically for this never to happen.

[00:27:49] Speaker 03:
And that settlement was negotiated by the Princess General Counsel's office.

[00:27:57] Speaker 03:
And it was done with their fingers behind their back because they later claimed that it had been done in the past.

[00:28:06] Speaker 03:
The Twombly

[00:28:10] Speaker 03:
analysis here, we have a 74 page ALJ decision.

[00:28:16] Speaker 03:
Twombly was designed to eliminate the problems that Conley v. Gibson bedeviled the Article III courts for forever.

[00:28:26] Speaker 03:
and since it was decided that anything could be could be a lawsuit because it could always be amended and Twombly established this this thing of plausibility and clearly when you say we're dismissing on Twombly grounds you cannot go on to rule on the merits and that's exactly what when you can if you're saying alternative

[00:28:51] Speaker 04:
but they have a lot of cases where we've upheld not only district courts but also various administrative bodies where they have alternative bases and they may be wrong on basis A but right on basis B. Right, but they didn't do that here.

[00:29:05] Speaker 03:
They said because of we're just messing on Twombly none of these things count and in their decision, which I understood if they had a full plenary review,

[00:29:17] Speaker 03:
It's the standard is de novo.

[00:29:18] Speaker 03:
I do understand that.

[00:29:20] Speaker 03:
But the problem is, is they said we never decided this.

[00:29:24] Speaker 03:
And so going back to your

[00:29:27] Speaker 03:
Earlier argument, and I think it was, Judge Taylor said, you know, what we normally do in these cases is send it back to the district court.

[00:29:37] Speaker 04:
He was talking about cases where there was an allegation of incompetence.

[00:29:41] Speaker 03:
I understand.

[00:29:42] Speaker 03:
This case was not properly decided under Twombly, and it needs to go back.

[00:29:50] Speaker 01:
OK.

[00:29:50] Speaker 01:
Thank you.

[00:29:50] Speaker 01:
Case is submitted.