[00:00:03] Speaker 01: case number 15-1035. [00:00:05] Speaker 01: Mayor Terminals LLC Petitioner versus Federal Maritime Commission at L. Mr. Bress for Petitioner, Mr. Graham for Respondent. [00:00:22] Speaker 06: Good morning, Judge. [00:00:23] Speaker 06: How long may it please the Court? [00:00:25] Speaker 06: Because the Commission has conceded that two of its justifications can't sustain the order, this appeal is now focused rather narrowly on the Commission's ruling that the benefits of retaining Maersk as a carrier justified giving better rates. [00:00:47] Speaker 03: May I ask a question that is not absolutely clear from the record or the briefs? [00:00:53] Speaker 03: Did Marist Sea Land not only ask for a lower rate, did they ask for a preferential rate? [00:01:00] Speaker 03: Were they specifically asking that their rate be in preference to the other port operators? [00:01:08] Speaker 06: No, they did not, Your Honor. [00:01:10] Speaker 06: They just wanted a lower rate, not necessarily preferential rate, which of course brings into play the commission's ruling at Ball Mill, where they said no blame attaches, in that case, to the port for giving Warehouser a particularly good deal. [00:01:24] Speaker 06: But having done so, it had to extend the same deal to others, to its other tenants. [00:01:30] Speaker 03: So is the key issue in this case only whether the [00:01:34] Speaker 03: The deal given to Marist Sealand should have been extended to your client or to all other port operators. [00:01:47] Speaker 06: Your Honor, we're just arguing on behalf of our client. [00:01:50] Speaker 06: It may be that other port operators had different terminals with different characteristics. [00:01:54] Speaker 06: It's not something that's part of our case. [00:01:57] Speaker 03: But the key to your case is not that [00:02:04] Speaker 03: The Port Authority made a mistake in giving a lower rate, giving a low rate to Maersk Sealand. [00:02:12] Speaker 03: It's the gravamen of your case is that it wasn't extended to you. [00:02:17] Speaker 06: That's right, Your Honor. [00:02:18] Speaker 06: I mean, this is a preference case. [00:02:20] Speaker 06: And the real question is, did they err in holding that it was OK to prefer, if you will, APM, Maersk? [00:02:29] Speaker 06: to Maher on the grounds, essentially, that APM Maersk had a carrier affiliate that was threatening to leave the port. [00:02:39] Speaker 05: But the opinion says that Maersk could have left the port and devastated, but that you couldn't. [00:02:48] Speaker 06: Your Honor, what they were really talking about is that Maersk, the carrier, of course, can send its ships to any port that it would like. [00:02:57] Speaker 03: It wasn't Maersk. [00:02:57] Speaker 03: It was Sealand. [00:02:59] Speaker 06: Well, it was Maersk and Sealand, the carriers, Your Honor, as compared to APM Maersk, which is the terminal operator. [00:03:05] Speaker 03: That's what I mean. [00:03:06] Speaker 03: It wasn't the terminal operator threatening to leave. [00:03:08] Speaker 03: It was the carrier. [00:03:10] Speaker 06: They would have left with them, of course. [00:03:11] Speaker 06: That's the whole point to it. [00:03:12] Speaker 06: But nobody cared at the port, really, whether [00:03:15] Speaker 06: APM Marist, qua APM Marist, was a marine terminal operator there. [00:03:19] Speaker 06: The whole key to this was where the carrier business would go. [00:03:22] Speaker 06: And in that respect, this case really is on all fours with a case that was decided merely three years before the leases in this case were signed, and that's series. [00:03:33] Speaker 05: But in series, they say that they don't believe the claim that they would leave. [00:03:40] Speaker 05: Well, Your Honor, they say that. [00:03:42] Speaker 05: And that the other one, [00:03:44] Speaker 05: series was willing and able to provide the same kind of guarantee. [00:03:47] Speaker 05: While in this case, it's the opposite. [00:03:49] Speaker 05: They do believe the threat that they'll leave. [00:03:53] Speaker 05: And in fact, the person who controlled Mayer at the time before you did the leverage buyout was agreed with that. [00:04:02] Speaker 05: So isn't this sort of a unique case? [00:04:04] Speaker 05: So imagine the facts are, as I'm going to put them to you just for the moment, I know you dispute the facts. [00:04:09] Speaker 05: Imagine the facts are that [00:04:13] Speaker 05: and I don't care whether they're called mayors or Sealand or whatever, that they say, we're going to leave. [00:04:17] Speaker 05: The facts are that if they do leave and that they can get a $120 million better deal at Baltimore, and if they leave, it's going to be devastating for the port, including devastating for the mayor. [00:04:33] Speaker 05: And Mr. Mayor says, yeah, I totally agree with that. [00:04:36] Speaker 05: This is bad. [00:04:37] Speaker 05: I know it's bad, but it's this or we're out of business in the end because the port's out of business. [00:04:43] Speaker 05: So in this kind of unique case where the company who was suing here [00:04:50] Speaker 05: agrees that it would be a disaster for the pork. [00:04:54] Speaker 05: Under those circumstances, isn't that a transportation factor? [00:04:57] Speaker 06: All right, Your Honor. [00:04:58] Speaker 06: I'd like to reserve a moment, of course, to attack the premises. [00:05:01] Speaker 05: Yeah, yeah, I would like to. [00:05:02] Speaker 06: But given that. [00:05:04] Speaker 06: Yeah. [00:05:04] Speaker 06: No, Your Honor, I don't think it's clear for the following reason. [00:05:08] Speaker 06: What we're really talking about here is an attempted tying arrangement, which is Maersk the carrier using essentially market power from being a dominant carrier. [00:05:19] Speaker 06: to drive a preferential rate for its marine terminal operator at the port, essentially extending its market power into the port. [00:05:28] Speaker 03: In other circumstances, Your Honor... But it didn't even ask for a preferential rate. [00:05:33] Speaker 06: Well, actually... It is for a lower rate, but not necessarily preferential. [00:05:37] Speaker 06: Absolutely agreed, Your Honor. [00:05:39] Speaker 03: In other words, driving a lower rate. [00:05:41] Speaker 03: Be careful the way you say it. [00:05:43] Speaker 06: Your Honor, I accept the correction. [00:05:45] Speaker 06: Driving a lower rate for its marine terminal operator on the back of its market power. [00:05:51] Speaker 06: And so the question of whether the distinct treating its marine terminal operator better than treating an independent marine terminal operator is OK. [00:06:03] Speaker 05: Let me refine the facts a little bit more. [00:06:08] Speaker 05: For whatever their combination of tying is, [00:06:12] Speaker 05: assume for the moment doesn't violate some antitrust law, no one's claimed that it does, they say, give us 120 million more or we're going to leave and go to Baltimore. [00:06:22] Speaker 05: And imagine everybody agrees that if they can do this and that if they do do this, the port will be devastated and your company will go out of business. [00:06:33] Speaker 05: Totally out of business, the port will go down, you don't have the choice of going to Baltimore, you're finished. [00:06:39] Speaker 05: Not OK? [00:06:40] Speaker 05: Still not OK? [00:06:40] Speaker 06: Well, Your Honor, I guess, as Judge Silverman pointed out, the problem here is not whether the court can say it's OK to give them that deal. [00:06:49] Speaker 06: It's the differentiation that's the issue. [00:06:50] Speaker 05: Yeah, but they say, also, they also say that you could not make the same claim. [00:07:00] Speaker 05: That is, again, assumed for the moment that that's correct. [00:07:04] Speaker 05: that you don't have a portability in the same way. [00:07:10] Speaker 05: So you think that you'd still have to give that? [00:07:13] Speaker 06: Your Honor, I do. [00:07:14] Speaker 06: It's not a question I don't think that this court has to address, because I don't think that the commission itself addressed any of this in its order. [00:07:23] Speaker 05: There's no reasoning. [00:07:24] Speaker 05: I'm reading all this from the order, so I guess I have a different view about that. [00:07:27] Speaker 06: Your Honor, they discussed the facts in their order. [00:07:29] Speaker 06: What they never really did do was straight up face the question of, what is a transportation factor? [00:07:35] Speaker 06: How do we decide whether this? [00:07:36] Speaker 06: There's no discussion, for example, of whether. [00:07:39] Speaker 06: a carrier can pressure a port to give its marine terminal operator a better deal, whether that's really a transportation factor. [00:07:48] Speaker 06: And it's a question that should be asked because transportation factors ordinarily have something to do with the service that's being provided and charged for. [00:07:57] Speaker 06: Now, it may have something to do with competition if the route over which you're traveling is one that's competitive. [00:08:03] Speaker 06: It may have to do with competition if the goods that are being transported are ones that people are competing about. [00:08:08] Speaker 06: But it always has something to do with what's actually being leased or provided. [00:08:12] Speaker 06: In this case, the different rate has nothing to do with what the MTOs themselves are providing at the port and are getting from the port. [00:08:21] Speaker 06: They're both getting land and facilities from the port to do shipping. [00:08:24] Speaker 05: So does all this lead to the conclusion, mayor says I want $120 million, [00:08:30] Speaker 05: Under your theory, FMC says, sorry, that's not a transportation factor. [00:08:34] Speaker 05: Mayor moves to Baltimore, and your company goes out of business. [00:08:36] Speaker 06: And that's perfectly reasonable. [00:08:39] Speaker 06: No, Your Honor. [00:08:39] Speaker 06: Our view is that they could always give us the same deal that they gave to mayors. [00:08:46] Speaker 05: So if everybody in the port gets $120 million less than the market rate, the original theory was, I'm just using $120 million as the number. [00:08:56] Speaker 05: The FMC says this is the rate we would have, that your client got the, not your, yeah, your client, your predecessor, client's predecessor, got the rate that we would have given before mayors threatened to reduce. [00:09:10] Speaker 05: So under your theory, everybody has to be given 120 million less. [00:09:14] Speaker 05: Is that right? [00:09:15] Speaker 06: If they're similarly situated, you're over there. [00:09:17] Speaker 06: As marine terminal operators. [00:09:19] Speaker 06: As marine terminal operators. [00:09:21] Speaker 06: That might be, you could have a transportation factor if they're not, but in this case the distinction had to do with an affiliation, not with what they were doing as marine terminal operators. [00:09:29] Speaker 05: Is there anything that I've heard about what the consequence to the port would be if both? [00:09:33] Speaker 05: You and Mayor Scott? [00:09:36] Speaker 06: I have actually have thought about that, Your Honor, and I think there's two things to keep in mind. [00:09:40] Speaker 06: Number one, if all ports are held to this kind of requirement, that you can't essentially cave to market power by carrier to treat MTOs differently from one another. [00:09:51] Speaker 06: then we don't know what the playing field would have looked like in Baltimore or elsewhere. [00:09:55] Speaker 05: There's no – I'm sorry, I shouldn't talk over you. [00:09:58] Speaker 05: There wasn't any claim that Baltimore had to do anything wrong to give them the extra 120. [00:10:04] Speaker 06: I just think it's unclear in the record. [00:10:06] Speaker 06: I agree that there's no claim. [00:10:08] Speaker 06: The other point, though, is that by giving – by putting all marine terminal operators on the same level, [00:10:14] Speaker 06: regardless of who their carrier affiliate is, you're going to promote efficiency in marine terminal operations. [00:10:21] Speaker 06: And by the way, it may be that Baltimore has a better port, and maybe it's more efficient for a carrier to go to Baltimore, all things considered. [00:10:30] Speaker 06: Those are things that I'm not sure the law would have a preference on. [00:10:34] Speaker 06: The law does have a preference generally on anti-tying, and that's true at the commission level, regardless of whether there is an antitrust violation. [00:10:42] Speaker 06: You know, cases like golf containers versus port of Houston, it's not cited in my briefs because we didn't get into the tying issues very much on this appeal. [00:10:53] Speaker 06: But that case actually discusses that the port has found unreasonable numerous times. [00:10:58] Speaker 06: Attempts by ports, for example, to tie having a berth at the port with using other services at the port. [00:11:05] Speaker 06: So that is something that they tend to look at. [00:11:07] Speaker 06: Here, there was just no discussion at all of, is this a transportation factor? [00:11:11] Speaker 06: They skipped it. [00:11:12] Speaker 06: They asked the question. [00:11:13] Speaker 06: They said, we haven't proved it's unreasonable. [00:11:15] Speaker 03: They used it to a word, transportation, but not factor. [00:11:18] Speaker 03: Where was it another word? [00:11:18] Speaker 03: Transportation? [00:11:19] Speaker 03: Services. [00:11:20] Speaker 06: And they used that, Your Honor, in a place where they just, it's a tag along to an argument about whether there were [00:11:27] Speaker 06: whether there was a subsidy in this case. [00:11:30] Speaker 03: Would they not get Chevron deference with respect to the interpretation of transportation? [00:11:36] Speaker 06: Absolutely, Your Honor. [00:11:37] Speaker 06: In fact, if I may, though, because I think it's critical to this appeal to actually address the premises of Chief Judge Kerlin's question, which is, those are not facts that this court was reading about this case, sorry, about [00:11:52] Speaker 06: about the question of whether series could be distinguished from this case. [00:11:59] Speaker 06: There's two grounds on which they now argue it could. [00:12:03] Speaker 06: One is they say maybe we decided in series, maybe we decided that case on the basis that we didn't believe [00:12:11] Speaker 06: that Maersk was ready to leave the port, or that it would have devastating effects if it did. [00:12:18] Speaker 06: You mean series. [00:12:20] Speaker 03: Sorry. [00:12:20] Speaker 03: You don't mean Maersk. [00:12:21] Speaker 03: You mean series. [00:12:22] Speaker 06: I'm sorry. [00:12:23] Speaker 03: Did the commission say that in the series case? [00:12:25] Speaker 03: No. [00:12:26] Speaker 06: I didn't say that. [00:12:27] Speaker 06: No, Your Honor. [00:12:27] Speaker 06: It's utterly made up. [00:12:29] Speaker 06: What they did is they recited the facts in that case, recited the allegations by series. [00:12:34] Speaker 06: I mean, sorry, by the Maryland Port Authority. [00:12:36] Speaker 06: which was that, A, they were really worried about Maersk leaving the port. [00:12:41] Speaker 06: The port had lost business over several years, Maersk itself had moved some of its operations to Norfolk, and Norfolk had provided incentives for Maersk to move all of its operations there. [00:12:52] Speaker 06: So they were quite worried about Maersk leaving the port, and they said straight out, and this is in the series opinion, it would be devastating for the port if they did so. [00:13:01] Speaker 05: there is no nothing in the however however however it doesn't matter to us that's not good enough and there's no indication series they say the argument is unreasonable in light of series abilities to fulfill the terms of the merits leaks including the vessel called inheritance in its cargo merits in its cargo guarantee [00:13:28] Speaker 05: I'd like to address that next year. [00:13:29] Speaker 05: Sirius was willing and able to provide the same sort of guaranteed MPA. [00:13:33] Speaker 05: And I'd love to address that next. [00:13:34] Speaker 05: There are two bases. [00:13:36] Speaker 06: And that's not true either, Your Honor. [00:13:37] Speaker 05: Not true in this case or not true in, but it is true in Sirius. [00:13:41] Speaker 06: They're playing with words, Your Honor. [00:13:42] Speaker 06: In Sirius, no, in Sirius, please. [00:13:45] Speaker 06: In Sirius, if we look to page 169 and 170 of the appendix. [00:13:50] Speaker 06: That's where I'm looking. [00:13:50] Speaker 06: All right. [00:13:51] Speaker 06: What they say on the, I think it's the top of page, [00:13:55] Speaker 06: 169, I believe, yes. [00:14:00] Speaker 06: Top of page 169, right-hand column. [00:14:02] Speaker 06: What they say is, and this is Ceres claiming, that they were fully capable of meeting guarantees comparable to Maersk's. [00:14:10] Speaker 06: What they were talking about is this, Your Honor. [00:14:13] Speaker 06: Ceres could not formally [00:14:15] Speaker 06: commit to particular vessels coming into the port. [00:14:19] Speaker 06: It didn't have its own vessels, and it did not provide a guarantee with respect to any other particular named vessels. [00:14:26] Speaker 06: All that was going on, and you can see this further down the page, is they talk about including the vessel calls inherent in its cargo guarantee. [00:14:35] Speaker 06: So all they were saying is they're bringing lots of cargoes in. [00:14:38] Speaker 06: To bring lots of cargo in, you need vessels to bring them in. [00:14:41] Speaker 06: So inherent in having committed to lots of cargo is an ability to bring lots of vessels. [00:14:50] Speaker 06: That is no different than this case. [00:14:52] Speaker 06: In other words, it is true that Brian Maher said, I can't commit. [00:14:57] Speaker 03: Well, as a matter of administrative law, number one, an agency can [00:15:02] Speaker 03: switch its position in adjudication. [00:15:05] Speaker 06: Absolutely. [00:15:05] Speaker 03: Your argument is you have to explain your position. [00:15:09] Speaker 03: And also an agency is entitled to some deference to interpret its own prior rulings, both of which are, so are they entitled to deference to interpreting series? [00:15:20] Speaker 06: Absolutely. [00:15:20] Speaker 06: A reasonable reading of it. [00:15:22] Speaker 06: But if you read series, of course, it's very clear [00:15:26] Speaker 06: Ceres wasn't saying, I can name the vessels and provide a vessel call like that. [00:15:32] Speaker 06: They were just saying, we've got lots of cargo. [00:15:34] Speaker 06: In bringing all that cargo in, we're going to bring a lot of vessels in, by the way. [00:15:38] Speaker 06: And so we can commit to a lot of vessels coming in. [00:15:40] Speaker 06: Well, in this case, the distinguishing factor is not a vessel call, but it's similar. [00:15:45] Speaker 06: The distinguishing factor here is a port guarantee. [00:15:48] Speaker 06: And what that is is Maersk saying certain numbers of Maersk containers are going to be brought in here. [00:15:54] Speaker 06: Well, sure, it's true that Maher can't promise to bring Maersk containers. [00:15:58] Speaker 06: And indeed, perhaps not even particularly named other carry containers. [00:16:01] Speaker 06: But they're promising to bring in a ton of containers. [00:16:04] Speaker 06: And inherent in that in the very same way is an ability to meet the substance of the promise being given. [00:16:11] Speaker 06: And that's all that was going on in Ceres. [00:16:14] Speaker 06: It's all that's going on here. [00:16:15] Speaker 06: And everything that they've tried to do is essentially to sidestep the hard question of, do we still think Ceres was right? [00:16:22] Speaker 06: And we would submit that hard question is worth sending back. [00:16:26] Speaker 06: This isn't an empty formality, because when an agency is forced to the point of actually having to think about overruling something, they're going to think a lot harder about what the right decision really is. [00:16:37] Speaker 06: And it's not a foregone conclusion that they're going to side that against us. [00:16:41] Speaker 01: What about ball mill? [00:16:43] Speaker 01: Do you want to say something about that? [00:16:45] Speaker 06: Yes, Your Honor. [00:16:46] Speaker 06: Baumill was also distinguished on a completely, I won't put purpose in here, but an incorrect ground. [00:16:54] Speaker 06: In Baumill, what was going on? [00:16:56] Speaker 01: The commission says here they didn't specifically address the argument. [00:16:59] Speaker 06: And what they're saying is the same thing, Your Honor, as they said in the other case, which is in Ball Mill, you had a warehouser which had threatened, in that case, definitely threatened to leave the port of Newark. [00:17:12] Speaker 06: It had already negotiated with the Port Elizabeth to leave, unless it got the ability to do its own back handling. [00:17:20] Speaker 06: It was a lumber operation. [00:17:23] Speaker 06: That same ability to do your own backhand link wasn't given to others, including Ball Mill. [00:17:30] Speaker 06: Ball Mill complained about it. [00:17:32] Speaker 06: In that case, again, the court said, but they threatened to leave. [00:17:37] Speaker 06: And this is a big lumber operation, and they would have gone somewhere else. [00:17:40] Speaker 06: And the commission said, that doesn't matter. [00:17:42] Speaker 06: But they went further. [00:17:43] Speaker 06: They said, look, we don't blame you. [00:17:44] Speaker 06: In fact, they said, no blame attaches to you. [00:17:47] Speaker 06: for having given warehouse a good deal. [00:17:49] Speaker 06: But having done that, you had to extend that deal to your other tenants. [00:17:53] Speaker 06: That was the holding in that case. [00:17:54] Speaker 06: And for the commission to come back and say, well, maybe we didn't believe that the threat was serious, ordinarily, a court doesn't look to an agency decision and look for hidden findings of unsubstantiated. [00:18:06] Speaker 05: No, but an agency can. [00:18:08] Speaker 05: Ordinarily, a panel of this court often looks at other previous panels and distinguishes them on the facts. [00:18:15] Speaker 05: And properly or not, we defer to the agency's distinguishing of its previous cases. [00:18:24] Speaker 05: They say they're distinguishing this one on the facts. [00:18:27] Speaker 05: We don't now look to see whether the facts are. [00:18:31] Speaker 05: exactly correct or not. [00:18:33] Speaker 05: We only look to see whether it's reasonable to distinguish it this way. [00:18:35] Speaker 06: Your Honor, I think there's a distinction here, which is they're not distinguishing it on the facts. [00:18:39] Speaker 06: Who's that? [00:18:40] Speaker 06: Sorry, the Commission is not distinguishing its prior decisions in series or ball mill on the facts. [00:18:45] Speaker 06: What they're distinguishing on is they're saying maybe we made a finding in there of insubstantial, unsupported, you know, insubstantial evidence to support a conclusion. [00:18:55] Speaker 06: But you don't conjure that maybe that was the basis when there's not a hint [00:18:59] Speaker 06: that either those facts were disputed or that the Commission disbelieved them. [00:19:04] Speaker 06: That's not the way we read opinions ever. [00:19:06] Speaker 06: When they say these are the allegations and that isn't enough as a matter of law, that's what they're saying. [00:19:11] Speaker 03: Now let me go on and ask you a question. [00:19:12] Speaker 03: What did the Commission say with respect to the issue, and I must sound like a broken record on this question, concerning whether or not there was an obligation [00:19:22] Speaker 03: to extend the same terms to any other port operator – port PTO, is it – terminal operator – who asked for the same terms? [00:19:32] Speaker 06: What they said in this case is that the two were different because we hadn't threatened to leave, Your Honor, and that's the exact same thing that, of course, was at issue in series. [00:19:41] Speaker 06: That's all. [00:19:42] Speaker 06: That's it. [00:19:43] Speaker 06: I mean, they've got two other grounds. [00:19:45] Speaker 06: I shouldn't say that. [00:19:46] Speaker 03: No, no, forget the other grounds, because everybody agrees. [00:19:49] Speaker 06: So they said, we hadn't threatened to leave, and we had said we can't provide the same port guarantee. [00:19:55] Speaker 06: But we couldn't provide that same port guarantee in the very same way that Syriza couldn't formally. [00:20:01] Speaker 03: No, no, you're back to your point. [00:20:04] Speaker 03: But I'm back to your point. [00:20:06] Speaker 03: Exactly. [00:20:07] Speaker 03: That's the commission's view. [00:20:08] Speaker 03: What was the port authority's view as to why the rates wouldn't be extended, the same rates extended to the other marine operators? [00:20:18] Speaker 06: Well, the port's view, again... Is this in the record, incidentally? [00:20:21] Speaker 06: What's that? [00:20:22] Speaker 03: Is it in the record? [00:20:23] Speaker 06: I just have their briefs view right here, Your Honor, and the briefs view is that it would be commercially irrational. [00:20:28] Speaker 03: That's the only thing I saw, too. [00:20:30] Speaker 06: Right. [00:20:30] Speaker 06: And that, of course, flies right in the teeth of ball mill. [00:20:35] Speaker 05: What about the Petchem case in our circuit? [00:20:40] Speaker 00: What about it, Your Honor? [00:20:41] Speaker 05: So the Court says, Judge Buckley, the Commission noted that although the CPA expected the demand for commercial towing to increase, the introduction of competition would cause Hevide, which was the existing tugboat company, to withdraw from the port. [00:20:56] Speaker 05: This would jeopardize the port's ability to assure reliable, competent towing services. [00:21:01] Speaker 05: Under the circumstances, the FMC concluded that the Port Authority's continuance of the V-Day as exclusive provider was justified and therefore turned down PetCap. [00:21:12] Speaker 05: That is, the company that would [00:21:18] Speaker 05: that was there would leave, and there wouldn't be sufficient towing services if you let in another one. [00:21:25] Speaker 05: And we upheld it. [00:21:26] Speaker 06: So in other words, the company that was there was the only one providing the towing services. [00:21:32] Speaker 05: It was exhibiting its monopoly power. [00:21:33] Speaker 05: It was saying, yeah, why isn't that what this is? [00:21:36] Speaker 06: Your Honor, there are some inconsistencies generally in the case law. [00:21:39] Speaker 06: You've got 50 mile rule, for example, is a case where massive labor unrest was the thing that would be an issue that could shut down a port. [00:21:47] Speaker 06: And that was the reason given for essentially labor peace was the reason to treat certain shippers differently from others. [00:21:54] Speaker 06: And in that case, the commission said, that's not good enough. [00:21:57] Speaker 06: We see the result it might have on the port, but you can't treat similarly situated shippers differently. [00:22:02] Speaker 06: Our point really is if you go back to series, which is the closest analogy, [00:22:07] Speaker 06: The only difference really is made-up differences that came up. [00:22:10] Speaker 06: They brought up afterwards that are not supported by a reasonable reading. [00:22:14] Speaker 03: Who was that? [00:22:14] Speaker 03: You're talking about the commission? [00:22:15] Speaker 03: The commission. [00:22:16] Speaker 06: The commission. [00:22:16] Speaker 06: Sorry, the commission. [00:22:18] Speaker 03: I want you to distinguish because our focus is on the commission rather than the brief. [00:22:23] Speaker 06: Absolutely. [00:22:24] Speaker 06: The Commission, in its order, and by the way, they talk about how they spent a lot of time dealing with Syriza, there's two paragraphs that deal with Syriza and the threat to leave. [00:22:33] Speaker 03: Can I, when you said they spent a lot of time talking about it now, you're talking about the Syriza? [00:22:37] Speaker 03: The Commission, in their current brief, spends a lot of, sorry, I'm sorry, Robert. [00:22:41] Speaker 03: I want to focus on the Commission's order. [00:22:42] Speaker 06: Right, and that's what I was focusing on. [00:22:44] Speaker 06: In other words, there's two paragraphs in the Commission's order. [00:22:47] Speaker 06: that deal with the threat to leave and whether that matters. [00:22:51] Speaker 06: And they both essentially deal with it on a series different from this case. [00:22:55] Speaker 05: So if we were to rule in your favor, what would happen in a case where there were two, they were equivalent, mayors and mayors. [00:23:08] Speaker 05: At this time, A and B. And A says, we're going to leave. [00:23:12] Speaker 05: And B agrees that if they leave, we will be devastated. [00:23:15] Speaker 05: Our own costs will go up because there will be no way to fund the fort otherwise. [00:23:22] Speaker 05: And everybody will go out of business. [00:23:29] Speaker 05: What happens then? [00:23:29] Speaker 05: We have to say, too bad, just go out of business, or what? [00:23:33] Speaker 06: I think they've got to extend the same pricing to other similarly situated submarine terminals. [00:23:41] Speaker 05: I appreciate the question about whether there's any facts on this, but now let me add facts. [00:23:45] Speaker 05: And if they did give the same discount, $120 million, the port would go under and cease functioning. [00:23:52] Speaker 05: It could not operate having lost $240 million. [00:23:56] Speaker 05: Then what? [00:23:58] Speaker 06: Your honor, that may just be the way that it works if another port is situated in a way that is far more advantageous in the marketplace. [00:24:06] Speaker 05: The answer is that the port shuts down. [00:24:09] Speaker 07: Do you agree with that? [00:24:11] Speaker 05: I'm asking you to accept my hypothetical. [00:24:14] Speaker 05: That the port would shut down. [00:24:15] Speaker 05: Yes, if it had to give the same $240 million discount off of what? [00:24:21] Speaker 05: whatever they had originally decided was the price that they could keep going, it would shut down. [00:24:27] Speaker 05: Because your answer is that it's not a transportation factor to consider whether the port will shut down. [00:24:33] Speaker 05: My answer, I think, Your Honor, to that hypothetical is it's not one that's been presented, and I think that the commission might have to... Well, that's not a good enough answer for me, because I need to know how to... If I want to write an opinion in your favor, I need to know why that would be different. [00:24:45] Speaker 06: Well, Your Honor, if you want to write an opinion in our favor, I think it's actually as [00:24:51] Speaker 06: as easy as saying, you've got another case that was dead on rights to this one. [00:24:55] Speaker 06: If you're going to distinguish it, if you're going to overrule it or put limits on where it might go, depending on the facts, do so. [00:25:02] Speaker 05: That wasn't a case where the company said, the port will suffer a dramatic decline in volume, which will raise the cost of the remaining business and motivate other major carriers to look for some more. [00:25:12] Speaker 06: It is a case, Your Honor, on page 157 of the respondent's addendum. [00:25:18] Speaker 06: where an MPA explains that the loss of Maersk would have been devastating to the port. [00:25:23] Speaker 06: That was in circumstances where the port of Maryland had been losing traffic, you know, over the last decade. [00:25:30] Speaker 06: Its most important carrier was Maersk, and it told the commission it will be a devastating loss. [00:25:38] Speaker 06: But the commission didn't accept that, didn't it? [00:25:40] Speaker 05: No, the commission did. [00:25:41] Speaker 05: Assume it did. [00:25:42] Speaker 05: Assume it did. [00:25:42] Speaker 05: Now I'm asking you, would it be reasonable to overrule Syriza? [00:25:45] Speaker 05: That's my question, OK? [00:25:47] Speaker 05: Well, forget about the administrative law question of whether they have one precedent on the subject or two or not. [00:25:53] Speaker 05: My question is, is it a transportation factor in your view? [00:25:58] Speaker 05: if the consequence of not giving it the reduction is the closure of the port. [00:26:05] Speaker 05: Is that a transportation factor? [00:26:06] Speaker 06: Your Honor, I don't think it would require overruling Ceres. [00:26:09] Speaker 06: Let me start there, because Ceres never faced the question of whether what would happen in that case. [00:26:14] Speaker 03: But you're not answering the answer. [00:26:15] Speaker 03: No, no. [00:26:15] Speaker 03: You're not answering Judge Garland's question. [00:26:18] Speaker 03: This is an interpretation of the transportation factor under his hypothetical. [00:26:24] Speaker 03: Would that be a transportation factor? [00:26:26] Speaker 06: I don't believe it would be any more than it was in 50-mile rule. [00:26:29] Speaker 06: So the FMC would be required to make a decision that would close the port. [00:26:35] Speaker 05: Is that right? [00:26:36] Speaker 06: I think that's your better argument, Your Honor. [00:26:38] Speaker 06: I will concede that it's a close one. [00:26:39] Speaker 01: Do you think we need to decide that question to rule in your favor? [00:26:45] Speaker 06: Absolutely not, Your Honor. [00:26:47] Speaker 01: Okay, why don't you explain that? [00:26:49] Speaker 06: Your Honor, in this case, all that this court has to decide [00:26:53] Speaker 06: is that based on the allegations in series that were not controverted and that were not found not to be true, the commission in series made a ruling, which was that even if the Marine Terminal operator with a carrier affiliate, even if the carrier affiliate was threatening to go somewhere else, it was a credible threat, and their leaving would be devastating to a port, [00:27:22] Speaker 06: That is not a transportation factor that allows the port to treat that marine terminal operator better than an independent marine terminal operator. [00:27:35] Speaker 06: And we just want you to go back and either distinguish that case or overrule it or come out on it. [00:27:44] Speaker 01: So you think even if we were to rule that the commission's decision here does not adequately distinguish ball mill and it's serious? [00:27:52] Speaker 01: even if we were to rule that, the commission would still be free to, assuming it could, overrule or distinguish those cases and hold that in a situation of the kind described by Judge Garland, it was a legitimate transportation factor. [00:28:10] Speaker 06: Your Honor, we think that the answer is, first of all, yes, and the other answer is we don't actually think the facts would show the type of effect on the port that Judge Garland's question would have. [00:28:21] Speaker 03: Yes, that's an important point. [00:28:23] Speaker 03: The Commission never discussed what the implication would be of extending the Maersk rates to other PTOs. [00:28:31] Speaker 06: Absolutely, it does not. [00:28:33] Speaker 06: And look, all we really want is the Commission to frankly address this question in this case. [00:28:39] Speaker 06: Think about honestly, think about its precedence, and decide what it thinks the right answer is and explain that. [00:28:44] Speaker 06: At that point, we'll be in a position to assess whether we agree or disagree with the explanation and whether it's sensible. [00:28:49] Speaker 06: But that's all we want at this stage. [00:28:51] Speaker 05: Can you just show me the part about a devastating impact on the poor in Syriza? [00:28:55] Speaker 05: Where is that? [00:28:56] Speaker 06: I'm sorry, Your Honor. [00:28:57] Speaker 06: That was on Respondent's Addendum, bottom of page 157, on the right-hand column. [00:29:05] Speaker 06: After a decade of suffering, financial losses, MTA... I'm sorry. [00:29:08] Speaker 06: Hold on. [00:29:08] Speaker 06: Yeah, go ahead. [00:29:09] Speaker 06: It's in the very last sentence there. [00:29:11] Speaker 06: After a decade of suffering financial losses, MPA explains that the loss of mares would have been devastating to the port. [00:29:19] Speaker 05: Now, of course... That's just a description of MPA's view, right? [00:29:23] Speaker 05: That's not the finding of... Oh, Your Honor, there is no finding. [00:29:27] Speaker 05: Our point really is this. [00:29:29] Speaker 05: When you've got allegations from one side... Just explain to me again. [00:29:32] Speaker 05: I'm obviously missing the point. [00:29:33] Speaker 05: Why is, why when they say, when the FMC says the reasonableness of MPA's decision is belied by its having ignored these factors. [00:29:46] Speaker 05: Ceres was willing and able to provide the same sort of guarantee. [00:29:50] Speaker 05: Why is that not- You're pointing to this order now, Your Honor, yes. [00:29:52] Speaker 05: To Ceres, I'm pointing to Ceres. [00:29:55] Speaker 05: Ceres itself. [00:29:57] Speaker 05: Yes, so we're not talking about the guarantee, Your Honor, we're moving over- Is that different than what was, than their claim about devastating? [00:30:04] Speaker 06: It is different, but in the following sense, Your Honor. [00:30:07] Speaker 06: As to that, what the Commission is doing is putting an overlay in its decision on what it means by willing and able to do the same. [00:30:14] Speaker 06: And you know that based on what they actually say about it when they expand on it, which is page 169 and 70. [00:30:21] Speaker 06: That's where, at the top of the second column on 169, starting at the very bottom of the prior column, they say Syriza finds that had MPA undertaken a specific analysis of Syriza's particular abilities, it would have been shown that Syriza was fully capable of meeting guarantees comparable to Maersk. [00:30:41] Speaker 06: So we'll start there. [00:30:42] Speaker 06: They're not saying the same. [00:30:44] Speaker 06: What that means is that they tell us what that means further down that same column. [00:30:49] Speaker 06: So if we go into the second full paragraph on that right-hand column, I'm starting with the sentence that says, MPA's accordance of significance only to Maersk's vessel call guarantee. [00:31:05] Speaker 06: Wait, where are you now in the second column on what page? [00:31:07] Speaker 06: Sorry, second column on the right on page 169. [00:31:10] Speaker 06: 169, yeah. [00:31:13] Speaker 06: Middle, sorry, the second full paragraph. [00:31:16] Speaker 06: Yes. [00:31:16] Speaker 05: And I am one, two, three, three sentences down. [00:31:24] Speaker 05: That Maersk vessel call guarantee? [00:31:26] Speaker 06: Yes, so Maersk vessel call guarantee does not guarantee [00:31:30] Speaker 06: Oh wait, sorry, the sentence after that, I'm sorry. [00:31:33] Speaker 06: MPA's accordance of significance only to Maersk's vessel call guarantee by virtue of its status as a carrier. [00:31:42] Speaker 06: Because again, this is the port saying this is something only the carrier can do. [00:31:45] Speaker 06: is patently unreasonable in light of Syria's ability to fulfill the terms of Maersk's lease, including the vessel calls inherent in its cargo guarantee. [00:31:57] Speaker 06: So what they're really saying is, no, they can't guarantee that Maersk vessels will come and a certain number of them will come, or frankly, sea-lands vessels will come and a certain number of them will come. [00:32:08] Speaker 06: What the commission is saying is, put form to the side. [00:32:11] Speaker 06: As a matter of substance, they're guaranteeing a lot of cargo. [00:32:14] Speaker 06: And to guarantee that much cargo, you need a certain number of vessels. [00:32:18] Speaker 05: Isn't the bottom line that they're saying that they do not think it would be devastating to the port? [00:32:23] Speaker 05: Wait a second. [00:32:24] Speaker 05: No. [00:32:25] Speaker 06: I don't think those two things are connected at all. [00:32:29] Speaker 05: You first pointed to MPA's claim [00:32:35] Speaker 05: that the loss of mares devastating to the yes yes and you don't think that the paragraph on page one sixty nine indicates that it would not have been a question of no no no they're talking about entirely different things so what's going on on the earlier pages [00:32:52] Speaker 06: If Maersk leaves, what effect will that have on the port? [00:32:57] Speaker 06: When you get up to this other page, all they're really saying is, Syriza will continue bringing in lots of traffic of its own. [00:33:03] Speaker 06: But they don't say that there's no indication or even hint that Syriza will be able to make up for the loss of all of the traffic of Maersk leaving. [00:33:12] Speaker 06: There's nothing that even comes close to saying that. [00:33:17] Speaker 05: OK. [00:33:17] Speaker 05: Any further questions? [00:33:18] Speaker 05: No. [00:33:19] Speaker 05: OK. [00:33:19] Speaker 05: Can we hear from the mission? [00:33:27] Speaker 05: May it please the court, Joel Graham for respondents. [00:33:29] Speaker 05: Can you respond on this point? [00:33:32] Speaker 05: I had read this paragraph on 169 of series as suggesting that or suggesting a stating commissions view that the claim that mayors leaving the court would be devastating was incorrect because series could fill in. [00:33:53] Speaker 05: Now, is that wrong? [00:33:57] Speaker 04: Well, in series, these two discussions are separate. [00:34:00] Speaker 04: They have the argument that the carriers threatened to leave the port, which in series, the commission does not talk about. [00:34:05] Speaker 04: It makes no findings as to the severity or credibility of the threat. [00:34:08] Speaker 04: It points out that the respondents raised that argument. [00:34:11] Speaker 04: It makes no findings as to that. [00:34:12] Speaker 04: So we don't know why that argument was rejected. [00:34:14] Speaker 05: It doesn't reject the argument. [00:34:15] Speaker 05: It doesn't reject. [00:34:16] Speaker 05: It implicitly rejects it. [00:34:17] Speaker 05: So opposing counsel is correct that this paragraph is on a different topic. [00:34:20] Speaker 05: Yes, that has to do with whether they can meet the cargo guarantee. [00:34:23] Speaker 04: And I'd like to point out that the [00:34:27] Speaker 04: Cargo guarantee or the vessel call guarantee in series is very different in nature than the poor guarantee and what was going on in the present case. [00:34:36] Speaker 04: In series, the port was looking for cargo and wanted vessel calls and offer that to any sort of carry who could provide them. [00:34:42] Speaker 04: The commission said it was irrational. [00:34:44] Speaker 03: Why is it not relevant to the commission to ask the question if this [00:34:52] Speaker 03: rate is given to Merse Sealand. [00:34:56] Speaker 03: What is the implication with respect to extending it to others? [00:35:01] Speaker 03: What is the economic? [00:35:03] Speaker 03: Why is it not, why didn't, isn't it relevant for the commission to consider that? [00:35:08] Speaker 04: Because the law protects competition, not competitors. [00:35:11] Speaker 04: It's not worried about whether Mark can compete with [00:35:17] Speaker 03: I totally do not understand the point at all. [00:35:22] Speaker 04: I understand what you said. [00:35:25] Speaker 03: I don't understand why that is a response to my question. [00:35:29] Speaker 03: Suppose hypothetically, [00:35:32] Speaker 03: that extending to other port operators, what do they call, PTOs? [00:35:36] Speaker 03: MTOs. [00:35:39] Speaker 03: They're much smaller operators, let's say. [00:35:41] Speaker 03: Extending to them the same rates that you gave or that the port authority gave to MERS would have insignificant economic consequences. [00:35:56] Speaker 04: Suppose that were true. [00:35:58] Speaker 04: That wouldn't make a difference. [00:36:00] Speaker 04: It wouldn't make a difference to you. [00:36:01] Speaker 04: It would not. [00:36:02] Speaker 04: It does not matter whether, in the abstract, the port could have given that deal to MAR or other terminal operators. [00:36:10] Speaker 04: The question is whether it was reasonable for the port to treat APM Marist differently than it treated MAR. [00:36:17] Speaker 04: And the commission addressed this in its order on page, this very question, excuse me, on page. [00:36:28] Speaker 03: I didn't think there was very much addressing this in the commission's order. [00:36:33] Speaker 03: Perhaps I'm wrong. [00:36:35] Speaker 04: It's page 38. [00:36:36] Speaker 04: 39 to 37 to 38 of the commissions. [00:36:51] Speaker 04: And it says, quote, the question, however, is not whether in a vacuum the port had a legitimate reason to refuse mayor's request for a grant of $19,000 per acre. [00:37:02] Speaker 04: Rather, the question for the purposes of an unreasonable preference claim is whether the unequal treatment is not justified by differences in transportation factors. [00:37:10] Speaker 04: The terms unequal, differences, and discrimination all suggest that the Commission must compare APM, Maersk, and MARS situations. [00:37:17] Speaker 04: The Port's decision not to give MARS certain lease terms cannot be divorced from its decision to give those terms to APM, Maersk, as MARS proposes. [00:37:24] Speaker 02: That's an explanation. [00:37:27] Speaker 02: That's an explanation? [00:37:28] Speaker 04: Yes it is. [00:37:29] Speaker 03: We give a preferential rate to MERS because we give a preferential rate to MERS. [00:37:34] Speaker 03: That's an explanation? [00:37:36] Speaker 04: We give a preferential rate to MERS because it provided above. [00:37:40] Speaker 03: That paragraph you read simply said we give it because we give it. [00:37:44] Speaker 04: And page 30-39 explained how APM presented risks and benefits to the port that Marr did not. [00:37:50] Speaker 04: There was no evidence to the contrary. [00:37:51] Speaker 03: I know, but the Commission never considers the economic consequence, the competitive impact. [00:37:57] Speaker 03: Nothing. [00:38:00] Speaker 04: If it didn't compare to the competitive impact, given the care with which it addressed Marr's arguments, Marr didn't raise these arguments about tying and market power until its reply brief. [00:38:10] Speaker 03: Well, I don't quite understand. [00:38:12] Speaker 03: I thought they, right from the outset, argued this violated the statute because it was an undue preference. [00:38:19] Speaker 04: Correct. [00:38:19] Speaker 03: Well, undue includes the economic impact of it, doesn't it, necessarily? [00:38:27] Speaker 04: Well, undue includes a lot of factors. [00:38:30] Speaker 03: Right. [00:38:31] Speaker 03: I'm still looking for the commissions. [00:38:33] Speaker 03: I don't think the commission ever addressed this, the implication of this. [00:38:37] Speaker 04: I don't know that it addressed the implication of the economic effect it would have on MAR and other terminal operators, but the facts don't suggest that they were... The only thing we have from the Port Authority is it would be silly to give the same rate to MAR. [00:38:58] Speaker 03: That's all. [00:38:59] Speaker 03: Be commercially dumb. [00:39:02] Speaker 03: That's it. [00:39:04] Speaker 04: And then commercial, that it's commercially dumb is not inconsistent with it being reasonable under the Shipping Act, so long as you can distinguish between them on a rational basis, which the port did, the commission found. [00:39:13] Speaker 04: Your only ground for the difference is that one could leave and the other couldn't? [00:39:19] Speaker 04: That is not the case. [00:39:19] Speaker 04: The difference is that one could leave and present, and if it had left, everyone agrees it would have devastated transportation at the port, whereas Marr presented none of those risks, or the benefits of retaining the carriers. [00:39:33] Speaker 01: Can I ask you about the commission's distinction of ball mill? [00:39:40] Speaker 01: Everybody's been talking about serious bit. [00:39:43] Speaker 01: So in its order here, the commission says, the commission acknowledged that the favored tenant in that case was ready to leave, right? [00:39:53] Speaker 04: Yes. [00:39:54] Speaker 04: OK. [00:39:55] Speaker 01: And said, but it did not expressly address the argument. [00:39:59] Speaker 01: That's what the commission says. [00:40:01] Speaker 01: But I don't see how that fits with what actually happened. [00:40:06] Speaker 01: The authority gave two considerations in that case for its decision, one of which was that the tenant was ready to leave. [00:40:16] Speaker 01: And then in the very next sentence, the commission says, these contentions afford no grounds for holding that the port did not violate the act. [00:40:24] Speaker 01: These contentions, and one of which was the acknowledged threat to leave. [00:40:30] Speaker 01: Why isn't that a holding by the Commission under those circumstances that a threat to leave, they don't discuss its consequences at all, a threat to leave, is not a transportation factor which the Commission has to either distinguish or overrule here? [00:40:48] Speaker 04: I agree that it did address the argument. [00:40:51] Speaker 04: It didn't explain why that argument was invalid. [00:40:54] Speaker 04: And it just says these contentions provide no reason. [00:40:57] Speaker 04: That doesn't give any explanation. [00:40:58] Speaker 01: It doesn't need to give an explanation. [00:41:00] Speaker 01: All we know is that there is a commission holding that a threat to leave is not a basis for, is not a transportation factor. [00:41:09] Speaker 01: That's all we know. [00:41:10] Speaker 01: Why isn't that a holding [00:41:12] Speaker 01: that a threat to leave that has to be distinguished. [00:41:17] Speaker 01: I guess I just don't see how you can distinguish how. [00:41:21] Speaker 01: Because it's not true that the commission did not specifically address the argument. [00:41:34] Speaker 01: That's what the commission says. [00:41:36] Speaker 01: But the fact is the commission involved in all rejected it, specifically rejected it. [00:41:42] Speaker 04: I would agree with your honor that it was a holding. [00:41:45] Speaker 04: It did reject it. [00:41:46] Speaker 04: And Baumel stands at most for the proposition that a mere threat to leave is not enough. [00:41:49] Speaker 04: I agree with that. [00:41:50] Speaker 04: But the commission in its order says that it's unclear. [00:41:53] Speaker 04: This is page J1044 in the commission's order in this case. [00:41:57] Speaker 04: It says, it's not clear whether it can never be a valid transcription factor or whether the alleged threats in those cases were not substantiated by the evidence. [00:42:04] Speaker 04: And what the commission was saying there is there were no findings in Ball Mill that if the tenant, which was a lumber wholesaler, the largest one, granted, had left the port, it would have an effect comparable to Carrier C. Lynn and Marisk leaving the port in this case, which everyone agreed that the evidence substantiated was a devastating threat to the port. [00:42:22] Speaker 04: So that's the distinction in bomb out. [00:42:24] Speaker 03: The commission used the word so I can address it. [00:42:26] Speaker 03: Suppose in the same situation, giving this preferential treatment to Maersk Sealand would result in the other longshore companies going out of business. [00:42:41] Speaker 03: Was there anything stopping Maersk from taking the business of other carriers besides Sealand? [00:42:50] Speaker 04: Well, I mean, there was a poor guarantee we were sort of encouraged not to poach. [00:42:55] Speaker 03: But there was nothing preventing them. [00:42:58] Speaker 03: No, nothing preventing them. [00:42:59] Speaker 03: So suppose then all the other longshore companies, these are longshore companies, aren't they, basically? [00:43:07] Speaker 03: Steve Doran, yes, your honor. [00:43:08] Speaker 03: Yeah, Steve Doran, longshore, same thing, from my experience years ago. [00:43:13] Speaker 03: Yes, your honor. [00:43:14] Speaker 03: And suppose the others all went out of business, or there was contemplative they all went out of business, it would still be OK? [00:43:20] Speaker 03: not necessarily the cancer not necessarily it's still be a transportation factor as far as you're concerned right but it would be the commission would be weighing that against um so the commission has to weigh these that was my point before the commission at least has to weigh the economic impact with this right i mean if there's evidence to that degree it might be something the commission can consider [00:43:44] Speaker 03: Well, if you're giving a preferential rate to one competitor in a market, I don't see how you can avoid considering what the impact of that will be. [00:43:56] Speaker 03: Now, to be sure, you're right. [00:43:59] Speaker 03: The original CEO of Mahler said it was needed to keep American sea land for the port. [00:44:08] Speaker 03: But his view is not the same view as the present owners' or perhaps other owners'. [00:44:12] Speaker 03: But anyway, [00:44:14] Speaker 03: That's sort of factual and episodic. [00:44:16] Speaker 03: The question I'm trying to understand is the legal question, which [00:44:21] Speaker 03: I'm not sure that the commission has really thought about. [00:44:24] Speaker 04: And I'd also point out, it may not satisfy you, but at least responsive to your question, that on page 13 of the commission's order, that's JA 1022, when it's going through the voluminous record explaining and weighing the evidence, it says, after the execution of the leases in 2000, the port share of the Atlantic Coast container volume increased and more was generally profitable. [00:44:43] Speaker 04: So, I mean, [00:44:44] Speaker 04: Is that lying? [00:44:46] Speaker 04: There's certainly no indication that Marr was losing business being poached until the Great Recession hit and which everyone was affected. [00:44:56] Speaker 01: I just want to pursue the point Judge Silverman was making earlier about the difference between the commission's brief and its order here. [00:45:05] Speaker 01: You have many, many pages in your brief where you explain why a threat to leave can qualify as a transportation factor. [00:45:15] Speaker 01: What in the decision is the best? [00:45:19] Speaker 01: What do you rely on in the decision for that proposition, the commission's decision? [00:45:23] Speaker 04: The commission's position that a threat to leave can. [00:45:27] Speaker 04: Well, the commission didn't come out and say and use those words. [00:45:30] Speaker 01: Right. [00:45:30] Speaker 01: That's my whole point. [00:45:31] Speaker 01: What are we reviewing here? [00:45:33] Speaker 04: Well, the question. [00:45:34] Speaker 04: We can't review your brief. [00:45:36] Speaker 04: The question is, it's not whether it uses those words, it's whether it's the commission's path and reasonably followed. [00:45:41] Speaker 01: OK. [00:45:41] Speaker 01: Where is that? [00:45:42] Speaker 01: Tell me that. [00:45:43] Speaker 01: I agree. [00:45:44] Speaker 01: The question is, what is the path? [00:45:46] Speaker 01: How do I follow this path? [00:45:47] Speaker 01: From the decision of the commission. [00:45:49] Speaker 01: I'll pull you to the specific way. [00:45:51] Speaker 04: I'll take you through it. [00:45:52] Speaker 01: Yeah, go ahead. [00:45:54] Speaker 04: On page 28, the commission sets out the burden and the burden shifting framework that it applies. [00:45:58] Speaker 04: Okay, got it. [00:45:59] Speaker 04: And let me try to get the J.A. [00:46:01] Speaker 04: numbers. [00:46:02] Speaker 01: Okay. [00:46:03] Speaker 01: I got all that. [00:46:04] Speaker 04: J.A. [00:46:04] Speaker 04: 1037 sets out the burden shifting framework. [00:46:07] Speaker 01: You're right, but that's not my question. [00:46:09] Speaker 04: 1038 through 1039, it applies in the first two elements. [00:46:14] Speaker 04: Then the next question is under the shifting framework is that the [00:46:18] Speaker 04: respondent, the port, must come forward with evidence justifying its preferential rent. [00:46:23] Speaker 04: The Commission addressed that evidence and set it out. [00:46:25] Speaker 04: Then it turned to Mars and said, given this evidence, which on its face relates to transportation, there's no more fundamental transportation factors than the fact that the port... Wait, wait, wait. [00:46:34] Speaker 03: The Commission never used the term transportation factor, did it? [00:46:37] Speaker 04: No, it did not. [00:46:38] Speaker 03: Although we are required to give Chevron deference to interpretation of language, [00:46:47] Speaker 03: It necessarily requires the Commission to interpret the language in the first place, and here you don't have it. [00:46:53] Speaker 03: That's a big gap, isn't it? [00:46:55] Speaker 04: Well, legitimate transcription factors is not in the statute. [00:46:57] Speaker 04: The statute says unreasonable and undue, and they interpret that language. [00:47:02] Speaker 03: But still, it still doesn't use the transportation factor point. [00:47:05] Speaker 03: Is that what you're looking for? [00:47:06] Speaker 05: It doesn't use the words transportation at all, is what you're saying. [00:47:10] Speaker 05: But it should be that it doesn't, no. [00:47:12] Speaker 05: So I thought you were going to point me to JA 1043, maybe. [00:47:16] Speaker 05: Once again, I've misunderstood. [00:47:18] Speaker 05: On J1043, it says, first full paragraph, mayor also argues that a carrier's threat to leave a port is not a legitimate justification under commission law because, quote, a valid transportation purpose pertains only to differences in the nature or cost of the services provided. [00:47:36] Speaker 05: Now, I had thought that a valid transportation purpose was just another way of saying transportation factor or whatever. [00:47:45] Speaker 04: It is. [00:47:46] Speaker 04: I hope I was getting there, but 1043 for next pages. [00:47:49] Speaker 05: If that's the case, then the next two pages explain their view by interpreting series, perhaps wrongly, for the proposition that the threat answers that question. [00:48:03] Speaker 04: That is correct. [00:48:03] Speaker 04: The commission goes. [00:48:05] Speaker 04: Marr had to show that these reasons were not legally cognizable under this court's version framework, which was endorsed in pet game. [00:48:13] Speaker 04: It made these arguments. [00:48:14] Speaker 04: The commission addressed them and explained why. [00:48:17] Speaker 05: The two judges are asking you, where is the phrase transportation factor or whatever in here? [00:48:24] Speaker 05: And I see the words transportation purpose. [00:48:27] Speaker 05: And I thought, [00:48:29] Speaker 05: that's where you were addressing it. [00:48:31] Speaker 05: I agree. [00:48:32] Speaker 05: Maybe I'm misreading it. [00:48:34] Speaker 04: No, you're not misreading it. [00:48:35] Speaker 04: That's where the commission uses that word to the extent that using those particular words are necessary. [00:48:40] Speaker 04: It uses them there and explains its conclusion and its reasoning. [00:48:44] Speaker 05: Perfect question. [00:48:46] Speaker 05: No. [00:48:46] Speaker 05: All right. [00:48:47] Speaker 05: Now I'm out of time, right? [00:48:48] Speaker 05: Thank you. [00:48:49] Speaker 05: Thank you. [00:48:49] Speaker 05: We'll give you another two minutes. [00:48:51] Speaker 05: You don't have to spend any more time on series because what does the council agree to with you? [00:48:55] Speaker 05: I promise not to. [00:48:56] Speaker 05: There you have it. [00:48:57] Speaker 05: Thank you. [00:48:58] Speaker 05: And what about this JA-1043? [00:49:02] Speaker 05: You were complaining, I don't mean complaining in a pejorative sense, that the use of transportation factor wasn't mentioned in the opinion. [00:49:11] Speaker 05: Isn't this what you mean by that, at JA-1043? [00:49:15] Speaker 05: A valid transportation purpose pertains only to differences in the nature or cost of the services provided? [00:49:20] Speaker 06: Your Honor, yes. [00:49:22] Speaker 06: And if we go on from there, if we can, to 1044. [00:49:25] Speaker 06: So the actual purported explanation starts there. [00:49:28] Speaker 06: And they say there's little commission precedent relevant to whether a port authority may take into account a carrier's threat to leave. [00:49:35] Speaker 06: So they say that. [00:49:37] Speaker 06: They then go through and distinguish the cases, or try to, that we say prevent them from doing what they're doing. [00:49:42] Speaker 06: But what they never go on to do is to say, OK, those cases we don't think bind us, and here's why we think doing this is a valid transportation factor. [00:49:52] Speaker 06: There's no discussion at all on that that actually addresses the issue and faces up to it. [00:50:01] Speaker 06: So you've got that problem. [00:50:03] Speaker 06: You've got the problem of not, I would say, honestly and forthrightly dealing with both ball mill and with series. [00:50:11] Speaker 01: And the question is- What's the answer to counsel's argument that in ball mill, they said there's no evidence as to any of the threat with the hand that you went to? [00:50:20] Speaker 06: I'm sorry, Your Honor. [00:50:22] Speaker 01: The commission says here, well, the ball mill is different because, yes, we said that factor was not enough, but there's no evidence in the record as to what effect the threat would affect. [00:50:34] Speaker 06: So what the order actually says about ball mill [00:50:39] Speaker 06: It is therefore not clear whether the Commission, Ball Mill and Ceres, let's forget Ceres for the moment, determined that a threat to leave a port can never be a valid transportation factor or whether the alleged threats in those cases were not substantiated by the evidence. [00:50:55] Speaker 06: So they're relying on the second part there and [00:50:59] Speaker 06: Sure. [00:51:01] Speaker 06: What we know is there's nothing in Ball Mill that suggests that the threat to leave was not substantiated by the evidence. [00:51:07] Speaker 06: As Your Honor pointed out, Judge Tatel, quite to the contrary, they state the allegation in Ball Mill and say that's not enough. [00:51:14] Speaker 06: So this was a ruling of law, not one of insubstantial evidence. [00:51:19] Speaker 06: And of course, ultimately, as Judge Silverman suggested, they've got to wrestle with this question of if they're not going to give us the same [00:51:28] Speaker 06: the benefit of the same rates, why not? [00:51:31] Speaker 01: That's a good reason. [00:51:31] Speaker 01: So all they'd have to say, if we send this back, all they'd have to say about ball mill, to do it properly, that is to follow standard rules of administrative procedures here, they would have to say it's not, we acknowledge ball mill, but to the extent it suggests [00:51:51] Speaker 01: that a threat would not be a factor in the absence of evidence of damage, we overrule it, right? [00:51:57] Speaker 01: That would be okay. [00:51:58] Speaker 06: Your Honor, I think that they could deal with Baumele and Syriza. [00:52:02] Speaker 06: by saying that they overrule them to the extent that they held what we're suggesting. [00:52:07] Speaker 06: But then they'd have to further wrestle with why is it that what was threatened here. [00:52:12] Speaker 01: I understand. [00:52:12] Speaker 01: They need to go on and state affirmatively what the theory is, not just by rejecting your arguments. [00:52:19] Speaker 01: That's exactly it, Your Honor. [00:52:20] Speaker 06: And as noted, we think these rules about having to explain yourself are there for a reason. [00:52:26] Speaker 03: We're not asking to be sent back just to lose. [00:52:28] Speaker 03: We got your point on that. [00:52:29] Speaker 03: I have a specific question on timing. [00:52:32] Speaker 03: You made this, the original lease that Meyers signed was what, 2000? [00:52:39] Speaker 03: 2000. [00:52:39] Speaker 03: 2001, was it? [00:52:42] Speaker 06: It was 2000, it was October, June of 2003. [00:52:45] Speaker 03: The same time as, and what was the date of the Meyers? [00:52:50] Speaker 06: Meyers was January of 2000. [00:52:52] Speaker 03: The same year? [00:52:53] Speaker 03: Yeah. [00:52:55] Speaker 03: Now, there's no question your CEO at the time thought it was a good thing, because he was desperate to all sea land in Maersk. [00:53:05] Speaker 06: He thought two things. [00:53:06] Speaker 06: He thought it was a good thing, and he thought he should get the same rate. [00:53:08] Speaker 06: And he said that. [00:53:08] Speaker 03: Did he say that? [00:53:09] Speaker 03: Yes, absolutely. [00:53:10] Speaker 03: He specifically asked for the same rate. [00:53:11] Speaker 03: Absolutely asked for the same rate. [00:53:14] Speaker 06: Could you just show us where he said that? [00:53:15] Speaker 06: No, of course, your honor. [00:53:16] Speaker 06: It's in a couple of different places. [00:53:41] Speaker 06: Sorry, it's taking me a moment. [00:53:45] Speaker 03: Take your time. [00:53:45] Speaker 03: It's important. [00:53:46] Speaker 06: Yeah. [00:53:46] Speaker 06: Yes. [00:53:47] Speaker 03: I think. [00:53:49] Speaker 06: So he says that there's a letter on page 34 of, OK, so we cite it in page 34 of our final brief. [00:54:08] Speaker 06: Where is it on the right? [00:54:11] Speaker 06: Let's see. [00:54:11] Speaker 06: Mr. Ma wrote this letter with the understanding. [00:54:13] Speaker 06: So what we're citing there is the JA at 152. [00:54:17] Speaker 06: The Port Authority has consistently stated its desire to provide a level playing field. [00:54:24] Speaker 06: And if we go to JA 152. [00:54:25] Speaker 05: Wait, wait. [00:54:27] Speaker 05: JA 152 is where? [00:54:30] Speaker 05: a fairly level playing field. [00:54:36] Speaker 06: This is quite a bit here, Your Honor, and I'm sorry I'm not getting to it fast enough for you. [00:54:40] Speaker 06: It's stated both in a memorandum. [00:54:45] Speaker 06: Okay, here it is. [00:54:45] Speaker 06: I've got it. [00:54:46] Speaker 06: So JA-264 is a better site. [00:54:49] Speaker 06: Thank you for handing it over to me. [00:54:52] Speaker 06: J-264, they say, and this is a letter from Brian Marr to the Executive Director of the Port Authority of New York. [00:55:04] Speaker 06: So he says, in our view, it's the Port Authority's responsibility to save rent levels that are competitive with other ports in the East Coast, which provide a level playing field. [00:55:13] Speaker 06: And at the end of the paragraph, it says, Maersk competes with all of the other... I'm sorry, what paragraph? [00:55:17] Speaker 06: I'm sorry, I'm sorry. [00:55:19] Speaker 06: It's the second full paragraph. [00:55:20] Speaker 06: On 264? [00:55:21] Speaker 06: 264, if you go to the last sentence, although it's informed by the text before it. [00:55:27] Speaker 06: He says, MAR terminals competes with all of the other marine terminals in the port, regardless of whether they are steam. [00:55:32] Speaker 05: I'm sorry, it's not your fault. [00:55:33] Speaker 05: I'm sure it's mine. [00:55:34] Speaker 05: I'm on JA264. [00:55:36] Speaker 05: Yeah, last sentence of the second paragraph. [00:55:39] Speaker 05: Second full paragraph. [00:55:40] Speaker 05: Second full paragraph. [00:55:41] Speaker 06: I see. [00:55:42] Speaker 06: OK, go ahead. [00:55:42] Speaker 06: So MAR terminals competes with all of the other marine terminals in the port, regardless of whether they are steam ship controlled or not, and therefore must have comparable pricing. [00:55:51] Speaker 06: And then the next page, at the conclusion, [00:55:54] Speaker 06: The second to the last sentence says, in order to justify this intended investment that Mars is making, essentially the port must be competitive and we must be on a level playing field with our competitors within the port. [00:56:09] Speaker 06: He also said in his letter to Governor Whitman, which is part of the record here, when he's telling her, please do this, he also indicates that he expects the other terminals will get the same deal. [00:56:21] Speaker 06: None of this is actually controverted by the other side, and it's been discussed in the briefing here. [00:56:25] Speaker 06: What the other side will point out is that the court said, we're not guaranteeing you're going to get that, because he asked for a level playing field. [00:56:33] Speaker 06: And they said, we're not putting a most favored nations clause in your contract. [00:56:37] Speaker 06: What was the date of this lease, of the mayor's lease, Mars lease? [00:56:41] Speaker 06: Mars lease that we're working on right now, it's October of 2000. [00:56:44] Speaker 06: October of 2000. [00:56:46] Speaker 06: And when was the mayor's lease? [00:56:48] Speaker 06: It was January of 2000. [00:56:50] Speaker 03: How long does a mayor lease extend? [00:56:52] Speaker 03: What's the term? [00:56:53] Speaker 06: These are 30-year leases, Your Honor. [00:56:54] Speaker 06: 30 years? [00:56:55] Speaker 06: Mars is a 30-year lease. [00:56:56] Speaker 06: And what happened? [00:56:58] Speaker 06: And again, there's a fellow named Mosca who was one of the fellows from MAR who was deposed. [00:57:03] Speaker 06: And I can find the site for this. [00:57:05] Speaker 06: But he was asked, well, why did you say yes, ultimately, even though you wanted to have the same rate? [00:57:11] Speaker 06: Why did you say yes? [00:57:11] Speaker 06: And he said, well, if we hadn't said yes, [00:57:13] Speaker 06: They would have rebid our terminal, and the port could have come up with any number of reasons why it didn't want to deal with the MARS anymore. [00:57:20] Speaker 05: So I'm a little concerned about the special limitations. [00:57:24] Speaker 05: I appreciate it's not quite before us, but it does seem a little odd. [00:57:27] Speaker 05: So this was entered into, you said, in 2000, and the first owners, MARS, didn't sue, right? [00:57:35] Speaker 05: That's right. [00:57:36] Speaker 05: And you sued when? [00:57:37] Speaker 05: It was around 2008, your honor, 2009. [00:57:40] Speaker 05: And that's outside the statute of limitations for a suit, right? [00:57:44] Speaker 06: What they found is that it's outside of the statute of limitations if what triggers the suit is the original signing of the contract. [00:57:50] Speaker 06: Yes. [00:57:51] Speaker 06: But they left open the question whether there's a continuing violation given the nature of these statutes in maintaining an unlawful preference. [00:57:58] Speaker 05: So that would be different than the Leadbetter, the Supreme Court's opinion in Leadbetter, which said that each new paycheck is not a new violation. [00:58:06] Speaker 05: They left open the question of whether it is here. [00:58:08] Speaker 05: And what's happened with that? [00:58:10] Speaker 05: When was he left open? [00:58:11] Speaker 06: Well, Your Honor, what happened was we lost on the... I see. [00:58:13] Speaker 05: ...on the liability, so they often had to... So the statute of limitations has not been decided by the FMC? [00:58:19] Speaker 05: No. [00:58:20] Speaker 06: And the only thing that they've really even addressed at all, by the way, was the statute of limitations for the claim for reparations, not for the cease and desist. [00:58:27] Speaker 06: part of this. [00:58:29] Speaker 06: And they also didn't address the section 41102 unreasonable practices and whether that has a different statute of limitations. [00:58:39] Speaker 06: That's still open. [00:58:40] Speaker 03: There could be a change in the economic circumstances between the two port operators. [00:58:55] Speaker 03: over time with a 30-year lease that could give rise to a new cause of action even if there wasn't one originally. [00:59:03] Speaker 03: But that all is not before us, as the Chief Judge pointed out, the statute of limitations wasn't raised. [00:59:10] Speaker 03: But I could see how, with a 30-year lease, you could have a shift in situations, which makes a preference unreasonable when it wasn't originally unreasonable. [00:59:20] Speaker 07: That's right, Your Honor. [00:59:21] Speaker 03: Yes. [00:59:22] Speaker 03: All right. [00:59:22] Speaker 03: Well, thank you very much. [00:59:23] Speaker 06: Thank you very much. [00:59:24] Speaker 06: I appreciate your indulgence. [00:59:26] Speaker 05: Likewise. [00:59:27] Speaker 05: We'll take a matter under...