American Association of Cruise Passengers v. Cunard Line, Ltd. Carnival Cruise Lines, Inc. Princess Cruises Company, Also Known as Princess Cruises P & O, Inc., Also Known as Princess Cruises Paquet Cruises, Inc. Ocean Cruise Line, Inc. Sitmar Cruises, Inc. Marriott Corporation, Also Known as Sun Line Cruises Royal Caribbean Cruise Line, Inc. Regency Cruises, Inc. Cruise Lines International Association American Society of Travel Agents, Inc.

Citation: 31 F.3d 1184Docket: 92-7168

Court: Court of Appeals for the D.C. Circuit; November 2, 1994; Federal Appellate Court

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The American Association of Cruise Passengers (AACP) appealed the dismissal of its antitrust lawsuit against several cruise lines, which the district court dismissed without prejudice, citing the predominance of claims under the jurisdiction of the Federal Maritime Commission (FMC) over those under the Clayton Act. The Court of Appeals determined that the standard of predominance was incorrectly applied and that dismissal was not warranted. The court remanded the case for the district court to reinstate the claims related to non-common carriage.

Background details indicate that in 1986, the AACP alleged that the cruise lines engaged in a boycott in violation of federal and Maryland antitrust laws. The defendants contended that they were "common carriers" under the Shipping Act of 1984, asserting that such agreements fell under FMC jurisdiction. The district court initially ruled Cunard Line as a common carrier but found other defendants were not. An interlocutory appeal led to a reversal by the Court of Appeals, which ruled that cruise lines qualify as common carriers only when operating between U.S. and foreign ports, thus establishing that any boycott agreements involving them are governed by the Shipping Act rather than the Clayton Act. The case was remanded for the district court to address the claims that fall under its jurisdiction, acknowledging potential parallel litigation between the court and the FMC.

On remand, the district court dismissed the entire case, stating that the Court of Appeals did not intend for an all-or-nothing jurisdictional approach in cases alleging both common and non-common carriage boycotts. The district court concluded that common carriage activity predominated and dismissed the suit without prejudice, directing it to the Federal Maritime Commission (FMC), which has jurisdiction over common carriage aspects. The American Association of Cruise Passengers (AACP) appealed this dismissal.

The district court's dismissal was based on its belief that the aspects outside its jurisdiction predominated over those within its jurisdiction and that dismissal would optimize its resources. However, it is established that federal courts have a strong obligation to exercise their jurisdiction. While minimizing inefficiency in overlapping litigation is important, it cannot justify denying a party access to the courts as granted by Congress.

The AACP's claims consist of two distinct parts: one related to common carriage operations, alleging violations of the Shipping Act, and another related to non-common carriage operations, alleging violations of the Clayton Act and Maryland law. Despite overlapping factual issues, these claims are legally distinct and should be pursued in separate venues—the FMC and the district court.

The district court may dismiss a case if an agency has primary jurisdiction, meaning it is better suited to make initial decisions on specific issues, even when the court has subject matter jurisdiction. This doctrine emphasizes the importance of regulatory agencies in cases requiring specialized knowledge and the need for consistent outcomes across different jurisdictions.

The case does not involve the primary jurisdiction of the Federal Maritime Commission (FMC) because, while there are overlapping factual issues related to the defendants' alleged boycott of the plaintiff, there are no shared regulatory issues. Congress established separate legal frameworks for common and non-common carriers, each with distinct remedies for violations. The FMC can award double damages under the Shipping Act, whereas the Clayton Act mandates treble damages and allows for injunctions against future violations in district courts. The relationship between these frameworks does not create the jurisdictional overlap Congress aimed to prevent, meaning a cruise line won't face conflicting regulations for the same act. 

The court emphasizes that the policy implications of disparate legal treatment are irrelevant to the case's proceedings. Antitrust enforcement against regulated industries that step outside their regulated scope falls within the district court's jurisdiction, which does not require specialized regulatory knowledge. Thus, the district court should retain jurisdiction over antitrust claims that do not fall under FMC's purview.

Even if primary jurisdiction were applicable, the court expresses reluctance to dismiss the entire case, noting that if the FMC were to have jurisdiction over part of the case, the correct approach would be to stay proceedings rather than dismiss them. Dismissal could disadvantage the plaintiff due to potential statute of limitations issues under the Clayton Act, which might bar a new suit after FMC proceedings conclude. The court cites precedent to support the notion that dismissal is inappropriate if it prejudices a plaintiff's right to seek antitrust relief timely.

The AACP indicated to the district court that, following a previous ruling requiring it to address claims in two forums, it would likely not pursue claims related to the common carriage operations of cruise lines and would focus solely on its Clayton Act claims in the district court. The district court should have considered this option, which would have left it with a claim clearly within its exclusive jurisdiction. The court reaffirmed its earlier ruling that it has jurisdiction over non-common carriage claims brought by the AACP and determined that the doctrine of primary jurisdiction does not apply, necessitating the district court's exercise of that jurisdiction. Furthermore, even if a court could defer to an agency with primary jurisdiction, it should not dismiss the case outright if doing so could negatively affect a party's rights. Consequently, the case is remanded for further proceedings consistent with this opinion, and the district court's dismissal order is reversed.