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Case number 24-1007 et al.

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MSC Mediterranean Shipping Company as a petitioner versus Federal Maritime Commission and United States of America.

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Mr. Longstreth for the petitioner, Mr. Summers for the respondents, Mr. Reynolds for the intervener.

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Good morning, Your Honors.

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John Longstreth for petitioner, MSC Mediterranean Shipping Company.

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I'd like to reserve three minutes for rebuttal.

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Federal Maritime Commission's grant of all judgment in this case was erroneous as a matter of law on numerous grounds.

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Most fundamentally, the commission did not have jurisdiction over the case because each of the claims was directly and expressly premised on the assertion that MSC had failed to meet its contractual commitments.

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The Shipping Act removes the commission's jurisdiction to hear such claims, even if they also state Shipping Act claims.

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The Commission recognized this in its Cargo 1 decision and said it cannot hear claims.

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When does it do that?

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I'm sorry?

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Where does it say that?

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Section.

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Even if there are statutory complaints, jurisdiction is removed, if arbitration is somehow, where does it say that?

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So it says in 46 USC 40502 F, the old 8C.

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That would have said.

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I'm sorry?

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F talks about

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It says no jurisdiction over breach of contract claims.

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That's correct.

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But it doesn't say anything about a situation where there are also statutory claims to be raised.

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This commission clearly has jurisdiction under the statute.

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We've said it in at least two or three cases that the parties cannot negotiate that away.

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Right.

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There's no question about the law in this circuit on that.

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Commission's jurisdiction is clear to deal with cases in which the complaint is based on statutory misdeeds.

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And that's exactly what this is about.

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And they're clearly statutory misdeeds here.

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Whether you think they're meritorious or not is not the point.

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The point is that's something that can be litigated.

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The commission clearly has the authority to do it.

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And merely because there is the possibility of arbitration over

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some contract claims.

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It's not the question.

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And the commission made that clear in 1999.

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The commission decided the law 25 years ago.

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And I'm blown away by the argument you're making that.

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Well, but 25 years ago, when you read Costco, it is absolutely clear what they're saying.

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And no circuit court has ever overturned the commission's determination.

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Well, OK.

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There's a lot there, and I understand where I'm starting.

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So three things, I guess, I would say about that.

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First of all, the issue has never been before a circuit court.

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That's correct.

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It hasn't come up.

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And the cases very rarely get to this court.

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Second, I don't think it's correct to say that we're relying on the arbitration clause to somehow divest the commission of jurisdiction.

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Oh, you pointed to F. That's your argument.

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Yeah, but F, yes.

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Let's put it this way, F applies whether there's an arbitration clause or not.

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So I think the suggestion that somehow we're suggesting we have an agreement to divest the Commission of Jurisdiction, in this particular case, the statute divest of jurisdiction.

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Where?

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And you say it says it has no jurisdiction over breach of contract claims.

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And as the commission said in the case 25 years ago that you're pointing to the cargo one case, the commission very appropriately said that provision can't have any meaning unless some shipping act claims, which state shipping act claims are nonetheless outside the commission's jurisdiction because of this provision.

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Because if it doesn't state a shipping act claim, then it doesn't state a shipping act claim.

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The commission doesn't have jurisdiction over it.

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The question, the work that that section is doing, the old 8C45, the work that that is doing, and the commission was very explicit about this in Cargo 1, we cite it, we quote it.

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They said there have to be some cases where you state a shipping act claim, but it's nonetheless jurisdiction is divested by HC.

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Otherwise HC is meaningless.

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They don't have jurisdiction to start with.

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So there's got to be some category of claims.

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And that's what cargo one said.

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Let me just finish this one, please.

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The commission said they looked at what you're suggesting and they understood

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that VINMAR could have been read that way, and they say there's a more nuanced way to read it.

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And if we're talking about situations where the claim is contractual, and that's all we're talking about, that's one situation.

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But where you have overlapping where permission said you have to be more sophisticated to look to see whether there are statutory claims here, the commission can rise.

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The fact that they could also arise in arbitration does not

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decide the issue.

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That does not alone decide the issue.

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It does not alone decide the issue, but there is still an analysis that needs to be made under their law.

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And they said specifically, I think it's on page 14 or whatever the case of the case we decided, I don't have it right in front of me, but they said absolutely specifically, we quoted it.

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You have to have some.

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I'm talking about the Cargo One case, the Cargo One Costco case.

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We believe the more appropriate test, having gone through what you just said, they then say, but we believe the more appropriate test is whether a complaint's allegations are inherently a breach of contract claim or whether they also involve elements peculiar to the shipping app.

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Right.

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And if they also involve elements peculiar to the shipping app, the commission

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commission since, excuse me, they surely have jurisdiction if they want to assert.

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Right.

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But the question is, are the claims premised on and that's their exact language and that's the language we think that they completely ignored here.

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Premised on.

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Inherently a breach of contract claim.

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Right.

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And they also involve elements peculiar to the shipping act.

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Right.

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And then they go on to say when they go on to say in that in that case, and we quoted the language, if in fact, the claims are premised on a breach of contract, premised on a breach of contract.

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And these are all premised on a breach of contract.

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You read through that complaint over and over and over again.

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They go back to the breach of contract.

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You know, you better read the whole page.

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You're simply wrong, because that's not what they're saying.

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In contrast, where the alleged violation raises issues beyond contractual obligations, the commission will likely presume, unless the facts are proven to not support such a claim, that the matter is appropriately before the agency.

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That's what they decided 25 years ago.

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And we have said, in at least a couple of cases,

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The mere fact that arbitration is possible does not divest the commission of its statutory authority.

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And this is a scheme that's well understood in ed law.

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The NLRB is a perfect example.

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There are all kinds of contractual claims.

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And we've seen those fights over the years where the board may not take authority, but they may have authority if there's an underlying unfair labor practice involved as well.

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That's what the commission cleaned up 25 years ago.

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I'm sorry, I guess we're just disagreeing on this.

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And let me explain to you where I think the distinction is between what we're saying and what you're saying is.

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There is no question that we cannot divest the commission of its regulatory authority.

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So for example, it has regulatory authority over these contracts.

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And for example, the case that Judge Wilkinson, Judge Wilkinson

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Wilkins heard on two weeks ago about detention and emerge claims.

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There is no question that if a contract comes before the commission and the question is, is this contract consistent with the shipping act or not consistent with the shipping act.

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In the detention and demurrage claims, for example, the question is, can you charge when they hold the equipment too long?

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And the commission is saying, in that case, we don't care what the contract says.

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Your contract, in your words, Judge Edward, your contract cannot divest us of jurisdiction to determine what's reasonable and what's not reasonable.

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So we still have that regulatory authority, but that's not this case.

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This case is not saying there was something wrong with the contract.

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This case is saying over and over and over again, probably 20 times in the amended complaint, we failed to honor our service contracts.

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We failed to provide.

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Are you contending that if there are facts alleged,

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that if proven could prove both a breach of contract and a violation of some provision of the Shipping Act, then necessarily that complaint

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fails the Cargo One test?

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Not at all, your honor.

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And I think that's a very important distinction to make.

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You can have situations where there's an overlap, as Cargo One says.

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The question that's critical, we think, is do you have to prove a breach of contract in order to make the Shipping Act claim?

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In other words, does the commission, which is divested of jurisdiction to hear breach of contract claims under this section,

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Okay, whether we have an arbitration clause or not, it's the best of that jurisdiction.

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It can't decide breach of contract claims.

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So then the question becomes, you've got a shipping act claim.

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And sure, you know, they've stated shipping act claims, although their shipping act claims are basically take their unreasonable practices claim.

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Their unreasonable practice claim is we had a practice of breaching our contract.

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Their failure to comply with an agreement is, well, you had a service contract, you didn't comply with it.

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Every single one of their claims is absolutely premised on

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a breach of contract.

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And that's the distinction.

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Yes, maybe you can bring a breach of contract claim.

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You can bring a shipping act claim.

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But if the shipping act claim, and if you allege these extra factors that aren't premised, those extra factors have to be not premised on the breach of contract.

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Excuse me.

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I'm sorry.

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We don't get the big money, but we do get to speak when we want to.

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I'm very sorry.

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I'm very sorry.

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So in count one, what the ALJ found and what the FMC adopted as far as reasoning was that there was a systemic nature of the alleged violations that went beyond the typical breach of contract claim.

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because the alleged was failure to maintain or provide booking reports, systematically preferring higher price cargo, and coercing surcharges, and that it also related to other shippers and not just MSC.

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So isn't that beyond proving just a breach of contract?

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Well, in the cargo one case, there were those allegations that there was an allocation scheme separate on the contract.

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And that's what's different in the cargo one case, which is that in the cargo one case, they did not come in and say these allocations violate the contract.

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Here, time and time again, they're saying the allegations violate the contract.

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And that is the basis of their claim that we had the right under the contract to have this cargo carried.

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UMSC did not carry this cargo.

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Whereas in Cargo 1, they were talking about there should be some kind of reasonable allocation scheme under the Shipping Act.

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So that's what made that, in that case, a case that went beyond the breach of contract.

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Here, all the allegations, and they come back to it time and time again.

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They come back to it and say, here is a breach of contract.

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You failed on your service contract commitments.

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You condition compliance with it, all the way through it.

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Just to focus it on.

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Sure.

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for example, counts three and four, which assert unfair and unjustly discriminatory practice or undo or unreasonable advantage.

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And I understand you have a separate merits defense on those.

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But just on the cargo one jurisdictional question, those obligations to conduct business in a way that is not unfair and just or not undo

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not giving undue or unreasonable advantage.

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Those are statutory overlays on any contractual undertaking.

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And so is it your view that under cargo one, the commission lacks jurisdiction to hear those

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kinds of claims?

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Our claim is that you have to look at what's being alleged.

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This broad brush notion that just because we have asserted discrimination, in other words parroted the language of the statute, that's not enough because you have to look at whether those claims are nonetheless inherently contractual.

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And they're inherently contractual if they're premised on a breach of contract.

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Their discrimination claim here is that you breached our contract, and you may not have breached other contracts.

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That's their discrimination claim.

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And so our argument is that that, again, is, in the commission's words in cargo one, premised on a breach of contract, because that's what they're alleging.

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In other words.

[00:14:29] Speaker 01:
But in that case, so let me back up.

[00:14:32] Speaker 03:
Sure.

[00:14:33] Speaker 01:
Stepping away from the particular allegations in this complaint, I assume that you would agree that under cargo one, it's possible for a carrier's conduct to violate the provisions barring discrimination or disadvantageous treatment, but not the service contract.

[00:14:52] Speaker 03:
Yeah, it's possible for both to be the case.

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It's possible for it to.

[00:14:56] Speaker 01:
I'm just saying it's possible that you could have a claim under those provisions of the statute that didn't mention the contract, but was just about discrimination or disadvantageous treatment, right?

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Yeah, you could certainly have allegations that did not depend on breach of contract.

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And those allegations could either be or not be a breach of contract.

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That was my answer to Judge Wilkins' question.

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I apologize again for talking over him.

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That was my answer to Judge Wilkins question, which is that if, in fact, you can make the Shipping Act claim without also proving a breach of contract claim, then it's clearly within the commission's jurisdiction.

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And there's all kinds of cases that will be in the jurisdiction.

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We're talking about the situation.

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In those cases like this one, where part of the allegations does include facts amounting to breach,

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The breach becomes sort of a factual issue, rather than a legal fact, rather than the claim.

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The claim is the claim as outlined in the statute.

[00:16:02] Speaker 01:
And cargo one, the only provision that cargo one really seems to kind of kick to the curb as outside of the commission's jurisdiction is there's that provision

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that is currently, I think it's 411 04.

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A2.

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A2A.

[00:16:27] Speaker 03:
Yeah, A2A, yeah, failure to comply with a term of service contract.

[00:16:33] Speaker 01:
Which basically says failure to comply with a service contract amounts to a violation of the Act, which is in tension with Cargo 1 because Cargo 1 says, well, even though the commission has jurisdiction over violations of the Act, it doesn't have jurisdiction.

[00:16:49] Speaker 01:
right and and that's a good and that's a good 502f over that claim and i guess one question is why don't we read cargo one as only resolving the apparent tension between those two provisions and leaving all the other statutory obligations

[00:17:06] Speaker 01:
subject to the Commission's jurisdiction.

[00:17:08] Speaker 03:
Okay, and two questions on that.

[00:17:11] Speaker 03:
First of all, I think it's important to recognize and cargo one, the Commission did not hold that those other provisions, the discrimination provision, and there was another provision, I can't remember, 60 or something, but we'll talk about the discrimination provisions.

[00:17:26] Speaker 03:
It did not hold that those discrimination provisions were in the Commission's jurisdiction.

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even in the Cargo One case.

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It said they were presumptively in the commission's jurisdiction, presumptively because unlike A2, which specifically says failure to comply with an agreement, in those cases there are other provisions.

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But even there, when they sent it back to the administrative law judge in Cargo One, the case settled after it was sent back, so they never got to that.

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They said, look, we're going to presume that these A2 claims, failure to comply with a

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We're going to presume that those are in the jurisdiction.

[00:18:02] Speaker 03:
On those discrimination claims, we're going to presume they're not in the jurisdiction, but they did not specifically hold it.

[00:18:07] Speaker 03:
It was a presumption in both those cases.

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The first?

[00:18:12] Speaker 03:
I think you misspoke.

[00:18:13] Speaker 03:
OK, I made it up.

[00:18:13] Speaker 03:
The eight two claims, we presume, are outside the jurisdiction.

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The discrimination, we presume, are in the discrimination.

[00:18:19] Speaker 03:
And I must have misspoken because two people say I did.

[00:18:22] Speaker 03:
But anyway, so I think even in that case, it's important to recognize they did not say, even in cargo one, that just because you state a discrimination claim, you can't also have that claim ousted of jurisdiction because of breach of contract.

[00:18:36] Speaker 01:
I really didn't speak to it either way, did I?

[00:18:37] Speaker 03:
Well, it said it was a presumption and I guess what we're saying in this case is in this case where you have a complaint that over and over and over again talks about failure to honor service.

[00:18:47] Speaker 03:
Look at the amended complaint, paragraphs, it's a 129 to 154 of the Joint Appendix, you know, paragraphs seven to nine, failure to honor service contracts, commitments, failure to provide space at contracted rate, conditioning compliant with the

[00:19:01] Speaker 03:
19 to 21.

[00:19:03] Speaker 03:
All they're talking about is the service contracts with respect to the service contracts and negotiating service contracts.

[00:19:09] Speaker 07:
Let's look at, I don't know if you have it in front of you, JA 147 where there's a list of allegations of respondents' unjust and unreachable practices.

[00:19:23] Speaker 07:
You're at paragraph 96.

[00:19:25] Speaker 07:
Okay, I've got it.

[00:19:26] Speaker 07:
So like in paragraph 98, they allege that

[00:19:32] Speaker 07:
that basically your client was demanding that several accounts have accepted this PSS surcharge instead of performing under service contracts.

[00:19:51] Speaker 07:
And then similar allegation in paragraph 100, the way

[00:19:59] Speaker 07:
help me understand this.

[00:20:00] Speaker 07:
The way I read your brief and your argument is that you say that that's still inherently a breach of contract claim because that's part of it.

[00:20:14] Speaker 07:
The allegation is that instead of honoring our service contract with them, they're being forced to

[00:20:23] Speaker 07:
to pay these other surcharges or ship under the spot market.

[00:20:31] Speaker 07:
And so it's still really inherently a breach of contract.

[00:20:35] Speaker 07:
Is that a fair articulation of your argument?

[00:20:39] Speaker 03:
I think it is, Your Honor.

[00:20:40] Speaker 07:
So what would be a case where someone rebuts this presumption, their cargo one?

[00:20:51] Speaker 07:
So the one example you said is, well, if the contract itself violates the act, but there's got to be something more than that.

[00:21:00] Speaker 03:
Well, I mean,

[00:21:01] Speaker 03:
And I think this is a good example, because I think this is a case where, because of the nature of the allegations in this case, so when you're looking at paragraphs 98 to 100 on peak season surcharges, when you go back to the factual allegations in the complaint, which start at JA 139, 140, this is where they're talking about attempts to coerce extra contractual surcharges, go to 51.

[00:21:28] Speaker 03:
They sought to induce complainant to agree to pay surcharges in order to obtain previously contracted space.

[00:21:35] Speaker 03:
53, the service contracts do not permit or responded to hold or fail to withhold contracted space.

[00:21:43] Speaker 03:
54, practice of failing to provide contracted space.

[00:21:48] Speaker 03:
So I think this is a case where they

[00:21:52] Speaker 03:
The commission did say in Cargo 1 that we were going to presume these discrimination claims are within the commission's jurisdiction, but that resumption can be rebutted.

[00:22:05] Speaker 03:
It seems to me it's absolutely been rebutted in this case because those surcharge claims are all directly based on the allegation that we were breaching our contract in order to coerce these surcharges.

[00:22:17] Speaker 03:
So it does fall within that category of claims that Cargo 1 itself left open.

[00:22:22] Speaker 03:
for 8C to do some work.

[00:22:25] Speaker 01:
So my sense is that the proposition that Cargo 1 limits the commission's jurisdiction for statutory claims other than claims under A2A is a novel reading of Cargo 1.

[00:22:45] Speaker 01:
Is there any

[00:22:47] Speaker 01:
decision that reflects that?

[00:22:50] Speaker 03:
Well, there is, there's the, and we pointed this out, there's the global link decision, which was a 2014 ALJ decision.

[00:22:58] Speaker 03:
And that's one that was a very similar case to this one where the allegation was that the carrier had failed to carry a cargo under a minimum, it's an MQC, minimum quantity commitment.

[00:23:10] Speaker 03:
The case is global link and what's interesting about it is and by the way this comes up this has come up very infrequently there's some recent cases which we think suffered the same problem this does that they don't really do the analysis required but in the global link case they specifically the ALJ and again it didn't get up to the commission specifically said that this is within

[00:23:31] Speaker 03:
8c this is within the jurisdiction limitation dismissed the case we cited that case to the lj lj ignored we cited that case to the commission the commission ignored.

[00:23:44] Speaker 03:
You know this is precedent on point it's not commission president but sale lj president.

[00:23:49] Speaker 03:
And finally, the commission on their brief said, well, you know, this is different because there are a lot of allegations.

[00:23:57] Speaker 03:
We've got hundreds of pages.

[00:23:59] Speaker 03:
There's always verbiage in there.

[00:24:00] Speaker 03:
But our view is that verbiage is, time and time again, dependent on a claim of breach of contract.

[00:24:07] Speaker 03:
And that's the analysis.

[00:24:08] Speaker 07:
What does it mean?

[00:24:10] Speaker 07:
Hargo 1 says this in the anchor shipping decision by the commission.

[00:24:17] Speaker 07:
Right.

[00:24:18] Speaker 07:
says that we read Cargo 1, you boil it down, is we try to determine whether there are elements peculiar to the shipping.

[00:24:30] Speaker 07:
That's how you know when the commission has jurisdiction, even if there's also breach of contract elements, too.

[00:24:42] Speaker 07:
What do you think, how do we know that when we see it, an element peculiar to the shipping end?

[00:24:49] Speaker 03:
I think, so there clearly has to be something more than breach of contract for the commission to have jurisdiction.

[00:24:57] Speaker 03:
I think that's what they're saying here.

[00:24:58] Speaker 03:
I think how we know it when we see it, you know, is there a test?

[00:25:02] Speaker 03:
I think really in our view, are those peculiar elements premised on a breach of contract?

[00:25:09] Speaker 03:
Would they require the commission to decide a breach of contract claim that's been taken out of their jurisdiction by the act?

[00:25:16] Speaker 03:
And I think that's how you know it.

[00:25:18] Speaker 03:
And I think the premised upon language in Cargo 1, I mean, we keep hanging our hat on that.

[00:25:23] Speaker 03:
And I think it's because it fits in well with this test.

[00:25:27] Speaker 03:
Are the claims, even if they allege these peculiar elements, are those peculiar elements depended upon, premised upon showing a breach of contract?

[00:25:37] Speaker 05:
And if that's the case.

[00:25:39] Speaker 05:
In Cargo 1, they also say, I'm sorry.

[00:25:42] Speaker 07:
Well, I just wanted to ask one follow-up.

[00:25:44] Speaker 07:
Yeah, go ahead.

[00:25:46] Speaker 07:
So you just heard us, you know, observed us hearing an employment case.

[00:25:53] Speaker 07:
Yes.

[00:25:54] Speaker 07:
But just to use that as an analogy as to why I'm just trying to help you understand why I'm having a little problem with your test.

[00:26:04] Speaker 07:
So let's suppose you have an employee and there's an employment contract that says, you know,

[00:26:14] Speaker 07:
Your job duties are to perform these 10 tasks.

[00:26:20] Speaker 07:
And then we'll pay you x dollars a year in salary.

[00:26:27] Speaker 07:
And even though the employee performs all 10 of those tasks, he's fired.

[00:26:34] Speaker 07:
But he also says, I was fired because of race or disability or some other protected activity.

[00:26:43] Speaker 07:
And there's a Title VII or ADA or some other sort of claim.

[00:26:50] Speaker 07:
To prove the discrimination, you're still going to prove the breach of contract, so to speak, in that you said that if I do these 10 things, then I'm a perfectly fine employee.

[00:27:06] Speaker 07:
And I have evidence that I did those 10 things.

[00:27:09] Speaker 07:
But nonetheless, you fired me.

[00:27:13] Speaker 07:
It can't be the case that just because we would look at that and say, well, there's a contract there and prove the breach of contract.

[00:27:24] Speaker 07:
There's nothing really more there.

[00:27:27] Speaker 07:
There's no discrimination case there.

[00:27:30] Speaker 07:
I mean, there can be both based on the contract and the facts.

[00:27:36] Speaker 07:
And so I guess that's why I'm just having problems trying to figure out what

[00:27:43] Speaker 07:
cargo one and anchor shipping means in saying that there's an element peculiar to the Shipping Act.

[00:27:56] Speaker 07:
And you say that the way that we are to find that is just, well, in order to prove the Shipping Act violation, they can't also

[00:28:12] Speaker 07:
rely on the fact that what was done violates the contract.

[00:28:18] Speaker 07:
That's your bottom line.

[00:28:21] Speaker 03:
I don't think exactly your honor, because I think I understand your point, and it's a good one.

[00:28:27] Speaker 03:
It is true, and I think Judge Pillard said this as well, that the facts that underlie the breach of contract might also be facts relevant to a discrimination claim.

[00:28:38] Speaker 03:
But the question is, do you actually have to find a breach of contract

[00:28:43] Speaker 03:
So for example, you could hold in your example, I think Judge Wilkins, that based on these facts, based on these facts, it makes discrimination, makes out a discrimination claim.

[00:28:58] Speaker 03:
But those facts can be considered, but you don't have to find a breach of contract.

[00:29:03] Speaker 03:
You can find a breach of contract, but you don't have to find a breach of contract in that case because it's a separate

[00:29:11] Speaker 03:
It's a separate case.

[00:29:12] Speaker 07:
In this particular case, even in my hypothetical, wouldn't it be logical for the court to say, well, it seems to be evidence of discrimination that they're not even abiding by their conscience?

[00:29:28] Speaker 07:
Exactly.

[00:29:29] Speaker 05:
That's what we do in the NLRA all the time.

[00:29:32] Speaker 05:
Yeah.

[00:29:33] Speaker 05:
It's common.

[00:29:34] Speaker 05:
And I wanted to add to my colleagues, I'd like to add this so you can

[00:29:38] Speaker 05:
Leave it into your answer in Cargo 1.

[00:29:41] Speaker 05:
Keep reading past the pages we've been focusing on.

[00:29:44] Speaker 05:
It says, on the other hand, we find the alleged violation involving unfair or unjustly discriminatory practices, undue or unreasonable preferences, undue or unreasonable prejudice or disadvantage, and just and reasonable regulations and practices are inherently related to the shipping app prohibitions

[00:30:05] Speaker 05:
and therefore appropriately brought before the commission.

[00:30:08] Speaker 05:
There's no question about what the commission was saying in cargo one.

[00:30:13] Speaker 05:
There are situations like the ones that they list specifically that clearly would involve the commission looking to see whether something is amiss in the way you were dealing with stuff under the contract to make the statutory determination.

[00:30:28] Speaker 05:
And they made it very clear they were retaining jurisdiction over it.

[00:30:32] Speaker 03:
They did distinguish those, but as I will say, if you look at the order, the order did, in fact, send it back to say, nonetheless, you can still have some circumstances.

[00:30:41] Speaker 01:
Send it back for the commission to consider those.

[00:30:43] Speaker 03:
Send it back for the ALJ to consider under that standard.

[00:30:46] Speaker 01:
Right, which was the commission sending it back to the ALJ.

[00:30:49] Speaker 01:
So the implication of that is I take that to be opposite from the implication you're drawing, which is

[00:30:54] Speaker 01:
that they looked at they looked at those and said the fact that there may be a contract element or facts you know embedded in that doesn't take it out from under our jurisdiction.

[00:31:05] Speaker 05:
They are inherently related to the shipping acts prohibition and are therefore appropriately brought before the commission that's their whole

[00:31:15] Speaker 03:
Well, again, the order was the order was a little bit different, but I take your point.

[00:31:20] Speaker 01:
I sort of a question from the other side is about cargo one so your premises that cargo one is what we're applying your question.

[00:31:31] Speaker 03:
Yeah, our premise is that they don't match cargo one.

[00:31:36] Speaker 03:
It's true that particularly in the world we're living in now that this court doesn't necessarily have to accept cargo one.

[00:31:43] Speaker 03:
But again, we think if you read the premised upon a contract breach language in cargo one properly, this case falls well within.

[00:31:53] Speaker 01:
So a question that I have about cargo one is, I take it that under your interpretation of the commission's jurisdiction,

[00:32:01] Speaker 01:
there are no claims that arise under A2A, 41104A2A, which is a provision that renders, basically renders contract claims, statutory violations.

[00:32:19] Speaker 01:
In your view, nothing under that provision is within the commission's.

[00:32:24] Speaker 01:
Oh, no, that's not true.

[00:32:25] Speaker 03:
No, that's not true at all.

[00:32:27] Speaker 03:
Because when they talk about, so that's failure

[00:32:29] Speaker 03:
So the sec the section is failure to comply with a Agreement on file with Commission.

[00:32:36] Speaker 03:
So for example that would cover unfiled agreements and that's really kind of would cover Under file so in other words not filed

[00:32:45] Speaker 03:
right if it's not filed so that so that there'd be that whole series of cases and that provision really goes back to it's sort of an anti rebating you know anti-rate discrimination provision remember this all started when almost all carriage was under tariff and even service contracts before the

[00:33:06] Speaker 03:
Act was amended in 98.

[00:33:08] Speaker 03:
That's the point of our merits based on count three You know service contracts had to be filed and you had to offer the terms every so it was a very much a tariff based non-discriminatory rate system So to a really a lot of the work that to a does is to prevent that non-discriminatory Carriage in there what the Commission is saying in cargo one though is yes.

[00:33:29] Speaker 03:
There's that whole category of cases but when the claim is

[00:33:34] Speaker 03:
when the claim of a 2A violation is you did not comply with the terms of a contract that was filed with us, that becomes linguistically and logically almost indistinguishable from you breached your contract.

[00:33:52] Speaker 03:
You did not comply with a filed service contract.

[00:33:55] Speaker 03:
You breached the service contract.

[00:33:57] Speaker 03:
The overlap is, and I think that's what the commission is saying.

[00:33:59] Speaker 05:
In light of the language I just read to you that the commission states,

[00:34:03] Speaker 05:
talking about unfair unjustly discriminatory practices, undue or unreasonable preferences, undue or unreasonable prejudice or disadvantage, these are all emanating from the enforcement of

[00:34:16] Speaker 05:
the shipping of the contract.

[00:34:19] Speaker 05:
Nevertheless, the commission says it's within their authority.

[00:34:22] Speaker 05:
These are claims.

[00:34:24] Speaker 05:
I just read you that, and you nodded your head like, yeah, that's right.

[00:34:27] Speaker 03:
No, we've had that discussion.

[00:34:28] Speaker 03:
We're talking about a different provision, though.

[00:34:29] Speaker 03:
We're talking about 2A.

[00:34:31] Speaker 03:
We're talking about the unfiled agreements.

[00:34:33] Speaker 05:
And that's a distinction that the commission... We're talking about whether or not there are claims here.

[00:34:38] Speaker 05:
Please don't be impatient.

[00:34:39] Speaker 05:
We're the ones who have to decide.

[00:34:40] Speaker 05:
You can be annoyed all you want, or you can just stop the case if you want.

[00:34:44] Speaker 05:
Want to be heard?

[00:34:46] Speaker 05:
Well, then you got to hear our questions.

[00:34:48] Speaker 05:
You know, it's getting a little annoying because all these antics.

[00:34:53] Speaker 05:
We're talking about whether or not there are claims here.

[00:34:57] Speaker 05:
that should survive because they raised shipping act, alleged shipping act violations.

[00:35:02] Speaker 05:
That's what we're talking about, including the most recent one, including the ones I just read to you at the end of Cargo One, where the commission has answered what you're claiming and said you're wrong.

[00:35:12] Speaker 05:
These are claims that involve alleged shipping act violations and they're appropriately brought before the commission.

[00:35:21] Speaker ?:
Right.

[00:35:21] Speaker 03:
Yeah, I understand that.

[00:35:25] Speaker 03:
I thought we were talking about, though, A2, which in CARGO 1 itself, CARGO 1 itself had distinguished the A2 cases from the discrimination cases you're talking to.

[00:35:37] Speaker 03:
So again, I'm sorry, but I think it is a pretty clear distinction between those two.

[00:35:45] Speaker 03:
And I was trying to talk about A2.

[00:35:46] Speaker 01:
So I have a question just to shift gears a little bit about the discovery dispute.

[00:35:53] Speaker 01:
Am I right that there was a certain amount of discovery material that you produced voluntarily in the case?

[00:36:00] Speaker 03:
Yes.

[00:36:01] Speaker 01:
And you're not suggesting, are you, that that production violated Article 271?

[00:36:09] Speaker 03:
No, that's the whole distinction.

[00:36:10] Speaker 03:
The distinction is whether it's production compelled by an order or production that was done voluntarily.

[00:36:17] Speaker 03:
That was a distinction that we made very clearly.

[00:36:20] Speaker 03:
It's made in the Swiss legal opinions that were

[00:36:24] Speaker 01:
So in your view, would it allow you to sidestep the 271 jeopardy if you said, look, ALJ, I actually don't believe that you have authority or that I can respond to your order to compel.

[00:36:47] Speaker 01:
I don't want to get hung up in that for years, I will voluntarily provide this information.

[00:36:56] Speaker 01:
I'm asking you not to agree to that.

[00:36:58] Speaker 01:
I'm asking a hypothetical legal question to prove the coherence of your position.

[00:37:05] Speaker 01:
And the question is, could you either, before the ALJ entered this order, or

[00:37:14] Speaker 01:
saying, I resist that as a command, but as counsel, I will recommend that my client voluntarily comply.

[00:37:23] Speaker 01:
Is that something that in your view would nonetheless leave you in jeopardy of criminal prosecution under 271?

[00:37:30] Speaker 03:
That was our view, and that was the opinion that we got from our Swiss counsel.

[00:37:35] Speaker 01:
That you could not voluntarily

[00:37:38] Speaker 01:
agree to give it, basically under protest.

[00:37:41] Speaker 01:
Say, we are not doing this because the court, the ALJ has asked us to do this.

[00:37:49] Speaker 01:
We are doing this as a conciliatory effort to try to advance the resolution of this case.

[00:37:58] Speaker 03:
Yeah.

[00:38:04] Speaker 03:
We would only be doing it because of the, we would only be doing that because of the commission's order.

[00:38:11] Speaker 03:
And so I don't, I guess the answer to the question is, I don't know if that specific hypothetical was presented to our Swiss council.

[00:38:22] Speaker 03:
It was not something that they volunteered.

[00:38:26] Speaker 03:
I mean, they felt that they had, let's put it this way,

[00:38:34] Speaker 03:
I think that would raise a question because the only reason we would be doing that would be because of the compulsion of the order.

[00:38:41] Speaker 01:
The Swiss Council... That's really up to you and your client.

[00:38:49] Speaker 03:
I just don't know what the Swiss would say to that because it seems to me it would be so obvious that the only reason we were doing that was because of the compulsion of the order.

[00:39:01] Speaker 03:
I think it just raises the same question.

[00:39:06] Speaker 01:
And again, there was a way to solve.

[00:39:08] Speaker 01:
I hear you.

[00:39:09] Speaker 01:
I hear you.

[00:39:09] Speaker 01:
You sought advice, and you got advice, and you think this would, if you couldn't, it wouldn't materially change the facts on which that advice was premised to do what my hypothetical suggested.

[00:39:24] Speaker 01:
Have you, at any point in the record in this litigation, it may be there, but

[00:39:31] Speaker 01:
I don't have it at my fingertips.

[00:39:33] Speaker 01:
Have you identified the specific types of documents, categories of documents or information held in Switzerland that is

[00:39:46] Speaker 01:
particularly problematic in terms of, I mean, the Swiss law, the business secrecy laws are there for certain purposes, and obviously certain information is more sensitive against disclosure than other information.

[00:40:02] Speaker 01:
Can you give us some sense of what the information is that you think would really alert criminal

[00:40:10] Speaker 01:
authorities?

[00:40:10] Speaker 03:
Yeah, I think one thing that's very probably most clearly within it is financial information.

[00:40:16] Speaker 03:
So they sought financial information, a wide variety of financial information about the business, profit loss, that sort of thing.

[00:40:27] Speaker 01:
About your clients?

[00:40:27] Speaker 03:
Our clients, yes.

[00:40:29] Speaker 03:
And it's privately held business.

[00:40:30] Speaker 03:
It's kept very confidential.

[00:40:32] Speaker 03:
And I think as your honor's question suggests, the Swiss tend to be pretty

[00:40:39] Speaker 03:
And the Swiss tend to be pretty sensitive about financial information.

[00:40:45] Speaker 03:
We didn't think that information was particularly relevant.

[00:40:48] Speaker 03:
As a matter of fact, on the amended complaint, we actually removed a defense that was cited by the judge to say that that information should be turned over.

[00:40:57] Speaker 03:
But that information is held in Switzerland, closely guarded.

[00:41:02] Speaker 01:
And we think that... Which of the discovery requests is that responsive to?

[00:41:08] Speaker 03:
There was a discovery request where they at, which of the defenses you mean?

[00:41:13] Speaker 03:
Because the discovery request asked for the financial information.

[00:41:16] Speaker 01:
And that was... You're saying it's not financial information.

[00:41:18] Speaker 01:
Can you be a little bit more grander?

[00:41:20] Speaker 03:
It was profit and loss information I think was in there.

[00:41:24] Speaker 03:
I'd have to look back for the specifics.

[00:41:27] Speaker 03:
I've just thought about it.

[00:41:28] Speaker 01:
The whole, all Mediterranean's profit and loss?

[00:41:30] Speaker 03:
Yes, yeah, that's right.

[00:41:32] Speaker 03:
Yeah, they're profit and loss for the whole year.

[00:41:34] Speaker 03:
And the whole world for the whole year.

[00:41:37] Speaker 03:
Correct.

[00:41:37] Speaker 03:
Correct.

[00:41:38] Speaker 03:
And that's all held in Switzerland.

[00:41:40] Speaker 03:
That's very closely guarded.

[00:41:41] Speaker 03:
It's a privately held company.

[00:41:44] Speaker 03:
You can't find that information anywhere.

[00:41:47] Speaker 01:
And what was your understanding of what the ALJ thought that was?

[00:41:51] Speaker 01:
legally relevant to?

[00:41:53] Speaker 03:
So the argument was made by our litigation opponent that that was relevant to force majeure.

[00:42:01] Speaker 03:
And they never really explained, at least that I could tell, how it was relevant to that.

[00:42:06] Speaker 03:
But I suppose the argument was, if we were arguing force majeure, we were arguing we couldn't do something.

[00:42:12] Speaker 03:
And the fact that we made a lot of money would kind of show that we could do that.

[00:42:19] Speaker 03:
I mean, I guess that was the argument.

[00:42:22] Speaker 03:
It seemed like a little bit of a stretch.

[00:42:24] Speaker 03:
The judge at that point was,

[00:42:28] Speaker 03:
The judge at that point just basically said well, they say it's relevant first was sure I say it's relevant to force majeure She didn't really explain and all that so we when they filed the amendment complaint We took the force majeure out of the case to try to resolve that issue Because that's very very sensitive information.

[00:42:46] Speaker 01:
I have what I think is an easy question for you that I

[00:42:51] Speaker 01:
There's this back and forth in the briefing about the Hague Convention versus the intergovernmental consultation process under the statute.

[00:43:01] Speaker 01:
You don't dispute that the Hague Convention is an acceptable substitute for the statutory integration.

[00:43:06] Speaker 03:
Absolutely.

[00:43:06] Speaker 03:
That was our argument all along.

[00:43:08] Speaker 01:
Right.

[00:43:08] Speaker 01:
Well, you appear to suddenly argue that the statutory process is obligatory.

[00:43:13] Speaker 01:
And you have, as you said, argued all along that the Hague Convention process.

[00:43:17] Speaker 03:
Right.

[00:43:17] Speaker 03:
That would be a substitute for it, yes.

[00:43:20] Speaker 01:
Did you seek at any time to appeal the Geneva court's determination?

[00:43:26] Speaker 01:
Is there an appeal available from that?

[00:43:28] Speaker 03:
We were told that it was not because it didn't really order us to do anything.

[00:43:33] Speaker 03:
In other words, there was no compulsion from the Geneva court's ruling.

[00:43:39] Speaker 03:
It didn't order us to turn over any documents.

[00:43:41] Speaker 03:
It just said Hague was not available.

[00:43:43] Speaker 01:
But again, it denied you the relief you wanted, which is to say that, I mean, so under Swiss law, that's not an appealable order?

[00:43:51] Speaker 03:
That was, again, that was the advice we got from Swiss Council that the best way to handle it would be to fix it with the, and I'm trying not to use fix it in the sense, you know, the administrative law judge kind of thought we went around the court and all, but basically to have the problem resolved by the federal office of justice and the Swiss minister of justice.

[00:44:12] Speaker 03:
And ultimately we were successful in doing that.

[00:44:15] Speaker 03:
It's just at that point, it was too late and the administrative law judge had moved on and decided that she didn't want to spend anymore.

[00:44:21] Speaker 03:
or time on the Hague Convention.

[00:44:23] Speaker 01:
So your position is not that it's not appealable, but that the strategy decision recommended by Swiss Council was that you'd be better off going to the executive.

[00:44:36] Speaker 03:
No, I'm sorry if I suggested that.

[00:44:38] Speaker 03:
I didn't mean to.

[00:44:39] Speaker 03:
The suggestion we had from them was that it wasn't, in fact, appealable because they had not ordered us to do anything.

[00:44:45] Speaker 03:
The trial court, the Court of First Hits, had not ordered us to do anything.

[00:44:49] Speaker 03:
They had just said these provisions were on avail.

[00:44:53] Speaker 03:
And so they're, and again, going back to it, the Swiss Council had said that really this request should have been directed to the

[00:45:04] Speaker 03:
to the Federal Office of Justice to start with.

[00:45:08] Speaker 03:
And that basically if we had done that, if that had been done to start with, we wouldn't have had this erroneous answer.

[00:45:14] Speaker 03:
And so the better thing to do was to do that.

[00:45:18] Speaker 03:
But I do think there was, and I don't think, I'm being a little cautious because I don't think this was stated in written advice from them, but my understanding was that

[00:45:30] Speaker 03:
This was a preferred course of action, not only because it would work, which in fact it did, ultimately did, but that because there was a question about appeal ability of the ruling.

[00:45:41] Speaker 03:
And then also appeal ability of the ruling, again, would have taken, you know, appeals take time.

[00:45:47] Speaker 03:
And Swiss Council said this could be resolved quite quickly if we went back to the Federal Office of Justice, which we did.

[00:45:54] Speaker 03:
So.

[00:45:56] Speaker 01:
I just have a couple more questions.

[00:45:58] Speaker 01:
You argue that the default judgment was abusive discretion.

[00:46:04] Speaker 01:
And I guess I'm curious more particularly where you thought the ALJ crossed over from making rulings that you disagree with to abusing

[00:46:16] Speaker 01:
Sure.

[00:46:16] Speaker 01:
For discretion.

[00:46:17] Speaker 03:
Well, two things.

[00:46:18] Speaker 03:
Well, first of all, in addition to abusive discretion, we thought it was a legal error because the consultations which were statutorily required weren't conducted properly.

[00:46:28] Speaker 03:
And that both sides agreed after the Swiss trial court came back, both sides agreed that consultation should go forward.

[00:46:37] Speaker 03:
It was the judge herself, Sue Espante, who decided that she wasn't going

[00:46:42] Speaker 03:
So I think that itself was, I mean, a legal error or an abuse of discretion.

[00:46:47] Speaker 03:
It's kind of the same thing.

[00:46:49] Speaker 03:
But then I think also it was an abusive discretion because there really wasn't any effort to look at the discovery we'd provide and how that related to the case issues in the case.

[00:47:00] Speaker 03:
There was a listing of the information we didn't provide, which of course included, for example, this financial information, which was we thought no longer relevant because we'd removed the defense that required that to be provided.

[00:47:11] Speaker 01:
Was there no other information in that list that you thought was relevant?

[00:47:16] Speaker 03:
I'm sorry.

[00:47:16] Speaker 01:
You've argued that you didn't think any of the information.

[00:47:18] Speaker 01:
Well, that's why we oppose the motion.

[00:47:20] Speaker 03:
Well, that's why we oppose the motion to compel.

[00:47:22] Speaker 03:
Yeah.

[00:47:22] Speaker 01:
And was all of it information that would violate secrecy law?

[00:47:26] Speaker 01:
Or is it just more the procedural thing that you have to get Swiss authorities on board if any of the information, even if it's your own information, is divulged?

[00:47:36] Speaker 03:
The act of production.

[00:47:39] Speaker 03:
The act of production ordering that production from Switzerland would be considered a violation of Swiss law under the advice that we got.

[00:47:48] Speaker 03:
Yes, because we'd be.

[00:47:49] Speaker 01:
So the ALJ abused her discretion in not going a second time through a Hague Convention request.

[00:47:56] Speaker 01:
What if the second one was denied?

[00:47:59] Speaker 01:
Would she abuse her discretion in not going through a third time?

[00:48:03] Speaker 03:
Well,

[00:48:06] Speaker 03:
I mean, I think there would be, I can understand that.

[00:48:11] Speaker 03:
I think our point is, if in fact it had been denied, there was, there do need to be, there does need to be some process, I guess, if it had been, I guess it would depend on the grounds in which it was denied.

[00:48:23] Speaker 03:
because if it were denied on the grounds, and this was an error that the commission made, by the way, in discussing what had happened in Switzerland.

[00:48:32] Speaker 03:
If it had been denied on the grounds that it was unnecessary and that it was okay for us to produce the documents, then of course we would have produced the documents, wouldn't have had to go through it again.

[00:48:42] Speaker 03:
One of the problems we had here is when that request was denied,

[00:48:51] Speaker 03:
commission said well because the request was denied that means further consultations are unnecessary and that's not that wasn't the case at all because the request was denied it meant we didn't have the protections we needed under 271 and therefore some other

[00:49:07] Speaker 03:
some other means of consultation was required, and the other side agreed on that.

[00:49:14] Speaker 03:
So I think that was just an error by the commission.

[00:49:16] Speaker 03:
Again, I don't know if they call it an error of law, abuse of discretion.

[00:49:18] Speaker 03:
But they basically held that, well, we had no reason left to withhold that information because they held that the consultations were unnecessary.

[00:49:29] Speaker 03:
That's not at all the case.

[00:49:30] Speaker 03:
They said the Hague, to go back to your example about how the

[00:49:36] Speaker 03:
We consider the Hague to be a substitute for consultation.

[00:49:39] Speaker 03:
If Hague had been a substitute for consultation, that would have been fine.

[00:49:42] Speaker 03:
We could have gone ahead.

[00:49:44] Speaker 03:
Once Hague was not a substitute for consultation, then we had to, once Hague was not a substitute for consultation, then we had to have some other basis for it.

[00:49:55] Speaker 03:
So, and actually the way you know the commission was wrong, that the consultations were not unnecessary.

[00:50:01] Speaker 03:
We went back, our Swiss Council went back, and in addition to asking for the Hague procedures, they said, can we get a waiver?

[00:50:08] Speaker 03:
Can we get a waiver of 271?

[00:50:09] Speaker 03:
And they said no, because Hague's availed.

[00:50:13] Speaker 01:
So basically it's your view that, and this is a little bit more nuanced than what I gleaned from your brief you're saying, that had

[00:50:22] Speaker 01:
the Geneva court ruled not that the commission, the administrative proceeding is not covered by Hague, which is what it did find, but that you don't need it.

[00:50:34] Speaker 04:
Right.

[00:50:35] Speaker 01:
and that that would match up better with the potential exposure under 271.

[00:50:40] Speaker 04:
Sure.

[00:50:40] Speaker 01:
And that's why you're now arguing about the statutory consultation requirement, because you're pointing that the Geneva court's order is sort of neither here nor there as it can't fulfill the consultation requirements.

[00:50:54] Speaker 01:
Correct.

[00:50:54] Speaker 01:
It didn't give you a yes or no answer on the question.

[00:50:57] Speaker 01:
Correct.

[00:50:57] Speaker 01:
that the statute is anticipating be answered.

[00:51:01] Speaker 01:
I think that answers my next, my final question to you right now, which is how do we decide when an ALJ or a district court judge has to disregard a ruling of a foreign court based on contrary legal conclusions from that country's executive branch or private legal experts?

[00:51:21] Speaker 01:
Like how do we

[00:51:23] Speaker 01:
sitting here in Washington DC and not having Swiss lawyers at our elbow, figure that out.

[00:51:30] Speaker 03:
I guess we have two answers to that question.

[00:51:32] Speaker 03:
First of all, I don't think you have to in this case, because I think in this case, nobody had to decide.

[00:51:40] Speaker 03:
Nobody had to decide who was right.

[00:51:44] Speaker 03:
We had a situation where we felt we needed the protections of the Hague procedures.

[00:51:50] Speaker 03:
The Swiss Minister of Justice, which is about as high as you can go in the Swiss government, said that those procedures were available.

[00:51:57] Speaker 03:
And so had the ALJ simply accepted that, we could have gone forward.

[00:52:05] Speaker 03:
I guess the second question is, and I think we made this point as well, that one of the points of the consultation procedures is if you go government to government, the Swiss government can decide that, not an ALJ or the DC Circuit or any of these other people.

[00:52:21] Speaker 03:
The point of consultations is you let the Swiss decide the Swiss issues rather than having an ALJ decide the Swiss issues.

[00:52:29] Speaker 07:
You never went.

[00:52:30] Speaker 07:
But I thought that ultimately the ALJ made a finding that the commission, you know, affirmed or adopted that there wasn't really

[00:52:43] Speaker 07:
a reasonable fear of criminal prosecution for violation of Article 271 because the evidence that the ALJ had before it from the opinions of your Swiss counsel, et cetera,

[00:53:07] Speaker 07:
The instances where there had been criminal prosecution weren't anything close to these sorts of disclosures.

[00:53:20] Speaker 07:
It was disclosing information to prosecutors and not parties to a case, et cetera.

[00:53:27] Speaker 07:
And so the ALJ found.

[00:53:31] Speaker 07:
that you hadn't really demonstrated a real fear of criminal prosecution, and the commission adopted that finding.

[00:53:41] Speaker 07:
So it kind of makes all of this discussion about consultations and Hague, et cetera, irrelevant in their view.

[00:53:53] Speaker 07:
Isn't that the record that we have?

[00:53:55] Speaker 07:
And if that is the record, then where is the abuse of discretion on that?

[00:54:00] Speaker 03:
Two answers, I guess, to that.

[00:54:02] Speaker 03:
First of all, the ALJ did purport to read it was, I guess, the EFG case, the Southern District of New York case, as saying, well, this is all unnecessary because this EFG case says it's unnecessary.

[00:54:16] Speaker 03:
The commission did not adopt that ruling, didn't discuss any of it.

[00:54:19] Speaker 03:
The commission said that the procedures of Hague were unnecessary because of the Geneva Court's ruling, not because of the reasoning that the ALJ had about reading the Southern District.

[00:54:30] Speaker 03:
So I think, first of all, it's just incorrect that the commission adopted that ruling.

[00:54:35] Speaker 03:
Second, we had evidence in the record from Swiss Council.

[00:54:39] Speaker 03:
They specifically discussed the EFG case.

[00:54:41] Speaker 03:
They specifically discussed that.

[00:54:43] Speaker 03:
They discussed why that was not the proper reading of Swiss law.

[00:54:47] Speaker 03:
And that's, I think, JA 150, I think maybe is where we have that.

[00:54:51] Speaker 03:
I tried it.

[00:54:52] Speaker 03:
Or 250, whatever it is.

[00:54:54] Speaker 07:
Going back to Billard's question, the ALJ

[00:55:00] Speaker 07:
disagreed with that, obviously.

[00:55:02] Speaker 07:
How are we supposed to review whether the ALJ used their discretion by disagreeing with what the advice or recommendation was?

[00:55:19] Speaker 07:
Right.

[00:55:20] Speaker 01:
Or can I jump in and just file on to that?

[00:55:24] Speaker 01:
I actually think it's a little bit harder for you because it's not disagreeing with what they've said, but it doesn't meet your burden.

[00:55:32] Speaker 01:
to show that you can't comply because of that exposure, which is a slightly different question.

[00:55:39] Speaker 01:
You have to persuade that you can't comply.

[00:55:41] Speaker 01:
And even if ultimately your counsel might be right, she wasn't persuaded.

[00:55:48] Speaker 01:
She didn't feel like she had enough.

[00:55:50] Speaker 03:
Right.

[00:55:51] Speaker 03:
And I think the answer to both those questions, I hope it's the same answer to both, is that

[00:55:59] Speaker 03:
The commit is that the whole point of the consultation requirement is that she isn't in that position of deciding Swiss law and having to decide it.

[00:56:08] Speaker 03:
You weren't in the position of having to review her Swiss law determination that you go to the Swiss for.

[00:56:16] Speaker 03:
You either go through the Hague procedures, which ultimately would have been successful, we found out when we went to the right office.

[00:56:24] Speaker 03:
But that if you would not accept that, you have a government to government consultation.

[00:56:29] Speaker 03:
And you go to the Swiss government, and the Swiss government decides what that's going to be.

[00:56:33] Speaker 03:
I think the whole problem we have here, I think all of the problems you're raising go away if you follow the consultation procedures.

[00:56:42] Speaker 01:
Because this actually really

[00:56:45] Speaker 01:
Just as a practical matter, I've never done a case before reviewing this commission and under this statute.

[00:56:52] Speaker 01:
But it sounds like what you're saying is that every time any Swiss person or entity is involved in civil litigation in, let's just say, the United States, because I know our discovery regime is distinctive compared to, let's say, civil law countries, any time discovery is

[00:57:14] Speaker 01:
sought that you have to do Hague Convention or Letters Rogatory or some government to government diplomatic process in order for that case to move forward to summary judgment.

[00:57:30] Speaker 01:
Is that true?

[00:57:31] Speaker 01:
And if so, why are there not a lot of citations?

[00:57:34] Speaker 03:
Okay, two answers I guess to that question.

[00:57:36] Speaker 03:
First of all, that was the that was the question that was presented in the 1987 Supreme Court case I think was there.

[00:57:44] Speaker 03:
Yeah, yeah, society or especially all whatever it is like some long foreign name, but in any event,

[00:57:49] Speaker 03:
And I think the Supreme Court recognizing your concerns that we're not gonna say it's required in every case.

[00:57:56] Speaker 03:
We are gonna say there's a comedy analysis that has to be done.

[00:58:00] Speaker 03:
They had a five factor comedy analysis and that five factor comedy analysis is gonna have to be done.

[00:58:06] Speaker 03:
And that I think is what, and nothing like that was done in this case.

[00:58:11] Speaker 03:
So yes, certainly there is some power in the federal court.

[00:58:15] Speaker 03:
They don't have to be bound by all of this.

[00:58:17] Speaker 03:
That's what the Supreme Court said.

[00:58:18] Speaker 03:
But they're supposed to at least give some kind of weight to it.

[00:58:21] Speaker 03:
Second, we're talking here about the Shipping Act, where there is a specific consultation requirement.

[00:58:28] Speaker 03:
And so that's the, that I think is the difference.

[00:58:33] Speaker 03:
In other words, I think the consultation requirement

[00:58:36] Speaker 03:
And I think the Shipping Act of 1984, which put this in, was passed, I think, before the 87 law.

[00:58:43] Speaker 03:
But I think the Shipping Act really decides that issue that the Supreme Court said, no, you don't have to use it in every case.

[00:58:49] Speaker 03:
Under the Shipping Act, you do have to use it when it's alleged.

[00:58:53] Speaker 03:
They basically decided that case the other way, statutorily.

[00:58:56] Speaker 03:
So Congress has made that decision.

[00:58:58] Speaker 03:
And I think it's because, you know, we have it, it's an international regime.

[00:59:02] Speaker 03:
There was, I mean, there's a long history to this too, because there was a lot of

[00:59:10] Speaker 03:
Yeah, there's a long history to this, too.

[00:59:11] Speaker 03:
There were blocking statutes that led to antitrust, criminal prosecutions led to all of it.

[00:59:16] Speaker 03:
But the answer is, under the Shipping Act regime, yes, that is the case.

[00:59:20] Speaker 03:
Now, maybe if there's frivolous allegations or something, but we felt we were far beyond frivolity here.

[00:59:24] Speaker 03:
We had this opinion of Swiss Council, very carefully done, and very carefully addressed what the ALJ ultimately cited and the commission did not adopt.

[00:59:37] Speaker 03:
Thank you.

[00:59:38] Speaker 03:
If I have anything else at this point.

[00:59:41] Speaker 03:
Very much appreciate the patience of the panel.

[00:59:43] Speaker 03:
Thank you.

[00:59:45] Speaker 01:
I will hear now from the

[01:00:06] Speaker 02:
talk about is that the commission did, in fact, rely on the district court cases that were just discussed, that the ALJ relied on in showing that Article 271 does not present a credible fear of criminal prosecution, where the sanction involved in the proceeding in the United States does not involve the potential for a criminal penalty, which was the case here, because it's administrative.

[01:00:31] Speaker 01:
I'm concerned that there might be prosecution in Switzerland.

[01:00:34] Speaker 02:
That's right.

[01:00:35] Speaker 02:
But the basis for the district court rulings that the ALJ identified and the commission also relied on was whether there was a potential for a criminal sanction in the United States or in the foreign nation.

[01:00:47] Speaker 02:
That's the way we read those cases.

[01:00:50] Speaker 02:
So I think that was something the commission also relied on.

[01:00:54] Speaker 02:
In addition to a lack of factual support for the claim, even though now

[01:01:02] Speaker 02:
we've heard about the documents in Switzerland, there's no specifically identified documents and materials responsive to the 14 categories of materials that the administrative law judge went through and identified where they had stopped producing or failed to produce any further materials.

[01:01:18] Speaker 02:
So the factual basis was not met here as well.

[01:01:23] Speaker 02:
And that, I think, is the doomsday claim, as it would under a Hague evidence convention claim.

[01:01:29] Speaker 02:
where the federal courts say you have to demonstrate a need for the use of these procedures rather than ordinary US civil discovery procedures.

[01:01:38] Speaker 02:
Here, they didn't make that showing.

[01:01:41] Speaker 01:
In fact... Well, I think they think they've made that showing in gross that there is no page of what they have in Switzerland.

[01:01:51] Speaker 01:
Actually, I don't think it even matters whether it's in Switzerland.

[01:01:53] Speaker 01:
It could be in the US.

[01:01:55] Speaker 01:
It could be in, you know, who knows where, next door.

[01:01:59] Speaker 01:
And I think their position is once a

[01:02:02] Speaker 01:
governmentally empowered forum says you must produce that they are in criminal jeopardy under 271 of Swiss law because Swiss sovereigns are the only ones who can say that another sovereign can transfer information.

[01:02:23] Speaker 01:
So I think they don't think it matters what information they are withholding.

[01:02:28] Speaker 02:
That may be correct.

[01:02:30] Speaker 02:
Our understanding of 271 is that it applies to things produced from Switzerland or in any event from outside the United States.

[01:02:38] Speaker 02:
In this case, Mediterranean, the largest container shipping company in the world, has a massive US presence.

[01:02:45] Speaker 02:
They have more than 1,000 employees here.

[01:02:47] Speaker 02:
They have a number of ports and offices.

[01:02:50] Speaker 02:
And it's important to remember as well, the activity at issue was shipments from China to the west coast of the United States.

[01:02:58] Speaker 02:
So it's true that, as I think, Judge Pollard, you were referring to, why isn't this a bigger, if this was really necessary, why isn't this a bigger thing?

[01:03:08] Speaker 02:
I mean, the Shipping Act of 1984 has been in place for more than 40 years, and yet there has been virtually none of this until the last couple of years.

[01:03:16] Speaker 02:
No claims like this that I'm aware of.

[01:03:19] Speaker 02:
Instead, parties like Mediterranean and other major carriers have been able to comply with their discovery requirements

[01:03:26] Speaker 02:
without the use of these procedures, at least relevant to US-bound or US-related ocean-bound shipping.

[01:03:35] Speaker 05:
Can you answer?

[01:03:37] Speaker 05:
Did you get what you wanted?

[01:03:40] Speaker 05:
I have four things I'd like to raise with you, if I can.

[01:03:45] Speaker 05:
I'd like to know whether, with respect to each one of these four things,

[01:03:51] Speaker 05:
They constituted the basis of the complaint under the act that was being pursued by the commission in this case.

[01:04:01] Speaker 05:
First is unfair or unjustly discriminatory practices.

[01:04:07] Speaker 05:
The second is undue or unreasonable preferences.

[01:04:12] Speaker 05:
The third is undue or unreasonable prejudice or disadvantage.

[01:04:17] Speaker 05:
than unjust and unreasonable regulation and practices.

[01:04:21] Speaker 05:
Can you go through each one and tell me whether it is your understanding that with respect to each one of those, those form the basis for the complaint in this case under the Shipping Act?

[01:04:34] Speaker 05:
And if so, what section of the Act are we talking about?

[01:04:38] Speaker 05:
First one was unfair or unjustly discriminatory practices.

[01:04:45] Speaker 02:
Yes, Your Honor, I believe

[01:04:47] Speaker 02:
Those were all part of the claims that MCS, the complainant, the administrative case, made.

[01:04:52] Speaker 02:
And I believe you may be talking about Section 4104A5 and 4104A9, because I believe, although I may have missed some of the phrases you had, I believe those include the language that you cited.

[01:05:10] Speaker 02:
I think those were two of the five claims that MCS made in the underlying matter.

[01:05:16] Speaker 02:
And so yes, I think those were at issue.

[01:05:19] Speaker 02:
I also think it's important to note here, maybe, if I can, that it would only be necessary to sustain jurisdiction and claim sufficiency as one of the five claims in order to sustain the decision.

[01:05:32] Speaker 05:
I understand.

[01:05:32] Speaker 05:
Given the long argument that we heard previously, I thought this was pretty straightforward.

[01:05:38] Speaker 05:
And I'd like to make it clear now, at least for the record, that these are matters that were clearly parts of the charges that were brought

[01:05:47] Speaker 05:
under the Shipping Act.

[01:05:50] Speaker 05:
And I just wanted to hear your position on it since there's been some discussion.

[01:05:54] Speaker 05:
These are, as you may recognize, precisely the matters that the commission cited in Cargo 1 in saying that these are matters that arise under the Shipping Act and clearly within the jurisdiction.

[01:06:07] Speaker 05:
And so if we have those claims here, we clearly have jurisdiction.

[01:06:12] Speaker 02:
We think so, Your Honor.

[01:06:13] Speaker 02:
That's right.

[01:06:14] Speaker 02:
for many other reasons as well, because there are the other claims.

[01:06:18] Speaker 02:
And some elements of those claims depend on, in fact, explicitly relate to performance of service contracts.

[01:06:25] Speaker 02:
So it should be no surprise that there is an intertwining, as I believe Anchor Shipping put it, or an overlap with contract-related claims.

[01:06:33] Speaker 02:
Others, like 41102C, do not necessarily relate to a contract at all, but their broader

[01:06:42] Speaker 02:
about the just and reasonable handling of cargo.

[01:06:46] Speaker 02:
There, too, MCS made allegations, specific factual allegations that don't depend on a contract.

[01:06:52] Speaker 02:
They don't depend on a breach of contract.

[01:06:54] Speaker 02:
They went well beyond.

[01:06:56] Speaker 02:
And in fact, they didn't make a breach of contract claim, nor did they simply parrot elements of the Shipping Act.

[01:07:02] Speaker 02:
They made specific factual allegations about things, as Judge Wilkins pointed out, that are distinct from or peculiar to the Shipping Act.

[01:07:12] Speaker 07:
Well, like the searcher.

[01:07:14] Speaker 07:
Let me hear your response to the argument made by your friend on the other side, which is that, like, if you look at paragraphs 98 and 100 of the verified amended complaint,

[01:07:30] Speaker 07:
where they say there's this widespread practicing of coercing the payment of these surcharges and forcing people to obtain space on the spot market.

[01:07:44] Speaker 07:
They say that ultimately those are contractual claims because the basis of the claim is that rather than honoring the service contract, you're forcing us to use these other avenues.

[01:08:01] Speaker 07:
a inherently contractual claim under Cargo 1.

[01:08:06] Speaker 07:
Why isn't that right?

[01:08:08] Speaker 02:
I think it's not right, Your Honor, because the claim itself is, as I think you've noted, built on practices that go beyond.

[01:08:16] Speaker 02:
I mean, that's just not an element of a breach of contract claim, although those claims do vary by jurisdiction, and it would depend on an analysis.

[01:08:25] Speaker 02:
Is that the unreasonable preface and advantage?

[01:08:29] Speaker 02:
That could be, Your Honor.

[01:08:31] Speaker 02:
I think here.

[01:08:32] Speaker 05:
That's 10410489, so that's clearly within the statute.

[01:08:36] Speaker 05:
I mean, some of these things are clearly going to emanate from what did you do under the contract, and you could end up having practices that the commission has said in Cargo 1.

[01:08:51] Speaker 05:
or within its jurisdiction unfair and unjustly discriminatory practice.

[01:08:56] Speaker 05:
Well, that may start with what you failed to do under the contract.

[01:08:59] Speaker 05:
It doesn't make it inherently a contract claim.

[01:09:01] Speaker 05:
It makes it a shipping act claim.

[01:09:04] Speaker 05:
You failed to do what the shipping act said.

[01:09:08] Speaker 02:
Yes, Your Honor.

[01:09:08] Speaker 02:
I think that's just right.

[01:09:10] Speaker 02:
And as far as evaluating practices, those practices include relations that Mediterranean may have had with other shippers.

[01:09:18] Speaker 02:
And that's the basis for the discovery about

[01:09:21] Speaker 01:
Matters that go beyond the specific contracts and relationships involved here because under the statute that that's part of the analysis I have a question about sort of the practicalities and I guess what is effectively claims splitting If I thought I heard you say that it's only necessary to sustain jurisdiction with respect to one count to sustain the ALJ's restriction to hear the case and

[01:09:48] Speaker 01:
I read Fargo 1 otherwise, that it's looking claim by claim and saying, well, the claim under what is now the

[01:10:01] Speaker 01:
40502F.

[01:10:02] Speaker 01:
No, the claim that is under the provision that says breach of contract is a breach of the statute, that that can't be heard by the commission, even if it's packaged into a complaint with other claims that can.

[01:10:18] Speaker 01:
But I thought I heard you say otherwise.

[01:10:20] Speaker 01:
And the whole thing seems odd to me, because it seems like in many cases you'd have, therefore, two different proceedings.

[01:10:30] Speaker 02:
Your honor, I don't think we read it that way.

[01:10:32] Speaker 02:
I think in this case, there are five distinct claims, even though they may have some things in common, under the five distinct provisions of the relevant part of the act.

[01:10:43] Speaker 02:
And that's the four under section 41.104 and the one under section 41.104.

[01:10:49] Speaker 01:
And I think it's 41104A2A, which is alleging that Mediterranean provided service not in accordance with the service contracts.

[01:11:04] Speaker 01:
Congress is basically

[01:11:07] Speaker 01:
writing contract violations into the statute in that provision, and then cargo one comes along and seems to say, no, no, if it's in effect really just a contract claim, it's out.

[01:11:21] Speaker 01:
And then what's your position on a case that includes just we put this case aside because there's merits arguments about

[01:11:28] Speaker 01:
what is and isn't a valid claim.

[01:11:30] Speaker 01:
But if there are valid claims under the provisions that Judge Edwards is talking about, about unreasonable refusal to deal, let's say, or undue or unreasonable advantage apart from a breach of contract, those are under the commission's jurisdiction.

[01:11:45] Speaker 01:
I don't hear anybody, at least in general, to be disputing that.

[01:11:50] Speaker 01:
But do you dispute that a claim under 41-104A2A

[01:11:59] Speaker 01:
is exactly the current provision that the claim in cargo one that was held not to be under the commission's jurisdiction.

[01:12:08] Speaker 01:
Is the analog to that very claim?

[01:12:11] Speaker 02:
I do believe that is the basic claim that was

[01:12:15] Speaker 02:
being that one of the five claims, that is one that was being discussed.

[01:12:19] Speaker 01:
I thought what happened in Cargo One was they said, we can't hear that claim.

[01:12:22] Speaker 01:
And they remanded other claims.

[01:12:24] Speaker 01:
And I guess the question is, if that's right, why does the commission sustain the ALJ's decision that it could hear that claim?

[01:12:37] Speaker 01:
Now, it's purporting to apply Cargo One, but nonetheless saying, well, this is under the act.

[01:12:44] Speaker 02:
I think there is room to read it a little more broadly, Your Honor.

[01:12:48] Speaker 02:
I mean, what it says specifically is provide service in the line of trade that is not in accord with rates, charges, and so on in a service contract entered into under the chapter and filed with the commission.

[01:13:03] Speaker 02:
So I understand the idea that that reaches claims where the contract hasn't been properly filed.

[01:13:12] Speaker 02:
But I think there is room to read it

[01:13:14] Speaker 02:
more broadly, there may be some tension there with cargo one, but I think the idea was that this is basically at the motion to dismiss stage and it did seem potentially viable.

[01:13:29] Speaker 01:
I'm not following that.

[01:13:32] Speaker 02:
How is it different?

[01:13:37] Speaker 02:
Different in that it's not literally a breach of contract claim.

[01:13:41] Speaker 02:
It's providing service in the line of trade.

[01:13:43] Speaker 02:
It's not in accord with the contract.

[01:13:46] Speaker 02:
Granted, there's an enormous overlap there.

[01:13:50] Speaker 02:
But I think that was the basis for the commission to uphold that.

[01:13:54] Speaker 01:
So provide service in the line of trade is not in accordance with the terms of a service contract entered into under chapter

[01:14:06] Speaker 01:
And I think that is the exact provision that was at issue.

[01:14:12] Speaker 01:
The precursor of that provision was what was at issue in Cargo 1.

[01:14:19] Speaker 01:
And I didn't see, with respect to that, any engagement by the ALJ or the commission.

[01:14:25] Speaker 01:
It cites Cargo 1, but it doesn't engage with the reasoning of Cargo 1.

[01:14:34] Speaker 01:
that those kinds of claims are not under the jurisdiction.

[01:14:38] Speaker 02:
Your Honor, I think you're probably correct that there was not a substantial engagement with that issue.

[01:14:44] Speaker 01:
Or really, to be fair, any engagement with that issue?

[01:14:47] Speaker 02:
But I think, again, looking at all the claims, all five claims, in this case, if any of them are troubling, I do think that even one, such as 4102C, is sufficient to sustain the decision here.

[01:15:03] Speaker 07:
How is that?

[01:15:05] Speaker 07:
I'm sorry.

[01:15:07] Speaker 07:
How is that the case if the default judgment is entered as a sanction and the relief is based on all five counts?

[01:15:19] Speaker 07:
But what if the ALJ was wrong to find two of the counts within the jurisdiction of the commission?

[01:15:33] Speaker 07:
the relief or the remedy that the ALJ entered need to be set aside so that the ALJ could reconsider the relief based on the counts that are properly before it?

[01:15:51] Speaker 02:
Your Honor, I think that the basis for the default was conduct that would be properly sanctioned even if only one claim had been made.

[01:16:02] Speaker 02:
That's the basis for the basic decision for default.

[01:16:06] Speaker 02:
If you're referring to the reparations, I think that's appropriately upheld even based on one claim, because each of these claims is based, as I understand it, on the entire course of conduct alleged.

[01:16:18] Speaker 02:
So I'm not aware of a clean division where you could say, oh, well, claim one was only about

[01:16:27] Speaker 02:
one fifth of the activity in question.

[01:16:29] Speaker 02:
In fact, these are overlapping claims.

[01:16:32] Speaker 02:
And my understanding is, for example, account one related to the entire course of conduct alleged.

[01:16:39] Speaker 02:
So not only would it support entry of default, just that one, but also the reparations awarded, which go to the overall conduct complained of, the course of conduct.

[01:16:50] Speaker 02:
So I think that's why each of them encompasses the whole thing.

[01:16:54] Speaker 02:
And each would be sufficient

[01:16:56] Speaker 02:
to sustain the default because you can't engage in the kind of activity and really a lack of respect for the orders of an administrative law judge without some sort of consequence.

[01:17:11] Speaker 02:
And the agency here concluded after Mediterranean had been given at least three chances to comply that those orders had to mean something.

[01:17:23] Speaker 01:
So on my question about claim splitting,

[01:17:27] Speaker 01:
Do you disagree with the way Cargo One treated the contract claim, effectively contract claim under AQA and the discrimination or

[01:17:49] Speaker 01:
inconsistent treatment claims.

[01:17:52] Speaker 01:
When I read cargo one, what I take away from it is that the same plaintiff would have to go to a court with a contract claim and go to the commission with the statutory claims.

[01:18:04] Speaker 01:
Is that your understanding?

[01:18:06] Speaker 01:
Yes.

[01:18:06] Speaker 01:
Is that supposed to go?

[01:18:07] Speaker 02:
Yes, Your Honor.

[01:18:08] Speaker 02:
And I think that that does commonly happen.

[01:18:10] Speaker 02:
I believe it's happened in this case, or at least in arbitration.

[01:18:13] Speaker 02:
which is proceeding.

[01:18:14] Speaker 01:
And then is there offsetting of overlapping relief?

[01:18:16] Speaker 01:
You've also just asserted that the relief is 100% the same under all the different claims.

[01:18:22] Speaker 02:
Right.

[01:18:23] Speaker 01:
And therefore, whoever the arbitration yields relief, they're not going to get double.

[01:18:29] Speaker 02:
I think it would be appropriate for each proceeding to take account.

[01:18:32] Speaker 02:
I mean, if you're looking at contract damages or reparations under our statute, I do think it would be appropriate if the idea is to make a party whole,

[01:18:42] Speaker 02:
uh, compensatory, uh, compensatory approach.

[01:18:50] Speaker 02:
I do think it would be appropriate, whether for the commission or for some outside tribunal, to take account of the extent to which party may have already been made whole.

[01:18:59] Speaker 01:
And is there a claim preclusion?

[01:19:01] Speaker 01:
So if the plaintiff wins in

[01:19:08] Speaker 01:
Well, let's say if the plaintiff loses before the commission, does that prevent any arbitration from going forward?

[01:19:16] Speaker 02:
I would not think so, Your Honor, unless that's an interesting question.

[01:19:22] Speaker 01:
I guess I don't know.

[01:19:22] Speaker 01:
So the plaintiff effectively gets two bites at the same apple.

[01:19:24] Speaker 01:
The plaintiff loses an arbitration.

[01:19:27] Speaker 01:
Is that preclusive of the commission?

[01:19:29] Speaker 02:
I would doubt it, Your Honor.

[01:19:31] Speaker 01:
And I don't think it's not come up.

[01:19:33] Speaker 02:
I'm not aware of it.

[01:19:35] Speaker 02:
It's not the same apple, right?

[01:19:37] Speaker 02:
The breach of contract Apple is different from the Shipping Act statutory claim orange.

[01:19:45] Speaker 01:
Maybe or perhaps they argued that they're actually different packaging for the same the same.

[01:19:53] Speaker 01:
ball of wax, and that makes sense in civil procedure terms.

[01:19:56] Speaker 01:
You have one transaction recurrence.

[01:19:59] Speaker 01:
You can seek to recover for the harm you suffered from it under a contract theory.

[01:20:03] Speaker 01:
You can seek to recover for the harm you suffered as a result of this transaction occurrence under a undue discrimination theory or et cetera.

[01:20:14] Speaker 01:
But in the real world, the thing that happened and the thing that harmed you is one transaction or occurrence, which is why it surprises me.

[01:20:21] Speaker 01:
I mean, I'm not sure that if I were the commission, I would decide cargo one the way it was decided, in part for this reason.

[01:20:30] Speaker 02:
I think that there are distinct claims.

[01:20:33] Speaker 02:
And it may be that when you get to the damages stage, accounting would have to be made for what might have happened in another setting.

[01:20:44] Speaker 02:
But I don't think there'd be preclusive effect for distinct claims, one being.

[01:20:49] Speaker 01:
Typically, in the courts, there's preclusive effect.

[01:20:53] Speaker 01:
No matter how you name the claims.

[01:20:54] Speaker 01:
Not these claims.

[01:20:55] Speaker 01:
If you look at the underlying transaction or occurrence, could you?

[01:20:58] Speaker 01:
And then there are these issues of, well, could you have raised a claim in that form?

[01:21:02] Speaker 01:
And if you can't, then sometimes that's split up.

[01:21:04] Speaker 01:
But it's a very strange system to embrace.

[01:21:08] Speaker 01:
It tends not to be particularly functional or efficient.

[01:21:13] Speaker 02:
Um, your honor, I do think that there was that there is an approach or a test that's emerged from cargo one anchor shipping.

[01:21:23] Speaker 02:
Um, and I would direct the court's attention, especially to anchor shipping, because I do think that has a lot in common with this case is the LJ relied to a significant extent on the factual and legal similarities with anchor shipping, which is six years later than cargo one.

[01:21:41] Speaker 02:
But I do think that

[01:21:44] Speaker 02:
the analysis about whether claims have elements that are peculiar to the Shipping Act or distinct from reshift contract claims is the prevailing analysis and the one that the agency has applied.

[01:21:55] Speaker 02:
So that I think is the one that was applied here and that's appropriately applied.

[01:22:00] Speaker 01:
But was it appropriately applied here?

[01:22:03] Speaker 01:
Are there any complaints

[01:22:09] Speaker 01:
that are alleging a violation of the Act, citing a provision of the Act, that the Commission nonetheless cannot hear because they are inherently free to contract.

[01:22:21] Speaker 01:
As long as the Act is cited, I mean, that seemed to be the view of the Commission and the ALJ in this case.

[01:22:29] Speaker 02:
Your Honor, I don't think it was just cited.

[01:22:31] Speaker 02:
I think it was, of course,

[01:22:35] Speaker 02:
alleging a violation of a specific part of the act, citing that, not saying it's a breach of contract.

[01:22:42] Speaker 02:
And here are the elements of a breach of contract.

[01:22:43] Speaker 02:
So of course, starting with that.

[01:22:45] Speaker 02:
But what happened here, I think that where that line is may vary in different cases.

[01:22:51] Speaker 02:
But what happened here is the claimant went far beyond merely reciting and stopping.

[01:22:56] Speaker 02:
They made specific factual allegations about practices and activities that would not really be elements of

[01:23:04] Speaker 02:
breach of contract claim, as I understand it.

[01:23:06] Speaker 02:
They go beyond it.

[01:23:07] Speaker 02:
They're peculiar to the act, like coercing surcharges, like some of the other elements that Judge Wilkins read from that part of the complaint.

[01:23:16] Speaker 02:
So I think in this case, wherever that line is, and words like inherently perhaps are not as clear as they might be, but in this case, where there were specific allegations in MCS's complaint, which go beyond

[01:23:33] Speaker 02:
contract claims go beyond merely parroting elements of the act, I think it was appropriate to find jurisdiction for those claims.

[01:23:42] Speaker 01:
I'm just, again, circling back to count one, violation of 401104A2, the conduct constitutes provision of service not in accordance with

[01:23:58] Speaker 01:
the rules and practices contained in the respective service contract.

[01:24:03] Speaker 01:
Is that something other than you acted in a way not in, not consistent with the terms of the contract?

[01:24:13] Speaker 02:
I think it can be read as, as creating some space.

[01:24:18] Speaker 02:
I would read between a breach of contract claim again, which is very, I think dependent on a specific jurisdiction.

[01:24:27] Speaker 02:
So in the abstract, a breach of contract claim I think is analyzed somewhat differently in different jurisdictions.

[01:24:34] Speaker 02:
But I think there is potentially some room in that language.

[01:24:38] Speaker 02:
I mean, that's not just

[01:24:40] Speaker 02:
Contract law is very specific about what constitutes.

[01:24:43] Speaker 01:
I'm not following.

[01:24:44] Speaker 01:
I need maybe a concrete example.

[01:24:45] Speaker 01:
Because if you say to me, I'm going to sue this carrier for providing service not in accordance with the service contract I entered into with it, and that is a violation of 41104A2, that

[01:25:07] Speaker 01:
is as far as I can tell, and as I said, I'm no specialist in the Federal Maritime Commission statute or decisions, as far as I can tell, that is the same claim that the commission in cargo one said, no, no, that is excluded under subsection F of 40502.

[01:25:35] Speaker 02:
I think differently that I'm sorry.

[01:25:39] Speaker 01:
It was numbered differently at the time of cargo.

[01:25:41] Speaker 02:
That's right.

[01:25:42] Speaker 02:
There was a recodification.

[01:25:44] Speaker 02:
I believe it is essentially the same claim.

[01:25:48] Speaker 02:
And so I think in this case, there was a view that there was room for a claim based on the allegations in the case.

[01:26:01] Speaker 02:
But I would agree that there's a significant overlap there, obviously between

[01:26:06] Speaker 02:
that language and a breach of contract claim.

[01:26:09] Speaker 01:
Sorry, let me give you one chance to explain to me.

[01:26:14] Speaker 01:
I really don't want to just hassle you about it.

[01:26:18] Speaker 01:
But what is it about it that goes beyond just a contract claim?

[01:26:24] Speaker 01:
What is it about how that's stated?

[01:26:26] Speaker 02:
Well, I think service in the line of trade implies a broader course of conduct and simply breaching a contract in a sort of defined way.

[01:26:35] Speaker 02:
That's one basis.

[01:26:37] Speaker 02:
And so if your conduct is not consistent with the elements listed in the service contract, I think that's a potential distinction.

[01:26:53] Speaker 05:
Let me add on to this question to see whether or not you think this is an answer or not to my colleague.

[01:27:01] Speaker 05:
On page 36 in card 01, this is why I started with you.

[01:27:05] Speaker 05:
There's a whole lot of debate we've had today about the reach of cargo one, but this is the page where the commission is very clear in saying what is and is not covered by its decision and making it very clear where the commission has jurisdiction.

[01:27:22] Speaker 05:
Unfair or unjustly discriminatory practices, we've been around that.

[01:27:27] Speaker 05:
They say that's clearly an area here and that's part of what this complaint is about.

[01:27:32] Speaker 05:
Undo or unreasonable preferences, that's clearly been covered today.

[01:27:39] Speaker 05:
Undo or unreasonable prejudice or disadvantage, that's clearly been covered by what we've covered today.

[01:27:47] Speaker 05:
And then there's one, regulations and practices.

[01:27:54] Speaker 05:
What does a regulation and practice mean?

[01:27:56] Speaker 05:
Now, is that answering what Judge Pillard, because that's one of the things that commission says is covered.

[01:28:04] Speaker 02:
Your Honor, I think it is possible to interpret that as having a relationship or overlap with providing service.

[01:28:14] Speaker 02:
Providing service implies a more general.

[01:28:17] Speaker 05:
In other words, if we look to see, and you're just basically doing bad things all over the place, we can catch you this way too?

[01:28:23] Speaker 05:
I'm being serious.

[01:28:24] Speaker 05:
Is that what we're talking about?

[01:28:25] Speaker 02:
No.

[01:28:26] Speaker 02:
You just have a routine of bad things.

[01:28:29] Speaker 02:
We're only trying to enforce the law as written.

[01:28:32] Speaker 02:
not looking to find them.

[01:28:33] Speaker 05:
No, no, no, this is the commission's take on it.

[01:28:35] Speaker 05:
So I'm trying to get your understanding as to what they mean when they include, I'm sorry, it's not unreasonable prejudice and disadvantage, it's reasonable regulations and practice.

[01:28:50] Speaker 05:
That's the last category in this list.

[01:28:53] Speaker 05:
where they're saying, these are all things that are covered.

[01:28:55] Speaker 05:
And it's within our jurisdiction, reasonable regulations in the practice.

[01:29:00] Speaker 05:
Is there something there that doesn't work for you in answering what Judge Pillard is saying?

[01:29:06] Speaker 05:
Asking?

[01:29:07] Speaker 02:
I may not be completely following what you're saying.

[01:29:10] Speaker 05:
Can you look at the passage?

[01:29:11] Speaker 05:
Do you see Article 1?

[01:29:12] Speaker 02:
I don't actually have that case right with me, Your Honor.

[01:29:16] Speaker 02:
But I think

[01:29:17] Speaker 02:
That wasn't intended, I think, to be an exclusive list of things the commission has jurisdiction over.

[01:29:22] Speaker 05:
No, I know we're trying to at least get to a point where we agree on some things.

[01:29:27] Speaker 05:
So one thing we ought to be able to agree on is what emanates from this list.

[01:29:31] Speaker 05:
This is the commission's list in Cargo 1, which has been the subject of five hours of debate today.

[01:29:37] Speaker 05:
And they list five things here.

[01:29:39] Speaker 05:
All I want to know is what you think they meant, the last thing they list, and just and reasonable regulations and practices.

[01:29:48] Speaker 02:
I think that, Your Honor, that was likely a reference to 41102C, which talks about the need to have common carriers essentially must establish and observe just and reasonable regulations and practices.

[01:30:04] Speaker 02:
So I think it's a reference to what is currently, although perhaps not at the time of that decision, what is currently at 41102C.

[01:30:12] Speaker 02:
So I think there the commission was going through a lot of the same provisions at issue in this case.

[01:30:18] Speaker 02:
and saying, there certainly is jurisdiction for that claim, 41102C.

[01:30:23] Speaker 02:
And then you also have described language from 41104A, five, and nine.

[01:30:31] Speaker 02:
I think some of the other phrases you used were what is appropriate.

[01:30:35] Speaker 05:
I didn't use them.

[01:30:36] Speaker 05:
I'm just citing them.

[01:30:37] Speaker 05:
I'm trying to address the other side's suggestion that none of what's here

[01:30:43] Speaker 05:
is subject to Commission jurisdiction, which seems to be just patently wrong in light of what the Commission says on page 36 of its own opinion.

[01:30:51] Speaker 05:
They list it.

[01:30:52] Speaker 05:
The only category I can't make complete sense of is the very last category, and just and reasonable regulations and practices.

[01:31:00] Speaker 05:
And I was wondering if you knew what they might have meant by that.

[01:31:03] Speaker 05:
The rest are self-evident, and they seem to be all covered in this case.

[01:31:08] Speaker 02:
Yes, your honor.

[01:31:09] Speaker 02:
And I do think that language that you're asking about is cited is directly in 41102C currently.

[01:31:17] Speaker 02:
So I think that may be the answer.

[01:31:26] Speaker 01:
I have a question about the commission's first order suggested that Mediterranean had shown bad faith by not immediately appealing the ALJ's discovery orders.

[01:31:39] Speaker 01:
But didn't the commission's order elsewhere acknowledge that Mediterranean had no right to appeal a non-final ruling, like a discovery ruling?

[01:31:47] Speaker 02:
I hope the commission didn't say one.

[01:31:50] Speaker 02:
I don't think the commission said one failure to appeal was by itself bad faith.

[01:31:55] Speaker 01:
No, but they cited it as evidence of bad faith, and I was stunned by that.

[01:31:59] Speaker 02:
I think they do have a right to seek appeal.

[01:32:01] Speaker 02:
And here, they had three chances to at least seek to appeal the interim orders.

[01:32:08] Speaker 02:
Under 46 CFR 502.221, you can ask an ALJ to appeal a non-final order.

[01:32:18] Speaker 02:
And if you can make a showing, then that does happen.

[01:32:21] Speaker 02:
And here, I think they would have had a fairly strong argument.

[01:32:24] Speaker 02:
If they genuinely believed that they were prevented from complying by a foreign blocking statute, I think that would be a pretty strong argument that the commission should have heard

[01:32:34] Speaker 01:
So it's effectively like seeking a certificate of appeal ability in court.

[01:32:37] Speaker 01:
You have to get permission to do it.

[01:32:39] Speaker 02:
You do have to get permission, but I don't think it's like seeking cert.

[01:32:46] Speaker 02:
I think it's something that would be likely available in a case like this if they could demonstrate.

[01:32:53] Speaker 02:
I think they would have to make some demonstration.

[01:32:56] Speaker 02:
I can't predict how it would have gone.

[01:32:58] Speaker 02:
Some factual and legal demonstration that they did, in fact, face that kind of

[01:33:03] Speaker 02:
And they really, they wanted to respect the agency.

[01:33:07] Speaker 02:
They didn't want to simply ignore the agency's orders three times in a row.

[01:33:11] Speaker 02:
They wanted to give the agency a chance to determine this issue so they could have sought to appeal that under that regulatory provision.

[01:33:16] Speaker 01:
Although it could have been seen as procedurally obstructive to not wait until final order and appeal then, which is the ordinary course when one is in an adversary

[01:33:28] Speaker 01:
dispute resolution form.

[01:33:30] Speaker 01:
Is it the commission's position that seeking to employ the Hague Convention is a sign of bad faith supporting default judgment?

[01:33:41] Speaker 02:
Not in isolation, Your Honor, but I think if you look at how federal courts evaluate requests to proceed under the convention, you do have to make a showing that it's necessary.

[01:33:52] Speaker 02:
And that showing wasn't made here.

[01:33:54] Speaker 02:
I mean, if you look at the cases, the Illuminati networks and Alfata cases that the ALJ cited, there has to be some showing of necessity with specificity, specific documents or categories of documents that you can't produce.

[01:34:11] Speaker 02:
Not a general refusal to proceed in 14 categories sustained over three different orders.

[01:34:18] Speaker 01:
And so that entails, I think we can hear from from Mr. Longstreet on rebuttal, but I think that entails disagreeing with his way more categorical position, which is that it doesn't matter the nature of the information that's being sought if it's being sought by a governmental

[01:34:41] Speaker 01:
enforcer from a foreign country that it cannot be produced without resorting to Hague.

[01:34:49] Speaker 01:
And I don't see any authority about Swiss law in the record, other than Mediterranean's own authority.

[01:34:56] Speaker 01:
So I don't see any authority about Swiss law in the record supporting a more granular, nuanced view about what would require resort to Hague.

[01:35:08] Speaker 02:
I think here, the

[01:35:10] Speaker 02:
The party doing the seeking is the administrative complaint at MCS.

[01:35:15] Speaker 02:
The commission is in the nature of a court.

[01:35:17] Speaker 02:
Just like all these other cases, like the two I just mentioned, those are courts deciding private disputes, as I understand it, where one party was seeking discovery.

[01:35:28] Speaker 02:
And it's true that private party complaint discovery could potentially entail the need to resort to those procedures.

[01:35:36] Speaker 02:
But I understand that the requesting party is not

[01:35:41] Speaker 02:
like a prosecuting authority.

[01:35:43] Speaker 02:
It's like in the nature of a judicial proceeding.

[01:35:47] Speaker 01:
It's in the nature of a judicial proceeding.

[01:35:49] Speaker 01:
And the distinction that I hear, Mr. Longstrethmaking, is pre or extra judicial sharing of information versus judicially required.

[01:36:05] Speaker 01:
And I mean, consider that ALJ's signature and seal were on

[01:36:11] Speaker 01:
the Hague request.

[01:36:13] Speaker 02:
Yes, that's right.

[01:36:15] Speaker 02:
But again, I think that's also true of the cases where the federal cases that say you have to show that it's necessary in order to push out of the ordinary US civil discovery procedure.

[01:36:27] Speaker 01:
And the Supreme Court's decision says if there's a risk that you'll be criminally prosecuted, that is a component of whether it's necessary.

[01:36:39] Speaker 01:
How can we say?

[01:36:41] Speaker 02:
Which wasn't the case here.

[01:36:43] Speaker 01:
So they're saying, yeah, that we're going to criminal prosecution under 271.

[01:36:49] Speaker 02:
Yes, right.

[01:36:50] Speaker 02:
And we're saying we don't think they demonstrated that risk.

[01:36:52] Speaker 02:
And we also don't think they demonstrated a factual need under, certainly not at the time they were before the commission for the ALJ.

[01:37:00] Speaker 02:
And I think that's part of the analysis as well.

[01:37:01] Speaker 01:
They haven't demonstrated a factual need?

[01:37:03] Speaker 02:
Yeah, they haven't demonstrated with specificity what materials they can't provide, which apparently

[01:37:09] Speaker 02:
were providable for 40 years by major carriers in these proceedings where we never saw this kind of argument.

[01:37:16] Speaker 02:
They haven't demonstrated, you know.

[01:37:18] Speaker 01:
From Swiss defendants?

[01:37:21] Speaker 02:
In general, from Swiss, from anyone.

[01:37:23] Speaker 01:
I mean, the reason I ask is because Swiss has information privacy laws that are, you know, second to none.

[01:37:28] Speaker 02:
Understood.

[01:37:29] Speaker 01:
It's part of their UNESCO world heritage.

[01:37:34] Speaker 02:
But in general, we haven't seen that.

[01:37:36] Speaker 02:
So that's,

[01:37:37] Speaker 02:
And I think they needed to do more on that in order to justify it under the procedure that federal courts follow.

[01:37:47] Speaker 05:
Yeah, I think I found the answer.

[01:37:49] Speaker 05:
I'm sorry I pushed hard and didn't look carefully.

[01:37:53] Speaker 05:
The reference

[01:37:55] Speaker 05:
I'm just really trying to tie this to cargo one because there's certain things I got to get clear in my mind.

[01:38:00] Speaker 05:
The commission gave us an answer on page 36 as to what's clearly within their jurisdiction.

[01:38:05] Speaker 05:
So whatever confusion there is from the prior pages is washed away.

[01:38:09] Speaker 05:
And I asked you about their last category, and that is 41102C, common carrier, marine operator, or ocean transportation intermediary may not fail to establish, observe, and enforce

[01:38:24] Speaker 05:
just and reasonable regulations and practices relating to or connected with receiving, handling, storing, or delivering property.

[01:38:34] Speaker 05:
And I gather that's among the complaints in this case or not.

[01:38:40] Speaker 02:
Yes, that's right, Your Honor.

[01:38:42] Speaker 02:
That's right.

[01:38:42] Speaker 05:
So everything that's listed in Cargo 1 that the commission has clearly said is within their jurisdiction is among the complaints that have been raised against.

[01:38:53] Speaker 05:
The other side, is that right?

[01:38:54] Speaker 02:
I believe that's correct, Your Honor.

[01:38:58] Speaker 01:
Thank you.

[01:39:06] Speaker 01:
All right, Mr. Reynolds for MCS.

[01:39:23] Speaker 06:
Thank you.

[01:39:24] Speaker 06:
May it please the court, Matthew Reynolds for the intervener and the complainant below MCS Industries, Incorporated.

[01:39:30] Speaker 06:
MSC's challenge here is premised on intentional misunderstanding and cabining of the causes of action that MCS Industries brought in its original complaint and its amended complaint in this administrative proceeding.

[01:39:44] Speaker 06:
And it's interesting because that same cabining, that same misinterpretation of our claims is what drove the very discovery deficiencies that led

[01:39:52] Speaker 06:
to the order granting our motion to compel and eventually led to the default in this case.

[01:39:57] Speaker 06:
MSC clearly would very much like our causes of action to be nothing more than breach of contract claims.

[01:40:03] Speaker 06:
They are not.

[01:40:04] Speaker 06:
One of the reasons I know they are not is that I am currently litigating breach of contract counterclaims against MSC in a separate arbitration that, as has been discussed in the papers, is proceeding in parallel with this proceeding.

[01:40:16] Speaker 01:
I'm sorry to interrupt you.

[01:40:17] Speaker 01:
Can I ask you on the discovery issues, we have very broad, so far very broad positions, pro and con.

[01:40:25] Speaker 01:
Can you give me your most compelling points that if you could only have three categories of information that you think you're entitled to, can you give me a little bit of granularity with respect to what are they and what claims do they go to support?

[01:40:42] Speaker 06:
Absolutely, Your Honor.

[01:40:44] Speaker 06:
I think that the main cause of action that is at issue with respect to these discovery deficiencies is the first count of our complaint, which is under 46 U.S.

[01:40:53] Speaker 06:
Code 41102C.

[01:40:55] Speaker 06:
That is the unjust and unreasonable practices claim.

[01:40:59] Speaker 06:
As counsel for the FMC has indicated, that claim is the one that I think most explicitly and clearly goes far beyond the sort of plain vanilla breach of contract concepts that MSC's counsel has discussed.

[01:41:12] Speaker 06:
By regulation, claims under 41102C are held to a heightened pleading standard, and they are held to a standard where you have to establish

[01:41:22] Speaker 06:
a practice that occurs over time.

[01:41:25] Speaker 06:
It can't just be a claim that one carrier did something wrong once to one complaining shipper.

[01:41:31] Speaker 06:
It's a pattern or practice standard.

[01:41:33] Speaker 06:
And so for that reason, many of the discovery requests that MSC refused to comply with went to evidence and documents, communications and data that would go to prove our 41102 C claim under that heightened pleading standard.

[01:41:48] Speaker 06:
under that standard that almost by definition would require more than just discovery about MSC's specific interactions with MSCS industries in isolation.

[01:41:59] Speaker 06:
So I think that would be the strongest claim.

[01:42:01] Speaker 01:
It's not actually a heightened pleading standard.

[01:42:03] Speaker 01:
We're beyond pleading.

[01:42:04] Speaker 01:
This is about evidence.

[01:42:04] Speaker 01:
You're saying it's a challenging item of proof or element of proof.

[01:42:11] Speaker 06:
Yes, Your Honor, that is correct.

[01:42:12] Speaker 06:
The FMC's regulations have imposed a heightened burden of proof for claims of that nature.

[01:42:18] Speaker 06:
specifically to separate them from sort of the garden variety type breach of contract claims that we've been talking about earlier today.

[01:42:25] Speaker 06:
And so for that reason, many of these categories of discovery requests sought data and information not just about MSC's dealings with MCS industries during the relevant time period, but also its dealings with other shippers, both on a spot market basis and on the basis of their service contracts, because that evidence would have been necessary for us to meet that heightened burden to prove count one of the complaints.

[01:42:47] Speaker 01:
And the particular evidence?

[01:42:48] Speaker 06:
The particular evidence would have been information about peak season surcharges, for example, that were imposed on a divergent basis among different shippers during this time period.

[01:43:00] Speaker 06:
I will also note, Your Honor, with regard to the earlier question about count two of our complaint, Your Honor asked if there were any ways in which our count two, which is

[01:43:11] Speaker 06:
closest to sort of a breach of contract concept would be distinct from that.

[01:43:17] Speaker 06:
The peak season surcharges, I think, are a good example of that.

[01:43:20] Speaker 06:
Those surcharges, as alleged in our complaint, were extra contractual charges that MSC sought to coerce from MCS Industries in order to carry its cargo.

[01:43:30] Speaker 06:
That would be an example of conduct in the course of providing service in the liner trade that is not consistent with the terms of the service contract.

[01:43:40] Speaker 01:
And I know you breathe this, but doesn't your contract with Mediterranean allow them to request surcharges and void the contract if you refuse to pay them?

[01:43:46] Speaker 01:
Your view is they wanted to charge surcharges and they, but they didn't want to have to void the contract.

[01:43:52] Speaker 06:
It allows them to request it, but it requires mutual agreement on the surcharges in order for them to be charged.

[01:43:57] Speaker 06:
And so I'm giving that as an example of how that extra contractual charge would take this outside of the pure breach of contract concept that we're talking about and put it within the provision 41

[01:44:09] Speaker 06:
of 41104A that Your Honor asked about.

[01:44:14] Speaker 01:
You agreed to a second pay convention letter.

[01:44:18] Speaker 01:
How can you now defend that having asked for that and insisted on it, but Mediterranean's insistence on that, is somehow unjustified delay supporting default?

[01:44:29] Speaker 06:
I think, Your Honor, that the ALJ was not wrong to accommodate MSC's request for Hague Convention proceedings.

[01:44:38] Speaker 06:
But as the ALJ, I think, correctly determined, those proceedings were not in fact necessary.

[01:44:44] Speaker 06:
There was, of course, no risk of criminal jeopardy in this administrative proceeding.

[01:44:49] Speaker 06:
And so relying on federal case law, relying on authority that

[01:44:53] Speaker 06:
the ALJ appropriately looks to, the ALJ concluded that it was unnecessary.

[01:44:58] Speaker 06:
And so although we were perfectly happy to go along with their recommendation, when it was determined by the ALJ that that procedure was unnecessary, of course, our view was they should produce discovery.

[01:45:08] Speaker 06:
That was our view from the very beginning of the case, that they should simply produce the discovery.

[01:45:14] Speaker 01:
All right.

[01:45:14] Speaker 06:
Thank you, Your Honor.

[01:45:15] Speaker 01:
Thank you.

[01:45:17] Speaker 01:
You want the time reserved, Mr. Langstrath?

[01:45:19] Speaker 01:
You have three minutes.

[01:45:21] Speaker 03:
I'll try not to take all of it.

[01:45:24] Speaker 03:
Just some some very quick points.

[01:45:26] Speaker 03:
First of all, on the A2A claim, the breach of contract claim, the point I'd like to make there is, and I think even my friend Mr. Reynolds says that's closest to breach of contract.

[01:45:36] Speaker 03:
It's really indistinguishable from a breach of contract.

[01:45:39] Speaker 03:
But the point I wanted to make was that your honor is 100% right.

[01:45:44] Speaker 03:
The ALJ did not engage with that at all, even though cargo one says that that's a claim that should be presumptively outside the commission's jurisdiction.

[01:45:54] Speaker 03:
The ALJ made no distinction between that claim.

[01:45:57] Speaker 03:
and the discrimination claims and the others they're talking about.

[01:46:00] Speaker 03:
So we think at the very least there's just a complete failure of the LGA to explain how she was applying cargo one in this case.

[01:46:08] Speaker 03:
It may very well be that if the commission were to unpack this and look at the allegations, they would agree with Judge Edwards that these fall within, I think

[01:46:16] Speaker 03:
I think if they listen to this argument, the commission will probably come out that way, as I hear it, the way the panel comes out.

[01:46:23] Speaker 03:
But the point is, the commission has to make that decision.

[01:46:26] Speaker 03:
Judge Edwards can't make that decision.

[01:46:27] Speaker 01:
So we would imagine the commission to do it.

[01:46:28] Speaker 03:
I would think it'd have to, because they didn't discuss A2 at all.

[01:46:32] Speaker 03:
And A2, as I was trying to say, and really apologize for being impatient on that, but A2 is different from these other claims, because A2 was distinguished in Cargo 1 itself.

[01:46:44] Speaker 03:
as something that's going to be outside their jurisdiction.

[01:46:46] Speaker 01:
And do you agree with Mr. Summers that claim splitting is just par for the course in these shipping act cases?

[01:46:57] Speaker 03:
It is.

[01:46:58] Speaker 03:
And this is one of the reasons why the jurisdictional limitations have to be enforced.

[01:47:02] Speaker 03:
Because otherwise, we've got a case now for another client.

[01:47:05] Speaker 03:
We're in three different forums.

[01:47:07] Speaker 03:
And they came to the FMC a year and a half after filing a breach of contract claim

[01:47:13] Speaker 01:
and after filing an arbitration claim because they're open for business.

[01:47:31] Speaker 01:
I have a court case.

[01:47:32] Speaker 03:
Right.

[01:47:33] Speaker 03:
At the very least, I think they have to be serious about imposing and looking at the complaint to see what's really an issue here.

[01:47:40] Speaker 03:
So we're not dragged to three different forms.

[01:47:42] Speaker 03:
And they did not do that here.

[01:47:44] Speaker 03:
They didn't even try to look at when this was essentially contractual.

[01:47:48] Speaker 07:
Yep.

[01:47:50] Speaker 07:
The way that your brief argues, at least in the opening brief, you say that there's no jurisdiction over any of the five.

[01:47:57] Speaker 07:
Right.

[01:47:58] Speaker 07:
I don't see where you make the argument that if there was jurisdiction over one, but the other four, there was not jurisdiction, you still have to remain.

[01:48:14] Speaker 07:
I don't see that argument in your brief.

[01:48:18] Speaker 07:
And we do have a harmless error rule even in administrative cases as with everything else.

[01:48:28] Speaker 07:
So I'm trying to understand if we were to conclude that the commission perhaps got the analysis wrong as to one or more accounts, but they got the analysis correct as to at least one, why isn't that their arm here?

[01:48:51] Speaker 03:
I think with respect to the issue we're just talking about here,

[01:48:54] Speaker 03:
The error that's most obvious with respect to a to where the commission actually said these are usually not in our jurisdiction and the LJ didn't discuss it at all also applies to the other claims as well because she likewise did not discuss those.

[01:49:10] Speaker 03:
Now, as I said, it may very well be that those are harder questions.

[01:49:15] Speaker 03:
And Judge Edwards actually thinks they're easy questions.

[01:49:18] Speaker 03:
But whatever they are, they're questions the commission did not address.

[01:49:22] Speaker 03:
And it didn't address them for any of the claims.

[01:49:24] Speaker 03:
It just said state.

[01:49:25] Speaker 07:
But my question to you is, I disagree with that.

[01:49:29] Speaker 07:
OK.

[01:49:29] Speaker 07:
And I think that they did address it maybe as to count one.

[01:49:33] Speaker 07:
But I agree with you that they didn't address it as to counts two through five.

[01:49:40] Speaker 07:
What what should I do?

[01:49:42] Speaker 03:
Well, I think you have to look and see whether the commission would have.

[01:49:45] Speaker 03:
I think one of the reasons we didn't talk about claims splitting is the commission didn't talk about that.

[01:49:50] Speaker 03:
Commission didn't say, well, we would do this.

[01:49:53] Speaker 03:
So Mr. Summers is saying, well, if we're if we're if we lose one claim, we lose them all.

[01:49:58] Speaker 03:
The commission didn't say that it just defaulted us generally.

[01:50:02] Speaker 03:
So I'm not sure that that would really be an issue.

[01:50:05] Speaker 03:
One thing I did want to say with respect to Judge Pillard's question when she's trying to unpack what discovery went to what issue and what didn't.

[01:50:14] Speaker 03:
Again, something the ALJ made no effort to do.

[01:50:17] Speaker 03:
The example that Mr. Reynolds gave was practices.

[01:50:20] Speaker 03:
Well, we can't show a practice without asking for discovery about every other shipper you dealt with.

[01:50:26] Speaker 03:
And I think that's a good example of the abuse of discretion, which is that there are plenty of sanctions in default other than just losing.

[01:50:34] Speaker 03:
And one sanction here, potential sanction here on that would have been, OK, you can't challenge that it was a practice.

[01:50:41] Speaker 03:
We'll show it in our case, because we think they can't show it in their case.

[01:50:45] Speaker 03:
So we don't have a practice if they can't show it in their case.

[01:50:48] Speaker 03:
But we could say that could be one of the things you could do as a sanction, say, look,

[01:50:51] Speaker 03:
if you're really getting into it.

[01:50:53] Speaker 03:
Okay, if you show it happened in your case, because you haven't provided this other evidence, you can't challenge that it wasn't a practice.

[01:51:01] Speaker 03:
That element is taken as conceded.

[01:51:04] Speaker 03:
And that's the kind of analysis you generally expect in a default, okay, because we did produce a lot of evidence, okay, a lot of discovery voluntarily.

[01:51:13] Speaker 03:
And we were treated as if we had produced none.

[01:51:16] Speaker 03:
You go back and look, well, what did they produce?

[01:51:18] Speaker 03:
What didn't they produce?

[01:51:19] Speaker 03:
How does that tie to the claims?

[01:51:20] Speaker 01:
As a newcomer to the case, I am really baffled why you're fighting the production of any of the supplemental information.

[01:51:31] Speaker 01:
I just don't understand the business decision.

[01:51:34] Speaker 01:
I don't understand what you're thinking to get out of this case.

[01:51:36] Speaker 01:
And I think that may be not far from where some of the decision makers in the commission

[01:51:47] Speaker 03:
Okay, and that's the third point I wanted to make and then I'll sit down.

[01:51:50] Speaker 03:
So I'm glad we're on the same page.

[01:51:53] Speaker 03:
The way that I know, and I can't get in too far into privilege discussion, but the way I know we looked at it and the way Swiss Council looked at it is that the act of production from Switzerland, in other words, they're directing it.

[01:52:05] Speaker 03:
Our legal offices in Switzerland, our advice on this is from Switzerland.

[01:52:09] Speaker 03:
So if we direct that production from Switzerland, it doesn't really matter if, well, maybe we could access the document from this or there.

[01:52:16] Speaker 03:
And they did, I mean, I understand that the commission was skeptical and I understand my friends on the other side are skeptical, but they were, maybe there's a small risk of criminal prosecution, but general counsel is not going to tell his boss, sure, it's only a small risk, particularly when there's a procedure available that removes the risk.

[01:52:40] Speaker 01:
And was I correctly characterizing your position in questioning the other council today, that your position is that any information can't be provided from Switzerland because it's under the compulsion of an actor of a foreign government?

[01:52:57] Speaker 03:
Right.

[01:52:57] Speaker 03:
It's under the compulsion of an actor and decisions maker in Switzerland, the ones who have to decide whether to bow to that.

[01:53:03] Speaker 01:
This is just speaking for me.

[01:53:04] Speaker 01:
We have not.

[01:53:05] Speaker 01:
I understand.

[01:53:06] Speaker 01:
But I would urge you to ask your client and or your Swiss co-counsel the question that I had about whether you could voluntarily do anything.

[01:53:16] Speaker 03:
and others who get said that we've got this compulsion order, but could we do it under process?

[01:53:22] Speaker 01:
Could you sidestep and say, we're not doing it because of that.

[01:53:26] Speaker 01:
We want to bring this case at some kind of risk.

[01:53:27] Speaker 03:
Is that something you want us to file supplemental advice on, or is that just for us?

[01:53:33] Speaker 01:
No.

[01:53:33] Speaker 01:
It's literally just my free reaction.

[01:53:35] Speaker 03:
Just your thought.

[01:53:37] Speaker 01:
And it doesn't speak for the court.

[01:53:40] Speaker 03:
I understand.

[01:53:41] Speaker 03:
Thank you very much.

[01:53:42] Speaker 03:
Again, I appreciate very much, and I apologize for any heat

[01:53:46] Speaker 01:
Thank you all.

[01:53:47] Speaker 01:
Case is submitted.