author: FORD, Judge:

text:
    James A. BARNHART, Plaintiff, v. UNITED STATES TREASURY DEPARTMENT, Defendant.
    Court No. 81-3-00328.
    United States Court of International Trade.
    June 24, 1985.

      Leonard M. Fertman, P.C., Leonard M. Fertman, Arthur E. Schwimmer, Los Angeles, Cal, for plaintiff.
    Richard K. Willard, Acting Asst. Atty. Gen., Washington, D.C., Joseph I. Liebman, Attorney in Charge, International Trade Field Office, Commercial Litigation, Saul Davis, New York City, for defendant.
   Memorandum Opinion and Order

FORD, Judge:

The matter before the Court involves review of an order of the Secretary of the Treasury (Secretary) suspending plaintiffs customshouse broker’s license for a period of ninety days. The Secretary had originally entered an order revoking plaintiff’s license. In accordance with this Court’s order of remand in James A. Barnhart v. United States Department of Treasury, 7 CIT —, 588 F.Supp. 1432 (May 31, 1984), a procedural due process failure at the administrative level was corrected and the subsequent decision modified the original penalty. Jurisdiction is pursuant to section 641(b) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1641(b), and 28 U.S.C. § 1581(g).

The facts in this case were extensively summarized in Barnhart (supra) and need not be fully repeated here. Briefly, plaintiff was convicted on four counts of receiving stolen merchandise and one count of conspiracy on March 22, 1976. On June 13, 1978, plaintiff’s convictions were set aside and the case against him dismissed pursuant to California Penal Code § 1203.4. The Customs Service issued a Notice to Show Cause and Statement of Charges on July 18, 1979, charging plaintiff with being disreputable based on misconduct as evidenced by his convictions. An administrative hearing was held, and the hearing officer, a Customs official, recommended that plaintiff be given a serious reprimand. The Customs Service filed timely exceptions to the hearing officers decision, but these exceptions were not served on plaintiff.

On February 3, 1981, the Secretary issued an order revoking plaintiffs customhouse broker’s license. Plaintiff appealed to this Court which, after a hearing, remanded the case to allow plaintiff to respond to the exceptions to the hearing officer’s decision filed by the Customs Service. In its subsequent decision, the Treasury Department modified its penalty from revocation to a ninety day suspension. It is from that action plaintiff presently appeals.

Two issues are raised by plaintiff in this review. Plaintiff contends the term “disreputable”, as used in 19 U.S.C. § 1641(b), is void for vagueness on its face. Consequently, plaintiff argues the suspension of his customhouse broker’s license on that sole statutory ground constitutes a violation of due process under the Fifth Amendment. Plaintiff also alleges the decision of the Secretary suspending plaintiff’s license is arbitrary, capricious, an abuse of discretion, and unsupported by substantial evidence.

19 U.S.C. § 1641(b) sets forth the grounds for revocation or suspension of a customhouse broker’s license. For the purposes of this challenge, the statute provides, in relevant part:

... [the] Secretary of the Treasury shall have the right to revoke or suspend the license of any customhouse broker shown to be incompetent, disreputable, or who has refused to comply with the rules and regulations issued under this section____

In assessing the claim that the term “disreputable” is void for vagueness on its face, the Court is aware of the strong presumption of constitutional validity given to Congressional legislation. United States v. Carolene Products Co., 304 U.S. 144, 58 S.Ct. 778, 82 L.Ed. 1234 (1938); Erie Navigation Co. v. United States, 83 Cust.Ct. 47, C.D. 4820, 475 F.Supp. 160 (1979). “When one interpretation of a statute would create a substantial doubt as to the statute’s constitutional validity, the courts will avoid that interpretation absent a clear statement of a contrary legislative intent.” Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 96 S.Ct. 2882, 49 L.Ed.2d 752 (1976).

In enacting the statute at issue, Congress set forth, in broad statutory terms, the standards governing revocation and suspension of a customhouse broker’s license. In so doing, it must be assumed Congress was concerned with regulating the conduct of persons acting under the auspices of the United States Government. The Secretary was delegated the specific authority to define and implement those standards through agency regulations. This was accomplished by the promulgation of 19 C.F.R. § 111.53, which encompasses the improper conduct specified in Part III of the regulations and places the brokerage community on notice as to the types of conduct prohibited.

In establishing a system conditioning the grant and retention of a broker’s license upon good moral character and knowledge of customs-related laws, Congress clearly intended to monitor behavior that would affect the conduct of a brokerage business and the ability to rely on the honesty and competency which the license represents. The validity of this purpose has long been recognized by the Courts. See, e.g., In re Landeck & Merrill, 20 F.2d 249 (1927). Viewed in this context, the use of the term “disreputable” in the statute cannot be considered either unduly vague or violative of the due process clause of the Fifth Amendment. “If the general class of offenses to which the statute is directed is plainly within its terms, the statute will not be struck down as vague, even though marginal cases could be put where doubts might arise. United States v. Petrillo, 332 U.S. 1, 7, 67 S.Ct. 1538, 1541, 91 L.Ed. 1877 [1947]. Cf. Jordan v. DeGeorge, 341 U.S. 223, 231, 71 S.Ct. 703, 707, 95 L.Ed. 886 [1951]. And if this general class of offenses can be made constitutionally definite by a reasonable construction of the statute, [the] Court is under a duty to give the statute that construction.” United States v. Harriss, 347 U.S. 612, 74 S.Ct. 808, 98 L.Ed. 989 (1954). Thus construed, I find the term “disreputable”, as used in 19 U.S.C. § 1641(b), fully within the parameters of constitutionality and not void for vagueness.

In suspending plaintiffs license for a period of ninety days, the Secretary found “a preponderance of credible evidence supports a conclusion that [plaintiff] engaged in the misconduct of which he was subsequently convicted and that such conduct is disreputable within the meaning of 19 U.S.C. § 1641(b)”. Plaintiff contends this decision is arbitrary, capricious, an abuse of discretion, and unsupported by substantial evidence. Two questions are thus presented to the Court: whether there is substantial evidence to support the finding that plaintiff is disreputable; and whether the Secretary’s decision to suspend plaintiff’s license constitutes an abuse of discretion.

Under 5 U.S.C. § 706, the reviewing court shall hold unlawful and set aside agency action, findings, and conclusions found to be unsupported by substantial evidence. Substantial evidence is such relevant evidence that a reasonable mind might accept as adequate to support the conclusion. Fulwood v. Heckler, 594 F.Supp. 540 (1984); Kindred v. Heckler, 595 F.Supp. 563 (1984). This is something less than the weight of the evidence, and the possibility of drawing two inconsistent conclusions from the evidence does not prevent the agency’s finding from being supported by substantial evidence. Asarco, Inc. v. Occupational Safety and Health Administration, 746 F.2d 483 (9th Cir.1984); St. Elizabeth Community Hospital v. Heckler, 745 F.2d 587 (9th Cir.1984). The Court may not substitute its judgment for that of the administrative agency. Oneida Indian Nation of New York v. Clark, 593 F.Supp. 257 (1984).

Both the original decision to revoke and the subsequent decision suspending plaintiff’s license were based in part upon a finding that plaintiff’s felony convictions could be considered evidence of the underlying misconduct with which he was charged, i.e., being disreputable. In so finding, the Secretary overruled the decision of the hearing officer, who held that since plaintiff’s convictions had been expunged pursuant to California law, there was insufficient evidence of disreputable conduct on plaintiff’s part to warrant a sanction more severe than a serious reprimand. Neither federal law nor the applicable administrative regulations specify the effect of a state pardon on federal licensing procedures. However, state proceedings expunging a record of disreputable conduct cannot affect federal proceedings based on such conduct as expungement does not change the character of the conduct involved. Diaz v. Chasen, 642 F.2d 764 (5th Cir.1981).

Based on the record before me, I do not find the decision of the Secretary to be unsupported by substantial evidence. The Secretary properly considered plaintiff’s felony convictions as evidence of the underlying misconduct with which he was charged. Taylor v. U.S. Civil Service Commission, 374 F.2d 466 (9th Cir.1967). The Secretary further determined such conduct related directly to plaintiff’s honesty and integrity as a customhouse broker. The mitigating evidence as to plaintiff’s reputation was also cited in the Secretary’s decision. Under these circumstances, the Secretary could properly conclude the evidence would deem plaintiff disreputable. Accordingly, the Court will not disturb the findings of the Secretary.

The remaining issue to be addressed is whether the Secretary’s decision to suspend plaintiff’s license constitutes an abuse of discretion. Both 19 U.S.C. § 1641(b) and 19 C.F.R. § 111.53 specifically provide for the penalty imposed by the Secretary. In view of this fact, the Court’s scope of review under 5 U.S.C. § 706 is limited. After satisfying itself the agency has acted within its statutory authority and the action was accompanied by appropriate procedural protections and supported by substantial evidence, the Court must inquire whether the rationale of the agency is both discernible and defensible. In so doing, the Court may not substitute its judgment for that of the agency, but need only assure itself the decision was rational and based on consideration of relevant factors. Trans-Pacific Freight Conference v. Federal Maritime Commission, 650 F.2d 1235 (1980).

The abuse of discretion standard, as described in Tempo Trucking and Transfer Corp. v. Dickson, et al., 405 F.Supp. 506, 514 (1975), provides:

When the penalty chosen by an agency is within the range of sanctions provided by applicable disciplinary regulations, the severity of the sanction imposed is within the discretion of the agency. Ricci v. U.S., 507 F.2d 1390, 1393 (1974). Further, the imposition of a sanction within the authority of an administrative agency is not rendered invalid in a particular case because it is more severe than sanctions imposed in other cases. Butz v. Glover Livestock Commission Company, 411 U.S. 182, 93 S.Ct. 1455, 36 L.Ed.2d 142 (1973), rehearing denied, 412 U.S. 993, 93 S.Ct. 2746, 37 L.Ed.2d 162.

In the case at bar, the decision of the Secretary to suspend plaintiff’s license for ninety days does not constitute an abuse of discretion. The Secretary acted within his statutory authority and the action taken met the procedural requirements and was supported by substantial evidence. The severity of the punishment imposed was within the parameters provided by the applicable statute and regulations. The Court is satisfied the relevant factors were considered. The Court is equally satisfied the choice of available sanctions was rational under the facts presented. In view of the foregoing, the Court will not substitute its judgment for that of the Secretary. The decision suspending plaintiff’s customhouse broker’s license for a period of ninety days is therefore affirmed. Judgment will be entered accordingly.

      . In October 1984 Congress revised Section 641 by enacting Section 212(a) of the Trade and Tariff Act of 1984, P.L. 98-573, 98 Stat. 2948. The revised provision governing disciplinary proceeding against customs brokers omits the term “disreputable". However, Section 214(d)(3) of P.L. 98-573 provides: “Any proceeding for revocation or suspension of a license instituted under section 641 of the Tariff Act of 1930 before the date of the enactment of this Act [October 30, 1984] shall continue and be governed by the law in effect at the time the proceeding was instituted.”


source: Caselaw Access Project

author: GASCH, Presiding Judge:

license: Public Domain

text:
    Thomas B. HOOVER, Violet J. Byerly, D. Garrett Spear, James DiGiovannantonio, Elizabeth R. Keenan, Richard C. Arpin, Duane R. Carter, Lee E. Verzinskie, Individually and as representatives of the class described herein, Plaintiffs, v. Elizabeth Hanford DOLE, Secretary, Department of Transportation, Norfolk Southern Corporation and Consolidated Rail Corporation, Defendants.
    Civ. A. No. 85-07.
    Special Court, Regional Rail Reorganization Act.
    July 9, 1985.

      Paul Shalita, Lawrence Goldberg, Goldberg, Dickman, Shalita & Tabas, P.C., Philadelphia, Pa., for plaintiffs Thomas B. Hoover, et al.
    Richard K. Willard, Acting Asst. Atty. Gen., Civ. Div., Dennis G. Linder, Robert Damus, Richard Greenberg, Dept, of Justice, Washington, D.C. (of counsel: Kenneth Weinstein, Deputy Asst. Gen. Counsel, Dept, of Transp., Washington, D.C.; John M. Mason, Chief Counsel, Grady C. Cothen, Sp. Asst, to Chief Counsel, and S. Mark Lindsey, Sp. Counsel, Federal R.R. Admin., Dept, of Transp., Washington, D.C.), for defendant Elizabeth Hanford Dole, Secretary, Dept, of Transp.
    J. Michael Hemmer, Charles A. Horsky, Charles G. Geyh, Covington and Burling, Washington, D.C., William C. Woolridge, Sr. Gen. Atty., Norfolk, Va., for defendant Norfolk Southern Corp.
    Laurence Z. Shiekman, Deborah F. Cohen, Robert E. Heideck, Pepper, Hamilton & Scheetz, Philadelphia, Pa., for defendant Consol. Rail Corp.
    Before GASCH, Presiding Judge, and BRYANT and WEINER, Judges.
   MEMORANDUM-ORDER

GASCH, Presiding Judge:

I. BACKGROUND

Plaintiffs Thomas B. Hoover, Violet J. Byerly, D. Garrett Spear, James DiGiovannantonio, Elizabeth R. Keenan, Richard C. Arpin, Duane R. Carter, and Lee E. Verzinskie, all present or former employees of defendant Consolidated Rail Corporation (“Conrail”), have brought this action for declaratory and injunctive relief against Secretary of Transportation Elizabeth Han-ford Dole, Conrail, and the Norfolk Southern Corporation (“Norfolk Southern”). Plaintiffs’ complaint raises three contentions regarding the proposed sale of the interest of the United States in Conrail stock to Norfolk Southern that was recently announced by Secretary Dole and Norfolk Southern and the mechanisms now in place for consideration of that proposal. First, plaintiffs contend that Secretary Dole has exceeded her statutory authority and taken plaintiffs’ property in violation of the Fifth Amendment’s Due Process Clause by entering into an agreement of intent to sell not only the government’s interests in Conrail but the interests of an Employee Stock Ownership Program (“ESOP”) established on behalf of Conrail employees as well. Complaint, fl 33. Second, plaintiffs allege that the ESOP, as presently operated, provides no opportunity for independent representation of the interests of ESOP participants in any proceeding concerning the sale of the ESOP’s interests in Conrail. Id. at ¶ 32. Finally, the complaint alleges that Secretary Dole acted ultra vires by negotiating a sale to Norfolk Southern that did not require Norfolk Southern to purchase all of Conrad’s assets. Id. at ¶ 34.

Together with the complaint, plaintiffs filed an application for preliminary injunction. The motion for preliminary injunction asks the Court to enjoin Secretary Dole and Norfolk Southern “from negotiating the sale of the stock interest in Conrail held by the Conrail Employee[ ] Stock Option Plan” and to bar these defendants from “implementing” the Memorandum of Intent (“MOI”) agreed to by Norfolk Southern and the government. Plaintiffs also ask the Court to appoint them to serve as independent trustees in the administration of the Conrail ESOP.

On June 10, 1985, defendants Dole and Norfolk Southern filed motions to dismiss asserting inter alia that the matter was not ripe for review and that plaintiffs had failed to state a claim on the merits. Together with these motions, defendants filed various documents concerning the Norfolk Southern proposal including the MOI. On June 28, 1985, after hearing counsel for plaintiffs and defendants argue pending motions in open court, the Court advised counsel for plaintiffs that in light of the filing of these matters outside the pleadings, the Court would treat defendants’ motions as motions for summary judgment instead of motions to dismiss. Counsel for plaintiffs then informed the Court that plaintiffs would file any additional materials they wished to have considered in connection with the motions for summary judgment by July 3, 1985. Plaintiffs’ counsel notified the Executive Attorney of this Court on July 3 that plaintiffs had elected not to submit any additional materials.

After reviewing the record herein, the Court finds, for the reasons discussed below, that summary judgment is warranted.

II. DISCUSSION

A. Ripeness

The primary argument raised by defendants Dole and Norfolk Southern in support of the motions for summary judgment is the contention that the actions complained of are not ripe for review.

Federal courts are “without power to give advisory opinions” or to “decide abstract, hypothetical or contingent questions^]” Alabama State Federation of Labor v. McAdory, 325 U.S. 450, 461, 65 5. Ct. 1384, 1389, 89 L.Ed. 1725 (1945). A court deciding whether a controversy is ripe for review must evaluate “both the fitness of the issue for judicial decision and the hardship to the parties of withholding court consideration.” Abbott Laboratories v. Gardner, 387 U.S. 136, 149, 87 S.Ct. 1507, 1515, 18 L.Ed.2d 681 (1967).

In response to defendants’ ripeness challenge, plaintiffs concede that significant aspects of the complaint are not ripe for review but insist that the Court does have before it three issues that are justiciable: 1) whether or not, merely by discussing possible terms for the sale of the ESOP stock, Secretary Dole has exceeded her statutory authority; 2) whether or not plaintiffs are entitled to appointment of an independent trustee to represent the interests of the ESOP; and 3) whether the ESOP beneficiaries would have “claims against the Government to the extent that they are under compensated” if the sale to Norfolk Southern is consummated. Plaintiffs’ Brief in Further Support of Request for Affirmative Relief and Contra Defendants’ Motion to Dismiss (“Plaintiffs’ Opposition”) at 6. As discussed infra, the last of these issues is not ripe for review.

As plaintiffs now characterize the complaint, they seek a declaratory judgment on the following question: “if the ESOP stock is involuntarily taken, do the ESOP beneficiaries have Tucker Act [] claims.” Plaintiffs’ Opposition at 7. In arguing that this issue is justiciable, plaintiffs rely on Dames & Moore v. Regan, 453 U.S. 654, 689, 101 S.Ct. 2972, 2991, 69 L.Ed.2d 918 (1981). Even a cursory review of Dames & Moore, however, demonstrates that the case at bar is distinguishable. In contrast to the situation in Dames & Moore, where the President had already issued an Executive Order suspending the plaintiffs claim, in this action there is no governmental action now in effect which can be reviewed to consider what remedies ultimately may be available to plaintiffs. Congress has not even begun to consider the mechanism for valuation of the ESOP’s interests or the nature of any legislative protections it may wish to afford to ESOP beneficiaries. Thus, unlike the Regional Rail Reorganization Act Cases, 419 U.S. 102, 126, 95 S.Ct. 335, 350, 42 L.Ed.2d 320 (1974), there is no basis for the Court to consider whether Congress has “withdrawn the Tucker Act grant of jurisdiction to the Court of Claims” since legislation that would need to be considered in this regard has not yet been enacted.

The second factor to be considered in resolving the question of ripeness, the hardship to the parties of withholding court consideration, also counsels against deciding the Tucker Act issue at this time. In the absence of a ruling, plaintiffs will face continued uncertainty concerning the nature of any remedies that ultimately may be available to them. This falls far short of the hardship recognized in Abbott Laboratories, for example, where withholding resolution would have required “an immediate and significant change in the plaintiffs’ conduct [] with serious penalties attached to noncompliance[.]” 387 U.S. at 153, 87 S.Ct. at 1518. Accordingly, this question is not yet ripe for adjudication.

B. Statutory Authority of Secretary

Plaintiffs contend that Secretary Dole has exceeded her statutory authority by agreeing to the MOI and discussing possible terms for the sale of the ESOP stock. In plaintiffs’ view, Secretary Dole has broad discretion with regard to the interests of the United States in Conrail but no role whatsoever with regard to discussions implicating the ESOP’s interests.

This contention is without merit. Notwithstanding the conclusory allegations in the complaint, the record leaves no room for a genuine dispute as to the limited role that Secretary Dole has played to date with regard to the ESOP stock. As discussed above, the MOI does not purport to sell the ESOP’s interest or require conveyance of that interest at any price. Moreover any sale of any Conrail stock to Norfolk Southern is, by the terms of the MOI, expressly conditioned on enactment of legislation ratifying the proposed sale to Norfolk Southern. MOI, ¶ 9(d). Thus, the Secretary has merely: a) made a commitment to sell the government’s interests if “appropriate arrangements” are made with regard to the ESOP and Congress expressly authorizes the proposed sale to Norfolk Southern; and b) recommended that Congress enact legislation to provide for the sale.

We do not read the Secretary’s authority as narrowly as plaintiffs. Section 401 of the 3R Act, as amended by NRSA, authorizes the Secretary to “submit to the Congress a plan for the sale, in block or by public offering, of the interest of the United States in the common stock of [Conrail].” Congress directed that such a plan achieve three goals: “A) ensure continued rail service; B) promote competitive bidding for such common stock; and C) maximize the return to the United States on its investment.” In light of Congress’ decision to vest the Secretary with substantial responsibility for proposing a mechanism for the sale of the government’s interests in a manner consistent with these goals, we are not prepared to say that the Secretary’s limited foray into matters touching on the ESOP’s interests exceeded the Secretary’s authority. This conclusion is buttressed by the general grant of authority in Section four of the Department of Transportation Act, which directs the Secretary to “exercise leadership under the direction of the President in transportation matters” and authorizes her to “make recommendations to the President and the Congress for their consideration and implementation[.]” Because the Secretary has made enactment of legislation incorporating her recommendations a prerequisite to completion of the proposed sale, we hold that the actions before us do not exceed her statutory authority.

C. Appointment of Independent Trustee

Plaintiffs have also petitioned the Court to “relieve the Secretary of any control over the ESOP” and provide the beneficiaries of the ESOP “with the independent representation and trusteeship which every other ESOP is given as a birthright under ERISA.” Plaintiffs concede that the Conrail ESOP is not subject to ERISA but contend that the existing structure governing the ESOP creates a “conflict of interest” between the Secretary's interests and those of the ESOP. Plaintiffs contend that “Congress could not have foreseen” this conflict and ask the Court to use its power to construe statutes to avoid absurd, unjust or unintended results to provide the independent trustee they seek. Plaintiffs’ Opposition at 20-21.

As plaintiffs properly note, it is well established that statutes should be interpreted to avoid unreasonable results whenever possible. See, e.g., American Tobacco Co. v. Patterson, 456 U.S. 63, 71, 102 S.Ct. 1534, 1538, 71 L.Ed.2d 748 (1982); Commissioner v. Brown, 380 U.S. 563, 571, 85 S.Ct. 1162, 1166, 14 L.Ed.2d 75 (1965). A-court may depart from the literal construction of a statute “when such a construction would produce an absurd and unjust result and would clearly be inconsistent with the purposes and policies of the act in question.” 2A Sands, Statutes & Statutory Construction § 45.12 (4th ed. 1973) (footnote omitted). Nevertheless we sit as judges whose task is to apply the law and may not ignore statutes merely because they may seem harsh. See, e.g., First National City Bank v. Compania de Aguaceros, S.A., 398 F.2d 779, 784 (2d Cir.1968). Thus as one court has noted, “such an approach to interpretation of statutes must be used with the utmost caution, for the line between irrationality and mere bad policy is a wavering and uncertain one.” Sierra Club v. Environmental Protection Agency, 719 F.2d 436, 445 (D.C.Cir.1983), cert. denied, — U.S. ---, 104 S.Ct. 3571, 82 L.Ed.2d 870 (1984).

Viewed in this context it is clear that the statutory provisions plaintiffs rely on cannot be construed to grant the relief plaintiffs seek. Contrary to plaintiffs’ characterizations, the statutory scheme suggests that Congress foresaw that officials charged with responsibility for the ESOP might face claims of conflict of interest in connection with a sale of Conrail, such as the claims raised in this action, but that Congress deliberately chose not to make these officials accountable to Conrail ESOP beneficiaries for any breach of fiduciary duties “under any federal or state law[.]” In the face of this decision, it cannot be said that the present structure is inconsistent with the purposes and policies of the 3R Act, as amended. To conclude otherwise would go beyond construction or interpretation and require that this Court completely rewrite statutes enacted by Congress.

Wherefore, it is ordered that plaintiffs’ application for preliminary injunction is denied and it is further ordered that defendants’ motions for summary judgment are granted.

      . Plaintiffs seek to pursue this litigation as a class action on behalf of all "those persons who are former and present employees of Conrail[.]” Complaint, ¶ 2. Of course, an action "is not maintainable as a class suit merely because it is designated as such in the pleadings; whether it is or not depends upon the attending facts.” 3B Moore's Federal Practice ¶ 23.02[2] at 23-89 (1982).

      . Section 1142 of the Northeast Rail Service Act of 1981 (“NRSA”), Pub.L. 97-35, 95 Stat. 357, 654 (Aug. 13, 1981), directed the Secretary to attempt to sell the interest of the United States in Conrail stock once the Board of Directors of the United States Railway Association determined that Conrail would be a profitable carrier.

      . Congress initially called for creation of the Conrail ESOP in Section 3 of the United States Railway Association Amendments Act of 1978, Pub.L. 95-565, 92 Stat. 2397 (Nov. 1, 1978). The legislation required that prior to establishment of the ESOP, Conrail have submitted a written plan to exempt those associated with the ESOP from "any fiduciary duty, responsibility or liability for the acquisition of, investment in, or retention of, any security or interest therein of [Conrail] or for any other transaction].]”
      Congress passed such a limit on liability in 1980 by adding subsection (8)(A) to Section 216(f) of the Regional Rail Reorganization Act of 1973, Pub.L. 93-236, 87 Stat. 985 (Jan. 2, 1974) (“3R Act”). See Pub.L. 96-254 § 118, 94 Stat. 399, 406 (May 30, 1980).

      . Plaintiffs allege that the committee managing the Conrail ESOP is appointed by Conrail’s directors, who in turn are alleged to be selected by the Department of Transportation. Complaint, ¶[ 32. The Complaint asks the Court to dismiss the current managers and appoint the putative class representatives to administer the ESOP.

      . According to plaintiffs, because there has been no finding that Conrail is not profitable, the Secretary is required by NRSA to sell Conrail as a single entity. Plaintiffs allege that the MOI violates this requirement by barring Norfolk Southern from retaining certain Conrail assets whose ownership by Norfolk Southern would, in the government’s view, raise antitrust problems.

      . Federal Rule of Civil Procedure 12(b) provides that: "If on a motion asserting the defense numbered (6) to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleadings are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.” See, e.g., Gordon v. National Youth Work Alliance, 675 F.2d 356, 361 (D.C.Cir.1982); Woods v. Dugan, 660 F.2d 379, 380-81 (8th Cir.1981).

      . During oral argument, plaintiffs’ counsel conceded that plaintiffs’ claim that Secretary Dole had exceeded her authority by negotiating an agreement with Norfolk Southern that allegedly would not require Norfolk Southern to purchase Conrail as a "single entity” was not yet ripe. Counsel also stipulated that any challenges based on the actual sale of the ESOP stock were not yet ripe as any sale remains contingent on a number of events including enactment of legislation.

      . The Tucker Act confers jurisdiction on the Court of Claims:
      [T]o render judgment upon any claim against the United States founded either upon the Constitution, or any Act of Congress or any regulation of an executive department, or upon an express or implied contract with the United States, or for liquidated or unliquidated damages in cases not sounding in tort.
      28 U.S.C. § 1491.

      . The action in Dames & Moore was brought by a plaintiff who had already obtained prejudgment attachments and a subsequent judgment against Iranian defendants but was barred from executing the judgment pursuant to a presidential Executive Order issued to implement the terms of the agreement between Iran and the United States for release of American hostages held in Iran and certain Iranian assets held in the United States. Dames & Moore, 453 U.S. at 665-67, 101 S.Ct. at 2979-80. The Executive Order in question provided for all Iranian claims to be "suspended" pending their presentation to an Iran-United States Claims Tribunal with the suspension terminating if the Claims Tribunal determined that it had no jurisdiction over the claim. Id. at 666, 101 S.Ct. at 2979. Although the Dames & Moore Court reached the question of whether the plaintiff would have a remedy under the Tucker Act, it did so in light of "the President’s actions,” i.e., actions that were already in effect — and the well-settled rule that "there must be at the time of taking ‘reasonable, certain and adequate provision for obtaining compensation.”’ Id. at 689, 101 S.Ct. at 2991 (citations omitted). In the action now before the Court there has not yet been any comparable governmental action.

      . By its terms, the MOI is not the all encompassing “definitive agreement” for the sale of Conrail that plaintiffs apparently envisioned in filing this action. To begin with, although the MOI anticipates that Norfolk Southern will purchase the Conrail stock owned by the ESOP and although the MOI constitutes the Secretary’s decision, assuming all conditions for sale are satisfied, to sell the government’s interests in Conrail to Norfolk Southern, the MOI does not purport to sell the ESOP's interest in Conrail or require conveyance of the ESOP’s interest at any price. Instead, the MOI provides only that at or prior to closing, Norfolk Southern or Conrail “shall have made appropriate arrangements with respect to the employees of Conrail to accomplish (i) the acquisition [by Norfolk Southern] of such employees’ 15% beneficial interest in Conrail." MOI, ¶ 2 (emphasis supplied). An exhibit to the Memorandum of Intent listing Norfolk Southern’s “proposed arrangements for Conrail employees” notes that Norfolk Southern has committed "a total amount of |375 million, of which an amount determined to be the fair value of the assets and rights of the existing Conrail ESOP shall be contributed to such ESOP.” The MOI further provides as a condition to the government’s obligation to sell that "[legislation shall have been enacted ... providing a mechanism for definitively valuing the existing Conrail employee stock ownership plan[.]” MOI, ¶ 9(d).

      . Indeed, the Senate Committee on Commerce, Science and Transportation, the only congressional body to take action to date on legislation providing for the sale of Conrail, apparently adopted proposed legislation that did not include a provision addressing this issue. The Committee Report accompanying the Committee bill states that "it will be necessary to offer an amendment containing such a mechanism when S. 638 is brought to the Floor." S.Rep. No. 99-98, 99th Cong., 1st Sess. 41 (1985).

      . As this Court has stated:
      If the United States eliminates or substantially impairs an owner’s use of his property or requires him to convey it, there is a "taking,” which gives rise to a claim under the Constitution, whether or not the United States so intended ____ Such claims would be cognizable in the Court of Claims [pursuant to the Tucker Act] as claims founded upon the Constitution, unless the Act [authorizing the taking] by fair implication withdraws such jurisdiction.

        In re Penn Central Transportation Co., 384 F.Supp. 895, 940-41 (Regional Rail Reorg.Ct. 1974) (noted with approval in Regional Rail Reorganization Act Cases, 419 U.S. at 126, 95 S.Ct. at 350). Thus in the Regional Rail Reorganization Act Cases, the Supreme Court held that the 3R Act did not bar a Tucker Act remedy for just compensation for any "erosion taking” effected by the 3R Act. 419 U.S. at 136, 95 S.Ct. at 355.

      . Pub.L. 89-670 § 4, 80 Stat. 931 (Oct. 15, 1966) (codified at 49 U.S.C. § 1653).

      . The case at bar does not require the Court to consider two issues: a) whether the Secretary would exceed her statutory authority by conveying the ESOP’s interests in Conrail in the absence of legislation addressing this issue; and b) whether the provision for limited Congressional review contained in Section 401 satisfies the principles enunciated in Immigration & Naturalization Service v. Chadha, 462 U.S. 919, 103 S.Ct. 2764, 77 L.Ed.2d 317 (1983). Plaintiffs concede that the former issue is not yet ripe while the latter issue is not implicated in plaintiffs' complaint.

      . ERISA is the common designation for the Employee Retirement Income Security Act, 29 U.S.C. § 1132 etseq.

      . Section 216(f)(8)(A) of the 3R Act provides that no ESOP manager:
      shall have or be subject to any fiduciary responsibility, obligation, or duty, nor shall any such person be subject to civil liability, under any federal or state law, as a fiduciary or otherwise—
      (i) in connection with the employee stock ownership plan ... on account of any reorganization or restructuring of [Conrail,] its successors or assigns, or their assets or capital structure ....
      (ii) for or in connection with ... the disposition of any [Conrail] security to the extent that such disposition is made in connection with a reorganization or restructuring of [Conrail] or [its] assets or capital structure, as directed or approved by ... the United States
      45 U.S.C. § 726(f)(8)(A).

      . See, e.g., Sierra Club, 719 F.2d at 445 (Court’s power limited to ”strain[ing] the statutory language" to avoid unreasonable result).


author: DUEÑAS, District Judge.

text:
    Yosh SAKAMOTO, Pacific Gift Supply, Inc., Top Liquor, Inc., Hakubotan, Inc., Jenny’s Fashion, Inc. and Para Para, Inc., all Guam Corporations, Plaintiffs, v. DUTY FREE SHOPPERS, LTD., a Hong Kong Corporation, Guam Airport Authority, an autonomous instrumentality of the Government of Guam, Manuel F.L. Guerrero, in his official capacity as Executive Manager of the Guam Airport Authority, John Does I through V, in their official capacities as employees of the Government of Guam, Department of Public Safety, and the Government of the Unincorporated Territory of Guam, Defendants.
    Civ. No. 82-0009
    United States District Court, D. Guam, Civil Division.
    Dec. 7, 1983.

      William Fitzgerald, Saipan, CNMI, for plaintiffs.
    Thomas C. Sterling, Klemm, Blair & Barusch, Agana, Guam, for Duty Free Shoppers.
    Weil, Gotshal & Manges, New York City, for defendants.
    Richard Pipes, Carbullido & Pipes, Agana, Guam, for defendants Guam Airport Authority and Manuel F.L. Guerrero.
    Richard Opper, Atty. Gen. of Guam, Agana, Guam, for defendant Government of the Unincorporated Territory of Guam.
   MEMORANDUM ORDER

DUEÑAS, District Judge.

STATEMENT OF THE CASE

Plaintiffs filed their original complaint in this action on February 8, 1982, and then filed an amended complaint on February 16, 1982. The Plaintiffs allege that beginning on or before December, 1976, and continuing to the present, the Defendants Guam Airport Authority and Duty Free Shoppers, Ltd., (hereinafter referred to as the “GAA” and “DFS,” respectively) engaged in unlawful combination and conspiracy in restraint of interstate commerce by entering into contracts which conferred upon DFS exclusive rights for the sale and delivery of certain merchandise at the Guam International Airport Terminal (hereinafter referred to as “GIAT”) and by enforcing such contracts against the efforts of Plaintiff Pacific Gift Supply (hereinafter referred to as “PGS”) to deliver merchandise at the GIAT.

The Plaintiffs further allege that this conduct has harmed them and that it violates Sections 1, 2, and 3 of the Sherman Act, 15 U.S.C. §§ 1-3, 42 U.S.C. § 1983, 48 U.S.C. § 1471, the Fourth, Fifth, and Fourteenth Amendments to the Constitution of the United States, and the Commerce Clause, Article I, Section 8, Clause 3 of the Constitution of the United States. Jurisdiction is invoked by the Plaintiffs pursuant to 28 U.S.C. §§ 1331, 1337, and 1343; and 15 U.S.C. §§ 15 and 26.

On May 16, 1983, Plaintiff “PGS” filed a motion for partial summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure contending that the exclusive concession agreement between GAA and DFS and the enforcement of such agreement against the efforts of PGS to deliver merchandise at the GIAT violates Section 1 of the Sherman Act, 15 U.S.C. § 1, the Commerce Clause of the Constitution of the United States, the Equal Protection Clause of the Fourteenth Amendment to the Constitution, and “public policy”.

The Defendants filed a cross-motion for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure on May 19, 1983. The Defendants maintain that the exclusive contracts between GAA and DFS are lawful, reasonable and pro-competitive. The Defendants, in their memorandum in support of summary judgment, addressed every claim set forth by the Plaintiffs in their complaint. The Plaintiffs, however, have not only failed to address certain arguments of Defendants, but have limited their claims to the exclusive delivery rights conferred to DFS by the GAA. This court will, therefore, limit its decision to claims relating to the exclusive delivery rights issue and dismiss the following claims which were not addressed by the Plaintiffs:

1) Claims pursuant to 42 U.S.C. § 1983 and 48 U.S.C. § 1471.
2) Claims pursuant to the due process clauses of the Fifth and Fourteenth Amendments.
3) Claims pursuant to the Fourth Amendment.

On August 19, 1983, the Plaintiffs filed a motion to amend responses to requests for admissions. The court heard the motion to amend responses to requests for admissions, the Plaintiffs’ partial summary judgment motion and the Defendants’ motion for summary judgment on August 30, 1983. The Plaintiffs were represented by William M. Fitzgerald; the Defendant “DFS” was represented by Jay N. Fastow and William J. Blair; the Defendant “GAA” was represented by Richard Pipes; and the Defendant Government of Guam was represented by Margaret E. Bean, Assistant Attorney General. The Court denied Plaintiffs’ motion to amend admissions and took the other motions under advisement.

STATEMENT OF FACTS

The Department of Commerce of the Government of Guam directly managed and operated the GIAT until 1975. In 1975, the Guam Legislature enacted Public Law 13-57, entitled the “Guam Airport Authority Act”, creating the Guam Airport Authority (“GAA”), as a public corporation and autonomous instrumentality of the Government of Guam, to manage and operate the GIAT.

In 1967, the Government of Guam entered into an exclusive merchandise concession agreement with Jones & Guerrero Company with regard to the GIAT. In 1972, the exclusive merchandise concession agreement was assigned from Jones & Guerrero Company to DFS with the approval of the Government of Guam. In 1978, the GAA, by competitive bid, offered an exclusive concession at the GIAT for a term of fifteen (15) years with an option for the concessionaire to extend the coneession for an additional five years. At this same time, the GAA was also engaged in planning the financing and construction of a new air terminal at the Airport. The construction was to be financed through the sale of revenue bonds, which were to be entirely supported by the payments under the 1978 concession agreement.

The GAA publicized the availability of the concession in the Pacific Daily News, the local newspaper on Guam, and the Wall Street Journal and made the bid open to any party who could meet the following qualifications set forth by the GAA:

“... being in existence for 5 years, at least 3 years immediate prior experience operating similar airport concessions with annual volume $10 million and financial strength to provide unconditional minimum guarantee, advance cash deposit and start-up capital including all tenant improvements ... [with] [minimum acceptable guarantee [of] $15 million with 10 percent advance cash deposit____”

A few parties were interested in the exclusive concession but DFS submitted the highest bid (over $140,000,000.) and was awarded the exclusive concession at the GIAT. The concession agreement was executed between GAA and DFS on October 18, 1978. It should be noted that the Plaintiffs did not make a bid, did not object to the bid qualifications set forth by the GAA, and did not seek to influence the GAA to offer sale or delivery privileges on a nonexclusive basis.

On the basis of the guaranteed fees from DFS under the 1978 concession agreement, the GAA sold $43 million in revenue bonds in 1979. Using the funds it received from the sale of these bonds, the GAA began constructing a new terminal complex at the Airport in 1980. The new airport terminal was completed and opened for beneficial occupancy on January 20, 1982, at a cost to GAA in excess of $50 million.

The Plaintiff, PGS, has attempted on numerous occasions to deliver its merchandise to the airport terminal. At first, the Plaintiff would sell its merchandise and accept payment from the tourist and then deliver it to the airport and check it in. In April, 1976, an attorney for DFS informed the airlines that the pre-check-in procedure violated FAA rules and the airlines discontinued this practice. From April until August, 1976, the candy was sold to the tourist and paid for, then delivered to the airport and carried to the check-in counters by PGS employees. The tourist would then pick up the merchandise and check it in.

On June 7, 1976, S.T. Leon Guerrero, Acting Executive Manager of the GAA, sent a letter to Mr. Yosh Sakamoto advising him to “immediately cease delivery of any merchandise to departing passengers at GIAT”.

PGS continued the practice of delivering to the check-in counter between September, 1976, and February, 1977.

On February 2, 1977, David Tuncap, Executive Manager of the GAA, sent a letter to Mr. Yosh Sakamoto of PGS stating the following:

“It has again been brought to our attention that you are still delivering candy to departing passengers at the Guam International Air Terminal (GIAT). You were advised to cease delivery of any merchandise to departing passengers at GIAT by my June 7, 1976 letter which you received in August, 1977 [sic]. Therefore, I am again advising you to immediately cease delivery of any merchandise to departing passengers at GIAT. Furthermore, I have instructed our Operations Officers to evict you or your representative from the airport if you continue this practice.
To make myself perfectly clear, I will take all necessary measures under the law to protect the rights of tenants/concessionaires of the Guam Airport Authority (GAA).”

On the basis of Tuncap’s instructions, PGS discontinued deliveries to the airport and instead delivered to the hotels. Then the candy was placed on the tour bus and PGS employees would off-load the merchandise and carry it to the check-in counter. This practice continued through 1978 and until February, 1979.

On March 14, 1979, Manuel F.L. Guerrero, Executive Manager of GAA, sent a letter to Mr. Sakamoto requesting PGS to cease delivery of goods to passengers or would-be passengers at GIAT. Mr. Sakamoto was further informed that this regulation applied to everyone, not just PGS.

Subsequently, PGS requested that the tour agents and bus drivers assist the tourists with their merchandise at the GIAT. The tour agents and bus drivers were then compensated by PGS for their service.

A letter dated March 10, 1980, was sent by the attorney for GAA notifying the attorney for PGS that the GAA has the authority to prohibit Sakamoto or PGS employees from delivering candy to departing passengers at GIAT pursuant to § 100.3 of Rules and Regulations of the GAA and has the further right to eject Sakamoto or PGS employees from the airport premises pursuant to § 100.6(B) of the GAA Rules and Regulations if they continue such practices.

Subsequently, this lawsuit was filed by the Plaintiffs.

I. GOVERNMENTAL ACTION IMMUNITY

The Defendants maintain that the conduct challenged by the Plaintiffs, i.e., the granting and enforcing by the GAA of exclusive Airport merchandise delivery rights, is immune from antitrust scrutiny since such conduct is governmental action.

The State Action Immunity Doctrine

The Defendants initially contend that the conduct challenged by the Plaintiffs is immune from antitrust scrutiny under the Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943) “state action” immunity doctrine. In Parker, Id., the Supreme Court determined, after carefully reviewing the legislative history of the Sherman Act, that Congress intended the Act to restrain only private anticompetitive action, not state action directed by the legislature.

It appears that the Plaintiffs and the Defendants are in agreement that the challenged conduct in this case is governmental action. The Plaintiffs, however, reject the Defendants argument that the Parker “state action” immunity doctrine applies to the Territory of Guam. This Court is in agreement with the Plaintiffs that the Territory of Guam cannot be considered a state for the purposes of determining the applicability of the Antitrust laws. It is apparent that the principle of federalism underlies the “state action” immunity doctrine. As the Supreme Court stated in Parker, Id. at 351, 63 S.Ct. at 313,

“[i]n a dual system of government in which under the Constitution, the states are sovereign, save only as Congress may constitutionally subtract from their authority, an unexpressed purpose to nullify a state’s control over its officers and agents is not lightly to be attributed to Congress.”

Thus, since the Eleventh Amendment to the Constitution of the United States does not encompass unincorporated territories, the Territory of Guam lacks the sovereignty of a state.

The Federal Action Immunity Doctrine

The Defendants also maintain that all federal agencies and instrumentalities are absolutely immune from antitrust scrutiny. Sea-Land Service, Inc. v. Alaska Railroad, 659 F.2d 243, 244 (D.C.Cir., 1981), cert. denied, 455 U.S. 919, 102 S.Ct. 1274, 71 L.Ed.2d 459 (1982); Feldman v. Gardner, 661 F.2d 1295 (D.C.Cir., 1981) cert. granted, District of Columbia Court of Appeals v. Feldman, 458 U.S. 1105, 102 S.Ct. 3481, 73 L.Ed.2d 1365 (1982), and vacated on other grounds, 460 U.S. 462, 103 S.Ct. 1303, 75 L.Ed.2d 206 (1983); and Webster County Coal Corp. v. Tennessee Valley Authority, 476 F.Supp. 529, 532 (W.D.Kentucky, 1979). It follows that the Defendants then assert that the GAA and the Government of Guam are agencies and instrumentalities of the federal government and as such are absolutely immune from antitrust liability. The Plaintiffs, on the other hand, contend that the Territory of Guam should be treated as a municipality and, therefore, not entitled to antitrust immunity.

It is this Court’s determination that the Government of Guam and, indirectly, the GAA, are federal agencies and instrumentalities for the purposes of the Antitrust law and that their challenged conduct is immune from antitrust scrutiny. Pursuant to the Organic Act of Guam, 48 U.S.C. § 1421a and § 1423a, Congress expressly created the Government of Guam and authorized it to regulate all matters of local concern. The Government of Guam, acting as an agent and instrumentality of the Congress in this respect, created the GAA as “a public corporation and autonomous instrumentality of the Government of Guam” (§ 62001 of the Government Code of Guam) “to acquire, construct, reconstruct, purchase, extend, improve, better, operate and maintain airports and related facilities for civil aviation purposes on Guam”. § 62003 of the Government Code of Guam.

Although the Government of Guam granted the GAA broad discretionary powers, it is apparent to this Court that the Government of Guam was concerned with the financial stability of the Airport and expressly limited and restricted the GAA’s authority in this particular area. First, the Government of Guam enacted a comprehensive statutory scheme to authorize and encourage the issuance of revenue bonds. § 62100 et seq. of the Government Code of Guam. Second, the Government authorized and required the GAA to “manage and operate the Airport in the most efficient manner consistent with the protection of the bondholder” and “to keep the Airport on a self-sustaining basis”. §§ 62010 and 62114 of the Government Code of Guam. It is obvious that the main concern of the Government of Guam was to ensure the protection of the bondholder and financial stability of the Airport. In order to assure this necessary protection and stability, after consultation with its financial advisors, the GAA determined that it had to have guaranteed income from a merchandise concession for 15-20 years. (See affidavit of R.M. Stone at p. 4.) It is, therefore, apparent to this Court that the GAA was acting in accordance with the mandate of the Government of Guam when it entered into the exclusive Airport merchandise concession agreement with DFS. As previously stated, DFS submitted the highest bid, over $140,000,000, in guaranteed concession fees for a period of 15 years, (with an option for DFS to extend for an additional five years) and on the basis of such guaranteed fees the GAA was able to sell $43 million in revenue bonds to finance the construction of the new terminal complex at the Airport. If it were not for the exclusive nature of the concession, no firm would have bid the amount bid by DFS to secure the revenue bonds. (See affidavit of R.M. Stone, at p. 5.)

In addition, it is obvious that the Government of Guam contemplated the granting of the exclusive airport concession by GAA since the policy of exclusive merchandise concessions at the Airport has been continually and specifically approved by the Government of Guam. In 1967, the Government of Guam originally adopted the policy of exclusivity when it directly operated the airport and conferred exclusive concession rights to J & G Company. In 1972, the Government of Guam reaffirmed its policy of exclusivity by assigning the exclusive merchandise concession agreement from J & G Company to DFS. Finally, in 1979, at the request of the Governor, the Government of Guam, impliedly approved the policy of exclusive Airport delivery rights by adopting Resolution I-S, in which it expressed its approval of the GAA’s amendment of the exclusive concession agreement with DFS and authorized the sale of bonds which would be supported by revenues accruing under such agreement.

Thus, it is clear to this Court that with respect to the conduct challenged by the Plaintiffs, the GAA was acting as the alter ego of the Government of Guam in its capacity as a federal agency and instrumentality and is to be afforded the same immunity from the Antitrust laws.

The Court feels the need at this time to distinguish the case of Hecht v. Pro Football, Inc., 444 F.2d 931 (D.C.Cir., 1971), cert. denied, 404 U.S. 1047, 92 S.Ct. 701, 30 L.Ed.2d 736 (1972), upon which the Plaintiff has placed great reliance. In Hecht, the District of Columbia Armory Board was established by the Department of the Interior to provide a stadium for District of Columbia sports teams. The Board entered into a contract with the Redskins containing a restrictive covenant prohibiting the use of the stadium by any professional football team other than the Redskins for a period of 30 years. The United States Court of Appeals for the District of Columbia Circuit held that the Armory Board was not immune from antitrust liability. The Plaintiffs analogize Washington, D.C. to Guam and the Armory Board to the Guam Airport Authority. The Plaintiffs maintain that Washington, D.C. and the Territory of Guam are both local governments created by the United States Congress and that both the D.C. stadium Board and the GAA are local instrumentalities set up to administer public facilities under those local governments. Therefore, the Plaintiffs contend that the actions of the Government of Guam and GAA are not immune from antitrust liability.

A more recent case from the D.C. Circuit, however, has held that acts of the local Court of Appeals were immune from the antitrust laws, because that court was “plainly a federal instrumentality”. Feldman v. Gardner, supra at 1307. The Feldman court distinguished and clarified its holding in Hecht, stating that the Armory Board was not immune from antitrust liability since it was commissioned to operate the stadium as a private venture.

The operation of the GIAT by the GAA can certainly not be characterized as the operation of a private venture. The GIAT is the only commercial airport on the island of Guam providing essential air service to the people of Guam. Additionally, tourism is a major industry on Guam and the airport system is essential to the tourism industry and its expansion. Thus, it is evident that the people of Guam are dependent upon the GIAT for their economic well-being and that the GAA as a public authority maintains and operates the GIAT in the best interest of the public.

With regard to the actions of DFS in relation to the immune conduct of the GAA and the Government of Guam, it is the determination of this Court that such actions of DFS also fall outside the purview of the Sherman Act’s prohibition. Medical Association of the State of Alabama v. Schweiker, 554 F.Supp. 955, 966 (N.D.Alabama, 1983).

Thus, the challenged conduct of the GAA, the Government of Guam and DFS is immune from antitrust scrutiny.

The Noerr-Pennington Doctrine

The Noerr-Pennington doctrine provides that the efforts of private persons to influence the operation of government for their own economic advantage are immune from the operation of the antitrust laws. Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961); United Mine Workers of America v. Pennington, 381 U.S. 657, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965); and California Motor Transport Company v. Trucking Unlimited, 404 U.S. 508, 510, 92 S.Ct. 609, 30 L.Ed.2d 642 (1972).

The Plaintiffs agree that the NoerrPennington doctrine immunizes lobbying efforts, but contend that this case is not covered by the doctrine since it involves a conspiracy between DFS and GAA evidenced by a written agreement which re-suits in a restraint of trade. The Defendants reply that the claims filed against DFS by the Plaintiffs relate only to allegations that it influenced the GAA to execute and enforce the exclusive merchandise agreements.

Paragraph 21 of the Plaintiffs’ Amended Complaint states:

“The aforesaid conspiracy consisted of a continuing agreement ... to obtain an exclusive dealing arrangement for concession sales and deliveries at the Airport, and to prohibit such sales and deliveries by any party other than Defendant Duty Free.”

It appears to this Court that Paragraph 21 of the Plaintiffs’ Amended Complaint sets forth exactly the type of efforts which are immune from antitrust scrutiny pursuant to the Noerr-Pennington doctrine. It is, therefore, the determination of this Court that even if DFS engaged in such efforts it is immune from antitrust liability.

However, as evidenced by the affidavit of R.M. Stone, the exclusivity of the Concession Agreement resulted from the GAA’s unilateral decision to offer such sale and delivery rights on an exclusive basis. Thus, there was no active government involvement in restraint of trade, no concerted action and, therefore, no violation of Section 3 of the Sherman Act. United States v. Colgate & Company, 250 U.S. 300, 39 S.Ct. 465, 63 L.Ed. 992 (1919).

II. STANDING

In addition to the challenged conduct of the GAA, the Government of Guam and DFS being exempt from antitrust scrutiny on the basis of the federal action immunity and the Noerr-Pennington doctrine, this Court further concludes that the Plaintiffs do not have standing to bring this action.

Title 15 U.S.C. § 15(a) (Section 4(a) of the Clayton Act) states as follows:

"... any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor in any district court of the United States in the district in which the defendant resides or is found or has an agent, without respect to the amount in controversy, and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney’s fee.”

In order to have standing under § 15, the Plaintiff must establish injury to his business or property that occurred by reason of an antitrust violation. The Plaintiff must further show that the loss to his business or property was caused by the alleged antitrust violation. Solinger v. A & M Records, Inc. 586 F.2d 1304, 1308-09 (9th Cir., 1978), cert. denied, 441 U.S. 908, 99 S.Ct. 1999, 60 L.Ed.2d 377 (1979).

Legal Injury to Business or Property

The GAA and the Government of Guam are fully empowered to regulate the commercial use of the Airport. In fact, without written permission from GAA, it is unlawful for anyone to use Airport premises for commercial purposes. Sections 3030.3 and 3039.5 of the GAA Rules and § 62013 of the Government Code of Guam. As the Plaintiffs admit, they have never received permission from GAA or the Government of Guam to sell or deliver goods at the Airport. Thus, the Plaintiffs, by reason of the exclusive merchandise concession agreements and their enforcement, have not been deprived of any legal right which they had previously and thus cannot claim any legal injury to their businesses or property.

Furthermore, the Plaintiffs have no right to conduct their businesses on others’ property, [Donovan v. Pennsylvania Company, 199 U.S. 279, 26 S.Ct. 91, 50 L.Ed. 192 (1905) and Export Liquor Sales, Inc. v. Ammex Warehouse Company, Inc., 426 F.2d 251 (6th Cir., 1970), cert denied, 400 U.S. 1000, 91 S.Ct. 460, 27 L.Ed.2d 451 (1971) ] and no right to deal with the GAA or the Government of Guam. See Perkins v. Lukens Steel Co., 310 U.S. 113, 60 S.Ct. 869, 84 L.Ed. 1108 (1940).

Additionally, the GIAT is not, as the Plaintiffs contend, a facility which is essential to the ability of the Plaintiffs to conduct their businesses. As noted in Hecht v. Pro Football, Inc., 570 F.2d 982, 993 n. 45 (D.C.Cir., 1977), cert. denied, 436 U.S. 956, 98 S.Ct. 3069, 57 L.Ed.2d 1121 (1978), a facility is essential to the ability of competitors to do business, where, without access to that facility, “all possible competition is by definition excluded”. As evidenced by the Plaintiffs’ admissions, they have businesses and have been able to conduct such businesses and earn profits without the use of the Airport to make their commercial deliveries. To permit the Plaintiffs to use the Airport to make their commercial deliveries is certainly not essential to their businesses; it would merely provide an added convenience to their customers.

Thus, the Plaintiffs have failed to establish any legal injury to their businesses. Antitrust Injury

The second element necessary to establish standing is that a Plaintiff must show an antitrust injury, i.e., that he has been injured by a decrease in competition. Associated General Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S. 519, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983). As the Defendants correctly argue, no one has the right to do business at GIAT without the written permission of the GAA; so by the GAA granting the DFS concession, competition has actually increased the sale of merchandise in Guam since such sale and delivery services provided by DFS at the Airport would have been non-existent. It must be emphasized that the Plaintiffs are being denied the use of the GIAT for collateral non-transportation purposes, i.e., to make commercial deliveries. They are not being deprived of the use of the GIAT for transportation purposes.

Thus, there has been no antitrust violation or injury.

Causal Nexus between Antitrust Violations and Injury

The Plaintiffs have failed to convince this Court that their purported injury was the result of the alleged unlawful conduct. When the 1967 concession agreement was awarded by the Government of Guam, the Plaintiffs’ businesses were nonexistent. In 1978, it was the unilateral decision of GAA, pursuant to its statutory authority, to grant an exclusive concession to insure the financial stability of the airport and the protection of the bondholders. Additionally, it was the Plaintiffs’ failure in 1978 to offer bids or to submit proposals to the GAA in an attempt to influence the GAA to alter the terms of the exclusive concession.

Moreover, it is evident that the Plaintiffs do not have the financial ability to meet the 1978 bid qualifications established by the GAA for the exclusive airport concession and, therefore, are not able to engage in the business from which they maintain they were excluded.

Thus, the Plaintiffs have failed to establish a causal nexus between the alleged antitrust violation and the purported injury.

ALLEGED UNLAWFUL CONDUCT IS REASONABLE

In order for a restraint of trade to be in violation of the antitrust laws, it must be “unreasonable” and anticompetitive. Ron Tonkin Gran Turismo, Inc. v. Fiat Distributors, Inc., 637 F.2d 1376, 1381 (9th Cir., 1981), cert. denied 454 U.S. 831, 102 S.Ct. 128, 70 L.Ed.2d 109 (1981) and A.H. Cox & Company v. Star Machinery Company, 653 F.2d 1302, 1305 (9th Cir., 1981). There are two rules which courts apply to determine whether conduct is unreasonable or anticompetitive. The first rule is the per se rule, i.e., that the conduct is unreasonable per se. The second rule is the rule of reason. Ron Tonkin, supra.

When a court applies the rule of reason test, it inquires as to the effect the challenged conduct has on competition. Ron Tonkin, supra, at 1388. If, however, the court identifies conduct which has been held to be unreasonable per se, it is barred from inquiring as to its reasonableness. In order for conduct to be conclusively presumed to be unreasonable, it must have a pernicious effect on competition and lack any redeeming virtue. Northern Pacific Railway Co. v. United States, 356 U.S. 1, 5, 78 S.Ct. 514, 518, 2 L.Ed.2d 545 (1958).

The Plaintiffs maintain that the challenged conduct in the case at bar is unreasonable per se. This Court does not agree. First, there is a need to distinguish between horizontal restraints and vertical restraints. A horizontal restraint is an agreement between competitors to refuse to deal with one or more persons, while a vertical restraint involves combinations of parties on different levels of the distribution system. It has been held that horizontal restraints are unreasonable per se. Ron Tonkin, supra.

The Plaintiffs do not contend that the challenged conduct amounts to a horizontal restraint but they do contend that the challenged conduct is unreasonable per se since it is a vertical restraint that has the presence of a horizontal element. In other words, the Plaintiffs contend that through the concerted action of DFS and the GAA, the GAA has refused to deal with the Plaintiffs (competitors of DFS) and, hence, the per se rule should be applied. This Court, however, must reject this argument. As previously mentioned, the exclusivity of the Airport concession agreement did not result from concerted action between DFS and the GAA, but from the unilateral decision of the GAA to offer sale and delivery rights on an exclusive basis. Even if this Court infers that DFS and the GAA acted in concert, this Court is only justified in applying the per se rule if “the challenged conduct clearly had, or was likely to have, a pernicious effect on competition and lacked any redeeming virtue.” Ron Tonkin, supra at 1387. Such is not the case. It has already been stated in this decision that competition has actually been increased by the GAA permitting DFS to conduct business on the GIAT premises and that the exclusive concession agreement was essential to the financial stability of the Airport and benefits the tourism industry and the economy of the people of Guam.

Furthermore, the exclusive concession agreement is reasonable as a matter of law because it was offered pursuant to an open and fair competitive bid. Parmelee Transportation Co. v. Keeshin, 292 F.2d 794 (7th Cir., 1961) cert. denied, 368 U.S. 944, 82 S.Ct. 376, 7 L.Ed.2d 340 (1961) and Bustop Shelters, Inc. v. Convenience & Safety Corp., 521 F.Supp. 989, 997 (S.D.N.Y., 1981).

III. THE STATUTE OF LIMITATIONS AND THE DOCTRINE OF LACHES

Finally, this Court determines that all claims filed by the Plaintiffs are barred by the four-year statute of limitations pursuant to 15 U.S.C. § 15b (Section 4B of the Clayton Act) and the doctrine of laches.

Title 15 U.S.C. § 15b states as follows: “§ 15b. Limitation of actions.
Any action to enforce any cause of action under sections 15, 15a, or 15c of this title shall be forever barred unless commenced within four years after the cause of action accrued____”

It should also be noted that the above four-year statute of limitations period has been used by the Ninth Circuit as a guideline for the computation of the laches period in antitrust suits. Aurora Enterprises v. National Broadcasting Co. 688 F.2d 689, 694 (9th Cir., 1982).

Statute of Limitations

The Defendants maintain that the Plaintiffs’ cause of action accrued in 1976 or at least in 1977, the date of the Defendants’ final refusal to deal with the Plaintiffs, and thus, this action is barred by the four-year statute of limitations. In a case such as this, where the Plaintiffs’ claim is based upon the Defendants’ refusal to deal with it, i.e., to allow Plaintiffs the right to sell or deliver at the airport terminal, the Plaintiffs’ cause of action accrued at the time the Defendants made a final refusal to deal and no new or continuing claims are created by subsequent iterations of that refusal to deal. In Re Multi-district Vehicle Air Pollution, 591 F.2d 68 (9th Cir., 1979), cert. denied, 444 U.S. 900, 100 S.Ct. 210, 62 L.Ed.2d 136 (1979) and David Orgell, Inc. v. Geary’s Stores, Inc., 640 F.2d 936, 938 (9th Cir., 1981), cert. denied sub. nom. David Orgell v. Josiah Wedgwood & Sons, 454 U.S. 816, 102 S.Ct. 92, 70 L.Ed.2d 84 (1981).

As evidenced by the Plaintiffs’ complaint (Paragraph 22(b) and (m) of Plaintiffs’ amended complaint), and the letter from S.T. Leon Guerrero, the Acting Executive Manager of the GAA, to Mr. Sakamoto dated June 7, 1976, the Plaintiffs have known since sometime prior to December, 1976, that their deliveries to the Airport were prohibited by the GAA. Even if Plaintiffs did not recognize the 1976 refusal to deal as absolute and final, it is evident that they recognized the refusal to deal as final in 1977. As stated in paragraph 22(c) of their complaint “... GAA forced Pacific Gift Supply to cease making delivery of any merchandise to departing passengers at the Airport in February, 1977”. The 1977 final refusal to deal is further evidenced by the letter from David Tuncap, Executive Manager of GAA, to Mr. Y. Sakamoto, Pacific Gift Supply Company, dated February 2, 1977, in which the following was stated:

“It has again been brought to our attention that you are still delivering candy to departing passengers at the Guam International Air Terminal (GIAT). You were advised to cease delivery of any merchandise to departing passengers at GIAT by my June 7, 1976 letter which you received in August, 1977 [sic]. Therefore, I am again advising you to immediately cease delivery of any merchandise to departing passengers at GIAT. Furthermore, I have instructed our Operations Officers to evict you or your representative from the airport if you continue this practice.
“To make myself perfectly clear, I will take all necessary measures under the law to protect the rights of tenants/concessionaires of the Guam Airport Authority (GAA)

Thus, the Plaintiffs’ cause of action arose at least by 1977 and its claim filed in February, 1982, is barred by the four-year statute of limitations.

The Plaintiffs argue that their cause of action accrued in October, 1978, the date that the exclusive concession agreement between DFS and GAA was executed and thus is still within the four-year statute of limitations period. This Court does not agree. The Defendants’ final refusal to deal was expressed at least by 1977, and the offer of the new exclusive airport concession in 1978 in no way detracted from its finality since the policy of exclusive airport concessions at the Airport has been continually and specifically approved and enforced by the Government of Guam and the GAA since 1967. Thus, the Plaintiffs had no reason to believe that the 1978 airport concession agreement would not be in conformity with the policy of exclusivity adopted by the GAA and the Government of Guam.

The Plaintiffs also contend that since they were hopeful of a work-out arrangement through March, 1980, their cause of action did not accrue until that time. This Court rejects this contention on the basis that the Plaintiffs cannot toll the running of the statute of limitations by claiming that they still had a hope of dealing with the Defendants. Orgell, Inc., supra.

Doctrine of Laches

The Court also feels that this is an appropriate case to invoke the application of the doctrine of laches since the Defendants have been prejudiced by the five-year delay of the Plaintiffs in bringing this suit. More specifically, the Plaintiffs could have filed their suit prior to 1978, or in 1978 when the new airport concession agreement was up for bid. However, the Plaintiffs chose to wait until after DFS guaranteed fees in the amount of $140,000,000 in the concession agreement, the GAA sold $43 million in revenue bonds in 1979 supported by the fees from the concession agreement, the GAA began to build a new airport terminal complex in 1980, and the new terminal complex was completed in 1982 at a cost in excess of $50 million to the GAA. It would be inequitable to permit the Plaintiffs to attempt to invalidate the concession agreement at this time after such a lengthy delay and after having allowed the Defendants to act in substantial reliance on the validity of such concession agreement.

IV. COMMERCE CLAUSE

The Plaintiffs also maintain that the restriction on deliveries to the Airport is an unreasonable burden on interstate commerce in violation of the Commerce Clause, Article I, Section 8, Clause 3, of the United States Constitution. This Court determines that there is absolutely no merit to this contention since Article I, Section 8, Clause 3 of the United States Constitution has not been extended to Guam. 48 U.S.C. § 1421b(u).

However, even if the Commerce Clause were extended to Guam, it is this Court’s decision that the alleged conduct of the Defendants does not constitute an unreasonable burden on interstate commerce in violation of the Commerce Clause since, as previously mentioned, the Plaintiffs have no right to conduct their businesses at the airport terminal. Also, the fact that the GAA has permitted DFS to do business at the airport terminal has actually facilitated commerce. The guaranteed concession fees have provided the necessary revenues for the construction, maintenance and operation of the airport thus benefiting the tourism industry and the economic well-being of the people of Guam.

Additionally, since this Court has determined that the alleged conduct is immune from Sherman Antitrust scrutiny under the federal immunity doctrine, such conduct cannot be found to violate the Commerce Clause. The Congress in enacting the Sherman Antitrust Act has exercised its plenary commerce power to its fullest extent. McClain v. Real Estate Board of New Orleans, Inc., 444 U.S. 232, 241, 100 S.Ct. 502, 62 L.Ed.2d 441 (1979) and United States v. American Building Maintenance Industries, 422 U.S. 271, 278, 95 S.Ct. 2150, 45 L.Ed.2d 177 (1975). Thus, it follows that if the federal immunity doctrine is applicable to Sherman Act claims it is also applicable to a claim under the Commerce Clause. See Western & Southern Life Insurance Co. v. State Board of Equalization of California, 451 U.S. 648, 653, 101 S.Ct. 2070, 68 L.Ed.2d 514 (1981).

V. EQUAL PROTECTION

Section 100.3 of the GAA rules and regulations states as follows:

“No person shall carry on any commercial activity at the airport without the written consent of the authority.”

The Plaintiffs maintain that the granting of the exclusive delivery rights to DFS was an arbitrary and capricious application of the regulation by the GAA which has created an invidious discrimination by denying use of the GIAT to one business while granting it to another in violation of the Equal Protection Clause of the Fourteenth Amendment to the U.S. Constitution.

This argument must fail since the Plaintiffs have no right to conduct their businesses at the airport terminal and the exclusive concession agreement was granted pursuant to a fair and competitive bidding procedure. The Plaintiffs were not discriminated against; they merely failed to seek the exclusive concession when it was offered and further failed to offer a proposal to the GAA concerning the granting of non-exclusive delivery privileges.

Moreover, the equal protection law will not reach a situation where a government is engaged in economic regulation that is rationally related to a legitimate governmental interest. City of New Orleans v. Dukes, 427 U.S. 297, 96 S.Ct. 2513, 49 L.Ed.2d 511 (1976) and Benson v. Arizona State Board of Dental Examiners, 673 F.2d 272 (9th Cir., 1982).

In the case at bar, the granting of the exclusive airport concession by the GAA pursuant to its statutory authority passes the rationality test. The purpose of the exclusive concession was to maximize Airport revenues to expand and improve the operations of the Airport and ensure the financial stability of the Airport, thereby promoting the tourism industry and the economic well-being of the Territory of Guam. This Court concludes that the GAA and the Government of Guam could reasonably decide that in order to expand and improve the operations of the GIAT, keep the airport on a self-sustaining basis and protect its bondholders, that it needed to grant an exclusive merchandise concession agreement with guaranteed income from such concession for a period of at least 15 to 20 years to a party who could meet the bid qualifications set forth by the GAA. supra, pp. 384-385.

Thus, this Court determines that there is no denial of equal protection since the judgments of the GAA and the Government of Guam are rationally related to a legitimate governmental interest.

CONCLUSION

There being no material issue of fact in dispute, it is the determination of this Court that the Defendants are entitled to their motion for Summary Judgment as a matter of law. To hold otherwise would result in a substantial loss of guaranteed concession fees for the GIAT which, in turn, would have a devastating effect on the financial stability of GIAT, GAA’s ability to operate, maintain and improve the Airport, tourism, the economy of Guam, and the people of Guam.

Thus, Plaintiffs’ Partial Motion for Summary Judgment is denied and the Defendants’ Motion for Summary Judgment is granted.

So Ordered.

      . The Amended Complaint was originally filed by six plaintiffs. However, the Court dismissed with prejudice the claims of three of those plaintiffs — Hakubotan, Inc., Jenny’s Fashion, Inc., and Para Para, Inc. — by a court order dated January 10, 1983, for refusal to respond to DFS’ First Set of Interrogatories and First Request of Production of Documents dated June 25, 1982.

      . Since this Court has determined that the Territory of Guam cannot be considered a State within the context of the Antitrust laws, it will not address the two-prong test applied to independent political subdivisions of a State set forth in California Retail Liquor Dealers' Assn. v. Midcal Aluminum, Inc., 445 U.S. 97, 105, 100 S.Ct. 937, 943, 63 L.Ed.2d 233 (1980).
      i.e., (a) "the challenged restraint must be one clearly articulated and affirmatively expressed as state policy,” and
      (b) "the policy must be actively supervised by the State itself".

      . Section 1421b(u) of Title 48 U.S.C.A. states in pertinent part as follows:
      “(u) The following provisions of and amendments to the Constitution of the United States are hereby extended to Guam to the extent that they have not been previously extended to that territory and shall have the same force and effect there as in the United States or in any State of the United States: article I, section 9, clauses 2 and 3; article IV, section 1 and section 2, clause 1; the first to ninth amendments inclusive; the thirteenth amendment; the second sentence of section 1 of the fourteenth amendment; and the fifteenth and nineteenth amendments.”

      . If there is an interruption or loss of any of the concessionaire's exclusive rights for a period in excess of sixty (60) days, the guaranteed fee to GAA in the amount of $140,000,000 will be reduced to an amount in no event greater than $74.1 million. Concession Agreement dated October 18, 1978, §§ 1.06, 7.01(e) and 7.02(b).