166 F.3d 509 (2nd Cir. 1999), 97-9295, Bogan v. Hodgkins

Docket Nº:Docket No. 97-9295
Citation:166 F.3d 509
Party Name:Robert BOGAN and Scott Bogan, Plaintiffs-Appellants, v. Austin E. HODGKINS, Jr., Defendant-Appellee, Northwestern Mutual Life Insurance Company, Defendant.
Case Date:February 02, 1999
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit

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166 F.3d 509 (2nd Cir. 1999)

Robert BOGAN and Scott Bogan, Plaintiffs-Appellants,


Austin E. HODGKINS, Jr., Defendant-Appellee,

Northwestern Mutual Life Insurance Company, Defendant.

Docket No. 97-9295

United States Court of Appeals, Second Circuit

February 2, 1999

        Argued April 22, 1998.

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        Michael S. Devorkin (Doar Devorkin & Rieck, New York, NY), for Plaintiffs-Appellants.

        Timothy P. Coon (Bleakley Platt & Schmidt, White Plains, NY), for Defendant-Appellee.

        Before: WALKER and CALABRESI, Circuit Judges, and RESTANI, [*] Judge.

        RESTANI, Judge:

        This is an appeal from a partial final judgment and order of the District Court for the Southern District of New York, Conner, J., granting the motion of Robert and Scott Bogan ("the Bogans" or "plaintiffs") to reconsider its prior opinion, Bogan v. Northwestern Mut. Life Ins. Co., 953 F.Supp. 532 (S.D.N.Y.1997). The District Court vacated its judgment entered February 6, 1997, and (i) adhered to its prior decision granting partial summary judgment dismissing the Bogans' antitrust claims under Section 1 of the Sherman Anti-Trust Act, 15 U.S.C. § 1 (1994) [hereinafter the "Sherman Act"], against Austin E. Hodgkins, Jr.; (ii) vacated that part of its prior opinion, and reserved decision on the exercise of supplemental jurisdiction over various state law claims against

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Hodgkins and Northwestern Mutual Life Insurance Company ("NML") pending a decision on this appeal of the dismissal of the antitrust claims; (iii) denied in all other respects the Bogans' motion to vacate and amend the prior judgment; and (iv) directed entry of a partial final judgment, pursuant to Fed.R.Civ.P. 54(b).

        Plaintiff-appellants contend that the District Court erred in granting partial summary judgment dismissing their antitrust claims against Hodgkins. 1 Defendant-appellees defend the District Court's grant of summary judgment but argue that the District Court erred in finding that defendants had the capacity to conspire and that the dispute was not exempt from antitrust enforcement under the McCarran-Ferguson Act, 15 U.S.C. § 1013 (1994).


        This court has jurisdiction under 28 U.S.C. § 1291 (1994).

Standard of Review

        This court reviews a grant of summary judgment de novo. Aslanidis v. United States Lines, Inc., 7 F.3d 1067, 1072 (2d Cir.1993). Summary judgment is appropriate "[w]here the record taken as a whole could not lead a rational trier of fact to find for the non-moving party." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). We determine whether there are disputed facts after resolving "all ambiguities and draw[ing] all factual inferences in favor of" the non-movant. A.F.A. Tours, Inc. v. Whitchurch, 937 F.2d 82, 89 (2d Cir.1991).


The Insurance Company

        Northwestern Mutual Life Insurance Company operates in the New York metropolitan area through a multi-tiered structure of independent contractor insurance agents with exclusive contracts; agents have the exclusive NML policy franchise and may sell policies for other carriers only after granting NML a right of first refusal. NML contracts with six General Agents, who in turn contract with Special Agents and with District Agents, who contract with Soliciting Agents. 2 General Agents for NML usually have exclusive territories, but six General Agents share the New York area.

        Agents are compensated by commission on policy writings and renewals according to their structural position in the NML hierarchy. Thus, General and District Agents receive an override commission on the commissions paid to Sales Agents contracted to them. The rates of compensation are incorporated into the agents' contracts and reflect a uniform commission and fee schedule used by all NML agents in each tier. Actual policy terms and premiums are established by NML. General Agents pay for recruiting and training their own District and Sales Agents.

The Metropolitan Agreement and NML Transfer Restriction Policy

        What plaintiffs refer to as the "Metropolitan Agreement" ("the Agreement") is an agreement among NML General Agents not to recruit and hire each others' existing District or Sales Agents without the consent of the agent's current General Agent. According to Hodgkins, agent transfer restrictions initially were determined by "whatever the general agents agreed upon." A senior NML vice president characterized the Agreement as "among the general agents." At some point, the Agreement was reduced to a writing entitled the "Agreement for Open Territory for Both Solicitation and Development of the New York Metropolitan Area," providing that "[t]ransfer of agents between the General Agents will not be permitted."

        NML literature referred to "friendly agreements" between NML General Agents which "restrict Agents from transferring from one agency to another within [a] metropolitan area," adding that exceptions are

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made "by the mutual agreement of the General Agents involved." NML's legal staff, aware of the possibility that "a no-transfer policy can be considered to be a boycott or a refusal to deal," expressed concern about the antitrust implications of such agreements--that is, about "whether the 'no transfer' rule is effectively a restraint of trade." NML has made various references to the Agreement as an agreement of or among the General Agents.

        In November 1989, NML met with the General Agents to discuss the transfer restriction policy, issuing a memo regarding the meeting entitled "New York Metropolitan Agreement." By December 1989, NML was referring to the Agreement as "Company Policy." NML viewed its own potential participation in the Agreement as arbitrating disputes over transfers.

The Bogans

        Robert Bogan began his relationship with NML as a Sales Agent in 1976. In 1987, he became a District Agent, under Hodgkins' General Agency. Robert Bogan claims to have been a very successful District Agent, ranked fourth out of 300 nationwide. He also purports to have invested $1.5 million in the development and improvement of his District Agency. He asserts that during his tenure as District Agent, the District Agency increased from three to fifteen agents, while annual sales increased...

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