Reibert v. Atlantic Richfield Company

• Citation: 471 F.2d 727
• Decision Date: 08 January 1973
• Docket Number: No. 72-1283.,72-1283.
• Parties: Delbert C. REIBERT, Individually and on Behalf of employees of the previously existing Sinclair Oil Corporation, et al., Plaintiffs-Appellants, v. ATLANTIC RICHFIELD COMPANY and Sinclair Oil Corporation, Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)

471 F.2d 727 (1973)

Delbert C. REIBERT, Individually and on Behalf of employees of the previously existing Sinclair Oil Corporation, et al., Plaintiffs-Appellants, v. ATLANTIC RICHFIELD COMPANY and Sinclair Oil Corporation, Defendants-Appellees.

No. 72-1283.

United States Court of Appeals, Tenth Circuit.

Argued and Submitted September 11, 1972.

Decided January 8, 1973.

Certiorari Denied April 16, 1973.

Stan P. Doyle, Tulsa, Okl., for plaintiffs-appellants.

Otis Pratt Pearsall, New York City (Richard B. McDermott and Donald E. Hammer, Tulsa, Okl., Jerome G. Shapiro, John A. Donovan and Donald A. Bright, New York City, on the brief), for defendants-appellees.

Before PHILLIPS, HILL and HOLLOWAY, Circuit Judges.

Certiorari Denied April 16, 1973. See 93 S.Ct. 1900.

HILL, Circuit Judge.

This is an appeal from an order by the United States District Court for the Northern District of Oklahoma granting defendants-appellees summary judgment on their motion to dismiss plaintiffs-appellants' suit for violations of Sherman Act, § 1 (15 U.S.C. § 1) and Clayton Act, § 7 (15 U.S.C. § 18).

Appellant Reibert had been employed by Sinclair since 1952. Originally employed as a draftsman, he subsequently held various jobs and was working as a research technician at the time of his termination. The circumstances surrounding his discharge began when Atlantic Richfield Company and Sinclair reached a preliminary agreement to merge. Approval by the boards of directors was forthcoming, and finally adoption by the stockholders.

The merger was temporarily halted when the Department of Justice commenced an action against Atlantic and Sinclair in the United States District Court for the Southern District of New York challenging the merger under Section 7 of the Clayton Act. The complaint charged the merger might substantially lessen competition or create a monopoly in the selling of gas in four geographic regions. Ultimately Sinclair was forced to divest itself of all marketing properties in the northeastern and southeastern states.

Once the court accepted Sinclair's divestiture, the merger was consummated. Shortly thereafter, Reibert was discharged. No evidence has been submitted intimating that appellant's discharge was for any reason other than the duplication in jobs occasioned by the merger. The merger's reverberations caused 4000 employees to be terminated or forced into early retirement within one year of consolidation. Appellant filed this class action on behalf of all employees and the employment agencies which regularly had provided temporary help to Atlantic Richfield and Sinclair.

Appellant alleges, inter alia, that Atlantic and Sinclair entered into a mutual merger agreement which is in restraint of trade, in violation of Section 1 of the Sherman Act. Atlantic's acquisition of Sinclair also violated Section 7 of the Clayton Act in that it might substantially lessen competition or tend to create a monopoly in the petroleum industry. Treble damages were sought under Section 4 of the Clayton Act (15 U.S.C. § 15) and injunctive relief under Section 16 (15 U.S.C. § 26) of the same Act.

On December 1, 1969, appellant filed a motion for summary judgment seeking to dispose of certain legal issues, including standing of employees to sue. The trial judge denied this motion. Atlantic subsequently filed a motion for summary judgment on the issue of standing which was sustained on grounds that: (1) appellant's injury, if any, was too indirect to be actionable under Clayton Act, § 4; and (2) appellant was not injured in his business or property by anything forbidden by antitrust laws.

Numerous issues were raised by appellant on appeal, but our decision that he lacks standing is dispositive; therefore no attempt will be made to answer the other issues.

Appellant asserts that employees have standing to sue whenever the effect of an illegal merger is to injure them. The issue boils down to whether or not antitrust laws are directed toward employees injured by an alleged illegal merger.¹

"Directness of injury" has been a phrase confronting the courts on numerous occasions. For example, our own court, in Nationwide Auto Appraiser Service Co. v. Association of C. & S. Co., 382 F.2d 925 (10th Cir. 1967), determined that a franchiser complaining of an antitrust combination directed at its franchisee suffered only "indirect" or "remote" damages. See also Billy Baxter, Inc. v. Coca-Cola Co., 431 F.2d 183 (2d Cir. 1970), cert. denied, 401 U.S. 923, 91 S.Ct. 877, 27 L.Ed.2d 826. A non-operating landlord of theaters allegedly used by its tenant and various motion picture distributors and exhibitors in furtherance of an antitrust conspiracy to restrain the trade of competing distributors and exhibitors has been denied standing for failure to come within the "target area" of the alleged conspiracy. Calderone Enter. Corp. v. United States Theatre Circuit, 454 F.2d 1292 (2d Cir. 1971). Standing has been denied a patent owner charging derivative harm from a conspiracy directed against its licensees. Productive Inventions, Inc. v. Trico Products Corp., 224 F.2d 678 (2d Cir. 1955), cert. denied, 350 U.S. 936, 76 S.Ct. 301, 100 L.Ed. 818 (1956). Stockholders of a corporation are not within the protected area merely because an unlawful conspiracy has caused injury to the corporation. Campo v. National Football League, 334 F.Supp. 1181 (E.D.La.1971); Ash v. International Business Machines, Inc., 353 F.2d 491 (3d Cir. 1965); Former Stockholders of Barr Rubber Products Co. v. McNeil Corp., 325 F.Supp. 917 (N.D.Ohio 1970), aff'd mem., 441 F.2d 1169 (6th Cir. 1971). Neither is a creditor suing to recover damages to his debtor's business within the antitrust laws' area of protection. Walder v. Paramount Publix Corp., 132 F.Supp. 912 (S.D.N.Y.1955).

Standing to sue by employees presents yet another class seeking relief under Clayton Act, §§ 4 and 16. Appellant contends he satisfies the directness test propounded in Nationwide Auto Appraiser Serv. v. Association of C. & S. Co., supra. He was employed by Sinclair for 17 years. He was not fired because of inability to handle the job, but as a result of an unlawful merger. For every wrong there should be a remedy; Clayton Act, §§ 4 and 16 provide this remedy to employees discharged by an alleged illicit merger.

Appellant states that employees have standing because employment is business or property as defined in Clayton Act, § 4. Supporting this assertion he cites Hawaii v. Standard Oil Company of California, 405 U.S. 251, 92 S.Ct. 885, 31 L.Ed.2d 184 (1972). This case concerns the state's right to sue a party for antitrust violations under the parens patriae theory. Although the Supreme Court holds that Section 4 of the Clayton Act does not authorize a state to sue for injury to its general economy resulting from alleged antitrust violations, the Court approves a definition of "business or property" enunciated in Roseland v. Phister Manufacturing Co., 125 F.2d 417 7th Cir. 1942). Business or property is defined in Roseland as "employment or occupation in which a person is engaged to procure a living." Roseland v. Phister Mfg. Co., supra at 419.

Roseland concerns antitrust violations by three corporations engaged in manufacturing and selling fire prevention equipment and fire extinguishers. Plaintiff was a salesman for one of the defendant companies working on a commission basis. The three defendant companies combined their activities for the purpose of, inter alia, suppressing competition in interstate commerce, conspiring to monopolize the commerce, eliminating fair and lawful competition, and dividing customers and purchasers. Plaintiff was accorded standing because his work was that of a sales agent possessing an exclusive territory of several states with an established clientele. Such employees fall within the definition of business or property. More recent cases supporting this view include Dailey v. Quality School Plan, Inc., 380 F.2d 484 (5th Cir. 1967) (area supervisor of magazine subscription company injured in his business or property by a prohibited corporate acquisition); and Nichols v. Spencer International Press, Inc., 371 F.2d 332 (7th Cir. 1967) (no-switching agreement by which each publisher agrees not to employ a former employee of the other until six months after termination of former employment constitutes injury to employee in his business or property).

We are not in disagreement with the above cited cases; however, we do not believe they are applicable to the situation here. The Supreme Court in Hawaii was concerned with the state's standing to sue for injuries to its general economy resulting from antitrust violations. Although approving the standing definition in Roseland, we do not feel the Court expanded the definition to include situations factually different from that in Roseland. In both Roseland, supra, and Dailey, supra, the employees worked on a commission basis. They in essence were quasi-businessmen operating in a market carved out by their own aggressiveness and salesmanship qualities. Thus when their employers engaged in anti-competitive practices, the employees were directly injured by these violations.

For appellant to satisfy the business or property prerequisite, he must demonstrate that his job is a commercial venture or enterprise. Broadcasters, Inc. v. Morristown Broadcasting Corp., 185 F.Supp. 641, 644 (D.C.N.J. 1960); see also Peller v. International Boxing Club, 227 F.2d 593 (7th Cir. 1955); Brownlee v. Malco Theatres, 99 F.Supp. 312 (W.D.Ark.1951). Appellant did not operate out of a specific market nor did his job compel establishing a clientele. In no way could his job be construed as a venture or enterprise within the market area endangered by the merger.

Appellant asserts that standing has been granted employees in numerous cases. The Nichols v. Spencer International Press, Inc., supra, case allowed an employee standing to attack anti-competitive...