In re Nissan Motor Corp. Antitrust Litigation

• Decision Date: 29 March 1979
• Docket Number: MDL No. 120.
• Citation: 471 F. Supp. 754
• Parties: In re NISSAN MOTOR CORPORATION ANTITRUST LITIGATION.
• Court: U.S. District Court — Southern District of Florida

471 F. Supp. 754

In re NISSAN MOTOR CORPORATION ANTITRUST LITIGATION.

MDL No. 120.

United States District Court, S. D. Florida.

March 29, 1979.

Granvil I. Specks, Specks & Goldberg, Chicago, Ill., for plaintiffs.

Frank Cicero, Jr., Kirkland & Ellis, Chicago, Ill., for Nissan Motor Corp.

OPINION ON APPLICATION OF COLLATERAL ESTOPPEL DEFENSE

ATKINS, Chief Judge.

In July, 1972, P.D.Q. of Miami filed a private class action antitrust suit against Nissan Motor Corporation before this Court on behalf of all non-dealer Datsun purchasers across the country. The suit alleged a nationwide conspiracy between Nissan-U. S.A. and Nissan-Japan to fix prices in violation of § 4 of the Clayton Act, 15 U.S.C. § 15.¹ Once this suit was filed, several others were filed throughout the United States. The cases were transferred by the Judicial Panel on Multidistrict Litigation to this Court for consolidated pretrial proceedings. See In re Nissan Motor Corp. Antitrust Litigation, 352 F.Supp. 960 (Jud.Pan. Mult.Lit.1973); In re Nissan Motor Corp. Antitrust Litigation, 385 F.Supp. 1253 (Jud. Pan.Mult.Lit.1974).

P.D.Q. was certified as a class representative by this Court, P.D.Q. Inc. of Miami v. Nissan Motor Corp., 61 F.R.D. 372 (S.D.Fla. 1973), and thereafter this Court entered judgment on a jury verdict that no nationwide conspiracy had existed. The Court of Appeals affirmed, 577 F.2d 910 (5th Cir. 1978), but remanded the case for modification of the order awarding costs. Certiorari was denied by the Supreme Court this year. In re Nissan Motor Corp. Antitrust Litigation, ___ U.S. ___, 99 S.Ct. 843, 59 L.Ed.2d 38 (1979).

Defendant Nissan Motors has moved for summary judgment on plaintiffs' customer and territorial allegations and plaintiffs' conspiracy allegations. Plaintiffs have concurrently moved for an in limine ruling that this Court's entry of judgment against P.D.Q. has no collateral estoppel effect on the pending statewide actions. These three motions involve an analysis of the proper application of the collateral estoppel doctrine in the case at bar. This Court holds that collateral estoppel may not be invoked on due process grounds and, therefore, the motions by Nissan Motors are denied.

I.

A fundamental principle of due process is that collateral estoppel may not be asserted against one who was not a party in the previous action. The Supreme Court originally enunciated this principle in Bigelow v. Old Dominion Copper Co., 225 U.S. 111, 131, 32 S.Ct. 641, 644, 56 L.Ed. 1009 (1911):

"No judgment can be regarded as res judicata as to any matter where the rights in the subject-matter arise out of mutuality, and not by succession, unless the party could, as a matter of right, appear and defend, even though he may have knowledge of the suit. Otherwise he might be bound by a judgment as to which he had never had the opportunity to be heard, which is opposed to the first principles of justice."

The abrogation of the mutuality doctrine has not affected the validity of that principle. In Blonder Tongue Laboratories, Inc. v. University of Illinois Foundation, 402 U.S. 313, 91 S.Ct. 1434, 28 L.Ed.2d 788 (1971), the Supreme Court stated:

"Some litigants—those who never appeared in a prior action—may not be collaterally estopped without litigating the issue. They have never had a chance to present their evidence and arguments on the claim. Due process prohibits estopping them despite one or more existing adjudications on the identical issue which stands directly against their position." 402 U.S. at 329, 91 S.Ct. at 1443.

Earlier this year, in Parklane Hosiery Co., Inc. v. Shore, ___ U.S. ___, 99 S.Ct. 645, 58 L.Ed.2d 552 (1979), the Court reaffirmed this position, "it is a violation of due process for a judgment to be binding on a litigant who is not a party or privy and therefore has never had an opportunity to be heard." ___ U.S. ___ n.7, 99 S.Ct. at 649 r.7. This Court fully embraced this position in its recent opinion in In re Yarn Processing Patent Validity Litigation, MDL 82, (1979) 472 F.Supp. 174 wherein it was stated:

"To allow this would enable these nonparticipants to reap the benefits of a favorable determination while escaping the binding effect of an unfavorable determination, because should Lex Tex prevail on the merits, due process considerations would preclude it from asserting collateral estoppel against these defendants in the subsequent action."

Nissan Motors asserts these due process requirements would not be violated in the application of collateral estoppel in the present action. It argues that the P.D.Q. plaintiffs were essentially in privity with remaining class plaintiffs in MDL 120. More specifically, it is alleged that (1) the complaints in the remaining actions are identical with P.D.Q.; (2) the plaintiffs' counsel closely coordinated and shared responsibility in the consolidated pretrial proceedings, including discovery and pretrial hearings; (3) joint motions were filed evincing common legal analysis, theories, and strategies; (4) the pretrial submissions show no material distinctions among any of the plaintiffs; (5) plaintiffs controlled the trial through joint pretrial submissions, which were conducted by a party with identical interests; (6) there was no deficiency in the proceedings or additional evidence of genuine substance to offer at any future trial; and (7) the precise legal issue central to all the plaintiffs' case was decided adversely against them in the P.D.Q. trial. Defendant cites some authority in the Fifth Circuit to support the proposition that these factors establish the plaintiffs have received "a full and fair opportunity to be heard." Significantly, Nissan also relies on the recent Supreme Court case of Montana v. United States, ___ U.S. ___, 99 S.Ct. 970, 59 L.Ed.2d 210 (1979).

II.

When the issue of class certification was originally raised in the P.D.Q. case, this Court was faced with the question of whether a nationwide class would be appropriate. The Court stated that in view of the plaintiffs' reluctance to advance more than a few thousand dollars to finance the action, a nationwide class would be infeasible. The Court ordered the class to be limited to purchasers in New York County, New York, and Dade County, Florida. 61 F.R.D. at 381. In a subsequent order on May 28, 1976, the Court indicated that the class actions would be remanded to their original transferor forums for trial.² This order was later modified to provide that the Scharf action would also be sent back to the Southern District of New York for trial.³

This Court later denied a § 1404(a) motion by the plaintiffs in the Lewis and Horowitz cases,⁴ for transfer to the Southern District of Florida. Throughout the entire length of these proceedings, the Court's rulings have indicated the necessity that the P.D.Q. case and the remainder of the actions be tried separately. The defendant, Nissan Motors, now raises the issue of whether under the circumstances, those non-participating plaintiffs may be bound by the P.D.Q. litigation because they, in effect, "controlled" the litigation through the P.D.Q. plaintiffs.

None of the cases cited by the defendant lead the Court to that conclusion. In Montana v. United States, ___ U.S. ___, 99 S.Ct. 970, 59 L.Ed.2d 210 (1979), a contractor brought suit in state court contending that the gross receipt tax unconstitutionally discriminated against the Government and companies with which it dealt. Soon after that, the Government filed suit in the United States District Court of Montana. In holding that collateral estoppel should be applied in that case, the Supreme Court stated: "these interests are similarly implicated when non parties assume control over the litigation in which they have a direct financial or proprietory interest, and then seek to redetermine issues previously resolved." The Court then listed the factors it found as evincing Government "control" of the litigation. The Government had stipulated that it:

(1) required the first lawsuit to be filed;

(2) reviewed and approved the complaint;

(3) paid the attorney's fees and costs;

(4) directed the appeal from the state district court to the Montana Supreme Court;

(5) appeared and submitted an amicus brief in that court;

(6) directed the filing of a Notice of Appeal to the Supreme Court of the United States; and

(7) effectuated the abandonment of that appeal.

In light of those circumstances, the Supreme Court concluded that "although not a party, the United States plainly had a sufficient `laboring oar' in the conduct of the state-court litigation to actuate principles of estoppel." ___ U.S. at ___, 99 S.Ct. at 975.

In Southwest Airlines Co. v. Texas International Airlines Inc., 546 F.2d 84 (5th Cir.), cert. denied, 434 U.S. 832, 98 S.Ct. 117, 54 L.Ed.2d 93 (1977), the Fifth Circuit held that due process would not be violated by binding Civil Aeronautics Board carriers to a prior judgment, even though they were not parties to the action; since their interests were sufficiently represented by the public authorities that promulgated the ordinance and had the primary responsibility of enforcing it. In a footnote, the Court of Appeals noted an important factual distinction from the present action. In distinguishing the earlier case of E. B. Elliot Advertising Co. v. Metropolitan Dade County, 425 F.2d 1141 (5th Cir.), cert. denied, 400 U.S. 805, 91 S.Ct. 12, 27 L.Ed.2d 35 (1970), the Court stated:

"In Elliot a private plaintiff challenged the constitutionality of a city ordinance after another private litigant had lost a similar challenge. The question was whether in the first suit the private litigant had represented the interests of the later challenger . . .

Representation by a government authority never came up because both of the private parties opposed the city. As a result, the case has no bearing on the Southwest litigation . . .." 546 F.2d at 99, n.54.

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