Woods Exploration & Producing Co., Inc. v. Aluminum Co. of America

• Decision Date: 13 March 1975
• Docket Number: 73--1633,Nos. 72--2792,s. 72--2792
• Citation: 509 F.2d 784
• Parties: 1975-1 Trade Cases 60,208 WOODS EXPLORATION & PRODUCING COMPANY, INC., et al., Plaintiffs-Appellees, v. ALUMINUM COMPANY OF AMERICA et al., Defendants-Appellants. WOODS EXPLORATION & PRODUCING COMPANY, INC., et al., Plaintiffs, Southeastern Pipeline Company, Plaintiff-Appellee-Cross Appellant, v. ALUMINUM COMPANY OF AMERICA et al., Defendants-Appellants-Cross Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 784

509 F.2d 784

1975-1 Trade Cases 60,208

WOODS EXPLORATION & PRODUCING COMPANY, INC., et al., Plaintiffs-Appellees, v. ALUMINUM COMPANY OF AMERICA et al., Defendants-Appellants.

WOODS EXPLORATION & PRODUCING COMPANY, INC., et al., Plaintiffs, Southeastern Pipeline Company, Plaintiff-Appellee-Cross Appellant, v. ALUMINUM COMPANY OF AMERICA et al.,

Defendants-Appellants-Cross Appellees.

Nos. 72--2792, 73--1633.

United States Court of Appeals, Fifth Circuit.

March 13, 1975.

Rehearing and Rehearing En Banc

Denied April 24, 1975.

Ross N. Sterling, Leroy Jeffers, Charles T. Newton, Jr., David T. Hedges, Jr., Houston, Tex., for defendants-appellants.

Herman Wright, Arthur J. Mandell, Levert J. Able, Houston, Tex., for plaintiffs-appellees.

Appeals from the United States District Court for the Southern District of Texas.

Before COLEMAN, AINSWORTH and SIMPSON, Circuit Judges.

SIMPSON, Circuit Judge:

We review in these consolidated appeals the proceedings occurring below in this matter since its former appearance here. The facts have been amply stated in our prior opinion, Woods Exploration Co. v. Aluminum Co. of America, 5 Cir., 1971, 438 F.2d 1286, cert. denied, 1972, 404 U.S. 1047, 92 S.Ct. 701, 30 L.Ed.2d 736 and those of the district court, W.D.Tex.1968, 284 F.Supp. 582, and W.D.Tex.1969, 304 F.Supp. 845. We will repeat only so much of the background history of the case as is necessary to dispose of the current appeals.

By our opinion at 438 F.2d 1286 we disposed of the issues before us on the prior appeal in the following manner:

(i) We reversed the district court's entry of judgment n.o.v. in favor of the defendants, Aluminum Company of America, and others, (hereinafter usually Alcoa) as to charges by the plaintiffs-appellants there, appellees-cross-appellants here, Woods Exploration & Producing Company, Inc., and others, (hereinafter usually Woods) that Alcoa conspired to monopolize, attempted to monopolize, or monopolized the mining and transportation of natural gas from the Appling Field in Jackson and Calhoun Counties, Texas, and directed that the jury verdict in favor of Woods on this issue (the monopolization issue) be reinstated;

(ii) We reversed the district court's entry of partial summary judgment for Alcoa on the claim of Woods that Alcoa filed false nomination forecasts with the Texas Railroad Commission in an effort to limit Woods' production of natural gas from the Appling Field and remanded that issue (the false nominations issue) for trial;

(iii) We vacated the district court's injunction prohibiting Woods from pursuing identical litigation in the state courts of Texas pending resolution of the false nominations issue on remand; and

(iv) We reversed the trial court's exclusion of the issue of damages flowing from Alcoa's alleged interference with Woods' plan for construction of a liquid extraction plant in conjunction with Lumar Gas Pipe Line Company (hereinafter Lumar) and remanded for retrial only on the issue of damages flowing from the interference with the proposed extraction plant (the extraction plant issue).

On remand, Woods explicitly abandoned the false nominations claim, and the district court as to this issue entered a partial dismissal with prejudice. The district court reinstated the jury verdict for Woods on the monopolization issue and entered partial final judgment in Woods' favor thereon pursuant to Rule 54(b), F.R.Civ.P. Finally, as we had directed, the trial court held a retrial limited to the issue of damages on the extraction plant issue. The retrial resulted in a jury verdict and award of damages in Woods' favor, and the district court entered final judgment thereon.

Defendants Alcoa and others now appeal from the partial final judgment entered against them on the monopolization issue and from the final judgment against them on the extraction plant issue. For clarity, we treat the two issues separately.

I THE MONOPOLIZATION ISSUE

A. Partial Final Judgment Under Rule 54(b), F.R.Civ.P. Appellants argue that the district court improperly We need not consider whether our earlier authorization of the entry of partial final judgment on the monopolization issue is the law of the case, nor need we decide the strict technical question whether the entry of such judgment was proper under the provisions of Rule 54(b), F.R.Civ.P. By our prior direction, the separate appeals from judgment on the monopolization issue and from judgment on the extraction plant issue were consolidated for purposes of oral argument and decision by the court. This consolidation served the underlying purpose of Rule 54(b), which is to prevent prejudice to the parties and unnecessary cost to the public by piecemeal appellate consideration of issues so intimately intertwined as to constitute but one claim. Wright & Miller, Federal Practice and Procedure: Civil § 2654, p. 54 (1973). Remand on this procedural point would be no more than an empty gesture in which we decline to indulge. We affirm the district court's entry of partial final judgment on the reinstated jury verdict in favor of the plaintiffs on the monopolization issue.

entered partial final judgment on the monopolization issue under Rule 54(b), F.R.Civ.P. because the suit below involved only one claim for relief, and partial judgment is barred under Rule 54(b). Appellees answer that the district court, in entering partial final judgment, did no more than follow the law of the case which we established in our prior opinion, 438 F.2d at 1316: 'As to (the monopolization issue) the trial court may, if it wishes, render a partial final judgment under Fed.R.Civ.P. 54.' Appellants respond that since the Rule 54(b) issue was not before this court on the prior appeal, our authorization of the entry of partial final judgment cannot be considered the 'law of the case' on this appeal.

B. Exclusion of Production Evidence. Alcoa strenuously urges that exclusion from the jury of evidence from two Texas Supreme Court decisions, Railroad Comm'n v. Aluminum Company of America, Tex.1964, 380 S.W.2d 599 and Railroad Comm'n v. Woods Exploration and Producing Co., Tex.1966, 405 S.W.2d 313, cert. denied sub nom. Aluminum Co. of America v. Woods Exploration, Inc., 1966, 385 U.S. 991, 87 S.Ct. 602, 17 L.Ed.2d 450 deprived Alcoa of the benefit of evidence from which the jury could have concluded that Alcoa and its associated appellants were incapable of monopolizing or dominating production and transmission of natural gas from the Appling Field. The evidence sought to be introduced was, in sum, that Alcoa's ownership of approximately 90% of the surface land area in the Appling Field, because of the 1/3--2/3 proration formula and the limited productive capacity of Alcoa's large tract wells, did not necessarily support a conclusion that the defendants had the power to 'control prices or exclude competition.' United States v. E. I. DuPont de Nemours & Co., 1956, 351 U.S. 377, 391--92, 76 S.Ct. 994, 1005, 100 L.Ed. 1264, 1278--79. Alcoa argues that such power is necessary as a prerequisite to a finding of a violation of § 2 of the Sherman Act, Title 15 U.S.C. § 2.

As pointed out by Woods, we need not consider this point further. It was fully examined and was disposed of by this court on the prior appeal in our ruling on the issue of whether the judgment n.o.v. was properly granted. We then expressed the view:

(W)e hold that the Appling Field clearly constitutes the relevant geographic market, and that the jury could find that defendants possessed sufficient power in that market to monopolize the production of natural gas. 438 F.2d at 1304.

We stated further:

Viewing the Appling Field as the relevant market, we think the jury was warranted in finding that defendants possessed monopoly power in that Field. Defendants contend first that the evidence demonstrates that plaintiffs in fact were able eventually to produce their production quota so that defendants' lack of monopoly power is apparent. We disagree. While plaintiffs This language demonstrates that Alcoa's claim is foreclosed by our prior opinion, which is binding on this panel. Cf. Gulf Coast Building & Supply Co., Inc. v. I.B.E.W., 5 Cir. 1972, 460 F.2d 105, 107.

did eventually manage to produce their production quota, they incurred both increased expenditures and lost production due to defendants' conduct. More important, we do not think that absolute success in excluding competition is an essential element to proving monopoly power under section 2. It is enough that defendants' market position is such that they have substantial power to thwart competition. The defendants here and their alleged co-conspirators owned or leased approximately 90% of the Appling Field. Their holdings were so situated that they could block transportation from competing wells. We think that the jury could find on this state of the facts that defendants possessed monopoly power in the Appling Field within the meaning of the Act. (Emphasis added) 438 F.2d at 1307.

C. The Admission of Pipeline Construction Cost Figures. Alcoa asserts that the trial court improperly allowed the jury to consider the $99,100 cost to Woods' subsidiary, Southeastern Pipeline Co., to build a gas pipeline to transport gas out of the Appling Field. This undertaking of construction was occasioned by a refusal of Lavaca, an Alcoa subsidiary, to deal with Southeastern and by the refusal of Lumar to accept Woods' gas for transmission in its pipeline. Alcoa urges that the initial cost of $99,100 for the pipeline was more than offset by profits in excess of $235,000 which Southeastern netted for transporting Woods' gas for the years 1961--64. Alcoa concludes by asserting that damages and not costs are the essence of a section 2 violation and that Woods and Southeastern, far from being damaged by having to construct their own pipeline, actually profited from the venture.

Here again, we find our prior opinion to be dispositive. We stated there that ...