Sakamoto v. Duty Free Shoppers, Ltd.

Decision Date07 December 1983
Docket NumberCiv. No. 82-0009
Citation613 F. Supp. 381
PartiesYosh 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.
CourtU.S. District Court — District of Guam

COPYRIGHT MATERIAL OMITTED

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

DUENAS, District Judge.

STATEMENT OF THE CASE

Plaintiffs1 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 procompetitive. 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 concession 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...

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4 cases
  • Ferguson v. Greater Pocatello Chamber of Commerce, Inc.
    • United States
    • U.S. Court of Appeals — Ninth Circuit
    • 6 Junio 1988
    ...could nevertheless lease part of facility to single lessee); see Interface Group, 816 F.2d at 11-12; cf. Sakamoto v. Duty Free Shoppers, 613 F.Supp. 381, 388-91 (D.Guam 1983) (exclusive concession, open and fair bidding, reasonable as a matter of law), aff'd on other grounds, 764 F.2d 1285 ......
  • IT&E OVERSEAS, INC. v. RCA Global Communications
    • United States
    • U.S. District Court — District of Columbia
    • 12 Junio 1990
    ...for summary judgment. Globcom asserts three grounds in support of its motion for summary judgment: (1) under Sakamoto v. Duty Free Shoppers, Ltd., 613 F.Supp. 381 (D.Guam 1983), aff'd, 764 F.2d 1285 (9th Cir.1985), cert. denied, 475 U.S. 1081, 106 S.Ct. 1457, 89 L.Ed.2d 715 (1986), agreemen......
  • Sea Air Shuttle Corp. v. Virgin Islands Port Auth.
    • United States
    • U.S. District Court — Virgin Islands
    • 4 Noviembre 1991
    ...rights for the sale and delivery of certain merchandise at the Guam International Airport Terminal ..." Sakamoto v. Duty Free Shoppers, Ltd., 613 F.Supp. 381, 383-384 (D.C.Guam 1983); aff'd 764 F.2d 1285 (9th Cir.1985).4 Similarly, plaintiff in this action alleges that defendants violated a......
  • United States v. Gov't of Guam
    • United States
    • U.S. District Court — District of Guam
    • 25 Abril 2019
    ...accurately viewed as that accorded a sovereign that is not a state covered by the Eleventh Amendment. See Sakamoto v. Duty Free Shoppers, Ltd., 613 F. Supp. 381, 386 (D. Guam 1983) ("the Eleventh Amendment to the Constitution of the United States does not encompass unincorporated territorie......
1 books & journal articles
  • Section 1 of The Sherman Act
    • United States
    • ABA Antitrust Library Model Jury Instructions in Civil Antitrust Cases
    • 8 Diciembre 2016
    ...in competitive bidding); Kirk-Mayer v. Pac Ord, Inc., 626 F. Supp. 1168, 1170-71 (C.D. Cal. 1986); Sakamoto v. Duty Free Shoppers, Ltd., 613 F. Supp. 381 (D. Guam 1983), aff’d on other grounds , 764 F.2d 1285 (9th Cir. 1985); see also 1 ALD , supra note 1, at 219 & n.1384. 76 Model Jury Ins......

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