643 F.2d 1229 (6th Cir. 1981), 78-1287, Chrysler Corp. v. Fedders Corp.

• Citation: 643 F.2d 1229
• Party Name: CHRYSLER CORPORATION, Plaintiff-Appellant, v. FEDDERS CORPORATION, Fedders International Corporation, Airtemp Corporation, Airtemp International Corporation, Fedders World Trade Corporation and Interclisa, S.A., Defendants-Appellees.
• Case Date: March 18, 1981
• Court: United States Courts of Appeals, U.S. Court of Appeals — Sixth Circuit

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643 F.2d 1229 (6th Cir. 1981)

CHRYSLER CORPORATION, Plaintiff-Appellant,

v.

FEDDERS CORPORATION, Fedders International Corporation,

Airtemp Corporation, Airtemp International

Corporation, Fedders World Trade

Corporation and Interclisa,

S.A., Defendants-Appellees.

No. 78-1287.

United States Court of Appeals, Sixth Circuit

March 18, 1981

Argued April 11, 1980.

Rehearing and Rehearing En Banc Denied May6, 1981.

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[Copyrighted Material Omitted]

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William G. Christopher, Avern Cohn, Honigman, Miller, Schwartz & Cohn, Detroit, Mich., Robert Ehrenbard, Kelley, Drye & Warren, William C. Heck, New York City, for plaintiff-appellant.

Gilbert E. Gove, Miller, Canfiled, Paddock & Stone, Detroit, Mich., for Fedders.

John H. Fildew, Fildew, Bilbride, Miller & Todd, Charles D. Todd, III, Detroit, Mich., for Interclisa.

Lawrence N. Weiss, Weisman, Celler, Spett, Modlin & Wertheimer, Russell E. Brooks, Richard C. Tufaro, Milbank, Tweed, Hadley & McCloy, New York City, for defendants-appellees.

Before EDWARDS, Chief Judge, BOYCE F. MARTIN, Jr., Circuit Judge, and PHILLIPS, Senior Circuit Judge.

BOYCE F. MARTIN, Circuit Judge.

Chrysler Corporation appeals the dismissal of its complaint charging Fedders Corporation and others with violations of the antitrust laws. The case arose after Chrysler entered into an agreement with Fedders to sell virtually all the assets of Chrysler's Airtemp Division. The Airtemp Division was engaged in the business of designing, manufacturing, marketing, and servicing non-automotive air-conditioning systems. The assets acquired by Fedders included the stock of various subsidiaries connected with the Airtemp operation, but excluded two subsidiaries in Australia and South Africa. Chrysler also covenanted, with certain exceptions, not to compete in the non-automotive air-conditioning market for a period of five years.

After the contract was executed, Chrysler became dissatisfied with the agreement. According to the complaint filed below, Fedders has never paid Chrysler several million dollars due under the contract.

On November 14, 1977, Chrysler brought this action under § 4 of the Clayton Act, 15 U.S.C. § 15, alleging that the defendants had violated § 1 of the Sherman Act, 15 U.S.C. § 1. The complaint charged the defendants with conspiring to manipulate the non-automotive air-conditioning market in a manner calculated to lessen and eliminate competition. In addition to the antitrust claim, Chrysler alleged twenty-two pendant claims for relief under state law.

On February 10, 1978, all the defendants except Interclisa moved, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, to dismiss the antitrust claim on the grounds that it failed to state a cause of action and that Chrysler lacked standing to sue under § 4 of the Clayton Act. They also moved under Rule 12(b)(1) to dismiss the other claims for lack of diversity.

On February 24, 1978, the District Court granted the motion to dismiss the antitrust claim. It specifically found that Chrysler met the standing requirements articulated by this Court in Malamud v. Sinclair Oil Corp., 521 F.2d 1142 (6th Cir. 1975), but went on to hold that Malamud is "wrong" in light of the Supreme Court's decision in Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 97 S.Ct. 690, 50 L.Ed.2d 701 (1977). The District Court characterized Chrysler's claim as a breach of contract action which lacked the element of "antitrust injury" required by Brunswick. Because this essential element was missing, the court held that Chrysler did not have standing to sue under § 4 of the Clayton Act.

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On March 10, 1978, defendant Interclisa, a Spanish corporation, filed a Rule 12(b)(2) and 12(b)(6) motion to dismiss the complaint against it. Interclisa alleged, in addition to the arguments advanced by the Fedders defendants, that the court lacked in personam jurisdiction over Interclisa. The District Court agreed and granted the motion, holding that Interclisa had insufficient contacts with the forum to support jurisdiction under either the Michigan long arm statute, M.C.L.A. § 600.715(2), or § 12 of the Clayton Act, 15 U.S.C. § 22. The court also denied Chrysler's request for further discovery on the question of Interclisa's forum contacts.

On appeal, Chrysler contends that it succeeded in making out a cause of action under § 1 of the Sherman Act and that it satisfies this circuit's requirements for standing to sue under § 4 of the Clayton Act. It argues that our opinion in Malamud is unaffected by the Supreme Court's Brunswick decision and that, in any event, its complaint alleges "antitrust injury." Chrysler also claims that the District Court erred in dismissing the complaint against Interclisa on jurisdictional grounds and in refusing to allow Chrysler to conduct further discovery of jurisdictional facts.

We hold that Brunswick does not negate our decision in Malamud. Rather, the effect is cumulative; Brunswick merely adds to the standing requirements set out in Malamud. Insofar as Chrysler claims that the defendants eliminated it as a competitor in the non-automotive air-conditioning market, the District Court correctly concluded that Chrysler failed to allege "antitrust injury" and therefore lacked standing under § 4 of the Clayton Act. However, certain of Chrysler's other allegations do satisfy this circuit's post-Brunswick standing test and should not have been dismissed.

Finally, we affirm the District Court's finding that it lacked personal jurisdiction over Interclisa and uphold its exercise of discretion in denying Chrysler's request for further discovery.

I. Chrysler's Standing Under § 4 of the Clayton Act

In Malamud, supra, this Court addressed the troublesome question of standing to sue under § 4 of the Clayton Act. The plaintiffs in that case fell into three categories: 1) the individuals Jack and Ann Malamud, who were also the officers, directors, and sole shareholders of the corporate plaintiffs; 2) Malco Petroleum, a petroleum distributing corporation; and 3) three real estate investment corporations.

In 1965, Malco and Sinclair Oil executed a distribution agreement. The parties had an understanding that Sinclair would provide financial assistance to the Malamuds' investment companies in their efforts to acquire and develop new service station properties. In early 1966, however, Sinclair declined to help finance several proposed real estate ventures, whereupon Malco unsuccessfully sought an early termination of the contract. After the contract expired, the plaintiffs filed suit, alleging that Sinclair's failure to provide financing and refusal to permit an early contract termination violated § 1 of the Sherman Act and § 3 of the Clayton Act.

Sinclair sought and was denied summary judgment. On a motion for reconsideration, it argued that all of the plaintiffs lacked standing because none of them had been "directly" injured. The District Court rejected this contention and held that all the plaintiffs had standing as defined in Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970). However, it went on to find that neither the individual plaintiffs nor Malco could possibly satisfy the further requirement that their injury bear a "direct" and causal relationship to the alleged antitrust violations. As for the investment company plaintiffs, however, a determination of the "directness" of their injury presented mixed questions of law and fact. Accordingly, the District Court denied summary judgment against the investment firms. It subsequently certified for appeal the threshold question of their standing to sue.

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We affirmed the lower court's finding that the investment companies had standing but rejected its application of the "direct injury" test as a means of limiting standing under § 4. 521 F.2d at 1149. The concept of "direct injury," derived from Loeb v. Eastman Kodak, 183 F. 704 (3rd Cir. 1910), focuses on the relationship between the plaintiff and the defendant. If the alleged injury is "remote," such as that of a stockholder or creditor of a corporation injured by the defendant, standing is denied. Loeb, supra; Gerli v. Silk Association of America, 36 F.2d 959, 960 (S.D.N.Y.1919). We also rejected the "target area" test, another means of circumscribing standing under § 4. That standard requires the plaintiff to be within the area of the economy allegedly injured by the defendant, In Re Multidistrict Vehicle Air Pollution M.D.L. No. 31, 481 F.2d 122 (9th Cir.), cert. denied, 414 U.S. 1045, 94 S.Ct. 551, 38 L.Ed.2d 336 (1973); In Re Beef Industry Antitrust Litigation, 600 F.2d 1148 (5th Cir. 1979), and has spawned numerous and often inconsistent opinions attempting to delineate its scope. See Berger and Bernstein, An Analystical Framework for Antitrust Standing, 86 Yale L.J. 809, 830 (1977).

The two approaches to standing described above purport to derive from the causative language in § 4 itself, i. e., absent a showing that the plaintiff suffered "direct injury" or was within the "target area," no injury "by reason of anything forbidden in the antitrust laws" is deemed to have occurred. Our refusal to apply either theory was based on the belief that both demand too much from a plaintiff at the pleading stage of his case. In effect, they require a court "to make a determination on the merits of a claim under the guise of assessing the standing of the claimant." 521 F.2d at 1150. (emphasis in original).

We decided in Malamud that the appropriate test for standing in an antitrust action is the one articulated by the Supreme Court in Association of Data Processing Service Organizations v. Camp, supra, a case involving standing under the Bank Service Corporation Act of 1962, 12 U.S.C. § 1864. That standard requires (1) an allegation that the...