Lovett v. General Motors Corp.

• Decision Date: 04 June 1991
• Docket Number: Civ. No. 4-85-139.
• Citation: 769 F. Supp. 1506
• Parties: Thomas G. LOVETT, Jr., Trustee of the Bankruptcy Estate of John Peterson Motors, Inc., and Donald John Peterson, individually, Plaintiffs, v. GENERAL MOTORS CORPORATION, Defendant.
• Court: U.S. District Court — District of Minnesota

769 F. Supp. 1506

Thomas G. LOVETT, Jr., Trustee of the Bankruptcy Estate of John Peterson Motors, Inc., and Donald John Peterson, individually, Plaintiffs, v. GENERAL MOTORS CORPORATION, Defendant.

Civ. No. 4-85-139.

United States District Court, D. Minnesota, Fourth Division.

June 4, 1991.

Timothy Dean Moratzka, MacKall Crounse & Moore, Minneapolis, Minn., Ronald B. Sieloff, Sieloff & Bierman, St. Paul, Minn., Michael D. Dittberner, K. Worner Kissoon Law Office, Minneapolis, Minn., John Alexander Cochrane, Stewart C. Loper, Cochrane & Bresnahan, St. Paul, Minn., for plaintiffs.

James Stuart Simonson, James F. Carroll, Gray, Plant, Mooty, Mooty & Bennett, Minneapolis, Minn., S. Thomas Wienner, Dykema Gossett Spencer Goodnow & Trigg, William B. Slowey, Asst. Gen. Counsel, GM Corp Legal Staff, Detroit, Mich., Clay Randolph Moore, MacKall Crounse & Moore, Minneapolis, Minn., for defendant.

ORDER

DOTY, District Judge.

This matter is before the court on the following motions:

1. Defendant's motion for a judgment notwithstanding the verdict under Federal Rule of Civil Procedure 50 or in the alternative for a new trial pursuant to Federal Rule of Civil Procedure 59; and

2. Plaintiffs' motion for costs and attorneys' fees pursuant to 15 U.S.C. § 15(a), D.Minn. LR 54.3(b) and the judgment of January 3, 1991.

Based on a review of the file, record, and proceedings herein, the defendant's motion for judgment n.o.v is granted as it relates to Donald John Peterson and denied as it relates to John Peterson Motors, Inc. Its motion for a new trial is denied and plaintiffs' motion for costs and attorney's fees is denied without prejudice pending appeal.¹

BACKGROUND

Plaintiffs John Peterson Motors, Inc. ("JPMI"), represented by the trustee in bankruptcy, Thomas J. Lovett, Jr., and Donald John Peterson ("Peterson") commenced this action in 1985 against General Motors Corporation ("GM"),² asserting several common law claims and violations of various federal and state statutes.³ The background facts have been set forth in an order dated July 12, 1989. John Peterson Motors, Inc. v. General Motors Corp., 613 F.Supp. 887 (D.Minn.1985). In summary, JPMI was an authorized General Motors dealer in Lake City, Minnesota for Cadillac, Buick, Oldsmobile, Pontiac and Chevrolet motor vehicles. Between October 1980 and February 1983, JPMI operated as a conventional dealer, selling motor vehicles from purchased inventory to retail customers for negotiated prices. In February 1983, JPMI changed its sales and marketing strategy and began to engage in a "$49 and over" marketing program. Instead of advertising and selling motor vehicles at prices negotiated with each individual customer based on a list price, JPMI began to sell all automobiles at $49 over its dealer invoice price.

At trial, plaintiffs contended that prior to the change in marketing, the dealership had few problems and its relationship with GM was amicable. After JPMI adopted a $49 and over marketing strategy, plaintiffs claimed that JPMI began to have trouble obtaining cars from General Motors, that GM failed to preference cars ordered by JPMI, and that as time went on JPMI had to wait longer and longer for delivery. Plaintiffs further claimed that the problems arose after various Twin Cities' General Motors dealers pressured GM to take action against JPMI and conspired with GM to fix prices of motor vehicles at $200 to $300 above invoice prices. Plaintiffs maintained that GM accomplished the price fixing by substantially reducing JPMI's allocation of automobiles, thereby minimizing the dealership's ability to turn a profit at the lower price or to compete effectively with the Twin Cities' dealers. Plaintiffs argued that GM thus sought to force JPMI to discontinue its marketing program and instead comply with the marketing strategy used by the Twin Cities' dealers, who sold automobiles on a negotiated basis using list prices plus markups of $200 to $300.

The case went to the jury on two claims: (1) violation of Section 1 of the Sherman Act; and (2) failure to perform according to the terms of JPMI's sales and service agreements. The jury found that GM did not fail to perform in good faith the terms of the sales and service agreements but found that various General Motors dealers formed an antitrust conspiracy which GM knowingly joined. As a result of this conspiracy, the jury found that JPMI suffered damages of $986,000, which after trebling resulted in a judgment of $2,958,000. The jury further found that Donald John Peterson suffered individual losses of $266,200 which trebled resulted in damages of $798,600.⁴ Plaintiffs seek costs and attorneys' fees pursuant to the Sherman Act. General Motors moves for a judgment n.o.v. or in the alternative for a new trial.

DISCUSSION

The standard for granting a judgment n.o.v. is the same as that for a directed verdict: whether a reasonable juror could have reached the verdict on the evidence presented. City of Omaha Employees Betterment Ass'n v. Omaha, 883 F.2d 650, 651 (8th Cir.1989) (citation omitted). The court is "not free to weigh the evidence, to pass on the credibility of witnesses, or to substitute its judgment for that of the jury", Karlen v. Ray E. Friedman & Co. Commodities, 688 F.2d 1193, 1197 (8th Cir.1982) (citation omitted), but rather views the evidence "in the light most favorable to the party who prevailed before the jury." City of Omaha Employees Betterment Ass'n, 883 F.2d at 651 (citation omitted). This means that the court:

(1) resolves direct factual conflicts in favor of the nonmovant, (2) assumes as true all facts supporting the nonmovant which the evidence tended to prove, (3) gives the nonmovant the benefit of all reasonable inferences, and (4) denies the motion if the evidence so viewed would allow reasonable jurors to differ as to the conclusions that could be drawn.

Pumps & Power Co. v. Southern States Indus., Inc., 787 F.2d 1252, 1258 (8th Cir. 1986).

A motion for a new trial is almost entirely within the trial court's discretion, Allied Chem. Corp. v. Daiflon, Inc., 449 U.S. 33, 36, 101 S.Ct. 188, 190-91, 66 L.Ed.2d 193 (1980) (per curiam), and:

the true standard for granting a new trial on the basis of the weight of the evidence is simply one which measures the result in terms of whether a miscarriage of justice has occurred.

Fireman's Fund Ins. Co. v. Aalco Wrecking Co., Inc., 466 F.2d 179, 187 (8th Cir. 1972); Leichihman v. Pickwick Int'l, Inc., 589 F.Supp. 831, 833 (D.Minn.1984). A new trial is not to be granted merely because the court may have reached a result different than that reached by the jury. Fireman's Fund, 466 F.2d at 186-87. With these standards in hand, the court will examine each of defendant's grounds for its motion.

1. General Motors' Claim That the Evidence Was Insufficient to Establish a Conspiracy

GM first contends that evidence adduced at trial was insufficient for a reasonable jury to conclude that a conspiracy existed between GM and various General Motors dealers to eliminate JPMI's $49 over marketing program and thereby stabilize the price of General Motors automobiles in the Twin Cities area. Plaintiffs, however, proffered sufficient evidence to demonstrate the existence of the alleged conspiracy.

a. Evidence Supporting the Existence of A Dealers' Conspiracy

Plaintiffs proffered sufficient evidence for a reasonable jury to conclude that various Twin Cities GM dealers acted in concert to eliminate JPMI's marketing program. For example, James E. Pirtle ("Pirtle"), GM's zone manager for the Twin Cities' Buick zone, wrote a memorandum to his file on September 27, 1983 recounting his conversation about JPMI with Jack Walser, a Twin Cities' GM dealer ("Walser"). The memorandum states that:

on September 26th, the writer received a call from Jack Walser, president of the Twin Cities Dealers' Advertising Association. Mr. Walser related to the writer the group's displeasure with activities and advertising policies of John Peterson Motors, Inc., Lake City, MN and indicated that the zone should take strong action to correct the problem. He additionally requested a meeting with the Twin City Dealers to discuss the matter.

(Plaintiffs' Exhibit No. 218).⁵

Plaintiffs also introduced a recommendation by the National Cadillac Dealer Council which encouraged the Cadillac Division to take strong steps to eliminate marketing programs like JPMI's and further requested that GM take action to discourage distress advertising. (Plaintiffs' Exhibit No. 214).

Plaintiffs further introduced a memorandum dated February 8, 1984 from Mark Picker, GM's district manager for Buick, to Pirtle, which Pirtle received on February 9, 1984. (Plaintiffs' Exhibit No. 212). The memorandum indicates that comments made by "dealers and salespeople" about JPMI's marketing program were increasing and that it was "becoming increasingly difficult to conduct normal business due to the strain created by the perception that Buick and General Motors are doing nothing to improve the situation." It further notes that a group of service managers also discussed JPMI at a service managers' meeting. The memorandum states that JPMI's marketing activities were "hurting the gross profit on many car sales" in the Twin City area and that JPMI's marketing program "threatens to undermine the operation of some dealerships" because Twin City dealers "need a fair gross profit on their car sales to justify their investment" in their dealerships. A reasonable jury could conclude that this memorandum also suggests group activity by the dealers who were concerned about maintaining price levels.

Other evidence also reflects dealers' concern about JPMI's effect on price levels. In a letter to Pirtle dated March 12, 1984, Jack Walser indicated that his dealership had been forced to reduce his gross sales prices $200 to $300 because of JPMI's marketing program. (Plaintiffs' Exhibit No. 213). In this letter Walser also refers to...