788 F.2d 918 (3rd Cir. 1986), 85-1552, Link v. Mercedes-Benz of North America, Inc.

Docket Nº:85-1552, 85-1651.
Citation:788 F.2d 918
Party Name:Jules LINK and Solomon Katz, on behalf of themselves and all others similarly situated, Appellants, v. MERCEDES-BENZ OF NORTH AMERICA, INC. and Daimler-Benz A.G. and Daimler-Benz of North America Holding Co., Inc. (428).
Case Date:April 16, 1986
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit

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788 F.2d 918 (3rd Cir. 1986)

Jules LINK and Solomon Katz, on behalf of themselves and all

others similarly situated, Appellants,



and Daimler-Benz of North America Holding Co., Inc. (428).

Nos. 85-1552, 85-1651.

United States Court of Appeals, Third Circuit

April 16, 1986

Argued March 6, 1986.

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[Copyrighted Material Omitted]

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Harold E. Kohn, Stuart H. Savett, Robert J. LaRocca, William B. Lytton, Victor P. Barall, Kohn, Savett, Marion & Graf, P.C., William A. DeStefano, DeStefano & Guernsey, Philadelphia, Pa., Richard F. Stevens, (argued), Butz, Hudders, Tallman, Stevens & Johnson, Allentown, Pa., for appellants.

Spencer Ervin, Jr. (argued), R. Mark Armbrust, Wilbur Bourne Ruthrauff, Robert J. Spiegel, Mercer D. Tate, T. Sergeant Pepper, Charlotte E. Thomas, Gratz, Tate, Spiegel, Ervin & Ruthrauff, Philadelphia, Pa., for appellees Mercedes-Benz of North America, Inc., Daimler-Benz, A.G. and Daimler-Benz of North America Holding Co., Inc.

Allan G. Freund, Wayne H. Samson, Mercedes-Benz of North America, Inc. Montvale, N.J., for appellee Mercedes-Benz of North America, Inc.

Before ALDISERT, Chief Judge, and SEITZ and ADAMS, Circuit Judges.


ALDISERT, Chief Judge.

Following an adverse jury verdict, the unsuccessful representatives of a certified plaintiff class filed several post-trial motions for a new trial or judgment n.o.v. Denied relief, they appeal, contending that the district court committed at least eleven reversible errors. In addition, they successfully petitioned for an interlocutory appeal under 28 U.S.C. Sec. 1292(b) questioning the grant of adverse summary judgment, under the doctrine of Illinois Brick Co. v. Illinois, 431 U.S. 720, 97 S.Ct. 2061, 52 L.Ed.2d 707 (1977), on a portion of their claim. We will affirm the judgment and orders of the district court in all respects, with one minor exception regarding the composition of the plaintiff class, 618 F.Supp. 679.


Appellants are representatives of a certified class of consumers who purchased non-warranty repair services from various Mercedes-Benz dealerships throughout the country between March 27, 1970, and the time of trial. The appellees are Daimler Benz Aktiengesellschaft, the German parent company; Mercedes-Benz of North America Holding Company, Inc., its wholly owned subsidiary; and Mercedes-Benz of North America, Inc. (MBNA), the wholly owned subsidiary of the holding company. Appellants' complaint alleged that these entities, which we will refer to collectively as Mercedes, conspired with their authorized dealers "to fix, raise and maintain rates charged for non-warranty auto repairs performed on Mercedes-Benz automobiles by ... basing the rates on the parts' prices and labor times set forth" in a manual known as the MBNA Labor Time Guide, thereby violating Sec. 1 of the Sherman Antitrust Act, 15 U.S.C. Sec. 1, App. at 34-35. The complaint named authorized Mercedes dealers as co-conspirators.

The Mercedes Labor Time Guide lists many typical repairs and assigns a certain number of "operation hours" to each. Dealers who follow the guide do not ordinarily charge the customer for the actual time spent repairing the customer's automobile, but charge whatever "operation" period of time is specified for the particular repair in the guide. Each dealer, in addition, sets an hourly rate to be charged consumers for mechanics' services. The hourly rate is multiplied by the time unit specified in the guide to reach a "total price" for each repair. Appellants theorized that Mercedes and their dealers used the time guide as a vehicle to conspire "to

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fix, raise and maintain" the price of non-warranty repairs.

Prior to trial, the district court granted partial summary judgment for Mercedes on that portion of the complaint alleging price fixing of Mercedes parts used in the non-warranty repairs. The court held that Illinois Brick Co. v. Illinois, 431 U.S. 720, 97 S.Ct. 2061, 52 L.Ed.2d 707 (1977), barred the claim for damages on the parts portion of the complaint. App. at 2.798-813. The court first ruled that appellants could proceed on their parts claim for injunctive relief, but then decided to try the labor and parts claims separately, with the labor claim first. After a seven week trial on the charge of price fixing of labor only, the jury found that Mercedes had not conspired with its dealers "to fix and raise the labor charges for non-warranty repair work." App. at 9,863. The district court entered judgment on the verdict.

Appellants filed several post-trial motions for a new trial or judgment n.o.v., challenging the validity of the verdict, the jury instructions, and various evidentiary rulings. The district court denied these motions and the plaintiffs appealed. The district court also certified the Illinois Brick issue under 28 U.S.C. Sec. 1292(b). The claim for injunctive relief on the parts claim is still open.


In the direct appeal, No. 85-1552, appellants present a number of issues. They maintain that the district court erred in denying their summary judgment, directed verdict, and judgment n.o.v. motions. Alternatively, they argue that because the district court improperly decided numerous evidentiary issues and improperly instructed the jury, a new trial is required.

The applicable standards of review are well settled. In reviewing a district court's summary judgment ruling, the court of appeals must "apply the same test the district court should have utilized initially." Goodman v. Mead Johnson & Co., 534 F.2d 566, 573 (3d Cir.1976), cert. denied, 429 U.S. 1038, 97 S.Ct. 732, 50 L.Ed.2d 748 (1977). The district court must determine whether "no genuine issue as to a material fact remains for trial and that the moving party is entitled to judgment as a matter of law." Id.

Next, when reviewing a denial of a directed verdict, "[w]e must determine whether, as a matter of law, the record is critically deficient of that minimum quantum of evidence from which a jury might reasonably afford relief.... [I]f the evidence is of such character that reasonable men, in the impartial exercise of their judgment may reach different conclusions, the case should be submitted to the jury." Patzig v. O'Neil, 577 F.2d 841, 846 (3d Cir.1978).

Finally, judgment n.o.v. is an extraordinary remedy when urged by an unsuccessful plaintiff who bore the burden of proof at trial. In order to grant the motion, the district court " 'must be able to say that there is insufficient evidence for permitting a different finding.' " Gatenby v. Altoona Aviation Co., 407 F.2d 443, 446 (3d Cir.1968) (quoting Mihalchak v. American Dredging Co., 266 F.2d 875, 877 (3d Cir.1959)). On appeal we are required "to review the record in this case in the light most favorable to the non-moving party, ... and to affirm the judgment of the district court denying the motion[ ] unless the record is 'critically deficient of that minimum quantum of evidence from which the jury might reasonably afford relief.' " Dawson v. Chrysler Motors Corp., 630 F.2d 950, 959 (3d Cir.1980) (quoting Denneny v. Siegel, 407 F.2d 433, 439 (3d Cir.1969)), cert. denied, 450 U.S. 959, 101 S.Ct. 1418, 67 L.Ed.2d 383 (1981).

Normally, the district court's ruling on a motion for a new trial is reviewed for abuse of discretion, Wagner v. Pennsylvania Railroad Co., 282 F.2d 392 (3d Cir.1960), but "if the court's denial was based on the application of a legal precept, review is plenary." Koshatka v. Philadelphia Newspapers, Inc., 762 F.2d 329, 333 (3d Cir.1985). Where a contention for a new trial is based on the admissibility of

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evidence, the "trial court has great discretion ... which will not be disturbed on appeal absent a finding of abuse." Kane v. Ford Motor Co., 450 F.2d 315, 316 (3d Cir.1971). The standard of review for the district court's ruling on points for charge is also abuse of discretion. However, "[o]nce the court has given an instruction, we must 'determine whether the charge, taken as a whole and viewed in the light of the evidence, fairly and adequately submits the issues in the case to the jury.' " United States v. Fischbach & Moore, Inc., 750 F.2d 1183, 1195 (3d Cir.1984) (quoting Ayoub v. Spencer, 550 F.2d 164, 167 (3d Cir.), cert. denied, 432 U.S. 907, 97 S.Ct. 2952, 53 L.Ed.2d 1079 (1977)), cert. denied, --- U.S. ----, 105 S.Ct. 1397, 84 L.Ed.2d 785 (1985). We should reverse the trial court "only if the instruction was capable of confusing and thereby misleading the jury." Id.


Based on appellants' brief and oral argument, we understand appellants to contend that the documentary evidence submitted at trial was sufficient to establish, as a matter of law, that Mercedes conspired with its dealers to fix prices for non-warranty repairs in violation of the Sherman Act. Appellants allege that this price-fixing scheme had two components: first, to standardize the time for making typical repairs; and second, to fix the hourly labor costs of such repairs.

To establish their allegations of a conspiracy between Mercedes and its dealers to standardize "operations hours," appellants introduced copies of Mercedes "time guides"; evidence of a "service management control system" designed to note disparities between actual repair times and those suggested by the time guides; evidence of agreements pursuant to which dealers sent employees to seminars at which Mercedes taught and distributed the service management control system and time guides; evidence of agreements pursuant to which dealers agreed to accept Mercedes' recommendations concerning use of time guides and service management control systems; and evidence of meetings organized by Mercedes in which dealers and their employees discussed time guides and service management controls. See Brief for Appellants at 19-20. To establish their allegations of a...

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