John B. Hull, Inc. v. Waterbury Petroleum Products, Inc.
| Decision Date | 02 May 1988 |
| Docket Number | D,No. 1003,1003 |
| Citation | 845 F.2d 1172 |
| Parties | 1988-1 Trade Cases 67,995, 11 Fed.R.Serv.3d 318 JOHN B. HULL, INC., The Sandmeyer Oil Company, Community Petroleum Products, Inc., and Dutchess Auto Company, Plaintiffs, v. WATERBURY PETROLEUM PRODUCTS, INC., Defendant. WATERBURY PETROLEUM PRODUCTS, INC., Third Party Plaintiff-Appellant, v. C.A. LINDELL & SON, INC., Third Party Defendant-Appellee. ocket 87-7760. |
| Court | U.S. Court of Appeals — Second Circuit |
Michael F. Dowley, Middletown, Conn., for third party plaintiff-appellant, Waterbury Petroleum Products, Inc.
David S. Golub, Stamford, Conn. (Silver, Golub and Sandak, of counsel), for third party defendant-appellee, C.A. Lindell & Son, Inc.
Before LUMBARD, OAKES and MINER, Circuit Judges.
Waterbury Petroleum Products, Inc. (WPP) appeals from two orders of Judge Nevas of the District Court for Connecticut. One order dismissed WPP's antitrust damage claims against C.A. Lindell & Son, Inc. (Lindell) for WPP's failure to comply with Lindell's discovery requests and three court orders compelling WPP to comply with these requests; the other awarded attorney's fees to Lindell for its efforts to secure this discovery. WPP claims that the district court abused its discretion by dismissing its complaint and assessing attorney's fees. Lindell claims that WPP's appeal is frivolous and, consequently, that WPP should be ordered to pay Lindell's legal fees for this appeal.
We affirm both orders of the district court.
The controversy between WPP and Lindell is a survivor of litigation which began thirteen years ago. During the 1970's, John B. Hull, Inc., The Sandmeyer Oil Company, Community Petroleum Products, Inc., and Dutchess Auto Company were selling heating oil in an area referred to as the Northwest Corner. The Northwest Corner encompasses parts of northwest Connecticut, southwest Massachusetts, and an adjacent area in New York. In 1975, WPP, a distributor of heating oil in the Waterbury, Connecticut area, undertook to gain a share of the heating oil business in the Northwest Corner. Two years later, the four companies commenced a civil antitrust action against WPP, alleging that the new competitor's pricing policy constituted unlawful price discrimination in violation of Section 2(a) of the Clayton Act, as amended by the Robinson-Patman Act, 15 U.S.C. Section 13(a). The plaintiffs sought preliminary injunctive relief. After conducting a five-day evidentiary hearing in the fall of 1977, Magistrate F. Owen Eagan submitted a proposed ruling based on specific findings of facts and recommended the granting of injunctive relief. Judge T. Emmet Clarie "adopted, ratified and confirmed" the magistrate's recommended ruling and in March 1978, issued a preliminary injunction requiring WPP to establish a single base price for sales of heating oil. We affirmed the injunction with modification. John B. Hull, Inc. v. Waterbury Petroleum Products, Inc., 588 F.2d 24, 30-31 (2d Cir.1978), cert. denied, 440 U.S. 960, 99 S.Ct. 1502, 59 L.Ed.2d 773 (1979).
On April 18, 1978, WPP answered the complaint and interposed three counterclaims. The counterclaims alleged that the four plaintiffs and a fifth company, Lindell, conspired in the pricing of heating oil in the Northwest Corner, in violation of the Sherman Act (first count) and Connecticut Antitrust Laws (second count), and causing independent torts under the laws of Connecticut (third count). Approximately one year later, WPP initiated a third-party action against Lindell.
The allegations in WPP's three count amended third-party complaint were nearly identical to the three counterclaims WPP filed against the four original plaintiffs. In its first count, WPP alleged that Lindell and the four original plaintiffs conspired to restrain trade and monopolize the heating oil business in the Northwest Corner in violation of the Sherman Act, 15 U.S.C. Sections 1 and 2. This first count also alleged discriminatory pricing practices. In its second count, WPP alleged that the conspirators violated the Connecticut Antitrust Laws, Conn.Gen.Stat. Sections 35-24 to 35-45. The third count alleged that the conspirators' conduct constituted "independent torts" under the law of Connecticut.
In response, Lindell filed its third-party answer and interposed two counterclaims. The first counterclaim mirrored the allegations in the four original plaintiffs' complaint, that is, that WPP's pricing policy constituted unlawful price discrimination in violation of Section 2(a) of the Clayton Act, as amended by the Robinson-Patman Act, 15 U.S.C. Sec. 13(a). Lindell's second counterclaim alleged that WPP's pricing practices violated Connecticut's antitrust law prohibiting price discrimination in commercial transactions.
On June 18, 1979, plaintiffs' application for a prejudgment remedy was granted. On September 10, 1979, the four original plaintiffs and WPP agreed to the entry of a judgment wherein, among other things, WPP was obligated to establish a single base price for the sale of heating oil. With the original action between the four original plaintiffs and WPP resolved by judgment, all that remained was WPP's third-party action against Lindell and Lindell's counterclaims.
At the end of 1981, Lindell moved for partial summary judgment and WPP cross-moved for partial summary judgment. Lindell later filed a supplemental summary judgment motion. Magistrate Eagan recommended denial of Lindell's motion for partial summary judgment on WPP's antitrust conspiracy claims under the Sherman Act (first count), and under the Connecticut Antitrust Act (second count) insofar as WPP's conspiracy claims based on the Connecticut antitrust law. The magistrate, however, recommended summary judgment in Lindell's favor on both WPP's discriminatory price claim and attempt to monopolize claim. The third count of the amended third-party complaint alleging pendent state law torts was not at issue. WPP's motion for partial summary judgment was denied. Judge Clarie affirmed the magistrate's recommended rulings.
Beginning with interrogatories filed on July 9, 1981, Lindell sought through various discovery requests a delineation of WPP's alleged damages, its theories of liability and causation, and the factual support for its antitrust claims. Specifically, Lindell sought information as to (1) the amount of each element of WPP's claimed damages; (2) the factual basis on which each such element of damages has been calculated; (3) the factual basis and evidence upon which WPP relies for its claims of wrongful conduct and resulting loss; and (4) WPP's factual and legal theories of causation relating to its claimed losses and Lindell's wrongful conduct.
On August 10, 1981, WPP responded by answering portions of two interrogatories and refusing to answer the other interrogatories. Lindell moved for an order compelling WPP to answer the interrogatories. On October 6, 1981, after meeting with the parties and hearing argument on pending motions, Magistrate Eagan issued an order requiring WPP to answer specified interrogatories by October 16, 1981.
On October 22, 1981, WPP filed its "Supplemental Response to Third-Party Defendant's First Set of Interrogatories". Maintaining that this response was inadequate to satisfy Magistrate Eagan's order, Lindell moved for the imposition of sanctions against WPP on November 3, 1981. On January 11, 1982, Magistrate Eagan, in response to Lindell's request, stayed further discovery pending a ruling on Lindell's motion.
In July 1982, Lindell moved for summary judgment on the third count which alleged pendent state law torts. Magistrate Eagan recommended summary judgment in Lindell's favor on the third count. Judge Clarie affirmed the magistrate's ruling. As a result, the controversy was reduced to WPP's third-party action against Lindell in which WPP asserted two antitrust claims and Lindell countered with two counterclaims.
The motion for sanctions was still pending on December 19, 1983, when the parties appeared before Judge Clarie to select a jury. Judge Clarie heard argument on the motion for sanctions. Following argument by both sides, Judge Clarie then warned WPP twice that its failure to supply the information sought in Lindell's interrogatories by January 13, 1984, would result in the action's dismissal. Judge Clarie's warning was clear--"if [i]t [all claims for damages and a breakdown of those claims] isn't produced, the case will be dismissed." Judge Clarie reduced his ruling to writing by endorsing Lindell's motion for sanctions as follows:
Waterbury Petroleum Products, Inc. shall answer all pending interrogatories and disclose all claims for damages and a breakdown thereof on...
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