Tim W. Koerner & Assoc., Inc. v. Aspen Labs, Inc.

• Decision Date: 12 June 1980
• Docket Number: Civ. A. No. H-77-1597.
• Parties: TIM W. KOERNER & ASSOCIATES, INC., et al., Plaintiff, v. ASPEN LABS, INC., Zimmer U.S.A., Inc. and Bristol-Myers Company, Defendants.
• Court: U.S. District Court — Southern District of Texas

492 F. Supp. 294

TIM W. KOERNER & ASSOCIATES, INC., et al., Plaintiff, v. ASPEN LABS, INC., Zimmer U.S.A., Inc. and Bristol-Myers Company, Defendants.

Civ. A. No. H-77-1597.

United States District Court, S. D. Texas, Houston Division.

June 12, 1980.

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Louis R. Koerner, Jr., New Orleans, and John A. Graml, Houston, Tex., for plaintiff.

Fulbright & Jaworski, William R. Pakalka, Houston, Tex., for defendants.

MEMORANDUM AND ORDER

STERLING, District Judge.

Pending before the Court are Defendants' motion for summary judgment, Plaintiff Tim Koerner and Associates, Inc.'s motion to compel discovery, Plaintiffs' motion to transfer pursuant to 28 U.S.C. §§ 1404 and 1407, and Plaintiffs' motion to stay briefing for and consideration of the motion for summary judgment.

This is a private antitrust action in which Plaintiffs, who have engaged in the business of distributing and selling orthopedic and electrosurgical supplies, allege that Defendants have violated sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 and 2, section 2(a), (c) and (e) of the Robinson-Patman Price Discrimination Act, 15 U.S.C. § 13(a), (c) and (e), and sections 3 and 7 of the Clayton Act, 15 U.S.C. §§ 14 and 18. Additionally, Plaintiffs invoke the pendent jurisdiction of the Court to recover actual and punitive damages from Defendants for alleged violations of Texas and Louisiana contractual and antitrust law.

With regard to the federal antitrust claims, Plaintiffs have alleged in their amended complaint that Bristol-Myers Company hereinafter Bristol-Myers, its wholly owned subsidiary Zimmer, U.S.A., Inc. hereinafter Zimmer and Aspen Labs, Inc. hereinafter Aspen have combined, contracted and conspired unreasonably to restrain interstate trade and commerce; to dominate and monopolize interstate commerce in the furnishing of orthopedic products; to discriminate, in the furnishing of services and facilities connected with sales, between different distributors of said commodities; to enter into illegal tying arrangements. Plaintiffs further allege that the acquisition by Defendant Zimmer of Aspen substantially lessened competition and tended to and did in fact create a monopoly in favor of Defendants in the sale of orthopedic and electrosurgical products.

Defendant, Aspen, is a manufacturer of electrosurgical products for use in an operating room environment. Plaintiff, Tim Koerner and Associates, Inc., became a distributor and representative for Aspen in January, 1976. There was never a written contract between Aspen and Tim Koerner and Associates, Inc. Tim Koerner, doing business as DePuy-Koener, has been a distributor of orthopedic and other products for DePuy, a division of Manheim Boerhinger, since June, 1974. Defendant, Zimmer, a wholly owned subsidiary of Bristol-Myers Company, manufactures and distributes a line of orthopedic products. DePuy is a competitor of Zimmer in the orthopedic products market.

On May 9, 1977, after extensive negotiations Zimmer purchased all of Aspen's outstanding common stock. Originally, Aspen had entered into negotiations with Zimmer to secure Zimmer as a distributor for Aspen products. The dialogue concerning a Zimmer distributorship quickly matured into a proposal by Zimmer to acquire Aspen. On or about August 31, 1977, Plaintiff, Tim Koerner and Associates, Inc., was notified that its distributorship for Aspen products would be terminated on September 30, 1977. All of Plaintiffs' claims stem from Zimmer's post acquisition decision to terminate Aspen's independent network of distributors and replace it with Zimmer's distribution system.

Before considering Defendants' motion for summary judgment, the Court will dispose of the several pending motions. Plaintiff, Tim Koerner and Associates, Inc.'s motion to compel production of documents was filed nine months after Defendant, Bristol-Myers' responses to Plaintiff's third request for production of documents and almost two months after Defendants' motion for summary judgment. Having considered the motion and examined the record the Court is of the opinion that the record has been fully developed and that this cause is ripe for summary judgment. Moreover, the Court is of the opinion that Plaintiff has been inexcusably dilatory in its efforts to pursue an order to compel discovery. While there is no specific time limit under Rule 37, Fed.R.Civ.P., in which procedures to compel discovery must be undertaken, the courts have determined that "unreasonable delay can result in a waiver of a party's right to avail himself of the rule." Price v. Maryland Casualty Co., 561 F.2d 609, 611 (5th Cir. 1977); see, Aviation Specialties, Inc. v. Technologies Corp., 568 F.2d 1186, 1188-90 (5th Cir. 1978). Furthermore, Plaintiffs did not make a motion pursuant to Rule 56(f), Fed.R.Civ.P., to obtain information necessary to oppose the motion for summary judgment. See, Daniels v. All Steel Equipment, Inc., 590 F.2d 111, 113 n.3 (5th Cir. 1979). In light of the above the Court is of the opinion that Plaintiff, Tim Koerner and Associates, Inc.'s motion to compel production of documents must be DENIED.

Subsequent to Defendants filing their motion for summary judgment, Plaintiffs filed their motion to transfer this cause to the United States District Court for the Southern District of Colorado pursuant to 28 U.S.C. §§ 1404(a) and 1407. Under 28 U.S.C. § 1407 a party can only initiate proceedings for transfer of an action by filing a motion with the judicial panel on multistate litigation and by filing a copy of such motion with the district court in which the action is pending. The record discloses that Plaintiff has not conformed with this procedure. Therefore, the Court will only address Plaintiffs' motion to transfer under § 1404(a).

A motion to transfer under 28 U.S.C. § 1404(a) is committed to the sound discretion of the district court. See, Pilot Life Insurance Co. v. Boone, 236 F.2d 457, 462 (5th Cir. 1956); 1 Moore's Federal Practice ¶ 0.1455, at 1619 (2d ed. 1979). The instant action was filed over two years ago and there has been extensive and complete discovery. The Court is thoroughly familiar with this cause and is persuaded that in the interest of justice and to avoid undue delay and prejudice the motion to transfer must be DENIED. Accordingly, Plaintiffs' motion to stay the briefing schedule and consideration of Defendants' motion for summary judgment pending a decision on Plaintiffs' motion to transfer is moot.

Generally, summary judgments are not favored in complex antitrust litigation. Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 468, 82 S.Ct. 486, 488, 7 L.Ed.2d 458 (1962). However, the mere filing of an antitrust complaint does not prevent summary judgment where appropriate. First National Bank v. Cities Service Co., 391 U.S. 253, 290, 88 S.Ct. 1575, 1593, 20 L.Ed.2d 569 (1968); see, Aladdin Oil Co v. Texaco, Inc., 603 F.2d 1107, 1111 (5th Cir. 1979). Summary judgment under Rule 56 is appropriate where the movant has carried its burden of showing that no genuine issue of material fact exists and the nonmovant has failed to "set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e), see, First National Bank v. Cities Service Co., supra, 391 U.S. at 288-90, 88 S.Ct. at 1592-1593; Aladdin Oil Co. v. Texaco, Inc., supra, at 1112. Once allegations of antitrust violations have been rebutted by the movant, the nonmovant must produce significant probative evidence demonstrating the existence of a genuine issue of material fact if summary judgment is to be avoided. See, Aviation Specialties, Inc. v. United Technologies Corp., supra, at 1192; Solomon v. Houston Corrugated Box Co., 526 F.2d 389, 394 (5th Cir. 1976). In determining the existence of a material fact issue, the record as a whole and the factual inferences must be viewed in the light most favorable to the nonmoving party. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962).

I. Plaintiffs' Claims Under the Robinson-Patman and Clayton Acts

Although Plaintiffs' first amended complaint presents a superfluity of antitrust verbiage and allegations, Plaintiffs' claims under the Robinson-Patman Act and section 3 of the Clayton Act can be disposed of briefly as the record discloses that these claims are without merit. Defendants having rebutted Plaintiffs' allegations of Robinson-Patman Act and Clayton Act violations, Plaintiffs were required to come forward with evidence showing that there is a material fact issue for trial. Plaintiffs have conceded that there is no evidence of violations of sections 2(a) and (c) of the Robinson-Patman Act. See, Plaintiffs' Response to Defendants' Reply Brief at 20 hereinafter Plaintiffs' Response. However, Plaintiffs still maintain that Defendants violated section 2(e) of the Robinson-Patman Act by their post-termination failure and refusal to provide the same assistance to Plaintiff, Tim Koerner and Associates, Inc., that was provided to Zimmer distributors.

Pursuant to section 2(e) it is an unlawful practice to discriminate in favor of one purchaser against another purchaser of a commodity in the furnishing of services or facilities connected with the sale of such commodity. 15 U.S.C. § 13(e). The purpose of section 2(e) is to protect "competing customers or purchasers" so that all buyers of the supplier who compete in the resale of its product are entitled to promotional and other services on proportionally equal terms. Becker v. Safelite Glass Corp., 244 F.Supp. 625, 635-36 (D.Kan.1965); see, Bay City Abrahams Bros., Inc. v. Estee Lauder, Inc., 375 F.Supp. 1206, 1217-19 (S.D.N.Y. 1974). In order to recover under section 2(e) a plaintiff must be a customer in competition with the favored customer. Becker v. Safelite Glass Corp., supra, at 636.

Plaintiff in the cause at bar maintains that, post-termination, Zimmer's sales...