American Standard, Inc. v. Bendix Corp.

• Decision Date: 20 March 1980
• Docket Number: Civ. A. No. 73CV670-W-B.
• Citation: 487 F. Supp. 265
• Parties: AMERICAN STANDARD, INC., Plaintiff, v. THE BENDIX CORPORATION, Defendant.
• Court: U.S. District Court — Western District of Missouri

487 F. Supp. 265

AMERICAN STANDARD, INC., Plaintiff, v. THE BENDIX CORPORATION, Defendant.

Civ. A. No. 73CV670-W-B.

United States District Court, W. D. Missouri, W. D.

March 20, 1980.

Bruce H. Gerhard, of Lewis, Mitchell & Moore, Washington, D. C., with whom were Henry M. Moore, John B. Tieder, Jr. and Randall C. Allen, Washington, D. C., and John C. Noonan, of Stinson, Mag & Fizzell, Kansas City, Mo., for plaintiff American Standard, Inc.

Erwin N. Griswold, of Jones, Day, Reavis & Pogue, Washington, D. C., with whom were Eldon H. Crowell, Peter B. Work and George Ruttinger, of Crowell & Moring, Washington, D. C., and Jerome T. Wolf, of Spencer, Fane, Britt & Browne, Kansas City, Mo., for defendant The Bendix Corporation.

ORDER DENYING THE MOTION OF DEFENDANT THE BENDIX CORPORATION FOR SUMMARY JUDGMENT ON THE ANTITRUST COUNT (COUNT I) OF THE COMPLAINT OF AMERICAN STANDARD, INC.

WILLIAM H. BECKER, Senior District Judge.

Plaintiff American Standard, Inc. (ASI) brought this civil action in four counts against The Bendix Corporation (Bendix), alleging violation of federal antitrust statutes, fraud, and breach of contract, and seeking treble damages, rescission, and other relief.

In Count I of its complaint filed on December 20, 1973, ASI alleged that Bendix monopolized the manufacture, distribution and sale of APX-72 electronic navigational transponders sold to the government of the United States, in violation of § 2 of the Sherman Act, 15 U.S.C. § 2. ASI further alleged in Count I that Bendix, with specific intent to monopolize, attempted to monopolize the manufacture, distribution and sale of APX-72 transponders, also in violation of § 2 of the Sherman Act, 15 U.S.C. § 2. ASI further alleged in Count I that Bendix engaged in acts and practices designed to perpetuate and maintain its unlawful monopoly.

In Count II, Count III and Count IV of its complaint, ASI alleged fraudulent inducement, fraud, and breach of contract by Bendix, and sought damages, rescission, and related relief. A separate motion of Bendix for summary judgment involves Count II and Count III.

On October 3, 1977, Bendix moved, pursuant to Rule 56, F.R.Civ.P., for an order granting it summary judgment on the antitrust count, Count I, of the complaint of ASI. Bendix and ASI have filed briefs in support of, and in opposition to, the motion of Bendix for summary judgment. The parties have each filed voluminous narrative statements of fact, and responses to those filings, as part of the pretrial process. A plenary hearing to make a formal record and oral arguments on the motion of Bendix for summary judgment were held on April 24, 1978.

At the pretrial conference of August 30, 1979, this Court announced the denial of the motion of Bendix for summary judgment on the antitrust count. (Transcript of August 30, 1979 Pretrial Conference at 6.) This order shall set forth the reasons for the denial of that motion of Bendix.

CONCLUSION THAT THE MOTION OF BENDIX FOR SUMMARY JUDGMENT SHOULD BE DENIED

A. Summary Judgment

Rule 56(c), F.R.Civ.P., provides in relevant part that summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law."

The principles this Court must apply in deciding a motion for summary judgment are well established. The Eighth Circuit Court of Appeals recently summarized those principles in McLain v. Meier (C.A. 8 1979) 612 F.2d 349, l.c. 355-56, where it is stated: "Summary judgment is a harsh remedy and is to be granted sparingly; the burden is on the movant to show that he is entitled to the judgment sought. The case is to be viewed in the light most favorable to the party opposing the motion, and he is to be granted the benefit of all inferences favorable to him that the record warrants." Further, as stated in the case of Roberts v. Browning (C.A. 8 1979) 610 F.2d 528, l.c. 531,

In this case the burden was on the defendant to establish beyond controversy that there was no genuine issue as to any material fact and that the defendant was entitled to judgment as a matter of law. Plaintiff was entitled to have the case viewed in the light most favorable to him and to have the benefit of all inferences favorable to him that might be reasonably drawn from the evidence.

See also, McMahon v. Meredith Corp. (C.A. 8 1979) 595 F.2d 433, l.c. 438; Starling v. Valmac Industries, Inc. (C.A. 8 1979) 589 F.2d 382, l.c. 386; Watts v. Brewer (C.A. 8 1978) 588 F.2d 646, l.c. 648; EEOC v. Liberty Loan Corp. (C.A. 8 1978) 584 F.2d 853, l.c. 857.

It has been stated by the Eighth Circuit Court of Appeals that "courts do not lightly enter summary judgment on the merits in antitrust cases." Willmar Poultry Co. v. Morton-Norwich Products, Inc. (C.A. 8 1975) 520 F.2d 289, l.c. 292, cert. denied, 424 U.S. 915, 96 S.Ct. 1116, 47 L.Ed.2d 320 (1976). In accord are Scranton Const. Co. Inc. v. Litton Indus. Leasing Corp. (C.A. 5 1974) 494 F.2d 778, l.c. 781, cert. denied, 419 U.S. 1105, 95 S.Ct. 774, 42 L.Ed.2d 800 (1975); Beckman v. Walter Kidde & Co. (C.A. 2 1971) 451 F.2d 593, cert. denied, 408 U.S. 922, 92 S.Ct. 2488, 33 L.Ed.2d 333 (1972).

The Eighth Circuit Court of Appeals has warned that "summary judgment should be granted sparingly in antitrust suits, particularly when the action is based upon complicated and extensive evidence." Admiral Theatre Corp. v. Douglas Theatre Corp. (C.A. 8 1978) 585 F.2d 877, l.c. 889. In accord are Modern Home Institute, Inc. v. Hartford Acc. & Indem. Co. (C.A. 2 1975) 513 F.2d 102, l.c. 109; Premier Elec. Const. Co. v. Miller-Davis Co. (C.A. 7) 422 F.2d 1132, l.c. 1138, cert. denied, 400 U.S. 828, 91 S.Ct. 56, 27 L.Ed.2d 58 (1970).

Attention is also invited to the recent opinion of the Supreme Court of the United States in McLain v. Real Estate Board of New Orleans, Inc., ___ U.S. ___, 100 S.Ct. 502, 62 L.Ed.2d 441 (1980). In that case, the Supreme Court held erroneous the dismissal by the district court of a complaint alleging violation of § 1 of the Sherman Act, 15 U.S.C. § 1. The Supreme Court noted that it "is axiomatic that a complaint should not be dismissed unless `it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.' Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-102, 2 L.Ed.2d 80 (1957)". ___ U.S. at ___, 100 S.Ct. at 511, 62 L.Ed.2d at 453 (1980).

It is upon these legal standards for summary judgment that the motion of Bendix for summary judgment on the antitrust count of the complaint of ASI must be decided.

B. The Question of Monopolization

Section 2 of the Sherman Act, 15 U.S.C. § 2, proscribes monopolization of any part of the trade or commerce among the several states. The United States Supreme Court described the elements of the offense of monopolization in United States v. Grinnell Corporation, 384 U.S. 563, l.c. 570-71, 86 S.Ct. 1698, l.c. 1704, 16 L.Ed.2d 778, l.c. 786 (1966), in which it is stated:

The offense of monopoly under § 2 of the Sherman Act has two elements: (1) the possession of monopoly power in the relevant market and (2) the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident.

See also, L. Sullivan, Handbook of the Law of Antitrust § 7, at 29-30 (1977), discussing the requirements for an action brought under § 2 of the Sherman Act, 15 U.S.C. § 2.

Solely for the purposes of its motion for summary judgment, Bendix accepts the definition of the relevant market, relied on by ASI, as the United States government market for APX-72 transponders (Transcript of oral argument held April 24, 1978 Tr. at 8); the facts alleged in the narrative fact statements of ASI (Bendix Brief at 2); and the fact that Bendix had the requisite intent to monopolize the APX-72 market (Bendix Brief at 2).

Bendix contends that its motion for summary judgment "is founded on the narrow thesis . . . that it neither possessed nor came dangerously close to attaining the requisite power to monopolize Plaintiff's designated APX-72 `market'." (Bendix Brief at 2.) Therefore, Bendix contends that it "cannot, as a matter of law, be found to have violated Section 2 of the Sherman Act." (Bendix Brief at 3, Tr. at 8-9.)

ASI agrees that "the only remaining issue is whether at the time defendant undertook the injurious conduct complained of by plaintiff it possessed monopoly power or a dangerous probability of obtaining such monopoly power." (Tr. at 19, ASI Brief at 17.) However, in opposing the present motion of Bendix for summary judgment, ASI alleges that the "evidence which is admitted for purposes of Bendix's motion for summary judgment is sufficient to permit the jury to infer the existence of monopoly power or dangerous probability of success, and Bendix's motion must therefore be denied." (ASI Brief at 3.)

Monopoly power in the context of this action is the power to control prices or exclude competition. United States v. E. I. du Pont de Nemours & Co., 351 U.S. 377, l.c. 391, 76 S.Ct. 994, l.c. 1005, 100 L.Ed. 1264, l.c. 1278 (1956); United States v. Grinnell Corp., supra, 384 U.S. at 571, 86 S.Ct. at 1704, 16 L.Ed.2d at 786 (1966); TV Signal Co. v. A.T. & T. Co. (C.A. 8 1972) 462 F.2d 1256, l.c. 1261.

Monopoly power can be distinguished from a lesser amount of market power only in degree. Courts have utilized several methods in assessing the power of the defendant in the relevant market to determine whether monopoly power can be inferred from the available evidence or assumed facts.

The traditional and predominant method is to ascertain the percentage share of sales, production, or other measures of productive activity in the total market which is held by the alleged...