Anderson v. American Automobile Association
| Decision Date | 18 February 1972 |
| Docket Number | No. 24195.,24195. |
| Citation | 454 F.2d 1240 |
| Parties | Gerald M. ANDERSON, individually and dba AAA Auto Body Shop, Appellant, v. AMERICAN AUTOMOBILE ASSOCIATION, a corporation; California State Automobile Association, a corporation, Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
William I. Cohen, (argued), William E. Anderson, Jr., Palo Alto, Cal., for appellant.
Seymour Farber, (argued), Matthew P. Mitchell, Marquart, Hutchins & Staiger, San Francisco, Cal., for appellees.
Before MADDEN,* Judge of the United States Court of Claims, MURRAH** and BROWNING, Circuit Judges.
The American Automobile Association (AAA) and the California State Automobile Association (CSAA) sued Gerald M. Anderson, the owner of AAA Auto Body Shop for trademark infringement and unfair competition. Anderson answered and cross-claimed as representative of a class,1 alleging violations of Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 and 2. The gist of the cross-complaint is that AAA and CSAA and certain co-conspirators have illegally removed some 10,000,000 members of the American motoring public from the competitive market for automobile towing and repair services. This anti-competitive effect is said to have been accomplished by: (1) the horizontal and vertical allocation of territories and customers necessarily resulting from contractual arrangements whereby AAA and CSAA sell memberships to the motoring public and agree to provide Emergency Road Service, including free towing of the member's disabled vehicle by independent contractors whom CSAA has designated to perform the towing service; and, (2) encouraging and urging their members not to deal with nonaffiliated competitors.
Anderson appeals from an order of the District Court granting AAA and CSAA's second motion for summary judgment on the cross-complaint, and we are not here concerned with the trademark or unfair competition issues.2 The threshold question is the propriety of the summary judgment.
We review the summary judgment bearing in mind that such procedure is appropriate only when the facts are fully developed and the issues clearly presented. See Nationwide Auto Appraiser Service, Inc. v. Association of C. & S. Co., 382 F.2d 925, 929, (10th Cir. 1967); Tillamook Cheese and Dairy Ass'n v. Tillamook Co. Cream Ass'n, 358 F.2d 115, 117 (9th Cir. 1966). If under any reasonable construction of the evidence and any acceptable theory of law Anderson would be entitled to prevail, a summary judgment against him cannot be sustained. Industrial Bldg. Materials, Inc. v. Interchemical Corp., 437 F.2d 1336, 1340 (9th Cir. 1970); see also Fed.R.Civ.P. 56(c). We are, moreover, cautioned to use this summary device ". . . sparingly in complex antitrust litigation where motive and intent play leading roles. . ." Poller v. Columbia Broadcasting System, 368 U.S. 464, 473, 82 S.Ct. 486, 491, 7 L.Ed.2d 458 (1962). For reasons which we shall point out, we think the record evidence in this case raises issues as to which summary judgment was inappropriate.
After discovery proceedings AAA and CSAA, apparently deeming discovery complete, filed their original motion for summary judgment. The trial court denied this motion without prejudice to its renewal after further discovery to be completed without delay and within 90 days unless extended upon a proper showing. During this 90-day period all of the associations' relevant records were made available for inspection and copying. As a result of his investigation Anderson produced at least three items of evidence reflected on the record as being relevant to his antitrust crossclaim. Whereupon, the associations renewed their motion for summary judgment, alleging that the free and open discovery procedures failed to develop a genuine issue of material fact; that the case was, thus, ripe for summary judgment; and that AAA and CSAA were entitled to a judgment on the undisputed facts and law. Anderson responded, saying that he had not completed his analysis of the documents; that he had not had an opportunity to obtain information based upon the documents from members of the class; and, that in any event, the pretrial discovery had, indeed, developed disputed issues of fact and questions concerning motive and intent. He did not, however, at any time formally request additional discovery beyond the 90-day period allowed, and there is nothing in the record to indicate that the discovery was not free and open or that it was not complete.
The incident giving rise to Anderson's boycott claim also occurred during this 90-day period, and he sought a preliminary injunction against further actions of this type by the associations. The motion for the preliminary injunction and the renewed motion for summary judgment came on for hearing at the same time. After argument the preliminary injunction was denied and the summary judgment granted.
In this posture of the case we will assume that the discovery was complete and that all of the basic proof bearing on Anderson's cross-claim was before the court for its consideration on the motion for summary judgment. But the court's naked order granting the motion discloses no grounds for the judgment, and we are left to speculate as to the reasons underlying the court's decision. Upon consideration of the record before us we agree that the evidence on Anderson's boycott claim did not raise any genuine issues of fact and summary judgment as to it was proper. We think, however, that the basic proof concerning the claimed anti-competitive allocation of territories and customers gave rise to conflicting inferences of fact. As to these issues summary judgment was improper. Inasmuch as the case must be remanded for further consideration, it seems appropriate to express our view of the law applicable to the facts on this record.
AAA and CSAA, organized as nonprofit corporations, are associations composed primarily of individual motorists. Their stated purpose is the general improvement of motoring conditions. Membership in CSAA — whose area of operation is Northern California and parts of Nevada — includes affiliate membership in AAA. At the commencement of this litigation in 1967, CSAA had approximately 875,000 members, while AAA had over 10,000,000.
Among benefits which members are entitled to receive, upon payment of an annual fee, is free towing service if their vehicle should become disabled. CSAA selects independent businesses, such as garages, automobile dealerships and service stations, to provide this towing service. Under the uniform terms of their written agreements with CSAA these "contract stations" are paid for performing the towing service, not by the member, but by the association. At the time this litigation commenced a contract station was paid a flat rate of $3.50 for any towing within a five-mile radius of its location. Provisions were also made for payments of $.50 for each mile traveled outside of this zone and $6.00 for each hour spent in on the spot servicing of the disabled vehicle after an initial 30-minute period.
Each station is assigned a towing territory whose boundaries are determined by the distance from the disabled vehicle to the nearest station. Before responding to a call for service, a contract station must verify that it is the nearest contract station able to provide service. In some metropolitan areas CSAA maintains a central receiving and dispatching service which assigns calls to the nearest available station. Under the terms of their written agreement the association will not pay a contract station for any service performed outside of its towing territory.
Both the membership contracts and the contracts with the stations cover only towing and Emergency Road Service. Any repair work must be arranged and paid for by the member, who is free to have it done by any contract or noncontract station. The free towing service includes taking the member's vehicle to the contract station or to any location within five miles of that station.
In order to become a contract station a business must complete an application form supplied by CSAA. If the applicant meets standards set by the associations it is approved. But not every approved business is designated a contract station. The associations adhere to a policy of strictly limiting the number of contract stations within a given area. Their determination as to how many contract stations are needed is apparently based on such factors as the population, the amount of motor traffic, and the number of AAA and CSAA members within that area. At the time Anderson filed his cross-claim there were 333 contract stations in Northern California, and approximately 518 stations which had made application and met the required standards, but had not been designated contract stations. In the City of Sunnyvale, California, where Anderson's business is located, there were approximately 21,000 CSAA and AAA members and one contract station. Anderson has never applied for appointment as a contract station.
As we read the briefs and understand the oral argument, Anderson does not contend that AAA and CSAA may not contract with their members for Emergency Road Service or that they may not also enter into separate contracts with independent businesses for the performance of the service for a stipulated fee. Rather, he says the arbitrary limitation on the number of contract stations designated to perform Emergency Road Service for association members and the restriction upon the area within which they can perform the services operate to suppress competition, not only for the towing business, but also for the captive repair business which the towing service is said to bring to the door of the contract station. In sum, the vice of the arrangement is said to be the arbitrary exclusion of...
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