Arnold Pontiac-GMC, Inc. v. Budd Baer, Inc.

• Decision Date: 28 April 1986
• Docket Number: PONTIAC-GM,INC,No. 85-3602,85-3602
• Parties: 1987-2 Trade Cases 67,679 ARNOLD, Appellant, v. BUDD BAER, INC. t/d/b/a Budd Baer Buick-Pontiac, a Pennsylvania corporation, William L. Oliverio, an individual t/d/b/a Oliverio Buick-Opel and Oliverio Buick-Opel, Inc., a Pennsylvania corporation, successor to William L. Oliverio, t/d/b/a Oliverio-Buick-Opel, Samson Buick Co., Corporation, a Pennsylvania corporation, and Leebro Management, Inc., a Pennsylvania corporation t/a/d/b/a Samson Buick Co., Successor to Samson Buick Co., and Massey Buick, Inc., a Pennsylvania corporation. . Submitted Under Third Circuit Rule 12(6)
• Court: U.S. Court of Appeals — Third Circuit

Page 1335

826 F.2d 1335

1987-2 Trade Cases 67,679

ARNOLD PONTIAC-GMC, INC., Appellant, v. BUDD BAER, INC. t/d/b/a Budd Baer Buick-Pontiac, a

Pennsylvania corporation, William L. Oliverio, an individual

t/d/b/a Oliverio Buick-Opel and Oliverio Buick-Opel, Inc., a

Pennsylvania corporation, successor to William L. Oliverio,

t/d/b/a Oliverio-Buick-Opel, Samson Buick Co., Corporation,

a Pennsylvania corporation, and Leebro Management, Inc., a

Pennsylvania corporation t/a/d/b/a Samson Buick Co.,

Successor to Samson Buick Co., and Massey Buick, Inc., a

Pennsylvania corporation.

No. 85-3602.

United States Court of Appeals,

Third Circuit.

Submitted Under Third Circuit Rule 12(6)

April 28, 1986.

Assigned Aug. 1, 1987.

Decided Aug. 24, 1987.

Gordon F. Harrington and Belinda Dunmire Attwood, Greenlee, Derrico, Posa, Harrington & Rodgers, Washington, Pa., for appellant.

Stewart M. Flam, Dickie, McCamey & Chilcote, P.C., and David Max Baer, Pittsburgh, Pa., for appellees Budd Baer, Inc. and William L. Oliverio, Oliverio Buick-Opel, Inc.

Bernard D. Marcus, Daniel H. Shapira and Susan A. Gromis, Titus, Marcus & Shapira, Pittsburgh, Pa., for appellee Massey Buick, Inc.

Before SLOVITER and STAPLETON, Circuit Judges, and LONGOBARDI, District Judge ^*.

OPINION OF THE COURT

SLOVITER, Circuit Judge.

I.

Appellant Arnold Pontiac-GMC, Inc. (Arnold Pontiac), an automobile dealer with a Pontiac and GMC truck franchise, brought this antitrust action against four automobile dealers with Buick franchises from the same area, ¹ alleging that the defendants had conspired together and with General Motors Corporation (GMC) to prevent Arnold Pontiac from receiving a franchise to sell Buick automobiles. Arnold Pontiac claimed that the alleged conspiracy violated sections 1 and 2 of the Sherman Act, 15 U.S.C. Secs. 1 & 2. The district court granted summary judgment for the defendants.

Briefly, the facts alleged are that from 1969 to 1980, Arnold Pontiac, an authorized dealer of Pontiac automobiles and GMC trucks, sought to add a Buick franchise to its dealership in Houston, Pennsylvania. Prior to 1980, GMC had refused to award such a franchise unless Robert S. Arnold, the co-owner of Arnold Pontiac, agreed to provide a more modern facility in a more desirable location. In February 1980, Arnold again applied to GMC for a Buick franchise, stating that he had made substantial improvements to his existing facility. GMC officials then visited the site. Although Arnold was never explicitly told he would be awarded a franchise, he was given order forms for new Buicks.

On April 3, 1980, the Better Buy Buick Association, an organization of Pittsburgh area Buick dealers, held a sales promotion meeting with R.F. Pfeiffer, who was Buick's Assistant Zone Manager for Pittsburgh. Pfeiffer prepared a memorandum to G.B. Shane, the Zone Manager for Buick in Pittsburgh, reporting that at the conclusion of the sales promotion meeting, he had a meeting with Messrs. Gray, Oliviero, Baer and Samson (representatives of each of the four defendant dealers) which was requested by Gray "to discuss Buick's closing of the open point in Canonsburg, Pa." The "open point" apparently refers to the absence of any Buick dealer in the Canonsburg area.

The Pfeiffer memorandum reported that Samson, one of the dealers, told Pfeiffer that the "Advertising Dealer Group" had a meeting "and agreed" that if Buick granted a new franchise in Arnold's area, "they, as a group would take action not to purchase any of [Buick's] programs or cooperate with us in any of our endeavors." App. at 110. According to the memorandum, the dealer representatives questioned Pfeiffer in particular concerning the plan to give a Buick franchise to Arnold Pontiac. Pfeiffer reported that he gave them no information, and stated:

They may want to meet with you and myself this next week some time to review our position. I also advised them that it was their prerogative to take what action they deemed necessary, but I first suggested that they discuss this situation with you. Mr. Gray asked that you call him Monday some time.

App. at 111.

Shortly thereafter, Shane returned to Arnold the order forms for new Buicks that Arnold had filled out. Shane explained that Buick had not yet acted on his franchise application. In September 1980, Buick officials informed Arnold that his facility was inadequate. At that time, Arnold was asked to sign a "Facility Modification" letter, which would obligate him to build or acquire new facilities within three years. Arnold apparently refused to do so. In January 1981, Arnold was told that his franchise application had been rejected.

Arnold Pontiac then filed an action against GMC, alleging that GMC's actions violated the Sherman Act and the Automobile Dealers' Day in Court Act, 15 U.S.C. Secs. 1221-25 (1982). After the district court granted summary judgment for GMC on the Sherman Act count in that case, plaintiff instituted a second action against the dealers, filing the complaint in this case.

Arnold Pontiac's complaint seems to contain two claims. First, it claims that the defendants "combined and conspired with each other and with General Motors Corporation in restraint of trade" to prevent Arnold Pontiac from receiving a Buick franchise. Complaint p 18, App. at 10. Arnold Pontiac's brief explains this paragraph as alleging a "horizontal market allocation" in violation of section 1 of the Sherman Act. See Brief of Appellant at 24. Its brief also characterizes defendants' activity as a "group boycott". See id. at 26. We are unable to determine from the sparse allegations of plaintiff's complaint and its brief whether it regards these terms as synonymous. Arnold Pontiac's second claim is that defendants have conspired to monopolize in violation of section 2 of the Sherman Act. Neither Arnold Pontiac's complaint nor its brief elaborates on this claim.

The district court granted summary judgment for defendants in two brief orders. The first order, dated October 4, 1985, gave summary judgment for all defendants except Samson Buick. ² This order contains no explanation of the basis for the court's decision, other than a citation to the Supreme Court's opinion in Monsanto Co. v. Spray-Rite Service Corp., 465 U.S. 752, 104 S.Ct. 1464, 79 L.Ed.2d 775 (1984). App. at 315. Samson Buick then moved for summary judgment stating that it is situated in exactly the identical position as the other defendants. On October 11, 1985, the district court gave summary judgment for Samson Buick in a one line order.

Thereafter, on Arnold Pontiac's appeal, this court reversed the district court's grant of summary judgment for the defendant GMC in the first suit. Arnold Pontiac-GMC, Inc. v. General Motors Corp., 786 F.2d 564 (3d Cir.1986) (hereafter Arnold Pontiac I ). GMC filed a petition for rehearing. We stayed consideration of that petition pending this court's reconsideration on remand from the Supreme Court in In re Japanese Elec. Prods. Antitrust Litig., 723 F.2d 238 (3d Cir.1983), rev'd and remanded sub nom., Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986), and Tunis Bros. Co. v. Ford Motor Co., 763 F.2d 1482 (1985), vacated and remanded for further consideration in light of Matsushita, --- U.S. ----, 106 S.Ct. 1509, 89 L.Ed.2d 909 (1986). As a result, we stayed our decision in this case pending disposition of the petition for rehearing in Arnold Pontiac I.

This court then issued the following opinions in turn. First, on remand of Matsushita, we held that there was no additional evidence on the issue of conspiracy beyond that considered by the Supreme Court, and we therefore affirmed the grant of summary judgment for the defendants. In re Japanese Elec. Prods. Antitrust Litig., 807 F.2d 44, 48 (3d Cir.1986), cert. denied, --- U.S. ----, 107 S.Ct. 1955, 95 L.Ed.2d 527 (1987). Second, on reconsideration following remand in Tunis, we held that our initial opinion reversing the district court's grant of summary judgment and remanding the matter for trial was consistent with the requirements of Matsushita. Tunis Bros. Co. v. Ford Motor Co., 823 F.2d 49, 50-51 (3d Cir.1987). Finally, GMC's petition for rehearing in Arnold Pontiac I was denied by this court on July 29, 1987. It is now timely for us, after this long hiatus, to consider Arnold Pontiac's contention that the district court erred in granting summary judgment for the defendants in this case.

II.

In the only authority cited by the district court in its order granting summary judgment, Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 764, 104 S.Ct. 1464, 1470, 79 L.Ed.2d 775 (1984), the Court held that a plaintiff seeking damages for violation of section 1 of the Sherman Act must present evidence "that tends to exclude the possibility" that the alleged conspirators acted independently. During the pendency of this appeal, defendants filed letter memoranda arguing that additional support for the district court's order is provided by the Supreme Court's later decision in Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). In Matsushita, the Supreme Court "again consider[ed] the standard district courts must apply when deciding whether to grant summary judgment in an antitrust conspiracy case." 106 S.Ct. at 1351. The plaintiff in such a case must establish that there is a genuine issue of material fact as to whether defendants entered into a conspiracy in violation of the antitrust laws that caused plaintiff cognizable injury. Id. at 1355-56.

In Matsushita, because there was no direct evidence of the conspiracy that allegedly caused the plaintiffs their injury, a conspiracy to monopolize the American market through predatory pricing, plaintiffs had to rely on inferences from circumstantial evidence. The Court reiterated the holding of Monsanto that if the defendant's conduct is consistent both with permissible...