Aviation Specialties, Inc. v. United Technologies Corp.

• Decision Date: 06 March 1978
• Docket Number: No. 76-2666,76-2666
• Citation: 568 F.2d 1186
• Parties: 1978-1 Trade Cases 61,911 AVIATION SPECIALTIES, INC., Plaintiff-Appellant, v. UNITED TECHNOLOGIES CORPORATION, Defendant, Pratt-Whitney Aircraft of Canada, Ltd., and Airwork Division of Pacific Airmotive, Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1186

568 F.2d 1186

1978-1 Trade Cases 61,911

AVIATION SPECIALTIES, INC., Plaintiff-Appellant, v. UNITED TECHNOLOGIES CORPORATION, Defendant,

Pratt-Whitney Aircraft of Canada, Ltd., and Airwork Division

of Pacific Airmotive, Inc., Defendants-Appellees.

No. 76-2666.

United States Court of Appeals, Fifth Circuit.

March 6, 1978.

Douglas R. Padgett, Atlanta, Ga., for plaintiff-appellant.

R. L. Edwards, Charles A. Kimbrell, Richard Alan Arnold, Miami, Fla., for Pratt-Whitney.

Harry Kemker, Michael Addison, Tampa, Fla., for Airwork Div., Etc.

Appeal from the United States District Court for the Southern District of Florida.

Before TUTTLE, CLARK and RONEY, Circuit Judges.

CHARLES CLARK, Circuit Judge:

Plaintiff, Aviation Specialties, Inc. (ASI), appeals the district court's grant of summary judgment on its multiple antitrust claims against the defendants, Pratt-Whitney Aircraft of Canada, Ltd. (Pratt-Whitney) ¹ and Airwork Division of Pacific Airmotive, Inc. (Airwork). ASI asserts that the district judge abused his discretion by curtailing discovery, that genuine issues of material fact remained requiring resolution at trial, and, therefore, that summary judgment was improper. Finding no merit in these claims, we affirm.

Only Pratt-Whitney manufactures the popular PT-6 jet turbine engine, which it introduced in 1964. Within a year, Pratt-Whitney set up a distributorship system in the United States for sale of repair parts which designated three distributors: Pacific Airmotive, Inc., Dallas Airmotive (subsequently acquired by Cooper Industries, Inc.), and Pratt-Whitney's co-defendant, Airwork. ² Under the distributorship plan, Pratt-Whitney sold parts only through the distributors or original equipment manufacturers (OEMs). Distributors and OEMs could obtain parts at list minus 40%, except that OEMs with an international distribution network could receive a 55% Discount. ³ Terms of the distribution agreement did not bind Pratt-Whitney not to add other distributors. While Pratt-Whitney sold no unembodied spare parts except through its distributors, it maintained a shop where it performed work on PT-6 parts or engines sent to it under repair contracts. On this work Pratt-Whitney offered ASI the same terms it offered to its distributors: a 25% Discount on embodied parts, plus a labor charge.

ASI began operations in 1965, but the Federal Aviation Administration (FAA) did not certify it to overhaul PT-6 engines until May 1972. While many shops perform major and minor repairs on the PT-6, only three shops other than ASI are certified by FAA to perform overhauls: Pacific Airmotive, Cooper Industries, and the defendant Airwork. Because Pratt-Whitney designated these latter three shops as distributors for PT-6 parts, parts were sold directly to them at a 40% Discount. ASI could buy unembodied Pratt-Whitney PT-6 parts only from one of Pratt-Whitney's designated distributors at a lesser discount of 20% From the list price.

ASI demanded that Pratt-Whitney either sell its parts directly at a 40% Discount or include it as a distributor. Pratt-Whitney refused and ASI initiated this action asserting five legal theories against its competitor Airwork and against Pratt-Whitney: (1) an alleged conspiracy to monopolize by Airwork and Pratt-Whitney which ASI contends was designed to obtain a monopoly for Airwork over PT-6 engine repair in violation of Section 1 of the Sherman Act, 15 U.S.C.A. § 1; (2) an alleged attempt to monopolize the repair of PT-6 engines by Airwork in violation of Section 2 of the Sherman Act, 15 U.S.C.A. § 2; (3) an alleged conspiracy between Pratt-Whitney and Airwork unreasonably to restrain trade in the repair of PT-6 engines in violation of Section 1 of the Sherman Act, 15 U.S.C.A. § 1; (4) alleged price discrimination by Pratt-Whitney between the sale of embodied parts to ASI and replacement spare parts to Airwork in violation of Section 2(a) of the Clayton Act, as amended by the Robinson-Patman Act, 15 U.S.C.A. § 13(a); and (5) alleged inducement of this price discrimination by Airwork in violation of Section 2(f) of the Clayton Act, as amended by the Robinson-Patman Act, 15 U.S.C.A. § 13(f). The district court held that ASI had not shown a genuine issue of material fact to withstand summary judgment on any of these theories.

ASI first challenges summary judgment in favor of the defendants because the district judge, in refusing ASI's request for a continuance, curtailed discovery too soon for full development of the factual issues in the case. The grant or denial of a continuance rests with the discretion of the district court, and appellate review aims only at determining whether the district judge abused that discretion. United States v. 110 Bars of Silver,508 F.2d 799, 801 (5th Cir. 1975), cert. denied, sub nom. Resnick v. United States, 423 U.S. 861, 96 S.Ct. 118, 46 L.Ed.2d 89 (1975). We find no abuse of discretion in the case at bar because plaintiff failed to proceed promptly with the discovery he sought, a significant amount of discovery took place notwithstanding plaintiff's lack of diligence, and the substance of plaintiff's disallowed discovery requests, under the circumstances, indicated that the further discovery sought would not be helpful.

ASI filed this action on May 8, 1975. On November 13, 1975, when the district judge set the date of the pre-trial conference, plaintiff had not initiated any discovery, even though its action then had been on file for six months. When the district court ordered the parties to complete discovery by January 23, 1976, counsel for ASI alleged surprise at the setting of such an "early" date. Despite the shock, ASI took no immediate steps to secure information from the defendants. Rather, it was not until December 1, 1975, that ASI filed notice to depose Pratt-Whitney officials, and it was December 8, 1975, before ASI submitted its first proper set of interrogatories ⁴ and first request for the production of documents. Subsequently, ASI directed untimely interrogatories, which the district court disallowed, to both defendants on December 30, 1975; to Pratt-Whitney alone, also on December 30, 1975; and to Airwork alone on January 15, 1976, coupled with a request for the production of documents. Although the requests were submitted prior to the deadline for termination of discovery, the reply dates would have fallen beyond the date for termination of discovery.

ASI obtained a large quantity of information from its timely requests and from its deposition of defendants' officers. ASI argues that a number of pre-trial motions occupied counsel's time and that the parties did not truly join issue in the case until after the November 13, 1975, order setting the date for the pre-trial conference. The discovery requests disallowed by the district court show no relevant request of consequence for which ASI could not have anticipated its need at the time it filed its complaint. Plaintiff must bear the consequences of its decision to proceed with discovery piecemeal.

A plaintiff's entitlement to discovery prior to a ruling on a motion for summary judgment is not unlimited. When the record becomes clear enough to disclose that further discovery is not needed to develop significant aspects of the case and that such discovery is not likely to produce a genuine issue of material fact, discovery should be ended. Universal Brands, Inc. v. Philip Morris, Inc., 546 F.2d 30, 36 (5th Cir. 1977); Littlejohn v. Shell Oil Co., 483 F.2d 1140, 1145 (5th Cir. 1973), cert. denied, 414 U.S. 1116, 94 S.Ct. 849, 38 L.Ed.2d 743 (1973). To excuse the failure to submit discovery requests promptly, counsel for ASI advances the mistaken belief that discovery in an antitrust case must invariably continue in successive waves over many years. Any complex litigation may produce a need for lengthy or successive discovery procedures, but the case at bar does not lie in that category. The parties agreed on the basic facts surrounding the operation of the Pratt-Whitney distribution system and differed only about the inferences which could be drawn from those facts. Neither ASI's disallowed requests for discovery nor its motion to continue the pre-trial conference suggest any potential factual issue in the suit which further discovery would have illuminated so as to preclude summary judgment. Additionally, ASI's December 30, 1975, interrogatories to Pratt-Whitney appear to be nothing more than a thinly veiled attempt to enhance the strike capability of its suit. ⁵ Yet, while seeking additional discovery of dubious relevance from the defendants, ⁶ ASI sought to evade the defendants' requests for disclosure of its acknowledged alternative supplier of discount parts information key to a possible defense to attempted monopolization. ⁷ Under these circumstances, we hold that the district judge did not abuse his discretion in declining to lengthen the time allotted for discovery. ⁸

ASI's claim that Airwork induced unlawful price discrimination under Section 2(f) of the Clayton Act, as amended by the Robinson-Patman Act, depends upon a showing that Pratt-Whitney engaged in unlawful price discrimination under Section 2(a). ASI asserts these claims in the alternative to its Sherman Act claims. ASI's Sherman Act claims rest on Pratt-Whitney's refusal to sell ASI any PT-6 parts. The unlawful price discrimination claims assume that when Pratt-Whitney agreed to do repair work for ASI on PT-6 engines and to charge the cost of its labor plus embodied parts at list minus 25%, it sold commodities. It is then postulated that these parts sales discriminated against ASI relative to Pratt-Whitney distributors who could buy unembodied parts at list less 40%. The parties agree that Pratt-Whitney charged all overhaul shops on the same basis: the cost of labor plus parts used at list less a 25% Discount. ⁹

The district court correctly applied the "dominant nature of the transaction" test from Tri-State...