Car Carriers, Inc. v. Ford Motor Co.
| Citation | 789 F.2d 589 |
| Decision Date | 29 April 1986 |
| Docket Number | No. 84-1729,84-1729 |
| Parties | 1986-1 Trade Cases 67,078, RICO Bus.Disp.Guide 6252 CAR CARRIERS, INC., Clark Transport Company, Inc., Carrier Equipment Co., Transco Corporation, Transport Terminals, Inc., Selby Transport Co., JPB Corporation, James P. Byrne, and Tykely Investment Co., Plaintiffs-Appellants, v. FORD MOTOR COMPANY, Nu-Car Carriers, Inc., and Norfolk & Western Railway Company, Defendants-Appellees. |
| Court | United States Courts of Appeals. United States Court of Appeals (7th Circuit) |
William D. Brejcha, Sullivan & Associates, Chicago, Ill., for plaintiffs-appellants.
Thomas A. Doyle, Baker & McKenzie, James S. Whitehead, Sidley & Austin, Chicago, Ill., for Ford Motor Co.
Robert M. Gault, Bruce D. Sokler, Peter A. Biagetti, Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, Boston, Mass., Sheldon Davidson, Peterson & Houpt, Chicago, Ill., for Nu-Car Carriers, Inc.
Before COFFEY and RIPPLE, Circuit Judges, and CAMPBELL, Senior District Judge. *
In this case, we are asked to decide whether the present litigation is barred by an earlier lawsuit under the doctrine of res judicata. For the reasons which follow, we hold that the present suit is barred by the earlier judgment and, accordingly, affirm the judgment of the district court.
In 1982, Car Carriers, Inc. (Car Carriers) and six related entities 1 brought an action against Ford Motor Company (Ford) and Nu-Car Carriers, Inc. (Nu-Car). Count I of the six count complaint (1982 Complaint) accused Ford and Nu-Car of conspiring in violation of the Sherman Act, 15 U.S.C. Sec. 1. The remaining five counts asserted pendent state law claims.
The district court dismissed the entire action. Car Carriers, Inc. v. Ford Motor Co., 561 F.Supp. 885, 889 (N.D.Ill.1983). The court found the antitrust claim lacking because the plaintiffs failed "to suffer the type of harm the antitrust laws were designed to recompense." Id. at 887. Further, since the court found that this defect was "noncurable," the antitrust claim was dismissed with prejudice. Having dismissed the complaint's only federal claim, the district court declined to exercise pendent jurisdiction over the remaining state law claims and dismissed them without prejudice. On appeal, a panel of this court affirmed the district court's decision in all respects. Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101 (7th Cir.1984).
Undaunted by their first unfruitful journey through the federal courts, Car Carriers and its related entities 2 filed the present action on October 25, 1983 (1983 Complaint). The 1983 Complaint consisted of twenty-four counts: Counts I-VI alleged violations of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. Sec. 1961 et seq.; Count XXIV alleged a violation of the Interstate Commerce Act, 49 U.S.C. Secs. 11902-11904; the remaining seventeen counts alleged violations of Illinois law.
The district court again dismissed the entire action. Car Carriers, Inc. v. Ford Motor Co., 583 F.Supp. 221, 229 (N.D.Ill.1984). The court held that the federal claims arose from the same "basic fact situation" as that alleged in support of the 1982 Complaint's antitrust claim and, therefore, were barred by the doctrine of res judicata. 3 For reasons which are not relevant here, this dismissal was without prejudice. 4 The state law claims were again dismissed without prejudice as not pendent to any valid federal claim. After unsuccessful attempts to clarify or amend the district court's judgment, 5 this appeal followed.
Before addressing Car Carriers' substantive claims, it will be helpful to set out the occurrences which sparked the 1982 Complaint--the initial litigation in this matter. As set forth in that complaint, from 1968 until 1981, Car Carriers transported new Ford vehicles from Ford's plants and railheads in the Chicago area. As a transport company, Car Carriers was regulated by both the Illinois and Interstate Commerce Commissions; accordingly, Car Carriers' rates were subject to approval by both agencies. The complaint alleged that Ford had the power to control these rates either by formally opposing any rate increase sought before the agencies or by simply terminating the carrier.
According to Car Carriers, as early as 1975, Ford and its alleged co-conspirators entered into contracts and continuing combinations which were designed to restrain trade in the business of providing haul-away motor transportation for new Ford automobiles. As explained in this court's earlier opinion, Car Carriers accused Ford of employing the following method to implement its goal:
First, the carrier selected for elimination (the so-called "target carrier") would be required to make substantial investments in new tractor-trailer equipment, real estate, and new terminal facilities. In return, Ford would promise additional transportation traffic and "complete agreement with increased tariff rates necessary to pay for these acquisitions." After the "target" carriers had made these investments, however, Ford would then prevent them from obtaining the rate increases necessary for profitable operations.
Second, Ford, with support of other carriers, "[i]nterfered with and prevented [the] target haulaway carriers and their affiliates from selling their businesses and assets as going business concerns or prevented [the] target haulaway carriers from consolidation or merger with other carriers." Finally, Ford would apparently terminate its relationship with the target carrier at this point, thereby allowing the favored carriers to "acquire the businesses and assets of [the target carriers] at distress prices or for less than fair market value as going business concerns."
745 F.2d at 1104-05 (citations omitted).
Car Carriers further averred that its demise generally followed the pattern just described:
In 1975, Ford directed ... Car Carriers to sell ... [its] assets and business to a second Ford carrier. After Car Carriers had entered into negotiations for a sale with the E & L Transport Co. ..., however, Ford "unreasonably interfered with and prevented" the consummation of the agreement by inducing the corporate parent of E & L to repudiate an executed letter of intent. In 1977 and 1978, Ford induced Car Carriers to purchase over $6,000,000 worth of new tractor-trailer equipment with the promise that Car Carriers "would be able to recover the cost of such equipment with additional transport business and higher tariff rates." However, during the entire period of 1975 to 1981, Ford caused Car Carriers's operations in Chicago to be unprofitable through its "refusal to allow adequate published tariff rates or other compensation" for Car Carriers and by "refusing to allow adequate temporary rate adjustments."
In 1979, Ford prevented Car Carriers from acquiring the outstanding stock of Automobile Transport, Inc. ("ATI"), which was at that time Ford's carrier in Wayne, Michigan and other areas. This action by Ford "prevented a carrier consolidation which would have generated valuable backhaul business and resulted in significant operating efficiencies and cost reduction benefits" to ATI, Car Carriers, and Ford. Later that year, Ford terminated ATI and awarded the substantial portion of ATI's business to Nu-Car and E & L on the basis of "sham and knowingly predatory bids."
In 1981, Ford solicited bid proposals for Chicago haulaway services from Car Carriers and other Ford transporters. In October of that year, Ford terminated Car Carriers and awarded the haulaway contract for the Chicago area to Nu-Car on the basis of the latter's "sham and knowingly predatory bid." To minimize the losses from the termination, Car Carriers attempted to sell its facilities and other assets to Nu-Car. However, the effort was frustrated when Ford and Nu-Car insisted on "walkaway and other onerous provisions ... as well as unacceptable covenants and releases" of Car Carriers's claims against Ford, Nu-Car, and Associated Transport, Inc.; Nu-Car eventually constructed its own terminal facility near the Ford plant on land provided by Ford.
745 F.2d at 1105 (citations omitted).
In this litigation, the appellants present three issues for our review. First, they ask that we reject the district court's fact-oriented test for res judicata in favor of an analysis which would differentiate causes of action based on the rights, duties, and injuries allegedly redressed by each claim. Second, assuming we adopt the district court's approach, the appellants ask that we relieve them of their res judicata burden because some of their claims were based on facts which--while admittedly in existence prior to the 1982 Complaint--were unknown to them until after judgment on that complaint. Finally, the appellants argue that some of the claims alleged in their 1983 Complaint were within the exclusive jurisdiction of the Illinois Commerce Commission and, thus, improperly before the district court. Accordingly, since the district court would have been without jurisdiction if these claims were alleged in the 1982 Complaint, the appellants urge us to lift the res judicata bar. Such a remedy is warranted, according to the appellants, to avoid foreclosing recovery on a claim which never could have been addressed in a federal court.
The district court found that the federal claims alleged in the 1983 Complaint arose out of the same factual context as described in the 1982 Complaint. Thus, the court dismissed these claims as barred by the doctrine of res judicata. The appellants do not disagree with the district court's finding that both complaints arose out of a common core of operative fact; rather, they attempt to overturn the district court's decision by persuading us to adopt an alternate formulation for determining the application of res judicata. Under this alternate test, res judicata would not bar a second lawsuit when "[a]n analysis of the rights, duties, and injuries involved in the second...
To continue reading
Request your trial
-
LB Steel, LLC v. Walsh Constr. Co. (In re LB Steel, LLC)
...has caused injury, all claims arising from that transaction must be brought in one suit or be lost." Car Carriers, Inc. v. Ford Motor Co. , 789 F.2d 589, 593 (7th Cir. 1986). Applying the federal definition of "cause of action" to the matter here, the Court finds that the complaint in the F......
-
Wabash Valley Power Ass'n, Inc. v. Rural Electrification Admin.
...814 F.2d 1226, 1230-31 (7th Cir.), cert. denied, 484 U.S. 928, 108 S.Ct. 294, 98 L.Ed.2d 254 (1987) (quoting Car Carriers, Inc. v. Ford Motor Co., 789 F.2d 589, 593 (7th Cir.1986)). For purposes of claim preclusion, "[e]very [matter] which was within the issues, and which, under the issues,......
-
In re Guy
...the federal rule of res judicata or claim preclusion where prior litigation was brought in federal court, Citing, Car Carriers, Inc. v. Ford Motor Co., 789 F.2d 589, 593, whereby the Court applied the "operative facts" or "same transaction" test to define "cause of action" and holding that ......
-
In re Republic Fabricators, Inc.
...Dist., supra, 773 F.2d at 854 (7th Cir.1985). Accord, Matter of Energy Co-op, Inc., supra, 814 F.2d at 1230; Car Carriers, Inc. v. Ford Motor Co., 789 F.2d 589, 593 (7th Cir.1986); Lee v. City of Peoria, supra, 685 F.2d There is no doubt that LB & B seeks its fees from the Bank under the sa......
-
Collateral Estoppel and Prima Facie Effect
...did not submit misleading data to an agency precludes a Section 2 claim based on the same conduct); Car Carriers, Inc. v. Ford Motor Co., 789 F.2d 589, 593-96 (7th Cir. 1986) (RICO case dismissed when claim was based on same facts as dismissed Section 1 action); Tocci Building Corp. v. Zuri......
-
GROUPS AND RIGHTS IN INSTITUTIONAL REFORM LITIGATION.
...Cir. 2008); RESTATEMENT (SECOND) OFJUDGMENTS [section] 25 cmt. f (AM. L. INST. 1982). (120) E.g., Car Carriers, Inc. v. Ford Motor Co., 789 F.2d 589, 593 (7th Cir. (121) Tobias Barrington Wolff, Preclusion in Class Action Litigation,105 COLUM. L. REV. 717, 743-44 (2005). Cooperv. Federal Re......
-
Table of Cases
...1954), 75 Capital Tel. Co. v. New York Tel. Co., 146 A.2d 312, 540 N.Y.S.2d 895 (3d Dep’t 1989), 247 Car Carriers, Inc. v. Ford Motor Co., 789 F.2d 589 (7th Cir. 1986), 247 In re Cardizem CD Antitrust Litig., 105 F. Supp. 2d 682 (E.D. Mich. 2000), aff’d , 332 F.3d 896 (6th Cir. 2003), 62 Ca......
-
Contemplating the successive prosecution phenomenon in the federal system.
...113 S. Ct. 1586 (1993) (stating that the Seventh Circuit has utilized the transactional approach); Car Carriers, Inc. v. Ford Motor Co., 789 F.2d 589, 593 (7th Cir. 1985) (stating that the transactional test is decidedly fact-oriented); Armstrong v. Norwest Bank, Minneapolis, N.A., 964 F.2d......