Coleman Motor Company v. Chrysler Corporation
| Decision Date | 29 March 1974 |
| Docket Number | Civ. A. No. 68-819. |
| Citation | 376 F. Supp. 546 |
| Parties | COLEMAN MOTOR COMPANY, a Pennsylvania Corporation v. CHRYSLER CORPORATION and Chrysler Motor Corporation. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
COPYRIGHT MATERIAL OMITTED
Gerald Ziskind, Robert E. Wayman, Pittsburgh, Pa., for plaintiff.
Edmund K. Trent, Pittsburgh, Pa., for defendants.
This matter comes before the Court on Defendants' Motion for Judgment Notwithstanding the Verdict and Alternatively for a New Trial. For the reasons as hereinafter set forth both Motions will be denied.
BACKGROUND.
Plaintiffs, Coleman Motor Company, a corporation, and Clarence Coleman, its President and sole stockholder, filed this anti-trust suit against Chrysler Corporation, the manufacturer of Chrysler, Plymouth and Dodge vehicles, and Chrysler Motor Corporation, its wholly owned sales subsidiary (which parties have been considered primarily as one entity and will be referred to as "Chrysler"), charging violations of Sections 1 and 2 of the Sherman Act. The individual Plaintiff was dropped as a party before the trial began. The Court denied Defendants' Motion for Directed Verdict at the close of all of the evidence and the case was submitted to the jury on Special Interrogatories asking:
(1) Whether Defendants had engaged in any combination or conspiracy which restrained trade in Dodge vehicles at the retail level in Allegheny County, Pennsylvania?
(2) Whether Defendants had attempted to monopolize trade in Dodge vehicles at the retail level in Allegheny County, Pennsylvania?
(3) Whether the Plaintiff had sustained any damages by reason of any such violation of the anti-trust laws, and if so, how much?
The jury answered the three questions in the affirmative and fixed the amount of the Plaintiff's damages at $300,000.00. Judgment was entered for Coleman Motor Company for $900,000.00 on November 9, 1973, and the Defendants duly filed Motions for Judgment N.O.V. and for a New Trial.
A large part of the evidence offered at the trial was stipulated or uncontradicted, and the weight of the evidence strongly sustained the contention of the Plaintiff that there was an anti-trust violation arising out of destructive competition by other Dodge Dealerships in Allegheny County wholly or partially owned by the Defendants, which resulted in the necessity to surrender the Coleman franchise on July 17, 1969.
Coleman became a Dodge and Plymouth Dealer in 1955, with capitalization of $75,000.00 supplied by Mr. Coleman and another individual. In the Fall of 1959 (the beginning of the 1960 automobile model year) Coleman's Agreement, as well as the Agreements of most Dodge-Plymouth Dealers, was amended so that Coleman henceforth was solely a Dodge Dealer and others became Plymouth Dealers. To take the place of the smaller model Plymouths, Chrysler furnished a new model Dodge, the Dodge Dart, which had good public acceptance.
Prior to 1954, Chrysler had sold its automotive products to privately financed dealers for resale to the public. In 1954 Chrysler adopted a new plan for franchising known as the "Dealer Enterprise Plan" (hereinafter called D.E.) whereby it would furnish to one desiring to become a dealer, 75% of the money needed to open a dealership and the individual would supply 25%. This plan was developed in response to an imperative to increase the quantity of sales and, because individuals were finding it more and more difficult to raise sufficient capital to become dealers. Under D.E. the individual would become the President and General Manager of the local corporation and a Member of its Board of Directors. This local person was to be entitled to an annual bonus of 25% of the corporation's profits before taxes, but was subject to the obligation to use one-half of the bonus in buying Chrysler's investment, represented by stock in the local corporation.
D.E. did not provide a complete solution to the problem because many individuals who desired to become Chrysler Dealers found difficulty in supplying even 25% of the capital necessary to open a dealership. Chrysler was experiencing declining sales and an inability to secure dealers. In 1958 it had sustained net losses of $34,000,000.00 and in 1959 they had losses of $5,000,000.00. Its share of the United States' automobile market dropped from 20% to 10%.
Thus, in 1961, Chrysler broadened its dealer franchising arrangements so as to supply initially 100% of the capital necessary to open a dealership, such dealerships being known as "Contractual Dealerships" (hereinafter called Contractual); this plan covered the situation until the Manager, either through profits or from other sources, purchased 25% of the stock and could thus come under D.E. In 1964, Chrysler further broadened the plan to lend the individual up to one-half of the money necessary to enable him to buy 25% of the stock to participate in D.E.
As a result of the success of the Contractual and D.E. Plans, the total number of Dodge Dealerships rose from 2559 at the end of 1961 to 3135 in 1972, of which 3004 were Private Capital Dealerships. While the number of new Private Capital Dodge Dealerships appointed each year varied between 101 and 525, the new Dodge Dealerships wholly or partially financed by Chrysler did not exceed 83. During the same period, that is from 1961 to 1972, Chrysler's share of the United States' automobile market rose from 10.8% to 14.4%, and the Dodge sales increased from 3.9% to 5.7%. This is the general background for our analysis of the situation in the instant case.
DISCUSSION.
In the subsequent discussion, we apply the well recognized rule of law that the verdict winner is entitled to the benefit of all evidence in its favor, regardless of who produced that evidence, and all favorable inferences deducible therefrom. United States v. Evers, 448 F.2d 863 (3rd Cir. 1971); Neville Chemical Company v. Union Carbide Corporation, 422 F.2d 1205 (3rd Cir. 1970), cert. denied 400 U.S. 876, 91 S.Ct. 51, 27 L.Ed.2d 55; Jarka Corp. v. Mitsui Zempaku K.K., 405 F.2d 763 (3rd Cir. 1967), cert. denied 394 U.S. 920, 89 S.Ct. 1195, 22 L.Ed.2d 453; Walsh v. Miehle-Goss-Dexter Inc., 378 F.2d 409 (3rd Cir. 1967); Globe Motors, Inc. v. Studebaker-Packard Corporation, 328 F. 2d 645 (3rd Cir. 1964); Bruce Lincoln-Mercury, Inc. v. Universal C.I.T. Credit Corp., 325 F.2d 2 (3rd Cir. 1963).
The first count of the Complaint dealt with the charge that Chrysler was in violation of Section 1 of the Sherman Act, which in relevant part reads as follows:
"Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, * * * is declared to be illegal:" (15 U.S.C. A. § 1)
The Plaintiff's position is that Chrysler did not have the right to destroy Coleman's franchise through competition of its wholly or partially owned dealerships; Chrysler admits that between November of 1961 and April of 1962, three Contractual Dodge Dealerships were opened in Allegheny County, the relevant market. The first, Baum Boulevard Dodge, began business late in 1961, became a D.E. Dealer in 1965 but reverted to Contractual status at the end of 1966. The second and third Contractual Dealerships, Hillside Dodge and Cloverleaf Dodge, became D.E. Dealerships in 1965. They subsequently went out of business in 1967 and 1968. A fourth Contractual Dodge Dealership, McKnight Road Dodge, was opened in 1970. In addition to the above Contractual Dealerships, three D.E. Dealerships were opened in Allegheny County: Southland Dodge in 1964, St. Clair Dodge in 1965, and Monroeville Dodge in 1966. The individual Manager of St. Clair Dodge completed the purchase of Chrysler's interest in 1971. The Managers of the other two D.E. Dealerships, Southland and Monroeville, had purchased part of Chrysler's interest as of the time of trial. A Table is set forth to show the relationship of Coleman's profits to the establishment of dealerships and to the total dealerships in Allegheny County.
TABLE 1.*
--------------------------------------------------------------------------------
| | Chrysler | | Ally. Cty
| Coleman | Financed | | New Car & Truck
| Net | Dealers | Allegheny Cty Dealers | Mkt.Penetration
Year | P or L | Opened |---------------------------|--------------------
| | | Total | Pvt. | D.E. | Con | Pvt. | Chrys.Fin
-----|----------|--------------|-------|------|------|-----|-------|------------
1961 | (15915) | Boulevard(C) | 16 | 15 | 0 | 1 | 98.8 | 1.2
-----|----------|--------------|-------|------|------|-----|-------|------------
| | Hillside(C) | | | | | |
| | Cloverleaf | | | | | |
1962 | (16779) | (C) | 16 | 13 | 0 | 3 | 61.0 | 39.0
-----|----------|--------------|-------|------|------|-----|-------|------------
1963 | 6360 | | 17 | 14 | 0 | 3 | 57.9 | 42.1
-----|----------|--------------|-------|------|------|-----|-------|------------
1964 | 2963 | Southland | 15 | 11 | 1 | 3 | 54.9 | 45.1
| | (D.E.) | | | | | |
-----|----------|--------------|-------|------|------|-----|-------|------------
1965 | 3067 | St. Clair | 16 | 11 | 5 | 0 | 48.5 | 51.5
| | (D.E.) | | | | | |
-----|----------|--------------|-------|------|------|-----|-------|------------
1966 | (4070) | Monroeville | 17 | 11 | 5 | 1 | 47.8 | 52.2
| | (D.E.) | | | | | |
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