Colo. Interstate Gas v. Natural Gas Pipeline Co.

• Citation: 661 F. Supp. 1448
• Decision Date: 29 May 1987
• Docket Number: No. C84-139-B.,C84-139-B.
• Parties: COLORADO INTERSTATE GAS COMPANY, Plaintiff, v. NATURAL GAS PIPELINE COMPANY OF AMERICA and NGPL-Trailblazer, Inc., Defendants. NATURAL GAS PIPELINE COMPANY OF AMERICA, Midcon Ventures, Inc., and NGPL-Trailblazer, Inc., Counterclaim-Plaintiffs, v. COLORADO INTERSTATE GAS COMPANY, Wyoming Interstate Company, Ltd., and the Coastal Corporation, Counterclaim-Defendants.
• Court: U.S. District Court — District of Wyoming

661 F. Supp. 1448

COLORADO INTERSTATE GAS COMPANY, Plaintiff, v. NATURAL GAS PIPELINE COMPANY OF AMERICA and NGPL-Trailblazer, Inc., Defendants.

NATURAL GAS PIPELINE COMPANY OF AMERICA, Midcon Ventures, Inc., and NGPL-Trailblazer, Inc., Counterclaim-Plaintiffs, v. COLORADO INTERSTATE GAS COMPANY, Wyoming Interstate Company, Ltd., and the Coastal Corporation, Counterclaim-Defendants.

No. C84-139-B.

United States District Court, D. Wyoming.

May 29, 1987.

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J. Kent Rutledge, Arthur Kline Lathrop & Uchner, Cheyenne, Wyo., Gary L. Cowan, P. Michael Koenig, Michael L. Beatty, Michael L. Williams, Rebecca H. Noecker, Colorado Springs, Colo., William C. McClearn, James E. Hartley, Marilyn S. Kite, Holland & Hart, Denver, Colo., for plaintiff.

John T. Cusack, Thomas Campbell, Gordon Nash, Gardner, Carton & Douglas Chicago, Ill., Paul J. Hickey, Rooney, Bagley, Hickey, Evans & Statkus, Cheyenne, Wyo., Louis Nizer, Phillips, Nizer, Benjamin, Krim & Ballon, New York City, William Brown, Brown, Drew, Apostolos, Massey & Sullivan, Casper, Wyo., Joseph M. Wells, Neil J. Maloney, Paul E. Goldstein, Lombard, Ill., Paul Korman, Gardner, Carton and Douglas, Washington, D.C., Roy R. Robertson, Jr., Midcon Corp., Lombard, Ill., for defendants; Phillip Areeda, Langdell Hall, Cambridge, Mass., of counsel.

Thomas A. Nicholas III, Hirst & Applegate, P.C., Cheyenne, Wyo., Michael L. Beatty, The Coastal Corp., Houston, Tex., for Coastal Corp.

Gerald M. Sterns, Charles Foster, Occidental Petroleum Co., Los Angeles, Cal., for Occidental.

ORDER ON POST-TRIAL MOTIONS

BRIMMER, Chief Judge.

This matter came before the Court on defendants' motion, pursuant to Fed.R. Civ.P. 50(b) and 59, for judgment notwithstanding the verdict, for new trial, or for a remittitur. The Court, having heard the arguments of counsel, having reviewed the pleadings, and being fully advised in the premises, FINDS and ORDERS as follows:

Plaintiff Colorado Interstate Gas Company (CIG) and defendants, Natural Gas Pipeline Company of America and NGPL-Trailblazer, Inc. (hereinafter collectively referred to as "NGPL"), compete to transport natural gas. In July 1982, NGPL and CIG entered a contract (the Service Agreement) obligating CIG to deliver and requiring NGPL to purchase specified quantities of natural gas. The Service Agreement requires CIG to maintain sufficient gas reserves and pipeline transportation capacity to ensure delivery of NGPL's entitlements. Section 2 of the Service Agreement commits NGPL to purchase a minimum daily volume of gas or to pay the fixed costs of the volumes not taken.

In 1981-1982 a new pipeline, the Trailblazer System, was constructed to transport natural gas out of the Overthrust region of Wyoming. Three pipeline segments form the Trailblazer System: the Overthrust Pipeline, the Wyoming Interstate Company or WIC Pipeline, and the Trailblazer Pipeline. NGPL-Trailblazer owns the Trailblazer Pipeline in partnership with two other companies. NGPL-Trailblazer is the operator. Trailblazer competes with CIG to transport natural gas from the Overthrust.

In July 1983, NGPL refused to accept gas from CIG. The Natural Gas Act nevertheless obligated CIG to be ready to deliver any volumes requested by NGPL. CIG could not use the pipeline capacity reserved for NGPL to ship natural gas for other customers.

CIG was consequently unable to purchase gas from its own suppliers, so it shut-in gas owned by Champlin Petroleum in the Whitney Canyon area of Wyoming. Champlin and CIG began renegotiating their contract. Champlin insisted that CIG release its rights to purchase Whitney Canyon gas. CIG acceded. The next day, NGPL bought Champlin's Whitney Canyon gas, although NGPL still refused deliveries from CIG. NGPL shipped the Whitney Canyon gas through the Trailblazer Pipeline. In addition to acquiring Champlin's Whitney Canyon reserves, NGPL purchased gas from new suppliers and increased its takes from existing gas suppliers.

CIG brought this action alleging that NGPL attempted to monopolize the market for the long-distance transportation of Wyoming natural gas, that NGPL conspired to monopolize that market, that NGPL breached the Service Agreement and its duty of good faith and fair dealing, and that NGPL tortiously interfered with CIG's business relationship with Champlin. NGPL asserted counterclaims alleging that CIG's parent, the Coastal Corporation (together with CIG and WIC), monopolized, attempted to monopolize and conspired to monopolize the purchase, transportation and sale of natural gas in the Overthrust area. NGPL also alleged that Coastal acquired and attempted to acquire competitors in violation of žž 1 and 2 of the Sherman Act and ž 7 of the Clayton Act.

At trial CIG abandoned its antitrust conspiracy claim against NGPL. The Court directed a verdict for CIG on NGPL's conspiracy counterclaim. A directed verdict was also rendered against NGPL on its claims that CIG monopolized and attempted to monopolize the sale of natural gas and that Coastal unlawfully acquired competitors. After an eight week trial, the jury retired to consider:

1. whether NGPL breached the Service Agreement, tortiously interfered with CIG's business or contractual relationships, and attempted to monopolize the long-distance transportation of Wyoming gas; and

2. whether Coastal, CIG and WIC monopolized and attempted to monopolize the purchase and transportation of natural gas.

The jury rejected NGPL's counterclaims and found in favor of CIG on each cause of action. CIG was awarded $159,797,156 on its breach of contract claim, $175,001,711 on its antitrust claim and $39,231,072 on its tortious interference claim. The total award reached $724,033,361 after trebling the antitrust damages. The Court, however, determined that the damages were duplicative and reduced the judgment to $549,031,650 by deleting the damage award for breach of contract. NGPL now seeks judgment notwithstanding the verdict on each of CIG's successful claims. In the alternative NGPL moves for a new trial or for a remittitur.

Substantial evidence supports the jury's verdict, and NGPL's motions for judgment notwithstanding the verdict or new trial are denied. The Court concludes, however, that the jury erroneously awarded CIG $16,017,678 as damages for tortious interference with contract, and the Court will grant a remittitur in this amount. The jury also awarded CIG its future F-1 lost profits as antitrust damages. The total amount of future lost profits was $60,388,000, which was trebled to $181,164,000. The jury erred in awarding CIG its future F-1 lost profits as antitrust damages but correctly included them as damages for breach of contract. Therefore, the Court will grant a remittitur in the amount of $181,164,000 but reinstate the breach of contract damage award in the amount of $60,388,000. The total amount of the remittitur is $197,181,678.

I. JUDGMENT NOTWITHSTANDING THE VERDICT

Caution must be exercised in granting judgment notwithstanding the verdict because it deprives the prevailing party of the jury's factual determination. Joyce v. Atlantic Richfield Co., 651 F.2d 676, 680 (10th Cir.1981). Granting the motion is appropriate only when the evidence points one way and no reasonable inferences support the position of the opposing party. Equal Employment Opportunity Comm'n v. Prudential Fed. Sav. and Loan Ass'n, 763 F.2d 1166, 1171 (10th Cir. 1985) (citing Symons v. Mueller Co., 493 F.2d 972, 976 (10th Cir.1974)), cert. denied, ___ U.S. ___, 106 S.Ct. 312, 88 L.Ed.2d 289 (1985). The evidence and accompanying inferences must be viewed in a light most favorable to the prevailing party. The court may not weigh the evidence, consider the credibility of witnesses or substitute its judgment for the jury's. Joyce v. Atlantic Richfield Co., 651 F.2d at 680 n. 2. The proof favoring the movant must be so overwhelming that judgment notwithstanding the verdict is the only option available to the court. Acree v. Minolta Corp., 748 F.2d 1382, 1387 (10th Cir.1984). If fairminded people may differ as to the conclusions or if there is substantial conflicting evidence, judgment notwithstanding the verdict must be denied. Ryder v. City of Topeka, 814 F.2d 1412, 1418 (10th Cir.1987) (citing Wylie v. Ford Motor Co., 502 F.2d 1292 (10th Cir.1974)).

The jury's determination must nevertheless be supported by substantial evidence. White v. Conoco, Inc., 710 F.2d 1442, 1443 (10th Cir.1983). Substantial evidence is relevant evidence found in the record as a whole which reasonable minds might accept as adequate to support the conclusion. Allstate Ins. Co. v. Hiseley, 465 F.2d 1243, 1247 (10th Cir.1972). The court must determine whether a rational jury could conclude that each required element of the claim was met. Downie v. Abex Corp., 741 F.2d 1235, 1238 (10th Cir. 1984). The jury's findings on sharply conflicting evidence, however, are conclusively binding, for the jury is charged with the exclusive duty of assessing the credibility of witnesses and determining the weight to be given their testimony. Ryder v. City of Topeka, At 1420-21 (quoting White v. Conoco, Inc., 710 F.2d 1442 (10th Cir.1983)).

A. Attempt to Monopolize

An attempt to monopolize requires proof of four elements: (1) a relevant market; (2) a dangerous probability of success; (3) specific intent to monopolize; and (4) conduct in furtherance of the attempt. Shoppin' Bag of Pueblo, Inc. v. Dillon Companies, Inc., 783 F.2d 159, 161 (10th Cir.1986). Private plaintiffs must also show antitrust injury. Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489, 97 S.Ct. 690, 697, 50 L.Ed.2d 701 (1977). NGPL urges that the evidence was insufficient to permit a reasonable jury to conclude that CIG established the essential elements of an attempt to...