Craftsmen Limousine, Inc. v. Ford Motor Company

• Decision Date: 19 June 2007
• Docket Number: No. 06-1559.,06-1559.
• Citation: 491 F.3d 380
• Parties: CRAFTSMEN LIMOUSINE, INC.; JMRL Sales & Service, doing business as Craftsmen Limousine, Inc., a Missouri corporation, Plaintiffs-Appellants, v. FORD MOTOR COMPANY, a Delaware corporation, Defendant-Appellee, General Motors Corporation, a Missouri corporation; Cadillac, a division or affiliate of General Motors Corporation; LIMO, an association of limousine builders; AHA Automotive Design, a Canadian corporation, Defendants, American Custom Coachworks, a California corporation, Defendant-Appellee Classic Limousine & Armouring, a California corporation; DaBryan Coach Builders, a Missouri corporation; Eagle Coach, an Ohio corporation; Executive Coachbuilders, a Missouri corporation; Federal Coach, an Arkansas corporation; Image Coaches, an Indiana corporation; International Armor & Limousine, an Illinois corporation; Krystal Koach, a California corporation; LCW, a Texas corporation; Picasso Coach Builder, a New York corporation; Royale Limousine Manufacturers, a Massachusetts corporation; R-D Group, a California corporation, doing business as Tiffany Coachworks; Accubuilt, Inc., an Ohio corporation, formerly known as S & S/Superior of Ohio; Tri-State Custom Coach, a New Jersey corporation; United States Coachworks, a New York corporation; Viking Coachworks, a Florida corporation, Defendants.
• Court: U.S. Court of Appeals — Eighth Circuit

491 F.3d 380

CRAFTSMEN LIMOUSINE, INC.; JMRL Sales & Service, doing business as Craftsmen Limousine, Inc., a Missouri corporation, Plaintiffs-Appellants, v. FORD MOTOR COMPANY, a Delaware corporation, Defendant-Appellee, General Motors Corporation, a Missouri corporation; Cadillac, a division or affiliate of General Motors Corporation; LIMO, an association of limousine builders; AHA Automotive Design, a Canadian corporation, Defendants, American Custom Coachworks, a California corporation, Defendant-Appellee

Classic Limousine & Armouring, a California corporation; DaBryan Coach Builders, a Missouri corporation; Eagle Coach, an Ohio corporation; Executive Coachbuilders, a Missouri corporation; Federal Coach, an Arkansas corporation; Image Coaches, an Indiana corporation; International Armor & Limousine, an Illinois corporation; Krystal Koach, a California corporation; LCW, a Texas corporation; Picasso Coach Builder, a New York corporation; Royale Limousine Manufacturers, a Massachusetts corporation; R-D Group, a California corporation, doing business as Tiffany Coachworks; Accubuilt, Inc., an Ohio corporation, formerly known as S & S/Superior of Ohio; Tri-State Custom Coach, a New Jersey corporation; United States Coachworks, a New York corporation; Viking Coachworks, a Florida corporation, Defendants.

No. 06-1559.

United States Court of Appeals, Eighth Circuit.

Submitted: January 11, 2007.

Filed: June 19, 2007.

Counsel who presented argument on behalf of the appellant was Charles L. Richardson of Tulsa, Oklahoma. Also appearing on the brief was E. Diane Hinkle.

Counsel who presented argument on behalf of the appellee was Kirk A. Peterson of Prarie Village, Kansas. Also appearing on the brief was Kurt D. Williams and Jocelyn A. Villanueva.

Before WOLLMAN and MELLOY, Circuit Judges, and NANGLE,¹ District Judge.

MELLOY, Circuit Judge.

Plaintiff Craftsmen Limousine, Inc. ("Craftsmen") brought an antitrust claim against vehicle manufacturers Ford Motor Company ("Ford") and the General Motors Corporation ("GM"), the Limousine Industry Manufacturers' Organization ("LIMO"), and numerous coachbuilding companies engaged in the business of stretching Ford and GM vehicles into limousines. Over the course of the lawsuit, Craftsmen reached settlements with and/or voluntarily dismissed all defendants except Ford and American Custom Coachworks ("American Coach"), one of the coachbuilding companies. In an initial trial, the district court found that an alleged conspiracy between Ford and American Coach to influence the advertising and trade-show policies of two trade publications constituted a per se antitrust violation, and the jury returned a verdict for Craftsmen.

Ford appealed to this court, and we reversed the judgment. Craftsmen Limousine, Inc. v. Ford Motor Co. ("Craftsmen I"), 363 F.3d 761 (8th Cir.2004). We held that the district court erred in applying a per se rule to the alleged antitrust violation; it instead should have applied the rule of reason. We remanded the case and instructed the district court to apply the rule of reason to Craftsmen's antitrust claim.

After further discovery, the district court² granted Ford's motion to exclude Craftsmen's expert witness under Federal Rule of Evidence 702 and granted the motions of Ford and American Coach for summary judgment in their favor. Craftsmen now appeals those decisions. We affirm.

I. BACKGROUND

A. Pre-Litigation Background

The factual background is fairly extensive, and we presented it at length in our first opinion in this case. Craftsmen I, 363 F.3d at 764-71. We will not reiterate it in full here, but we discuss those facts necessary to understand the nature of the claim at issue. Because the district court granted the defendants' motion for summary judgment in this case, we present the facts in the light most favorable to Craftsmen. Bathke v. Casey's Gen. Stores, Inc., 64 F.3d 340, 343 (8th Cir.1995).

Craftsmen is a Missouri corporation engaged in the business of stretching standard base vehicles into limousines and buses. This process involves cutting the base vehicle in two, inserting structural pieces between the two halves of the base vehicle, and welding the parts back together to create a "stretched" limousine. In general, longer structural inserts (and, accordingly, longer stretched limousines) add weight and create greater stress upon the vehicle frame. Craftsmen, however, asserts that its specialized rebuilding process allows for the conversion of base vehicles, including the Ford-manufactured Lincoln Town Car, into very long limousines without sacrificing safety.

The National Highway Traffic Safety Administration requires coachbuilders to self-certify that their limousines meet federal safety standards and to provide some objective basis for that belief. Federal authorities began investigating the safety of limousines following a well-publicized crash and other incidents in the late 1980s. Ford sought to protect its image and, at the same time, to increase its share of the market for base vehicles. In 1990, while Craftsmen was actively engaged in the business of building stretched limousines, Ford formed a vehicle certification program that provided guidelines for the conversion of its vehicles into limousines that met national safety standards. Ford would certify a participant in the program as a "Quality Vehicle Modifier" ("QVM") if it abided by Ford guidelines for converting limousines and purchased insurance naming Ford as the insured. The guidelines limited the conversion options of coachbuilders. Among Ford products, coachbuilders could only convert Lincoln Town Cars, and there were limits upon the total weight of the resulting limousines and the length to which they could be stretched (no more than 120 additional inches). Coachbuilders that followed the guidelines gained some assurance that their vehicles met federal standard standards, and they received cash incentives from Ford for their participation in the QVM program. GM adopted a similar but separate program in 1992, the Cadillac Master Coachbuilders ("CMC") program. Coachbuilders who wished to stretch a vehicle in a manner that did not conform to QVM guidelines could retain QVM membership only if they submitted independent test data regarding vehicle safety to Ford. Most coachbuilders, including all of the original defendants in this case, participated in one or both of the QVM and CMC programs.

Craftsmen was one of a minority of American coachbuilding companies that chose not to participate in either program. Many of Craftsmen's conversions at the time resulted in vehicles longer than the limits imposed by the QVM and CMC programs (hereinafter "specialty limousines"), and joining the QVM program would have required Craftsmen to abandon its practice of building specialty limousines or to seek costly independent safety analysis. In addition, Craftsmen was already using techniques described in the QVM guidelines, and Craftsmen's owners had no reason to believe that the company's converted vehicles were unsafe. A federal inspection of its converted vehicles in the early 1990s resulted only in some minor, federally-mandated safety modifications.

Ford was also a nonvoting member of LIMO, an industry group of coachbuilders that formed in 1989 to pool resources for product testing and to promote consumer confidence in limousines. American Coach was a voting member. Among coachbuilders, LIMO membership was open only to those businesses who participated in the QVM and/or CMC programs; eventually, LIMO amended its bylaws to allow non-participating coachbuilders to join if they submitted independent crash-test data. Craftsmen did not join either program or perform independent crash tests, and therefore it was ineligible to become a member of LIMO.

Ford, American Coach, and other LIMO members soon began to act through the organization to exert influence over marketing outlets in the limousine industry. In 1995, LIMO received a commitment from one trade publication to remove all non-QVM and non-CMC advertisers and to deny non-QVM and non-CMC coachbuilders access to its trade show. In a 1996 LIMO teleconference, its members unanimously agreed that they would "not endorse or participate in any publication which continues to promote non-CMC/QVM limousine manufacturers" or "any limousine trade show which promotes the interests of non-CMC/QVM products." By 1996, both of the major trade publications in the limousine industry had adopted restrictive policies that barred coachbuilders that did not participate in the QVM or CMC programs from placing advertisements unless they submitted independent crash-test data to prove that their vehicles complied with federal safety standards. Non-participating coachbuilders also faced restrictions upon their participation in the publications' annual trade shows. In the face of these limitations, Craftsmen's business suffered. It found creative ways to market its company name, such as promoting its ability to customize buses and stretch sport-utility vehicles (neither of these services were subject to advertising restrictions). Craftsmen also maintained a company Web site for marketing purposes, and Craftsmen was able to remain profitable in 1995 and 1996. In 1997 — the first year since at least 1991 in which Craftsmen did not turn a profit — Craftsmen began to advertise in a new trade publication that did not require proof of certification or QVM/CMC participation. Craftsmen's expert concedes that, by some point in 1998, any adverse impact of the advertising ban upon Craftsmen's business had evaporated. The same year, Craftsmen filed suit against Ford, American Coach, and several other defendants in the United States District Court for the Western District of Missouri. Craftsmen alleged, inter alia, that the defendants engaged in a conspiracy in restraint of trade in violation of federal antitrust law, 15 U.S.C. § 1, and that this conspiracy...