Dayco Corp. v. Goodyear Tire & Rubber Co.

Decision Date06 October 1975
Docket Number75-1235,Nos. 75-1234,s. 75-1234
Parties1975-2 Trade Cases 60,483 DAYCO CORPORATION, Plaintiff-Appellant, v. GOODYEAR TIRE & RUBBER COMPANY, Defendant-Appellee. DAYCO CORPORATION, Plaintiff-Appellant, v. FIRESTONE TIRE & RUBBER COMPANY, Defendant-Appellee.
CourtU.S. Court of Appeals — Sixth Circuit

Before PHILLIPS, Chief Judge, and McCREE and LIVELY, Circuit Judges.

McCREE, Circuit Judge.

This is a consolidated appeal from the grant of summary judgment in favor of defendants in two private antitrust actions brought by Dayco Corporation against Goodyear and Firestone. The complaints are practically identical and are based upon Sections 4 and 16 of the Clayton Act, 15 U.S.C. §§ 15, 26, and Section 2 of the Sherman Act, 15 U.S.C. § 2.

Dayco alleged that in 1959 and 1960, the defendants initiated sharp price reductions on replacement automobile tires as a part of an attempt to monopolize the market for replacement tires. Dayco contends that this conduct violated the Clayton Antitrust Act and caused it to suffer losses in its tire-making business that eventually forced it to sell its tire manufacturing facilities for less than their fair market value. Dayco asked for treble damages and equitable relief including divestiture.

All parties agree that the last act in the antitrust violations, if any, occurred in 1961 when Dayco sold its facilities and went out of the tire-making business 13 years before these cases were filed. Firestone and Goodyear moved to dismiss the complaints under F.R.Civ.P. 12(b)(6) contending that Dayco's legal and equitable claims were barred by the four year statute of limitations. Section 4B of the Clayton Act, 15 U.S.C. § 15b (1970). While the motions were pending, both Firestone and Dayco filed a number of affidavits.

On November 21, 1974, without holding a hearing on the motions, the district court entered a memorandum opinion. The court observed that although a motion to dismiss under Rule 12(b) may be granted because a statute of limitations bars the action (Partis v. Miller Equipment Dayco's appeal presents a number of issues, of which three are dispositive in our view. First, Dayco alleges that the court erred in converting the motions to dismiss to motions for summary judgment without either notice or a hearing. Second, Dayco argues that its equitable claims stand in their own right and are not affected by the four year limitation of Section 4B of the Clayton Act. Third, Dayco urges that the district court erred in determining that plaintiff's pleadings did not make out a claim of fraudulent concealment sufficient to toll the statute of limitations.

Co., 324 F.Supp. 898, 902 (N.D.Ohio 1970), Aff'd, 439 F.2d 262 (6th Cir. 1971)), in this case both parties had offered matters outside of the pleadings and the motion would accordingly be treated as a motion for summary judgment. The district court held: (1) that the treble damage claim was barred by the statute of limitations of Clayton Act Section 4B, 15 U.S.C. § 15b (1970); (2) that the equitable claims should be dismissed with the underlying legal claim; (3) that Dayco had failed to allege conduct that, if true, would constitute a claim of fraudulent concealment sufficient to toll the statute of limitations; and (4) that Dayco had not adequately pleaded its own due diligence in discovering its cause of action.

We do not agree and we affirm the district court.

SUMMARY JUDGMENT

Appellant contends that the denial of a hearing on the motion to dismiss was a violation of Rules 12(b) and 56, as well as a violation of fundamental notions of fairness and due process of law. We disagree with appellant's contention and hold that F.R.Civ.P. 83 in combination with Rules 56(c) and 78 1 "authorize(s) district courts to provide by rule that a party desiring oral argument on a motion for summary judgment must apply therefor, in the absence of which oral argument will be deemed to have been waived." Dredge Corp. v. Penny, 338 F.2d 456, 461-62 (9th Cir. 1964).

In this case the local court rules of the Northern District of Ohio provide: "Motions, in general, shall be submitted and determined upon motion papers hereinafter referred to. Oral arguments of motions will be permitted on application and proper showing." Rule 3(a)(1), Rules of Procedure for the U.S. District Court of the Northern District of Ohio. Similar rules have been upheld in Parish Secondly, Dayco urges that the district judge should have given the parties ten days notice before he considered the 12(b)(6) motion to dismiss as a Rule 56 motion for summary judgment. Dayco correctly states that on a motion to dismiss, a plaintiff may safely rely on his complaint because the pleadings must be liberally construed in favor of the non-moving party and all well-pleaded allegations must be taken as true. On the other hand, since summary judgment may be based on matters outside the pleadings, a plaintiff must demonstrate by the pleadings, by affidavit or otherwise, that there is a genuine dispute concerning some material fact. F.R.Civ.P. 56(e). Dayco claims that it was denied a reasonable opportunity to introduce matters responsive to a motion for summary judgment because the district court made the conversion without giving notice. Dayco does not allege that it did not have enough time to file supplementary materials, and, in fact, the record reveals that approximately seven weeks elapsed between the service of the 12(b)(6) motions and the entering of judgment. Instead, Dayco contends that it believed that it was not required to file anything further because the district court had been requested to consider only a motion to dismiss. Nevertheless, during this interval, Firestone filed affidavits in support of the motion and Dayco filed affidavits in opposition.

v. Howard, 459 F.2d 616 (8th Cir. 1972), Sarelas v. Porikos, 320 F.2d 827 (7th Cir. 1963), Cert. denied, 375 U.S. 985, 84 S.Ct. 519, 11 L.Ed.2d 473 (1964) (no denial of due process), Bagby v. United States, 199 F.2d 233 (8th Cir. 1952), See also Summary Judgment Hearing Argument, 1 A.L.R.Fed. 295, § 2(b) (1969). We determine that the district court did not err in failing to afford oral argument to the parties because no party requested it.

Rule 12(b) provides in pertinent part:

. . . If, on a motion asserting the defense numbered (6) to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.

Rule 56(c) further adds:

The motion shall be served at least 10 days before the time fixed for the hearing.

It seems clear then, that if affidavits are filed with the district court, the court must proceed under Rule 56 unless the court decides to exclude the affidavits. It seems logical to read the 10 day requirement of Rule 56(c) into the Rule 12(b) "reasonable opportunity" to file supplemental materials. These requirements have been met even if we compute the 10 day period from the filing of the Dayco affidavit. But, Dayco urges that there is an additional requirement that the district judge give at least 10 days notice that he intends to convert the motion to dismiss to a motion for summary judgment. Although we believe that it is better practice for a district court to give notice of its intention to treat a 12(b) motion as one for summary judgment, and failure to do so may require reversal under certain circumstances, nevertheless, we hold that no error was committed here.

The Second Circuit considered the same issue in Cook v. Hirschberg, 258 F.2d 56 (2d Cir. 1958):

Plaintiffs contend that, as against a motion to dismiss, the complaint should be liberally construed in favor of the pleader. But defendants' filing of affidavits with their motion essentially converted it into a motion for summary judgment, F.R. 12(b), and placed upon plaintiffs an obligation to reveal the merits of their case. (Citations omitted). This obligation plaintiffs failed to fulfill. 258 F.2d at 57-58.

The Ninth Circuit, adopting the doctrine of Cook, reversed a district court denial of a motion to dismiss and remanded with instructions to enter summary judgment for the defendants, observing that plaintiffs' failure to disclose the merits of their case after defendants had filed affidavits with their 12(b) motion ended plaintiffs' entitlement to liberal construction of the pleadings in their favor. International Longshoremen's & Warehousemen's Union v. Kuntz, 334 F.2d 165 (9th Cir. 1964).

The "reasonable opportunity" language of Rule 12(b) is designed to prevent unfair surprise to the parties. Dayco cannot claim it was surprised because it made no effort to exclude the Firestone affidavits, but, instead, responded with its own. Under the circumstances, the district court was required to proceed under Rule 56, and notice to the parties that it was so doing would merely have informed them of what they should already have known.

The cases cited by Dayco as establishing a contrary rule are all distinguishable. Our own case of Sims v. Mercy Hospital of Monroe, 451 F.2d 171 (6th Cir. 1971), did not involve affidavits at all. In Sims, the trial judge relied upon a...

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