Dobbins v. Kawasaki Motors Corporation, USA

• Decision Date: 15 June 1973
• Docket Number: Civ. No. 71-105.
• Citation: 362 F. Supp. 54
• Parties: Joe DOBBINS et al., Plaintiffs, v. KAWASAKI MOTORS CORPORATION, U. S. A., a Delaware corporation, and Kawasaki Heavy Industries, a Japanese corporation, Defendants. KAWASAKI MOTORS CORPORATION, U. S. A., a Delaware corporation, Counterclaimant, v. JOE DOBBINS IMPORTS, INC., an Oregon corporation, and Joe Dobbins, Counterclaim-Defendants.
• Court: U.S. District Court — District of Oregon

362 F. Supp. 54

Joe DOBBINS et al., Plaintiffs, v. KAWASAKI MOTORS CORPORATION, U. S. A., a Delaware corporation, and Kawasaki Heavy Industries, a Japanese corporation, Defendants.

KAWASAKI MOTORS CORPORATION, U. S. A., a Delaware corporation, Counterclaimant, v. JOE DOBBINS IMPORTS, INC., an Oregon corporation, and Joe Dobbins, Counterclaim-Defendants.

Civ. No. 71-105.

United States District Court, D. Oregon.

June 15, 1973.

Bruce M. Hall, Hall & Novack, Hardy Myers, Jr., George K. Meier, III, Patrick J. Simpson, Rives, Bonyhadi & Drummond, Portland, Or., for plaintiffs, and for counterclaim-defendants.

Barnes H. Ellis, Charles F. Hinkle, Davies, Biggs, Strayer, Stoel & Boley, Portland, Or., William B. Campbell, Paul, Hastings, Janofsky & Walker, Los Angeles, Cal., for defendant Kawasaki Motors Corp., U.S.A.

Wayne Hilliard, Stanley R. Loeb, Dezendorf, Spears, Lubersky & Campbell, Portland, Or., for defendant Kawasaki Heavy Industries.

OPINION AND ORDER

SKOPIL, District Judge:

Defendant Kawasaki Motors Corporation, U.S.A. (KMC) has moved under Rule 56 for partial summary judgment. Plaintiffs have also moved for partial summary judgment against KMC. Defendant Kawasaki Heavy Industries (KHI), a Japanese corporation, has moved under Fed.R.Civ.P. 12(b)(2) and (3) to dismiss this action as to it for lack of jurisdiction and improper venue.

Summary judgment is, of course, only available where no genuine issue of material fact remains and the movant is entitled to judgment as a matter of law. Industrial Bldg. Materials, Inc. v. Interchemical Corp., 437 F.2d 1336 (9th Cir. 1970). Courts must especially be careful in employing summary judgment in antitrust litigation where it may be important for witnesses to be present and subject to cross-examination. A trial may offset the plaintiffs' problems of proof in such cases where motive and intent are important. Poller v. Columbia Broadcasting System, 368 U.S. 464, 473, 82 S.Ct. 486, 7 L.Ed.2d 458 (1962); Moore v. Jas. H. Matthews & Co., 473 F.2d 328, 330 (9th Cir. 1973).

I

KMC'S MOTION FOR PARTIAL SUMMARY JUDGMENT

This motion involves four requests:

1) Summary judgment as to all claims arising on or prior to September 18, 1969, on the ground that plaintiff Joe Dobbins executed a release on that date for such claims for which he was paid $43,000;

2) If (1) is denied, summary judgment in the alternative for all claims arising on or prior to February 27, 1967, on the ground that Dobbins released defendant from such claims for which he received a consideration of $10,000 credit on purchases of new motorcycles;

3) Summary judgment on plaintiffs' allegations of monopoly and conspiracy to monopolize, which are plaintiffs' counts (15) through (19), on the ground that KMC's actual or potential market share in the relevant market is, as a matter of law, insufficient to constitute a monopoly; and

4) Summary judgment as to plaintiffs' allegations of discrimination on the ground that plaintiffs have failed to allege facts sufficient to constitute a claim.

A. The Releases.

In September, 1969, Joe and Jerry Dobbins negotiated a new Kawasaki motorcycle distributorship contract with KMC officers, Alan Masek, Tony Watanabe, and Y. Hamawaki, in Los Angeles. Part of that discussion was an attempt to resolve previous differences. As a result of those discussions, Joe Dobbins was sent a new distributorship contract, a letter which contained the release, and a check for $43,000. Dobbins signed the distributorship agreement and negotiated the check. The pertinent language of the release is:

This letter will serve as our agreement to settle ALL OUR PROBLEMS past and present as we discussed in Los Angeles on Monday, 8 September. Acceptance of the enclosed check and its endorsement are your agreement to this letter embodying our settlement and the terms of the settlement. The endorsement of the check constitutes your full and complete release of all past and current claims of every kind, including, but not limited to, territory compensation, ending our present distributorship agreement earlier than its present terms, all of your efforts in developing Kawasaki business in the United States, all of Gerry sic Dobbins' efforts in developing the Kawasaki motorcycle product.

It is KMC's contention, essentially, that this agreement is a valid contract, entered into by parties dealing at arms' length, and that it is binding upon the plaintiffs as to claims, including antitrust claims, which arose on or before September 18, 1969, the date of the check.

Normally there is a presumption in favor of the validity of releases, and courts may give them effect by means of summary judgment, even in antitrust cases. Suckow Borax Mines Consol., Inc. v. Borax Consol., Ltd., 185 F.2d 196, 205 (9th Cir. 1950). Plaintiffs here, however, attempt to avoid the effect of this release by contending that the release itself was "part and parcel" of KMC's antitrust scheme.

There are two principal aspects of plaintiffs' attack on the release:

1) A release which aids a combination to restrain trade or which forms a part of the means by which the illegal objectives of the combination or contract are sought to be achieved, is itself unlawful and void; and

2) The nexus between the release and the broader alleged unlawful combination or contract under the Sherman Act is a factual question which should wait the trial for determination.

Contrary to plaintiffs' assertion, Radio Corp. of America v. Raytheon Mfg. Co., 296 U.S. 459, 56 S.Ct. 297, 80 L.Ed. 327 (1935), does not support their argument. The question was whether, under the circumstances, the validity of a release pleaded by a defendant as a bar to a cause of action at law was triable in equity. "We do not attempt to say whether the release will collapse upon the showing of an illegal combination or will retain an independent life . . . . Enough for present purposes that there are issues triable at law, and none triable in equity. We leave our ruling there." Id. at 463, 56 S.Ct. at 299. The limited procedural issue decided in Raytheon has little relevance today, separate courts of law and equity having been abolished.

Carter v. 20th Century Fox Film Corp., 127 F.Supp. 675 (W.D.Mo.1955), falls closer to plaintiffs' mark. Plaintiff in Carter had leased two movie theatres to Fox in Sedalia, Missouri. The leases were allowed to expire when plaintiff refused to renew them at a lower rental rate. Plaintiff then tried to operate the theatres on her own, but Fox would not give her any first-run films. As a result, plaintiff was forced to close her theatres and to sign an option to lease them to Fox at substantially reduced rental rates. Also, in the contract was an option to buy the theatres and a release by plaintiff of all claims against Fox. Plaintiff complained of economic coercion and duress in entering into the contract. The judge assumed that, although not alleged in the complaint, an object of the alleged combination and monopoly was to compel plaintiff to execute the contract.

In denying defendant's motion for dismissal, the Carter judge noted the release was an integral part of the contract. Plaintiff's theory was that the contract itself was the culmination of a conspiracy to remove her from competition in the motion picture business in Sedalia. The judge felt that if the object of a conspiracy or monopolistic scheme were illegal, each part of the scheme would also be illegal. The release provision of the contract was part of the plan to obtain a monopoly, since the release was an integral part of that contract. The judge ruled that plaintiff should have an opportunity to show whether the contract was part of the plan and denied the defendant's motion. Id. at 679-681.

One aspect of the Carter decision distinguishes it from our case. In Carter, the release at issue was one clause of the option contract, which contract was the very restraint of trade complained of by Mrs. Carter. From the facts we have before us here, plaintiffs have made no attempt to show the part and parcel relationship which the release agreement had with the alleged combination in restraint of trade, or how the release itself furthered the alleged monopolization. A similar distinguishing characteristic prompted Judge Hill, in S. E. Rondon Co. v. Atlantic Richfield Co., 288 F. Supp. 879, 882 (C.D.Cal.1968), to rule for the defendant on its summary judgment motion based upon a similar release. The Third Circuit, in Taxin v. Food Fair Stores, Inc., 287 F.2d 448, 451 (3rd Cir. 1961), held it to be "at least incumbent upon plaintiffs, in opposing a summary judgment based upon a release, to state any special or unusual relation which the release may have borne to the general conspiracy." An unsupported allegation that the release is part of or in furtherance of the conspiracy does not "suffice to prevent the granting of summary judgment."¹

I conclude a part and parcel argument may be used by a plaintiff to avoid a release in an antitrust action where it is shown that the release was an object of the combination or conspiracy or where it was an integral part of the scheme in restraint of trade. I find that those circumstances do not exist in the present case. There are no material factual issues with respect to the circumstances and events leading up to the release agreement between Dobbins and KMC. It does not appear that the release bore any integral relationship to the antitrust conduct complained of. Plaintiffs present no theoretical set of facts upon which a trier of fact could find a nexus between the release and the broader combination or contract prohibited by the Sherman Act.

As a second line of defense, plaintiffs attempt to analogize releases to consignments. Their reasoning is that: (1) like releases, consignments are also recognized as lawful contracts; and (2) but when a consignment becomes a device to avoid antitrust responsibility for eliminating price competition...