Euromodas, Inc. v. Zanella, Ltd.
| Decision Date | 20 March 2003 |
| Docket Number | Civil No. 99-2428(JAG). |
| Parties | EUROMODAS, INC., Plaintiff, v. ZANELLA, LTD., et al., Defendants. |
| Court | U.S. District Court — District of Puerto Rico |
Salvador J. Antonetti-Stutts, Director, Commonwealth Department of Justice, Armando Llorens, McConnell Valdes, San Juan, PR, for plaintiffs.
Lawrence Fechner, Jaffe, Segal and Ross, New York City, Edna Hernandez-Arroyo, Avila, Martinez & Hernandez, Ignacio Rivera-Cordero, Rivera & Montalvo, Jose L. Barreto-Rampolla, San Juan, PR, for defendants.
In this action, brought under Section 11 of the Sherman Antitrust Act, 15 U.S.C. § 1, plaintiff Euromodas, Inc. ("Euromodas") alleges that defendant Zanella, LTD. ("Zanella") terminated Euromodas as one of its retailers, in furtherance of a price fixing conspiracy with another competing retailer, defendant Clubman, Inc. ("Clubman"). Presently before the Court are the parties's cross-motions for summary judgment. Zanella filed a motion for summary judgment on August 19, 2002, which was later amended. (Dockets Nos. 73 and 77.) Plaintiff Euromodas opposed said motion on September 5, 2002. (Docket No. 84.) Thereafter, Euromodas filed a motion for summary judgment (Docket No. 93), which was duly opposed by Zanella. (Docket No. 113.) Defendant Clubman has joined both Zanella's motion for summary judgment and its opposition to Euromodas's motion for summary judgment. (Docket Nos. 78 and 114.) After a careful review of the record, the Court finds that plaintiff has failed to present evidence that would sustain an antitrust violation under 15 U.S.C. § 1, and therefore grants summary judgment in favor of defendants.
Rule 56(c) of the Federal Rules of Civil Procedure sets forth the standard for ruling on summary judgment motions: The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law. Fed. R.Civ.P. 56(c). The critical question is whether a genuine issue of material fact exists. A genuine issue exists if there is sufficient evidence supporting the claimed factual dispute to require a choice between the parties' differing versions of the truth at trial. Morris v. Government Dev. Bank of Puerto Rico, 27 F.3d 746, 748 (1st Cir. 1994); LeBlanc v. Great Am. Ins. Co., 6 F.3d 836, 841 (1st Cir.1993), cert. denied, 511 U.S. 1018, 114 S.Ct. 1398, 128 L.Ed.2d 72 (1994). A fact is material if it might affect the outcome of the suit under the governing law. Morrissey v. Boston Five Cents Sav. Bank, 54 F.3d 27, 31 (1st Cir. 1995); Maldonado-Denis v. Castillo-Rodriguez, 23 F.3d 576, 581 (1st Cir.1994). On a motion for summary judgment, the court must view all evidence and related inferences in the light most favorable to the nonmoving party. See Springfield Terminal Ry. v. Canadian Pac. Ltd., 133 F.3d 103, 106 (1st Cir.1997). Nonetheless, the court is free to "ignore `conclusory allegations, improbable inferences and unsupported speculation.'" Suarez v. Pueblo International, Inc., 229 F.3d 49, 53 (1st Cir. 2000) (citing Medina Munoz v. R.J. Reynolds Tobacco Co., 896 F.2d 5, 8 (1st Cir. 1990)). It should be noted that "the range of permissible inferences that can be made from ambiguous evidence in an antitrust claim is limited." See Bi Rite Oil Co., Inc. v. Indiana Farm Bureau Cooperative Assoc., Inc., 720 F.Supp. 1363, 1369 (S.D.Ind.1989)(citing Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)). See also Helicopter Support Systems, Inc. v. Hughes Helicopter, Inc., 818 F.2d 1530, 1533-34 (11th Cir.1987); Ben Elfinan & Son, Inc. v. Criterion Mills, Inc., 774 F.Supp. 683, 686 (D.Mass.1991)(discussing the summary judgment standard of review in the context of section 1 of the Sherman Act).
I. Local Rule 311.12
In order to aid the court in the daunting task of searching for genuine issues of material fact in the record, this district adopted Local Rule 311.12. (See, e.g., Corrada Betances v. Sea-Land Service, Inc., 248 F.3d 40, 43-44 (1st Cir. 2001)); Morales v. Orssleffs EFTF, 246 F.3d 32, 33-35 (1st Cir.2001); Ruiz Rivera v. Riley, 209 F.3d 24, 27-28 (1st Cir.2000). This rule, which has been consistently upheld by the First Circuit2, requires, that a party moving for summary judgment submit, in support of the motion, "a separate, short concise statement of material facts as to which the moving party contends there is no genuine issue to be tried and the basis of such contention as to each material fact, properly supported by specific reference to the record." D.P.R.R. 311.12. The rule also provides that the material facts set forth in the statement provided by the moving party will be deemed admitted "unless controverted by the statement served by the opposing party." Id.
In this District, compliance with Local Rule 311.12 is critical, given that the Court will only consider the facts alleged in the parties's 311.12 statements when entertaining the movant's arguments. See Rivera de Torres v. Telefonica de Puerto Rico, 913 F.Supp. 81 (D.P.R.1995). Here Zanella filed an appropriate 311.12 statement in conjunction with its motion for summary judgment (Docket No. 77). However, Euromodas responded with a deficient 311.12 statement (Docket No. 86). Euromodas's statement3 does not contain a list of contested facts, as the local rule mandates, but rather enumerates those facts in Zanella's 311.12 statement with which plaintiff disagrees. In addition, Euromodas's defective statement does not contain a single reference to the record.4 "Parties, [like Euromodas, who] ignore [Rule 311.12, do so] at their own peril". Velez v. Puerto Rico Electric Power Authority, 170 F.Supp.2d 158, 162 (D.P.R.2001)(citing Ruiz Rivera v. Riley, 209 F.3d at 28). See also Hogar Club Paraiso v. Varela Llavona, 208 F.R.D. 481, 482 (D.P.R.2002). The Court, in exercising its discretion of managing its cases, will deem as admitted the relevant uncontested facts submitted by Zanella with its motion for summary judgment given Euromodas's blatant disregard of Local Rule 311.12.5
Zanella is in the business of manufacturing fine men's clothing, which includes trousers. Both Clubman and Euromodas carried Zanella trousers. Lazoff, another retailer not involved in this litigation, also sold Zanella products in the Puerto Rico market.
There is evidence in the record that sometime during 1996, Juan Carlos Castiel, from Euromodas, and Tom Cohen, from Zanella, had a conversation regarding Clubman's concerns about the fact that Euromodas was selling Zanella trousers at a much lower price than Clubman. (Docket No. 77, Exhibit 5.)
During 1997, Clubman brought to Zanella's attention its concerns with Euromodas's discount and marketing practices.6 (Docket No. 77, Exhibits 1 and 2.)In a letter dated April 15, 1997, Clubman's president, German Ramirez, cancelled its pending order of Zanella trousers because of its dissatisfaction with the fact that Zanella continued to sell them to Euromodas. Clubman's alleges that this decision was fueled by the fact that Euromodas sold the Zanella pants at a lower price than Clubman, therefore affecting Clubman's image as a fine men's clothing boutique. Zanella continued to sell its trousers to Euromodas at that time. (Docket No. 77, Exhibit 4, April 23,1997 letter).
However, there is evidence in the record that soon after Clubman expressed its discontent in writing and cancelled its order of Zanella trousers, some conversations between Zanella and Clubman resumed as to the possible creation of "Zanella corners" 7 at Clubman stores. (See Docket 84, Exhibits 1 and 3.) In fact, in a visit to New York during September of 1997, Mr. Castiel from Euromodas, was told about the fact that Clubman and Zanella were engaging in conversations pertaining to the creation of the Zanella corners. (Docket No. 77, Exhibit 6.)
On or around April 1998, Tom Cohan, from Zanella, informed Mr. Castiel, from Euromodas, that it would no longer sell him Zanella trousers after the shipment of the Spring 1998 merchandise. (Docket No. 77, Exhibit 7.) No reason was given to Euromodas for Zanella's decision.
Garment District, Inc. v. Belk Stores Services, Inc., 799 F.2d 905, 908 (4th Cir.1986)(citing Monsanto Co. v. Spray-Rite Service Corp., 465 U.S. 752, 760-64, 104 S.Ct. 1464, 79 L.Ed.2d 775 (1984)(internal citations omitted)). In Monsanto, the Supreme Court stated that in order to create an inference of conspiracy, a plaintiff must present "something more than evidence of complaints" on the part of the competing distributors. 465 U.S. at 764, 104 S.Ct. 1464. The Court further stated that there must be direct or circumstantial evidence tending "to exclude the possibility that the manufacturer and nonterminated distributors were acting independently." Id. (Emphasis added). Additionally, the Supreme Court has stated that an agreement between a manufacturer and a dealer to terminate another dealer because it is a price cutter is insufficient to establish an antitrust violation. The violation only exists when the manufacturer and dealer agree on the resale price that the dealer is to charge its customers. See Business Electronics v. Sharp Electronics, 485 U.S. 717, 726-27, 108 S.Ct. 1515, 99 L.Ed.2d 808 (1988)(Emphasis added).
Here, plaintiff Euromodas has not presented evidence from which this Court could infer that Zanella...
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Euromodas, Inc. v. Zanella, Ltd.
...for summary judgment. The district court granted the defendants' motion and denied the plaintiff's cross-motion. Euromodas, Inc. v. Zanella, Ltd., 253 F.Supp.2d 201 (D.P.R.2003). The district court's decision comprised three discrete but interdependent rulings. Initially, the court determin......