GEN. COMMUN. ENG., INC. v. MOTOROLA COMMUN. & ELECTRONICS, INC., No. C-74-0810 RFP.

• Court: United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
• Writing for the Court: PECKHAM
• Citation: 421 F. Supp. 274
• Parties: GENERAL COMMUNICATIONS ENGINEERING, INC., Plaintiff, v. MOTOROLA COMMUNICATIONS AND ELECTRONICS, INC., Defendant.
• Decision Date: 30 June 1976
• Docket Number: No. C-74-0810 RFP.

421 F. Supp. 274

GENERAL COMMUNICATIONS ENGINEERING, INC., Plaintiff,
v.
MOTOROLA COMMUNICATIONS AND ELECTRONICS, INC., Defendant.

No. C-74-0810 RFP.

United States District Court, N. D. California.

June 30, 1976.

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Blair M. White, Ralph M. Segura, White, Segura & Beserra, Oakland, Cal., for plaintiff

Donald G. Kempf, Jr., Garrett B. Johnson, Kirkland & Ellis, Chicago, Ill., for defendant; Robert N. Lowry, Brobeck, Phleger & Harrison, San Francisco, Cal., of counsel.

PECKHAM, Chief Judge.

This is an action brought by plaintiff General Communications Engineering, Inc.

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(hereafter "G.C.E.") against defendant Motorola Communications and Electronics, Inc. (hereafter "Motorola") alleging violations of section 2 of the Sherman Act, 15 U.S.C. § 2, the California Cartwright Act (Business & Profession Code §§ 16750 et seq.), and § 3369 of the California Civil Code and other related provisions of California law. The gravamen of the complaint is Motorola's deliberate use of alleged unfair trade practices pursuant to a plan to monopolize the market for private two-way radio communications equipment in California and throughout the United States. The alleged unfair trade practices which plaintiff complains of consists of Motorola contacting customers and potential customers of plaintiff and attempting to convince them to do business with Motorola. In so doing, the complaint alleges that Motorola disparages the quality of plaintiff's equipment and service. The complaint also alleges that defendant deliberately attempts to induce plaintiff's customers to break existing contracts with plaintiff and otherwise unjustifiably interferes with plaintiff's contractual relations. Plaintiff also accuses the defendant of underbidding on contracts for the provision of private two-way radio communications equipment, many times selling the equipment at less than cost and at such a price that plaintiff can not possibly compete. However, aside from these general allegations of unfair conduct, the only specific example of Motorola's conduct that plaintiff complains of concerns defendant's dealings with Kaiser Sand & Gravel, a large buyer of plaintiff's private two-way radio communications equipment.¹ For defendant's conduct in this incident and other similar incidents, not specified in the complaint, plaintiff seeks recovery of $15 million in damages² plus various forms of injunctive relief

Defendant's motion for summary judgment is presently before the court. It is adequately supported by depositions and affidavits that completely refute the allegations in the complaint with respect to Kaiser Sand & Gravel Co.,³ as well as a number

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of other instances of Motorola's purported wrongdoing, which plaintiff raised during discovery.⁴ In response, plaintiff has submitted literally hundreds upon hundreds of affidavits and statements from all over the country⁵ in an effort to withstand defendant's summary judgment motion. The major question to be decided here is whether plaintiff's efforts were successful

THE STANDARDS FOR SUMMARY JUDGMENT

In dealing with the propriety of granting a summary judgment motion, this court starts with the proposition that summary judgment is only available if there are no genuine issues of material fact to be resolved at trial, and the moving party is entitled to judgment as a matter of law. If under any reasonable construction of the evidence and any acceptable theory of law, the nonmoving party would be entitled to prevail, a summary judgment against him cannot be entered. Industrial Building Materials Inc. v. Interchemical Corp., 437 F.2d 1336, 1340 (9th Cir. 1970). It is not enough, however, for the party opposing the motion for summary judgment merely to point to disputes of fact. Bushie v. Stenocord Corp., 460 F.2d 116, 119 (9th Cir. 1972). "The showing of a `genuine issue for trial' is predicated upon the existence of a legal theory which remains viable under the asserted versions of the facts, and which would entitle the party opposing the motion (assuming his version to be true) to a judgment as a matter of law." McGuire v. Columbia Broadcasting System, 399 F.2d 902, 905 (9th Cir. 1968).

Applying these standards to defendant's motion, this court, for the reasons that follow, is of the opinion that defendant is entitled to summary judgment with respect to counts I and II of the complaint, but not with respect to count III.

A. Material Facts in Dispute

Defendant contends that its supporting papers clearly show no material facts to be in dispute. It notes that in the majority of instances in which plaintiff contends Motorola engaged in unfair trade practices pursuant to a plan to monopolize, the record is uncontradicted that plaintiff was nevertheless able to retain or secure the business of the customer in question. Thus, defendant argues that with regard to those incidents, there is no need to refute plaintiff's factual allegations since they are not legally sufficient to support the complaint, plaintiff not having suffered any injury from them. Defendant further argues that in any event its supporting papers clearly show that it did not engage in any unfair practices. We have some quarrel with both of these arguments.

With regard to defendant's first argument, the mere fact that plaintiff did not lose a particular customer because of defendant's alleged unfair trade practices does not conclusively establish that it suffered no injury. Plaintiff, in fact, strenuously contends that defendant's unfair practices forced plaintiff to devote additional time, money, and effort to secure the business that it obtained, and that such resources could have otherwise been channeled towards obtaining new business. Cf. Otter Tail Power Co. v. United States, 410 U.S. 366, 93 S.Ct. 1022, 35 L.Ed.2d 359

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(1973); California Motor Transport Co. v. Trucking Limited, 404 U.S. 508, 92 S.Ct. 609, 30 L.Ed.2d 642 (1972). Thus, assuming that defendant's practices are indeed unfair,⁶ the injury alleged appears to be cognizable. Accordingly, this court will consider all instances in which plaintiff alleges that Motorola engaged in unfair trade practices regardless of whether those practices resulted in the loss of the particular customer to whom they were directed.⁷ As to defendant's second argument, this court is of the opinion that plaintiff has managed to raise material questions of fact with respect to at least the following eleven instances in which it contends that Motorola disparaged its product or service, or otherwise competed unfairly against it

1. Ted Peters Trucking Co. Plaintiff claims that Ted Peters Trucking Co. ("Peters") decided not to buy communications equipment from G.C.E. because of false and untrue information given to Peters by Motorola. Defendant disputes that claim and contends that Peters did not buy any two-way radio equipment because it was not in the financial position to do so. Both parties rely on the deposition of Gary Theo Peters, Dispatching and Operations Manager of Peter's Trucking Company.

From the deposition, it appears that Peters had requested proposals from R.C.A., Motorola and G.C.E. and had some preliminary discussions with General Electric about supplying it with private two-way radio equipment. Mr. Peters testified that all the companies stressed their products and gave him conflicting opinions on which "type" of repeater coverage would be most suitable for his company. He testified that Motorola's salesman, Frank Grimes, with whom he principally dealt, had not made any specific statements disparaging G.C.E. but rather had made a general sales pitch stressing Motorola's products; however, it appears that on one occasion a salesman who accompanied Mr. Grimes made some comments from which Mr. Peters "inferred" that plaintiff's radio was not a "proven radio," "that it hadn't been on the market that long," and that it "possibly could be . . . a cheap radio." Mr. Peters further testified that none of the comments from anyone at Motorola influenced his decision not to purchase radio equipment from G.C.E. Rather, he indicated that he was generally confused at the differences in the price, quality and type of repeater coverage offered in each of the various systems, and that by the time he was ready to choose among the offers, he was no longer in a financial position to purchase from anyone. Nevertheless, drawing all possible inferences in favor of the plaintiff, this court is not prepared to say that plaintiff has not raised a material question of fact as to whether Motorola disparaged plaintiff's product in this instance.

2. Anderson Electric. Plaintiff claims that G.C.E. failed to secure the business of Anderson Electric because of disparaging remarks made by Motorola. Defendant relies on the deposition of William Anderson, owner of Anderson Electric, in which Anderson states that no one from Motorola ever made any disparaging remarks about G.C.E.'s products or service and that the company finally decided to rent radio telephones from an entirely different source because of the low price it received. Nevertheless, plaintiff relies on the affidavit of its General Sales Manager, Mark Dunaway, who swears that he was physically present and heard Motorola salesmen

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state that G.C.E.'s coverage maps were incorrect; that plaintiff did not have the technical support of a large corporation and could not make delivery on time; and that the equipment G.C.E. was suggesting was a Japanese radio of poor resale quality which was hard to maintain. Thus, the question of whether Motorola disparaged G.C.E.'s product to Anderson Electric in the manner claimed by plaintiff is a material question of fact to be resolved at trial.

3. Electronic Dispensers Int'l. Plaintiff claims that Motorola made disparaging remarks to Wayne Easley...