Great Escape, Inc. v. Union City Body Co., Inc.

• Decision Date: 21 May 1986
• Docket Number: No. 84-3108,84-3108
• Citation: 791 F.2d 532
• Parties: 1986-1 Trade Cases 67,104 The GREAT ESCAPE, INC., Plaintiff-Appellant, v. UNION CITY BODY COMPANY, INC., et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 532

791 F.2d 532

1986-1 Trade Cases 67,104

The GREAT ESCAPE, INC., Plaintiff-Appellant, v.UNION CITY BODY COMPANY, INC., et al., Defendants-Appellees.

No. 84-3108.

United States Court of Appeals, Seventh Circuit.

Argued Sept. 18, 1985.

Decided May 21, 1986.

Michael J. Dennis, Washington, D.C., for plaintiff-appellant.

Philip A. Whistler, Ice, Miller, Donadio & Ryan, Indianapolis, Ind., for defendants-appellees.

Before CUDAHY and RIPPLE, Circuit Judges, and SWYGERT, Senior Circuit Judge.

CUDAHY, Circuit Judge.

This is an appeal of an antitrust suit brought by a travel agency based on the loss of its principal customer to another agency.The district court for the Southern District of Indiana granted the defendants' motion for summary judgment.We affirm.

I.

The plaintiff, The Great Escape, Inc.("Great Escape"), brought an antitrust action against the defendants, Union City Body Company("UCBC"), C & J Commercial Driveaway ("C & J"), Miami Valley Auto Club, Inc., doing business as World Wide Travel ("World Wide"), and William L. Adelsperger.Great Escape and World Wide are travel agencies operating in the Union City, Indiana, area.UCBC manufactures truck bodies in Union City, principally for General Motors ("G.M.").Adelsperger is the President and Chief Executive Officer of UCBC.He also serves as a member of the Advisory Board of the Darke County, Ohio Division of the Miami Auto Club.He is not compensated for sitting on this Board.C & J is a delivery service that delivers vehicles from their place of manufacture.

G.M. delivers truck chassis to the UCBC plant, where the truck bodies manufactured by UCBC are installed onto the chassis.G.M. is then responsible for delivering the completed truck from the UCBC plant to its dealers.Since 1974 G.M. has hired C & J exclusively to deliver the completed G.M. trucks.Between 1980 and 1983, G.M. and its subsidiaries accounted for approximately ninety-three percent of C & J's business.C & J also makes some deliveries for UCBC directly of trucks sold under UCBC's own name.The district court found that UCBC orders comprise about seven percent of C & J's business.

C & J delivers the completed trucks by either the "truckaway" or the "driveaway" method.In a "truckaway," the vehicle to be delivered is loaded on a flatbed truck, driven to its destination and unloaded, and then the truck is driven back to Union City.In a "driveaway," the vehicle is driven, either alone or in tandem with another vehicle connected by a tow bar, to its destination.The driver then uses an alternative means of transportation to return to Union City.

Before April 1982 the C & J drivers engaged in a "driveaway" were issued advance checks when they left Union City.They then purchased their own return airline tickets, either at the airport, or at one of three travel agencies, World Wide, Great Escape or Treaty Travel.Great Escape had an office in Union City.The other two travel agencies were located in Greenville, Ohio, which is twelve miles east of Union City.Generally the drivers did not purchase their tickets at the airport because of problems created by their tow bars, which they had to return to Union City after delivering the vehicles.The tow bars weighed 150 pounds; consequently the drivers preferred to have a ticket in hand when they reached the airport so that they could check the tow bars with porters at the airport terminal curb.Additionally, it was inconvenient to use the Greenville travel agencies because it was very difficult to park in Greenville with a tow bar on a van and another van in tandem.Thus Great Escape, which was located nearby C & J's terminal, attracted about ninety percent of the drivers' business.

In March 1982James Mercer, C & J's Union City terminal manager, and John Leach, the manager of operations at C & J's home office in Michigan, contacted Barbara Witt, the President of Great Escape.They asked her to be the exclusive agent for airline tickets for C & J drivers.In April 1982she accepted their offer and entered into a new arrangement with C & J. Great Escape would provide the airline tickets to the drivers and bill C & J directly each week.C & J gave Witt a $5,000 deposit.The arrangement between C & J and Great Escape was at will, without a specified duration.

Wilma Murphy, the Executive Vice President of World Wide in charge of the Greenville office, learned of the arrangement and asked Adelsperger if he knew anyone at C & J Driveaway with whom she could speak about acquiring C & J's business.Subsequently Adelsperger met with Leach and asked him to consider using World Wide's travel agency services.They twice spoke to each other by telephone concerning this topic.After the meeting with Adelsperger, Leach met with Murphy at World Wide.Subsequently there were several other communications, by letter and telephone, between Leach and Murphy.Murphy promised that if C & J used World Wide, several services would be provided, including computerized reservations and ticketing, a guarantee of the lowest available airfare, a $100,000 travel insurance policy for each driver at no additional cost, cashing advance checks and arranging for cabs to pick up returning drivers at the airport.World Wide did not have an office in Union City, but promised either to deliver the tickets to C & J by courier or to prepay the tickets so that the drivers could pick up the tickets at the airport.

There was some testimony that C & J initially found World Wide's offer unacceptable because it thought that delivery by courier involved a security risk and a time lag, and prepaid tickets would present the drivers with the tow-bar problem.Leach, however, eventually decided to accept World Wide's offer to provide prepaid tickets.Warner Canto, President of C & J, approved the switch, which went into effect on November 29, 1982.Ten days after accepting the offer of prepaid tickets, on November 22, 1982, C & J accepted courier delivery from World Wide instead.C & J changed its mind after being informed that airline regulations prohibited World Wide from absorbing prepaid ticket charges.C & J's arrangement with World Wide is at will, for no specific duration.

Before World Wide actually began to sell tickets to C & J, however, World Wide decided to open a branch office in Union City, just across the street from the C & J terminal.The Union City branch office opened in April 1983.World Wide opened this branch office for less than $5,000.Great Escape's predecessor had opened its travel agency business in Union City for less than $8,000.

Shortly before the switch, E.J. Sobie, Leach's superior, wrote an internal memorandum disagreeing with the switch.The memo stated: "I do not accept the need for change just because of political pressure."

Great Escape filed a five count complaint in March 1983.The first two counts allege violations of the federal antitrust laws.Plaintiff alleged that the defendants violated Section 1 of the Sherman Act,15 U.S.C. Sec. 1, by 1) unreasonably restraining interstate commerce through a combination, contract or conspiracy; 2) tying the purchase of vehicle delivery services from C & J to C & J's purchase of services from World Wide; and 3) engaging in a concerted refusal to deal and a group boycott in an attempt to drive Great Escape out of business.¹Plaintiff alleged that the defendants violated Section 2 of the Sherman Act,15 U.S.C. Sec. 2, by 1) combining and conspiring to monopolize interstate trade and commerce; and 2) attempting to monopolize interstate trade and commerce.Great Escape also alleged that the defendants"made, and continue to make, leases, sales, contracts for sale, conditions, agreements and understandings, the effect of which may be to substantially lessen competition or tend to create a monopoly in said interstate trade and commerce," in violation of Section 3 of the Clayton Act,15 U.S.C. Sec. 14.Count III alleged violations of the Indiana state antitrust law.Ind.Code Sec. 24-1-1-1 et seq.Count IV alleged intentional interference with Great Escape's contracts and prospective business relations.Count V alleged a violation of the Indiana common law of unfair competition.The Clayton Act and the unfair competition claims were dropped by plaintiff before summary judgment was granted.Great Escape does not appeal the dismissal of the intentional interference with contracts claim.

II.

Section 1 of the Sherman Act prohibits "[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States...."15 U.S.C. Sec. 1.Although summary judgment is ordinarily inappropriate in antitrust cases, it is available when "there is an absence of any significant probative evidence tending to support the complaint."O'Byrne v. Cheker Oil Co., 727 F.2d 159, 163(7th Cir.1984);seeProducts Liability Insurance Agency v. Crum & Forster Insurance Companies, 682 F.2d 660, 663(7th Cir.1982).The party opposing summary judgment "must do more than simply show that there is some metaphysical doubt as to the material facts."Matsushita Electric Industrial Co. v. Zenith Radio Corp., --- U.S. ----, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538(1986).The non-moving party must produce specific facts showing that there is a genuine issue for trial.Id."[A]plaintiff seeking damages for a violation of Sec. 1 must present evidence 'that tends to exclude the possibility' that the alleged conspirators acted independently."Id.Here, as in Checker, "the facts upon which plaintiffs rely to support their Sherman Act conspiracy allegations are not susceptible of the interpretation they seek to give them" and the "plaintiffs had ample time to substantiate their claims of conspiracy but were unable to do so."727 F.2d at 163.

Plaintiff alleged that UCBC and Adelsperger forced C & J to switch its patronage in order to keep UCBC's delivery business, thus creating a...