Greater Rockford Energy and Technology Corp. v. Shell Oil Co., 92-2212

• Citation: 998 F.2d 391
• Decision Date: 02 September 1993
• Docket Number: No. 92-2212,92-2212
• Parties: 1993-1 Trade Cases P 70,274 GREATER ROCKFORD ENERGY AND TECHNOLOGY CORP., Shepherd Oil, Inc., Vidalia Ethanol, Ltd., et al., Plaintiffs-Appellants, v. SHELL OIL COMPANY, Marathon Petroleum Company, Amoco Oil Company, Inc., Chevron, U.S.A., Inc., Atlantic Richfield Co., B.P. America, Exxon Company, U.S.A. and Mobil Oil Corporation, Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

Page 391

998 F.2d 391

1993-1 Trade Cases P 70,274

GREATER ROCKFORD ENERGY AND TECHNOLOGY CORP., Shepherd Oil Inc., Vidalia Ethanol, Ltd., et al., Plaintiffs-Appellants, v. SHELL OIL COMPANY, Marathon Petroleum Company, Amoco Oil Company, Inc., Chevron, U.S.A., Inc., Atlantic Richfield Co., B.P. America, Exxon Company, U.S.A. and Mobil Oil Corporation, Defendants-Appellees.

No. 92-2212.

United States Court of Appeals, Seventh Circuit.

Argued Dec. 1, 1992.

Decided June 15, 1993.

Rehearing and Suggestion for Rehearing En Banc Denied Sept.

2, 1993. ^*

Gregg R. Potvin, Taylor, Thiemann & Aitken, Washington, DC, Bob F. Wright, Domengeaux & Wright, Lafayette, LA, Lloyd W. Gathings, Gathings & Davis, Birmingham, AL, Wayne M. Liao, Spiegel, Liao & Kagay, San Francisco, CA, Phil C. Neal (argued), George M. Hoffman, Neal, Gerber & Eisenberg, Chicago, IL, and Leslie J. Schiff, Sandoz, Sandoz & Schiff, Opelousas, LA, for plaintiffs-appellants.

Neil F. Hartigan, Atty. Gen., Bart T. Murphy, John W. McCaffrey, Asst. Attys. Gen., Office of the Atty. Gen.; and Robert E. Davy, Jr., Lison & Pullman, Chicago, IL, for plaintiff, People of State of Ill.

Peter M. Sfikas, Peterson & Ross, Chicago, IL, Ann Spiegel, A.M. Minotti, Shell Oil

Co. Legal Dept., Houston, TX; Ronald W. Teeple, John L. Leonard, Samuel Gideon Kramer, John William Loseman, Defrees & Fiske; Thomas A. Gottschalk, J. Andrew Langan, David A. Rammelt, Kirkland & Ellis, Chicago, IL; John H. Stroh, Marathon Oil Co.; Dan D. Sandman, Findlay, OH; Amy J. Berenson, Kirkland & Ellis, Washington, DC; Michael E. Rigney, Chicago, IL; Robert E. Gillespie, Hinshaw & Culbertson, Springfield, IL; Martin J. Keating; James J. Neath, Amoco Corp., Chicago, IL; John H. Long, Long, Morris, Myers & Rabin, Springfield, IL; John E. Bailey, Keith E. Parks, Mark A. Cervenka, David L. Ream, John T. Lewis, Chevron Corp., Houston, TX; Donald A. Bright, Atlantic Richfield Co., Los Angeles, CA; Philip H. Curtis (argued), Robert C. Mason, Arnold & Porter, New York City; Joseph Dattilo, Cleveland, OH; Robert G. Abrams (argued), Joanne E. Caruso, Howrey & Simon, Washington, DC; Jeffrey M. Cross, Patrick J. Ahern, Mary Clare Bonaccorsi, Ross & Hardies, Chicago, IL; Edward H. Beck, Mobil Oil Corp., Fairfax, VA; and R. Gerald Barris, Sorling, Northrup, Hanna, Cullen & Cochran, Ltd., Springfield, IL, for defendants-appellees.

Before CUDAHY and RIPPLE, Circuit Judges, and LAY, Senior Circuit Judge. ^**

CUDAHY, Circuit Judge.

Ethanol producers and gasohol blenders sued a number of oil companies for treble damages and injunctive relief pursuant to §§ 4 and 16 of the Clayton Act, 15 U.S.C. §§ 15, 26 (1988), alleging that the companies violated, inter alia, the Gasohol Competition Act of 1980, 15 U.S.C. § 26a (1988). The district court granted summary judgment against the plaintiffs on the ground that they lacked antitrust standing. Because we find that the plaintiffs have failed to show antitrust injury, we affirm.

I.

Ethanol is an alcohol produced from the fermentation of grain, molasses and other agricultural products. When blended with gasoline (generally in a ratio of one part ethanol to nine parts gasoline), the motor fuel gasohol is formed. The plaintiffs, eleven ethanol manufacturers and/or sellers ¹ and two gasohol blenders ² (collectively, the plaintiffs), brought this action against eight integrated oil companies for treble damages and injunctive relief under §§ 4 and 16 of the Clayton Act. ³ They alleged violations of §§ 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2 (1988), § 26a of the Clayton Act, otherwise known as the Gasohol Competition Act of 1980, 15 U.S.C. § 26a (1988), the Illinois Antitrust Law, 740 ILCS 10/1 et seq. (1992) (Ill.Rev.Stat. ch. 38 p 60-1 et seq. (1991)), and the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1 et seq. (1992) (Ill.Rev.Stat. ch. 121 1/2 p 261, et seq. (1991)). The plaintiffs assert that the defendants, individually and in combination, discriminated against and disparaged ethanol and gasohol to eliminate competition in the motor fuel market. In particular, the plaintiffs allege that the oil companies restricted the purchase and sale of gasohol by their dealers and jobbers, limited the use of their credit instruments in transactions involving gasohol, engaged in an anti-alcohol campaign by labeling their gasoline with signs indicating that the product contains "no alcohol" and, finally, communicated among themselves sensitive competitive information regarding ethanol and gasohol.

The district court held that the plaintiffs did not have standing to sue under § 4 and granted summary judgment for the defendants. 790 F.Supp. 804 (C.D.Ill.1992). The court applied the factors discussed in Associated General Contractors, Inc. v. California State Council of Carpenters, 459 U.S. 519, 537-45, 103 S.Ct. 897, 908-12, 74 L.Ed.2d 723 (1983), and found that the injuries which the plaintiffs alleged, namely, lost profits resulting in the plaintiffs' business failures, ⁴ were indirect, derivative, speculative and duplicative given that the plaintiffs were not competitors or consumers in the market allegedly restrained and that there was an abundance of other causes for the plaintiffs' economic troubles. ⁵

II.

Summary judgment is warranted when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986). To forestall a motion for summary judgment, a non-movant plaintiff must present sufficient evidence to show the existence of each element of its case on which it will bear the burden of proof at trial. Reserve Supply Corp. v. Owens-Corning Fiberglas Corp., 971 F.2d 37, 48-49 (7th Cir.1992). Of course, we review the grant of summary judgment de novo, evaluating the evidence in the light most favorable to the non-moving party. Matsushita, 475 U.S. at 587, 106 S.Ct. at 1356. We can affirm the grant of summary judgment on any ground, even one not relied on by the district court, if the record fairly supports that justification and it has not been waived by the appellee. Martinez v. United Auto., etc., Local 1373, 772 F.2d 348, 353 (7th Cir.1985).

Section 4 of the Clayton Act provides

Any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue ... and shall recover threefold the damages by him sustained, and the cost of the suit, including a reasonable attorney's fee.

Although the language of this provision could be read to provide a treble-damage remedy to anyone who was injured in some way by an antitrust violation, the provision has not been construed so expansively. Associated General Contractors, 459 U.S. at 535, 103 S.Ct. at 907 (" 'It is reasonable to assume that Congress did not intend to allow every person tangentially affected by an antitrust violation to maintain an action to recover threefold damages for the injury to his business or property.' " (quoting Blue Shield of Virginia v. McCready, 457 U.S. 465, 476-77, 102 S.Ct. 2540, 2547, 73 L.Ed.2d 149 (1982))). Given the potential scope of antitrust violations and the availability of treble damages, an over-broad reading of § 4 could result in "overdeterrence," imposing ruinous costs on antitrust defendants, severely burdening the judicial system and possibly chilling economically efficient competitive behavior. See Matsushita, 475 U.S. at 594, 106 S.Ct. at 1360; William H. Page, The Scope of Liability for Antitrust Violations, 37 Stan.L.Rev. 1445, 1453 (1985). Accordingly, the Supreme Court has placed several limitations on the scope of antitrust liability. In Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., the Court held that § 4 plaintiffs must prove "antitrust injury, which is to say injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants' acts unlawful." 429 U.S. 477, 487-88, 97 S.Ct. 690, 697, 50 L.Ed.2d 701 (1977) (emphasis in original). And in Associated General Contractors, it applied traditional common-law tort principles to read a proximate cause element into § 4 actions. Thus, the Court held that a plaintiff does not have standing to sue under § 4 if its injuries were indirect and speculative. ⁶

A great deal of confusion has surrounded these two limitations. See Local Beauty Supply, Inc. v. Lamaur Inc., 787 F.2d 1197, 1201 (7th Cir.1986) (noting confusion between antitrust injury and antitrust standing doctrines, and citing cases); Phillip Areeda & Herbert Hovencamp, Antitrust Law p 334.3 (Supp.1991). Lack of standing and antitrust injury often have been invoked interchangeably against a plaintiff even though each concept involves a distinct element of the § 4 action. The elements of the § 4 action correspond to the components of a common-law action in tort. See Associated General Contractors, 459 U.S. at 533, 103 S.Ct. at 906 ("Congress simply assumed that antitrust damages litigation would be subject to constraints comparable to well-accepted common-law rules applied to comparable litigation."). An action in tort has four elements: (1) a duty recognized by law requiring the defendant to conform to a standard of conduct; (2) a breach of the duty; (3) damage or injury to a legally recognized interest; and (4) causation, including both causation in fact, or "but for" cause, and legal, or proximate cause. See W. Page Keeton et al., Prosser and Keeton on the Law of Torts § 30, at 164-65 (5th ed. 1984) [hereinafter Prosser & Keeton]. Correspondingly, the elements a plaintiff must satisfy to bring a § 4 action for treble damages are: (1) a duty recognized by the antitrust laws; (2) a violation of the antitrust laws; (3) injury to an interest protected by the antitrust laws and attributable to the antitrust violation--that is, antitrust injury; and (4) a direct link between the antitrust...