In re Mid-Atlantic Toyota Antitrust Litigation

• Decision Date: 04 April 1983
• Docket Number: Y-81-805,Y-81-1880,MDL-456. Civ. A. No. Y-80-3238,Y-81-806 and Y-81-2954.,Y-81-726,Y-81-650,Y-82-479
• Citation: 560 F. Supp. 760
• Parties: In re MID-ATLANTIC TOYOTA ANTITRUST LITIGATION. STATE OF MARYLAND ex rel. SACHS v. MID-ATLANTIC TOYOTA DISTRIBUTORS, INC., et al. STATE OF DELAWARE ex rel. GEBELEIN v. MID-ATLANTIC TOYOTA DISTRIBUTORS, INC., et al. STATE OF WEST VIRGINIA ex rel. BROWNING v. MID-ATLANTIC TOYOTA DISTRIBUTORS, INC., et al. DISTRICT OF COLUMBIA ex rel. ROGERS v. MID-ATLANTIC TOYOTA DISTRIBUTORS, INC., et al. COMMONWEALTH OF PENNSYLVANIA on its own Behalf and as Parens Patriae v. MID-ATLANTIC TOYOTA DISTRIBUTORS, INC., et al. COMMONWEALTH OF VIRGINIA v. MID-ATLANTIC TOYOTA DISTRIBUTORS, INC., et al. Daniel E. GOLUB, et al. v. MID-ATLANTIC TOYOTA DISTRIBUTORS, INC., et al. Wallace H. JOHNSTON, Jr., et al. v. MID-ATLANTIC TOYOTA DISTRIBUTORS, INC., et al.
• Court: U.S. District Court — District of Maryland

560 F. Supp. 760

In re MID-ATLANTIC TOYOTA ANTITRUST LITIGATION.

STATE OF MARYLAND ex rel. SACHS v. MID-ATLANTIC TOYOTA DISTRIBUTORS, INC., et al.

STATE OF DELAWARE ex rel. GEBELEIN v. MID-ATLANTIC TOYOTA DISTRIBUTORS, INC., et al.

STATE OF WEST VIRGINIA ex rel. BROWNING v. MID-ATLANTIC TOYOTA DISTRIBUTORS, INC., et al.

DISTRICT OF COLUMBIA ex rel. ROGERS v. MID-ATLANTIC TOYOTA DISTRIBUTORS, INC., et al.

COMMONWEALTH OF PENNSYLVANIA on its own Behalf and as Parens Patriae v. MID-ATLANTIC TOYOTA DISTRIBUTORS, INC., et al.

COMMONWEALTH OF VIRGINIA v. MID-ATLANTIC TOYOTA DISTRIBUTORS, INC., et al.

Daniel E. GOLUB, et al. v. MID-ATLANTIC TOYOTA DISTRIBUTORS, INC., et al.

Wallace H. JOHNSTON, Jr., et al. v. MID-ATLANTIC TOYOTA DISTRIBUTORS, INC., et al.

MDL-456.

Civ. A. Nos. Y-80-3238, Y-81-650, Y-81-726, Y-81-805, Y-81-1880, Y-82-479, Y-81-806 and Y-81-2954.

United States District Court, D. Maryland.

April 4, 1983.

Stephen H. Sachs, Atty. Gen. for the State of Md., Baltimore, Md., Charles O. Monk, II, and Michael F. Brockmeyer, Asst. Attys. Gen., Baltimore, Md., liaison counsel for plaintiffs.

Raymond W. Bergan, Scott B. Harris, and William J. Murphy, Washington, D.C., liaison counsel for defendants.

MEMORANDUM OPINION AND ORDER

JOSEPH H. YOUNG, District Judge.

The Judicial Panel on Multidistrict Litigation has consolidated the eight above-captioned actions for pretrial purposes and assigned them to this Court pursuant to 28 U.S.C. ? 1407(a) (1976). These lawsuits include six actions brought by the Corporation Counsel of the District of Columbia and the attorneys general of Delaware, Maryland, Pennsylvania, Virginia, and West Virginia on behalf of their respective citizenry under the parens patriae provisions of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, 15 U.S.C. ?? 15c-15h (1976),¹ and two private treble damage antitrust actions asserted pursuant to 15 U.S.C. ? 15 (Supp. V 1981).² All eight actions commonly allege violations of ? 1 of the Sherman Act, 15 U.S.C. ? 1 (1976), by the regional Toyota distributor for the mid-Atlantic states and various local Toyota dealers within the distributor's region.³ Plaintiffs in all actions have named three common defendants (hereafter "Weisman defendants"): the distributor, Mid-Atlantic Toyota Distributors, Inc. (hereafter "MAT"), its corporate affiliate, Carecraft Industries, Ltd. (hereafter "Carecraft"), and the controlling individual behind both entities, Frederick R. Weisman (hereafter "Weisman"). Individual dealers comprise all of the remaining defendants in each action and appear only in those suits appropriate to their respective geographic locations.

The Court currently has before it numerous defense motions for summary judgment.⁴ After a full round of briefing, the Court heard oral argument on the motions on October 28, 1982. The Court subsequently concluded that it needed certain additional information for full consideration of the issues raised, and the parties promptly provided the Court with appropriate stipulations as well as supplemental memoranda commenting on the legal significance of the submitted information. After careful consideration of the extensive record in this litigation, the Court grants the defendants' motions to a limited extent and enters partial summary judgment in their favor on all claims grounded upon the so-called "Double Value Days" program. Fed.R.Civ.P. 56(d). The Court denies all other portions of the defense motions, but reviews certain principles of law which will govern the remainder of this litigation. In particular, the determination of ? 1 liability may proceed under a "per se" standard, although not in the precise manner the plaintiffs have argued for. A fuller exposition of the scope of and basis for these rulings follows.

SUMMARY JUDGMENT STANDARDS IN ANTITRUST LITIGATION

Summary judgment is ordinarily appropriate when:

the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.

Fed.R.Civ.P. 56(c). The Fourth Circuit has amply elaborated upon this standard in an opinion which merits quotation at length:

It is well settled that summary judgment should not be granted unless the entire record shows a right to judgment with such clarity as to leave no room for controversy and establishes affirmatively that the adverse party cannot prevail under any circumstances. sic Neither should summary judgment be granted if the evidence is such that conflicting inferences may be drawn therefrom, or if reasonable men might reach different conclusions. 3 Barron & Holtzoff, Federal Practice & Procedure ? 1234 (Rules ed. 1958). Burden sic is upon party moving for summary judgment to demonstrate clearly that there is no genuine issue of fact, and any doubt as to the existence of such an issue is resolved against him. 3 Barron & Holtzoff, Federal Practice & Procedure ? 1235 (Rules ed. 1958).

In Kirkpatrick v. Consolidated Underwriters, 227 F.2d 228 (4th Cir.1955), this court repeated its holding in Pierce v. Ford Motor Co., 190 F.2d 910 (4th Cir. 1951), that summary judgment under Rule 56 should be granted only where it is perfectly clear that no issue of fact is involved and inquiry into the facts is not desirable to clarify the application of the law. This is true even where there is no dispute as to the evidentiary facts but only as to the conclusions or inferences to be drawn therefrom, and the "party opposing a motion for summary judgment is entitled to all favorable inferences which can be drawn from the evidence." Cram v. Sun Ins. Office, Ltd., 375 F.2d 670, 674 (4th Cir.1967).

As we stated in American Fid. & Cas. Co. v. London & Edinburgh Ins. Co., 354 F.2d 214, 216 (4th Cir.1965):

"Not merely must the historic facts be free of controversy but also there must be no controversy as to the inferences to be drawn from them. It is often the case that although the basic facts are not in dispute, the parties nevertheless disagree as to the inferences which may properly be drawn. Under such circumstances the case is not one to be denied on a motion for summary judgment."

Phoenix Savings and Loan, Inc. v. Aetna Casualty & Surety Co., 381 F.2d 245, 249 (4th Cir.1967).

In light of this strict standard, it is not surprising that some courts have traditionally demonstrated a marked reluctance towards summary disposition of complex antitrust cases. See, e.g., Norfolk Monument Co., Inc. v. Woodlawn Memorial Gardens, Inc., 394 U.S. 700, 704, 89 S.Ct. 1391, 1393, 22 L.Ed.2d 658 (1969); Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 473, 82 S.Ct. 486, 491, 7 L.Ed.2d 458 (1962); Morrison v. Nissan Motor Co., Ltd., 601 F.2d 139, 141-42 (4th Cir.1979). See generally 10A C. Wright, A. Miller & M. Kane, Federal Practice and Procedure ? 2732.1 at 313-31 (2nd Ed.1983). As Justice Clark said for the majority in Poller:

summary procedures should be used sparingly in complex antitrust litigation where motive and intent play leading roles, the proof is largely in the hands of the alleged conspirators, and hostile witnesses thicken the plot. It is only when the witnesses are present and subject to cross-examination that their credibility and the weight to be given their testimony can be appraised. Trial by affidavit is no substitute for trial by jury. * * *

Poller, 368 U.S. at 473, 82 S.Ct. at 491. On the other hand, the Supreme Court has indicated that some limits exist upon this judicial reluctance:

To the extent that petitioner's argument can be interpreted to suggest that Rule 56(e) should, in effect, be read out of antitrust cases and permit plaintiffs to get to a jury on the basis of the allegations in their complaints, coupled with the hope that something can be developed at trial in the way of evidence to support these allegations, we decline to accept it. While we recognize the importance of preserving litigants' rights to a trial on their claims, we are not prepared to extend those rights to the point of requiring that anyone who files an antitrust complaint setting forth a valid cause of action be entitled to a full-dress trial notwithstanding the absence of any significant probative evidence to support the complaint.

First National Bank of Arizona v. Cities Service Co., 391 U.S. 253, 289-90, 88 S.Ct. 1575, 1592-93, 20 L.Ed.2d 569 (1968). Accord National Electrical Contractors Association, Inc. v. National Constructors Association, 678 F.2d 492, 497 (4th Cir.1982). See generally 2 P. Areeda & D. Turner, Antitrust Law ? 316 (1978) (suggesting broader appropriateness of summary judgment). Nevertheless, summary disposition remains a highly elusive goal in cases such as the present one which contain allegations of ? 1 conspiracy dependent upon divination of subjective intent. Neel v. Waldrop, 639 F.2d 1080, 1084 (4th Cir.1981).

REVIEW OF THE UNDISPUTED FACTS AND DISPUTED ALLEGATIONS⁵

This case centers around the antitrust implications of two sets of multiple individual agreements between MAT and its dealers regarding a package of accessories for 1980 model Toyotas. Featuring "Polyglycoat" brand sealant products, the package of accessories (hereafter "protective package") included rustproof shielding, paint sealant, interior (textile or vinyl) sealant, souldshielding (undercoating), and membership in the "Cross Country Motor Club."⁶

The parties do not dispute the facial elements of the individual contracts within each set of agreements. In the first group of agreements, solicited by MAT under its "Total Concept Protective Program" (hereafter "Total Concept Program"), each dealer individually contracted with MAT to have the protective package applied to all of the 1980 Toyotas the dealer ordered, at a cost to the dealer of $113.90.⁷ The protective package on cars furnished under the Total Concept Program had a suggested retail...