Multidistrict Vehicle Air Pollution., In re

• Decision Date: 14 February 1979
• Docket Number: No. 76-1648,76-1648
• Citation: 591 F.2d 68
• Parties: 1979-1 Trade Cases 62,529 In re MULTIDISTRICT VEHICLE AIR POLLUTION. AMF, INCORPORATED, Plaintiff-Appellant, v. GENERAL MOTORS CORPORATION, Ford Motor Company, Chrysler Corporation, American Motors Corporation and Automobile Manufacturers Association, Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 68

591 F.2d 68

1979-1 Trade Cases 62,529

In re MULTIDISTRICT VEHICLE AIR POLLUTION AMF, INCORPORATED, Plaintiff-Appellant, v. GENERAL MOTORS CORPORATION, Ford Motor Company, Chrysler Corporation, American Motors Corporation and Automobile Manufacturers Association Inc., Defendants-Appellees.

No. 76-1648.

United States Court of Appeals Ninth Circuit.

Feb. 14, 1979.

Howard Adler (argued), Bergson, Borkland, Margolis & Adler, Washington, D. C., for plaintiff-appellant.

James G. Hunter, Jr. (argued), Hedland, Hunter & Lynch, Chicago, Ill., Philip K. Verleger (argued), of McCutchen, Black, Verleger & Shea, Los Angeles, Cal., for defendants-appellees.

Appeal from the United States District Court for the Central District of California.

Before SNEED and HUG, Circuit Judges, and EAST, ^* District Judge.

SNEED, Circuit Judge:

This is an appeal from summary judgments in a treble damage antitrust action brought by appellant AMF, Incorporated ("AMF") against appellees, four major American automobile manufacturers and their trade association. AMF claims that appellees, acting in concert, by agreeing not to purchase AMF's device, excluded it from the early market in methods to limit and control air pollution, and that such action caused commercial injury cognizable under Section 4 of the Clayton Act, 15 U.S.C. § 15. Following the close of discovery, appellees moved for summary judgment contending that (1) the industry's rejection of the AMF device was strictly the result of unilateral decisions by each automobile company; (2) there never was an AMF device to boycott because only a prototype had been certified by the California Motor Vehicle Pollution Control Board ("MVPCB"); (3) AMF's action was barred by the statute of limitations; and (4) AMF had transferred relevant documents to another company or lost them when it terminated its exhaust control device business. Appellee Chrysler moved separately for summary judgment on the added ground that it had at all times been firmly committed to its own device. The district court granted the appellees' motions for summary judgment with respect to all issues relevant to this appeal. As we agree that the four-year statute of limitations in 15 U.S.C. § 15b barred this action, we affirm without reaching the district court's other grounds.

I.

FACTS.

AMF commenced this action on October 23, 1970, charging that appellees conspired to restrain trade and monopolized in violation of Sections 1 and 2 of the Sherman Act. The roots of this alleged conspiracy extend back to the early 1950's, when appellees entered into a cooperative program to study and remedy problems generated by emissions from internal combustion engines. One part of the joint program included a cross-licensing agreement for patents developed by any party. AMF further alleges that within this overall conspiracy appellees, in 1964, formed a conspiracy specifically intended to exclude it from the developing market for automobile emission control equipment.

In 1961 AMF entered into a program to develop an afterburner designed by Charles Morris; AMF termed its device the "Smog Burner." Afterburners reduce emissions by further combustion of exhaust gasses. They are "hang on" devices, in that they are attached toward the end of the exhaust system, and are not integral parts of the engine itself. Although various appellees had experimented with afterburner devices, none was concentrating its own internal development upon such a device in 1964. At that time no state or federal agency mandated particular emission control standards. Under California law, however, the MVPCB was authorized to issue "Certificates of Approval" to pollution control devices found capable of achieving certain standards. The law specified that as soon as the MVPCB certified two such devices, a provision requiring all new automobiles sold within the state to meet established emission requirements would become effective. AMF submitted a prototype of its device to the MVPCB, and on June 17, 1964, the MVPCB certified AMF's prototype along with three other emissions control methods, none of which were afterburners. At that time, no appellee had a device that had received certification. Nevertheless, as of June 17, 1964, California law required appellees to seek exemptions or meet the established emission requirements in the 1966 model year, which commenced in the Fall of 1965.

AMF cites several actions on the part of appellees which indicated a joint decision to exclude parties outside of the industry cooperative program from the market in these devices. Specifically, after concerted discussion, appellees each announced at an August 12, 1964 MVPCB meeting that they would install industry-developed emission control systems in 1966 models and would refrain from using AMF's Smog Burner or any of the other previously certified devices. At various times each appellee directly contacted AMF to this effect, the last such refusal coming from American Motors in October. According to an internal AMF memorandum dated October 29, 1964, AMF was unable to get any appellee to consider the Smog Burner even for vehicles for which exemption from the California requirements was requested. In October when American Motors Corporation, after testing of the AMF device, stated that it would not use the Smog Burner, AMF personnel had concluded that a conspiracy to exclude them existed.

In November the MVPCB denied certification for use on used cars to the only device, other than AMF's, that had applied for such certification, with the consequence that California's provisions requiring the installation on used cars did not go into effect. By December, AMF had begun to decrease its staff working on the Smog Burner project. AMF had foreseen two possible markets for the device new and used cars and neither had developed. On January 7, 1965, the MVPCB met to consider exemption requests by appellees for certain models; AMF did not attend. AMF did not send a representative because, as its management stated, it had a "conviction that no purchase orders for Smog Burners would emanate from any Detroit manufacturer." An AMF representative contacted two Ford engineers in April of 1965, asking whether Ford had any new interest in the Smog Burner; he received a negative response. Finally, a letter to International Harvester, not named as a defendant in AMF's suit, sent in February 1965 quoted prices of the device, but did not indicate production capability.

During this period, each of the appellees worked on an emission control system for its cars. Chrysler developed its own "Clean Air Package" (CAP), and the other three manufacturers adopted an air injection system operated with an air pump supplied by GM. Each of the appellees did some testing with the AMF prototype during the Summer of 1964, but only AMC ever tested a production model. Chrysler's CAP system was certified in November 1964, but none of the other three manufacturers received certification or exemption until the Spring of 1965.

II.

LIMITATIONS.

Appellant filed this suit on October 23, 1970. 15 U.S.C. § 15b establishes the applicable limitations: "Any action to enforce any cause of action under sections 15 or 15a of this title shall be forever barred unless commenced within four years After the cause of action accrued " (emphasis added). The government commenced a civil suit against these same appellees, however, on January 10, 1969. 15 U.S.C. § 16(b) suspends the running of the statute of limitations for "every private right of action . . . based in whole or in part on any matter complained of" in the private action during the pendency of and for one year after any antitrust action commenced by the United States. The government suit was settled by consent decree October 29, 1969, within one year of AMF's filing this suit. We therefore focus our attention on January 10, 1965, four years prior to the commencement of the government action, as the critical date for limitations purposes. ¹ If appellant's action had accrued before that date, this action is barred by 15 U.S.C. § 15b.

Previously, we have stated: "A civil cause of action under the (antitrust laws) arises at each time the plaintiff's interest is invaded to his damage, and the statute of limitations begins to run at that time." Twin City Sportservice, Inc. v. Charles O. Finley & Co., 512 F.2d 1264, 1270 (9th Cir. 1975). Under two possible theories, AMF's cause of action arose on January 10, 1965 or thereafter. First, if appellees committed overt acts which damaged AMF, in furtherance of a conspiracy, on January 10, 1965 or thereafter, those acts are not barred. Second, if damages attributable to appellees' actions prior to January 10, 1965, were speculative, or their amount and nature were unprovable, as of that date, then AMF's action to recover those damages is not barred. We treat each of these possibilities in turn.

A. Continuing Conspiracy.

It is well established that a plaintiff's cause of action for damages under the antitrust laws is not barred simply because a conspiracy was formed outside the limitations period. The Supreme Court clarified the point at which an antitrust cause of action accrues in Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 91 S.Ct. 795, 28 L.Ed.2d 77 (1971).

Generally, a cause of action accrues and the statute begins to run when a defendant commits an act that injures a plaintiff's business. . . . This much is plain from the treble-damage statute itself. 15 U.S.C. § 15. In the context of a continuing conspiracy to violate the antitrust laws . . . this has usually been understood to mean that each time a plaintiff is injured by an act of the defendants a cause of action accrues to him to recover the damages caused by that act and that, as to those damages, the statute of limitations runs from the commission of the act.

401 U.S. at 338, 91 S.Ct. at 806.

Cf. Hanover Shoe, Inc. v. United Shoe Machinery...