Natrona Service, Inc. v. Continental Oil Co., 77-1845

• Decision Date: 13 March 1979
• Docket Number: No. 77-1845,77-1845
• Parties: 1979-1 Trade Cases 62,691 NATRONA SERVICE, INC., Plaintiff-Appellant, v. CONTINENTAL OIL CO., Kerr-McGee Corporation, and Meurer, Serafini & Meurer Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1294

598 F.2d 1294

1979-1 Trade Cases 62,691

NATRONA SERVICE, INC., Plaintiff-Appellant, v. CONTINENTAL OIL CO., Kerr-McGee Corporation, and Meurer Serafini & Meurer Inc., Defendants-Appellees.

No. 77-1845.

United States Court of Appeals Tenth Circuit.Submitted

March 13, 1979.

Decided May 4, 1979

Herbert B. Newberg, Philadelphia, Pa. (Dennis M. Hand of Hand, Hand & Hand, Casper, Wyo., on brief), for plaintiff-appellant.

Houston G. Williams of Wehrli & Williams, Casper, Wyo. (Barry G. Williams of Wehrli & Williams, Casper, Wyo., and Bruce R. Merrill, Senior Counsel, Continential Oil Company, Houston, Tex., on brief), for defendant-appellant.

Richard L. Schrepferman of Holme, Roberts & Owen, Denver, Colo. (Peter H. Holme, Jr., and Stephen E. Synder Holme, Roberts & Owen, Denver Colo., Clydine Cornett, Kerr-McGee Corp., Oklahoma City, Okl., William T. Schwartz, Casper, Wyo., on brief), for defendant-appellee Kerr-McGee.

Richard . Harring of Calkins, Kramer, Grimshaw & Harring, Denver, Colo., for defendant-appellee Meurer, Serafini & Meurer, Inc.

Before McWILLIAMS and BARRETT, Circuit Judges, and MILLER,^* Judge, United States Court of Customs and Patent Appeals.

BARRETT, Circuit Judge.

Natrona Services, Inc. (Natrona) seeks review of an order granting summary judgment to Continental Oil Co. (Continental), Kerr-McGee Corporation (Kerr-McGee) and Meurer, Serafina & Meurer (MSM), defendant below. ¹

Natrona filed this anti-trust suit alleging violations of sections 1 and 2 of the Sherman Act and Wyoming common law of unfair competition and restraint of trade. Natrona specifically alleged that appellees unlawfully combined or conspired to exclude it from engaging in the business of performing uranium claim taking and validation services, and with monopolizing and attempting to monopolize scarce uranium claim areas in Wyoming and elsewhere without complying with the claim location and validation requirements. Predicated thereon, Natrona alleges that "the natural effects of which are to exclude plaintiff from engaging in its business and to restrain plaintiff's interstate trade and commerce." A detailed recitation of the allegations, circumstances and facts is set forth in the Memorandum Opinion and Order of the District Court. See: Natrona Service, Inc. v. Continental Oil Company, it al., 435 F.Supp. 99 (D.Wyo.1977).

Natrona is a Wyoming corporation formed in 1967. It was, during the relevant time period herein, engaged in the business of providing custom uranium claim location and validation services in the western United States for energy companies as an integral part of their uranium exploration and development programs.

Kerr-McGee and Continental are energy related companies which explore for, develop, and sell energy in various forms, including uranium. MSM is a Colorado engineering firm which was engaged in the claim staking and validation business in late 1974 and 1975. MSM acquired the contracts of Polaris Company, a joint venture of Ken Wickware and Ronald Harris. Prior to formation of Polaris, Wickware had operated individually in the claim staking business under the trade name of Conrad.

Prior to 1974 Natrona had little, if any competition in Wyoming in the claim staking and validation business. It had performed virtually all of Kerr-McGee's and Continental's claim staking and validation work in Wyoming. It is uncontested that Natrona generally performed its services well.

In spring of 1974, Natrona announced that it would have to increase its prices for services in order to meet increased overhead, to overcome past losses, and to operate profitably. Natrona's price increase from $40 to $50 per claim was accepted as reasonable. However, a subsequent announced future rate of $60 per claim was considered too high by Kerr-McGee and Continental. During the period of the price increases, personality conflicts developed between John MacGuire, president of Natrona, and personnel of Kerr-McGee and Continental. Allegations and counter allegations of conflicts of interest, overstaking and unethical conduct ensued. Pressure developed at the same time from the "home" offices of Kerr-McGee and Continental to keep costs down relating to claim staking activities.

Prior to this time Wickware, who owned a surveying business, decided to into the claim staking business under the name of Conrad. In April 1974, Conrad was awarded a contract by Kerr-McGee. Conrad proved unable to perform its work effectively. Wickware thereafter joined with Harris in a joint venture, Polaris for claim staking work. Polaris, just as it predecessor, performed ineffectively. In November, 1974, without knowledge of Kerr-McGee or Continental, MSM aquired the assets and contracts of Polaris. When Kerr-McGee and Continental were informed that MSM had acquired Polaris, both insisted that MSM complete the contracts thus assumed.

In May, 1975, Natrona began systematically overstaking certain claims of Kerr-McGee and Continental which had been contracted to Polaris or MSM. This was undertaken, according to Natrona, only after it was unable to convince Kerr-McGee and Continental that the work being performed by MSM was invalid and "should be turned over to plaintiff (Natrona) who was able to properly validate them." Natrona contends that activities of appellees at this time were designed to drive Natrona out of business and to circumvent the applicable mining statutes.

Natrona filed its original complaint August 7, 1975. An amended complaint was filed in November, 1975 against Continental, Kerr-McGee, Phillips Petroleum Company, MSM and various John Does. The amended complaint set forth three causes of action against all the defendants, four separate causes of action against Phillips.

Following extensive discovery, a hearing was set for October 18, 1976 on appellees' motions for summary judgment. Pursuant to a stipulation, all claims against Phillips Petroleum Company were dismissed with prejudice. At the hearing, Natrona also confessed that its second claim for relief against appellees did not state a claim upon which relief could be granted. Natrona further conceded that there was no justiciable controversy as to certain Exhibit "B" claims and that the complaint should be amended to delete them. (The Exhibit "B" claims were the "Third" and "Forth" causes of action against Kerr-McGee.)

The trial court's opinion recognized, in detail, the limited utilization of summary judgment in antitrust litigation. However, the court cited numerous opinions delineating the essential elements of an antitrust action and the manner in which they must be established. In its detailed and comprehensive Memorandum Opinion and Order the District Court found that: appellees had not conspired, combined or contracted to fix prices in the claim staking and validation business or to boycott Natrona; appellees had not monopolized or attempted to monopolize the claim staking and validation business in violation of Sections 1 and 2 of the Sherman Act; Natrona's third claim for damages was without merit; Kerr-McGee and Continental ceased doing business with Natrona and sought the services of another locator for sound business reasons, i.e., both believed that Natrona had raised it prices too high and that Natrona in damages for allegedly cancelling several contracts, inasmuch as Kerr-McGee had paid the invoices Natrona had failed to assert further payment was due and owing.

On appeal Natrona contends that: (1) the amended complaint sets forth activities by appellees which, if proved at trial, would constitute violations of Sections 1 and 2 of the Sherman Act; (2) at trial it will introduce evidence that establishes appellees' violation of the Sherman Act and the common law of Woming regulating unfair competition and anti-competitive conspiracies; and, (3) summary judgment was improperly and prematurely granted by the trial court.

I.

Natrona contends that the amended complaint sets forth activities of appellees which, if proved at trial, would constitute violations of Sections 1 and 2 of Sherman Act. (As noted, supra, at the motion hearing, Natrona conceded that all the actions against Phillips, one action against all the appellees, and two separate causes of action against Kerr-McGee failed to state claims upon which relief could be granted.)

In presenting this argument, Natrona has set forth seven sub-contentions delineating activities which may give rise to anti-trust violations. Significantly, however, Natrona has not presented any evidence in the record which establishes that appellees engaged in activities giving rise to anti-trust violations. Rather, Natrona has undertaken, both within its brief and during oral argument,...