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Nichols Motorcycle Supply Inc. v. Dunlop Tire Corp., 93 C 5578.

Document Cited authorities 97 Cited in 35 Precedent Map Related
Vincent
Decision Date18 September 1995
Docket NumberNo. 93 C 5578.,93 C 5578.
PartiesNICHOLS MOTORCYCLE SUPPLY INC., an Illinois corporation, Plaintiff, v. DUNLOP TIRE CORPORATION, a Delaware corporation, Ed Tucker Distributor, Inc. d/b/a Tucker-Rocky Distributing, a Texas corporation, and Lemans Corporation, a Wisconsin corporation, Defendants.
CourtU.S. District Court — Northern District of Illinois

913 F. Supp. 1088

NICHOLS MOTORCYCLE SUPPLY INC., an Illinois corporation, Plaintiff, v. DUNLOP TIRE CORPORATION, a Delaware corporation, Ed Tucker Distributor, Inc. d/b/a Tucker-Rocky Distributing, a Texas corporation, and Lemans Corporation, a Wisconsin corporation, Defendants.

No. 93 C 5578.

United States District Court, N.D. Illinois, Eastern Division.

September 6, 1995.

Order Vacating Decision in Part Pursuant to Settlement September 18, 1995.

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Joseph G. Bisceglia, James A. McKenna, Royce Richard Bedward, Steven P. Blonder, Jenner & Block, Chicago, IL, Richard P. Campbell, Campbell & DiVincenzo, Chicago, IL, Anthony S. DiVincenzo, Campbell & DiVincenzo, Chicago, IL, for Nichols Motorcycle Supply, Inc.

Kenneth Henry Hoch, Robert Thomas Joseph, Patrick John Kelly, David E. Lieberman, Sonnenschein, Nath & Rosenthal, Chicago, IL, for Dunlop Tire Corp.

Joseph E. Coughlin, Terrence Patrick Canade, Michael J. Gaertner, Lord, Bissell & Brook, Chicago, IL, for Ed Tucker Distributor, Inc.

Ethan Edward Trull, Alexander S. Vesselinovitch, Seyfarth, Shaw, Fairweather & Geraldson, Chicago, IL, David J. MacDougall, Brennan, Steil, Basting & MacDougall, Janesville, WI, for Lemans Corp. 

                                                   TABLE OF CONTENTS
                 I.  The Facts ................................................................................1097
                     A. Nichols ...............................................................................1097
                     B. Dunlop ................................................................................1098
                     C. Metzeler ..............................................................................1099
                     D. Tucker/Rocky ..........................................................................1099
                     E. Parts Unlimited .......................................................................1099
                     F. Combined Market Share .................................................................1100
                     G. The Economic Experts ..................................................................1100
                II.  The Antitrust Conspiracy Claims ..........................................................1100
                     A. The Sherman Act § 1 ..............................................................1100
                        1. Count I: Per Se Violations .........................................................1101
                           a. Legal Standards .................................................................1101
                           b. The Plaintiffs Evidence .........................................................1105
                              (i)   The Year 1991 .............................................................1105
                              (ii)  The Year 1992 .............................................................1105
                              (iii) The Year 1993 .............................................................1107
                              (iv)  March 1993-June 15, 1993 ..................................................1108
                                    (a)  March 15, 1993: Tucker/Rocky Article Quoting Bob Gregg (PX
                                         382) .................................................................1108
                                    (b)  The March 22, 1993 Gregg Letter (PX 4C) ..............................1108
                                    (e)  March 22, 1993: Parts Unlimited Revises Price List (PX 444) ..........1109
                                    (d)  March 31, 1993: Phone Call (PX 624) ..................................1110
                                    (e)  Late March 1993: Mike Buckley Replaces Pat Log-Lie as Dunlop's
                                         National Sales Manager ...............................................1110
                                    (f)  Late March 1993: Gregg Phone Call to Buckley Regarding Termination
                                         of Distributors ......................................................1110
                                    (g)  April 1, 1993: Buckley Memo To Dunlop Distributors (PX 2) ............1110
                                    (h)  The April 8, 1993 Gregg Letter (PX 5) ................................1110
                                    (i)  April Phone Call Between Buckley & Gregg Regarding April 8
                                         1992 Gregg Letter ....................................................1111
                                    (j)  April 30, 1993: Logue Conversation with Motorcycle Stuff Regarding
                                         Tucker/Rocky's Low Prices ............................................1111
                                    (k)  May 6, 1993: Buckley Visits Nichols, Meets Jack Jesse, and Writes
                                         Call Reports (PX 14) .................................................1111
                                    (l)  May 6, 1993: Buckley Spends Evening with Jeff Fox of Parts
                                         Unlimited ............................................................1112
                                    (m)  May 7, 1993: Buckley Visits Tucker/Rocky Warehouse in Chicago ........1112
                                    (n)  Early May 1993: "Firm Commitments" (PX 17) ...........................1112
                                    (o)  Late May 1993: Tucker/Rocky Issues Revised Price List (PX 214
                                         PX 645) ..............................................................1112
                                    (p)  May 20,1993: Buckley's "Price War" Memo (PX 3) .......................1112
                                    (q)  Buckley's Memos to Robin Mitchell (PX 17; PX 18) .....................1113
                                    (r)  June 15, 1993: Dunlop Terminates Nichols (PX 16) .....................1114
                              (v)   Post-Termination Evidence .................................................1114
                                    (a)  June 1993: Tucker/Rocky Branch Manager's Report (PX 277) .............1114
                                    (b)  Joe Piazza (PX 540) ..................................................1114
                                    (c)  Tucker/Rocky's Missing Branch Manager Reports ........................1114
                                    (d)  September 1993: Trade Show Memo (PX 206) .............................1114
                                    (e)  Metzeler Memo of October 5, 1993 on "Price Stability" (PX 303) .......1114
                                    (f)  Tucker/Rocky Memo Regarding "Market Stabilizing Programs"
                                         (PX 280) .............................................................1115
                                    (g)  Dunlop Raises MSD Mid-Year ...........................................1115
                
                                    (h)  Rick Ward (DX 36) ....................................................1115
                                    (i)  1994 Price Increases .................................................1115
                                    (j)  Tom Peterich .........................................................1115
                               (vi) Inadmissible Testimony ....................................................1115
                                    (a)  James Stewart ........................................................1115
                                    (b)  Rocky Trevino (PX 622) ...............................................1116
                                    (c)  Terry Baisley-William Giacomelli Conversation (PX 643) ...............1116
                           c.  Analysis .......................................................................1116
                               (i)  The Horizontal Agreement ..................................................1117
                               (ii) The Vertical Agreement ....................................................1118
                           (a) There is no evidence of parallelism supporting the inference of an agreement
                               to terminate Nichols or to fix Prices ..........................................1118
                               (i)  Market Theory .............................................................1118
                               (ii) Three Examples of Non-Parallel Behavior ...................................1119
                                    (a)  Dunlop Unilaterally Decided to Reduce Its Distribution Network........1119
                                    (b)  Parts Unlimited's 1993 Price Increases ...............................1121
                                    (c)  Tucker/Rocky and Parts Unlimited's 1994 Price Increases ..............1122
                           (b) The Gregg letters are ambiguous evidence and therefore do not support a
                               inference of pricefixing or a termination agreement ............................1122
                               (i)   The March 22, 1993 Gregg Letter ..........................................1122
                               (ii)  The April 8, 1993 Gregg Letter ...........................................1124
                           (c) There is no other direct or circumstantial evidence of collusion supporting
                               Nichols' section 1 claim .......................................................1125
                        2. Count II: The Rule of Reason .......................................................1125
                           a. Legal Standards .................................................................1125
                           b. Analysis ........................................................................1126
                        3. Count III: Group Boycott ...........................................................1128
                     B. The Illinois Antitrust Act ............................................................1128
                        1. Count IV: Per Se Pricefixing .......................................................1128
                        2. Count V: Rule of Reason ............................................................1129
                        3. Count VI: Group Boycott ............................................................1129
                     C. The Robinson-Patman Act Claims ........................................................1129
                        1. The Facts ..........................................................................1129
                        2. The Merits .........................................................................1130
                           a. Dunlop: Section 2(a) ............................................................1130
                           b. Tucker/Rocky
...

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