Parsons v. Ford Motor Co.
| Decision Date | 05 March 1982 |
| Docket Number | W-B,No. 80-2258,80-2258 |
| Citation | 669 F.2d 308 |
| Parties | 1982-1 Trade Cases 64,581 Wayne PARSONS, d/b/a Executive Motors Unlimited, Payless Car Rental Systems, Southwest Car Rentals, Executive Leasing, Wayne Motor Sales, BJP Enterprises andar-J, Inc., Plaintiff-Appellant, v. FORD MOTOR COMPANY, A. C. Collins Ford, Inc. and Charlie Hillard Ford, Inc., et al., Defendants-Appellees. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Cooper, Hayner, Miller & Long, Michael R. Cooper, Dallas, Tex., for plaintiff-appellant.
Lyman G. Hughes, Cynthia H. Morriss, Dallas, Tex., for Ford Motor Co.
Max Hendrick, III, Houston, Tex., for A. C. Collins Ford, Inc.
Bruce W. Bowman, Jr., Dallas, Tex., for Hilliard Ford, Inc.
Appeal from the United States District Court for the Northern District of Texas.
Before GEE, GARZA and REAVLEY, Circuit Judges.
Wayne Parsons initiated this action against the Ford Motor Company and a number of individual Ford dealers 1, with the allegation that defendants had engaged in a conspiracy against him in violation of sections 1 and 2 of the Sherman Anti-Trust Act 2, as well as sections 15.02-.04 of the Texas Business and Commerce Code. Specifically, plaintiff charged that he was frozen out of the market for new Ford vehicles after Ford formulated a policy prohibiting their dealers from selling to "bootleggers" like himself.
Plaintiff was engaged in the inter-dealership transfer of new Ford vehicles, commonly known as bootlegging, in the years 1976 through 1978. He conducted this venture under a variety of names: Executive Motors Unlimited, Payless Car Rental Systems, Southwest Car Rentals, Executive Leasing, Wayne Motor Sales, BJP Enterprises, and W. Bar J, Inc.
It is undisputed that, during these years, strong consumer demand existed for certain Ford models, such as pickups and Thunderbirds. In Texas, the state in which Parsons conducted the majority of his business, the demand for pickup trucks and vans was especially high. Many persons purchased them as recreational vehicles. Demand outstripped supply of these vehicles in many areas. Plaintiff alleviated this situation in the short run by inserting himself into the Ford allocation system. He purchased vehicles from one dealer and then resold them to another who was experiencing very high demand for the particular vehicle. Parsons contends that he simply increased interdealer competition by enabling dealers to obtain vehicles that they otherwise would have been unable to purchase.
Ford characterizes plaintiff's activities differently and charges him with obtaining vehicles from Ford dealers by fraudulently portraying himself as a legitimate fleet purchaser of vehicles. 3 He was only able to engage in this business because of the lower prices charged to fleet customers and the fact that dealers did not have to take fleet purchases off their show room floors. Ford maintains that once it ascertained the fraudulent nature of plaintiff's business, it took reasonable steps to ensure that vehicles ordered from district fleet allocations were actually purchased by legitimate fleet end-users.
The Ford allocation system at issue in this case is comprised of two components. In a given geographical area or "district," a dealer may obtain vehicles through both the "basic allocation" system and the "fleet allocation" system. A dealer's basic allocation is computed from the number of vehicle sales and the inventory of unsold vehicles. More sales and fewer models on the dealer's lot will result in an increased allocation; conversely, fewer sales and more unsold models decrease the allocation. The computations which provide the basis for this allocation are made on a monthly basis and separately for each Ford model.
The fleet allocation is calculated on a district, rather than dealer, basis. Generally, a fleet customer is one with ten or more vehicles, commonly for rental or corporate use. The separate fleet allocation system was established because, while it is relatively easy to determine the number of large fleet customers in a district, it is very difficult to predict from which dealer a large fleet purchaser will seek to fill his requirements. Without the availability of a separate fleet allocation, a dealer might be unable to fill a major order by a large fleet user or could be left temporarily without vehicles to sell to other customers. Fleet customers are obviously very important to Ford sales; it is, therefore, critical that an adequate stock of vehicles be maintained for this purpose.
Ford's allocation system does not always work perfectly; obviously, it is difficult to prognosticate trends in vehicle sales. Plaintiff asserts that the failure of the allocation system led him into this "bootlegging" business. A Ford dealer offered to purchase vehicles bought from other dealers. Parsons also credits dealer suggestions with leading him to do business under many different names. Allegedly, this venture was very successful until Ford conspired with its dealers to force him out of business.
Ford paints a very different picture of plaintiff's operation. The company categorically denies any policy to prohibit sales to Parsons. Plaintiff was only required to demonstrate that he was a legitimate fleet buyer in order to take advantage of the fleet allocation system and price. Any fraudulent fleet purchase could have been filled from a dealer's basic allocation. This policy did adversely affect plaintiff, since he was not a legitimate fleet purchaser. 4 However, Ford contends that it was well within its rights to implement such a policy. 5
After plaintiff filed his original complaint, defendants moved for dismissal of all claims. The trial court granted this motion as to the section two Sherman Act claim. That claim, which was directed solely against Ford Motor Company, charged defendant with attempting to monopolize the sale of new Fords. The court pointed out that every manufacturer has a natural monopoly in the sale of his own products; such natural monopolies do not contravene anti-trust laws. United States v. E. I. de Pont de Nemours & Co., 351 U.S. 377, 393, 76 S.Ct. 994, 1006, 100 L.Ed. 1264 (1956); Spectrofuge Corp. v. Beckman Instruments, Inc., 575 F.2d 256 (5th Cir. 1978), cert. denied, 440 U.S. 939, 99 S.Ct. 1289, 59 L.Ed.2d 499 (1979). Upon completion of discovery, defendants moved for summary judgment on the remaining claims. At that time, the court granted summary judgment on the Sherman Act claim and dismissed plaintiff's state law claims without prejudice. The plaintiff brings this appeal to challenge the court's grant of summary judgment. After examining the record, we conclude that this was a proper case for summary disposition and, therefore, we affirm the decision of the trial court.
Before beginning a discussion of this case, we pause to acknowledge that summary judgment is extreme relief which should be approached very cautiously. The Supreme Court has long recognized that this procedure should be considered especially carefully in anti-trust actions. Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 82 S.Ct. 486, 7 L.Ed.2d 458 (1962). This is certainly not to say, however, that the procedure is inapplicable to anti-trust cases. See Solomon v. Houston Corrugated Box Co., 526 F.2d 389 (5th Cir. 1976); Blackburn v. Crum & Forster, 611 F.2d 102 (5th Cir.), cert. denied, 447 U.S. 906, 100 S.Ct. 2989, 64 L.Ed.2d 856 (1980). The appropriateness of summary judgment depends on the facts of the case considered.
Rule 56 of the Federal Rules of Civil Procedure mandates that prior to a grant of summary judgment a trial court must determine that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law. The evidence must be viewed in a light most favorable to the opposing party. Our review of the district court's judgment proceeds upon the same standard.
Parsons charged Ford Motor Company and certain named dealers with conspiring to force him out of the business in which he was theretofore engaged. This allegation was answered by defendants in the form of sworn denials. This Court recognizes that once defendants have made such sworn denials, summary judgment is appropriate unless plaintiff can produce significant probative evidence demonstrating the existence of a genuine fact issue. Solomon v. Houston Corrugated Box Co., supra, at 396. The trial judge found that plaintiff had failed in this task, despite the extensive discovery permitted.
Indeed, the plaintiff offered very meager evidence of conspiracy. 6 Moreover, when this evidence is closely examined, we find that the allegations merely reiterate that which Ford has admitted. Neither Ford nor many of its dealers like bootlegging, and they therefore took proper steps to ensure against future manipulation of the fleet allocation system. Enforcement of the company's fleet allocation system policy is not equivalent to conspiracy. 7 Given the dearth of conspiracy evidence, the plaintiff was properly prohibited from proceeding to trial on the hope of developing evidence to support allegations made in the complaint. First National Bank v. Cities Service Co., 391 U.S. 253, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968).
Plaintiff's failure to present significant probative evidence of conspiracy in response to defendants' sworn denials of all allegations rendered this case proper for summary disposition. 8 The district court granted a summary judgment for the defendants; we leave that decision undisturbed.
AFFIRMED.
1 The individual Ford dealers included in the complaint were A. C. Collins Ford, Inc., Charlie Hillard Ford, Inc., Horn Williams Ford, Inc., and Al Piemonte Ford, Inc. The only dealers who are parties to this appeal are A. C. Collins Ford, Inc., and Charlie Hillard Ford, Inc.
2 Section 1 of the Sherman Anti-Trust Act provides:
Every contract, combination in the form of trust or otherwise, or...
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