Products Liability Ins. Agency, Inc. v. Crum & Forster Ins. Companies
Citation | 682 F.2d 660 |
Decision Date | 28 June 1982 |
Docket Number | No. 81-2616,81-2616 |
Parties | 1982-2 Trade Cases 64,813 PRODUCTS LIABILITY INSURANCE AGENCY, INC., Plaintiff-Appellant, v. CRUM & FORSTER INSURANCE COMPANIES a/k/a United States Fire Insurance Company, et al., Defendants-Appellees. |
Court | United States Courts of Appeals. United States Court of Appeals (7th Circuit) |
Robert Plotkin, Plotkin & Jacobs, Ltd., Chicago, Ill., for plaintiff-appellant.
Samuel Weisbard, McDermott, Will & Emery, MaryAnn C. Hayes, Kirkland & Ellis, Victor G. Savikas, Karon, Morrison & Savikas, Ltd., Chicago, Ill., for defendants-appellees.
Before POSNER, Circuit Judge, DAVIS, Associate Judge, * and COFFEY, Circuit Judge.
The complaint in this antitrust case, which was dismissed below on the defendants' motion for summary judgment after pretrial discovery had been completed, alleges a collective refusal to deal ("boycott") in violation of section 1 of the Sherman Act, 15 U.S.C. § 1, which forbids agreements in restraint of trade. The plaintiff is a corporation owned and operated by an Illinois lawyer named Byron Getzoff, and since, at least so far as the issues in this case are concerned, it has no existence apart from Getzoff, we shall treat him as the plaintiff to make our opinion simpler. Also, although there are numerous defendants, we need mention only two-Crum & Forster Insurance Companies, which the parties treat as a single entity though in fact it is a group of affiliated corporations; and Paris, O'Day & Reed, Inc., an insurance agency.
Getzoff was a trial lawyer who had long specialized in defending ladder manufacturers against product liability claims. He was also an insurance broker who, working through Paris, had procured product liability insurance for the ladder manufacturers, first from the Kemper group of insurance companies, then from Crum & Forster. Paris split its commissions on this insurance with Getzoff, whose share in 1976 exceeded $100,000. Getzoff was at the same time the lead attorney handling product liability claims for Crum & Forster.
Crum & Forster was unaware of Getzoff's activities as a broker until Getzoff, who had had a falling out with Paris, wrote a letter to Crum & Forster on August 30, 1976, that began: The letter went on to disparage Paris's contribution to the insurance program, to describe product liability insurance for ladder manufacturers as "the captive market that I (Getzoff) have developed," to inform Crum & Forster that Getzoff had requested each of the manufacturers to designate him as its exclusive broker for such insurance, and to request "an immediate meeting so that an orderly transfer of this account can be made from Paris, O'Day & Reed to this office."
In the weeks that followed, brokerage designations flowed in to Getzoff from the ladder manufacturers. But on September 20 Crum & Forster, responding to Getzoff's letter, stated in a roundabout but nonetheless unmistakable fashion that it would not appoint him an agent of the company. This meant that as broker he would be acting strictly on behalf of the manufacturers-that is, as an intermediary between the manufacturers and Paris, rather than between the manufacturers and Crum & Forster as they and he had intended when they had designated him as their exclusive broker. Crum & Forster conveyed the bad news to the manufacturers, and by November 1976 most of them had revoked their designations of Getzoff. On November 8, 1976, Crum & Forster terminated Getzoff's legal services. The complaint does not question the lawfulness of that termination; it alleges a conspiracy between Crum & Forster and Paris to exclude Getzoff from the business of product liability insurance for ladder manufacturers.
In concluding that Getzoff had not presented enough evidence of conspiracy to resist the defendants' motion for summary judgment, the district court gave more weight than we would be inclined to give to denials contained in the affidavits of two employees of Crum & Forster. One affidavit stated that Crum & Forster's refusal to appoint Getzoff an agent was The other affidavit stated: Conclusional denials of conspiracy in affidavits obviously drafted by lawyers are entitled to little weight in deciding whether to grant an antitrust defendant's motion for summary judgment.
But this does not mean that Getzoff is entitled to a trial. Pretrial discovery yielded no evidence of an agreement between Paris and Crum & Forster to deny a role to Getzoff in the ladder manufacturers' insurance program. True, there were frequent communications between Paris and Crum & Forster prior to the September 20 letter that was the immediate cause of Getzoff's exclusion from the program, but there is no evidence that these communications included requests by Paris to exclude Getzoff or that Crum & Forster's actions were in response to such requests. The evidence gathered in pretrial discovery actually rebuts any inference of conspiracy, even if we ignore the promptings of common sense and assume that Getzoff's "dual role," as his brief delicately describes it, had nothing to do with Crum & Forster's refusal to appoint him an insurance agent for the ladder program, though it is why Crum & Forster terminated his legal services. The affidavits do not state that Getzoff's dual role was the reason why he was not given the agency either in place of or in competition with Paris, and perhaps his rapport with the ladder manufacturers and his influence over their choice of insurers might have induced Crum & Forster, in other circumstances, to overlook Getzoff's conflict of interest, which could be and was eliminated by firing him as its claims counsel. But as the ladder program was nationwide and Getzoff a licensed insurance broker only in Illinois, he was ineligible to be an insurance agent for Crum & Forster. He says that he could have gotten licensed in other states, and perhaps in time he could have; but in September 1976 he was not licensed in any other state, so we cannot understand how Crum & Forster could have been expected to appoint him an agent to compete with or replace Paris at that time.
If, after the completion of pretrial discovery, it is clear that the plaintiff will not be able to establish at trial an essential element of his claim, the defendant is entitled to have the complaint dismissed on summary judgment; a trial would be a waste of time. This is as true in an antitrust case as in any other type of case. See, e.g., Weit v. Continental Ill. Nat'l Bank & Trust Co., 641 F.2d 457, 464 (7th Cir. 1981). It is clear that the plaintiff in this case will not be able to prove that his exclusion was the consequence of anything more than a unilateral act of Crum & Forster; and if that is all there was, there was no conspiracy, and hence no violation of section 1.
But even if we are wrong and a conspiracy between Paris and Crum & Forster to exclude Getzoff from becoming an insurance agent for the ladder program could somehow be teased out of the depositions and affidavits, summary judgment for the defendants was proper because no evidence gathered in the course of pretrial discovery points to a conspiracy in restraint of trade. To prove that a conspiracy or other form of agreement violates section 1 of the Sherman Act, the plaintiff must show either that it falls in one of the categories of "per se" illegality or that it has an actual or at least probable anticompetitive effect. Agreements that are illegal per se are for the most part horizontal, that is, between competing sellers, which Crum & Forster and Paris are not. The...
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