Richards v. Nielsen Freight Lines

Citation602 F. Supp. 1224
Decision Date15 February 1985
Docket NumberNo. Civ. S-81-838 LKK.,Civ. S-81-838 LKK.
PartiesDick G. RICHARDS and Capitol Bank of Commerce, Plaintiffs, v. NIELSEN FREIGHT LINES, Di Salvo Trucking Company, Delta Lines, Inc., Peters Truck Lines, Local No. 150, Chauffeurs, Teamsters and Helpers, Defendants.
CourtU.S. District Court — Eastern District of California



James Duryea, Jr., David Russo, William Taylor, Handler, Baker, Greene & Taylor, San Francisco, Cal., for plaintiffs.

William G. Van Der Mei, Law Corp., Sacramento, Cal., for Peters Truck Lines.

Beeson, Tayer & Bodine, Sacramento, Cal., for Local 150.

McCutchen, Doyle, Brown & Enerson, Charles Ferguson, San Francisco, Cal., for Delta Lines.

Michael J. Stecher, Silver, Rosen, Fischer & Stecher, San Francisco, Cal., for Di Salvo Trucking.

Robert Weir, San Jose, Cal., for Nielsen Freight.


KARLTON, Chief Judge.

Plaintiff Foothills Express, Inc.,1 a nonunion trucking company, filed this action against Nielsen Freight Lines, Inc. ("Nielsen"), Di Salvo Trucking Co. ("Di Salvo"), Delta Lines, Inc. ("Delta"), and Peters Truck Lines ("Peters"), all trucking companies, and Local 150 of the Teamsters Union ("the Union").2 Plaintiff seeks treble damages alleging that pursuant to an agreement in violation of the antitrust laws, the trucking company defendants, who are at once direct competitors of the plaintiff and purchasers of plaintiff's "interlining services," engaged in a concerted refusal to deal, i.e. "group boycott" of plaintiff.

All parties in this action have filed cross-motions for summary judgment or partial summary judgment. Those motions are disposed of in this Memorandum and Order.


This court exercises subject matter jurisdiction over the antitrust claim pursuant to 15 U.S.C. § 4 (Sherman Act), 28 U.S.C. §§ 1331 (West Supp.1984) (federal question) and 1337(a) (interstate commerce). See California Dump Truck Owners Ass'n, Inc. v. Associated General Contractors, 562 F.2d 607, 609 & n. 1 (9th Cir. 1977). Subject matter jurisdiction over the state claims is predicated upon pendent jurisdiction. See United Mine Workers v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 1138, 16 L.Ed.2d 218 (1966).

A. The Parties

At all times relevant to this lawsuit, the plaintiff was a non-union trucking company located and operating within this judicial district.3 The defendants are four unionized trucking companies and the Union, a local labor organization which represents the employees of the trucking company defendants. The trucking company parties at all relevant times were engaged in the business of transporting goods, commodities, and other property interstate and within California.

B. The Charging Allegations

The complaint charges violation of sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 and 2, in that the defendants entered into three conspiracies in unreasonable restraint of trade in two markets.4

1. The First Conspiracy (Complaint ¶ 13)

Trucking company defendants Nielsen and Di Salvo allegedly entered into a conspiracy to engage in a concerted refusal to deal with the plaintiff.5 This conspiracy was carried out by the termination of all "interlining" relationships the conspirators had with the plaintiff. The purpose of this conspiracy was to restrain trade and monopolize the interlining market.

2. The Second Conspiracy (Complaint ¶ 14)

All the trucking company defendants are alleged to have engaged in a conspiracy identical to that described above. In this second conspiracy, however, they are alleged to have acted "in concert" with the Union. The alleged purpose of this conspiracy also was to restrain trade and monopolize the interlining market.

3. The Third Conspiracy (Complaint ¶ 15)

The third and final conspiracy allegedly originated with the Union. The Union is accused of having induced or enlisted all the trucking company defendants into joining a conspiracy essentially identical to those described above. According to the complaint, the purpose of this conspiracy was to eliminate competition in the interlining market, to eliminate plaintiff, a non-union carrier, from the market, and to restrain trade in the market.

A. The Trucking Companies

At all times relevant to this action, the trucking company parties were regularly engaged in the transportation of goods, commodities, and other property between points in California, as well as interstate transport. Each of them were "less than truckload" general freight carriers, which means that they (as "originating carriers") picked up freight from several customers (the "shippers") for delivery to a centrally-located terminal. At the terminal, the goods were consolidated and/or redistributed for ultimate delivery to multiple receivers (the "consignees").

Each trucking company in this action had the necessary legal authority to carry freight into the foothills region of Northern California. Nonetheless, each of the defendant trucking defendants elected not to carry their freight to the foothills themselves. Instead, they delivered their freight as far as Sacramento, and subcontracted with Foothills Express to complete the delivery into the foothills. This arrangement is called "interlining." Foothills, which made the final delivery into the foothills (the "interliner"), is said to have sold "interlining services" to the defendant trucking companies.6

Each of the trucking company defendants' employees were members of the defendant Union. The plaintiff's employees were not members of any recognized union. When the defendant trucking companies interlined with Foothills, therefore, the defendant trucking companies' union member employees turned over freight to non-union members for final deliveries which the companies were authorized to make themselves with their own unionized drivers.

B. "Back Solicitation"

The practice of interlining is apparently a delicate business, as it may involve direct competitors contracting with each other to split up particular shipments and the costs and revenues therefor. By interlining for a competitor, the interliner necessarily gained easy and direct access to all the information contained in the competitor's freight bill. This information included who the competition's customers were, as well as the particular charges, and types of freights carried by the competitor. How much of this information was generally available throughout the industry is disputed.

An interlining trucking company which used the information gleaned from the competition's bill of lading to solicit the business of the originating carrier's customers, was said to have "back solicited" the originating carrier's customers. All the parties appear to agree with the definition of "back solicitation" offered by the President of defendant Nielsen Trucking Company, Norman Nielsen (on deposition):

"Back solicitation" to me means that any shipments that we should interline to another carrier for subsequent delivery, that information on that freight bill is then used by the delivery carrier for the purpose of going directly to the shipper and soliciting that merchandise direct and eliminating the pickup originating carrier.... To "go direct" is to go to that shipper and ask the shipper to turn that shipment not to the originating carrier and interline it to Foothills at another location, but to allow Foothills to handle that shipment on a direct basis from point of origin to point of destination, and by doing that, eliminating the originating carrier.

Dep. of Norman Nielsen at 22.7


Seven cross-motions for summary judgment are currently before the court. Plaintiff moves for summary judgment on the issue of liability for the alleged "back solicitation conspiracy" among Nielsen, Di Salvo, and Peters.8 According to plaintiff, the undisputed admissions of three of the trucking company defendants establishes the existence of a conspiracy among them to enforce an industrywide rule prohibiting back solicitation. It claims that enforcement of this rule was accomplished through a group boycott which, it asserts, is a "per se" violation of the antitrust laws, thus entitling it to judgment as a matter of law.

Each of the trucking company defendants and the Union have moved for summary judgment as well. The trucking companies claim that no evidence exists of a conspiracy to boycott or to refuse to deal with Foothills, and that undisputed evidence of sound business justifications for their actions effectively rebuts any inference which might be drawn from apparently "parallel" conduct among them.9 The Union claims that whatever actions it took were immune from antitrust liability under the labor exemptions to the antitrust laws, and therefore the plaintiff fails to state a claim against the Union as a matter of law. The trucking companies also invoke the labor exemption to immunize any boycott agreement they may have reached with the Union.

The remaining motions are discussed and disposed of at section IX, infra.


Summary judgment is appropriate only when it is demonstrated that there exists no genuine issue as to any material fact and, viewing the evidence in the light most favorable to the party opposing the motion, the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c);10 Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 467, 82 S.Ct. 486, 488, 7 L.Ed.2d 458 (1962); Retail Clerks Union Local 648 v. Hub Pharmacy, 707 F.2d 1030, 1033 (9th Cir.1983). The initial and ultimate burden of proof is upon the moving party. Aydin Corp. v. Loral Corp., 718 F.2d 897, 901-02 (9th Cir.1983).

If the moving party meets its initial burden, the burden of production shifts to the party opposing the motion to establish the existence of a genuine dispute as to a material fact. British Airways Board v. Boeing Co., 585 F.2d 946, 951 (9th Cir. ...

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