Searer v. West Michigan Telecasters, Inc., Civ. A. No. G 210 73 CA1.

• Citation: 381 F. Supp. 634
• Decision Date: 22 August 1974
• Docket Number: Civ. A. No. G 210 73 CA1.
• Parties: James R. SEARER, Plaintiff, v. WEST MICHIGAN TELECASTERS, INC., a Michigan corporation, Defendant.
• Court: U.S. District Court — Western District of Michigan

381 F. Supp. 634

James R. SEARER, Plaintiff, v. WEST MICHIGAN TELECASTERS, INC., a Michigan corporation, Defendant.

Civ. A. No. G 210 73 CA1.

United States District Court, W. D. Michigan, S. D.

August 22, 1974.

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Carl S. Krueger, Krueger & Lesica, Muskegon Hts., Mich., for plaintiff.

Peter W. Steketee, Vander Veen, Freihofer & Cook, P. C., Grand Rapids, Mich., for defendant.

MEMORANDUM OPINION

FEIKENS, District Judge, Sitting by Designation.

This is a section one, Sherman Act (15 U.S.C. § 1) suit. Plaintiff, a Michigan resident, was affiliated from 1968 through 1972 with Channel 41, Inc. in Battle Creek, Michigan, as its principal stockholder, director, executive vice president and president. Defendant, West Michigan Telecasters, Inc., a Michigan corporation, owns and operates television Channel 13 in Grand Rapids, Michigan.

Plaintiff's theory of recovery has undergone some rather substantial changes since the suit was first filed. The original complaint alleged that defendant had from 1965 through 1972 engaged in "numerous illegal actions in an effort to delay, impede, and block the efforts of plaintiff to establish and continue a viable television facility in Battle Creek, Michigan, which would be capable of successfully competing with defendant's station and others in the Western Michigan market". Among the specific actions cited were attempts to induce or coerce the persons associated with plaintiff to breach their contractual relations with him; the institution of a "spurious law suit against plaintiff and his associates"; various attempts to extend Channel 13's signal into Channel 41's broadcast area; disparagement of plaintiff's character and attempts to impair his credit; insertion of unauthorized programming on the network feed which Channel 41 received from Channel 13, causing blank spaces and other interferences with Channel 41's programming; attempts to block Channel 41's affiliation with the American Broadcasting Company; and "other tactics" designed to obstruct Channel 41's operation. The complaint then asserted that:

"the acts of Defendant set forth above were in violation of Plaintiff's rights and interests; that said acts of Defendants have seriously damaged Plaintiff's reputation as a broadcaster; that the money value of Plaintiff's interest in the joint venture, partnership and corporations in connection with Channel 41 has been seriously impaired by the unfair trade practices and tactics of Defendants; and said wrongful acts of Defendants have impeded Plaintiff's opportunity to pursue his chosen profession without undue interference."

Recovery was sought under the unfair trade practices provisions of the Federal Trade Commission Act, 15 U.S.C. § 45(a)(1).

Defendant's response was a motion to dismiss, contending that there is no private cause of action under that statute. See, e.g., Holloway v. Bristol-Myers Corp., 158 U.S.App.D.C. 207, 485 F.2d 986 (1973); Carlson v. Coca-Cola Co., 483 F.2d 279 (9th Cir. 1973). Plaintiff then amended his complaint to assert a violation of sections one and two of the Sherman Act. However, he did not even attempt to state a claim of attempt or conspiracy to monopolize or of monopolization. All allegations, argument and proofs have been directed toward a conspiracy in restraint of trade, and plaintiff's counsel has conceded that he has no section two case. Transcript of Hearing, February 8, 1974, at 6. The conspiracy alleged under section one was itself highly suspect, plaintiff having identified the conspirators only as "agents of Defendant whose names are not presently known to Plaintiff and others not presently known to Plaintiff".

Following a renewal of defendant's motion to dismiss, the matter came before the court on oral argument. At that time plaintiff's attorney suggested that the "others" referred to in the amended complaint were in fact one Mary Jane Morris, a former associate of the plaintiff, and that the unlawful conspiratorial activity consisted of negotiations between Morris and West Michigan Telecasters to settle a prior lawsuit to which the plaintiff here had been a party. Plaintiff was given a further opportunity to amend his complaint so as to properly identify the conspirators and to describe the nature of the alleged conspiracy.

In his second amended complaint plaintiff once again substantially changed his theory of the case, contending that the American Broadcasting Company was defendant's co-conspirator, and that the conspiracy consisted of ABC's acquiescence in West Michigan's practice of clipping and fraudulent billing for network broadcasts. See Federal Communications Commission, Public Notice: "Clipping" of Radio and Television Network Programs, FCC 73-230 (March 2, 1973):

"Affiliation contracts between broadcast stations and networks typically provide that the station will be compensated for carrying specific network programs, commercials, and other material, including, but not limited to, network identifications, credit announcements or promotional material. In order to collect payment, the station periodically submits a statement to the network certifying that the specified network material has been broadcast. A certification form usually has space to indicate deletions or cancellations of network material. If deletions or cancellations are indicated by the station, the amount of payment received from the network may be reduced. `Network clipping' means that the licensee has not fulfilled its contractual obligation to the network, by certifying that specified network material was broadcast in full when there were, in fact, cancellations or deletions."

Both Channel 13 and Channel 41 are ABC affiliates. Until recently, and during the period in question, Channel 41 did not receive its signal directly from ABC, but rather, pursuant to a contract with Channel 13, picked up its ABC signal from Channel 13's transmission. Plaintiff claims that Channel 13 was clipping network programs in order to carry its own commercials, thus creating unannounced variations in the programming received by Channel 41. Plaintiff says that this disruption caused blank spaces in Channel 41's transmission and made him appear incompetent. This claimed appearance of incompetence was in turn alleged to be responsible for plaintiff's inability to sell advertising for the station, which constituted the alleged restraint of trade.

In support of its vigorously reasserted motion to dismiss, defendant submitted the affidavit of George Lyons, vice president and general manager of West Michigan Telecasters. One issue raised was whether plaintiff's own negligence in not adhering to the terms of his contract with Channel 13 was the real cause of the claimed injury. Pursuant to Rule 12(b), the court determined that matters outside the pleadings had been put in issue and that the motion to dismiss should be treated as one for summary judgment and disposed of as provided in Rule 56. Both parties were so notified, and were then given an opportunity to present all material made pertinent to such a motion by Rule 56. Plaintiff has submitted two affidavits; defendant has made no further submissions.

Although the affidavits and other materials relevant to this motion do not resolve all factual disputes, particularly as to whether the defendant engaged in clipping, that alone is not enough to resist summary judgment. The fact remaining at issue must be material. Proler Steel Corp. v. Luria Bros. & Co., 417 F.2d 272, 273-274 (9th Cir. 1969). A dispute as to immaterial facts does not bar summary judgment. Robbins v. Gould, 278 F.2d 116, 120 (5th Cir. 1960).

"The principal question that arises on a motion for summary judgment is whether factual issues of legal significance — `material facts' — remain to be resolved at trial. Rule 56(c), F.R. Civ.P., provides that summary judgment shall be granted where the record shows `no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.' It is not enough for the party opposing the motion for summary judgment merely to point to disputes of fact. As this court observed in McGuire v. Columbia Broadcasting System, Inc., 399 F.2d 902, 905 (9th Cir. 1968), `The showing of a "genuine issue for trial" is predicated upon the existence of a legal theory which remains viable under the asserted version of the facts, and which would entitle the party opposing the motion (assuming his version to be true) to a judgment as a matter of law.'" Bushie v. Stenocord Corp., 460 F.2d 116, 118-119 (9th Cir. 1972).

For purposes of this motion all genuine issues of fact are resolved in favor of the plaintiff and all inferences drawn from the facts thus presented are likewise those which are most favorable to the plaintiff. See Adickes v. S. H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962); 6 J. Moore, Federal Practice ¶ 56.153 at 2337 (2d ed. 1974). Accepting plaintiff's version of the facts, the court holds that plaintiff has no cause of action under the Sherman Act.

Plaintiff's case is tenuous and awkwardly contrived. Some of its essential elements are open to serious question. But the most basic and ultimately fatal flaw is the absence of a direct and substantial causal link between the alleged conspiracy and the claimed restraint of trade. Unless the conspiracy is of a type which is considered a per se violation, section one of the Sherman Act applies only if an unreasonable restraint of trade was either the object or the effect of the conspiracy. See Times-Picayune Publishing Co. v. United States, 345 U.S. 594, 614, 73 S.Ct. 872, 97 L.Ed. 1277 (1953); Cities Service Oil Co. v. Coleman Oil Co., 470 F.2d 925, 930-931 (1st Cir. 1972). The type of agreement involved here does not fall within any of the per se categories, and there is no indication that the...