Semke v. Enid Automobile Dealers Association

• Decision Date: 14 April 1972
• Docket Number: No. 71-1224.,71-1224.
• Citation: 456 F.2d 1361
• Parties: L. G. SEMKE, d/b/a Semke Auto Mart, Plaintiff-Appellant, v. ENID AUTOMOBILE DEALERS ASSOCIATION et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

456 F.2d 1361 (1972)

L. G. SEMKE, d/b/a Semke Auto Mart, Plaintiff-Appellant, v. ENID AUTOMOBILE DEALERS ASSOCIATION et al., Defendants-Appellees.

No. 71-1224.

United States Court of Appeals, Tenth Circuit.

March 13, 1972.

Rehearing Denied April 14, 1972.

Harry L. Hobson, of Jochems, Sargent & Blaes, and Donald E. Lambdin, of Blair, Matlack, Rogg, Foote & Lambdin, Wichita, Kan. (William J. Otjen, Jr., Enid, Okl., on the brief), for plaintiff-appellant.

Lynn J. Bullis, Jr., of Monnet, Hayes, Bullis, Grubb & Thompson, Oklahoma City, Okl. (Earl B. Mitchell, Jr., of Mitchell, Mitchell, DeClerck & Cox, Enid, Okl., on the brief), for Enid Automobile Dealers Association, Day Ford Company and Gene Kurz.

C. Harold Thweatt, of Crowe, Dunlevy, Thweatt, Swinford, Johnson & Burdick, Oklahoma City, Okl. (Val R. Miller, of Crowe, Dunlevy, Thweatt, Swinford, Johnson & Burdick, Oklahoma City, Okl., on the brief) for Ford Motor Company.

Otjen & Carter, Enid, Okl., for Dierksen-Jones Buick Co., Inc., Dean Pearson Dodge, Inc., Sam Norton, Jr., and Stanley B. Stuart, d/b/a Norton-Stuart Pontiac-Cadillac of Enid, Fred L. Jones and Dean B. Pearson.

Harold J. Singer, of Mitchell, Singer & Johnston, Enid, Okl., for Fidelity Motors, a Partnership, Jane E. Champlin, Executrix of the Will and Estate of Joe N. Champlin, Deceased, and Clarence W. Durheim; Musser & Green, Enid, Okl., for Northcutt Chevrolet Co., Inc., Janzen Olds, Inc., Clarence J. Janzen and Leonard C. Northcutt.

Robert L. Gregory, Enid, Okl., for Hurst Motor Co. and Jimmy B. Hurst, Sr.

Lloyd W. McKnight, of McKnight, Gasaway & McKnight, Enid, Okl., for The Enid Radiophone Co., The Enid Publishing Company, Joseph F. Hardy, Milton B. Garber, John W. Taylor and Pat Murphy.

Before SETH and DOYLE, Circuit Judges, and MECHEM, District Judge.

WILLIAM E. DOYLE, Circuit Judge.

The within action was instituted pursuant to the entire range of the Sherman and Clayton Act provisions, 15 U.S.C. §§ 1-27. However, the theory pursued at trial was limited to § 1 of the Sherman Act, the contention of the plaintiff being that the defendants were guilty of a combination and conspiracy in restraint of trade.

The defendants-appellees are franchised new car dealers who operate in the same area, Enid, Oklahoma, as does the plaintiff. The latter is a licensed used car dealer; he does not have a franchise from any manufacturer authorizing him to sell new or unused cars. There is substantial evidence to show that the defendants sought by various means to injure the plaintiff in his efforts to furnish new cars to buyers, an activity which he describes as a car buying service involving the obtaining of particular types of cars on order by customers. Ordinarily, plaintiff attempted to have these vehicles transferred directly from the dealers from whom obtained (most of whom were located outside Enid) to the purchaser. The jury returned a verdict in the amount of $1,500.00 plus attorneys' fees in the amount of $3,000.00. The $1,500.00 amount was trebled, but this $4,500.00 was offset by a pretrial settlement in the amount of $5,000.00 with two of the alleged co-conspirators, the Public Broadcasting Company, Inc. and its President.

I.

Various questions are before us on appeal, but the central issues involve, first, concerted activities of the defendants petitioning state officials to enjoin plaintiff pursuant to an Oklahoma Statute, 47 O.S. §§ 561-575, which regulates the distribution and sale of new or unused motor vehicles within the state. Section 564 of this statute requires the obtaining of a license in order to be a new car motor vehicle dealer or salesman. There are criminal and civil sanctions for its violation; our concern here is § 567 which provides that the Oklahoma Motor Vehicle Commission created by the law may bring injunctive action to enforce the provisions of the Act.

The defendants unquestionably acted in concert to persuade the Commission to file an injunction suit in the Oklahoma State Court. The permanent injunction which was obtained was ultimately affirmed by the Supreme Court of Oklahoma.

Plaintiff maintains that the concerted activity of the defendants in inducing the State to impose sanctions against the plaintiff produced economic injury for which he is entitled to compensation. The trial court disagreed.

A related issue pertains to concerted efforts on the part of the defendants to injure the plaintiff in his business by activities other than petitioning the Commission or going to court and, particularly, whether he can recover for injuries inflicted as a result of such conspiracy or conspiracies prior to his having been enjoined by the Oklahoma State Court from dealing in new or unused cars. The trial court held that the presence of the statute in and of itself precluded recovery quite apart from its terms having been invoked by the defendants.¹ The jury was told that plaintiff could not recover for alleged damages arising from loss of sales of new or unused vehicles either before the injunction or after it was entered.²

Review of other rulings of the trial is requested.

A. The court determined that the Ford Motor Company was entitled to summary judgment.

B. The court informed the jury that any verdict returned by and in favor of the plaintiff would be trebled by the court.

C. The court, 320 F.Supp. 445, held that the $5,000.00 settlement was subject to being offset against any sum recovered by plaintiff, notwithstanding that the offset was not pleaded.

D. The award of $3,000.00 in attorneys' fees is said to be inadequate.

II.

The plaintiff has been in the automobile selling business in Enid, Oklahoma for approximately 25 years. As noted, he has a used car dealers license and at one time (in 1959) had a new car dealers license, for he then had a Rambler franchise; in 1963 this dealership was terminated and since that time he has not had a new car dealers license. In 1964 he started to do business as his so-called car buying service. His contention is that he acts as an agent for individuals wishing to purchase automobiles and searches through dealerships in areas removed from Enid until he locates an automobile which satisfies the specifications of the customer. He purchases the car, preferably in the name of the ultimate customer, but sometimes in his own name, following which he transfers the vehicle to the customer. This service undoubtedly results in savings to the customer. He is compensated in the form of money or a used car trade-in by the customer for the service rendered. Defendants take the position that he is plainly engaged as a new car dealer operating without either a dealers or salesmans license.

Plaintiff contends that the primary conspirators are the members of the Enid Automobile Dealers Association, which organization persuaded the executive director of the Oklahoma State Motor Vehicle Commission to bring an injunction suit restraining plaintiff from selling new cars without a license. The injunction was entered on December 18, 1967. The judgment was affirmed by the Oklahoma Supreme Court on January 27, 1970.

In addition to the program of the defendants to get relief under Oklahoma law, there was evidence showing that the defendants induced local news media to refuse to accept advertising from the plaintiff and that such advertising was refused as a result of these efforts by the Enid Publishing Company and radio stations. Other activities relied on by the defendants included refusal to provide warranty service on automobiles which had been purchased through the plaintiff and a refusal to sell parts to plaintiff so that the vehicles sold could be serviced.

As noted before, the trial court ruled and instructed the jury that the State of Oklahoma had a right to regulate the automobile business in the manner provided in the statute in question. The court also instructed the jury that since a private citizen may seek the enforcement of state laws through proper channels, concerted activity on the part of a group of this nature is not in violation of the Sherman Act. The court did instruct the jury that while a newspaper could refuse advertising, there was an exception which prohibited such refusal or rejection as a part of a combination and conspiracy contrary to the antitrust laws of the United States, in which case the newspaper or radio station could be found to have violated the antitrust laws. The court also held and further instructed the jury that the defendants could refuse to deal with anyone and, further, that a dealer could charge any amounts it wished if it performed services.³

In charging the jury as to allowable damages, the court's instruction that plaintiff was precluded from recovering damages during the period that he did not have a license and also based on the action of the defendants in obtaining an injunction in the District Court of Garfield County, Oklahoma, effectively ruled out virtually every source of damage and here, as we view it, the jury verdict was simply a nominal award which was not based on any substantial demonstrated loss.

III. INVOKING STATE PROCESS

The trial court was correct in holding that the defendants in invoking state action acted validly and in accordance with the ruling of the Supreme Court in Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943) and in accordance also with the later Supreme Court decisions in Eastern Railroad Presidents Conference v. Noerr Motor Freight, 365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961); United Mine Workers of America v. Pennington, 381 U.S. 657, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965); and California Motor Transport Company v. Trucking Unlimited, 404 U.S. 508, 92 S.Ct. 609, 30 L.Ed.2d 642 (1972).

In Parker a California statute authorized the establishing through action of state officials of programs for the marketing of agricultural commodities produced in the state in such a way as to restrict competition among the growers and to...