Simpson v. Union Oil Company of California

Decision Date12 June 1969
Docket NumberNo. 22148.,22148.
Citation411 F.2d 897
PartiesRichard S. SIMPSON, Appellant, v. UNION OIL COMPANY OF CALIFORNIA, Appellee.
CourtU.S. Court of Appeals — Ninth Circuit

Maxwell Keith (argued) and James J. Duryea, San Francisco, Cal., for appellant.

Moses Lasky (argued) and Richard Haas of Brobeck, Phleger & Harrison, San Francisco, Cal., Douglas C. Gregg, E. A. McFadden, Los Angeles, Cal., for appellee.

Before JERTBERG, DUNIWAY and CARTER, Circuit Judges.

JAMES M. CARTER, Circuit Judge.

This case has been here before. It is an action for damages under the anti-trust laws. On the first occasion the motion of Union Oil Company (hereafter Union) for summary judgment was granted. (1961 Trade Cas. Par. 69,936, p. 77,693). We affirmed. Simpson v. Union Oil Company of California, 9 Cir., 311 F.2d 764 (1963). Certiorari was granted and the Supreme Court reversed 5-3, and remanded for further proceedings. Simpson v. Union Oil Company of California, 377 U.S. 13, 84 S.Ct. 1051, 12 L.Ed.2d 98 (1964); rehear.den. 377 U.S. 949, 84 S.Ct. 1349, 12 L.Ed.2d 313.

The case involved union's consignment of gasoline to service stations as a method of price maintenance. Since most of the problems resulting from the remand arise from language in the Supreme Court decision, supra, we quote pertinent parts:

"Hence on the issue of resale price maintenance under the Sherman Act there is nothing left to try, for there was an agreement for resale price maintenance, coercively employed.
The case must be remanded for a hearing on all the other issues of the case, including those raised under the McGuire Act, 66 Stat. 631, 15 U.S.C. 45, and the damages, if any, suffered. We intimate no views on any other issue; * * *. We reserve the question whether, when all the facts are known, there may be any equities that would warrant only prospective application in damage suits of the rule governing price fixing by the `consignment\' device we announce today." 377 U.S. at 24-25, 84 S.Ct. at 1059.

After remand and following a pretrial order of June 20, 1966, in the district court, appellant sought in the Supreme Court, a writ of prohibition or alternately a writ of mandamus, to preclude Union from asserting any "equities" which warrant prospective application of the Simpson decision, 377 U.S. 13, 84 S.Ct. 1051, 12 L.Ed.2d 98, supra, in any other court than the Supreme Court.

In the pretrial order above, the district court foreclosed the issues of whether Union had "attempted to monopolize" the wholesaling and retailing of gasoline in violation of Sec. 2 of the Sherman Act, and whether Union had unlawfully tied the sale of petroleum products to its leases in violation of Sec. 1 of the Sherman Act or entered into exclusive dealing contracts with its dealers. Accordingly, appellant also sought a writ in the Supreme Court, compelling the district court to try the aforesaid excluded issues. The applications for both writs were denied. Simpson v. United States District Court, 385 U.S. 806, 87 S.Ct. 188, 17 L.Ed.2d 121 (1966).

The case went to trial before a jury during January and February 1967 and resulted in a verdict for appellant against Union for $160,000. The trial court had reserved the "equities" issue for court decision. Union filed a motion for judgment N.O.V. and a motion for new trial. Appellant filed a motion to enter judgment upon the verdict. The trial court decided the "equities" issue in favor of Union; denied appellant's motion for judgment on the verdict; denied Union's motion for judgment N.O. V., but granted Union's motion for a new trial.

The trial court made findings of fact and conclusions of law on the "equities" issue, reported in Simpson v. Union Oil Company of California, 270 F.Supp. 754 (N.D.Cal.1967). By Finding 14 it found

"On all the facts as they now have been made known by the trial of this case, it would be unfair and inequitable to apply to this damage action, wherein the operative facts all arose in the years 1956-1958, the rule respecting price-fixing by the consignment device announced on April 20, 1964 in Simpson v. Union Oil Company of California, 377 U.S. 13 84 S. Ct. 1051, 12 L.Ed.2d 98."

Its Conclusions 2 and 3 read

"2. The belief of defendant prior to April 20, 1964 that the Retail Dealer Consignment Agreements between itself and retail gasoline dealers and the actions taken by it pursuant thereto were entirely lawful under the anti-trust laws was reasonable and warranted by United States v. General Electric Company, 272 U.S. 476 47 S.Ct. 192, 71 L.Ed. 362 and other authorities."
"3. The equities warrant only prospective application to damage suits of the rule respecting price fixing by the consignment device announced on April 20, 1964 in Simpson v. Union Oil Company of California, 377 U.S. 13, 84 S.Ct. 1051, 12 L.Ed.2d 362 and, particularly, do not warrant application of said rule to this case."

The court then entered its written Orders and Judgment. By the judgment

"plaintiff\'s action herein against defendant is dismissed with prejudice."1 Its order with respect to a new trial was that "defendant\'s motion to set aside the verdict on said issues the issues submitted to the jury and to grant a new trial thereon should a further trial be necessary is hereby Granted."

In substance, the trial court denied appellant a judgment on the verdict because of its findings and conclusions on the "equities" issues; but hedging against possible reversal on this portion of the case, set aside the verdict and granted a new trial.

The Questions Presented

1. Should the Simpson decision (377 U.S. 13, 84 S.Ct. 1051, 12 L.Ed.2d 362) be applied only prospectively and not to this case?

2. If the dismissal of the action was error, was there also error in granting a new trial?

Other questions have been abandoned.2

I. SHOULD THE SIMPSON DECISION HAVE ONLY PROSPECTIVE APPLICATION?

(1) Constitutional objections.

We treat at the outset contentions by appellant purportedly raising constitutional questions. Appellant claims that the trial court ruling that the "equities" are in favor of and compel a prospective application of the Supreme Court decision in Simpson, runs afoul of constitutional provisions. Appellant argues "courts are without power under the United States Constitution, requiring the separation of powers between legislature and the courts to take away or render nugatory a federally created right to obtain damages for an injury from a defendant's violation of the Sherman Act;" that to deny appellant relief is to deny him due process of law; and that setting aside of the verdict and the granting of judgment to Union denied appellant due process of law.

A short answer is that no constitutional questions were raised or argued in the court below and therefore cannot be presented and need not be considered here. Williamson v. Weyerhaeuser Timber Co., 221 F.2d 5, 14 (9 Cir. 1955).

It appears appellant is contending that every decision must operate retrospectively. This is based on an old archaic concept, now generally rejected. That concept is that the law has always been fixed and unchangeable and that where a court finds past interpretations are incorrect and proceeds to make a declaration of the law different from the past, the new rule applies to past events.

Judge Cardozo was one of the first to characterize the concept as unrealistic. See the discussion in United States ex rel. Angelet v. Fay, 333 F.2d 12, 15-16 (2 Cir. 1964) affirmed sub nom. Angelet v. Fay, 381 U.S. 654, 85 S.Ct. 1750, 14 L.Ed.2d 623 (1965). The Supreme Court has recently said in Linkletter v. Walker, 381 U.S. 618, 629, 85 S.Ct. 1731, 1737, 14 L.Ed.2d 601 (1965) "the Constitution neither prohibits nor requires retrospective effect." Great Northern Railway Co. v. Sunburst Oil & Refining Co., 287 U.S. 358, 53 S.Ct. 145, 77 L.Ed. 360 (1932) was an early case where a lower court refused to make its decision retrospective and Justice Cardozo, writing for the Supreme Court, rejected constitutional contentions. (p. 364, 53 S.Ct. 145).

As to the contention that appellant had been deprived of a jury trial, the short answer is the record below. This constitutional claim was not raised below and cannot be considered here, Williamson v. Weyerhaeuser, supra; Cox v. City of Freeman, 321 F.2d 887, 891 (8 Cir. 1963).

Likewise a court may set aside a verdict without constitutional encroachment. Neither the granting of the new trial nor the judgment as non-retroactive impinged on the constitutional provisions relied on by appellant.

(2) The Trial Court Properly Considered and Ruled on the Equities Issue.

The issue of the "equities" was properly before the trial court on remand. The Supreme Court said, "* * * when all the facts are known, there may be any equities that would warrant only prospective application * * * of the rule * * * we announce today." Obviously, the court was speaking of the facts of this case. There is no indication or reason to believe they were speaking only of facts of other damage suits as they might arise in the future. The 5th Circuit in Guidry v. Continental Oil Company, 350 F.2d 342, 344 (1965) stated that the reservation in Simpson "seemingly refers to the inequity to subjecting the Union Oil Company to a triple damage action for conduct that was apparently legal until the narrowing of United States v. General Elec. Co., 1926, 272 U.S. 476, 47 S. Ct. 192, 71 L.Ed. 362."

It is traditionally the function of the trial court to find the facts. The Supreme Court is ill equipped to carry out the fact finding process3 and it would be absurd to read the Supreme Court's language to mean that the Supreme Court would take evidence and find the facts as to whether "equities" existed.

The trial court properly took evidence, and made findings of facts and conclusions of law as to whether there existed "equities that would warrant only prospective application * * *" of the rule the Court...

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