Southern Concrete Co. v. United States Steel Corp.

Decision Date31 March 1975
Docket NumberCiv. A. No. 15378.
PartiesSOUTHERN CONCRETE COMPANY v. UNITED STATES STEEL CORPORATION, Individually and through its Universal Atlas Cement Company Division, et al.
CourtU.S. District Court — Northern District of Georgia

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COPYRIGHT MATERIAL OMITTED

Wilkinson, Nance & Wittner, Skinner, Wilson, Beals & Strickland, Atlanta, Ga., John H. Boone, San Francisco, Cal., for plaintiff.

Mitchell, Pate & Anderson, King & Spalding, Jones, Bird & Howell, Atlanta, Ga., Worsham, Forsythe & Sampels, Dallas, Tex., Covington & Burling, Washington, D. C., for defendants.

ORDER

RICHARD C. FREEMAN, District Judge.

This private antitrust action was instituted by plaintiff Southern Concrete Company (hereinafter "Southern"), a now-defunct subsidiary of Southern Products Company. From the late 1950's until October, 1969, plaintiff was engaged in the production and sale of ready-mixed concrete in the Atlanta area. The action is brought against United States Steel Corporation (hereinafter "U.S.S.") which, through its Universal Atlas Cement Division (hereinafter "U.A.C."), is a major supplier of portland cement, one of the ingredients of ready-mixed concrete, and against Williams Brothers Concrete, Inc. (hereinafter "Williams Brothers"), a producer of ready-mixed concrete in the Atlanta area.1 The action has been submitted to the court on the motion of U.S.S. for partial summary judgment; on its motion to strike the affidavit of Walter B. Dobbins, which affidavit was submitted with the brief in opposition to the motion for partial summary judgment; and on U.S.S.'s second motion for partial summary judgment. In this order the court will rule on U.S.S.'s first motion for partial summary judgment and on its motion to strike. An order on the second motion for partial summary judgment will be issued forthwith.

I. MOTION FOR PARTIAL SUMMARY JUDGMENT

U.S.S. seeks summary judgment as to the following issues for the reasons indicated: (1) Southern lacks standing under the provisions of § 4 of the Clayton Act, 15 U.S.C. § 15, to assert the claim that U.S.S. has violated § 1 of the Sherman Act, 15 U.S.C. § 1, by engaging in an illegal tying arrangement where the granting of a loan guarantee (the alleged tying product) to Williams Brothers was conditioned upon Williams Brothers' agreement to purchase cement (the alleged tied product) from U.A.C.; (2) Southern lacks standing under § 4 of the Clayton Act to assert the claim that U.S.S. and Williams Brothers have violated § 1 of the Sherman Act by engaging in reciprocal dealings wherein U.S.S. agreed to supply a loan guarantee to Williams Brothers if the latter would agree to purchase cement from U.A.C.; (3) Southern lacks standing under § 4 of the Clayton Act to assert the claim that U.S.S. violated § 3 of the Clayton Act, 15 U.S.C. § 14, by selling cement to Williams Brothers on the condition that Williams Brothers not use or deal in the cement of any other cement producer; (4) Southern lacks standing under the provisions of § 4 of the Clayton Act to assert the claim that U.S.S. and Williams Brothers have violated § 1 of the Sherman Act by engaging in reciprocal dealings wherein Williams Brothers agreed to provide storage facilities to U.S.S. if U.S.S. would agree to provide the services of one Roy Millhouse to Williams Brothers; (5) Southern cannot assert the claims that U.S.S. has violated § 2 of the Sherman Act, 15 U.S.C. § 2, by engaging in a "conspiracy to attempt to monopolize" the production and sale of both cement and ready-mixed concrete in any geographic market for the reason that such does not assert a violation of any law; (6) U.S.S. has not violated § 7 of the Clayton Act, 15 U.S.C. § 18, by acquiring the stock or assets of Williams Brothers since it is undisputed that U.S.S. has never acquired any stock or assets of Williams; (7) U.S.S. has made no discriminatory sales to Williams in violation of § 2 of the Clayton Act, as amended by the Robinson-Patman Act, 15 U.S.C. § 13(a), since Southern has at no relevant time purchased cement from U.S.S.; and, (8) U.S.S. cannot have violated § 2 of the Sherman Act by (a) monopolizing and (b) attempting to monopolize the production and sale of ready-mixed concrete for the reason that it would be impossible as a matter of law for U.S.S. to be found to have attempted to monopolize or to have monopolized a product which it neither manufactures nor sells. In compliance with Local Court R. 91.1 and 91.72, U.S. S. has filed a brief in support of its motion and a separate short statement of the material facts as to which it contends there is no genuine issue to be tried. It has also attached to the motion two affidavits in support thereof.

In response plaintiff has filed a lengthy brief in opposition to the granting of any portion of the motion for partial summary judgment. This brief includes a counterstatement of facts necessary to determine the issues presented by the motion. The affidavit of Walter B. Dobbins was filed several days later "for use as evidence" in opposition to U.S.S.'s motion for partial summary judgment.

Included in plaintiff's brief in opposition to the partial summary judgment motion is an extensive dissertation on the "judicial standards governing seriatim summary dispositions sought by the instant motion." It has cited extensive case law for the following propositions: (1) summary judgment is to be very carefully employed when a jury trial has been requested; (2) the court must construe all allegations in the light most favorable to the opposing party, (3) summary judgment should not be granted if there are conflicting inferences from the uncontested facts, (4) on a motion for summary judgment the court can only decide if there are issues to be decided, and (5) the moving party must shoulder the burden to establish the absence of genuine material facts. The court agrees with these propositions2 and is aware of the requirements of Rule 56, the heavy burden on the movant, and the importance of a jury trial. However, the court also agrees with the assertion of U.S.S. that summary judgment can be appropriate as to claims under the antitrust laws, and that the burden imposed on the moving party by Rule 56(e)3 applies to parties seeking relief under the antitrust laws as well as any other civil action. First Nat'l Bank v. Cities Service Co., 391 U.S. 253, 290, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968). See also Searer v. West Michigan Telecasters, Inc., 381 F.Supp. 634 (W.D.Mich.1974).

A. Claims as to Illegal Tying Arrangements, Reciprocal Dealings, and Exclusive Dealings between Defendants U.S.S. and Williams Brothers

U.S.S. contends that Southern cannot assert a claim for damages on account of tying arrangements, reciprocal dealings or exclusive dealing arrangements between U.S.S. and Williams Brothers pursuant to § 4 of the Clayton Act because it is not within the limited class of persons who could raise such a claim. U.S.S. contends that the only persons who could raise such a claim are the competitors of U.S.S./U.A.C. and the customers of U.S.S./U.A.C. which are subject to the alleged restraint. It contends that there is no dispute that U.S.S., through U.A.C., is a producer and supplier of cement and has sold, and does sell, cement to Williams Brothers; that U.A.C. has never produced or sold ready-mixed concrete in competition with Southern; that Southern has never manufactured or sold cement in competition with U.A.C.; and that Southern has not purchased cement from U.A.C. within the period of limitations. See U.S.S.'s Statement of Material Facts, No. 1, 3, 4, 5, 10. U.S.S. further contends that plaintiff could not have been "injured in his business or property by reason of" these alleged violations within the meaning of § 4 of the Clayton Act. It sets forth the main tests or standards used by the various Courts of Appeals to determine whether a particular action or claim may be asserted under § 4 and asserts that Southern cannot pursue these claims against U.S.S. under these tests.

Southern contends that whether or not the tying, exclusive dealing and reciprocal dealing arrangements of defendants "were a substantial factor in causing damages" claimed by plaintiff is a question of fact and, thus, not susceptible to summary disposition. It argues that § 4 of the Clayton Act is to be given a liberal construction and that it is within the "zone of protected interests"4 contemplated by that section. It defines the interests which it seeks to protect as follows:

its rights to purchase gray Portland cement and other ready-mixed concrete ingredients, along with the services incidental to the purchase of these goods; and thereby to produce and sell ready-mixed concrete in a market unaffected by unlawful restraints.

Plaintiff argues, that in Terrell v. Household Goods Carriers' Bureau, 494 F.2d 16, 20 (5th Cir. 1974) (hereinafter "Terrell III"), the Fifth Circuit Court of Appeals expanded the class of protected private plaintiffs by holding that a private right of action under § 4 of the Clayton Act should be recognized when the plaintiff makes a mere showing that defendants' alleged violation of the antitrust laws had "materially contributed" to plaintiff's injuries. Plaintiff further contends that it is within the sector of the economy threatened by defendant's practices, which area he seeks to define as the production and sale of ready-mixed concrete in the Atlanta Metropolitan market area.

Section 4 of the Clayton Act authorizes a private plaintiff to sue for injuries sustained as a consequence of an antitrust violation, Battle v. Liberty Nat'l Life Ins. Co., 493 F.2d 39, 48 (5th Cir. 1974). This section provides:

Any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor in any district court of the United States in the district in which the defendant resides or is found or has an agent,
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