United Farmers Agents v. Farmers Ins. Exchange

• Decision Date: 21 April 1995
• Docket Number: A-92-CA-374.,No. A-92-CA-373,A-92-CA-373
• Citation: United Farmers Agents v. Farmers Ins. Exchange, 892 F.Supp. 890 (W.D. Tex. 1995)
• Parties: UNITED FARMERS AGENTS ASSOCIATION, INC. v. FARMERS INSURANCE EXCHANGE, et al. Thomas J. VINSON, et al. v. FARMERS INSURANCE EXCHANGE, et al.
• Court: U.S. District Court — Western District of Texas

892 F. Supp. 890

UNITED FARMERS AGENTS ASSOCIATION, INC. v. FARMERS INSURANCE EXCHANGE, et al.

Thomas J. VINSON, et al. v. FARMERS INSURANCE EXCHANGE, et al.

Nos. A-92-CA-373, A-92-CA-374.

United States District Court, W.D. Texas, Austin Division.

April 21, 1995.

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Bogdan Rentea, Rentea & Assoc., Austin, TX, for United Farmers Agents Ass'n Inc., Thomas J. Vinson, Robert D. Moon.

James W. Cannon, Jr., Eric W. Pinker, Akin, Gump, Strauss, Hauer & Feld, Austin, TX, Richard C. Levin, Akin, Gump, Strauss, Hauer & Feld, Dallas, TX, David E. Dunham, Taylor & Dunham, Austin, TX, Don T. Hibner, Pierce T. Selwood, Dani Young Merryman, Sheppard, Mullin, Richter & Hampton, Los Angeles, CA, for Farmers Ins. Exchange, Fire Ins. Exchange, Truck Ins. Exchange, Mid-Century Ins. Co., Farmer's New World Life Ins. Co.

ORDER ON REPORT AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE

BUNTON, Senior District Judge.

BEFORE THIS COURT, in the above-captioned cause of action, is the Report and Recommendation of United States Magistrate Judge Stephen H. Capelle, filed April 6, 1995. Magistrate Judge Capelle submits this Report and Recommendation pursuant to 28 U.S.C. § 636(b) and Rule 1(c) of Appendix C of the Local Court Rules of the United States District Court for the Western District of Texas, Local Rules for the Assignment of duties to United States Magistrate Judges, as amended, effective February 17, 1995.

This Report and recommendation covers four separate motions for summary judgment filed by Defendants and one motion filed by Plaintiffs. The considered motions are listed as follows: Defendant's Motion for Summary Judgment against Plaintiffs Vinson and Moon, filed November 14, 1994; Defendant's Motion for Summary Judgment against Plaintiff United Farmers Agents, filed November 14, 1994; Defendant's Motion to Dismiss as a Class Action and Deny Certification, filed November 14, 1994; Defendant's Motion for Summary Judgment against Plaintiffs Vinson and Moon on Claims Barred by the Statue of Limitations, filed November 14, 1994; and Plaintiffs Vinson and Moon's Motion to Certify a Plaintiffs Class under Fed.R.Civ.P. 23(b)(3), filed November 14, 1994.

The Report and Recommendation of Magistrate Judge Capelle shows a thorough research into the record. This report fairly and accurately analyzes and disposes of all the pertinent issues in this case. The Court is therefore of the opinion the Magistrate Judge's Report and Recommendation should be Adopted in its entirety and Defendant's Motions for Summary Judgment and to Dismiss as a Class Action and Denial of Class certification should be granted and Plaintiffs' Motion for Class Certification should be denied. Accordingly,

IT IS ORDERED the Report and Recommendation of United States Magistrate Judge Stephen H. Capelle, filed April 6, 1995, in the above-captioned cause of action, is in all matters APPROVED AND ADOPTED.

IT IS FURTHER ORDERED the above-captioned cause of action is to be DISMISSED WITH PREJUDICE.

IT IS FINALLY ORDERED the costs of the above-cause of action are to be assessed to the Plaintiffs in this matter.

REPORT AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE

CAPELLE, United States Magistrate Judge.

The Magistrate Court submits this Report and Recommendation to the District Court pursuant to 28 U.S.C. § 636(b) and Rule 1(c) of Appendix C of the Local Court Rules of the United States District Court for the Western District of Texas, Local Rules for the Assignment of Duties to United States Magistrates Judges, as amended, effective February 17, 1995.

This Report and Recommendation covers four (4) separate motions for summary judgment filed by Defendants and one motion filed by Plaintiffs.

The following documents were considered by the Court:

1. Documents related to Defendants' request for summary judgment against Vinson and Moon:

Defendants' Motion for Summary Judgment against Plaintiffs Vinson and Moon filed November 14, 1994 (Doc. # 204); Defendants' Memorandum of Law in Support of Summary Judgment against Plaintiffs Vinson and Moon filed November 14, 1994 (Doc. # 205); Defendants' Exhibits filed November 14, 1994 (Docs. # 212-213); Plaintiffs Vinson and Moon's Response to Defendants' Motion for Summary Judgment filed December 1, 1994 (Doc. # 225); and Defendants' Reply to Plaintiffs Vinson and Moon's Response filed December 16, 1994.

2. Documents related to Defendants' request for summary judgment against United Farmers Agents Association, Inc.:

Defendants' Motion for Summary Judgment against Plaintiff United Farmers Agents filed November 14, 1994 (Doc. # 210); Defendants' Memorandum in Support of Summary Judgment against Plaintiff United Farmers Agents filed November 14, 1994 (Doc. # 211); Defendants' Exhibits filed November 14, 1994 (Docs. # 212-213); Plaintiffs' Response to Defendants' Motion for Summary Judgment filed December 1, 1994; and Defendants' Supplemental Memorandum in Support of Summary Judgment filed January 6, 1994 (Doc. # 236).

3. Documents related to Defendants' request for dismissal of class certification under Fed.R.Civ.P. 23(b)(2):

Motion by Defendants to Dismiss as a Class Action and Deny Certification filed November 14, 1994 (Doc. # 206), Memorandum in Support of Motion by Defendants to Dismiss as a Class Action and to Deny Certification filed November 14, 1994 (Doc. # 207); Defendants' Exhibits filed November 14, 1994 (Docs. # 212-213); Plaintiffs' Response to Defendants' Motion to Dismiss as a Class Action and Deny Certification filed December 1, 1994 (Doc. # 226); and Defendants' Reply to Plaintiffs' Response filed December 16, 1994 (Doc. # 233).

4. Documents related to Plaintiffs' request for class certification under Fed.R.Civ.P. 23(b)(3):

Motion by Plaintiffs Vinson and Moon to Certify a Plaintiffs Class under Fed. R.Civ.P. 23(b)(3) filed November 14, 1994 (Doc. # 203) and Defendants' Response to Plaintiffs Vinson and Moon's Motion to Certify a Plaintiffs Class filed November 28, 1994 (Doc. # 224).

5. Documents related to Defendants' request for partial summary judgment against Vinson and Moon based on the statute of limitations:

Defendants' Motion for Summary Judgment against Plaintiffs Vinson and Moon on Claims Barred by the Statute of Limitations filed November 14, 1994 (Doc. # 208); Defendants' Memorandum of Law in Support of Summary Judgment against Plaintiffs Vinson and Moon on Claims Barred by the Statute of Limitations (Doc. # 209); Defendants' Exhibits filed November 14, 1994 (Docs. # 212-213); Plaintiffs' Response filed December 1, 1995 (Doc. # 227); and Defendants' Reply to Plaintiffs Vinson and Moon's Response filed December 16, 1994 (Doc. # 232).

The Court additionally reviewed all of the exhibits proffered by the parties as well as reviewed the entire case file, including pleadings and previous orders issued by United States District Judge James R. Nowlin.

I. PLAINTIFFS' ALLEGATIONS

A. Plaintiffs Vinson and Moon.

Plaintiffs, Thomas J. Vinson and Robert D. Moon, filed a First Amended Original Complaint (Doc. # 13) on September 15, 1992, seeking to recover treble damages under section four of the Clayton Act (15 U.S.C. § 15) for the named Plaintiffs, as well as all others similarly situated, and also seeking injunctive relief under section sixteen of the Clayton Act (15 U.S.C. § 26) as a direct result of alleged violations by the Defendants (Farmers) of section one of the Sherman Act (15 U.S.C. § 1) and section three of the Clayton Act (15 U.S.C. § 14).

Thomas J. Vinson is a Farmers Insurance agent who entered into a Computer Installment Sales and Security Agreement and an Agency Network Service Agreement with Farmers. Robert D. Moon is a Farmers Insurance agent who did not enter into a Computer Installment Sales and Security Agreement nor an Agency Network Service Agreement with Farmers. The two Plaintiffs allege that they unwillingly entered into a conspiracy with Farmers and with other conspirators unnamed and with the Farmers Insurance district managers, the Farmers Insurance division agency managers, Farmers Insurance regional managers, Farmers Insurance regional agency managers, and Farmers Insurance regional sales managers and International Business Machines (IBM) to violate the Plaintiffs' rights as listed above.

Both Vinson and Moon bring class actions requesting relief for all persons similarly situated as the Plaintiffs: In Plaintiff Vinson's case, all those who entered into Computer Installment Sales and Security Agreements with Farmers Insurance and in Plaintiff Moon's case, all those who did not. Plaintiffs allege that Farmers has developed and maintains a vast amount of ratings, marketing, and policyholder information, most of which is not readily available except when an agent is online with the Farmers agency network system, which is a computer mainframe located in Los Angeles, California (¶ 19 of the Vinson and Moon First Amended Complaint).

The Plaintiffs allege that Farmers, beginning in 1981 and continuing, is restraining trade and commerce by conditioning access to the Farmers agency network systems (FANS) on the purchase directly and only from Farmers of IBM computer equipment at prices and conditions solely dictated by Farmers. They also allege that it is technically possible to obtain access to the FANS through other types of computer equipment. Plaintiffs allege that access to FANS greatly enhances the ability and efficiency of agents and therefore the profitability of agents. Plaintiffs allege coercion in the requirement to purchase the IBM computer systems and IBM service contracts to obtain access to FANS and the attempted coercion of those without computer access to obtain computer access through Farmers. Plaintiffs also allege that the conspiracy was furthered by the requirement to execute the Computer Installment Sales and Security Agreement and the requirement to execute an Agency Network...