White Industries, Inc. v. Cessna Aircraft Co., 87-1672

• Citation: 845 F.2d 1497
• Decision Date: 06 May 1988
• Docket Number: No. 87-1672,87-1672
• Parties: , 1988-1 Trade Cases 67,992 WHITE INDUSTRIES, INC.; Eugene C. Ingram, d/b/a Carthage Airways; and Carthage Airways, Inc., Appellants, v. The CESSNA AIRCRAFT CO.; Mil Walston; Walston Aviation Sales, Inc.; Southaire, Inc.; Dad, Inc.; Skyliners Dist. Inc.; Harold Gorrell; Aviation Activities, Inc.; and Cessna Finance Corp., Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

Page 1497

845 F.2d 1497

56 USLW 2691, 1988-1 Trade Cases 67,992

WHITE INDUSTRIES, INC.; Eugene C. Ingram, d/b/a Carthage

Airways; and Carthage Airways, Inc., Appellants, v. The CESSNA AIRCRAFT CO.; Mil Walston; Walston Aviation

Sales, Inc.; Southaire, Inc.; Dad, Inc.; Skyliners Dist.

Inc.; Harold Gorrell; Aviation Activities, Inc.; and

Cessna Finance Corp., Appellees.

No. 87-1672.

United States Court of Appeals,

Eighth Circuit.

Submitted Jan. 13, 1988.

Decided May 6, 1988.

Edward McConwell, Overland Park, Kan., for appellants.

Thomas E. Deacy, Jr., Kansas City, Mo., for appellees.

Before LAY, Chief Judge, and McMILLIAN and ARNOLD, Circuit Judges.

ARNOLD, Circuit Judge.

White Industries, an authorized dealer of Cessna aircraft, brings this lawsuit against the Cessna Aircraft Company for price discrimination under Secs. 2(a) and 2(f) of the Robinson-Patman Act, 15 U.S.C. Secs. 13(a) and 13(f). White's suit also alleges a combination and conspiracy to violate Sec. 1 of the Sherman Act, 15 U.S.C. Sec. 1, but, as we discuss below, the Sherman Act claim is really only a variation on White's central price-discrimination theory.

This case started seventeen years ago, in 1971, when the Cessna Finance Corporation sued the White dealership over some notes it claimed were due on two aircraft White had purchased. ¹ White responded with a class action brought on bebalf of Cessna dealers operating from 1968 to 1974, pressing the Robinson-Patman claim now before us. After a decade of discovery and pretrial litigation, the case was tried to the District Court ² without a jury in 1984. After the close of the evidence on the issue of liability, the Court granted Cessna's motion for involuntary dismissal of White's suit and decertified the plaintiff class. White Industries, Inc. v. Cessna Aircraft Co. 657 F.Supp. 687 (W.D.Mo.1986). White now brings this appeal from the judgment, ³ and we affirm.

I.

From 1968 to 1974, Cessna distributed the airplanes it manufactures through two different channels. It sold about half its output to Cessna distributors, who performed a wholesaler's function by selling to contracted dealer-buyers who would in turn sell to the final consumers. Cessna sold its planes to its distributors at a 25-26% discount. Cessna also developed a second channel of distribution by organizing a number of "zone dealers," like White, to whom Cessna sold planes directly. The function of these zone dealers was parallel to that of the retail dealers who bought their planes through Cessna distributors, in that zone dealers sold their planes to end-users. Cessna sold planes to zone dealers like White at a discount of 20%.

Reduced to its simplest terms, the central theory of this lawsuit is that some or all Cessna distributors abused their wholesalers' discount by competing directly with dealers like White. According to White, these distributors sold aircraft directly to end-users, and the cost advantage the distributors enjoyed enabled them to injure competition by squeezing the zone dealers out of the market. If true, this allegation would establish that Cessna violated Sec. 2(a) of the Robinson-Patman Act by discriminating in price between distributors and dealers, where the purchasers both sold the commodities in the same geographic market and on the same functional level.

After hearing from twenty witnesses at trial plus fourteen others by deposition, and after working through over a thousand plaintiffs' exhibits, the District Court found that White had failed to demonstrate any actual injury which would justify a damage remedy under the Act. In capsule form, the Court's analysis proceeded as follows.

1. Distributors competed with dealers only when they sold directly to end-users, and White presented only twenty-nine instances of such sales during the period in question. 657 F.Supp. at 703-07, 717-18.

2. White generally failed to present evidence of collusion between commonly owned distributors and "captive" dealerships sufficient to justify attributing sales made by distributor-owned dealerships to the distributors themselves. 657 F.Supp. at 707-08.

3. An analysis of White's sales of aircraft establishes a geographic market area of 150 miles for White's sale of single-engine Cessnas, and a nationwide market for the multi-engine 402A models. After comparing White's market overlap with offending distributors, the court concluded that none of the distributors sales of single-engine planes occurred in geographic competition with White. 657 F.Supp. at 708-11.

4. White failed to prove by a preponderance of the evidence that any sales were actually diverted from White as a result of the remaining 14 proven distributor sales to end users. 657 F.Supp. at 712-15. As a result, the District Court entered judgment for Cessna.

On appeal, White claims that the trial court's order fails to state factual conclusions and legal findings and conclusions in enough detail to meet the standards of Fed.R.Civ.P. 52(a). At first blush, this ground of appeal seems astonishing when urged against an opinion filling 31 pages in the Federal Supplement. On closer examination, it appears that White's objections to the formal sufficiency of the trial court's findings are really arguments that the trial court misapplied the law and committed clear error in finding fact.

II.

We discuss the appellant's objections following the structure of the trial court's analysis.

A. Functional Competition

White argues that the District Court's order ignores many specific examples of distributor-dealer competition presented in its narrative statement of fact, examples which White proceeds to list. White therefore concludes that the Court's order is insufficient under the standards of Rule 52(a).

Trial courts must indeed state legal and factual conclusions sufficient to give an appellate court a clear understanding of the grounds of its decision. See Allied Van Lines, Inc. v. Small Business Administration, 667 F.2d 751, 753 (8th Cir.1982). This the trial court did with a remarkable degree of clarity. What Rule 52(a) does not require is a particularized finding on each piece of evidence presented by the parties. If it did, it would be impossible to adjudicate cases as complex as this one. According to White, the plaintiff's narrative statement of fact included over 8,000 separate statements occupying over 900 written pages; no rational system of civil procedure would compel a trial judge to issue 900-page opinions making 8,000 findings of fact. It is sufficient that the District Court state its decision so that the parties and reviewing court understand what it has decided and why.

A review of the evidence of distributor-dealer competition that White proffers on appeal confirms that White and the District Court are proceeding on very different legal approaches to the concept of functional competition under Sec. 2(a). White argues that any distributor sale to an entity "which is not an authorized Cessna dealer" constitutes a sale in competition with zone dealers like White. Under the District Court's analysis, distributor sales to independent unauthorized dealers occurred at the distributor's proper functional level, and so such sales were not treated as competitive with dealers, whose function was to sell to end-users.

We agree with the District Court's analysis. Nothing in the Robinson-Patman Act compels a manufacturer like Cessna to impose a vertical restraint on its wholesalers' sales to limit them to "authorized" or contracted dealers. See 5 Von Kalinowski, Antitrust Laws and Trade Regulations, Sec. 30.02[a] (1988). Dealers like White who desire to compete in selling to other dealers will of course suffer a cost disadvantage compared with distributors, but to hold that the larger distributors' discount violates Sec. 2(a) in this circumstance would effectively abolish two-channel distribution systems in all industries. ⁴ White cites no authority for this extraordinary interpretation of the Act, nor can we find any.

White also presses a miscellany of other evidence which tends to show distributor-dealer competition, including Cessna's use of the word "retail" to describe certain kinds of distributor sales, as well as instances of sales "passed through" subsidiary dealerships by distributors. On review, we presume that the District Court weighed the evidence before it; our review of the Court's factual findings is limited to the question of whether the trial court committed clear error. We cannot say that appellant White has presented evidence sufficient to reverse the trial judge's findings. We affirm the Court's finding that the plaintiff's proof of distributor sales to end-users extends only to the twenty-nine sales listed in the appendix to the Court's order. 657 F.Supp. at 717-18.

B. "Captive" Dealerships

The second ground of White's claim of insufficient findings involves the Court's rejection of White's theory that commonly owned dealerships and distributors functioned as the same economic entity.

We have little trouble settling this ground of appeal in the terms that White presents it. There is no question that the District Court clearly laid out its finding--that, with one exception, ⁵ there was no proof that any Cessna distributor passed on the benefit of its higher discount to its subsidiary dealers. 657 F.Supp. at 707. Furthermore, the District Court left no ambiguities in its legal approach to White's arguments for disregarding the dealerships' separate corporate status or its factual findings on White's evidence. Accordingly, we see no merit in White's claim on appeal that the trial court's order violated Rule 52(a).

Again, it seems that White's appeal on this issue is really a disguised challenge to the District Court's findings of fact. A review of the evidence which White claims the Court overlooked fails to convince us that the Court's findings were clearly erroneous. White refers to several items of proof which it claims...