Wilcox v. First Interstate Bank of Oregon, N.A., Nos. 85-3640

CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)
Writing for the CourtBefore SKOPIL, NELSON and BOOCHEVER; SKOPIL; BOOCHEVER
Citation815 F.2d 522
Parties, 1987-1 Trade Cases 67,530, RICO Bus.Disp.Guide 6603 Glen L. WILCOX, Lorraine Wilcox, Wilcox Development Company, Mid-Willamette Village Ore., Ltd., individually and on behalf of all others similarly situated; Michael F. Montgomery and Rosemary Montgomery; Kunkle and Stone, Inc., Plaintiffs-Appellants, v. FIRST INTERSTATE BANK OF OREGON, N.A., a national banking association and First Interstate Bancorp., Defendants-Appellees.
Decision Date03 June 1987
Docket Number85-3644,Nos. 85-3640,85-3643

Page 522

815 F.2d 522
55 USLW 2594, 1987-1 Trade Cases 67,530,
RICO Bus.Disp.Guide 6603
Glen L. WILCOX, Lorraine Wilcox, Wilcox Development Company,
Mid-Willamette Village Ore., Ltd., individually and on
behalf of all others similarly situated; Michael F.
Montgomery and Rosemary Montgomery; Kunkle and Stone, Inc.,
Plaintiffs-Appellants,
v.
FIRST INTERSTATE BANK OF OREGON, N.A., a national banking
association and First Interstate Bancorp.,
Defendants-Appellees.
Nos. 85-3640, 85-3643, 85-3644.
United States Court of Appeals,
Ninth Circuit.
Argued and Submitted Jan. 8, 1986.
Decided April 17, 1987.
As Amended June 3, 1987.

Page 523

Henry A. Carey, Leslie M. Roberts, Phil Goldsmith, and Roger G. Tilbury, Portland, Or., for plaintiffs-appellants.

James H. Clarke, Portland, Or., for defendants-appellees.

Appeal from the United States District Court for the District of Oregon.

Before SKOPIL, NELSON and BOOCHEVER, Circuit Judges.

SKOPIL, Circuit Judge:

These are actions brought by commercial borrowers against their bank, alleging violations of section 1 of the Sherman Act, 15 U.S.C. Sec. 1 (1982), and the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. Secs. 1961-68 (1982). The district court granted the bank's motions for summary judgment on the RICO claims and denied summary judgment on the antitrust claim. A jury returned verdicts in favor of the borrowers in their antitrust action. That verdict was subsequently overturned by the district court when it entered judgment notwithstanding the verdicts (JNOV). We affirm the entry of JNOV and reverse the grant of summary judgment on the RICO claims.

FACTS AND PROCEEDINGS BELOW

Plaintiffs-appellants in these three consolidated actions were commercial borrowers of First Interstate Bank of Oregon

Page 524

("FIOR"). 1 The borrowers negotiated business loans from FIOR at interest rates based on FIOR's prime rate for ninety-day commercial loans plus an "add on" depending on the risk of each loan. Thus, the interest rates on the loans were variable and fluctuated with changes in FIOR's prime rate.

Following default or full payment of the loans, the borrowers filed actions alleging that defendants-appellees 2 violated section 1 of the Sherman Act by conspiring to fix FIOR's prime rate at a uniform, non-competitive level. The borrowers claim that FIOR conspired with one or more of four First Interstate Bancorp ("Bancorp") subsidiary banks, the Bank of America, and/or the United States National Bank of Oregon. The borrowers also alleged that FIOR violated RICO by using the mail to charge and collect excessive interest based on deceptive overstatements of FIOR's true prime rate.

The cases were consolidated for trial. The district court denied class certification, denied the borrowers' motions to amend their RICO "enterprise" allegations, and thereafter granted the bank's summary judgment motion on the RICO claims. A jury returned verdicts for the borrowers on the antitrust claims. The district court awarded attorneys fees pursuant to the jury verdict, but subsequently granted defendants' motions for judgment notwithstanding the verdict and, alternatively, for a new trial.

This timely appeal followed. The borrowers challenge the district court's (1) refusal to certify a plaintiff class, Wilcox Development Co. v. First Interstate Bank, 97 F.R.D. 440 (D.Or.1983); (2) grant of summary judgment on the RICO claim, Wilcox Development Co. v. First Interstate Bank, 590 F.Supp. 445 (D.Or.1984); (3) award of attorneys fees on the Sherman Act claims as insufficient, Wilcox Development Co. v. First Interstate Bank, (D.Or. Oct. 5, 1984) (mem.); and (4) grant of the bank's motion for JNOV or, alternatively, for a new trial on the Sherman Act verdicts, Wilcox Development Co. v. First Interstate Bank, 605 F.Supp. 592 (D.Or.1985). The borrowers also seek attorneys fees on appeal pursuant to 15 U.S.C. Sec. 15 (1982) and 18 U.S.C. Sec. 1964(c).

We decide only the antitrust and RICO issues. Our disposition of those issues makes it unnecessary to reach the class certification, grant of a new trial on the antitrust claims, or the sufficiency of the attorneys fee award below. 3

DISCUSSION

A. Sherman Act.

In reviewing a district court's grant of JNOV, we apply the same standard applied by the district court. See Peterson v. Kennedy, 771 F.2d 1244, 1252 (9th Cir.1985),

Page 525

cert. denied, --- U.S. ----, 106 S.Ct. 1642, 90 L.Ed.2d 187 (1986). JNOV is proper when the evidence permits only one reasonable conclusion as to the verdict. Id. The district court's decision must be affirmed if "without accounting for the credibility of the witnesses, we find that the evidence and its inferences, considered as a whole and viewed in the light most favorable to the nonmoving party, can support only one reasonable conclusion--that the moving party is entitled to judgment notwithstanding the adverse verdict." William Inglis & Sons Baking Co. v. ITT Continental Baking Co., 668 F.2d 1014, 1026 (9th Cir.1981), cert. denied, 459 U.S. 825, 103 S.Ct. 58, 74 L.Ed.2d 61 (1982). Neither the district court nor this court is free to weigh the evidence or reach a result it finds more reasonable if the jury's verdict is supported by substantial evidence. Id.; see also Transgo, Inc. v. Ajac Transmission Parts Corp., 768 F.2d 1001, 1013-14 (9th Cir.1985) ("standard for reviewing a jury verdict is whether it is supported by substantial evidence"), cert. denied, --- U.S. ----, 106 S.Ct. 802, 88 L.Ed.2d 778 (1986).

An action under section 1 of the Sherman Act requires proof of a contract, combination, or conspiracy in restraint of trade. 15 U.S.C. Sec. 1. The essence of a section 1 claim is concerted action. Cooper v. Forsyth County Hospital Authority, Inc., 789 F.2d 278, 280 (4th Cir.1986). "The determinative question presented ... is whether appellants have proffered sufficient evidence of a conspiracy...." Id. The borrowers must present "direct or circumstantial evidence that reasonably tends to prove that the [defendants] 'had a conscious commitment to a common scheme designed to achieve an unlawful objective.' " Monsanto Co. v. Spray-Rite Service Corp., 465 U.S. 752, 764, 104 S.Ct. 1464, 1471, 79 L.Ed.2d 775 (1984) (quoting Edward J. Sweeney & Sons, Inc. v. Texaco, Inc., 637 F.2d 105, 111 (3d Cir.1980), cert. denied, 451 U.S. 911, 101 S.Ct. 1981, 68 L.Ed.2d 300 (1981)).

The borrowers allege that FIOR conspired with other banks to set a noncompetitive prime rate. Horizontal price setting is illegal per se. Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752, 768, 104 S.Ct. 2731, 2740, 81 L.Ed.2d 628 (1984). The borrowers are not required to prove that defendants entered into an express agreement to fix prices. An agreement may be inferred from circumstantial evidence of "a common design and understanding, or a meeting of minds in an unlawful arrangement...." American Tobacco Co. v. United States, 328 U.S. 781, 810, 66 S.Ct. 1125, 1139, 90 L.Ed. 1575 (1946). Nevertheless, when relying solely on circumstantial evidence, a plaintiff must present evidence from which an inference of conspiracy is more probable than an inference of independent action. First National Bank of Arizona v. Cities Service Co., 391 U.S. 253, 280, 88 S.Ct. 1575, 1588, 20 L.Ed.2d 569 (1968). The plaintiff's burden is to produce evidence 'that is capable of sustaining a rational inference of conspiracy and that tends to exclude the possibility that the defendant acted independently of the alleged co-conspirators, and thus lawfully.' T.W. Electric Service v. Pacific Electric Contractors, 809 F.2d 626, 632 (9th Cir. 1987). Thus, antitrust law limits the range of permissible inferences from ambiguous evidence. Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 1357, 89 L.Ed.2d 538 (1986). "[C]onduct as consistent with permissible competition as with illegal conspiracy does not, standing alone, support an inference of antitrust conspiracy." Id. (citing Monsanto, 465 U.S. at 764, 104 S.Ct. at 1471).

The borrowers argue that the record contains substantial evidence to support the jury's conclusion that defendants violated section 1 of the Sherman Act. They rely on circumstantial evidence. In determining whether an agreement can be inferred from circumstantial evidence, a series of "plus factors" have been considered. C-O-Two Fire Equipment Co. v. United States, 197 F.2d 489, 493 (9th Cir.), cert. denied, 344 U.S. 892, 73 S.Ct. 211, 97 L.Ed. 690 (1952). Such factors may include price parallelism, product uniformity, exchange of price information, and opportunity

Page 526

to meet to form anti-competitive policies. Id. at 493, 497. We examine the borrowers' evidence of such factors and the bank's explanations of their practices to determine if an "inference of conspiracy is reasonable in light of the competing inferences of independent action...." Matsushita, 106 S.Ct. at 1357. In our review we take special caution to give the borrowers "the full benefit of their proof without tightly compartmentalizing the various factual components and wiping the slate clean after scrutiny of each." Independent Iron Works, Inc. v. United States Steel Corp., 322 F.2d 656, 661 (9th Cir.) (quoting Continental Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690, 699, 82 S.Ct. 1404, 1410, 8 L.Ed.2d 777 (1962)), cert. denied, 375 U.S. 922, 84 S.Ct. 267, 11 L.Ed.2d 165 (1963).

The borrowers cite to evidence of various factors to support an inference of price fixing. First, they rely on the almost absolute parallelism of FIOR's prime rate caused by FIOR's practice of changing its prime rate whenever any four of seven specific banks changed theirs. Second, the borrowers note an exchange of price information through publication by the wire services of their prime rates. Third, they argue that meetings of top officials of Bancorp and its five largest subsidiary banks, including FIOR, facilitated the...

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122 practice notes
  • Rhodes v. Gordon, Case No. CV 12-2863-JGB (DTB)
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Central District of California
    • July 16, 2013
    ...only is mail fraud, codified at 18 U.S.C. § 1341, not actionable under 42 U.S.C. § 1983, see Wilcox v. First Interstate Bank of Or., N.A., 815 F.2d 522, 533 n. 1 (9th Cir.1987) (as amended) (Boochever, J., dissenting in part) (recognizing that no private right of action exists under 18 U.S.......
  • IN RE NAT. MORTG. EQUITY CORP. MORTG. POOL CERT. SECURITIES LITIGATION, No. MDL 647 AWT.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Central District of California
    • September 25, 1987
    ...The Ninth Circuit has also implicitly rejected a "separate injury" requirement for § 1962(a) and (d). In Wilcox v. First Interstate Bank, 815 F.2d 522 (9th Cir.1987), the court reversed summary judgment in defendant's favor on § 1962(a), (b) and (d) claims. In doing so, the court The Suprem......
  • Aguilar v. Atlantic Richfield Corp., No. D030628.
    • United States
    • California Court of Appeals
    • January 31, 2000
    ...Richards v. Neilsen Freight Lines (9th Cir.1987) 810 F.2d 898, 903-904; Wilcox v. First Interstate Bank of Oregon, N.A. (9th Cir.1987) 815 F.2d 522, 525, 528; Wallace v. Bank of Bartlett, supra, 55 F.3d at pp. 1167-1168; cf. Riverview Investments v. Ottawa Community Imp. (6th Cir.1990) 899 ......
  • Biljac Associates v. First Interstate Bank, Nos. A041024
    • United States
    • California Court of Appeals
    • March 22, 1990
    ...ruling was upheld in April 1987 by the Ninth Circuit Court of Appeals in Wilcox v. First Interstate Bank of Oregon, N.A. (9th Cir.1987) 815 F.2d 522 (Wilcox II Meanwhile, after four amendments to the individual complaints, the cases below were consolidated, and a consolidated amended compla......
  • Request a trial to view additional results
121 cases
  • Rhodes v. Gordon, Case No. CV 12-2863-JGB (DTB)
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Central District of California
    • July 16, 2013
    ...only is mail fraud, codified at 18 U.S.C. § 1341, not actionable under 42 U.S.C. § 1983, see Wilcox v. First Interstate Bank of Or., N.A., 815 F.2d 522, 533 n. 1 (9th Cir.1987) (as amended) (Boochever, J., dissenting in part) (recognizing that no private right of action exists under 18 U.S.......
  • IN RE NAT. MORTG. EQUITY CORP. MORTG. POOL CERT. SECURITIES LITIGATION, No. MDL 647 AWT.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Central District of California
    • September 25, 1987
    ...Circuit has also implicitly rejected a "separate injury" requirement for § 1962(a) and (d). In Wilcox v. First Interstate Bank, 815 F.2d 522 (9th Cir.1987), the court reversed summary judgment in defendant's favor on § 1962(a), (b) and (d) claims. In doing so, the court The Suprem......
  • Aguilar v. Atlantic Richfield Corp., No. D030628.
    • United States
    • California Court of Appeals
    • January 31, 2000
    ...Richards v. Neilsen Freight Lines (9th Cir.1987) 810 F.2d 898, 903-904; Wilcox v. First Interstate Bank of Oregon, N.A. (9th Cir.1987) 815 F.2d 522, 525, 528; Wallace v. Bank of Bartlett, supra, 55 F.3d at pp. 1167-1168; cf. Riverview Investments v. Ottawa Community Imp. (6th Cir.1990) 899 ......
  • Biljac Associates v. First Interstate Bank, Nos. A041024
    • United States
    • California Court of Appeals
    • March 22, 1990
    ...ruling was upheld in April 1987 by the Ninth Circuit Court of Appeals in Wilcox v. First Interstate Bank of Oregon, N.A. (9th Cir.1987) 815 F.2d 522 (Wilcox II Meanwhile, after four amendments to the individual complaints, the cases below were consolidated, and a consolidated amended compla......
  • Request a trial to view additional results
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