Williams Elec. Co., Inc. v. Honeywell, Inc.

• Decision Date: 16 April 1991
• Docket Number: No. 86-04374-RV.,86-04374-RV.
• Parties: WILLIAMS ELECTRIC COMPANY, INC., Plaintiff, v. HONEYWELL, INC., et al., Defendants.
• Court: U.S. District Court — Northern District of Florida

772 F. Supp. 1225

WILLIAMS ELECTRIC COMPANY, INC., Plaintiff, v. HONEYWELL, INC., et al., Defendants.

No. 86-04374-RV.

United States District Court, N.D. Florida, Pensacola Division.

April 16, 1991.

COPYRIGHT MATERIAL OMITTED

James E. Moore, Moore & Moore, P.A., Niceville, Fla., Kimberly Cornelson, M. Jerome Elmore, Bondurant, Mixson & Elmore, Atlanta, Ga., for Williams Elec. Co.

Hal K. Litchford, Litdhord, Christopher & Milbrath, P.A., Orlando, Fla., Paul A. Koches, Joseph Brooks, Popham, Haik, Schnobrich & Kaufman, Ltd., Washington, D.C., for Honeywell.

William C. Owen, Carlton, Fields, Ward, Emmanuel, Smith, Cutler & Kent, P.A., Tallahassee, Fla., for John Geis and Honeywell, Inc.

ORDER GRANTING SUMMARY JUDGMENT

VINSON, District Judge.

Pending in this case are several motions, including the motion to dismiss, or in the alternative for summary judgment, filed by defendants Honeywell and Geis. (Doc. 184). For the reasons stated below, that motion is GRANTED as to all counts except Counts XIX and XX, and Counts XIX and XX are DISMISSED, without prejudice.

I. FACTUAL BACKGROUND.

The factual record in this case is voluminous. For the sake of brevity, I discuss many of the factual details in this opinion only as they become relevant, with this very brief review of the factual setting as background.

Defendant Honeywell installed the Energy Management Control System (EMCS) at Sheppard Air Force Base, Texas (Sheppard), prior to the events in this case. The EMCS contract between the United States Air Force and Honeywell required that Honeywell alone could perform work on certain aspects of the EMCS for all future work done on the EMCS system. Plaintiff alleges that the contract required only recommendations from Honeywell, and only on certain limited aspects of future EMCS work.

Plaintiff won a later general contract for work at Sheppard. Section 13A of this contract dealt with the EMCS system. Honeywell had unsuccessfully bid on this section. There were five listed items¹ within Section 13A which the Air Force later required to be done by Honeywell.

Williams wanted to perform all of the Section 13A work itself. It quoted cost estimates below $100,000, some as low as $30,000, to do the work. Honeywell, however, also wanted to perform all of Section 13A work itself. Williams alleges that Honeywell threatened the Air Force with withdrawal of its warranties if it gave any part of Section 13A to Williams. The Air Force then told Williams it had to use Honeywell for the five listed items within Section 13A.

Williams further alleges that Honeywell then illegally tied its performance of the five listed items to getting all of the Section 13A work. Because of the Air Force's requirement that Honeywell perform the five listed items, and Honeywell's general "market power," Williams was forced to use Honeywell for all of the Section 13A work.

Honeywell estimated the cost of the work to be $410,000, a figure Williams charges is grossly exorbitant. The Air Force's original cost estimate was $107,000, an amount close to Williams' later estimate. Honeywell then sent in its cost estimate, allegedly to "justify its price," and the Air Force later revised its cost estimate to over $400,000 in accord with Honeywell's estimate.

Honeywell also required that defendant J.V. Clark Electric Company, Inc. (Clark) be used as a sub-sub-contractor on Section 13A work. Clark would receive a portion of the $410,000. Williams alleges that Clark conspired with Honeywell in this way: Honeywell would do the above-alleged things to force Williams to use Honeywell on Section 13A; Honeywell would insist on using Clark as sub-subcontractor; Clark would use only Honeywell products as it performed its portion of the work.²

Williams claims that, as a result of all of this, it had to pay out $410,000 for a job it could have performed itself for approximately $30,000. Williams claims a loss in profits of $680,000. It also claims a loss in operating capital that reduced its bonding capacity. It alleges that the reduction in operating capital forced it to forego earning credit for making early payments, and in some cases forced it to make late payments and pay late fees. Williams also complains of lost business opportunity, and a loss in business reputation caused by the late payments. The total of damages Williams seeks is $2 million.

Williams is suing Honeywell and one of its officers, John Geis (Geis)³; and Clark and one of its officers, William Warren Harmon (Harmon). In addition to various antitrust claims under federal⁴ and state⁵ law, Williams alleges state law torts, including tortious interference with contract,⁶ fraud⁷, and violation of the Texas Deceptive Trade Practices Act.⁸

II. LEGAL STANDARD.

A motion for summary judgment should be granted when "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." Rule 56(c), Fed.R.Civ.P. An issue of fact is "material" if it might affect the outcome of the case under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). It is "genuine" if the record taken as a whole could lead a rational trier of fact to find for the non-moving party. See Matsushita Electric Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

"The moving party is entitled to judgment as a matter of law if the nonmoving party cannot sufficiently show an essential element of the case to which the nonmoving party has the burden of proof." Cornelius v. Town of Highland Lake, 880 F.2d 348, 351 (11th Cir.1989), cert. denied sub nom., Spears v. Cornelius, ___ U.S. ___, 110 S.Ct. 1784, 108 L.Ed.2d 785 (1990). However, summary judgment is improper "if a reasonable fact finder could draw more than one inference from the facts, and that inference creates a genuine issue of material fact." Id.

On a summary judgment motion, the record and all inferences that can be drawn from it, must be viewed in the light most favorable to the non-moving party. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962). Furthermore, the court must consider the entire record in the case, not just those pieces of evidence which have been singled out for attention by the parties. See Clinkscales v. Chevron USA, Inc., 831 F.2d 1565, 1570 (11th Cir.1987).

III. ANTITRUST IMMUNITY.

(A.) Federal Antitrust Liability. Defendants argue that they are immune from antitrust liability because, in entering into the contractual arrangement challenged by Williams, they acted at the direction of federal officials, who are themselves immune from antitrust liability. In considering their argument, I am mindful that "repeals of the antitrust laws by implication ... are strongly disfavored." Otter Tail Power Co. v. United States, 410 U.S. 366, 372, 93 S.Ct. 1022, 1027, 35 L.Ed.2d 359 (1973), citing United States v. Philadelphia Nat'l Bank, 374 U.S. 321, 350-351, 83 S.Ct. 1715, 1734-1735, 10 L.Ed.2d 915 (1963).

However, it appears well-settled that federal agencies and their officials acting in their official capacity are immune from federal antitrust liability. See United States v. Cooper Corp., 312 U.S. 600, 606, 61 S.Ct. 742, 744, 85 L.Ed. 1071 (1941); Sakamoto v. Duty Free Shoppers, Ltd., 764 F.2d 1285 (9th Cir.1985), cert. denied, 475 U.S. 1081, 106 S.Ct. 1457, 89 L.Ed.2d 715 (1986); Dept. of Water & Power v. Bonneville Power Administration, 759 F.2d 684 (9th Cir.1985); Sea-Land Service, Inc. v. Alaska Railroad, 659 F.2d 243 (D.C.Cir.1981), cert. denied, 455 U.S. 919, 102 S.Ct. 1274, 71 L.Ed.2d 459 (1982); Feldman v. Gardner, 661 F.2d 1295 (D.C.Cir.1981), cert. granted sub nom. District of Columbia Court of Appeals v. Feldman, 458 U.S. 1105, 102 S.Ct. 3481, 73 L.Ed.2d 1365 (1982), vacated on other grounds, 460 U.S. 462, 103 S.Ct. 1303, 75 L.Ed.2d 206 (1983).

The case law relating to the immunity of private parties dealing with the federal government is somewhat more sparse. Two opinions of the Supreme Court of the United States support the extension to private actors acting within the direction of the federal agency. In Gordon v. New York Stock Exchange, 422 U.S. 659, 95 S.Ct. 2598, 45 L.Ed.2d 463 (1975), a unanimous Court held that where Congress gave the Securities and Exchange Commission the power to approve stock exchanges' system of fixed commission rates, the Commission and the stock exchanges were immune from antitrust liability. 422 U.S. at 689-690, 95 S.Ct. at 2614-2615.

Similarly, in United States v. Nat'l Assoc. of Securities Dealers, 422 U.S. 694, 95 S.Ct. 2427, 45 L.Ed.2d 486 (1975), the Court held that where Congress empowered the SEC to approve certain self-imposed horizontal restrictions on the transferability of mutual fund shares, the mutual funds, broker-dealers, and other private parties involved were immune under the antitrust laws. I believe these cases support the proposition that private parties are shielded from federal antitrust liability where their actions were regulated by a federal regulatory agency acting pursuant to congressional authority, and the action in question was authorized or directed by that regulatory agency.

Defendants cite a case from within this circuit supporting their view. In Medical Ass'n v. Schweiker, 554 F.Supp. 955, 966 (M.D.Ala.1983), the Middle District of Alabama held that:

... private parties to the extent they are acting at the direction or with the consent of federal agencies also fall outside the pale of the Sherman act's prohibition. (emphasis added).

The Eleventh Circuit affirmed the Middle District in a per curiam opinion. Medical Ass'n v. Heckler, 714 F.2d 107, 108 (11th Cir.1983).

Defendants also rely upon Greensboro Lumber Co. v. Georgia Power Co., 643 F.Supp. 1345 (N.D.Ga.1986), aff'd, ...