Wire Mesh Products, Inc. v. Wire Belting Ass'n

• Decision Date: 25 August 1981
• Docket Number: Civ. A. No. 77-505.
• Citation: 520 F. Supp. 1004
• Parties: WIRE MESH PRODUCTS, INC. v. WIRE BELTING ASSOCIATION, the Arbee Corporation, Hoyt Wire Cloth Company, Wiremation Industries, Inc., George B. Gaul, and Alexander D. Lumsden.
• Court: U.S. District Court — Eastern District of Pennsylvania

520 F. Supp. 1004

WIRE MESH PRODUCTS, INC. v. WIRE BELTING ASSOCIATION, the Arbee Corporation, Hoyt Wire Cloth Company, Wiremation Industries, Inc., George B. Gaul, and Alexander D. Lumsden.

Civ. A. No. 77-505.

United States District Court, E. D. Pennsylvania.

August 25, 1981.

Louis Podel, Levy Associates, Philadelphia, Pa., for plaintiff.

E. Harris Baum, Philadelphia, Pa., for Wire Belting Ass'n.

Tyson W. Coughlin, Philadelphia, Pa., for Arbee, Hoyt, Wiremation, Gaul and Lumsden.

MEMORANDUM AND ORDER

TROUTMAN, District Judge.

Summary judgment has been aptly described as a "drastic weapon"¹ which should be used "sparingly"² since it bars litigants from presenting their case to a jury. Particularly in antitrust cases,³ where intent and motive are frequently at issue, proofs are largely in the hands of alleged conspirators with a plot "thickened" by hostile witnesses.⁴ Nevertheless, Fed.R. Civ.P. 56 "should not be read out of antitrust cases,"⁵ for it provides courts with a useful tool to avoid needless litigation and shields defendants from the burden and costs associated with defending against a meritless claim.⁶ The party resisting a motion for summary judgment may not rest upon the mere allegations of his pleading; his response must set forth specific facts showing that a genuine issue for trial exists.⁷ Absent such showing, the motion may be granted. In the case at bar, plaintiff, resisting defendants' motion for summary judgment, has failed to meet this burden.

In the complaint, plaintiff, Wire Mesh Products, Inc., alleged that defendants, the Arbee Corporation, Hoyt Wire Cloth Company, George B. Gaul, Alexander D. Lumsden and Wiremation Industries, Inc., herein collectively referred to as "Wiremation defendants"⁸ and the Wire Belting Association (Association), a trade group, engaged in conspiratorial pricing schemes aimed at driving plaintiff out of business. Specifically, plaintiff alleges that the Wiremation defendants engaged in unfair competition and violated applicable antitrust laws by bribing and threatening plaintiff's customers and engaging in predatory pricing and price discrimination with the intent of driving plaintiff from the market. Plaintiff further complains that all defendants violated Sections 1 and 2 of the Sherman Act⁹ by tacitly agreeing to stabilize prices and monopolize the sale of wire belting in the United States. Part of defendant's illicit agreement purportedly included the formation of the defendant Association, designed as a "clearing house" for the unlawful exchange of information. Finally, plaintiff adds a pendent state claim against Wiremation for tortious interference with contractual rights.

The Robinson-Patman Act¹⁰ provides in relevant part that

it shall be unlawful for any person engaged in commerce, in the course of such commerce, either directly or indirectly, to discriminate in price between different purchasers of commodities of like grade and quality.

Wiremation defendants argue that plaintiff, to withstand their motion for summary judgment, must but has not adduced sufficient evidence that the belts sold to plaintiff's proposed customers were of a "like grade and quality" as the ones sold by defendants to other parties. In fact, a co-founder of plaintiff admitted in deposition testimony that, within this industry, the variety of marketed wire belts covered "an infinite range" and that customers dictated the desired specifications "seventy percent" of the time.¹¹ He also concurred with the statement that the industry does not produce "standard products"¹² and that Wiremation's products "varied".¹³

Plaintiff's failure to sustain its burden to oppose Wiremation's motion can be attributed to its failure to comply with the requirements of Fed.R.Civ.P. 56(e). For example, plaintiff argues that the owner of Wiremation Industries, Inc., defendant Alexander Lumsden, made it "common knowledge" that he would drive plaintiff out of business. Plaintiff further states that it "believes"¹⁴ that defendants engaged in specified practices violative of the antitrust laws and that it "believes" that defendants acted with ill will.¹⁵ Merely resting upon allegations in the complaint and relying upon "beliefs" clearly will not suffice to withstand a motion for summary judgment. Apparently misapprehending the distinction between summary judgment and a motion to dismiss, plaintiff repeatedly refers simply to the allegations in the complaint as well as "beliefs" unsupported by facts.

In fact, the only evidence which plaintiff has adduced regarding defendants' argument that the wire belting industry does not produce products of a "like grade and quality" is paragraph eleven of Enright's affidavit, which speculates that wire belts "can be" standardized. Affidavits based upon such unsupported speculation may, however, be disregarded.¹⁶ This rule applies to all types of cases, including antitrust.¹⁷ Notwithstanding a voluminous amount of discovery, plaintiff has failed to support, with any evidence of record, its assertion that standards in the wire belt industry exist.

Defendants, having shown by Enright's deposition and Lumsden's affidavit that the wire belting industry does not manufacture goods of "like grade and quality" has satisfied its burden on the motion for summary judgment.¹⁸ Plaintiff has not shown a genuine issue of material fact as to this issue. Defendants' motion for summary judgment on this claim, therefore, will be granted.

Likewise, Wiremation defendants' motion for summary judgment will be granted as to plaintiff's claim under Section 3 of the Robinson-Patman Act,¹⁹ which provides in relevant part that

it shall be unlawful for any person engaged in commerce, ...

to sell, or contract to sell, goods in any part of the United States at prices lower than those exacted by said person elsewhere in the United States for the purpose of destroying competition or eliminating a competitor in such part of the United States; or, to sell, or contract to sell, goods at unreasonably low prices for the purpose of destroying competition or eliminating a competitor.

Indisputably, this section does not provide plaintiff with a private cause of action.²⁰

Additionally, all defendants move for summary judgment on Count Two, which alleges generally that the Wiremation defendants conspired inter se to fix and control the price of wire belts, to create a monopoly, and to suppress competition. Moreover, plaintiff charges that, in an effort to succeed in reaching their or its illicit goal, Wiremation defendants created the Association and used it as a "clearing house" to exchange illegal information and stabilize prices.

Moving for summary judgment on these Sherman Act claims, the Association argues and the unrebutted evidence demonstrates that no discussion occurred at its quarterly meetings²¹ with regard to marketing, customers, product lines, bidding prices or price;²² that the Association members could use the formerly mandatory²³ monthly sales reports only for broad statistical purposes;²⁴ and that manipulating the statistics in a manner which would allow members to discern specific price information regarding other members was a "mathematical impossibility".²⁵

Against this factual background, plaintiff argues that its allegations "if proven ... would violate both Section 1 and 2 of the Sherman Act".²⁶ However, this statement, unsupported by legal authority or evidence of record, and plaintiff's naked allegation that it "believes that it was severely harmed"²⁷ by defendants' conduct, once again does not suffice to withstand a motion for summary judgment.²⁸

In fact, the only evidence adduced in opposition to defendants' motions is contained in four brief sentences²⁹ of Enright's affidavit. However, as stated before, articulating legal conclusions³⁰ rather than setting forth the facts upon which such conclusions are based, does not meet the requirements of Rule 56(e). Other parts of the affidavit³¹ reiterate plaintiff's theory of liability in impermissibly conclusory language.³² The mere allegation³³ that the members of the Association comprise seventy-five to ninety percent of the wire belt manufacturers in the nation is, standing alone, insufficient to create a genuine issue of material fact since there is no evidence³⁴ in the record that its members divulged to it the "most intimate details" of their affairs.³⁵ In fact, trade associations which compile industry statistics in composite form do not violate antitrust laws.³⁶ Plaintiff has also failed to adduce facts which would indicate that the defendant Association in any way controlled or fixed prices. Finally, plaintiff's assertion that it would have been "blackballed" had it attempted to join the Association, is likewise insufficient to defeat defendants' motion.³⁷ Accordingly, the Association's motion for summary judgment on the Sherman Act claims will be granted.

As to these same claims,³⁸ Wiremation defendants argue that, as a matter of law, they cannot be liable as a monopolist since they only produce ten percent³⁹ of the United States market share of wire belting. We agree. An unrebutted market share of such a small proportion is insufficient to support a claim under Section 2.⁴⁰ Therefore, Wiremation defendants' motion will be granted as to this claim.

Turning now to plaintiff's claim that Wiremation "attempted to monopolize", ultimately at trial plaintiff will be required to prove not only Wiremation defendants' specific intent to monopolize the relevant market but also that they had sufficient "market power to come dangerously close to success".⁴¹ In the present posture, plaintiff, confronted with Wiremation defendants' motion for summary judgment, must, but has failed to, produce any evidence as to the relevant geographic market which it asserts defendants attempted to monopolize. Plaintiff has also failed to point to any evidence sufficient to raise an issue of material fact that defendants' ten...