Source: https://casetext.com/case/burlington-coat-factory-wrhse-v-esprit-de
Timestamp: 2019-05-20 18:56:06
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Matched Legal Cases: ['§ 1', '§ 1', '§ 1', '§ 1', '§ 1', 'art, 405']

Burlington Coat Factory Warehouse Corp. v. Esprit De Corp, 769 F.2d 919 | Casetext
Burlington Coat Factory Warehouse Corp. v. Esprit De Corp.
769 F.2d 919 (2d Cir. 1985)
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Burlington Coat Factory Warehouse Corp.v.Esprit De Corp.
United States Court of Appeals, Second CircuitAug 6, 1985
Herbert S. Kassner, New York City (Stacy J. Haigney, Denise M. Cossu, Kassner, Haigney Thompson, New York City, of counsel), for plaintiff-appellant.
Murray H. Bring, Washington, D.C. (G. Duane Vieth, John Kronstadt, Mark R. Merley, Arnold Porter, Washington, D.C., Lois D. Thompson, Proskauer Rose Goetz Mendelsohn, New York City, Thomas G. Cody, Sr. Vice President, Boris Auerbach, Vice President, Federated Dept. Stores, Inc., of counsel), for defendant-appellee Federated Dept. Stores, Inc.
Fredric W. Yerman, New York City (Richard A. De Sevo, Kaye, Scholer, Fierman, Hays Handler, New York City, of counsel), for defendant-appellee Esprit De Corp.
Burlington Coat Factory Warehouse Corporation ("Burlington") appeals from Judge Duffy's grant of summary judgment. 597 F.Supp. 1199 (S.D.N.Y. 1984). Burlington claims that Federated Department Stores, Inc. ("Federated") conspired with Esprit De Corp. ("Esprit") to fix resale prices in violation of § 1 of the Sherman Act, 15 U.S.C. § 1 (1982). Burlington also claims that pursuant to this conspiracy Esprit discontinued sales to Burlington in violation of their contract. We affirm the grant of summary judgment on the antitrust claim but reverse the grant of summary judgment on the contract claim.
In June, 1983, one month prior to Esprit's refusal to sell to Burlington, Alan Questrom, the chairman of one of Federated's chains, made a speech on off-price retailing at a meeting attended by representatives of some 600 major retailers and garment makers. His message was that Federated believed that discounters were taking unfair advantage of the marketing efforts of full-price retailers. To end this free-riding, he stated, Federated was going to stop dealing with manufacturers who sold current-season fashions to discounters. He added that "[i]t is inconceivable to us at Federated how a manufacturer could possibly justify bastardizing a great brand name or designer in whom they have invested millions to build status, credibility and consumer confidence [by selling to off-pricers]. . . . Doing business with a compromising [manufacturer] may just be too great a risk for the department store to take." He further stated that Federated would review the distribution policies of its suppliers to ensure that those policies were "compatible with [Federated's] marketing objectives."
We address plaintiff's claims in light of the familiar rule that summary judgment under Fed.R.Civ.P. 56 may be granted only when, viewing the evidence in the light most favorable to the opponent of the motion, there is no genuine issue of material fact. Adickes v. S.H. Kress Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970). The moving party thus has the burden to demonstrate that there is no such disputed issue and that it is entitled to judgment as a matter of law. Reborn Enterprises, Inc. v. Fine Child, Inc., 590 F.Supp. 1423, 1435 (S.D.N.Y. 1984), aff'd 754 F.2d 1072 (2d Cir. 1985) (per curiam). However, disputes over irrelevant facts must not be allowed to obscure the lack of a material dispute, Reborn, 590 F.Supp. at 1436, SEC v. Research Automation Corp., 585 F.2d 31, 35 (2d Cir. 1978), and the party opposing the motion may not stand mute in reliance solely upon its allegations when facing a substantial evidentiary submission refuting its claim. An antitrust plaintiff may not, therefore, in opposing a motion for summary judgment, rest on conclusory assertions of conspiracy when the defendants have proffered substantial evidence supporting a plausible and legitimate explanation of their conduct. First National Bank v. Cities Service Co., 391 U.S. 253, 289, 88 S.Ct. 1575, 1592, 20 L.Ed.2d 569 (1968); Reborn, 590 F.Supp. at 1436.
The Supreme Court continues to adhere to the view that § 1 of the Sherman Act proscribes vertical price fixing between a manufacturer and its distributers. Monsanto, 104 S.Ct. at 1469, n. 7. Burlington claims that Federated and Esprit conspired to engage in price fixing, conduct that violates § 1 and was the cause of Esprit's refusal to deal with Burlington, a professed discount seller.
That section provides in part: "Every contract, combination in the form of a trust or otherwise, or conspiracy, in restraint of trade or commerce among the several states, or with foreign nations, is declared to be illegal." 15 U.S.C. § 1 (1982).
We conclude that Burlington has failed to meet the Monsanto test. Direct complaints from Federated to Esprit would be, by themselves, insufficient to show a conspiracy between Federated and Esprit, even if Esprit cancelled Burlington immediately thereafter. "Permitting an agreement to be inferred merely from the existence of complaints, or even from the fact that termination came about `in response to' complaints, could deter or penalize perfectly legitimate conduct. . . . Such complaints, particularly where the manufacturer has imposed a costly set of nonprice restrictions, `arise in the normal course of business and do not indicate illegal concerted action.'" Monsanto, 104 S.Ct. at 1470 (quoting Roesch, Inc. v. Star Cooler Corp., 671 F.2d 1168, 1172 (8th Cir. 1982)). Burlington's case is thus inherently feeble because there is no evidence that Esprit and Federated ever discussed Burlington's discounting. Because a direct complaint by Federated to Esprit about Burlington's discounting would not be sufficient to make out a prima facie case, Questrom's speech, which was couched in generalities, is clearly inadequate to prove a conspiracy between Federated and Esprit with particular regard to Burlington, even if the contents of that speech were known by Esprit. This inadequacy becomes even more glaring in light of Burlington's failure even to allege that Esprit complained to Burlington about its discounting practices.
Burlington also relies on the uncorroborated hearsay testimony of its own personnel. They stated that other suppliers had informed them that Federated was applying pressure not to sell to Burlington. This testimony hardly outweighs the lack of any evidence of similar pressure on Esprit, a not insignificant omission in an action which alleges that Federated conspired with Esprit. In any event, we need not consider such evidence because Burlington cannot rely on inadmissible hearsay in opposing a motion for summary judgment, see Oreck Corp. v. Whirlpool Corp., 639 F.2d 75, 80-81 (2d Cir. 1980); Filco v. Amana Refrigerator, Inc., 709 F.2d 1257, 1267 (9th Cir. 1983); Contemporary Mission, Inc. v. U.S. Postal Service, 648 F.2d 97, 105 n. 11 (2d Cir. 1981); Price v. Worldvision Enterprises, Inc., 455 F.Supp. 252, 266 n. 25 (S.D.N.Y. 1978); Lyon Ford, Inc. v. Ford Motor Co., 342 F.Supp. 1339, 1343 (S.D.N.Y. 1971), absent a showing that admissible evidence will be available at trial. Burlington has made no such showing.
The district court's denial of more time is subject to reversal only if it abused its discretion. Contemporary Mission, 648 F.2d at 105. Nevertheless, a denial of access to relevant information weighs in favor of the party opposing a motion for summary judgment. Landmark Land Company, Inc. v. Sprague, 701 F.2d 1065, 1070 (2d Cir. 1983). We conclude, however, that whatever discovery went undone was the consequence of Burlington's own conduct and was in any event inconsequential.
See Paul Kadair, Inc. v. Sony Corp. of America, 694 F.2d 1017 (5th Cir. 1983); see also SEC v. Spence Green Chemical Co., 612 F.2d 896, 901 (5th Cir. 1980) (must explain inability to obtain facts and demonstrate how postponement will correct problem; cannot rely on vague assertions regarding nature of facts to be discovered). Burlington never filed such an affidavit. Instead, it mentioned Rule 56(f) for the first time only in its memorandum in opposition to the defendant's motion for summary judgment. A memorandum is not a substitute for an affidavit under Rule 56(f), S.A. Empresa De Viacao Aerea Rio Grandense v. Walter Kidde Co., 690 F.2d 1235, 1238 (9th Cir. 1982); Schoenbaum v. Firstbrook, 268 F.Supp. 385, 390 (S.D.N.Y.), aff'd, 405 F.2d 200, aff'd in part and rev'd in part, 405 F.2d 215 (2d Cir. 1967) (en banc), and it has been held that the failure to file such an affidavit under Rule 56(f) is by itself enough to reject a claim that the opportunity for discovery was inadequate. Mid-South Grizzlies v. National Football League, 720 F.2d 772, 780 n. 4 (3d Cir. 1983), see also Shavrnoch v. Clark Oil Refining Corp., 726 F.2d 291, 294 (6th Cir. 1984); Lewis v. Knutson, 699 F.2d 230, 240 (5th Cir. 1983); Munitrad Systems, Inc. v. Standard Poor's Corp., 672 F.2d 436, 440 (5th Cir. 1982); THI-Hawaii, Inc. v. First Commerce Financial Corp., 627 F.2d 991, 994 (9th Cir. 1980); British Airways Board v. Boeing Co., 585 F.2d 946, 954 (9th Cir. 1978), cert. denied, 440 U.S. 981, 99 S.Ct. 1790, 60 L.Ed.2d 241 (1979); Scooper Dooper, Inc. v. Kraftco Corp., 494 F.2d 840, 849-50 (3d Cir. 1974).
The district court was therefore within its discretion in rejecting Burlington's claim that more discovery was appropriate. See Paul Kadair, 694 F.2d at 1031; see also Contemporary Mission, 648 F.2d at 107 (request for further discovery rejected when request based on pure speculation of what would be discovered); Walters v. City of Ocean Springs, 626 F.2d 1317, 1321-22 (5th Cir. 1980) (per curiam) (affidavit should allege with sufficient particularity the controverting facts and that a genuine issue of material fact will be created; party must use discovery mechanisms in timely manner); Spence Green Chemical Co., 612 F.2d at 901; Willmar Poultry Co. v. Morton-Norwich Products, Inc., 520 F.2d 289, 297 (8th Cir. 1975) (must show purpose served by further discovery).
Burlington has also argued before us that answering the various requests for discovery by defendants and responding to a counterclaim for abuse of process and vexatious litigation precluded it from conducting its own discovery. We have examined all the relevant materials and reject this claim as frivolous. Burlington had ample time in which to pursue the discovery that it now claims is essential. Cf. White v. Hearst Corp., 669 F.2d 14, 15-16 (1st Cir. 1982) (complaint filed May 6, summary judgment granted November 10); Program Engineering, Inc. v. Triangle Publications, Inc., 634 F.2d 1188, 1191 (9th Cir. 1980) (eight months for discovery); Person v. New York Post Corp., 427 F.Supp. 1297, 1301 (E.D.N.Y. 1977) (summary judgment granted seven months after complaint filed). There is, of course, no litmus test to determine the exact amount of time needed for discovery in a particular case.' Claims of a need for more discovery by a party who has diligently used the time available, however, should be given more favorable consideration than claims by one who has allowed months to pass unused. Moreover, when alerted to a forthcoming motion for summary judgment, a party wanting more time for discovery should seek, through negotiation with the other party and, if necessary, through application to the district court, an appropriate discovery schedule. A party who both fails to use the time available and takes no steps to seek more time until after a summary judgment motion has been filed need not be allowed more time for discovery absent a strong showing of need.
We take note of one matter unrelated to the disposition of this case.
There is no way, Lee [Leon Rosenberg, National Sales Manager of Esprit], I'm telling you as a friend — `cause this might be the only time we are going to be friends. Between you and I, Monroe Milstein, who is the present owner of the company — I used to own part of the company; when we went public, I sold it to him. There is no possible way that any vendor, name brand vendor we do business is going to drop us, as far as he is concerned. No possible way. He's not only got lawyers.... We've got fifteen lawsuits going now. Believe me, I know all the legal ramifications. They are disastrous. They go on forever. The only ones that make money are the attorneys. We've got one lawsuit with Interco and London Fog and Devon that started six years ago. Six years ago, it's still going on. So far, Interco fired two banks of attorneys. It cost $950,000 and it ain't got to court yet. It ain't never going to be over. I'm sure of that. There are depositions after depositions which you and I and Elissa [Kraemer, buyer for Burlington] and Bernie [Frishberg, salesman for Esprit] will be in for 10 to 12 hours at a time. I am telling you, this thing is endless. Believe me, there is no way I'm threatening you. I am just telling you as a friend. He will not stop. No way."
The district court's failure to provide us with its reasons for dismissing the claim and the conflicting factual assertions of the parties leave us with a record inappropriate for review. See Mercy Hospital v. NLRB, 668 F.2d 661, 664 (2d Cir. 1982). We therefore reverse the dismissal of the contract claim and remand for further proceedings. Naturally, we express no opinion regarding the underlying merits of the claim, nor do we mean either to preclude or to encourage another motion for summary judgment.
To the extent these remarks and testimony suggest that Burlington has an ongoing policy of bringing litigation without regard to the merits solely to affect business decisions of those with whom it deals, we bring to counsel's attention the following: Eastway Construction Corp. v. City of New York, 762 F.2d 243 (2d Cir. 1985) (sanctions under Rule 11, Fed.R.Civ.P., are mandatory against attorney and/or client when a pleading has been interposed for an improper purpose or where a competent attorney could not reasonably believe the pleading is well grounded in fact or law; showing of subjective bad faith no longer required); Landmarks Holding Co. v. Bermant, 664 F.2d 891, 896 (2d Cir. 1981) (antitrust liability for bringing of litigation without regard to merits in order to injure competitors); Code of Professional Responsibility, DR 7-102.