Opinion ID: 543660
Heading Depth: 1
Heading Rank: 1

Heading: introduction

Text: 2 Between June 1975 and August 1977, the plaintiffs filed their complaints in these actions, alleging several violations of the Sherman Act, 15 U.S.C. Sec. 1 et seq. As developed during the subsequent pretrial proceedings, the plaintiffs' allegations fall into three categories. First, the plaintiffs allege that the defendant oil companies conspired to raise or stabilize prices for refined oil products in violation of Sec. 1 of the Sherman Act, 15 U.S.C. Sec. 1. The plaintiffs assert that, in furtherance of this conspiracy, the defendants continually engaged in the mutual exchange of pricing and price-related information. Second, the plaintiffs allege that the defendants conspired to create, by various means, an artificial scarcity of crude oil and refined oil products in the western United States, in violation of Secs. 1 & 2 of the Sherman Act, 15 U.S.C. Secs. 1 & 2. Third, the plaintiffs allege that the defendants conspired not to compete in bidding on the plaintiffs' annual bulk sale petroleum supply contracts, in violation of Sec. 1 of the Sherman Act. 3 After several years of extensive discovery, the plaintiffs filed in January 1983 a three volume pretrial brief (Plaintiffs' Initial Pretrial Brief or PIPB), setting out their analysis of what the evidence would prove. The PIPB was supplemented on several occasions. In July 1983, the defendants moved for summary judgment, asserting that the evidence as summarized in the PIPB failed to raise a triable issue of antitrust conspiracy. After three days of oral argument on the summary judgment motions, the district court took the matter under submission. On November 25, 1986, the court filed an opinion and order granting the defendants' summary judgment motion in its entirety. In re Coordinated Pretrial Proceedings in Petroleum Prods. Antitrust Litig., 656 F.Supp. 1296 (C.D.Cal.1986) [hereinafter Petroleum Prods.]. The plaintiffs have timely appealed. 4 Before turning to an analysis of the proper summary judgment standards and their application in this case, we think it appropriate and useful first to outline certain background facts concerning the industry's structure as well as the nature of appellants' theory concerning the operation of the alleged conspiracy. 5 The appellees are major oil companies which, among other activities, produce crude oil, refine it into gasoline, and sell the gasoline to various distributors. During the time periods relevant to this appeal, these distributors fell into roughly four classes: (1) independent service station owners who operated franchises selling one particular brand of gasoline; (2) company-owned service stations run by company employees; (3) independent jobbers or brokers who resold gasoline to various service stations and other purchasers; and (4) governmental entities and others who purchased under bulk sales contracts. All parties agree that the lion's share of appellees' gasoline that was sold at retail was sold by independent franchised service stations. 6 As franchisees, these independent dealers were not free to purchase their supply of gasoline from any oil company at any time; as long as they remained franchisees they could only purchase from their particular franchisor. Each company sold gasoline to its franchised dealers at a price known as the dealer tankwagon price. In actuality, the official tankwagon prices were only occasionally changed; fluctuations in the cost of gasoline to franchised dealers were more frequently reflected in changes to the applicable discounts from the tankwagon price. These discounts were variously known as temporary dealer assistance, dealer aid, or simply discounts. 7 The appellants argue that, as a consequence of this market structure, each oil company was effectively able to control the retail price at which its gasoline was sold. That is, the appellants claim that, although individual dealers showed varying degrees of independence, an oil company could essentially determine the retail price by setting the applicable discount from the tankwagon price at which it sold gasoline to its franchised dealers. 8 In the present actions, the appellants claim that the appellees have engaged in a conspiracy to raise and stabilize the retail price of gasoline at the pump. They do not claim, however, that the appellees engaged in a resale price maintenance scheme whereby each dealer was required to charge a predetermined price; indeed, they have expressly disavowed such a theory. Rather, the appellants claim that the appellees conspired to fix retail prices by coordinating dealer discounts from the tankwagon price. 9 The parties hotly contest on appeal whether the application of this theory is limited by the Supreme Court's decision in Illinois Brick v. Illinois, 431 U.S. 720, 97 S.Ct. 2061, 52 L.Ed.2d 707 (1977), which held that indirect purchasers of goods whose price was fixed earlier in the stream of commerce may not maintain an antitrust damages action for overcharges passed on to them by those who purchase directly from the pricefixers. Although the district court had earlier ruled that Illinois Brick limited the relief available to the plaintiffs, see In re Coordinated Pretrial Proceedings in Petroleum Prods. Antitrust Litig., 497 F.Supp. 218, 225-27 (C.D.Cal.1980), aff'd on other grounds, 691 F.2d 1335 (9th Cir.1982), cert. denied, 464 U.S. 1068, 104 S.Ct. 972, 79 L.Ed.2d 211 (1984), it nonetheless recognized that Illinois Brick did not completely bar recovery. Accordingly, in ruling on the summary judgment motion, the district court recognized that, despite the ruling that Illinois Brick limited the relief that was available, the plaintiffs would still be able to receive some relief if they could establish that the defendants conspired to fix retail prices by fixing wholesale prices. See Petroleum Prods., 656 F.Supp. at 1299 (noting that plaintiffs' theory was that the defendants conspiratorily eliminated dealer discounts, thus restoring the official tankwagon prices, in order to fix retail prices). For purposes of this appeal, we operate with this same premise. Accordingly, we have no occasion to consider whether the district court was correct in its earlier ruling concerning the applicability of Illinois Brick.