Opinion ID: 608853
Heading Depth: 3
Heading Rank: 1

Heading: The G-IV Purchase Agreement

Text: 36 Plaintiff's appeal first attacks the order of the district court granting defendant's motion for summary judgment on plaintiff's claim arising out of its agreement to purchase the G-IV from GAC--the manufacturer of the G-IV jet aircraft and a codefendant in this case. Our review is plenary. 37 It is not seriously disputed that the price specified in the G-IV Purchase Agreement may have included an overcharge caused by defendant's antitrust violation. Pursuant to that purchase agreement, plaintiff made installment payments to GAC of approximately ten percent of the total purchase price. However, prior to the date on which the G-IV would have been delivered (and the remaining ninety percent of the purchase price would have been due), plaintiff settled its antitrust claims against GAC. As part of the GAC Settlement Agreement, plaintiff transferred all its right, title and interest in the G-IV and the G-IV Purchase Agreement back to GAC. In return for its interest in the G-IV and the purchase agreement, plaintiff received a payment of $2,171,866. This amount exceeded plaintiff's ten percent down payment on the G-IV by over $800,000. 4 38 Plaintiff argues that because the GAC Settlement Agreement refers to the transaction as a sale of plaintiff's interest to GAC rather than a cancellation of the purchase agreement, plaintiff is entitled to recover damages from defendant in the amount of any overcharge reflected in the G-IV Purchase Agreement. 39 Plaintiff, in our view, seeks to attach unwarranted significance to the words cancellation and sale. Whether the GAC Settlement Agreement is termed a cancellation or a sale, the substance of the transaction remains the same. Plaintiff was effectively released from any obligation under the G-IV Purchase Agreement prior to the date on which the plane would have been delivered and the bulk of the purchase price would have been due. In addition, plaintiff appears to have made a significant profit on the transaction. 40 The Supreme Court has cautioned against permitting legality for antitrust purposes [to] turn on clever draftsmanship. Simpson v. Union Oil Co., 377 U.S. 13, 24, 84 S.Ct. 1051, 1058, 12 L.Ed.2d 98 (1964). Otherwise, the antitrust laws could be circumvented merely by clever manipulation of words, not by ... substance. Id. at 22, 84 S.Ct. at 1057; cf. Commissioner v. Danielson, 378 F.2d 771, 774 (3d Cir.) (applying similar rule under the federal tax laws), cert. denied, 389 U.S. 858, 88 S.Ct. 94, 19 L.Ed.2d 123 (1967). The district court properly looked to the undisputed effect of the settlement agreement and concluded that plaintiff had received an amount that more than compensated it for its payment plus interest and thus it could not have suffered any overcharge or consequential damages. 5 The district court correctly granted defendant's motion for summary judgment on this claim.