Court Opinion

ID: 9004490
Source: CourtListenerOpinion
Date Created: 2022-11-27 13:20:10.821573+00
Date Added: 2024-06-11T17:11:14.817818
License: Public Domain

ROTH, Circuit Judge,
concurring and dissenting:
I join part VI of the majority's opinion and judgment which affirms the denial of summary judgment on the Potamkins’ claim under the Pennsylvania Board of Vehicles Act. However, I respectfully dissent from the majority’s disposition of the Po-tamkins’ antitrust and tortious interference with contract claims. In regard to the antitrust claim, I conclude that the plaintiffs have not met their burden of producing evidence which tends to show that the distributor, BMW NA, had entered into a conspiracy with its dealers to boycott the Potamkins. More significantly, I find that *1384plaintiffs have not met their burden of producing evidence that tends to exclude the possibility that BMW NA was acting independently of its dealers when it rejected the Potamkin dealerships. Monsanto Co. v. Spray-Rite Service Corp., 465 U.S. 752, 768, 104 S.Ct. 1464, 1473, 79 L.Ed.2d 775 (1984). There is no evidence of a “conscious commitment to a common scheme designed to achieve an unlawful objective.” Id.; Edward J. Sweeney & Sons, Inc. v. Texaco, 637 F.2d 105, 111 (3d Cir.1980), cert. denied, 451 U.S. 911, 101 S.Ct. 1981, 68 L.Ed.2d 300 (1981). I would, therefore, affirm the summary judgment entered against the Potamkins on their Sherman Act § 1 claim. Because the basis for the tortious interference with contract claim is so closely interwoven with the antitrust claim, I further conclude that it must fall with the failure of the antitrust claim. I would, therefore, affirm the grant of summary judgment on that claim as well.
Turning first to the antitrust claim, I believe the majority has misread our standard for summary judgment when it allows the Potamkins’ antitrust claim to go forward. As the majority acknowledges, an antitrust plaintiff must be prepared to demonstrate a causal relationship between alleged dealer complaints and a distributor’s action in order to distinguish concerted action in violation of the Sherman Act from “perfectly legitimate” independent conduct. Monsanto, 465 U.S. at 763-64, 104 S.Ct. at 1470-71. However, the present case differs from situations such as that in Arnold Pontiac-GMC, Inc. v. General Motors Corp., 786 F.2d 564 (3d Cir.1986), where we were able to find such a linkage. In Arnold Pontiac, there was direct evidence of concerted action which was coupled with circumstantial evidence that GMC had planned to grant Arnold Pontiac-GMC a Buick franchise but changed its mind after a meeting between its representative and the local dealers. We found that the combination of direct and circumstantial evidence raised a genuine issue as to whether the Buick dealers had conspired to thwart competition at the dealership level. For this reason, we reversed the grant of summary judgment and remanded the case for trial.
Our careful review of the record here shows no direct evidence of a conspiracy that allegedly caused the Potamkins their injury. We are left to infer from only circumstantial evidence whether there was concerted action. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 588, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986). As I relate below, I find that BMW NA’s conduct is as consistent with permissible unilateral conduct as it is with illegal conspiracy, and therefore, following Mat-sushita, I find that the evidence is not adequate to support the alleged antitrust conspiracy.
The evidence here suggests at most that at different times New York area and Philadelphia area dealers may have complained to BMW NA about awarding dealerships to the Potamkins. Yet, in Monsanto, 465 U.S. at 763, 104 S.Ct. at 1470, the Supreme Court rejected the notion that a jury could infer the existence of a price-fixing agreement from the complaints of other distributors or “from the fact that termination came about ‘in response to’ complaints” from other distributors. The Court required something more of section 1 plaintiffs: Evidence that “tends to exclude the possibility that the manufacturer and non-terminated distributors were acting independently.” Monsanto, 465 U.S. at 764, 104 S.Ct. at 1471; Fragale & Sons Beverage Co. v. Dill, 760 F.2d 469, 473 (3d Cir.1985).
The Court explained that a plaintiff does not establish an illegal price-fixing agreement solely by proof of complaints by competitors of the prospective dealer. Complaints about discounters 1 “are natural— and from the manufacturer’s perspective, unavoidable — reactions by distributors to the activities of their rivals.” Monsanto, 465 U.S. at 763, 104 S.Ct. at 1470. A distributor’s decision not to deal may re-*1385fleet a restraint which is primarily horizontal in nature, in that dealers are trying to suppress competition by utilizing the power of a common supplier. Nevertheless, so long as the distributor made an independent business decision not to do business with a dealer, the fact that the distributor was aware of the dealers’ complaints is of no moment. Id. at 763-764, 104 S.Ct. at 1470-71.
In looking at all of the evidence which the Potamkins present, I understand we cannot compartmentalize the various factual components. However, neither can we read between the lines to infer linkage where there is none. When drawing inferences, we may draw only reasonable inferences from sufficient evidence. For the reasons which follow, I conclude that the Potamkins have not presented the quantum of evidence necessary to permit their case to go to the jury. In reaching this conclusion, I heed the Monsanto Court’s warning that allowing finders of fact to infer conspiracies from extremely equivocal evidence may deter pro-competitive conduct:
If an inference of such an agreement may be drawn from highly ambiguous evidence, there is a considerable danger that the doctrines enunciated in Sylva-nia and Colgate will be seriously eroded.
Id. at 763, 106 S.Ct. at 1470.
Evaluating the evidence in the present case in the light most favorable to the Potamkins, I conclude that a jury could not find a violation of section 1 of the Sherman Act without relying on speculation or conjecture, a result we have cautioned against. Edward J. Sweeney, 637 F.2d at 116.
When examined closely, the Potamkins’ evidence is slender. With regard to the alleged 1981 conspiracy, the Potamkins present the Gray affidavit along with the statement of Robert Potamkin to support an inference of concerted action. As the majority notes, the Gray affidavit contains no evidence that BMW NA considered the dealers’ alleged demands or acted in response to those demands. Nevertheless, the majority reads the affidavit to support an inference that BMW NA knuckled under to dealer pressure. Taking the affidavit together with the other evidence the Po-tamkins present, I cannot draw such an inference. Gray’s testimony relates only Gray’s own belief that BMW NA’s decision to deny the Potamkins the Great Neck open point came as a result of the New York-area BMW dealers’ objections. The affidavit neither mentions whether a BMW NA employee participated in the meeting at which dealers discussed complaining to BMW NA nor supports an inference that the dealers had formed an agreement to pressure BMW NA or its Eastern Regional Manager, Terry Cronin.2 The affidavit relates only that dealers at the meeting opposed BMW NA’s granting the Potamkins a franchise, a sentiment which is not surprising from dealers who would face new competition if the franchise were granted.
Even if a representative of BMW NA were present at the dealer advertising group meeting, such contact between a distributor and its dealers, while evidence of an opportunity to conspire, does not amount to a conspiracy. Our case law suggests such meetings have important business purposes; they provide the distributor or manufacturer with important information which can be used to change product mix or advertising direction. Distributors and dealers must speak “to assure that their product will reach the consumer persuasively and efficiently.” Monsanto, supra, 465 U.S. at 763-64, 104 S.Ct. at 1470.
As further evidence of concerted action by New York area dealers, Robert Potam-kin offers his own statement that in late 1985, Gene Hoffman, a BMW dealer in Bloomfield, New Jersey, told him that BMW NA’s decision to deny the Potamkins the Great Neck franchise “was due to the fact that other Long Island BMW dealers feared the price competition that a Potam-kin BMW franchise would bring to the Long Island market.” I do not find that *1386this evidence enhances the Potamkins’ conspiracy claim. Again, all businesses fear competition, particularly from a new competitor who will compete on price. Moreover, I do not read Robert Potamkin’s affidavit to suggest that Hoffman told him that BMW NA consented to an agreement with its Long Island dealers to exclude the Potamkins.3 Robert Potamkin’s affidavit, even when considered with the Gray affidavit, does not present evidence which tends to exclude the possibility that BMW NA acted unilaterally to keep the Potamkins out of Long Island.
* * * [one sentence deleted].4 However, even if BMW NA did contact existing dealers, a conclusion refuted by the testimony of Cronin and Hoffman among others, such evidence, when taken together with the Gray and Robert Potamkin affidavits, still does not raise an inference of concerted action between BMW NA and its New York area dealers to deny the Potamkins a franchise. At a minimum, “the circumstances [must be] such as to warrant a jury in finding that the conspirators had a unity of purpose or a common design or understanding, or a meeting of the minds in an unlawful arrangement.” American Tobacco Co. v. United States, 328 U.S. 781, 810, 66 S.Ct. 1125, 1139, 90 L.Ed. 1575 (1946). BMW NA’s own decision to contact its dealers would not meet the Potamkins’ burden of having to show that BMW and the dealers had acted with a common design.
Finally, it must be remembered that the 1981 allegations are not part of the antitrust injury complained of here; the Po-tamkins use those allegations to suggest a pattern of dealing that supports their claim of concerted action arising out of the events of 1985.
With regard to those 1985 events surrounding the Potamkins’ inability to obtain a BMW franchise in Manhattan, the evidence which the Potamkins present is very thin. To suggest concerted action, the Po-tamkins offer only Robert Potamkin’s statement that Gene Hoffman had informed him on May 30, 1986, that a BMW NA representative had visited Hoffman in the fall of 1985 and had asked Hoffman’s opinion about the proposed sale of TransAtlantic to the Potamkins. Based on this evidence, the Potamkins argue that dealer opposition from 1981 was reactivated in 1985 to defeat their agreement in principle with Caufield for the Trans-Atlantic dealership in Manhattan. Even if Hoffman had complained to a BMW NA representative— Hoffman denies that any representative of BMW ever visited him regarding the possible sale of a dealership in Manhattan to the Potamkins — and even if a BMW NA representative heard similar complaints from other dealers — there is no evidence supporting this point in the record — complaints by competitors, standing alone, are not sufficient to show a conspiracy.5
As for other evidence of a 1985 New York conspiracy, the majority notes that BMW NA backed away from its strategy of creating a factory store and instead gave Martin BMW the exclusive Manhattan dealership. However, the factory store concept was not invented to cover up the conspiracy. The uncontroverted documentary and deposition testimony suggests that BMW came up with the idea at least one year prior to the proposed sale of Trans-Atlantic. In short, I find the evidence insufficient to deduce a conspiracy between BMW NA and its New York dealers to deprive the Potamkins of a BMW dealership in Manhattan.
Finally, the evidence that BMW NA conspired with its Philadelphia dealers to prevent the Potamkins from purchasing the Green dealership is equally scant. It stems from one source: the statement of Bruce Braverman, a Potamkin employee, recount*1387ing what Donald Mitchell allegedly had told him. I do not agree with the majority’s conclusion that the Braverman statement is admissible evidence. Nor can I conclude that the district court abused its discretion in excluding the Braverman statement. See, e.g., United States v. Gambino, 926 F.2d 1355, 1364 (3d Cir.1991). However, even if his statement were admissible, I find that it offers little evidence of the alleged conspiracy.
The majority goes to great lengths to find Braverman’s testimony admissible. Yet, I cannot agree with its reasoning for several reasons. First, I find that Braver-man’s statement of what Mitchell told him should not be admitted as an exception to the hearsay rule because Mitchell does not qualify as an agent of BMW NA acting within the scope of his agency and employment. Second, I find that Braverman’s statement also falls short of the exception for the admission of hearsay statements by co-conspirators. Furthermore, even if the Braverman relation of the Mitchell statement is admissible evidence of a conspiracy, it relates only to a conspiracy between BMW dealers, which is not the conspiracy charged in the complaint. The statement does not refer to BMW NA’s role in any such scheme.
The record suggests that Mitchell worked for BMW Credit Corporation * * * [remainder of sentence deleted]. In his work for BMW Credit, Mitchell had no contact with BMW NA and nothing to do with its decisions on dealer appointments. Therefore, I do not believe that Mitchell’s statement to Braverman concerned a matter within the scope of his agency, such that Braverman’s retelling should be admissible under Rule 801(d)(2)(D).
In any event I do not find that BMW NA so dominates the activities of BMW Credit that Mitchell could act as BMW NA’s agent. The majority finds this a close question. I think the answer is clear. * * * [four sentences deleted].
Moreover, even if Mitchell could have spoken as BMW NA’s agent, the admissibility of Braverman’s statement is cast into doubt by the multiple layers of hearsay contained within Mitchell’s statement as Braverman relates it. As the majority indicates, our case law allows secondary and tertiary levels of hearsay to come in if there is a basis for admitting the hearsay statement. See Fed.R.Evid. 805. Braverman testified in his deposition that he remembers Mitchell telling him that Don Ro-sen was the source of Mitchell’s news that other Philadelphia area BMW dealers were going to do what they could to make certain the Potamkins did not get a franchise. However, I do not find that the out of court statements purportedly made by other dealers to Rosen, who then repeated them to Mitchell, should be admissible in light of our concern for restricting declarations of unidentified persons. Even where we might infer who such persons may be, such supposition does not satisfy the heavy burden on the proponent of the evidence to demonstrate its trustworthiness. See Carden v. Westinghouse Elec. Corp., 850 F.2d 996, 1003 (3d Cir.1988). We do not know the identity of the other dealers who presumably spoke to Don Rosen, nor do we know whether it was Don Rosen himself or someone else at his dealership who spoke to Mitchell. I note that Mitchell indicated that he did not usually talk to dealership owners when he visited his accounts. Moreover, the nonhearsay evidence contradicts Braverman’s testimony. Mitchell denies having made the statements attributed to him by Braverman, and Don Rosen denies having told Mitchell that Philadelphia area BMW dealers had complained to BMW NA about the possibility that the Potam-kins would become a dealer.
I also conclude that the Mitchell “statement” is not admissible under the co-conspirator exception, Rule 801(d)(2)(E). I do not find, either within the statement or independent of the statement, any evidence of a conspiracy involving BMW NA and the Philadelphia area BMW dealers. Nor do I find that Mitchell held a position relative to BMW NA that could implicate BMW NA in such a conspiracy through Mitchell’s actions.
For each of the above reasons, I believe the district court did not err in excluding *1388Braverman’s statement. However, even if the trial court did abuse its discretion by ruling that the Braverman testimony was inadmissible, our consideration of the statement in connection with the motion still would not preclude summary judgment for the defendants on the antitrust claim. In the statement, Braverman asserts that Mitchell told him that the Philadelphia area dealers did not want the Potamkins to have a franchise because they feared price competition. Yet, at his deposition, Braverman responded in the negative to questions regarding whether he knew if Mitchell had spoken to anyone at BMW NA and whether Mitchell knew if the Philadelphia dealers had spoken to anyone at BMW NA about the proposed sale. These negative answers suggest that Mitchell was relating nothing more than the grumbling he heard in his conversations at BMW dealerships. Brav-erman's testimony provides no hint that BMW NA acted other than unilaterally when it chose not to approve the sale of the Green dealership to the Potamkins. Nothing in what Braverman says Mitchell told him suggests that the dealers communicated demands to BMW NA or that BMW NA acquiesced in those demands or entered an agreement with the Philadelphia area dealers to keep out the Potamkins.6
I recognize, of course, that it is rare to find overt evidence of a conspiracy. I note as well that BMW NA may have been both slow and disingenuous in its handling of the Potamkins' application for the Philadelphia franchise. However, BMW NA’s failure to consider the Potamkin’s application in a prompt and scrupulous fashion does not constitute evidence of a conspiracy.
Beyond the evidentiary problems relating to concerted action, I believe the majority understates the four-year gap between the events surrounding BMW NA’s failure to award the Potamkins the Great Neck open point in 1981 and the failed attempts by the Potamkins to purchase dealerships in Manhattan and Philadelphia in the fall of 1985. I find the causal nexus between the 1981 actions and the events of 1985 too attenuated to support the existence of the alleged conspiracy. There is no evidentiary link showing that the alleged 1981 agreement between New York area dealers and BMW was reactivated to keep the Potamkins out of Manhattan in 1985. Even more apparent is the lack of any evidence which supports even an inference that the purported conspiracy from 1981 to deny the Potam-kins the Great Neck open point could have been reactivated in 1985 to deny them the Green dealership in Philadelphia. Previously, we have required of plaintiffs “proof of a causal relationship between competitor complaints” and the decision not to deal. Edward J. Sweeney & Sons, 637 F.2d at 111. Plaintiffs have failed to meet this same burden of proof here.
Moreover, the relevant literature suggests that the defendant had credible business reasons for rejecting the Potamkins’ dealership applications. BMW NA had an interest in protecting its reputation and the image it has attempted to develop as a high quality car distributor. In order to compete with other brands in the market for luxury automobiles, BMW NA had ample reason to want to insure that its products were offered with certain point-of-sale services. BMW NA could have feared that the introduction of a dealer who “sells at the factory gate” would lead its other dealers to lower the level of service they offered in order to compete better with the price-cutter and prevent the price-cutter from free riding on the services they provided.7 Finally, BMW NA may have acted in a desire to protect the investments its dealers had made in their own franchises. Had BMW NA’s rejection of the Potam-kins’ applications lacked a sensible economic justification, plaintiffs’ allegations of concerted action would be more compelling. *1389While the Potamkins assert that any business justification and, indeed, BMW NA’s claim of unilateral action is mere pretext, plaintiffs’ allegations must be better supported in the record to survive a motion for summary judgment.
I recognize that the Potamkins have not rested on their conclusory assertions of conspiracy in the face of BMW NA’s proffer of substantial evidence supporting plausible and legitimate explanations for its conduct. Instead, the Potamkins have gone further, as the majority relates, to challenge these explanations one by one. I find these challenges unavailing for two reasons. First, I am convinced we need not examine the plausible reasons put forward by the defendant when the circumstantial evidence relied on by the plaintiff does not support a conspiracy claim. Second, the mere fact that the Potamkins can question the business reasons advanced by BMW NA for not awarding the Potamkins any of the franchises does not, by itself, justify the inference that BMW NA’s conduct was therefore the result of a conspiracy. Even if a distributor, acting independently, gave inaccurate reasons for its decision not to award a franchise, whether because of a desire to avoid controversy or some other reason, its actions would not violate the antitrust laws absent a conspiracy. And Monsanto teaches us that such a conspiracy cannot be inferred from highly ambiguous evidence.
In my view, a rigorous application of the test set forth in Monsanto requires that we affirm the grant of summary judgment to BMW NA on the Potamkins’ Sherman Act § 1 claim. The majority resists the application of such a stringent test. Nevertheless, to the extent that the burden on a section 1 antitrust plaintiff to produce evidence supporting an inference of concerted action is a significant one, this is so because of the standard set forth in Monsanto.
Finally, I would also affirm the district court’s dismissal of the tortious interference with contract claim. Tortious interference with contract, or with prospective contract, requires intentional and improper conduct. Restatement (Second) of Torts §§ 766, 766B (1979). The only “intentional and improper” conduct charged by plaintiffs is in essence the antitrust conspiracy. Because I find that plaintiffs have not produced sufficient proof of such a conspiracy to avoid summary judgment on the antitrust claim, I conclude that they have also failed to demonstrate “intentional and improper” conduct on defendants’ part to meet their burden on the contract claim. Therefore, I believe that the district court properly granted summary judgment on the tortious interference claim.
Similarly, the Potamkins other claims rise and fall along with their antitrust claim. For this reason I would affirm the district court’s decision to dismiss the claims for common-law conspiracy, violation of New York’s Donnelly Act, and “unfair competition” under state law.
In sum, I join with the majority to affirm the district court’s decision denying summary judgment on the Potamkins’ claim under the Pennsylvania Board of Vehicles Act. However, as I would affirm the grant of summary judgment to BMW NA on the Potamkins’ Sherman Act § 1 claim and the closely related tortious interference claim as well as the dismissal of the interwoven pendant state law antitrust and unfair competition claims, I respectfully dissent from the balance of the majority’s opinion and judgment.

. The Potamkins had been long recognized for selling high volumes of automobiles at discount prices.

. The affidavit suggests that some dealers had complained to Cronin prior to the meeting and that others complained following the meeting. There is nothing to suggest a meeting of the minds followed by concerted action.

. Because I am looking at this evidence in the light most favorable to the Potamkins, I will not consider the credibility of this affidavit or of Hoffman’s responding affidavit, which denies Robert Potamkin’s allegations.

. * * * [one sentence deleted].

.I do not suggest that evidence of complaints has no probative value at all, but only that the burden remains on the antitrust plaintiff to introduce additional evidence sufficient to support a finding of unlawful contract, combination, or conspiracy. Monsanto, 465 U.S. at 764 n. 8, 104 S.Ct. at 1471 n. 8.

. In addition, I note that, while the majority opinion focuses on the dealer interactions with BMW NA, it overlooks the paucity of evidence showing that the dealers had conspired together to form an anticompetitive scheme.

. A review of the depositions and exhibits makes clear that both BMW and its dealers had reason to fear a price cutting Potamkin franchise. The Potamkins had built a huge retail business by selling cars in high volume at small markup over the prices paid to various manufacturers.