Court Opinion

ID: 9474651
Source: CourtListenerOpinion
Date Created: 2023-08-05 05:04:15.458541+00
Date Added: 2024-06-11T17:44:14.337946
License: Public Domain

BECKER, Circuit Judge,
concurring and dissenting:
I join in all of the majority’s opinion and judgment except for its disposition of the Sherman Act § 1 Buick franchise claim and the Automobile Dealers’ Day in Court Act GMC truck delivery claim. As to those matters, I respectfully dissent.
I. SHERMAN ACT § 1 CLAIM

(Buick franchise)

In my view the Sherman Act § 1 claims are controlled by Monsanto Co. v. Spray-Rite Service Corp., 465 U.S. 752, 104 S.Ct. 1464, 79 L.Ed.2d 775 (1984), which requires of plaintiffs “proof of a causal relationship between competitor complaints” and the decision not to deal. 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). Absent such concerted action, a “manufacturer of course ... has a right to deal, or refuse to deal, with whomever it likes____” Monsanto, 465 U.S. at 761, 104 S.Ct. at 1469. Moreover, and most importantly for this case, in order to resist a motion for summary judgment, the Section 1 plaintiff must at the very least introduce evidence that “tends to exclude the possibility that the [defendants] 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).
In its Buick franchise Section 1 claim, Arnold Pontiac alleges that General Motors’ decision not to provide it with a Buick franchise was the product of a conspiracy between General Motors and Pittsburgh-area Buick dealers. In support of its contention, it submits the minutes of a meeting of the Better Buy Buick Association during which association members urged Buick division representatives not to approve an additional Buick franchise for the Canonsburg-Houston, Pennsylvania area. While this meeting is evidence of an opportunity to conspire, standing alone it fails to satisfy plaintiffs’ evidentiary burden under the antitrust laws. Arnold Pontiac has also introduced evidence that General Motors communicated its decision not to award the Buick franchise after the “Better Buy” association meeting, albeit five months after. However, even the most favorable inference reasonably to be drawn from this evidence is not sufficient to suggest the existence of concerted action between General Motors and Pittsburgh-area Buick dealers concerning the denial of a Buick franchise to Arnold Pontiac. For, as I read the record, appellant, has not introduced evidence, required by Spray-Rite, that tends to exclude the possibility that General Motors had independent reasons for its decision.
The late Judge Abraham Freedman of this Court was fond of saying at decision conferences: “The way you come out in this case depends on how you go in.” See Larry Muko, Inc. v. Southwestern Pennsylvania Building and Construction *578Trades Council, et al., 609 F.2d 1368, 1377 (Aldisert, J., dissenting). The majority’s statement that “the sequence of events relative to the present action commenced in February, 1980, when Arnold initiated another round of discussions with GMC” is a striking example of the sagacity of Judge Freedman’s observation. By using the events commencing in February, 1980, as the calipers for its evaluation of the evidence, the majority is more easily able to conclude that the requirements of Spray-Rite have been met:
GMC’s position concerning the award of a Buick franchise to Arnold changed, it seems, only after it learned of the Association’s April 3, 1980 meeting, where the Pittsburgh Buick dealers indicated their disapproval of the placement of an additional Buick franchise in the CanonsburgHouston market and their intent not to cooperate with GMC if the franchise was awarded____
Majority at 574. What the majority ignores is the fact that “the sequence of events relative to the present action” commenced not in 1980 but in 1969, the year in which Arnold Pontiac first sought a Buick dealership, was first told it would have to modernize its facilities completely, and first refused to do so. Moreover, in the majority’s own words, at least from 1975 to 1979
GMC consistently informed Arnold that an application for a Buick franchise would be favorably considered only if he would agree to provide expanded, modernized facilities at a more desirable location. Notwithstanding his continued expressions of interest, at no time during this period did Arnold agree to undertake the requisite expansion, renovation and relocation within a period of time acceptable to GMC.
Majority at 569.
General Motors’ consistent rejection of Mr. Arnold’s franchise application was not surprising. Arnold Pontiac’s main dealership facility was built by Mr. Arnold’s father in the 1920’s and it “looked it.” It was not representative of a modern up to date G.M. dealer.” (Shane Memo of September 23, 1980), see majority at 571. Although General Motors had adopted a policy of requiring dealers to operate from attractive modern facilities along major arteries, Mr. Arnold consistently refused to expend the sums necessary for a major upgrade, instead instituting only cosmetic changes. Thus, a basis for independent action stands out like the proverbial sore thumb — Mr. Arnold’s continuing failure for well over a decade to provide facilities in accordance with General Motors’ uniform nationwide standards. Arnold Pontiac has not introduced evidence to exclude the possibility that General Motors had such independent reasons for its decision, and the majority’s artificial fracturing of what is a continuum not just of time but also of business relationship cannot alter that fact.1
The Spray-Rite test is an extremely rigorous one and has been the subject of much criticism, perhaps justified. But as long as it is the law it must be applied. In my view, its application here requires that the grant of summary judgment on the Sherman Act § 1 Buick franchise claims be affirmed.
II. AUTOMOBILE DEALERS’ DAY IN COURT ACT CLAIM (GMC Truck Delivery)
The majority correctly notes that in the absence of facts indicating a breach of the “good faith” duty imposed by the Automobile Dealers’ Day in Court Act (ADDCA), the district court may properly grant summary judgment for defendant. Majority at 577. Accord Fray Chevrolet Sales, Inc. v. General Motors Corp., 536 F.2d 683, 685 (6th Cir.1976); Salco Corp. v. General Motors Corp., 517 F.2d 567, 573 (10th Cir.1975); Berry Brothers Buick, Inc. v. General Motors Corp., 257 F.Supp. 542, 546 *579(E.D.Pa.1966), aff'd, 377 F.2d 552, 546 (3d Cir.1967). The majority also acknowledges that Arnold Pontiac has neither alleged nor offered evidence to suggest that General Motors’ dealings with Arnold Pontiac amounted to or were accompanied by “coercion or intimidation”, a requisite element of a breach of good faith as defined by the ADDCA. Majority at 577. Nevertheless, the majority reverses the district court’s grant of summary judgment on one of Arnold Pontiac’s ADDCA claims on the grounds that Arnold Pontiac has not had a full opportunity to elicit facts in support of its allegations of unfair or discriminatory deliveries of GMC Trucks. I disagree with this reversal, for I believe that Arnold Pontiac has failed even to allege facts that, if proven true, would support its ADDCA claim. I believe, therefore, that the district court’s grant of summary judgment was proper and must be affirmed.
The AADCA, 15 U.S.C. §§ 1221-25 (1982), requires automobile manufacturers to deal in “good faith” with their dealers and defines “good faith” as “the duty of each party to any franchise, ... to act in a fair and equitable manner toward each other so as to guarantee the one party freedom from coercion, intimidation, or threats of coercion or intimidation from the other party....” 15 U.S.C. § 1221(e). The Act does not protect dealers against all unfair practices, but only against those “evidenced by acts of coercion or intimidation.” Salco Corp. v. General Motors Corp., 517 F.2d at 573. The caselaw plainly requires actual coercion or intimidation as an element of an AADCA claim. Bob Maxfield, Inc. v. American Motors Corp., 637 F.2d 1033, 1038 (5th Cir.), cert. denied, 454 U.S. 860, 102 S.Ct. 315, 70 L.Ed.2d 158 (1981). Consequently, it is well established that the duty of “good faith” dealing imposed by the Act must be given a narrow, rather than expansive, construction. Autohaus Brugger Inc. v. Saab Motors, Inc., 567 F.2d 901, 911 (9th Cir.), cert. denied, 436 U.S. 946, 98 S.Ct. 2848, 56 L.Ed.2d 787 (1978); Milos v. Ford Motor Co., 317 F.2d 712, 715-16 (3d Cir.), cert. denied, 375 U.S. 896, 84 S.Ct. 172, 11 L.Ed.2d 125 (1963). Assessing the elements of a claim under § 1221(e), for example, the Ninth Circuit noted that
[tjhere is no question that the failure to exercise good faith within the meaning of the Act has a limited and restricted meaning. It is not to be construed liberally____ It does not mean “good faith” in a hazy or general way, nor does it mean unfairness. The existence or nonexistence of “good faith” must be determined in the context of actual or threatened coercion or intimidation.
Autohaus Brugger v. Saab Motors, Inc., 567 F.2d at 911 (citations omitted).
The majority’s suggestions that additional discovery concerning General Motor’s deliveries of GMC trucks might produce sufficient facts to support a cognizable claim of “coercion” improperly relies on an expansive construction of § 1221(e). The Act expressly exempts “recommendation, endorsement, exposition, persuasion, urging or argument” from its prohibitions, 15 U.S.C. § 1221(e); instead, coercion or intimidation under the Act “must include a wrongful demand which will result in sanctions if not complied with.” Autohaus Brugger, Inc. v. Saab Motors, Inc., 567 F.2d at 911; see also H.C. Blackwell Co., Inc. v. Kenworth Truck Co., 620 F.2d 104, 106-07 (5th Cir.1980); Rea v. Ford Motor Company, 497 F.2d 577, 585 (3d Cir.), cert. denied, 419 U.S. 868, 95 S.Ct. 126, 42 L.Ed.2d 106 (1974). Evidence of arbitrary conduct, or even of conduct which in other contexts would constitute “bad faith,” will not support a claim for recovery under the ADDCA absent evidence of a wrongful demand backed by a threat of sanctions. Bob Maxfield, Inc. v. American Motors Corp., 637 F.2d at 1039; H.C. Blackwell Company, Inc. v. Kenworth Truck Co., 620 F.2d at 107.
Arnold Pontiac has not alleged that General Motors’ “discrimination” in the delivery of GMC Trucks was ever accompanied by any “demand” — wrongful or otherwise. Nor has Arnold Pontiac alleged that General Motors’ “discrimination” in the delivery *580of trucks constituted a “sanction” for failure to accede to some wrongful demand. Most importantly for this appeal, the course of discovery which Arnold Pontiac contends was improperly curtailed by summary judgment did not concern these elements of “wrongful demand” or “sanction”. Thus, even if Arnold Pontiac had been allowed to proceed with discovery and had established its allegations concerning General Motors’ delivery of GMC Trucks, it still would not have advanced a claim cognizable under the ADDCA.
The majority’s suggestion that additional discovery concerning General Motors’ deliveries of GMC Trucks might produce sufficient facts to support a cognizable claim of coercion is unfounded. The legal insufficiency of Arnold Pontiac’s claim of discriminatory truck deliveries is particularly well established. Because “there is no statutory right or formula for allocation or delivery of certain cars,” Sink v. Ford Motor Co., 549 F.Supp. 245, 248 (E.D.Mich.1982), the mere misallocation of vehicles is not actionable under the Act. Sherman v. British Leyland Motors, Ltd., 601 F.2d 429, 445 n. 28 (9th Cir.1979); Southern Rambler Sales, Inc. v. American Motors Corp., 375 F.2d 932, 935 (D.C.Cir.), cert. denied, 389 U.S. 832, 88 S.Ct. 105, 19 L.Ed.2d 92 (1967); Cecil Corley Motor Co. v. General Motors Corp., 380 F.Supp. 819, 844-48 (M.D.Tenn.1974). In sum, the coercion argument that the majority discerns in Arnold Pontiac’s brief and oral argument is simply not sufficient to state a claim under the Automobile Dealers’ Day in Court Act.2
Arnold Pontiac argues that the district court’s July 24, 1985 order denying its request for the production of order forms signed by individual dealers in the Pittsburgh GMC Zone “effectively terminated” its discrimination delivery claim under the ADDCA. Because it is clear that even if the documents Arnold Pontiac requested had been produced, the information derived therefrom could not have established Arnold Pontiac’s claims, the district court did not err by granting General Motors’ motion *581for summary judgment before granting Arnold Pontiac’s discovery motion. One of the purposes of summary disposition is to protect litigants against expensive and time-consuming discovery in pursuit of meritless claims. Lupia v. Stella D’Oro Biscuit Company, Inc., 586 F.2d 1168, 1167 (7th Cir.1978), cert. denied, 440 U.S. 982, 99 S.Ct. 1791, 60 L.Ed.2d 242 (1979); Bogosian v. Gulf Oil Corp., 561 F.2d 434, 457 (3d Cir.1977) (Aldisert, J., dissenting), cert. denied, 434 U.S. 1086, 98 S.Ct. 1280, 55 L.Ed.2d 791 (1978). Although in reviewing a grant of summary judgment an appellate court is “required to respect all inferences that reasonably can be drawn from the facts, ... [it] cannot ignore uncontested facts that render inferences unreasonable, or ... fantastic.” Raskiewicz v. Town of New Boston, 754 F.2d 38, 45 (1st Cir.), cert. denied, — U.S. —, 106 S.Ct. 135, 88 L.Ed.2d 111 (1985). Thus there was no abuse of discretion in the district court’s denial of further discovery and no error in its entry of summary judgment for General Motors in light of the “facial insubstantiality” of Arnold Pontiac’s claims. Id. n. 7. See also Fowkes v. Dravo Corp., 7 F.R.D. 291 (E.D.Pa.1947) (a district court may deny motion to compel further deposition testimony when the court determines that the questions are irrelevant).
III. CONCLUSION
For the foregoing reasons, I would affirm the district court’s orders granting summary judgment on the Sherman Act § 1 claim and the Automobile Dealer Day in Court Act claim as well as its order denying the motion to compel production of documents and answers to interrogatories.

. The fact that GMC continued to talk with Arnold and provided him with Buick order forms cannot possibly be grounds for a different conclusion. Those actions gave rise to no reasonable expectation of anything, as the majority makes clear in disposing of the contract claim. See majority at 572-73.

. The only reported case recognizing a cause of action based on a similar theory is Zarbock v. Chrysler Corporation, 235 F.Supp. 130 (D.Colo.1964). The Zarbock court, in dicta, stated that
[t]hreats and coercion may be subtle. But the cases clearly establish that the burden of proving bad faith is a high one under the Act. Each detrimental action taken by the manufacturer against the dealer should be considered in assessing bad faith. It seems, however, that the sum total of actions must fit together into some consistent pattern which may be construed as outright, or implied, coercion or intimidation.
There seems no question that if plaintiff were singled out for repeated, excessive, and unexplainable delayed shipments, he might possibly sustain a cause of action under the Act.
Id. at 133-34. The Zarbock court held, however, that the evidence of numerous delays in the defendant manufacturer’s delivery of automobiles did not establish the requisite coercion or intimidation for recovery under the Act. Id. at 134.
The majority’s reliance on David R. McGeorge Car Co., Inc. v. Leyland Motor Sales, Inc., 504 F.2d 52 (4th Cir.1974), is misplaced. See majority at 576. The McGeorge court held that a distributor’s "short" allocation of Triumph automobiles constituted "bad faith dealing for purposes of the Act." Id. at 56. McGeorge, however, does not support the majority’s proposition that the mere misallocations of automobiles in the absence of a wrongful demand or threat of sanction can provide a basis for recovery under the FDCA.
These requisite elements of "coercion” were clearly and actually present in McGeorge. There, the defendant distributor provided its dealers “with a proposal that in order to continue selling Triumphs they should begin selling Rovers and Land Rovers.” Id. at 54. When the plaintiff dealers refused to stock the additional automobile lines, the distributor "began cutting [the dealer’s] supply of Triumphs in an attempt to persuade it to reconsider the Rover and Land Rover proposal.” Id. Thus, the discriminatory allocation of automobiles in McGeorge was cognizable under the Act because it constituted a sanction imposed by the distributor in response to the dealer’s failure to accede to a wrongful demand.
Finally, the majority's difficulty in determining whether summary judgment was proper in the absence of a statement of reasons by the district court does not compel remand of this case. In reviewing the disposition of a motion for summary judgment, the appellate court reviews the same record as the district court and is required to apply the same test that should have been used initially by the district court under Fed.R.Civ.P. 56(c). Goodman v. Mead Johnson & Co., 534 F.2d 566, 573 (3d Cir.1976), cert. denied, 429 U.S. 1038, 97 S.Ct. 732, 50 L.Ed.2d 748 (1977).