Associated Radio Service Co. v. Page Airways, Inc.

414 F. Supp. 1088
CourtDistrict Court, N.D. Texas
DecidedJune 10, 1976
DocketCiv. A. 3-7838-F
StatusPublished
Cited by21 cases

This text of 414 F. Supp. 1088 (Associated Radio Service Co. v. Page Airways, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Associated Radio Service Co. v. Page Airways, Inc., 414 F. Supp. 1088 (N.D. Tex. 1976).

Opinion

MEMORANDUM ORDER

ROBERT W. PORTER, District Judge.

I. NATURE OF THE CONTROVERSY

Associated Radio Service Company (Service) and Associated Radio Company (Radio) bring suit against Page Airways, Page Gulfstream, Douglas Juston, Ross C. Chapin and Edwin C. Hamilton alleging violations of the Sherman Act, Sections 1 and 2 [15 U.S.C. §§ 1, 2]. Radio Company purchases for resale avionic equipment to be used on corporate or private aircraft. Service Company designs and installs avionic systems and custom interiors for corporate and private aircraft purchasing its supplies from Radio Company.

In 1968, Service Company expanded its operations to San Antonio, Texas, and entered into an agreement with Defendant Page Airways, whereby Service Company would design, and offer for sale and installation avionic equipment to prospective purchasers of Gruman Gulfstream aircraft concurrently with the sales efforts made by Page Airways to sell the unoutfitted aircraft. Plaintiffs allege, that in June, 1972, Defendants Page Airways and Page Gulf-stream notified Service Company that they *1090 were terminating their agreement with Service Company effective June 20, 1973 and that Defendants made a determination to begin their own avionic design and installation operations in San Antonio, Texas.

Plaintiffs further assert that about this time Defendants entered into an unlawful conspiracy to take control of Plaintiffs’ business in San Antonio, Texas and to eliminate Plaintiffs as significant competitors in the interstate business of designing, marketing and installing avionic equipment in corporate and private aircraft. In furtherance of that conspiracy, Defendants are alleged to have committed the following wrongful and unlawful acts: enticing away Service Company’s employees; causing and permitting the taking and destruction of Service Company’s records and documents; causing and permitting Service Company’s employees to withhold information from Plaintiff, causing and permitting the employees of Service Company to copy proprietary information for use by Defendants; causing and permitting the taking of equipment and records of Associated Page Interiors (API) [a company belonging in part to Service Company]; interfering with Plaintiff Service Company’s mechanic’s lien by obtaining an injunction from state court in San Antonio, Texas; refusing to pay Service Company that which it was owed; filing a spurious interpleader action; slandering Plaintiffs’ credit; and causing API to vacate the lease in San Antonio and to fail to pay a debt owed to Service Company. Plaintiffs seek damages in excess of one million dollars for those acts which are alleged to be in violation of the antitrust laws of the United States.

Defendants, on March 16, 1976, moved to dismiss, or for summary judgment, and to stay the present proceedings. Further arguments are also made that in the event this Court decides this case against Defendants that certain questions be certified for appeal pursuant to Title 28 U.S.C. § 1292(b). Defendants’ motions are directed at four distinct issues. First it is argued that this court has no jurisdiction under Section One of the Sherman Act since the simple allegation of tortious conduct without a coincident allegation of “public injury” — anticompetitive effect in this case — contained in Plaintiffs’ Complaint does not rise to the level of a Section One violation. Defendant also moves to dismiss all allegations based upon Section Two of the Sherman Act asserting that Plaintiffs have failed to allege any product or geographic market in which Defendants can properly be said to be “monopolizing” within the meaning of Section Two. Further, attacks are made by Defendants on Plaintiff Radio Company’s standing to complain of antitrust violations which are alleged to have been directed at its subsidiary, Service Company. Finally, Defendants argue that antitrust allegations based upon Defendants’ institution of legal proceedings in San Antonio state court should be dismissed under the Noerr-Pennington Doctrine.

For reasons set forth below the following decisions are reached with respect to each position advanced by Defendants.

1. Plaintiffs’ have failed to plead a claim under Section One, although Plaintiffs may replead within 15 days of this order and must ultimately prove either that the particular conduct alleged in this case unreasonably restrains competition or, if Plaintiff wishes this Court to apply a per se analysis, that the alleged conduct is in general so anticompetitive that this Court would be correct in drawing an inference from it that anticompetitive effects will occur in most circumstances when such behavior recurs;
2. Defendants’ Section Two motion to dismiss is held in abeyance until Plaintiffs submit to this Court within 15 days of entry of this order a detailed partial pre-trial order outlining each element of a Section Two violation which Plaintiffs will seek to prove, along with a resume of facts which will prove each element;
3. This Court will also hold Defendants’ standing motion in abeyance until further clarification of this area by the Fifth Circuit which is expected to rule on *1091 a similar matter before the end of August, 1976. 1
4. Defendants’ Motions to Dismiss based upon the Noerr-Pennington Doctrine are overruled.
5. No question will be certified for appeal pursuant to Title 28 U.S.C. 1292(b).

II. PICK-BARTH AND PROGENY

The question clearly presented by Defendants’ Motion to Dismiss Plaintiffs’ Section One claim is whether wrongful and unlawful conduct when coupled with a subjective intent to destroy a competitor violates Section One of the Sherman Act without further inquiry into the economic impact of such behavior. In antitrust argot the question is whether such behavior and intent are per se violations of the Sherman Act. Plaintiffs argue that a line of cases beginning with Albert Pick-Barth Co. v. Mitchell Woodbury, 57 F.2d 96 (1st Cir. 1932) (hereinafter referred to as Pick-Barth) properly characterize such actions and intent as per se violations of Section One. In Pick-Barth the Plaintiff alleged that the Defendant hired away key employees who took plaintiff’s customer lists as well as other data and that all those actions were used to destroy plaintiff’s business. The Defendant demurred and the district court held that “no offense under the anti-trust laws, in that there was no allegation of an unreasonable restraint of interstate commerce.” Id. at 98. On appeal the First Circuit, in reversing the lower court, held that the complaint was sufficient to state a cause of action. After trial the Defendant appealed for a second time to the First Circuit urging that a per se

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414 F. Supp. 1088, Counsel Stack Legal Research, https://law.counselstack.com/opinion/associated-radio-service-co-v-page-airways-inc-txnd-1976.