Barnes v. Arden Mayfair, Inc.

759 F.2d 676
CourtCourt of Appeals for the Ninth Circuit
DecidedApril 15, 1985
DocketNo. 84-3621
StatusPublished
Cited by92 cases

This text of 759 F.2d 676 (Barnes v. Arden Mayfair, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Barnes v. Arden Mayfair, Inc., 759 F.2d 676 (9th Cir. 1985).

Opinion

WALLACE, Circuit Judge:

This is an appeal from an order granting defendant Sea-Land Service, Inc.’s (Sea-Land) motion for summary judgment. Barnes is the trustee in bankruptcy for plaintiffs Sterile Food Products (Sterile) and Stayfresh Food Products (Stayfresh). They commenced this antitrust action in 1975 against various Alaska dairies (dairies) and Sea-Land, a carrier shipping the dairies’ and Sterile’s products to Alaska. The complaint alleged the destruction of Sterile’s and Stayfresh’s businesses through various unlawful conspiratorial practices in violation of sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2, and the Clayton Act, id. § 14, as well as numerous pendent state law claims. The dairies entered pleas of nolo contendere in related criminal indictments and reached settlements with Sterile and Stayfresh prior to or shortly after the granting of Sea-Land’s individual motion for summary judgment. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.

I

Sterile developed new methods of pasteurizing and packaging milk which dramatically enhanced its shelf life. Milk which had undergone this process was labeled “sterilized,” and in the new packaging it could be kept unrefrigerated for periods of ten to twelve weeks. This product was ideally suited for the distant Alaska market. Sterile formed Stayfresh in 1972 to service Alaska, but both companies soon filed for bankruptcy.

During this period the dairies undertook various anti-competitive tactics to keep Stayfresh out of the Alaskan market. The complaint against Sea-Land alleges that the dairies enlisted Sea-Land’s aid in a conspiracy to keep Sterile’s product out of Alaska by manipulating the tariffs Sea-Land [679]*679charged for shipping sterilized milk to Alaska. It was also alleged that a Sea-Land employee discouraged a potential purchaser of a Stayfresh distributorship from entering into an agreement with Stayfresh in furtherance of the conspiracy’s goals.

Goods are shipped under one of two categories of tariffs: a broad class tariff or a specific commodity tariff. The cost of shipping is generally higher under the class tariff. Sterile originally shipped its goods directly under a class rate for milk products requiring refrigeration because there was no special commodity rate for its unique product at that time. It later began shipping indirectly through freight consolidators who shipped the goods under a special commodity tariff for grocery items (Item 850), which specifically included “milk, canned, flaked or powdered,” but the definition did not include sterilized milk in paper cartons. This rate was approximately one-half the class rate. Sea-Land later determined that the Item 850 rate was not proper under applicable Interstate Commerce Commission (ICC) rules, and recovered charges from the indirect shippers.

Sterile then requested Sea-Land to issue a specific commodity tariff for its unique product; Sea-Land granted this request, which resulted in a new classification (Item 1345). Subsequently, Ben Nolan, an employee of one of the dairies, complained on numerous occasions to Sea-Land that this new rate was not cost-justified and gave Sterile an unfair advantage over the rates charged for his employer’s bulk milk shipments. After reviewing its tariff schedule, Sea-Land expanded Item 1345’s coverage to include certain bulk milk shipments. Although Nolan continued to complain that this was unsatisfactory, Sea-Land made no further changes in its tariffs.

II

Sea-Land initially argues that the district court lacked jurisdiction over the claim that it conspired to illegally set its tariffs, citing Keogh v. Chicago & Northwestern Railway, 260 U.S. 156, 43 S.Ct. 47, 67 L.Ed. 183 (1922) {Keogh). In Keogh, the Court held that an action for damages consisting of the difference between rates set illegally by a conspiracy and the rates that would have been set absent a conspiracy was barred because plaintiff’s sole remedy was an action before the ICC. See id. at 163, 43 S.Ct. at 49. Keogh did not, however, hold that carriers are immune from all antitrust actions, only those for which relief may be sought readily from the regulatory agency. Id. There is no per se exemption for activities of carriers beyond the control of the agency. See Georgia v. Pennsylvania Railroad, 324 U.S. 439, 455-57, 65 S.Ct. 716, 725-26, 89 L.Ed. 1051 (1945); see also Pan American World Airways v. United States, 371 U.S. 296, 313 & n. 19, 83 S.Ct. 476, 486 & n. 19, 9 L.Ed.2d 325 (1963). An action is barred only if it is plainly repugnant to the regulatory scheme established by statute. Carnation Co. v. Pacific Westbound Conference, 383 U.S. 213, 217-18, 86 S.Ct. 781, 784, 15 L.Ed.2d 709, modified, 383 U.S. 932, 86 S.Ct. 781, 15 L.Ed.2d 709 (1966).

Sterile and Stayfresh do not seek damages solely for an illegally-set price, as did the plaintiffs in Keogh. Rather, they claim a conspiracy to destroy their businesses through a broad range of anticompetitive behavior. The district court observed that Sterile and Stayfresh did not allege merely that illegal rates were set, but in addition that Sea-Land undertook further alleged anticompetitive acts by attempting to prevent a prospective distributor from entering into an agreement with Stayfresh. Because such activities would be beyond the scope of the ICC’s jurisdiction, the antitrust action was not subject to dismissal on this ground.

Ill

It has not always been clear whether antitrust litigation must be treated with special rules when ruling upon a motion for summary judgment. The Supreme Court has cautioned us “that summary procedures should be used sparingly in complex antitrust litigation where motive and intent play leading roles, the proof is largely in [680]*680the hands of the alleged conspirators, and hostile witnesses thicken the plot.” Poller v. Columbia Broadcasting System, 368 U.S. 464, 473, 82 S.Ct. 486, 491, 7 L.Ed.2d 458 (1962) (Poller) (footnote omitted). This language, however, cannot be interpreted either to mean that summary judgment motions should not be granted or that summary judgment motions even should be restrained in all antitrust cases as a class. The language merely teaches caution. Recognizing the limited nature of this cautionary instruction, we have stated that “if there is no genuine issue of material fact, and if the resisting party does not present a record sufficient to support a reasonable finding in his favor, a district court has a duty to grant the motion for summary judgment.” Filco v. Amana Refrigeration, Inc., 709 F.2d 1257,1260 (9th Cir.), cert. dismissed, — U.S. -, 104 S.Ct. 385, 78 L.Ed.2d 331 (1983) (Filco). See also Cascade Cabinet Co. v. Western Cabinet & Millwork Inc.,

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Bluebook (online)
759 F.2d 676, Counsel Stack Legal Research, https://law.counselstack.com/opinion/barnes-v-arden-mayfair-inc-ca9-1985.