Boshes v. General Motors Corp.

59 F.R.D. 589, 17 Fed. R. Serv. 2d 296, 1973 U.S. Dist. LEXIS 13774, 1973 Trade Cas. (CCH) 74,483
CourtDistrict Court, N.D. Illinois
DecidedMay 3, 1973
DocketNo. 68 C 1454
StatusPublished
Cited by22 cases

This text of 59 F.R.D. 589 (Boshes v. General Motors Corp.) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Boshes v. General Motors Corp., 59 F.R.D. 589, 17 Fed. R. Serv. 2d 296, 1973 U.S. Dist. LEXIS 13774, 1973 Trade Cas. (CCH) 74,483 (N.D. Ill. 1973).

Opinion

MEMORANDUM OPINION

DECKER, District Judge.

Plaintiffs, Roger Boshes, Esther K. Roerig, Curtis Collum, Frank Jackson and James Taylor, filed this private an[590]*590titrust action on ibehalf of themselves and “all those similarly situated” against General Motors Corporation (“GM”), described in the complaint as the “colossus of the giant automobile industry”, seeking treble damages for alleged violations of the federal antitrust laws, including combining and conspiring to monopolize and fix prices on the passenger automobile line of commerce in the United States market. See, 15 U.S.C. § 15. Plaintiffs allege that between the years 1965 and 1968 each purchased a new automobile manufactured by one of the manufacturing divisions of GM, specifically the Chevrolet and Buick Divisions. They claim that a portion of the price they paid was an illegal overcharge attributable to GM’s alleged antitrust law violations.

The 22-page complaint, with approximately 40 pages of detailed exhibits attached,1 sets forth the financial status of each of the leading automobile manufacturers in the United States and outlines the development of GM as a corporate entity from 1916 to the present. According to the complaint, during the period 1964-1967 GM had net sales in excess of 77 billion dollars and manufactured more than half of the passenger automobiles produced in the United States. Its customers number “in the millions”, and plaintiffs claim that during the four years prior to the filing of the complaint more than 17 million GM automobiles were purchased. The complaint further states that the acquisition and operation of what are now the Buick, Cadillac, Chevrolet, Pontiac and Oldsmobile Divisions of GM resulted in a combination and conspiracy among the Divisions to set wholesale prices on all competing lines of GM and to formulate “prices, pricing policies and procedures for all the passenger automobiles manufactured and sold by the Divisions” as a matter of central management policy at GM. The damages sought should be measured, according to plaintiffs:

“25. The tortious setting of prices as aforesaid which has gone on continuously for many years prior to the four-year limitations period and which still goes on precludes, by the defendant, General Motors’ own wrong, a precise ascertainment or computation of the amount of damages sustained by the plaintiffs and the class they undertake to and do represent, by the conduct of defendant, General Motors, forbidden in the anti-trust laws. The defendant, General Motors, has been unjustly enriched by its said conduct. It would be against public policy to permit the defendant, General Motors, to retain the fruits of its illegality. These fruits are the excess profits which it has collected and retained, and continues and will continue to collect and retain on account of its said illegal conduct. These excess profits should be measured in the alternative, (a) by the excess in percentage of profit on defendant, General Motors’ sales over the average such profit on sales by manufacturing enterprises in the United States during the periods covered by this suit, as shown by the statistics of the United States Department of Commerce, or (b) the excess in such percentage of defendant General Motors’ profits on sales, over the percentage of profit on sales earned by Ford Motor Co., the closest and most comparable competitor of the defendant General Motors in the passenger automobile market in the United States during said periods, or (c) such other measure of damages as may be appropriate.
“Under any of the alternatives.(a), (b) or (c) the amount of excess profits, unjust enrichment and illegal gain [591]*591of the defendant General Motors exceeds one billion dollars for each of the four years preceding the filing of this complaint, and appears likely to continue in the same or a larger annual amount.”

More than two years after the original complaint was filed, plaintiffs filed an extensive document with multiple exhibits entitled “Amendment No. 1 to Complaint”. The amendment states that from 1929 to the present GM and certain “wholly owned and/or controlled subsidiary corporations” conspired and combined to fix retail prices and the terms of sale on GM automobiles as well as to monopolize and allocate the business of selling said automobiles under an arrangement known as the “Motors Holding Plan”. The “Motors Holding Plan” is a means by which GM has organized and financed retail dealers over the years since 1929 in the United States. The amendment alleges that “[Of] the 12,500+ present General Motors retail dealers, approximately 1600 have acquired and paid for their dealerships under the Motors Holding Plan, and approximately 500 are now being financed under the Plan.” There is no allegation as to whether or not any of the named plaintiffs purchased an automobile from any of the Holding Plan dealers. Essentially, the amendment to the complaint charges that by reason of the Motors Holding Plan and certain- “Option”, “Bonus”, and “Dealer Selling” agreements, the GM financed dealers are “not free to reduce the prices at which the dealership sells its automobiles” because such dealers must make enough profit to retire their financing debt. It is further claimed that as a result of the financial pressure on GM financed dealers to keep their profits high, other GM dealers have maintained artificially high prices, especially since Holding Plan dealers must, at least under the selling agreement, remain in a certain location while the agreement is in force.2 A conspiracy to fix prices between GM and the Holding Plan dealers, which are characterized as GM subsidiaries, is also alleged. All of the foregoing, in plaintiffs’ view, is a per se violation of the antitrust laws.

This case was originally assigned to then Chief Judge William J. Campbell and was received from his calendar when Judge Campbell relinquished his cases after having assumed senior status. On December 11, 1970, Judge Campbell dismissed the complaint insofar as it alleged liability for intra-corpo-rate conspiracy, but denied a motion to dismiss the amended complaint on July 8, 1971. Hence, the complaint, in its amended form and absent allegations of intracorporate conspiracy, still stands, although it is not exactly clear what that amounts to from the standpoint of legal sufficiency. Defendant has now moved that the complaint be dismissed on the ground that plaintiffs lack standing to sue.3 Plaintiffs, in turn, have moved that this action be certified as a class action under Rule 23, Federal Rules of Civil Procedure. The motions will be treated separately herein.

Before considering the legal issues raised by the motions, a brief caveat is necessary.- First, because defendant’s motion to dismiss is based on the pleadings as they stand, the allegations of the complaint are assumed to be true. The [592]*592court intends, at least at this point, to adopt the previous rulings of Judge Campbell and assume that some viable, albeit amorphous, antitrust claims are stated in the complaint as it stands. Therefore, in spite of the somewhat confusing and dubious substantive posture of this lawsuit, consideration of the legal question of standing must proceed on the assumption that plaintiffs could prove some antitrust violation resulting in an overcharge to some person or legal entity.

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59 F.R.D. 589, 17 Fed. R. Serv. 2d 296, 1973 U.S. Dist. LEXIS 13774, 1973 Trade Cas. (CCH) 74,483, Counsel Stack Legal Research, https://law.counselstack.com/opinion/boshes-v-general-motors-corp-ilnd-1973.