Bresler & Reiner, Inc. v. Holiday Inns, Inc.

73 F.R.D. 684, 1977 U.S. Dist. LEXIS 17120
CourtDistrict Court, E.D. Pennsylvania
DecidedMarch 2, 1977
DocketCiv. A. No. 75-1618
StatusPublished

This text of 73 F.R.D. 684 (Bresler & Reiner, Inc. v. Holiday Inns, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bresler & Reiner, Inc. v. Holiday Inns, Inc., 73 F.R.D. 684, 1977 U.S. Dist. LEXIS 17120 (E.D. Pa. 1977).

Opinion

MEMORANDUM

GORBEY, District Judge.

Plaintiffs have filed a motion for a partial summary judgment on the issue of liability for the relief set forth in paragraph 1 and 2 of the prayer for relief in their complaint. The basis of the motion is that the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits, demonstrate the absence of a genuine issue as to any material fact pertaining to such liability, and that plaintiffs are entitled to a judgment as a matter of law with respect thereto.

Plaintiffs assert that under the judgment of Judge Garth on “virtually identical facts” in the case of American Motor Inns, Inc. v. Holiday Inns, Inc., D.C., 356 F.Supp. 1073 (1973), there is no genuine issue of fact with respect to the allegations of their complaint and the prayers for relief on which the motion is based. Plaintiffs state at page 3 of their brief in support of the motion that:

“This Motion rests solely on the portion of Judge Garth’s judgment and opinion in the AMI case which rules that the conduct of the defendant Holiday Inns, Inc. (hereinafter “HI”) constituted a combination or conspiracy with others which effected a horizontal restraint of trade in violation of Section 1 of the Sherman Act. This ruling was expressly affirmed by the Court of Appeals for the Third Circuit in American Motor Inns, Inc. vs. Holiday Inns, Inc. Appellant and International Association of Holiday Inns, Inter-venor-Defendant, 521 F.2d 1230 (1975). (The Court of Appeals reversed and remanded portions of Judge Garth’s judgment on other issues in the AMI case [686]*686which are not relevant to the present Motion.)”

Defendant naturally opposes the motion, pointing out at page 8 of its brief that:

“The plaintiffs’ motion for partial summary judgment presents only one narrow question:
Are the plaintiffs entitled to a judgment as a matter of law on the issue of whether the plaintiffs were denied a Holiday Inn franchise in Reading as a result of a local conspiracy between Holiday Inns and its franchisees?...”

Defendant points out at pages 16, 17 and 18 of its brief that the plaintiffs’ complaint was filed just prior to the Third Circuit Court of Appeals’ decision, and therefore, drafted clearly in reliance on the district court’s opinion. Consequently, it is urged, as a result of the appeal, only two of the district court’s findings were left standing; “i. e., that a local conspiracy existed ‘with respect to the application for a franchise at Newark airport’ and that ‘the combination of the company-town policy and the non-Holiday Inn clause constituted an unreasonable restraint of trade.’ ” The second finding is conceded by the plaintiffs to be inapplicable to the facts underlying their claim in the instant case. Page 8, Plaintiffs’ Brief.

There are substantial factual differences between the AMI case and the instant one. In the AMI case, as a result of sending out, in conformity with its policy radius letters, objections to the granting of the requested franchise were received, followed thereafter by a rejection of the application. On the basis of the evidence produced at a trial, the district court concluded that the denial was the result of a local conspiracy.

In affirming that finding it is quite significant that the Circuit Court of Appeals stated:

“[ajlthough the trial court here might have been justified if he had concluded that HI had acted autonomously in rejecting AMI’s application, . . . ”

521 F.2d at 1244.

“. . we cannot say that the trial judge’s findings of fact [that Holiday Inns conspired with others] are clearly erroneous . . . ”

Id. at 1242.

In the instant case, as a result of the “radius letters” which informed the recipients that two applications for a franchise in downtown Reading had been received, one by the plaintiffs herein on July 8, 1971, to be located at Penn and 8th Street, and the other by American Motor Inns on June 28, 1971, to be located at Penn and 2nd Avenue North, only a few blocks apart. It is to be noted that American Motor Inns already had a Holiday Inn franchise operation in a distant part of Reading.

In response to the. radius letters, Holiday Inn of Ephrata, Pennsylvania, after pointing out that both of the proposed locations were “a short 11 to 15 minutes from our Holiday Inn in Ephrata” objected strongly to the granting of either application because “it is my feeling that our property as it now stands, has a very serious survival problem under present conditions, let alone any additional competition from within our own chain.” Exhibit K, Defendant’s Brief.

The minutes of Holiday Inns, Inc.’s Franchise Committee meeting of July 30, 1971, recites that objection was also made in behalf of the Holiday Inn of Pottstown, Pennsylvania. Defendant’s Brief, Exhibit E.

Of particular significance is the response of American Motor Inns, which as previously pointed out, already operated a Holiday Inn in Reading. It states:
“I received your letter notifying me of an application for a franchise for Reading, Pennsylvania, at Eighth & Penn Streets by Bresler & Reiner, Inc. We have purchased a piece of land from the same Urban Renewal only a few blocks away on the same street from this site and we have submitted an application for a franchise .
“These people have been in touch with me to see if we would be their tenants. Needless to say, it would be ridiculous to have two Holiday Inns this close together in a town such as Reading. Naturally, I [687]*687am opposed to the granting of this franchise.
“I trust that the franchise application that is under consideration by our company will be favorably acted upon.” Defendant’s Brief, Exhibit K.

Thus, it is to be observed that the objections by the Holiday Inns of Ephrata and Pottstown were not effective as vetoes inasmuch as a Holiday Inn franchise was granted to American Motor Inns for the downtown Reading location. This, of itself, distinguishes the case from the Newark, New Jersey case relied upon by plaintiffs where the objections received as a result of the radius letters, were permitted by Holiday Inns, Inc., to operate as a “veto of sorts” leading the court, on the basis of all the evidence, to a conclusion of a “local conspiracy” in Newark.

Reference must now be made to a conclusion reached by plaintiffs with respect to the aforementioned facts, as found in plaintiffs’ brief, pp. 9-10:

“As a result of an objection by AMI, which was operating a Holiday Inn in Reading and was applying for another Holiday Inn license some six blocks from the site in B & R’s application, HI rejected B & R’s application because it would create competition with AMI’s existing and proposed Holiday Inns in Reading.” See also page 14 of Plaintiffs’ Brief.

Exhibit “K” of defendant’s brief, previously set out therein verbatim, clearly establishes the inaccuracy of plaintiffs’ conclusion. That Exhibit shows that AMI did not object to the granting of a franchise because it would create competition with its existing Inn.

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73 F.R.D. 684, 1977 U.S. Dist. LEXIS 17120, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bresler-reiner-inc-v-holiday-inns-inc-paed-1977.