Capital Ford Truck Sales, Inc. v. Ford Motor Co.

819 F. Supp. 1555, 1992 U.S. Dist. LEXIS 21631, 1992 WL 470695
CourtDistrict Court, N.D. Georgia
DecidedMarch 31, 1992
DocketCiv. 1:90-cv-507-ODE
StatusPublished
Cited by16 cases

This text of 819 F. Supp. 1555 (Capital Ford Truck Sales, Inc. v. Ford Motor Co.) is published on Counsel Stack Legal Research, covering District Court, N.D. Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Capital Ford Truck Sales, Inc. v. Ford Motor Co., 819 F. Supp. 1555, 1992 U.S. Dist. LEXIS 21631, 1992 WL 470695 (N.D. Ga. 1992).

Opinion

ORDER

ORINDA D. EVANS, District Judge.

This case, alleging price discrimination and other federal and state law claims, is before the court on the following motions: (1) Defendant’s motion for summary judgment on the constitutionality of the Georgia Motor *1559 Vehicle Franchise Practices Act; (2) Defendant’s motion for summary judgment on the merits of Plaintiffs’ claims; (3) Defendant’s motion to file an out of time motion to compel; (4) Plaintiffs’ motion to notify the Attorney General of the State of Georgia of an attack on the constitutionality of the Georgia Motor Vehicle Franchise Practices Act; (5) Defendant’s motion to exclude affidavits filed in opposition to Defendant’s motion for summary judgment; (6) Plaintiffs’ motion to abstain; (7) Plaintiffs’ motion for a continuance; and (8) Plaintiffs’ motion for leave to file a supplemental brief in opposition to Defendant’s motions for summary judgment.

I. Factual Overview.

This action, brought by Plaintiffs Capital Ford Truck Sales, Inc. (“Capital Ford”) and its principal shareholder, William M. Anderson (“Anderson”), involves a challenge to the wholesale pricing mechanism used by Defendant Ford Motor Company (“Ford Motor”) in selling medium and heavy trucks to Ford Motor’s truck dealers, including Capital Ford. The complaint alleges numerous federal and state law claims arising out of the pricing mechanism, including violations of the Federal Dealer’s Day in Court Act, 15 U.S.C. § 1221, et seq.; the Georgia Motor Vehicle Franchise Practices Act, O.C.G.A. § 10 — 1— 620, et seq.; Section 1 of the Sherman AntiTrust Act, 15 U.S.C. § 1; 1 and the Robinson-Patman Act, 15 U.S.C. § 13(a). The complaint also alleges breach of fiduciary duty under common law. Plaintiffs also assert a claim for “increased interest costs” in connection with the floor planning of Plaintiffs’ truck inventory by Ford Motor Credit Company (“FMCC”), a wholly owned subsidiary of Defendant Ford Motor.

Defendant Ford Motor is engaged in the manufacture of various types of vehicles, including heavy, medium and light duty trucks. At the time the complaint in this action was filed, Plaintiff Capital Ford was in the business of selling and servicing trucks manufactured by Ford Motor. Capital Ford purchased vehicles and operated in the Atlanta, Georgia area pursuant to several written agreements executed by Capital Ford and Ford Motor. 2

The principal agreement was a document dated September 1, 1973 entitled “Ford Heavy Duty Truck Sales and Service Agreement” (the “Sales and Service Agreement”). 3 The Sales and Service Agreement incorporated, as part of its terms and conditions, periodic notices issued by Ford Motor known as “Heavy Duty Truck Terms of Sale Bulletins” (“Bulletins”). At all times relevant to this litigation, the Bulletin applicable to the Sales and Service Agreement between Capital Ford and Ford Motor was the “Heavy Duty Truck Terms of Sale Bulletin No. HT-4,” effective April 1, 1981. 4

The principal focus of Plaintiffs’ complaint is two pricing programs, implemented by Ford Motor under the Sales and Service Agreement in 1980, 5 and expanded in the following years. Those programs were known as the competitive price assistance (“CPA”) program and the government price concession (“GPC”) program. As the programs initially operated, Ford Motor would lower its wholesale heavy truck prices (ie., *1560 the price it charged to dealers) on a case-by-case basis when Ford Motor was notified that its dealer was attempting to sell trucks to certain fleet customers. The lowering of the price was known as competitive price assistance, or CPA, because the dealer received the wholesale price discount only if the dealer could show that competition was underbidding him on the potential sale. 6

In the years that followed the establishment of CPA/GPC, Ford Motor expanded the program so that CPA/GPC price assistance was applicable to all purchases of heavy trucks. In addition, Ford Motor changed the procedures by which it determined the level of price assistance allowed in each transaction. The program evolved from one in which each request for price assistance was reviewed on a case-by-case basis to one in which published schedules were utilized to set assistance levels. It appears that by the mid-1980s, the program had changed to its current form in which Ford Motor utilized CPA/GPC schedules to set price assistance levels for all sales of medium and heavy trucks to its dealers. These schedules, known as “rainbow schedules” because of their color coded references, set the dollar amount of CPA/GPC available to a dealer in a given transaction based on the model of truck, the option package, and the number of trucks being sold in the transaction. 7

In cases in which a dealer felt that the initial allowance of CPA/GPC under the rainbow schedule was insufficient, a CPA/GPC appeal procedure was in place in which a dealer could request additional price reductions. Under the appeal process, a dealer provided Ford Motor with data about the “street price” (perceived actual retail value) of the truck and the amount of anticipated dealer profit on the transaction. Ford Motor then evaluated the appeal, and advised the dealer regarding the amount of additional CPA/GPC, if any, that would be allowed. According to Ford Motor rules, appeals from rainbow schedule allocations were only available if the sale met certain criteria. For a transaction to be eligible for CPA/GPC appeal, it had to involve a sale of ten or more trucks or had to be a sale to one of approximately 2,200 “sales solicitation program” customers (“SSP customers”). Deposition testimony indicates that these appeal criteria were strictly enforced. See Eaton Depo., p. 114; Kahn Depo., p. 187. Capital Ford did not generally sell to SSP customers or to customers who bought more than ten vehicles at one time. Anderson Depo., pp. 369-69, 272-73.

Two final facts bear mention with regard to Ford Motor’s CPA/GPC price assistance program. First, evidence in the record supports Plaintiffs’ claim that, where a price-assisted sale resulted in a profit to Capital Ford in excess of 4%, Ford Motor would reduce subsequent CPA/GPC awards to “chargeback” that excess profit. Merrifield Depo., p. 109; Bloomquist Depo., pp. 82-83; Anderson Depo., pp. 729, 739, 775-76. Second, there is evidence in the record supporting Plaintiffs’ contention that during the mid-to-late 1980s, Ford Motor wholesale truck prices were above actual retail value, 8

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Cite This Page — Counsel Stack

Bluebook (online)
819 F. Supp. 1555, 1992 U.S. Dist. LEXIS 21631, 1992 WL 470695, Counsel Stack Legal Research, https://law.counselstack.com/opinion/capital-ford-truck-sales-inc-v-ford-motor-co-gand-1992.