Carpet Group International v. Oriental Rug Importers Ass'n

256 F. Supp. 2d 249, 2003 U.S. Dist. LEXIS 3218, 2003 WL 1786451
CourtDistrict Court, D. New Jersey
DecidedFebruary 28, 2003
DocketCIV.A. 95-5574(JAG)
StatusPublished
Cited by25 cases

This text of 256 F. Supp. 2d 249 (Carpet Group International v. Oriental Rug Importers Ass'n) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Carpet Group International v. Oriental Rug Importers Ass'n, 256 F. Supp. 2d 249, 2003 U.S. Dist. LEXIS 3218, 2003 WL 1786451 (D.N.J. 2003).

Opinion

OPINION

GREENAWAY, District Judge.

These matters come before the Court on three separate motions for summary judgment of defendant Bashian Bros., Inc. (“Bashian Bros.”), defendants Isaac Etes-sami (“Etessami”) and Moussa Etessami & Sons Corporation (“Etessami & Sons”) (collectively, “Etessami Defendants”), and defendants Eugene Newman (“Newman”) and Noonoo Rug Company (“Noonoo”) (collectively “Newman Defendants”). 1 For the reasons set forth below, this Court denies the Newman Defendants’ motion and grants Bashian Bros.’ motion as to each of Plaintiffs’ claims. This Court denies the Etessami Defendants’ motion as to Plaintiffs’ section 1 and section 2 conspiracy to monopolize claims. Finally, this Court grants the Etessami Defendants’ motion for summary judgment as to Plaintiffs’ monopolization, attempted monopolization, and tortious interference claims.

BACKGROUND 2

Plaintiff Elsea is the sole shareholder of Carpet Group. Carpet Group is a Virginia *259 corporation in the business of arranging the sale of oriental rugs from foreign manufacturers to retailers in the United States.

Defendant Bashian Bros, is an importer and wholesaler of oriental rugs. Bashian Bros, is a member of the Oriental Rug Importers Association, Inc. (“ORIA”), a trade association comprised of importers and wholesalers of oriental rugs. George G. Bashian, Jr. (“Bashian”), president of Bashian Bros., was at all relevant times on the executive board of ORIA. 3 Defendant Etessami & Sons was a small, family-owned and operated oriental rug wholesaler, and a member of ORIA. 4 Etessami, at all relevant times, was the secretary/treasurer of Etessami & Sons. Etessami was also the president of Defendant ORIA in 1992 and 1993. Defendant Noonoo is an importer of oriental rugs, and a member of ORIA. Defendant Newman is the president of Noonoo.

The American oriental rug market typically involves manufacturers in countries such as Pakistan, Turkey and India, and wholesalers who import the rugs to the United States and then sell the rugs to retailers who sell them to the public. Plaintiffs believe that the importing of rugs through wholesalers then to retailers causes higher rug prices. In response, Plaintiffs created a method to bypass the wholesalers by: (1) taking U.S. retailers on buying trips to the countries where the rugs are produced where they could purchase the rugs directly from the manufacturers; and (2) operating trade shows in the United States where foreign manufacturers could sell directly to retailers. Plaintiffs excluded wholesalers, such as Defendants, from these trade shows.

Plaintiffs claim that Defendants conspired to sabotage their efforts to facilitate direct sales between foreign manufacturers and U.S. retailers and specifically, conspired to wreck Plaintiffs’ trade shows. Plaintiffs offer evidence unveiling the activity of ORIA and its members to convince foreign governments, foreign rug trade associations and one domestic rug retailers’ association not to provide financial assistance to two Carpet Group trade shows in November 1993 and August 1994. Plaintiffs also offer documentary evidence intending to show that the defendants were boycotting domestic retailers and foreign manufacturers who supported Plaintiffs trade shows. Plaintiffs provide two declarations of Elsea, in which he avers several incidents intending to illustrate ORIA’s pressure on its members to distance themselves from Carpet Group’s trade fairs. Specifically, Plaintiffs point to various correspondence to show that ORIA and the individual rug importers had pressured independent trade publications to reject advertising for the trade show. Finally, Plaintiffs offer evidence of ORIA’s historical efforts to prevent foreign manufacturers from selling directly to U.S. retailers.

Based on the above, Plaintiffs filed the instant action on October 30, 1995. In their Second Amended Complaint, filed September 18, 1997, Plaintiffs allege violations of sections 1 and 2 of the Sherman Act, as well as tortious interference with prospective business relations and tortious interference with contracts.

*260 Soon thereafter, Defendants moved to dismiss the action for lack of subject matter jurisdiction, arguing that the Foreign Trade Antitrust Improvements Act (“FTAIA”), 15 U.S.C. § 6a, deprived this Court of subject matter jurisdiction. This Court referred the motion to Magistrate Judge G. Donald Haneke, who submitted a report and recommendation urging dismissal. Based on subsequent submissions of additional evidence by the parties-, the matter was remanded back to Judge Ha-neke for further evaluation. In his supplemental report and recommendation, Judge Haneke affirmed his original report. On October 29, 1999, this Court adopted both reports and dismissed Plaintiffs’ complaint for lack of subject matter jurisdiction. Plaintiffs appealed. The Third Circuit reversed the dismissal, concluding that: (1) the FTAIA did not divest this Court of subject matter jurisdiction; (2) subject matter jurisdiction existed over Plaintiffs’ Sherman Act claims; and (3) Plaintiffs had antitrust standing. Carpet Group, 227 F.3d at 78.

On remand, this Court is now presented with the motions for summary judgment, pursuant to Fed. R. Civ. P. 56(c), of several of the Defendants. 5 Bashian Bros, seeks summary judgment against Plaintiffs’ Sherman Act claims on the basis that there is no evidence suggesting that it was a part of any conspiracy to restrain trade or that it monopolized, attempted to monopolize, or conspired to monopolize the importing and wholesale distribution of oriental rugs in the United States. Bashi-an Bros, also seeks summary judgment as to Plaintiffs’ tortious interference claims.

The Etessami Defendants’ summary judgment motion is based on the following: (1) Plaintiffs cannot establish the elements of conspiracy, as required by section 1 of the Sherman Act; (2) Plaintiffs cannot establish the elements of monopolization, in violation of section 2 of the Sherman Act; and (3) Plaintiffs cannot establish the elements of tortious interference with prospective business relations or tortious interference with contracts. The Etessami Defendants also claim that some of the correspondence relied upon by Plaintiffs are petitions to governmental entities or public officials, and thus are protected from antitrust liabihty under the Noerr-Pennington doctrine.

Similarly, the Newman Defendants seek summary judgment, claiming that their actions are protected by the Noerr-Penning-ton doctrine.

STANDARD OF REVIEW

Summary judgment is appropriate under Fed. R. Civ. P. 56(c) when the moving party demonstrates that there is no genuine issue of material fact and the evidence establishes the moving party’s entitlement to judgment as a matter of law.

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256 F. Supp. 2d 249, 2003 U.S. Dist. LEXIS 3218, 2003 WL 1786451, Counsel Stack Legal Research, https://law.counselstack.com/opinion/carpet-group-international-v-oriental-rug-importers-assn-njd-2003.