Crawford Transport Co. v. Chrysler Corp.

235 F. Supp. 751, 1962 U.S. Dist. LEXIS 4777
CourtDistrict Court, E.D. Kentucky
DecidedJanuary 18, 1962
DocketNo. 497
StatusPublished
Cited by3 cases

This text of 235 F. Supp. 751 (Crawford Transport Co. v. Chrysler Corp.) is published on Counsel Stack Legal Research, covering District Court, E.D. Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Crawford Transport Co. v. Chrysler Corp., 235 F. Supp. 751, 1962 U.S. Dist. LEXIS 4777 (E.D. Ky. 1962).

Opinion

SWINFORD, Chief Judge.

In the first place I want to review briefly, if I may, the background of this litigation. The plaintiff, the Crawford Transport Company, has been in business since 1931. During that time its principal patron was Chrysler Corporation and Chrysler Motors. It was a common carrier with rights which it has acquired over some five states, including part of Kentucky, West Virginia, North Carolina, Georgia, and possibly one other — I don’t know whether Florida is included in that or not.

“MR. PARK: No, sir.

“THE COURT: It is not. And it has established itself as a trustworthy and dependable carrier. That fact is attested by the defendant Chrysler Corporation, itself, its officers who have suggested both by their words and their actions that Chrysler placed implicit confidence in the ability of this plaintiff to discharge the duty of expeditiously and reasonably transporting the products from manufacturer to dealer. That is a condition, however, which existed with a number of other carriers, and it reached the place where there were about 83 carriers, I believe at one time, transporting Chrysler products as common carriers.”

We must recognize, of course, that in the automobile industry, like in other widely covered fields in our economic life, there has been a considerable change in methods. Chrysler had 6,000 dealers, at one time possibly more, but so far as our case goes here, 6,000 scattered from the East Coast to the West Coast, and from the Great Lakes to the Gulf, and it used these 83 carriers to transport its products. Since February of 1952, the contractual arrangement between Chrysler and its dealers was that Chrysler would [753]*753ship the product to the dealer and that Chrysler would have the right to say who would carry the automobile. In 1954 that right was reasserted and reestablished and while these dealers were recognized as to their wishes and desires, as to what carrier would be used, that I believe was only persuasive and not conclusive of the agreement between the dealer and the manufacturer. That is, it seems to me, only a reasonable proposition. Transportation of an automobile is a part of the sale of an automobile. To send an automobile to where it is going to be sold, attractively presented and in its best form at the end of a 2,000-mile or 200-mile or 50-mile journey, is just as much a part of having that automobile presentable to the public and acceptable to the public as it is when it first comes off the assembly line at the plant. And so it seems to me that it would be unreasonable to say that a manufacturer whose investment was in that car could not have the right to say who was going to haul it. And while the car was owned by the dealer from the time it was delivered to the carrier, it was with his consent and by his agreement that that carrier was selected because he had agreed when he went into his agency agreement with Chrysler that he would let Chrysler choose the transportation method. Evidently, according to the evidence here, there were a number of variances in that. Some of these dealers hauled their own cars, with the consent of the manufacturer; some of them drove the cars through at one time, within a certain radius. But there seems to have been no definite pattern and there was never apparently any controversy between the manufacturer and the dealer about this arrangement.

Chrysler found that in order to sell its ears most advantageously and to serve the public as it thought better and get rid of the automobiles for a consideration, it should adopt a method which had been in vogue for some time with its two chief competitors, Ford and General Motors. It reduced the number of carriers from 79 as it was at that time, to 16. General Motors, had 14 and Ford, 16, or vice versa. Chrysler called into its office, these 79 carriers on May the 17th, 1957, and gave this demonstration to all of these carriers and gave the reason why it wanted to make this reduction, not that it was making any change in the selection of the carriers, because it had had that prerogative since 1952, but that it was reducing the number of carriers and explaining to them what they might to do be retained as carriers. That meeting of May 17th, 1957, didn’t happen spontaneously. It took some planning, it took some discussion. I think the discussion started back in ’56 between the executives of Chrysler Motors. They may even have had discussion with their co-defendant. There is no great proof that any intrigue was going on, but it undoubtedly was a matter which required a considerable planning and effort to get up to the point where they could make this demonstration on May the 17th, 1957. Now, a business that makes plans and discusses its program doesn’t necessarily lay itself liable to committing a law violation. Much of the documentary evidence that is offered is in the form of letters and correspondence. The whole thing was revealed to all of these carriers on the 17th of May. No protest was made as far as the record goes. On July the 2nd, Mr. Van Beckum wrote that he was not satisfied at all with the arrangement that Chrysler had in mind. Mr. Laughna wrote back the “football letter”, in which he stated that Mr. Van Beckum’s corporation was supposed to be one of his best players on the team, he didn’t think they could win when their best player was dissatisfied, or something to that effect, but that doesn’t necessarily commit either of them to intrigue.

And so, to summarize briefly, you have after the meeting of May the 17th, 1957, some correspondence back and forth between various agencies and offices and the formation of what is identified as Southern Transport Company, in which the plaintiff, Crawford Transport, was given 19% of the stock and an executive [754]*754office. The Court is not in a position to say just what happened to Southern, except that it was not successful. There are implications that there was an inner group of control in the hands of those who sought to eliminate others or to bring about a different program. Evidently it was badly managed some place along the line. And so the defendant Commercial Carriers and others then proceeded to transport these automobiles through these areas, to 6,000 dealers all over the country.

That, briefly, I believe is the substance of the facts. The Sherman Act, Section No. 1, which provides:

“Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal:”

I am asked to find that what went on was an illegal arrangement between Commercial Carriers, Chrysler Motors and Chrysler Corporation. The evidence just does not go that far, gentlemen. The burden of proof on the facts alone is not sustained, any more than you might sustain a finding of conspiracy and restraint in numerous business connections in this country. To hold under these facts, admitting for the sake of discussion, that these people have committed a crime by what they have done in trying to reduce the cost of their operation would be to subject, I am afraid, numerous corporate enterprises or individual business establishments to serious consideration. The defendant, Chrysler, according to the statement of counsel, did not make this change to make money, but made it to keep from losing money. The transportation system that it had, had proven very unsatisfactory and was leading it to serious financial stress in that department; some millions of dollars, according to statement of counsel, had been lost by the methods which it had been following.

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235 F. Supp. 751, 1962 U.S. Dist. LEXIS 4777, Counsel Stack Legal Research, https://law.counselstack.com/opinion/crawford-transport-co-v-chrysler-corp-kyed-1962.