Herrmann v. Atlantic Richfield Co.

72 F.R.D. 182
CourtDistrict Court, W.D. Pennsylvania
DecidedOctober 15, 1976
DocketCiv. A. Nos. 71-842, 73-799
StatusPublished
Cited by14 cases

This text of 72 F.R.D. 182 (Herrmann v. Atlantic Richfield Co.) is published on Counsel Stack Legal Research, covering District Court, W.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Herrmann v. Atlantic Richfield Co., 72 F.R.D. 182 (W.D. Pa. 1976).

Opinion

OPINION

TEITELBAUM, District Judge.

These consolidated antitrust actions are presently before the Court for resolution of two important procedural matters raised by defendant Atlantic Richfield Company (ARCO).

Specifically, ARCO has moved (1) for an order decertifying the plaintiff class previously certified by this Court pursuant to Rule 23(a) and (b)(3) of the Federal Rules of Civil Procedure,1 and (2) for leave to file a supplemental answer setting forth twenty-[184]*184one counterclaims against various absent members of the plaintiff class.

It is apparent that disposition of these motions will determine the essential character of this protracted litigation; the Court has considered them accordingly, carefully weighing the arguments raised in the various briefs filed by the parties. For reasons stated below, ARCO’s motion to decertify the class will be denied; its motion to file counterclaims will be granted in part and denied in part.

The Motion to Decertify the Class

Defendant’s motion to decertify the instant case as a class action is based on the allegedly fatal convergence of two factors: a stipulation of the parties refining the issues in this suit and the recent decision of the Court of Appeals for the Third Circuit in Ungar v. Dunkin’ Donuts of America, Inc., 531 F.2d 1211 (1976).

In Dunkin’ Donuts, supra, the Court of Appeals held that the “predominance requirement” of Rule 23(b)(3) precluded certification of a plaintiff class asserting antitrust tying claims. The court reasoned that inasmuch as proof of coercion is an essential element of a prima facie case of illegal tying, each class member would be required to establish individual coercion — that is, that he, individually, was coerced into accepting certain alleged tie-in sales.2 Thus, the Court ruled, questions common to the members of the class could not be deemed to predominate over questions affecting individual members, as required under Rule 23(b)(3). Class action certification therefore was improper.

The case presently before this Court does not involve allegations of illegal tie-ins on the part of the defendant corporation. Rather, plaintiffs in these actions charge violations of Section 1 of the Sherman Act (15 U.S.C. § 1). Nonetheless, ARCO submits that a stipulation filed by the parties herein (and approved by the Court on September 8, 1975) renders the case sub judice fully subject to the Dunkin’ Donuts rationale.

The stipulation in question provides as follows:

“2. The substantive offenses alleged by plaintiffs in both of the above captioned cases shall be withdrawn as to all allegations of violations of the RobinsonPatman Act, 15 U.S.C. §§ 13 et seq., and all allegations of violations of the Sherman Act, 15 U.S.C. §§ 1 and 1px solid var(--green-border)">2 with two exceptions. The two allegations that remain are those specified in the Notice of Pendency of Class Action sent to the members of the class on April 10, 1975, wherein they were stated as follows: ‘whether ARCO coerced its dealers into
(a) buying and issuing trading stamps, and
(b) selling petroleum products at prices established by ARCO.’ ”

ARCO contends that the above language has reduced this litigation to two questions of dealer coercion, and that each dealer/class member therefore must prove coercion in order to recover from defendant. This, ARCO submits, posits a predominant individual question, creating precisely that circumstance in which the Dunkin’ Donuts court deemed class certification improper.

I do not agree. While defendant’s argument is attractive at first blush, closer analysis indicates that the instant situation is fundamentally different from that which pertained in Dunkin’ Donuts.

Unlike Dunkin’ Donuts, the crux of this case is whether ARCO violated Section 1 of the Sherman Act by fixing prices and otherwise tampering with the retail price structure for petroleum and petroleum products. While the parties have stipulated that the issue to be tried is “whether ARCO coerced its dealers into (a) buying and issuing trading stamps and (b) selling petroleum products at prices established by [185]*185ARCO,” proof of individual coercion clearly is not essential to establish the antitrust violation alleged by plaintiffs. All that need be shown in order to demonstrate the asserted violation of Section 1 of the Sherman Act is that defendant conspired, agreed or combined with some of its dealers in an effort to affect the retail price of gasoline or associated products. See Albrecht v. Herald Co., 390 U.S. 145, 88 S.Ct. 869, 19 L.Ed.2d 998 (1968); United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 60 S.Ct. 811, 84 L.Ed. 1129 (1940).

Apparently, the question of coercion has been emphasized in this case because coercion is the alleged means by which ARCO purportedly secured the agreement of many of its dealers to maintain established retail prices and to buy and issue trading stamps. But it is in no way necessary for each dealer/class member to demonstrate that he, individually, was subject to coercion by the defendant corporation. Indeed, as plaintiffs observe, some dealers may have agreed voluntarily to carry trading stamps or to sell petroleum at a price level desired by ARCO. This still would constitute a violation of the Sherman Act, and, at least insofar as such dealers did not aggressively support and further the averred monopolistic scheme, they are not barred from recovery because their agreement was voluntary. See Perma Life Mufflers v. International Parts Corp., 392 U.S. 134, 88 S.Ct. 1981, 20 L.Ed.2d 982 (1968).

In these circumstances, the principle enunciated in Dunkin' Donuts provides scant support for defendant’s motion to decertify.

The Motion For Leave To File Counterclaims

As previously noted, ARCO also has moved the Court for permission to file a supplemental answer assérting twenty-one counterclaims against various members of the plaintiff class.

These counterclaims are of two types: eleven of them are so-called debt collection claims, seeking affirmative judgment against certain individual class members for monies allegedly owing defendant on open account; ten seek set-offs against various individuals which would allow ARCO to reduce the amount of any monetary damages awarded to a particular class member by the unpaid balance of an outstanding judgment against that class member.

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Cite This Page — Counsel Stack

Bluebook (online)
72 F.R.D. 182, Counsel Stack Legal Research, https://law.counselstack.com/opinion/herrmann-v-atlantic-richfield-co-pawd-1976.