Hough Transit, Ltd. v. National Farmers Organization

472 N.W.2d 358, 1991 Minn. App. LEXIS 652, 1991 WL 109221
CourtCourt of Appeals of Minnesota
DecidedJune 25, 1991
DocketC1-90-2700
StatusPublished
Cited by7 cases

This text of 472 N.W.2d 358 (Hough Transit, Ltd. v. National Farmers Organization) is published on Counsel Stack Legal Research, covering Court of Appeals of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hough Transit, Ltd. v. National Farmers Organization, 472 N.W.2d 358, 1991 Minn. App. LEXIS 652, 1991 WL 109221 (Mich. Ct. App. 1991).

Opinion

OPINION

SHORT, Judge.

On appeal from a grant of summary judgment, Hough Transit, Ltd. argues the trial court erred as a matter of law in concluding (1) the exclusive dealing agreement between National Farmers Organization and Wilke did not violate state antitrust law and (2) its claim for tortious interference with a prospective business advantage was meritless. We disagree and affirm.

FACTS

Hough Transit, Ltd. is a trucking service which is in the business of hauling milk from farmer-producers to various creameries. Respondent National Farmers Organization is a cooperative consisting of farmer-producers. In 1973, the co-op agreed to use Hough to transport its members’ milk to the creamery. Hough and the co-op have not had a written contract since 1973.

Defendant Mark Wilke (driver) worked as a driver for Hough on and off for the past 10-12 years. The driver and Hough have had no written employment contract since 1985. Instead, Hough would contact the driver on an as-needed basis. If the driver was available, he would agree to drive. Neither the earlier written contract nor the oral agreement between the driver and Hough prevented the driver from competing with Hough or restricted his contacts with potential customers.

During 1988, the co-op became dissatisfied with Hough’s performance. The coop claimed Hough’s drivers were not picking up milk on time, were favoring the routes of larger dairies over co-op producers, and were not collecting milk samples or doing paperwork. In the fall of 1988, several of the co-op’s producers approached the driver and asked him to start a milk hauling business. The driver agreed and began to look for milk hauling equipment. In late January of 1989, Hough went to the co-op to ask whether the co-op was replacing Hough’s trucking services. The co-op told Hough about its conversation with the driver regarding the co-op’s routes and Hough quit working for the co-op. The driver immediately took over the co-op’s milk routes.

Under the new hauling arrangement, the driver charges farmers a higher price for milk pick up than did Hough. The driver hauls exclusively for co-op producers, and several of Hough’s customers switched to the driver’s hauling business. Hough lost approximately $5,000 net income per month as a result of losing the co-op routes. In addition, Hough claims he could have sold those routes to another hauler for $50,000. However, Hough agrees that another hauler could take over a milk route without paying the previous hauler if the producers were unsatisfied with the first hauler’s service.

In 1989, the driver sued Hough in small claims court for unpaid wages. Hough then filed a counterclaim against the co-op and the driver alleging two counts of tor- *360 tious interference with prospective business relations and a violation of state antitrust law. The case was removed to district court. The co-op filed a motion for summary judgment, which was initially denied by the trial court. After five months of discovery, the co-op renewed its motion and the trial court granted summary judgment for the co-op.

ISSUES

I. Does the relationship between the coop and the driver constitute a violation of antitrust laws?
II. Did the trial court err in dismissing Hough’s claims for tortious interference with a prospective business advantage?

ANALYSIS

On appeal from a grant of summary judgment, we determine whether any genuine issues of material fact exist and whether the trial court erred in its application of the law. Offerdahl v. University of Minnesota Hosps. and Clinics, 426 N.W.2d 425, 427 (Minn.1988). We view the evidence in the light most favorable to the nonmoving party, but need not defer to the trial court’s application of the law. See Frost-Benco Elec. Ass’n v. Minnesota Pub. Utils. Comm’n, 358 N.W.2d 639, 642 (Minn.1984). Summary judgment is appropriate against a party who fails to make a showing sufficient to establish the existence of an element essential to its case. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986); Davis v. Midwest Discount Sec., Inc., 439 N.W.2d 383, 386 (Minn.App.1989).

I.

The Minnesota Antitrust Law of 1971 provides “[a] contract, combination, or conspiracy between two or more persons in unreasonable restraint of trade or commerce is unlawful.” MinmStat. § 325D.51 (1988). This section codifies the “rule of reason” used to evaluate the legality of trade restraints under federal law. See Note, Minnesota Antitrust Law of 1971: Interpretation and Analysis, 63 Minn. L.Rev. 907, 926-27 (1979) (hereinafter Note); see also Continental T.V., Inc. v. GTE Sylvania, Inc., 433 U.S. 36, 49, 51 & n. 18, 59, 97 S.Ct. 2549, 2557, 2558 & n. 18, 2562, 53 L.Ed.2d 568 (1977) (rule of reason applies to certain vertical non-price restraints). In applying the rule of reason, the court “must examine the purpose, the market power and the anticompetitive effect of the restraint, and thus arrive at a conclusion as to the reasonableness of the restraint.” International Travel Arrangers, Inc. v. Western Airlines, Inc., 623 F.2d 1255,1267 (8th Cir.1980) (citing Chicago Bd. of Trade v. United States, 246 U.S. 231, 238, 38 S.Ct. 242, 243, 62 L.Ed. 683 (1918)), cert, denied, 449 U.S. 1063, 101 S.Ct. 787, 66 L.Ed.2d 605 (1980). The court must focus on the restraint’s effect on competition, not its effect on an individual competitor. See National Soc’y of Professional Eng’rs v. United States, 435 U.S. 679, 690-91, 98 S.Ct. 1355, 1364-65, 55 L.Ed.2d 637 (1978).

Whether a restraint is unreasonable is a question of fact. Minnesota-Iowa Television Co. v. Watonwan T. V. Improvement Ass’n, 294 N.W.2d 297, 307 (Minn.1980). Some combinations so detrimentally affect competition they are conclusively presumed to be unreasonable, and therefore illegal, restraints of trade. See Northern Pacific By. Co. v. United States, 356 U.S. 1, 5, 78 S.Ct. 514, 518, 2 L.Ed.2d 545 (1958).

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Bluebook (online)
472 N.W.2d 358, 1991 Minn. App. LEXIS 652, 1991 WL 109221, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hough-transit-ltd-v-national-farmers-organization-minnctapp-1991.