Los Angeles Land Co. Sierra Palm Partners West Lanes Inc. v. Brunswick Corporation

6 F.3d 1422, 93 Cal. Daily Op. Serv. 7595, 1993 U.S. App. LEXIS 26608, 1993 WL 404920
CourtCourt of Appeals for the Ninth Circuit
DecidedOctober 13, 1993
Docket92-55134
StatusPublished
Cited by51 cases

This text of 6 F.3d 1422 (Los Angeles Land Co. Sierra Palm Partners West Lanes Inc. v. Brunswick Corporation) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Los Angeles Land Co. Sierra Palm Partners West Lanes Inc. v. Brunswick Corporation, 6 F.3d 1422, 93 Cal. Daily Op. Serv. 7595, 1993 U.S. App. LEXIS 26608, 1993 WL 404920 (9th Cir. 1993).

Opinion

CYNTHIA HOLCOMB HALL, Circuit Judge:

Brunswick Corporation (“Brunswick”) appeals from the district court’s judgment following a jury verdict awarding to Los Ange-les Land Company (“L.A. Land”) $15,168,000 under section 2 of the Sherman Act, and, alternatively, one-third that amount under California common law governing tortious interference with prospective economic advantage. Brunswick contends that the district court should have granted its motions for directed verdict and judgment notwithstanding the verdict because L.A. Land failed to prove violations of federal antitrust law or state tort law. This case centers on the competing efforts of the two parties to build a bowling center in Palmdale in the Antelope Valley (a portion of Los Angeles County) at a time when Brunswick owned the only existing center in the Valley.

*1424 The district court had jurisdiction over the federal antitrust claims under 15 U.S.C. §§ 15, 26, and pendent jurisdiction over the state law claims. We have jurisdiction to review the district court’s final judgment under 28 U.S.C. § 1291. We reverse.

I. FACTS AND PROCEEDINGS BELOW

Brunswick wholly owns two subsidiaries— one which manufactures and sells bowling equipment, and another which owns and operates bowling centers in the United States and abroad. One of the centers under the control of the latter subsidiary is the Sands Bowl in the Antelope Valley. In spring of 1988, the Sands Bowl was the only bowling center in the Antelope Valley, an area with a rapidly expanding population.

L.A. Land is a real estate development company which, among various other enterprises, owns and operates three bowling centers in Southern California. In 1987, L.A. Land set in motion a plan to build a bowling center in the Antelope Valley. In April 1988, it sent an order for equipment to Brunswick, with specified conditions. About that time, Brunswick itself developed an interest in opening a new bowling center in the Antelope Valley.

In 1986, Brunswick had formed an agreement with Deutsche Credit Corporation (“DCC”) under which Brunswick helped its customers to obtain equipment financing from DCC by guaranteeing through a contingent repurchase arrangement that Brunswick rather than DCC would bear most of the risk of borrower default. The agreement required Brunswick to assume contingent liability for the loan, gather information for the loan application package and transmit the package to DCC, and prepare a market survey to help DCC assess the viability of any new bowling center. When L.A. Land sought to purchase equipment from Brunswick for its proposed Antelope Valley center, it also sought equipment financing from DCC. However, DCC refused to accept a loan application directly from L.A. Land and instead directed it to process the application through Brunswick. L.A. Land began attempting to arrange the financing through Brunswick sometime about April 1988.

Previous to the key events at issue in this case, L.A. Land opened a bowling center in San Dimas, California. It purchased the equipment for that center from Brunswick, financed the purchase through DCC, and contracted with Timberlake Construction Company (“Timberlake”) to build the center. L.A. Land asked Timberlake to build its proposed center in the Antelope Valley, but Timberlake declined, citing a policy of not building in Brunswick market areas (i.e., areas where Brunswick owned and operated bowling centers.) As of 1988, Timberlake had for some time built all of Brunswick’s new U.S. bowling centers.

By August of 1988 (and possibly earlier), Brunswick decided to go ahead with plans to build a new bowling center in the Antelope Valley. Brunswick had forwarded L.A. Land’s equipment financing application to DCC at the end of July 1988. L.A. Land alleges that Brunswick delayed transmittal of the application so that Brunswick could get a head start on the construction of its own new bowling center in the Antelope Valley. Ultimately, DCC turned down L.A. Land’s financing application, Brunswick built a new bowling center in the Antelope Valley, and L.A. Land did not.

L.A. Land commenced this action on August 30, 1988, and immediately requested a temporary restraining order to enjoin Brunswick’s construction of its new center arguing that “the market can adequately bear just one more bowling center”; the district court denied the request. At trial, L.A. Land contended that Brunswick committed three acts which violated federal antitrust law and constituted torts under California law: (1) Brunswick delayed transmission of L.A. Land’s financial information to DCC; (2) Brunswick submitted to DCC an inaccurate market survey; and (3) Brunswick restricted Timberlake from building a bowling center in the Antelope Valley for L.A. Land.

Brunswick moved for a directed verdict after L.A. Land presented its case in chief and at the end of trial. The district court denied those motions and sent the case to the jury, which rendered a verdict in favor of L.A. Land. The court also denied Brunswick’s motion for judgment notwithstanding the verdict, and entered a judgment award *1425 ing L.A. Land the trebled sum of $15,168,000 on the antitrust claim or, alternatively, $5,056,000 on the tort claim, and $1,435,-974.80 in attorneys’ fees and costs. This appeal of that judgment followed.

II. STANDARD OF REVIEW

The standard for determining the propriety of a directed verdict or a judgment notwithstanding the verdict is the same for district and appellate courts: “whether, viewing the evidence as a whole, there is substantial evidence present that could support a finding ... for the nonmoving party.” Syufy Enters. v. American Multicinema, Inc., 793 F.2d 990, 992 (9th Cir.1986) (internal quotation omitted), cert. denied, 479 U.S. 1031, 107 S.Ct. 876, 93 L.Ed.2d 830 (1987). “Substantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Id. (internal quotation omitted).

In deciding this appeal from the denial of motions for directed verdict and judgment notwithstanding the verdict, we “review the evidence on [the] factual issues in the light most favorable to [L.A. Land] and draw all reasonable inferences in its favor.” Oahu Gas Service, Inc. v. Pacific Resources Inc., 838 F.2d 360, 364 (9th Cir.), cert. denied, 488 U.S. 870, 109 S.Ct. 180, 102 L.Ed.2d 149 (1988). The question whether a party possesses monopoly power is essentially one of fact. Id. at 363. However, the question whether specific conduct is anticompetitive in violation of the Sherman Act is one of law which we therefore review de novo. Id. at 368. Likewise, we review de novo the question whether specific conduct constitutes a tort under California law. Salve Regina College v.

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6 F.3d 1422, 93 Cal. Daily Op. Serv. 7595, 1993 U.S. App. LEXIS 26608, 1993 WL 404920, Counsel Stack Legal Research, https://law.counselstack.com/opinion/los-angeles-land-co-sierra-palm-partners-west-lanes-inc-v-brunswick-ca9-1993.