O'DELL v. General Motors Corp.

122 F. Supp. 2d 721, 2000 U.S. Dist. LEXIS 19640, 2000 WL 1778998
CourtDistrict Court, E.D. Texas
DecidedOctober 6, 2000
Docket9:98-cv-00123
StatusPublished
Cited by1 cases

This text of 122 F. Supp. 2d 721 (O'DELL v. General Motors Corp.) is published on Counsel Stack Legal Research, covering District Court, E.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
O'DELL v. General Motors Corp., 122 F. Supp. 2d 721, 2000 U.S. Dist. LEXIS 19640, 2000 WL 1778998 (E.D. Tex. 2000).

Opinion

MEMORANDUM OPINION

COBB, District Judge.

This is a dealer termination case filed by 18 unaffiliated radio repair shops (“Plaintiffs”) against Defendants General Motors (“GM”) and Delco Electronics Corporation (“Delco”). Plaintiffs are former authorized Delco radio repair shops whose contracts were terminated or not renewed by Defendants. Plaintiffs’ businesses have suffered as a result of the loss of the contracts and, therefore, they seek assistance in this Court. Plaintiffs allege that their termination violates several federal antitrust laws. They also contend that Defendants’ conduct violates Texas contract law and California and Indiana consumer protection law. Defendants move for summary judgment on the antitrust claims and the Texas contract law claim. Plaintiffs move for summary judgment on their state consumer protection law claims. After re *724 viewing the evidence 1 on Plaintiffs’ antitrust claims, the Court grants Defendants’ motion on the (1) conspiracy claim because Plaintiffs have presented no evidence of any conspiracy between Defendants and the remaining authorized service centers or evidence of the anticompetitive effects of Defendants’ conduct; (2) price discrimination claim because Plaintiffs have presented no evidence that the indirect purchaser doctrine is applicable to their case and, even if it is applicable, they have not offered sufficient evidence that Defendants discriminated in terms of price; and (3) attempted monopolization claim because Plaintiffs have offered no evidence of Defendants’ market power. The Court denies Defendants’ motion on the Texas contract claim and Plaintiffs’ motion on the California and Indiana state law claims. Moreover, because jurisdiction was premised on the now dismissed federal antitrust claims, the Court dismisses Plaintiffs’ state law claims without prejudice, allowing them to seek redress in state court. The Court presents the facts in the light most favorable to the Plaintiffs.

I. Facts

Defendant GM is the largest automobile manufacturer in the world. It manufactures and sells radios and other products primarily for use in GM automobiles through its Service Parts Operations (“GMSPO”) and ACDelco, a subsidiary of GMSPO. GM also manufactures and sells radios and other products primarily for use in GM automobiles through its Delco subsidiary. For all relevant times in this lawsuit, Delco was a wholly owned subsidiary of GM.

Plaintiffs are the owners of businesses that perform radio and electrical instrument repairs. When a GM car is taken to a dealer to work on its Delco radio (or other electrical device), the dealership contracts with a “Delco shop” to perform the work. Plaintiffs were owners of such shops and performed warranty and non-warranty repairs on Delco products, in-eluding selling Delco parts and radios, speedometers, odometers, and tachometers.

In order to become an authorized Delco shop, Defendants required that the shop purchase certain equipment, some of which could only be used to service Defendants’ products. Delco shops were also required to stock certain inventory, attend training classes, and perform a minimum amount of Delco business each month. Plaintiffs and Defendants had entered into service center agreements or warehouse distribution agreements with these Delco shops. The service center agreements permitted the repair shops to perform warranty repair service for which GM paid the service center. These agreements also permitted either party to terminate the agreement, with or without cause, upon 30 days notice. The warehouse distributor agreements permitted the repair shops to obtain parts from GM and its subsidiaries, including Delco, and also permitted either party to terminate the agreement.

Defendants terminated or did not renew many of these agreements with Plaintiffs. Defendants maintain that changes in the manufacturing technology of Delco products over the past several years have required changes in how these products are serviced. They claim that they decided to terminate the agreements with Plaintiffs because the agreements no longer made “business sense.” Because of rising costs in inventory and repair equipment, increased consumer demands, and extended warranty coverage, “Defendants determined that they must evolve from a system utilizing numerous, and often small, repair centers to a few specialized facilities with complete remanufacturing facilities.” (Def.s’ Mot. Summ. J. Br. Supp. at 3.) Defendants decided to refer all repair work to authorized service centers only. Plaintiffs agree that the trend has been toward replacement of the entire radio rather than repair of component parts. *725 This trend is evidenced further by the fact that Ford and Chrysler have also consolidated their repair networks and terminated small repair shops. (Def.s’ Mot. Summ. J. Br. Supp. at 4.) As a result of Defendants’ decision to terminate Plaintiffs’ contracts, there are 19 authorized service centers (there were 28 when Plaintiffs originally filed their suit) nationwide that can perform warranty repairs on Del-co electronic parts for vehicle year models 1995 and newer.

Plaintiffs contend that Defendants terminated Plaintiffs’ warranty repair work on Delco radios, but told them they could still buy parts and perform non-warranty repairs. Plaintiffs’ claim Delco then refused to sell parts directly to Plaintiffs, forcing them to buy parts at higher prices from the 19 remaining shops still authorized to perform warranty repairs. Finally, according to Plaintiffs, Defendants completely prohibited Plaintiffs from buying any replacement parts or obtaining service literature necessary to perform non-warranty work on Delco electronic parts.

Plaintiffs filed this suit on May 18, 1998 alleging several causes of action against Defendants. First, according to Plaintiffs First Amended Complaint, Defendants violated the Clayton Act by “engaging in exclusive dealing contracts with the twenty-eight authorized service centers by cutting off the Plaintiffs in monopolistic fashion.” In their response to Defendants’ Motion for Summary Judgment, however, this claim was transfigured into a claim that “Defendants have attempted to monopolize the market for service work on Delco products, in violation of § 2 of the Sherman Act .... ” (Pl.s’ Opp’n Def.s’ Mot. Summ. J. at 2.) Plaintiffs also claim Defendants violated the Robinson-Patman Act by “engaging in commerce to directly or indirectly discriminate in the price charged for Delco electronic parts.” Plaintiffs further assert that Defendants violated Section 1 of the Sherman Act by “engaging in civil conspiracy with each other and the twenty-eight authorized service centers to restrict the sell [sic] of Delco electronic parts and sharply limit the number of shops which could repair and manufacture Delco products.” Finally, Plaintiffs allege that Defendants breached “impliedly created” franchise agreements, and violated consumer protection laws in Indiana and California. After over 18 months of discovery, Plaintiffs and Defendants moved for summary judgment.

II. Analysis

Defendants move for summary judgment on Plaintiffs’ antitrust and state law contract claims. Plaintiffs move for summary judgment on their state law consumer protection claims.

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122 F. Supp. 2d 721, 2000 U.S. Dist. LEXIS 19640, 2000 WL 1778998, Counsel Stack Legal Research, https://law.counselstack.com/opinion/odell-v-general-motors-corp-txed-2000.