Parsons v. Ford Motor Co.

669 F.2d 308
CourtCourt of Appeals for the Fifth Circuit
DecidedMarch 5, 1982
DocketNo. 80-2258
StatusPublished
Cited by24 cases

This text of 669 F.2d 308 (Parsons v. Ford Motor Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Parsons v. Ford Motor Co., 669 F.2d 308 (5th Cir. 1982).

Opinion

GARZA, Circuit Judge:

Wayne Parsons initiated this action against the Ford Motor Company and a number of individual Ford dealers *, with the allegation that defendants had engaged in a conspiracy against him in violation of sections 1 and 2 of the Sherman Anti-Trust Act1 2, as well as sections 15.02-.04 of the [310]*310Texas Business and Commerce Code. Specifically, plaintiff charged that he was frozen out of the market for new Ford vehicles after Ford formulated a policy prohibiting their dealers from selling to “bootleggers” like himself.

Plaintiff was engaged in the inter-dealership transfer of new Ford vehicles, commonly known as bootlegging, in the years 1976 through 1978. He conducted this venture under a variety of names: Executive Motors Unlimited, Payless Car Rental Systems, Southwest Car Rentals, Executive Leasing, Wayne Motor Sales, BJP Enterprises, and W. Bar J, Inc.

It is undisputed that, during these years, strong consumer demand existed for certain Ford models, such as pickups and Thunder-birds. In Texas, the state in which Parsons conducted the majority of his business, the demand for pickup trucks and vans was especially high. Many persons purchased them as recreational vehicles. Demand outstripped supply of these vehicles in many areas. Plaintiff alleviated this situation in the short run by inserting himself into the Ford allocation system. He purchased vehicles from one dealer and then resold them to another who was experiencing very high demand for the particular vehicle. Parsons contends that he simply increased interdealer competition by enabling dealers to obtain vehicles that they otherwise would have been unable to purchase.

Ford characterizes plaintiff’s activities differently and charges him with obtaining vehicles from Ford dealers by fraudulently portraying himself as a legitimate fleet purchaser of vehicles.3 He was only able to [311]*311engage in this business because of the lower prices charged to fleet customers and the fact that dealers did not have to take fleet purchases off their show room floors. Ford maintains that once it ascertained the fraudulent nature of plaintiff’s business, it took reasonable steps to ensure that vehicles ordered from district fleet allocations were actually purchased by legitimate fleet end-users.

The Ford allocation system at issue in this case is comprised of two components. In a given geographical area or “district,” a dealer may obtain vehicles through both the “basic allocation” system and the “fleet allocation” system. A dealer’s basic allocation is computed from the number of vehicle sales and the inventory of unsold vehicles. More sales and fewer models on the dealer’s lot will result in an increased allocation; conversely, fewer sales and more unsold models decrease the allocation. The computations which provide the basis for this allocation are made on a monthly basis and separately for each Ford model.

The fleet allocation is calculated on a district, rather than dealer, basis. Generally, a fleet customer is one with ten or more vehicles, commonly for rental or corporate use. The separate fleet allocation system was established because, while it is relatively easy to determine the number of large fleet customers in a district, it is very difficult to predict from which dealer a large fleet purchaser will seek to fill his requirements. Without the availability of a separate fleet allocation, a dealer might be unable to fill a major order by a large fleet user or could be left temporarily without vehicles to sell to other customers. Fleet customers are obviously very important to Ford sales; it is, therefore, critical that an adequate stock of vehicles be maintained for this purpose.

Ford’s allocation system does not always work perfectly; obviously, it is difficult to prognosticate trends in vehicle sales. Plaintiff asserts that the failure of the allocation system led him into this “bootlegging” business. A Ford dealer offered to purchase vehicles bought from other dealers. Parsons also credits dealer suggestions with leading him to do business under many different names. Allegedly, this venture was very successful until Ford conspired with its dealers to force him out of business.

Ford paints a very different picture of plaintiff’s operation. The company categorically denies any policy to prohibit sales to Parsons. Plaintiff was only required to demonstrate that he was a legitimate fleet buyer in order to take advantage of the fleet allocation system and price. Any fraudulent fleet purchase could have been filled from a dealer’s basic allocation. This policy did adversely affect plaintiff, since he was not a legitimate fleet purchaser.4 [312]*312However, Ford contends that it was well within its rights to implement such a policy.5

After plaintiff filed his original complaint, defendants moved for dismissal of all claims. The trial court granted this motion as to the section two Sherman Act claim. That claim, which was directed solely against Ford Motor Company, charged defendant with attempting to monopolize the sale of new Fords. The court pointed out that every manufacturer has a natural monopoly in the sale of his own products; such natural monopolies do not contravene anti-trust laws. United States v. E. I. de Pont de Nemours & Co., 351 U.S. 377, 393, 76 S.Ct. 994, 1006, 100 L.Ed. 1264 (1956); Spectrofuge Corp. v. Beckman Instruments, Inc., 575 F.2d 256 (5th Cir. 1978), cert. denied, 440 U.S. 939, 99 S.Ct. 1289, 59 L.Ed.2d 499 (1979). Upon completion of discovery, defendants moved for summary judgment on the remaining claims. At that time, the court granted summary judgment on the Sherman Act claim and dismissed plaintiff’s state law claims without prejudice. The plaintiff brings this appeal to challenge the court’s grant of summary judgment. After examining the record, we conclude that this was a proper case for summary disposition and, therefore, we affirm the decision of the trial court.

Before beginning a discussion of this case, we pause to acknowledge that summary judgment is extreme relief which should be approached very cautiously. The Supreme Court has long recognized that this procedure should be considered especially carefully in anti-trust actions. Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 82 S.Ct. 486, 7 L.Ed.2d 458 (1962). This is certainly not to say, however, that the procedure is inapplicable to anti-trust cases. See Solomon v. Houston Corrugated Box Co., 526 F.2d 389 (5th Cir. 1976); Blackburn v. Crum & Forster, 611 F.2d 102 (5th Cir.), cert. denied, 447 U.S. 906, 100 S.Ct. 2989, 64 L.Ed.2d 856 (1980). The appropriateness of summary judgment depends on the facts of the case considered.

Rule 56 of the

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