Robert's Waikiki U-Drive, Inc. v. Budget Rent-A-Car Systems, Inc.

732 F.2d 1403, 15 Fed. R. Serv. 1293, 1984 U.S. App. LEXIS 22698
CourtCourt of Appeals for the Ninth Circuit
DecidedMay 8, 1984
Docket83-2251
StatusPublished
Cited by79 cases

This text of 732 F.2d 1403 (Robert's Waikiki U-Drive, Inc. v. Budget Rent-A-Car Systems, Inc.) 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
Robert's Waikiki U-Drive, Inc. v. Budget Rent-A-Car Systems, Inc., 732 F.2d 1403, 15 Fed. R. Serv. 1293, 1984 U.S. App. LEXIS 22698 (9th Cir. 1984).

Opinion

J. BLAINE ANDERSON, Circuit Judge:

Robert’s Waikiki U-Drive, Inc. (Roberts) brought suit against Budget Rent-A-Car Systems, Inc. (Budget), alleging that Budget violated federal antitrust and Hawaii unfair competition laws. The district court granted Budget’s summary judgment motion on the antitrust claims. After trial and a special verdict returned by the jury, the court entered judgment for Budget on the unfair competition claims. We affirm.

I. BACKGROUND

The district court presented a detailed description of the facts in its decision on the summary judgment motions. 491 F.Supp. 1199 (D.Hawaii 1980). We offer only a summary of the facts here.

In 1971, Budget and Aloha Airlines entered into an agreement to develop a “fly-drive” program. Under this agreement, Aloha passengers received a special $7.00 first-day rental rate for Budget cars. The regular rate was $14.00. Aloha rebated $7.00 to Budget per car rented, and this rebate was supposed to reflect Aloha’s share of the fly-drive advertising costs paid for by Budget. The $7.00 fly-drive remained in effect through September, 1973. At that time, a new program was developed in which Aloha did not pay Budget on a per car basis, but instead a lump sum purportedly for its share of advertising costs. The post-$7.00 fly-drive agreement lasted until 1975.

In April, 1972, Budget and Pan American World Airways began a similar program. In it, Pan Am paid Budget $5.00 per rental.

*1406 In June, 1972, the Civil Aeronautics Board (CAB) began investigating the Budget-Pan Am agreement. The CAB was concerned that the scheme permitted Pan Am to circumvent § 403(b) of the Federal Aviation Act, 49 U.S.C. § 1373(b) (1976), which required air lines to charge customers pursuant to prescribed tariffs. The CAB closed its investigation of the Budget-Pan Am agreement without determining the legality of the arrangement. Roberts contends that the CAB ceased its investigation because Pan Am submitted falsified documents which stated that Pan Am reimbursed Budget solely on its share of advertising costs rather than on a per car basis.

In 1973, the CAB began a similar investigation of the Aloha-Budget fly-drive agreement, culminating in a 1975 order requiring Aloha to cease and desist participation in the program. On review, the Court of Appeals for the District of Columbia Circuit upheld the CAB insofar as it found that the $7.00 fly-drive program constituted illegal rebating. It did not, however, find substantial evidence to support the CAB’s holding that the post-$7.00 agreement was illegal. Aloha Airlines, Inc. v. CAB, 598 F.2d 250 (D.C.Cir.1979).

In January, 1977, Roberts commenced this action, claiming that through the fly-drive agreements Budget violated: (1) Section 1 of the Sherman Act, 15 U.S.C. § 1 (1976) (tying arrangement); (2) Section 2 of the Sherman Act, 15 U.S.C. § 2 (1976) (attempt to monopolize); (3) Section 7 of the Clayton Act, 15 U.S.C. § 18 (1976) (illegal merger); and (4) Hawaii statutory and unfair competition laws.

In January, 1980, each side filed motions for summary judgment. The district court, Judge Samuel P. King presiding, granted Budget’s motion on the antitrust claims, and determined that Roberts may proceed to trial on the unfair competition claims. 491 F.Supp. 1199.

In 1982, Judge King became ill and Judge Marion J. Callister of the District of Idaho, sitting by designation, assumed control of the action. Judge Callister denied Budget’s renewal of its motion for summary judgment on the unfair competition claims. The action was tried in June of 1982, with the court entering judgment in favor of Budget after the jury returned special verdicts. Roberts’ motion for new trial was denied.

II. ANALYSIS

On appeal, Roberts does not pursue its claims that the fly-drive agreements constituted violations of § 2 of the Sherman Act and § 7 of the Clayton Act. Instead, Roberts argues that the court erred in granting summary judgment on its claim that the fly-drive agreements constituted an unlawful tying arrangement under Sherman Act § 1 and that the district court should have granted it a new trial on the unfair competition claims.

A. Sherman Act § 1

On summary judgment, the district court rejected Roberts’ claim that the fly-drives violated § 1 of the Sherman Act either as per se illegal tying arrangements or under the rule of reason. We agree with and adopt the district court’s reasoning in its opinion reported at 491 F.Supp. 1206-10, 1212-17, and add the following observations.

Notwithstanding Roberts’ assertions to the contrary, summary judgment may be appropriate in antitrust actions when there is no “significant probative evidence tending to support the complaint.” First National Bank of Arizona v. Cities Service Co., 391 U.S. 253, 290, 88 S.Ct. 1575, 1593, 20 L.Ed.2d 569 (1968); see Ron Tonkin Gran Turismo, Inc. v. Fiat Distributors, Inc., 637 F.2d 1376, 1381 (9th Cir.), cert. denied, 454 U.S. 831, 102 S.Ct. 128, 70 L.Ed.2d 109 (1981). Especially in cases where motive and intent are not determinative, summary judgment may be used in antitrust actions. Roberts v. Elaine Powers Figure Salons, Inc., 708 F.2d 1476, 1478 (9th Cir.1983). Our review, which is de novo, id., convinces us that summary judgment was called for in this case.

*1407 1. Per Se Illegal Tying Arrangement

Simply stated, a tying arrangement is when “a seller refuses to sell one product (the tying product) unless the buyer also purchases another (the tied product).” Elaine Powers, 708 F.2d at 1478-79. Three primary elements establish a per se illegal tying arrangement: (1) a tie-in between two distinct products or services; (2) sufficient economic power in the tying product market to impose significant restrictions in the tied product market; and (3) an effect on a not-insubstantial volume of commerce in the tied product market. Id. Roberts argues, and we assume, that it had adequate support for the first and third elements. It is the second element which concerned the district court. Another concern of the court involved the related requirement that there must be some modicum of coercion exerted upon the purchaser of the tied product by the seller of the tying product. Id.

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Bluebook (online)
732 F.2d 1403, 15 Fed. R. Serv. 1293, 1984 U.S. App. LEXIS 22698, Counsel Stack Legal Research, https://law.counselstack.com/opinion/roberts-waikiki-u-drive-inc-v-budget-rent-a-car-systems-inc-ca9-1984.