Union City Barge Line, Inc. v. Union Carbide Corp.

823 F.2d 129
CourtCourt of Appeals for the Fifth Circuit
DecidedAugust 3, 1987
DocketNo. 85-2878
StatusPublished
Cited by39 cases

This text of 823 F.2d 129 (Union City Barge Line, Inc. v. Union Carbide Corp.) 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
Union City Barge Line, Inc. v. Union Carbide Corp., 823 F.2d 129 (5th Cir. 1987).

Opinions

JOHN R. BROWN, Circuit Judge:

In the Beginning

Plaintiff-appellants Union City Barge Line (Union Barge) and Union City Fuel Company (Union Fuel) (collectively “Union City”) appeal three motions for summary judgment entered against them. Union City complains primarily that it was unfairly “stonewalled” in its attempts to conduct discovery. This may be an accurate description of the pre-trial proceedings. Nevertheless, Union City’s alleged injuries by the defendants are outside the purview of antitrust law relief. Accordingly, we affirm the trial court’s judgment as to all defendants. We also remand for clarification the dismissal of the remaining pendant state law claim.

Greed and the Gulf Coast

This appeal is a consolidation from three motions for summary judgment granted to defendants Union Carbide Corporation (Carbide), Gulf Coast Petroleum Products, Inc. (Gulf Coast), and E.W. Saybolt & Company, Inc. (Saybolt). A fourth defendant, Channel Fueling Company (Channel), was dismissed on a 12(b)(6) motion.1 Channel has since settled with Union City and is no longer in the appeal. Portions of the District Court’s memorandum and order granting Channel’s motion for dismissal, however, are integrated into the other defendants’ orders, and thus remain relevant here.

Union Barge provided towing services on the inland waterways of the Gulf Coast. Union Fuel was a midstream fueling business. It had one place of business in Port Arthur, Texas. Union City’s2 complaints focus on business transactions between Channel Fueling and Carbide. Channel, another midstream fueler, had seven locations on the Intracoastal Waterway west of the Mississippi. Carbide was a substantial user of midstream fueling services in the area where Channel and Union Fuel did— and competed for — much of their business.

In September of 1979, Channel entered into a so-called redelivery agreement with Carbide. In essence, Channel agreed to store fuel belonging to Carbide in Channel’s inventory, and to “redeliver” Carbide’s fuel to Carbide’s vessels for a redelivery fee, varying from four to five cents per gallon. The redelivery program’s selling point was convenience. Carbide could deposit fuel in any of Channel’s several storage locations and later, Channel would redeliver fuel to any of Carbide’s vessels at any location convenient to a Carbide vessel.

After this redelivery agreement was struck, it soon became mired in crass, unsophisticated bribery: Channel agreed to pay Carl Nutter, then a trusted employee of Carbide, one cent for every gallon of fuel redelivered to Carbide by Channel. Carl Nutter then set up Gulf Coast, a shell corporation, to receive these kickbacks and payments from Channel.3 Union City al[132]*132leged that additional motives for these secret payments were (i) to influence Carbide to terminate its towing contract with Union Barge, which Channel knew would be damaging to Union Barge’s sister company, Union Fuel, and (ii) to influence Carbide to make disparaging statements about the businesses of Union Barge and Union Fuel. Because of this scheme, Union Fuel claimed that it was unable to compete for Carbide’s midstream fueling business on an equal basis with other midstream fuelers.

Saybolt, the third defendant, is engaged in the business of measuring and gauging liquid petroleum products for the purpose of certifying quantities delivered by vendors to purchasers and others. Union City alleged that Carbide bribed Saybolt to induce it to falsify gauging reports so that Union Barge would appear to have pumped fuel from a Carbide barge into the fuel barge of Union Fuel while the barge was in the custody of Union Barge. Union City stated that, as a result, the contractual relationship between Union Barge and Carbide was interfered with and that Carbide ultimately decided to terminate, without justification, the towing agreement it had with Union Barge.

In September 1984, Union City filed this suit. Union Barge alleged three causes of action: (i) illegal commercial bribery, under § 2(c) of the Robinson-Patman Act, 15 U.S.C. § 13(c), against all defendants; (ii) interference with the contractual relationship between Union Barge and Carbide against Channel and Saybolt; and (iii) wrongful termination of contract against Carbide. Union Fuel alleged (i) another count of illegal commercial bribery against all defendants, under § 2(c) of the Robinson-Patman Act; (ii) interference with business relationships of Union Fuel, against all defendants; and (iii) intent to destroy the business of a competitor in violation of § 1 of the Sherman Act, 15 U.S.C. § 1, against Carbide, Gulf Coast and Saybolt.

Undiscoverable Discovery

The course and scope of discovery in this case is at the center of Union City’s appeal. Union City maintains that the District Court’s “inaction” and the defendants’ “stonewalling” precluded meaningful discovery. In response, defendants urge that Union City’s sloppy prosecution of the case, rather than lack of cooperation on their part or error by the trial judge, is the root of any deficiency in discovery.

During the pre-trial proceedings, Union City filed a request for a discovery conference pursuant to Rule 26(f).4 Although the language of the rule is mandatory that “the court shall hold a discovery conference upon request,” the District Court never ruled on the motion.

A year after Union City filed its original complaints, the three defendants here on appeal filed their motions for summary judgment. Carbide and Saybolt moved in late August, Gulf Coast in late October. Union City timely opposed Gulf Coast’s motion, but was over one month late in responding to Carbide’s and Saybolt’s motions. Union City’s memoranda opposing summary judgment adopt a straddle position. In essence, Union City attempts to both rebut the motions for summary judgment on the merits, all the while reurging and “reserving” the right to file supplemental opposition to the summary judgment motions “following completion of discovery.” Although Union City was far from zealous in its efforts to prosecute this case, defendants also ably avoided Union City’s document requests, interrogatories and deposition requests. Unfortunately, the District Court never intervened or ruled on the competing motions to quash or compel. Indeed, the court was for all practical purposes invisible in supervising this case.

The District Court granted summary-judgment for the three present defendants on November 21, 1985. The court also granted Channel’s motion to dismiss.5 In granting Channel’s motion, the District [133]*133Court addressed the Robinson-Patman Act claims, setting out the rationale applicable as to all defendants. In essence, the District Court stated that the payments paid to or received by the various defendants were in connection with the sale of services, not “goods, wares, or merchandise,” as required by the Robinson-Patman Act. Accordingly, the defendants’ activities all fell outside the ambit of the Robinson-Patman Act. In addition, the District Court held that neither Union Barge nor Union Fuel were “competitors” of any of the defendants, and thus could not prosecute a commercial bribery action under § 2(c) of the Robinson-Patman Act.

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Bluebook (online)
823 F.2d 129, Counsel Stack Legal Research, https://law.counselstack.com/opinion/union-city-barge-line-inc-v-union-carbide-corp-ca5-1987.