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COLEMAN MOTOR CO. v. CHRYSLER CORP.

March 29, 1974

Coleman Motor Company,
v.
Chrysler Corporation and Chrysler Motor Corporation


Snyder, D.J.


The opinion of the court was delivered by: SNYDER

SNYDER, District Judge.

 This matter comes before the Court on Defendants' Motion for Judgment Notwithstanding the Verdict and Alternatively for a New Trial. For the reasons as hereinafter set forth both Motions will be denied.

 BACKGROUND.

 Plaintiffs, Coleman Motor Company, a corporation, and Clarence Coleman, its President and sole stockholder, filed this anti-trust suit against Chrysler Corporation, the manufacturer of Chrysler, Plymouth and Dodge vehicles, and Chrysler Motor Corporation, its wholly owned sales subsidiary (which parties have been considered primarily as one entity and will be referred to as "Chrysler"), charging violations of Sections 1 and 2 of the Sherman Act. The individual Plaintiff was dropped as a party before the trial began. The Court denied Defendants' Motion for Directed Verdict at the close of all of the evidence and the case was submitted to the jury on Special Interrogatories asking:

 (1) Whether Defendants had engaged in any combination or conspiracy which restrained trade in Dodge vehicles at the retail level in Allegheny County, Pennsylvania?

 (2) Whether Defendants had attempted to monopolize trade in Dodge vehicles at the retail level in Allegheny County, Pennsylvania?

 (3) Whether the Plaintiff had sustained any damages by reason of any such violation of the anti-trust laws, and if so, how much?

 The jury answered the three questions in the affirmative and fixed the amount of the Plaintiff's damages at $300,000.00. Judgment was entered for Coleman Motor Company for $900,000.00 on November 9, 1973, and the Defendants duly filed Motions for Judgment N.O.V. and for a New Trial.

 A large part of the evidence offered at the trial was stipulated or uncontradicted, and the weight of the evidence strongly sustained the contention of the Plaintiff that there was an anti-trust violation arising out of destructive competition by other Dodge Dealerships in Allegheny County wholly or partially owned by the Defendants, which resulted in the necessity to surrender the Coleman franchise on July 17, 1969.

 Coleman became a Dodge and Plymouth Dealer in 1955, with capitalization of $75,000.00 supplied by Mr. Coleman and another individual. In the Fall of 1959 (the beginning of the 1960 automobile model year) Coleman's Agreement, as well as the Agreements of most Dodge-Plymouth Dealers, was amended so that Coleman henceforth was solely a Dodge Dealer and others became Plymouth Dealers. To take the place of the smaller model Plymouths, Chrysler furnished a new model Dodge, the Dodge Dart, which had good public acceptance.

 Prior to 1954, Chrysler had sold its automotive products to privately financed dealers for resale to the public. In 1954 Chrysler adopted a new plan for franchising known as the "Dealer Enterprise Plan" (hereinafter called D.E.) whereby it would furnish to one desiring to become a dealer, 75% of the money needed to open a dealership and the individual would supply 25%. This plan was developed in response to an imperative to increase the quantity of sales and, because individuals were finding it more and more difficult to raise sufficient capital to become dealers. Under D.E. the individual would become the President and General Manager of the local corporation and a Member of its Board of Directors. This local person was to be entitled to an annual bonus of 25% of the corporation's profits before taxes, but was subject to the obligation to use one-half of the bonus in buying Chrysler's investment, represented by stock in the local corporation.

 D.E. did not provide a complete solution to the problem because many individuals who desired to become Chrysler Dealers found difficulty in supplying even 25% of the capital necessary to open a dealership. Chrysler was experiencing declining sales and an inability to secure dealers. In 1958 it had sustained net losses of $34,000,000.00 and in 1959 they had losses of $5,000,000.00. Its share of the United States' automobile market dropped from 20% to 10%.

 Thus, in 1961, Chrysler broadened its dealer franchising arrangements so as to supply initially 100% of the capital necessary to open a dealership, such dealerships being known as "Contractual Dealerships" (hereinafter called Contractual); this plan covered the situation until the Manager, either through profits or from other sources, purchased 25% of the stock and could thus come under D.E. In 1964, Chrysler further broadened the plan to lend ...


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