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April 10, 1975


The opinion of the court was delivered by: LUONGO

 Plaintiffs, Stanley Mogul and Nathan Levin, instituted suit against General Motors Corporation (GMC) and the Paul J. Schneider Company (Schneider Company), *fn1" charging violations of the Sherman Antitrust Act, 15 U.S.C. ยง 1, et seq., arising out of GMC's refusal to approve transfer of a Cadillac-Oldsmobile dealership from Schneider Company to plaintiffs. GMC has moved for summary judgment in its favor pursuant to Rule 56(b), F.R.C.P., based upon pleadings, depositions and supporting documents already filed.

 In a motion for summary judgment, all doubt as to the existence of a genuine issue of material fact must be resolved against the moving party. First Pa. B. & T. Co. v. United States Life Ins. Co., 421 F.2d 959 (3d Cir. 1969), reh. denied December 10, 1969. GMC acknowledges that principle, but asserts that, with respect to the allegedly material issues of fact (a) plaintiffs have failed to present sufficient evidence in advance of trial to show that there are genuine issues of fact, and (b) in the alternative, even if plaintiffs have presented enough evidence to present genuine issues of fact, they are not material issues.

 The first part of GMC's alternative argument is based upon Rule 56(e), which provides:

". . . When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him."

 Although summary judgment should be used sparingly in antitrust cases, Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 7 L. Ed. 2d 458, 82 S. Ct. 486 (1962), under this provision of Rule 56, the non-moving party is under the duty to produce significant probative evidence tending to support the complaint or suffer entry of summary judgment. First National Bank of Ariz. v. Cities Service Co., 391 U.S. 253, 288-90, 20 L. Ed. 2d 569, 88 S. Ct. 1575 (1968); Chapman v. Rudd Paint & Varnish Company, 409 F.2d 635, 643-4 (9th Cir. 1969); McGuire v. Columbia Broadcasting System, Inc., 399 F.2d 902, 905 (9th Cir. 1968).

 GMC argues that the evidence which plaintiffs have produced on the alleged issues of fact is neither "significant", nor "probative", and consequently plaintiffs have failed to sustain their burden to show that there are genuine issues of fact for trial. Although there is considerable merit in this aspect of GMC's argument, it will not be necessary to decide whether plaintiffs have produced such evidence since, in my view, even if all the alleged issues of fact are resolved in plaintiffs' favor, GMC is entitled to judgment, i.e., the issues of fact are not "material." In the recitation of facts, therefore, wherever the parties are in disagreement, the facts will be resolved, and all inferences will be drawn, in plaintiffs' favor.


 GMC, through various separate divisions (Cadillac, Oldsmobile, Buick, Chevrolet, Pontiac), manufactures several makes and models of automobiles. The automobiles are distributed by each division through a dealer-franchise system set up by regions and zones. Dealer distribution points for each division are located within regions, and zone managers select dealers to operate the facilities. Dealers are independent businessmen who purchase automobiles from the appropriate GMC division and resell them to the public. There are no territorial or price restrictions on the dealers' right to resell automobiles.

 The franchise agreement between GMC and its dealers is embodied in its uniform Dealer Selling Agreement. Among othe provisions, the Dealer Selling Agreement prohibits the transfer of ownership, financial interest or active management in any dealership without the written approval of the appropriate GMC division. Each dealer controls the assets of his dealership, and is free to sell or otherwise dispose of the dealership assets (including buildings and equipment) as he sees fit, but normally such assets cannot be disposed of at full value unless the appropriate GMC division approves transfer of the dealer franchise to the prospective purchaser.

 In July 1969, Mogul and Levin were approved by the Oldsmobile division of GMC to operate a dealership (Rallye Oldsmobile, Inc.) in Coatesville, Pennsylvania. In early 1970, they decided to dispose of their interest in Rallye Oldsmobile and seek a larger dealership.

 In April 1970, plaintiffs learned that Paul J. Schneider (Schneider), owner of Schneider Company, a Cadillac-Oldsmobile dual dealership in Doylestown, Pennsylvania, was about to dispose of his dealership because of failing health. Plaintiffs entered into negotiations with Schneider with the view to acquiring the dealership assets of Schneider Company. While such negotiations were going on, plaintiffs entered into an agreement, dated May 29, 1970, to sell their stock in Rallye Oldsmobile, Inc. to one Ted Harrison, subject to the approval of Oldsmobile division of GMC. By letter of intent dated June 8, 1970, plaintiffs advised Oldsmobile division of their agreement with Harrison.

 Donald J. Salmeri, then Philadelphia Zone Manager for Oldsmobile division, was aware of plaintiffs' interest in and negotiations for the Schneider Company agency commencing in April 1970. During the period March-June, 1970, however, Salmeri was considering one Joseph H. Higgins for a Cadillac-Oldsmobile dealership at Manahawkin, New Jersey, or for the Schneider Company agency at Doylestown. Higgins was an attorney and a former New Jersey Assemblyman whose experience in the automobile business was somewhat limited. At Salmeri's suggestion, Higgins visited Schneider on June 25, 1970 and informed Schneider that he had been sent by Salmeri to take a look at the dealership. Higgins' visit prompted Schneider to call plaintiffs and advise them that if they wanted to buy, they would have to conclude their negotiations immediately. This led to the preparation and execution of a handwritten document, dated June 26, 1970, by which plaintiffs agreed to purchase the assets of Schneider Company. The agreement provided, inter alia, that it was subject to (1) plaintiffs' arranging necessary financing, and (2) approval by the Cadillac and Oldsmobile divisions of GMC. Upon failure of either condition, the $20,000 deposit paid at signing was to be returned.

 At some time between June 29 and July 8, the June 26, 1970 agreement along with plaintiffs' Dealer Selling Agreement applications and Source of Fund Statements, were tendered to and rejected by Salmeri. *fn2" On July 8, 1970, Schneider signed a letter of intent, addressed to Salmeri at Oldsmobile, advising of his agreement to sell the assets of Schneider Company to plaintiffs. Mogul and Levin delivered that letter on the same day to James Powers, Assistant Zone Manager. The next day, July 9, plaintiffs met with Salmeri and were advised that, because they were still the owners of the ...

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