The opinion of the court was delivered by: VANARTSDALEN
These are private antitrust actions
brought under Sections 4 and 16 of the Clayton Act, 15 U.S.C. §§ 15 and 26. The lawsuits, since their inception in 1971, have been refined so that they are premised solely upon an alleged illegal tie-in under § 1 of the Sherman Act,
15 U.S.C. § 1. Plaintiffs contend that the defendants, major oil companies,
Bogosian v. Gulf Oil Corp., 62 F.R.D. 124, 127 (E.D. Pa. 1973).
Paul J. Bogosian operated a Gulf station as lessee of the Gulf Oil Corporation and Louis J. Parisi operated an Exxon station as lessee of Exxon Corporation. Plaintiffs originally sought to proceed as representatives of a nationwide class of service station dealers who leased stations from any of the oil company defendants. On December 19, 1973, this court denied class certification, 62 F.R.D. 124 (E.D. Pa. 1973), and plaintiffs have proceeded against the named defendants, other than their respective lessors, solely under a theory that all defendants acted "through a course of interdependent consciously parallel action." [Amended Complaints [*] 14].
For plaintiffs to succeed against those defendants who are not their lessors, it must be shown that the defendants acted in concert. The Sherman Act § 1 requires a "contract, combination . . . or conspiracy, in restraint of trade."
While as between Bogosian, the lessee, and Gulf, the lessor, a contract exists -- as between Bogosian and Getty, Shell or Exxon the same relationship does not exist.
Consequently, a "contract, combination or conspiracy" must be shown by another means, to come within the statutory confines of the Sherman Act § 1.
In the instant action the plaintiffs do not presently allege either a contract or a conspiracy. Instead they contend that "interdependent consciously parallel action" satisfies the Sherman Act § 1 requirement of concerted action.
Presently before the court are motions for summary judgment against both Bogosian and Parisi by Getty, Shell and Exxon. At the outset, it should be noted that antitrust litigation is not usually suited to summary disposition. Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 473, 7 L. Ed. 2d 458, 82 S. Ct. 486 (1962). This is due to the complexity of the factual issues as they may reflect motive or intent. Norfolk Monument Co., Inc. v. Woodlawn Memorial Gardens, Inc., 394 U.S. 700, 22 L. Ed. 2d 658, 89 S. Ct. 1391 (1969); Moore v. Jas. H. Matthews & Co., 473 F.2d 328 (9th Cir. 1973); Minnesota Bearing Co. v. White Motor Corp., 470 F.2d 1323 (8th Cir. 1973); Booth Bottling Co., Inc. v. Beverages International, Inc., 361 F. Supp. 340 (E.D. Pa. 1973); MDC Data Centers, Inc. v. International Business Machines Corp., 342 F. Supp. 502 (E.D. Pa. 1972).
Getty and Shell moved for summary judgment under the following theories:
(1) The complaints are not sufficient to state a cause of action under Sherman Act § 1 against Getty and Shell as non-suppliers since no "conspiracy" is alleged.
(2) Plaintiffs lack standing under § 4 Clayton Act, since in their depositions, plaintiffs individually state that Getty and Shell did not injure them personally in any way.
The Supreme Court has recognized that a Sherman Act § 1 conspiracy may be proven without a formal agreement. Interstate Circuit, Inc. v. United States, 306 U.S. 208, 83 L. Ed. 610, 59 S. Ct. 467 (1939). As a consequence courts have looked to the conduct of the defendants, which would be sufficient to prove the conspiracy. United States v. General Motors Corp., 384 U.S. 127, 143, 16 L. Ed. 2d 415, 86 S. Ct. 1321 (1966); United States v. Singer Mfg. Co., 374 U.S. 174, 193, 10 L. Ed. 2d 823, 83 S. Ct. 1773 (1963); United States v. Parke, Davis & Co., 362 U.S. 29, 44, 4 L. Ed. 2d 505, 80 S. Ct. 503 (1960); Theatre Enterprises, Inc. v. Paramount Film Distributing Corp., 346 U.S. 537, 541, 98 L. Ed. 273, 74 S. Ct. 257 (1954); American Tobacco Co. v. United States, 328 U.S. 781, 90 L. Ed. 1575, 66 S. Ct. 1125 (1946); Delaware Valley Marine Supply Co. v. American Tobacco Co., 297 F.2d 199, 202 (3d Cir. 1961); William Goldman Theatres v. Loew's, Inc., 150 F.2d 738, 743 (3d Cir. 1945); Todhunter-Mitchell & Co., Ltd. v. Anheuser-Busch, Inc., 375 F. Supp. 610, 622 (E.D. Pa. 1974); Overseas Motors, Inc. v. Import Motors Limited, Inc., 375 F. Supp. 499, 531 (E.D. Mich. 1974); A.P. Hopkins v. Studebaker Corp., Onan Div., 355 F. Supp. 816, 826-27 (E.D. Mich. 1973), aff'd, 496 F.2d 969 (6th Cir. 1974); Fiumara v. Texaco, Inc., 204 F. Supp. 544, 548 (E.D. Pa.), aff'd, 310 F.2d 737 (3d Cir. 1962).
The courts, however, have repeatedly held that mere conscious parallelism, viz., knowingly engaging in parallel business activity by and among competitors, standing alone, is insufficient to support a conspiracy allegation under Sherman Act, § 1. Theatre Enterprises v. Paramount Film Distributing Corp., supra at 541; Klein v. American Luggage Works, Inc., 323 F.2d 787, 791 (3d Cir. 1963); Delaware Valley Marine Supply Co. v. American Tobacco Co., supra ; Lawlor v. National Screen Service Corp., 270 F.2d 146, 155 (3d Cir. 1959); Overseas Motors, Inc. v. Import Motors, Ltd., Inc., supra at 531.
Plaintiffs contend that interdependent consciously parallel action is different from mere conscious parallel action and supports a Sherman Act § 1 cause of action under the doctrine of Wall Products Co. v. National Gypsum Co., 326 F. Supp. 295 (N.D. Cal. 1971).
Rather than merely alleging "conscious parallelism" as defendants seem to infer, the complaints allege significantly more. The complete phrase utilized by plaintiffs is "interdependent consciously parallel action," (paragraph 14), which obviously is not the same as mere "conscious parallelism."
Plaintiffs "Supplemental Memorandum Sur Summary Judgment", p. 1-2. Plaintiffs further assert that summary judgment should not be granted since additional discovery is required, and have so moved under Rule 56(f), Fed. R. Civ. P. Because the complaint fails, as a matter of law, to state a cause of action under Sherman Act § 1 against Getty and Shell, summary judgment will be granted
and plaintiffs' Rule 56(f) motion will be denied.
The sole issue to be determined is whether an allegation of "interdependent consciously parallel action" in a complaint is an adequate allegation of a "contract combination or conspiracy" as required by Sherman Act § 1.
Conscious parallelism usually arises in the context of sufficiency of the evidence in a Sherman Act § 1 trial in which a conspiracy or combination
had been alleged. The focus is whether evidence of conspiracy from proof of conscious parallelism together with all other evidence is adequate to support a factual finding of a conspiracy. In the instant case, however, the focus is quite different -- whether pleading no more than interdependent consciously parallel action is sufficient to support a claim under Sherman Act § 1 which requires concerted action in the form of a contract, combination or conspiracy. A complaint with broad and virtually conclusory allegations of conspiracy could be sufficient at this stage of proceedings. Cf., Brett v. First Federal Savings and Loan Ass'n., 461 F.2d 1155, 1158 (5th Cir. 1972). Because mere conscious parallelism cannot sustain a Sherman Act § 1 violation, a fortiori, the use of that phrase in a pleading without more is insufficient. The critical factor is that Sherman Act § 1 requires concerted action. Certainly, this is not to suggest a revival of the "magic words" and shibboleths of common law pleading
"when the slightest deviation from the recognized formula was fatal." 3 T. Street, The Foundations of Legal Liability, 26 (1906). Fed. R. Civ. P. 1 mandates an enlightened approach to pleadings. However, it is beyond ...