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Sound Ship Building Corp. v. Bethlehem Steel Co.

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT


filed: April 23, 1976.

SOUND SHIP BUILDING CORP., A NEW YORK CORPORATION, APPELLANT,
v.
BETHLEHEM STEEL COMPANY (INCORPORATED), A PENNSYLVANIA CORPORATION AND BETHLEHEM STEEL CORPORATION, A DELAWARE CORPORATION

ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY D.C. Civil No. 112-73. {Counsel}{Q}Counsel{/Q}{/Counsel}

Hannoch, Weisman, Stern & Besser, Newark, New Jersey, Charles H. Cottingham, for Appellant.

Riker, Danzig, Scherer & Debevoise, Newark, New Jersey, Dickinson R. Debevoise, C. H. Barnette, David M. Beckwith, E. C. Perkins, for Appellee.

Van Dusen, Adams and Rosenn, Circuit Judges.

Author: Per Curiam

MEMORANDUM SUR PETITION FOR REHEARING BEFORE THE PANEL

After the filing of the opinion in this matter, a petition for rehearing before the panel was presented. In it, Sound Ship took issue with several of the factual assumptions underlying the opinion, emphasizing that the appeal was from a summary judgment entered by the district court, and that the presence of material factual issues mandated reversal. It further stated in its petition that the point that we deemed dispositive of the appeal - Sound Ship's failure to set out any facts showing a causal nexus between Bethlehem's acts and Sound's losses - had not been adequately briefed. The reasons asserted for the inadequacy were that the issue of causation had neither been raised in the district court nor urged in this Court by Bethlehem as a ground for affirmance.

We granted permission to Sound Ship to file a brief in support of its petition for rehearing and to Bethlehem to file a brief in opposition. The parties were specifically requested to address the question whether there is anything in the record sufficient to show a causal relationship between the restrictive covenant imposed by Bethlehem and the losses allegedly suffered by Sound Ship.*fn1

Sound Ship maintains that we neglected in our opinion to account for a critical portion of the record. That portion of the record, it is claimed, presents evidence that Bethlehem offered to remove the covenant from the Mariner's Harbor property only if Sound Ship would pay the full $250,000 waiver fee immediately. The requirement that the full fee be paid "up front" -- rather than over the remaining thirteen years of the life of the covenant, as we described it in our opinion -- is alleged to provide the causal link that we found lacking between Bethlehem's acts and Sound's losses. It does so, the argument continues, because it makes incorrect our understanding that the record fails to demonstrate that the damages flowing from the choice of land ultimately made by Sound Ship were caused by Bethlehem. Since Sound Ship could not afford to pay $250,000 immediately, the argument goes, it had no choice but to rent the Hoboken site. Thus, Sound Ship contends, its losses were attributable to Bethlehem's refusal to release the Mariner's Harbor covenant for a reasonable price and on reasonable terms.

We have reread the record carefully, but do not find it to support the assertions made by Sound Ship in its petition for rehearing. The record nowhere contradicts the statement made in our opinion that Bethlehem offered "to lift all restrictions [on the Mariner's Harbor property] for a price of $250,000, to be paid over the remaining thirteen years that the covenant would otherwise have been effective."*fn2 Nor do we find any factual material set forth in the depositions or other documents in the record indicating that the price of the Hoboken property or of waterfront land utilizable as a shipyard generally was affected by the restrictive covenant, or that Bethlehem in any way induced Sound Ship to lease the site in Hoboken. Rather, our review reveals the same factual pattern we noted originally, and it leads us to the same result: Sound Ship did not articulate in the depositions and other documents any causal nexus between Bethlehem's acts and Sound's losses.

Sound Ship has also suggested that we were incorrect in concluding in our opinion that the victim of a restrictive covenant must pay for the cancellation of such covenant in order to have a cause of action under the antitrust laws. That rule was neither embraced nor implied in our opinion. We held merely that an antitrust plaintiff, in a factual situation such as we have here, fails to show the requisite causal link when it has an option of renting property (the Mariner's Harbor site) whose price has arguably been affected by the acts of the defendant, but instead chooses to lease property (the Hoboken site) that is less suitable to its needs and costs more, so long as the rental rate for the property actually leased has not been affected by the defendant.*fn3

The petition for rehearing before the panel will be denied.

Disposition

The petition for rehearing before the panel will be denied.


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