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ALTEMOSE CONSTR. CO. v. BUILDING & CONSTR. TRADES

May 13, 1977

ALTEMOSE CONSTRUCTION COMPANY et al., Plaintiffs,
v.
BUILDING AND CONSTRUCTION TRADES COUNCIL OF PHILADELPHIA AND VICINITY et al., Defendants



The opinion of the court was delivered by: HIGGINBOTHAM

 I. INTRODUCTION

 On August 5, 1976, I filed an order granting in part and denying in part plaintiffs' alternate Motions, submitted to the Court pursuant to Fed.R.Civ.P. 11, 12 and 56, to Dismiss or Strike the Amended Counterclaims or for Summary Judgment. Soon after, on August 19, 1976, the plaintiffs moved for reconsideration of paragraphs one and two of my August 5, 1976 order, contending that the defendants' discovery responses showed no evidence of a conspiracy to set wages and, hence, that claim should have been dismissed. Furthermore, the plaintiffs averred that if any publicity campaign, about the June 5, 1973 Valley Forge incident and other altercations involving Altemose and the defendant Building & Construction Trades Council of Philadelphia and Vicinity (hereinafter "Council"), had been conducted, that such activity was protected by the First Amendment and was exempt from the application of the antitrust laws.

 II. CONTENTIONS OF THE PARTIES

 The defendants/counterclaimants asserted: (1) that Altemose, the Associated Builders and Contractors, Inc. (hereafter "ABC"), and the Chamber of Commerce of the United States of America (hereafter "Chamber"), had conspired to conduct a public relations campaign maliciously designed to make the defendants appear to be involved in a conspiracy to destroy Altemose and other open shop contractors. The publicity campaign was said to be an effort to restrain trade and prevent and eliminate competition in the construction industry in the pertinent geographic area. More specifically, the defendants maintained that the conspiracy to set wage rates consisted of three tactics: (1) the adoption by ABC of an Insurance Trust Fund, otherwise known as the "Security Plan", and the Retirement Plan, both of which are allegedly designed to fix and regulate fringe benefit rates paid to journeymen and laborers employed by open shop contractors, such fringe benefits constituting a substantial portion of tradesmen's wages, with the result that contractors using union members are foreclosed from successfully bidding against the open shop multi-employer group; (2) that Altemose and some ABC members have combined and conspired to violate the federal and state prevailing wage laws *fn1" and that such activity constitutes a violation of the Sherman Act; and, finally (3) that open shop contractors/members of ABC have combined and conspired to set uniform wage rates among themselves.

 In support of the Motion for Reconsideration, the plaintiffs have amassed an impressive amount of data including: an affidavit by Robert Hepner, Managing Director for Administrative Affairs of ABC, acknowledging the existence of both the insurance plan (said to provide life, sickness, accident and other benefits to member employees and their dependents) and the pension plan -- participation in the respective plans is said to be voluntary; Hepner's statement that contributions and benefits under the Retirement Plan are individually tailored for both employers and employees; tables from the Bureau of Labor Statistics and the Department of Labor which show no uniform wage rate for nonunion construction workers, but rather a greater dispersion in wages among nonunion as compared with union workers; copies of the documents alleged to constitute a large part of the evidence behind defendants' public relations conspiracy allegation; and, finally, a copy of the Pennsylvania Supreme Court's opinion in Altemose Construction Co. v. Building Trades Council, 449 Pa. 194, 296 A.2d 504 (1972) (hereafter "Altemose").

 In addition, the plaintiffs argue that ABC's retirement plan is consistent with the federal policy favoring multi-employer private insurance plans, as that policy is articulated in the Employee Retirement Income Security Act of 1974 (hereafter "ERISA"). The doctrine of accommodation of conflicting federal policies mandates, according to the movants, a finding that multi-employer retirement plans are not restraints of trade, even in the absence of collective bargaining. Next, the plaintiffs assert that ABC's insurance plan is exempt from the antitrust laws under the Insurance Antitrust Moratorium Act (McCarran-Ferguson Act) of March 9, 1945, 59 Stat. 33, 15 U.S.C. §§ 1011 et seq. In response to the claim that Altemose and other members of ABC have conspired to manipulate and violate the prevailing wage rates set on federally and state-financed construction jobs under both the Davis-Bacon Act, 40 U.S.C. § 276a et seq. and the Pennsylvania Prevailing Wage Act, 43 P.S. § 165-1 et seq., the plaintiffs urge that there is no evidence of any violations or of any conspiracy other than in alleged affidavits which the defendants have not disclosed, either to their opposing counsel or to the Court. Furthermore, the plaintiffs contend that even if Altemose and some ABC members are shown to have violated the above-mentioned Acts, there is no evidence of any conspiracy.

 In opposition to the contentions set forth above, the counterclaimants continue to assert that the insurance and pension plans violate section one of the Sherman Act, state that proof is largely in the hands of the co-conspirators from whom the defendants have had no discovery, and rely heavily on three cases in support of their contentions: Cordova v. Bache & Co., 321 F. Supp. 600 (S.D.N.Y.1970), and Jacobi v. Bache & Co., 377 F. Supp. 86 (S.D.N.Y.1974) aff'd 520 F.2d 1231 (2d Cir. 1975), cert. denied, 423 U.S. 1053, 96 S. Ct. 784, 46 L. Ed. 2d 642 (1976) (hereafter "Jacobi"); and International Ass'n Inc. of Heat and Frost Insulators and Asbestos Workers v. United Contractors Ass'n, Inc. of Pittsburgh, Pennsylvania, 483 F.2d 384 (3d Cir. 1973) modified on other grounds, 494 F.2d 1353 (3d Cir. 1974) (hereafter "International Ass'n.") In addition, the defendants, in supplemental answers to interrogatories, refer to a number of affidavits which are alleged to recount instances of wage-splitting committed by some of the plaintiffs.

 Insofar as the Amended Counterclaims allege an employer conspiracy to set wage rates through participation in ABC's Insurance and Pension Plans, the Motion for Reconsideration is GRANTED and Summary Judgment is GRANTED for the plaintiffs. The Motion for Reconsideration is also GRANTED, and Summary Judgment is GRANTED for the plaintiffs, insofar as the Amended Counterclaims allege an employer conspiracy to set uniform wage rates among themselves. However, the Motion for Reconsideration is DENIED to the extent that the Amended Counterclaims allege an employer conspiracy among various members of ABC and Altemose to violate the prevailing wage rate and thereby violate section one of the Sherman Act. Significant factual issues remain as to the circumstances under which wages were split by various plaintiffs and as to the existence of a pattern or practice among the plaintiffs to split wages in violation of the prevailing wage acts. Nonetheless, the Motion for Reconsideration is GRANTED insofar as it is alleged that the Chamber conspired to split wages in violation of the prevailing wage acts; nothing produced by the defendants to date in any way implicates the Chamber in any such alleged activity.

 III. STANDARDS FOR GRANTING SUMMARY JUDGMENT IN ANTITRUST CASES

 Summary judgment is a devise which is "used sparingly in complex antitrust litigation where motive and intent play leading roles . . . ." Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 473, 82 S. Ct. 486, 491, 7 L. Ed. 2d 458 (1962); accord, Tripoli Co. v. Wella Corp., 425 F.2d 932, 939 (3d Cir.), cert. denied, 400 U.S. 831, 91 S. Ct. 62, 27 L. Ed. 2d 62 (1970). The Court of Appeals for the Third Circuit recently noted, despite the Supreme Court's caution against frequent use of summary judgment in antitrust cases, that the decision in Poller was "not meant to express a per se rule", Sound Ship Bldg. Corp. v. Bethlehem Steel Co. (Inc.), 533 F.2d 96, 100 n.11 (3d Cir. 1976) (hereafter "Sound Ship"). Summary judgment is appropriate, even in antitrust cases, when an adverse party, in contravention of F.R.Civ.P. 56(e), *fn2" rests upon the mere allegations or denials of his pleading and fails to set forth specific facts showing that there is a genuine issue for trial. Sound Ship, supra, 533 F.2d at 99. This is such a case.

 The defendants' failure to raise any issues for trial cannot be excused by their inability to obtain discovery from the movants in this case. Counsel for the defendants blithely chose to ignore F.R.Civ.P. 56(f), and merely asserted that the information was in the control of the plaintiffs. Yet, it has been clearly established that a party opposing a motion for summary judgment, when unable to present facts by affidavit or otherwise which would justify a denial of the motion, should apply by affidavit for a continuance or an adjournment in order to allow for necessary discovery.

 No such affidavit has been filed in this case; there has been no motion to compel the production of answers to the counterclaimants' interrogatories. It is clear that an application for a continuance, consistent with rule 56(f), must be made by an affidavit stating the reasons for a party's inability to muster the facts supporting a denial of the motion and "these reasons must be genuine and convincing to the court rather than merely colorable." See Robin Construction Co. v. U.S., 345 F.2d 610, 614 (3d Cir. 1965). "The mere averment of exclusive knowledge or control of the facts by the moving party is not adequate; the opposing party must show to the best of his ability what facts are within the movant's exclusive knowledge or control; what steps have been taken to obtain the desired information pursuant to the discovery procedures under the Rules; and that he is desirous of taking advantage of these discovery procedures." 6 J. Moore, Federal Practice P 56.24 at 2878 (8th ed. 1976) (footnote omitted). When the record, as this one, is barren of any request for a continuance or an adjournment by the multiple opponents of the motion for summary judgment, and when the parties have had more than ample time to file either a motion for a continuance or a motion for production of answers to interrogatories, *fn3" then the court is authorized to grant summary judgment should no genuine issues of fact appear of record, even in an antitrust case. See Scooper Dooper, Inc., v. Kraftco Corp., 494 F.2d 840, 849-850 (3d Cir. 1974).

 Parenthetically, despite defendants' failure to raise factual issues which would warrant the court's forbearance in granting summary judgment at this time in all instances save one, the defendants have successfully raised a prolix of factual issues insofar as they contend that some members of ABC and Altemose have combined to abridge the prevailing wage laws. The defendants maintain that through this conspiracy to undercut the prevailing wage laws, the conspirators are able to depress wages in violation of section one of the Sherman Act. Defendants are not asserting, contrary to plaintiffs' interpretation of the counterclaims, that plaintiffs violate the antitrust laws when they pay the prevailing rate in accordance with federal and state laws. On the contrary, the defendants assert that journeymen are intentionally not paid the prevailing rate -- for example, a journeyman-carpenter is paid for 4 hours work as a carpenter and for 4 hours work as a laborer, even though that person works 8 full hours as a carpenter. There are contested issues of fact as to the manner of and the justification for the plaintiffs' payment of split wages; these issues cannot be resolved on a motion for summary judgment.

 Alternately, the plaintiffs suggest that even if individual contractors are shown to have abridged the prevailing rate laws, there is insufficient data to indicate any conspiracy. However, by plaintiffs' own count, the defendants have cited over 20 incidents where ABC members, ...


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