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JONNET DEV. CORP. v. CALIGUIRI

January 25, 1983

JONNET DEVELOPMENT CORPORATION, Plaintiff,
v.
RICHARD S. CALIGUIRI, DAVID MATTER, PAUL BROPHY, GEORGE CHARLTON, ED DeLUCA, LOUIS GAETANO, STEVE GEORGE, TED HARDY, BEN HAYLLAR, ROBERT LURCOTT, HIRAM MILTON, JOHN ROBIN, CITY OF PITTSBURGH, URBAN REDEVELOPMENT AUTHORITY OF PITTSBURGH, CONSOLIDATED RAIL CORPORATION, a/k/a CONRAIL, EDWARD G. JORDAN, GRANT-LIBERTY DEVELOPMENT GROUP, a/k/a HILTON INTERNATIONAL, VISTA INTERNATIONAL, THE BUNCHER COMPANY, JACK G. BUNCHER, MONDEV-BUNCHER STATION ASSOCIATION, and MONDEV INTERNATIONAL OF MONTREAL, Defendants



The opinion of the court was delivered by: ZIEGLER

 Presently before the court are the motions of defendants to dismiss the complaint of Jonnet Development Corporation (Jonnet) and for summary judgment. Since discovery has been completed, and all issues have been addressed by affidavit or otherwise, we will treat all motions pursuant to Rule 56. The motions of defendants for summary judgment will be granted.

 I. History of Case

 Jonnet filed a civil action for money damages alleging that defendants conspired to prevent plaintiff from acquiring property known as the Pennsylvania Station (Penn Station) in Pittsburgh, Pennsylvania. Plaintiff allegedly planned to construct a hotel on the site. The complaint alleges a conspiracy in violation of various sections of the Sherman Act, 15 U.S.C. § 1 et seq. (1976) and plaintiff seeks treble damages, counsel fees and costs under the Clayton Act. 15 U.S.C. § 15.

 Jonnet initially sought equitable relief to prevent Consolidated Rail Corporation (Conrail) from conveying title to the property to the Urban Redevelopment Authority of Pittsburgh (U.R.A.) for valuable consideration. A hearing was held, and relief was denied due to fraud, perjury and unclean hands. The order of the district court was affirmed by the Court of Appeals, 676 F.2d 686 (3d Cir. Feb. 16, 1982), and the Supreme Court denied certiorari. 459 U.S. 834, 103 S. Ct. 77, 74 L. Ed. 2d 70 (1982). The real estate has since been conveyed to the U.R.A. for the sum of $2,750,000.

 Defendants now contend that the district court's adjudication with respect to Jonnet's claim for equitable relief is dispositive of plaintiff's claim for money damages. Defendants rely upon the concept of claim preclusion based on fraud on the court, Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238, 88 L. Ed. 1250, 64 S. Ct. 997 (1943), fraud on the parties, unclean hands and perhaps res judicata. While defendants approach is appealing, we believe that the interests of justice require the court to address plaintiff's claims on the merits.

 A.

 We are first required to determine whether, viewing the evidence and inferences in a light most favorable to plaintiff, there is a genuine issue of material fact that some or all of the defendants agreed to restrain trade unreasonably. Summary judgment should be used sparingly in anti-trust cases but Rule 56 is still viable. Harold Friedman, Inc. v. Kroger, 581 F.2d 1068 (3d Cir. 1978). Plaintiff makes no claim that defendants' conduct constituted a per se restraint of trade and thus the rule of reason is applicable. Hence under section 1 of the Sherman Act, plaintiff must prove the following elements:

 
(1) That the defendants contracted, combined or conspired among each other; (2) that the combination or conspiracy produced adverse, anti-competitive effects within relevant product and geographic markets; (3) that the objects of and the conduct pursuant to that contract or conspiracy were illegal; and (4) that the plaintiff was injured as a proximate result of that conspiracy.

 Martin B. Glauser Dodge Co. v. Chrysler Corp., 570 F.2d 72, 81 (3d Cir. 1977), cert. denied, 436 U.S. 913, 98 S. Ct. 2253, 56 L. Ed. 2d 413 (1978); Fleer Corp. v. Topps Chewing Gum, Inc., 658 F.2d 139, 147 (3d Cir. 1981). Failure to prove any one of the elements is fatal. Martin B. Glauser, 570 F.2d at 81. We find no evidence from which this court can infer that the first element of the claim has been satisfied.

 Plaintiff contends that Conrail refused to approve plaintiffs' offer to purchase the Penn Station for $2,500,000 "for the sole reason that the defendants and several of them preferred a previously approved plan of development for the general area which provided that a hotel would be built on the property immediately adjacent to the newly constructed Pittsburgh Convention Center." Amended pre-trial statement of plaintiff at 3. According to Jonnet, its planned hotel would compete with the hotel adjacent to the Convention Center and defendants prevailed upon Conrail to reject plaintiff's offer to accommodate the U.R.A. and the redevelopment plan of the City of Pittsburgh.

 The weakness in plaintiff's contention is that there is no evidence, direct or circumstantial, that Conrail, or its Chairman, conspired with anyone. The company made a unilateral business decision to sell the property to the U.R.A. for $2,750,000. The offer exceeded plaintiff's offer by $250,000 but more importantly, Conrail viewed the decision to be in its best interest to accommodate the Authority. The decision was not made to control the use to which the property would be put because Conrail had no interest in any particular development. We view nothing illegal in the Chairman's apparent desire to accommodate the Authority since it is a reasonable corporate interest to maintain a harmonious relationship with the public sector whenever possible and the Authority had the power to acquire the property by eminent domain, if it desired. In short, we find no evidence from which an inference can be drawn that Conrail or its Chairman conspired with anyone to prevent Jonnet Development Corporation from purchasing the Penn Station property or conspired with anyone to prevent the construction of a hotel at the site.

 Edward T. Sweeney & Sons, Inc. v. Texaco, Inc., 637 F.2d 105 (3d Cir. 1980) teaches that unilateral action, no matter what its motivation, is not violative of section 1 of the Act. To establish concerted action, there must be "a conscious commitment to a common scheme designed to achieve an unlawful objective." Id. at 110-111. Here there is no evidence that the alleged participants had a unity of purpose; or a common design; or a meeting of the minds. Conrail's decision was unilateral because it was free to sell the property to anyone, and all offers were subject to approval of the board. Second, assuming arguendo that the U.R.A. was a competitor of plaintiff, as an owner, Conrail was free to sell the real estate to any competitor, or none at all. Fleer Corp. v. Topps Chewing Gum, 658 F.2d at 153. And third, there is no evidence that Conrail had any interest in preventing the construction of a hotel at the site, even if we assume that ...


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