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IAP, INC. v. MERCEDES-BENZ OF NORTH AMERICA

August 30, 1983

IAP, INC. and IMPORTED AUTOMOTIVE PARTS, LTD., Plaintiffs,
v.
MERCEDES-BENZ OF NORTH AMERICA, INC., Defendant



The opinion of the court was delivered by: BIUNNO

 This suit, filed August 31, 1979, alleges an unlawful combination and conspiracy said to be an unreasonable restraint of trade or commerce in violation of section 1 of the Sherman Act (15 U.S.C. § 1) and section 3 of the Clayton Act (15 U.S.C. § 14).

 The suit is a private suit with a right of action arising under sections 4 and 16 of the Clayton Act (15 U.S.C. § 15 and § 26), with jurisdiction asserted under 28 U.S.C. § 1337.

 The affidavit of Louis L. Berg, president and principal shareholder of both corporate plaintiffs, sworn to in April, 1982 (and attached to the Notice of Motion for Class Determination filed April 28, 1982) discloses that the suit here was filed as a "class action" shortly after the United States filed its own civil injunction action against the same defendant in the U.S. District Court for the Northern District of California, see par. 2 of affidavit, evidently about August 15, 1979.

 Ordinarily, the period of limitation for an action to enforce a private cause of action under section 4 of the Clayton Act (15 U.S.C. § 15) is 4 years after the cause of action accrued. In this case, the filing date of August 31, 1979 would reach back to September 1, 1975.

 However, the effect of another provision is to suspend the running of the statute of limitations for private civil suits for the period of time while a civil proceeding instituted by the United States is pending, and for one year thereafter. See 15 U.S.C. § 16(i).

 As a consequence, a civil suit filed now may reach back 4 years from filing, not counting the time period for which the federal suit was pending plus one year. The exact dates of that period are not formally in the present record here, but from what is here (about September 15, 1979 to March 15, 1982), the indication is that such a new suit could reach back to some time in 1975 or about 8 years.

 Soon after this suit was filed, there was a motion by defendant to stay it pending disposition of the suit by the United States, and a stipulation and order to that effect was made under date of January 28, 1980, with arrangements for plaintiffs here to have access (for inspection and copying) to all discovery materials in the California action by the United States.

 The suit by the United States was terminated on March 15, 1982, with a Rule 41 dismissal bearing that date and filed that date (See Exh. E to notice of motion for class action determination [sic]). Nearly a month and a half later, on April 29, 1982, proceedings in the previously stayed action here were activated by the service and filing of a motion for class action certification.

 The class described in the complaint, par. 7(a), was composed of three segments having an interest in replacement parts for Mercedes-Benz cars. These were described as:

 
. . . Independent [parts] distributors, allegedly deprived of the opportunity to compete freely for the sale of replacement parts to Mercedes-Benz dealers [presumably for use in or on Mercedes-Benz cars].
 
. . . Mercedes-Benz dealers deprived of the opportunity to purchase replacement parts [presumably for Mercedes-Benz cars] in a free and open competitive market.
 
. . . Consumers of repair services to Mercedes-Benz cars deprived of the benefits of free and open competition in the market of [sic] Mercedes-Benz replacement parts.

 The motion for certification, however, describes a class resembling, but broader than, the first group and excluding the second and third groups, namely:

 
. . . All wholesale distributors of repair and replacement parts for imported automobiles in the United States.

 The class described in the motion is broader than the first group to the extent that it embraces all makes of imported automobiles, yet narrower in that it is limited to wholesale distributors. As defined in the complaint the first group would have embraced independent distributors without limiting them to wholesale. As is well known, and some nationally familiar names were mentioned during the hearings, there are many automobile parts stores selling parts, accessories and supplies throughout the country and have been since the automobile came into vogue.

 In any event, it was only by affidavit of plaintiff's attorney of record, sworn to July 19, 1982, that the redefinition of the class was suggested in contrast to the definition originally set out in paragraph 7(a) of the complaint filed August 31, 1979. That affidavit was filed July 22, 1982 as part of a group of papers submitted over a period of time in connection with the motion by plaintiffs for class action certification heard September 23, 1982 and continued to a date to be set. At the same time the court was informed that all claims for money damages were out of the case, and only the matter of injunctive relief remained.

 The continuance of the motion was due to the court's suggestion that defendant bring on a motion for summary judgment in light of representations made at the hearing in respect to notification sent by defendant to all its dealers in this country in connection with litigation in another court (the "Technical Learning" case).

 The summary judgment motion was brought on in due course, supported by a bulky volume of exhibits, for January 10, 1983. By stipulation and order filed January 6, 1983, the motion was continued to January 24, 1983, when argument was heard.

 Plaintiffs filed no responding papers to meet the factual showings made by defendant on its motion for summary judgment. Instead, on January 10, 1983, plaintiffs filed a set of documents captioned "Plaintiffs' response to defendant's motion for summary judgment and plaintiffs' application pursuant to Rule 23(e), F.R.Civ.P., for an order dismissing the action." These papers consisted of an affidavit of Morris Schuller, general manager and secretary-treasurer of IAP, Inc., which expressed the view that the letter to defendant's dealers, in the Technical Learning case, established that defendant's dealers were not contractually required by subpart 9C of the "Standard Provisions" of the Mercedes-Benz Dealer Agreement to purchase parts solely from Mercedes-Benz. Based on that understanding, taken together with the decision to limit the case to one seeking prospective injunctive relief, it was urged that the court should not grant defendant's motion for summary judgment but instead should direct the publication of notice to members of the redefined class, informing them that the present action had been dismissed with prejudice to the two named plaintiffs, but without prejudice to others in the redefined class who might thereafter choose to file their own independent lawsuits.

 The submission closed with the request that, should the court decline to dismiss the action on the terms proposed by IAP, Inc., it should grant a reasonable adjournment or continuance of defendant's motion for summary judgment to enable IAP, Inc. to interpose papers and memoranda in opposition.

 Thus, at the argument on January 24, 1983, the court had before it a motion for summary judgment that had not been met in any way, and by a submission urging a dismissal under Rule 41 for which no motion had been filed.

 Nature of the Claim

 Mercedes-Benz automobiles are one of a larger number of products, mostly automotive, manufactured by Daimler-Benz in West Germany and sold in the United States through Mercedes-Benz of North America (MBNA) to authorized ...


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