"that, in our opinion, would effectively market the GMPP without causing confusion to consumers." Amended Complaint Exhibit R (emphasis in original). Attached were three postcards, each containing one of the following phrases in large, bold capital letters: "URGENT!"; "URGENT NOTICE!"; and "RESPONSE REQUIRED." GM responded in a letter dated June 13, 1986 that the postcards were unacceptable, adding that "they could alarm and mislead consumers and cause the same type of serious customer relation problems encountered with Regency's earlier postcards." Amended Complaint Exhibit 5. That same month, Regency discontinued its nationwide sales of the GMPP.
As noted above, Regency claims that GM acted not to protect its trademarks and customer goodwill, but to push Regency out of the nationwide GMPP sales market; GM acted in concert with local dealers to eliminate Regency as a national seller because it was selling the Plan "at a steep discount in competition with local dealers." Opposition Brief, at 17. To support its conspiracy claim, Regency points to three specific instances of alleged concerted activity between GM and certain dealers designed to thwart Regency's nationwide GMPP sales. The three agreements, which plaintiff calls "The Oldsmobile National Dealer Council Conspiracy," "The Tarrytown Zone Conspiracy," and "The Memphis Zone Agreement," are summarized in the paragraphs that follow.
(1) The Alleged Oldsmobile National Dealer Council Conspiracy
The National Dealer Council is a "Board of Review" comprised of elected representatives of local Oldsmobile dealers. Opposition Brief, at 19. A division of the Council met in Atlanta in late 1985 to discuss nationwide sales of the GMPP, among other topics. Deposition of C.N. Moore, Perlberg Affidavit Exhibit M, at 47. According to an Oldsmobile official present at the meeting, there was no formal discussion of nationwide GMPP sales. Following the meeting, however, the dealers presented GM and Oldsmobile officials with a list of questions and recommendations. The dealers "recommend[ed] [that] Oldsmobile make every effort to stop the interstate solicitation of GMPP policies that are made to look like they are legitimate requests from Oldsmobile or the dealer the car was purchased from." The dealers also recommended that "bonus participation be based on sales of cars delivered by that dealership." Perlberg Affidavit Exhibit B, at P-140.
GM stated, in a written response, that while it "has no objection to the concept of dealer follow-up programs to sell the Plan, GM does not endorse such programs. . . ." Id. Regency alleges that the dealer council "was plainly successful in obtaining GM's agreement to the demanded restrictions." Opposition Brief, at 19. Regency asserts that, in response to the "demanded restrictions," GM announced that it "does not encourage GMPP telemarketing or direct mail programs to other than a dealer's own customers." Opposition Brief, at 20 (emphasis in original). GM also announced that, effective October 1, 1986, bonuses would be paid only on plans "sold by the same dealer that delivers the vehicle," and that the number of plans eligible for bonus payments would be limited to 200 percent of a dealer's retail vehicle sales in a quarter. Id.
(2) The Alleged Tarrytown Zone Conspiracy
An Oldsmobile official, Jim Coleman, called a GM official, Bernie McGuire, to inform him that he had been contacted by Atlantic Oldsmobile concerning Regency's sales of the GMPP. The dealer told Coleman that if Regency contacted his customers and asked them to cancel their current GMPP and purchase a discounted Plan from Regency, then "he was going to discontinue selling the product at his Oldsmobile store as well as several other GM stores that he had an interest in." Deposition of Bernie McGuire, Perlberg Affidavit Exhibit D, at 103. Regency alleges that, in response to this "threatened boycott," GM conspired with R.L. Polk Co., an independent firm, which generated lists of GM new car owners, to provide Regency and other dealers with purged lists that did not include the names of persons who had previously purchased Plans from their local dealers. To support its conspiracy claim, Regency also cites the testimony of a Polk official, John B. Watkins, who stated that other dealers were upset about the nationwide marketing of the GMPP and wanted Regency and other sellers to be "shut down and stopped." Deposition of John B. Watkins, Perlberg Affidavit Exhibit V, at 98-99; Opposition Brief, at 23.
(3) The Alleged Memphis Zone Agreement
Regency's President, David West, testified that in September 1985, Oldsmobile's District Manager, Jim Reid,
told me that dealers in the Memphis Zone had been complaining about my GMPP sales in their area at discounted prices. Reid told me that his boss, Larry Tierney, told him to handle it. Reid told me to stop selling there until it cooled down a bit. When I refused, Reid told me if I wanted to get new Oldsmobiles as I had in the past, I should stop soliciting there. I told Reid that I would.
West Affidavit of April 10, 1989 [hereinafter Second West Affidavit] para. 24. In a follow-up memo to Larry Tierney, Reid stated: "I've discussed the problems the Memphis Zone has had through Regency's mailings with Dave West. He now has discontinued the mailings to that part of the country. Hopefully, we won't have any more complaints from the Memphis area." Perlberg Affidavit Exhibit B, at P-106. Regency also cited a memo from the Memphis Assistant Zone Manager, C.C. Barnett, III, to an Oldsmobile official, Bernie McGuire, concerning complaints by Memphis dealers about Regency's GMPP solicitations. Barnett states: "I have explained to these dealers that Oldsmobile, GMPP, and the Corporation have tried to stop this activity, yet, have no legal right to do so according to the courts." Perlberg Affidavit Exhibit B, at 25; see Opposition Brief, at 25.
In addition to the three conspiracies discussed above, Regency alleges that GM made numerous changes in the administration of the GMPP, all of which were designed to cripple the efforts of Regency and other dealers to market the Plan nationwide. These changes include the following:
(1) GM's assertion, contrary to the GMPP Administration Guide, that no Plan sales were allowed to customers with vehicles in service for more than 12 months or 12,000 miles. Opposition Brief, at 14.
(2) GM's own entry into the GMPP nationwide sales market in July 1985, and its refusal to provide dealers with the same customer lists it was using to solicit sales. Opposition Brief, at 26-27.
(3) GM's assertion in its revised 1986 Guide that the GMPP "is not intended to be a stand-alone business." Perlberg Affidavit Exhibit B, at 185.
(4) GM's modifications to the GMPP bonus program, which included imposition of the 200 percent cap discussed above and provision of bonus dollars only when the dealer sold both the Plan and the new car. Opposition Brief, at 29.
(5) GM's failure to register Regency as a seller of the GMPP in Florida. Under Florida law, GM was required to register all of its dealers proposing to sell the Plan in that State. Regency alleges that GM did not file the application for "many months." Opposition Brief, at 33. Second West Affidavit para. 20.
(6) GM's rejection of Regency sales to GM employees when Regency sold the Plan "below cost." Regency actually made a profit on such sales because of subsequent bonus payments to its open account. Opposition Brief, at 34. Second West Affidavit para. 20; id. Exhibit I.
(7) GM's modification of its cancellation and chargeback policy governing the GMPP. These changes included (a) calculation of refunds based solely on time remaining on the Plan, rather than the lesser of time or mileage remaining, Opposition Brief, at 36, (b) GM's allowing customers who purchased their GMPP from Regency to first cancel their plans more than 60 days after the date of purchase, id. at 37; (c) GM's charging back dealers for bonuses paid on flat cancellations, id. at 37-38; and (d) GM's acceptance of "fraudulent cancellations," including instances where dates were tampered with or plans were cancelled when customers had more than 12,000 miles or 12 months on the car, even though such sales were made with zone approval, id. at 38-39.
Regency claims that the general changes to the cancellation and chargeback procedures had a more damaging effect on Regency and other nationwide sellers of the GMPP than on local dealers. Dealers who sold the Plan along with the vehicle were less likely to experience cancellations because GMPP payments were included in monthly car payments. Opposition Brief, at 36. Thus, the modifications, though not facially discriminatory, allegedly had a disparate impact on national sellers.
Regency also alleges that GM made the "improper charges" against Regency's open account without giving the dealers an opportunity to dispute the charges; eventually, the chargebacks cut into Regency's non-GMPP earnings and destroyed the dealership. Opposition Brief, at 39-40. Seen as part of an overall conspiracy to eliminate Regency as a nationwide GMPP seller, GM's use of the Plan cancellation charges was allegedly for the purpose of delivering its final blow to the dealership.
Under Fed.R.Civ.P. 56(c), summary judgment shall be granted if "there is no genuine issue as to any material fact" and "the moving party is entitled to a judgment as a matter of law." As the Supreme Court stated in Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S. Ct. 2505, 2511, 91 L. Ed. 2d 202 (1986), "at the summary judgment stage the judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." In making this determination, a court must make all reasonable inferences in favor of the non-movant. Once this is done, summary judgment will be granted if no reasonable trier of fact could find for the nonmoving party. Id.
In its motion GM has focused principally on the federal antitrust claims asserted by Regency in counts 10 through 13 of the Amended Complaint. Thus the Court will consider those claims first.
I. Federal Antitrust Claims
The Third Circuit has repeatedly stated that summary judgment in antitrust cases is disfavored. Arnold Pontiac-GMC Inc. v. General Motors Corp., 786 F.2d 564, 572 (3d Cir. 1986). The Supreme Court has held, however, and the Circuit has acknowledged, that summary judgment is proper where there is no significant evidence to support an antitrust claim. First National Bank of Arizona v. Cities Service Co., 391 U.S. 253, 290, 88 S. Ct. 1575, 1593, 20 L. Ed. 2d 569 (1968); Arnold Pontiac, 786 F.2d at 572. Regency has asserted claims under §§ 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 & 2. The Court will address the claims under each section in turn.
(A) Sherman Act § 1 Claims
Section 1 of the Sherman Act provides that "every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce . . . is declared to be illegal." 15 U.S.C. § 1. In Tunis Brothers Co. v. Ford Motor Co., 763 F.2d 1482, 1489 (3d Cir. 1985), the court noted four conditions that must be satisfied to establish a § 1 violation:
(1) that the defendants contracted, combined or conspired among each other; (2) that the combination or conspiracy produced adverse, anti-competitive effects within the 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 plaintiffs were injured as a proximate result of that conspiracy.
Id. at 1489. Because the Court finds that the plaintiff has not provided a sufficient quantum of proof necessary to establish an inference of conspiracy, it will not be necessary to determine whether the second, third and fourth conditions have been met.
The leading case interpreting § 1 of the Sherman Act is Monsanto Co. v. Spray-Rite Service Corp., 465 U.S. 752, 104 S. Ct. 1464, 79 L. Ed. 2d 775 (1984), where a terminated distributor of agricultural products alleged a conspiracy between the manufacturer and other distributors to fix resale prices and terminate the plaintiff. In Monsanto, the Court stated that "independent action is not proscribed. A manufacturer of course generally has a right to deal, or refuse to deal, with whomever it likes, as long as it does so independently." Id. at 761, 104 S. Ct. at 1469. The Court also stressed that dealer complaints about price cutters was part of the natural process of interaction between a manufacturer and its distributors:
Permitting an agreement to be inferred merely from the existence of complaints, or even from the fact that termination came about 'in response to' complaints, could deter or penalize perfectly legitimate conduct. As Monsanto points out, complaints about price cutters 'are natural -- and from the manufacturer's perspective, unavoidable -- reactions by distributors to the activities of their rivals.'