author: McMILLEN, District Judge.

text:
    UNIVERSITY OF CHICAGO HOSPITALS AND CLINICS, Plaintiff, v. Margaret M. HECKLER, Secretary, Health and Human Services, Defendant.
    No. 84 C 4643.
    United States District Court, N.D. Illinois, E.D.
    Jan. 7, 1985.
    Jane A. McAtee, University of Chicago Hospitals & Clinics, Chicago, Ill., Mitchell H. Kaplan, Choate, Hall & Stewart, Boston, Mass., for plaintiff.
    James J. Kubik, Asst. U.S. Atty., Chicago, Ill., for defendant.
   DECISION

McMILLEN, District Judge.

Defendant has filed a motion to dismiss the complaint in this case for lack of subject matter jurisdiction or failure to state a claim upon which relief can be granted. The complaint seeks to review and reverse a decision of the defendant as Secretary of H.H.S. in which she affirmed a final decision of the Provider Reimbursement Review Board to refuse jurisdiction over plaintiff’s appeal of its Medicare reimbursement for fiscal year 1980. The Board refused to take jurisdiction because the plaintiffs request for a hearing had not been filed within the 180 day limit established in 42 U.S.C. § 1395oo (a)(3). This decision was appealed to the deputy administrator, Health Care Financing Administration, who on April 3, 1984, affirmed the Board’s refusal to exercise jurisdiction over plaintiff’s appeal. There being no further administrative procedure available to plaintiff, it filed this lawsuit on June 1, 1984.

Plaintiff participates in the Medicare program pursuant to a provider agreement which it executed with the defendant. It then becomes entitled to reimbursement of a portion of its in-patient hospital service expenses on an interim basis during the fiscal year. After the close of the fiscal year, the fiscal intermediary, such as the Blue Cross Association, issues a “Notice of Program Reimbursement’’ which entitles the provider to the difference between its interim payments and what the provider determines to be its total reimbursable costs.

In order to contest the amount awarded by the Notice of Program Reimbursement, the provider may request a hearing by the Review Board within 180 days of the date when the notice was mailed. Plaintiff alleges that the notice was mailed to it on September 30, 1981, yet it did not file its request for hearing until May 5, 1982. Thus the request was 37 days beyond the 180 day time limit. Plaintiff alleges that the same type of late filing is under review for fiscal years 1979 and 1981 as well as for fiscal 1980, the year involved in this complaint.

The Board has adopted a regulation which provides that it may extend the 180 day time limit “for good cause shown.”. 42 C.F.R. § 405.1841(b). The Board’s Hearing Manual also provides at § 1100.122 that “good cause” means the provider must show specific circumstances explaining and justifying the failure to file timely. When plaintiff applied for an extension, the Board notified it by letter dated February 9, 1984 that plaintiff did not demonstrate good cause for its late filing and that no review would be granted. Therefore the Board declined to waive the time limit or hear the appeal. This was affirmed by defendant’s administrator on April 3, 1984, as mentioned above, and this lawsuit was filed pursuant to 42 U.S.C. § 1395oo (f)(1).

Section 1395oo (f)(1) provides in pertinent part as follows:

Providers shall have the right to obtain judicial review of any final decision of the Board, or of any reversal, affirmance, or modification by the Secretary, by a civil action commenced within 60 days of the date on which notice of any final decision by the Board or of any reversal, affirmance, or modification by the Secretary is received.
* * * * * *
Such action ... shall be tried pursuant to the applicable provisions under chapter 7 of Title 5 [the Administrative Procedure Act].

The foregoing statute gives providers a right to judicial review of any “final decision” of the Board or of the Secretary if a civil action is filed within 60 days of the decision. It is doubtful that plaintiff had a right to an administrative review of the Board’s decision of February 9, 1984 which denied plaintiff's request for a hearing, because that was a discretionary act for which an appeal is not provided.

However, the Board adopted regulation 405.1841(b) (supra, p. 2) providing for a waiver of the 180 day limitation. That regulation simply allows the Board to exercise its discretion to extend the time limit “for good cause shown,” and the Board decided that plaintiff had not shown good cause in this case. Defendant’s deputy administrator reviewed the Board’s decision and ruled that the determination not to accept the plaintiff’s request for review was “supported by substantial evidence.” His decision was apparently intended to mean that the Board did not abuse its discretion in denying the request, in that the request was not supported by substantial evidence. It is doubtful that the administrator had jurisdiction to review the Board’s exercise of discretion, because the Board’s decision of February 9, 1984 was a final one, at most subject to judicial review within 60 days pursuant to 42 U.S.C. § 1395oo (f)(1).

Whether plaintiff sought judicial review of either the Board’s or the administrator’s decision, however, § 701(a)(2) of the Administrative Procedure Act excludes judicial review of actions “committed to agency discretion by law.” Cf. Califano v. Sanders, 430 U.S. 99, 105-06, 97 S.Ct. 980, 984-85, 51 L.Ed.2d 192 (1977). On the other hand, if this suit was properly filed, we are of the opinion that our jurisdiction at most is to determine whether the administrator’s decision was an abuse of discretion, and we find it was not. This brings us to a review of the “good cause” which plaintiff attempted to show in order to obtain a waiver of the 180 day limitation by the Board. We are reluctant to enter into such a review, because we are then in a position of reviewing the Board’s exercise of discretion, which in our opinion is not reviewable by this court under the Administrative Procedure Act. The Board’s exercise of discretion is not reviewable under any other statute, because the statute of limitations is without exceptions. If the Board’s decision is reviewable, however, it can only be on the basis of abuse of discretion. We find no abuse of discretion and find it difficult to imagine what would constitute abuse of discretion other than an adamant rejection of the provisions of the Board’s own Regulation 405.1841(b) (supra p. 3).

Nevertheless, plaintiff has attached two letters to its complaint, setting forth the reasons why it believed its late request for review should be granted. These letters are dated August 25, 1983 and January 27, 1984. Plaintiff summarizes its reasons on p. 4 of its memorandum filed September 13, 1984 as “staff vacancies and high level personnel changes” in the years 1981-82.

The Board considered these two letters and turned down the request for an appeal of the fiscal intermediary’s report. The defendant then affirmed the decision through her deputy whose decision of April 3, 1984 stated in part:

The Deputy Administrator notes that the 1980 NPR [Notice of Program Reimbursement] was issued on September 30, 1981. The Provider had 180 days to file a request for a hearing. The issues which the Provider wanted to appeal are the same issues as those in the Provider’s 1979 appeal. The Deputy Administrator thinks that it was reasonable for the Board to find no justifiable excuse for late filing, especially where a Provider had 180 days to file a request substantially similar to a previous request already filed. The Provider cannot say that its failure to file timely was due to fraud, accident, surprise, or other extraordinary circumstances beyond its control. Personnel turnover and financial crises are not so unusual in hospital management so as to excuse late filing, especially where the Provider has nearly a half of a year to do so. Accordingly, the decision of the Provider Reimbursement Review Board denying jurisdiction in this case is affirmed.

Thus, plaintiff’s complaint has shown no abuse of discretion, either by the Board or by the deputy of the defendant Secretary. We see nothing to be accomplished by affording plaintiff the “rigorous review by the Court” which its memorandum seeks to obtain. The facts alleged in the complaint are assumed to be true on this motion to dismiss, but they demonstrate no right to a review and no facts upon which a review would result in the relief prayed for in the complaint.

Furthermore, defendant’s position is in accordance with the law, to the extent it has been developed in this field. In Jaymar-Ruby, Inc. v. FTC, 651 F.2d 506 (7th Cir.1981), the court held that decisions committed to agency discretion are not reviewable pursuant to the Administrative Procedure Act unless specifically provided by statute and that no such statute existed in that case, differentiating it from Citizens To Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971); see also Ness Investment Corp. v. United States Department of Agriculture, 512 F.2d 706, 714 (9th Cir.1975) where judicial review of agency discretion is limited to violation of “constitutional, statutory, regulatory, or other legal mandates or restrictions,” at p. 715.

Our case is also quite similar to Califano v. Sanders, supra, p. 587. In that case, the defendant’s regulation provided for a delayed review but the statute did not, and the Court said at 430 U.S. p. 108, 97 S.Ct. p. 986:

Indeed, the opportunity to reopen final decisions and any hearing convened to determine the propriety of such action are afforded by the Secretary’s regulations and not by the Social Security Act. Moreover, an interpretation that would allow a claimant judicial review simply by filing—and being denied—a petition to reopen his claim would frustrate the congressional purpose, plainly evidenced in § 205(g), to impose a 60-day limitation upon judicial review of the Secretary’s final decision on the initial claim for benefits.

Since plaintiff does not allege that defendant violated any statute but merely complains that she abused her discretion and therefore that her decision should be reviewed and reversed, we find and conclude that the complaint should be dismissed for lack of subject matter jurisdiction and for failure to state a claim upon which relief can be granted, as prayed by defendant.

SO ORDERED.


source: Caselaw Access Project

author: PLATT, District Judge.

license: Public Domain

text:
    Anne M. GOLDBERG, Daniel Garner, Gerald Garner, Daniel Garner and Harvey Garner, as Trustees of G Family Trust # 1, Gerald J. Garner and Harvey Garner, as Trustees of G Family Trust #2, Gerald J. Garner and Daniel Garner, as Trustees of G Family Trust # 3, Daniel Garner and Harvey Garner, as Trustees of G Family Trust # 11, Gerald J. Garner and Harvey Garner, as Trustees of G Family Trust #12, Louis Goldberg and others similarly situated, Plaintiffs, v. UNITED PARCEL SERVICE OF AMERICA, INC., Fidelity Union Bank, Larry P. Breakiron, Charles R. Buckridge, Walter E. Danielwski, Carl Kaysen, George C. Lamb, Jr., Donald W. Laydon, Gary E. MacDougal, Kent C. Nelson, Paul Oberkotter, John W. Rogers, George P. Williams, III, Defendants.
    No. 84 CV 1076.
    United States District Court, E.D. New York.
    Jan. 7, 1985.

      Garner, Kreinces, Lichtenstein & Sehindel by Leonard Kreinces, Mamaroneck, N.Y., for plaintiffs.
    Schnader, Harrison, Segal & Lewis by Irving R. Segal, Philadelphia, Pa., Proskauer, Rose, Goetz & Mendelsohn by George G. Gallantz, New York City, for defendant United Parcel Service of America, Inc.
    Riker, Danzig, Scherer & Hyland by Robert Fischer III, Newark, N.J., Cooper, Dun-ham, Clark, Griffin & Moran by Jules P. Kirsch, New York City, for defendant Fidelity Union Bank.
   MEMORANDUM AND ORDER

PLATT, District Judge.

Defendants in this action have moved for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. Plaintiffs cross-moved for certification as a class. For the reasons stated below, the defendants’ motion is granted and therefore, the Court need not reach a decision on the class certification motion.

BACKGROUND

Plaintiffs, former United Parcel Service (UPS) employees and their families, initially alleged that defendants violated three anti-fraud provisions of the federal securities laws, by making false representations and omitting material facts with respect to the terms on which UPS stock would be repurchased by UPS after plaintiff Louis Goldberg’s retirement. Specifically, plaintiffs believe that they have a right to have their 26,144 shares of stock repurchased at the fair market value of the stock; a price which, they believe, would be higher than the $11 per share price tendered by the Board of Directors.

Defendants deny their allegations of fraud. They argue that plaintiffs were contractually bound to sell their stock back to UPS under the terms of the trust which was created to hold employee-owned stock such as plaintiffs’. In addition, defendants assert that since the sections of the Securities Act of 1933, upon which plaintiffs rely for their claim, are directed to fraud against purchasers, the plaintiffs, as sellers, do not have standing to state a claim under those sections.

Plaintiffs argue that the employee Stock Trust Agreement violates both the UPS Certificate of Incorporation and Delaware law, and is therefore invalid. Plaintiffs also allege that they are both purchasers and sellers of UPS stock.

FACTS

United Parcel Service of America, Inc., or UPS, is essentially an employee-owned Delaware corporation whose stock is not traded on any securities exchange or in the organized over-the-counter market. UPS, since its establishment, has sought to keep ownership of its stock in the hands of its own managers and supervisors, and to that end established, in 1954, a Managers Incentive Plan (hereinafter cited as the “Plan”) whereby eligible employees were awarded shares of UPS stock as a bonus or were awarded the right to purchase shares of the stock. All stock awarded under this Plan is subject to the UPS Managers Stock Trust (hereinafter the “Trust”). Upon receiving stock from UPS pursuant to the Plan, the recipient signs the Trust deposit agreement, which clearly states on the back that all the Trust provisions and restrictions apply to stock held on deposit. After the stock is deposited into the Trust, which is held by co-defendant Fidelity Union Bank, the beneficiary receives a Stock Trust receipt, which has the provisions of the UPS Managers Stock Trust Agreement printed on the other side. Copies of the UPS Managers Stock Trust Deposit Agreement and the UPS Managers Stock Trust Receipt appear in the parties’ moving papers and subsequent correspondence adding to the record after oral argument on the motion. It should be noted that on the front of the Deposit Agreement right above Louis Goldberg’s signature is the statement: “I have read the trust agreement provided on the reverse side hereof and agree to its terms.”

An employee may at any time request withdrawal of his shares for transfer purposes, but, UPS is entitled, pursuant to the Trust Agreement, to purchase the stock back from the employee at the fair market value as set by the Board. In addition, if a member of this Plan ceases to be an employee of the company, UPS reserves the right to purchase his shares at the fair market value, subject to some variation depending on the number of shares held by the employee. For example, if the employee holds less than 500 shares, UPS, within three years, may elect to purchase all or part of the member's shares at the fair market value. If the employee holds more than 500 shares, UPS may purchase a maximum annual amount equal to 10% of the shares held by the employee over a thirteen-year period.

UPS’s certificate of incorporation permits the fair market value of the shares to be determined quarterly by the UPS Board of Directors. Paragraph 6 of the Trust Agreement provides that the shares can be repurchased by the Company at the fair market value. It also provides that where there is a conflict over the fair market value between the shareholder and UPS, the value will be set at the average price per share of all shares sold in the twelvemonth period immediately preceding the receipt by the company from the Trustee of the shares being purchased.

Plaintiff Louis Goldberg acquired all of his UPS stock pursuant to the Plan by way of purchase option and awards made to him during his employment. These shares amounted to $65,358 at the time of his retirement in January 1978, although he transferred some of his stock to his wife and family members. Although the rights of the members of the Trust are not assignable, employee-members are permitted to transfer shares to immediate family members; the stock held by these family members remains subject to the trust agreement covering the stock.

UPS notified Mr. Goldberg in April 1983 of its intention to exercise its purchase option of Goldberg’s stock. The number of shares UPS was permitted to repurchase during that particular installment amounted to 26,144 shares.

The 26,144 shares represented the 10% annual installment, adjusted for the November 1982 four-for-one stock split. UPS exercised its purchase option on August 24, 1983 at a price of $11 per share; this price was set by the Board of Directors at its previous quarterly meeting. UPS also exercised its option with respect to some 600 other shareowners, purchasing in total over 2,000,000 shares at $11 per share. Two days later, on August 26, 1983, the Board released its next quarterly announcement, in which it established a new fair market value of UPS stock of $13.50.

DISCUSSION

A motion for summary judgment will be granted where the record, read in the light most favorable to the non-moving party, reveals that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law.

In order for a plaintiff to maintain an action under rule 10b-5 of the federal securities laws, he must show causation; that is, he must demonstrate that he relied to his detriment on the alleged misrepresentation or fraud. Under the terms of the Trust Agreement all employees are required, upon termination of employment, to sell their stock back to UPS. Mr. Goldberg had full notice of this requirement and herein may not claim that he relied to his detriment on any alleged misrepresentation or fraud. Understandably he and his family are upset that the Board raised the price of each share by $2.50 two days after they repurchased a considerable number of plaintiff’s shares, but this they had the right to do under the terms of the Trust. In short, plaintiffs cannot show the requisite causation to maintain a securities fraud claim.

Besides their fraud claim, plaintiffs’ claim that the Trust Agreement is inconsistent with the Certificate of Incorporation and Delaware law is also unfounded. UPS’s company philosophy from the beginning has reflected a desire to keep all of its stock in the hands of its managers and supervisors. To that end, the Certificate of Incorporation provided a right of first refusal to purchase UPS stock prior to any stockholder transferring that stock to another party. The Trust Agreement, formed in 1958, serves these same ends.

Plaintiffs’ final claim that the Trust Agreement is prohibited by Delaware law is also unfounded. Section 202(b) of the Delaware Corporation Law provides that restrictions on the transfer of securities of a corporation may be imposed by an “agreement among any number of security holders or among such holders and the corporation.” Plaintiffs agreed to the provisions of the Trust whenever they purchased or received stock from UPS. It should be noted that the stock that Louis Goldberg received prior to the formation of the Trust Agreement, that is, before 1958, is also subject to the terms of the Trust.

For the reasons stated above, the defendants’ motion is granted.

SO ORDERED.


author: REDDEN, Judge:

text:
    WILCOX DEVELOPMENT COMPANY; Mid-Willamette Village Ore., Ltd.; Glenn L. Wilcox and Lorraine Wilcox, individually, and on behalf of all others similarly situated, Plaintiffs, v. FIRST INTERSTATE BANK OF OREGON, N.A.; and First Interstate Bancorp, Defendants. James K. KUNKLE, an individual residing in the State of Nevada, Plaintiff, v. FIRST INTERSTATE BANK OF OREGON, N.A., a national banking association, Defendant. KUNKLE & STONE, INC., Plaintiffs, v. FIRST INTERSTATE BANK OF OREGON, N.A.; a national banking association, and First Interstate Bancorp, a Delaware corporation, with its principal place of business in California, Defendants. Michael F. MONTGOMERY and Rosemary Montgomery, Plaintiffs, v. FIRST INTERSTATE BANK OF OREGON, N.A., a national banking association, and First Interstate Bancorp, a Delaware corporation, with its principal place of business in California, Defendants.
    Civ. Nos. 81-1127-RE, 82-754-RE, 83-1766-RE and 83-1909-RE.
    United States District Court, D. Oregon.
    Jan. 7, 1985.
    See also 590 F.Supp. 445.

      Henry A. Carey, Henry A. Carey, P.C., John D. Ryan, John D. Ryan, P.C., Leslie M. Roberts, Kell, Alterman & Runstein, Portland, Or., for plaintiffs.
    Wayne Hilliard, Spears, Lubersky, Campbell & Bledsoe, Portland, Or., for defendants.
   OPINION

REDDEN, Judge:

These four cases were consolidated for trial on plaintiffs’ allegations of defendants’ violation of 15 U.S.C. § 1, the Sherman Antitrust Act. Plaintiffs asserted some twenty other claims in these four cases, all of which were decided in favor of defendants in subsequent trials, or upon summary judgment.

In the antitrust claim, plaintiffs alleged that defendants had agreed with other banks to raise, fix and maintain the “prime” interest rate at an artificial and anticompetitive level. Plaintiffs stated that defendants had told them that they were receiving the minimum lending rate available to the most credit worthy customer, when in fact defendants were charging some customers a lower lending rate. Plaintiffs further asserted that had they known that a more favorable rate was available, they would have insisted upon being charged that rate.

The cases were tried to a jury in April and May and resulted in a verdict for plaintiffs. Defendants now move the court for an order granting them a judgment notwithstanding the verdict, or in the alternative, for a new trial. For the reasons set forth below, I grant defendants’ motion for judgment notwithstanding the verdict.

DISCUSSION

I. Standard for Judgment Notwithstanding the Verdict

In considering a motion for judgment notwithstanding the verdict, the court must give appropriate deference to the jury’s verdict. Such a motion should only be granted if, without accounting for the credibility of the witnesses, the evidence and all its inferences, considered in the light most favorable to the non-moving party, can support only one conclusion: that the moving party is entitled to judgment. William Inglis and Sons v. ITT Continental Baking Co., 668 F.2d 1014, 1026 (9th Cir.1981). The verdict of the jury must stand if it is supported by substantial evidence. Marquis v. Chrysler Corp., 577 F.2d 624, 631 (9th Cir.1978). Substantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. Janich Bros., Inc. v. American Distilling Co., 570 F.2d 848, 853 n. 2 (9th Cir.1977).

II. What Constitutes a Violation of 15 U.S.C. § 1

To be successful in a cause of action alleging a violation of 15 U.S.C. § 1, plaintiffs must establish: 1) an agreement among two or more persons or distinct business entities, which is 2) intended to harm or unreasonably restrain competition, and 3) which actually causes harm to competition. Rosebrough Monument Co. v. Memorial Park Cemetary, 666 F.2d 1130, 1138 (8th Cir.), cert. denied, 457 U.S. 1111, 102 S.Ct. 2915, 73 L.Ed.2d 1321 (1981).

Plaintiffs need not prove that the parties entered into an express agreement. Rather, one may be implied from the “course of dealings or other circumstances as well as the exchange of words.” American Tobacco Co. v. United States, 328 U.S. 781, 66 S.Ct. 1125, 90 L.Ed. 1575 (1946). Where the circumstances are such to warrant a finding that the parties had a unity of purpose or a common design and understanding, or a meeting of the minds in an unlawful arrangement, then the conclusion that a conspiracy is established is justified. Id. at 810, 66 S.Ct. at 1139.

In the absence of an express agreement, courts often consider the existence of parallel business behavior when inferring an agreement. However, parallel action alone will never be enough to establish an agreement for purposes of showing a conspiracy in violation of 15 U.S.C. § 1. Granddad Bread, Inc. v. Continental Baking Co., 612 F.2d 1105 (9th Cir.), cert. denied, 449 U.S. 1076, 101 S.Ct. 854, 66 L. Ed.2d 798 (1979). Conscious parallel conduct will be regarded as evidence of an agreement only in those situations in which the similarity of behavior can only be attributed to a tacit agreement, and the parties are acting in a manner against their own individual business interest, or there is motivation to enter into an agreement requiring parallel behavior. Zoslaw v. M.C.A. Distributing Corp., 693 F.2d 870 (9th Cir.1982), cert. denied, 460 U.S. 1085, 103 S.Ct. 1777, 76 L.Ed.2d 349 (1983). Additionally, evidence of lawful business reasons for parallel conduct will dispel any inference of a conspiracy. Independent Iron Works, Inc. v. United States Steel Corp., 322 F.2d 656 (9th Cir.), cert. denied, 375 U.S. 922, 84 S.Ct. 267, 11 L.Ed.2d 165 (1963).

There are a series of “plus factors” to be considered by the court when inferring an agreement for purposes of 15 U.S.C. § 1. C-O Two Fire Equipment Co. v. United States, 197 F.2d 489 (9th Cir.1952). In addition to parallel conduct (expressed as price and product uniformity), the court should look for exchanges of price information among alleged conspirators, and meetings affording them an opportunity to form industry-wide policies. Id. at 493, 497.

III. Evidence Presented at Trial

Plaintiffs argue that the virtual identity of prime rates among defendants and seven other major west coast banks, in and of itself, establishes the conscious parallel conduct needed to infer an agreement. In support of this contention plaintiffs point to defendant First Interstate Bank’s (FIOR’s) “count to four” method of setting its prime rate. Plaintiffs argue that this method was not a result of FIOR’s good faith business judgment because this rate was not tied to its costs of funds.

There was ample testimony from all expert witnesses at trial that defendants “prime rate” is a national prime rate imposed by national economic conditions. The testimony of the experts clearly established that the prime rates used by banks are set to reflect market demands and individual self interest in attracting new and retaining old customers.

Dr. Horvitz, plaintiffs’ principal expert witness, testified that although there are noncompetitive factors which influence an individual bank’s prime rate, all banks will use essentially the same rate, even without any agreement or collusion among the banks. Dr. Fischer testified that any divergence from the national prime rate by a bank would be “foolishness.” Dr. Eisenbeis stated that all banks use substantially the same rate because the market so demands, and that in order for a bank to be competitive in the market, it must adhere to the uniform prime rate.

There was also extensive testimony to the effect that defendants could not maintain their prime rate at a level different from other large commercial banks. If defendants maintained their rates higher than that of other banks, their customers would take their business elsewhere. Likewise, if defendants were to set their prime rate lower than other banks, they would lose revenues on existing prime-based loans and dangerously reduce their profit margin. Moreover, the testimony established that if defendants were to reduce their prime rate below that of other banks, customers with outstanding commitments might take advantage of the lower rate loans from defendants to pay off their higher rate loans at other banks. This would not only create liquidity problems for defendants, but it would ultimately result m an increase in the cost of funds to all banks.

In setting its prime rate FIOR uses what it calls a “count to four” method. FIOR will change its prime rate when four of seven specific major west coast banks change theirs. These banks adjust their prime rate to reflect the rates set by the nation’s largest banks. Plaintiffs contend that this practice infers an agreement because the changes are not tied to FIOR’s cost of funds. Thus, plaintiffs argue, no good faith business judgment sparks FIOR’s decision to change its prime rate. This argument fails because it was established that changes in the national prime rate reflect changes in the cost of money. It was also established that FIOR’s “count to four” method was instituted unilaterally, and that none of the other banks used this method in adjusting their prime rates.

It is not unlawful for a business enterprise to take the prices charged by its competitors into account when setting its own prices, or to follow or copy the prices of a competitor, if the decision to do so is the result of unilateral business judgment, and not the result of a collusive agreement. United States v. International Harvester Co., 274 U.S. 693, 47 S.Ct. 748, 71 L.Ed. 1302 (1927). While parallel pricing conduct may, in proper situations, give rise to an inference of an agreement, such an inference does not arise in cases where one would expect a business entity to alter its prices in response to a price change by a competitor. Proctor v. State Farm Mutual Automobile Insurance Co., 675 F.2d 308, 327 (D.C.Cir.1982); State of Montana v. Superamerica, 559 F.Supp. 298, 303 (D.Mont.1983).

I find the existence of a near universal prime rate does not support an inference of an agreement among defendants and other banks to “fix the prime rate.” FIOR adjusts its prime rate, up or down, in response to changes by four named west coast banks. Those banks, in turn, respond to eastern pacesetters. Invariably the rate adjustments start with the larger east coast banks early in the banking day. The adjustments roll across the country as does the sun, and virtually every bank in the nation responds. This does not prove an illegal conspiracy between defendant FIOR and the specified west coast banks. The evidence supports the conclusion that FIOR exercises its independent business judgment in order to maintain its ability to compete. This response to competition is not illegal.

Plaintiffs note that it is a common practice of businesses and financial institutions to subscribe to wire services that quickly transmit changes in the prime rates across the country. This practice, plaintiffs argue, constitutes an “exchange of prices” among the banks. Plaintiffs further state that this “plus factor,” coupled with the uniform prime rate charged by banks, creates the necessary inference of an agreement. In support of the argument plaintiffs cite United States v. Container Corporation of America, 393 U.S. 333, 89 S.Ct. 510, 21 L.Ed.2d 526 (1969). Plaintiffs’ reliance on this case is misplaced.

In Container Corp. the Court held that an exchange of information concerning specific sales to identified customers, rather than a mere exchange of easily obtainable statistical data, resulted in a violation of § 1 of the Sherman Antitrust Act. However, the Court also noted that “[t]he case as proved is unlike any other price decision we have rendered.” Id. at 334, 89 S.Ct. at 511. The holding of the case turned on the specificity of the information exchanged and the fact that absent the exchange the information was not otherwise available to the individual defendants.

Here, plaintiffs contend that public information which is regularly disseminated to all types of businesses including financial institutions and the media should be considered in the same light as the private and specific price information in Container. I do not agree. I do not find that the use of the wire services to inform the public of the changes in the prime rate violates § 1 of the Sherman Antitrust Act, even when coupled with a nearly uniform national prime rate.

Plaintiffs also contend that regular meetings between Bancorp and the Chief Executive Officers (CEOs) of five subsidiaries provided an opportunity for these banks to enter into agreements to fix the prime rate. Plaintiffs also point to various industry-wide conventions which provided other banks with an opportunity to conspire with Bancorp and its subsidiaries to fix the prime rate. These facts, plaintiffs argue, supply yet another “plus factor” and substantiate their claims of a violation of § 1 of the Sherman Antitrust Act.

This argument must also fail. There was ample testimony at trial that while the CEOs of the five Interstate Banks did meet regularly with the Chairman of the Board of Bancorp, they did not agree at any time to fix the prime rate. Mr. Pinnola of Ban-corp expressly stated that although there was one discussion of a system wide uniform prime rate, the idea was rejected. He stated that after discussing the matter, it was agreed that the diversity of the clientel of individual banks rendered a uniform prime rate impossible to administer.

As for plaintiffs’ notation regarding the conventions, there was no direct evidence of collusion, or even a discussion among the bankers at conventions to fix the level of the prime rate. Absent any evidence, I decline to infer the existence of any such agreement on the basis of the fact that bankers were gathered together in one central location at a given point in time. One wonders why a discussion, agreement or conspiracy would be necessary. Banks have been following eastern pacesetters for years regularly and openly. Given the competitive realities which apply, it would be of no real point to agree to that which they had been doing and felt compelled to continue to do.

Plaintiffs also point to the fact that, from time to time, some customers obtained loans at an interest rate below that of the advertised “prime rate.” This practice, plaintiffs argue, created a two tier credit pricing system which operated to restrict competition in interest rates available to the second tier borrower, or the “middle market.” Plaintiffs also state that the interest charged on these loans was not uniform from bank to bank and that the rate charged was based directly on the cost of money to the bank. Plaintiffs argue that these facts infer an unlawful agreement to fix the prime rate because they negate defendants’ contention that the interest rates on short term credit are necessarily uniform because they are controlled by outside market forces. Each of these arguments fails.

It is undisputed that alternate rate loans were made available to some bank customers, and that the interest charged on those loans was less than the prime rate charged on loans to the “middle market.” This, however, does not support an inference of an agreement to fix the prime rate.

The alternate rate loans were made to a relatively few low risk borrowers in extremely large amounts, at a fixed rate of interest, for a fixed period of time, without a right of prepayment and for a relatively short period. All witnesses agreed, including plaintiffs’, that alternate rate based loans were made to customers in a completely separate market from prime based loans, and thus, the factors influencing the interest rate were different than the factors influencing the interest rate charge on prime based loans.

Plaintiffs’ suggestion that the narrow profit margin involved in providing alternate rate based loans gave defendants the motivation to fix a higher prime rate in order to maximize their profits was not supported by the evidence. The testimony at trial established that defendants could offer certain customers a lower rate on specific kinds of loans due to the low risk nature of those loans. The testimony further established that the “middle market” borrower generally was not a low risk, secure borrower. The testimony made it clear that the plaintiffs did not qualify for alternate rate loans which were designed for and available to low risk borrowers who qualified for very large loans at fixed rates for a fixed short period and without the right of prepayment. This type of loan was not suitable for the type of borrowers here involved.

Both plaintiffs and defendants have exhaustively argued the applicability of the recent Supreme Court case of Copperweld Corp. v. Independence Tube Corp., 467 U.S. -, 104 S.Ct. 2731, 81 L.Ed.2d 628 (1984). In that case the Court held that a parent and its wholly owned subsidiary were incapable of conspiring in violation of § 1 of the Sherman Antitrust Act. I conclude that this case does not apply to the present litigation. The Supreme Court expressly noted, “[w]e limit our inquiry to the narrow issue squarely presented: whether a parent and its wholly owned subsidiary are capable of conspiring in violation of § 1 of the Sherman Act.” 104 S.Ct. at 2740. The present case involves questions of whether sister corporations and other non-affiliated organizations conspired in violation of the Sherman Antitrust Act, and hence Copperweld is inapplicable.

CONCLUSION

After a review of the evidence presented at trial, and all reasonable inferences drawn therefrom and considered in the light most favorable to plaintiffs, I find only one conclusion can be supported; that FIOR is entitled to judgment notwithstanding the verdict. I also find that the verdict of the jury was not supported by substantial evidence.


author: CARRIGAN, District Judge.

text:
    L.J. DREILING MOTOR COMPANY, Plaintiff, v. PEUGEOT MOTORS OF AMERICA, INC., et al., Defendants.
    Civ. A. No. 81-C-911.
    United States District Court, D. Colorado.
    Jan. 8, 1985.

      See also 539 F.Supp. 402.
    Richard B. Podoll, Podoll & Podoll, P.C. and Hugh A. Burns, Burns & Figa, P.C., Denver, Colo., for plaintiff L.J. Dreiling Motor Co.

      Philip E. Johnson, Mosley, Wells & Johnson, P.C., Denver, Colo., for defendant Peugeot Motors of America, Inc.
    John B. Moorhead, Baker & Hostetler, Denver, Colo., for defendant Chrysler Corp.
   MEMORANDUM OPINION AND ORDER

CARRIGAN, District Judge.

This action was commenced by the L.J. Dreiling Motor Company, Inc. (“Dreiling”) against the Peugeot Corporate Family (“Peugeot”) and Chrysler Corporation (“Chrysler”) for damages allegedly resulting from Dreiling’s termination as a Peugeot franchisee. The original complaint, filed June 5, 1981, has gone through several transformations. The Fourth Verified Amended Complaint (hereafter “Complaint”), filed February 17,1983, is currently at issue. In this Complaint, the plaintiff asserts four claims for relief: 1) contracts, combinations or conspiracies among the defendants unreasonably restraining trade in violation of section 1 of the Sherman Act, 15 U.S.C. § 1; 2) an unlawful merger and acquisition between Chrysler and Peugeot, S.A. (“PSA”) in violation of section 2 of the Sherman Act, 15 U.S.C. § 2, and section 7 of the Clayton Act, 15 U.S.C. § 18; 3) breach of contract by Peugeot Motors of America, Inc. (“PMA”); and 4) interference with contractual relations by Chrysler.

PMA has moved for summary judgment on the three claims asserted against it. Chrysler has moved for judgment on the pleadings or, in the alternative, for summary judgment on the three claims asserted against it. Dreiling has moved for partial summary judgment on the issue whether the conduct of Lou Bartlett, a former employee, can be imputed to it; this issue relates to the breach of contract claim. Following extensive discovery, the parties filed comprehensive briefs and presented their respective positions through oral argument.

1. Facts and Claims.

The L.J. Dreiling Motor Company was an authorized Peugeot dealership from May 1975 to June 1981. In 1981, the company also operated Renault and International Harvester dealerships. Peugeot Motors of America terminated the franchise on the asserted ground that Dreiling had submitted approximately $32,000 worth of fraudulent warranty claims in violation of the dealership agreement. Dreiling admits that its service manager, Lou Bartlett, submitted these claims but denies that Lloyd J. Dreiling, its president, or Steven J. Dreiling, its secretary-treasurer, had knowledge of or participated in submitting them.

In 1978, Chrysler acquired fifteen percent of PSA’s stock. On February 5, 1980, Chrysler and Peugeot executed a “Memorandum of Intent” providing for industrial cooperation in the development and manufacture of a new small car, commercial cooperation in the distribution of Peugeots in the United States and Canada, and a short term loan of $100,000,000 to Chrysler Corporation. On May 30, 1980, Chrysler and Peugeot entered into an Agreement formalizing and elaborating upon certain aspects of the Memorandum of Intent. Chrysler agreed to furnish consulting services and market representation assistance to Peugeot in furtherance of Peugeot’s goal to expand its sales in the United States market. Chrysler also indicated a willingness to assist Peugeot in various functional aspects of importation and distribution of Peugeot products and to furnish technical, engineering and design assistance to Peugeot. These matters, however, were subject to further negotiation and subsequent agreements. Peugeot agreed to pay Chrysler, for its consulting services, an annual fee of $300,000 plus five percent of the net dealer invoice price of each vehicle sold by Peugeot to Chrysler dealers who would become Peugeot dealers during the term of the agreement.

Dreiling asserts that its termination as a Peugeot franchisee on June 21, 1981 was part of a nationwide scheme between Peugeot and Chrysler systematically to terminate existing Peugeot dealers and replace them with Chrysler dealers. Dreiling asserts that this scheme was effectuated in its particular case by PMA’s creation of a pretext for termination. According to Dreiling, PMA either engineered, or participated in, submission of the fraudulent warranty claims upon which PMA based its termination of Dreiling’s dealership.

PMA, on the other hand, asserts that it lawfully terminated Dreiling because Dreiling had breached its dealership agreement by submitting the fraudulent warranty claims. Peugeot and Chrysler admit that Chrysler agreed to assist Peugeot to expand its sales in the United States market through Chrysler’s dealer network. They assert, however, that neither the purpose nor the effect of the agreement was the systematic replacement of existing Peugeot dealers with Chrysler-Peugeot dealers. Rather, Peugeot was to evaluate existing Peugeot dealers on a dealer by dealer basis and similarly evaluate Chrysler dealers recommended by Chrysler for Peugeot franchises. Chrysler denies that it played any part in Dreiling’s termination.

2. Propriety of Summary Judgment in Antitrust Litigation.

In Perington Wholesale, Inc. v. Burger King Corp., 554 F.Supp. 708, 710 (D.Colo. 1982), Judge Matsch addressed the propriety of summary judgment in antitrust litigation:

“It is axiomatic that summary judgments in antitrust litigation are to be used sparingly and are seldom justified .... However, ‘the mere allegations of a contract, a combination, or a conspiracy, for the purpose of restraining trade or commerce, and resulting damages, once rebutted, will not withstand summary judgment.’ ... Where the court has permitted extensive discovery, and where the requirements of Rule 56 are satisfied, the court may properly grant the motion in an antitrust setting.... ‘Indeed, the very nature of antitrust litigation would encourage summary disposition of such cases when permissible. Not only do antitrust laws often encompass a great deal of expensive and time consuming discovery and trial work, but also ... the statutory private antitrust remedy of treble damages affords a special temptation for the institution of vexatious litigation .... If a trial would serve no useful purpose, summary judgment is proper.’ ” (citations omitted)

Discovery has been extensive. Plaintiffs served hundreds of written interrogatories and requests for production of documents on Peugeot. Seventeen depositions have been taken, ten by Dreiling and seven by Peugeot. At the preliminary injunction hearing on June 26, 1981, ten witnesses testified for about six hours. Numerous affidavits and exhibits have been submitted by both sides in support of various motions. While one would not measure the worth of the Mona Lisa by the weight of the paint, it merits notice that the court file in this case is approximately fifteen inches thick, and this does not include most of the documents produced by discovery.

On May 4, 1983, Peugeot moved for a protective order staying further discovery, in particular the plaintiff’s third request for production of documents and twelve noticed depositions of persons at the national levels of Chrysler and Peugeot, including the president of Chrysler Corporation, the president of Peugeot Motors of America, the president of Peugeot, S.A., and the chairman of the board of Peugeot, S.A. The motion for protective order was granted pending resolution of the summary judgment motions. All of the proposed discovery appears to have been directed to elucidation of the scope and contours of the alleged agreement between Chrysler and Peugeot to replace existing Peugeot dealers with Chrysler dealers. Virtually all of the discovery so far completed concerns this issue. Although Dreiling had not yet conducted any analysis of the alleged agreement’s effect on competition, none of the additional proposed discovery appears to be directed to that issue.

As will be demonstrated below, the plaintiff’s antitrust claims ultimately must fail because it has not shown, nor even attempted to show, that the alleged agreement has affected competition in a way that constitutes an unreasonable restraint of trade or tends to create a monopoly. I conclude, therefore, as a preliminary matter, that the discovery completed to date has been extensive and that Dreiling is not significantly prejudiced by the decision of these summary judgment motions before completion of the additional proposed discovery. Thus it is appropriate to consider the merits of the summary judgment motions.

3. Section 1 of the Sherman Act.

Section 1 of the Sherman Act, 15 U.S.C. § 1, prohibits “[e]very contract, combination ..., or conspiracy, in restraint of trade or commerce.” Peugeot and Chrysler undeniably entered into an agreement, though the scope of the agreement is in dispute. Obviously, an agreement alone does not violate the Sherman Act. Section 1 of the Sherman Act is violated only if the purpose or effect of the agreement is to restrain trade.

A restraint of trade is either per se illegal or is to be judged under the rule of reason. The Supreme Court explained in Continental T.V., Inc. v. GTE Sylvania Inc., 433 U.S. 36, 49, 97 S.Ct. 2549, 2557, 53 L.Ed.2d 568 (1977):

“Since the early years of this century a judicial gloss on this statutory language has established the ‘rule of reason’ as the prevailing standard of analysis. Standard Oil Co. v. United States, 221 U.S. 1 [31 S.Ct. 502, 55 L.Ed. 619] (1911). Under this rule, the factfinder weighs all of the circumstances of a case in deciding whether a restrictive practice should be prohibited as imposing an unreasonable restraint on competition. Per se rules of illegality are appropriate only when they relate to conduct that is manifestly anti-competitive. As the Court explained in Northern Pac. R. Co. v. United States, 356 U.S. 1, 5 [78 S.Ct. 514, 518, 2 L.Ed.2d 545] (1958), ‘there are certain agreements or practices which because of their pernicious effect on competition and lack of any redeeming virtue are conclusively presumed to be unreasonable and therefore illegal without elaborate inquiry as to the precise harm they have caused or the business excuse for their use.”

Per se violations are generally recognized to be limited to price fixing, horizontal market division and group boycotts. See L. Sullivan, Handbook of the Law of Antitrust §§ 70-92 (1977). Neither price fixing nor group boycott has been alleged here. Although Dreiling never has explicitly asserted that the defendants’ conduct is a per se violation of the Sherman Act, the allegations in Paragraph 24 of the Complaint could be construed as claiming horizontal market division. Paragraph 24 alleges:

“Chrysler Corporation agreed with the other Defendants to divide the geographical market of the United States such that each would be free of competition from the other within this market in the models of the new small ear. Chrysler Corporation further agreed not to manufacture and distribute EIRs [Expensive Import Registrations] or automobiles competitive with EIRs in order to avoid competing with the Peugeot corporate family.”

The basis for this allegation is not stated, but it can be inferred from the fact that paragraphs 21 to 23 of the complaint relate to the February 5, 1980 Memorandum of Intent and Paragraphs 25 to 31 refer to the May 30, 1980 Agreement, that Paragraph 24 is based on one or both of those documents. I have searched in vain the Memorandum of Intent and Agreement, as well as all the other evidence presented in this case, for an agreement to divide the geographical market of the United States. This allegation simply has no evidentiary foundation. Dreiling’s allegation of Chrysler’s agreement not to manufacture competing automobiles is similarly unfathomable. Dreiling’s only support for this latter allegation is the following language from the preamble to the May 30, 1980 Agreement:

“Whereas CC [Chrysler Corporation] has determined that, in the light of the distinct character of the EIR market, the distribution of Peugeot Vehicles via a selected number of CC dealers as herein contemplated will not be competitive with the distribution via these same dealers of the vehicles which CC currently distributed or plans to distribute during the term of this Agreement but will, in fact, strengthen these dealers to the benefit of CC and said dealers; ....”

But this is no agreement not to compete; rather, it is a statement of the fact that Chrysler and Peugeot did not then compete.

Furthermore, Dreiling’s alleged injury, its termination as a Peugeot franchisee, could not have been caused. by these alleged horizontal market division aspects of the agreement between Chrysler and Peugeot. Chrysler and Peugeot declared in the Memorandum of Intent that they intended “to cooperate in the joint development and manufacture of a small passenger car and in the joint study of a light commercial vehicle.” The May 30, 1980 Agreement did not, however, formalize this industrial cooperation aspect of the Memorandum of Intent. In June 1981 when Dreiling was terminated, the proposal was still in an exploratory phase and, indeed, was ultimately abandoned. Even if the proposed small passenger car had been manufactured, I fail to see, nor has Dreiling suggested, how its distribution would have resulted in termination of existing Peugeot dealers. Indeed, an allegation of geographical market division logically implies the opposite. If all Peugeot vehicles were to be marketed through Chrysler dealers, as Dreiling alleges, there would be no need to divide the market.

The same lack of any apparent causal connection is evident regarding Chrysler’s alleged agreement not to manufacture a competing automobile. Dreiling sold Peugeot vehicles. Any agreement by Chrysler not to manufacture a competing automobile could only have benefitted a Peugeot dealership.

Whether because of lack of standing, or because of inability to prove damages resulting from the alleged horizontal market division aspects of the agreement, it is clear that Dreiling cannot effectively challenge the aspects of the agreement alleged in Paragraph 24 of the Complaint, and I so conclude.

Dreiling’s injury, if any, arises from the commercial cooperation aspect of the agreement. Pursuant to this aspect, Dreiling alleges existing Peugeot dealers were to be terminated and replaced with Chrysler-Peugeot dealers. Assuming, arguendo, that the allegation is true, should the agreement be treated as a relatively benign “vertical” restraint, subject to the rule of reason, or as a “horizontal” restraint, potentially subject to per se illegality? “It is important to distinguish between ‘horizontal’ restraints, i.e. agreements between competitors at the same level of the market structure, and ‘vertical’ restraints, i.e. combinations of persons at different 'evels of the market structure, such as manufacturers and distributors.” Oreck Corp. v. Whirlpool Corp., 579 F.2d 126, 131 (2d Cir.1978). The American Bar Association Antitrust Section addressed this issue in its Monograph No. 9, Refusals to Deal and Exclusive Distributorships (1983), p. 21:

“The law is settled that where competitors at one level of distribution agree not to deal with a customer or supplier, the refusal to deal will be considered horizontal. The law is equally settled that where a firm operating at one level of distribution unilaterally decides to refuse to deal with a firm operating at another level of distribution, and the two firms engage in no competition at the same level, the refusal will be considered vertical. There exists a substantial gray area between these two situations, however, where it can be disturbingly difficult to determine whether a refusal should be treated as horizontal or vertical.”

This case falls into the gray area. It is not in the class of “classic boycotts” referred to in the first sentence. First, it is not clear that Chrysler and Peugeot are competitors in the relevant product market, the EIR market. See Complaint para. 17. Second, the agreement only involved two of the many automobile manufacturers who sell in the United States market. On the other hand, because of Chrysler’s alleged involvement, there is potentially more than the unilateral refusal to deal referred to in the second sentence of the paragraph quoted above.

One type of ease in this gray area is the exclusive distributorship. Peugeot’s alleged conduct is analogous to the grant of an exclusive distributorship to Chrysler dealers. Exclusive distributorships usually are subject to the rule of reason, but there has been support for the proposition that they should be classified as per se lawful. Posner, “The Next Step in the Antitrust Treatment of Restricted Distribution: Per Se Legality,” 48 U.Chi.L.Rev. 6 (1981). The ABA Antitrust Section explained in its Monograph No. 9, supra, pp. 26-27:

“The validity of an exclusive distribution system typically is called into question by a terminated or about-to-be-terminated distributor, which itself may have had an exclusive distributorship, and which may have been eliminated in order to grant another distributor an exclusive distributorship, or which may have been eliminated in order to allow the manufacturer to integrate vertically. It has been argued, with repeated success, that the substitution of one exclusive distributor for another should be lawful on the ground that the antitrust laws serve to protect competition, not competitors, and that such substitution does not reduce the number of distributors competing. In Ace Beer Distributors, Inc. v. Kohn, Inc., [318 F.2d 283 (6th Cir.), cert. denied, 375 U.S. 922 [84 S.Ct. 267, 11 L.Ed.2d 166] (1963) ] for example, where one distributor was being replaced by another, the defendant successfully moved for summary judgment on the ground that even if a conspiracy existed, ‘the object to be achieved was not one rendered obnoxious by the Sherman Act.’
The substitution of one distributor for another in a competitive market of the kind herein involved does not eliminate or materially diminish the existing competition of distributors of other beers, is not an unusual business procedure, and, in our opinion, is not an unreasonable restraint of trade.
Similarly, in Burdett Sound, Inc. v. Altec Corp., [515 F.2d 1245 (5th Cir.1975)] the court stated:
Lest any other former distributors succumb to the temptation of treble damages, we reiterate that it is simply not an antitrust violation for a manufacturer to contract with a new distributor, and as a consequence, to terminate his relationship with a former distributor, even if the effect of the new contract is to seriously damage the former distributor’s business.”

More exacting scrutiny may perhaps be warranted when the new distributors have vertical ties to another manufacturer. But the usual characterization of horizontal restraints as “naked restraints of trade with no purpose except stifling competition,” is inapposite to the alleged agreement. See White Motor Co. v. United States, 372 U.S. 253, 263, 83 S.Ct. 696, 702, 9 L.Ed.2d 738 (1963). The agreement between Chrysler and Peugeot is a hybrid, having both a vertical component and a horizontal component. Given the admonition that “[p]er se rules of illegality are appropriate only when they relate to conduct that is manifestly anticompetitive,” Continental T.V., Inc. v. GTE Sylvania Inc., supra, 433 U.S. at 49-50, 97 S.Ct. at 2557, I conclude that the agreement must be judged under the rule of reason.

The inquiry, then, is whether the defendants’ conduct unreasonably restrained trade or commerce in the relevant product market. Accordingly, one would have to determine at a minimum whether Chrysler’s and Peugeot’s products compete in the same product market and, if they do, the market power of the two manufacturers. Plaintiff has identified the relevant product market as the purchase and sale of expensive imported automobiles (“Expensive Import Registrations” or “EIRs”) in Colorado and the United States. Complaint para. 17. Plaintiff, however, has not presented any evidence showing that Chrysler and Peugeot compete in this, or any other, market. As for market power, Dreiling merely recites that Chrysler Corporation is the world’s third largest automobile manufacturer and that Peugeot is the world’s sixth or seventh largest automobile manufacturer. Complaint paras. 19 and 20. This information, without more, is meaningless. Dreiling has not presented to this court even the most basic market representation data. Colorado and the United States are the relevant geographical markets, not the world. Nor does Dreiling state Peugeot and Chrysler’s percentage representation in the EIR market (or explain why some other market is the relevant product market).

After four amended complaints, two years of discovery, and innumerable motions, the plaintiff has not demonstrated even an inkling of understanding that it must produce such an analysis to support its antitrust claim. This deficiency alone warrants the grant of summary judgment to defendants on Dreiling’s claim under section 1 of the Sherman Act.

Dreiling did submit an April 11, 1983 “Memorandum on Behalf of Chrysler Corporation Concerning the Proposed General Motors-Toyota Joint Venture,” prepared for Chrysler by the law firm of Dewey, Ballantine, Bushby, Palmer & Wood, ostensibly in support of its Sherman Act claim. Although this analysis is not relevant because it relates to the industrial cooperation aspect of the agreement, rather than the alleged commercial cooperation aspect which allegedly led to Dreiling’s termination, I will review the memorandum here since it is the only market analysis presented by Dreiling.

The memorandum asserts that a GM-Toyota proposal for joint production of a subcompact passenger car for sale in the United States violates section 1 of the Sherman Act. Dreiling argues that the same conclusion must be reached regarding the Chrysler-Peugeot joint venture. I need not decide the correctness of the memorandum’s analysis because the analysis, whether or not correct, does not support Dreiling’s claim that a Chrysler-Peugeot joint venture violates section 1 of the Sherman Act.

The memorandum argues that, in the case of horizontal joint ventures, antitrust concerns are raised “whenever the parents account for more than a 15% share of a concentrated market.” Memorandum, p. 11. The appendix lists the following market share data.

“1982 Model Year Market Share Data
Subcompacts All Cars
General Motors 21.7 44.1
Ford 17.5 16.8
Chrysler 7.1 10.0
Toyota 13.7 6.7
Nissan 9.7 5.9
Honda 13.1 4.6
Volkswagen 5.8 2.1
Mazda 2.2 2.0
Subaru 5.8 1.8
AMC 1.5 1.3
Others 1.9 4.7”

While General Motors in 1982 enjoyed 21.7% of the United States market for subcompacts and 44.1% of the market for all cars, Chrysler accounted for only 7.1% and 10.0% respectively. It can be inferred from this list that Peugeot enjoyed less than 1.5% of the United States market for subcompacts and less than 1.3% of the market for all cars. This contrasts to Toyota’s 13.7% share of subcompacts and 6.7% share of all cars. Assuming for the sake of argument that Peugeot singlehandedly accounted for the entire 1.9% of “other” subcompacts and 4.7% of all other cars, the Chrysler-Peugeot combined market share would still be only 9.0% of the subcompact market and 14.7% of the “all ears” market. The 15% threshold of concern is not reached in either market.

The foregoing discussion has assumed that Chrysler and Peugeot did in fact agree systematically to terminate existing Peugeot dealers and replace them with Chrysler dealers. I turn now to an evaluation of the evidence presented in support of and in opposition to that allegation.

Dreiling conclusorily asserts that the intent and effect of the February 5, 1980 Memorandum of Intent and the May 30, 1980 Agreement were to diminish or eliminate competition between Chrysler and Peugeot. Complaint paras. 22 and 26. Based on letters and memoranda submitted as exhibits to the Complaint, Dreiling further asserts that Chrysler and Peugeot commenced an active campaign to recruit Chrysler dealers to accept Peugeot franchises and to terminate existing Peugeot dealers in furtherance of the May 30, 1980 Agreement. Complaint paras. 29 and 30.

While I must construe all facts in the light most favorable to the plaintiff, the party opposing these summary judgment motions, I am not required to accept as true the conclusions drawn by the plaintiff from these facts. Upon review of all the evidence submitted by the parties, I find neither an anticompetitive intent nor an anticompetitive effect resulting from the agreement between Chrysler and Peugeot. None of the evidence Dreiling relies upon supports this allegation. Indeed, Dreiling’s own evidence leads to the conclusion that Peugeot intended to review existing dealers’ respective performances on a dealer by dealer basis.

The best evidence of Peugeot’s and Chrysler’s intent is the language of the Memorandum of Intent and subsequent Agreement. The February 5, 1980 Memorandum of Intent provided, in pertinent part, as follows:

“Commercial Cooperation
PSA plans, particularly through its subsidiary, Automobiles Peugeot, to expand progressively its products available for export to North America, concentrating in the medium and upper lines of European imported vehicles. To this end, CC [Chrysler Corporation] and PSA intend to establish a commercial cooperation in the United States and Canadian markets. The fundamental objective of this cooperation would be to increase significantly the sale of Peugeot vehicles in these markets over the next few years, so as to attain, on a progressive basis, the levels achieved by Peugeot’s principal European competitors in these medium and upper lines of vehicles. This development of Peugeot’s sales would facilitate the future introduction of the Peugeot versions of the new small car in North American markets, which is one of the purposes of the industrial cooperation outlined above.
This cooperation would cover in its initial years the following principal areas: —the preparation of market studies and the development of a plan for the reinforcement and expansion of the dealer networks of Peugeot Motors of America, Inc. and Peugeot Canada Ltd. CC would also aid in the implementation of this plan, particularly by suggesting an appropriate number of CC dealers to join progressively the Peugeot dealer networks so as to increase their sales potential;
* * * tf

The May 30, 1980 Agreement provided for the following market representation assistance from Chrysler:

“Market Representation Assistance
A. CC agrees to provide market representation assistance to PMA to aid PMA in expanding its dealership network along the following lines:
(i) PMA will periodically advise CC of those United States market areas where an additional dealer or dealers would be desirable and where CC’s assistance in dealerization would be helpful (‘Open Points’).
(ii) CC agrees to evaluate CC dealers in these Open Points to determine whether they are located, equipped and capitalized so as to be viable prospects for the Peugeot franchise and, if so, to recommend such dealers to PMA for consideration. In order to assist CC in its evaluation of' prospective Peugeot dealers, PMA will provide CC from time to time with the general criteria it employs in assessing dealer eligibility for a Peugeot franchise. CC further agrees to provide PMA with such general background information on dealers recommended to PMA as PMA may reasonably request, provided such information may be disclosed by CC without violating any provisions of the Direct Dealer Agreement(s) or any other agreement between CC and any such dealers.
(iii) If PMA finds that a dealer prospect recommended by CC for an Open Point meets its criteria (including the location of the dealer prospect) for a prospective Peugeot dealer, PMA will so inform CC. CC will then contact the dealer prospect and consult with the prospect regarding the possibility of taking on the Peugeot franchise. Should the prospect indicate an interest, CC will so advise PMA. PMA may then proceed to offer the CC dealer the Peugeot franchise in accordance with PMA’s standard franchising practices.
(iv) The above procedures for the enfranchisement by PMA of a selected number of CC dealers are recognized by both parties to be general guidelines which are susceptible to modification by mutual agreement from time to time in light of experience.
B. Both parties recognize that substantially all of CC’s dealers are independent businesses not owned or controlled by CC and that CC cannot require any such dealers to accept the Peugeot franchise. Correspondingly, both parties also recognize that PMA will retain complete discretion in determining whether or not to offer a Peugeot franchise to any CC dealer recommended by CC. After a CC dealer has become a Peugeot dealer, the relationship between the dealer and PMA will be governed by the terms of the Peugeot Dealer Agreement and the customary business practices of PMA, and PMA will be solely responsible for assessing the performance of any such dealer under that Dealer Agreement and solely responsible for the termination of any such dealer.
C. PMA shall have sole responsibility for compliance with applicable federal, state and local laws pertaining to the enfranchisement of any CC dealer as a Peugeot dealer or to the termination of any such dealer as a Peugeot dealer.
D. The enfranchisement by PMA of a selected number of CC dealers will not commence until such time as the 505 turbo diesel is available in sufficient volume to provide adequate supplies to all Peugeot dealers, which is currently expected to occur in the last quarter of 1980. However, in light of the importance which both parties attach to the success of the first group of CC dealers taking on the Peugeot franchise, preparatory work towards the selection of and consultation with such dealers will commence promptly following the effective date of this Agreement.”

The quoted agreement by no means supports Dreiling’s claim of intended wholesale termination of existing Peugeot dealers.

A Peugeot interoffice memorandum, dated February 25, 1980, from Ralph Wilson to Pierre Lemaire, President of PMA, suggested the following market representation plan. Peugeot proposed to increase its sales in the United States to 50,000 cars. It divided the United States into local market areas, called “Areas of Responsibility” or “AORs,” and determined the number and percentage of Expensive Import Registrations in each AOR. Peugeot then multiplied the percentage for each AOR times 50,000 to determine the sales objective for each AOR. Assuming that it would need a dealer in every AOR with a sales objective of more than 200 cars, Peugeot determined that it needed 106 additional dealers. The memorandum explained:

“As would be expected, this list of 106 proposed additional sales points would bring us to about the same numerical dealer strength as Audi, Volvo, Mercedes-Benz, and BMW. The resultant dealer network would not give us representation at every point covered by any given competitor, but it would put us into all points where the competition as a group is successfully represented. Clearly, closing all of the proposed sales points would take several years, and such an expansion of the network should be undertaken only if we are fully committed to high sales goals; premature expansion would lead to high expenses, low sales per dealer, and an even higher rate of dealer turnover.
It should be noted that the market areas covered by this proposed open point list account for only about 17,500 units out of a 50,000 unit sales goal, and then only if we have 100% efficient representation in each of the 106 market areas; therefore it is plain that dealer upgrading or replacement must account for the greater share of sales growth.”

Dreiling seizes upon this last clause in the memorandum to support its allegation that Peugeot planned to terminate existing dealers, regardless of their performance, to make way for Chrysler dealers. But the conclusion Dreiling urges on this court is not supported by the memorandum or other evidence. The statement that existing dealers must be upgraded or replaced simply reflects the mathematics of the sales objective.

A March 11, 1980 memorandum from Ralph Wilson to Pierre Lemaire and T. Aldarelli reports that Chrysler agreed with the methodology suggested in the February 25,1980 memorandum discussed above. The following paragraph is highly probative of Peugeot’s intent regarding market representation expansion:

“If we wish to determine what points could theoretically be filled by Dodge dealers, we have only to list the Dodge dealers located within the PMA AOR’s that show up as open points at the finally decided sales planning goal. It should be policy, however, to survey each open point individually and establish a ranked list of potential Peugeot dealers and to contact these dealers starting with the highest ranked prospect rather than au-' tomatically offering the franchise to a local Dodge dealer.” (emphasis in original)

Dreiling chose to ignore this paragraph which contradicts its allegations, even though it submitted the memorandum as Exhibit G to its Complaint.

Of all the extensive testimonial evidence presented in this case, only one discussion relates to the alleged nationwide scheme to terminate existing Peugeot dealers and replace them with Chrysler dealers. Joe Thesing, a former Peugeot central zone manager, was asked at his deposition by plaintiff’s counsel if five Peugeot franchises could survive in the Denver area. After stating several times that he did not know since he was not currently familiar with the Denver market, Thesing surmised that five dealers would be too many. At the time, there were three Peugeot dealers in Denver. Dreiling asserts that Peugeot sought to award two franchises to Chrysler dealers in Denver, necessitating the termination of one or more existing dealers. Dreiling relies on a list of Chrysler dealers being considered by Peugeot for franchises. The list includes two Denver Chrysler dealers with the notation “A part of our early 1981 plan for Greater Denver.” Nothing in this list or any other document suggests, however, that Peugeot intended to award two additional franchises in the Denver area or that it actually had decided to award a franchise to either of these dealers. Indeed, I take judicial notice of the fact that there are currently only two Peugeot dealers listed in the October 1983 Mountain Bell Metro Denver telephone directory, and neither is a Chrysler dealer. Once again, Dreiling relies upon inferences or conclusions it draws from the facts, and not the facts themselves.

As stated above, summary judgment on antitrust claims must be approached cautiously; but summary judgment should not be denied where nothing in the evidence Dreiling has produced supports its theory of the case. In contrast, Peugeot has produced evidence which disproves Dreiling’s claim. In his affidavit dated October 1, 1982, Anthony J. Aldarelli averred as follows:

“1. That I am the General Manager, Sales and Marketing, for Peugeot Motors of America, Inc.;
2. That, since July, 1980 a total of 145 new dealerships, including replacement dealers as well as net additions, were added to the Peugeot distribution network in the United States;
3. That of these 145 new Peugeot dealers, only 10 were added as a result of referrals from the Chrysler Corporation; and
4. That of those 10 Chrysler referrals, two have since terminated as Peugeot dealers.”

Ten Chrysler referrals out of 145 new Peugeot dealers represents no systematic substitution of existing Peugeot dealers with Chrysler dealers. Ten out of 145, or 7%, may actually be less than the percentage of all car dealers which are Chrysler dealers, given that Chrysler in 1982 sold 10% of the cars sold in America. Thus, one would expect by mere chance to have at least ten Chrysler dealers franchised as Peugeot dealers.

When the layers of innuendo and allegation are cleared away, the facts show that the commercial cooperation agreement between Chrysler and Peugeot was not intended to launch, and has not in fact resulted in, the alleged campaign to put existing Peugeot dealers out of business in order to protect newly franchised Chrysler-Peugeot dealers from competition.

Section 1 of the Sherman Act prohibits agreements with the purpose or effect of restraining competition unreasonably. The unrebutted Aldarelli affidavit clearly establishes that the Peugeot-Chrysler agreement has had no significant effect on the distribution of automobiles in the United States. Should summary judgment be defeated, however, because Peugeot and Chrysler may have intended to restrain trade though their plan was ineffectual? Dreiling could argue that its proposed additional discovery of high-ranking Peugeot and Chrysler representatives would reveal such an intent. But the possibility of such a revelation is so remote that it cannot defeat this grant of summary judgment in favor of the defendants. The overt agreement between the defendants is contained in the February 5, 1980 Memorandum of Intent and the May 30, 1980 Agreement. Neither these documents nor the letters, memoranda and testimony Dreiling relies upon can reasonably be construed to support the plaintiffs theory of the case. More significantly, the best evidence of a hidden agreement four years after the alleged agreement was made is the effectuation of that agreement; we are not dealing here with a conspiracy which has not yet had time to take effect. The expected effect from the hidden agreement alleged by Dreiling has not occurred. Accordingly, justice would not be served by permitting this lawsuit to go forward in the search for an anticompetitive purpose when there clearly has been no anticompetitive effect.

For all these reasons, I conclude that summary judgment should be granted in favor of the defendants Peugeot and Chrysler on Dreiling’s claim under section 1 of the Sherman Act.

4. Agreement to Monopolize under Section 2 of the Sherman Act and Unlawful Acquisition under Section 7 of the Clayton Act.

Dreiling alleges in its second claim for relief that Chrysler’s 1978 acquisition of fifteen percent of Peugeot, S.A. stock violated section 7 of the Clayton Act, 15 U.S.C. § 18, which prohibits acquisitions that may substantially lessen competition or tend to create a monopoly in any line of commerce in any section of the country. The Supreme Court has equated “any line of commerce” under section 7 of the Clayton Act with the relevant product market under section 2 of the Sherman Act. United States v. Grinnell Corp., 384 U.S. 563, 573, 86 S.Ct. 1698, 1705, 16 L.Ed.2d 778 (1966). Thus, proof of the relevant product market and the defendants’ power in that market are also material elements of a claim for relief under section 7 of the Clayton Act.

Plaintiff has defined the relevant product market for this claim as the sale of EIRs in Colorado and the United States. Complaint para. 53. Dreiling has submitted absolutely no evidence showing that Chrysler competes with Peugeot in the EIR market. In contrast, Peugeot and Chrysler aver, in the preamble to the May 30, 1980 Agreement, that they do not compete in the EIR market. . Similarly, Dreiling has submitted no evidence of Peugeot’s power in that market. Plaintiff’s failure to submit any probative evidence on these issues makes summary judgment appropriate on this claim for relief.

In its second claim for relief, Dreiling also alleges that the defendants, through the acquisition and agreements, created a monopoly or at least agreed to create a monopoly in the EIR market in Colorado and the United States in violation of section 2 of the Sherman Act, 15 U.S.C. § 2.

A combination to monopolize claim has four material elements: (1) a combination or conspiracy; (2) overt acts done in furtherance of the combination or conspiracy; (3) an appreciable effect upon commerce; (4) specific intent to monopolize. Olsen v. Progressive Music Supply, Inc., 703 F.2d 432, 438 (10th Cir.), cert. denied, — U.S. -, 104 S.Ct. 197, 78 L.Ed.2d 172 (1983). Plaintiff here has failed to show an effect upon an appreciable amount of commerce. There has been no systematic replacement of existing Peugeot dealers with Chrysler-Peugeot dealers, as asserted. Even if Dreiling could prove that its termination was caused by the Chrysler-Peugeot agreement, I conclude that one dealer termination does not constitute an effect upon an appreciable amount of commerce. Summary judgment, therefore, is appropriate on this claim.

Though not, of course, dispositive of these claims, it should be noted that neither the Federal Trade Commission nor the Justice Department, the federal agencies charged with enforcing the antitrust laws, objected to the stock acquisition. Furthermore, the May 30, 1980 Agreement between Chrysler and Peugeot was executed only after approval by the Chrysler Loan Guaranty Board pursuant to the Chrysler Corporation Loan Guarantee Act of 1979, 15 U.S.C. §§ 1861 et seq.

Plaintiff’s first claim under section 1 of the Sherman Act and second claim under section 2 of the Sherman Act and section 7 of the Clayton Act are asserted against defendants Peugeot, S.A. (“PSA”) and Automobiles Peugeot (“AP”) as well as Peugeot Motors of America (“PMA”) and Chrysler Corporation. PSA and AP did not move for summary judgment because they had moved to dismiss the claims against them for lack of personal jurisdiction. I need not decide those motions to dismiss since this order for summary judgment decides the claims asserted against PSA and AP as well as those against PMA and Chrysler. Accordingly, summary judgment will be granted in favor of PSA and AP on these claims even though they did not join in the motion for summary judgment.

5. Breach of Contract.

Dreiling claims that Peugeot Motors of America breached the August 29, 1978 Peugeot Dealer Agreement by terminating the Agreement even though Dreiling had performed all its obligations. Peugeot based its termination on Dreiling’s submission of fraudulent warranty claims. Section 25 C.l.f of the Agreement provides:

“Distributor may terminate this Agreement ... in the event that:
Dealer submits any materially false or fraudulent claim or statement relating to predelivery service, warranty repairs, recall campaign repairs, or to any discount, allowance, refund, payment, credit or incentive program or otherwise submits any materially false or fraudulent financial statements, reports or other documents in connection with the carrying out of its obligations pursuant to this Agreement.”

Dreiling admits that its service manager, Lou Bartlett, submitted fraudulent warranty claims to Peugeot but denies that its president, Lloyd J. Dreiling, or its secretary-treasurer, Steven J. Dreiling, had knowledge of or participated in the fraud. Peugeot asserts that Lloyd and Steven Dreiling did participate in the fraud, but even if they did not, that the dealer is still liable for its employee’s conduct.

The issue of whether the service manager’s fraud can be imputed to the dealership has been extensively and repeatedly argued to this court in prior proceedings. Orders in this case have been based on the implicit ruling that Dreiling was liable for its employee’s conduct. Dreiling has now moved for summary judgment on this issue. While I have already ruled on this issue, I will here explicitly set forth my findings and conclusions.

Dreiling first asserts that under the Dealer Agreement, termination would only have been proper if Lloyd or Steven Dreiling personally submitted fraudulent warranty claims to Peugeot. Plaintiff argues that section 25 C.l.f of the Agreement states that Peugeot may only terminate the Agreement if the dealer submits any fraudulent warranty claims and that “dealer” is limited to Lloyd and Steven Dreiling because they are the only persons listed in the Agreement (p. 3) with authority to contract with Peugeot on behalf of the L.J. Dreiling Company. Upon review of the Dealer Agreement, I find and conclude that Dreiling reads it too narrowly. Although Lloyd and Steven Dreiling may be the only persons authorized to execute the Dealer Agreement and amendments thereto, they are not the only persons authorized to act on behalf of the dealership in other respects. Nothing in the Dealer agreement precludes the obvious construction that “dealer” must be interpreted according to established agency principles.

The applicable principle of agency law is articulated at section 261 of the Restatement (Second) of Agency. That section states:

“A principal who puts a servant or other agent in a position which enables the agent, while apparently acting within his authority, to commit a fraud upon third persons is subject to liability to such third persons for the fraud.”

It cannot be disputed that Dreiling, by employing Bartlett as service manager, put him in a position where he could submit fraudulent warranty claims while apparently acting within his own authority.

Dreiling argues correctly that section 261 presumes an innocent third party and is inapplicable where a third party had actual notice and knowledge of an agent’s wrongful conduct. There is a factual dispute as to when Peugeot gained knowledge of Bartlett’s fraudulent submissions. Plaintiff alleges that in September 1980, Joseph DiStefano, a Dreiling employee, told William McMullin, the Peugeot central zone service representative, that some “funny business” was going on in Bartlett’s submission of Peugeot warranty claims. Dreiling argues that Peugeot had actual knowledge of Bartlett’s fraud as of September 1980 and that his conduct after that time cannot be imputed to the dealership. Dreiling also makes much of the fact that Peugeot did not terminate the dealership on the basis of the fraud until May 1981. Moreover, Dreiling asserts that Peugeot is somehow barred from imputing Bartlett’s conduct to the dealership because of that time gap.

Assuming that DiStefano did inform McMullin of “funny business” in September 1980 and that this information constituted notice to Peugeot, I fail to understand how Peugeot's delay in terminating Dreiling demonstrates nefarious intent or conduct. A Peugeot service representative, Mark Patterson, informed Dreiling, after a visit to the dealership in February 1981, that he had found irregularities in Dreiling’s warranty submissions. Peugeot representatives Donald Palma and Kenneth Worley conducted an audit of Dreiling’s warranty files in March 1981. Dreiling has advanced no contractual, statutory or common law duty requiring Peugeot to act more quickly than it did.

I will assume, solely for purposes of these summary judgment motions, that Peugeot had knowledge of Bartlett’s fraud as of September 1980 and that consequently Dreiling is not vicariously liable for Bartlett’s conduct after that time. However, in order for DiStefano to have reported fraudulent submissions to McMullin in September 1980, fraudulent claims must have been submitted before that time. Under section 261 of the Restatement, this fraud is imputed to the dealership. Peugeot properly terminated Dreiling on the basis of this fraud. Section 25 C.l.f of the Dealer Agreement states that Peugeot may terminate the dealer if the dealer submits “any materially false or fraudulent claim or statement relating to ... warranty repairs ....”

PMA is entitled to summary judgment on this claim.

6. Tortious Interference with Contract by Defendant Chrysler.

This claim against defendant Chrysler is based upon Chrysler’s and Peugeot’s alleged agreement systematically to replace existing Peugeot dealers with Chrysler-Peugeot dealers, the same theory underlying Dreiling’s antitrust claims. As discussed above in relation to the antitrust claims, Dreiling has produced no facts, as opposed to inferences and allegations, to support its theory of the case, while Peugeot has produced the Aldarelli affidavit refuting the plaintiff's theory. The voluminous documentary and testimonial evidence presented indisputably shows that Chrysler agreed to assist Peugeot to improve and expand its dealer network in the United States and that steps were taken toward that goal, but nothing presented to this court can fairly be interpreted as support for plaintiffs theory of systematic termination and replacement.

Dreiling complains that it has been hampered in presentation of its case because discovery was stayed before it could depose executives at the national level of Chrysler Corporation. While I am duly mindful that summary judgment may not be used to resolve prematurely issues warranting a full factual hearing, I do not believe that I am compelled to delay resolution of this matter given the extensive discovery completed to date and the inescapable fact that the alleged purpose of the agreement has not in fact occurred after all this time.

Because Dreiling has failed to produce any significant evidence linking Chrysler’s agreement with Peugeot to Dreiling’s termination, summary judgment on this claim must be granted in favor of Chrysler.

Accordingly,

IT IS ORDERED that summary judgment is granted for defendants Peugeot Motors of America, Inc., Peugeot, S.A., Automobiles Peugeot, and Chrysler Corporation on all claims and against the plaintiff.

IT IS FURTHER ORDERED that costs be assessed against the plaintiff and in favor of the defendants.

IT IS FURTHER ORDERED that any defendant intending to assert a motion for attorneys’ fees shall file an updated motion within twenty days of the date of this order. Motions for attorneys’ fees previously filed but not yet ruled upon are outdated and will not be considered.

      . The Peugeot corporate family consists of Peugeot, S.A. (“PSA"), a French corporation; Automobiles Peugeot (“AP”), a French corporation; and Peugeot Motors of America, Inc. ("PMA”), a Delaware corporation. PSA owns 100% of AP. PSA owns 10% of PMA and AP owns the remaining 90%. Chrysler owns 15% of PSA.

      . AP and PSA did not join in the motion for summary judgment. They have moved to dismiss for lack of personal jurisdiction.

      . Plaintiff’s third request for production of documents to Peugeot requests the personnel files of six PMA employees: documentation relating to the May 30, 1980 Memorandum of Intent [sic]; documentation relating to the decision by Peugeot and Chrysler to abort plans for joint production of a sub-compact car for the U.S. market; documentation relating to the consideration of six Dodge dealers as potential Peugeot dealers; and documents in Peugeot’s possession submitted by Chrysler to the Chrysler Corporation Loan Guarantee Board.

      . See P. Areeda, Antitrust Analysis, para. 160(b) at p. 81 (3d ed. 1981).

      . It must be noted that Chrysler does not own its dealers. The dealers are independent businesses operating under franchise agreements with Chrysler.

      . The agreement between Chrysler and Peugeot may very well aid competition. If Chrysler does not compete in the EIR market as it asserts, there can be no restraint on competition between Chrysler and Peugeot. Any market assistance Chrysler could give Peugeot would aid Peugeot to compete more successfully with other manufacturers in the EIR market, such as Audi, Volvo, Mercedes-Benz and BMW.

      . In its Complaint Dreiling states that Peugeot is the sixth largest automobile manufacturer while in its supplemental memorandum brief in opposition to Chrysler's motion for summary judgment Dreiling states that Peugeot is the seventh largest automobile manufacturer.

      . There is reason to question the memorandum’s analysis and conclusion that the joint venture violates the antitrust laws. The Federal Trade Commission subsequently determined that the proposed joint venture does not violate the antitrust laws and declined to exercise its authority under sections 5 and 13 of the Federal Trade Commission Act, 15 U.S.C. §§ 45 and 53(b), and section 11 of the Clayton Act, 15 U.S.C. § 21, to issue an administrative complaint and to enjoin GM and Toyota from proceeding with their agreement.

      . Dreiling was notified of warranty irregularities in February 1981, yet as of the preliminary injunction hearing on June 26, 1981, Dreiling had not conducted an audit of its own records.

      . See November 1, 1982 Memorandum Opinion and Order granting summary judgment in favor of Peugeot on the Automobile Dealer’s Day in Court claim.