Hugh Chalmers Motors v. Toyota Motor Sales ( 1999 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 98-3243
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Hugh Chalmers Motors, Inc.; *
*
Appellant; *
* Appeal from the United States
v. * District Court for the
* Eastern District of Arkansas.
Toyota Motor Sales U.S.A., Inc.; *
Gulf States Toyota, Inc.; *
*
Appellees. *
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Submitted: June 15, 1999
Filed: July 15, 1999
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Before BOWMAN, HEANEY, and FAGG, Circuit Judges.
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HEANEY, Circuit Judge.
Hugh Chalmers Motors, Inc., a former West Memphis auto dealer, brought
action against Toyota Motor Sales, USA, Inc. (TMS) and its independently-owned
regional distributor, Gulf States Toyota, Inc. (GST), alleging violation of various
federal antitrust statutes based on an illegal conspiracy involving product tying, price
discrimination, restraint of trade and monopolization, and violation of the Automobile
Dealers Day in Court Act (ADDICA), 15 U.S.C. § 1221-1225, for threats and coercion
in retaliation for an earlier state court action. The district court granted defendants’
motion for summary judgment on the ground that the antitrust claims were precluded
by the statute of limitations and that the ADDICA claim was barred on both claim
preclusion and statute of limitations grounds. We may affirm a district court's judgment
on any basis supported by the record. See Porous Media Corp. v. Pall Corp., 173 F.3d
1109, 1116 (8th Cir. 1999). Though we disagree with the district court’s statute of
limitations analysis, we conclude that appellant presented the district court with no
genuine material fact supporting the existence of an antitrust conspiracy between TMS
and GST and that summary judgment was thus appropriate. See Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986).
In ruling that appellant’s claim was barred by the statute of limitations, the
district court determined that appellant’s antitrust cause of action accrued on the date
that defendants first committed an act injuring appellant’s business. See Memorandum
and Opinion, at 9-10 (citing Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S.
321, 338 (1971)). While this statement of the law is generally correct, it is also true
that in the context of a continuing violation, such as that alleged in this case, a plaintiff
may bring suit on the basis of, and recover damages for, independent predicate acts
occurring within four years of suit, regardless of when the initial injury occurred. See
Klehr v. A.O. Smith Corp., 521 U.S. 179, 180-81 (1997); Zenith Radio Corp., 401
U.S. at 338; Hanover Shoe, Inc. v. United Shoe Mach. Corp., 392 U.S. 481, 501 n.15
(1968); Kaiser Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d
1045, 1051 (5th Cir. 1982) (stating that an antitrust suit may be brought more than four
years after events that initially gave rise to action where, among other grounds, there
exists “continuing conspiracy or continuing violation”) (emphasis added). The antitrust
violations alleged in this case did not stem from a “single act,” as in Kaiser Aluminum,
677 F.2d at 1052-53, but rather would, if established, constitute overt acts permitting
recovery. See Pace Indus., Inc. v. Three Phoenix Co., 813 F.2d 234, 238 (9th Cir.
1987) (defining “overt acts” as new and independent acts inflicting new and
accumulating injury on antitrust plaintiff).
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Even though appellant would be entitled, on the basis of statute of limitations
doctrine, to bring suit on the basis of a continuing violation, its case contains a more
fundamental flaw. Each antitrust count in the complaint alleges an unlawful
combination and conspiracy between defendants. However, the record presents no
genuine issue of material fact establishing such combination or conspiracy. See
Memorandum and Opinion, at 11 (finding, in analyzing question of whether continuing
conspiracy exception to statute of limitations applied, that no conspiracy existed
between TMS and GST). Rather, appellant merely asserted that there is strong
evidence that defendants conspired with one another. Such conclusory allegations are
insufficient to avoid summary judgment in Chalmers v. Toyota Motor Sales, USA, Inc.,
935 S.W.2d 258 (Ark. 1996). See First Nat’l Bank of Arizona v. Cities Serv. Co., 391
U.S. 253, 288-90 (1968), construed by Anderson, 477 U.S. at 248-50.1 We thus affirm
the grant of summary judgment as to the antitrust claims.
Appellant also brought suit under ADDICA, 15 U.S.C. §§ 1221-1225, alleging
that the various antitrust violations establish a per se violation of good faith as that term
is defined at 15 U.S.C. § 1221(e). As an initial matter, we agree with the district court
that the ADDICA claim is barred by the claim-preclusive effect of the earlier state court
judgment. See Migra v. Warren City School Dist., 465 U.S. 75, 77 n.1, 81 (1984);
1
Though the facts as alleged may have supported an antitrust claim against GST
alone, the complaint fails to propose any such a cause of action. Even under the
minimal requisites of notice pleading, see Fed. R. Civ. P. 8(a); Independent Bus.
Forms, Inc. v. A-M Graphics, Inc., 127 F.3d 698, 702 (8th Cir. 1997), Chalmers fails
to set forth an independent allegation against GST. We have carefully examined the
complaint and are unable to conclude that Chalmers has alleged that GST acting alone
engaged in unlawful tying practices. Absent such an allegation, GST had no notice that
Chalmers sought relief on such a theory. See Tatum v. Iowa, 822 F.2d 808, 810 (8th
Cir. 1989) (per curiam) (stating that “[w]hile all pleadings are to be construed to do
substantial justice, see Fed. R. Civ. P. 8(f), the pleading must at a minimum be
sufficient to give the defendant notice of the claim”) (citing Conley v. Gibson, 355 U.S.
41, 48 (1957)).
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Gahr v. Trammel, 796 F.2d 1063, 1066 (8th Cir. 1986) (stating Arkansas law of claim
preclusion). Appellant knew of the facts underlying this claim at the time it instituted
state court action in 1993, see Chalmers, 935 S.W.2d at 259-60, and there is no
authority for the proposition that federal district court is the exclusive forum for
bringing ADDICA claims, see Tafflin v. Levitt, 493 U.S. 455, 459 (1990) (“‘[I]f
exclusive jurisdiction be neither express nor implied, the State courts have concurrent
jurisdiction whenever, by their own constitution, they are competent to take it.’”)
(quoting Caflin v. Houseman, 93 U.S. 130, 136 (1876)).
Nonetheless, appellant contends that it should be able to bring suit for alleged
violations occurring within the three-year statute of limitations stated in 15 U.S.C. §
1223–i.e., alleged violations of ADDICA occurring after April 1993, the date the state
court action was filed. Because appellant expressly tied its ADDICA count to the
existence of an antitrust conspiracy, however, the failure of appellant’s antitrust claim
compels the conclusion that defendants’ actions did not offend the “special, relatively
narrow” definition of good faith contained in 15 U.S.C. § 1221(e). Sink v. Ford Motor
Co., 549 F. Supp. 245, 249 (E.D. Mich. 1982); see also Hubbard Chevrolet Co. v.
General Motors Corp., 873 F.2d 873, 875 (5th Cir. 1989). Accordingly, we also affirm
the entry of summary judgment on the ADDICA count.
The grant of summary judgment in favor of defendants is affirmed for the reasons
stated herein.
A true copy.
Attest.
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
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