First Nat. Bank of Ariz. v. Cities Service Co.
Opinion of the Court
delivered the opinion of the Court.
At issue in this case is the propriety of an award of summary judgment in favor of respondent Cities Service in a treble-damage antitrust action. The District Court held there was no genuine issue as to material facts between the parties and that respondent was entitled to
Because the question whether summary judgment is appropriate in any case is one to be decided upon the particular facts of that case, we shall set forth the background of this litigation in some detail (Part I) before turning to the specific issues petitioner raises (Parts II-V).
I.
On June 11, 1956, petitioner Waldron
The complaint next stated that the defendants other than Cities Service conspired to prevent petitioner from selling any of the oil to which he was entitled under his contract with NIOC. It was further alleged that Cities Service, after first engaging in extensive negotiations with Waldron with an eye toward participating in the operation of the Iranian oil industry, broke off dealing and joined the conspiracy to boycott him as a result of having received what amounted to a bribe from Gulf and Anglo-Iranian, namely, a large supply of oil from Kuwait at a price even lower than that petitioner could offer Cities pursuant to his contract with NIOC. Finally, the defendants were alleged to have entered into a Consortium Agreement in 1954, pursuant to their attempt to monopolize Middle East oil production, which parceled out substantially all the Iranian oil production between them. Cities Service was claimed to have been permitted to purchase a share in the Consortium. Petitioner asserted that the boycott conspiracy
Within the time set for the defendants to answer the complaint, various of them moved to take petitioner’s deposition, and all of them moved to postpone the filing of their answers until the completion of that deposition. The motions were accompanied by affidavits of counsel that the legal questions presented by the complaint were extraordinarily complex and that they had insufficient information about petitioner’s business dealings with the Iranian Government to permit them adequately to prepare their clients’ answers within the 20-day time limit set by Rule 12 (a) of the Federal Rules of Civil Procedure. These motions were granted by Judge Weinfeld, who, in addition, stayed petitioner from any discovery of his own until completion of the defendants’ discovery, apparently pursuant to then existing practice in the Southern District.
The deposition of Waldron commenced on September 10, 1956, and continued until July 3, 1957, at which time petitioner’s counsel announced his intention to limit further examination. Nothing further was done by any party until December 30, 1957, at which time a motion was made to terminate the taking of Waldron’s deposition. By this time 62 days’ testimony had been taken over a period of more than 15 months. All adjournments up to this point were either at Waldron’s request or with his consent. Meanwhile, various of the defendants had noticed the depositions of petitioner’s associates, Richard S. Nelson, James A. Bentley, James E. Zoes, Ray Carter, and Addison Brown, in October and November 1956. Pursuant to successive stipulations en
In response to petitioner’s claims that the protracted examination of him by the defendants constituted harassment and an undue burden on him, the defendants pointed out that only one of their number had as yet examined Waldron and that the length of time over which the examination had proceeded had been with his complete acquiescence. As for petitioner’s financial hardship contention, the defendants suggested that, in view of the damages sought by petitioner, it was not inappropriate that he be required to spend considerable time clarifying his claims before trial. Judge Herlands denied the motion on February 11, 1958, after argument; he ordered, however, that further examination of the petitioner by the seven defendants be limited to 52 working days, of which 10 were allotted to respondent Cities Service. In addition 174% days were scheduled for the examination of Waldron’s five associates, of which 31 went to Cities Service. The examinations were to be consecutive and were set to commence on March 10, 1958, unless the parties agreed otherwise. The defendants were authorized to postpone the filing of their answers until 30 days after the completion of the depositions, and petitioner was stayed from undertaking any discovery proceedings of his own during that period.
Pursuant to stipulation the continued examination of petitioner did not resume until September 15, 1958, and was not terminated until October 1959. Twenty-six days were spent deposing Waldron in the latter part of 1958 and only six days during all of 1959, of which 3% were utilized by counsel for Cities Service. Petitioner’s
Thus, between September 1956 and May 1962, a period of over 5% years, Waldron and his associates were deposed for a total of 153 days, of which only seven days were attributable to Cities Service. The various stipulations that resulted in prolonging the period required for the taking of these depositions were all entered into either at the request, or with the agreement, of petitioner.
During the course of his deposition by Cities Service, Waldron stated that he had at first not attributed Cities’ failure to conclude some sort of a deal with him for Iranian oil to its participation in the boycott. He explained that it was his discovery of Cities’ purchase of substantial amounts of Kuwait oil from Gulf, plus its subsequent participation in the 1954 Consortium, that prompted him to join it in his complaint as a member of the conspiracy. Accordingly, when Cities moved for summary judgment in its favor in 1960, it did so on the ground that the affidavit of Cities’ Senior Vice President in Charge of Foreign Operations, George H. Hill, and the accompanying documents from Cities’ files that were submitted in support of the- motion conclusively disproved petitioner’s theory that it had joined the alleged boycott conspiracy because it had been bought off by the other conspirators.
In brief, the documents demonstrated that Cities had been engaged in negotiations with Gulf
In reply to Cities’ motion, petitioner’s counsel reiterated his contention that the course of dealings between Waldron and his associates, on the one hand, and various of Cities’ executive personnel, especially its president, W. Alton Jones, on the other, raised an inference of conspiracy because the most probable conclusion to be drawn from Cities’ decision to pass up the assert-edly extremely beneficial deal proposed by petitioner, notwithstanding its need for additional supplies of imported oil, was that in some manner Cities either had been “reached” or had used its negotiations with Wal-dron as a means of forcing its way into the alleged Middle East oil cartel. Petitioner also suggested that Cities might well have made some sort of informal agreement with the other defendants concerning the Consortium that was not revealed by the documents and that Cities might have expected, at the time such an agreement was made, a more profitable share therein than it was eventually offered.
In response to these arguments, Judge Herlands, who had by this time been assigned to the case for all
At the hearing in 1961 on the proposed order to implement the court’s decision, counsel for Waldron asked to depose Cities’ president Jones first. Contrary to what appears to be the position taken now, petitioner acknowledged and accepted Judge Herlands’ order that his discovery of Cities was to be carried out pursuant to Rule 56 (f), Fed. Rules Civ. Proc., which provides for comparatively limited discovery for the purpose of showing facts sufficient to withstand a summary judgment motion, rather than Rule 26, which provides for broad pretrial discovery. Petitioner’s sole objection to the proposed order was that Jones should be deposed rather than Hill.
In response to Judge Herlands’ observation that Hill was the man who was in the best position to provide information about the two alleged facts relied on in the complaint to link Cities to the conspiracy, petitioner’s counsel for the first time argued that the Kuwait deal and the Consortium agreement were not crucial to the case. While maintaining the position that those two items were significant, counsel stated that Cities’ motive
This argument was rejected and the trial judge clearly stated that to withstand summary judgment petitioner would have to produce some factual evidence of conspiracy beyond Cities’ mere failure to carry through on a deal for Iranian oil. The taking of Hill’s deposition was scheduled, without objection by petitioner, to commence upon the completion of the depositions of petitioner’s associates.
More than a year then elapsed, during which time, again pursuant to stipulations between all the parties, only 25 days were spent taking the depositions of petitioner’s associates. Immediately after the completion of these depositions, in response to motions to strike portions of the complaint made by various defendants other than Cities, petitioner announced his intention to amend his complaint and entered into a stipulation with the other parties extending their time to move or answer until 30 days after service on them of the amended complaint. This stipulation was entered into on June 1, 1962, approximately 30 days prior to the time by which, under Judge Herlands’ previous order, the defendants would have been. required to answer the complaint or move for summary judgment. Some five weeks later, at the request of petitioner’s counsel, a new stipulation was entered into postponing the taking of Hill’s deposition until September 10, 1962, and staying petitioner’s undertaking to file an amended complaint pending completion of the Hill deposition.
While the respective motions were pending before Judge Herlands, petitioner on June 28, 1963, filed an amended complaint. It differed from the original complaint in that most of the specific facts alleged in the original were replaced by more general allegations of conspiracy and boycott. In regard to Cities, the complaint was amended to omit all reference to any factual allegations involving either Kuwait oil or membership in the 1954 Consortium. In addition, those allegations of the original complaint which were directed at the other defendants and which had specifically excluded Cities were made more general, and the language excluding Cities was replaced by language referring simply to unspecified co-conspirators. In place of the previous specific allegations directed at Cities, the amended complaint substituted two new formulations: first, a general allegation that Cities joined the conspiracy at a
Judge Herlands held petitioner’s and Cities’ cross-motions under advisement for a little more than a year while he considered motions for summary judgment against petitioner made by the other defendants. Then, on June 23, 1964, in a long and comprehensive opinion dealing with both sets of motions, he denied the motions for summary judgment made by the other defendants, again postponed final disposition of Cities’ motion and granted Waldron the opportunity to conduct further discovery of Cities under Rule 56 (f).
In September 1964 petitioner moved for the following additional discovery: first, the production of all documents in the possession of Cities dealing with Cities’ activities in connection with Iranian oil between June 1952 and January 1955; second, the production of all documents relating to the same subject matter in the possession of the other defendants; and third, the production of all relevant documents from, and oral examination of, Ray Carter, a former Cities employee who had acted as an intermediary between Cities and petitioner in their dealings. Petitioner further indicated a desire to depose various unspecified officials of the other defendants after the completion of the discovery detailed in his motion. Immediately thereafter, in October 1964, Cities for the third time renewed its motion for summary judgment
Petitioner states that three questions are presented by this case: first, whether he was improperly limited in the discovery permitted him prior to the rendering of summary judgment (Parts II, V, infra); second, whether sufficient material facts to raise genuine issues for trial were shown (Part III, infra); and third, whether the lower courts held, erroneously, that amended Rule 56 (e), Fed. Rules Civ. Proc., places the burden of showing that there is a genuine issue of material fact for trial on the party opposing a motion for summary judgment (Part IV, infra).
II.
We turn first to one aspect of petitioner’s contention that his discovery was unduly restricted: whether certain orders of the trial judge imposed unfair limits on his access to relevant information. The second aspect of petitioner’s discovery argument, addressed to what he viewed as the necessity for additional discovery to enable
Petitioner’s initial complaint, as set out more fully, supra, at 259-261, specifically alleged that Cities had adhered to the conspiracy by refusing to deal with petitioner after being bought off by the Kuwait contract and an opportunity to participate in the Consortium. Similarly, in his deposition, Waldron reiterated his belief that the only links between Cities and the conspiracy were those two payoffs. Thus, by petitioner’s own doing, respondent Cities Service was from the beginning of the litigation placed in a vastly different position from the other alleged co-conspirators. Cities, realizing this, apparently felt that if it could show that it had in fact not received any payoff or bribe from the other defendants, petitioner would abandon his contention that it had joined the alleged conspiracy. Accordingly, immediately after it had taken Waldron’s deposition, Cities made its motion for summary judgment accompanied by Hill’s affidavit and the supporting documents described, supra, at 263-264. When Judge Herlands declined to grant Cities’ motion at that time, he permitted petitioner to examine Cities about those specific facts that had theretofore been the only ones alleged as evidence of conspiracy on the part of Cities, other than its failure to make a deal with petitioner for Iranian oil. Petitioner appears to argue that it was erroneous for the trial court to limit his discovery initially to Hill rather than Jones, the person with whom he primarily dealt. However, since petitioner was the party who had injected Kuwait and Consortium into the case and since Hill had been the ranking Cities official in charge of both transactions, it is difficult to conclude that the trial judge abused his discretion in ordering petitioner to begin by examining Hill.
Although petitioner had begun to de-emphasize the significance of Kuwait and the Consortium to his claim of conspiracy by Cities at the first argument on Cities’ motion for summary judgment, it was not until after the additional information described above was obtained through Hill’s deposition, and the supporting documents accompanying it, that petitioner began to stress the contention that Cities had undergone a dramatic shift in its attitude towards him in September 1952, immediately after Jones had returned from a trip to Iran arranged for him by Waldron. While it is probably to overstate the case to say, as does respondent, that petitioner abandoned his Kuwait and Consortium claims at this time, it is fair to say that petitioner no longer seriously contended that the evidence relating to them was sufficient in itself to raise a genuine issue of material fact.
After again declining to grant Cities’ motion for summary judgment, Judge Herlands entered an order permitting further discovery of Cities. It provided, as described in more detail, supra, at 268-269, for an examination of those Cities executives still alive who participated in
This order had the effect of permitting Waldron to examine every surviving Cities official with whom he had dealt to any substantial degree in his attempts to arrange a sale of Iranian oil. He was permitted to examine them, and have production of all documents in connection therewith, concerning all the events that he had specified in his original complaint or in the two previous oral arguments on Cities’ motion for summary judgment as being evidence of Cities’ participation in the alleged conspiracy. Certainly the scope of this order, viewed as of the time it was made, does not seem open to any serious challenge as unduly restrictive, and petitioner did not make any such argument at the time the order was proposed. It was only when petitioner moved for additional discovery in the fall of 1964 that he began seriously to complain about the allegedly limited scope of the prior discovery order. Accordingly, we shall postpone more detailed discussion of this point to Part V, infra.
Petitioner did argue then, and still contends now, that he was prejudiced by the failure of Judge Herlands to let him examine various other Cities executives, in addition to Jones, at the time he was permitted to depose Hill. He bases this contention on the ground that many of these executives were men of advanced years at that time and that the deaths that in fact ensued
III.
In his affidavit in support of Waldron’s motion for additional discovery, petitioner’s attorney detailed the facts produced to date that assertedly showed Cities’ participation in the conspiracy, in order both to support his contention that additional discovery was needed and to demonstrate that summary judgment in favor of Cities should not be granted. We shall first discuss the propriety of Judge Herlands’ award of summary judgment before dealing further (in Part V) with petitioner’s contentions relating to additional discovery.
A.
When petitioner moved for additional discovery in 1964, in opposition to Cities’ still pending motion for summary judgment, his counsel’s affidavit pointed. to the following evidence as tending to show a participation by Cities in the alleged conspiracy
The evidence further showed that Cities went to substantial lengths to explore the possibilities presented by petitioner. Waldron, at Jones’ request, secured an invitation for Jones, together with other Cities executives, from Premier Mossadegh to go to Iran to look over the production facilities that NIOC had appropriated from Anglo-Iranian. Upon examination of the facilities, the Cities executives concluded that, notwithstanding the departure of the British personnel who had previously been in charge of operations, the Iranians had managed to keep them in relatively good operating condition. This conclusion was orally presented to Mossadegh by Jones and a comprehensive written report on specific details was promised to be transmitted later. During
Subsequently, in January 1953, Jones wrote to the incoming Secretary of State and Attorney General informing them of his belief that the only solution to the Iranian oil problem would be some sort of agreement between Iran and Anglo-Iranian. He accompanied this missive with a legal memorandum which stated that under international law Iran appeared to have the right to nationalize the Anglo-Iranian oil properties, but he asserted that the memorandum had not been prepared as a step toward Cities’ involving itself in the Iranian situation. Three weeks later the final contract with Gulf for a 15-year supply of 21,000 barrels per day of Kuwait oil, plus an option for an additional 30,000 barrels per day, was signed by Cities and Gulf.
Petitioner argues that the inference that Cities was a participant in the alleged conspiracy to boycott him .follows from the foregoing facts. Even viewed without reference to other facts of record, it is apparent that petitioner’s main argument is that Cities’ failure to follow through on its original substantial interest in dealing with him is substantial evidence of participation in the boycott allegedly organized by the other defendants. And undoubtedly, given no contrary evidence, a jury question might well be presented as to Cities’ motives in not dealing with Waldron, cf. Poller v. Columbia Broadcasting System, Inc., 368 U. S. 464 (1962), notwithstanding that such a failure to deal conceivably might also have resulted from a whole variety of non-conspiratorial motives involving the exercise of business judgment as to the attractiveness of the opportunity offered by petitioner. However, as we next show, the record in this case contains an overwhelming amount of such contrary evidence of Cities’ motives, much of it supplied by petitioner himself.
Immediately after the nationalization, Anglo-Iranian publicly announced both in the news media and throughout the oil industry its view that the nationalization of its properties and the abrogation of its concession rights amounted to an illegal act under international law and stated its intention to “take all such action as may be necessary to protect its rights in any country,” including the bringing of lawsuits against any purchaser of Iranian oil. In addition, the evidence introduced by petitioner tended to show that the other major oil company defendants in this suit, as a result of their fear that countries in which they held concessions would follow the Iranian lead should the nationalization of Anglo-Iranian’s property be successful, also communicated to Cities and other domestic oil companies their intention to support Anglo-Iranian by refusing to deal with any company that handled Iranian oil. That such threats were both substantial and effective is demonstrated by the testimony of petitioner that numerous American oil companies, not made parties defendant in this action, refused to deal with him for precisely the reason that they were afraid of retaliation. In addition, petitioner testified that the other defendants had threatened to boycott any companies that leased tankers for use in transporting Iranian oil.
It is thus clear that the evidence furnished by petitioner himself provides a much more compelling explanation for Cities’ failure to purchase Iranian oil than does his argument that such failure is evidence of conspiratorial behavior by Cities. When this explanation is placed in juxtaposition with the evidence introduced by Cities showing that the Kuwait deal was arranged long before the nationalization, that Cities objected continually to the formation of the Consortium, and that Cities refused the minimal share offered it as a prospective par
Petitioner himself consistently argues that Cities’ interests in this entire situation were directly opposed to those of the other defendants. The others had large supplies of foreign oil; Cities did not. The others allegedly were members of an international cartel to control foreign oil; Cities was not. The others were interested in re-establishing the status quo prior to nationalization; Cities was not. It is doubtless due to the difficulty of suggesting a motive for Cities to conspire against him, coupled with Cities’ demonstrated interest in his proposals for several months (to the extent that Cities even paid Waldron several thousand dollars to reimburse him for his time and expenses incurred in arranging Jones’ trip to Iran), that prompts petitioner, understandably enough, to insist that motive is not controlling in his case. However, to suggest, as petitioner does, that Cities’ participation in the conspiracy is shown by its failure to deal with him is itself to rely on motive.
Obviously it would not have been evidence of conspiracy if Cities refused to deal with Waldron because the price at which he proposed to sell oil was in excess of that at which oil could be obtained from others. Therefore, it is only the attractiveness of petitioner’s offer that makes failure to take it up suggestive of improper motives. However, it has been demonstrated
Petitioner does attempt to point to other evidence besides the simple failure to deal as showing conspiracy.
Petitioner also emphasizes the statement sent by Jones to the incoming Secretary of State and Attorney General that the only solution for Iran lay in some sort of accommodation with the British. Since this was' also the position taken, in effect, by the other alleged conspirators, petitioner suggests that it too shows common purpose. However, once Jones had decided that Cities could not risk trying to break the boycott itself, it was merely a factual observation to state that Iran would not be able to restore the operation of its oil industry without some kind of agreement being made with the boycotters. The use of the phraseology that this was the only “honorable course” hardly changes the factual background of the letter.
Moreover, the letter was accompanied by a legal memorandum, stating that Iran had a right under international law to nationalize its oil industry, that ran directly counter to the consistent position taken by the other defendants in this case. Indeed, it went to the heart of their defense, since one of the arguments being made below is that the other defendants were merely acting to protect their property rights. See 231 F. Supp., at 87.
Petitioner argues that the failure of the Richfield Oil Co. to deal with him is evidence of conspiracy by Cities because Cities was a major, although not a controlling, stockholder in Richfield. However, aside from Cities’ stock interest in Richfield, petitioner has produced no evidence other than speculation to connect this failure with any action by Cities. As for the probative value of the failure to deal with Waldron, the same objection is applicable to the proposed transaction with Richfield that has been discussed in connection with the proposed deal with Cities, namely, the probability that it was due to a desire to avoid difficulties that would be presented by Anglo-Iranian and the other defendants. Moreover, since petitioner’s contract had expired by the
Finally, petitioner places great reliance on Jones’ alleged interference in his efforts to sell the United States Government a cargo of gasoline for military use. One difficulty with this contention is that the incident occurred at a time when, petitioner conceded in the trial court, Cities was not yet a member of the conspiracy. A more basic objection to it, however, is that it is apparent that Jones, in his cable to the Secretary of the Interior, was primarily concerned with disassociating himself from Carter’s efforts to promote the sale, efforts which Carter intended to tell the Secretary were supported by Jones. Under those circumstances, what petitioner characterizes as vindictive interference by Jones appears far more likely to have been a desire not to be used in someone else’s financial dealings. In any event, it is insufficient support, in light of all the other evidence, on which to base a case for participation by Cities in the conspiracy.
C.
In support of his contention that summary judgment against him was improper, petitioner relies heavily upon Poller v. Columbia Broadcasting System, Inc., 368 U. S. 464 (1962). In Poller the plaintiff claimed that CBS canceled its affiliation agreement with his UHF station pursuant to a conspiracy between CBS and some third parties to drive him out of business in order to give CBS a short-term monopoly of the UHF market in the Milwaukee area, and ultimately to eliminate UHF competition there entirely. The plaintiff introduced evidence showing that CBS had canceled his affiliation, that it purchased and affiliated with another UHF station in
At first glance the present case seems to present substantial similarities to the situation in Poller in that the issue as to Cities’ motive in failing to conclude a deal with petitioner is likewise basic to the litigation here. However, there are crucial differences between the two cases. In Poller the competitive relationship between CBS and the plaintiff was such that it was plausible for the plaintiff to argue that CBS had embarked on a plan to drive him out of business. In this case, as Waldron has admitted right along, the business relationship between him, Cities, and the other defendants was such that it is much more plausible to believe that Cities’ interests coincided, rather than conflicted, with those of petitioner. And, in fact, the course of dealings between petitioner and Cities over the strenuous objection of the other defendants gives ample evidence of
In support of this position, petitioner relies heavily on Interstate Circuit, Inc. v. United States, 306 U. S. 208 (1939), and Theatre Enterprises, Inc. v. Paramount Film Distributing Corp., 346 U. S. 537 (1954). In Interstate Circuit a group of motion picture distributors, at the request of two large first-run exhibitors, simultaneously imposed identical restrictions on subsequent showings of the films they distributed. These restrictions had the effect of forcing subsequent-run exhibitors to raise their admission prices substantially in the direction of the prices then charged by the competing first-run exhibitors at whose behest the restrictions were imposed. This in turn tended to restrain competition among the exhibitors by depriving the subsequent-run exhibitors of much of their ability to compensate for their competitive disadvantages by selling tickets at a considerably lower price than that charged by the first-run exhibitors. Other restrictions prohibiting the showing of double-features in subsequent-run theatres were imposed with similar anticompetitive effects. There was no direct evidence showing that the distributors agreed with one another to impose the identical restrictions, but it was
Interstate Circuit differs from the case at hand in precisely the same way that Poller does, namely, in the inferences of motive that can reasonably be drawn from the facts. The reason that the absence of direct evidence of agreement in Interstate Circuit was not fatal is that the distributors all had the same motive to enter into a tacit agreement. Adherence to such an agreement would enable them to increase their royalties by forcing a rise in admission prices without the danger of competitors enlarging their share of the subsequent-run market by refusing to impose similar restrictions. That such a step would also aid the first-run exhibitors proposing it to restrain competition between themselves and subsequent-run exhibitors would not significantly diminish the anti-competitive benefits to be obtained by the distributors. Here Waldron is unable to point to any benefits to be obtained by Cities from refusing to deal with him and, therefore, the inference of conspiracy sought to be drawn from Cities’ “parallel refusal to deal”
Theatre Enterprises, also relied on by petitioner, merely reiterated the holding of Interstate Circuit that “business behavior is admissible circumstantial evidence from which the fact finder may infer agreement,” 346
IV.
Rule 56 (e) of the Federal Rules of Civil Procedure states that “[w]hen a motion for summary judgment is made and supported ... an adverse party may not rest upon the mere allegations or denials of his pleading, but his response . . . must set forth specific facts showing that there is a genuine issue for trial.” Petitioner contends that the lower courts misapplied Rule 56 (e) in this case and erroneously placed the burden on him to show that there was a material issue of fact for trial, rather than first requiring respondent Cities Service, the movant, to demonstrate the absence of a “genuine issue as to any material fact” under Rule 56 (c). However, it should be noted that the decisions below did not purport to discuss burden of proof at all. Therefore petitioner must demonstrate that, regardless of what was specifically held, the effect of the decisions below was to so shift the burden of proof.
It is true that the issue of material fact required by Rule 56 (c) to be present to entitle a party to proceed to trial is not required to be resolved conclusively in favor of the party asserting its existence; rather, all that
Essentially all that the lower courts held in this case was that Rule 56 (e) placed upon Waldron the burden of producing evidence of the conspiracy he alleged only after respondent Cities Service conclusively showed that the facts upon which he relied to support his allegation were not susceptible of the interpretation which he sought to give them. That holding was correct. To the extent that petitioner’s burden-of-proof argument can be interpreted to suggest that Rule 56 (e) should, in effect, be read out of antitrust cases and permit plaintiffs to get to
V.
We have postponed our discussion of petitioner’s contention that he should have been permitted additional discovery prior to the grant of summary judgment to this point in order that it may be evaluated in the light of what he had succeeded in accomplishing as of the date he made the motion.
A.
Petitioner makes much of the fact that the present action has been pending in the lower courts for 11 years and that he has not yet received a formal answer to his complaint from any defendant nor been permitted any general discovery. Petitioner also complains of the inequity of his being faced with a motion for summary judgment after having been deposed for thousands of pages by the defendants, but before he has had an opportunity to obtain discovery from them. In particular, he emphasizes that in an antitrust conspiracy case discovery is vital because most of the evidence of conspiracy will naturally be in the hands of the defendants. However, petitioner fails to come to grips with the problems presented in this extremely complicated suit by the fact that one of the defendants, Cities Service, has from the beginning of the litigation attempted to disassociate itself
Thus when petitioner emphasizes the considerable discovery had of him by the defendants as a group, he implies that Cities has been unfairly permitted more discovery of him than he has of it. He attempts to minimize the significance of the fact that Cities’ participation in his examination amounted to a total of 3% days of deposition testimony by arguing that Cities benefited from the extensive examination conducted by the other defendants. The record reveals, however, that much of the evidence obtained by the other defendants in deposing petitioner and his associates is relied on heavily by petitioner himself to bolster his case against Cities. Had the record in this case consisted only of the evidence obtained by petitioner from Cities together with the testimony taken by Cities from Waldron, petitioner’s case against Cities would be even weaker than it is. In fact, petitioner would undoubtedly have chosen to submit affidavits in opposition to Cities’ motion for summary judgment containing much of the same material incorporated in his and his associates’ depositions. Hence petitioner benefited as much vis-á-vis Cities from the depositions taken by the other defendants as Cities did. Under such circumstances petitioner cannot justifiably claim that Cities has been given an unfair advantage by the extent of his examination by the other defendants.
As for petitioner’s general objections to the length of time that his case has been pending, it is clear that Cities Service has been the only party to the litigation that has exhibited any consistent desire to expedite the proceedings, and that, even where postponements and adjournments have been sought by either Cities or the other
Petitioner’s more vehement objections have to do with his claim that he has been stayed from obtaining general discovery of the other defendants in the case throughout the period during which he has sought to build a case against Cities. Since there is no indication that petitioner will be unable to obtain general discovery at some future date of the other defendants for use against them in the case still pending below, the issue here is whether he can compel Cities to remain a party to the litigation pending such general discovery. Assuming the correctness of petitioner’s claim that he has been stayed from conducting such discovery (a claim disputed not altogether unpersuasively by respondent), the fact remains that petitioner has had discovery of the one party he is presently opposing and, therefore, his right to additional discovery must depend on the strength of his argument that it is necessary to his case against that party.
It is probably true that in the ordinary conspiracy case a plaintiff would be entitled to obtain discovery against all the alleged conspirators instead of being obligated to proceed against them seriatim. However, in this case, by the plaintiff’s own doing, one of the alleged conspirators was singled out from the rest as having joined the conspiracy at a much later date as the result of specific inducements. Being placed by petitioner’s complaint in the position of being what might be termed a tangential defendant, Cities legitimately attempted to extricate itself from an expensive and protracted lawsuit. We do not mean to imply that a plaintiff should be
B.
Petitioner acknowledges the fact that he has had some discovery of Cities Service pursuant to court order. However, he contends vigorously that the discovery he has obtained has been too limited to enable him adequately to resist the motion for summary judgment. Petitioner points out that he was initially limited to taking the deposition of Hill instead of Jones, notwithstanding the fact that Jones was the person at Cities with whom he primarily dealt with regard to the Iranian oil situation. He claims prejudice from the fact that Jones died before he could be deposed in that those Cities’ personnel whom he eventually deposed, namely, Watson, Frame, and Heston, were not an adequate substitute for
It has already been observed
Petitioner’s desire to depose Carter, which appeared for the first time in the litigation at this late date, is interesting in light of the fact that originally Carter had been listed as one of petitioner’s associates and the defendants had formally noticed their intention to depose
Petitioner’s counsel stated in his affidavit attached to the discovery motion that Carter became an adherent of Cities immediately after petitioner filed his complaint and implied that Carter would not voluntarily testify. Assuming that to be true, although such an assumption seems open to question in view of the absence of any specific allegation to that effect,
As for petitioner’s documentary requests, and his complaints about improper limitation of his previous discovery presented in support thereof, it is apparent that the time period to which they relate is in large part a period during which petitioner was no longer having any dealings with Cities. This is important because of two factors crucial to Waldron’s conspiracy charge against respondent: first, petitioner argues that Cities joined the conspiracy when it refused to go through with a deal through him for Iranian oil, namely, in the latter part of 1952, and second, petitioner’s contract with NIOC, the property right allegedly interfered with by the illegal boycott, expired in the spring of 1953. In addition, petitioner had at the time of this motion already obtained discovery of a very substantial number of documents having to do with Cities’ dealings in Iranian oil prior to November 1, 1952, the latest point in time ever seriously suggested by petitioner for Cities to have joined the conspiracy.
In a proper case, of course, a party might well have the right to demand discovery of documents from an opposing party dealing with activities during a period outside that covered by the subject matter of the lawsuit
Notwithstanding Waldron’s complaints about the limitations placed on his discovery of materials and witnesses, it is evident that he has had sufficient discovery either to substantiate his claims of conspiracy to the extent of raising a material issue of fact thereon, or of providing a basis for investigation of his own to gather additional evidence during the five years for which Cities’ motion was pending below. The fact that petitioner accomplished neither of these ends with the discovery he obtained is ample support for the trial judge’s determination that additional discovery would be futile and would merely operate to require Cities to participate
For the foregoing reasons we hold that summary judgment was properly awarded in the courts below to respondent.
Affirmed.
Plaintiff, Gerald B. Waldron, died in November 1964. His executor has been substituted as the petitioner. We shall refer to both Waldron and the executor as “petitioner” or “Waldron” interchangeably.
Gulf subsequently settled with petitioner and is no longer a party defendant, although it remains as an alleged co-conspirator.
This practice has since been changed by rule. See 4 Moore, Federal Practice ¶26.13 [3], at 1154 (2d ed. 1967).
Anglo-Iranian was a co-owner of the Kuwait Oil Co., the actual holder of the entire Kuwait oil concession, but does not appear to have participated in the negotiations with Cities.
Petitioner argues that a “most-favored-nations clause” was inserted at the last minute for the benefit of Cities. The record reveals that the so-called clause was simply a unilateral declaration from Gulf in the form of a letter from its chairman of the board that in the event of future price changes its policy would be to give Cities the benefit of the better price.
Cities’ president, W. Alton Jones, died in an airplane crash on March 1, 1962. Three other Cities’ executives who had participated in varying degrees in Cities’ exploration of the possibility of purchasing Iranian oil had also died by this time.
Although petitioner’s discovery motion preceded respondent’s renewal of its summary judgment motion, it is evident that petitioner’s motion was made with full knowledge that a renewal of respondent’s motion would soon be forthcoming. In a very real sense it was thus a response to the summary judgment motion and was intended to serve as a ground for arguing that the motion should not be granted.
38 F. R. D. 170.
361 F. 2d 671 (1966).
Documents covering internal Cities’ discussion of these matters were also ordered to be produced for the period from October 1, 1952, to November 1, 1952.
See n. 7, supra.
For the purpose of evaluating Waldron’s case against Cities, his allegations about a conspiracy to boycott him carried out by the other defendants herein must be taken both as true and as
At this date Watson was Cities’ senior vice president. He subsequently became chairman of the board.
This percentage was made up of the three equal shares initially awarded to Richfield, Cities, and the Sinclair Oil Corp. (Sinclair also held about a one-third stock interest in Richfield.) Cities and Sinclair both transferred their shares to Richfield, apparently for no consideration.
In his brief in this Court petitioner drastically changes his theory of conspiracy. He now argues that Cities’ participation in the conspiracy was obtained by threats of retaliation from the other defendants. While conceivably petitioner could have argued at the trial level that under such cases as Klors, Inc. v. Broadway-Hale Stores, Inc., 359 U. S. 207 (1959), and United States v. Parke, Davis & Co., 362 U. S. 29 (1960), acquiescence because of threats in an illegal scheme conceived and carried out by others for their own benefit mates the acquiescing party a member of an illegal combination, we decline to pass upon such a contention when it is presented for the first time in this Court. Although at one point in this complex and protracted case, which has thus far produced over 12,000 pages of record, the petitioner alleged that the other defendants have “secretly threatened, induced and conspired with defendant Cities Service to break off all dealings with plaintiff,” this intimation of a coerced acquiescence theory was never properly pursued. Klors and Parke, Davis have not been cited or discussed by petitioner once in the entire course of these proceedings. One searches in vain among petitioner’s papers prior to argument in this Court for a single intelligible statement of this theory. In these circumstances we cannot attribute error to the courts below for their failure to discern such a theory, nor would it be appropriate at this stage in the case for us to pass upon petitioner’s theory of combination through coerced acquiescence and the accompanying difficult questions it would raise concerning Cities’ liability to petitioner or possible rights over against the other defendants.
Petitioner argues that Cities has thus far failed specifically to deny the allegations in his complaint charging it with conspiracy. In his original complaint petitioner charged that Cities “[a]t this
Petitioner also objects that only W. Alton Jones could have adequately denied the allegations of conspiracy and urges, therefore, that Cities’ submission of such an affidavit from Hill rather than from Jones should be held against Cities as evidence of conspiracy. However, as previously pointed out, Hill was the natural person to respond to petitioner’s factual allegations about Kuwait and the Consortium. See supra, at 271. Contrary to petitioner’s characterization of Hill as an attorney and an underling, Hill was an executive vice president of Cities, who had gone to law school many years before but who had not practiced law in a long time. As for petitioner’s failure to examine Jones, that has been shown above to be due basically to his own lack of diligence. See also n. 20, infra.
See generally Turner, The Definition of Agreement Under the Sherman Act: Conscious Parallelism and Refusals To Deal, 75 Harv. L. Rev. 655 (1962).
Indeed it was for the precise purpose of overturning a line of cases in the Third Circuit holding that a party could successfully oppose summary judgment by relying on his well-pleaded allegations that Rule 56 (e) was amended in 1963. See 6 Moore, Federal Practice ¶56.22[2], at 2821 (2d ed. 1966).
It must be remembered that the fact that approximately six years had elapsed between the date petitioner filed his complaint and the completion of the examination of petitioner and his associates is in no way the responsibility of the trial judge. Both parties had, as previously described, entered into numerous stipulations postponing the taking of depositions for months at a time. Petitioner argues that he cannot be penalized for not working full time at supplying the defendants with deposition testimony. This is certainly correct. However, petitioner cannot, by the same token, attempt to penalize respondent for delays in which he acquiesced with no hint of objection. Certainly no one will contend that over 5% years represents an example of the speed that a party interested in securing a swift resolution of his claims will require in order for himself and his associates to give 153 days of testimony.
See supra, at 272.
In fact, the affidavit submitted by petitioner’s counsel in support of his discovery motion is replete with references to the ill-use Carter allegedly suffered at the hands of Cities — rather an unpersuasive argument in support of the suggestion that in some way Cities had prevented Waldron from obtaining access to Carter.
Petitioner conceded below that his discovery should proceed under Rule 56 (f) rather than Rule 26.
Dissenting Opinion
dissenting.
The Court here upholds a summary judgment against a plaintiff in a suit for treble damages under the Sherman Antitrust Act. The case is a complex one in which the summary judgment was entered 11 years after the action was brought. It is strange, indeed, that during the more than 11 years before the summary judgment was entered, the defendant Cities Service should have enjoyed the luxury of never having been compelled by the court to answer the complaint, never having been required either to admit or deny the plaintiff’s charges that the defendant had entered into a conspiracy to destroy plaintiff’s business by boycotting it. There is one thing still stranger and more fantastic about the case; although the court permitted the defendants to interrogate the plaintiff for 153 days over a period of 5% years, the same court refused during the 11 years to permit the plaintiff to ask any questions whatever of many of Cities’ officers and employees who were most familiar with transactions about which the plaintiff complained. And all this was done in the face of our holding in Poller v. Columbia Broadcasting System, Inc., 368 U. S. 464, 473 (1962), that “summary procedures should be used sparingly in complex antitrust litigation” and that “[t]rial by affidavit is no substitute for trial by jury which so long has been the hallmark of ‘even handed justice.’ ”
In 1956 petitioner Waldron
After the trip to Iran, Cities officials prepared a memorandum reporting favorably on the prospects for using Iranian oil, but then in October 1952 Cities abruptly informed Waldron that it had no further interest in the Iranian oil which petitioner was offering on such favorable terms. The intense pressure to which Cities was being subjected at this time by the major companies is suggested by an incident that occurred only a month later at the annual convention of the American Petroleum Institute. Jones, President of Cities, had been slated to receive the Institute’s gold medal for being selected oil man of the year, but at the meetings representatives of the major companies threatened Jones that they would cut off Cities’ supplies of its sorely needed crude oil if he dealt further in Iranian oil, and he was not presented with the gold medal. Three months later the agreement between Cities and Gulf for the purchase of the Kuwait oil was formally executed. Then, after petitioner’s efforts to sell the Iranian oil had completely failed, the Iranian Government was forced to agree to turn over the nationalized properties to a Consortium of the major oil companies, and Cities was granted a small share in the Consortium.
Petitioner’s antitrust complaint charged that Cities, which previously had eagerly pursued the prospect of purchasing Iranian oil, had changed its views and had forgone its chance to make the “billions” that Jones had
After taking the deposition of Hill, petitioner filed an amended complaint which eliminated his specific reliance on the Kuwait and Consortium deals and stressed generally that Cities’ participation in the conspiracy had been obtained by threats and inducements from the principal conspirators. The court again postponed a ruling on Cities’ motion for summary judgment, and ordered that petitioner be permitted to make some further discovery, but once again the scope of discovery permitted
In spite of the fact that petitioner had amassed considerable evidence of Cities’ liability, in spite of the fact that Cities had been given unrestricted freedom to question petitioner while petitioner was barred from getting any information at all from Cities employees familiar with the Iranian transactions, in spite of the fact that the discovery eventually allowed to petitioner had been sharply restricted, in spite of the fact that petitioner never had an opportunity to question four of the eight Cities officials who had been most intimately connected with the alleged transactions, and in spite of the fact that Cities had never been required to answer the allegations of the complaint, the court entered summary judgment for Cities in September 1965. 38 F. R. D. 170 (1965). The Court of Appeals, in a short, uninformative opinion, affirmed the decision of the District Court. 361 F. 2d 671 (C. A. 2d Cir., 1966).
I.
The Court’s action in affirming this judgment cannot possibly be reconciled with this Court’s holding in Poller v. Columbia Broadcasting System, supra. There the Court warned against using summary judgments to decide complex antitrust litigation where motive and intent play leading roles. This is just such a case. Its complexity is such that even with a summary judgment it took 11 years to end it. Literally months and years were spent
It seems clear to me that even with petitioner’s very limited opportunity to gather evidence in support of his case, there is ample evidence in this record from which a jury could conclude that respondent Cities did indeed join the alleged conspiracy. Petitioner established that Cities needed Middle East oil, that he was offering Iranian oil on very attractive terms, and that Cities had in a number of ways manifested its considerable interest in purchasing this oil. Suddenly, Cities announced to petitioner that it did not intend to pursue the deal any further, and in fact took steps to make more difficult petitioner’s efforts to sell the oil to others.
II.
The Court in this case has deprived plaintiff of his right to discovery on highly technical and wholly indefensible grounds. The heart of the complaint here was that Cities Service and others conspired to boycott plaintiff’s sale of Iranian oil by use of threats and monopoly power in violation of the antitrust acts. Rule 56 (e) comprehensively provides for the use of depositions and affidavits, and Rule 56 (f) provides that where it appears that affidavits are unavailable the Court may refuse the application for summary judgment, or may order a continuance to permit affidavits to be obtained, or make such other order as is just. Thus it appears that the
The excuse given by the trial court for cutting off plaintiff’s right to discovery here will not hold water. It was that by pleading at one time that there were two possible reasons for Cities joining the conspiracy to boycott, he was perforce eternally barred from examining the defendants about any reasons other than those two in order to get more complete information as to why they conspired. To uphold this view of the District Court is to treat a lawsuit as a game in which the party who gets there first with the most questions wins the game. But lawsuits are not games. The end of each one of them, if courts remain true to the ancient traditions of justice, is to try each case in a way that permits truth to triumph. That has not been done here. This
I would reverse the case and direct that it go to trial.
The original plaintiff Waldron, like several crucial witnesses in this case, is dead and this action is now being carried on by his executor. For the sake of clarity I will refer to the original plaintiff Waldron as the petitioner here.
Thus, Cities’ President, Jones, instructed an associate to cable the Secretary of the Interior to advise the United States Government against purchasing gasoline from petitioner for military use. Although in the Court’s view this cable was “primarily” designed to
Reference
- Full Case Name
- First National Bank of Arizona v. Cities Service Co.
- Cited By
- 5360 cases
- Status
- Published