VAN DUSEN, Circuit Judge.
This dispute arose during a nationwide gasoline shortage in 1973. The appeal from summary judgment in favor of defendants raises these questions:
The district court answered these questions in the negative.
I. HISTORY OF THE CASE
In 1972-73, Clyde E. Harvey and Neil J. Nielsen, plaintiffs-appellants in this case, were partners in retail gasoline service stations, doing business as U-Serve Gas Company ("U-Serve"). Defendant-appellee Fearless Farris Wholesale, Inc. ("Wholesale") was a wholesaler of petroleum products and is wholly owned by Farris C. Lind. The other five named corporate defendants-appellees were retail gasoline service station companies ("Retail Companies"), also wholly owned by Lind.
Wholesale formerly sold its products both to the Retail Companies and to unaffiliated retailers, including U-Serve. Then the fuel shortage of 1973 set in. Beginning in January 1973, Wholesale reduced deliveries to U-Serve; later in that year Wholesale completely cut off U-Serve and six other retail customers, which included J. C. Penney Co., the Seven-Eleven chain, and Circle K. In February 1974, under the federal government's mandatory allocation program, deliveries were partially restored.
Plaintiffs Harvey and Nielsen first filed a complaint against the defendant companies in March 1974. This complaint, as amended in January of 1975, sought recovery in three counts. Count I alleges, inter alia, a conspiracy in restraint of trade in violation of § 1 of the Sherman Act, 15 U.S.C. § 1. Count II alleges violation of Idaho Code § 28-2-615 (corresponding to § 2-615 of the Uniform Commercial Code), which pertains to a seller's duty to allocate supplies to customers under a contract of sale; Count III charges tortious interference with contractual and business arrangements alleged to exist between plaintiffs and Wholesale.
The defendants moved for summary judgment in July 1974, supporting their motion with affidavits pursuant to F.R.Civ.P. 56. Plaintiffs filed counter-affidavits. In addition, both parties have taken depositions and have filed subsequent affidavits and counter-affidavits.
In a partial summary judgment order of September 5, 1975, the district court granted the defendant companies' motion for summary judgment on the Count I (Sherman Act) claim, but allowed the other two counts of the amended complaint to remain on the merits. Harvey and Nielsen appealed from the partial summary judgment and both parties briefed the Sherman Act issue for this court. However, on February 3, 1977, this court dismissed the appeal for lack of a final order in the district court, remanding the matter for disposition of the remaining two counts. On June 10, 1977, the district court entered a final judgment in favor of defendants on these counts, and this appeal followed.
In accordance with this court's order of February 3, 1977, the parties utilized their briefs prepared in the first appeal for their Sherman Act claim in this second appeal. Both parties, in addition, briefed on this appeal the issues arising under Count II. Plaintiffs did not pursue their Count III claim in briefs or at oral argument on this appeal.
II. SHERMAN ACT CLAIM: INTRAENTERPRISE CONSPIRACY
Plaintiffs allege that the defendant companies' course of conduct during the period of fuel shortage constituted a "combination or conspiracy in restraint of trade" prohibited by § 1 of the Sherman Act.
a. Factual Issues
The parties do not dispute the following facts: that the incorporators of all the defendant corporations are the same; that Farris C. Lind is the sole shareholder, President and Board Chairman of Wholesale and of all the Retail Companies; that Lind, his wife Virginia, and Neal R. Olson are the directors of each of these corporations; that Olson is Executive Vice President and General Manager of each corporation; that Virginia Lind has never taken an active part in management of the corporations; and that accounting convenience and tax benefits were the original reasons for doing business through separate corporations.
However, plaintiffs argue that there is at least a genuine issue of fact as to whether two or more persons participated in the decision to cut off supplies to them in 1973. An affidavit of Mr. Olson, dated July 2, 1974, states:
Similarly, an affidavit of Mr. and Mrs. Lind, dated February 6, 1975, declares that "Lind is in total and complete control of each of the [defendant] corporations," and specifically that the decision to discontinue supplies to plaintiffs "was a decision made solely by Farris C. Lind," which Lind only subsequently communicated to Mr. Olson.
In an affidavit of September 23, 1974, in an affidavit of August 12, 1975, and in a deposition of January 16, 1975 plaintiff Harvey made statements the substance of which was as follows: that during several years of extensive dealings with Wholesale, Mr. Harvey had always conducted business directly with Mr. Olson and never with Mr. Lind; that Mr. Olson had often made on-the-spot sale agreements with Mr. Harvey and had promised not to cut off plaintiffs' supplies in the event of a gasoline shortage;
Since this case is here on appeal from summary judgment, this court must determine whether plaintiffs have raised a genuine issue of material fact within the meaning of F.R.Civ.P. 56(c). We are mindful of the Supreme Court's admonitions that "summary procedures should be used sparingly in complex antitrust litigation where motive and intent play leading roles, the proof is largely in the hands of the alleged conspirators, and hostile witnesses thicken the plot," Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 473, 82 S.Ct. 486, 491, 7 L.Ed.2d 458 (1962); see Norfolk Monument Co. v. Woodlawn Memorial Gardens, Inc., 394 U.S. 700, 704, 89 S.Ct. 1391, 22 L.Ed.2d 658 (1969); and that on summary judgment motions "the inferences to be drawn from the underlying facts . . . must be viewed in the light most favorable to the party opposing the motion," United States v. Diebold, 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962); see Mutual Fund Investors v. Putnam Management Co., 553 F.2d 620, 624 (9th Cir. 1977); United States v. Perry, 431 F.2d 1020, 1022 (9th Cir. 1970). Nevertheless, the Poller case, supra, is not an insurmountable barrier to summary disposition of antitrust complaints, as the Supreme Court later emphasized when it granted summary judgment in First National Bank of Arizona v. Cities Service Co., 391 U.S. 253, 290, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968). Accordingly, this court has adopted the following rule:
Mutual Fund Investors, supra, 553 F.2d at 624, quoting ALW, Inc. v. United Airlines, Inc., 510 F.2d 52, 55 (9th Cir. 1975).
Here the defendants have presented probative evidence that only a single person, Mr. Lind, made the decision to refuse to deal with certain customers of Wholesale. We can find no "specific factual support," either direct or inferential, for plaintiffs' assertions to the contrary. The fact that Mr. Lind had never dealt personally with a relatively minor customer like Mr. Harvey has no bearing on Lind's capacity to make the policy decision that such customers should be cut off in times of shortage. Likewise, although Mr. Harvey asserted in his 1975 affidavit that "Farris Lind is in poor health and is unable to move freely without assistance," this statement was in the present tense: plaintiffs produced no evidence that Mr. Lind was infirm in 1973 when the events at issue occurred, nor even that his infirmity was of the sort that would keep him from running his business. As for the fact that the Farris corporations each had three directors, to conclude therefrom that a particular policy decision made in response to a crisis was necessarily made by formal vote of the directors would be to make a legal presumption wholly at odds with reasonable factual inference.
In sum, although Mr. Olson was the conduit of communications with customers and had apparent authority to make subsidiary decisions as to purchase prices and terms of delivery, the most that can be plausibly
b. Intra-enterprise Conspiracy
The question of law remaining under plaintiffs' Sherman Act claim is whether a "combination or conspiracy" can be deemed to exist on the facts above, where one person is the sole owner and major decisionmaker for a group of affiliated corporations.
It is fundamental that a single person or economic entity cannot combine or conspire in isolation: there must be concerted action by a plurality of actors. E. g., Mutual Fund Investors, supra, 553 F.2d at 625; Nelson Radio & Supply Co. v. Motorola, 200 F.2d 911, 914 (5th Cir. 1952), cert. denied, 345 U.S. 925, 73 S.Ct. 783, 97 L.Ed. 1356 (1953); Windsor Theatre Co. v. Walbrook Amusement Co., 94 F.Supp. 388, 396 (D.Md. 1950), aff'd, 189 F.2d 797 (4th Cir. 1951); L. Sullivan, Handbook of the Law of Antitrust 323 (1977); 58 C.J.S. Monopolies § 21a, at 981, n. 66 (1948); Note, Intra-Enterprise Conspiracy Under Section 1 of the Sherman Act: A Suggested Standard, 75 Mich.L.Rev. 717 (1977). Thus it is generally accepted that there can be no conspiracy where only one corporation is involved in the alleged restraint of trade.
On this question of intra-enterprise conspiracy, this court has in two recent cases
Similarly, in Mutual Fund Investors, supra, this court reiterated that "[s]eparate incorporation, like the lack of intraenterprise competition, is not dispositive of the [conspiracy] question." 553 F.2d at 626. There the corporations at issue were vertically integrated, as are the defendant companies in the instant case. However, there the record showed that none of the affiliated companies had "exercised its judgment approving [the principal corporation's] refusal to deal," and that no unreasonable restraint of trade had occurred. Id. at 627. In neither of these cases, therefore, was it necessary to decide definitively what additional factors are necessary before affiliated corporations will be deemed capable of conspiring together.
Nor is it necessary in the case before us. For even if the defendant corporations, acting through their officers or agents, were deemed theoretically capable of conspiring, here in fact no conspiracy, no meeting of two or more minds, occurred. As discussed above, plaintiffs produced no probative evidence that anyone other than Farris Lind — sole stockholder, President and Chairman of the Board of Wholesale and the Retail Companies — made the decision to refuse to deal with plaintiffs. Mr. Olson's subsequent implementation of this decision does not make him a participant in a conspiracy. He acted solely as Mr. Lind's agent, after the allegedly exclusionary decision was made; it is fundamental that an agent cannot conspire with his principal. E. g., Nelson Radio & Supply Co. v. Motorola, supra, 200 F.2d at 914-15; Rayco Mfg. Co. v. Dunn, 234 F.Supp. 593, 598 (N.D.Ill.1964).
Plaintiffs might argue that even though Mr. Lind alone made the allegedly exclusionary decision to cease deliveries, there was a constructive plurality of actors in that decision because he himself legally embodies the six corporations of which he is sole owner. However, that position is conceptually indistinguishable from the position that mere separate incorporation is alone determinative of the question of intra-enterprise conspiracy. This theory we rejected in Mutual Fund Industries and Knutson.
Moreover, even if plaintiffs could show evidence of a meeting of two or more individual "minds" in the decision to cease deliveries, they would not automatically have established a conspiracy cognizable under § 1. The courts have almost universally rejected the position that two or more directors, officers or agents acting on behalf of a single corporation can be capable of conspiring in restraint of trade, either among themselves or with their corporation. See cases cited at note 7, supra. The "two or more minds" that meet in conspiracy must be minds representing the respective business interests of two or more corporations. The complaint in this case did not include Mr. Lind and Mr. Olson as defendants; it alleges only that the Farris corporations conspired. But plaintiffs have produced no evidence that Mr. Lind was acting in the interests of one corporation, while his general manager was primarily concerned with another corporation. Had the two individuals conspired, both would have been acting on behalf of the same corporations. Thus here, as in Mutual Fund Industries, supra, 553 F.2d at 627, the evidence does not show that any one of the five Retail Companies, through its human agent, "exercised its judgment approving" Wholesale's refusal to deal or "colluded illegally with" Wholesale.
In sum, the district court correctly found that there was no material fact in dispute on the Sherman Act claim and that defendants were entitled to judgment on that
III. COUNT II: RIGHT TO APPORTIONMENT UNDER IDAHO CODE § 28-2-615
Plaintiffs contend that under Idaho Code § 28-2-615 they were entitled to an allocation of supplies during the shortage period. Section 28-2-615 (corresponding to § 2-615 of the Uniform Commercial Code) provides, in pertinent part, that where a "contingency the nonoccurrence of which was a basic assumption on which the contract was made" partially affects the capacity of a seller "under a contract for sale" to deliver to his buyer, then the seller "must allocate production and deliveries among his customers but may at his option include regular customers not then under contract as well as his own requirements for further manufacture."
Plaintiffs argue that they were not mere "regular customers not then under contract," dependent upon the good graces of the seller for allocation under § 28-2-615; they claim to be buyers under a "contract for sale," to whom the seller had no choice but to allocate. Specifically, Mr. Harvey has claimed in his deposition that he had an oral agreement with Wholesale, made in 1967 or 1968, whereby Wholesale would supply U-Serve's total "gasoline requirements" in Idaho at a "competitive price" to be determined by the seller (Deposition of Clyde E. Harvey, Jan. 16, 1975, at 18-21). In addition, Mr. Harvey claimed that Wholesale, through Mr. Olson, gave reassurances at an oil marketer's convention in 1973 that it would continue to supply U-Serve in the event of a shortage (id. at 24-27). Neal Olson's affidavit of February 21, 1975, on the other hand, stated that any such purported agreement was "a total fabrication."
Since it is plaintiffs who insist that an oral agreement was made, it is they who must describe what the terms of the agreement were. Mr. Harvey, when questioned in deposition, made the following admissions about his understanding of the bargain:
Deposition of Clyde E. Harvey, Jan. 16, 1975, at 39, 75-76 (emphasis added).
The district court concluded that the purported agreement lacked mutuality of obligation under these admitted terms, whereby the purchaser was free to buy elsewhere while the seller was bound at all times to sell to the purchaser. The court held that where there was no mutuality, there was no enforceable contract under Idaho contract law, as set out in McCandless v. Schick, 85 Idaho 509,
On appeal, plaintiffs do not dispute the district judge's reading of the Idaho case law, making mutuality of obligation a prerequisite to enforceability of most executory contracts. They dispute only the conclusion that that case law governs the type of agreement which they claim. Plaintiffs' argument rests on the second sentence in § 28-1-201(3), which provides that "[w]hether an agreement has legal consequences is determined by the provisions of [the Idaho Uniform Commercial Code], if applicable; otherwise by the law of contracts . . ." (emphasis added). See also § 28-1-103, which provides that pre-existing law continues as a supplement to the Code, "[u]nless displaced by the particular provisions of [the Code]" (emphasis added). Plaintiffs urge (a) that § 28-2-305 (open price term)
Section 28-2-305 provides that in certain circumstances a valid "contract for sale" can be concluded "even though the price is not settled" at the time of the contract. Plaintiffs argue that the terms of agreement described in the above deposition merely reflect an understanding that Wholesale's prices would be competitive or market prices fixed in good faith, as required under § 28-2-305(2). We may assume arguendo that if the seller failed to fix a reasonable price in good faith under § 28-2-305(2), the buyer would be entitled to "treat the contract as cancelled" pursuant
Nor does this purported arrangement constitute a requirements contract within the purview of § 28-2-306. It is elementary that a requirements contract is one in which the buyer "expressly or implicitly promises he will obtain his goods or services from the [seller] exclusively." Bank of America Nat'l. Trust & Savings Ass'n v. Smith, 336 F.2d 528, 529 n. 1 (9th Cir. 1964) (emphasis added); see e. g., Lowell O. West Lumber Sales v. United States, 270 F.2d 12, 17 (9th Cir. 1959); Propane Industrial, Inc. v. General Motors Corp., 429 F.Supp. 214, 218 (W.D.Mo.1977); In re United Cigar Stores Co., 8 F.Supp. 243 (S.D.N.Y.), aff'd, 72 F.2d 673 (2d Cir. 1934); Shader Contractors, Inc. v. United States, 276 F.2d 1, 4, 149 Ct.Cl. 535 (1960); 1A A. Corbin, On Contracts § 157 (2d ed. 1963); 1 S. Williston, On Contracts § 104A (3d ed. 1957); Note, Requirements Contracts: Problems of Drafting and Construction, 78 Harv.L.Rev. 1212, 1213 (1965). Yet in this case plaintiffs have expressly stated that the purported agreement permitted them to purchase an indefinite portion of their supplies from sellers other than Wholesale. Such an arrangement would not entail a promise to buy U-Serve's Idaho gasoline requirements from Wholesale, but merely to buy from Wholesale when it was advantageous to do so. Again, the provision for "good faith" in § 28-2-306 cannot stretch the statute to make such a one-sided executory agreement enforceable.
In sum, plaintiffs have not shown the Idaho Uniform Commercial Code to be "applicable" to the peculiarly convenient arrangement they claim. We agree with the district court that the Idaho rules requiring mutuality of obligation thus govern and make that arrangement unenforceable. Therefore, there is no basis for the claim in Count II.
The Amended Final Summary Judgment filed June 10, 1977, will be affirmed.
As this court's Memorandum and Order of Dismissal of February 3, 1977, points out, no such determination had been sought or granted as to Count I. Nor does such a determination appear in the record prior to entry of the district court's Amended Final Summary Judgment, which expressly directed entry of final judgment on Count I as well as on Counts II and III. Therefore, since the 1975 partial summary judgment on Count I would have been subject to revision under F.R.Civ.P. 54(b) at the time of the 1977 Olson deposition, this deposition may properly be considered in connection with the Count I claims.
At a later date, in his affidavit of August 12, 1975, Mr. Harvey asserted "[t]hat it would be incredible to believe that Farris Lind or anyone else connected with the defendant corporations would . . . decide to terminate supply arrangements with any customers without first having consulted or conferred with Neal R. Olson." We agree with the district court that the plaintiffs' mere assertion of disbelief in defendants' affidavits is insufficient to raise a genuine issue of fact. See Strickland v. Watt, 453 F.2d 393, 395 (9th Cir. 1972). Plaintiffs did not choose to depose defendants' affiant, Mr. Olson, until 1977 and did not then choose to cross-examine him on his statement that Mr. Lind was the sole party who made all business decisions.
The Supreme Court has never stated definitively how broad in scope the theory of intra-enterprise conspiracy should be, and the theory has been subjected to much criticism and comment. See, e. g., P. Areeda, Antitrust Analysis ¶ 338 (2d ed. 1974); Handler, Twenty-Five Years of Antitrust, 73 Colum.L.Rev. 415, 452-53 (1973); Handler, Through the Antitrust Looking Glass — Twenty-First Annual Antitrust Review, 57 Calif.L.Rev. 182, 182-86 (1969); Willis and Pitofsky, Antitrust Consequences of Using Corporate Subsidiaries, 43 N.Y.U.L.Rev. 20 (1968); McQuade, Conspiracy, Multicorporate Enterprises, and Section 1 of the Sherman Act, 41 Va.L.Rev. 183 (1955); Note, Intra-Enterprise Conspiracy Under Section 1 of the Sherman Act, 75 Mich.L.Rev. 717 (1977); Comment, All in the Family: When Will Internal Discussions Be Labelled Intra-Enterprise Conspiracy?, 14 Duq.L.Rev. 63 (1975) [hereinafter All in the Family].
In an attempt to limit the reach of the doctrine of intra-enterprise conspiracy, some lower federal courts have identified exceptions to it. For example, it has been held that no combination or conspiracy exists where the affiliated corporations do not hold themselves out as competitors, e. g., Ark Dental Supply Co. v. Cavitron Corp., 461 F.2d 1093, 1094 n. 1 (3d Cir. 1972) (dictum); Call Carl, Inc. v. BP Oil Corp., 403 F.Supp. 568, 572-73 (D.Md. 1975), aff'd on this issue, 554 F.2d 623, 628 (4th Cir.), cert. denied, 434 U.S. 923, 98 S.Ct. 400, 54 L.Ed.2d 280 (1977); Beckman v. Walter Kidde & Co., 316 F.Supp. 1321, 1326 (S.D.N.Y.1970), aff'd per curiam, 451 F.2d 593 (2d Cir.), cert. denied, 408 U.S. 922, 92 S.Ct. 2488, 33 L.Ed.2d 333 (1972); or where the concerted action between the affiliated corporations restrains no outsider's trade, e. g., REA Express, Inc. v. Alabama Great Southern R. Co., 427 F.Supp. 1157 (S.D.N.Y.1976), aff'd mem. sub nom. Sowerwine, Trustee in Bankruptcy v. United States, 431 U.S. 961, 97 S.Ct. 2914, 53 L.Ed.2d 1057 (1977); In re Penn Central Securities Litigation, 367 F.Supp. 1158, 1166-67 (E.D.Pa.1973); see Report of the Attorney General's National Committee to Study the Antitrust Laws 34 (1955); or where there is no anticompetitive motive for the separate corporate status of the defendants, e. g., I. Haas Trucking Corp. v. New York Fruit Auction Corp., 364 F.Supp. 868, 873 (S.D.N.Y.1973) (separate incorporation solely to accommodate separate unions); or where the affiliated corporations are for practical purposes "a single business unit," e. g., Giant Paper & Film Corp. v. Albemarle Paper Co., 430 F.Supp. 981, 985-86 (S.D.N.Y.1977); Beckman, supra, 316 F.Supp. at 1326; see Knutson v. Daily Review, Inc., 548 F.2d 795, 801 (9th Cir. 1976).
The limitation on the intra-enterprise conspiracy doctrine which is most pertinent to the case at hand has been dubbed the "one-man show" exception, holding that affiliated corporations owned and controlled by a single individual are not capable of conspiring in restraint of trade. Comment, All in the Family, supra at 85-87. While the court in Rayco Mfg. Co. v. Dunn, 234 F.Supp. 593, 598 (N.D.Ill.1963), may have held that corporations owned and controlled by a single person cannot conspire as a matter of law (just as a single corporation as a matter of law cannot conspire with itself), other decisions involving "one-man" enterprises have rested on the fact that the sole owner was also the sole decision-maker in the action of which complaint is made. See the district court decision in Knutson v. Daily Review, Inc., 383 F.Supp. 1346 (N.D.Cal.1974); Windsor Theatre Co. v. Walbrook Amusement Co., 94 F.Supp. 388 (D.Md.1950), aff'd, 189 F.2d 797 (4th Cir. 1951). We need only follow the latter course in the case at hand, thus not precluding a finding of conspiracy in a one-man enterprise on other facts.
See also § 28-2-204 (formation of contract for sale). According to the definition in § 28-2-106(1), the agreement may relate to the future sale of goods as well as a present sale. Under these broad provisions, and in light of the parties' dealings over several years, see § 28-1-205 (course of dealing); § 28-2-208 (course of performance), it is at least an issue of fact whether there existed an actual "agreement" relating to the future sale of gasoline.
Thus the Code distinguishes between the fact that a bargain is struck, and the transubstantiation of that fact into a legal obligation by operation of governing law. See 1 R. Anderson, Uniform Commercial Code 73, 88, 234 (2d ed. 1970).
85 Idaho at 518, 380 P.2d at 898; see Kays v. Brack, 350 F.Supp. 1243, 1245 (D.Idaho 1972); Green v. Beaver State Contractors, Inc., 93 Idaho 741, 743, 472 P.2d 307, 309 (1970). See also Willard Sutherland Co. v. United States, 262 U.S. 489, 493, 43 S.Ct. 592, 67 L.Ed. 1086 (1923) (contract for the purchase of coal by the Government which does not require the Government to take, or limit its demand to, any ascertainable quantity, is unenforceable for lack of mutuality).