R. LANIER ANDERSON, III, Circuit Judge:
Pan-Islamic Trade Corporation ("Pan-Islamic") brought suit against sixteen oil companies,
I. Preliminary Facts
Pan-Islamic's story is that of a small group of businessmen daring to obtain the immense fortune promised by world crude oil trade, only to be frustrated either by their own inexperience in failing to appreciate market prices, and thus contracting with Sonatrach at too high a price, as argued by the defendant oil companies, or by an illegal conspiracy to boycott Algerian crude oil, as alleged by Pan-Islamic.
The impetus to form Pan-Islamic came in early 1971, when Mr. Jeffrey V. Miller, a Dallas crude oil broker, telephoned Icsel requesting his help in obtaining forty million barrels of Algerian crude oil for sale to Miller's unspecified European client at a price of approximately $3.12 per barrel.
To aid it in negotiations, Pan-Islamic hired as a consultant Mr. Charles Ragan, an attorney with brief experience in structuring crude oil contracts but with no previous participation in the actual purchase or sale of crude oil. In early May, 1971, Musslewhite and Ragan traveled to Algeria to negotiate with Sonatrach. Pan-Islamic entered these negotiations ill-prepared. Its principals had determined neither the posted price,
While in Algeria, Musslewhite received a telex from Icsel informing him that a second party, Coastal States Gas Producing Company ("Coastal States"), might be interested in purchasing forty million barrels of oil. There is nothing in the record to indicate the extent of Coastal States' interest and it is clear that when the contract with Sonatrach was consummated, there was no firm agreement with Coastal States.
Despite having no firm contract with Miller's principal and with Coastal States, and not having investigated current market prices, on May 14, 1971, Pan-Islamic executed a contract with Sonatrach that obligated it to purchase eighty million barrels of crude oil at $2.98 per barrel f. o. b. Algeria to be lifted over a twelve month period beginning with the contract date. Pan-Islamic also received an option to purchase forty million barrels each year thereafter for the next four years. Pan-Islamic had a guarantee of the price of $2.98 per barrel through June 30, 1972, for a maximum of forty million barrels. The option thereafter linked the contract price to the
Shortly after the contract with Sonatrach was consummated, Musslewhite learned the identity of Miller's principal, Mr. Kroening, and contacted him concerning a sale. Kroening indicated that the price Pan-Islamic was asking was too high. Because of the continuing inability of Pan-Islamic and Kroening to agree upon price, the transaction promised by Miller's contact never came to fruition.
Similarly, Pan-Islamic was unable to complete negotiations with Coastal States for a resale of its Algerian crude oil. Coastal States offered to purchase 24,000,000 barrels at $2.55 per barrel, and later made a second offer at $2.70 per barrel, but both offers were rejected by Pan-Islamic.
After the transactions with Coastal States and Miller's principal failed to materialize, Pan-Islamic entered negotiations in June with a company named Petroco for the lifting of 25,000 barrels of Algerian crude per day. The principals of Pan-Islamic disagree among themselves as to whether a contract with Petroco was ever consummated. It is undisputed that Petroco did not take delivery of any oil at the appointed time.
Also during June, Pan-Islamic began an effort to sell its crude oil to the defendant oil companies and others.
The parties to this suit dispute when Pan-Islamic's contract with Sonatrach terminated. The defendant oil companies claim the contract was terminated by July 27, 1971. The record shows that on June 9, 1971, Sonatrach notified Pan-Islamic that Pan-Islamic's failure to withdraw the required quantity of oil was in violation of the contract. On June 17, 1971, Sonatrach informed Pan-Islamic that as a result of the breach, Sonatrach considered itself released from the contract. A subsequent telex dated July 27, 1971, confirmed Sonatrach's position.
Pan-Islamic claims that the contract was not terminated on July 27 but that it was able in August to renegotiate the price from Sonatrach down to approximately $2.84 per barrel f. o. b. Algeria. It is clear that by September or October, 1971, Pan-Islamic' contract with Sonatrach was terminated.
On April 3, 1974, Pan-Islamic filed this suit against the defendant oil companies. The complaint is sparse, conclusory and inartfully drafted. The only claim which is relevant to this appeal concerns an alleged conspiracy to boycott the crude oil purchased by Pan-Islamic. The complaint alleges a French-sponsored boycott of Algerian crude oil in response to the Algerian government's partial nationalization of French oil interests in Algeria. It alleges that each of the defendant oil companies participated in this boycott both by express and implied agreement. Although the complaint did not so indicate, it was clear from the evidence submitted by Pan-Islamic that it was relying heavily on the theory of conscious parallelism to establish an inference of conspiracy.
The trial court granted summary judgment to all the defendants on all claims. It found that the evidence submitted to Pan-Islamic concerning the existence of a French-sponsored boycott to be inadmissible hearsay. With respect to eleven of the defendants,
II. Amended Complaint
Approximately nine months after its original complaint had been filed, Pan-Islamic filed a motion for leave to amend its complaint. Count I of the proposed amended complaint contained essentially the same allegations and causes of action as in the original complaint. Count II of the proposed amended complaint, though, would have considerably broadened the suit.
Count II, like the original complaint, is cursory. It alleges additional violations of the antitrust laws under § 4 and § 8 of the Clayton Act, 15 U.S.C.A. §§ 15 and 19, and under § 1 and § 2 of the Sherman Act, 15 U.S.C.A. §§ 1 and 2. In Count II, Pan-Islamic claims that the defendant oil companies have contracted, combined and conspired in restraint of trade and have monopolized and attempted to monopolize the following operational areas of the petroleum industry:
Pan-Islamic in a conclusory allegation asserts that as a result of the above alleged violations, it was not able to sell its crude oil to the defendant oil companies or to others. In a series of additional conclusory allegations, Pan-Islamic charges the oil companies with manipulation in the exploration, production, and refining of crude oil. There is no factual allegation as to how this manipulation was accomplished. There is no allegation as to the purpose, substance, or understanding of the alleged § 1 conspiracy to restrain trade. The only factual allegation in Count II is that the oil companies have employed an attorney and have met under the guise of two groups of oil companies, the New York Policy Group and the London Policy Group, for the purpose of establishing a unilateral policy on Middle Eastern, Algerian, and Libyan oil. Pan-Islamic nowhere alleges how its injury was proximately caused by these alleged activities.
The district court refused to grant leave to file the amended complaint on grounds that Pan-Islamic had no standing under the amended complaint. The trial court reasoned that Pan-Islamic had failed to allege facts sufficient to show the injury it suffered was by reason of the defendant oil companies' conduct, as required under 15 U.S.C.A. § 15. It found that Pan-Islamic had failed to allege facts showing that the asserted conduct was the proximate cause of its asserted injury and that any damages are not merely incidental, consequential, or so removed from the injury as to be only remotely causative. The trial court also concluded that the defendants would be subjected to hardship and prejudice if the filing of the amended complaint were allowed and if Pan-Islamic were permitted to pursue massive discovery into every phase of the defendants' worldwide oil operations.
We hold that the trial judge, in denying leave to amend, did not abuse his discretion for two reasons. The bulk of Count II was clearly subject to dismissal because Pan-Islamic failed to allege facts indicating standing to sue with respect to most, if not all, of the claims alleged in Count II. Those claims in Count II for which Pan-Islamic may have had standing to sue were adequately raised in its original complaint.
Section 4 of the Clayton Act, 15 U.S.C.A. § 15 (West 1973), which reads,
has been construed to impose a standing requirement on antitrust civil litigants. Not simply anyone arguably injured by an antitrust violation may bring suit. Even though an individual may suffer a pocketbook injury, he must be the "target" of the anti-competitive practice before he may sue. Jeffrey v. Southwestern Bell, 518 F.2d 1129, 1131 (5th Cir. 1975). The Supreme Court has noted with approval that "[t]he lower courts have been virtually unanimous in concluding that Congress did not intend the antitrust laws to provide a remedy in damages for all injuries that might conceivably be traced to an antitrust violation." Hawaii v. Standard Oil Co., 405 U.S. 251, 262, n.14, 92 S.Ct. 885, 891, n.14, 31 L.Ed.2d 184 (1972).
Jeffrey explained the "target area" test of standing as follows:
518 F.2d at 1131. An important rationale for this rule is to prevent an antitrust defendant from being subjected to a myriad of treble—damage suits by all those in any way affected by an antitrust violation. Hawaii v. Standard Oil Co., supra.
The determination of standing is a preliminary one, to be answered only from an examination of the allegations of the complaint. In re Beef Industry Antitrust Litigation, 600 F.2d 1148, 1168 (5th Cir. 1979), other claims addressed, 607 F.2d 167 (5th Cir. 1979), cert. denied, ___ U.S. ___, 101 S.Ct. 280, 65 L.Ed.2d ___ (1980); Yoder Bros., Inc. v. California-Florida Plant Corp., 537 F.2d 1347, 1359 (5th Cir. 1976), cert. denied, 429 U.S. 1094, 97 S.Ct. 1108, 51 L.Ed.2d 540 (1977). Pan-Islamic, as indicated in both the original complaint and in the amended complaint, has no connection with the oil business other than its single contract with Sonatrach and its attempt to resell the Algerian crude. There is no allegation that Pan-Islamic intended to remain and establish itself in the oil brokerage business after completion of the Sonatrach contract. Pan-Islamic does not allege that it is a competitor in any of the five areas of the oil industry for which it alleges antitrust violations, or that it intends to enter these areas. The only injury claimed is its inability to sell the oil it purchased in the Sonatrach contract.
Pan-Islamic's allegations of antitrust violations in the areas of exploration, production and transportation of crude oil fail to establish standing, because there is no allegation that Pan-Islamic has entered or has attempted to enter these phases of the oil business. Nor has Pan-Islamic alleged that it has had to pay monopolistic prices for crude oil or for transportation thereof, or that it was unable to purchase transportation for its crude oil.
Pan-Islamic's allegations of antitrust violations in the phase of refining presents a closer question. Certainly monopoly power or a conspiracy in restraint of trade at the refining level might give the defendant oil companies monopsony or oligopsony
With respect to Pan-Islamic's allegations of antitrust violations in the transportation of refined products or in the marketing of refined products, Pan-Islamic has failed to establish that it is within the "target area" of these violations since it fails to allege it was a purchaser (or had any other nexus to) of transportation for refined products or was a purchaser of the refined products themselves. These are the same failures we found in In re Beef Industry, where we held that cattle farmers and ranchers had no standing to sue on a theory of retail price fixing by grocers, since the farmers and ranchers failed to allege they had purchased any beef at retail. 600 F.2d at 1168. Indeed, Pan-Islamic's case is weaker than that in In re Beef Industry since Pan-Islamic does not make even rudimentary allegations, present in In re Beef Industry, that antitrust violations in the retail phase of the industry resulted in reduced demand for its product.
Having found Pan-Islamic to have no standing with respect to four of the five antitrust violations it alleged in its amended complaint, and no prejudice resulting from the refusal to allow amendment of its complaint with respect to the fifth, we refuse to find the trial court abused its discretion in refusing Pan-Islamic leave to amend its complaint.
III. Extent of Discovery
Pan-Islamic complains that the trial court improperly limited discovery, wrongfully restricting discovery both in time and in scope. Clearly, if Pan-Islamic did not have an adequate opportunity to discover facts to oppose the motion for summary judgment, granting summary judgment would be improper. First-National Bank of Arizona v. Cities Service Co., 391 U.S. 253, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968); George C. Frey Ready-Mixed Concrete, Inc. v. Pine Hill Concrete Mix, Corp., 554 F.2d 551 (2nd Cir. 1977); Parrish v. Board of Commissioners of Alabama State Bar, 533 F.2d 942 (5th Cir. 1976); see also Hospital Building Co. v. Rex Hospital Trustees, 425 U.S. 738, 96 S.Ct. 1848, 48 L.Ed.2d 338 (1976) (dismissals in antitrust cases prior to giving plaintiff ample opportunity for discovery to be used sparingly). After a careful review of the record, we are convinced that Pan-Islamic had ample opportunity to engage in discovery on all issues encompassed by its original complaint and to bring appropriate motions to compel answers and the production of documents.
Pan-Islamic filed its original complaint on April 3, 1974. After the defendants filed their answers to the original complaint, several of the defendants immediately began their discovery process. Pan-Islamic, though, did not begin its discovery at
On January 6, 1975, Pan-Islamic filed its Motion for Leave to Amend its Complaint and a motion that the case be handled pursuant to the Manual for Complex Litigation. Thereafter, Pan-Islamic did not initiate any discovery until it filed its First Set of Interrogatories to the defendants on June 11, 1975, fourteen months after the complaint was filed. At this time the trial court had not ruled on Pan-Islamic's motion to amend its complaint. These interrogatories consisted largely of very general, broad questions designed to ascertain what records were available and the identities of responsible officials. They were extensive, consisting of 120 questions, and were wide ranging, encompassing issues within both the original and amended complaint. All the defendants filed answers and objections to Pan-Islamic's interrogatories by October 8, 1975. The responses to these interrogatories among the defendants, not surprisingly, varied extensively. Many of the defendants identified relevant records and documents and indicated a willingness for Pan-Islamic to inspect and copy these documents. Some of the defendants objected on various grounds to questions arguably relevant to the issues of the original complaint. All of the defendants objected to the bulk of the questions on the grounds that such questions were relevant only with respect to the proposed amended complaint, on which the trial court had not yet ruled. Despite the paucity of answers to its interrogatories, Pan-Islamic did not move for a motion to compel answers to interrogatories pursuant to Fed.R.Civ.P. 37(a). Nor did it attempt any further discovery in the form of depositions, additional interrogatories, requests for production of documents, or follow-ups on those offers permitting Pan-Islamic to inspect and copy records.
Matters on both sides thereafter lay dormant until March 26, 1976, when the trial court scheduled a pre-trial conference for June 10, 1976, in order to determine whether to grant leave to amend, whether to handle the cases under the provisions of the Manual for Complex Litigation, and to establish a schedule for orderly and efficient discovery. At this pre-trial conference, the trial court denied Pan-Islamic's Motion for Leave to Amend Complaint, but agreed to give the necessary representations under 28 U.S.C.A. § 1292(b) for Pan-Islamic to bring an interlocutory appeal. The trial court asked Pan-Islamic how much additional time it would need for discovery with respect to the original complaint. Pan-Islamic informed the court that six months would suffice. Relying upon this representation, the trial court ordered Pan-Islamic to complete its discovery by December 10, 1976.
Pan-Islamic did not immediately resume its discovery after the June 10 pre-trial conference. Instead, it devoted itself primarily to pursuing the interlocutory appeal of the trial court's refusal to grant leave to amend, which appeal this court refused to hear. Pan-Islamic also addressed several motions by various defendants for dismissal by reason of Pan-Islamic's failure to comply with court orders. It was not until October 13, 1976, four months into the six-month period the trial court gave Pan-Islamic for discovery, that Pan-Islamic wrote the defendants requesting depositions of specific officials. The record indicates that the defendants were co-operative and expressed a willingness to arrange the depositions. Yet, on December 10, 1976, the end of the six-month period specified for discovery, Pan-Islamic had taken depositions of officials of only Exxon, Tenneco and Shell. Pan-Islamic had submitted no additional interrogatories during this six-month
Toward the expiration of the six-month period, on November 29, 1976, Pan-Islamic filed a Motion for Extension of Time to Complete Discovery. It grounded this request on the time necessary to bring the interlocutory appeal and to address the various motions of the defendants. Pan-Islamic did not make any motion to compel any discovery at that time or at any time before the December 10 deadline. The trial court denied Pan-Islamic's request in an order filed December 17, 1976.
On January 3, 1977, Pan-Islamic then filed a motion for the trial court to reconsider its denial of an extension of time in which to complete discovery. This motion essentially repeated the story told above and raised the same grounds for an extension as in the prior motion. Among other things, the motion made references to several motions mistakenly believed to have been filed by Pan-Islamic to compel answers to its interrogatories.
Despite the limitation placed upon this extended discovery, on March 2, 1977, Pan-Islamic filed a motion for inspection and production and copying of special documents in the possession of Exxon, the existence of which Pan-Islamic learned during its depositions of Exxon officials in the earlier six-month discovery period. This motion was denied by the trial court on grounds that its order of February 14, 1977, had expressly limited discovery to the depositions for which notice had been given on October 13, 1976.
Pan-Islamic thereupon completed its depositions of officials of the defendants, and in addition submitted affidavits in opposition to the defendants' motion for summary judgment.
We test Pan-Islamic's contention of improperly curtailed discovery against the familiar standard that the trial court has wide discretion in determining the scope and effect of discovery. Blum v. Gulf Oil Corp., 597 F.2d 936 (5th Cir. 1979); Washington v. Norton Manufacturing, Inc., 588 F.2d 441 (5th Cir.), cert. denied, 442 U.S. 942, 99 S.Ct. 2886, 61 L.Ed.2d 313 (1979); Aviation Specialities, Inc. v. United Technologies Corp., 568 F.2d 1186 (5th Cir. 1978).
Pan-Islamic first complains that the trial court's dilatoriness in ruling on its motion to amend the complaint, despite alleged repeated requests for such a ruling,
Although Pan-Islamic acknowledges, as it must, that it represented to the court that six additional months of discovery would suffice, it argues now that it should not be held to its representation at the June 10 conference. It argues that when it requested six months, it assumed the trial court would defer ruling on the amended complaint. Since the trial court denied leave to file the amended complaint, but granted an interlocutory appeal, much of the six months, Pan-Islamic states, was consumed with pursuing the interlocutory appeal—a task it had not included in the estimate of six months for discovery. A reading of the transcript of the June 10 conference indicates, however, that after the court made clear that it was denying Pan-Islamic's motion to amend the complaint and would make the necessary representations to bring an interlocutory appeal, Pan-Islamic had ample opportunity to revise its estimate of time needed to complete discovery in light of its prosecution of an interlocutory appeal. However, it made no such revision.
Pan-Islamic maintains that the trial court abused its discretion in refusing to grant unlimited discovery in its order of February 14, 1977, extending discovery three months. We fail to perceive any abuse when Pan-Islamic had failed to efficiently utilize the two and one-half year period from its complaint to the June 10, 1976, conference or the interrogatories it filed during this period, and when Pan-Islamic failed to utilize the first four months of the six months it had requested for discovery. Cf. Aviation Specialities, Inc. v. United Technologies Corp., supra (where this court found adequate discovery in antitrust litigation when the trial court unilaterally imposed time limits on discovery and the appellant failed to act promptly to initiate discovery).
More specifically, Pan-Islamic argues that the trial court abused its discretion in interpreting its February 14 order to preclude Pan-Islamic's March 2 motion to produce certain Exxon documents, documents which Pan-Islamic had discovered during deposition of Exxon officials. A fair reading of the order indicates that the trial court did limit the three-month extension only to the completion of depositions and not to the filing of motions to compel production of documents or answers to interrogatories.
Finally, Pan-Islamic argues that the trial court erred in failing to compel any answers to Pan-Islamic's interrogatories. The defendant oil companies counter by arguing that Pan-Islamic made no motions to compel and is raising this issue for the first time on appeal. Pan-Islamic maintains that although it may have failed to file any formal motions to compel answers, its motion to reconsider the trial court's initial refusal to extend discovery made it clear that it believed such motions had been filed and was tantamount to actually filing such a motion. The resolution of this issue is muddied somewhat by the trial court's ruling, despite its belief that no motions had been filed, that those interrogatories not answered pertained only to the amended complaint and could not be compelled. We begin our resolution of this issue by noting that the Federal Rules of Civil Procedure provide that if a party objects to or fails to answer interrogatories, the party submitting the interrogatories may move the court for an order under Fed.R.Civ.P. 37(a) compelling an answer. Fed.R.Civ.P. 33(a). An objection to an interrogatory is not passed on by a court unless a motion to compel under Rule 37(a) is made. Fed.R.Civ.P. 33(a); 8 Wright and Miller, Federal Practice & Procedure, Civil, § 2173 (1970). We refuse to hold in the circumstances of this case that Pan-Islamic's statement to the trial court indicating a belief that a motion had been made was the same thing as making such a motion.
The fact that the trial court ruled that it would not compel answers despite its belief that no motion to compel had been filed does not change our reasoning. This
In summary, we conclude that the trial court did not abuse its discretion in limiting discovery. Pan-Islamic filed its first and only interrogatories on June 11, 1975, fourteen months after the complaint was filed. It never made a motion to compel with respect to the questions objected to by defendants. It never pursued the offers of several defendants to permit inspection and copying of records. At the pretrial conference on June 10, 1976, two years and two months after suit was filed, Pan-Islamic was granted six additional months for discovery, which was the length of time Pan-Islamic requested. Pan-Islamic pursued no further discovery until October 13, 1976, four months into the allotted six months. Although at first refusing another extension, the trial court did reconsider and permit three additional months of discovery, limited however to those depositions which had already been noticed. In light of Pan-Islamic's own lack of diligence in pursuing discovery, in light of Pan-Islamic's representation that the additional six month period would suffice, in light of the fact that the total time allowed for discovery was three years and one month, and under all the other circumstances here, we find no abuse of discretion.
IV. Appropriateness of Summary Judgment
Pan-Islamic relies heavily on Poller v. CBS, 368 U.S. 464, 82 S.Ct. 486, 7 L.Ed.2d 458 (1962), to argue that summary judgment may not be granted in a complicated antitrust case. The Supreme Court held in Poller that where there is substantial factual evidence tending to show the existence of a conspiracy to eliminate a competitor and where the crucial question is motive, summary judgment should be used sparingly.
The holding in First National Bank v. Cities Service Co., 391 U.S. 253, 88 S.Ct. 1575,
In upholding summary judgment for Cities Service, the Court made two noteworthy statements concerning summary judgment in antitrust suits. The Court stated:
391 U.S. at 280, 88 S.Ct. at 1588. In significant language qualifying the Poller caution against use of summary judgment in antitrust litigation, the Court stated:
Ibid. at 291, 88 S.Ct. at 1593.
It is clear that this circuit has heeded the language in Cities Service. When faced with defendants' sworn denial of the existence of a conspiracy, it is incumbent upon the plaintiff to produce significant probative evidence demonstrating that a genuine issue of fact exists as to this element of the complaint. Aviation Specialities, Inc. v. United Technologies Corp., 568 F.2d 1186 (5th Cir. 1978); Solomon v. Houston Corrugated Box Co., 526 F.2d 389 (5th Cir. 1976); Scranton Construction Co. v. Litton Industries Leasing Corp., 494 F.2d 778
Each defendant in this case, by affidavit of a responsible official and by answers to interrogatories, denied participation in any conspiracy or agreement to boycott Algerian crude oil. Appropriate officials from each company who were responsible for purchasing oil swore that the decision not to purchase Pan-Islamic's oil was made unilaterally and on the basis that Pan-Islamic's price was noncompetitive.
In light of the evidence offered by the defendant oil companies rebutting Pan-Islamic's conspiracy allegation, Pan-Islamic must produce significant, probative evidence supporting its complaint. Pan-Islamic attempts to rebut the defendants' motion for summary judgment with both direct and circumstantial evidence of a conspiracy. Part of Pan-Islamic's circumstantial evidence relies upon the theory of conscious parallelism. Theatre Enterprises, Inc. v. Paramount Film Distributing Corp., 346 U.S. 537, 74 S.Ct. 257, 98 L.Ed. 273 (1954). We have thoroughly reviewed the evidence Pan-Islamic offers to rebut the defendants' summary judgment motion. This review reveals a total lack of any significant, probative evidence supporting the existence of a conspiracy. We first discuss Pan-Islamic's allegation that there was a French-sponsored boycott of Alergian oil, and then we discuss Pan-Islamic's reliance on the theory of conscious parallelism.
A. French-sponsored boycott
Pan-Islamic contends that the French government sponsored a boycott of Algerian oil beginning on February 24, 1971, and lasting through June 30, 1971, with its effects continuing to the end of 1971.
The record is notably devoid of any direct or circumstantial evidence establishing the existence of any boycott of Algerian oil, either of a worldwide scope or by the defendant oil companies. There is no admissible evidence in the record demonstrating the pattern of worldwide sales of Algerian crude before, during or after the alleged boycott. Other than the alleged difficulties of Pan-Islamic, there is no admissible evidence that the Algerians or anyone dealing with Algerian crude had any difficulties in selling oil, nor is there any evidence of unusual price fluctuations of Algerian crude. There is nothing in the record establishing the defendant oil companies' need for Algerian crude or their purchasing habits with respect to Algerian crude before, during or after the alleged boycott. Although Pan-Islamic alleges that the French government together with French oil companies sponsored a boycott, there is no evidence from any French official or French oil company executive that they called for a boycott, nor is there any communication in the record of calls for boycotts directly from the French oil companies themselves.
Many of the factors the Supreme Court noted in dicta in First National Bank of Arizona v. Cities Service Co., supra, as supporting the existence of an English-supported boycott of Iranian oil in that case are lacking in this case. There is nothing in the record indicating the direct promulgation throughout the oil industry by the French government or oil companies of a threat to take all actions to protect their rights, including lawsuits, against those dealing in Algerian oil. Ibid. 391 U.S. at 278, 88 S.Ct. at 1585.
Pan-Islamic alleges that two organizations of oil companies, the London Policy Group and the New York Policy Group, were vehicles through which the oil companies established their boycott of Algerian crude. Many of the defendants, however, belong to neither group. Those who are members denied that there was any discussion of Algerian oil or the problems between France and Algeria at any meeting. Pan-Islamic has not attempted to rebut these characterizations of the discussions at the meetings of these two groups.
Pan-Islamic contends that four evidentiary items establish a genuine issue as to the existence of the French boycott: (1) the affidavit of Arnold I. Burns, (2) the affidavit of Tyrus G. Fain, (3) reference by oil company officials to a dispute between France and Algeria, and (4) a statement allegedly made by Roland M. Routhier, an official with Texaco.
Mr. Burns' affidavit consists primarily of statements allegedly made by Joseph Buchanan, the president of Petroco, to Mr. Burns or to representatives of Sonatrach in Mr. Burns' presence. Mr. Buchanan allegedly stated that the difficulty Sonatrach was having in selling its oil resulted from a boycott of Algerian crude. Fed.R.Civ.P. 56(e) requires that affidavits in support of or opposition to a summary judgment motion set forth facts that would be admissible in evidence. It is well established that hearsay evidence in such affidavits is entitled to no weight. 6 Moore's Federal Practice ¶ 56.22 (2d ed. 1979); Munoz v. International Alliance of Theatrical Stage Employees, Etc., 563 F.2d 205, 213 (5th Cir. 1977); Broadway v. City of Montgomery, Alabama, 530 F.2d 657 (5th Cir. 1976). The statements which Burns attributes to Buchanan constitute hearsay under Fed.R.Evid. 801 and are inadmissible under Rules 802-804 to prove the truth of the matters asserted.
One portion of Mr. Burns' affidavit consists of his characterizations of the beliefs of Mr. Buchanan that there was a French-sponsored boycott. The various characterizations are either matters of which Burns is legally incompetent to testify under Fed.R.Evid. 602, or if relayed to him and offered in order to prove the truth of their contents, constitute inadmissible hearsay.
Mr. Fain was employed by Pan-Islamic to search newspaper files and various hearing reports concerning possible antitrust activities of the major oil companies. His affidavit merely states that the attachments to his affidavit are true and correct copies of articles and reference materials. Attached to his affidavit are newspaper articles (some in untranslated French), a lengthy excerpt from a book entitled, The Control of Oil, and a copy of a complaint filed in another antitrust action. All of this material is hearsay and is inadmissible to prove the truth of the existence of a boycott. Some of the newspaper reports indicate that French oil companies had threatened to sue companies purchasing the portion of the Algerian oil to which the French laid claim. While these newspaper reports are arguably admissible as public announcements enabling co-conspirators to coordinate their activity and while some oil company
Several oil company officials in depositions testified that they were aware of a dispute between France and Algeria concerning title and right to some of the Algerian crude oil and a threat by French oil companies to sue purchasers of the Algerian oil which they claimed.
Out of more than 3,500 pages of deposition, not to mention numerous affidavits and exhibits, the most significant evidence to which Pan-Islamic can point in support of its allegation of a conspiracy is a statement Icsel attributes to Mr. Roland Routhier, a Texaco official in charge of the Supply and Distribution Department. Icsel, in his deposition, testified that during a meeting with Routhier at which Pan-Islamic offered its oil, Routhier stated, "If any others did buy a drop of oil from you, come over and we will buy the rest." The meeting at which this statement occurred lasted only thirty minutes. Icsel testified that he did not ask Routhier what he meant by this statement and that Routhier in no way amplified upon his remark. Icsel testified that the conversation with Routhier dealt only with generalities and there is no indication that Routhier's statement was anything more than a casual remark. Nor does Icsel's deposition indicate that Routhier's statement could be construed as a genuine offer to buy at Pan-Islamic's price should other companies purchase any of its oil.
Icsel's testimony concerning Routhier's statement is admissible as an admission by a party opponent. Fed.R.Evid. 801(d)(2). Accordingly, we must determine what inferences may be drawn from this statement. In evaluating Icsel's testimony, we are required to indulge in every reasonable inference in favor of Pan-Islamic. The court, however, need only make reasonable inferences. In this court's modification of the opinion in American Telephone and Telegraph Co., we stated:
590 F.2d at 102. (emphasis added).
We believe that the ambiguity of Routhier's statement, together with the paucity of
Having found the bulk of Pan-Islamic's evidence supporting a French-supported boycott inadmissible, and having found no evidence establishing a motive to join a boycott of Algerian oil, Pan-Islamic in effect asks us to infer a conspiracy on the basis of Routhier's single statement, uncorroborated by other evidence. The statement is ambiguous, perhaps reflecting a willingness by Routhier to reconsider the competitiveness of Pan-Islamic's asking price should another company buy its oil. While it is undisputed that circumstantial evidence can establish the existence of a conspiracy in antitrust litigation, Interstate Circuit, Inc. v. United States, 306 U.S. 208, 59 S.Ct. 467, 83 L.Ed. 610 (1939), we have found no case where an inference of conspiracy was permitted based on such a slender reed.
B. Conscious Parallelism
Pan-Islamic alleges that it made an offer which was economically attractive to each of the defendant oil companies, but that each of the defendants rejected this offer. Such parallel conduct, Pan-Islamic argues,
We note that two elements must be established by a plaintiff relying on a theory of conscious parallelism: (1) that the defendants engaged in consciously parallel action, (2) which was contrary to their economic self-interest so as not to amount to a good faith business judgment. Theatre Enterprises, Inc. v. Paramount Film Distributing Corp., supra; Aviation Specialities, Inc. v. United Technologies Corp., 568 F.2d at 1192. We find that Pan-Islamic has failed to establish a factual issue that eleven of the defendants engaged in consciously parallel conduct. With respect to the remaining four defendants, we find that Pan-Islamic has failed to establish a factual issue that their refusal to purchase was contrary to their economic self-interest.
(i) Parallel conduct.
Eleven of the defendants
Pan-Islamic never contacted any of these eleven defendants in writing, nor did it keep a formal list of companies contacted. It is clear that there is no competent, admissible evidence that eight
Pan-Islamic relies heavily on a memorandum prepared by Ragan to establish that all of the aforementioned eleven defendants were in fact contacted. The memorandum lists each of the sixteen defendant oil companies and identifies these defendants as firms to whom the availability of Pan-Islamic's crude allegedly had been made known. Beside each firm is a description of each oil company's initial reaction, generally optimistic, to Pan-Islamic's alleged offer. In his deposition, Ragan testified that he had personally contacted only Exxon and that the memorandum was prepared from information given him by George Foulkes, a principal in Pan-Islamic,
Pan-Islamic argues that the Ragan memorandum is admissible as a record of regularly conducted activity under Fed.R.Evid. 803(6).
With respect to three defendants, Tenneco, Getty and Amerada Hess, there was contact with an employee of each of these companies, but the contact was insufficient to establish that their not buying Pan-Islamic's oil constituted parallel conduct, because there is insufficient evidence that a responsible official received an offer.
Mr. Romano, an investor in Pan-Islamic who was not engaged in the attempts to sell the oil, testified in his deposition that during the time in question, the president of Tenneco was his neighbor—a coincidence which understandably caused some concern to Tenneco's counsel. In a conversation with the president of Tenneco, literally held in a back yard, Romano mentioned Pan-Islamic's oil to Tenneco's president. Romano testified he did not have enough information to talk knowledgeably about the oil and he did not "push it." Nothing in his deposition indicates that he told Tenneco's president Pan-Islamic's asking price or said anything which could be construed as an offer. While the president of Tenneco is clearly a responsible company official, the fact remains that without evidence of an offer being made, Pan-Islamic has failed to prove Tenneco ever rejected its oil or acted in a manner parallel to those defendants which did receive an offer.
With respect to Getty, the only evidence of a contact is Musslewhite's deposition testimony that in a casual conversation with a friend who at the time was in-house attorney with Getty specializing in labor law, Musslewhite informed him of Pan-Islamic's oil. Musslewhite's deposition fails to indicate whether he made an offer to the attorney or what information was conveyed. Significantly, Musslewhite did not remember
With respect to Amerada Hess, Clark and Goodwin (vice president and secretary-treasurer, respectively, of Pan-Islamic) stated in their depositions that they had contacted a company official at Amerada Hess's terminal at the Houston ship channel. They could not recollect the name of the official nor did they testify concerning his position. Clark did not describe the meeting, and Goodwin could not remember anything that was said at the meeting, indicating only in the most general of terms that it was part of his effort to sell the oil. Goodwin could not recall whether a price was quoted and could not remember whether the individual contacted expressed an interest or not. Goodwin testified that he thought Ragan was contacting another official with Amerada Hess.
Musslewhite's, Clark's and Goodwin's depositions fail to establish that either Getty or Amerada Hess engaged in the alleged parallel conduct of refusing to purchase oil from Pan-Islamic because there is no factual basis to conclude that an official with the necessary authority was aware of, and rejected, an offer by Pan-Islamic. It is hornbook law that before an employee may bind a corporation, that employee must have actual, implied, or apparent authority. While there is no question in this case of binding these corporate defendants to a legal obligation, it is appropriate to require that, before the acts of their employees in rejecting Pan-Islamic's offer subject them to the possibility of antitrust treble damages, those acts be authorized by the corporation. This is particularly so with corporate defendants of this large size. Despite Getty's and Amerada Hess's sworn denial that appropriate officials in charge of purchasing were approached by Pan-Islamic, Pan-Islamic has failed to produce any evidence to the contrary. Accordingly, there is no factual issue as to whether Getty and Amerada Hess acted in a parallel fashion with those defendants clearly contacted.
(ii) Economic interests of oil companies contacted.
Exxon, Shell, Texaco and Sun each admit receiving an offer from Pan-Islamic sometime in June or early July, which was refused, allegedly because of Pan-Islamic's non-competitive price. As this is clearly parallel conduct, our inquiry turns to whether the refusal to purchase was contrary to these defendants' economic self-interest so as not to amount to a good faith business judgment.
Pan-Islamic and the oil companies agree that in the brokerage of crude oil, there is no set market-wide price. Price fluctuates rapidly, being affected by factors as diverse as the needs of various oil companies for certain types of oil, refining capacities and characteristics of companies and climatic weather patterns. It is agreed that each transaction involving the sale and purchase of crude oil is unique and stands on its own feet.
Each of the contacted defendants placed in the record affidavits of appropriate officials with purchasing responsibilities swearing that the decision not to purchase Pan-Islamic's oil was made unilaterally and was based upon the noncompetitiveness of Pan-Islamic's asking price. These companies indicated that they determined current market price largely on the basis of offers which their purchasing departments received
For the years 1970 and 1971, Exxon produced a high percentage of its crude oil needs, but nevertheless was required to purchase some crude oil. There is no indication as to the amount or grade of oil it purchased during this period. It obtained some of its oil needs from Libya and Indonesia, but the record is silent on other locales from which it was purchasing. Exxon was contacted on June 22 and July 1 by Mr. Ragan, who offered Exxon Pan-Islamic's oil at $3.15 per barrel f. o. b. Algeria. At the July 1 meeting, Ragan states he was told by Exxon officials that they had their own channels for obtaining oil. This is consistent with the affidavits and depositions of Mr. Doyle and Mr. Ellis of Exxon. They indicate that at the time Pan-Islamic made its initial offer to Exxon, Exxon had been engaged for over a month in direct negotiations with Sonatrach, initially discussing approximately 500 million barrels of oil at approximately $2.80 per barrel f. o. b. Algeria. These negotiations eventually resulted in a contract being consummated in October, 1971, between Exxon and Sonatrach for approximately 250 million barrels over a five-year period at $2.75 per barrel f. o. b. Algeria.
Texaco's needs for crude oil purchases during 1971 are not established by the record, although Texaco placed in the record the terms of all the contracts it or its subsidiaries had concerning Algerian oil during 1970 and 1971. In late spring or early summer of 1971, Pan-Islamic offered Texaco its Algerian crude at $3.05 per barrel f. o. b. Algeria. The record establishes that this price was well in excess of what Texaco's subsidiaries were paying for comparable grades of crude oil and well in excess of offers available to Texaco from others during that time. From October, 1970, through March, 1971, a Texaco subsidiary was purchasing from an Italian company 10,000 barrels per day of Algerian crude oil at $1.90 per barrel f. o. b. Algeria. In April, 1971, this transaction was renegotiated so that the Texaco subsidiary purchased refined products from the Italian company instead of crude. For the purposes of this renegotiation, the crude oil used by the Italian company was valued at $2.62 per barrel f. o. b. Algeria. On October 1, this contract was again renegotiated whereby the Texaco subsidiary resumed purchasing Algerian crude from the Italian company at a price of $2.62 per barrel f. o. b. Algeria.
On May 26, Musslewhite and Clark visited J. K. Moore, an official with Shell with responsibility for purchasing crude oil. Pan-Islamic offered Shell its oil at $3.15 per barrel f. o. b. Algeria, indicating the price might be negotiable down to $3.05 per barrel. Moore, by affidavit, indicates that when transportation costs from Algeria plus import taxes prevailing at that time were added to Pan-Islamic's price, Shell would be paying a minimum delivered price of over $4.00 per barrel for the Algerian crude at each of its refineries.
Sun was contacted by telephone two times in May by Pan-Islamic representatives. In the second call, Pan-Islamic initially quoted a price at $3.15 and then told Sun the minimum price it would accept was $3.12 per barrel f. o. b. Algeria. Sun was told that Pan-Islamic had rejected an offer of $3.00. Sun was beginning to search for a long-term stable supply of low—sulphur foreign crude. Samples of crude oil from three locales had been obtained in order that their refinery characteristics could be determined. An affidavit by a Sun official stated that Sun had a long-standing policy to deal directly with national companies when negotiating a long-term arrangement. The affidavit indicates that Sun unilaterally rejected Pan-Islamic's offer because Pan-Islamic had furnished no samples of its crude and its offer was substantially above the market price at that time. Sometime after Pan-Islamic contacted Sun, Sun was able to purchase a much smaller amount
Pan-Islamic has only weak rejoinders to these claims of sound economic reasons for refusing its offer.
Pan-Islamic argues that it informed these companies that should a large oil company agree to purchase its oil, it could renegotiate its contract with Sonatrach to more favorable terms, to the advantage of all concerned. Pan-Islamic alleges that in July or August it was able, despite not having a firm offer, to renegotiate the price with Sonatrach down to $2.84 per barrel f. o. b. Algeria. Even if Pan-Islamic made known to the oil companies the possibility of renegotiating the Sonatrach contract, the oil companies' refusal to contract with Pan-Islamic on such a tentative condition hardly bespeaks the action against economic self-interest to establish a theory of conscious parallelism. Moreover, there is no evidence that Pan-Islamic ever contacted the defendant oil companies to re-offer its oil after the alleged renegotiation of price.
In attempting to show that the defendants' actions were against their economic self-interest, Pan-Islamic places its greatest reliance upon the affidavit of Prof. Helmut Frank, a professor of economics with expertise in the petroleum industry and on oil prices. Frank prefaces his remarks by indicating that oil companies have widely divergent needs with respect to crude oil because of the variety of finished oil products, inventories of crude on hand, location and types of refineries, and other factors. In evaluating Pan-Islamic's contract, Frank looked not at the particular companies' characteristics and needs, but only at general market conditions with respect to price. The most comfort Pan-Islamic may derive from Frank's affidavit is his conclusion that the price at which Pan-Islamic agreed to purchase from Sonatrach was "well within the range at which free arm's length sales of Algerian crude took place during the spring and early summer of 1971." Frank indicates that the range of Algerian crude
Frank also evaluated Pan-Islamic's contract as a long-term contract in light of the option agreement for five years. He concluded that when account is taken of all existing facts as of the relevant date in 1971, including conditions that could have been anticipated as likely to occur over the option period, conditions he believed in all probability were known to the oil companies in 1971, Pan-Islamic's contract was desirable from an economic point of view. We conclude that this portion of Frank's affidavit is irrelevant. It is premised upon an assumption that Pan-Islamic offered the oil companies the benefit of the escalation clause. The record, however, does not bear out Pan-Islamic's argument, made for the first time on appeal, that Pan-Islamic offered the defendant oil companies a multi-year contract. Pan-Islamic's complaint made no allegation concerning a multi-year offer made to the oil companies. In the description given by the oil company executives of the offer received, no mention is made of the benefits of the escalation clause.
Pan-Islamic states that the fact that the contract with the option agreement was left with the oil company officials creates a factual issue as to whether the escalation benefits were offered.
Moreover, we note that Prof. Frank's affidavit was the last document filed by Pan-Islamic in opposition to the defendants' motion for summary judgment. In its arguments to the district court, Pan-Islamic failed to indicate that it believed a factual issue existed as to whether the escalation clause benefits were included in the offer to the companies. This court has held that when a party moving for summary judgment assumes there is no factual controversy with respect to an issue, the opposing party's silence will preclude a belated argument on appeal based on some factual issue implicit in the underlying documents but not asserted before the trial court. Franz Chemical Corp. v. Philadelphia Quartz Co., 594 F.2d 146 (5th Cir. 1979). The rule is appropriate in this case.
After a thorough review of the record in this case, we conclude that the district court
Commonwealth was dismissed as a party to this suit for lack of jurisdiction of the person.
Billy Baxter, Inc. v. Coca-Cola Co., 431 F.2d 183 (2d Cir. 1970), cert. denied, 401 U.S. 923, 91 S.Ct. 877, 27 L.Ed.2d 826 (1971) (franchisor has no standing to sue alleging antitrust violations reducing sales of franchisee and thereby reducing profits of franchisor); Reibert v. Atlantic Richfield Co., 471 F.2d 727 (10th Cir.), cert. denied, 411 U.S. 938, 93 S.Ct. 1900, 36 L.Ed.2d 399 (1973) (employee has no standing to allege illegal merger resulting in loss of job); Jeffrey v. Southwestern Bell, supra, (telephone subscribers have no standing to complain of alleged attempt to monopolize telephone equipment market by phone company by below cost pricing, resulting in higher phone rates to subsidize loss); Southern Concrete Co. v. United States Steel Corp., 535 F.2d 313 (5th Cir. 1976), cert. denied, 429 U.S. 1096, 97 S.Ct. 1113, 51 L.Ed.2d 543 (1977) (manufacturer of ready-mix concrete has no standing to complain of alleged tying arrangement between seller of cement and a competitor in ready-mix concrete); Donovan Construction Co. of Minnesota v. Florida Telephone Corp., 564 F.2d 1191 (5th Cir. 1977), cert. denied, 435 U.S. 1007, 98 S.Ct. 1878, 56 L.Ed.2d 389 (1978) (electrical construction contractor has no standing to allege antitrust violation when defendant in phone interconnect business terminated contract when plaintiff entered interconnect business in another area); In re Beef Industry Antitrust Litigation, 600 F.2d 1148 (5th Cir. 1979), other claims addressed, 607 F.2d 167 (5th Cir. 1979), cert. denied, ___ U.S. ___, 101 S.Ct. 280, 65 L.Ed.2d ___ (1980) (cattle farmers and ranchers have no standing to allege retail price fixing by grocers, resulting in reduced consumer demand for beef).
Cases where standing has been expressly found include:
Dailey v. Quality School Plan, Inc., 380 F.2d 484 (5th Cir. 1967) (employee whose position was terminated has standing to allege termination due to illegal acquisition of employer by defendant), cf. Reibert v. Atlantic Richfield Co., supra; Tugboat, Inc. v. Mobile Towing Co., 534 F.2d 1172 (5th Cir. 1976) (union and tugboat employees have standing to allege that tugboat company and competitor union conspiring to provide cheaper labor); Midland Telecasting Co. v. Midessa Television Co., 617 F.2d 1141 (5th Cir. 1980) (UHF station has standing to sue cable television and its co-owners alleging conspiracy to refuse to carry UHF's station's signal on cable).
In a post-hearing letter-brief to this panel, Pan-Islamic concedes that no formal motion to compel answers was ever filed, and explains the mistaken reference to such motions to compel as resulting from a change of attorneys.
(emphasis in original).
368 U.S. at 473, 82 S.Ct. at 491.
Cases from other circuits include: Natrona Service, Inc. v. Continental Oil Co., 598 F.2d 1294 (10th Cir. 1979); Harvey v. Fearless Farris Wholesale, Inc., 589 F.2d 451 (9th Cir. 1979); Lamb's Patio Theatre v. Universal Film Exchanges, Inc., 582 F.2d 1068 (7th Cir. 1978).
See also Rogers, Summary Judgment in Antitrust Conspiracy Litigation, 10 Loyola U. of Chicago L.J. 667 (1979).
Norfolk Monument Co., Inc. v. Woodlawn Memorial Gardens, Inc., 394 U.S. 700, 89 S.Ct. 1391, 22 L.Ed.2d 658 (1969) (In complaint that defendant cemeteries and burial monument manufacturer conspired to deprive plaintiff monument manufacturers of market in defendant cemeteries, evidence included facts that pamphlets circulated by one defendant among other defendants suggested competitive barriers to plaintiff retailers of burial monuments, that defendant cemeteries required burial monuments of specified alloy manufactured by co-defendant, that plaintiffs had presented evidence attacking the reasonableness of the requirement of a specified alloy, that defendant cemeteries attempted to dissuade purchasers from buying plaintiffs' monuments, and defendants' refusal to let plaintiffs install monuments plaintiffs sold); cf. Moore v. Jas. H. Matthews & Co., 473 F.2d 328 (9th Cir. 1973) (similar facts and similar result.)
Poller v. Columbia Broadcasting System, supra (In allegation that defendant network conspired to drive plaintiff UHF station out of business, evidence included facts that in a short space of time, national network moved affiliation to competing UHF station purchased by individual at instigation of network, drove plaintiff UHF station which had been profitable out of business, and later abandoned second UHF station for VHF station, as well as a steady decline nationwide in UHF stations.)
Morrison v. Nissan Motor Co., Ltd., 601 F.2d 139 (4th Cir. 1979) (In allegation that automobile manufacturer and franchise dealers conspired to fix repair rates, evidence included facts that manual was distributed by manufacturer among franchisee retailers/repairers suggesting rates for repair, that franchisees had frequently corresponded with manufacturer/promulgator of manual concerning repair times and rates in manual, and statement by a service agent that manual rates were mandatory.)
DeVoto v. Pacific Fidelity Life Ins. Co., 516 F.2d 1 (9th Cir. 1975) (In allegation that mortgage company and seller of mortgage protection insurance conspired to deprive plaintiff seller of mortgage protection insurance of names of mortgagors, evidence included fact that plaintiff offered defendant mortgage company better package for names of mortgagors and that defendant companies were affiliated.)
We note that Pan-Islamic has failed to present facts as convincing in these cases indicating a conspiracy among the defendant oil companies. Pan-Islamic does not refer to, and we have not found, a case where an inference of a conspiracy was held to be reasonable solely on the basis of a statement as ambiguous as Routhier's.
Ragan stated he wrote this on the basis of Foulkes' having contacted someone at Exxon who expressed some interest in Pan-Islamic's oil and requesting Pan-Islamic to follow up. It was not until June 22 that Ragan followed up on this lead and made Pan-Islamic's first firm offer at $3.15 per barrel f. o. b. Algeria.