Unpublished Disposition, 924 F.2d 1063 (9th Cir. 1990)

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US Court of Appeals for the Ninth Circuit - 924 F.2d 1063 (9th Cir. 1990)

RAY FLADEBOE LINCOLN-MERCURY, INC., Plaintiff-Appellant,v.JAGUAR CARS, INC., Bauer Motors, Inc., Southland MotorsCorporation, Terry York Motor Cars, Ltd., Charles H.Hornburg, Jr. Imported Motors Cars, Lee West Enterprises,Inc., dba Newport Imports, Inc., Rusnak Volkswagen, Inc.,Whittlesey Motors, Inc., and Dave Whittlesey, Defendants-Appellees.

No. 89-55704.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Dec. 5, 1990.Decided Jan. 28, 1991.

Before JAMES R. BROWNING, PREGERSON and LEAVY, Circuit Judges.


Ray Fladeboe Lincoln-Mercury, Inc., dba Ray Fladeboe British Motor Cars ("Fladeboe"), an Irvine, California auto dealership, appeals from the district court's entry of summary judgment in favor of the defendants on Fladeboe's antitrust action. Fladeboe argues, inter alia, that the district court abused its discretion by effectively precluding Fladeboe from proceeding with discovery on its claim that Jaguar Cars, Inc. ("Jaguar"), the parent company responsible for the wholesale distribution of Jaguar automobiles and automotive parts to franchised dealerships in the United States, had misallocated cars to Fladeboe's area competitors as part of a conspiracy to force Fladeboe out of the market. We conclude that the district court abused its discretion by imposing unreasonable conditions on Fladeboe's need to conduct discovery on the misallocation issue, and reverse and remand.


Those facts which are not in dispute may be summarized as follows: Jaguar began restructuring its wholesale operations in 1981 and decided the following year to begin reorganizing its retail operations as well. As a result, Jaguar decided not to renew ten of its seventeen Los Angeles area franchises and to increase the number of cars allotted to the seven surviving dealerships. As part of this restructuring plan, and in the hope of avoiding litigation, Jaguar's United Kingdom parent approved the allocation of some $10 million to be used, inter alia, as settlement payments to the ten dealerships slated for termination.

In May 1984 Jaguar held a special meeting of its National Dealer Advisory Council ("Council") and informed the Council members of the restructuring plan. The following month Fladeboe, along with thirty-four other Jaguar dealerships throughout the country, including nine others in the Los Angeles area, was notified of the proposed nonrenewal of its franchise and offered a settlement. Fladeboe rejected the offer and, in October 1984, filed a formal protest with the California New Motor Vehicles Board, the effect of which was to stay Jaguar's termination of Fladeboe's franchise. As of this date the stay is apparently still in effect, and Fladeboe continues to receive and sell a small number of Jaguar automobiles.

Due to higher than anticipated costs in settling the claims of the nonrenewed dealerships in the Los Angeles area, Jaguar met in September 1985 with representatives of the seven surviving area dealerships and presented them with a proposal for raising additional funds to cover the settlement payments to the terminated dealerships. A temporary $600 per auto surcharge would be imposed on each car delivered to the seven dealerships, and this amount would continue to be taxed as long as needed to meet those higher costs. The seven dealerships accepted the proposal and signed covenants not to sue Jaguar for possible antitrust claims as the result of the surcharge. The $600 increases began appearing on delivery invoices the following month, and continued for a year. Nearly $2 million was raised in this fashion, all of it going to the above described settlement payments.

On June 12, 1987, Fladeboe filed the instant action against Jaguar, the seven surviving area dealerships, and Dave Whittlesey, Fladeboe's Council representative and owner of one of the seven dealerships, alleging that the nine defendants had violated both federal and state antitrust laws by conspiring to eliminate Fladeboe from the local market. Two months later Fladeboe's action was consolidated with the related case of Burbank Renault Center, Inc. v. Bauer Motors, Inc., Nos. 86-5173-AWT, 86-5894-AWT, and 87-382-AWT (C.D. Cal.), which was in turn a consolidation of separately filed actions brought by three of the local terminated Jaguar dealerships against the same defendants. The defendants, the attorneys, and many of the claims involved were the same in all four consolidated cases. Unlike Fladeboe, however, the three Burbank Renault plaintiffs had previously accepted Jaguar's franchise termination settlement offer.

On October 21, 1987, the district court dismissed Fladeboe's action for failure to exhaust state administrative remedies, and Fladeboe appealed. Meanwhile, discovery proceeded in the Burbank Renault portion of the underlying litigation. On January 26, 1989, we affirmed the dismissal of Jaguar in the Fladeboe appeal, but reversed and remanded with respect to the remaining defendants. On remand, the defendants moved for summary judgment. Fladeboe opposed the motion, arguing that it was entitled to its own discovery, at least on the misallocation claim. While not explicitly denying the request for additional discovery, the district court ruled that, due to the near identity of parties and claims involved in the Burbank Renault action and the instant case, Fladeboe could either stand on the record as developed in the former action and face summary judgment or pursue its own discovery on the misallocation claim with the understanding that, if Fladeboe chose the latter course, it risked having to pay the defendants' fees and costs if unsuccessful on summary judgment. When Fladeboe declined to accept these conditions, the district court entered summary judgment against it and in favor of the defendants. It is from this judgment that Fladeboe appeals.


On May 7, 1990, the Burbank Renault portion of the underlying litigation was argued and submitted to this court. Three months later we affirmed, in an unpublished memorandum disposition, the district court's entry of summary judgment in favor of the defendants in that action. Burbank Renault Center, Inc. v. Bauer Motors, Inc., No. 89-55366 (9th Cir., Aug. 10, 1990). Despite the obvious similarities between that appeal and the instant one, however, we conclude that we are not bound by the outcome of the earlier decision.

Notwithstanding the fact that the attorneys, defendants, and many of the claims were and are the same in the two appeals, no misallocation claim was raised by the Burbank Renault plaintiffs. Those plaintiffs did not conduct any discovery on that issue, and indeed would have had no incentive or reason to conduct any inquiries along those lines, because they had previously accepted the terms and conditions of Jaguar's termination offer and the question of misallocating automobiles from one dealer to another did not constitute an issue in their consolidated actions against the defendants.

We recognize a district court's broad discretion to control proceedings before it, including the need to regulate the scope and extent of discovery in order to prevent abuses. In line therewith, we have upheld a district court's decision to make conditional its grant of a plaintiff's request for a continuance to conduct additional discovery in order to oppose a defendant's motion for summary judgment by requiring the plaintiff to reimburse the defendant for its costs and fees associated with that continuance. MacKay v. American Potash & Chem. Co., 268 F.2d 512, 517 (9th Cir.), reh'g denied, 270 F.2d 646 (1959).

Unlike the situation presented in MacKay, there is no indication here that Fladeboe engaged in dilatory tactics, sought repeated continuances for additional discovery, or otherwise abused the discovery process. As a matter of fact, plaintiff was allowed no discovery at all. Discovery on the misallocation issue would have been justified and should not have been conditioned on Fladeboe's ultimate success in opposing the motion for summary judgment.

Accordingly, we REVERSE the district court's grant of summary judgment in favor of the defendants and REMAND for proceedings consistent herewith.


This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Circuit Rule 36-3