Opposition — Umphres v. Shell Oil Co.

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In THE

Supreme Court of the AK, JR., CLERK

OCTOBER TERM, 1975

No. 75-349

L. W. UMPHREs,

Vv.

SHELL Or COMPANY,

Respondent.

Petitioner,

On Petition for a Writ of Certiorari to the United States

Court of Appeals for the Fifth Circuit

BRIEF FOR RESPONDENT IN OPPOSITION

WILLIAM SIMON

JOHN S. KINGDON

1730 Pennsylvania Avenue, N.W.

Washington, D. C. 20006

Of Counsel: ‘202) 872-8800

Howrey & SIMON Counsel for Respondent

Washington, D. C. Shell Oil Company

WILLIAM G. WINTERS, JR.

One Shell Plaza

Houston, Texas 77002

(713) 220-5891

October 1, 1975

WILSON - Epss Printing Co.. INC. - RE 7-6002 - WASHINGTON. D. C. 20001

IN THE

Supreme Court of the United States

OCTOBER TERM, 1975

No. 75-349

L. W. UMPHRES,

Petitioner,

Vv.

SHELL O1L COMPANY,

Respondent.

On Petition for a Writ of Certiorari to the United States

Court of Appeals for the Fifth Circuit

BRIEF FOR RESPONDENT IN OPPOSITION

OPINION BELOW

The per curiam opinion of the Court of Appeals for

the Fifth Circuit is reported at 512 F.2d 420 ( 5th Cir.

1975). The order denying petitioner’s motion for re-

hearing en banc is noted at 515 F.2d 1184 (5th Cir.

1975).

QUESTION PRESENTED

Whether the entry of directed verdicts by the trial

court on the basis of a lack of evidentiary support for

2

petitioner’s various claims and the per curiam affirmance

of those directed verdicts by the Court of Appeals pre-

sents any substantial legal issue for resolution by this

Court on writ of certiorari.

STATEMENT OF THE CASE

Petitioner’s private antitrust action included allega-

tions of violations of the Sherman Act (15 U.S.C. §1);

the Clayton Act (15 U.S.C. § 3); and the Robinson-Pat-

man Act (15 U.S.C. §13(a)) arising from his business

as a retail service station dealer in Houston, Texas leas-

ing stations and purchasing products from respondent

Shell Oil Company (“Shell”). The trial was preceded by

more than two years of pretrial discovery. In five days

of trial petitioner attempted to prove (1) that respond-

ent tied the leasing of its service stations to the purchase

of its gasoline; (2) that respondent tied the leasing of its

service stations to the purchase of its tires, batteries and

accessories; (3) that respondent tied the leasing of its

service stations to the purchase of trading stamps and

the use of its promotional games; (4) that respondent

fixed the price of gasoline at the wholesale level by a

horizontal conspiracy with other suppliers; (5) that re-

spondent fixed the price of gasoline at the retail level by

coercing petitioner to follow respondent’s price sugges-

tions; (6) that respondent engaged in price discrimina-

tion in the sale of its automotive accessories; and (7)

that respondent terminated petitioner’s leases on four

— service stations in violation of federal antitrust

aws.

The evidence adduced during petitioner’s case, by both

direct and cross-examination, showed that respondent

had not violated any antitrust law. There were no leases,

agreements or contracts which contained any exclusionary

provisions regarding gasoline, automotive accessories,

stamps or promotional games (Tr. 312; 800; Pif. Ex. 2,

3, 4, 5; Def. Ex. 33).' Petitioner’s own testimony, and

the testimony of his own witnesses, demonstrated both

the absence of coercion and that dealers had complete

freedom to purchase or not to purchase Shell products

and promotions (Tr. 123; 368; 549; 720; 834-835; 846;

Def. Ex. 4). The evidence presented by petitioner on

price discrimination failed to show either that respondent

had engaged in any discriminatory sales to two pur-

chasers in the same line of business, or that any such

discrimination could have caused injury to petitioner

(Tr. 76; 856-858).

Petitioner’s evidence relating to horizontal and vertical

price fixing was equally deficient. The only testimony

-oncerning horizontal price fixing at the wholesale level

between Shell and unidentified major oil companies re-

lated to fluctuations in the retail price of gasoline at but

five of the approximately 2800 service stations in the

Houston area (Tr. 759). Although answers by various

major oil companies to petitioner’s depositions upon

written interrogatories showed wholesale gasoline prices

in the Houston area for the relevant time period, and

those sworn answers were on file in the Clerk’s office,

petitioner failed to offer the available wholesale price

data into evidence. As recognized by the Fifth Circuit:

Appellant failed to produce evidence establishing the

existence of an intercompany price-fixing agreement,

arrangement, or conspiracy at the retail level, or at

the wholesale level that might have been reflected in

the alleged fluctuations of retail prices (512 F.2d at

422).

The petition misstates the record in material respects

in its “Statement of Case” (Pet. 5-6). Without a single

1 Respondent has included citations to the record to support

factual statements. In contrast, the petition is devoid of record

references and contains a wholly unsupportable characterization

of the case (Pet. 5-6). The correct factual statements appear in

the record and in the opinion of the Fifth Circuit Court of Appeals.

4

reference to the record, for indeed there is none, the

petition implies that the claims of “coercive tactics” and

“threats” were substantiated in the record. The Court

of Appeals found no evidence of coercive pressures, citing

instead petitioner’s own sworn testimony that:

It was my decision to change the prices [of gaso-

line] at all times at any of my stations (Tr. 426;

512 F.2d at 422).

Petitioner’s testimony contradicted the claims in his com-

plaint, and the trial court and the appellate court con-

cluded that there were insufficient facts upon which to

base any finding of antitrust liability. The Fifth Circuit

affirmed the District Court’s rulings on liability in all

respects, summarizing the record by concluding:

The record in this case reflects the respective roles

of an oil company and its dealer in a competitive

market where the oil company must distribute its

products within the structures of the antitrust laws.

Plaintiff failed in his effort to prove any one of the

alleged violations of those laws with evidence suffi-

cient to warrant submission to the jury (512 F.2d

at 423).

ARGUMENT

The Per Curiam Decision Of The Court Of Appeal

Was Correct And Presents No Important Federal

Question Or Conflict Of Decisions

Despite petitioner’s attempt to couch his petition in

terms of conflicting decisions and constitutional ques-

tions, this matter involves only the factual record as

presented at trial and reviewed on appeal. As such, it

clearly does not merit the exercise of this Court’s dis-

cretionary jurisdiction and review.

The Fifth Circuit Court of Appeals expressly pointed

out that their consideration of respondent’s directed ver-

<— nt

——# *

5

dict motions was in accordance with the admittedly cor-

rect legal standard:

“Our standard for reviewing directed verdicts was

explicated in Boeing Co. v. Shipman, 5 Cir., (en

banc), 1969, 411 F.2d 365:

On motions for directed verdict . . . the Court

shall consider all of the evidence—not just that

evidence which supports the non-mover’s case—

but in the light and with all reasonable infer-

ences most favorable to the party opposed to

the motion. If the facts and inferences point

so strongly and overwhelmingly in favor of one

party that the Court believes that reasonable

men could not arrive at a contrary verdict,

granting of the motions is proper. On the other

hand, if there is substantial evidence opposed

to the motions, that is, evidence of such quality

and weight that reasonable and fair-minded men

in the exercise of impartial judgment might

reach different conclusions, the motions should

be denied, and the case submitted to the jury.

411 F.2d at 374.

See also Panotex Pipe Line Co. v. Phillips Petrolewm

Co., 5 Cir., 1972, 457 F.2d 1279, affirming a di-

rected verdict in an antitrust case.

(1) Reviewing the record on appeal with the

Boeing principles in mind, we conclude that the

District Court did not err in granting Shell a di-

rected verdict” (512 F.2d at 422).

The sole question raised by this petition is whether

the Fifth Circuit Court of Appeals, in reviewing the

factual record, correctly concluded that the record facts

and permissible inferences therefrom pointed so strongly

and overwhelmingly in favor of respondent that reason-

able men could not have arrived at a contrary verdict

(512 F.2d at 422). Petitioner asks this Court to en-

gage in yet another factual review of the District Court’s

6

directed verdict decisions. There is no substantial fed-

eral question for this Court’s consideration.

The petition errs in asserting that the appellate court

weighed the credibility of the evidence and failed to give

petitioner all favorable inferences (Pet. 9).* Nowhere

in the panel’s decision does the court choose to disbelieve

petitioner’s witnesses or refuse to draw reasonable in-

ferences in favor of petitioner. The court assumed the

truth of petitioner’s evidence, allowing for such reason-

able inferences as were warranted by the evidence, and

simply concluded that petitioner’s case was “clearly in-

substantial” (512 F.2d at 422).

The Court of Appeals’ determination was consistent

with Brady v. Southern Railroad Co., 320 U.S. 476, 479-

480 (1943) which is relied on by petitioner. In Brady

this Court expressly sanctioned the entry of directed ver-

dicts in a case such as this, declaring:

When the evidence is such that without weighing

the credibility of the witnesses there can be but

one reasonable conclusion as to the verdict, the court

should determine the proceeding by . . . directed

verdict . . . without submission to the jury....

By such direction of the trial the result is saved

from the mischance of speculation over legally un-

founded claims.

This case involves only questions of the sufficiency of

evidence that are unique to this proceeding. The factual

2 Petitioner suggests that it was improper for the appellate court

to refuse to infer a horizontal price fixing conspiracy at the whole-

sale level where petitioner’s only evidence consisted of price fluc-

tuations “obtained from a limited source-only five out of over 2,800

[retail] service stations in the Houston area” (Pet. 3). However,

Boeing Co. v. Shipman and decisions from other circuit courts on

the proper standard for review of directed verdicts are in accord

in holding that only reasonable inferences must be drawn in favor

of the non-moving party. To infer a price fixing conspiracy from

this record, as petitioner suggests, would invite a speculative jury

verdict on unsubstantiated claims.

7

record was fully considered and properly ruled upon by

both the District Court and the Court of Appeals in ac-

cordance with established legal rules. Under these cir-

cumstances this Court’s admonition in United States v.

Johnson, 268 U.S. 220, 227 (1925), that it “do[es] not

grant certiorari to review evidence and discuss specific

facts” should be the controlling factor in ruling upon

this petition.*

The District Court granted respondent’s motions for

directed verdicts on all issues of liability and damages.

The contested issues relating to the District Court’s dam-

age rulings were separately briefed and argued by the

parties on appeal. The Fifth Circuit Court of Appeals,

having concluded that there was no liability established

on any of petitioner’s antitrust claims, expressly declined

to consider the damage issues (512 F.2d at 423). If this

petition is granted, and this Court after reviewing the

factual record concerning liability remands the case for

further proceedings, the remand would necessarily be to

the Fifth Circuit Court of Appeals—not to the District

Court—for review of the correctness of the District

Court’s directed verdicts on damages. Powell v. Me-

Cormack, 395 U.S. 486, 500 n.16 (1969); Utah Pie Co.

v. Continental Baking, 386 U.S. 685, 704 (1967).

CONCLUSION

The practice of this Court has been to grant writs of

certiorari only in cases involving either principles of

fundamental importance to the general public or a direct

conflict in circuit court opinions. Respondent respectfully

3 In Brady, supra, this Court also noted the limited purpose

served by its review of factual matters:

An examination of the proven facts to determine whether

they are sufficient to permit a verdict by the jury ... is of no

doctrinal importance. Every case varies (320 U.S. at 480).

8

submits that the instant petition presents no important

question of federal law and no conflict of decisions calling

for settlement by this Court. The per curiam decision of

the Court of Appeals for the Fifth Circuit measured the

factual record at trial against the appropriate legal

standard for directing verdicts. As such it does not merit

review by this Court. The petition for writ of certiorari

should be denied.

Respectfully submitted,

WILLIAM SIMON

JOHN S. KINGDON

1730 Pennsylvania Avenue, N.W.

Washington, D. C. 20006

(202) 872-8800

Counsel for Respondent

Shell Oil Company

Of Counsel:

Howrey & SIMON

Washington, D. C.

WILLIAM G. WINTERS, JR.

One Shell Plaza

Houston, Texas 77002

(713) 229-5891

October 1, 1975