Petition — AMF, Inc. v. General Motors Corp.

Supreme Court, U.

FILED

AUG 16 1979

79-259

IN THE |_MiOHAmL RODAK, JR., CLERK

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1979

No. A-14

In Re:

MULTIDISTRICT VEHICLE AIR POLLUTION

AMF INCORPORATED,

Petitioner

v.

GENERAL Motors CorporRATION, et al.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

Of Counsel:

BERGSON, BORKLAND, HOWARD ADLER, JR.

MARGOLIS & ADLER DONALD L. HARDISON

11 Dupont Circle, N.W. Marc S. PALAY

Washington, D.C. 20036

(202) 462-5930

ROGERS HOGE & HILLS GREGOR F. GREGORICH

90 Park Avenue

New York, New York 90212

(212) 953-9200 Attorneys for Petitioner

August 16, 1979

Washington, D.C. + THIEL PRESS - (202) 638-452!

()

TABLE OF CONTENTS

~~.

re eo th ck tae tebe sce ee eke shee ee 1

ST OLD ea 1

er ea 2

oR ee ee ee ee ee ee eee 3

ETT TE COREE EOC UU eee 4

ES ee ee 4

ele a as 6 ed a Ob 8 eo 8S 4 ye 9

REASONS FOR GRANTING THE WRIT ............. 11

GE 22

APPENDIX:

Opinion of the Court of Appeals (February 14,1979) ....1la

Order Denying Petition for Rehearing and Suggestion

for Rehearing En Banc (April 18, 1979) .......... 16a

TABLE OF AUTHORITIES

Cases:

Ansul Co. v. Uniroyal, Inc., 448 F.2d 872 (2d Cir. 1971),

cert. denied, 404 U.S. 1018 (1972) .......... 12,17, 18

Berkey Photo, Inc. v. Eastman Kodak Co., [1979]

TRADE REG. REP. (CCH) 4 62,718 (2d Cir. 1979) ...... 12

Charlotte Telecasters, Inc. v. Jefferson-Pilot Corp., 546

Pe ee OED 2 od oe 66006 6 60 0's 60 0 8's 12,19

City of El Paso v. Darbyshire Steel Co., 575 F.2d 521

(5th Cir. 1978), cert. denied, 99 S.Ct. 1033 (1979). ..... 19

Continental-Wirt Electronics Corp. v. Lancaster Glass

Corp., 459 F.2d 768 (3d Cir. 1972) .......... sg, 37, 21

Fitzgerald v. General Dairies, Inc., 590 F.2d 874 (10th

EE SS ae ga ee 12,19

Fleer Corp. ». Topps Chewing Gum, Inc., 415 F.Supp.

176 (E.D. Pa. 1975), appeal dismissed without

opinion (3d Cir. 1977), cert. denied, 435 U.S. 970

DUR ees Glas a ee wad wen 0) 0 oe 0 ee 6 16

(it)

Cases, continued: P

Harold Friedman, Inc. v. Thorofare Markets, Inc., 587

FOE RF CH Cie BOTS) «oc sc th ee ete 12, 17, 20; 21

Imperial Point Colonnades Condominium v. Mangurian,

549 F.2d 1029 (5th Cir. 1977), cert. denied, 434 US.

ot nS ee ee ee ee ee ee 12, 14,15

Monona Shores v. United States Steel Corp., 374 F.Supp.

OSG GD. Maem. ESTE) 0. cece eceesesivens 5 eae

Norfolk Monument Co. v. Woodlawn Memorial Gardens,

oa Fi eee rer ee ee ee ee ee 13,19

Poller v. Columbia Broadcasting Systems, Inc., 368 US.

ks a eee ae ee ae eee eae ee 13,19

Poster Exchange, Inc. v. National Screen Service Corp.,

517 F.2d 117 (5th Cir. 1975), cert. denied, 423 US.

8) ae ee ee eee ee 10, 12, 13, 14, 15

United States v. Automobile Mfrs. Ass'n, 307 F.Supp.

617 (C.D. Cal. 1969), aff’d per curiam sub nom.

New York v. United States, 397 U.S. 248 (1970) ...... 10

Zenith Radio Corp. v. Hazeltine Research, Inc., 401 US.

eg re re ar are a is ee rere passim

Statutes:

Sherman Act, Section 1, 15 U.S.C. $1 ......ccccesees 3,4

Clayton Act, Section 4B, 15 U.S.C. §15b............. 3,9

Gayton Act, Section 5, 156 U:B.C. $16... 0. ccc cc ccccs 10

See les Ws as Gial + 6-4-0 000 66 68 c+ O48 eae tee 19

Serene: MUEEED ag 3k Ab soe 8 9 8 wee eee ee 2

ES ee ee eee ee eee ee +

CAL. HEALTH & SAFETY, C.3, § 24,383, §24,386....... 4

OAS RII DAA NOD ARLE

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1979

No. A-14

In Re:

MULTIDISTRICT VEHICLE AIR POLLUTION

AMF INCORPORATED,

Petitioner

Uv.

GENERAL Motors CORPORATION, et al.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

AMF Incorporated (AMF) petitions for a writ of

certiorari to review the judgment and opinion of the

United States Court of Appeals for the Ninth Circuit

entered on February 14, 1979.

OPINION BELOW

The opinion of the court of appeals is reported at 591

F.2d 68. A copy of the opinion below is reprinted in

the Appendix.

JURISDICTION

The court of appeals entered judgment on February 14,

1979. The court denied a petition for rehearing and

]

2

suggestion for rehearing en banc on April 18, 1979. (Pet.

App. 16a.) On July 11, 1979, Mr. Justice Stevens

extended the time to petition for certiorari to and

including August 16, 1979. The jurisdiction of this Court

is invoked under 28 U.S.C. § 1254(1).

QUESTIONS PRESENTED

The court of appeals in this private antitrust case

assumed for purposes of decision that defendant auto-

mobile manufacturers conspired to boycott AMF’s

automotive pollution control device. Summary judgment

dismissing AMF’s complaint was upheld on the sole

ground that plaintiff’s cause of action arose upon defend-

ants’ conspiratorial announcement in August 1964 that

they would develop and exclusively use their own emis-

sion control system and did not intend to purchase

plaintiff’s device. Defendants’ late 1964 announcement

was both prospective and contingent. No purchases were

to be made until the Spring of 1965, and, as of late 1964,

defendants’ emission control system had been neither

developed nor approved by state authorities. The critical

date for consideration of the applicability of the statute

of limitations is January 10, 1965, and the following

questions are presented:

1. Whether the ruling below that plaintiff’s antitrust

cause of action for market exclusion is time-barred

because defendants’ overt acts subsequent to and in

furtherance of their conspiratoriall y-announced intention

to boycott AMF were “but unabated inertial conse-

quences of [their] pre-limitations action” was erroneous

and in conflict with the principles governing application

of the statute of limitations in cases of continuing con-

spiracies enunciated by this Court in Zenith Radio Corp.

ETE

Be ee ne.

ee

>

v. Hazeltine Research, Inc., 401 U.S. 321 (1971), and by

the courts of appeals in other circuits.

2. Whether AMF could have made the requisite non-

speculative showing of the fact and amount of damages

based on defendants’ prospective and contingent an-

nouncement that they would not purchase AMF’s smog

control device if they could successfully develop their

own system and obtain required state approval, where

state law required that all cars sold in the state be

equipped with a certified device like plaintiff’s whether

factory installed or not.

3. Whether this Court’s rule disfavoring the use of

summary judgment in antitrust cases prohibits summary

disposition of disputed issues concerning the application

of the statute of limitations where the jury could have

found either (a) that plaintiff continued its efforts to

enter the market during the limitations period but was

rebuffed by defendants’ continued conspiratorial acts;

or, (b) that market contingencies rendered the fact and

amount of damages resulting from pre-limitations con-

duct speculative and unascertainable prior to the critical

statute of limitations date.

STATUTES INVOLVED

Section 1 of the Sherman Act, 15 U.S.C. § 1, provides

in pertinent part:

Every contract, combination in the form of trust

or otherwise, or conspiracy, in restraint of trade or

commerce among the several states, or with foreign

nations, is declared to be illegal ....

Section 4B of the Clayton Act, 15 U.S.C. § 15b, pro-

vides in pertinent part:

4

Any action to enforce any cause of action under

Sections 15, 15a, or 15c of this title shall be forever

barred unless commenced within four years after the

cause of action accrued ....

STATEMENT

1. The Facts:

This is a private antitrust suit alleging a conspiracy by

defendant automobile manufacturers and their trade

association to boycott AMF’s automotive pollution

control device and to exclude it from the market for such

equipment, in violation of Section 1 of the Sherman Act,

15 U.S.C. § 1.

In 1960, in an effort to deal with the problem of auto-

motive pollution, the California Legislature established

the Motor Vehicle Pollution Control Board (“MVPCB”

or “Board’’) and authorized it to issue “Certificates of

Approval”? for those exhaust pollution control devices

found capable of reducing hydrocarbon (HC) and carbon

monoxide (CO) emissions to designated standards.' The

statute as applied provided that beginning with the first

model year twelve months or more after the MVPCB had

certified two or more devices, every new car registered in

the State of California would have to be equipped with a

certified device.

Recognizing the potential market for exhaust control

devices created by the California statute (and the pros-

pect of similar legislation in other states and nationally),

AMF in 1961 entered into a program for the development

of an after-burner design for controlling HC and CO in

automotive exhaust. Prototypes of the AMF device were

11960 Cal. Stats. Ist Ex. Sess., C.23 and CAL. HEALTH &

SAFETY, C.3, § 24,383, § 24,386.

5

placed in the state testing program in California and sub-

mitted to the MVPCB for certification.

Meanwhile, defendants and co-conspirators— the major

domestic automobile manufacturers and their trade

association (the AMA)—had entered in a “cooperative”

program, features of which involved joint testing of

“outside” technology and execution of a Cross-Licensing

Agreement. The purpose of this program was to delay

the installation of emission controls, which enhance

neither automotive performance nor styling, and to place

the development and marketing of pollution control

devices “on a non-competitive basis” if and when emis-

sion controls became mandatory (R. 4700-01).

Defendants learned in late 1963 that the MVPCB was

“very confident” of approving exhaust control devices

manufactured by AMF and others in sufficient time

to require their use as early as the 1966 model year.

(R. 4924.) Pursuant to their plan to delay the use of

exhaust control devices as long as possible, defendants

in 1964 adopted a resolution that they would comply

with the California exhaust standards “starting with

1967 models” (R. 4942, emphasis added) and publicly

announced their joint decision only to “make use of

developments evolved through the industry coopera-

tive program” (R. 4950-51). That announcement was

designed to chill the interests of third-party device

manufacturers such as AMF (R. 4945; R. 4958). Those

manufacturers, however, continued development efforts,

which culminated in the certification by the State of

California on June 17, 1964 of the AMF Smog Burner

and three other third-party devices. This meant that it

would be unlawful to register a new 1966 passenger

vehicle in California unless it was equipped with one of

these certified devices.

6

Following AMF’s certification, the defendants assured

each other that no one would “break ranks” from the

1967 model year agreement and factory install any of the

recently-certified devices. (R. 5037, and see R. 6091;

R. 5172; R. 6173-74.) Nevertheless, defendants were

confronted with a dilemma. Since they knew AMF

would tool up for a one-year market (R. 5457-58),

defendants had to choose among the following courses:

(1) install the less expensive, more effective AMF device

at the factory, (2) allow the AMF unit to be installed

locally in California (a contingency for which AMF was

planning), or (3) promptly try to develop their own

“solution” by model year 1966 (ze., the fall of 1965).

While defendants had repeatedly sworn that the last

alternative was absolutely impossible (R. 5166), this was

the course jointly chosen and announced—even though

in mid-1964 no industry device (except Chrysler’s) was

even in the prototype certification stage. (See Barr Dep.

Def. Ex. 33; R. 5196-97; Sherman Dep. 1380-82,

R. 6086-87; Berry Dep. 110-111, R. 6028-29.)

Pursuant to this agreement, defendants announced at

the August 12, 1964 MVPCB meeting that they were

going to advance installation of industry systems from

1967 to 1966 models, thereby avoiding the requirement

to use the AMF Smog Burner or other certified devices.

(See R. 4305; R. 5258.) Finally, although there was

virtually no cost data for the undeveloped and uncertified

industry “air injection system,” defendants publicly

represented that their system would have a selling price

to the public no greater than that of the least costly

certified device, the AMF Smog Burner (R. 5393-95).

Throughout the Fall and Winter of 1964, the industry’s

“air injection system” remained in a rudimentary state

of development, and, as defendant American Motors

7

admitted, as late as October 1964, ‘“‘certification was

not a foregone conclusion, at least for GM, Ford and

American Motors” (AMC Reply at 18, R. 4452).

In fact, for - me vehicies, defendants did not even try

to utilize the industry system, but instead sought exemp-

tions from the MVPCB. Board regulations required,

however, that defendants submit proof of non-availability

of certified devices in support of requests for exemptions.

Therefore, the use of Smog Bumer or other outside

devices on any vehicle would compromise all exemption

requests. (See R. 4995-96.) To meet the non-availability

criterion, GM falsely represented in its request for exemp-

tions that certified devices would require extensive body

changes in certain vehicles and hence were not “‘available”’

(R. 5234-35). While this representation was false, it was

successful. On January 20, 1965, after GM defended its

exemption requests before the Board (Steinhagen to Barr,

1/25/65), all exemption requests were granted (Searing

Dep. Ex. P-28; R. 5828).

Nevertheless, recognizing the potential preference for

its device over defendants’ costly and less effective

system, AMF continued its efforts to market the Smog

Burner throughout the first half of 1965.2, Thus, AMF

made test installations of prototype Smog Burners on a

variety of foreign models throughout the Winter and

Spring of 1965 (Ulyate Aff. ¢ 11). Defendants, however,

induced these foreign manufacturers to sign the Cross-

Licensing Agreement in June, 1965, precisely at the time

AMF was trying to sell them its device.

? Depositions of Gott at 41-42, 76; Lipchik at 195-202: Davis

at 22; Ulyate at 305-06; Cotta at 6; Keen at 6; Seltzer at 8; Green

at 15; Williamson at 5.

8

Further, in February of 1965, AMF unconditionally

quoted International Harvester, a named co-conspirator,

a firm price of “$55 per Smog Bummer” for 7,000 units,

further stating that the price would be considerably less

if “voiume production” were achieved.? On April 8,

1965, AMF called on Ford and again offered to supply

this defendant the Smog Burner (R. 5831). Ford rejected

the offer even though at that time it appeared question-

able whether Ford could qualify its fleet under the state

program. (See R. 5776-77; R. 5712; R. 5569; Homfeld

Dep. at 132, R. 6103.)

Thus, in the Spring of 1965, within the limitations

period, the AMF Smog Burner project was still very much

alive, and AMF was continuing preparations for ultimate

market entry. For example, in the event defendants

failed to achieve certification of their own devices, but

refused to factory install plaintiff’s units, AMF had

detailed alternative plans for installing Smog Burners at

dealer and other locations within the State of California.*

On April 21, 1965, a’ substantial appropriation was

approved by AMF management to maintain the Smog

Burner project “for the second quarter of 1965”

(R. 5832).

In the meantime, during the Fall of 1964 and the

Winter of 1965, defendants continued with their efforts

to develop their own pollution control system and to

3(R. 5829). On March 26, 1965, AMF wrote to International

Harvester again confirming that the February price was a “‘firm

quotation” based on “‘your request for quotation.”’ (Lipchik to

Bail, 3/26/65).

4See Seltzer Dep. at 166-68; Lipchik Dep. at 142-43; AMF

Progress Report-Smog Burner, 8/12/64, AMF 1302A.

9

obtain the required state certification. These efforts

included development of the Saginaw air pump which

was jointly financed by GM, Ford and AMC and the

uniform announcement by the same three companies in

July of 1965 of below-cost prices that were specifically

aimed at matching AMF’s price.’ Thus, these defendants

represented to the Board in July, 1965 that the price of

their devices would be “no more than $50” to the car

buyer (Misch Dep. at 551), even though they knew that

such a price would lead to very substantial losses.6 Asa

direct result of their on-going joint development and

testing activities and this below-cost pricing, defendant’s

system was certified in July of 1965. The August 1964

boycott decision was thereby finally effectuated, and

AMF excluded from the market.

2. Proceedings Below:

The district court, on the eve of trial, granted summary

judgment from the bench. No opinion was rendered and

the court adopted defendants’ lengthy proposed findings

virtually verbatim. The court based summary judgment

principally on its “findings”? that defendants’ rejections

of AMF were unilateral, that there was no AMF device to

boycott since it was only a prototype, and that the action

was barred by the statute of limitations.

The court of appeals upheld summary judgment on

the sole ground that the four-year statute of limitations

barred suit, 15 U.S.C. §15b. The court of appeals

SSee R. 5394; Mtg. of Ford Prod. Planning Comm., 5/11/65,

Secrest Dep. Exs.

©Ford, for example, lost in excess of 4 million dollars on its

device in modei ycar 1966 alone. GM lost 6.8 million dollars on

its device for that year. (See R. 4318-19.)

10

determined that January 10, 1965, was the critical date

for its statute of limitations analysis (Pet. App. 6a).’ It

first considered whether defendants had committed overt

acts in furtherance of their conspiracy after January 10,

1965 which damaged AMF, in which case a cause of

action based on those acts would not be barred. Zenith

Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321,

338 (1971). The court “found,” however, that “the

undisputed record indicates that appellees’ decision not

to purchase the afterburner devices from AMF were final

prior to January 10, 1965” and that “AMF’s exclusion

from the afterburner market was complete prior to

January 10, 1965” (Pet. App. 8a). The court character-

ized AMF’s efforts to sell to Ford and its co-conspirator

International Harvester as “forlorn inquiries by one all

of whose reasonable hopes had been previously dashed.”

(Id. at 10a.) Since, in the court’s view, “the 1964

decisions, as to AMF, were irrevocable, immutable,

permanent and final,” any “[a]cts subsequent to January

10, 1965 . . . were ‘but unabated inertial consequences

of some pre-limitation action’” and were not acts giving

rise to a cause of action. (/d. at lla, quoting Poster

Exchange, Inc. v. National Screen Service Corp., 517 F.2d

117, 128 (5th Cir. 1975), cert. denied, 423 U.S. 1054

(1976).)

7 January 10, 1965 is the critical date for purposes of the statute

of limitations because four years after that date, on January 10,

1969, the United States filed a suit involving the same subject

matter. Thus, pursuant to the provisions of Section 5 of the

Clayton Act, 15 U.S.C. §16, the running of the statute in the

present case was tolled until October 29, 1970, one year following

conclusion of the Government’s case by a consent decree entered

on October 29, 1969. See United States v. Automobile Mfrs. Ass'n,

307 F.Supp. 617 (C.D. Cal. 1969), aff'd per curiam sub nom. New

York v. United States, 397 U.S. 248 (1970). The present com-

plaint was filed on October 23, 1970.

11

The second issue addressed by the court was whether,

as of January 10, 1965, the fact or amount of AMF’s

damages was spcculative or unprovable. See Zenith

Radio, 401 U.S. at 339. On this issue, the court ruled

that AMF had been finally and completely injured by

defendants’ August 1964 announcement that they

intended uniformly to adopt the industry’s emission

control system and would not use AMF’s device (Pet.

App. 14a-15a). It concluded that since the entire

population of 1966 California automobiles could have

been projected at any time between August 1964 and

January 10, 1965, plaintiff’s damages were not more

speculative then than they would be today. (/d.) In

so holding, the court has ignored fundamental market

contingencies and uncertainties which made it impossible

for AMF to know, prior to January 10, 1965, whether

it would suffer total, partial or no exclusion from the

automotive pollution device market.

REASONS FOR GRANTING THE WRIT

This case raises issues of general importance concerning

application of the statute of limitations and the use of

summary judgment in antitrust cases:

First. The court of appeals has held AMF’s cause of

action barred by the statute of limitations on the curious

and erroneous ground that continuing overt acts set in

motion by defendants’ pre-limitations boycott decision

were “but unabated inertial consequences of” that

decision (Pet. App. lla). The rule announced below is

erroneous and, if followed in other circuits, would

unduly restrict private antitrust enforcement. It is,

moreover, in direct conflict with this Court’s holding in

Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S.

12

321 (1971), and with leading decisions of the Third,

Fifth and Tenth Circuits.®

Second. The court of appeals improperly applied the

Zenith rule that an antitrust cause of action does not

accrue until the fact and amount of damages are reason-

ably ascertainable. Specifically, it held that AMF’s cause

of action accrued when defendants announced their

intention to boycott the AMF device, even though that

announcement was both prospective and contingent.

Contrary to the ruling of the court below, it would have

been impossible as of January 10, 1965, for AMF to

know whether it would ultimately suffer complete,

partial or no exclusion from the state-mandated market

for exhaust control devices. In those circumstances,

an ability to project the entire California automobile

market, on which the court of appeals rests its decision,

is irrelevant. The decision below is both incorrect and

in conflict with decisions in other circuits that have

correctly applied the Zenith rule in cases where, as here,

the impact of an antitrust violation can be affected by

future and unknowable actions, decisions or market

developments. Ansul Co. v. Uniroyal, Inc., 448 F.2d 872

(2d Cir. 1971), cert. denied, 404 U.S. 1018 (1972); and

see Harold Friedman, Inc. v. Thorofare Markets, Inc.,

587 F.2d 127, 138-39 (3d Cir. 1978); Continental-Wirt

Electronics Corp. v. Lancaster Glass Corp., 459 F.2d 768,

770 (3d Cir. 1972).

8 Fitzgerald v. General Dairies, Inc., 590 F.2d 874 (10th Cir.

1979); Harold Friedman, Inc. v. Thorofare Markets, Inc., 587 F.2d

127 (3d Cir. 1978); Imperial Point Collonades Condominium v.

Mangurian, 549 F.2d 1029 (5th Cir. 1977), cert. denied, 434

U.S. 859 (1978); Poster Exchange, Inc. v. National Screen Service

Corp., 517 F.2d 117 (5th Cir. 1975), cert. denied, 423 U.S. 1054

(1976). See also Berkey Photo, Inc. v. Eastman Kodak Co.,

[1979] TRADE REG. REP. (CCH) $62,718 at 78,020-21 (2d Cir.

1979); Charlotte Telecasters, Inc. v. Jefferson-Pilot Corp., 546

F.2d 570, 572-73 (4th Cir. 1976).

13

Third. The Court of Appeals resolved highly contested

fact issues against AMF, thereby flouting this Court’s

decisions in Poller v. Columbia Broadcasting Systems,

Inc., 368 U.S. 464 (1962), and Norfolk Monument Co. v.

Woodlawn Memonal Gardens, 394 U.S. 700 (1969). For

example, it improperly found that “AMF itself was

convinced by the last quarter of 1964 that it was out

of the market” (Pet. App. lla), despite clear evidence

that AMF made firm offers and contemplated “volume

production” in February 1965 and remained active in

the market until at least mid-1965 (see p. 7-8 supra).

Review by this Court is necessary to correct the mani-

fest errors below: to eliminate the lack of uniformity

among circuits in the interpretation and application of

both the continuing conspiracy and nonascertainability

aspects of Zenith; and, finally, to make clear to all courts

in the federal system that there is a right to have a jury

determination of disputed fact questions raised by

defenses under the statute of limitations.

1. In Zenith Radio Corp. v. Hazeltine Research, Inc.,

401 U.S. 321, 328 (1971), this Court affirmed that each

injurious act of a continuing conspiracy gives rise to a

new cause of action. Thus, even though a conspiracy is

formed and some overt acts are committed more than

four years before suit, an action is not barred based on

additional injurious acts that occur in the four-year

period preceding suit.

Relying heavily on Zenith, the Court of Appeals for

the Fifth Circuit has taken the lead in establishing the

rule, of great significance in applying the statute of

limitations, that “continuing antitrust conduct resulting

in a continued invasion of a plaintiff’s rights may give

rise to continually accruing rights of action.”’ Poster

14

Exchange, Inc. v. National Screen Service Corp., 517

F.2d 117, 128 (5th Cir. 1975), cert. denied, 423 U.S.

1054 (1976).

At the same time, the Fifth Circuit has recognized that

there are more likely to be continually accruing causes of

action in refusal to deal or market exclusion cases than

in other types of antitrust violations. This is because ex-

clusion from an industry “while perhaps unequivocal .. .

[is] not of necessity permanent.” Poster Exchange, 517

F.2d at 127. Consequently, any “act or word”’ per-

petuating plaintiff’s exclusion (7d. at 128) or any

“reiteration of defendants’ refusal to deal” gives rise to a

new antitrust cause of action. /mperial Point Colonnades

Condominium v. Mangurian, 549 F.2d 1029, 1035 (5th

Cir. 1977), cert. denied, 434 U.S. 859 (1978).

The significance of post-Zenith case law establishing

that new causes of action accrue based on continuing

injurious conduct is clear. Defendants’ 1964 boycott

announcement was not self-executing. It related to the

future procurement and installation of smog control

devices, and the success of the conspiracy required

substantial implementing conduct within the limitations

period. Nevertheless, the court of appeals has held AMF’s

claim to be time-barred. In doing so it has announced a

rule of law that is erroneous on its face and in conflict

with the decisions of the Fifth and other circuits inter-

preting Zenith.

The error of the court below stemmed from a complete

misreading of the opinion in Poster Exchange. In that

case, the Fifth Circuit established as a logical and proper

caveat to the rule concerming continually accruing rights

of action that damages which occur within the four years

preceding suit, but which are solely the “abatable but

15

unabated inertial consequences of some pre-limitations

action” are barred by the statute of limitations. Poster

Exchange, 517 F.2d at 128. As the Fifth Circuit later

explained in Mangurian, “‘no new cause of action accrues

for the damages occurring within the limitations period

because no act committed by the defendant within that

period caused them.”’ Mangurian, 549 F.2d at 1035

(court’s emphasis). The key distinction is between

injurious conduct or acts occurring within the limitations

period and the mere accumulation of increased damages

which “result solely from [pre-limitations] acts.” Jd.

(emphasis added.)

The court of appeals has egregiously misinterpreted

the language in Poster Exchange to mean that overt acts

occurring within the limitations period which continued

an established pre-limitations course of illegal conduct do

not give rise to a new cause of action. The court recog-

nized that within the limitations period, defendants

engaged in numerous overt acts, including additional

refusals to deal with AMF, predatory pricing announce-

ments aimed specifically at foreclosing utilization of the

AMF device, and a series of acts designed to achieve

9A second qualification or caveat recognized by the Fifth

Circuit in Poster Exchange and Mangurian is that where an “‘action-

able wrong is by its nature permanent at initiation without further

acts’’ suit must be brought within four years of the occurrence of

the act (Poster Exchange, 517 F.2d at 126-27). As discussed

below (pp. 19-21), the court of appeals committee grave error

by resolving highly-disputed fact questions relevant to this issue

against plaintiff. For example, the court found that AMF already

had been driven out of the control device business by the end

of 1964, and thus could not have suffered injury as a result of

additional overt acts by defendants in 1965, although many of

these acts were specifically directed against AMF, which was con-

tinuing its attempts to enter the market.

16

certification of their own “industry” device (Pet. App.

5a, 6a, 9a). Without these additional overt acts, defend-

ants could have been compelled to deal with plaintiff by

force of the California law requiring use of a certified

device on 1966 models (Pet. App. 4a). Inexplicably,

however, the court held that defendants’ “‘[a]cts subse-

quent to January 10, 1965, . . . were but ‘unabated

inertial consequences of some pre-limitations action’”

(Pet. App. lla), specifically, defendants’ “1964 rejection

of the Smog Burner” from which, in the court’s errone-

ous understanding, “all injury to AMF _ necessarily

resulted... .”’ (/d.)

Contrary to the court’s holding, “acts” subsequent

to and in implementation of defendants’ 1964 decision

do constitute injurious conduct within the limitations

period. It is clear, moreover, that the acts occurring

within the limitations period were not “inconsequential,”

“inertial,” or “tangential.” Rather they were affirma-

tively directed against AMF and were actively undertaken

to assure success of the conspiracy. These acts included:

(a) predatory below-cost pricing in July of 1965, specifi-

cally aimed at foreclosing AMF’s device from the market;

(b) false representations to the MVPCB that use of

plaintiff’s device would require extensive body changes,

thus rendering AMF’s product “unavailable” for models

for which the industry sought exemption; (c) joint

development of an air pump which was vital to certifica-

tion of the industry’s device; (d) continued enforcement

of the Cross-Licensing Agreement, including inducement

of foreign manufacturers to join the Agreement at a time

when AMF was trying to sell its device to them. (See

pp. 7-9 supra.)

In short, the court below failed to understand that

plaintiff’s exclusion from the market was not complete

until the occurrence of additional overt acts well within

the limitations period. See Fleer Corp. v. Topps Chewing

Gum, Inc., 415 F.Supp. 176, 181 (E.D. Pa. 1976), appeal

17

dismissed without opinion (3d Cir. 1977), cert. denied,

435 U.S. 970 (1978). The case thus stands as a dangerous

precedent for the immunization of anticompetitive acts

committed in the course of a continuing conspiracy. This

Court should make clear that continued conduct which

violates the antitrust laws by excluding a competitor

from a market will subject the antitrust violator to con-

tinued antitrust liability.

2. In Zenith, this Court held that the statute of limi-

tations does not begin to run until the damages from a

conspiratorial overt act are actually suffered and are

reasonably ascertainable (401 U.S. at 339-42). In Ansul

Co, v. Uniroyal, Inc., 448 F.2d 872 (2d Cir. 1971), cert.

denied, 404 U.S. 1018 (1972), the Second Circuit held

that where plaintiff Louisville, a distributor of a chemical

product (MH-30), was terminated by its supplier for

failure to go along with certain illegal programs, a suit

filed more than four years later was not barred since

plaintiff would have been unable to prove its damages

with sufficient certainty until a later point in time within

the limitations period. (/d. at 885.) This was because

“Louisville had no means of knowing [at the time of its

termination] to what extent it would be able to fill its

requirements of MH-30 from other distributors or at

what price.”” (/d.) In short, the extent of Louisville’s

exclusion from access to supplies, and hence the amount

of its damages, could not have been determined at the

time of defendants’ last overt act pursuant to the con-

spiracy. See Harold Friedman, Inc. v. Thorofare Markets,

Inc., 587 F.2d 127, 139 (3d Cir. 1978); Continental-Wirt

Electronics Corp. v. Lancaster Glass Corp., 459 F.2d 768,

770 (3d Cir. 1972).

The court of appeals in the instant case failed to

recognize that precisely the same type of market con-

18

tingencies and uncertainties precluded suit by AMF in

1964. Rather, it reasoned that, based on defendants’

announcement in 1964 of their “intention not to use the

Smog Burner,” a cause of action for absolute exclusion

from future markets could have been brought by AMF

(Pet. App. 14a, emphasis added).

Notwithstanding defendants’ announced intention in

late 1964, and their expressed preference for an industry

solution to the requirement for exhaust control devices,

it is undisputed that defendants had no alternative to the

AMF Smog Burner until mid-1965. Thus, defendants

have admitted that the 1964 boycott decision was con-

tingent upon obtaining certification of their own devices

(Heinan Dep. at 1374, R. 6083). See also AMC Reply at

18, R. 4452. Moreover, even if some or all of defendants

persisted in refusing to factory-install the AMF device,

the possibility remained in 1964 that the State of Cali-

fornia would require in-state installation, a contin-

gency for which AMF was planning. (See p. 8 supra.).

Further, defendants’ exemption - requests were not

acted upon until January 20, 1965. Clearly, in these

circumstances, AMF could not have asked a jury to

speculate in 1964 that it would be excluded absolutely

from the state-mandated market for control devices and

would have been able to make no sales whatsoever in

1965 or future years. See Ansul, 448 F.2d at 885. It

can be taken as certain that defendants would have

contended that a claim of “absolute exclusion” was

premature because GM, Ford and AMC did not have

certified devices in hand and they were only in a rudi-

mentary state of development. (See td.) Thus, in 1964,

plaintiff “had no means of knowing to what extent” it

might be called upon to supply exhaust control devices

19

in California. (/d.)!° Review by this Court is required

to clarify the rule in Zenith and to harmonize its appli-

cation by the courts of appeals.

3. In Poller v. Columbia Broadcasting System, 368

U.S. 464, 473 (1962), and Norfolk Monument Co. v.

Woodlawn Memonal Gardens, Inc., 394 U.S. 700, 704

(1969), this Court cautioned that “summary proce-

dures should be used sparingly in complex antitrust

litigation. . . .”” Moreover, in any case it is axiomatic that

summary judgment can be granted only where “there is

no genuine issue as to any material fact and .. . the

moving party is entitled to judgment as a matter of law.”’

Fed.R.Civ.P. 56(c).

These standards are fully applicable to summary dis-

positions of antitrust cases on the ground they are

time-barred by the statute of limitations. Thus, in

Fitzgerald v. General Dairies, Inc., 590 F.2d 874 (10th

Cir. 1979), the court of appeals held that where plaintiff

alleged it was unlawfully excluded from the dairy busi-

ness by the actions of defendants, the facts that plaintiff

“felt there was a cause of action for antitrust violations”

and that “a bankruptcy petition was filed before the

four-year period of limitations’ did not support summary

judgment that the cause was time-barred. (/d. at 875.)

Summary judgment was reversed for many of the reasons

10By contrast, in the cases relied upon by the court of appeals

there existed no market contingencies or uncertainties of any kind.

In all of the cases cited, both injury and damages were final,

complete and ascertainable upon occurrence of the challenged acts

and practices. See City of El Paso v. Darbyshire Steel Co., 575

F.2d 521 (5th Cir. 1978), cert. denied, 99 S.Ct. 1033 (i979);

Charlotte Telecaster, Inc. v. Jefferson-Pilot Corp., 546 F.2d 570

(4th Cir. 1976); Monona Shores, Inc. v. United States Steel Corp.,

374 F.Supp. 930 (D. Minn. 1973).

20

argued here by petitioner. Thus, the court of appeals

held that numerous fact questions were raised, including

plaintiff’s efforts to re-enter the market following

bankruptcy and allegations of further overt acts by

defendants preventing such re-entry within the four-year

period, all of which should be resolved by the trier of

facts and not by the court on summary judgment. /d. at

875-76. See Harold Friedman, Inc. v. Thorofare Markets,

Inc., 587 F.2d 127, 138-39 & n.41 (3d Cir. 1978).

In the present case, however, the court of appeals

arrogantly substituted its judgment for that of the

jury on numerous critical fact questions including:

(a) whether the conspiracy to exclude AMF continued

into the limitations period; (b) whether AMF con-

tinued its attempts to enter the market, and (c) at what

point AMF’s damages ceased to remain speculative and

contingent. ;

Repeatedly resolving disputed fact issues against plain-

tiff, the court made its own “finding” that “[nJothing

[existed] in the record indicates other than that the

1964 decisions, as to AMF, were irrevocable, immutable,

permanent and final” (Pet. App. lla). The court simply

ignored substantial evidence that defendants’ original

1964 boycott decision was contingent upon certification

of the industry system and that defendants themselves

did not deem the 1964 announcement a knock-out blow,

since they engaged in costly below-cost selling in 1965

to foreclose plaintiff and since they continued to refuse

to deal with plaintiff well into the limitations period.!!

\1The court of appeals cites “lead time’’ requirements as one

reason why defendant’s 1964 decisions were “‘irrevocable’’ (Pet.

App. ——). To the contrary, as of January 10, 1965 AMF’s Smog

[footnote continued]

Se

«a=

21

The court’s treatment of plaintiff’s continued efforts

to sell its product in 1965 vividly demonstrates the

inappropriateness of summary judgment. AMF quoted

a firm price for the Smog Burner to International Har-

vester, a named co-conspirator, in February, 1965, and

tried to sell the product to Ford two months later (p. 8

supra). The court of appeals cavalierly dismissed these

events by stating, incorrectly, that the International Har-

vester quote “did not indicate production capability”

(Pet. App. 5a) and by characterizing both offers as “‘for-

lorn inquiries by one all of whose reasonable hopes had

been previously dashed” (id. 10a). Clearly, however,

such questions as whether these inquiries were “forlorn,”

whether plaintiff’s reasonable hopes and expectations

already were dashed, and whether plaintiff had the

ability to deliver the goods as stated to International

Harvester are all matters which plaintiff is entitled to

have resolved by a jury.!”

Burner was in a far more advanced state of development than the

uncertified industry air injection system and AMF had the capabil-

ity to quickly launch production in the event orders were received.

(E.g., Lipchik Dep. at 26, 137, 139-49; AMF Progress Report at

11 (AMF 1302A); AMF Distribution Plan and Cost Estimate at 8,

10, 25, App. G., MVPCB Final Staff Report, Lipchik Dep. Ex. 13.)

Moreover, nothing precluded purchase of the Smog Burner for the

mid-1966 or even 1967 model years.

2 The issue of whether AMF’s damages were ascertainable prior

to the limitations period also turns on many of the same fact issues

discussed above, such as the contingent nature of defendants’ 1964

refusals and the continued vitality of the Smog Bummer project

throughout the first half of 1965. These disputed issues of fact

should not have been resolved against plaintiff on summary judg-

ment. See Harold Friedman, Inc. v. Thorofare Markets, Inc., 587

F.2d 127, 138-39 & n.41 (3d Cir. 1978); Continental-Wirt Elec- .

tronics Corp. v. Lancaster Glass Corp., 459 F.2d 768, 770 (3d Cir.

1972).

22

CONCLUSION

For the reasons stated above, the Petition for a Writ

of Certiorari should be granted.

Respectfully submitted,

Of Counsel:

BERGSON, BORKLAND, HOWARD ADLER, JR.

MARGOLIS & ADLER DONALD L. HARDISON

11 Dupont Circle, N.W. Marc S. PALAY

Washington, D.C. 20036

(202) 462-5930

ROGERS HOGE & HILLS GREGOR F. GREGORICH

90 Park Avenue

New York, New York 90212

(212) 953-9200 Attorneys for Petitioner

August 16, 1979

la

APPENDIX

In re

MULTIDISTRICT VEHICLE AIR POLLUTION

AMF, INCORPORATED

Plaintiff-Appellant,

v.

GENERAL MOTORS CORPORATION,

Ford Motor Company, Chrysler Corporation,

American Motors Corporation and

Automobile Manufacturers Association, Inc.,

Defendants -Appellees.

No. 76-1648

United States Court of Appeals, Ninth Circuit

Feb. 14, 1979

2a

Howard Adler (argued), Bergson, Borkland, Margolis &

Adler, Washington, D.C., for plaintiff-appellant.

James G. Hunter, Jr. (argued), Hedland, Hunter &

Lynch, Chicago, Ill., Philip K. Verleger (argued), of

McCutchen, Black, Verleger & Shea, Los Angeles, Cal.,

for defendants-appellees.

Appeal from the United States District Court for the

Central District of California.

Before SNEED and HUG, Circuit Judges, and EAST,*

District Judge.

SNEED, Circuit Judge:

This is an appeal from summary judgments in a treble

damage antitrust action brought by appellant AMF,

Incorporated (“AMF”) against appellees, four major

American automobile manufacturers and their trade

association. AMF claims that appellees, acting in concert,

by agreeing not to purchase AMF’s device, excluded it

from the early market in methods to limit and control air

pollution, and that such action caused commercial injury

cognizable under Section 4 of the Clayton Act, 15 U.S.C.

§ 15. Following the close of discovery, appellees moved

for summary judgment contending that (1) the industry’s

rejection of the AMF device was strictly the result of

unilateral decisions by each automobile company; (2)

*Hon. William G. East, Senior United States District Judge for

the District of Oregon, sitting by designation.

3a

there never was an AMF device to boycott because only

a prototype had been certified by the California Motor

Vehicle Pollution Control Board (“MVPCB’’); (3) AMF’s

action was barred by the statute of limitations; and (4)

AMF had transferred relevant documents to another

company or lost them when it terminated its exhaust

control device business. Appellee Chrysler moved sepa-

rately for summary judgment on the added ground that

it had at all times been firmly committed to its own

device. The district court granted the appellees’ motions

for summary judgment with respect to all issues relevant

to this appeal. As we agree that the four-year statute

of limitations in 15 U.S.C. § 15b barred this action, we

affirm without reaching the district court’s other grounds.

I.

FACTS

AMF commenced this action on October 23, 1970,

charging that appellees conspired to restrain trade and

monopolized in violation of Sections 1 and 2 of the

Sherman Act. The roots of this alleged conspiracy extend

back to the early 1950’s, when appellees entered into a

cooperative program to study and remedy problems

generated by emissions from internal combustion engines.

One part of the joint program included a cross-licensing

agreement for patents developed by any party. AMF

further alleges that within this overall conspiracy appel-

lees, in 1964, formed a conspiracy specifically intended

to exclude it from the developing market for automobile

emission control equipment.

In 1961 AMF entered into a program to develop an

afterburner designed by Charles Morris; AMF termed

its device the “Smog Burner.” Afterburners reduce

4a

emissions by further combustion of exhaust gasses. They

are “hang on’’ devices, in that they are attached toward

the end of the exhaust system, and are not integral parts

of the engine itself. Although various appellees had

experimented with afterburner devices, none was con-

centrating its own internal development upon such a

device in 1964. At that time no state or federal agency

mandated particular emission control standards. Under

California law, however, the MVPCB was authorized to

issue “Certificates of Approval” to pollution control

devices found capable of achieving certain standards. The

law specified that as soon as the MVPCB certified two

such devices, a provision requiring all new automobiles

sold within the state to meet established emission require-

ments would become effective. AMF submitted a

prototype of its device to the MVPCB, and on June 17,

1964, the MVPCB certified AMF’s prototype along with

three other emissions control methods, none of which

were afterburners. At that time, no appellee had a device

that had received certification. Nevertheless, as of

June 17, 1964, California law required appellees to seek

exemptions or meet the established emission require-

ments in the 1966 model year, which commenced in the

Fall of 1965.

AMF cites several actions on the part of appellees

which indicated a joint decision to exclude parties

outside of the industry cooperative program from the

market in these devices. Specifically, after concerted

discussion, appellees each announced at an August 12,

1964 MVPCB meeting that they would install industry-

developed emission control systems in 1966 models and

would refrain from using AMF’s Smog Burner or any of

the other previously certified devices. At various times

each appellee directly contacted AMF to this effect,

5a

the last such refusal coming from American Motors in

October. According to an internal AMF memorandum

dated October 29, 1964, AMF was unable to get any

appellee to consider the Smog Burner even for vehicles

for which exemption from the California requirements

was requested. In October when American Motors

Corporation, after testing of the AMF device, stated that

it would not use the Smog Bumer, AMF personnel had

concluded that a conspiracy to exclude them existed.

In November the MVPCB denied certification for use

on used cars to the only device, other than AMF’s, that

had applied for such certification, with the consequence

that California’s provisions requiring the installation on

used cars did not go into effect. By December, AMF had

begun to decrease its staff working on the Smog Bummer

project. AMF had foreseen two possible markets for the

device—new and used cars—and neither had developed.

On January 7, 1965, the MVPCB met to consider exemp-

tion requests by appellees for certain models; AMF did

not attend. AMF did not send a representative because,

as its management stated, it had a “conviction that no

purchase orders for Smog Burners would emanate from

any Detroit manufacturer.”” An AMF representative

contacted two Ford engineers in April of 1965, asking

whether Ford had any new interest in the Smog Bumer;

he received a negative response. Finally, a letter to

International Harvester, not named as a defendant in

AMF’s suit, sent in February 1965 quoted prices of the

device, but did not indicate production capability.

During this period, each of the appellees worked on an

emission control system for its cars. Chrysler developed

its own “Clean Air Package” (CAP), and the other three

manufacturers adopted an air injection system operated

with an air pump supplied by GM. Each of the appellees

6a

did some testing with the AMF prototype during the

Summer of 1964, but only AMC ever tested a production

model. Chrysler’s CAP system was certified in November

1964, but none of the other three manufacturers received

certification or exemption until the Spring of 1965.

II.

LIMITATIONS

Appellant filed this suit on October 23, 1970. 15

U.S.C. § 15b establishes the applicable limitations: “Any

action to enforce any cause of action under sections 15

or 15a of this title shall be forever barred unless com-

menced within four years after the cause of action

accrued” (emphasis added). The government commenced

a civil suit against these same appellees, however, on

January 10, 1969. 15 U.S.C. §16(b) suspends the

running of the statute of limitations for “every private

right of action ... based in whole or in part on any

matter complained of” in the private action during the

pendency of and for one year after any antitrust action

commenced by the United States. The government suit

was settled by consent decree October 29, 1969, within

one year of AMF’s filing this suit. We . :erefore focus our

attention on January 10, 1965, four years prior to the

commencement of the government action, as the critical

date for limitations purposes.! If appellant’s action had

accrued before that date, this action is barred by 15

U.S.C. § 15b.

l Appellees have argued that the government suit did not toll

limitations because it was not “based in whole or in part on the

matter complained”’ of in the suit by AMF. In light of our con-

clusion that limitations bars this suit even if 15 U.S.C. §16(b)

applies, we do not reach this question.

7a

Previously, we have stated: “A civil cause of action

under the [antitrust laws] arises at each time the plain-

tiff’s interest is invaded to his damage, and the statute

of limitations begins to run at that time.” Twin City

Sportservice, Inc. v. Charles O. Finley & Co., 512 F.2d

1264, 1270 (9th Cir. 1975). Under two possible theories,

AMF’s cause of action arose on January 10, 1965 or

thereafter. First, if appellees committed overt acts

which damaged AMF, in furtherance of a conspiracy, on

January 10, 1965 or thereafter, those acts are not barred.

Second, if damages attributable to appellees’ actions prior

to January 10, 1965, were speculative, or their amount

and nature were unprovable, as of that date, then AMF’s

action to recover those damages is not barred. We treat

each of these possibilities in turn.

A. Continuing Conspiracy

It is well established that a plaintiff’s cause of action

for damages under the antitrust laws is not barred simply

because a conspiracy was formed outside the limitations

period. The Supreme Court clarified the point at which

an antitrust cause of action accrues in Zenith Radio

Corp. v. Hazeltine Research, Inc., 401 U.S. 321,91 S.Ct.

795, 28 L.Ed.2d 77 (1971).

Generally, a cause of action accrues and the statute

begins to run when a defendant commits an act that

injures a plaintiff’s business. . .. This much is plain

from the treble-damage statute itself. 15 U.S.C.

§ 15. In the context of a continuing conspiracy to

violate the antitrust laws . .. this has usually been

understood to mean that each time a plaintiff is

injured by an act of the defendants a cause of action

accrues to him to recover the damages caused by

that act and that, as to those damages, the statute of

limitations runs from the commission of the act.

8a

401 U.S. at 338, 91 S.Ct. at 806.

Cf. Hanover Shoe, Inc. v. United Shoe Machinery

Corp., 392 U.S. 481, 88 S.Ct. 2224, 20 L.Ed.2d 1231

(1968) (damages not barred by limitations may be

recovered in suit brought in 1955 for injury caused by

prohibited practice begun in 1912 and continued through

date of suit). AMF can recover only for damages caused

by forbidden “overt acts” of the conspirators within the

limitations period. Suckow Borax Mines Consolidated,

Inc. v. Borax Consolidated, Ltd., 185 F.2d 196, 208 (9th

Cir. 1950), cert. denied, 340 U.S. 943, 71 S.Ct. 506, 95

L.Ed. 680 (1951). In this case we find the undisputed

record indicates that appellees’ decisions not to purchase

the afterburner devices from AMF were final prior to

January 10, 1965. AMF’s exclusion from the afterbumer

market was complete prior to January 10, 1965. No

forbidden ‘“‘overt acts” occurred thereafter; appellees

merely supplied their needs from sources other than

AMF. AMF’s position resembles that of a disappointed

patron of the theater. When tumed away from the

theater at eight o’clock because the performance is sold

out, his exclusion occurs at eight, not during the per-

formance or when it concludes at eleven o’clock. Part

ratione, AMF’s cause of action arose before January 10,

1965 and is barred by 15 U.S.C. § 15b.

AMF argues, however, that appellees’ rejection of its

device prior to January 10, 1965 was not a final rejection.

To continue the theater example, it argues that it was not

irrevocably excluded at eight o’clock but rather was told

to call again just before curtain time at eight-thirty.

Exclusion, therefore, could not be final until eight-thirty.

Specifically, it argues that under Flintkote Co. v. Lys-

fjord, 246 F.2d 368 (9th Cir.), cert. denied, 355 U.S.

835, 78 S.Ct. 54, 2 L.Ed.2d 46 (1957), the refusal to

9a

deal was not final, and that each day without an order

constituted a new cause of action. To support this view,

AMF points to asserted new refusal by Ford and Inter-

national Harvester in early 1965 as forbidden ‘‘overt

acts” of the continuing conspiracy. It also argues that

pricing announcements and other activity by appellees

to achieve certification of their methods constituted simi-

lar acts.

We note to begin with that Flintkote was concerned

with the period of time for which damages were recover-

able, not the period of time within which suit must be

brought. It limited damages suffered from a continued

refusal to deal to those prior to the filing of suit. Recom-

pense for wrongful acts subsequent to the suit must be

sought in later suits. Here the question is whether AMF’s

injury was the consequence of multiple wrongs or a single

irrevocable and permanent injury. If the injury was final

during 1964, then the purpose of 15 U.S.C. §15b asa

statute of repose should be served. See Dungan v. Morgan

Drive-Away, Inc., 570 F.2d 867 (9th Cir.), cert. denied,

— US. —_, 99 S.Ct. 103, 58 L.Ed.2d 122 (1978).

This purpose has been described as follows: “The func-

tion of the limitations statute is simply to pull the

blanket of peace over acts and events which have them-

selves already slept for the statutory period, thus barring

proof of wrongs imbedded in time-passed events.” Poster

Exchange, Inc. v. National Screen Service Corp., 517

F.2d 117, 127 (5th Cir. 1975), cert. denied, 423 U.S.

1054, 96 S.Ct. 784, 46 L.Ed.2d 643 (1976).

In Poster Exchange, supra, the Fifth Circuit clearly

distinguished between injury final at its inception and a

continuing wrong. A conspiracy had excluded Poster

Exchange from access to supplies for a period stretching

beyond the four-year limitations period. The court,

10a

unable to determine whether during the limitations

period there was ‘‘a mere absence of dealing, or whether

there was some specific act or word” of a wrongful

nature, remanded for a determination of whether such

acts or words occurred within the period. 517 F.2d at

128. Nevertheless, the court recognized:

Where the violation is final at its impact, for ex-

ample, where the plaintiff’s business is immediately

and permanently destroyed, or where an actionable

wrong is by its nature permanent at initiation

without further acts, then the acts causing damage

are unrepeated, and suit must be brought within the

limitations period and upon the initial act.

Id. at 126-27.

The Fifth Circuit recently adhered to this principle

when it observed: ‘‘{[W]here all the damages complained

of necessarily result from a pre-limitations act by defend-

ant, no new cause of action accrues for any subsequent

acts committed by defendant within the limitations

period because those acts do not injure plaintiff.” Im-

perial Point Colonnades Condominium, Inc. v. Mangurian,

549 F.2d 1029, 1035 (5th Cir.), cert. denied, 434 U.S.

859, 98 S.Ct. 185, 54 L.Ed.2d 132 (1977) (emphasis

original).

These views support our disposition of this case. Any

injury to AMF is attributable to the final denials by the

appellees in 1964. Contacts initiated by AMF to Ford

and International Harvester do not indicate otherwise.

These, to continue the theater example, were not invited

pre-curtain calls at the box office; rather they were

forlorn inquiries by one all of whose reasonable hopes

had been previously dashed. That is, appellees had

indicated clearly and irrevocably an intent to look to

their own devices or modifications thereof for the 1966

model year. The original equipment supply market to

lla

automobile manufacturers differs substantially from

other supplier relationships. Any part must be integrated

into the full car design. Planning is essential, and planning

requires lead time. In this case, the record indicates

AMF itself was convinced by the last quarter of 1964

that it was out of the market. By that time, AMF had

even failed to gain access to the used car market. The

staff for the Smog Burner was substantially disassembled

in December 1964. AMF failed .o have a representative

attend a January 7, 1965 MVPCB meeting in part because

it believed appellees would not order from it. Whatever

hope of business AMF may have clutched, its source

could not have been actions or words of the appellees.

Nothing in the record indicates other than that the 1964

decisions, as to AMF, were irrevocable, immutable,

permanent and final. For this reason, all injury to AMF

necessarily resulted from the 1964 rejection of the Smog

Burner. Acts subsequent to January 10, 1965, to use the

language of Poster Exchange, were “but unabated inertial

consequences of some pre-limitations action.” 517 F.2d

at 128.

B. Speculative Damages

Turning to AMF’s second ground for avoiding the bar

of limitations, we acknowledge that the Supreme Court

has recognized in Zenith Radio Corp. v. Hazeltine Re-

search, Inc., supra, 401 U.S. 321, 91 S.Ct. 795, 28

L.Ed.2d 77, that an accrual of damages can constitute

the accrual of a cause of action even though all wrongful

acts took place outside the limitations period:

[E]ven if injury and a cause of action have accrued

as of a certain date, future damages that might arise

from the conduct sued on are unrecoverable if the

12a l3a

fact of their accrual is speculative or their amount inferential, as well as direct and positive proof.’”’

and nature unprovable. 327 U.S. at 264, 66 S.Ct. [574] at 580.

. . . [R]efusal to award future profits as too | Charlotte Telecasters, Inc. v. Jefferson-Pilot Corp., 546

speculative is equivalent to holding that no cause of F.2d 570, 573 (4th Cir. 1976).

action has yet accrued for any but those damages In Bigelow and Story Parchment Co. the Court faced

already suffered. In these instances, the cause of

action for future damages, if they ever occur, will

accrue only on the date they are suffered ....

the question whether damages were too uncertain for a

jury to award damages. It is distinguished uncertain

damage, which prevented recovery, from an uncertain

401 vans at ek 91 sane at ae (citations omitted). | extent of damage, which did not prevent recovery; that

This court interpreting Zenith, has stated: is, the failure to establish an injury, from the not uncom-

Zenith stands for the proposition that a plaintiff mon imprecision with regard to its scope. The Court

may recover for acts violative of the antitrust laws | emphasized that a wrongdoer should not profit from

committed prior to the statute of limitations date, | uncertainty caused by his own wrong. “The constant

but that he may only recover those damages for tendency of the courts is to find some way in which

such acts which accrued and became ascertainable damages can be awarded where a wrong has been done

within the pe of the statute. . Difficulty of ascertainment is no longer confused with

Hanson v. Shell Oil Co., 541 F.2d 1352, 1361 (9th Cir. right of recovery.” Story Parchment Co., 282 U.S. at

1976), cert. denied, 429 U.S. 1074, 97 S.Ct. 813, 50 565-66, 51 S.Ct. at 241.

.Ed. i i F

L Ed 2d 792 (1977) Applying this standard, AM could In Zenith such a way was found. Damages arising

maintain this action if, as of January 10, 1965, its more tem © f

damages were speculative, or their amount and nature pay pe ronan nee ae eee

8 # P ’ : | the plaintiff from the Canadian market were held to have

were unprovable. been too speculative as of 1954 and thus not barred by

Zenith did not establish new standards for determining | a limitations period commencing in 1954. The Court

whether damages are ascertainable as of a particular date. sought to assure that antitrust plaintiffs would not suffer

injury that could never be remedied. It believed the de-

fendants could have prevented Zenith from any recovery

for post-1958 damages in a 1954 suit by claiming that

The principal cases explaining the criteria for ascer-

taining whether damages are speculative remain

Bigelow v. RKO Pictures, Inc., 327 U.S. 251, 264,

ee ES oe

66 S.Ct. 574, 90 L.Ed. 652 (1946), and Story | any injury past that date was speculative. Such also was

Parchment Co. v. Paterson Parchment Paper Co., | the result in Ansul Co. v. Uniroyal, Inc., 448 F.2d 872

282 U.S. 555, 562-66, 51 S.Ct. 248, 75 L.Ed. 544 | (2d Cir. 1971), cert. denied, 404 U.S. 1018, 92 S.Ct

(1931). These cases teach that when the defendant's 680, 30 L.Ed.2d 666 (1972), in which suit was hecuathe

wrong has been proven, “the jury may make a | in 1968 stemming from the 1963 termination of a

just and reasonable estimate of the damage .... a a

‘{JJuries are allowed to act upon probable and distributorship agreement. The court held that damages

accruing between 1964 and 1968 would have been 7

l4a

speculative for suit in 1963 and that, as a consequence,

could be recovered in the 1968 suit.

The standard established in Story Parchment Co. does

not always lead to a Zenith result, however. Thus in

Charlotte Telecasters, supra, 546 F.2d 570, the Fourth

Circuit held that future profits of a cable television

system were not too speculative to be subject to proof.

See El Paso v. Darbyshire Steel Co., 575 F.2d 521 (5th

Cir. 1978). Also in Monona Shores, Inc. v. United States

Steel Corp., 374 F.Supp. 930 (D. Minn. 1973), a district

court held that the extent of damages flowing from a

foreclosure subject to further judicial proceedings was

ascertainable as of the date the foreclosure was com-

menced. The court stated:

It should be noted that the Zenith case does not

require that the plaintiff have the best evidence

possible of his damage, but rather only that the

damages be provable. . . . [I]n some cases ...

damages are better proven at a later time. However,

that does not mean at an earlier point in time,

enough evidence of damage was not available to

allow the issue to go to the jury.

374 F.Supp. at 936.

In this case each appellee during 1964 had expressed

without qualification its intention not to use the Smog

Burner. AMF admits that by the end of 1964, the size of

the market for 1966 model year cars could be estimated

with reasonable accuracy. AMF had been counting on

this one year model market to establish its product;

without it the Smog Burner project in late 1964 was

being phased out. Appellees are accused of an absolute

exclusion of AMF. No difficulties with projecting market

share existed in late 1964 that do not exist today. We

hold, therefore, that the undisputed facts establish that

nw) ttn TE Sa = mw

15a

the fact of injury to AMF was certain prior to January

10, 1965, and that the extent of such damage was neither

too speculative nor its amount or nature unprovable.

This being the case, without regard to the other issues

raised on appeal, this action is barred by 15 U.S.C. § 15b

and the district court properly entered judgment for

appellees.

AF FIRMED.

16a

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

No. 76-1648

April 18, 1979

In re:

MULTIDISTRICT VEHICLE AIR POLLUTION

AMF, INCORPORATED,

Plaintiff-Appellant,

v.

GENERAL MOTORS CORPORATION, FORD

MOTOR COMPANY, CHRYSLER CORPORATION,

AMERICAN MOTORS CORPORATION and

AUTOMOBILE MANUFACTURERS

ASSOCIATION, INC.,

Defendants -Appellees.

ORDER

Before: SNEED and HUG, Circuit Judges, and EAST,*

District Judge.

The panel as constituted in the above case has voted to

deny the petition for rehearing. Judges Sneed and Hug

have voted to reject the suggestion for a rehearing en

banc, and Judge East has recommended rejection of the

suggestion for rehearing en banc.

*Hon. William G. East, Senior United States District Judge, for

the District of Oregon, sitting by designation.

6 TSAR hoe Oe i ee Ves

tein ste NS

l7a

The full court has been advised of the suggestion for en

banc rehearing, and no judge of the court has requested

a vote on the suggestion for rehearing en banc. Fed. R.

App. P. 35(b).

The petition for rehearing is denied and the suggestion

for a rehearing en banc is rejected.