Opposition Brief — Bayshore Ford Truck Sales, Inc. v. Ford Motor Co. (No. 08-1186)
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\WY (D) No. 08-1186 APR 17 2009
OFFICE OF THE CLERK
3un The
Supreme Court of the United States
BAYSHORE FORD TRUCK SALES, INC.,
PEACH STATE FORD TRUCK SALES, INC.,
LJL TRUCK CENTER, INC.,
VALLEY FORD TRUCK SALES, INC.,
AND HEINTZELMAN’S TRUCK CENTER, INC.,
Petitioners,
v.
FORD MOTOR COMPANY,
Respondent.
€
On Petition For Writ Of Certiorari
To The United States Court Of Appeals
For The Eleventh Circuit
¢
OPPOSITION TO PETITION
FOR WRIT OF CERTIORARI
*
JAMES C. WINTON f°
(Counsel of Record)
BILLY M. DONLEY
DAVID R. JARRETT
BAKER & HOSTETLER, LLP
1000 Louisiana Street, Suite 2000
Houston, Texas 77002
Tel: (713) 646-1304
Fax: (713) 751-1717
Attorneys for Respondent
COCKLE LAW BRIEF PRINTING CO (800) 225-6964
OR CALL COLLECT (402) 342-2831
QUESTIONS PRESENTED
The Writ Petition presents the following issues:
1. Should the Court grant a writ of certiorari to
review the decision of the Eleventh Circuit that
correctly applies 28 U.S.C. § 1367(c)(3) in accordance
with the precedence of this Court and the other
Circuit Courts?
2. Should this Court grant a writ of certiorari
to review settled case law interpreting 28 U.S.C.
§ 1367(c)(3)?
ll
PARTIES TO THE PROCEEDING
AND CORPORATE DISCLOSURE
STATEMENT PURSUANT TO RULE 29.6
PETITIONERS
Bayshore Ford Truck Sales, Inc.
Peach State Ford Truck Sales, Inc.
LJL Truck Center, Inc.
Valley Ford Truck Sales, Inc.
Heintzelman’s Truck Center, Inc.
All Petitioners are represented by:
James A. Pikl
Scheef & Stone, LLP
2601 Network Blvd., Suite 102
Frisco, Texas 75034
Telephone: (214) 472-2100
Wade Tomlinson
Pope, McGlamry, Kilpatrick,
Morrison & Norwood, LLP
1111 Bay Avenue, Suite 450
Columbus, Georgia 31902
Telephone: (706) 324-0050
ll
PARTIES TO THE PROCEEDING
AND CORPORATE DISCLOSURE
STATEMENT PURSUANT
TO RULE 29.6 — Continued
RESPONDENT
Ford Motor Company
Pursuant to SEC filings, Ford has been notified that
as of December 31, 2008, the following entities had a
5% or greater ownership interest of Ford common
stock, or owned securities convertible into more than
5% ownership of Ford common stock, or owned a
combination of Ford common stock and securities
convertible into Ford common stock that could result
in more than 5% ownership of Ford common stock:
Bank of America Corporation, 100 North Tryon
Street, Floor 25, Bank of America Corporate Center,
Charlotte, North Carolina 28255, and certain affili-
ates, owned 332,320,307 shares of common stock
(15.91%), including 315,505,881 shares deemed
owned by Bank of America, N.A., by virtue of one of
its affiliate’s status as investment manager under
Ford’s 401(k) plans. —
Respondent is represented by:
James C. Winton (Counsel of Record)
Billy M. Donley
David R. Jarrett
Baker & Hostetler, LLP
1000 Louisiana, Suite 2000
Houston, Texas 77002-5009
(713) 646-1304
TABLE OF CONTENTS
QUESTIONS PRESENTED
PARTIES TO THE PROCEEDING AND COR-
PORATE DISCLOSURE STATEMENT PUR-
ISTE BAP BORA WO Wec cinescnnreisivsctsinvessensssvevsenses
I. COUNTERSTATEMENT OF THE CASE ..
Il. COUNTERSTATEMENT OF FACTS
A. Jurisdictional Facts
B. Counterstatement of Background Facts....
C. Counterstatement of Procedural History...
THE PETITION FOR WRIT OF CERTI-
ORARI SHOULD BE DENIED
A. The Eleventh Circuit Correctly Ruled
that the District Court Retains the
Discretion to Exercise Supplemental
Jurisdiction Following an Involuntary
Dismissal on the Merits of One or
More Federal Claims
1. This Court’s Rockwell Decision Has
Nothing to Do with The Case Before
As Recognized by the Eleventh Cir-
cuit, this Case Has Nothing to Do
with Pintando
There Has Been No Voluntary Eli-
mination of the Federal Claims by
Amendment
TABLE OF CONTENTS — Continued
Page
4. The District Court Retained Sup-
plemental Jurisdiction Following the
20
a. The Eleventh Circuit’s Decision is
Entirely in Accord with the Juri-
sprudence Interpreting § 1367(c)....
Even if Petitioners Had Amended
to Eliminate the ADDCA Claim
Following the District Court’s
Involuntary Dismissal of that
Claim, it Would Make Absolutely
No Difference
THE ADDCA CLAIM WAS NOT DIS-
MISSED FOR LACK OF SUBJECT MAT-
TER JURISDICTION 27
A. Ford’s Motion to Dismiss Was a Motion
to Dismiss on the Merits 27
B. Petitioners’ ADDCA Claim Was Not In-
substantial 34
SECTION 1367(c\(3) REQUIRES NO NOV-
EL INTERPRETATION .................cccccssseseess 35
CONCLUSION
TABLE OF CONTENTS — Continued
Page
APPENDIX
Complaint and Petition for Class Action filed
i ainsi nengutaesesnsee<nicasoorsaven Resp. App. 1-8
Second Amended Complaint and Petition for Class
Action filed October 21, 1999............ Resp. App. 9-17
Third Amended Complaint and Petition for Class
Action filed December 6, 2002........ Resp. App. 18-26
Plaintiffs’ Third Amended Responses to Mandatory
Disclosures filed May 12, 2003....... Resp. App. 27-34
October 22, 2007 District Court Order request-
ING PertANdO DTICTING ........00rcesccosesseeeees Resp. App. 35
Rule 12(b)(6) Motion of Ford Motor Company to
Dismiss Plaintiffs’ Second Amended Com-
plaint and Petition for Class Action filed No-
I Oh scnsscserescsicssscssnasscnesess Resp. App. 36-38
Memorandum of Law of Ford Motor Company
In Support of Its Motion to Dismiss the
Plaintiffs’ Second Amended Complaint and
Petition for Class Action filed November 8,
a Rls idee swe nesawisen keris Resp. App. 39-55
Plaintiffs’ Response to Ford’s Motion to Dismiss
filed November 26, 1999 ................. Resp. App. 56-73
vii
TABLE OF CONTENTS — Continued
Page
February 2, 2000 Memorandum from Judge
Vining correcting typographical error in the
District Court’s Order dated January 19,
2000 and corrected version of District Court’s
Order Granting Ford’s Motion to Dismiss the
Plaintiffs’ Dealers’ Day In Court Act Claims
and Denying Ford’s Motion to Dismiss the
Plaintiffs’ Breach of Contract and Robinson-
POCA BG CIAIIIG 5a seccincescocsseressees Resp. App. 74-90
January 22, 2003 District Court Consent Order
Stipulating That The Third Amended Com-
plaint Does Not Revive Plaintiffs’ Dealer Day
In Court Act Claims. ...........cccccosessoss Resp. App. 91-94
Appellees’ Brief filed July 18, 2008 in the U.S.
Court of Appeals for the Eleventh Circuit —
Docket No. 08-12587-JJ................ Resp. App. 95-100
vill
TABLE OF AUTHORITIES
Page
FEDERAL CASES
Arbaugh v. Y & H Corp., 546 U.S. 500 (2006) .... passim
Bayshore Ford Truck Sales, Inc. v. Ford Motor
Co., 380 F.3d 1331 (11th Cir. 2004) 6, 10, 11, 12
Bayshore Ford Truck Sales, Inc. v. Ford Motor
Company, No. 08-12587 (llth Cir. Nov. 10,
Blazer v. Black, 196 F.2d 139 (10th Cir. 1952)
Cabriolet Porsche Audi, Inc. v. American Hon-
da Motor Co., 773 F.2d 1193 (11th Cir. 1985)
Capital Ford Truck Sales, Inc. v. Ford Motor
Company, 819 F.Supp. 1555 (N.D. Ga. 1992)
Carnegie-Mellon University v. Cohill, 484 U.S.
343 (1988)
Connelly v. Balkwill, 174 F.Supp. 49 (N.D. Ohio
Dunn v. Airline Pilots Association, 193 F.3d
1185 (11th Cir. 1999)
Evans v. City of Marlin, Tex., 986 F.2d 104 (5th
Cir. 1993) 23, 27, 36
Federated Department Stores, Inc. v. Moitie,
452 U.S. 394, 101 S. Ct. 2424 (1981)
In re Ford Motor Co., 471 F.3d 1233 (11th Cir.
6, 10, 14, 15
Gary v. Washington Metropolitan Area Transit
Autnority, SIS UB. 171 (IGSS) ...ccccccscscecsosccasseneces 23
ix
TABLE OF AUTHORITIES — Continued
Gary v. Long, 59 F.3d 1391 (D.C. Cir. 1995),
cert. den., 516 U.S. 1011 (1995)
Harris v. Blue Cross/Blue Shield of Alabama,
Inc., 951 F.2d 325 (11th Cir. 1992)
Hicks v. Quaker Oats, 662 F.2d 1158 (5th Cir.
Land v. Dollar, 330 U.S. 731 (1947)
Lewis Service Center, Inc. v. Mack Trucks, Inc.,
714 F.2d 842 (8th Cir. 1983)
NAACP v. Hunt, 891 F.2d 1555 (11th Cir. 1990)
Noble v. White, 996 F.2d 797 (5th Cir. 1993)
Osborn v. Bank of United States, 22 U.S. (9
Wheat.) 738, 6 L.Ed. 204 (1824)
Osborn v. Haley, 549 U.S. 225 (2007) 2, 16, 22
Palmer Hospital Authority, 22 F.3d 1559 (11th
Cir. 1994)
Pintando v. Miami-Dade Housing Agency, 501
F.3d 1241 (11th Cir. 2007) passim
Purgess v. Sharrock, 33 F.3d 134 (2nd Cir.
|S) Beer reo 9 Oe 23
River Oaks Motor Homes, Inc. v. Winnebago
Industrial, Inc., 371 F.Supp. 137 (S.D. Tex.
Rockwell International Corp. v. United States,
549 U.S. 457 (2007) passim
Rosada v. Wyman, 397 U.S. 397 (1970)........... 2, 16, 22
x
TABLE OF AUTHORITIES — Continued
Stadium Chrysler Jeep, L.L.C. v. Daimlerchrys-
ler Motors Company LLC, 324 F.Supp. 2d
587594 (D. N.J. 2004)
Steel Co. v. Citizens for a Better Environment,
523 U.S. 83 (1998)
Transwitch Corp. v. Galazar Networks, Inc.,
377 F.Supp. 2d 284 (D. Mass. 2005)
Varnes v. Local 91, Glass Bottle Blowers, 674
F.2d 1365 (11th Cir. 1982)
Wilson v. First Houston Investment Corp., 566
F.2d 1235 (5th Cir. 1978)
STATE CASES
Ford Motor Company v. Metropolitan Ford
Truck Sales, Inc., 1999 WL 1126280
(Tex.App.-Dallas)
Metro Ford Truck Sales, Inc. v. Ford Motor
Company, 1997 WL 671323 (Oct. 20, 1997),
aff'd, 145 F.3d 320 (5th Cir. 1998)
DOCKETED CASES
U.S. Fawcetts, Inc. v. Home Depot USA, Inc.,
No. 1:03-CV-1572-WSD
Xl
TABLE OF AUTHORITIES — Continued
Page
ARTICLE OF THE U.S. CONSTITUTION
i A a ac 21, 22
FEDERAL STATUTES
ee cou asus ansnniolabertuebiocnicalal 3, 29
Nt I dso ccachnnckiondhsspanmbeneie ineowonsduumentnial 29
IE OE I onc nnscukbsdadesovadeideieanieiprbonebethennennall 28
a cs alasausunaseuseveuebanpenel 2, 29
Be are © BT vevaneccceeviveccssecencest sessnaasendigeuanemaleddla 3
ee SU, Sr I oc coc adansennenscbannibtawbonianios passim
Se he Ae Oe IND ieniicetsedstvaccsesnnanoindocsranansrancines 17
Automobile Dealers’ Day in Court Act, 15
re te ie Oe OI aca icin cxesnnieréschocevernsesinccsevs passim
False Claims Act, 31 U.S.C. § 3730(e)(4)............. 16, 17
Investment Advisers Act of 1940, 15 U.S.C.
TEE Tics ulcdnisebaccousenssakavewatandahilaviecston 25, 26
Robinson-Patman Act, 15 U.S.C. § 15, et seq. ...passim
Rule 10b-5, 17 C.F.R. § 240.10b-5...................0.. 25, 26
Ree Vie, SS UA. B BOD cccvccesccccsccsscvaccccsecess: 29
RULES
SPURNS TIONING TRI Be ce snce css ciiccessscsccensssccnecseccsonsees 10
Fete Se Ws IP acstvnnachndcesneccesceskneeseecees 15, 27, 28
xii
TABLE OF AUTHORITIES — Continued
Page
Ps ie Te a. RI senksintevsensesincessersivesssvectonnes passim
Ps ey a Be ee aatincbndendeedavcnveconsiuserseséas 12, 14, 15
SECONDARY SOURCES
16 MOORE’S FEDERAL PRACTICE (3d ed.)
ee OD dis scckcavsdntciedearsudénesateivucneciensens 31. 23
Wright, Miller and Cane, 6 Federal Practice
and Procedure, Civil 2d § 1476 (2009) ............. 24, 25
I. COUNTERSTATEMENT OF THE CASE
The Petition arises from a case that has been
pending in the Northern District of Georgia for over
ten years. This case that has now been to the Ele-
venth Circuit Court of Appeals three times since the
District Court dismissed Petitioners’ federal Automo-
bile Dealers’ Day in Court Act claim which is the
fulcrum of the court’s jurisdiction. Here, Petitioners
invite this Court to embark on a journey based on a
completely distorted statement of the case which
culminates in a suggestion that the Court rewrite the
jurisprudence of supplemental jurisdiction.
While Petitioners at one point acknowledge that
one of their federal claims was “dismissed by the
District Court”, that sotto voce admission is virtually
drowned out by the repeated spin they otherwise put
on the dismissal, incorrectly stating that “all federal
claims were eliminated from the case by amended
pleading.””» As observed by the Eleventh Circuit
below:
After the [district] court involuntarily dis-
missed plaintiffs’ claims under the Automo-
bile Dealer Day in Court Act, the fact that
plaintiffs, in their amended complaint, vol-
untarily deleted the claims brought under
the Robinson-Patman Act, did not preclude
the court from continuing to exercise its
' See Petition at i (twice); 6; 10 at footnote 5; 12; 14; and 16.
While Petitioners use varying formats of that statement, it is a
theme repeated throughout the petition.
2
supplemental jurisdiction over plaintiffs’ state
law claims. ... (Emphasis in original) (App.
3)
That decision of the Circuit Court was fully in
accord with § 1367(c)(3) as recognized by this Court’s
decisions in Osborn v. Haley, 549 U.S. 225, 245
(2007); Arbaugh v. Y & H Corp., 546 U.S. 500, 514
(2006); Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343,
350-51 (1988); and Rosada v. Wyman, 397 U.S. 397,
403-05 (1970).
This case is not controlled by either Rockwell
Intl Corp. v. United States, 549 U.S. 457 (2007) or
Pintando v. Miami-Dade Housing Agency, 501 F.3d
1241 (11th Cir. 2007) as argued by Petitioners.
The petition should be denied.
Il. COUNTERSTATEMENT OF FACTS
A. Jurisdictional Facts
Petitioners repeatedly state that all federal
claims were “eliminated from the case by amended
pleading”, or words to that effect. That characteriza-
tion of the dismissal of the key jurisdictional claim is
simply false. The facts as related to this petition are
as follows:
Petitioners filed suit in July 1999, invoking
the District Court’s original jurisdiction under 28
U.S.C. § 1331, asserting claims under the Automobile
3
Dealers’ Day in Court Act, 15 U.S.C. § 1221, et seq.
(“‘ADDCA”)’, and the Robinson-Patman Act, 15 U.S.C.
§ 15, et seg. (“RPA”). They also invoked the District
Court’s supplemental jurisdiction under 28 U.S.C.
§ 1367(a) over state breach of contract claims. (See
Complaint and Petition for Class Action, Resp. App.
1-8)°
In January 2000, the District Court granted Ford
Motor Company’s (“Ford”) motion to dismiss the
ADDCA claim contained in the Second Amended
Complaint and Petition for Class Action (Resp. App.
74-90) for failure to state a claim based on its conclu-
sion that as a matter of law, the facts that Petitioners
had alleged as “coercion”, did not constitute such
under the Act.
In December 2002, Petitioners were granted
leave without opposition to file a Third Amended
Complaint and Petition for Class Action (“Third
Amended Complaint”). There they voluntarily deleted
* While the title of the Act refers to “Automobiles”, the term
is broadly defined to include trucks. 15 U.S.C. § 1221(a). See,
e.g., River Oaks Motor Homes, Inc. v. Winnebago Indus., Inc., 371
F.Supp. 137 (S.D. Tex. 1974) (defining “truck” as a “self-
propelled motor vehicle designed primanily to haul freight or
cargo” as covered under the Act).
> Respondent cites to the appendix attached to Petitioners’
brief as “(App. ___)”. Citations to supplemental appendix
materials attached hereto by Respondent are cited as “(Resp.
App. ___)”. Those materials for the most part contain only
relevant pages in order to reduce the bulk of the appendix.
4
the RPA claim but realleged the ADDCA claim. (Resp.
App. 18-26)*
Shortly after Petitioners filed their Third
Amended Complaint, the District Court contacted the
parties to inquire whether the ADDCA claim had
been left in the complaint in an attempt to revive it.”
In January 2003, the District Court entered an
agreed order which stated that: “Plaintiffs’ Dealer
Day in Court Act claims are dismissed and remain
dismissed by operation of the Court’s January
10, 2000 Order and are not revived and were not
intended by any party to be revived by the subse-
quent filing of the Thing Amended Complaint”. (Em-
phasis added) (Resp. App. 91-94)
Petitioners state that it was “agreed” that the
ADDCA claim was left in the Third Amended Com-
plaint as a result of a “scrivener’s error”. (Petition at
8, n. 3) Although the District Court made such an
observation in its January 22, 2008, dismissal order,
nowhere in the agreed order does it state that Ford
“agreed” that the ADDCA claim had been left in the
* Petitioners attached a version of the Court’s order that
contains a critical typographical error, later corrected by the
District Court. Respondent has attached the corrected version of
the order. (Resp. App. 74-90)
* The inquiry by the District Court came in a telephone call
to counsel during a deposition. Thus, there is no document of
record regarding the “inquiry”, other than the resultant stipula-
tion.
5
complaint as a result of a “scrivener’s error”.’ In fact,
in their Third Amended Responses to Mandatory
Disclosures, filed May 12, 2003, after they submit-
ted the agreed order, Petitioners made it clear that
the ADDCA claim had been left in the Third Amended
Complaint intentionally in order to preserve the issue
for appeal. (Resp. App. 27-34) There they stated:
“Given that the Dealer Day in Court Act claims have
been dismissed from the case at present, they will
only be adjudicated following appeal and remand of
the claims by the appellate court, where necessary.”
(Emphasis added) (Resp. App. 30) Following the
voluntary dismissal of the RPA claim, the District
Court asked for briefing by the parties regarding the
court’s continuing exercise of jurisdiction over the
remaining state breach of contract claim. The District
Court determined to retain jurisdiction. (Resp. App.
74-90)
In May 2003, the District Court granted Ford’s
motion for summary judgment on the remaining
breach of contract claim. Plaintiffs appealed that
summary judgment but did not appeal the dismissal
* Petition at 8, n. 3. The “scrivener’s error” comment came
from the District Court.in its order dismissing the case under
Rockwell and Pintando. (App. 11-14 and App. 13 n. 1) Petition-
ers’ assertion at footnote 3 of the Petition that such characteri-
zation by the District Court is the “procedural law of the case”
for purposes of this petition, is nonsense. As quoted above, the
Eleventh Circuit, in reversing the dismissal, found that “the
(district) court involuntarily dismissed plaintiffs’ claims under
the Automobile Dealer Day In Court Act... .” (App. 5)
6
of the ADDCA claim. The Eleventh Circuit affirmed
the summary judgment in part and reversed in part,
remanding the case to the District Court for further
proceedings. Bayshore Ford Truck Sales, Inc. v. Ford
Motor Co., 380 F.3d 1340 (11th Cir. 2004) (Bayshore
I).
In 2005, the case was back before the Eleventh
Circuit on a petition for writ of mandamus by the
Dealers challenging the injunction issued by the
District Court to enforce its denial of class certifica-
tion and seeking review of the denial of their Rule
41(a)(2) motion to dismiss. The Eleventh Circuit
reversed the injunction but denied the writ petition
as to the Rule 41(a)(2) dismissal. In re Ford Motor
Co., 471 F.3d 1233 (11th Cir. 2006).
Following the second remand, in 2007 the Dis-
trict Court called for briefs on the question of whether
it was compelled to dismiss the case based on the
Eleventh Circuit’s decision in Pintando v. Miamui-
Dade Housing Agency, 501 F.3d 1241 (11th Cir. 2007).
(Resp. App. 35) The parties briefed the issue and the
District Court issued an order stating that: “Pintan-
do, relying on Rockwell [citation omitted] held that
when a complaint asserting federal question jurisdic-
tion, and which contains both federal and state
claims, is amended to delete the federal claim, such
amendment destroys jurisdiction and [|] the com-
plaint had to be dismissed.” The District Court went
on to state that “The Eleventh Circuit specifically
held that if the federal claim is dismissed by the
plaintiff through the filing of a subsequent complaint,
7
that subsequent complaint supersedes the original
complaint.” (App. 12-13) Because the District Court
found that the ADDCA claim had been left in the
Third Amended Complaint as the result of a “scriven-
er’s error”, it found that the ADDCA claim had been
deleted from the complaint and that it was bound by
Rockwell and Pintando to dismiss for lack of subject
matter jurisdiction. (App. 10-14) That is, the District
Court found that because Petitioners amended to
delete the already dismissed ADDCA claim, along
with the RPA claim, that amendment divested the
District Court of any discretion to exercise supple-
mental jurisdiction over the remaining state law
claim. “[S]ince the amended complaint contains only
state law claims and since the parties are not diverse,
the court lacks subject matter jurisdiction.” (App. 14)
The District Court did not do so as an exercise of its
§ 1367(c) discretion but because, as it read Rockwell
and Pintando, it had no other choice:
Because of the extremely large amount of
time and money that the parties have ex-
pended in this litigation, the court regrets
that the action must be terminated with no
adjudication on the merits. However, the
court has no choice, since the law is clear
that a court may not adjudicate a case over
which it does not have subject matter juris-
diction.
(Emphasis added) (App. 14)
Ford moved to alter or amend the judgment,
noting among other things that there had been no
8
“scrivener’s error” and that the involuntary dismissal
controlled. The District Court responded to this
motion with an order stating that: “Regardless of how
the inclusion of the Dealer Day in Court claim is
characterized, it is clear that such inclusion was
erroneous and was of no legal effect whatsoever. ...
The Court finds the reasoning of [Rockwell and Pin-
tando] to be applicable to the instant case.” (App. 8-9)
The District Court concluded that Rockwell and
Pintando represented a change in the law of supple-
mental jurisdiction and thus the prior jurisprudence
was no longer binding: “Those cases change the law
with respect to a district courts [sic] ability to exer-
cise supplemental jurisdiction in certain circums-
tances.” (App. 8)
On Ford’s appeal of the dismissal, the Eleventh
Circuit found that the dismissal of the ADDCA claim
was in fact involuntary and that the District Court
retained discretion to exercise supplemental jurisdic-
tion thereafter:
After the [district] court involuntarily dis-
missed plaintiffs’ claims under the Automo-
bile Dealer Day in Court Act, the fact that
plaintiffs, in their amended complaint, vol-
untarily deleted the claims brought under
the Robinson-Patman Act, did not preclude
the court from continuing to exercise its
supplemental jurisdiction over plaintiffs’
state law claims.... (Emphasis in original)
(App. 5)
9
The district court properly exercised its sup-
plemental jurisdiction after involuntarily
dismissing plaintiffs’ claims under the Auto-
mobile Dealers’ Day in Court Act. The fact
that the plaintiffs’ amended complaint did
not contain their Robinson-Patman Act claims
did not oust the court of supplemental juris-
diction... .
(App. 6)
Moreover, with regard to the question of a “scri-
vener’s error”, the Circuit Court treated that issue as
of no significance, observing:
We could not say that the court lost its sub-
ject matter jurisdiction once it dismissed the
federal claim. Take the scenario one step fur-
ther and suppose that the court, after an-
nouncing that it was retaining jurisdiction,
allows the plaintiff to amend its complaint to
restate the state law claim. Would this de-
stroy the court’s jurisdiction? We think not.
That is in effect what occurred here. ...
(App. 5)
Petitioners have sought a writ of certiorari to
review the holding of the Eleventh Circuit and to
adopt a novel interpretation of § 1367(c) supplemen-
tal jurisdiction.
B. Counterstatement of Background Facts
While for the most part, Petitioners’ “Factual
History” and “Procedural History” are irrelevant to
10
the issues for which they seek review by this Court,
Respondent will note the misstatements as required
by Revised Rule 15.2.’
While Petitioners contend that the Sales and
Service Agreement (“Agreement”) at issue herein
requires that Ford sell its medium and heavy trucks
to its dealers “only at ‘published’ prices and dis-
counts”, to represent such as a “fact” is entirely
misleading.” (Petition at 7) The Agreement does not
’ The factual disputes underlying the complaint and Ford’s
responses thereto are outlined in detail in the Eleventh Circuit’s
opinions found at Bayshore Ford Truck Sales, Inc. v. Ford Motor
Co., 380 F.3d 1331 (llth Cir. 2004) (Bayshore IT, while the
relevant procedural history of the case is outlined at In re Ford
Motor Co., 471 F.3d 1233, 1236-45 (11th Cir. 2006) (Bayshore ITI).
* Petitioners have misrepresented to several courts that a
binding summary judgment was entered against Ford on this
issue in a prior action in Texas state court. While a summary
judgment was entered and the damages case tried on that
summary judgment, the jury returned a verdict of “no damages”.
On cross-appeals of tle zero damage award by plaintiff and of
the summary judgment by Ford, the Dallas Court of Appeals
noted: “[WJe now turn to whether the trial court erred in
granting [plaintiff’s] motion for partial summary judgment on
this cause of action. However, we must address Ford’s contention
that the trial court erred in this respect only if we conclude there
is reversible error in connection with the jury’s zero damage
award. In other words, if the record reveals the zero damage
award was appropriate, any trial court error in granting the
summary judgment on liability would be harmless. Accordingly,
we begin our review with [plaintiff’s] challenge to the jury
finding on damages”. Ford Motor Company v. Metro Ford Truck
Sales, Inc., 1999 WL 1126280, *5 (Tex.App.-Dallas). The Court of
Appeals affirmed the jury’s zero damage award, and never
reached the summary judgment. /d., at *6. Therefore, because
(Continued on following page)
11
say that Ford will sell its trucks to its dealers only at
published prices, and Ford denies that such is or ever
was the understanding of the parties. Moreover, the
Eleventh Circuit, in reversing the summary judgment
previously entered for Ford on the interpretation of
the contract, held that Ford’s interpretation of the
contract was not the only reasonable interpretation.
Bayshore I, 380 F.3d at 1336.
Again, the statement that the Dealers were
“required” to use Ford’s Competitive Price Assistance
Program (“CPA Program”), that Ford set its wholesale
delivered prices higher than those at which the
Dealers could resell the trucks, or that they “had” to
use the CPA Program (Petition at 7), are all allega-
tions, not “facts”. To the contrary, in the Bayshore I
opinion, in finding that the Sales and Service Agree-
ment was not a contract of adhesion, the Eleventh
Circuit observed that:
[Gliven the facts before us, we cannot see
how these franchise dealership contracts
could be considered contracts of adhesion. .
The facts do not suggest ... that the Dealers
lacked bargaining power or economic strength
of their own. For example, there is no evi-
dence that the Dealers would not have been
able to secure dealerships from competitor
the appellate court did not reach the summary judgment, there
was no finality, rendering it moot. Hicks v. Quaker Oats, 662
F.2d 1158, 1168 (5th Cir. 1981).
12
truck manufacturers.... Further buttress-
ing this conclusion are the Dealers’ descrip-
tions of themselves as very successful
commercial enterprises with nationwide
markets and customer bases.
Bayshore I, 380 F.3d at 1338, n. 7.
Ford has no idea to whom Petitioners refer in
making their statement that “according to experts in
economics, Ford’s CPA program allowed Ford to
appropriate all or most of the consumer surplus from
the dealer’s retail sales....” as there has been no
such “expert” testimony in this case or any other of
which counsel is aware. in fact, in ruling on Ford's
motion for summary judgment on Metro Ford Truck
Sales’ Sherman Act antitrust claim, the United States
District Court for the Northern District of Texas held
that:
Metro was free to decide its own
price.... Ford set only wholesale prices,
which it is legally entitled to do. [citations
omitted] Ford’s CPA program is actually pro-
competitive. The effect of the discount pro-
gram is to lower retail prices to customers
and increase interbrand competition. . .
Metro Ford Truck Sales, Inc. v. Ford Motor Company,
1997 WL 671323, at *4 (Oct. 20, 1997), aff’d, 145 F.3d
320 (5th Cir. 1998).
’ (Petition at 7)
13
Contrary to Petitioners’ assertion, Ford did not
set its wholesale price or use its CPA program in
order to limit, nor in fact did it limit, the Dealers’
profit to between $0 and 2% at any other level. (Peti-
tion at 7) Again, Petitioners confuse allegations with
“facts”. The Dealers were in control of their own sales
of trucks to customers and the prices at which they
did so. Discovery demonstrates that the Dealers
routinely sold trucks at prices well in excess of the
“street price” at which they represented to Ford they
would be selling the trucks to their customers.. Ford
was not the only manufacturer which utilized a
wholesale price adjusting mechanism to respond to
competition from other manufacturers. As noted by
the District Court in Metro, the Eighth Circuit found
in Lewis Service Center, Inc. v. Mack Trucks, Inc., 714
F.2d 842, 845-46 (8th Cir. 1983), that Mack did not
engage in vertical price fixing pursuant to its sales
assistance program, which provided wholesale dis-
counts for dealers so that they could meet retail price
competition. Metro, 1997 WL 671323 at *4.
Ford misappropriated nothing from the Dealers.
(Petition at 7) The CPA Program was designed to help
the Dealers respond to competition from other truck
manufacturers. The reduction in wholesale price to
the Dealers was intended to be passed along to the
consumer. Petitioners seek an after-the-fact reduction
in wholesale prices in order to increase their own
profits at the expense of both Ford and the consumer.
14
C. Counterstatement of Procedural History
The misstatement that all federal claims were
eliminated by amendment has been addressed above.
Petitioners’ statement that the certification of the
class by the Ohio Court of Common Pleas was “af-
firmed all the way to the Ohio Supreme Court” is
incorrect. (Petition at 10) The Ohio Court of Appeals
affirmed the certification order but the Ohio Supreme
Court simply denied Ford’s petition for review of that
decision, an outcome that falls far short of being
affirmed by the Supreme Court. Connelly v. Balkwill,
174 F.Supp. 49, 60, 11 Ohio Op. 2d 289, 83 Ohio L.
Abs. 513 (N.D. Ohio 1959), aff’d, 279 F.2d 685 (6th
Cir. 1960) (Ohio Supreme Court’s denial of motion to
certify is no more than an indication that the court
does not consider controversy one of public or great
general interest).
Petitioners’ discussion of their efforts to have this
case dismissed under Rule 41(a)(2) are both irrele-
vant and misleading. In their recitation of their
several Rule 41(a)(2) motions to dismiss, they assert
that the Circuit Court did not reach their Due Process
argument for dismissal. (Petition at 11, n. 6) That is
not entirely accurate. In Bayshore II, 471 F.3d at
1259, in addressing Petitioners’ argument that judi-
cial economy somehow compelled reversal of the
District Court’s denial of their Rule 41(a)(2) motion,
the Circuit Court reviewed the time the District
Court had invested in this case, and concluded that
“judicial economy points us in a direction wholly
15
contrary to the Dealers’ position.” The Circuit Court
went on to observe that Petitioners had no “right” toa
dismissal, that Rule 41(a)(2) exists chiefly to protect
defendants, that based on the record, the denial by
the trial court “was not, and could not have consti-
tuted, an abuse of discretion.” Id.
As to the statement that “[t]he Eleventh Circuit
did not reach the Due Process argument the dealers
made for final dismissal”, what the Circuit Court said
was that having found that the District Court lacked
the authority to enjoin the Dealers from participating
in the Westgate” litigation, that “they [were] free to
do so.” Bayshore II, 471 F.3d at 1258. Thus, the Court
noted that it “need not consider whether the Due
Process Clause of the Fifth Amendment grants them
a substantive right to litigate their claims in an Ohio
state court.” However, the Court went on and found
that the Dealers had no “clear and indisputable right”
to a Rule 41(a)(2) dismissal because, among other
things, they retain adequate alternative relief. Jd. at
1259.
Petitioners also assert that the District Court’s
Rule 12(b)\(6) dismissal of their ADDCA claim was
really a dismissal for lack of subject matter jurisdic-
tion under Rule 12(b)(1)." That misstatement is
addressed in detail below.
"° No. CV 02 483526; Westgate Ford Trucks Sales, Inc. v.
Ford Motor Company; In the Court of Common Pleas, Cuyahoga
County, Ohio. Referenced by Petitioners.
’ Petition at 23
16
Ill. THE PETITION FOR WRIT OF CERTI-
ORARI SHOULD BE DENIED
A. The Eleventh Circuit Correctly Ruled
that the District Court Retains the Dis-
cretion to Exercise Supplemental Ju-
risdiction Following an Involuntary
Dismissal on the Merits of One or More
Federal Claims
1. This Court’s Rockwell Decision Has
Nothing to Do with The Case Before
it Here
Petitioners’ reliance on this Court’s decision in
Rockwell Int'l Corp. v. United States, 549 U.S. 457
(2007) for the proposition that dismissal is mandated
is misplaced. This case is governed not by Rockwell,
which is an original jurisdiction case, but by the
discretionary exercise of supplemental jurisdiction
under § 1367(c)(3) as recognized in this Court’s deci-
sions in Osborn v. Haley, 549 U.S. 225, 244-45 (2007);
Arbaugh v. Y & H Corp., 546 U.S. 500, 514 (2006);
Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350-51
(1988); and Rosado v. Wyman, 397 U.S. 397, 403-05
(1970).
Petitioners cite Rockwell for the proposition that
where federa! claims have been dismissed from a case
via amended complaint, subject matter jurisdiction is
lost. Petitioners overreach the holding in that case.
Rockwell was a qui tam action arising under the
Federal False Claims Act (“FCA”) in which plaintiff
sought to establish status as an “orginal source”.
17
This Court discussed at length the subject matter
jurisdictional significance of the qui tam plaintiff’s
standing as the “original source” of the claims at
issue, finding that requirement to be a matter of subject
matter jurisdiction under 31 U.S.C. § 3730(e)(4)(A).
Rockwell, 549 U.S. at 467-68. (“Here the jurisdiction-
al nature of the original-source requirement is clear
ex visceribus verborum.”).
In Rockwell, Plaintiff Stone originally alleged
facts that supported his status as an “original
source”. 549 U.S. 457, 463-64. Later, after the United
States had intervened as a plaintiff, the government
and Stone jointly filed an amended complaint which
deleted those factual allegations and substituted
others which did not involve Stone as the “original
source”. Id. at 464-65. The voluntary amendment
deleted the allegations upon which subject matter
jurisdiction over Stone’s claim was dependent and
these amended allegations were incorporated in the
pretrial order. Jd. at 465, 474. In that context,
this Court held that the amended complaint and
pretrial order superseded the original complaint and
that the deletion of the requisite jurisdictional allega-
tions deprived the federal courts of subject matter
jurisdiction under the False Claims Act, 31 U.S.C.
§ 3730(e)(4). Ud.)
The key to the Rockwell decision is the observa-
tion by this Court that, “[DJemonstration that the
original allegations were false will defeat jurisdiction.
[citations omitted] So also will the withdrawal of
those allegations, unless they are replaced by others
18
that establish jurisdiction.” Jd. at 473. Disproof of
jurisdictional allegations or, as occurred in Rockwell,
amendment to remove them, is quite different from
the granting of a motion to dismiss under Rule
12(b)(6). The amendment of the jurisdictional factual
allegations as occurred in Rockwell supersedes the
original jurisdictional allegations, leaving the District
Court with no allegations on which to base subject
matter jurisdiction ab initio.
Thus, Rockwell deals with the jurisdictional
consequences of a plaintiff who voluntarily pleads
away the factual allegations that give rise to original
jurisdiction. Rockwell had nothing whatsoever to do
with § 1367(c\3) supplemental jurisdiction.
2. As Recognized by the Eleventh Cir-
cuit, this Case Has Nothing to Do
with Pintando
The Eleventh Circuit’s decision in Pintando uv.
Miami-Dade Housing Agency, 501 F.3d 1241 (11th
Cir. 2007) cited to Rockwell for a very basic proposi-
tion, that an amended pleading supersedes the prior
pleading. Jd. at 1243. Pintando announced no new
principles of jurisdiction in that regard.
In Pintando, plaintiff alleged state and federal
claims for relief. Defendant moved for summary
judgment on all claims. While the motion was pend-
ing, plaintiff voluntarily amended his complaint to
delete the one and only federal claim for relief. The
district court thereafter granted summary judgment
19
on the state law claims. On appeal from the summary
judgment, the Eleventh Circuit, citing Rockwell,
simply held that the amended complaint superseded
the original complaint, divesting the district court
of subject matter jurisdiction. Pintando, 501 F.3d
at 1243-44. There were no other federal c!91-x:s invol-
untarily dismissed in Pintando that would have
triggered application or discussion of § 1367(c)(3)
supplemental jurisdiction.
3. There Has Been No Voluntary Elimi-
nation of the Federal Claims by
Amendment
As discussed in more detail below, Petitioners’
ADDCA claim was involuntarily dismissed under
Rule 12(b)(6) on Ford’s motion. The Third Amended
Complaint deleting their RPA claim but restating the
ADDCA claim did not change that fact. The Agreed
Order noting that: “Plaintiffs’ Dealer Day in court Act
claims are dismissed and remain dismissed by
operation of the Court’s January 10, 2000 Order
and are not revived and were not intended by any
party to be revived by the subsequent filing of the
Third Amended Complaint... .” did not change that
fact. (Resp. App. 91-92) (Emphasis added)
Although in its January 22, 2008, dismissal
order, the District Court stated that the inclusion of
the ADDCA claim was the result of a “scrivener’s
error”, there is nothing in the record to support such
a conclusion. Ford challenged the “scrivener’s error”
20
comment in its Motion to Alter or Amend the Judg-
ment. In its order denying that motion, the District
Court noted Ford’s objection and responded that it
was of no moment how the inclusion of the ADDCA
claim is characterized, it was of no legal effect and its
inclusion as if it never happened.” While Ford agrees
that it does not matter whether the ADDCA claim
was included in the Third Amended Complaint, it
disagrees that it is “as if it never happened” or that
the parties treated it as such.
The Circuit Court correctly concluded that “the
[district] court involuntarily dismissed plaintiffs’
claims under the [ADDCA].” (App. 5) Those are the
jurisdictional facts and nothing has occurred to
change them.
4. The District Court Retained Supple-
mental Jurisdiction Following the
Involuntary Dismissal of the ADDCA
Claim
a. The Eleventh Circuit’s Decision is
Entirely in Accord with the Juri-
sprudence Interpreting § 1367(c)
The decision of the Eleventh Circuit below is
entirely in accord with the provisions of § 1367(c)(3),
this Court’s prior decisions, those of the other Circuit
Courts and 185 years of jurisprudence reaching back
? (App. 7-9)
21
to the doctrine of pendent claim jurisdiction which
had its roots in this Court’s decision in Osborn uv.
Bank of United States, 22 U.S. (9 Wheat.) 738, 823, 6
L.Ed. 204 (1824) (““[W]hen a question to which the
judicial power of the Union is extended by the consti-
tution forms an ingredient of the original cause, it is
in the power of Congress to give the circuit courts
jurisdiction of that cause, although other questions of
fact or of law may be involved in it”). See also 16
MOoRE’S FEDERAL PRACTICE (3d ed.) § 106.04[2]
(2009). The involuntary dismissal of the ADDCA
claim did indeed set in stone the District Court’s
discretion to exercise supplemental jurisdiction under
§ 1367(c)(3).
Section 1367(c) provides that: “The district courts
may decline to exercise supplemental jurisdiction
over a claim under subsection (a) if. . . (3) the district
court has dismissed all claims over which it has
original jurisdiction... .” The dismissal of a federal
claim under Rule 12(b)(6) is a dismissal on the mer-
its. Federated Dept. Stores, Inc. v. Moitie, 452 U.S.
394, 399 n. 3, 101 S. Ct. 2424, 2428 n. 3 (1981); Har-
ris v. Blue Cross/Blue Shield of Alabama, Inc., 951
F.2d 325, 328 (11th Cir. 1992); NAACP v. Hunt, 891
F.2d 1555, 1560 (llth Cir. 1990); and 2 MOoorRE’s
FEDERAL PRACTICE (3d ed.) § 12.34[6]f[a] (2009).
This Court’s interpretation of Art. III end
§ 1367(c)(3) clearly support the Eleventh Circuit’s
holding that the district court retained the discretion
to exercise jurisdiction over Petitioners’ remaining
state law claim after it had involuntarily dismissed
22
the ADDCA claim as observed by this Court in Os-
born v. Haley, 549 U.S. 225, 245 (2007) (““{E]ven if
only state-law claims remained after resolution of the
federal question, the District Court would have
discretion, consistent with Article III, to retain Juris-
diction. ...”); Arbaugh v. Y & H Corp., 546 U.S. 500,
514 (2006) (““[W]Jhen a court grants a motion to dis-
miss for failure to state a federal claim, the court
generally retains discretion to exercise supplemental
jurisdiction, pursuant to 28 U.S.C. § 1367, over
pendent state-law claims.”); Carnegie-Mellon Univ. v.
Cohill, 484 U.S. 343, 350-51 (1988) (when federal
character of removed case is eliminated while the
case is sub judice, court has discretion to retain
jurisdiction, to remand, or to dismiss); and Wyman,
397 U.S. at 403-05 (district court retained discretion
to exercise pendent jurisdiction over state iaw claim
after federal claim which formed basis for original
jurisdiction was rendered moot).
There are no facts in Rockwell, and no holding,
observation or even dicta to the effect that where one
or more federal questions have been disposed of on
the merits by the District Court, a subsequent
amendment of the complaint that in fact dropped
those allegations from the complaint, would super-
sede the action of the District Court in dismissing the
claim on the merits, thereby depriving the court of
subject matter jurisdiction. What Petitioners overlook
is that it is the action of the trial court in dispos-
ing of the federal question(s) that is determinative of
the court’s continuing jurisdiction under § 1367(c),
23
not their post-dismissal deletion of the claim from the
complaint.
The circuit courts are in accord. Gary v. Long, 59
F.3d 1391, 1400 (D.C. Cir. 1995) (whether to decide
pendent claims is left to the sound discretion of
district court), cert. den., 516 U.S. 1011, 1016 (1995);
Gary v. Washington Metro Area Transit Authority, 516
U.S. 1011 (1995); Purgess v. Sharrock, 33 F.3d 134,
138 (2nd Cir. 1994) (If dismissal of federal claim
occurs “late in the action, after there has been sub-
stantial expenditure in time, effort, and money in
preparing the dependent claims, knocking them down
with a belated rejection of supplemental jurisdiction
may not be fair. Nor is it by any means necessary.”);
Noble v. White, 996 F.2d 797, 799 (5th Cir. 1993)
(“District courts enjoy wide discretion in determining
whether to retain supplemental jurisdiction over a
state claim once all federal claims are dismissed.”);
Palmer Hosp. Auth., 22 F.3d 1559, 1568 (11th Cir.
1994) (“Th[e] power to retain jurisdiction after the
dismissal of the underlying federal claim has not
been altered by section 1367.”); Evans v. City of
Marlin, Tex., 986 F.2d 104, 109, n. 10 (5th Cir. 1993)
(Where summary judgment for defendant on sole
federal claim upheld on appeal but reversed on state
law claims, “On remand, the district court will not
have the federal question ‘hook’ on which it can hang
the pendent state law claims. However ... the court
is vested with discretion to decide whether or not
supplemental jurisdiction continues to be appropri-
ate.”). See generally, 16 MOORE’S FEDERAL PRACTICE
24
(3d ed.) § 106.66[1] 2009 (“Dismissal of supplemental
claims is not required after jurisdiction-conferring
claim has been dismissed.”).
The Eleventh Circuit correctly concluded that the
District Court retained the discretion to exercise
jurisdiction over the remaining state law breach of
contract claim, following the involuntary dismissal of
the ADDCA claim and deletion of the RPA claim.
b. Even if Petitioners Had Amended
to Eliminate the ADDCA Claim
Following the District Court’s In-
voluntary Dismissal of that Claim,
it Would Make Absolutely No Dif-
ference
Even had there been an amendment to delete the
previously dismissed ADDCA claim from the live
pleading as found by the District Court, the court
retained the discretion to exercise § 1367(c) supple-
mental jurisdiction as the dismissed claim’s jurisdic-
tional shadow continued to extend over the remainder
of the case for purposes of § 1367(c). As noted in
Wright, Miller & Kane, 6 FEDERAL PRACTICE AND
PROCEDURE, CIVIL 2d § 1476 (2009), where a plain-
tiff’s claim has been dismissed by the trial court, and
plaintiff elects to amend in compliance with the
court’s ruling, plaintiff should not thereby waive the
right to appeal that ruling.
A rule that a party waives all objections to
the court’s dismissal if he elects to amend is
25
too mechanical and seems to be a rigid appli-
cation of the concept that a Rule 15(a)
amendment completely replaces the pleading
it amends. Without more, the action of the
amending party should not result in com-
pletely denying the right to appeal the
court’s ruling.
There was nothing new or novel about this
Court’s observation in Rockwell that an amended
pleading supersedes prior pleadings. Professors
Wright, et al., were certainly aware of that principle
when they wrote the observation quoted above. See,
Wright, et al., id. at § 1476. (“A pleading that has
been amended under Rule 15(a) supersedes the
pleading it modifies and remains in effect throughout
the action unless it subsequently is modified... .”)
Citing dicta from the Tenth Circuit’s opinion in Blazer
v. Black, 196 F.2d 139, 143-44 (10th Cir. 1952), Pro-
fessors Wright, et al., note that a party who amends
his pleading to conform to a court ruling waives only
those objections to that order insofar as it applies to
technical defects in the pleading; he does not waive
his exceptions to rulings that strike a “vital blow” to a
substantial portion of his claim. Jd.
The Circuit Courts have followed the rule advo-
cated by Professor Wright, et al. since at least 1978.
In Wilson v. First Houston Inv. Corp., 566 F.2d 1235
(5th Cir. 1978), plaintiff sued under the Investment
Advisers Act of 1940, 15 U.S.C. § 80b-14 (“LAA”)
as well as Rule 10b-5, 17 C.F.R. § 240.10b-5. The
district court dismissed plaintiff’s complaint and
26
first amended complaint, after which plaintiff ap-
pealed. In his first complaint, plaintiff asserted a
private right of action under the IAA and a Rule
10b-5 claim. The trial court dismissed on the ground
that no private right of action existed under the IAA
and plaintiff had failed to allege a valid 10b-5 claim.
Plaintiff was given leave to amend, which he did,
again attempting to state a 10b-5 claim but dropping
the LAA claim. His complaint was again dismissed
and he appealed. The first question addressed by the
Circuit Court was whether the dropping of the IAA
claim following a dismissal with leave to amend
waived the right to appeal same. The Fifth Circuit
held that while as a general rule an amended com-
plaint supersedes the original complaint unless the
amended complaint specifically refers to or adopts the
earlier pleading, plaintiff, “by filing an amended
complaint after a dismissal with leave to amend,
was not barred from raising on appeal the correctness
of the dismissal order.” Wilson, 566 F.2d at 1238
(Emphasis added).
The Eleventh Circuit followed Wilson in Varnes v.
Local 91, Glass Bottle Blowers, 674 F.2d 1365, 1370
(llth Cir. 1982), in holding that where the district
court, with plaintiff’s consent, dismissed the
original complaint with leave to amend for failure to
state a claim, plaintiff in fact drafted the order of
dismissal and filed an amended complaint: “Varnes
was not barred, by consenting to the dismissal and
filing the amended complaint, from raising on appeal
the correctness of the dismissal order....” /d. See
27
also, Dunn v. Airline Pilots Ass’n, 193 F.3d 1185, 1191
(llth Cir. 1999) (“[WJe do not require a party to
replead a claim following a dismissal under Rule
12(b)(6) to preserve objections to the dismissal on
appeal.”).
Thus, the ADDCA claim had continuing viability
for purposes of appeal. That is precisely why Peti-
tioners left it in their Third Amended Complaint,”
although they need not have done so to preserve the
issue for appeal. Even after appeal, affirmance of the
dismissal of the federal claims and remand, the case
law is clear, the District Court retains the discretion
to exercise supplemental jurisdiction over the remain-
ing state law claims. See Evans, 986 F.2d at 109,
n. 10.
IV. THE ADDCA CLAIM WAS NOT DIJS-
MISSED FOR LACK OF SUBJECT MAT-
TER JURISDICTION
A. Ford’s Motion to Dismiss Was a Motion
to Dismiss on the Merits
Petitioners attempt to re-write the facts of this
case by asserting that the Rule 12(b)(6) dismissal of
the ADDCA claim was really a Rule 12(b)(1) dismis-
sal.'* While there can be overlap between motions
'* (Resp. App. 18-26)
For example, in their brief to the Eleventh Circuit on
Ford’s appeal of the dismissal by the District Court, Petitioners
(Continued on following page)
28
under Rules 12(b)(1) and 12(b)(6), that clearly is not
what happened here. As this Court observed in Steel
Co. v. Citizens for a Better Environment, 523 U.S. 83,
89 (1998), “It is firmly established in our cases that
the absence of a valid (as opposed to arguable) cause
of action does not implicate subject matter jurisdic-
tion; i.e., the courts’ statutory or constitutional power
to adjudicate the case.” Ford’s motion to dismiss the
ADDCA claim was unquestionably a motion going to
the absence of a valid cause of action and did not
implicate the District Court’s subject matter jurisdic-
tion.
Ford moved under Rule 12(b)(6) to dismiss the
ADDCA claim for failure to allege facts sufficient to
constitute coercion under the Act. While the ADDCA
does contain a jurisdictional factual element, the
absence of which could be the subject of a Rule
12(b\1) motion, those facts were never put at issue
here. The ADDCA states that:
An automobile dealer may bring suit against
any automobile manufacturer engaged in
commerce ... by reason of the failure of said
automobile manufacturer ... to act in good
faith in performing or complying with any of
the terms or provisions of the franchise, or in
terminating, canceling, or not renewing the
franchise with said dealer. .
15 U.S.C. § 1222.
acknowledge that, “The DDCA claim was dismissed on January
19, 2000, under F.R.C.P. 12(b)(6). .. .” (Resp. App. 99)
29
“Commerce” is defined as “commerce among the
several States of the United States or with foreign
nations... .” (15 U.S.C. § 1221(d)) That is, the ADD-
CA applies only to automobile dealers engaged in
interstate or international commerce. Stadium
Chrysler Jeep, L.L.C. v. Daimlerchrysler Motors Com-
pany LLC, 324 F.Supp.2d 587594 (D. N.J. 2004) (“In
order to make out a claim, a plaintiff must demon-
strate that: ‘(2) the defendant must be an ‘automobile
manufacturer’ engaged in commerce... .’”) Thus, the
“jurisdictional facts” for purposes of the ADDCA, are
that the defendant “automobile manufacturer [is]
engaged in interstate or international commerce” as
defined by the Act.”
Here, Petitioners alleged that: “This Court has
jurisdiction over this proceeding in accordance with
28 U.S.C. § 1331 because certain causes of action
alleged herein arise under the laws of the United
States, including but not limited to, 15 U.S.C. § 1221
' The “engaged in commerce” element of an ADDCA claim
is analogous to the employer “engaged in an industry affecting
commerce” element of Title VII, 42 U.S.C. § 2000e(b). In Ar-
baugh, 546 U.S. 500, 126 S. Ct. 1235, 1239 (2006), the Court
held that the requirement of 15 or more employees was
an element of a Title VII claim but not a jurisdictional element.
The question whether defendant was an employer “engaged
in an industry affecting interstate commerce”, a much broader
exercise of Congress’ Commerce Power than at issue here, would
have been a matter of subject matter jurisdiction was not raised
there.
30
et seq....”° Petitioners also alleged that: “Defendant
Ford Motor Company is engaged in interstate com-
merce... .”" (Id. at | 2) These allegations are incor-
porated into Petitioners’ ADDCA claim.” These are
the jurisdictional factual allegations under the ADD-
CA.
The ADDCA battle was waged not over whether
Ford was engaged in “commerce” but whether Peti-
tioners had met the “coercion” element of their claim
as that term is used in the Act. Petitioners alleged
that “Ford used its size and power to coerce and
intimidate the named Plaintiffs and other dealers
into using the Appeal-Level CPA discount program to
their detriment” and that “(t]he [ADDCA] has
further been violated ... by... Ford’s discriminatory,
coercive and unfair treatment of the named Plaintiffs
and dealers in the pricing of Medium/Heavy
Trucks... .””
‘* Complaint and Petition for Class Action (“Complaint”)
(Resp. App. 2); Second Amended Complaint and Petition for
Class Action (“Second Amended Complaint”) (Resp. App. 10); and
Third Amended Complaint and Petition for Class Action (“Third
Amended Complaint”) (Resp. App. 19), all at 4 1.
" Id., at { 2.
“ Complaint at 924 (Resp. App. 4); Second Amended
Complaint at J 63 (Resp. App. 12); Third Amended Complaint at
{ 63 (Resp. App. 22)
‘* Second Amended Complaint at 7 66 (Resp. App. 13)
* Id. at J 67.
31
Ford moved under Rule 12(b)(6) to dismiss the
ADDCA claim as well as the RPA and breach of
contract claims for failure to state claims for relief. As
to the ADDCA claim, Ford argued, inter alia, that in
order to prove the lack of good faith element under
the Act, “a party must plead and prove actual or
threatened coercion or intimidation by the manufac-
turer.” Ford argued further that “in order to state a
Dealer Act claim, the alleged coercive or intimidating
conduct must reflect a wrongful demand by a manu-
facturer that would result in sanctions should a
dealer fail to comply.”” Nowhere in Ford’s motion is
there a suggestion that it was not engaged in inter-
state commerce or that the District Court otherwise
lacked subject matter jurisdiction.
Petitioners’ own opposition to Ford’s motion
demonstrates that they did not view the issue as one
of subject matter jurisdiction. They argued that
because the motion included and referred to matters
outside the record and pleadings, it must be denied as
a Rule 12 motion to dismiss.” Of course, there is no
prohibition on presenting matters outside the record
*' Memorandum of Law of Ford Motor Company in Support
of its Motion to Dismiss the Plaintiffs’ Second Amended Com-
plaint and Petition for Class Action (Resp. App. 48-49)
* Id.
“ Plaintiffs’ Response to Ford’s Motion to Dismiss (Resp.
App. 56-57 and n. 1)
32
to support a motion to dismiss under Rule 12(b)(1),”
demonstrating that Petitioners viewed the motion as
a Rule 12(b)(6) motion. Petitioners also argued cases
specifically addressing notice pleading under Rule
8(a), the acceptance of allegations on their face, the
propriety of a Rule 12(b)\(6) motion pre-discovery,
that dismissal was premature and that a ruling
on their ability to prove coercion should await a
Rule 56 motion.” Petitioners argued that “The plead-
ings support and the jury could find that Ford’s
conduct constitutes a wrongful demand and coercive
behavior....”” and that “(T]he issue of coercion or
intimidation under the Act is inherently fact-specific
and is thus a jury question not susceptible to a ruling
on a motion to dismiss.” Thus, Petitioners addressed
the merits of their claim, not the District Court’s
subject matter jurisdiction.
The District Court’s Order stated generally in
response to Ford’s motions challenging the ADDCA,
RPA and breach of contract claims that:
When considering a Rule 12(b)(6) motion to
dismiss, a court must accept the allegations
in the complaint as true, construing them in
the light most favorable to the plaintiffs... .
“ Land v. Dollar, 330 U.S. 731, 735, n. 4 (1947) (the district
court has authority to consider matters outside the pleadings
under Rule 12(b1)).
* (Resp. App. 56-72)
** (Resp. App. 66)
* (Resp. App. 67)
33
A Rule 12(b)(6) motion to dismiss should be
granted only if it appears beyond doubt that
the plaintiffs can prove no set of facts in
support of their allegations which would en-
title them to relief.”
Specifically with regard to the ADDCA claim, the
District Court observed that “Ford also moves to
dismiss the plaintiffs’ Dealers’ Day in Court claim for
failure to allege a lack of good faith involving coer-
cion, intimidation, or a threat thereof.”” The District
Court cited the case law interpreting the special
meaning given to the phrase “good faith” as used in
the ADDCA,” reviewed Petitioners’ arguments that
their allegations were sufficient to constitute coercion
under the ADDCA and found that:
[A]s Judge Evans correctly concluded in Cap-
ital Ford Truck Sales, Inc. v. Ford Motor
Company, 819 F.Supp. 1555 (N.D., Ga. 1992),
a manufacturer is free to set its wholesale
price or its price discounts at whatever level
the manufacturer chooses without running
afoul of the Dealers’ Day in Court Act. Id. at
1566-67. As such, Ford’s demand, explicit or
* Order dated January 19, 2000 [corrected February 2,
2000) (Resp. App. 74-90)
> (Resp. App. 82)
*° (Resp. App. 82) (citing Cabriolet Porsche Audi, Inc. v.
American Honda Motor Co., 773 F.2d 1193, 1210 (11th Cir. 1985)
(“In the absence of coercion, intimidation or threats thereof,
there can be no recovery under the Act, even if the manufacturer
otherwise acts in ‘bad faith’ as that term is normally used.”)).
34
implicit, that the plaintiffs participate in the
CPA program or pay inflated published
wholesale prices is not a wrongful demand
and does not constitute coercion or bad faith
within the meaning of the Dealers’ Day in
Court Act. Consequently, the defendant’s mo-
tion to dismiss the plaintiffs’ Dealers’ Day in
Court Act claim is GRANTED.
In their Appellees’ Brief (Res. App. 95-100) filed
in the appeal Bayshore Ford Truck Sales, Inc. v. Ford
Motor Company, No. 08-12587 (1lth Cir. Nov. 10,
2008) (Bayshore III), Petitioners describe the dismis-
sal of their ADDCA claim as a Rule 12(b)(6) dismissal.
(Resp. App. 99)
Petitioners’ ADDCA claim was clearly dismissed
on the merits because of an inability to allege facts
sufficient to constitute “coercion” under the Act. Thus,
this is not a situation in which plaintiffs’ claim was
dismissed for lack of subject matter jurisdiction.
B. Petitioners’ ADDCA Claim Was Not In-
substantial
Petitioners invite this Court to find that because
their ADDCA claim was dismissed early in the case
under Rule 12(b)(6), the claim was “insubstantial”
and therefore cannot support jurisdiction. All that
is required to invoke the district court’s § 1331 juris-
diction is a “colorable claim”. (Arbaugh, 546 U.S. at
513.) A finding by a District Court that a claim is
without merit does not render the claim “insubstan-
tial”. (“/Wjhen a court grants a motion to dismiss for
35
failure to state a federal claim, the court generally
retains discretion to exercise supplemental jurisdic-
tion, pursuant to 28 U.S.C. § 1367, over pendent
state-law claims.”) (/d. at 514.) Petitioners’ suggestion
makes no more sense than arguing that because a
claim has been dismissed under Rule 12(b)(6), imposi-
tion of Rule 11 sanctions are automatically justified.
Petitioners vigorously argued that Ford’s Appeal CPA
Program constituted coercion under the ADDCA,
while the District Court rejected the argument it did
not treat it as a frivolous contention, and the Circuit
Court obviously did not view it as “insubstantial”.
V. SECTION 1367(c)(3) REQUIRES NO NOV-
EL INTERPRETATION
Petitioners suggest that the Court adopt a novel
interpretation of § 1367(c) to harmonize a supposed
conflict between subsections (a) and (c)(3) of § 1367.
However, what they seek to do is not to harmonize
but to repeal § 1367(c)(3).
Petitioners’ suggestion that a dismissed claim no
longer has any jurisdictional significance if it is later
deleted from the complaint as a plaintiff cleans up its
pleadings is wrong as noted above.
Moreover, petitioners’ thesis that § 1367 looks
only to “extant” federal claims, ignores both the plain
language of § 1367(cX3) and the case law. Section
1367(c) clearly provides that: “the district courts may
decline to exercise supplemental jurisdiction over a
36
claim under subsection (a) if... (3) the district court
has dismissed all claims over which it has original
jurisdiction. ...” Petitioners point to the wording in
§ 1367(a) that the district courts shall have supple-
mental jurisdiction over other claims that are so
related to “claims in the action”. (Emphasis added).
Petitioners postulate that claims that have been
“dismissed” by the district courts are no longer “in the
action”. But if that were true, then a plaintiff would
have no right to appeal them as they are no longer “in
the action”. Obviously, the district court has no power
involuntarily to dismiss claims and take away a
plaintiff’s right to appeal because the dismissed
claims are still part of the action. This is true even
after an appeal and remand. See, e.g., Evans, 986 F.2d
at 109, n. 10. The federal claims, having been filed
and involuntarily disposed of by the district court,
remain a part of the action for purposes of subject
inatter jurisdiction.
If the Court were to adopt Petitioners’ proposed
interpretation of § 1367(c), a plaintiff, having lost one
or more of its federal claims on the merits, could
unilaterally divest the district court of its jurisdiction
and grant itself a new opportunity to litigate the
federal claims.”’ Such is clearly not in the interests of
judicial economy, the courts or parties.
*” Rule 41(a)(2) is not available to a defendant to oppose a
motion for leave to drop a claim as opposed to dismissing the
entire complaint. While a defendant could oppose a motion for
leave to amend made under Rule 15(aX2), that Rule provides
(Continued on following page)
37
Moreover, it is in the best interests of the Court
and the parties that a litigant be allowed to clean up
its pleadings without inadvertently waiving its right
to appeal a prior adverse ruling. Petitioners’ proposal
is simply a trap for the unwary.
The existing jurisprudence interpreting § 1367(a)
and (c)(3) is perfectly consistent. Where the court has
original jurisdiction over one or more claims, it has
the discretion under § 1367(a) to exercise supplemen-
tal jurisdiction over other claims that are so related
as to arise out of the same case or controversy. The
dismissal of the federal claims by the district court
enables the court to exercise its discretion to retain or
dismiss the remaining claims, even after the plead-
ings have been cleaned up to drop the reference to the
dismissed claim and even if the dismissal has been
affirmed on appeal and the case remanded for trial of
the remaining claims. Nothing more is needed.
that leave is to be freely given in the interests of justice. U.S.
Fawcetts, Inc. v. Home Depot USA, Inc., No. 1:03-CV-1572-WSD,
N.D. Ga., Jan. 13, 2006; Transwitch Corp. v. Galazar Networks,
Inc., 377 F.Supp.2d 284, 288 (D. Mass. 2005) (Rule 41(a)(2)
applies to dismissal of an action as opposed to Rule 15(a) as a
vehicle to drop some but not all claims). Petitioner’s re-write of
the jurisprudence of § 1367 would require a re-write of Rule
15(a)(2) and its jurisprudence to state that leave should be freely
given except where the amendment would have the effect of
defeating the court’s subject matter jurisdiction after a dismissal
on the merits of one or more claims.
VI. CONCLUSION
38
The Petition is based on fundamentally incorrect
statements of fact relating to the jurisdictional events
in this case. This is not a case in which the federal
claims were voluntarily eliminated by amendment.
Instead, one federal claim was dismissed on the
merits under Rule 12(b)(6) while the other was de-
leted by amendment. This case is not governed by
Rockwell Int'l Corp. v. United States, 549 U.S. 457
(2007) but instead by Arbaugh v. Y & H Corp., 546
U.S. 500 (2006). The Eleventh Circuit correctly ruled
that the District Court had the discretion to exercise
subject matter jurisdiction over this case.
DATED: April 17, 2009
Respectfully submitted,
JAMES C. WINTON
(Counsel of Record)
BILLY M. DONLEY
DaviD R. JARRETT
BAKER & HOSTETLER, LLP
1000 Louisiana Street,
Suite 2000
Houston, Texas 77002
Tel: (713) 646-1304
Fax: (713) 751-1717
Attorneys for Respondent
Resp. App. 1
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT
OF GEORGIA ROME DIVISION
BAYSHORE FORD *
TRUCK SALES, INC., *
HEINTZELMAN’S TRUCK *
CENTER, INC., LJL ?
TRUCK CENTER, INC., *
PEACH STATE FORD ‘
TRUCK SALES, INC., And *
VALLEY FORD TRUCK * Fiat ne
SALES, INC., Individually *
and as Representatives * CIVIL ACTION NO.
for a Class of Similarly * 4:99-CV 0173-HLM
Situated Entities, .
Plaintiffs, |
Vs. ”
FORD MOTOR ‘
COMPANY, .
Defendant. *
COMPLAINT AND PETITION
FOR CLASS ACTION
(Filed July 1, 1999)
Plaintiffs Bayshore Ford ‘Truck Sales, Inc.,
Heintzelman’s Truck Center, Inc., Peach State Ford
Truck Sales, Inc., LJL Truck Center, Inc., and Valley
Ford Truck Sales, Inc., individually and as represent-
atives for a class of similarly-situated entities, hereby
sue Defendant Ford Motor Company.
Resp. App. 2
1. This Court has jurisdiction over this proceed-
ing in accordance with 28 U.S.C. §1331 because
causes of action herein arise under the laws of the
United States, including, but not limited to, 15 U.S.C.
et seq. et seq.
1367 in that such claims are
so related to claims over which this Court has origi-
nal jurisdiction that they form the same case or
controversy under Article III of the United States
Constitution.
2. Venue is proper in this district in accordance
with 28 U.S.C. §1391 and 15 U.S.C. §15 and 15
U.S.C. §1222. Defendant Ford Motor Company is
engaged in interstate commerce. Defendant Ford
Motor Company does business in this district and in
this division. Defendant Ford Motor Company is
found in this district and in this division. Defendant
Ford Motor Company has agents, that is, dealers, in
this district and in this division which have entered
into franchise agreements and which sell heavy
trucks. In addition, Plaintiff Peach State Ford Truck
Sales, Inc. is a corporation doing business in this
district, including purchasing heavy trucks from Ford
and selling said heavy trucks. Thus, a substantial
part of the acts or omissions giving rise to the claims
alleged herein occurred in this district. Other dealers
and potential class members also do business in this
district and in this division.
3. Plaintiff Bayshore Ford Truck Sales, Inc. is a
Delaware corporation with its principal place of
business in New Castle, Delaware. Bayshore began as
a Ford dealer in 1976, and is one of the largest Ford
heavy-truck dealers in the
* *
21. Plaintiffs specifically adopt and incorporate
by reference herein in this Count One all preceding
paragraphs as if fully set forth herein.
22. Ford materially breached the terms of the
franchise agreement with its dealers, including the
Plaintiffs herein, by not publishing all prices,
charges, discounts and other terms of sale, and by not
selling company products of like grade and quality to
its dealers in accordance with such published pricing.
These actions by Ford affected virtually every dealer
in the country in the same manner. This breach of
contract by Ford has proximately caused damages to
Plaintiffs and other dealers who are members of the
class asserted in excess of approximately
$300,000,000, for all of which Plaintiffs hereby sue.
23. Plaintiffs allege that they are entitled to
collect from Ford their costs and reasonabie attorneys’
Resp. App. 4
fees for pursuing this action, for all of which Plaintiffs
hereby sue.
COUNT TWO: VIOLATION OF THE
DEALER DAY IN COURT ACT
24. Plaintiffs specifically adopt and incorporate
by reference herein in this Count Two all preceding
paragraphs as if fully set forth herein.
25. By virtue of its improper control of dealer
profits, by its discriminatory, coercive and unfair
treatment of dealers in the pricing of trucks of like
grade and quality and other equipment in violation of
its contract obligations, and by its breach of basic
issues of fairness in the business market place, Ford
has violated the duties imposed by the federal Dealer
Day in Court Act, 15 U.S.C. §1221, Ford has
failed to act in good faith and/or has acted in bad
faith in not performing or complying with the terms
and provisions of the franchise agreement, in particu-
lar, with 410 in the Heavy Duty Truck Sales and
Service Agreement. These violations by Ford affected
each class member in similar or identical fashion and
resulted in damages proximately caused, for all of
which Plaintiffs hereby sue.
26. Plaintiffs allege that they are entitled to
collect from Ford their costs and reasonable attor-
neys’ fees for pursuing this action, for all of which
Plaintiffs hereby sue.
Resp. App. 5
27. Plaintiffs specifically adopt and incorporate
by reference herein in this Count Three all preceding
paragraphs as if fully set forth herein.
28. By virtue of its admitted discrimination in
the pricing of trucks of like grade and quality sold to
dealers, Ford has engaged in price discrimination in
violation of the federal Robinson-Patman Act, 15
U.S.C. §13(a). Plaintiffs also assert that discovery will
show that Ford likewise discriminated in the pricing
of other Ford products, including replacement parts.
This price discrimination is without just cause or
excuse, was undertaken intentionally, maliciously
and in bad faith, and proximately caused damages to
each class member, including the
* * *
Respectfully submitted,
POPE, McGLAMRY,
KILPATRICK & MOR-
RISON, LLP
Resp. App. 6
C. Neal Pope
Georgia Bar No. 583769
318 11th Street,
2nd Floor
P. O. Box 2128
(31902-2128)
Columbus, Georgia
31901-2515
(706) 324-0050
FAX: (706)327-1536
/s/ MLM
Michael L. McGlamry
Georgia Bar No. 492515
The Pinnacle,
Suite 925
3455 Peachtree Road,
N.E.
P. O. Box 191625
(31119-1625)
Atlanta, Georgia
30326-3243
(404) 523-7706
FAX: (404) 524-1648
/s/ Wade H. Tomlinson
with express permission
by MLM
Resp. App. 7
318 11th Street,
2nd Floor
P. O. Box 2128
(31902-2128)
Columbus, Georgia
31901-2515
(706) 324-0050
FAX: (706)327-1536
615 West First Street
P. O. Box 5513
Rome, Georgia
30162-5513
(706) 291-8853
FAX: (706)234-3574
Wade H. Tomlinson, III
Georgia Bar No. 714605
/s/ Robert M. Brinson
Robert M. Brinson
Georgia Bar No. 082900
/s/ James A. Pikl
with express permission
by MLM
Resp. App. 8
James A. Pikl
Texas Bar No. 16008850
P. O. Box 2939
McKinney, Texas
75070
(214) 544-7000
FAX: (214)544-7001
Resp. App. 9
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ROME DIVISION
BAYSHORE FORD TRUCK *
SALES, INC., HEINTZEL- *
MAN’S TRUCK CENTER, +*
INC., LJL TRUCK CEN- * CIVIL ACTION NO.
TER, INC., PEACH STATE * 4:99-CV-173-RLV
FORD TRUCK SALES, *
INC., and VALLEY FORD
TRUCK SALES, INC.,
individually and as Repre-
sentatives for a Class of
Similarly Situated Entities,
Plaintiffs,
vs.
FORD MOTOR COMPANY,
Defendant.
* *&* &£ &*¥ # F FO KE Ee HF OF
SECOND AMENDED COMPLAINT
AND PETITION FOR CLASS ACTION
(Filed Oct. 21, 1999)
COME NOW Plaintiffs Bayshore Ford Truck
Sales, Inc., Heintzelman’s Truck Center, Inc., Peach
State Ford Truck Sales, Inc., LJL Truck Center, Inc.,
and Valley Ford Truck Sales, Inc., individually and as
representatives for a class of similarly-situated
entities, and, pursuant to Fed.R.Civ.P. 15 and this
Court’s Order of September 21, 1999, file this their
Second Amended Complaint and Petition for Class
Resp. App. 10
Action against Defendant Ford Motor Company. The
claims asserted in this Second Amended Complaint
and Petition arise out of the same transactions,
occurrences and conduct made the subject of and set
forth in Plaintiffs’ original Complaint and the
Amendment thereto, and accordingly, this Amended
Complaint and Petition relates back to the filing of
Plaintiffs’ original Complaint.
JURISDICTION AND VENUE
1. This Court has jurisdiction over this proceed-
ing in accordance with 28 U.S.C. § 1331 because
certain causes of action alleged herein arise under the
laws of the United States, including, but not limited
to, 15 U.S.C. § 1221 et seq., 28 U.S.C. § 2201, et seq.
and 15 U.S.C. § 13. In addition, this Court has juris-
diction over other claims alleged herein pursuant to
28 U.S.C. § 1367 in that such claims are so related to
claims over which this Court has original jurisdiction
that they form the same case or controversy under
Article III of the United States Constitution.
2. Venue is proper in this district in accordance
with 28 U.S.C. § 1391 and 15 U.S.C. §§ 15 and 1222.
Defendant Ford Motor Company is engaged in inter-
state commerce. Defendant Ford Motor Company
does business in this district and in this division.
Defendant Ford Motor Company is found in this
district and in this division. Defendant Ford Motor
Company has franchised dealers in this district and
in this division which have entered into franchise
Resp. App. 11
agreements and which sell Ford products. In addi-
tion, Plaintiff Peach State Ford Truck Sales, Inc. and
Plaintiff LJL Truck Center, Inc. are corporations
which do business in this district. Thus, a substantial
part of the acts or omissions giving rise to the claims
alleged herein occurred in this district. Other dealers
and potential class members do business in this
district and in this division.
PARTIES
3. Plaintiff Bayshore Ford Truck Sales, Inc.
(hereinafter “Bayshore”) is a Delaware corporation
with its principal place of business in New Castle,
Delaware. Bayshore became a Ford dealer in 1976
and sold Ford Medium-Duty and Heavy-Duty Trucks,
which are generally those trucks designated as Series
600 or above and which are hereinafter collectively
referred to as “Medium/Heavy Trucks”. Bayshore sold
such trucks pursuant to franchise agreements until
1998, at which time Ford Motor Company sold its
division which manufactured Medium/Heavy Trucks
to HN-80 Corporation, a division of Freightliner
Corporation. That sale is not the subject of this
action. Plaintiff Bayshore was one of the highest-
volume Ford Medium/Heavy Truck dealers in the
country. Bayshore services a nationwide market and
has customers throughout the United States.
4. Plaintiff Heintzelman’s Truck Center, Inc.
(hereinafter “Heintzelman’s) is a Florida corporation
with its principal place of business in Orlando,
Resp. App. 12
Florida. Heintzelman became a Ford Medium/Heavy
Truck dealer in 1973 and sold Ford Medium/Heavy
Trucks pursuant to franchise agreements until 1998.
Plaintiff Heintzelman’s was one of the highest-volume
Medium/Heavy Truck dealers in the Southeastern
United States. Heintzelman services a nationwide
market.
* * *
named Plaintiffs, proximately causing these other
dealers harm similar to that sustained by the named
Plaintiffs. Other dealers are entitled to recover dam-
ages in the same fashion as the named Plaintiffs.
COUNT TWO: VIOLATION OF THE
DEALER DAY IN COURT ACT
63. Plaintiffs incorporate herein paragraphs 1
through 62 above as if fully set forth herein.
64. Ford’s breaches of the franchise agreements
as set forth in Count One with respect to the named
Plaintiffs and to other Ford franchised dealers were
willful and intentional and in bad faith, and such
conduct is moreover a breach of the duty of good faith
and fair dealing inherent in every contract and vi-
olates the Dealer Day in Court Act, 15 U.S.C. § 1221
et. seq.
65. Ford instituted the Appeal-Level CPA
discount program sc as to achieve the improper
objective of circumventing its contractual obligations
Resp. App. 13
to publish to each named Plaintiff and other dealers
the prices, charges, discounts and other terms of sale
and to sell its products, including Medium/Heavy
Trucks and Replacement Parts, only at published
prices, charges, discounts and other terms of sale.
66. Ford used its size and power to coerce and
intimidate the named Plaintiffs and other dealers
into using the Appeal-Level CPA discount program to
their detriment.
67. The Dealer Day in Court Act has further
been violated with respect to the named Plaintiffs
and other Ford franchised dealers by at least the
following: (a) Ford’s improper manipulation and
control of the named Plaintiffs’ profits and other
dealers’ profits; (b) Ford’s discriminatory, coercive and
unfair treatment of the named Plaintiffs and dealers
in the pricing of Medium/Heavy Trucks of like grade
and quality and Replacement Parts in violation of
Ford’s contractual obligations; and (c) Ford’s breach of
basic issues of trust and fairness in the business
marketplace.
68. Ford has failed to act in good faith and/or
has acted in bad faith in not performing or complying
with the terms and provisions of the franchise
agreement, in particular, but nov limited to, ¥ 10 in
the franchise agreements executed by the named
Plaintiffs and in the identical or substantially similar
paragraphs contained in the franchise agreements of
other Ford dealers.
Resp. App. 14
69. Ford’s violation of the Dealer Day in Court
Act has proximately caused Plaintiffs’ harm and
damages, including but not limited to: each named
Plaintiff was unaware of the lowest price at which
Ford sold comparable Medium/Heavy Trucks and
Replacement Parts to other Ford dealers; each named
Plaintiff paid more to Ford for certain comparable
Medium/Heavy Trucks and Replacement Parts than
did other dealers, and consequently, each named
Plaintiff’s profits on the resale of such Medium/
Heavy Trucks and Replacement Parts were wrongly
reduced; each named Plaintiff lost sales; and each
named Plaintiff lost profits on service.
70. Ford’s violation of the Dealer Day in Court
Act has proximately caused damages to each named
Plaintiff in an amount in excess of one million dollars
and to other dealers, and each named Plaintiff is
entitled to recover some or all of the following:
(A) lost profits on sales made equal to the
overcharges Ford imposed on said dealers in their
purchases of Ford products;
(B) lost profits on sales lost equal to the net
profits dealers could have earned on the initial sales
of Ford products had those sales been made;
(C) lost profits on sales of service and parts for
Medium/Heavy Trucks that dealers did not sell but
that would have been sold — and hence serviced — had
Ford not violated the law; and
Resp. App. 15
(D) loss of use of monies that Ford illegally kept
from dealers (the overcharges) or that Ford prevented
dealers from earning, equal to the level of interest
such monies would have earned if in the possession of
the dealers from the time such monies would have
been earned by dealers to the date of trial.
71. Ford’s violations of the Dealer Day in Court
Act affected each named Plaintiff and each class
member in similar or identical fashion, proximately
causing each named Plaintiff and other dealers harm.
Other dealers therefore are entitled to recover dam-
ages in the same fashion as the named Plaintiffs.
COUNT THREE: VIOLATION OF
THE ROBINSON-PATMAN ACT
(c) that the Plaintiffs and the putative class
members be awarded costs and expenses, including
reasonable attorneys’ fees;
(d) that the Plaintiffs and the putative class
members be awarded actual damages to be deter-
mined at the time of trial;
(e) that the Plaintiffs and the putative class
members be awarded treble damages as provided by
law;
(f) that the Plaintiffs and the putative class
members be awarded pre-judgment and _ post-
judgment interest as proscribed by law;
Resp. App. 16
(g) that the Plaintiffs and the putative class
members have such other and further relief as the
Court deems just and proper under the circums-
tances; and
(h) that the Plaintiffs and the putative class
members have a trial by jury.
Respectfully submitted,
POPE, MCGLAMRY, KILPATRICK
& MORRISON, LLP
/s/ C. Neal Pope
C. Neal Pope
Georgia Bar No. 583769
Michael L. McGlamry
Georgia Bar No. 492515
The Pinnacle, Suite 925
3455 Peachtree Road, N.E.
P. O. Box 191625 (31119-1625)
Atlanta, Georgia 30326-3243
(404) 523-7706
(404) 524-1648 — Fax
JAMES A. PIKL, P.C.
James A. Pikl
Texas Bar No. 16008850
P. O. Box 2939
McKinney, Texas 75070
(214) 544-7000
(214) 544-7001 — Fax
Resp. App. 17
BRINSON, ASKEW, BERRY,
SEIGLER, RICHARDSON
& DAVIS
Robert M. Brinson
Georgia Bar No. 082900
P. O. Box 5513
Rome, GA 30162-5513
(706) 291-8853
(706) 234-3574 — Fax
ATTORNEYS FOR PLAINTIFFS
Resp. App. 18
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ROME DIVISION
BAYSHORE FORD TRUCK *
SALES, INC., HEINTZEL- *
MAN’S TRUCK CENTER, *
INC., LJL TRUCK CEN- * CIVIL ACTION NO.
TER, INC., PEACH STATE *4:99-CV-173-RLV
FORD TRUCK SALES,
INC., and VALLEY FORD
TRUCK SALES, INC.,
individually and as Repre-
sentatives for a Class of
Similarly Situated Entities,
Plaintiffs,
*
vs.
FORD MOTOR COMPANY,
Defendant.
* * &€£ &© &€& &€ He HF HH HR
THIRD AMENDED COMPLAINT
AND PETITION FOR CLASS ACTION
(Filed Dec. 6, 2002)
COME NOW Plaintiffs Bayshore Ford Truck
Sales, Inc., Heintzelman’s Truck Center, Inc., Peach
State Ford Truck Sales, Inc., LJL Truck Center, Inc.,
and Valley Ford Truck Sales, Inc., individually and as
representatives for a class of similarly-situated
entities, and, pursuant to Fed.R.Civ.P. 15 and this
Court’s Order —. 6 hg file this their
Third Amended Complaint and Petition for Class
Resp. App. 19
Action against Defendant Ford Motor Company. The
claims asserted in this Third Amended Complaint
and Petition arise out of the same transactions,
occurrences and conduct made the subject of and set
forth in Plaintiffs’ original Complaint and _ the
Amendments thereto, and accordingly, this Amended
Complaint and Petition relates back to the filing of
Plaintiffs’ original Complaint.
JURISDICTION AND VENUE
1. This Court has jurisdiction over this proceed-
ing in accordance with 28 U.S.C. $1331 because
certain causes of action alleged herein arise under the
laws of the United States, including, but not limited
to, 15 U.S.C. § 1221 et seq. and 28 U.S.C. § 2201, et
seq. In addition, this Court has jurisdiction over other
claims alleged herein pursuant to 28 U.S.C. § 1367 in
that such claims are so related to claims over which
this Court has original jurisdiction that they form the
same case or controversy under Article III of the
United States Constitution.
2. Venue is proper in this district in accordance
with 28 U.S.C. § 1391 and 15 U.S.C. § 1222. Defen-
dant Ford Motor Company is engaged in interstate
commerce. Defendant Ford Motor Company does
business in this district and in this division. Defen-
dant Ford Motor Company is found in this district
and in this division. Defendant Ford Motor Company
has franchised dealers in this district and in this divi-
sion which have entered into franchise agreements and
Resp. App. 20
which sell Ford products. In addition, Plaintiff Peach
State Ford Truck Sales, Inc. and Plaintiff LJL Truck
Center, Inc. are corporations which do business in this
district. Thus, a substantial part of the acts or omis-
sions giving rise to the claims alleged herein occurred in
this district. Other dealers and potential class members
do business in this district and in this division.
PARTIES
3. Plaintiff Bayshore Ford Truck Sales, Inc.
(hereinafter “Bayshore”) is a Delaware corporation
with its principal place of business in New Castle,
Delaware. Bayshore became a Ford dealer in 1976
and sold Ford Medium-Duty and Heavy-Duty Trucks,
which are generally those trucks designated as Series
600 or above and which are hereinafter collectively
referred to as “Medium/Heavy Trucks”. Bayshore sold
such trucks pursuant to franchise agreements until
1998, at which time Ford Motor Company sold its
division which manufactured Medium/Heavy Trucks
te HN-80 Corporation, a division of Freightliner
Corporation. That sale is not the subject of this
action. Plaintiff Bayshore was one of the highest-
volume Ford Medium/Heavy Truck dealers in the
country. Bayshore services a nationwide market and
has customers throughout the United States.
4. Plaintiff Heintzelman’s Truck Center, Inc.
(hereinafter “Heintzelman’s) is a Florida corporation
with its principal place of business in Orlando,
Florida. Heintzelman became a Ford Medium/Heavy
Resp. App. 21
Truck dealer in 1973 and sold Ford Medium/Heavy
Trucks pursuant to franchise agreements until 1998.
Plaintiff Heintzelman’s was one of the highest-volume
Medium/Heavy Truck dealers in the Southeastern
United States. Heintzelman services a nationwide
market.
* * *
60. Ford’s breaches of the franchise agreements
were willful and intentional.
61. Ford’s breaches of the franchise agreements
proximately caused damages to each named Plaintiff
in an amount in excess of one million dollars and to
other dealers, and each named Plaintiff is entitled to
recover some or all of the following:
(A) lost profits on sales made equal to the
overcharges Ford imposed on said dealers in their
purchases of Ford products;
(B) loss of use of monies that Ford illegally kept
from dealers (the overages) or that Ford prevented
dealers from earning, equal to the level of interest
such monies would earn if in the possession of the
dealers from the time such monies would have been
earned by dealers to the date of trial.
62. Ford breached material provisions of the
franchise agreements of other dealers in the same
manner as it did with the named Plaintiffs, prox-
imately causing these other dealers harm similar to
that sustained by the named Plaintiffs. Other dealers
Resp. App. 22
are entitled to recover damages in the same fashion
as the named Plaintiffs.
COUNT TWO: VIOLATION OF THE
DEALER DAY IN COURT ACT
63. Plaintiffs incorporate herein paragraphs 1
through 62 above as if fully set forth herein.
64. Ford’s breaches of the franchise agreements
as set forth in Count One with respect to the named
Plaintiffs and to other Ford franchised dealers were
willful and intentional and in bad faith, and such
conduct is moreover a breach of the duty of good faith
and fair dealing inherent in every contract and vi-
olates the Dealer Day in Court Act, 15 U.S.C. § 1221
et. seq.
65. Ford instituted the Appeal-Level CPA
discount program so as to achieve the improper
objective of circumventing its contractual obligations
to publish to each named Plaintiff and other dealers
the prices, charges, discounts and other terms of sale
and to sell its products, including Medium/Heavy
Trucks and Replacement Parts, only at published
prices, charges, discounts and other terms of sale.
66. Ford used its size and power to coerce and
intimidate the named Plaintiffs and other dealers
into using the Appeal-Level CPA discount program to
their detriment.
67. The Dealer Day in Court Act has further
been violated with respect to the named Plaintiffs
Resp. App. 23
and other Ford franchised dealers by at least the
following: (a) Ford’s improper manipulation and
control of the named Plaintiffs’ profits and other
dealers’ profits; (b) Ford’s discriminatory, coercive and
unfair treatment of the named Plaintiffs and dealers
in the pricing of Medium/Heavy Trucks of like grade
and quality and Replacement Parts in violation of
Ford’s contractual obligations; and (c) Ford’s breach of
basic issues of trust and fairness in the business
marketplace.
68. Ford has failed to act in good faith and/or
has acted in bad faith in not performing or complying
with the terms and provisions of the franchise
agreement, in particular, but not limited to, ¥ 10 in
the franchise agreements executed by the named
Plaintiffs and in the identical or substantially similar
paragraphs contained in the franchise agreements of
other Ford dealers.
69. Ford’s violation of the Dealer Day in Court
Act has proximately caused Plaintiffs’ harm and
damages, including but not limited to: each named
Plaintiff was unaware of the lowest price at which
Ford sold comparable Medium/Heavy Trucks and
Replacement Parts to other Ford dealers; each named
Plaintiff paid more to Ford for certain comparable
Medium/Heavy Trucks and Replacement Parts than
did other dealers, and consequently, each named
Plaintiff’s profits on the resale of such Medium/
Heavy Trucks and Replacement Parts were wrongly
reduced; each named Plaintiff lost sales; and each
named Plaintiff lost profits on service.
Resp. App. 24
70. Ford’s violation of the Dealer Day in Court
Act has proximately caused damages to each named
Plaintiff in an amount in excess of one million dollars
and to other dealers, and each named Plaintiff is
entitled to recover some or all of the following:
(A) lost profits on sales made equal to the
overcharges Ford imposed on said dealers in their
purchases of Ford products;
(B) lost profits on sales lost equal to the net
profits dealers could have earned on the initial sales
of Ford products had those sales been made;
(C) lost profits on sales of service and parts for
Medium/Heavy Trucks that dealers did not sell but
that would have been sold — and hence serviced — had
Ford not violated the law; and
(D) loss of use of monies that Ford illegally kept
from dealers (the overcharges) or that Ford prevented
dealers from earning, equal to the level of interest
such monies would have earned if in the possession of
the dealers from the time such monies would have
been earned by dealers to the date of trial.
71. Ford’s violations of the Dealer Day in Court
Act affected each named Plaintiff and each class
member in similar or identical fashion, proximately
causing each named Plaintiff and other dealers harm.
Other dealers therefore are entitled to recover dam-
ages in the same fashion as the named Plaintiffs.
Resp. App. 25
PLAINTIFFS’ PETITION FOR
CLASS CERTIFICATION
Plaintiffs incorporate herein paragraphs 1
through 71 above as if fully set forth herein.
72. In accordance with Local Rule 23.1(A)(2),
Plaintiffs allege the following:
(a) The section of Fed.R.Civ.P. 23 which is
claimed to authorize maintenance of suit by
class action:
* * *
(e) that the Plaintiffs and the putative class
members be awarded pre-judgment and post-
judgment interest as proscribed by law;
(f) that the Plaintiffs and the putative class
members have such other and further relief as the
Court deems just and proper under the circums-
tances; and
(g) that the Plaintiffs and the putative class
members have a trial by jury.
Resp. App. 26
Respectfully submitted this___ day of ___, 2002
POPE, MCGLAMRY, KILPATRICK
& MORRISON, LLP
C. Neal Pope
Georgia Bar No. 583769
Michael L. McGlamry
Georgia Bar No. 492515
The Pinnacle, Suite 925
3455 Peachtree Road, N.E.
P. O. Box 191625 (31119-1625)
Atlanta, Georgia 30326-3243
(404) 523-7706
(404) 524-1648 — Fax
JAMES A. PIKL, P.C.
James A. Pikl
Texas Bar No. 16008850
P. O. Box 2939
McKinney, Texas 75070
(214) 544-7000
(214) 544-7001 — Fax
BRINSON, ASKEW, BERRY,
SEIGLER, RICHARDSON
& DAVIS
Robert M. Brinson
Georgia Bar No. 082900
P. O. Box 5513
Rome, GA 30162-5513
(706) 291-8853
(706) 234-3574 — Fax
ATTORNEYS FOR PLAINTIFFS
Resp. App. 27
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT
OF GEORGIA ROME DIVISION
BAYSHORE FORD ”
TRUCK SALES, INC., °
HEINTZELMAN’S TRUCK *
CENTER, INC., LJL *
TRUCK CENTER, INC., *
PEACH STATE FORD .
TRUCK SALES, INC., And *
VALLEY FORD TRUCK *
SALES, INC., Individually *
and as Representatives
for a Class of Similarly
Situated Entities,
Ps
.
K
Plaintiffs, .
Vv. *
FORD MOTOR :
COMPANY, é
+
Defendant.
CIVIL ACTION NO.
4:99-CV-173-RLV
PLAINTIFFS’ THIRD AMENDED RESPONSES
10 MANDATORY DISCLOSURES
(Filed May 12, 2003)
(1) State precisely the classification of the
cause(s) of action being filed, a brief factual outline of
the case including plaintiff’s contentions as to what
the defendant did or failed to do, and a succinct
statement of the legal issues in the case.
Resp. App. 28
Response:
This is a case originally alleging breach of con-
tract and violation of federal statutes by Ford Motor
Company brought as a class action by five franchised
Ford dealers. The federal Robinson-Patman Act
claims have been voluntarily dismissed by the Plain-
tiffs, and the federal Dealer Day in Court Act claims
were dismissed by the trial court by order dated
January 19, 2000. The only remaining claim for trial
is thus Plaintiffs’ state law breach of contract claims.
Ford breached its franchise contract obligations
by failing and refusing to publish all prices and
discounts for which it would sell Ford-brand products
to dealers, including medium and heavy trucks, and
by failing to fulfill its obligation to sell those trucks to
dealers at published prices and discounts. Ford has
admitted that it did not publish actual, true dealer
prices to its dealers, that it did not sell all trucks only
for published prices and that it sold medium and
heavy trucks below the prices that were published to
dealers and the documents produced in this case bear
this out.
The legal issues raised by this litigation are
whether Ford’s conduct violated the franchise agree-
ment (this issue has already been adjudicated to final
judgment in another proceeding in a different juris-
diction), and the amount of damages suffered by the
Plaintiffs proximately caused by Ford’s conduct.
(2) Describe in detail all statutes, codes, regula-
tions, legal principles, standards and customs or
Resp. App. 29
usages, and illustrative case law which plaintiff
contends are applicable to this action.
Response:
The contracts at issue contain a choice of law
provision that Michigan law governs in the event of a
dispute. Michigan law provides a cause of action for
breach of contract that is identical or virtually iden-
tical to that in every other United States jurisdiction.
That is, breach of contract is a cause of action found
when a contract party fails to fulfill a contract duty
and that failure proximately causes damages to the
other party. See, e.g., Admiral Ins. Co. v. Columbia
Cats. Ins. Co., 194 Mich. App. 300; 486 N.W.2d 351;
358 (Mich. App. 1992) (setting forth the elements of
breach of contract in Michigan). Michigan has a six-
year statute of limitations for breach of contract
actions such as this one. See: Michigan Code Anno-
tated, MCL 600.5807(8); MSA §27A.5807(8). However,
the Court may conclude that despite the choice of law
provision contained in the contract, Georgia law may
apply to the underlying dispute. See, e.g., Greensboro
Ford, Inc. v. Ford Motor Co., 568 S.E.2d 758 (Ga.App.
2002). Thus, to the extent that Michigan law differs,
Georgia law may appropriately be applied to the
underlying dispute.
Ford breached the franchise agreements with the
named plaintiffs and the other dealers. These breach-
es were willful and intentional and in bad faith, and
such conduct is a breach of the duty of good faith and
fair dealing inherent in every contract and violates
Resp. App. 30
the Dealer Day in Court Act, 15 U.S.C. sec. 1221 et
seq. The Dealer Day in Court Act has further been
violated in at least the following ways: (a) Ford’s
improper control and intimidation of the named
plaintiffs; (b) Ford’s discriminatory, coercive and
unfair treatment of the named plaintiffs and dealers
in the pricing of Heavy Trucks of like grade and
quality and Replacement Parts in violation of Ford’s
contractual obligations; and (c) Ford’s breach of basic
issues of trust and fairness in the business market
place.
Given that the Dealer Day in Court Act claims
have been dismissed from the case at present, they
will only be adjudicated following appeal and remand
of the claims by the appellate court, where necessary.
(3) Provide the name and, if known, the address
and telephone number of each individual likely to
have discoverable information relevant to disputed
facts alleged with particularity in the pleadings,
identifying the subjects of the information. (Attach
witness list to Responses to Mandatory Disclosures as
Attachment A).
Response:
Witness list attached.
(4) Provide the name of any person who may be
used at trial to present evidence under Rules 702, 703
or 705 of the Federal Rules of Evidence. For all
experts described in Fed.R.Civ.P. 26(a)(2)(B), provide
a separate written report satisfying the provisions of
Resp. App. 31
that rule. (Attach expert witness list and written
reports to Responses to Mandatory Disclosures as
Attachment B).
Response:
Mr. Fred Kinder will serve as an expert witness.
Mr. Kinder has previously furnished his report on the
Ford NAVIS and CPA databases, and the damage
calculations per Plaintiffs’ case theory. Mr. Kinder is
also planning to furnish supplemental report(s)
following further production of information being
withheld by Ford and discovery depositions that are
presently contemplated.
(5) Provide a copy of, or a description by catego-
ry and location of, all documents, data, compilations,
and tangible things in your possession, custody, or
control that are relevant to disputed facts alleged
with particularity in the pleadings. (Attach document
list and. descriptions to Responses to Mandatory
Disclosures as Attachment C).
Response:
Document list attached and supplied in Plaintiffs’
amended disclosures.
(6) In the space provided below, provide a
computation of any category of damages claimed by
you. In addition, include a copy of, describe by catego-
ry and location of, the documents or other evidentiary
materials bearing on the nature and extent of injuries
suffered, making such documents or evidentiary
material available for inspection and copying as
Resp. App. 32
under Fed.R.Civ.P. 34. (Attach any copies and de-
scriptions to Responses to Mandatory Disclosures as
Attachment D).
Response:
Descriptions and damages report attached.
(7) Attach for inspection and copying as under
Fed.R.Civ.P. 34 any insurance agreement under
which any person carrying on an insurance business
may be liable to satisfy part or all of a judgment
which may be entered in this action or to indemnity
or reimburse for payments made to satisfy the judg-
ment. (Attach copy of insurance agreement to Res-
ponses to Mandatory Disclosures as Attachment E).
Response:
N/A
(8) Disclose the full name, address, and tele-
phone number of all persons or legal entities who
have a subrogation interest in the cause of action set
forth in plaintiffs’ cause of action and state the basis
and extent of such interest.
Response:
N/A.
Resp. App. 33
/s/
[Illegible]
C. Neal Pope
Wade H. Tomlinson, III
POPE, McGLAMRY, KIL-
PATRICK, MORRISON
& NORWOOD, LLP
2nd Floor
1037 Front Ave.
P.O. Box 2128 (31902-2128)
Columbus, GA 31901-2515
(706) 324-0050
(706) 327-1536 — Fax
Michael L. McGlamry
POPE, McGLAMRY, KIL-
PATRICK, MORRISON
&; NORWOOD, LLP
The Pinnacle, Suite 925
3455 Peachtree Road, N.E.
P.O. Box 191625
(31119-1625)
Atlanta, GA 30326-3243
(404) 523-7706
(404) 524-1648 — Fax
Robert M. Brinson
I. Stewart Duggan
BRINSON, ASKEW,
BERRY, SEIGLER,
RICHARDSON & DAVIS
P.Q. Box 5513
Rome, GA 30162-5513
Resp. App. 34
James A. Pikl
JAMES A. PIKL, P.C.
P.O. Box 2939
McKinney, TX 75070
ATTORNEYS FOR
PLAINTIFFS
ERTIFICATE OF SERVICE
I hereby certify that on the 9th day of May, 2003,
a true and correct copy of the foregoing Plaintiffs’
Third Amended Responses to Mandatory Disclosures
was served via first class mail, postage pre-paid on
the following:
Billy M. Donley
Baker & Hostetler, LLP
1000 Louisiana, Suite 2000
Houston, Texas 77002-5009
Carey P. DeDeyn
Sutherland, Asbill & Brennan, LLP
999 Peachtree Street, N.E.
Atlanta, GA 30309-3996
/s/ (INegible]
Michael L. McGlamry
Resp. App. 35
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF GEORGIA
ROME DIVISION
BAYSHORE FORD TRUCK |
SALES, INC., et al.,
Plaintiffs, | CIVIL ACTION
Vv. NO. 4:99-CV-173-RLV
FORD MOTOR COMPANY, |
Defendant. |
ORDER
(Filed Oct. 22, 2007)
The parties are directed to file briefs addressing
the question of whether Pintando v. Miami-Dade
Housing Agency ___ F.3d ___ (11th Cir. September 25,
2007), 2007 WL 2768452, requires that this action be
dismissed for lack of supject matter jurisdiction. The
briefs are to be filed no later than November 2, 2007.
No response briefs will be permitted.
SO ORDERED, this 22nd day of October, 2007.
/s/ Robert L. Vining, Jr.
ROBERT L. VINING, JR.
Senior United States
District Judge
Resp. App. 36
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ROME DIVISION
BAYSHORE FORD TRUCK
SALES, INC. HEINTZEL-
MAN’S TRUCK CENTER,
INC. LJL TRUCK CENTER,
INC., PEACH STATE FORD
TRUCK SALES, INC., AND
VALLEY FORD TRUCK
SALES, INC., Individually
and as Representatives
for a Class of Similarly
Situated Entities,
Plaintiffs,
CIVIL ACTION
NO.: 4:99-CV-0173-RLV
VS.
FORD MOTOR COMPANY,
Defendant.
COP COR Gn SOP 02 C2 WOR OR WOR WO? 2 LR KN MD LO? KH MM
RULE 12(b)(6) MOTION OF FORD MOTOR
COMPANY TO DISMISS PLAINTIFFS’
SECOND AMENDED COMPLAINT
AND PETITION FOR CLASS ACTION
(Filed Nov. 8, 1999)
Pursuant to Rule 12(b)(6) of the Federal Rules of
Civil Procedure, Defendant Ford Motor Company
moves the Court to dismiss Plaintiffs’ Second
Amended Complaint and Petition for Class Action
against Ford Motor Company for the reason that the
Second Amended Complaint and Petition for Class
Resp. App. 37
Action fails to state a claim upon which relief can be
granted.
In accordance with Local Rule 7.1(A)(1), Defen-
dant Ford Motor Company contemporaneously files
its memorandum in support of this motion, which
memorandum is incorporated herein by reference as
if fully set forth.
Wherefore, Defendant Ford Motor Company
respectfully requests that the Court grant the relief
requested herein, and enter an order dismissing
Plaintiffs’ Second Amended Complaint and Petition
for Class Action with prejudice, and grant such other
and further relief to which Defendant Ford Motor
Company may be entitled.
Respectfully submitted,
BAKER & HOSTETLER Lip
By: /s/ Kenneth R. Valka By C P DeDeyn
Kenneth R. Valka
State Bar No. 20435300
Billy M. Donley
State Bar No. 05977085
1000 Louisiana, Suite 2000
Houston, Texas 77002
(713) 751-1600
(713) 751-1717 (FAX)
' OF COUNSEL:
Resp. App. 38
SUTHERLAND ASBILL &
BRENNAN LLP
By: /s/ Carey P. DeDeyn
Carey P. DeDeyn
Georgia Bar No. 215650
999 Peachtree Street, N.E.
Atlanta, Georgia 30309-3996
(404) 853-8000
(404) 853-8806
ATTORNEYS FOR DEFENDANT
FORD MOTOR COMPANY
Resp. App. 39
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ROME DIVISION
BAYSHORE FORD TRUCK
SALES, INC. HEINTZEL-
MAN’S TRUCK CENTER,
INC. LJL TRUCK CENTER,
INC., PEACH STATE FORD
TRUCK SALES, INC., AND
VALLEY FORD TRUCK
SALES, INC., Individually
and as Representative
for a Class of Similarly
Situated Entities,
Plaintiffs,
CIVIL ACTION
NO.: 4:99-CV-0173-RLV
Vs.
FORD MOTOR COMPANY,
Defendant.
MEMORANDUM OF LAW OF FORD
MOTOR COMPANY IN SUPPORT OF ITS
MOTION TO DISMISS THE PLAINTIFFS’
SECOND AMENDED COMPLAINT
AND PETITION FOR CLASS ACTION
(Filed Nov. 8, 1999)
Pursuant to Rulel2(b)(6) of the Federal Rules of
Civil Procedure and Local Rule 7, Defendant, Ford
Motor Company (“Ford”), submits this its memoran-
dum of law in support of its motion to dismiss Plain-
tiffs’ Second Amended Complaint and Petition for
Resp. App. 40
Class Action, and would respectfully show this Court
as follows:
I. INTRODUCTION
This lawsuit concerns Plaintiffs’ complaints
about Ford’s operation of its “competitive price assis-
tance” program (referred to either as “CPA” or “CPA
program”). Ford’s CPA program was Ford’s principal
allowance program for its heavy-trucks and involved
certain allowances from Ford to its heavy-truck
dealers which were either credited or paid by Ford to
its dealers.’
Plaintiffs complain that Ford’s operation of its
CPA program violates the contract with its heavy-
truck dealers and is a violation of the federal Auto-
mobile Dealer’s Day in Court Act (“Dealer Act”) and
the Robinson-Patman Act. The key concept behind
Plaintiffs’ claims against Ford is their theory that
each Plaintiff was entitled to purchase medium and
heavy-duty trucks from Ford at the lowest discounted
price that Ford offered to any other dealer in the
country on what Plaintiffs argue was a “comparable
truck.”
This is not the first time that a Ford heavy-truck
dealer has challenged Ford’s CPA program on federal
' Ford and HN-80 Corporation, a whelly owned subsidiary
of Freightliner Corporation, entered into an agreement in 1997
in which HN-80 Corporation agreed to acquire certain of Ford’s
heavy-truck assets.
Resp. App. 41
statutory grounds.” There have been two other chal-
lenges, each of which was unsuccessful.’ In those two
challenges, Ford’s CPA program withstood judicial
scrutiny on federal antitrust and Dealer Act claims
that are very similar to those brought by Plaintiffs in
this case. In Metro Ford Truck Sales, Inc. v. Ford
Motor Company, 145 F.3d 320 (5th Cir. 1998), cert.
denied, 119 S.Ct. 390 (Jan. 11, 1999)’, the Fifth
Circuit Court of Appeals reviewed how Ford operated
this exact same CPA program and summarily rejected
the plaintiffs’ Robinson-Patman Act ciaims finding
* This is also not the first time that Ford had been sued for
breach of contract on the contractual provision at issue in this
case. The heavy-truck dealer in Cause No. 94-7174b; Metro Ford
Truck Sales, Inc. v. Ford Motor Company, in the 44th Judicial
District Court of Dallas County, Texas sued Ford for breach of
contract. Although Metro prevailed on the liability finding for
breach of contract, the jury returned a verdict that Metro
suffered zero damages. This case, including the liability finding,
is currently on appeal to the Dallas Court of Appeals.
* In addition, Mack Truck, Inc., one of Ford’s competitors,
had a program very similar to Ford’s CPA program. Mack
Truck’s version of the CPA program was called “sales assistance
program”. Mack Truck’s operation of its program was considered
in Lewis Service Center, Inc. v. Mack Truck Inc., 714 F.2d 842
(8th Cir. 1983). In that case, the Eighth Circuit found that Mack
Truck’s program was not a violation of the federal antitrust law,
but was instead pro-competitive. Lewis, 714 F.2d at 848. The
Lewis Court also found that such programs lower retail prices to
consumers and increase interbrand competition. /d.; see also
Metro Ford, 145 F.3d 320.
* Metro Ford is the progenitér of this case. The Plaintiffs in
this case are represented by the attorney who also represents
the dealer in the Metro Ford case, Mr. Jim Pikl.
Resp. App. 42
that Ford’s operation of its CPA program did not
amount to price discrimination as a matter of law.
Metro Ford, 145 F.3d at 325-26. Likewise, a federal
district court in Atlanta summarily rejected a dealer’s
allegations that Ford violated the Dealer Act and
federal antitrust laws because of the manner in which
Ford operated its CPA program. Capital Ford Truck
Sales, Inc. v. Ford Motor Company, 819 F. Supp.
1555, 65-76, 80-83 (N.D. Ga. 1992).
As shown below, Plaintiffs, by their Second
Amended Complaint and Petition for Class Action
(hereinafter “Complaint”), allege the same federal
statutory claims that the Metro Ford and Capital
Ford plaintiffs unsuccessfully alleged against Ford.
Similarly, the federal claims asserted by these Plain-
tiffs. as well as the breach of contract allegation, fail
to state a claim upon which relief can be granted;
therefore, these claims should be dismissed with
prejudice.
Il. STATEMENT OF ALLEGED FACTS
The salient facts, as alleged by Plaintiffs and
accepted as true for purposes of Ford’s motion to
dismiss, are as follows’: Ford manufactured and sold
* Since Rule 12(bX6) requires that all well-pleaded be taken
as true, Ford liberally quotes from the facts as stated by Plain-
tiffs in their Complaint. However, Ford is, in no way, adopting
these alleged facts as true; rather, the salient facts are being
included herein for the Court’s convenience.
Resp. App. 43
both medium-duty trucks and heavy-duty trucks from
at least 1980 through 1998.° (Complaint, at 9.)
These trucks were typically ordered by dealers for
resale to a particular retail customer, and were
configured to the retail customer’s specifications. (Jd.
at 4 12.) Some dealers, including Plaintiffs, operated
under the “Ford Heavy-Duty Truck Sales and Service
Agreement” and some other dealers operated under
the “Ford Truck Sales and Service Agreement.” (Jd. at
71 15, 16.) These agreements are in all relevant tams
identical or substantially identical to one another. (Jd.
at J 21.) Paragraph
* * *
the identity of the retail customer and the proposed
retail price. (/d. at ¥ 37.) Ford allegedly then, in its
sole discretion, would give either no CPA, an insuffi-
cient amount of CPA to close the deal, or just enough
CPA to allow each dealer to realize a profit margin
somewhere between 0 and 4 percent of the total retail
price.’ (Id.) From time to time, according to Plaintiffs,
Ford’s appeal-level CPA discounts varied by as much
as $15,000 on supposedly “comparable trucks”. (/d. at
q 40.); See Section D(1\a) infra. Plaintiffs define
“comparable trucks” for purposes of their claims as
* Although Ford no longer manufactures or sells heavy-duty
trucks, it does continue to manufacture and sell medium-duty
trucks.
" An allegation very similar to this one was made by the
plaintiff and rejected by the court in Capital Ford Truck Sales,
Inc. v. Ford Motor Co., 819 F.Supp. 1555, 1566 (N.D. Ga. 1992).
Resp. App. 44
“trucks [of] the same model, same series, have iden-
tical Wholesale Delivered base prices, and have a
Total Truck Values (the total Wholesale Delivered
Price of the truck, including the base chassis and all
options) within plus or minus one percent (1%) of
each other.” (Complaint, at 713.)
In their Complaint, Plaintiffs also allege that
Ford operated a secret replacement parts discount
program whereby some, but not all, dealers obtained
unpublished discounts off Ford’s ordinary, published
wholesale prices. (Complaint, at 7 41 and 43.) How-
ever, Plaintiffs also admit that they have no idea if
such a program actually existed. (/d. at 42.)
Ill. ARGUMENT IN SUPPORT OF FORD’S
MOTION TO DISMISS
A. Standard Of Review.
Rule 12(b)(6) of the Federal Rules of Civil Proce-
dure requires that all well-pleaded facts are to be
taken as true; and then it is for this Court to decide
whether the facts alleged entitle Plaintiffs to some
legal remedy. Conley v. Gibson, 355 U.S. 41, 45-46
(1957). To survive a Rule 12(b)(6) motion, however,
Plaintiffs must allege specific facts, not conclusions.
Elliott v. Foufas, 867 F.2d 877, 881 (5th Cir. 1989).
Conclusory allegations and unwarranted factual
deductions are not taken as true. Associated Builders,
Inc. v. Alabama Power Co., 505 F.2d 97, 100 (5th Cir.
Resp. App. 45
1974); Atlanta Gas Light Co. v. Southern Natural
Gas Co., 338 F. Supp. 1039, 1041 (N.D. Ga. 1972).
B. Plaintiffs Fail To State A Claim For
Breach of Contract.
1. The Terms of the Contract.
Plaintiffs’ claim that Ford breached paragraph 10
of the franchise agreement, which paragraph is set
forth in their Complaint as follows:
Sales of COMPANY PRODUCTS by the
Company to the Dealer hereunder will be
made in accordance with the prices, charges,
discounts and other terms of sale set forth in
price schedules or other notices published by
the Company to the Dealer from time to time
in accordance with applicable HEAVY DUTY
TRUCK TERMS OF SALE BULLETIN or
PARTS AND ACCESSORIES TERMS OF
SALE BULLETIN. Except as otherwise spec-
ified in writing by the Company, such prices,
charges, discounts and terms of sale shall be
those in effect, and delivery to the Dealer
shall be deemed to have been made and the
order deemed to have been filed on the date
of delivery to the carrier or the Dealer,
whichever occurs first. The Company has the
right at any time and from time to time to
* Fifth Circuit cases decided before October 1, 1981, are
binding precedent in this circuit. Bonner v. City of Pritchard,
661 F.2d 1206, 1209 (11th Cir. 1991) (en banc).
Resp. App. 46
change or eliminate prices, charges, dis-
counts, allowances, rebates, refunds or other
terms of sale affecting COMPANY PROD-
UCTS by issuing a new HEAVY DUTY
TRUCK or PARTS AND ACCESSORIES
TERMS OF SALE BULLETIN, new price
schedules or other notices.
(Complaint, at 4 22.). Based on this provision, Plain-
tiffs allege that Ford “had contractual duties to
publish to each named Piaintiff ... all prices,
charges, discounts and other terms of sale, and to sell
its products .. . only at published prices.” (Complaint,
at 7 52.)
Plaintiffs admit that Ford published its whole-
sale delivered prices for trucks and parts to Plaintiffs.
(Complaint, at { 34.) Plaintiffs also admit that Ford
published its “Rainbow Schedule” and “Sales-
Advantage” CPA discounts to Plaintiffs. (Complaint,
at 4 39.) Accordingly, the
* * oe
Therefore, even assuming Ford had published the
price reflecting appeal-level CPA amounts on every
truck sold to every dealer, the unambiguous terms of
paragraph 10 plainly allow Ford to change its truck
prices. Thus, Plaintiffs fail to state a breach of con-
tract claim against Ford.
Resp. App. 47
C. Plaintiffs Fail To State A Claim For Re-
lief Under The Automobile Dealer Day
In Court.
The “factual” support for Plaintiffs’ Dealer Act
claim is premised on two notions. Plaintiffs’ primary
idea is that Ford was contractually required to pub-
lish to each of its dealers the appeal-level CPA price
that Ford gave to any one of its dealers. (Complaint,
at 47 22, 35, 47 and 48.) A second notion, which
Plaintiffs fail to develop in their Complaint, is Ford
was contractually required to publish allegedly
available, but secret, discounts on replacement parts.
(Complaint, at 74 41-43.) Based on these two notions,
Plaintiffs allege that Ford violated the Dealer Act
because:
1) Ford failed to act with good faith and fair
dealing in performance of the contract (Com-
plaint, at 7{ 64, 68);
2) Ford circumvented the contract by failing to
publish its appeal-level CPA discount pro-
gram (Complaint, at ¥ 65);
3) Ford “used its size and power to coerce and
intimidate” dealers into using the appeal-
level CPA (Complaint, at ¥ 66); and
4) Ford improperly manipulated and controlled
Plaintiffs’ profits by “discriminatory, coercive
and unfair treatment” in the pricing of its
trucks and replacement parts....” (Com-
plaint, J 67).
Resp. App. 48
As shown below, these allegations — whether viewed
collectively or individually — fail to state any claim for
relief under the Dealer Act.
1. Plaintiffs Do Not Allege Facts Suf-
ficient to State a Claim Under the
Dealer Act.
The Dealer Act authorizes suits by automobile
dealers “operating under the terms of a franchise”
against manufacturers only when the manufacturer
fails “to act in good faith... .” 15 U.S.C. §§1221(c) and
1222. By using a standard of “good faith”, it appears
at first glance that the act is very broad in its applica-
tion. However, the Dealer Act gives “good faith” a
narrower meaning than it ordinarily may have. “Good
faith” is defined by the act as follows:
The term “good faith” shall mean the duty of
each party to any franchise, and all officers,
employees, or agents thereof to act in a fair
and equitable manner toward each other so
as to guarantee the one party freedom from
coercion, intimidation, or threats of coercion
or intimidation from the other party: Pro-
vided, that recommendation. endorsement,
exposition, persuasion, urging or argument
shall not be deemed to constitute a lack of
good faith.
15 U.S.C. §1221(e). The Dealer Act is strictly con-
strued; thus, in order to prove a lack of good faith as
is necessary for a claim under the act, a party must
plead and prove actual or threatened coercion or
Resp. App. 49
intimidation by the manufacturer. Cabriolet Porsche
Audi, Inc. v. American Honda Motor Co., 773 F.2d
1193, 1210 (llth Cir. 1985), cert. denied, 475 U.S.
1122 (1986); Bob Maxfield Inc. v. American Motors
Corp., 637 F.2d 1033, 1038 (5th Cir. Unit A Feb.
1981), cert. denied, 454 U.S. 860 (1981); Capital Ford
Truck Sales, Inc. v. Ford Motor Co., 819 F. Supp.
1555, 1565 (N.D. Ga. 1992). Likewise, “fa] mere
showing of arbitrary or other bad conduct absent
coercion is not a sufficient ground for recovery” under
the Dealer Act. H.C. Blackwell Company, Inc. uv.
Kenworth Truck Co., 620 F.2d 104, 106 (5th Cir.
1980).
Aliso, in order to state a Dealer Act claim, the
alleged coercive or intimidating conduct must reflect a
wrongful demand by a manufacturer that would
result in sanctions should a dealer fail to comply. See,
e.g., Colonial Dodge, Inc. v. Chrysler Corp., 11
F. Supp. 2d 737, 743 (D. Md. 1996); Fray Chevrolet
Sales, Inc. v. General Motors Corp., 536 F.2d 683,
68586 (6th Cir. 1976). As noted by the district court in
Colonial Dodge, of the ten circuit courts of appeals
that have addressed this issue, all ten have held that
coercion or intimidation must include a wrongful
demand that is accompanied by a threat of sanctions
for noncompliance. Colonial Dodge, 11 F. Supp. 2d at
743 (citing cases from the first through ten circuit
courts of appeals that require a wrongful demand
Resp. App. 50
accompanied by a threat of sanctions).” Therefore, for
Plaintiffs to allege coercion or intimidation as re-
quired to state a claim under the act, they must
allege a wrongful demand by Ford directed to Plain-
tiffs that would result in sanctions against Plaintiffs
if the demand was not met.
Nothing in the Complaint comes close to stating
that Ford coerced or intimidated Plaintiffs through a
wrongful demand that, if not complied with, would
result in sanctions against Plaintiffs by Ford. In-
stead, Plaintiffs’ merely allege that (1) the dealers
were required to disclose the customer’s identity and
the previously agreed upon retail price to Ford, (2)
Ford did not publish prices as Plaintiffs claim Ford
was required to do under the contracts between Ford
and the Plaintiffs, and (3) Ford operated a secret
parts discount program. (Complaint, at { 37.) There-
fore, Plaintiffs have failed to allege a lack of “good
° However, in the case of Stamps v. Ford Motor Co., 650
F. Supp. 390 (N.D. Ga. 1986) (Shoob, J.), a district court declined
to apply the “wrongful demand” standard because the court
believed that the standard had not been addressed by the
Eleventh Circuit. Stamps, 650 F. Supp. at 396, n.5. It appears
that the Stamps Court did not consider the binding precedent of
H.C. Blackwell v. Kenworth Trucking Company, 620 F.2d 104,
106 (5th Cir. 1980). In Blackwell, the court stated that for
purposes of the Dealer Day Act “[bJad faith may consist of
coercive conduct manifested by ‘a wrongful demand which will
result in sanctions if not complied with.’” This statement from
Blackwell was adopted by the court in Capital Ford Truck Sales,
Inc. v. Ford Motor Co., 829 F.Supp. 1555, 1566 (N.D. Ga. 1992).
Resp. App. 51
faith” by Ford as required to state a claim under the
Dealer Act.
2. The Dealer Act Does Not Apply to
an Alleged Breach of Contract.
Central to Plaintiffs’ Dealer Act claim is their
allegation that Ford breached its contracts with
Plaintiffs by not publishing to all of its dealers the
appeal-level CPA provided to any one dealer. (Com-
plaint, 79 64, 65 and 68). The Dealer Act does not
create a cause of action or remedy for breach of con-
tract. Hanley v. Chrysler Motors Corp., 433 F.2d 708,
710 (10th Cir. 1970); Globe Motors, Inc. v. Studebak-
er-Packard Corp., 328 F.2d 645, 646 (3rd Cir. 1964);
Quarles v. General Motors Corp., 597 F. Supp. 1037
(D.C.N.Y. 1984), aff’d 758 F.2d 839 (2nd Cir. 1985);
General Motors Corp. v. MAC Co., 247 F.Supp. 723,
731 (D. Colo. 1965). Moreover, allegations that a
manufacturer insisted on its contractual rights do not
state a Dealer Act claim. Clifford Jacobs Motors, Inc.
v. Chrysler Corp., 357 F.Supp. 564, 574 (W.D. Ohio
1973). Therefore, Plaintiffs’ breach of contract allega-
tions fail to state a claim under the Dealer Act.
3. Allegations that Ford Actions Were
in Bad Faith or Unfair do Not State
a Claim Under the Dealer Act.
Also, Plaintiffs claim that Ford’s actions violate
the Dealer Act because they were in bad faith and
unfair. (Complaint, {9 64, 67 and 68). Allegations of
Resp. App. 52
this nature do not state a claim under the Dealer Act.
As the court in American Honda succinctly observed,
[c]ase law is clear that a manufacturer fails
to act in good faith for purposes of recovering
under this Act only if its conduct amounts to
coercion or intimidation. In absence of coer-
cion, intimidation or threats thereof, there
can be no recovery under the Act, even if the
manufacturer otherwise acts in ‘bad faith’ as
that term is normally used.
American Honda, 773 F.2d at 1210 (emphasis added).
Likewise, claims that a manufacturer’s actions were
unfair do not state a Dealer Act claim. See also,
Pearson v. Ford Motor Co., 865 F. Supp. 1504, 1511
(N.D. Fla. 1994) (automobile manufacturer’s alleged
“lack of fairness” in contractual performance does not
give rise to a Dealer Act claim). Therefore, Plaintiffs
fail to state a Dealer Act claim against Ford.
4. Plaintiffs’ Aliegations Concerning
Their Profits are not Sufficient to
State a Claim.
In addition, the ecbiinione allegation that Plain-
tiffs make in support of their Dealer Act claim does
not support a claim under the act. Plaintiffs allege
that Ford improperly manipulated and controlled
Plaintiffs’ profits by “discriminatory, coercive and
unfair treatment” in the pricing of its trucks and
replacement parts... .” (Complaint, {4 66, 67).
Resp. App. 53
A similar allegation was made by a Ford dealer
and rejected by the court in Capital Ford Truck Sales,
Inc. v. Ford Motor Company, 819 F. Supp. 1555 (N.D.
Ga. 1992). In considering that allegation, the Capital
Ford Court rejected plaintiff’s argument, observing
that,
[tlhe cornerstone of Plaintiffs’ Dealer Act
claims is the assertion that Ford Motor
structured its pricing system so as to restrict
dealer profits to a level insufficient for Capi-
tal Ford to remain in business. It is beyond
dispute, however, that a manufacturer is free
to set prices at any level it chooses. The
claim that manufacturer price levels are set
too high, or fail to provide a sufficient profit
margin for dealers, is insufficient to give rise
to a cognizable claim under the Dealer Act.
Id. at 1566 (emphasis added) (citing Overseas Motors,
Inc. v. Import Motors, Lid., 519 F. 2d 119 (6th Cir.),
cert. denied, 423 U.S. 987 (1975). Thus, Plaintiffs
allegations regarding their profit margin fail to state
a claim under the Dealer Act. For the above reasons,
Plaintiffs fail to state a claim for relief under the
Dealer Act, and that claim should be dismissed with
prejudice.
D. Plaintiffs Fail To State A Claim Under
The Robinson-Patman Act.
Plaintiffs’ complaint that Ford violated Section
2(a) of the Robinson-Patman Act is based on the same
allegations that Plaintiffs claim support their other
Resp. App. 54
causes of action — Ford sold trucks and replacement
parts to some dealers at prices and discounts that
were not published to all dealers. (Complaint, at 773.)
As with Plaintiffs’ other claims, these allegations do
not state a claim under the Robinson-Patman Act.
* * *
(W.D.N.Y. 1991) (could not satisfy two purchaser rule
because plaintiff had not purchased vehicles of simi-
lar type).
Since only bidders on the same contract are in
competition with each other, Plaintiffs’ claims that
they successfully bid for some truck sales under
different contracts during the relevant time period
fails to qualify it as a competing purchaser under the
Act, as was expressly held in M.C. Manufacturing,
517 F.2d at 1066-67. Once the award is made, the
bidders are simply no longer competitors. Subsequent
sales of vehicles to each successful bidder to fulfill the
contracts (or portions of contracts) that they have
already won are not sales to competing customers. /d.
Since Plaintiffs have not pled and cannot satisfy the
two-purchaser rule, Plaintiffs’ Robinson-Patman
claim should dismissed with prejudice.
IV. CONCLUSION
For all of the reasons stated above, this Court
should grant the motion to dismiss of Ford Motor
Company and dismiss Plaintiffs’ Second Amended
Resp. App. 55
Complaint And Petition For Class Action with preju-
dice.
Respectfully submitted,
BAKER & HOSTETLER LLP
By: /s/ Kenneth R. Valka By C P DeDeyn
Kenneth R. Valka
State Bar No. 20435300
Billy M. Donley
State Bar No. 05977085
1000 Louisiana, Suite 2000
Houston, Texas 77002
(713) 751-1600
(713) 751-1717 (FAX)
OF COUNSEL:
SUTHERLAND ASBILL &
BRENNAN LLP
By: /s/ Carey P. DeDeyn
Carey P. DeDeyn
Georgia Bar No. 215650
999 Peachtree Street, N.E.
Atlanta, Georgia 30309-3996
(404) 853-8000
(404) 853-8806
ATTORNEYS FOR DEFENDANT
FORD MOTOR COMPANY
Resp. App. 56
IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF GEORGIA
ROME DIVISION
Bayshore Ford Truck Sales,
Inc., Heintzelman’s Truck
Center, Inc., Peach State
Ford Truck Sales, Inc. and
Valley Ford Truck Sales,
Inc., individually and as
representatives for a class of
similarly situated entities,
Plaintiffs,
Civil Action No.
4:99-cv-173-RLV
VS.
Ford Motor Company,
Defendant.
§
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§
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§
8
§
§
PLAINTIFFS’ RESPONSE
TO FORD’S MOTION TO DISMISS
(Filed Nov. 26, 1999)
COME NOW Plaintiffs and file their response to
Ford Motor Company’s (“Ford’s”) Motion to Dismiss.
Ford’s Motion and Memorandum of Law do not sup-
port the relief Ford seeks. Plaintiffs have properly
pleaded their claims in conformity with Fed.R.Civ.P. 8
and this Court’s directive. Thus, on the merits, Ford’s
Motion should be denied. In addition, Ford’s Motion
includes and refers to matters outside the record and
pleadings in this case, and so it must be denied as a
Resp. App. 57
Rule 12 motion to dismiss.’ Ford’s Motion also does
not accurately cite to case authority and expressly
cites cases for propositions that are not contained in
those cases; hence, Ford’s Motion lacks legal authori-
ty. Finally, the applicable and controlling case law
supports the Plaintiffs’ contention that Ford’s Motion
must be denied. Every case Ford cites as authority for
its legal arguments was a case decided either on
summary judgment or after trial on the merits; not a
single case cited by Ford is one granting a motion to
dismiss.
ARGUMENT AND
CITATION OF AUTHORITIES
I. THE APPLICABLE STANDARD AND
FORD’S BURDEN
Ford must establish that Plaintiffs have failed to
state a cause of action upon which relief may be
' See Lowe v. Town of Fairland, Okla., 143 F.3d 1378
(10th Cir.1998); Property Mgt. Investments v. Lewis, 752 F.2d
599 (11th Cir.1985). Discovery has yet to commence. This Court
should not convert Ford’s motion into one for summary judg-
ment, in that Plaintiffs have not been allowed to develop
evidence with which to respond. This is particularly true here,
where Ford has refused to agree that Plaintiffs can review the
record in other similar litigation which would allow Plaintiffs to
respond to Ford’s “evidence.” See generally, Piaintiffs’ Motion for
Scheduling Order, and Plaintiffs’ Memorandum in support, both
of which were filed on or about November 1, 1999. If this Court
is inclined to treat this Motion to Dismiss as a Motion for
Summary Judgment, Plaintiffs urge the court to grant them
discovery and additional time to respond.
Resp. App. 58
granted. One commentator described this burden as
follows:
When considering a 12(b)(6) motion, the
court presumes that all the allegations of the
complaint are true; it resolves all doubts or
inferences in the plaintiff’s favor; and it
reads the complaint in the light most favora-
ble to the plaintiff. ... Because the plaintiff
is given every benefit of the doubt in both
law and fact, the 12(b)(6) motion theoretical-
ly requires the movant to “play out” every
factual scenario that could be contained in
the four corners of the complaint, and then
apply the applicable legal standards. Simi-
larly, every plausible legal theory that might
provide relief to the plaintiff, based on the
facts pleaded, must be considered.
Haig, Business and Commercial Litigation in Federa:
Courts, Vol. 1, page 324-25 (West 1998). See also
Bowers v. Hardwick, 478 U.S. 186, 202 (1986),
(complaint should not be dismissed merely because
plaintiff’s allegations do not support the particular
legal theory he advances; the court is under a duty to
examine the complaint to determine if the allegations
provide for relief on any possible theory); Scheurer v.
Rhodes, 416 U.S. 232, 234 (1974) (when reviewing
the sufficiency of a complaint before the reception of
any evidence, the court’s task is a limited one; the
issue is not whether the plaintiff will prevail but
whether the claimant is entitled to offer evidence in
support of the claims); Quality Foods de Centro
America, S.A. v. Latin American Agribusiness
Resp. App. 59
Development Corp., 711 F.2d 984, 995(11th Cir.
1983) (motion to dismiss should be denied unless
defendant shows beyond doubt that plaintiffs can
prove no set of facts entitling them to relief). This
standard is particularly true in an antitrust suit
where the proof and details of the alleged violations
are largely in the hands of the alleged violators. See
id. at 995. See also Municipal Utilities Bd. Of
Albertsville v. Alabama Power Co., 934 F.2d 1493,
1501 (11th Cir. 1991) (notice pleading is all that is
required for a valid antitrust complaint). Plaintiffs
here have alleged violations of the Robinson-Patman
Act, 15. U.S. C. §13(a), which is a count alleging
violations of the antitrust laws.
All inferences, both factual and legal, must be
indulged in support of the plaintiffs’ claims. Conley v.
Gibson, 355 U.S. 41, 45-46 (1957); Miree v. Dekalb
County, Georgia, 433 U.S. 25, 27 n.2 (1977); Davis
v. Monroe County Bd. of Educ., ____ U.S. __, 119
S.Ct. 1661, 1676 (1999). Because of the Constitutional
implications, this reluctance to grant motions to
dismiss is more than a mere theoretical construct. A
motion to dismiss, if granted, not only deprives the
plaintiffs of their Constitutional right to trial, but
also denies plaintiffs’ their ability to conduct discov-
ery that may lead to facts that would entitle them to
trial. Thus, the motion to dismiss is generally re-
served for situations where the legal issues are clear
and undisputed, such as when a case is precluded by
the statute of limitations, Uboh v. Reno, 141 F.3d
1000 (11th Cir. 1998), or where governmental immunity
Resp. App. 60
is plainly evident, McCallum v. City of Athens,
Georgia, 976 F.2d 649 (11th Cir. 1992). Such motions
are inappropriate where fact issues must be developed
to determine whether the plaintiff’s allegations are
viable. “In appraising the sufficiency of the complaint
we follow, of course, the accepted rule that a com-
plaint should not be dismissed for failure to state a
claim unless it appears beyond doubt that the plain-
tiff can prove no set of facts in support of his claim
which would entitle him to relief.” Conley, 355 U.S.
at 45-46.
Ford ignores this standard in its Motion and in
the accompanying Memorandum. Rather than citing
cases and presenting argument to the effect that
Plaintiffs have failed to state a claim for which relief
could be granted, Ford cites and relies on cases in far
different procedural postures, in particular, cases that
have been resolved on motion for summary judgment.
See, e.g., Capital Ford Truck Sales, Inc. v. Ford
Motor Co., 819 F.Supp. 1555 (N.D.Ga.1992) (Capital
Ford II;’ Metro Ford Truck Sales, Inc. v. Ford
Motor Co., 145 F.3d 320 (5th Cir. 1993). These deci-
sions, and others cited by Ford, were rendered after
discovery had been undertaken. In urging this Court
to grant its Motion to Dismiss in reliance on these
inapposite cases, Ford seeks the benefit of situations
* In an earlier decision more pertinent to the inquiry here,
the court denied Ford’s motion to dismiss. See Capital Ford
Truck Sales, Inc. v. Ford Motor Co., 779 F.Supp. 1345
(N.D.Ga.1990) (Capital Ford I).
Resp. App. 61
wherein the facts, not the pleadings, were found
wanting. This Court should not dismiss this action
before Plaintiffs are allowed to discover and present
that which might not have been presented in other
cases.
Il. PLAINTIFFS’ ALLEGATIONS
This Court already has some familiarity with
Plaintiffs’ allegations, in that the Court reviewed
Plaintiffs’ Complaint and Defendant’s Motion for
More Definite Statement. Plaintiffs filed their Second
Complaint and Petition for Class Action (“Second
Complaint”) on or about October 21, 1999. Therein,
Plaintiffs, which are franchised Ford dealers, have
brought three distinct but factually-related claims
against Ford: breach of contract; violation of the
Dealer Day in Court Act, 15 U.S. C. § 1221 et. seq.;
and violation of the Robinson-Patman Act, 15 U.S. C.
§ 13(a).
Rule 8(a) requires that Plaintiffs set forth a short
and plain statement of the claim showing that they
are entitled to relief. Here, Plaintiffs have alleged a
valid contract supported by adequate consideration
that Ford has breached by failing to publish prices,
charges, discounts and other terms of sale, and by
failing to sell its products in accordance with such
published prices, charges, discounts and other terms
of sale. See Second Complaint at Js 22, 49-58. Ford
can deny these allegations, but it cannot contend that
the allegations do not provide Ford with notice of the
Resp. App. 62
claims, and it cannot credibly contend that these
allegations do not state a claim upon which relief can
be granted.
In alleging violations of the Dealer Day in Court
Act, Plaintiffs alleged that Ford instituted the Ap-
peal-Level CPA program’® to circumvent its contrac-
tual obligations and duties and used its size and
power to coerce and intimidate Ford dealers into
using the Appeal-Level CPA discount program.
Second Complaint at {Qs 65-66. Again, these allega-
tions inform Ford of Plaintiffs’ claim sufficiently to
survive a motion to dismiss.
Finally, Plaintiffs have adequately pleaded Ford’s
violations of the Robinson-Patman Act. Plaintiffs
have alleged that Ford sold trucks of like grade and
quality to dealers at different prices without justifica-
tion and that such conduct has harmed both the
dealers and competition. Ford clearly has notice of
Plaintiffs’ claims, and its Motion to Dismiss should be
denied.
* This program is discussed more thoroughly in the Second
Complaint at 99s 27-40. In general, this program required
dealers to advise Ford of the details of a proposed sale and to
seek unpublished discounts from Ford to achieve that sale.
Failure to conform usually meant that the dealers failed to make
the sale. These allegations are incorporated in Count Two
Violation of Dealer Day in Court Act.
Resp. App. 63
Ill. THE BREACH OF CONTRACT CLAIM IS
PROPERLY PLEADED.
A. Breach of Contract is Properly Pleaded.
Under Michigan law, a cause of action for breach of
contract requires pleading and proof of the following:
(1) the existence of a valid contract [15, 16, 49-56]; (2)
breach by the defendant [58]; and (3) damages prox-
imately caused [59-62]. Dumas v. Auto Club Ins.
Ass’n, 473 N.W. 652, 661 (Mich.1991). Plaintiffs have
pleaded these essential elements of breach of con-
tract. The bracketed numbers above correspond to the
paragraphs of the Second Complaint where the
allegations are found. Since the Court must accept as
true all allegations in the Plaintiffs’ Second Com-
plaint, Ford’s motion to dismiss must be denied.
B. Ford’s “defense” to breach of contract is
spurious. Ford attempts to circumvent the obvious
adequacy of Plaintiffs’ Complaint by urging a reading
of the franchise agreement that is
* * *
during the pendency of appeal). Under the full faith
and credit clause of the United States Constitution,
this Court is bound to give conclusive effect to the
judgment of liability found against Ford on breach of
contract. Ford thus cannot be heard in this Court to
reurge its claim that it did not breach the contract.
Resp. App. 64
Iv. THE DEALER DAY IN COURT ACT CLAIM
IS PROPERLY PLEADED.
A. The Requisite Pleadings. Under 15 U.S.C.
§1221, plaintiffs must plead and prove the following:
(1) the existence of an automotive deal-
er/manufacturer relationship [15, 16, 19]; (2) lack of
good faith by the manufacturer in performing or
complying with any of the terms of the franchise [20,
44-48, 66-68]; and (3) damages proximately caused
[69-71]. Carroll Kenwortn Truck Sales, Inc. v.
Henwarth Truck Co., 781 F.2d 1520, 1525 (1ith Cir.
1986). As before, the bracketed numbers above cor-
respond to the paragraphs in Plaintiffs’ Second Com-
plaint where th- requisite elements are set forth.
Ford’s motion to dismiss this claim must be denied.
B. Ford’s “wrongful demand” argument is
false. Ford argues that Plaintiffs were required to
plead they were subjected to “a wrongful demand by
Ford that would result in sanctions should a dealer
fail to comply.” Ford’s Memorandum, page 9. This is
not a correct statement of the law. Ford relies on
numerous cases, most of which are cited in Colonial
Dodge, Inc. v. Chrysler Corp., 11 F.Supp. 737, 743
(D.Md.1996), aff’d, 121 F.3d 697 (4th Cir. 1997). Like
almost all of the cases Ford cites, Colonial Dodge
invoived a motion for summary judgment, not a
motion to dismiss. Most importantly, Colonial
Dodge discusses a “wrongful demand accompanied
by the threat of sanctions” not as a pleading require-
ment, but as proof of the coercion or intimidation that
Resp. App. 65
establishes lack of good faith. See Colonial Dodge,
11 F.Supp.2d at 743.
No Eleventh Circuit case holds that a wrongful
demand accompanied by threat of sanction must be
expressly alleged to plead properly a Dealer Day in
Court Act claim. Rather, such a demand is one way of
showing the requisite “coercion or intimidation”
under the Act. In fact, courts in the Eleventh Circuit
expressly do not follow the “wrongful demand” rule.
See Stamps v. Ford Motor Co., 650 F.Supp. 390, 397
fn.5 (N.D. Ga. 1986) (refusing to follow cases impos-
ing a “wrongful demand” requirement). The H.C.
Blackwell v. Kenworth Trucking Co." case cited by
Ford confirms that a wrongful demand is only one
manner of triggering the Act. Blackwell held that
“(bjlad faith may consist of coercive conduct mani-
fested by a wrongful demand which will result in
sanctions if not complied with.” Id. at 107. The opera-
tive term in this quote is “may consist of.” The case
does not say that such a demand is the only way to
plead or prove coercion or intimidativa.
C. Plaintiffs have pleaded a “wrongful
demand.” Even if a wrongful demand is an element
which must be pleaded to state a claim pursuant to
the Dealer Day in Court Act, which it is not, Plaintiffs
have pleaded such a demand. See Second Complaint
at 7s 66-68. Construing the Second Complaint and
all reasonable inferences therefrom in the light most
© 620 F.2d 104 (5th Cir. 1980).
Resp. App. 66
favorable to Plaintiffs, Plaintiffs have alleged that
Ford demanded that dealers participate in the CPA
program “or else” suffer unfair, illegal and non-
contractual pricing. Through coercion of the economic
variety, Ford demanded that dealers use the CPA
program in place of the dealer’s contractual right to
have published, and hence equivalent, pricing. That
is, Ford forced dealers to accept the unlawful terms of
the CPA program, and the discriminatory prices that
system created, under the threat of paying prices far
greater than they were entitled to have under the
plain language of the franchise agreement. Ford
essentially told dealers: “Participate in the CPA
program or you will be forced out of business by
having to pay exorbitant wholesale prices, greatly in
excess of what other dealers are paying for the same
products, and greatly in excess of what you are oth-
erwise entitled to pay under your franchise agree-
ment.”
A wrongful demand may be implicit as well as
overt. “A wrongful demand can be implicit, inferable
from facts and circumstances without any showing of
a formal one.” Sherman v. British Leyland Motors,
Ltd., 601 F.2d 429, 446 (9th Cir. 1979). See also
Overseas Motors v. Import Motors, Ltd., 519 F.2d
119, 124-25 (6th Cir.), cert. denied, 423 U.S. 92
(1975) (threats and demands can be implicit as well
as overt). In Sherman, the court held that a violation
of the antitrust laws itself may lead to the conclusion
that the Dealer Day in Court Act has been violated.
Sherman, 601 F.2d. at 446-47. Here, the Plaintiffs
Resp. App. 67
have pleaded an antitrust violation. They have also
pleaded a wrongful demand in the form of an implicit
threat to their economic well-being.
The pleadings support and the jury could find
that Ford’s conduct constitutes a wrongful demand
and coercive behavior. “[I)f Ford, through a series of
acts, deprived (plaintiff dealer) of the right as an
independent businessman to control its own business
to serve (Ford Motor’s) own economic interest and in
disregard of (the dealer’s) interest, a violation of the
Act could result.” Colonial Ford, Inc. v. Ford
Motor Co., 577 F.2d 106, 110 (10th Cir. 1978), cert.
denied, 444 U. S. 837 (1979). This is exactly what
Ford has done with the CPA program. Ford forced the
CPA program on dealers, which controlled the dealers’
business, to the benefit of Ford and to the detriment
of the dealers.
D. The inquiry into “coercion and intimi-
dation” is inherently fact-specific. Based on cases
in far different procedural postures, Ford urges that
Plaintiffs can not go forward on their Dealer Day in
Court claims based on lack of evidence in these other
cases. However, the issue of coercion or intimidation
under the Act is inherently fact-specific and is thus a
jury question not susceptible to a ruling on motion to
dismiss. H.C. Blackwell, 620 F.2d at 107. See also
Colonial Dodge, 11 F.Supp.2d at 743 (coercion and
intimidation can be inferred from a course of con-
duct). The court in Capital Ford II granted sum-
mary judgment on the Dealer Day in Court Act claims
based on lack of evidence of coercion. Capital Ford
Resp. App. 68
IT, 819 F.Supp. at 1555-56. Likewise in Overseas
Motors, supra, the granting of directed verdict was
based on lack of evidence. See also, Cabriolet
Porsche Audi, Inc. v. American Honda Motor Co.,
773 F.2d 1193, 1210-11 (11th Cir.), cert. denied, 475
U.S. 1122 (1986) (lack of evidence of coercion; judg-
ment reversed); Bob Maxfield, Inc. v. American
Motors Corp., 637 F.2d 1033, 1039 (5th Cir.), cert.
denied, 454 U.S. 860 (1981) (lack of evidence of coercion
or intimidation; directed verdict affirmed). Compare
H.C. Blackwell Co., 620 F.2d at 107 (jury finding of
coercion satisfactory; judgment NOV reversed and
jury verdict reinstated).
The Third Circuit has held that a dealer is en-
titled to discover evidence to support a “bad faith”
claim based on a manufacturer’s allocation of trucks
that was slowly driving the dealer out of business.
The Third Circuit held that such tactics may well
prove a Dealer Day in Court claim, even though there
was no “wrongful demand” pleaded or proved. Arnold
Pontiac-GMC, Inc. v. General Motors Corp., 786
F.2d 564, 575-76 (3rd Cir. 1986).” Here, Ford is al-
leged to have coerced Plaintiffs through price controls
just as effectively as was the plaintiff in Arnold
Pontiac through allocation controls.
* See also Randy’s Studebaker Sales, Inc. v. Nissan
Motor Corporation in the USA, 533 F.2d 510, 516-17 (10th
Cir. 1976) (manufacturer’s control of retail pricing through price
controls may serve to trigger Dealer Day in Court liability).
Resp. App. 69
Cases where plaintiffs failed to develop evidence
necessary to overcome motions for summary judg-
ment or directed verdict do not support the granting
of Ford’s Motion to Dismiss here. Plaintiffs are en-
titled to discover and present evidence that supports
their claim.
E. The Statute and Legislative History
Contradict Ford’s Argument. Finally, Ford wrong-
ly argues that failure to comply with franchise terms
will not support a Dealer Day in Court action. The
legislative history of the Act, and the actual language
of the Act, both belie this argument. “An automobile
dealer may bring suit against any automobile manu-
facturer ... by reason of the failure of said automo-
bile manufacturer ... to act in good faith in
performing or complying with any of the terms or
provisions of the franchise.” 15 U.S.C. §1222. “This
bill assures the dealer an opportunity to secure a
judicial determination, irrespective of the contract
terms, as to whether the automobile manufacturer
has failed to act in good faith in performing or
complying with any of the provisions of his
franchise or in terminating, canceling, or not renew-
ing his franchise.” H.R.Rep.No.2580, 85th Cong., 2d
Sess. (1956), 3 U.S.Code Cong. and Admin.News,
1956, p. 4600 (emphasis added). Cases cited by Ford
for the contrary proposition do not stand for the
proposition Ford alleges”. “The federal [Dealer Day in
" Hanley v. Chrysler Motors Corp., 433 F.2d 708 (10th
Cir. 1970), does not hold, as Ford implies, that a breach of
(Continued on following page)
Resp. App. 70
Court] act was designed to create a level playing field
for negotiations between local businessmen and
multinational automotive companies.” Sherwood
Ford v. Ford Motor Company, 875 F.Supp. 590, 593
(E.D. Mo. 1995). Ford’s cases do not support its Mo-
tion to Dismiss.
V. THE ROBINSON-PATMAN ACT CLAIM IS
PROPERLY PLEADED.
A. Plaintiffs Have Satisfied the Pleading
Requirements. According to the Supreme Court, a
plaintiff must plead and prove the following elements
in a Robinson-Patman Act case: (1) two or more sales,
at least one of which was made in interstate com-
merce |13, 18,
contract will not support a statutory claim under the Dealer Day
in Court Act; rather, the case states in dicta that the statutory
action is in addition to any common-law breach of contract claim
the dealer may have. Globe Motors, Inc. v. Studebaker-
Packard Motors Corp., 328 F.2d 645 (3rd Cir. 1964), holds
only that the Dealer Day in Court statute “does not provide a
new remedy for breach of contract,” not that a breach of fran-
chise terms may not be the basis for a suit under the statute.
Quarles v. General Motors Corp., 597 F.Supp. 1037 (D.C.N_LY.
1984), aff'd 758 F.2d 839 (2nd Cir. 1985), related to dealership
termination, not breach of contract; the court said in dicta that
the Act did not create a new federal remedy for breach of
contract. It did not hold that breach of franchise terms would
not be germane to claims under the Act. General Motors Corp.
v. MAC Co., 247 F.Supp, 723 (D. Colo. 1965), does not hold or
even imply that
*
Resp. App. 71
* * +
discounts so as to maximize its profits and to control
Plaintiffs’ profits. If Ford had published those prices
or discounts as its franchise agreement required it to
do, all dealers would have been entitled to buy prod-
ucts for those published prices, and Ford’s argument
of “equal availability” would have some merit. How-
ever, Ford did not do so. Therefore, Ford’s argument
that these secret prices were really “available” to all
dealers, and that the dealers, contrary to good com-
mercial practices, simply chose not to take advantage
of their availability, is false and inconsistent with the
allegations in the Second Complaint which the Court
must accept as true at this time.
The CPA discounts offered to dealers under the
appeal process were never published, known or
available to all dealers on all sales of comparable
trucks. Thus, the Fifth Circuit Metro Ford case does
not apply here.
CONCLUSION
Plaintiffs have pleaded three causes of action
consistent with the requirements of Fed.R.Civ.P. 8
and the substantive claims made. Plaintiffs clearly
have stated claims for which relief can be granted.
Ford’s Motion to Dismiss is predicated on cases where
lack of evidence was the controlling factor or on cases
that were decided on grounds not applicable here.
Ford’s Motion must be denied.
Resp. App. 72
RESPECTFULLY SUBMITTED:
POPE, McGLAMRY,
KILPATRICK &
MORRISON, LLP
/s/ (INegible]
C. Neal Pope
Georgia Bar No. 583769
Michael L. McGlamry
Georgia Bar No. 492515
Wade H. Tomlinson, III
Georgia Bar No. 714605
The Pinnacle
3455 Peachtree Road,
N.E.
Atlanta, Georgia
30326-3243
(404) 523-7706
FAX (404) 524-1648
BRINSON, ASKEW, BER-
RY, SEIGLER, RICHARD-
SON & DAVIS, LLP
Robert M. Brinson
Georgia Bar No. 082900
615 West First Street
P.O. Box 5513
Rome, Georgia
30162-5513
(706) 291-8853
(706) 234-3574
Resp. App. 73
JAMES A. PIKL, P.C.
James A. Pikl
Texas Bar No. 16008850
P.O. Box 2939
McKinney, Texas
75070
ATTORNEYS FOR
PLAINTIFFS
Resp. App. 74
[Seal]
MEMORANDUM
TO: Counsel of Record
FROM: Robert L. Vining, Jr.
RE: Bayshore Ford Truck Sales v. Ford Motor
Company, Civil Action No.: 4:99-CV-173
DATE: February 2, 2000
It has come to the court’s attention that the order
docketed January 19, 2000 in the above-referenced
case contains a typographical error. The second to
last sentence in the first full paragraph on page eight
omitted the word “not”; that paragraph should read
as follows:
As such, Ford’s demand, explicit or implicit,
that the plaintiffs participate in the CPA
program or pay inflated published wholesale
prices is not a wrongful demand and does not
constitute coercion or bad faith within the
meaning of the Dealers’ Day in Court Act.
Enclosed is a corrected copy of the order for your files.
Resp. App. 75
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF GEORGIA
ROME DIVISION
Bayshore Ford Truck Sales,
Inc., et al.,
Plaintiffs,
CIVIL ACTION
No. 4:99-CV-173-RLV
Vv.
Ford Motor Company,
Defendant.
(Filed Jan. 19, 2000)
This action arises out of various franchise
agreements between Ford Motor Company and five
Ford medium- and heavy-duty truck dealers. The
plaintiffs allege that the defendant, Ford Motor
Company (“Ford”), breached its contracts with the
plaintiffs and violated several federal statutes in
administering its pricing programs. Before the court
is the defendant’s motion to dismiss for failure to
state a claim upon which relief could be granted
pursuant to Fed. R. Civ. Pro. 12(b)(6) [Doc. No. 16].
Resp. App. 76
I. FACTUAL BACKGROUND'
Until 1998, each of the five plaintiffs was a Ford
heavy- and medium-duty truck dealer that serviced
customers throughout the United States.’ The plain-
tiffs, therefore, competed with each other and with
dealers of other brands of medium- and heavy-duty
trucks on a nationwide basis. Each plaintiff operated
under a franchise agreement with Ford, the material
terms of which are substantively identical to each
other. Under the franchise agreements, the plaintiffs
would purchase heavy- and medium-duty trucks and
other company products, such as replacement parts,
from Ford for resale to the public.* According to
Paragraph 10 of the franchise agreement, Ford was
required to publish all prices and discounts to the
plaintiffs, as follows:
Sales of COMPANY PRODUCTS by the
Company to the Dealer hereunder will be
made in accordance with the prices, charges,
‘ The court draws the facts from the plaintiffs’ complaint,
the allegations of which the court must accept as true for
purposes of ruling on Ford’s motion to dismiss. See, Roberts v.
Florida Power & Light Co., 146 F.3d 1305, 1307 (11th Cir. 1998).
* Ford ceased manufacturing and distributing heavy- and
medium-duty trucks in 1998.
° Ford’s medium- and heavy-duty trucks were sold to
dealers as bare chassis. The chassis was a component of the
complete vehicle, which was usually assembled by the dealer, a
special company called a “body company,” or by the final, retail
customer. The chassis was typically ordered by the dealer for
resale to a particular retail customer and was configured to the
retail customer's specifications.
Resp. App. 77
discounts and other terms of sale set forth in
price schedules and other notices published
by the Company to the Dealer from time to
time in accordance with applicable HEAVY
TRUCK TERMS OF SALE BULLETIN or
PARTS AND ACCESSORIES TERMS OF
SALE BULLETIN. Except as otherwise spe-
cified in writing by the Company, such pric-
es, charges, discounts and terms of sale shall
be those in effect, and delivery to the Dealer
shall be deemed to have been made and the
order deemed to have been fiiled on the date of
delivery to the carrier or the Dealer, whichever
occurs first. The Company has the right at any
time and from time to time to change or
eliminate prices, charges, discounts, allow-
ances, rebates, refunds or other terms of sale
affecting COMPANY PRODUCTS by issuing
a new HEAVY DUTY TRUCK or PARTS
AND ACCESSORIES TERMS OF SALE
BULLETIN, new price schedules or other no-
tices.
Although the plaintiffs admit that Ford published
wholesale prices to them, the plaintiffs contend that,
in approximately 1980, Ford began intentionally
pricing its medium- and heavy-duty trucks at whole-
sale prices far in excess of the retail prices these
trucks could command in the marketplace. At about
the same time, Ford also implemented a pricing
program called the “Competitive Price Assistance,” or
“CPA,” program whereby the plaintiffs could apply for
and receive discounts or concessions off these inflated
wholesale prices, reducing the final wholesale price to
Resp. App. 78
a level below the retail price at which the trucks were
resold. As a consequence, the plaintiffs were not able
to resell Ford medium- and heavy-trucks for a profit
without the CPA program.
According to the plaintiffs, the true purpose of
the CPA program was to allow Ford to control dealer
profits on the sale of medium- and heavy-duty trucks.
Ford accomplished this goal by offering two levels of
discounts through the CPA program. The first level,
called the “Rainbow Schedule” discounts, was pub-
lished to the plaintiffs and was generally available to
all dealers at all times on virtually all sales.* The
second level, called the “Appeal-level CPA” discounts,
was not published to the plaintiffs or made generally
availabie to all dealers.
The plaintiffs contend that the Appeal-level CPA
discounts were given by Ford at its sole discretion based
on unpublished criteria.’ As a result, the plaintiffs had
* This level was later discontinued and replaced with
another program called the “Sales Advantage CPA.” This
program also was published to the plaintiffs and made generally
available to all dealers.
* Specifically, when applying for an Appeal-level CPA
discount, the dealer was required to identify the retail customer
and provide the proposed retail price. Ford then responded in
one of three ways: (1) no Appeal-level CPA discount was given;
(2) an amount of Appeal-level CPA discount was given, but that
amount was insufficient to bring the published wholesale price
below the retail price; or (3) just enough Appeal-level CPA
discount was given to reduce the published wholesale price to a
level that allowed the dealer to realize a profit of between 0%
(Continued on following page)
Resp. App. 79
no way of knowing whether they were receiving the
greatest possible Appeal-level CPA discount. Ford’s
Appeal-level CPA discounts on comparable trucks
could vary among dealers by as much as $15,000 per
truck.
In addition to the Appeal-level UPA discounts,
Ford also operated a price program on replacement
parts to dealers. Under this program, certain dealers
could obtain unpublished discounts off the published
wholesale price on certain purchases of replacement
parts. These unpublished discounts were not avail-
able to the plaintiffs or to all dealers generally. Ac-
cording to the plaintiffs, Ford intentionally withheld
information and deceived and misied the plaintiffs
about the Appeal-level CPA and replacement parts
discounts Ford was offering to some dealers.
The plaintiffs filed this law suit alleging that
Ford breached the price publication requirements of
the franchise agreements and violated the Dealers’
Day in Court Act and the Robinson-Patman Act. Ford
filed a pre-answer motion to dismiss all three of the
plaintiffs’ cl
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