The opinion of the court was delivered by: LA Buy, District Judge.
The second amended complaint in the above cause seeks recovery
against the defendants on three counts.
Prior to the filing of said second amended complaint, which
added the claims under Count II and Count III, plaintiff had
propounded extensive interrogatories to certain of which the
defendants have objected. Rulings on said interrogatories have
been deferred because of the defendants' pending motions directed
to the second amended complaint.
The briefs of the parties on defendants' motion to strike
certain allegations contained in Count I of the second amended
complaint are directed principally to the nature of essential
allegations respecting defendant's alleged acts toward the
plaintiff; that is, whether the acts as alleged are within the
scope of the Automobile Dealers Act. The motion is directed to
Paragraph 38 of the complaint which sets forth thirty-six acts of
the defendants which not only gave raise to the claim under Count
I, but also to those alleged in Count II and Count III.
Both litigants have comprehensively and exhaustively set forth
the history preceding the final passage of the Automobile Dealers
Act. The gravamen of the dispute between them exists in the
application of the definition of good faith set forth therein to
the plaintiff's allegations of what the defendants did to cause
the plaintiff's alleged injury. The statute defines good faith as
"§ 1221. Definitions. As used in this chapter
— * * *
"(e) 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: Provided, That recommendation, endorsement,
exposition, persuasion, urging or argument shall not
be deemed to constitute a lack of good faith."
defendants challenge plaintiff's theory that a claim arises when
the manufacturer has failed to act in a "fair and equitable"
manner; it is urged that more than unfairness and inequity is
required to evoke the remedy provided by the act; that
"The term `fair and equitable' as used in the bill
is qualified by the term `so as to guarantee the one
party freedom from coercion, intimidation, or threats
of coercion or intimidation from the other party.' In
each case arising under this bill, good faith must be
determined in the context of coercion or intimidation
or threats of coercion or intimidation." 3 U.S.Code,
Cong. and Admin.News, 1956, p. 4603.
Defendants urge the deficiency to meet this standard of
subparagraphs (a), (c), (e), (f), (i), (j), (k), (m), (n), (o),
(p) and (q), (r) and (s), (t) and (u), (v), (w), (aa), (cc),
(dd), (ff), (gg), (hh), and (jj). Those subparagraphs which are
prefaced by the word "compel", such as (b), (d), (g), (h), (l),
(x), (y), (z), and (ee), defendants concede, for the purposes of
the motion, that these allegations liberally construed "might be
held to allege grounds for recovery under the act if plaintiff
can prove damages resulting from such acts".
Compulsion is synonymous with coercion and means in general
some actual or threatened exercise of power possessed by the
parties exercising it; but coercion can be accomplished by
indirect means, as coercion which is implied from acts. Thus,
coercion and intimidation is not necessarily limited to exercise
of positive force or direct threats, but may result from any
pressure which puts one in actual fear of loss of property or
injury to business.
The court cannot categorize the questioned allegations as
failing to equate a standard of coercion and intimidation. By the
statutory definition alone, unfair and inequitable conduct may be
of such nature as to constitute coercion and intimidation. A
motion to strike should be sustained only where the allegations
bear no possible relation to the claim asserted, and should be
denied when there is doubt as to whether they raise an issue
under any contingency. For these reasons, the court is of the
opinion that defendant's motion to strike certain allegations
contained in Paragraph 38 of the complaint should be denied.
The court has considered defendants' motion to dismiss Count II
of the complaint for failure to allege a claim under the
anti-trust statutes. No facts, other than those relating to
defendants' conduct toward the plaintiff which have been
incorporated into Count II, are stated from which it can be
determined that the contemplated purpose, tendency and inherent
nature or result of the alleged conspiracy and combination was
that fewer automobiles moved in interstate commerce or that a
monopoly to destroy competition was effected or ...