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GENSER v. INTERN. BROTH. OF ELEC. WORKERS

September 29, 1981

WAYNE GENSER, ET AL., PLAINTIFFS,
v.
INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL NO. 134, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Getzendanner, District Judge.

MEMORANDUM OPINION AND ORDER

Plaintiffs Wayne and Donna Genser (the "Gensers") are the owners of an electrical contracting business. They bring this antitrust action against the defendants International Brotherhood of Electrical Workers Local # 134 (the "Union"), New United, Inc. ("New United"), the Electrical Contractors Association of the City of Chicago, Inc., ("ECAC"), and two business agents for the Union, Bert Van Wetering and Angelo Mazzone.*fn1

In Count I of their Amended Complaint, the Gensers charge that defendants conspired to restrain competition among electrical contractors in Cook County, Illinois, in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1 et seq. They further charge that defendants, individually or in combination, monopolized or attempted to monopolize the electrical contracting business, in violation of Section 2 of the Sherman Act. As a result of these violations, the Gensers allege they lost certain contracts with Capitol for electrical work at the North Riverside Mall. In Counts II and III, the Gensers charge a violation of the Illinois antitrust laws and tortious interference with contractual relations.

This suit was filed in 1977. After two years of extensive discovery, all defendants filed motions for summary judgment. The common basis for these motions is that plaintiffs have failed to allege any facts from which the existence of a conspiracy can be inferred.*fn2

The existence of a conspiracy in this case is crucial. It is an essential element of any violation of Section 1 of the Sherman Act. Plaintiffs have also alleged that defendants violated Section 2, which does not require a conspiracy, but an analysis of the circumstances of this case indicates that none of the defendants, acting alone, could have monopolized or attempted to monopolize the electrical contracting business.

An essential element of a Section 2 violation is the possession of "monopoly power" or the "dangerous probability" of monopoly power. United States v. Grinnel Corp., 384 U.S. 563, 570-71, 86 S.Ct. 1698, 1703-04, 16 L.Ed.2d 778 (1966); 1 Von Kalinowski, Antitrust Laws and Trade Regulation § 802[1]. Plaintiffs have not alleged any facts from which it could be inferred that New United or ECAC possessed the requisite monopoly power or the dangerous possibility of it.

It is logically impossible for the Union, acting alone, to monopolize or attempt to monopolize the electrical contracting business. Monopoly power depends on the possession of sufficient control of the relevant market to constitute a monopoly. Von Kalinowski, id. The relevant market is that area of goods or services in which the defendant competes. Id. The Union's relevant market is labor, not the electrical contracting business; thus the Union could not unilaterally monopolize or attempt to monopolize the electrical contracting market.

In summary, as none of the defendants, acting alone, could have monopolized or attempted to monopolize the electrical contracting industry, whether summary judgment is appropriate depends on whether the Gensers have alleged facts from which the existence of a conspiracy may be inferred. As explained below, the court concludes that the Gensers have failed to do so, and grants summary judgment in favor of the defendants.

Standard for Summary Judgment

The Seventh Circuit has explicitly delineated the appropriate role of summary judgment procedures in antitrust litigation. Havoco of America, Ltd. v. Shell Oil Co., 626 F.2d 549, 553 (7th Cir. 1980). The basic principle is that the court must not dismiss the complaint unless it is clear that the plaintiff could prove no set of facts entitling him to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957). Summary procedures must be used "sparingly" in cases "where motive and intent play leading roles," Poller v. Columbia Broadcasting System, 368 U.S. 464, 473, 82 S.Ct. 486, 491, 7 L.Ed.2d 458 (1962), and the pleadings in private treble damage actions must be afforded liberal construction, Austin v. House of Vision, Inc., 385 F.2d 171 (7th Cir. 1967). A party moving for summary judgment must show that there is no genuine issue of material fact, after all evidence and any inferences drawn from that evidence are construed in the light most favorable to the non-moving party. United States v. Diebold, 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962); F.R.Civ.P. 56.

Although this standard is exacting, there are antitrust cases where summary judgment is appropriate. Lupia v. Stella D'Oro Biscuit Co., 586 F.2d 1163, 166-67 (7th Cir. 1978), cert. denied, 440 U.S. 982, 99 S.Ct. 1791, 60 L.Ed.2d 242 (1979).

  "[O]nce the moving party has met the burden imposed
  by Rule 56 and has demonstrated that the facts on
  which the plaintiffs rely are not susceptible of the
  interpretation sought to be given them, plaintiffs
  must show the existence of significant probative
  evidence supporting the inference urged by them or
  face summary judgment dismissing the complaint."

Weit v. Continental Illinois National Bank & Trust Co., 467 F. Supp. 197, 208 (N.D.Ill. 1978), aff'd., 641 F.2d 457 (7th Cir. 1981) (emphasis added).

In Weit, after eight years of litigation and extensive discovery, the plaintiffs were relying on circumstantial evidence — parallel rates and the opportunity to conspire — to establish the existence of a price-fixing conspiracy. The defendants produced uncontradicted deposition testimony negating any conspiracy. The Seventh Circuit held that this shifted the burden back onto the plaintiffs.

  "[W]hen defendants come forward with denials
  sufficient to shift the burden under Rule 56(e),
  plaintiffs must come forward with some significant
  probative evidence which suggests that [the
  circumstantial evidence] is the result of an unlawful
  agreement. Parallel behavior and the hope that
  something further can be developed at trial is not
  sufficient to warrant a trial on the merits. . . . If
  plaintiffs are to proceed to trial, they must be able
  to point to some probative evidence that [the
  allegedly unlawful conduct] resulted from unlawful
  agreement rather than lawful business reasons."

641 F.2d at 462 (citations omitted).

Although the instant case does not involve a price-fixing conspiracy, the Seventh Circuit's analysis is equally applicable here. As in Weit, the litigation here has gone on for some time and there has been extensive discovery. As did the Weit plaintiffs, the Gensers rely on circumstantial evidence to establish the existence of a conspiracy, and the Union, ECAC and New United deny the existence of any concerted action, as did the Weit defendants. The burden thus shifts back to plaintiffs to come forward with "significant probative evidence" showing that defendants' actions were the result of an unlawful agreement. This plaintiffs have failed to do.

In their complaint, plaintiffs do not allege any overt acts in furtherance of the conspiracy, merely alleging the existence of a conspiracy between defendants and Capitol to restrain trade in the electrical contracting business. Plaintiffs allege that, by the terms of this conspiracy, the conspirators agreed to restrict who could engage in the electrical contracting business in Cook County, to favor those who gave bribes to the Union and its agents, and to eliminate those who refused to do so.

From these allegations, it is clear that the heart of plaintiffs' complaint is that Van Wetering and Mazzone attempted to extort illegal payments from the Gensers, and that when the Gensers refused, they were driven out of business. Assuming these allegations are true, they constitute an antitrust violation only if an agreement existed between the Union or its agents and other electrical contractors.

Plaintiffs' Factual Allegations*fn3

In July, 1975, Genser contracted to perform electrical work at a real estate office in the Plaza Verde shopping center in Buffalo Grove, located in Cook County. Genser met with defendant Burt Van Wetering, who is the Union's business agent in that area. At this meeting, Genser signed a "B" letter of assent with defendant IBEW, Local # 134.*fn7

Local # 134 has a collective bargaining agreement with ECAC, which is a multi-employer association. This collective bargaining agreement is referred to as the "Principle Agreement" or "Agreement." Individual contractors who are members of ECAC are parties to the Agreement by virtue of their membership. An electrical contractor who does business in Cook County but is not a member of ECAC could become a party to the Agreement by signing a letter of assent.

There are two types of these letters, an "A" letter of assent and a "B" letter. An "A" letter is available to contractors operating in Cook County on a permanent basis and is valid for an indefinite period, while a "B" letter is available to contractors temporarily working in Cook County and is only valid for a specified period.*fn8

In August, 1975, Genser was awarded contracts on two more jobs in Cook County, one at a shoe store in the Plaza Verde shopping center and one for the Casual Corner Store at the North Riverside Mall.*fn9 His original "B" letter having expired, Genser and his foreman met with Van Wetering.

What transpired at this second meeting is disputed. Genser alleges that he informed Van Wetering that he intended to work permanently in Cook County.*fn10 Genser also alleges that Van Wetering warned him about competing with ECAC firms or else he would "never know what hit [him]."*fn11

Genser later bid on, and was awarded the contract for, two other Capitol jobs at North Riverside Mall, plus another subcontract with a different general contractor, Tavaglione Construction Company. In all, then, plaintiffs were working on four jobs at the Mall.

In late August, 1975, the Gensers began work on the Casual Corner Store. It is undisputed that the job quickly fell behind schedule. The parties have each blamed the other for this turn of events. The Gensers claim that Capitol failed to provide walls and floors on schedule, to properly coordinate and supervise the work at the store, or to supply adequate blueprints. Capitol, in its turn, claims that the Gensers undermanned the job.

Genser alleges that when he first began work at North Riverside Mall, he contacted Mazzone, who was the Union's business agent for that area, about hiring union men. Genser implies that Mazzone asked for a bribe.*fn12 Genser does admit that whenever he requested additional men, electricians were referred to him by the Union without delay.*fn13 However, plaintiffs allege that the work on the Casual Corner Store was frequently disrupted by problems with the union men, including absenteeism, insubordination, work slowdowns, theft, and harassment by Mazzone.

On approximately October 22, 1975, Phil Dillon, Vice-President of Capitol, decided to replace Genser Electric as electrical subcontractor on the Casual Corner job. In his deposition, Dillon testified that after he had decided to replace Genser Electric, he contacted Mazzone to find out what he should do with regards to the Union. Dillon asserts this was the first time he ever spoke with Mazzone.*fn14 Mazzone purportedly told Dillon that it would be necessary for Capitol to obtain a release from Genser Electric.

On October 23 and 24, Dillon asked Genser's supervisors to obtain permission from the Union to work overtime on the weekend of October 25-26. Permission was denied.*fn15

On the morning of October 25, 1975, Dillon and Michael Beary of New United agreed that New United would take over the Casual Corner job from Genser Electric, provided Genser agreed to execute a release.*fn16 Genser then arrived and a handwritten release was executed by Genser and Dillon. Later that day, Dillon and Beary met with Mazzone. Two things transpired at this meeting: Mazzone told Dillon the release had to be notarized, and he denied Dillons' request to work overtime.*fn17

Dillon met again with Genser and executed new documents, which were notarized. Dillon then made two more phone calls to Mazzone in an attempt to get overtime permission for Sunday, October 26. Mazzone again refused to authorize the overtime, but he told Dillon he would not be at North Riverside Mall on Sunday to stop it, either.*fn18 Dillon then instructed New United to work on Sunday, and New United did in fact work that day. On ...


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