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Phil Tolkan Datsun Inc. v. Greater Milwaukee Datsun Dealers' Advertising Association Inc.

decided: March 2, 1982.


Appeal from the United States District Court for the Eastern District of Wisconsin. No. 79-C-818 -- Terence T. Evans, Judge.

Before Cummings, Chief Judge, Cudahy, Circuit Judge, and Campbell, Senior District Judge.*fn*

Author: Cudahy

In this private antitrust action, plaintiff-appellant Phil Tolkan Datsun ("Tolkan" or "Tolkan Datsun") appeals from a grant of summary judgment in favor of defendants Greater Milwaukee Datsun Dealers' Association (the "Association") and its individual members and directors. Because we agree that the undisputed facts demonstrate the absence of federal antitrust liability, we affirm the judgment of the district court.


The Nissan Motor Corporation ("Nissan") distributes its Japanese-made automobiles and trucks in the United States under the name "Datsun". In 1976, Nissan began encouraging Datsun dealers in this country to form advertising associations. Nissan offered to add $40 to the invoice of each car or truck sold to each dealer in an area, and to distribute this money to the local association for joint advertising purposes. In addition to the benefits of joint advertising, association members were to be allowed extra allotments of cars for special Datsun promotions.

Defendants AFL Motors, Inc., Zimdars Motors, Inc. and Waukesha Datsun, Inc. are all Datsun dealers located in and around Milwaukee, Wisconsin. On August 2, 1978, AFL Motors, Zimdars Motors and Waukesha Datsun formed the Greater Milwaukee Datsun Dealers' Association, also a defendant here. On that day the Association adopted corporate by-laws which included a requirement that existing members unanimously approve the admission of any new member.

On January 17, 1979, Nissan sent a letter to all car dealers in the four-county Milwaukee area, "actively soliciting candidates with automobile background and necessary capital" to establish an additional Datsun dealership in the North Milwaukee area. AFL and Zimdars objected to this solicitation because they believed Nissan was not supplying them with enough new cars to meet existing customer demand. AFL Motors was also upset about Nissan's search for an additional dealer because in mid-1978 AFL had moved several miles north from its central city location to provide Nissan with the "North Milwaukee" dealership Nissan was now soliciting.

On March 21, 1979, Nissan sent its Milwaukee dealers a letter stating that a new Datsun dealership would be located at 7676 North 76th Street, Milwaukee, the address of Phil Tolkan Pontiac, Inc. On March 28, 1979, AFL Motors and Zimdars Motors wrote to Nissan, formally objecting to the new dealership. On April 17, 1979, AFL and Zimdars filed an action in state court seeking to enjoin Nissan from appointing a new Milwaukee-area dealer. On May 1, 1979, Tolkan Datsun was formally appointed a Datsun dealer, and on May 7, Tolkan's state dealership license issued. Upon the application of AFL and Zimdars, the state court issued an ex parte temporary restraining order on May 7, 1979, prohibiting Nissan from establishing a Datsun dealership at 7676 North 76th Street. After a hearing on May 14, 1979, the temporary restraining order was dissolved.

Sometime in May 1979, Nissan presented to Tolkan Datsun, and the dealership signed, an application for membership in the defendant Association. Apparently, this application was never forwarded to the Association itself. Nevertheless, the subject of Tolkan's possible membership was discussed at an Association meeting on May 25, 1979. According to minutes taken at that meeting, Phil Tolkan was to be called and asked to apply for membership so that the Association could consider his application.*fn1

In the meantime, the Association had been planning a special Datsun promotion. On March 21, 1979, the Association discussed the submission of a proposal involving the sale of Datsun 210s, the lowest-priced Nissan car. On March 22, 1979, the vice president of AFL Motors, the president of Zimdars Motors, and the secretary of Waukesha Datsun sent identically-worded letters to Nissan's regional sales manager, Robert Bower, each requesting 100 Datsun Model 210 hatchbacks for the special promotion. Kenneth Ausman, the president of the Association, also sent a letter in his official capacity asking for the 300 cars. On April 19, 1979, Bower wrote to Ausman as Association president to inform him that the request "for 300 additional 210 models for your scheduled advertising promotion has been approved." Bower indicated that production of the cars was scheduled for mid-May, with delivery to take place in mid-to-late June. On May 22, 1979, Bower wrote to Ausman, again as Association president, to advise of receipt of a "preliminary notice of shipment of the vehicles for your Association's promotion."

The Association's first advertising appeared in the Sunday, June 10, 1979, Milwaukee Journal. Because Tolkan Datsun was not among the dealers listed, Thomas Weil, president of Tolkan, called Bower to complain. On June 11, 1979, Bower wrote to Ausman as Association president informing Ausman that Tolkan had signed an application supplied by Nissan for membership in the Association. On June 14, 1979, Ausman answered by letter, stating that

Although Phil Tolkan requested information concerning membership in our Advertising Association, we have not yet received a formal application as called for by our by-laws. As a courtesy to Phil Tolkan, we have, by letter of even date, forwarded to them our application should they be interested.

Shortly thereafter, Tolkan substantially completed and returned the Association's application, along with a letter objecting to some of the questions on the form.

At an Association meeting on July 9, 1979, AFL, Zimdars, and Waukesha Datsun discussed Tolkan Datsun's application for membership in the Association. The members decided that Tolkan's admission would not be considered until September 1, 1979, or until the end of the 210 promotion, whichever occurred first. In a letter dated July 20, 1979, Ausman as Association president informed ...

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