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CAR CARRIERS, INC. v. FORD MOTOR CO.

April 1, 1983

CAR CARRIERS, INC., ET AL., PLAINTIFFS,
v.
FORD MOTOR COMPANY AND NU-CAR CARRIERS, INC., DEFENDANTS.



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

MEMORANDUM OPINION AND ORDER

Allegations of the Complaint*fn2

From 1968 until late October 1981 Car Carriers and Clark hauled all new Ford automobiles from Ford's assembly plants and railheads in Chicago. Though Clark may have provided haulaway transportation for other automobile producers as well, Car Carriers served only Ford. As to their Chicago traffic*fn3 both carriers operated under carrier authority issued by both the Interstate and Illinois Commerce Commissions. Their rates were therefore subject to the approval of those governmental bodies. Ford also "dictated and controlled" the tariffs by threatening either to oppose any disfavored rate applications or to take punitive action, such as termination. Complaint ¶ 19(d).

Some time during the mid-1970s Ford and some of its other carriers, including Nu-Car, E & L Transport Company ("E & L Transport"), Motor Convoy, Inc. ("Motor Convoy"), Auto Convoy Co. ("Auto Convoy") and Associated Transport, Inc. ("Associated"),*fn4 embarked on a campaign to terminate Car Carriers, Clark and some other carriers then serving Ford*fn5 and to force them to sell their businesses at cut-rate prices. That predatory scheme had five operative elements:

    1. Ford induced each target carrier to invest
  heavily in new tractor-trailer rigs, real estate
  and new terminal facilities "with the promise of
  additional transportation traffic and complete
  agreement with increased tariff rates necessary
  to pay for" those acquisitions. Complaint ¶¶ 19(b)
  and (c).
    2. Ford then precluded those carriers from
  obtaining rate increases sufficient to operate
  their expanded businesses profitably. Complaint
  ¶¶ 19(d) and (e).
    3. With the cooperation of the non-target
  carriers, Ford "[i]nterfered with and prevented
  target haulaway carriers and their affiliates
  from selling their businesses and assets as going
  business concerns or prevented target haulaway
  carriers from consolidation or merger with other
  carriers." Complaint ¶ 19(h).
    4. Ford then terminated its relationship with
  the disfavored carriers, assigning their traffic
  to the co-conspirator carriers.
    5. At that point the favored carriers were in
  the position of acquiring the assets of the
  target carriers at distress prices. Complaint
  ¶ 19(i).

Though Car Carriers' demise generally tracked this scenario, some elaboration of its victimization is instructive. At the inception of the conspiracy in 1975, Ford directed Byrne to sell Car Carriers to someone who would not seek tariff rates as high as those sought by Car Carriers. Byrne then attempted to sell Car Carriers to co-conspirator E & L Transport. After they had executed a letter of intent, Ford induced E & L Transport to renege on the deal by threatening to withhold Car Carriers' Chicago traffic from E & L Transport.

In 1977 and 1978 Ford ordered Car Carriers to purchase 80 new tractor-trailer rigs for $6 million, promising sufficient rate hikes to recover that investment. Though Car Carriers acceded to the demand, Ford thereupon stymied Car Carriers' efforts to obtain regulatory approval for the tariff increases.

In late 1979 Car Carriers attempted to bolster its financial posture by acquiring ATI, another target carrier. Ford not only blocked that consolidation initiative but also terminated ATI. Initially Ford divided ATI's business among Nu-Car, E & L Transport, Car Carriers and Clark. But within three months Ford transferred Car Carriers' share to E & L Transport.

In the summer of 1981 Ford solicited bid proposals from Car Carriers and other Ford Carriers for its Chicago haulaway business, all of which had been allocated to either Car Carriers or Clark. Ford awarded the business to Nu-Car "on the basis ...


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