The opinion of the court was delivered by: Shadur, District Judge.
In this action (the "1983 Action") Car Carriers, Inc. and eight related
entities (for convenience collectively "Car Carriers," treated as a
singular noun), including controlling shareholder James P. Byrne, have
filed a 24-count, 107-page Amended Complaint (the "Complaint" or "1983
Complaint") accusing Ford Motor Company ("Ford"), Nu-Car Carriers, Inc.
("Nu-Car") and the Norfolk & Western Railway Company ("N & W") of
racketeering and various unlawful business practices in contravention of
federal and state law. Ford and Nu-Car now move for dismissal under Fed.
R.Civ.P. ("Rule") 12(b)(6), claiming Car Carriers is barred from
bringing this suit by the res judicata effect of a dismissal with
prejudice of its earlier action against them, Car Carriers, Inc. v. Ford
Motor Co., No. 82 C 7009 (the "1982 Action").*fn1 N & W also moves to
dismiss under Rule 12(b)(6), asserting the Complaint discloses no basis
on which it could be held liable for the alleged practices of Ford and
Nu-Car. For the reasons stated in this memorandum opinion and order, all
defendants' motions are granted and this action is dismissed in its
entirety on the terms hereafter specified.
Car Carriers' 1982 Action alleged Ford and Nu-Car ran Car Carriers out
of the business of shipping Ford automobiles from Chicago. Many of the
relevant facts alleged in that suit are set forth in the Opinion, 561 F.
Supp. at 886-87. Six claims were advanced by the Complaint in the 1982
Action (the "1982 Complaint"): one federal law count under Sherman Act
§ 1, 15 U.S.C. § 1, and five pendent state law counts. This
Court's Opinion dismissed the Sherman Act claim with prejudice because
Car Carriers lacked "antitrust standing" to assert its claim—that
is, the 1982 Complaint affirmatively showed no competitive harm to Car
Carriers because actions attributed to the defendants (561 F. Supp. at
888) constituted "procompetitive rather than anticompetitive activity."
With the Sherman Act claim gone, the state law claims were dismissed
without prejudice as not pendent to any valid federal claim (id. at
Car Carriers' 1983 Complaint also alleges facts surrounding Car
Carriers' termination as a shipper of Ford automobiles. Except for three
conspicuous differences, it is substantially similar to the 1982
1. It goes into greater detail: 24 counts and 529
paragraphs, as against the 1982 Complaint's six counts
and 151 paragraphs.*fn2 Car Carriers' contention
(discussed below) is the 1983 Complaint invokes facts
not within the basic fact situation underlying the
2. It invokes different legal theories. Unlike the
1982 Complaint, which contained only a single federal
law count based on the Sherman Act and five Illinois
law counts, the 1983 Complaint brings six counts under
the Racketeer Influenced and Corrupt Organizations Act
("RICO"), 18 U.S.C. § 1961-1968, one count under
the Elkins Act, codified at 49 U.S.C. § 11902-11904,
and 17 counts under Illinois law.
3. It joins somewhat different parties. N & W was
not a defendant in the 1982 Action and therefore
cannot join with Ford and Nu-Car in invoking res
judicata. In addition the 1983 Complaint adds two
related entities as plaintiffs—Transport
Terminals, Inc. ("Transport") and Selby Transport
Co.—but that addition is irrelevant to res
judicata because the new plaintiffs are in privity
with the plaintiffs in the 1982 Action. Contrast Beard
v. O'Neal, 728 F.2d 894, 896-97 (7th Cir. 1984).
Ford and Nu-Car Res Judicata Motions
Res judicata bars a lawsuit if three essential elements are present,
Lee v. City of Peoria, 685 F.2d 196, 199 (7th Cir. 1982):
(1) a final judgment on the merits in an earlier
action; (2) an identity of the cause of action in both
the earlier and the later suit; and (3) an identity of
parties or their privies in the two suits.
N & W does not join in the res judicata motion, and the additional
plaintiffs in this action do not deny their obvious privity with the
plaintiffs in the 1982 Action. Accordingly only the first two elements of
res judicata are at issue.
1. Final Judgment on the Merits
Because the opinion dismissed the 1982 Action for failure to state a
claim upon which relief can be granted, it was a disposition of the case
on the merits. As our Court of Appeals stated in Bunker Ramo Corp. v.
United Business Forms, Inc., 713 F.2d 1272, 1277 (7th Cir. 1983)
(citations omitted, emphasis in original):
A dismissal for lack of subject matter jurisdiction is
not on the merits and consequently will not bar a
later suit. . . . A dismissal for failure to state a
claim upon which relief can be granted, however, is a
dismissal on the merits and is res judicata. Federated
Department Stores, Inc. [v. Moitie], 452 U.S. [394,]
at 398, 101 S.Ct. [2424,] at 2427 [69 L.Ed.2d 103]
[(1981)]; Harper Plastics, Inc. [v. Amoco Chemicals
Corp.], 657 F.2d [939,] at 945 [(7th Cir. 1981)]. lB
Moore's Federal Practice 110.405 (2d ed. 1982).
Moreover the Opinion's language makes clear this Court intended to
dispose of the 1982 Action on the merits. In its statement of facts the
Opinion assumed as true not only allegations of the 1982 Complaint but
also factual assertions in Car Carriers' memorandum not contained in that
Complaint. This Court said it did so (561 F. Supp. at 886 n. 2) to show
plaintiffs "confront more than mere pleading deficiencies." A the
Opinion's "Conclusion" section stated (id. at 889, footnote omitted):
Ford's and Nu-Car's motions to dismiss are granted.
Because Count I could not possibly be repleaded to
withstand Rule 12(b)(6) onslaught, this entire action
is dismissed—Count I with ...