Gran Turismo 7 Steam Pc
Julia Heaslet
R.C. DICK GEOTHERMAL CORPORATION, Plaintiff,
v.
THERMOGENICS, INC., a corporation, Pacific Energy Corporation, a corporation, Resources Investment Company, a corporation, Hughes Aircraft Company (Inc.), a corporation, Callon Petroleum Company, a corporation, Geothermal Resources International Inc., a corporation, L.A. Hyland, Robert S. Reed and John S. Callon, Defendants and related counterclaims.
This order discusses defendants' motion for summary judgment regarding plaintiff's claims of antitrust violations only. As will be more fully discussed, plaintiff's motion for partial summary judgment will be decided at a later time if it remains relevant. Upon review of the voluminous materials filed in this case and the argument of counsel, this Court grants defendants' motion in part and denies the motion in part.
The Court finds that, as a matter of law, plaintiff cannot establish a per se violation of section 1 of the Sherman Act. The issue of whether defendants' conduct violates section 1 under the rule of reason analysis is severed for prompt trial by this Court. The outcome of the trial on this sole issue will then determine whether the conspiracy and section 2 allegations will be tried. The Court has set a status conference for Tuesday, June 21, 1983 at 9:15 a.m. so that a date can be set for the trial of this severed issue.
The case concerns a factual situation involving a complicated relationship among the parties. Plaintiff is a corporation controlled by Ronald C. Dick (Dick). In 1964, Dick acquired a lease with an option to purchase 1,100 acres of land in Sonoma County. In 1979, plaintiff exercised its option to purchase the property and is now the sole owner.
The facts will be discussed more fully throughout the Order as they become relevant. At this point, it is sufficient to note that since 1966 five different entities have, through sublease or assignment, controlled the steam development of the property. All are named as defendants along with Hughes Aircraft Co. and three individuals.
*1107 At issue is plaintiff's private antitrust action seeking treble damages arising from an alleged conspiracy to suppress the production of geothermal steam on plaintiff's property.[1] Plaintiff contends that this alleged conspiracy effected the unit and total price of steam; the price for steam lands; and the competitive process for the exploration, development and production of steam on plaintiff's property, within one and one-half miles of plaintiff's property, and in the Geyser Area generally. Plaintiff further argues that the objectives of this alleged conspiracy were to effect the price of steam lands in the Geyser Area, to limit the development of steam on plaintiff's property in an attempt to gain control of production in the Area and to force plaintiff to sell his land at substantially below its true market value.
Plaintiff contends that its numerous allegations set forth an unreasonable restraint of trade in violation of section 1 of the Sherman Act. Plaintiff further argues that this same conduct constitutes monopolization, an attempt to monopolize, and a conspiracy to monopolize, in violation of section 2 of the Sherman Act.
Through experience it has been shown "that there are certain agreements or practices which because of their pernicious effect on competition and lack of any redeeming virtue ... [can be] conclusively presumed to be unreasonable and therefore illegal...." Northern Pacific Railway Co. v. United States, 356 U.S. 1, 5, 78 S. Ct. 514, 518, 2 L. Ed. 2d 545 (1958). Such limited situations are deemed to constitute per se violations of the Sherman Act; once the conduct is proved, an anticompetitive effect on competition is presumed. Ron Tonkin, supra, 637 F.2d at 1387; see United States v. National Ass'n of Broadcasters, 536 F. Supp. 149, 155 (D.D.C.1982).
Plaintiff alleges that it has been boycotted because defendants have prevented production of steam by defendants, plaintiff or anyone else and because defendants have made it difficult for plaintiff to acquire or develop any other property in the Geyser Area. Plaintiff further contends that "a concerted limitation of production is simply a form of boycott" (Plaintiff's Response to the Court's Request of September 15, 1981, p. 3), thus constituting a per se violation of section 1.
Id. at 1383. Here, where plaintiff's claim is basically that defendants are not dealing enough, application of the per se rule should be avoided. Even though there may be a horizontal element to the boycott, a pernicious effect on competition cannot be presumed in this factual context.
Plaintiff contends that defendants' alleged agreement to limit production constitutes in itself a per se section 1 violation. In essence, plaintiff is requesting this Court to form a new per se category, an action the Court refuses to take in light of the Supreme Court's admonition in Continental T.V., Inc. v. G.T.E. Sylvania, Inc., supra, 433 U.S. at 58, 97 S. Ct. at 2561. Plaintiff has cited no authority, nor has this Court found any such case, holding that a limitation of production in itself is a per se violation. The authorities cited by plaintiff all involve either price-fixing or horizontal market divisions, each a long-recognized per se category. See, e.g., Plymouth Dealers Assoc. v. United States, 279 F.2d 128, 129 (9th Cir. 1960).
Perhaps aware of the tenuous basis of this claim, plaintiff has attempted to allege price-fixing in conjunction with the limitation of production. Whether defendants have the power to effect price at all is a major issue to be determined in this case in the context of whether they can have an effect on competition. Clearly, plaintiffs' recent price-fixing allegations are too weak *1109 to support a finding of a per se violation.[2]
Finding that plaintiff's antitrust allegations fail to fit within any recognized per se category, the Court must employ the rule of reason standard requiring proof that the defendants' actions were unreasonable. The Ninth Circuit explained the rule of reason analysis as follows:
Kaplan, supra, 611 F.2d at 290. To ultimately prevail in this factual context plaintiff has to establish both the intent and the actual restraint on competition. This process *1110 "involves a consideration of the impact of the restraint on the competitive conditions within the field of commerce in which the plaintiff was engaged and upon those commercially engaged in competition within it." Gough, supra, 585 F.2d at 389.
Whether defendants' alleged conspiracy has effected competition for steam or steam lands must be considered in the following factual context. In 1973, Pacific Gas & Electric Company (PG & E) agreed to build a 55-megawatt power plant (Unit 15) on plaintiff's property. PG & E contracted to buy and defendants agreed to sell geothermal steam produced on that property for the purpose of generating electricity. Unit 15 began operations in 1979, and is currently fueled by steam from both plaintiff's property and the adjoining Filley property. Since 1973 defendants Pacific Energy Corp. and Thermogenics, Inc. have been part of a joint venture exploring and developing the Filley property.
Among plaintiff's many allegations are claims that defendants are suppressing production of steam on the Dick property to benefit the Filley property; that the defendants have failed to develop the Dick property so that its value would be kept artificially low thereby driving plaintiff to sell the property below its market value; and that defendants have limited production in order to purchase surrounding steam lands.
Plaintiff argues that to prevail under rule of reason analysis it need only prove an effect on "competitive conditions" or "competitive processes," as opposed to an effect on price. The required rule of reason showing is an "effect on competition" and, semantic diversions aside, an effect on price is the most common means of proof. Plaintiff has the burden to state what anticompetitive effects it alleges. Gough, supra, 585 F.2d at 389.
The price paid for the steam produced on the Dick property is set by the PG & E contract. Therefore, it would appear that defendants would be unable to have an effect on the price of steam. Plaintiff, however, contends that if the Dick property were developed to its potential, more steam than PG & E would need would be produced. Therefore, plaintiff continues, the price of the steam could be altered through negotiations with other purchasers.
The Court seriously questions whether plaintiff can show any effect on competition. In a large measure, plaintiff's allegations most properly sound in tort. The Court acknowledges, however, that summary judgment is used even more sparingly where the rule of reason is the appropriate standard. Ron Tonkin, supra, 637 F.2d at 1388. As stated at the outset of this Order, the issue of whether defendants' actions impacted competition will be separately tried by this Court. If plaintiff prevails, the Court will hear the remaining antitrust issues conspiracy, monopoly, attempted monopoly and conspiracy to monopolize. If defendants prevail, the antitrust claims of plaintiff will have failed and the pendent state claims will be remanded.
In allowing plaintiff to proceed to trial on the issue of whether defendants' acts violate section 1 under rule of reason analysis, the Court is not altering its previously-stated view that in order to prevail, plaintiff has the burden of showing defendants' actions have impacted competition. The Court rejects any intimation that Blue Shield of Virginia v. McCready, 457 U.S. 465, 102 S. Ct. 2540, 73 L. Ed. 2d 149 (1982) alters this requirement. Whether it be put as "effect on competition," "impact on competitive processes," or "impact on competitive conditions," the result is the same: plaintiff must prove that defendants' activities implicate the antitrust laws by rising beyond mere harm to a competitor.[4]
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