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REISNER v. GMC

March 30, 1981

Frank Reisner, d/b/a Intermeccinica Automobili and Indra Imports, Inc., Plaintiffs,
v.
GENERAL MOTORS CORPORATION and Adam Opel, A.G., Defendants



The opinion of the court was delivered by: GOETTEL

The plaintiffs in this antitrust action are Frank Reisner, a Canadian citizen now living in California, who owned and operated a small automobile manufacturing company in Italy, and Indra Imports, Inc., a New Jersey corporation, which was Reisner's importer and distributor in the United States. The defendants are General Motors Corporation, the giant manufacturer of automobiles and other products, and Adam Opel, A.G., a wholly owned General Motors subsidiary, which is incorporated in Germany.

Factual Background

In 1970, Reisner's company, Intermeccanica Automobili, in Turin, Italy, was manufacturing a sports car called the Italia, which was powered by a Ford engine. In the early fall of that year, Frank Reisner met with Robert Lutz, the General Sales Manager of Opel, and discussed Reisner's manufacturing a new car using General Motors engines and certain components *fn1" used in the Opel Diplomat. Reisner then designed and began to manufacture his new car, the Indra, using the Opel drive train components and a Chevrolet 327 engine, which was the General Motors engine used in the Opel Diplomat. The first Indra was shown at the International Auto Show in Geneva, Switzerland, in the spring of 1971. For the next two years, Reisner manufactured Indras, with Opel components and Chevrolet 327 engines purchased from Opel through a German company (Bitter GmbH & Co. KG) established by Erich Bitter, who was Reisner's distributor and representative in West Germany, Switzerland, and the Benelux countries. Reisner attempted to sell his cars in Germany through Opel distributors, apparently without marked success. *fn2"

 In May 1972, Reisner contacted General Motors Italia SpA, an Italian subsidiary of General Motors, seeking to purchase the Chevrolet 350 engine for the Indra so that he could sell his car in the United States. *fn3" The Chevrolet 350 not only was more powerful than the Chevrolet 327, but also, unlike the Chevrolet 327, was equipped with pollution control devices that would qualify it for sale in the United States. Reisner had mentioned that his annual production was about one hundred and fifty cars and expressed an interest in purchasing engines in lots of twenty. After he was advised in July 1972 that General Motors would not sell the engines in the low volume he was proposing, *fn4" Reisner and Joseph Vos, who became the president of Indra Imports, Inc. when it was incorporated in May 1973, made further attempts to purchase Chevrolet 350 engines from General Motors. General Motors never agreed to sell the engines to Reisner.

 Unable to buy the Chevrolet 350, Reisner prepared to use the Ford 351 engine, which was equipped with pollution control devices adequate for the United States market, in the Indra. Thereafter, in February 1973, Opel informed Reisner that it would not sell him Opel components for use with the Ford 351 engine. Vos then renewed his attempts to persuade General Motors to sell Reisner the Chevrolet 350 in the numbers he required (less than the announced minimum of two hundred engines per year). He was unsuccessful.

 Reisner claims that as a result of these events he had to abandon his automobile manufacturing business in Italy. Both plaintiffs claim substantial losses in investment and profits.

 Procedural Background

 The plaintiffs filed their original complaint on May 19, 1976, alleging violations of sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2. By stipulation with the defendants, the plaintiffs filed an amended complaint on July 11, 1977, expanding their factual allegations and adding a claim under section 3 of the Clayton Act, 15 U.S.C. § 14. As amended, the complaint alleges essentially a tying violation under section 1 of the Sherman Act and section 3 of the Clayton Act. Although the complaint alleges a monopolization violation under section 2 of the Sherman Act, the plaintiffs have not pursued that claim and appear to have dropped it. *fn5"

 The defendants moved to dismiss in August 1977, and the motion was denied on November 7, 1977. Over the next two years, extensive discovery was taken. On December 18, 1979, after discovery had been completed and while motions for summary judgment were being prepared, the plaintiffs moved for leave to file a second amended complaint, which the defendants (understandably) opposed. On February 14, 1980, the defendants filed their motion for summary judgment, *fn6" which was argued on March 14, 1980. For months thereafter, the parties, principally the plaintiffs, continued to file additional voluminous, unauthorized papers.

 Second Amended Complaint

 The plaintiffs assert that their proposed second amended complaint is needed for three reasons:

 
(i) to eliminate vexatious issues under Section 2 of the Sherman Act (15 U.S.C. Section 2), which are raised therein and which have taken up the time of the Court and the parties, out of all proportion to their importance in this case; (ii) to guard against misunderstanding and misinterpretation of the conspiracy allegations in the Amended Complaint, which the existing record shows is a possible risk; and (iii) to amplify and update the allegations of the Amended Complaint by reference and incorporation therein of matters previously unknown to Plaintiffs, which became known only during the recent discovery which the Court allowed Plaintiffs to conduct.

 (Notice of Motion at 1.) They also assert that the "proposed pleading does not raise new issues"; "will not operate ... to the prejudice of any party"; and will "further the interests of justice, hasten the setting of a trial date, and expedite disposition of this case." (Id. at 2.) The defendants vigorously oppose the granting of leave to file a second amended complaint, arguing that the motion is untimely, made in bad faith, designed to forestall the granting of summary judgment, prejudicial to the defendants, and clearly dilatory.

 Under Rule 15(a) of the Federal Rules of Civil Procedure, leave to amend a pleading should "be freely given when justice so requires." Granting or denying such leave, however, is within the discretion of the court, Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 91 S. Ct. 795, 28 L. Ed. 2d 77 (1971), which has an obligation to determine whether allowing the amended pleading will cause substantial prejudice to the other parties or substantial inconvenience. 6 Wright & Miller, Federal Practice and Procedure: Civil § 1484 (1971).

 Despite the plaintiffs' assertions that the proposed second amended complaint raises no new issues, it does seem to add a new theory of recovery that of group boycott *fn7" in Count Three, which includes paragraphs 36-51. Moreover, it adds many new factual allegations, several of which seem to be inconsistent with allegations in the earlier two complaints *fn8" or seem to be facts that should have been within the ...


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