494 F.

2d 840
1974-1 Trade Cases 74,998

SCOOPER DOOPER, INC., Appellant,

v.
KRAFTCO CORP., Appellee.
No. 73-1836.

United States Court of Appeals, Third Circuit.

Argued Jan. 25, 1974.
Decided March 26, 1974.

Nathan L. Posner, Victor Wright, Donald Brown, Philadelphia, Pa., for

appellant; Fox, Rothschild, O'Brien & Frankel, Philadelphia, Pa., of
counsel.
William H. Lowery, Richard R. Rulon, John F. Wilson, III, Philadelphia,
Pa., for appellee; Dechert, Price & Rhoads, Philadelphia, Pa., of counsel.
Before BIGGS, GIBBONS and GARTH, Circuit Judges.
OPINION OF THE COURT
GARTH, Circuit Judge.

Appellant Scooper Dooper, Inc., requests that this Court undertake a fullscale
analysis of the antitrust implications of a qualified refusal to deal by Kraftco
Corporation. Considerations of proper judicial administration require us to
decline the invitation to measure Kraftco's conduct against the proscriptions of
the Sherman Act. On the basis of collateral estoppel, we affirm the District
Court's grant of summary judgment in favor of Kraftco.
I. PROCEDURAL HISTORY

Defendant-appellee Kraftco (formerly National Dairy Products) manufactures

and distributes ice cream products under the trademarks of Sealtest and Breyers
and also under private labels. Among its several plants, Kraftco operates

Breyers Division processing factories in Long Island City (New York) and in
Philadelphia. Kraftco's collective bargaining agreements with the New Jersey
and New York locals of the Milk Drivers and Dairy Employees Union contain
the following provision:
3

'The Company agrees for the term of this Agreement not to remove its
manufacturing operations from the area of (the Local) and to continue to
manufacture within the area of (the Local), and the Company, including any
affiliates or subsidiaries, agrees that it shall not establish or operate a plant for
production of ice cream or frozen dessert products outside of (the Local) area
for sale or distribution of such products in the Metropolitan Area; . . .'

The 'Metropolitan Area' consists of New York City, the counties of Suffolk and
Nassau in New York State, and the counties of Union, Essex, Bergen, Hudson,
Passaic, Middlesex, Ocean, Somerset, Morris, Monmouth, Hunterdon, Sussex
and Warren in New Jersey.

Plaintiff-appellant Scooper Dooper, Inc., a distributor of ice cream products,

has found its business threatened by the above bargaining provision. Since
1963, Scooper Dooper distributed ice cream produced by Kraftco's Philadelphia
plant to retailers in Delaware, Pennsylvania, and southern New Jersey. At some
point in the late 1960's,1 Scooper Dooper began selling the Philadelphia-based
ice cream in northern New Jersey. Kraftco's New York and New Jersey unions,
recognizing that this new policy meant that ice cream produced by Kraftco in
Philadelphia would be sold within the Metropolitan Area, protested that their
collective bargaining agreement with Kraftco had been violated. In 1969, the
matter was submitted to arbitration. The arbitrator ruled that the new marketing
policy violated the bargaining agreement and contravened the parties' intent to
protect the labor standards achieved in the Metropolitan Area. The arbitrator
ordered Kraftco to cease and desist from supplying products from its
Philadelphia plant to Scooper Cooper for delivery in the Metropolitan Area.

Undaunted, Scooper Dooper and Kraftco sought (in the Southern District of
New York) a declaratory judgment invalidating both the bargaining agreement
and the arbitration award to the extent that they precluded Scooper Dooper
from reselling Kraftco's Philadelphia ice cream in the Metropolitan Area. The
co-plaintiffs argued that under the doctrine of United States v. Arnold, Schwinn
& Company,2 388 U.S. 365, 87 S.Ct. 1856, 18 L.Ed.2d 1249 (1967), the
exclusion of Kraftco's Philadelphia goods from the northern New Jersey market
constituted a per se violation of Section 1 of the Sherman Act. District Judge
Frankel disagreed. In National Dairy Products Corp. v. Milk Drivers & Dairy
Employees Union, Local 680, 308 F.Supp. 982 (S.D.N.Y. 1970), Judge Frankel

held that:
7

1) Schwinn was distinguishable, in that the plaintiffs before Judge Frankel had
not alleged a conspiracy;

2) Schwinn was inapplicable, since territorial restrictions of the type discussed

in Schwinn had not been imposed;3 and

3) Even if the scheme were similar to that condemned in Schwinn, antitrust

exemptions precluded interference by the judiciary.4

10

Accordingly, Judge Frankel ordered Kraftco to stop selling its Philadelphia

products to Scooper Dooper for resale in the Metropolitan Area.

11

Neither of the co-plaintiffs appealed Judge Frankel's decision.

12

Business relations between Kraftco and Scooper Dooper deteriorated after the
above-mentioned litigation. In response to measures allegedly taken by Kraftco
to exclude appellant from the Metropolitan Area, Scooper Dooper resumed its
practice of reselling Kraftco's Philadelphia ice cream in northern New Jersey.
Kraftco, in February and March of 1971, warned Scooper Dooper that it would
cease selling ice cream to Scooper Dooper if the latter continued to violate
Judge Frankel's order. When Scooper Dooper failed to accede to Kraftco's
demands, Kraftco notified Scooper Dooper that it would not sell its products to
Scooper Dooper after March 19, 1971.

13

Scooper Dooper filed this action in the Eastern District of Pennsylvania on

March 24, 1971. Plaintiff's complaint, as amended, charges that the
enforcement of the collective bargaining provision (quoted above) constitutes a
violation of Sections 1 and 2 of the Sherman Act, 15 U.S.C. 1 and 2. Treble
damages and injunctive relief are requested pursuant to 15 U.S.C. 15 and 26.

14

After taking testimony for five days, the District Court denied plaintiff's motion
for a preliminary injunction on May 5, 1971. The Court held that the collateral
estoppel consequences of Judge Frankel's decision, as well as the fact that
Kraftco was merely complying with Judge Frankel's order, undermined the
probability that plaintiff would ultimately succeed in its bid for a permanent
injunction. The District Court also found that Scooper Dooper had not
demonstrated the irreparable injury necessary to obtain an injunction pendente
lite. Without discussing either collateral estoppel or antitrust law, we affirmed

the District Court's exercise of discretion at 460 F.2d 1204 (3d Cir. 1972).
15

Subsequently, Kraftco moved for summary judgment or, alternatively,

Judgment on the pleadings. The District Court, finding no genuine issue of
material fact, and relying upon both the labor exemption from the antitrust laws
and the collateral estoppel consequences of the litigation in the Southern
District of New York, ruled in favor of Kraftco on July 25, 1973.

16

Scooper Dooper appeals from the July 25th order granting summary judgment.
II. COLLATERAL ESTOPPEL

17

The doctrine of collateral estoppel precludes the relitigation of issues actually

decided in former judicial proceedings. It is commonly recognized that the
following three requirements must be satisfied before collateral estoppel may be
utilized:

18

a) The issue decided in the prior litigation must be identical with the issue
presented in the action in question;

19

b) The prior litigation must have resulted in a final judgent on the merits; and

20

c) The party against whom the estoppel is asserted must have been a party, or in
privity with a party, to the prior adjudication.

21

See, e.g., Blonder-Tongue v. University of Illinois Foundation, 402 U.S. 313,

323-324, 91 S.Ct. 1434, 28 L.Ed.2d 788 (1971) (quoting from Justice Traynor's
opinion in Bernhard v. Bank of America National Trust & Savings Association,
19 Cal.2d 807, 813, 122 P.2d 892, 895 (1942)). Classical estoppel doctrine
appended a fourth element, a requirement of mutuality. This element mandates
that the party asserting the estoppel also be a party, or in privity with a party, to
the prior adjudication. See Restatement of Judgments, 93 (1942).

22

The doctrine of mutuality has come under severe attack in recent years. See
generally Blonder-Tongue v. University of Illinois Foundation,supra. This
Circuit has been in the forefront of the attack. Provided that the party against
whom the plea is asserted has had a full and fair opportunity to present his
claim in the prior litigation, collateral estoppel is available as a defense in this
Circuit regardless of whether or not the party asserting the plea was a party (or
privy) to the prior litigation.5 See Bruszewski v. United States, 181 F.2d 419

(3d Cir.), cert. denied, 340 U.S. 865, 71 S.Ct. 87, 95 L.Ed. 632 (1950);
Township of Hopewell v. Volpe, 446 F.2d 167, 171 (3d Cir. 1971).
23

The virtual obliteration of the mutuality doctrine in this Circuit undermines an

argument advanced by Scooper Dooper to avoid the exercise of collateral
estoppel herein. Pointing to the fact that Kraftco and Scooper Dooper were coplaintiffs in the action before Judge Frankel, appellant contends that the nonadverse relationship of the parties in the prior litigation vitiates the collateral
estoppel consequences of Judge Frankel's decision.6 In response, appellee relies
upon a line of cases which first tangentially7 and then frontally8 attacks the
adversity requirement. While in other jurisdictions such cases might be
necessary to overcome the adversity requirement, this Circuit's nullification of
the mutuality requirement renders non-adversity irrelevant to the doctrine of
collateral estoppel. In this Circuit, a total stranger to a prior litigation may, in a
subsequent suit, estop a party from re-litigating a claim which he lost in the
prior controversy, provided that the initial opportunity to present the claim was
full and fair. We see no reason to treat a co-plaintiff more harshly than a total
stranger. 9 Accordingly, we hold that the mere fact that Scooper Dooper and
Kraftco were non-adverse co-plaintiffs before Judge Frankel does not preclude
the applicability of collateral estoppel in the instant case.

24

There has been no demonstration that Scooper Dooper was denied a full and
fair opportunity-- procedurally, substantively, or evidentially-- to present its
case before Judge Frankel. Thus, collateral estoppel will apply here if the three
requirements identified by Justice Traynor in Bernhard are satisfied.10 There is
no dispute with regard to the second and third factors: clearly, Scooper Dooper
(the party against whom the estoppel is being asserted) was a party to the prior
litigation, which litigation resulted in a final judgment on the merits. The sole
controversy is whether the issues as to which Kraftco asserts estoppel are
'identical' to the issues adjudicated by Judge Frankel.

25

Appellee contends that Scooper Dooper is collaterally estopped from

relitigating both the antitrust validity of the collective bargaining provision and
the availability of the labor exemption from the antitrust laws. Scooper Dooper
responds by charging that the factual situation (as to both the antitrust liability
and exemption) has changed since 1970, thereby vitiating the identity of issues
necessary for application of collateral estoppel. To evaluate this contention, we
must first define, in general, the extent to which changed factual circumstances
may be said to destroy the 'identity' of issues.

26

It is well settled that changed factual circumstances can operate to preclude the
application of collateral estoppel. See Long v. Parker, 390 F.2d 816, 821 (3d

Cir. 1968); Hodgson v. Royal Crown Bottling Co., 465 F.2d 473, 475 (5th Cir.
1972); see generally 1B Moore's Federal Practice, P0.448. Carried to its
extreme, the concept of changed factual circumstances could totally undermine
the application of collateral estoppel. Rare would be the case in which counsel
could not conjure up some factual element that had changed between
adjudiciations. Analysis of Commissioner of Internal Revenue v. Sunnen, 11
however, indicates the manner in which the doctrine of changed circumstances
may be recognized without undercutting the doctrine of collateral estoppel. In
finding changed circumstances, the Court declared in Sunnen that collateral
estoppel would be confined to cases where the issue raised in the second suit is
'. . . identical in all respects with that decided in the first proceeding and where
the controlling facts and applicable legal rules remain unchanged . . .. Where
the situation is vitally altered between the time of the first judgment and the
second, the prior determination is not conclusive.' 333 U.S. at 599-600, 68 S.Ct.
at 720. Thus, where the changed circumstances are not material, and therefore
do not amount to controlling facts, collateral estoppel remains applicable. Cf.
Bankers Mortgage Company v. United States, 423 F.2d 73, 80-81 (5th Cir.)
cert. denied 399 U.S. 927, 90 S.Ct. 2242, 26 L.Ed.2d 793 (1970) (collateral
estoppel appplied because the changed circumstances did not constitute
controlling facts).
27

We must, therefore, determine whether the changed circumstances alleged by

Scooper Dooper constitute 'controlling facts' so as to destroy the identity of
issues necessary for the application of collateral estoppel.

28

$k13III. CHANGED CIRCUMSTANCES

29

Scooper Dooper contends that unilateral 'actions' taken by Kraftco after the date
of Judge Franke's decision have operated, in combination, to preclude it from
doing business in the Metropolitan Area.12 It is appellant's theory that: (1) the
'actions' opeate to exclude it from the Metropolitan Area; and (2) this exclusion
is analogous to the territorial exclusion condemned by the Supreme Court in
United States v. Arnold, Schwinn & Company, 388 U.S. 365, 87 S.Ct. 1856, 18
L.Ed.2d 1249 (1967).

30

Although appellant's theory causes us some difficulty, 13 we do not pause to

resolve it at this juncture. Kraftco has moved for summary judgment in relevant
part on the theory that Scooper Dooper is collaterally estopped from relitigating
the availability of the antitrust exemption-- an exemption which, if applicable,
operates to immunize Kraftco from all of Scooper Dooper's antitrust claims.14
If, as Kraftco contends, we are bound by collateral estoppel to apply the
exemption herein, Scooper Dooper's liability claims will become moot.

Accordingly, we shall first examine the availability of the antitrust exemption.

31

As discussed above, Kraftco's defense of collateral estoppel on the exemption

issue will not be successful if changed circumstances of controlling significance
are present. Inasmuch as we are reviewing a grant of summary judgment we
must determine (1) whether there exists a genuine factual issue as to such
changed circumstances; and (2) whether, as a matter of law, such changed
circumstances have occurred. A negative answer to both determinations will
require this Court to affirm the grant of summary judgment on the basis of the
collateral estoppel consequences of Judge Frankel's ruling on the antitrust
exemption.

32

The use of the summary judgment device by a party asserting collateral

estoppel is not uncommon. Provided that there is no genuine factual dispute as
to the identity of the parties, the nature of the prior judgment, or the similarity
of the issues, summary judgment is available to establish the collateral estoppel
defense. Cf. 6 Moore's Federal Practice, P56.17(52).

33

It is well settled that the party moving for summary judgment has the burden of
proving that there exists no genuine issue of fact. Adickes v. S. H. Kress & Co.,
398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); United States ex rel.
Jones v. Rundle, 453 F.2d 147, 150 (3d Cir. 1971). Where the moving party
initially sustains its burden, summary judgment will be granted unless the
opposing party can set forth countervailing evidence establishing a genuine
factual dispute. See generally 6 Moore's Federal Practice, P56.15(3). In the
instant case, Kraftco undoubtedly met its initial burden. By introducing Judge
Frankel's opinion, it established, with respect to the antitrust exemption, that:
(a) the party against whom collateral estoppel is sought (Scooper Dooper) was
a party to the prior litigation; (b) the prior litigation resulted in a final judgment
on the merits; and (c) the issue involved herein-- the availability of the antitrust
exemption to the collective bargaining provision quoted at the outset of this
opinion-- is identical to the issue litigated before Judge Frankel.

34

We focus, then, upon whether Scooper Dooper, the opposing party, has set
forth countervailing evidence that would present a genuine issue of fact. On
appeal, Scooper Dooper contends that it produced evidence before the District
Court creating a dispute as to whether or not controlling facts had changed,15 so
as to defeat the exemption upon which Kraftco relies. The evidence to which
Scooper Dooper refers is an affidavit signed by Delmar Mota, a former Scooper
Dooper employee. This affidavit indicates that in October 1972, Mota
purchased Kraftco ice cream bearing the Philadelphia plant code from three
retail stores located in northern New Jersey.

35

In evaluating the Mota affidavit, the District Court assumed (although plaintiff
did not so state) that Scooper Dooper's purpose in introducing the affidavit was
to demonstrate a collusive attempt by Kraftco and its unions to drive plaintiff
out of the Metropolitan Area.16 A showing that Kraftco's unions had acted in
concert with Kraftco to intentionally drive Scooper Dooper out of the northern
New Jersey market would undermine any asserted exemption from antitrust
liability. See United Mine Workers v. Pennington, 381 U.S. 657, 663, 85 S.Ct.
1585, 14 L.Ed.2d 626 (1965). Thus, if Scooper Dooper were able to
demonstrate that such collusion did in fact occur after the date of Judge
Frankel's decision, there would be present changed circumstances of such
significance as to vitiate the plea of collateral estoppel on the issue of
exemption.

36

We agree with the District Court that the granting of summary judgment was
proper on the issue of the antitrust exemption, since we are convinced that: (a)
Scooper Dooper did not present countervailing evidence of a genuine issue of
material fact; and (b) Scooper Dooper had full opportunity to make such a
presentation.

37

For a number of reasons, we find that Scooper Dooper's affidavit is insufficient

to establish a genuine issue of material fact. First, we are unable to locate in the
record any articulation by Scooper Dooper of the relevance of the Mota
affidavit to the issue of antitrust exemption. We will not speculat that the
purpose of the affidavit is to establish collusion in the absence of a clear
indication of said purpose in the record.

38

Secondly, even if we were to assume that plaintiff's purpose in filing the

affidavit was to establish collusion, we do not believe that the affidavit contains
sufficient factual allegations of collusion to withstand the grant of summary
judgment herein. The only possible hint of collusion offered by plaintiff is the
fact that Kraftco's Philadelphia ice cream was discovered in northern New
Jersey. Although we recognize our responsibility to view the Mota affidavit in
the light most favorable to Scooper Dooper,17 we nevertheless are unable to
reasonably infer collusion from that fact. The presence of Philadelphiamanufactured ice cream in northern New Jersey is, standing alone, a completely
equivocal fact. It no more suggests collusion than it suggests infinite other
theories to account for the discovery of the ice cream in New Jersey. Where
documentary evidence is, like the Mota affidavit, so equivocal as to be devoid
of inferential value, it will not suffice to establish the existence of a genuine
issue of material fact. See Tripoli Company v. Wella Corporation, 425 F.2d
932, 935 (3d Cir.), cert. denied 400 U.S. 831, 91 S.Ct. 62, 27 L.Ed.2d 62
(1970).

39

This is not to say that the affidavit (if supplemented by other factual
allegations) could not have supported a charge of collusion. Recognizing that
Scooper Dooper could have defeated summary judgment had factual assertions
probative of collusion been submitted, we are somewhat wary of the possibility
that we may be summarily resolving a factual dispute.18 To alleviate this
concern, we reviewed the entire record to determine: (1) whether, in fact, any
allegations of collusion had been made and (2) if not, whether Scooper Dooper
had the opportunity to discover and present such material.

40

Aside from the Mota affidavit discussed above, there is nothing either in
Scooper Dooper's answering brief nor in any other portion of the record to
suggest that Scooper Dooper either had or was aware of any evidence of
collusion. Nor can we blame the District Court's time schedule for plaintiff's
failure to properly advance a theory of collusion. Our review discloses the
following chronology:

41

April 16, 1973-- Kraftco gave notice of its motion for summary judgment.

42

April 26, 1973-- Scooper Dooper filed an answering brief.

43

June 11, 1973-- Scooper Dooper informed the District Court that it would be
able to submit the affidavit discussed above within a few days of the hearing on
Kraftco's motion.

44

June 12, 1973-- The hearing on Kraftco's motion was held.

45

June 20, 1973-- Scooper Dooper's affidavit was filed.

46

June 27, 1973-- Kraftco's counter-affidavits were filed.

47

July 25, 1973-- The District Court's order granting summary judgment was
filed.

48

Scooper Dooper had, at a minimum, two months to develop a theory of

collusion. Despite the fact that the Federal Rules specifically provide for the
granting of continuances in favor of the party opposing summary judgment,19
the record is barren of any request by Scooper Dooper for a continuance or an
adjournment in order to develop facts to resist summary judgment. Given the
ample time period and the failure to apply for any type of continuance, we
conclude that Scooper Dooper had an adequate opportunity to develop a theory

(based upon factual allegations) sufficient to place the existence of 'collusion' in

issue.
49

In sum, the record discloses no genuine issue of fact material to the antitrust
exemption. Scooper Dooper stated simply that Philadelphia ice cream was
found in northern New Jersey. Kraftco confirmed this observation, but then
proceeded to explain the delivery in non-collusive terms.20 Scooper Dooper
chose not to reply. Indeed, it did not even take recourse to Federal Rule 56(f) so
as to probe the assertions found in Kraftco's affidavits. Instead, Scooper Dooper
said and did nothing, leaving open to speculation the purpose of its own
affidavit and leaving uncontradicted the factual assertions of non-collusive
conduct set forth in Kraftco's affidavits.

50

Accordingly, there being no genuine issue of material fact and no changed

circumstances of controlling legal significance, we hold that the issue of
antitrust exemption raised herein is, as a matter of law, 'identical' to the issue
heretofore litigated before Judge Frankel.
IV. CONCLUSION

51

Each of the requirements necessary to estop Scooper Dooper from relitigating

the availability of the antitrust exemption is satisfied herein. With the
protection of this exemption, Kraftco is immune from the Sherman Act charges
advanced by Scooper Dooper. The grant of summary judgment in favor of
Kraftco will therefore be affirmed.

The District Court found that Scooper Dooper did not commence selling the
Philadelphia products in the Metropolitan Area until early in 1969. Scooper
dooper asserts that this finding of fact is clearly erroneous, suggesting instead
that the new marketing policy began in 1967. Inasmuch as the actual date is
irrelevant to the issues before us, we shall not attempt to resolve this factual
dispute

In Schwinn, the Supreme Court held that it was per se unreasonable for a
bicycle manufacturer to restrict areas in which or persons with whom its
products may be traded after the manufacturer parted with dominion over the
products. 388 U.S. at 379, 87 S.Ct. 1856

Judge Frankel explained that Scooper Dooper was not, in fact, excluded from
the Metropolitan Area, since ice cream manufactured at Kraftco's Long Island

City plant was still available for resale in the Metropolitan Area
4

See 15 U.S.C. 17, 29 U.S.C. 52, 101-115

In non-diversity cases (such as the instant action), we are free to apply our own
rules of collateral estoppel without the constraints of state law. See Heiser v.
Woodruff, 327 U.S. 726, 733, 66 S.Ct. 853, 90 L.Ed. 970 (1946)

Professor Moore is a prime advocate of the 'adversity' requirement advanced by

appellant. He states as a general proposition that collateral estoppel is
unavailable in subsequent litigation between co-parties unless the co-parties
were actual adversaries in the prior litigation. See 1B Moore's Federal Practice
P0.411(2). See also Dobbins v. Barnes, 204 F.2d 546, 548 (9th Cir. 1953);
Kimmel v. Yankee Lines, 224 F.2d 644 (3d Cir. 1955) (applying Pennsylvania
law); Restatement of Judgments, 82 (1942)

See National Bondholders Corp. v. Seaboard Citizens National Bank, 110 F.2d
138, 144 (4th Cir. 1940) (finding an exception to the adversity requirement
when '. . . some finding of fact is made in the first suit which is an essential
element in a claim or action subsequently brought by one (co-party) against the
other.'); Livesay Industries, Inc. v. Livesay Window Co., 202 F.2d 378, 382
(5th Cir.), cert. denied, 346 U.S. 855, 74 S.Ct. 70, 98 L.Ed. 369 (1953) (same)

See Diamond Shamrock Corp. v. Lumbermens Mutual Casualty Co., 416 F.2d
707 (7th Cir. 1969)

Thus, Professor Moore-- a long-standing advocate of the mutuality doctrine as

well as of the adversity requirement-- concedes that adversity would be
unnecessary in jurisdictions that have repudiated mutuality. He states:
'One further exception to the adversity requirement can arise in the small
number of jurisdictions that have abandoned the principle of mutuality in the
doctrine of judicial finality. In these jurisdictions, an adverse judgment can be
urged against the unsuccessful litigant by one who was a stranger to the
proceedings in which the judgment was rendered; and no reason is apparent to
prevent similar use of such a judgment by one who was a non-adverse co-party
with the unsuccessful litigant in those proceedings.'
1B Moore's Federal Practice, P0.411(2).

10

Appellant suggests that collateral estoppel is unavailable inasmuch as the

relitigation sought to be avoided involves legal, rather than factual, issues. This
argument misconceives the nature of the issues involved in the instant matter.
Both the claims of antitrust liability and the assertion of the labor exemption

involve issues of mixed fact and law. Such issues are subject to the bar of
collateral estoppel. See Yates v. United States, 354 U.S. 298, 336, 77 S.Ct.
1064, 1 L.Ed.2d 1356 (1957)
11

333 U.S. 591, 68 S.Ct. 715, 92 L.Ed. 898 (1948)

12

Appellant charges that: (1) for a period ranging from February of 1970 until the
time at which the instant suit was commenced, Kraftco maintained a dual price
structure, charging Scooper Dooper more for products manufactured in New
York than for the identical products made in Philadelphia; (2) after Judge
Frankel's order, Kraftco raised the preticketed (manufacturer's suggested) price
of the Sealtest ice cream products manufactured in Kraftco's New York plant;
(3) Kraftco has taken no steps since Judge Frankel's order to qualify its New
York plant in Pennsylvania, thereby precluding the sale of the New York
products in Pennsylvania; (4) products formerly available to Scooper Dooper at
the Philadelphia plant were not made available to the distributor at the New
York plant after Judge Frankel's order; and (5) after Judge Frankel's order,
Kraftco required prepayment (twenty-four hours before delivery) from Scooper
Dooper at its New York plant, while in Philadelphia Scooper Dooper was able
to pay at the time of delivery
In its brief on appeal, Kraftco disputes certain of these charges and attempts to
justify the remainder. Appellee's Brief at 17-18, n. 10. Inasmuch as we are
reviewing a grant of summary judgment, we cannot resolve these factual
disputes herein. Given our treatment of the antitrust exemption issue, infra, we
find that these factual disputes are immaterial.

13

We do not believe that the last three charges listed in Fn. 12 could have had an
appreciable effect in excluding Scooper Dooper from the Metropolitan Area.
More importantly, we question whether the Schwinn per se rule against
territorial restrictions would apply even if the combination of 'actions' actually
did exclude appellant from the Area. In Tripoli Company v. Wella Corporation,
425 F.2d 932, 935 (3d Cir.), cert. denied 400 U.S. 831, 91 S.Ct. 62, 27 L.Ed.2d
62 (1970) this Court, sitting in banc, expressly limited Schwinn to its factual
context. We indicated that where a manufacturer's restriction is related to a
legitimate business purpose, Schwinn may be inapplicable. 425 F.2d at 936937, n. 3. The apparent objective of the exclusions herein-- the preservation of
work standards-- would appear to represent just such a purpose

14

Congress has seen fit to grant labor unions a limited exemption from antitrust
liability. See 15 U.S.C. 17, 29 U.S.C. 52, 101-115. Provided that unions act in
their own self-interest in an area which 'is a proper subject of union concern,'
and provided that unions do not combine and conspire with non-labor groups,

the statutory exemption is available. See United States v. Hutcheson, 312 U.S.
219, 232, 61 S.Ct. 463, 85 L.Ed. 788 (1941); see also Intercontinental
Container Transport Corp. v. New York Shipping Association, 426 F.2d 884,
887 (2d Cir. 1970)
In the prior litigation, Judge Frankel held that even if Kraftco's unions were
guilty of antitrust violations, the labor exemption from the antitrust laws would
immunize the unions from antitrust liability. In the instant case, it is the
employer (Kraftco) and not the unions who seeks to invoke the antitrust
exemption.
We reject Scooper Dooper's contention that the labor exemption is unavailable
to employers. Such a proposition would undermine the vitality of the
exemption by discouraging bargaining on the part of management. To preserve
the integrity of the negotiating process, employers who bargain in good faith
must be entitled to claim the antitrust exemption. See Philadelphia World
Hockey Club, Inc. v. Philadelphia Hockey Club, Inc., 351 F.Supp. 462, 499
(E.D.Pa. 1972).
We similarly reject any contention that the issues faced by Judge Frankel and
this Court differ merely because the party claiming the exemption herein
(Kraftco) differs from the parties (the unions) which claimed same in the prior
litigation. The labor exemption to the antitrust laws applies to the bargaining
agreement, the product of negotiations between unions and management. See
Local Union No. 189, Amalgamated Meat Cutters & Butcher Workmen of
North America, AFL-CIO v. Jewel Tea Co., 381 U.S. 676, 689, 85 S.Ct. 1596,
1601, 14 L.Ed.2d 640 (1965) ('Employers and unions are required to bargain
about wages, hours and working conditions, and this fact weighs heavily in
favor of antitrust exemption for agreements on these subjects.'). Judge Frankel
ruled, in effect, that the bargaining provision quoted at the outset of this opinion
gives rise to the labor exemption. Kraftco is asserting no more in the instant
case.
15

See p. 845, supra

16

The District Court, although assuming the 'collusive' purpose of the Mota
affidavit, nevertheless was unpersuaded by Scooper Dooper's submission. The
Court relied instead stead upon counter-affidavits which explained that
Kraftco's Philadelphia ice cream had been shipped to New Jersey on an
emergency basis after the New York plant was beset with equipment problems
and a wildcat strike

17

United States v. Diebold, Inc., 369 U.S. 654, 82 S.Ct. 993, 8 L.Ed.2d 176
(1962) (per curiam)

18

This Court will go to great lengths to protect the opposing party's ability to
develop genuine issues of fact. See, e.g., Ward v. United States, 471 F.2d 667,
670 (3d Cir. 1973)

19

Fed.R.Civ.P. 56(f) provides that:

Should it appear from the affidavits of a party opposing the motion that he
cannot for reasons stated present by affidavit facts essential to justify his
opposition, the court may refuse the application for judgment or may order a
continuance to permit affidavits to be obtained or depositions to be taken or
discovery to be had or may make such other order as is just.

20

See Fn. 15, supra