Page:Calnetics Corp. v. Volkswagen of America, Inc. (532 F.2d 674).pdf/19

 With respect to VW’s wholly owned distributors, the existence of a vertical tie running from Subsidiary through VW to the distributors is clear enough. But it is not clear that VWVW’s [sic] control over the purchasing decisions of those distributors in which VW does not own a controlling interest can be properly inferred on the basis of the present record. The existence of the requisite control by VW over the purchasing decisions of Volkswagen dealers is even more doubtful in light of the district court’s finding that “dealers [who buy air-conditioners from Distributor] are now, and always have been, free to purchase any type air-conditioner they desire from any source they desire.”

We are confident that, on remand, the district court will properly instruct the jury on issues relating to vertical foreclosure.

C.&emsp;Equitable Relief.

In the event Calnetics obtains a jury verdict on its antitrust claims against VW and Subsidiary, the district court will be required to evaluate Calnetics’ right to equitable relief and, if the court deems relief appropriate, fashion a suitable decree.

In order to provide the district court with guidance in the event equitable issues arise, we turn to contentions made by VW and Subsidiary with respect to the equitable relief ordered by the district court in its supplemental order of January 19, 1973. Calnetics Corp. v. Volkswagen of America, Inc., 353 F.Supp. 1219 (C.D.Cal.1973).

The district court ordered the divestiture of Subsidiary. Under the law of this circuit, the remedy of divestiture is not available to private plaintiffs in antitrust suits. International Telephone and Telegraph Corp. v. General Telephone & Electronics Corp., 518 F.2d 913, 920 (9th Cir. 1975).

The district court held that, while Calnetics had not proved a causal connection between its loss of the Distributor market and the challenged merger, it was nonetheless entitled to equitable relief under § 16 of the Clayton Act because “a Section 7 divestiture plaintiff acts somewhat as a Rule 23 class representative and need not satisfy the requirement of ‘impact’ in its classical antitrust definition.” Calnetics Corp. v. Volkswagen of America, Inc., 348 F.Supp. at 620. (Emphasis added.) The court further stated that the proper focus was not on prospective injury to the particular plaintiff but rather on the “marketplace and the effects of the claimed anticompetitive acquisition upon the marketplace.”

Because the remedy of divestiture is not available, the correctness of the district court’s view that a private divestiture plaintiff need not satisfy the traditional requirement of “impact” is moot. The general rule, as stated by United States v. Borden Co., 347 U.S. 514, 518, 74 S.Ct. 703, 706, 98 L.Ed. 903, 908 (1954), controls: “Under § 16 * * * a private plaintiff may obtain injunctive relief against * * * violations only on a showing of ‘threatened loss or damage’; and this must be of a sort personal to the plaintiff * * * [citation omitted].”

In evaluating the plaintiff’s entitlement to relief under § 16, the proper focus is on the threat of prospective injury to Calnetics. See Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 130, 89 S.Ct. 1562, 1580, 23 L.Ed.2d 129, 152 (1969).

The district court enjoined VW and its wholly owned distributors for a period of seven years from importing any Volkswagens, Porsches, or Audis equipped with air conditioning installed prior to importation.