
<head>

<title>USCA1 Opinion</title>



	<style type="text/css" media="screen, projection, print">



		<!--

		@import url(/css/dflt_styles.css);

		-->

	</style>

</head>

<body>

<p align=center>

</p><br>

<pre>                  UNITED STATES COURT OF APPEALS <br>                      FOR THE FIRST CIRCUIT <br>                       ____________________ <br> <br>No. 96-2347 <br> <br>                       C.B. TRUCKING, INC., <br> <br>                      Plaintiff - Appellant, <br> <br>                                v. <br> <br>                 WASTE MANAGEMENT, INC., ET AL., <br> <br>                     Defendants - Appellees. <br> <br>                       ____________________ <br> <br>           APPEAL FROM THE UNITED STATES DISTRICT COURT <br> <br>                FOR THE DISTRICT OF MASSACHUSETTS <br> <br>           [Hon. Morris E. Lasker, U.S. District Judge] <br> <br>                       ____________________ <br> <br>                              Before <br> <br>                     Torruella, Chief Judge, <br> <br>Godbold, Senior Circuit Judge, <br> <br>and Barbadoro, District Judge. <br> <br>                      _____________________ <br> <br>    Edward J. McCormick, III, with whom McCormick & Maitland was <br>on brief for appellant. <br>    J. Anthony Downs, with whom A. Lauren Carpenter and Goodwin, <br>Procter & Hoar LLP were on brief for appellees. <br> <br> <br> <br>                       ____________________ <br> <br>                         March 2, 1998 <br>                       ____________________

         BARBADORO, District Judge.  C.B. Trucking, Inc. brought <br>this action against Waste Management of Massachusetts, Inc. and its <br>parent, WMX Technologies, Inc., alleging, among other things, that <br>defendants had illegally attempted to monopolize the residential <br>solid waste collection business in southeastern Massachusetts <br>through a practice of predatory pricing.  Treating defendants' <br>motion to dismiss for failure to state a claim as a motion for <br>summary judgment, the district court summarily disposed of the <br>predatory pricing claims.  On appeal, C.B. Trucking asserts that <br>the district court erred because it:  (1) failed to properly notify <br>the parties of its intention to convert the motion into a motion <br>for summary judgment; (2) ruled on the motion without giving C.B. <br>Trucking an opportunity to conduct discovery; and (3) granted <br>summary judgment even though facts material to the motion remained <br>in genuine dispute.  We reject these arguments and affirm the <br>district court. <br>                                I. <br>                               A. <br>         C.B. Trucking is a family-owned company that operates a <br>residential solid waste collection business in southeastern <br>Massachusetts.  From 1990 through 1994, the company collected <br>residential solid waste in Franklin and Medway, Massachusetts, <br>pursuant to contracts with those towns.  In 1994, after a process <br>of public bidding, Franklin and Medway, as well as the nearby town <br>of Norton, Massachusetts, awarded Waste Management exclusive <br>residential solid waste collection contracts.  In securing these <br>contracts, Waste Management outbid not only local operators such as <br>C.B. Trucking, but also national operators such as Browning-Ferris <br>Industries and Laidlaw Waste Systems, Inc.  Each contract was for <br>a three-year term and required Waste Management to perform <br>specified collection services for a fixed price during the contract <br>term. <br>         Waste Management's bids for the Medway and Norton <br>contracts were lower than the next lowest bids by approximately <br>$40,000 in each case.  The company's final bid for the Franklin <br>contract at $1.58 million came in under C.B. Trucking's final bid <br>by only about $4000. <br>                               B. <br>         C.B. Trucking brought this action against Waste <br>Management and WMX Technologies asserting that defendants had:  (1) <br>violated the Sherman Act, 15 U.S.C.A.  1, 2 (West 1997), by <br>attempting to monopolize the residential solid waste business in <br>southeastern Massachusetts through a practice of predatory pricing; <br>(2) violated the Robinson-Patman Act, 15 U.S.C.A.  13, 13a (West <br>1997), by engaging in predatory pricing; (3) intentionally <br>interfered with existing contracts between C.B. Trucking and the <br>towns of Franklin and Medway in violation of Massachusetts law; and <br>(4) engaged in unfair and deceptive business practices in violation <br>of the Massachusetts Consumer Protection Act, Mass. Gen. Laws Ann. <br>ch. 93A (West 1997). <br>         Defendants moved to dismiss the complaint for failure to <br>state a claim pursuant to Fed. R. Civ. P. 12(b)(6).  At a hearing <br>on the motion, the district court asked Waste Management to submit <br>an affidavit addressing the limited issue of whether its bids for <br>the three contracts at issue were below its costs.  The court also <br>advised C.B. Trucking that it could respond to Waste Management's  <br>affidavit as it saw fit. <br>         Following the hearing, Waste Management submitted an <br>affidavit from the employee who had prepared its bids and managed <br>the contracts at issue, stating that Waste Management had not lost <br>money on any of the contracts.  The affidavit also alleged that <br>Waste Management had lost out in bidding on other residential solid <br>waste contracts in the same geographic area during the relevant <br>time period, and that it currently faced competition in the area <br>from approximately eighteen trash haulers.  After seeking and <br>obtaining additional time to respond, C.B. Trucking countered with <br>an affidavit from its president who concluded that Waste <br>Management's bids must have been below its own costs because they <br>were below C.B. Trucking's costs. <br>         Having solicited the affidavits, the court converted <br>defendants' Rule 12(b)(6) motion into a motion for summary <br>judgment.  It then disposed of the predatory pricing claims by <br>concluding that C.B. Trucking had failed to produce sufficient <br>evidence that Waste Management had engaged in below-cost pricing to <br>withstand summary judgment.  It also declined to exercise <br>supplemental jurisdiction over the state law claims.  On appeal, <br>C.B. Trucking contests only the dismissal of its Sherman Act <br>predatory pricing claim. <br>                              II. <br>                               A. <br>         C.B. Trucking first asserts that the district court erred <br>because it never expressly notified the parties of its intention to <br>convert defendants' motion to dismiss into one for summary <br>judgment.  Had the court done so, C.B. Trucking contends, it would <br>have sought additional time to conduct discovery in order to gather <br>the evidence needed to withstand the motion.   <br>         Rule 12(b) provides that a court shall convert a motion <br>to dismiss for failure to state a claim into one for summary <br>judgment if "matters outside the pleadings are presented to and not <br>excluded by the court."  Fed. R. Civ. P. 12(b).  We employ a <br>functional approach to the conversion process.  See Rodrguez v. <br>Fullerton Tires Corp., 115 F.3d 81, 83 (1st Cir. 1997).  <br>Accordingly, we have not required a district court to give express <br>notice of its intention to convert if the surrounding circumstances <br>effectively place the parties on notice that the court has the <br>option of treating the motion as a motion for summary judgment and <br>the parties have been given "reasonable opportunity to present all <br>material made pertinent to such a motion by Rule 56."  Id. (quoting <br>Fed. R. Civ. P. 12(b)); see also Chaparro-Febus v. International <br>Longshoremen Ass'n, Local 1575, 983 F.2d 325, 332 (1st Cir. 1992) <br>(treating failure to give express notice of conversion as harmless <br>error). <br>         Here, the circumstances surrounding the conversion of <br>defendants' motion to dismiss were sufficiently clear to <br>effectively place C.B. Trucking on notice that the district court <br>intended to treat the motion as a motion for summary judgment.  <br>Rather than relying on defendants' assertion that the complaint <br>failed to sufficiently allege below-cost pricing, the district <br>court signaled its intention to delve into the evidentiary <br>sufficiency of C.B. Trucking's allegations by calling on the <br>parties to submit affidavits addressing the issue.  Given the <br>court's request for information that it could only consider <br>consistent with Rule 12(b) if it converted the motion to dismiss <br>into a motion for summary judgment, C.B. Trucking has no credible <br>basis to complain that it was unfairly surprised by the conversion. <br>         Nor can C.B. Trucking claim that the conversion unfairly <br>deprived it of the opportunity to submit responsive materials on <br>the below-cost pricing issue.  The case had been pending for more <br>than a year when the district court called on the parties to submit <br>affidavits on the pricing issue.  Moreover, C.B. Trucking was given <br>more than a month to prepare and file affidavits responding to <br>Waste Management's denial that it had engaged in below-cost <br>pricing.  Under these circumstances, the district court acted well <br>within its discretion in treating the motion to dismiss as a motion <br>for summary judgment.  <br>                               B. <br>         C.B. Trucking alternatively claims, based on Fed. R. Civ. <br>P. 56(f), that the district court should have refrained from ruling <br>on the converted summary judgment motion so that it could have <br>conducted discovery on the below-cost pricing issue.  We review the <br>district court's decision to proceed to the merits of the summary <br>judgment question for abuse of discretion.  See Morrissey v. Boston <br>Five Cents Sav. Bank, 54 F.3d 27, 35 (1st Cir. 1995). <br>         When properly invoked, Rule 56(f) allows a party opposing <br>summary judgment additional time to conduct discovery on matters <br>related to the motion.  See Resolution Trust Corp. v. North Bridge <br>Associates, Inc., 22 F.3d 1198, 1203 (1st Cir. 1994).  To benefit <br>from the rule, however, a party must meet several requirements.  <br>First, although a request for Rule 56(f) relief need not be <br>expressly labeled as such, the party invoking the rule at a minimum <br>must ask the court to refrain from acting on the summary judgment <br>request until additional discovery can be conducted.  See Ayala- <br>Gerena v. Bristol Myers-Squibb Co., 95 F.3d 86, 92 (1st Cir. 1996); <br>Dow v. United Bhd. of Carpenters, 1 F.3d 56, 61 (1st Cir. 1993).  <br>In other words, a party ordinarily may not attempt to meet a <br>summary judgment challenge head-on but fall back on Rule 56(f) if <br>its first effort is unsuccessful.  Second, a party relying on Rule <br>56(f) must demonstrate that it was diligent in pursuing discovery <br>before the summary judgment initiative surfaced.  See Ayala-Gerena, <br>95 F.3d at 92 ("Rule 56(f) is designed to minister to the vigilant, <br>not to those who slumber upon perceptible rights.").  Finally, the <br>party must "set forth a plausible basis for believing that <br>specified facts, susceptible of collection within a reasonable time <br>frame, probably exist" and "indicate how the emergent facts, if <br>adduced, will influence the outcome of the pending summary judgment <br>motion."  Resolution Trust Corp., 22 F.3d at 1203.  C.B. Trucking <br>cannot satisfy any of these requirements.   <br>         The only reference C.B. Trucking made in district court <br>to the need for additional discovery was a comment in its <br>opposition to Waste Management's affidavit in which the company's <br>attorney stated, "[a]ccordingly, this court should deny the <br>defendants' motion and at a minimum allow the plaintiff discovery <br>on the issue of cost."  C.B. Trucking accompanied its opposition <br>with an affidavit from its president attempting to address the <br>below-cost issue on its merits.  Because it is apparent from the <br>opposition and the supporting affidavit that C.B. Trucking was <br>content to have the court act on the merits of the motion, its <br>passing comment that the court should deny the motion so that the <br>parties could conduct additional discovery is simply not sufficient <br>to trigger Rule 56(f).   <br>         Rule 56(f) relief was also unjustified because C.B. <br>Trucking was not diligent in pursuing discovery.  Although C.B. <br>Trucking acknowledges that a plaintiff in a predatory pricing case <br>must prove that the prices a plaintiff complains of were below its <br>competitor's costs, see Brooke Group Ltd. v. Brown & Williamson <br>Tobacco Corp., 509 U.S. 209, 223-26 (1993), the company conducted <br>no discovery on this issue during the twenty-one months in which <br>this case was pending in the district court.  Given this failure, <br>C.B. Trucking is in no position to complain of the court's decision <br>to examine the evidentiary sufficiency of the predatory pricing <br>claim. <br>         Finally, further delay in the resolution of Waste <br>Management's motion was unwarranted because C.B. Trucking failed to <br>identify any material evidence that it was likely to uncover if it <br>was given additional time to conduct discovery.  As this court has <br>recognized, a plaintiff's speculative assertions that the defendant <br>has unspecified facts in its possession necessary for the plaintiff <br>to develop its legal theories coupled with conclusory statements <br>that discovery should be commenced are "entirely inadequate to <br>extract the balm of Rule 56(f)."  Paterson-Leitch Co. v. <br>Massachusetts Mun. Wholesale Elec. Co., 840 F.2d 985, 989 (1st Cir. <br>1988).  At best, C.B. Trucking made a non-specific request that the <br>court deny the motion so that it could conduct additional <br>discovery.  This type of general and unsupported statement will not <br>satisfy Rule 56(f).  Accordingly, the district court was well <br>within its discretion in proceeding to the merits of the summary <br>judgment motion.  <br>                               C. <br>         Having determined that the district court had the <br>discretion to rule on defendants' converted summary judgment motion <br>without giving C.B. Trucking express notice or additional time to <br>conduct discovery, we have little difficulty in concluding that the <br>court properly disposed of the predatory pricing claim.  <br>         A plaintiff cannot prevail on a predatory pricing claim <br>unless it proves that the prices it complains of are below its <br>competitor's costs.  See Brooke Group Ltd., 509 U.S. at 223-26.  <br>Further, we have recognized that a company that "prices its own <br>product or service at or above its own costs does not violate the <br>Sherman Act merely because its costs, and thus its prices, are <br>lower than a rival's costs."  Tri-State Rubbish, Inc. v. Waste <br>Management, Inc., 998 F.2d 1073, 1080 (1st Cir. 1993). <br>         Defendants challenged C.B. Trucking's ability to prove <br>its predatory pricing claims by filing an affidavit of the employee <br>who prepared the bids and managed the contracts at issue, stating <br>that Waste Management had not lost money on any of the contracts.  <br>This assertion was sufficient to compel C.B. Trucking to come <br>forward with enough competent evidence to permit a reasonable <br>factfinder to conclude that Waste Management had engaged in below- <br>cost pricing.  See LeBlanc v. Great American Ins. Co., 6 F.3d 836, <br>842 (1st Cir. 1993).  Rather than attempting to counter defendants' <br>assertion with hard evidence, however, C.B. Trucking offered only <br>its president's statement that Waste Management must have engaged <br>in below-cost pricing because its bids exceeded C.B. Trucking's <br>costs.  Conclusory statements of this type are insufficient to <br>sustain a predatory pricing claim in the face of a properly <br>supported summary judgment motion.  Consequently, based on the <br>record the parties presented, we agree with the district court's <br>decision to summarily dispose of C.B. Trucking's predatory pricing <br>claim. <br>                              III. <br>         For the reasons discussed above, we find that the <br>district court properly granted summary judgment against plaintiff. <br>Accordingly, the judgment of the district court is affirmed.  </pre>

</body>

</html>

