IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_____________________
No. 95-30795
_____________________
NELSON BUNKER HUNT,
Plaintiff-Appellant
versus
OCCIDENTAL PETROLEUM CORPORATION
and PLACID OIL COMPANY,
Defendants-Appellees
_____________________
Appeal from the United States District Court
for the Western District of Louisiana
(94-CV-2382)
_____________________
August 21, 1996
Before BENAVIDES, STEWART and DENNIS, Circuit Judges.
DENNIS, Circuit Judge.*
Appellant, Nelson Bunker Hunt, filed suit under Section 7 of
the Clayton Act, 15 U.S.C. § 18, seeking to dissolve the
acquisition of Placid Oil Co. by Occidental Petroleum Corp. The
district court granted the defendants’ motion for summary judgment
*
Local rule 47.5 provides: “The publication of opinions that have no precedential
value and merely decide particular cases on the basis of well-settled principles of law
imposes needless expense on the public and burdens on the legal profession.”
Pursuant to that Rule, the Court has determined that this opinion should not be
published.
and Hunt appeals. Finding that Hunt lacks standing to sue under
the antitrust laws, we affirm.
Hunt is the sole beneficiary of the Nelson Bunker Hunt Trust
Estate, which owned approximately one-third of the stock of Placid
Oil Co (“Placid”). In 1994, Occidental Petroleum Corp.
(“Occidental”) acquired Placid’s stock in exchange for $250 million
in Occidental stock. Hunt brought suit against Occidental and
Placid under Section 7 of the Clayton Act seeking injunctive relief
to dissolve the acquisition on the ground that the effect of the
merger may be substantially to lessen competition in the
exploration, development and sale of oil and gas in the states of
Texas, Louisiana and Mississippi (the Gulf Coast area). Occidental
and Placid filed a motion for summary judgment, challenging Hunt’s
standing to sue for antitrust violations and arguing that
regardless of standing, Hunt had not demonstrated a violation of
the Clayton Act as the combined market shares of Placid and
Occidental were too small to increase concentration or threaten
competition significantly.1 Hunt’s answer to the motion supplied
little, if any, relevant evidence in support of his position and
1
The defendants attached several exhibits to their motion, including an affidavit by
their expert economist, Marion B. Stewart, Ph.D. Using Hunt’s proposed geographical
market for purposes of his opinion, Dr. Stewart opined that the merger had little effect
on the unconcentrated oil and gas markets in part because the combined market
shares of Occidental and Placid accounted for only 1.1 percent of natural gas
production and 1.5 percent of oil production in 1994.
2
did not include any expert analysis of his claims.2
The district court granted summary judgment in favor of the
defendants on the ground that Hunt lacks antitrust standing.
Specifically, the court found that (1) Hunt’s status as beneficiary
of a trust that owned shares of Placid did not establish standing
to sue for injuries to Placid; (2) Hunt’s claimed status as a
competitor did not establish standing as Hunt failed to show that
he was a competitor and, moreover, he made no allegation, much less
proved, any predatory pricing; and (3) Hunt did not have standing
as a potential entrant to the relevant market as he did not refute
defendants’ contention that the post-merger Occidental controlled
only 1.5% of the oil and gas reserves in the easily entered
relevant market. Hunt appeals this judgment.
We review the decision to grant summary judgment de novo,
applying the same criteria employed by the district court in the
first instance. Federal Deposit Ins. Corp. v. Dawson, 4 F.3d 1303,
1306 (5th Cir.1993), cert. denied, U.S. , 114 S.Ct. 2673,
2
Hunt’s answer to the motion for summary judgment was supported solely by an
affidavit by his attorney attaching as exhibits (1) portions of Occidental’s 1994 annual
report; (2) a descriptive memorandum of Placid prepared by Lehman Brothers; (3)
portions of Lehman Brothers’ “Review of Merger Process and Formal Offers” regarding
the Placid purchase; (4) excepts from “the Pulitzer Prize winning book by Daniel
Yergens ‘The Prize: The Epic Quest for Oil, Money and Power’”; (5) portions of the
depositions of James Holland, Jr., trustee of the Lamar Hunt Trust, and Alvin H. Lane,
Jr.; (6) a summary order entered on April 13, 1995 in Hilo v. Exxon, No. CV 92-4408
(C.D.Ca.), denying summary judgment motions of British Petroleum and Mobil Oil
Corp., offered by Hunt “to contradict defendants’ unsubstantiated assertions that the oil
and gas industry today is ‘highly competitive.’”
3
129 L.Ed.2d 809 (1994). Summary judgment is proper if "the
pleadings, depositions, answers to interrogatories and admissions
on file, together with affidavits, if any, show that there is no
genuine dispute as to any material fact and that the moving party
is entitled to judgment as a matter of law." FED.R.CIV.P. 56(c);
see also Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91
L.Ed.2d
265 (1986). Once a properly supported motion for summary judgment
is presented, the burden shifts to the non-moving party who bears
the burden of proof at trial to show with "significant probative"
evidence that there exists a triable issue of fact. In re
Municipal Bond Reporting Antitrust Litig., 672 F.2d 436, 440 (5th
Cir.1982). We may affirm the summary judgment on grounds that
differ from the ones on which the district court relied. Coral
Petroleum, Inc. v. Banque Paribas-London, 797 F.2d 1351, 1355 n. 3
(5th Cir. 1986).
The Clayton Act prohibits mergers the effect of which “may be substantially to
lessen competition, or to tend to create a monopoly.” 15 U.S.C. § 18. “The core question
is whether a merger may substantially lessen competition, and necessarily requires a
prediction of the merger’s impact on competition, present and future.” Federal Trade
Commission v. Procter & Gamble Co., 386 U.S. 568, 577, 87 S. Ct. 1224, 1229, 18 L.Ed.2d
303 (1967). In order to seek injunctive relief under § 16 of the Act, a private plaintiff must
allege “threatened loss or damage ‘of the type the antitrust laws were designed to prevent
4
and that flows from that which makes defendants’ acts unlawful.’” Cargill, Inc. v. Monfort
of Colorado, Inc., 479 U.S. 104, 115, 107 S.Ct. 484, 491, 93 L.Ed.2d 427 (1986); Anago,
Inc. v. Tecnol Medical Products, Inc., 976 F.2d 248, 249 (5th Cir. 1992), cert. dismissed,
U.S. , 114 S. Ct. 491, 126 L.Ed.2d 441 (1993). Thus, to have standing to sue under
the antitrust laws, Hunt was required to show that he will suffer “antitrust injury” as a result
of the merger. Loss or damage “due merely to increased competition does not constitute
such an injury.” Cargill, 479 U.S. at 122, 107 S. Ct. at 495. See also Anago, 976 F.2d at
249 (observing that this circuit “has narrowly interpreted the meaning of antitrust injury,
excluding from it the threat of decreased competition.”). Moreover, “[p]roof that a plaintiff
will be adversely affected by the merger itself will not suffice in this Court, unless the
injuries are related to the anticompetitive effects of the merger.” Id. at 250.
Hunt claims that the merger has caused or will cause him to
suffer antitrust injury in three capacities: as the beneficiary of
a trust that was part owner of the acquired company, as an alleged
competitor in the industry, and as a potential entrant into the oil
and gas market. However, in all three situations, Hunt has failed
to demonstrate the existence of material disputed facts precluding
summary judgment because he has not shown that he has suffered or
will suffer injury cognizable under the antitrust laws. First, in
his capacity as beneficiary of a trust that was one-third owner of
the target company, Hunt presumably seeks to assert rights on
behalf of Placid, much as shareholders in a derivative action
assert rights of the corporation. Circuit precedent, however,
5
holds that a target company lacks antitrust standing because the
target cannot establish that it has suffered antitrust injury
simply by virtue of its loss of independence, see Anago, 976 F.2d
at 250-51, and Hunt’s rights as part-beneficial owner certainly
extend no further than those of the target company in which he had
an interest.3 Similarly, Hunt did not establish standing as an
alleged competitor in the oil and gas market because he failed to
allege or present summary judgment evidence that Occidental would
engage in predatory pricing as a result of the merger. See
Phototron Corp. v. Eastman Kodak Co., 842 F.2d 95, 99 (5th Cir.
1988), cert. denied, 486 U.S. 1023, 108 S.Ct. 1996, 100 L.Ed.2d 228
(1988). Finally, even assuming that Hunt adequately established
that he was a potential entrant,4 he has not demonstrated that the
merger has increased entry barriers and thus has not shown that he
has been competitively harmed. As Hunt has failed to establish the
existence of disputed material facts relative to his alleged
antitrust injury, he has not shown that he has standing to sue
3
Inasmuch as we find that Placid has suffered no antitrust injury, it is unnecessary
to reach the issue addressed by the district court regarding whether derivative suits
may be brought under the antitrust laws.
4
In addition to the requirement of antitrust injury, a plaintiff seeking recovery as a
potential entrant to the market must show both an intention and preparedness to enter
the business. See Hayes v. Solomon, 597 F.2d 958, 973 (5th Cir. 1979), cert. denied,
444 U.S. 1078, 100 S. Ct. 1028, 62 L.Ed.2d 761 (1980); Cable Holdings of Georgia v.
Home Video, Inc., 825 F.2d 1559, 1561-62 (11th Cir. 1987). Hunt did not bolster his
allegations of harm as a potential entrant with evidence that he intended to and was
prepared to enter the oil and gas market; consequently, he must be denied standing on
this ground as well.
6
under the federal antitrust laws and summary judgment in favor of
defendants was proper.
For the foregoing reasons, the district court’s grant of
summary judgment in favor of defendants is AFFIRMED. The
defendants’ motion for sanctions against Hunt and his attorney is
DENIED.
7