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Northrop Corp. v. McDonnell Douglas Corp.

United States Court of Appeals for the Ninth Circuit

March 1, 1982, Argued and Submitted ; February 28, 1983

Nos. 81-5165, 81-5172

Opinion

 [*1035]  BOOCHEVER, Circuit Judge

This appeal and cross-appeal present complex issues concerning the extent to which private parties may obtain redress for alleged issues concerning the extent to which private parties may obtain redress for alleged injuries occurring in the heavily regulated military aircraft industry. The principal issues are whether: (1) suit against the Government pursuant to 22 U.S.C. § 2356 (disclosure of proprietary data) is the exclusive remedy; (2) the Government is a necessary party; (3) the claims present non-justiciable political or foreign policy questions;  [*1036]  (4) certain agreements between the parties are per se illegal restraints of trade; and (5) the Government so pervades the relevant market that no trade or commerce exists for Sherman [**2]  Act purposes.

The case arises out of a series of "teaming" agreements that Northrop and McDonnell Douglas ("McDonnell") entered into at the Government's request to develop military aircraft. The agreements allegedly limited Northrop to marketing those aircraft developed through the teaming effort that were suitable for land-based operation and McDonnell to marketing those suitable for aircraft-carrier operation. Despite its extensive involvement in the military aircraft industry, the Government is not a formal party to either the agreements or this action.

The trouble giving rise to Northrop's complaint and McDonnell's counterclaim began when McDonnell was awarded a large Navy contract, Northrop lost the competition for a similar Air Force contract, and McDonnell subsequently began marketing land-based aircraft to foreign countries. Northrop contends that McDonnell's marketing of land-based aircraft violated the agreements. It filed suit claiming, inter alia, fraud, breach of contract, economic coercion, refusal to deal, unfair competition, and industrial espionage. McDonnell subsequently filed a counterclaim seeking, inter alia, a declaration of rights under the agreements [**3]  and damages for Northrop's allegedly illegal conduct and breaches of the agreements.

After some preliminary procedural maneuvering, the district court dismissed Northrop's first amended complaint in its entirety and, alternatively, granted McDonnell summary judgment as to five of the eight counts in the complaint. Northrop Corp. v. McDonnell Douglas Corp., 498 F. Supp. 1112 (C.D.Cal.1980). The district court also dismissed McDonnell's counterclaim and, alternatively, granted Northrop summary judgment on the ground that the counterclaim was the "mirror image" of Northrop's complaint.

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705 F.2d 1030 *; 1983 U.S. App. LEXIS 30124 **; 1983-1 Trade Cas. (CCH) P65,245; 36 Fed. R. Serv. 2d (Callaghan) 102; 30 Cont. Cas. Fed. (CCH) P70,860

NORTHROP CORPORATION, Plaintiff/Appellant/Cross-Appellee, v. McDONNELL DOUGLAS CORPORATION, Defendant/Appellee/Cross-Appellant

Subsequent History:  [**1]   As Amended May 9, 1983.

Prior History: Appeal from the United States District Court for the Central District of California.

Disposition: Reversed in Part; Affirmed in Part; and Remanded.

CORE TERMS

technology, parties, teaming, aircraft, procurement, sales, regulations, land-based, district court, antitrust, license, immunity, marketing, military aircraft, anti trust law, contractor, fighter, argues, summary judgment, political question, rule-of-reason, attempt to monopolize, prime contractor, counterclaim, competitors, derivative, disclosure, military, commercial sale, unlimited right

Governments, Federal Government, Claims By & Against, Courts, Courts of Claims, Civil Procedure, Dismissal, Involuntary Dismissals, General Overview, Subject Matter Jurisdiction, Jurisdiction Over Actions, Appeals, Standards of Review, Business & Corporate Law, Agency Relationships, Types, General Agents, Public Contracts Law, Types of Contracts, Multiyear Procurement, Agents Distinguished, Independent Contractors, Masters & Servants, Independent Contractors, Business & Corporate Compliance, Patent Law, Infringement Actions, Corporate & Government Infringers, Patent Law, Jurisdiction & Review, Ownership, Federal Government Inventions, Criminal Law & Procedure, Firearms Licenses, Businesses, Applications, International Trade Law, International Commerce & Trade, Federal Legislation, Inspections & Recordkeeping, Weapons Offenses, Trafficking in Weapons, Elements, Domestic Security, State & Territorial Governments, Licenses, Infringing Acts, Exports & Imports, Joinder of Parties, Compulsory Joinder, Necessary Parties, Abuse of Discretion, Parties, Contract Performance, Alterations & Modifications, Authorized Changes, Bids & Formation, Mutual Obligation, Contract Provisions, Changes Clauses, Indispensable Parties, Transportation Law, Air & Space Transportation, Antitrust, Defenses, Demurrers & Objections, Motions to Dismiss, Failure to State Claim, Failure to State Claims, Justiciability, Political Questions, International Law, Dispute Resolution, Act of State Doctrine, Summary Judgment, Opposing Materials, Entitlement as Matter of Law, Genuine Disputes, Materiality of Facts, Antitrust & Trade Law, Sherman Act, Judgments, Regulated Practices, Price Fixing & Restraints of Trade, Horizontal Market Allocation, Per Se Rule & Rule of Reason, Per Se Violations, Regulated Industries, Communications, Sherman Act, Cartels & Horizontal Restraints, Monopolies & Monopolization, Conspiracy to Monopolize, Exclusive & Reciprocal Dealing, Contracts Law, Reciprocal Contracts, Jurisdiction, Healthcare Law, Healthcare Litigation, Antitrust Actions, Facilities, Actual Monopolization, Anticompetitive & Predatory Practices, Attempts to Monopolize, Securities Law, Regulators, Self-Regulating Entities, National Association of Securities Dealers, Exemptions & Immunities, Export Trade, National Securities Exchanges, Public Enforcement, State Civil Actions, Duties & Liabilities, Causes of Action & Remedies, Breach of Contract, Holders, Military & Veterans Law, Armed Forces, Organization, US Department of Defense, Acts & Mental States, Mens Rea, Specific Intent, Evidentiary Considerations