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PALMER v. ROOSEVELT LAKE LOG OWNERS ASSN.

November 23, 1982

PALMER, et al., Plaintiffs
v.
ROOSEVELT LAKE LOG OWNERS ASSOCIATION, et al., Defendants



The opinion of the court was delivered by: QUACKENBUSH

 BACKGROUND

 Plaintiffs, Ervin and Gloria Palmer and their son, Tim, filed this private anti-trust suit on May 20, 1977, against the Roosevelt Lake Log Owners Association, various member companies of the Association, and a navigation company hired by the Association to retrieve stray merchantable *fn1" logs on Roosevelt Lake.

 Plaintiffs ran a small family business of retrieving merchantable logs allegedly abandoned on Roosevelt Lake while being transported by defendants to local lumber mills. The complaint alleges defendants sought to unlawfully restrain trade in retrieving for sale the abandoned logs.

 Defendants moved to dismiss the complaint on the ground there was an insufficient nexus to interstate commerce to support Sherman Act jurisdiction. *fn2" 15 U.S.C. §§ 1 and 2. On April 16, 1979, the Hon. Marshall A. Neill GRANTED defendants' motion and plaintiffs appealed.

 In reversing and remanding, the Ninth Circuit identified the relevant aspect of interstate commerce as the sale of Washington lumber for use outside the state. Taking as true plaintiffs' allegations that Roosevelt Lake contained millions of board feet of salvageable logs, the panel was unable to conclude that retrieval and sale of abandoned logs has an "insubstantial effect" on interstate commerce. Palmer v. Roosevelt Lake Log Owners Association, 651 F.2d 1289, 1291-94 (9th Cir. 1981).

 Defendants then moved for summary judgment of dismissal arguing that while plaintiffs may have suffered disparagement of title and/or other redressable state law injuries, they have nevertheless suffered no antitrust injury. Hence, it is contended, this matter should be resolved in the presently stayed state court action rather than in this federal antitrust action. This issue had not been presented to or addressed by Judge Neill or the court reviewing the earlier dismissal, Ct. Rec. 54 and Palmer v. Roosevelt Lake Log Owners Ass'n, 651 F.2d 1289 (9th Cir. 1981), nor does the circuit's ruling upon the interstate commerce issue preclude the present motion.

 FACTS

 (The facts, except for whether defendants have abandoned logs on Roosevelt Lake, are essentially undisputed. As discussed infra, resolution of the abandonment question does not present an antitrust issue).

 One of the stated purposes of the Association is "to pick up, distribute, regulate and otherwise control stray logs in Roosevelt Lake." Admitted facts, Pretrial Order, Ct. Rec. 51 at 3. In picking up, regulating and otherwise controlling stray logs on the lake, the Association acts as agent for and on behalf of its members and has written authorization from its members to do so. Admitted facts, Pretrial Order Ct. Rec. 51 at 4.

 Defendant Columbia Navigation Co., unlike the other defendants, is not in the lumber business. Rather, it is or has been engaged in various business activities including log retrieval on the Lake. Admitted Facts, Pretrial Order, Ct. Rec. 51 at 3.

 The Lake is part of the Columbia River upstream from Coulee Dam, and is classified as a navigable body of water. Ct. Rec. 51 at 3. Part of the Lake, its waters and its shores is administered in various respects by the National Park Service, United States Department of the Interior, as a National Recreation Area. Ct. Rec. 51, Affidavit of Ervin C. Palmer, Tab 1.4 at 3.

 From 1939 until 1963, Ervin Palmer worked for or handled the logs of all major and most of the gypo loggers in the Northwest and Puget Sound area, including log cribs from Alaska, Canada and Sekiu. Affidavit of Ervin C. Palmer, Ct. Rec. 96, Tab 1.4 at 2. In 1962, Palmer decided to move to the Lake area since he had lived relatively near the area as a child. Id. at p.4. He became convinced that the main methods used on the Lake for transporting logs were inefficient and permitted many more logs to escape than should have. Id.

 Palmer was able to state from his experience that nowhere in the Puget Sound area is the merchantable log drift permitted that is tolerated in the Roosevelt Lake area. Indeed, in Western Washington, by state law, *fn4" logs must be branded so that owners may be identified. By state law, branding is not required at Lake Roosevelt. *fn5" Palmer's experience was that lost logs are retrieved immediately in Western Washington.

 In June of 1963, Palmer purchased property in the Lake area, and in 1974 he bought a small tug for the purpose of creating a job for himself and performing a service which he believed no one else was performing. He applied for a state license and was informed the Lake was excluded from the state branding laws since the early 1950's. State licensing personnel also informed Palmer that the Association took care of log salvaging.

 The Association solicited bids and entered into contracts for salvage of stray logs. The Association contracted with only one firm at a time, and the contracts were of a one year duration. The operator of defendant Columbia Navigation Co., Roy Weatherman, had consistently won these contracts. Ct. Rec. 96, Tab 4 at documents 9 and 10; First Affidavit of Ervin Palmer, Ct. Rec. 96, Tab 1.4 at 5 - 7. When Palmer stated his interest in bidding on tow boat work for the Association, he was invited to bid for the job. Palmer was told by George Tichy, the Association's attorney, that Palmer should attend a meeting on April 30, 1976. However, Palmer could not attend because just before the meeting, he became seriously ill with appendicitis and was laid up for six weeks.

 When Palmer had recovered, he informed Tichy he was ready to salvage the stray logs. Tichy said Weatherman had been awarded the contract for that year and that Palmer could be considered the next year. Palmer told Tichy that there were still logs adrift, that he could not wait until next year to feed his family, and that he was going to start a salvage business. Id.

 Palmer then went to the Park Service where the Land Manager issued a log salvage permit on July 12, 1976. Admitted Facts, Pretrial Order, Ct. rec. 51 at 3. The permit contained the reservation that it was not intended to resolve any dispute to lawful title of material found on the Lake. Palmer Complaint filed September 16, 1976 in Stevens County Superior Court, attachment to Ct. Rec. 82. The ranger informed Palmer that they were grateful for removal of any logs from the Lake. He was also told by other park ...


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