Appeal from the United States District Court for the Northern District of California. D.C. No. CV-90-02855-VRW. Vaughn R. Walker, District Judge, Presiding. This Opinion Substituted on Grant of Rehearing for Withdrawn Opinion of August 10,.
Before: William C. Canby, Jr., and Melvin Brunetti, Circuit Judges, and Stephen V. Wilson*fn* District Judge. Opinion by Judge Canby.
In this case, we must decide whether bid-rigging and antitrust claims brought by a trustee on behalf of a bankrupt estate are barred by the res judicata effect of a bankruptcy court's sale order.
International Nutronics, Inc., the estate in bankruptcy, was in the business of sterilizing medical instruments and other equipment by gamma radiation. The sterilization process involved the use of cobalt-60, an isotope of cobalt. Cobalt-60 is expensive and difficult to acquire. It is highly radioactive, decaying rapidly and losing its value as a source of gamma radiation. It poses significant health risks.
At the time it filed for bankruptcy, Nutronics was in possession of two quantities of partially decayed cobalt-60. One was located at Nutronics' facility in Irvine, California; the other, at Nutronics' facility in Palo Alto, California.
In November 1987, plaintiff-appellant Robertson, Nutronics' Trustee in bankruptcy, solicited bids for the cobalt-60. Defendant-appellees Isomedix and Radiation Sterilizers, Inc. (RSI), competitors in the radiation sterilization business, submitted separate bids. Isomedix offered to pay seventy cents per curie,*fn1 or about $600,000, for the Irvine cobalt-60. RSI offered to buy the Irvine cobalt-60 for sixty-five cents per curie, curies to be measured by the isotope's radioactivity at the time of delivery three months later. RSI subsequently amended its bid, offering to pay 102% of the amount any competing bidder offered. Neither Isomedix nor RSI offered to purchase the Palo Alto cobalt-60.
Robertson rejected both offers. He subsequently asked Isomedix and RSI to extend new bids. Having learned that they had been the only bidders, Isomedix and RSI then notified Robertson that they had formed a joint venture to purchase and remove both supplies of cobalt-60 for $350,000. After Robertson rejected this bid, Isomedix and RSI increased their joint bid by $14,000.
Robertson accepted the joint bid and sought from the bankruptcy court an order approving the sale. In neither his letter of acceptance nor his request for a bankruptcy sale order did Robertson express objections to the joint venture. The court issued an order unconditionally confirming the sale.
About twenty-two months later, Robertson filed an adversary proceeding in the bankruptcy court, Isomedix and RSI as codefendants. The parties agreed to withdraw the reference to bankruptcy court, and the proceeding returned to district court. Alleging that the joint venture constituted an unlawful combination, the complaint sought relief under 11 U.S.C. § 363(n) and sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 & 2.
The defendants moved for summary judgment, asserting that the claims were barred under the doctrine of res judicata. The ...