# Chmieleski v. City Products Corp.

> District Court, W.D. Missouri · April 14, 1976 · 71 F.R.D. 118

URL: https://www.frixlaw.com/law-library/cases/8790167

## Case

- **Full name:** Victor J. CHMIELESKI v. CITY PRODUCTS CORPORATION, (Missouri Registered Agent, C. T. Corporation System)
- **Court:** District Court, W.D. Missouri
- **Decided:** April 14, 1976
- **Citations:** 71 F.R.D. 118; 22 Fed. R. Serv. 2d 66
- **Precedential status:** Published
- **Opinion:** Opinion of the court by Hunter
- **Judges:** Hunter
- **Cited by:** 30 later opinions in the Frix Law Library

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## Opinion text

MEMORANDUM AND ORDER SUSTAINING IN PART AND DENYING IN PART PLAINTIFFS’ MOTION TO MAINTAIN THIS ACTION AS A CLASS ACTION
ELMO B. HUNTER, District Judge.
This matter is presently before the Court upon the motion of plaintiffs in this cause to proceed with their claims as asserted in *126 their first amended complaint on behalf of themselves and other persons or entities similarly situated pursuant to Rule 23, F.R.Civ.P. This action was commenced on November 16, 1971, by plaintiffs Victor J. Chmieleski and Geraldine Chmieleski upon the filing of their complaint alleging violations of the Federal Antitrust Laws and seeking damages in the amount of $300,-000. 00.and injunctive relief. Subsequently, on April 7, 1972, an amended complaint was filed by the original plaintiffs and 10 additional plaintiffs representing 11 Ben Franklin franchised stores. 1 That first amended pleading sought an order determining this action to be maintained as a class action under Rule 23(b)(1), (2), and (3) F.R.Civ.P. Since the Court’s Order of April 5, 1972, this action has been designated as “Complex” and proceedings have been governed by the Manual for Complex and Multidistrict Litigation (1970 ed. with amendments) and the Manual For Complex Litigation (1973 ed. with amendments) as applied by the orders of the Court.
Following what can only be termed protracted prehearing discovery and procedures, plaintiffs’ motion to proceed with this action as a class action was called for full evidentiary hearing on July 21, 1975. That hearing continued with interruptions until completion on September 23, 1975. The filing of proposed findings and conclusions and responses thereto was completed on November 17, 1975, exactly four years after the commencement of this action. The Court deems plaintiffs’ Rule 23 motion to be now fully submitted. 2
I. PLAINTIFFS’ CLASS ACTION CLAIMS
By their Amended Statement Concerning Class Action Issues,, filed on April 8, 1975, and their Documentation of Narrative and Affirmative Statements Using the Term “Period in Suit”, filed on November 14, 1975, plaintiffs have attempted to specifically define the class of persons and entities they seek to represent and the claims they desire to present on behalf of that overall class.
The proposed class is defined as:
“All persons who own or have owned four (4) or fewer Ben Franklin variety stores at the same time and who have entered into the “Ben Franklin Franchise Agreement” with defendant City Products whereby they did and/or are doing business under its trademark “Ben Franklin” in the period in suit.”
The “period in suit” as contained in plaintiffs’ definition of the class is as follows:
(1) With regard to all substantive claims, except the claim concerning confidential rebates from suppliers, the period in suit is during the period commencing on April 7, 1968 and ending on April 7, 1972.
(2) With regard to plaintiffs’ substantive claim concerning confidential rebates from suppliers, the period in suit is during the period January 1, 1960, until April 7, 1972.
Generally, as stated in plaintiffs’ Amended Statement Concerning Class Action Issues, filed on April 8, 1975, the substantive *127 claims of illegal practices with which plaintiffs desire to proceed on behalf of themselves and the proposed class of plaintiffs are as follows:
A. Alleged Illegal Tying Arrangements
(1) Alleged Tying of Accounting Services
(2) Alleged Tying of Store Premises
(3) Alleged Tying of Fixtures and Signs
(4) Alleged Tying of Retail Merchandise
B. Alleged Conspiracy and Confidential Rebates from Supplier
C. Alleged Illegal Price Discrimination
D. Alleged Illegal Exclusive Dealing Requirements
E. Alleged Illegal Encroachment by Company Owned Stores
It is now firmly established that plaintiffs in a class action brought under Rule 23 are not to be required to establish the merits of their substantive claims or a likelihood of prevailing on those claims in order to maintain the claims as a class action. Eisen v. Carlisle and Jacqueline, 417 U.S. 156 , 94 S.Ct. 2140 , 40 L.Ed.2d 732 (1974). However, because the requirements of Rule 23, F.R.Civ.P. involve determinations of commonality and typicality of claims, it is necessary to an appropriate determination of a Rule 23 motion that the Court analyze the substantive claims and defenses of the parties, the essential elements necessary to establish those claims, and the elements involved in the defenses which are likely to be asserted. Therefore, the initial portion of this Opinion will set forth the substantive claims which the plaintiffs desire to present on behalf of themselves and the proposed potential class members.
A. Alleged Illegal Tying Arrangements
Plaintiffs, present and former Ben Franklin franchisees, desire to proceed as a class action with four separate claims .of illegal tying arrangements in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1 , by the defendant City Products Company. In each of those claims, the alleged “tying” item is the ‘‘Ben Franklin” trademark, service mark, and franchise agreement which is “marketed” by the Ben Franklin Division of the defendant City Products Corporation. It is plaintiffs’ contention that the “Ben Franklin” trademark, service mark, and franchise agreement could be obtained by plaintiffs and potential class members only if they subscribed to an accounting service offered by City Products Corporation, subleased their retail store premises from City Products Corporation, purchased retail store fixtures from City Products Corporation, purchased a permanent outside sign from a source connected to City Products Corporation or from City Products Corporation, purchased the merchandise necessary to commence a retail business from City Products Corporation, and purchased the bulk of their retail merchandise from City Products Corporation. Further alleging that the “tying” item possesses sufficient economic power to appreciably restrain competition in the “tied” items, that the “tying” item and the alleged “tied” items are all separate and distinct, and that there is a not insubstantial amount of interstate commerce affected by each of the arrangements, plaintiffs claim that the tying arrangements constitute a per se violation of Section 1 of the Sherman Act. By way of relief, plaintiffs seek an injunction prohibiting the alleged illegal practices as to themselves and the potential class of plaintiffs, and they seek treble damages suffered during the “period in suit” by themselves and each potential class member. Generally, the amount of damages claimed is the difference between the price paid for the alleged tied item and the amount that same item could have been obtained by the plaintiff or potential class member on the open market.
B. Alleged Confidential Rebates
The second category of claim with which plaintiffs d'esire to proceed as a class claim is based on an alleged conspiracy between City Products Corporation and suppliers of retail merchandise to prevent plaintiffs and potential class members from purchasing merchandise for retail sale from suppliers directly and to prevent direct billing of *128 plaintiffs and potential class members by suppliers of retail merchandise. This conspiracy claim, which relates to plaintiffs’ claim that retail merchandise is an item tied to the “Ben Franklin” trademark and franchise agreement, includes allegations that City Products utilizes the extension of credit to potential class members and plaintiffs as a device to compel the purchase of merchandise manufactured or distributed by its “authorized sources”, that City Products received confidential rebates from the authorized sources based on the amount of purchases, and that City Products Corporation utilizes the accounting service allegedly tied to the franchise and trademark granted to plaintiffs and potential class members to monitor the franchisees’ purchases of merchandise from unauthorized or outside sources. Plaintiffs seek on behalf of themselves and the entire potential class of plaintiffs an order enjoining the alleged conspiracy. In addition, they allege a breach of fiduciary duty and a violation of Section 2(c) of the Robinson-Patman Act and seek an award of damages on behalf of each plaintiff and class member stated to be a pro rata distribution of confidential rebates and allowances received by City Products Corporation from suppliers from January 1,1960, until April 7,1972. Fraudulent concealment is alleged to have occurred with regard to this claim, thereby making the statute of limitations inapplicable.
C. Alleged Illegal Price Discrimination
The third broad substantive claim of violation of the federal antitrust laws which plaintiffs desire to present on a class wide basis initially involves the factual allegation that City Products Corporation owns retail stores, has wholly owned subsidiaries which own or have subsidiaries which own retail stores, and franchises “chain stores” which are in competition with franchised stores owned by plaintiffs and potential class members. In this alleged factual context, plaintiffs allege that “chain-stores” and “company owned stores” are given lower prices on supplied merchandise or fixture items than “competing” stores owned by plaintiffs and potential class members. It is contended that this alleged price discrimination is in violation of Section 2(a) of the Clayton Act as amended by the Robinson-Patman Act, 15 U.S.C. § 13 (a), Section 1 of the Sherman Act, 15 U.S.C. § 1 , and the terms of the franchise agreements which exist between defendant City Products Corporation and each of the plaintiffs and potential class members.
Plaintiffs request an injunction prohibiting the alleged price discrimination in the future, and they seek on behalf of themselves and the potential class members an award of damages which is stated to be the amount the franchisees have been “overcharged” for merchandise supplied by defendant City Products Corporation.
D. Alleged Illegal Exclusive Dealing Requirements
The fourth broad category of antitrust claim presented by plaintiffs and desired by them to be maintained on behalf of the defined class relates to plaintiffs’ factual allegation that City Products Corporation requires as a condition to the plaintiffs’ and potential class members’ continuation of doing business under the “Ben Franklin” trademark and franchise agreement that they not engage in the retail “variety store” business except under the “Ben Franklin” trademark and franchise. With regard to this claim, damages are not sought. Rather, plaintiffs seek an injunction prohibiting the termination of a plaintiff’s or class member’s franchise on the basis of his noncompliance with the alleged exclusive dealing requirement, and prohibiting the imposition of the alleged exclusive dealing requirement on plaintiffs or potential class members.
E. Alleged Illegal Encroachment by “Company Owned Stores”
The final broad category of claims which plaintiffs seek to present and maintain as a class action claim for injunctive relief relates to their allegation that there exists a conspiracy to monopolize in violation of Sections 1 and 2 of the Sherman Act between *129 City Products Corporation, the Ben Franklin Division of City Products Corporation, and the T. G. & Y. Stores Company to eliminate “small” stores operating under a “Ben Franklin” trademark and franchise agreement and to replace them with “company-owned” stores. Specifically, plaintiffs allege that City Products Corporation uses stores operating under the “Ben Franklin” trademark and franchise agreement to develop local markets and thereafter enters the same market with a “company owned” store or store owned by its wholly-owned subsidiary to drive the franchisee out of business and appropriate the franchisee’s trade territory. Additionally, plaintiffs allege an attempt to monopolize the “variety stores” industry in violation of Section 2 of the Sherman Act by City Products Corporation. The injunctive relief sought by plaintiffs on behalf of themselves and the potential class of plaintiffs includes an order compelling the defendant City Products Corporation to divest itself of its subsidiary T. G. & Y. Stores Company.
Having outlined the basic claimed violations of the federal antitrust laws which plaintiffs desire to maintain on behalf of the defined class under Rule 23, F.R.Civ.P., the Court will next address itself to the factual background which underlies those claims. 3
II. BACKGROUND OF THE LITIGATION
In connection with plaintiffs’ motion to maintain the claims previously outlined on behalf of themselves and other persons or entities similarly situated and the defendants’ vigorous opposition to that motion, the parties have adduced and the Court has received a voluminous amount of evidence. 4 The evidence has been offered and received solely as it may pertain to the issues raised by the Rule 23 motion, although much of the evidence might be relevant to plaintiffs’ and potential class members’ substantive claims or the defenses thereto. The factual findings made by the Court in its determination of the Rule 23 issues' are for that limited purpose only and are not binding on the parties or potential class members in connection with their substantive claims or defenses. The Court does not in its present Rule 23 determination intend to indicate any opinion with regard to the substantive claims or defenses of the parties or potential parties. 5
A. Organization and Activities of City Products Corporation and its Subsidiaries
The named defendants in plaintiffs’ class action complaint are City Products Corporation (City Products), T. G. & Y. Stores Company (T. G. & Y.) and T. G. & Y. Stores Company of Missouri. City Products is presently a wholly-owned subsidiary of Household Finance Corporation, its capital stock having been acquired by Household Finance in 1965. Prior to its acquisition by Household Finance, City Products had on February 11, 1960, acquired the assets of *130 Butler Brothers Corporation. Included in those assets was the “Ben Franklin” franchise operation formerly operated by Butler Brothers and all of the capital stock of T. G. & Y. Stores Company, and Scott-Burr, Inc. Since the 1965 acquisition of City Products by Household Finance, City Products has conducted the “merchandising” activity of Household Finance Corporation. 6
The “merchandising” activities of City Products are carried out through its various divisions and subsidiary corporations. The divisions of the corporation include: American Furniture Stores, Barker Brothers, John A. Colby & Sons, Dryer’s Furniture Co., Gold’s Furniture and Appliances, and Miller Desk, all engaged in retail fhrnish-ings; Butler Brothers Department Stores, retail merchandise stores; Refrigeration and Cold Storage Division, refrigeration services and ice; and the Ben Franklin Division. The subsidiaries of City Products Corporation include: Coast to Coast Stores, franchises retail hard goods stores; Ball Ice Machine Company, manufacturer and seller of ice machines; Barker Brothers Commercial Division, Inc., institutional interior design and furniture; Bishop & Maleo, Inc., department store; City Workers Service, Inc., former employer of seasonal workers in ice and cold storage plants; Empire State Ice Co., Ltd. (Canada) manufacture and sale of ice; The Hearst-Allen Co., formerly jobber; Huffman-Koos Co., retail furniture stores; SHM, Inc., operates a “Ben Franklin Store” in Michigan; Vons Grocery Co., retail grocery supermarkets; White Stores, Inc., franchises and operates hard goods stores; T. G. & Y. Stores Company, owns and operates retail T. G. & Y. stores, and Scott stores. City Products reported net sales in 1971 was in excess of $1.3 billion with net income in excess of $29 million.
During the “period in suit,” April 7, 1968, to April 7, 1972, both the Ben Franklin Division of City Products and the subsidiary, T. G. & Y. Stores Company, were a part of the merchandising operation of City Products Corporation referred to as the “variety stores operation”. The specific activities of each of these operations is as follows:
1. T. G. & Y. Stores Company
The T. G. & Y. Stores Company owns and operates retail stores throughout the United States. In 1972, it owned and operated either directly or through its wholly owned subsidiaries approximately 820 retail stores in the states of Alabama, Arizona, Arkansas, California, Colorado, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Jersey, New Mexico, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, and Virginia. Of the stores owned and operated by T. G. & Y., approximately 120 stores are referred to and do business as “Scott” stores. 7 With one minor exception, T. G. & Y. operates only retail stores which are owned by it or its wholly owned subsidiaries. It does not engage in the franchising of stores or the distribution of merchandise to independently owned stores.
The T. G. & Y. operation is somewhat independent of City Products Corporation and its other subsidiaries and divisions. T. G. & Y. has its own buying and merchandising organization, its own sales promotion programs, its own stock, lists and stock numbers, its own accounting system, and a separate administrative and personnel system. The T. G. & Y. merchandising operation is divided into nine geographic divi *131 sions, each of which is headed by a division vice president. T. G. & Y. warehouses are maintained in Shreveport, Louisiana; Lubbock, Texas; LaMirada, California; Montgomery, Alabama; Kansas City, Kansas; Edmond, Oklahoma and Oklahoma City, Oklahoma. The company’s business headquarters and central offices are located in Oklahoma City, Oklahoma.
2. The Ben Franklin Division
The primary focus of the evidence presented in this matter is on the Ben Franklin Division of City Products Corporation. This unincorporated sub-entity of City Products, which was included in the package acquired by City Products from Butler Brothers in 1960, had been operated by Butler Brothers since about 1920. The City Products acquisition did not result in any major changes of operation or management in the organization. The activities of the Ben Franklin Division of City Products Corporation are numerous and varied, and it is those activities which form the primary basis of the majority of the substantive claims asserted by plaintiffs herein on behalf of themselves and the previously defined class. The general franchising activities of the Ben Franklin Division and the services and items which it provides to franchisees are as follows:
a. Franchise Operations
During the period 1960 to the present date, the “Ben Franklin” franchise operation of City Products was carried out by the Ben Franklin Division. The operation of the Ben Franklin Division includes the franchising of independently owned “Ben Franklin” retail stores throughout the United States, the selling and distributing of merchandise to those stores, providing a system for store management, and providing various other services to its franchisees. As of September 1, 1972, there were approximately 1,860 franchised stores in the Ben Franklin operation, with all but approximately 158 doing business under the “Ben Franklin” name.
Since 1960, the Ben Franklin Division has centrally directed its franchise operations from its headquarters and conducted operations through seven or eight regional offices and distribution centers. Each region has a manager and staff who plan and develop and provide operational assistance to franchised stores in their region. The managers of the regions are also vice presidents of the Ben Franklin Division of City Products. Those regions and the location of the offices and the warehouses servicing them are as follows. The Chicago Region, encompassing Indiana and portions of Illinois, Iowa, Kentucky, Michigan and Wisconsin, maintains offices in Des Plaines, Illinois. The Ohio Region, encompassing all of Ohio and portions of Kentucky, Michigan, New York, Pennsylvania, and West Virginia, maintains offices in Stow, Ohio. The Baltimore Region, encompassing all of Connecticut, Delaware, Georgia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, North Carolina, Rhode Island, South Carolina, Vermont, Virginia, and portions of Florida, New York, Pennsylvania, Tennessee, and West Virginia, maintains offices in Baltimore, Maryland. The Minneapolis Region, encompassing all of Minnesota, Montana, North Dakota and South Dakota, and portions of Iowa, Michigan, Wisconsin, and Wyoming, maintains offices in Minneapolis, Minnesota. The Dallas Region, encompassing all of New Mexico, and Texas, and portions of Arkansas, Louisiana, and Oklahoma, maintains offices in Dallas, Texas. The Kansas City Region, encompassing all of Kansas and Nebraska, and portions of Arkansas, Colorado, Illinois, Iowa, Missouri, Oklahoma and Wyoming, maintains offices in Kansas City, Missouri. The Memphis Region, encompassing all of Alabama, Mississippi, and portions of Arkansas, Florida, Illinois, Louisiana, Kentucky, Missouri and Tennessee, maintains offices in Memphis, Tennessee. The Los Angeles Region encompassing all of Arizona, Alaska, California, Hawaii, Idaho, Nevada, Oregon, Utah, Washington, portions of Colorado and Wyoming, and the island of Guam, maintains offices in Los Angeles, California.
*132 Each of the Ben Franklin Regions has been divided into three to five “areas” each of which in turn has been divided into three to six “zones”. A Retail Sales Manager is assigned to each “zone” of operations. Since 1960 those managers are the persons with whom the franchisees have had the most frequent contact as they have visited the franchised stores to provide information and help the franchisees on merchandise selection, store layout, competition, store procedures, filing of claims, advertising, promotional programs, displays, accounting, pricing, industry data, and, in general, techniques for operating a successful store.
City Products Corporation is the owner of the United States Patent Office registered service mark “Ben Franklin” issued September 7, 1954, and May 8, 1961, for services to retail variety store owners. It is also the owner of United States Patent Office registered trademark, “Ben Franklin” issued July 26, 1975, which applies to certain types of men’s, women’s and children’s clothing. In its franchise operation, City Products through its Ben Franklin Division enters into franchise agreements with each of' its franchisees. Generally, under those agreements, City Products grants to the franchisee the right to use the “Ben Franklin” name in connection with the operation and advertising of a retail store and to provide certain other services to the franchisee.
The franchise agreements which have been entered into between City Products and Ben Franklin franchisees have been in substantially the same form since 1960. The agreements have normally been entered for a five year term on forms furnished by City Products. The franchise form agreement establishing the current rights and obligations running between City Products and substantially all of its franchisees who own four or fewer franchised stores is form number 1540 (R7-65) which was first used in 1965. 8 Virtually all current franchisees have executed this form agreement which does not vary substantially from the form franchise agreements utilized by City Products since 1960. Occasionally, the printed terms of the form franchise agreements are amended or deleted depending on the particular circumstances of the franchisee. However, these amendments and deletions rarely are made to those portions of the agreements which are pertinent to the claims asserted in this civil action. 9
Under the franchise agreements in effect from 1960 to 1972 each franchisee has paid to City Products an annual franchise fee. Those fees have ranged from $594.00- to $1,500.00, and have been based on the anticipated volume of annual sales for’ newly franchised stores, or on renewal of the franchise the average annual volume of sales for the previous franchise term. 10 The franchise fee paid by the franchisees to City Products does not cover all of the items and services which City Products may supply to the franchisees through the Ben Franklin Division. Mor.e specifically, the franchise fees do not include such services as accounting systems, store development and layout, rent on subleases from City Products, promotional circulars, merchandise, fixtures, or outside signs.
*133 b. Merchandise Distribution
Since 1960, operating through its seven or eight Regional Distribution Centers the Ben Franklin Division has engaged in the activity of selling and distributing merchandise to its franchisees, and to some non-franchised stores referred to as “combination stores”. 11 In general, under the merchandise distribution system, the Division has supplied its franchisees and other customers with information on merchandise, basic and seasonal stock lists of available merchandise and printed or punch card forms to be used by the franchisee or customer in placing orders for the merchandise. Merchandise can be ordered directly from the Distribution Center, indirectly from a supplier or manufacturer through the Distribution Center, or in some instances directly from the manufacturer with billing for the purchase through the distribution center. It has been the practice and policy of the Division that all merchandise ordered by franchisees from or through the Division on order forms supplied by it be billed through the Division. In other words, the Division pays the manufacturer’s or supplier’s invoice for the order and subsequently invoices the franchisee or customer showing the franchisee’s cost, a suggested retail price and percentage markup. Merchandise supplied to franchisees is paid for subsequent to receipt, as opposed to C.O.D. terms, on terms and at prices which are generally applicable to all franchisees. Franchisees and other customers are permitted to order merchandise from or through the Division in relatively small quantities, and delivery is usually on a weekly basis through trucks operated by the Division or common carrier. City Products does not impose a charge in addition to the franchise fee for the service of supplying franchisees with suggestions as to marketing techniques, detailed invoices, stock and seasonal check lists, order forms, lists of new available merchandise, or lists of promotional items. However, it does impose handling charges and except for a few isolated sales it does not sell merchandise to franchisees at its cost. Rather, City Products operates its distribution system so as to realize a gross profit on sales of merchandise to franchisees. 12
As an example of the size and scope of the Ben Franklin Division’s merchandise distribution operation, the evidence established that during the year 1973, each of the eight distribution centers carried for distribution approximately 10,000 different staple merchandise items, 5,000 additional seasonal items, and 2,000 additional promotional items. 13 Through the use of the supplied stock lists, the Distribution Centers also made available by order for factory shipment from suppliers approximately 80,000 additional merchandise items. During the period 1970-1971, the Distribution Centers were supplied by approximately 3,800 different suppliers of merchandise.
Since 1960, the Ben Franklin Division has not been the exclusive distributor of any item or class of merchandise. However, the Distribution Centers do distribute to the stores serviced by them certain items of *134 merchandise which carry a private brand of the Ben Franklin Division. These private brand items are not normally sold to distributors of retail merchandise or to retail stores not serviced by the Distribution Centers. During the period 1968-1972, the Division has not sold or distributed merchandise carrying the private brand or trademark “Ben Franklin”.
In addition to the distribution and sale of merchandise to franchisees and “combination stores”, the Distribution Centers also supply merchandise to a relatively small number of Ben Franklin retail stores which are owned and operated by City Products Corporation and to approximately 60 “Scott” stores which are owned and operated by T. G. & Y. Merchandise supplied to these stores is billed through the use of an intercorporate credit voucher or accounting entry at cost plus 5% for warehouse merchandise and at cost plus 2% for factory orders.
The evidence presented indicates that since 1960 the Ben Franklin Division of City Products has made an effort which is directed to all franchisees to encourage the franchisees to purchase their retail merchandise from or through the Ben Franklin Division Distribution Centers. The Division has during the period from 1960 to 1972 attempted to determine and keep records of the purchases of its franchisees from or through the Distribution Centers as compared to purchases from independent sources, and the term “compliance” has been used by the officers and employees of the Division to indicate the percentage of a franchisee’s total purchases which have been from or through the Division. The Ben Franklin Division has requested its suppliers of merchandise not to sell or bill merchandise directly to its franchisees, but rather to handle all transactions through the Division. And, during the period 1968 to 1972 it has on occasions contacted its franchisees concerning the percentage of merchandise bought from or through the Division in an effort to increase that percentage. Franchisees have since 1960 purchased a large percentage of their merchandise from or through the Division’s Distribution Centers.
Since 1972, the Ben Franklin Division has categorized its franchised stores into three basic categories: Family Centers (17,000 or more sq. ft.); Expanded Variety (10,GOO-17,000 sq. ft.); and Variety (less than 10,000 sq. ft.).
c. Store Development Services
Operating primarily through personnel in its Regional Distribution Centers the Ben Franklin Division carries on various activities in connection with the opening of newly franchised retail stores or the remodeling of established franchised stores. These services include the following.
The Division prepares in connection with a proposed franchised store and a remodeling what is referred to as “marketing survey” or “merchandise survey”. These documents set out for the franchisee matters such as prospective trade areas, population density, type of expected trade, expected competition, and anticipated sales volumes. The Division also in many instances negotiates and prepares the lease for the store premises. Additionally, the Division in connection with the opening or remodeling of a store provides plans for the arrangement of the merchandise in the store and provides personnel to set up the store and participate in the management of the store during the opening. These store development services are usually provided to all franchisees at the time of a store opening or remodeling, and a charge separate from the franchise fee is made for each of the services. The charges assessed for the marketing and real estate services are based upon the projected annual sales volume of the store. The fees charged for personnel to layout and aid in the store opening are based on a weekly charge per man. The fees assessed for store development are set by the Division headquarters and are not usually negotiable on a regional basis.
d. Fixture Merchandising
In addition to the distribution and sale of merchandise for retail sale by the fran *135 chisees, and other customers, the Division also markets store fixtures and exterior signs to the franchisees. These fixture and signs are marketed to the franchisees on a profit basis; the average markup on some fixtures and signs being 20%. The Division obtains the fixtures and signs for resale from various sources, and there is no evidence to establish that all or substantially all of the franchisees are supplied with or encouraged to use similar fixtures, or that the Division attempts to maintain a similar physical appearance for its franchised stores.
e. Lease Operations
City Products has on a large number of the store premises occupied by Ben Franklin franchisees the underlying lease from the owner of the structure. 14 On those premises City Products subleases the premises to the franchisee at a rate which is in most circumstances higher than the rate it pays to the owner of the premises. The difference in the lease rate and the sublease rate is referred to by the Division as “rent override”, the rate of which has been since 1969 governed by written Standard Procedures for the Division.
f. Accounting Services
City Products, through the Ben Franklin Division, operates and provides to its franchisees a retail mail accounting service. This service includes the setting up of an accounting program when the store is developed or commences its subscription to the service, and the providing of basic accounting documents and records which are prepared from the data submitted by the franchisee. The setting up of and the maintenance of the accounting program are the subject of separate charges which are based on the annual volume of business of the franchisee receiving the service. The accounting service is not designed for use or used by “combination stores”, “chain stores”, stores which are distant from a distribution center (Alaska and Hawaii), or stores which had developed a system of their own during the 1950’s when the accounting system was introduced. As of September 1,1972, there were approximately 900 franchised stores subscribing to the accounting service of the Division. All franchised stores which subscribe to the accounting service in addition to other accounting documents, are provided with a periodic statement showing separately their purchases from or through the Distribution Center and their purchases from independent sources.
g. Operation of Retail Stores
During the period 1968 through 1972, City Products owned and operated several retail stores under the name “Ben Franklin”. These retail stores were either managed by the Regional Offices of the Ben Franklin Division or as a separate administrative unit by a separate sub-division of City Products, and they were supplied and serviced by the Ben Franklin Regional Distribution Centers and Offices.
The locations of the nine City Products owned and operated Ben Franklin Stores as of September, 1972, were as follows: Con-nersville, Indiana; Northwoods, Missouri; Clarinda, Iowa; Moberly, Missouri; Engle-wood, Ohio; Toledo, Ohio; Freemont, California; and Indianapolis, Indiana. During the period 1960-1972 City Products owned and operated from 5 to 14 Ben Franklin Stores, and owns and operates several “Ben Franklin” retail stores at the present time.
h. Chain Store Franchising
Included in the previously discussed franchise operations of the Ben Franklin Division is the separate category of franchisees referred to as “chain stores”. These franchisees, who are not included in the class of potential plaintiffs as defined by plaintiffs herein, are those who own 5 or more “Ben Franklin” franchised stores concurrently. Chain store franchisees operate and are serviced similarly to other franchisees with the exception that if they achieve an established annual volume of sales they receive a *136 1% or 2% discount of all merchandise purchased from the Ben Franklin Division.
As of September 1, 1972, twenty-one franchisees owned and operated 177 franchised “Chain Stores” located in 22 states. The location of these Chain Stores by Ben Franklin Region was as follows: Chicago, 31; Ohio, 0; Baltimore, 35; Minneapolis, 6; Dallas, 24; Kansas City, 40; Los Angeles 6; and Memphis, 35.
i. Management and Activities
The majority of the activities of the Ben Franklin Division of City Products are conducted from the Regional Offices and Distribution Centers. However, the evidence establishes that the regions are centrally directed from the Division headquarters, and that the Division has attempted to develop and has developed some uniformity in operations through the use of statements of Company policy and written Standard Procedures for many functional areas within the business. Even so, the responsibility and capability of the Regional Managers is such that they are responsible for the day to day decisions necessary to service the franchisees, and more importantly the majority of the contact between the Ben Franklin Division and its franchisees comes from the Regional Managers or their subordinates in the “areas” and “zones” of their Region.
With regard to the areas of central direction, the evidence establishes that during portions of the period 1968-1972, the Regional Managers did not have plenary power to make all decisions concerning potential or current franchisees. More specifically, they did not have authority without headquarters approval to grant or renew franchises, lease premises, negotiate with suppliers concerning price, approve certain types of direct factory orders, or grant reductions in certain fees established by the Ben Franklin Division.
3. Coordinated Activities of T. G. & Y. and Ben Franklin
Although as can be seen from the above discussion the subsidiary, T. G. & Y., and the Ben Franklin Division maintain a large degree of separation in their activities, there does exist between the two operations a degree of coordination of activities and some exchange of business information. Since 1970 there has been a limited amount of coordination between the operations with respect to purchases of merchandise from suppliers both domestic and foreign, and there have been exchanges of information regarding the prices at which merchandise has been obtained from various suppliers. The operations have exchanged merchandise lists or stock lists, and have exchanged lists showing the locations of stores franchised or operated by them. There has been since 1960 an effort on the part of both the Ben Franklin Division and T. G. & Y. to avoid the location of their stores in close proximity to each other.
B. Activities and Identification of the Named Plaintiffs
The named plaintiffs in this action represent the owners and operators of 11 Ben Franklin franchised retail stores which were during the period January 1, 1960, to April 7, 1972, and are presently located in the states of Missouri, Kansas, and Indiana. With regard to all of those named plaintiffs, and the stores owned and operated by them, the evidence establishes the following. 15
*137 Each of the named plaintiffs was a Ben Franklin franchisee for some part of the period commencing in 1960 and ending in 1972, and while a franchisee paid a franchise fee to the Ben Franklin Division of City Products based on a standard fee schedule which took into account the volume of sales for the franchisee’s preceding franchise term or the anticipated volume of business for a new store. With the exception of plaintiffs Victor and Geraldine Chmieleski, each of the named plaintiffs at some time during the period 1960-72 executed the Ben Franklin franchise form entitled “Ben Franklin Franchise Agreement” No. 1540 (R7-65) on at least one of their stores. The Chmieleskis executed Form No. 1540(8-64) which was identical in all material respects to the form executed by the remaining plaintiffs. Although there were minor modifications in some of the franchise agreements executed by the named plaintiffs on stores not mentioned in their complaint, with regard to the stores which form the basis of the plaintiffs’ complaints the franchise agreements were identical in all material respects.
Under their franchise agreement, each of the named plaintiffs has at some time during the period 1960-1972 owned and operated a Ben Franklin franchised store under the name “Ben Franklin”, and none of them owned or operated 5 or more Ben Franklin franchised stores contemporaneously. During that time in addition to the franchise fee, each of the named plaintiffs paid an additional charge for such services as accounting services, rent, promotional circulars, fixtures, outside signs, merchandise, and store development if such services were received by them during the period 1960 to 1972. Each of the named plaintiffs, except plaintiff Cruse, subscribed to the Ben Franklin Accounting Service at some time during the period 1960-1972. Each of the named plaintiffs purchased some store fixtures and outside signs from City Products during the period 1960-1972, and those plaintiffs who opened a new store during the period mentioned purchased the majority of their store fixtures and opening merchandise from City Products. Each of the named plaintiffs, except Grant and Velma Hallacy, has subleased store premises from City Products at some time during the period 1960-1972, and during that same period each purchased the majority of their merchandise from the Ben Franklin Division and purchased promotional circulars from the Ben Franklin Division. Each claims that the prices on the circulars are set by Ben Franklin and that they are too low for him to realize a profit.
During the period 1960 to 1972, the named plaintiffs have operated Ben Franklin franchised retail stores at the following locations. 16
*138 (1) Chmieleski (a) Locust Street Chlllicothe, Missouri (b) Southtown Center Chillicothe, Missouri
(2) Schwartz (a) Des Moines, Iowa (b) Parkvllle, Missouri
(3) Williams (a) Warrensburg, Missouri
(4) Bell (a) Glenwood, Iowa (b) HIgglnsvilie, Missouri (c) Lexington, Missouri
(5) Hallacy (a) Overland Park, Kansas
(6) Augusta Variety (a) Indianapolis, Indiana
(7) Cruse (a) Carmel, Indiana (b) Zionsville, Indiana (c) Brownsburg, Indiana (d) Beech Grove, Indiana
(8) D. M. & D., Inc. (a) Station Street Indianapolis, Indiana (b) Washington Street Indianapolis, Indiana
(9) Gabel (a) Greenfield, Indiana
(10) Sites (a) Lawrence, Indiana
(11) Synnes Variety, Inc. (a) Indianapolis, Indiana
Each of the named plaintiffs claims with •respect to at least one of their stores that at some time suppliers of retail merchandise have refused to sell merchandise to the store unless the billing was through the Ben Franklin Division. And, each of the named plaintiffs claims that he or she has not acquired an interest in a variety store other than a Ben Franklin franchised store because their franchise agreement gives the Ben Franklin Division the right to cancel their franchise agreement if such an interest is acquired.
Plaintiffs Schwartz, Hallacy, and Williams claim that at some time during the period 1960-1972 a Ben Franklin Store operated by them experienced competition from a T. G. & Y. Store. Plaintiffs Augusta Variety, Inc., Cruse, D. M. & D., Inc., Gabel, Sites, and Synnes, claim that at some time during the period 1960-1972 a Ben Franklin Store operated by them experienced competition from one or more of the Ben Franklin company owned stores in the Indianapolis, Indiana metropolitan area. Those plaintiffs also claim that at some time during the period 1960-1972 they experienced competition from a Ben Franklin Store which was located in the Indianapolis, Indiana area and owned by the Schwarten Corporation, an entity which owned five or more franchised Ben Franklin stores contemporaneously.
Only 6 of the named plaintiffs offered testimony at the evidentiary hearing on their motion to proceed with their complaints under Rule 23, F.R.Civ.P. The witnesses testifying on behalf of those plaintiffs were: (1) Charles R. Cruse; (2) Victor Chmieleski; (3) Fred Sites; (4) William En-mier (Augusta Variety, Inc.,); (5) Monroy J. Wolfe (D. M. & D. Inc.,); and (6) Robert Williams. With regard to the plaintiffs who offered oral testimony through these witnesses, the Court makes the following findings.
Plaintiff Charles Cruse, who currently resides in Zionsville, Indiana, has owned and operated his store in Beech Grove since 1952, doing business under the “Ben Franklin” name. Other Ben Franklin franchised stores owned and operated by*Mr. Cruse include: Zionsville, Indiana, operated under the name “Cruse and Company” until sold in 1965; Carmel, Indiana until sold in 1955 and Brownsburg, Indiana until sold in 1955. During the period 1968-1972 the Beech Grove (“Ben Franklin” store currently in operation by Mr. Cruse was the subject of a Form 1540 (R7-65) Ben Franklin franchise agreement. Mr. Cruse has not and does not lease his Beech Grove store premises from the Ben Franklin Division of City Products, and has not subscribed to the retail accounting system during the period 1968-1972.
With regard to the operation of his Beech Grove store, Mr. Cruse has since its opening purchased the majority of his merchandise from the Ben Franklin Division. He does not claim that the Ben Franklin Division has put pressure on him to purchase merchandise from Ben Franklin, but does claim that outside suppliers have refused to sell to him directly. Mr. Cruse purchased fixtures for his Beech Grove store from the Ben Franklin Division in 1972, and a Ben Franklin sign during the period 1968-1972. He believes that the terms of his Ben Franklin franchise agreement preclude him from owning any interest in a non-Ben Franklin “variety” store. He also is of the opinion that during the period 1968-1972 his Ben *139 Franklin store in Beech Grove was in competition with the three company owned Ben Franklin stores located in the Indianapolis, Indiana area. During the period 1968-1972 there were company owned Ben Franklin stores located from 3.5 to 25 miles away from Mr. Cruse’s Beech Grove Store. Prior to the institution of this civil action, Mr. Cruse was not aware that the Ben Franklin Division received rebates and allowances from its suppliers.
Victor Chmieleski, who currently resides in Chillicothe, Missouri, owned and operated a Ben Franklin franchised store in downtown Chillicothe from 1961-1966 and a Ben Franklin franchised store in a shopping center in Chillicothe from 1966 until 1971. Both stores did business under the “Ben Franklin” name. He is not currently a Ben Franklin franchisee and has no intention of becoming one. For sometime during the period 1968-1972 the shopping center store owned and operated by Mr. Chmieleski was the subject of a Form 1540 (8-64) Ben Franklin franchise agreement.
During the period 1968-1972, the store premises for the Chmieleski store was subleased from the Ben Franklin Division at a rental in excess of that paid by Ben Franklin to the owner of the property, and Mr. Chmieleski did subscribe to the Ben Franklin accounting program during his store operation.
In operating both of his stores, Mr. Chmieleski purchased the majority of his merchandise from the Ben Franklin Division and claims that he was pressured by the Division to do so. He claims that outside suppliers refused to sell merchandise to him directly. Mr. Chmieleski did not purchase fixtures or signs for his stores during the period 1968-1972, and during the time he operated neither of his Ben Franklin Stores were in competition with any company owned Ben Franklin Store, T. G. & Y. Store or Scott Store. He was not aware that the Ben Franklin Division received rebates and allowances from suppliers prior to the institution of this action.
Plaintiff Fred Sites, who currently resides in Lawrence, Indiana and presently owns and operates a Ben Franklin franchised store in Lawrence, has owned and operated his store since 1959 under the “Ben Franklin” name. Mr. Sites’ store is located in the Indianapolis, Indiana Metropolitan Area, and like Mr. Cruse, he claims that he experienced competition from the three company owned Ben Franklin stores located in that area during the period 1968-1972. Mr. Sites’ store was during the period 1968-1972 and is the subject of a Form 1540 (R7-65) Ben Franklin franchise agreement. The store premises are leased by him from the Ben Franklin Division, and he has subscribed to the Ben Franklin accounting system since the inception of his franchise in 1959.
Mr. Sites has purchased the majority of his store merchandise from the Ben Franklin Division, and claims that he has felt pressure to do so. He purchased some fixtures from Ben Franklin in 1968. He claims that outside suppliers have refused to sell merchandise directly, or without billing the sale through the Ben Franklin Division. He was not aware of the fact of rebates and allowances from suppliers to the Ben Franklin Division prior to the institution of this suit.
William Enmier, who with his wife owns the majority of the stock in plaintiff Augusta Variety, Inc., presently resides in Indianapolis, Indiana. He testified that due to his feeling of pressure from the Ben Franklin Division, Augusta Variety has purchased the majority of its merchandise from the Division. In 1968 Augusta Variety remodeled its Ben Franklin Store in Indianapolis, Indiana which has been operated under the “Ben Franklin” name by Mr. Enmier since 1958. Augusta Variety leases the premises for its store from the Ben Franklin Division of City Products Corporation, subscribes to the Ben Franklin accounting service and has a Form 1540 (R7-65) franchise agreement. In 1968, in connection with the remodeling of its store, Augusta Variety purchased fixtures from the Ben Franklin Division and paid a fee to the Division for a “re-lay” of the store. Mr. Enmier claims that during the period 1968- *140 1972 the three company owned Ben Franklin Stores in the Indianapolis area competed with the store owned by Augusta Variety, Inc.
Monroy J. Wolf, the majority shareholder in D. M. & D., Inc., testified on behalf of that plaintiff corporation. His testimony established that the corporation is not presently a Ben Franklin franchisee. However, during the period from 1969 until January 1974, D. M. & D., Inc., owned and Mr. Wolf operated a Ben Franklin franchise store on West Washington Street in Indianapolis, Indiana. That store was the subject of a Form 1540 (R7-65) Ben Franklin franchise agreement, did business under the “Ben Franklin” name, leased its premises from City Products, and subscribed to the Ben Franklin accounting service. Additionally, during the period July 1966 until 1971, D. M. & D., Inc., owned a Ben Franklin franchised store located on Station Street in Indianapolis, Indiana. That store was also the subject of a Ben Franklin franchise agreement, and subscribed to the Ben Franklin accounting service. With regard to both of the stores which were owned by Mr. and Mrs. Wolf’s corporation and operated by Mr. Wolf, he testified that he purchased approximately 62% of his merchandise from the Ben Franklin Division, and that in 1968 he felt pressure to purchase merchandise from the Ben Franklin Division and to discontinue purchases from outside suppliers. He further testified that in 1970 he had been “cut-off” by outside suppliers.
With regard to company owned stores, Mr. Wolf claims that the Ben Franklin Stores which he operated experienced competition from the three Ben Franklin company owned stores in the Indianapolis area during the period 1968 to 1972. He further stated that prior to this suit he was not aware that the Ben Franklin Division received rebates and allowances from suppliers, and that while his corporation was party to a Ben Franklin franchise agreement, he felt that he was precluded from owning or operating a non-Ben Franklin variety store.
Robert Williams, who resides in Knob Noster, Missouri, presently operates a Ben Franklin franchised store in Warrensburg, Missouri. He has owned and operated that store under the “Ben Franklin” name since November 1965 under a Form 1540 (R7-65) Ben Franklin franchise agreement. During the period from 1965 to 1970 his store subscribed to the Ben Franklin accounting service. However, he has not leased his store premises from the Ben Franklin Division and purchased no signs or fixtures from Ben Franklin during the period 1968-1972. Mr. Williams has purchased approximately 98% of the merchandise for his store from the Ben Franklin Division, and testified that outside suppliers have refused to bill him directly for merchandise purchased under the name of his Ben Franklin store. Mr. Williams considered opening a non-Ben Franklin retail store in 1968 but did not do so because he felt that he was prevented from doing so by his franchise agreement. Prior to the institution of this suit, he was not aware that Ben Franklin received rebates and allowances from suppliers.
Mr. Williams testified that in 1971 a T. G. & Y. store was opened in Warrensburg, Missouri approximately one mile from his Ben Franklin store, and that the T. G. & Y. store is in competition with his store in many lines of merchandise.
C. Activities of Potential Ciass Members and Proposed Subclasses
It is stipulated by the parties that the number of active potential class members, as defined in plaintiffs’ First Amended Complaint and as they existed as of September 1, 1972, is at least 1,000. And, the evidence establishes that during each of the years 1968 through 1972 inclusive, approximately 100 Ben Franklin franchisees ceased their franchise operations. The evidence which has been presented to the Court with regard to the identification and activities of these “potential class members” is notably deficient in several respects, particularly with regard to the period of time from April 7, 1968 to April 7, 1972. Nonetheless, the Court will summarize the evidence *141 presented with regard to these past and present “Ben Franklin” franchisees.
Virtually all current Ben Franklin franchisees, who owned four or fewer franchised stores contemporaneously and did business under the “Ben Franklin” name during the period 1968 to 1972, are presently or were party to the five-year term standard form Ben Franklin Franchise Agreement No. (R7-65), or a substantially similar agreement. 17 All of those franchisees paid to City Products Corporation a franchise fee based on their projected or past annual volume of business, and received some services from the Ben Franklin Division in connection with their franchise operation at no additional costs. Franchised “Ben Franklin” stores were in 1972 located in every state of the Union, except Nevada and Delaware. The number of stores operated in 1968 was 2,107 and in 1971 was 1,910.
The size, sales volume, appearance, layout, mix of merchandise, and operation of the “Ben Franklin” franchised stores differs from store to store, and no two franchisees have purchased identical amounts of like merchandise from the Ben Franklin Division of City Products during the period 1968-1972. However, the franchisees were all supplied with similar Ben Franklin stock lists and other lists of available merchandise, and the evidence establishes that they have purchased a large amount of their merchandise for retail sale from or through the Ben Franklin Division Distribution Centers.
All franchisees who opened a new Ben Franklin store during the period 1968-1972 who received store development services or the services of a store opening superintendent, paid an additional fee for those services, and they all paid the initial costs incurred in opening the new store. Those franchisees who obtained the Ben Franklin accounting service during that same period paid a fee for installing the service and an annual fee for that service based on their annual sales volume. Additionally, if. a franchisee received promotional circulars, merchandise, signs, fixtures, or leased his store premises from City Products during the period 1968-1972 a fee or charge in addition to the franchise fee was paid for the services or items received.
Although there is no evidence to establish the precise number of franchisees who subscribed to the Ben Franklin accounting service during the period 1968-1972, the evidence established that there are presently approximately 900 Ben Franklin stores which subscribe to the retail accounting program offered by City Products to its Ben Franklin franchisees. The evidence does not establish the number of Ben Franklin franchisees who leased store premises from City Products during the years 1968-1972, although there was some indication that as of June, 1973, 23.8% of the franchisees subleased their store premises, that “numerous” franchisees subleased from City Products during 1960-1972, and that the majority of those franchisees paid a rent “override” based on a standard schedule. Plaintiffs have failed to offer evidence with respect to the number or approximate number of franchisees who purchased store fixtures or permanent outside signs from the Ben Franklin Division of City Products during the years 1968-1972, or the total amount of those sales, although the evidence does establish that during the years 1960-1972 some franchisees in addition to the named plaintiffs in this action purchased store fixtures and outside signs from the Ben Franklin Division.
On April 7, 1972, all then current Ben Franklin franchisees were sent a letter by the President of the Ben Franklin Division which purported to delete a portion of paragraph 11(e) of the form 1540 franchise agreement. That letter stated that so much of paragraph 11(c) of the standard Ben Franklin Franchise Agreement as gives City Products the right to cancel the franchise if the franchisee acquires any interest *142 in any variety store except a Ben Franklin Store was being deleted.
The evidence adduced establishes that franchised Ben Franklin stores do compete for sales to consumers in numerous product lines with “chain stores”, stores owned by City Products, and stores owned by its subsidiary T. G. & Y., when those stores are located in close proximity to each other or in the same “trade area”. However, other than the evidence pertaining to the named plaintiffs herein, plaintiffs have not offered evidence to establish the number of or location of franchised stores which are claimed to have been or presently are in close proximity to or in the “trade area” of a “chain store”, a store owned by City Products or a Scott or T. G. & Y. store. Defendants’ evidence establishes that as of 1972, 94% of the franchised stores owned by potential class members which were not located in a Department of Commerce Standard Metropolitan Statistical Area were not located in the same county as a City Products owned and operated or Scott or T. G. & Y., or “chain store”. It further established that 41% of the stores owned by potential class members in 1972 which were located in Standard Metropolitan Statistical Areas had no company-owned and operated, Scott, T. G. & Y., or “chain store” located within that area. In those counties and Standard Metropolitan Statistical Areas where franchised stores and a Scott, T. G. & Y., City Products owned and operated, or “chain store” may both operate, there may be a considerable geographic distance between the stores. During the evidentiary hearing in this cause, plaintiffs’ counsel adduced evidence which appeared to express plaintiffs’ intention to limit their proof of “geographic market” for the purposes of establishing competition between potential class members and other stores to various “set up statements”, “market surveys” and “merchandise surveys” which were conducted and reported by either the Ben Franklin Division or T. G. & Y. Stores Company and purport to define the “trade area” of the stores for which the document was prepared. The testimony with regard to these reports indicated they disclose that there were at least 22 franchised “Ben Franklin” stores owned and operated by potential class members and plaintiffs which were operated in the “trade area” of a store owned and operated by City Products, a Scott store, a T. G. & Y. store or a store operated by a franchisee who operated five or more franchised stores. 18
Although the testimony of officers and employees of City Products offered by defendants indicated that records were available, including the franchise agreements between potential class members and City Products, which would establish with certainty those potential class members who had been party to the standard form franchise agreement during the relevant period, which could identify those franchisees who had done business under the “Ben Franklin” name and operated four or fewer franchised stores during the period April 7, 1968 to April 7, 1972, which could identify for the years 1968-1972 a portion of those potential class members who had subscribed to the Ben Franklin accounting service, leased their store premises from City Products, and purchased store fixtures or outside signs from the Ben Franklin Division, those documents or detailed summaries of their contents have not been offered in evidence in this matter. It thus appears that in support of their motion to proceed on behalf of the defined class of potential plaintiffs with the previously discussed claims, the proposed class representatives are relying primarily upon the evidence with regard to the activities of the defendants and their suppliers, the evidence offered which pertains to the named plaintiffs in this action, and the evidence which establishes that the Ben Franklin Division of City Products has since 1960 utilized standard forms to express the terms of *143 their franchise agreement with potential class members. As stated by plaintiffs’ counsel, it is contended that “the standard form Ben Franklin Franchise Agreement which all potential class members have executed is the common denominator of the class,” and “the focus of this lawsuit is the standard terms in the franchise agreement, standard written procedures promulgated by the defendants, and a nationwide conspiracy which has been injurious to all class members.”
The basic problem which has been presented to the Court by plaintiffs’ contentions with regard to the Rule 23 issues is the absence of evidence with regard to the precise identification, status, and activities of the potential class members. The evidence on the record in this proceeding, while establishing that it is likely that all potential class members were party to an identical form franchise agreement with City Products during the period April 7, 1968, to April 7, 1972, fails to establish the identity or number of potential class members who actually received the “items” which were allegedly tied to the “Ben Franklin” name and service mark by the “standard” agreement. In fact the evidence establishes that not all potential class members received all of the allegedly tied items or services. Additionally, plaintiffs’ evidence fails to establish the identity of or number of potential class members who are alleged to have been in competition with allegedly “favored” stores during the period April 7, 1968, to April 7, 1972.
In recognition of the fact that not all of the named plaintiffs herein are current “Ben Franklin” franchisees requesting in-junctive relief, and in view of the evidence which establishes that not all named plaintiffs or potential class members have received all of the items or services which have been allegedly subject to illegal tying arrangements, and not all named plaintiffs or potential class members have operated a retail store in close proximity to or in the “trade area” of an allegedly favored store, the plaintiffs have proposed the following subclasses and subclass representatives in connection with their Rule 23 claims for damages and injunctive relief.
On the “tying of accounting” claim, for damages and injunctive relief, a subclass consisting of all members of the defined class during the period of April, 1968, through April, 1972, inclusive, who have subscribed to and purchased the Ben Franklin accounting system from City Products Corporation is proposed to be represented by current franchisees Schwartz, Williams, Sites and Augusta Variety, Inc., and by former franchisees Chmieleski, Hallacy, Bell, Gabel, and Synnes Variety, Inc.
On the “tying of premises” claim, for damages and injunctive relief, a subclass consisting of all members of the defined class during the period April, 1968, through April, 1972, inclusive, who have subleased from City Products Corporation the store premises for their Ben Franklin store and have paid City Products a rent “override” is proposed to be represented by current franchisees Schwartz, Augusta Variety, Inc., and Sites, and former franchisees, Bell, Synnes Variety, Inc., D. M. & D., Inc., and Gabel.
On the “tying of fixtures and signs” claim, for damages and injunctive relief, a subclass consisting of all members of the defined class during the period April, 1968 through April, 1972, inclusive, who have purchased store fixtures and/or the permanent “Ben Franklin” sign displayed on the exterior of their store premises from City Products Corporation is proposed to be represented by current franchisees Schwartz, Augusta Variety, Inc., Sites and Cruse, and by former franchisees Bell, Synnes Variety, Inc., D. M. & D., Inc., and Gabel.
On the “tying of retail merchandise claim”, for damages and injunctive relief, a subclass consisting of all members of the defined class during the period April, 1968, through April, 1972, inclusive, who have purchased goods and merchandise from City Products Corporation for their Ben Franklin stores is proposed to be represented by all named plaintiffs in this action, including both current and former franchisees.
*144 On the “confidential rebates claim” for damages and injunctive relief, a subclass consisting of all members of the defined class during the period April, 1968, through April, 1972, inclusive, who have purchased goods and merchandise from City Products Corporation for their Ben Franklin stores is proposed to be represented by all named plaintiffs in this action, including both current and former franchisees. 19
On the “price discrimination” claims for damages and injunctive relief, a subclass consisting of all members of the defined class during the period April 1968 through April 1972, inclusive, who have competed with either a “chain store” (a Ben Franklin store owned and operated by a franchisee owning five or more Ben Franklin stores contemporaneously) or with a “company owned” store carrying either the “Ben Franklin”, “Scott”, or “T. G. & Y.” name is proposed to be represented by current franchisees Schwartz, Williams, Augusta Variety, Inc., Sites and Cruse, and by former franchisees Hallacy, Synnes Variety, Inc., D. M. & D., Inc., and Gabel.
On the “encroachment” claims and “exclusive dealing” claims requesting injunc-tive relief only, a subclass consisting of all persons who presently own four or fewer Ben Franklin variety stores at the same time, are party to the “Ben Franklin Franchise Agreement” with City Products Corporation whereby they are doing business under its trademark, “Ben Franklin”, is proposed to be represented by current franchisees, Schwartz, Williams, Augusta Variety, Inc., Sites and Cruse.
III. RULE 23 DETERMINATIONS
A. Preliminary Observations
In the context of the previously discussed claims and factual background, the appropriate determinations must at this point be made with regard to class claims and subclass claims sought to be presented by plaintiffs as representative parties under Rule 23(b)(1), (2) and (3). Prior to the discussion of the Court’s conclusions with regard to the specific Rule 23 issues, the Court will take up some preliminary problems which have surfaced in the consideration of plaintiffs’ Rule 23 request.
Initially, it should be pointed out that since the filing of their First Amended Class Action Complaint on April 7,1972, the named plaintiffs in this action have modified the class of persons whom they seek to represent and abandoned numerous claims which they originally sought to present on behalf of the potential class members. In their original class action complaint, the proposed class of plaintiffs as defined consisted of:
“All persons who own or have owned four (4) or fewer Ben Franklin variety stores at the same time and who have entered into the ‘Ben Franklin Franchise Agreement’ with the defendant City Products whereby they did and or/are doing business under its trademark, ‘Ben Franklin’, in the period in suit.”
At that stage of the litigation, the “period in suit” as used in the definition of the proposed class was the period commencing “at least as early as 1960” and “continuing thereafter to the present date”. In general terms, the substantive claims which were asserted in the First Amended Complaint on behalf of the defined class and the named individual plaintiffs, in addition to broad allegations of combination and conspiracy in violation of the federal antitrust laws, and request for injunctive relief, contained approximately nineteen alleged violations of antitrust laws including the following: claims that potential class members had been coerced into enlarging or remodeling stores; claims that potential class members had been coerced into relocation of stores; claims that potential class members had been coerced into maintaining the resale price of merchandise at certain levels; claims that potential class members had been forced to accept merchandise not *145 wanted by the defendants at prices in excess of the value thereof; claims of price discrimination; claims that potential class members were coerced into purchasing goods, merchandise, fixtures, signs, accounting systems, and other services as a condition to using the “Ben Franklin” trademark; claims that potential class members were coerced to sublease store premises from City Products; claims that ■potential class members were compelled to use all advertising and promotional material sent to them; claims that potential class members were precluded from acquiring an interest in a variety store other than a Ben Franklin franchised store; claims that potential class members had been forced to cease obtaining merchandise and promotional services from outside suppliers; claims of fraudulent misrepresentation made to potential class members regarding the volume of business to be expected; claims of failures to disclose rebates from suppliers; and claims of injury and damages arising from these alleged acts. Subsequently, in their “Statement Concerning Class Action Issues ” plaintiffs restated these claims sought to be presented on behalf of the proposed class.
As has previously been pointed out, just prior to the evidentiary hearing in this cause, plaintiffs filed a document entitled Plaintiffs’ Amended Statement Concerning Class Action Issues, wherein plaintiffs stated their purpose was to “clarify the class action questions presented” and to “evidence the manageability of the class action.” In that document, plaintiffs stated that with one exception, “the class would be limited to persons falling within the class definition beginning April 7, 1968 and ending at the time of trial” and that “plaintiffs will later file appropriate pleadings to encompass the period subsequent to the date of the filing of the First Amended Class Action Complaint”. The exception indicated was with regard to the cL'.m of “confidential rebates” received from suppliers. On that claim plaintiffs stated the original class definition would apply and that damages would be sought from the year I960. 20 Additionally, in their Amended Statement, plaintiffs set forth the claims previously outlined in this Memorandum with which they at that time proposed to proceed on behalf of the potential class members.
Apparently, subsequent to the submission of their Amended Statement, plaintiffs again determined to limit the size of their proposed class, as they subsequently defined the proposed class for all claims except the “confidential rebate” claim to those franchisees with four or fewer stores doing business under the “Ben Franklin Franchise Agreement” and “Ben Franklin” name during the period April 7, 1968, through April 7, 1972; thus deleting from the class those defined class members who had become franchisees during the period April 8, 1972, through the time of trial. More importantly, during the Court’s evidentiary hearing plaintiffs confined the period of time for which damages are sought on behalf of the class to that period of time ending on April 7, 1972, thus narrowing the class damage claim. Plaintiffs have not as of the date of this Memorandum filed their amended pleading which was represented to “encompass the period subsequent to the date of the filing of the first amended complaint” and apparently do not intend to do so. To further compound the confusion, plaintiffs continue to allege that the illegal acts which form the basis of their substantive claims have continued through the present time and that injunctive relief is necessary to adequately protect themselves and class members from further alleged illegal acts and practices. Furthermore, plaintiffs in their proposed findings of fact proposed a subclass of potential class members on their “confidential rebate” claim which includes only those franchisees operating during the period April 1968 through April, 1972, apparently intending to abandon the pre-1968 “confidential rebate” claims of those franchisees in their defined class who operated during the period 1960 to April 7, 1968 and to entirely delete from the proposed class those persons who operated only during the *146 period 1960 to 1968. Additionally, during the evidentiary hearing the plaintiffs proposed to include in the subclass of plaintiffs seeking damages for alleged price discrimination only those who are shown to be in the “trade area” of an allegedly “favored” store by documents compiled and prepared by the defendants, as opposed to those which may be shown to be located within the geographic market of an allegedly “favored” store by the means and methods normally applicable.
Although plaintiffs’ continuous modification of the claims which they seek to present on behalf of other persons, and modification of the class of persons whom they seek to represent, has created confusion in the record in this case, that confusion can be remedied. However, as the record in this litigation now stands, the named plaintiffs in this cause are presently seeking to maintain a limited number of claims on behalf of other persons for a limited period of time, while at the same time they are asserting in their First Amended Class Action Complaint much broader claims on behalf of themselves. The Court cannot determine if this particular situation has been intentionally created by plaintiffs or has been created by them without a realization that statements of record abandoning claims to be presented on behalf of a proposed class do not amount to an abandonment of claims which are asserted by representative parties on behalf of themselves in their pleadings.
It may be that plaintiffs’ have failed to realize that they are at this time asserting damage claims on behalf of themselves which extend from 1960 to the time of trial in this cause, and are only seeking to represent parties with damage claims during the period commencing on April 7, 1968, and ending on April 7,1972. Or, it may be that plaintiffs have intended to abandon any claims on their own behalf that they are not asserting on behalf of the potential class members, and merely have failed to do so formally. The latter appears more likely as in their reply brief filed in this cause on November 10, 1975, plaintiffs’ counsel stated the following:
“The interests of the named class representatives for each subclass and all members of the subclass are perfectly congruent, since the class representatives are asserting only those claims which are asserted on behalf of the class.”
In view of this representation, the Court has for the purposes of its Rule 23 determinations assumed that the plaintiffs as class representatives are seeking to present on their own behalf only those claims, including claims for damages, which they seek to present on behalf of their defined class. Should this assumption later be found to be incorrect, any determination which may be made granting plaintiffs’ motion to represent absent class members may be reevaluated pursuant to Rule 23(c) and (d), F.R.Civ.P.
The second preliminary problem which has surfaced in plaintiffs’ modification of the substantive claims which they seek to present on behalf of themselves and their proposed class of plaintiffs concerns the absence of a meaningful relation between the claims for damages and injunctive relief. Preliminarily, it should be noted that the substantive claims for injunctive relief pursuant to 15 U.S.C. § 26 asserted in plaintiffs’ pleading and Amended Statement Concerning Class Action Issues are broad and general in nature. Basically, the plaintiffs request on behalf of themselves and their defined class of plaintiffs orders enjoining all actions which they alleged to be violations of the substantive federal antitrust laws. 21 In connection with their *147 claims for injunctive relief the plaintiffs’ have continuously alleged that the acts and practices complained of were occurring at the time of the commencement of this action on April 7, 1972, and more importantly they contend that the franchise agreement and procedures of City Products must be changed in order to prevent continued injury to the class and to create a viable system in which Ben Franklin franchisees can operate their business. Except possibly for their “exclusive dealing” claim, the acts and practices of the defendants alleged to be in violation of the antitrust laws have continued according to plaintiffs, since the commencement of this civil action on April 7, 1972 to the present time. 22
In view of plaintiffs’ allegations that the complained of acts and practices of the defendants have continued to the present time, the Court finds it very difficult to understand plaintiffs’ limitation of the claims for damages on behalf of themselves and the proposed class to the period of time ending on April 7, 1972. If, as plaintiffs have alleged, the “common” facts which form the basis of their antitrust claims have existed through the present time, then it would appear to be in the best interest of the class members to assert the claims for damages for that same time, unless of course there is some appropriate reason why damages for the entire period of time cannot be established. In this case, plaintiffs have in effect abandoned the damage claims on their own behalf and on behalf of potential class members for the period commencing on April 8, 1972 and ending at the time of trial of this ease. Most importantly, the reason for that action has not been stated by them to be their discovery that the previously asserted damage claims cannot be presented by or on behalf of the potential class members. Rather, the “simplification” of the claims for damages has been stated to be for the purpose of “enhancing the manageability of the class action” or to “evidence the manageability of the class action.” This stated purpose for the abandonment of substantive damage claims of persons who are included in the class of persons which plaintiffs seek to represent under Rule 23, coupled with plaintiffs’ allegations in support of the injunctive claims, raises fundamental questions concerning the ability and desire of the plaintiffs to protect the interests of the potential class members. There may, of course, be an acceptable explanation for the apparent inconsistency in the asserted claims for damages and injunctive relief. Plaintiffs may have not intended to express an intention to limit the proof of damages to the period ending on April 7, 1972, even though their proposed formula for damage computation on a class-wide basis is limited to that period of time. Or, the explanation may be that the injunctive claims are secondary to the damage claims and plaintiffs are not seriously contending with regard to all claims that the alleged illegal acts and practices of the defendants can be established to have continued on a basis subject to class action treatment substantially beyond the date of filing of the Class Action Complaint on April 7, 1972. Because the record in this cause leaves no doubt that plaintiffs intend to offer proof of damages to the class members only for the period of time prior to April 7, 1972, the Court deems the latter explanation to be more likely a reflection of plaintiffs’ reasoning. 23 A third *148 explanation which may be offered is that plaintiffs have subscribed to the theory that it is in the “best interest” of the class members to have only a portion of-their damage claims presented in a class action on their behalf rather than propose to present all of their claims in a class action which would be “unmanageable” and thus not maintainable. 24 The Court finds this proposition ’ questionable in the context of the substantial damage claims in this case which under the federal antitrust statutes carry provisions for the recovery of treble damages and costs, including reasonable attorneys’ fees, and in view of the possibility that class members may be precluded from presenting their remaining damage claims by reason of their being represented in this class action involving only a portion of their damage claims. 25 Furthermore, in view of *149 plaintiffs’ proposed methods for proof of damages, it appears unlikely that the mere broadening of the period of damages would lead them to believe that “unmanageability” would suddenly become an important factor.
Whatever the reasoning of plaintiffs in 'presenting their seemingly inconsistent claims for damages and injunctive relief on behalf of themselves and their proposed class of plaintiffs, the Court is unable at the present time to find that their proposed presentation of the damage claims is not in the best interest of the potential class of plaintiffs. As the damage claims are proposed to be presented under Rule 23(b)(3), that judgment must be left to those persons who may be declared members of the class which plaintiffs propose in the exercise of their choice to exclude themselves from or intervene in the action under Rule 23(c), F.R.Civ.P. However, plaintiffs’ apparent inconsistency will be appropriately considered by the Court in connection with their motion to proceed on behalf of their defined class and subclasses with claims for injunctive relief under Rule 23(b)(1) and (2).
The third and final preliminary problem which has surfaced in connection with the consideration of plaintiffs’ motion to proceed on behalf of their defined class and subclasses is the absence of evidence by plaintiffs to establish that the members of the subclasses can be identified. Although the defendants’ evidence established that there presently are in existence records which can identify and establish the names of all present and former Ben Franklin franchisees who are members of the overall class as defined by plaintiffs, and there are records which disclose a current address for all current franchisees and some former addresses for former franchisees, there has been on plaintiffs’ behalf a noticeable lack of effort to introduce evidence on the question of how it is to be determined which of these current and former franchisees are members of a proposed subclass. 26 The potential problem is best illustrated by a comparison of the class definition with the plaintiffs’ class claims and some of plaintiffs’ proposed defined subclasses. 27 The identification of those persons who are to be included in the proposed subclasses for portions of the “encroachment” claim, the “exclusive dealing” claim, the “secret rebates” claim and the “tying of merchandise” claim presents- no problem as those subclasses as defined consist of either all current franchisees included in the overall class definition or of all franchisees included in the overall class definition who have purchased any amount of merchandise from *150 City Products during the period April 7, 1968, through April 7,1972. However, with regard to the remaining subclasses, namely, those for portions of the “encroachment” claims, the “tying of premises” claim, the “tying of fixtures and signs” claim, the “tying of accounting” claim, and the “price discrimination” claim, inclusion in the subclass requires a factual determination with respect to each member in the overall class; namely, whether the class member subleased store premises, purchased fixtures or signs, subscribed to the accounting service, or “competed” with an allegedly favored store. Except indirectly with regard to the “price discrimination” claim, plaintiffs did not introduce evidence at the hearing on their class action motion which would form a basis for these determinations which will at some point be necessary in order to establish the identification of the members of the particular subclasses. Apparently, plaintiffs failed to elicit this precise information in their discovery on the class action issues and have operated under the assumption that the information can easily be obtained from the files and records maintained by the defendants. From the evidence offered by the defendants, the Court has concluded that with possibly one exception the files and records maintained by the defendants do disclose the basic information necessary for a determination of which of the potentiál class members meet the basic conditions for membership in each of the subclasses as defined by plaintiffs. It appears likely that upon further discovery from the named defendants, plaintiffs will be able to identify specifically the members of each of their proposed subclasses. It can be concluded therefore that the class and subclasses proposed by plaintiffs are sufficiently definite and the circumstances are such that the Court will be able to determine whether a particular individual is a member of the class or subclass. See 7, Wright & Miller, Federal Practice and Procedure, § 1760, n. 96, pp. 579-584 (1972 ed.).
B. Rule 23(a)(1) Numerosity
The parties have agreed and the evidence supports their agreement that insofar as the overall class as defined by plaintiffs is concerned the class is so numerous that joinder of all members is impracticable within the meaning of Rule 23(a)(1).
Rule 23(c)(4) provides that a “class may be divided into subclasses” as plaintiffs have proposed herein. However, the Rule further provides that “each subclass [is to be] treated as a class, and the provisions of this rule shall then be construed accordingly.” In this context, Rule 23 requires that the Rule 23(a)(1) requirement of numerosity also be met with respect to each of plaintiffs’ proposed subclasses. In that regard, the only subclass which plaintiffs have failed to establish to be so numerous that joinder of all subclass members is impractical is that subclass composed of class members who have “competed” with either a “chain store” or with a “company owned” store “carrying either the ‘Ben Franklin’, T. G. & Y. or Scott name.” As previously discussed, in the context of that subclass definition, plaintiffs have explained that the “competition” required for subclass membership will be shown by “market surveys”, “merchandise surveys” and “set up statements” prepared by the defendants and which disclose “trade areas” of either franchised stores, “chain stores” or “company-owned” stores. Testimony concerning the contents of these documents was permitted by the Court in the evidentiary hearing on plaintiffs’ class action request. That testimony established that approximately 22 franchisees met the requirements for inclusion in plaintiffs’ price discrimination subclass by reason of their “competition” with one or more of the mentioned stores. 28
*151 The Court has concluded that plaintiffs have failed to establish with respect to their subclass on the “price discrimination” claims that the subclass is so numerous that joinder of all members is “impracticable”. The price discrimination claims asserted by plaintiffs on behalf of the proposed subclass of approximately 22 current and former franchisees are not alleged to be based on the terms of the standard franchise agreement, and do not appear to arise out of the same basic facts as the remainder of the claims asserted herein. In that respect, the price discrimination claims are distinct from the majority of the antitrust claims presented by plaintiffs. Plaintiffs have limited their definition of “competition” in such a manner that the membership in the subclass is determinable at the present time, and it does not appear impracticable to make all members of this relatively small group of franchisees parties to the claims of price discrimination. 29
In seeking to maintain a class action or to represent a subclass the burden is upon the plaintiff to establish not only that the class or subclass is “numerous” within the meaning of Rule 23(a)(1) but also that joinder of all members is impracticable. The determination of these requirements is not dependent merely upon the number of class or subclass members, but also involves a consideration of the particular circumstances surrounding the proposed class or subclass. 3b Moore’s Federal Practice ¶ 23.-05 (1975 ed.); see Smith v. Board of Education, 365 F.2d 770 (8th Cir. 1966); Arkansas Ed. Ass’n v. Board of Education, 446 F.2d 763 (8th Cir. 1971).
In the instant case, the evidence fails to establish that joinder is impracticable with respect to the proposed price discrimination subclass, and in fact establishes that because of the relatively small number of subclass members the ability to determine the members of the subclass under plaintiffs’ theory, the feasibility of intervention, the potential amount of the damage claims and the probable existence of individual questions of fact on the price discrimination claims, joinder is practicable and preferable to the proposed action on behalf of the “price discrimination” subclass. 30
C. Rule 23(a)(3) & (4) Typicality and Adequacy of Representation
The Court does not subscribe to the theme that the “typicality” requirement of Rule 23(a) involves a preliminary determination of the desire of the potential class members to obtain the relief requested on their behalf. See, e. g., Ihrke v. Northern States Power Company, 459 F.2d 566 (8th Cir., 1972). Rather it is the opinion of the Court that the typicality requirement is in essence embodied in other provisions of Rule 23, and that it can best be discussed in connection with the requirement that the representative parties will fairly and adequately protect the interests of the class. 3b Moore’s Federal Practice, ¶ 23.06-2, p. 23-325 (1975 ed.). In this connection, the Court will in this section of its memorandum determine if the interests of the representative parties are coextensive with the interests of the class, whether the interests of the class representatives are in any way *152 antagonistic to the interests of the class members, whether the plaintiffs and their attorneys desire to and are capable of conducting their proposed class litigation, and whether the representative parties are members of the class or subclass they seek to represent.
Initially, pursuant to the Court’s finding concerning the status and activities of the proposed class members, it is necessary to point out that plaintiffs have failed to establish that those class representatives who did not appear personally or through their corporate representative at the evidentiary hearing in this cause are members of the class or subclasses they seek to represent. Furthermore, with respect to that category of class representatives, the evidence does not establish that they have interests which are coextensive with those of the proposed class or subclasses, and the Court does not find that they either desire to or are capable of conducting their proposed class litigation. These findings are based on the fact that the category of representative parties who failed to appear at the evidentiary hearing have not established for the period 1968-1972 that they did business under the name “Ben Franklin”, were party to a Ben Franklin Franchise Agreement, and did not own five or more Ben Franklin franchised stores. And those parties did not establish for the period 1968-1972 the prerequisites necessary for their inclusion in any one of the subclasses proposed by plaintiffs. Additionally, this category of class representatives by their failure to appear at the evidentiary hearing, and by their failure to offer any evidence which would establish that they are aware of their responsibility as class representatives, including the responsibility to bear a proportionate share of the costs of notice to class members, cannot by this Court reasonably be found to be adequate representatives of a Rule 23(b), (c) class of persons on serious and substantial antitrust claims. Therefore, the Court finds and concludes that plaintiffs and proposed class representatives Gabel, Bell, Hallacy, Schwartz and Synnes Variety Store, Inc., have failed to establish that their claims are typical of the claims of the class within the meaning of Rule 23(a)(3) or that they will fairly and adequately protect the interests of the class within the meaning of Rule 23(a)(4).
The remaining six plaintiffs and proposed class representatives can be subdivided into two separate categories: those who are currently Ben Franklin Franchisees, Williams, Augusta Variety, Inc., Sites, and Cruse; and those who are former Ben Franklin franchisees, Chmieleski, and D. M. & D., Inc. The Court finds with respect to both categories that the individual plaintiffs genuinely desire to conduct their proposed class litigation, and that they are aware of their responsibility of bearing their pro-rata share of the expenses of litigation, including the costs of giving any required notice to the class members. 31 The Court further finds that counsel for these plaintiffs are qualified, and capable of conducting the proposed class action litigation. Thus far their representation has been of high quality and their prosecution of the class action vigorous. The Court has no reason to believe that it will not continue as such.
In view of the fact that plaintiffs desire to present class and subclass claims for both damages and injunctive relief, it is the opinion of the Court that the *153 named former Ben Franklin franchisees, Chmieleski and D. M. & D., Inc., are not qualified to represent the proposed class and subclasses in all respects. These two plaintiffs who are proposing to act as class representatives are not members of any class or subclass in the requests for injunc-tive relief, and their interests are not coextensive with the interests of current franchisee members of the class insofar as the class claims for injunctive relief are concerned. Therefore, with respect to the class and subclass claims for injunctive relief on behalf of current franchisees, the Court finds that only plaintiffs Cruse, Sites, Augusta Variety, Inc., and Williams may have claims and interests coextensive with those current franchisees. These representative parties are members of the overall class of plaintiffs on the claims for injunctive relief and are members of the following subclasses with their injunctive claims: (1) Tying of Accounting — Williams, Sites and Augusta Variety, Inc.; (2) Tying of Premises — Sites and Augusta Variety, Inc.; (3) Tying of Fixtures or Signs — Sites, Cruse, and Augusta Variety, Inc.; (4) Tying of Merchandise —Williams, Sites, and Augusta Variety, Inc.; (5) Confidential Rebates — Cruse, Williams, Sites, and Augusta Variety, Inc.; (6) Price Discrimination, Encroachment and Exclusive Dealing — Cruse, Williams,. Sites, and Augusta Variety, Inc. The evidence does not disclose that these plaintiffs have interests antagonistic to those of the class or of any subclass insofar as injunctive claims are concerned. It is the finding and conclusion of the Court that these plaintiffs and class representatives do have claims typical of the injunctive claims asserted on behalf of the subclass of which they are indicated above to be a member and that they will fairly and adequately protect the interests of the subclasses and class with regard to those claims for injunctive relief within the meaning of Rule 23(a)(3) and (4).
On the claims for damages which plaintiffs have asserted on behalf of the proposed class and subclasses, the Court has reached the conclusion that the named six plaintiffs, both current and former franchisees, are qualified to represent those class members who are members of the particular subclass of which the particular plaintiffs are also members. The evidence disclosed no interests either of current or former franchisees comprising this category of the named plaintiffs which are antagonistic to those members of the class or subclasses who may have claims for damages. The Court further finds that with respect to the class and subclass claims for damages, all six of the proposed class representatives in the defined category have damage claims coextensive with the interests and claims of the particular members of the subclass of which they are members. As to their damage claims, these six representative parties are all members of the overall class of plaintiffs and the following subclasses: (1) Tying of Accounting — Williams, Sites, Augusta Variety, Inc., Chmieleski, and D. M. & D., Inc.; (2) Tying of Premises — Sites, Augusta Variety, Inc., Chmieleski and D. M. & D., Inc.; (3) Tying of Fixtures or Signs — Sites, Cruse, Augusta Variety, Inc., and D. M. & D., Inc.; (4) Tying of Merchandise — Williams, Sites, Augusta Variety, Inc., Chmieleski, and D. M. & D., Inc.; (5) Confidential Rebates — Williams, Sites, Cruse, Augusta Variety, Inc., Chmieleski, and D. M. & D., Inc.; (6) Price Discrimination — Williams, Sites, Cruse, Augusta Variety, Inc., and D. M. & D., Inc. Therefore, within the meaning of Rule 23(a)(3) and (4) the Court finds and concludes that the representative parties do have damage claims typical of those damage claims asserted on behalf of the subclass of which they are indicated above to be a member, and that they will fairly and adequately protect the interests of the subclass and class with regard to those damage claims.
In reaching these determinations, the Court has rejected defendants’ arguments that the class representatives as both current and former franchisees, cannot adequately represent the class and defined subclasses. Although the Court recognizes that some Courts have adopted this argument in denying class action certification in franchisee antitrust litigation, this Court deems the view expressed by Judge Becker *154 in the decision in Ungar v. Dunkin Donuts of America, Inc., 68 F.R.D. 65 (E.D.Pa.1975), 32 to be the better reasoned view on this subject. In the circumstances of the instant litigation, the most that can be said with regard to the former franchisee’s interest vis-a-vis the claims of class members who are current franchisees for injunctive relief is that the former franchisees are not concerned with this particular aspect of the case. This Court does not view this situation as an antagonistic interest or conflict of interest, but rather views it as absence of coextensiveness of all of the claims of the class representatives and potential class members. In an action such as presented to this Court wherein the claims for damages asserted on behalf of both present and former franchisees constitute one of the primary objects of the suit, the solution to a potential problem concerning the coextensiveness of interest of current and former franchisees in injunctive claims is not a denial of the class suit on that basis but rather is a consideration of the myriad of possibilities presented by Rule 23(c)(4) and (d) for avoidance of any conflict which may arise. The flexibility in Rule 23 coupled with the ease with which plaintiffs’ proposed subclasses could be subdivided to account for the differences in the claims of present and former franchisees, leaves this Court with little doubt that the “conflicts” which have been raised by defendants are more imaginary than real and can be easily remedied should they arise. 33
D. Rule 23(b)(1) and (2) Class Actions
Without discussion of the requirements of Rule 23(a)(2) concerning whether or not there are questions of law or fact common to the class and subclasses proposed by plaintiffs, the Court at this point finds it appropriate to discuss plaintiffs’ request to proceed on behalf of their defined class and subclasses with their claims for injunctive relief in a class action under Subsections (b)(1) and (b)(2) of Rule 23.
An action may be maintained as a class action under Subsection (b)(1) of Rule 23, *155 F.R.Civ.P. if the prerequisites of subdivision (a) are satisfied, and in addition:
“The prosecution of separate actions by individual members of the class would create a risk of
“(A) Inconsistent or varying adjudications with respect to individual members of the class which would establish incompatible standards of conduct for the party opposing the class, or
“(B) Adjudications with respect to individual members of the class which would as a practical matter be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests, . . .
With regard to plaintiffs’ claims on behalf of themselves and the defined class of plaintiffs under Rule 23(b)(1)(A) the Court will assume that there is a risk of separate actions if the class action is not permitted. It Is the opinion of the Court that a class under Rule 23(b)(1)(A) is inappropriate, and because of the types of claims presented in this action, the prosecution of separate actions would not create a risk of the establishment of incompatible standards of conduct for the defendants. This conclusion is based primarily on the fact that plaintiffs’ class claims are premised on the relationship which existed between each of the individual class members and the defendant City Products Corporation. There are numerous individual issues concerning these franchisees. Merely because there is a possibility that in individual suits some class members may establish their claims and others may not does not satisfy the requirements of Rule 23(b)(1). Bogosian v. Gulf Oil Corp., 62 F.R.D. 124 (E.D.Pa.1973). Rather, in order for there to be a risk of varying adjudications, there must be different parties attempting to impose different standards of conduct upon the party or parties opposing the class. Goldman v. First Nat. Bank of Chicago, 56 F.R.D. 587 (N.D.Ill.1972). Plaintiffs have not introduced evidence to that effect in this proceeding and from the circumstances of this case such a situation appears highly unlikely. Furthermore, the defendants in this action, have vigorously opposed certification of a class under Rule 23(b)(1)(A) and thereby have declined the protection afforded to them by that provision of Rule 23.
The Court has arrived at a similar conclusion in connection with plaintiffs’ request to proceed under Rule 23(b)(1)(B). That subsection of the Rule is not applicable to cases such as that presently before the Court, but rather is designed for situations wherein the class members have common rights or interests which should be adjudicated contempbraneously. Rodriguez v. Family Publications Service, Inc., 57 F.R.D. 189 (C.D.Cal.1972); see 3b, Moore, Federal Practice, ¶ 23.35(2) (1973 ed.). The Court finds unpersuasive plaintiffs’ argument that the principle of stare decisis as applied in antitrust litigation creates a risk that adjudications with respect to individual members would be dispositive of or substantially impair the interest of class members. Even less persuasive is their argument that this antitrust action is analogous to a suit concerning patent validity. The volume of evidence offered in connection with plaintiffs’ motion to proceed with their claims under Rule 23 adequately reveals that plaintiffs’ substantive antitrust claims do not merely present a question as to the facial legality of the standard form Ben Franklin franchise agreement under the antitrust laws. Rather plaintiffs’ claims involve in depth examination of the activities of the defendants and the relationship between City Products Corporation and each of its franchisees wherein the standard agreement is only one factor. The plaintiffs herein are seeking to represent a large number of scattered individuals with various different antitrust claims for damages and injunctive relief. This situation does not present that which is required for class certification under Rule 23(b)(1)(B). See National Auto Brokers Corp. v. General Motors Corp., 60 F.R.D. 476 (S.D.N.Y.1973); Bogosian v. Gulf Oil Corp., supra.
For these reasons the Court has concluded that maintenance of the proposed class action and subclass actions under the provi *156 sions'of Rule 23(b)(1) is inappropriate and the motion before the Court in that particular respect will be denied.
An action may be maintained under Subsection (b)(2) of Rule 23 if the prerequisites of subdivision (a) are satisfied, and in addition:
“The party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole; . . .
Initially, the fact that plaintiffs seek to represent present and former franchisees, have eight proposed subclasses in their claims, and the fact that not all members of the overall class proposed by plaintiffs request injunctive relief on all subclass claims, makes it obvious that injunctive relief is not appropriate with respect to “the class as a whole” and makes it necessary to view plaintiffs’ motion to proceed under Rule 23(b)(2) in the context of the proposed subclasses. Thus, the question is whether final injunctive relief or corresponding declaratory relief would be appropriate with respect to any of the subclasses as a whole, and whether any of the proposed subclasses meet the requirements necessary to proceed under Subsection (b)(2) with the claims for injunctive relief.
Insofar as plaintiffs proposed subclasses on their “tying” claims, “confidential rebates” claims and “price discrimination” claims are concerned, as the Court has previously indicated in its preliminary observations of plaintiffs’ Rule 23 motion, the Court has concluded that the claims for injunctive relief are secondary to the damage claims asserted on behalf of those subclasses. 34 Taking into consideration the evidence and arguments presented by plaintiffs in connection with all of their claims for injunctive relief, including those for “exclusive dealing” and “encroachment”, and the obvious economic realities involved in the prosecution of complex antitrust litigation, the Court is convinced that the primary focus of this litigation is to recover damages on behalf of the class representatives and the proposed class members. Notably, plaintiffs have not included in the class of persons whom they seek to represent those persons who may have become franchisees since April 7, 1972, the cut-off date ■ for plaintiffs’ class membership roll, even those persons would theoretically have the claims for injunctive relief presented on behalf of the current franchisees included in plaintiffs’ class definition. Of further note is the fact that not one of the plaintiffs or proposed class members is alleged to have only claims for injunctive relief, and all are proposed members of a subclass on behalf of which damage claims are sought to be prosecuted. These facts have significant bearing upon plaintiffs’ motion to proceed with their proposed class action under subdivision (b)(2) of Rule 23.
This Court is in agreement with the principle that in antitrust cases in which damages under Section 4 of the Clayton Act are a significant element in plaintiffs’ class action claims and in which final relief relates predominately to damages, certification under Rule 23(b)(2) is inappropriate. See 3b Moore, Federal Practice, ¶ 23.40, p. 23-654 (1974 ed.); Ungar v. Dunkin Donuts of America, Inc., supra. 35 Therefore, with regard to those subclasses wherein plaintiffs seek to proceed under subsection (b)(2) with the claims designated as the “tying claims” the “confidential rebate” claims, and the “price discrimination” claims for injunctive relief, the Court has concluded that maintenance of those subclass actions is inappropriate under Rule 23(b)(2).
Plaintiffs seek only injunctive relief with their claims on behalf of the proposed subclasses designated as the “encroachment” claims and “exclusive dealing” claims.
The injunctive relief which plaintiffs seek on behalf of the overall class and in particular on behalf of these two *157 designated subclasses is pursuant to Section 16 of the Clayton Act, 15 U.S.C. § 26 . That section invokes traditional principles of equity and authorizes injunctive relief upon the demonstration of a significant threat of injury from an impending violation of the antitrust laws or from a contemporary violation likely to continue to occur. Zenith Radio Corp. v. Hazeltine Research, 395 U.S. 100 , 89 S.Ct. 1562 , 23 L.Ed.2d 129 (1969). However, the private litigant does not stand as an enforcer of public rights and in order to obtain injunctive relief under Section 16 of the Clayton Act he must demonstrate threatened injury of a personal nature proximately resulting from the antitrust violation. International Telephone and Telegraph Corp. v. General Telephone & Electronics Corp., 369 F.Supp. 316 (D.C.N.C.1973); see Jeffrey v. Southwestern Bell Telephone Co., 518 F.2d 1129 (5th Cir. 1975). In the context of Rule 23(b)(2) therefore, in order to maintain a class action for injunctive relief under Section 16 of the Clayton Act, the class representatives must establish in addition to the Rule 23(a) requirements, first that the defendants have acted or refused to act on grounds generally applicable to the class, and second that'the defendants’ alleged action or inaction, if established, threatens all of the class members with serious loss or injury, thereby making it probable that final injunctive relief with respect to the class as a whole will be appropriate under Section 16 of the Clayton Act. Whether the requirement of a showing of the probability of a threatened serious loss or injury to all of the class members is viewed as a requirement to establish common questions of fact under subsection (a)(3) of Rule 23, or as a requirement which, is inherent to a finding that final injunctive relief under Section 16 of the Clayton Act is appropriate with respect to the class as a whole, the test is the same. In order to maintain a Rule 23(b)(2) class action for injunctive relief under Section 16 of the Clayton Act, the class representative must convince the Court that the alleged action of the defendants which forms the basis of the class action antitrust claims, if established to be true, would in probability show threatened, personal, direct, and serious loss or injury to all of the class members thereby making appropriate final injunctive relief under Section 16 of the Clayton Act with respect to the class as a whole. If it appears to the Court that plaintiffs’ antitrust claims if established would not establish such personal threatened injury to all or substantially all of the class members thereby making appropriate under Section 16 of the Clayton Act injunctive relief to the class as a whole, a class action under subsection (b)(2) is inappropriate. That determination requires an overview of the disparities between the individual class members. See, e. g., National Auto Brokers Corp. v. General Motors Corp., 60 F.R.D. 476, at 492 (S.D.N.Y.1973).
In the context of plaintiffs’ “encroachment” or monopolization claim, the application of the above principles dictates that a Rule 23(b)(2) class action on behalf of the proposed subclasses for which those claims are sought to be presented is inappropriate. Plaintiffs have asserted on behalf of the entire subclass “encroachment” claims, or claims that the defendants have conspired to restrain trade, or monopolized and attempted to monopolize the “variety store” industry and to replace subclass members’ “small” 36 franchised stores with “company owned” Ben Franklin or T. G. & Y. stores. It appears highly unlikely, in ■view of plaintiffs’ evidence and allegations, that plaintiffs’ claims if true would establish a threatened and serious loss or injury to all or substantially all of the members of their proposed subclass. Plaintiffs claim threatened injury to- only a portion of the subclass members; namely those who currently own “small” Ben Franklin stores. That category clearly does not encompass all or substantially all of the members of plaintiffs’ proposed subclass. Furthermore, with regard to the claims of plaintiffs that defendants have attempted to monopolize in violation of Section 2 of the Sherman Act, the plaintiffs have defined the relevant *158 geographic market as one which is essentially local in nature, thus making it more unlikely with regard to that claim that in-junctive relief will be appropriate for the subclass us a whole. In summary, assuming that plaintiffs can establish on behalf of their defined subclass those matters which they allege and contend with respect to their “encroachment” or monopolization claims, it is the opinion of the Court in view of the evidence adduced that it is extremely unlikely that appropriate final injunctive relief under Section 16 of the Clayton Act will be appropriate with respect to the subclass as a whole. Accordingly the motion to proceed on behalf of that “subclass” under Rule 23(b)(2) will be denied.
With regard to the subclass claims denominated as the “exclusive dealing” claims, the evidence establishes that the defendant City Products has acted on grounds generally applicable to the subclass. These actions consist primarily of the insertion of paragraph 11(c) into the standard form franchise agreement and the letter to all franchisees on April 7, 1972, purporting to delete a portion of that paragraph. Plaintiffs allege essentially that defendant City Products has imposed an exclusive service requirement which is an unreasonable restraint of trade, and seek pursuant to Section 16 of the Clayton Act an order enjoining City Products from terminating any franchise agreement merely because the franchisee acquires an interest either directly or indirectly in any variety store except one operated under a Ben Franklin franchise.
As to whether final injunctive relief or correspondingly declaratory relief with respect to the subclass as a whole is likely to be appropriate in connection with the “exclusive dealing” claim, it is the opinion of the Court in view of the evidence adduced that any injunctive relief which is granted on this claim will likely be appropriate with respect to the subclass as a whole. Assuming the truth of plaintiffs’ allegations on behalf of this subclass that there presently exists a significant danger that the terms of paragraph 11(c) may be enforced in violation of the antitrust laws, and that the alleged violation is likely to continue, it is the conclusion of the Court that if plaintiffs can satisfy the requirements of Rule 23(a)(3) with respect to that subclass claim, maintenance of a Rule 23(b)(2) action on behalf of the subclass proposed would be appropriate. 37
E. Rule 23(b)(3) Class Action Issues
In light of the Court’s determination of the motion of the plaintiffs to proceed on behalf of the defined class and subclasses with claims for damages and injunctive relief under Subsections (b)(1) and (b)(2) of Rule 23, F.R.Civ.P., it is apparent that the determinative issues in this proceeding are those presented by Subsection (b)(3) of the Rule. As the questions of law and fact encompassed by each of the substantive claims presented on behalf of plaintiffs’ defined class differ, the Rule 23(b)(3) determinations will be made with respect to each separate substantive claim. And, because the commonality requirement of Rule 23(a)(3) is encompassed by the requirements of Rule 23(b)(3), the Court’s determinations in this section of its memorandum will also be applicable to the Rule 23(a)(3) issues.
An action may be maintained as a class action under Rule 23(b)(3) if the prerequisites of Subdivision (a) are satisfied, and in addition:
“The court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy. The matters pertinent to the findings include: (A) the interests of members of the class in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already commenced by or against members of the *159 class; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; (D) the difficulties likely to be encountered in the management of a class action.”
As stated in the Notes of the Advisory Committee to the present version of Rule 23:
“Subdivision (b)(3) encompasses those cases in which a class action would achieve economies of time, effort, and expense, and promote uniformity of decision as to persons similarly situated, without sacrificing procedural fairness or bringing about other undesirable results.”
* * * * * *
“Private damage claims by numerous individuals arising out of concerted antitrust violations may or may not involve predominating common questions. See Union Carbide & Carbon Corp. v. Nisley, 300 F.2d 561 (10th Cir. 1961), pet. cert. dism., 371 U.S. 801 , [ 83 S.Ct. 13 , 9 L.Ed.2d 46 ] (1963); cf. Weeks v. Bareco Oil Co., 125 F.2d 84 (7th Cir. 1941); Kainz v. Anheuser-Busch, Inc., 194 F.2d 737 (7th Cir. 1952); Hess v. Anderson, Clayton & Co., 20 F.R.D. 466 (S.D.Calif.1957).”
The finding of the Court that questions of law or fact common to the class sought to be represented “predominate” over questions affecting only individual members and that the class action is superior to other available methods of adjudication, is the basic prerequisite to the maintenance of a subsection (b)(3) class action. In deciding this dual issue the Court should consider all issues of law and fact which are reasonably likely to arise in the adjudication of the particular controversy between the parties, and in light of those considerations weigh the significance of the common questions and evaluate whether a class action would achieve economies of time, effort and expense and promote uniformity of results without sacrificing procedural fairness or bringing about other undesirable results. See, Partain v. First National Bank, 59 F.R.D. 56 (M.D.Ala.1973). If, following this process, it is determined that common questions predominate so as to make the class action superior, the potential class action must then be evaluated to determine if it is desirable in view of the factors set forth in (A) through (D) of subsection (b)(3), including the determination of whether or not the action is realistically capable of being managed by the judicial system. In Re Transit Tire Antitrust Litigation, 67 F.R.D. 59 (W.D.Mo.1975). In the event one or more of these latter determinations dictat

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/8790167. Public record. Not legal advice.