# RCM Supply Co. v. Hunter Douglas, Inc. > Court of Appeals for the Fourth Circuit · September 7, 1982 · 686 F.2d 1074 URL: https://www.frixlaw.com/law-library/cases/8915640 ## Case - **Full name:** RCM SUPPLY COMPANY, INC. v. HUNTER DOUGLAS, INC., a Delaware Corporation, Hunter Douglas, NV, a Netherlands Antilles Corporation, and Whittaker Corporation - **Court:** Court of Appeals for the Fourth Circuit - **Decided:** September 7, 1982 - **Citations:** 686 F.2d 1074 - **Precedential status:** Published - **Opinion:** Concurring in part by Sprouse - **Judges:** Bryan, Russell, Sprouse - **Cited by:** 23 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/8915640 ## How later opinions describe it (automated extraction) - reversing judgment for plaintiff on a promissory estoppel claim; plaintiff had “expended $951,000.00 in reliance upon the oral promise by [defendant’s] officials to provide it with their lowest price and an unlimited line of credit for an indeterminate period of time, without … - holding that reliance on an oral promise absent any writing was unreasonable as a matter of law where the parties involved were sophisticated businesses ## Opinion text SPROUSE, Circuit Judge, concurring and dissenting: I concur in the result reached in Part IV of the majority opinion, although I disagree in part with the majority’s rationale. I must dissent from Parts II and III, and would affirm that portion of the district court’s judgment, entered on a jury verdict, awarding RCM $3,000,000 on its Sherman Act claim and $34,966 on its common law claim for malicious interference with business relations. I. My quarrel with Part IV of the majority opinion arises from its conclusion that RCM’s reliance on the promises of HDI was not commercially reasonable. The evidence, viewed in the light most favorable to RCM, the appellee, was that RCM’s president, Larry McCarthy, and HDI’s representative, David Mount, not only had a long-standing business relationship, but also were close friends at the time Mount made the promises in question to McCarthy. In order to induce RCM to become a distributor, HDI promised trade support — a line of credit to purchase the product — and Hunter Douglas’ best price. Relying on these representations, RCM agreed to shift its operations from application to distribution; it moved to a new and larger warehouse, purchased trucks and hired personnel. The jury found that RCM’s reliance on HDI’s representations, viewed in the context of the on-going RCM/HDI relationship, was commercially reasonable. Because this determination is not against the clear weight of the evidence adduced at trial, it should be permitted to stand. *1080 However, as the majority notes, ROM’s claim ultimately must fail as no evidence was produced of specific expenditures made in reliance upon HDI’s representations. II. The majority in Part II of its opinion reverses the district court’s Sherman Act treble damage award of $3,000,000 on the basis that there was not sufficient evidence to sustain the jury’s finding that a 20-coun-ty area surrounding Washington, D. C., was the relevant geographic market. 1 I disagree and would affirm that portion of the judgment. The majority concedes, as does HDI, that the district court correctly instructed the jury as to the proper definition of relevant geographic market and appropriately permitted them to determine the market by special interrogatory. The jury was told: The geographic market that you select must both correspond to commercial realities of the industry and be economically significant. Thus, although the geographic market may be national or international, under other circumstances, it may be as small as a single metropolitan area. Further, there is no requirement that the existence of a national market preclude the existence of a subject [sic] market in a regional area, if you should find from the facts and the realities of the market. The same of course is true for the product market definition. In this case, you have heard testimony from the Defendant that the relevant geographic market is an area in which it operates, specifically, an area roughly east of the Mississippi River. The Plaintiff has submitted to the contrary that the relevant geographic market is the twenty county area that has been referred to as the Washington market. In determining which of these two views is the proper one, you must consider that the geographic market should consist of an area in which the Defendants operate and which the Plaintiff can reasonably turn to for supplies. If you determine that, as a practical matter, RCM can only turn for supplies or purchase their relevant markets [sic] in the so-called Washington market, then that market is the geographic market for Section 2 purposes. On the other hand, if you determine that RCM could turn for supplies in an area broader than the Washington market, then the larger market would be the geographic market for the Section 2 purposes. In determining what is the area in which RCM can practically turn for supplies, you should consider whether there are any differences in transportation costs, distribution facilities, customer inventory or any other factor that would cause the Plaintiff to turn to the supplies solely within the so-called twenty county area. The majority now seeks to substitute its judgment for that of a properly instructed jury. While the Tampa Electric rule cited by the majority is indisputably correct, and in fact was paraphrased in the district court’s instructions, the majority’s exclusive reliance on this rule is misleading. Market definition is always a matter of judgment; 2 the legal rule guiding the jury’s consideration of evidence determining the relevant market is not a rigid rule, nor could it be. As the Supreme Court has recognized: Congress prescribed a pragmatic factual approach to the definition of the relevant market and not a formal, legalistic one. The geographic market selected must, therefore, both ‘correspond to the commercial realities’ of the industry and be economically significant. Thus, although the geographic market in some *1081 instances may encompass the entire Nation, under other circumstances it may be as small as a single metropolitan area. Brown Shoe Co. v. United States, 370 U.S. 294 at 336-37 , 82 S.Ct. 1502, at 1529-1530 , 8 L.Ed.2d 510 (1962). 3 The jury is permitted, if not required, to consider all the circumstances surrounding a purchaser’s acquisitions, including factors such as transportation costs, distribution facilities, customer inventory, or any other factor that could limit the purchaser to a specific area. If sellers of a product within a given geographic area can increase price or cut production without a prompt flow of supply from other sources into the area, those sellers are operating in a separate geographic market. 4 This determination is singularly one for the jury. The jury in the ease sub judice in a three week trial received evidence from both parties regarding the factual basis for a geographic market. ROM’s expert testified that the Washington market constituted an area of effective competition and, at least in economic terms, was a proper geographic market. The HDI expert, while refusing to acknowledge that RCM and HDI were competitors, conceded that if they were, the Washington area market would be appropriate. There also was evidence presented to the jury that the “commercial realities” of the aluminum siding industry caused manufacturers to enter and make siding available to some areas and not to others, and that except by having a presence in a regional market, by a regional distribution center or through a major independent distributor, manufacturers did not compete in regional markets. For example, HDI conceded that it was not present in the Baltimore market because it did not have a regional distribution center. Also, the jury could have viewed HDI’s own arrangements with its customers as evidence of the regional character of the market. Despite the fact that HDI’s largest customer, Ryan Homes, was a national builder, Ryan did not purchase from HDI on a national basis and HDI did not compete for Ryan’s business on a national basis. In my view, the evidence presents a classic jury issue. Concededly, this issue is not as simple to define as are the factual issues arising from the average automobile traffic accident. Antitrust issues by and large are complex and trial courts are truly tested in instructing juries on how to apply legal principles to the proven facts. The trial court in the case sub judice met that test admirably, and the district court instructed the jury clearly, simply and correctly. Unless we are to require judicial fact determination rather than jury fact determination on the basis of complexity, we must respect such jury verdicts. 5 III. I would likewise affirm that portion of the judgment awarding RCM $34,966.00 for “malicious interference with business relations.” The majority correctly notes that under the applicable Maryland law defendants in this common law action have a privilege to commercially compete and that proper commercial competition is a defense to a claim of malicious interference. I cannot agree with my brethren on this panel, however, that the jury was not correctly instructed concerning this defense. *1082 The jury was instructed that ROM was required to prove four elements: (1) that HDI acted willfully and intentionally, (2) that the acts were calculated to cause damage to ROM’s lawful business pursuits, (3) that the acts were done with the unlawful purpose of causing loss or damage to ROM’s business and were undertaken without just cause and (4) that ROM was damaged. Under this instruction it seems apparent that HDI’s competition privilege is protected, since ROM is required to prove that HDI’s actions were “undertaken without just cause.” The instruction itself is in perfect accord with Maryland law on malicious interference. Beane v. McMullen, 265 Md. 585 , 291 A.2d 37 (1972). As Beane points out, it is the “without just cause” component which is the “malicious” component of malicious interference, and it is the existence of malice which negates qualified privileges to interfere with another’s business relations. Therefore, I must respectfully dissent. . Although there has been some scholarly criticism of the proposition, see, e.g., Moore, The “Relevant Market” Question in an Attempt to Monopolize Case Under Section 2 of the Sherman Act, 10 Sw.L.Rev. 103 (1978), the present position, at least in this Circuit, is that the plaintiff in an attempt-to-monopolize case must prove a “relevant market,” which comprises both a geographic and a product market. American Football League v. National Football League, 323 F.2d 124 (4th Cir. 1963). . L. Sullivan, Handbook on the Law of Antitrust § 12, at 42 (1977). . Brown Shoe Co., of course, arose under § 7 of the Clayton Act. Although the majority, without comment, dismisses cases arising under § 7 as distinguishable, there is a substantial body of both case law and commentary to the contrary. See, e.g., van Kalinowski, Market Definition Under Section 2. The Applicability of Clayton Act Section 7 Analysis, 10 Sw.L. Rev. 95 (1978); United States v. Grinnell Corp., 384 U.S. 563 , 86 S.Ct. 1698 , 16 L.Ed.2d 778 (1966). . Sullivan, supra, at 67. . Because the majority finds that there was no showing of a relevant geographic market, it did not reach the issue of relevant product market. I note, however, that the jury was properly instructed on the definition of relevant product market, and heard evidence that only vinyl and steel were interchangeable with aluminum siding for product market purposes. The jury’s finding was not unreasonable or against the clear weight of the evidence. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/8915640. Public record. Not legal advice.