# The Elder-Beerman Stores Corp. v. Federated Department Stores, Inc.

> Court of Appeals for the Sixth Circuit · April 11, 1972 · 459 F.2d 138

URL: https://www.frixlaw.com/law-library/cases/9458100

## Case

- **Full name:** The ELDER-BEERMAN STORES CORP. Et Al., Plaintiffs-Appellees, v. FEDERATED DEPARTMENT STORES, INC., Defendant-Appellant
- **Court:** Court of Appeals for the Sixth Circuit
- **Decided:** April 11, 1972
- **Citations:** 459 F.2d 138; 16 Fed. R. Serv. 2d 9
- **Precedential status:** Published
- **Opinion:** Concurring in part by Miller
- **Judges:** Edwards, Miller, Kent
- **Cited by:** 50 later opinions in the Frix Law Library

## Citator (automated)

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## Opinion text

WILLIAM E. MILLER, Circuit Judge
(concurring in part and dissenting in part).
A reversal in this case sets at naught a protracted and complex trial presided over by the District Judge with patience, fairness and ability. Nevertheless, considering the record as a whole and the theories on which the case was presented to the jury with directions to return a general verdict, this result appears to me to be inevitable.
One such theory was the plaintiff’s claim that the proof under Sec. 1 of the Sherman Act established a horizontal boycott in that Rike’s and the suppliers combined and conspired with one another to effect a boycott of plaintiff. Thus the court specifically charged the jury:
The plaintiffs also charge that Rike’s and suppliers that have refused to sell to plaintiffs have combined and conspired to effect a boycott of plaintiffs in violation of the Sherman Act. I have instructed you on the particular meaning of the words “combination”, and “conspiracy” as- they are used in antitrust cases.
The definition of the word boycott may be stated:
“A boycott is an agreement between manufacturers whereby acting together, they agree that none of them will deal with a particular buyer or retailer.”
A boycott is a particular kind of conspiracy. It is a collective refusal to deal by agreement among competing sellers or among competing buyers. It may be a collective refusal to buy from a particular manufacturer as a result of an agreement among competing buyers. Or it may be a collective refusal to sell to a particular customer as a result of an agreement among competing sellers.
What would be boycott, and what would be a violation of the Sherman Act, would be an agreement among several manufacturers whereby they all agree with each other that none of them will sell to a particular buyer. We call an agreement among manufacturers a horizontal agreement, because it is among persons who are at the same level in the distribution process. I am instructing you that a horizontal agreement among manufacturers whereby each agrees with the others not to sell to a particular buyer would be unlawful boycott.
I direct that this explanation is what should guide you in determining whether a conspiracy of the kind alleged has been established by the evidence.
On appeal, the plaintiff advances the same alternative theory that there was *163 sufficient evidence from which the jury could have concluded that there was a concert of action on the part of the suppliers, together with Rike’s, to boycott Elder-Beerman. It is, therefore, argued that there was a per se liability with respect to all of the alleged conspirators on the basis of the ruling in Klor’s, Inc. v. Broadway-Hales Stores, Inc., 359 U.S. 207 , 79 S.Ct. 705 , 3 L.Ed.2d 741 (1959). A careful examination of the record, however, in this case fails to sustain this theory of a Sec. 1 violation. The only reference to suppliers allegedly engaged in such a concert of action were the silver suppliers, members of the silversmiths guild. While there was evidence that a number of the sterling silver suppliers refused to sell to the plaintiff, there is no substantial evidence that there was any communication or agreement between them. In Klor’s the complaint alleged that the manufacturers and distributors of various products conspired among themselves and with a chain of department stores either not to sell to petitioner or to do so at discriminatory prices and on highly unfavorable terms. The defendant filed a motion for summary judgment and the factual allegations of the complaint were not disputed. In consequence, the court held that the complaint was sufficient to establish a horizontal boycott and per se liability on the part of the defendant. In the present case, as noted, the evidence is clearly insufficient to sustain such a theory of liability or any concert of action on the part of the suppliers either among themselves or with Rike’s to boycott the plaintiff, or to eliminate it as a competitor in the market.
The most that the evidence in this case could justify would be a finding of several separate and distinct agreements between Rike’s and one or more suppliers (vertical confinements). But assuming that the jury could have so found, the case would still fall short of a Sec. 1 violation, since there is no substantial proof that any such separate or distinct agreement had as its purpose or effect an unreasonable restraint of trade or the elimination of Elder-Beerman as a competitor in the Dayton market.
Exclusives granted by suppliers to a retailer are not per se violative of the antitrust laws. United States v. Arnold Schwinn & Company, 388 U.S. 365 , 87 S.Ct. 1856 , 18 L.Ed.2d 1249 (1967). The mere fact that a number of exclusives were granted by separate suppliers, acting individually, to the same dealer, even though that dealer was dominant in the particular market, is not enough to invalidate the exclusives under a Sec. 1 theory of liability. The plaintiff and the district court rely upon Poliafico v. United States, 237 F.2d 97 (6th Cir.1956), cert. denied 352 U.S. 1025 , 77 S.Ct. 590 , 1 L.Ed.2d 597 (1957), in support of the proposition that “the fact that one such supplier did not have dealings with another supplier does not matter.” The clearly distinguishing factor, however, is that in Poliafico each conspirator had knowledge of the overall unlawful plan of the conspiracy to sell narcotics, although the conspirators did not have knowledge of the actual conduct or the existence of their co-conspirators. In the case before us the record is wholly insufficient (even to raise a jury issue) that the suppliers had knowledge of an unlawful plan (if there was one) to set up a system of exclusives with Rike’s which had the unlawful purpose of imposing an unreasonable restraint upon trade.
Since I agree with Judge Kent that the alleged Sec. 1 violation was not proved, it follows that the general verdict of the jury was of no effect and that the judgment in favor of the plaintiff must be reversed. Sunkist v. Winckler & Smith, 370 U.S. 19 , 82 S.Ct. 1130 , 8 L. Ed.2d 305 (1962); Volasco Products Co. v. Lloyd A. Fry Roofing Co., 308 F.2d 383, 390 (6th Cir.1962).
However, as I read Judge Kent’s opinion, on remand the plaintiff may be permitted (possibly after some amendments to the complaint) to retry the case on all three. theories of liability. As we find that the Sec. 1 theory was not established by the proof, it is my view that *164 plaintiff has had its day in court on this issue and that it should not be permitted another trial. Also, since we find that the plaintiff abandoned the monopolization theory it has no right to a retrial of that issue. It is my opinion that the district judge should have granted the defendant’s motion n.o.v. both with respect to the alleged Sec. 1 violation and as to the claim of monopolization under Sec. 2.
I further believe that the evidence was sufficient to take the issue of attempt to monopolize under Sec. 2 of the Sherman Act to the jury and that the case should be remanded for re-trial on that issue alone. 1 I agreed that pretrial conferences should prove to be helpful in the District Court in delineating the questions which might arise during the trial.
. An examination of the plaintiff’s brief from page 53 to page 62 reveals that its position with respect to the monopolization issue under Sec. 2 of the Sherman Act is at best equivocal and ambivalent. To me it is misleading. The brief contains the quotations referred to by Judge Kent in his opinion in which it clearly appears that the plaintiff abandoned the monopolization theory. Yet almost in the same breath the plaintiff argues in its brief that the Court’s charge on monopolization was not prejudicial and that there was sufficient proof of monopolization and of the relevant market. In these circumstances, I agree with Judge Kent that the plaintiff should be held to have abandoned this theory of liability.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9458100. Public record. Not legal advice.