# Petition — M. C. Manufacturing Co. v. Texas Foundries, Inc.

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition
- **Published:** January 1, 1976
- **Citation:** 424 U.S. 968

## Text

MICHAEL RODAK, V. CLERK }

In the Supreme Court

of the
United States

OCTOBER TERM, 1975

M. C. MANUFACTURING CO., INC., and
UNIVERSAL AUTOMATIC MACHINE CO., INC.,

Petitioners,
VS.

TEXAS FOUNDRIES, INC., and H/R PRODUCTS, INC.,
Respondents.

PETITION FOR WRIT OF CERTIORARI TO
THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

JIM AMMERMAN
P. O. Box 299
Marshall, Texas 75670

JACK N. PRICE

306 East 11th, Suite L-7
Austin, Texas 78701

ATTORNEYS FOR PETITIONERS.

Langley’s, 2213 E. Austin, F. O. Box 278, Marshali, Texas 75670, 214/938-6002

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D d en 2
JJ. I I. 6.665. ds cicodesssventacses 2
The Robinson-Patman Questioůorurk 3
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Statement of the PP Tee ee eee Pee rer 5
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The Robinson-Patman Quest io 18
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Appendix
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Judgment Dated August 21, 1975.................. App. 12

Opinion of Novmeber 12, 1975.................... App. 13

TABLE OF CASES

American Can Company v. Bruce’s Juices, 187 F. 2d 919

(5th Cir. 1951) modified 190 F. 2d 73, 74...........

Cherokee Laboratories v. Rotary Drilling Services,

383 F. 2d 97 (Sth Cir. 1967) cert. den. 390 U.S. 904...

Hobart Brothers Co. v. Malcolm T. Gilliland, Inc.,

471 F. 2d 894 (5th Cir. 1973) cert. den. 412 U.S. 923...

Lehrman v. Gulf, 464 F. 2d 26 (Sth Cir. 1974) cert. den.

es err er ere re eT eee eee

Terrell v. Household Goods Carriers Bureau,

404 F. 2d 16 (Sth Cir. 1974)... 1.1... ccc .

U. S. v. Shotwell Mfg. Co., 78 S. Ct.

nn

Wall Products Co. v. National Gypsum Co.,

RI Fe nr ee ae

Youngstown Sheet & Tube Co. v. Lucey Products Co.,

430 F. 2d 135 ay r

6

NO :

In the Supreme Court
of the United States

October Term, 1975

M. C. MANUFACTURING CO., IN., and
UNIVERSAL AUTOMATIC MACHINE CO., INC.,

Petitioners.
VS.

TEXAS FOUNDRIES, NC., and H/R PRODUCTS, INC.,
Respondents.

PETITION FOR WRIT OF CERTIORARI TO
THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

Petitioners, M. C. Manufacturing Co., Inc., and Universal
Automatic Machine Co., Inc., (hereinafter collectively referred to
as Universal“) respectfully pray that a writ of certiorari issue to
review the judgment of the United States Court of Appeals for
the Fifth Circuit entered in this proceeding on August 21, 1975.

OPINIONS BELOW

The opinion of the Court of Appeals is reported in 517
F. 2d 1059. No opinion was rendered by the district court.

2
JURISDICTION

The judgment of the Court of Appeals was entered on
August 21, 1975. A timely motion for rehearing was denied on
November 12, 1975, and this petition is filed within ninety days
of that date. This court's jurisdiction is invoked under 28 U.S.C.
Sec. 1254 (1).

QUESTIONS PRESENTED

Two questions are presented by this petition. One involves
the Sherman Act, and the other involves the Robinson-Patman
Act.

The Sherman Act Question

The Court of Appeals held that petitioners-plaintiffs,
Universal, had failed to prove fact“ of injury resulting from a
Sherman Act Section 1 violation. The proof showed that as a
result of a forbidden conspiracy, Universal's chief supplier,
respondent-defendant Texas Foundries, loc., extended a lower
price quotation to petitioners-plaintiffs’ competitor, respondent-
defendant H /R Products, Inc., which enabled H /R to become
successful bidder for a government contract to produce type
„G“ lifting plugs. The Court of Appeals concluded (1) that the
price granted H/R by Texas Foundries couid not be utilized by
Universal in proving fact“ of injury, i.e., in establishing that
Universal could have secured the award, and (2) the evidence
revealed that a third company, i.e., Land-Air, I.., was second
low bidder and would have secured the award in the absence of
the conspiratorially low price. The first question, therefore,
consists of two parts:

1. Did the Court of Appeals for the Fifth Circuit
correctly conclude that Universal failed to
establish fact“ of injury where,

(a) the evidence shows that by utilization of the
same price extended by Texas Foundries

3

to H/R, Universal would have been the low
bidder? and,

(b) the evidence reveals facts upon which the
jury could justifiably conclude that the
second low bidder, Land-Air, Inc., was not
eligible for and would not have received the
award even in the absence of the H/R bid?

Robinson-Patman Act Question

With respect to the Robinson-Patman Act claim, the proof
shows that on November 12, 1971, Universal entered a purchase-
order contract with Texas Foundries for rough-cast plugs at a
price of 32.5-cents each, F.0.B. Texas Foundries Plant (Lufkin,
Texas). On November 18, 1971, Texas Foundries quoted 32.5-
cents per casting price F. O. B. Texas Foundries plant, in response
to Universal's request for quotation upon which to base a bid for
Government Contract No. DAAA-09-72-0208. Texas Foundries
represented that this was the lowest price it could or would
extend, but on November 29, 1971 (according to the finding
of the jury) Texas Foundries quoted a price of 31¢ per casting
F. O. B. South Bend, Indiana (H /R's place of business) to H /R. As
a result of these discriminatory quotations, Universal did not
receive the award of Government Contract DAAA-09-72-C-0208,
and therefore,, obviously, did not purchase rough castings from
Texas Foundries with which to fulfill such contract. However,
Universal (pursuant to the November 12, 1971 purchase order)
and H/R (pursuant to its November 29, 1971 agreement) both
purchased the same item (the rough cast plugs) from Texas
Foundries, at different prices and upon different freight terms,
during the same period of time. Despite this, the lower court
held that Universal failed to prove that the discriminatory
purchases were ‘in competition” and therefore no violation of
Robinson-Patman was demonstrated. Accordingly, the Robinson-
Patman Act question is:

2. Is a Robinson-Patman Act violation established,
prima facie, when the proof shows that

4

competiting bidders for the same Government
awards are being sold the same item, at discrimi-
natory prices, during the same period of time,
albeit for two different contract awards, where one
of the bidders is prevented from securing one of
the contract awards because of the discrimatory
pricing?

STATUTES INVOLVED

The statutory provisions involved are Section 1 of the
Sherman Act (Title 15 U.S.C. Sec. 1), Section 2(a) and (f)
of the Robinson-Patman Amendment to the Clayton Act, (Title
15 U.S.C. Sec. 14 (a) and (f) ) and Section 4 of the Clayton Act
(Title 15 U.S.C. Sec. 15) which provide, in pertinent part:

Sherman Act Section 1:

“Every contract, combination in the form of trust
or otherwise, or conspiracy, in restraint of trade or
commerce among the several states, or with foreign
nations is hereby declared to be illegal!

Robinson-Patman Act Section 2(a):

“It shall be unlawful for any person engaged in
commerce in the course of such commerce, either
directiy or indirectly, to discriminate in price between
purchasers, ...”.

Clayton Act Section 4:

That any person who shall be injured in his business
or property by reason of anything forbidden in the
antitrust laws may sue therefor in any district court of
the United States.

5
STATEMENT OF THE CASE

The facts of the case are summarized, in general fashion,
in the initial portion of the opinion of the Fifth Circuit Court of
Appeals. Additional facts are noted in the sections of the
opinion relating to the ‘Sherman Act Claim“ and the “‘Robinson-
Patmar Claim”. Those facts are accurate, except to the extent
specifically challenged in this application. (An “in-depth”
analysis of the facts is contained in Appellee’s Brief filed in the
Fifth Circuit Court of Appeals, to which reference may be had if
necessary). With this qualification, the statement of the case by
the lower court is adopted.

REASONS FOR GRANTING THE WRIT
Sherman Act Questio.

The opinion of the Fifth Circuit Court of Appeals
recognizes that the jury was justified in finding a violation of
Section 1 of the Sherman Act. The opinion states:

“If plaintiffs’ theory of the case and version of the
evidence were accepted by the jury, as they may have
been, then a Sherman Act violation has been
established.”

However, the opinion holds that the “fact” of injury has
not been established because plaintifts failed to establish
that in the absence of the defendant's discriminatory pricing
scheme Universal would have received this contract

The Court of Appeals correctly notes that the bid of
Universal on contract DAAA-09-72-C-0208 was the third iow bid
submitted, the first being that of the defendant H/R and the
second being that of Land-Air, Inc. Universal demonstrated,
using the same profit and cost factors employed in submitting
its bid, that had it received the same price as was extended to
H/R it would have been the successful bidder, i.e., its bid would

have been substantially lower than that of H/R.' This would
have made Universal the low bidder, since the record shows that
the only other company to obtain a price quotation from Texas
Foundries for this contract was Deco-Grand, whose bid was not
in contention (and who, therefore, would not benefit from the
8 e bid revision).

The Fifth Circuit Court holds that this conspiratorially
iow” price extended to H/R must be disregarded in determining
the “fact” of injury, i.e., whether Universal would have been the
successful bidder. This is a novel proposition, without precedent.
it is contrary to concepts engrained in antitrust laws.
Comparable assumptions have long been sanctioned in proof of
the extent of damages. For example, Wa// Products Co. v.
National Gypsum Co.,357 F. Supp. 832, allowed plaintiffs to
recover the difference in the price actually paid for wallboard,
and the price which it was assumed Plaintiffs would have been
paid absent the conspiracy. Cherokee Laboratories v. Rotary
Drilling Services, 383 F. 2d 97 (Sth Cir. 1967) cert. den.
390 U.S. 904 sanctioned the assumption by plaintiff of
defendant's sales figures in making a damage projection (of
lost profits). Lehrman v. Gulf, 464 F. 2d 26 (Sth Cir. 1974)
cert. den. 409 U.S. 1077, and Terre// v. Household Goods
Carriers Bureau, 494 F. 2d 16 (Sth Cir. 1974) upheld
assumptions of projected sales figures based on opinion (expert
and non-expert) evidence, and Hobart Brothers Co. vs. Malcolm
T. Gilliland, Inc., 471 F. 2d 894 (5th Cir. 1973) cert. den.
412 U.S. 923, holds that damage proof can be based on
assumptions if the assumptions rest on an evidentiary base.
Obviously, therefore, Universal could assume the lower sales
price for the purpose of proving extent of damages. What
logic is there, therefore, in denying its use to prove fact of
damages?

Reasoning further, it is obvious that the “conspiratorially

1

Mr Merle Childress testified thet had the lower price extended H/R been
wanted to Universal. Universal's Did would have Deen submitted on this dess.
with profit and other cost factors the same

7

low” price is a fact that is an integral part of the proof of the
conspiracy and an overt action pursuant to the conspiracy. Why
then, must it be ignored when determining “fact” of damage?
The illogic of the proposition is compound.

Furthermore, the role of the Land-Air bid was not properly
examined by the lower court, which held: it is crystal clear
that Land-Air was a viable bidder and that, even after dis-
regarding H /R's low bid because of the special conspiratorially
low price it received from Texas Foundries, Land-Air’s bid
stood between Universal and the opportunity to acquire this
contract.” The evidence is to the contrary for, even accepting
the Court of Appeals’ position that the “conspiratorially low”
price must be ignored in ascertaining fact“ of damage, the
jury was justified in finding that Universal would have received
the award, and that Land-Air was not eligible for and would
not have received it. Though it is adequately shown by the
record, an affidavit obtained from a Land-Air executive and
submitted to the Court of Appeals in connection with the
petitioners-pilaintiffs’ motion for rehearing lays to rest any
question on the point.

These propositions will be discussed separately, with the
latter proposition being discussed first.

1. Land-Air was not a viable bidder and did not stand
between Universal and the opportunity to acquire
the contract.

Bids on the contract in question were opened on
December 3, 1971. App. 456. The contract award was signed on
December 30, 1971. P. Ex. 46, App. 1397, et. seq. The pre-
award surveys were heid, as they are customarily held, within the
period from the date of the bid opening to the date of the

contract award. App. 211. The purpose of the pre-award survey
is succinctly stated in the testimony of Mr. Childress (App. 207):

Q. Now, what does the term if you are familiar it
(sic) in connection with your dealings with the govern-
ment or APSA called a ‘pre-award survey’?

“A. Upon notification that your company is either
low bidder or within the realm of competitive prices,
among the low bidders, then the government performs
what they call a pre-award survey on usually the three
low bidders. That is for the purpose of establishing
qualifications of each company to ascertain the fact
that they can perform if the government awards them
the contract, at this pre-award survey where they delve
into all aspects of your business

The record reveals that there is a misconception anc a mis-
statement in the following quotation critical to the lower court's
opinion relating to the pre-award survey and Land- Air's status as
a ‘viable bidder”:

“While it is true that Land-Air’s bid was initially
classified as nonresponsive and consequently Land-Air
did not receive a pre-award survey, a memo from the
APSA contracts specialist in charge of contraci
DAAA-09-72-C-0208 negotiations introduced at trial
reveals that an amendment was received from Land-Air
on December 1, which negated the previous non-
responsive action considered, and led to reinstatement
of Land-Air’s bid prior to award. It is crystal clear that
Land-Air was a viable bidder and that, even after dis-
regarding N / R's low bid because of the special, con-
spriatorially low price it received from Texas
Foundries, Land- Air's bid stood between Universal and
the opportunity to acquire this contract.”

Land-Air’s failure to receive a pre-award survey was not a
consequence of the initial classification of Land- Air's bid as non-
responsive, though it is true that Land-Air’s amendment caused a
change in the previous classification, and was in time for the bid
opening December 3, 1971. App. 1394. P. Ex. 43. The amend-
ment was inadvertently misdirected and placed with the no
bid’ responses, but this was corrected and the Bid Opening
Officer and Recorder were notified of the error on December 17,

1971, and corrective action was taken. App. 1394. This was
well within the pre-award survey ohase, as is evidenced by the
fact that the pre-award survey of Universal Automatic Machine
Company, Inc., was not made until December 16, 1971. P. Ex.
45, App. 1396.

Therefore, a pre-award survey could have been made prior
to the bid awara had Land-Air been considered for the award.
But the record conclusively demonstrates that Land- Air received
no pre-award survey and was not in position to be considered for
the award, and therefore was not a “viable bidder”.

H/R, Universal, and AMS Manufacturing, Inc. of Amity-
ville, N. V., were all subjected to pre-award surveys. AMS
submitted the fourth low bid. P. Ex. 43, App. 1391. Govern-
ment regulations require a pre-award survey to determine
whether a bidder is “responsible” (to be distinguished from
“responsive’’) and entitied to an award. Witness the following
excerpts from the testimony of Anthony Costa, Supervisor
Contracts Speicalist, Procurement Division, United States Army
Ammunitions Command, Joliet, Illinois: (App. 397-399)

Q. What constitutes the evaluation phase? What
specific activities and various distinct categories make
up a part of the evaluation phase?

“A. The first thing that would be considered is to
review the bid packages of those within the zone of
consideration of an award to verify that they are all
responsive.

Q. What establishes the criteria for the zone of
consideration?

“A. Well, if one award is made - - it depends on the
bid process. The one award is made and maybe ten
bids submitted, and the first four maybe are close.

“Then the balance on the remaining six, see, the prices
are entirely out of line, then you would concentrate

10
on the first four on this particular example lm giving.

Q. Yes sir. You would select from all the bids those
that appear to be more nearly competitive with each
other as to price?

“A. Yes. You would include all bids in the evaluation
but would concentrate on the low. You would check
all the packages to see that they are all responsive to
the invitation..

Q. You probably have had occasion where bidders
simply did not meet some specification in the in-
vitation to bid and, therefore, would have to be
eliminated?

“A. Yes. If a bidder is non-responsive, he can be
eliminated.

Q. Let me go on the record and ask you about this
particular lift plug bid that we have identified and
whether it had any restriction on it concerning the
type of prime contractor that would have to ve
selected by you folks?

“A. Yes. This solicitation, the one you asked about - -
Do you want me to repeat the number?

Q. No, sir.

“A. It was a one hundred percent small business set-
aside.

Q. Could you tell us what that means?
A. It was restricted to small business firms.

Q. What is the next step, sir, in this part of the

11
evaluation phase?

“A. The next step would be to request a pre-award
survey on that firm or firms that you feel would have
to be termed as responsible producers.

Q. What is a ‘pre-award survey’? How would you
define that for us?

“A. | think the name in itself indicates what it is. Do
you want a better or different answer?

Q. Let me ask you this: Your rules and regulations
require that a pre-award survey team be constituted to
evaluate a certain number of bidders in a given con-
tract to determine whether or not they are responsible
bidders? 8

“A. Yes, sir.” (Emphasis supplied)

There is one instance in which a bidder can be determined to
be “responsible” without a pre-award survey: (App. 410)

Q. Do your regulations require a pre-award survey
for any prime contractor under consideration to be
awarded a bid?

“A. No.

Q. In what instance would it not be?

“A. Well, if we have records here to justify that that
responsive bidder is responsible, we can make that
decision with a Contract Officer’s determination.
Q. But in the instance we are talking about there was

@ pre-award survey on H/R and Universal and Amity-
ville, New York.

12

“A. That’s what the records show here.” (Emphasis
supplied)

This testimony in itself supports the conclusion that the jury
reached, (i.e., that Universal would have received the award),
since there was never a determination of any sort that Land-Air
was a responsible bidder. But there is more support in the
record.

First, one of the reasons for making the responsible“
determination is pertinent: (App. 419)

“Q. Do you require your potential prime contractors
to advise you in this lift plug situation of their in-
tended source of supply of raw castings?

“A. You mean prior to award?

Q. Yes, sir.

A. This is required in the pre-award survey.

Q. Why is it required?

‘A. Well, to assure he would be a responsible prime
contractor; and to be a responsible prime contractor

he has to show who he will get his supplies from.”

This was never done with respect to Land- Air.

Next, the testimony elaborates on the basis for making
a “responsible” determination without a pre-award survey:
(App. 428-430)
“CROSS EXAMINATION BY MR. HATHAWAY:

„Q. Now, can you give me the status of those four
bidders after evaluation with reference to their relative

13

positions?
“A. Do you want them in order, sir?

Q. As to who they were, yes, sir. in other words
H/R must have been first; they got the contract?

“A. Yes.

“Q. Can we get the price now? | want to know who
numbers two, three and four were after evaluation.

“A. The evaluated bid price for H/R is .47362, and
the evaluated bid price for Universal is .49107. is that
all you want?

Q. No. | want three and four. Who is that?

“A. The second one was Land- Air which was .48678.
The third lowest was Universal Automatic Machine and
| gave you that figure. The fourth lowest was AMS
Manufacturing Incorporated, .517482.

“Q. If H/R Products had not bid that contract, or if
for some reason they had indicated after opening for
the bids that they could not perform and preferred
not to perform, then who would have gotten the
contract? Would it have been Land-Air?

“A. After opening bid, if they didn’t want to perform,
then they would have to go through regulatory pro-
cedures to withdraw their bid.

“Q. There is a regulatory procedure for this?

“A. Yes.

Q. And if it had not taken place and Land-Air had

14

“A. (interrupting) They would be the next lowest
responsive. / don’t know if they were responsible or
not, but if they had the pre-award and passed they
would be next in line. 3

“Q. We don’t know if you had a 1524 on Land-Air
did we?

“A. I didn’t see it.
“Q. You didn’t?

“A. No. There’s reasons. Maybe they were making
the item at the time. | don’t know. it could have been

determined as 3 responsible procedure.

“Q. Let me request at this point if upon signing this
deposition if a Form 1524 can be found on Land- Air,
would you then attach that as Defendant H/R Exhibit?

“A. Yes.
‘Q. If one is found?
“A. Yes.”

No. “1524”, i.e., pre-award survey form, relating to Land-Air
was ever found or attached, and it is obvious that no pre-award
survey of Land-Air was ever made. Thus, under Costa’s testi-
mony, Land- Air could not have been next in line’, with no pre-
award survey, unless determined by a contract officer to be

The record even conclusively demonstrates that Land-Air
could not have been considered “responsible” without a pre-
award survey. As noted in the lower court's opinion, Universal
received the only government contract let in 1970. This contract

15

was awarded on June 16, 1970, and, with additions, was still
being performed when the contract in question was let in
December, 1971. Thus, it is obvious that Land-Air was not
“making the item at the time“. No basis existed for determining
Land-Air to be responsible. There is not even the slightest hint
in the record or in any of the papers relating to the award of the
contract in question that Land- Air fell into any category that
could be considered responsible without a pre award survey.
Even H/R, which has previously furnished more Type G lifting
plugs to the government than any other known company, and
Universal, which was in the process of satisfying the existing
contract with the government, were required to have pre-award
surveys. Furthermore, the contract in question had a 50-percent
option provision. Since Land-Air’s bid was very close to H/R’s,
if Land-Air had been a viable bidder, a survey would have been
made to determine if Land-Air was eligible for one-half of the
award. ’

It is therefore apparent that Land- Ar was not the subject
of a pre-award survey and was not considered for the bid award.
The reason for this may not be clear in the record, though the
jury could certainly conclude from the evidence that Land-Air
was not “responsible”. However, because of the lower court's
opinion, an affidavit of the Chairman of the Board and Chief
Executive Officer of Land-Air was obtained, which explains why
Land-Air was not considered (and why Land-Air was obviously
determined not to be responsible). it is here reproduced:

THE STATE OF TEXAS
COUNTY OF TARRANT
KNOW ALL PERSONS BY THESE PRESENTS:

BEFORE ME, the undersigned authority, on this day per-
sonally appeared PAT RUTHERFORD, who, being by me first
duly sworn upon his oath states that he is over the age of 18
years and in no way incapacitated to make this Affidavit, and
that the following facts are true and correct:

My name is PAT RUTHERFORD. | wes the Chairman of

16

the Board and Chief Executive Officer of Land- Air, Inc., and |
am presently living in Honolulu, Hawaii. | am personally familiar
with the facts concerning a government contract for Type 8“
Lifting Plugs, which was awarded in late 1971 or early 1972 by
the Ammunition Procurement Supply Agency, APSA, then
located at Joliet, Illinois. | believe the government contract on
this procurement was numbered DAAA-09-72-C-0208 and it is
my recollection that the bids were opened on or about December
3, 1971. had determined that after the bids were opened the
second lowest bid was submitted by my Company, Land-Air,
Inc. Although we were at first determined to have filed a non-
responsive bid, we amended our original bid which was received
by the government on or about December 1, 1971, which re-
instated our bid prior to the award. In connection with our bid
on this matter and | believe that the records will show that our
bid was .48678 ( per plug, we determined from our principal
supplier, Link-Belt of Indianapolis, Indiana that they were unable
to supply us the unfinished plug castings or rough castings as
they could not produce them sufficiently early enough to
comply with the government contract in issue. Accordingly, |
informed the government officials at APSA, Joliet, Illinois that
my Company did not have a supply source for the unfinished
plug castings and that my Company, Land-Air, Inc., was,
therefore, withdrawing its bid and we did so. My company never
received a pre-award survey on this particular contract because
our bid had been withdrawn and | understood government pro-
curement regulations to require such a pre-award survey before
any award as a prerequisite to obtaining all or part of the govern-
ment contract in issue. 0
We have supplied these finished Type 8“ Lifting P.

on government contracts or APSA before the fall of 1971, but
we had completed our last order about a year before or sometime
in 1970 and had been out of production for substantially a year
at the time we submitted the bid referred to hereinabove.

/s/ PAT RUTHERFORD

Thus, the affidavit reveals that Land-Air removed itself from

17

consideration for the award because it was informed by its
supplier, Link- Belt, that Link- Beit could not supply the necessary
raw castings. Referring again to Costa's testimony, this is the
prime consideration in determining whether a contractor is
responsible This makes abundantly clear the fact that Land-
Air was not in contention for the contract in question.

The affidavit is “outside the record“, but the record
supports the obvious jury finding that Land-Air, without a pre-
award survey or contract officer's determination that it was a
responsible bidder, was not considered responsible and was not
eligible for the award.

If petitioners are wrong, in this, it is submitted that bringing
an incontrovertible fact to the attention of the court by affidavit
is proper where the lower court’s opinion is based upon an
erroneous conclusion with respect to that fact and the entire
disposition of the cause hangs in the balance. it is within the
province of this court to reverse and remand for further develop-
ment of the facts, where the integrity of the judicial process so
demands. U.S. „ Shotwell Mfg. Co., 78 S. Ct. 245, 355 U. S.
233, 2 L. Ed. 234; Youngstown Sheet & Tube Co. v. Lucey
Products Co., 403 F. 2d 135 (5th Cir. 1968). The latter case
holds that although, generally, failure to put on all proof nec-
essary for a judgment is fatal error, there are occasions when
innocent, and justifiably unknowing litigants are entitled to a
remand to insure that substantial justice be done. This is cer-
tainly such a case, for how could plaintiffs know that the Court
would deny the use of the lower price to prove fact of damage,
or that Land-Air would be called a viable bidder when the bid
record indicated otherwise? Obviously, therefore, if the Court
concludes that the record does not justify the jury's finding,
justice requires that the case be rernanded.

2. Respondents’ recaiculations of the bid based upon
the lower price extended H/R by Texas Foundries
cannot be disregarded.

The Court of Appeals opinion concludes that the
recaiculation of the bid based upon the lower price extended by

18

Texas Foundries to H/R cannot be considered for the purpose of
determining whether Universal would have been low bidder in
the absence of the discriminating pricing scheme. This con-
clusion is based on the reasoning that the Sherman Act is
designed to facilitate competition and eliminate anticompetitive
acts, and that application of this basic principle requires that the
lower price extended to H /R be disregarded. This conclusion is
novel, and apparently of first impression, but it is without
authority or reason.

Facilitation of competition generally promotes lower prices
and more efficient business administration. It is more reasonable
to conclude, as the jury was free to do, that since Texas Found-
ries had the ability to extend the lower price to one competitor,
it should have extended the same price to all to whom it issued
price quotations. Had it done so, the record shows that Universal
could and would have submitted a lower bid than H/R, and
would have obtained the award.

The lower price has to be treated as a fact. It was granted
by Texas Foundries to H/R. it was a part of the basis for the
jury's finding of the conspiracy, and constituted an overt act
pursuant to the conspiracy. Obviously, it could be considered
in measuring the extent of damages. (Support for this prop-
position is found in the cases cited in the initial discussion of
REASONS FOR GRANTING THE WRIT, Supra. Certainly,
therefore, there is no reason to deny use of the fact (of the lower
price) to prove fact“ of damage, i.e., to prove that Universal
would have secured the award had it secured the same price.

The Robinson-Patman Question

With regard to the Robinson-Patman claim, the Court re-
cognizes that H/R and Universal purchased from Texas Foundries
“contemporaneously”, i.e., within the same time-frame, but
holds that “plaintiffs have failed to prove that the purchases were
made in competition“ . The Court reached this conclusion
because of its reasoning that the government selection under
both the 1970 contract and the December, 1971 contract of a
single producer for each precluded the possibility of competition

between these suppliers as a matter of law”. The Court cate
gorized the seperate contracts as “separate, distinct market (a)
open only to a single producer”.

The latter proposition clearly is not true, for the pre-ewerd
survey contained a request that the survey cover a 50-percent
option of the quantity awarded. Therefore, H/R and Universal
were in competition for either one-half or 100-percent of the
quantity awarded, and could have wound up selling to the same
customer (the government) under the same contract. Further-
more, the fact that H/R was ultimately awarded 100-percent of
the contract quantity does not keep H/R and Universal from
being “competitive purchasers” as required by the act. This
proposition is established by American Can Company vs. Bruce’s
Juices, 187 F. 2d 919 (Sth Cir. 1951) modified 190 F. 2d 73, 74.
There it was established that American Can extended arbitrary
and discriminatory terms to Bruce’s Juices on a item known as
the 3.12 Iscan” (d can used as a container for citrus juices sold
in competition with bottled drinks). This prevented Bruce's
Juices from buying any of the 3.12 Iscans, as pointed out by the
Court at page 923:

“The fact that it was denied the benefit of the lower
price on the 3.12 Iscan in the above manner made it
financially impossible for Plaintiff to purchase that
particular lacan along with its competitors.”

This Court then held, however, that the failure of the
plaintiff to purchase the 3.12 Iscan did not deny the Plaintiff
the status of a competing purchaser under the act, stating at page
924:

“| Moreover, Plaintiff was not bound to purchase the
3.12 lecan upon such terms in order to attain the
status of a competing purchaser under the act, as its
failure to do so was directly attributable to Defen-
dant’s own discriminatory pricing.”

By the same token Universal's failure to purchase either .

APPENDIX

Appendix - 1

ips ps LE

2 2 78825
1 Ne 15 2 5 23

ita HE IE

N. C. MFG. co. INC. v. TEXAS FOUNDRIES, INC.

Robinson-Patman legality of price

Trade Reguiation—914
chase that contempiste contemporeneous

delivery must be evelusted as of dates

discriminatory the respective contracts were made.

Clayton Act, s 2, f) as amended by
Robinson-Patman Price Discrimination
Act, 15 U.S.C.A. 130, f).

Patmen Price Discrimination Act, 15

U.S.C.A. 13. f).

Act,

a

; and that discrimination between contracts to pur-

to present jury
claim

held that plaintiff which feiled to

prove that in the absence of defendants
discriminatory pricing scheme it would

tract in question fed to present jury

1 121325
Hoa foie
nat i
eH op
ae UY

Judge

ion
To constitute s Robinson-Petmen

U.S.C.A. 6 13{a, f).

that Act, 6 2, f) es amended by
ceused injury Patmen Price i

adduce evidence thet
. damage which resulted.

‘Stones Act, 6 1,15 US.

z!

7730 8
—
PUBLISHING CO.
Creasifi-
ef the court

Hi

Appendix 2

7416 M. C. AFG. co.. INC. v. TEXAS FOUNDRIES, INC.

7417

9. Trade Reguistion—913

Even if sales at different prices are
contemporaneous, involve goods of like
grade end quality, price distinction is not
justified by good business cause end it
causes injury to the disadventaged pur-
chaser, recovery under Robinson-Patman
Act is precluded absent proof thet price
veriance detrimentally effected competi-
tion. Clayton Act, s 2(a, f) as amended
by Robinson-Patmen Price Discrimine-
tion Act, 15 U.S.C.A. 6 13a, f).

10. Trade Regulstion— 913,932

Competition between buyers at dis-
perete prices is essential to a violation of
Robinson-Patman Act and existence of
this requisite is normally a fact question
to be determined by making e realistic
appraisal of eli relevent fects. Clayton
Act, 8 2(a, f) as amended by Roabinson-
Patman Price Discrimination Act, 15
U.S.C.A. 6 13 (a, f).

11. Trade Regulstion—913

Purchases were not made “in com-
petition” as required in order to establish
Robinson-Patmaen Act Discriminstory
pricing daim, where plaintiff contrac-
tor s purchases of lifting plugs could
only be sccepted by government in ful -
fillment of 1970 contract while defend-
ant contractor's purchases similarity could
be used only on 1971 contract and, re-
gerdiess of subsequen( discrepency in
price to these suppliers, by defendant
seller, government had to purchase from
each, and only from eech, the specified
number of plugs st agreed price under
respective contracts. Clayton Act, s 20,
f) as amended by Robinson-Patman Price
Discrimination Act,15 U.S. C. A : 130,
f).

12. Trade Reguletion—913

injury to s competitior is not test
for Robinson-Patmen violation; test is
injury to competition. Cieyton Act,
s 2, f) as emended by Robinson-Pat-
man Price Discrimination Act, 15 US.
C.A. 6 130. .

1. The Type “G” lifting plug is a ma-
leable iron device which the military ser-

vices use to lift 155 mm. ertiliery pro-
jectiles. The lifting plug has @ loop st
one end, known as the “beil,” end is

|
i
a
g
i
8

into the nose of an unfused artillery
Projectile, thereby facilitating the move-
ment of such projectiles. When s pro-

jectile is to be fired, the lifting
removed end repieced by en

i

Appeal from the United States Dis-
— Court for the Eastern District of
exes.
Before GOLDBERG, CLARK and
GEE, Circuit Judges.

CLARK, Circuit Judge:

Piainti ffs, M. C. Manufacturing Com-
peny, inc. (M.C.), and its wholly-owned
subsidiery, Universal Automatic Machine
Company, inc. (Universal), initiated this
Privete antitrust action ageinst defend-
ants, Texas Foundries, inc. (Texas
Foundries) and H/R Products, inc.
(H/R), alleging that the defendants con-
spired to restrain trade in violation of
Section 1 of the Sherman Act, 15 U.S.C.
s 1, through the utilization of a price
discrimination scheme which siso was vi-
olative of Section 2 of the Clayton Act
as amended by the Robinson-Patman
Act, 15 US.C. 136 & f). Trial to:
jury resulted in a general verdict for
plaintiffs of $73,000.00 which was then
trebled by the triai court to $219,000.00.
Texas Foundries and H/R petition this
court for relief from the judgment en-
tered pursuant to thet Wurd. We re-
ae

Universal alleges that this contro-
versy srose while it end H/R were
actively competing for a December, 1971
government contract to supply a finished
military hardwere item known as 8 Type
“G” lifting plug,’ because Texas Found-
ries quoted H/R e lower price than it
quoted Universal to supply the required
unfinished plug castings." According to
plaintiffs, H/R and Texas Foundries
Clandestinely agreed by telephone on the
29th of November, 1971, to s price of 31
cents per unfinished plug casting deliv-
ered to Rs plant (South Bend, ind
ane). Texas Foundries had quoted Uni-
versal @ price of 32.5 cents .o. b. Texas
Foundries’ plant (Lufkin, Texas) only 11
Gays rer, on the 18th of November.

—

.

Appendix 3

M. C. MFG. cO. INC. v. TEXAS FOUNDRIES, INC. 7417

of a conspiracy between Texas Foundries
and NR in wolation of Section 1 of the
Sherman Act aimed st the destruction of
Universal as @ competitor. They further
assert that the ultimate sale to /R of a
portion of the castings required to per-
form the contract at the lower price con-
stituted a vioistion of the Robinson-Pat-
man Act's proscription of price distinc-
tions between purchasers since on No
vember 12, 1971, Texas Foundries and
Universal had entered into a subcontract
at 32.5 cents per casting to fulfill a prior

contract rd to Universal.”

For their pert, the defendants con-
tend that Texas Foundries’ agreement to
sell to H/R at @ lower price wes reached
after the December, 1971 contract had
been swerded and then only after H/R's
intended suppliers communicated to
H/R that they could not satisfy /R re
quirements. They further contend the
price reduction by Texas Foundries was
intended to meet the price offered by
H/R’s other suppliers and to find a mar-
ket for @ substantial overage of castings
which had been produced under Texas
Foundries’ Preexisting contract with
Universal.

Because the particular facts underiy-
ing this case are crucial to our resolution
of the controversy, a detailed review of
the events feeding to selection of a con-
tractor on government contract No.
DAAA—08—72-—C—0208 is werranted.

On October 27, 1971, tne Ammu-
nition Procurement Supply Agency
APSA) distributed a solicitation inwting
bids on @ contract to supply 1,984,006
Type G lifting plugs. A total of 159
prospective bidders were solicited. of
which 16, including Universal and /R.

3. Universal! hed been successful on
June 16, 1970 in bidding on a similar
government contract. This ewerd to
Universal wes for 2,033, 950 plugs with
an “add-on” ewerd of 450,000, pilus «
negotiated addition of 750,000 plugs.

4. Universal purchased approximetely
1,500,000 unfinished plugs from Texas
Foundries while fulfilling its 1970 con-
tract with add-ons and additions.

5. The preewerd survey invoives
government assessrnent of such factors as
@ bidder's financial status, production
capebility, technical capebility, plent
facilites and quality assurance capebil'-
ties while the cost evelustion takes into
account such factors as transportation

7418

ultimately submitted bids.

Upon receiving a solicitation from
the APSA, Universal askec Texas
Foundries to bid on @ subcontract to
supply unfinished piug castings. On
Novernber 18, 1971, Texas Foundries re-
sponded with a 32.5-cent per casting
price, fob. Texas Foundries pliant.
Based upon Texas Foundries’ quotation
mitted a final bid to APSA of 49.28
cents cer finished plug. During the time
prior to opening of bids. Texas

preewerd survey analysis, H/R wes
1977.

Appendix 4
7418 M. C. EG. co.. INC. v. TEXAS FOUNDRIES, INC.
7419
7420
SHERMAN ACT CLAIM premise, and thet it wes supported by

At tral plaintiffs’ ewdence tended to
show a discriminatory pricing conspiracy
between Texas Foundries and NN
aimed at the destruction of Universal as
®@ producer of Type G lifting plugs.
From the outset, plaintiffs have contend-
ed that on the 29th of November, 1971,
Texas Foundries and H/R consummated
@ secret telephonic agreement whereby
Texas F oundries committed itself to up-
ply unfinished plugs to /R at 31 cents
per casting, at H/R's plant, after only
eleven days earlier having assured Uni-
versal that a 32.5 cent per casting price,
fob. Texas Foundries plant, was the
lowest price it could possibly offer. The
reason for this discrepancy in price quo-
tations u found, according to plaintiffs
in H/R's precarious financial situation in
November of 1971. Until 1970, the yeer
of Universal's entry into the lifting plug
market, H/R had been the leading pro-
ducer of military lifting plugs. In 1970,
however, Universal received the only
government contract let that year,
causing H/R a concomitant 60,000
dollar loss At this point, plaintiffs’
theory continues, realizing that fa:iure to
obtain the 1971 contract would neces-
sitate abendonment of its plug business
and fully aware that Universal's failure
to get at least a portion of the 1971 con-
tract would portend the latter's business
demise R resolved to take whatever
steps were necessary (inciuding partic-
pation in „ discriminatory pricing
scheme) to insure that it would not again
be underbid by Universal.’

[1] If plaintiffs’ theory of the case
and version of the evidence were accept-
ed by the jury, as they may have been,
then a Sherman Act violation has been
established. We assume arguendo that
the jury verdict was besed on this

7. Im fect, after losing the 1971
contract to H/R Universal wes unable to
acquire other work in the commercial
field sufficient to hold its shop intact,
and finally had to liquidate its equip-
ment

8 Other evidence supportive of plan-
tiffs’ conspiracy theory included: proof
that H/R would not consider itself able
to bed unless @ hed positive commit.
ments for all the plug castings it would
need; H/R's knowledge prior to sub-
mession of its bid that its regrstered
supplier, Marion Malleabies, could not
Produce the rough castings in sufficient
quantity to satisfy government re-

the evidence. Under Section 1, 15 U.S.C.
s 1, “Every contract, combination ...
or conspiracy, im restraint of trade or
commerce... is declared to be eg.
However proof of the existence of an
actionable conspiracy s not
enough. in addition to proof that the
antitrust laws were violated, a pisintiff
proximately caused injury to his business
and adduce evidence that at least gives
an indication of the amount of demage
which resulted. Terrell v. Household
Goods Carriers’ Bureau, 494 F 2d 16, 20
(Sth Cir.), rehearing en banc denied, 496
F.2d 878, cert. dismissed, 419 US.
987, 95 S.Ct. 246, 42 L.Ed.2d 260
(1974); Kestenbaum v. Faistaff Brewing
Corp., 514 F.2d 680 (Sth Cir. 1975).

[2] Under the facts of this case,
plaintiffs feiled the second of this three-
pronged test. , they failed to prove
that an injury to Universal resulted from
defendants’ discriminatory pricing
scheme. While the fect of injury most
often involves evidentiary questions
which are properly for the jury le. g..
Story Parchment Co. v. Paterson Parch-
ment Paper Co., 282 U.S. 555, 562, 51
S.Ct. 248, 250, 75 L.Ed. 544, 548
(1931)] no such jury issue exists where,
as here, plaintiffs failed to establish that
im the absence of defendants’ discrim-
matory pricing scheme Universal would
have received this contract. Thus, the
trial court erred in refusing to direct a
verdict for defendants on the Sherman
Act claim at the close of plaintiffs’ case.

Plaintiffs’ premise is that, absent
the illegal bid to /R, Universal would
have received the contract. However, the
facts as adduced at trial reveal that even
if R' bid is disregarded, Universal
would not be the low bidder. Rather,

quirements; H/R's assertion that -still
another supplier, F.M.C. Corporation,
would supply the additional plugs neces-
sary to meet the t's require-
ments, while during trial H/R''s President
admitted that no firm commitment wes

—— —Uü

Appendix 5

M. C. HG. CO. INC. v. TEXAS FOUNDRIES, INC.

j
i
7
.
1
;

1
b
.

112
g
Fi
g
L
|

2
35
i
i
x
11

Air's bid prior to ewerd. It is crystal clear
that Land-Air wes a viable bidder and
that, even after disregarding /R = low
bid because of the special, conspire
torially low price it received from Texas
Foundries, Land-Air’'s bid stood between
Universal and the opportunity to acquire

lent to the 31-cent f.o.b. South Bend
N. By utilizing this price and apply-
ing the same profit and other cost fac-
tors @ hed employed in submitting its
bid based upon the 32.5-cent price, Uni-
versal caiculated it would heve bid an

damages he asserts. 15 U.S.C. s 15. For
the case et ber, this rule means that dem
ages ere recoverable only upon 8 show-
ing thet ebsent the anticompetitive prac-
tice plaintiff would not heve suffered
the loss. The anticompetitive conduct
which the evidence tended to establish in
the case st ber wes Texas Foundries’
special 31 cent price to /R, not its re
fusel to offer d comperabie price to
R' competitors. The price of 32.5
cents .o. b. Texes Foundries plant wes
shown to be the standard or usus! mor-
ket price quoted in connection with this

price wes the conspiratorie! price.”

Restoration of the competitive free-
dom which the Sherman Act is designed
to protect through elimination of the
anticompetitive practice is accomplished

ROBINSON-PATMAN ACT CLAIM
Plaintiffs also assert that defendants’

Appendix 6

7421 N. C. MFG. co. INC. v. TEXAS FOUNDRIES, INC.

7422

mson-Patmen Act. 15 U S.C. s 1308 f).

Under Section 2ia), it is uniewtul tor

either grants or knowingly receives the
benefit of such discrimination and (4)
where such differential is not in response
to changing market conditions,’ while
under Section 2(f), u u unlawful to
knowingly induce or recenve discrimina
tron in price prohibited by this section.

{5, 6] Recognizing that in order
for there to be discrimination between
purchasers violative of 6s 2(a) there
must be actual sales at two different
prices to two different actua! buyers,””"’
plaintiffs pursue the Robinson-Patman
claim on the besis of the price discrepancy
between Universal's purchase-order con-
tract with Texas Foundries dated No-
vember 12, 1971 and NN clandestine
November 29th agreement with Texas
Foundries which related to the Decem-
ber 30, 1971 contract These separate
contracts contemplated contemporane-
ous delivery of Type “G” lifting plugs
during 1972 but /R was given a price

10. In addition to the defense of
changing market conditions, a defendant
may rebut @ primatacie case of discrim:-
nation by showing that his lower price
wes made “in good faith to meet an
equally low price of @ competitor.”
15 USC. „ 13(b). Since, as discussed
infra, plaintiffs have failed to prove a
prima-facie case we do not decide the
applicability ve/ non of these defenses
under the facts of this case

11. Jones v. Metzger Dairies, inc., 334

F.2d 919, 924 (Sth Cir. 1964), cert.

denied, 379 U.S. 965. 85 S.Ct 659, 13
L.Ed.2d 559 (1965): accord, Stough v
May and Co., loc., 484 F 2d 22, 23
(Sth Cir. 1973); Hiram Walker, inc. v A
& S Tropical, inc., 407 F.2d 4, 7 (Sth
Cir.), corr. denied, 396 US. 901, 90

of 31 cents delivered at its plant while
Universe! wes given the substantially
higher price of 22 5 cents at Texas
Foundries’ pient.""

hed occurred even if the jury believed
that no agreement wes reeched by Texas
Foundries and H/R on the 29th of No-
vernber, but rather wes made ister —eft-
er the contract wes swerded—end as a
result of the failure of H/R's expected
supplier to produce. They contend that
even a January, 1972 agreement would
still be reasonably contemporaneous
with the November, 1971 egreement be
tween Texas Foundries and Universal,
since delivery was contemplated during
the same periods under both contracts
and no justification based upon a change
im market conditions or good faith
meeting of competition wes shown.

Defendants contest the sufficiency
of proof on every element essential to a
Robinson-Patman Act violation. We
need not weigh each element, however,
as our conclusion that plaintiffs have
failed to prove that the purchases were
made in competition’ forestalis the ne-
cessity of further consideration of piain-
tiffs’ claim under the Act.

[7-9] Discriminatory pricing is
violative of Robinson-Patman only when
it lessens or tends to prevent competition

Karpen & Bros. 177 F.2d 863 (7th Cir.
1949); Shaw's inc. v. Wilson-Jones Co.
105 F.2d 331, 333 (3rd Cir. 1939).

12. Universal contracted with Texas
Foundries on November 12 for the pur-
chase of 740,000 unfinished plug castings
(with delivery to continue through _Feb-
ruary, 1972) to fulfill the government's
addition to Universal's 1970 contract
R' agreement with Texas Foundries
wes of course in contemplation of /R;
attainment of the December, 1971
contract and required delivery beginning
in January, 1972.

13. The Robinson-Patman iegality of
Price discrimination between contracts
to purchase that contempiste contem-
poraneous delivery, must be evelusted as
of the dates the respective contracts
were made. See, Texas Sulphur Co. v.
J. R. Sienptot Co., 418 F.2d 793, 806
(Oth Cir. 1969).

— ae ne —

—— .

Appendix 7

M. C. S. co. INC. v. TEXAS FOUNDRIES, INC. 7422

Ag-Chem Equipment V.
Hahn, Inc., 480 F 2d 482, 490-91 (8th
Cir. 1973), and the existence of this re-
quisite is normally a fact question to be
determined by making @ realistic ap-
praisal of all the relevent facts. FTC.
Sun Ou Co., 371 U.S. 505, 527, 83 S.Ct.
358, 9 L.Ed.2d 466 (1963). However, in
the case at der the relevent facts are
without dispute. The government's selec-
tion under both the 1970 contract ad-
dition and the December, 1971 contract

14. 15 USC. 6 130 E. 9. FTC. *
Sun Ou Co., 371 U.S. 505, 527, 83 8 Ct.
358, 9 L.Ed2d 466 (1963); Atlas
Building Products Co. v. Diamond Block
& Gravel Co., 269 F 2d 950, 954 (10th
Cir. 1959), cert. denied, 363 US. 843,
80 S.Ct. 1608, 4 L.Ed 2d 1727 (1960).
Hartiey & Parker, inc. v. Florida Bever-
age Corp. 307 F.2d 916, 921 (Sth Cir.
1962); Chicago Sugar Co. „ American
Sugar Refining Co., 176 F 20 1, 7 (7th
Cir. 1949): Great Atlantic & Pacific Tee
Co. v. F.T.C., 106 F 2d 667. 676 (3rd
Cir. 1939), cert. denied, 308 US. 625.
60 S.Ct. 380, 84 L.Ed. 521 (1940) 8 8
W. Gas, Inc. v. Genera! Gas Corp., 247
F Supp. 339. 343 (N.D. Ga. 1965).

15. FTC. Borden Co., 383 U.S. 637
643, 86 S.Ct. 1092. 1097, 16 L Ed 2c
153 (1966). See Texas Gulf Sulphur Co
v. J R. Simpiot Co. 418 F 2d 793, 806
(9th Cir. 1969), Tri-Valley Packing Ass'n
„ F TC., 329 F 20 694 (9th Cir. 1964).
Refrigeration Engineering Corp. v. Frick
Co., 370 F Supp. 702, 712-13 O Tex
1974) “Essentially, we have ir the par-
ticular situation an analogue to standing

of @ single producer for each preciuded
the possibility of competition between

both, It is the government's unaveile-
bility to Universal as a customer of any
of the government's needs under the De-
cember, 1971 contract, and its similar un-

competition with those made under the
other. Each contract represented a sep-
arate, distinct market open only to a sin-
gle producer. Once it was awerded the

The cistomer has standing only to raise
and cu.npare those sales which are injuri-
ous to his competition.” Mayer Paving &
Asphalt Co. v. General Dynamics Corp.
486 F 20 763, 770 (7th Cir. 1973).cert.
denied, 414 US. 1146, 94 S.Ct. 899,
39 L.Ed.2d 102 (1974).

16. See, e g., Texas Gulf Sulphur Co.,
supra; S. S. Kresge Co. v. Champion
Spark Piug Co., 3 F.2d 415, 420 (6th
Cir. 1925).

17. We emphasize it was the bids on the
December, 1971 contract which were in
competition—not the old and new sales
assailed here. These bids alone cannot
form the basis for a Robinson-Patman
Act claim since they do not satisfy the
two-purchaser requirement. A J
Goodmen & Son, inc. v. United Lacquer
Manuf. Corp., 81 F Supp. 880. 892
(O.Mass.1949). See text st note 11,
supra. We note this circuit's decision in
American Can Co. v. Bruce's Juices, lc.
187 F 20 919, 924 (Sth Cir.), cert.
dismissed, 242 US. 875. 72 S.Ct. 166,
96 L.Ed 657 (1951). which appeers to

Appendix 8

7423 M.C.MFG.CO., INC. v. TEXAS FOUNDRIES, INC.

7424

bed, which wes @ prerequisite to becom
ng @ purchaser from Texas Foundries,
Universal's 1970 contract addition wes
assured to it to the exciusion of all other
supphers regerdiess of any discrepency
i" prices pad on underlying subcon-
tracts. In the same fashion, the govern-
ment itself unconditionally un-
der the 1971 contract to purchase the
specified quantity of finished plugs
exclusively from RN. The very neture
of these mutually exclusive commitments
m the respective contracts meant that
Universal and H/R could not heve been
n competition” with respect to their
seperate purchases from Texas Foundries
Pursuant to the government contracts
Therefore, while the price discrepency
between the two actual purchases (as
distinguished from the bids related to
the 1971 contract) could heve affected
Universal's profits under the addition to
its 1970 contract, this discrimination in
NO way diminished Universal's compet:-
trve ability mm that plug market. “Injury
to @ competitor is not the test; the test
is injury to Competition.” Lioyd A. Fry
Roofing Co. v. FTC. 371 F.2d 277,
281 (7th Cir. 1966). Accord, GAF Corp.
v. Circle Floor Co, lac, 463 F 2d 752
(2nd Cw. 1972). cert. dismissed, 413
US 901, 93 Sci. 3058. 37 L.Ed 20
1045 (1973).

create 8 special exception to the two-
purchaser requirement where compet:-
tors in the same merket are engaged in
competitive purchasing and selling at the
time of the price discrimination and
where the failure of the plaintiff to con-
summate a second purchase of the item
discriminatorily priced is directly attrib-
utable to defendant's own discriminatory
practice. We conciude, however, that this
exception is inapplicable on the facts
now before us.

Specifically, in Bruce’s Juices, the
court held that plaintiff could bring a
Robinson-Patman Act claim against de-
fendant can manufacturer for defendant's
retusa! to offer plaintiff the same price
on e perticula type of cen offered
plaintiff's competitors, in spite of plain
tits failure to purchase that particular
type of can, where pilaeintiff was
purchasing other types of cens not so
discriminatority priced and competing
for the sale of its product peckaged in
such cans in the same merket as its
favored competitor. in our case, however,
Universal and H/P never purchased in
the same market As mentioned pre
viously, they were producing st al!

“Antitrust legsistion is concerned
primarily with the health of the competi-
tive process, not with the individuel
competitor who must sink or swim in
competitive enterprise. But as a necessary
imecident thereto, it is concerned with
effect of eliminating or crippling s com-
petitor. For, surely there is no more

Co., supra, 269 F 20 at 964. Accord, Bor.
den Co. v. FTC. 381 F.2d 175, 178
(4th Cir. 1967). Universal cannot aveil it-
self of this approech because it failed to
show an injury to competition generally
or that the revenue lost under the con-
tract addition wnpeired its individual
competitive status.

Piaintifts’ Robinson-Patman ciaim
s Presented in a setting analogous to the
situation where, aithough a seller seis
his product at different discriminatory
prices, he d not lable under Robinson-
Patmen because his buyers are not in
competition for the same ultimate
users." in our case, although the
government is the ultimate user under
both contracts, those individual contracts
constitute seperate, distinct markets,
each unaffected by prices aveilabie in

times pursuant to mandatory, single-pro-
ducer contracts, „ e., when they pur-
chased unfinished dug castings it wes
always Pursuant to s preexisting govern-
ment commitment that could not be
aitered upon the government's ability to
find a lower price after entry into the
contract. For this reason, the Bruce's
Juices exception is not applicable here.

18. On the contrary, Universal must
dave felt that its profitability on all
phases of the 1970 contract was satisfac-
tory since it quoted its finished plug
“addition” price to the government
besed upon a 32.5cent casting price
from Texas Foundries. Thus, though
Universal could have realized an increased
profit if it had received a lower casting
price from Texas Foundries and not
pessed the savings on, even this hypo-
thetice! profit wes not shown to heve
hed the necessary deleterious competitive
effect. While Universal did establish its
business denise (See note 7), its proof of
causation relisted to the deleterious
effect of the failure to acquire the 1971
contract rather than the loss of profit on
the 1970 contract addition.

SS ee

Appendix 9

M. C. r. co. INC. v. TEXAS FOUNDRIES, INC. 7424

the other. Universal and H/R were not
competing for the same consumer dollar
in thew activities under the 1970 and the
1971 contracts.”

20. “The whole thrust of the Robinson-
Patman Act concerns protection

of competition for resale. . Com-

petition is determined by careful snal-
ysis of each party's customers. Only if
they are eech directly efter the same

7425

There being no theory which will
support platin Sherman or Robinson-
Patman Act claims, the judgment below

5
Reversed.

dollar are they competing.” Ag-Chem
Equipment Co., Inc. v. Hahn, l.
350 F Supp. 1044, 1051 (D.Minn.1972).
modified on other grounds, 480 F 20
482 (8th Cir. 1973).

Adm. Office, U.S. Courts—West Publishing Company, Seint Paul, Minn.

APPENDIX - 10

Auited States Court of Appeals

FOR THE FIFTH CIRCUIT

October Term, 1974

No. 74-2246

D. C. Docket No. CA 1614
M. C. MANUFACTURING COMPANY, INC., ET Al.,

Plaintiffs-Appellees,
versus
TEXAS FOUNDRIES, INC., ET Al.,
Defendants-Appeliants.

Appeal! from the United States District Court for the
Eastern District of Texas

Before GOLDBERG, CLARK and GEE, Circuit Judges.
JUDGMENT

This cause came on to be heard on the transcript of the
record from the United States District Court for the Eastern
District of Texas, and was argued by counsel;

ON CONSIDERATION WHEREOF, It is now here ordered
and adjudged by this Court that the judgment of the said District
Court in this cause be, and the same is hereby, reversed;

It is further ordered that plaintiffs-appellees pay to
defendants-appeliants, the costs on appeal to be taxed by the
Clerk of this Court.

August 21, 1975
Issued as Mandate:

APPENDIX - 11

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

NO. 74-2246

M. C. MANUFACTURING COMPANY, INC., ET AL.
Plaintiffs-Appellees,

versus

TEXAS FOUNDRIES, INC., ET Al.,
Defendants-Appellants.

Appeal from the United States District Court for the
Eastern District of Texas

ON PETITION FOR REHEARING
(November 12, 1975)

Before GOLDBERG, CLARK and GEE, Circuit Judges.

PER CURIAM:

IT IS ORDERED that the petition for rehearing filed in the
above entitled and numbered cause be and the same is hereby
denied.

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385003_1651%3A1. Public record. Not legal advice.