Opposition Brief — Belliston v. Texaco Inc.
Supreme Court brief1972
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# a COP y | _— Court, U. §.
FILED
JUN 2 yO?7>
IN THE
Supreme Court of the United] Stators.
October Term, 1971 a
Me EA, SO POI
No. 71-1433
THOMAS BELLISTON, et al.,
Petitioners,
vs.”
TEXACO INC.,
Respondent.
ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES
- COURT OF APPEALS FOR THE TENTH CIRCUIT
BRIEF FOR RESPONDENT TEXACO INC. :
IN OPPOSITION :
MILTON HANDLER
425 Park Avenue
New York, New York 10022
ROBERT F. McGinnis —
135 East 42nd Street A
New York, New York 10017.
Altorneys for Respondent—Texaco Inc.
Of Counsel: ;
MiLas C. BrapForp, Jr. e
1570 Grant Street
Denver, Colorado 80210
Kaye, SCHOLER, FIERMAN, Hays & HANDLER
425 Park Avenue
New York, New York 10022
“CHRISTENSEN AND JENSEN
1205 Continental Bank Building
Salt Lake City, Utah 84101
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TABLE OF CONTENTS
IE INE oo ck auias nurse vik accexc cance.
ME SE iy ce ae
B. The Horizontal Price-Fixing Claim ........
C. The Tie-In Claim ..... AVN ee aden kasde eee
ARGUMENT:
The Decision Below Was Correct And Presents
No Important Federal Questions .............
A. The Robinson-Patman Act Was Correctly
IE Dd bdkirebknndebevisdsvontnescesss.
B. The Horizontal Price-Fixing Claim Was
Correctly Found To be Unsupported by the
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CoNcLusion
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Cases Cited
PAGE
Abramson v. Colonial Oil Co., 390 F. 2d 873 (Sth
Cir. 1968), cert. denied, 393 U.S. 831 ............ 15
Baldwin Hills Bldg. Materials Co. v. Fibreboard
Paper Prods. Corp., 283 F. Supp. 202 (C.D. Cal.
Sir scWiderea ie enn eee ba ee ene wee 16,17
Borden Co. v. FTC, 339 F. 2d 953 (7th Cir. 1964) ... 15
Cement Mfrs. Protective Ass’n v. United States,
SE NEE Dic haavatcehuceieceeeekccaueenaeds 20, 20n
Central Ice Cream Co. v. Golden Rod Ice Cream Co.,
287 F. 2d 265 (7th Cir. 1961), cert. denied, 368 U.S.
Me UiadaKA CHS 4aSces Web Vidas wh WeKeS be heh skies 15, 16
Cliff Food Stores, a v. Kroger, ine., 417 F. 2d 203
EE A oh 6 oc eS UNAS eRETERSE KR ER DEES MES 15
Food Basket, Ine. v. Albertson’s Inc., 383 F. 2d 785
to: errr ry rrr Tr errr tre 1)
Hiram Walker, Inc., v. A & S Tropical, Inc., 407 F..
2d 4, (Sth Cir. 1969), cert. denied, 396 U.S.901 .... 15
Layne & Bowler Corp. v. Western Well Works, Inc.,
(EE Ve bce da uescdsssereawesnacebaseads 21
Littlejohn v. Shell Oil Co., 456 F. 2d 225 (Sth Cir
BOE) Sieben ewasbewesnccheeNdsspusncusswenwens 16, 17
Moore v. Mead’s Fine Bread Co., 348 U.S. 115 .... 15,17
Myers v. Shell Oil Co., 96 F. Supp. 670 (S.D. Cal.
NAc cRGRENSS SHR R ee MNAN Kod ae edness beeches lj
Neely v: Eby Construction Co., 386 U.S. 317 ........ 21
Rice v. Sioux City Memorial Park Cemetery, Inc.,
Sch esha eau anKadaddekeusaes ss bnade chen 21
United States v. Beatrice Foods Co., 1972 Tr. Cas.
| 73,808-at p. 91,588 (D. Utah, 1972) ............ 19n
United States v. Container Corp., 393 U.S. 333 ...... 11, 18,
iil
' PAGE
18n, 19, 19n, 20, 20n *
United States v. Continental Qil Co., 1971 Tr. Cas.
{| 73,404 at p. 89,648 (D.N, Mex. 1971) .....:. .. 19n
United States v. FMC Corp., 1970 Tr. Cas. 173,258
RR Py CID ciao es eet cites SOuecue 19n
United States v. FMC Corp,, 306 F. Supp. 1106 (E.
Pe ME sens encenscitvericecus ao 19n
Walker Oil Co. vy. Hudson Oil Co., 414 F. 2d 588 (5th
Cir. 1969), cert, denied, 396 U.S. 1042 ............ 15
Willard Dairy Prods. Corp. v. Nat. Dairy Prods.
Corp., 309 F. 2d 943 (6th Cir. 1962), cert. denied,
Te OM DOO 500s taneessncenecuscccacsec.,., 15
Statutes Cited
28 U.S.C: § 1254 (1) ..2.......... eine Hes 1
Robinson-Patman Act 15 U.S.C. MOOD ésakchcnue 2, 3, 5,
6, 8, 9, 10, 11, 14, 15, 16, 17, 20
Sherman Act, 15 U.S.C. FP age eee a) |
Rvues oF tHE SuPREME Court oF tHe Unrrep States:
EN a cokaneedsissvucerie wy ea eae 14
ETN te
TIM pal ee -
ie
Supreme Court of the Anited States
October Term, 1971
No. 71-1433
Thomas Be.usrox, of al.
Petition ‘ve,
va.
Texaco Ixc.,
Respondent,
Ox Prermox ror a Warr or Ceerionan to rue Uxiren
Stares Covrr or Arreaus ror tur Textu Crmevrr
Opinion Below
The Court of Appeals’ opinion is reported at 455 F.2d
175 and is printed as Appendix A to the Petition (App.
A, pp. hxix).
Jurisdiction
Petitioners invoke this Court's jurisdiction under 28
USC. 6125411). The judgment of the Court of Appeals
*as entered on February 4, 1972 and rehearing was denied
on March 7, 1972,
2 ee De _—_——— a
”
=
Questions Presented
Five pages of the Petition are devoted to a lixting of
15 Questions Presented for review (Pet. 7). The Ques.
tions incorrectly state the deci<ion below, present ax facts
matter which ix not the <ahject of any evielence of record
or is contrary to the evidence, fail to di-elose other dis.
positive and critical fact« amd, regrettably, otherwise dis.
tort and misrepresent the true ix<ues. Unfortunately, pomt
by point explanation and correction woul! <o lengthen this
brief and burden thi« Court ax to be t tally inappropriate.
In addition, ax petitioners implicitly acknowledged in the
Court of Appeals where their brief enumerated some 2
issues for review (pp. 2-4), thix Court could in no event
grant the relief plaintiffs <eck—rein-tatement of the dis-
trict court judgment—without dealing with many more than
Petitioners’ 15 Questions.’
On the other hand, the Court of —— found it w-
necessary to reach most of these issues because it conclude:
that each of the three claims« before it <houlkd be dismissed -
The bases upon which that Court predicated this conclusion
present the following Question=:
1. Whether the Court of Appeals erred in con-
cluding that the explicit juri«lictional prerequisite
of the Robinson-Patman Act that “either or any of
the purchases involved in such di<crimination are
in commerce”, 15 USC. (13(a), is not satisfied
where the alleged di<crimination involves Texaco’:
sales in Utah to petitioner« (Texaco retailers in
Utah) and to the alleged favored customer (a
* Thus, Texaco’s Docketing Statement in the Court of Appeak
UGE Gel te on eoenenees) taqeien ope
Texaco distributor in Utah) of gasoline refined by
another oil company in Utah and purchased from
the refinery by Texaco in Utah?
2. Whether the Court of Appeals, in reviewing
the record in this case, erred in concluding that the
evidence was insufficient to permit a finding that
Texaco entered into an unlawful agreement with
other major oil companies to fix the wholesale price
of gasoline in violation of the Sherman Act?
3. Whether the Court of Appeals, in reviewing
the record in this case, erred in concluding that the
evidence was insufficient to permit a finding that
Texaco engaged in tic-in selling with respect to
tires, batteries and accessories (““TBA”’) in viola-
tion of the Sherman Act? .
3
Because petitioners failed fo meet even the’ threshold
“commerce ”’ requirement of their Robinson-Patman claim,
the Court of Appeals did not have to deal with Texaco’s
further position that they also failed to sustain their
burden of proof on each and every one of the other es-
sential elements of that claim and that their underlying
assumption that it was unlawful to charge wholesalers less
than retailers was invalid. Thus, the Court did not reach
the inadequacy of proof of injury to competition; the
absenoe of any comparison of the net prices (after allow-
ances) actually paid by each plaintiff and the net prices
damages. It also did not have to deal with Texaco's posi-
tion that its pricing was sheltered by the meeting competi-
tion defense.
(e- @? © aa) «ep ee Powe
_— ee = ee ee
—
Similarly, with respect to the alleged horizontal pric
fixing and TBA tie-in claims, since the Court of Appeal.
found the evidence of violation insufficient, it did wot haw
to pass upon the total absence of proof of injury and
damages in both instances, which independently requires
their dismissal, —
The foregoing issues and others, including the blatan
denial of a fair trjal to Texaco ~—all of which it was uw.
uecessary for the Court of Appeals to rule apon—would,
if petitioners’ request is granted, become issues for brie!
ing and original review in this Court. Petitioners <pecit.
cally advise that they do hot wish remand of any question
to the Court of Appeals (Pet. fn).
Finally, petitioners seck review of the award of
$52,249.25 costs for the printing of the trial transcript in the
appendix on appeal. Again, the form of the Question Pre.
sented (Pet. 7, Ques. 14) is typically less than candid, as the
facts presented to the Court of Appeals in the February 3,
1972 affidavit of Robert F. MeGinnis, Esq. and exhibits
thereto make clear. One of the issues on appeal was the per-
vasive bias and prejudice of the trial judge, going te
every evidentiary ruling by him and his attitude and con-
duct throughout the trial. Consequently, it appeared u-
desirable to try to select and print only portions of the
trial transcript rather than thé whole. Before resolving
the matter, however, Texaco’s counsel sought and obtained
the consent of petitioners’ counsel to the designation of
the full trial transcript for printing. -Thereafter, on April”
? Not only did the district judge substitute his view of the facts
for those of the jury by directing verdicts in petitioners’ favor « °
many issues, but he identified himself with petitioners’ cause through-
out. Even the bare statistics are revealing: No objection to any e&
hibit offered by petitioners was sustained: Erery objection to &
_ hibits offered by’ Texaco was sustained ; 19 of every 20 objections b:
Texaco were denied ; 68 of petitioners’ 70 objections were
nz at ,
)
i2, 1971, Texaco served and filed its Designation of the
Contents of the Appendix which expressly referred to
this agreement of counsel, stating: **The consent of plain-
ifs" counsel has been obtained to this designation.”
Appellant then proceeded to incur the printing expense
on the hasis of this stipulation. Some two months elapsed
before Texaco reecived a letter from plaintiffs’ counsel
dated June 9, 1971 stating for the first time that the
uvderstanding referred to in the April 12th Designation.
was incorrect. The Court of Appeals, upon consideration
of the aflidavits, correspondence and related circumstances,
allowed an appropriate sum as taxable costs with respect
to this printing. That anyone would attempt to treat
this as a subject warranting consideration by the Justices
of this Court—aml at the same time withhold from this
Court any mention of the April 12th Designation and re-
lated faets—is extraordinary. It presents no question for
Supreme Court review.
Indeed, no aspect of the decision of the Court of Ap-
peals presents any important question of federal law or
is the subject of conflict among the circuits.
Statement of the Case
The Petition seeks review of the Tenth Cireuit’s decision
reversing a judgment entered by the District Court, Hon.
Willis W. Ritter presiding, on a jury verdict in petitioners’
favor, and directing entry of judgment in favor of respond-
ent Texaco. Since the case involves three distinct claims—
price discrimination in violation of the Robinson-Patman
Act and horizontal price-fixing and tie-in selling in violation
of the Sherman Act *—the facts and proceedings relevant
to each are set’ forth separately.
* There was a “fourth claim in the district court that Texaco
allegedly fixed plaintiffs’ retail prices, of gasoline. The jury found
BD edad we
A. The Robinson-Patman Claim
Petitioners were fifteen Texaco retailers cach of whom
operated a Texaco gasoline service station in Salt Lake
City, Utah, or its environs during all or part of the period
June 1963 to June 1967, purchasing the product from
Texaco and reselling it at retail to motorists.‘ Their princi-
pal claim in the District Court was that Texaco violated
Section 2(a) of the Robinson-Patman Act, 15 U.S.C. § 13(a),
by virtue of the fact that it sold gasoline to Flinco, Ine.
(**Flinco’’), a wholesale distributor which from. tinie to
time also operated retail stations, at a lower price thay
that charged petitioners.
Texaco purchased all of the gasoline it sold in Utah—
including that sold to petitioners and to Flinco—from
American Oil Company’s Utah refinery where American
made gasoline to Texaco’s specifications (352-56, 553,
1909-12). Texaco sold this gasoline to petitioners at its
retailer or ‘‘tankwagon”’ price. With respect to Flinco,
Texaco sold gasoline at its distributor discount off the
tankwagon price in recognition of the wholesaling fune.
that plaintiffs were not injured or damaged thereby, rendering this
claim moot. Accordingly, there was no occasion to appeal the
erroneous instructions and rulings which enabled the jury to find a
violation against the evidence. Petitioners now contend, incredibly,
that Texaco should be found to have participated in a horizontal
agreement with major oil companies to fix wholesale prices on the
basis, in part, of the jury verdict relating to plaintiffs’ retail prices
(Pet. 4, Ques. 3(e)). It might be noted therefore, that it was
proven that plaintiffs charged any prices they chose (Exs. D-48, 49)
so that, for example, plaintiff Belliston disregarded Texaco’s sugges
tions over 99% of the time throughout the relevant period (/d.).
* Exs. P-23a, D-11, D-53, D-120-21; 680, 730-32.
—a —— ree en ee
tions Flinco performed * which-retailers such as petitioners
did not undertake.* — Flineo’s contract with Texaco was on
a year-to-year basis (Exs, P-5, P-6; 1223). Hence, unless
Flinco received a discount competitive with that granted
by other major oil companies in the area, Texaco faced
the loss of Flinee to another supplier. Consequently,
the amount of Flinco’s distributor discount was set in
response to changes in the discounts granted distributors
by competing major oil companies (Exs. D-122-28 ; 1873-75,
Isii-88). The discount did not exceed the wholesaling
expenses and a reasonable return on investment (241, 1192-
93, 1496-97, 1739).
Frequently, to meet its competition, Texaco gave
retailers in different parts of the Salt Lake area discounts
or ‘‘allowances’’ off the tankwagon price.* ‘Flineo would
not receive such allowances unless it was supplying a
station in the particular depressed area, and then only
70° of the amount that would be given a retailer supplied
directly. The allowances sometimes exceeded 4¢ per
gallon, while the distributor discount on regular gasoline
was always less than 4¢ per gallon (Exs. P-15, D-123;
1881, 1886-88).
° Ex. P-15; 221-22, 251-54. 281-85, 399-402, 410-11, 1122-23,
1337-41, 1362-64, 1518-21, 1678, 1681-84, 1687, 1723-24, 1870-74.
* 229-30, 286, 760-61, 962-63, 1123, 1338-41, 1345, 1494-96,
1520-22, 1681-83, 1869-72, 1944.
"1215-16, 1504, 1874-75, 1891-93, 1958.
“Ex. D-131 (letter of May 21, 1963, p. 3); 112-13, 208-09,
217-19, 223-24, 869, 956, 1239-40, 1335, 1442.
"Ex. P-6; 208-10, 223, 255-56, 285-86, 407, 1079-80, 1205-06,
1208.
8
During the period in question there were approximately
500 gasoline stations in Salt Lake City and another 50 in
the neighboring town of Bountiful (Exs. D-52, 54; 1335,
1344). These stations sold Texaco, other major brand
and independent or nonbranded gasoline. In ‘general, the
Flinco-supplied stations were located several miles from
any petitioner’s station,'® with many other stations located
substantially closer."'
- In the Court of Appeals it was Texaco’s position that
petitioners’ proof was insufficient on cach clement of their -
Robinson-Patman claim:
(1) None of the alleged discriminatory sales was
in commerce as required by the statute;
(2) There was no evidence of substantial com-
petition between each plaintiff and even one Flineo
salary-operated Texaco station, much less evidenee
that each plaintiff competed with all such Flineo
stations scattered as they were over a 30-mile area
(the assumption upon which plaintiffs’ thepry of
recovery depended) ; '*
(3) There was no evidence that each plaintiff's,
let price was higher, considering allowances, than
the net price to any Flinco salary-operated station
with which it may have been in substantial com-
petition ;
anne -
Tn some instances there were 10 or 12 miles separating a
plaintiff from the nearest Flinco Texace station. Exs. D-52, 3:
493, 645, 658, 666, 671, O85, 783, 867, 888, 914, 957, 971, 973-74,
993, 998, 1017. .
Ml Exs. D-32, 54; 492-94, 673, 696-97, 740, iret 868-09,
914-16, 957, 998-99,
12 Ex. D-54; 1139. In fact, no plaintiff even specified the name
or location of a single Flinco salaty-operated station with which he
supposedly competed. As the Court of Appeals noted, although
Flinco was a wholesaler: “At times it was necessary for Flinco to
place its own salaried personnel in charge of stations to keep them
pen.” (App. A, p. iit)
-«
- — — — RE en cose
9
(4) There was no evidence that any such differ-
ence in net price produced any injury to competition
but, on the contrary, evidence that the distributor
discount was exhausted by wholesaling expenses and_
a-reasonable return on investment; and
(9) There was no competent evidence of injury
to petitioners’ business or property or of any-
measurable damage.'®
The Court of Appeals found it necessary to deal.only
with the first of these reasons for reversal, holding that,
under the clear language of the statute and the overwhelm-
ing weight of authority, the ‘‘in commerce” requirement of
the Robinson-Patman Act had not been met. Accordingly,
the judgment in petitioners’ favor was reversed and judg-
ment for Texaco directed. .
B. The Horizontal Price-Fixing Claim
Although petitioners alleged that Texaco conspired with
other major oil companies to fix the wholesale price of
gasoline, there was no claim and absolutely no proof tha®
Texaco agreed with its competitors on the prices it would
charge its dealers. Instead, the claim was predicated upon
'* Plaintiffs’ response in the Court of Appeals, when confronted
with an unanswerable demonstration of the fatal deficiencies in
their damage proof at trial, was to suggest to that Court that it
not only give them another chance to prove the quantum of damages
but that it tell them how to go about it.
“[I]f the -Fouler rule applies, but this: Court should hold
that the computation was not sufficiently precise, this Court
should state what method of computing the difference is suffi-
cient and remand for computation by a master and direction
of a verdict upon the master’s findings” (Brief for Appellees
49).
The Petition for Certiorari, although requesting reinstatement of
the district court judgment, makes na reference to the glaring
defects in plaintiffs’ proof of damages. Indeed, the subject does
hot even appear among the 15 Questions Presented.
—r”
10
the following conduct fy Texaco: (1) it made its current
tankwagon price and general allowances to dealers pub-
licly available, as it had done for decades (1242, 1445,
1893-94, 1904-05); and (2) before granting general price
allowances to enable its dealers in an area to remain com.
petitive, it sought to verify its competitors’ current pub-
lic price postings, either by personal observation or by
telephoning for the information ' to comply with the meet-
ing competition provisions of the Robinson-Patman Act.'*
For decades, Texaco’s wholesale prices have been
publicly available as soon as they go into effect (1893-
95). Texaco has furnished them to anyone, including pub-
lications, dealers and other oil companies, whether or not
such other companies made their current prices public
(1242-44, 1445-46, 1904-05). Beeause the information was
public, it provided a convenient reference point for the
price term of Texaco’s numerois gasoline supply contracts
with dealers, making it unnecessary to send out formal
notices to each dealer every time a price change occurred.
It also had the further important purpose of satisfying
Texaco’s customers that they were all being treated alike
(1894). And, needless to say;with the many dealers in any
locality necessarily possessed of this knowledge, the in-
formation could hardly be treated as confidential in any
case. It had to become public and there was no point in.
treating it on other than an‘ open and above-board basis. -
In light of these economic Gensiderations, other oil com-
panies likewise as a general rule publicly posted their
tankwagon prices: (114, 168, 1225).
In price war situations at the retail level, Texaco, before
granting general price allowances to dealers in any area
4125-26, 582, G89, 988-89, 1225-26, 1238-41, 1244, 1250-51,
1275, 1277, 1333, 1436-41.
15 Ex, D-130; 102-04, 113-15, 168-70, 1226, 1241-42, 1440.
16 Exs,.D-130, 131 (letter of May 21, 1963, pp. 1, 3) ; 1895-1900.
‘ll
to enable them to remain competitive, sought to verify the
current publie price postings of one or more competitors
in order to comply with the meeting competition provisions
of the Robinson-Patman Act. The verifying clerk could
do this by personally going over to read the posting or, for
convenience, telephone for this public information.27 Again,
other oil companies faced the same problem of Robinson-
Patman Act verification and some inevitably pursued a
similar compliance route.
Misreading this .Court’s decision in United States v.
Container Corp., 393 U.S. 333, the district court directed a
verdict on this claim in petitioners’ favor. On appeal, the
Court of Appeals concluded that Container was inappli-
}° cable for many reasons, including (1) the publie nature of
the prices involved; (2) the absence of any stabilizing effect
on prices or ‘‘chilling’’ of the competitive atmosphere, as
illustrated by the highly volatile nature of gasoline prices
in the area where there were ‘“‘many gasoline wars of long
duration involving drastic price cuts’’; and (3) the need
to verify the amount of competitive price euts to satisfy
| the requirements of the meeting competition defense. In
addition, the Court made it clear that the evidence was in-,
sufficient to permit a finding on any basis that Texaco was
guilty of participation in an alleged horizontal price-fixing
conspiracy. On the contrary, the record showed Texaco’s
conduct to be independent, competitive and entirely lawful.
The Court of Appeals concluded:
‘“‘The retail gasoline trade in Salt Lake City
underwent many drastic price wars during the peri-
od in question. When a war started, it was necessary
for the supplier of the retail outlets to grant allow-
ances to their outlets so that they could lower their
prices in order to remain competitive. When Texaco
heard from one of its Dealers that a competitor had
lowered its prices, Texaco endeavored to verify the
information. Texaco neither asked for nor received
*7 102-04, 113-15, 167-69, 1225, 1241-44, 1919-22
wre
.
a: Pr ny ee ee ny Eee
12
information about impending price changes. By
seeking verification Texaco’ was simply complying
with the requirements laid down in Federal Trade
Commission v. A. E. Staley Manufacturing Co., 324
U.S. 746 (1945). That is, Texaco was attempting to
confirm the reports ,of its retail outlets that their
'. competitors had lowered their prices. This much
would be necessary before Texaco could lower its
prices and still be within the ‘meeting competition’
defense.’’ (App. A, p. xvi; emphasis added)
When petitioners moved in the Court of Appeals for re-
hearing and a new trial on the assertion that the evidence
was sufficient to permit a jury finding of agreement with
other major oil companies to fix “prices, the Court of
Appeals, finding no such sufficient evidence, denied the
motion.** ;
18 Petitioners’ Question Presented No. 3 (Pet. 3-4) tenders this
sufficiency issue but seriously misrepresents the record. Thus, it lists
7 items which it claims spell conspiracy but which the record does
not support. For example, the record does not establish the existence
of “price identity.” Quite the opposite ; prices differed widely in the
area during the period. Indeed, in this very casé petitioners com-
plain of Texaco’s own different price to Flinco and of Flinco’s
selling to its dealers at 2¢ below the price petitioners paid Texaco
(Pet. 46). In fact, the record discloses that it was Texaco’s unwill-
ingness to. accede to petitioners’ unlawful efforts (dating back to
1961) to have it dictate Flinco’s prices which prompted the bringing
of this suit (Ex. P-36, D-43; 423-29, 434, 437, 441, 444-46, 480-84,
488-90, 584-85). Secondly, the reference to a “systematic exchange
of prices among competitors controlling 85% of the market” is
*equally baseless. Not only is the key factor of the public nature of
the prices omitted, but the Court of Appeals explicitly found:
“Here, 42% of the gasoline stations in the Salt Lake City
area were independently operated. Not only does the record
fail to disclose a price exchange agreement among all of the
major supplying companies, but it also fails to evidence any
exchange involving the suppliers of the independently operated
service stations.” (App. A, p. xv).
The other factors listed by petitioners in Question 3 similarly play
fast and loose with the evidence and add up to nothing approaching
evidence- that would permit a finding of illegal conduct.
-
13
Finding the evidence insufficient on the issue of viola-
tion, the Tenth Cireuit did not have to deal with the issues
of impact and damages and did not do so. It should be
noted, however, that there was no evidence from which a
jury could properly conclude that any petitioner was in-
jured in his business or property by virtue of the alleged
agreement to exchange current publicly available price in-.
formation ; nor was there any evidence from which a jury
could rationally measure any petitioner’s damages. More-
over, there was not even a showing that the claimed con-
spiracy had any impact whatever—on prices or anything
‘else. The record will be searched in vain for a scintilla
of evidence that but for the claimed conspiracy prices would
have been lower.
C. The Tie-In Claim
Texaco recommended to its dealers that they buy tires,
batteries and accessories (‘‘TBA’’) from any one of four
tire companies with national distribution and public accept-
ance with whom Texaco had sales commission agreements
(Ex. P-30; 381-84, 1483-84). Texaco received a commission
for its sponsorship when such a company sold to a Texaco
dealer. This claim was predicated on the theory that as a
result of such sponsorship, the dealers were forced or com-
pelled to accept unwanted TBA in order to get a product
they did want. The proof, however, belied the claim.
Indeed, 12 plaintiffs offered no evidence at all regarding
what prompted their selection of TBA, and the remaining
3 did not testify that Texaco in any way affected their
TBA clioices (453-54, 467-69, 570-72, 974-76, 999-1002).
Finding no evidence of coercion, the Court of Appeals di-
rected that this claim be dismissed. Again, the Court did
not reach the issue of impact and damages as to which,
once more, there was no evidence. Without rhyme or rea-
son, the jury found no damages as to three ‘plaintiffs, $1
damages as to two others and a total of $2,693 for the re-
7S se RE ma
snake
14
maining ten. Despite its de minimis nature, the Petition
seeks certiorari and review to reinstate this bascless
verdict. ,
ARGUMENT
The Decision Below Was Correct And Presents No
Important Federal Questions.
Rule 23(4) of the Rules of this Court provides that
the ‘‘failure of a petitioner to present with accuracy,
brevity, and clearness whatever is essential to.a ready and
adequate understanding of the points requiring considera-
tion will be a sufficient reason for denying his petition.”
It is respectfully submitted that the Petition is-neither ac- {
curate, brief nor clear. Indeed, it totally misconceives the
role of the Supreme Court jn the judicial system. It would
have this Court serve as a second court of appeals, impli-
eating itself in a morass of factual issues which involve
neither important federal questions nor conflicts among the
circuits. When the Petition’s irrelevancies, diatribes and
extra-record speculations are stripped away, what remains }
is the indisputable fact that the decision of the Court of
Appeals was eminently correct, was fully in accord with
all of the applicable precedents, and raises no issue war-
ranting review by this Court.
A. The Robinson-Patman Act Was Correctly
Applied -
Section 2(a) of the Robinson-Patman Act, 15. U.S.C.
§ 13(a), provides, in relevant part, that:
‘‘Tt shall be unlawful for any person engaged wm
commerce, in the course of such commerce, .. . to
discriminate in price ... where either or any of the
purciases-invalved_in_such discrimination are wm .
commerce. .. .’’ (emphasis supplied) ~~ ~ ----- -~--
It has long been settled that this plain statutory language
means precisely what it says. To violate the Robinson-
Se
£)
15
Patman Act, a seller must not only be ‘‘engaged in com;
meree,’? and his acts be in the course of such commerce
but at least one of the alleged discriminatory sales must
be in commerce. This controlling principle was enunciated
by this Court in Moore v. Mead’s Fine Bread Co., 348 US.
115, 118: io
‘‘Respondent is engaged in commerce, selling
bread both locally and interstate. In the course of
such business, it made price discriminations, main-
taining the price in the interstate transactions and
cutting the price in the intrastate sales.’’ (empha- -
sis by the Court)
Since Moore, the rule has been uniformly applied by the
lower courts. See, e.g., Walker Oil Co. v. Hudson Ou Co.,
414 F.2d 588 (Sth Cir. 1969), cert. denied, 396 U.S. 1042;
Hiram Walker, Inc. v..A & S Tropical, Inc., 407 F.2d
4 (5th Cir. 1969), cert. denied, 396 U.S. 901; Abramson -
v. Colonial Oil Co., 390 F.2d 873 (Sth Cir. 1968), cert.
denied, 393 U.S. 831; Food Basket, Inc. v. Albertson’s
Inc., 383 F.2d 785 (10th Cir. 1967); Willard Dairy Corp.
v. Nat. Dairy Prods. Corp., 309 F.2d 943 (6th Cir. 1962),
cert. denied, 373 U.S. 934; Central Ice Cream Co. v. Golden
Rod. Ice Cream Co., 287 F.2d 265 (7th Cir. 1961), cert.
denied, 368 U.S. 829; Cliff Food Stores, Inc. v. Kroger,
Inc., 417 F.2d 203 (Sth Cir. 1969); Borden Co. v. FTC, 339
F.2d 953 (7th Cir. 1964).
The Court of Appeals merely applied this settled
principle in holding that the statute’s ‘‘in “commerce”’
requirement was not met here because all of Texaco’s rele-
vant sales of gasoline were made in Utah. More par-
ticularly, Texaco purchased the gasoline from American
in Utah and resold it, to petitioners and to Flinco, within
that state. Moreover, the gasoline itself never crossed
a state line. It was refined by American in Utah from
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16
crude oil, a separate and distinct product, which had been
- brought into the state by American.
Petitioners challenge this ruling essentially on three
grounds: (1) that so construed the statute may be rendered
ineffective; (2) that this Court?s ruling in Standard Oil ©
Co. v. FTC, 340 U.S. 231 is somehow inconsistent with the
Court of Appeals’ decision; and (35) that the Fifth Circuit's
recent decision in Littlejohn v. Shell Oli Co., 456 F.2d 225
(Sth Cir. 1972) stands tor a contrary principle. None of
these assertions has merit.
Petitioners’ arguments with respect to the theoretical
effectiveness of the Robinson-Patman Act should be ad-
dressed to Congress, not this Court. The determination
that price discriminations involving solely intrastate sales
are beyond the purview of the statute was made by the
legislature when the statute was enacted and, of course,
it is for it to determine whether the law should be amended.
Insofar as Standard Oil is concerned, that case is
plainly inapposite, as the Court of Appeals properly noted
(App. A, p. xi). There, the seller transported gasoline,
not crude oil, from Indiana into Michigan from whence
it sold the selfsame product at discriminatory prices to its
Michigan dealers. As the Court of Appeals held, ‘‘ Standard
shipped the gasoline to itself across a state line. The
product was- never altered; therefore, the ‘flow of com-
merce’ theory applied.’’( Jd.) Here,*on the other hand,
it was American, not Texaco, which transported crude oil,
not gasoline, into Utah where Texaco bought it. When
discriminatory sales are made in one state of a finishee
product converted in that state from raw materials emanat-
ing from another state, the flow of commerce has come to
a halt, and the statute is inapplicable. Central Ice Crea
Co. v. Golden Rod Iee Cream Co., 287 F.2d 265 (7th Cir.
1961), cert. denied, 368 U.S. 829; Baldwin Hills Bldg.
Materials Co. v. Fibreboard Paper Prods. Corp., 283 F.
17
Supp. 202, 204 (C.D. Cal. 1968) ; Mow v. Shell Ou Co.,
96 F. Supp. 670 (S.D. Cal. 1951). Standard Oui is thes
completely consistent with the ruling below, as well as
with the unbroken course of uniform decision in the courts
of appeals since the Moore ruling almost two decades ago.
Nor is Littlejohn of avail to petitioners. That case, unlike
this one, did not involve the typical secondary-line claim
by a customer that the seller charged lower prices to other
customers with whom it competed. Instead, the plaintiff
there was not a customer of the seller but an independent.
gasoline dealer in indirect competition with defendants.
His claim, of the primary-line variety, was that he was in-
jured by defendants’ low price sales to those dealers who
were his local competitors, which low price sales were sub-
sidized by higher priced sales to other customers in a
different state. In other words, Littlejohn involved a situa-
tion analogous to the typical area price discrimination claim
in primary-line cases such as Moore. In Littlejohn, as in
Moore, there were sales across state lines to meet the stat-
ute’s commerce requirements. Here, per contra, there is
no claim of any discriminatory Sale outside of Utah.
In short, the commerce aspect of this case, as decided
in the Court of Appeals, involves no novel issues, no,
substantial federal questions, and no diversity of opinion
among the circuits. It accordingly does not warrant review
by this Court.
The petition also seeks review of other: Rcbinson-.
Patman issues which, in light of its finding with respect
to commerce, the Court of Appeals did not reach. Far
from supporting the grant of certiorari, the existence of
all these other hurdles to recovery by petitioners under-
scores the futility of any such grant. Petitioners’ claim is.
so fundamentally deficient and so devoid of evidentiary
support as to make it particularly ill-suited for the resolu-
tion of any legal issue.
18
B. The Horizontal Price-Fixing Claim Was Cor-
rectly Found To be Unsupported by the Evi-
dence
The ruling of the Court of Appeals that United States
v. Container Corp., 393 U.S. 333 is distmguishable from
the present case is eminently correct. Indeed, Container’s
inapplicability is demonstrable on three separate and dis-
tinct grounds, all of which were relied upon by the Court
of Appeals.
First, Container dealt with an exchange of price in-
formation which ‘‘was not available from another source’
(393 U.S. at 335). It did not deal with verification of -
publicly posted and available prices. There is all the dif=
ference between inquiring about and disclosing public infor- “ )
‘mation for purposes of convenience and the exchange of
price data which in some industries is a closely guarded
secret. Obviously, businessmen must have the right to pub-
lish and disseminate price lists, to put price tags and signs
‘on products, to announce publicly what their prices are, and,
in order to be competitive, to make efforts to learn what
prices are being charged by other sellers. It is noteworthy
that the Government never challenged in Container the
exchange of information which was otherwise publicly
available (Brief of United States on Appeal 41). The
thrust of its complaint there was that when a customer
asked package manufacturers to submit price quotations
for a special packaging order, sellers should not have
given their confidential quotation to a competitor in ad-
vance of the latter’s bid; thereby defeating the buyer’s
hope of bettering either seller’s offer—a glaringly different
situation from the instant one.’®
19 As the Court of Appeals stated: “The prices were publicly
available. They were noted in the trade journals and often an
nounced in the Wall Street Journal. This distinguishes Container
in. that the prices involved there were not available through other
sources. Texaco made its prices available to anyone regardless of
any reciprocity’ (App. A, p. xiv). That the Container ruling
Second, this: Court did not hold that an agreement to
exchange non-public price information is per se illegal.
The Container decision was premised on the express finding
that the exchange agreement in question had an anti-
competitive effect. In Mr. Justice Douglas’ words, ‘‘the
result of this reciprocal exchange of prices was to stabilize
prices. .. .”’ 393 U.S. at 336. Indeed, the opinion made
it clear that, some price exchange arrangements might have
no anticompetitive effect:
19
‘*Price information exchanged in some markets
may have no effect on a truly aa iets price.’’
Id. at 337. .
‘Here, on the other hand, there is not an iota of proof that
) the vigor of price competition was chilled by any exchange.
In the Court of Appeals’ words, ‘‘the record is replete
has no bearing on agreements to exchange publicly available prices
is further demonstrated by the judgment in United States v. FMC
Corp., 1970 Tr. Cas. $73,258 (1.D. Pa. 1970), a case in which
the defendant was found to have fixed prices by exchanging non-
public price information and discussing the need for higher prices.
See 306 I. Supp. 1106, 1142-43 (E.D. Pa. 1969). Despite this
finding, the final judgment specifically permitted the exchange of
price “information which has been previously or is simultaneously
released to the trade generally or has been disclosed by any person
ucts.” Jd. at p. 89,028. Accords, United States v. Beatrice Foods
‘Co., 1972 Tr. Cas. § 73,853 at p. 91,588 (D. Utah 1972); United
States v. Continental Oil Co., 1971 Tr. Cas. § 73,404 at p. 89,648
(D. N. Mex. 1971). Indeed, any other reading of Container would
require the absurd conclusion that a department store courts Sherman
Act lability if its clerk calls a competing store to obtain information
about prices posted in the store window in order to avoid walking
over to see for himself.
with references to many eounlitie wars of long duration -
who is not competing with defendant in the sale of such .. . prod-.
&
20 :*
involving ‘drastic price cuts. This hardly indicates a
‘chilling’ of the competitive atmosphere.’’ (App. A, p.
pg Nae |
Third,. this Court recognized the continued vitality of.
Justice Stone’s opinion in the Cement case, which held that
price information could be exchanged for lawful purposes,
such as to prevent a fraud by purchasers.”' Here the lawful
purpose of the verification of posted prices ‘was to enable
Texaco to comply with the Robinson-Patman Act. As the
Court of- Appeals found, ‘‘[b]y seeking verification Tex-
aco was simply complying with the requirements laid down
in FTC v. A. E. Staley Mfg. Co., 324 U.S. 746 (1945). That
is, Texaco was attempting to confirm the reports of its re-
tail outlets that their competitors had lowered their prices.
This much would be necessary before Texaco could lower
its prices and still be within the ‘meeting competition’ de-
fense.’’ (App. A, p. xvi).
In sum, the Court of Appeals’ conclusion that Con-
tainer is not applicablé here was correct on each of the
three stated grounds.
*20 Witnesses on both sides agreed on the fact of incessant price
wars (869, 956, 988, 1335, 1426, 1442, 1902-03, 1907-08). There
were between 76 and 102 price changes (depending on the sec-
tion of Salt Lake City affected) in the prevailing major brand
price among retailers. during the period in ‘suit and a range of retail
price fluctuations of 10¢ per gallon, which was 100% of the lowest
retail price (ex state tax) of regular gasoline and 70% of the
lowest premium price (ex state tax) (IExs. D-81, P-23, p. 5; 1616-
22). Such price changes, as petitioners themselves elicited, corte-
sponded to price changes at the wholesale level (217-19, 1441, 1460-
61). .
21 Thus, the Container opinion distinguished Cement Mfrs. Pro-
tective Ass’n v. United States, 268 U.S. 588, on the ground that the
“controlling circumstances” of that case were not present:
“[The] cement manufacturers, to protect themselves from
delivering to contractors more cement than was needed for @
specific job and thus receiving a lower price, exchanged price
information as a means of protecting their legal rights from
fraudulent inducements to deliver more cement than was needed
for a specific job.” 393 U.S. at 335.
e’
21
In evident recognition of this fact, petitioners assert
that this Court should also review the Court of Appeals’
denial-of their motion for rehearing on an alternative Sher-
man Act premise. .As noted above, however, there is no
. sound’ basis in the evidence for the new theory which peti-
tioners espouse (supra note 18). The Court of Appeals
properly concluded, in denying rehearing, that the evidence
of record is insufficient to permit a finding on any basis
that Texaco entered into any price-fixing agreement with
other oil companies. It was entirely appropriate for that
Court to have made this determination in disposing of the
rehearing motion. Neely v. Eby Construction Co., 386 U.S.
317, 329. Plainly this matter does not rise to the level of
a wibatratial federal. question warraniing the expenditure
by this Court of the time and effort needed to examine a
massive record on a question of sufficiency of evidence
which the Court of Appeals has already done.
Conclusion
Chief Justice Taft stated for a unanimous Court in
Layne & Bowler Corp. v. Western Well Works, Inc., 261
U.S. 387, 393, ‘‘it is very important that we be consistent
in not granting the writ of certiorari except in cases in-
‘volving principles the settlement of which is of importance
to the public as distinguished from that of the parties....’’
See also, Rice v. Sioux City Memorial Park Cemetery, Inc., |
d49 U.S. 70, 74. It is respectfully submitted that the instant’
Petition raises no question of importance. The Court of
Appeals’ dismissal of the Robinson-Patman claim involved
the straightforward application of explicit statutory lan-
guage to the indisputable facts. Its dismissals of the tie-in
and horizontal price-fixing claims were clearly correct and
were founded upon its assessment of the sufficiency of the
evidence-in this récord. The Tenth Circuit’s award of.
printing costs is also a matter which, it need hardly be
oe PERS Fa I ad ew 7 eee 5 ’
stated, is best left to the judgment of the courts of appeals,
Accordingly, the decision below does not warrant review
by this Court. Moreover, it is respectfully submitted, the
fact that the petition would require the Supreme Court to
embark upon a wholesale review ofa host of issues with
‘which the Court of Appeals properly found it pointless to
. burden itself, further renders the grant of certiorari pat-
ently inappropriate.
June 2, 1972
Respectfully subnutted,
fick js Moor
Mitton Hanxpier
425 Park Avenue
New York, New York 10022
Rosert F. McGixxis
135 East 42nd Street
New York, New York 19017
Attorucys for Re spond nt- Ty raca Inc.
Of Counsel:
Mizas C. Braprorp, Jr.
1570 Grant Street
Denver, Colorado 80210
Kaye, Scnorer, Frermax, Hays & Haxvwuer
425 Park Avenue
New York, New York 10022
CHRISTENSEN AND JENSEN
1205 Continental Bank Building
Salt Lake City, Utah 84101
e,
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