# Petition for Writ of Certiorari — Mackey v. Sears (No. 68) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386418_1493%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1957 ## Text —— « i a f sab g wis ‘Tu : ] Supreme Court of the Luited States. eo OCTOBER _— 1956. 3 ; No. ZO% 6% BRICK A. MACKEY, Mies Petitioner. Us. pe an SEARS ROE BU ( K i7n. & New York corporation, : . Respondent. PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT. | ‘ é . ’ ; a a ae x . P ss O Joux Ps AUL STEVENS eat ay » Epwarp |. !orascuia ie 105 S, La Salle St. Chicago, Hhinois ; Attorneys for Petitioner — - RoTHSCHILD, Pharr. STEVENS & -Barry Of Cennsel. Sits = nf . The Scheffer Press, Inc.—ANdover 3-685 4 co a * x ie ees | ea 3) A Sige oes eee OS - ~ en, : —_— . aoe | ae SHEE, ee) ° PAGE x Opinions Below sai ertbifanesta Pisin dha piinhitte ps caitiad koe slate i, 1. > Jurisdiction ~.....oj-.000: ae aoe Questions Pr aenaied dinhinioes RSP ae se ieanibsa Oar * Statutes” Involved SER Veber es Oe: iar heme! pcaicialcs | B 5, NAIR tices tctarreptirecinhcpmepetinentniphemmnneyinfnines p * - ‘Reasons: For. Granting the Writ ......c.cgecenee sien: - , 1. The Sherman Act question is important. .......... at ee IEMA | 2. The Robinson-Patman Act question_involves_p QL ERFRet COMMIT. nn. esissesssessensseneeenionsnnscnetanesneeeenseenees 100° _ Conclusion ........... lpeenees : eceemre ener cari stidweaoes 10 APPORdix. A>. .ccsssccseccaewisrcccedesinsoeg Sistas cleuicbisaatae etaiiacegunceed la Opinion of the Court of ‘Appeels ree ene eS | y , _ Opinion, of the District IE icicdethensssinteoy ninesunere 108: Pe Append By caccscssgeesnceeinese desi initnccippiliivccccnn Sk | . Section 1 of _flie Cusien OE a, sich ee —__. .*- . Seetian 4of ‘the CRIN Siciictesniccencncaninccacone, 26a > Section 3 of the Robinson- Patman Act isteadvndesta ew. 1268 Section ‘TY of the Sherman BEE ccttsnccengedasbbsaitiave aod Section 2 of the’ Sherman Act ssisuevetenssonegnensens Hpk Daioh Ue 27a Appendix © cuminennndes scictaeikaseciabniseectee hdc a 28a | TABLE oF Cases. Crrép. | Appalachian Coals v. United States, 288 U.S. 344," = > IIL: sl lee teste cana tence apis Secosnieian 6 -" Kicher Stewart Cos v. SForeph E. Seagram &: Sons, iy ig Be i TE apes igivsonerstnsainindnersnsieeseincsss ee _ Nashville Milk” Company v. Carnation Company, - . ¥. 2d 86 .. iain slclonioniniicn linked hiileaisitaiae cable - 1 ° ‘ - o ‘ 7 is ; Hc a a he PAGE ‘Northern Securities Co. v. Dnited States, 193 .E.S. 197, 400, 404, 405 ..iciuinmmprnnnninnainnnsnnnn 8,9 United States v. ” American Tobacco Co., 221 US. 106, sR SRS As: sek Dagutncalbiadubaasiomaubennianie Se : ‘United States v. Now-York Great Atlantic & Pacific Tea {'o.,173 F. 2d 79 (C.A. .7, 1949) ; 67 F.Supp. - 626, G34, G67. (ELD. T., 1946) 1csaccmewennrernsenee 5° United States v. Paramount. Pietures, Inc., 334 US 2, | | pee eee CS aS Dieu 9 United States v. Standard Oil Co. of New Jersey, 221 — : aS cosine 1, 60-62- ss cFRESSESESTIpooocescoagpcaccnonne sev enseeeeeeereeecens 7 oO, 6, 7,8 4 United States Vv. Swift & Co., 286 U.S: 106, 116 a ee : _ United States v. Yellow Cab Co., 332 U.S. 218, : 227 .. oe . Vanee v. Safeway Stores (not 9 tec: see ‘Appen- : a cease bonteusnobid pbnabhandialiecdaleaaniedibeatahinaleinaaannntab posseaienene -10 ea oS SO tanta ‘Craniom. | _Rahl, Conspiracy- and-the Antitrust ad 44 I. 83 ee oe Rev. 743, 766 fA OES eee 5: > * Report of-the Attorney General’s ‘tuidoual Committee . to. Study the Antitrust ——: 11, 34-35, 201 See assiand 5, 10 ' ° ° ¢ a 4 a = : ‘ sees Ix Tue tee \ SUPREME COURT OF THE UNITED STATES # . 4 .. OcroBer Ter, 1956., ‘ ies . > No. ____..*_ BRUCE A. MACKEY, Petitioner, vs. : SEARS ROEBUCK & CO., a New York corporation, . “ ee a9 ce, Respondent. oo PETITION FOR WRIT OF CERTIORARI TO THE wre . UNITED STATES COURT OF APPEALS FOR . a who supply products of ‘the kind which Sears purchases - _ for resale in its stores has thereby- been materially and unreasonably restrained. (RR. 9). ex Pursuant to its plan, Sears sold lampe' at a fraction of ‘its own cost im the cities in which petitioner sought to | market famps, though. not elsewhere (R. 6-7); threatened a third party with a boycott in order to induéé it to .re- he to- deal further with ‘petitioner (R. 7); and, after deliberately copying “petitioner's. advertised tools and packaging, offered the copies for sale at a- price. aaew manufacturing cost (| & >.) Se eS The District. Court. ‘characterized Sears’ “conduct as. “predatory” (R. 27). The Court of Appeals agreed with this characterization. It stated: -We think Sears’ conduct as alleged in the . Qesfnplaint. was unreasonably anti-conrpetitive in both “Purpose and effect...” ? 237 F. 2d at 874. T he District Court held that no violation. of the Sherman * Act or the ‘Robinson-Patman Act was alleged. The Court : of: Appeals agreed that there was no violation of the . Sherman Act—since the -complaint ‘does not allege that Sears is dangérousky close ‘to achieving’a complete monop- Sly of the lamp market or the too! market—but disagreed with the basis of the District Court’s decision with re-— spect, to Section 3 of the Robinson-Patman Act. On that - 4 “-0- I | point, the Court of Appeals expressly held “that a eee - upon which Felief can be granted is stated under Seetio 3 of the Robinson-Patman Act provided that-a cause of action can exist under that section.’’ Following its ‘de- cision’ in Nashville Milk Company ¥ Vv: Carnation Coughing, Ee * 938*F. 2d 86, on the same day, the Court held that.a private ~etion may not be maintained under Section’ 3 of the Robinson- Patman Act. ; REASONS FOR GRANTING THE WRIT. - 1.. The Sherman Act question is important. . Group behavior which is unreasonably restrictive of 3 competitive conditions is ‘prohibited by the Sherman Act. United States v. Standard. Oil qe. of New Jersey, 221 — U8. 1,°60-62. (1911); Report of the Attorney General’ 8 # ; National Commitiee to Study the Antitrust Laws, p. 11,° The Act applies even though the members of the group are affiliated corporations. United, States v: Yellow Cab _ Co., 352 U.S..218, 227 (1947); United States v. New York Great Atlantic € Pacific Tea Co., 173 F. 2d 79 (C.A. 7 1949), see also 67 F. Supp. 626 at p. 634 (E.D. Ill. 1946) ; Krefer-Stewart Co. v. Joseph E. Seagram & Sons, Ine., 340 U.S. 211 (1951), In each of’ the cases cited, the ‘de- fendant corporations comprised a -single business firm. ' No showing that: the firm constituted a s monopoly was ee members of the same corporate family, but rather in the - necessary. Analysis | of these cases shows “that. the real vice in defendants’ conduct lay not in the agreement among fact that each of the firms unreasonably interfered with the. economic freedom of others. A & P vitiously attacked “. the Streamline Markets in Pittsburgh (see 67 F.. Supp. at 667)-and abused .its suppliers; the defendant-firm in K iefer-Stewari employéd a boycott as a means of dis ' ciplining its customers. See Report of the ‘Attorney Gen- _ eral’s. ‘National Committee to Study the Antitrust Laws, 34-35; Rahl, Conspiraty and the Antitrust Laws, 44 TH. UL. Rev. 743, 766 —. a 3 The. Court of Appeals specifically. stated that ‘Sears’ ‘ conduct as alleged in the complaint was unreasonably * anti-competitive in bth purpose and effect... °’. 237 F. 2d at 874, Thus, if Sears. had carried out ite. predatory | _program through affiliated corporations, i atten, i of through , different depart Tits - the sami: cena it is ue of un reasonable conduct. cd ; The tradition of Sherman Act hitengretation: which has. prevailed since the Standard: Oil deeision forecloses any’ such defense. The classic statement in | the Appeecties we Coals + case is. pertinent: ; . The purpose of the Sherman Anti-Trust Act * a to prevent undue restraints of interstate com- . merce, to maintaif§.its appropriate freedom in the — public interest, to afford protection from. the subver- sive or coercive influences of monopolistic endeavor. As a charter of freedom, the- Act has a- generality and adaptability comparable. to. that found to be de- sirable in constitutional provisions. It does not go aes -into detailed definitions which might either work in-, jury to iegitimate enterprise or through particulari- « zation defeat its purpose by- prov iding: loopholes for. escape. The restrictions the Act itmposes are not me- . chanical or artificial. Its general phrases, interpreted ‘ to- attain its fundamental objects, set up the essential - standard of reasonableness. .. ..’? Appalachian Coa!s v. United States, 288 U.S. 344, 359-360 (1933).- - Section, 2 of ‘the, Sherman Act ‘employs the term ‘‘monopolize’’ to prohibit. conduct by a single, person that ..¢ leads to the results condemned by Section 1. In the | Standard Oil case itself, this CoBrt expressly stated that the Rule of Reason applies to Section 2/.as well as to. Seetion 1 of the Sherman Act, and. that the term ‘‘monop-_ + ee | ‘—m olize*’ was intended (oproserite actions which produce the restrictive consequences prohibited by Section .1. The ‘Court said : : “*And most Sherman. Act cdses, involved a voluntary restraint. In that area, the dissentifig views of Mr. Justize Holmes’ have ‘not been followed: by the Court. Unquestionably, however, the portion, of the Holmes dissént dealing with involuritary Maisie kind involved in the instant scase—properly st ites’ the law. He said: “Combinations or conspiracies in restraint of trade, on the éther hand, were combinations to keep strang~ ers to the agreement out of the business. The ob- - jection to them ‘was not an objection to their effect upon the parties making the contract, the members of the-combination or firm, but an objection to their ’ intended effect upon strangers to the firm-and their supposed consequent effect upon the public at large. In other words, they were regarded as contrary, to. public policy because they monopolized, or attempted to monopolize, some portion of the’ trade or com- merce of the realm. See United States v. E. C. Knight. -Co., 156 U.S. 1. AH that is added to the’Ist section by § 2 is that like penalties are imposed upon every . single person who, without combination, monopolizes, or attempts to monopolize,. commerce among. the - states; and that the liability is éxtended to attempt- ~ aS ~ we .-the firm has” sufficient power to provide it with an ‘‘op- ing to monopolize any part of such trade or com- meree. It is more important as an aid to the con- struction of § } than it is on its own ac count. " 193 U.S. at 404, a: ee Later in the ‘opinion, he stated: sos “Ite was the. ferocious. extreme- of competition with ‘others, not the cessation of oe among . the partners, that. was the evil! feared. ;- * a3 — - U e. & at ty RO. ee ia a 1.4 - . i. - That ‘the Sherman: Act applies to ‘‘the ferocious ex- treme of competition with others’? has never been doubted. In cases of that, character, it makes absolutely no differ- -enee whether the predatory behavior is ‘pursued -by sév-: oral firms or by a single firm, provided, of course, that J portunity: for_abuse”’ “The ‘degree of. power -required is not measured: by. any fixed. mathematical calculation. Although ° mere size Hs net. an offense against the Sherman Act, ‘‘. . . size - carries with it an opportunity for abuse that is not ‘to be ignored when the opportunity is proved to have been utilized in the past.’* United States v. Swift & Co., 286 -U.S. 106, 116 (1932): Cf. United States v. Paramount Pictures, Ine. ., 304 U.S. 131, 174 (1948)! ¥. e: Only: a corporation with the kind of power possessed by Sears could engage in the anti-competitive conduct alleged in the complaint. .Sears' power provided Jt with an opportunity: for abuse-that has in fact. been utilized. ~ The purpose 'and effect of Sears’ plan has een to re- strain competition among its er and. small * com- * petitors. —10— \ decision that — conduct by a- corporation of such size is beyond the reach of the Sherman Act should be reviewed by this Court. i» @ 2. The Robinson-Patman Act question involves a direct” _ conflict. The decision of the court, below that no _private- action ‘may be. maintained for vioiation of Section 3 of the Robinson-Patman Act is in square conflict with the de- cision of the Court of “Appeals for the Tenth Circuit. in “| Vance v. Safeway Stores, decided on Qovember 6, 1956. The Vance opinion is set ott ‘in’ full in Appendix C to this Petition. - ; rae ; ‘The question is ineenneai ond the conflict per" be- resolved by this Court. | " CONCLUSION. The two questions presented by this petition are closely related: The Attorney General’s National Committee to Study the Antitrust Laws has recommended the repeal of Section 3 of the Robinson-Patman Act. This -recommen- dation was _made on the assumption that the statute is redundant -because predatory ‘price’ slashing | is obviously _jwohibited by the Sherman Act. In’ partial explanation of its rec ommendation, the ‘Cammittee stated : “The prohibition in Section 3 of predatory pricing - ‘is legally redundant. -Predatory price slashing. ob- viously constitutes an attempt to monopolize, already | rendered: a crime ‘by Section 2 of the Sherman. Act, and an unfair method of competition under Section 5 of the Federal Trade. Commission Act.’’ Report, p. 201. at ale one ee a a ~~ ee This case presents the Court with a “unique opportunity to resolve an important ‘conflict of decision with respect to Section 3 of the Robinson-Patman ‘Act, and, jn the © same case, to determine the walidity of the premise-upon* which the Attorney General’s Committee ‘predicated its Beiseanagaenss for legislative Tevision of that statute. It is respectfully submitted that the. questions pre- ‘serited by the petition are of great publie importance and. merit. the attention of this Court. . t Respectfully submitted, . Pee | ip | " Joux Pan. STEVENS | ss Se Aes: Epwarp I. Roruscump .- gee PS ih, . anege Tor eperaner. Lee en aan . % Sits, Horpuck & Co. | Circuit Judges. Mt. ao @ : —la— Se ie 7 ft APPENDIX A. IN THE UNITED States Court oF APPEAIS For the Seventh Circuit e. Bes “No..17225., |. ©. Seprewper Term anxp Sesstox, 1956-— 3 : - ° > ‘ ee apr i : seh od M ACKEY, Individually,» os ek ae " -Appeal from the “and Time Saver - ‘Toous,—Exc., «> Plai tifs-Appel 3 . on io Appellants trict Court for the ie. - Northern. District: of illinois, Rastern Division: Defendant-A speller. | ‘icone A, 1956. dia Aaa. Sag es foe tas: 2 AJoR and ‘Swain, Siatore’ ‘those, Chief Judge,’ sand \ _Durry, Chief Judge!’ The: sesiheegs herein’ containing six Counts was filed by two ‘plaintiffs, Bruce A. Mackey, an individual, and Time Saver Tools, Inc., a corporation, which was wholly owned hy. Mackey. ‘Hereinafter they shall be referred to as piaintiff. a The gist of the complaint -is that since 1949: Benge has ‘directed a course of predatory conduct successively . three business ventures carried on by plaintiff, caine. 1) by localized price -eutting ‘which destroyed plaintiff’s, = 2 ; United Statés Dis- . , nursery lamp business + 2) by the use of a threatened boy- — cott, induced a breach of plaintiff’s contract to sell on _ commission certain tools and other products of the Vas- coloy- ‘Ramet Corp., and 3) a destruction by Sears in 1952 of the. market for a new type 6f tool by means of unfair competition. These general charges were -distribnted . S * | —aa > among the. six @ounts as follows: Count 1 alleges: liberate and ‘anngunced plan by § “destroy. plain- 9 —tiff’s business activit\es; and asserts such plan is vio-. lative of §§ T and ot the Sherman Act (19 U.S.C. §§ 1 and 2), and of $53 of the Robiyson- Patman Act (15 US.C.A. §13a), and/asks treble damages, 415. In Count Syplaintiff reallegeS the facts pertaining.to the destruc- tion of his busYness of selling nursery lamps, invokes _ the court *s juvisdicticn on the basis of. diversity, of citiz- . enship, ‘am asks for damsges under the .commen law. Count. 3 is a common law cause of action for inducing _ the breach of plaintiff’s commission contract with Vas. - . coloy-Ramet Corp. by ‘means. of a threatened boycott, Count 4 is a common law. cause of ‘action for unfair. conl- _ petition with plaintiff’s tool business. Count 5.has been abandoneg@@‘ount 6 alleges defendant’s entire predatory nO - sey and conduct was actionable under common law, under practically the same legal theory as Count 2 » On motion of the defendant the jee stated in Counts A and 2 were dismissed without leave to amend. The claims contained in Count 3. and i in amended Count 4 are at issue ‘in the District Court on the. answer filed by Sears. *. : : eo Plaintiff appealed from ‘the order and id dgment dis- missing Counts 1 and 2 of the complaint without leave to amend. The VF nth moved to dismiss’ the appeal on the ground that the order and judgment appealed from was not a final. or appealable order under the require- ments. of §1291, Title 28 U. S. Code. This. Court, in 218. . F. 2d 295, held that the order was final and sustaihed its jurisdiction to entertain the appeal. The Supreme gt ranted certiorari, ‘and in Sears, Roebuck & Co. ~ .. Mackey, etal, 351 US. 427 the decision of this Court . was affirmed. | | The question before us on ida oniiaid: is whether’ the District Court was correct, in haldingthat-the-facts-al-_ leged in Counts 1 and 2 of the complaint do -not state, . and could not be amended to state, a claim upon. which . ; relief can be granted. : ' Ss: ee eo The complaint alleged “Mackey. steceeded to the owner- ship of two- “Metalcraft” corporations, since dissolved, - which ‘were engaged in the interstate business of making - and selling nursery lamps; that Time Savér Tools, Inc.- all of whose steck is owned by Mackey, was engaged in the interstate business of manufacturing and selling ‘tools: .that defendant -Sears is the Jargest mail: ‘order company in the: world and also operates over seven hundred re- tail stores, and that the annual_sales of defendant exceed two billion nine hundred million dollars; that the ‘‘tre- mendous: volume”. of sales gives it the power to destroy the business and property of its small competitors and ‘suppliers through -the. actual or: threatened use of un- reasonably low prices.- The complaint alleged Metalcraft began selling nur- sery Jamps to Seats and others in 1945, but in 1946 Sears notified Metaleraft it would discontinue its purchases un- less Metaleraft refrained: from selling nursery lamps to. competitors of Sears, ind thereafter Metalcraft. sekd ex- ‘elusively to Sears. It further alleged that in 1949 when Metaleraft | was “under contract ‘to supply Sears ‘with thirty: thousand nursery lamps at a price.of $2.20 per lamp, Sears instructed Mackey to cause Metaleraft to ° ‘agree to a 20% reduction in price, and notified Mackey that if such. reduction were refused, Sears would ruin Mackey and Metaleraft and make it impossible for Metal- ’ eraft to continue in business. The complaint then averred that. Mackey refused to agree to sué¢h reduction, and Mackey then attempted to promote the sale of said lamps - through the department stores in Milwaukee and De- troit, but that Sears, with the specific intent of. making ‘it impossible for Metaleraft. to dispose of its product, sent substantial quantities of lamps which it had pre- ‘viously purchased from Metaleraft for $2.20 each to Mil- waukee and Detroit, but not to _comparable cities, to sell in‘its- retail stores at-94-cents each: at theésame time ' Sears listed these lamps in two ‘of -its catalogues at a price of 84 cents, and. obtained a cheap imitation -of Metalcraft ’s hits which it misrepresented in it® adver- é 7 bi pes A WN - 2: a pee. gets o , : ea tising as beinc lamps manufactured by plaintiff. . The ‘complaint avers that the purpose and intent of said sales ‘ helow cost and such gmisrepresentation and unfair com- petition was te destrey the market for. Metaleraft’s prod- _uets, and that Sears succeeded im such efforts. The complaint further avers that about September 1, 1951, Mackey entered into a contract with Vascoloy- Ramet Corporation to pramote the sale of tools and other products for which he was to be paid.g commission of 5°.*That after receiving commissions: Fxceeding $5,- -- 000.00, Sears demanded that Vascoley cease paying com- missions fo Macker. aad advised: that unless its demands were complied with and the commission contract ter- tninated, Sears would refuse to make further purchases from Vascoley of its-eustemers, and V asegloy — after - terminated such contract. _ The compla: , further averred that in April of 1951 Mackey invented a nove! type of boring sei for wse> with tr,” electric drills. and that an application for a patent thereon was pending at the time the suit was commenced. in the spring of L952 Mackey collaborated on the develop- s ment of a new-trpe of carbide-tipped lathe bit. Time .- Saver Tools, Inc. was formed. to manufacture and sell, said boring set. Iathe bits and other teols. and national advertising was used to premote the sale of same, and Said tocl> have hecome identified with Time Saver. The complatit further avers that-in Decembér, 1952, Sears _ parechased -earbide-tipped lathe bits which -were copies of the bits developed by Mackey, and that it packaged same in practically identical so copies of plastic cases which had Keer used" by Time Saver. There were jurther allegations asserting an attempt by Sears to-palm off its “product for. . those manufactured and sold by Time Saver. The com-\ plaint then makes the general allegation that the acts © ~and practices set forth in the complaint were performed. pursuant to its continuing_plan to destroy each and every business in which Mackey was engaged, or-might attempt to engage, and that the purpose was to discipline small suppliers and small competitors of Sears so that they would accept any terms that might be dictated by Sears. = . ca MEN. ' a ka AL _ —5a— The complaint charged that “eompetition. among persons .— whe sup py products of-the kind Sears pure chases for resale “ti ater been unreasonably restrained. - . — + Seetion tof the Sherman Act provides: ‘Every con- ~ tract, cembination in the form of trust or otherwise, or conspiracy in restraint of trade or commerce among the® several states** * *’* is illegal. In the case at bar there - is no contract in restraint of trade er commerce. No -per -se Violation of the A+t_is alleged. Neither is there pres- = ent- the element, of ° conspirac) y as a single corporate en- - tity cannot ‘enter 2 conspiracy With itself. Nelsen Radio- & Supply Co. Inc. v. Motorola, Ine.. 5° Cir., 200 F. 2d . O11, 914: oe Publishing: Co. et al. v. United States, 345, U.S. 594, 626. We hold Count 1 of the com . * plaint did not state a claim under 41 of the Sherman. Act. We do not think United States v. New. York Great At- -lantie & Pacific Tea Co.. 7 Cir., 173 .F. 2d 79 i$ contra,- ; The question there was whether a conspiracy charge would properly lie where separate and distinct corporate. entities were controlled by interlocking diréctorates, and‘ where various individual defendants -were involved in jomt activities, 9° es 45 Section 2 of the Sherman Act prov ides: EK very person ~ who shall monepolize, or attempt to monopolize,: or com- 2 bine or conspire with any ‘other. person or-ptrsons, to , monopolize any part of the trade ‘er commerce among the, states, or with foreign nations, shall be deemed guilty *s @er, -of a misdemeanor : £ Section 2 thus outlaws three practices: \f attempt to ‘monopolize; 2) combination or conspiracy to manopolize and 3): monopolization. ‘‘In order to fall within §2, the monopolist must have both the powet to monopolize, and the intent to monopolize.’’ United States vo Aluminum \- Co. of America, et al., 2 Cir, 148 F. 2d: 416; 432. - The complhint herein does. recite an intent by Sears .. . to destroy any -business in which the plaintiff might en- * - gage and thereby instill fear“in its other suppliers, but + \ that allegation: cannot be twisted into a charge that Sears a ~ 1 This shuhonaant quoted and approved — the Supremp?-. “Court in, : American Tobacco Co. et al. v. United States, 328, U.S. 781, 814. > c —ta— | o was attempting .to monopolize the’ market. in’ nursery lamps. j Furtliermore, the complaint does not ‘allege a dinneeben probability that defendant may —— & monopoly. Swift and Company v. United States, 196 U.S. 375, 396; Lorain: Journal Co: et al. v. United States, 342 US. 148, 153. The allegation that Sears’ total: annual business |. exceeded Two . Billion Nine Hundred Million Dollars “ives no information as to Sears’ volume in the nursery lamp business, either nationally or: locally. As the’: trial - court pointed out, there is no factual statement showing: ae" the alleged predatory practices have, to the slightest ex- tent, lessened competition in the field of activity in which the plaintiff is engaged. We think the trial court stated ‘the situation well in these words: ‘‘* * * The actions taken “tm ruin the plaintiff.-an discipline suppliers may be weprehensible but there is not the slightest showing of impending monapoly other than ‘the bafe assertion of the pleader.’? We hold Count 1 of. the complaint did not state a-claim under §2 of the Sherman Acts Section 3 of the Robitison- Patman Act, 15 U S.C. §13a, . "provides in part: “Tt shall be unlawful for angr person . ertgaged | in commerce, in the course of such commerce,‘ * * * to sell-* * * goods in any paprt of the United States -at prices lower: ‘than those’ exacted. by said: person else- where in the United States for the” purpose of. destroy- * ing competition, or eliminating a competitor in such part of ‘tle United States; or to sell * * * yoods at unreason- ably low prices for the, purpose of SE competi- tion or eliminating a competitor.”’ : The pertinent allegations of the. ‘peeved: are, Sears ‘sent-lamps which it had purchased from. Metalcraft to Milwaukee and Detroit, although not to other comparable cities, for sale below cost, and. with-the specific intent of ‘making it impossible for Metalcraft to dispose of its prod- : - ucts, and as a direct result of Sears’ acts, Metaleraft be- came insolvent; (Par. 14). Sears induced suppliers of. lathe-bits to sell-the bits to Sears at pricés lower than the prices charged Time Saver; (Par. 20). Sears ° sold . . ; ‘ = S13 Mi : . tools in some parts of the United States at lower prices tion from Mackey or Time Saver, (Par. 21).- ‘Defbndant Sears argues, that unless defendant became. a manufacturer of: lamps or unless: plaintiff became. a’ retailer of merchandise, Section 3 of the Robinson-Patiman zs Act. does not ‘apply. Sears insists that - when the statute” speaks of destroying sompetition and -eljmindting-« : a petitor, it means that both parties must be in ‘the. same h& ° classification.. Sears asserts a retailer’s conduct cannot: he actionable if it smerely déstroys competition. among suppliers. : as . , 2 We think the statute eontains no suc h “‘definition® ° as that described by Sears. This Court affirmed: a recovery by the plajntiff—Exhibitor against -the. defendants—dis- ~ tributors. in ‘Miheaukee -Towne Corporation. v. Loew’s ine.. 7th Cir: 190 F. 240561; The Supreme Court held that. the conduct of the distillers which: restrained eom- ~ petition -among wholésalers.. was actionable under ‘the Sherman Act; Kiefer-Stewart:Co. v. Joseph E. Seagram & Sone, luc... 340, US. 211. Furthermore, the complaint alleges Sears’ eliminated competitidn atthe’ retail level - for it interfered with the sale of plaintiff’s lanmps, through department’ stores in Milwaukee dnd Detroit, and also - imitated - the packaging of plaintiff's tools. “in : order tor. take: advantage of Time Saver’s ‘national adv értising. and ~ other promotional efforts: We think - Sears’ ‘conduct as alleged in the complaint Was unreasonably anti-competi- tive in ‘both purpose and effect, and that a, claim upon “which relief can be. granted i is stated ‘under Section sof the, Robinson-Patman Act provided that a private cause ..of action can exist under’ that Section. Defendant does contend that private actions for treble @lamages’ are not ‘maintainable . under’ Section 3 of. the: Robin#a-Patman - Act. However, this important point is very lightly touched - . upon in the briefs. ae . There have been no Supreme Court or Court of ra peals. decision on this point in any. case where the issue. wats" mn agmately - raised and argued. There is, _hoWever, a a . pa * : . .° . ® ’ ie tt ae a G . conflict of authority in the District. Sots. The leading case. which holds. such a cause of action dees exist is Balien Ice Cream Co. Inc. v. Arden Farms Co. et al., 94 I. Supp. 796 (DC Calif. 1950). The leading case to the cantrary is Vance v. Safeway Stores,.137 F. Supp. 841 ~ (DC-N. Mex. 1956). However, this question is thoroughly examined and decided:in the case ,of Nashville Milk Com- pany V. Carnation: Company now pending -in this Court, in an opinion being filed simultaneously with this epinion. - For the reasons therein stated, -we hold that ‘a private Z cause of action -may not be shaintained under Section. 3 of the Robinson-Patman Act.-It follows the trial court - was correct in dismissing Count od of the ¢éomplaint. — Count 2 of the complaint. incorporates by reference the id allegations of paragraphs .12, 13 and 14 of Count 1. It”. asgerts diversity of citizenship, and _ plaifttiff\ contends _ =the facts set forth a common Jaw cause of ‘action. Price cutting in. and of itself has not heen regarded as pnlawful under the common law. Hershel California ney Products’Co. v. Hunt Foods, Inc., 111 F.Supp. 732, (DC Calif.) ; Schine. Chain- Theatres, Ine. et al vu T athe States, 334 U.S: 110, 120. But there are well estab- — lished exceptions to the rule as where price eutting has heen combined with acts of. unfair competition such as’: false of misleading advertising and also where it can be . inferred: the price cutter, Was motivated by malice. -See Nims U ‘nfair Competition. dnd Trade- marks, 4th Ed. Vol. If, Sec. 300; p. 975. - . “We think the complaint sufficiently alleges intentional © destruction .of plaintiff’s business without justifiable ex-. cyse and based upon malice of .ill-will. This constitutes # cause of action under the common law. Original Ballet Russe v. Ballet Theaire, 2 Cir., 133 F. 2d_187, 189. See also, Boggs AL Duncan-Schell Furniture Co., 163 Towa - 106, 143. NW. 482. The Iowa court: quoted from the opin- ion in Doremus v. Hennessey, 176 ‘lil. 608, 615, 52 N.E. - 924,926: “** * * an act maliciously done, with: the intent _ and purpose of injuring another, is not lawful competi- tion.’ SE s . The trial court Was in error in dismissing Count 2 of | the complaint. This, cause iss remanded for proceedings i in, “conformity. With: this opinion, — ‘ - @ Ge. / Asvmuen in, part, Reversep in part, and Reaanpep. ' Costs of this appei ul to be. divided. equally bétween the. .| .. . parties. ae: 2 — - a — Te ° ; . Usrren States District Court Chicago 4 eee : | Ec reee al May 12, 1994 _. Re: Bruce-A. Mackey, individually, and Time Saver Tools, | — _ Ine., an Illinois corporation, v . Sears, Roebutk & | Co., a. New .Y ork corporation 5B C 1240 ~ MEMORANDUM. _ The issues in this case arise on the defendant’ s motion to: dismiss the complaint, except Count Ill, to which an . answer has been filed. ; / The complaint is brought by Brice ies ry Time Saver ‘Tools, Inc., a corporation, against Sears, Roebuck | _ & Co. and consists of: six Counts. he, Ser tos ; — Count V is brought under Section 2(f) ofthe Rebinsoa- Patman Act (15 U. S..C. Sec. 13¢f)) interdicting. the re- ceipt of a srohibited price discrimination. This’ Count: is ~~ admittedly deficient under Automatic Canteen Co.-v. Fed- ~~ eral Trade Commission, 346. U, ¥ acy Gevided: since the complaint was filed. : Count. I presents: a claim for treble: damages ander - the anti-trust laws and Counts Il, [LY and VI aver common law causes of action. The’ statutory and the common law claims will be considered separately. | : The Claim ‘tor Treble Damages—Count I. - This Count is ‘brought on behalf of Mackey alone and _ purports to charge conduct. offending Sections 1 and- 2 ef the Sherman Act and — 3 of the Robinson- © Patman Act (U. S. C. Sees. 1, :2, 13(8)). The factual allegations are as fellows: — _ (a) + Mackey, as sole surviving stockholder, suc- - ceeded to the ownership of all of the rights of two “Metaleraft’’ . corporations, since dissolved, ‘which were engaged in the interstate business of making and selling nursery Jamps, (Par. | eo, *\ - (b) The plaintiff Time Saver. Tools, ‘Ine. ig en- gaged ir ,the interstate bustness ° of manufacturing and selling tools. All of its stock is-owned. by Mackey. ' (Par. 5) Sa pee a (¢) Sears is engaged in general refail ‘merehan- dising, selling nursery lamps.and tools, among other items. It is the. largest mail order company in the World and additionally: operates over 700 refail stores in the United States and some foreign countries: The - business of Sears jis interstate. Its sales are pre- ~ ently at a rate of over $2;900,000,000 yearly. The “tre- mendous volume’” of Sears gives. it power to destroy the. business and property of its small competitors and suppliers through Fefusals to deal with ‘such sup- Pliers or through the acta or. threatened use of un- reasonably low prices. wars has used its power “to. discipline and punish suppliers’? with the specific in- tent to injure and destroy potential competitors who nade purchases from such suppliers. The exercise of such power constitutes an intent to monopolize a part of interstate.trade and has the effect of unrea- . Sonably restraining. competition among suppliers and, of, coercing. suppliers of Sears to dedl with «it on: -Sears* terms. (Par, 8-10) : “ue . » (d) ‘Beginning | in 1949 Sears Has engaged in a continuing attempt to destroy every business in Which , Mackey was engaged ‘in order to punish him for’ his refusal to deal on Sears’ terms and to restrain oth- evs from sinilar refusals. (Par. 11) ' (e) In 1946 Sears by threatening to’ discontinue: its purghases caused Metalcraft to sell its nursery « lamps exclusively to Sears. (Par. 12) . %, (f) In 1949 Sears notified Mackey that it would .. hot aceépt 30,000" nursery’ lamps which Metalcraft - Was under contraé® to supply. unless the price was’ re. . duged 20% declaring that if- the reduction were ‘re. fused Sears would ruin Mackey and Metaleraft. (Par. -“(g) Mackey declined accede to the price reduc- tion and “thereupon attempted to sell the nursery . . ‘y ; ~® * -—12a oe lamps through department stores in Milwaukee and Detroit. . With the ‘infent ef despoiling Mackey-s plans, Segrs sent substantial quantities ‘of the Metal-. craft amps, for which it had paid: $2.20 apiece, for - sale in Milwaukee and Détroit at 94¢, though not in - other comparable cities. At the same time Sears ‘listed the: lamps ‘in two of its catalogs at 84¢ apiece, supplying a cheap imitation of the Metalcraft. lamps “to persons ordering from Sears’ .catalog representa-. -tiow of Metaleraft’sdamp.”’ As a direct result of such conduct, -Metaleraft became ‘insolvent and was dis- - solved. (Par. 14) | (h) In October 1952, while Mackey was engaged: in selling tools for-¥Vascoloy, Sears caused Vascoloy ‘to discharge Mackey under the threat of refusing to mike further purchases from customers of Vascoloy. (Pan-t, te) SS , - ee rae (i) Time Saver was formed to manufacture ‘and ‘sell certajh new type tools devised in part by Mackey. Throug’ national advertising such tools became iden- tified with Time’ Saver in: the market. (Par. 17)° -(j) Sehrs is presently purchasing and selling tools ~ which are|copies*of the tools developed™by Mackey in _ plastic ‘cates which are copies of the cases used: by Time Saver. The Sears case contains the same leg- “end aid design on its display surface but: the words “Craftsman” and “Sears, Roebuck and Co.” are sub- stituted for the words “Time Saver Tools, Mundel- ein, Ill.’ Sears’ purpose is to appropriate the mar- ket for the tools and at the same time to. destroy Mackey. With respect to certain tools, Sears’ con- : duet continued notwithstanding notice of Time Sav- er’s patent application and despite. knowledge that “S. Sears’ copies infringe on the invention embodied in | the patent application. (Par: 18, 19) tes (k). Through promises of future business Sears ‘has-been able to purehase tools from Time Saver’s ~ supplier at prices lower than the price charged Time \Saver and has séld the tools below manufacturing —l3a— ; cost for the purpose of appropriating the market and _ destroying Time Saver. (Par. 20) é . (1) Sears has ‘sold tools in some parts of the _ United States at prices lower than others for the purpose of destroying competition from Mackey oF . Time Saver. (Par. 21) te : - (m) The described ‘practicés were undertaken by Sears in order, to. destroy Mackey and constitute. an attempt: to monopolize interstate commerce engaged in by Mackey and small companies making sales to Sears or which would be competitors of Sears in the retail market. | ee . ~ Asa result of the alleged injustices, Mackey -demands — + ** treble damages in the amount of $570,000, together swith incidental and injunctive relief. Time Saver. does not join- in the prayer for relief under this Count. ~ . eee Discussion of the Shegpian Act So far as the Sherman: Act ‘is-concerned, it is implicit - in the plaintiff’s. brief-that only a Section 2 violation is urged. .No reliance is placed on Section 1. This is inev- itable, since there is no charge ‘of combination or eon- ° Spiracy among distinct legal entitles having’ separate -eeo- nomic motives, personal to theinselves, whieh is an indis- pensable requisite for a Section 1 violation. | Times-Picayune v. United States, 345 US. 594, . | iC ee oe ae Timken Roller Bearing Co. +. Pnited. States, 341 U. $.593, 598,606. Reem el Nelson Radio & Supply.Cc. + Motorola, 26 F. 2d 911, 914.(C. C._A. Sth Cire. 1952). | United States v. Yellow'Cab Co., 332 U. S. 318, 227. re . To justify a ‘suit for treble damages (15 U.S. C. See. 15) two conditions must concur. The plaintiff must es tablish (a) a violation of the anti-trust laws and (b) in- jury to the plaintiff proximately resulting from the 5 = tablished violation. - = . pee a Goodman & Son v. United Laseet Mig. Corp. . $1 F. Supp. 890 (D. C. Mass. 1949) tog Sunbeam Co erporation v, Payless Drugstores, 113 F. Supp. 31 (D.C. Cal. amet): nm Nelson Radio & Supply Co. Motorola, supra. ‘The Sherman Act decries chibact unre: asonably” HL stricting competition in the public.market and:a charge ¢ if transgressing the statute necessarily involvés. a public e@! as distinguished from a purely private. wrong. — Neumann vt. Bastian Blessing Co., 70.F. Supp.: 447 (D. C. Tl. 1947, LaBuy, D. 3. ). The factual requirements for a civil suit ‘are no léss . severe than the requirements “for a. criminal indictment. —_ ~ Plaintiff argues that it is absurd to suggest that the public’ - has no interest in an individual who’ is heing. deliberatély destroyed. Assuredly the thought is valid but it serves no purpose in enlarging the scope of the statute. - Our” initial ‘task, therefore, ‘is to determine whether Count I sufficiently describes an offense under Section a of the Sherman Act. Rule 8(a) prescribes that a complaint shall include “a short and plain statement of the claim showing that the .. _ pleader is entitled to relief’ to which is added. the diree- *. tion that each" averment “shall be simple, concise and di- — rect.’ While a cause of action need not be: stated. with the technical accuracy and completeness required at com- . mon-law, the pleading must make it evident,. at least: in a practical way, that the: pleader is entitled to relief. - - Commercial Banking Corp_. Indemnity Insur. ance Com@any of Nerth America, 1 P. R. 380 (D.C C. Pa. 1940). ; “Me broad ‘ulieiaein of the -Rules. does not rey to justify the allegatign of a claim ‘in the words of a statute _ and this is cepecialty true in the case of a statute like the * Sherman Act which. defines a social and economic offense — ° : - 4 or j } . —_a— in terms of’ a general principle without specific ‘tests to | aid in its application. ; Louisiana Farmers’ Protective Union r. Great . Atlantic and Pacific Tea Co., 131 Fi 2d 419 (CL° pate C. A. 8th 1942). Ae oe ' The degree of definition required in alleging ultimate facts varies. from one type of case to another, but invar-. iably enough of a factual nature related to the ~ specific occurrences constituting the claim must be- included to in- _ dicate that a cause of avtion is at least potentially pres- + ent. Unless this test is met, the conduct of a trial would - be.a pointless waste of time. : The problem, theréfore, is whether-Count “Wy viewed in this liberal aspect, states a case—within—Section ggof the. Sherman Act. - ’ "| Section 2 has.a dual aspect. It condemns beth the act of monopolizing and an atter.pt to monopolize. As me _, port for the monopoly charge, the complaint alleges that, the defendant Sears is engaged: in generiil- retail mer- chandising,’ selling “among other. items nursery lamps _ . and tools, and that its current’ ‘annual business exceeds $2,900,000,000. These allegations are manifestly insufficient * * _ ~ to establish monopoly or monopoly power. In United States rv. Colunibia Steel Comoany, 34 U.S. 495, 527, the Court said: 3 Csr Seo “In determining what constitutes unreasonable re- straint, we do not think the dollar volume is Of itself of compelling significance; we Jook rather’ to the per- ‘centage of business controlled, the strength of the re: maining competition, whether the action Springs ‘from -. business requirements. or purpose to monopolize, the probable development of the. industry, consumer UP- mands, and other characteristics of the market. We do not undertake to prescribe any set of “percentage figures by which to. measure ‘the reasonableness of a corporation's enlargement of its activities by the pur- is > . —1t— _chase of the assets of a competitor. The relative ef- fect of percentage command of a market varies with the setting. in which that factor is placed. . United States, +, United Shoe Machinery Corp., 10 F. baciiad 295 (B.C. Mass. 1953). . In the instant case there is no statement as” to Sears’ volume in the nursery lamp and tool, business, either na- tionally or loeally, or. any factors relating to the éppor- tunities of the public to purchase in a free,and unre- — strained market. Sears’ volume in other, fields clearly ~ irrelevant.. There is no factual statement showing that_ the predatory practices, complained of have to. the slight- est extent lessened competition in the field of activity -in which the plaintiff was engaged. The effectiveness of ex- “clusionary practices employed against! a single competitor cannot be held to be monopolization where others in the same field are‘numerous and active. The destructcion of the plaintiff.alone would in°no sense deprive other com- petitive entities of their market or affect the publie to _ i—any measurable extent. eh Neumann v. Bastian- Blessing Co. bs supra. The. other seen of Section 2 which: has pertinency is the interdiction of an “attempt to monopolize. ”. The clas- sical definition of Mr. Justice Holmes is immedsately- per- tinent. In Swift & Co. v. United Ie 4 196 U. Ss." 375, 396, he said: ~. “Phe statute> gives this proceeding - against com- | . binations in restraint of -commerce among the states and against attempts to monopolize the same. Intent is almost essential to such a cdinbination and is es-_ sential to such an attempt. Where acts. are not: suf- _ ficient in themselves to produce a result which the . . law seeks to ‘prevent—for instance, the monopoly— but require further acts in addition to the, mere forces. of nature to bring that result to pass, an intent to bring it to pass is necessary in order to produce .* dangeroes probability ‘that it will happen. “Common- ee — 45 , —lTa-- cd wealth -v. Peasleé, 177 Massachusetts 267, 272. But _When ‘that intent and the consequent -dangerous® prob- ability exist;this statute, like many others and like the common law in some cases, directs itself against that dangerous probability as well ne paren the campleted > result.”’ This definition has fexsitea recent approval. i ry 198. Since the onaiaie makes no showing. that Sears had achieved an -actual monopoly or had attained monopoly power jn the field and in the area. in-which the: piaintiff waz engaged, it becomes pertinent to inquire. whether the predatory practices described coupled with the éeonomic strength possessed by Sears imply “an-intent to monop- - % olize a part of interstate trade” and afford evidence of. a dangerous probability that a monopoly will ultimately be accomplished.. The complaint can be searched in vain for - any factual-or near factual allegations that bring any such” convietion to the mind. - Specifically: the defect in the complaint is the absense of any causal connection between the destruction of the plain. -tiff and his. corporations and the disciplining of Sears’ ‘suppliers’on the one hand, and the elimination or de- grading of general competition in the areas of- business £ s - in which Sears and the plaintiff had a common interest on_ the other hand.. The actions taken’ to ruin the plaintiff and discipline sapphers may be reprehensible but there is not the slightest showing of impending monopoly other - than the bare assertion of the pleader. It is true that an offensive monopoly need-not. be nation- wide. It may indeed embrace only a smail locality. As stated by Mr. Justice Reed in United States: v. Columbia — “Steel Co., 334 U. S. 495, 519: ~ ! “The Sherman Act is not limited to dimisating 2 re- straints whose effects cover the entire United States. . We have consistently held that where the relevant tt a ees competitive market covers only a small area the Sher- — _ man Act/may be invoked to prevent unreasonable re- straints within that area.” United States r. Yellow Cab Co., 332 U.S 8. Gameo Ine. r. eos Fruit & Produce oe. iM F. 2d 484 (C. C. A. Ist 1952), where the - monopoly peer within the confines of a single building. : ‘However, the charge that Sears declan the plaintiff in Milwaukee and Detroit is not sufficient to establish any de- _ _- structive effect on the competition in those areas or any exclusionary practices. Price cutting in itself is not inherently uniawful. Sehine Theatres ¢. United wees ea 334 U. _S. 110, 120. . These i ts ae dinesasies Sears and the plaintiff were the ~ only vendors of nursery lamps in the two cities or any allu- - sien to the ‘financial strength or weakness-of any other ‘competitors who may have been engaged in those markets, or indeed any other allegations des¢riptive of a com- petitive situation in which the public interest was in- velyed. All of the factual allegations emphasize the. plain- tiff hs the primary object of Sears’ destructive, intent. . Both ‘sides ‘converge upon United States v. New York d4jreat Atlantic and Pacitie Tea Company, 67 F. Supp. 626 (D.C. IL. 1946), affirmed 173 F_ 2d 79, as being the most closely related decision. The defendant asserts that this case stands alone as sustaining a monopoly charge where no- dominating control of the market was proved, yet de- iendant offers. no citations to autheritative cases where | the decision has been eritieized, limited or rejected. It is not necessary to justify this decision, although 1 it is easily _ defensible and undoubtedly sound. So far as the case re- - lates to Section 2 of the Sherman Act, it was presented to _ the court as an attempt te create a partial monopoly and a conspiracy between the principal defendant and its ds- _ * "~~ soeiated companies was charged. There was no contention \ iw « - | rg oa — 19a that an actual monopoly had been eccouiflished a and there- for’ the decisioggwas- based upon a different .aspect. of Section 2 from the group of cases,\stressed by the de-_ fendant, in which the Supreme Court\ has’ measured the percentage of the business transacted ‘by the offending corporation im i aia field of competition. The court found that where, in Spite of a declaration of in- . hocence of purpose the “conscious acts of a group are '.. such as inevitably to work undue restraint of trade or a monopoly, in whole or \in part, the actors thereby: bring _about transgression of the congressional rulo“of conduct.’’ » _ .(p. 676. Emphasis supplied.) The court concluded that. | A -& PS = plan of action consisting of numerous and divers - restrictive practices inevitably and inherently. - tended to restrain tradé and create a partial monopoly. Even though some one or all of the acts of A..& P. standing alone might net amount to a Violation of ak ‘“‘when coupled and inextricably interwoven ‘with the — + activities of Acco, (such actions) reflect’ inevitably the misuse of defendants’ power in competition with others to “such an -extent as to create undue interference with com- merce—undue restraint of" eee such a character as | to result in monopoly.” / The separate and successive ficts af the defendant fact- _ ually recited in the first Count weré invariably directed toward. the viumination of the plaintiff alone, and therefore bear no real analogy to the impairment of the ~public interést proved i in the-A. & ®. case. ; The ¢ dares of the’ Stleruanin Act violation comminttee sus- ‘tained. - Be Sak. | The Claim: Under Section 3 of the. ; ; iS ft: Robinson-Patman Act (15 U.S. C.18(a)) The - second anti-trust violation’ seriously urged | ‘is an offense under Section 3 of the. Robinson-Patman Act. So far as pertinent, this séction provides: *— _ _ _ Sit shall be unlawful for any person * * * to ais. 1 eriminate in. price between different purchasers of commodities.of like grade and quality, “ * * wkere the 0 eS? _ _ effect ‘of such discrimination may be al: to lesson competition gr tend to create a monopoly in any line of commerce, or to injire, destroy, or prevent competition with any person who either grants or knowingly seceives the benefit of such discrimina- . tion, or with. customers of either of them * ¢ °.”” |." > e _ The pertinent alle -zatiqns of the complaint are: .|_ ra (a). Pa kagraph 14, Sears sent lamps. which it. had’ * purchased from Metalcraft’ to’ Milwaukee. and Detroit, + though not to other is aecpaness cities, for sale below. : cost. _ than the prices charged ‘Time Saver. (ce) Paragraph 21: Sears’ sold tools in some parts of the United States af lower prices than cae e - for the purpose of destroying, competition fro ac- key or Time Saver. & “a the light. of what ‘io been said aie the dineusilon’ of -the Sherman Act, the only clause of Section 3 of © the Robinson-Patinan Aét which’ is significant here is © that which specifies that price discrimination is unlawful | if tt tends to injure, destroy er prevent competition with | the person who grants or receives the benefit of the dis- crimination or with the customers of either. To ‘succeed . plaintiff must bring himself within, the defined ‘area of competition in order to show. that he has been injured as a result of an infraction of the section.’ Goodman’ & Son v. United 2 ES Mig. Corp. supra. © Nelson Radio & Supply Co. v. Motorola, nok; Sunbeam Corporation v. Paylens Drag Stores, supra. Manifestly Maékey was-not a person who granted or received any, prive concession ora customer of Séars or its customers\_This. disposes of ‘the allegations: in Pare- graphs 14 and 21 wi asennad : . a ~(b) Paragraph 20. Bears . indueéd ‘suppliers of. ‘lathe bits to sell the bits to Sears at prices lower — ° The dinion ii Fasenls 20 Ge. ng common supplier g ~ lathe biti sets to Sears and: Mackey. sold to Sears at a lower’ price - than’ Time Saver is irrelevant—sihce Time ‘ . Saver is not a party plaintiff. to- Count J. Further, the -. supplier .of the bits—not- Sears—is the offender described by the statute, and if any such cause of ction is’ sustain- able the supplier should necessarily be joined as a primary. « ‘ party defendant. Finally, the emasculated allegations -of Section 20 hardly conform even to the simple pequiret ments | of Rule 8. ! : © > - ‘Counit 11—Cémmon Law Canse of Actin. Maekey is the ‘sole ‘party plaintiff in Count Tl. Plaine. tiff seeks to justify this Count,;as a common ‘law action y for the intentional , and deliberate destruction of the. plaintiffs’ businesses, accomplished through a planned ~ program which, the plaintiff savg, must: be considered as - & connected. whole. -The action, therefore °; sounds, in tort. The substential facts alleged are (1) ° Sears. induced » - Metaleraft to sell its nursery lamps. to Sears. exclusively, (2) Sears refused to accept lamps which Metalcraft. Was | under. contract to supply Sears a a 1 denfithd price re-*~ ductions under: threat that. Sears wotld: ruin, Mae ‘key and Metalcraft if: the reduction svére refused, and (3) Sears _ soli Metalcraft the lamps below cost in, Milwaukee and _ Detroit constituting, markets which: Mete ‘leraft was at- tempting to develop. sk ete eae ee tee corporation has the right to seiect,its « itbetie and, to refuse to sell its products for any Te rygn whatsoever. Times-Pitayune v. United States, ’ - gupra eee Nelson Radio & Supply. Co: ev. Motorola, supra” . } * - The right, arbitrarily to. refuse to deal with or purchase from anyone. should be: equally immune ‘from. attack or criticism. ee rr 2 a ; \ ¥ — ° . . . | Sy ¢ \ “In the Mead Bread case, as in this case, the plaintiff contest ‘treble damages for violations of $13a. We first sustained a dismisal of. the complaint. Upon mandate from the Supreme Court, this judgment was vacated and the case was tried to a py which returned a verdict in favor of Moore for treble damages. e reversed and remanded with -instructions to enter . nes for the defendant: The Supreme Court, - reversed and affirmed he judgment of the District Court. Although the question here was not raised, the court held that violations of §13a were “included within the ‘scope "of the antitrust laws” with th ‘ght ° to treble damages, even though the victim is a local reside’ .d no interstate transactions were used to destroy it. : --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386418_1493%3A2. Public record. Not legal advice.