Source: https://law.justia.com/cases/federal/appellate-courts/F2/360/896/390628/
Timestamp: 2020-01-26 09:38:07
Document Index: 342489994

Matched Legal Cases: ['§ 2', '§ 2', '§ 2', '§ 2', '§ 2', '§ 2', '§ 13', '§ 2']

Crest Auto Supplies, Inc., Protecto of Michigan, Inc., and Morris Einhorn, Plaintiffs and Counter-defendants, Appellants, Andalbert Garfield, Orville B. Lefko, George Haar, and Ben Krugel, Counter-defendants, Appellants, v. Ero Manufacturing Company, Defendant and Counter-plaintiff, Appellee, 360 F.2d 896 (7th Cir. 1966) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Seventh Circuit › 1966 › Crest Auto Supplies, Inc., Protecto of Michigan, Inc., and Morris Einhorn, Plaintiffs and Counter-de...
Crest Auto Supplies, Inc., Protecto of Michigan, Inc., and Morris Einhorn, Plaintiffs and Counter-defendants, Appellants, Andalbert Garfield, Orville B. Lefko, George Haar, and Ben Krugel, Counter-defendants, Appellants, v. Ero Manufacturing Company, Defendant and Counter-plaintiff, Appellee, 360 F.2d 896 (7th Cir. 1966)
US Court of Appeals for the Seventh Circuit - 360 F.2d 896 (7th Cir. 1966) May 20, 1966
There is no quarrel with plaintiffs' first proposition "that summary procedures should be used sparingly in complex antitrust litigation where motive and intent play leading roles * * *," citing Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 473, 82 S. Ct. 486, 7 L. Ed. 2d 458 (1962). (Emphasis added.) See also Alles Corp. v. Senco Products, Inc., 329 F.2d 567, 572 (6th Cir. 1964). Nor is there any dispute over the proposition that the court must look at the record on summary judgment in the light most favorable to the party opposing the motion, and that, as stated by the Supreme Court in Poller, 368 U.S. at 467, 82 S. Ct. at 488, summary judgment under Rule 56(c) should be entered only when the pleadings, depositions, affidavits and admissions show there is no "genuine issue as to any material fact" and that the moving party is entitled to judgment as a matter of law. We cannot agree, however, that therefore the court was wrong in granting summary judgment here; proof of subjective states is not involved, and the only alleged genuine issue is whether the court could decide that the parties were in pari delicto.
We see no merit in plaintiffs' contention that the question of pari delicto is always one of fact which could not on this record be decided as a matter of law, but instead must be determined at a trial. Plaintiffs refer to a "feeling" in "all the Courts" against the pari delicto rule in private anti-trust cases. The only animus we detect in the courts on the pari delicto question is directed at protecting those who are coerced into illegal agreements as this court did in Jewel Tea Co. v. Local Unions, 274 F.2d 217, 223 (7th Cir.) cert. denied, 362 U.S. 936, 80 S. Ct. 757, 4 L. Ed. 2d 747 (1960); and see Bales v. Kansas City Star Co., 336 F.2d 439, 444 (8th Cir. 1964); or at permitting suits where the defense is the unclean hands of a plaintiff in transactions other than the one in suit, as the Supreme Court held in Kiefer-Stewart Co. v. Joseph E. Seagram & Sons, Inc., 340 U.S. 211, 214, 71 S. Ct. 259, 95 L. Ed. 219 (1951). But where a plaintiff participates freely in the alleged anti-trust conduct, the pari delicto rule precludes recovery. Eastman Kodak Co. v. Southern Photo Materials Co., 273 U.S. 359, 377, 47 S. Ct. 400, 71 L. Ed. 684 (1927); Pennsylvania Water & Power Co. v. Consolidated G. E. L. & P. Co., 209 F.2d 131, 133-134 (4th Cir. 1953), cert. denied, 347 U.S. 960, 74 S. Ct. 709, 98 L. Ed. 1104 (1954); Bales v. Kansas City Star Co., 336 F.2d 439, 444 (8th Cir. 1964); see this court's dictum in Northwestern Oil Co. v. Socony-Vacuum Oil Co., 138 F.2d 967, 971 (7th Cir. 1943), cert. denied, 321 U.S. 792, 64 S. Ct. 790, 88 L. Ed. 1081 (1944). As Judge Soper said in Pennsylvania Water, 209 F.2d at 134, the doctrine that a plaintiff who is a voluntary party to the allegedly illegal agreement which forms the basis for the anti-trust suit cannot recover thereon was "firmly established in earlier cases," and still remains to be given effect in appropriate actions.
The district court concluded that " [t]he third anti-trust charge, the alleged violation of Secs. 2(a) and 2(e) of the Clayton Act, * * * must also fall" for failure to state a claim upon which relief can be granted. The reason given is that the amended complaint merely charged in general terms defendant's discrimination in prices and services to "certain of their customers" without making the same prices and services available to "others of their customers including the plaintiff herein,"7 and that the omission of any allegation of adverse competitive effect in the price discrimination, i. e., that the alleged discrimination substantially lessened competition or tended to create a monopoly, and the absence of competition in regard to § 2(e), was a fatal defect.
Plaintiffs contend that their allegation of a violation of § 2 of the Clayton Act gave notice to defendant of the statutory elements set forth in the Act. Defendant argues here, so as to meet plaintiffs' claim that the allegations were particular enough, that the question is not of particulars in pleading but in essentials. The district court in Johnny Maddox Motor Co. v. Ford Motor Co., 202 F. Supp. 103, 106-107 (W.D. Tex. 1960) (alternative holding), granted summary judgment because of the failure of the complaint to show a right of recovery under the § 2 violation, although the allegations of that violation were "more specific" than other alleged anti-trust violations. The court quoted from Feddersen Motors, Inc. v. Ward, 180 F.2d 519, 522 (10th Cir. 1950), the general rule that there must be alleged a violation of the antitrust act in the form of harm to the general public in undue restriction of interstate commerce. In Albert H. Cayne Equip. Corp. v. Union Asbestos & Rubber Co., 220 F. Supp. 784, 789 (S.D.N.Y. 1963), the court dismissed a § 2(a) Clayton Act claim because it "utterly failed to allege facts" showing the requisite adverse effect upon competition, and had "no allegations whatever concerning commerce". The court noted the obvious — price discrimination is but one element of the statutory violation, and is neither per se illegal or unfair. And in Robinson v. Stanley Home Products, Inc., 178 F. Supp. 230, 233 (D. Mass. 1959), there was "not even an allegation, much less any statement of facts" indicating an adverse effect upon competition; and the complaint was said to be inadequate under § 2(a) of the Clayton Act.8
It is clear that one of the elements of a violation of § 2(a), as amended by the Robinson-Patman Act, is the requisite competitive effect, and that price differentials alone are not enough. 15 U.S.C. § 13(a); F. T. C. v. Anheuser-Busch, Inc., 363 U.S. 536, 543, 549-550, 80 S. Ct. 1267, 4 L. Ed. 2d 1385 (1960); Borden Co. v. F. T. C., 339 F.2d 953, 956 (7th Cir. 1964). And a violation of § 2(e) in discrimination in furnishing of services requires that there be competition between the two classes of customers. See F. T. C. v. Simplicity Pattern Co., 360 U.S. 55, 58, 79 S. Ct. 1005, 3 L. Ed. 2d 1079 (1959). In the amended complaint before us,9 plaintiffs have neither alleged any competitive effect or competition in any sense, nor set forth any facts concerning the unspecified discrimination from which it may be inferred.
Fed. R. Civ. P. 13(h). Additional Parties May Be Brought In
Fed. R. Civ. P. 12(b) provides that every defense to a counterclaim shall be asserted in the "responsive pleading thereto," except that specific defenses, including lack of personal jurisdiction and insufficiency of service, may be made by motion. Rule 12(h) provides that the defenses and objections here involved are waived if not made by motion or in the party's answer or reply