Source: https://law.justia.com/cases/federal/appellate-courts/F2/711/1319/302760/
Timestamp: 2020-01-19 19:33:21
Document Index: 210560961

Matched Legal Cases: ['§ 2', '§ 2', '§ 27', '§ 31', '§ 2', '§ 34', '§ 2', '§ 2', '§ 2', '§ 2', '§ 2', '§ 27', '§ 2', '§ 2', '§ 2', '§ 2', '§ 27', '§ 2', '§ 2', '§ 2', '§ 2', '§ 2', '§ 1', '§ 3', '§ 3', '§ 12', '§ 1']

Pete Bouldis, et al., Plaintiffs-appellants, v. U.S. Suzuki Motor Corp., et al., Defendants-appellees, 711 F.2d 1319 (6th Cir. 1983) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Sixth Circuit › 1983 › Pete Bouldis, et al., Plaintiffs-appellants, v. U.S. Suzuki Motor Corp., et al., Defendants-appellee...
Pete Bouldis, et al., Plaintiffs-appellants, v. U.S. Suzuki Motor Corp., et al., Defendants-appellees, 711 F.2d 1319 (6th Cir. 1983)
US Court of Appeals for the Sixth Circuit - 711 F.2d 1319 (6th Cir. 1983) Argued April 20, 1983. Decided June 27, 1983
It is a well established rule that motions for summary judgment are disfavored in antitrust litigation and that the standard for granting summary judgment is strict. See First National Bank of Arizona v. Cities Service Co., 391 U.S. 253, 284-90, 88 S. Ct. 1575, 1590-93, 20 L. Ed. 2d 569, reh'g denied, 393 U.S. 901, 89 S. Ct. 63, 21 L. Ed. 2d 188 (1968); Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 473, 82 S. Ct. 486, 491, 7 L. Ed. 2d 458 (1962); Smith v. Northern Michigan Hospitals, Inc., 703 F.2d 942, 947 (6th Cir. 1983); Davis-Watkins Co. v. Service Merchandise, 686 F.2d 1190, 1197 (6th Cir. 1982); Taylor Drug Stores, Inc. v. Associated Dry Goods Corp., 560 F.2d 211, 213 (6th Cir. 1977). However, this general rule does not preclude the use of summary judgment in appropriate antitrust litigation. See First National Bank of Arizona, supra, 391 U.S. at 288-90, 88 S. Ct. at 1592-93; Smith, supra, 703 F.2d at 947-48; Davis-Watkins Co. supra, 686 F.2d at 1197; Lupia v. Stella D'Oro Biscuit Co., Inc., 586 F.2d 1163, 1166-67 (7th Cir. 1978), cert. denied, 440 U.S. 982, 99 S. Ct. 1791, 60 L. Ed. 2d 242 (1979). See also Fed. R. Civ. P. 56 advisory committee note (1982) (summary judgment is "applicable to all actions"). Indeed, the very purpose of a motion for summary judgment, to eliminate a trial where it would be unnecessary and merely result in delay and expense, warrants summary disposition of such cases when appropriate.
In ruling on a motion for summary judgment, the evidence must be viewed in a light most favorable to the party opposing the motion. That party must be given the benefit of all reasonable inferences. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 158-59, 90 S. Ct. 1598, 1608, 1609, 26 L. Ed. 2d 142 (1970); United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S. Ct. 993, 994, 8 L. Ed. 2d 176 (1962); Davis-Watkins Co., supra, 686 F.2d at 1197. However, when a motion for summary judgment is made and supported, the opposing party may not rest on its pleadings, but must present sufficient evidence supporting its claims to demonstrate that there is a genuine issue of material fact. See Adickes, supra, 398 U.S. at 159 & n. 19, 90 S. Ct. at 1609 & n. 19; First National Bank of Arizona, supra, 391 U.S. at 288, 88 S. Ct. at 1592; Smith, supra, 703 F.2d at 947-48. See also Fed. R. Civ. P. 56(e). If the record evidence is not disputed as to any material fact, the case should be decided as a matter of law rather than submitted to a jury. Davis-Watkins Co., supra, 686 F.2d at 1197; Smith v. Hudson, 600 F.2d 60, 64-65 (6th Cir.), cert. dismissed, 444 U.S. 986, 100 S. Ct. 495, 62 L. Ed. 2d 415 (1979). Accordingly, "the absence of any relevant probative evidence in support of a litigant's antitrust claims will expose such claims to summary judgment disposition." Davis-Watkins Co., supra, 686 F.2d at 1197. See First National Bank of Arizona, supra, 391 U.S. at 290, 88 S. Ct. at 1593; Smith v. Northern Medical Hospitals, Inc., supra, 703 F.2d at 947-48.
Bold-Morr contends that the district court erred in dismissing its claim of price discrimination under § 2(a) of the Clayton Act, as amended by the Robinson-Patman Act.5 Essentially, this section makes it unlawful for a seller to discriminate in price between purchasers of the same or similar goods actually sold, whether to the ultimate purchaser or for resale, if the effect of such price discrimination may be to lessen competition substantially in a line of commerce or with the competitors of the seller or its customers. See Federal Trade Comm. v. Anheuser-Busch, Inc., 363 U.S. 536, 547-51, 80 S. Ct. 1267, 1273-75, 4 L. Ed. 2d 1385 (1969) (the term "price discrimination" is defined as merely a difference in price). Bold-Morr asserts two arguments to support its claim. First, it is charged that Suzuki initiated and maintained credit programs to enable dealers to purchase Suzuki products, and that Bold-Morr was not permitted to participate in these programs. Bold-Morr asserts that, as a result, its actual cost for motorcycles was greater than that of other Suzuki dealers who were approved for these credit programs. Two programs are cited by Bold-Morr in support of this contention: the "pay as sold" and the Suzuki finance programs.
Section 2(a) is not violated when the credit decisions are based upon legitimate business reasons. See, e.g., Craig v. Sun Oil Company of Pennsylvania, 515 F.2d 221, 224 (10th Cir. 1975), cert. denied, 429 U.S. 829, 97 S. Ct. 88, 50 L. Ed. 2d 92 (1976). As noted by the Tenth Circuit, decisions involving the extension of credit do not, as a matter of law, constitute a Robinson-Patman violation, since "differences in the borrower's financial strength, business experience, and many other factors bring about differences in the terms of credit, security required, guarantees, and other devices used by creditors under [such] circumstances." Craig, supra, 515 F.2d at 224.
These facts demonstrate that Suzuki's credit decisions with respect to Bold-Morr were based upon legitimate business factors. Bold-Morr has failed to submit any probative evidence which would suggest that Suzuki's credit decisions were based upon any other factors or motive. We reemphasize that under Fed. R. Civ. P. 56(e), Bold-Morr may not rest upon mere allegations but must set forth specific facts showing that there is a genuine issue of material fact for trial. See First National Bank of Arizona, supra, 391 U.S. at 288-90, 88 S. Ct. at 1592-93. Since a decision to extend or withhold credit which is based upon valid business considerations does not violate § 2(a), and since the only record evidence establishes that Suzuki's refusal to extend credit to Bold-Morr under either program was based upon valid considerations, it was not error for the district court to grant summary judgment on this issue.
The practice of conditioning price concessions and allowances upon the customer's purchase of a specific quantity of goods will not give rise to a Robinson-Patman violation if the concessions are available equally and functionally to all customers. See Federal Trade Comm. v. Morton Salt Co., 334 U.S. 37, 42, 68 S. Ct. 822, 826, 92 L. Ed. 1196 (1948); Shreve Equipment, Inc. v. Clay Equipment Corp., 650 F.2d 101, 105 (6th Cir.), cert. denied, 454 U.S. 897, 102 S. Ct. 397, 70 L. Ed. 2d 213 (1981); Mowrey v. Standard Oil Company of Ohio, 463 F. Supp. 762, 775-76 n. 17 (N.D. Ohio 1976), aff'd without opinion, 590 F.2d 335 (6th Cir. 1978). See generally 16C Von Kalinowski, BUSINESS ORGANIZATIONS § 27.04 (1982). Further, a claim of price discrimination will not lie if the buyer failed to take advantage of a price concession which was realistically and functionally available. See Shreve Equipment, Inc., supra, 650 F.2d at 105. The legislative history reveals that the aim of the Act is to prevent a large buyer from gaining discriminatory preferences over the small buyer solely because of the large buyer's greater purchasing power. See Federal Trade Comm. v. Henry Broch & Co., 363 U.S. 166, 168-69, 80 S. Ct. 1158, 1160-61, 4 L. Ed. 2d 1124 (1960); Morton Salt Co., supra, 334 U.S. at 43, 68 S. Ct. at 826.
It is also important to note that the promotional packages were intended to enhance the sale of products to dealers by providing economic incentives to purchase the promoted models. Moreover, Suzuki did not expect a dealer to participate in every promotional program. It was a matter of discretion with each dealer, in the exercise of its business judgment, whether to take advantage of the promotion. Appellant Pete Bouldis testified that on some occasions he participated in the promotional programs and at other times he did not, despite the fact that he had the financial ability to do so. Bouldis testified that he had cash flow and inventory problems which prevented him, at times, from participating in the promotional sales. Accordingly, by appellant's own admission, there is no causal link between Suzuki's practices and appellant's alleged injuries. See generally 16C Von Kalinowski, supra, at § 31.01 [c].
Section 2(d) prohibits a seller from making payments to one customer for services or facilities furnished by the customer, unless such payments are available to all purchasers on an equally proportional basis.6 See Federal Trade Comm. v. Fred Meyer, Inc., 390 U.S. 341, 350-53, 88 S. Ct. 904, 909-10, 19 L. Ed. 2d 1222 (1968); Federal Trade Comm. v. Simplicity Pattern Co., Inc., 360 U.S. 55, 65, 79 S. Ct. 1005, 1011, 3 L. Ed. 2d 1079 reh'g denied, 361 U.S. 855, 80 S. Ct. 41, 4 L. Ed. 2d 93 (1959); Zoslaw v. MCA Distributing Corp., 693 F.2d 870, 881 (9th Cir. 1982), cert. denied, --- U.S. ----, 103 S. Ct. 1777, 76 L. Ed. 2d 349 (1983); Vanity Fair Paper Mills, Inc. v. Federal Trade Comm., 311 F.2d 480, 486-87 (2d Cir. 1962); Exquisite Form Brassiere, Inc. v. Federal Trade Comm., 301 F.2d 499, 500 (D.C. Cir. 1961), cert. denied, 369 U.S. 888, 82 S. Ct. 1162, 8 L. Ed. 2d 289 (1962). On the other hand, § 2(e) prohibits the seller from furnishing services or facilities connected with the process and handling of commodities upon all terms not accorded to all purchasers on a proportionally equal basis.7 See Simplicity Pattern Co., supra, 360 U.S. at 65, 79 S. Ct. at 1011; Zoslaw, supra, 693 F.2d at 881; Exquisite Form Brassiere, Inc., supra, 301 F.2d at 500. See generally E. Kinter, A ROBINSON-PATMAN PRIMER 30-34, 245-47 (1970); 16D Von Kalinowski, supra, at § 34.02.
The aim of both sections is to eliminate devices by which preferred buyers obtain discriminatory preferences under the guise of promotional allowances. See Fred Meyer, Inc., supra, 390 U.S. at 349-50, 88 S. Ct. at 908-09; Henry Broch & Co., supra, 363 U.S. at 168, 80 S. Ct. at 1160. However, it is important to note that the discriminatory practices made unlawful by §§ 2(d) & 2(e) must occur in connection with commodities obtained by the purchaser for resale. See Fred Meyer, Inc., supra, 390 U.S. at 355-57, 88 S. Ct. at 911-12; L & L Oil Co., Inc. v. Murphy Oil Corp., 674 F.2d 1113, 1119 (5th Cir. 1982); Purdy Mobile Homes, Inc. v. Champion Home Builders Co., 594 F.2d 1313, 1317 (9th Cir. 1979).
Bold-Morr first claims that Suzuki's credit programs (pay as sold and Suzuki finance) violated §§ 2(d) & 2(e), as such programs were only available to certain favored customers. This claim is without merit because discriminatory practices in the extension of credit from the seller to the buyer are beyond the scope of either § 2(d) or § 2(e). See, e.g., Murphy Oil Corp., supra, 674 F.2d at 1119 & n. 7; Skinner v. United States Steel Corp., 233 F.2d 762, 765 (5th Cir. 1956). Accordingly, the extension of credit is a practice incident to the original sale rather than to the subsequent resale of the product, and, therefore, outside the coverage of §§ 2(d) & 2(e). See 16C Von Kalinowski, supra, at § 27.05; Annotation, "Validity, construction, and application of §§ 2(d) and 2(e) of the Robinson-Patman Act, regarding discriminatory payment for or furnishing of services or facilities," 24 A.L.R.Fed. 9, 81-83 (1975).
Bold-Morr also argues that Suzuki's freight allowances (prepaid freight promotions), conditioned upon the purchase of a specific number of motorcycles, violated §§ 2(d) & 2(e). This claim also lacks merit, since freight allowances relate merely to the initial sale of the product and not its resale. Therefore, freight allowances fall outside the coverage of both § 2(d) and § 2(e). See, e.g., Centex-Winston Corp. v. Edward Hines Lumber Co., 447 F.2d 585, 588 n. 5 (7th Cir. 1971), cert. denied, 405 U.S. 921, 92 S. Ct. 956, 30 L. Ed. 2d 791 (1972); Chicago Spring Products Co. v. United States Steel Corp., 254 F. Supp. 83, 84-85 (N.D. Ill. 1966), aff'd per curiam, 371 F.2d 428 (7th Cir. 1966); 16C Von Kalinowski, supra, at § 27.05.
It has been held that a seller who permits certain of its customers to return unsold goods for credit, while not extending the same privilege to other customers violates § 2(e). See, e.g., Joseph A. Kaplan & Sons, Inc. v. Federal Trade Comm., 347 F.2d 785, 787-88 (D.C. Cir. 1965); Students Book Co. v. Washington Law Book Co., 232 F.2d 49, 50 (D.C. Cir. 1955), cert. denied, 350 U.S. 988, 76 S. Ct. 474, 100 L. Ed. 854 (1956). However, it is also required that the return privilege be connected with the resale of the product to trigger the application of § 2(e). See Fred Meyer, Inc., supra, 390 U.S. at 349, 88 S. Ct. at 908. In the present case, Bold-Morr's dealership was terminated by the time the repurchase option became effective, and, therefore, Bold-Morr no longer was engaged in the ongoing business of selling motorcycles. Clearly, this situation is unlike one where return privileges are denied to an ongoing and viable business enterprise. Accordingly, with the dealership terminated, the failure of Suzuki to exercise its repurchase option with respect to portions of Bold-Morr's inventory, had no relation to the resale of the goods as required by § 2(e).
The final claim under §§ 2(d) & 2(e) is that advertising monies, termed co-op funds, were made available to other dealers which were not practically available to Bold-Morr.8 There is no dispute that these advertising allowances fall within the scope of § 2(d), and, thus, Suzuki was required to make the allowances available on proportionally equal terms to all of its customers. See Simplicity Pattern Co., supra, 360 U.S. at 65, 79 S. Ct. at 1011; Schoenkopf v. Brown & Williamson Tobacco Corp., 637 F.2d 205, 209 (3d Cir. 1980).
The record shows that Suzuki based the allocation of co-op advertising funds according to the number of motorcycles purchased by a dealer. Under this plan, a certain dollar amount for each model purchased by the dealer would be credited to the dealer's co-op advertising fund. The record further demonstrates that Suzuki's promotional programs which offered allowances for advertising, involved modest requirements to assure that the co-op funds were available to all dealers on a proportionately equal basis. Therefore, since Suzuki allocated its advertising allowances pursuant to a plan acceptable to the Federal Trade Commission, we conclude that it was appropriate to grant summary judgment on this issue as well. See Fred Meyer, supra, 390 U.S. at 358, 88 S. Ct. at 913 (payment of promotional allowance is not barred so long as the supplier takes responsibility under the rules and guidelines promulgated by the Federal Trade Commission).
A tying agreement exists when a seller, having a product which buyers want (the "tying product"), refuses to sell it alone and insists that any buyer who wants it must also purchase another product (the "tied product"). Northern Pacific Ry. Co. v. United States, 356 U.S. 1, 5-6, 78 S. Ct. 514, 518-519, 2 L. Ed. 2d 545 (1958); Bell v. Cherokee Aviation Corp., 660 F.2d 1123, 1126 (6th Cir. 1981). The "essence of illegality in tying agreements is the wielding of monopolistic leverage; a seller exploits his dominant position in one market to expand his empire into the next." Times-Picayune Publishing Co. v. United States, 345 U.S. 594, 611, 73 S. Ct. 872, 881, 97 L. Ed. 1277 (1953). Thus, tying arrangements are per se unlawful under § 1 of the Sherman Act, § 3 of the Clayton Act, or both, "whenever a party has sufficient economic power with respect to the tying product to appreciably restrain free competition in the market for the tied product and a 'not insubstantial' amount of interstate commerce is affected." Fortner Enterprises, Inc. v. United States Steel Corp., ( Fortner I) 394 U.S. 495, 499, 89 S. Ct. 1252, 1256, 22 L. Ed. 2d 495 (1969), quoting Northern Pacific Ry. Co., supra, 356 U.S. at 6, 78 S. Ct. at 518.
Fortner I, supra, 394 U.S. at 499, 89 S. Ct. at 1256; Northern Pacific Ry. Co., supra, 356 U.S. at 6, 78 S. Ct. at 518; Bell, supra, 660 F.2d at 1127. Additionally, § 3 of the Clayton Act is violated if the tying arrangement involves goods, wares, merchandise or other commodities. See generally 16B Von Kalinowski, supra, at § 12.04.
Such an allegation cannot withstand analysis. Bold-Morr was never compelled to participate in these programs to obtain the tying product. Unlike the common scheme found in tying arrangements, it was to Bold-Morr's advantage to participate in the promotional programs, as it would shift the expense for freight services from Bold-Morr to Suzuki. Additionally, Suzuki did not offer to provide freight services, but, rather, it only offered to absorb the cost for such services. Thus, this situation is distinguishable from those cases relied upon by Bold-Morr in which buyers were required to pay for freight service supplied by the seller in order to procure the tying product. See, e.g., Anderson Foreign Motors, Inc. v. New England Toyota Distributor, Inc., 475 F. Supp. 973, 981-86 (D. Mass. 1979). Lastly, under the circumstances presented, it appears doubtful that freight allowances could be considered a "separate product" for purposes of § 1, as the allowances appear to constitute an inseparable part of the purchase price for the tying product. Cf. Fortner I, supra, 394 U.S. at 507, 89 S. Ct. at 1260 (credit may constitute an inseparable part of the purchase price for the item so that the entire transaction could be considered to involve only one product); Foster v. Maryland State Savings and Loan Association, 590 F.2d 928, 931-33 (D.C. Cir. 1978), cert. denied, 439 U.S. 1071, 99 S. Ct. 842, 59 L. Ed. 2d 37 (1979) (fee for legal services are not a separate product but incidental to purchase of residential property loan).
As noted, above, the price concessions under these circumstances are so related to the principal product that it is difficult to conclude that two separate products exist. On the other hand, it is arguable that some of the advertising materials--spec sheets and displays--do constitute separate products, and, therefore, the potential for a tying arrangement is present. However, Bold-Morr is unable to prevail on this claim, since the record clearly demonstrates that the various advertising materials could be purchased freely by any dealer. Accordingly, since these items could be obtained without purchasing the tied product, no tying arrangement could exist. See Northern Pacific Ry. Co., supra, 356 U.S. at 6 n. 4, 78 S. Ct. at 518 n. 4.
Even if the arrangement is considered in the alternative (i.e., credit as the tying product and motorcycles as the tied products) a tying arrangement cannot be found. Under this analysis the focus, once again, is whether two separate and distinct products exist. Under the circumstance of this case, we are convinced that the extension of credit by Suzuki to its dealers was such an inseparable part of the purchase price for the motorcycles that the transaction involved only a single product. Cf. Catalano, Inc. v. Target Sales, Inc., 446 U.S. 643, 648, 100 S. Ct. 1925, 1928, 64 L. Ed. 2d 580, reh'g denied, 448 U.S. 911, 101 S. Ct. 26, 65 L. Ed. 2d 1172 (1980) (credit terms must be characterized as an inseparable part of the price); United States Steel Corp. v. Fortner Enterprises, Inc., (Fortner II) 429 U.S. 610, 622-23, 97 S. Ct. 861, 868-69, 51 L. Ed. 2d 80 (1976) (Burger, C.J., concurring) (Fortner I should not be read to cast doubt on the legality of credit financing by manufacturers or distributors); Fortner I, supra, 394 U.S. at 507, 89 S. Ct. at 1260 ("In the usual sale on credit the seller, a single individual or corporation, simply makes an agreement determining when and how much he will be paid for his product. In such a sale the credit may constitute such an inseparable part of the purchase price for the item that the entire transaction could be considered to involve only a single product."). Therefore, we conclude that no tying arrangement existed under the Sherman Act with respect to Suzuki's credit programs. It is also clear that the Clayton Act is inapplicable under this claim, as credit is a service and not a commodity.