Opinion ID: 249262
Heading Depth: 1
Heading Rank: 4

Heading: Competitive Position of Appellee.

Text: 19 The trial court expressly found that the plaintiff, as well as other competitors of appellant, made price cuts from time to time on an individual basis. The Court said: 20 It appears from the record here that in the struggle for business there has been, both on the part of plaintiff and defendant, price cutting in vying for the business of individual consumers, but there had not been until the action of the defendant here complained of, an overall price reduction to all consumers within the competitive area. 21 In its injunction requiring the defendant to reestablish its general price structure of 20¢ less two cents, the court made the further provision: 22 The injunction granted herein has no effect on customer sales that have been negotiated in the past, as a business practice, on a bid basis or a customer basis, nor shall it prevent such competition in the future. 23 Appellant contends that this order leaves the plaintiff below and the twelve other competitors free to sell at any price they see fit but prevents it from competing even on a customer to customer basis except to the extent that it can meet a price quoted to an individual customer by plaintiff or the other competitors. 24 On oral argument in this court appellee's counsel stated that appellee was doing nothing that was forbidden to the defendant. We think that since appellee is here contending for what it claims was a recognized status prior to June 1959, and in light of counsel's apparent acquiescence, whatever injunctive relief is granted to it should be equally binding on it. 25 The gist of the trial court's decision, as stated in its conclusion, is: 26 It appears from the evidence here that competitors of the defendant corporation were cutting their prices from time to time on a customer basis and, while defendant contends that its broad price cuts in the Athens and Gainesville areas were good faith reductions to meet the equally low price of a competitor, it seems clear that there is this situation: The competitors of General were struggling for business and cutting prices on a customer basis and defendant, General, becoming tired of the struggle customer by customer, declared war with a drastic price reduction over the area in which plaintiff competes. 27 If it is ultimately proved that in making this price reduction over the whole area the appellant did no more than meet the lowest price of competitors in major parts of the trade area, we think there is considerable doubt whether this would afford a proper basis for granting either injunction or damages. We do not, however, decide this on this appeal, for as we said in Mansfield Hardwood Lumber Co. v. Johnson, 5 Cir., 242 F.2d 45, we regard as correct and controlling here what was said in Mytinger & Casselberry, Inc. v. Newman, 7 Cir., 215 F.2d 382: 28 On appeal from decree for preliminary injunction sole issue before court was whether district court abused discretion, and merits of controversy would be left open for further consideration and future determination. 29 Applying this principle to this appeal, in light of the contested legal issues and the showing that, if resolved in favor of the plaintiff, it might be seriously damaged by the loss of customers if it did not compete on a basis that would cause financial loss which would be difficult if not impossible to measure, we cannot say that the granting of a temporary injunction was beyond the court's power. So long as the plaintiff and defendant would be required to compete on an even basis the temporary injunction would not seriously injure the appellant if the competitive basis fixed in the injunction is made realistic as to the remaining competitors in the trade area. 30 We conclude that if the trial court should see fit to modify the temporary injunction so as to prohibit both the defendant and the plaintiff from selling or offering to sell to any domestic customer, except under existing unexpired contracts, for less than 18¢ with a two cent discount for cash within 10 days, and to commercial customers, defined as the court defined them in its findings of fact, for less than 16¢ less two cents, sufficient protection would be afforded to both parties without depriving the public of the benefits of a somewhat lower price than that prescribed in the order appealed from. 31 In suggesting such an order we do not, any more than did the trial court, resolve any of the issues, either legal or factual. These will then properly be determined on a full trial of the case. 32 We hold that in respect of the price of 20¢ less two cents for prompt payment, and 18¢ less two cents, the record did not support the court's findings. Moreover, we think that as to prices of 18¢ less two cents, and 16¢ less two cents, which we here suggest, the record would not support a holding that such general price, even if later found to be improper, would work any irreparable damage to the plaintiff. 33 This court cannot fashion such injunctive order, for it is not certain that the plaintiff would desire one in such a modified form. Moreover, the trial court should consider the other terms of any order it may see fit to enter. It is therefore necessary that the present order be set aside in order that the trial court may have a free hand within the limits of what we have said in this opinion and the prayers of the moving party to enter such order as it may consider right. 34 The injunction appealed from is vacated and the case remanded for further proceedings not inconsistent with this opinion. Costs of this appeal will be divided equally between the parties. Because of the seasonal nature of the business of both parties and the emergency of the appeal, it is ordered that the mandate shall be issued forthwith.