Opinion ID: 468173
Heading Depth: 1
Heading Rank: 1

Heading: statement of case and facts

Text: 2 The defendant, Lamaur Inc., is a Minneapolis, Minnesota, manufacturer of beauty products. Lamaur has approximately 150 authorized distributors who sell the products as either full-service or cash-and-carry operations. Full-service dealers maintain field salespersons to advertise and sell the products to beauty salons. Cash-and-carry dealers typically sell the products through flyer advertising and sell primarily to small salons, retailers or unauthorized distributors. Lamaur prefers the full-service dealers because they provide more services to the clients and invest in advertising and active promotion of Lamaur's product. The plaintiff, Local Beauty Supply (Local), was a distributor of Lamaur products from 1956 to September 19, 1980, with its principal place of business in Castleton, Indiana. Over that time Local became more and more a cash-and-carry operation. 3 In 1973 Lamaur entered into a Lamaur distributor agreement (LDA) with its dealers. The agreement contained three pertinent provisions. First, the distributors agreed not to sell restricted-use products (such as permanent waves and bleaches) to non-salon customers without consent from Lamaur. Second, the agreement provided that distributors who failed to provide full service and advertising would remit to Lamaur 15% of the wholesale price as a functional discount. Third, the distributors agreed to submit to auditing by Lamaur in order to ensure compliance with the previous two provisions. If a distributor breached the agreement, Lamaur could cancel the LDA without prior notice. Local was a signatory to both the 1973 and 1977 LDA's. 4 Local contends that Lamaur used the audit and functional discount provisions of the LDA to facilitate a price maintenance scheme in violation of Sec. 1 of the Sherman Act, 15 U.S.C. Sec. 1. Local maintains that it was terminated by Lamaur in order to pacify distributors complaining of Local's sub-jobbing. As damages, Local seeks its lost profits from its inability to sell Lamaur products. Local argues that distributors in Chicago were complaining of its sales to Victory Bee (Bee), a retail discounter in Hillside, Illinois. Local alleges that in order to keep Bee from undercutting the distributors, Lamaur decided to stop selling to its supplier, Local. When Lamaur requested an audit of Local, Local refused, claiming the audits were a ruse, designed to intimidate Local (and other distributors) into stopping sales to Bee. Because Local would not submit to this audit, it was terminated. Thus, argues Local, its termination was the direct result of an unlawful price-fixing scheme. Local seeks treble damages under Sec. 4 of the Clayton Act, 15 U.S.C. Sec. 15, and injunctive relief pursuant to Sec. 16 of the Clayton Act, 15 U.S.C. Sec. 26. 5 Local filed a four-count complaint against Lamaur. Count I charged a violation of Sec. 1 of the Sherman Act and sought ten million dollars in damages but trebled under Sec. 4 of the Clayton Act; Count II alleged a post-termination boycott in violation of the same provision; Count III charged violations of Secs. 2(d) and 2(e) of the Robinson-Patman Act, 15 U.S.C. Secs. 13(d) and 13(e); and Count IV claimed injunctive or $50,000 per month monetary relief. 1 Counts I, III and IV were dismissed for lack of standing; Count II was dismissed by agreement of the parties to allow entry of final judgment. Local bases its appeal on Counts I and IV.