Opinion ID: 164453
Heading Depth: 2
Heading Rank: 2

Heading: Illegal Intent

Text: 32 Sam's argues that the district court wrongfully decided that its sales to its members were made with the intent and purpose of inducing the purchase of other merchandise, unfairly diverting trade from a competitor, or otherwise injuring a competitor. The district court's decision that there was such intent and purpose is a question of fact that we review for clear error. Ben Hur Coal Co. v. Wells, 242 F.2d 481, 483 (10th Cir.1957). 33 Under the OUSA, [e]vidence of advertisement, offering to sell, or sale of merchandise by any retailer or wholesaler at less than cost to him, shall be prima facie evidence of intent to injure competitors. Okla. Stat. tit. 15, § 598.5(c). Thus, this evidence may be rebutted by proof of lack of injurious intent. Glenn Smith, 704 P.2d at 478. 34 Sam's argues that the district court ignor[ed] substantial evidence that Sam's had no such intent, and therefore wrongfully found that the prima facie evidence of intent to injure competitors was not rebutted. Aplt. Br. at 47 (citing I Aplt.App. at 149-50; II Aplt.App. at 6). However, the affidavit and testimony of Richard Ezell, the operations manager for Sam's fuel division, stating that Sam's intent is at all times to meet competition and price within the confines of the Oklahoma Unfair Sales Act, II Aplt.App. at 6 (Ezell Aff.); see also I Aplt.App. at 149-50 (Ezell Test.), is simply not enough to rebut this presumption. See Lind v. McKinley, 196 Okla. 4, 161 P.2d 1016, 1018 (1945) (presumptions indulged by reason of a statutory prima facie rule of evidence may be overcome ... by evidence of facts ... clearly proven) (emphasis added), overruled on other grounds by Gardner v. Jones, 309 P.2d 731 (Okla.1956); see also Johns v. Edwards, 120 Okla. 85, 250 P. 1012, 1014 (1926) (to overcome prima facie evidence, a very clear preponderance of the evidence is required) (internal quotation marks and citations omitted). 35 Moreover, the district court also found that Sam's practice of pricing gasoline below cost was done with the intent and purpose of inducing the purchase of other merchandise. Star Fuel, 2003 WL 742191, at . The court based this finding on Sam's internal management manual, which, as discussed above, indicated that gasoline increases frequency of shopping and total purchases by our Members, that it drives both new membership sign-ups and increases renewal rates, and increases total box sales and profits in the Club. II Aplt.App. at 112. 36 Sam's addresses this finding of the district court for the first time in its reply brief. Generally, arguments raised for the first time on appeal in an appellant's reply brief are waived. Gaines-Tabb v. ICI Explosives, USA, Inc., 160 F.3d 613, 624 (10th Cir.1998). For the sake of completeness, however, we address Sam's two arguments on this point. First, Sam's argues that memberships are not merchandise. Aplt. Reply Br. at 15. Even if this were true, it does not affect the fact that Sam's own internal documents cite gasoline as a way of increas[ing] frequency of shopping and total purchases by their members. II Aplt.App. at 112. The district court's finding is not clearly erroneous. Second, Sam's argues that inducing the purchase of other merchandise is only a prohibited intent if the prices of the other merchandise are inflated. Aplt. Reply Br. at 15. This is simply contrary to the plain wording of the statute, which does not have such a requirement. 37 Finally, the district court also found that Sam's gasoline was priced with the intent of unfairly diverting trade from a competitor. Star Fuel, 2003 WL 742191, at . Sam's argues that the district court based this finding only on Sam's desire to project a low price image and to best its competitors. However, the district court based its finding on an exhaustive list of factual findings, including the fact that Sam's gasoline operations were operating with losses for such a sustained period of time, and that Sam's can easily get a general idea of what a competitor's cost would be. Id. at -7. These findings are not clearly erroneous.