Opinion ID: 406814
Heading Depth: 3
Heading Rank: 2

Heading: Post-Termination Boycott of Spray-Rite

Text: 22 Monsanto contends that the court's boycott instructions were erroneous. The court instructed the jury that a group boycott is per se unlawful and that it should find that Monsanto violated section 1 of the Sherman Act if it found that Monsanto agreed with some of its distributors to terminate Spray-Rite's distributorship or limit Spray-Rite's access to Monsanto products. Monsanto argues that only horizontal combinations to boycott are subject to the per se rule and that vertically imposed boycotts are subject to rule of reason analysis. Monsanto contends that the per se instruction should not have been given because Spray-Rite only introduced evidence of a vertical agreement between Monsanto and its distributors. 23 Certain types of group boycotts are among the practices that the Supreme Court has deemed to be per se unlawful. United States v. General Motors Corp., 384 U.S. 127, 86 S.Ct. 1321, 16 L.Ed.2d 415 (1966); Klor's, Inc. v. Broadway-Hale Stores, Inc., 359 U.S. 207, 79 S.Ct. 705, 3 L.Ed.2d 741 (1959); Fashion Originators' Guild v. FTC, 312 U.S. 457, 61 S.Ct. 703, 85 L.Ed. 949 (1941). Not all boycotts, however, are per se unlawful. United States Trotting Ass'n v. Chicago Downs Ass'n, Inc., 665 F.2d 781 (7th Cir. 1981); Smith v. Pro Football, Inc., 593 F.2d 1173 (D.C.Cir.1978); Hatley v. American Quarter Horse Ass'n, 552 F.2d 646 (5th Cir. 1977); Mackey v. NFL, 543 F.2d 606 (8th Cir. 1976), cert. dismissed, 434 U.S. 801, 98 S.Ct. 28, 54 L.Ed.2d 59 (1977); Deesen v. Professional Golfers' Ass'n, 358 F.2d 165 (9th Cir.), cert. denied, 385 U.S. 846, 87 S.Ct. 72, 17 L.Ed.2d 76 (1966), reh. denied, 385 U.S. 1032, 87 S.Ct. 738, 17 L.Ed.2d 680 (1967). A per se unlawful boycott has two essential elements: (1) at least some of the boycotters are competitors of each other and the target and (2) the boycott is designed to protect the boycotters from competition with the target. United States Trotting Ass'n v. Chicago Downs Ass'n, Inc., 665 F.2d 781, 788 (7th Cir. 1981). 24 Spray-Rite claims that Monsanto and some of its distributors agreed to boycott it. This is precisely the type of group boycott that the Supreme Court held per se unlawful in Klor's, Inc. v. Broadway-Hale Stores, Inc., 359 U.S. 207, 79 S.Ct. 705, 3 L.Ed.2d 741 (1959), and United States v. General Motors Corp., 384 U.S. 127, 86 S.Ct. 1321, 16 L.Ed.2d 415 (1966). In Klor's, a manufacturer and several retail stores agreed to boycott a retail store that competed with some of the boycotters. In General Motors Corp., General Motors agreed with some of its dealers to boycott other dealers selling GM automobiles at reduced prices. In this case, according to Spray-Rite, Monsanto, like General Motors, agreed with some of its distributors to boycott Spray-Rite, a competing distributor. Spray-Rite's theory, if supported by the evidence, presents a classic group boycott in which there is  'a concerted attempt by a group of competitors at one level to protect itself from competition from non-group members who seek to compete at that level.'  United States Trotting Ass'n v. Chicago Downs Ass'n, Inc., 665 F.2d 781, 788 (7th Cir. 1981), quoting Smith v. Pro Football, Inc., 593 F.2d 1173, 1178 (D.C.Cir.1978). The district court did not err in giving a per se boycott instruction. 25 The district court instructed the jury that it could consider Monsanto's compensation programs as evidence of Monsanto's conspiracy to boycott Spray-Rite. 5 Monsanto claims that this instruction is erroneous because it suggests that the jury could find a conspiracy to boycott Spray-Rite if it found (1) that Monsanto's territorial policies and compensation programs had an adverse effect on Spray-Rite and (2) that other distributors participated in the programs. 26 Monsanto has taken this instruction out of the context of the entire jury charge. The court instructed the jury that it could find a conspiracy only if it found that Monsanto and some of its distributors agreed to boycott Spray-Rite. The jury was instructed that (m)ere similarity of conduct among various persons ... does not necessarily establish proof of the existence of a conspiracy. Tr. at 4351. The entire jury charge properly instructed the jury concerning the elements of a conspiracy to boycott. The court did not err in instructing the jury that it could consider the effect of Monsanto's compensation programs as circumstantial evidence of the conspiracy to boycott. 27