Opinion ID: 392697
Heading Depth: 1
Heading Rank: 1

Heading: introduction

Text: 2 Falls City formerly operated a brewery in Louisville, Kentucky, that marketed beer under the names Falls City Beer and Drummond Bros. Preferred Beer. Vanco, located in Evansville, Indiana, was formerly the sole wholesale distributor of Falls City beer in Vanderburgh County, Indiana, which includes the city of Evansville. Vanderburgh County is located just north of Henderson County, Kentucky, with their common border running mostly along the Ohio River. Beer retailers in both states are required by state law to purchase beer for resale only from authorized distributors in their respective states. 1 Indiana law also requires that each brewer sell at a uniform price to all its Indiana wholesale distributors. 2 3 In November 1977, Vanco filed its first amended complaint in this lawsuit. 3 That complaint, as subsequently amended and supplemented, alleged that Falls City sold a substantial quantity of beer brewed in Kentucky to wholesale distributors, including Vanco, located in Indiana; that beer retailers in Henderson County, Kentucky, were in competition with beer retailers in Vanco's distribution area; that from July 1, 1972, to November 30, 1978, Falls City sold its beer to Kentucky wholesalers at prices lower than those granted to Vanco; that this discriminatory pricing policy resulted in higher retail prices in Indiana than in Kentucky; and that as a consequence many Indiana consumers purchased Falls City beer from Kentucky retailers instead of Indiana retailers, thereby causing Indiana retailers to purchase less Falls City beer from Vanco. 4 Count I alleged that from July 1, 1972, to November 30, 1978, 4 Falls City and various unnamed beer wholesalers in Kentucky conspired to restrain trade in violation of Section 1 of the Sherman Act (15 U.S.C. § 1) and conspired to monopolize the sale of Falls City beer in the relevant market area in violation of Section 2 of the Sherman Act (15 U.S.C. § 2), thereby damaging Vanco in an indeterminate amount. 5 Count II alleged that Falls City had engaged in discriminatory pricing in violation of Section 2(a) of the Robinson-Patman Act, thereby causing Vanco to pay in excess of $500,000 more for Falls City beer than defendant's Kentucky wholesalers over the relevant six-year period for the same quantity and quality of beer. Count III, a pendent state law claim for money had and received, alleged that Falls City overcharged Vanco for Indiana excise taxes by an amount in excess of $17,000 and that Falls City did not pay these overcharges to the State of Indiana but retained them for its own use. Vanco sought treble damages under Counts I and II, return of the Indiana tax overcharges alleged in Count III, and injunctive relief to prevent Falls City from selling its products to Kentucky wholesalers at a lower price than it granted Vanco and from overcharging Vanco for state excise taxes. 6 5 After a five-day bench trial in May 1979, the district court dismissed the Sherman Act claims in Count I for want of proof, but found in favor of Vanco on Counts II and III in the respective amounts of $575,293.79, before trebling under Section 4 of the Clayton Act (15 U.S.C. § 15), and $17,251.27 plus interest. No equitable relief was granted. 7 At the close of the trial, the district court called for briefs and for proposed findings of fact and conclusions of law. The last of these documents was filed in January 1980. The court's amended findings of fact, conclusions of law and judgment, drawn from the parties' proposals and the court's own additions, were released on April 14, 1980, and are reported in CCH 1980-2 Trade Cases P 63,357. This appeal followed. 6