Court Opinion

ID: 9452626
Source: CourtListenerOpinion
Date Created: 2023-08-04 17:46:46.355892+00
Date Added: 2024-06-11T17:33:17.627716
License: Public Domain

McENTEE, Circuit Judge.
In this action plaintiff, a gasoline station operator, charges the defendant oil company, his former lessor and supplier, with violations of the federal antitrust laws as a result of which he suffered great damage. The district court dismissed the suit for failure of the amended complaint to allege a federal antitrust law violation.
Viewing this ambiguous complaint in the light most favorable to the plaintiff, *274the following facts will be taken as true. In November 1962 plaintiff leased a Mobil gasoline station from defendant for a period of one year — and entered into a contemporaneous retail dealer contract agreeing to purchase certain minimum quantities of defendant’s petroleum products. The contract also provided for the purchase of tires, batteries and other accessories. This venture became fairly successful in the very first year of operation. In late 1963 when the lease and contract came up for renewal, defendant orally informed plaintiff that unless he reduced the retail price of gasoline by one cent a gallon his rent under the new lease would be substantially increased. Plaintiff flatly refused to reduce his price and vehemently protested the threatened rent increase. Apparently he won out — at least temporarily — because shortly thereafter the parties executed new agreements substantially the same as the old ones except for a slight increase in the rent.1
A few months later defendant began exerting various pressures on plaintiff to force him either to reduce his price of gasoline 2 or terminate his lease. It delayed payments due him at a time when it knew he needed the money; attempted to unload a consignment of tires, batteries and accessories on him 3 and apply the money owed in payment for this unwanted merchandise. After plaintiff refused to accept this consignment, defendant entered upon a campaign of harassment against him by delaying its deliveries of gasoline to his service station. Finally, when these pressures and harassments failed to bring about the desired results, defendant notified plaintiff in July, 1964 that it was terminating the lease as of the end of its current term (November, 1964). This, despite the fact that the receipts from the station had increased substantially in the relatively brief period he had operated it. Shortly, thereafter, plaintiff was required to vacate the gasoline station premises and as a consequence suffered great damage —all because of his refusal to comply with defendant’s request that he reduce the retail price of its gasoline.
From these facts it is clear that the only provision of the federal antitrust laws that need be considered here is Section 1 of the Sherman Act, and I shall confine my discussion to defendant’s alleged violation of that section.4 Resale pricing agreements that unreasonably restrain trade or commerce, whether they fix minimum or maximum prices, are proscribed by Section 1 of the Sherman Act. Dr. Miles Medical Co. v. John D. Park & Son Co., 220 U.S. 373, 31 S.Ct. 376, 55 L.Ed. 502 (1911); Kiefer-Stewart Co. v. Joseph E. Seagram & Sons, 340 U.S. 211, 71 S.Ct. 259, 95 L.Ed. 219 (1951).5 It should be pointed out, however, that in order to set forth a cause of action under this section 6 it is essential that a “contract, combination or conspiracy”, express or implied, be alleged. United States v. Parke, Davis & Co., 362 U.S. 29, 80 S.Ct. 503, 4 L.Ed.2d 505 (1960).
*275Beginning with United States v. E. C. Knight Co., 156 U.S. 1, 15 S.Ct. 249, 39 L.Ed. 325 (1895), the first case decided under the Sherman Act, and continuing down through United States v. General Motors, 384 U.S. 127, 86 S.Ct. 1321, 16 L.Ed.2d 415 (1966), I have found no'case where the Supreme Court has allowed recovery under this section absent a showing of at least one of these elements. Nowhere in his amended complaint has this plaintiff alleged the existence of any contract, combination or conspiracy between the defendant and others fixing the resale price of its gasoline nor does he allege any facts from which any such agreement, policy, scheme or conspiracy may be implied. Thus, I think the absence of such allegations renders the amended complaint fatally defective. Accord, House of Materials, Inc. v. Simplicity Pattern Co., 298 F.2d 867, 870 (2d Cir. 1962).
The allegation that defendant pressured plaintiff to reduce his retail price at best amounts to a unilateral attempt to coerce plaintiff into making such an agreement.7 Therefore the immediate question is whether this is actionable under section 1 of the Sherman Act. I think not. If Congress intended to make attempts actionable under this section undoubtedly it would have done so expressly as it did in the very next section of the Act (15 U.S.C. § 2) dealing with monopolies. It certainly is not within our province to read into this section interstitially a proscription which Congress clearly did not intend.
There are three cases which it is argued tend to support the contrary view. I think these cases are distinguishable. The first is United States v. Parke, Davis & Co., supra. There the Court held that a manufacturer’s conduct which went beyond a mere announcement of its price policy and a simple refusal to deal, violated Section 1 of the Sherman Act. In that case the manufacturer took steps to pressure certain unwilling retailers into adhering to its resale price policy through the cooperation of its dealers and some of its retailers. The Court found that this joint action to maintain resale prices constituted a combination or conspiracy in restraint of trade. Although defendant’s conduct in the case before us may have been more than a simple refusal to deal, our case is clearly distinguishable from Parke, Davis in that no combination or conspiracy is alleged nor can any be implied.
The facts in the other two cases, Simpson v. Union Oil Co., 377 U.S. 13, 84 S.Ct. 1051, 12 L.Ed.2d 98 (1964) and Broussard v. Socony Mobil Oil Co., 350 F.2d 346 (5th Cir. 1965), are practically identical. In both, a resale price agreement was entered into between supplier and dealer. Subsequently the dealer reneged and the supplier terminated the lease. Unlike the present case, in Simpson there was evidence of a large scale price maintenance program maintained through written consignment agreements under which the supplier fixed the retail price of gasoline. The dealer would not abide by the price fixed thereunder and for that reason the supplier refused to renew the dealer’s lease. The Court held that resale price maintenance through this coercive type of consignment agreement violated Section 1 of the Sherman Act. The case turned on the existence of an agreement for resale price maintenance. Simpson, supra at 24. In the instant case there is no such agreement.
Broussard, supra involved a situation where the dealer reduced his retail price of gasoline only after repeated insistence by the supplier. Finding that he could not make a living at the reduced price, the dealer raised it to its former level. The supplier again insisted upon a reduction in price and when the dealer refused, the supplier declined to renew the lease. The record in that case is much stronger for the dealer than in the *276instant one. In Broussard there was clear evidence that the supplier’s insistence that the retail price be reduced was part of a “marketing program”; also that at least one other dealer had reduced his retail price due to this insistence. When the dealer in Broussard reduced his price an agreement to control the retail price came into existence. I think this was a determinative factor in that case, even though shortly thereafter the dealer refused to abide by it.8 The evidence above mentioned also supplied the basis upon which a combination or conspiracy in restraint of trade could be implied.
Plaintiff Quinn never having complied with defendant Mobil’s request to reduce his price, no agreement to control the resale price of gasoline ever came into existence between them. This, plus the absence of any allegation that Mobil’s request was part of a general price maintenance scheme or policy or that any other dealer reduced his retail price as a result of defendant’s insistence, clearly distinguishes our case from Broussard. To be actionable under Section 1 of the Sherman Act pressure to achieve retail price maintenance that exceeds a mere refusal to deal must occur “in a contemporaneous framework of the combination, conspiracy, or agreement forbidden by the statute.” Dart Drug Corporation v. Parke, Davis & Company, 120 U.S.App.D.C. 79, 344 F.2d 173, 186 (1965). Clearly, in the instant case there is no such “framework.”
The allegation that defendant terminated the lease, despite the fact that plaintiff’s business had increased substantially, perhaps comes close to raising an inference that defendant was policing a general scheme to fix prices for the area. But this court should not be required to so speculate. Nor is it too much to require this plaintiff, absent the showing of an agreement, to allege enough facts to indicate that the acts complained of took place within the larger framework of a pricing program, policy or conspiracy — if this is the real basis of his complaint. He has not done so here.
Affirmed.

. These agreements ran automatically from year to year but were subject to termination in any year on notice of either party.

. There is no allegation that defendant renewed its request for this price increase at this or any later time.

. That he did not order; that defendant did not require his competitors to take and which under his contract plaintiff was not obliged to accept.

. Plaintiff contends that defendant’s above stated tactics also violated the Olayton Act as amended by the Robinson-Pat-man Price Discrimination Act, 15 U.S.C. § 13(a) (b) (f) but this act is inapplicable under any view of the facts and for that reason we shall not consider this contention.

. In this case the Court stated that both minimum and maximum price fixing agreements “cripple the freedom of traders and thereby restrain their ability to sell in accordance with their own judgment.”

. Section 1 reads in relevant part “Every contract, combination or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal * * 26 Stat. 209, 15 U.S.C. § 1 (1964 ed.).

. A simple refusal to deal, standing alone, is not a vertical agreement; in fact the refusal indicates there has been a failure to obtain agreement. Turner, The Definition of Agreement Under the Sherman Act: Conscious Parallelism and Refusals to Deal, 75 Harv.L.Rev. 655, 686 (1962).

. We do not subscribe to the view that an agreement broken shortly after it was made is in effect no agreement at all. See Guidry v. Continental Oil Company, 350 F.2d 342, 344 (5th Cir. 1965), where the same court, on the same day it decided Broussard, strongly emphasized this point.