Court Opinion

ID: 9445566
Source: CourtListenerOpinion
Date Created: 2023-08-03 21:33:12.142786+00
Date Added: 2024-06-11T17:30:19.521950
License: Public Domain

BAZELON, Circuit Judge
(dissenting).
Webster and Zell were competing Packard automobile dealers in Baltimore. In 1952 Packard served notice of termination of Webster’s dealership, but then, after Webster’s protest, offered to renew the dealership for only one year without further renewal.
I think the court properly instructed the jury upon the law applicable to conspiracies or combinations in restraint of trade in violation of § 1 of the Sherman Act and that the evidence supports the jury’s finding in respect thereto. It is therefore unnecessary to decide whether the determination below of a conspiracy to monopolize in violation of § 2 may also be sustained.
There was evidence that Zell had asked Packard to eliminate Webster as a competing Packard dealer; that Packard had never before considered that one dealer could be adequate representation in Baltimore; that Packard had found Webster to be a satisfactory dealer with a good organization; that there was an “understanding” between Zell and Packard, and that Packard had “agreed” with Zell that Webster’s franchise be ended; and that, when Webster balked at his demise and threatened to bring an action for damages, Packard had offered Webster a renewal of its franchise in the usual form for one year, which Packard had agreed with Zell would be a final renewal. As a Packard memorandum put it: “This * * * was reviewed in detail and agreed to by Mr. Zell.”
From this evidence the jury could have found — as it apparently did — that Webster’s elimination as a dealer resulted not from a unilateral decision by Packard in selecting its customers, but rather from an agreement between Packard and Zell to eliminate Zell’s competitor and make Zell the sole distributor of Packard cars in Baltimore; in simple terms, that it was an agreement which amounted to a combination or conspiracy to get rid of Webster.1
The “common right” of an individual to engage in a lawful calling was pro*422tected against restraints at common law,2 is encompassed within the protection of the Fourteenth Amendment3 and forms the very basis of the Sherman Act.4 The purpose of the Act is to protect the individual business man as well as to assure to the consumer the benefits flowing from free competition. Applied to a dealership situation, the Act does not interfere with the manufacturer’s right to select his dealers but it does prevent him from combining and conspiring with one not to deal with another.5
Schwing Motor Co. v. Hudson Sales Co., D.C.D.Md.1956, 138 F.Supp. 899, affirmed 4 Cir., 1956, 239 F.2d 176, disagrees with the decision here under review. The latter case would limit the manufacturer’s right to select his own customers by the requirement that he make no agreement with one to exclude another. Schwing would recognize this limitation only “if the agreement is a horizontal one between competitors, or if the manufacturer dominates the market in the commodity.” 138 F.Supp. at page 906. In this I think Schwing is wrong. The Supreme Court has held that, even apart from monopolistic effect, a vertical agreement which excludes a competitor of one of the parties from a substantial market violates § 1 of the Sherman Act.6
To avoid the application of the Sherman Act Packard contends that, because Webster rejected the proffered one-year renewal, the jury could not find that Packard refused to deal with Webster. But this contention is not persuasive. The record contains ample evidence from which the jury could have found that the renewal offer was not made in good faith, was prompted by Webster’s threat to sue, and resulted from an agreement between Packard and Zell that it would be the last renewal.

. We are not called upon to decide whether § 1 of the Sherman Act applies to a manufacturer who, after a discussion with one dealer, decides to make the latter his exclusive distributor, cutting off all others, for the purpose of improving the manufacturer’s competitive position vis-a-vis more powerful mamifacturera. Cf. Schwing Motor Oo. v. Hudson Sales Co., D.C.D.Md.1956, 138 F.Supp. 899, 906, affirmed 4 Cir., 1956, 239 F.2d 176. That is not this case.

. Darcy v. Allen, 11 Coke 84b, 77 Eng.Rep. 1260 (1576).

. Apex Hosiery Co. v. Leader, 1940, 310 U.S. 469, 497-498, 60 S.Ct. 982, 84 L.Ed. 1311.

. Even individually conceived refusals to deal may be an element in a violation of § 1 of the Sherman Act. United States y. Bausch & Lomb Optical Co., 1944, 321 U.S. 707. 723. 64 S.Ct. 805. 88 L.Ed. 1024; Federal Trade Comm. v. Beeeh-Nut Packing Co., 1922, 257 U.S. 441, 42 S.Ct. 150, 66 L.Ed. 307; Report of the Attorney General’s National Committee to Study the Antitrust Laws (1955), at page 134; of. Dr. Miles Medical Co. v. John D. Park & Sons Co., 1911, 220 U.S. 373, 31 S.Ct. 376, 55 L.Ed. 502.

. See Standard Oil of California and Standard Stations v. United States, 1949, 337 U.S. 293, 305, 69 S.Ct. 1051, 93 L.Ed. 1371, explaining International Salt Co. v. United States, 1947, 332 U.S. 392, 68 S.Ct. 12, 92 L.Ed. 20.