Amedeo Girardi, Doing Business as Girardi Bearing Company v. The Gates Rubber Company Sales Division, Inc.

325 F.2d 196
CourtCourt of Appeals for the Ninth Circuit
DecidedDecember 31, 1963
Docket18008
StatusPublished
Cited by41 cases

This text of 325 F.2d 196 (Amedeo Girardi, Doing Business as Girardi Bearing Company v. The Gates Rubber Company Sales Division, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Amedeo Girardi, Doing Business as Girardi Bearing Company v. The Gates Rubber Company Sales Division, Inc., 325 F.2d 196 (9th Cir. 1963).

Opinions

POPE, Circuit Judge.

This is a private treble damage suit under the antitrust laws. (Sec. 4 of the Clayton Act, 15 U.S.C. § 15). The appellee, here called Gates, is and has been at all times referred to herein, engaged in the business of manufacturing and distributing belts and pulleys which were commonly used for the transmission of power to various machines. Its business involved trade in commerce between California and other States of the United States.1 The principal charge made against it by appellant was that it conspired with another to fix resale prices in violation of Sec. 1 of the Sherman Act (15 U.S.C. § 1).

The appellant Girardi had been in the business of distributing power transmission equipment, including belts and pulleys, since 1944. He first had a store at Stockton, California, which was operated by Girardi and one Jones as partners. In 1950 the partnership was dissolved and Jones formed a partnership for the carrying on of the same type of business with one Les C. Oranges who apparently had bought out Girardi’s interest in the original store. Girardi then in 1950 opened a similar business in Salinas, California, another in Modesto, California, and a third in Stockton, California. The Oranges-Jones partnership was dissolved prior to 1953. At that time Jones set up his own transmission business so that by the end of 1953 Girardi, Oranges and Jones were each engaged competively in that business. Each of them was then a distributor of Gates’ line of belts and pulleys. The evidence in the record indicates that at that time Oranges, who was known as a “stocking jobber” of the Gates line, had become a leading distributor of these products.

Gates supplied its jobber distributors, including Girardi, with its catalog containing a schedule of prices for sale of the Gates products. Oranges invariably adhered to these prices. Girardi had such a catalog as early as March, 1951, and he followed the suggested pricing schedule until January or February, 1954. In January, 1954, he sent out to the trade a letter advising prospective customers as follows: “This is to inform you of a change in our monthly cash discount. We have found it advisable to increase our cash discount from the present 2% 10th prox. to 10% 10th prox. This increase will become effective as of the first of February, 1954. You will continue to receive your authorized factory discount on all our merchandise. We are factory representatives throughout the Valley for the Fort Worth Power Transmission Company and carry a substantial stock of removable hub sprockets, pulleys, belts and chain. We are ready to serve you. * * * * ”2

[198]*198This letter came to the attention of the Gates salesman who in January, 1954, discussed with Girardi this letter and the fact that Girardi had taken on a rival (Fort Worth) line of pulleys and belts. According to the testimony of Girardi, the salesman, one Price, stated, “What’s this, you going out and giving 10% cash discount to people ?” He said that Price also told him, “If you don’t quit that, in 30 days you will be cancelled.” Price denied that he made the quoted statements, although he admitted that he had questioned Girardi on that occasion respecting the matter of the 10% cash discount. At any rate, on April 6, 1954, Gates wrote to Girardi cancelling its contracts with the latter for the supply of Gates products for Girardi’s Modesto and Stockton stores.

The letter cancelling Girardi’s contracts stated that the contract for the furnishing of the Gates goods for the Salinas store would be kept in force only if the goods there handled were not sold outside the immediate Salinas trading area.3 On May 24, 1954, Gates cancelled the Salinas contracts.

The complaint alleges that the defendant Gates cancelled these contracts of distribution and refused to deal with the plaintiff pursuant to its plan and agreement to control and regulate resale prices charged by its distributors ;4 that this agreement to regulate resale prices was done pursuant to a combination and agreement between the defendant and its distributors throughout the State of California in order to fix, stabilize and establish resale prices for the products of the defendant. This conduct, the complaint states, injured the business of Girardi; that this conduct was in violation of the antitrust laws; and the plaintiff prayed for recovery of three times his damages which he alleged were $35,-000.

Although the complaint alleged that this was a combination and agreement between Gates and its distributors throughout the State of California, counsel for the plaintiff in the court below stated that plaintiff’s effort was limited to an undertaking to show that “there was a conspiracy between Mr. Oranges and the Gates Company.” At the conclusion of the plaintiff’s evidence a motion was made to dismiss the action because of the plaintiff’s failure to establish a prima facie case as to conspiracy and because the court would not be warranted in submitting the case as made to the jury. The motion was sustained and judgment of dismissal of the action followed.

Upon this appeal Gates asserts that even if it were permissible to infer from the evidence that Girardi was cancelled because of his refusal to adhere to retail prices fixed by Gates, this falls short of proving any conspiracy or concerted action, and that all that was established was that Gates through solely unilateral action merely exercised the right recognized in United States v. Colgate & Company, 250 U.S. 300, 307, 39 S.Ct. 465, 468, 63 L.Ed. 992 — “the long recognized right of trader or manufacturer engaged in an entirely private business, freely to exercise his own independent discretion as to parties with whom he will deal. And, of course, he may announce in advance the circumstances under which he will refuse to sell.”

The proof that is necessary to make a case of the sort appellant attempted to establish here, is very thoroughly discussed in United States v. Parke, Davis & Co., 362 U.S. 29, 39, 80 S.Ct. 503, 509, 4 L.Ed.2d 505. Quoting from its earlier decision in United States v. A. Schrader’s Son, Inc., 252 U.S. 85, 40 S.Ct. 251, 64 L.Ed. 471, the Court said: "* * * there is unlawful combination where a manufacturer ‘enters into agreements— whether express or implied from a course of dealing or other circumstances — with all customers * * * which undertake [199]*199to bind them to observe fixed resale prices.’ ” The Court held that it is unnecessary in order to show an unlawful combination to prove that it arises from a price maintenance agreement, express or implied. The Court said that “such a combination is also organized if the producer secures adherence to his suggested prices by means which go beyond his mere declination to sell to a customer who will not observe his announced policy.

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Bluebook (online)
325 F.2d 196, Counsel Stack Legal Research, https://law.counselstack.com/opinion/amedeo-girardi-doing-business-as-girardi-bearing-company-v-the-gates-ca9-1963.