Battle v. Lubrizol Corp.

673 F.2d 984
CourtCourt of Appeals for the Eighth Circuit
DecidedMarch 4, 1982
DocketNo. 81-1585
StatusPublished
Cited by28 cases

This text of 673 F.2d 984 (Battle v. Lubrizol Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Battle v. Lubrizol Corp., 673 F.2d 984 (8th Cir. 1982).

Opinions

McMILLIAN, Circuit Judge.

Jeffrey B. Battle, Karen Battle and two businesses which they control, Anchor Supply Co. (Anchor) and Bayview Service & Supply Co. (Bayview), appeal the district court’s order of summary judgment and dismissal of their private antitrust action alleging that appellees, the Lubrizol Corpo[986]*986ration, Jenkin-Guerin, Inc., and Jack K. Krause, president of Jenkin-Guerin, violated inter alia § 1 of the Sherman Act, 15 U.S.C. § 1. In that complaint, appellants charged that Lubrizol, a manufacturer of rustproofing compounds, conspired with one of its distributors, Jenkin-Guerin, to terminate appellants’ distributorship for the purpose of restraining price competition. Appellants do not offer evidence to prove an anticompetitive effect on the market and rely solely on the principle enunciated in Cernuto, Inc. v. United Cabinet Corp., 595 F.2d 164 (3d Cir. 1979) (Cernuto), that the concerted action alleged here, aimed at limiting price competition, has a per se anti-competitive impact on the market. The district court followed the per se analysis in Cernuto, but found the evidence insufficient to support a reasonable inference that appellants’ termination by Lubrizol was motivated by a desire to protect Jenkin-Guerin from price competition and granted summary judgment against appellants. Battle v. Lubrizol Corp., 513 F.Supp. 995 (E.D.Mo.1981).

For reversal appellants argue that the evidence was sufficient to support an inference that Lubrizol stopped selling directly to appellants in order to protect appellants’ competitor, Jenkin-Guerin, from price competition. For the reasons discussed below, we reverse and remand for further proceedings.

Facts

Lubrizol manufactures and sells Lubrizol 2085A, a rustproofing compound. Jenkin-Guerin is a wholesale distributor of chemical compounds, one of which is Lubrizol ■2085A. Jenkin-Guerin packages and sells Lubrizol 2085A under the trademark “Anchor Tuflex.” For a period of several months in late 1978 and 1979, Anchor Supply Co., controlled by Battle, purchased Lubrizol 2085A from Jenkin-Guerin and unsuccessfully attempted to compete for a share of the automobile rustproofing market. In July of 1979, appellants approached Lubrizol with a proposal to distribute Lubrizol 2085A for marine vessel and industrial rustproofing uses as well as limited automotive uses. Because of the competitive pricing aspects of the marine market, appellants requested a direct supply from Lubrizol at a lower price than they could obtain from Jenkin-Guerin. Interested in expanding into the marine market, Lubrizol agreed to supply Lubrizol 2085A directly to Bayview Service & Supply Co., another company controlled by Battle.

Although appellants apparently made some unsuccessful attempts to enter the marine vessel rustproofing market during the next few months, between October and December of 1979, Anchor was actively marketing Lubrizol 2085A under the name “Armor Shield” for automotive uses and soliciting Jenkin-Guerin’s customers with some success by undercutting Jenkin-Guerin’s prices. Sometime in January of 1980, Jack Krause, president of Jenkin-Guerin, learned of appellants’ actions and made a series of telephone calls to Irwin Ehren, manager of rustproofing products for Lubrizol. It is undisputed that in these telephone calls Krause complained that appellants were selling Lubrizol 2085A to Jenkin-Guerin customers at prices lower than Jenkin-Guerin’s. Krause was “upset” and wanted to know whether Lubrizol would continue to sell Lubrizol 2085A to appellants. There is evidence from one of Krause’s coworkers that before making one of these calls, Krause had commented to the office staff that he intended to force Lubrizol to stop supplying appellants with Lubrizol 2085A, and that after phoning Lubrizol, Krause boasted that he had done so.

Relying on the information supplied by Krause, Ehren informed George Arkedis, manager of Lubrizol’s diversified products division, of the substance of the conversations. Arkedis then told William Bares, president of Lubrizol, that appellants were active in the automotive market rather than marine market and that Krause was concerned about the price competition. On February 26, 1980, Bares ordered that the direct supply of Lubrizol 2085A to Bayview be terminated. Subsequently, Lubrizol put appellants in contact with a Cleveland distributor of the compound, Eaton Oil Co., [987]*987but Lubrizol has not reestablished direct supply. Appellants have been able to purchase Lubrizol 2085A through Eaton Oil. Appellants, however, now pay more for Lubrizol 2085A from Eaton Oil than when they bought from Lubrizol directly, although appellants still sell Lubrizol 2085A at a price which is lower than that offered by Jenkin-Guerin. Appellants brought this suit charging, inter alia, that Lubrizol and Jenkin-Guerin conspired to terminate their distributorship for the purpose of protecting Jenkin-Guerin from price competition in violation of § 1 of the Sherman Act. Appellees maintain that the distributorship was terminated because appellants misrepresented their intended marketing plans when applying for a direct supply and because appellants were not honest in the negotiations.

Summary Judgment

This appeal followed the entry of summary judgment. Summary judgments are somewhat disfavored in antitrust cases, especially when motive or intent is at issue. See Poller v. Columbia Broadcasting System, 368 U.S. 464, 491, 82 S.Ct. 486, 495, 7 L.Ed.2d 458 (1962). However, summary judgment is not necessarily precluded in antitrust litigation. As noted by the Supreme Court in First National Bank v. Cities Service Co., 391 U.S. 253, 290, 88 S.Ct. 1575, 1593, 20 L.Ed.2d 569 (1968):

While we recognize the importance of preserving litigants’ rights to a trial on their claims, we are not prepared to extend those rights to the point of requiring that anyone who files an anti-trust complaint setting forth a valid cause of action be entitled to a full-dress trial notwithstanding the absence of any significant probative evidence tending to support the complaint.

See also Aladdin Oil Co. v. Texaco, Inc., 603 F.2d 1107, 1110-12 (5th Cir. 1979). Like the district court, we must view the evidence in the light most favorable to the nonmoving party, giving that party the benefit of all reasonable inferences without assessing credibility. Only if the evidence is so one-sided that it leaves no room for any reasonable difference of opinion as to any material fact should the case be decided by the court as a matter of law rather than be submitted to the jury. See, e.g., Admiral Theatre Corp. v. Douglas Theatre Co., 585 F.2d 877, 883 (8th Cir. 1978).

“Vertical” Horizontal Restraint or “Horizontal” Vertical Agreement ?

This case presented the following question of law: after Continental T.V., Inc. v. GTE Sylvania, Inc., 433 U.S. 36, 97 S.Ct. 2549, 53 L.Ed.2d 568 (1977) (GTE Sylvania), is the per se

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673 F.2d 984, Counsel Stack Legal Research, https://law.counselstack.com/opinion/battle-v-lubrizol-corp-ca8-1982.