Bohack Corp. v. Iowa Beef Processors, Inc.

715 F.2d 703, 1983 U.S. App. LEXIS 25242
CourtCourt of Appeals for the Second Circuit
DecidedAugust 2, 1983
DocketNos. 920, 1155, Dockets 82-7720, 82-7722
StatusPublished
Cited by55 cases

This text of 715 F.2d 703 (Bohack Corp. v. Iowa Beef Processors, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bohack Corp. v. Iowa Beef Processors, Inc., 715 F.2d 703, 1983 U.S. App. LEXIS 25242 (2d Cir. 1983).

Opinion

KEARSE, Circuit Judge:

Plaintiff The Bohack Corporation (“Bohack”) appeals from a final judgment of the United States District Court for the Eastern District of New York, following a jury trial before Jacob Mishler, Judge, dismissing its antitrust treble damage action against defendants Iowa Beef Processors Inc. (“IBP”) and Waldbaum, Inc. (“Waldbaum”), for allegedly granting and receiving, respectively, discriminatory prices in violation of §§ 2(a) and (f) of the Clayton Act, as amended by the Robinson-Patman Act, 15 U.S.C. § 13 (1976), and against all defendants for allegedly conspiring to violate the Robinson-Patman Act in violation of § 1 of the Sherman Act, 15 U.S.C. § 1 (1976). The district court dismissed the complaint after the jury answered special interrogatories finding that, although IBP had engaged in price discrimination in violation of the Robinson-Patman Act, the violation had not caused Bohack any injury. Bohack raises a number of claims of procedural error and argues that the jury’s finding that the violation did not cause injury was against the weight of the evidence. IBP cross-appeals from so much of the judgment as dismissed its counterclaim against Bohack on the ground that the counterclaim had been extinguished by bankruptcy proceedings resulting in a plan for the reorganization of Bohack. We affirm the judgment of the district court in all respects.

I. BACKGROUND

Bohack is a New York metropolitan area supermarket chain which, for a period during the 1970’s, purchased beef from IBP, a large meat processor. In early 1970, IBP had begun marketing its beef in New York by a new method which it called “Eastern Cattle-Pak.” This method used “boxed beef,” which denotes beef that has been deboned and trimmed at the point of slaughter, vacuum packed, and shipped in palletized boxes. Eastern Cattle-Pak products — which included four primal cuts of beef — were sold by IBP to retailers on a standing order basis, with prices to be determined not by negotiation but by a formula taking into account prevailing market prices, grades of beef, and IBP’s fees for its services in selection, processing, and shipping. IBP also sold, oh a negotiated basis, traditional carcasses and nearly 200 other meat products.

IBP had had no success with its CattlePak in New York until it entered into an arrangement with Waldbaum, another regional supermarket chain. In September 1970, IBP and Waldbaum agreed that Waldbaum would purchase beef from IBP exclusively, and that IBP would not raise its fees to Waldbaum. After other retailers commenced purchasing Eastern Cattle-Pak [706]*706in late 1971, IBP raised its fees to retailers other than Waldbaum. It did not raise the fees it charged Waldbaum, however, until June 1974.

In 1972, Bohack began purchasing boxed beef from IBP and other suppliers on a negotiated basis. It began purchasing IBP Eastern Cattle-Pak on a formula basis in July 1973 and continued such purchases until June 1974. In July 1974, Bohack, which had been financially troubled for a number of years, filed for Chapter XI relief under the Bankruptcy Act of 1898, 11 U.S.C. §§ 1-1103 (1976) (“Bankruptcy Act”), repealed by Bankruptcy Reform Act of 1978, Pub.L. No. 95-598, 92 Stat. 2529 (1978).1

The present action was commenced by Bohack in August 1977, contending that the preferential price treatment given Waldbaum by IBP violated §§ 2(a) and (f) of the Robinson-Patman Act2 and § 1 of the Sherman Act.3 Bohack contended that the discriminatory pricing had placed it at a competitive disadvantage vis-a-vis Waldbaum, causing it to lose sales, profits, and customers to Waldbaum. IBP, which had delivered beef to Bohack within ten days of Bohack’s filing under Chapter XI, counterclaimed under § 2-702(2) of the N.Y. Uniform Commercial Code (“N.Y.U.C.C.”)4 for reclamation.

A. The First Trial

Bohack’s antitrust claims were first tried before Judge Mishler and a jury in May 1981.5 IBP admitted that it had granted [707]*707Waldbaum special prices, but claimed, relying on Continental T.V., Inc. v. GTE Sylvania, Inc., 433 U.S. 36, 53 n. 22, 97 S.Ct. 2549, 2559 n. 22, 53 L.Ed.2d 568 (1977), that the price differential was economically justified as necessary to introduce its products into the New York market. It thus offered testimony that it had initially experienced great difficulty in marketing Cattle-Pak in New York because of butcher union opposition to handling pre-fabricated beef, boycotts during a 1969-70 strike at one of IBP’s plants, and the reluctance of meat buyers to accept new products.

Bohack sought to counter IBP’s economic necessity defense by showing that IBP had already ensured its entry into the New York market by bribing union officials. Although the district court refused to allow Bohack to introduce into evidence the 1974 state court convictions of IBP and its chairman for bribery, it did permit Bohack to introduce the facts underlying those convictions. Thus, Bohack presented evidence that, at the time IBP sought to enter the New York market, it conducted brokerage negotiations with one Moe Steinman, who claimed that he could get IBP into the New York market. During the negotiations with IBP over brokerage commission rates, Steinman allegedly demanded 50 cents per hundred-weight instead of 25 cents, claiming that he needed the additional amount in order to “take care of” certain supermarket buyers and union officials.

Bohack also presented the testimony of two accountants who opined that Bohack would have saved $868,000 if its purchases from IBP had been made, at the prices IBP charged Waldbaum, and a supermarket economist who concluded that as a result of the price discrimination Bohack had lost some $647,000 in profits. Witnesses for IBP disputed these conclusions and offered their views that Bohack’s lower profits were the results of other factors and not of IBP’s price discrimination.

The case was submitted to the jury on written questions. The jury found (1) that IBP and Waldbaum had violated the Robinson-Patman Act, (2) that there was no economic justification for the price advantage to Waldbaum, and (3) that none of the defendants had conspired to violate the Sherman Act. The jury failed, however, to reach a verdict on whether the price discrimination had caused injury to Bohack.

In light of the jury’s inability to reach a conclusion on the' causation and injury issues, Judge Mishler ordered that those issues be retried. Prior to the commencement of the retrial, he concluded that questions of violation, causation, and injury were very “close[ly] connected]” and that “insurmountable problems” would attend the presentation to a jury of issues as to causation and injury alone, and he therefore ordered that the retrial include all of the Robinson-Patman issues.

B. The Second Trial

The second trial commenced before Judge Mishler and a new jury in April 1982.

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Bluebook (online)
715 F.2d 703, 1983 U.S. App. LEXIS 25242, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bohack-corp-v-iowa-beef-processors-inc-ca2-1983.