Caribe Bmw, Inc. v. Bayerische Motoren Werke Aktiengesellschaft

19 F.3d 745, 1994 U.S. App. LEXIS 6057, 1994 WL 87779
CourtCourt of Appeals for the First Circuit
DecidedMarch 25, 1994
Docket93-1653
StatusPublished
Cited by42 cases

This text of 19 F.3d 745 (Caribe Bmw, Inc. v. Bayerische Motoren Werke Aktiengesellschaft) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Caribe Bmw, Inc. v. Bayerische Motoren Werke Aktiengesellschaft, 19 F.3d 745, 1994 U.S. App. LEXIS 6057, 1994 WL 87779 (1st Cir. 1994).

Opinion

BREYER, Chief Judge.

This appeal raises two issues of antitrust law. First, do a firm’s wholly owned subsidiary and the firm itself amount to a “single seller” under the Robinson-Patman Act? 15 U.S.C. § 13. Second, can a retailer’s lost profit, brought about by a maximum resale price fixing agreement between that retailer and its' supplier, amount to an “antitrust injury,” thereby giving that retañer “standing” to obtain treble damages? Atlantic Richfield Co. v. USA Petroleum Co. (“ARCO”), 495 U.S. 328, 110 S.Ct. 1884, 109 L.Ed.2d 333 (1990); Albrecht v. Herald Co., 390 U.S. 145, 88 S.Ct. 869, 19 L.Ed.2d 998 (1968). We answer both these questions in the affirmative. Because the district court’s dismissal of the plaintiffs complaint rested upon negative answers to the same questions, we set its dismissal aside.

I

Background

From 1981 through 1990, Caribe BMW, Inc. (“Caribe”), through contracts with the German BMW manufacturer, Bayerische Motoren Werke Aktiengesellsehaft (“BMW AG”), bought BMW automobües from BMW AG in Germany, imported them into Puerto Rico, and sold them at retaü. In February 1991, Caribe (the appellant here) brought this lawsuit against (the appellees) BMW AG and BMW’s wholly owned North American subsidiary, BMW of North America, Inc. (“BMW NA”). Caribe’s complaint (actuaUy, its second amended complaint), with commendable simplicity, listed four counts.

*748 Count I charged a violation of the Robinson-Patman Act. 15 U.S.C. § 13. It said that BMW AG sold cars to BMW NA, which resold those cars to other retailers who competed with Caribe, at prices lower than, or on terms more favorable than, those at which BMW AG sold similar cars to Caribe., Count II charged a violation of § 1 of the Sherman Act. 15 U.S.C. § 1. It said that BMW AG had set maximum resale prices for the cars that it sold to Caribe by “threaten[ing] to terminate Caribe’s contracts” unless Caribe would agree, in effect, to maintain low resale prices. Count III charged “breach of contract.” It listed various ways in which BMW AG had allegedly broken its word. Count IV charged that, in terminating its contract with Caribe, BMW AG had violated Puerto Rico’s Dealers’ Contracts Act, more familiarly known as Act 75. P.R.Laws Ann. tit. 10, § 278 et seq.

The district court dismissed the complaint for two related reasons. First, it found that the complaint’s two antitrust counts “fail[ed] to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). Second, it noted that a forum selection clause in the contracts between Caribe and BMW AG provided for “exclusive jurisdiction” in “Germany” to resolve “disputes” about the “termination of’ or “rights and duties arising out of’ the agreement. It found this clause applicable to the remaining (non-antitrust) claims, and it dismissed those claims “for improper venue” or, in the alternative, “on grounds of forum non conveniens.” Caribe BMW, Inc. v. Bayerische Motaren Werke Aktiengesellschaft, 821 F.Supp. 802 (D.P.R.1998). Caribe appeals.

When reviewing the dismissal of the antitrust claims we take the facts basically as stated in the complaint and make reasonable inferences that will help the plaintiff. Garita Hotel Ltd. Partnership v. Ponce Fed. Bank, F.S.B., 958 F.2d 15, 17 (1st Cir.1992). After examining those facts, in light of the relevant law, we conclude that the district court should not have dismissed the antitrust claims. And, that conclusion requires the district court to reexamine dismissal of the other claims as well.

II

The Robinson-Patman Act Claim

The Robinson-Patman Act forbids “any person

to discriminate in price between different purchasers of commodities of like grade and quality ... where the effect of such discrimination may be ... to injure ... competition with any person who ... grants ... the ... discrimination, or with [that granting person’s] customers....

15 U.S.C. § 13(a). Caribe’s complaint alleges most of the essentials of a violation. It says that a “person ” has “discriminate^] in price between different purchasers” (namely, Caribe and other retailers in competition with Caribe) of cars, with the effect that “competition with” that person’s, “customer” (namely, Caribe) is “injure[d].” See FTC v. Morton Salt Co., 334 U.S. 37, 45, 68 S.Ct. 822, 827-28, 92 L.Ed. 1196 (1948). But, it embodies an ambiguity in respect to the “person” who did the discriminating. It says that BMW AG sold cars directly to Caribe, which resold them at retail. It then says that BMW NA sold cars to other retailers, who compete with Caribe, at lower prices than BMW AG sold its cars to Caribe. At this point, there appear to be two “persons” selling BMWs to retailers, namely, BMW AG (selling them to Caribe) and BMW NA (selling them to Caribe’s competitors). The complaint adds, however, that BMW NA is the wholly owned subsidiary of BMW AG. Thus, we must face the legal question of whether or not this last mentioned fact is sufficient to make of the two separately incorporated companies a single “person” for Robinson-Patman Act purposes. If so, the complaint properly alleges that a single “person” has sold similar goods at two different prices (allegedly with the required statutory effect). If not, there may be no “person” who has “discriminate^].” See id. (“discrimination” requires at least two sales by a single person at different prices to different customers in competition with each other); see also Phillip Areeda & Louis Kaplow, Antitrust Analysis ¶ 601(c) (4th ed. 1988); 3 Earl W. Kintner & Joseph P. Bauer, Federal Antitrust Law § 21.11, at 192-93 (1983).

*749 So far, when courts have faced this question — whether or not a firm and its subsidiary amount to a single “person” (or a “single seller”) — they have answered it by examining the extent of common ownership and the degree of control over pricing and distribution policies that the one exercises over the other. See Acme Refrigeration of Baton Rouge, Inc. v. Whirlpool Corp., 785 F.2d 1240, 1243 (5th Cir.) (100% ownership, without control, not enough to create a “single seller”), cert. denied, 479 U.S. 848, 107 S.Ct. 171, 93 L.Ed.2d 108 (1986); Island Tobacco Co. v. R.J. Reynolds Indus., Inc.,

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Bluebook (online)
19 F.3d 745, 1994 U.S. App. LEXIS 6057, 1994 WL 87779, Counsel Stack Legal Research, https://law.counselstack.com/opinion/caribe-bmw-inc-v-bayerische-motoren-werke-aktiengesellschaft-ca1-1994.