Computer Statistics, Inc. v. Blair

418 F. Supp. 1339, 1976 U.S. Dist. LEXIS 13432
CourtDistrict Court, S.D. Texas
DecidedAugust 31, 1976
Docket73-H-1727
StatusPublished
Cited by20 cases

This text of 418 F. Supp. 1339 (Computer Statistics, Inc. v. Blair) is published on Counsel Stack Legal Research, covering District Court, S.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Computer Statistics, Inc. v. Blair, 418 F. Supp. 1339, 1976 U.S. Dist. LEXIS 13432 (S.D. Tex. 1976).

Opinion

FINDINGS OF FACT AND CONCLUSIONS OF LAW

SINGLETON, District Judge.

Introduction

On December 20, 1973, plaintiff Computer Statistics, Inc. (hereinafter referred to as “CSI”) filed this antitrust action against Harry E. Blair, Jr. (hereinafter referred to as “Blair”), James 0. Davis (hereinafter referred to as “Davis”), and William Bloch (hereinafter referred to as “Bloch”) alleging that said defendants violated Section 2(c) of the Robinson-Patman Act 1 by engaging in commercial bribery of officers, employees, and agents of companies with whom Blair and Davis had engaged in data processing equipment transactions. Defendants have denied that they have engaged in commercial bribery, or that Section 2(c) prohibits the same. Defendants have also alleged that: (a) CSI’s claims are barred by the four-year statute of limitations; (b) CSI’s claims are barred by the doctrine of “tainted shares”; (c) CSI lacks standing because, unlike its former wholly-owned subsidiary Computer Properties, Inc. (hereinafter referred to as “CPI”), it was not engaged in buying, selling, or leasing data processing equipment; and (d) any damages suffered by CSI were not suffered “by reason of” defendants’ antitrust violations.

On April 19,1976, trial commenced before the court without a jury and continued for four weeks. Due to the factual complexity of the plaintiff’s case, this court has referred to the various transactions complained of by the number assigned to them on plaintiff’s exhibits 870 through 872, included herein as Appendix “A.” Those exhibits set out the eighteen (18) transactions made the basis of this action. For the reasons hereinafter stated, at the close of plaintiff’s evidence the court granted defendants’ 2 motion for judgment as to all transactions listed on Plaintiff’s Exhibit No. 870, transactions numbered 15, 16, and 17 on Plaintiff’s Exhibit No. 871, and transaction numbered 25 on Plaintiff’s Exhibit No. 872. As to transactions numbered 20, 22, 27, 23, and 26 on Plaintiff’s Exhibit No. 871 and transactions numbered 18, 19, and 21 on Plaintiff’s Exhibit No. 872, the court found at the close of plaintiff’s case that a *1343 prima facie case had been established and defendants should present evidence on such transactions. However, at the close of all the evidence, plaintiff elected to take a non-suit with regard to transactions numbered 22 and 27 on Plaintiff’s Exhibit No. 871.

At the conclusion of all the evidence, the court makes the following findings of fact and conclusions of law.

Findings of Fact

Plaintiff CSI, formerly known as Statistical Service Corporation (SSC), has been engaged in the service bureau business (performing data processing services for others on data processing machines owned or leased by it) in Houston, Texas, and Shreveport, Louisiana, since prior to 1963.

At all times relevant hereto, CSI purchased and leased from others and sold and leased to others IBM unit record equipment (which should be distinguished from computers), both in connection with its own service as an independent means of generating revenue — a natural extension of its service bureau business. The names in which such transactions were conducted varied. At times it leased and sold unit record equipment to its service bureau customers; at times it leased and sold such equipment to others. At times it purchased, leased, and sold unit record equipment through its wholly-owned subsidiary CPI (formerly known as “Statistical Properties Corporation”); at times it did so in its own name. Any distinctions between CSI and CPI are not of such a nature as to affect the outcome of this action. For all relevant purposes and at all times relevant hereto, Computer Properties, Inc., was the same entity as its parent corporation, Computer Statistics, Inc.

From 1964 through August, 1967, defendants Blair and Davis were, respectively, Chairman of the Board and President of CSI. Each owned from twenty percent (20%) to approximately twenty-five percent (25%) of the outstanding stock of CSI, were individually the largest stockholders, and together could and did control CSI’s business direction and activities. On August 24, 1967, each sold his stock in CSI to Arnold and Audrey Malkan, but not until September 29, 1967, were new directors elected. When Blair and Davis each sold his shares, all parties to the agreement contemplated that SSC would offer additional shares to the public; this offering was promptly undertaken, and it was completed and sold out on March 20, 1968. Community Life Insurance Company, the Malkans’ predecessor in interest, then owned approximately forty-four percent (44%) of CSI’s outstanding shares (including additional shares purchased from a number of shareholders other than Blair and Davis).

Furthermore, it is clear that at all relevant times, CSI was either in or prepared to be in the business of leasing, dealing in, or brokering unit record equipment. The principal evidence to the contrary was the testimony of defendant Davis, CSI’s President from April, 1963, until about September 29, 1967, whose actions and those of Clifford Johnson, a Vice President of CSI, in traveling around the country on behalf of CSI in search of opportunities to buy, lease, and sell unit record equipment belie their testimony.

While CSI on occasions purchased computers and leased them to others, CSI was not in the business of leasing or dealing in computers. Nevertheless, in late 1967 and early 1968, CSI was interested in finding attractive computer leasing or dealing opportunities, was prepared to grasp and capitalize on such opportunities, and, in fact, through CPI, purchased two UNIVAC computers for lease to others. CSI’s interest in computers at that time is further evidenced by statements in its prospectus at the time it went public on March 20,1968, and by the activities of its operating vice presidents, Clifford Johnson and Morris Lewis. Its ability to participate in such opportunities is evidenced by the facts that the computers which it did buy for lease to others were one hundred percent financed and that it raised gross funds of $700,000 in its public offering.

At various times since 1964, Blair and Davis, individually and jointly, bought and sold or leased computers and computer com *1344 ponents and peripherals. While payments were made by them to officers and employees of companies from whom they bought or to whom they sold and/or leased computers, in all instances save one, such payments were not a cause of competitive injury to CSI since CSI was not generally engaged in the business of leasing or dealing in computers. CSI’s contention that it should have been in that business is an issue in a state court suit involving the doctrine of misappropriation of corporate opportunity. The one instance where such a payment was a material cause of competitive injury to CSI is discussed infra as transaction numbered 27 on Plaintiff’s Exhibit No. 871.

Transaction No. 20, Plaintiff’s Exhibit No. 871. In early 1966, Blair purchased twenty-nine unit record machines (fourteen 026 key punches and fifteen 056 verifiers) from American National Life Insurance Company (hereinafter referred to as “ANI-CO”) for $25,000. Thomas J.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Bank of Santa Fe v. Petty
867 P.2d 431 (New Mexico Court of Appeals, 1993)
Baksinski v. Northwestern University
595 N.E.2d 1106 (Appellate Court of Illinois, 1992)
Environmental Tectonics v. W.S. Kirkpatrick, Inc.
847 F.2d 1052 (Third Circuit, 1988)
Tic-X-Press, Inc. v. Omni Promotions Co. of Georgia
815 F.2d 1407 (Eleventh Circuit, 1987)
Gregoris Motors v. Nissan Motor Corp. in USA
630 F. Supp. 902 (E.D. New York, 1986)
Haff v. Jewelmont Corp.
594 F. Supp. 1468 (N.D. California, 1984)
Burston v. Commonwealth of Virginia
595 F. Supp. 644 (E.D. Virginia, 1984)
Exhibitors' Service, Inc. v. American Multi-Cinema, Inc.
583 F. Supp. 1186 (C.D. California, 1984)
Municipality of Anchorage v. Hitachi Cable, Ltd.
547 F. Supp. 633 (D. Alaska, 1982)
Bunker Ramo Corp. v. Cywan
511 F. Supp. 531 (N.D. Illinois, 1981)
In Re Chicken Antitrust Litigation
560 F. Supp. 963 (N.D. Georgia, 1980)
Merchandise Nat'l Bk. of Chicago v. Scanlon
408 N.E.2d 248 (Appellate Court of Illinois, 1980)
In Re Armored Car Antitrust Litigation
472 F. Supp. 1357 (N.D. Georgia, 1979)
Chapman v. Pacific Telephone & Telegraph Co.
456 F. Supp. 77 (N.D. California, 1978)
Postow v. Oriental Building Ass'n
455 F. Supp. 781 (District of Columbia, 1978)

Cite This Page — Counsel Stack

Bluebook (online)
418 F. Supp. 1339, 1976 U.S. Dist. LEXIS 13432, Counsel Stack Legal Research, https://law.counselstack.com/opinion/computer-statistics-inc-v-blair-txsd-1976.