First Comics, Inc., and Cross-Appellee v. World Color Press, Inc., and Cross-Appellant

884 F.2d 1033, 1989 U.S. App. LEXIS 14066, 1989 WL 106700
CourtCourt of Appeals for the First Circuit
DecidedSeptember 19, 1989
Docket88-2731, 88-2745
StatusPublished
Cited by33 cases

This text of 884 F.2d 1033 (First Comics, Inc., and Cross-Appellee v. World Color Press, Inc., and Cross-Appellant) 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
First Comics, Inc., and Cross-Appellee v. World Color Press, Inc., and Cross-Appellant, 884 F.2d 1033, 1989 U.S. App. LEXIS 14066, 1989 WL 106700 (1st Cir. 1989).

Opinion

CUMMINGS, Circuit Judge.

Plaintiff First Comics, Inc. is a small Chicago-based enterprise that began seriously exploring entrance into comic-book publishing in February 1982. By June, First Comics had decided to proceed with plans to publish comic books and began negotiations with defendant World Color Press, Inc., a comic book printer. At this time, World Color Press was allegedly the only printer to use the letterpress method, 1 a less expensive process of printing comic books. As the largest comic book printer its customers included the largest publishers in the field, notably Marvel Comics Group and DC Comics. During the negotiations with World Color Press, First Comics apparently secured a promise that First Comics would receive the same price and treatment as enjoyed by the larger comic book publishers. Some time in August, First Comics agreed to have its comics printed at World Color Press.

World Color Press failed to live up to its promise to provide the same price and treatment to First Comics as it provided to its larger customers. First Comics, under the impression that the prices it was being charged were the same as the larger publishers that it was competing against, was actually being charged an average of 11.1 cents per copy, or 4.3 cents more per copy than Marvel Comics. 2 First Comics discovered the differing charges in January 1984 and demanded to be recompensed by World Color Press through refund or future credit. World Color Press refused, and in response First Comics switched to another printer, one that used the more expensive offset process since no other letterpress printer could be found.

First Comics then filed this suit, alleging that World Color Press violated the Robinson-Patman Act, 15 U.S.C. § 13(a), and *1035 alleging pendent state claims for violations of the Illinois Consumer Fraud and Deceptive Business Practices Act, Ill.Rev.Stat. ch. 121%, § 261, et seq., and common law fraud. The case, originally assigned to Judge Bua, was transferred to Judge Duff, who presided over the nineteen-day jury trial. The jury ultimately found for World Color Press on the Robinson-Patman and Illinois statutory claims, but found for First Comics on the fraud claim and assessed damages in the amount of $407,072. Judge Duff later reduced the damages award by $236,705.

A. Robinson-Patman Act

Section 2(a) of the Robinson-Patman Act, 15 U.S.C. § 13(a), makes it “unlawful for any person ... to discriminate in price between different purchasers of commodities .... ” As a jurisdictional matter, the Robinson-Patman Act only protects purchasers from discriminatory pricing of commodities. But what are commodities, and what happens when a challenged pricing scheme involves commodities and non-commodities? Unfortunately, the Act fails to answer these questions.

In Columbia Broadcasting System v. Amana Refrigeration, Inc., 295 F.2d 375, 378 (7th Cir.1961), certiorari denied, 369 U.S. 812, 82 S.Ct. 689, 7 L.Ed.2d 612 (1962), this Court, borrowing from § 3 of the Clayton Act (15 U.S.C. § 14), defined the term commodities as “goods, wares, merchandise, machinery or supplies.” Other courts have similarly tried to separate commodities from intangible goods or services. See, e.g., Tri-State Broadcasting Co. v. United Press Int'l, 369 F.2d 268, 270 n. 2 (5th Cir.1966) (distinguishing between tangible and intangible goods; news information); City of Gainesville v. Florida Power & Light, 488 F.Supp. 1258, 1281 (S.D.Fla.1980) (tangible and intangible goods; electricity); see also W. Patman, Complete Guide to the Robinson-Patman Act 33 (1963) (the Act covers pricing for “any movable or tangible thing”). 3

Because of the functional overlap, the distinction between goods and services is not always clear. Many transactions are of a hybrid nature, contemplating both goods and services; even the transfer of an intangible or service can rarely be accomplished without the incidental involvement of documents or other tangibles. To distinguish between goods and services the dominant nature of the transaction governs whether the activity is subject to the Act. 4 See Rowe, Price Discrimination Under the Robinson-Patman Act 60-61 (1962) (“price quotations fusing physical elements with dominant intangible factors cannot beget price discrimination in commodity sales”) (emphasis in original); Freeman v. Chicago Title & Trust Co., 505 F.2d 527, 531 (7th Cir.1974). In Freeman, the plaintiffs argued that as purchasers of title insurance, they were primarily interested in the title search report, a physical document, and not the underlying search or insurance. This Court rejected that argument, noting that “the reports, like legal memoranda, are merely the embodiment of that service. Clearly, it is the performance of this ser *1036 vice and not the delivery of the physical document which constitutes the dominant nature of the transaction....” Id.; Baum v. Investors Diversified Services, Inc., 409 F.2d 872, 875 (7th Cir.1969) (mutual fund shares not commodities); see also Columbia Broadcasting System v. Amana Refrigeration, Inc., 295 F.2d 375 (7th Cir.1961), certiorari denied, 369 U.S. 812, 82 S.Ct. 689, 7 L.Ed.2d 612 (1962) (sale of television advertising is a service); TriState Broadcasting Co. v. United Press Int’l, 369 F.2d 268 (5th Cir.1966) (news information provided by teletype is a service); Aviation Specialties, Inc. v. United Technologies, Corp., 568 F.2d 1186 (5th Cir.1978) (discrimination in sale prices for aircraft parts arising from repair contract not actionable because dominant nature of transaction was for repair work); Ideal Plumbing Co. v. Benco, Inc., 382 F.Supp. 1161 (W.D.Ark.1974), affirmed, 529 F.2d 972

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884 F.2d 1033, 1989 U.S. App. LEXIS 14066, 1989 WL 106700, Counsel Stack Legal Research, https://law.counselstack.com/opinion/first-comics-inc-and-cross-appellee-v-world-color-press-inc-and-ca1-1989.