Glacier Optical, Inc. v. Optique Du Monde, Ltd.

816 F. Supp. 646, 1993 U.S. Dist. LEXIS 3303
CourtDistrict Court, D. Oregon
DecidedMarch 15, 1993
DocketCiv. 91-985-FR
StatusPublished
Cited by6 cases

This text of 816 F. Supp. 646 (Glacier Optical, Inc. v. Optique Du Monde, Ltd.) is published on Counsel Stack Legal Research, covering District Court, D. Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Glacier Optical, Inc. v. Optique Du Monde, Ltd., 816 F. Supp. 646, 1993 U.S. Dist. LEXIS 3303 (D. Or. 1993).

Opinion

OPINION

FRYE, District Judge:

The matters before the court are 1) defendants’ motion ■ for summary judgment (# 107); and 2) plaintiffs motion for partial summary judgment (# 114).

UNDISPUTED FACTS

Plaintiff, Glacier Optical, Inc. (Glacier), is a Washington corporation with its headquarters in Woodenville, Washington. Defendant Optique Du Monde (ODM) is a Delaware corporation with its headquarters in the State of New York. ODM transacts business in the State of Oregon. Defendant Safilo America, Inc. (Safilo America) is a holding company for the Safilo Group, an Italian company. Safilo America is a Delaware corporation which wholly owns Safilo USA. Safilo USA, which is not a defendant in this action, sells eyewear to optometrists, opticians and ophthalmologists. Safilo USA was and is a competitor of ODM.

Safilo America and ODM have a number of directors in common. The board of directors of Safilo America is responsible for the philosophy, image and future direction of the Safilo Group in the United States, including ODM. Safilo America maintains that it does not exert control over the management or operation of ODM.

ODM is a United States licensee for the manufacture and sale of eyeglass frames bearing the trademarks, Ralph Lauren and Polo. ODM sells Ralph Lauren/Polo eyew-ear to large retail optical chains, such as Pearle and Lenscrafters. ODM has more than twenty distributors in the United States. Glacier was a distributor for ODM until it was terminated.

*648 In April, 1987, Espe Buono, vice president for sales for ODM, met twice with representatives of Glacier in Seattle, Washington. During these two meetings, there was no discussion as to a specific volume of sales which the parties expected to be sold by Glacier. As a result of the meetings, Glacier began distributing Ralph Lauren/Polo eyew-ear, as well as other brands of eyewear which ODM distributes. Glacier and ODM did not enter into a written distribution agreement, however, in April, 1987, Glacier made sales primarily to optometrists, ophthalmologists, and retail opticians in the States of Oregon, Washington, Idaho, Alaska, Montana, and Utah. In April, 1987, ODM did not have adequate representation in the Northwest.

In late 1987, Glacier began selling eyewear to Costco, a “members only” warehouse sales organization.

In 1988, Safilo America bought ODM and acquired the licenses of ODM.

In March, 1989, there was a meeting which was attended by ODM, distributors of ODM products, and George Rich, a representative of Safilo America. The distributors of ODM products were concerned that Safilo America might start selling Ralph Lauren/Polo eyew-ear directly through Safilo USA and bypass them.

In the spring of 1990, Glacier began selling to Shopko, a department store chain with its headquarters in Green Bay, Wisconsin, and to Wal-Mart, a retailer with its headquarters in Bentonville, Arkansas. Costco, Shopko and Wal-Mart are not optometrists, ophthalmologists, or retail opticians.

Throughout 1990 and 1991, a substantial majority of the business of Glacier was conducted with Costco, Shopko and Wal-Mart.

ODM periodically distributes a suggested resale price list for Ralph Lauren/Polo eyew-ear. ODM does not require that its distributors adhere to the suggested resale price list.

ODM was aware that Glacier sold Ralph Lauren/Polo eyewear to Costco, Shopko and Wal-Mart, which are merchandisers who attempt to “undersell” their competitors. Some distributors of ODM eyewear, including Jack Hodes and Continental Eyewear (ODM’s wholly-owned subsidiary), as well as Ray Arndt, Target Optical, and Optical Sales, complained to ODM about its sales of Ralph Lauren/Polo products to volume discounters, such as Costco, Shopko and Wal-Mart.

ODM made its distributors aware of its policy that Ralph Lauren/Polo eyewear would not be sold to volume discounters and to other distributors. Herman T. Petersen, vice president of ODM, specifically told a non-complying distributor, Robert M. Press, that he could not sell to Ocu-Source, another distributor which gave a discount. Press stopped selling to Ocu-Source.

On June 15, 1990, Charles Schmall, president of ODM, wrote to all of ODM’s distributors. Schmall stated, in part:

Among other things, it is vital that our products be sold by responsible high quality retailers and that they be displayed in dignified, inviting premises. The image of the products is tarnished when they are sold to consumers by retailers whose interest is solely in turnover volume but not in long-term consumer satisfaction or brand loyalty. Discount houses and other cut rate outlets motivated only by a get-rich-quick philosophy are not retailers who can be expected to value or preserve that image. Our company’s firm policy is that sales to such retailers or outlets will not be tolerated.

Exhibit 13 to Plaintiffs Concise Statement of Facts, p. 1.

ODM reviewed the volume of the purchases of its distributors at various times in order to determine whether these distributors were selling to mass marketers or to warehouse outlets. ODM hired a private investigator to attempt to ascertain how Price Club, a volume distributor, was obtaining Ralph Lauren/Polo merchandise.

On February 26, 1991, ODM wrote to its distributors, including Glacier, and reminded these distributors of the policy of ODM against selling to discount stores and volume distributors and informing its distributors that ODM may not continue to do business with those distributors who violate its policy.

In June, 1991, ODM entered into a written distributorship agreement with each of its *649 distributors which allocated the territory of each distributor and limited the distributor’s sales to “optical stores.”

ODM offered to enter into the written distributorship agreement with Glacier. Glacier objected to numerous provisions in the proposed agreement, including 1) a term ending December, 1993 without a provision for renewal; 2) the provision that Glacier give up its largest customers (Costco and Wal-Mart); and 3) the refusal of ODM to permit Glacier to sell to retailers who deviate materially from the retail price structure which prevails among optometrists, ophthalmologists, and retail opticians.

A number of distributors wanted to meet with ODM. ODM arranged a meeting to be held on July 12, 13 and 14, 1991 in Chicago, Illinois. One of the items on the agenda for the three-day meeting was a discussion of “off price retailers/warehouse.”

On the morning of July 13, 1991, a distributor council was formed. Each regional group of distributors chose one person from its group to represent it on an “Inner Council.” Jack Hodes, a distributor who had complained about sales to volume discounters, was a member of the “Inner Council.” The purpose of the Inner Council was to facilitate communication between ODM and its distributors. Topics on the agenda for the Inner Council included buying groups, “off price” retailers, and discounts to retailers.

On August 28, 1991, ODM terminated the distributorship of Glacier in part because Glacier would not agree to the customer limitations in the proposed written agreement between ODM and Glacier.

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Bluebook (online)
816 F. Supp. 646, 1993 U.S. Dist. LEXIS 3303, Counsel Stack Legal Research, https://law.counselstack.com/opinion/glacier-optical-inc-v-optique-du-monde-ltd-ord-1993.