Gold Strike Stamp Company, a Utah Corporation v. A. Sherman Christensen, District Judge, B. Delos Gardner, Real Parties in Interest

436 F.2d 791, 14 Fed. R. Serv. 2d 1065
CourtCourt of Appeals for the Tenth Circuit
DecidedDecember 30, 1970
Docket411-70_1
StatusPublished
Cited by98 cases

This text of 436 F.2d 791 (Gold Strike Stamp Company, a Utah Corporation v. A. Sherman Christensen, District Judge, B. Delos Gardner, Real Parties in Interest) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gold Strike Stamp Company, a Utah Corporation v. A. Sherman Christensen, District Judge, B. Delos Gardner, Real Parties in Interest, 436 F.2d 791, 14 Fed. R. Serv. 2d 1065 (10th Cir. 1970).

Opinion

HILL, Circuit Judge.

Petitioner, Gold Strike Stamp Company, seeks a writ of mandamus from this court 1 staying an order issued by District Judge A. Sherman Christensen in the Central Division of the District of Utah in the case of Gardner v. Gold Strike Stamp Company. The order in question found that a class action was appropriate and called for a notice to be sent to all class members.

We have previously stated that “[wjrits of mandamus and prohibition are drastic and extraordinary remedies and should be used sparingly by appellate courts. When used against a trial court, there must be a clear showing of abuse of discretion by the trial court and the right to such relief must appear clear and undisputable.” Texas Gulf Sulphur Co. v. Ritter, 371 F.2d 145, 146-147 (10th Cir. 1967). 2 The question of *793 whether to allow a suit to proceed as a class action is one primarily for the determination of the trial judge. If he applies the correct criteria to the facts of the case, the decision should be considered to be within his discretion. City of New York v. International Pipe and Ceramics Corp., 410 F.2d 295, 298 (2d Cir. 1969). From the findings of fact made by Judge Christensen in his order of July 21, 1970, it is apparent that he did apply the correct criteria and his finding that the class action should proceed did not constitute an abuse of discretion. 3 In Esplin v. Hirschi, 402 F.2d 94 (10th Cir. 1968), cert. denied, 394 U.S. 928, 89 S.Ct. 1194, 22 L.Ed.2d 459, this court discussed the basic rules concerning class actions allowable under the newly amended Federal Rule of Civil Procedure 23 and in particular class actions allowable under 23(b) (3). In Hirsehi we held that a 10(b) (5) securities fraud case was suitable for class action even though there were individual questions of oral misrepresentations to each of the potential plaintiffs because “ * * * the real basis of their allegations concerns the failure of the defendants to make any representations concerning relevant and material facts, i. e., certain omissions of material facts common to all purchasers * * *. Consequently, there does exist as to the totality of issues a common nucleus of operative facts * * Id. at 99. The general law from the other Circuits concerning the application of newly amended Rule 23(b) (3) was reviewed and discussed and the critical test was set out to be “whether there is ‘material variation’ in elements like the representations made by the defendants * * upon which liability was based. Ibid. The court noted the superiority of class action procedures as opposed to intervention in a suit involving a large number of injured parties. It was stated that because of the great amount of control that the trial judge retains over *794 the class action suit, specifically with respect to modification allowed under 23(c) (4), if there was to be error on the part of allowing or disallowing a class action suit it should be on the side of allowing class actions to proceed. Ibid.

The instant suit involves allegations of various antitrust violations by Gold Strike Stamp Corporation in the initiation of and conduct of their trading stamp business in the State of Utah. 4 The plaintiffs, B. Delos, Vern, Lincoln, Darrel and Ken Gardner, and the class of injured parties they seek to represent are petroleum retailers, i. e., service station operators, within the State of Utah. They allege that the defendant corporation, Gold Strike Stamp, was set up and controlled by the retail food industry and has acted in concert with the retail food stores to monopolize the trading stamp business within the retail food industry in the State. Plaintiffs allege that since the retail food stores represent the majority of all retail sales, a large demand for defendant company’s trading stamps was created which forced the plaintiffs to take part in the trading stamp program and in particular with Gold Strike Stamp Company. It is further alleged that the retail food stores were sold a pad of 5,000 stamps from Gold Strike for approximately $8.00 whereas plaintiffs were charged $12.50 for the identical book of stamps.

There are four basic theories postulated by the plaintiffs as to Gold Strike’s violations of the antitrust laws. 5 Their first theory is that Gold Strike, by its practices and in conspiracy with its “favored” customers, the retail food industry, has restrained trade and has monopolized the trading stamp business 6 in violation of the provisions of § 1 and § 2 of the Sherman Act, 15 U.S.C. §§ 1, 2. See Northern P. R. Co. v. United States, 356 U.S. 1, 78 S.Ct. 514, 2 L.Ed.2d 545 (1958); Standard Oil Co. of New Jersey v. United States, 221 U.S. 1, 31 S.Ct. 502, 55 L.Ed. 619 (1911); United States v. Grinnell Corp., 384 U.S. 563, 86 S.Ct. 1698, 16 L.Ed.2d 778 (1966); United States v. Consolidated Laundries Corporation, 291 F.2d 563, 572-573 (2d Cir. 1961).

Plaintiffs’ second theory of violation is that they were required to enter into franchise agreements with Gold Strike, the provisions of which required the plaintiffs to deal with them to the exclusion of all other trading stamp companies, in violation of § 3 of the Clayton Act, 15 U.S.C. § 14. See Standard Oil Co. of California and Standard Stations v. United States, 337 U.S. 293, 69 S.Ct. 1051, 93 L.Ed. 1371 (1949), Tampa Electric Co. v. Nashville Coal Co., 365 U.S. 320, 81 S.Ct. 623, 5 L.Ed.2d 580 (1961).

Plaintiffs’ third theory of violation is that by selling the stamps to the retail food store industry at a lower price Gold Strike violated § 2 of the Robinson- *795 Patman Act 7 in that the price difference given to the two different classes had the tendency to or enabled Gold Strike to create a monopoly in the trading stamp business. In particular it was alleged that the price discrimination enabled Gold Strike to saturate the market creating an artificial demand for its stamps and thus enabling it to achieve or tend to achieve a monopoly position in the trading stamp business. See Van Camp & Sons Co. v. American Can Co., 278 U.S. 245, 49 S.Ct. 112, 73 L.Ed. 311 (1929); cf. Federal Trade Comm. v. Anheuser-Busch, Inc., 363 U.S.

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436 F.2d 791, 14 Fed. R. Serv. 2d 1065, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gold-strike-stamp-company-a-utah-corporation-v-a-sherman-christensen-ca10-1970.