Harlem River Consumers Cooperative, Inc. v. Associated Grocers of Harlem, Inc.

53 F.R.D. 691, 1971 U.S. Dist. LEXIS 11491, 1971 Trade Cas. (CCH) 73,711
CourtDistrict Court, S.D. New York
DecidedSeptember 27, 1971
DocketNo. 70-Civ. 4128
StatusPublished
Cited by1 cases

This text of 53 F.R.D. 691 (Harlem River Consumers Cooperative, Inc. v. Associated Grocers of Harlem, Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Harlem River Consumers Cooperative, Inc. v. Associated Grocers of Harlem, Inc., 53 F.R.D. 691, 1971 U.S. Dist. LEXIS 11491, 1971 Trade Cas. (CCH) 73,711 (S.D.N.Y. 1971).

Opinion

CROAKE, District Judge.

MEMORANDUM

Defendants, Associated Food Stores, Inc. (“Associated”) and Fedco Foods, Inc. (“Fedco”) brought on separate motions pursuant to Federal Rules of Civil Procedure 12(b) and 56 to dismiss plaintiff’s complaint or, in the alternative, to grant summary judgment to each. As both defendants have submitted “matters outside the pleadings” in support of their respective motions, the Court will consider, herein, both motions as calling for summary judgment. Fed. R.Civ.P. 12(b) (6); Klein v. Spear, Leeds & Kellogg, 306 F.Supp. 743 (S.D.N.Y.1969); Berne Street Enterprises, Inc. v. American Export Isbrandtsen Co., 289 F.Supp. 195 (S.D.N.Y.1968); Weitzen v. Kearns, 271 F.Supp. 616 (S.D.N.Y.1967). See generally 2A Moore, Fed.Practice ff 12.09 (2d ed. 1968).

These motions stem from a suit, commenced on September 23, 1970, sounding in antitrust. Plaintiff, Harlem River Consumers Cooperative, Inc. (“Harlem River”) asserts an illegal conspiracy in restraint of trade by approximately forty-five defendants, including the present moving parties, who, it is alleged, deal in marketing grocery and food products in the Harlem community area within the city of New York (as defined in plaintiff’s complaint, para. 19). In particular, plaintiff alleges violations of the Sherman Act §§ 1, 2 (15 U.S.C. §§ 1, 2) and the Clayton Act §§ 1, 2, 3 (15 U.S. C. §§ 12, 13, 14), as well as alleging tor-tious interference in restraint of trade under the doctrine of pendent jurisdiction. Judge Mansfield has given a thorough recital of the facts in his November 12, 1970 decision granting a preliminary injunction against so-called “core defendants.”

The controlling issue of the Associated motion is whether it has demonstrated conclusively that the facts alleged by plaintiff are “not susceptible” of an interpretation that might give rise to an inference of conspiracy. Adickes v. S. H. Kress & Co., 398 U.S. 144, 160, 90 First National Bank of Arizona v. Cities Service, 391 U.S. 253, 289, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968). The Court finds that defendant, Associated, has not met its burden.

For convenience of pleading, plaintiff categorized three types of defendants: Manufacturer-Distributors, Defendant-Competitors, and Core Defendants. Defendant, Associated, asserts that both fact and law establish that plaintiff had no basis upon which to identify Associated as a Defendant-Competitor. Associated contends that it is engaged in the wholesale distribution of food and therefore cannot be considered competitor to a store engaged in the sale of food at retail.

As Associated, itself, notes, “In the food business, both at the retail and wholesale levels, sales volume is the basis of successful operations. Without these independents, Associated Food Stores, Inc. would have no customers and, therefore, no outlet for its merchandise.” (Affidavit of Sol Chalek, April 12, 1971, para. 2). Associated argues that its foundation and success is predicated upon the successful competition of independents with corporate chains which presumably enforces the need for Associated’s product.

However, it does not follow that it would be against Associated’s best interest to stifle an independent retailer who, without the assistance of Associated, [693]*693could successfully compete with corporate chain stores. Plaintiff, Harlem River, a retail store independent of both corporate “chains” and the services of Associated, if successful, could cut into the volume of business formerly generated by competing stores serviced by Associated in and around the target area. This, in turn, would diminish outlets for Associated’s services. Thus, though it may not be a “retailer” itself, the economic relationship between Associated and the retail food industry of Harlem is necessarily tightly woven.

Associated also claims that two prior decisions by this Court establish by res judicata that Associated is not a competitor of Harlem River. The first, a two-sentence endorsement signed on December 1, 1970, alleviated an apparent technical difficulty in service of defendant, Associated; the second, a memorandum, signed May 21, 1971, corrected a prior endorsement on defendant Fedco’s motion to dismiss. Neither decision resolved the issue of Associated’s alleged standing as competitor. In fact, the memorandum of May 21, 1970 makes explicit that the action of December 1, 1970 was not upon the merits.

Whether or not Associated is a competitor of Harlem River is still a very real issue, which neither past decisions nor papers submitted in the present action put to rest.

Defendant, Associated, relies on Wald-ron v. British Petroleum Co., 38 F.R.D. 170 (S.D.N.Y.1965), aff’d, 361 F.2d 671 (2d Cir. 1966), aff’d, sub nom, First National Bank of Arizona v. Cities Service Co., 391 U.S. 253, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968), to represent the developing attitude of the Court, following the 1963 amendment to Fed.R.Civ.P. 56, to grant summary judgment in actions, including those predicated upon violations of the antitrust laws. Cf. Dressler v. MV Sandpiper, 331 F.2d 130, 132-133 (2d Cir. 1964) with United States v. United Scenic Artists Local 829, etc., 27 F.R.D. 499, 501-502 (S.D.N.Y.1961). See generally, 6 Moore, Federal Practice ff 56.15 [1.-02] (Supp.1970).

Waldron, supra, is an antitrust action, commenced in 1956, charging seven large oil companies, including Cities Service, with establishing a worldwide cartel and with conspiracy by boycott to frustrate plaintiff from taking advantage of his Iranian oil purchase agreement. The late Judge Herlands granted summary judgment to Cities Service after exhaustive pre-trial discovery extending over a period of more than four years demonstrated to a legal certainty that there was no “genuine issue of fact for trial.” In similar fashion, other cases noted by defendant, Associated, as granting summary judgment in antitrust litigation were decided only after some form of pre-trial discovery was permitted. Billy Baxter, Inc. v. Coca-Cola Company, 47 F.R.D. 345 (S.D.N.Y.1969), aff’d 431 F.2d 183 (2d Cir. 1970), cert. denied, 401 U.S. 923, 91 S.Ct. 877, 27 L.Ed.2d 826; Seago v. North Carolina Theatres, Inc., 42 F.R.D. 627 (E.D.N.C. 1966), aff’d 388 F.2d 987 (4th Cir. 1967), cert. denied, 390 U.S. 959, 88 S.Ct. 1039, 19 L.Ed.2d 1153 (1968).

The Court is mindful that complex antitrust litigation is fertile ground from which difficult factual issues often grow.

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53 F.R.D. 691, 1971 U.S. Dist. LEXIS 11491, 1971 Trade Cas. (CCH) 73,711, Counsel Stack Legal Research, https://law.counselstack.com/opinion/harlem-river-consumers-cooperative-inc-v-associated-grocers-of-harlem-nysd-1971.