Hasbrouck v. Texaco, Inc.

663 F.2d 930
CourtCourt of Appeals for the Ninth Circuit
DecidedDecember 14, 1981
DocketNo. 80-3160
StatusPublished
Cited by62 cases

This text of 663 F.2d 930 (Hasbrouck v. Texaco, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hasbrouck v. Texaco, Inc., 663 F.2d 930 (9th Cir. 1981).

Opinion

SNEED, Circuit Judge:

Eleven “independent” Texaco service station operators (appellants) charged their supplier, Texaco, Inc., (appellee), with price discrimination in violation of section 2(a) of the Robinson-Patman Act, 15 U.S.C. § 13(a). Treble damages were sought under section 4 of the Clayton Act, 15 U.S.C. § 15. The jury returned a verdict in appellants’ favor. The district court, concluding that the verdict had been infected by erroneous jury instructions, granted appellee’s motion for judgment notwithstanding the verdict (J.N. O.V.). We reverse and remand for a new trial. We affirm, however, as to two issues.

I.

FACTUAL AND PROCEDURAL BACKGROUND

Appellants’ grievances arise out of appellee’s gasoline pricing policy in the Spokane, Washington area during the years 1972-1979. While charging appellants uniform “Retailer Tankwagon” prices, appellee granted “distributor” discounts to two other area companies. Appellants alleged that, though nominally wholesalers, these companies increasingly became directly involved in retailing. Further, when they did not own the repurchasing outlet outright, these favored buyers allegedly passed on all or part, of the original price discount to the retailer. Injury to competition in the retail market is said to have resulted from this discriminatory pricing scheme.

Appellants requested and received jury instructions on proof of damages based on Fowler Manufacturing Co. v. Gorlick, 415 F.2d 1248 (9th Cir. 1969), cert. denied, 396 U.S. 1012, 90 S.Ct. 571, 24 L.Ed.2d 503 (1970). Fowler adopted the “automatic damages” rule in price discrimination cases, whereby minimum damages equal to the product of the illegal price differential times the quantity of plaintiff’s purchases can be inferred from proof of price discrimination alone. Relying on this inference, appellants chose not to introduce sufficient evidence from which a jury could estimate actual dollar losses resulting from diminished sales or narrowed profit margins. The jury apparently applied the Fowler rule as instructed.

Appellee moved for J.N.O.V. or a new trial. The court accepted appellee’s argument that the Fowler instructions were erroneous because Fowler either was distinguishable, had been overruled sub silentio, or was simply bad law. A preferred rule was found in cases requiring more rigorous proof of damages. See, e. g., Chrysler Credit Corp. v. J. Truett Payne, Inc., 607 F.2d 1133 (5th Cir. 1979), aff’d sub nom. J. Truett Payne Co. v. Chrysler Motors Corp., 451 U.S. 557, 101 S.Ct. 1923, 68 L.Ed.2d 442 (1981). Thus, because appellants had not met this higher standard of proof and admitted the extreme difficulty of meeting such a standard should Fowler not control, J.N.O.V. was granted. Numerous other grounds urged by appellee were rejected and the new trial alternative was conditionally denied. Appellant timely filed this appeal.

The Supreme Court affirmed J. Truett Payne during the pendency of this appeal. In doing so, the Court expressly rejected Fowler and the automatic damages theory. 101 S.Ct. at 1926-27 & 1927 n.2. Fowler clearly is no longer valid law in this circuit.

II.

THE EFFECT OF THE DEMISE OF FOWLER

J. Truett Payne confirms the trial court’s ultimate conclusion that the Fowler measure of damages should not be applied [933]*933in Robinson-Patman cases. That, however, does not dictate summary affirmance of the J.N.O.V. If Fowler was still valid and not properly distinguishable at the time of the ruling on the J.N.O.V. motion, it should have been applied. District courts are bound by the law of their own circuit. E. g., Bolf v. Berklich, 401 F.Supp. 74, 76 (D.Minn.1975). They are not to resolve splits between circuits no matter how egregiously in error they may feel their own circuit to be. United States ex rel. Winfield v. Cascles, 403 F.Supp. 956, 960 (E.D.N.Y.1975). To the extent the district court based its J.N.O.V. on its .own dissatisfaction with Fowler, it erred.

We do not feel that Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 97 S.Ct. 690, 50 L.Ed.2d 701 (1977), or the Ninth Circuit cases relied upon by appellee, e. g., California Computer Products, Inc. v. International Business Machines Corp., 613 F.2d 727 (9th Cir. 1979); Rutledge v. Electric Hose & Rubber Co., 511 F.2d 668 (9th Cir. 1975), necessarily overruled sub silentio Fowler.1 Nor do we feel that Fowler was clearly distinguishable. Thus, appellants’ reliance on Fowler at the time of trial was justified. Granting J.N.O.V. in appellee’s favor because of that reliance was an abuse of discretion. Further, the record does not support the contention that appellants admitted inability to prove damages under any rule but Fowler. Accordingly, the J.N. O. V. must fall and a new trial be ordered, this trial to conform with the analysis of J. Truett Payne, supra, 101 S.Ct. at 1926-28. This parallels the choice of the Seventh Circuit in a case nearly identical with this one. Vanco Beverages, Inc. v. Falls City Industries, Inc., 654 F.2d 1224, 1231 (7th Cir. 1981); see also Brunswick, supra, 429 U.S. at 483 n.6, 97 S.Ct. at 694 n.6.

III.

THE SCOPE OF THE NEW TRIAL

The only question remaining is the scope of the new trial. Courts of appeal have broad discretion to grant new trials on all or only some issues. Gasoline Products Co. v. Champlin Refining Co., 283 U.S. 494, 51 S.Ct. 513, 75 L.Ed. 1188 (1931); Heckman v. Federal Press Co., 587 F.2d 612 (3d Cir. 1978); see also United Air Lines, Inc. v. Wiener, 286 F.2d 302 (9th Cir.), cert. denied, 366 U.S. 924, 81 S.Ct. 1352, 6 L.Ed.2d 384 (1961) (reversing a bifurcation order). In fashioning their orders these courts must keep in mind that the item to be retried must be “so distinct and separable from the others that a trial of it alone may be had without injustice.” Gasoline Products, supra, 283 U.S. at 500, 51 S.Ct. at 515.

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