Jays Foods, Inc. v. Frito-Lay, Inc.

664 F. Supp. 364, 1987 U.S. Dist. LEXIS 6130
District Court, N.D. Illinois·Decided June 29, 1987·No. 78 C 4352·Published·Cited by 21 cases

Opinion

MEMORANDUM AND ORDER

MORAN, District Judge.

Plaintiff Jays Foods, Inc. filed this action in 1978. It was primarily an antitrust case consisting of predatory pricing claims under section 2 of the Sherman Act, 15 U.S.C. § 2, and price discrimination claims under the Robinson-Patman Act, 15 U.S.C. § 13(a). Two successful summary judgment motions by the defendant, Frito-Lay, Inc., disposed of these federal antitrust claims. Jays Foods, Inc. v. Frito-Lay, Inc., 614 F.Supp. 1073 (N.D.Ill.1985) (no triable issue concerning Sherman Act claim), 635 F.Supp. 103 (N.D.Ill.1986) (motion for reconsideration denied), 656 F.Supp. 843 (N.D.Ill.1987) (no triable issue concerning Robinson-Patman Act claim). All that remains are Jays’ claims under the Illinois Consumer Fraud and Deceptive Business Practices Act (the “Consumer Fraud Act”), Ill.Rev.Stat. ch. 121% 1t 262 et seq., and the Illinois Deceptive Trade Practices Act, Ill.Rev.Stat. ch. 121% U 311 et seq., which have received scant attention until Frito-Lay filed this summary judg *366 ment motion shortly before trial. The trial date was vacated and Frito-Lay’s summary judgment motion is now granted.

REMAINING CLAIMS

Jays’ remaining claims relate to subparagraphs 20(f) and (k) of its amended complaint. In subparagraph 20(f) plaintiff alleges that Frito-Lay is

[ejngaging and continues to engage in advertising and promotional practices which are directly tied to retailer’s allocation of additional shelf space to Frito-Lay products to forestall market entry and lessen competition.

Subparagraph 20(k) charges Frito-Lay with

[illegally and improperly inducing store buyers and similarly situated personnel to give defendant additional shelf space, additional authorization for its products and/or excluding other competitors' products.

These allegations closely resemble the shelf space allegations in Jays' antitrust claims.

Jays intended to show at trial that Frito-Lay attempted to influence the allocation of retail shelf space by engaging in several unfair and deceptive practices. First, Jays would show that Frito-Lay urged retailers to allocate shelf space based on total snack food sales but it failed to use the shelf space it gained that way in a profit maximizing manner. For example, Frito-Lay devoted all newly gained space to its comparatively slow-selling regular potato chips. Second, Jays would show that Frito-Lay gained additional shelf space by presenting retailers with misleading and incomplete shelf space studies. For example, one such study, Frito-Lays' “mini-analysis,” examined only total sales of snack foods, ignoring other variables such as profits, inventory turnover, location and service. Jays also would show that Frito-Lay stacked its products at the front of retail shelves, leaving unused space behind (“dummying up"), and left more of its products in certain stores than sales justified, moving them to stores with higher inventory turnover only just in time to prevent them from going stale (“rolling stock”). Jays contends that these practices enabled Frito-Lay to occupy excessive shelf space at the expense of Frito-Lay’s competitors, such as Jays.

Third, Jays would show that Frito-Lay engaged in promotional programs directly tied to the allocation of additional shelf space, a practice that Jays characterizes as “buying space.” Finally, Jays would show that Frito-Lay took steps to skew sales when retailers were conducting shelf space tests to protect its shelf space allocations.

DISCUSSION

The course of events has somewhat skewed the present dispute. The final pretrial order was filed in 1982, after discovery had been closed. That order, which was to govern the issues to be tried and listed the witnesses and exhibits, largely ignored the state law claims. After the summary judgments on the antitrust claims this court determined that the two state law claims remained, a very small tail on what had been a large and now dead dog. We assumed, on the basis of what had been previously represented, that plaintiff might be claiming, for example, that it had been excluded from some supermarket or convenience store chain for a time or had its shelf space reduced by such an enterprise, all because of defendant's conduct and that plaintiff would point to reduced sales to those enterprises as a result. The issues would be, in those circumstances, factual and legal — whether there was conduct which led to provable loss of sales and whether that conduct was illegal, A trial of those remaining narrow issues was contemplated to be short, resulting in a final judgment which would permit appeal of the antitrust decisions.

Plaintiff now claims that the passage of time nullifies the restrictions of the final pretrial order. It seeks to introduce evidence of everything which has happened since discovery closed for the purpose of ascribing to defendant's shelf space conduct the claimed difference between plaintiff's value at the beginning of 1984 (based on the sales price of the company in 1986) and what the value could have been. The amounts claimed exceed those of the anti *367 trust claims. Defendant quite reasonably argues that plaintiff is seeking to litigate a new and different lawsuit about which there has been no discovery. We do not, however, reach that question because we conclude that the conduct of which plaintiff now complains does not create triable issues under Illinois law. Frito-Lay argues that the record shows there are no triable issues as to (1) the alleged violations of either of the two Illinois statutes Jays relies on; (2) the causation of Jays’ claimed injury; and (3) Jays’ theory of damages. Because Frito-Lay’s first argument is persuasive, there is no need to examine the others.

Jays devotes a surprising amount of attention to the Illinois Deceptive Trade Practices Act. Section 2 of the Act, Ill.Rev. Stat. ch. 121V2, 11312, lists the kinds of conduct covered in twelve subparagraphs. The first eleven subparagraphs apply to specific kinds of deceptive conduct, such as passing-off, trademark infringement and false advertising. None of those subparagraphs is at issue here. Jays relies on subparagraph 2(12), Ill.Rev.Stat. ch. 121V2, ¶ 312(12), which prohibits “conduct which similarly creates a likelihood of confusion or misunderstanding.” The only conduct by Frito-Lay that might fit within that sub-paragraph is its alleged use of misleading shelf space studies, or perhaps its efforts to skew retailers’ own shelf space studies. Because the Deceptive Trade Practices Act only applies to false or misleading conduct concerning goods or services, it does not apply to Frito-Lay’s other non-deceptive conduct. See Steinberg v. Chicago Medical School, 69 Ill.2d 320, 328, 13 Ill.Dec. 699, 703, 371 N.E.2d 634, 638 (1977); Ill. Rev.Stat. ch. 121½, ¶ 311 Prefatory Illinois Notes (the Act deals with “false, concealing, or deceptive trade identification, and false, confusing, or deceptive representations as to the source or origin of goods.”).

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Jays Foods, Inc. v. Frito-Lay, Inc., 664 F. Supp. 364, 1987 U.S. Dist. LEXIS 6130 (N.D. Ill. 1987).

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