Lynch Business MacHines, Inc. v. A.B. Dick Co.

594 F. Supp. 59, 1984 U.S. Dist. LEXIS 18073
CourtDistrict Court, N.D. Ohio
DecidedMarch 30, 1984
DocketC77-355A
StatusPublished
Cited by3 cases

This text of 594 F. Supp. 59 (Lynch Business MacHines, Inc. v. A.B. Dick Co.) is published on Counsel Stack Legal Research, covering District Court, N.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lynch Business MacHines, Inc. v. A.B. Dick Co., 594 F. Supp. 59, 1984 U.S. Dist. LEXIS 18073 (N.D. Ohio 1984).

Opinion

MEMORANDUM OF OPINION AND ORDER

KRENZLER, District Judge.

Plaintiff Lynch Business Machines, Inc. (Lynch) filed a complaint in this antitrust action on September 21,1977. Lynch alleges that defendant A.B. Dick Company (A.B. Dick) violated Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 and 1px solid var(--green-border)">2, and Section 7 of the Clayton Act, 15 U.S.C. § 18, in the events surrounding Lynch’s termination as an A.B. Dick dealer. Lynch also alleged a breach of contract. On November 16, 1978, A.B. Dick filed its answer and a counterclaim against Lynch. The counterclaim alleges that Lynch never tendered payment of $4,126.70 to A.B. Dick for products sold and delivered to Lynch. Lynch filed its - answer to the counterclaim on April 4, 1978.

Jurisdiction in this matter is based upon 28 U.S.C. §§ 1331 and 1332, and upon 15 U.S.C. § 15.

Pending before the Court is defendant A.B. Dick’s motion for summary judgment filed on December 7, 1982.

Fed.R.Civ.P. 56 provides in pertinent part:

A party against whom a claim, counterclaim, or cross-claim is asserted or a declaratory judgment is sought may, at any time, move with or without supporting affidavits for a summary judgment in his favor as to all or any part thereof.
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The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.

The pleadings, exhibits, depositions, and affidavits in- this matter provide the following undisputed facts.

Defendant A.B. Dick manufactures and sells office products, including various types of duplicating equipment. A.B. Dick distributes its products through a network of branch offices, dealers, and distributors. A.B. Dick’s branch offices sell A.B. Dick products to end users. A.B. Dick’s dealers operate under the branch offices and purchase A.B. Dick products as independent businesses and resell the products to end users. Dealers are not given exclusive territories. In areas where A.B. Dick has no branch office, A.B. Dick appoints distributors which are independent businesses operating in similar fashion to branch offices. A distributor has an exclusive territory to the extent that A.B. Dick agrees not to sell to any other person for wholesale distribution in the territory. A distributor may have dealers appointed under him. A dis *63 tributor purchases products from A.B. Dick at slightly lower prices than dealers.

In 1964, James K. Lynch, Jr., sole shareholder and president of Lynch, acquired the Canton A.B. Dick distributorship.

In 1966, the Akron distributorship terminated when its owner, Lloyd Thomas, retired. A.B. Dick purchased the inventory, accounts receivable, equipment, and unfulfilled contracts at the request of Mr. Thomas. Using these assets, A.B. Dick established an A.B. Dick branch office in Akron. This branch office has never had a separate corporate existence from A.B. Dick.

In 1967, at the request of A.B. Dick, the Lynch Canton distributorship was changed to a dealership, operating under the Akron branch. A.B. Dick’s internal documents show that between the years of 1969 and 1972 Lynch’s business declined. A.B. Dick was dissatisfied with Lynch’s performance and had communicated its concern to Lynch.

In 1971, A.B. Dick appointed two new dealers within the Canton territory. In addition, A.B. Dick assigned a salesman from the Akron branch office to sell offset equipment in the same area.

In June 1973, Mr. Lynch moved his A.B. Dick dealership into a farmhouse in a rural area so that it was no longer located in a commercial area. On June 26, 1973, representatives of A.B. Dick .personally notified Lynch that the dealership would be terminated effective September 24, 1973, and delivered a draft termination letter. Several days later, Mr. Lynch received a signed formal termination letter showing an effective termination date of September 25, 1973. The dealership terminated on that September date.

Although the courts have expressed a clear reluctance to dispose of antitrust litigation in motions for summary judgment, a motion for summary judgment may be granted if plaintiff has failed to provide some factual basis upon which the elements of an antitrust violation may be reasonably inferred. Smith v. Northern Michigan Hospitals, Inc., 703 F.2d 942, 948 (6th Cir.1983). The Sixth Circuit in Smith states that:

Once the defendant has adequately rebutted the plaintiff’s allegations by establishing legitimate alternative explanations for its conduct which disprove the inferences the plaintiffs seek to draw, then the plaintiffs must come forward with some “significant probative evidence tending to support the complaint.” First National Bank, 391 U.S. [253] at 290, 88 S.Ct. [1575] at 1593 [20 L.Ed.2d 569],

Id.

Consequently, if A.B. Dick establishes alternative explanations for its conduct which disprove the inferences of antitrust violations which Lynch seeks to draw, then Lynch must come forward with some, significant probative evidence to support its complaint. A.B. Dick contends that Lynch has failed to introduce any evidence of antitrust violations to rebut A.B. Dick’s evidence of legitimate alternative explanations for all the antitrust allegations against it.

There are four counts in the complaint against A.B. Dick.

COUNT I

Count I alleges that A.B. Dick’s actions in acquiring the Akron distributorship in 1966 and terminating Lynch’s dealership agreement in 1973 were part of a combination or conspiracy in restraint of trade in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1. Section 1 of the Sherman Act proscribes a “contract, combination ____or conspiracy, in restraint of trade or commerce____” 15 U.S.C. § 1. To establish a claim under Section 1, the plaintiff must establish that:

(1) the defendants contracted, combined or conspired among each other;

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Bluebook (online)
594 F. Supp. 59, 1984 U.S. Dist. LEXIS 18073, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lynch-business-machines-inc-v-ab-dick-co-ohnd-1984.