Marion Davis v. Marathon Oil Company

528 F.2d 395
CourtCourt of Appeals for the Sixth Circuit
DecidedFebruary 12, 1976
Docket75--1037
StatusPublished
Cited by53 cases

This text of 528 F.2d 395 (Marion Davis v. Marathon Oil Company) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Marion Davis v. Marathon Oil Company, 528 F.2d 395 (6th Cir. 1976).

Opinions

McCREE, Circuit Judge.

This appeal from an order granting Marathon Oil Company’s motion for judgment n. o. v. presents two questions for review: (1) whether the district court erred in holding that reasonable minds could not have found that Marathon Oil Company violated either section 1 of the Sherman Act,1 15 U.S.C. § 1, or section 3 of the Clayton Act, 15 U.S.C. § 14,2 in cancelling appellant’s service station lease, and, (2) whether the district court erred in refusing to permit the testimony of five witnesses “discovered” by appellant only three days before trial despite Marathon’s eight month old request for a list of all prospective witnesses. We hold that the district court did not err in entering judgment n. o. v., and that it did not abuse its discretion in refusing to admit the testimony of five witnesses disclosed to Marathon only three days before trial.

Marion Davis, plaintiff-appellant, commenced this action on December 29, 1971, in the United States District Court for the Northern District of Ohio. The complaint charged that Marathon had violated sections 1 and 2 of the Sherman Act and section 3 of the Clayton Act by, inter alia, “imposing] upon its hundreds of lessee-dealers exclusive dealing arrangements which required that the dealers secure their entire requirements of petroleum products and tires, batteries and other automobile accessories exclusively from the defendant . . . .”3

Nearly two years later, the case went to trial before a jury, and proofs were [398]*398submitted from September 24 until October 4, 1973. On September 21, Davis attempted to amend the list of his prospective witnesses that had already been submitted to Marathon by adding five witnesses — two Marathon dealers, his former employee, and two Marathon employees. Marathon moved to preclude the testimony of these additional witnesses and, after argument, the court granted the motion. At the conclusion of appellant’s case and again at the conclusion of all the proofs, Marathon moved for a directed verdict. The district court denied the motion. The case was thereupon submitted to the jury upon proper instructions, and it returned a verdict for Davis. Judgment on the verdict was entered on December 1, 1973.

Shortly thereafter, Marathon moved for a judgment n. o. v. or, in the alternative, for a new trial, and the district court entered an order granting the motion for judgment n. o. v., dismissing the action, and assessing costs against Davis. In its memorandum opinion, the district court stated that “there was not a scintilla of evidence” to support the jury’s verdict. It held, to the contrary, that the evidence demonstrated that Marathon did not require its service station lessees to purchase tires, batteries and accessories (TBA) as a condition of receiving gasoline or of retaining their leases; that Davis purchased TBA from whomever he pleased; and that Davis’ lease was terminated because he had been neglecting his service station to pursue other business interests with the consequence that the quality of services at the station deteriorated and it became unprofitable.

Appellant contends that the evidence was sufficient to permit reasonable persons to find that Marathon had impermissibly tied sales of gasoline to the lessee-operators of its service stations to sales of its TBA. Our examination of the record, however, demonstrates that although the complaint contained allegations of antitrust violations sufficient to withstand a motion to dismiss, appellant’s evidence would not permit a reasonable person to find that these allegations had been proved.

“Tying arrangements” have been defined as “agreements under which the vendor will sell one product only if the purchaser agrees to buy another product as well.” Advance Business Systems & Supply Co. v. SCM Corp., 415 F.2d 55, 60 (4th Cir. 1969), cert. denied, 397 U.S. 920, 90 S.Ct. 928, 25 L.Ed.2d 101 (1970). An illegal tie-in arrangement need not be expressed in a written contract, but the complainant must show that the seller would not make available to a purchaser one commodity unless the purchaser agrees to buy another. Advance Business Systems & Supply, supra; Lessig v. Tidewater Oil Co., 327 F.2d 459, 467-68 (9th Cir.), cert. denied, 377 U.S. 993, 84 S.Ct. 1920, 12 L.Ed.2d 1046 (1964); McElhenney v. Western Auto Supply Co., 269 F.2d 332, 338 (4th Cir. 1959).

A tie-in arrangement may violate either section 3 of the Clayton Act or section 1 of the Sherman Act. Times-Picayune Publishing Co. v. United States, 345 U.S. 594, 73 S.Ct. 872, 97 L.Ed. 1277 (1953); Advance Business Systems & Supply Co., supra. The standards of illegality under the two statutes are similar. The Clayton Act makes it unlawful for a person engaged in commerce to make a sale or contract for the sale of goods on the “condition, agreement, or understanding” that the “purchaser thereof shall not use or deal in the goods . . . of a competitor or competitors of the lessee or seller, where the effect of such . . . sale, or contract for sale or such condition, agreement or understanding may be to substantially lessen competition or tend to create a monopoly in any line of commerce.” 15 U.S.C. § 14. [Emphasis added.]

In Northern Pacific Ry. Co. v. United States, 356 U.S. 1, 6, 78 S.Ct. 514, 518, 2 L.Ed.2d 545 (1958) (footnote omitted), the Supreme Court stated a similar standard under the Sherman Act:

Indeed “tying agreements serve hardly any purpose beyond the sup[399]*399pression of competition.” Standard Oil Co. of California and Standard Stations v. United States, 337 U.S. 293, 305-306 [69 S.Ct. 1051, 1058, 93 L.Ed. 1371]. They deny competitors free access to the market for the tied product, not because the party imposing the tying requirements has a better product or a lower price but because of his power or leverage in another market. At the same time buyers are forced to forego their free choice between competing products. For these reasons “tying agreements fare harshly under the laws forbidding restraints of trade.” Times-Picayune Publishing Co. v. United States, 345 U.S. 594, 606 [73 S.Ct. 872, 879, 97 L.Ed. 1277].

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528 F.2d 395, Counsel Stack Legal Research, https://law.counselstack.com/opinion/marion-davis-v-marathon-oil-company-ca6-1976.