Mr. Furniture Warehouse, Inc. v. Barclays American/Commercial, Inc.

708 F. Supp. 331, 1988 U.S. Dist. LEXIS 16479, 1988 WL 151232
CourtDistrict Court, S.D. Florida
DecidedOctober 19, 1988
DocketNo. 87-0620-CIV
StatusPublished
Cited by1 cases

This text of 708 F. Supp. 331 (Mr. Furniture Warehouse, Inc. v. Barclays American/Commercial, Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mr. Furniture Warehouse, Inc. v. Barclays American/Commercial, Inc., 708 F. Supp. 331, 1988 U.S. Dist. LEXIS 16479, 1988 WL 151232 (S.D. Fla. 1988).

Opinion

ORDER GRANTING PARTIAL SUMMARY JUDGMENT

NESBITT, District Judge.

This cause is before the court on Defendants’ Omnibus Motion for Summary Judgment filed on May 27, 1988. After Plaintiffs’ responsive memorandum and Defendants’ reply memorandum were filed, the court heard arguments on the motion on September 27, 1988.

Facts

The plaintiff corporations (collectively referred to as “Mr. Furniture”) are Florida corporations engaged in the wholesale and retail furniture markets. Plaintiff Howard Cassett is president and majority shareholder of the Plaintiff corporations. Defendant Barclays American/Commercial, Inc. (“Barclays”) is a North Carolina corporation in the business of commercial factoring; defendant James Stenhouse is Unit Manager of Barclays’ Retail Credit and Collection Division.

Barclays’ business is, in simple terms, purchasing accounts receivable from furniture manufacturers and from manufacturers in other industries. Barclays competes with financial institutions and other factors such as First Union Commercial Corporation and Manufacturers Hanover in this field. As a matter of custom and practice, furniture manufacturers ordinarily do not extend their own credit to purchasers; rather, the factor with whom the manufacturer has a contract extends its credit and assumes the risk of non-payment. In return for assuming the credit risks, the factor is entitled to decide which customers are credit-worthy. Barclays entered into contracts with several furniture manufacturers providing that Barclays would be the sole factor for their accounts. Nothing in those contracts prohibits the manufacturers from extending their own credit to purchasers; they are simply prohibited from dealing with other financial institutions during the term of the contract (usually one year).

In February 1986, Plaintiffs filed a complaint in state court alleging defamation, intentional infliction of emotional distress, [332]*332and conspiracy to defame. The case was removed to this court in March 1987 and four months later, the court dismissed the count alleging intentional infliction of emotional distress. Plaintiffs allege that Bar-clays refused to factor any Mr. Furniture accounts for any of its client manufacturers because Stenhouse harbors personal animosity toward Cassett and his family. Plaintiffs also allege that Stenhouse and Barclays conspired to defame and defamed Mr. Furniture’s business reputation by telling furniture manufacturers that Mr. Furniture was not a good credit risk. Plaintiffs were forced to purchase merchandise with cash or not at all because credit was not available from those manufacturers who had contracts with Barclays.

In February 1988 the court permitted Plaintiffs to add two antitrust counts to their complaint. Count IV alleges that Barclays restrained trade in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1 (1982), and Count V alleges that Barclays obtained and exercised monopoly power in violation of Section 2 of the Act, 15 U.S.C. § 2. Plaintiffs contend that Barclays unreasonably restrained trade in refusing to extend credit to Mr. Furniture, and that Barclays so dominates factoring in the furniture market that it is able to decide which wholesalers and retailers will be able to purchase furniture on credit.

In their omnibus motion for summary judgment, Defendants moved for full or partial summary judgment on each remaining count of the complaint. After oral argument, the court granted Defendants’ motion as to the count alleging conspiracy to defame, denied the motion as to the defamation count, and deferred ruling on the antitrust claims. For the reasons stated below, the motion for summary judgment on both antitrust claims is granted.

Alleged Antitrust Violations

Plaintiffs’ Complaint and their Response to Defendants’ Omnibus Motion for Summary Judgment present a jumble of antitrust buzzwords and theories. Plaintiffs allege that Barclays’ conduct is equivalent to price-fixing, and is therefore a per se violation of the Sherman Act; that under a rule of reason analysis Barclays has violated the Act both through a “refusal to deal” and “exclusive dealing contracts”; that Barclays conspired with Stenhouse, its employee, to restrain trade; and that Barclays has willfully acquired and maintained monopoly power in the market Plaintiffs’ define as “the furniture factoring industry.” Defendants present numerous defenses that challenge the sufficiency of the facts alleged, such as the definition of the relevant market, and support the “reasonableness” of Barclays’ contract. It is clear that where factual disputes such as these exist, a motion for summary judgment must be denied. See Fed.R.Civ.P. 56(c). The court concludes as a matter of law, however, that Plaintiffs do not have standing to assert any of these alleged antitrust violations.

The problem Plaintiffs have in formulating their antitrust claim and attaching a “label” to it is that the alleged misconduct does not fit any familiar antitrust pattern at first glance. Antitrust law is a highly specialized area combining law, economics, and social policy, and has seemingly developed by application of hair-splitting distinctions. The cases have generated terms of art peculiar to antitrust law such as vertical and horizontal restraints of trade, tying arrangements, and refusals to deal. Under a traditional antitrust analysis, the facts of this case do not present any sort of horizontal relationship; at most, and construing Plaintiffs’ allegations liberally, the complaint alleges a vertical relationship between the parties, with Barclays distributing credit through furniture manufacturers to Mr. Furniture, the ultimate consumer of the credit.

Barclays argues that there are two non-overlapping markets involved here: the market for credit and the market for furniture. Defendants conclude that because Plaintiffs are in the furniture manufacture/distribution chain, they do not have standing to complain of antitrust violations in the unrelated market of credit. The court does not agree that there are two separate markets in this case, but finds that the competitive injury Mr. Furniture alleges is too remote from any possible antitrust violation to confer standing to sue on these plaintiffs.

[333]*333In the United States Supreme Court’s most recent pronouncement on the still-developing doctrine of antitrust standing, the Court noted the similarity between that concept and the proximate cause analysis in tort law. Associated General Contractors of Cal., Inc. v. California State Council of Carpenters, 459 U.S. 519, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983) (“Associated General”). The Court stated, “It is common ground that the judicial remedy cannot encompass every conceivable harm that can be traced to alleged wrongdoing.” Id. at 536, 103 S.Ct. at 907.

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708 F. Supp. 331, 1988 U.S. Dist. LEXIS 16479, 1988 WL 151232, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mr-furniture-warehouse-inc-v-barclays-americancommercial-inc-flsd-1988.