Olsen v. Progressive Music Supply, Inc.

703 F.2d 432
CourtCourt of Appeals for the Tenth Circuit
DecidedMarch 8, 1983
DocketNos. 82-1357, 82-1400
StatusPublished
Cited by32 cases

This text of 703 F.2d 432 (Olsen v. Progressive Music Supply, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Olsen v. Progressive Music Supply, Inc., 703 F.2d 432 (10th Cir. 1983).

Opinion

WILLIAM E. DOYLE, Circuit Judge.

The plaintiff Olsen does business as Guitar City Studios, Inc., and he brings this action pursuant to Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 and 1px solid var(--green-border)">2, and Section 2(e) of the Clayton Act, 15 U.S.C. § 13(e).

Named as defendants in Olsen’s complaint and amended complaint are Progressive Music Supply, Inc.; Acoustic Control Corporation; Ovation Instruments, Inc. (a/k/a Kaman Corporation); Norlin Music, Inc. (formerly Chicago Musical Instrument Company); CBS Musical Instruments (a division of CBS, Inc.); ARP Instruments, Inc.; and Peavey Electronics Corporation.

The claims against ARP and CBS have been dismissed. Also, Judge Anderson, the trial judge, granted several of the defendants’ motions to dismiss on behalf of claims against Norlin, Ovation, Acoustic and Peavey. Olsen’s Section 2 Sherman Act claims against Progressive involving an attempt to monopolize and conspiracy to monopolize were also dismissed.

Finally, the court found that there were only two counts on behalf of the appellants which had merit. First, the court deter-; mined that Progressive had conspired to restrain trade in violation of Section 1 of the Sherman Act. The court, however, found that Olsen had suffered no injury as a result of this conspiracy, and so the court concluded that Olsen was not entitled to damages based on this conduct. Second, the court held that Progressive had violated Section 1 of the Sherman Act by conspiring to boycott Olsen from receiving CBS products. Damages were found to total $4,303, which, after trebling, amounted to $12,909.

I.

FACTUAL BACKGROUND

Olsen was and is engaged in the retail sale of musical instruments in the Salt Lake [435]*435City, Utah area. During the period commencing in 1964 and continuing to 1975, Olsen’s business was conducted under the name of “Guitars, Inc.,” a Utah corporation. One of the several people associated with Olsen in this venture was George Best. Until 1970, Olsen operated an outlet at Kaysville, Utah, and Best operated an outlet at Bountiful, Utah. Guitars, Inc. ordered instruments for both stores, paid half of the telephone bills of each store, and held the franchises in its name. The proceeds from sales by the stores were forwarded to Guitars, Inc. After the bills were paid, those proceeds were divided among Olsen, Best and a associate named Steven Hight.

During the year 1970 there was a disagreement between Olsen and Best, and they executed a separation agreement which essentially terminated all business relations between them, and then each began conducting his own business operation, essentially as sole proprietors of each store. Guitars, Inc. still served as a purchasing entity. Following this division, Best entered into a brokerage agreement with the defendant Progressive Music Supply, Inc., which is said to be one of the largest retail music instrument dealers in Utah.

In February of 1975, Olsen formed a new corporation, Guitar City Studios, Inc., and during the time leading up to that several changes were made in Olsen’s business. Prior to 1974, Olsen had operated his Kaysville store on a part-time basis. In 1974 he moved his location and commenced business full-time. Olsen had also added a repair service to his business.

Following the changes made in his business operations, Olsen’s sales increased dramatically. Prior to 1974 he sold about 7% of the volume that was sold by Progressive, the market leader in Utah. After changing his business to a full-time operation, Olsen’s sales rose, until in 1977, they were approximately 70% of Progressive’s sales.

After Best entered into the brokerage agreement with Progressive in 1971, Olsen maintained that he had difficulties in obtaining musical instruments from various manufacturers. The defendant manufacturers involved in the present litigation were willing to make Olsen a dealer, but later refused to sell to Olsen, due to commitments to Progressive. This is according to Olsen’s allegations. Olsen maintains that he was thus forced to obtain or bootleg instruments through other dealers at higher costs, and that this caused actual financial loss. As a result, in April of 1975, Olsen and Guitar City Studios, Inc., brought suit against Progressive and six manufacturers.

The case, based upon Section 1 of the Sherman Act, alleges that Progressive conspired separately and jointly with each manufacturer to fix prices, establish Progressive as each manufacturer’s exclusive dealer in the state of Utah, terminate Olsen’s dealing in each manufacturer’s products (except as against Peavey), and boycott Olsen’s business. A further complaint on behalf of Olsen was that Progressive conspired with certain unnamed co-conspirators, for example, George Best, CBS Musical Instruments (CBS) and Bobbie Herger (owner and operator of Herger’s Music Store in Provo, Utah), in violation of Section 1 of the Act. Olsen asserts that Progressive conspired with Best to cause Olsen to lose franchises, to destroy his credit and business reputation, to take over his business location and terminate his corporate charter, to fix prices, and to cause manufacturers to boycott his business. Further allegations by Olsen as against Progressive and CBS were that, with the help of Herger, they conspired to establish Progressive as CBS’s exclusive dealer for the state of Utah, to fix prices, to terminate Olsen as a CBS dealer, to boycott Olsen’s business and to cause CBS to require other dealers not to sell CBS products to Olsen. Olsen’s final allegation is that the defendants conspired together to boycott Olsen and to attempt to monopolize the Utah market in certain musical instruments.

II.

THE CLAIMS AGAINST NORLIN, OVATION AND PEAVEY

These named defendants are shown to be manufacturers of musical instruments. As [436]*436to Norlin, there were a total of sixteen charges of unfair practices and competition. As to Ovation, there were four such charges, and as to Peavey, there were three such charges. There was also a general allegation against Norlin, Ovation, Peavey and others that they had conspired together to boycott Olsen and had conspired to create a monopoly on behalf of Progressive. Following the presentation of the evidence, the defendants moved for dismissal based upon insufficiency of the evidence. The court said that Norlin had refused to deal with Olsen only as a business convenience, and not for any anti-competitive purpose. Also the trial court determined that Norlin had not committed the anti-competitive acts alleged by Olsen, and that Norlin treated Olsen and Progressive similarly.

As to Ovation, the court, upon weighing the evidence, concluded that Ovation had not violated any of the sections of the Sherman Act.

Finally, with respect to Peavey, the trial court weighed the evidence and the inferences to be drawn therefrom and reached the conclusion that Peavey had not conspired with any other defendant contrary to Section 1 of the Sherman Act. And, according to the court, Peavey had not conspired to fix prices or to create a monopoly on behalf of Progressive.

We conclude that the trial court was correct in making these rulings.

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703 F.2d 432, Counsel Stack Legal Research, https://law.counselstack.com/opinion/olsen-v-progressive-music-supply-inc-ca10-1983.