Perington Wholesale, Inc. v. Burger King Corporation, Davmor Industries, Inc., and Carpenter Paper Co.

631 F.2d 1369
CourtCourt of Appeals for the Tenth Circuit
DecidedFebruary 20, 1980
Docket77-1877
StatusPublished
Cited by124 cases

This text of 631 F.2d 1369 (Perington Wholesale, Inc. v. Burger King Corporation, Davmor Industries, Inc., and Carpenter Paper Co.) 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
Perington Wholesale, Inc. v. Burger King Corporation, Davmor Industries, Inc., and Carpenter Paper Co., 631 F.2d 1369 (10th Cir. 1980).

Opinions

LOGAN, Circuit Judge.

This appeal arises out of a private antitrust suit brought by Perington Wholesale, Inc. (Perington), against Burger King Corporation (Burger King), Davmor Industries, Inc. (Davmor), and Carpenter Paper Company (Carpenter). Among other claims, Perington asserts that defendants conspired to restrain trade and conspired or attempted to monopolize in violation of the Sherman Act, 15 U.S.C. §§ 1, 2, and utilized a tying arrangement in violation of the Sherman Act, 15 U.S.C. § 1, and the Clayton Act, 15 U.S.C. § 14. Early in the proceedings the trial judge granted Carpenter’s Fed.R.Civ.P. 12(b)(6) motion to dismiss for failure to state a claim against it, finding the complaint insufficiently alleged Carpenter’s participation in a conspiracy. The judge later granted Burger King’s and Dav-mor’s Fed.R.Civ.P. 56(b) motion for partial summary judgment on the tying claims, and at the same time issued a final order dismissing the entire action, including any remaining Sherman and Clayton Act claims.1

Perington challenges on appeal the propriety of the judge’s disposition of the federal antitrust contentions, arguing that its complaint sufficiently stated claims for relief,2 and that summary judgment should not have been granted on the tying claims.

[1371]*1371The factual allegations in Perington’s complaint, as amended, which we assume to be true for purposes of considering the propriety of the dismissal for failure to state recognizable claims, are as follows. Pering-ton is engaged in the business of supplying food and nonfood products to restaurants in Colorado and Wyoming. Burger King both franchises and operates fast food restaurants in that ■ trade area and elsewhere. Perington entered into a contract with Dav-mor by which Davmor agreed to sell “paper products, promotional items, condiments and frozen foods” to Perington for distribution and resale to Burger King restaurants that chose to deal with Perington. Dav-mor, a wholly-owned subsidiary of Burger King, operated a nationwide commissary system for supplying Burger King restaurants with goods meeting Burger King quality standards. Although Davmor supplied directly restaurants in many areas of the country, it was unable to do so in Colorado. Perington’s services were therefore engaged to fill this void.

The agreement, as implemented by Dav-mor, required that any products bearing the Burger King trademark, service mark or private label (logoed products) sold by Per-ington be acquired from Davmor, which was the exclusive source of some logoed products and the prime, though not only, source of other such items. The agreement did not impose a similar requirement concerning nonlogoed products available from Davmor. The agreement was terminable by either party for any reason.

Thereafter, Perington bought from Dav-mor most of the logoed products it needed for resale, but filled its needs for logoed paper cups from a different supplier. This supplier, unnamed in the complaint, was authorized by Burger King to market paper cups bearing the logo. These were known as “Solo” brand cups; Davmor supplied “Sweetheart” cups.

Notwithstanding a letter from Davmor calling to Perington’s attention its breach of the exclusive supply provision, Perington continued to supply the restaurants with Solo brand cups, which it apparently acquired at a lower price than Davmor would sell Sweetheart cups. Davmor then can-celled the agreement, and Burger King wrote a letter to at least some of the restaurants notifying them that Perington had been terminated, giving reasons for the termination which Perington asserts were untrue and libelous. Thereafter, Carpenter became Davmor’s new distributor for paper products. Due to the termination of the agreement, Perington was unable to sell any products to Burger King restaurants. (Copies of the agreement, the cancellation letter and the Burger King letter to some of its franchisees or outlets were attached to the complaint).

I

Sufficiency of Complaint to Withstand Motion to Dismiss

The essential function of a complaint under modern pleading is twofold—to give opposing parties fair notice of the basis of the claim against them so they may respond to the complaint, and to apprise the court of sufficient allegations to allow it to conclude, if the allegations are proved, that the claimant has a legal right to relief. Thus, if an opposing party cannot formulate a responsive pleading because the factual allegations are too sparse, it is entitled to move for a more definite statement. Fed. [1372]*1372R.Civ.P. 12(e). On the other hand, the trial court must conclude “beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief” before the pleadings can be dismissed under Rule 12(b)(6). Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957).

A. Sufficiency to Give Fair Notice of Basis of, Claim

Perington’s original complaint made the conspiracy assertion in the following language: “Plaintiff is informed and believes, and upon information and belief alleges that defendants conspired to cancel [the agreement].” Davmor and Burger King answered, but Carpenter filed a Rule 12(b)(6) motion to dismiss, arguing that the allegation of its participation in the conspiracy was conclusory and therefore insufficient to state a claim for relief. The trial judge granted Carpenter’s motion and gave Pefington twenty days to amend the complaint in order to properly allege Carpenter’s participation.

The amended complaint, filed on July 18, 1975, contained an additional count, asserted “against Carpenter Paper Company, only.” Perington’s allegations in that count, again asserted upon information and belief, essentially restated the allegation of the original complaint; no substance was added.3

The trial judge then granted Carpenter’s renewed motion to dismiss on the ground that

[t]he Amendment to the Complaint does not specify in any manner the facts with respect to Carpenter’s conduct which would make it a part of that conspiracy or combination.
The Court also «observes that this action has been pending since November 26, 1974, when the Complaint was filed; that the granting of the Motion to Dismiss previously provided for an amendment; that the plaintiff has had an adequate opportunity to develop the facts, if there are any facts, to establish liability of this defendant, and has failed to do so.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
631 F.2d 1369, Counsel Stack Legal Research, https://law.counselstack.com/opinion/perington-wholesale-inc-v-burger-king-corporation-davmor-industries-ca10-1980.