Roorda v. American Oil Co.

446 F. Supp. 939, 26 Fed. R. Serv. 2d 22
CourtDistrict Court, W.D. New York
DecidedFebruary 17, 1978
DocketCiv. 75-162
StatusPublished
Cited by13 cases

This text of 446 F. Supp. 939 (Roorda v. American Oil Co.) is published on Counsel Stack Legal Research, covering District Court, W.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Roorda v. American Oil Co., 446 F. Supp. 939, 26 Fed. R. Serv. 2d 22 (W.D.N.Y. 1978).

Opinion

MEMORANDUM and ORDER

ELFVIN, District Judge.

Defendant Petroleum Sales and Service, Inc. (“Petroleum”) moved by order to show cause for summary judgment pursuant to Fed.R.Civ.P. rule 56 dismissing plaintiffs’ complaint for lack of subject matter jurisdiction on the ground that such complaint fails to satisfy the jurisdictional requirement, set forth in section 2(a) of the Clayton Act as amended by the Robinson-Pat-man Act, 15 U.S.C. § 13(a), that either or any of the purchases involved in the alleged price discrimination be “in commerce”. Thereafter, plaintiffs moved for leave to amend their complaint to allege, in addition to their original claim bottomed on the Robinson-Patman Act, causes of action under section 1 of the Sherman Act, 15 U.S.C. § 1, and under section 3 of the Clayton Act, 15 U.S.C. § 14.

Initially, it should be noted that the jurisdictional requirement of the Robinson-Patman Act is considerably more stringent than that contained in the Sherman Antitrust Act, 15 U.S.C. §§ 1 et seq. Under the Sherman Act, the jurisdictional interstate commerce prerequisite may be satisfied by showing either that the transactions were interstate or, if they were intrastate, that such transactions had “effects on” or “affected” interstate commerce. On the other hand, it is clear that under the Robinson-Patman Act such tests are not sufficient to bring an otherwise purely intrastate sale within the realm of interstate commerce and that a plaintiff has the burden to show that the transactions in question were in interstate commerce. This does not mean, however, that such transactions must in all cases actually cross a state line for the intrastate sale to be considered in interstate commerce. The United States Supreme Court in Standard Oil Co. v. Federal Trade Commission, 340 U.S. 231, 71 S.Ct. 240, 95 L.Ed. 239 (1951), adopted a “flow of commerce” test to determine whether intrastate discriminatory sales were “in commerce” within the meaning of section 2(a) of the Clayton Act, as so amended. Therein, plaintiff obtained gasoline from fields in Kansas, Oklahoma, Texas and Wyoming, refined it in Indiana and distributed it in fourteen states, including Michigan. The gasoline which plaintiff sold in the Detroit area and which was involved in the alleged discriminatory sales was transported by tankers on the Great Lakes from its refinery in Indiana to its marine terminal in River Rouge, Michigan. Sufficient gasoline was accumulated there during each navigation season to supply plaintiff’s customers throughout the winter. The gasoline was stored for varying periods at the terminal or in nearby bulk storage tanks and throughout the temporary storage period was owned by plaintiff. Although plaintiff did not ship the gasoline to River Rouge pursuant to orders already taken, the demands of the Michigan market remained fairly constant and plaintiff could accurately estimate its customers’ needs. Upon receipt of individual orders, plaintiff would deliver gasoline to the Detroit area from that stored at its River Rouge terminal. Based upon these facts, the Court held that the alleged discriminatory sales of gasoline in the Detroit area were “well within the jurisdictional requirements of the Act.” *942 Id., at 237, 71 S.Ct. at 243. The court further stated (at page 238, 71 S.Ct. 240) that the temporary storage of the gasoline at the terminal facilities in Michigan did not deprive the gasoline of its interstate character.

Petroleum contends that the flow of commerce doctrine has been repudiated in Gulf Oil Corp. v. Copp Paving Co., 419 U.S. 186, 95 S.Ct. 392, 42 L.Ed.2d 378 (1974). This contention is not well taken. The United States Court of Appeals for the Second Circuit in Great Atl. & Pac. Tea Co., Inc. v. F. T. C., 557 F.2d 971 (2d Cir. 1977), did not find the Copp case to be any impediment to application of flow of commerce principles and relied upon such doctrine to find “in commerce” jurisdiction over intrastate sales of milk. The court stated (at page 979) that:

“[T]he only remaining question is whether the Illinois-based stores’ purchases from Borden were interstate transactions * * *. The Commission concluded that they were, inasmuch as Borden acquired most of its milk from Wisconsin and the raw milk was not substantially altered, chemically or otherwise, by processing at the Woodstock plant. We agree. Much as in Foremost Dairies v. FTC, 348 F.2d 674 (5th Cir.), cert. denied, 382 U.S. 959 [86 S.Ct. 435,15 L.Ed.2d 362] (1965), a prior price discrimination action also involving fluid milk, the milk here passed ‘in a steady flow from the farms in * * * [Wisconsin] through the * * * [Woodstock, Illinois] processing plant, where it underwent a rather negligible processing operation, which did not change its character appreciably, to the shelves of retail grocery establishments in * * * [the Chicago area].’ ”

Copp held that the alleged intrastate discriminatory sales of asphaltic concrete did not fall within the jurisdiction of section 2(a). The court based this conclusion on findings that the asphaltic concrete involved in such sales was made in California wholly from components produced and purchased within California and that due to its peculiar characteristics (its great weight, relatively low value and high temperature application restricted its use to within 35 miles from the hot plant where it was made), the market for asphaltic concrete was exclusively and necessarily within California. Based on these facts, the court concluded that “the alleged restraints of trade in asphaltic concrete could not be deemed within the flow of interstate commerce, despite use of the product in interstate highways.” Id., 419 U.S. at 192, 95 S.Ct. at 397. Thus, the court merely held that the asphaltic concrete was never in interstate commerce at any time and that its purely intrastate character precluded application of the flow of commerce theory. Such holding does not reject flow of commerce principles but, on the contrary, the court utilized such to test the jurisdictional basis of the action and found that flow of commerce did not apply on the facts before it. In addition, throughout the opinion, reference was made to the flow of commerce doctrine without any indication that its viability was being questioned or being rejected. The court (at page 195, 95 S.Ct. at page 398) specifically interpreted the “in commerce” language of section 2(a) of the Clayton Act as denoting “persons or activities within the flow of interstate commerce— the practical, economic continuity in the generation of goods and services for interstate markets and their transport and distribution to the consumer.” Furthermore, the court (at page 198, 95 S.Ct.

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Bluebook (online)
446 F. Supp. 939, 26 Fed. R. Serv. 2d 22, Counsel Stack Legal Research, https://law.counselstack.com/opinion/roorda-v-american-oil-co-nywd-1978.