Sancap Abrasives Corp. v. Swiss Industrial Abrasives

19 F. App'x 181
CourtCourt of Appeals for the Sixth Circuit
DecidedAugust 16, 2001
DocketNo. 00-3010
StatusPublished
Cited by6 cases

This text of 19 F. App'x 181 (Sancap Abrasives Corp. v. Swiss Industrial Abrasives) 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
Sancap Abrasives Corp. v. Swiss Industrial Abrasives, 19 F. App'x 181 (6th Cir. 2001).

Opinion

CLAY, Circuit Judge.

Plaintiff, Sancap Abrasives Corporation (“Sancap” or “New Sancap”), appeals from the district court order awarding Defendants, Swiss Abrasives Marketing, Inc. (“SAM”), SIA Schweizer Schmirgel und Schleifindustrie AG (“SIA”), and C & S Agency, James Connelly, Connelly Inc., Edward Sikes, Sikes Inc. (collectively, “C & S Defendants” or “C & S”), summary judgment on Plaintiffs claims of conspiracy under Section 1 of the Sherman Act, 15 U.S.C. § 1, and Plaintiffs claims of tortious interference, promissory estoppel, and implied contract under Ohio law. We AFFIRM.

BACKGROUND

Plaintiff, located in Ohio, manufactured and distributed abrasives products throughout the United States. Defendant SIA is a Swiss manufacturer and worldwide seller of industrial abrasives products. Defendant SAM, an affiliate of SIA located in North Carolina, imports and sells SIA-brand products. The C & S Defendants, located in Virginia, serve as independent sales agents for abrasives products distributors.

The relationship between Plaintiff and SIA began in 1992, when Plaintiffs predecessor, Sancap Abrasives Incorporated (“Old Sancap”), contracted to serve as the exclusive distributor of SIA-brand products in the United States. After becoming SIA’s exclusive distributor, Old Sancap hired James Connelly and Ed Sikes as sales agents. Old Sancap also converted SIA raw materials, known as “jumbo rolls,” into finished products for sale to its customers.

In September of 1996, SIA notified Old Sancap of its decision to terminate the exclusive distributorship agreement, effective January 31, 1997. Although Old San-cap could still purchase SIA products for resale after that date, Old Sancap would make such purchases through SAM, and share in the distribution of SIA-brand products with other distributors. The purchases would be made on an order-by-order basis.

In early 1997, Robert Stuhlmiller, then-President of Old Sancap, informed Connolly and Sikes that Old Sancap had lost the exclusive distributorship agreement with SIA and would likely lose the SIA product line. At this time, Stuhlmiller asked Connolly and Sikes about them loyalty to Old Sancap. Connolly and Sikes responded that they were loyal to Old Sancap so long as Old Sancap retained the SIA product line or was able to find a suitable replacement for the SIA product line.

In response to the meeting with Stuhlmiller, Connolly and Sikes initiated a meeting with Klaus Hoeche, the president of SAM, in April of 1997. The parties dispute the nature of this meeting. The C & S Defendants contend that they wanted to be informed of the status of the SIA product line, which produced approximately 90% of their business. Plaintiff, in contrast, claims that this meeting commenced Defendants’ conspiracy to eliminate San-cap from the abrasives industry.

At the first meeting between C & S and Hoeche, Hoeche told C & S that Old San-cap would likely, or at least possibly, lose the SIA line. Sikes informed Hoeche that the livelihood of C & S depended on the SIA product line. Hoeche could not assure C & S as to Old Sancap’s continued access to the SIA product line.

In late 1997, SAM decided to set up its own converting operations in Charlotte, North Carolina, to enable SAM to produce [186]*186its own finished SIA abrasives products for the United States market. In November of 1997, Klaus Hoeche, the president of SAM, informed Robert Stuhlmiller, then-president of Old Sancap, of SAM’s decision to begin its own converting operations.

After the termination of the exclusive distributorship agreement, Old Sancap continued to convert and distribute SIA-brand products on an order-by-order basis. At about this time, a group of investors, led by Edward Spinelli, began making inquiries with regard to the possible purchase of Old Sancap. Spinelli met with Hoeche on March 2, 1998, to discuss the relationship between SAM and Old San-cap, which was of interest to the investors given that sales of SIA products constituted a significant portion of Old Sancap’s overall sales. Plaintiff contends that at this meeting, Hoeche assured Spinelli that the business relationship between SIA/ SAM and Sancap would continue as before, meaning that Sancap would continue to have access to the SIA product line.1

On March 28, 1998, Spinelli’s investment group purchased the assets of Old Sancap, forming New Sancap. Shortly after purchasing Old Sancap, Spinelli learned that SIA/SAM intended to establish its own converting facility in North Carolina. In April of 1998, Hoeche informed Spinelli that SIA/SAM had not yet made a final decision on whether to go ahead with the converting facility. In July of 1998, Hoeche informed Spinelli that SIA/SAM was definitely going ahead with the converting facility, and that as of October 1, 1998, SIA/SAM would “assume direct marketing and sales of the SIA line in ‘the south’, specifically in North Carolina, South Carolina, Virginia, Georgia, Alabama, Florida and Tennessee.” (J.A. at 687.)

Plaintiff contends that the SAM decision to assume distribution of the SIA product fine was in furtherance of Defendants’ conspiracy to eliminate Sancap from the abrasives industry. SAM responds that its decision arose from legitimate concerns over Sancap’s poor economic condition and performance.

After the July, 1998 meeting with Hoeche, Spinelli called the C & S Defendants to a meeting with Spinelli and other Sancap employees. At the meeting, San-cap offered the C & S Defendants the choice of remaining as sales agents for Sancap or following the SIA product line. The C & S Defendants chose to follow the SIA product line.

Sancap contends that the C & S Defendants decided to terminate their relationship with Sancap as part of Defendants’ conspiracy. In response, the C & S Defendants maintain that they simply wanted to continue selling SIA-brand products, which they had successfully sold for over forty years between them.

After leaving Sancap, the C & S Defendants began selling SIA products through another distributor, Sunbelt Abrasives, which SAM had selected to distribute SIA products in the southern region. In October of 1998, SAM began its conversion operations. In August of 1999, Sancap ceased operations after surrendering its assets to secured creditors, and subsequently filed for bankruptcy pursuant to Chapter 7 of the Bankruptcy Code in October of 1999.

Following discovery, Defendants filed motions for summary judgment on all of Plaintiffs claims. On September 28, 1999, [187]*187the district court granted summary judgment to each of the Defendants on all of Plaintiffs claims. Plaintiff appeals.

DISCUSSION

This Court reviews a district court’s grant of summary judgment de novo. Brooks v. American Broad. Cos., 932 F.2d 495, 500 (6th Cir.1991). If the pleadings, affidavits, and other submissions fail to show any genuine issue of material fact, the moving party is entitled to a judgment as a matter of law. Fed.R.Civ.P. 56(c). All evidence must be viewed in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp. .,

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19 F. App'x 181, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sancap-abrasives-corp-v-swiss-industrial-abrasives-ca6-2001.