State Ex Rel. Douglas v. Associated Grocers of Nebraska Cooperative, Inc.

332 N.W.2d 690, 214 Neb. 79, 1983 Neb. LEXIS 1065
CourtNebraska Supreme Court
DecidedApril 21, 1983
Docket81-887
StatusPublished
Cited by27 cases

This text of 332 N.W.2d 690 (State Ex Rel. Douglas v. Associated Grocers of Nebraska Cooperative, Inc.) is published on Counsel Stack Legal Research, covering Nebraska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State Ex Rel. Douglas v. Associated Grocers of Nebraska Cooperative, Inc., 332 N.W.2d 690, 214 Neb. 79, 1983 Neb. LEXIS 1065 (Neb. 1983).

Opinion

McCown, J.

This is an antitrust proceeding by the State of Ne *80 braska against the defendants under the Nebraska Consumer. Protection Act, alleging conspiracy in illegal restraint of trade. The State sought injunctive relief, penalties, and damages. The District Court entered summary judgment in favor of defendants, dismissed plaintiff’s petition, and awarded attorney fees and expenses to defendants. The State has appealed.

The petition alleges a conspiracy and actions in restraint of trade and commerce with reference to the marketing of milk and dairy products in Scotts Bluff County, Nebraska, primarily in the cities of Scottsbluff, Mitchell, and Gering.

The defendant Associated Grocers of Nebraska Cooperative, Inc. (Associated), is engaged in the business of wholesale sales of grocery products, including milk and dairy products, to Nebraska retail grocers. The individual defendant Jess W. Wilson is the manager of dairy sales for Associated. The individual defendant James W. Thomas is general manager for Associated.

The defendant Gillette Dairy West, Inc. (Gillette), is a Nebraska corporation engaged in the operation of dairy facilities and wholesale sale of milk and dairy products to Nebraska retail grocers. The individual defendant Robert L. Simmon is the general manager for Gillette.

The defendant Alexander Supermarkets, Ltd. (Alexander), is a Nebraska corporation engaged in the business of retail sales of grocery items and dairy products, with stores located in Scottsbluff and Mitchell, Nebraska.

The individual defendant Glen Zemanek is the owner and operator of Alexander. Associated is a wholesale supplier of milk and dairy products to Alexander and Zemanek at the Scottsbluff store, and Gillette is a supplier of dairy products to Alexander and Zemanek at both the Scottsbluff and Mitchell stores.

The record consists of the pleadings, interroga *81 tories, depositions, and affidavits submitted and considered by the court on the motions for summary judgment.

In the latter part of 1980 Donald Reichert was the operator of Buy Rite Super, Inc., a retail grocery business in Mitchell, Nebraska. In addition to grocery products purchased from Associated, Reichert sold two brands of milk in his store. One was Gillette milk, which Reichert purchased from Ewing Distributing, and the other was Meadow Gold milk. Reichert sold one gallon of Meadow Gold 1 percent milk for $1.79. That price was considerably lower than other retail milk prices in the area and was used to draw customers to Reichert’s store.

According to Reichert’s testimony each of the individual defendants contacted him during the month of November 1980 in regard to his price for 1 percent milk. On November 18, 1980, defendant Wilson telephoned Reichert and requested him to raise his retail price for Meadow Gold 1 percent milk to $2.19 per gallon in order to get that price in line with other retail grocers in the area. Wilson denies telling Reichert that his prices were too low and testified that his suggestions were only to help Reichert with his cash flow.

On November 19, 1980, the defendant Zemanek, the owner-operator of Alexander, visited Reichert’s store. Reichert’s version is that Zemanek told Reichert he must raise his retail milk prices or Zemanek would reduce his prices to force Reichert out of business. Zemanek denies making any such statement, although he admits he was in Reichert’s store for a price check at that time.

On the same day, defendant Thomas, general manager of Associated, visited Reichert’s store. Reichert’s testimony was that Thomas asked him to raise his retail milk prices because Thomas was afraid that Zemanek would start a milk price war that would jeopardize Associated’s milk program. Thomas denies making any such statement.

*82 On November 19, 1980, the defendant Simmon of Gillette came to Reichert’s store and gave Reichert a retail milk price list. Reichert’s testimony was that Simmon indicated to Reichert that the price list represented the retail milk prices which Simmon and Zemanek wished Reichert to adopt at his store. Simmon denies telling Reichert that he should move his milk prices up.

Simmon also visited the store a second time in 1980, although the exact date is in dispute. Reichert states that Simmon told him that Simmon had talked to Zemanek and that if Reichert was willing to raise his retail prices, Zemanek would lead and Reichert could follow. Simmon testified that he told Reichert: “I’m surprised you weren’t up because I know Glen [Zemanek] would be if you were.”

The defendant Thomas also visited the Reichert store again on November 21, 1980. According to Reichert’s version of the conversation, Thomas told Reichert that if a milk price war came about as a result of Reichert’s low retail milk price, Reichert could be expelled from Associated. Thomas stated that he told Reichert that he could not be expelled for his pricing decisions but that he could be cut off if he did not pay for his groceries.

During the relevant time period here both Simmon and Wilson routinely monitored milk prices in the Scottsbluff area. When one retailer, usually the local Safeway store, changed its milk prices, Simmon and Wilson would prepare a retail price list showing that new price. These price lists were then disseminated to area grocery stores.

During the relevant time frame Zemanek requested Simmon to check Reichert’s milk prices to determine if they were low. Following the visits of both men to Reichert’s store, Zemanek discussed the situation with Simmon and the president of Gillette. Gillette offered Zemanek a generic milk in cardboard containers at the wholesale price of $1.47 per gallon. For 1 week Zemanek sold this milk for $1.49 *83 per gallon. Zemanek then raised his price to $1.79 per gallon.

In late November 1980 Reichert filed a complaint with the antitrust division of the Nebraska Department of Justice. The department investigated Reichert’s complaint, interviewed individuals, and took affidavits. On the basis of the investigation the State of Nebraska filed its petition in this action on December 29, 1980, alleging that the various defendants had entered into a conspiracy in restraint of trade and had attempted to monopolize and conspired to monopolize trade, and that the citizens of Nebraska were injured by the violations alleged.

Motions for summary judgment were filed on behalf of the defendants, and on the basis of the pleadings, depositions, affidavits, and interrogatories, and after submission of briefs and arguments of counsel, the District Court entered summary judgment in favor of each of the defendants and dismissed the plaintiff’s petition. The court later awarded attorney fees and expenses to the defendants as prevailing parties pursuant to Neb. Rev. Stat. § 59-1608 (Reissue 1978). The State has appealed.

The defendants contend that even if the State’s version of the facts be accepted as true, the evidence is insufficient to raise a jury issue on a charge of conspiracy in restraint of trade.

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Cite This Page — Counsel Stack

Bluebook (online)
332 N.W.2d 690, 214 Neb. 79, 1983 Neb. LEXIS 1065, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-douglas-v-associated-grocers-of-nebraska-cooperative-inc-neb-1983.