STELWAGON MANUFACTURING COMPANY, Appellee, v. TARMAC ROOFING SYSTEMS, INC., Appellant

63 F.3d 1267, 1995 U.S. App. LEXIS 27721, 1995 WL 501426
CourtCourt of Appeals for the Third Circuit
DecidedSeptember 27, 1995
Docket94-2004
StatusPublished
Cited by134 cases

This text of 63 F.3d 1267 (STELWAGON MANUFACTURING COMPANY, Appellee, v. TARMAC ROOFING SYSTEMS, INC., Appellant) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
STELWAGON MANUFACTURING COMPANY, Appellee, v. TARMAC ROOFING SYSTEMS, INC., Appellant, 63 F.3d 1267, 1995 U.S. App. LEXIS 27721, 1995 WL 501426 (3d Cir. 1995).

Opinions

OPINION OF THE COURT

LEWIS, Circuit Judge.

Appellant Tarmac Roofing Systems, Inc., (“Tarmac”) appeals a $1,423,392.50 judgment entered after a jury trial in the United States District Court for the Eastern District of Pennsylvania on appellee Stelwagon Manufacturing Company’s (“Stelwagon”) secondary line price discrimination and state breach of contract claims.1 Specifically, the jury found that Tarmac had discriminated against Stelwagon on the basis of price in violation of section 2(a) of the Clayton Act (commonly referred to as the Robinson-Patman Price Discrimination Act), 15 U.S.C. § 13(a) (1982),2 and, accordingly, that Stelwagon was entitled to recover treble damages pursuant to section 4 of the Clayton Act, 15 U.S.C. § 15(a).3 The jury also determined that Tarmac breached an oral, exclusive distributorship agreement with Stelwagon. Although we believe that Stelwagon established a pri-ma facie violation of the Robinson-Patman Act, we believe it failed to present sufficient proof of actual antitrust damages and is, therefore, precluded from recovering damages under the Clayton Act. Accordingly, we will vacate the district court’s judgment insofar as it awards Stelwagon treble damages under section 4 of the Clayton Act. We will, however, affirm with respect to the breach of contract claim because we believe the district court correctly concluded that the contract claim was not barred by the Statute of Frauds.

I. BACKGROUND

Stelwagon is' a wholesale distributor of roofing, siding and related construction materials. Its principal customer base consists of [1270]*1270small to medium-sized roofing contractors located in the Philadelphia, Pennsylvania, area. In early 1988, Stelwagon entered into an oral, exclusive distributorship agreement with Tarmac, a Wilmington, Delaware-based manufacturer of modified asphalt products (“MAPs”).4 Under the agreement, Tarmac agreed not to sell its MAPs to any other distributors in the Philadelphia area except for Roofer’s Mart, Inc., a pre-existing distributor.5 In return, Stelwagon promised to promote and develop a market for Tarmac MAPs.

In 1988, Stelwagon began actively promoting Tarmac MAPs as agreed. In order to build a demand for Tarmac’s products, Stel-wagon refrained from acquiring any new lines of MAPs, and ceased aggressive marketing of its other, non-Tarmae MAPs. Stel-wagon sold Tarmac MAPs without incident in the relationship until early 1989, when Stel-wagon became aware of sales made to several of its competitors in violation of the agreement.6 At around the same time, Stelwagon also learned that Tarmac was selling MAPs to two competitors — Standard Roofing Company (“Standard”) and Celotex Corporation (“Celotex”) — at preferential prices. Stelwag-on first complained to Tarmac about these sales, and eventually brought this action in February 1992.

At the close of Stelwagon’s ease, and again at the close of all evidence, Tarmac moved for judgment as a matter of law. Both of these motions were denied and the case was submitted to the jury, which rendered a verdict in Stelwagon’s favor on both the price discrimination and breach of contract claims, and awarded damages in the amount of $2,272,000.7 The district court trebled the antitrust damages under section 4 of the Clayton Act, and entered judgment for Stel-wagon in the amount of $8,816,000. Tarmac renewed its motion for judgment as a matter of law and, alternatively, for a new trial. The district court denied the motions, but granted Tarmac’s request for a remittitur based on a finding that “the damages awarded by the jury in this ease are unsupported by the evidence and are grossly excessive.” Stelwagon Manufacturing Company v. Tarmac Roofing Systems, Inc., 862 F.Supp. 1361, 1369 (E.D.Pa.1994). The district court reduced the damages award for breach of contract to $74,242, and likewise reduced the antitrust damages to $450,383.60. After trebling the Robinson-Patman damages, the district court entered judgment for Stelwag-on in the amount of $1,423,392.50. This appeal followed. We have jurisdiction under 28 U.S.C. § 1291.

On appeal, Tarmac challenges the district court’s denial of its post-trial motions. Specifically, Tarmac claims that the judgment should be reversed because Stelwagon failed to present sufficient evidence to (1) establish a prima facie Robinson-Patman violation; (2) prove actual antitrust injury; and (3) support the award of damages under the Clayton Act. Tarmac also argues that Stelwagon’s breach of contract claim is barred by the statute of frauds.8 Our review of the district court’s denial of Tarmac’s motion for [1271]*1271judgment as a matter of law is plenary. Intermilo, Inc. v. I.P. Enterprises, Inc., 19 F.3d 890 (3d Cir.1994). The legal foundation for the factfinder’s verdict is reviewed de novo while the factual findings are reviewed to “determine whether the evidence and justifiable inferences most favorable to the prevailing party afford any rational basis for the verdict.” Id., quoting Bhaya v. Westinghouse Elec. Corp., 832 F.2d 258, 259 (3d Cir.1987).

II. THE ROBINSON-PATMAN CLAIM

By its terms, the Robinson-Patman Act is a prophylactic statute and does not require that the alleged discrimination must in fact have harmed competition. J. Truett Payne Company, Inc. v. Chrysler Motors Corporation, 451 U.S. 557, 561, 101 S.Ct. 1923, 1926-27, 68 L.Ed.2d 442 (1981). Instead, a violation is established upon a showing that “the effect of such discrimination may be substantially to lessen competition.” Id. For the purposes of the Robinson-Pat-man Act, price discrimination means nothing more than a difference in price charged to different purchasers or customers of the discriminating seller for products of like grade or quality. Feeser, 909 F.2d at 1532; see also F.T.C. v. Anheuser-Busch, Inc., 363 U.S. 536, 549, 80 S.Ct. 1267, 1274-75, 4 L.Ed.2d 1385 (1960). Price discrimination standing alone, however, is not illegal per se. Feeser, 909 F.2d at 1532; O. Hommel Co. v. Ferro Corp., 659 F.2d 340, 346 (3d Cir.1981). Rather, in order to establish a prima facie violation of section 2(a), “a reasonable possibility of harm, often referred to as competitive injury, must be shown.” Feeser, 909 F.2d at 1531.

A. Competitive Injury

1.

We note initially that as a prerequisite to establishing secondary line injury, a plaintiff must “first prove that, as the disfavored purchaser, it was engaged in actual competition with the favored purchaser(s) as of the time of the price differential.” Best Brands Beverage, Inc. v. Falstaff Brewing Corporation,

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

Related

QUARLES v. BONTEMPO
E.D. Pennsylvania, 2025
BAEZ v. FROELICH
W.D. Pennsylvania, 2023
BLANGO v. CITY OF PHILADELPHIA
E.D. Pennsylvania, 2022
KEELS v. BLANCHE
E.D. Pennsylvania, 2022
BROWN v. PHILLIPS
E.D. Pennsylvania, 2021
In re: Carl Mace v.
Sixth Circuit, 2013
GF Princeton, L.L.C. v. Herring Land Group, L.L.C.
518 F. App'x 108 (Third Circuit, 2013)
Anthony Williams v. Duke Energy International, Inc
681 F.3d 788 (Sixth Circuit, 2012)
Behrend v. Comcast Corp.
655 F.3d 182 (Third Circuit, 2011)
In Re Wellbutrin Sr Antitrust Litigation
749 F. Supp. 2d 260 (E.D. Pennsylvania, 2010)

Cite This Page — Counsel Stack

Bluebook (online)
63 F.3d 1267, 1995 U.S. App. LEXIS 27721, 1995 WL 501426, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stelwagon-manufacturing-company-appellee-v-tarmac-roofing-systems-inc-ca3-1995.