IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_____________________
No. 98-11407 Summary Calendar _____________________
RONNIE P. STEPHENS,
Plaintiff-Appellant, S & H CHEMICAL, INC.,
Plaintiff-Counter Defendant-Appellant,
versus
RHONE-POULENC, INC.,
Defendant-Counter Claimant-Appellee,
JIM HARDWICK; MONTY NEEB,
Defendants-Appellees. _________________________________________________________________
Appeal from the United States District Court for the Northern District of Texas (4:97-CV-540-Y) _________________________________________________________________
July 8, 1999
Before JOLLY, SMITH, and PARKER, Circuit Judges.
PER CURIAM:*
This case arises out of a decision by Rhone-Poulenc, Inc.
(“Rhone-Poulenc”), a manufacturer of agricultural products, to
terminate one of its distributors, S&H Chemicals, Inc. (“S&H”).
In the resulting lawsuit, S&H claimed that Rhone-Poulenc violated
the antitrust laws and Rhone-Poulenc counterclaimed that S&H
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4. breached their contract by refusing to pay invoices. On appeal,
S&H argues that the district court erred by: (1) miscalculating the
period of time under the contract that interest was due on past-due
invoices; (2) awarding attorneys’ fees; and (3) granting summary
judgment for Rhone-Poulenc on S&H’s antitrust claims. Because we
find no error on the part of the district court, we affirm.
According to Rhone-Poulenc, it made a decision to terminate
S&H, along with thirty other distributors, after it decided that it
should terminate dealers with small sales volume. S&H, on the
other hand, argues that it was terminated after it refused a
request by Rhone-Poulenc to raise its prices for “Prep”--a product
applied to cotton plants for the purpose of hastening late-season
boll development. The evidence that S&H introduced to support this
claim is testimony regarding a dispute between a representative of
Rhone-Poulenc and S&H regarding S&H’s pricing of Prep. In
addition, S&H asserts Rhone-Poulenc controls fifty percent of the
market for Prep.
S&H sued Rhone-Poulenc in state court alleging breach of
contract, antitrust violations, and tortious interference. Rhone-
Poulenc removed the case to a federal district court and filed a
counterclaim against S&H for breach of contract (S&H had ceased
paying its invoices after it was terminated). S&H then paid its
outstanding invoices but, despite a clause in the contract
requiring it to do so, did not pay interest for the period that the
amount owed was past due. After discovery, the court granted
2 summary judgment in favor of Rhone-Poulenc and, under the contract,
awarded interest on the invoices and attorneys’ fees to Rhone-
Poulenc.
The first two issues are both related to a factual allegation
made by S&H and can be dispensed with easily. Rhone-Poulenc sent
out a series of fifteen invoices, none of which were paid by S&H.
Under the contract, Rhone-Poulenc was entitled to interest on the
amount past due (i.e., not paid within thirty days of the date of
the invoice) and reasonable attorneys’ fees incurred while
collecting that amount. In July 1997, Rhone-Poulenc filed its
counterclaim seeking interest and attorneys’ fees. At that time,
fourteen of the fifteen invoices were past due. By August 1, 1997,
all fifteen were past due and Rhone-Poulenc sent a summary invoice
to S&H listing the total amount due. The district court awarded
interest starting on August 1, the day that the last invoice was
past due.1 On appeal, S&H now argues that that summary invoice
should be treated as an invoice under the contract. Thus,
according to S&H, none of the invoices were past due until
August 31, 1997.
The first issue S&H raises on appeal is whether the district
court erred in calculating the amount of interest owed based on a
period starting on August 1. The second issue is whether the
1 Although many of the invoices were past due long before August 1, 1997, Rhone-Poulenc, according to its brief “for purposes of simplicity,” agreed to forgive S&H the interest due on those invoices for the period before August 1.
3 district court erred in awarding attorneys’ fees when the costs
associated with filing a counterclaim were incurred before
August 31, when S&H argues the invoices became past due. We find
both arguments to be meritless. It is clear from the record that
the summary invoice was only that--a summary. That Rhone-Poulenc
sent S&H a reminder of past due invoices does not relieve S&H from
paying the original invoices in a timely fashion. We therefore
find no error on the part of the district court with respect to
either its award of interest or attorneys’ fees.
The third issue raised by S&H on appeal is whether the
district court erred in granting summary judgment on S&H’s
antitrust claims. The district court held that because S&H had
failed to present evidence of “conspiracy, agreement, or concerted
effort to restrain trade or fix prices,” S&H failed to meet its
burden of producing evidence sufficient to show a violation of the
antitrust laws. On appeal, S&H argues that the district court
erred by requiring such a showing.
At the outset, we should note that the district court is
absolutely correct that, under Section 1 of the Sherman Act, 15
U.S.C. § 1, the plaintiff must show the existence of “a contract,
combination . . ., or conspiracy” that restrains trade. However,
as S&H points out on appeal, no evidence of an agreement,
combination or conspiracy is necessary to make out a violation of
Section 2 of the Sherman Act. 15 U.S.C. § 2 (“Every person who
shall monopolize, or attempt to monopolize, or combine or conspire
4 with any other person or persons, to monopolize any part of the
trade or commerce . . . shall be deemed guilty of a felony”).
After a review of the plaintiffs’ complaint and summary
judgment pleadings, we cannot tell whether S&H intended to argue
that Rhone-Poulenc’s conduct violated § 2. The two principal
theories that S&H argued below were that Rhone-Poulenc engaged in
resale price maintenance and a refusal to deal. Resale price
maintenance is a vertical agreement to fix prices and falls
squarely under Section 1. So in order to show that Rhone-Poulenc
engaged in resale price maintenance, S&H had to show that Rhone-
Poulenc entered into some form of agreement with its distributors
to set the prices for the resale of Prep. See Business Elec. Corp.
v. Sharp Elec. Corp., 485 U.S. 717, 726 (1988). Since S&H does not
challenge the district court’s holding that it failed to produce
evidence of a conspiracy, we need not consider its resale price
maintenance theory. The other theory espoused by S&H is that
Rhone-Poulenc’s refusal to deal violated the antitrust laws. In
general, a refusal to deal can run afoul of either § 1--if the
conduct involves an agreement among several parties--or § 2--if the
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IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_____________________
No. 98-11407 Summary Calendar _____________________
RONNIE P. STEPHENS,
Plaintiff-Appellant, S & H CHEMICAL, INC.,
Plaintiff-Counter Defendant-Appellant,
versus
RHONE-POULENC, INC.,
Defendant-Counter Claimant-Appellee,
JIM HARDWICK; MONTY NEEB,
Defendants-Appellees. _________________________________________________________________
Appeal from the United States District Court for the Northern District of Texas (4:97-CV-540-Y) _________________________________________________________________
July 8, 1999
Before JOLLY, SMITH, and PARKER, Circuit Judges.
PER CURIAM:*
This case arises out of a decision by Rhone-Poulenc, Inc.
(“Rhone-Poulenc”), a manufacturer of agricultural products, to
terminate one of its distributors, S&H Chemicals, Inc. (“S&H”).
In the resulting lawsuit, S&H claimed that Rhone-Poulenc violated
the antitrust laws and Rhone-Poulenc counterclaimed that S&H
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4. breached their contract by refusing to pay invoices. On appeal,
S&H argues that the district court erred by: (1) miscalculating the
period of time under the contract that interest was due on past-due
invoices; (2) awarding attorneys’ fees; and (3) granting summary
judgment for Rhone-Poulenc on S&H’s antitrust claims. Because we
find no error on the part of the district court, we affirm.
According to Rhone-Poulenc, it made a decision to terminate
S&H, along with thirty other distributors, after it decided that it
should terminate dealers with small sales volume. S&H, on the
other hand, argues that it was terminated after it refused a
request by Rhone-Poulenc to raise its prices for “Prep”--a product
applied to cotton plants for the purpose of hastening late-season
boll development. The evidence that S&H introduced to support this
claim is testimony regarding a dispute between a representative of
Rhone-Poulenc and S&H regarding S&H’s pricing of Prep. In
addition, S&H asserts Rhone-Poulenc controls fifty percent of the
market for Prep.
S&H sued Rhone-Poulenc in state court alleging breach of
contract, antitrust violations, and tortious interference. Rhone-
Poulenc removed the case to a federal district court and filed a
counterclaim against S&H for breach of contract (S&H had ceased
paying its invoices after it was terminated). S&H then paid its
outstanding invoices but, despite a clause in the contract
requiring it to do so, did not pay interest for the period that the
amount owed was past due. After discovery, the court granted
2 summary judgment in favor of Rhone-Poulenc and, under the contract,
awarded interest on the invoices and attorneys’ fees to Rhone-
Poulenc.
The first two issues are both related to a factual allegation
made by S&H and can be dispensed with easily. Rhone-Poulenc sent
out a series of fifteen invoices, none of which were paid by S&H.
Under the contract, Rhone-Poulenc was entitled to interest on the
amount past due (i.e., not paid within thirty days of the date of
the invoice) and reasonable attorneys’ fees incurred while
collecting that amount. In July 1997, Rhone-Poulenc filed its
counterclaim seeking interest and attorneys’ fees. At that time,
fourteen of the fifteen invoices were past due. By August 1, 1997,
all fifteen were past due and Rhone-Poulenc sent a summary invoice
to S&H listing the total amount due. The district court awarded
interest starting on August 1, the day that the last invoice was
past due.1 On appeal, S&H now argues that that summary invoice
should be treated as an invoice under the contract. Thus,
according to S&H, none of the invoices were past due until
August 31, 1997.
The first issue S&H raises on appeal is whether the district
court erred in calculating the amount of interest owed based on a
period starting on August 1. The second issue is whether the
1 Although many of the invoices were past due long before August 1, 1997, Rhone-Poulenc, according to its brief “for purposes of simplicity,” agreed to forgive S&H the interest due on those invoices for the period before August 1.
3 district court erred in awarding attorneys’ fees when the costs
associated with filing a counterclaim were incurred before
August 31, when S&H argues the invoices became past due. We find
both arguments to be meritless. It is clear from the record that
the summary invoice was only that--a summary. That Rhone-Poulenc
sent S&H a reminder of past due invoices does not relieve S&H from
paying the original invoices in a timely fashion. We therefore
find no error on the part of the district court with respect to
either its award of interest or attorneys’ fees.
The third issue raised by S&H on appeal is whether the
district court erred in granting summary judgment on S&H’s
antitrust claims. The district court held that because S&H had
failed to present evidence of “conspiracy, agreement, or concerted
effort to restrain trade or fix prices,” S&H failed to meet its
burden of producing evidence sufficient to show a violation of the
antitrust laws. On appeal, S&H argues that the district court
erred by requiring such a showing.
At the outset, we should note that the district court is
absolutely correct that, under Section 1 of the Sherman Act, 15
U.S.C. § 1, the plaintiff must show the existence of “a contract,
combination . . ., or conspiracy” that restrains trade. However,
as S&H points out on appeal, no evidence of an agreement,
combination or conspiracy is necessary to make out a violation of
Section 2 of the Sherman Act. 15 U.S.C. § 2 (“Every person who
shall monopolize, or attempt to monopolize, or combine or conspire
4 with any other person or persons, to monopolize any part of the
trade or commerce . . . shall be deemed guilty of a felony”).
After a review of the plaintiffs’ complaint and summary
judgment pleadings, we cannot tell whether S&H intended to argue
that Rhone-Poulenc’s conduct violated § 2. The two principal
theories that S&H argued below were that Rhone-Poulenc engaged in
resale price maintenance and a refusal to deal. Resale price
maintenance is a vertical agreement to fix prices and falls
squarely under Section 1. So in order to show that Rhone-Poulenc
engaged in resale price maintenance, S&H had to show that Rhone-
Poulenc entered into some form of agreement with its distributors
to set the prices for the resale of Prep. See Business Elec. Corp.
v. Sharp Elec. Corp., 485 U.S. 717, 726 (1988). Since S&H does not
challenge the district court’s holding that it failed to produce
evidence of a conspiracy, we need not consider its resale price
maintenance theory. The other theory espoused by S&H is that
Rhone-Poulenc’s refusal to deal violated the antitrust laws. In
general, a refusal to deal can run afoul of either § 1--if the
conduct involves an agreement among several parties--or § 2--if the
conduct amounts to monopolization or attempted monopolization.
Given the confused manner in which S&H pleaded its theories,
it is unlikely that we would find fault in the district court
ruling solely on the § 1 claims. To give S&H the benefit of the
doubt, however, we will briefly address its § 2 claim. There are
5 two separate offenses under § 2: monopolization and attempted
monopolization.
The offense of monopolization requires “two elements: (1) the
possession of monopoly power in the relevant market and (2) the
willful acquisition or maintenance of that power as distinguished
from growth or development as a consequence of a superior product,
business acumen, or historic accident.” U.S. v. Grinnell Corp.,
384 U.S. 563, 570-71 (1966). In this case, S&H has failed to
present evidence that Rhone-Poulenc had monopoly power. The only
evidence that S&H presents is its allegation that Rhone-Poulenc
controls 50% of the market and that, standing alone, is simply
insufficient evidence of monopoly power. See, e.g., Cliff Food
Stores v. Kroger, Inc., 417 F.2d 203, 207 n.2 (5th Cir. 1969) ("It
appears that something more than 50% of the market is a
prerequisite to finding a monopoly").
The offense of attempted monopolization, on the other hand,
requires two elements: “(1) specific intent to accomplish the
illegal result; and (2) a dangerous probability that the attempt
to monopolize the relevant market will be successful.” Dimmitt
Agri Industries, Inc. v. CPC International, Inc., 679 F.2d 516, 525
(5th Cir. 1982). In the case at hand, S&H has presented no
evidence that, even if Rhone-Poulenc sought to monopolize the
market, there is a dangerous probability that it would succeed. We
therefore conclude that regardless of whether S&H raised a valid
6 § 2 claim in its pleadings below, the district court did not err in
granting summary judgment.
In this case, S&H’s principal argument is that the district
court erred by not considering whether Rhone-Poulenc’s conduct
violated § 2, as well as § 1, of the Sherman Act. A review of the
pleadings in this case reveals that S&H’s arguments with respect to
a § 2 theory are far from pellucid. Even if we accept that S&H did
raise this issue below, however, S&H has not presented the kind of
evidence necessary to proceed to trial on a § 2 theory. S&H also
argues that the district court miscalculated the interest due on
past due invoices and inappropriately awarded attorneys’ fees under
the contract. Both arguments are based on an implausible
characterization of a document sent by Rhone-Poulenc to S&H: S&H
argues that the document is an invoice; Rhone-Poulenc argues it is
a summary of all past due invoices. Because the document is
clearly the latter, we find no error on the part of the district
court. For the foregoing reasons, the judgment of the district
court is
A F F I R M E D.