Trabert & Hoeffer, Inc., an Illinois Corporation v. Piaget Watch Corporation, North American Watch Corporation and Concord Watch Corporation

633 F.2d 477, 1980 U.S. App. LEXIS 15314
CourtCourt of Appeals for the Seventh Circuit
DecidedJuly 29, 1980
Docket80-1081
StatusPublished
Cited by34 cases

This text of 633 F.2d 477 (Trabert & Hoeffer, Inc., an Illinois Corporation v. Piaget Watch Corporation, North American Watch Corporation and Concord Watch Corporation) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Trabert & Hoeffer, Inc., an Illinois Corporation v. Piaget Watch Corporation, North American Watch Corporation and Concord Watch Corporation, 633 F.2d 477, 1980 U.S. App. LEXIS 15314 (7th Cir. 1980).

Opinion

PER CURIAM.

Defendants-appellants North American Watch Corporation and two subsidiaries, Piaget Watch Corporation and Concord Watch Corporation, appeal from a judgment below finding them liable under section 1 of the Sherman Act, 15 U.S.C. § 1. The district court, Judge Grady presiding, found that the defendants ceased to supply watches for resale to plaintiff Trabert & Hoeffer, Inc., a jewelry retailer, pursuant to a price-fixing agreement between defendants and plaintiff’s competitors. The case was tried without a jury; voluminous documentary evidence was viewed by the district court and extensive testimony heard. The court, in addition to awarding the plaintiff $195,000 in treble damages and $43,695.10 in costs and legal fees, permanently enjoined defendants from refusing to deal with the plaintiff on the same terms and conditions (/. e., availability, price, credit, service, advertising coverage) enjoyed by other Chicago area retailers supplied by the defendants.

On appeal, the defendants urge reversal on three grounds: (1) the district court erred in finding that the defendants engaged in a price-fixing conspiracy; (2) the damages award was in error because neither the fact nor degree of damage was supported by the evidence; and (3) the in-junctive relief ordered by the district court exceeded its discretion. Although the appeal was ably argued, we find no reversible error and so affirm with a slight modification of the injunctive order.

I.

The appellants first contend that there was insufficient evidence in the record to permit the court’s finding of a price-fixing conspiracy. It is important to note at the outset that this court can upset the lower court’s finding of an agreement only if it was clearly erroneous; we are not to weigh complicated antitrust evidence de novo, and we are obligated to defer to the trier of fact on such matters as witness credibility. Zenith Radio Corp. v. Hazeltine Research Inc., 395 U.S. 100, 123, 89 S.Ct. 1562, 1576, 23 L.Ed.2d 129 (1969); City of Mishawaka v. American Eiectric Power Co., Inc., 616 F.2d 976, 979 (7th Cir. 1980), cert. *480 filed, 49 U.S.L.W. 3009 (June 27, 1980). Further, in reviewing the record, we must keep in mind that the elements of a Sherman Act violation are met in a vertical price restraint conspiracy when there is evidence of more than a unilateral announcement of restriction by the wholesaler and voluntary adherence by the retailer. United States v. Bausch & Lomb Optical Co., 321 U.S. 707, 723, 64 S.Ct. 805, 813, 88 L.Ed. 1024 (1944). The presence of some “affirmative action to achieve uniform adherence by inducing each customer to adhere to avoid . .. price competition . . .United States v. Parke, Davis & Co., 362 U.S. 29, 47, 80 S.Ct. 503, 513, 4 L.Ed.2d 505 (1960), is sufficient additional evidence. But to establish liability, direct evidence of an agreement need not be shown; it is permissible to reasonably infer the existence of a conspiracy from the defendant’s conduct. United States v. Paramount Pictures, Inc., 334 U.S. 131, 142, 68 S.Ct. 915, 921, 92 L.Ed. 1260 (1948); Interstate Circuit, Inc. v. United States, 306 U.S. 208, 221, 59 S.Ct. 467, 472, 83 L.Ed. 610 (1939).

Within these limits, we are unable to conclude that Judge Grady’s findings were clearly erroneous. The district court found on the basis of credible testimony that the defendants had received numerous complaints from plaintiff’s retail competitors regarding the plaintiff’s practice of discounting defendants’ product lines, that the defendants agreed with the plaintiff’s competitors to redress such complaints by seeking a curtailment of plaintiff’s practices, and that when voluntary adherence was not forthcoming from the plaintiff, the defendants terminated plaintiff’s supply of watches, with the express explanation that such termination was due to the plaintiff’s putatively excessive discounting.

More specifically, the plaintiff’s President, Donald Levinson, testified that Maurice Schilling, a sales representative of defendants, began in early 1974 to urge plaintiff to restrict its discounts in excess of 20% on the exclusive Piaget watch line. Schilling explained that his warning was a response to complaints from other retailers whose businesses could only support a 20% discount. Levinson was induced to sign a letter in September 1974, later repudiated, in which he agreed to reduce his discounts. When plaintiff resumed its discounting practices, Schilling again warned plaintiff in 1976 of complaints from plaintiff’s competitors and hinted at termination if the discounting practices were not ended. When plaintiff refused to comply, defendants became uncooperative with plaintiff, refusing to supply immediate shipment of customer orders and ending delivery of watches on consignment.

In early 1978, according to the testimony of one of plaintiff’s competitors, Schilling answered his complaints and plea for price “protection” with a commitment to “firm up the market.” This competitor indicated to Schilling that he would not discount the company’s line in excess of 20% if the defendants would enforce a no-discount policy against competing retailers; Schilling agreed to these terms. A similar promise to take the defendants’ watch line out of the hands of excessive discounters was made by Schilling to another of Trabert & Hoeffer’s competitors in response to complaints.

Levinson further testified that contemporaneously, he was unable to secure from the defendants either watches or an explanation of why his supply had been curtailed. After numerous unreturned telephone calls, Schilling finally told Levinson in June 1978 that his dealership had been eliminated because of pressure from plaintiff’s competitors and Levinson’s refusal to adhere to the 20% maximum discount. While contradictory testimony was offered by defendants’ senior vice president as to the reasons for plaintiff’s termination, the court found this testimony to be unreliable in view of the witness’ unfamiliarity with the Trabert & Hoeffer dealership and his inability to provide a consistent counter-explanation for the termination. The court, as permitted under Interstate Circuit v. United States, 306 U.S. at 221, 59 S.Ct. at 472, also drew an adverse inference from Schilling’s nonappearance at trial despite plaintiff’s re *481 quest that he testify.

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633 F.2d 477, 1980 U.S. App. LEXIS 15314, Counsel Stack Legal Research, https://law.counselstack.com/opinion/trabert-hoeffer-inc-an-illinois-corporation-v-piaget-watch-ca7-1980.