Standard Oil Company of California v. Moore
| Citation | 251 F.2d 188 |
| Decision Date | 10 February 1958 |
| Docket Number | No. 14927.,14927. |
| Parties | STANDARD OIL COMPANY OF CALIFORNIA, a corporation, Shell Oil Company, a corporation, The Texas Company, a corporation, Richfield Oil Corporation, a corporation, General Petroleum Corporation, a corporation, Tide Water Associated Oil Company, a corporation, and Union Oil Company of California, a corporation, Appellants, v. George F. MOORE, Appellee. |
| Court | United States Courts of Appeals. United States Court of Appeals (9th Circuit) |
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Marshall P. Madison, Francis R. Kirkham, William E. Mussman, Pillsbury, Madison & Sutro, San Francisco, Cal., Helsell, Paul, Fetterman, Todd & Hokanson, Seattle, Wash., for appellant, Standard Oil Co. of California.
George W. Jansen, New York City, Arthur Tucker, James O. Sullivan, Los Angeles, Cal., and Milton Handler, New York, N. Y., Grosscup, Ambler, Stephan & Miller, Seattle, Wash., of counsel, for appellant, The Texas Co.
William J. DeMartini, Los Angeles, Cal., for appellant, Richfield Oil Corp., Graham, Green & Dunn, Seattle, Wash., of counsel.
Robert W. Graham, Seattle, Wash., Howard Painter, Paul E. Bermingham, Los Angeles, Cal., for appellant General Petroleum Corp., Bogle, Bogle & Gates, Seattle, Wash., of counsel.
DeWitt Williams, Seattle, Wash., William F. Kiessig, Edmund D. Buckley, San Francisco, Cal., for appellant Tide Water Associated Oil Co., Eggerman, Rosling & Williams, Seattle, Wash., of counsel.
L. A. Gibbons, Los Angeles, Cal., Moses Lasky, San Francisco, Cal., Herbert S. Little, Seattle, Wash., for appellant Union Oil Co. of California, Brobeck, Phleger & Harrison, San Francisco, Cal., Little, LeSourd, Palmer, Scott & Slemmons, Seattle, Wash., of counsel.
Newman H. Clark, Seattle, Wash., S. R. Vandivort, San Francisco, Cal., for appellant Shell Oil Co., Venables, Ballinger & Clark, of counsel.
Ferguson & Burdell, William H. Ferguson, Charles S. Burdell, William Wesselhoeft, Donald McL. Davidson, Phil H. DeTurk, Seattle, Wash., for appellee.
Before STEPHENS, Chief Judge, and POPE and HAMLEY, Circuit Judges.
This is a treble-damage antitrust suit, brought by George F. Moore, a former Seattle gasoline service station owner and operator, against seven major oil companies.1 Charging defendants with the destruction of his business, plaintiff sought treble damages in the amount of $285,000. He also asked for a decree requiring defendants to divest themselves of all interest in, or control of, retail service stations in the competitive area. Attorneys' fees in the sum of $40,000 were requested.
After a trial which lasted more than three months, the jury returned a verdict of $80,000 trebled, or a total of $240,000. Judgment in this sum, and for attorneys' fees in the amount of $40,000, was entered on June 24, 1955. The prayer for equitable relief was denied.
Defendants appeal. Under five general specifications of error, they question the sufficiency of the evidence to support the verdict, the manner in which the coconspirator rule was applied, the admissibility of some of the evidence, the failure to give certain instructions, the giving of other instructions, and the failure to set aside the verdict because of asserted extraneous influences upon the jury.
Background of the Case.
Each of the appellants is engaged in the business of producing and refining oil, and in transporting and marketing gasoline, oil, and other petroleum products, in Washington and other states. The production and (at the times here in question) refining operations take place in California. Transportation to the state of Washington is generally by ship tanker. The gasoline is received by appellants at their respective marine storage terminals, and from there it is distributed to bulk storage plants located at convenient marketing centers.
Distribution from these terminals and plants falls generally into four categories: Sales to independent service station dealers; retail sales at company-operated stations; sales to secondary wholesale distributors or jobbers; and sales to large commercial, agricultural, and industrial consumers. Except for appellants, only one company transports gasoline into the Puget Sound area of Washington, and then only in relatively small amounts. During the period in question, there was no well production of petroleum products in the state of Washington.
In 1939, Moore opened a retail gasoline service station and truck service station at 1961 Fourth Avenue South, in Seattle. Except for eight months in 1944, when he served in the army, Moore operated this station continuously until August, 1952. Throughout this period, Moore obtained his gasoline and other petroleum products from Tide Water.
Moore was an extremely competitive dealer. While Tide Water required him to post retail gasoline prices on his pumps, it was his practice to give discounts which resulted in a net gasoline price lower than the posted price. Generally speaking, this discount, which he gave to all customers, was three cents a gallon.
Moore's business was successful from the beginning. This was due to his pricing policy, the excellence of his location, the efficiency of his operation, his ability as a salesman, and perhaps other factors. His business grew steadily, year by year, until he became the largest Tide Water dealer in the state of Washington. Eight employees were required to operate the station. By 1951, his annual gasoline sales exceeded 1,600,000 gallons.
Commencing in 1950, however, disagreements developed between Moore and Tide Water. The nature of these disagreements will be discussed at a later point in this opinion. Late in 1951, Moore began looking around for another source of supply. He had conversations with representatives of Standard and General. At that time, however, both of these appellants declined to deal with Moore. Negotiations between Moore and representatives of Union, begun in October or November, 1951, were still in progress in May, 1952.
On May 2, 1952, Moore received a written notice from Tide Water, canceling its contract with him, effective July 30, 1952.2 He continued his negotiations with representatives of Union during the period from May 2 to July 30, 1952. In June or July, 1952, Moore also had several conversations with representatives of Richfield. Before the end of July, however, Richfield indicated its refusal to deal with Moore on the basis which he proposed.
Tide Water supplied no gasoline or oil to Moore after July 30, 1952. By utilizing the large capacity of his storage tanks and obtaining relatively small quantities of gasoline from independent sources, Moore was able to operate his service station for a few days after that date. During this period, negotiations continued with Union, and were reopened with General. Moore also made a "last-minute" effort to obtain gasoline from each of the other appellants.
As events turned out, Moore did not obtain a continuing supply of gasoline and diesel oil from Union, General, or any other source, following termination of the Tide Water supply on July 30, 1952. When Moore's stored supply became exhausted about the middle of August, 1952, he closed his service station. The complaint in this action was filed on October 4, 1952.
The theory of the action is that Moore was refused a supply of gasoline pursuant to, and in furtherance of, an agreement, combination, or conspiracy in restraint of, or to monopolize, interstate trade and commerce, entered into by two or more of the appellants.3 Jurisdiction to entertain the action and grant the requested relief is asserted under several sections of the Sherman, Clayton, and Robinson-Patman Acts (15 U.S.C.A. §§ 1, 2, 13, 13a, 14, 15, 18, and 26).
In Moore's first amended complaint, the alleged unlawful agreement, combination, or conspiracy is pictured as one to accomplish a dual purpose through multiple lines of action. It is asserted that the general objectives were to control, fix, and regulate gasoline prices, and to monopolize, control, and channelize the distribution of gasoline.4 The plans and programs adopted in furtherance of these objectives, Moore alleges, relate both to the refining and to the distribution of gasoline.
Concerning the refining of gasoline, these plans and programs, according to the complaint, called for self-imposed controls and restrictions upon appellants' own activities.5 With respect to the distribution of gasoline, it is alleged that these plans and programs included not only self-imposed controls and restrictions, but also the imposition of various forms of economic pressure and coercion upon wholesale distributors and retail dealers.6
As compared to the sweep of these allegations, the averments concerning the way in which the asserted unlawful agreement, combination, or monopoly injured Moore raise a relatively narrow issue. It is not alleged that during the time he was engaged in business Moore's profits or costs were affected in any manner by reason of the production, refining, transportation, storage, marketing, or pricing policies referred to above. The way in which Moore was damaged, according to the complaint, was in being driven out of business at a time when the business was prospering. This was accomplished, it is alleged, by the practice of one of the forms of economic pressure contemplated by the asserted unlawful agreement, combination, or conspiracy â namely, concerted refusal to deal.7
Appellants filed separate answers in which they denied the allegations of the complaint concerning the alleged agreement, combination, or conspiracy, concerted refusal to deal, and monetary loss. The cause came to trial on the issues raised by these pleadings. As before noted, the jury verdict was for Moore, and the judgment conforms to the verdict.
Sufficiency of the Evidence â In General.
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