Borden Company v. Sylk

• Decision Date: 24 September 1968
• Docket Number: Civ. A. No. 39962.
• Citation: 289 F. Supp. 847
• Parties: The BORDEN COMPANY, Plaintiff, v. William SYLK and Harry S. Sylk, Defendants and Third-Party Plaintiffs, v. PENROSE INDUSTRIES CORPORATION, Third-Party Defendant.
• Court: U.S. District Court — Eastern District of Pennsylvania

289 F. Supp. 847

The BORDEN COMPANY, Plaintiff, v. William SYLK and Harry S. Sylk, Defendants and Third-Party Plaintiffs, v. PENROSE INDUSTRIES CORPORATION, Third-Party Defendant.

Civ. A. No. 39962.

United States District Court E. D. Pennsylvania.

September 24, 1968.

Israel Packel of Fox, Rothschild, O'Brien & Frankel, Philadelphia, Pa., for plaintiff, The Borden Co. and non-party Sylvan Seal Milk Co.

Michael H. Egnal, Philadelphia, Pa., for defendants and third-party plaintiffs.

Joel H. Weinrott, Philadelphia, Pa., for Penrose Industries Corp.

MEMORANDUM AND ORDER

JOSEPH S. LORD, III, District Judge.

Borden Company ("Borden") sued the Sylks on a series of promissory notes. The defendants joined Penrose Industries Corporation ("Penrose") as third party defendant. Penrose has filed cross-claims against Borden asserting that (1) Borden breached an oral agreement to sell ice cream to Penrose at a price equal to the lowest price charged any retail outlet in the area for like grade and quality; (2) violations of Section 2(a), (d) and (e) of the Clayton Act, as amended by the Robinson-Patman Act (15 U.S.C. § 13).

Counsel for Penrose deposed Leslie Stone, former president of plaintiff, and Robert M. Maloney, president of Sylvan Seal Milk, Inc. ("Sylvan"), a subsidiary of Borden which sells ice cream to Acme Markets. In the course of depositions, counsel sought to inquire into the prices charged and the volume sold to Acme by Sylvan. The objections of counsel for Borden and Sylvan are now before us.

In brief, the objections are: as to Borden, the questions are not relevant, since Sylvan is a separate entity, is not a party, and there is no showing that Borden controlled its price policies; as to Sylvan, it is confidential information and should not be disclosed unless relevant. We think the questions should be answered.

These facts appear from the depositions: The commodity which is delivered to Acme is manufactured and boxed by Borden for use solely and only by Acme and, although Borden makes deliveries to its warehouse in Philadelphia for distribution to retail customers, including Penrose, the completed package for Acme is picked up by Sylvan Seal vehicles and distributed from its separate warehouse in Philadelphia to Acme's warehouse. Of five Sylvan Seal directors, three directly control the operation of the Borden Ice Cream Division. One is a Vice President of Borden; one is a District Officer of Borden's Milk and Ice Cream Division embracing what might be called northeastern United States, and the third is an Executive Vice President of Borden responsible for the Milk and Ice Cream Division. Borden has no Pennsylvania milk facilities and here the milk distribution is by Sylvan Seal. Funds of Sylvan Seal have been, at times, transferred to Borden.

The cross-claim includes an allegation of violation of the Robinson-Patman Act. The purpose of that Act is "to assure that all sellers, regardless of size, competing directly for the same customers, would receive even-handed treatment from their suppliers." FTC v. Fred Meyer, Inc. et al., 390 U.S. 341, 88 S.Ct. 904, 19 L.Ed.2d 1222,...