Solomon v. Houston Corrugated Box Co., Inc.

• Citation: 526 F.2d 389
• Decision Date: 26 January 1976
• Docket Number: No. 75-3374 Summary Calendar.,75-3374 Summary Calendar.
• Court: U.S. Court of Appeals — Fifth Circuit
• Parties: Norman SOLOMON, Plaintiff-Appellant, v. HOUSTON CORRUGATED BOX CO., INC., et al., Defendants-Appellees.

526 F.2d 389

Norman SOLOMON, Plaintiff-Appellant, v. HOUSTON CORRUGATED BOX CO., INC., et al., Defendants-Appellees.

No. 75-3374 Summary Calendar.^*

United States Court of Appeals, Fifth Circuit.

January 26, 1976.

COPYRIGHT MATERIAL OMITTED

Robert O. Campbell, Houston, Tex., for plaintiff-appellant.

Louis B. Paine, Jr., Hayden Burns, Houston, Tex., for Houston Corrugated Box.

B. R. Pravel, Houston, Tex., Terrence D. Dreyer, Dallas, Tex., for Frito-Lay Inc.

Before GEWIN, GOLDBERG and DYER, Circuit Judges.

GEWIN, Circuit Judge:

This case involves one of the more unusual species of judgments in the judicial system, the granting of summary judgment in an antitrust case. Since we have determined that the district court's ruling was not erroneous, we affirm, with the hope that our action will contribute to the concept of efficient judicial administration. The substantial and material operative facts are not in dispute.

Plaintiff-appellant Norman Solomon is the owner and sole proprietor of United Carton Company (UCC) in Houston and engages in the corrugated carton business. This enterprise entails aspects other than dealing in used boxes, but this case is concerned largely with only that element of the business.

Formerly, UCC's sources of supply of used boxes were Frito-Lay, Inc. (Frito), Oak Farms Dairies, the Coca-Cola Company and Carnation. Of these four suppliers, Frito was the largest, supplying approximately 90% of UCC's boxes.

UCC had been dealing with these four suppliers for several years and had gradually achieved a reduction in the price paid them to two cents per box by late 1973. In January, 1973, Frito, Oak Farms Dairies, and Coca-Cola informed appellant that henceforth they would sell their boxes to defendant-appellee Houston Corrugated Box Company, Inc. (HCB), UCC's major competitor in the Houston used box trade.¹ HCB had offered Frito five cents per box and had agreed to pick up Frito's scrap paper and pay $45.00 per ton for it.

UCC's two cents per box arrangement with Frito had never involved a written agreement, nor was there a specific termination date. It was simply an oral, buy-sell agreement, terminable at will, between the two.² In the past appellant and Tim Dorough had also discussed the possibility of appellant's picking up Frito's scrap paper. Appellant had indicated, however, that he would be willing to undertake this task only if it was "absolutely necessary." No agreement concerning the scrap paper had ever been reached between Frito and UCC.

According to appellant's deposition testimony, when he talked to Dorough by phone after the contract termination, Dorough had told him that "his boss in Dallas" had instructed him to terminate the agreement with UCC and he had warned Solomon not to "make waves." At his deposition Dorough testified that he had not been directed to take this action by any superior, but had done so after a meeting of the Houston plant management, in the exercise of business judgment as plant manager. Dorough did indicate, however, that he had told appellant that if the Frito "higher-ups" discovered that he had turned down an offer of five cents per box in favor of the two cents per box agreement with UCC, he might "have some problems and probably get a reprimand."

Soon after the termination appellant called Dorough's office to make an offer of six cents per box, but Dorough never directly responded to this proposal. Appellant testified that he also counter-offered to pick up Frito's scrap paper. Dorough testified that he did not find this proposition acceptable because appellant had indicated in the past that he was not equipped, or did not wish, to handle scrap paper.³ In his complaint appellant alleges that Frito refused to sell him boxes at any price, but at his deposition he admitted that the sole basis of this allegation was the fact that Frito never responded to his counter-proposal.

Appellant initially brought this action against HCB, Joe Levy (an HCB corporate officer who solicited the Frito account), Frito, Oak Farms and Coca-Cola. Carnation continued to sell boxes to UCC and was not made a defendant. He alleged violations of §§ 1 and 2 of the Sherman Antitrust Act, 15 U.S.C. §§ 1 & 2 (1970), and sued under § 4 of the Clayton Antitrust Act, 15 U.S.C. §§ 12 et seq. (1970). On April 25, 1975, however, appellant voluntarily dismissed with prejudice Oak Farms Dairies and Coca-Cola,⁴ leaving only HCB, Joe Levy and Frito as defendants.⁵ In substance, then, appellant's claims under §§ 1 & 2 of the Sherman Act are now premised on the actions of HCB, a buyer of used cartons, Joe Levy, an officer of HCB, and Frito, a seller of used cartons.

In his complaint appellant alleged that Joe Levy had been attempting "to steal away Plaintiff's customers without very much success" and that the complained-of actions "were motivated by personal vindiction rather than profit." Appellant asserted that the five defendants had conspired and agreed that Frito, Oak Farms and Coca-Cola (through its subsidiary, Maryland Club Coffee Company) "would cease and desist from selling used corrugated boxes to the Plaintiff." Appellant further alleged that as a result of this action he was forced to renege on various contracts he had made to supply used boxes and that this result adversely affected interstate commerce. He also contended that the acts of the defendants had resulted in both the monopolization of the corrugated used box trade in the Houston area and in unreasonable restraint of that trade. Appellant asserted joint and several liability for threefold damages against all of the defendants, and also alleged malice and sought punitive damages, costs and attorneys' fees.⁶

In granting the motions for summary judgment of Frito, HCB and Joe Levy, the district court concluded that the dismissal of Oak Farms and Coca-Cola "changed the entire complexion" of the case and "fatally weakened its otherwise reasonably sturdy framework." The district court then held that it was "hard pressed to find a clearer or more classic case of a simple, unilateral refusal to deal." In the lower court's view the doctrine of United States v. Colgate & Co., 250 U.S. 300, 39 S.Ct. 465, 63 L.Ed. 992 (1919), that such a refusal was not violative of the antitrust laws controlled. The district court did not err in its conclusions.

We are fully cognizant that summary judgment is drastic relief which must be applied with caution and that the pleadings of the party opposing it are to be liberally construed, e. g., Redhouse v. Quality Ford Sales, Inc., 511 F.2d 230, 234 (10th Cir. 1975). Summary judgment is not generally favored in antitrust cases, see, e. g., Clark v. United Bank, 480 F.2d 235, 240 (10th Cir.), cert. denied, 414 U.S. 1004, 94 S.Ct. 360, 38 L.Ed.2d 240 (1973); Williams v. Pennsylvania Co., 367 F.Supp. 1158, 1167 (E.D.Pa.1973). It is appropriate, however, when "it is plain that the allegedly unlawful practice does not exist, and that plaintiff's claim is without merit," Capital Temporaries, Inc. v. Olsten Corp., 365 F.Supp. 888, 895 (D.Conn.1973), aff'd, 506 F.2d 658 (2d Cir. 1974). The mere allegation of the Sherman Act claim requirements of a contract, combination, or conspiracy for the purpose of restraining trade or interstate commerce and resulting damages are not sufficient to withstand a motion for summary judgment once they have been rebutted, ALW, Inc. v. United Air Lines, Inc., 510 F.2d 52, 54-57 (9th Cir. 1975); see, e. g., Kemp Pontiac-Cadillac, Inc. v. Hartford Automobile Dealers' Ass'n, 380 F.Supp. 1382, 1389 (D.Conn.1974) ("glib and conclusory allegations" of conspiracy are insufficient to raise genuine issues in face of specific denials in sworn depositions and affidavits by defendants); Searer v. West Michigan Telecasters, Inc., 381 F.Supp. 634, 643 (W.D.Mich.1974) (the policy of sparing use of summary procedures in antitrust cases "is no warrant for every plaintiff who can draft an antitrust complaint, no matter how groundless or improbable its allegations, to force his claim to trial despite its deficient factual underpinnings"); Murdock v. City of Jacksonville, 361 F.Supp. 1083, 1086-87 (M.D.Fla.1973) ("Even in an antitrust case a party cannot rest on the allegations contained in his complaint but must, in opposition to a motion for summary judgment, come forward with affidavits setting forth specific facts showing that there is a genuine issue of material fact for trial") (citations omitted).

We have recently had occasion to apply these principles in Scranton Construction Co. v. Litton Industries Leasing Corp., 494 F.2d 778, 782 (5th Cir. 1974), cert. denied, 419 U.S. 1079, 95 S.Ct. 774, 42 L.Ed.2d 800 (1975), wherein we stated:

We have searched the record in vain for evidence supporting plaintiffs' allegations of a combination or conspiracy against them between Litton and anyone in the area of plaintiffs' claims. Proof of this is, of course, essential to plaintiffs' case under § 1 of the Sherman Act and to its conspiracy claims under § 2. Facing defendants' sworn challenge to the existence of such a conspiracy, it was up to plaintiffs to produce significant probative evidence—by affidavit or deposition — demonstrating that a genuine issue of fact existed as to this element of the complaint, if summary judgment was to be avoided. (citations omitted, emphasis added).

Similarly, a review of the record in this case reveals a total lack of any significant probative evidence, by means of sworn affidavits or depositions, supportive of appellant's contention that genuine issues of material fact exist.

Appellant argues that Frito agreed to sell its used boxes solely to HCB and that the motive for this action was to ensure that HCB would monopolize the trade, i. e., that Dorough did not terminate his arrangement with UCC for a valid business purpose, but did so on orders from "higher ups." There is not, first of all, one iota of evidence supporting appellant's bald...