612 F.2d 1105 (9th Cir. 1979), 78-3698, Granddad Bread, Inc. v. Continental Baking Co.

Docket Nº:78-3698.
Citation:612 F.2d 1105
Party Name:1980-1 Trade Cases 63,017 GRANDDAD BREAD, INC., a corporation, Plaintiff-Appellant, v. CONTINENTAL BAKING CO., a corporation, Defendant-Appellee.
Case Date:November 23, 1979
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit

Page 1105

612 F.2d 1105 (9th Cir. 1979)

1980-1 Trade Cases 63,017

GRANDDAD BREAD, INC., a corporation, Plaintiff-Appellant,


CONTINENTAL BAKING CO., a corporation, Defendant-Appellee.

No. 78-3698.

United States Court of Appeals, Ninth Circuit

November 23, 1979

Rehearing Denied Feb. 21, 1980.

Page 1106

Charles R. Lonergan, Jr., Seattle, Wash., argued for plaintiff-appellant; Raymond H. Siderius, Siderius, Lonergan & Crowley, Seattle, Wash., on the brief.

E. Edward Bruce, Washington, D. C., argued for defendant-appellee; Nancy P. Gibbs, Seattle, Wash., on the brief.

Appeal from the United States District Court Western District of Washington.

Before HUFSTEDLER and ANDERSON, Circuit Judges, and GRANT, [*] District Judge.

Page 1107

J. BLAINE ANDERSON, Circuit Judge:

This antitrust case involves an appeal by Granddad Bread, Inc., (Granddad) from judgment n. o. v. in favor of Continental Baking Company (Continental). The court below found that Continental's activities were, in part, protected by the labor exemption to the antitrust laws, and that there was insufficient evidence to support liability under the other conspiracy theories. We agree and affirm the judgment of the district court.


Granddad, the plaintiff, originally brought this action against Continental and five other defendants, alleging conspiracy, monopolization, attempted monopolization, and price discrimination in the Seattle wholesale bread market. The other named defendants were Teamsters International Union of Bakery Salesmen, Local 227 (Local 227); Ashbrook Bakeries Corporation of Seattle (Ashbrook); Safeway Stores, Incorporated; American Bakeries Company; and Hansen Baking Company, Inc. All of the other defendants, except for Continental, settled with Granddad prior to trial.

After a nine-day trial, on February 19, 1975, a jury returned a special verdict against Continental. The jury found that Continental had not monopolized or attempted to monopolize any part of interstate trade in violation of Section 2 of the Sherman Act. But the jury did find that Continental had engaged in a conspiracy with the original defendants in an unreasonable restraint of, and in an attempt to monopolize, interstate trade (Sherman Act Sections One and Two). The jury also found that Continental had engaged in price discrimination in violation of the Robinson-Patman Act.

After the adverse verdict, Continental moved for judgment n. o. v. and the district court granted it on the Robinson-Patman claim, but denied it on the Sherman Act conspiracy claims. Continental then took an appeal from the denial of its motion. Granddad never appealed from the Robinson-Patman ruling.

On December 14, 1977, a panel of this court entered an order remanding the case to the district court for reconsideration in view of the recent decisions involving the scope of the labor exemption to the antitrust laws. On remand, the court below entered an order granting Continental's motion for judgment n. o. v. based on Connell Construction Co. v. Plumbers & Steamfitters, 421 U.S. 616, 95 S.Ct. 1830, 44 L.Ed.2d 418 (1975), and California Dump Truck v. Associated General Contractors, 562 F.2d 607 (9th Cir. 1977). The district court concluded that the jury should not have been allowed to consider the labor-related aspects of the case, and, aside from the matters protected by the labor exemption, there was insufficient evidence to support antitrust liability. Granddad then brought this appeal. 1


Traditionally, the bread produced by the major Seattle wholesale bakers was delivered by driver salesmen who were members of Local 227, and employees of the respective bakers. They were paid a salary plus a commission for the bread sold. They picked up the bread from the wholesale bakers and provided rack service 2 at the retail stores.

In 1960, one of the Seattle wholesale bakers, Ashbrook, began to sell its bread to a retail outlet pursuant to an agreement where the retail outlet had its own drivers (as opposed to members of Local 227) pick up and deliver the bread.

This incident became the focal point of negotiations when the collective bargaining agreement between Local 227 and the bakers came up for renegotiation in 1962. Local 227 insisted upon obtaining a provision

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which would prohibit any of the signatory bakers from using a delivery method which did not utilize Local 227 driver salesmen servicing the racks at the retail stores.

The bakers eventually agreed to the demands of Local 227. Article IV of the collective bargaining agreement prohibited the signatory bakers from having anyone else pick up and deliver their products to retailers, except for members of Local 227 who were to continue providing rack service at the retail outlets. 3

Granddad's predecessor came into existence in 1963. Granddad was never a party to the collective bargaining agreement with Local 227. Granddad was not a baker, but was instead only a distributor which had to purchase its products from the wholesale bakers.

Granddad initially purchased its bread from Ashbrook. However, in 1964, Ashbrook refused to sell any more bread to Granddad unless Granddad terminated its wholesale selling to retail outlets and confined its sales to residences.

Unable to find another quality wholesale baker who would sell bread to them in the Seattle area for resale to retailers, Granddad found a baker in Canada. Thereafter, Granddad relied upon the Canadian baker as its source of supply.

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During the damage period of 1967 to 1971, Granddad continued its distribution of bread to retail outlets. According to Granddad, the various defendants engaged in various predatory practices during this period for the purpose of driving Granddad out of business.


Granddad raises two principal issues on appeal. The first is whether Continental's participation in the formation or application of Article IV of the collective bargaining agreement came within the labor...

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