663 F.2d 886 (9th Cir. 1981), 79-3357, Crown Beverage Co., Inc. v. Cerveceria Moctezuma, S.A.

Docket Nº:79-3357.
Citation:663 F.2d 886
Party Name:CROWN BEVERAGE CO., INC., Plaintiff-Appellant, v. CERVECERIA MOCTEZUMA, S.A., and Moctezuma Imports, Inc., Defendants-Appellees.
Case Date:December 14, 1981
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit

Page 886

663 F.2d 886 (9th Cir. 1981)

CROWN BEVERAGE CO., INC., Plaintiff-Appellant,


CERVECERIA MOCTEZUMA, S.A., and Moctezuma Imports, Inc.,


No. 79-3357.

United States Court of Appeals, Ninth Circuit

December 14, 1981

Argued and Submitted Oct. 8, 1981.

Page 887

Patricia Tenoso Sturdevant, Alioto & Alioto, San Francisco, Cal., for plaintiff-appellant.

William J. Meeske, Latham & Watkins, Los Angeles, Cal., argued, for defendants-appellees; Carl W. Witschy, Los Angeles, Cal., on brief.

Appeal from the United States District Court for the Central District of California.

Before BROWNING, Chief Judge, WRIGHT, Circuit Judge, and WEIGEL, [*] District Judge.

Page 888


Cerveceria Moctezuma transferred the exclusive distributorship of its Mexican beers from Crown to Moctezuma Imports, a newly-formed subsidiary of Moctezuma. Crown alleges violations of sections 1 and 2 of the Sherman Act and breach of the distributorship contract. The district court granted summary judgment on the Sherman Act claims and dismissed the contract claim. We affirm.

Absent an anticompetitive intent or effect, a manufacturer may replace one exclusive distributor with another without violating § 1 of the Sherman Act, A.H. Cox & Co. v. Star Machinery Co., 653 F.2d 1302, 1306 (9th Cir. 1981), even if the change is effected by integrating vertically. Bushie v. Stenocord Corp., 460 F.2d 116 (9th Cir. 1972). Crown presented no substantial evidence that the replacement of Crown by Moctezuma Imports was intended to or did reduce competition.

Crown claims that Moctezuma's alleged breach of contract was sufficient evidence of anticompetitive intent to bar summary judgment, citing DeVoto v. Pacific Fidelity Life Insurance Co., 516 F.2d 1 (9th Cir. 1975). The single fact that termination arguably breached the distributorship contract is not in itself sufficiently probative of anticompetitive intent to require denial of a motion for summary judgment. All of the circumstances surrounding the termination-the relationship of the parties, the egregiousness of the breach, the presence of other reasons for termination-affect the reasonableness of drawing an inference of anticompetitive intent. These circumstances made the inference plausible in DeVoto. Crown offers nothing to support an inference of anticompetitive intent except the arguable...

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