Norman Tobacco & Candy Co. v. Gillette Safety Razor Co.

• Decision Date: 31 May 1960
• Docket Number: Civ. A. No. 8458.
• Court: U.S. District Court — Northern District of Alabama
• Parties: NORMAN TOBACCO & CANDY CO., Inc., a corporation, Plaintiff, v. GILLETTE SAFETY RAZOR CO. et al., Defendants.

197 F. Supp. 333

NORMAN TOBACCO & CANDY CO., Inc., a corporation, Plaintiff, v. GILLETTE SAFETY RAZOR CO. et al., Defendants.

Civ. A. No. 8458.

United States District Court N. D. Alabama.

May 31, 1960.

Harry B. Cohen, Birmingham, Ala., for plaintiff.

Douglas Arant, John J. Coleman, Jr., White, Bradley, Arant, All & Rose, Birmingham, Ala., for defendants.

GROOMS, District Judge.

This action, filed by a tobacco wholesaler against a manufacturer of razors, razor blades and shaving cream¹ seeks to recover treble damages and an injunction² for alleged violations by the Defendant of various sections³ of the federal antitrust laws commonly referred to as the Sherman, Clayton and Robinson-Patman Acts. The Plaintiff, by separate action, filed in this Court at the same time as this one, against the same Defendant also sought damages for breach of an alleged requirements agreement. That case (hereinafter sometimes called the "contract" case) resulted in a jury verdict for the Defendant and judgment thereon which was affirmed on appeal. Norman Tobacco & Candy Co. v. Gillette Safety Razor Co., 5 Cir., 1959, 264 F.2d 751.

The Complaint, in the present action has been dismissed with leave to amend and has been amended by the Plaintiff on three occasions. As last amended it contained six counts: I, II, III, IV, V and IX. Count III, based upon Section 3 of the Robinson-Patman Act (15 U.S.C.A. § 13a) is no longer before the Court.⁴

On January 12, 1960 the Defendant filed certain Motions for Summary Judgment in this action.⁵ Specifically the Defendant moves for judgment in its favor upon each of four separate grounds, viz.: (1) That the action is barred by the Alabama statute of limitations of one year; (2) that the action is barred by the judgment of this Court in the contract case; (3) that the issues in this case essential to support a recovery for plaintiff herein were decided adversely to Plaintiff in the contract case, and Plaintiff, hence, is estopped to raise them in this action; and (4) that there is no genuine issue of material fact involved and Defendant is entitled, on the record, to judgment as a matter of law.

To these Motions Plaintiff filed its "Response in Opposition to Defendant's Motion for Summary Judgment" incorporating therein, inter alia, pre-trial depositions taken by Plaintiff of certain agents and officers of Defendant, affidavits of Plaintiff's officers, of present and former sales personnel of Plaintiff and of a customer of the Plaintiff.

The Court has considered all of the materials and evidence relied upon by each of the parties and has reached the conclusion for reasons hereinafter set forth that this action is barred by the one year statute of limitations of Alabama. The Court accordingly does not deem it necessary to consider the other grounds⁶ of the Defendant's said Motions and does not pass upon them.

Prior to January 7, 1956, there was no federal statute specifically applicable to antitrust actions brought under United States laws. And, since the early decision of the United States Supreme Court in Chattanooga Foundry & Pipe Works v. City of Atlanta, 1906, 203 U.S. 390, 27 S.Ct. 65, 66, 51 L.Ed. 241,⁷ the Courts uniformly have held that the statute of limitations of the state in which the action is brought applies to the federally created rights to sue under the antitrust laws. Burnham Chemical Co. v. Borax Consolidated, Ltd., 9 Cir., 1948, 170 F.2d 569. Such has been the consistent view of the United States Court of Appeals for the Fifth Circuit.⁸

On July 7, 1955, Congress passed an Act amending the Clayton Act which provided for a time limitation of 4 years upon actions instituted under the United States antitrust laws. This Act, which is codified as paragraph B of Section 4 of the Clayton Act (15 U.S.C.A. § 15b) became effective on January 7, 1956. However, it is clear that it was intended to be prospective in effect only, so as not to revive claims previously barred by applicable state statutes of limitations.⁹

Alabama has no statute of limitations applying in terms to antitrust actions or to actions based upon statute other than for penalty or forfeiture. According to the better view, an action for treble damages under the United States antitrust laws is compensatory and remedial and in the nature of a tortious interference with the rights of others. See, e. g. Crummer Co. v. DuPont, 5 Cir., 1955, 223 F.2d 238 and cases cited therein. So construed the applicable statute is subdivision 5, § 26, Title 7, Code of Ala.1940, which provides a limitations period of one year. This section has been held to apply to an action based upon an Act of Congress (Local Trademarks v. Price, 5 Cir., 1948, 170 F.2d 715) and the Court rules accordingly that the Alabama one year limitations statute¹⁰ is applicable.

In applying the statute of limitations to this case the Court takes cognizance of the fact that, as conceded by Plaintiff,¹¹ the real thrust of this action is the refusal of Defendant to sell its products to Plaintiff. It is undisputed that Defendant removed Plaintiff from its so-called "direct list" of customers in 1949 soon after the change in ownership of Plaintiff's capital stock¹² was brought to Defendant's attention. This fact was known to Plaintiff by April 1950, if not before¹³ but its action herein was not filed until August 3, 1956. It seems clear therefore that the alleged wrongful refusal to sell upon which Plaintiff relies was "barred under existing law" (i. e. by the Alabama one year statute) upon January 7, 1956, the effective date of the federal limitations act. The Plaintiff, in its complaint seeks to avoid this conclusion by its allegations common to each count (1) that Defendant's "wrongful acts" have occurred and persisted continuously from, to-wit, the first day of September, 1949 up to and including the present date, and (2) that, in any event Plaintiff's causes of action were fraudulently concealed from it until shortly before August, 1956, the date of filing of its action.

With respect to the first of these contentions Plaintiff does not point to, and the Court has been unable to find in the entire record, any evidence of the commission by Defendant within the limitations period of any act violative of the antitrust laws. It would extend the length of this opinion unduly if the Court were to attempt to summarize all the evidence upon which Plaintiff relies. However, for illustrative purposes only, the Court is of the view that the record evidence most favorable to the Plaintiff falls generally within three categories: (1) evidence concerning personal contacts between Plaintiff and Defendant, (2) evidence concerning written communications between Plaintiff and Defendant, and (3) evidence involving the statements and activities of Plaintiff's competitors. These categories of evidence viewed from Plaintiff's standpoint (although in many respects denied by Defendant) are in summary form as follows:

1. A number of personal contacts between representatives of Plaintiff and Defendant took place between August 22, 1949 and January 7, 1955. There is evidence to the effect that on some of these occasions orders were given to Defendant's representatives and assurances made by them that such orders would be filled and Plaintiff's needs and requirements for Gillette products taken care of. Subsequent to January 7, 1955, however, representatives of Plaintiff and Defendant came into contact on only three occasions. The first of these occurred in March, 1956 when Plaintiff's President A. L. Roseman attended a tobacco convention in Chicago "for the purpose of seeing why we were not getting shipments on Gillette blades" where he conferred with Paul A. Shipman, Defendant's Customer Relations Manager. Mr. Shipman stated that "he still couldn't understand why we hadn't received shipment of blades"; that Gillette required its wholesalers to adhere to prices, to pay their bills, and to take an active part in promoting Gillette products; and that he would see to it that the Gillette District Manager in Jacksonville, Florida called upon the Plaintiff. Subsequently, in June or July 1956 Defendant's Alabama sales representative called upon Plaintiff.¹⁴ The third and last visit in point of time was made by Defendant's District Manager Smiley in July 1956. According to Plaintiff "Mr. Smiley came in and shook hands and said right at that time they had adequate coverage, and he left."

2. The correspondence and other written materials exchanged between Plaintiff and Defendant are referred to in Plaintiff's answers to Defendant's interrogatories and appear as exhibits to certain depositions of Defendant's officers and agents taken in this action by Plaintiff. The Court will refer to some of these materials in more detail in dealing with the Plaintiff's claim of fraudulent concealment. It is sufficient here to point out that the only materials exchanged between the parties subsequent to January 7, 1955 were Plaintiff's letter of June 13, 1956 to Defendant¹⁵ and Defendant's reply of June 15, 1956.¹⁶

3. The Court is cognizant also of, and has given consideration to, certain deposition testimony of Plaintiff's President concerning statements made to him by Plaintiff's competitors or to their own employees, as subsequently reported to him, involving the decision of such competitors of Plaintiff not to sell Gillette products to Plaintiff. These statements, for the most part made and known to Plaintiff many years before the allowable limitations period, occurring independently of each other, without implicating the Defendant in any way, fall far short of demonstrating the existence of a conspiracy with, or the doing of any wrongful act by, the Defendant.

The Court concludes that none of the foregoing categories of evidence may reasonably be construed to support a finding that Defendant alone, or in concert with others, wrongfully refused to sell its products to Plaintiff within the...