Kentucky-Tennessee Light & P. Co. v. Nashville C. Co., 151.

• Decision Date: 13 March 1941
• Docket Number: No. 151.,151.
• Citation: 37 F. Supp. 728
• Court: U.S. District Court — Western District of Kentucky
• Parties: KENTUCKY-TENNESSEE LIGHT & POWER CO. v. NASHVILLE COAL CO. et al.

37 F. Supp. 728

KENTUCKY-TENNESSEE LIGHT & POWER CO. v. NASHVILLE COAL CO. et al.

No. 151.

District Court, W. D. Kentucky.

March 13, 1941.

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Lynne A. Warren, of New York City, and James W. Stites and Doolan, Helm, Stites & Wood, all of Louisville, Ky., for plaintiff.

Allen & Clarke, of Louisville, Ky., and McConnico, Armistead, Waller & Davis and Norvell & Minick, all of Nashville, Tenn., for Nashville Coal Co. and Justin Potter.

Laurence B. Finn and Finn & Orendorf, all of Bowling Green, Ky., for defendant Henry D. Fitch.

MILLER, District Judge.

This action was brought by the plaintiff Kentucky-Tennessee Light and Power Company against the defendants, Nashville Coal Company, Justin Potter and Henry D. Fitch to recover $315,202.11 as treble damages claimed to have been suffered by the plaintiff by reason of violation of the provisions of the Robinson-Patman Price Discrimination Act, Title 15 U.S.C.A. § 13 (c). The action is authorized by Section 4 of the Clayton Act, Title 15 U.S.C.A. § 15. The matter is before the court on defendants' motions to dismiss the complaint, to make the complaint more definite and to strike from the record a bill of particulars filed by the plaintiff. The points raised by the various motions have been thoroughly and extensively briefed by eleven separate briefs to such an extent as to make it impractical for the court to discuss the various questions presented in as much detail as discussed in the briefs.

The complaint states the following facts: The plaintiff, Kentucky-Tennessee Light and Power Company, (hereinafter referred to as K-T Company) is a Kentucky corporation, and owns and operates plants for the manufacture or supplying of water, light or electric power at Frankfort, Bowling Green, Hopkinsville, Mayfield and Cadiz in the State of Kentucky, and at Jellico, Martin and Clarksville, in the State of Tennessee. The defendant, Henry D. Fitch, was president and chief officer of the K-T Company. The Nashville Coal Company (hereinafter referred to as the Coal Company) is a Tennessee corporation having an agent residing in Louisville, Kentucky. The defendant, Justin Potter, is a resident of Tennessee and the president of the Coal Company. On March 7, 1933, the Coal Company through Potter entered into a written contract with the K-T Company whereby the Coal Company agreed to sell and deliver to the K-T Company the coal which was necessary to meet the entire requirements of the K-T Company for a period of five years beginning April 1, 1933, shipments to be made as and when directed. On April 6, 1937, the Nashville Coal Company executed another contract with the K-T Company containing substantially the same provisions as the contract of March 7, 1933, but this contract was dated back to March 7, 1933, and provided that it was to run for a period of ten years. Subsequent to March 7, 1933, the K-T Company purchased its coal requirements from the Coal Company, and in particular purchased 211,565.89 tons of coal at the price of $244,395.42 between the dates of June 19, 1936 (the effective date of the Robinson-Patman Act) and September 12, 1939, which date marked the end of the acts complained of. It is alleged that the Coal Company through Potter, without knowledge on the part of the K-T Company, paid Fitch a commission of from ten cents to fifteen cents a ton on all of the coal purchased under said contracts between the dates above mentioned, which payments were not for any services rendered by Fitch in connection with the sale or purchase of said coal, but were made solely for the purpose of inducing Fitch to purchase on behalf of the K-T Company from the Coal Company the coal so purchased at prices far in excess of the fair market value of such coal; that between said dates Fitch without the knowledge of the K-T Company received and accepted a commission from ten cents to fifteen cents a ton on all of the coal purchased under said contracts; that Fitch during said times was a full-time employee of the K-T Company at a salary of $25,000 per year, and was not acting for or on behalf of the Coal Company or as its agent in said transactions. It is charged that the Coal Company maintained an account on its books known as "N. W. Moore Commission Account, No. 45", and that the payments made by the Coal Company to Fitch were listed in this account and amounted to the sum of $28,500.08. The K-T Company alleges that it could have purchased coal of similar or better kind and quality from others at greatly reduced prices, and that it was injured in its business and property by reason of such excessive prices in the sum of $105,067.37. The complaint states that the Coal Company, Potter and Fitch in the negotiation and performance of said contracts were engaged in interstate commerce, and that the Coal Company shipped coal under said contract from mines in Tennessee to the K-T plants in Kentucky and from mines in Kentucky to the K-T plants in Tennessee; and that all of the negotiations regarding said contracts and purchases were carried on with the Coal Company through Potter, and the payment of commissions was made by and through Potter to Fitch. The complaint files as exhibits photostatic copies of the two contracts referred to and the Commission Account No. 45 in the name of N. W. Moore, and a detailed statement showing the dates, kind and price of coal shipped for all purchases by the K-T Company from the Coal Company from June 19, 1936, through August 31, 1939, for the plants of the K-T Company at Bowling Green, Hopkinsville, Mayfield and Frankfort, Kentucky, and at Clarksville and Martin, Tennessee. A bill of particulars filed later lists all shipments of coal which moved in interstate commerce, included in said purchases, giving the name of the shipper, origin and destination of the shipment, its date, amount, kind and price.

All three defendants have filed motions to dismiss the complaint. The Coal Company and Potter filed motions for a bill of particulars setting out in detail additional information requested. Defendant Fitch filed a motion to make the complaint more definite and certain by stating what acts are relied upon as constituting interstate commerce. Defendant Fitch also filed a motion to strike from the complaint the allegations pertaining to the N. W. Moore Commission Account No. 45 and that exhibit. Without waiting for these motions to be acted upon the plaintiff filed a bill of particulars which set out in detail the facts pertaining to its business, the various shipments of coal from the Coal Company to the plaintiff, and copies of correspondence and testimony given in hearings before the Securities and Exchange Commission. Thereafter defendant Fitch moved to strike the bill of particulars from the record.

I think it is unnecessary to devote much time to a discussion of the motions to make the petition more definite, for a bill of particulars and the motions to strike. From the facts above stated it is apparent that the exhibits filed with the complaint and the bill of particulars filed later gave to the defendants all the information which it is necessary for them to have in order to determine what facts and transactions are relied upon by the plaintiff. They are given with considerable detail. There may be additional information which the defendants desire to have, but it can be obtained in other ways, such as by interrogation and discovery. I see no reason why the pleadings should be loaded down with miscellaneous information in the nature of evidence pertaining to the issues involved, provided that the allegations of the complaint are sufficiently definite to show what acts and transactions are relied upon as constituting the alleged cause of action. The allegations and exhibits dealing with the N. W. Moore Commission Account No. 45 is in the nature of a bill of particulars in order to enable the defendants to know what facts the plaintiff intends to show in support of its allegation that the payments made to Fitch were made secretly and are not prejudicial to any of the defendants. I recognize the contention of defendant Fitch that the mere existence of the commission account does not show he had knowledge of it, and if plaintiff's evidence should fail to connect this defendant with the keeping of the account in that way such evidence might be incompetent and should not be submitted to a jury. But that is an entirely different question than the one raised by a motion to strike certain allegations from a complaint. All of these motions (excepting motions to dismiss) are being considered as directed to the complaint after it has been supplemented by the bill of particulars and considering the detailed information furnished by the bill of particulars they are overruled.

Motions to Dismiss.

The motions to dismiss raise the real issues in this case. Inasmuch as all three defendants rely in the main upon the same grounds the motions will be discussed jointly. The underlying theory of the motions, advanced by way of six separate contentions, is that the provisions of the Robinson-Patman Act, relied upon by the plaintiff, do not apply to the transactions complained of in the complaint. In discussing these contentions it is accordingly necessary to have before us the exact wording of the statutory provisions under consideration. It is Section 1(c) of the Robinson-Patman Act which amends Section 2 of the Clayton Act, (approved October 15, 1914), which act was in itself an amendment to the Sherman Anti-Trust Act of July 2, 1890, 15 U.S.C.A. §§ 1-7, 15 note. It is set out in Title 15 U.S.C.A. § 13(c), and reads as follows: "It shall be unlawful for any person engaged in commerce, in the course of such commerce, to pay or grant, or to receive or accept, anything of value as a commission, brokerage, or other compensation, or any allowance or discount in lieu thereof, except for services rendered in connection with...