Solinger v. A&M Records, Inc.

Decision Date27 November 1978
Docket NumberNo. 76-2965,76-2965
Citation586 F.2d 1304
Parties1978-2 Trade Cases 62,401 Jack SOLINGER, Plaintiff-Appellant, v. A&M RECORDS, INC., Transamerica Corp., United Artists Corp., United Artists Records, Inc., Eric-Mainland Distributing Co., Musical Isle of America, Record Merchandising Company, Inc., Jerome S. Moss, Robert Fead, Sidney Talmadge, Motown Record Corporation, Defendants-Appellees.
CourtU.S. Court of Appeals — Ninth Circuit

Francis G. Willmarth (argued), of Long & Levit, San Francisco, Cal., for plaintiff-appellant.

Thomas P. Lambert (argued), Mitchell, Silberberg & Knupp, Los Angeles, Cal., for defendants-appellees.

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

Before BARNES, TRASK and HUG, Circuit Judges.

BARNES, Senior Circuit Judge:

This is an appeal from a district court judgment dismissing a private antitrust action brought under sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 and 2, and sections 4 and 7 of the Clayton Act, 15 U.S.C. §§ 15 and 18 on the ground that the plaintiff lacked standing to sue for damages under section 4 of the Clayton Act.

I

Jack Solinger, the former president and general manager of Independent Music Sales, Inc. (I.M.S.), an independent distributor of phonographic records and tape recordings, by an original and an amended complaint, sued A&M Records, Inc. (A&M) and Motown Record Corporation (Motown) for damages arising from alleged antitrust violations, including a territorial allocation scheme. Solinger in his original complaint, had sued Transamerica Corporation for violating section 7 of the Clayton Act and section 2 of the Sherman Act. He alleged that Transamerica engaged in improper corporate mergers and consolidations, stock acquisitions, and acquisitions of corporate assets. He further alleged that these acquisitions of manufacturers, including defendant United Artists, and distributors, including defendants United Artists Records, Inc., Eric-Mainland, Musical Isle of America, Record Merchandising Co., Inc., and individually named officers thereof, Moss, Fead and Talmadge, resulted in a direct lessening of competition in the record distribution industry.

Until March 1973, I.M.S. was the principal independent distributor of phonographic records and tape recordings in northern California and acted as the distributor for defendants A&M and Motown, two large manufacturers of records and tape recordings. 1 As a distributor for these companies, I.M.S. principally serviced northern California, but also sold A&M and Motown products to certain retail accounts in southern California. The latter named area, however, was primarily serviced for A&M and Motown by another distributor, Record Merchandising Company.

In 1972 and 1973, Solinger negotiated on his own behalf to purchase I.M.S. from its sole shareholder, Zenith Distributing Company. He obtained financing, and negotiated both a written but unsigned purchase agreement, and a written but unsigned "Rental and Service Agreement" from Zenith. The purchase was to be made by J.N.S. Enterprises, an entity Solinger intended to create for that purpose.

Before signing the final papers, Solinger contacted both A&M and Motown to determine whether they would retain I.M.S. as their distributor after such a purchase. Both companies indicated that they would Not retain I.M.S. Solinger contends that he did not complete the purchase of I.M.S. because I.M.S. could not survive without the A&M and Motown contracts. Shortly thereafter, both companies terminated I.M.S. as a distributor and without these two contracts, I.M.S. went out of business.

Solinger alleges that A&M and Motown refused to deal with him and with I.M.S. because, pursuant to his specific directions as president, I.M.S. had refused to comply with a territorial allocation plan established by A&M and Motown under which northern and southern California were divided into two separate territories. Solinger also alleges that after A&M and Motown terminated their distribution agreements with I.M.S., Eric-Mainland Distributing Company became the distributor for both A&M and Motown products for northern California and began to comply with a territorial allocation plan under which it would not sell A&M and Motown products in southern California.

II

The district court granted Motown's motion to dismiss Solinger's complaint (as to Motown alone) on the ground that the complaint failed to state a claim upon which relief could be granted. Thereupon all other defendants filed similar motions. The court filed a final judgment in favor of all defendants on June 29, 1976, stating only that "the action be, and hereby is dismissed." Although the grounds for dismissal were not stated in the order, the court indicated that "basically" the plaintiff lacked standing. 2

Under Fed.R.Civ.P. 12(b)(6), however, if there is a motion to dismiss for failure to state a claim upon which relief can be granted, and matters outside the pleadings are presented to and not excluded but are heard by the court, the motion is to be treated as one for summary judgment and disposed of as provided in Fed.R.Civ.P. 56, and particularly 56(c) thereof. Because material outside the pleadings was presented in this case, the judgment must be held to be one for summary judgment. Dorado v. Kerr, 454 F.2d 892, 896 (9th Cir. 1972).

It is elementary that the district court before granting summary judgment must determine that no genuine issue of material fact exists, and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Baldwin v. Redwood City, 540 F.2d 1360 (9th Cir. 1976); Great Western Bank & Trust v. Kotz, 532 F.2d 1252, 1254 (9th Cir. 1976); Zweig v. Hearst Corp., 521 F.2d 1129, 1133 (9th Cir.), Cert. denied, 423 U.S. 1025, 96 S.Ct. 469, 46 L.Ed.2d 399 (1975). When no finding is made by the court specifying with particularity what material facts have been established, and without a finding that no material factual issues remain, there is no way in which a reviewing court can pass upon the merits of the controversy when the judgment is appealed. We have no power to judge the fact issue de novo. Hycon Manufacturing Co. v. H. Koch & Sons, 219 F.2d 353, 355 (9th Cir.), Cert. denied, 349 U.S. 953, 75 S.Ct. 881, 99 L.Ed. 1278 (1958).

Because we are required to review this case as one for summary judgment, and because the court failed to determine whether any genuine issues of material fact exist and whether the plaintiff is entitled to judgment as a matter of law, we remand part of the case to the district court for further proceedings to determine what the undisputed facts are, and that no material factual issues remain; and, if that be true, whether Solinger has standing. As discussed in the remainder of this opinion, we affirm as a matter of law the district court's determination that plaintiff does not have standing to pursue his claim under section 7 of the Clayton Act.

III

Section 4 of the Clayton Act, 15 U.S.C. § 15 (1976) provides a private cause of action for those parties injured by antitrust violations such as the ones alleged by Solinger in his complaint: violations of sections 1 and 2 of the Sherman Act and sections 4 and 7 of the Clayton Act, 15 U.S.C. §§ 1, 2, 15 and 18. Section 4 provides:

Any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor in any district court of the United States in the district in which the defendant resides or is found or has an agent, without respect to the amount in controversy, and shall recover threefold the damages by him sustained, and the cost of suit, including reasonable attorney's fee.

15 U.S.C. § 15. Despite the broad language of this provision, the parties entitled to recover under this section have been greatly limited through judicially created restrictions on standing. See generally L. Sullivan, Handbook of the Law of Antitrust § 247, at 770 (1977); Berger & Bernstein, An Analytical Framework for Antitrust Standing, 86 Yale L.J. 809 (1977); Lytle & Purdue, Antitrust Target Area Under Section 4 of the Alleged Antitrust Violation, 25 Am.U.L.Rev. 795 (1976).

In order to have standing under section 4 the plaintiff must allege nonconclusory facts establishing that there has been injury to the plaintiff's business or property and that the injury to the plaintiff's business or property occurred "by reason of" the antitrust violation. The plaintiff's claim may be dismissed for lack of standing as a matter of law, John Lenore & Co. v. Olympia Brewing Co., 550 F.2d 495, 500 (9th Cir. 1977), where there is an insufficient showing of causation. However, if the plaintiff states sufficient facts to support his allegations that an antitrust violation has occurred and that he has sustained injury to his business or property, he is generally entitled to go to the jury on the violation and injury issues. These two determinations, unlike causation, are not questions of law; they are questions of fact. See Woods Exploration & Producing Co. v. Aluminum Co. of America, 438 F.2d 1286 (5th Cir. 1971), Cert. denied, 404 U.S. 1047, 92 S.Ct. 701, 30 L.Ed.2d 736 (1972), Aff'd after retrial, 509 F.2d 784 (5th Cir.), Cert. denied, 423 U.S. 833, 96 S.Ct. 59, 46 L.Ed.2d 52 (1975) (whether plaintiff is a prospective purchaser is a question of fact for the jury); Pacific Seafarers, Inc. v. Pacific Far East Line, 48 F.R.D. 347, 351 (D.D.C.1969) (determination on motion to dismiss is only whether the pleadings present a triable antitrust issue and show the requisite causation).

IV

As stated above, Solinger alleges in his complaint that the defendants committed actions that violate sections 1 and 2 of the Sherman Act and sections 4 and 7 of the Clayton Act, 15 U.S.C. §§ 1, 2, 15 and 18. This Court determines that Solinger has made a sufficient showing of antitrust violations in his complaint to survive a motion to dismiss, in...

To continue reading

Request your trial
50 cases
  • CONSORTIUM OF COM. BASED ORGANIZATIONS v. Donovan
    • United States
    • U.S. District Court — Eastern District of California
    • January 11, 1982
    ...... See Solinger v. A & M Records, Inc., 586 F.2d 1304, 1307-08 (9th Cir. 1978), cert. denied 441 U.S. 908, 99 ......
  • In re Airport Car Rental Antitrust Litigation
    • United States
    • U.S. District Court — Northern District of California
    • June 25, 1979
    ...they have placed a restrictive gloss on them in order to limit the range of potential antitrust plaintiffs. See Solinger v. A & M Records, Inc., 586 F.2d 1304, 1308 (9 Cir. 1978), cert. denied, ___ U.S. ___, 99 S.Ct. 1999, 60 L.Ed.2d 377 (1979); John Lenore & Co. v. Olympia Brewing Co., 550......
  • City of Oakland v. Raiders, Case No. 18-cv-07444-JCS
    • United States
    • U.S. District Court — Northern District of California
    • April 30, 2020
    ...Hardin Const. Co. , LLC, No. CIV.S-04-2728FCDDAD, 2005 WL 2615523, at *6 (E.D. Cal. Oct. 14, 2005).11 One case, Solinger v. A&M Records, Inc. , 586 F.2d 1304 (9th Cir. 1978), involved somewhat more similar facts in that the plaintiff wished to distribute the defendants' records rather than ......
  • Stein v. United Artists Corp.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • November 3, 1982
    ...Inc., 648 F.2d 527, 537 (9th Cir. 1980), cert. granted, 454 U.S. 1141, 102 S.Ct. 998, 71 L.Ed.2d 292 (1982); Solinger v. A & M Records, Inc., 586 F.2d 1304, 1310 (9th Cir. 1978), cert. denied, 441 U.S. 908, 99 S.Ct. 1999, 60 L.Ed.2d 377 (1979); Bosse v. Crowell, Collier & MacMillan, 565 F.2......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT