S & W CONST. v. Dravo Basic Materials Co., Civ. A. No. J91-0145(L).

• Decision Date: 04 September 1992
• Docket Number: Civ. A. No. J91-0145(L).
• Citation: 813 F. Supp. 1214
• Court: U.S. District Court — Southern District of Mississippi
• Parties: S & W CONSTRUCTION AND MATERIALS COMPANY, INC., Plaintiff, v. DRAVO BASIC MATERIALS COMPANY, INC., Defendant.

813 F. Supp. 1214

S & W CONSTRUCTION AND MATERIALS COMPANY, INC., Plaintiff, v. DRAVO BASIC MATERIALS COMPANY, INC., Defendant.

Civ. A. No. J91-0145(L).

United States District Court, S.D. Mississippi, Jackson Division.

September 4, 1992.

COPYRIGHT MATERIAL OMITTED

Wayne Dowdy, Magnolia, William C. Walker, Jr., Oxford, MS, for plaintiff.

John G. Corlew, Paul H. Stephenson, III, Jackson, MS, for defendant.

MEMORANDUM OPINION AND ORDER

TOM S. LEE, District Judge.

This cause is before the court on the motion of defendant/counter-plaintiff Dravo Basic Materials Co., Inc. (Dravo) for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. Plaintiff/counter-defendant S & W Construction and Materials Co., Inc. (S & W) has submitted its response to the motion. The court has considered the memoranda of authorities together with attachments submitted by the parties and concludes that Dravo's motion is well taken and should be granted.

I. S & W'S ALLEGATIONS

S & W, a construction material supplier,¹ brought this action against Dravo, a producer and supplier of aggregate materials such as oyster and reef shell, asserting a claim for unlawful price discrimination under § 2(a) of the Robinson-Patman Act,² as well as state law claims for intentional interference with contracts and prospective contracts and conspiracy to destroy S & W's business.

S & W charged that on October 11, 1989, Dravo, through one of its vice-presidents Steve Allen, met with one of S & W's competitors in the Gulf Coast area, W.C. Fore of Coast Materials (Coast), and entered into a conspiracy to fix prices in an effort to destroy competition and, in particular, to destroy S & W's business. Specifically, S & W alleged that Allen agreed to and allowed Fore to purchase two barges of reef shell at a price of $10.50 per cubic yard, which was $1.50 less than the $12.00 price charged S & W for like grade and quality of reef shell.³ According to S & W, the $10.50 price prevented S & W from profiting on shell deliveries to three jobs— "City of Gulfport," "Forrest Avenue" and "Division Street" — on each of which S & W was an "alternate bidder" to Coast.⁴ S & W additionally alleged that, in accordance with their agreement and as part of the conspiracy with Coast, Dravo refrained from delivering shell to Coast's competitors in Harrison and Hancock counties; continued to charge Coast a lower price for 1990 shell deliveries than it charged S & W; delayed deliveries of shell to S & W; and refused to quote or even inform S & W that it would not quote "shell prices" until it was too late for S & W to bid in competition with Dravo on the "Vicksburg Corps of Engineers project." S & W seeks treble damages under § 4 of the Clayton Act⁵ for Dravo's alleged Robinson-Patman violation, as well as an award of punitive damages under its state law claims.

Dravo does not contest that Allen did in fact meet with Fore on October 11, 1989, and agreed to sell and deliver to Coast two barges of reef shell at a price of $10.50 per cubic yard. Dravo does contend, however, that the $10.50 price afforded Coast did not violate Robinson-Patman due to the fact that there was no substantial lessening of competition since the one-time price allowance covered only prior commitments Coast made months before the October 11, 1989, meeting.⁶ Dravo further maintains that the $10.50 price did not yield an adverse price difference sufficient to create a Robinson-Patman violation when compared to the prices afforded S & W during the same time period. Finally, Dravo asserts that even if S & W could establish a prima facie Robinson-Patman violation, summary judgment in its favor is in order since S & W cannot show the antitrust injury necessary to recover under § 4 of the Clayton Act. Dravo also seeks summary judgment on its counterclaim against S & W for S & W's failure to pay Dravo $18,701.52 for goods previously sold, delivered and accepted.

II. SUMMARY JUDGMENT STANDARD

This court's analysis of Dravo's motion for summary judgment must necessarily focus on the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits" submitted by the parties. Fed.R.Civ.P. 56(c). Under Rule 56, the party moving for summary judgment must come forward with an initial showing that it is entitled to judgment. This burden "may be discharged by `showing' —that is, pointing out to the district court—that there is an absence of evidence to support the nonmoving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 2554, 91 L.Ed.2d 265 (1986). Once the movant makes a properly supported motion, the burden shifts to the nonmovant to demonstrate the existence of a genuine dispute. Under Rule 56(e), "an adverse party may not rest upon the mere allegations or denials of the adverse party's pleading, but the adverse party's response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e) (emphasis added). When summary judgment is requested in the context of antitrust litigation, adherence to this standard is appropriate. See, e.g., Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

Applying these standards, the court first concludes that Dravo has presented a properly supported motion pointing out to the court the absence of evidence to support either S & W's Robinson-Patman claim or its state law claims. The court further finds that S & W's response to the motion has failed to demonstrate the existence of a genuine dispute as to any fact material to the resolution of this case. Therefore, for the reasons that follow, the court is of the opinion that Dravo is entitled to judgment as a matter of law as to all claims asserted against Dravo by S & W, as well as Dravo's counterclaim.

III. THE ALLEGED VIOLATION OF THE ROBINSON-PATMAN ACT

In order to recover treble damages under § 4 of the Clayton Act, "a plaintiff must prove (1) a violation of the antitrust laws, (2) cognizable injury attributable to the violation, and (3) at least the approximate amount of the damage." Chrysler Credit Corp. v. J. Truett Payne Co., Inc., 670 F.2d 575, 579 (5th Cir.1982) (citations omitted). The antitrust violation alleged in this case is unlawful price discrimination affecting secondary line competition, "that is, price discrimination by the seller which affects competition among its buyers." Id. As to secondary line competition, § 2(a) of the Robinson-Patman Act "prohibits price discrimination between different purchasers of commodities of like grade and quality `where the effect of such discrimination may be substantially to lessen competition ... or to injure, destroy, or prevent competition' among the purchasers." Id. (quoting 15 U.S.C.A. § 13(a)). "The reasonable possibility of substantially lessening competition ... requires the plaintiff to prove that the result of the price discrimination `is likely to be a severe, adverse effect on competition.'" Id. (quoting Littlejohn v. Shell Oil Co., 483 F.2d 1140, 1144 (5th Cir.1973) (en banc)). Consequently, in order to show a violation of § 2(a), "plaintiff must demonstrate that the likely effect of the alleged price discrimination was to allow a favored competitor to draw significant sales or profits away from him, the disfavored competitor." Id. (citations omitted).

S & W, recognizing that in order for there to be discrimination between purchasers violative of § 2(a) "`there must be actual sales at two different prices to two different actual buyers,'"⁷ pursues its Robinson-Patman claim on the basis of the price discrepancy between the two barges of reef shell delivered to Coast on November 7, 1989 at a price of $10.50 per cubic yard,⁸ and subsequent sales made to S & W beginning in February of 1990 at a price of $12.00 per cubic yard. An alternative basis for S & W's Robinson-Patman claim is the price discrepancy between reef shell deliveries made to Coast beginning in February of 1990 at a price of $11.50 per cubic yard, and deliveries made to S & W during that same time period at $12.00 per cubic yard.⁹

Dravo first contends that S & W's comparison of the $10.50 sales price allowed Coast on November 7, 1989 and the $12.00 sales price provided S & W beginning in February 1990 is not a correct comparison for purposes of the Robinson-Patman Act. According to Dravo, since the Act requires at least two actual sales to two actual buyers at different prices at the same proximate point in time, the 1990 deliveries to S & W at $12.00 are not relevant to the November 7, 1989 delivery to Coast at $10.50 because the sales occurred at least three months apart and thus were not at the same proximate point in time. Dravo further argues that even if the comparative analysis were $10.50 versus $12.00, there is still no basis for a finding of unlawful price discrimination since the two barges of shell delivered to Coast at $10.50 were to satisfy outstanding commitments on jobs already secured by Coast. As such, according to Dravo, the lower price charged Coast on those two barges could not have the likely effect of substantially lessening competition between Coast and S & W.

The court is of the opinion that it need not determine whether sales occurring approximately three months apart are sufficiently contemporaneous for purposes of Robinson-Patman since the court's conclusion that S & W has failed to demonstrate that the purchases were made "in competition," as required by the Act, is fatal to S & W's Robinson-Patman claim.

Discriminatory pricing is violative of Robinson-Patman only when it lessens or tends to prevent competition between customers or between sellers. To constitute a Robinson-Patman wrong, the price discrimination must occur between competitors in comparable transactions — i.e., where persons receiving the different prices are in

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