Southern Blowpipe & Roofing Co. v. Chattanooga Gas Co.
| Decision Date | 06 May 1966 |
| Docket Number | No. 16327.,16327. |
| Citation | 360 F.2d 79 |
| Parties | SOUTHERN BLOWPIPE & ROOFING CO., Plaintiff-Appellant, v. CHATTANOOGA GAS COMPANY, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Sixth Circuit |
John I. Foster, Jr., Chattanooga, Tenn., Sizer Chambliss, Chattanooga, Tenn., for appellant.
W. D. Spears, Chattanooga, Tenn., for appellee.
Before WEICK, Chief Judge, O'SULLIVAN, Circuit Judge, and CECIL, Senior Circuit Judge.
O'SULLIVAN, Circuit Judge.
This cause presents the appeal of plaintiff-appellant, Southern Blowpipe & Roofing Company, from the entry of a summary judgment in favor of defendant-appellee, Chattanooga Gas Company, in the United States District Court for the Eastern District of Tennessee, Southern Division. Appellant sells and installs gas equipment and appliances in the area of Chattanooga, Tennessee. Its complaint purports to assert a cause of action for itself and on behalf of other sellers and installers of gas equipment and appliances in the Chattanooga area. Appellee is a public utility, with an exclusive franchise to supply gas to consumers in the same area. Appellant's complaint avers that appellee utility competes with it, and other Chattanooga installers and dealers, in the sale and installation of appliances and equipment used in the consumption of gas supplied by the utility. It charged that in methods of sale, service and installation of gas equipment and appliances, the gas company has been guilty of violating the Sherman Anti-Trust Act, 15 U.S.C. Sections 1 and 2.
The District Judge heard the matter upon competing motions for summary judgment, having before him an affidavit supporting defendant's motion, and also the discovery depositions of defendant utility's representatives. Appellant offered no affidavit or other evidentiary opposition to the factual content of defendant's affidavit and the depositions. The District Judge concluded that the undisputed facts failed, as a matter of fact and law, to expose any violation of the Sherman Act by appellee-defendant.
The District Judge's opinion appears to assume that the total thrust of appellant's complaint was that appellee Gas Company was involved in an "attempt to monopolize." He concludes that the undisputed facts as set out in the defendant's affidavit and the discovery depositions disclose that the Gas Company's conduct could not be viewed as a deliberate attempt to creat a monopoly. These facts, however, do not negative an inference that what the Gas Company was doing could, and very probably would, inevitably result in the Gas Company obtaining a monopoly on the sale of all appliances using gas as a source of power. The Gas Company depondents testified that its primary objective was to multiply the number of users of gas; in this effort the Gas Company was opposed by strong competition from TVA electric power; that before it could sell its gas it had to persuade prospective consumers of the economic advantage of gas and an initial consideration of a prospective user was the cost of acquiring and installing the gas consuming appliance. To gain the custom of such users, the Gas Company offers appliances to them at less than its own cost of acquisition and installation. Appellee's sales manager stated "the company does make a profit on more than 90% of its sales, aside from promotional expenses." (Emphasis added.) It is clear, however, that had a proper share of this "promotional expense" been charged to the sale and installation of appliances, it would demonstrate that the customer acquires his appliance for less than the Gas Company's cost. This loss, however, is recouped, we assume, when the Gas Company's rates are set on the basis of its total costs, including the "promotional expense."
The District Judge assumes the foregoing by his recital, "It will be assumed that the defendant is selling appliances at cost or cheaper and that such may unfavorably interfere with the sales by plaintiff and those similarly situated." There can be no quarrel with the District Judge's factual conclusion that the Gas Company did not enter or continue its program for the purpose of monopolizing the gas appliance market. Its clear purpose is to multiply the users of its gas; it had sought to help and encourage others to sell gas appliances and had given certain free service to customers regardless of the source of their original acquisition of...
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