Alabama Independent Serv. S. Ass'n v. Shell P. Corp.

• Decision Date: 01 August 1939
• Docket Number: No. 4953.,4953.
• Citation: 28 F. Supp. 386
• Parties: ALABAMA INDEPENDENT SERVICE STATION ASS'N, Inc., et al., v. SHELL PETROLEUM CORPORATION et al.
• Court: U.S. District Court — Northern District of Alabama

28 F. Supp. 386

ALABAMA INDEPENDENT SERVICE STATION ASS'N, Inc., et al., v. SHELL PETROLEUM CORPORATION et al.

No. 4953.

District Court, N. D. Alabama, S. D.

August 1, 1939.

COPYRIGHT MATERIAL OMITTED

William S. Pritchard and Winston B. McCall, both of Birmingham, Ala., for plaintiffs.

Lange, Simpson & Brantley and Jas. A. Simpson, all of Birmingham, Ala., Wm. K. Hall, of Houston, Tex., and A. E. Van Dusen, of New York City, for defendant Texas Co.

Evans Dunn, of Birmingham, Ala., and S. A. Mitchell, C. P. Berry, and R. D. Shewmaker, all of St. Louis, Mo., for defendant Shell Petroleum Corporation.

Gerry Cabaniss and Cabaniss & Johnston, all of Birmingham, Ala., for defendants U. S. Rubber Products, Inc., and Goodyear Tire & Rubber Co.

Lloyd J. Cobb, Cobb & Saunders, and Herman Baginsky, all of New Orleans, La., for defendant Pan-American Petroleum Corporation.

Fred S. Ball and Chas. A. Ball, both of Montgomery, Ala., for defendant General Tire & Rubber Co.

Douglas Arant, of Birmingham, Ala., J. S. Atkinson, of Shreveport, La., and Archie D. Gray, of Houston, Tex., for defendant Gulf Refining Co.

Douglas Arant, of Birmingham, Ala., Chas. G. Middleton, of Louisville, Ky., and J. H. Joss, of Akron, Ohio, for defendant Firestone Tire & Rubber Co.

Douglas Arant, of Birmingham, Ala., and Chas. G. Middleton, of Louisville, Ky., for defendant Standard Oil Co.

Martin, Turner & McWhorter, Wm. Logan Martin, and Henry Upson Sims, all of Birmingham, Ala., for defendant B. F. Goodrich Co.

MURPHREE, District Judge.

This case has been submitted upon the plaintiffs' prayer for a temporary injunction and the several motions of the several defendants, the latter being motions to dismiss on numerous grounds, motions to strike the complaint and parts of the complaint, motions to sever and for separate trial, and motions to make more definite and certain. Due to the large number of these motions and their many common grounds, they will be considered collectively.

The temporary injunction will be denied because insufficient facts appear in the complaint, as amended, to permit formulation of an effective order which will not unduly hamper the defendants, especially in the event that a trial of this cause proves the defendants guiltless of the charges of the complaint. This decision is also founded upon the difficulty of formulating any decree on the basis of the incomplete and undetailed facts appearing to the court in the allegations of the complaint, as amended, and also by the contradictions of the complaint, as amended, appearing in the affidavits, depositions and answers to interrogatories filed by the defendants.

The most serious question presented by the motions to dismiss is whether or not sufficient facts are alleged to constitute a cause of action. This question in turn has two aspects: (1) Are the acts charged against the defendants violations of the anti-trust laws, and (2) are the acts charged against the defendants in the course of interstate commerce?

At this point it may be worth while to advert to the question whether facts appearing in affidavits, depositions and answers to interrogatories may be considered in the disposition of a motion to dismiss. Rule 12(b) of the Rules of Civil Procedure, 28 U.S.C.A. following section 723c, provides that "every defense, in law or fact, to a claim for relief in any pleading * * * shall be asserted in the responsive pleading thereto if one is required, except that the following defenses may at the option of the pleader be made by motion: (1) lack of jurisdiction over the subject matter * * * (6) failure to state a claim upon which relief can be granted. * * *" This rule differs significantly from the former Equity Rule 29, 28 U.S. C.A. following section 723, in that the latter provided only for "every defense in point of law arising upon the face of the bill" by motion. We are of the opinion that the affidavits, depositions and answers to interrogatories may be considered here on all of the motions, the latter being within the terms of Rule 12(b) defenses in law and fact. However, consideration of these evidential matters in this case does not add greatly to the force of the defendants' motions because most of the statements of fact therein are either simple contradictions of the plaintiffs' allegations or conclusions of law, or are consistent with the existence of the crucial facts set out in the complaint, as amended, and not in avoidance thereof.

Are the alleged acts of the defendants in violation of the anti-trust laws, assuming for the moment that they are done in the course of interstate commerce? The essential objection to the complaint in this respect is that it only charges that a different and lesser price is offered by the defendant oil companies for tank car lots of gasoline than for tank wagon or tank truck lots, and that this price differential is properly allowed as a quantity discount, within the terms of the statute (Title 15, U.S.C., § 13(a), 15 U.S.C.A. § 13(a): "* * * Provided, That nothing herein contained shall prevent differentials which make only due allowance for differences in the cost of manufacture, sale, or delivery resulting from the differing methods or quantities in which such commodities are to such purchasers sold or delivered." The defendants, citing Lipson v. Socony Vacuum Corporation, 1 Cir., 1937, 87 F. 2d 265, certiorari granted 1937, 300 U.S. 651, 57 S.Ct. 612, 81 L.Ed. 862, and certiorari dismissed by stipulation of counsel, 1937, 301 U.S. 711, 57 S.Ct. 788, 81 L.Ed. 1364, contend that the discriminations charged in the complaint are permitted by this quoted proviso of the statute. However, it is to be noted that the differentials permitted by the statute are only those "which make only due allowance for differences in the cost of manufacture * * *", etc. The plaintiffs, in charging that the differentials were illegal and in violation of the anti-trust laws, sufficiently allege that the differentials alleged were not warranted by this proviso of the statute. It is a matter to determine upon trial of this case whether differences in cost justify these differentials or not, and to what extent they are justified if they are partially justified. To the extent that the Circuit Court of Appeals for the First Circuit in Lipson v. Socony Vacuum Corporation, supra, may have held that all differentials based upon quantity purchased are justified, we must respectfully differ with the opinion of that able court, upon the direct authority of the clear language of the statute.

As we understand the complaint, as amended, it charges that each of the oil company defendants conspired with one of the tire company defendants to lessen competition by an unjustified price differential in the price of gasoline to the tire companies. Such acts constitute a violation of the anti-trust laws, and the complaint, as amended, therefore states a case for relief, assuming the acts are alleged to have occurred in interstate commerce. Citations to support this accepted principle are unnecessary.

The grounds of the defendants for contending that the acts alleged in the complaint, as amended, are not in interstate commerce are principally that all sales in Alabama are made from bulk stocks of gasoline located within the state, and thus the acts charged are necessarily intrastate in character.

The statute (Title 15, U.S.C., § 13(a), 15 U.S.C.A. § 13(a), provides that "It shall be unlawful for any person engaged in commerce, in the course of such commerce" to do the illegal acts set out. "Commerce" as used in this statute and as far as is here relevant is defined (Title 15, U.S.C., § 12, 15 U.S.C.A. § 12) as "trade or commerce among the several States and with foreign nations." We construe these statutes to extend the applicability of Section 13(a) of Title 15, U.S.C., 15 U.S.C.A. § 13(a), to all forms of interstate commerce, in whatever sense the commerce in question may be considered to be interstate, i. e., the statutes involved invoke the full power of the Congress over interstate commerce. We do not find it necessary to consider whether or not those statutes include within their purview acts which may affect interstate commerce though they are not themselves a part of interstate commerce, as do the National Labor Relations Act, 29 U.S.C.A. § 151 et seq., and the Bituminous Coal Act of 1937, 15 U.S. C.A. § 828 et seq., for example. We consider the acts alleged to have been done...