Aluminum Company of America v. Tandet

• Citation: 235 F. Supp. 111
• Decision Date: 25 November 1964
• Docket Number: Civ. No. 9534.
• Court: U.S. District Court — District of Connecticut
• Parties: ALUMINUM COMPANY OF AMERICA, Plaintiff, v. William H. TANDET, Defendant.

235 F. Supp. 111

ALUMINUM COMPANY OF AMERICA, Plaintiff, v. William H. TANDET, Defendant.

Civ. No. 9534.

United States District Court D. Connecticut.

October 30, 1964.

As Revised November 25, 1964.

John S. Barton, Pullman, Comley, Bradley & Reeves, Bridgeport, Conn., for plaintiff.

Julius B. Kuriansky, Wofsey, Rosen, Kweskin & Kuriansky, Stamford, Conn., for defendant.

ZAMPANO, District Judge.

Plaintiff, hereinafter referred to as Alcoa, moves the Court for a judgment on the pleadings dismissing defendant Tandet's Second Affirmative Defense and Counterclaim based on Section 2 of the Clayton Act, as amended by the Robinson-Patman Act, 15 U.S.C.A. § 13. Plaintiff claims the pleadings do not state a violation of the Act since Tandet was not a purchaser from Alcoa and no sale at a discriminatory price is alleged.

Alcoa, a Pennsylvania corporation, manufactures and sells aluminum and aluminum products. Tandet, a resident of Connecticut, individually and doing business as Main Machine Company, manufactures and sells furniture made of aluminum and aluminum products.

On June 9, 1961, the parties entered into two written agreements. In one, Alcoa agreed to sell a portion of its plant at Bridgeport, Connecticut to Tandet for $300,000. Under the other agreement, Alcoa agreed to sell and Tandet agreed to buy certain aluminum products in the amount of $2,500,000 over a five-year period at Alcoa's "prices in effect at the time of shipment". The real estate transaction was consummated on September 15, 1961, but there has been no completed performance under the sales contract owing to a disagreement as to the meaning of the contract's price provisions.

The plaintiff's complaint sounds in contract. It alleges that the two aforementioned contracts were executed as a combination sale; that the prices to be charged Tandet for aluminum products would be approximately ten per cent higher than the actual market prices for the products but that these excessive prices were contemplated by the parties to afford Alcoa "an extra profit margin of approximately $250,000 in consideration of the reduced price to the defendant for the sale to him of the portion of plaintiff's manufacturing plant"; that, on or about November 15, 1961, Tandet submitted a purchase order to Alcoa with stated market prices therefor; that Alcoa rejected the order; that there have been no consummated sales between the parties because of the price dispute; and that, as a result of Tandet's breach of contract, Alcoa has suffered loss and damage in excess of $250,000.

The two written contracts do not refer to each other. Attached to the contract for sale at the time of execution on June 9, 1961 was an Alcoa price list, dated August 5, 1960, and designated "Schedule A".

Tandet's Answer and First Affirmative Defense and Counterclaim deny the existence of a combination sale and affirmatively seek damages, in contract, claiming Alcoa breached the sales agreement with resulting loss to Tandet in the amount of $320,000.

In a Second Affirmative Defense and Counterclaim Tandet similarly denies the combination sale, and, alleging an independent contract for sale of aluminum products, it invokes the price discrimination provisions of the Clayton Act, as amended by the Robinson-Patman Act, and claims treble damages of $1,560,000. 15 U.S.C.A. § 13. For the purposes of the present motion Tandet's factual allegations must be taken as true, and the issues must be viewed as though there were no combination sale. Rule 12(c), Fed.R.Civ.Proc.; 2 Moore's Federal Practice § 12.15, p. 2269. In these pleadings Tandet alleges that he was a customer of Alcoa from 1953 to December 1961; that, pursuant to the contract for sale of June 9, 1961, he ordered aluminum from Alcoa on November 15, 1961 at prices which Alcoa sold to other purchasers; that Alcoa refused to sell to him unless Tandet would consent to pay prices specified in printed price schedules; that these prices were ten per cent higher for products of like grade and quality which Alcoa sold to other purchasers; that as a result of this price discrimination, competition in the sale of aluminum furniture products in interstate commerce has been lessened; and that Tandet has been damaged for which he seeks treble damages in the amount of $1,560,000. There is no allegation of a consummated sale between the parties.

Alcoa's reply to Tandet's counterclaim admits, among other things, that "since in or about December, 1961, plaintiff has sold aluminum products of the type ordered by defendant to other manufacturers of furniture products at the market prices therefor which were at least ten per cent (10%) less than the prices defendant was required to pay under the said agreement, Exhibit A".

The plaintiff's motion presents this question: Are Tandet's Second Affirmative Defense and Counterclaim insufficient as a matter of law because no actual, completed sale at a discriminatory price is alleged or claimed?

The portions of Section 2(a) of the Clayton Act, as amended by the Robinson-Patman Act, 15 U.S.C.A. § 13(a), pertinent to the issue presented, provide it shall be unlawful "to discriminate in price between different purchasers of commodities of like grade and quality, where either or any of the purchases involved in such discrimination are in commerce, where such commodities are sold for use, consumption, or resale within the United States * * *, and where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination, or with customers of either of them: Provided * * * That nothing herein contained shall prevent persons engaged in selling goods, wares, or merchandise in commerce from selecting their own customers in bona fide transactions and not in restraint of trade * * *".

Alcoa contends the Act is violated only when there has been an actual, completed discriminatory sale. It claims here, contrary to statutory requirements, Tandet was an "offeree", not a "purchaser"; there were "offers to sell" by Alcoa, but not "purchases"; and commodities were "offered for sale" at allegedly discriminatory prices but not "sold". It relies on a line of cases which embrace the language and ruling in Shaw's Inc. v. Wilson-Jones Co., 3 Cir., 105 F.2d 331, at 333, wherein is stated: "Therefore at least two purchases must have taken place. The term purchaser means simply one who purchases, a buyer, a vendee. It does not mean one who seeks to purchase, a person who goes into the market-place for the purpose of purchasing. In other words, it does not mean a prospective purchaser, or one who wishes to purchase * * *." In Package...