Dean Oil Company v. American Oil Company, Civ. A. No. 7-56.

• Decision Date: 26 December 1956
• Docket Number: Civ. A. No. 7-56.
• Parties: DEAN OIL COMPANY, Plaintiff, v. AMERICAN OIL COMPANY, Defendant.
• Court: U.S. District Court — District of New Jersey

147 F. Supp. 414

DEAN OIL COMPANY, Plaintiff, v. AMERICAN OIL COMPANY, Defendant.

Civ. A. No. 7-56.

United States District Court D. New Jersey.

December 26, 1956.

Koestler & Koestler, Melvin J. Koestler, Elizabeth, N. J., for plaintiff.

Stickel & Stickel, Fred G. Stickel, Jr., Newark, N. J., for defendant.

WORTENDYKE, District Judge.

Defendant's motion in this private treble damage action under Section 4 of the Clayton Act, 15 U.S.C.A. § 15, for dismissal of the complaint pursuant to Rule 12(b) of the Federal Rules of Civil Procedure, 28 U.S.C., poses the critical question of whether Section 3 of the Robinson-Patman Act, 15 U.S.C.A. § 13a is one of the anti-trust laws as defined by Section 1 of the Clayton Act, 15 U.S. C.A. § 12, for violation of which Section 4 of the same Act provides a private civil action for treble damages. The motion also impugns the constitutionality of Section 3 of the Robinson-Patman Act as violative of the Fifth Amendment. Movant also charges that Section 3 is, in any event, inapplicable to the transactions complained of and asserts that the complaint fails to allege that sales of goods of like grade, quality and quantity were involved or that the charged offending acts of the defendant were for the purpose of destroying competition or eliminating a competitor.

Plaintiff, on its part, moves to strike from defendant's answer the fourth and fifth affirmative defenses therein set forth, which respectively allege that the plaintiff itself discriminated in price among its customers, thereby lessening competition and precluding its recovery in this action, and that the cause or causes of action alleged in the complaint accrued more than two years prior to the commencement of this action and are, therefore, barred by the Statute of Limitations, N.J.S.A. 2A:14-10. Plaintiff's motion addressed to the fourth affirmative defense was denied. With respect to the fifth affirmative defense, decision was reserved.

The Complaint.

Plaintiff, a New Jersey corporation, engaged in the sale and distribution of petroleum products throughout certain Counties of the State of New Jersey, charges that from 1940 through June 30, 1953 it was a customer of the defendant, a Delaware corporation authorized to transact business in New Jersey and engaged in interstate commerce. It is alleged that defendant's oil fields and refining plants are located without the State of New Jersey, and that it shipped the products of its refineries to its marine bulk storage station at Carteret, New Jersey, from which defendant made sales in interstate commerce to retail gasoline service stations, both operated by itself and by dealers within the State. It is further alleged that plaintiff purchased defendant's products at the latter's terminal aforesaid, taking delivery thereat in plaintiff's own tank trucks, and thereby transporting same to plaintiff's own storage tanks within the State and to the service stations of customers of the plaintiff. Plaintiff charges that from January 6, 1950 to June 30, 1953, in violation of Section 2 of the Clayton Act, as amended by the Robinson-Patman Act, 15 U.S.C.A. § 13, and of Section 3 of the Robinson-Patman Act, defendant continuously discriminated against the plaintiff in certain respects and particulars, all as set forth in the subdivisions of paragraph 9 of the complaint. Plaintiff claims that in consequence of such discriminations and differences in price it suffered damage in the amount of $150,000, was unable successfully to compete with other distributor-customers of defendant, and was unable to sell the gasoline which the plaintiff purchased from defendant at prices which would enable the gasoline service station customers of the plaintiff to successfully compete with other gasoline service station operators. Plaintiff claims to have suffered loss of customers because some were taken over as customers by the defendant and others were forced out of business; thereby causing a decline in plaintiff's business to the extent of $100,000, and a loss of equipment and facilities which plaintiff had furnished to its customers amounting to $20,000. Treble the aggregate of all of these damages is sought, together with attorney's fees.

Answer.

Defendant denies the offenses charged against it in the complaint and affirmatively pleads, in addition to those defenses hereinabove referred to, that it falls within the exonerative provisos of subsections (a) and (b) of Section 13 of Title 15 of the United States Code Annotated. Section 3 of the Clayton Act, 15 U.S.C.A. § 13a, reads as follows:

"§ 13a. Discrimination in rebates, discounts, or advertising service charges; underselling in particular localities; penalties

"It shall be unlawful for any person engaged in commerce, in the course of such commerce, to be a party to, or assist in, any transaction of sale, or contract to sell, which discriminates to his knowledge against competitors of the purchaser, in that, any discount, rebate, allowance, or advertising service charge is granted to the purchaser over and above any discount, rebate, allowance, or advertising service charge available at the time of such transaction to said competitors in respect of a sale of goods of like grade, quality, and quantity; to sell, or contract to sell, goods in any part of the United States at prices lower than those exacted by said person elsewhere in the United States for the purpose of destroying competition or eliminating a competitor in such part of the United States; or, to sell, or contract to sell, goods at unreasonably low prices for the purpose of destroying competition or eliminating a competitor.

"Any person violating any of the provisions of this section shall, upon conviction thereof, be fined not more than $5,000 or imprisoned not more than one year, or both."

Defendant's present motion to dismiss rests upon its contention that a violation of the foregoing section does not justify the invocation of section 4 of the Clayton Act, 15 U.S.C.A. § 15, in the form of a civil action for treble the damages suffered by the plaintiff in consequence of such violation. The latter section authorizes suit for threefold damages by "any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws." The presently moving defendant insists that section 3 of the Act, 15 U.S.C.A. § 13a, is not a part of the "antitrust laws" as that phrase is used in section 4 and that therefore the remedy sought in the instant action is not available insofar as it may be based upon a violation of section 3.

The issue presented by plaintiff's denial of movant's contention in this regard has apparently not yet been directly adjudicated by the Supreme Court of the United States and the decisions of the Courts of Appeal are in conflict thereon.

The motion under consideration, according to the Notice thereof, is brought under Rule 12(b) of the Federal Rules of Civil Procedure to dismiss the complaint "insofar as it is sought to be based on Section 3 of the Robinson-Patman Act", 15 U.S.C.A. § 13a, (1) for lack of jurisdiction of the subject matter and (2) for failure to state a claim upon which relief can be granted. The Rule invoked provides (in part) 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, * * *. A motion making any of these defenses shall be made before pleading if a further pleading is permitted." Defendant has seen fit to postpone this motion to the filing of its answer. With respect to Section 3 of the Robinson-Patman Act which the complaint charges was violated by defendant, the answer denies the violation but admits that the action is brought "to recover treble damages pursuant to the named statute for alleged violations by defendant of other listed statutes." Nowhere in the answer, however, appears any charge or averment embodying an attack upon the complaint "insofar as it is sought to be based on Section 3 of the Robinson-Patman Act" as presented by this motion. The defenses which defendant now raises, however, are excepted from waiver. See Rule 12(b) and Gavin v. Hudson & Manhattan R. Co., 3 Cir., 1950, 185 F.2d 104, 27 A.L.R.2d 739.

The pending motion, insofar as it seeks a dismissal of the complaint must be denied, irrespective of this Court's views respecting the validity or efficacy of the provisions of Section 3 of the Robinson-Patman Act, to support the present action, which the defendant here attacks. The complaint rests only partly upon alleged violation of Section 3 as a basis for jurisdiction. Plaintiff also charges violations of Section 2 of the Clayton Act, as amended by the Robinson-Patman Act, and defendant makes no attack upon Section 2 as an appropriate basis for some of the claims asserted in the complaint. Whether the evidence will show the existence of violations of Section 2 will depend upon the trial of the case upon the merits. For the purpose of the present motion we must, therefore, assume as true the plaintiff's allegations that the defendant was guilty of violations of that Section. Frederick Hart & Co., Inc., v. Record-graph Corporation, 3 Cir., 1948, 169 F.2d 580. Accordingly, the attacked pleading withstands the motion to dismiss. Defendant however suggests that if violations of Section 3 of the Robinson-Patman Act are found to be insufficient to afford a basis for the present civil action for treble damages the issues may be simplified by a determination accordingly in advance of trial. While the Court deems it unnecessary to make this determination in order to justify its denial of the motion to dismiss the complaint, counsel for each of the parties apparently desires an...