Englander Motors, Inc. v. Ford Motor Company, 13567.

• Decision Date: 26 May 1959
• Docket Number: No. 13567.,13567.
• Citation: 267 F.2d 11
• Parties: ENGLANDER MOTORS, INC., Appellant, v. FORD MOTOR COMPANY, Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

267 F.2d 11 (1959)

ENGLANDER MOTORS, INC., Appellant, v. FORD MOTOR COMPANY, Appellee.

No. 13567.

United States Court of Appeals Sixth Circuit.

May 26, 1959.

Myron N. Krotinger, Mendelsohn, Krotinger & Lane, Cleveland, Ohio (M. Alfred Roemisch, Herbert A. Rosenthal, Cleveland, Ohio, on the brief), for appellant.

Charles W. Sellers, Thompson, Hine & Flory, Cleveland, Ohio (Andrew C. Hartzell, Jr., Cleveland, Ohio, on the brief), for appellees.

Before SIMONS and ALLEN, Circuit Judges, and KENT, District Judge.

SIMONS, Circuit Judge.

The appellant, hereinafter known as Englander, was at the time the controversy arose, a franchise dealer selling Ford cars, replacement parts and accessories under written contract with the Ford Motor Company. It brought a private anti-trust action under Section 4 of the Clayton Act, 15 U.S.C.A. § 15 for alleged injuries to its business and property because of Ford's violation of Sections 1 and 2 of the Sherman Act and Section 3 of the Clayton Act, 15 U.S.C.A. §§ 1, 2 and 14, charging that Ford by express or implied agreement with all of its dealers requires that they deal exclusively in Ford cars and Ford made or approved parts and accessories for such vehicles, complaining that the agreements gave Ford a monopoly on a line of commerce in violation of Sec. 2 of the Sherman Act and that they are conditioned upon the dealers refraining from dealing in the goods of Ford's competitors, so as to substantially lessen competition contrary to Sec. 3 of the Clayton Act. It charges that the agreements constitute unreasonable restraint of trade in violation of Sec. 1 of the Sherman Act. It further charges that the agreements permit Ford to cancel its franchise arrangement with its dealers, including Englander, by giving sixty days notice of franchise cancellation, and that by the use of this provision, it can enforce antitrust law violations by its dealers. The public is alleged to be injured because it must pay higher prices for parts and accessories purchased from Ford dealers since it is limited in obtaining such parts and accessories by Ford's power to fix prices for goods and services and because it can control the dealers' operations, including personnel, finances, stocks of goods and equipment. It charges that it was injured because defendant became dissatisfied with its performance with regard to the sale of parts and accessories and by threats of cancellation caused it to obtain leases for the benefit of others than itself and to sell its business to a designee of Ford. It further charges that the leases had a value in excess of rent and impliedly that the forced sale of its business was at less than real value.

In another cause of action, Englander seeks an accounting for moneys given to Ford by it and other Ford dealers for advertising purposes. Upon alternative motions for dismissal or to make more definite the statement as to the anti-trust action and for dismissal or severance as to the action for accounting, the district judge granted motions to dismiss, and Englander has appealed. The district court assuming, for the purpose of the claim for anti-trust relief, that the allegations of public injury are true in that manufacturers of competing Ford replacement parts are foreclosed from the market for their products by the Ford authorized dealer chain and that the general public cannot obtain without specific request these competing products through authorized Ford dealers, ruled that Englander must further show that he was injured through the operation of the system, and concluded Englander could not be so injured so that the case is not one for treble damages under the anti-trust law, nor is it one entitled to the jurisdiction of the court. Since the accounting action is not a true class action because the pleadings show that the interests of the members of the class are not undivided and it did not appear that Englander's share of that fund exceeds $3,000.00, therefore the trial court summarily granted the motions to dismiss.

Our first excursion into the allegations of the complaint is to determine if its allegations claim a violation of Sec. 3 of the Clayton Act, which provides that it shall be unlawful for any person engaged in commerce to make a contract for the sale of goods for resale within the United States on the condition, agreement, or understanding, that the purchaser shall not use or deal in the goods of a competitor where the effect of such contract for sale or such condition, agreement, or understanding, may be to substantially lessen competition or tend to create a monopoly in any line of commerce.

It would seem clear from the terms of the agreement that it is conditioned upon the dealers not dealing in competitors' goods. That is, however, limited to the selling of competing replacement parts in any place of business upon which the dealer displays the Ford Company's trademarks or tradename or any sign or indication that such place of business is that of an authorized Ford dealer or service station, except in cases where the company is unable to supply them or the purchaser has specifically requested the dealer to use some other part. The complaint is not clear that sales of unauthorized parts or accessories were made under such restricted conditions, or if so to what extent. This may only be determined by trial.

Accepting the court's assumption, it still remains to determine whether the allegations of the complaint show that competition may...