Fiumara v. Texaco, Inc.

• Decision Date: 04 May 1962
• Docket Number: Civ. A. No. 29671.
• Citation: 204 F. Supp. 544
• Parties: Pasquale FIUMARA v. TEXACO INC., Humble Oil & Refining Company, Gulf Oil Corporation, Sinclair Refining Company and Associated Petroleum Industries of Pennsylvania.
• Court: U.S. District Court — Eastern District of Pennsylvania

204 F. Supp. 544

Pasquale FIUMARA v. TEXACO INC., Humble Oil & Refining Company, Gulf Oil Corporation, Sinclair Refining Company and Associated Petroleum Industries of Pennsylvania.

Civ. A. No. 29671.

United States District Court E. D. Pennsylvania.

January 16, 1962.

Motion of Judgment March 26, 1962.

May 4, 1962.

COPYRIGHT MATERIAL OMITTED

A. E. Hurshman, Philadelphia, Pa., for plaintiff.

Henry T. Reath, Miles W. Kirkpatrick, Roy D. Jackson, Jr., Robert W. Sayre, White & Williams, and John T. Clary, Philadelphia, Pa., for defendants.

Order Sur Motion of Defendant Association to Amend Judgment or for Summary Judgment March 26, 1962.

Memorandum Opinion and Order Sur Defendant Oil Companies' Consolidated Motions May 4, 1962.

Opinion and Order Sur Defendants' Consolidated Motions (Document No. 14)

VAN DUSEN, District Judge.

This case, which alleges a conspiracy in violation of the Federal antitrust laws, has been brought under 15 U.S.C.A. §§ 1, 2, 5, 12, 14, 15, 26 and 45. It is presently before the court on defendants' Consolidated Motions To Dismiss under F.R.Civ. P. rule 12(b), 28 U.S.C.A. or for Summary Judgment under F.R.Civ.P. rule 56 (Document No. 14).

Defendant Sinclair, which is in the business of manufacturing, refining and selling petroleum products, including gasoline, notified all its dealers in the Philadelphia area to sell their gasoline at certain demanded retail minimum resale prices as of November 3, 1958. Plaintiff, one of the Sinclair dealers, did not sell at the stated prices and defendant Sinclair, on January 22, 1959, filed a Complaint in a Court of Common Pleas, Philadelphia County (C.P. 5, Dec. Term 1958, No. 1988), asking for an injunction against defendant's selling gasoline for less than the dealer minimum resale prices. A preliminary injunction was issued on February 9, 1959, and a permanent injunction issued on March 28, 1960. No violation of the antitrust laws was alleged in the Answer filed in the above-mentioned state court proceeding (see 15a-17a of Record in the Supreme Court of Pennsylvania, docketed as No. 23 in the Clerk's file).

Plaintiff appealed the case to the Pennsylvania Supreme Court, which dissolved the injunction on November 29, 1960,¹ and remanded the case to the Common Pleas Court for a further hearing. On March 7, 1961, the time scheduled for the further hearing, Sinclair asked that the proceedings be dismissed, which request was granted.

The instant action for injunctive relief and for treble damages alleges that defendants conspired to violate the antitrust laws and that plaintiff was injured thereby. The injuries, or damages, are set forth as follows in the original Complaint:

I. Plaintiff alleges that his total sales decreased during the period the state court injunction was in effect and claims damages in the amount of $15,950.00 for loss of profits during that time (par. 22 of Document No. 1).

II. He also claims $2,500. additional damages, representing the cost of his being represented by counsel in the state court injunction proceedings (see par. 23 of Document No. 1).

III. On June 1, 1961, Sinclair terminated its contract with plaintiff and plaintiff claims he will suffer an irreparable loss, such as loss of his goodwill, loss of customers, and loss of future earnings from the sale of defendant Sinclair's products. This loss is valued at $20,000.00 (see par. 24 of Document No. 1).

I — "Damnum Absque Injuria"

Defendants' first contention is that the Complaint should be dismissed for failure to state a claim on which relief can be granted.² Their position is that the injury claimed which relates to all defendants³ is based on the injunction issued in Sinclair's fair trade enforcement suit and that any such injury was not proximately caused by defendants' alleged antitrust violation, which was not raised as a defense in that case, but by an injunction issued by a court of competent jurisdiction and as such is damnum absque injuria.

Private antitrust actions are founded upon injuries that would proximately or directly result from the commission of the act in violation of the antitrust laws⁴ and recovery and damages under those laws are available only to those who have been directly or proximately injured by the claimed violation and are withheld from those who seek the windfall of treble damages because of incidental harm.⁵ Injuries resulting from compliance with an injunction, even if improperly obtained, cannot support a recovery in a private antitrust suit.⁶ There is no claim that the court which issued the injunction was not a court of competent jurisdiction, nor that the court had no right to grant the injunction (see Document No. 21, p. 9). Even if Sinclair's motives in bringing the suit were improper, plaintiff's remedy is not one for triple damages against these defendants for any injury in loss of business due to compliance with the injunction.⁷ Therefore, although the case will not be dismissed for the reasons stated at pages 7-14 below, partial summary judgment will be granted as to the damages alleged in paragraph 22 of Document No. 1. That paragraph does not allege injury or damage directly or proximately caused by a violation of the antitrust laws, as is required under 15 U.S.C.A. § 15, supra, in order to recover treble damages.

Paragraph 23 of the Complaint alleges damages of $2,500.00, the cost in legal fees incurred by plaintiff in defendant the injunction suit brought by Sinclair. This paragraph also must be dismissed as a result of partial summary judgment for the reasons set forth above. No reason has been given by the litigants which would persuade this court to rule that moneys expended in legal fees in defending a suit for a preliminary injunction and for appealing the decision of the lower court granting such injunction constituted injury to "business or property by reason of anything forbidden in the antitrust laws" which could be recovered in an independent suit, particularly when such alleged violation of the antitrust laws was not raised in defense of the state court injunction proceedings. Such expenses are not contemplated by the Clayton Act.

Partial summary judgment will be granted defendants insofar as the damages alleged in paragraphs 22 and 23 of the Complaint are concerned.

II — Alleged Insufficiency of the Evidence to Support the Conspiracy Charge

Plaintiff has alleged that the defendants entered into a conspiracy in violation of the Sherman and Clayton Acts. It was alleged in the original Complaint that each of the four oil company defendants adopted fair trade programs and established similar fair trade minimum prices for gasoline during an 11-month period (see Document No. 1, pars. 14-17). From these undisputed facts, and from the fact that Sinclair brought an injunction suit against plaintiff to enforce its fair trade prices, plaintiff wants the fact finder to find that the defendants conspired to adopt their fair trade programs and that Sinclair brought suit against plaintiff pursuant to the claimed conspiracy.

Defendants contend that a trier of facts could not legally make the inferences demanded by plaintiff and that, therefore, his suit should be summarily dismissed. A fact finder cannot make a finding based on sheer speculation, rather than on the drawing of a logical inference. Taxin v. Food Fair Stores, Inc., 287 F.2d 448, 451 (3rd Cir.1961).

Plaintiff has shown similarity in minimum fair trade prices set by the four oil company defendants,⁸ but parallel business behavior itself does not constitute a Sherman Act offense. As the United States Supreme Court has said, "`conscious parallelism' has not yet read conspiracy out of the Sherman Act entirely." Theatre Enterprises, Inc. v. Paramount Film Distributing Corp., 346 U.S. 537, 541, 74 S.Ct. 257, 98 L.Ed. 273 (1954). See, also, Delaware Valley Marine Supply Company v. American Tobacco Company, et al., 297 F.2d 199 (3rd Cir.), and cases therein cited. The original Complaint, the deposition of plaintiff and statement of plaintiff's counsel, which are on the record, might not be sufficient to prevent the grant of summary judgment⁹ if the Complaint had not been amended, but this need not be, and is not, decided.

However, the Complaint, as amended, alleges facts which prevent the granting of the Motion For Summary Judgment as to defendants on the present record. In paragraph 26 of that document (Document No. 19), plaintiff has added allegations concerning other injunction suits brought by the oil company defendants against dealers violating the fair trade minimum prices. He alleges that these were all instituted in furtherance of the conspiracy and in pursuance of their "illegal fixing" of retail resale prices of their gasoline products. These alleged suits are similar to the allegations in the Complaint concerning Sinclair's suit against plaintiff. Although the allegations are vague and contain conclusions (i. e., "that these Defendants knew for a long time * * * that gasoline is a `fungible product' which does not come under the Pennsylvania Fair Trade Act of June 5, 1935, * * *."),¹⁰ they bring into the Complaint charges against the oil company defendants which allege parallel business behavior in at least two related matters.

Although defendants argue that there are no "facts" before this court from which a conspiracy can be found, that the plaintiff's proposal to prove the conspiracy at trial is not enough to defeat the Motion For Summary Judgment,¹¹ and that plaintiff has only alleged legal conclusions,¹² these arguments are not persuasive in the light of Bragen v. Hudson County News Company, 278 F.2d 615, 618 (3rd Cir.1960), and in view of the record, which contains allegations of conspiracy and violation of the anti-trust laws (see paragraphs 8, 20 and 25a of the Amended Complaint) that have not been denied by the oil company defendants by answer, affidavit, documentary evidence, or in any other method.¹³

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