Forster v. Kawasaki Motors Corp., U.S.A.

• Decision Date: 01 May 1985
• Citation: 698 P.2d 1001,73 Or.App. 439
• Parties: , 1985-1 Trade Cases P 66,644 Frank M. FORSTER and Anna Forster, dba Competition Motors, Ltd., an Oregon corporation, Respondents, v. KAWASAKI MOTORS CORP., U.S.A., a Delaware corporation, Appellant. A8009-05038; CA A27961.
• Court: Oregon Court of Appeals

Page 1001

698 P.2d 1001

73 Or.App. 439, 1985-1 Trade Cases P 66,644

Frank M. FORSTER and Anna Forster, dba Competition Motors, Ltd., an Oregon corporation, Respondents, v. KAWASAKI MOTORS CORP., U.S.A., a Delaware corporation, Appellant.

A8009-05038; CA A27961.

Court of Appeals of Oregon.

Argued and Submitted July 13, 1984.

Decided May 1, 1985.

James H. Clarke, Portland, argued the cause for appellant. With him on the briefs were Spears, Lubersky, Campbell, Bledsoe, Anderson & Young, Portland.

Roger G. Tilbury, Portland, argued the cause for respondents. With him on the brief were Mark Pengilly, and Carol J. Buehrens, Portland.

Before RICHARDSON, P.J., and WARDEN and NEWMAN, JJ.

WARDEN, Judge.

Plaintiff ¹ brought this action for damages for violation of Oregon's Antiprice Discrimination Law. ORS 646.010 to 646.180. The jury returned a verdict awarding plaintiff $200,000, and judgment was entered trebling that amount pursuant to ORS 646.140(1) and ORS 646.150. ² Defendant appeals, raising six assignments of error concerning the trial court's denial of defendant's motion for a directed verdict and motions to strike certain allegations of plaintiff's complaint, its giving of two specified jury instructions and its refusal to give another. We affirm.

The following facts set the background for this action. Sometime before 1969, Joe Dobbins established a Kawasaki distributorship in the Portland area. In 1969, in conjunction with that distributorship, he opened a retail dealership called Kawasaki City. He operated the outlet as a distributorship and as a retail dealership until defendant terminated the distributorship arrangement in 1972. As a distributor, Dobbins had maintained a large parts inventory; when the distributorship was terminated, he kept the inventory. In 1973, Dobbins negotiated with RFH&S, Inc., for the sale of Kawasaki City. At that time, RFH&S signed a dealership agreement with defendant. RFH&S also asked defendant to appraise the parts inventory; according to one of defendant's then vice-presidents, defendant declined to do an appraisal, because it did not want to interfere with the sale of Kawasaki City. RFH&S subsequently purchased the Kawasaki City name and Dobbins' entire parts inventory.

Plaintiff became a Kawasaki dealer under an agreement with defendant in 1973. It opened in a location about six miles from Kawasaki City. Although it sold some other lines of motorcycles and accessories, Kawasaki products comprised most of its sales volume, which increased from about $352,000 in 1974 to about $872,000 in 1979. In the fall of 1979, defendant terminated plaintiff's dealership when it failed to pay a parts bill of about $50,000. Plaintiff ceased selling Kawasaki products, and its business volume declined considerably. In 1980, its gross sales were approximately $316,000; it went out of business in 1982.

Plaintiff commenced this action in 1980, pursuant to the Oregon Antiprice Discrimination Law, which in relevant part states:

"It is unlawful for any person engaged in commerce or food commerce, or both, in the course of such commerce, either directly or indirectly, to discriminate in price between different purchasers of commodities, or services or output of a service trade, of like grade and quality or to discriminate in price between different sections, communities or cities or portions thereof or between different locations in sections, communities, cities or portions thereof in this state, 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." ORS 646.040(1).

There are few Oregon decisions construing ORS 646.040 or other provisions of the Antiprice Discrimination Law. However, because it was modeled after the Robinson-Patman Act, 15 U.S.C. § 13, federal cases are persuasive in interpreting the Oregon statute. Redmond Ready-Mix, Inc. v. Coats, 283 Or. 101, 110, 582 P.2d 1340 (1978).

The basis of plaintiff's complaint is that defendant discriminated against it in the price of Kawasaki products, thereby destroying its ability to compete with favored dealers and causing it to discontinue the sale of Kawasaki products, substantially lessening competition in the area and resulting in monetary damage to plaintiff's business. Specifically, plaintiff alleged price discrimination in providing credit to plaintiff's competitors and in purchasing their outdated inventory:

"VII

"During the period in which KAWASAKI sold motorcycles, parts and accessories to Plaintiffs, KAWASAKI sold products of like grade and quality to other dealers of KAWASAKI products within the Portland metropolitan area. In the course of its dealings Defendant offered, provided and/or arranged credit to these other dealers at rates lower than those offered to Plaintiffs. * * *

"VIII

"During the period in which KAWASAKI sold motorcycles, parts and accessories to Plaintiffs, KAWASAKI repurchased outdated inventory from dealers competing with Plaintiffs for substantial sums of money. KAWASAKI refused to purchase inventory of like grade and quality from Plaintiffs."

We first consider defendant's motion for a directed verdict and its motions to strike, which were made on the ground of insufficiency of the evidence. In resolving those questions on appeal after a jury verdict for plaintiff, we view the record in the light most favorable to plaintiff, which is entitled to the benefit of every reasonable inference that may be drawn from the evidence. See Scott v. Mercer Steel/Edwards Realty, 263 Or. 464, 466-67, 503 P.2d 1242 (1972); Terry v. Holden-Dhein Enterprises, Ltd., 48 Or.App. 763, 765-66, 618 P.2d 7, rev. den. 290 Or. 271 (1980). We examine the record to determine whether there was sufficient evidence from which, if believed, the jury could reach a verdict in favor of plaintiff. James v. Carnation Co., 278 Or. 65, 69, 562 P.2d 1192 (1977).

Defendant's motion for a directed verdict and its first motion to strike related to plaintiff's claim that defendant committed price discrimination by purchasing outdated inventory from a competitor, Kawasaki City. The assignments of error based on those motions raise the same issue, whether the purchase of parts under the evidence in this case could constitute price discrimination under the Antiprice Discrimination Law, and we consider them together.

There was uncontroverted evidence that defendant purchased parts from Kawasaki City on several occasions in 1975 and 1976. The 1975 purchases included one of approximately $5,000 and one of approximately $7,000; the 1976 purchases totalled $18,000 to $20,000. The parts purchased were primarily those that RFH&S had acquired in its purchase of Kawasaki City from Dobbins in 1973. It had purchased the parts believing an extensive inventory to be an advantage but discovered by early 1974 that it was not, because the parts were obsolete for its needs but were costing interest on their purchase price.

Defendant argues that the parts purchases cannot be the basis for a violation of ORS 646.040, because there is evidence that they were collateral transactions and, therefore, as a matter of law, were unrelated to the sale of Kawasaki products or the price that Kawasaki City paid for the products. There is evidence that principals of RFH&S believed that defendant was obligated to repurchase the obsolete parts, because defendant had failed to appraise the parts inventory for RFH&S before it bought Kawasaki City from Dobbins, and that the lack of that appraisal had caused RFH&S to pay more than it otherwise would have. There is also evidence that the 1975 purchases were made in response to a threat of litigation over defendant's potential liability to RFH&S and that the 1976 purchases were made after RFH&S and defendant had executed a written agreement in which RFH&S agreed not to institute any action against defendant for any damages stemming from the parties' previous business transactions and defendant agreed to purchase a minimum of $10,000 of "obsolete parts" acquired by RFH&S from Dobbins and also to extend a $50,000 line of interest free credit to Kawasaki City through September, 1977. All of the parts were of some value to defendant, and the prices paid were somewhat less than dealer cost. ³

Defendant argues that, because there was neither a common seller nor a second "favored" purchaser, the statutory requirement of a discrimination in price to different purchasers was not satisfied and that the issue, therefore, should not have been submitted to the jury. ⁴ We are not persuaded.

Price discrimination within the meaning of the Antiprice Discrimination Law is a price difference. See Redmond Ready-Mix, Inc. v. Coats, supra, 283 Or. at 112, 582 P.2d 1340; see also FTC v. Anheuser-Busch, 363 U.S. 536, 549, 80 S.Ct. 1267, 1274, 4 L.Ed.2d 1385 (1960). Price discrimination may be direct, as when a seller charges different prices to different purchasers, Redmond Ready-Mix, Inc. v. Coats, supra, but it may also result from offering of special concessions, as is apparent from the statutory definition of "price:"

"When used in ORS 646.010 to 646.180, unless the context otherwise requires:

" 'Price' means the net price to the buyer after the deduction of all discounts, rebates, or other price concessions paid or allowed by the seller." ORS 646.020(1)(d).

See also Robbins Flooring, Inc. v. Federal Floors, Inc., 445 F.Supp. 4, 8 (E.D.Pa.1977). That the legislature intended a broad application of the statute is further reflected in the expansive language of ORS 646.010:

"ORS 646.010 to 646.180 shall be known and designated as the Antiprice Discrimination Law; and the inhibitions against discrimination in those sections shall embrace any scheme of special concessions or rebates, any...