Gold Fuel Service, Inc. v. Esso Standard Oil Company

• Decision Date: 12 June 1961
• Docket Number: Civ. A. No. 398.
• Parties: GOLD FUEL SERVICE, INC., Plaintiff, v. ESSO STANDARD OIL COMPANY, Defendant.
• Court: U.S. District Court — District of New Jersey

195 F. Supp. 85

GOLD FUEL SERVICE, INC., Plaintiff, v. ESSO STANDARD OIL COMPANY, Defendant.

Civ. A. No. 398.

United States District Court D. New Jersey.

June 12, 1961.

Pollis, Williams & Pappas, Elizabeth, N. J., for plaintiff.

Stryker, Tams & Horner, Newark, N. J., for defendant.

WORTENDYKE, District Judge.

This action is for treble damages, brought under 15 U.S.C.A. § 15. There is pending before the Court defendant's motion to dismiss the amended complaint for failure to state a claim upon which relief can be granted, F.R.Civ.P. 12(b), 28 U.S.C.A., and, in the alternative, for summary judgment, F.R.Civ.P. 56(b), upon the asserted ground that there is an absence of any genuine issue of material fact and that the defendant is entitled to judgment as a matter of law. Trial by jury has not been demanded. It is, therefore, waived, F.R.Civ.P. 38(d).

The motion was argued orally before the late Judge Mendon Morrill of this Court on March 28, 1960, upon the briefs previously submitted by the parties. He reserved decision upon the motion which was still pending at the time of his death. The case has now been reassigned to the writer of this opinion.

The complaint was originally in two counts. The second count has been dismissed by a stipulation filed May 6, 1960. There remains a single cause of action in the complaint (after two amendments thereof, and the stipulation referred to), charging violations of sections 1, 2 and 13a of Title 15 of the United States Code. Plaintiff alleges that for 24 years (as a partnership and corporation) it had been purchasing fuel oil from independent suppliers at prices permitting a margin of profit of 3¢ per gallon upon its sales to retailers and consumers in portions of Union and Essex Counties in the State of New Jersey; and that among the customers which it served were Cooper Alloy Corporation (Cooper) and Stainless Engineering and Machine Works (Stainless) (also sometimes herein jointly referred to as Cooper-Stainless). Plaintiff charges that on or about December 13, 1958 the defendant (Esso), a fuel oil supplier, with knowledge of the prices at which plaintiff had been buying its supply, and of the existing customer relationship between Cooper-Stainless and plaintiff (Gold Fuel), induced these customers to terminate their business relationship with plaintiff by offering to sell fuel oil directly to them at a delivered price of 10.2¢ per gallon. Gold Fuel says that this price consisted of the basic posted price of 9.9¢ per gallon, below which the commodity was not available to the plaintiff from any source in the market, plus a haulage charge of .30¢ per gallon, which was .03¢ per gallon less than the lowest price at which Gold Fuel could obtain haulage for delivery to its said customers. Plaintiff therefore charges that, in continuing to sell and deliver fuel oil to these former customers, Esso is violating sections 13a, 1 and 2 of Title 15 of the United States Code, in that Esso's sales and deliveries to these customers at that price (1) are at prices substantially below those at which plaintiff can purchase from any supplier, (2) constitute unfair competition and a malicious interference with the business and profits of plaintiff, (3) lessen or prevent competition between Esso and Gold Fuel, and (4) constitute an attempt by Esso to monopolize a part of interstate commerce in fuel oil. The complaint discloses that Gold Fuel and Cooper-Stainless conduct their respective businesses within an area embracing Union and Essex Counties in New Jersey. It is also alleged that Esso is engaged in interstate commerce because it sells from temporary storage tanks at Linden, New Jersey, which are supplied and replenished by transportation from without the State.

Insofar as the first count of the complaint is concerned (the only count remaining before the Court), Esso's answer denies the critical allegations thereof, and affirmatively pleads as follows:

(1) Esso denies any violation of Title 15.

(2) Gold Fuel is not and never was a customer of Esso, had never purchased defendant's products, and is not on the same competitive level as Cooper-Stainless.

(3) The price quoted by Esso to Cooper-Stainless was made in good faith to meet an equally low price quoted by competitors (of Esso) for supply of the same grade and quantity.

(4) Cooper-Stainless had been purchasing fuel oil from plaintiff at a price approximating 12.7¢ per gallon. Cooper-Stainless, in the latter part of 1958, invited quotations from Esso and other suppliers for delivery of such oil to their storage tanks at Hillside. The price quoted by Esso, and by at least two other suppliers, was approximately 1¢ per gallon less than that bid by Gold Fuel. Cooper-Stainless accepted the bid submitted by Esso because plaintiff was unable to meet that price. Esso's bid was made in good faith in order to meet an equally low price quoted by Esso's competitors.

(5) Plaintiff suffered no recoverable damage and has no standing to bring this suit.

(6) In the transaction complained of Esso was not engaged in interstate commerce.

(7) The allegations of the complaint fail to disclose jurisdiction in this Court, or to set forth a cause of action upon which relief may be granted against Esso.

In support of its motion, Esso presented several affidavits. One affidavit was filed in behalf of Gold Fuel. Upon the oral argument defendant's motion was treated as one for summary judgment only, and as such will be considered in this opinion. F.R.Civ.P. 12(b).

Before proceeding with an analysis of the contents of the moving and counter-affidavits as they relate to the factual allegations of the complaint, I conclude, as a matter of law, that the conduct of Esso of which Gold Fuel complains is not in violation of 15 U.S.C.A. § 13a. Indeed, plaintiff admits in its brief and conceded upon the oral argument that § 13a alone affords no basis for its recovery in this action. This conclusion is fully supported by Nashville Milk Co. v. Carnation Company, 1958, 355 U.S. 373, 78 S.Ct. 352, 2 L.Ed.2d 340. See also Safeway Stores, Inc. v. Vance, 1958, 355 U.S. 389, 78 S.Ct. 358, 2 L.Ed.2d 350. Therefore, unless the acts of Esso violate either § 1 or § 2¹ of Title 15 of the United States Code, no relief may be granted to the plaintiff upon its complaint and the defendant would be entitled to summary judgment.

Summary judgment should not be entered unless "the pleadings, * * * and admissions on file, together with the affidavits, * * *, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." F.R.Civ. P. 56(c). The Third Circuit Court of Appeals has ruled that summary judgments may not be granted when there is a genuine issue as to a material fact presented in an action. Kress, Dunlap & Lane, Ltd. v. Downing, 1960, 286 F.2d 212; Lynn v. Smith, 1960, 281 F.2d 501; Bragen v. Hudson County News Co., Inc., 1960, 278 F.2d 615. The Bragen case cited Hiern v. St. Paul-Mercury Indemnity Co., 5 Cir., 1959, 262 F.2d 526. In Hiern the Court, at page 529, used the following language:

"On a motion for summary judgment, the pleadings of the opposing party must be taken as true, unless by the admissions, depositions or other material introduced it appears beyond controversy otherwise." Citing McCombs v. West, 1946, 5 Cir., 155 F.2d 601.

This accords with the views of the Third Circuit expressed in Frederick Hart & Co., Inc. v. Recordgraph Corp., 1948, 169 F.2d 580. "The Hart case is not authority for the proposition * * * that the conclusory allegations of the (counterclaim), denied by (plaintiff), raise fact issues foreclosing the grant of summary judgment. The Hart case merely broadens the area in which the search for fact issues must be made; it in no way impairs the principle that specific, basic facts must be alleged and controverted before the `genuine' issue contemplated by Rule 56 arises. This requirement is of course not satisfied by * * * generalities contained in the (counterclaim)." Forman, S. J., in Vanity Fair Mills v. Cusick, D.C.N.J.1956, 143 F. Supp. 452, 458.

The first count of the complaint, as last amended, charges that the sales and deliveries of fuel oil by Esso to Cooper-Stainless are (par. 12) "the outgrowth and result of a combination or conspiracy in restraint of interstate commerce by the defendant, Esso Standard Oil Company, with other major suppliers in the fuel oil industry, in violation of Title 15, U.S.C.A. Sec. 1," and (par. 13) "in violation of Title 15, U.S.C.A. Sec. 2, in that they are but some of a series of similar sales and deliveries direct to ultimate consumers at prices lower than those at which wholesalers or distributors can purchase in the fuel oil market in tank-car lots and deliver the same on resale, to ultimate consumers, thus constituting an attempt by the defendant, Esso Standard Oil Company, to monopolize a part of interstate commerce in fuel oil."

Of the six affidavits presented by the defendant in support of its motion, three were made by its employees and the remaining three by employees of Cooper-Stainless. Plaintiff's sole counteraffidavit was that of its vice-president, Deutsch.

Esso's Industrial Sales Manager, Bardsley, deposes that fuel oil is offered for sale by Esso and other suppliers in the market to consumers at prices varying according to the quantity purchased at each delivery. For example, a consumer taking a delivery of at least four thousand gallons is charged a "posted tank transport" basic price, while one who takes a lesser quantity is charged a "posted tank wagon" basic price. At the time of the occurrence of which plaintiff complains the posted tank transport price was 10.05¢ and the posted tank wagon price was 13.7¢. A delivery made by Esso equipment to the consumer carried a haulage charge in addition to the basic posted tank price. On October 23, 1958, at the request of the executive-vice-president of...