Harlem R. Con. Coop., Inc. v. Associated Groc. of Harlem, Inc.

• Decision Date: 07 February 1974
• Docket Number: No. 70 Civ. 4128.,70 Civ. 4128.
• Citation: 371 F. Supp. 701
• Parties: HARLEM RIVER CONSUMERS COOPERATIVE, INC., Plaintiff, v. ASSOCIATED GROCERS OF HARLEM, INC., et al., Defendants.
• Court: U.S. District Court — Southern District of New York

371 F. Supp. 701

HARLEM RIVER CONSUMERS COOPERATIVE, INC., Plaintiff, v. ASSOCIATED GROCERS OF HARLEM, INC., et al., Defendants.

No. 70 Civ. 4128.

United States District Court, S. D. New York.

February 7, 1974.

COPYRIGHT MATERIAL OMITTED

Cora T. Walker, New York City, for plaintiff.

Joseph Zuckerman, Rosenman, Colin, Kaye, Petschek, Freund & Emil, New York City, for defendant Retail, Wholesale & Chain Store Food Employees Union, Local 338, and Liaison Counsel for defendants.

Stanley Bierman, Unterberg, Bandler & Goldstein, New York City, for defendant Associated Food Stores, Inc.

Roberto Lebron, New York City, for defendant Fedco Foods, Inc.

Bernard J. Ferguson, Woodside, N. Y., for defendant Mid-Eastern Cooperatives.

Sanford B. Goldberg, Farber, Raucher & Goldberg, New York City, for Pioneer Food Stores, Inc.

Howard Weinreich, Guggenheimer & Untermeyer, New York City, for defendant Shopwell, Inc.

Robert Sugarman, Berger, Kramer & Levenson, New York City, for Sloan's Supermarkets, Inc.

Sol Needle, Sirota & Kurta, New York City, for Theodore Solomon, Aaron Kaufman, and Harry Rosenblum.

MEMORANDUM OPINION AND ORDER

PIERCE, District Judge.

The history of the struggle for survival waged by Harlem Consumers Cooperative, Inc. (the Co-op) is not unknown, and has not gone unheeded in this court. A few years after its founding in 1967 as a consumer-owned, community-based, cooperative supermarket, it sought and won a preliminary injunction in its antitrust action against forces hostile to it within Harlem grocery trade circles. Thereafter, some of the principals in the civil action were convicted of criminal charges relating, in part, to the episode which precipitated the injunction. At least two of those defendants are presently in bankruptcy proceedings, also in this court.

Now, with the antitrust action well into preparation for jury trial on the merits, the Co-op seeks once again a temporary surcease to problems which threaten to overwhelm it. But, this chapter of the Co-op's story serves to demonstrate that there are limits to the kinds of problems capable of resolution by a court of law or equity, however worthy the Co-op's unique goals may be.

The Co-op's present motion, made under the umbrella of the antitrust action, is one for further preliminary injunctive relief. In the main, it charges that certain defendants and a non-defendant have combined to deny the Co-op access to national brand food products which are essential to the conduct of its business. After seventeen court-days of testimony and the receipt of hundreds of exhibits into evidence, the plaintiff Co-op rested its direct case on December 27, 1973, and this Court took under advisement defendants' application to dismiss the plaintiff's motion for failure of proof.

During the hearing, every reasonable opportunity to support its allegations was extended to the plaintiff. The plaintiff subpoenaed and ranged freely through the non-defendant's records. Evidence and testimony, immaterial on the surface, was admitted subject to connection. And well into the hearing, at the Court's urging, defendants agreed to limit and defer full cross-examination of plaintiff's witnesses to expedite the presentation of the Co-op's direct case.

Despite the length of the hearing and the mass of evidence, plaintiff has shown neither that it has been discriminated against, nor that a group of defendants have combined to put it out of business. Instead, if the evidence permits any conclusion at all, this hearing has shown that generally unstable economic conditions and even unpredictable weather conditions share the responsibility for a shortage of food which is endemic in the industry and which is the cause of plaintiff's plight. It is a plight suffered by plaintiff's competitors as well. Shortages, of one kind or another are, all too often, a fact of life in the United States in these times. Although there is little doubt that they impact harder on independent, single-unit businesses such as plaintiff's, this Court has not been given the power, by the Constitution or the Congress, to control such elements. The sometimes hostile forces of nature and of the economy, standing alone, are simply not amenable to antitrust laws.

Thus, for plaintiff to have shown that it was experiencing food shortages was not enough in this hearing. Plaintiff's burden was to show that it was getting less than its fair share of the supplies that were available because of a conspiracy among the named defendants and others to injure the Co-op's business. This Court finds that plaintiff has not met that burden, and grants the defendants' application to dismiss the plaintiff's motion at the end of plaintiff's direct case. Plaintiff's motion for further injunctive relief is therefore denied, for reasons discussed in detail below.

Background

The Co-op opened its doors in June of 1968. Its stated purpose was to provide the residents of Harlem, one of New York City's major black communities, with quality food at low cost. Toward that end, according to the Co-op's president, approximately 4,300 consumer shareholders have invested about $327,000 in the venture. The Co-op is about the size of an average high volume supermarket, the indices being its 10,000 square feet of space; its normal stock of about 8,000 food and household items; and its original projected gross weekly income of $38,000.

The controversy which first brought the Co-op to this court was manifested in a strike of its retail clerks called by the Retail Wholesale & Chain Store Food Employees Union, Local 338 (Local 338) which began in April of 1969 and effectively reduced the Co-op's ability to obtain supplies from food manufacturers and distributors. Its weekly gross dropped to $18,000; the number of items on its shelves dropped to about 2,000. After enduring a violent picket line for more than a year, the Co-op commenced this action, charging violations of Sections 1 and 2 of the Sherman Antitrust Act, 15 U.S.C. §§ 1, 2; and Sections 2, 3 and 4 of the Clayton Act, 15 U.S.C. §§ 13, 14, 15.

The complaint named more than forty defendants, among them — designated as "core" defendants — were Local 338; Coordinated Community Services, Inc. (CCS), a food promotion company operating in Harlem; the Associated Grocers of Harlem (AGH), a trade association; and a number of individuals who were principals of one or more of these organizations. In addition, the complaint named some twenty-seven "manufacturers and suppliers" of food products and equipment, and some eight "competitors" doing business in the Harlem target area, as defined by the plaintiff.

In October of 1970, plaintiff moved against the "core" defendants and the "manufacturer/suppliers" for preliminary injunctive relief. After a brief hearing, Judge Mansfield, then of this court, characterized the evidence as revealing

the dismal picture of labor union officials using their union's power to call a strike for the purpose of trying to coerce an employer into dealing with a private business concern owned in part by them and from which they individually derive substantial profit.¹

The strong showing made by plaintiff at that hearing was buttressed by the high visibility of the violent strike, direct evidence of coercive pressure exerted on the plaintiff by some of the "core" defendants, and testimony adduced at a prior NLRB hearing which had laid bare the relationship between the alleged "core" conspirators. The injunction was granted against the "core" defendants who were directed to cease interfering with plaintiff's business through the strike or by any other means.² The motion was held in abeyance as against the "manufacturer/suppliers" upon their assurance that with the strike enjoined, they would service plaintiff.³ The "competitor" defendants were not moved against or involved in those proceedings for the strike injunction.⁴

The Co-op's business, freed from restraint, soared. By August of 1972, it had reached a weekly gross of around $47,000, considerably above its early projections. Meantime, the injunction was upheld by the Court of Appeals in the fall of 1971,⁵ and, following a few false starts caused by the district court's change to the Individual Assignment System and plaintiff's subsequent successful motion for the assigned judge to recuse himself,⁶ the pre-trial preparation of this action began in earnest under the supervision of a magistrate and this Court in the late winter of 1973.

These pre-trial proceedings have been marked by periodic interruptions and eruptions of issues and personalities which have diverted counsel from the hard task at hand, that of preparing this unwieldy case for jury trial.⁷

By far the most consuming of these diversions has been plaintiff's charges, thus far unsupported, that all of the defendants are continuing to plot against it in spite of the earlier injunction.

This assertion was first vaguely made in a form letter dated May 25, 1973, from plaintiff's then trial counsel, addressed to all forty-one defendants.⁸ This letter provoked what can only be characterized as a paper storm by return mail, and on June 4, 1973, at a general pre-trial conference, plaintiff's trial counsel withdrew the letter. There the matter rested for a number of months, although after trial counsel was discharged in August of 1973, plaintiff's Coordinator-Legal Counsel, who took over active litigation of the case,⁹ verbally expressed the need for relief on several occasions.

The Motion for Further Relief

Finally on October 26, 1973, plaintiff moved formally against all defendants for further injunctive relief, charging, among other things, that the earlier injunction was being circumvented by the use of a non-defendant food wholesaler, Met Food Corp. (Met), plaintiff's major supplier of national brand dry grocery products.

The underlying grievance was that Met deliveries to the Co-op had been incomplete and, on occasion, late. As a result,...