Highspire, Inc. v. UKF America, Inc.
Decision Date | 01 May 1979 |
Docket Number | No. 79 Civ. 1663(MP).,79 Civ. 1663(MP). |
Parties | HIGHSPIRE, INC., Plaintiff, v. UKF AMERICA, INC. and Cedar Point Supply, Inc., Defendants. |
Court | U.S. District Court — Southern District of New York |
Gerwin & Ehrenclou, New York City by John P. Rowan, Peter Kupersmith, New York City, for plaintiff.
Christy & Viener, New York City by Arthur H. Christy, Jerome M. Lewine, Leonard J. Colamarino, New York City, for defendant UKF America, Inc.
Martin D. Dehler, Garden City, N. Y., for defendant Cedar Point Supply, Inc.
DECISION
This is an antitrust suit brought under Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2, and Section 2 of the Clayton Act, as amended by the Robinson-Patman Act, 15 U.S.C. § 13. The plaintiff has applied for a preliminary injunction under Section 16 of the Clayton Act, 15 U.S.C. § 26.
Were the plaintiff to prevail herein it would have an adequate remedy at law. It has shown neither likelihood of success on the merits nor even sufficiently serious questions going to the merits to make them a fair ground for litigation. The facts are as follows.
The defendant UKF America, Inc., imports urea and allied products into the United States. UKF employs no salesmen but sells urea instead through independent distributors. One such distributor is the defendant, Cedar Point Supply, Inc., which distributes urea in the Northeast and Mid-Atlantic states. Under its agreement with UKF, Cedar Point purchases urea at the prevailing list price minus a distributor's discount of four percent. Cedar Point's obligations to UKF are secured by a personal guarantee of its president.
Until approximately July 1978, Cedar Point employed Mr. John Ryan as a salesman of urea and Mr. Joseph Brady as a financial analyst. At that time Ryan and Brady resigned from Cedar Point and formed Highspire, Inc., of which they are respectively president and vice-president, to sell agricultural chemicals in Delaware, Maryland, New Jersey, New York and Pennsylvania.
Ryan and Brady met with Messrs. J. W. H. Spin and Walter Maerz of UKF on August 4 and 11, 1978, to negotiate an agreement under which Highspire would distribute UKF urea. At the meeting on August 4, Highspire forecast to UKF that it would purchase and resell 25,000 to 30,000 tons of urea between July 1, 1978, and June 30, 1979. UKF demanded that Highspire submit for verification, either to UKF or an outside accounting firm, the resale contracts on which Highspire based its forecast of sales in excess of 25,000 tons. Highspire refused so to submit its contracts. In October, UKF advised Highspire that UKF would not enter a distributorship agreement unless Highspire proved that it had contracts to sell 10,000 tons of urea. Highspire still refused to produce any contracts.
During the meeting on August 11, UFK also advised Highspire that it would have to post as security a letter of credit or personal guarantee for $100,000 as a further condition of obtaining a distributorship agreement. Ryan and Brady rejected personal guarantees but said that a letter of credit for $100,000 would not be a problem. At the same meeting, Highspire tendered a proposed agreement to UKF, but the representatives of UKF refused to sign because a distributorship agreement would first have to be approved by UKF's board of directors.
As a result of the negotiations on August 4 and 11, UKF sent Highspire a letter of intent on August 16, 1978. It provided:
Highspire's president signed and returned the letter of intent on August 29, accompanied by the following letter:
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