JW Burress, Inc. v. JLG Industries, Inc.

• Decision Date: 11 March 1980
• Docket Number: Civ. A. No. 79-0170.
• Citation: 491 F. Supp. 15
• Parties: J. W. BURRESS, INCORPORATED, Plaintiff, v. JLG INDUSTRIES, INC. (formerly known as Fulton Industries, Inc.), Defendant.
• Court: U.S. District Court — Western District of Virginia

491 F. Supp. 15

J. W. BURRESS, INCORPORATED, Plaintiff, v. JLG INDUSTRIES, INC. (formerly known as Fulton Industries, Inc.), Defendant.

Civ. A. No. 79-0170.

United States District Court, W. D. Virginia, Roanoke Division.

March 11, 1980.

Charles D. Fox, III, Woodward, Fox & Wooten, Roanoke, Va., for plaintiff.

Edward Fitzpatrick, Lord, Bissell & Brook, Chicago, Ill., James F. Johnson, Woods, Rogers, Muse, Walker & Thornton, Roanoke, Va., for defendant.

OPINION

TURK, Chief Judge.

Plaintiff, J. W. Burress, Inc., sues JLG Industries, Inc., alleging violations of the federal antitrust laws and breach of contract. The case is now before the court on JLG's motion for judgment on the pleadings as to certain of Burress's claims of price discrimination in alleged violation of the Robinson-Patman Act. 15 U.S.C. § 13 et seq.

To the extent relevant here, the Robinson-Patman Act provides as follows:

It shall be unlawful for any person . . to discriminate in price between different purchasers of commodities of like grade or quality . . .; However, nothing herein contained shall prevent persons engaged in selling goods, wares or merchandise in commerce, from selecting their own customers in bona fide transactions and not in restraint of trade....

15 U.S.C. § 13(a).

The court, for purposes of ruling on defendant's motion, must assume of course that the plaintiff's factual allegations are true. 2A Moore's Federal Practice ¶ 12.15 (2d ed. 1979).

Defendant JLG, a Pennsylvania corporation, is a manufacturer of self-lifting work platforms. These platforms are designed to position men, tools, or materials in elevated work areas. Pursuant to a contract with JLG, plaintiff Burress was a distributor for these products in southwestern Virginia until April 30, 1978.

In advancing its claims of unlawful price discrimination, plaintiff focuses on a time period commencing on March 22, 1976, the date of the execution of the final distributorship agreement between JLG and Burress, and ending on April 30, 1978, the date contractual relations ceased. Plaintiff Burress asserts basically two Robinson-Patman violations, both arising from events of this period of time.

The sufficiency of the first set of Burress's factual allegations of unlawful price discrimination—the allegations of paragraph 10 of the complaint—apparently is not disputed.¹ It will be useful briefly to review those allegations as a backdrop to the dispute now before the court. Paragraph 10 of the complaint alleges that during the latter half of 1977 and thereafter the plaintiff purchased several of the platform lift units from JLG. It is alleged that JLG provided these units to the plaintiff under different terms than it provided similar units to other purchasers. This practice, it is alleged, "had the effect of discriminating in price" between the plaintiff as a purchaser of the lift units and other purchasers of similar lift units of like grade and quality. These other purchasers allegedly were in competition with the plaintiff in interstate commerce. As noted already, the adequacy of these allegations is apparently not controverted.

The real dispute at this stage of the case concerns the viability of the allegations of paragraph 11 of the complaint.

In paragraph 11, the complaint sets forth another set of incidents which are said to give rise to liability under the Robinson-Patman Act. It is alleged that in September 1977 JLG "attempted to coerce" the plaintiff into entering a new distributorship agreement. The terms of the proposed new agreement "differed substantially" from those of the March 22, 1976 agreement, which in September 1977 was still in effect. The complaint states that "JLG offered this new contract to Burress while it was offering contracts which were substantially different in their terms to other purchasers and distributors in competition with Burress. . . ." The contracts of other purchasers, it is alleged, were "discriminatory toward Burress" and the defendant's conduct "had the effect of increasing the price of the items Burress had purchased in the past or would purchase in the future. . . ."

Burress never accepted JLG's September 1977 offer of a new distributorship contract. The complaint does not allege that any purchases were ever undertaken pursuant to that proposal. Throughout the period of time concerned in paragraph 11 of the complaint, Burress apparently was still purchasing lift units pursuant to the terms of the old contract of March 22, 1976. Ultimately, the old distributorship agreement expired, whereupon contractual relations between Burress and JLG ceased.

Defendant JLG's dismissal motion rests on the language of the Robinson-Patman Act making it unlawful "for any person . . . to discriminate in price between different purchasers . . .." 15 U.S.C. § 13(a). The defendant argues that since Burress never signed the proposed new contract of September 1977, Burress cannot be a "purchaser" as required by the Robinson-Patman Act. Defendant thus urges that the allegations of paragraph 11, depending, as they do, merely on the offer of a new distributorship agreement, must fail.

Defendant relies on cases such as Shaw's, Inc. v. Wilson-Jones Co., 105 F.2d 331 (3d Cir. 1939) which disallow recovery where the plaintiff is only a potential purchaser and not an actual purchaser. In Shaw's the court was interpreting the portion of the Robinson-Patman Act upon which this case turns. The court said that

The discrimination in price referred to must be practiced "between different purchasers". Therefore at least two purchases must have taken place. The term purchaser means simply one who purchases, a buyer, a vendee. It does not mean one who seeks to purchase, a person who goes into the market-place for the purpose of purchasing. In other words, it does not mean a prospective purchaser, or one who wishes to purchase . . ..

105 F.2d at 333. In response to the argument of the plaintiff in Shaw's that it had been a customer and therefore had "purchaser" status under the Act, the Shaw's court stated: "Past purchases or conversations in respect to possible future purchases are insufficient." Id. Courts often have followed Shaw's in declining to equate offers to discriminate with actual price discrimination.²

Plaintiff Burress, on the other hand, maintains that the protection afforded by the Robinson-Patman Act is broader. Plaintiff concedes that there have been no purchases undertaken pursuant to the September 1977 proposed contract. Plaintiff's theory of recovery rests on the language of the Fifth Circuit in American Can Co. v. Bruce's Juices, Inc., 187 F.2d 919 (5th Cir.), op. mod. and pet. for reh'g denied, 190 F.2d 73, app. dismissed, 342 U.S. 875, 72 S.Ct. 165, 96 L.Ed. 657 (1951): "Plaintiff was not bound to purchase the 3.12 Iscan upon discriminatory terms in order to attain the status of a competing purchaser under the Act, as its failure to do so was directly attributable to defendant's own discriminatory practice." 187 F.2d at 924. Thus, Burress contends that Bruce's Juices permits a Robinson-Patman plaintiff "who is currently purchasing goods from the defendant and competing with other purchasers of goods from the defendant at the time of the price discrimination, to recover when the failure of plaintiff to purchase at the discriminatory price is directly attributable to the actions of the defendant...."

Before analyzing the applicability of Bruce's Juices to the plaintiff's situation in this case, it may be useful to recall that the Robinson-Patman Act forbids discrimination in price only as it occurs between "different purchasers."³ The question for decision, then, is simply whether Burress can assert status as a "purchaser" solely on the basis of the September 1977 proposal.

It cannot meaningfully be said that a "purchase" has occurred until buyer and seller have completed their negotiations and have in some way expressed their mutual assent that legally enforceable expectations and commitments arise. In short, there must be a contract. It is sufficient that the contract be merely executory; actual delivery and payment are not essential to a "purchase" for Robinson-Patman purposes. Aluminum Co. of America v. Tandet, 235 F.Supp. 111 (D.Conn.1964). But legally enforceable commitments must be in existence.

The exact nature of the contractual relations between the plaintiff and the defendant in Bruce's Juices is not spelled out in the Fifth Circuit's 1951 opinion with extreme precision. It is far from clear that the opinion, in light of the facts of the case, permits recovery in the absence of purchases. It is apparent, though, as was observed in Tandet, 235 F.Supp. at 114, that Bruce's Juices cannot be read "to authorize any prospective buyer or offeree in the open market to be a beneficiary under the Act."

In Bruce's Juices, the plaintiff discovered that the defendant, a can manufacturer, had been selling a particular type of can to plaintiff's competitors at a secret discount.⁴ This can was known as the "3.12 Iscan." When plaintiff learned of the secret discount, it sought for itself the same low price on the 3.12 Iscan or, in lieu of that, an equivalent low price on a similar can. The defendant refused to allow the plaintiff the same low price on 3.12 Iscans as the plaintiff's competitors were getting. This, the court said, "made it financially impossible for plaintiff to purchase that particular Iscan . . .." 187 F.2d at 923 (emphasis added). It does not appear from the Fifth Circuit's opinion that the plaintiff ceased purchasing cans from the defendant when the defendant refused to allow the...