Kentucky Rural Elec. Coop. Corp. v. Moloney Elec. Co.

• Citation: 282 F.2d 481
• Decision Date: 14 September 1960
• Docket Number: No. 13992.,13992.
• Parties: KENTUCKY RURAL ELECTRIC COOPERATIVE CORPORATION, Plaintiff-Appellant, v. MOLONEY ELECTRIC COMPANY, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

282 F.2d 481 (1960)

KENTUCKY RURAL ELECTRIC COOPERATIVE CORPORATION, Plaintiff-Appellant, v. MOLONEY ELECTRIC COMPANY, Defendant-Appellee.

No. 13992.

United States Court of Appeals Sixth Circuit.

September 14, 1960.

Philip P. Ardery of Brown, Ardery, Todd & Dudley, Louisville, Ky., for appellant.

Malcolm Y. Marshall and Richard F. Newell, Ogden, Brown, Robertson & Marshall, Louisville, Ky., and William H. Ferrell of Keefe, Schlafly, Griesedieck & Ferrell, St. Louis, Mo., on the brief, for appellee.

Before MILLER and CECIL, Circuit Judges, and HOLLAND, Senior District Judge.

SHACKELFORD MILLER, Jr., Circuit Judge.

The appellant, Kentucky Rural Electric Cooperative Corporation, hereinafter referred to as KYRECC, brought this action against the appellee, Moloney Electric Company, hereinafter referred to as Moloney, to recover triple damages in the amount of $472,666.20 under the provisions of the Robinson-Patman Act, Sections 13, 13a, 15 and 22, Title 15 U.S.C.A.

KYRECC is a Rural Electric Co-operative Corporation incorporated under the Kentucky statutes. It is not an operating rural electric co-operative and does not generate, transmit or distribute electric energy. It is a so-called "super co-operative," owned and controlled by twenty-two operating co-operatives. Among the purposes recited in its bylaws is to "purchase materials, supplies and equipment for its members," the co-operatives.

Moloney manufactures electrical equipment and supplies.

Beginning in 1949, KYRECC started handling transformers and a few other items of equipment manufactured by Moloney. It would take from a co-operative an order for Moloney equipment and send the order to Moloney in St. Louis. Moloney would bill the co-operative the ordinary price for the equipment and send to KYRECC its commission on the sale. During the period 1949 to October 15, 1955, Moloney paid to KYRECC a commission between 7½% and 10% upon all sales of Moloney equipment effected through KYRECC. During this period KYRECC did not make any sale to any customer or purchaser other than the co-operatives.

In October, 1955, Moloney notified KYRECC that it would thereafter not pay to KYRECC such commissions on orders placed subsequent to October 15, 1955, and in accordance with such notice has since October 15, 1955, refused to pay any commissions to the appellant.

KYRECC's complaint alleged that Moloney's refusal to accept further orders and its arbitrary termination of the previously existing arrangement had the effect of lessening competition between distributors and manufacturer's sales representatives of electrical equipment, that it tended to create a monopoly and destroy and prevent competition, and was unlawful discrimination in favor of certain distributors, suppliers, jobbers and manufacturer's sales representatives in competition with KYRECC, by reason of which KYRECC had suffered damage in the amount of $157,555.40.

Moloney contends that with respect to the purchase by the distribution co-operatives, through KYRECC, of transformers and equipment manufactured by Moloney, KYRECC was an agent and representative of, and was acting in fact for and in behalf of both the member co-operatives, who were owners of KYRECC, and the participating co-operatives, and that the payment by Moloney to KYR ECC and the acceptance by KYRECC from Moloney of anything of value as a commission upon the purchase through KYRECC of transformers and other equipment manufactured by it was unlawful by reason of provisions of Section 2(c) of the Clayton Act, as amended by the Robinson-Patman Act, Section 13(c), Title 15 U.S.C.A. For that reason it claims it was legally required to terminate the payment of such commissions and that its action in refusing to do an illegal act did not subject it to liability.

Section 2(c) of the Clayton Act, as amended, provides as follows:

"It shall be unlawful for any person engaged in commerce, in the course of such commerce, to pay or grant, or to receive or accept, anything of value as a commission, brokerage, or other compensation, or any allowance or discount in lieu thereof, except for services rendered in connection with the sale or purchase of goods, wares, or merchandise, either to the other party to such transaction or to an agent, representative or other intermediary therein where such intermediary is acting in fact for or in behalf, or is subject to the direct or indirect control, of any party to such transaction other than the person by whom such compensation is so granted or paid."

The facts are not in dispute and were established by the testimony of the executive manager of KYRECC, its articles of incorporation, bylaws, and other exhibits. Moloney's motion for summary judgment was sustained by the District Judge, from which ruling this appeal was taken.

There is no merit in KYRECC's complaint that it was error for the District Judge to dispose of the case on a motion for summary judgment. The undisputed facts presented pure questions of law, and KYRECC was afforded full opportunity to be heard on the legal issues presented by the pleadings. Feldman v. Miller, 95 U.S.App.D.C. 146, 220 F.2d 826. Even though the issue be a difficult one, if it is purely legal and not factual, summary judgment is proper. Morr v. United States, 6 Cir., 243 F.2d 913, 914.

In support of this ruling, the District Judge filed a memorandum opinion, which is reported at Kentucky Electric Cooperative Corporation v. Moloney Electric Company, D.C., 175 F.Supp. 250. For the reasons given and the authorities cited therein, to which reference is made, we are of the opinion that the commissions paid by Moloney to KYRECC were in violation of ...