Lefrak v. ARABIAN AMERICAN OIL COMPANY

• Decision Date: 12 November 1975
• Docket Number: 75-C-135 and 75-C-467.,No. 74-C-1700,75-C-15,74-C-1700
• Parties: Samuel J. LEFRAK et al., Plaintiffs, v. ARABIAN AMERICAN OIL COMPANY et al., Defendants. NEW YORK CITY HOUSING AUTHORITY, Plaintiff, v. ARABIAN AMERICAN OIL COMPANY et al., Defendants. ROCHDALE VILLAGE, INC., Plaintiff, v. ARABIAN AMERICAN OIL COMPANY et al., Defendants. Harry B. HELMSLEY et al., Plaintiffs, v. ARABIAN AMERICAN OIL COMPANY et al., Defendants.
• Court: U.S. District Court — Eastern District of New York

405 F. Supp. 597

Samuel J. LEFRAK et al., Plaintiffs, v. ARABIAN AMERICAN OIL COMPANY et al., Defendants.

NEW YORK CITY HOUSING AUTHORITY, Plaintiff, v. ARABIAN AMERICAN OIL COMPANY et al., Defendants.

ROCHDALE VILLAGE, INC., Plaintiff, v. ARABIAN AMERICAN OIL COMPANY et al., Defendants.

Harry B. HELMSLEY et al., Plaintiffs, v. ARABIAN AMERICAN OIL COMPANY et al., Defendants.

Nos. 74-C-1700, 75-C-15, 75-C-135 and 75-C-467.

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

November 12, 1975.

David Berger, P. A., Philadelphia, Pa. and Edelman, Berger, Peters & Koshel, by Jerome Edelman, Brooklyn, N. Y., for plaintiffs.

Donovan, Leisure, Newton & Irvine, New York City, for defendant, Mobil Oil Corp.

COSTANTINO, District Judge.

Defendant Mobil Oil Corporation moves in Samuel J. Lefrak, et al. v. Arabian American Oil Co., et al., New York City Housing Authority v. Arabian American Oil Co., et al., Rochdale Village, Inc. v. Arabian American Oil Co. and Harry B. Helmsley, et al. v. Arabian American Oil Co., et al., for an order pursuant to Rule 12(b) of the Federal Rules of Civil Procedure dismissing Counts I and II of each amended complaint for failure to state a claim upon which relief can be granted on the ground that plaintiffs lack standing to bring the action. Counts I and II respectively allege violations of § 1 of the Sherman Antitrust Act (15 U.S.C. § 1) and § 73 of the Wilson Tariff Act (15 U.S.C. § 8). Defendant Mobil also moves for an order dismissing Count III of each complaint for lack of pendent jurisdiction; it moves to dismiss Count IV of the Helmsley action for the same reason.

Turning first to the motion to dismiss Counts I and II, many of the points raised by Mobil relative to the sufficiency of the complaint need not be discussed here since they are dealt with sufficiently in this court's Memorandum and Order dated March 21, 1975 denying defendant Arabian American Oil Company's motion to dismiss. The standing issue was not dealt with in that opinion and is therefore analyzed here.

Section 4 of the Clayton Antitrust Act, 15 U.S.C. § 15, provides in relevant part: "Any person who shall be injured in his business . . . by reason of anything forbidden in the antitrust laws may sue therefor . . . and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney's fee." In Billy Baxter, Inc. v. Coca Cola, 431 F.2d 183, 187 (2d Cir. 1970) cert. denied, 401 U.S. 923, 91 S.Ct. 877, 27 L. Ed.2d 826 (1971) the court stated that there must be a "causal connection between an antitrust violation and an injury sufficient for the trier of fact to establish that the violation was a `material cause' of or a `substantial factor' in the occurrence of damage." The court held that a plaintiff must allege a "causative link to his injury which is `direct' rather than `incidental' or which indicates that his business . . . was in the `target area' of defendant's illegal act" 431 F.2d at 187. Plaintiffs allege that certain specific activities were part of an illegal conspiracy to control domestic oil supplies and prices. These actions included the creation of the New York Advisory Committee and the New York "meetings of chiefs." The injury alleged is that plaintiffs were forced to pay artificially high prices for home heating oil. The direct "causative link" between the injuries and the conspiracy is that plaintiffs' purchases were made at prices higher than those which they would have had to pay under natural conditions of competition in the absence of the conspiracy. Under the Billy Baxter test, the allegations of Counts I and II are sufficient to withstand the motion to dismiss for lack of standing.

In Calderone Enterprises Corp. v. United Artists Theatre Circuit, 454 F.2d 1292, 1295 (2d Cir. 1971) cert. denied, 406 U.S. 930, 92 S.Ct. 1776, 32 L. Ed.2d 132 (1972) the court held that for plaintiff to have standing under §...