Littlejohn v. Shell Oil Company

• Decision Date: 22 March 1972
• Docket Number: No. 71-2090.,71-2090.
• Citation: 456 F.2d 225
• Parties: Ralph H. LITTLEJOHN, Jr., Plaintiff-Appellant, v. SHELL OIL COMPANY et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

456 F.2d 225 (1972)

Ralph H. LITTLEJOHN, Jr., Plaintiff-Appellant, v. SHELL OIL COMPANY et al., Defendants-Appellees.

No. 71-2090.

United States Court of Appeals, Fifth Circuit.

March 22, 1972.

Jay M. Vogelson, Dallas, Tex., Thomas R. Hartnett, III, Irving, Tex., for plaintiff-appellant.

William Simon, Washington, D.C., Donald L. Case, Dallas, Tex., John S. Kingdon, Washington, D.C., for Shell Oil Co.; Howrey, Simon, Baker & Murchison, Washington, D.C., Jackson, Walker, Winstead, Cantwell & Miller, Dallas, Tex., of counsel.

James C. Hamill, Oklahoma City, Okl., for Sooner Oil.

Khent H. Rowton, Dallas, Tex., Matthew J. Gallo, Chicago, Ill., for American Oil Co.; Kilgore & Kilgore, Dallas, Tex., of counsel.

Before WISDOM, COLEMAN and SIMPSON, Circuit Judges.

SIMPSON, Circuit Judge:

In this suit for damages under Section 2(a) of the Clayton Act, as amended by the Robinson-Patman Act, Title 15, U.S.C., Section 13(a), the district court concluded that it was without subject-matter jurisdiction and granted summary judgment for the defendants, 326 F.Supp. 45. We hold that a complaint under the Robinson-Patman Act need not allege that one of the sales involved was interstate in character as long as it charges that interstate sales were used to underwrite allegedly discriminatory intrastate price-cutting tactics. Accordingly, we reverse the judgment of the court below and remand for further proceedings.

The plaintiff, Ralph H. Littlejohn, in his original and amended complaints, alleged that he operated an independent gas station under the trade name of Lynmar Oil Company in Garland, Texas, which is located in the north portion of Dallas County. Within half a mile were two other stations, one bearing the name of Shell Oil Company (Shell) and the other bearing the name of American Oil Company (American). Sooner Oil Company (Sooner) was joined as American's local wholesale dealer. In June, 1970, these stations began selling gasoline to the general public at reduced prices, one of them at 25.9 ¢ and the other at 26.9 ¢ per gallon. At the same time gasoline was being sold by other stations in the Dallas, Texas, area bearing the names Shell and American for 28.9 ¢ per gallon. Littlejohn says that he could not meet this kind of competition and that he was forced to close his station. The amended complaint also alleged:

"The profits of Defendants Shell Oil Company, American Oil Company and Sooner Oil Company derived from their interstate operations were wrongfully used by each of them to sell gasoline at the American Oil Company service station at Forest Lane and Plano Road and at the Shell Oil Company service station at Forest Lane and Plano Road at a lower price than each was selling gasoline to any other American Oil Company or Shell Oil Company service station in the Northeast Dallas area. In particular, Defendants American Oil Company and Shell Oil Company used profits which each of them derives from the overall large interstate producing and marketing business of each of them." (Paragraph IV.D, first amended complaint)

The original complaint was filed September 29, 1970. It alleged that Shell and American did business in interstate commerce but did not allege that the gasoline delivered to the Shell and American stations in Dallas County, Texas, had moved in interstate commerce or had involved as much as one sale in interstate commerce. On January 20, 1971, the district judge held a pretrial conference at which time he indicated his doubts about subject-matter jurisdiction. The result was that he gave Littlejohn until February 1, 1971, to file an amended complaint, briefs on subject-matter jurisdiction to be filed by February 22, 1971, and it was indicated that the court would try to rule on the issue by March 1, 1971. It was further directed that American, Sooner, and Shell should complete their discovery during March and April, 1971, while Littlejohn was to propound written interrogatories during March and April, and should take oral depositions in May and June, 1971.

The amended complaint, which included the above-quoted allegation concerning the defendants' interstate operations, was filed on February 1, 1971. Again, no sale made across state lines was alleged. On February 12, 1971, the defendants began to file motions for summary judgment on the ground that the allegedly discriminatory sales were not made in interstate commerce and thus, as a matter of law, were not covered by the Robinson-Patman Act.¹ The motions were supported by affidavits which asserted that none of the gasoline involved had moved in interstate commerce, having been produced at refineries in Texas, and that there had been no sale across state lines.

On March 1, 1971, the plaintiff filed an unsworn response to the motions for summary judgment in which he urged that the motions of the defendants were premature, that the facts were not before the court in complete fashion, that the plaintiff had just recently initiated discovery with reference to jurisdictional facts by requesting the defendants to produce documents, and that the defendants had no right to keep their records, personnel and sources of information from the plaintiff when sought through reasonable discovery. The summary judgment motions were argued March 10, 1971. Thirteen days after argument was had, the parties submitted an agreement to the court below to the effect that the defendants would be relieved of the obligation to comply with the plaintiff's request for production of documents in the event the district judge granted the defendants' motions for summary judgment. The district court, pointing to the amended complaint's failure to allege an interstate sale of a discriminatory nature, on April 28, 1971, granted the defendants' summary judgment motions. It is from the grant of these motions that the plaintiff below entered this appeal.

We are called upon to resolve two points of law on this appeal: (1) does the United States Supreme Court's decision in Moore v. Mead's Fine Bread Company, 1954, 348 U.S. 115, 75 S.Ct. 148, 99 L.Ed. 145, relieve the plaintiff of the burden of alleging and proving at least one discriminatory interstate sale? and (2) should the plaintiff be penalized (by affirmance of the lower court's judgment) because he did not respond to the defendants' motions for summary judgment by means of an affidavit (as required by Rule 56(f), Federal Rules of Civil Procedure)?

Moore, supra, was an action for treble damages for violations of the Clayton and Robinson-Patman Acts relating to price discrimination. Both parties were engaged in the bakery business in New Mexico, petitioner-plaintiff at Santa Rosa and respondent-defendant at Clovis. The Mead family interests controlled bakeries at several locations in New Mexico and Texas and employed integrated purchasing and marketing techniques. The respondent-defendant sold bread in Farwell, Texas, by means of truck deliveries from its Clovis, New Mexico, plant. From September, 1948, to April, 1949, respondent-defendant cut its prices in Santa Rosa, New Mexico, without cutting its prices anywhere else. As a result, petitioner-plaintiff was forced out of business. The district court entered judgment for the plaintiff and the Court of Appeals reversed. The Supreme Court, speaking through Mr. Justice Douglas, reinstated the district court's judgment. The following language from the Supreme Court's opinion in Moore is crucial to the disposition of this appeal:

"We think that the practices in the present case are also included within the scope of the antitrust laws. We have here an interstate industry increasing its domain through outlawed competitive practices. The victim, to be sure, is only a local merchant; and no interstate transactions are used to destroy him. But the beneficiary is an interstate business; the treasury used to finance the warfare is drawn from interstate, as well as local, sources which include not only respondent but also a group of interlocked companies engaged in the same line of business; and the prices on the interstate sales, both by respondent and by the other Mead companies, are kept high while the local prices are lowered. If this method of competition were approved, the pattern for growth of monopoly would be simple. As long as the price warfare was strictly intrastate, interstate business could grow and expand with impunity at the expense of local merchants. The competitive advantage would then be with the interstate combines, not by reason of their skills or efficiency but because of their strength and ability to wage price wars. The profits made in interstate activities would underwrite the losses of local price-cutting campaigns. No instrumentality of interstate commerce would be used to destroy the local merchant and expand the domain of the combine. But the opportunities afforded by interstate commerce would be employed to injure local trade. Congress, as guardian of the Commerce Clause, certainly has power to say that those advantages shall not attach to the privilege of doing an interstate business." 348 U.S. at 119-120, 75 S.Ct. at 150, 99 L.Ed. at 149-150.

Following the Moore decision, several Courts of Appeals have taken the position that the language quoted above is merely dicta and that the plaintiff is still required to allege and prove an interstate discriminatory sale in order to state a claim under the price discrimination provisions of the Robinson-Patman Act. Frequently, this limited application of the Moore ruling has been buttressed by reference to the existence of interstate bread sales in that very case. See Food Basket, Inc. v. Albertson's, Inc., 10 Cir.1967, 383 F.2d 785; Willard Dairy Corp. v. National Dairy Products Corp., 6 Cir.1962, 309 F.2d 943, cert. denied 1963, 373 U.S. 934, 83 S.Ct. 1534, 10 L.Ed.2d 691; Central Ice Cream Co. v. Golden Rod Ice Cream Co., 7 Cir.1961, 287 F.2d 265. This Court has never determined whether the Robinson-Patman Act...