Lloyd v. United Liquors Corp.

• Decision Date: 16 April 1953
• Docket Number: No. 11594.,11594.
• Parties: LLOYD v. UNITED LIQUORS CORP. et al.
• Court: U.S. Court of Appeals — Sixth Circuit

203 F.2d 789 (1953)

LLOYD v. UNITED LIQUORS CORP. et al.

No. 11594.

United States Court of Appeals Sixth Circuit.

April 16, 1953.

L. E. Gwinn and Don Owens, Jr., Memphis, Tenn. (Nelson, Norvell, Owens & Floyd, Memphis, Tenn., on the brief), for appellant.

Hamilton E. Little, Memphis, Tenn., Arthur J. Keeffe, Chattanooga, Tenn., for appellees.

Noone, Tanner & Noone, Chattanooga, Tenn., on the brief, for United Liquors Corp.

Frank J. Glankler, Hamilton E. Little, Shea & Pierotti, Tual & Morgan, Memphis, Tenn., on the brief, for Bluff City Beverage Co., and others.

Edward P. Russell, Memphis, Tenn., on the brief, for Consolidated Distributors.

Before SIMONS, Chief Judge, and MARTIN and MILLER, Circuit Judges.

MARTIN, Circuit Judge.

This action for treble damages in the amount of $156,000 was brought by appellant, a duly licensed retail liquor dealer in Memphis, Tennessee, for alleged violation of certain anti-trust statutes of the United States, sections 1, 13(a), (b) and (d), 13a and 15, Title 15 U.S.C.A., against numerous wholesale liquor dealers doing business in Memphis and neighboring territory in Tennessee, and also against the Memphis Retail Package Stores Association, Inc., a corporation comprised of some 170 retail liquor dealers in Memphis.

The various defendants filed answers denying the crucial allegations of the complaint and thereafter all filed either motions to dismiss the complaint or motions for summary judgment. Though varying in some details, the motions of the various appellees present the proposition that there was no genuine issue raised as to any material fact; and that the District Court had no jurisdiction, inasmuch as the allegations of the complaint and the testimony of appellant, taken by pre-trial deposition, disclosed that the appellees are engaged solely in intrastate or local commerce or trade, that the alleged acts of the defendants on which suit is brought occurred in and solely affect intrastate or local commerce, that any possible effect of the alleged acts upon interstate commerce was accidental, secondary, remote and conjectural, and that the court accordingly was without jurisdiction.

After considering the pleadings and the pre-trial deposition of appellant, Jack H. Lloyd, taken by appellees on notice pursuant to Rule 26 of the Rules of Civil Procedure, 28 U.S.C.A.; and after hearing argument of counsel and engaging in colloquy with them, the District Judge dismissed the cause for lack of jurisdiction upon the above-stated grounds advanced by appellees' attorneys.

The complaint averred that the defendants (now appellees) unlawfully and in violation of the anti-trust statutes had entered into a trust, combination and conspiracy for the purpose and with the result of restraint of trade, lessening of competition, fixing and controlling the price of spiritous and vinous liquors from the wholesalers to the retailers in Memphis and Shelby County, Tennessee; that, by their unlawful and concerted efforts and acts, they had fixed and controlled the price of liquor in the named locale; and that they had "resorted to coercion, threats, duress and boycotting, all of which is illegal and affected interstate commerce, and in violation of the aforesaid statutes of the United States." Italics in the foregoing quotation have been supplied. It was averred further that the conspirators in the aforementioned unlawful combination had by their concerted acts fixed the prices of liquor to the retailers and to the consumers in Shelby County thereby eliminating competition and establishing an artificial price level, that the conspirators were giving rebates and discounts to retailers in adjoining and neighboring counties, all of whom were in competition with appellant; and that such actions were unlawfully discriminatory and resulted in raising the price of liquor to consumers in Shelby County.

The complaint charged further that the defendants, by their concerted acts, had combined to maintain specified minimum prices to the consumers and had induced and coerced wholesalers, through boycotts and boycott threats or other reprisals, to refrain from selling to price-cutting retailers who, through volume buying, could and would "pass on a saving to the consumer."

Finally, the complaint alleged: "That prior to August, 1949, the defendant Wholesale Liquor Dealers were engaged in fair competition in giving discounts for volume buying and such discounts were passed on to the consumer in Shelby County by retailers; that in or about August, 1949, the defendant Memphis Retail Package Stores Association, Inc., acting as a representative of the 170 members thereof, in an effort to and with the result of forcing a discontinuance of the aforesaid discounts for volume buying invoked coercion and boycotting upon the wholesalers, some of whom were unwilling to enter into said conspiracy; that as the result of the boycotting, coercion and other unlawful acts, the fair competition and practice of discounting for volume buying was discontinued and prohibited, as a result of which an artificial price level and price control was placed upon their commodities in Shelby County. That said illegal price control and resulting price fixing to the consumer has remained in effect under constant threats of coercion and boycotting by the defendant Memphis Retail Package Stores Association, Inc., and members thereof, acting individually and collectively to carry out the purpose of the Association, and after the inception of the above described conspiracy, the wholesalers or some of them, have taken concerted steps to continue and preserve the unnatural and illegal price level existing in Shelby County as a result of the conspiracy to fix prices and to discriminate against plaintiff and others who refused to join in illegal schemes, practices and discriminations, for the purpose of maintaining uniform minimum prices for the sale of said commodities in Shelby County."

As above stated, the District Judge sustained the contention of the defendants below that, as shown by the complaint, their acts complained of affected solely intrastate or local commerce and had no primary or direct effect on interstate commerce. Appellant contends that the allegation of his complaint, that the illegal coercion, threats, duress and boycotting by the defendants in violation of the anti-trust statutes "affected interstate commerce", was a factual allegation and not merely a conclusion of the pleader. In view of the liberal intendments to be accorded the pleader on motions to dismiss and for summary judgment, strength inheres in this argument; but we think the correctness of appellant's position does not necessarily rest upon such interpretation.

In our judgment, the Court should have allowed appellant to file the amendments to his complaint, proposed by his attorney after the argument of the motions to dismiss and for summary judgments, even though appellant's attorney had not complied with the request of the Court that any amendment to the complaint should be presented before the argument. Prior to the argument, the attorney for appellant directed the attention of the Court to the fact that the required ten days' notice of the motions for summary judgment had not expired at the time of the hearing of the motions, but stated that he was willing to go on, if, in the course of the presentation, he might ask the Court for the privilege of further amending, which he did not think would be necessary, but he added that he did not desire to waive his right to apply for amendment. He said: "With that statement, we are ready to proceed."

An attorney for one of the defendants demanded that appellant's advocate be required to state presently his intention with respect to amendment. The Court inquired of the latter what he had in mind concerning amendments, and received the reply: "We have no amendment that we want to offer now." Further discussion ensued, in which the attorney stated that he thought it would be unnecessary to ask any further amendment, but that, "in the multitude of cases, the many distinctions that are drawn in the application of the Federal Anti-trust statutes," there might be some matter apparently unimportant or insignificant that could be dealt with when reached. He argued that he did not think it necessary to say anything concerning the offering of any proposed amendment that might be considered material in the development of the case, adding that according to federal practice and "the rulings of our court of appeals" amendments may be made even after a case has been decided.

The Judge stated that, while considerable latitude with respect to amendments is permitted under the rules, the matter is usually directed to the sound discretion of the Court. He again questioned the attorney as to what he had in mind with respect to amendment. The attorney responded: "I don't think it will be necessary to offer any, but I did not want it to be said, if I did reach that conclusion in the development or discussion of the case, to come along and say, `Why didn't you discuss that before we entered into this matter?' Of course, it is discretionary with the Court, as a rule, to grant or refuse amendment."

Further discussion was indulged, following which the Judge commented: "I don't believe there is really anything before the Court. You are asking no amendment at this time?" Counsel replied, "No, sir." The Court pointed out that the attorney was not asking for a continuance and had virtually said that he was ready to argue the motion; then asked: "Are you ready or not?" The lawyer replied: "Yes, we are ready."

After argument, in which numerous counsel participated, the attorney for appellant offered an amendment to the complaint, to the filing of which objection was made and sustained. The Court said: "I don't believe the matters set out in the amendment are material. We have been arguing this matter here all morning now, and couns...