LoCicero v. Humble Oil & Refining Company, Civ. A. No. 69-2124.

CourtUnited States District Courts. 5th Circuit. United States District Court (Eastern District of Louisiana)
Citation319 F. Supp. 1133
Decision Date09 November 1970
Docket NumberCiv. A. No. 69-2124.
PartiesJoseph LoCICERO and Dot'l Enterprises, Inc., Plaintiffs, v. HUMBLE OIL & REFINING COMPANY, Defendant.

Jerry A. Brown, Richard W. Bussoff, New Orleans, La., for plaintiff.

Bernard J. Caillouet, Lancelot P. Olinde, Francis J. Mooney Jr., New Orleans, La., William Simon, Washington, D. C., for defendant.

RUBIN, District Judge:

When he was denied renewal of a lease to operate an Esso station, Joseph LoCicero sued Humble Oil and Refining Company, which was both his landlord and supplier, claiming that it had violated the antitrust laws in two ways: it had engaged in a conspiracy to fix prices in violation of the Sherman Act, 15 U.S.C. sections 1 and 2, and it had exacted an illegal tie-in arrangement in contravention of both the Sherman Act and the Clayton Act, 15 U.S.C. §§ 1, 2, and 14.

Humble contends, by a motion for summary judgment, that the court lacks subject matter jurisdiction of the anti-trust charges.1 The motion is founded on a fugacious base, however, for there are disputed factual issues relative to jurisdiction sufficient to preclude dismissal on affidavits and depositions alone. Lack of jurisdiction may ultimately be shown, but it has not yet been demonstrated with the clarity required to support dismissal without a trial.2

In pertinent part, the first section of the Sherman Act provides:

"Every contract, combination * * * or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal: * * *" (15 U. S.C. § 1; emphasis supplied).

Section 2 states:

"Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a misdemeanor, * * *" (15 U.S.C. § 2; emphasis supplied).

Humble asserts that the retail sale of gasoline is inevitably and always an intrastate transaction. This may be disputable but we assume its correctness arguendo.3 However it is a non sequitur to conclude from this proposition that no intrastate transaction or group of intrastate transactions can constitute a restraint of trade or commerce among the states. The Sherman Act condemns conspiracies that restrain trade or commerce among the states even though the acts constituting the conspiracy are wholly intrastate. It seeks to avoid the unlawful result of these acts whether accomplished in the course of interstate commerce or by purely local activities.

Thus it has been repeatedly held that the interstate commerce requirement of the Sherman Act is satisfied if it is shown either that the defendant committed the unlawful acts in the flow of interstate commerce or that the acts, though done in local or intrastate trade, nevertheless had a direct and substantial effect on interstate commerce. Radiant Burners, Inc. v. People's Gas, Light & Coke Co., 364 U.S. 656, 81 S.Ct. 365, 5 L.Ed.2d 358 (1961); Page v. Work, 9 Cir. 1961, 290 F.2d 323; Donlan v. Carvel, D.Md., 209 F.Supp. 829 (1962).

For purposes of the price-fixing allegation, it is unnecessary to determine whether the transactions between Humble and LoCicero were interstate in nature. The business of a victim of a conspiracy in restraint of trade may be wholly local, but if the defendant's restraint is accomplished through interstate trade or substantially affects that trade, the Sherman Act has been violated. United States v. Frankfort Distilleries, 1945, 324 U.S. 293, 65 S.Ct. 661, 89 L.Ed. 951; Savon Gas Stations No. 6, Inc. v. Shell Oil Co., D.Md.1962, 203 F. Supp. 529, aff'd 4 Cir. 1962, 309 F.2d 306, cert. denied 372 U.S. 911, 83 S.Ct. 725, 9 L.Ed.2d 719 (1963).

Humble Oil drills, refines and distributes oil and its related products. It sells these products through 326 service stations in Louisiana. Persons engaged in interstate commerce, truck lines, and businesses engaged directly in commerce buy its products. If a price fixing conspiracy existed, it affected all of them, and not merely the housewife who happened to fill the tank of her automobile at LoCicero's station.

The emphasis on the incidental fact that LoCicero's service station was not on an interstate highway is misplaced. Many Esso stations are on such highways, and the court itself has used its Esso credit card to buy gas from such stations while engaged in interstate travel. The ultimate issue is whether the total conspiracy affected interstate commerce, not whether this effect arose from the impact of the conspiracy on the plaintiff alone.

Because of the nature of the issues and the difficulty of pleading precisely the effects on interstate commerce before discovery, summary disposition of private antitrust actions should be sparingly granted. Poller v. CBS, (1962), 368 U.S. 464, 82 S.Ct. 486, 491, 7 L.Ed.2d 458; Radovich v. NFL, (1957) 352 U.S. 445, 77 S.Ct. 390, 1 L.Ed.2d 456; Chapiewsky v. G. Heileman Brewing Co., W. D.Wis., 1968, 297 F.Supp. 33. The moving party must positively and clearly demonstrate that there is no genuine issue of fact, and any doubt as to the existence of such an issue is resolved in the opponent's favor. Nat'l Screen Service Corp. v. Poster Exchange, Inc., 5 Cir. 1962, 305 F.2d 647.

Here, discovery has been substantially completed insofar as the trial issues originally contemplated were concerned. But the evidence brought to the court's attention with respect to jurisdictional facts is not conclusive. The plaintiff has alleged that Humble's operations were in interstate commerce. The defendant has failed to negate the possible existence of an interstate trade in the marketing of gas and oil and related products that would be affected by the alleged price-fixing. Neither is it clear what effect, if any, a price fixing conspiracy with respect to retail sales would have on oil drilling and refining operations or on interstate shipments of crude oil. Since the resolution of these issues must await a further development of the facts, the summary judgment motion can not be granted.

Plaintiff has further alleged that Humble tied the purchase of batteries, tires and other accessories (BTA) to the purchase of its gasoline in violation of the third section of the Clayton Act, 15 U.S.C. § 14. This section provides:

"It shall be unlawful for any person engaged in commerce, in the course of such commerce, to lease or make a sale or contract for sale of goods, * * * on the condition, agreement, or understanding that the lessee or purchaser thereof shall not use or deal in the goods * * * of a competitor or competitors of the lessor or seller, * * *" (15 U.S.C. § 14; emphasis supplied).4

The Clayton Act makes it easier to prove the illegality of a tie-in requirement than does the Sherman Act.5 But, as the language quoted above indicates, its jurisdictional requirements are more stringent. The offense must occur "in the course of such interstate commerce." Under the Clayton Act, the unlawful transactions must take place in the flow of interstate commerce; impact on such commerce, no matter how substantial, is insufficient. Standard Oil Co. v. F. T. C., 340 U.S. 231, 71 S.Ct. 240, 95 L.Ed. 239 (1951); Willard Dairy Corp. v. National Dairy Products Corp., 6 Cir. 1962, 309 F.2d 943; cf. Walker Oil Co. v. Hudson Oil Co. of Missouri, 5 Cir. 1969, 414 F.2d 588.

What constitutes the flow or current of commerce is not a technical legal conception, but a practical one drawn from the course of business, Swift and Co. v. United States, (1905) 196 U.S. 375, 25 S.Ct. 276, 49 L.Ed. 518. It is dependent upon the economic facts of each case. See Walker Oil Co. v. Hudson Oil Co. of Missouri, 5 Cir. 1969, 414 F.2d 588, at 590 (concurring opinion).

LoCicero has alleged that the BTA are manufactured outside of Louisiana and distributed by Humble to its station operators. It is not clear whether these items are shipped from the manufacturers directly to the operators. But if they are, and if a tie-in requirement is shown, then it might be concluded that this was "in the course of such interstate commerce."

It is also possible that some or all of the BTA's are shipped from an out-of-state manufacturer to a Humble warehouse in Louisiana and then to the operator. Whether this warehousing operation, if it occurs, would take the goods out of the interstate current and immunize any later tie-in requirement from the strictures of the Clayton Act depends on several material factual issues as yet unresolved in this proceeding. Fifth Circuit cases make clear that the conclusion rests on whether the warehouseman acts as an independent businessman or as an agent of the manufacturer,6 and on the nature of his contractual relationship with his customer.7 Humble suggests that contrary authority is to be found in Uniform Oil Co. v....

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