LOUISIANA FARMERS'P. UNION v. Great Atlantic & Pac. T. Co.

• Decision Date: 09 February 1940
• Docket Number: No. L. R. 126.,L. R. 126.
• Citation: 31 F. Supp. 483
• Parties: LOUISIANA FARMERS' PROTECTIVE UNION, Inc., v. GREAT ATLANTIC & PACIFIC TEA CO. OF AMERICA, Inc., et al.
• Court: U.S. District Court — Eastern District of Arkansas

31 F. Supp. 483

LOUISIANA FARMERS' PROTECTIVE UNION, Inc., v. GREAT ATLANTIC & PACIFIC TEA CO. OF AMERICA, Inc., et al.

No. L. R. 126.

District Court, E. D. Arkansas, W. D.

February 9, 1940.

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COPYRIGHT MATERIAL OMITTED

James H. Morrison, of Hammond, La., David P. Siegel, of New York City, Lee Cazort, Jr., of Little Rock, Ark., Gordon Goodbee, of New Orleans, La., and Joseph A. Sims, and C. Paul Phelps, both of Hammond, La., for plaintiff.

Caruthers Ewing, of New York City, Owens, Ehrman & McHaney, of Little Rock, Ark., and Logan Morrill, of Cincinnati, Ohio, for defendants Great Atlantic & Pacific Tea Co. of America, Inc., the Atlantic Commission Co., Inc., and the Kroger Grocer & Baking Co., Inc.

Clark & Rice, of Dallas, Tex., and House, Moses & Holmes, of Little Rock, Ark., for defendant Safeway Stores, Inc.

LEMLEY, District Judge.

This case comes on for hearing upon the joint motions of the defendants, the Great Atlantic & Pacific Tea Company of America, Inc., and the Atlantic Commission Company, Inc. (hereinafter referred to as A. & P. and the Atlantic, respectively), and the separate motion of the defendant, Kroger Grocer & Baking Company, Inc. (hereinafter called Kroger), for a bill of particulars, and upon the separate motion of the defendant, Safeway Stores, Inc. (hereinafter designated as Safeway) for a bill of particulars and more definite statement; all of which motions are addressed to the amended complaint of the plaintiff, Louisiana Farmers' Protective Union, Inc.

In a stipulation of the parties, filed some time back, it was agreed that the defendants might file motions to strike and to sever after the court had ruled upon the aforesaid motions for bills of particulars, and, therefore, other possible questions with reference to the amended complaint are not now presented. A more orderly procedure would have resulted had the defendants filed their several motions simultaneously. The motions could then have been consolidated for hearing as is contemplated under the rules.

This suit was originally brought as a class action by the Louisiana Farmers' Protective Union, Inc., and one Ellis M. Jenkins, an alleged member of said association, as plaintiffs; and motions for a bill of particulars, to strike, to sever, to dismiss, and other motions addressed to the original complaint were filed by the several defendants, but before any of these motions were acted upon by the court the plaintiff, Louisiana Farmers' Protective Union, Inc., filed an amended complaint in which its coplaintiff, Ellis M. Jenkins, was dropped as a party plaintiff, and in which it alleges that all of its members have duly assigned unto it their alleged causes of action as set out in the original and amended complaints.

The amended complaint in question sets up three alleged causes of action, the first based upon the Sherman Anti-Trust Act, U. S. Code Annotated, Title 15, Section 1 et seq.; the second, upon the Clayton Act, Title 15, Section 15 et seq.; and the third, upon the Robinson-Patman Act, Title 15, Section 13 et seq.

In its said amended complaint the plaintiff alleges, among other things, the following:

That it is a non-profit, cooperative corporation, composed of each and every strawberry grower in the state of Louisiana who ships strawberries in interstate commerce (alleged in the original complaint to be 8,000 in number), and functions as the marketing agent for its members in the marketing and distribution of strawberries; that each and every member of its said association has duly assigned and transferred unto the plaintiff certain alleged causes of action and all their right, title, and interest in and to all the damages to their business which they have sustained by and through the alleged unlawful acts of the defendants set forth in said complaint;

That defendants are engaged in the retail grocery business as the owners and operators of retail grocery stores located throughout the United States, certain of the defendants being buying subsidiaries of others; that the defendant, A. & P., owns, operates, and controls retail chain stores to the number of 13,300 in 35 states, that the defendant, Kroger, has a chain of 3,990 retail stores in the United States, and the defendant, Safeway, a chain of over 3,020 retail stores in the United States; that the defendants, through their retail stores under their proper names as shown in the complaint, and operating under various other names, but which are wholly controlled and dominated by the defendants, handled in the years 1937 and 1938 approximately 25% of plaintiff's strawberries at retail through their stores operated throughout the United States;

That in the years 1937 and 1938 the defendants combined and conspired with the object and intent of stifling competition and monopolizing the retail distribution of food products in the United States, particularly strawberries; that in pursuance of said alleged plan the defendants have employed the merchandising technique of using "loss leaders" on certain products, and more particularly plaintiff's strawberries, to destroy the business of competitors, and in that way control the sole outlet for strawberries and other food products; that the result of said conspiracy was to permit said defendants to dictate, not only the prices to be paid by them for plaintiff's strawberries, but to create a monopoly unto themselves for the exclusive distribution of all strawberries and agricultural and food-stuff commodities at retail in the United States; that a further result of said conspiracy was to enable the defendants to control the retail distribution of food products, and more particularly strawberries, in such a manner as would vest the defendants with arbitrary power to dictate prices, not only to the ultimate consumer, but to the producer as well; all in alleged violation of the Sherman Act;

That the defendants have resorted to the merchandising technique of using "loss leaders" of certain products, and more particularly of plaintiff's members' strawberries, with the object and intent of destroying competition, and in that way to control the sole outlet for strawberries and other food products; that the use of strawberries as "loss leaders" by the defendants resulted in a price depreciation of the entire strawberry market and an elimination of competition in the strawberry field; that the defendants, having purchased from the plaintiff's members the strawberries mentioned in the complaint, and being so engaged in commerce throughout the United States, and in the sale of said strawberries therein, and in the course of such commerce, "discriminated in price and caused a discrimination in price between the different purchasers of said strawberries throughout the United States who purchased from retail stores throughout the United States and in stores other than the retail stores so conducted, owned, operated, and controlled by the defendants, which strawberries were sold for use, consumption and resale within the United States," and the effect of such discrimination was to substantially eliminate competition and tended to create a monopoly in the sale of strawberries; that after the defendants so purchased the said strawberries, they caused the same to be sold at prices below the purchase price thereof, and discriminated against the purchasers of other and independent retail stores throughout the United States, which said other retail stores were unable to meet the unfair, unlawful, and sacrificial prices below cost, at which the defendants caused the said strawberries to be sold in their retail stores, and that the effect of this discrimination was to substantially lessen the competition in the sale of strawberries and tended to create a monopoly over the strawberry industry, and over the products of the plaintiff; all in alleged violation of the Clayton Act;

That the defendants have resorted to the merchandising technique of using "loss leaders" as a means of price discrimination on certain products, and more particularly on plaintiff's strawberries, with the object and intent of destroying competition and in that way controlling the sole outlet for plaintiff's strawberries, and have sold and contracted to sell said strawberries at unreasonably low prices and below the purchase prices, for the purpose of destroying competition and eliminating competitors in the various parts of the United States, and practically throughout the United States; in alleged violation of the Robinson-Patman Act;

That during the season of 1937 the plaintiff, through its members, the strawberry farmers of Louisiana, shipped in interstate commerce 3,400 cars of strawberries, or 2,502,400 crates of strawberries, for which said members received an average of $1.57 per crate, and that during the season of 1938, through its members, the strawberry farmers of Louisiana shipped in interstate commerce 2,500 cars of strawberries, or 1,840,000 crates, for which said members received an average of $1.97 per crate; that had it not been for the alleged illegal acts of the defendants said strawberry farmers would have received, during the 1937 season, $6,005,760 for their strawberries, or an average of $2.40 per crate, and during the 1938 season, $4,324,000, an average of $2.35 per crate, and that on account of said illegal acts, the plaintiff's said members, the strawberry farmers, have suffered damage and loss of $2,796,192; and plaintiff prays for judgment in the amount of $8,328,976 (including treble damages) plus interest, costs, and a reasonable attorneys' fee.

The motions under consideration are practically identical, and for the purpose of this opinion references will be made mainly to the joint motion of the A. & P. and the Atlantic, and the rulings thereon will apply to similar requests contained in the other motions.

The said motion of A. & P. and the Atlantic requests the following items:

In Paragraph 1, that pla...