Massachusetts Brewers Ass'n v. Ballantine & Sons Co.

• Decision Date: 05 April 1955
• Docket Number: Civ. No. 54-806.
• Citation: 129 F. Supp. 736
• Court: U.S. District Court — District of Massachusetts
• Parties: MASSACHUSETTS BREWERS ASSOCIATION et al. v. P. BALLANTINE & SONS CO. et al.

129 F. Supp. 736

MASSACHUSETTS BREWERS ASSOCIATION et al. v. P. BALLANTINE & SONS CO. et al.

Civ. No. 54-806.

United States District Court, D. Massachusetts.

April 5, 1955.

Sherburne, Powers & Needham, Arthur C. Sullivan, W. Langdon Powers, Boston, Mass., for plaintiff.

Julius H. Soble, Boston, Mass., for defendants Cody Distributing Co., M. F. Avila, Inc., Elks Spring Beverage Co., Flynn, Inc., Domenic Spinale, dba North Shore Distributing Co., S. S. Pierce Co., Plymouth Bottling Works, Inc., Henry G. Sears Co.

Charles B. Rugg, Warren F. Farr, Donald R. Grant, Ropes, Gray, Best, Coolidge & Rugg, Boston, Mass., for defendant P. Ballantine & Sons Co.

FORD, District Judge.

The complaint in this action states that it is brought to recover damages for alleged violation by defendants of § 2(a) of the Clayton Act, 15 U.S.C.A. § 13(a), and § 3 of the Robinson-Patman Act, 15 U.S.C.A. § 13a.¹ Defendants move to dismiss for failure to state a claim on which relief may be granted, and for lack of jurisdiction over the subject matter. An amended complaint was filed subsequent to the filing of the motions to dismiss, which are taken as now directed against the amended complaint.

The allegations of the amended complaint may be summarized as follows: Plaintiffs are Massachusetts corporations, one a non-profit trade association of the brewing industry, the others engaged in business in Massachusetts as manufacturers or wholesale distributors of malt beverages, including beer and ale. Defendant P. Ballantine & Sons Co. is a New Jersey corporation producing beer and ale in New Jersey. The other defendants, one an individual, the others Massachusetts corporations, are engaged in business in Massachusetts as wholesalers (and one also as a jobber) of beer and ale, and all sell the products of defendant Ballantine to retail licensees in Massachusetts in competition with the products of plaintiff manufacturers and distributors.

Ballantine advertises its products extensively in Massachusetts, has an agent to represent it here, and has permits to transport its products into Massachusetts and the sale of these products is licensed in Massachusetts.

During the three-month period from June 1 to September 1, 1954 Ballantine beer was sold to retailers in Massachusetts at prices (set out in detail in the complaint) below those normally charged before and after that period and at prices lower than those charged to Connecticut retailers by the wholly-owned subsidiaries of Ballantine who distribute its products in that state. It is alleged that Ballantine "determines, controls and supervises the sales method, policy and prices of the distributors of its products" including the other defendants. It is alleged that all the defendants caused the alleged reduction of the price of Ballantine beer for the purpose of injuring, preventing, destroying and substantially lessening competition in Massachusetts. Finally, it is alleged that the reduction in price took place during the peak season for the sale of malt beverages, and that the acts of defendants resulted in a loss of sales to the plaintiffs, thereby damaging them in the various amounts set out as to each plaintiff.

A vital question raised by defendants is as to the adequacy of the allegations of the complaint with respect to the interstate commerce aspects of the case. Under both §§ 13(a) and 13a, as here applicable, the acts enumerated are made unlawful only when performed by persons engaged in interstate commerce and in the course of such commerce. The complaint does not clearly state that any of the defendants here were engaged in interstate commerce. The assertion that Ballantine manufactures products which are subsequently sold by wholesalers in another state does not necessarily imply that Ballantine itself is engaged in interstate commerce. Lipson v. Socony Vacuum Corp., 1 Cir., 87 F.2d 265, 267. The fact that the other defendants have sold locally in Massachusetts products made in another state does not mean that these defendants have themselves engaged in interstate commerce. Brosious v. Pepsi-Cola Co., 3 Cir., 155 F.2d 99, 103. It is true, of course, that if goods produced in New Jersey are later found in Massachusetts and Connecticut, some one must at some time have engaged in interstate commerce with respect to them. That, however, is as far as the amended complaint goes. That is not enough. The complaint should allege facts to indicate, as to each defendant, that it was itself engaged in interstate commerce. Otherwise it cannot be held to have violated §§ 13(a) and 13a.

The complaint is also defective in regard to any allegation of an unlawful price discrimination in the course of interstate commerce. Lewis v. Shell Oil Co., 7 Cir., 50 F.Supp. 547, 548. In order to state a cause of action based on unlawful price discrimination under the sections here involved, it must be alleged that there were two sales made by the same person to two different purchasers at different prices, and that at least one of these sales was in interstate commerce. Chicago Sugar Co. v. American Sugar Refining Co., 7 Cir., 176 F.2d 1, 7. The complaint is clearly based...