McCormack v. Theo. Hamm Brewing Co.

• Decision Date: 11 March 1968
• Docket Number: No. 5-66-77 Civil.,5-66-77 Civil.
• Citation: 284 F. Supp. 158
• Parties: George R. McCORMACK, d/b/a Hamm's Sales Company, a partnership, Plaintiff, v. THEO. HAMM BREWING CO., a Minnesota corporation, Defendant.
• Court: U.S. District Court — District of Minnesota

284 F. Supp. 158

George R. McCORMACK, d/b/a Hamm's Sales Company, a partnership, Plaintiff, v. THEO. HAMM BREWING CO., a Minnesota corporation, Defendant.

No. 5-66-77 Civil.

United States District Court D. Minnesota, Fifth Division.

March 11, 1968.

COPYRIGHT MATERIAL OMITTED

Reavill, Neimeyer, Johnson, Fredin & Killen, by Conrad M. Fredin, Duluth, Minn., for plaintiff.

Maun, Hazel, Green, Hayes, Simon & Aretz, by Joseph A. Maun, Lawrence J. Hayes, and John A. Murray, St. Paul, Minn., for defendant.

MILES W. LORD, District Judge.

MEMORANDUM

Defendant has moved for dismissal of several of the claims under Rules 12 and 56. Alternatively, defendant has moved the Court for an order requiring a more definite statement pursuant to Rule 12 (e) of the Federal Rules of Civil Procedure.

In view of the Court's decision to grant the motion for a more definite statement, it would perhaps be more orderly to defer decision on the other motions. However, because of the many delays which this case has already encountered, all motions will be decided at this point insofar as possible with the hope of narrowing the issues and expediting the resolution of the remaining issues.

This case follows close behind this Court's decision in Clausen & Sons, Inc. v. Theo Hamm Brewing Company, D.C., 284 F.Supp. 148. Many of the issues which appear in this case were resolved in the memorandum order which was issued in Clausen.

Counsel have submitted separate briefs dealing with the effect of that order on the issues in the instant case and the Court will refer liberally to Clausen in the resolution of these issues.

The defendant in this case is Hamm's Brewing Company, a subsidiary of Hueblein, Incorporated. Its principal office is in St. Paul, Minnesota. The plaintiff in this case is Hamm's Sales Company, a partnership formed for the distribution of beer products. According to the complaint, from 1950 to January 24, 1964, the plaintiff was one of the many independent distributors which had been designated the exclusive distributor of Hamm's products within a defined territory. The plaintiff was assigned the territory of St. Louis County, Minnesota. Its principal office is in Duluth, Minnesota.

Apparently these distributors sell only to retail outlets. Products manufactured by Hamm's in Minnesota and elsewhere are shipped in interstate commerce. It is undisputed, however, that all of the products sold by the plaintiff were manufactured in Minnesota. It is also undisputed that Minnesota statutes prevent the plaintiff from selling to any but Minnesota retailers.

In the complaint, the plaintiff alleges a conspiracy between defendant and Leonhardt J. Hansen and others in violation of Sections 1¹ and 2² of the Sherman Act. The complaint also alleges violation of Sections 2(a)³ and 3⁴ of the Clayton Act. Other portions of the complaint and other facts before the Court by way of affidavit will be set out as they become relevant to the issues raised.

The first set of issues involves the question of the standing of the standing of the plaintiff. This suit has been brought by "George R. Mc Cormack, d/b/a Hamm's Sales Company, a partnership". The defendant asks dismissal of the complaint on the ground that the partnership has terminated and thus McCormack has no standing to sue; on the ground that if the partnership still exists, the other partner, Emerson Mc Neill, should be joined under Rule 19 of the Federal Rules of Civil Procedure; and on the ground that any assignment of claim to Mc Cormack would be void.

By affidavit, Mc Cormack states:

2. Upon termination of the sale of its products by Theo. Hamm Brewing Co. the distributing business of the partnership came to an end, and since that time affiant has been in charge of and has conducted the dissolution of the partnership.

3. Under and pursuant to the terms of a specific agreement between affiant and Emerson Mc Neill, affiant has been given the right to prosecute the above entitled action in the name of and for and on behalf of the partnership of George R. Mc Cormack and Emerson Mc Neil, doing business as Hamm's Sales Company.

The defendant does not argue that Minnesota law prohibits a suit from being brought in the partnership name. Moreover, when a federal question is involved, suit may be brought in the partnership name even where that procedure would be impossible under state law. Rule 17(b), Federal Rules of Civil Procedure. It appears from the affidavit that the partnership continues to exist. The fact that it is in the process of winding up does not affect the right to bring this suit in the partnership name. Minn.St. 323.34 states that a partner can bind the partnership "by an act appropriate for winding up partnership affairs or completing transactions unfinished at dissolution."

Considering the facts as set out in the affidavit, it doesn't appear necessary to require the joinder of all of the partners. Rule 19 which has recently been revised to eliminate the rigidities of "indispensable party" and "joint claim" terminology now reads in part:

(a) Persons to be Joined if Feasible. A person who is subject to service of process and whose joinder will not deprive the court or jurisdiction over the subject matter of the action shall be joined as a party in the action if (1) in his absence complete relief cannot be accorded among those already parties, or (2) he claims an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may (i) as a practical matter impair or impede his ability to protect that interest of (ii) leave any of the persons already parties subject to a substantial risk or incurring double, multiple, or otherwise inconsistent obligations by reason of his claimed interest.

The absent partner is not now complaining of this procedure; nor does it appear that he would be entitled to do so in the light of his specific authorization of the procedure. No unfairness will result to the defendant since the suit is properly brought in the partnership name. This point has been well stated in Leh v. General Petroleum Corp., 165 F.Supp. 933 (S.D.Cal.1958) where the court was faced with the question of whether to allow a suit in the partnership name even though one partner disapproved of the suit. The court there stated:

Furthermore, it is difficult to perceive how defendants can suffer any prejudice by allowing this action to proceed on the partnership claim asserted in the partnership name, even though one of the partners has not authorized the suit. The partnership will be bound by the act of the single partner in bringing suit and any recovery will discharge the partnership's claim against defendants. On the other hand, if defendants prevail with a judgment for costs, that judgment will bind the partnership assets of the individual partner who has caused the action to be brought.

Moreover, a requirement that all of the partners be joined would run counter to Rule 17. As was stated in the Leh case:

Turning next to the motion to dismiss for failure to join Brown, it must be held that he is not an indispensable party to this action. Rule 17(b) allowing a partnership to sue in the common name in actions such as this would be meaningless if it were held essential that all the individual partners be joined as indispensable parties to the partnership action.

For these reasons the suit may be continued in its present form.

Defendant Hamm's has also moved under Rules 12 and 56 on several grounds relating to the interstate commerce requirements found in the several sections under which plaintiff seeks relief. Specifically, the defendant argues that the interstate commerce requirements of Section 2(a) of the Clayton Act as amended by the Robinson-Patman Act; Section 3 of the Clayton Act; and Sections 1 and 2 of the Sherman Act are not satisfied.

In Clausen the summary judgment was granted with respect to all alleged violations of Section 2(a) of the Clayton Act, as amended by the Robinson-Patman Act since the language of that section makes clear that some of the purchases actually involved in the alleged price discriminations must be in interstate commerce.

For this reason, summary judgment is granted upon all claims under this section, insofar as they are based upon alleged discriminations between Mc Cormack and any other Minnesota distributor. It is of no significance that the beer which is transported by railroad passes through Wisconsin on its route from St. Paul, Minnesota, to Duluth, Minnesota.

On the other hand, the interstate commerce aspects of the Robinson-Patman Act may be satisfied where the plaintiff alleges discrimination between himself and the Hamm's distributor in Superior, Wisconsin. While pleadings and affidavits do not make it absolutely clear, it is the fair implication of the affidavits that the beer which is received by the Superior, Wisconsin, distributor is also shipped from St. Paul and is thus in interstate commerce.

Hamm's, however, argues that the distributors in Duluth and Superior are not competitors and thus the prices and terms for these two distributors cannot be compared for the purposes of establishing the violation of the Robinson-Patman Act. There can, of course, be no violation of the Robinson-Patman Act where second line injury is concerned, where the discriminatory sales are not to competitors. See Bales v. Kansas City Star Company, 336 F.2d 439 (8th Cir. 1964).

In support of this argument Hamm's cites portions of the Minnesota Liquor Control Law which it claims prevent sales from distributors to retailers across state lines. On the other hand, in an affidavit submitted by George R. Mc Cormack, it is asserted that the contiguous cities of Duluth, Minnesota, and Superior, Wisconsin, constitute a single market in which consumers move freely, crossing state lines. This raises the question of whether state laws which prohibit distributors from selling to the same set of...