McNulty v. Borden, Inc., Civ. A. No. 76-3952.

• Decision Date: 07 August 1979
• Docket Number: Civ. A. No. 76-3952.
• Citation: 474 F. Supp. 1111
• Parties: John J. McNULTY v. BORDEN, INC.
• Court: U.S. District Court — Eastern District of Pennsylvania

474 F. Supp. 1111

John J. McNULTY v. BORDEN, INC.

Civ. A. No. 76-3952.

United States District Court, E. D. Pennsylvania.

July 3, 1979.

On Motion for Reconsideration August 7, 1979.

COPYRIGHT MATERIAL OMITTED

Peter A. McGonigle, Clary, Mimnaugh & McGonigle, P.C., Philadelphia, Pa., for plaintiff.

Benjamin M. Quigg, Jr., James J. Rodgers, Morgan, Lewis & Bockius, Philadelphia, Pa., for defendant.

MEMORANDUM

RAYMOND J. BRODERICK, District Judge.

Plaintiff has alleged antitrust violations and breach of contract and defamation claims in connection with the termination of his employment by the defendant. Before the Court is defendant's motion to dismiss plaintiff's second amended complaint pursuant to Fed.R.Civ.P. 12(b)(6). For the reasons hereinafter set forth, defendant's motion will be denied with respect to each of plaintiff's claims.

For the purpose of a motion to dismiss, the material allegations of the complaint must be accepted as true and considered in a light most favorable to the plaintiff; a complaint should not be dismissed unless it appears to a certainty that the plaintiff is entitled to no relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); 2A Moore, Federal Practice ¶ 12.08, at 2271-74.

Plaintiff's allegations in his second amended complaint may be summarized as follows: Plaintiff was employed by Borden Foods, a division of Borden, Inc., from November 1961 until his discharge, as a retail salesman for one year and then as a Unit Manager of a territory encompassing parts of Delaware, Pennsylvania and New Jersey. As Unit Manager, plaintiff supervised several retail salesmen and was responsible for all sales in his territory of grocery and perishable items, including cheese. In addition to receiving a salary, plaintiff also received additional compensation in the form of bonuses by meeting quotas and winning sales contests. In the course of administering and handling certain accounts, plaintiff became aware that Eugene Matthews, District Manager for Borden Foods, personally, or through other Unit Managers, offered special pricing arrangements, which included the granting of free goods and certain price reductions to certain accounts, such as Food Fair, but not to others, such as Acme Markets. Plaintiff refused to take part in the granting of these special pricing arrangements and, as a result, came into severe conflict with Mr. Matthews, who compiled a file designed to justify the dismissal of the plaintiff. Part of this file included the accusation of Mr. Matthews that plaintiff's negligence was responsible for the spoilage of $80,000 worth of cheese ordered by Acme Markets and that the plaintiff filed false reports in connection with this incident. In addition, the plaintiff claims that Mr. Matthews knowingly and maliciously spread false stories concerning the plaintiff's job performance in an effort to have the plaintiff dismissed and to prevent discovery of the special pricing arrangements. At a September 20, 1976 meeting in a hotel with Matthews and Walter Dyer, the Regional Manager, Eastern Region for Borden Foods, plaintiff was dismissed without first being placed on probation for 30 days and notified that his job performance was not satisfactory. At this meeting, plaintiff refused to accept 8 weeks severance pay in return for his release of all claims against the defendant and his agreement not to disclose any information concerning the special pricing arrangements.

In addition, the complaint alleges that the defendant's report in connection with plaintiff's termination states that plaintiff was negligent in performing his duties, and that plaintiff claimed he checked the warehouse which contained the cheese when he had not actually been there for three months. This version of the plaintiff's termination was communicated by the defendant's representatives to the Pennsylvania Unemployment Compensation Board as well as to several employees at Food Fair and Acme Markets. In addition, it is claimed that the defendant furnished a report to prospective employers of the plaintiff stating that plaintiff was dismissed because his job performance did not meet the defendant's standards.

Plaintiff further claims that he received many offers of employment while he was employed by the defendant, but rejected them in reliance on assurances that he would continue to be employed by the defendant and would probably advance to the position of District Manager or even higher.

In Count I of his complaint, plaintiff alleges that the special pricing arrangements adversely affected competition in the market for certain goods in violation of the antitrust laws and that his discharge and the accompanying untrue statements constitute acts performed in furtherance of the antitrust violations. In particular, plaintiff alleges that his discharge and the statements were designed to prevent discovery and prosecution of the illegal pricing scheme and to destroy plaintiff's credibility concerning such matters.

Count II of the complaint alleges that plaintiff's termination constituted wrongful breach of a contractual relationship.

Count III alleges that the defendant intentionally and maliciously libeled and slandered plaintiff by disseminating untrue accusations concerning him.

Plaintiff bases Count I of his complaint on section 4 of the Clayton Act, 15 U.S.C. § 15, and alleges that he was injured by reason of the defendant's violation of section 2 of the Clayton Act as amended by the Robinson-Patman Act, 15 U.S.C. § 13 (the Robinson-Patman Act). Section 4 of the Clayton Act provides:

Any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor . . . and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney's fee.

Section 2 of the Robinson-Patman Act, which is the statute that plaintiff claims forbids the conduct of the defendant, provides in pertinent part:

(a) It shall be unlawful for any person engaged in commerce, in the course of such commerce, either directly or indirectly, to discriminate in price between different purchasers of commodities of like grade and quality . . . and where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination, or with customers of either of them.

Plaintiff claims that the special pricing arrangements offered by Mr. Matthews to certain accounts discriminated between different purchasers and lessened competition, thereby violating section 2. Plaintiff further contends that he was injured in his business or property by reason of the special pricing arrangements and that therefore he is entitled to recover treble damages pursuant to section 4 of the Clayton Act.

In its motion to dismiss, the defendant contends that plaintiff lacks standing to raise the antitrust claims inasmuch as plaintiff has not been injured "in his business or property" nor did the alleged injury occur "by reason of" the alleged antitrust violations. We disagree with the contentions of the defendant for the reasons hereinafter set forth. Defendant's motion to dismiss Count I of the complaint will therefore be denied.

To withstand a Rule 12(b)(6) motion to dismiss, a plaintiff who brings an action pursuant to section 4 of the Clayton Act must allege an injury to business or property by reason of an antitrust violation. The plaintiff's complaint, read in a light most favorable to him, alleges that the defendant violated the antitrust laws, in that the defendant engaged in offering special pricing arrangements which were discriminatory and lessened competition, and that plaintiff was discharged from his position of supervising retail salesmen to prevent discovery and prosecution of the antitrust violations and because plaintiff refused to participate in and objected to such antitrust violations, all of which resulted in the loss of bonus compensation as a result of diminished sales and in the loss of his job.

In analyzing whether plaintiff has standing to bring his antitrust action pursuant to section 4 of the Clayton Act, we are guided by recent decisions of our Third Circuit in cases such as Bravman v. Bassett Furniture Industries, Inc., 552 F.2d 90 (3d Cir. 1977); Cromar Co. v. Nuclear Materials & Equipment Corp., 543 F.2d 501 (3d Cir. 1976), and Int'l Ass'n, etc. v. United Contractors Ass'n, Inc., 483 F.2d 384 (3d Cir. 1973), amended, 494 F.2d 1353 (1974). See also Bogus v. American Speech & Hearing Ass'n, 582 F.2d 277 (3d Cir. 1978). In Bravman, Judge Gibbons reviewed the prior decisions in this circuit concerning section 4 standing; he specifically rejected a per se rule that would deny standing to an employee or that would limit standing to competitors, and adopted the following balancing test enunciated by Judge Garth in Cromar, supra, 543 F.2d at 506:

Each case, therefore, must be carefully analyzed in terms of the particular factual matrix presented. In making this factual determination courts must look to, among other factors, the nature of the industry in which the alleged antitrust violation exists, the relationship of the plaintiff to the alleged violator, and the alleged effect of the antitrust violation upon the plaintiff. Then, while recognizing that breaches of the antitrust laws have effects throughout society, a court must decide whether this plaintiff is one "whose protection is the fundamental purpose of the antitrust laws." In re Multidistrict Vehicle Air Pollution, 481 F.2d 122 at 125 (9th Cir.), cert. denied, 414 U.S. 1045, 94 S.Ct. 551, 38 L.Ed.2d 336 (1973).

In adopting this test, Judge Gibbons in Bravman stated that "§ 4 standing analysis is essentially a balancing test comprised of many constant and variable factors...