Metts v. Clark Oil & Refining Corp.

• Decision Date: 16 June 1981
• Docket Number: No. 41610,41610
• Court: Missouri Court of Appeals
• Parties: 1981-1 Trade Cases P 64,148 Earl METTS, Jr., et al., Plaintiffs-Appellants, v. CLARK OIL & REFINING CORPORATION, Defendant-Respondent.

Page 698

618 S.W.2d 698

1981-1 Trade Cases P 64,148

Earl METTS, Jr., et al., Plaintiffs-Appellants, v. CLARK OIL & REFINING CORPORATION, Defendant-Respondent.

No. 41610.

Missouri Court of Appeals, Eastern District, Division Two.

June 16, 1981.

James R. Wyrsch, Kansas City, for plaintiffs-appellants.

Frank Hamsher, St. Louis, for defendant-respondent.

WEIER, Judge.

Plaintiffs appeal from a judgment of the trial court in favor of defendant Clark Oil & Refining Corporation. Plaintiffs were sixteen dealers and former dealers who leased gasoline service stations from Clark. They alleged in six counts of their first amended petition violation of the Missouri Antitrust Law, §§ 416.011 through 416.161, RSMo 1978, as well as common law counts of misrepresentation, economic coercion, breach of contract, interference with business and violation of fiduciary duty. Plaintiffs sought with other relief, treble damages, punitive damages and an injunction preventing Clark from competing with its own dealers and attorney's fees.

Count I of plaintiffs' first amended petition alleges that Clark, other persons and plaintiffs themselves, beginning at a date unknown to plaintiffs and continuing at least up to the date of the filing of the first amended petition, January 4, 1977, engaged in unlawful contracts, combinations and conspiracies in unreasonable restraint of trade in violation of § 416.031(1), RSMo 1978. Count I also alleges that these same parties engaged in acts to monopolize, to attempt to monopolize and to conspire to monopolize trade or commerce in the State of Missouri and in St. Louis County, Missouri, in violation of § 416.031(2), RSMo 1978. Specifically, plaintiffs allege that Clark was attempting to drive them out of business by competing with them in order to convert the plaintiff dealers' stations into company-operated stations. The dealers set forth that company stations competed with them by charging too low a retail price for gas and that the tank-wagon (wholesale) price set by the company for dealer stations was too high for them to compete effectively. The five other counts of plaintiffs' first amended petition restate the antitrust violations as well as setting forth their common law claims.

Clark is an independent gasoline refiner and marketer with more than eighteen hundred stations in thirteen states. Clark operates a dual distribution system by selling gasoline at retail through company-owned stations and as a distributor to dealers who sell at retail to consumers. At time of trial there were sixty-four Clark stations in St. Louis City and County. Forty-two of these stations were company operated while twenty-two were independently operated by dealers.

Clark dealer and company-operated stations are similar in appearance. Stations operated by Clark utilize employees paid by Clark, offer products in addition to gasoline determined by Clark, sell gasoline and other items at prices determined by Clark and are in all other respects controlled by Clark. Stations run under lease by dealers such as plaintiffs are independent businesses. Each dealer-lessee sells Clark brand gasoline and other products. Dealers hire and pay their own employees. Products other than gasoline are selected by the dealer and all prices are independently determined by the dealer.

The case was tried to the court. Testimony in plaintiffs' case was taken from Eugene Bowling, a plaintiff, and Clark's St. Louis District Manager Richard Heinicke. Objections to plaintiff Bowling's damage testimony and exhibits were sustained. Because of the large number of plaintiffs in this action, all parties agreed that direct and cross-examination of each of the plaintiff dealers would be submitted in written exhibit form subject to evidentiary objections. At the conclusion of evidence on behalf of the plaintiffs, the trial court sustained defendant's motion for judgment in favor of defendant on all six counts of plaintiffs' first amended petition.

Plaintiffs assign fifteen points of trial court error. Our scope of review in a court-tried case has been defined as follows: "(J)udgment of the trial court will be sustained by the appellate court unless there is no substantial evidence to support it, unless it is against the weight of the evidence, unless it erroneously declares the law, or unless it erroneously applies the law. Murphy v. Carron, 536 S.W.2d 30, 32 (1) (Mo. banc 1976).

Plaintiffs' first point on appeal contends there was substantial evidence to show that defendant combined, conspired and contracted in restraint of trade or commerce in violation of § 416.031(1), RSMo 1978. This section is analogous to and derived from § 1 of the Sherman Act, 15 U.S.C.A. § 1. Section 416.141 of Missouri's Antitrust Statutes requires that §§ 416.011 to 416.161 be construed in harmony with ruling judicial interpretations of comparable federal antitrust statutes. This provision of the Missouri Antitrust Act was intended to provide a ready body of precedent for interpreting state antitrust statutes and a single standard of business conduct already known and acquiesced in by businesses in the state. Fischer, Spuhl, Herzwurm and Associates, Inc. v. Forrest T. Jones & Company, 586 S.W.2d 310, 313 (2) (Mo. banc 1979).

Section 416.031(1) requires the existence of a contract, combination or conspiracy. Consequently, before reaching the issue of whether Clark engaged in an unreasonable restraint of trade plaintiffs face the threshold requirement of identifying a co-conspirator who agreed with Clark to inflict injury on plaintiffs. H & B Equipment Company v. International Harvester Company, 577 F.2d 239, 243 (3) (5th Cir. 1978). Unilateral conduct does not provide a basis of liability; concerted action must be alleged and proven. Petroleum for Contractors, Inc. v. Mobil Oil Corp., 1978-2 Trade Cases 75,077,080 (P 62,151) (S.D.N.Y.1978).

In plaintiffs' first amended petition the following parties were alleged to be co-conspirators: all independent Clark dealers; Vickers Oil Company and Shell Oil Company, who allegedly supplied gasoline to Clark; Dolgin's Candy and Tobacco Co., Inc., who sold cigarettes to Clark; J. D. Street, who packaged and supplied motor oil and related products for Clark and its dealers; Owens Oil Company a Clark retail operation under a different name; Local 618 of the Teamsters Union whose membership included Clark station employees and Commercial Cartage Company, who delivered gasoline to Clark stations. Although not pleaded, plaintiffs argue in their brief that Clark employees and customers were also co-conspirators.

A review of the voluminous record and plaintiffs' cumbersome brief does not support the contention that Clark conspired with any of the preceding parties. Plaintiffs contend that the necessary combination or conspiracy may be found in the first instance between defendant, plaintiffs and other dealers who went out of business. Plaintiffs contend that the dealers were involved in the conspiracy as unwilling parties. In support of this position plaintiffs cite three cases decided by the United States Supreme Court: Albrecht v. Herald Co., 390 U.S. 145, 88 S.Ct. 869, 19 L.Ed.2d 998 (1968); Simpson v. Union Oil Co. of California, 377 U.S. 13, 84 S.Ct. 1051, 12 L.Ed.2d 98 (1964); and Perma Life Mufflers, Inc. v. International Parts Corp., 392 U.S. 134, 88 S.Ct. 1981, 20 L.Ed.2d 982 (1968). In Albrecht and Simpson, the Supreme Court held that the combination requirement of § 1 of the Sherman Act was satisfied by plaintiff's unwilling compliance with defendant's resale price suggestions forced on them by defendant's coercive action. In Perma Life Mufflers, the court held that unwilling compliance by plaintiffs with a restrictive sales agreement entered into with defendant, which barred plaintiffs from purchasing from other competing suppliers, prevented them from selling outside a designated territory, tied the sale of mufflers to the sale of other products of defendant, and required them to sell at a fixed retail price, constituted a combination within the meaning of § 1.

This theory, however, is not applicable to the present case. In Albrecht, Simpson and Perma Life Mufflers, the plaintiffs were unwilling participants in the alleged illegal activity; the plaintiffs acted jointly with the defendants and thus were an integral part of the illegal scheme. Quigley v. Exxon Company U.S.A., 376 F.Supp. 342, 349 (2-5) (M.D.Pa.1974). In the present case the evidence clearly established that Clark dealers were allowed to set their own retail price for gasoline. There was no consistency in retail prices among dealers. Clark dealers were also permitted to purchase cigarettes, motor oil and other miscellaneous items from parties other than Clark. Clark dealers were also allowed to purchase gasoline from other oil companies if they expended a certain amount of capital and no longer exhibited the Clark trademark. Clark charged its dealers set tank-wagon prices but there was no evidence to show it improperly set its prices. The mere buying of gasoline at a wholesale price from Clark does not make the dealers participants in the setting of that price.

Neither does the record support plaintiffs' contention that Clark conspired with companies who supplied or delivered products to Clark. Plaintiff Bowling admitted that he was unaware of any facts linking any other person or firm to anything he accused Clark of doing. As far as a conspiracy between Clark and its employees is concerned, the general rule holds that a corporation cannot conspire with its own employees. If an agreement between a corporation and an employee could be a conspiracy under the Sherman Act or § 416.031(1), the plurality requirement would lose all meaning. H & B Equipment Company, supra at 244 (6). An exception to this general rule exists when an employee has an independent personal stake in achieving the object of the conspiracy. Coleman Motor Co. v. Chrysler...