Morton Buildings of Neb., Inc. v. Morton Buildings, Inc., No. CV71-L-245.

CourtUnited States District Courts. 8th Circuit. United States District Court of Nebraska
Writing for the CourtURBOM
Citation333 F. Supp. 187
Docket NumberNo. CV71-L-245.
Decision Date15 October 1971
PartiesMORTON BUILDINGS OF NEBRASKA, INC., a Nebraska Corporation, Plaintiff, v. MORTON BUILDINGS, INC., an Illinois Corporation, et al., Defendants.

333 F. Supp. 187

MORTON BUILDINGS OF NEBRASKA, INC., a Nebraska Corporation, Plaintiff,
v.
MORTON BUILDINGS, INC., an Illinois Corporation, et al., Defendants.

No. CV71-L-245.

United States District Court, D. Nebraska.

October 15, 1971.


333 F. Supp. 188
COPYRIGHT MATERIAL OMITTED
333 F. Supp. 189
John McArthur, A. James McArthur and Wallace Rudolph, Lincoln, Neb., for plaintiff

Fredric H. Kauffman, Lincoln, Neb., for defendants.

MEMORANDUM

URBOM, District Judge.

Presently before the court are these motions: (1) filing No. 6, to dismiss Count II as to the defendant Morton Buildings, Inc., for failure to state a claim upon which relief can be granted; (2) filing No. 7, to dismiss as to the defendant Henry Getz; (3) filing No. 8, to dismiss as to the defendant William Uphoff; (4) filing No. 9, to dismiss as to the defendant Kenneth Weaver; (5) filing No. 10, to dismiss as to the defendant Arnold Reiff; (6) filing No. 12, for a preliminary injunction on behalf of the defendant and counterclaimant Morton Buildings, Inc.; and (7) filing No. 13, for a preliminary injunction on behalf of the plaintiff.

On June 14, 1971, the plaintiff filed a complaint under Sections 1 and 2 of the Sherman Anti-Trust Act, 15 U.S.C. §§ 1 and 2, and Section 4 of the Clayton Act, 15 U.S.C. § 15.

The defendant Morton Buildings, Inc., an Illinois corporation, manufactures and distributes a specialized type of wood-framed and metal-covered building. It distributed such buildings to a state representative, which sold and erected the buildings under the name of Morton buildings.

Prior to 1965 Morton Buildings, Inc., operated from its present location in Morton, Illinois, as the Interlocking Fence Company. On October 28, 1965, the corporate name of Interlocking Fence Company was changed to Morton Buildings, Inc. From 1949 Interlocking Fence Company and its successor, Morton Buildings, Inc., sold Morton buildings

333 F. Supp. 190
in a multi-state area. Beginning in 1968 Morton Buildings, Inc., established an independent dealership in Lincoln, Nebraska, and authorized Earl West to distribute and erect Morton buildings within the State of Nebraska. Mr. West began operation in August, 1968, as a sole proprietorship under the name of Morton Buildings of Nebraska, which was incorporated as Morton Buildings of Nebraska, Inc. in April, 1970. Furthermore, the plaintiff registered as a trade name with the Secretary of State of Nebraska the name, Morton Buildings of Nebraska, Inc

On April 28, 1971, the dealership of the plaintiff was terminated by the defendant Morton Buildings, Inc. Sometime in July, 1971, Earl West became a dealer for Kamar Buildings, a competitor of Morton Buildings, Inc. After becoming a Kamar distributor, West incorporated a separate company under the name of Kamar Buildings of Nebraska, Inc., and is carrying on essentially the same business he did through Morton Buildings of Nebraska, Inc. West stated that it was intended that Kamar Buildings of Nebraska, Inc., operate in the future with the notation in its advertising that it was formerly Morton Buildings of Nebraska, Inc. There is no evidence that the plaintiff has represented itself as a dealer for Morton products since April 28, 1971, or that it will do so in the future. Before this court West testified that all Morton signs had been removed from his truck and building, leaving only a sign at the highway leading to his place of business, from which he intends to remove the Morton logo.

In Count I of the complaint the plaintiff alleges 15 separate acts which it contends establish that the defendant corporation sought to deprive the plaintiff of its business and destroy it as a possible future competitor. The alleged acts include interference with the plaintiff's relationship with the plaintiff's salesmen, hiring by the defendant of the plaintiff's salesmen, inducing the plaintiff's customers to destroy their contracts with the plaintiff and enter into new contracts with the defendant, and encouraging false and groundless claims to be filed with the Nebraska State Labor Commissioner by the plaintiff's former salesman. Count II contains additional practices which the plaintiff claims are predatory and terminates with a prayer for treble damages under the Clayton Act.

Evidence was adduced on August 17, 1971. Briefs by both parties have been furnished to the court.

I. MOTION TO DISMISS COUNT II FOR FAILURE TO STATE A CLAIM UPON WHICH RELIEF CAN BE GRANTED.

It is urged by the defendant Morton Buildings, Inc. that 15 U.S.C. § 15, which authorizes private enforcement of Sections 1 and 2 of the Sherman Anti-Trust Act, is inapplicable because the plaintiff merely alleges an unlawful distributorship termination, citing Ace Beer Distributorship, Inc. v. Kohn, Inc., 318 F.2d 283 (C.A.6th Cir. 1963); Scanlon v. Anheuser-Busch, Inc., 388 F.2d 918 (C.A.9th Cir. 1968); and Mackey v. Sears, Roebuck & Co., 237 F.2d 869 (C.A. 7th Cir. 1956). According to the defendant, Count II of the complaint is insufficient to state a claim under the antitrust laws because it does not allege that the defendant is attempting to monopolize the market of wood-framed, metal-covered buildings. In the alternative, the defendant states that Count II is insufficient to state a claim upon which relief can be granted under any other theory of jurisdiction.

The plaintiff's basis for predicating jurisdiction upon the antitrust law is a combination of economic theory and a line of antitrust case law which ostensibly adopts the economic theory to fashion antitrust relief. Essentially, the plaintiff's argument is that the antitrust law provides a remedy for unfair business practices which eliminate an important level of economic performance or consolidate economic power which was decentralized, thereby reducing competition. The plaintiff relies upon Atlantic Heel

333 F. Supp. 191
Co. v. Allied Heel Co., 284 F.2d 879 (C.A. 1st Cir. 1960); and interprets Metal Lubricants Co. v. Engineered Lubricants Co., 411 F.2d 426 (C.A.8th Cir. 1969) as implicitly embracing the Atlantic Heel decision. Also see Perryton Wholesale, Inc. v. Pioneer Distributing Co. of Kan., 353 F.2d 618 (C.A.10th Cir. 1965); Arthur Murray, Inc. v. Reserve Plan, 406 F.2d 1138 (C.A.8th Cir. 1969); Vogue Instrument Corp. v. Lem Instruments Corp., 40 F.R.D. 497 (U.S.D.C.S.D.N.Y. 1966). As applied to the present case, the plaintiff urges that the plaintiff and the defendant were both in the building industry but each operated at a different level of economic performance, in that the plaintiff purchased component parts which it erected into Morton buildings, whereas the defendant supplied the components and conducted national advertising

Underlying Judge Lay's opinion in Metal Lubricants Co., supra, is the basic acceptance of the Atlantic Heel Co. and Perryton cases as establishing a precedent for violations of Section 1 of the Sherman Act where a conspiracy exists to eliminate a competitor unfairly.

The applicable test to ascertain the legal sufficiency of the complaint is ably expressed by Professor Moore in 2A Moore's Federal Practice, 12.08:

"* * * A complaint should not be dismissed for insufficiency unless it appears to a certainty that plaintiff is entitled to no relief under any state of facts which could be proved in support of the claim." (Emphasis in original text.)

That is, a complaint will not be dismissed if any allegation therein may entitle the plaintiff to relief upon a proper showing of underlying facts. Therefore, an acceptance as true for purposes of this motion the assertions that the defendants committed the several acts alleged in Count II in furtherance of a plan to eliminate the plaintiff as a competitor and to monopolize the sale and erection of Morton buildings in the Nebraska territory requires a denial of the motion to dismiss and an allowance of the plaintiff's placing of his evidence before the trier of fact.

II. MOTIONS OF INDIVIDUAL DEFENDANTS TO DISMISS.

Each of the motions to dismiss filed on behalf of the individual defendants, Henry Getz, William Uphoff, and Kenneth Weaver, is grounded upon these issues: (1) whether such defendant was subject to extraterritorial service of process under the Nebraska long-arm statute, § 25-536, R.R.S.Neb.1943 (1969 Supp.); (2) whether venue properly is here; (3) whether service of process was proper; (4) whether a claim upon which relief may be granted has been stated.

At the August 16, 1971, hearing on these motions primary emphasis was placed on the assertions of lack of in personam jurisdiction and improper venue. As the complaint does not purport to state a claim against any individual defendant under Count I, the motions properly can be considered only as to Count II.

A. Service under Long-Arm Statute.

That the individual defendants are nonresidents of Nebraska has been stipulated to as factual. The harm arising from unfair competition is tortious in nature. Frank H. Gibson, Inc. v. Omaha Coffee Co., 179 Neb. 169, 137 N.W.2d 701 (1965); Simpson v. Union Oil Co. of California, 311 F.2d 764, 768 (C.A. 9th Cir. 1963), reversed on other grounds, 377 U.S. 13, 84 S.Ct. 1051, 12 L.Ed.2d 98 (1964); Norman Tobacco Candy Co. v. Gillette Safety Razor Co., 197 F.Supp. 333 (U.S.D.C.Ala.1960), aff'd 295 F.2d 362 (C.A.5th Cir. 1961).

A basis for securing in personam jurisdiction through extraterritorial service of process is provided by § 25-536 (1) (c) R.R.S.Neb.1943 (1969 Supp.). It states that such service may be had on a nonresident if he caused "tortious injury by an act or omission in this state." Recently, in Joedeman v. Gamble-Skogmo, Inc., Civ. 1747 L (unreported memorandum U.S.D.C.Neb. August 4, 1971), I interpreted from Stucky v. Stucky, 186 Neb. 636, 185 N.W.2d 656 (1971) that

333 F. Supp. 192
the Nebraska long-arm statute is measured for breadth by constitutional standards of due process only. The Supreme Court of Nebraska more recently in Von Seggern v....

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  • Board of County Com'rs of Custer County v. Wilshire Oil Co. of Texas, No. 74-1553
    • United States
    • United States Courts of Appeals. United States Court of Appeals (10th Circuit)
    • July 25, 1975
    ...Inc. v. Toyota Motor Sales, U.S.A., Inc., 338 F.Supp. 812 (E.D.Pa.1972); Morton Buildings of Nebraska, Inc. v. Morton Buildings, Inc., 333 F.Supp. 187 (D.Neb.1971); California Clippers, Inc. v. United States Soccer Football Ass'n, 314 F.Supp. 1057 (N.D.Cal.1970); Albert Levine Assoc. v. Ber......
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    • United States
    • U.S. District Court — Northern District of Illinois
    • June 6, 1975
    ...v. Atlantic Coast Football League, 359 F.Supp. 666, 669 (S.D.Ind.1973); Morton Buildings of Nebraska, Inc. v. Morton Buildings, Inc., 333 F.Supp. 187, 193 (D.Neb.1971); California Clippers, Inc. v. United States Soccer Football Association, 314 F.Supp. 1057, 1062 (N.D.Cal.1970); Albert Levi......
  • General Elec. Co. v. Bucyrus-Erie Co., No. 81 Civ. 6360(CES).
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    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • October 22, 1982
    ...v. Atlantic Coast Football League, 359 F.Supp. 666, 669 (S.D.Ind.1973); Morton Buildings of Nebraska, Inc. v. Morton Buildings, Inc., 333 F.Supp. 187, 193 (D.Neb.1971); California Clippers, Inc. v. United States Soccer Football Association, 314 F.Supp. 1057, 1062 (N.D.Cal. 1970); Philadelph......
  • Lipari v. Sears, Roebuck & Co., Civ. No. 77-0-458.
    • United States
    • United States District Courts. 8th Circuit. United States District Court of Nebraska
    • July 17, 1980
    ...no relief under any state of facts which could be proved in support of the claim." Morton Bldgs. of Neb., Inc. v. Morton Bldgs., Inc., 333 F.Supp. 187, 191 (D.Neb. 1971). The standard is a rigorous one. . . As a practical matter, a dismissal for failure to state a claim upon which relief ca......
  • Request a trial to view additional results
14 cases
  • Board of County Com'rs of Custer County v. Wilshire Oil Co. of Texas, No. 74-1553
    • United States
    • United States Courts of Appeals. United States Court of Appeals (10th Circuit)
    • July 25, 1975
    ...Inc. v. Toyota Motor Sales, U.S.A., Inc., 338 F.Supp. 812 (E.D.Pa.1972); Morton Buildings of Nebraska, Inc. v. Morton Buildings, Inc., 333 F.Supp. 187 (D.Neb.1971); California Clippers, Inc. v. United States Soccer Football Ass'n, 314 F.Supp. 1057 (N.D.Cal.1970); Albert Levine Assoc. v. Ber......
  • UNITED STATES DENT. INST. v. American Ass'n of Orth., No. 74 C 2924.
    • United States
    • U.S. District Court — Northern District of Illinois
    • June 6, 1975
    ...v. Atlantic Coast Football League, 359 F.Supp. 666, 669 (S.D.Ind.1973); Morton Buildings of Nebraska, Inc. v. Morton Buildings, Inc., 333 F.Supp. 187, 193 (D.Neb.1971); California Clippers, Inc. v. United States Soccer Football Association, 314 F.Supp. 1057, 1062 (N.D.Cal.1970); Albert Levi......
  • General Elec. Co. v. Bucyrus-Erie Co., No. 81 Civ. 6360(CES).
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • October 22, 1982
    ...v. Atlantic Coast Football League, 359 F.Supp. 666, 669 (S.D.Ind.1973); Morton Buildings of Nebraska, Inc. v. Morton Buildings, Inc., 333 F.Supp. 187, 193 (D.Neb.1971); California Clippers, Inc. v. United States Soccer Football Association, 314 F.Supp. 1057, 1062 (N.D.Cal. 1970); Philadelph......
  • Lipari v. Sears, Roebuck & Co., Civ. No. 77-0-458.
    • United States
    • United States District Courts. 8th Circuit. United States District Court of Nebraska
    • July 17, 1980
    ...no relief under any state of facts which could be proved in support of the claim." Morton Bldgs. of Neb., Inc. v. Morton Bldgs., Inc., 333 F.Supp. 187, 191 (D.Neb. 1971). The standard is a rigorous one. . . As a practical matter, a dismissal for failure to state a claim upon which relief ca......
  • Request a trial to view additional results

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