Pioneer Co., Inc. v. Talon, Inc.

• Decision Date: 29 June 1972
• Docket Number: No. 71-1620.,71-1620.
• Citation: 462 F.2d 1106
• Parties: PIONEER CO., INC., Appellant, v. TALON, INC. and Donahue Sales Corporation, Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

462 F.2d 1106 (1972)

PIONEER CO., INC., Appellant, v. TALON, INC. and Donahue Sales Corporation, Appellees.

No. 71-1620.

United States Court of Appeals, Eighth Circuit.

Submitted April 13, 1972.

Decided June 29, 1972.

Rehearing and Rehearing Denied August 15, 1972.

Sydney C. Berde, Berde, Leonard & Weinblatt, St. Paul, Minn., for appellant.

Harold F. Baker, J. Coleman Bean, Howrey, Simon, Baker & Murchison, Washington, D. C., for appellees; Robert M. Bowen, Levitt, Palmer, Bowen, Bearmon & Rotman, Minneapolis, Minn., of counsel.

Before Mr. Justice CLARK,^* and MATTHES and LAY, Circuit Judges.

Rehearing and Rehearing En Banc Denied August 15, 1972.

CLARK, Associate Justice.

This case comes here from the dismissal of the amended complaint of the appellant, Pioneer Co., Inc., which was filed against Talon, Inc. and Donahue Sales Corporation, appellees, alleging a violation of Section 1 of the Sherman Act, 15 U.S.C. § 1, upon the ground that the action was barred by the four-year statute of limitation, 15 U.S.C. § 15b. The statute says that the action is barred "unless commenced within four years after the cause of action accrued." The trial court, after an evidentiary hearing on the issue, held that the cause of action accrued on July 24, 1964, and the suit having been filed on August 28, 1968, found it barred. We find that the statute began to run on September 4, 1964, the date that two orders Pioneer had placed with Talon were refused and from which it suffered injury.

1. The facts adduced at the hearing on the motion to dismiss reveal a flagrant violation of the antitrust laws by Talon and Donahue.¹ Their brief in this court recites that Pioneer began jobbing Talon zippers as a wholesaler in 1959 and during the next five years made some $7000 of sales of Talon zippers.

James Ciliberti, a Donahue salesman in Minneapolis, received a telephone call on July 14, 1964, from Walter Salmon, Donahue's marketing director in New York, requesting him to investigate an advertisement in the Minneapolis paper on July 1, 1964, by Shoppers City Stores offering Talon zippers at discount prices.² After verifying that Pioneer sold Talon zippers to Shoppers City Stores at a discount, Mr. Ciliberti requested Mr. Rose, President of Pioneer to repurchase the zippers from Shoppers City Stores. When Rose was not able to do so, Mr. Ciliberti purchased all of the Talon zippers on the display counters at Shoppers City Stores. Mr. Ciliberti again talked to Mr. Salmon who told Mr. Ciliberti that Donahue was terminating all shipment of Talon zippers to Pioneer. On July 24th Mr. Ciliberti completed purchasing the remaining Talon zippers in other Shoppers City Stores and advised Mr. Rose that Donahue would no longer sell Talon zippers to Pioneer, that Pioneer was to return all Talon inventory and that all business relations were terminated.

Rose testified that he was a discount wholesaler and had Talon stock in his warehouse for sale to retailers; that he had received no formal commitment from anyone that orders would not be accepted; and that he continued to send in orders to Donahue for Talon zippers. The "first notification" that he received was on September 4th. It was sent to his order clerk and was signed by Mr. Salmon. It advised that the two orders he had "recently placed" would not be filled because "a decision had been made to discontinue sales to jobbers whose requirements have been modest, due to inconvenience and additional cost of dealing with such jobbers." There was no mention of any previous termination of business relations, return of inventory, etc.

2. It appears to us that Pioneer was acting as a wholesale jobber to retailers engaged in the sale of sundries to drug, variety, food, department and discount stores in Minnesota, Wisconsin, Iowa, North and South Dakota. Pioneer was not a formal full-time dealer or distributor but merely placed orders with manufacturers and distributors on individual order forms as a wholesaler and without any formal contract with either Talon or Donahue. It had been placing written orders with Donahue for Talon zippers on a very moderate basis of about $1500 a year. He had previously discounted Talon zippers below the manufacturers' suggested price. The two orders that he placed and which were refused on September 4, 1964, were a separate cause of action and in the light of the continuing conspiracy³ were not barred by the statute since the suit was filed in August, 1968. As the Supreme Court said in Zenith Radio Corp. v. Hazeltine Research Inc., 401 U.S. 321, 91 S.Ct. 795, 28 L.Ed. 2d 77 (1971), "a cause of action accrues and the statute begins to run when a defendant commits an act that injures a plaintiff's business . . . In the context of a continuing conspiracy . . . this has usually been understood to mean that each time a plaintiff is injured by an act of the defendants a cause of action accrues to him to recover the damages caused by that act and that, as to those damages, the statute of limitations runs from the commission of the act." At 338, 91 S.Ct. at 806.

And as the court has likewise said in Highland Supply Corp. v. Reynolds Metal Co., 327 F.2d 725, 732 (8 Cir. 1964): "It is well settled that where a private cause of action under the antitrust laws is based on a continued invasion of one's rights, his cause of action accrues from day to day as his rights are invaded to his damage." The Ninth Circuit has held likewise. See Hoopes v. Union Oil Co., 374 F.2d 480, 486 (9 Cir. 1967). See also Steiner v. Twentieth Century Fox Film Corp., 232 F.2d 190, 194 (9 Cir. 1956). Also see Muskin Shoe Co. v. United Shoe Machinery Corp., 167 F. Supp. 106 (D.C.Md.1958). See also Laitram Corporation v. Deepsouth Packing Company, 279 F.Supp. 883, 889-890 (E.D.La.1968).

Talon and Donahue depend upon Emich Motor Corp. v. General Motors Corporation, 229 F.2d 714 (7 Cir. 1956) and similar cases. These cases are wholly consistent with our result. Emich was a formal dealer and contractual agent for General Motors. It cancelled the Emich dealership and limitation began to run on that act as of the date of cancellation. Emich sued to recover damages occurring subsequent thereto as well as flowing therefrom. Pioneer, on the contrary, suffered a continuing conspiracy to prevent it from wholesaling Talon zippers at discount prices; it subsequently placed orders which were refused because of the continuing conspiracy. It had no contract, as did Emich, and there was nothing to cancel— only orders to refuse which Talon and Donahue did refuse on September 4th. It...