Robinson v. Stanley Home Products, Inc.

• Decision Date: 10 December 1959
• Docket Number: No. 5573.,5573.
• Parties: Albert E. ROBINSON, Plaintiff, Appellant v. STANLEY HOME PRODUCTS, INC., Defendant, Appellee.
• Court: U.S. Court of Appeals — First Circuit

272 F.2d 601 (1959)

Albert E. ROBINSON, Plaintiff, Appellant v. STANLEY HOME PRODUCTS, INC., Defendant, Appellee.

No. 5573.

United States Court of Appeals First Circuit.

December 10, 1959.

Earl F. Nauss, Jr., and Vincent Galvin, Boston, Mass., for appellant.

George H. Foley, Boston, Mass., with whom Blair L. Perry and Hale & Dorr, Boston, Mass., were on brief, for appellee.

Before WOODBURY, Chief Judge, and HARTIGAN and ALDRICH, Circuit Judges.

ALDRICH, Circuit Judge.

This action was brought by plaintiff-appellant, a citizen of Massachusetts, in the district court for the District of Massachusetts under section 4 of the Clayton Act, 15 U.S.C.A. § 15, to recover treble damages for injuries alleged to have been suffered because of a violation of section 2(c) of the Clayton Act, as amended by the Robinson-Patman Act, 15 U.S.C.A. § 13(c). The defendants were one Gahm, of New Jersey, doing business as Plura Plastics, hereinafter called Plura, as to whom a dismissal was entered for lack of service, and appellee, Stanley Home Products, Inc., a Massachusetts corporation, hereinafter called Stanley. Plaintiff appeals from the allowance of Stanley's motion to dismiss the amended complaint for failure to state a claim upon which relief could be granted.¹

The amended complaint is somewhat inartistic and loosely drawn, and the first question is one of construction. We have attempted to separate the primary facts from various conclusions of the pleader, in order to apply the familiar rule that only material facts well pleaded are to be considered on a motion to dismiss. Dunn v. Gazzola, 1 Cir., 1954, 216 F.2d 709. The first four paragraphs set forth the basic facts already stated. Paragraph 5 alleges that the plaintiff is a manufacturer's representative in Massachusetts and elsewhere in New England; that he had been employed by Plura as exclusive New England representative to promote the sale of Plura's products (which were to be shipped from New Jersey in interstate commerce), and that plaintiff was to receive a commission on all New England sales "whether or not actually consummated by him." Nothing was mentioned as to the term of this agreement, from which we must assume that it was terminable at will by either party. At the argument plaintiff conceded this assumption to be correct.

Abbreviating its rather lengthy allegations, paragraph 6 asserts that plaintiff procured two orders from Stanley for folding cups made by Plura; that thereafter Stanley made an offer directly to Plura to purchase cups in large quantities at what it knew to be "an unreasonably low price" that "could be accomplished only by the elimination of the Plaintiff's commission * * * but Stanley wished to procure the elimination of the Plaintiff's services and commission so that it might purchase said cups at the substantially reduced price and thereby obtain the Plaintiff's commission for itself in the form of an unlawful discount, all in violation of 15 U.S.C. Section 13(c)." Plaintiff further alleged that "Plura forthwith terminated the Plaintiff's services as New England representative² and immediately accepted Stanley's offer." There is, incidentally, no allegation of any correlation in amount between the reduction in price and plaintiff's former commission.

Paragraph 7 is not too happily expressed, but we shall construe it, in plaintiff's favor, to mean that following plaintiff's discharge Plura reduced its prices to Stanley only, and not to other customers. However, since there is no indication that Plura employed other brokers, we take plaintiff's stated claim to be that all customers thereafter, and not merely Stanley, purchased direct. Paragraphs 8 and 9 add nothing of substance, other than general allegations of damage. Paragraph 10 is against the now-dismissed defendant, Plura. The remaining paragraphs allege common-law claims against Stanley with which we shall deal later.

While a party need not plead his evidence, the complaint must contain a sufficient statement of facts which show there is a basis to the claim. Plaintiff here claims under subsection (c) of section 2 of the Robinson-Patman Act, and no other. The specific question under that subsection is whether Stanley accepted from Plura "a commission, brokerage, or other compensation, or any allowance or discount in lieu thereof * *."³ On the facts alleged, after plaintiff's discharge Plura paid no commission, as such, to anyone. The next question, therefore, is whether plaintiff sufficiently shows an "allowance or discount in lieu thereof" within the meaning of the act. There is little discussion of these words in the cases. In Quality Bakers of America v. Federal Trade Commission, 1 Cir., 1940, 114 F.2d 393, at page 400, we used the phrase "commissions or their equivalent." While a reduction in price to the buyer could fall within this definition, obviously not every one would do so. The question must be, what was the purpose of, or the reason for, the reduction? Plaintiff pleads only his unsupported conclusion that it was a discount in lieu of brokerage. He does not allege that the parties so described it; or that it was designed to reimburse Stanley for some brokerage or servicing obligation ostensibly incurred, or even that it was the mathematical equivalent of what Plura formerly paid to the plaintiff. All that appears is that Plura would not have been able to make this reduction if it still paid brokerage. To say that a manufacturer who makes a price reduction when he converts to direct selling has, without more, made an allowance in lieu of brokerage would either be to say that he cannot so convert, or that, if he does, the act forbids his passing on any saving to the customer. We do not so construe it.

It is true that we have interpreted the...