Rubbermaid, Inc. v. Claber Distributing Co. of Cleveland, Ohio, 784774

• Decision Date: 05 March 1965
• Docket Number: No. 784774,784774
• Citation: 205 N.E.2d 410,3 Ohio Misc. 39
• Parties: , 32 O.O.2d 289 RUBBERMAID, INC., Plaintiff, v. CLABER DISTRIBUTING CO. OF CLEVELAND, OHIO, Inc., Defendant.
• Court: Ohio Court of Common Pleas

Page 39

3 Ohio Misc. 39

205 N.E.2d 410, 32 O.O.2d 289

RUBBERMAID, INC., Plaintiff, v. CLABER DISTRIBUTING CO. OF CLEVELAND, OHIO, Inc., Defendant.

No. 784774.

Court of Common Pleas of Ohio, Cuyahoga County.

March 5, 1965.

Thompson, Hine & Flory, Cleveland, Critchfield, Critchfield, Critchfield & Johnston, Wooster, William D. Ginn and John F. McClatchey, Cleveland, and Lincoln Oviatt, Wooster, of counsel, for plaintiff.

Metzenbaum, Gaines, Schwartz, Krupansky, Finley & Stern, Cleveland, Flmer I. Schwartz and Donald M. Robiner, Cleveland, of counsel, for defendant.

THOMAS, Judge.

Plaintiff, Rubbermaid, Incorporated of Wooster, Ohio, seeks a permanent injunction and damages against Claber Distributing Co. of Cleveland, Ohio, Inc., which owns and operates seven Uncle Bill's stores, all located in Cuyahoga County. Hereafter the plaintiff is called Rubbermaid, and the defendant is called Uncle Bill's.

Trade-marked 'RUBBERMAID,' rubber, wire, and plastic houseware products are manufactured by the plaintiff. Extensively advertised under the trade name 'RUBBERMAID' these housewares are sold and distributed in Ohio and throughout the United States. Rubbermaid's houseware products, with a few exceptions, bear minimum retail prices which Rubbermaid stipulates and notices under the 1959 Ohio Fair Trade Act, R.C. §§ 1333.27-1333.34.

Uncle Bill's characterizes its seven retail stores as discount department stores. Uncle Bill's admits actual notice of Rubbermaid's fair trade agreements with Ohio retailers of Rubbermaid's houseware products; and Rubbermaid's establishment of minimum retail resale prices for certain of these products. Uncle Bill's further admits that it has acquired and subsequently offered for sale and sold certain Rubbermaid houseware products at prices below the minimum retail resale prices designated by Rubbermaid. It is Uncle Bill's continued sale of Rubbermaid's housewares below fair-traded prices which Rubbermaid seeks to permanently enjoin. By agreement plaintiff's claim for damages is reserved for hearing after the Court rules on the request for injunctive relief.

Uncle Bill's challenges the constitutionality of the 1959 Fair Trade Act, and asserts certain affirmative defenses.

At the conclusion of plaintiff counsel's opening statement, defendant's counsel, renewing a ground first raised by demurrer, moved for judgment. He concedes that the 1959 Fair Trade Act was declared constitutional by the Cuyahoga County Court of Appeals in Hudson Distributors, Inc. v. Upjohn Co., 117 Ohio App. 207, 176 N.E.2d 236. But he points out that the affirmance of Hudson by the Ohio Supreme Court (174 Ohio St. 487, 190 N.E.2d 460) was by a 3 to 4 vote. Section 2 of Article IV of the Ohio Constitution says that----

'No law shall be held unconstitutional * * * without the concurrence of at least all but one of the judges, except in the affirmance of a judgment of the court of appeals declaring a law unconstitutional and void.'

Moreover he argues that Hudson's subsequent affirmance by the United States Supreme Court, 377 U.S. 386, 84 S.Ct. 1561, 12 L.Ed.2d 419, merely determined that the Federal McGuire Act exempted the 1959 Ohio Fair Trade Act from the Federal Anti-Trust laws. In short, he argues that Hudson is only the law of that case.

Determining that Hudson, a decision of the Cuyahoga County Court of Appeals, is clearly binding on this Court the motion was overruled. That ruling is reaffirmed.

As related to the elements which plaintiff must prove to warrant injunctive relief under the 1959 Fair Trade Act the evidence supports and directs the following findings.

Rubbermaid manufactures principally a housewares line of products, though it also makes commercial and industrial type products such as rubber and vinyl throw mats for automobiles. Typical housewares for the kitchen are drainboard mats, dishpans, dish drainers; for the bathroom typical items are bathtub mats, and toilet top trays; and for general house use there are wastebaskets, storage bins and cabinets, and floor mats. Rubbermaid's entire line of houseware items numbers about 100. In addition many of these items are produced in different colors. As a manufacturer the plaintiff is a 'producer' under R.C. § 1333.28.

Quality Housewares is the caption of its 1965 Catalog-Price List. Voiced most positively by defendant's Vice-President, the evidence reveals that plaintiff's products fully measure up to the quality claim. Registered as separate trade-marks with the U. S. Patent Office are a red panel shape, the included name 'Rubbermaid' and the words 'Means Better Made,' which usually appear in the red panel immediately below the name 'Rubbermaid.' Patented with the U. S. Patent Office under Patent No. 191,901 are 'Safti-Grip' bathtub and shower mats. The plaintiff qualifies under R.C. § 1333.28 as a 'properietor,' 'who identifies a commodity produced by him by the use of his trade-mark.'

Throughout the county there are a number of companies which manufacture rubber, plastic, and wire houseware products of the same type and class as plaintiff's houseware products. A list of 21 major competitors of Rubbermaid houseware products is in evidence. It is determined that, as required by R.C. § 1333.29, Rubbermaid houseware products are 'in free and open competition with commodities of the same general class produced by others and offered for sale in the same general market area.'

It has long been Rubbermaid's policy to fair trade its houseware products. In states permitting fair trade minimum resale prices, executed agreements with retailers who handle Rubbermaid products are required. This was true in Ohio under the 1936 Fair Trade Act declared unconstitutional in Union Carbide & Carbon Co. v. Bargain Fair, Inc., 167 Ohio St. 182, 147 N.E.2d 481 (1958). In 1962, since the passage of the new Act in 1959, new agreements have been prepared by Rubbermaid. Over 1100 retailers in Ohio have signed these, and in Cuyahoga County some 150 retailers have entered Rubbermaid written agreements. The 'Rubbermaid Authorized Retailer Fair Trade Agreement,' in part, provides:

'2. Rubbermaid products now or hereafter made subject to this agreement are and will be distributed under Rubbermaid's trademark, brand or name in free and open competition with commodities of the same general class produced or distributed by others.

'3. Retailer agrees, (except as specifically permitted by statute) not to advertise, offer for sale, or sell the products listed in Schedule A hereto attached or in said Schedule A as it may from time to time be amended at less than the minimum retail selling price stipulated on such Schedule for such a sale.'

Uncle Bill's declines to sign an agreement with Rubbermaid. But it acknowledges receipt of written notices of Rubbermaid's fair trade agreements 'establishing minimum Fair Trade retail prices on all 'Rubbermaid' trademarked housewares advertised or sold in Ohio.'

Defendant Uncle Bill's has sold and is selling fair traded Rubbermaid Housewares below the stipulated minimum retail selling price. Experiencing difficulty in obtaining sources of supply, it frankly states it would sell more Rubbermaid products if available. It clearly regards Rubbermaid Housewares as quality merchandise that it desires to sell. Unless enjoined it is manifest that Uncle Bill's will continue to sell fair traded Rubbermaid Housewares below minimum resale retail prices.

The next essential element of the plaintiff's case arises under the proviso supplied by the second sentence of R.C. § 1333.29. It reads:

'Such minimum resale prices may be differentiated as to various levels of distribution, provided such differentiations are not otherwise unlawfully discriminatory.'

Does the evidence show that Rubbermaid's minimum resale prices, differentiated as to various levels of distribution, are not otherwise unlawfully discriminatory? The language of the proviso must first be interpreted.

This proviso can hardly refer to any particular statutory prohibition against discriminatory prices. The Valentine Act (Anti-Trust) (R.C. § 1331.01-1331.99) is not applicable, nor is there any other Ohio statute which is. Moreover the Federal Robinson-Patman Act, 15 U.S.C. § 13a, even if otherwise applicable, may only be enforced by one of its specified and self-contained remedies. Bruce's Juices v. American Can Co., 330 U.S. 743, 67 S.Ct. 1015, 91 L.Ed. 1219; Carter Products, Inc. v. Riteprice Merchandise, Inc., 23 Misc.2d 230, 199 N.Y.S.2d 191.

This proviso is construed to mean that within (as distinguished from between) each level of distribution of the proprietor's products (i. e., retailer or wholesaler) the minimum resale prices must not be unlawfull discriminatory. Stated affirmatively, it is discriminatory minimum resale prices within the same level of distribution which is unlawful. There is no evidence that Rubbermaid is setting different minimum retail resale prices for different retailers. Nor is it claimed that this is happening.

R.C. § 1333.32(B) provides:

'(B) Any person suffering or reasonably anticipating damage by reason of a violation of this section may bring suit in any court of competent jurisdiction in the state to:

* * *

* * * '(2) Obtain injunctive relief whether or not specific monetary damages are established; * * *.'

Under this language no proof of monetary damages is necessary to establish irreparable injury, as a prerequisite to injunctive relief. Moreover by earlier language of R.C. § 1333.32 it is an act of unfair competition for a distributor with notice of fair traded prices to sell below those prices. Non-compliance with the stipulated minimum retail resale prices irreparably injures the proprietor's minimum resale price maintenance program. Under the Act this is sufficient proof of irreparable injury.

The essentials of its case being satisfied, plaintiff establishes its right to permanent injunctive relief, unless the defendant has proved an...