Secatore's, Inc. v. Esso Standard Oil Company

• Decision Date: 17 March 1959
• Docket Number: Civ. A. No. 58-891-F.
• Citation: 171 F. Supp. 665
• Parties: SECATORE'S, INC., v. ESSO STANDARD OIL COMPANY.
• Court: U.S. District Court — District of Massachusetts

171 F. Supp. 665

SECATORE'S, INC., v. ESSO STANDARD OIL COMPANY.

Civ. A. No. 58-891-F.

United States District Court D. Massachusetts.

March 17, 1959.

Arthur Brogna, Harry Bergson, Jr., Boston, Mass., for plaintiff.

Robert W. Meserve, John R. Hally, Nutter, McClennen & Fish, Boston, Mass., for defendant.

FRANCIS J. W. FORD, District Judge.

Plaintiff brings this action under the provisions of 15 U.S.C.A. §§ 15 and 26 for damages and injunctive relief, alleging violations by defendant of the Clayton Act as amended by the Robinson-Patman Act, 15 U.S.C.A. § 13. Defendant moves for summary judgment on the basis of the pleadings and the depositions of the plaintiff's president and principal stockholder. The facts as set forth in these documents have not been controverted.

Plaintiff operates two large retail gasoline stations in East Boston. It actually sells only to customers who bring their vehicles to one of its stations where gasoline is pumped into the tanks of the vehicles and has no facilities for delivering or selling off its premises. Defendant is a refiner and distributor of petroleum products. It operates no retail gasoline stations. It sells gasoline to customers who take delivery in their own tank trucks at defendant's refinery and also delivers in its own tank trucks to customers who have storage tanks and pumps on their own premises.

Counts 1 and 3 charge that defendant discriminated in price in violation of 15 U.S.C.A. § 13(a)¹ by selling to certain direct buying consumers at prices lower than it charged plaintiff. The consumers to whom sales were allegedly made at a lower price are all ultimate consumers, large industrial or commercial users who do not resell any of the gasoline they purchase. None of them has ever been a customer of plaintiff. Plaintiff has never tried to sell gasoline to them and does not have the facilities to deliver gasoline to their tanks as defendant actually does.

Assuming, as alleged, that defendant did sell to these ultimate consumers at a lower price than it sold to plaintiff, such a price differential would not constitute the discrimination in price forbidden by § 13(a) unless it affected competition. The competition affected could only be that between plaintiff and defendant. Admittedly these ultimate consumers who are alleged to have bought gasoline at a lower price are not in competition with plaintiff. There is no claim that competition between plaintiff and other retail gasoline dealers has been affected, since defendant's price to them was always the same as its price to plaintiff. There is a potential competition between plaintiff and defendant as to these ultimate consumers. Although plaintiff has never sold to them or tried to sell to them, and although admittedly he has lost no customer to defendant, nevertheless as ultimate consumers of gasoline they are possible future customers of plaintiff. It is only this potential competition which could possibly have been affected by any price differential offered to these ultimate consumers by defendant.

However, even this potential competition could not actually be affected by the alleged price differential. Clearly there would be no discrimination if defendant sold to these ultimate consumers at the same price at which it sells to plaintiff. But even then plaintiff could not compete with defendant for their business for it would as a matter of practical economics have to charge them more than it paid defendant for the gasoline in order to cover its expenses of operation, to say nothing of making a profit on the transaction. If plaintiff cannot successfully compete with defendant for these customers when there is no price differential, it is not harmed by any further reduction which defendant may make in the price it charges to them. Jarrett v. Pittsburgh Plate Glass Co., 5 Cir., 131 F.2d 674, 676; A. J. Goodman & Son, Inc. v. United Lacquer Mfg. Corporation, D.C., 81 F.Supp. 890, 893. Defendant is under no obligation to sell to plaintiff at a lower price than it charges to consumers who buy directly from it in order to enable plaintiff to compete with it for the business of those customers. But unless it does this, plaintiff will never be able to compete successfully with defendant, at least with respect to price.

In fact, the only claim made by plaintiff's president as to damages actually suffered is his statement that if plaintiff could have bought its gasoline at the lower price allegedly paid by other purchasers, it would have increased its profits by the amount of this price differential. This is, of course, entirely speculative. It assumes that plaintiff could have continued to sell gasoline at the same price while paying less for it, an unlikely eventuality in view of the fact that it was in competition with other retail dealers buying from defendant who...