Sorrentino v. Glen-Gery Shale Brick Corporation, No. 2447.

• Decision Date: 10 September 1942
• Docket Number: No. 2447.
• Citation: 46 F. Supp. 709
• Parties: SORRENTINO v. GLEN-GERY SHALE BRICK CORPORATION et al.
• Court: U.S. District Court — Western District of Pennsylvania

46 F. Supp. 709

SORRENTINO v. GLEN-GERY SHALE BRICK CORPORATION et al.

No. 2447.

District Court, E. D. Pennsylvania.

September 10, 1942.

John Pemberton Jordan, of Philadelphia, Pa., for plaintiff.

Frederic L. Clark (of Shields, Clark, Brown & McCown), of Philadelphia, Pa., for defendants A. S. Squier and Fallston Co.

Herbert A. Speiser (of Speiser & Speiser), of Philadelphia, Pa., for defendant Anna Margolis et al.

Ernest Scott and Philip L. Leidy (of Pepper, Bodine, Stokes & Schoch), both of Philadelphia, Pa., and George A. Kershner (of Zieber & Snyder), of Reading, Pa., for defendant Glen-Gery Shale Brick Corporation and its officers.

BARD, District Judge.

This action was instituted by plaintiff against Glen-Gery Shale Brick Corporation, its officers, Fallston Brick Company, A. A. Squier, Philadelphia representative of these two firms, and a number of defendants trading as S. Margolis, for treble damages resulting from the alleged violation by these defendants of the Sherman and Clayton Acts, 15 U.S.C.A. § 1 et. seq. and 38 Stat. 730. All of the defendants have filed motions to dismiss the complaint.

The complaint alleges that plaintiff is engaged in the business of selling in interstate and intrastate commerce lumber, sand, cement and other building materials, and maintains his offices in Philadelphia. Defendants Glen-Gery and Fallston are brick manufacturers located in Pennsylvania and conducting an interstate business. Both firms are represented by the defendant Squier as their Philadelphia sales agent. The defendants Margolis are a competitor of the plaintiff, maintaining offices near those of the plaintiff in Philadelphia, and likewise sell building materials in interstate commerce.

In October, November and December of 1941 plaintiff placed orders with and received deliveries of brick from Glen-Gery. At that time he advised Glen-Gery and Squier that he had an established business requiring delivery of supplies to New Jersey and Delaware, and he was assured by them that Glen-Gery would make deliveries of any orders placed by him with it. In reliance upon such assurance plaintiff made extensive alterations in his office building and storage facilities and he purchased additional land, all of which entailed an expenditure of approximately $40,000. In January and February of 1942 plaintiff sought to purchase brick from Glen-Gery and from Fallston and was advised by these firms and by Squier, their Philadelphia representative, that because of the threats of Margolis to withdraw its account if they continued to supply plaintiff and his customers with brick, they would not make any sales to plaintiff. These refusals continued and Glen-Gery and Fallston told plaintiff that Margolis was their exclusive dealer in the Philadelphia and nearby New Jersey area and that if plaintiff wanted to purchase brick manufactured by the defendants he would have to purchase it from Margolis.

Plaintiff's first contention is that the foregoing action of the defendants constitutes a violation of Sections 1 and 2 of the Sherman Act, 15 U.S.C.A. §§ 1 and 2, which provide:

"§ 1. Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal. * * *."

"§ 2. Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a misdemeanor * * *."

That plaintiff's complaint fails to set forth a violation of these sections of the Sherman Act is clear. The fundamental element to establish a violation of those sections of that act is the intent or effect of creating a monopoly or unduly restraining trade in a particular commodity, and thereby to affect adversely the public interest. The complaint contains no allegation that any or all of the defendants have such control over the supply of brick in the Philadelphia area that as a result of the refusal of the defendant manufacturers to sell brick directly to plaintiff, he is unable to purchase brick for his business. The sole charge is that defendant manufacturers refuse to sell directly to plaintiff and sell their products in the Philadelphia area exclusively to the defendants Margolis. This does not make out a violation of the Sherman Act. The Sherman Act does not deprive a manufacturer of the right to sell his own customers in the business in the absence of a showing that he has combined with others with the intent of affecting or destroying the right of freedom to trade. United States v. Colgate & Company, 250 U.S. 300, 39 S.Ct. 465, 63 L. Ed. 992, 7 A.L.R. 443; Great Atlantic & Pacific Tea Co. v. Cream of Wheat Co., 2 Cir., 227 F. 46. Said the Supreme Court in the Colgate case at page 307 of 250 U.S., at page 468 of 39 S.Ct., 63 L.Ed. 992, 7 A. L.R. 443: "The purpose of the Sherman Act is to prohibit monopolies, contracts and combinations which probably would unduly interfere with the free exercise of their rights by those engaged, or who wish to engage, in trade and commerce—in a word to preserve the right of freedom to trade. In the absence of any purpose to create or maintain a monopoly, the...