United States v. White Motor Company
| Decision Date | 21 April 1961 |
| Docket Number | Civ. A. No. 34593. |
| Citation | 194 F. Supp. 562 |
| Parties | UNITED STATES of America, Plaintiff, v. WHITE MOTOR COMPANY, Defendant. |
| Court | U.S. District Court — Northern District of Ohio |
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Robert B. Hummel, Frank B. Moore, John D. Shaw, Antitrust Div. Dept. of Justice, Cleveland, Ohio, for plaintiff.
Robert W. Wheeler and John H. Watson, Jr., M. B. & H. H. Johnson, law firm, Cleveland, Ohio, for defendant.
This action was instituted June 30, 1958, by the United States under Section 4 of the Sherman Act (15 U.S.C.A. § 4), charging that, beginning on or about January 1, 1955, defendant, The White Motor Company, hereinafter called White, or defendant, and certain coconspirators consisting of its various dealers and distributors, have engaged in an unlawful combination and conspiracy in violation of Sections 1 and 3 of the Act (15 U.S.C.A. §§ 1, 3).
The amended complaint charges that White, its distributors and dealers have combined and conspired to restrain interstate commerce by entering into agreements whereby: each distributor and dealer will sell White trucks only to dealers or other buyers who have a place of business or purchasing headquarters within the distributor's or dealer's assigned territory, (Complaint, par. 17(a)); if distributors or dealers sell White trucks outside their specified assigned territories they are obliged to pay certain sums of money to the dealers or distributors in whose territories such White trucks are first registered or placed in initial service, (Complaint, par. 17(b)); distributors and dealers will not sell White trucks to others for resale, (Complaint, par. 17(c)), or to any Federal or State Government or any department or political subdivision thereof, such sales being reserved exclusively by White for direct sales, (Complaint, par. 17(d)); distributors will sell White trucks and parts to dealers at prices fixed by White, (Complaint, par. 17(e)); and distributors and dealers will sell White parts to customers designated by White as National Accounts, Fleet Accounts, and to Federal and State Governments at prices fixed by White, (Complaint, par. 17(f)). The Government charges that White is continuing and will continue the offenses alleged unless enjoined. The relief requested is that White be perpetually enjoined from continuing the alleged conspiracy and from continuing or renewing any of the provisions of its contracts fixing resale prices of White trucks and parts or imposing limitations or restrictions on the territories within which or persons to whom White distributors and dealers may sell trucks.
Defendant has admitted most factual allegations but has denied all charges of illegal conduct. The Government moved for summary judgment on the basis of the pleadings, defendant's answers to interrogatories, the deposition of the defendant's secretary, and accompanying exhibits consisting of representative copies of the contracts and a White distributor and dealer organization chart.
Under Rule 56(c), Federal Rules of Civil Procedure, 28 U.S.C.A., a motion for summary judgment "shall be rendered forthwith if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law."
From the pleadings and exhibits the Court finds that:
Defendant is an Ohio corporation with its principal place of business at Cleveland. (Complaint, par. 3, Answer, par. 3.) It manufactures White and Autocar trucks and truck parts, hereinafter referred to as White trucks and parts, at Cleveland, Ohio, and Exton, Pa., which are sold throughout the United States and the District of Columbia. (Complaint, par. 7, 12, Answer, par. 7, 12.)
After manufacture, White trucks and parts are sold through over two hundred persons, firms or corporations designated by White as "franchised distributors," hereinafter called distributors. Distributors, in turn, sell White trucks and parts at wholesale to over eighty franchised dealers and others. The term "dealer," as used herein, includes the terms "key dealer," "metropolitan dealer," and "dealer" and means any person, firm or corporation so designated by a distributor, with the approval of White, as a retail seller of White trucks and parts. Dealers purchase White trucks and parts from distributors. The term "direct dealer," includes the more than twelve "direct key dealers," "direct metropolitan dealer," and "direct dealers," which are persons, firms or corporations so designated by White as retail sellers of White trucks and parts, to whom White sells its trucks and parts directly. Distributors, dealers and direct dealers are located throughout the United States and the District of Columbia. (Complaint, par. 9, 10, 12, 13; Answer, par. 9, 10, 12, 13; Plaintiff's Exhibit 36.)
In addition to selling through distributors, dealers and direct dealers, defendant sells White trucks and parts directly to consumers, some of whom are designated as "National Accounts," and to various governmental divisions designated herein as "Government Accounts." (Complaint, par. 12, 13, 14; Answer, par. 12, 13, 14.)
There is a continuous flow in interstate trade and commerce of White trucks and parts from White's manufacturing plants in Ohio and Pennsylvania, through distributors, dealers and direct dealers, to consumers located throughout the United States and the District of Columbia, and from White manufacturing plants in Ohio and Pennsylvania and its sales and service branches directly to consumers located throughout the United States and the District of Columbia, some of which are sometimes designated "National Accounts," and the sales to some of which are sometimes called "Government Sales." (Complaint, par. 14; Answer, par. 14.)
White is one of the leading United States manufacturers of medium to heavy duty trucks and parts therefor (Complaint, par. 15; Answer, par. 15).
The total volume of sales of White trucks by defendant to its various classes of customers was $102,928,000 in 1955, $116,110,000 in 1956, $127,471,000 in 1957, and $92,699,000 during the first seven months of 1958. (Defendant's Answer to Interrogatory No. 7, Ex. J, more fully set forth in Appendix A of this memorandum.)
Total sales of White truck parts by defendant in each of the years 1955, 1956, and 1957 exceeded $41,000,000 and were over $25,000,000 for the first seven months of 1958. (Defendant's Answer to Interrogatory No. 8, Ex. J-1.)
Sales of White truck parts by defendant to the United States Government amounted to $2,755,000 in 1955, $915,000 in 1956, $475,000 in 1957, and $761,000 for the first seven months of 1958. (Defendant's Answer to Interrogatory No. 8, Ex. J-1.)
The Court further finds that:
At the deposition of Alfred Dixon Edgerton, Secretary of White, copies of thirty-five contracts were authenticated and identified as being representative of all of the various forms of agreements used by defendant throughout its distribution system during the period involved which contain the clauses relevant to this action. (Tr. 28-40.)
Exhibits 1-16, inclusive, consist of Distributor's Selling Agreements, Form 626, at least 251 of which were executed or in effect during the relevant period. The printed portions of all of the Form 626 contracts are identical. (Tr. 29, 30.) (It is noted that Exhibit 2 bears the form number 604 but, in view of the testimony and by comparison of the documents, it is apparent that the last page bearing the form number 604 is that of another exhibit and that Exhibit 2 is Form 626.)
Exhibits 17-20, inclusive, consist of Direct Key Dealer Selling Agreements, Form 631, eighteen of which were executed or in effect during the relevant period. The printed portions of all of the Form 631 contracts are identical. (Tr. 31.)
Exhibits 21-23, inclusive, consist of Direct Dealer Selling Agreements, Form 627, five of which were outstanding during the relevant period. The printed portions of all of the Form 627 contracts are identical. (Tr. 32.)
Exhibits 24-32, inclusive, consist of Key Dealer Selling Agreements, Form 682, approximately sixty-two of which were in effect during the relevant period. (Ex. 36.) The printed portions of all Form 682 contracts are identical. (Tr. 36, 37.)
Exhibit 33 consists of a Dealer Selling Agreement, Form 713, approximately twenty-two of which were in effect during the relevant period. The printed portions of all Form 713 contracts are identical. (Tr. 39.)
Exhibits 34 and 35 consist of Metropolitan Dealer Selling Agreements, Form 604, of which two were outstanding during the relevant period. Printed portions of all Form 604 contracts are identical. (Tr. 40.)
Exhibit 36 consists of a graphic representation of White's distribution system prepared in the normal course of business by White for, and at the request of, the Federal Bureau of Investigation. It is initialed and dated "10/22/57" and indicates the number of White's distributors, dealers and direct dealers and their relationships to each other. (Tr. 20.)
White is a party to all selling agreements with distributors, direct key dealers, direct metropolitan dealers, and direct dealers. White also is a party to all selling agreements between its distributors and key dealers, metropolitan dealers, and dealers, its approval and signature being necessary to validate the agreements.
White provides standard form selling agreements which its distributors are required to use when entering into contracts with key dealers, metropolitan dealers and dealers. (Par. 9, Distributor Selling Agreement, Form 626.)
The Court further finds that:
Paragraph 1 of the Distributor Selling Agreements, Form 626, provides:
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