Vance v. Safeway Stores

• Decision Date: 19 January 1956
• Docket Number: No. 2930.,2930.
• Citation: 137 F. Supp. 841
• Parties: Harry V. VANCE, Trustee in Bankruptcy for Frank Melvin Thompson, Bankrupt, Plaintiff, v. SAFEWAY STORES, Incorporated, a corporation, Defendant.
• Court: U.S. District Court — District of New Mexico

137 F. Supp. 841

Harry V. VANCE, Trustee in Bankruptcy for Frank Melvin Thompson, Bankrupt, Plaintiff, v. SAFEWAY STORES, Incorporated, a corporation, Defendant.

No. 2930.

United States District Court D. New Mexico.

January 19, 1956.

Nordhaus & Moses, Robert J. Nordhaus, Albuquerque, N. M., for plaintiff.

Keleher & McLeod, John B. Tittmann, Albuquerque, N. M., Douglas Stripp, Kansas City, Mo., for defendant.

ROGERS, District Judge.

This cause comes before the Court upon the first amended complaint filed by Harry V. Vance, trustee in bankruptcy for Frank Melvin Thompson, a bankrupt, against Safeway Stores, Incorporated, a corporation, and a motion to dismiss said first amended complaint, a motion of the defendant for a more definite statement of plaintiff's first amended complaint, and a motion to strike from said first amended complaint certain allegations contained in the last-mentioned pleading. Plaintiff seeks judgment against the defendant in the sum of $45,000 and that the judgment so recovered be trebled, for reasonable attorneys fees, costs of suit, and for other equitable relief under an alleged violation of Section 3 of the Act of Congress of June 19, 1936, commonly known as the Robinson-Patman Act, 49 Stat. 1528, 15 U.S.C.A. § 13a; and Section 4 of the Clayton Act, as amended, 38 Stat. 731, 15 U.S.C.A. § 15.

A short summary of the allegations contained in the amended complaint, are deemed necessary for a proper presentation of the questions of law arising by the attack levied against the amended complaint by the above-mentioned motions.

The complaint alleges that Vance is the trustee in bankruptcy of Thompson, who was adjudicated a bankrupt May 28, 1955, Thompson being a citizen of New Mexico; that the defendant is a Maryland corporation, qualified as a foreign corporation in New Mexico; that from 1948 until May, 1955, Thompson operated a retail grocery store in Albuquerque, New Mexico. There then followed a statement descriptive, according to the plaintiff, of the defendant corporation. In effect, it alleges that the defendant is the second largest food chain in the United States, operating more than two thousand supermarkets in twenty-four states, having a very large sales in the United States, employing over forty-nine thousand persons, and owning and operating various warehouses, bakeries, candy plants, milk plants and similar food processing establishments. It is thereafter alleged that defendant's operations in the United States are divided into fifteen distribution divisions, one of which is the El Paso Division serving West Texas and New Mexico, including Albuquerque. Defendant is alleged to be the dominant distributor and retailer of food products in West Texas and New Mexico, and that it supplies its retail-stores in New Mexico from warehouse facilities operated in El Paso, Texas, transporting the greater portion of the food products sold in its stores in its own trucks from outside New Mexico, directly to its stores in Albuquerque, and elsewhere in New Mexico. An allegation appears that defendant's sales in its stores in Albuquerque are both at retail and wholesale. There then appears an omnibus allegation that by reason of defendant's unlimited financial resources, and its processing and storage facilities, its centralized management and its dominant position as a food distributor in this region, defendant was and is able to destroy competition in the City of Albuquerque, at the will of its management. It is then alleged that between September 1, 1954, to the date of the filing of the complaint, defendant, at the direction of its management located in El Paso, Texas, and Oakland, California, sold goods in the course of interstate commerce in its Albuquerque stores, at prices substantially lower than prices exacted by defendant for the same goods in other cities and towns in New Mexico, and elsewhere in the United States, for the purpose of destroying competition in the grocery business in the City of Albuquerque, in violation of those sections of the Federal Statutes first above cited. It is specifically alleged that substantially all the prices were established by defendant's management located outside of New Mexico. Certain goods are attempted to be specified as having been sold in violation of the Robinson-Patman Act. These include soft drinks, coffee, flour, butter and other household staples. It is then alleged that when these items are advertised at unreasonably low prices, to attract large numbers of customers, this has a tendency to destroy competition, and it is alleged that defendant's competitors could not afford to sell such items at unreasonably low prices over a period of time, and remain in business. It is stated that said unreasonably low prices extended over a period of more than six months, with the knowledge and intent on the part of the defendant that such action would destroy a number of its smaller competitors in Albuquerque, and that as a proximate result of the alleged illegal action of the defendant, a number of defendant's competitors, including the plaintiff, were destroyed. They specifically allege that the bankrupt Thompson suffered a loss of business and profits in the years 1954 and 1955 to his damage in the sum of $20,000, and further, as a proximate result of defendant's alleged illegal actions, Thompson became insolvent, became bankrupt, and lost his grocery business to his damage in the amount of $25,000.

The defendant's motion to dismiss plaintiff's first amended complaint is based on the following grounds, first, that the first amended complaint fails to state a claim upon which relief can be granted, in that it does not contain a short and plain statement of the claimants, showing plaintiff entitled to relief as required by Rule 8(a) of the Federal Rules of Civil Procedure, 28 U.S.C.A.; second, that the amended complaint fails to state a claim on which relief can be granted, in that it did not allege sufficient facts with particularity to state a violation of Section 3 of the Robinson-Patman Act, 15 U.S.C.A. § 13a; third, that the amended complaint fails to state a claim upon which relief can be granted, and fails to establish the jurisdiction of this Court over the subject matter of this action, for the reason that the complaint does not concern transactions, occurrences or activities taking place in the course of interstate commerce and within the scope of Section 3 of the Robinson-Patman Act, supra; fourth, the amended complaint fails to state a claim on which relief can be granted under Section 3 of the Robinson-Patman Act, supra, for the reason that Title 15 U.S.C.A. § 13a, is unconstitutional, being so vague and indefinite, that it violates the Fifth and Sixth Amendments to the Constitution of the United States, having no reasonable relation to the anticipated evil, and constituting an unreasonable interference with freedom of contract, as guaranteed by the Fifth Amendment to the Constitution of the United States; fifth, that the amended complaint fails to state a claim upon which relief can be granted under Section 3 of the Robinson-Patman Act, for the reason that said section is not one of the "Anti-Trust Laws", within the purview of Section 4 of the Clayton Act, 15 U.S.C.A. § 15, and no private right of action for violation of said section exists under any laws of the United States; sixth, the amended complaint fails to state a claim upon which relief can be granted, under Section 3 of the Robinson-Patman Act, Title 15 U.S.C.A. § 13a, for the reason that said complaint fails to allege facts establishing a violation of Section 3 of the Robinson-Patman Act, or facts demonstrating injury to plaintiff's business or property on account of an alleged violation of said section.

The grounds dispositive of this cause of action in its present status, will be taken up in the order of their importance.

It has been deemed best to formulate appendices to this opinion, wherein can be contained the various statutes in dispute, together with pertinent references to actions taken on Congressional bills by the Senate, the House of Representatives and committees thereof. By so doing, needless excerpts from the Statutes and from Congressional proceedings can thus be avoided.

Little need be said, relative to the motions to strike and make definite and certain, in view of the disposition hereinafter made of the cause on the motion to dismiss. Suffice it to say, if this cause be eventually tried upon its merits, the issues to be submitted to a jury, which has already been demanded herein, can be delineated with precision at a pretrial conference, and thereby improper allegations can be deleted from any submission of the cause to a jury. Likewise, by means of pre-trial conferences, by discovery, Rules 26 through 37, 28 U.S.C.A., and by adherence to the suggestions contained in "Short Cuts in Long Cases", 13 F.R.D. page 42 et seq., pertinent information should be acquired by all of the parties hereto, so that a full presentation of all the ramifications of this cause can be had.

Passing, now, to the motion to dismiss, the Court passed upon the three grounds therein, which were strenuously argued, orally, before the Court, namely, that the Court lacks jurisdiction of the subject matter of this action; that section 3 of the Robinson-Patman Act is unconstitutional, and lastly, that a private litigant has no right to maintain a treble damage action for violation of Section 3 of the Robinson-Patman Act. Defendant contends that Section 3 of the Robinson-Patman Act specifically requires that the action constituting violations thereof, must occur "in the course of commerce", and that the Act is specifically limited to things done in the course of commerce, and has no application to purely intra-state transactions, citing Myers v. Shell Oil Co., D.C., 96 F. Supp. 670, and Standard Oil Co. v. Federal Trade Commission, 340 U.S. 231, 71 S.Ct. 240, 95 L.Ed. 239....