Walker v. Hallmark Cards, Inc.

• Decision Date: 06 June 1997
• Docket Number: No. 94-23-CIV-FTM-25D.,94-23-CIV-FTM-25D.
• Citation: 992 F.Supp. 1335
• Parties: Greta S. WALKER, d/b/a/ Greta's Hallmark Shop, Plaintiff, v. HALLMARK CARDS, INC., Hallmark Marketing Corp., Ron Ratkey, and Walgreen Co., Defendants.
• Court: U.S. District Court — Middle District of Florida

992 F.Supp. 1335

Greta S. WALKER, d/b/a/ Greta's Hallmark Shop, Plaintiff, v. HALLMARK CARDS, INC., Hallmark Marketing Corp., Ron Ratkey, and Walgreen Co., Defendants.

No. 94-23-CIV-FTM-25D.

United States District Court, M.D. Florida, Fort Myers Division.

June 6, 1997.

Ann T. Frank, Ann T. Frank, P.A., Naples, FL, for Plaintiff.

Robert C. Shearman, Henderson, Franklin, Starnes & Holt, P.A., Ft. Myers, FL, Barry M. Katz, Hallmark, Inc., Kansas City, MO, John M. Townsend, Robert B. Funkhouser, Hughes, Hubbard & Reed, Washington, DC, for Defendants.

ORDER

ADAMS, District Judge.

THIS CAUSE is before the Court upon: Defendants', Hallmark Cards, Inc., Hallmark Marketing Corp., and Ron Ratkey ("Hallmark Defendants," "Hallmark," or "Defendants"), Motion for Partial Summary Judgment ("Motion") (Dkt.# 57); Defendant Walgreen Co.'s ("Walgreen") Motion for Summary Judgment (Dkt.# 81); and the Parties' Joint Motion for Stay of Deadlines Pending Disposition of Summary Judgment Motions (Dkt.# 87).

Pursuant to the Parties' representations contained in the Joint Motion that the Parties had resolved their differences as to Counts II, III, and IV of the Second Amended Complaint and as to the counterclaim, the portion of the Hallmark Defendants' Motion dealing with Count II (Tortious Interference with Business Contract) is deemed withdrawn and this Order will solely focus on Counts I & V (Robinson-Patman Act) of the Second Amended Complaint.

Having reviewed the entire File, including depositions, affidavits, and memoranda of law in support of and in opposition to the motions, the Court makes the following findings of fact and conclusions of law:

I. Relevant Facts and Procedural Background

The Plaintiff, Greta S. Walker, filed suit against the Hallmark Defendants, and later joined Defendant Walgreen. The Second Amended Complaint contains the following causes of action: Count I- Robinson-Patman Act ("RPA"), 15 U.S.C. Section 1, as to the Hallmark Defendants; Count II- Tortious Interference with Business Contract; Count III- Fraudulent Misrepresentation; Count IV- Sherman and Clayton Act Violations; Count V- RPA Violations, as to Walgreen. Specifically, from 1986 to 1993 the Plaintiff owned and operated Greta's Hallmark Shop ("Shop"), located in the Pavilion Shopping Center ("Pavilion") in Naples, Florida. The Plaintiff purchased the Shop from its previous owners in March of 1986 and entered into a new $60,000.00 note and security agreement with Hallmark to assume the previous owners' debt to Defendant Hallmark for certain display fixtures. Additionally, the Plaintiff was extended credit and purchasing authority for other Hallmark merchandise. Much of Plaintiff's negotiations with Defendant was accomplished with Ron Ratkey, Defendant Hallmark Marketing's Sales Manager for the southern district of Florida from 1991 until very recently.

In and around 1991, a Walgreen store, also located at the Pavilion, began selling Hallmark products.

The Plaintiff complains that she was the victim of price discrimination occasioned by the Hallmark Defendants' relationship with the Walgreen store at the Pavilion. Specifically, she alleges that Hallmark gave Walgreen more favorable terms by allowing Walgreen free fixtures, free seasonal returns, 10% credit toward purchases, and other incentives. She claims that these disparities in terms resulted in competitive injury to her business. On a broader scale, the Plaintiff alleges a lessening of competition or competitive injury among independent Hallmark card shops in the southwest region of Florida, which correlates to Hallmark's discriminatory pricing with an increasing number of Walgreen rooftops.

In turn, Hallmark maintains that the Plaintiff has failed to show an antitrust injury, causation, or damages. Hallmark also argues that the Plaintiff was a victim of increased competition, not a lessening of competition. Further, Hallmark raises the "meeting the competition" defense of the RPA. Employing this defense, Hallmark argues that it is in national competition for Walgreen business with American Greeting Cards, which gives terms to Walgreen stores comparable to those given by Hallmark to the Walgreen at the Pavilion.

In addition to adopting many of Hallmark's arguments, Defendant Walgreen moves for summary judgment on Count V of the Second Amended Complaint on the grounds that it did not knowingly receive discriminatory pricing.

II. Summary Judgment Standards

The grant of summary judgment is only proper if the pleadings, depositions, answers to interrogatories, affidavits, and admissions on file show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Celotex v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Fed. R.Civ.P. 56. The moving party satisfies its burden by showing an absence of evidence to support an essential element of the nonmoving party's case. Id. Once a party properly makes a motion for summary judgment by demonstrating to the district court the absence of a genuine material fact, whether or not accompanied by affidavits or other proof, the nonmoving party must "go beyond the pleadings and by her own affidavits, or by the `depositions, answers to interrogatories, and admissions of file,' designate `specific facts showing that there is a genuine issue for trial.'" Celotex, 477 U.S. at 324, 106 S.Ct. at 2553 (quoting Fed.R.Civ.P. 56(e)); Hoffman v. Allied Corp., 912 F.2d 1379, 1382 (11th Cir.1990).

The standard for summary judgment mirrors that of directed verdict. Hoffman, 912 F.2d at 1383. Thus, a dispute about a material fact is genuine, and summary judgment is inappropriate, if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Id. Further, the Court must examine the evidence in light of the relevant substantive law when identifying which facts are material. Id. Of course, as a federal antitrust matter, persuasive federal substantive law will govern this Court's determination of this Motion.

The Court must view all evidence most favorably toward the Plaintiff, as the nonmoving party, and all justifiable inferences are to be drawn in the Plaintiff's favor. Hoffman, 912 F.2d at 1383. If the Court finds, under the relevant standards, that reasonable jurors could find a verdict for the nonmoving party since a disputed factual issue exists, summary judgment should be denied. Id. The Court may not decide a factual dispute. Fernandez v. Bankers National Life Ins. Co., 906 F.2d 559, 564 (11th Cir. 1990). If a factual issue is present, the Court must deny summary judgment and proceed to trial. Id.

III. Discussion

a. Discriminatory Pricing, Competitive Injury, and Causation

Relying on Texaco Inc. v. Hasbrouck, 496 U.S. 543, 556, 110 S.Ct. 2535, 110 L.Ed.2d 492 (1990), inter alia, Hallmark maintains that the Plaintiff has failed to establish the requisite elements of "injury to competition" and "causation," i.e. that the injury complained of is causally connected to the alleged discriminatory pricing. Additionally, citing 15 U.S.C. Section 15(a) and Texaco, 496 U.S. at 556, Hallmark argues that the Plaintiff cannot show that the injury was 1) the result of decreased, rather than increased, competition, and 2) the sort of injury meant to be avoided by the antitrust laws. The Plaintiff counters that competitive injury is not a necessary element of a prima facie case of price discrimination. Rather, once discrimination is shown, the burden shifts to the Defendants to prove that its acts did not substantially injure or lessen competition. O'Connell v. Citrus Bowl, Inc., 99 F.R.D. 117 (E.D.N.Y. 1983).

However, the Plaintiff's recitation of the law is procedurally inaccurate. In the Eleventh Circuit, to establish a price discrimination claim under the RPA, a plaintiff must show: 1) that the defendant discriminated in price, discounts, or services between purchasers of commodities of like grade and quality in the course of interstate commerce; 2) that the price discrimination resulted in the requisite injury to competition or competitors; and 3) at least the approximate amount of damages. Chrysler Credit Corp. v. J. Truett Payne Co. Inc., 670 F.2d 575, 578 (5th Cir.1982), cert. denied, 459 U.S. 908, 103 S.Ct. 212, 74 L.Ed.2d 169 (1982), citing Malcolm v. Marathon Oil Co., 642 F.2d 845, 852 (5th Cir.1981).¹

Price discrimination is not per se violative of the RPA, Foremost Dairies, Inc. v. F.T.C., 348 F.2d 674, 679 (5th Cir.1965). The Eleventh Circuit requires that a plaintiff demonstrate "some sort of real competitive injury," DeLong Equipment Co. v. Washington Mills Electro Minerals Corp., 990 F.2d 1186, 1202 (11th Cir.1993), and, moreover, that the injury is causally connected to the alleged antitrust violation. Alan's of Atlanta, Inc. v. Minolta Corp., 903 F.2d 1414, 1426-27 ("injury [must be] caused by an improper effect `flowing' from the defendant's antitrust violation."). In other words:

The causation question is a little more involved. It asks for something other than an inquiry into whether an antitrust violation has put a plaintiff in a worse position than it otherwise would have been in ... The causation question asks not whether the antitrust violation caused the plaintiff's injury, but whether the banned effects flowing from that violation-as opposed to the beneficial ones- led to Plaintiff's harm ... A competitor cannot complain if injured unless the injury flows from anti-competitive, not anti-competitor, effects ... [i]n the final form the RPA causation question asks whether some or all of the plaintiff's injury was derived from or materially furthered by a competitive advantage bestowed upon a favored purchaser through its receipt of discriminatory prices ... [Proof of causation must be established] `as a matter of fact and with a fair degree of certainty.'

Minolta, 903 F.2d at 1427-28.

Here, the record on file is undisputed²...