White Motor Company v. United States, No. 54

CourtUnited States Supreme Court
Writing for the CourtDOUGLAS
Citation83 S.Ct. 696,9 L.Ed.2d 738,372 U.S. 253
Docket NumberNo. 54
Decision Date04 March 1963
PartiesThe WHITE MOTOR COMPANY, Appellant, v. UNITED STATES

372 U.S. 253
83 S.Ct. 696
9 L.Ed.2d 738
The WHITE MOTOR COMPANY, Appellant,

v.

UNITED STATES.

No. 54.
Argued Jan. 14 and 15, 1963.
Decided March 4, 1963.

Page 254

Gerhard A. Gesell, Washington, D.C., for appellant.

Solicitor General Archibald Cox, for appellee.

Mr. Justice DOUGLAS delivered the opinion of the Court.

This is a civil suit under the antitrust laws that was decided below on a motion for summary judgment. Rule 56 of the Rules of Civil Procedure at the time of the hearing below permitted summary judgment to be entered '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.' Since that time, an amendment to Rule 56, which is included in proposed changes submitted to Congress pursuant to 28 U.S.C. § 2072, would add the following requirement:

'When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him.'

But no such requirement was present when the present case was decided; and appellant, though strenuously opposing summary judgment and demanding a trial, submitted no such affidavits. It did, however, in its brief in

Page 255

opposition to the motion for summary judgment, make allegations concerning factual matters which the District Court thought were properly raised and which we think were relevant to a decision on the merits.

Appellant manufactures trucks and sells them (and parts) to distributors,1 to dealers, and to various large users. Both the distributors and dealers sell trucks (and parts) to users. Moreover, some distributors resell trucks (and parts) to dealers, selected with appellant's consent. All of the dealers sell trucks (and parts) only to users. The principal practices charged as violations of §§ 1 and 3 of the Sherman Act, 26 Stat. 209, 15 U.S.C. §§ 1, 3, concern limitations or restrictions on the territories within which distributors or dealers may sell and limitations or restrictions on the persons or classes of persons to whom they may sell. Typical of the territorial clause is the following:

'Distributor is hereby granted the exclusive right, except as hereinafter provided, to sell during the life of this agreement, in the territory described below, White and Autocar trucks purchased from Company hereunder.

'STATE OF CALIFORNIA: Territory to consist of all of Sonoma County, south of a line starting at the western boundary, or Pacific Coast, passing through the City of Bodega, and extending due east to the east boundary line of Sonoma County, with the exception of the sale of fire truck chassis to the State of California and all political subdivisions thereof.

'Distributor agrees to develop the aforementioned territory to the satisfaction of Company, and not to

Page 256

sell any trucks purchased hereunder except in accordance with this agreement, and not to sell such trucks except to individuals, firms, or corporations having a place of business and/or purchasing headquarters in said territory.'

Typical of the customer clause is the following:

'Distributor further agrees not to sell nor to authorize his dealers to sell such trucks to any Federal or State government or any department or political subdivision thereof, unless the right to do so is specifically granted by Company in writing.'

These provisions, applicable to distributors and dealers alike, are claimed by appellee to be per se violations of the Sherman Act.2 The District Court adopted that view and granted summary judgment accordingly. 194 F.Supp. 562. We noted probable jurisdiction. 369 U.S. 858, 82 S.Ct. 946, 8 L.Ed.2d 17. See 15 U.S.C. § 29.

Appellant, in arguing for a trial of the case on the merits, made the following representations to the District Court: the territorial clauses are necessary in order for appellant to compete with those who make other competitory kinds of trucks; appellant could theoretically have its own retail outlets throughout the country and sell to users directly; that method, however, is not feasible as it entails a costly and extensive sales organization; the only feasible method is the distributor or dealer system; for that system to be effective against the existing competition of the larger companies, a distributor or dealer must make vigorous and intensive efforts in a restricted territory, and if he is to be held responsible for energetic performance, it is fair, reasonable, and necessary that appellant protect him against invasions of his territory by other distributors or dealers of appellant; that appellant in order to obtain

Page 257

maximum sales in a given area must insist that its distributors and dealers concentrate on trying to take sales away from other competing truck manufacturers rather than from each other. Appellant went on to say:

'The plain fact is, as we expect to be able to show to the satisfaction of the Court at a trial of this case on the merits, that the outlawing of exclusive distributorships and dealerships in specified territories would reduce competition in the sale of motor trucks and not foster such competition.'

As to the customer clauses, appellant represented to the District Court that one of their purposes was to assure appellant 'that 'national accounts,' 'fleet accounts' and Federal and State governments and departments and political subdivisions thereof, which are classes of customers with respect to which the defendant is in especially severe competition with the manufacturers of other makes of trucks and which are likely to have a continuing volume of orders to place, shall not be deprived of their appropriate discounts on their purchases of repair parts and accessories from any distributor or dealer, with the result of becoming discontented with The White Motor Company and the treatment they receive with reference to the prices of repair parts and accessories for White trucks.'

The agreements fixing prices of parts and accessories to these customers3 were, according to appellant, only an adjunct to the customer restriction clauses and amounted merely to an agreement to give these classes of customers their proper discounts. 'In a way this affects the prices which these classes of customers have to pay for such parts and accessories, but it affects, as a practical matter, only spare and repair parts and accessories and it affects only the discounts to be given to these particular classes of customers. The provisions are necessary if the defendant's

Page 258

future sales to 'National Accounts,' 'Fleet Accounts' and Federal and State governments and departments and political subdivisions thereof, in competition with other truck manufacturers, are not to be seriously jeopardized.'

White also argued below:

'On principle, there is no reason whatsoever why a manufacturer should not have one distributor who is limited to selling to one class of customers and another distributor who is limited to selling to another class of customers or why a distributor should not be limited to one class of customers and the manufacturer reserve the right to sell to another class of customers. There are many circumstances under which there could be no possible objection to limiting the class of customers to which distributors or dealers resell goods, and there are many reasons why it would be reasonable and for the public interest that distributors or dealers should be limited to reselling to certain classes of customers.

'In the instant case, it is both reasonable and necessary that the distributors (except for sales to approved dealers) and direct dealers and dealers be limited to selling to the purchasing public, in order that they may be compelled to develop properly the full potential of sales of White trucks in their respective territories, and to assure The White Motor Company that the persons selling White trucks to the purchasing public shall be fair and honest, to the end of increasing and perpetuating sales of White trucks in competition with other makes of trucks; and it is reasonable and necessary that The White Motor Company reserve to itself the exclusive right to sell White trucks to Federal and State governments or any department or political subdivision thereof rather than to sell such trucks to such governments or

Page 259

departments or political subdivisions thereof through distributors or dealers, and The White Motor Company should have a perfect right so to do.

'Therefore, based both on the decisions of the Federal Courts and on principle, the limitations on the classes of customers to whom distributors or dealers may sell White trucks are not only not illegal per se, as the plaintiff must prove to succeed on its motion for summary judgment, but these limitations have proper purposes and effects and are fair and reasonable and not violative of the antitrust laws as being in unreasonable restraint of competition or trade and commerce.'

In this Court appellant defends the customer clauses on the ground that 'the only sure way to make certain that something really important is done right, is to do it for oneself. The size of the orders, the technicalities of bidding and delivery, and other factors all play a part in this decision.'

Summary judgments have a place in the antitrust field, as elsewhere, though, as we warned in Poller v. Columbia Broadcasting System, 368 U.S. 464, 473, 82 S.Ct. 486, 491, 7 L.Ed.2d 458, they are not appropriate 'where motive and intent play leading roles.' Some of the law in this area is so well developed that where, as here, the gist of...

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462 practice notes
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    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
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    ...aspects of the distribution system were "ancillary" to the vertical price fixing discussed above, White Motor Co. v. United States, 372 U.S. 253, 260, 83 S.Ct. 696, 9 L.Ed.2d 738 (1963), or that vertical price fixing was such an "integral part of the whole distribution system", United State......
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    ...of plaintiff's patents. Of course, the burden of proof is on the defendant, the proponent of the issue. White Motor Co. v. United States, 372 U.S. 253, 259, 83 S.Ct. 696, 699, 700, 9 L.Ed.2d 738 (1963). United States v. 346 F. Supp. 1132 Grinnell Corp., 236 F.Supp. 244, 248 (D.R.I.1964); af......
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    • September 23, 1974
    ...aspects of the distribution system were "ancillary" to the vertical price fixing discussed above, White Motor Co. v. United States, 372 U.S. 253, 260, 83 S.Ct. 696, 9 L.Ed.2d 738 (1963), or that vertical price fixing was such an "integral part of the whole distribution system", United State......
  • Soto v. City of Sacramento, No. Civ. S-79-680 LKK.
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    • August 24, 1983
    ...v. Columbia Broadcasting System, 368 U.S. 464, 473, 82 S.Ct. 486, 491, 7 L.Ed.2d 458 (1962); The White Motor Company v. United States, 372 U.S. 253, 259, 83 S.Ct. 696, 699, 9 L.Ed.2d 738 (1963); Los Angeles Airways, Inc. v. Davis, 687 F.2d 321, 326 (9th The moving party has the burden of es......
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    • June 20, 1972
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