Zoslaw v. Columbia Broadcasting System, Inc.
| Decision Date | 04 April 1980 |
| Docket Number | No. C-75-0007 RFP.,C-75-0007 RFP. |
| Citation | 533 F. Supp. 540 |
| Court | U.S. District Court — Northern District of California |
| Parties | Charles ZOSLAW and Jane Zoslaw, husband and wife, dba Marin Music Centre, Plaintiffs, v. COLUMBIA BROADCASTING SYSTEM, INC., a corporation, et al., Defendants. |
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Maxwell P. Keith, Keith & Duryea, San Francisco, Cal., for plaintiffs.
John Hauser, John Bates, Patricia Shuler, McCutchen, Doyle, Brown & Enerson, San Francisco, Cal., for defendant Columbia Broadcasting System.
Renee P. Tatro, M. Laurence Popofsky, Heller, Ehrman, White & McAuliffe, San Fracisco, Cal., for defendant Warner/Elektra/Atlantic.
Robert Fremlin, Alf R. Brandin, Lillick, McHose & Charles, San Francisco, Cal., for defendant ABC Records.
Richard J. Lucas, A. W. Fargo, III, Orrick, Herrington, Rowley & Sutcliffe, San
Francisco, Cal., for defendant Eric Mainland Dist. Co.
John M. Anderson, Landels, Ripley & Diamond, San Francisco, Cal., for defendant Integrity Inc.
Melvin R. Goldman, Stanley A. Doten, Morrison & Foerster, San Francisco, Cal., for defendants MTS Inc. & Tower Enterprises.
William Billick, J. Halleck Hoeland, Rosenfeld, Meyer & Susman, Beverly Hills, Cal., for defendant MCA Distributing Corp.
C. F. Gray, Jr., Gray & Thurn, Sacramento, Cal., for defendant Doug Robertson Advertising.
John Curran Ladd, Steinhart, Goldberg, Feigenbaum & Ladar, San Francisco, Cal., for defendant Polygram Distribution, Inc.
Plaintiffs, the owners of a retail music store, brought this antitrust action in January 1975 against a number of phonograph record and tape manufacturers' distributors and certain of their retail customers alleging violations of the Robinson-Patman and Sherman Acts.
In June 1976 and thereafter, this court granted summary judgments in favor of several of the defendant's distributors on the Robinson-Patman claims on the basis that there was no subject matter jurisdiction because the allegedly discriminatory sales were not in interstate commerce.1 In addition, settlements disposed of claims against other defendants.2
At this point six defendants remain in this lawsuit. Presently, five of the six remaining defendants move for summary judgment.3
Having heard argument on these motions, and after considering the supporting papers and reviewing the voluminous record, it is the decision of this court to grant defendants' motions for summary judgment against plaintiffs for two independent reasons.
First, plaintiffs have failed in their reply to defendants' motions to produce competent evidence from which it could be inferred that the alleged violations occurred, as required by Rule 56(e) of the Federal Rules of Civil Procedure and our own Local Rule 220-8.
Second, plaintiffs' factual contentions, even if accepted as we must for the purpose of ruling on the merits of plaintiffs' legal claims, do not support any viable theory of liability against the defendants now before the court.
Plaintiffs Charles Zoslaw and Jane Zoslaw did business under the name Marin Music Centre and operated a Mill Valley retail music store which sold phonograph records and equipment, prerecorded tapes, and other related merchandise. The store opened in August 1965 and engaged in business until closing in May 1977.
Three of the five defendants presently before the court are record distributors: Warner/Elektra/Atlantic Corporation ("WEA"); MCA Distributing Corporation ("MCA"); and Polygram Distribution, Inc. ("Polygram").
WEA is a New York corporation engaged in wholesale distribution of phonograph records and tapes produced by Warner Communication Corporation.
MCA is a New York corporation which is a wholly-owned subsidiary of MCA Records, a manufacturer of phonograph records and tapes. MCA is engaged in wholesale distribution of its parent corporation's goods.
Polygram is a California corporation engaged in the wholesale distribution of records and tapes. Polygram was formerly known by the names Phonodisc, Inc. and UDC, Inc.
WEA, MCA, and Polygram through its subsidiaries sold phonograph records and tapes to plaintiffs and other retail stores in the San Francisco Bay Area during the time period relevant to this litigation.
The fourth defendant moving for summary judgment is a record retailer and is comprised of MTS, Inc. and Tower Enterprises, Inc. ("MTS-Tower"). MTS, Inc. is a California corporation which owns stock in and operates a number of retail record and tape stores including 14 stores in California. MTS, Inc. is the sole shareholder of Tower Enterprises, Inc., a California corporation doing business as Tower Records, a retail record store in San Francisco. Neither MTS, Inc. nor Tower Enterprises, Inc. have ever owned or operated any retail store in Marin County where plaintiffs' store was located. MTS, Inc. and Tower Enterprises, Inc. doing business as Tower Records have been sued and have defended jointly. For purposes of analysis they may be treated as a single entity: MTS-Tower.
The fifth and final moving party defendant is Doug Robertson Advertising, Inc. ("Doug Robertson Advertising"), a California corporation engaged in the advertising business. Doug Robertson Advertising owns five percent of the stock of five of the retail record stores operated by MTS-Tower, and Doug Robertson Advertising was the advertising agency for MTS-Tower during the time period pertaining to this suit.
Four years of discovery reveal that the facts underlying this action are straightforward albeit voluminous. For the most part the facts are uncontroverted and need only be summarized here.
In 1965 plaintiffs Charles and Jane Zoslaw opened a retail store, known as Marin Music Centre, which sold records, stereos, television sets, sheet music and musical instruments from a single location in a shopping center in Mill Valley. At the time the Zoslaws opened their store there were few other record stores in Marin County. Neither plaintiff had prior experience in retailing phonograph records and prerecorded tapes, nor in any other retail business except for Mr. Zoslaw's involvement with a family grocery business in his earlier years.
Plaintiffs suffered startup losses in 1965 and 1966 and claim to have operated at a profit for the following two years. After this the store entered financial difficulties from which it never recovered. The record shows that Marin Music Centre suffered losses by at least 1971 and that this trend continued until the store went out of business in May 1977.
Between the onset of Marin Music Centre's continuing money troubles and the time it ceased doing business the Marin County market changed dramatically. During this period several other stereo and record retailers, and musical instrument outlets opened in Marin County. Simultaneously the number of record departments in department stores, drug stores, and grocery stores also increased. These record departments compete for sales with retail stores like Marin Music Centre.
The market became extremely competitive. This court has previously indicated that the Marin County retail record business was characterized by "price wars." Zoslaw v. Columbia Broadcasting Systems, Inc., CCH 1977-1 Trade Cases ¶ 61,334 (N.D.Cal.); Zoslaw v. CBS, Inc., CCH 1978-2 Trade Cases ¶ 62,269 (N.D.Cal.). As plaintiff testified, Marin Music Centre's prices were higher than those of its competitors.4
In January 1975, a little over two years before closing the store, the Zoslaws brought this action. As initially framed by the complaint, this was essentially an action for illegal price discrimination against a number of phonograph record and tape manufacturers, their distributors and certain of their retail customers. Plaintiffs alleged that the distributor defendants sold their products to retail chain stores at lower prices than those offered to single stores such as plaintiffs' Marin Music Centre in violation of section 2(a) of the Robinson-Patman Act, 15 U.S.C. § 13(a). Plaintiffs also alleged that the defendants discriminated in favor of retail chain stores by granting promotional allowances and by furnishing special services in violation of sections 2(d) and 2(e) of the Act, 15 U.S.C. §§ 13(d) and 13(e).
Plaintiffs alleged that certain of these retail stores knowingly induced and received these purported price discriminations and favorable treatment contrary to sections 2(d), 2(e) and 2(f) of the Robinson-Patman Act, 15 U.S.C. §§ 13(d), 13(e) and 13(f).
Rounding out the complaint, plaintiffs charged a conspiracy in restraint of trade in violation of section 1 of the Sherman Act, 15 U.S.C. § 1.
In early 1976 plaintiffs filed an amended complaint adding new defendants and increasing the amount of damages sought.
Thereafter this court entered summary judgment in favor of several of the distributor defendants on the Robinson-Patman Act claims. Plaintiffs amended their complaint by substantially realleging the Robinson-Patman claims as a series of conspiracies by the defendants to discriminate. This second amended complaint was filed in October 1976.
In March 1977 this court denied plaintiffs' preliminary injunction motion directed against the alleged discriminations.
Finally, in November 1977 plaintiffs amended the complaint a third time by alleging that the defendants had forced them out of business. Five of the remaining six defendants now move for summary judgment.
Plaintiffs filed a massive set of opposition papers which regularly and systematically violate the rules governing responses to motions for summary judgment. Since plaintiffs' papers do not comply with the requirements of the Federal Rules of Civil Procedure or the Local Rules of the Northern District of California, we find...
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Zoslaw v. MCA Distributing Corp.
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Zoslaw v. MCA Distributing Corp.
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