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Lupia v. Stella D'oro Biscuit Co.

decided: November 15, 1978.


Appeal from the United States District Court for the Northern District of Illinois No. 72-C-738 - Joel M. Flaum, Judge

Before Sprecher, Circuit Judge, Nichols, Judge,*fn* and Bauer, Circuit Judge.

Author: Nichols

Plaintiff-appellant, Edward Q. Lupia, was an exclusive distributor of defendant's ethnic bakery products in the Chicago metropolitan area from 1961 until 1972. Defendant-appellee, Stella D'Oro Biscuit Company, Inc., is a New York corporation. In 1972, Lupia brought an action against Stella D'Oro, alleging that Stella D'Oro's marketing practices had violated various provisions of the Federal antitrust laws, specifically section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1, section 3 of the Clayton Act, 15 U.S.C. § 14, and sections 2(a) and 2(c) of the Robinson-Patman Act, 15 U.S.C. § 13(a), (c). Plaintiff seeks monetary relief under section 4 of the Clayton Act, 15 U.S.C. § 15, the remedial provision allowing recovery of treble damages by "Any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws * * *." The terms of the agreements between the parties and the defendant's allegedly illegal practices are detailed below.

Both plaintiff and defendant filed motions for summary judgment in the district court. The motions were based on a substantial record assembled by discovery and affidavits, establishing beyond the mere allegations of the pleadings, what the plaintiff was and was not able to prove. Judge Flaum granted summary judgment to defendant on all four counts of the complaint, and denied summary judgment to plaintiff. We affirm.

Before discussing the contentions of the parties regarding the antitrust claims, it is necessary to comment on the role of a summary judgment in antitrust cases. In any type of litigation, the standard for granting summary judgment is strict. In Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 82 S. Ct. 486, 7 L. Ed. 2d 458 (1961), Citing Sartor v. Arkansas Natural Gas Corp., 321 U.S. 620, 627, 64 S. Ct. 724, 88 L. Ed. 967 (1944), the Supreme Court enunciated that standard, declaring that summary judgment was proper:

Poller is the classic case cited for the proposition that courts should exercise extreme caution when deciding to grant or deny summary judgment in antitrust cases. In Poller, plaintiff alleged that CBS's cancellation of an independent UHF station's network affiliation was part of a conspiracy to restrain UHF broadcasting in the Milwaukee area. The majority in Poller believed that plaintiff should be given the opportunity to pursue discovery and attempt a showing of conspiracy at trial. Mr. Justice Clark's majority opinion, in reversing the D.C. Circuit's grant of summary judgment, stated that:

But this court and other circuit courts have not interpreted Poller or similar statements by other courts to preclude use of summary judgment in antitrust litigation. See, e. g., Crest Auto Supplies, Inc. v. Ero Mfg. Co., 360 F.2d 896 (7th Cir. 1966). The issue in Crest was whether the court could decide if the parties were In pari delicto. Stating that the court did not quarrel with the Poller view that summary judgment should be used sparingly in cases where "Motive and intent play leading roles," this court affirmed grant of summary judgment despite Poller because the factors cited in Poller (proof of subjective states of mind, genuine issues of material fact) were not present there. 360 F.2d at 899-900, (emphasis in original).

A similar situation exists in the present case. The intent of Stella D'Oro is not at issue. Rather, the issue is whether plaintiff has alleged any facts demonstrating a violation that "fits" within the requirements for an antitrust recovery, a question of law that can be answered by the court. Compare ALW, Inc. v. United Air Lines, 510 F.2d 52 (9th Cir. 1975). Here the Ninth Circuit affirmed grant of summary judgment for defendant on antitrust claims. The court held that plaintiff had merely alleged the existence of a "contract, combination, or conspiracy," under section 1, and that once defendant rebuts such an allegation by affidavit, plaintiff must set forth factual support of the conspiracy's existence in order to withstand defendant's motion for summary judgment. The court also dismissed plaintiff's claim under section 2 of the Sherman Act, since plaintiff showed "no monopoly power or dangerous probability thereof" existing in the relevant market. 510 F.2d at 57.

Although the strict standards for grant of summary judgment, and the complex legal and factual nature of antitrust cases have made many courts reluctant to grant summary judgment in antitrust cases, technically there is no requirement that judges exercise greater caution in granting summary judgment in these cases than in any other. The Advisory Committee note accompanying Fed.R.Civ.P. 56 (1938) states that "(t)his rule (governing summary judgment motions) is applicable to All actions." (emphasis supplied.)

Indeed, the very nature of antitrust litigation would encourage summary disposition of such cases when permissible. Not only do antitrust trials often encompass a great deal of expensive and time consuming discovery and trial work, but also, (without intending any slur on plaintiff here), the statutory private antitrust remedy of treble damages affords a special temptation for the institution of vexatious litigation, see Poller, supra, 368 U.S. at 474, 82 S. Ct. 486 (Harlan, J. dissenting). The ultimate determination, after trial, that an antitrust claim is unfounded, may come too late to guard against the evils that occur along the way. Judge (now Chief Judge) Skelly Wright, in a libel case, Washington Post Co. v. Keogh, 125 U.S.App.D.C. 32, 365 F.2d 965 (1966), noted that:

In Mintz v. Mathers Fund, Inc., 463 F.2d 495, 498 (7th Cir. 1972), this court has stated:

As there held, mere recitation of antitrust claims in a complaint does not render that complaint immune from summary disposition, if uncontradicted facts show otherwise. If a trial would serve no useful purpose, summary judgment is proper. Solomon v. Houston Corrugated Box Co., Inc., 526 F.2d 389, 393-94 (5th Cir. 1976). Assuming then, as is proper in summary judgment cases, that all facts as stated by the party opposing grant of summary judgment are true, we now examine the case at hand to determine if defendant is entitled to summary judgment.

Price Discrimination Among Retailers

Count I of plaintiff's complaint alleges that defendant granted favored retail chain stores a 5 percent discount on the retailer's wholesale price charged, and then charged back the cost of that discount to the plaintiff-distributor. Defendant's system operated as follows: plaintiff generally bought bakery products from defendant for the retailer's wholesale price (RWP) minus 26 percent. Plaintiff sold and delivered the products to retail food stores through driver-route salesmen employed on a commission basis. The salesmen would collect the payments from the retailers, and return them to plaintiff. With chain stores, however, a different system was used. Plaintiff would still buy the goods, but the salesmen-drivers did not collect payment from the retailers; rather, they returned an invoice to plaintiff, taking their commissions. ...

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