United States District Court, Northern District of Illinois, E.D
February 26, 1982
EMIL J. LAUTER CO., INC., ETC., PLAINTIFF,
BRUNSWICK CORPORATION, DEFENDANT.
The opinion of the court was delivered by: Shadur, District Judge.
MEMORANDUM OPINION AND ORDER
Emil J. Lauter Co., Inc. ("Lauter") sues Brunswick
Corporation ("Brunswick") charging price discrimination in
violation of Section 2(a) of the Robinson-Patman Act (the
"Act"), 15 U.S.C. § 13(a). Brunswick has moved to dismiss under
Fed.R.Civ.P. ("Rule") 12(b)(6). For the reasons stated in this
memorandum opinion and order Brunswick's motion is granted.
Lauter's Skokie, Illinois store sells billiard tables and
pinball machines at retail. On May 28, 1974 Lauter entered into
a non-exclusive dealership agreement (the "Agreement") to sell
Brunswick billiard tables. Brunswick later established its own
competitive retail outlets*fn2 for billiard tables and pinball
machines. Brunswick supplied its own retail outlets with
merchandise at prices lower than those charged Lauter, in an
attempt to drive Lauter out of business.*fn3 Lauter sustained
injury to his business and seeks treble damages because of
Robinson-Patman Act Liability
Section 2(a) provides:
It shall be unlawful for any person engaged in
commerce, in the course of such commerce, either
directly or indirectly, to discriminate in price
between different purchasers of commodities of
like grade and quality . . . where such
commodities are sold for use, consumption, or
resale. . . .
At least two sales by a defendant are essential to a cause of
action under the Act: one to plaintiff and one to plaintiff's
competitor. Lupia v. Stella D'Oro Biscuit Co., 586 F.2d 1163
1170-71 (7th Cir. 1978).
It appears that Brunswick's "outlets" are not separate
corporate entities.*fn5 If so the case is over. By definition
could not sell to itself, whether or not (for example) it may
have maintained divisional accounting or comparable records for
its own convenience. No second "purchaser" would exist — fatal
to a Section 2(a) claim.*fn6 Diehl & Sons, Inc. v.
International Harvester Co., 426 F. Supp. 110, 123 (E.D.N Y
1976). As our own Court of Appeals put it in Lupia, 586 F.2d at
In addition, Judge Flaum thought it inherently
impossible for illegal competition to exist where
a manufacturer competes directly with his own
distributor. That is his privilege, according to
Chicago Sugar Co. v. American Sugar Refining Co.,
[176 F.2d 1, 10 (7th Cir. 1949)].
But because Lauter may have been guilty of faulty factual
pleading as well as faulty legal analysis (in which case the
factual flaw might be deemed cured by repleading), this opinion
will examine the alternative — that Brunswick's "outlets" are
operated by corporate subsidiaries. Lauter could fare no better
under that hypothesis, under such cases as Security Tire &
Rubber Co. v. Gates Rubber Co., 598 F.2d 962
, 964-67 (5th
Cir.), cert. denied, 444 U.S. 942
, 100 S.Ct. 298
, 62 L.Ed.2d
309 (1979); see, P. Areeda, Antitrust Analysis ¶ 701(c), at
1056 and n. 18.
True enough, some courts have (incorrectly in this Court's
view) analyzed like problems in a way that could permit form to
prevail over economic substance, finding possible a "sale"
between parent and subsidiary for Robinson-Patman purposes. But
that notion, even where recognized, has been strictly limited
to the subsidiary "operated independently of dominion and
control of [the parent]. . . ." Parrish v. Cox, 586 F.2d 9, 12
(6th Cir. 1978).*fn7 Here Complaint ¶ 6 says Brunswick
"operate[s]" the outlets, negating any such independence.
Whatever view of the relationships and the legal alternatives
is adopted, Lauter has no viable Section 2(a) claim against
Brunswick. Accordingly Brunswick's Rule 12(b)(6) motion is
granted and the Complaint is dismissed.