Moore v. Mead Service Co. , 190 F.2d 540 ( 1951 )

PICKETT, Circuit Judge.

This action was brought to recover statutory treble damages alleged to have been incurred by reason of the defendant’s violation of the Clayton Act as amended by the Robinson-Patman Price Discrimination Act of 1936, 15 U.S.C.A. §§ 13(a), 15. At the conclusion of plaintiffs evidence, the trial court dismissed the complaint and entered judgment for the defendant for the reason that the evidence showed that the alleged price discrimination was in response to changing conditions affecting the market for or the marketability of goods concerned which was permitted under the last proviso of Sec. 13(a). Upon former consideration of the case, we affirmed upon the grounds that the plaintiff, by his own conduct and participation in an illegal boycott, had created a condition which resulted in the price discrimination complained of and for that reason could not maintain the action. 10 Cir., 184 F.2d 338. Upon petition for certiorari, 340 U.S. 944, 71 S.Ct. 528, the Supreme Court remanded the case with directions that it be given further consideration in the light of Kiefer-Stewart Co. v. Joseph E. Seagram & Sons, 340 U.S. 211, 71 S.Ct. 259. Although the facts in the Kiefer case were substantially different from those here, it was there held that in an action for treble damages under the Sherman Act, 15 U.S.C.A. §§ 1, 15, infractions of such law by the claimant were not a defense in such an action. We therefore conclude that the Kiefer case controls on this point.

Moore operated the only bakery in the town of Santa Rosa, New Mexico. At the same time, Mead’s Fine Bread Company, a corporation, had a similar business in Clovis, New Mexico, and was selling its product in Santa Rosa in competition with Moore and through substantially the same outlets. By selling its product through other outlets across the state line in Texas, it was engaged in interstate commerce. In order to retain Moore’s bakery in Santa Rosa, with the consent and acceptance of Moore, a group of business men there obtained the written assurance from all of the retail outlets, except one, that they would not purchase bread from anyone except Moore. This understanding was to become effective on September 3, 1948. Upon that date Mead reduced the price of a one pound loaf of white bread from 140 to 70 and a one and one-half pound loaf from 210 to 110 which was substantially below cost. As a result of this reduction, most of the retailers continued the sale of Mead’s bread. Mead did not reduce the price of its product at any place except Santa Rosa, and maintained these prices until after this action was brought.

The Act makes it unlawful for a person engaged in interstate commerce, either directly or indirectly, to discriminate in price between purchases of commodities of like grade and quality where such commodities are sold for use, consumption or resale and where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in any line of commerce or to injure, destroy or prevent competition with any person who either grants or knowingly receives benefit of such discrimination. The section contains this proviso: “nothing contained in sections 12, 13, 14-21 and 22-27 of this title shall prevent price changes from time to time where in response to changing conditions, affecting the market for or the marketability of the goods concerned, such as but not limited to actual or imminent deterioration of perishable goods, obsolescence of seasonal goods, distress sales under court process, or sales in good faith in discontinuance of business in the goods concerned.” The trial court thought that because of the boycott, Mead was confronted with a changed market condition which would bring it within this proviso. It appears to us that the proviso cannot be given such a broad meaning. It is evident that it deals with special situations in connection with specific lots of goods which are of a perishable nature or become obsolete with the seasons or distress sales under court process or goods sold when a business is discontinued in good faith. The exceptions are not confined specifically to those set forth but the plain language of the statute limits the exceptions to those which are “such as” or similar to those named. The changed market condition caused by the understanding of the retailers in Santa Rosa to purchase only Moore’s bread is not “such as” or similar to' the exceptions named.

A price discrimination having been shown, it then, under the statute, becomes a question of fact as to whether “the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination, or with the customers of either of them.” 15 U.S.C.A. § 13(a).

Judgment is reversed and the cause remanded for new trial.