653 F.2d 1300 | 9th Cir. | 1981
Lead Opinion
In this antitrust action, one distributor wrested a product line away from a second distributor, its principal competitor. The injured firm sued both the distributor who took the line and the manufacturer-supplier, alleging violations of sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 and 2 (1976). The complaint charged an attempt to monopolize the relevant market and a concerted refusal to deal. After reviewing allegations of the plaintiff in response to a summary judgment motion by the defense, the district court found that plaintiff had offered no evidence from which an unlawful intent could be established and, accordingly, it granted the defendant’s motion for summary judgment on both counts. We affirm.
A. H. Cox & Co. (Cox) was an independent distributor of heavy equipment, including truck mounted hydraulic cranes with capacities ranging from 4 to 10 tons.
During 1974, the relevant period in this action, four domestic manufacturers accounted for 95 percent of all small truck mounted cranes manufactured and sold nationwide. These manufacturers were R. 0. Products, Inc. (R. 0.), Pitman Manufacturing Co. (Pitman), National Crane Co., and Scott Midland. The market at issue here is the retail distribution of these small truck mounted cranes in a three county area of western Washington that roughly comprises metropolitan Seattle. Within this market, all four major manufacturers of truck cranes were represented, each by a distributor which carried one line exclusively. The two principal manufacturers’ lines involved in this action were R. 0. and Pitman, distributed by Cox and Star respectively. Star’s retail sales of the Pitman crane accounted for approximately 50 percent of the market. Cox, its closest competitor, had sales comprising 20 to 25 percent of the market. Two other dealers and their respective products took up most of the balance. The crux of the dispute is that Star succeeded in persuading R. 0. to let Star carry its line instead of Cox. Pitman was then assigned from Star to a Seattle distributor called Fray Equipment Co. (Fray), and Cox was left without any line.
Cox claims Star knew Cox had financial difficulty and was dependent on the R. O. line, and that Star took the R. 0. line in order to eliminate Cox as a competitor. Cox further asserts that Star secured the R. 0. line by unfair methods of competition, in that it elicited confidential financial data about Cox from former Cox employees and then distorted and misrepresented the gravity of Cox’s financial predicament to R. 0. It is alleged that loss of the R. 0. line created severe cash flow problems for Cox. Two and a half years after losing the line, Cox declared bankruptcy.
In the complaint below, Cox alleged that Star attempted to monopolize the retail sale by distributors of small truck mounted cranes in violation of section 2 of the Sherman Act, and that Star and R. 0. conspired to refuse to deal in violation of section 1 of
In reviewing the grant of summary judgment, we of course must view the evidence and all permitted inferences in favor of Cox, and uphold the lower court’s dismissal only if Star has met its burden of proving the absence of any genuine issues of material fact. Blair Foods, Inc. v. Ranchers Cotton Oil, 610 F.2d 665, 668 (9th Cir. 1980); Mutual Fund Investors, Inc. v. Putnam Management Co., 553 F.2d 620, 624 (9th Cir. 1977). We must recognize further that summary judgments are disfavored in antitrust cases, especially when motive or intent is at issue. Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 82 S.Ct. 486, 7 L.Ed.2d 458 (1962); Sierra Wine & Liquor Co. v. Heublein, Inc., 626 F.2d 129, 132 (9th Cir. 1980). We nevertheless agree with the district court that summary judgment should be granted in this case.
Cox contends that Star’s agreement with R. O. prior to Cox’s termination constituted an unreasonable restraint of trade in violation of section 1 of the Sherman Act. Cox argues that whether this combination is deemed per se unreasonable, or simply judged under the rule of reason, this concerted refusal to deal should be held unlawful.
At the outset, we note that there are four categories of competitive restraints which have been held unreasonable per se: (1) horizontal and vertical price fixing; (2) horizontal market division; (3) group boycotts and concerted refusals to deal; and (4) tie-in sales. Gough v. Rossmoor Corp., 585 F.2d 381, 386 (9th Cir. 1978), cert. denied, 440 U.S. 936, 99 S.Ct. 1280, 59 L.Ed.2d 494 (1979). While a theory of the complaint is that Star and R. 0. conspired to refuse to deal with Cox, the law appears settled that a per se violation will result only where “there has been some horizontal concert of action taken against victims of the restraint.”
To prove the restraint of trade unreasonable, Cox must show the refusal to
Most cases recognizing the right to establish an exclusive manufacturer-dealer relation arise when an arrangement is formed or changed at the behest of the manufacturer. See, e. g., Burdett Sound, Inc. v. Altec Corp., 515 F.2d 1245, 1247 (5th Cir. 1975); Bushie v. Stenocord Corp., supra, 460 F.2d at 118. As a general rule, such arrangements have been viewed as vertical in nature, thus rendering the per se rule of illegality inapplicable. Gough v. Rossmoor Corp., supra, 585 F.2d at 387; Mutual Fund Investors, Inc. v. Putnam Management Co., supra, 553 F.2d at 626-27. See Oreck Corp. v. Whirlpool Corp., 579 F.2d 126 (2d Cir.) (en banc), cert. denied, 439 U.S. 946, 99 S.Ct. 340, 58 L.Ed.2d 338 (1978). In the case before us, the change was requested by the distributor. It is argued that the thrust of the transaction thus becomes horizontal, with an anticompetitive animus directed to a co-distributor. We do not agree. The right to suggest or initiate dealership changes does not reside exclusively in the manufacturer. Mutual Fund Investors, Inc. v. Putnam Management Co., supra, 553 F.2d at 626; Joseph E. Seagram & Sons, Inc. v. Hawaiian Oke & Liquors, Ltd., supra, 416 F.2d at 78. A contrary rule would give manufacturers more control over dealers than is consistent with the interests of free competition at the distributor level. It is widely recognized, moreover, that in most circumstances dealer terminations or substitutions do not adversely af
Under the foregoing principles, appellant cannot prevail because it has failed to adduce any evidence of anticompetitive effect or intent which would distinguish this dealer substitution case from the myriad of decisions upholding changes in distributors. That one distributor will be hurt when another succeeds in taking its line will be axiomatic in some markets, as it was here, but the intent to cause that result is not itself prohibited by the antitrust laws. The intent proscribed by the antitrust laws lies in the purpose to harm competition in the relevant market, not to harm a particular competitor. Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 97 S.Ct. 690, 50 L.Ed.2d 701 (1977). Star continued to carry only one line of products, its former line having been assigned to another distributor.
These observations apply to the market in this case. Star and Pitman did not have a good business relation, as evidenced by the disruption of its dealership in a separate market (Portland, Oregon), and Cox introduced no evidence to rebut that. Cox, on the other hand, carried a good product but was financially weak. Cox offered no evidence to show that competition in the market was disserved when Star took over a product line that had less sales than the one it abandoned. There was, moreover, no showing of any barriers to entry in this market by new distributors, apart from the limited number of lines available. It is undisputed that there was immediate entry into the market by a new distributor, which continued representation of the product line formerly carried by Star.
Cox argues that this substitution of a distributor with a smaller market share than Cox has an anticompetitive effect. Cox’s theory in this regard holds that, because the design and performance of the four makes of cranes were similar, demand for them was solely a function of the servicing abilities of the dealers selling them. It is argued therefore that the termination of Cox and replacement with a distributor less adept at servicing harms competition. Evidence in the record reveals, however, that other factors apart from servicing abilities, including availability of dealer financing and brand name familiarity, contribute to the demand for cranes. In support of its theory, moreover, Cox has shown only that the new distributor, Fray, did not advertise in the yellow pages and was located outside the central business core. That is insufficient to demonstrate that the new distribu
There was uncontradicted testimony, on the other hand, from the sales executives of the manufacturers and other distributors to the effect that competition in the market remained vigorous. This was in no way rebutted by Cox. Cox made no credible showing that it was likely oh even possible that, after Star gave up a product accounting for 50 percent of the market in exchange for one accounting for only 25 percent, Star’s market share was significantly increased. For these reasons, we agree with the lower court that Cox failed to demonstrate any anticompetitive intent or effect arising from Star’s actions.
Similarly, allegations of unfair competition by the new dealer are insufficient to raise antitrust concerns in this case. No adverse effect on competition is cited, nor suggestions that the manufacturer’s business judgment was demonstrably affected. Such charges might merit scrutiny under state tort law, but without proof of anti-competitive effect they are not actionable under section 1 of the Sherman Act.
Cox further alleges that Star violated section 2 of the Sherman Act by attempting to monopolize the market for the retail distribution of small truck mounted cranes in western Washington. To prove an attempt to monopolize claim, Cox must, at a minimum, advance some evidence demonstrating (1) a specific intent to control prices or exclude competition and (2) predatory conduct directed to the accomplishment of that unlawful purpose. Hunt-Wesson Foods, Inc. v. Ragu Foods, Inc., 627 F.2d 919, 924-26 (9th Cir. 1980), cert. denied, 450 U.S. 921, 101 S.Ct. 1369, 67 L.Ed.2d 348 (1981); Blair Foods, Inc., supra, 610 F.2d at 669; Greyhound Computer Corp. v. International Business Machines Corp., 559 F.2d 488 (9th Cir. 1977), cert. denied, 434 U.S. 1040, 98 S.Ct. 782, 54 L.Ed.2d 790 (1978). Specific intent to monopolize may, and normally will, be inferred from anticompetitive conduct. Hunt-Wesson Foods, Inc., supra, 627 F.2d at 926; Gough v. Rossmoor Corp., supra, 585 F.2d at 390.
While intent and conduct are essential elements to be proved in a prima facie case, a third element, though not indispensable, is a dangerous probability of success in monopolization. In most cases a dangerous probability of success will be inferred from predatory conduct and specific intent to control prices or exclude competition. Janich Brothers Inc. v. American Distilling Co., 570 F.2d 848, 853 (9th Cir. 1977), cert.3 denied, 439 U.S. 829, 99. S.Ct. 103, 58 L.Ed.2d 122 (1978); Lessig v. Tidewater Oil Co., 327 F.2d 459, 474-75 (9th Cir.), cert. denied, 377 U.S. 993, 84 S.Ct. 1920, 12 L.Ed.2d 1046 (1964). Nevertheless, proof of market power can be relevant in drawing 'the inference of specific intent where the conduct at issue is potentially anticompetitive or ambiguous. If the conduct clearly threatens competition, however, the inference will be drawn irrespective of the defendant’s market power. Hunt-Wesson Foods, Inc., supra, 627 F.2d 925—26; Blair Foods Inc., supra, 610 F.2d at 669-70.
. In July of 1977, Cox declared bankruptcy and since then its trustee in bankruptcy, Carsten Johnsen, has maintained the action.
. R. O. settled out of the case but is still a named defendant for purposes of the conspiracy charge.
. This court recently has stated that vertical agreements to exclude competition may in some instances require application of the per se rule. Ron Tonkin Gran Turismo, Inc. v. Fiat Distributors, Inc., 637 F.2d 1376, at 1384-86. The court reasoned that characterization of the restraint as vertical or horizontal should not end the inquiry; rather, the relevant focus should be directed towards the economic impact of the restraint. It is true that where interbrand competition, as opposed to intrabrand competition, is adversely affected, significant antitrust concerns may be implicated. Continental T.V., Inc. v. GTE Sylvania, Inc., 433 U.S. 36, 97 S.Ct. 2549, 53 L.Ed.2d 568 (1977). Thus, a per se violation might be established if a manufacturer’s decision to terminate a dealer was prompted by dealer coercion, either by a single dealer or by a group of dealers. See Cernuto, Inc. v. United Cabinet Corp., 595 F.2d 164 (3d Cir. 1979). There is no such proof of coercion offered by Cox.
. Fray Equipment Co. was not a named defendant.
. We decline to establish a fifth per se category, as urged by Cox, to cover vertical combinations that eliminate a competitor. The Supreme Court recently has indicated in Continental T.V., Inc. v. GTE Sylvania, Inc., 433 U.S. 36, 58-59, 97 S.Ct. 2549, 2561-2562, 53 L.Ed.2d 568 (1977), that vertical, nonprice market restrictions should be decided under the rule of
. Cox does not allege a horizontal conspiracy between Star and Fray, the distributor assigned the Pitman line. Nor does Cox claim it attempted to secure the Pitman line, but failed due to Star’s actions,
. Cox contends the Pick-Barth rule of according per se treatment to unfair competitive practices designed to eliminate a competitor should be adopted here. Albert Pick-Barth Co. v. Mitchell Woodbury Corp., 57 F.2d 96 (1st Cir.), cert. denied, 286 U.S. 552, 52 S.Ct. 503, 76 L.Ed. 1288 (1932). We do not agree. The First Circuit has limited the Pick-Barth rule substantially, and most courts decline to apply it. George R. Whitten, Jr., Inc. v. Paddock Pool Builders, Inc., 508 F.2d 547 (1st Cir. 1974), cert. denied, 421 U.S. 1004, 95 S.Ct. 2407, 44 L.Ed.2d 673 (1975). See Northwest Power Products, Inc. v. Omark Industries, Inc., 576 F.2d 83 (5th Cir. 1978), cert. denied, 439 U.S. 1116, 99 S.Ct. 1021, 59 L.Ed.2d 75 (1979); Note, Antitrust Treatment of Competitive Torts: An Argument for a Rule of Per Se Legality Under the Sherman Act, 58 Tex.L.Rev. 415 (1980).
Dissenting Opinion
dissenting:
I respectfully dissent.
I have no dispute with most of the majority’s statement of applicable law. However, on the basis of the record before the district court, I believe that appellant A. H. Cox & Company (“Cox”) had viable and triable claims under both § 1 and § 2 of the Sherman Act. While paying lip service to the law governing summary judgment in antitrust cases, the majority draws every inference against Cox (the resisting party) and misconstrues the relevant market. If, as required, the reasonable inferences arising from the uncontroverted facts are drawn in favor of Cox and if the relevant market is properly defined, summary judgment was improperly granted. I would, therefore, reverse the district court’s grant of summary judgment, and remand this case for trial.
In general, as the majority recognizes, a party moving for summary judgment must prove the absence of any genuine issue of material fact. Fed.R.Civ.P. 56(c); First National Bank v. Cities Service Co., 391 U.S. 253, 290, 88 S.Ct. 1575, 1593, 20 L.Ed.2d 569 (1968) (summary judgment appropriate only in absence of “any significant probative evidence tending to support the complaint”); Ron Tonkin Gran Turismo, Inc. v. Fiat Distributors, Inc., 637 F.2d 1376, 1381 (9th Cir. 1981), petition for cert. filed, 49 U.S.L.W. 3955 (No. 80-2080, June 1, 1981). As the Supreme Court has emphatically stated, summary judgment is rarely appropriate in antitrust litigation, especially when the defendants’ motive and intent are in question. Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 473 — 74, 82 S.Ct. 486, 491, 7 L.Ed.2d 458 (1962); see Sierra Wine & Liquor Co. v. Heublein, Inc., 626 F.2d 129,132 (9th Cir. 1980); Industrial Bldg. Materials, Inc. v. Interchemical Corp., 437 F.2d 1336 (9th Cir. 1970). Moreover, every possible factual inference must be drawn in favor of the party opposing a motion for summary judgment. Blair Foods, Inc. v. Ranchers Cotton Oil, 610 F.2d 665, 668 (9th Cir. 1980).
With respect to appellant’s claim that R. 0. Products, Inc. (“R. O.”) and Star Machinery Company (“Star”) conspired to restrain trade in violation of § 1 of the Sherman Act, Cox may well have been able to establish that appellees intended to restrain trade and were successful in their efforts.
There is adequate evidence in the record to support a finding that Cox was not, in fact, in financial difficulty at the time of Star’s alleged statements to the contrary,
“ ‘Although a company may ordinarily deal or refuse to deal with whomever it pleases without fear of violating the antitrust laws, refusal to deal which is anti-competitive in purpose or effect, or both, constitutes an unreasonable restraint of trade in violation of the Sherman Act,’ even when justified by a legitimate business reason. Whether a defendant refused to deal and, if so, whether the refusal was a product of an anticompetitive motive are factual issues that should not be taken from the jury ‘unless “the evidence is such that without weighing the credibility of the witnesses there can be but one reasonable conclusion as to the verdict.” ’ ”
Program Engineering, Inc. v. Triangle Publications, Inc., 634 F.2d 1188, 1195 (9th Cir. 1980), citing Fount-Wip, Inc. v. Reddi-Wip, Inc., 568 F.2d 1296, 1300 (9th Cir. 1978) (reversing grant of summary judgment and remanding for trial). The fact that Star dominated the market even before the distributorship change requires us to give appellant’s claims particularly careful scrutiny. Columbia Metal Culvert Co., Inc. v. Kaiser Aluminum & Chemical Corp., 579 F.2d 20, 32 (3d Cir.), cert. denied, 439 U.S. 876, 99 S.Ct. 214, 58 L.Ed.2d 190 (1978).
The key step in determining whether Star’s actions might have been unreasonable is to decide whether, given the chance, Cox might have proven that those actions had a significant effect on competition or that they significantly enhanced Star’s market power.
It is undisputed that before the events in controversy, Star’s share of the market for small truck-mounted cranes in the Seattle area was in excess of 50%, and that Cox, with a 25% share, was its principal competitor. There is also evidence that only four companies manufactured such cranes, and that their products were substantially interchangeable. The record supports the inference that each distributor’s market share was to a large degree determined by factors within the control of the distributor, other than the brand name of its cranes, such as price, advertising and the quality of service provided. This inference is also supported by the fact that the manufacturers’ respective shares of the national market bore no resemblance to the shares of market held in the greater Seattle metropolitan market by their respective distributors. In deciding Star’s summary judgment motion, the district court should have drawn this inference in appellant’s favor and analyzed the relevant market at the distributor level rather than at the manufacturer level.
Thus, if all reasonable inferences from the record, including the absence of certain facts, are drawn in Cox’s favor as required, Blair Foods, Inc., supra, 610 F.2d at 668, the following inferences may reasonably be drawn: (1) market share in the relevant market is determined at least in significant part by the strength of the distributor, based on factors other than the brand name of its crane line; (2) since nothing in the record demonstrates that Star’s switching of brands weakened it as a distributor at all, Star at least retained its 50-75 percent share of market; (3) since there is nothing in the record as to Fray’s share of market it is unreasonable to infer that it was able, as a new entrant with no identification or goodwill, to immediately capture any significant market share; and (4) the elimination of its primary competitor, Cox, and the entry of a new, unknown competitor, Fray, enabled Star to substantially increase its market share in an oligopolistic market. Accepting these inferences as true, as we must on summary judgment, Cox’s demise may be found to have enhanced Star’s dominance of the market, and adversely affected competition in the market as a whole. See Mutual Fund, supra, 533 F.2d at 627; Knutson, supra, 548 F.2d at 803.
I recognize that the foregoing analysis of anticompetitive effect involves some theorizing on my part, in that the trial court was offered no evidence of what each company’s market share became after Cox’s demise and the entry of Fray. However, appellant adduced the basic facts and a reasonable theory to support its assertion of anticompetitive effect. See Ron Tonkin, supra, 637 F.2d at 1381; Bushie, supra, 460 F.2d at 116. Moreover, the burden of proving that there are no genuine issues of material fact falls on the moving party (in this case, the appellees). Blair Foods, supra, 610 F.2d at 668. Since the effect on competition of Cox’s exclusion from the Seattle small crane market is a material issue of fact, the district court’s grant of summary judgment was improvident, and should be reversed. See Poller, supra, 368 U.S. 472-73, 82 S.Ct. at 490-91.
Finally, in light of the foregoing, I would also reverse the district court’s summary judgment with respect to appellant’s claim under § 2 of the Sherman Act. The district court held that since appellant had not shown any anticompetitive conduct on the part of Star, it would be unable to prove that Star had attempted to monopolize the small crane market.
The majority’s affirmance of summary judgment against Cox on its § 2 claim is
Since I conclude that the effect on competition of Cox’s exclusion from the market is a controverted issue of fact and that Cox may be able to show anticompetitive impact at trial, it was error to grant summary judgment against Cox on its § 2 claim.
I would reverse the judgment and remand the case for trial.
. To avoid summary judgment, a plaintiff alleging a § 1 conspiracy must come forward with specific facts to show that there was an agreement between two or more distinct persons or entities. Blair Foods, supra, 610 F.2d at 671. This burden may be met by producing circumstantial evidence of an agreement. Id. The judgment below simply assumed that Cox would be able to prove the existence of an agreement at trial, but does not explain whether it did so because there was enough evidence to support the possibility that an agreement was made, or whether the court did not believe it necessary to reach that question. In either case, I conclude that there was sufficient evidence before the district court to require a denial of summary judgment on this point. There is little question that Star and R. O. personnel discussed the Cox situation. While Star may have had a legitimate reason for doing so (Star was already an R. O. distributor in another state), a jury could have found that appellees’ action was outside the bounds of their normal business relationship. Cf. Blair Foods, supra, at 672 (appellees held to have given a justifiable explanation for denying credit to appellant). This inference, unlike the others discussed infra was thus correctly drawn in appellant’s favor.
. The majority recognizes that even vertical agreements to exclude competition may sometimes require application of the per se rule. An example is when a manufacturer’s decision to terminate a dealer is prompted by coercion from other dealers. See Cernuto Inc. v. United Cabinet Corp., 595 F.2d 164 (3d Cir. 1979); Majority opinion (“Maj.op.”), at 1305 n.3. While Cox has not alleged that Star coerced its distributor, R. O., it has alleged that Star materially misinformed R. O. with respect to Cox’s financial condition, that Star received confidential information about Cox from an ex-employee of Cox and that Star attempted to hire away some of Cox’s employees.
The majority takes a dim view of the proposition that unfair competitive practices designed to eliminate a competitor should be treated as a per se violation of the Sherman Act. See Maj.op. at 1308 n.7, citing George R. Whitten, Jr., Inc. v. Paddock Pool Builders, Inc., 508 F.2d 547 (1st Cir. 1974), cert. denied, 421 U.S. 1004, 95 S.Ct. 2407, 44 L.Ed.2d 673 (1975). However, in Paddock Pool, the First Circuit distinguished one of its own earlier cases, Albert Pick-Barth Co. v. Mitchell Woodbury Corp., 57 F.2d 96, cert. denied, 286 U.S. 552, 52 S.Ct. 503, 76 L.Ed. 1288 (1932), and two subsequent cases from other courts, Perryton Wholesale, Inc. v. Pioneer Distributing Co., 353 F.2d 618 (10th Cir. 1965), cert. denied, 383 U.S. 945, 86 S.Ct. 1202, 16 L.Ed.2d 208 (1966) and C. Albert Sauter Co. v. Richard S. Sauter Co., 368 F.Supp. 501 (E.D.Pa.1973). This case bears a much closer resemblance to the facts of the three cases distinguished in Paddock Pool than to Paddock Pool itself, inasmuch as Star’s actions were clearly directed against Cox and were not simply an effort to win over Cox’s customers. Cf. Paddock Pool, supra, 508 F.2d at 560-562 (appellee’s conduct was an attempt to win customers rather than damage the organization of appellant).
Nevertheless, the majority was correct in refusing to characterize Star’s alleged conduct as a per se violation. Several circuits have recently rejected the Pick-Barth doctrine entirely. See, e. g., Havoco of America, Ltd. v. Shell Oil Co., 626 F.2d 549, 555-56 (7th Cir. 1980); Stifel, Nicolaus & Co., Inc. v. Dain Kalman & Quail, Inc., 578 F.2d 1256 (8th Cir. 1978); Northwest Power Products, Inc. v. Omark Industries, 576 F.2d 83, 88 (5th Cir. 1978), cert. denied, 439 U.S. 1116, 99 S.Ct. 1021, 59 L.Ed.2d 75 (1979). It is worth noting, however, that each of these also held that allegations of unfair competition may be within the scope of the antitrust laws when the Rule of Reason test is applied. See, e. g., Havoco, supra, at 626 F.2d 556.
. Cox received a $300,000 infusion of new capital shortly before its distributorship was terminated.
. Under the test used in this Circuit, the unreasonableness of a particular agreement may be established by showing either that the parties intended to restrain trade or that they succeeded in doing so. Knutson, supra, 548 F.2d at 803. In practical terms, however, it is difficult to prove unreasonable intent without proving some effect on competition. See Borger v. Yamaha International Corp., 625 F.2d 390, 397 n.4 (2d Cir. 1980).
. In order to be held liable under § 2, a defendant must be demonstrated to have (1) specifically intended to control prices or exclude competition, and (2) engaged in predatory conduct' directed to the accomplishment of that unlawful purpose. Maj.op. at 1308; Hunt-Wesson Foods, Inc. v. Ragu Foods, Inc., 627 F.2d 919, 924-26 (9th Cir. 1980), cert. denied, 450 U.S.
