Esso Standard Oil Company v. Secatore's, Inc.
246 F.2d 17
1st Cir.
1957
Check Treatment

*2 Broadhurst, Nutter, Hally, to sell to the and the defend- defendant R. Austin agreed buy plaintiff, Ely, Bartlett, ant from all the & Fish and McClennen buyer’s Mass., Brown, Boston, requirements Thompson Esso and of & gasolines post- brief, appellant. Esso Extra at the seller’s for wagon prices ed tank “in the effect at ap- Mass., Rosa, Boston, for Albert U. delivery place is time and which from pellee. made.” HARTIGAN, and Before WOODBURY At the time when this contract was Judges, ALDRICH, District Circuit Judge. and plaintiff made any into had entered agreements anyone fair trade August in Massachusetts. On 7 and Judge. WOODBURY, Circuit 1956, however, while its contract with judgment appeal from a This is force, plaintiff defendant was dismissing brought complaint a ain suit negotiated price resale diversity jurisdiction under federal to agreements of its with several retail enjoin “non-signer” retailer from sell fixing dealers in Massachusetts mini- ing plaintiff’s Extra Esso and Esse prices mum retail for Esso Esso gasolines in than Massachusetts for less gasolines. Extra was The defendant prices the minimum retail established promptly agreements notified of these therefor in fair-trade en and directed to the minimum observe by par plaintiff into tered ty with third prices therein established. refused to pursuant retailers to the Massachu right persist do so asserts the Law, setts Fair Trade Mass. G.L. c. its refusal unless the orders it to court part 14A, 14B, quoted in material §§ comply. margin.1 obvious, freely It is and indeed it is plaintiff, conceded, plaintiff engaged Esso Standard Oil Com- engaged pany, corporation is a Delaware in interstate commerce. its min- Thus distribution, production, fixing agreements arid mar- imum retailers, with its keting gasoline petroleum though by and other even authorized state throughout products illegal law, the United States under se federal an- foreign September, legislation exempted and in countries. titrust unless there- three-year into a by Miller-Tydings amendment, entered con- from the May 1, 1954, (1937), tract to take effect 50 Stat. 693 § defendant, Secatore’s, Inc., a Massa- Sherman Act and the McGuire amend- corporation operating large ment, (1952), chusetts two 5(a) 66 Stat. 632 § 1. following provisions bears, deemed commonwealth name commodity sumer general tained commodity except the bears, “Section “(1) sale or in such contract: or the That the vendor. said bears, class in violation 14A. No contract and which with commodities of the same resale commodity produced by producer label or container vending buyer at the reason of trade-mark, is in fair will not resell such or owner of commodity is sold to con any equipment price stipulated others shall be law relating brand or of which be con oc which open such advertising, offering stipulated any pursuant er the commodity such tionable aged stitute commodity require upon sale or sell producer chaser “Section “(2) [*] except commodity thereby.” contract, person agree That unfair selling at the suit of to or vendee. 14B. at the [*] that he will any so another, is or is not a preceding section, producer hereby advertising, offering Wilfully price stipulated by contract [*] less than the for sale or any person declared to con- the sale of such not, or vendee of a and to [*] entered into such knowingly party turn, wheth- selling dam- % such pur- ac- plaintiff’s Act, 15 defendant Trade contract with the the Federal Commission Schwegmann second, 45(a).2 sought, barred U.S.C.A. §§ plaintiff competition” Corp., 1951, “in Bros. was v. Calvert *3 retailers, 1035; 745, Unit the defendant and other 11 95 L.Ed. its S.Ct. Robbins, Inc., and, third, plaintiff had been & that the ed McKesson States v. 305, 310, requiring S.Ct. to ob- 76 lax in its other retailers agreements. 937, 100 The the and cited. serve its fair trade On L.Ed. cases Miller-Tydings amendment, in al- this and of the evidence at basis introduced hearing carefully prepared most McGuire the court in a identical the opinion also, rejected provide material all defenses amendment of these nothing part granted plaintiff temporary antitrust that in federal and the the legislation illegal, “shall render contracts relief for which it asked. agreements prescribing or minimum hearing however, on, Later after a commodity prices resale of for the merits, the the the court found on below bears, which label of or the or container plain- of further basis evidence that mark, brand, bears, or the trade competition” tiff was “in with the de- producer of name or distributor fendant and retailers. Thus its other commodity and and which is in free such plaintiff’s price it concluded that open competition of with commodities agreements with- were not general produced class or dis- same exemption Miller-Tydings of by others, when contracts or tributed and McGuire amendments and so were agreements description law- that are of legislation. illegal federal under antitrust applied ful as to intrastate transactions” the tem- Wherefore it vacated forthwith amendatory under But local law. both injunction granted porary it had and grant immunity provide acts judgment dismissing entered the condemnation “shall not from federal complaint plaintiff’s us which is before any agreement, make contract or lawful appeal. on this providing or main- for the establishment only sup- The any prices on tenance of minimum resale gasolines plies to its retail its dealers involved, commodity man- herein between who in turn sell to consumers ultimate ufacturers, producers, or between or be- filling stations, at it also but sells brokers, wholesalers, or between tween some ultimate customers. It direct factors, retailers, or or between hundred “commer- has several so-called corpo- persons, firms, or or between Massachusetts, all of cial accounts” rations in with each other.” gas- quantity of use a substantial whom critical, and we see it the con- year. per part These for most oline trolling, question court below before the operators of or taxi- fleets of trucks plaintiff and before us is whether although cabs, some of them also use “corporations and in com- defendant gasoline for lift-trucks and other off-the- each other.” many plain- vehicles. cases the road complaint plaintiff expense provides, With its filed tiff its own installs temporary injunction underground for a a motion maintains tanks and hearing respective pumps premises held a court below hearing gasoline At that the defendant customers it delivers motion. these practically plants by stipulated its all the al- bulk them tank legations complaint quantities could fact truck in never less than charges points gallons emergency. accepted except as true made three It asserted, gallon first, posted one in defense. them cent above only exempting from amendment reaf- the antitrust mini- laws 2. Tlie McGuire Miller-Tydings price-fixing policy of the mum made bind- firmed ing by “non-signers” amendment, also state law on eliminated the re- but such Supreme agreements. effect of Court’s strictive Bros, Sehwegmann ease decision general language wagon price. eris the of the conclud- tank is no set mini- There ing corpora- phrase, “persons, firms, required consumption mum annual other,” account, qualify tions in with each for a commercial preceding plaintiff on is account controlled reference will sell such categories profit. specific competitors, to six make it can thinks 5,- phrase than and that therefore the alludes Some less of these accounts use gallons retailers, wholesalers, etc., annually, them who but most go actively under another in commercial use type solicits name much more. It “agents.” jargon, perhaps “jobbers” last business and in Alternatively argues year figures were in context complete for which *4 phrase type final available, Massachusetts refers it in amounted competition $3,000,000 year, which occurs between re- to over about gross tailer and retailer or between wholesaler appellant’s local busi- of 10% wholesaler, forth, ness. so serving competition asserts is defendant-appellee a does The also by short, putting same “function.” filling its at substantial annual business plaintiff-appel- stress on “function” the operators mo- fleets of stations distinguish competition lant seeks to no tor vehicles. There is evidence rendering the same service from com- in 1955 dollar volume of business this the same customers. gal- using 5,000 over had 45 accounts clearly per year, inconsid- is not arguments so it lons We think these must be re- its these accounts at jected erable. It services filling and rationale of way customary Supreme stations in the Court in United States filling generally cus- their stations service Robbins, Inc., 1956, McKesson & opera- say, fleet tomers. That is to 76 S.Ct. 100 L.Ed. 1209. to the are driven tors’ trucks or taxicabs The defendant in that case manufactured the defend- drug and there products defendant’s station a line of which it marketed employees fill tanks the vehicles’ ant’s under own its brand name and it also perform ordina- incidental services acted as wholesaler its own and other filling rily by performed drugstores. attend- station commodities sold It en- price ants. tered into resale maintenance agreements respect own its found, Thus, the District Court as branded merchandise with other whole- certainly an area in which most there is products of like salers and the United plaintiff and the defendant against proceeded States under § competition While with each other. injunctive of the Sherman Act for competitive techniques are differ- their asserting agreements lief con- gives ent, for a lower less service one illegal stituted an restraint of trade. for a price other more service and the McKesson & Robbins contended in de- higher price, that each fact remains had made fense that it mainte- striving way for the busi- own is in its agreements in nance its role of manufac- gasoline directly supplying ness of agreements turer, and therefore the operate of motor ve- fleets who those “between wholesalers.” competition of their And the area hicles. n disregarded Supreme Court, refusing can be small that it is not so to com- by minimis maxim. application partmentalize business, of the de the defendant’s rejected might, perhaps, con- defense. It this Nevertheless solely with the de- rested its decision that its have proposition tends applica- fendant-appellee not exclude does that McKesson & Robbins exculpatory provisions of the a wholesaler because it did “whole- was tion Miller-Tydings selling or, alternatively, Acts be- and McGuire sale” that it was manufacturer, not on the wholesaler than a same a more cause argues agree- It hence its level.” “functional gen- ejusdem were “between rule of ments wholesalers.” application But said, sense. itself is rationale. The word “functional” so limit it did not precise meaning pages 312-313, and it does not 76 S.Ct. U.S. at significance page 942: seem to have clear word either case. In neither case is the might “Any other- doubts defined and it well have been used propriety raised to the wise be as “categories in contradistinction to or la considering manufacturer- bels” to broaden construction of are dis- wholesaler as a ‘wholesaler’ “competition” beyond that between busi pro- pelled by phrase of the the last nesses the same nomenclature. In question, viso in which continues deed, interpretation keeping is in against price-fixing proscription admonition, with the to be considered firms, persons, ‘between fully later, exemption more ac corporations Congress Miller-Tydings corded Congress thus made each other.’ and McGuire Acts from ban of the that, plain words can make it narrowly Antitrust Acts is to be con regard categories or la- without long quotation strued. As we read the bels, inquiry whether the crucial from the McKesson & *5 case Robbins contracting compete parties “categories above, our labels” are not the they do, Mil- If each other. inquiry.” “crucial What determina ler-Tydings do and McGuire Acts contracting parties tive is “whether the prices.” permit not them fix resale compete parties with each other.” The It is true that the Court then went appeal, before us on this as we have say Schweg- in that it had been said shown, competing are in a real sense Corp., mann Bros. v. Calvert 341 with each other for not the business of a 384, 389, 71 L.Ed. S.Ct. type insubstantial class or “ of consumers language statutory ‘ex- that the gasoline. Although techniques of their pressly prohibitions continues the of the doing differ, they of business none against price “horizontal” Sherman Act competitors, ap theless and this excludes fixing by competition in each those plication exemption of the from anti ” level,’ other at the same functional and legislation. trust followed this appellee competes the statement: “Since short, In ‘at the same functional we think the Antitrust Acts pres- 94 wholesalers not much level’ with each so concerned with the agree- price-fixing competition performing with whom it has ervation of in agree- given ments, prevents proviso they these functions as such are with falling preserving statutory ments from exemption.” within consumers the benefits page And 315 U.S. on which result from page 943, particular S.Ct. L.Ed. different businesses to serve a opinion its McKesson the Court said And consumer need. we do not think proviso ques- Congress Miller-Tydings that “the in the and unambiguous” tion is and “excludes from McGuire Acts intended to limit or re- exemption major from the se rule of strict full achievement illegality resale maintenance con- concern. competing tracts between firms appellant But the contends that even functional level.” same though there is between the Supreme parties extent, Thus the Court in the to a limited nevertheless case, injunctive McKesson & Robbins in the it is entitled to separate relief as to the Bros, Schwegmann case, made several class of business for which it actually references to direct “on and the defendant do potentially compete. functional level.” But from say, same ing read That is to opinions in both car is in that it is contends entitled to enforce Supreme respect think the entireties we maintenance with Court sale using phrase separable portion instance was each defendant’s descriptive rather than a compete, as to which it does restrictive trade suggested e., ordinary relatively gas- appeal retail sales fense i. on this ordinary small run of amounts to the oline cannot Mil- be under the fair-traded ler-Tydings

motorists. Acts McGuire because commodity bears, is not “a or the sug- appellant did not make bears, label container of which gestion Thus there court below. trademark, pro- brand, or name” unexplored practical well be diffi- ducer. culties, if not local difficulties under judgment statutes, inexpe- affirming would render it which grant A will be entered judgment partial dient to relief asked the District Court. prevent for. sidering from con- This does not us ALDRICH, Judge, however, District suggestion, concurs hearing. the result. we could remand for further But course for we shall not take that Rehearing On Petition for permits we do not think the statute partial requested. WOODBURY, Judge. Circuit grant authority No is cited for majority opinion of the court relief, possibility limited granting Judge and also in ALDRICH’S concur- relief is not mentioned in such ring opinion it is stated substance that has come to our atten- case which did not ask the Nevertheless, tion. it can said that injunctive court below for relief limited Miller-Tydings amend- McGuire separate to the class business for it, specifically ments do not forbid defendant-appellee and the many situations in which whole- *6 potential competi- not either actual or general are in salers and retailers in petition rehearing On tion. this for large accounts, competition for to allow plaintiff-appellant actually asserts that it partial requested of the sort would did ask the court below for such limited purpose of effectuate avowed it, relief and that the court denied and it permit price to amendment maintenance points typewritten to the transcript to goods as brand trade marked or named to prove its assertion. For relief it asks prevent destructive cutthroat order to opinions amend us to our to conform to competition and cure to the evils attend- the fact thus established and for leave by upon ant the use some retailers appendix to add to the record to its brief accept the “loss leaders.” We cannot by printing supplement as a thereto the however, argument, in view of the strict- portions typewritten record on the amendments were ness with which it relies. Bros, Schwegmann case, construed in the McKesson & Robbins and also in the 24(1), U.S.C.A., Our Rule 28 case, at the conclusion wherein permitting appellants proceed to on rec page 316, opinion, 351 on Court’s U.S. appendices ord to requires their briefs 1209, page 100 L.Ed. 76 S.Ct. on entries, charge that relevant docket “Congress limi- has marked the is said: judgment below, or matters, and certain other fixing beyond which cannot tations printed therein, and also go. not bound those We are parts record, “such other material to con- we bound limitations but questions presented, to the appel as the strictly, since resale strue them petitioner lant deems it essential for privilege is a restrictive of judges of the court to read in order conclusion, economy.” Our there- a free fore, questions.” to decide those Certainly any competition for cus- is that whether asked the- price; bar to main- an absolute tomers is injunctive for District Court the limited com- tenance appeal relief which is asserted on it was petitors. to is plaintiff- entitled material. The unnecessary appellant should, renders conclusion printed This therefore have original appendix any of the other defenses consideration in its the matter which print and of the additional de- now asks for leave below to raised sup- other,” persons plement. we if wish with each we free While might application original in the which for the made call to record scan the obliga- generis ejusdem com below, the rule of limit to we are not under court levels, through volu- to horizontal often so-called to thumb tion “persons,” persons.” appel- an reads “other not record to whether minous see agree appendix approval print Hence it withholds ments, failed to lant has law, express operation part to of it material to his brief some ap- competitors. presents questions us on between all If there to he history interpretation duty appendix doubt of peal. Were that our purpose Act, point. and the system of the Sherman or no have little would print duty fact to carve appellant’s his McGuire’s intent to is the appendix thereto, supply exceptions parts limited would record es- competi True, the answer. since most in order decide to read for us sential levels, par presents, tion is on if he horizontal courts questions fails he naturally coming so, ticular fall into the be- cases runs risk of he to do terminology. But, appel inadequate use record on court an fore this suggests Act, lant the Sherman appeal. Times-Picayune Publishing quoting from However, disposed to be leni- we are States, Co. United at case, particular for even in this ent page page 884, controlling S.Ct. though we did accord “* * * L.Ed. the Act deals significance appellant’s failure to realities, competitive words.” injunc- limited for the court below ask here, If bona fide I see exists relief, which we assumed tive restricting no basis for appendix be the brief to record the statute. why reason fact, no nevertheless see we pe- in this asks for the relief grant- rehearing not be should for tition Competition many meanings. has may ap- fact that the actual ed the end a sense the movie house and the televi- court. pear of this the records are in sion retailer with each granted plaintiff-appel- to the Leave other the “amusement dollar.” But *7 appen- supplemental record file lant to commodity, gasoline, here the essential is in form submitted brief to its servicing, dix etc., may same. The be rehearing, and petition for an or- with fringe. only the If owners of fleets of denying the be entered der will or trucks taxicabs be in influenced rehearing. purchasing gasoline from choice appellant appellee question or Judge (concur- ALDRICH, District price, “persons I believe the latter are result). ring in the * * * competition in with each oth- Judge opin- in WOODBURY’S I concur say er” within the Act. I can not rehearing. However, now that it ion appears finding they plain- below that are is appellant the mat- did raise wrong. ly parties But if the are thus injunctive below, partial I ter of persons competition in it is because up squarely to that face more I must feel appellee’s distinguish- unusual activities my Upon consideration further issue. prior ing it from other retailers whose busi- concurring opinion is now with- is less extensive. If ness those activities following toto, and the observa- drawn truly severable, arguable it seems substituted. tions appellant’s injunction to bar quarrel the view equally appellant that the not should be I do If so. manu- “persons factured, parties fair-traded, gasoline both not, Act does toothpaste, appellee The McGuire both, each other.” sold argument, appellant's exempt contrary parties actually competi- but were trade permissible former, fair tion say as to the I could not “producers, they persons between wholesal- were contracts as to retailers, brokers, factors, ers, other both. rights suggest However, appellant’s I appellee’s

here are lost not because per- special them activities made competition, its own

sons in but because Agree- activities made it a retailer. protect- between retailers are

ments supplies The no definition ed. statute supplies dictionary two: retailer. quantities, and one

one who sells in small Of who sells to the ultimate consumer. keep- more

these the latter seems the

ing concept Fair Trade clearly appellant's “com-

acts. covers

mercial accounts.” retailing would

Either complete relief denial

result

appellant, must be fatal second partial one be even relief. It would

to thing separa- say respect to that with parties were as to which the ble activities they “persons competing

not competition It would with each other.” appellant say if quite another escape aas retailer it can be classed part, Act, force of the even something showing additional. Price-fixing agreements retail- irrespective per se, invalid

ers are competition. On this basis there

area of possible partial

could be no issue

lief. *8 America,

UNITED STATES Appellee, LENNON, Defendant-Appellant.

Acy 255-256,Dockets

Nos. 24411-24412. Appeal States Court of

United s Second Circuit.

Argued March 1957. 12, 1957.

DecidedJune