Hasbrouck v. Texaco, Inc.
Opinion of the Court
Eleven “independent” Texaco service station operators (appellants) charged their supplier, Texaco, Inc., (appellee), with price discrimination in violation of section 2(a) of the Robinson-Patman Act, 15 U.S.C. § 13(a). Treble damages were sought under section 4 of the Clayton Act, 15 U.S.C. § 15. The jury returned a verdict in appellants’ favor. The district court, concluding that the verdict had been infected by erroneous jury instructions, granted appellee’s motion for judgment notwithstanding the verdict (J.N. O.V.). We reverse and remand for a new trial. We affirm, however, as to two issues.
I.
FACTUAL AND PROCEDURAL BACKGROUND
Appellants’ grievances arise out of appellee’s gasoline pricing policy in the Spokane, Washington area during the years 1972-1979. While charging appellants uniform “Retailer Tankwagon” prices, appellee granted “distributor” discounts to two other area companies. Appellants alleged that, though nominally wholesalers, these companies increasingly became directly involved in retailing. Further, when they did not own the repurchasing outlet outright, these favored buyers allegedly passed on all or part, of the original price discount to the retailer. Injury to competition in the retail market is said to have resulted from this discriminatory pricing scheme.
Appellants requested and received jury instructions on proof of damages based on Fowler Manufacturing Co. v. Gorlick, 415 F.2d 1248 (9th Cir. 1969), cert. denied, 396 U.S. 1012, 90 S.Ct. 571, 24 L.Ed.2d 503 (1970). Fowler adopted the “automatic damages” rule in price discrimination cases, whereby minimum damages equal to the product of the illegal price differential times the quantity of plaintiff’s purchases can be inferred from proof of price discrimination alone. Relying on this inference, appellants chose not to introduce sufficient evidence from which a jury could estimate actual dollar losses resulting from diminished sales or narrowed profit margins. The jury apparently applied the Fowler rule as instructed.
Appellee moved for J.N.O.V. or a new trial. The court accepted appellee’s argument that the Fowler instructions were erroneous because Fowler either was distinguishable, had been overruled sub silentio, or was simply bad law. A preferred rule was found in cases requiring more rigorous proof of damages. See, e. g., Chrysler Credit Corp. v. J. Truett Payne, Inc., 607 F.2d 1133 (5th Cir. 1979), aff’d sub nom. J. Truett Payne Co. v. Chrysler Motors Corp., 451 U.S. 557, 101 S.Ct. 1923, 68 L.Ed.2d 442 (1981). Thus, because appellants had not met this higher standard of proof and admitted the extreme difficulty of meeting such a standard should Fowler not control, J.N.O.V. was granted. Numerous other grounds urged by appellee were rejected and the new trial alternative was conditionally denied. Appellant timely filed this appeal.
The Supreme Court affirmed J. Truett Payne during the pendency of this appeal. In doing so, the Court expressly rejected Fowler and the automatic damages theory. 101 S.Ct. at 1926-27 & 1927 n.2. Fowler clearly is no longer valid law in this circuit.
II.
THE EFFECT OF THE DEMISE OF FOWLER
J. Truett Payne confirms the trial court’s ultimate conclusion that the Fowler measure of damages should not be applied
We do not feel that Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 97 S.Ct. 690, 50 L.Ed.2d 701 (1977), or the Ninth Circuit cases relied upon by appellee, e. g., California Computer Products, Inc. v. International Business Machines Corp., 613 F.2d 727 (9th Cir. 1979); Rutledge v. Electric Hose & Rubber Co., 511 F.2d 668 (9th Cir. 1975), necessarily overruled sub silentio Fowler.
III.
THE SCOPE OF THE NEW TRIAL
The only question remaining is the scope of the new trial. Courts of appeal have broad discretion to grant new trials on all or only some issues. Gasoline Products Co. v. Champlin Refining Co., 283 U.S. 494, 51 S.Ct. 513, 75 L.Ed. 1188 (1931); Heckman v. Federal Press Co., 587 F.2d 612 (3d Cir. 1978); see also United Air Lines, Inc. v. Wiener, 286 F.2d 302 (9th Cir.), cert. denied, 366 U.S. 924, 81 S.Ct. 1352, 6 L.Ed.2d 384 (1961) (reversing a bifurcation order). In fashioning their orders these courts must keep in mind that the item to be retried must be “so distinct and separable from the others that a trial of it alone may be had without injustice.” Gasoline Products, supra, 283 U.S. at 500, 51 S.Ct. at 515.
We find that two of the issues decided below are sufficiently “distinct and separable” from the measure of damage question that, in the interest of judicial economy,' they may be presently disposed of without affecting the fairness of the contemplated new trial. The first issue involves the appellee’s claim of implied antitrust immunity for its pricing policies during the period of federal mandatory gasoline price ceilings. The trial court correctly rendered partial summary judgment against this claim. See Oahu Gas Service, Inc. v. Pacific Resources Inc., 460 F.Supp. 1359 (D. Hawaii 1978); Inter City Oil Corp. v. Murphy Oil Corp., [1976] 1 Trade Cases (CCH) 160, 948 (D.Minn. 1976); but see Evanson v. Union Oil Co., 4 En. Mngm’t (CCH) 126, 158 (D.Minn. 1979). The second issue involves the jury’s implicit finding that the sales in question occurred “in commerce,” a jurisdictional prerequisite to a Robinson-Patman claim. See Gulf Oil Corp. v. Copp Paving Co., 419 U.S. 186, 95 S.Ct. 392, 42 L.Ed.2d 378 (1974); 15 U.S.C. § 13(a). This jurisdictional issue is normally a fact question for the jury to resolve. E. g. Edward J. Sweeney & Sons, Inc. v. Texaco, Inc., 478 F.Supp. 243, 272-73 n.62 (E.D.Pa. 1979), aff’d, 637 F.2d 105 (3d Cir. 1980), cert. de
The appellants would have us affirm the jury’s finding of liability and remand on the measure of damages issue alone. We do not feel, however, that the determination of liability is fairly separable from the calculation of damages in a private antitrust action such as this one. See Alabama v. Blue Bird Body Co., 573 F.2d 309 (5th Cir. 1978) (noting the overlap between proof of injury for liability purposes and for damage calculation purposes under Clayton section 4). Accordingly, we remand for a new trial on both the issues of liability and amount of damages.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED IN PART.
. While we are aware that the Supreme Court relied upon Brunswick in deciding J. Truett Payne, we note that the Court also resorted to legislative history to buttress its conclusion. 101 S.Ct. at 1927. Appellants cannot be penalized simply for failure to read Brunswick as overruling Fowler sub silentio.
Reference
- Full Case Name
- Ricky HASBROUCK, d/b/a Rick's Texaco James O. Sills, d/b/a Jim's Springhill Texaco Service Alva N. Blue, d/b/a Blue's Texaco John W. Bevan, d/b/a Bevan's Texaco and Towing and Bevan's Northwood Texaco Ricky A. Rigg, d/b/a Five Mile Texaco Clifford N. Robinson, d/b/a Robinson's Freeway Texaco Gene C. Robinson, d/b/a Hillyard Texaco Albert E. Allen, d/b/a Van's Texaco Harold C. Hardwick, d/b/a Harold's Texaco Service & Towing Henry Rigg, d/b/a Hank's Texaco Vincent Lies, d/b/a Lie's Texaco & U-Haul Ralph O. Webber, d/b/a Webber's Auto Repair & Service Station v. TEXACO, INC., a foreign corporation
- Cited By
- 62 cases
- Status
- Published