Federal Circuits, 2nd Cir. (June 21, 1982)
Docket number: 81-7433
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U.S. Supreme Court - Continental Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690 (1962)
U.S. Supreme Court - Northern Pacific R. Co. v. United States, 356 U.S. 1 (1958)
U.S. Court of Appeals for the 2nd Cir. - Air Et Chaleur, S.A., Pierre Berger, Daniel Cauchie, Jacques W. Van de Velde, Plaintiffs-Appellees, v. Eliot Janeway, Defendant-Appellant., 757 F.2d 489 (2nd Cir. 1985) S.A., Pierre Berger, Daniel Cauchie, Jacques W. Van de Velde, Plaintiffs-Appellees, v. Eliot Janeway, Defendant-Appellant.
U.S. Court of Appeals for the 2nd Cir. - Brink'S Inc., Appellant, v. the City of New York, Appellee. Brink'S Inc., Appellant-Cross-Appellee, v. John Adams, Anthony de Nardo, Trevor Fairweather, Richard Florio, James Gargiulo, Michael Solomon, William J. Donovan, Francis Gitto, William Mcinerney, Anthony San Marco, James Springett, John Barrera and Joseph Nardo, Appellees, and Jorge Olivari, Ramon Hernandez, and Jose Rodriguez, Appellees-Cross-Appellants., 717 F.2d 700 (2nd Cir. 1983) Appellant, v. the City of New York, Appellee. Brink'S Inc., Appellant-Cross-Appellee, v. John Adams, Anthony de Nardo, Trevor Fairweather, Richard Florio, James Gargiulo, Michael Solomon, William J. Donovan, Francis Gitto, William Mcinerney, Anthony San Marco, James Springett, John Barrera and Joseph Nardo, Appellees, and Jorge Olivari, Ramon Hernandez, and Jose Rodriguez, Appellees-Cross-Appellants.
Stuart A. Jackson, New York City (Burns, Jackson, Summit, Rovins & Spitzer, Michael G. Shannon, New York City, of counsel), for plaintiff-appellant.
Stephen M. Hudspeth, New York City (Lord, Day & Lord, Darrell E. Prescott, Douglas F. Broder, New York City, of counsel), for defendant-appellee.Before MOORE and NEWMAN, Circuit Judges; GRIESA,* District Judge.MOORE, Circuit Judge:Unijax, Inc. ("Unijax") appeals from a judgment of the United States District Court for the Southern District of New York, 516 F.Supp. 941, Honorable Robert L. Carter, Judge, granting Champion International, Inc.'s ("Champion") motion for judgment notwithstanding the verdict ("judgment n. o. v."). Unijax, a wholesale fine paper distributor,1 charged in its complaint that during 1975, 1976 and 1977, Champion, a manufacturer of fine paper products, violated Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 and 2 (1976), and Section 3 of the Clayton Act, 15 U.S.C. § 14 (1976), by imposing upon certain Unijax branches exclusive dealing agreements and by conditioning the sale of its coated printing paper, known as Kromekote, on the purchase of other Champion commodity uncoated paper.2 Unijax's complaint also alleged that Champion maliciously interfered with an existing contractual agreement and prospective business relations between Unijax and one of its principal customers, in violation of Tennessee law.The case was bifurcated for trial on the issues of liability and damages and went to trial before a jury from December, 1979 to January, 1980. After a trial on the issue of liability, the jury found that Champion had coerced Unijax to enter into a tying arrangement, in violation of Section 3 of the Clayton Act,3 and had tortiously interfered with an existing contractual agreement and prospective business between Unijax and one of its principal customers, Holiday Press. The jury also found that Unijax failed to establish that Champion forced it to participate in exclusive dealership agreements.4Champion moved for judgment n. o. v. on the antitrust and common law claims and on the issues of damages. Unijax moved for judgment n. o. v. on the jury's verdict that it failed to demonstrate foreclosure of a not insubstantial amount of commerce in the tied products and on other elements of the jury's liability verdict.After carefully reviewing the record, which included extensive post-trial briefs in support of, and in opposition to, motions for judgment n. o. v.,5 the district court granted Champion's motion,6 dismissing with prejudice Unijax's antitrust claim and common law tort claim of interference with prospective business advantage.7 Judge Carter concluded that there was no evidence that Champion required or coerced Unijax to purchase other grades of Champion paper as a condition to receiving the Kromekote grade of coated papers,8 or that Champion, motivated by malice, actively sought the business of Holiday Press. Accordingly, Judge Carter set aside the jury's award to Unijax on its antitrust claim and on its claim of tortious interference with prospective business advantage.On appeal, Unijax contends that the evidence was sufficient to permit reasonable jurors to find that Champion had impermissibly tied sales of a grade of fine coated paper, the Kromekote grade, to the purchase of other Champion coated and uncoated paper grades, in violation of Section 3 of the Clayton Act, and that Champion had tortiously interfered with prospective business between Unijax and one of its principal customers, in violation of Tennessee law. We reject Unijax's contentions and hold that Judge Carter correctly concluded that even when the evidence is viewed in the light most favorable to Unijax, a reasonable juror could not find that these allegations had been proved. Accordingly, we find that the district court did not err in granting Champion's motion for judgment n. o. v., and for the reasons set forth below, we affirm.FACTS ADDUCED AT TRIALIn light of the trial court's holding that there was no proof of a tying arrangement, a somewhat brief review of the facts is necessary.Champion is a manufacturer of fine paper products. The company also distributes paper products through its division Nationwide Papers. Unijax is a wholesale fine paper distributor with branches in seventeen cities located primarily in the southeastern region of the United States. Unijax purchases and resells paper products manufactured by Champion and at least ten other companies.The two companies have maintained a long-standing business relationship. Unijax has distributed Champion papers for over forty years. From 1971 and 1976, however, the relationship between Champion and the Unijax branches in Florida and Georgia steadily deteriorated. Champion became dissatisfied with Unijax's performance in selling Champion products9 and believed that Unijax was either unwilling or unable to improve its performance.Beginning in January, 1972, Earle Bensing, Champion's Sales Manager for the Atlanta District,10 met with Walter Moore, President and Chief Executive Officer of Unijax, and other Unijax personnel to discuss means of improving Unijax's performance in distributing Champion's products. In April, 1972, executives from the two companies, including Moore and Bensing, met at Champion's offices in Hamilton, Ohio, to discuss the continued deterioration in Unijax's performance and to establish a series of sales goals to assist in increasing Unijax's purchases of Champion products. These goals were never reached.In September, 1972, an internal memorandum written by John Fox, a Unijax Vice President, indicated that Unijax had not improved its performance. Moore feared that Champion would either appoint additional distributors or terminate some or all of Unijax's branches.The paper industry experienced a widespread paper shortage in the early months of 1972. Champion found it impossible to keep pace with demand, and was able to sell easily virtually every type of fine paper. In fact, Champion was forced to implement a system of allocations. As a result, its distributors, including Unijax, constantly requested supplemental allotments.During this period, Sales Manager Bensing, according to Moore, stated that Unijax ought to use its full allotment of the Javelin grade of coated paper which was also manufactured by Champion before it requested an additional allotment of the Kromekote grade of coated paper. At no time, however, did Champion condition its sales of Kromekote on Unijax's purchase of other Champion products. Toward the end of 1974, the paper shortage lessened, and Champion once again submitted critical performance reviews to Unijax. In March, 1975, Bensing sent a series of performance review letters to the distributors of Champion fine paper in his sales area. The letters to the Unijax branches in Florida and Georgia criticized their sales performance on all grades of paper, including the Kromekote grade.In 1975, Champion began doing business with another Florida distributor in an effort to increase paper sales in the area. During this year, Champion also refused Unijax's request to supply its products to the Unijax branch in Indianapolis. Champion informed Unijax when this decision was made that it would not service the Indianapolis branch because it already had established an adequate distribution system in Indianapolis.In September, 1975, certain other Unijax branches, including the five branches in Florida, received another set of review letters criticizing Unijax's poor performance in selling Champion products. The letters specifically criticized Unijax's failure to sell adequate amounts of the Kromekote grade. The letters do not suggest that Unijax needed to purchase other Champion paper products in order to obtain the Kromekote grade.On October 30, 1975, Bensing, in another attempt to encourage Unijax to purchase more Champion products, again met with Moore. Bensing informed him that Champion might cease supplying the Unijax branches in Miami and Tampa because of their poor performance. Bensing did not tell Unijax which grades to buy or attempt in any way to condition sales of the Kromekote grade. Moreover, Moore did not indicate that he wanted to purchase only the Kromekote grade. As Moore testified:"No one from Champion said it's to be Javelin or Javelin and Wedgewood or any particular grades, the quantities or anything else.Our own people decided what to stock and how much of that to put in. Our own people did that. They are the only people capable of doing that. They made those decisions.""He (Bensing) did not say you must buy Javelin, Wedgewood, or anything like that. I have never said that. We independently decided what to buy of the Champion products. I told my people to buy Champion products."Shortly thereafter, Moore issued a directive to the Unijax branches in Florida to increase their inventories of Champion paper. He did not ask the outlets, however, to buy more of any particular Champion grades. In the directive, Moore expressed concern about the possible loss of the Champion line if increased purchases of the company's products were not made.Throughout 1975, the performance of the Unijax branches in Florida remained poor. In January, 1976, Moore received a letter, in response to one from Moore, which catalogued Champion's criticisms of Unijax's performance during the previous four years. There is no mention in this letter of conditioning the sale of Kromekote on the sale of other paper grades.On February 17, 1976, Unijax's senior management officials, including Moore and Julian Humphries, the company's Executive Vice-President, met with officials from Champion. Mark Fuller of Champion hand delivered to Moore a letter dated February 13, 1976, informing Unijax of Champion's decision to terminate business as of June 1, 1976 with Unijax's distribution outlets in Miami, Tallahassee, Tampa, Orlando, Jacksonville, Macon, and Atlanta.11 There is no evidence that at this meeting, Champion conditioned the further supply of any of its products to these branches on Unijax's purchase of other Champion coated or uncoated paper grades.After Champion terminated sales to these branches, Unijax issued instructions to its non-terminated branches to buy more Champion paper products. No evidence exists, however, that this action was prompted by threats from Champion that it would condition the sale of the Kromekote grade on the purchase of other grades of paper, or that Unijax ever sought to purchase only the Kromekote grade from Champion.In March, 1976, Fuller met with Moore at the latter's request. Moore orally agreed not to sue Champion in connection with the five Florida terminations and agreed not to halt Unijax's purchases of envelope paper from Champion. Moore specifically requested that Champion continue supplying Unijax's Atlanta and Macon branches. Kromekote was not mentioned at this meeting.In April, 1976, senior officials from both companies, including Moore, Fuller, and Bensing, met at the Champion district sales office in Atlanta to discuss a sales plan for the Unijax branches in Atlanta and Macon. According to Moore's testimony, the parties agreed upon sales goals for Unijax and placed the Atlanta and Macon branches on a trial basis for one year. There was no reference at this meeting to the possibility of Champion withholding the Kromekote grade from Unijax. In fact, the sales goals had included specific goals for the Kromekote grade.Unijax contends that after the Florida terminations, its non-terminated branches bought paper from Champion that they otherwise would not have purchased. Moore testified that Unijax was very much interested in obtaining the Kromekote grade of coated papers and that increased purchases of Champion products were intended to insure that the supply of the Kromekote grade would not be discontinued. Thus, Moore instructed his regional general managers to purchase paper from Champion rather than other suppliers unless ordered by the customer to do otherwise.Although each Unijax branch made its own purchasing decisions, Unijax failed to present the testimony of managers or salesmen from the branches where the allegedly tied purchases were made. By contrast, testimony from William Chable, Champion's Atlanta District Sales Manager, and Peter Wittman, a Champion sales representative who regularly visited several of Unijax's branches in the Atlanta District, indicates that increased purchases were made to satisfy customer specifications for Champion products, to fill state bids on which Unijax had requested Champion's participation, and, in at least one case, to supply Unijax after default by another supplier.A few additional facts relevant only to Unijax's common law claim of tortious interference with prospective business advantage need be discussed. In 1976, Franklin Ray, a fine paper salesman employed by the Unijax branch in Memphis, Tennessee, became dissatisfied with the company and decided to seek a new employer. On August 18, 1976, Ray tendered his resignation to the sales manager of the Memphis branch.At the time of Ray's departure, Unijax's Memphis branch had an order from Holiday Press, one of its principal customers, for the purchase of Armour Web, a line of fine paper manufactured by Champion. On the day of his departure, Ray instructed Lloyd Scott Barnard, Champion's district manager in St. Louis, to cancel the order for the Armour Web grade placed with Champion by Unijax on behalf of Holiday Press.Shortly thereafter, Nationwide Papers ("Nationwide"), a division of Champion engaged in the distribution of paper products, hired Ray. Champion had never granted Unijax an exclusive right to sell Champion paper products in the Memphis region, and Nationwide sought to increase its accounts in this area. As a Nationwide employee, Ray obtained the business of many accounts that he had served while an employee of the Unijax branch in Memphis. In fact, Ray placed an order for the Armour Web grade for Holiday Press through Nationwide identical to the order which he had cancelled on August 18.DISCUSSIONIn evaluating Unijax's claim that it presented sufficient evidence to support the jury's verdict, we exercise only a narrow scope of review. We may not weigh conflicting evidence, judge the credibility of witnesses, or substitute our judgment for that of the jury. Rather, we are bound to view the evidence, including all reasonable inferences to be drawn therefrom, in the light most favorable to the prevailing party, even though contrary inferences might reasonably be drawn. See, e.g., Continental Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690, 696, 82 S.Ct. 1404, 1409, 8 L.Ed.2d 777 (1962); Michelman v. Clark-Schwebel Fiber Glass Corp., 534 F.2d 1036, 1042 (2d Cir.), cert. denied,Try vLex for FREE for 3 days
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