Again, in Klors, the Court said, 359 U.S. at pages 212-213, 79 S. Ct. at page 709:
'* * * This is not a case of a single trader refusing to deal with another, nor even of a manufacturer and a dealer agreeing to an exclusive distributorship. Alleged in this complaint is a wide combination consisting of manufacturers, distributors and a retailer.'
In United States v. Bitz, supra, 179 F.Supp. at page 86, Judge Dimock said of the first of these two sentences:
'* * * Thus I must assume that it would be lawful for the publisher of a magazine to allot to a wholesaler an exclusive distributorship in Nassau and Suffolk Counties.'
Any seeming application of the second sentence quoted is negated by a realization of the facts in Klors. Thus, in that case it was alleged that ten national manufacturers and their distributors conspired with Broadway-Hale Stores not to sell to the plaintiff, in violation of the anti-trust laws. This distinction limits any application of the holding of Klors as such to this case, which involves but one manufacturer.
In the field of automobile distribution Chief Judge Thomsen in the Schwing case, supra (138 F.Supp. 903), said:
'* * * An exclusive agency or dealership necessarily involves a limited monopoly to sell the product of the manufacturer in the area covered by the exclusive agreement.',
and stated in effect that not all exclusive agency agreements are illegal per se.
The alleged system of distribution here in issue contains at least one and possibly two additional steps in that the product passes from the German manufacturer (VW) to its exclusive importer (VOA), to the distributor (e.g. World-Wide) and then to the retail dealer (e.g. plaintiff). In Schwing and Packard the marketing channel ran directly from manufacturer to the dealer. Nevertheless I am not persuaded that this system constitutes a per se violation of Section 1 of the Sherman Act. Therefore, the allegation of public injury is necessary. Its omission is fatal under the cases cited. As it now stands this cause of action alleges only a refusal to deal for which in this context the antitrust law provides no remedy. The motion to dismiss the eighth cause of action for failure to state a claim will be granted.
The ninth cause of action alleges a violation of the Wilson Tariff Act of 1894, as follows:
'As and for a Ninth Cause of Action Title 15 § 8 U.S.C.A.
'91. Plaintiff repeats, reiterates and realleges each and every allegation of the complaint herein designated and numbered 1 to 37 inclusive and 47, 67, 75, 77, 78, 79, 80, 81, 82, 86, 87 and 88 of the complaint herein with the same full force and effect as though herein fully set forth at length.
'92. That by reason of the aforesaid and pursuant to the provisions of the Anti-trust Laws of the United States (Title 15 § 15 U.S.C.A.), plaintiff is entitled to recover three-fold the damages sustained by it hereunder, together with reasonable attorney's fees.'
The Wilson Tariff Act reads:
' § 8. Trusts in restraint of import trade illegal; penalty
'Every combination, conspiracy, trust, agreement, or contract is declared to be contrary to public policy, illegal, and void when the same is made by or between two or more persons or corporations, either of whom, as agent or principal, is engaged in importing any article from any foreign country into the United States, and when such combination, conspiracy, trust, agreement, or contract is intended to operate in restraint of lawful trade, or free competition, in lawful trade or commerce, or to increase the market price in any part of the United States of any article or articles imported or intended to be imported into the United States, or of any manufacture into which such imported article enters or is intended to enter. Every person who shall be engaged in the importation of goods or any commodity from any foreign country in violation of this section, or who shall combine or conspire with another to violate the same, is guilty of a misdemeanor, and on conviction thereof in any court of the United States such person shall be fined in a sum not less than $ 100 and not exceeding $ 5,000, and shall be further punished by imprisonment, in the discretion of the court, for a term not less than three months nor exceeding twelve months.' 15 U.S.C.A. § 8.
Allegations 1 through 37 have already been summarized. Allegations 86 through 88 have been set out earlier. Allegation 47, in the third cause of action, avers that the defendants, except Fifth Avenue and Queensboro, are manufacturers within the terms of the Automobile Dealer Franchise Act, 15 U.S.C.A. § 1221. Allegation 67 incorporates by reference allegations 1 through 37 in the sixth cause of action and is duplicated in allegation 91 of this cause of action. Allegation 75, in the seventh cause of action, avers that the defendants, except Fifth Avenue and Queensboro, agreed that VW distributors would not handle foreign competitive products and would require their dealers to follow suit. Finally, allegations 77 through 82, also in the seventh cause of action, recount the plaintiff's refusal to meet that requirement and the defendants' failure to continue selling to it in view thereof, together with an averment that the plaintiff has thereby sustained damages in the amount of $ 500,000.
Examining these allegations in terms of the Wilson Tariff Act I find that the plaintiff has alleged two agreements, each among two more persons or corporations at least one of whom imports foreign products into the United States; and that both agreements are in violation of the anti-trust laws. The first of these is brought under Section 3 of the Clayton Act, and is directed at the defendants' alleged requirement that no distributor or dealer handle foreign competitive products. The second is bottomed on Section 1 of the Sherman Act, and alleges that by reason of an exclusive territory system of distribution no distributor will sell to any but a franchised dealer located within its own assigned area. These allegations formed the seventh and eighth causes of action, both of which are now out of the complaint as such. The allegations themselves of course survive by reason of their incorporation and are here treated as if set out at length in the ninth claim.
As such, however, they are still subject to the very objections which resulted in the granting of the defendants' motion to dismiss for failure to state a claim upon which relief could be granted. The Wilson Tariff Act requires, inter alia, the allegation of a violation of the anti-trust laws. But I have held that the allegations appearing herein and relied upon to meet that requirement do not state such a violation. That being so the plaintiff has failed to meet the standard imposed by the Act. Plaintiff has, therefore, failed to state a claim upon which relief can be granted. Defendants' motion to dismiss the ninth cause of action will, therefore, be granted.
An appropriate order should be submitted.