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Gold Fuel Service Inc. v. Esso Standard Oil Co.

filed: July 24, 1962.


Author: Hastie

Before BIGGS, Chief Judge and McLAUGHLIN and HASTIE, Circuit Judges.

Opinion of the Court

HASTIE, Circuit Judge: This appeal has been taken from an order granting summary judgment for the defendant in a civil antitrust suit. The appellant, Gold Fuel Service, Inc., had sued Esso Standard Oil Co. for damages said to have been caused by the illegal action of Esso in the course of the competition of the parties to sell fuel oil to two associated enterprises, Cooper Alloy Corp. and Stainless Engineering and Machine Works, which we shall designate together as Cooper-Stainless.

Appellant predicates its claim upon three separate provisions of the federal statutes. Its first contention is that a civil cause for violation of an "antitrust law" arises out of Esso's sale of fuel oil in competition with appellant at an unreasonably low price in violation of Section 3 of the Robinson-Patman Act, 15 U.S.C. § 13a. However, as a matter of law the contention that a civil antitrust claim can arise in this way is contrary to the holding of the Supreme Court in Nashville Milk Co. v. Carnation Co., 1958, 355 U.S. 373. Therefore, an inferior federal court must reject this theory of liability.

Appellant also asserts conventional claims under Section 1 and Section 2 of the Sherman Act, 15 U.S.C. §§ 1, 2. Under Section 1, it is alleged that Esso conspired with other producers of fuel oil to fix prices for the direct sale of fuel oil to Cooper-Stainless and thereby to deprive Gold Fuel of its principal customer, all in restraint of interstate commerce. Under Section 2, it is contended that Esso alone undertook to eliminate the competition of Gold Fuel in an attempt to monopolize an area of interstate commerce.

We first consider the state of the record with reference to the conspiracy claim under Section 1. The complaint alleged in general terms that Esso and other producers agreed to fix the prices of fuel oil they offered Cooper-Stainless at levels below those at which Gold Fuel, an independent distributor and middleman, which long had supplied the needs of Cooper-Stainless, could buy and deliver the commodity. Gold Fuel's position was made more explicit in its answer to Esso's demand that the amended complaint be made more definite. In that submission Gold Fuel said:

"At the time that Esso submitted its bid to the consumers Cooper and Stainless at a price lower than that at which the plaintiff distributor was able to purchase for resale to Cooper and Stainless, two other major suppliers, Cities Service Oil Company and Sinclair Refining Company, submitted bids to Cooper and Stainless, at prices which were also lower than that at which the plaintiff was able to purchase for resale to Cooper and Stainless. It is the contention of the plaintiff that the parallel actions of Cities Service, Sinclair and Esso purposefully coincided and were the result of prearrangement and understanding by and among Esso, Cities Service and Sinclair, and thus was the result of a combination and conspiracy among them to restrain the trade of the plaintiff with Cooper and Stainless."

Thereafter, Esso moved for summary judgment, supporting its motion with several affidavits. Particularly noteworthy are the affidavits of senior officers of the consumer Cooper-Stainless to the effect that, dissatisfied with Gold Fuel's prices, Cooper-Stainless had invited Esso and others to bid on its requirements and that Esso had responded with a bid of 10.38 cents per gallon for No. 2 fuel oil in the large quantities required by Cooper-Stainless, as contrasted with a bid of 11.4 cents per gallon by Gold Fuel and 10.2 cents by a rival producer. One affiant, who was the purchasing agent of Cooper-Stainless, also deposed that he asked Esso to meet the low 10.2 cents bid, that Esso agreed to this proposal and that the contract was then awarded to it. In addition, one of Esso's affidavits was supported by a document sworn to be a true copy of Esso's actual original bid as submitted to Cooper-Stainless. This bid read in part as follows:

"We would propose to deliver to your Hillside plant Esso Heating Oil Medium (:2 fuel oil) in tank transport quantities of approximately 4600 gallons. Deliveries in such quantities would be billed at the posted price in effect on date of delivery - exclusive of any applicable taxes - f.o.b. our Linden terminal. For your reference, today's price of Esso heat Medium is 10.05 per gallon, f.o.b. Linden, with current freight at .33 per gallon; thus your total delivered cost today would be 10.38 per gallon."

Gold Fuel's own affidavit in opposition to the granting of summary judgment recognized that Esso's bid of 10.38 cents was in fact based on its fluctuating daily posted prices and that these prices were open offerings to the trade published in a trade paper, the Journal of Commerce. Gold Fuel's affidavit also conceded that the posted price was an f. o. b. price and that a supplier would normally charge an additional .33 per gallon as a delivery charge.

In March 1960, Judge Morrill heard the parties on the motion for summary judgment. The record of that hearing shows the following colloquy between the court and counsel for Gold Fuel:

"THE COURT: . . . if this case is a blank stab in the dark with the idea that 'maybe I will find something if I get a lot of information from the other side and then it will all relate back to the suit I brought' that is one thing; if it is brought in good faith because you have a basis for something, and want to interrogate further under discovery procedure, that is perfectly all right.

"MR. WEISS: Well, sir, we have at best a meager basis in fact or, in fact, -

"THE COURT: What do you say about the conscious parallelism doctrine, what have ...

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