The opinion of the court was delivered by: DUSEN
This case, currently before the court on defendant's Motion to Dismiss under Rule 12(b), Fed.Rules Civ.Proc. 28 U.A.C.A., involves a suit by plaintiffs, members of an unincorporated association of Philadelphia wholesale fruit merchants, against defendant, a New Jersey corporation engaged in the business of auctioning such fruit in Philadelphia. The complaint is founded on certain provisions of the federal anti-trust laws and also on general provisions of the law of fraudulent misrepresentation and restitution as they relate to business transactions, particularly where there is business coercion.
Under the provisions of Rule 12(b), all well pleaded facts averred in the complaint must be taken as admitted for the purposes of the disposition of defendant's motion.
In addition, an affidavit and depositions with exhibits have been filed by the parties, and will also be considered by the court in the decision of the matter at hand.
The complaint in this action is divided into three 'Counts,' which will be considered separately.
Count I alleges certain violations by the defendant of Section 1 and 2 of the Sherman Anti-Trust Act
and of the Robinson-Patman Act's amendment to Section 2 of the Clayton Anti-Trust Act.
Factually, this count alleges that plaintiffs' members purchase fruit coming to Philadelphia from other states through defendant; that the defendant is engaged in the fruit auction business in Philadelphia and handles fruit coming from other states;
that defendant handles almost all fresh fruit coming to the Philadelphia market, which includes areas in Pennsylvania, New Jersey and Delaware,
in less than carload lots; that these sales are made by defendant by arrangement with the growers, shippers and consignees of said fruit; and that defendant is paid a commission by these sellers for its services
(Complaint, paragraphs 1 through 3).
The fruit allegedly comes from all over the United States to a point of distribution in Philadelphia and the depositions show that it passes through the facilities of the defendant to several states on the eastern seaboard (D. 63 ff.). The defendant's operation, if as asserted, is an important link in a chain of commerce. Thus, under the notice type pleading prevailing in federal practice, these paragraphs of the complaint contain satisfactory allegations of the interstate character of the defendant's business.
Also, the record indicates that defendant, without the consent of plaintiffs, levied against, and accepted from, the plaintiffs as buyers a separate charge;
that defendant rendered no services to plaintiffs, but, on the contrary, rendered all its services to the growers, shippers and consignees for whom it sold (Complaint, paragraph 4).
These allegations, if true, constitute a violation of the Robinson-Patman amendment to Section 2 of the Clayton Anti-Trust Act,
since they show that the defendant is not performing its services for the plaintiffs as buyers at auction.
The complaint continues that defendant sells, by arrangements with growers, shippers and consignees,
substantially all fresh fruit arriving in Philadelphia by rail in less than carload lots; that by virtue of this fact, defendant controlled the free flow of commerce in such fruits, monopolized the market,
and was thus enabled to exact the aforementioned separate charge from plaintiffs; that such conduct contravened Sections 1 and 2 of the Sherman Anti-Trust Act, 15 U.S.C.A. §§ 1 & 2; and that, by virtue of such conduct, plaintiffs sustained substantial damage.
The record now before the court makes it appear most unlikely that there has been any violation of 15 U.S.C.A. §§ 1 & 2. Cf., for example, Standard Oil Co. v. F.T.C., 1951, 340 U.S. 231, 248-249, 71 S. Ct. 240, 95 L. Ed. 239; Lawlor v. National Screen Corp., 3 Cir., 238 F.2d 59. However, the plaintiffs are entitled to go to trial on the alleged violation of 15 U.S.C.A. § 13(c), so that Count I may not be dismissed at this time.
At the time of the pre-trial conference or at the start of the trial, a motion may be made to limit Count I to the alleged violation of 15 U.S.C.A. § 13(c) on the basis of the record then before the court.
This count of the complaint is an action at law based on diversity of citizenship. The allegation therein contained is essentially one of fraudulent misrepresentation.
The plaintiffs assert that the defendant collected a terminal charge from the plaintiffs and asserted to the plaintiffs that the charge so collected was to be turned over to the railroads in payment of their unloading charges. However, plaintiffs assert that this charge was not remitted in its entirety to the railroads. Plaintiffs seek recovery of the moneys so collected and not remitted on the ground of defendant's alleged misrepresentation.
The complaint does not allege on what misrepresentations the plaintiffs are relying, when they were made, or whether they were oral or written.
F.R.Civ.P. rule 9(b) provides:
'In all averments of fraud * * *, the circumstances constituting fraud * * * shall be stated with particularity.'
The motion to dismiss filed by defendant will be considered as a motion for more definite statement under F.R.Civ.P. rule 12(e) and this count will be stricken unless it is amended by plaintiffs, within thirty days, to make ...