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UNITED STATES v. SUN OIL CO.

July 1, 1959

UNITED STATES of America
v.
SUN OIL COMPANY



The opinion of the court was delivered by: GANEY

This is an action brought by the United States to enjoin the defendant Sun Oil Company from conducting its business allegedly in violation of § 1 of the Sherman Act, 15 U.S.C.A. § 1, and § 3 of the Clayton Act, 15 U.S.C.A. § 14.

The complaint charges that for more than a quarter of a century the defendant has been unreasonably restraining interstate commerce and substantially lessening competition in a line of commerce by excluding its competitors from access to a substantial part of the market for petroleum products and automotive accessories in its marketing area. This has been and still is being accomplished, the complaint states, by defendant's inducing and coercing independent automotive service station operators to enter and operate under contracts, supplemented by agreements and understandings, having the purpose, intent and effect of requiring them to purchase petroleum products and automotive accessories exclusively from it, and to refrain from purchasing these products from its competitors. Defendant is not charged with acting in concert with any other supplier of one or more of those products; nor does the evidence adduced show that it has done so.

 From the evidence presented to it, the court makes the following

 Findings of Facts.

 1. Defendant Sun Oil Company, hereinafter called 'Sun', is a corporation organized and existing under the laws of New Jersey. It transacts and has its principal place of business at 1608 Walnut Street, philadelphia, Pennsylvania, within the Eastern District of Pennsylvania. Sun is known to the motoring public as 'Sunoco.'

 2. Sun is engaged in the business of producing, transporting, refining and marketing crude oil and petroleum products. It obtains and purchases crude oil in the principal oil producing fields of the United States and transports it to refineries owned by it at Marcus Hook, Pa., and at Toledo, Ohio. Among the principal petroleum products manufactured at these refineries are a single grade of gasoline, sold under the name 'Blue Sunoco' (and for a time as 'Sunoco Dynafuel'), motor oil sold under the trade names 'Sunoco Mercury Made' (classified as a regular grade oil) and 'Dynalube' (classified as a premium motor oil), and other automotive lubricants. *fn1" Sun transports, distributes and sells all of these products to over 6,500 independent service station operators in the Sun marketing area. It markets its petroleum products under the trade name 'Sunoco.' In order that it gasoline may be readily identified by the public, Sun colors it blue, and uses the color scheme of blue, white and yellow on its containers, dispensing equipment, signs and advertising matter, and service stations at which its gasoline is sold. It has adopted the symbols of the diamond superimposed upon an arrow as its identifying mark.

 3. Sun also sells a full line of automotive accessories, which, with a few exceptions, it purchases or receives on consignment from other suppliers. These accessories include equipment items and replacement parts which are capable of being installed or applied on automotive vehicles at a service station without major mechanical operations, such as tires, batteries, spark plugs, oil filters, fan belts, automobile polishes, waxes, lamp bulbs, seat covers, and antifreeze preparations. For convenience they are referred to as 'TBA' or 'tires, batteries and accessories.' The line of TBA which Sun purchases from manufacturers and distributors located in various states is also transported, distributed and sold by it in interstate commerce to more than 6,500 independent service station operators in Sun's marketing area. The manufacturers which supply Sun with TBA items do not sell their products directly to Sun dealers.

 4. Some of the principal TBA products which Sun purchases for resale to its dealers include: Kelly tires, from Kelly-Springfield Tire Co., Cumberland, Maryland; Sunoco batteries, from Globe-Union Inc., Milwaukee, Wisconsin; Fram oil filters, from Fram Corporation, East Providence, Rhode Island; and Champion spark plugs, from Champion Spark Plug Company, Toledo, Ohio; Zerone and Zerex anti-freeze, from E. I. duPont deNemours & Company, Wilmington, Delaware; Westinghouse sealed beam lights and miniature lamps from Westinghouse Electric Corporation, Philadelphia, Pa.

 5. Sun itself operates approximately only forty service stations throughout its marketing area. These stations, of course, sell Sun products exclusively and only the line of TBA sponsored by Sun. The attendants at these company-owned and operated stations, which are also used for training new Sun dealers, are employees or agents of Sun.

 6. For sales purposes, Sun has divided its marketing area, involving eighteen states and the District of Columbia, into six regions, roughly as follows:

 (a) Middle Atlantic Region -- comprising eastern Pennsylvania, the larger portion of New Jersey, a small portion of New York, and all of Maryland, Virginia and the District of Columbia;

 (b) New York Region -- comprising practically all of New York, and small portions of Pennsylvania, New Jersey, Connecticut, Massachusetts and Vermont;

 (c) New England Region -- comprising the New England States exception those portions included in the New York Region;

 (d) Central Region -- comprising western Pennsylvania, eastern Ohio, West Virginia, and a small ...


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