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ELLIOTT & FRANTZ, INC. v. RAYGO INC.

June 14, 1974

ELLIOTT & FRANTZ, INC.
v.
RAYGO INC.



The opinion of the court was delivered by: HANNUM

 HANNUM, J.

 Plaintiff, Elliott & Frantz, Inc. (hereinafter referred to as E & F), brought this action against the defendant, RayGo Inc. (hereinafter referred to as RayGo) for damages claimed to have been sustained as a result of RayGo's alleged violations of Section 3 of the Clayton Act, 15 U.S.C. § 14, and Section 2 of the Sherman Act, 15 U.S.C. § 2.

 Presently before the Court is the Motion of the defendant, RayGo, for summary judgment pursuant to Rule 56(b) of the Federal Rules of Civil Procedure, 28 U.S.C.

 BACKGROUND

 RayGo is a Minnesota corporation which manufactures and sells heavy-duty construction equipment. *fn1" This equipment consists of self-propelled vibratory rollers and compactors which are used in the construction of highways, airports, dams, and similar projects. RayGo markets this equipment through independent distributors located throughout the country. The plaintiff, E & F, is one such independent distributor.

 On June 9, 1966, the parties entered into a written distributor agreement. *fn2" Paragraph 4 of the distributor agreement provides as follows:

 
In consideration of the rights granted in paragraph 1 of this Agreement, Distributor agrees not to sell or offer for sale in the territory covered by this Agreement equipment competitive to that manufactured by the Company. *fn3"

 A conflict arose between the parties in late 1970, and shortly thereafter RayGo terminated the distributor agreement. It is the nature of this conflict and the circumstances surrounding the termination which form the bases for the present action.

 CONTENTIONS

 E & F contend that in 1970 RayGo sought to enforce paragraph 4 of the distributor agreement (hereinafter referred to as paragraph 4) and that such enforcement constituted a violation of the antitrust laws. *fn4" E & F submits that the reason for the belated enforcement was that for the first time (in the fall of 1970) it was handling heavy-duty equipment which was in fact competitive with equipment manufactured by RayGo; *fn5" that when RayGo became aware of this fact, it sought to enforce paragraph 4; and that when threats of enforcement failed, termination followed. *fn6"

 The defendant, RayGo, denies attempted enforcement of paragraph 4; *fn7" however, it contends even assuming arguendo attempted enforcement, a manufacturer who refuses to deal with a distributor because the distributor promotes and sells competitive goods is clearly within his rights and such refusal does not run afoul of Section 3 of the Clayton Act. *fn8" RayGo further contends that where a claim does not fall within Section 3 of the Clayton Act, it follows that it cannot fall within the more narrow proscription of Section 2 of the Sherman Act. *fn9" In addition, RayGo contends that E & F has failed to state a claim under Section 2 of the Sherman Act because the Complaint fails to allege the relevant market; it fails to allege the activity monopolized; and it fails to allege defendant's control of the market. *fn10"

 DISCUSSION

 True it is that summary judgment is not favored in antitrust cases. Semke v. Enid Auto Dealers Ass'n, 456 F.2d 1361, 1371 (10th Cir. 1972). Rule 56(c) of the Fed. Rules Civ. Procedure mandates that summary judgment should be entered only when the pleadings, depositions, affidavits, and admissions filed in the case "show that there is no genuine issue as to any material fact and that the moving ...


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