Plaintiffs, Hyman and Joshua Marder, father and son, are manufacturers' representatives. Conwed Corporation is a manufacturer of space dividers. The complaint alleges that in January 1969 plaintiffs were appointed Conwed's representatives in a certain territory along a portion of the eastern seaboard. After a time, one Bernard Vail became a partner with plaintiffs. Vail's role was to concentrate on governmental accounts. The Marder-Vail partnership procured a contract between the General Services Administration of the United States Government and General Office Furniture Wholesalers, Inc., which contract provided for the use of Conwed's mobile space dividers. Marder-Vail was to be paid a commission on all sales by Conwed to General Office Furniture Wholesalers, Inc., which contract provided for the use of Conwed's mobile space dividers. Marder-Vail was to be paid a commission on all sale by Conwed to General Office Furniture Wholesalers, Inc. under that contract. In December 1971 the Marders and Vail separated, Vail agreeing that the Marders would keep all business obtained prior to the dissolution. In late December 1971 the Marders were advised by Conwed that as of January 23, 1972 they would no longer represent Conwed and that no commissions would be paid on orders booked after that date. The Marders were further advised by Conwed that they would be permitted to continue to represent Conwed after that date on commercial lines only, and only upon condition that the Marders release Conwed from its existing obligations to pay commissions on the government contracts. Marders charge that prior to Vail's departure from the partnership, he and Conwed conspired to cause the dissolution of the partnership, and thereafter Vail would represent Conwed and receive the commissions due under the government contracts.
The complaint is in three counts. The first two counts are for breach of contract, with jurisdiction based on diversity of citizenship and the requisite amount. Those counts are not here disputed. The third count charges that Vail and Conwed conspired to eliminate the Marders as a competitor, causing an unreasonable interference with interstate commerce in violation of the antitrust laws. Conwed has moved to dismiss the third count for failure to state a claim under the antitrust laws. The motion will be granted.
At most, the third count of the complaint charges a conspiracy between a manufacturer (Conwed) and one representative (Vail) to substitute Vail for the existing representative (Marders). In my view, this case is indistinguishable from the distributorship cases such as Ark Dental Supply Co. v. Cavitron, 323 F. Supp. 1145 (E.D. Pa. 1971), aff'd per curiam, 461 F.2d 1093 (3d Cir. 1972); Seagram & Sons, Inc. v. Hawaiian Oke & Liquors, Ltd., 416 F.2d 71 (9th Cir. 1969), cert. denied, 396 U.S. 1062, 24 L. Ed. 2d 755, 90 S. Ct. 752, reh. denied, 397 U.S. 1003, 90 S. Ct. 1113, 25 L. Ed. 2d 415 (1970); Ace Beer Distributors, Inc. v. Kohn, Inc., 318 F.2d 283 (6th Cir.), cert. denied, 375 U.S. 922, 11 L. Ed. 2d 166, 84 S. Ct. 267 (1963). These cases establish "that a single manufacturer or seller can ordinarily stop doing business with A and transfer his business to B and that such a transfer is valid even though B may have solicited the transfer and even though the seller and B may have agreed prior to the seller's termination of A." Ark Dental, supra, 461 F.2d at 1094. The reason that a manufacturer's decision to replace his distributor or representative is not violative of the antitrust laws was explained by the court in Ace Beer:
"A refusal to deal becomes illegal under the Act only when it produces an unreasonable restraint of trade, such as price fixing, elimination of competition or the creation of a monopoly. The fact that a refusal to deal with a particular buyer without more, may have an adverse effect upon the buyer's business does not make the refusal to deal a violation of the Sherman Act. Damage alone does not constitute liability under the Act.
[In this case] the Stroh Brewery Company had one distributor in the territory under consideration before it terminated the plaintiff's franchise. It continued to have only one distributor thereafter. There is no allegation or contention that the beer of other breweries was not just as available in that area after the change in distributors as it was before . . . the substitution of one distributor for another in a competitive market of the kind herein involved does not eliminate or materially diminish the existing competition of distributors of other beers, is not an unusual business procedure, and in our opinion, is not an unreasonable restraint of trade." 318 F.2d at 287 (citations omitted)