The opinion of the court was delivered by: TROUTMAN
In August 1980, plaintiff, Snyco, Inc., conveyed its liquid petroleum distributorship to defendant, D.J. Witman Co. (Witman) which received plaintiff's assets, accounts receivable, inventory, equipment, motor vehicles and customer lists. Under the agreement, plaintiff left the liquid petroleum market and agreed not to compete therein for a term of five years. The agreement further provided a specific formula which contemplated that the full "pay out" would not occur for twelve months. Problems between the parties subsequently developed and plaintiff instituted this action charging that Witman, along with its related corporate co-defendants, Penn Central Corporation, Buckeye Petrofuels Co. and Buckeye Pipeline Company, violated federal antitrust and security laws. Plaintiff also alleges that the agreement of sale was consummated through the use of fraud and with the intention of pursuing a conspiracy to gain monopoly power in the liquid petroleum business.
We turn now to plaintiff's antitrust allegations and defendants' motion to dismiss.
The complaint alleges that in furtherance of their illicit attempt to monopolize the retail petroleum market, defendants embarked upon an unlawful plan to eliminate potential competitors by acquiring them for prices below their fair market value. As directed at plaintiff, the plan was executed in the following manner: defendants' acquisition of plaintiff included payment for customer lists, the ultimate price thereof to be determined by a formula whereby defendants generally agreed to pay plaintiff twelve cents per gallon for the gas which it, defendant, Witman, sold to those customers included on Plaintiff's list. The agreement further provided that the twelve cents per gallon formula was only applicable to gas sales for the year immediately following the acquisition. Upon closing the transaction, Witman paid $96,000.00 as an advance payment to cover its projected sales to plaintiff's former customers. Business thereafter appeared to turn sour. According to plaintiff, defendants, acting through defendant Witman, purposefully failed to achieve the market position which they were capable of attaining; they, therefore, sold less than the projected gallonage to plaintiff's former customers and sought a $36,000.00 refund from plaintiff for the unearned portion of the $96,000.00 advance payment.
Hence, a reading of the complaint evidences plaintiff's general theory that defendants subverted the sales agreement by intentionally losing customers and retail sales in the year following its acquisition. As a result thereof, defendants purportedly succeeded in acquiring plaintiff for a price below the fair market value. This assertedly represents an element and evidence of defendants' corrupt scheme.
Defendants, moving to dismiss, argue that plaintiff lacks standing under Section 4 of the Clayton Act, 15 U.S.C. § 15, to assert an antitrust injury. Specifically, defendants argue that Section 4 of the Clayton Act (§ 4), which permits suit by "any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws", is an insufficient predicate upon which to assert standing since plaintiff has not suffered any antitrust injury. Rather, defendants asseverate that plaintiff's wrongful injury, if any, amounts to nothing more than a claim for fraud and/or breach of contract. Plaintiff, countering, argues that application of the Third Circuit's "factual matrix" test, as developed in Cromar Co. v. Nuclear Materials and Equipment Corp., 543 F.2d 501, 506 (3d Cir. 1976) and explicated upon in Bravman v. Bassett Furniture Industries, Inc., 552 F.2d 90, 99 (3d Cir. 1977), coupled with the analysis mandated by Blue Shield of Virginia v. McCready, 457 U.S. 465, 102 S. Ct. 2540, 73 L. Ed. 2d 149, 50 U.S.L.W. 4723 (1982), requires that defendants' motion be denied. We now turn to an analysis of the parties' contentions.
Defendants initially argue that their alleged violation of the antitrust laws was not the proximate cause of plaintiff's harm and that plaintiff, which voluntarily withdrew from the market and covenanted not to compete therein for a term of five years, has suffered no injury by virtue of any antitrust violations which may have occurred in a market in which it had no interest. Defendants place primary reliance upon Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 50 L. Ed. 2d 701, 97 S. Ct. 690 (1977); Chrysler Corp. v. Fedders Corp., 643 F.2d 1229 (6th Cir.), cert. denied, 454 U.S. 893, 102 S. Ct. 388, 70 L. Ed. 2d 207 (1981) and A.D.M. Corp. v. Sigma Instruments, Inc., 628 F.2d 753 (1st Cir. 1980). Finally, defendants concede that Blue Shield is relevant to our inquiry.
Brunswick considered the breadth of § 4 of the Clayton Act and concluded that in order to recover treble damages plaintiff must prove
antitrust injury, which is to say injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants' acts unlawful. The injury should reflect the anticompetitive effect either of the violation or of anticompetitive acts made possible by the violation. It should, in short, be "the type of loss that the claimed violations . . . would be likely to cause". Zenith Radio Corp. v. Hazeltine Research, 395 U.S. at 125, 23 L. Ed. 2d 129, 89 S. Ct. 1562. (emphasis in original; footnote omitted.)
Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. at 489. Blue Shield considered the quoted language from Brunswick and determined that plaintiff, whose treatment by a clinical psychologist was not covered by her group health plan while similar treatment by a psychiatrist was covered, had standing under § 4. The court observed that the alleged anti-competitive scheme by which Blue Shield purposefully benefitted the psychiatric community at the expense of psychologists "inevitably -- though indirectly" suppressed competition in the psychotherapy market and that the resulting injury was borne by customers of such services. Indeed, plaintiff's injury was "inextricably intertwined" with that which the conspirators purportedly inflicted upon the psychotherapy market. Blue Shield of Virginia v. McCready, 50 U.S.L.W. at 4727.
Prior to reaching this conclusion, the court considered with "particularity" the relationship between the alleged injury and "those forms of injury about which Congress was likely to have been concerned in making defendants' conduct unlawful and in providing a private remedy under § 4". Blue Shield of Virginia v. McCready, 50 U.S.L.W. at 4726. In undertaking this inquiry, the Court did not purport to retreat from Brunswick's requirement that plaintiff's alleged antitrust injury must "flow from that which makes defendants' acts unlawful". Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. at 489,. See, Blue Shield of Virginia v. McCready, 50 U.S. L. W. at 4727-28. As such, we are concerned with the application of familiar rules which require that plaintiff's injury result from defendants' anticompetitive conduct. Application of these rules convinces us that plaintiff lacks standing.
if the defendants had fulfilled their obligations as agreed Chrysler would have no complaint, yet would still be divested of its assets and precluded from competing in the market. Therefore, to the extent that Chrysler alleges damages resulting from its elimination from competition with the defendants it lacks the essential connection between injury and the ...