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MADDOCK & MILLER, INC. v. MAYER CHINA CO.

April 26, 1965

MADDOCK & MILLER, INC., Plaintiff,
v.
MAYER CHINA COMPANY, Fine China Associates, Inc., Bart Miller (formerly known as Herbert W. Mueller), William P. C. Adams, Schmid Bros. Inc., Paul A. Schmid, Shenango China Company and United States Lines, Defendants



The opinion of the court was delivered by: LEVET

The defendant United States Lines and other defendants have moved this court for an order to dismiss the complaint under Rule 12(b) of the Federal Rules of Civil Procedure upon the ground that it appears on the face of the complaint that this court lacks jurisdiction of the subject matter.

This action allegedly is brought pursuant to Sections 1, 13, 15 and 26 of Title 15 U.S.C., commonly known as the Sherman and Clayton Acts.

THE COMPLAINT

 THE FIRST CAUSE OF ACTION

 The first cause of action is aimed at all defendants, including United States Lines. The gist of the first cause of action is as follows:

 Plaintiff sells chinaware. Prior to June 1963, plaintiff supplied chinaware, manufactured by defendant Mayer China Company ('Mayer'), to the United States Lines and others pursuant to some exclusive right under a contract with Mayer.

 In March 1961, defendants Fine China Associates, Inc. ('F.C.A.') and William P. C. Adams ('Adams') sought to obtain the business then being done by plaintiff, Maddock & Miller, Inc., with United States Lines while said defendants sought to sell to United States Lines chinaware produced by defendant Shenango China Company ('Shenango') which did not produce chinaware which met the standards of the United States Lines.

 Thereupon defendants F.C.A., Adams, Schmid Bros. Inc., Paul A. Schmid and Shenango, it is claimed, threatened United States Lines that if it did not purchase its chinaware through F.C.A. the above-mentioned defendants would take their shipping business elsewhere and induce their affiliates to do likewise.

 Under this compulsion United States Lines gave in and agreed to purchase its chinaware through F.C.A. which engaged one Bart Miller, who had formerly been employed by plaintiff and had become familiar (it is alleged) with a list of plaintiff's customers, etc. and divulged this information to F.C.A.

 Then, it is further alleged that in May 1963, defendants F.C.A. and Adams advised Mayer that they had obtained an agreement to sell chinaware to the United States Lines and that they were planning to seize the remaining 'hotel' business of plaintiff and that they wanted to sell Mayer's products to customers of plaintiff instead of plaintiff but at a lower price than paid by plaintiff for the same products.

 Thereupon, defendant Mayer agreed, it is asserted, to sell F.C.A. the same products it had sold to plaintiff at a lower price than it was selling to plaintiff, thus discriminating against plaintiff in violation of Section 13 of Title 15 U.S.C.

 The claim is then made that these acts violate Section 1 of Title 15 U.S.C. and that all defendants except United States Lines have repeated or threatened to repeat the aforementioned acts, and plaintiff has been damaged in the amount of $ 2,500,000.

 In the prayer for relief, apparently based on the first cause of action, plaintiff seeks certain injunctive relief against defendants (other than United States Lines) in parts (a), (b) and (d); and in (c) of the prayer it asks injunctive relief against defendants' conspiring, combining or acting in concert to deprive plaintiff of its business.

 SECOND CAUSE OF ACTION

 The second cause of action is directed against all defendants other than United States Lines. The thrust of this cause of action as alleged is as follows:

 Plaintiff had an agreement with Mayer whereby plaintiff had the right to sell products of Mayer. Mayer and the other defendants conspired to sell the same items to F.C.A. at a lower price with knowledge that these items would be resold to customers developed and serviced by plaintiff. These defendants hired Miller and one Shepherd, former employees of plaintiff, who divulged confidential information to F.C.A. and thus competed unfairly with plaintiff, thus damaging plaintiff to the extent of $ 2,500,000.

 THIRD CAUSE OF ACTION

 The third cause of action names only the United States Lines. This cause of action realleges paragraphs Eighth and Ninth of the complaint and claims that because of United States Lines' unlawful 'acceptance' of rebates, the plaintiff was precluded from continuing its business relationship (with United States Lines) and by reason thereof asks damages in the amount of $ 500,000.

 DISCUSSIO ...


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