The opinion of the court was delivered by: ELFVIN
Plaintiff ("Unibrand") on behalf of itself and all others similarly situated
commenced the present action against defendant ("Armstrong") as the result of the refusal by Armstrong to deal with Unibrand in the sale of off-the-road, industrial and farm tires. The Complaint was filed under Section 4 of the Clayton Act (15 U.S.C. § 15) to recover treble damages which Unibrand claims to have sustained by reason of alleged violations by Armstrong of Sections 1 and 2 of the Sherman Antitrust Act (15 U.S.C. §§ 1 and 2).
Armstrong has moved against the complaint for its alleged failure to state a cause of action. As to the first cause of action
defendant sets forth that in order to state a cause of action under Section 1 of Sherman Antitrust Act, a "contract, combination or conspiracy" must be sufficiently alleged. It is contended that the complaint is deficient in this respect. In this posture, all factual allegations of the complaint must be accepted as true. George W. Warner & Co., Inc. v. Black & Decker Mfg. Co., 277 F.2d 787 (2d Cir. 1960).
The complaint sets forth that Armstrong is the sixth largest manufacturer of tires in the United States and has annual tire sales in excess of $200,000,000 per year. It manufactures off-the-road, industrial, farm and passenger car tires and sells these tires in interstate commerce and is a major factor in the national markets for off-the-road, industrial and farm tires. Unibrand is a distributor and franchisee of the El Dorado Tire Company, the owner of the name "El Dorado" which is one of the private brand names of off-the-road, industrial and farm tires manufactured by Armstrong.
Prior to the commencement of this action, shortages had developed in the wholesale supply of off-the-road, industrial and farm tires and, contemporaneously, there had been a substantial oversupply of replacement passenger car tires. Armstrong, in order to capitalize on its market power or leverage resulting from such shortages, adopted a uniform business practice of conditioning the sale of off-the-road, industrial and farm tires upon the purchase of replacement passenger car tires. Armstrong threatened that failure to abide by this uniform business practice would cause the termination of the sales of off-the-road, industrial and farm tires to Unibrand and Armstrong did so terminate as to Unibrand and other members of the class represented by it. Some of Armstrong's customers, including one or more El Dorado franchisees, agreed to these demands and for a time purchased replacement passenger car tires in order to obtain off-the-road, industrial and farm tires. It is not alleged that Unibrand at any time purchased any replacement passenger car tires under Armstrong's said uniform business practice.
Unibrand brought this action October 21, 1974. To this date no application has been made for certification as a class action.
The sufficiency of a complaint is appraised under Fed.R.Civ.Proc. rule 8(a) which reads in pertinent part:
"A pleading which sets forth a claim for relief * * * shall contain * * (2) a short and plain statement of the claim showing that the pleader is entitled to relief * * *."
This does not require a plaintiff to set out in detail all the facts upon which he bases his claim. Conley v. Gibson, 355 U.S. 41, 78 S. Ct. 99, 2 L. Ed. 2d 80 (1957). Nor does the rule require a precise statement of all elements that give rise to a legal basis for recovery. The complaint must, however, contain sufficient factual allegations from which every material point necessary to sustain recovery can be drawn.
Unibrand admits that an allegation of a contract, combination or conspiracy is necessary to the pleading of a cause of action under Section 1, but contends that its factual allegations are sufficient to that end. At paragraph 23 in the complaint, its allegation of a contract, combination or conspiracy is summarized as follows:
"23. The defendant's aforesaid conduct constitutes a contract, combination or conspiracy with those tying product customers who are acceding or have acceded to its uniform demands to purchase tied products, and by nature of the defendant's acts to enforce its tie-in policy, and the defendant has therefore violated Section 1 of the Sherman Act, 15 U.S.C. sec. 1."
The specific conduct and acts thus referred to are stated as follows:
"15. In diverse ways and on numerous occasions, the defendant then communicated with the plaintiffs and other tying product customers not parties to this action, and threatened to terminate its sales to them of tying products if they would not give in ...