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WOODBRIDGE PLASTICS, INC. v. BORDEN

July 2, 1979

WOODBRIDGE PLASTICS, INC., Plaintiff,
v.
BORDEN, INC., Pickwick International, Inc., and Keel Manufacturing Corporation, Defendants



The opinion of the court was delivered by: KNAPP

MEMORANDUM AND ORDER

Woodbridge Plastics, Inc. ("Woodbridge") brought this action against defendants Borden, Inc. ("Borden"), Pickwick International, Inc. ("Pickwick"), and Keel Manufacturing Corporation ("Keel") for violations of the federal anti-trust laws and for intentional interference with contractual relations. Each of the defendants has moved for dismissal of the anti-trust claims as time-barred. Borden has also moved for dismissal of the claim of intentional interference for lack of subject matter jurisdiction. For reasons that follow, we grant each of these motions. *fn1"

 The following facts emerge from the complaint and the affidavits submitted by plaintiff Woodbridge:

 From 1961 to 1975, Woodbridge was engaged in the manufacture of plastic compounds, mainly a copolymer resin used in the record industry. Its principal supplier of raw materials for this compound was Borden. Keel and Keel's corporate parent, Pickwick, were its principal customers. Together, these two firms had accounted for some 50-60% Of Woodbridge's sales of the compound. Their dealings with Woodbridge were governed by a three-year supply contract entered into in May of 1973. Shortly after that contract was formed, Borden notified Woodbridge that there was a shortage of the raw materials used in manufacture of the compound, and that Borden would therefore be able to supply Woodbridge with resin in only limited quantities. The quantities it actually supplied in the ensuing period were too low for Woodbridge to meet its customers' needs.

 Not surprisingly, Keel and Pickwick became dissatisfied with Woodbridge's performance. In July of 1974, they contracted to have their needs satisfied directly by Borden. Although Borden in its dealings with Woodbridge maintained that raw materials were in short supply, the July 1974 contract called upon it to supply Keel and Pickwick over a five-year period with quantities so great that they would need no other source. Moreover, under the July understanding, Keel and Pickwick were to construct or come into the control of a processing plant that would enable them to process their own resin compounds, thereby eliminating Woodbridge's former role in the manufacture. As the complaint alleges, "the necessary consequence of their contract was to preclude Keel and Pickwick from purchasing any additional copolymer resin from Woodbridge." That was indeed the result.

 By letter dated September 6, 1974, Keel gave Woodbridge written notice "that it considers the contracts (pursuant to which Woodbridge supplied Pickwick and Keel) terminated" and would shortly commence an arbitration proceeding to obtain an official endorsement of that view. Woodbridge had previously learned, in August of 1974, that Keel and Pickwick had contracted with a "major supplier"; it learned in "early November" that this "major supplier" was Borden. On November 22, 1974, Woodbridge wrote Keel offering to supply a quantity of resin compound under the repudiated May, 1973 contract, to which offer Keel never responded. On November 8, 1974, Borden began supplying Pickwick with resin. On December 1, 1974, the July contract by its terms went into effect. On December 31, 1974, Keel commenced an arbitration proceeding as it had indicated it would in the September 6th letter. Woodbridge's last transaction with Borden was a sale of resin on November 12, 1974. *fn2" Woodbridge did not commence this action until November 29, 1978.

 Woodbridge asserts five causes of action. The first is a state common law claim against Borden for intentional interference with contractual relations. The second, against all defendants, is brought under Section 1 of the Sherman Act, 15 U.S.C. § 1, which outlaws conspiracies in restraint of trade. The third, against Borden, is a price discrimination claim under the Robinson Patman Act, 15 U.S.C. § 13, its essential allegation being that Borden "discriminated in price . . . by charging Woodbridge higher prices than were charged other customers, in particular the defendants Pickwick and Keel, for goods of a like grade and quality." The fourth, against all defendants, is brought under Section 3 of the Clayton Act, 15 U.S.C. § 14, which proscribes contracts which condition sales on the "agreement or understanding that the . . . purchaser thereof shall not use or deal in the goods . . . of a competitor or competitors of the . . . seller." In its fifth and final claim Woodbridge seeks an injunction against defendants' "continuing violations of the anti-trust laws."

 We will first discuss the anti-trust claims before turning to the state law claim.

 Discussion

 I. The Anti-trust Claims.

 The statute of limitations applicable to civil anti-trust actions is the four-year statute set out in 15 U.S.C. § 15b:

 
"Any action to enforce any cause of action under . . . this title shall be forever barred unless commenced within four years after the cause of action accrued."

 This section was interpreted by the Supreme Court in Zenith Radio Corp. v. Hazeltine Research, Inc. (1971) 401 U.S. 321, 91 S. Ct. 795, 28 L. Ed. 2d 77. As that case makes clear, an anti-trust claim arises at each time the plaintiff's interest is invaded to his damage and the statute of limitations commences to run with respect to each such injury-causing act when it is committed (401 U.S. at 338-39, 91 S. Ct. at 806):

 
"Generally, a cause of action accrues and the statute begins to run when a defendant commits an act that injures a plaintiff's business. (citations omitted) This much is plain from the treble-damage statute itself. 15 U.S.C. § 15. In the context of a continuing conspiracy to violate the antitrust laws . . . this has usually been understood to mean that each time a plaintiff is injured by an act of the defendants a cause of action accrues to him to recover the ...

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