Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

MORRIS ELECS. OF SYRACUSE, INC. v. MATTEL

June 20, 1984

MORRIS ELECTRONICS OF SYRACUSE, INC., Plaintiff, v MATTEL, INC., MATTEL ELECTRONICS, INC. and LOUIS J. BUDUSON, Individually, and d/b/a SOUND MERCHANDISE, Defendants.


The opinion of the court was delivered by: MCCURN

NEAL P. McCURN, D.J.

MEMORANDUM-DECISION AND ORDER

 Sections 2(d) and 2(e) of the Clayton Act, as amended by the Robinson-Patman Act, 15 U.S.C. §§ 13(d) and 13(e) (1976), make it unlawful, in substance, for a seller to furnish promotional and advertising allowances, services, or facilities to a customer in connection with the sale of a product unless such allowances, services or facilities are made available on proportionately equal terms to all other customers that compete for such product on the same level of distribution as the favored customer. See generally, F.T.C. v. Fred Meyer, Inc., 390 U.S. 341, 19 L. Ed. 2d 1222, 88 S. Ct. 904 (1968). The central issue on this motion is whether the plaintiff, a wholesaler, may assert a claim for damages for injury to its business as a result of the defendant manufacturer's alleged violation of §§ 2(d) and 2(e) by favoring direct-purchasing retailers over the indirect-purchasing retailers supplied through the plaintiff. The court, for reasons set forth herein, concludes that the plaintiff has antitrust standing to assert such claim, and therefore denies defendants' motion for judgment on the pleadings or, in the alternative, for partial summary judgment.

 I.

 As alleged in its Amended Complaint, plaintiff Morris Electronics of Syracuse, Inc. ("Morris") is a wholesale dealer in electronics products and appliances. Defendants Mattel, Inc. and its subsidiary Mattel Electronics, Inc. ("Mattel") manufacture, distribute and sell consumer electronics, including its trademarked Intellivision master components and game cartridges. Defendant Buduson is a sales representative of Mattel doing business as Sound Merchandise.

 Plaintiff asserts four causes of action, which pertain to Mattel's alleged practices in the sale and marketing of its consumer electronics products. The first cause of action alleges that the defendants unlawfully tied and conditioned the sale to Morris of its Intellivision master components to the sale of its handheld and other consumer electronic games in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1 (1976), and Section 3 of the Clayton Act, 15 U.S.C. § 14 (1976). The second cause of action alleges that Mattel unlawfully discriminated in price between Morris and direct purchasing retailers by selling consumer electronics products to direct purchasing retailers at substantially lower prices than to Morris in violation of Section 2(a) of the Clayton Act, as amended by the Robinson-Patman Act, 15 U.S.C. § 13(a) (1976). The third cause of action -- which is the subject of this motion -- alleges that Mattel provided promotional and advertising allowances, services and facilities to direct-purchasing retailers in connection with the sale of Mattel's consumer electronics products without providing the same allowances, services and facilities to Morris or Morris' retailer customers on proportionately equal terms, in violation of §§ 2(d) and 2(e) of the Clayton Act, as amended by the Robinson-Patman Act, 15 U.S.C. §§ 13(d) and 13(e) (1976). Finally, plaintiff's fourth cause of action incorporates the previous allegations, and asserts a violation of the Donnelly Act, NY GENERAL BUSINESS LAW § 340 (McKinney 1968).

 Presently before the court is the defendants' motion, pursuant to Rule 12(c), Fed. R. Civ. P., to dismiss the third cause of action and part of the fourth cause of action in plaintiff's Amended Complaint or, in the alternative, pursuant to Rule 56 Fed. R. Civ. P., for summery judgment as to those claims. Inasmuch as plaintiff does not oppose defendants' motion with respect to part of its fourth cause of action, that motion will be granted, and the court's discussion herein is limited to the sufficiency of plaintiff's claim under §§ 2(d) and 2(e) of the Clayton Act.

 II.

 For the purpose of considering defendant's Rule 12(c) motion, all of the well-pleaded allegations in the complaint are assumed to be true, and all contravening assertions in the defendants' Answer are taken to be false. National Metropolitan Bank v. United States, 323 U.S. 354 (1945). See generally, 5 Wright & Miller, Federal Practice & Procedure § 1368 (1969 ed.). *fn1" Turning, then, to the specific allegations in support of the challenged cause of action, the court must assume the truth of the following:

 31. . . . [I]n furtherance of the sale of Mattel's products by large direct purchasing retailers, including but not limited to J. C. Penny, Kiddie City, a division of Lionel, K-Mart and Radio Shack, Mattel supplied these direct purchasing retailers with promotional and advertising services and facilities for their use and benefit in connection with their sale of Mattel's products, without offering the same allowances, services and facilities to Morris or Morris' retailer customers on proportionately equal terms as those available to these direct-purchasing retailers or by offering the promotional benefits only on a delayed or in an otherwise discriminatory fashion.

 For example, Mattel provided its direct-purchasing retail customers with advance notification of a rebate that it would offer to promote sales of Intellivision, which notice enabled such direct-purchasing retail customers, but not its indirect-purchasing customers, to place timely advertisements of the rebate during the 1982 Christmas season. Amended Complaint PP32(a)-(d). Morris also discriminated in favor of direct-purchasing retailers by furnishing them with more timely deliveries of products, id. P32(e); more advantageous allocations of in store display materials, id.; more advantageous allocations of desired products, id.; and more favorable return privileges. Id. P32(f).

 As a result of the aforementioned discriminatory conduct, the plaintiff lost profits, sales and goodwill, and its business has been impaired. Id. P35.

 III.

 Sections 2(d) and (e) of the Clayton Act, 15 U.S.C. §§ 13(d) and (e), provide as follows:

 § 13: Discrimination in Price, Services, or Facilities.

 . . . .

 (d) Payment for services or facilities. It shall be unlawful for any person engaged in commerce to pay or contract for the payment of anything of value to or for the benefit of a customer of such person in the course of such commerce as compensation or in consideration for any services or facilities furnished by or through such customer in connection with the processing, handling, sale, or offering for sale, or any products or commodities manufactured, sold, or offered for sale by such person, unless such payment or consideration is available on proportionally equal terms to all other customers competing in the distribution of such products or commodities.

 (e) Furnishing services or facilities. It shall be unlawful for any person to discriminate in favor of one purchaser against another purchaser or purchasers of a commodity bought for resale, with or without processing, by contracting to furnish or furnishing, or by contributing to the furnishing of, any services or facilities connected with the processing, handling, sale, or offering for sale of ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.