Allan v. Chapman, Jr. v. Rudd Paint & Varnish Company, Dave Rivers and Alan Park

This action involves a distributorship agreement between Rudd Paint & Varnish Company (Rudd) and Allan V. Chapman, Jr. The distributorship was for a product known as “Run-Guard,” a substance designed to prevent runs in nylon hosiery. The agreement granted Chapman an exclusive distributorship in Colorado and Alaska; however, this lawsuit relates only to the Colorado business. Difficulties arose between the two parties, and Chapman brought this action against Rudd, its president and its sales director, to recover damages and obtain injunctive relief.

In the posture of the case as it reaches us, Chapman asserts two claims against defendants. One is that, in entering into the agreement, defendants, in effect, sold to Chapman an unregistered security in violation of the Securities Act of 1933, 15 U.S.C. § 77a et seq. (1964) and The Securities Act of Washington, RCW 21.-20.005 et seq. The other claim is that, in connection with this transaction, defendants acted concertedly among themselves and with others to accomplish ends which violate section 1 of the Sherman Act, 15 U.S.C. § 1 (1964), section 2(a) of the Clayton Act, as amended by the Robinson-Patman Act, 15 U.S.C. § 13 (1964),…