May Department Store v. Graphic Process Company, and Bel-Aire & Associates, Inc.

INTRODUCTION

This is a commercial bribery action for treble damages under the Clayton Act as *1213 amended by section 2(c) of the RobinsonPatman Act, 15 U.S.C. § 13 (c). 1 The district court determined, without an opinion, that transactions between the parties were sales of services and not sales of “goods, wares, or merchandise” as required for an action under section 13(c). Summary judgment was granted to the defendant, Graphic Process Company (Graphic).

The historical facts are undisputed. We find, however, that the defendant failed to meet its burden of demonstrating that it was entitled to judgment as a matter of law. Summary judgment was therefore improper. We reverse.

For the first time on appeal Graphic challenges the subject matter jurisdiction of this court. May failed to properly plead the interstate commerce requirement of section 13(c). May now requests an opportunity to amend its complaint. We remand with instructions that the district court allow May to attempt to meet the interstate commerce requirement.

FACTS

May Department Store (May) operates a chain of retail outlets. Graphic produces a type of printing medium, “veloxes”, used by May to reproduce art work…

(dissenting):

I dissent from that portion of the majority’s opinion reversing the summary judgment order.

I agree with the majority opinion’s description of the relevant transactions between the parties. I also agree that resolution of this controversy requires us to adopt the “dominant nature” standard. I disagree, however, that application of the dominant nature standard supports a finding that summary judgment was improperly granted. I therefore dissent.

I find that Graphic adequately demonstrated that the dominant nature of the parties’ transactions was the sale of services and not the sale of goods. Graphic does nothing more than transform May’s artwork into an almost identical image. The production of a tangible item is only incidental to the service provided by Graphic.

I believe that the legislative history of the Act supports my conclusion. Although the history makes no definitive distinction between goods and services, it is clear that Congress intended to limit the Act to tangible items of trade. Representative Patman explained the Act in these terms, which emphasized its application to tangible products:

Although Representative Patman was describing “commodities”…

637 F.2d 1211 1980-2 Trade Cases 63,364 MAY DEPARTMENT STORE, Plaintiff-Appellant, v. GRAPHIC PROCESS COMPANY, Defendant-Appellee, and Bel-Aire & Associates, Inc., et al., Defendants. No. 78-1228. United States Court of Appeals, Ninth Circuit. May 27, 1980. Stephen R. Hasting, Belcher, Henzie & Biegenzahn, Los Angeles, Cal., for plaintiff-appellant. Edward C. Broffman, Los Angeles, Cal., for defendant-appellee. Appeal from the United States District Court for the Central District of California. Before CHOY, HUG, and SKOPIL, Circuit Judges. CHOY, Circuit Judge. INTRODUCTION 1 This is a commercial bribery action for treble damages under the Clayton Act as amended by section 2(c) of the Robinson-Patman Act, 15 U.S.C. § 13 (c). 1 The district court determined, without an opinion, that transactions between the parties were sales of services and not sales of "goods, wares, or merchandise" as required for an action under section 13(c). Summary judgment was granted to the defendant, Graphic Process Company (Graphic). 2 The historical facts are undisputed. We find, however, that the defendant failed to meet its burden of demonstrating that it was entitled to judgment as a…