Crown Beverage Co., Inc. v. Cerveceria Moctezuma, S.A., and Moctezuma Imports, Inc.

Cervecería Moctezuma transferred the exclusive distributorship of its Mexican beers from Crown to Moctezuma Imports, a newly-formed subsidiary of Moctezuma. Crown alleges violations of sections 1 and 2 of the Sherman Act and breach of the distributorship contract. The district court granted summary judgment on the Sherman Act claims and dismissed the contract claim. We affirm.

Absent an anticompetitive intent or effect, a manufacturer may replace one exclusive distributor with another without violating § 1 of the Sherman Act, A.H. Cox & Co. v. Star Machinery Co., 653 F.2d 1302, 1306 (9th Cir. 1981), even if the change is effected by integrating vertically. Bushie v. Stenocord Corp., 460 F.2d 116 (9th Cir. 1972). Crown presented no substantial evidence that the replacement of Crown by Moctezuma Imports was intended to or did reduce competition.

Crown claims that Moctezuma’s alleged breach of contract was sufficient evidence of anticompetitive intent to bar summary judgment, citing DeVoto v. Pacific Fidelity Life Insurance Co., 516 F.2d 1 (9th Cir. 1975). The single fact that termination arguably breached the distributorship contract is not in itself sufficiently probative of…