Full opinion text
PALMIERI, Senior District Judge. PRELIMINARY STATEMENT This antitrust action brought under sections 1 and 2 of the Sherman Act was tried to a jury from November 2,1981 to November 19, 1981. Both parties moved for directed verdicts at the close of the entire case. Defendants’ motions were granted, plaintiff’s were denied. Only a counterclaim of the defendants for damages based on a general tort statute of Louisiana was submitted to the jury on special interrogatories and resulted in no award of damages. At the time the directed verdicts were granted, this court made an oral disposition of the motions on the record and committed itself to the filing of a more elaborate statement of its views after the close of the case. This opinion represents the fulfillment of that commitment. The plaintiff, J.T. Gibbons, Inc. (Gibbons) of New Orleans, is principally an exporting company dealing in a great many domestically manufactured goods it resells throughout the world. Richard Keeney, its president, had been a salesman for one of the defendants, Capital Valve and Fitting Company, Inc. (Capital) of Baton Rouge from 1973 until 1975. Capital is the Louisiana distributor of the products of Crawford Fitting Company (Crawford), another defendant, which is a manufacturer of valves and tube fittings, and which has its principal place of business in Solon, Ohio. Crawford’s products are sold through a network of independent distributors located throughout the United States and in numerous foreign countries. It is owned by Fred A. Lennon, its present chairman of the board and former president, a defendant in this case. Its current president is Francis J. Callahan. Capital is owned and operated by Mr. Robert D. Jennings, its president, who was joined as a defendant in this lawsuit. Thomas A. Read and Company (Read), a Texas corporation, another defendant in the case, was the authorized distributor for Crawford products in the greater Houston, Texas area. In 1975, Mr. Cecil Keeney, a New Orleans businessman, purchased the Gibbons company for his two sons, Richard Keeney and Michael Keeney who became president and executive vice-president, respectively, of the company. Shortly hereafter, Richard Keeney had Gibbons commence the purchase of Crawford valves and fittings from Capital. The Crawford products were then resold by Gibbons in the North Sea oil drilling area. In May 1978, Capital refused to continue its business with Gibbons. In June 1978, Gibbons claimed it was the victim of a boycott and sought to buy products directly from Crawford. While it did not succeed in this, Crawford provided an alternate source of supply from its distributor in Birmingham, Alabama, Franklin Valve and Fitting Company, Inc. (Franklin). Gibbons never availed itself of Franklin or the blanket discount it offered, but Gibbons was never at a loss to fill its orders for Crawford products, having succeeded in using a Crawford distributor, Potomac Valve and Fitting Company (Potomac), in the Washington, D.C. area for this purpose. Gibbons also made purchases of valves and fittings from Crawford competitors. There was overwhelming evidence that the industry was intensely competitive and that Crawford’s share of it was relatively small. Because Crawford’s products required technical skill for their proper use and were frequently the component parts of installations having serious accident potentials, service followup procedures, engineering support and territorial restrictions were part of the distribution system. Gibbons has charged that it was damaged by this system in various ways and that the maintenance of the system was a restraint of trade and the result of a conspiracy to restrain trade in which Crawford, Capital, Read, Mr. Lennon, Mr. Callahan and Mr. Jennings participated. The various aspects of these charges will be dealt with separately. THE CRAWFORD COMPANIES Fred A. Lennon began the Crawford business in 1947, entering an industry which already had many well established competitors. Crawford did not begin to manufacture valves until 1959, and has gradually added products to its valve lines over the years. Today, it sells over four thousand different valve and fitting products. Crawford has five, separately incorporated, manufacturing companies which manufacture different products: Crawford Fitting Company (Swagelok tube fittings); Whitey Company (shut off and ball valves); Nupro Company (fine metering, bellows and check valves); Cajon Company (weld pipe fittings and vacuum products); and Sno-Trik Company (very high pressure products). Crawford products are sold wholesale to its distributors by regional warehouses. The three domestic warehouses relevant to this litigation are Southern Swagelok, Eastern Swagelok and Central Swagelok. These warehouses are also separately incorporated. Southern Swagelok serves Crawford’s distributors in the southern part of the United States, including Capital in Baton Rouge, Franklin in Birmingham, and Read in Houston. Eastern Swagelok serves Crawford’s distributors in the northeastern part of the United States, including Potomac, located in Rockville, Maryland. Capital and Potomac are the two distributors from which Gibbons purchased Crawford’s brands of valves and fittings. Crawford also sells its products in Europe, through its warehouse in Switzerland, Microventil. Some of the distributors purchasing from Microventil, and involved in this case, are Glasgow Valve and Fitting, Aberdeen Valve and Fitting, and Stavanger Valve and Fitting. At all times involved in this lawsuit, Fred A. Lennon has owned all or a controlling majority of the stock of Crawford Fitting Company and all of its affiliated manufacturing and warehousing companies. He has been chairman and a director of the board. Francis J. Callahan has been an officer and director of all manufacturing companies and warehouses. He is the minority shareholder of the only manufacturing company of which Mr. Lennon is not the sole shareholder. Mr. Callahan is married to Mr. Lennon’s niece. None of these manufacturing and warehousing companies own any of the shares of any other of these companies. Their product lines complement each other and are sold through the same distributors out of a common catalog. They do not compete with each other. Their product lines do not overlap and they are all controlled by Mr. Lennon. For each of the product lines of the Crawford companies, there is a published suggested price list, a distributor discount schedule and a suggested customer discount schedule. The price lists and discount schedules suggested are set by Mr. Lennon and Mr. Callahan. The final decision concerning these matters is reserved for Mr. Lennon, who controls these companies. Crawford warehouses acquire the Crawford products at cost plus a small percentage markup, of one-and-a-half (1V2%) percent. These warehouses then sell Crawford products to distributors at a discount commensurate with the size of the distributor’s order. A similar discount, or “blanket”, system is used by distributors in selling their products to purchasers. Gibbons purchased from the distributors. Crawford products are similarly sold throughout Europe, except that an additional markup of approximately ten (10%) percent is calculated for its European price list, to cover the cost of transportation and air freight packaging, a small Swiss duty, and other costs associated with the transatlantic passage of the product. Microventil pays for Crawford products in American dollars, but sells to distributors, keeps its accounts, and pays its employees in Swiss francs as it is located in Switzerland. There is no evidence that Crawford has ever rebuked or disciplined a distributor for selling at the distributor’s own price. The Crawford contract with its distributors contains a sixty-day termination clause, permitting either party to terminate the distributorship agreement on sixty days’ notice. CRAWFORD’S DISTRIBUTION SYSTEM A closer look at Crawford’s methods in selling and distributing its products can provide a better understanding of the discussion which follows. Crawford created a system of exclusive Crawford distributorships throughout the United States, and later abroad. Each distributor was assigned a specific territory. The defendants Capital and Read were such distributors. Each distributor was obliged to maintain local stocks of Crawford products, service the needs of the customers in its territory and make personal calls on them. Since the maintenance of the local stocks engendered a considerable expenditure beyond the financial means of the distributor, the distributor would be permitted to acquire the products on credit on an open account. Crawford would typically take a minority ownership in the distributorship until it could become established and handle its own financing. The minority ownership would then be transferred at cost to the distributor. The distributorship would thereupon become one hundred percent independently owned. The vast majority of Crawford’s distributors got their stock in this way and the same pattern is still being followed today. As Crawford expanded into new product lines it developed increasingly customer-oriented marketing techniques emphasizing both the reliability and the availability of its products. The successful completion of programmed learning courses on fittings and valves was required of every prospective salesman in order to make them knowledgeable about how the products should be installed and used. Another development was the creation of Crawford’s five percent service commission program put into effect in 1973. It is of special significance in this lawsuit because of the emphasis placed upon it by the plaintiff as the basis for certain contentions made by it and which will be referred to in the discussion of plaintiff’s section 1 claims. Because a significant part of the market for fittings and valves involved their use in large construction projects such as chemical plants, oil refineries, public utility plants and nuclear power plants, sale contacts would typically involve the territories of several Crawford distributors at the same time: the location of the architect and designer, the location of the new plant site and the location of the company financing the project. Crawford lacked a national sales office and therefore, it could not, like some of its competitors, coordinate its efforts at different locations for new construction sales business. Crawford distributors would each seek to secure the business from the point of contact within its territory since it could not be sure where the decision to buy would be made. If the purchases were made at a place different from the plant site, the Crawford distributor servicing the territory in which the plant site was located would sometimes find himself without any commission but with a customer to service. In order to remedy this situation, the distributor making a sale for a shipment into a territory of another exclusive distributor was required to make out a check to Crawford for five percent of the invoice price and send it along with the invoice to Crawford. Crawford would then determine if the sale required servicing in the territory into which the products were shipped. If it so determined, Crawford made out a check for five percent of the invoice price to the distributor into whose territory the products were shipped, sending him the check along with the invoice setting forth the name and location of the customer. The service follow-up relationship would thereby be set in motion and an incentive would be provided for it. Additionally, and because Crawford attached the greatest importance to the quality of its product as well as its prompt delivery to customers, it provided engineering support for them and required each distributor at all times to carry an adequate inventory. Distributors were also expected to conduct seminars, training meetings and conferences relating to sales, service and safety for its customers on a continuing and regularly scheduled basis. The ability to deliver in terms of quality and delivery time were essential aspects of the Crawford distribution system. In order to maintain control over quality and delivery time for its products, Crawford needed ready access to vital market information on a timely basis so that it could continuously monitor all phases of its operations and permit itself to react quickly to changing market conditions. Many distributors, including Capital for whom Gibbons’ president, Richard Keeney, had been an employee and from whom Mr. Keeney purchased Crawford products until 1978, do not provide their customers with full discounts or their salespeople with full commissions in those cases where they would be required to tender the five (5%) percent service commission check to Crawford. This policy is adopted by the distributors to ensure the profitability of sales out of their territories. DEFENDANTS’ MOTIONS FOR A DIRECTED VERDICT A. DIRECTED VERDICT STANDARD The directed verdict standard in the Fifth Circuit, as enunciated in Boeing Co. v. Shipman, 411 F.2d 365, 374-75 (5th Cir.1969), is as follows: If the facts and inferences point so strongly and overwhelmingly in favor of one party that the Court believes that reasonable men could not arrive at a contrary verdict, granting of the motions is proper. On the other hand, if there is substantial evidence opposed to the motions, that is, evidence of such quality and weight that reasonable and fair-minded men in the exercise of impartial judgment might reach different conclusions, the motions should be denied, and the case submitted to the jury. A mere scintilla of evidence is insufficient to present a question for the jury ... There must be a conflict in substantial evidence to create a jury question, (emphasis added) Forensic eloquence cannot be a substitute for hard evidence. What evidence can be said to exist in this case in support of plaintiff’s claims is insufficient to support them. Accordingly, this court is constrained to grant defendants’ motion for a directed verdict against plaintiff on all Sherman Act sections 1 and 2 claims asserted by the plaintiff, and to deny plaintiff’s motion for a directed verdict in its favor. B. MOTION FOR A DIRECTED VERDICT ON SECTION ONE CLAIMS In order to recover damages for a violation of section 1 of the Sherman Act, plaintiff must prove 1) the existence of an agreement or conspiracy; 2) which unreasonably restrained trade; and 3) caused an injury to plaintiff. Defendants have moved for a directed verdict on all section 1 claims alleged by plaintiff. Included in their motions, defendants cite plaintiff’s failure to introduce evidence that it was injured by any action of defendants. Additionally, defendants have moved for a directed verdict on the ground that plaintiff failed to prove any unreasonable restraint of trade resulting from defendants’ actions. Conversely, plaintiff has moved for a directed verdict on its section 1 claims which allege per se violations of antitrust laws. The defendants’ motion for a directed verdict on plaintiff’s section 1 claims is granted on the basis of a complete failure of proof by plaintiff on virtually every element alleged in every claim asserted. Furthermore, plaintiff’s motion for a directed verdict is denied as no per se violation has been substantiated by the record. There is insufficient proof with respect to all claims in the following respects: 1) failure of proof that plaintiff suffered an injury resulting from any action by defendants; and 2) failure of proof that any actions of defendants had an anticompetitive effect, as is required under the appropriate “rule of reason” analysis for the alleged offenses. Additionally, there is insufficient proof with respect to specific claims in the following respects: 1) lack of capacity of various Crawford officers and corporations to form a conspiracy; and 2) Gibbons’ lack of standing to sue various defendants. NO PER SE VIOLATIONS This court is convinced, after careful consideration of the cases cited by the parties and an examination of the evidence introduced at trial, that plaintiff has failed to offer sufficient evidence for submission to the jury of any claim of per se violation. This case involves the vertical distribution scheme of a manufacturer in a highly competitive industry, requiring highly skillful selling techniques, where the reliability of the product is an essential purchasing criterion and where service to customers and engineering support for the use of the product are concomitants of that reliability. Service ensures a means by which a manufacturer, such as Crawford, can guarantee to its customers that they will be using the proper product in the proper manner in industries in which an error can be extremely costly. This service also minimizes Crawford’s exposure to the potential for liability which might ensue in costly products liability litigation. The evidence is overwhelming that service is a significant element in the valve and fitting industry generally. In addition, a manufacturer such as Crawford has a clear interest in seeing its product sales increase. Since Crawford’s vertical distribution scheme relies upon distributorships to accomplish both the objective of increasing sales and servicing its customers, it developed a geographic scheme which places limits on the sales of distributors outside their territories. Clearly, this aspect of Crawford’s scheme would be subject to a “rule of reason” analysis under Continental T.V., Inc. v. GTE Sylvania, Inc., 433 U.S. 36, 97 S.Ct. 2549, 53 L.Ed.2d 568 (1977). This scheme provides distributors with incentives to solicit new customers and ensure proper service when the distributor knows that it will reap the benefits of the costs of solicitation and servicing. Crawford’s scheme, however, permits dealers flexibility in the event that they do wish to sell their products outside their territory. This flexibility cannot be accomplished without compensation to the distributors who will have to service Crawford’s products which are used within their territories. Crawford responded to these competing, legitimate concerns with a policy of its own creation that distributors selling outside their territories must tender five (5%) percent of their sales price to Crawford to forward to the distributor who must service the product. Forwarded along with these infrequent checks, Crawford sends the invoices to permit the servicing distributor to know the customer whom it must expect to service. PRICE FIXING CLAIMS Plaintiff claims that the defendants engaged in both vertical and horizontal price fixing. This court finds that there is insufficient evidence upon which any claim of price fixing could rest. Vertical Price Fixing To establish the existence of a vertical price restraint conspiracy under the Sherman Act, plaintiff must prove more than a unilateral announcement of suggested retail prices by Crawford and voluntary adherence by Crawford distributors. Plaintiff must demonstrate that Crawford engaged in some affirmative action to achieve uniform adherence to its suggested retail prices by inducing distributors to adhere to those suggested retail prices to avoid price competition. United States v. Parke, Davis & Co., 362 U.S. 29, 80 S.Ct. 503, 4 L.Ed.2d 505 (1960); United States v. Bausch & Lomb Optical Co., 321 U.S. 707, 64 S.Ct. 805, 88 L.Ed. 1024 (1944). The mere publication of a suggested retail price list does not constitute a violation of the Sherman Act. The evidence shows that Crawford distributors have routinely rejected Crawford’s retail pricing suggestions, made their own pricing decisions, and suffered no penalty as a result thereof. Gibbons has itself had contact with three separate Crawford distributors, defendant Capital, Potomac and Franklin. On each occasion plaintiff received or was offered substantially different quantity blanket discounts on the purchase of Crawford products. The prices charged, or to be charged, under each quantity blanket discount differed by thousands of dollars. Thus, Gibbons has failed to establish the threshold requirement of a vertical price-fixing violation' — namely, adherence by Crawford distributors to defendant Crawford’s suggested retail prices. Gibbons has also failed to produce any evidence indicating that Crawford has undertaken or threatened to undertake some course of conduct designed to compel compliance of its distributors with its suggested retail price list. In Butera v. Sun Oil Co., 496 F.2d 434, 437 (1st Cir.1974) (footnotes omitted), the court, affirming a grant of summary judgment for defendant on a resale price maintenance claim, stated: [A] case of illegal resale price is made out when a price is announced and some course of action is undertaken or threatened contingent on the willingness or unwillingness of the retailer to adopt the price. The action need not necessarily fit under the rubric “coercion”, but it must involve making a meaningful event depend on compliance or non-compliance with the “suggested” or stated price. Accord Aladdin Oil Co. v. Texaco, Inc., 603 F.2d 1107 (5th Cir.1979). This plaintiff has not shown. Since plaintiff has failed to introduce evidence of forced adherence to suggested retail prices, the issue of vertical price fixing may not be submitted to the jury. Santa Clara Valley Distributing Co. v. Pabst Brewing Co., 556 F.2d 942 (9th Cir.1977). See H.L. Moore Drug Exchange v. Eli Lilly & Co., 1981-2 CCH Trade Cas. ¶ 64,335 (2d Cir.1981) (judgment n.o.v.). Horizontal Price Fixing Plaintiff has alleged that defendants engaged in horizontal price fixing: 1) that Lennon and Callahan fixed the prices at which the Crawford manufacturers sold Crawford products; and 2) that Capital and Read allocated their territories and conspired to fix the prices at which they would offer Crawford products. There is insufficient evidence of either “horizontal” price fixing claim. Suggested retail prices were set by Mr. Lennon, with the assistance of Mr. Callahan — both officers of Crawford. There is no evidence that any horizontal combination affected this vertical scheme of suggested retail prices. As discussed separately in this opinion, Messrs. Lennon and Callahan’s establishment of Crawford prices for the five Crawford manufacturers could not be deemed “price fixing,” as it is a natural and legal practice for corporate officers to set their corporations’ prices. Furthermore, as the five manufacturing corporations are not competitors, but rather represent a level of Crawford’s vertical distribution scheme, plaintiff errs in characterizing any price setting by Messrs. Lennon and Callahan as a horizontal agreement. There is also insufficient evidence to show a horizontal price fixing scheme at the distributor level. Crawford’s suggested retail prices were established solely by Messrs. Lennon and Callahan. The distributors did not affect this decision. Once in receipt of the suggested prices, distributors were free to determine for themselves the actual prices to be charged any customer. Plaintiff did not offer any evidence to show that the prices offered it by various Crawford distributors were uniform. Rather, the only evidence on this issue shows great differences between the prices offered by the different distributors to Gibbons. In light of the above failures of proof by plaintiff, this court refuses to submit to the jury any issue with respect to the claims of horizontal price fixing. CONCERTED REFUSAL TO DEAL The thrust of Gibbons’ refusal to deal claim is a challenge of Crawford’s restricted distribution system, which includes vertical territorial restrictions such as exclusive distributorships, assigned territories and a five (5%) percent service commission program. While Gibbons contends that a concerted refusal to deal originating at the distributorship level occurred, there is insufficient evidence to support this contention. Gibbons was able at all times to purchase Crawford products from distributors, after Capital notified it that it would no longer do business with Gibbons. Defendant Read also refused to sell its products to Gibbons on the terms proposed by Gibbons. There is insufficient evidence to show any concerted refusal to deal by Capital and Read. The evidence merely shows two distributors refusing to sell to Gibbons for independent and legitimate reasons. CRAWFORD’S VERTICAL DISTRIBUTION SCHEME: A “RULE OF REASON” ANALYSIS In light of the above findings, this court must conclude that the claims asserted can only be viewed as an allegation that the vertical restrictions and practices of Crawford violated the Sherman Act. Plaintiff alleges that the above described distribution scheme constitutes a variety of per se violations. This court finds, however, that the evidence does not permit such a characterization of the conduct at issue. This case is not of the same genre as such price fixing cases as United States v. Container Corp., 393 U.S. 333, 89 S.Ct. 510, 21 L.Ed.2d 526 (1969); United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 60 S.Ct. 811, 84 L.Ed. 1129 (1940); United States v. Trenton Potteries Co., 273 U.S. 392, 47 S.Ct. 377, 71 L.Ed. 700 (1927); or United States v. Nationwide Trailer Rental System, 156 F.Supp. 800 (D.Kan.), aff’d per curiam, 355 U.S. 10, 78 S.Ct. 11, 2 L.Ed.2d 20 (1957). Rather, this case, with a vertical distribution scheme originating with and supervised by the manufacturer, cannot be subject to a per se analysis. This court is persuaded by such cases as Abadir & Co. v. First Mississippi Corp., 651 F.2d 422 (5th Cir.1981); Muenster Butane, Inc. v. Stewart Co., 651 F.2d 292 (5th Cir. 1981); Red Diamond Supply, Inc. v. Liquid Carbonic Corp., 637 F.2d 1001 (5th Cir. 1981); National Auto Brokers Corp. v. General Motors Corp., 572 F.2d 953 (2d Cir. 1978), cert. denied, 439 U.S. 1072, 99 S.Ct. 844, 59 L.Ed.2d 38 (1979); Rice Tire Co. v. Michelin Tire Corp., 483 F.Supp. 750 (D.Md.1980), aff’d per curiam, 638 F.2d 15 (4th Cir.), cert. denied, 454 U.S. 864, 102 S.Ct. 324, 70 L.Ed.2d 164 (1981); and Tomac, Inc. v. Coca-Cola Co., 418 F.Supp. 359 (C.D.Cal. 1976), that Crawford’s distribution scheme can only be judged under a rule of reason analysis. These cases, as well as many others cited in defendants’ motions, present factual situations so close to the immediate case that no other conclusion is possible. Although vertical restraints may reduce intrabrand competition by limiting the number of sellers of a particular product, they achieve distribution efficiencies and thereby promote interbrand competition. It is interbrand competition, rather than intrabrand competition, with which the antitrust laws are primarily concerned. Accordingly, vertical restrictions are analyzed under the rule of reason. Continental T. V., Inc. v. GTE Sylvania, Inc., supra 433 U. S. at 58-59, 97 S.Ct. at 2561-62; Muenster Butane, Inc. v. Stewart Co., supra at 295; Red Diamond Supply, Inc. v. Liquid Carbonic Corp., supra at 1005. As the Fifth Circuit explained in Abadir & Co. v. First Mississippi Corp., supra at 426-27 (footnote omitted): The distributor or distributors on whom [vertical restraints] are imposed are only benefited by a reduction in competition. But the supplier imposing such [restraints] has several potential economic advantages which are legitimate: attracting competent and aggressive retailers, inducing retailers to engage in promotional activities, market-distribution efficiency, and maintaining control over the safety and quality of the product. In Abadir the court held that a vertical restriction upon a dealer to sell only to customers in a specific area is evaluated under the rule of reason. In some eases, an agreement, combination, or conspiracy between a manufacturer and its distributors may be treated as horizontal. This occurs only when the source of the conspiracy is a combination of the distributors. Where the alleged originator of the conspiracy is the manufacturer, the conspiracy is treated as a vertical restraint. Red Diamond Supply, Inc. v. Liquid Carbonic Corp., supra at 1004; H. & B. Equipment Co., Inc. v. International Harvester, 577 F.2d 239, 245-46 (5th Cir.1978). The Fifth Circuit has observed that given the divergent interests between a manufacturer and its distributors, it is unlikely that a manufacturer not controlled by its distributors would be a party to a distributor-created, and hence distributor-serving, conspiracy. Red Diamond Supply, Inc. v. Liquid Carbonic Corp., supra at 1005. Gibbons also argues that because Messrs. Lennon and Callahan indirectly own, in part or in whole, some of Crawford’s distributors, the alleged agreement is among horizontal competitors. This argument has been rejected by this circuit: When a producer elects to market its goods through distributors, the latter are not, in an economic sense, competitors of the producer even though the producer also markets some of its goods itself; rather, the distributors are “agents” of the producer, employed because the producer has determined that it can supply its goods to consumers more efficiently by using distributors than it can by marketing them entirely by itself. Red Diamond Supply, Inc. v. Liquid Carbonic Corp., supra at 1005. Accord Abadir & Co. v. First Mississippi Corp., supra at 424-25, 428. Gibbons would thus have been required to show that Crawford’s distribution scheme caused an injury to competition by an unreasonable restraint of trade, and resulted in an injury to plaintiff. This court finds that plaintiff has failed to prove either an injury to competition or an injury to itself — issues upon which it had the burden of proof — and thus directs the verdict on the Sherman Act section one claims for defendants. NO INJURY TO COMPETITION WAS SHOWN Plaintiff has failed to introduce any evidence that defendants’ alleged actions caused an “injury to competition.” As held by this circuit in Muenster Butane, supra, and Red Diamond, supra, proof of an anticompetitive effect is necessary to plaintiff’s case under a rule of reason analysis. Plaintiff has failed to produce such evidence, alleging only a reduction in intrabrand competition for Crawford products. This circuit, in Muenster Butane and Red Diamond has held that absent proof that defendant does not encounter significant competition from producers of competing products, an alleged reduction in intrabrand competition is insufficient to establish injury to competition. Since, as this court finds in disposition of defendants’ motion on the section 2 claims, Crawford’s products were reasonably interchangeable with those of many other manufacturers in a highly competitive industry, this court is constrained to conclude that plaintiff has failed to provide any proof of injury to competition. Additionally, the testimony of Dr. Thomas R. Saving made it abundantly clear from undisputed government statistical sources that Crawford is a small segment in the industry and completely lacks market power. This being so, it cannot affect the price of its product. It follows, therefore, that any vertical restraint on this ground alone, would not be anticompetitive at the intrabrand level. NO INJURY TO PLAINTIFF WAS SHOWN Plaintiff alleges that, as a result of defendants’ concerted refusal to deal, it suffered injury to its business. There is no “conflict in substantial evidence,” however, to create a jury question on this essential element of plaintiff’s claim. There is no evidence in the record that plaintiff was ever unable to purchase Crawford’s products. Plaintiff’s own witnesses admitted and documents in the case demonstrate the fact that it was never unable to fill an order it received from the date the alleged boycott commenced through the present. Once Capital refused to sell its product to Gibbons, the latter was immediately able to fill its orders from another distributor, Potomac. Moreover, another distributor, Franklin, was made available and remains available to fill any orders which Gibbons might require to be filled. The uncontradicted evidence in the record shows that Gibbons never compared its discount “blanket” contract with Capital with those of either Potomac or Franklin to ascertain which distributorship offered it a better contract. The only evidence on the record demonstrates that both Potomac and Franklin offered Gibbons better discounts than had Capital. Moreover, Dr. Philip D. Robers, an expert witness for defendants, a management consultant specializing in transportation problems, testified that upon comparison of the transportation costs and delivery times under the three actual or proposed distributor contracts with Gibbons, Capital contract performance had been the least desirable of the three. Plaintiff has provided no evidence that it had fared better with Capital than with the continually available alternatives it was offered or of which it availed itself. Plaintiff’s claim of injury is not sufficiently supported by the circumstances of its geographical location in New Orleans, its testimony that it was initially compelled to purchase through a “subterfuge” from Potomac, or that its special handling by a Capital employee concerned with retaining his commissions generated by Gibbons’ purchases from Capital made Capital’s contract preferable. As stated by this circuit in Malcolm v. Marathon Oil Co., 642 F.2d 845, 863 (5th Cir.1981), in a “refusal-to-deal case, a plaintiff who bypasses an obviously adequate alternative supplier should not recover for loss of his business.” Plaintiff offered evidence that had its expectations of a constant supply of goods from Capital not been frustrated, it would have been able to expand its European market. Since, however, it was not guaranteed this supply from Capital its claim is that it could not expand its business as it would otherwise have expanded. Even if Gibbons considered itself “frustrated,” this circumstance however manifested, does not allege a cognizable antitrust injury in this case. Gibbons always had a supply of Crawford products, and was assured an alternate supply of which it chose not to avail itself. Gibbons is clearly chargeable with having failed to minimize the damages it claims resulted from Capital’s refusal to deal with it. See Malcolm v. Marathon Oil Co., supra at 862-63; Golf City, Inc. v. Wilson Sporting Goods Co., Inc., 555 F.2d 426, 436 (5th Cir.1977) (“An antitrust plaintiff has a duty to mitigate damages”). Moreover, there is no allegation by plaintiff that the valves and fittings of other manufacturers were not available to it. The record reveals that the market of valves and fittings is a highly competitive one, consisting of hundreds of manufacturers of competing products. Plaintiff has always had access to these other brands and has availed itself of these competing brands on a fairly continuous basis. While the defendants introduced the testimony of Dr. James C. Boland, a certified públic account with business management background, that the exportation of valves and fittings produced a loss for the Gibbons company, this court prefers to accept pro tanto the Gibbons claim that it was making a profit and that the refusal of Capital to continue to do business with it frustrated its hopes for an increased volume of business in Europe and elsewhere. As already indicated, this would not constitute a valid antitrust injury in the circumstances of this case. ADDITIONAL BASES FOR DISMISSING PLAINTIFF’S FIRST TWO CLAIMS UNDER SHERMAN ACT SECTION ONE Plaintiff’s first two claims allege horizontal price-fixing at the manufacturing level and vertical price-fixing from the manufacturing level to the regional warehouse level. Defendants moved for a directed verdict on these claims on the grounds that the evidence was insufficient to have them submitted to the jury in two additional respects: 1) the defendant corporations and individuals were unable, as a matter of law, to combine or conspire with each other as alleged by plaintiff; and 2) plaintiff lacked standing to challenge the actions of defendants engaged at the regional warehouse level and above. This court agrees. NO COMBINATION OR CONSPIRACY Plaintiff’s claims allege that Fred A. Lennon and Francis J. Callahan, officers of Crawford at all times relevant to this litigation, set the prices at which Crawford, Whitey, Nupro, Cajon, Sno-Trik, Central Swagelok, Southern Swagelok, and Eastern Swagelok sold Crawford valves and fittings. As a matter of law, this court finds that Messrs. Lennon and Callahan are incapable of conspiring to fix the prices of the above corporations. It is well-settled, as plaintiff concedes, that there can be no conspiracy between a corporation and its corporate officer. Solomon v. Houston Corrugated Box Co., 526 F.2d 389, 396 (5th Cir.1976); Nelson Radio & Supply Co. v. Motorola, Inc., 200 F.2d 911, 914 (5th Cir.1952), cert. denied, 345 U.S. 925, 73 S.Ct. 783, 97 L.Ed. 1356 (1953). In the immediate case, therefore, Messrs. Lennon and Callahan do not have the capacity to conspire with Crawford and the Crawford manufacturers and warehouses of which they are officers. There is no doubt that Mr. Lennon calculates the prices at which his companies sell their products. The Crawford manufacturing companies’ prices are set forth in a price list, established by Mr. Lennon. Mr. Lennon then calculates the prices at which the regional warehouses acquire Crawford products from its manufacturers. The use of such a price list and the discount schedules for bulk purchases permits the Crawford warehouses to offer Crawford distributors its products throughout the country without the possibility of price discrimination. Plaintiff offers no reason why it should be improper for an officer, employee and controlling shareholder of family-owned companies to decide matters necessary to the operations of his enterprise. Those corporations must sell their products at some price. This court is unable to comprehend any basis for viewing as “price fixing” this basic corporate need to price its own products. Mr. Lennon had the final decision as to the setting of prices for Crawford products. Mr. Callahan, as an officer and shareholder of the Crawford companies, assisted Mr. Lennon in establishing Crawford prices. This effort does not supply the “conspiracy” element necessary to a section one violation. It is natural for officers of a corporation to consult each other over corporate policy. To extend potential antitrust liability to such routine corporate activities would be a dangerous extension well beyond the intended reach of the antitrust laws. LACK OF STANDING The evidence in the record shows that plaintiff Gibbons has never purchased the Crawford product directly from the defendants involved in these two allegations of price fixing. Moreover, the evidence shows that plaintiff would have had no right to purchase products wholesale, directly from either the warehouses or manufacturers. The only concerns from whom plaintiff did or could purchase Crawford products are the Crawford distributors. Plaintiff does not name any of these distributors as defendants in its first two claims of price fixing. One who has not purchased directly from an alleged antitrust violator is precluded by law from asserting a claim for price fixing against the alleged violator. The Supreme Court has ruled that an indirect purchaser is not “injured” in his business or property by such an alleged violation. Illinois Brick Co. v. Illinois, 431 U.S. 720, 97 S.Ct. 2061, 52 L.Ed.2d 707 (1977). Thus, plaintiff Gibbons lacks standing to assert its first two claims of price fixing against the corporations with which it has never dealt. C. MOTION FOR DIRECTED VERDICT ON SECTION 2 ATTEMPT TO MONOPOLIZE AND CONSPIRACY TO MONOPOLIZE CLAIMS The offense of attempt to monopolize has two elements: 1) specific intent to acquire monopoly power in the relevant market and 2) a dangerous probability of success in that endeavor. The offense of conspiracy to monopolize has three elements: 1) an agreement; 2) entered into with the specific intent to accomplish the unlawful result of achieving a monopoly; and 3) the commission of an overt act in furtherance of the conspiracy. Prior to trial, plaintiff Gibbons withdrew any claim of monopolization it may have at one time asserted. Plaintiff states his section 2 claims as attempt to monopolize and conspiracy to monopolize the Crawford product in the North Sea area. The threshold inquiry for establishing the existence of either offense is the relevant product and geographic market for Crawford’s goods. Plaintiff bears the burden of proving the relevant market. United States v. E.L DuPont de Nemours & Co., 351 U.S. 377, 381, 76 S.Ct. 994, 999, 100 L.Ed. 1264 (1956); Spectrofuge Corp. v. Beckman Instruments, Inc., 575 F.2d 256, 276 (5th Cir.1978), cert. denied, 440 U.S. 939, 99 S.Ct. 1289, 59 L.Ed.2d 499 (1979). Failure of proof on this issue would be sufficient to remove the alleged offenses from the jury’s consideration. In the immediate case, plaintiff Gibbons has failed to present evidence which would permit a finding that the “Crawford Product in the North Sea” is the relevant market for purposes of stating a Sherman Act section 2 violation. A fundamental error underlying plaintiff’s case has been its view of the product market as confined to Crawford products. This proferred view is wholly inconsistent with the actual test enunciated by the Supreme Court, i.e., the product market in which any given produce competes “is composed of products that have reasonable interchangeability for the purposes for which they are produced — price, use and qualities considered.” United States v. E.I. DuPont de Nemours & Co., supra 351 U.S. at 404, 76 S.Ct. at 1012 (emphasis added). None of the cases cited by the plaintiff in its memorandum in opposition to defendants’ motion support its contentions when applied to the evidence adduced at trial. The record contains no suggestion that Crawford products are unique, so as to constitute a market unto themselves, under the requisite test of “reasonable interchangeability.” Nor does the record offer any evidence that Crawford faces little, or no, competition from the marketplace in its manufacture of valves and tube fittings. Rather, the only evidence in the record leads to the conclusion that Crawford products are “reasonably interchangeable” with those of hundreds of other manufacturers in an intensely competitive industry. Persuasive and uncontradicted evidence was presented by defendants’ expert witness, Dr. Thomas R. Saving, a professor of economics and a consultant of long experience in the antitrust field. His testimony included an examination of the United States Bureau of Census’ published statistical findings of industrial concentration ratios. Of the 438 industrial segments compared by the Bureau of Census in a table in evidence, the valve and fitting industry is 30th from the bottom of the list. Dr. Saving’s conclusion drawn from this and other evidence was that the valve and fitting industry is highly competitive. Plaintiff offered no evidence to the contrary. Rather, plaintiff’s own expert and lay witnesses on cross-examination and by deposition admitted the competitive nature of the valve and fitting industry. Plaintiff has suggested that Crawford products were a market unto themselves and that the products were not “reasonably interchangeable” because their component parts were not perfectly interchangeable with the component parts of other manufacturers’ products. This argument confuses the definition of “product market” for antitrust analysis. Reasonable interchangeability of the total product is the standard and not, as plaintiff suggests, identity of the product and its component parts. To adopt plaintiff’s view would render every manufacturer a monopolist of his own product, a result which flies in the face of the antitrust laws. The Supreme Court squarely dismissed plaintiff’s theory in United States v. E.I. DuPont de Nemours & Co., supra at 380-81, 76 S.Ct. at 999: Every manufacturer is the sole producer of the particular commodity it makes but its control in the [section 2] sense of the relevant market depends upon the availability of alternative commodities for buyers ... This interchangeability is largely gauged by the purchase of competing products for similar uses considering the price, characteristics and adaptability of the competing commodities. The mere existence of patents on a few of Crawford’s 4,000 products does not render its product unique for purposes of section 2 analysis, inasmuch as the record unequivocally demonstrates the reasonable interchangeability of Crawford products with those of hundreds of others in a highly competitive industry. The existence of patents in antitrust cases has never led the Supreme Court or the courts of this circuit to find the patent holder as such a monopolist of his patented product. Only if, coincidentally, the patented product is not reasonably interchangeable with other manufacturers’ products may it be considered unique in antitrust parlance. In the immediate case, the existence of a few, extremely “thin” patents owned by Crawford cannot raise any reasonable inference that Crawford products constitute a relevant product market. This is demonstrated by the actual existence of hundreds of other manufacturers competing with Crawford for sales in this industry. Mr. Callahan, when called as plaintiff’s witness, testified that since 1850 over 80,000 patents have been issued in the valve and fitting industry; that all of Crawford’s competitors have patents, and that 1700 to 1800 are considered to be current. The existence of this large number of patents has not impaired the intensely competitive character of this industry. None of the cases cited by plaintiff in support of its assumption that Crawford products is the relevant product market are persuasive. All the cases cited are clearly distinguishable, including the two cases stressed by counsel at oral argument of the motions. In Associated Radio Service Co. v. Page Airways, Inc., 624 F.2d 1342 (5th Cir. 1980), cert. denied, 450 U.S. 1030, 101 S.Ct. 1740, 68 L.Ed.2d 226 (1981), the Fifth Circuit upheld the jury’s finding that the product market was limited to a single manufacturer where there was “ample evidence of high entry barriers and of the difficulty ... encountered in switching back and forth from one model of aircraft to the next .... ” Id. at 1349. In the immediate case, as stated above, there is no such special factor capable of raising any doubts as to the “reasonable interchangeability” of Crawford products with those of its many competitors. Similarly, the case of Coleman Motor Co. v. Chrysler Corp., 525 F.2d 1338 (3d Cir.1975), is not persuasive. In Coleman, the Third Circuit ordered a new trial on the plaintiff’s claim that defendant attempted to monopolize the Dodge car market in Allegheny County because the trial court had erroneously assumed that narrow market in its instructions to the jury. The circuit court declined to enter a judgment notwithstanding the verdict, although the parties conceded that no section 2 violation would exist if a broader product market were assumed, solely because the very “confused” trial record on this issue made a new trial “just under the circumstances.” Id. at 1349 (quoting 28 U.S.C. § 2106). Neither the procedural nor the substantive posture of the Coleman case is present before this court. Conversely, this court is persuaded by the cases cited by defendants in their memorandum on the issue of relevant market. The Fifth Circuit’s opinion in Muenster Butane, Inc. v. Stewart Co., supra at 295-96, is particularly persuasive, as are the opinions in H. & B. Equipment Co. v. International Harvester Co., supra, and Rice Tire Co. v. Michelin Tire Corp., supra. The record is also devoid of evidence to establish the relevant geographic market in which Crawford competes. Plaintiff’s only expert witness, Dr. Urban Ozanne, expressly disavowed making any finding with respect to the relevant geographic market. Moreover, a diligent search of the record for any lay testimony on this issue discloses no substantial evidence to create ■ a jury question. The attenuated inferences drawn from evidence in the record by plaintiff would constitute, at the very most, “a mere scintilla of evidence.” This court thus finds that the evidence presented by plaintiff is insufficient to define the relevant geographic market and is equally insufficient to permit a jury to conclude that the North Sea area constitutes the geographic market. The above failure of proof by plaintiff constrains this court to hold that plaintiff’s claims under section 2 of the Sherman Act must be dismissed. No reasonable jury could conclude, on the basis of the evidence introduced at trial, that Crawford could be held liable for either attempt to monopolize or conspiracy to monopolize the only product market substantiated by the record— that of valves and fittings. PREDATORY PRICING CLAIM Plaintiff’s complaint alleged “predatory pricing” by defendants in the pricing of Crawford products in the European market. At trial, this charge was dropped as an independent basis for recovery. Plaintiff, however, continued to allege predatory pricing as one of several actions by defendants which, taken together, violated the Sherman Act. Defendants moved for a directed verdict on this claim at the close of plaintiff’s case. After oral argument, the motion was granted. Plaintiff’s only evidence on this issue surrounded alleged “price reductions” in Crawford products sold in Europe. This evidence is wholly insufficient, as a matter of law, to constitute predatory pricing. Gibbons’ claim is based upon a 1978 currency adjustment by Crawford in its sale of products in Europe. In 1978, Crawford sold its United States manufactured products to the European market through its warehouse, Microventil, in Switzerland. It thereby transacted all European business in Swiss francs, the home currency of Microventil. Crawford set the price for its European sales by a straight mathematical formula based upon its United States price list. Their domestic price was multiplied by a factor which reflected the value of the franc to the dollar and which took into account a markup for transportation and costs. From 1977 to 1979, the currency exchange rates between the dollar and Swiss franc fluctuated greatly. This instability caused distortion in the price of Crawford products sold in Europe. As a result, Crawford reevaluated its currency adjustment formula and began to update its currency conversion factor periodically in an effort to keep its European prices consistent with those in the United States. The United States price list never reflected a reduction in prices. Although these adjustments were imperfect, they narrowed the differential in price which would have otherwise existed. Gibbons alleges that the above currency adjustment constituted predatory pricing. This contention is wholly erroneous. First, Gibbons has offered no evidence to support its assertion that a predatory price reduction occurred in 1978. The only witnesses who testified on this matter for plaintiff did not deny that a currency adjustment had been made. Rather, they merely gave conclusory testimony that the prices had been dropped. Their testimony showed an apparent confusion over the procedure and effects of a currency adjustment. The above conclusory and confused testimonial allegations of predatory pricing are insufficient to warrant the submission of any such issue to the jury. Second, Gibbons conceded that defendants’ pricing of their products had always been above cost. It argued, however, that this court recognize their allegations as constituting “quasi-predatory pricing.” This court declines to thus expand the concept of predatory pricing well beyond its intended reach. A pricing policy which results in a profit cannot, as a matter of law, result in predatory pricing. Under the applicable legal standard, therefore, plaintiff has neither alleged nor offered evidence of predatory pricing. CONCLUSION Plaintiff’s motion for a directed verdict is denied. Defendants’ motion for a directed verdict is granted. The action is dismissed with costs to plaintiff. OPINION ON COUNTERCLAIM Defendants-counterclaimants have moved for a judgment notwithstanding verdict or, in the alternative, for a new trial after a jury verdict in favor of plaintiff on the counterclaim. Defendants’ motions allege that: 1) the verdict was contrary to the weight of the evidence; 2) the court omitted from its interrogatories a material issue of fact raised by the pleadings and by the evidence in the case; and 3) the jury was unduly prejudiced by statements in the closing argument of plaintiff’s counsel. This opinion is concerned with the disposition of the counterclaim submitted to a jury on November 18, 1981. The main action, brought under sections 1 and 2 of the Sherman Act, was not submitted to the jury, because the court granted defendants’ motion for directed verdicts at the close of the evidence submitted by both sides. The court announced its disposition of the antitrust claims in open court along with a succinct explanation of the grounds therefor, and later filed an opinion setting forth in detail the basis for its ruling. That opinion, dated December 4, 1981, was filed on December 8, 1981. The jury considered the narrow issue raised by defendants’ counterclaim under a Louisiana general tort statute which provides as follows: Art. 2315. Every act whatever of man that causes damage to another obliges him by whose fault it happened to repair it. [Louisiana Civil Code] In essence, the defendants claimed that they had been put to a very substantial expense of considerably more than a million and a half dollars to defend the plaintiff’s lawsuit, which was baseless, and which was brought for the ulterior purpose of forcing the defendant Crawford into awarding a distributorship to plaintiff. The questions submitted to the jury are set forth in an appendix attached hereto. Since the affirmative answer by the jury to the first question indicated that the lawsuit had been brought in good faith after full disclosure to the plaintiff’s attorneys, the jury was instructed to go no further, and the court directed entry of a judgment in favor of plaintiff. The court does not agree that the verdict is tainted by any legal insufficiencies or by faulty factual findings. The Louisiana statute in question did not provide the court with any firm guidance regarding its application to the facts of this case, nor was the court able to find any precedents in the jurisprudence of Louisiana which permitted the use of this statute as support for a tort damage claim essentially because the plaintiff brought a legally baseless action. It is assumed for the purposes of the discussion which follows that the plaintiff had no valid antitrust claims against the defendants. This was the gist of the court’s ruling at the close of the evidence. The court reaffirms that ruling. There was abundant evidence in the case that Messrs. Richard and Cecil Keeney, the principal actors for the plaintiff in the transactions preceding the lawsuit, were anxious to do business with the defendant Crawford, the manufacturer of valves and tube fittings, on a basis which would rebound to their profit either by way of a distributorship or by being permitted on some agency basis to exploit the Crawford export business. At various times and places the Messrs. Keeney manifested their desire to establish a working relationship with Crawford and indeed after the lawsuit was begun indicated their willingness to settle the litigation in return for a distributorship. Mr. Richard Keeney had been a salesman for one of the Crawford distributors, the defendant, Capital Valve and Fitting Co., Inc. (Capital), of Baton Rouge, Louisiana. He was privy to the method and extent of their profitable operations and at one time, subsequent to his employment with Capital, a suggestion was made on his behalf that Capital’s Louisiana distributorship territory be reduced in size and that his company, Gibbons, should be allotted the substantial area remaining. There was also evidence which, if accepted by the jury, would have indicated that the Messrs. Keeney made less than a full disclosure of the facts relating to the availability of Crawford products to their New Orleans attorneys, Messrs. Fishman and Schaub when they were first consulted about their alleged grievances against the defendants. There is evidence to support the view that these attorneys were not told the full truth and that they were thereby manipulated for the purpose of bringing about a baseless assertion of grievances against the defendants and using the threat of litigation to secure a distributorship agreement with defendants. However, there was countervailing evidence that Messrs. Fishman and Schaub were advised in October 1978 to the effect that plaintiff had a source of supply for Crawford products in the Washington, D.C. area — information necessary to effective legal advice on plaintiff’s several boycott claims. Ultimately, and when the San Francisco attorneys were retained to file suit and to represent the plaintiff at trial, there is no dispute that a full disclosure was made as of that time, as the complaint in the action filed in March 1979 attests. The jury’s answer to the first question exculpates the Messrs. Keeney, and hence the plaintiff Gibbons, of any bad faith in their factual disclosures to their attorneys. The court can construe this finding as applicable generally to all the attorneys retained by them. So construed, the facts reduce themselves substantially to this: That the facts related to the attorneys were substantially complete and accurate and constituted, at least in the attorneys’ opinion, a valid basis for the lawsuit. In the light of this, there was no justification for asking the jury to consider the second question as to whether Gibbons brought the law suit in bad faith for the purpose of obtaining a distributorship arrangement from Crawford. An inquiry into the motives of the plaintiff, in light of the answer to the first question, would have been superfluous. If Gibbons’ grievances were asserted by its attorneys after a good faith disclosure of all the facts it would seem redundant to press the inquiry further in order to determine the possible additional or hidden motives which gave rise to the lawsuit. Litigants are seldom in love with each other. Indeed, litigants may and often do manifest very deep reciprocal hostility and animosity. Unfortunately, this appeared to be the case in this litigation. This court declines to construe the statute to mean that a facially viable and valid lawsuit can be tainted and become the subject of a tort action by virtue of unfriendly or ulterior motives entertained by the persons initiating the suit. It seems to this court that a vast area of public policy touching upon the availability of legal remedies would be impinged upon by any such inquiry. The statute in question would require operative terms of a far more explicit nature to permit it to be applied under these circumstances. Even if it were so drawn as to permit such an interpretation, this court has serious reservations regarding the validity of such a statute. The foregoing discussion does not detract from the lamentable situation in which the defendants presently find themselves. They have expended more than one million seven hundred thousand dollars to defend themselves against what this court believes were legally baseless claims under sections 1 and 2 of the Sherman