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W.J. Seufert Land Co. v. National Restaurant Supply Co.

June 21, 1973


Appeal from Circuit Court, Wasco County. J. R. Campbell, Judge.

Roger L. Dick, The Dalles, argued the cause for appellant. On the briefs were Dick & Dick, The Dalles.

Carol A. Hewitt, Portland, argued the cause for respondent. With her on the brief were Lindsay, Nahstoll, Hart, Duncan, Dafoe & Krause, Portland.

Tongue, Justice. O'Connell, Chief Justice, and McAllister, Denecke, Holman and Bryson, Justices.


This is an action for treble damages under the Oregon "Anti-price Discrimination Law," ORS ch 646. The case arises out of an agreement for the sale of restaurant equipment by defendant to plaintiff by reason of the fact that defendant paid the sum of $2,784.13, or 10 per cent of the purchase price received by it, to the lessee of the restaurant, to whom plaintiff had resold the equipment. Plaintiff appeals from a judgment in favor of defendant.

The trial court had previously entered an order overruling plaintiff's demurrer to an affirmative defense alleging that defendant was engaged in the Northwest in the sale of equipment much of which is manufactured in other states; that some of the equipment sold to plaintiff was ordered from sources in other states for delivery to plaintiff; that plaintiff's restaurant will serve interstate travelers; that "[d]efendant is engaged in interstate commerce, and the transaction which is the subject of Plaintiff's Complaint significantly affects interstate commerce."*fn1

Plaintiff then filed a plea in abatement to defendant's affirmative defense, following which the issues raised by these pleadings were tried separately before the court, without a jury. The court then dismissed plaintiff's complaint, based upon findings that the allegations of the affirmative defense were true; that the sale was "in interstate commerce" and that ORS ch 646 applies only to "trade or commerce within" the state of Oregon.*fn2

Plaintiff contends on this appeal that the trial court erred in overruling its demurrer to defendant's affirmative defense and in dismissing plaintiff's complaint.

Defendant cross-appeals, contending that plaintiff's complaint fails to state a cause of action either at common law or under ORS ch 646 and that ORS ch 646 has no application to "discounts" paid to "third parties," but applies only to those paid to the other party to a transaction or his agent.

It appears from the evidence offered on trial of plaintiff's plea in abatement to defendant's affirmative defense that plaintiff is the owner of a building at The Dalles and is an Oregon corporation. Defendant is a wholesaler in restaurant equipment and is a Washington corporation, but is authorized to do business in Oregon under the assumed business name, Brodie Hotel Supply of Oregon. Defendant operates its Oregon business from an office in Portland, where it has an Oregon resident as manager and also has a warehouse.

On January 6, 1967, plaintiff and defendant entered into an agreement for the purchase by plaintiff from defendant of various items of restaurant equipment, following negotiations in Oregon between plaintiff's president and a salesman of "Brodie Hotel Supply of Oregon," who was also an Oregon resident. Defendant's Oregon manager testified that the sale "originated in Oregon, out of [defendant's] Oregon office."

Pursuant to that transaction defendant then issued 30 purchase orders to various suppliers for the equipment to be installed in plaintiff's restaurant building. Nineteen of these purchase orders were directed

to suppliers in Oregon. Eleven were directed to suppliers in other states. According to defendant's salesman "[m]ost of the equipment is manufactured in other states and brought together to Portland or to wherever the job site is located, and installed" and that "[s]ome pieces are sent directly to the job site and some pieces are brought into the store and held until delivery can be coordinated and re-shipped to the job site."

Defendant also offered testimony that it was expected that the restaurant, located at the interstate bridge over the Columbia River at The Dalles, would have 50 per cent of its business from out-of-state customers.

At the trial on plaintiff's plea in abatement to defendant's affirmative defense no testimony was taken to prove or disprove the allegation of plaintiff's complaint that defendant had paid $2,784.13 of the proceeds of the sale to "Crazy Eric's of Oregon." There was testimony, however, that at the time of the purchase and sale of the restaurant equipment on January 6, 1967, it was contemplated that the building would be leased by plaintiff to "Crazy Eric's of Oregon" for operation as a restaurant and that the restaurant equipment would be resold to it; but that the corporation by that name had not yet been incorporated. Upon its subsequent incorporation it appeared that defendant's Oregon manager and his wife were among the stockholders of that corporation. The promoter and one of the principal stockholders of that corporation was Wayne C. Ericksen, who apparently was also a principal stockholder in a Washington corporation which operated some 19 restaurants in Washington. He also planned to open other "Crazy Eric's" restaurants in Oregon.

When defendant sold the equipment to plaintiff it knew, through its Oregon manager, that "Crazy Eric's" was to be the operator of the restaurant. Indeed, defendant's Oregon manager testified that it had been his belief that the restaurant equipment was being sold to "Crazy Eric's," as the purchaser of the equipment, rather than to plaintiff as the purchaser. Plaintiff was apparently considered by defendant's manager as financing the purchase of the equipment by "Crazy Eric's."

As the transaction was consummated, however, plaintiff purchased the equipment and paid its purchase price to defendant. The billing and bookkeeping on the transaction on behalf of defendant was handled by its main office in Seattle. Plaintiff then resold the equipment to "Crazy Eric's" under a conditional sales contract. "Crazy Eric's of Oregon" subsequently became bankrupt.

1. The Robinson-Patman Act did not "pre-empt the field" so as to invalidate the Oregon "Anti-price Discrimination Law."

Defendant contends that the federal Robinson-Patman Act, 15 USC ยง 13 (c), "pre-empts the area of interstate commerce to which plaintiff contends ORS 646.060 applies," with the result that it is "either unconstitutional or unenforceable," unless construed to have been intended to apply only to "purely intrastate transactions not covered by the Robinson-Patman Act." Defendant concedes that "the question has apparently not been litigated with respect to the federal versus the state regulation of the field of price discrimination," but contends that this result must follow

"by analogy" to other fields held to have been pre-empted by federal legislation.*fn3

It is, of course, well established that a state statute affecting interstate commerce is invalid when it conflicts with a federal statute enacted pursuant to the power of Congress to regulate interstate commerce.*fn4 In considering this question in a given case the courts start with the assumption that the police powers of the States were not superseded by the federal statute.*fn5 Even the fact that a state statute "coincides" with a federal statute, as in this case, does "not mean the automatic invalidity" of the state statute.*fn6 Indeed, such state statutes may be valid even

though they impose higher standards than those provided by a corresponding federal statute.*fn7

The test to be applied in the determination of these questions, as stated by the Supreme Court of the United States in Florida Avocado Growers v. Paul, 373 U.S. 132, 142, 83 S ...

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