Appeal from a judgment entered in the Southern District of New York, Richard Owen, District Judge, following a remand from our Court sitting en banc, 579 F.2d 126 (2 Cir.), cert. denied, 439 U.S. 946 (1978), the judgment on remand having been entered on a directed verdict for defendants in an antitrust action which alleged a conspiracy in unreasonable restraint of trade to exclude plaintiff from the vacuum cleaner market in violation of the Sherman Act. Affirmed on the ground of insufficient evidence to establish a conspiracy.
Before Timbers, Van Graafeiland and Newman, Circuit Judges.
This action was commenced by appellant, Oreck Corporation, in September 1972. Following a jury trial, judgment was entered in July 1976 against appellees, Whirlpool Corporation and Sears, Roebuck and Co., and in favor of appellant on two counts of a seven count complaint charging violations of Section 1 of the Sherman Act, 15 U.S.C. § 1 (1976). On appeal, a divided panel of this Court reversed and remanded the case for a new trial. 563 F.2d 54 (2 Cir. 1977). On rehearing en banc, we adhered to the decision of the panel majority and remanded the case for a new trial. 579 F.2d 126 (2 Cir.), cert. denied, 439 U.S. 946 (1978).
At the close of appellant's case at the trial on remand, the district court, Richard Owen, District Judge, granted appellees' motion for a directed verdict. From the judgment entered thereon, appellant has appealed. We affirm on the ground that there was insufficient evidence to establish a conspiracy in restraint of trade.
We assume familiarity with the comprehensive statements of the facts underlying this dispute as set forth in the late Judge Anderson's panel and en banc opinions referred to above.
Since 1957 Whirlpool has manufactured vacuum cleaners for Sears. The latter has sold them under Sears' "Kenmore" label. Whirlpool also has tried, unsuccessfully, to sell its vacuum cleaners under its own name. From 1963 until 1971 Oreck was the exclusive distributor of vacuum cleaners under the "Whirlpool" trade name.
On December 31, 1971 Whirlpool allowed Oreck's exclusive distributorship to expire according to its terms and refused to extend it. Oreck commenced the instant action in September 1972 claiming that Whirlpool's refusal to renew the sales agreement resulted from an illegal contract, combination or conspiracy between Whirlpool and Sears unreasonably to restrain trade by excluding Oreck from the vacuum cleaner market in the United States and Canada.*fn1 More specifically, Oreck alleged that its distributorship was terminated by Whirlpool at the insistence of Sears, a much larger purchaser of Whirlpool products.
Appellees contended by way of defense that Whirlpool refused to renew Oreck's contract because of Oreck's failure to follow Whirlpool's marketing strategy for its vacuum cleaners. According to testimony adduced at the first trial, as Judge Anderson pointed out in our earlier en banc opinion, Whirlpool intended to market its name brand vacuum cleaners in retail department stores, but Oreck's campaign focused increasingly on janitorial supply houses and mail order sales. 579 F.2d at 128.
Appellees further contended that Sears never considered Oreck a competitive threat. Indeed, despite Oreck's claim that it sold vacuum cleaners at "one-half the retail price," there was no evidence that it ever undercut Sears on the price of vacuum cleaners.
A plaintiff in a civil action, in order to sustain its claim under Section 1 of the Sherman Act, must establish two elements: first, that the defendants entered into a "contract, combination ... or conspiracy"; and, second, that it was "in restraint of trade or commerce among the several states." 15 U.S.C. § 1 (1976); House of Materials, Inc. v. Simplicity Pattern Co., 298 F.2d 867, 870 (2 Cir. 1962); DuPont Glore Forgan Inc. v. Am. Tel. & Tel. Co., 437 F. Supp. 1104, 1111 (S.D.N.Y.1977), aff'd, 578 F.2d 1367 (2 Cir. 1978). We hold that Oreck did not sustain at trial its burden of ...