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Graphic Prods. Distribs. v. Itek Corp.

United States Court of Appeals for the Eleventh Circuit

October 7, 1983

No. 81-7977

Opinion

 [*1563]  TJOFLAT, Circuit Judge:

This is an antitrust case involving nonprice, vertical restraints on trade. The defendant, Itek Corporation (Itek), appeals from a jury verdict in favor of plaintiff Graphic Products Distributors, Inc., (GPD) in a suit brought under, inter alia, Section 1 of the Sherman Act, 15 U.S.C. § 1 (1976), and Section 4 of the Clayton Act, 15 U.S.C. § 15 [**2]  (1976 & Supp. V 1981). Itek contends on appeal that the district court should have granted it a directed verdict or judgment notwithstanding the verdict (n.o.v.) because (1) the evidence was insufficient to establish that its distribution system was an unreasonable restraint of trade; and (2) the evidence was insufficient to establish the amount of GPD's damages. It also contends that the district court should have granted it a new trial because the jury instructions misstated the applicable law. We affirm.

 [*1564]  I.

Although we conclude that the evidence was sufficient to create jury questions regarding both liability and damages, we do so not without some reluctance. The evidentiary record is neither as extensive nor as precise as one would expect in a well-tried antitrust case. Most important, the history of Itek and evidence of its need to utilize the challenged vertical restraints to compete in the marketplace were not fully presented to the district court.

Itek's Graphic Products Division manufactures graphic equipment and supplies for the national graphic arts market. Its product line includes offset platemaking machines (platemakers), duplicators, camera processors,  [**3]  and microfilm equipment. 1 Itek sells supplies to accompany these products, and provides the needed servicing as well. It had annual revenues of some $85,000,000 in 1977, the only year for which we have this data. Approximately one-third of those sales were in equipment, the rest in service and supplies. The record does not indicate what percentage of this revenue derived from each of Itek's product lines.

Prior to 1975, Itek distributed its equipment and supplies exclusively through its own sales organization. It had twenty-two direct sales or branch offices, concentrated in major urban areas with large potential markets. In order to increase sales in the areas outside those major urban centers already relatively well-covered by the branch offices, Itek decided to switch to a dual distribution system in the period 1975-76.

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717 F.2d 1560 *; 1983 U.S. App. LEXIS 16213 **; 1983-1 Trade Cas. (CCH) P65,670; 1983-2 Trade Cas. (CCH) P65,670

GRAPHIC PRODUCTS DISTRIBUTORS, INC., Plaintiff-Appellee, v. ITEK CORPORATION, individually and d/b/a Itek Graphic Products, Defendants-Appellants

Subsequent History:  [**1]   As Amended

Prior History: Appeal from the United States District Court for the Northern District of Georgia.

CORE TERMS

intrabrand, restrictions, territorial, interbrand, vertical, manufacturer, dealer, distributors, effects, damages, sales, consumer, termination, products, market power, antitrust, rule of reason, platemakers, pro-competitive, customers, distribution system, anticompetitive, distributorship, branch office, competitors, independent distributor, differentiation, assigned, Legality, selling

Civil Procedure, Trials, Judgment as Matter of Law, General Overview, Antitrust & Trade Law, Sherman Act, Monopolies & Monopolization, Conspiracy to Monopolize, Sherman Act, Price Fixing & Restraints of Trade, Vertical Restraints, Torts, Products Liability, Regulated Practices, Market Definition, Relevant Market, Appeals, Standards of Review, Clearly Erroneous Review, Nonprice Restraints, Business & Corporate Law, Distributorships & Franchises, Causes of Action, Restraints of Trade, Per Se Rule & Rule of Reason, Private Actions, Remedies, Business Torts