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Mullis v. Arco Petroleum Corp.

United States Court of Appeals for the Seventh Circuit

August 5, 1974, Decided

No. IP 73-C-226. September Term, 1973; January Session, 1974. No. 73-1625


 [*292]  STEVENS, Cir. J.:

The question presented by this appeal is whether either the Robinson-Patman Act 1 or § 2 of the Sherman Act 2 protects a local jobber from an otherwise lawful termination at a time when, because of the existence of an acute shortage, he cannot find another source of supply.

 [**2]  Plaintiff has been a distributor of petroleum products for defendant, ARCO, or its predecessor, Sinclair, in Lawrence County, Indiana, and its environs for the past 20 years. 3 Notwithstanding occasional threats by plaintiff to take his patronage elsewhere, and notwithstanding various disputes which defendant emphasizes and plaintiff minimizes, nothing serious enough to cause a rupture in the business relationship occurred until shortly before the "energy crisis."

On February 15, 1973, defendant notified plaintiff that his distributorship was cancelled; the termination date, originally set for March 31, 1973, was extended to May 31, 1973. 4 Plaintiff canvassed some 20 other suppliers [**3]  of petroleum products to obtain a new source, but none would agree to serve him. On May 7, 1973, he commenced this litigation.  [*293]  In his complaint plaintiff described his business, the receipt of the notice of cancellation and the current market situation, and alleged that ARCO's acts constituted "an attempt to monopolize the marketing area in which plaintiff operates," and resulted in discrimination against him. After an evidentiary hearing, the district court entered an order enjoining defendant from refusing to furnish petroleum products to the plaintiff until further order of court. Defendant appeals from that order.

There is no question about the sufficiency of plaintiff's proof of irreparable injury. His business, upon which he places a value of $500,000, involves the distribution of approximately 433,000 [**4]  gallons of gas and 250,000 gallons of fuel oil per month. He services 20 retail gasoline stations, four of which he owns, and also supplies various governmenal units, industrial customers and farms in and about Lawrence County, Indiana. Since he sells only ARCO petroleum products, and since he is unable to obtain a new supplier, it is reasonable to infer that termination of his distributorship will terminate his business. 5 

 [**5]  ]

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502 F.2d 290 *; 1974 U.S. App. LEXIS 7326 **; 1974 Trade Cas. (CCH) P75,180; 1974-2 Trade Cas. (CCH) P75,180

Perry Mullis, d/b/a Mullis Petroleum Co., Plaintiff v. Arco Petroleum Corp., Atlantic Richfield Corp., Defendants

Prior History:  [**1]   Appeal from U.S. District Court, Southern District of Indiana, Indianapolis Division.

Disposition:  Reversed.


Sherman Act, shortage, products, relevant market, distributor, monopolize, termination, oil, competitors, gasoline, monopoly, petroleum product, brands, retail, customers, controls, injunction, regulation, stations, jobber, effective, selling, no evidence, distributorship, cancellation, appraised, petroleum, outlets, buyer

Antitrust & Trade Law, Sherman Act, General Overview, Civil Procedure, Remedies, Injunctions, Preliminary & Temporary Injunctions, Robinson-Patman Act, Claims, Coverage, Commerce Requirement, Regulated Practices, Market Definition, Relevant Market, Monopolies & Monopolization, Actual Monopolization, Attempts to Monopolize, Elements, Sherman Act, Business & Corporate Law, Distributorships & Franchises, Causes of Action, Restraints of Trade