Krist Oil Co. v. Bernick's Pepsi-Cola of Duluth

354 F.Supp.2d 852

KRIST OIL CO., INC., Plaintiff, v. BERNICK'S PEPSI-COLA OF DULUTH, INC., Defendant.

No. 04-C-187-C.

United States District Court, W.D. Wisconsin.

January 20, 2005.

Donn Atanasoff, for Plaintiff.

Quentin R. Wittrock, Gray, Plant, Mooty, Mooty & Bennett, Minneapolis, MN, for Defendant.

OPINION AND ORDER

CRABB, District Judge.

Plaintiff Krist Oil Co., Inc. is suing defendant Bernick's Pepsi-Cola of Duluth, Inc. for monetary, declaratory and injunctive relief for three alleged wrongs: (1) implementing a pricing scheme in violation of Wis. Stat. § 133.04, Wis. Admin. Code § ATCP 102.12 and the Robinson-Patman Act, 15 U.S.C.A. § 13; (2) wrongfully terminating plaintiff's dealership in violation of the Wisconsin Fair Dealership Act; and (3)failing to reimburse plaintiff for its promotional giveaways in violation of Wis. Admin. Code § ATCP 131.02. This case is now before the court on defendant's motion to dismiss for failure to state a claim on which relief can be granted, Fed.R.Civ.P. 12(b)(6). Defendant's motion will be granted in part and denied in part. Jurisdiction is present. 28 U.S.C. § 1332.

For the sole purpose of deciding the present motion, I accept as true plaintiff's allegations in its second amended complaint.

ALLEGATIONS OF FACT

Plaintiff Krist Oil Co., Inc. is a Michigan corporation with its principal place of business in Iron River, Michigan. It owns and operates 66 gasoline and convenience stores in Michigan's upper peninsula, northern Wisconsin and Minnesota. Plaintiff has two stores in Superior, Wisconsin: one that opened in November 1999, and the other in September 2000. Bernick's Pepsi-Cola of Duluth, Inc. is a Minnesota corporation with its principal place of business in Waite Park, Minnesota. Defendant has been the exclusive wholesale distributor of Pepsi-Cola products in the Superior, Wisconsin area since at least November 1999.

Defendant supplies Pepsi products to plaintiff's two Superior stores from its distribution center in Duluth. The parties coordinate in advertising and promotional programs. In order to obtain promotional discounts, plaintiff must comply with defendant's advertising, purchase volume and display requirements, which include dedicated coolers, shelf space and floor space in high traffic areas of the stores and use of defendant's promotional and advertising materials. Pepsi products represent a large fraction of plaintiff's beverage sales.

A. Coupon Bottle Cap Program

From the time the two Superior stores opened to the present, the bottles of Pepsi products that defendant supplied plaintiff had "coupon bottle caps," which entitled the retail purchaser to free Pepsi products. Plaintiff has accepted the bottle caps from purchasers in exchange for Pepsi products. Defendant did not seek or obtain plaintiff's permission before implementing the bottle cap program in its stores and has not reimbursed plaintiff for the administrative costs plaintiff has incurred.

B. Wholesale Pricing

From the time each of the two Superior stores opened until May 2003, plaintiff sold 20 ounce bottles of Pepsi beverages for $1.09 and defendant charged plaintiff $17.25 for each case. In early April 2003, plaintiff increased its retail price to $1.25 in response to highly competitive gasoline and cigarette pricing and increased overhead costs resulting from improvements to existing stores and construction of new ones. (The incongruity in the dates alleged is immaterial for purposes of resolving this motion.) On April 21, 2003, after plaintiff had raised its soft-drink prices, one of defendant's sales employees informed one of plaintiff's store managers that defendant had raised its wholesale price in response to plaintiff's retail price increase. Shortly thereafter, defendant sent plaintiff a letter describing defendant's "CDA" pricing program. (Plaintiff has not explained the meaning of this acronym.) The enclosed price sheet indicated that "effective April 1, 2003," the wholesale cost for each case of Pepsi products would be $19.20 if each bottle was retailed at $1.14 or higher, $17.25 if the retail price charged was between $1.00 and $1.13 and $15.60 if each bottle was sold for $.99 or less. Defendant's letter was plaintiff's first notification of this pricing program. Between November 1999 and May 2003, defendant had been selling cases of Pepsi products to some of plaintiff's competitors for $15.60.

C. Deterioration of the Parties' Relationship

On May 6, 2003, plaintiff informed defendant in writing that it did not agree with the CDA program and requested credit for all payments plaintiff had made in excess of the lowest case price that defendant had charged other retailers from November 1999 through May 2003. In the letter, plaintiff also indicated that in the future, it would pay defendant only $15.60 for each case. After receiving plaintiff's letter, defendant continued to deliver Pepsi products to plaintiff's stores but charged $19.20 for each case. Between May and November 2003, plaintiff paid defendant $15.60 for each case and asked for all information on pricing programs and promotions available to defendant's dealers. Defendant never provided any additional information about pricing or promotions.

On August 22, 2003, defendant returned plaintiff's checks and demanded payment in full at the $19.20 case price. In its accompanying letter, defendant indicated that failure to make this payment in full "may result in a review of our credit terms with [plaintiff]." In a letter dated October 22, 2003, citing plaintiff's past-due invoices, defendant informed plaintiff that all future Pepsi product deliveries would be made on a cash on delivery basis. On November 6, 2003, defendant wrote to plaintiff, indicating its understanding that plaintiff no longer wanted Pepsi products distributed at its stores. Defendant stopped supplying plaintiff's stores with Pepsi products that day. The following day, plaintiff responded in writing, stating that it did want deliveries to continue, but at the lowest case price defendant offered and on full credit terms.

Some time in mid-November, 2003, plaintiff began transporting Pepsi products to its stores in Superior, from its stores in Ashland, Wisconsin, which purchased Pepsi products from North Star Beverage in Hurley, Wisconsin. Plaintiff incurred additional costs and because of the distance, was not able to transport Pepsi's full product line.

In early June 2004, plaintiff offered to pay defendant its highest case price if it would resume deliveries. For approximately two months, defendant refused, saying that it would resume delivery only if plaintiff dismissed this suit and agreed to the CDA program. Defendant agreed to resume delivery on August 23, 2004, but plaintiff had already lost sales during the peak summer tourist season.

OPINION

A claim will not be dismissed under Fed.R.Civ.P. 12(b)(6) unless "it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984). This standard is based on the concept of notice pleading, which requires that every complaint contain only "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). Notice pleading does not require a plaintiff to plead facts supporting each element of a cause of action. See Sanjuan v. American Bd. of Psychiatry and Neurology, Inc., 40 F.3d 247, 251 (7th Cir.1994) ("At this stage the plaintiff receives the benefit of imagination, so long as the hypotheses are consistent with the complaint."). However, it is possible for a plaintiff to "plead themselves out of court by alleging facts that establish a defendant's entitlement to prevail." Bennett v. Schmidt, 153 F.3d 516, 519 (7th Cir.1998).

A. Price Discrimination

In counts one, two and three of its complaint, plaintiff alleges that the CDA pricing program violated the Robinson-Patman Act, 15 U.S.C.A. § 13; Wis. Stat. § 133.04; and Wis. Admin. Code § ATCP 102.12. The relevant portion of the Robinson-Patman Act provides as follows:

It shall be unlawful for any person engaged in commerce ... to discriminate in price between different purchasers of commodities of like grade and quality, where either or any of the purchases involved in such discrimination are in commerce ... and where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination, or with customers of either of them....

15 U.S.C.A. § 13. Wis. Stat. § 133.04 provides the following similar prohibition:

No person may discriminate, either directly or indirectly, in price between different purchasers of commodities of like grade and quality, for the purpose or intent of injuring or destroying competition in any level of competition or any person engaged therein.

Finally, Wis. Admin. Code § ATCP 102.12 bars soda water beverage wholesalers from:

Discriminat[ing], directly or indirectly, in the price at which soda water beverages are sold to customers by selling or offering to sell such beverages at a special price or discount, or with special allowances, rebates, or commissions, or under other price or credit terms or conditions not offered or made available to all customers, where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly, or otherwise injure, destroy or prevent competition between wholesalers of soda water beverages or any of their customers.

1. CDA Pricing Schedule

Defendant contends that plaintiff has not made out a claim under any of these provisions because the CDA pricing levels were equally available to all of its customers, including plaintiff. In response, plaintiff appears to have...