Allied Accessories & Auto Parts Co. v. General Motors Corp.

Allied Accessories & Auto Parts Co. (Allied) (plaintiff) supplied oil filters to K-Mart, but it did not manufacture any such oil filters. Campbell Filter Company (Campbell) both manufactured oil filters and supplied some of them to K-Mart. After several years, K-Mart decided it would only sell oil filters made by an original car manufacturer. Campbell then entered into a contract with General Motors (GM) (defendant) under which GM agreed to sell manufacturer oil filters to Campbell for the sole purpose of Campbell then reselling them to K-Mart. GM gave Campbell a price discount of 10 percent below the regular warehouse price of manufacturer oil filters. GM did not provide any other entity—including Allied—with this offer. As part of the contract with Campbell, GM did not allow Campbell to utilize sales catalogs, advertising reimbursements, field representatives, or any other incentive program. In contrast, GM typically made such services available to buyers in K-Mart’s position, and it expected such buyers to utilize such services at additional cost to GM. GM was aware in doing this that K-Mart did not deal with field representatives or salesmen, and that Campbell would not need any of these other services to facilitate its oil-filter sales to K-Mart. GM did not do this for any other oil-filter customers—indeed, GM admitted that it divided its customer base into its 2,000 regular customers, which allegedly needed such additional services, and Campbell, which allegedly did not need such services. K-Mart then solicited bids from multiple dealers—including Allied and Campbell—for buying manufacturer oil filters. Campbell submitted a bid 10 percent lower than that of Allied, and K-Mart chose Campbell as its supplier. Allied brought suit against GM for unlawful price-fixing. GM replied that its 10 percent discount to Campbell was justified in light of the fact that Campbell would not need to utilize any of the other marketing services for selling the oil filters. The district court agreed and entered judgment in favor of GM. Allied appealed.