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E & L Consulting, Ltd. v. Doman Industries Ltd.

United States Court of Appeals for the Second Circuit
472 F.3d 23 (2006)

Written by Sean Carroll, JD

Facts

E & L Consulting, Limited (E & L) (plaintiff) had a green hem-fir lumber (lumber) distribution agreement with Doman Industries Limited and Eacom Timber Sales Limited, a Doman subsidiary (collectively, Doman) (defendants). As a manufacturer and supplier of lumber, Doman had a 95 percent market share in the lumber market in various states. Under the agreement with E & L, Doman supplied lumber to E & L, and E & L sold the lumber on behalf of Doman. E & L then took commissions on the sales. Doman also had an agreement with Sherwood Lumber Corporation (Sherwood) (defendant). Under this agreement, Sherwood bought lumber from Doman and resold it. Doman prohibited E & L from selling Doman’s lumber in Sherwood’s service area. Subsequently, Doman terminated its agreement with E & L and announced that Sherwood would be the exclusive distributor of Doman lumber. E & L brought suit against Doman and Sherwood, alleging that the agreement between Doman and Sherwood harmed competition in violation of § 1 of the Sherman Act. The district court dismissed the complaint. E & L appealed.

Rule of Law

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Holding and Reasoning (Winter, J.)

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