Valley Liquors, Inc. v. Renfield Importers, Ltd.

678 F.2d 742 (1982)

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Valley Liquors, Inc. v. Renfield Importers, Ltd.

United States Court of Appeals for the Seventh Circuit
678 F.2d 742 (1982)

Facts

Renfield Importers, Ltd. (Renfield) (defendant) sold wine and liquor products. Valley Liquors, Inc. (Valley) (plaintiff) was one of several Renfield wholesale distributors. Valley generally sold Renfield products at a price 5 percent lower than Valley’s local competitors. In 1981, Renfield changed its distribution structure from a network of several distributors to a restricted distribution system of one or two distributors per area. Renfield terminated Valley’s distributorship and reassigned its territory to two of Valley’s competitors: Continental and Romano. Valley sued Renfield and sought a preliminary injunction, alleging the new distributorship was an unlawful exclusive dealing arrangement in two ways. First, Valley alleged a horizontal conspiracy among Renfield, Continental, and Romano to avoid competition from Valley’s low prices and increase wholesale prices. Second, Valley alleged Renfield’s termination of Valley’s distributorship was an unlawful vertical restraint. Valley argued that by eliminating Valley and its low prices, Renfield had harmed price competition. The district court held Valley had not demonstrated a likelihood of success on the merits and denied Valley’s motion for a preliminary injunction. Valley appealed.

Rule of Law

Issue

Holding and Reasoning (Posner, J.)

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