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DALMO SALES CO. v. TYSONS CORNER REGIONAL SHOPPING

January 5, 1970

Dalmo Sales Co., Inc., et al., Plaintiffs,
v.
Tysons Corner Regional Shopping Center, et al., Defendants


Pratt, D. J.


The opinion of the court was delivered by: PRATT

PRATT, D. J.:

 Upon consideration of plaintiffs' Motion for Preliminary Injunction, Memorandum, Supplemental Memorandum, Affidavits, Depositions and testimony in support thereof; defendants' Oppositions, Memoranda, Affidavits, Deposition and testimony in support thereof; and oral argument of counsel, the Court enters the following Findings of Fact and Conclusions of Law.

 Findings of Fact

 1. Plaintiffs have filed this suit pursuant to sections 4 and 16 of the Clayton Act, 15 U.S.C. §§ 15, 26 (1964), seeking treble damages, preliminary and permanent injunctive relief against the defendants. The gravamen of the claim is that plaintiffs have been prevented from leasing store space at Tysons Corner Regional Shopping Center as a result of joint action by the defendants amounting to a group boycott violative of sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2 (1964). Although certain allegations of the complaint have been admitted, violations of the Sherman Act have been denied.

 2. The plaintiffs, hereinafter collectively referred to as "Dalmo," are six affiliated corporations which own and operate retail stores in the District of Columbia and in the states of Virginia and Maryland, and a seventh corporation, Tyco Appliance and T.V., Inc. ("Tyco"), a Virginia corporation established for the purpose of entering into a lease of store space in the Tysons Corner Shopping Center located in Fairfax County, Virginia. Dalmo principally engages in the retail sale of consumer durable electrical appliances and television sets. The conduct of its business involves receipt of goods shipped in interstate commerce.

 The defendant Tysons Corner Regional Shopping Center ("Tysons Corner") is a general partnership, engaged in the business of developing and operating a large shopping center at Tysons Corner, Virginia.

 The defendant The May Department Stores Company ("May Company") is a New York corporation engaged in the operation of The Hecht Co. stores ("Hecht Co.") in the greater Washington area, including a store at Tysons Corner. The defendant The Hecht Company is a Maryland corporation existing solely for the purpose of protecting the trade name "The Hecht Co." "Hecht Co." hereinafter refers collectively to Hecht Co. and May Co.

 The defendant Woodward & Lothrop, Incorporated ("Woodward") is a District of Columbia corporation engaged in the operation of Woodward & Lothrop stores in the greater Washington area, including a store at Tysons Corner.

 The defendant City Stores Company is a Delaware corporation engaged in the operation of Lansburgh's stores ("Lansburgh's") in the greater Washington area, including a store at Tysons Corner.

 3. The complaint was filed on July 29, 1969. Shortly thereafter, a temporary restraining order was entered by Judge Waddy of this Court enjoining Tysons Corner from leasing to another tenant certain specifically designated space in the shopping center pending hearing and determination of plaintiffs' motion for a preliminary injunction. It was agreed by Dalmo and Tysons Corner that the restraining order should remain in effect until disposition of plaintiffs' motion.

 Plaintiffs deposed the partner of Tysons Corner principally responsible for the development of the center, Theodore N. Lerner, and Tysons Corner's leasing agent, Joseph C. Glenn, which two individuals were responsible for negotiating leases with prospective shopping center tenants, and for conducting the transactions between Tysons Corner and plaintiffs. Plaintiffs also have deposed the president of the Hecht Co., Edward H. Selonick, and Woodward's vice president of real estate, Nathaniel J. Orleans. Testimony of Dalmo's president, Stephen H. Baumgarten, was obtained by deposition taken by defendants Tysons Corner and Woodward & Lothrop. Numerous documents were produced for examination by plaintiffs of which more than 150 were made a part of the record in the course of the depositions.

 Although the temporary restraining order and preliminary injunction motions were filed by plaintiffs against all defendants, the restraining order was entered only as to defendant Tysons Corner. At the hearing on the motion for a preliminary injunction, counsel for plaintiffs agreed to withdraw the motion as to all defendants except Tysons Corner.

 4. The activities leading to the development of Tysons Corner began in 1961. In order to obtain the financial commitments from large department stores necessary to support a center such as Tysons Corner, negotiations were initiated with Hecht Co. and Woodward in 1962 and 1963 and culminated in 1965. Commitments from these stores, or others of a similar nature, were considered to be an essential prerequisite by Tysons Corner for future leases from smaller stores, both because of the need of "outside" financing and because of the "drawing power" of large stores. Hecht Co. and Woodward negotiated as a block with Tysons ...


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