## Facts

- MM&E distributed Cooper’s Gardner-Denver industrial compressors under a written distributorship agreement.
- The agreement permitted termination without cause on 90 days’ written notice, and termination for cause on one day’s written notice under specified circumstances.
- Two key MM&E salesmen resigned, formed a new company (PSI), and sought to replace MM&E as Cooper’s distributor; Cooper accepted PSI as the replacement distributor.
- Cooper notified MM&E that it was terminating the distributorship for cause on one day’s notice, citing declining sales, inadequate parts and service, late payments, lack of promotion, and customer complaints.
- MM&E presented evidence that Cooper, sometimes acting with the departing salesmen/PSI, contacted MM&E customers, disparaged MM&E’s performance as the reason for termination, and urged customers to shift business to PSI.
- MM&E claimed it could not obtain a substitute product line for several months and lost customers and profits during that period.
- After a jury trial, the jury found for MM&E on tortious interference and rejected (or provided no relief on) MM&E’s Sherman Act § 1 theories; both sides filed post-trial motions for JNOV and/or a new trial.

## Issues

1. Whether the trial evidence was sufficient under Missouri law to support the jury’s finding that Cooper tortiously interfered with MM&E’s business relationships with its customers.
2. Whether the evidence required disturbing the jury’s rejection of MM&E’s Sherman Act § 1 claims, including alleged conspiracy/unreasonable restraint and resale price maintenance.

## Decision

- The court denied Cooper’s motion for JNOV or a new trial on tortious interference and left the tort verdict intact.
- The court denied MM&E’s post-trial motions on the Sherman Act § 1 claims and left the jury’s rejection of antitrust liability (or antitrust damages) intact.

## Legal Principles

- Under Missouri law, tortious interference with business expectancy requires: (1) a valid business relationship or expectancy, (2) defendant’s knowledge, (3) intentional interference causing termination or breach, (4) absence of justification, and (5) damages.
- A contractual right to terminate a distributorship does not immunize a manufacturer from tort liability where the termination is used as a pretext or vehicle for intentional, unjustified interference with the distributor’s customer relationships, including conduct the factfinder may treat as disparagement or other improper means.
- Sherman Act § 1 liability generally requires proof of an agreement that unreasonably restrains trade; vertical distribution disputes are ordinarily evaluated under the rule of reason rather than per se treatment absent established per se categories.
- Injury to a single terminated distributor and a transfer of business to a replacement distributor is not, without more, antitrust injury; the plaintiff must show harm to competition in a relevant market (e.g., higher prices, reduced output, diminished consumer choice).
- A resale price maintenance theory requires proof of an actual agreement on resale pricing; unilateral suggestions or guidance, without an agreement and without market-wide anticompetitive effects, is insufficient.

## Conclusion

The court sustained the jury’s finding that Cooper intentionally and unjustifiably interfered with MM&E’s customer relationships despite Cooper’s contractual termination rights, but refused to convert the distributor-termination dispute into a Sherman Act § 1 violation absent proof of an unlawful agreement and broader anticompetitive market effects.


Machine Maintenance & Equip. Co. v. Cooper Indus., Inc., 661 F. Supp. 1112 (E.D. Mo. 1987)