Legal Question in Business Law in California
Vendor - distributor relations
I have a small distribution company, about 30% of our business is selling products from a certian vendor. This same vendor sells to my very large and powerfull competitor. When my competitor requested that I not be sold anymore of the vendor's products, the vendor called me and said that they couldn't sell to my company anymore and then they said that they will sell to me if I ordered a completly unrealistic amount of merchandice (millions of $ worth). I contacted another distributor in a different state and they said that they were still able to buy from the vendor at the usaul quantity. The reason this bothers me is we just spent $8,500.00 on new catalogs, 15% of which showed their products. Does my company have a legal case to force them to continue to sell to me or can I sue them for some sort of corporate discrimination, monoplozing, damages ? Please let me know what you think, Thank you so much for your time and help.
4 Answers from Attorneys
Re: Vendor - distributor relations
This falls under the category of restraint of trade, which is an antitrust matter. I don't know all of the facts of the case, therefore I cannot advise you further.
In sum, you may have a case. Obtain counsel to assist you in these matters.
Good luck!
Re: Vendor - distributor relations
Yes, you have a lawsuit against the distributor
Re: Vendor - distributor relations
You don't mention where the competitor is located but posted the question as MI/CA law. I note that you are in MI and I practice in California and so I can only speak to California law. If the competitor is in California, you may have an action for interference with economic advantage in that they got into the middle of your contract with your main distributor. Depending on the contract with your distributor, you may have a contract-based claim. If the distributor and/or competitor are located in California, you would file suit against them in the county where they are located. Obviously, there are various complications to this that cannot remotely be analyzed based on your post. You need an attorney to review the distribution contract and discuss more information regarding the circumstances.
Re: Vendor - distributor relations
Well the other attorneys who have answered this are probably correct at least to the extent that if an attorney only practices law in California, this needs to be a California law matter. It may be such even if one party is in Michigan. I will need to get more facts, but let's presume for the moment that as a California attorney this falls within California law I am licensed to deal with. I am not sure how much money we are talking about in damages for you, so I cannot yet discuss how financially feasible litigation would be until we talk. There are too many strategic metrics to take into account. There is no point in going into the anti-trust and tortious interference issues until more facts are on the table. However, my gut instincts and experience tell me that a good attorney and negotiator should have a fair chance at being able to resolve this matter for you with relatively simple communication with the other parties without the need for litigation. Again, I would need to know more facts, and if you would like to discuss, you may email or call me.
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