# The Elder-Beerman Stores Corp. v. Federated Department Stores, Inc.

> Court of Appeals for the Sixth Circuit · April 11, 1972 · 459 F.2d 138

URL: https://www.frixlaw.com/law-library/cases/9458099

## Case

- **Full name:** The ELDER-BEERMAN STORES CORP. Et Al., Plaintiffs-Appellees, v. FEDERATED DEPARTMENT STORES, INC., Defendant-Appellant
- **Court:** Court of Appeals for the Sixth Circuit
- **Decided:** April 11, 1972
- **Citations:** 459 F.2d 138; 16 Fed. R. Serv. 2d 9
- **Precedential status:** Published
- **Opinion:** Concurring in part by Edwards
- **Judges:** Edwards, Miller, Kent
- **Cited by:** 50 later opinions in the Frix Law Library

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## Opinion text

EDWARDS, Circuit Judge
(concurring in part and dissenting in part).
The tradition of this court is to seek one opinion wherever it is possible to achieve it without sacrifice of principle by reasonable accommodation to the views of others. In the face of this, I find myself writing still a third opinion in a ease wherein my colleagues have already labored earnestly with this lengthy and complex record and the important and difficult factual and legal issues which it presents.
The issues of this case, however, have significance for all American business and for all American consumers likewise. They deal with thus far undetermined conflicts between two major legal concepts. The first is the right of the businessman freely to compete in the market as he desires. The second is the prohibition against monopoly and restraint of trade contained in the antitrust acts.
This is an antitrust suit by one Dayton, Ohio, chain department store (Elder-Beerman) against its older, bigger, and better established chain department store competitor (Rike’s). During the litigation period a national chain of department stores (Federated) bought Rike’s. It appears that Federated also brought this law suit, for the basic policies and practices Elder-Beerman complains about were standard policies of Rike’s which continued under the same managerial personnel after the Federated purchase. The Elder-Beerman complaint alleges that Rike’s conspired with various suppliers of department store goods to restrain trade and to monopolize the department store market in the Dayton area. The device alleged to have been employed was the contract for an “exclusive” whereby one supplier of a highly favored “name” brand would supply its goods to Rike’s but not to any other store in the Dayton area — or at least not to Elder-Beerman. Elder-Beer-man charges that Rike’s used its large buying power (and later the much larger buying power of Federated) to coerce suppliers into such agreements by threatening not to buy from them at all unless they complied.
Elder-Beerman, of course, claims damages as a result of the antitrust violations it attributes to Rike’s. But, at the outset, it is interesting to note that during all of the period of years in dispute, Elder-Beerman (and Rike’s) showed a steady growth in both volume of business and profit.
As I understand my colleagues’ position, both believe that the factual record developed in this lengthy six-month trial does not for a variety of reasons support the jury verdict. My colleague, Judge Kent, reaches this result by feeling that there were no proofs of one overall conspiracy, that much inadmissible hearsay was allowed to condition the jury verdict, that the jury was allowed to take into account in computing damages transactions with some suppliers as to which there was no direct proof of any illegal conduct at all on the part of the defendant, and that in the instance where brands were withheld from the plaintiff by agreement between the defendant and the supplier, there was no proof from which damage to plaintiff could be deduced, since plaintiff did not establish that other brands totally satisfactory for marketing were not available as substitutes. He would reverse for *152 new trial with the restrictions generally inferred above.
My colleague, Judge Miller, on the other hand, feels that the evidence developed at trial on the claim of conspiracy in restraint of trade was inadequate to support any verdict at all; that plaintiff should not have an opportunity to retry this issue, since in his view plaintiff failed to muster appropriate evidence given a fair opportunity to do so in the first trial, and that on remand the only issue which should go to the jury is that pertaining to attempts to monopolize.
Contrary to these positions, I have felt from the beginning of this case that both sides were given an eminently fair trial before an able and competent judge over a six-month period, that the judge’s rulings on admission of evidence under the liberal rules which characterize a conspiracy trial were appropriate, that there were proofs from which the jury could have found one overall conspiracy, that the substitute brand issue goes more to the issue of damage than to the issue of liability, and that we should affirm the jury verdict as far as liability is concerned.
As far as the issue of damages is concerned, however, I have found myself from the beginning of this case in agreement with my colleagues as to remand. Plaintiff’s principal witness on the damage issue seems to me to have indulged in utterly inadmissible speculation. In addition, I think that defendant was entitled to an instruction to the jury that no damages could be awarded plaintiff as to those exclusives which the jury found to be legal ones unmotivated by any coercive practices on the part of defendant.
The conflict between the two important policies I mentioned above is mirrored quite specifically in the laws of the United States which underlie this litigation. The free enterprise aspect is set forth in 15 U.S.C. § 13 (1970) as follows:
“‘provided further, That nothing herein contained shall prevent persons engaged in selling goods, wares, or merchandise in commerce from selecting their own customers in bona fide transactions and not in restraint of trade: . . . ”
The antitrust policies at issue are set forth in the Sherman and Clayton Acts, the applicable provisions of which follow:
Section 1 of the Sherman Act ( 26 Stat. 209 , as amended) provides in relevant part:
“Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade . . . is declared to be illegal. . . . ” 15 U.S.C. § 1 (1970).
Section 2 of the Sherman Act ( 26 Stat. 209 , as amended) provides in relevant part:
“Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States . . . shall be deemed guilty of a misdemeanor. . . . ” 15 U.S.C. § 2 (1970).
Section 4 of the Clayton Act ( 38 Stat. 730 , as amended) provides in relevant part:
“That any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor . . . and shall recover threefold the damages by him sustained, and . the cost of suit, including a reasonable attorney’s fee.” 15 U.S.C. § 15 (1970).
THE CONSPIRACY ISSUE
The major points of disagreement in our panel may be discussed in relation to the question of conspiracy. Judge Miller finds no evidence in this record of any conspiracy at all and Judge Kent believes that while there is testimony from which the jury could have found conspiracy, legally that testimony should be *153 read as establishing a number of individual conspiracies rather than one overall conspiracy. I believe that there was proof from which the jury could properly have found one overall conspiracy.
Although I did not believe so at the beginning of this case, I am now persuaded that the most useful model for considering the conspiracy is the rimless wheel. According to Elder-Beerman’s theory, Rike’s was the hub of the conspiratorial wheel and its exclusive suppliers were the spokes. One of the important questions in this case is whether the suppliers (or any of them) agreed with each other, as well as with Rike’s, to participate in the conspiracy. My colleagues believe, and I believe, that there was no such evidence in this record. In short, there was no rim to this wheel, or to put it in more conventional antitrust language, there was no proof of a horizontal conspiracy.
It does not seem to me, however, that this fact is fatal either to the immediate result in terms of the jury’s liability verdict, or to retrial of this issue.
There are, of course, many instances where in the criminal law a central conspiracy to dispose of contraband goods has been carried out through selling agents (who also did not know each other) who might be regarded as spokes of the conspiratorial wheel. Poliafico v. United States, 237 F.2d 97 (6th Cir. 1956), cert. denied, 352 U.S. 1025 , 77 S. Ct. 590 , 1 L.Ed.2d 597 (1957); United States v. Tramaglino, 197 F.2d 928 (2d Cir.), cert. denied, 344 U.S. 864 , 73 S.Ct. 105 , 97 L.Ed. 670 (1952); United States v. Griffin, 176 F.2d 727 (3rd Cir. 1949), cert. denied, 338 U.S. 952 , 70 S.Ct. 478 , 94 L.Ed. 588 (1950). See also United States v. Kissel, 218 U.S. 601, 607 , 31 S. Ct. 124 , 54 L.Ed. 1168 (1910); Berger v. United States, 295 U.S. 78 , 55 S.Ct. 629 , 79 L.Ed. 1314 (1935).
In a somewhat similar case, Kotteakos v. United States, 328 U.S. 750 , 66 S.Ct. 1239 , 90 L.Ed. 1557 (1946), the Supreme Court reversed the joint trial of the defendants which occurred after the central figure had pled guilty. Any other result, of course, would have allowed the individual crimes of other persons to be proved to buttress the charge against each defendant. But Kotteakos is no precedent for this case. Here the suppliers, the spokes, are not in court at all in the instant trial, and the case proceeds against the central party charged with the conspiracy, the hub of this particular wheel. Even if all of the exclusive contracts which the jury found should have been regarded as individual and separate conspiracies, the result in accumulation of damages would have been the same. Hence, if Kotteakos commands division of the total conspiracy into several or many conspiracies (a result which I do not concede) the District Judge’s failure to instruct in favor of such separation would be harmless. See Berger v. United States, 295 U.S. 78 , 55 S.Ct. 629 , 79 L.Ed. 1314 (1935).
This appears to be the first instance of a department store antitrust suit of this general character against another department store. There is little if any settled law on this problem. It appears to be conceded that a supplier can for his own economic purposes unilaterally grant exclusives, so long as the result does not constitute restraint of trade or monopolization. Agreements for such exclusives have been held not to constitute violations of the antitrust laws. But Elder-Beerman contends that it has demonstrated many more instances than in any prior case and with a much greater impact upon the competitive position of the parties.
The real issue of antitrust conspiracy in this case, however, concerns Elder-Beerman’s allegations that Rike’s restrained competition by compelling exclusives or “containments” by economic retaliation and coercion.
As to this issue appellee Elder-Beerman relies primarily upon Hershey Chocolate Corp. v. F. T. C., 121 F.2d 968 (3d Cir. 1941), and Klor’s Inc. v. Broadway-Hale Stores, Inc., 359 U.S. 207 , 79 S.Ct. 705 , 3 L.Ed.2d 741 (1957). Appellant Federated relies upon Joseph E. *154 Seagram & Sons, Inc. v. Hawaiian Oke and Liquors, Ltd., 416 F.2d 71 (9th Cir. 1969), cert. denied, 396 U.S. 1062 , 90 S. Ct. 752 , 24 L.Ed.2d 755 (1970); Packard Motor Car Co. v. Webster Motor Car Co., 100 U.S.App.D.C. 161 , 243 F.2d 418 , cert. denied, 355 U.S. 822 , 78 S.Ct. 29 , 2 L.Ed.2d 38 (1957); and United States v. Arnold Schwinn & Co., 388 U.S. 365 , 87 S.Ct. 1856 , 18 L.Ed.2d 1249 (1967).
Unfortunately, none of these cases deals with department stores or a situation where a successful retailer was seeking to secure an exclusive dealership.
The essence of the antitrust conspiracy violations charged by Elder-Beerman consists of Rike’s using both its and Federated’s economic purchasing power to restrain competition by coercing important brand name suppliers into either giving Rike’s an exclusive on their most popular merchandise, or at least restricting their sales so as to exclude Elder-Beerman. The proofs before the District Judge and the jury appear to have established a variety of such instances.
At oral argument, Elder-Beerman stated that there were 115 instances where Rike’s agreed that it had exclusives, and that there were 50 other instances where under the testimony the jury could have found exclusives. In response Rike’s claims most exclusives were the result of suppliers’ policies, without suggestion, coercion or conspiracy from Rike’s. But Elder-Beerman did present testimony from which the jury could have found coercion in a substantial number of instances. Since the complaint charges conspiracy and restraint of trade, Elder-Beerman argues that the jury was entitled to infer that similar coercive practices happened in the other exclusive arrangements.
I believe (as will be demonstrated) that there was evidence from which the jury could have found that a substantial number of exclusive contracts were the product of Rike’s policy of threatening or employing economic coercion against suppliers who resisted requests for exclusives.
The United States Supreme Court discussed such coercion in Simpson v. Union Oil Co., 377 U.S. 13 , 84 S.Ct. 1051 , 12 L.Ed.2d 98 (1964):
There is actionable wrong whenever the restraint of trade or monopolistic practice has an impact on the market; and it matters not that the complainant may be only one merchant. See Klor’s, Inc. v. Broadway-Hale Stores, 359 U.S. 207 , 213, 79 S.Ct. 705 , 3 L.Ed.2d 741 ; Radiant Burners v. Peoples Gas Co., 364 U.S. 656, 660 , 81 S.Ct. 365 , 5 L.Ed.2d 358 . As we stated in Radovich v. National Football League, 352 U.S. 445, 453-454 , 77 S. Ct. 390 , 1 L.Ed.2d 456 :
“Congress has, by legislative fiat, determined that such prohibited activities are injurious to the public and has provided sanctions allowing private enforcement of the antitrust laws by an aggrieved party. These laws protect the victims of the forbidden practices as well as the public.”
* * * # * *
We made clear in United States v. Parke, Davis & Co., 362 U.S. 29 , 80 S.Ct. 503 , 4 L.Ed.2d 505 , that a supplier may not use coercion on its retail outlets to achieve resale price maintenance. We reiterate that view, adding that it matters not what the coercive device is. United States v. Colgate, 250 U.S. 300 , 39 S.Ct. 465 , 63 L.Ed. 992 , as explained in Parke, Davis, 362 U.S., at 37 , 80 S.Ct. 503 , 4 L.Ed.2d 505 was a case where there was assumed to be no agreement to maintain retail prices. Here we have such an agreement; it is used coercively, and, it promises to be equally if not more effective in maintaining gasoline prices than were the Parke, Davis techniques in fixing monopoly prices on drugs. Simpson v. Union Oil Co., supra at 16-17, 84 S.Ct. 1051, 1054 , 12 L.Ed.2d 98 .
*155 Probably the closest case to the facts of this one is Klor’s, Inc. v. Broadway-Hale Stores, Inc., 359 U.S. 207 , 79 S.Ct. 705 , 3 L.Ed.2d 741 (1959). There are, of course, important differences in facts as the following discussion makes clear:
Plainly the allegations of this complaint disclose such a boycott. This is not a case of a single trader refusing to deal with another, nor even of a manufacturer and a dealer agreeing to an exclusive distributorship. Alleged in this complaint is a wide combination consisting of manufacturers, distributors and a retailer. This combination takes from Klor’s its freedom to buy appliances in an open competitive market and drives it out of business as a dealer in the defendants’ products. It deprives the manufacturers and distributors of their freedom to sell to Klor’s at the same prices and conditions made available to Broadway-Hale and in some instances forbids them from selling to it on any terms whatsoever. It interferes with the natural flow of interstate commerce. It clearly has, by its “nature” and “character,” a “monopolistic tendency.” As such it is not to be tolerated merely because the victim is just one merchant whose business is so small that his destruction makes little difference to the economy. Monopoly can as surely thrive by the elimination of such small businessmen, one at a time, as it can by driving them out in large groups. In recognition of this fact the Sherman Act has consistently been read to forbid all contracts and combinations “which ‘tend to create a monopoly,’ ” whether “the tendency is a creeping one” or “one that proceeds at full gallop.” International Salt Co. v. United States, 332 U.S. 392, 396 , 68 S.Ct. 12 , 92 L.Ed. 20 . Klor’s, Inc. v. Broadway-Hale Stores, Inc., supra 359 U.S. at 212-214, 79 S.Ct. at 709 (Footnotes omitted.)
Although Elder-Beerman argues it was also a victim of a supplier boycott, for the reasons already stated our panel is in agreement that the facts do not support that conclusion. It seems to me, however, that parallel conduct by suppliers induced by Rike’s coercion would just as readily bring into play the principles outlined above as would a horizontal boycott. 1
Perhaps the easiest way to understand the critical issue upon which this case was tried and which now divides our panel is to quote the testimony of Kenyon Starling, long-time executive vice president of Rike’s:
Q. And you, yourself, at Rike’s, had a motto to your merchandisers which can be put in the expression “Be aggressive” ? A. Yes, sir.
Q. In fact, that was the one thing you insisted upon on your merchandisers, that they should be aggressive? A. Yes, sir.
Q. Now it is true, is it not, Mr. Starling, that the department-store business is kind of a hard business; if you want to get ahead you have to be pretty hard? A. I would say so, yes.
* •* # * •»
Q. Now, in fact, the Beerman Stores when they started going into department stores, because of their aggressive attitude on their part, were something which was of concern to Rike’s and you and the other officials, *156 because you watched any aggressive competitor; isn’t that true, sir? A. Yes. We watched all aggressive competitors.
Q. And at that time it is also true, is it not, that you were sure that there were pressure methods used on various suppliers, and that these methods may have been expressed or implied for the purpose of obtaining exclusivity, as this was a common practice by all leading retailers? A. Pressure in that case was your word, and I agreed to it, Mr. Goldman.
* ->:• * * * *
Q. And it is also true, is it not, from your own experience at Rike’s, that buyers are apt to be stronger in certain methods than perhaps they should be, in order to aggrandize their own departments and to make a good profit for their departments and thereby to secure advancement for themselves? That’s true, is it not? A. It is.
Q. That’s a fact of human nature, isn’t it? A. Very definitely.
Q. And the buyers were given a certain amount of freedom in how they were to handle their departments; isn’t that true? A. To a minor degree.
* * * * * *
Q. And it was also true, Mr. Starling, was it not, that as management at Rike’s you were aware of certain strong tactics, which you did not require, but which you did not object to, because of the authority given to the buyers? A. Yes, I think that’s true.
Q. And you who were in charge of all the merchandisers would have had the authority to stop anything that was wrong, wouldn’t you, sir? A. Yes, I would.
Q. And as far as you were concerned, you were willing to let these buyers continue to use these strong tactics that you were aware of, isn’t that right? A. Yes.
* *****
Q. It is also true, is it not, Mr. Starling, that the Rike people were aware of Beerman’s, as you considered it, price cutting and underselling tactics, and were familiar with what such tactics were doing to Rike’s profit margin? A. Yes.
Q. Because of your policy of meeting everybody’s price you had to meet their prices and cut your profit when those things happened? A. Very definitely.
Q. And what your buyers were trying to do was to avoid that necessity so as to keep up their profit margins; isn’t that right, sir? A. Yes, sir.
Q. And your divisional merchandise managers were very upset about that, and the buyers were told to do whatever was necessary to meet and beat the competition; isn’t that true? A. Very definitely.
******
Q. Well, now, didn’t you testify as follows on your deposition?
Look at page 28, sir.
Have you got page 28, sir? A. Yes.
Q. Beginning at line 14:
“Question: And the buyers generally because of that’’ — that was the fact that they wanted to get the highest price without running the customers away — “because of that, operated under the principle that there would be less likelihood of their having to cut a price on a line of merchandise if their competition didn’t carry the same lines ?
“Answer: Yes.”
A. That’s very obvious, Mr. Goldman.
Q. “Question: And that by having an exclusive the buyers felt it would be easier for them to maintain their markup?” A. Yes.
Q. The answer, “Yes.”
******
*157 Q. I will read you the question again:
“And it was not an uncommon practice for buyers to suggest or say openly, or suggest by implication, to suppliers, that if the suppliers sold the line which the buyers desired as an exclusive to the competition, that the buyer would himself no longer buy that line? Answer : I think it would be ill-advised on the part of a buyer.
“Question: Well, this did occur, did it not?
“Answer: Well, you have all
kinds of buyers.
“Question: Well, it is a fact that it occurred, isn’t that so ?
“Answer: Probably, yes.”
A. All right, we have the answer. I will agree to the statement.
•X- * -X- * * -X-
The managerial policies described by Mr. Starling countenanced threats to withhold business to compel exclusive contracts. His testimony must be read as indicating that he knew that such acts were taking place.
It is my opinion that threats of economic retaliation for failure to give Rike’s an exclusive or maintain one already given are actions which the jury could find to have been in restraint of trade and hence violations of Section 1 of the Sherman Act. Such threats could also have been found to be violative of Section 2’s prohibition against attempts to monopolize. (I agree with my colleagues that no ease was made out concerning actual monopoly.)
The policies Starling described were obviously long-standing ones applicable to periods both before Federated’s purchase of Rike’s and before the filing of the suit now on appeal. But his testimony must also be read as applicable up to his retirement which occurred well after the beginning of the period covered by the case at issue.
Since Starling’s testimony must also be read as conceding that some of the coercive tactics produced exclusive contracts, there was, in my opinion, direct evidence from the highest possible authority in this case from which the jury could have found the existence of an illegal conspiracy. For this reason I have no problem with the District Judge’s admission of hearsay evidence as to the methods employed by Rike’s to secure exclusives. Hearsay evidence of statements made by a coconspirator in furtherance of the conspiracy are admissible when there is direct evidence to establish the conspiracy. United States v. United States Gypsum Co., 333 U.S. 364, 393 , 68 S.Ct. 525 , 92 L.Ed. 746 (1948); Logan v. United States, 144 U.S. 263, 309 , 12 S.Ct. 617 , 36 L.Ed. 429 (1892); Brown v. United States, 150 U.S. 93, 98 , 14 S.Ct. 37 , 37 L.Ed. 1010 (1893). See also 4 J. Wigmore, Evidence § 1079 (3d ed. 1940).
The District Judge in this case understood and followed established precedent in admitting or excluding hearsay. The care (and fairness) with which he approached this problem is illustrated in Volume I of the Appendix, pages 161a-167a.
Illustrative of the hearsay testimony quoting suppliers (or their named agents) pertaining to their reasons for not selling their product to Elder-Beer-man are the following quotations. In each instance the witness is an Elder-Beerman buyer quoting the reasons given him by a supplier (usually a named salesman) as to why the supplier would not sell Elder-Beerman.
A. So I asked Mr. Skolnick why, and he told me that after due consideration he felt and his company felt that Beerman’s was not the store to sell, that Rike-Kumler was the store to sell, and that when he went into Rike’s he was informed by Richard Meyers—
Q. Richard Meyers, the same man that you mentioned being at these AMC meetings? A. Yes, sir.
Q. Go ahead. A. By Richard Meyers that he was very interested in *158 the line, and he evidently did buy it because I saw it there — that he was interested in the line and that he would buy it but that he did not want Beer-man Stores to have the line if he was to buy it. So in his judgment he felt that Rike’s — and his company felt that Rike’s would be a better account, and seeing that they didn’t want us to have it, he couldn’t sell them, so he would just sell them. I was very upset and I asked him to please reconsider, and he said no, and that was it. (160a-161a).
* -x- * * * *
A. Abelson manufactured boys’ clothing, suits and outerwear, and their trade name which was in the garment was Buddy, B-u-d-d-y, Buddy. And they were a very fine resource, upstairs resource, boys’ clothing outerwear. And we carried Abelson, as well as the Rike-Kumler carried Abelson. And Mr. Ronnie Staller, who again was the representative for Abelson in this particular area, my salesman—
Q. You say your salesman, he was the salesman who called on you, you mean? A. Yes, right, the salesman that called on me.
—told me that he no longer could sell me some of the suits that I was buying. I asked him why couldn’t he sell me the suits. And he explained to me that he had a discussion with Richard Meyers of Rike-Kumler and that Mr. Meyers did not want Beer-man’s to have the Buddy, or Abelson line, and after much discussion he pleaded with Mr. Meyers — he was able to offer me the concession that I could buy just the numbers that were not being carried by the Rike-Kumler Company. In other words, any number that he bought I was not permitted to buy; anything left over I could buy. (168a).
•x- # * * * *
Q. What took place there? A. Mr. Klinger and I had a conversation and I tried again to ask him to sell me his line of merchandise.
Mr. Klinger said that, as I said before, he was getting static from Rike’s, and I asked what the big objection was that Rike’s had with us carrying the Sioux-Mox. He said Rike’s liked to carry the line exclusively because this way they could merchandise the line any way they wanted to and where they felt like it take an extra dollar on the merchandise without any fear of competition (213a).
•X- * * * -X- -x-
Sometime the following week I received a phone call from Mr. Pugh. He told me that he wanted to sell us, he made his living on commissions from sales, but he was in a bind, that Mr. Hooks wanted to have the line for Rike’s exclusively, and did not want Mr. Pugh to sell the Van Eli line of shoes to the Bee-Gee Shoe Corporation. (223a).
* * * * * -X-
So in January of that year Mr. Heath called on us again to sell us a line of boots, and he related to us that when he told the Rike buyer, Mr. Bob Hooks, that he sold us the line, that Mr. Hooks became very upset and used profanity in reference to himself for selling us, and in reference to our operation, and our stores, and told him that he would pay through the nose for selling us the shoes.
And he also stated to me that he did take a cut in the orders from Rike-Kumler. (279a-280a).
* * * * * -x-
Q. Where was this meeting, do you recall? A. I believe it was in Chicago. And Mr. Glick told me that when he came to Dayton he called on Rike-Kumler and they decided to put in the shoes, and he—
Q. Put in what shoes? A. The Bandolino line.
Q. They were already carrying the Amalfi, is that it ? A. Yes.
Q. Go ahead. A. And one of the conditions was that they would be the only account to carry the shoes in the *159 city. So he was sorry but he just wouldn’t be able to sell us at that time. (293a).
******
Q. Did the man who spoke to you say anything about the Rike-Kumler Company on that occasion? A. He said that he had pressure from the Rike-Kumler Company that if they continued to sell us that they would have to cut them out. (328a).
******
Q. Will you relate what took place? A. He came into the store and told me that as much as they hated to do it, they were going to have to cut me off, that Federated had given an ultimatum that I could not continue to sell the Stearns & Foster mattresses ; and that they would continue to service my account for three months, and during those three months I could buy what I needed and at the end of the three months I could place one order to balance my stock and that would be the end of our orders with Stearns and Foster. And that’s the way it ended. (538-539a).
It is interesting to compare this testimony with the language of a 1964 Rike’s Policy Statement to its managerial personnel. This statement was circulated, of course, well after the beginning of the period covered by this case and it may be significant that we have found no testimony as to coercive tactics thereafter :
We may, at the time we purchase an item or line from a resource do so on the understanding that we have an “exclusive”. This must be strictly an understanding between the resource and ourselves. Under no circumstances may we ask that a specific competitor not be sold.
Whether in protection of an exclusive or otherwise, our department managers must understand that any attempt to influence or prevent resources from selling any merchandise to competitors is extremely dangerous and could very possibly provoke Antitrust investigation and action.
What has preceded may well represent the strongest possible presentation of Elder-Beerman’s case, and, of course, there is much to the contrary. But on review of a jury verdict as to sufficiency of evidence, we are required to consider the most favorable evidence to the prevailing party which the jury obviously believed. Lavender v. Kurn, 327 U.S. 645, 652-653 , 66 S.Ct. 740 , 90 L.Ed. 916 (1946); Pittsburgh Plate Glass Co. v. United States, 260 F.2d 397 (4th Cir. 1958), aff’d, 360 U.S. 395 , 79 S.Ct. 1237 , 3 L.Ed.2d 1323 (1959); 5 C.J.S. Appeal & Error § 1562(4) (1958).
The evidence in this record, though far from conclusive, was sufficient in my judgment to support the jury’s finding of liability on the part of appellants for an illegal conspiracy to restrain trade and attempt to monopolize.
DAMAGES
Although I would affirm the jury’s verdict as to liability, I concur in reversal of the damage award and in remand of the case for rehearing of this issue alone.
I agree fully with what Judge Kent has written as to the damage aspect of the case, but I would like to add some emphasis.
The admissibility of expert witness testimony is committed to the discretion of the trial judge — a discretion as to which appellate courts are loathe to find abuse. Further, on damage proofs the courts are liberal in antitrust cases because of the difficulty plaintiffs have in securing precise figures. Story Parchment Co. v. Paterson Parchment Paper Co., 282 U.S. 555, 563 , 51 S.Ct. 248 , 75 L.Ed. 544 (1931). But as this court said in another antitrust case:
Judgments in anti-trust cases cannot be rendered on speculation or guesswork, even against a party who by his own wrong has precluded a more precise computation of damages. Bigelow v. RKO Radio Pictures, 327 U.S. 251, 264 , 66 S.Ct. 574 , 90 L.Ed. 652 ; Volasco Products Co. v. Lloyd A. Fry Roofing Co., 308 F.2d 383, 392 *160 (C.A. 6), cert. denied, 372 U.S. 907 , 83 S.Ct. 721 , 9 L.Ed.2d 717 . Associated Press v. Taft-Ingalls Corp., 340 F.2d 753, 769 (6th Cir.), cert. denied, 382 U.S. 820 , 86 S.Ct. 47 , 15 L.Ed.2d 66 (1965).
In this case, to a greater degree than I have ever seen in any appeal, damages rested upon “speculation and guesswork.”
We have already noted that during all of the years involved here Elder-Beer-man’s operations were increasing notably both in total sales and in net profits. While this is not fatal to Elder-Beer-man recovering antitrust damages, it does lend support to appellant’s suggestion that specific proof of injury should be required.
Elder-Beerman relied for computation of damages, however, entirely upon an expert witness named Friedlander. Friedlander undertook to compute damages by a formula which seems to me to be without any basis in either this record or in reality.
Friedlander’s damage computation started with the ratio between a specific Rike’s department which had an exclusive name brand and compared its total sales, after deducting the exclusive sales, to the total sales of the comparable department of Elder-Beerman. He then multiplied Rike’s sales of the exclusive name brand by the ratio of Elder-Beer-man’s total sales to Rike’s sales minus this particular name brand. The figure thus arrived at he called “lost sales.” This amounted to $14,309,632 when calculated against 63 of the lines which Friedlander employed.
As I understand Friedlander’s logic, it is that the ratio of Elder-Beerman’s capacity to sell goods to Dayton customers as compared to Rike’s is properly shown by this comparison. Hence, Elder-Beer-man should be held to have “lost” a similar percentage of sales of the Rike’s exclusive brands which had been denied to it.
This theory is founded upon the totally unsupported assumption that each of Rike’s “exclusives” were so unique as to be irreplaceable. If Rike's kitchen supply department had an absolute Dayton area monopoly on can openers, or its hardware store had an absolute monopoly on power saws, or its home furnishing department had an absolute monopoly on mattresses, then Friedlander’s ratio would have a logical basis. Whoever wanted a can opener, a power saw, or a mattress would have to go to Rike’s.
But actually Elder-Beerman is not complaining that it could not sell mattresses. It had Simmons mattresses and Serta mattresses, to name only two. Its complaint is that it did not have Stearns & Foster mattresses. While Stearns & Foster might or might not be more attractive to Dayton customers than Simmons or Serta, the comparison is not of the same order as where one department store sells mattresses and the other can’t get any mattresses at all to sell.
Of more relevance to male judges is the shirt situation. Rike’s had exclusives on Arrow shirts and on Hathaway shirts. But it did not have a monopoly on shirts; Elder-Beerman sold Manhattan shirts. This isn’t to argue that the Arrow and Hathaway exclusives may not, have done damage to Elder-Beerman. The point is that brand monopoly and product monopoly are entirely different and that absent proofs of brand irrepla-ceability, Friedlander’s ratio (which underpins his entire testimony) is utterly without foundation.
It is true, of course, that Friedlan-der’s next calculation gave some recognition to the fact that Elder-Beerman’s customers might possibly be satisfied with a Manhattan shirt or a Simmons mattress. But this calculation appears to have rested if possible on even thinner air.
Friedlander described the origin of his “sharing” formula thus on cross-examination :
Where did that formula come from ?
A. My head.
*161 Q. You made it up for this purpose? A. Let me explain it to you.
You see, when you are trying to think through a problem or a situation like this you come to a concept, and the concept can often be pictured in a graph, see. The graph is a picture of your concept.
Now, this is in creative thinking.
Q. Yes. A. Otherwise, when you have all these curves with formulae, they represent catenary arcs, and all that stuff. But in creative thinking you have a picture, you have a thought, a concept in your mind, and it can be pictured on a piece of paper in a graph. So you picture it and then you develop a formula to describe the picture and to finish it off the way you want it. And so you get a nice, smooth curve, and that puts everything on an orderly basis.
That doesn’t give it an imprimatur, it doesn’t make it, you know, holy writ. It is just — That’s what it is.
Q. You drew this curve first? A. I drew the rough of that curve first. That was the picture I had in my mind.
Q. Then you said, What formula will express that curve?
A. That’s right.
* X * X X X
Q. You think? A. I think that is pretty close, yes.
Q. Do you have any data whatever sir, that substantiates this particular curve? A. No.
Newton had no data about the center of forces in a sphere, and somebody made him hold up the mathematics for two years before he got it. It was a shame. He knew it, he knew it worked that way. We all know of such things. (1487-88a) (Page numbers refer to Appendix.)
Friedlander then undertook to calculate the peripheral loss of sales — these being sales arguably lost because customers who were seeking a top name brand did not come into the Elder-Beer-man stores and hence did not buy other items in that store on that same visit. Here again, he employed a judgmental curve and derived a mathematical formula to fit it. By this method he added “peripheral lost sales” for a total lost sales estimate of $44,000,000 for the years 1962 through 1966. He then undertook by other arbitrary formulae to reduce this figure to lost profits and finally wound up with an estimate of some $7 million odd dollars of such lost profits.
While the jury obviously did not follow Friedlander all the way on this testimony, I cannot find justification for letting this theory of damage go to the jury.
Perhaps if there had been in this long controversy no way at all to relate Elder-Beerman’s damages to established facts, even opinions like those referred to above might be admissible for want of better. But before this record was closed, Elder-Beerman’s litigation had the direct result of securing the withheld merchandise from all of the offending suppliers except 12. Thus Elder-Beerman had records of years of sales experience during which a desired brand was withheld to compare with subsequent years of experience after the desired brand was on its shelves. Of course, these proofs were available by subpoena to Rike’s and Federated also. But while they were contesting liability, it would hardly serve their purposes to prove any Elder-Beerman damages at all. And damages represent an essential part of any plaintiff’s case.
On remand it ' should be possible through the pretrial proceedings suggested by Judge Kent to stipulate the comparisons suggested above.
No appellate issue is presented concerning the failure of the District Judge to instruct that the jury could not award damages to Elder-Beerman for such *162 wholly lawful exclusives as were granted by suppliers on the basis of their own sales policies unaffected by any coercion by Rike’s and without intent to restrain trade or monopolize. The District Judge did, of course, give a careful instruction on the fact that the jury could not find liability as to Rike’s on the basis of exclusives for which supplier policies were solely responsible. But it is entirely possible on this record that the jury found an illegal conspiracy between Rike’s and a dozen coerced suppliers and still computed damages on testimony relating to 63 suppliers. The omission of a specific instruction on this point as to damages appears to me to be plain error. Fed.R.Civ.P. 51. It is an important omission which should be dealt with on retrial of damages.
For these reasons I believe the jury verdict of liability should be affirmed in favor of Elder-Beerman and the dollar judgment of damages should be vacated and remanded for retrial.
ADDENDUM
Since my views on affirmance of the jury verdict as to liability have proved unpersuasive to my colleagues, this case (absent Supreme Court intervention) must be retried.
Without deviating from the opinions expressed above, I now record my vote to include the conspiracy to restrain trade issue in the new trial.
. We have not found and no one lias cited to us a line of testimony which suggests that the exclusive suppliers against whom Elder-Beerman complains consulted with or agreed with each other about anything. Each did, of course, consult with Rike’s. Some agreed to grant exclusives to Rike’s under the threat of being denied its business. And doubtless the jury could have found that each of these salesmen in the Dayton area knew that the same thing was happening to others. It may be that this is all that is needed to constitute a horizontal boycott. But to this point no case appears to have gone this far. But see United States v. O’Connell, 165 F.2d 697 (2d Cir. 1948). Like my colleagues, I am inclined to feel that more is needed than this to supply a rim for this wheel.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9458099. Public record. Not legal advice.