# Petition — Bowen v. New York News, Inc. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385003_1671%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1976 - **Citation:** 425 U.S. 936 ## Text — . Supreme Court, U. & . k i L. b vb ‘%, FEB 3 1915 MICHAEL RODAK, IR, CLERK | me ly THe Supreme Court of the United States October Term, 1975. » %5-1102 CHARLES W. BOWEN, Jn, d/b/a Susurmia News Detivery SERVICE, RICHARD CARTABUKE d/b/a R. Canranuxe News Dit, JO: SETH DITTA and JOSEP AILLA, DELLA DAVIS, SOL L, GOLDBERG 4/b/a Piainview News Deuivery, THEODORE MARKOWITZ d/b/a_A.M.F, Newsraren Dettvery Service, FRANK MIRRO and EMANUAL MIRRO d/b/a Franve. News Servicn, JACK POSEROW as Aasignee of VALLEY Stream News Service, INc.,, BENJAMIN and FLORENCE ROSENBLUM d/b/a Srevans News Service, HOWARD B, SCHULZ and MARGARET SCHULZ d/b/a Newspeaten, KENNETH SWEENEY, JOHN KAHRS d/b/a New York Newasrarer Dewivery FLORAL PARK NEWS DELIVERY, Inc.,, HUNTINGTON NEWS DELIVERY, Inc, EDWARD A, SHANK d/b/a Frorat Park News Service, HARRY FOX d/b/a Menit News Company, JACK GULLO d/b/a F, & M, News Service, WALTER GREENBERG d/b/a Park News Service, SALVIN SALES CORP., HAROLD 0. RATHSAM a/b/a Aro. Newsrarer Service, HUGH HOLMAN d/b/a Nassau N ewaeraren DeLivery, EDWARD PERROT d/b/a LIncoLN Home Nyws, Petitioners, againat NEW YORK NEWS, Inc, JACK UNDERWOOD, ROBERT 0 SUL- LIVAN, ANTHONY GATANZARO, DAVID AUERBACH, DON. ALD A. NIZEN, GABRIEL LEWANDER, F. M. FLYNN, WIN- FRED JAMES, JOHN ERWIN also known as Jonn Inwin, SY HECHT, ERNEST SMITH, JOSEPH CONWAY, P. PASTOR. ELLI, J. PASTORELLI, ‘BERNARD F. SMITH, HOWARD ENT, BE. DeBELLA, MRS. ARTHUR C. ELLERMAN, RAY- MOND LEDDA, MICHAEL LEPORE, VICTORE LEPORE, ARNOLD BLUME, WALDO RODRIGUBZ, E. CAPAZZI, RON- ALD PARKHURST, W. JOUBERT, C. McNALLY, J. RABEN, CHARLES ASHDOWN, J. OCCHINO, R. CARRELL, B. SMITH, and “JOHN” REILLY (whose first name is resentl unknown) and “JOHN DOE”, “RICHARD ROE” and “JANE DOB", being persons whose identities are presently unknown to — Om ¢ . —_——— ——_ = = === Petition for Writ of Certiorari to the United States Court of Appeals for the Second Circuit. — — pemeny Py pg an torney for Pe ers 205 Madison Avenue New York, N. Y, 10017 (212) 725-5959 Table of Contents. Page Ne eicinctncentnicnemnvespengeeemnsenepipcemnmsemnetienees 2 REESE AES REID ee er eee nee 2 Questions Presented for Review .............ccccenen 3 Statutory Provisions Involved o........66ccccceerene 7 Statement of the Case ................. Pe AREER ETS ED eee on | A. Home delivery by The News prior to 1966 ... | B. Termination of 16 plaintiffs 00.0000... 10 C, The status of the franchise dealers and The News a8 Wholesalers ............ccccccccsceresereeeseeereeeees 12 DD, The operation and effect of the franchise sys tem upon competition and circulation ............. 1h EK. Price and other discriminations against the route dealer in favor of the franchise dealer 18 F, Proceedings in the Distriet Court and Court ff REESE ER Re —— Port I, This Court should grant review to deter- mine whether the Court below properly re- versed the findings of the trial Court, with- out any ruling that such findings of the trial Court were clearly erroneous, when the findings of the trial Court were based upon uncontra- dicted testimony and concessions of the parties successfully seeking reversal, and when such factual findings were clearly supported by un- contradicted evidence supplied by the parties who sought reversal Point Por Point Pont il, Il. This Court should grant review to deter- mine whether the Court below denied plain- tiffe an opportunity for a hearing on the ques- tion of whether the aggregate of The News’ re- straints on trade—price fixing, termination of route dealers, boycott, territorial and customer restrictions, price and other discriminations, and failure to make available copies of The News in varying localities—amounted to an unreasonable restraint of trade o00.0.00....0606 6 Ill. Since newspapers are unique rather than fungible items, and are protected by the First Amendment, price fixing was illegal per se under the McGuire Act because The News was not in free and open competition with commodities of the same general class ............... amanda IV. This Court should grant review to deter- mine a conflict in decisions of Courts of Ap- peals, and with this Court, as to standing of plaintiffs to assert illegality of the customer and territorial restrictions of The News’ fran- chise agreements, The plaintiffs here had the requisite standing because they were injured by the restrictions V. This Court should finally determine an important issue: whether intent to monopolize is a prerequisite for a conspiracy to monopo- lize under Section 2 of the Sherman Act. In any event, the findings of the Courts below that such intent was not shown here were clearly erroneous, and should be reversed Page $1 ili, Point VI. This Court should grant review of the denial of plaintiffs’ Robinson-Patman claims in- volving price and other discriminations, to de- termine whether when the components of the article in question have passed through inter- state commerce, discrimination is permissible simply because the finished article itself (the newspaper) is not the subject of price diserimi- nation in actual interstate sales COPTER RRR CRO eeee Conciusion, This Court should grant review of the eae oe Index to Appendix, Arrenvix A—Opinion of Bauman, D. J. . Arrennix B—Opinion of Mansfield, Cireuit Judge . Aprenpix C— Statutes Involved . Page 43 iv, TABLE OF CASES. Albrecht v. Herald Co., 390 U. 8S. 145 (1968) ........ 20, American Motor Inns, Ine., v. Holiday Inna, Ine., 52 F. 2d 1280 (8rd Cir, 1975) ....cccvcccsereremennenns Associated Press v. United States, 326 U. 8. 1, 27- BB CABGBD cccccccsecccecescnsseccnccnsessercnssnmmsnnenenaan Blankenship v. Hearst Corporation, 519 F, 2d 418 (Oth Cir, 1975) ORE! Calderone Enterprises Corp, vy, United Artists Theatre Cireuit, 454 F. 2d 1292, 1295, 1296 (2nd Cir, 1971), cert. den, 406 U, 8, 9380 (1972) Cavender v, Cavender, 114 U, 8, 464, 471 (1885) ...... Kastinan Kodak v. Federal Trade Commission, 158 F. 2d 592 (2d Cir, 1946), cert, den, 330 U, S, 828 (1947) ae Fleming v. Van Der Loo, 160 F, 2d 906, 909-10 (D.C, Cir, 1947) Gulf O} Corp. v. Copp Paving Co,, 419 U. SS. 186, YOO (1974) Hawaii v. Standard Oj! of California, 405 U. 8S, 251, 262, n. 14 (1972) ER Industrial Bldg. Materials, Ine. v. Interchemical Corp., 437 F. 2d 1336, 1343 fn, 8 (9th Cir, 1970) sosvevetdsisiinatiiaeaaaaa 31 = & 33 23 v. Page Kansas City Stockyards Co. of Maine v. Anderson, 119 F. 2d 91, 93 (8th Cir. 1952) —................. 23 Mandeville Island Farms, Inc., v. American Crystal Sugar Co., 334 U. S. 219, 236 (1948) —.............. 35 Mercelis v. Wilson, 235 U. S. 579, 583 (1950) —.......... 24 Metropolitan Broadcasting Corporation v. Lebowitz, 293 F. 2d 524, 527 (D. C. Cir. 1961) ........... 23 Morning Pioneer, Inc., v. Bismarck Tribune Com- pany, 493 F. 2d 383 (8th Cir. 1974) 20000000000... 42 In re Multidistrict Vehicle Air Pollution M. D. L. No. 31, 481 F. 2d 122, 128 (9th Cir. 1973) cert. den. 414 U. S. 1045 (1973) 20. 36 Nash v. United States, 229 U. S. 373, 378 (1913) ... 39 Noble v. McClatchy Newspapers, F. 2d (9th Cir. 1975), 1975-2 Trade Cases 960,594 31, 37 Oseanyan v. Arms Co., 103 U. S. 261 (1880) —........ 24 Radovich y. National Football League, 352 U. S. Ee 35 Shapleigh v. Mier, 299 U. S. 468, 475 (1936) 23 Stacher v. United States, 258 F. 2d 112, 116 (9th EES SSS 23 Stewart v. Lansing, 104 U. S. 505, 511-2 (1881) 23 vi. Page United States v. Arnold, Schwinn & Co., 358 U. S. 8 2 yy 36, 37 United States v. Topco Associates, Inc., 405 U. 8. kt) ee 36 United States v. Yellow Cab Co., 338 U. S. 338 COD cccreccncccescsansevnterstnamstinctanieniaceneninnidininnahennninian 22 Zenith Corp. v. Hazeltine, 395 U. S. 100, 123 (1968) .... 22, 23 STATUTES. McGuire Act, 15 U.S.C. §45(a@) -..-.--------------------eeeeeee 5, 7 Sherman Act: ee eee 7 15 U.S.C.: ee ae 7 Robinson-Patman Act, 15 U.S.C. §13 ~...................... 7 Federal Rule of Civil Procedure 52(a) ................ 3,°7 New York Education Law $3228 .........................---.------ 7 United States Constitution: 2 RES ees 7 eee 7 Die GD ccseceticncscesssecreneieanisiiennteiintabeninaciniaiaes 2 eye 35 MISCELLANEOUS. Antitrust Problems in the Newspaper Industry, 82 Harvard Law Review 319, 326 (1968) _........... 41 In THE Supreme Court of the Anited States October Term, 1975 No. —_ Cuartes W. Bowen, Jr., et al., Petitioners, against New York News, Inc., et al., Defendants. <> Petition for Writ of Certiorari to the United States Court of Appeals for the Second Circuit. To the Chief Justice and the Associate Justices of the Supreme Court of the United States: Your petitioners, all of whom are or have been inde- pendent route dealers (home deliverers of all news- papers), hereby petition for a writ of certiorari to re- view the order and judgment of the United States Court of Appeals for the Second Circuit, 1) insofar as it reversed the findings and judgment of the United States District Court for the Southern District of New York, which had held that certain agreements of the New York News with its franchise dealers (dealers who re-sold copies of The News to newsboys) were illegal price- fixing agreements per se, that the franchise agreements contained illegal territorial and customer restrictions further in violation of Section 1 of the Sherman Act, and that the defendants had conspired to monopolize part of the newspaper home delivery market in violation of Sec- - a tion 2, such reversal being without any opportunity for a determination as to whether the aggregate of price- fixing, boycotting, territorial and customer restrictions, price and other discriminations, termination of ‘certain plaintiffs and harassment constituted unreasonable re- straint of trade even if not per se violations; and 2) insofar as that decision affirmed denial of plaintiff’s claims for price and other discriminations under Robinson-Patman. Opinions Below. The opinion of the United States District Court for the Southern District of New York (per Bauman, J.) is re- ported at 366 F. Supp. 651, and is appended hereto as Appendix A. The decision of the United States Court of Appeals for the Second Circuit is reported at 522 F. 2d 1242, and is appended hereto as Appendix B. Jurisdiction. The judgment and order sought to be reviewed was made and entered on July 23, 1975. On August 1, 1975, a motion was made to extend the time to file a petition for rehearing to and including August 27, 1975, which motion was granted and entered on August 8, 1975. An order, without opinion, denying the timely motion for rehearing (en banc) was made and entered on November 5, 1975. The statutory provision believed to confer on this Court jurisdiction to review the judgment and order in question is 28 U. S. C. §1254(1). 3 eee. Questions Presented for Review. 1. Whether the Second Circuit properly discharged its appellate function under Rule 52(a) of the Federal Rules of Civil Procedure, under which the findings of the trial Court are not to be set aside unless “clearly erroneous,” when: a) Though the parties had testified and stipulated at trial, as confirmed by exhibits, and without con- tradiction, that, pursuant to the price-fixing agree- ments between The New York News and its fran- chise dealers, the franchise dealers re-sold copies of The News to newsboys (and were hence whole- salers), and that the news boys re-sold to the ulti- mate consumers (and were hence retailers), and the trial Court so found, the Court of Appeals re- versed such findings on the basis of its own new and inconsistent findings as to which there was no evidentiary support in the record whatsoever,— that The News sold directly to consumers—, and i) the contentions upon which the Court of Appeals reversed never having been raised below, and the uncontradicted testimony having been that The News did not sell directly to consumers, and ii) the Second Cireuit thus permitting the appellants before it to appeal successfully on the grounds that their uncontradicted trial testimony was not true, and b) The Court below merely affirmed the trial court’s findings of a lack of intent to monopolize, while ignoring the evidence of The News’ intent to de- stroy or seriously injure the independent route dealer system so as to deprive potential publisher 4 competitors of access to the home delivery market through the cost-free route dealer system, such intent to monopolize being shown by i) termina- tion of route dealers who would not become fran- chise dealers, while advising them that, to be- come franchise dealers, they would have to give up other newspapers or dispose of them, and that there was no time to sell their routes; ii) termina- tion of suppliers of terminated route dealers; iii) The News having had no home delivery department until 1964, and having made no serious efiort to increase home delivery circulation before introduc- tion of the franchise system, adopted without hav- ing made any cost studies, and iiii) the cost studies later made before the franchise system became operative in 1966 showed that The News would lose money by the franchise system, and in much larger amounts than those studies showed it would lose from obtaining the same increase of circula- tion through the route dealer system, and c) The Court merely affirmed the trial Court’s finding of The News’ lack of intent to monopolize, ignor- ing the overwhelming evidence of such intent, such as that The News’ franchise program had been planned so that The News would lose money, its termination of route dealers who would not become franchise dealers while denying them the oppor- tunity to sell their routes, termination of sup- pliers of terminated route dealers, and a series of predatory acts including surveillance, false ar- rest and malicious prosecution, the intent of all of which could only have been to destroy or se- riously injure the route dealer system in order to prevent any new or existing newspaper from hav- ing access to the cost-free home delivery system provided by the route dealers? _—— Te eae 2. Whether the price fixing agreements between The News and its franchise dealers were illegal per se, and not immunized by the MeGuire Act, 15 U. S. C. §45(a), because i) such agreements were between wholesaler and wholesaler, or, under the reasoning of the Court below, between retailer and retailer, the Court below having found that both The News and the franchise dealers were retailers, and ii) because The News was not in free and open competition with commodities of the same general class? 3. The trial Court having found per se price fixing violations and therefore never having determined whether The News’ franchise system, encompassing an aggregate of trade restraints (termination of route dealers unwill- ing to become franchise dealers, denial of opportunity to sell routes before becoming a franchise dealer, boycott, price-fixing, territorial and customer restraints, and re- sultant restraints upon circulation of The News and other papers) constituted an unreasonable restraint of trade, in violation of Section 1 of the Sherman Act, a) was it error for the Second Circuit to rule that there were no per se violations, without remanding for trial or finding on the issue of whether there had been an unreasonable restraint of trade, and b) were petitioners thus denied an opportunity for a judicial determination after a hear- ing, and thus deprived of property without due process of law in violation of the Fifth Amendment? 4. Whether the Court below properly found a lack of standing of plaintiff route dealers to attack territorial restraints upon franchise dealers on the theory that a route dealer was thus assured of facing competition from no more than one franchise dealer, when in fact the record showed that there were several franchise dealers at the same time in most route dealers’ areas? 5. Did the Seeond Circuit err in ruling that a retrial of the Section 2 claim upon remand was unnecessary be- cause of its affirmance of part of the Section 1 claim, though the standard of proof of damages under the See- tion 2 claim would be much broader than the narrowly prescribed standards for damages laid down by the See- ond Cireuit for the Section 1 claim? 6. Whether there is a requirement of proof of specific intent in cases involving conspiracy to monopolize, as opposed to cases involving attempts to monopolize and whether such intent appears here? 7. Was the refusal of | News to deal with plaintiff route dealers who had failed or refused to enter into price fixing agreements, plus other acts by the respond. ents—including a) detection by respondents of the sources of plaintiffs’ supply, which were themselves then to be terminated by the publisher; b) terminating or threaten- ing to terminate all sales to such sources of supply or reducing the number of copies the source receives so that it could no longer be a source of supply: ¢) constant surveillance by franchise dealers, the publisher’s em- ployees and armed off-duty policemen; d) the publisher instructing its franchise dealers to falsely tell route dealer’s customers (potential, former and current) that the plaintiffs were out of business and that they could obtain home delivery of the newspaper only through the franchise dealers—an unlawful conspiracy to eliminate intrabrand competition in the home delivery market by monopolizing trade in the said newspaper, in violation of Section 2 of the Sherman Act? 8. a) Did the territorial and customer restrictions in the franchise agreement, which the publisher conceded prevented franchise dealers from selling to other than newsbovs and from selling outside their allocated ter- te 7 ritories, violate Section 1 of the Sherman Act, because the publisher parted with title, dominion and risk of loss when it sold its newspapers to franchise dealers without the right to make returns and without supervision over the actual home delivery, whether or not such restric- tions were ancillary to price fixing, and .. b) Did plaintiffs have standing to attack such restric- tions? 9. Was it error to dismiss the claims of the plaintiffs for violation of the Robinson-Patman Act, in the light of price and delivery discrimination practices in favor of the franchise dealers and against the route dealers by The News, on the ground that no sales to any of the plain- tiffs occurred in interstate commerce, though the franchise system involved such discriminations in interstate com- meree, the prices of the newspaper out of state being de- termined on the same basis as within the state, and the copies of the newspaper sold being composites of news, features, advertising and paper, all of which had crossed state lines? Statutory Provisions Involved. The following statutory provisions are involved in this case: Sherman Act, §§1 and 2, 15 U. S. C. §§1 and 2; Robinson-Patman Act, 15 U. S. C. §18; MeGuire Aet, 15 U. S. C. $45a; Federal Rule of Civil Procedure 52(a); New York Education Law §3228; First and Fifth Amend. ments, United States Constitution. Their pertinent text is reproduced herein as Appendix C, Statement of the Case. A. Home delivery by The News prior to 1966. Newspaper home delivery in the New York City metro- politan area has traditionally been handled by independent route dealers, such as plaintiffs, who purchase routes and home deliver all newspapers, including special in- terest newspapers, to customers on such routes. This in- volves some 20-22 newspapers (65a).* The News conceded that it did practically nothing with regard to developing home delivery sales in Nassau and Suffolk Counties (part of New York City’s metropolitan area) prior to 1963 (477a), and indeed had no home de- livery circulation department until 1964 (1214a). Be- tween 1963 and 1966, the only efforts towards develop- ing such home delivery circulation made by The News were occasional samplings and telephone solicitations (477a), with route dealers cooperating in these limited promotional efforts—even though The News on occasion did not pay some of them as promised (S85a-86a, 182a- 183a, 416a)—with the route dealers doing their own solicitation of orders. In early 1965, The News began several pilot test fran- chise programs in areas where there were no independent route dealers, the newspapers being home delivered at less than the cover (newsstand) price (965a-967a), one of which showed a substantial gain in circulation, starting *Such references are to the Appendix to the record filed in the Second Circuit below, a copy of which Appendix will be certi- fled to this Court. The Appendix contains all the testimuny. 9: from zero delivery. No evidence was offered by The News as to the success of the other programs, or of any controls by attempting to have route dealers develop the same or similar virgin territories (965a-966a, 837a- 838a). Though The News was assigning franchise territories by September or October of 1965 (718a-72la, 83la-834a, 837a-838a), studies were first made by The News in early November, 1965, to determine the cost of achieving a specified expanded circulation through the independent route dealer system as against achieving the same in- crease via the franchise system, These studies (Pl. Exs. 98 and 99, 1401a-1404a) showed a spiralling cost in both cases, but with the cost of achieving the same increased eirculation through the franchise method ranging (in different years) from over 500% to 17% greater, both studies projecting net losses from the increase of sales, No evidence whatsoever was introduced to show that ad- vertising revenues increased, or that an expected increase in advertising revenues was considered, in determining whether to embark upon the program.' The News later revised its figures of net losses sub- stantially upward (Pl. Ex. 97, 1399a), the projection of the cost of the franchise system being some three times 'If clear errors in the cost studies are corrected, the projected net loss in obtaining the same increased circulation via the fran- chise method ranges from seven to three times higher. The errors were: (1) The clearly invalid assumption that the actual cost of printing and delivering the same increased number of copies of the paper would be hundreds of thousands of dollara higher for route dealer distribution than for franchise distribution; (2) Less- ening the costs of the franchise system by an amount for ‘‘Sav- ings on Returns’’ though the route dealers had no return priv- ileges, Revised figures making such corrections were submitted as Appendices A and B to our Proposed Findings of Fact in the District Court. greater than for obtaining the same increase in home de- livery through the independent route dealer system, again with the cost of the independent route dealer system de- velopment being grossly overstated. No evidence was ever offered to explain why The News adopted a method of increasing circulation to incur losses, nor why it sought to incur heavier losses by using the more expensive franchise system. The franchise sys- tem did give The News the control it desired over price, exclusivity of product and method of distribution (1000a), while the independent route dealer system provided a cost-free method of home delivery to existing newspapers as well as to possible new entrants into the marketplace of newspapers, route dealers buying at wholesale rates from the newspapers (or their distributors) and reselling at retail to their customers for an added service (delivery) charge. B. Termination of 16 plaintiffs. In late 1965 and early 1966, a number of the plaintiff route dealers were contacted and offered the opportunity to become franchise dealers, which meant they would have to give up their then routes, sell only The News, not at their price to their own customers, but to news- boys at the maximum price stipulated by The News. very route dealer who was invited by The News to be- come a franchise dealer was told in the letter of invita- tion that boys had to be used, the letters of invitation uniformly noting that “The News is seeking the services of qualified men to supervise the boy delivered franchise district” (see Pl. Ex. 23, 1363a, and Pl. Exs. 27, 30, 31, 37, 47 and 75, not reproduced in the Appendix). It was admitted by The News that the franchise system was a hoy system (1228a); route dealers and other prospective franchise dealers were told they had to use boys in the fran- chise system (88a, 89a, 341a, 703a-704a, 8330), counsel for 11 The News noting that a purpose of the franchise system was “to establish a boy system * * °” (355a). Plaintiffs who were offered the opportunity to become franchise dealers were told by The News that they would have to give up other newspapers (207a, 303a, 349a, 384a, 599a, 66la) or dispose of that part of the route (773a). The two plaintiffs who stated that they wanted to sell their routes were told by The News that there was no time to do so (Sa, 325a, 3400, 3414). The plaintiffs were told that if they did not agree to adhere to all the provisions of the franchise agreement, their supplies of The News would be cut off. None of the plaintiffs were willing to bow to its restrictive terms, and within a short time, beginning on January 10, 1966, 16 of the plaintiffs were terminated by The News (12638a), There ensued a conspiracy by The News and its fran- chise dealers to prevent the 16 terminated plaintiffs from obtaining copies of The News, which findings of con. spiracy were upheld by the Second Cireuit (App. B, infra, pp. 8la-85a), including harassment under which vary- ing of the plaintiffs were followed, in ears manned by armed off-duty policemen, in efforts by The News to find out the source of supply of terminated franchise dealers, delivery to which sources of supply would be terminated (850a-85la), culminating in plaintiff Marko- witz being arrested for allegedly stealing what were his own newspapers. The charges against Markowitz were dropped when The News was unsuccessful in its attempt to obtain perjured testimony in an effort to convict Markowitz (624a-626a).’ "Plaintiff Markowitz's separate claim for false arrest and malicious prosecution was pursued in a separate action in the New York Supreme Court, settled in November, 1975, for $50,000, moments before a jury would have returned a verdict in his favor for $157,500. Markowitz's claims for violation of antitrust laws survived the settlement, by agreement. C. The status of the franchise dealers and The News as wholesalers. Counsel for The News stated in his opening that “The franchise dealer is in effect, as Mr. Levy [plaintiff's coun- sel] noted, a wholesaler. He buys the papers and re- sells them to a carrier boy who then makes the sale to the subseriber” (59a), At a later point, counsel engaged in the following colloquy : “Mr. Levy: As I understand it, under the franchise agreements, The News wholesales to the franchise dealers who in turn wholesale their rs to the news boys, who eventually do the charg- ing and billing. Is that correct? “Mr. Hughes f[feounsel for The News]: I wouldn’t use the word wholesale all the way down the line there, but that is basically correct. The News sells to the franchise dealer at a price. The franchise dealer sells to the carrier boy at a price. The carrier boy sells to the subscriber at a price ** (187a). Still later, counsel for The News noted the following: “This was strictly a vertical arrangement, your Honor, where we dealt with the price which, of course, we had the right to fix, initially to our cus- tomer who purchased from us, the franchise dealer. Under the Fair Trade Law we had the right to fix the price at which he re-sold, and to the extent that he is a wholesaler in that he delivered to the hoys and the boys re-sold, we had the right to fix that price” (914a-915a), The testimony of the witnesses was in accord. Thus, The News’ Cireulation Director Underwood, its principal witness, testified that “We fixed the price at which the hoy sells to the ultimate consumer and we fixed the price at which the franchised dealer sells to the boy ° * ° (1140a). Then, relating the chain of distribution, Under- wood went on to note that “The paper is produced by The News, The News distributes to the franchised dealer, the franchised dealer distributes to the boy, the boy dis- tributes to the home,” and that under the franchise sys- tem, “The News fixes all of those prices” (ibid.). Underwood expressly disclaimed that there were any occasions where The News sells directly to the carrier boy or to the ultimate consumer, in the following colloquy: “Q. Are there any occasions when The News sells eee to the carrier boy in the franchise system? . No. “Q. Are there any occasions where The News sells directly to the ultimate consumer for pur- pose of home delivery in any area where the ranchise system is established? A. No. That would only be mail” (1140a). An envelope was used by the franchise dealer, whose use was specifically approved by defendant Catanzaro of The News (Pl. Ex. 84, 1366a; 915a-9l6a), which was given to the boys, which contained the following, ad- dressed to the boy carriers: “Your billing rate is $.0787 per daily i and $.2375 for Sunday paper. The difference between this rate and the retail rate you charge your cus- tomer gives you a profit margin of ¢.1903 per daily and Sunday customer.” The franchise system did not provide for reimburse- ment to the news hoy if he did not collect from his ecus- tomer. Thus, defendant Lepore testified as follows (858a-859a ) : “Q. Suppose one of the kids on the route did not collect from his customer, whose loss was that? A. 14 Well, technically that should be the carrier boy’s loss. In our particular case, we have a policy where we reimburse the carrier for any losses. But there is no provision, as far as the franchise system is concerned, to reimburse the carrier.” Franchise dealer Carter further testified as follows: “Q. Suppose one of the boys didn’t collect from his customer, whose loss was that? A. Well, that was the carrier boy” (744a). Cireulation Director Underwood of The News testified (1136a-1137a) that the use of a boy system “provided for us an automatic sales force,” with about 5,000 boys in- volved in the program. All of the franchise agreements provided that the franchise dealer “is and shall remain an independent contractor and not an employee or agent of The News” (1262a). The franchise agreements themselves further reflected the relationship between the franchise dealers and the boys. Thus, in an interim agreement, in letter form ad- dressed to the franchise dealers, the franchise dealer was told that “You will not charge any carrier boy mak- ing such deliveries and collections more than the presently established wholesale rate * * *” (1350a). In the final agreement, Plaintiffs’ Exhibit 10, it was provided in TT(b) that the franchise dealer agrees “(b) To super- vise and direct the delivery and resale of copies of The Daily and Sunday News to such regular subscribers in his territory at no more than the regular established home delivery price” (1355a). (Italics supplied.) ITI (d) of the final agreement again restates the relationsh:p, pro- viding that the franchise dealer would not “Charge any carrier boy engaged in making deliveries and collections 15 in his territory more than the price established therefor by The News” (1358a). The records of The News showed sales by the boys (Deft. Exhs. O and P, 1100a, 110la, 1419a-1422a). The boys did the canvassing, soliciting and sampling (214a, 217a, 255a, 333a). The franchise dealer sampled himself only before his route became operative (750a, 75la, 922a), after which the boys and the franchise dealer both did soliciting (924a). There was no evidence in the record to show that The News did any sampling. It merely solicited orders, by telephone, in an area only after the boys had finished soliciting there (924a). The News’ ads for boys, contained in Plaintiffs’ Exhibit 12, introduced in evidence at 191a-192a, noted often that boys were wanted to canvass, as well as deliver. And the testimony of The News was that the “major part of the orders came from boys soliciting” (925a). D. The operation and effect of the franchise system upon competition and circulation. Because of the way the franchise system was developed (see, infra, pp. 17-18), the franchise dealer could not in the beginning of the operation of his route cover all cus- tomers within that route. Thus, some customers in plain- tiff Markowitz’s area were not able to purchase The News from the franchise dealers in his area until 1972, though plaintiff had been terminated in 1966. Had Markowitz gone out of business, some 150 daily and 200 Sunday customers for The News would not have been serviced with any newspapers until 1972 (94a-95a). When a terminated route dealer did go out of business, as did plaintiff Bowen, there was no delivery made of the Times, Wall Street Journal or other papers, although by the time of the 1972 trial there was someone servicing parts of Rowen’s area (414a-415a). Similarly, a route dealer who had been terminated in early 1966 abandoned the route; for several weeks thereafter, it was not serviced with any newspapers except for copies of The News, un- til plaintiff Davis moved into the route (497a-498a). As the difficulty increased in securing papers, plaintiff Davis ceased delivering The News to customers unless there was a Times subscriber on the same block, a practice which began in 1968 (535a-536a). After the terminated route dealers went great distances to secure copies of The News, they were unable, even then; to secure enough copies of The News to fully serv- ice their customers. Thus, Bowen on numerous occa- sions received no deliveries of The News (419a-420a), and on five occasions received no copies of The Sunday News (45la). Gullo, for a month after termination, was able to service only a few of his News customers (661a- 662a); Mirro was unable to service his customers on certain occasions after May 9, 1966 (638a); Perrot was able to get enough papers to service only 50% of his customers the first day, and 75% of his customers the second day after termination, with Perrot then having 315 News customers (649a); and Sweeney was unable to service any of his customers with The News for a couple of weeks after termination (216a). Former franchise dealer Carter testified that although the date of his written contract was January 7, 1966, he did not start delivering copies of The News in his territory until February, 1966. Had terminated route dealer Markowitz not distributed copies of The News at that time, there would have been no distribution of The News at all in Carter’s territory until February, 1966 (729a). In the two Lepore franchise territories, each about twenty square miles in area, after the major route dealers 17 went ont of business in or: about 1968, there have been no New York Times deliveries in most of those two areas, Only about 15 to 20% of one area has home deliveries of The Times; although there are some Sunday home deliveries, in the other area, there is no normal delivery of the daily editions of The Times or The Wall Street Journal (834a-838a). The franchise home routes were developed by sampling one boy route, of 200 dwelling units, for a week, and beginning regular service on that route thereafter at the rate of one boy route per week (839a). Thus, there were no deliveries of The News by either of the de- fendants Lepore during the first week of operation, and it was two weeks after January 10, 1966, before the first deliveries of The News to Lepore customers began (840a-841a). The routes were developed extremely slowly (844a-846a, 922a-924a), and there is still a square mile of the Lepore routes where no newspaper deliveries are being made (846a-847a). It was not until late 1968 that the coverage of the areas by the Lepore’s was pretty much total, with the exception noted above (848a). And prior to the Lepore’s going into an independent route dealer’s territory, the territories had been fully serviced with all newspapers by independent route deal- ers (913a). When the independent route dealers had been invited to become franchise dealers, The News did not have a franchise man ready to work on that area in most cases (971a). The News conceded that even when the fran- chise dealer was ready to go into an area, it would be from one to four weeks before a franchise man could start in regularly delivering any papers at all, so that unless an independent route dealer who had been termi- nated was able to get copies of The News elsewhere, all News snhseribers in that area wonld he withont home 18 delivered copies of The News for that one to four week period (969a-970a). When The News received home delivery orders for an area in which there was no franchise dealer, the orders were destroyed, and the customers were not notified thereof (895a-896a). There are less newsstands in the suburban area of Long Island (Nassau and Suffolk Counties) than in New York City, and less other retail outlets for newspapers, such as stationery, candy and drugstores (983a-984a). From 1966, until at least 1970, in a number of New York City suburban areas, where newsstands exist, a number of them were closed on Sundays and holidays, such as railroad stations. Thus, persons living in a suburban area could only receive copies of newspapers through de- livery to their homes, unless they are willing to travel long distances (802a, 983a-984a). For example, about 80% of the circulation of The News in the Lepore terri- tories is home delivered (894a). E. Price and other discriminations against the route dealer in favor of the franchise dealer. It was undisputed at the trial that The News subsidized the franchise dealers till they reached a certain level of revenue, and at all times sold to the franchise dealer at a much lower price than it sold to the route dealer. Ad- ditionally, a special franchise delivery system was set up, which resulted in delivery of copies of The News to the franchise dealers several hours earlier than to the route dealers. F. Proceedings in the District Court and Court of Appeals. After agreement as to a bifurcated trial, first on lia- bility, then on damages, the liability trial was held in May of 1972, a non-jury trial. In June of 1973, Judge Bauman held that The News’ franchise agreements were illegal price fixing agreements; that sales of copies of The News to the plaintiffs had been discontinued in furtherance thereof, that. the frawehise agreements con- tained illegal territorial and customer restrictions, all in violation of Section 1 of the Sherman Act. He further ruled that the defendants had conspired to monopolize part of the newspaper home delivery market, in violation of Section 2. The Court thus upheld the claims that route dealers who had been terminated by The News on or after January 10, 1976, as well as those who continued to receive copies of The News from The News and who operate in areas in which the franchise system has been instituted, and the claim of one route dealer who ac- quired his route from a terminated route dealer and who had not sought to purchase from The News. The Court dismissed the complaint of the route dealers who con- tinued to receive copies of The News and who operated in areas in which the franchise system had not been in- stituted, and dismissed complaints of the remaining plain- tiffs insofar as they were based on alleged violation of the Clayton Act and the Robinson-Patman Act. All of the defendants appealed from the resulting judgment; the plaintiffs cross-appealed from the denial of the Robinson-Patman claims, and to the extent that the judgment did not afford the equitable relief requested by the plaintiffs in their proposed judgment, and only from such parts of the judgment (1343a-1344a). The Second Circuit held that the franchise dealers were not wholesalers, in that the selling function, including ad- vertising, sampling and solicitation of prospective home subscribers, was performed almost entirely by The News and by the franchise dealers rather than by the boys, and therefore the agreements between The News and its franchise dealers were not agreements between whole- salers and wholesalers, holding that the agreements thus met the requirements of the MeGuire Act and therefore did not violate the Sherman Act. While it affirmed the finding that The News combined with the franchise deal. ers in violation of Section 1 of the Sherman Act to pre- vent some plaintiffs from obtaining copies of The News, it reversed the District Court’s findings that this and other activity amounted to a conspiracy to monopolize in violation of Section 2. It affirmed the dismissal of the plaintiffs’ claims of violation of the Robinson-Patman Act. It held that no liability existed for injury caused hy the introduction by The News of the franchise system, the lower home subscription prices resulting from that system, or The News termination of direct sales to in- dependent route dealers because of its decision to sub- stitute the franchise system, dismissing the claims of those plaintiffs to whom The News continued to sell, modifying the injunctive relief provisions of the District Court judgment accordingly. Within the time permitted for filing a petition for re- hearing, plaintiffs sought an extension of such time, which was granted by the Court below. A petition for rehearing was filed squarely raising the question, inter alia, of whether the Court had properly discharged its appellate function under Rule 52(a) of the Federal Rules of Ap- pellate Procedure. On November 5, 1975, the Second Cirenit denied the rehearing petition, and subsequently staved the mandate of the Court pending determination of this petition for certiorari. 21 This Court should grant review to determine whether the Court below properly reversed the findings of the trial Court, without any ruling that such findings of the trial Court were clearly erroneous, when the find- ings of the trial Court were based upon uncontradicted testimony and concessions of the parties successfully secking reversal, and when such factual findings were clearly supported by uncontradicted evidence supplied by the parties who sought reversal. The trial Court found that the price fixing exemption of the Federal McGuire Act and its counterpart Feld- Crawford Act in New York did not protect The News in its agreements with its franchise dealers, since, of course, the MeGuire Act exemption does not apply to contracts between wholesalers and wholesalers. And the trial Court found that The News was a wholesaler “within the normal and customary definition of ‘wholesaler’ as one whose business is the selling of goods in gross to retail dealers” (1281a). As we showed above in our statement of facts, counsel for The News conceded throughout that The News sold copies of the newspapers in bulk to the franchise dealers, who re-sold to the boys, with each boy in the franchise system selling between 20 to 80 copies of The Daily News and 45 to 50 Sunday editions to the ultimate consumers (745a). The testimony of the Circulation Director of The News, Underwood, its chief witness, com- pletely confirmed that The News sold copies of the paper to the franchise dealers who in turn re-sold to the boys, who in turn sold to the ultimate consumer, with Under- wood expressly denying that there were any occasions when The News sells directly to the carrier boy or to the ultimate consumer (see, supra, pp. 12-18). Despite the uncontradicted admissions by counsel for The News, and despite the testimony of its witnesses as to the chain of title, the Second Cireuit determined that The News was selling directly to the customers, that The News did not sell to the franchise dealers, that the franchise dealers did not sell to the boys, and that the boys did not sell to the home delivered customers, all flying in the face of the uncontradicted testimony of The News and the statements of its counsel, and all without any evidentiary support whatsoever. This Court has not previously hesitated to review an antitrust decision of a Cireuit Court to determine whether it had properly discharged its appellate function under Rule 52(a) under which the findings of the trial Court are not be be set aside unless clearly erroneous le. g., Zenith Radio Corp. v. Hazeltine, 395 U. 8. 100 (1969)}]. We submit that in the case at bar, such review should be granted, for the decision below is in conflict with decisions of this Court and of other Courts of Ap- peal, as follows: (a) Even if the evidence would have supported a con- clusion either way as to whether the franchise deal- ers are wholesalers and the news boys retailers, a choice between two permissible views of the weight of the evidence would not be clearly er- roneous, and hence not reversible, 338 U, 8, 388 (1950), But the Court helow went even further, and, as we show below at pages 26-29, made new findings as to which there was no evidentiary sup- port whatsoever, ignoring clear evidence in the ree. ord contrary to what the Court below then found. (b) The Court below failed to give the deference it must give to the decision of the trial judge [Zenith, (¢) (d) supra at 123), failing to give the plaintiffs “the ben- efit of all favorable inferences from the facts proved relative to the” issue [Stacher v. United States, 258 F. 2d 112, 116 (9th Cir. 1958)], though the Court “must take that view of the evidence most favor- able to” the appellees. Kansas City Stockyards Co, of Maine v. Anderson, 119 F. 2d 91, 93 (8th Cir. 1952). The defendants never contradicted, and never in- troduced any evidence to contradict, the massive evidence that franchise dealers were wholesalers and the boys retailers. In the absence of such evidence, it is elementary that the Court below should have affirmed [Stewart v. Lansing, 104 U. 8. 505, 511-2 (1881)], especially when all -evidence tended to confirm this massive evidence, even though appellate counsel might have tried the case differently. Metropolitan Broadcasting Corpora- tion v. Lebowitz, 293 F. 2d 524, 527 (D.C. Cir. 1961). Cf. Shapleigh ». Mier, 299 U. S. 468, 475 (1936), The Second Circuit improperly permitted the de- fendants to prevail upon contentions they had never raised in the District Court, in a matter as to which there was absolutely no dispute at trial. Moreover, its reversal was in conflict with the rule of the Cirenit Court of Appeals for the District of Columbia, which has ruled that reversal is im- proper where, as here, an appellant not only failed to seek a finding at trial, but failed to object to a kev finding, such as here, that the franchise deal- ers and news boys were respectively wholesalers and retailers. Fleming v. Van Der Loo, 160 F. 24 906, 909.10 (D.C. Cir. 1947), (e) Insofar as our research has been able to dis- cover, for the first time a federal appellate Court has reversed findings which were totally supported by the admissions of appellants’ counsel and the testimony of its witnesses, and worked a reversal based upon an argument of appellants that their testimony and their admissions should be disre- garded, This cannot be done, for the admissions were binding. Oscanyan v. Arms Co., 108 U. 8S. 261 (1880), “At all events, it does not lie in the mouth of a defendant in equity to complain that the court assumed his answer made under oath to be true and decreed accordingly.” Cavender v. Cavender, 114 U. 8. 464, 471 (1885). Yet the Court below permitted the defendants to complain that their uncontradicted testimony is not true. Cf. Mercelis v, Wilson, 235 U. 8. 579, 588 (1950). As nearly as we can ascertain, the Court below apparently disregarded the admissions of defense counsel on the theory that the significance of the admissions had not been realized. But at the time of trial, the case had been in the Courts for six years, ample time for defense to have familiarized itself with applicable law. Oscanyan, supra, held admissions by counsel binding where he had two days to prepare, could have requested an adjourn. ment, and no new facts were set forth. More- over, the trial court here noted that all counsel were fully familiar with the implications of the antitrust laws (297a), and defense counsel had repeatedly conceded that except for the harassment issue, there was no material dispute as to any of the facts (f4a, 10388). A rule such as that sugested by the Court below, that an honest admission by counsel familiar with the law, or even unfamiliar with the law, is to be disregarded, is totally novel in our jurisprudential sys.em, and should as- auredly be reviewed by this Court. (f) Moreover, by a reversal based upon evidence not contained in the record and totally contradictory to the trial contentions of the parties who pre- vailed on appeal, the Court below denied the plain- tiffs due process of law, in that plaintiffs would have and could have introduced the following ad- ditional evidence at the trial, which had been con- sidered at the time of trial wholly cumulative in the light of the trial record: (I) An advertise- ment by The News showing that the boys sold to the consumers, photocopy of which, in reduced size, is annexed hereto as Exhibit T; (TT) that franchise dealers were wholesalers, in that they did sell, in addition to the news boys, copies of The News to motor route dealers; (ITT) that The News sold to other vendors in such a manner as to make The News a retailer under the rule of the opinion, mak- ing the agreements between The News and the franchise dealers (if they were retailers, as the Court below ruled) agreements between retailers and retailers, and the price-fixing agreements thus illegal. In any event, as we suggested in our petition for re- hearing, if it were correct, as the Court below held, that the selling function, including advertising, sampling and solicitation of prospective home subscribers, was performed almost entirely by The News and by the franchise dealers rather than by the boys, then The News and the fran- chise dealers were both retailers, and the price-fixing agreements between them would not have been protected by the McGuire Act, because they would have been agree- ments between retailers. This point was not raised until the petition for rehearing filed below, since even in the Second Cireuit the defendants had not taken the position that such selling functions were performed almost en- tirely by The News and the franchise dealers. To a certain extent, the decision below apparently rested upon the tender age of the boys (App. B, infra, p. 72a). This ignored that New York law recognizes that boys of this age may engage in “selling and deliver- ing newspapers * * * to customers at their homes or places of business.” New York Education Law, $3228. (Emphasis supplied.) The United States also recognizes that boys may sell newspapers.’ In looking at what the Court below termed the substance of the relationships, the Court made many findings of fact de novo, contradicted by or inconsistent with the record, Firstly, the Second Cireuit found that the boys had “no real risk and no chance of realizing independent profits,” noting an absence of evidence that boys had sus- tained losses on account of delinquent subscribers. But two franchise dealers had testified, as we noted, supra, pages 13-14, that, if a subseriber did not pay the boy, it was the boy’s loss, under the system. This testimony was never contradicted. Secondly, when the Court recited that the selling function was performed almost entirely by The News and the franchise dealers, this was plainly untrue. See, supra, pages 12-15, . _ ™*The Bureau of Census Oceupational Classification System in a recent revision of 52 of 441 occupational categories changed ‘newsboys’ to ‘newspaper carriers and vendors.’’’ American Newspaper Publishers Aesociation Special Report: Handbook for Maintaining the Independent Contractor Status of Newspaper Car- mers (1974), page 5. (Emphasis supplied.) Thirdly, the Court below relied upon the theory that “The boy hardly has a proprietary interest in the sub seribers or his route,” but this was untrue: If a boy “got orders off of his route, then it would be put on the kid’s route, whatever street the kid delivers on” (75la). De- velopment of new orders thus enlarged the boy’s route. Moreover, The News itself represented to potential news boys that they would have their own route (Pl. Ex. 12, 191a-192a). Fourthly, the Court below further based its finding of a lack of retail standing of the boys partly upon the alleged fact that “their profits remained limited to the established rate per delivered paper” (App. B, infra, p. 73a). But there never was such a rate. The profit of the boys depended upon the spread between the price at which they purchased from the franchise dealers and sold to the consumers (1100a, 1101a; Pl. Ex. 84, 1366a; 915a-916a). The only reason for any limitation of profits was that The News not only fixed the price at which the franchise dealers sold to the boy, but also fixed the price at which the boy sold to his customer (1140a), and never allowed any requested increase in the boy’s profit (907a- 908a). Movreover, in any event, a large portion of the boy's income came from tipping—not controlled by The News (867a). The Court below further completely ignored the con- stant characterization by The News of what the boy earned as being his profit, the difference between his retail rate and the franchise dealers’ wholesale rate. We have al- ready referred, supra, page 13, to the form approved by The News and used by defendant Lepore so reporting, and we note further that many other franchise men used precisely the same language (859a-862a). The franchise dealer’s profit—the difference between the wholesale rate to him and his wholesale rate to the boy—was deducted from The News’ subsidy to the franchise dealers (884a). The boys were told that they had to buy papers (907a), and the boy’s eventual compensation was referred to con- stantly as his profit (908a). Though there were perhaps eight or nine phone solicitors for The News (930a), there were 5,000 boys operating as an automatic sales force (1137a), with phone solicitation occurring only after the boys had solicited (985a-6a). The Court further noted that the franchise agreement did not require the use of the carrier boys at all, which was correct, but it failed to note that the entire franchise system depended on the use of the boys. As we noted above, supra, page 10, every route dealer who was in- vited by The News to become a franchise dealer was told in the letter of invitation that the system so re- quired. Further, The News admitted that the franchise system was a boy system (1228a); route dealers and other prospective franchise dealers were told they had to use boys in the franchise system, and The News’ counsel noted that the purpose of the franchise system was to establish a boy system. See, supra, pages 10-11. Thus, for the first time in recent jurisprudential his- tory, so far as our research has heen able to determine, a Court of Appeals has found facts to exist directly contra to all the uncontradicted and uncontested testimony and concessions of the losing parties at the trial. Not only was there a failure to make any determination that the trial Court’s findings were clearly erroneous, but the Court of Appeals recited “facts” which were directly contrary to what the trial showed. We submit that under these circumstances, there should be a review by this Court to determine whether the Second Circuit properly exercised its Rule 52(a) functions. In yet another instance, the Court again ignored the plain facts of the case. Thus, in finding the refusal of The News to deal with plaintiffs not to be violative of the anti-trust laws on the basis that plaintiff route dealers were not terminated until they had first been offered an opportunity to become franchise dealers, the Court below wrote that “If they accepted [this opportunity to become franchise dealers], it was anticipated that they would sell! their independent routes to others, not they would deprive competing papers of an outlet” (App. B, infra, p. 79a). However, the Second Circuit to the contrary notwith- standing, there was no such testimony as to such anticipa- tion. On the contrary, as we noted in our statement of facts, the plaintiffs were merely told that they would have to give up other papers, or dispose of them, while the two plaintiffs who stated that they wanted to sell their routes were told by The News that there was no time to do so (supra, p. 11). Of course, the McGuire Act is no longer law. But we submit that this should not be a consideration militating against the grant of certiorari here, since the question we bring for review is whether an appellate court has prop- erly exercised its Rule 52(a) functions, the importance of which question is not negatived in the least by the fact that the legislation upon which it relied has since been repealed. Additionally, we note that the decision below is in con- flict with that of the Ninth Cireuit in Blankenship v. Hearst Corporation, 519 F. 2d 418 (9th Cir. 1975), which treated carriers as bona fide purchasers and resellers. The failure of the Court below to properly discharge its appellate function is perhaps explainable by its hos- tility to the majority opinion of this Court in Albrecht v. Herald Co., 390 U. S. 145 (1968), which held maximum price-fixing (as here) to be as restrictive of competition as minimum price-fixing. For the Court below held that limitations on maximum resale prices are less restrictive of competition than minimum price restraints, citing the dissenting opinion in Albrecht (App. B, imfra, p. 68a). This ruling below is thus in a way in conflict with this Court’s decision in Albrecht, and the conflict may have been the (subconscious) motivating force in the Rule 52(a) violation below. POINT I. This Court should grant review to determine whether the Court below denied plaintiffs an opportunity for a hearing on the question of whether the aggregate of The News’ restraints on trade—price fixing, termina- tion of route dealers, boycott, territorial and customer restrictions, price and other discriminations, and fail- ure to make available copies of The News in varying lo- calities—amounted to an unreasonable restraint of trade. Since the trial Court found per se price fixing viola- tions, and illegality in the customer and territorial re- strictions of the franchise system, it never reached the question of whether The News franchise system con- stituted an unreasonable restraint of trade, as had been argued at length in the post-trial brief filed with the trial Court (pp. 49-77). The Second Circuit, by reversing the findings of per se violations, without any remand for a trial or a finding on the issue of whether there had been any unreasonable restraint of trade, denied plaintiffs an opportunity for a judicial determination of the question, and they were thus deprived of a right to a hearing, and of property, without due process of law in violation of the Fifth Amendment. The attention of the Second Cir- 31 cuit was called to this in the plaintiffs’ petition for re- hearing (pp. 1-2). Had the Court below found that the institution of the franchise system and termination of some plaintiffs was not an unreasonable restraint—or if it so found sub silentio—its decision would be in conflict with of the Ninth Circuit in Noble v. McClatchy Newspapers, F. 2d (9th Cir. 1975), 1975-2 Trade Cases 960,594. Elimination of distributors pursuant to a program may be an un- reasonable restraint of trade when, as here, there was an effort to establish market dominance or extend a natural monopoly of the manufacturer’s own product, or other re- strictive trade practices. Industrial Bldg. Materials, Inc., v. Interchemical Corp., 437 F. 2d 1336, 1343, fn. 8 (9th Cir. 1970). Cf. American Motor Ins, Inc., v. Holiday Inns, Inc., 52 F. 2d 1230 (3rd Cir. 1975). POINT II. Since newspapers are unique rather than fungible. items, and are protected by the First Amendment, price fixing was illegal per se under the McGuire Act because The News was not in free and open competition with commodities of the same general class. The trial Court found, and the Second Circuit affirmed, that The News is in free and open competition with The New York Times and other local newspapers in the suburban area. However, we believe that this Court should review this decision, especially since the decision below is in a way in conflict with Mr. Justice Frankfurter’s con- curring opinion in Associated Press v. United States, 326 U. S. 1, 27-28 (1945), where he ruled that newspapers are not wares like peanuts or potatoes, and that therefore “the incidence of restraints upon the promotion of truth through denial of access to the basis for understanding calls into play considerations very different from com- parable restraints in a cooperative enterprise having merely a commercial aspect. * * * The interest of the public is to have the flow of news not trammelled by the combined self-interest of those who enjoy a unique con- stitution position precisely because of the publie de- pendence on a free press.” Serious questions are raised by the treatment below of different newspapers as interchangeable commodities. To the reader or subscriber, different newspapers are not so fungible :—The Daily News sells for 15¢, The Times for 20¢, The Sunday News for 30¢, The Sunday Times for 60¢—and if these newspapers »re to be treated as pea- nuts or potatoes, then it is plain that The New York Times should have been driven out of business long, long ago. Such great newspapers as The New York News and The New York Times are simply not of the same general class, nor are either of them in the same general class as local newspapers. To lump them all together in one general class is to do violence to the very diversity of newspapers fostered by the First Amendment. The contents of different newspapers ar® unique. Quite apart from the vast differences in editorial policy between The News and The Times, quite apart from The News’ attempting to simplify stories so as to make them more understandable while The Times gives thorough back- ground information, The News emphasizes photographs (958a-959a). The News is a tabloid, unlike The Times and The Wall Street Journal (959a-960a); The News has columnists who do not appear elsewhere in the city press (961a), and is the only morning newspaper (except the 33 local Staten Island Advance) with comic strips (960a- 961a). The Times and The News may no more be considered competing commodities of the same general class than beer and Coca-Cola could be so considered, because both are beverages and a person desiring to quench his thirst must choose which to buy. Cf. Eastman Kodak v. Federal Trade Commission, 158 F. 2d 592 (2nd Cir. 1946), cert. den. 330 U. S. 828 (1947). POINT IV. This Court should grant review to determine a con- flict in decisions of Courts of Appeals, and with this Court, as to standing of plaintiffs to assert illegality of the customer and territorial restrictions of The News’ franchise agreements. The plaintiffs here had the requisite standing because they were injured by the re- strictions. In the last page of its opinion, the Court of Appeals modified the trial court’s judgment by eliminating the injunctive provisions against both the customer and ter- ritorial restriction provisions of The News’ franchise agreements. The Court firstly disposed of the territorial restrictions on the theory that by virtue of the exclusive territory provisions of the agreements, the independent route dealers “are assured of facing competition from no more than one franchise dealer, who is confined to a certain area” (App. B, infra, p. 80a). In so ruling, the Court flew in the face of the record, since, without record support, it assumed a non-existent territorial congruity between a franchise dealer and a route dealer, when in fact, the testimony was that there were several franchise dealers at the same time in most route dealer’s areas 34 (610a). Thus, plaintiff Markowitz had five to seven franchise dealers in his area at the same time (11l4a); plaintiff Rosenblum two-four (350a-35la); plaintiff Fox two or three (327a, 33la); plaintiff Davis three (502a) ; plaintiffs Cartabuke, Perrot, and Amato each had two (575a-576a; 649a; 759a); while plaintiff Hand had several (610a). As to the customer restrictions of the franchise agree- ments, which prohibited resale except to news boys, the Court below, though apparently ruling that plaintiffs had standing to attack this restriction (App. B, infra, p. 81a). nonetheless eliminated the injunetive prohibition against this restriction (App. B, infra, p. 88a) on the theory that, whether this restriction standing alone would be illegal was rendered academic because of the conspiracy be- tween The News and franchise dealers to prevent the in- dependent route dealers from obtaining copies of The News for distribution. However, the question was by no means rendered academic, since the customer restric- tions still persist in the eases of plaintiff ronte dealers who, though their complaints have now been dismissed hecause they were not the vietims of such conspiracy, still find nonetheless that they cannot purchase copies of The News from franchise dealers. They might well be able to purchase such copies at prices more favorable than at which they presently buy, and indeed one franchise dealer, Lepore, had suggested below that he would willingly set up a distribution system under which he would sell copies of The News to route dealers. By striking the provisions of the injunction issued by the District Court which pro- hibited customer restrictions, the Court below, though stating that the point is academic, has actually legiti- mized the customer restrictions, which are of course il- legal under the antitrust laws. 35: But perhaps more importantly, from this Court’s point of view, the test for standing of the Second Circuit below, essentially a restatement of its “target area” test (Calder- one Enterprises Corp. v. United Artists Theatre Circuit, 454 F. 2d 1292, 1295, 1296 (2nd Cir. 1971), cert. den. 406 U. S. 930 (1972), is one which would seem to be in a way in conflict with the decisions of this Court. This Court has historically taken a broad view of standing under the antitrust laws, and has never adopted or endorsed any of the restrictive tests laid down by the lower Courts. See Hawaii v. Standard Oil of California, 405 U. S. 251, 262, n. 14 (1972), where the Court lists several lower court cases with no more than a general comment ac- knowledging their restrictive approach. And in Mande- - -'e Island Farms, Inc., v. American Crystal Sugar Co., 334 U. S. 219, 236 (1948), the Court permitted a suit by growers alleging monopolization by refiners of a local sugar beet market and wrote: “The statute does not confine its protection to consumers, or to purchasers, or to competitors, or to sellers * * * [but protects] all who are made victims of the forbidden practices by whomever they may be perpetuated.” (Emphasis added.) This Court confirmed this position in Radovich v. Na- tional Football League, 352 U. S. 445, 454 (1957), a suit by a professional football player claiming a boycott by teams, and supported its holding by pointing to Con- gressional support for private antitrust enforcement which it found in the prima facie weight accorded by Congress, in Section 5 of the Clayton Act, 15 U. S. C. §16, to final judgments in a Government suit when used by private litigants. The Court concluded: “In the face of such a policy this Court should not add requirements to burden the private litigant beyond what is specifically set forth by Congress in [the antitrust] laws.” Moreover, the “target area” test of the Court below is in conflict with the test of the Ninth Circuit. Thus, in In re Multidistrict Vehicle Air Pollution M. D. L. No. 31, 481 F. 2d 122, 128 (9th Cir. 1973), cert. den. 414 U. S. 1045 (1973), the Ninth Cireuit formulated its test as follows, at 128: “To attain standing, a plaintiff must thus allege that the antitrust violation injured a commercial enterprise of the plaintiff in the area of the economy in which the elimination of competition occurred. Standing is denied, on the other hand, if the claim- ant’s commercial activity occurred outside that area of the economy.” It needs no argument to demonstrate that plaintiffs here are well within the Ninth Cireuit test. The illegality of the customer and territorial restric- tions are clear from the decision of this Court in United States v. Arnold, Schwinn d& Co., 388 U. S. 365, 378 (1967), since under the franchise agreements, the manufacturer parted with dominion over his product, and transferred risk of loss to another (the franchise dealer), and there- fore could not reserve control over its destiny or the conditions of resale (id. at 379) (1294a). The franchise dealers had no right to return any copies of The News, so that title had been parted with; The News transferred risk or loss, for the risk of selling or not was wholly that of the franchise dealer. The News parted with dominion, for it was up to the franchise dealer to select and super- vise the boys to whom he would in turn re-sell. Yet The News did reserve control over the destiny of copies of the papers, since under the franchise agreement they could only be resold to news boy carriers, and by news boy carriers to ultimate consumers, at prices stipulated by The News. Such horizontal arrangements for cus- tomer and territorial restraints are per se violations of the antitrust laws. United States v. Topco Associates, Inc., 405 U. S. 596 (1972). The decision below, permitting the franchise system and its restraints to operate to the disadvantage of in- dependent route dealers, is squarely in conflict with the recent decision of the Ninth Circuit in Noble v. McClatchy Newspapers, supra, page 31, where the Ninth Circuit ruled, 1975-2 Trade Cases at page 67,634: “Because of such advantages to manufacturers, in- dependent distributors continue to survive, and bring to the public the benefits of added competi- tion in the distribution of goods and services. These benefits would be lost if manufacturers could ob- tain the private economic benefits of a system of distribution through independent businessmen, and at the same time restrict the freedom of such inde- pendent businessmen to compete. It was to prevent the wholesale destruction of this opportunity for competition that Schwinn forbade manufacturers to control the disposition of products after sale. “To permit this would sanction franchising and con- finement of distribution as the ordinary instead of the unusua! method which may be permissible in an appropriate and impelling competitive setting, since most merchandise is distributed by means of purchase and sale.’ 388 U.S. at 379.” And the effect of the decision below is to sanction fran- chising and confinement of distribution as the ordinary method; thus, the decision below was still in another way in conflict with this Court’s decision in Schwinn. In any event, the territorial limitations should have fallen under the standard of reasonableness, because of the anti-competitive effects of the franchise system, including 38 the territorial limitations, which we documented, supra, at pages 15-18. When a route dealer went out of busi- ness, not only were copies of The News not delivered in that area for considerable time, but there was a lack of home delivery of all other newspapers—which still con tinues in some areas. Had there been no territorial re- strictions of the franchise dealers, the franchise dealer from one area might have serviced at least other areas with copies of The News, and might have sold copies of The News to terminated route dealers outside his area. Moreover, as the trial Court had noted, the exclusivity of the territory insured that “* * * each dealer would con- centrate on taking business away from The News’ competi- tors rather than from his fellow franchise dealers” (1293a, n. 45). Indeed, franchise dealers had sold copies of The News to terminated route dealers, until this violation of the franchise agreement was stopped by The News (e. g., 540a-544a). The territorial and customer restrictions are clearly illegal; plaintiffs have been injured by them; they should not be allowed to stand. POINT V. This Court should finally determine an important is- sue: whether intent to monopolize is a prerequisite for a conspiracy to monopolize under Section 2 of the Sher- man Act. In any event, the findings of the Courts be- low that such intent was not shown here were clearly erroneous, and should be reversed. The Court below ruled that it was necessary to demon- strate an intent to monopolize the designated segment of commerce here—intrabrand competition in the home de- livery market—before sustaining a Sherman Act Section 2 conspiracy. The Court below thus, for the first time, imported the requirement of intent—previously required only in attempt, not conspiracy, cases—into conspiracy cases, and reversed the trial Court’s finding of such a con- spiracy. We believe that this novel and substantial doc- trine of law— inconsistent with this Court’s dictum in Nash v. United States, 229 U. S. 373, 378 (1913)—should be re- viewed by this Court. See also, App. A, infra, pages 46a- 48a. The trial Count had found that there was no such specific intent to monopolize, but that its absence was ir- relevant ;* the Court of Appeals found the absence of in- tent fatal, and reversed the Section 2 conspiracy finding, while affirming the finding of the absence of intent. Both Courts below thus made clearly erroneous findings, for the evidence of intent to monopolize, much of which was ignored by both Courts in their opinions, was overwhelm- ing. The Court of Appeals apparently attempted to justify The News’ adoption of the franchise system on the theory that it had not been doing well in circulation on Long Island (Nassau and Suffolk Counties) despite initiation of specialized suburban zone sections—but this finding not only was not supported by any evidence, but also contra- dicted the record which showed that the Long Island Edition of The News first appeared when the franchise ‘The trial Court did not clearly find that there was an ab- sence of intent, but only that this was not the primary intent. Said the Court, App. A, infra, at page 46a: ‘*In any event, plaintiffs have failed to prove that The News had the requisite specific intent to monopolize. Not- withstanding the predatory nature of many of its acts, I am convineed that its primary concern was not the elimination of its competitors.’’ (Emphasis supplied.) system became operational on or about January 10, 1966 (255a-256a). Moreover, as we showed above (p. 8), The News did practically nothing to develop home delivery there prior to 1963, first had a home delivery circulation department in 1964, and prior to the adoption of the fran- chise system only engaged in occasional samplings and telephone solicitation, not even paying route dealers as promised. There can be no explanation of The News’ adoption of the franchise program except an intent to monopolize. Absent such intent, why did The News embark upon the program without cost studies? Absent such intent, why did it choose to gain expanded sales through what its later cost studies showed to be the more expensive fran- chise system, instead of giving the less expensive route dealer system a chance? Why, indeed, did it choose to expand sales when such expanded sales would have created net losses of ever-increasing hundreds of thousands of dollars? Why had The News not had a long Island Edition prior to the franchise program, and why had it neglected home delivery? Again, if The News had no predatory motive, why did it refuse permission to route dealers to sell their routes if they were to become franchise dealers? Why did it stop supplying route dealers who were selling copies of The News, and thus making money for The News, especially in areas not yet covered by franchise dealers? Thus, the inescapable conelusion is that The News acted completely “insanely” (to use the words of its parent company’s circulation manager at 994a-995a), or else with predatory motive. The latter is obviously the reason. There could only have been one motive, for . there is no other explanation of why The News felt 41 compelled to lose several million dollars; that by de- stroying or severely injuring the independent route dealer system, a system of home delivery available to present publishers and to any new publisher without any cost whatsoever, The News could not only foreclose the possibility of a new publisher of a morning paper appear- ing, who would have to invest in setting up his own home delivery system, but could restrict home delivery of its “competitiors,” as happened here (supra, pp.15-18). This kind of a motive, predatory though it is, is not novel. Thus, in an article “Antitrust Problems in The Newspaper Industry,” 82 Harvard Law Review 319, 326 (1968), the following appears: “Newspapers naturally prefer to have distribu- tors whose zeal in obtaining subscriptions they ean depend on. On the other hand, in a market with two or more newspapers, having separate distributors for each is highly inefficient. More important for purposes of antitrust law, exclusive distributorships seriously impede new entry, since they require each new paper to build its own system. In addition to requiring additional capital and personnel, the creation of a new distribution system may take more time than a new entrant ean easily afford. Indeed, the most likely explana- tion why newspapers have overlooked the use of multipaper carriers in the past is a desire to block new entry.” But be that as it may, the net effect upon competition has been horrendous. Defendant’s Exhibit F (1405a) shows the number of carriers, including franchise dealers and independents, while Defendant’s Exhibit I (141la) shows merely the number of franchise dealers. In 1965, accord- ing to Defendant’s Exhibit F there were 125 carriers, all of whom, of course, would have been independent route dealers. In 1972, the total number of carriers, accord- 42 ing to Defendant’s Exhibit F, went to 133, of which, ac- cording to Defendant’s Exhibit I, 97 were franchise deal- ers, meaning that there were 36 independent route dealers in Nassau left ont of the 125 route dealers existing in 1965. Of the 34 route dealers in Suffolk County exist- ing in 1965 (Defendant’s Exhibit F) there were only two left in 1972, since Defendant’s Exhibit I shows that there were 50 franchise dealers in Suffolk County in 1972 as against a total of 52 carriers shown in Defend- ant’s Exhibit F for 1972. The intent to monopolize seems clear,’ and it is clear also that price-fixing was a part of that conspiracy as well. This Court should grant review, determine whether intent must be proved, and, if it should rule that intent must be proved, reverse the findings below as clearly erroneous. *The Court below found that The News did extensive sam- pling under the franchise system (App. B, infra, p. 73a). There is no record support for this finding, and it is contra to the record (supra, p. 15). But the decision below is in conflict with Morn- ing Pioneer, Inc., v. Bismarck Tribune Company, 493 F. 2d 383 (8th Cir. 1974), which held an intent to monopolize was suf- ficiently shown by distribution of thousands of free newspapers. Here, in any event, The News did provide hundreds of thousands of sample free papers for the 5,000 news boys to give away, and thus, despite the erroneous finding that The News did the sam- pling, such sampling was enough to establish intent under the Eighth Cireuit rule. 43 POINT VI. This Court should grant review of the denial of plain- tiffs’ Robinson-Patman claims involving price and other discriminations, to determine whether, when the com- ponents of the article in question have passed through interstate commerce, discrimination is permissible sim- ply because the finished article itself (the newspaper) is not the subject of price discrimination in actual in- terstate sales. Both the trial Court and the appellate Court rejected our argument that price and time of delivery discrimina- tion—-prices of The News to its franchise dealers, and the delivery times, both being much more favorable than to the route dealers—were violative of Robinson-Pat- man, because we did not show that the transactions gen- erated discriminations across state lines. The Court be- low relied upon this Court’s decision in Gulf Oi Corp. v. Copp Paving Co., 419 U. S. 186, 200 (1974). As we read that case, however, it leaves open the question of whether there may be price discrimination, even in purely intrastate sales, when the component parts of the mer- chandise being sold had themselves passed through inter- state commerce. Here it was stipulated (Court’s Exhibit 1), that the news which The News received, the news- print and ink used, the articles it featured, ete., were all part of interstate commerce. There need be no extended diseussion here, since certainly this Court knows its mind better than the undersigned could ever divine it. We do pause to note, however, that only subsection (a) of 15 U. S. C. 13 contains the requirement that the pur- chases be “in commerce,” while the price discrimination— partly in the form of lower prices to the franchise, partly in the form of subsidization to them—and discrimina- 4 tion in time of delivery would seem to be prohibited under subsections (d), (e) and (f), which do not contain any requirement that the purchase be “in commerce.” We also note that the franchise system was expanded in 1967 to other counties in New York City, and in New Jersey (968a-969a). CONCLUSION. This Court should grant review of the decision below. Respectfully submitted, HERBERT MONTE LEVY, Attorney for Petitioners. ee _ 45 LET iS FEET BG THE WALKING FOR YOU. Whose feet are they? They belong to the youn man who delivered your fee copy of The News this morning. These fast-moving feet can save you ncedless steps—and precious tire—ev_ry morning by trotting The News up to your front door in time for breakfast. Weekly home delivery rates are low ... only 90c for service seven dys a week, 60c fur delivery Monday through Saturday, and 30c for the Sunday News.* Your own steps and time ere worth much more then that. Later this week your newspaper boy will step up and ask you for your order... don't be surprised if he does a little dance when you say “yes.” Or you cen place your order far early morning home delivery now, by calling one of the numbers listed below. New Jersey: 798-9407 Suffolk: $43.41 4! The Bronx & $teten Island: 458-9556 Ve THE NEWS Nessau: 433-1220 Brooklyn & Queens: 458-0320 Mev TONEY UAE WEBER * There it © wall service cherge in motor rote areas of Lang lila i New York N ; 1 Best S D ~. APPENDIX. la APPENDIX A. 1256a Opinion UNITED STATES DISTRICT COURT SoutHern District or New York 67 Civ. 1030 Cuartes W. Bowen, Jr., et al., Plaintiffs, v. Tue News, et al., Defendants. APPEARANCESB: Hersert Monte Levy, Esq., Attorney for Plaintiffs Nicuo.as L. Coc, Esq., Attorney for Defendants Michael Lepore and Victore Lepore Town ey, Upprxe, Carter & Ropcrers, Esqs., Attorneys for other Defendants (Andrew L. Hughes, Esq., Ronald S. Daniels, Esq., John M. Callagy, Esq., of counsel) Bauman, D.J. This is an action by thirty independent home delivery dealers’ of The Daily News and the Sunday News against New York News, Inc (“The News”), the publisher of those newspapers, and various of its employees and franchise dealers for treble damages and injunctive relief under Sections 4 and 16 of the Clayton Act, 15 U.S.C. §4 15, 26. 1 Plaintiff Robert C. Harding withdrew from this action on May 22, 1972 (Tr. 1916-17). 2a 1257a Ovini The request for relief is based upon alleged violations of Sections 1 and 2 of the Sherman Act, 15 U.S.C. §$1, 2; Section 3 of the Clayton Act, 15 U.S.C. § 14; and Sections 2(a), 2(c), 2(d), 2(e) and 2(f) of the Clayton Act, as amended by the Robinson-Patman Act, 15 U.S.C. §§ 13(a), (c), (d), (e) and (f). At issue is the effort of The News to change its home delivery system from one employing independent route dealers to one utilizing carrier boys operating in conjunction with “franchised dealers.” ? I, In order to understand the exact nature of the alleged antitrust violations set forth in the complaint, it is neces- sary to describe in some detail the parties to this action and their relationships with each other. The News is a New York corporation engaged in the business of publishing and distributing the “Daily News” and “Sunday News”, newspapers published in New York City and generally distributed in the New York metro- politan area and, to a lesser extent, in the United States * The changeover was part of an effort by The News to obtain greater control over the resale price and method of distribution of its paper. The route dealers purchased newspapers from The News (at wholesale prices) and delivered them to their customers by use of automobile. However, since the routedealers also distributed com- peting newspapers, The News was not in a position to dictate the home delivered price of its newspaper. For reasons which will appear later in the opinion, The News felt that this limitation seriously impaired its ability to compete in the home delivery market. It decided therefore to institute its own home delivery system and structured it around independent contractors which it designated “franchise dealers”. These fran- chise dealers agreed to deal only in The News and to purchase quantities of The News in bulk for resale to carrier boys at prices fixed by The News. The carrier boys, in turn, resold to the public “at no more than the regulerly assigned home delivered price.” 3a 1258a Opinion and foreign countries. At the time of this lawsuit, its circulation was approximately 2,000,000 papers daily and 3,000,000 on Sunday, the largest of any newspaper in the United States. The News concedes, as well it might, that it is engaged in interstate commerce within the meaning of the Sherman and Clayton Acts. It is undisputed that it carries local, state, national and international news, including sports, nationally known columnists, comics and other syndicated features. Its enormous advertising content includes the messages of industrial giants from every corner of the United States. The remaining defendants are either present or former News employees or present or former franchise dealers.’ The plaintiffs are, or were, independent route dealers dealing in a number of newspapers, periodicals and 2 Aside from The News itself, the first eight named individual defendants in the amended caption (Ct. Ex. 2) are present or former News employees. Jack Underwood was Circulation Manager of The News from October, 1964 to June, 1970, and is presently Director of Circula- tion. Robert O'Sullivan was Home Delivery Area Supervisor for The News from March, 1968 to July, 1969, and is presently the Manager of The News’ Brooklyn plant. Anthony Catanzaro was Assistant Suburban Area Sales Manager from February, 1966 to November, 1966, and is presently Assistant Circulation Sales Manager for Home Delivery. David Auerbach has been a Cireulation Sales Representative since October, 1962. Donald A. Nizen was Suburban Area Sales Manager from May, 1964 to May. 1967, and is no longer employed by The News. Gabriel Lewander was Circulation Sales Manager from January, 1970 to December. 1970, and is no longer employed by The News. F. M. Flynn was President of The News from May, 1947 to May, 1970, and is currently Chairman of the Board of the Corporation and Publisher of The News. W. H. James was Executive Vice President of The News from April, 1965 to May, 1970, and is currently its President. The remaining defendants are or have been franchise dealers. 4a 1259a Opinion special interest publications. In general, they purchase these items from wholesalers and resell them to home delivery subscribers in defined territories.‘ Because each confines his activities to his own territory, the routes have become more or less valuable and salable. Prior to 1965, The News was home delivered exclusively by such route dealers. However, owing to circumstances to be related, The News became dissatisfied with its growth of home delivery circulation and decided to test a new distri- bution system in certain areas of the suburban metro- politan area, principally in Nassau and Suffolk Counties, using carrier boys who would buy their papers from franchised dealers. At the same time, it continued to deal with many of the route dealers in the time honored way. For this reason, the plaintiffs in this action fall into four separate categories. (1) Route dealers to whom The News terminated sales . on or after Jnuary 10, 1966;° (2) Route dealers who continue to receive copies of The News and who operate in areas in which the franchise system has not been instituted ;* * This exclusivity had its genesis in horizontal arrangements of doubtful legality prepared in the “Danby office.” This office, which represented all the major newspapers published in New York City, was authorized to award exclusive territories for the home delivery of all member newspapers; and most of the plaintiffs purchased their routes with its written approval. Since the demise of the “Danby office”, the route dealers have continued to respect these boundaries. * Plaintiffs Bowen, Cartabuke, Ditta & Failla, Davis, Goldberg, Gullo, Markowitz, Mirro, Poserow, Rosenblum, Schulz, Sweeney, Kahrs, Floral Park News Delivery Inc. (Gold), Amato, and Perrot. * Plaintiffs Freilich, Marston, Rosenblatt, Theall, Salant, Silver- stein, Cestaro, and Ellis. Plaintiffs Ellis, Marston, and Silverstein 5a 1260a Opinion (3) Route dealers who continue to receive copies of The News and who operate in areas in which the franchise system has been instituted ;’ (4) One route dealer who acquired his route from a terminated route dealer and who never sought to purchase from The News.° The application of the legal theories advanced by the plaintiffs vary with respect to each of these categories and this difference will be noted as each of the theories is discussed. Il. In the early 1960’s, The News’ circulation in New York City began to decline largely because of the fall off in sales of its evening edition which eventuated from the increasing popularity of television and the decreasing number of retail outlets remaining open in the evening. At the same time, the suburban explosion was creating a burgeoning market for newspaper sales which coincided with a similar shift of commercial enterprises from the city to the suburbs and their evolution as prime advertis- ing markets. Since the bulk of The News’ revenues comes from advertising, its appetite for its share was, quite naturally, whetted. To this end, it attempted to compete with regional and local newspapers for circulation and advertising by publish- have sold their routes, but received copies of The News during the entire time they operated them. 7 Plaintiffs Huntington News Delivery, Inc. (Hand), Shank, Foz, Greenberg, and Holman. Plaintiff Fox has sold his route, but received copies of The News during the entire time he oper- ated it. * Plaintiff Rathsam. 6a 1261a Opinion ing a number of suburban or zone sections, each of which was and is distributed as part of The News in a specific geographic area. These suburban sectjons, which carry area news, also carry local advertising at lower rates than are charged for the full run of the paper. However, under the route dealer system, The News’ campaign was something less than successful. While the population of Nassau and Suffolk Counties rose by approx- imately 350,000 between 1960 and 1966 (Defendants’ Ex- hibit T), The News’ home delivered circulation in that area increased by only 2,383 copies (Defendants’ Exhibit F), At the same time, Newsday’s home delivered circulation in- creased dramatically as did that of the Long Island Press. The News decided that its failure resulted from the disinterest of route dealers and hired Jack Underwood to develop a new distribution system. In 1965 he instituted a pilot franchise dealer program in. an area of Nassau County not then being serviced by a route dealer. This was so successful that it became the model for The News’ new distribution system which was then expanded into certain parts of New York City and almost throughout Long Island. The franchise dealers who participated in the program were signed to contracts, the relevant provisions of which are: (1) that The News agrees to assign an exclusive terri- tory to the dealer; (2) that the dealer agrees to purchase all newspapers required by home delivery customers at prices fixed by The News and supervise the delivery of them “at no more than the regularly assigned home delivery price”; (3) that the dealer agrees not to sell or distribute copies of any other newspaper, or any advertising material not authorized by The News; 7a 1262a Opinion (4) that the dealer agrees not to charge any carrier boy engaged in making deliveries and collections more than the price established therefor by The News; (5) that the dealer does not have the right to return unsold copies of The News; (6) that The News may terminate the agreement with- out advance notice if the dealer breaches any of its pro- visions; but that the dealer must give sixty days’ notice in writing; and (7) that the dealer “is and shall remain an independent contractor and not an employee or agent of The News.” In late 1965 and early 1966, a number of the plaintiffs were contacted by letter or telephone and offered the oppor- tunity to become franchise dealers.’ Those who responded *E.g. Bowen, Jaycox, Ditta & Failla, Gold, Fox, Goldberg, Gullo, Kahrs, Markowitz, Perrot, Rosenblum, Sweeney, Poserow, Schulz. The letter read: “The News plans to expand its Franchise Home Delivery opera- tion in certain areas of New York City and Long Island. It has been proven that this type of Home Delivery is productive and beneficial to the publisher and that it insures a steady, healthy growth in circulation. In order to accomplish this task, The News is seeking the ser- vices of qualified men to supervise the boy delivered franchise districts. If you are interested in joining the team as a full time exclusive News Franchise Manager, please telephone Mr. D.A. Nizen MU 2-1234 ex. 8046 of the News Suburban Circulation Sales Department. An appointment for an interview will be arranged at the earliest possible convenience. Please respond promptly since our selections of Franchise Managers will be made within the next few weeks. Sincerely, Gabriel Lewander” (Plaintiffs’ Exhibits 23 [letter to Schulz]; 30 [letter to Fox]; 37 [letter to Goldberg]; 47 [letter to Poserow]; 75 [letter to Shank} ). 8a 1263a Opinion were told that if they did not agree to adhere to all of the provisions of the franchise agreement their supplies of The News would be cut off. None of them was willing to bow to its restrictive terms and, within time, each was notified by letter or otherwise that The News would no longer deal with him.”® In all, sixteen plaintiffs were cut off.” © The letters read: “The News has decided to institute an independent franchise home delivery system in the area in which you now serve. The franchised home delivery carrier will handle the Daily and Sunday News on an exclusive basis. Therefore, we must advise you that effective on sales to you of the Daily and Sunday News will be discontinued Davis to Amato] ). * The following plaintiffs were cut off on the dates set forth below : Plaintiff Ditta & Failla Markowitz Perrot Sweeney Schulz Bowen Kahrs Mirro Goldberg Poserow Davis Gullo Rosenblum Cartabuke Gold Amato 56 [letter to Ditta Very truly yours, News Synopicate Co., Ino. By Gabriel Lewander” (Plaintiffs’ Exhibits 6 [letter to Markowitz] ; 25 [1 27 [letter to Kahrs} ; 35 [letter to Rosenblum] ; berg] ; 40 [letter to Ditte} ; 48 [letter to Poserow] ; 54 [letter to - ; ; 59 [letter to Cartabuke]; 60 [1 to Geld). 63 [letter to Mirro]; 65 [letter to —_ were Date of Termination January 10, 1966 January 10, 1966 January 10, 1966 January 10, 1966 February 14, 1966 February 28, 1966 May 9, 1966 May 9, 1966 June 13, 1966 July 4, 1966 July 24, 1966 July 24, 1966 October 31, 1966 December 5, 1966 May 12, 1968 July 26, 1971 Date of Notice December 25, 1965 December 27, 1965 December 25, 1965 None January 31, 1966 February 16, 1966 April 22, 1966 April 22, 1966 June 1, 1966 June 20, 1966 July 11, 1966 None October 17, 1966 November 25, 1966 April 26, 1968 July 7, 1971 etter to Schulz] ; [letter to Gold- ; 74 [letter 9a 1264a Opinion In the meantime, The News continued to recruit fran- chise dealers who were subsidized to help them through the early organizational phase of their operation and were charged less for The News than the route dealers who had not been terminated. The climinated route dealers attempted to buy copies of the paper from local newsdealers, but, with rare exception, found no one in Nassau or Suffolk willing to cooperate with them. As a result, they were forced to travel great distances and pay close to cover price to obtain its early editions. However, when franchise dealers complained that they were still facing competition from the “cut off” route dealers, defendants O’Sullivan and Cantanzaro directed them to ascertain the sources of the route dealers’ supplies and promised that they would be eliminated. This pre- cipitated a relentless campaign by the franchise dealers to learn the route dealers’ sources of supply in which News employees enlisted and, as a result of which, the route dealers were under constant surveillance by franchise deal- ers, employees of The News and off-duty policemen re- eruited for this purpose. In some instances, the policing activities of the defendants turned into sheer harassment. Thus, when plaintiff Markowitz was observed removing papers from a drug store, The News had him arrested de- spite the fact that he claimed he had a written contract with the owner, one Max Seltzer, which authorized him to do so. When Seltzer was asked by defendant Auerbach to prosecute Markowitz, he confirmed Markowitz’ story. He was told that if he did not agree to press charges The News would no longer supply him with papers. Seltzer refused and was cut off the next day. 10a 1265a Opinion III. Plaintiffs contend that (1) The News’ franchise agree- ment is an illegal price fixing agreement and that sales to them were discontinued in furtherance thereof; (2) the defendants have combined, in violation of Section 1 of the Sherman Act, to exclude them from access to copies of The News; (3) the franchise agreement contains illegal territorial and customer restrictions; (4) The News has attempted to monopolize the newspaper home delivery market; (5) the defendants have conspired to monopolize a part of the newspaper home delivery market; (6) the exclusive dealing provision of the franchise agreement violates Section 3 of the Clayton Act; and (7) The News violated the Robinson-Patman Act by discriminating in prices hetween ditferent purchasers of The News. IV. THe News’ Reta Price Marntexance AGREEMENTS ARE Nor Exemprep From tue Antitrust Laws By THE Fam Trape Acts. The News relies heavily in its defense on 92 of the McGuire Act, 15 U.S.C. §45(a)(2)"? and the New York Feld-Crawford Act, N.Y. Gen. Bus. L. § 369-a et seq." It contends that these provisions permit it to fix the maximum resale price of its papers without violating the antitrust laws. Plaintiffs, on the other hand, vigorously oppose this reading of these two statutes and have advanced four rea- sons for the proposition that they do not exempt the de- fendants’ conduct from §1 of the Sherman Act. In order properly to evaluate these competing positions, some preliminary, perhaps elementary, observations are necessary. The Sherman Act, as originally drawn, forbade 18 See footnote 16 infra. ** See footnote 29 infra. lla 1266a Opinion resale price muintenance contracts whether horizontal or vertical, see e.g., United States v. Bausch & Lomb Co., 321 U.S. 707 (1943); United States v. Trenton Potteries Co., 273 U.S. 392 (1927); United States v. Socony-Vacuum Co., 310 U.S. 150 (1940); Kiefer-Stewart Co. v. Joseph E. Seagram & Sons, Inc., 340 U.S. 211 (1951); Dr. Miles Medical Co. v. John D. Park & Sons Co., 220 U.S. 373 (1911). The Miller-Tydings Act,’* passed in 1937, amended the Sherman Act to permit such contracts where they were legal under state law, provided that they were not contracts “ — . between manufacturers, or between wholesalers, or .. . between persons, firms or corporations in competition with each other.” In 1951 the Supreme Court held that it did not apply to price-fixing agreements made binding by state law on “non-signers” of such agreements. Schweg- 14 The Miller-Tydings resale price maintenance act, 50 Stat. 693 (1937), 15 U.S.C. § 1, was enacted as an amendment to Section 1 of the Sherman Act and Section 5 of the Federal Trade Commis- sion Act. Taking the form of a proviso in Section 1 of the Sherman Act it states: “Provided, that nothing herein contained shall render illegal, contracts or agreements prescribing minimum prices for the resale of a commodity which bears . . . the trade mark, brand, or name of the producer or distributor of such commodity and which is in free and open competition with commodities of the same general class produced or distributed by others, when contracts of agree- ments of that description are lawful as applied to intrastate trans- actions, under any statute, law or public policy now or hereafter in effect in any State, Territory or the District of Columbia in which such resale is to be made, or to which the commodity is to be transported for such resale, and the making of such contracts or agreements shall not be an unfair method of competition under section 35, as amended and supplemented, of the Act entitled “An Act to create a Federal Trade Commission, .. . Provided further, that the preeeding proviso shall not make lawful any contract or agreement, providing for the establishment or maintenance of minimum resale prices on any commodity herein involved, between manufacturers, or between producers, or between wholesalers. or between brokers or between factors, or between retailers or between persons, firms or corporations in competition with each other... .” mann Bros. v. Calvert Distillers Corp., 351 U.S. 384 (1951)."* Responding to that decision, Congress passed the Mc- Guire Act Amendment to Section 5(a) of the Federal Trade Commission Act.’* The McGuire Act not only reaffirmed * Prior to Schwegmann many statutes permitted a trademark owner to require retailers who had notice of such agreements to observe resale price maintenance. In that case, the Court examined the Miller-Tydings Act and concluded that Congress had intended the words “contracts or agreements” to be used “in their normal and customary meaning”, and to cover only agreements whereby the retailer voluntarily agreed to be bound by the resale price restrictions. It held that state resale price laws could not be ap- plied to non-signers—“recalcitrants .. . d d in by the heels and compelled to submit to price fixing.” 341 U.S. at 390. °66 Stat. 631, 15 U.S.C. §45 (1952). The Act provides in relevant part: “Be it enacted by the Senate and House of Representati f the United States of America in Congress pole we That it ‘s the purpose of this Act to protect the rights of States under the United States Constitution to regulate their internal affairs and more particularly to enact statutes and laws, and to adopt policies, - which authorize contracts and agreements prescribing mini or stipulated prices for the resale of aueudiies and to extend the minimum or stipulated prices prescribed by such contracts and agreements to persons who are not parties thereto. It is the further purpose of this Act to permit such statutes, laws, and public policies to apply to commodities, contracts, agreements, and ac- tivities in or affecting interstate or foreign commerce. ‘See. 2. Section 5(a) of the Federal Trade Commissi amended, is hereby amended to read as 6 Al mmission Act, as ‘See. 5(a)(1) Unfair methods of competition in commerce, and unfair or deceptive acts or practices in clared unlawful. , commerce, are hereby de- ‘(2) Nothing contained in this Act or in any of the Anti Acts shall render unlawful any contracts or egseemante Romine minimum or stipulated prices, or requiring a vendee to enter into contracts or agreements prescribing minimum or stipulated prices for the resale of a commodity which bears, or the label or con- tainer of which bears, the trade-mark, brand, or name of the pro- ducer or distributor of such commodity and which is in free and open competition with commodities of the same general class produced or distributed by others, when contracts or agreements 13a 1268a Opinion the policy of the Miller-Tydings Amendment," but also eliminated the restrictive effect of the Supreme Court’s of that description are lawful as applied to intrastate transactions under any statute, law or public policy now or hereafter in effect in any State, Territory, or the District of Columbia in which such resale is to be made, or to which the commodity is to be transported for such resale. ‘(3) Nothing contained in this Act or in any of the Antitrust Acts shall render unlawful the exercise or the enforcement of any right or right of action created by statute, law, or public policy now or hereafter in effect in any State, Territory, or the District of Columbia, which in substance provides that willfully and know- ingly advertising, offering for sale, or selling any commodity at less than the price or prices prescribed in such contracts or agree- ments, whether the person so advertising, offering for sale, or sell- ing is or is not a party to such a contract or agreement, is unfair competition and is actionable at the suit of any person damaged thereby. ‘(4) Neither the making of contracts or agreements prescribed in paragraph (2) of this subsection, nor the exercise or enforce- ment of any right or right of action as described in paragraph (3) of this subsection shall constitute an unlawful burden or restraint upon, or interference with, commerce. ‘(5) Nothing contained in paragraph (2) of this subsection shall make lawful contracts or agreements providing for the estab- lishment or maintenance of minimum or stipulated resale prices on any commodity referred to in paragraph (2) of this subsection, hetween manufacturers, or between producers, or between whole- salers, or between brokers, or between factors, or between retailers, or between persons, firms, or corporations in competition with each Gc. The McGuire Act did not repeal the Miller-Tydings Amendment to the Sherman Act and there .are, therefore, two federal laws presently exempting state fair-trade acts from the prohibitions of the federal antitrusts. It is apparent, however, that the McGuire Act was intended to supersede the Miller-Tydings Amendment, See Callman, Unfair Competition, Trademarks and Monopolies, § 22.2. 17In order to safeguard interbrand competition, the Act pro- hibits horizontal price-fixing agreements and denies fair-trade con- tracts its protection unless the fair-traded product is “in free and open competition with commodities of the same general class.” Thus, the Act contemplates the elimination of intraband price competition and relies for protection of the public interest upon interbrand price competition. l4a 1269a Opinion decision in Schwegmann by permitting states to enact laws for the enforcement of fair trade contracts against non- signers.'* However, like the Miller-Tydings Amendment, it legalizes only vertical price maintenance contracts which are lawful in the state where the resale is made. Conse- quently, any analysis of The News’ resale price mainte- nance system must begin with an examination of the New York Fair Trade Law. The Feld-Crawford Act, as the New York Fair Trade Law” is commonly referred to, was modeled after the California Fair Trade Act of 1933.%° Section 369-a permits vertical price fiting by authorizing the producer or owner of any brand-name commodity “which is in fair and open competition with commodities of the same general class” to fix by contract, a stipulated resale price and to require any dealer who may resell it to agree not to do so at other than the stipulated price. Section 369-b characterizes devi- ation from the agreement as unfair competition actionable by any person damaged, whether or not the violator is a party to the contract. Section 369-c completes the statutory “* The Report of the House Committee on I which accompanied the McGuire Act declared a Commerce “The primary purpose of the bill is to reaffi plication and enforcement of State fair-trade E. -, 04S the non-signer provisions of such laws— .. . shall not cunaitelie a violation of the Federal Trade Commission Act or the Sherman Antitrust Act. This reaffirmation is made necessary because of the deciai a ; bord wang hed a ee Court in Schwegmann v. Calvert ** N.Y. Gen. Bus. L. § 369-a et seq. ‘ *° See Bristol-Myers Co. v. Picker, 302 N.Y. 6 constitutionality of the California Act, (Cal. hone ton oe oe Deering s Gen. Laws of Cal., 1931, Act 8782, as amended, Cal. Laws , Ch. 269, Deering’s Gen. Laws Supp. 1933, Act 8782), was upheld in The Pep Boys, M : Inc., 299 U.S. 198 (1936). anny, Moe & Jack v. Pyroil Sales Co., 15a 1270a Opinion scheme by excluding horizontal resale price maintenance agreements from the operation of the statute. The News’ franchise agreement provides, among other things that the franchise dealer shall purchase from The News on each day of publication a sufficient number of copies of the newspaper to supply “all single copy home delivery subscribers within his territory” and shall super- vise the delivery and resale of the newspapers to such regular subscribers at “no more than” the regular home delivery price established by The News. Plaintiffs claim this provision is not within the protec- tion of the Feld-Crawford and McGuire Acts and violates Section 1 of the Sherman Act. They allege that: (1) The News is not in fair and open competition with commodities of the same general class; (2) The News is controlling not merely the resale prices, but also the home delivery service charge ; (3) The Feld-Crawford and McGuire Acts only permit minimum resale prices to be fixed, not maximum resale prices; and (4) The franchise agreement is an illegal horizontal agreement between wholesalers. Plaintiffs’ contention that The News is not in “free and open competition with commodities of the same general class” can be disposed of briefly. The existence of “free and open competition” is a con- dition precedent to the legality of any resale price mainte- ‘nance system.” See 1 Callman, Unfair Competition Trade- 21 The quoted language is used in both the McGuire Act and the Miller-Tydings Act. The same requirement appears with a minor variation in the Feld-Crawford Act which permits resale price maintenance contracts relating to commodities in “fair and open competition.” marks and Monopolies § 23.3(a) (3rd Ed. 1971). This re- quirement is designed to assure that fair trade is limited to products which face sufficient interbrand competition to prevent them from eliminating horizontal price competi- tion.2? See Eastman Kodak Co. v. F.T.C., 158 F.2d 592, 594 (2d Cir. 1946), cert. denied, 330 U.S. 828 (1947); Her- man, Free and Open Competition, 9 Stan. L. Rev. 323 (1957) ; Note, 105 U. Pa. L. Rev. 415, 417 (1957). Though the case law in this area is sparse, the decisions on point establish that a product is in “free and open com- petition” when there are other products which are pur- chased by consumers for the same purpose.”* See Columbia Records vy. Goody, 278 App. Div. 401, 105 N.Y.S.2d 659 (1st Dept. 1951); General Electric Co. v. S. Klein-on-the- Square, 121 N.Y.S.2d 37, 49-50 (1953). See also Glen Roven Knitting Mills v. Sanson Hosiery Mills, 189 F.2d 845, 854 (4th Cir. 1951); Fulda, Resale Price Maintenance, 21 U. Chi. L. Rev. 175, 198 (1954). 22 Though fair trade acts expressly sanction the elimination of intraband price competition, they seek to preserve interbrand com- petition by prohibiting horizontal price &xing and denying pro- tection to products which are not in free and open competition with conimodities of the same general class. ; In this connection, the legislative history of the Miller-Tydings Act is instructive. It clearly indicates that Congress sought to validate resale price maintenance agreements only with respect to commodities which are in effective competition with similar com- modities. 81 Cong. Rec. 7495 (1937) (remarks of Senator Tydings). 23 Fastman Kodak v. F.T.C., 158 F.2d 592 (2d Cir. 1946), cert. denied, 330 U.S. 828 (1947), cited by plaintiffs, does not hold to the contrary. In that case, the Second Circuit affirmed an F.T.C. order which was based on the Commission’s finding that color film is not in the same general class as black and white film. This deci- sion is of little precedential value because the Commission’s find- ings are conclusive if they are supported by any evidence. See F.T.C. v. Education Society, 302 U.S. 112, 117 (1937). 17a 1272a Opinion Applying this test to the case at bar it becomes clear that The News is in free and open competition with the New York Times and a number of local newspapers in the suburban areas. Indeed, to meet this competition The News has been forced to embark on an aggressive home delivery system and to publish a number of suburban or zone sections.”* Plaintiffs’ second contention is that The News is “not merely controlling resale prices, but .. . is actually con- trolling the home delivery service charge.” This, they main- tain, is not permitted by the Feld-Crawford Act. The only authority cited is u brief passage from Bristol-Myers Co. v. Picker, 302 N.Y. 61 (1950).* The Bristol-Myers case involved a drug store and other retail establishments which, as members of the “Lynbrook Dividend Club”, issued “cash register receipts” to their customers with all sales. These receipts were redeemable in merchandise for 242% of the sale at any store in the club. Bristol-Myers contended that this amounted to an ** These suburban sections are distributed as part of The News in specific geographic areas and carry local news and advertising. Currently The News produces special sections for the following areas: Manhattan, Bronx-Westchester, Passaic-Bergen, Newark, New Jersey, Brooklyn, Queens and Long Island, and Nassau- Suffolk. 28 The passage reads: “Considered as a method of advertising, the challenged scheme must be differentiated from types of service such as free parking, self-service, care of infants, entertainment, free delivery and the like, which we are not presently concerned. These other types of services have no direct relation to the article purchased or the price paid. They are completely separated and too remote from the pricing element to come within the statute’s prohibition.” 302 N.Y. at 68. Plaintiffs made no attempt to develop any argument in support of their position and rely exclusively on this passage. 18a 1273a Opinion illegal reduction of its fair trade price and sued for an injunction.’* The New York Court of Appeals held that this practice constituted price cutting within the meaning of the Feld- Crawford Act and that Bristol-Myers was entitled to the relief requested, noting that: “The challenged scheme must be differentiated from types of service such as free parking, self-service, care of infants, entertainment, free delivery and the like .. . These other types of service ... are too re- mote from the pricing element to come within the statute’s prohibition.” 302 N.Y. at 68. Thus, rather than support plaintiffs’ position, Bristol- Myers would seem to indicate that nothing in the Feld- Crawford Act prevents The News from fixing the home delivery price of its paper.” Plaintiffs’ third contention is that the Feld-Crawford Act does not authorize the fixing of maximum resale | prices. Here, they argue that the New York decisions dis- cussing the purposes for which the statute was enacted*® ** Bristol-Myers had fixed minimum retail prices for i pursuant to the New York Fair Trade ae and Le ae provided against sales below the established prices “by any means, device, combination sale, trading stamp, free goods, discount, rebate or other allowance .. .” See Note, 63 Harv. L. Rev. 366, 367 (1949). id It is significant that The News’ franchise agreement makes no mention of service charges. Instead, it provides that the franchise dealer supervise the delivery and resale of the newspapers to sub- seribers at “no more than” the regula j i established by The News. a ao ** Plaintiffs rely principally upon General Electric v. Masi 307 N.Y. 229 ( 1954) ; Bristol-Myers Co. v. Picker, 302 NY. 61 (1950) ; and Bourjois Sales Corp. v. Dorfman, 273 N.Y. 167 ( 19387). and the statute read as a whole’ require the conclusion that the sole legislative purpose was to permit the setting of minimum resale prices. Although there is a dearth of decisional law in this area, and no square holding on point, what few cases there are lend support to the view that the terms “minimum” and “stipulated” are not synonymous, and that both the Mc- Guire Act and the Feld-Crawford Act authorize the setting of either a minimum or a stipulated (absolute) price. See Schwegmann Brés. v. Calvert Corp., 341 US. 384, 388 (1951); Graham v. Triangle Publications, Inc., 233 F.Supp. 825, 830-831 (E.D. Pa. 1964), aff'd per curiam 344 F.2d 775 (3rd Cir. 1965); Mead, Johnson & Co. v. West 29 Section 369-a(1) of the Feld-Crawford Act permits the pro- ducer of a commodity which bears its trademark, brand or name, and which is in “fair and open competition with commodities of the same general class produced by others” to “stipulate” the price at which its buyer may resell and also to provide that the buyer will not, in turn, resell except at the price stipulated. Section 369-b provides that willfully and knowingly advertising, offering for sale or selling a commodity at less than the price stipulated by any contract pursuant to § 369-a is unfair competi- tion and actionable by any person damaged thereby. In support of their argument, plaintiffs stress the fact that § 369-b creates a cause of action only against those who knowingly and willfully sell “at less than the price stipulated in any con- tract” pursuant to § 369-a. However, the fact that § 369-b is silent with respect to enforcement against parties who sell above the stipulated price is not dispositive of this issue. In the ordi [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385003_1671%3A1. Public record. Not legal advice.