# Petition — Donovan Construction Co. v. Corp. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385005_0573%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1978 - **Citation:** 435 U.S. 1007 ## Text é Supreme Court, U. § > | #ILeD MAR 10 1978S In THE L_MICHAEL RODAK, JR., CLERK Supreme Court of the Anited States October Term, 1977 No. #771252 DONOVAN CONSTRUCTION COMPANY OF MINNESOTA, Petitioner, Vs. FLORIDA TELEPHONE CORPORATION, Respondent. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT MAUN, HAZEL, GREEN, HAYES, SIMON and ARETZ Jerome B. Simon James A. Gallagher 332 Hamm Building Saint Paul, Minnesota 55102 (612) 221-1812 Attorneys for Petitioner Donovan Construction Company of Minnesota 224-7631 — Review Publishing Co., 257 E. 6th St.. St. Paul, Minn. 55101 — 224-7631 TABLE OF CONTENTS PAGE I. Citations to Opinions Below ................6.:- 2 a a a eae een eeeeabiiae 2 Io a a a 2 gs eS a ee oe ehaaedewaade 3 Nae ieeeneas aus 4 VI. Reasons for Granting the Writ .................. 10 I> | Se a 10 B. The Circuit Courts Apply Conflicting Criteria For Determining Standing Under Section 4... 12 C. Present Confusion On The Standing Issue Frus- trates The National Policy Of Effective Anti- Cees EA THOS nccccccccccccecoescs 22 D. Issuance Of The Writ of Certiorari In This Case Would Complement Other Efforts To Pro- mote Competition In The Terminal Telephone a. cg deccsasaehone enemas 25 eh, oe a cu ubs de keke cabusenasaen 28 Appendix A Opinion of Court of Appeals dated ee eed ee eee eee ee ae ue A-1 Appendix B Opinion of District Court dated i ae ea ad load aS A-20 Appendix C Judgment of Court of Appeals dated ee ee eh eae eae eae Cee A-23 Appendix D Order of Court of Appeals denying Petition for Rehearing dated January 27, 1978 ...... A-24 TABLE OF AUTHORITIES PAGE Cases: Ash v. International Business Machines, Inc., 353 F.2d 491 (8rd Cir. 1965), cert. denied, ee ED on dc 6 co ca Whbubentubdcukodces 16 Association of Data Processing Service Organization, Inc. v. Camp, 397 U.S. 150 (1970) ........... 19, 20, 25 Battle v. Liberty National Life Insurance Co., 493 F.2d 39 at 49 (5th Cir. 1974), cert. denied, et et EE EE Sc vcccceawbewnehsesieisess 13 Bogosian v. Gulf Oil Corp., 561 F.2d 434 ED Cn eee eke) Cee Se eas dle we 18 Bravman v. Bassett Furniture Industries, GES F.2d OO (Grd Cir. 1977) 2... cc ccccccccces 18, 20, 21 Buckley Towers Condominium, Inc. v. Buchwald, 533 F.2d 934 (5th Cir. 1976), cert denied, FO ree ee eer re ree 12 Burleigh House Condominium, Inc. v. Buchwald, 546 F.2d 57 (5th Cir.), cert. denied, 97 S.Ct. SD > 7 2 A-16 ened competition” is a violation of the “attempt to monopolize” clause of §2 of the Sherman Act. Lorain Journal v. United States, 342 U.S. 143, 154; Eastman Kodak Co. v. Southern Photo Materials Co., 273 U.S. 359, 375. Otter Tail, supra at 377. (Emphasis added.) Clearly Otter Tail’s use of monopoly power had an anticompetitive effect on the relevant market it monopolized. The second case, Lorain Journal Co. v. United States, 342 U.S. 148 (1951), is different in two respects. Here it was de- termined that 1) the defendant refused to deal with third par- ties and 2) such conduct did not preclude but seriously under- mined competition. A newspaper publisher owning the only daily newspaper in Lorain, Ohio had a monopoly on merchant advertising in that city. Quite naturally the publisher became miffed when a local concern was granted FCC permission to establish a radio station which, in addition to broadcasting news, disseminated advertisements similar to those published by the Journal. Thus, when many of the Journal’s customers also began to advertise over the radio station, the publisher reacted by refusing to accept local advertising from any party using the radio station for local advertising. Significantly the High Court notes that— [b]ecause of the Journal’s complete daily newspaper monopoly of local advertising in Lorain and its practically indispensable coverage of 99% of the Lorain families, this practice forced numerous advertisers to refrain from us- ing WEOL [the station] for local advertising. That result not only reduced the number of customers available to WEOL in the field of local Lorain advertising and strengthened the Journal’s monopoly in that field, but wo own A-17 more significantly tended to destroy and eliminate WEOL altogether. Lorain Journal, supra at 149-50. (Emphasis added.) The Court held that such conduct constituted a violation of the “monopolization” and “attempt” provisions of §2. Note that while the publisher refused to deal, not with the station but with the competitors’ mutual customers, such conduct did amount to action which at least severely lessened the agency’s ability to compete with the publisher.'* See Eastman Kodak Co. v. Southern Photo Materials Co., supra, where the same effect obtained when the monopolist refused to deal with the competitor reasonably. The Fifth Circuit’s most enlightening refusal to deal case is Six Twenty-Nine Productions, Inc. v. Rollins Telecasting, Inc., 365 F. 2d 478 (5 Cir. 1966). This case involved a tele- vision station which broadcasted commercial advertising in certain parts of Florida and Alabama. Being the only TV sta- tion in Pensacola, Florida it had a natural monopoly on all ad- vertising desired for transmission over video airwaves within its broadcast limits. Prior to plaintiff’s entering the advertis- ing business defendant aired commercials prepared either by it or the three licensed advertising agencies it recognized in Pensacola. For those commercial slots handled, but not directly prepared and sold, by the station a 15% commission was paid to the referral agency making the placement. After piaintiff commenced operation a local mobile home business, which had previously advertised directly through the station, employed the plaintiff as its advertising agency. The station, in refusing to recognize the plaintiff as a quali- fied agency, foreclosed the attempt to have a commercial aired 18 This was due to the fact that WEOL derived almost all of its in- come from advertising. Lorain Journal, supra at 148. A-18 by agency placement. In reversing the district court’s granting of summary judgment for the station the appellate court held that the complaint did state a claim under §2. In reviewing what the plaintiff had alleged the court added a paragraph that, again, we feel has particular importance with respect to refusals to deal in the context of a §2 charge: The complaint further alleged that the standards set up by the defendant were for the express purpose of preventing the plaintiff from engaging in the business of an advertising agency and served to destroy competi- tion by plaintiff and in fact rendered transaction of busi- ness by plaintiff impossible. Six Twenty-Nine Productions, supra at 481. (Emphasis added.) Thus the Court held that a $2 claim was made out where the refusal to deal prevented the plaintiff agency from competing with the TV station in the commercial prepara- tion market. As can be seen by comparison with these cases, what Dono- van has proven does not measure up to a violation under §2. In all three cases each refusal to deal was determined to be a use of monopoly power. Here the refusal to deal was not a use of monopoly power simply because it did not—and could not—have the effect of excluding competition. Significantly, in all three cases the defendants’ refusal to deal resulted either in the target competitor’s being rendered unable to compete (Otter Tail and Six Twenty-Nine) or seriously weakened in its ability to compete (Lorain Journal)'*® with the respective defendants in the relevant markets. Here Donovan was not— and could not be—precluded from competing with FTC. 19In the case before us electrical construction was but one enter- prise from which Donovan derived revenues the diminishing of which we find did not impair its ability to enter FTC’s terminal equipment market. A-19 Our assessment of this case is also compatible with estab- lished law which distinguishes between conduct that arguably fits within the statutory language and that which is truly ac- tionable. Cf. Credit Bureau Reports, Inc. v. Retail Credit Co., 476 F.2d 989, 992, petition for rehearing denied, 478 F. 2d 1402 (5 Cir. 1973) (en banc). It must be realized that we are dealing with a private plaintiff proceeding under §4 of the Clayton Act, 15 U.S.C. §15, for treble damages; thus, the anti- competitive effect wrought by the challenged conduct must cause harm to the litigant for which compensation is war- ranted. See Credit Bureau Reports, supra at 992. Plaintiff simply did not demonstrate that FTC’s refusal to deal pro- duced an anticompetitive impact which is redressable under §2 of the Sherman Act. Accordingly, judgment shall be entered for defendant on the monopolization claims. Findings of fact and conclusions of law have not been sepa- rately stated but are included in the body of the foregoing opinion as specifically authorized by 52(a) of the Federal Rules of Civil Procedure. An appropriate order shall be entered. Dated: November Ist, 1976. A-20 APPENDIX B DONOVAN CONSTRUCTION COMPANY OF MINNESOTA, a corporation, Plaintif f-Apnellant, vs. FLORIDA TELEPHONE CORPORATION, a corporation, Defendant-A ppellee. No. 76-4428. United States Court of Appeals, Fifth Circuit. Dec. 22, 1977. Antitrust action was brought charging chat corporate de- fendant had monopolized or attempted to monopolize inter- connect business. The United States District Court for the Middle District of Florida, John L. Miller, J., entered a judg- ment in favor of defendant, and plaintiff appealed. The Court of Appeals held that plaintiff which did not deal in market where alleged antitrust violation occurred or intend to enter such market did not have standing to sue under antitrust laws. Affirmed. 1. Monopolies—28 (1.6) To have standing to sue for treble damages under Clayton Act, plaintiff must have suffered an injury of type antitrust laws were intended to prevent. Sherman Anti-Trust Act, § 2, 15 U.S.C.A. § 2; Clayton Act, § 4, 15 U.S.C.A. § 15. 2. Monopolies—28 (1.6) To have standing to sue for treble damages under Clayton Act for antitrust violation plaintiff must be within sector of ne ee a A-21 economy threatened by breakdown in competitive conditions. Sherman Anti-Trust Act, § 2, 15 U.S.C.A. § 2; Clayton Act, § 4, 15 U.S.C.A, § 15. 3. Monopolies—28(1.6) Plaintiff which did not deal in market where alleged anti- trust violation occurred or intend to enter such market did not have standing to sue under antitrust laws for damages for alleged antitrust violation Sherman Anti-Trust Act, § 2, 15 U.S.C.A. § 2; Clayton Act, § 4, 15 U.S.C.A. § 15. Appeal from the United States District Court for the Middle District of Florida. Before JONES, GODBOLD and GEE, Circuit Judges. PER CURIAM: In this antitrust case, the defendant, Florida Telephone Cor- poration (FTC), provides telephone service to a central Florida region. FTC also sells terminal telephone equipment in its region. This is sometimes called the “interconnect busi- ness.” The plaintiff, Donovan Construction Company engages in many businesses. For 2 1/2 years Donovan provided FTC with electrical construction services, bui shortly after Dono- van decided to enter the interconnect business in another region of Florida FTC terminated their relationship. Donovan sued under the antitrust laws for the damage it suffered in its electrical construction business, arguing among other things that FTC had monopolized or attempted to monopolize the interconnect business. 15 U.S.C. § 2.! The parties stipu- lated that FTC’s region was a relevant market for the inter- connect business, and the district court found that Donovan 1 Donovan has limited its appeal of the district court’s judgment in favor of FTC to the claims of monopolization or attempted monop- olization. A-22 did not intend to enter that market. We hold that Donovan lacks standing to sue under the antitrust laws. [1-3] To have standing to sue for treble damages under Clayton Act § 4, 15 U.S.C. § 15, a plaintiff must have suffered an injury of the type the antitrust laws were intended to pre- vent. Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 97 S.Ct. 690, 50 L.Ed.2d 701 (1977). We have required that the plaintiff must be within the target area. That is, the plaintiff must be within the sector of the economy threatened by a breakdown in competitive conditions. Tugboat, Inc. v. Mobile Transportation Co., 534 F.2d 1172 (CA5, 1976); Southern Concrete Co. v. U. S. Steel Corp., 535 F.2d 313 (CA5, 1976); Jeffrey v. Southwestern Bell, 518 F.2d 1129 (CA5, 1975) ; Battle v. Liberty National Life Insurance Co., 493 F.2d 39 (CA5, 1974) ; Dailey v. Quality School Plan, Inc., 380 F.2d 484 (CA5, 1967). The alleged antitrust violation threatened the interconnect business in FTC’s region. Because Donovan did not in any way deal in that market, or intend to do so, Donovan was not within the sector of the economy threatened by the alleged violation. The judgment of the the district court is AFFIRMED. ee ee Perey A-23 APPENDIX C UNITED STATES COUR?’ OF APPEALS FOR THE FIFTH CIRCUIT No. 76-4428 D. C. Docket No. CA-72-733-T-K DONOVAN CONSTRUCTION COMPANY OF MINNESOTA, A Corporation, Plaintiff-Appellant, vs. FLORIDA TELEPHONE CORPORATION, A Corporation, Defendant-A ppellee. Appeal from the United States District Court for the Middle District of Florida Before JONES, GODBOLD and GEE, Circuit Judges. JUDGMENT This cause came on to be heard on the transcript of the record from the United States District Court for the Middle District of Florida, and was argued by counsel; ON CONSIDERATION WHEREOPF, It is now here ordered and adjudged by this Court that the judgment of the said Dis- trict Court in this cause be, and the same is hereby, affirmed; It is further ordered that plaintiff-appellant pay to defen- dant-appellee, the costs on appeal to be taxed by the Clerk of this Court. December 22, 1977 Issued As Mandate: A-24 APPENDIX D IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT No. 76-4428 DONOVAN CONSTRUCTION COMPANY OF MINNESOTA, A Corporation, Plaintiff-Appellant, vs. FLORIDA TELEPHONE CORPORATION, A Corporation, Defendant-A ppellee. Appeal from the United States District Court for the Middle District of Florida ON PETITION FOR REHEARING (January 27, 1978) Before JONES, GODBOLD and GEE, Circuit Judges. PER CURIAM: IT IS ORDERED that the petition for rehearing filed in the above entitled and numbered cause be and the same is here- by DENIED. Entered for the Court: JAMES BOLAND United States Circuit Judge + eet ete mv, + te wee --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385005_0573%3A1. Public record. Not legal advice.