# Petition — Gough v. Rossmoor Corp.

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition
- **Published:** January 1, 1979
- **Citation:** 440 U.S. 936

## Text

Supreme Court, 0.
FILED

DEC 99 1978
In the Supreme C |

MICHAEL ROQAK, JR, CLERK

OF THE

United States

October TERM, 1978

No. 78 “10 02

Kerry M. Gove, Trustee in Bankruptcy of Louis
Rosen dba Watnut Creek F'uRNITURE,
Petitioner,

vs.

Rossmoor Corporation and CRESTMARK
CaRPET AND Drapery CoMPANY,
Respondents.

PETITION FOR A WRIT OF CERTIORARI

to the United States Court of Appeals
for the Ninth Circuit

MaxweE.u KeItH

50 California Street
San Francisco, California 94111
Telephone: (415) 981-1361

ANTHONY J. MERCANT

Mercant & O’Brien

111 West St. John Street
Community Bank Building
San Jose, California 95113

Attorneys for Petitioner

BOWNE-PERNAU WALSH ¢ 1045 SANSOME ST. © S.F.,CA 94111 © (415) 981-7882

SUBJECT INDEX

Page
en NI I oe cae abe oe cece nace’ 1
on ag win Gs cng edwin ote dca es 3
es Ra re oS 5 ain in gece sc Dac ows's a 5
ns lg ace cata pawl’ ss ous os 5
en oe kn wwe Va cu pwahivacwn'wn esa 5
es Sel oaks on As wpa wdaes ss ydeaece cs 5
Se ISIS se SR 5
ge ee Se ee 7
ee eee fe te el. Secs Fale woe vt )
RS REN aioe a 9

3. The conspiracy in restraint of and in monopolization of
NE a or cay neg Ge See nek viencdes ot 10
s a. Coercive means were used to further the conspiracy 13
% OE TET ee 13
j B. Commmeat Ge proceewingy ............................ 14
C. Changing defenses of the defendants................... 19
The reasons for granting the writ .......................... 20

I. This court should review decisions which apply doctrines
to exempt conspiracies in restraint of trade from the
ESSE EE ae ae a 20
A. The relevant market need not be shown in a hard
core section 1 conspiracy case since Congress has
prohibited the entry into coercive conspiracies whose
purpose and object is to suppress or exclude compe-
tition in any appreciable part of interstate commerce 20
1. The Sherman Act prohibits the entry into a con-
spiracy to prevent interbrand competition in any
appreciable part of interstate commerce ...___. 20
B. This court has heretofore resisted all efforts to shift
judicial attention away from the purposes, scope and

A A he aN hE TMB A: phat 8

means of the conspiracy to suppress competition 24
C. The means used by the conspiracy here are also in
per se violation of the Act........... .. 26

1. The refusal to deal was a per se violation eeaee 26

ii

SuByect INDEX
Page
2. Repondents were effecting a stay out of Rossmoor
policy ....... EY Noumea hy idee rae 27
3. The respondents were Suing Ogi tel eee 28

D. Competition in a $50,000,000 retirement community
is subject to judicial protection under § 2 of the Sher-
man Act

1. A community is a significant part of commerce
SN rae er ee 29

2. Relevant market is definable in terms of where
sellers seek to compete ......................, 30

3. The barriers erected by sellers may define a rele-
vant market

E. Relevant market is not a test when conspiracy or
attempt to monopolize is in issue ............... 31

F. Relevant market does not allow the appellate court
to order judgment for the respondents... ....... 32

II. This court should enforce rules which prevent litigants
from urging as error their own submission or offers .... 33

A. Litigants are estopped from obtaining the benefits
of their own errors

B. In any event, judgment n.o.v, cannot be entered for

defendants because they failed to make a motion
within 10 days after the findings of the jury ........ 36

III. Judgment cannot be enforced when based on an appellate
court entering findings of fact contrary to the trier of fact 36

IV. The opinion in _— III violates the doctrine of law of
the case UT eT Oy oe

Conclusion

ee

a as —

lii

TABLE OF AUTHORITIES CITED

Cases
Page
Albrecht v. Herald Co., 390 U.S. 145 (1968) ................ 22
Associated Press v. United States, 326 U.S. 1 (1945) ........ 21, 24
Bigelow v. RKO Radio Pictures, Inc., 327 U.S, 251 (1946) .... 38
Binderup v. Pathe Exchange, 263 U.S. 29] (1923) .......... 22, 24
Board of Trade of the City of Chicago v. United States, 246
Me, TR CI aia oo Dias pot tes Pies ba kh ea Bs 32
Brown Shoe Co. v. United States, 370 U.S. 294 (1962)... 30
Cataphote Corp. v. DeSoto Chem. Coatings, Inc., 450 F.2d
769 (9th Cir, 1971), cert. denied, 408 U.S, 929 (1972) .... 35
Cone v. W. Va. Pulp & Paper Co., 330 U.S. 212 (1947) ...... 36
Continental TV, Inc. v. GTE Sylvania, Inc., 433 U.S. 36
CONEY bias Oe Wea ree bas see aes 21, 22, 27
De Voto v Pacific Fidelity Life Ins. Co., 516 F.2d 1 (9th Cir.
| A ee rere te ne ey ee a Ee, 22
Donnelly Garment Co. v. N.L.R.B., 123 F.2d 215 (sth Cir.
Wie ERS Sek Re ep een tas erat as 40
Eastern States R.L.D. Associates v. United States, 234 U.S. 600
PE sic oc te hag on once bh k been Paes Cae 24
Fashion Originators’ Guild of America v. Federal Trade Com-
mission, 114 F.2d 80, affirmed, 312 U.S. 457 (1941) ........ 21
Fount-Wip, Inc. v. Reddi-Wip, Inc., 568 F.2d 1296 (9th Cir.
MR ey vcain eh dati ke ad i a9 i et raha 22, 28, 35

Gamco, Inc. v. Providence Fruit & Produce Bldg., 194 F.2d 484

Hey aaa ae Sa aR TS SRO 4 30, 31
Globe Liquor Co. v. Roman, 332 U. S. OTE (IO). fies 36
Gough I, Rosen v. Rossmoor Corporation, 487 F.2d 373 (9th

Cin 1973) . we . 2, 20, 22, 30, 33, 40
Gough II, eats v. ‘amen Comevation, 533 F.2d 453 (9th

Cir. 1976) cert. denied 429 U.S. 857 ....... 6... eee 2, 40
Gough III, Gough v. Rossmoor Corporation, erg yg

2d .. (9th Cir. 1978), 1978-2 Trade Cases, { 62,

she | oon ..1, 2, 23, 36, 40
Hospital Building Co, v. Trustees of Rex —" 425 U.S. 738

Co Ga ern ren ctor five res 0 22
In re Carmona, 224 F.Supp. 497 1 (8D Ca. 1960), sfiruct 336

F.2d 518 (9th Cir, 1964) . eats 40

ot 6 28.6 2S ORS SOOT Cie 2.078 03 ELS, SA 8

iv

TABLE OF AUTHORITIES CITED
CASES

Page

International Salt Co. v. United States, 332 U.S. 392 (1947) .. 21
Klor’s, Inc. v. Broadway-Hale Stores, Inc., 359 U.S. 207 (1959)
Fi Gils eV ne We nals ariths Wo SPOS 6 hE o a's wake aul ial oR 21, 25, 26

Knutson v. Daily Review, Inc., 548 F.2d 795 (9th Cir. 1976),
oust. dented, G33 US. GRO (1677) «0... cdc ts csevce tween 35

Lessig v. Tidewater Oil Co., 327 F.2d 459 (9th Cir. 1964) .... 32

Lorain Journal v, United States, 342 U.S. 143 (1951) . .27, 29, 31, 39

Mandeville Island Farms, Inc, v. American Crystal Sugar Co.,
een ore rer a 21

May Department Stores v. Reynolds, 140 F.2d 799 (8th Cir.
eh a eee 40

Mutual Fund Investors v. Putnam Management Co., 553 F.2d
OD 06. Ck 1) is. sie a eee ee 35

National Society of Professional Engineers v. United States,
> 1g Oe ED Accs Fan'eeh inca ceeumeuee 22

Neely v. Martin K. Eby Construction Co., 386 U.S. 317 (1967) 36

Pfizer, Inc. v. Government of India, .. U.S. .., 98 S.Ct. 584
CUES 2 2 saas Che's Gas canoes ea oe een 23

Quemos Theatre Co. v. Warmer Bros. Pictures, 35 F.Supp. 949
PUN ND” 8 Fis x 455 cas x os Vala ar oe 22

Radovich v, National Foootball League, 352 U.S, 445 (1957)

SOL: vba COL ea canard cates Chee vMltes Tee 23, 25, 26
Ronald Fabrics Co. v. Verney Svenvebik Mills, Inc., 152 F.
me ee CE, |) bn oceans oe eee 22

Roth v. McAllister Bros., Inc., 316 F.2d 143 (2d Cir. 1963) . 35

Scarano v. Central Ry. Co, of New Jersey, 203 F.2d 5
WOM on ec, os Si ee 0 (2a 35

pererecn Oil Co. of New Jersey v. United States, 221 U.S. 1

Story Parchment Co, v. Paterson Parchment Paper Co., 28
Che a ee ee ee ae

Swift & Co, v. United States, 196 U.S. 375 (1905)

United States v. E. I. du Pont de Nemours & Co., 351 U.S, 377
BENIN «is: 25 wd cabs ava aakssascctt eee 31

v

TABLE or AuTHoRiITIES CrTED

CasEs
Page
United States v. First Nationa] Pictures, Inc., 282 U.S. 44
UT tua ys asks engscccesyebecronceregs 24
United States v. General Motors Corp., 121 F.2d 376 (7th Cir.
OE in er ereee 22
United States v. General Motors Corp., 234 F.Supp. 85, rev'd,
a ce cece rete e see esveeone, 22, 23, 26
United States v. Griffith, 334 U.S. 100 ............ cee uee, 30, 31
United States v. Kissel, 218 U.S. 691 (1910) ............005. 22

United States v. Marine Bancorporation, 418 U.S, 602 (1974) 30
United States c. Socony Vacuum Oil Co., Inc., 310 U.S, 150

ee 29
United States v. TopCo Associates, 450 U.S, 596 (1972) ..... 26
United States v. Yellow Cab Co., 332 U.S, 218 (1948) ..... 31, 32
Walker Process Eqpt. Inc. v. Food Machinery and Chemical

Corp., 382 U.S. 172 (1965) 0.0.0... ee ece eee e renee 31
White Motor Co. v, United States, 372 U. S. 253 (1063) ...... 22
William Goldman Theatres v. Loew’s, Inc., 150 F.2d 738 (3d

aaa Nawssovccespccesiccevescvces. 22, 30

Wood v. United Air Lines, 216 F.Supp. 340 (E.D.N.Y. 1963) 35
Woods Exploration & Prod. Co. v. Aluminum Co. of America,

438 F.2d 1286 (Sth Cir. 1971) ........-: cee eee eee eee: 30, 31

Zenith Radio Co, v. Hazeltine Research, Inc., 401 U.S. 321
cca c eres steven cee eraees 35

Constitutions
United States Constitution, Amendment VII................ 37
Rules

Federal Rules of Civil Procedure:
cy vv cer pod vsreccceee 15
SPY Ubalneessevnsrreceshsrcccceserecen, 4

— Se

vi
Statutes
Page | In the Supreme Court

12 U.S.C.:

a 5G udp sa Odd Das he dd Oe third Rawea 5 OF THE

SS Cc iin Randy hs bs une eben maida OEE 5 :

United States

IE Cee i ns a as os ehew ne cee Pals oa 5

Section 15 . a beste ties aa eee Tae ae
Clayton Act; No

EE eae ce oa Gwe 4 NK d oe RE RK ON ede 4,5, 15

eta ec occas oi hve SS See ae a ee

i Kerry M. Goven, Trustee in Bankruptcy of Louis
S rman Act: Rosen dba Watnut Creek FurnNITURE,

EE ed boa wie Skee ues ee wren ee Ty. a ee Sictiitiae

|” Ue Maat ee Cina MEO 2 Ry 3, 5, 29, 34 :

Vs.

RossMoor CorPoRATION and CRESTMARK
CARPET AND Drapery CoMPANy,
Respondents.

PETITION FOR A WRIT OF CERTIORARI

to the United States Court of Appeals
for the Ninth Circuit

Kerry M. Gough, petitioner, prays for a writ of certi-
orari to review the judgment of the United States Court
of Appeals for the Ninth Circuit entered in the above-
entitled case on August 9, 1978, petition for rehearing de-
nied on October 27, 1978.

CITATIONS TO OPINIONS BELOW
The opinion of the Honorable United States Court of
Appeals for the Ninth Circuit reversing the judgment of
the trial court on behalf of plaintiff is officially unreported
and appears in 1978-2 Trade Cases, {] 62,202. It is attached

te =

2

hereto as Appendix A. The order denying a petition for
rehearing, for a hearing en banc and motion for a new trial
is attached hereto as Appendix B herein. The judgment
of the trial court, which was reversed, entered February
23, 1977, is attached hereto as Appendix C herein. The
opinion of the trial court allowing judgment for petitioner
herein filed February 23, 1977, is attached hereto as Appen-
dix D. It is unreported.

The opinion below is the third opinion in this case and
will be referred to from time to time as Gough III. The
second opinion of the court of appeals is reported at 533
F.2d 453 (9th Cir. 1976), cert. denied, 429 U.S. 857. It will
be referred to as Gough II and is attached hereto as Appen-
dix EK. The judgment in favor of petitioner which the
opinion in Gough II reversed, entered November 4, 1974,
as attached hereto as Appendix F’, The opinion of the trial
court in favor of petitioner, filed October 8, 1974 is at-
tached hereto as Appendix G. The order of the District
Court denying respondents’ judgment n.ov. or motion for
a new trial filed December 6, 1974, is attached hereto as
Appendix H.

The opinion of the United States Court of Appeals for
the Ninth Circuit reversing the judgment on behalf of
respondents and entering judgment for petitioner is at-
tached hereto as Appendix I. It will be referred to herein
as Gough I. It is reported at 487 F.2d 373 (9th Cir. 1973).

The order of the panel in Gough I, entered December 28,
1973, changing the last paragraph of its opinion striking
the entry for judgment for plaintiff and remanding the
case to the trial court for further proceedings is attached
hereto as Appendix J,

3

The judgment of the trial court for the respondents
filed June 11, 1970 is attached hereto as Appendix K.

The jury’s special findings in answer to interrogatories
entered March 27, 1970 is attached hereto as Appendix L.

QUESTIONS PRESENTED

1. Whether a per se offense under §1 of the Sherman
Act exists when completely independent entities agree to
exclude competition in the sale of carpets ‘to purchasers of
apartment units at a retirement community projected for
10,000 units, involving $20,000,000 sales, use the means
of coercion to cause the refusal to allow carpet advertise-
ments at competitive prices in the community newspaper
upon independent newspapermen who fought the decision,
fraud the purchasers of the apartments, prevent all com-
petitive retailers from installing carpets prior to move-in,
and deprive the plaintiff of sales to the purchasers of the
apartments, the agreement being a substantial cause of his
going out of business.

2. Whether per se offense under $2 of the Sherman
Act exists when businessmen with totally divergent busi-
ness interests and duties toward the public agree to close
off a multi-million dollar retirement community, financed
by FHA commitments, from competition in the sale of
carpets, when, as a group, they control access to the poten-
tial purchasers of carpets at the very time of the sale of
the apartment units (manors).

3. Is the relevant market an indispensable element for
proof of a restraint of trade under the rule of reason; and,
if so, who has the burden of justifying the need of proof
of the relevant market? If it is indispensable, can the

+

respondents attack their own statement in an appellate
brief and their own interrogatories to the jury which define
the relevant market to be the above mentioned retirement
community.

4, Can the federal courts require an injured retailer
suing under the provisions of §4 of th

E-3

should refer such motions, arising for the first time on ap-
peal, to the trial court so that it can first pass on them. Jd.
at 323-26. See also Iacurci v. Lummus Co., 387 U.S. 86, 88
(1967).

Unless this court expressly or by clear implication dis-
poses of motions raised for the first time on appeal, it must
be presumed that they will be acted upon by the trial court
on remand. The above rule is necessary to insure that some
court consider the merits of the motions which a party is
entitled to present.

In the first appeal of the instant case, this court neither
expressly nor by clear implication ruled on the motions
presented in the rehearing petition. To the contrary, the
modification of the order from one requiring that “judg-
ment... [be] entered for plaintiff” to one remanding “for
further proceedings consistent with this opinion” strongly
implied that the motions were to be entertained below on
remand,

Gough directs our attention to certain language in our
earlier opinion regarding the jury’s factual findings on (a)
power and intent to exclude, and (b) damages. We said
those findings “established, as a matter of law,” that de-
fendants had engaged in illegal conduct which injured
plaintiff. 487 F.2d at 376. Gough argues that by this lan-
guage the court effectively denied the motions for judgment
n.o.v, and new trial. We disagree.

Read in context, the use of the term “matter of law” sug-
gests that the factual issues of power and intent, and dam-
ages, were as a matter of law properly presented to the
jury. By contrast, the interstate commerce issue should not

E-4

have been submitted to the jury, since “[t]he undisputed
facts cstablished that the necessary relationship to inter-
state commerce did exist.” 487 F.2d at 377.

Nowhere in the course of the opinion preceding the
phrase “matter of law” does this court set forth the evi-
dence in such a way as to support a conclusion that the
jury must, “as a matter of law,” have found for plaintiff.
Therefore, the “matter of law” language may mean that if
the jury’s answers were properly based on adequate evi-
dence, the judgment must under law be for the plaintiff.
If this interpretation is correct, the trial judge must now
decide, in entertaining the motions for judgment n.o.v. and
new trial, whether the evidence supported the jury’s an-
swers.

Assuming, without deciding, that Gough is correct in in-
terpreting the “matter of law” language as being in effect
a denial by this court of the motions presented, we would
still reverse. The number of possible interpretations of the
“matter of law” language suggests that none of them is
supported by “clear implication.” Thus the interpretation
suggested by Gough, even if correct, cannot foreclose the
exercise of discretion by the trial judge on remand.

Since the trial judge acted on the mistaken assumption
that he could not adjudge the motions for judgment n.o.v.
and new trial, we must remand so that he may do so. See
Fairmont Glass Works v. Cub Fork Coal Co., 287 U.S. 474
(1923) ; Southern Pac. Co. v. Guthrie, 186 F.2d 926 (9th Cir.
1951).

The cause is remanded for the trial judge’s consideration
of the merits of Rossmoor’s motions for judgment n.o.v.
and new trial.

Se Pe

F-1

Appendix F

United States District Court
Northern District of California

No. 45531 GBH

Kerry M. Gough, Trustee in Bankruptcy |
of Louis Rosen, dba Walnut Creek
Furniture,

Plaintiff,

~~

vs.

Rossmoor Corporation, et al.,
Defendants.

;

[Filed November 4, 1974]

JUDGMENT FOR PLAINTIFF

The above entitled action having been tried before the
Honorable Elbert P. Tuttle, Judge, by designation, and a
jury, commencing March 16, 1970; and the jury having an-
swered the following stated interrogatories in the following
ways:

“1, Did the defendants and Leisure World Founda-
tion or Golden Rain Foundation by means of a common
plan, scheme or design have the power and intention

to exclude plaintiff from the carpet and/or business
in Rossmoor Leisure World?

Yes Yes
No

2. Did defendants enter into a common plan,
scheme or design with Leisure World Foundation or

F-2

Golden Rain Foundation to prevent plaintiff from ad-
vertising carpets in the Leisure World News such as
to act as a restraint on plaintiff’s business of selling
carpets or other merchandise at Rossmoor Leisure
World?

Yes Yes
No

3. If your answer to either of the preceding ques-
tions is in the affirmative did such restraint have a
substantial effect on interstate commerce or the flow
of interstate commerce?

Yes
No No

4. Has plaintiff suffered any monetary damage by
reason of its inability to advertise in Leisure World
News?

Yes Yes

Te atten

5. Jf so, please indicate the amount opposite the
appropriate type of damage you find to have been
suffered.

Net Profits $18,143

Goodwill $22,738”;

And the United States Court of Appeals for the Ninth
Circuit having on October 17, 1973 filed its opinion holding
upon the facts and the law applicable to this case, the
defendants are within the provisions of the Federal anti-
trust laws, speciiically Section 4 of the Clayton Act, 15
U.S.C. §15; and the said Court having on December 28,
1973 amended its opinion;

a vere piicaer. 22,738.00

1-5

conduct had a “substantial economic effect” upon interstate
commerce, or, “ ‘concerns more States than one’ and has a
real and substantial relation to the national interest” in a
competitive economy. Heart of Atlanta Motel v. United
States, 379 U.S. 241, 255 (1964), quoting Gibbons v. Ogden,
22 U.S. (9 Wheat.) 1, 196-97 (1824); see Rasmussen v.
American Dairy Ass’n, swpra, 472 F.2d at 522-23. See, gen-
erally, 1 von Kalinowski, Antitrust Laws & Trade Regula-
tion § 5.01[4] (1969).

The substantive issue, on the other hand, is whether
defendants participated in anticompetitive conduct of the
kind encompassed within the statutory terms “restraint of
trade,” “monopolize,” or “attempt to monopolize.” In terms
of this case, the substantive question was whether defend-
ants, with the power and intent to exclude plaintiff from
the Rossmoor Leisure World market, entered into a com-
mon scheme or plan to restrain plaintiff’s business by pre-
venting him from advertising in the Leisure World News,
and, if so, whether such conduct was the kind of anticom-
petitive conduct prohibited by the Act.

Thus, although the substantive and jurisdictional issues
are often confusingly described in terms of the “effect” of
particular conduct upon commerce, as if a common question
were presented, see, e.g., Las Vegas Merchant Plumbers
Ass’n v. United States, 210 F.2d 732, 739-40 n.3 (9th Cir.
1954), the substance of the two inquiries is quite different.
An unreasonable restraint on competition may have no
impact upon interstate commerce, or an impact so insig-
nificant that regulation under the Commerce Clause is not
justified as a means of protecting interstate commerce.
Page v. Work, 290 F.2d 323, 331-32 (9th Cir. 1961). Or con-

1-6

duct clearly having a substantial economic impact on inter-
state commerce may not violate the Act’s prohibitions
against unreasonable restraints of trade and monopoliza-
tion. Cartrade, Inc. v. Ford Dealers Advertising Ass’n, 446
F.2d 289, 292 (9th Cir. 1971).

When the issue is whether the defendant’s conduct vio-
lates the norms of the statute, the focus is upon commer-
cial competition: whether the defendant’s conduct- -“in” or
“affecting” interstate commerce or not—unreasonably
restrains competition in the :uarket place. When the issue
is whether jurisdiction exists, the focus is upon interstate
commerce: whether the defendant’s conduct—unreasonably
restrictive of competition or not—has a sufficient impact on
interstate commerce to justify regulation under the Com-
merce Clause.

In the present case, the jury’s factual findings that
defendants, with the power and intent to exclude plaintiff
from the Rossmoor Leisure World market, entered into a
common scheme or plan to restrain plaintiff’s business by
preventing him from advertising in the Leisure World
News established, as a matter of law, that defendants
had engaged in the type of anticompetitive conduct that
Congress intended to prohibit by the Sherman Act. The
jury’s further findings that plaintiff suffered monetary
damages in a determined amount by reason of defendants’
conduct, established, as a matter of law, that plaintiff was
among the class of private persons authorized by the
Clayton Act to seek redress for such conduct. Defendants

do not argue to the contrary.

SS Se. m

Qo Ae

~

a a gy Re > SPA tes es,

1-7

The sole question herein is jurisdictional : did defendants’
conduct have a sufficient relationship to interstate com-
merce to be within Congress’ power to regulate, and hence
to come within the Sherman Act?

Defendants argue that the jury’s specific finding that
defendants’ acts did not have a “substantial effect on inter-
state commerce or the flow of interstate commerce” is
conclusive of jurisdiction. We disagree.

It is doubtful whether the jurisdictional issue should
have been submitted to the jury, even had the evidence
been in dispute. Except where the jurisdictional issue and
the issues on the merits are factually “completely inter-
meshed,” McBeath v. Inter-American Citizens for Decency
Committee, 374 F.2d 359, 362-63 (5th Cir. 1967), it may
well be the court’s function to resolve factual disputes
relevant to jurisdiction on motion under Rule 12(b)(1),
Fed. R. Civ. P., rather than the jury’s function to resolve
such disputes in the trial of the case on the merits. See
Page v. Work, supra, 290 F.2d at 334; Bailey’s Bakery,
Ltd. v. Continental Baking Co., 235 F.Supp. 705, 714
(D.C. Hawaii 1964); 5 Wright & Miller, Federal Practice
& Procedure § 1350, at 556-58, 5 Moore’s Federal Practice
7 38.37 [2.-2], at 298-300; but see Marks Food Corp. v.
Barbara Ann Baking Co., 274 F.2d 934 (9th Cir. 1959).*

*Professor Moore summarizes the policy considerations supporting
this view as follows:

As a matter of policy, however, there is much to be said for
approaching problems of statutory coverage as triable to the
court when reasonably separable from the facts of violation.
The difference is this: if coverage is treated as substantive
for purposes of mode of trial, the issue of whether a cause of
action is stated must be left to the jury in cases in which
underlying facts are not in dispute, but different inferences

1-8

Even assuming, however, that the resolution of conflicts
in the evidence as to jurisdictional facts is the function
of the jur;, the jury must be given adequate instructions
as to the legal standard to be applied. Ratigan v. New
York Central R.R., 291 F.2d 548, 554 (2d Cir. 1961); 5A
Moore’s Federal Practice, supra, J 49.02, at 2206 n.7; 9
Wright & Miller, Federal Practice & Procedure, supra,
§ 2506, at 502. The interrogatory submitted to the jury in
this case (question “3,” supra note 2) did not inform the
jury of the constitutional tests for determining whether
the relationship between defendants’ conduct and interstate
commerce was such as to permit Congress to prohibit de-
fendants’ conduct. Nor was the general explanatory in-
struction given to the jury adequate to this purpose.‘

In any event, there was no conflict in the evidence as to
the facts relevant to jurisdiction. The undisputed facts
established that the necessary relationship to interstate

may be drawn from them. Thus on the same business arrange-
ments one case may be decided one way and another in a
different way, as the jury may find that the arrangements did
or did not affect commerce. . . . Surely these are matters that
should be treated as a matter of law so that the perimeter of
the statute can be worked out in the appellate courts. When
there is . . . in the case of the antitrust case a factual question
as to details of the defendant's business activities, such ques-
tions could be put to the jury as special interrogatories, or a
special verdict employed.

5 Moore’s Federal Practice § 38.36 [2.-2], at 300.

‘The only relevant portion of the instructions reads (Tr. 1310):
The Sherman Act applies to parties whose acts are in the
course or flow of commerce across state lines or whose acts,
although local, substantially affect interstate trade and com-
merce. By substantial the law means not de minimus—not
insignificant, an amount more than trifling. The amount of
interstate trade involved, if substantial, is not material, since
the Sherman Act brands as illegal the character of the restraint,

not the amount of commerce affected,

1-9

commerce did exist. In these circumstances, it was error
to submit the jurisdictional issue to the jury under Rule
49(a). Wirtz v. La Fitte, 326 F.2d 856, 858-60 (5th Cir.
1964); W. R. Grimshaw Co. v. Nevil C. Withrow Co., 248
F.2d 896, 902-03 (8th Cir. 1957); 9 Wright & Miller, supra,
at 499. The jury’s erroneous answer to the jurisdictional
interrogatory should have been ignored. Ratigan v. New
York Central R.R., supra, 291 F.2d at 554-55; W. R. Grim-
shaw Co. v. Nevil C. Withrow Co., supra, 248 F.2d at
902-05; Albert Pick-Barth Co. v. Mitchell Woodbury Corp.,
57 F.2d 96, 99-103 (1st Cir. 1932).

We need not stop to inquire whether retail sales of
carpeting to Rossmoor Leisure World residents occurred
“in” interstate commerce, for it is clear that defendants’
anticompetitive conduct in connection with such sales
necessarily had the “substantial economic effect” upon
interstate commerce in carpeting requisite to the exercise
of federal regulatory power. The retail transactions
affected by defendants’ conduct were essential to the con-
tinued movement of a “substantial” volume of carpeting
from the states of manufacture to the Walnut Creek,
California, area. See Cartrade, Inc. v. Ford Dealers Ad-
vertising Ass’n, supra, 446 F.2d at 292. Elimination of
competition in these intrastate sales of goods produced in
other states “inevitably” affected the interstate commerce
in such goods: “When competition is reduced, prices in-
crease and unit sales decrease,” resulting in fewer pur-
chases from out-of-state producers. Burke v. Ford, 389
U.S. 320, 322 (1967). By restricting plaintiff’s participation
in these retail transactions, and eventually excluding plain-
tiff entirely from this trade, defendants diverted interstate

I-10

shipments of carpeting from plaintiff to themselves, thus
“interfer[ing] with the natural flow of interstate com-
merce.” Klors, Inc. v. Broadway-Hale Stores, Inc., 359
U.S. 207, 213 (1959). The states in which the carpeting is
manufactured as well as the State of California are con-
cerned with the conditions under which carpeting is sold
at retail to California residents. And the relationship
between the elimination of competition in these retail sales
of carpeting at Rossmoor Leisure World and the na-
tional interest in the distribution of carpeting in a free
competitive economy is not so tenuous as to bar federal
intervention, though the market monopolized in this in-
stance was small. Jd. at 213-14. See also Radiant Burners,
Inc. v. Peoples Gas Light & Coke Co., 364 U.S. 656, 660
(1961).

Jurisdiction under the Sherman Act was therefore
clearly present. In view of the jury’s findings with respect
to substantive violation and damage, judgment should
have been entered for plaintiff. The judgment is reversed,
and the cause remanded for this purpose.

A PLAN FSCS CRY FIP » tage

ot

. pean eae ee ee

J-1

Appendix J

United States Court of Appeals
For the Ninth Cireuit

No. 26,475

Kerry M. Gough, Trustee in Beak |

ruptey of Louis Rosen, dba Walnut
Creek Furniture,
Plaintiff-Appellant,

~-

VS.

Rossmoor Corporation, et al.,
Defendants-Appellees. ;

[Filed December 28, 1973]

ORDER

Before: BROWNING, DUNIWAY, and GOODWIN,
Cireuit Judges
The last two sentences of the opinion filed October 17,
1973, are stricken, and the following sentence added as a
separate paragraph:
“The judgment is vacated and the cause remanded
for further proceedings consistent with this opinion.”
The panel as constituted in the above case has voted
to deny the petition for rehearing and to reject the sug-
gestion for rehearing in bance.

The full court has been advised of the suggestion for
in banc rehearing, and no judge of the court has requested
a vote on the suggestion for rehearing in banc. Fed. R.
App. P. 35(b).

J-2

The petition for rehearing is denied and the suggestion
for rehearing in banc is rejected.

Dated: December 28, 1973

ws Te Se

K-1

Appendix K

United States District Court
For the Northern District of California

No. 45531
Louis Rosen d/b/a Walnut Creek i
Furniture,
Plaintiff,
vs. ;

Rossmoor Corporation and Crestmark
Carpet and Drapery Company,
Defendants.

4

[Filed June 11, 1970]
JUDGMENT AND ORDER

The above entitled action having been tried before the
undersigned Judge and a jury, commencing March 16,
1970; and the jury having answered the following stated
interrogatories in the following ways:

“1, Did the defendants and Leisure World Founda-
tion or Golden Rain Foundation by means of a com-
mon plan scheme or design have the power and in-

tention to exclude plaintiff from the carpet and/or
other business in Rossmoor Leisure World?

Yes Yes
No No

2. Did defendants enter into a common plan, scheme
or design with Leisure World Foundation or Golden
Rain Foundation to prevent plaintiff from advertis-

K-2

ing carpets in the Leisure World News such as to act
as a restraint on plaintiff’s business of selling carpets
or other merchandise at Rossmoor Leisure World?

Yes Yes

No

3. If your answer to either of the preceding questions
is in the affirmative, did such restraint have a sub-
stantial effect on interstate commerce or the flow of
interstate commerce?

Yes
No No

4, Has plaintiff suffered any monetary damage by
reason of its inability to advertise in Leisure World
News?

Yes Yes
No

5. If so, please indicate the amount opposite the ap-
propriate type of damage you find to have been
suffered.

Net Profits $18,143
Goodwill § $22,738”

And
the jury, having, during its deliberations, submitted

in writing to the court a question: “Are we to consider
effect on interstate commerce based on total interstate
commerce, or that portion of interstate commerce directly
related to Walnut Creek Furniture?” and the court having
inquired of counsel their respective views as to the appro-
priate answer to such question and the parties having
stipulated on the record (reporter’s partial transcript of

°

~ ERR

K-3

proceedings on Friday, March 27, 1970, page 27) that the
answer should be: “Total commerce,” the special interroga-
tory is deemed to have included this explanatory response
to the jury for the purpose of the jury’s answer to Inter-
rogatory No. 3.

Prior to the entry of judgment the plaintiff filed a mo-
tion to enter judgment in his favor for the amount stated
in Interrogatory No. 5. The defendants file their motion
to enter a verdict in their favor.

It appearing that the jury’s response to special Inter-
rogatory No. 3 is a finding that is decisive in the case,
that is, that the conspiracy which the jury found to exist
under special interrogatories 1 and 2 did not have “a
substantial effect on interstate commerce or the flow of
interstate commerce” under the stipulated definition that
the word “commerce” comprehended “total commerce,”

It Is Now, Therefore,

ORDERED that judgment be entered for the defend-
ants, Rossmoor Corporation and Crestmark Carpet and
Drapery Company.

The plaintiff having filed his motion for directed verdict
prior to submission of the case to the jury, and having,
following such submission, filed his motion for judgment
notwithstanding the verdict or in the alternative for a
new trial, and the parties having filed their briefs and
having presented oral argument in the chambers of the
undersigned, IT IS NOW ORDERED that the said motion
for judgment notwithstanding the verdict and the motion
for new trial are hereby overruled.

K-4

This 11th day of June, 1970.

/s/ Expert P. Turrie

United States Cireuit Judge ~

Designated to sit as a
District Judge in the
Northern District of California

¢
;
;
4

yer er

L-1

Appendix L

United States District Court
For the Northern District of California

No. 45,531

Louis Rosen, dba )
Walnut Creek Furniture,
Plaintiff,
vs.

Rossmoor Corporation and Crestmark
Carpet and Drapery Company,
Defendants.

‘

[Filed March 27, 1970, 5:27 p.m.]

JURY’S SPECIAL FINDING

The following questions are being submitted to you for
your answer in order to aid the Court in reaching a decision
in this matter.

You should recognize that your answers to these ques-
tions will be the basis for the Court’s decision which will
decide whether or not the plaintiff is entitled to recover or
not from the defendants. ban

You are to answer the following interrogatories as appli-
cable. Before any question may be answered, all 12 of the
jurors must agree on the answer.

1. Did the defendants and Leisure World Foundation
or Golden Rain Foundation by means of a common plan
scheme or design have the power and intention to exclude

L-2

plaintiff from the carpet or other business in Rossmoor
Leisure World?

Yes X

TD imine

2. Did defendants enter into a common plea, scheme or
design with Leisure World Foundation or Golden Rain
Foundation to prevent plaintiff from advertising carpets
in the Leisure World News such as to act as a restraint
on plaintiff’s business of selling carpets or other merchan-
dise at Rossmoor Leisure World?

Yes X
De ene

3. If your answer to either of the preceding questions
is in the affirmative, did such restraint have a substantial
effect on interstate commerce or the flow of interstate

commerce?
.

4. Has plaintiff suffered any monetary damage by
reason of its inability to advertise in Leisure World

News?

5. If so, please indicate the amount opposite the appro-
priate type of damage you find to have been suffered.
Net Profits $18,143.00
Goodwill 22,738.00

Dated: March 27, 1970.
/s/ Richard A. Sims,

Foreman.

i
5
4

M-1

Appendix M

STATUTES INVOLVED

Section 4 of the Clayton Act October 14, 1914, Chap.
323, § 4, 38 Stat. 731, 15 U.S.C. § 15; provides:

“That any person who shall be injured in his business
or property by reason of anything forbidden in the
Anti-Trust Laws may sue therefor in the District
Court of the United States in the district in which the
defendant resides or is found or has an agent, without
respect to the amount of controversy and shall recover
three-fold the damages by him sustained, and the costs
of suit, including a reasonable attorney’s fee.”

Sections 1 and 2 of the Sherman Act provide in part,
(Sherman Act, Sections 1 and 2, July 2, 1890, Chapter 647,
Sections 1 and 2, 26 Stat. 209, as amended, 15 U.S.C.,,
Sections 1, 2):

“Section 1: Every contract, combination in the form
of trust or otherwise, or conspiracy, in restraint of
trade or commerce, among the several states, or with
foreign nations, is hereby declared illegal. . . .

“Section 2: Every person who shall monopolize or
attempt to monopolize or combine or conspire with
any person or persons, to monopolize any part of the
trade or commerce among the several states, or with
foreign nations, shall be deemed guilty of a mis-
demeanor... .”

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385005_2247%3A1. Public record. Not legal advice.