Petition — Midessa Television Co. v. Midland Telecasting Co.

| VER CMG VOUTL, UL

a i 7

80-360 SEP5 1980

ERS i, Jk., CLERK

In THE

Supreme Court

of the United States

Octoser TrrM, 1980

No. 80-

Mupessa TeLEvision Company, Ino. et al.,

Petitioners,

v.

Mip.anp TELECASTING COMPANY,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

James A. Exis, JR.

Grorce M. Kryper, IT

Carrincton, CoLeEMAN, SLOMAN

& BLUMENTHAL

2500 South Tower

Plaza of the Americas

Dallas, Texas 75201

Attorneys for Petitioners

PRT ST

Bowne of Dallas Printed in U.S.A.

i

QUESTIONS PRESENTED

1. Whether the first amendment and the Federal Com-

munications Act of 1934 by implication preclude federal

antitrust courts from exercising jurisdiction over a cable

television system’s failure to receive and carry to its sub-

scribers a television broadcaster’s programming.

2. Whether a cable television system’s failure to initiate

administrative proceedings or its failure to carry to its

subscribers a television broadcaster’s programming is a

“restraint of trade or commerce” within the Sherman Act.

3. Whether a Court of Appeals should reverse a trial

court’s dismissal of the entire case by incorrectly stating

that the trial court did not rule on one or more of the

issues in the case.

ii

PARTIES TO THE PROCEEDING

Plaintiff-Appellant: Midland Telecasting Company

Defendants-Appellees: Midessa Television Company,

Ine.; Doubleday Broadcasting Company, Inc.; Tall City

TV Cable Co.; Community Cablevision Company; Cable-

com-General, Inc.; Hodge Enterprises; J. Howard Hodge,

Deceased ; Communicable of Texas, Inc.

TABLE OF CONTENTS

Questions Presented. ...... Daa ree ren

Parties to the Proceeding... aay a Pa

Table of Contents... AN 1S Sng TM IN Ny A ee |

ue Ge Meee ow ee echt

Opinions Below...

RET PO eee TONE Te See ee eee eee Te

Constitutional, Statutory, and Regulatory

Provisions Involved... Ts Re aD eres het

Statement of the Case ..—.......... ders

Reasons for Allowance of the Writ...

A. The Court of Appeals decided important

questions of federal law that have not been but

should be settled by this Court.....................

B. The Court of Appeals, in reversing the trial

court, decided the federal questions in a way in

conflict with the applicable decisions of this Court ....

1. Effect of the Commumications Act .............

2. Effect of the First Amendment ................

3. Application of Antitrust Principles ............

C. The Court of Appeals, in denying that the

trial court ruled on the Section 7 claim, so de-

parted from the accepted and usual course of judi-

cial proceedings as to require exercise of this

Court’s power of supervision.......................

ER I TR pclae ote SS Rane Ce eee Le a

IES. Sol ha Hie Caran 64a ca Cae howl ak eae

iv

. Opinion of the United States Court of

Appeals, Midland Telecasting Co. v.

Midessa Television Co., Inc.,

617 F.2d 1141 (5th Cir. 1980) ............

. Findings of Fact and Conclusions of

Law, United States District Court ........

. Order and Judgment, United States

SI en he ra at ae

WAM es oa oe eke eR Sh Ope We so oKo 8

. Order Denying Rehearing, United

States Court of Appeals ................

aatk a 4-26

v

TABLE OF AUTHORITIES

Page

Cases:

Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc.,

a GEE CITED 6 oo wien shies expe censcageceps 21

Eastern R.R. Presidents Conference v. Noerr Motor

Freight, Inc., 365 U.S. 127 (1961) .......... 6, 19, 20

FCC v. Midwest Video Corp., 440 U.S. 689

CR ds anc ok Bk ee Re wae aede ees 7, 8, 19, 21

FCC v. Pottsville Broadcasting Co.,

ee es eR E winetid eknscns annie bs bier ksies 13, 14

General Telephone of California v. FCC, 413

F.2d 390 (D.C. Cir. 1969), cert. denied, 396 U.S.

Bi aia aetna matey yale ctearins eae ae snare ry mea Py Ea 16

Gordon v. New York Stock Exchange, 422

is Bt. | eee 6, 10, 12, 14, 15, 16, 17, 18

Hughes Tool Co. v. Trans World Airlines,

ee We ce AOE ond ina Fe eae cae ss ees 10, 12, 14

Jeffrey v. Southwestern Bell, 518 F.2d 1129

IE aos iG hn de car hc Galena eee ub aes 21

Pan American World Airways, Inc. v.

United States, 371 U.S. 296 (1963) .. 10, 12, 15, 16, 17, 18

United Mine Workers v. Pennington,

ee EE oh eS cw cane eines tea 6, 20

Umited States v. Midwest Video Corp., 406

SE IE kia dd Sui hy Oa ba ue Sad ba da oe 10, 15

United States v. National Association of

Securities Dealers, 422 U.S. 694 (1975) 6, 10, 12, 14, 16, 17

United States v. Philadelphia National Bank,

eee OE os aa a bor os re 13, 14

United States v. Radio Corp. of America,

a WUE OMNI a oan Cok cok wane sSabecces veiw 12

vl

Page

United States v. Southwestern Cable Co.,

392 U.S. 157 (1968) .. 6, 8, 10, 12, 13, 14, 15, 16, 17, 18, 20

United States v. Terminal R.R. Ass’n,

ee a Ose hia se vee a4. nie wes 21

STATUTORY PROVISIONS

Cinstie: Bat 96, 16 Uae SED ois cece ce eben 3. 21,

Ce GE Sry Be Wits BE oe ie cee nce eess A

Communications Act of 1934,

as amended, 47 U.S.C. $151, et seq. ............... 8

Communications Act of 1934, 47 U.S.C. §153(a) ...... 3

Sherman Antitrust Act,

as amended, 15 U.S.C. §1, et seq. ............. 2, 5, 8,9

REGULATIONS

47 C.F oe. STA. 2101 OF pet. (1906) oi cece hence 8

Fe SP CRED. os av pele cr oba scuba Wawegus 4

ee eB a > ) a ee ee 8

Re EE a eb asf s cebag hak ew ead pan 4,5

Be te PP EUED CRIED ss oelnlxneys eS 'eeeeaaacee 5

REPORTS

First Report and Order, 38 F.C.C. 683 (1965) ........ a

Second Report and Order, 2 F.C.C. 2d 725 (1966) .... 17

PERIODICAL

Von Kalinowski, The Per Se Doctrine —

An Emerging Philosophy of Antitrust Law,

li DOSE. L Rav. GED (IGG) oo. icc ccc ewes 20

In THE

Supreme Court

of the United States

OcToBER TERM, 1980

No. 80-

Mipessa TELEVISION Company, Inc. et al,

Petitioners, ~

V.

Mip.tanp TELECASTING CoMPANY,

Respondent.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

Midessa Television Company, Inc., et al, respectfully

petition for a writ of certiorari to review the judgment of

the United States Court of Appeals for the Fifth Circuit.

OPINIONS BELOW

The opinion below is reported at 617 F. 2d 1141 (5th Cir.

1980) and is reprinted in the Appendix herein at 1-16.

The unreported order, findings of fact, and conclusions of

law of the United States District Court for the Western

District of Texas are reprinted in the Appendix herein

at 17-23.

2

JURISDICTION

The judgment of the United States Court of Appeals

for the Fifth Cireuit was dated and entered May 29, 1980.

The order denying rehearing was dated June 25, 1980.

Jurisdiction of this Court is conferred by 28 U.S.C. § 1254

(1) (1970).

CONSTITUTIONAL, STATUTORY, AND

REGULATORY PROVISIONS INVOLVED

U.S. CONST., Amend. I:

Congress shall make no law .. . abridging the freedom

of speech, or of the press; or the right of the people

peaceably to assemble, and to petition the Government

for a redress of grievances.

Sherman Antitrust Act, 26 Stat. 209, as amended, 15 U.S.C.

$l:

Every contract, combination in the form of trust or

otherwise, or conspiracy, in restraint of trade or com-

merce among the several States, or with foreign nations,

is declared to be illegal***.

Clayton Act, 38 Stat. 731, 15 U.S.C. $15:

Any person who shall be injured in his business or

property by reason of anything forbidden in the antitrust

laws may sue therefor in any 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 in

controversy, and shall recover threefold the damages by

him sustained, and the cost of suit, including a reasonable

attorney’s fee.

3

Communieations Act of 1934, 48 Stat. 1064, as amended,

47 U.S.C. §152(a) :

(a) The provisions of this chapter shall apply to all

interstate and foreign communication by wire or radio

and all interstate and foreign transmission of energy by

radio, which originates and/or is received within the

United States, and to all persons engaged within the

United States in such communication or such transmis-

sion of energy by radio, and to the licensing and regu-

lating of all radio stations as hereinafter provided; but

it shall not apply to persons engaged in wire or radio

communication or transmission in the Canal Zone, or to

wire or radio communication or transmission wholly

within the Canal Zone.

Clayton Act, 38 Stat. 731, as amended, 15 U.S.C. $18:

No corporation engaged in commerce shall acquire,

directly or indirectly, the whole or any part of the stock

or other share capital and no corporation subject to the

jurisdiction of the Federal Trade Commission shall ac-

quire the whole or any part of the assets of another

corporation engaged also in commerce, where in any line

of commerce in any section of the country, the effect of

such acquisition may be substantially to lessen competi-

tion, or to tend to create a monopoly.***

STATEMENT OF THE CASE

In 1967 Community Cablevision Company (“Cablevi-

sion”), a partnership comprised of petitioner Midessa Tele-

vision Co., Ine. and others', was formed and obtained a

‘ The partners included Midessa Television Company, Inc.;

Doubleday Broadcasting Company, Inc.; Cablecom-General

Inc.; Hodge Enterprises; and J. Howard Hodge, deceased.

4

franchise by city ordinance to operate a cable television

system in Odessa, Texas. Cablevision carried, among

others, the signals of the three area VHF network-affiliated

stations, including those of two of its venturers. Respon-

dent Midland Telecasting Company (“Midland”) was a li-

ecensee for a UHF television station in Midland, Texas.

Intermittently, from June 8, 1969 to March 16, 1971 and

again from March 26, 1973 to October 15, 1974, Midland

broadeast a signal and sporadically had its signal carried

on a cable television system in Midland, Texas.”

According to its allegations and its deposition testimony,

Midland orally requested Cablevision to carry its signal

on the cable in Odessa, expecting Cablevision to bear the

expense of employing microwave or other equipment to

transport its signal from Midland, Texas to Odessa, Texas

so that it could be received and carried. But Cablevision

failed to do so. The Federal Communications Commission

(“FCC”) regulations in effect prior to 1972 apparently did

not state the commission’s view of whether the public

interest required cable systems, upon an oral request by a

broadeaster, to incur the expense of transporting a weak

signal to the cable system. The regulations, however, did

contain procedures for presenting such policy, legal, and

factual issues for determination.®

From March 16, 1971, until March 26, 1973, Midland

ceased broadcasting. After resuming broadcasting in 1973,

Midland claims that it again requested that its signal be

added to the Odessa cable. During this period, FCC

regulations clearly prohibited the addition of television

* The Midland, Texas cable system was owned by petitioner Tall

City TV Cable Co.

3 47 C.F.R. § 74.1109 (1966) was virtually identical to 47 C.F.R.

§ 76.7 (1972), quoted in footnote 5, infra.

)

broadeast signals to cable systems without FCC approval.*

The regulations also provided means for a broadcaster to

initiate FCC proceedings to compel carriage of its signal.®

Midland claims that in November 1973 it wrote to the

FCC seeking relief, but it did not obtain any ruliug that

its signal be carried or further prosecute its petition. After

Midland’s signal became more powerful, so that large addi-

tional expense was not necessary, Cablevision secured

FCC consent and added Midland’s signal to its cable system

on May 4, 1974, shortly before it was served with the com-

plaint in this action. The signal was carried until October,

1974, during the pendency of this action, when Midland

ceased broadcasting and ceased all business activity.

In this action against Cablevision, its partners, and two

other defendants,® Midland asserts federal question juris-

diction under 28 U.S.C. $1331 and claims that defendants

violated Section 1 of the Sherman Act by failing to carry

its signal prior to May 4, 1974, and by failing previously

to seek an administrative decision for the carriage of its

signal. On motions by defendants filed following extensive

* 47 C.F.R. § 76.11(a) (1972) provided in pertinent part:

No cable television system shall . . . add a television broadcast

signal to existing operations unless it receives a certificate of

compliance from the [FCC]....

° 47 C.F.R. § 76.7 (1972) provided:

(a) On petition by a cable television system, a franchising

authority, an applicant, permittee, or licensee of a television

broadcast, translator, or microwave relay station, or by any

other interested person, the Commission may waive any

provision of the rules relating to cable television systems,

impose additional or different requirements, or issue a ruling

on a complaint or disputed question.

8 Also named as defendants were Tall City TV Cable Co. and

Comraunicable of Texas, Inc.

6

discovery, the district court dismissed the entire complaint

on various grounds.’ The trial court held that the FCC had

exclusive jurisdiction to determine, under its public interest

standard, whether a cable television system may fail to

earry particular television broadcast communications and

that it was inappropriate for a federal antitrust court to

decide such issues. The district court concluded that Con-

gress had authorized tne FCC to regulate questions concern-

ing whether, when and under what conditions signals are to

be carried by cable television systems, United States v.

Southwestern Cable Co., 392 U.S. 157 (1968), and that

under the principles of United States v. National Asso-

ciation of Securities Dealers, 422 U.S. 694 (1975), such

regulatory scheme displaces the antitrust laws as to that

discrete and limited regulated matter. Further, on the

basis of the pleadings, discovery and the full summary

judgment record before it, the district court held as a matter

of law, under the principles of Gordon v. New York Stock

Exchange, 422 U.S. 659 (1975), that Cablevision was justi-

fied in refraining from carrying Midland’s signal until FCC

approval had been obtained and, under the principles of

Eastern R.R. Presidents Conference v. Noerr Motor

Freight, Inc., 365 U.S. 127 (1961) and United Mine Work-

ers . Pennington, 381 U.S. 657 (1965), that Cablevision’s

failure to petition the FCC for a decision could not be an

antitrust violation. The trial court also concluded that Mid-

land lacked standing because its alleged injury — resulting—

* The grounds asserted in the motion were: (1) lack of jurisdiction

under the antitrust laws because of exemptions or immunities

therefrom; (2) lack of standing; (3) failure to state a claim upon

which relief could be granted; (4) defendants were entitled to

summary judgment or judgment on the pleadings as a matter

of law; and (5) alternatively, as to events or transactions

occurring during specific time periods, a failure to state a claim

or a conclusively established defense of limitations.

7

from its signal not being carried on a television communi-

cations cable for a period of time — was not of the type

against which the antitrust laws were intended to protect.

It found that Midland was not claiming damages from the

formation or franchising of Cablevision, and it granted de-

fendants’ motion for summary judgment as to the entire

case, including Midland’s claim under Section 7 of the

Clayton Act.

A two-judge panel of the United States Court of Ap-

peals for the Fifth Circuit reversed, focusing on FCC re-

gulatious and reports and reasoning that because the FCC

had not issued substantive regulations, effective at the

times of the failure to carry the signal and prohibiting

the carriage of Midland’s signal, there was i.» repug-

nancy between the FCC carriage rules and antitrust prin-

ciples. The Court of Appeals, recognizing the requirement

in the 1972 rules that a signal not be added to a cable

system until the FCC issued a certificate of compliance,

held that “there is no indication that this procedure was

onerous or that the FCC would refuse certification.” 617

F.2d, at 1149. It viewed the issue of the strength of Mid-

land’s signal to be a fact issue for the antitrust trial court

and jury rather than one for administrative expertise.

617 F.2d, at 1144, n. 6. Further, despite the trial court’s

dismissal and judgment disposing of the entire case, the

Court of Appeals held that the trial court had not con-

sidered the claim under Section 7 of the Clayton Act,

617 F.2d, at 1143-44, n. 4; and it uid not consider the issue.

Finally, although this Court’s opinion in FCC v. Midwest

Video Corp., 440 U.S. 689 (1979) was diseussed extensively

in post-argument memoranda, the Court of Appeals did not

advert to the first amendment implications of a claim that

an antitrust violation occurred when a communications me-

8

dium failed to voluntarily carry particular communications

to its viewers.

REASONS FOR ALLOWANCE OF THE WRIT

A. The Court of Appeals decided important questions

of federal law that have not been but should be settled by

this Court.

Cable television is a relatively new and mushrooming

communications medium whose impact on the lives of

Americans is significant. This Court has never had an op-

portunity to determine the extent to which the Communi-

cations Act of 1934° and the first amendment affect the

applicability, if any, of the Sherman Act® to a failure of a

cable television system to carry a particular broadcaster’s

programming.

This Court has recently recognized that cable television

systems are part of the press “media” protected in their

editorial decisions by the first amendment. FCC v. Midwest

Video Corp., 440 U.S. 689 (1979). In the Communications

Act of 1934, Congress granted the FCC broad power to

regulate communications by wire and radio; and this Court

has specifically held that such power includes the power to

regulate a cable television system’s carriage of television

signals. United States v. Southwestern Cable Co., 392 U.S.

157 (1968). The FCC has exercised such power and by

regulations provided a comprehensive body of substantive

and procedural rules for regulating, in the public interest,

the selection of television communications to be carried

by cable television systems. See 47 C.F.R. §74.1101 et seq.

(1966) ; 47 C.F.R. §76.1 et seq. (1972). The rules specify

8 48 Stat. 1064, as amended, 47 U.S.C. § 151, et seq.

® Sherman Antitrust Act, 26 Stat. 209, as amended, 15 U.S.C.

$1, et seq.

9

general standards as to when carriage of particular signals

is in the public interest and procedures for hearing and

deciding disputes on such issues. The FCC has power to

issue orders enforceable by contempt and subject to judicial

review.

However, there was no such FCC ruling that is chal-

lenged in the instant case. Here, the plaintiff Midland did

not prosecute a request to the FCC for resolution of any

such issues, but instead, after it increased the power of

its signal and as the defendant cable system with FCC

approval began carriage of its signal, Midland brought an

antitrust claim based on the non-carriage in the past. Al-

though a cable system’s carriage of broadcast television

communications is not an economic transaction involving

payment or receipt of consideration between the television

broadeaster (which has released its signal into the airways)

and the cable system (which receives the signal for its sub-

seribers), the plaintiff broadeaster here contended that the

failure to carry its signal was a “restraint of trade or

commerce” within Section 1 of the Sherman Act. Until

this case, no reported decision explored the applicability

of the Sherman Act to such communications activities of

cable television systems. ©

The application of the Sherman Act, read in light of

the first amendment and as affected by the Communica-

tions Act, to a failure by a cable television system to carry

programming of a particular broadcaster, is important

to the orderly development of the burgeoning new com-

munications medium of cable television, to the executive

branch of the federal government in its performance of the

responsibilities delegated by Congress in the Communica-

tions Act and in its enforcement of the antitrust laws, and

to the judicial branch in defining its jurisdiction in this

important area, as well as to parties having interests in

private litigation such as the instant case.

10

The record is appropriate for deciding the broad and

important legal issues involved, uncluttered with extrane-

ous factual or evidentiary disputes or issues concerning

the more technical elements of a substantive cause of action

or defense under the Sherman Act. They are pure and

broad issues of law, ripe for decision, and begging for final

authoritative resolution by this Court.

B. The Court of Appeals, in reversing the trial court,

decided the federal questions in a way in conflict with the

applicable decisions of this Court.

l. Effect of the Communications Act

In United States v. National Association of Securities

Dealers, 422 U.S. 694 (1975); Gordon v. New York Stock

Exchange, 422 U.S. 659 (1975); Hughes Tool Co. v. Trans

World Airlines, 409 U.S. 363, 379 (1973); Pan American

World Airways v. United States, 371 U.S. 296 (1963), this

Court established the standards and principles for deter-

mining whether courts should infer a congressional intent

in regulatory legislation to remove particular and discrete

regulated activities from the regime of competition as fos-

tered by the antitrust laws. Applying those principles to

the legislative intent manifested in the Communications

Act of 1934, as examined and related to cable television

systems in United States v. Southwestern Cable Co., 392

U.S. 157 (1968) and United States v. Midwest Video Corp.,

406 U.S. 649 (1972), the trial court coneluded that the FCC

had been granted exclusive jurisdiction to decide the le-

gality of a cable system’s failure to carry a television

communication; and it accordingly dismissed the antitrust

complaint and entered a summary judgment that the

plaintiff broadcaster take nothing. The Court of Appeals

reversed.

The Court of Appeals gave token recognition that con-

gressional intent should determine the existence of an

11

implied antitrust exemption or immunity applicable to

regulated activity. 617 F.2d, at 1146. However, it decided

the case without reference to congressional intent either

in 1934 when the Communications Act was enacted or in

subsequent failures of Congress to enact modifying legisla-

tion. Rather, the Court of Appeals concentrated upon the

actions of the FCC over the years in making the quasi-

political determinations of the “public interest” as to cable

system carriage of television signals. It quickly became

diverted from the issue of whether it should infer that Con-

gress, in 1934 and thereafter, had intended the FCC to be

the single governmental agency, to the exclusion of anti-

trust courts, authorized to decide the propriety of a failure

of a cable system to carry a television signal. The Court of

Appeals neither cited nor discussed this Court’s recent

decisions concerning principles of exclusive jurisdiction or

implied antitrust immunity nor did it analyze the nature

or extent of the power conferred by Congress on the FCC

to regulate cable systems. Rather, it became preoccupied

with the issue that should have been presented to the FCC

for resolution: whether the regulations declaring the “pub-

lie interest” as might have been determined by the FCC,

as of particular times, required that Midland’s program-

ming be carried on the cable in Odessa. It concluded its

analysis as follows:

In this ease, CCC [Cablevision] had not demonstrated

how FCC regulation interfered with the exercise of its

business judgment with respect to the decision whether

to carry Midland’s signal. The regulations did not pro-

hibit carriage of the signal, and, indeed may have required

it. CCC’s [Cablevision’s] refusal was not therefore com-

pelled by federal regulation. Accordingly, no repugnancy

exists between the FCC carriage rules and antitrust prin-

ciples.

12

617 F.2d, at 1141. The Court characterized its decision as a

“holding that FCC carriage rules did not operate to create

an antitrust immunity for CCC’s refusal to carry Midland’s

signal,” Jd., (emphasis added) citing the obvious, but inap-

plicable, principle mentioned in United States v. Radio

Corp. of America, 358 U.S. 334 (1959) (“RCA”) that the

FCC was not created to decide antitrust issues as such and

that its actions do not themselves prevent enforcement of

the antitrust laws in federal courts.

Both the analysis and result of the Court of Appeals con-

flict with the applicable decisions of this Court. Since estab-

lishing in 1959 in RCA that the agency action itself is not

the guidepost, this Court has subsequently made clear in

several significant cases that it is the express and inferred

legislative intent of Congress that determines whether the

regulatory agency was granted exclusive jurisdiction over

the particular activity in question. United States v. Na-

tional Association of Securities Dealers, 422 U.S. 694

(1975); Gordon v. New York Stock Exchange, 422 U.S.

659 (1975); Hughes Tool Co. v. Trans World Airlines, 409

U.S. 363, 379 (1973); Pan American World Airways v.

U.S., 371 U.S. 296, 304-05, 309-10 (1963).

Where there is no express provision on this point in the

regulatory statute, the crucial legislative intent may be

determined both from the purposes of the regulatory legis-

lation, as evidenced by legislative history, and from the

scope of the regulatory scheme as established by the legis-

lation and its authoritative constructions.

This Court explored the legislative history of the Com-

munications Act, particularly as it relates to regulation

of cable television systems, in United States v. Southwest-

ern Cable Co., 392 U.S. 157 (1968). Quoting in part from

the message to Congress from President Roosevelt, recom-

13

mending creation of the FCC, and from its prior decision

relating to radio communications, this Court there con-

cluded that

the Commission was expected to serve as the “single

Government agency” with “unified jurisdiction” and “reg-

ulatory power over all forms of electrical communication,

whether by telephone, telegraph, cable or radio.” It was

for this purpose given “broad authority.” ... [T]he

Act’s terms, purposes, and history all indicate that Con-

gress “formulated a unified and comprehensive regula-

tory scheme for the [broadcasting] industry.” F.C.C. v.

Pottsville Broadeasting Co. 309 U.S. 134, 137.

Id., at 168. Congress had acted to avoid a feared monopolis-

tic domination in the new and far-reaching science of broad-

casting. FCC v. Pottsville Broadcasting Co., 309 U.S. 134,

137 (1940). Its regulatory scheme of granting and denying

licenses and construction permits based on public con-

venience, interest, or necessity was deemed to be more ap-

propriate to avoid that feared evil than the then existing

regime of laws. See Id. The “public convenience, interest,

or necessity” criterion apparently was the most concrete

yet supple standard with which to guide the expert body in

the executive branch charged by Congress with carrying

out the broad legislative policy. Jd., at 138. In United

States v. Southwestern Cable Co., 392 U.S. 157 (1968), this

Court held that same legislative policy extended to regu-

lation of carriage of television signals by cable systems.

In addition to the legislative history, the character and

extent of the power conferred by the regulatory legislation

is instructive in inferring whether Congress intended anti-

trust courts to have any concurrent jurisdiction with the

regulatory agency. The test, as enunciated in United States

v. Philadelphia National Bank, 371 U.S. 321, 352 (1963), is

whether the regulatory scheme at issue

14

is so comprehensive that the enforcement of the anti-

trust laws would either be unnecessary, in light of the

completeness of the regulatory structure, or disruptive of

that structure.

In making this determination, this Court has focused upon

whether there is an irreconcilable conflict between the

regulatory power delegated to an agency and the judicial

power of an antitrust court over the activity in question

such that regulated parties could be subjected to duplicative

or inconsistent standards. United States v. National Asso-

ciation of Securities Dealers, 422 U.S. 694, 734-35 (1975).

Petitioners assert that there is such an irremediable conflict

here, in that the power granted the executive branch, on the

one hand, to require or forbid carriage of a signal, and the

asserted judicial power on the other, to impose treble

damages for failure to carry a signal, are mutually repug-

nant. Under these circumstances the Court of Appeals, fol-

lowing this Court’s applicable decisions, should have de-

termined, as the trial court did, that the antitrust laws

were displaced in this limited and discrete instance. United

States v. National Association of Secwrities Dealers, 422

U.S. 694 (1975); Gordon v. New York Stock Exchange, 422

U.S. 659 (1975) ; Hughes Tool Co. v. Trans World Airlines,

409 U.S. 363, 392, n. 14, (1973).

Contrary to the holding of the Fifth Circuit, enforce-

ment of the antitrust laws in the instant case is inappropri-

ate in view of both the completeness of the regulatory

power and the disruption that conflicting antitrust judg-

ments could render to the regulatory structure. United

States v. Philadelphia National Bank, 371 U.S. 321, 352

(1963). The conduct charged as an antitrust violation here

involves the precise subject matter of the regulatory power

vested in the FCC. United States v. Southwestern Cable

Co., 392 U.S. 157 (1968). See Gordon v. New York Stock

15

Exchange, 422 U.S. 659, 683-84 (1975); Pan American

World Airways v. United States, 371 U.S. 296, 305 (1963).

The FCC pervasively regulates the carriage of television

signals on cable systems, and closely monitors ongoing de-

velopments in cable communications. United States v. Mid-

west Video Corp., 406 U.S. 649 (1972).

In Southwestern Cable, this Court emphasized that per-

vasive FCC regulation of cable systems is vital to the

achievement of the purposes intended by Congress, noting

that:

The Commission has been charged with broad responsi-

bilities for the orderly development of an appropriate

system of local television broadcasting. The significance

of its efforts can scarcely be exaggerated for broadcasting

is demonstrably a principal source of information and

entertainment for a great part of the nation’s population.

The Commission has reasonably found that the success-

ful performance of these duties demand prompt and effi-

catious regulation of community antenna television

systems. We have elsewhere held that we may not ‘in the

absence of compelling evidence that such was Congress’

intention .. . prohibit administrative action imperative

for the achievement of an agency’s ultimate purposes.’

392 U.S. 157, at 177 (1968) (citations omitted). Judge

(now Chief Justice) Burger, writing for the D.C. Circuit

Court of Appeals, after analyzing the statutes and the FCC

regulations applicable to cable systems, reached a similar

conclusion as to the pervasiveness of the regulatory power

of the FCC over cable television systems:

As we view the record now before us and consider it in

light of our own holdings and the holdings of the

Supreme Court, it seems clear that as the outlines of

16

the CATV problems emerge, the Commission acted with-

in the scope of the Act and consistent with the broad

purposes of the Act by treating its responsibilities as

comprehensive and pervasive. Any other determination

would tend to fragment the regulation of a communica-

tions activity which cannot be regulated on any realistic

basis except by a central authority.

General Telephone of California v. FCC, 413 F.2d 390 (D.C.

Cir. 1969) (emphasis added), cert. denied, 396 U.S. 888

(1969).

Like the regulatory agencies involved in United States v.

National Association of Securities Dealers, 422 U.S. 694

(1975) (Securities and Exchange Commission) and Pan

American World Airways v. United States, 371 U.S. 296

(1963) (Federal Aviation Administration), the FCC was

granted by Congress the uncontested power to consider the

legal, factual, and policy issues and determine whether it

was in the public interest to authorize or require the addi-

tion of a broadeaster’s signal to the array of programming

on a cable system, as well as the power to issue orders

necessary to the execution of its function. See United

States v. Southwestern Cable Co., 392 U.S. 157, 178-79, 180

(1968). In the instant case, Midland could have presented

its dispute to the FCC and sought a decision pursuant to

the applicable standards of the public interest, convenience,

or necessity but it chose not to do so. Intrusion by an anti-

trust court into this area would be unwarranted, dupli-

cative and contrary to congressional intent.

This Court consistently has found justification for im-

plied antitrust immunity to be stronger when the agency

may consider in its decision-making the effects of competi-

tion. See Gordon v. New York Stock Exchange, 422 U.S.

659 (1975); United States v. National Association of Se-

17

curities Dealers, 422 U.S. 694 (1975) ; Pan American World

Airways v. United States, 371 U.S. 296 (1963). Particularly

in National Association of Securities Dealers, supra, this

Court found persuasive the fact that the SEC had power to

weigh competitive concerns in the exercise of its super-

visory responsibility. 422 U.S., at 732. Here, the FCC spe-

cifically is required to take competition into consideration

in making the assessment of the public interest relating to

cable television operations.”

In the instant case as in that case, the regulatory aims

determined by Congress could be thwarted by inconsistent

standards prescribed contemporaneously by antitrust courts

and the FCC. Cf. Gordon v. New York Stock Exchange,

498 F.2d 1303, 1306 (2d Cir. 1974), aff’d, 422 U.S. 659 (1975).

The congressional issuance of the broad and pervasive

mandate for the FCC to regulate in the public interest

whether and when cable television systems will carry

broadcast communications is repugnant to a notion that

such earriage decisions should result from unbridled free

competition.

Congress intended to rely upon the FCC’s expertise in

the field of cable television. United States v. Southwestern

Cable Co., 392 U.S. 157 (1968). This Court has opined that

10 This Court noted in United States v. Southwestern Cable Co., 392

U.S. 157, 175 n. 43-44 that as early as 1959, Congress was con-

cerned with the competitive effects cable television had on the

orderly development of television and that such concern led to

the promulgation of signal carriage restrictions. See First Report

and Order, 38 FCC 683 (1965); Second Report and Order, 2

FCC2d 725 (1966). In its First Report and Order respecting

cable television, the Commission found that cable television

creates “substantial competition” for local broadcasting and

that “the likelihood or probability of [cable television’s] adver-e

impact upon potential and existing services has become too sub-

stantial to be dismissed.” 38 FCC 683, 707, 713-14 (1965).

18

the existence of such reliance upon agency expertise sug-

gests a finding of implied antitrust immunity. Gordon v.

New York Stock Exchange, 422 U.S. 659, 689-90 (1975).

Antitrust courts are without the expertise of the FCC to

evaluate the dynamic and technical aspects of cable tele-

vision (including the varying effective power of broadcast

signals which the Court of Appeals here thought should be

“fact issues” in an antitrust trial), or to render compre-

hensive “public interest” policy judgments for the orderly

development of a national! network of television communi-

cations. If the congressional intent is to be implemented,

the FCC must be permitted to regulate, comprehensively

and without interference, questions concerning whether,

when, and under what conditions broadcast television

communications are to be carried on cable television sys-

tems. United States v. Southwestern Cable Co., 392 U.S.

157 (1968).

It seems apparent that the FCC cannot effectively im-

plement congressional intent to establish a coordinated

national communications policy if its decisions whether

communications should be carried on a cable system are

subject to contradictory judgments of antitrust courts. As

this Court reasoned in Pan American World Airways v.

United States, 371 U.S. 296, 310 (1963) :

if the courts were to intrude independently with their

construction of the antitrust laws, two regimes might

collide.

371 U.S., at 310.

The opinion of the Fifth Cireuit will foster such a col-

lision of the two regimes. The resolution of this question

of first impression will prevent such a collision of antagon-

istic jurisdictions, and thereby will promote the public in-

terest.

19

2. Effect of the First Amendment

There are other significant reasons why the antitrust laws

do not apply to a failure, for a time, by a cable television

system to carry a broadeaster’s signal. First, as pointed out

in FCC v. Midwest Video Corp., 440 U.S. 689, 709, n. 19

(1979), there are significant constitutional implications of

any ruling that a cable television system (a part of the

“media”) is or was required to carry program material

over which it had no editorial discretion or control. In that

ease, however, this Court found in the Communications Act

itself sufficient statutory indications of congressional in-

tent to safeguard the journalistic freedom and editorial

discretion of cable television systems and to invalidate the

FCC’s public access rules. That same congressional intent

like its parallel constitutional inspiration in the first

amendment is further instructive upon whether the anti-

trust laws apply to a failure of a cable system to carry a

particular signal or its failure to seek necessary adminis-

trative consent for such carriage. It is well established °

that the Sherman Act must be construed and interpreted

in ways that will preclude its infringement upon constitu-

tional rights. E.g. Eastern R.R. Presidents Conference v.

Noerr Motor Freight, Inc., 365 U.S. 127, 187-38 (1961).

Here, the plaintiff’s complaint is that the defendants vio-

lated the Sherman Act by failing to carry a signal whose

editorial content was controlled exclusively by the plaintiff

itself. However, the Court of Appeals did not even men-

tion or consider the constitutional implications of its ruling.

The defendants contend that, as a matter of law, their

failure to seek from the FCC an administrative decision

on the question of carriage could not be an antitrust

violation. Just as a concerted attempt to influence legis-

lative or executive governmental action is constitutionally

protected from antitrust scrutiny, Eastern Railroad Pres-

20

idents Conference v. Noerr Motor Freight, Inc., 365 U.S.

127 (1961); United Mine Workers v. Pennington, 381 U.S.

657 (1965), they contend that their failure to seek action

by the FCC could not be a violation of the Sherman Act.

The Court of Appeals merely held in a footnote, that a

failure or refusal to attempt to influence the FCC does

not enjoy the same constitutional protection as an attempt

to influence it.

The case should at least be remanded for consideration

of the constitutional issues.

3. Application of Antitrust Principles

The Court of Appeals failed fully to consider the bases

of the district court’s dismissal of the complaint and

erroneously stated that the challenged inactivity of Cable-

vision could state an antitrust claim as a group boycott

or the denial of access to essential services. Petitioners

respectfully urge that Respondent failed to state a claim

under any potential theory of antitrust liability.

Contrary to the suggestion of the Court of Appeals, the

failure of Cablevision to carry Midland’s television com-

munications cannot, as a matter of law, constitute a “group

boycott.” The term “group boycott” connotes “a refusal

to deal or an inducement of others not to deal or to have

business relations with tradesmen.” Von Kalinowski, The

Per Se Doctrine — An Emerging Philosophy of Antitrust

Law, 11 U.C.L.A. L. Rev. 569, 580, n.49 (1964). In the

instant case, there was no refusal or inducement of others

to refuse to trade or enter into any business transactions.

Rather, Midland merely alleged that Cablevision failed to

carry to its subscribers Midland’s broadcast signal that

was free for the taking by the public. See United States v.

Southwestern Cable Co., 392 U.S. 157, 161-62 (1968). Such

inactivity simply does not constitute a “group boycott.”

21

The Court of Appeals further opined that the failure to

earry Midland’s signal might constitute a “denial of access

to essential services.” Neither the decision cited by the

Court of Appeals, United States v. Terminal R.R. Ass’n.,

224 U.S. 383 (1912), nor any other authority of which

petitioners are aware, supports or even suggests such a

theory of antitrust law. Indeed, a holding that Cablevision

was required to carry Midland’s signal would, in effect,

contrary to congressional intent, render it a “common

earrier.” Cf. FCC v. Midwest Video Corp., 440 U.S. 689

(1979).

Particularly in light of the Communications Act and the

first amendment, the antitrust laws are not intended to

protect television broadcasters from failure of cable sys-

tems to carry their signals. When it alleged injury from

such a failure, Midland did not allege injury resulting

from “anything forbidden in the antitrust laws”, 15 U.S.C.

§15, and thus, it lacked standing. Brunswick Corp. v. Pueblo

Bowl-O-Mat, Inc., 429 U.S. 477 (1977). Similarly, since

Congress created the FCC to stand between broadcasters

and eable systems as the regulator of cable carriage of

broadeast signals, a broadcaster lacks standing under the

antitrust laws to complain of a failure to carry its signa!.

See Jeffrey v. Southwestern Bell, 518 F.2d 1129 (5th Cir.

1975).

Thus, the Court of Appeals has erroneously decided

questions of the applicability of the Sherman Act to the

inactivity of which petitioners are accused; and its ruling

is in conflict with applicable decisions of this Court.

C. The Court of Appeals, in denying that the trial court

ruled on the Section 7 claim, so departed from the accepted

and usual course of judicial proceedings as to require exer-

cise of this Court’s power of supervision.

The trial court granted a summary judgment of dismis-

sal of the entire case. In the findings of fact and conclu-

22

sions of law the district court found that Midland did not

claim any antitrust injury by reason of the conception or

creation of Cablevision or by reason of its seeking or secur-

ing a franchise to operate in Odessa. This is patentiy ob-

vious since Midland’s complaint was not of the existence

and operation of the cable system; its complaint was of the

delay of the cable in carrying its signal. It had admitted

this to the trial court. Nevertheless, despite this finding and

admission and the dismissal of the entire case, the Court

of Appeals stated in a footnote, that the district court had

not ruled on the applicability of Section 7 of the Clayton

Act to the facts.

The opinion in this regard is blatantly incorrect. By so

misstating the obvious and express facts and lower court

holding, the Court of Appeals has so far departed from

the accepted and usual course of judicial proceedings as

to call for an exercise of this Court’s power of supervision.

At least a writ of certiorari should be issued and the case

remanded to the Court of Appeals for consideration of

the Section 7 aspects of the trial court’s dismissal of the

entire case.

23

CONCLUSION

Petitioners respectfully urge the Court to grant a writ

of certiorari, to reverse the decision below, and to remand

the case to the United States Court of Appeals for the

Fifth Cireuit with appropriate instructions.

Respectfully submitted,

JaMEs A. FXLLIs, JR.

GrorGce M. Kryper, IIT

CaRRINGTON, COLEMAN, SLOMAN

& BLUMENTHAL

2500 South Tower

Plaza of the Americas

Dallas, Texas 75201

Attorneys for Petitioners

A-1

APPENDIX

MipLanp TELECASTING COMPANY,

Plaintiff- Appellant,

v.

Mipessa TEeLEvision Company, INc., et al.,

Defendants-Appellees.

No. 78-2515.

United States Court of Appeals,

Fifth Circuit.

May 29, 1980.

Appeal from the United States District Court for the

Western District of Texas.

Before TUTTLE,* AINSWORTH and SAM D. JOHN-

SON, Cireuit Judges.

AINSWORTH, Circuit Judge:

This is an antitrust suit brought by a UHF television

station against a cable television company and its co-own-

ers alleging that its refusal to carry plaintifi’s UHF signal

on its cable violated the antitrust laws.’ The district court

granted defendants’ motion for summary judgment pri-

marily on the ground that federal regulation of cable tele-

vision created an implied immunity from the effect of the

antitrust laws. We reverse.

* Judge Tuttle did not participate in either the consideration or

determination of this case.

1 Suit was also brought against two companies involved in the

operation of broadcasting in nearby communities but who were

not co-owners of the cable company.

A-2

Plaintiff Midland Telecasting Company (Midland) oper-

ated a UHF television station from Midland, Texas. It

broadcast on Channel 18 from June 8, 1969 to March 16,

1971 and from March 26, 1973 to October 15, 1974.

In 1967, defendant Community Cablevision Company

(CCC) was created for the purpose of operating a commun-

ity antennae television (CATV) system in nearby Odessa,

Texas. CCC was a joint venture by defendants Midessa

Television Company (Midessa), Doubleday Broadcasting

Company (Doubleday), Hodge Enterprises, J. Howard

Hodge, and Cablecom-General, Inc. Both Midessa and

Doubleday were direct competitors with Midland. Midessa

operated a VHF station, affiliated with NBC, located he-

tween Midland and Odessa. Doubleday operated another

network-affiliated VHF station located in Odessa. In 1968,

CCC was granted an exclusive franchise by the City of

Odessa to operate a CATV or cable system in Odessa. CCC

carried the signals of the three VHF stations serving the

Midland-Odessa area including the signals of the two VHF

stations owned by joint venturers Midessa and Doubleday.’

By the end of 1971, a significant portion of the homes in

Odessa subscribed to CCC’s cable system.

In its complaint,’ Midland alleged that from 1969 until

the filing if this suit in 1974, CCC refused to carry Mid-

land’s signal on its cable despite repeated requests to do

so, and that the refusal was designed to eliminate Midland

* Besides the stations owned by defendants Midessa and Double-

day, CCC carried the third VHF station operating in the Mid-

land-Odessa area. That station was not involved in the CCC

joint venture.

3 The allegations are set forth in Midland’s Third Amended Com-

plaint filed August 9, 1976 (R. 647). Midland moved for leave to

file a Fourth Amended Complaint. After hearing oral argument,

A-3

from the Midland-Odessa television broadcasting market.

As a result, it is averred that Midland could not become a

“commercially viable enterprise” or obtain network affil-

iation, and was forced to halt broadcasting from March

1971 until March 1973 and later from October 1974 until

the present time. Thus, Midland alleged that from 1969

until 1974, the defendants engaged in a continuing combi-

nation and conspiracy to restrain competition in the tele-

vision broadcasting~industry in the Midland-Odessa mar-

ket in violation of section 1 of the Sherman Act, 15 U.S.C.

§ 1.4 Midland sought treble damages pursuant to section 4

of the Clayton Act, 15 U.S.C. § 15, as well as injunctive

relief and attorney’s fees.

The district court granted defendant Midessa’s motion to

dismiss and for summary judgment on the basis of findings

of fact and conclusions of law prepared by counsel for Mi-

dessa.> While the district court relied on a number of

grounds, it primarily found that (1) Midland lacked stand-

the district court did not rule on the motion prior to entering its

order dismissing the action.

* Midland also claimed that the formation of CCC by Midland’s

competitors constituted a violation of section 7 of the Clayton

Act, 15 U.S.C. § 18. The district court did not rule on the

applicability of section 7 to the facts alleged in this suit, and

accordingly this issue is not presented on appeal. Midland’s

Fourth Amended Complaint raised claims based on section 2

of the Sherman Act, 15 U.S.C. § 2. Since the district court did

not rule whether Midland could file its amended complaint, the

section 2 claim is also not raised on appeal.

5 A district court’s acceptance of the findings of fact and conclu-

sions of law prepared by the prevailing party to a suit, while not

prohibited, should be discouraged since it leaves the reviewing

court with doubt concerning the actual basis of the trial judge’s

decision. See Amstar Corp. v. Domino’s Pizza, Inc., 615 F.2d

252, 257-258 (5th Cir. 1980).

A-4

ing to assert the claim, and (2) defendants were immune

from antitrust scrutiny by virtue of federal regulation over

cable television. We discuss these points in order.

8 Three other issues raised by the district court’s decision do not

require extended discussion.

First, appellees argue that CCC’s refusal to carry Midland’s

signal is protected by the Noerr-Pennington doctrine because

CCC would have had to obtain FCC approval in order to

carry the signal. See Eastern Railroad Presidents Conference v.

Noerr Motor Freight, Inc., 365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d

464 (1961); United Mine Workers v. Pennington, 381 U.S. 657,

85 S.Ct. 1585, 14 L.Ed.2d 626 (1965). The basis of the doctrine

is the “need to protect efforts directed to government officials

for the purpose of seeking redress.” Mid-Texas Communications

Systems, Inc. v. AT&T, 615 F.2d 1372, 1382 (Sth Cir. 1980).

Here, appellees do not claim that they did anything designed

to influence the FCC directly, but rather that they are entitled

to Noerr-Pennington protection for failing or refusing to bring

an administrative proceeding. As such, there was no effort to

influence governmental action within the meaning of the doc-

trine. Cf. Mid-Texas Communications, 615 F.2d at 1384.

Appellees also argue that the district court’s decision should

be affirmed because there was no issue of material fact. In similar

circumstances, the Supreme Court has stated that “summary

procedures should be used sparingly in complex antitrust litiga-

tion where motive and intent play leading roles, the proof is

largely in the hands of the alleged conspirators, and hostile

witnesses thicken the plot . . . Trial by affidavit is no substitute

for trial by jury which so long has been the hallmark of ‘even

handed justice.’” Poller v. CBS, 368 U.S. 464, 473, 82 S.Ct. 486,

491, 7 L.Ed.2d 458 (1962). See Norfolk Monument Co. v. Wood-

lawn Memorial Gardens, Inc., 394 U.S. 700, 89 S.Ct. 1391, 22

L.Ed.2d 658 (1969); Dailey v. Quality School Plan, Inc., 380

F.2d 484, 486 (5th Cir. 1967). Here, contrary to the district

court’s resolution, it is clear that there exist several issues of

material fact. Foremost is the motive and intent of the appellees

in refusing Midland’s requests to have its signal carried. The

fact that Midland does not have any direct evidence of im-

A-5

|

1. STANDING

Standing for damage actions under the antitrust laws is

controlled by section 4 of the Clayton Act which grants

standing to “any person who shall be injured in his business

or property by reason of anything forbidden in the anti-

trust laws. ...” 15 U.S.C. § 15. See 2 P. Areeda & D. Turner,

Antitrust Law § 334a (1978). The allegations in this case

are clearly sufficient to afford Midland standing. Midland

alleged injury in fact to its business in that it lost adver-

tising revenues and was forced to stop broadcasting because

of CCC’s refusal to carry its signal. Antitrust liability is

based upon the theory that defendants either took part in

a group boycott, see Klor’s, Inc. v. Broadway-Hale Stores,

Inc., 359 U.S. 207, 79 S.Ct. 705, 3 L.Ed.2d 741 (1959), or

acted in concert to refuse access to an essential facility,

proper motive is not determinative as the Supreme Court made

clear in Poller. Appellees’ asserted defense that Midland’s sig-

nal was too weak to be carried, while it may present an adequate

defense at trial, cf. E. A. McQuade Tours, Inc. v. Consolidated

Air Tour Manual Committee, 467 F.2d 178 (5th Cir. 1972),

must be proven first and the quality of Midland’s signal is dis-

puted. Accordingly, summary judgment was not warranted since

issues of material fact existed which should be resolved by a

jury.

Finally, appellees contend that Midland cannot collect any

damages for the period from March 16, 1971 to March 26, 1973

since Midland was not then broadcasting a signal. But if ap-

pellees’ alleged illegal conduct was the proximate cause of Mid-

land’s inability to broadcast, appellant is entitled to recover lost

profits even though it was not broadcasting. See Terrell v.

Household Goods Carriers’ Bureau, 494 F.2d 16, 23-24 (5th Cir.

1974). See generally Note, Private Treble Damage Antitrust

Suits: Measure of Damages for Destruction of All or Part of a

Business, 80 Harv.L.Rev. 1566 (1967). The question whether ap-

pellees’ actions were responsible for Midland’s failure to broad-

cast, and if so, what damages, if any, were sustained, are issues

of fact to be resolved by the jury.

A-6

see United States. v. Terminal Railroad Association, 224

U.S. 383, 32 S.Ct. 507, 56 L.Ed. 810 (1912). As such, the

alleged injury is the type which if proven the antitrust

laws seek to prevent. Finally, the injury is alleged to be

the direct result of defendants’ unlawful conduct.

The district court’s reliance on Brunswick Corp. v. Pueb-

lo Bowl-O-Mat, Inc., 429 U.S. 477, 97 S.Ct. 690, 50 L.Ed.2d

701 (1977) and Jeffrey v. Southwestern Bell, 518 F 2d 1129

(5th Cir. 1975) on the issue of standing is misplaced. In

Brunswick, operators of bowling alleys sought damages

for profits allegedly lost when defendant unlawfully ac-

quired certain unprosperous alleys and operated them itself

instead of permitting them to fail. The Supreme Court

denied recovery since plaintiffs had failed to demonstrate

“injury of the type the antitrust laws were intended to

prevent and that flows from that which makes defendants’

acts unlawful.” Brunswick, 429 U.S. at 489, 97 S.Ct. at 697.

It is clear that in the present case the injury alleged flows

directly from defendants’ group boycott or refusal to deal.

In Jeffrey, residential telephone subscribers challenged

Bell’s equipment policies of buying only from its wholly-

owned subsidiary. This court held that Bell’s retail custo-

mers were not the “target” of the alleged monopolistic

practices and therefore did not have standing since they

could not “adequately vindicate the purposes of the anti-

trust laws.” Jeffrey, 518 F.2d at 1131. The court stated

that antitrust standing should be granted to that “sector

of the economy which is endangered by a breakdown of

competitive conditions in a particular industry.” Jd. Mid-

land, under the allegations in its complaint, was the target

of the conspiracy and as such is an adequate representative

of that sector of the economy which is threatened by the

alleged anticompetitive acts of the defendants. As such,

Midland has standing under section 4.

A-7

2. IMPLIED IMMUNITY

It is undisputed that the Federal Communications Act

of 1934 (the Act), 47 U.S.C. § 151 et seq., does not explic-

itly provide an exemption from the antitrust laws for a

eable television company’s decision as to which signals it

will carry.” The district court, however, held that the exist-

ence of Federal Communication Commission’s (FCC)

regulation concerning carriage of signals by cable systems

created an implied immunity from the antitrust laws for

CCC’s refusal to carry Midland’s signal.

The Supreme Court has held that “[rJepeals of the

antitrust laws by implication from a regulatory statute

are strongly disfavored, and have only been found in cases

of plain repugnancy between the antitrust and regulatory

provisions.” United States v. Philadelphia National Bank,

374 U.S. 321, 350-51, 83 S.Ct. 1715, 1734-35, 10 L.Ed.2d

915 (1963) (footnotes omitted). See Cantor v. Detroit Edi-

son Co., 428 U.S. 579, 595-98, 96 S.Ct. 3110, 3120, 49 L.Ed.

2d. 1141 (1976). Judicial unwillingness to imply an immu-

nity reflects the importance of antitrust principles in the

structure of the American economy. By enacting the anti-

trust laws, Congress intended to “establish a regime of com-

petition as the fundamental principle governing commerce

in this country.” City of Lafayette v. Louisiara Power &

Light Co., 435 U.S. 389, 398, 98 S.Ct. 1123, 1129, 55 L.Ed.2d

364 (1978) (footnote omitted). See Carnation Co. v. Pacific

™ The Communications Act provides explicit exemptions from the

antitrust laws only for telephone company consolidations and

acquisitions. 47 U.S.C. §§ 221(a), 222(c)(1). The existence of

an explicit exemption covering certain acts is evidence that

Congress did not intend to grant immunity to other acts not

covered by the explicit exemptions. See, e.g., California v. FPC,

369 U.S. 482, 485, 82 S.Ct. 901, 904, 8 L.Ed.2d 54 (1962); Cain

v. Air Cargo, Inc., 599 F.2d 316, 320 (9th Cir. 1979).

A-8

Westbound Conference, 383 U.S. 213, 218, 86 S.Ct. 781, 784,

15 L.Ed.2d 709 (1966). Accordingly, antitrust immunity

will be implied only if necessary to permit the regulatory

scheme to function, and then only to the “minimum extent

necessary.” Silver v. New York Stock Exchange, 373 U.S.

341, 357, 83 S.Ct. 1246, 1257, 10 L.Ed.2d 389 (1963). See

Mid-Texas Communications Systems, Inc. v. AT&T, 615

F.2d 1372, 1379 (5th Cir. 1980).

The starting point for determining the existence of an

implied immunity is the intent of Congress. United States v.

Borden Co., 308 U.S. 188, 198, 60 S.Ct. 182, 188, 84 L.Ed.

181 (1939). The Act does not explicitly provide for FCC

authority to regulate cable television since in 1934 when it

was passed Congress did not anticipate the development

of cable technology. With the advent of the cable systems

during the 1950s, the FCC studied possible regulatory re-

sponses to the potential conflict between cable and television

broadeasting. In 1959, the FCC concluded that since cable

operators were neither common carriers nor broadcasters

within the meaning of the Act, it has no authority to regu-

late them. CATV and TV Repeater Services, 26 F.C.C.

403 (1959). After an unsuccessful attempt to obtain clarify-

ing legislation from Congress, the FCC reversed its position

and asserted jurisdiction over cable broadcasting. Carter

Mountain Transmission Corp., 32 F.C.C. 459 (1962), aff'd,

321 F.2d 359 (D.C.Cir. 1962), cert. denied, 375 U.S. 951, 84

S.Ct. 442, 11 L.Ed.2d 312 (1963). In 1966, the FCC issued a

comprehensive order setting forth regulations for the indus-

try. Second Report and Order, 2 F.C.C.2d 725 (1966). See

generally Smith, Primer on the Regulatory Development of

CATV (1950-72), 18 Howard L.J. 729 (1975). See also D.

LeDue, Cable Television and the FCC: A Crisis in Media

Control (1973).

A-9

The Supreme Court upheld the FCC’s general authority

to regulate cable television in United States v. Southwestern

Cable Co., 392 U.S. 157, 88 S.Ct. 1994, 20 L.Ed.2d 1001

(1968). Despite the lack of explicit authorization, the Court

based its decision on the fact that Congress had granted

the FCC broad authority over “all interstate and foreign

communication by wire or radio .. .” 47 U.S.C. §152(a).

Southwestern Cable, supra, 392 U.S. at 167-68, 88 S.Ct.

at 2000. See United States v. Midwest Video Corp., 406 U.S.

649, 92 S.Ct. 1860, 32 L.Ed.2d 390 (1972). The FCC’s power

over cable television, however, is not unlimited. The FCC

ean regulate cable television only where its regulations are

“reasonably ancillary to the effective performance of [its]

various responsibilities for the regulation of television

broadeasting.” Southwestern Cable, 392 U.S. at 178, 88

S.Ct. at 2005. See Brookhaven Cable TV, Inc. v. Kelly,

573 F.2d 765, 767 (2d Cir. 1978) (FCC may regulate cable

systems if it furthers a “goal which [the FCC] is entitled

to pursue in the broadeast area”), cert. denied, 441 U.S.

904, 99 S.Ct. 1991, 60 L.Ed.2d 372 (1979). Thus, the Su-

preme Court recently rejected an effort by the FCC to

compel cable systems to provide common carriage of public-

originated transmissions because doing so would convert

eable broadcasters into common carriers which is incon-

sistent with FCC authority over broadcasting. FCC v. Mid-

west Video Corp., 440 U.S. 689, 99 S.Ct. 1435, 59 L.Ed.2d

692 (1979). See Home Box Office v. FCC, 567 F.2d 9

(DC.Cir. 1977), cert. denied, 484 U.S. 829, 98 S.Ct. 111, 54

L.Ed.2d 89 (1977). See generally Comment, FCC Authority

Over Cable Television, 1979 Wise.L.Rev. 962.

An examination of FCC regulation concerning carriage

access rules for cable systems in effect during the period

1969-1974 shows that CCC was not prevented from carry-

ing Midlanl’s signal by reason of regulatory constraints.

A-10

Until 1972, carriage access requirements were covered by

the FCC’s Second Report and Order, 2 F.C.C.2d 725 (1966)

[1966 Rules]. Cable companies were required to carry the

signals of any local broadcast station. 1966 Rules 2 F.C.C.2d

at 752-53. They were not permitted to import distant sig-

nals into the nation’s 100 largest television markets. 1966

Rules, 2 F.C.C.2d at 782. The FCC also provided for certain

restrictions to minimize duplication of programming. 1966

Rules, 2 F.C.C.2d at 747. None of the restrictions estab-

lished by the 1966 Rules was applicable to Midland’s signal.

Accordingly, while it is not clear whether Midland was a

local broadcaster in the Odessa community so that its signal

would have been required to be carried, it is certain that

the 1966 Rules did not prohibit CCC’s carriage of Midland’s

signal. Moreover, under the 1966 Rules, there was no re-

quirement that a cable system obtain FCC approval prior

to carrying a station’s signal. The cable company simply had

to notify the station and the FCC of its action. 1966 Rules,

2 F.C.C.2d at 803-04 (§ 74.1105).

The carriage rules were amended in 1972. Cable Tele-

vision Report and Order, 36 F.C.C.2d 141 (1972) [1972

Rules]. The FCC divided television markets by size and

promulgated rules for each type market. Since the Midland-

Odessa market was not one of the top 100 television mar-

kets, the “smaller television market” rules were applicable

to CCC. 1972 Rules, 36 F.C.C.2d at 214 (§ 76.5(i)). As a

general matter, the FCC carriage provisions were designed

to assure that all “local” stations were carried on a cable

system. 1972 Rules, 36 F.C.C.2d at 173. “Local” was defined

to include signals of stations within 35 miles of the cable

system. The 35-mile provision was especially designed to

aid in the development of UHF stations. As the FCC stated

in its report:

All cable systems must carry, on request, the signals of

all stations licensed to communities within 35 miles of the

A-11

eabl system’s community. This requirement, based on

policy considerations similar to those underlying existing

carriage rules, is intended to aid stations — generally

UHF — whose Grade B contours are limited. In this

manner less powerful stations will be able to compete

with more powerful stations in the same market more

effectively than they could under our old carriage rules;

they will be capable of extending their coverage into the

area that we have determined is generally necessary for

the development of broadcasting stations.

1972 Rules, 36 F.C.C.2d at 174 (footnote omitted). The

1972 Rules also changed the notification requirement re-

lating to a cable system adding a signal. Specifically, the

new rule provided that “[nJo cable television system shall

commence operations unless it receives a certificate of com-

pliance from the Commission.” 1972 Rules, 36 F.C.C.2d at

217 (§ 76.11(a)). As with the 1966 Rules, nothing in the

FCC regulations prohibit carriage of Midiand’s signal.®

A cable broadeaster’s selection of signals to be carried

on its cable is significant. The array of stations offered to

’ The rules promulgated by the FCC for smaller television

markets are as follows:

§ 76.59 Provisions for smaller television markets.

A cable television system operating in a community located in

whole or in part within a smaller television market, as defined

in § 76.5, shall carry television broadcast signals only in accord-

ance with the following provisions:

(a) Any such cable television system may carry or, on request

of the relevant station licensee or permittee, shall carry the sig-

nals of:

(1) Television broadcast stations within whose specified

zone the community of the system is located, in whole or in

part;

A-12

potential subscribers is one of the primary selling points

of the cable system. Accordingly, the cable company’s deci-

sion on which stations to carry is an important exercise of

its business judgment. Ordinarily, the cable company might

base its decision on a variety of business reasons including

the station’s broadcast offerings or the projected viewing

preferences of the cable’s subscribers. As the Supreme

Court has recognized, the mere fact that a business decision

is subject to a degree of regulatory control does not auto-

matically result in an antitrust immunity. Otter Tail Power

Co. v. United States, 410 U.S. 366, 93 S.Ct. 1022, 35 L.Kd.2d

359 (1973). In this ease, CCC has not demonstrated how

FCC regulation interfered with the exercise of its business

judgment with respect to the decision whether to carry Mid-

land’s signal. The regulations did not prohibit carriage of

(2) Noncommercial educational television broadcast stations

within whose Grade B contours the community of the system

is located, in whole or in part;

(3) Commercial television broadcast stations licensed to

communities in other smaller television markets within whose

Grade B contours the community of the system is located, in

whole or in part;

(4) Television broadcast stations licensed to other com-

munities which are generally considered to be part of the

same smaller television market (Example: Burlington, Ver-

mont-Plattsburgh, New York television market);

(5) Television translator stations, with 100 watts or higher

power, licensed to the community of the system;

(6) Commercial television broadcast stations that are signifi-

cantly viewed in the community of the system. See § 76.54.

36 F.C.C.2d at 230-31. Under these rules, CCC may have been

required to carry Midland’s signal. Resolution of this point

depends on certain factual questions which are best resolved on

remand.

A-13

the signal, and, indeed, may have required it. CCC’s refusal

was not therefore compelled by federal regulation. Accord-

ingly, no repugnancy exists between the FCC carriage rules

and antitrust principles. If the refusal violated antitrust

laws, a finding of liability would not undermine or conflict

with the regulatory scheme. Given the FCC’s policy to pro-

mote UHF broadcasting, the regulatory and antitrust prin-

ciples are, in fact, complementary.

In holding that FCC carriage rules did not operate to

create an antitrust immunity for CCC’s refusal to carry

Midland’s signal, we are guided by the Supreme Court’s

decision in United States v. RCA, 358 U.S. 334, 79 S.Ct. 457,

3 L.Ed.2d 354 (1959). In RCA, the United States brought

suit alleging that RCA violated the antitrust laws by coer-

cing another company to exchange television stations with

it. RCA defended on the ground that the exchange had been

considered and approved by the FCC. The Court held that

neither the general provisions of the Communications Act

nor the specific actions of the FCC served to create an anti-

trust immunity for the acts complained of by the govern-

ment. “Thus, the legislative history of the Act reveals that

the Commission was not given the power to decide anti-

trust issues as such, and that Commission action was not

intended to prevent enforcement of the antitrust laws in

federal courts.” RCA, supra, 358 U.S. at 346, 79 S.Ct. at

464. Indeed, numerous courts have refused to imply anti-

trust immunity in a number of factual circumstances involv-

ing federal regulation over the communications industry.

See, e. g., Mid-Texas Communications, supra 615 F.2d at

1377; Essential Communications Systems, Inc. v. AT&T,

610 F.2d 1114, 1116-24 (3d Cir. 1979); International Tele-

phone & Telegraph Corp. v. General Telephone & Elec-

tronics Corp., 518 F.2d 913, 934 (9th Cir. 1975) ; Jarvis, Inc.

v. AT&T, 481 F.Supp. 120, 123 (D.D.C.1978): MCI Com-

munications Corp. v. AT&T, 462 F.Supp. 1072, 1089-96

A-14

(N.D.111.1978) ; United States v. AT&T, 461 F.Supp. 1314,

1320-30 (D.D.C. 1978).°

Appellees argue that before Midland’s signal could be

added to the cable it was necessary for CCC to file a state-

ment with the FCC, and that this filing procedure acted to

ereate an antitrust immunity. The argument is without

merit. Under the 1966 Rules, CCC only had to notify the

station and the FCC of its intention to add the signal. While

the 1972 Rules required the FCC to issue a certificate of

compliance prior to CCC being able to add the signal, there

is no indication that this procedure was onerous or that the

FCC would refuse certification.” In essence, the certifica-

® Appellees seek to distinguish RCA on the ground that in that

10

case the Supreme Court was considering antitrust immunity

within the confines of the FCC’s regulatory authority under

Title III of the Communications Act concerning regulation of

broadcasting whereas FCC authority over cable televisions

arises from Title I of the Act. This argument is incorrect. First,

the Supreme Court decisions in United States v. Southwestern

Cable Co., 392 U.S. 157, 88 S.Ct. 1994, 20 L.Ed.2d 1001 (1968),

and FCC v. Midwest Video Corp., 440 U.S 689, 99 S.Ct. 1435, 59

L.Ed.2d 692 (1979), hold that while the FCC general authority

over cable broadcasting arises from Title I, its specific authority

is exercised in conjunction with its authority over broadcasting

under Title III. As such, the RCA decision is directly relevant.

Moreover, appellees have failed to demonstrate the significance

of a holding that FCC authority arises under Title I. Cases con-

cerning Title II and the FCC’s regulation over common carriers

have also refused to find antitrust immunities. See, e. g., Mid-

Texas Communications Systems, Inc. v. ATT, 615 F.2d 1372

(5th Cir. 1980); MCI Communications Corp. v AT&T, 462

F.Supp. 1072, 1978-1084 (N.D.III.1978). Accordingly, since the

issue is not relevant to our ultimate determinations, we need not

resolve whether the question of antitrust immunity must be con-

sidered within the confines of Title I or Title III.

The FCC description of the procedure indicates the pro forma

nature of the certificate requirement:

A-15

tion requirement was analogous to a licensing requirement.

The RCA decision makes clear that the FCC’s licensing

power does not, in and of itself, confer antitrust immunity.

RCA, supra, 358 U.S. at 348-52, 79 S.Ct. at 466-68.

Appellees also argue that they should not be subject to

antitrust liability given the fact that Midland could have

brought an action before the FCC to compel carriage. This

contention is also without merit. There is no requirement

that an antitrust plaintiff exhaust administrative remedies

as a prerequisite to bringing an antitrust suit. Mid-Texas

Communications, supra, 615 F.2d 1380 (plaintiff permitted

to prosecute antitrust action for wrongful failure of tele-

phone company to interconnect its long-distance facilities

despite existence of procedure under Communications Act

Absent special situations or showings, requests consistent with

our rules will receive prompt certification. The rules will operate

on a “go, no-go” basis —i. e., the carriage rules reflect our de-

termination of what is, at this time, in the public interest with

respect to cable carriage of local and distant signals. We will,

of course, consider objections to signal carriage applications and

have retained special relief rules, but those seeking signal car-

riage restrictions on otherwise permitted signals have a sub-

stantial burden. Before restrictions are imposed in such cases,

there will have to be a clear showing that the proposed service is

not consistent with the orderly integration of cable television

service into the national communications structure and that the

results would be inimical to the public interest. We have during

the course of this proceeding fully considered the question of

impact on local television service and we do not expect to re-

evaluate that general question in individual cases. And, for the

same reason, we have no intention of re-evaluating on request of

cable systems in individual proceedings the general question

settled in our carriage and exclusivity rules Rather, we strongly

believe that cable systems must generally operate under these

rules and that, only after meaningful experience, will we be in

position for a general reassessment. 2 F.C.C.2d at 186-87.

A-16

whereby plaintiff could have compelled interconnection).

See RCA, supra, 358 U.S. at 352, 79 S.Ct. at 468; Carnation,

supra, 383 U.S. at 224, 86 S.Ct. at 787-88.

In light of the fact that FCC regulation of carriage

access for cable broadeasting did not conflict with antitrust

principles in the context of CCC’s decision to carry Mid-

land’s signal, there is no justification for holding that ap-

pellees have antitrust immunity. Accordingly, the judg-

ment must be reversed and the case remanded for trial.

REVERSED AND REMANDED.

——— eee

A-17

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF TEXAS

MIDLAND-ODESSA DIVISION

MIDLAND TELECASTING COMPANY

Vv.

Mipvessa TELEVISION Company, Inc., et al.

No. MO-74-CA-47

FINDINGS OF FACT AND CONCLUSIONS OF LAW

Having considered the motion by defendant Midessa

Television Company, Inc. to dismiss and for judgment,

the briefs in support and in opposition thereto, the plead-

ings, depositions, affidavits, other documents on file, and

the argument of counsel, the court now makes the follow-

ing findings of fact and conclusions of law:

Findings of Fact

From the plaintiff’s complaint, briefs and argument, it

appears undisputed and the Court finds as follows:

(a) Community Cablevision Company is a joint ven-

ture, comprised of other defendants herein, formed in

1967 to construct and operate a CATV system in Odes-

sa, Texas;

(b) Such joint venture received a franchise from the

City of Odessa, Texas, by city ordinance, to operate

such CAT'V system;

(ec) Since 1968 such joint venture has operated such

CATV system;

A-18

(d) During the relevant period the Federal Communi-

‘cations Commission has regulated CATV systems as to

questions of carriage of television signals;

(e) The plaintiff was an independent (not affiliated

with a major TV network) licensee for the operation of

a UHF television station in the city of Midland, Texas:

(f) The plaintiff operated its station from June, 1969,

until March, 1971, and thereafter from March 26, 1975,

until October 15, 1974;

(g) Previously, on May 4, 1974, before any defendants

were served with process in this case, Community

Cablevision Company began carrying the signal of the

plaintiff, pursuant to permission and authority therefor

by the Federal Communications Commission.

(h) The plaintiff does not assert or claim any anti-

trust injury by reason of the conception or creation of

Community Cablevision Company or of its efforts to

induce the city counsel of Odessa to grant it a franchise,

or of the actual granting of such franchise of such city;

(i) Administrative approval of the Federal Commu-

nications Commission was necessary before the signal of

the plaintiff could be legally carried on the CATV system

of Community Cablevision Company;

(j) Federal Communications Commission regulations

did not preclude the plaintiff from seeking and receiv-

ing an FCC ruling on any request it may have had for

carriage on the CATV system of Community Cablevi-

sion Company.

(k) The plaintiff’s claim is that the Sherman Act was

violated by alleged refusals of the defendants to apply

to the FCC for approval of carriage of plaintiff’s signal

on the CATV system of Community Cablevision Com-

A-19

pany prior to the actual granting of such approval in

1974,

CONCLUSIONS OF LAW

1. The Federal Communications Commission was grant-

ed by Congress in the Communications Act statutory juris-

diction to regulate the question of carriage of signals by

CATV systems.

United States v. Southwestern Cable Company, 392 U.S.

157, 20 L.Ed.2d 1001 (1968). In exercising such jurisdiction

it may issue rules and regulations and prescribe such con-

ditions not inconsistent with law as public convenience,

interest or necessity require. United States v. Midwest

Video Corp. 406 U.S. 649, 32 L.Ed.2d 390 (1972).

2. Congress has vested in the Federal Communications

Commission final authority to determine whether, when,

and under what conditions the signals of television stations

may or shall be carried upon CATV systems. The regula-

tory scheme mandated by Congress is pervasive, at least

insofar as it applies to the question of carriage raised in

the instant case. There can be no reconciliation of the

FCC’s authority to determine such questions of carriage

with any Sherman Act declaration (as may be asserted by

the plaintiff) that a refusal te apply for FCC permission

or a refusal of carriage is or can be illegal. The antitrust

laws must give way, at least in this narrow and discrete

area of carriage of signals on CATV systems, if the reguia-

tory scheme established by the Communications Act is to

work. Thus, the plaintiff’s complaint under the Sherman

Act must be dismissed. U.S. v. National Association of Se-

curity Dealers, 422 U.S. 694, 45 L.Ed.2d 486(1975); Pan

American World Airways, Inc. v. U.S., 371 U.S. 269, 9

L.Ed.2d 325 (1963).

A-20

3. Maintenance of an antitrust action for failure to apply

to the FCC for a ruling or for failure to carry a signal on

a CATV system, as alleged herein, poses a substantial

danger that the defendants would be subjected to duplica-

tive and inconsistent standards, as to the carriage of tele-

vision signals on CATV systems. Additionally, a failure or

refusal to seek an administrative decision that the public

interest would be served by carriage of a signal cannot be

a violation of the antitrust laws. Cf. United Mine Workers

of America v. Pennington, 381 U.S. 657 (1965).

4. If the federal antitrust laws were applied to the ques-

tion of carriage of television signals on CATV systenis,

the sophisticated regulatory program of the FCC would

not work. The two statutory concepts are sufficiently mu-

tually repugnant to compel the inferrence that Congress

intended to repeal any antitrust laws otherwise applicable

to the area of carriage. See, Phonetele, Inc. v. American

Telephone and Telegraph Company, 435 F.Supp. 270 (C.D.

Calif. 1977) ; Dasa Corp. v. General Telephone Company of

California; 1977—2 Trade Cases 761,611 (C.D.Calif. 1977).

). The Federal Communications Commission is vested

with exclusive jurisdiction over questions of carriage of

television signals by CATV systems; and Congress in-

tended an iramunity from antitrust attack for a refusal

of carriage of a television signal on a CATV system. The

statutory authority granted the FCC to regulate the car-

riage of CATV systems creates an exemption from the

antitrust laws for any refusal of carriage, or refusal to

apply for permission for carriage, at issue herein.

6. Any refusal by the defendants to carry the signal of

the plaintiff on the CATV system of Community Cable-

vision Company in Odessa is justified by the policy em-

bodied in the regulatory scheme enacted by Congress in

A-21

the Communications Act, and such activity is exempted

from the antitrust law. See, Gordon v. New York Stock

Exchange, 422 U.S. 659 (1975); see also, Silver v. New

York Stock Eachange, 373 U.S. 341, 348-49 (1963).

7. The plaintiff lacks standing to complain in this anti-

trust court of any refusal of the defendants to carry its

signal on the CATV system of Community Cablevision

Company in Odessa, Texas, or to apply to the FCC for

permission to do so. The Communications Act and the FCC

regulation of carriage interposed itself between the defen-

dants and the plaintiff as an arbiter of fair and “public

interest” access by television stations to CATV systems.

The plaintiff was not within the “target area’; and, as a

matter of law, has not alleged antitrust injury, that is, the

type antitrust laws were intended to prevent. See Bruns-

wick Corporation v. Pueblo Bowl-O-Mat, Inc., 50 L.Ed.2d

701 (1977); Jeffrey v. Southwestern Bell Telephone Com-

pany, 518 F.2d 1129 (5th Cir. 1975).

8. There is no genuine issue as to material fact and the

defendants are entitled to judgment as a matter of law.

9. The applicable statute of limitations, §4(b) of the

Clayton Act, 15 U.S.C. §15(b), bars any cause of action

accruing prior to April 26, 1970. Zenith Radio Corp. v.

Hazeltine Research Company, Inc., 401 U.S. 321 (1971).

Moreover, since there was no signal of the plaintiff to be

carried between March 16, 1971, and March 26, 1973, no

claim for which relief can be granted may or can he stated

for any failure or refusal of carriage during that period.

10. The FCC possessing exclusive jurisdiction, this court

lacks jurisdiction under the antitrust laws, and the alleged

events, activities, or transactions upon which the plaintiff

relies are within exemptions or immunities from the anti-

trust laws. :

A-22

11. The complaint, as amended, fails to state a claim for

which relief can be granted.

12. The plaintiff lacks standing to assert that the

events or transactions mentioned in its complaint consti-

tute any violation of the Sherman Act.

13. For the foregoing reasons, this civil action should

be dismissed and judgment entered for defendants.

SIGNED and ENTERED this _— day of June, 1978.

Unitep States District JupcGe

A-23

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF TEXAS

MIDLAND-ODESSA DIVISION

MiptanpD TELECASTING COMPANY

v.

Mipessa TELEVISION Company, INC., et al.

No. MO-74-CA-47

ORDER AND JUDGMENT

Having considered the motion by Midessa Television

Company, Ine. to dismiss and for judgment, together with

the pleadings, affidavits, depositions, briefs and other docu-

ments on file, and the argument of counsel, and having this

day made its findings of fact and conclusions of law, which

are hereby incorporated by reference, the court enters this

its order and judgment.

It is ORDERED, ADJUDGED and DECREED that

Plaintiff Midland Telecasting Company take nothing as

against defendants herein, and this civil action is hereby

dismissed, with costs to be taxed against Plaintiff.

SIGNED and ENTERED this 13th day of June, 1978.

[SIG]

Unitep States District JupGe

A-24

United States Court

of Appeals

For Tue Firrx Circuit

No. 78-2515

D. C. Docket No. MO-74-CA-47

Mip.tanD TELECASTING CoMPANY,

Plaintiff-Appellant,

VERSUS

Mipessa TELEVISION Company, I[Nc., et al.,

Defendants-Appellees.

APPEAL FROM THE

UNITED STATES DISTRICT COURT FOR THE

WESTERN DISTRICT OF TEXAS

Before TUTTLE*, AINSWORTH and SAM D. JOHN-

SON, Circuit Judges.

JUDGMENT

This cause came on to be heard on the transcript of the

record from the United States District Court for the West-

ern District of Texas, and was argued by counsel;

ON CONSIDERATION WHEREOF, it is now here

ordered and adjudged by this Court that the judgment of

the said District Court in this cause be, and the same is

hereby, reversed, and that this cause be, and the same is

hereby remanded to the said District Court in accordance

with the opinion of this Court;

' — Tuttle did not participate in either the consideration or

etermination of this case.

A-25

It is further ordered that defendants-appellees pay to

plaintiff-appellant the costs on appeal, to be taxed by the

Clerk of this Court.

May 29, 1980

Issued as Mandate:

A-26

In THE

United States Court

of Appeals

For Tue Firrs Circuir

NO. 78-2515

Miptanp TELECASTING CoMPANY,

Plaintiff-Appellant,

VERSUS

Mipessa T'srLecasTING CoMPANY,

Inc., Er. At.,

Defendants-Appellees.

APPEAL FROM THE

UNITED STATES DISTRICT COURT FOR THE

WESTERN DISTRICT OF TEXAS

ON PETITION FOR REHEARING

(June 25, 1980)

Before TUTTLE, AINSWORTH and SAM D. JOHNSON,

Cireuit Judges.

PER CURIAM:

IT IS ORDERED that the petition for rehearing filed in

the above entitled and numbered cause be and the same is

hereby Denied

ENTERED FOR THE COURT:

(SIG.]

Unitep States Circuit JupGe