Petition — ITT Continental Baking Co. v. William Inglis & Sons Baking Co.

EO NR oe Ae

81-2289 [Nite

No. 81-2083 JUN1y 1982

In the Supreme Court"... waite

United Seni

Ocroser Tzrm, 1981

ITT ContrventaL Baxtne Company, Inc., et al.,

Petitioners,

vs.

Wu Inouis & Sons Baxrne Co., et al.,

Respondents.

CROSS-PETITION FOR WRIT OF CERTIORARI

TO THE UN‘TED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

Micuakt N. Knovurr

COUNSEL OF RECORD

Royce H. Scuuuz

Eveenes C. Crew

Jou LinzNer

Broan, Knovurre & Scxvutz

One California Street,

14th Floor

San Francisco, CA 94111

Telephone: (415) 986-0300

Harotp GreENWwALD

230 Park Avenue

New York, N.Y. 10169

Telephone : (212) 867-6500

Attorneys for Respondents

June 11, 1982

BOWNE-PERNAU WALSH © 190 NINTH ST. © &.F.. CA 84108 + (415) 864-2200

QUESTIONS PRESENTED

1. If no legal error is committed in the presentation

of evidence and instructions to a jury during a four-week

trial, do the Constitution or principles of sound judicial

administration preclude a trial judge from awarding a

redundant new trial wherein the same evidence and the

same instructions will be presented to a second jury merely

because the trial judge believes the first jury’s verdict was

against the weight of the evidence?

2. Pursuant to its supervisory responsibilities over the

federal judiciary, should this Court occasionally review

a trial record to ensure the Constitutional right to a jury

trial is not being negated by district judges who dis-

agree with jury verdicts.

PARTIES TO THE PROCEEDINGS

In addition to the parties named in the caption, Sunlite

Baking Company, Inc., a subsidiary of William Inglis &

Sons Baking Co., is a party to this proceeding.

Questions presented

Parties to the proceedings

Jurisdiction

Opinions below

ii

TABLE OF CONTENTS

Constitutional and statutory provisions involved in

RIS SEP ER Se EE cee

Counter-statement of the case

A. State law claim

B. Federal law claims

Reasons for granting the writ

1.

Conclusion

There is a split among the Circuit Courts of

Appeal regarding the proper standard of review

to be applied under the Seventh Amendment to

Motions for a New Trial on the ground the ver-

dict was against the weight of the evidence .......

The Court of Appeals decision affirming the

grant of Continental’s Motion for New Trial

clashes with principles of efficient judicial ad-

ministration

This Court must occasionally review a trial

record to ensure the lower courts do not erase

the right to trial by jury

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11

15

17

19

TABLE OF AUTHORITIES CITED

Cases

Page

Angle v. Sky Chief, Inc., 535 F.2d 492 (9th Cir. 1976) ... 16

Anglo-American General v. Jackson National Life Ins.

Co., 83 F.R.D. 41 (N.D. Cal. 1979) 12

Atlantic & Gulf Stevedores v. Ellerman Lines, 369 U.S.

855 (1962) 12, 16

Aatohaus Brugger, Inc. Saab Motors, Inc., 567 F.2d

901 (9th Cir. 1978) 17

Basham v. Pennsylvania Railroad Co., 372 U.S. 699

(1963) 12

Bazile v. Bissa Marine Co., 606 F.2d 101 (5th Cir. 1979) 14

Blonder-Tongue Laboratories, Inc. v. University of

Illinois Foundation, 402 U.S. 313 (1971) 15, 16

Borgue v. Diamond M Drilling Co., 623 F.2d 351 (5th

Cir. 1980) wi

Borras v. Sea-Land Service, Inc., 586 F.2d 881 (1st Cir.

1978) 13

California Computer Products v. International Busi-

ness Machines, 613 F.2d 727 (9th Cir. 1979) —....... 17

Continental Airlines, Inc. v. Wagner-Moorehouse, Inc.,

401 F.2d 23 (7th Cir. 1968) 14

Daifion, Inc. v. Bohanon, 612 F.2d 1249 (10th Cir.

1979), rev’d on other grounds, 449 U.S. 33 (1980) ... 14

Duncan v. Duncan, 337 F.2d 49 (6th Cir. 1967), cert.

der., 389 U.S. 913 14, 16

England v. Chrysler Corp., 493 F.2d 269 (9th Cir.

1974) 17

fh

iv

Tasiz or AvtHoritizes Crrep

Cases

Page

Fireman’s Fund Insurance Co. v. Aaleo Wrecking Co.,

Inc., 466 F.2d 179 (8th Cir. 1972), cert. denied, 410

U.S. 930 14, 15, 16

Fount-Wip, Inc. v. Redi-Whip, Inc., 568 F'.2d 1296 (9th

Cir. 1978) 12, 17

Gaspard v. Taylor Diving & Salvage Co., 649 F.2d 372

(5th Cir. 1981) 16

Greyhound Computer v. International Bus. Mach., 559

F.2d 488 (9th Cir. 1977) 17

Guidry v. Kevy, 598 F.2d 402 (5th Cir. 1979) —....... 16

Hallmark Industry v. Reynolds Metal Co., 489 F.2d 8

(9th Cir. 1973) 17

Hanson v. Shell Oil Co., 541 F.2d 1352 (9th Cir. 1976) 17

Hilton v. Mumaw, 522 F.2d 588 (9th Cir. 1975) —.......... 17

In re U.S. Financial Securities Litigation, 609 F.2d 411

(9th Cir. 1979) 12, 18

Kaplan v. Burroughs Corp., 426 F.Supp. 1328 (N.D.

Cal. 1977) 17

Kaplan v. Burroughs Corp., 611 F.2d 286 (9th Cir.

1979) 17

Lincoln Carpet Mills v. Singer Co., 549 F.2d 80 (8th

Cir. 1977) . 14

Lind v. Schenley Industries, Inc., 278 F.2d 79 (3d Cir.

1960), cert. den., 364 U.S. 835 (1961) 13, 14, 16

Marquis v. Chrysler Corp., 577 F.2d 624 (9th Cir. 1978) 17

Minthorne v. Seeburg Corp., 397 F.2d 237 (9th Cir.

1968) 12

v

Tasie or AuTHorities CrTep

Cases

Page

Moore v. Schultz, 491 F.2d 294 (10th Cir. 1974) ....... 16

Murphy Tugboat Co. v. Crowley, 658 F.2d 1256 (9th

Cir. 1981) 17

Naify v. McClatchy Newspapers, 1977-2 Trade Cases

7 61,558 (N.D. Cal. 1977) 17

Narcisse v. Ill. Central Gulf R. Co., 620 F.2d 544 (5th

Cir. 1980) 16, 18

Noble v. McClatchy Newspapers, 533 F.2d 1081 (9th

Cir. 1975) ...... 17

O'Neil v. W.R. Grace & Co., 410 F.2d 908 (5th Cir.

1969) 13, 14, 15, 16

People v. Gordon, 105 Cal.App.2d 711 (1951) —.............. 7

Rios v. Empress Lines Maritimas Argentinas, 575 F.2d

986 (1st Cir. 1978) 14

Ryan v. Foster & Marshall, Inc., 556 F.2d 460 (9th Cir.

1977) 17

Santa Clara Valley Distributing v. Pabst Brewing Co.,

556 F.2d 942 (9th Cir. 1977) 17

Spurlin v. General Motors Corp., 528 F.2d 612 (5th Cir.

1976) 16

Syufy Enterprises v. Nat’l General Theatres, Inc.,

1978-1 Trade Cases { 61,996 (9th Cir. 1978) 000. 17

Taylor v. Washington Terminal Co., 409 F.2d 145

(D.C. Cir. 1969), cert. den., 396 U.S. 835 20000. «18

Tennant v. Peoria & Pekin Union Railway Co., 321

U.S. 29 (1943) 11

Tasiz or Avtnorriries Crrep

Cases

Page

Tomac, Inc. v. Coca Cola Co., 418 F.Supp. 359 (C.D.

ES AE SP: aS = ee AN 17

Vander Zee v. Karabatsos, 589 F.2d 723 (D.C. Cir.

1978), cert. den., 441 U.S. 910 eens 13, 16

Wm. Inglis & Sons Baking Co. v. ITT Continental

Baking Co., 389 F.Supp. 1334 (N.D. Cal. 1975),

rev'd 526 F.2d 86 (9th Cir. 1975) —....................... 6,12

United States Constitution

| 2, 11,16

Statutes

California Business and Professions Code:

RE FE: Sa a 2,6

REISER: PS 2 a Se ERD vO PRL. 6 Ua aoe Se Oo 3, 16

5 FS a en: Cre T et Seer 6,7

SE i eS aE! 7

ES I Se eee 3,7

California Unfair Practices Act, Section 17043 —......... 2

Robinson-Patman Act, Section 2(a) (15 U.S.C. Sec-

tion 3(a)) 8, 8, 9, 10, 19

Sherman Act, Section 2 (15 U.S.C. Section 2)....3, 8, 9, 10, 19

28 U.B.C. Section 12646(1) 2... .ecccccecccccceccececeseeseeeeeee 1

In the Supreme Court

United States

Ocroszr Tzam, 1981

ITT Cowrtwertat Baxixe Company, Inc., et al.,

Petitioners,

vs.

Was Ivouss & Sons Baxrvs Co., et al.,

Cross-petitioner William Inglis & Sons Baking Company

respectfully prays that a Writ of Certiorari be issued to

review the modified judgment of the Court of Appeals for

the Ninth Circuit entered on Februury 10, 1982.

JURISDICTION

This is a cross-petition filed pursuant to Rule 19.5. Peti-

tioner’s petition was filed in this Court on May 11, 1982

and was received by cross-petitioner’s counsel on May 14,

1982. The jurisdiction of this Court is invoked pursuant to

28 U.S.C. § 1254(1).

OPINIONS BELOW

The modified opinion of the Court of Appeals reversing

the District Court's judgment n.o.v., but affirming the

order granting a new trial, is reported at 668 F.2d 1014.

It is attached as Appendix A to petitioner’s petition. The

District Court opinion is reported at 461 F.Supp. 410 and

is annexed as Appendix C to petitioner’s petition. Citations

to the lower courts’ opinions in this cross-petition are to

those appendices.

CONSTITUTIONAL AND STATUTORY PROVISIONS

INVOLVED IN THIS CROSS-PETITION

The Seventh Amendment to the United States Constitu-

ticn provides :

In Suits at common law, where the value in contro-

versy shall exceed twenty dollars, the right of trial by

jary should be preserved, and no fact tried by a jury,

shall be otherwise re-examined in any court of the

United States, than according to the rules of the

common law.

The California Unfair Practices Act, in Section 17043

of the California Business and Professions Code, provides :

It is unlawful for any person engaged in business

within this state to sell any article or product at less

than the cost thereof to such vendor, or give away

any article or product for the purpose of injuring com-

petitors or destroying competition.

Section 17026 of the California Business and Professicas

Code provides in pertinent part:

“Costs” as applied to production includes the cost of

raw materials, labor and all overhead expenses of the

Section 17029 of the California Business and Professions

following items of expense: labor (including salaries

Secticn 17071 of the California Business and Professions

Code provides :

Every person who shall monopolize, or attempt to

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rectly or indirectly, to discriminate in price between

different purchasers of commodities of like grade and

quality, where either or any of the purchases involved

in such discrimination are in commerce, where such

commodities are sold for use, consumption, or resale

within the United States .. . , and where the effect of

such discrimination may be substantially to lessen

competition or tend to create a monopoly in any line of

commerce, or to injure, destroy, or prevent competition

with any person who either grants or knowingly

receives the benefit of such discrimination, or with

customers of either of them...

COUNTER-STATEMENT OF THE CASE

After seven years of discovery, this action was tried

to a jury for four weeks. Plaintiff/cross-petitioner William

Inglis & Sons Baking Company (“Inglis”) had alleged in

its amended complaint that defendant ITT Continental

Baking Company (“(ontinental”) had violated state and

federal law by charging discriminatory and below cost

prices for its one-pound loaf of “private label” white pan

bread with the purpose and effect of driving small whole-

sale bakers such as Inglis out of business.

In Northern California and other “problem areas,” Con-

tinental’s sales of Wonder Bread (its higher-priced and

more profitable advertised brand) were declining due to

the widening spread in prices between advertised label and

private label bread. (RT 176, 319, 505-6, 2013, P-244). Con-

tinental therefore directed its consulting firm, McKinsey

& Company, to develop a plan to combat independent

private label wholesale bakers such as Inglis. The initial

McKinsey Report, issued September 7, 1971, included a

strategy euphemistically designed “to hasten wholesaler

exit.” (P-114) During subsequent meetings, Continental’s

officers instructed McKinsey to study the feasibility of

Continental holding or decreasing its private label prices

for four or five years, absorbing all cost increases and

thereby driving smaller private label wholesalers from the

market.’ McKinsey was told to develop means of imple-

menting such a pricing strategy. (RT 3823-5; 3908-11)

The final McKinsey Report, dated October 22, 1971, pre-

sented a definitive plan to “hold the price.” It stated that

Continental “must compare itself to ite competitors in

terms of its current financial strength and either its capa-

ginal bakers . . .” (P-116, p. MK 187, App. E at 2) The

report noted that in the past Continental had benefitted

Ee res

There can be no question that Continental decided to

adopt and implement this predatory pricing strategy in

Northern California. Throughout the early 1970s, Conti-

nental sold its private label bread below cost and absorbed

$5,200,000 in losses. (RT 211) Despite unprecedented es-

calating costs, Continental continually reduced its prices

for private label bread. During Inglis’ last year of business,

Continental made a special effort to take Inglis’ major

accounts with below cost prices. (P-73, P-260A, P-238,

P-242, P-243, RT-320) Eventually, after years of sustained

below-cost sales, Continental succeeded in driving Inglis

and other competitors from the market. Inglis went out of

business altogether in 1976.° Only two full-service wholesale

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juring competitors or destroying competition.” Cal. Bus.

& Prof. Code $4 17043, 17026, 17029. Both the District

Court and the Court of Appeals recognized that Inglis had

demonstrated—indeed, that Continental had admitted (RT

61)—sales of white pan bread by Continental below its

averaze total cost. App. at C7, 461 F.Supp. at 423; App. at

A25, 668 F.2d at 1035. Proof of such below-cost sales, to-

gether with proof of their injurious effect upon Inglis,

created a presumption that Continental intended to injure

its competitors or destroy competition in violation of

§ 17043. Cal. Bus. & Prof. Code § 17071; App. at A55-6, 668

F.2d at 1049 n.61. This statutory presumption was but-

tressed by the substantial evidence of Continental’s preda-

tory intent described above. See pp. 4-6, supra.

As the Court of Appeals acknowledged, Inglis presented

sufficient evidence to the jury to establish a prima facie

violation of the California Unfair Practices Act by Conti-

ental. App. at A58, 668 F.2d at 1050 n.64. The burden was

therefore upon Continental to establish an affirmative de-

fense to avoid liability. People v. Gordon, 105 Cal.App.2d

711 (1951). Continental attempted to do so. Continental

tried to convince the jury that its below-cost eales were “an

endeavor made in good faith to meet the legal prices of [a]

competitor selling the same article or product, in the same

locality or trade area .. .” Cal. Bus. & Prof. Code

§ 17050(d). The jury received the parties’ evidence and the

Court’s instructions on the “meeting competition” defense

without objection from Continental. RT 5327-32. As the

trier of fact, the jury rejected Continental’s proffered ex-

euse for its below-cost sales. Instead, the jury returned a

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verdict for Inglis on its state law claim, as well as its claims

under Sherman Act § 2 and Robinson-Patman Act 4 2(a).*

Continental moved for an order granting judgment n.0o.v.

or, in the alternative, an order granting a new trial. With

respect to Inglis’ claim under the California Unfair Prac-

tices Act, the District Judge acknowledged the parties’

evidence on the “meeting competition” issue differed

sharply and denied the motion for judgment n.o.v. How-

ever, the District Judge granted Continental a new trial

on the state law claim because, in his opinion, “the weight

of the evidence establishes that the defendant maintained

these below-cost prices in a good faith response to com-

petition.” App. C at C18-19, 461 F.Supp. at 423. In deny-

ing Continental’s appeal that it should have been granted

judgment n.o.v. on the Unfair Practices Act claim, the

Ninth Circuit likewise held the “meeting competition” de-

fense to Inglis’ state law claim had to be resolved by a

jury. App. A at 52, 668 F.2d at 1047-48. Nevertheless, the

Court of Appeals denied Inglis’ request for reinstatement

of the jury verdict on the state law claim and remanded

the case for a new trial. App. A at 57-8, 668 F.2d at 1050.

Although both lower courts agreed the validity of t'

parties’ claims and defenses under the California Unfair

Practices Act must be determined by a jury, neither court

was willing to accept the jury’s decision after it had heard

‘The state law claim does not involve the appropriate legal stan-

dard for assessing claims of predatory pricing under the federal

antitrust laws. As the Court below held, the federal antitrust

statutes have not pre-empted the law of California regarding unfair

trade practices. App. at A53-57, 668 F.2d at 1048-50. Neither party

is seeking a review of that holding by this Court.

all of the evidence and received appropriate instructions.

Disagreeing with the unanimous opinion of six impartial

juror: and disregarding the substantial evidence upon

which the collective opinion was based, the District Court

felt “the weight of the evidence” established that Con-

tinental’s below-cost prices were a good faith response to

competition and ordered a new trial. App. C18-19, 461

F.Supp. at 423. No other reason was or could be given for

the grant of a new trial on Inglis’ state law claim. The

panel of the Court of Appeals also applied a “weight of

the evidence” standard of review and, not wishing to inter-

fere with the trial judge’s exercise of his discretion,

affirmed the new trial order. App. at A57-8, 668 F.2d at

1050. The parties are now preparing to re-try the case to

a second jury.

B. Federal Law Olaims

Sherman Act §2 prohibits pricing which is preda-

tory. The Robinson-Patman Act 4 2(a) prohibits pricing

which is discriminatory when such pricing may substan-

tially lessen competition or tend toward monopoly. The

jury found that Continental’s prices were both predatory

and discriminatory and rejected the defense that Con-

tinental’s prices were a good faith response to competition.

The district court disagreed with the jury and granted

Continental’s motion for judgment n.o.v. on Inglis’ federal

claims or, in the alternative, a new trial. The Court of

Appeals reversed the judgment n.o.v. and held that al-

though a price “below average total costs and above aver-

a.e variable costs is not inherently predatory, it does not

follow however, that such prices are never predatory”

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under Sherman Act § 2. App. A at 27, 668 F.2d at 1035.

The Court of Appeal further held that if Inglis could prove

that the anticipated benefit of Continental’s below-cost

prices depended on their “tendency to eliminate rivals

and create a market structure enabling the seller to

recoup his losses”, attempted monopolization would be a

proper jury finding. App. A at 27, 668 F.2d at 1035. Inglis

met that burden in the first trial: fairly viewed, the evi-

dence showed that Continental’s motive in charging below-

cost prices was expressly to eliminate its rivals and to

create a concentrated market structure. P-113, P-114, P-116,

App. E.*

The court below also held that although predatory

pricing required by Sherman Act §2(a) was not always

necess. ry to prove the competitive injury requirements of

Robinson-Patman § 2(a), Inglis failed to present evidence

that would otherwise fulfill that requirement. App. at A40,

668 F.2d at 1042. Contrary to the Court of Appeals’ hold-

ing, however, the record contained undisputed evidence

which established an adverse effect on competition: dur-

ing the period that Continental charged discriminately low

prices in Northern California, the number of white pan

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uous phrases as “hasten wholesaler exit,” “attrition,” and “ac.

celeration of shake out of marginal bakers,” the jury easily saw

through these transparent euphemisms. The jury received sub-

stantial evidence from Continental's officials in Northern California

that Continental endeavored to eliminate its competitors so as to

gain more shelf space for Wonder Bread sales and that Continental

actually prepared contingency plans to take full advantage of the

expected “wholesaler exits” from the market. RT 310-13, 320,

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bread producers in that market fell from five to two with

only the two largest, Campbell-Taggart and Continental,

remaining. It wou!d be difficult to present more persuasive

evidence that competition was adversely impacted.

Inglis petitions this Court to grant certiorari to resolve

a conflict among the Circuits with respect to the appro-

priate standard of review for orders granting a new trial

on the grounds the jury verdict is against the weight of

the evidence, to establish a standard that comports with

the Seventh Amendment and to establish a review proce-

dure to insure that lower courts comply with such a

standard.

1. There Is a Split Among the Circuit Courts of Appeal

Regarding the Proper Standard of Review to be Ap-

plied Under the Seventh Amendment to Motions for

a New Trial on the Grounds the Verdict Was Against

the Weight of the Evidence

The Seventh Amendment to the Constitution provides

that “no fact tried by a jury shall be otherwise re-examined

in any court of the United States, than according to the

rules of common law.” This Court described the respective

roles of judge and jury under the Seventh Amendment in

Tennant v. Peoria & Pekin Union Railway Co., 321 U.S.

29, 35 (1943) :

“Tt is the jury, not the court, which is the fact-finding

body. It weighs the contradictory evidence and infer-

ences, judges the credibility of witnesses, receives ex-

pert instructions, and draws the ultimate conclusion

as to the facts. The very essence of its function is to

select from among conflicting inferences and conclu-

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sions that which it considers most reasonable. [cita-

tions omitted.]. That conclusion, . . . cannot be ignored.

Courts are not free to reweigh the evidence and set

aside the jury verdict merely because the jury could

have drawn different inferences or conclusions or be-

cause judges feel that other results are more reason-

able.” (emphasis added)

See also Basham v. Pennsylvania Railroad Co., 372 US.

699, 700-01 (1963) ; Atlantic & Gulf Stevedores v. Ellerman

Lines, 369 U.S. 355, 363-4 (1962) (error for trial and

appellate courts to “reevaluate the conflicting evidence

and mandate a result opposite from that reached by a

jury.”) In derogation of the Seventh Amendment and

these well-reasoned precedents, the Ninth Circuit Court

of A permits and encourages its trial judges to

the evidence presented to juries and to grant a

motion for a new trial solely upon his or her opinion that

a jury verdict was “against the weight of the evidence.”

See, e.g., Inglis, supra, 668 F.2d at 1050; Fount-Wip, Inc.

v. Redi-Whip, Inc., 568 F.2d 1296, 1302 (9th Cir. 1978);

Minthorne v. Seeburg Corp., 397 F.2d 237, 244 (9th Cir.

1968) ; Anglo-American General v. Jackson National Life

Ins. Co., 83 F.R.D. 41, 43 (N.D.Cal. 1979).*

Consistent with this Court’s recognition of the jury’s

role under the Constitution, several Courts of Appeal have

"The Circuit's disregard of juries’ verdicts cannot be reconciled

with its admiration for their “collective intelligence, wisdom and

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limited the discretion of their district judges to order new

trials on such flimsy grounds as the verdict being “against

the weight of the evidence.” This line uf authority may be

traced to the thoughtful en banc decision of the Third Cir-

cuit in Lind v. Schenley Industries, Inc., 278 F.2d 79, 90

(3d Cir. 1960), cert. den., 364 U.S. 835 (1961) :

“But where no undesirable or pernicious element has

occurred or been introduced into the trial and the

trial judge nonetheless grants a new trial on the

ground that the verdict was against the weight of the

evidence, the trial judge in negating the jury’s verdict

has, to some extent at least, substituted his judgment

of the facts and the credibility of the witnesses for

that of the jury. Such an action affects a denigration

of the jury system and to the extent the new trials are

granted the judge takes over, if he does not usurp,

the prime function of the jury as a trier of facts. It

then becomes the duty of the appellate tribunal to

exercise a closer degree of scrutiny and supervision

than in a case where a new trial is granted because

of some undesirable or pernicious influence obtruding

into the trial. Such a close scrutiny is required in

order to protect the litigant’s right to a jury trial.”

The stringent Lind approach to new trial motions is con-

sistent with the decisions of this Court and it has been

expressly adopted by the District of Columbia Circuit,

First Cireuit, Third Circuit, Fifth Circuit, Sixth Cireuit,

and Eighth Circuit.’ The Ninth Circuit has refused to

"Taylor v. Washington Terminal Co., 409 F 2d 145, 148 n.13 (D.C.

Cir. 1969), cert. den., 396 U.S. 835 and Vander Zee v0. Karabatsos,

589 F.2d 723, 729 (D.C. Cir. 1978), cert. den., 441 U.S. 910; Borras

ov. Sea-Land Service, Inc.; 586 F.2d 881, 887 ( 1st Cir. 1978); O'Neil

14

follow the Lind trend and grants its district judges vir-

tually unlimited discretion to overrule any jury verdict

with which they disagree.

Inglis submits this Court should grant certiorari to re-

solve a clear split among the circuits on an elementary,

but important, question of civil procedure, i.e., the appro-

priate standard of review for a new trial motion. Inglis

further submits this Court should endorse the Lind ap-

province of the jury by reassessing the credibility of the

witnesses and reweighing the parties’ conflicting evidence.’

A new trial should be permitted only to prevent a “mis-

carriage of justice” not because the trial judge would have

reached different results from that reached by the jury.

See Rios v. Empress Lanes Maritimas Argentinas, 575 F.2d

986, 990 (ist Cir. 1978); Aaleo Wrecking, supra, 466 F.2d

at 187.

o. W.R. Grace & Co., 410 F.2d 908, 914-15 (5th Cir. 1969); Duncan

0. Duncan, 337 F.2d 49, 52-55 (6th Cir. 1967), cert. den., 389 U.S.

913; Fireman's Fund Insurance Co. vo. Aalco Wrecking Co., Inc., 466

F.2d 179, 185-8 (8th Cir. 1972), cert. denied, 410 U.S. 930. Other

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2. The Court of Appeals Decision Affirming the Grant

of Continental's Mution for New Trial Clashes with

Principles of Efficient Judicial Administration

The Lind standard of review for new trial motions is

not only sound as a matter of Constitutional doctrine but

also as a matter of practical judicial administration. If an

appellate tribunal determines that no legal error was com-

mitted in the presentation of a claim and defense to a

jury—e.g., Inglis’ Unfair Practices Act claim in this case—

no useful purpose is served by presenting the same evi-

dence and the same instructions to a second jury merely

because the trial judge disagreed with the first jury’s ver-

dict. Aalco, supra, 466 F.2d at 187 ; O’Neil, supra, 410 F.2d

at 915. See, Blonder-Tongue Laboratories, Inc. v. Uniwer-

sity of Illinois Foundation, 402 U.S. 313, 328-9 (1971)

(public policy against relitigation of same issues.) In such

instances, a second, costiy jury trial not only denigrates the

jury system but further delays justice for other litigants

on the overcrowded dockets of the district courts.

Both of the courts below clearly held that reasonable

minds could draw differing conclusions from the evi-

dence on the “meeting competition” issue and that a jury

could properly find for Inglis on its state law claim. App.

at A52, 668 F.2d at 1047-8; App. at C19, 461 F.Supp. at 423.

Resolution of this question of fact must be, and will be

made by a jury. That being so, no “miscarriage of justice”

resulted from the first trial simply because the jury found

Inglis’ evidence more persuasive than Continental’s. A

second trial would be a burdensome, unnecessary, four-week

repeat presentation of the same evidence to another jury

=

Ea i

”_

16

simply to obtain another verdict.’ The law should not abide

a procedural rule which allows such a needless waste of

public and judicial resources and which derogates cherished

Seventh Amendment rights. See Blonder-Tongue, supra,

402 U.S. at 328-9.

Accordingly, as the body responsible for the efficient

administration of justice in a federal court system with

limited resources, this Court should take this opportunity

to invigorate the Seventh Amendment and instruct the

lower courts that under the Amendment only one error-

free trial is necessary or appropriate. The Court should

announce that it considers it an abuse of discretion for

district judges to negate jury verdicts which—like Inglis’

verdict—are free of legal error and reasonably supported

17

Such guidance by this Court is necessary to alleviate the

congested dockets which plague litigants and judges alike.

3. This Court Must Occasionally Review a Trial Record

to Ensure the Lower Courts Do Not Erase the Right

to Trial by Jury

This case presents a needed opportunity for this Court

to announce a clear rule governing the award of new trials.

Unfortunately, however, the declaration of the proper

“See, Murphy Tugboat Co. ov. Crowley, 658 F.2d 1256, 1260 (9th

Cir. 1981); Kaplan o. Burroughs Corp., 611 F.2d 286, 290 (9th Cir.

1979); California Computer Products o. International Business

Machines; 613 F.2d 727, 733 n3 (9th Cir. 1979); Marquis 0.

G77 F.2d 624, 639 (9th Cir. 1978); Autohaus

Inc. 0. Saab Motors, Inc., 567 F 2d 901 (9th Cir. 1978);

im this case and thereby demonstrate its resolve to vindi-

cate each citizen's right to trial by jury.

If the Seventh Amendment right to jury trial is to

* have any significance, it must be policed by this Court to

set a clear example for the lower federal courts. Litigants

and the citizenry at large cherish their constitutional right

to a trial by jury. Indeed, the courts extol the sanctity of

this privilege. See, e.g., U.S. Financial Securities, supra, 609

F.2d at 429-31 ; Narcisse, supra, 620 F.2d at 546. Yet certain

district judges, sitting imperiously as a “thirteenth juror,”

have exercised veto power over the other twelve and have

transformed the “right” into an illusion. Inglis is keenly

aware this Court does not welcome detailed arguments

regarding conclusions which may properly be drawn from

evidence presented at trial, but there is no other way to

ensure the lower federal courts adhere to the Seventh

Amendment.

19

CONCLUSION

For the reasons stated herein, a writ of certiorari should

issue to review the judgment of the Court of Appeals for

the Ninth Circuit insofar as it affirmed the District Court’s

Order granting Continental a new trial on Inglis’ claims

under the California Unfair Practices Act, Sherman Act

§2 and Robinson-Patman Act § 2(a).

Respectfully submitt od,

Micuast N. Kxgovunrm

COUNSEL OF RECORD

Roycs H. Scuuuz

Eveens C. Crew

Joust Lanzyzr

Broan, K nour & Scuvuiz

Harotp GaeewwaLp

Attorneys for Respondents

(Appendix E follows)

Appendix E

Determining a Strategy to Combat

Private Label Competition

In the Bread Market

ITT-Continental Baking Company, Inc.

October 22, 1971

IV. WILL HOLDING RETAIL PRICES IMPROVE

ITT-CONTINENTAL’S COMPETITIVE POSITION?

The Federal Trade Commission has pointed out that

“Since World War II, bread prices have risen three times

more rapidly than the average for other food products,

and bread price increases alone have accounted for nearly

one-fifth of the total increase in the price index of food

products consumed at home.”* Since the time of that re-

port, the price index for white bread has continued to climb

rapidly (Exhibit 16). But wholesale bakers have not been

the exclusive beneficiaries of these price increases. In fact,

beginning about 1960, retailers started taking a growing

share of the added revenues coming from retail price in-

creases for bread (Exhibit 17). The fact that price adjust-

ments paid by ITT-Continental to the trade increased 49

percent over the past 5 years suggests that retailers are

still taking a significant share of the increased revenue

from recent price increases.

A-2

Presuming that the readiness with which the baking in-

dustry has had recourse to price increases has helped

sustain less efficient competitors in the past, it seems rea-

sonable to assume that greater reluctance to increase retail

prices in the future can significantly improve ITT-Conti-

nental’s competitive position. The principal issue to be

resolved under these circumstances is what will be the

impact of a hold-the-price-line strategy on ITT-Continen-

tal itself and on its competitors. Specifically, the question

is: To what extent is ITT-Continental and each of its com-

petitors capable of holding prices? In answering this ques-

tion, ITT-Continental must compare itself to its competi-

tors in terms of its current financial strength and either its

capability for holding or reducing costs or its willingness

to absorb future cost increases by accepting lower profits.

Presuming that I'T'T-Continental can successfully hold

the line on retail prices and also presuming that the out-

come of this strategy would be an acceleration in the shake-

out of marginal bakeries, ITT-Continental must also assess

whether the availability of these bakeries for sale to re-

tailers will foster the further expansion of private label.

Obviously, this is not a small consideration since the pri-

vate label threat is substantial now and ITT-Continental

must make every effort to avoid strengthening it further.

Assuming that an aggressive price maintenance strategy

passes the tests outlined above, the last issues with which

management must deal have the objective of optimizing

the beneficial outcome of the strategy. Certainly the first

question to be answered is which tactics can be legally em-

ployed to reflect cost savings and other operating efficien-

cies in retail prices. A good deal of legal and government

IV. WILL HOLDING RETAIL PRICES IMPROVE

ITT-CONTINENTAL’S COMPETITIVE POSITION?

competitive targets, and headquarters

base and greater financial

resources it would be in a cn tips ae ha pagum.

better position to weather

a pute wer. Meso te length of time they could

portantly, ITT-Continental *%i ® price war

could identify individual

competitive targets and

initiate price reductions

on a market-by-market

basis, thereby minimizing

rv

A-3

consultation will clearly be necessary here to ensure that

ITT-Continental’s strategies are legally consistent with the

government’s policy of holding down inflationary price in-

creases. If legal and other constraints permit only a na-

tional approach, the issue is then largely one of identifying

pricing objectives and the cost/profit consequences of hold-

ing prices over time. If more local pricing flexibility is

possible, market-by-market objectives must be evaluated

and selected and action plans and coordinated programs

designed to achieve those objectives.