# Petition for Writ of Certiorari — Arthur S. Langenderfer, Inc. v. S. E. Johnson Co.

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1991
- **Citation:** 502 U.S. 899

## Text

90-1581 |":
ELS

IN THE | ence (

Supreme Court of the United States

October Term, 1990

ARTHUR S. LANGENDERFER, INC., NORTHERN OHIO
ASPHALT PAVING CO., MACRITCHIE MATERIALS, INC.,
M & B ASPHALT CO., and G. M. SADER EXCAVATING &
PAVING CO.,

Petitioners,
vs.

S. E. JOHNSON COMPANY, S. E. JOHNSON COMPANIES,
INC., THE OHIO ENGINEERING COMPANY, FRED R.
CREAGER & SONS, INC., MATCO, ASPHALTIC CONCRETE
PRODUCING CO., OAMCO, INC., C. P. CALAWAY, INC.,
MAUMEE STONE COMPANY, MICHIGAN STONE
COMPANY, WOLCOTTVILLE SAND & GRAVEL CORP.,
SAXON DEVELOPMENT COMPANY, STONECO, INC. and
J. T. KIRKBY,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES
CourT OF APPEALS FOR THE SIXTH CIRCUIT

PETITION FOR A WRIT OF CERTIORARI

JAMES M. PORTER
Counsel of Record
SQUIRE, SANDERS & DEMPSEY
1800 Huntington Building
Cleveland, Ohio 44115
(216) 687-8500
Attorney for Petitioners
Of Counsel:
WALTER J. REksTIS, III
Eric M. OAKLEY
VIRGINIA A. SEGER
ELIZABETH A. RADER

THE GATES LEGAL PUBLISHING CO., CLEVELAND, OHIO—TEL. (216) 621-5647

ee

i.
QUESTIONS PRESENTED

1. In reversing jury verdicts for plaintiffs in a
Sherman §2 monopoly case, is it a violation of the
Seventh Amendment's proscription against the _ re-
examination of any fact found by a jury, for a Court of
Appeals:

(a) sua sponte to redetermine and reduce damages
by an implicit extension of Matsushita on the
ground ‘“‘that some of the dollar figures offered
by plaintiffs and their experts simply fail to
reflect economic reality and we shall make
adjustments accordingly’ when the amount of
the verdicts was never challenged by motions in
the trial court for directed verdict, j.n.o.v., or
new trial and was never raised or argued on
appeal;

(b) sua sponte to hold that a plaintiff only suffered
indirect injury and lacked antitrust standing
under Associated General Contractors when the
defendants failed to raise the issue either in the
trial court or on appeal;

(c) to hold that plaintiffs also had to prove that
defendants monopolized individual counties
within a thirteen county relevant geographical
market, even though the Court of Appeals
affirmed the jury's finding that defendants
monopolized the whole thirteen county area;

(d) to hold that plaintiffs had failed to prove that
defendants monopolized the production of all
highway construction materials, although the
plaintiffs’ contention and the jury’s express
findings were that defendants monopolized the
supply of highway construction materials used
only on asphalt paving jobs that defendants
were also found to have monopolized; and

ie) to hold, as a matter of law, that the evidence
was insufficient to support a jury's finding that
a defendant controlling an essential facility
refused to deal with the plaintiff customer for
retaliatory and anticompetitive reasons rather
than for genuine credii reasons when the Court
itself is “‘persuaded”’ that plaintiff's claim “has
arguable merit.”

2. Whether, as a matter of law, a_ prevailing
antitrust plaintiff can be refused all attorney's fees and
costs for the first nine years of legal effort in
successfully prosecuting a monopoly case over fifteen
vears.

3. On retrial of a case, when a second jury returns a
larger verdict for the original plaintiffs which includes
the damages awarded on the original vacated judgment,
are the original plaintiffs entitled to interest on the
original amount from the date of that first judgment.

eee
ill.

RULE 29.1 STATEMENT

Material Suppliers of Northwest Ohio, Inc., an Ohio
corporation, is a non-wholly owned subsidiary of
Northern Ohio Asphalt Paving Co. All other companies
and subsidiaries are wholly owned.

Vv.

TABLE OF CONTENTS

QUESTIONS PRESENTED .......... ccc ceeuaes
ee a ee eee ee ee ree
py OF BM iy | - ererererrreer
er 6a Ws aKa kn dw ete tenweewhews
FE 6o 6.5 600 ek cea nenes
CONSTITUTIONAL PROVISION INVOLVED....
pe pg FN ee ee Serre a
STATEMENT OF THE CASE 2... cc cscs nccnee

A.

B
C.
D

7

Overview of the Decision Below ............
a ic hdc e ho Oke bun kan saa
The Jury's Specific Findings ...............

The Asphalt Paving Industry in
PRR IE 6 6.5:5 0 00e5nstdesvadsarens

The Relevant Markets ....................

Defendants Deliberately Obtained Monopoly
Power Through Thirteen Anticompetitive
RD a 6 60:6:46 654404454400 440R ROR

Acquisitions of essential quarries, sand pits
and bridge building capacity foreclosed
CUE 50.2 Cac xdadacdanc cease

Acquisitions of asphalt paving competitors
were anticompetitive and monopolistic . ...

Defendants’ Market Shares and Statistical
Evidence of Monopoly Power After the

Ps 6. 6:06:60 40 645 cehdcunebeneavss

Oo £ NM HW WD tO

-J

vi.

H. Defendants’ Size and Power Dwarfed All

SICA 0 d4.4400 40050004 060R00RRe RSD 10

I. Abuses of Monopoly Power................. 10
J. The Proceedings and Disposition Below ...... 11
REASONS FOR GRANTING THE WRIT........ 13

I. The Sixth Circuit’s Opinion Is An Implicit
Extension Of Matsushita In Violation Of The
DN DO ick bs ceawatias &i 13

II. The Seventh Amendment Precluded The
Court Of Appeals From Sua _ Sponte
Reviewing Any Issues Of Langenderfer’s
Damages Or Indirect Injury To NOAP. The
Issues Were Never Raised By Motion Beiow;
They Were Never Assigned As Error, Briefed

Coe AME TI CO 6k ib es eee icac caecis 17
A. The Court of Appeals effectively directed a
damage verdict for a reduced sum........ 17

B.The Sixth Circuit's review likewise
deprived petitioners of appellate due
POORER. oon ccc cs cecseceesennses cebenes 19

III. The Appellate Court Again Violated The
Seventh Amendment When It Re-Examined
The Jury's Relevant Market Findings.
Defendants’ Monopolization Of ODOT/OTC
Asphalt Paving And Materials Used Therein
As Found By The Jury Is Sufficient To
Sustain The Claims Of All The Plaintiffs.... 21

IV. The Court Of Appeals Again Re-Examined
The Jury’s Findings In Reversing Sader’s
Judgment. Sader Was Cut Off By The
Monopolist Under A Sham Credit Pretext; It
wre: A GU BO hia cacucieuaceevneesese 23

Vii.

V. The Court's Refusal To Award Attorneys’
Fees Or Costs To The Prevailing Plaintiff For
The First Nine Years Of This Case Is
Contrary To Law, Unconscionable On Its
Face And Exhibits Hostility To Private
Enforcement Of The Antitrust Laws........ 25

Vl. Refusal To Allow Postjudgment Interest On
The Original Langenderfer I Judgment
Reinstated By The Langenderfer I]
Judgment Is Contrary To Binding Precedents
In The Sixth Circuit And Presents A Direct
Conflict With The Eighth And Ninth Circuits 27

Ps kn ok ROR CAS eSk Kon khe hake bea bas 29

viii.

APPENDIX:
Opinion of the Court of Appeals for the Sixth
Circuit, dated October 29, 1990 .............. Al
Judgment of the Court of Appeals for the Sixth
Circuit, dated October 29, 1990 .............. A72

Jury's Answers to Special Interrogatories and
General Verdicts for Plaintiffs, dated October 1,
SER RNKREL GSS CHEN SENG ENS REESE RO KE OK ON A74

Judgment of Trial Court, dated October 2, 1986... A&9

Memorandum and Order of the Trial Court
Denying Defendants’ Motion for J.N.O.V. or

New Trial, dated April 30, 1987 .............. A91
Trial Court's Memorandum and Order Re Post-
Judgment Interest, dated August 13, 1987..... A98

Trial Court's Memorandum and _ Order
Re Attorney's Fees and Costs dated January
eS eras ery Te re eee ry eee te Al0z2

Order of the Court of Appeals Denying Petition
for Rehearing and Rehearing En Banc, dated

CT EE “eV GaN adeeb Geb hens oes eben A122
U.S. Constitution, Amendment VII ........... Al24
Sherman Act §2, 15 U.S.C. §2 (1974) ...........4 A124
Clayton Act §4(a), 15 U.S.C. $15(a) (1982) .. 2... ., A125
ee ee: ee we cece ebebeeas A126

Defendants-Appellants’ Brief on the Merits,
Excerpt: “Issues Presented ..............5. A127

ix.
TABLE OF AUTHORITIES

Cases

Aetna Ins. Co. v. Kennedy, 301 U.S. 389
. , FEPCTSTERETE TTT PECTS TT TTT TT LOTTE T CTT 18

Aspen Skiing Co. v. Aspen Highlands Skiing Corp.,
738 F.2d 1509 (10th Cir. 1984), aff'd, 472 U.S. 585

Se a Sac ksnee se ceen seen wae eeskseeness 16
Associated General Contractors of California, Inc. v.

Carpenters, 459 U.S. 519 (1983)... ............. 19
Atlantic & Gulf Stevedores, Inc. v. Ellerman Lines,

Limited, 369 U.S. 355 (1962) ......... cc eee eens 18
Bailey v. Chattem, Inc., 838 F.2d 149 (6th Cir.), cert.

denied, 486 U.S. 1059 (1988) .............000e. 27,28
Brown v. Marshall, 704 F.2d 333 (6th Cir.) (per

curiam), cert. denied, 464 U.S. 835 (1983)........ 20
Browning-Ferris Industries v. Kelco Disposal, Inc.,

Cae ee ee CUED 4h0 5 Che ed des eweceseectucsas 17,20
California v. American Stores Co., _.. U.S. ___,

be We Gis Se CEN 66 be cabeasteneseuesanes 26

Chiropractic Cooperative Ass'n of Michigan ov.
American Medical Ass'n, 867 F.2d 270 (6th Cir.

I ee ts ei oe ee ee arr ed 20
Continental Ore Co. v. Union Carbide & Carbon

Cn, Te Ce ee SE 6 0 6.0 5d 50.00 6a oh bee ces 15
Fairmount Glass Works v. Cub Fork Coal Co., 287

i Se ee ee eet 18
FTC v. Superior Court Trial Lawyers Association,

nun Woe , 110 S. Ct. 768 (1990) ............ 24

1 &

Gallick v. Baltimore & Ohio Railroad Co., 372 U.S.
PG Te 6 ne ie ia eee ioe eas 21

General Industries Corp. v. Hartz Mountain Corp.,
oe me ie hy ) Pre 24

H&J, Inc., v. International Tel. & Tel. Corp., 1991-1
CCH Trade Case £69,327 at 65,264 (8th Cir. 1991) 27

Handgards v. Ethicon, Inc., 743 F.2d 1282 (9th Cir.
1984), cert. denied, 469 U.S. 1190 (1985) ........ 27,28

Hensley v. Eckerhart, 461 U.S. 424 (1983) ........ 26,27

Kaiser Aluminum & Chemical Corp. v. Bonjorno,
waves Wis canis NEO es Go DO AE i baer ca toes 28

Kerasotes Michigan Theatres, Inc. v. National
Amusement. Inc., 854 F.2d 135 (6th Cir. 1988)... 22

Arthur S. Langenderfer, Inc. v. S.E. Johnson
Company (Langenderfer I), 729 F.2d 1050
(6th Cir.), cert. denied, 469 U.S. 1036
SRO Se ey al a ee EW ee ee ee passim

Arthur S. Langenderfer, Inc. v. S.E. Johnson
Company, 1987-2 Trade Cases (CCH) {67,858
(N.D. Ohio 1987) (Interest Opinion)............. 1

Arthur S. Langenderfer, Inc. v. S.E. Johnson
Company, 684 F. Supp. 953 (N.D. Ohio 1988) (Fee

RRS Scar anisole sve aoe ee ae eee ]

Arthur S. Langenderfer, Inc. v. S.E. Johnson
Company, 1987-i Trade Cases (CCH) 67,553
(J.N.O.V.— New Trial Opinion)................. 1

Arthur S. Langenderfer, Inc. v. S.E. Johnson
Company (Langenderfer II), 917 F.2d 1413
Oe ee ee ee ee ee ye passim

Matsushita Electric Industrial Co. v. Zenith Radio
Corp, 475 U.S. O76 COGR). wo cc ce censsccs 4,13,14

xi.
McKinnon v. City of Berwyn, 750 F.2d 1383 (7th
MR ER ip een pu Pas ae ee a a ee 17,18
McLaughlin v. Liu, 849 F.2d 1205 (9th Cir. 1988)... 14

Nissho-Iwai Co., Ltd. v. Occidental Crude Sales, 729

Poe A ee OO, SO oe cs oe ws wee ee ee 20
Parsons v. Bedford, 28 U.S. 433 (1830) ............ 18
Priddy v. Edelman, 883 F.2d 43% (6th Cir.

LS a eae RC tas ak se eee yea aera 20
Singleton v. Wulff, 428 U.S. 106 (1976)... .......... 20
Smith v. Illinois Central Railroad Co., 394 F.2d 254

CEE ONIN Se a to dates Olay o aie no ote shane we xis 15
Standard Oil Co. v. United States, 221 USS.

| MEER ards 4 4-4 he ee a Rae ee ee eee 22
United States v. Grinnell Corp., 384 U.S. 563

EE os po ee RR OGD oak Cea hee ae ae 21

Young v. Central Railroad Co., 232 U.S. 602 (1914)... 18

Statutes, Constitution and Rules

Clayton Act §4(a), 15 U.S.C. §15(a)............. 2,19,26
snerman Act $2, 16 U.S.C. 92... 0.5... n ces eus 2,11,26
ee ara EE oo pc coe shee ak eases ee ee 2
Ae WU SUE 2 oo 5 ebb cas vives eeereg nena 16
28 Re 8 2 er err ere fre 18

U.S. Const., Amend. VII..... 2,4,13,14,17.18,19,21,25,29

xii.
Treatises and Law Journals

9 C. Wright & Miller, Fed. Prac. and Proc. §2536,
. : rr s eer eee acs

11 C. Wright & Miller, Fed. Prac. and Proc. §2803,
MM 8. os 00s cu yea cee a

S. DeSanti & W. Kovacic, ‘Matsushita: Its
Construction And Application By the Lower
Courts,’ 59 Antitrust Law Journal 609

(errr e ry se eee eee ee ee

J. Stempel, ‘“‘A Distorted Mirror: The Supreme
Court's Shimmering View of Summary Judgment,
Directed Verdict, and the Adjudication
Process,’ 49 O.S.L.J. 95 (1968)... 0... ween eaee

14

14

No.

IN THE

Supreme Court of the United States

October Term, 1990

ARTHUR S. LANGENDERFER, INC., NORTHERN
OHIO ASPHALT PAVING CO., MACRITCHIE
MATERIALS, INC., M & B ASPHALT CO., and
G. M. SADER EXCAVATING & PAVING CO.,

Petitioners,
Vs.

S. E. JOHNSON COMPANY, S. E. JOHNSON
COMPANIES, INC., THE OHIO ENGINEERING
COMPANY, FRED R. CREAGER & SONS, INC.,
MATCO, ASPHALTIC CONCRETE PRODUCING
CO., OAMCO, INC, C. P. CALAWAY, _INC.,
MAUMEE STONE COMPANY, MICHIGAN STONE
COMPANY, WOLCOTTVILLE SAND & GRAVEL
CORP., SAXON DEVELOPMENT COMPANY,
STONECO, INC. and J. T. KIRKBY,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE UNITED
STATES CourRT OF APPEALS FOR THE SIXTH CIRCUIT

PETITION FOR A WRIT OF CERTIORARI

The petitioners, plaintiffs below, Arthur S.
Langenderfer, Inc., Northern Ohio Asphait Paving
Company, MacRitchie Materials, Inc., M&B Asphalt Co.,
Inc., and G.M. Sader Excavating and Paving Co., Inc.,
respectfully request that a writ of certiorari issue to
review the judgment and decision of the United States
Court of Appeals for the Sixth Circuit entered on
October 29, 1990, reversing jury verdicts for the second
time.

OPINIONS BELOW

The opinion of the Court of Appeals is reported at
917 F.2d 1413 (‘Langenderfer IT’) and appears in the
Appendix hereto at Al-71.' The district court rendered a
written opinion appended hereto (AQ91) denying
respondents’ motions for j.n.o.v. or a new trial. That
opinion is unofficially reported at 1987-1 CCH Trade
Cases 467,553. The attorney's fee and costs opinion of
the district court affirmed by the Court of Appeals is
reported at 684 F. Supp. 953 (N.D. Ohio W.D. 1988)
(A102). The district court's Interest Opinion is
unofficially reported at 1987-2 CCH Trade Cases £67.45
(A98). The earlier opinion of the Court of Appeals
in this case is reported in 729 F.2d 1050 (6th Cir.), cert
denied, 469 U.S. 1036 (1984) (‘‘Langenderfer ]°’).

JURISDICTION

The judgment of the Court of Appeals was entered
on October 29, 1990 (A72). A timely petition for rehearing
and suggestion for rehearing en banc was denied on
January 23, 1991 (A122). The jurisdiction of this
Court is invoked under 28 U.S.C. §1254(1).

‘Citations to the Appendix to this petition are in the following form

(‘A_”). The pages in the Joint Appendix in the Court of
Appeals are cited as “JA,” with original transcript page citations
appearing as “TR_..’ Exhibit references are PX for plaintiffs

(petitioners) and DX for defendants (respondents). Emphasis ‘is
petitioners’ unless otherwise noted.

2
CONSTITUTIONAL PROVISION INVOLVED

The action of the Court of Appeals in reversing
unanimous jury verdicts directly involves the application
of the Seventh Amendment to the Constitution of the
United States which provides that:

In Suits at common law, where the value in
controversy shall exceed twenty dollars, the right of
trial by jury shall be preserved, and no fact tried by
a jury shall be otherwise reexamined in any Court of
the United States, than according to the rules of the
common law.

STATUTES INVOLVED

The suit involves applications of Section 2 of the
Sherman Act, 15 U.S.C. §2, Section 4(a) of the Clayton
Act, 15 U.S.C. §15(a) and the Federal Interest Statute,
28 U.S.C. §1961. These statutes appear at A1l24-25.

STATEMENT OF THE CASE
A. Overview of the Decision Below

This fifteen year old Sherman §2 monopoly case has
been tried twice and each time a different but unanimous
jury has found for plaintiffs (the petitioners) and
returned substantial damages. Each time a different trial
judge has overruled defendants’ (respondents’) motions
j.n.o.v. and for a new trial, holding that the juries’
verdicts were supported by the evidence and the law.
Now for the second time, the Sixth Circuit Court of
Appeals (two of the same judges? sitting) has overturned
the result below (with one exception) largely on the
grounds of insufficient evidence. ‘‘[W]hen two juries have
reached substantially the same result, the possibility of a
miscarriage of justice is very slight.” 11 C. Wright &
Miller, Fed. Prac. and Proc. $2803, p. 35 (1973). The
District Judge found no ‘miscarriage of justice’’ and
sustained the verdicts below (A91-97).

* The same two appellate judges formed the majority which reversed
plaintiffs’ unanimous verdicts on both appeals in Langenderfer ], 729
F.2d 1050 and Langenderfer I], 917 F.2d 1413. The same judge wrote
che opinion each time.

i

The Sixth Circuit reversed and vacated actual
damage verdicts aggregating $2,425,000, thereby
awarding nothing to four of the plaintiffs and reducing
the award to the fifth plaintiff, Langenderfer, by two-
thirds to $471,104. All plaintiffs participated within the
contiguous thirteen county relevant market in
Northwestern Ohio that the Court found the defendants
monopolized. From 1972 to 1985, defendants
monopolized 75% to 85% of all Ohio Turnpike paving
and 40% to 80% of all Turnpike and State (ODOT)
paving in that market (PX 69SA, 71A, C). After eighteen
years, defendants’ monopoly remains intact today.

In overturning the jury’s verdicts and the trial
court’s rulings, the Court of Appeals sua sponte decided
legal and factual issues not raised or preserved below
and never argued on the appeal. It violated the traditional
and generally accepted rules of appellate procedure
and limited review. It redetermined damages although
the amount of damages had not been challenged. It
totally missed a key relevant product market issue and
misconceived the application of law to relevant
geographical markets which changed the outcome of the
case, all in disregard of the jury’s express findings in
answers to special interrogatories drafted by defendants.
It substituted its judgment for that of the factfinder. Its
lengthy opinion (Al1-71) is replete with de novo
factfinding premised on: theories and arguments never
advanced by defendants; defendants’ evidence rejected
by the jury; improper inferences, misconceptions and
self-contradictory conclusions drawn from conflicting
evidence; and a general disregard of the plaintiffs’ key
evidence which has been ‘accepted by two different and
unanimous juries, two different trial judges, and even by
the Sixth Circuit itself in Langenderfer I, 729 F.2d at
1053-54.

We respectfully submit that the Sixth Circuit’s
announced vision of ‘‘economic reality’ is an
unwarranted extension of the summary judgment
standard that this Court enunciated in Matsushita

4

Electric Industrial Co. v. Zenith Radio
Corp., 475 U.S. 574 (1986), and deprives
plaintiffs of appellate due process and violates the
Seventh Amendment to the Constitution of the United
States which guarantees ‘‘that the right of trial by jury
shall be preserved, and no fact tried by a jury shall be
otherwise reexamined in any court of the United States,
than according to the rules of the common law.” This
Petition raises serious Constitutional and antitrust issues
which implicate a Court of Appeals’ power to disregard a
jury’s express findings of fact. The questions presented
have far-reaching application to all appeals from jury
verdicts and do not just apply in antitrust cases. The
broad policy issues at stake here require the Supreme
Court’s review in the exercise of its supervisory
responsibilities over the appellate courts.

B. The Parties

Petitioners and plaintiffs below, Arthur S.
Langenderfer, Inc. (‘‘Langenderfer’’), Northern Ohio
Aspha't Paving Company (‘“NOAP’), MacRitchie
Materials, Inc. (‘“MacRitchie Materials’), M&B Asphalt
Co., Inc., (“M&B"’), and G.M. Sader Excavating and
Paving Co., Inc. (‘‘Sader’’) all competed against the
defendants in the asphalt paving market within a
contiguous area of thirteen counties in Northwestern
Ohio surrounding Toledo (e.g., PX 1).

Langenderfer was in the asphalt highway paving
business for 65 years in the thirteen counties until driven
out by defendants in 1978 (JA 734-35; TR 163-64).
NOAP_ produced the hot mix asphalt used _ by
Langenderfer in its paving business until driven out in
1980. MacRitchie Materials owns a quarry at West
Millgrove which supplied road stone and sand to
Langenderfer and NOAP for paving and asphalt
production. Langenderfer, NOAP and MacRitchie
Materials were sister companies, all commonly owned by
the MacRitchie family (JA 734-38, 749; TR 163-67, 178).

5

M&B was also an asphalt paver which competed
against defendants and owned a single hot mix asphalt
plant at Maple Grove, within the thirteen counties (JA
1831-33, 1858-68; TR 1789-90; 1815-25). Sader was a
small paving contractor in the Bowling Green area which
competed against defendants on private and_ local
government paving projects. Sader had no asphalt plant
or quarry and depended on defendants’ Portage (near
Bowling Green) quarry and asphalt plant until
defendants cut him off in 1983 (JA 1127-43, 1167-171;
TR 758-74, 798-802).

Defendants are a ciosely held, commonly owned
enterprise resulting from thirteen acquisitions managed
as an integrated unit by defendant John T. (Ted) Kirkby,
their chief executive officer since 1957. ‘‘Kirkby, both
individually and as chief officer of Johnson, intended to
eliminate competition and dominate the market.”
Langenderfer II, 917 F.2d at 1443 (A60);
Langenderfer I, 729 F.2d at 1054. The principal
defendant companies are asphalt pavers S.E. Johnson,
Ohio Engineering and Fred Creager & Sons, Inc.; Matco
and OAMCO, which supply hot mix asphalt to the
paving defendants; Maumee Stone, Michigan Stone and
Wolcottville S&G, which supply stone and sand to
Matco, OAMCO and the defendant pavers; and C.P.
Calaway, a bridge building subsidiary of S.E. Johnson.
Two months before the trial of Langenderfer I,
defendants acquired Union Quarries Co., a_ fully
integrated competitor, for $3.5 million cash. A year before
the retrial in Langenderfer II, defendants acquired Allen
County Aggregates and Dailey Asphalt for another $3.5
million cash (729 F.2d at 1053-54; JA 2044-47, 2102,
2197-2205; TR 2098-2101, 2156, 2251-59; PX3).

C. The Jury’s Specific Findings

The unanimous jury found in answers to special
interrogatories drafted by defendants that: defendants’
thirteen acquisitions of asphalt pavers, quarries and sand
pits ‘‘were all made to exclude and/or injure competition

6

and increase Johnson’s power which he succeeded in
doing’; the acquisitions enabled defendants to
monopolize and attempt to monopolize Turnpike and
ODOT asphalt paving work and the _ highway
construction materials (asphalt, stone and sand) used
therein in a thirteen county market in Northwestern
Ohio where plaintiffs competed; defendants’ monopoly
power was willfully acquired, maintained or used through
anticompetitive conduct in all the relevant markets
pursuant to a specific intent to achieve a monopoly; and
defendants’ anticompetitive conduct injured all five
plaintiffs in the aggregate sum of $2,475,000 actual
damages (Ans. to Itgs. 1-18; A74-84). The trial court
found on post-trial motions that the evidence was
sufficient in all respects to sustain the jury’s findings
(A91).

D. The Asphalt Paving Industry in Northwestern Ohio

Limestone and sand are the principal ingredients of
asphaltic concrete (asphalt, or hot mix) and essential to
asphalt paving. A ton of asphaltic concrete consists of
approximately 60% stone, 40% sand and 6% liquid
asphalt (which evaporates in the mixing process at an
asphalt plant). Limestone and sand are also used in the
base (underlying) course of road building over which the
surface course of hot mix asphalt is laid. Consequently,
control of stone quarries, sand pits and asphalt plants is
important to asphalt paving.

Highway asphalt paving work is administered and
paid for by governmental bodies which invite competitive
bids on specifications from paving contractors who are
required to supply all the necessary highway
construction materials (hot mix, stone and sand), labor
and supervision at per-unit prices specified in the
winning bid. The larger volume work is performed by
prequalified contractors on Federal and State highway
jobs which are closely specified and administered by the
Ohio Department of Transportation (“ODOT’’) and the

7

Ohio Turnpike Commission (‘“‘OTC’’) with substantial use
of Federal funds (JA 773, TR 202; 729 F.2d at 1052-53).
The costs of the essential raw (stone and sand) and
processed materials (hot mix) and of hauling them to the
job site are the major expenses in performing these
contracts. In order to minimize the expense, the paving
contractor normally tries to buy his materials from
the quarry or hot mix plant closest to the job site. The
practical effective radius of a hot mix plant is about 25-
30 miles because of the haul cost involved and the
specified temperature at which the product must be
delivered (JA 761, 1044, 1869-70; TR 190, 620, 1826-27;
729 F.2d at 1053). Defendants, through a series of
acquisitions, now control seven quarries, two sand pits
and fourteen hot mix plants strategically located
throughout the area and are obviously the dominant
factor in this regional industry (729 F.2d at 1052-53).

E. The Relevant Markets

The jury answered all seven special interrogatories
drafted by the defendants on the issue of relevant
markets in plaintiffs’ favor. They found that the relevant
product markets were Turnpike and ODOT asphalt
paving contracts and the supply of stone, sand and
asphalt used in performing the contracts (Ans. to Itgs. 1-
7; A74-78). The trial court overruled defendants’
motion j.n.o.v. on the relevant market issues (A94, n.3).
Defendants stipulated the ODOT/OTC asphalt paving
market in the thirteen counties in the Langenderfer I
appeal. 729 F.2d at 1052-53. The Court of Appeals herein
“conclude[d] that this thirteen-county ODOT/OTC
asphalt paving market is established.’’ 917 F.2d at 1440;
A54.

F. Defendants Deliberately Obtained Monopoly Power
Through Thirteen Anticompetitive Acquisitions

The jury, asked to describe one or more types of
defendants’ anticompetitive conduct, expressly found
that “‘the acquisitions were all made to exclude and/or

8

injure competition and increase Johnson's power which
he succeeded in doing” in the relevant markets (Ans. to
Itg. 10; A811). The Court of Appeals found that
“acquisitions by defendants of quarry sites coupled with
the use of lengthy non-competition agreements and other
circumstances did foreclose production and efficient use
of such quarries and limestone by Langenderfer and
others as competitors of defendants.” 917 F.2d at 1443;
A61. The evidence fully supported these conclusions.
Starting in 1957, defendants deliberately engineered the
thirteen acquisitions, on both a horizontal and vertical
basis, of its major paving competitors and suppliers of
limestone, sand and asphalt (JA 2081-2110, 2146-2213;
TR 2135-64, 2200-67; 729 F.2d at 1053-54; PX 3).

1. Acquisitions of essential quarries, sand pits and
bridge building capacity foreclosed competition.

The raw material acquisitions of quarries and sand
pits gave defendants a captive supply of stone and sand
for their own asphalt paving purposes and choice
locations for placing asphalt plants, while becoming
stone supplier to their asphalt paving competitors. 729
F.2d at 1054. Defendants sold stone and sand at high,
rigid and non-competitive prices to’their competitors who
no longer could get discounts from the formerly
independent quarries and sand pits (e.g., JA 840-45; TR
269-74). After defendants’ acquisition of bridge builder
Calaway, it no longer did bridge work for, nor
subcontracted paving to, plaintiffs and other asphalt
paving competitors (JA 822, 2084-86, 2501; TR 251,
2138-40, 2615).

2. Acquisitions of asphalt paving competitors were
anticompetitive and monopolistic.

In the face of a shrinking market (1969), defendants
decided it was good business to acquire asphalt paving
competitors to expand their market share by doubling
capacity (JA 2156-58; TR 2210-12; PX 3). The

9

acquisitions were accompanied by non-compete
agreements; were admittedly without’ business
justification or need; were designed to prevent
competitors’ expansion; or were otherwise made to
prevent competitors from price-cutting or competing (JA
2156-67; TR 2210-21).

In summary, defendants grew from two quarries and
three hot-mix plants to seven quarries, fourteen hot mix
plants and three sand pits serving Northwestern Ohio
(729 F.2d at 1054; PX 3; JA 2077, 2192-93; TR 2131,
2246-47). Following defendants’ acquisitions, established
competitors avoided bidding against defendants, left the
market altogether or went out of business (JA 1117,
1143, 1539-40, 1801-02, 1852, 2262-64; TR 743, 774, 1399%-
1400, 1748-49, 1809, 2315-17; PX 16). Plaintiffs’ expert
economists testified that defendants’ anticompetitive
acquisitions created a monopoly, eliminated actual
competition, increased market concentration, prevented
potential competition, raised entry barriers, foreclosed
competition and enabled other anticompetitive conduct.
This reflected a deliberate, calculated strategy that drove
Langenderfer and NOAP out of the market, weakened
remaining competition and inflicted plaintiffs’ losses (JA
2640-2682, 2820-2875; TR 2874-2916, 3333-89).

G. Defendants’ Market Shares and Statistical Evidence
of Monopoly Power After the Acquisitions

After the acquisitions, defendants’ market shares
grew massively in Northwestern Ohio. They were the
leading ODOT contractor in the entire state for over
eighteen years (PX 37, 37A). Before the acquisitions,
they bid less than 40% of the Northwestern Ohio
market; afterwards thev bid 80% to 100% of the market
(PX 147A, 147S). Between 1972 and 1985, they averaged
between 75.8% and 85% of all revenues on Turnpike
work (PX 69, 69SA, 69B, 69C) and averaged 59% of all
ODOT/OTC paving (PX 73A). Their share of asphalt
tonnage rose from 40% in the 1970s to 48.3% in the
1980s (PX 30, 30A). In the 1970s and 1980s, defendants
controlled half of the important Toledo area stone

——

10

market (PX 145, 145A). Defendants’ pre-qualification
bidding power’ went from $13 Million in 1970 to $106
Million by 1986 (PX 68SB).

H. Defendants’ Size and Power Dwarfed All
Competitors

By 1985, defendants’ net worth had grown to $35
million; all seven major competitors together had net
worth of only $6.9 million (PX 110S). By 1985,
defendants’ total assets were over $47 million; all
combined competitors had $16 million (PX 112S). By
1984, defendants’ sales were 67% greater than the rest of
competitors combined (JA 2549, TR 2669; PX 113A-
114S). In the 1970s, defendants’ net profits more than
doubled; by 1984 they had doubled again (PX 115, 115A,
116A). In summary, defendants’ twenty year history
reflected phenomenal growth and massive economic
power (PX 117A):

Combined Defendant Companies
($000's omitted)
1965 1970 1975 1978 1985 Increase

Assets 5,668 11,374 19,089 25,320 47,154 732%
Net worth 4,222 9,117 15,865 21,495 35,270 735%
Total revenues 6,570 14,915 30,513 43,146 83,064 1164%
Profit before ;

income taxes 934 2,163 2,969 4,319 5,866 528%

For the period 1979-84, defendants’ cumulative net profit
totalled $12.9 million; all seven competitors together
equalled $637,000, and most competitors had severe
losses (PX 116A). By 1984, defendants controlled 87% of
the net worth among ODOT competitors; 71% of the
assets; 64% of the sales dollars; and 91% of the net
profit (PX 116B).

I. Abuses of Monopoly Power

There was direct evidence of defendants’ intentional
abuses and leveraging of monopoly power over the years
toward many competitors. Defendant Kirkby told his
*The dollar amount of ODOT paving work an ODOT-qualified

contractor could have in progress at any one time in a given year
(e.g., PX 68A-2).

11

Chairman of the Board that ‘‘in order to keep our
position in the business we had to be dominant”’; that he
bid at ‘‘zero profit’’ against Miller and Langenderfer ‘‘to
see just how tough the competition is’’; that he hated
competitors Miller and Langenderfer and would like to
run them out of business. Kirkby warned plaintiff M&B
to stay out of his “‘territory’’ and told Sader that “state
work’’ belonged to Johnson and that Sader should not
bid it (JA 1085-89, 1149, 1860-61, 2039-41, 2257-60; TR
685-89, 780, 1817-18, 2092-94, 2310-13).

In addition to the acquisitions, the trial court
submitted six kinds of anticompetitive acts to the jury:
(1) monopolistic stone pricing; (2) price or _ profit
squeezing and cross-subsidization; (3) leveraging its
position in ODOT and OTC; (4) tying the sale of stone
and sand to the sale of asphalt; (5) intimidating,
discouraging, coercing and _ retaliating against
competitors; and (6) refusal to sell stone to Sader (JA
216). The trial court also submitted to the jury the issue
of whether defendants’ refusal to deal with Sader was for
legitimate credit reasons or retaliation for testifying in
Langenderfer I (JA 216-17, 219). The jury found for the
plaintiff on all these matters. The evidence supported
these claims and the trial court so found in denying
defendants’ j.n.o.v. motion (A91).

J. The Proceedings and Disposition Below

Plaintiffs Langenderfer and NOAP filed the original

private antitrust action herein (‘‘Langenderfer J’’) in

1976, alleging that defendants had violated Section 2 of

the Sherman Act (15 U.S.C. §2) (JA 37-58). In March

1980, a unanimous jury of twelve returned a general

verdict in favor of plaintiffs for actual damages of

$982,117 (JA 59). District Judge Young denied

defendants’ post-trial motions, entered treble judgment

for $2,946,351, ordered injunctive relief and awarded

| attorney's fees and costs. Both sides appealed (JA 81-
105).

12

While the Langenderfer I appeal was _ pending,
plaintiffs Langenderfer and NOAP were joined by new
plaintiffs MacRitchie Materials, M&B and Sader in a
companion suit filed on December 23, 1983
(““Langenderfer II’’), for damages inflicted since 1980 by
the continuing monopoly.

On March 15, 1984 the Sixth Circuit (Judges
Wellford and Lively in the majority, Judge Wilhoit
dissenting), while recognizing that the evidence
supported plaintiffs’ claims of monopolization, reversed,
vacated the judgments and remanded Langenderfer I for
a new trial. Arthur S. Langenderfer, Inc. v. S.E. Johnson
Co., 729 F.2d 1050 (6th Cir. 1984), cert. denied, 469 U.S.
1036 (1984).

Langenderfer I and II were consolidated in a seven-
week jury trial before District Judge John W. Potter in
August-September, 1986. The second unanimous jury
returned general verdicts in favor of all five plaintiffs for
actual damages aggregating $2,425,000, unanimously
answering all of the 18 special interrogatories (including
60 subparts) in pleintiffs’ favor (A74-84; JA 251-75).
These interrogatories were in the form submitted by
defendants. Judge Potter trebled the damages, awarded
fees and costs, denied post-judgment interest to the
Langenderfer I plaintiffs and ordered injunctive relief.
He denied defendants’ post-trial motions for j.7.0.v. or a
new trial, finding the special interrogatory answers
consistent with the general verdicts in all respects
(A91). Appeal and cross-appeal to the Sixth Circuit
followed.

The Court of Appeals entered its Opinion and
Judgment on October 29, 1990 (A1-71). Plaintiffs’
timely Petition for Rehearing and Rehearing En Banc
was denied on January 23, 1991 (A122). The Court
refused to stay its mandate on February 12, 1991 despite
all parties requesting same. This is the second time
petitioners Langenderfer and NOAP have sought a writ
of certiorari in this Court.

|

13

REASONS FOR GRANTING THE WRIT

I. The Sixth Circuit’s Opinion Is An _ Implicit
Extension Of Matsushita In Violation Of The Seventh
Amendment.

The concerns vigorously expressed by the four
dissenting Justices (White, Brennan, Blackmun and
Stevens) in Matsushita Electric Industrial Co. v. Zenith
Radio Corp., 475 U.S. 574, 598-607 (1986) have come to
full flower on the instant appeal. Here, the Sixth Circuit
disregarded the jury’s findings expressed in answers to
special interrogatories and, through its own fact-finding
exercise and ‘‘economic theorizing,’ overturned jury
verdicts for the second time. The Sixth Circuit's opinion
is an implicit extension of Matsushita in violation of the
Seventh Amendment.

In Matsushita, a (5-4) majority of this Court held
that, on summary judgment, an antitrust plaintiff must
come forward with more persuasive proof than is
ordinarily required “if the factual context renders
[plaintiffs’} claim implausible—if the claim is one that
simply makes no economic sense[.]'’ 475 U.S. at 587. The
dissent was properly concerned that the Matsushita
majority made ‘‘a number of assumptions that invade
the factfinder’s province,’’ 475 U.S. at 599. The Sixth
Circuit’s review of the evidence herein went far beyond
anything this Court condoned in Matsushita.

This is not a summary judgment case. Plaintiffs
have passed the “‘plausibility’’ test time after time on
motions for summary judgment, directed verdict,
j.n.o.v./new trial, and most importantly before a jury that
returned answers to special interrogatories finding for
the plaintiffs. Although it may not raise constitutional
concerns for a court to find, at the summary judgment
stage, that ‘‘the factual context renders [a] claim
implausible,’ 475 U.S. at 587, such concerns are raised

14

where, as here, a jury, for the second time, has examined
the facts and found the claims not only plausible, but
real, based on all the evidence in a seven week trial.‘

The Sixth Circuit's sua sponte finding that
Langenderfer’s damage claims ‘‘simply fail to reflect
economic reality and we_ shall make adjustments
accordingly, (917 F.2d at 1444; A62) is the illegitimate
offspring of Matsushita. It baldly illustrates the extent
to which the Court went to impose its own views of
economic reality on a case where the factfinder had
already fulfilled its constitutional role. Instead of
reviewing the sufficiency of the evidence in the light
most favorable to plaintiffs, as it was required to do, the
Court felt free to weigh the plausibility of plaintiffs’
evidence, compare it with defendants’ evidence, and
make its own judgments about economic impact despite
the jury's findings to the contrary. Where a jury has
examined and found the facts, however, a reviewing
court has no business considering plausibility. Simply
put—does the Seventh Amendment permit a Court of
Appeals to overturn a jury’s express findings, based on
that Court's vision of ‘‘economic reality’? As hereinafter
discussed, the answer must be a resounding: ‘‘No.”’

‘Matsushita authorizes an inquiry on summary judgment into the
‘implausibility’ of inferences from circumstantial evidence, particularly
in antitrust conspiracy cases, not an inquiry into the credibility of
direct evidence.” McLaughlin v. Liu, 849 F.2d 1205, 1207 (9th Cir.
1988). See also DeSanti & Kovacic, ‘Matsushita: Its Construction
and Application By The Lower Courts,’ 59 Antitrust Law Journal
609, 628, 634, 641-43 (1990) (‘Lower court opinions reflect the tension
between the majority and minority opinions in Matsushita concerning
the extent to which a court must ‘weigh’ evidence and therefore
invade the province of the factfinder ...'); Stempel, ‘A Distorted
Mirror: The Supreme Court's Shimmering View of Summary
Judgment, Directed Verdict, and the Adjudication Process,” 49
O.S.L.J. 95, 164-68 (1988) (‘When the nature of ... (by extension
judgment n.o.v.) practice is changed, however, so that it involves a
judicial assessment of the correctness of competing questions of fact
existence and fact inference, the rock on which these cases (e.g.,
Matsushita) was built begins to crumble ... it would seem that these
new ... ground rules violate the Seventh Amendment.”’)

15

There can be no question that the Sixth Circuit
construed the facts in this case in disregard of the jury's
findings, scorning its own rules:

The Appellate Court must be governed by the rules
safeguarding the constitutional right of trial by
jury, which requires the Appellate Court to take the
strongest legitimate view of all the evidence to
uphold the verdict; to assume the truth of all that
tends to support it, to discard all to the contrary,
and to allow all reasonable inferences to sustain the
verdict.

Smith v. Illinois Central Railroad Co., 394 F.2d 254, 256-
57 (6th Cir. 1968). The jury may not have believed a
word defendants’ witnesses said, as the Court instructed
was their right (JA 203). For the Sixth Circuit to credit
any of defendants’ witnesses was the plainest
invasion of the jury's factfinding responsibilities.

The Court of Appeals utterly failed to consider the
case as a whole. It studied each of the five plaintiffs,
issues and markets independently in a vacuum, as
though one had nothing to do with the other. It failed to
consider the overall impact of defendants’ monopoly and
all plaintiffs’ proof contrary to the trial court’s charge
(JA 204). As stated in Continental Ore Co. v. Union
Carbide & Carbon Corp., 370 U.S. 690, 698-99 (1962):

It is apparent from the foregoing that the Court of
Appeals approached Continental’s claims as if they
were five completely separate and _ unrelated
lawsuits. We think this was improper. In cases such
as this, plaintiffs should be given the full benefit of
their proof without tightly compartmentalizing the
various factual components and wiping the slate
clean after scrutiny of each.

|

16

These principles were reaffirmed in Aspen Skiing Co.
v. Aspen Highlands Skiing Corp., 472 U.S. 585, 599
(1985) but the Sixth Circuit steadfastly ignored them in
the appeal at issue.*

In short, the principal reason for granting the writ in
this fifteen year old case is to protect the constitutional
right to trial by jury and preserve the integrity of the
appellate process. The Langenderfer 1] Court of Appeals
trampled on the unanimous jury findings and
disregarded traditional concepts of appellate
procedure—a precedent, which if allowed to stand, will
hereafter plague the course of innumerable appeals and
judicial supervision of jury verdicts. The Court of
Appeals literally “‘... has so far departed from the
accepted course of judicial proceedings ... as to call for
an exercise of [the Supreme] Court's power of
supervision” (S.Ct. R.10.1(a)). Plaintiffs have no other
remedy for the fundamental violation of _ their
Constitutional rights by a Court of Appeals than review
by this Court.

*'fThe trial court herein submitted six specific categories of
defendants’ anticompetitive conduct to the jury and found them
supported by the evidence in its post trial rulings (JA 216; A91). The
Sixth Circuit, however, treated each one separately for each of
plaintiffs’ claims and found that the plaintiffs had failed to prove
monopolistic stone pricing, price squeezing and tying in various
respects. This was contrary to the teaching of Aspen where the Tenth
Circuit had held:

Plaintiff's evidence should be viewed as a whole. Each of the six
things [alleged anticompetitive acts] viewed in isolation need
not be supported by sufficient evidence to amount to a §2
violation. It is enough that taken together they are sufficient to
prove the monopolization claim. Aspen Highlands Skiing Corp.
v. Aspen Skiing Co., 738 F.2d 1509, 1522, n.18 (10th Cir. 1984),
aff'd 472 U.S. 585, 599 (1985).

ee

17

II. The Seventh Amendment Precluded The Court
Of Appeals From Sua Sponte Reviewing Any Issues Of
Langenderfer’s Damages Or Indirect Injury To NOAP.
The Issues Were Never Raised By Motion Below; They
Were Never Assigned As Error, Briefed Or Argued On
Appeal.

The appellate court sua sponte disregarded
unanimous jury damage verdicts and ridiculed plaintiffs’
proofs. It then waded into the record and redetermined
damages to suit itself and cut Langenderfer’s award by
two-thirds, stating ‘‘that some of the dollar figures
offered by plaintiffs and their experts simply fail to
reflect economic reality and we shall make adjustments
accordingly’’ (917 F.2d at 1444; A62). A new day has
dawned, if Courts of Appeals can now fix the amount of
damages in jury cases. “It is not our role to review
directly the award for excessiveness, or to substitute our
judgment for that of the jury.” Browning-Ferris
Industries v. Kelco Disposal, Inc., 492 U.S. 257, __,
109 S. Ct. 2909, 2921 (1989). The Court candidly set out
to re-do the jury’s job: to evaluate the alternate methods
of proof, to sift and weigh the evidence, to draw
inferences, to judge credibility, and to decide what was
reasonable under all the circumstances after making its
own “realistic allocations,’ 917 F.2d at 1444-47; A61-66.

A. The Court of Appeals effectively directed a
damage verdict for a reduced sum.

Under the Seventh Amendment, no appellate court
has the power to redetermine damages.*® ‘“‘The Seventh
Amendment reserves the determination of damages, in
jury trials within its scope, to the jury.’’ McKinnon v.

*The Supreme Court only recently noted that ‘‘we have never held
expressly that the Seventh Amendment allows appellate review of a
district court's denial of a motion to set aside an award as excessive”
although it has twice granted certiorari to consider the issue but
never reached it. Browning-Ferris, 109 S. Ct. at 2922, n.25. Certainly the
time is ripe for review of this issue, especially when the defendants
never attacked the excessiveness of the verdict, by motion below or

on appeal.

18

City of Berwyn, 750 F.2d 1383, 1392 (7th Cir. 1984).
There is no point in having juries at all if appellate
courts can sua sponte disregard their findings of fact and
usurp the jury’s unique function in fixing damages. A
United States Court of Appeals has no jurisdiction to re-
examine facts tried to a jury. Parsons v. Bedford, 28
U.S. 433, 446-48 (1830); Atlantic & Gulf Stevedores, Inc.
v. Ellerman Lines, Limited, 369 U.S. 355, 363-64 (1962).
The Court of Appeals did not even have the right to
review the trial court’s denial of a new trial on damage
issues absent a clear showing of abuse of discretion,
which was never raised. In Fairmount Glass Works uv.
Cub Fork Coal Co., 287 U.S. 474, 481 (1933), it was
stated:

The rule that this Court will not review the
action of a federal trial court in granting or denying
a motion for a new trial for error of fact has been
settled by a long and unbroken line of decisions and
has been frequently applied where the ground of the
motion was that the damages awarded by the jury
were excessive or inadequate. The rule precludes
likewise a review of such action by a circuit court of
appeals.

What this appellate Court did is the equivalent of
directing a verdict in a reduced sum for the plaintiff
Langenderfer. The Court of Appeals cannot direct a
verdict in a jury case in view of the Seventh Amendment
prohibitions. See, Aetna Ins. Co. v. Kennedy, 301 U.S.
389, 392-94 (1937); Young v. Central Railroad Co., 232
U.S. 602, 603-604 (1914). The Court of Appeals had no
power to vacate or reduce the aggregate judgment for
Langenderfer and NOAP. This Court should correct such
a flagrant disregard of the Seventh Amendment as an
admonition to those courts that might be tempted to
stray from Constitutional orthodoxy. We submit that the
Court of Appeals’ conduct is so far outside the accepted
confines of the Seventh Amendment and appeilate
procedure that its rulings overturning damage verdicts
should be summarily vacated and judgments of
$1,675,000 for Langenderfer and NOAP reinstated. S.Ct.
Rule 16.1.

|

19

B. The Sixth Circuit’s review likewise deprived
petitioners of appellate due process.

The Court’s bold usurpation of the jury's unique role
is all the more astonishing because defendants did not
move for directed verdicts, j.n.o.v., or new trial on the
issue of damage amounts or NOAP'’s standing (JA 2901-
48, 3721-3752; JA 283-86) and never presented, briefed or
argued those non-issues as error on the appeal. See,
Defendants’ ‘“‘Issues Presented”’ (A 126-27).
Consequently, plaintiffs never even had a chance to
argue or defend against the Court of Appeals’ gratuitous
and startling findings. In similar vein, the Court of
Appeals held (917 F.2d at 1437-38; A47-50) that
plaintiff NOAP had only been indirectly injured under
the standing doctrine of Associated General Contractors
of California, Inc. v. Carpenters, 459 U.S. 519, 538-40
(1983) and could not recover antitrust damages under
Clayton §4, even though the defendants had never raised
NOAP'’s standing as a defense at trial or by motion, and
never presented or argued it on appeal.’ Once again,
plaintiffs had no chance to argue the issue. This kind of
appellate conduct is shocking and should be ‘nipped in
the bud,” lest other courts find its exercise tempting.

The common law proscription referred to in the
Seventh Amendment iimits appellate review to issues
properly raised below or on appeal. Defendants
repeatedly waived these issues and the Court of Appeals
violated traditional standards of appellate due process
and the limited scope of review (including its own) in
even considering such issues.

It is the general rule, of course, that a federal
appellate court does not consider an issue not passed
upon below. In Hormel v. Helvering, 312 U.S. 552,

"Defendants waived NOAP’s standing years ago in Langenderfer I
and never raised it on retrial. In fact, in the special interrogatories
and general verdict forms drafted by defendants, they combined
Langenderfer and NOAP and treated them as one party for findings
and verdict purposes (Ans. to Itgs. 1-7, 12, 17, 18; A75-78, 81, 83, 84).

20

556 (1941), the Court explained that this is
“essential in order that parties may have the
opportunity to offer all the evidence they believe
relevant to the issues ... [and] in order that litigants
may not be surprised on appeal by final decision
there of issues upon which they have had no
opportunity to introduce evidence.'’ We have no idea
what evidence, if any, petitioner would, or could,
offer in defense of this statute, but this is only
because petitioner has had no opportunity to proffer
such evidence. Moreover, even assuming that there
is no such evidence, petitioner should have the
opportunity to present whatever legal arguments he
may have in defense of the statute.

Singleton v. Wulff, 428 U.S. 106, 121 (1976).

“The clear rule is that appellate courts do not
consider issues not presented to the district court.”
Brown v. Marshall, 704 F.2d 333, 334 (6th Cir.) (per
curiam), cert. denied, 464 U.S. 835 (1983). The appellate
court will not review issues not specifically preserved by
mouons for a directed verdict, j.n.o.v. or new trial. 9 C.
Wright & Miller, Fed. Prac. & Proc. $2536, p. 593 (1971).

In the case at hand, not only did defendants fail to
raise the subject issues of damages and NOAP’s
standing at the trial but they failed to present or argue
them in the Sixth Circuit appeal. See, Defendants-
Appellants’ Issves Presented (A126). ‘“‘[AJn
[appellant's] original brief abandons all points not
mentioned therein,’’ Nissho-Iwai Co., Ltd. v. Occidental
Crude Sales, 729 F.2d 1530, 1539 n.14 (5th Cir. 1984);
Priddy v. Edelman, 883 F.2d 438, 446 (6th Cir. 1989).°

*The Sixth Circuit has declined to decide an issue even where the
parties had briefed the issue because it had not been ‘‘specifically’’
appealed. Chiropractic Cooperative Ass'n of Michigan v. American
Medical Ass'n, 867 F.2d 270, 277 (6th Cir. 1989). Recently, this Court
has declined to address an argument because the defendant failed to
raise it properly in the district court or on appeal. Browning-Ferris,
supra, 109 S. Ct. at 2921.

Ee

21

The issues were never before the appellate court. The
court's gratuitous reversal of jury awards in these
circumstances violates cardinal principles limiting the
scope of review to issues properly raised and argued. If
courts of appeals can ignore their own rules and sua
sponte overturn jury verdicts at will, the Seventh
Amendment has become a dead letter.

Ill. The Appellate Court Again Violated The
Seventh Amendment When It Re-Examined The Jury's
Relevant Market Findings. Defendants’ Monopolization
Of ODOT/OTC Asphalt Paving And Materials Used
Therein As Found By The Jury Is Sufficient To Sustain
The Claims Of All The Plaintiffs.

The Court of Appeals decision raises important
issues of antitrust law in the process of contravening the
jury's findings of fact. Perhaps the most important is
that, although the Court of Appeals affirmed, as to
plaintiff Langenderfer, the jury’s finding that defendants
monopolized and attempted to monopolize a contiguous
thirteen county area in Northwestern Ohio (917 F.2d at
1440; A54), it rejected that same finding when it
reversed awards to two other plaintiffs (M&B and Sader)
who competed against defendants within the same
thirteen counties on the grounds they did not each prove
separate relevant geographical markets as to the lesser
included counties.’ In short, the Court of Appeals
ignored the ‘‘economic reality’’ that the total includes the
sum of its parts, contrary to United States v. Grinnell
Corp., 384 U.S. 563, 576 (1966) which held:

* The trial court properly instructed the jury on the relevant thirteen
county market and submarkets within it (JA 209-211). It was
defendants who concocted a confusing interrogatory asking the jury
to ‘‘state the relevant market or submarket of each plaintiff.’ Thus,
the jury may very well have found submarkets for each plaintiff. The
jury's answers to special interrogatories must be reconciled if at all
possible with the general verdicts (as the trial court did) when ‘‘there
is a view of the case that makes the jury answers to special
interrogatories consistent."’ Gallick v. Baltimore & Ohio Railroad Co.,
372 U.S. 108, 119 (1963). The Court of Appeals flatly ignored that
principle.

22

... the relevant market for determining whether |
the defendants have monopoly power is not the
several local areas which the individual stations
serve, but the broader national market that reflects
the reality of the way in which they built and
conduct their business.

The rejection of this principle will have far-reaching
consequences and affect the trial of many antitrust cases
for years to come wherever relevant market issues and
multiple plaintiffs are involved.

The appellate court also ignored the anticompetitive
leverage that defendants’ thirteen county monopoly
exerted over the individual counties within the thirteen.
As the Sixth Circuit itself stated in Kerasotes Michigan
Theatres, Inc. v. National Amusement, Inc., 854 F.2d
135, 137 (6th Cir. 1988):

To run afoul of the antitrust laws, it is not
necessary that the party attempting to leverage its
monopoly power from a given market [the 13
counties] into a second market [a cluster of counties
within the 13] possesses monopoly power or
dominant market position in that second market. . .
We expressly reject the district court's reasoning
that leveraging or the abuse of monopoly power is
not actionable when the offender has not yet
acquired a dominant position in the affected market.

Since the relevant geographical market was the only
issue defendants successfully appealed against M&B, if
this ruling is reversed, M&B’s actual damages of
$350,000 should be reinstated.

Finally, the Court of Appeals ignored the jury's
explicit findings that defendants monopolized and
attempted to monopolize the raw materials (stone, sand
and asphalt) that went into (called “inputs’’) asphalt
paving of Turnpike and ODOT jobs,"* and instead, held

’°The jury's finding that defendants monopolized the “inputs” is
fully supported by the landmark case of Standard Oil Co. v. United
States, 221 U.S. 1, 77 (1911):

(Footnote continued on following page.)

reer

23

that plaintiffs were required to prove that defendants
monopolized or attempted to monopolize the production
of all stone and sand in the thirteen counties whether or
not used in OTC/ODOT work. The jury did not find that
defendants monopolized the production of all stone,
sand and asphalt but only that which was used in
OTC/ODOT paving contracts as plaintiffs had claimed
(Ans. to Itg. 9; <A80). Consequently, the Sixth
Circuit overturned the result below on a non-sequitur—a
finding that the jury did not even make! That is ‘point
blank” re-examination of the evidence in disregard of the
jury's fact-finding prerogative and it changed the whole
outcome of the case. A court of appeals is supposed to
determine if there is evidence to support the jury's
findings—not determine whether there is evidence to
support a finding they did not make.

IV. The Court Of Appeals Again Re-Examined The
Jury's Findings In Reversing Sader’s Judgment. Sader
Was Cut Off By The Monopolist Under A Sham Credit
Pretext; It Was A Jury Issue.

Defendants have had the only quarry and asphalt
plant at Bowling Green (Portage) for the last 25 years
after they acquired their only competitor in the area
(JA 1133-38, 2092-93; TR 764-69, 2146-47; PX 1, 3). As
the evidence proved, the jury found, and the trial court
held in its post-trial rulings, defendants controlled an
“indispensable facility which cannot be easily

(Footnote continued from preceding page.)

The inference that no attempt to monopolize could have been
intended, and that no monopolization resulted from the acts
complained of, since it is established that a very small
percentage of the crude oil produced was controlled by the
combination, is unwarranted. As substantial power over the
crude product was the inevitable result of the absolute control
which existed over the refined product, the monvpolization of
the one carried with it the power to control the other ....

Since defendants monopolized ODOT and Turnpike paving, they
supplied the “inputs” from their own seven quarries or fourteen
asphalt plants, thereby foreclosing the plaintiffs from supplying any
materials on those jobs.

diate rnenreneniennetill

24

duplicated.’ (A95; JA 515). As Sader testified, and
defendants admitted, Sader had to buy stone and asphalt
from defendants at Portage in order to compete against
defendants’ paving operation (JA 1138-42, 2213-15; TR
769-73, 2267-69). By the time Sader hauled stone or
asphalt the 30 extra miles round trip from other quarries
or plants, he could not compete effectively with
defendants who had cut off his local supply although he
did not owe them ‘‘a penny” (JA 1171-72; TR 802-03).

Sader did not have to prove production market
shares of stone and asphalt at Bowling Green, as the
appellate court held. Defendants were the only producer
(within 30 miles round trip); therefore, they produced
100% of all highway construction materials produced in
that area which Sader needed to compete with
defendants. The relevant market was _ self-defining.''
Documented statistical expert or market share data
evidence is not necessary if the impression from the
evidence as a whole is one of dominance. General
Industries Corp. v. Hartz Mountain Corp., 810 F.2d 795,
806 (8th Cir. 1987).

Although relevant geographic markets are not
‘susceptible to a (precise) metes and bounds’”’
definition, ‘‘the appropriate market is characterized
as the area in which the seller operates and to which
the purchaser can practically turn for supplies.”
United States Steel Corporation v. FTC, 426 F.2d
592, 596 (6th Cir. 1970), citing Tampa Electric Co. v.
Nashville Coal Co., 365 U.S. 320, 327, 331 (1961).

It obviously was not practical for Sader to haul stone
and asphalt an extra 30 miles if he wanted to compete
with defendants’ paving operations. The jury was
justified in finding defendants’ dominance in the Bowling

'' This Court's recent decision in FTC v. Superior Court Trial Lawyers
Association, _ U.S. __., 110 S. Ct. 763, 781, n.18 (1990)
acknowledged that ‘the fact of agreement defines the market.’ Here,
too, the undisputed fact of defendants’ control of an indispensable
tacility defines the defendant-controlled market in which Sader was
injured.

25

Green area through its control of an essential facility.
The Court of Appeals had no business second-guessing
that finding as it once again did.

The true Sader issue, as the Court of Appeals
recognized (917 F.2d at 1425; A22), was whether
defendants terminated Sader for legitimate credit
reasons or in retaliation against him for testifying in
Langenderfer I and to hurt him competitively. The
credibility and demeanor of witnesses, the pattern of
events and the good or bad faith of the defendants’
employees in using credit as a disguise for their
anticompetitive conduct was peculiarly a jury issue, as
the trial court found (A94-95). Defendants’ oppressive
credit tactics (which the Court of Appeals naively
accepted at face value as ‘‘commercial and credit
controversies ... not aris[ing] in an antitrust context,’
917 F.2d at 1426; A 23-24) were a smoke screen to cover
up the animus the jury found.

We do not see how the Sixth Circuit can be
“persuaded” that Sader’s claim has ‘‘arguable merit”’
(917 F.2d at 1425; A22) and then hold it was not a jury
question. The only way it could reach its legal conclusion
is by weighing the evidence which was the jury’s sole
prerogative under the Seventh Amendment. This it was
not permitted to do. Sader’s actual damages of $250,000
should be reinstated and affirmed.

V. The Court’s Refusal To Award Attorneys’ Fees
Or Costs To The Prevailing Plaintiff For The First Nine
Years Of This Case Is Contrary To Law, Unconscionable
On Its Face And Exhibits Hostility To Private
Enforcement Of The Antitrust Laws.

The Court of Appeals affirmed the trial court’s
refusal to award any attorneys’ fees and costs to the
successful antitrust plaintiff, Langenderfer, for the first
nine years of its fifteen years of legal effort in

26

~Langenderfer I. This demonstrates a patent hostility to

the private enforcement of the antitrust laws that this
Court should not countenance and is squarely opposed to
the Congressional intent in enacting Clayton §4."

Under the Court’s holding, the one successful
antitrust plaintiff, Langenderfer, who has prosecuted a
bitterly-fought case against an entrenched monopolist
over fifteen years, cannot even recover fees for drafting
the original complaint and the filing fee it paid when it
commenced action in 1976. All the discovery efforts and
legal proceedings in Langenderfer I that contributed to
the ultimately successful result go unreimbursed. This is
an outrageous’ holding—compeiling this Court's
supervisory review of such a precedent. The trial court's
holding that as a matter of law claims in Langenderfer I
and Langenderfer II were ‘‘distinct in all respects”’ (684 F.
Supp. at 957) is fatuous by ary standard. The trial court
itself had consolidated the two cases for trial because
they had common questions of law and fact respecting
defendants’ monopolization through acquisitions in
violation of Sherman §2. This decision standing alone is
precedent busting and should be summarily reversed. It
makes a laughingstock of this Court’s attorney fee
decisions, including Hensley v. Eckerhart, 461 U.S. 424,
435 (1983), on which it purports to rely. As Hensley
stated:

In other cases the plaintiff's claims for relief will
involve a common core of facts or will be based on
related legal theories. Much of counsel's time will be
devoted generally to the litigation as a whole,
making it difficult to divide the hours expended on a
claim-by-claim basis. Such a lawsuit cannot be
viewed as a series of discrete claims. Instead the
district court shall focus.on the significance of the
overall relief obtained by the plaintiff in relation to
the hours reasonably expended on the litigation.

a = ee * * *
'2**Private enforcement of the Act was in no sense an afterthought; it
was an integral part of the congressional plan for protecting
competition. California v. American Stores Co., 110 S. Ct. 1853, 1860

(1990).

————wE——

27

... [T]he fee award should not be reduced simply
because the plaintiff failed to prevail on every
contention raised in the lawsuit. Litigants in good
faith may raise alternative legal grounds for a
desired outcome, and the court’s rejection of or
failure to reach certain grounds is not a sufficient
reason for reducing a fee. The result is what
matters.

The trial court’s refusal to award any fees or costs
for the first nine years of legal effort in this case, now
affirmed by the Sixth Circuit, manifests an antipathy to
the private enforcement of the antitrust laws in direct
violation of the Congressional intent and a defiance of
this Court's clear command in Hensley. The holding will
plague attorney fee and cost issues in fee-shifting cases
for year to come. Such a shocking precedent should not
be allowed to stand without the Court's closest scrutiny.

VI. Refusel To Allow Postjudgment Interest On
The Original Langenderfer I Judgment Reinstated By
The Langenderfer II Judgment Is Contrary To Binding
Precedents In The Sixth Circuit And Presents A Direct
Conflict With The Eighth And Ninth Circuits.

The Sixth Circuit’s affirmance of the trial court's
refusal to allow postjudgment interest on the amount of
the original Langenderfer I judgment dating from 1980
(917 F.2d at 1447; A69) conflicts with decisions in
the Eighth and Ninth Circuits. H&J, Inc. v. International
Tel. & Tel. Corp., 1991-1 CCH Trade Cases 469,327 at
65,264 (8th Cir. 1991); and Handgards v. Ethicon, Inc.,
743 F.2d 1282 (9th Cir. 1984), cert. denied, 469 U.S. 1190
(1985). It is also squarely opposed to the principles
recently enunciated by the Sixth Circuit itself in Bailey
v. Chattem, Inc., 838 F.2d 149, 154 (6th Cir.), cert.
denied, 486 U.S. 1059 (1988), where it held:

[T]hat when the measurement of damages found by
a second, properly instructed jury includes within it
a lesser amount of damages which was also found by

28

the jury in the first trial, considerations of equity
lead us to run interest on that lesser amount from
the date of the first judgment.

In applying the ‘equity of the statute approach,”’ which
the Court of Appeals rejected below, Bailey embraced
the reasoning of the Ninth Circuit in Handgards, supra, a
private antitrust case procedurally identical to the
instant case. Bailey, 838 F.2d at 154.

This Court's recent decision in Kaiser Aluminum &
Chemical Corp. v. Bonjorno, _ U.S. , 110
S. Ct. 1570 (1990), does not directly address the issue in
question. It is, nevertheless, an important issue, certain
to recur when any cases are retried and the same or
larger judgments are awarded on retrial. Because the
Court of Appeals did not discuss its own binding
precedents, petitioners are at a loss to construe or
even understand why the Sixth Circuit disregarded
Bailey. Post-judgment interest on Langenderfer’s original
judgment should have been granted. This decision
presents an irreconcilable conflict with the Eighth and
Ninth Circuit decisions cited above. This Court’s review
is essential to resolve the conflict among Circuits and
provide a helpful guide to inferior courts where retrials
frequently occur ard the same or larger judgments are
obtained.

29
CONCLUSION

Many parties complain before the Supreme Court
that they have not had a fair trial. Here, the petitioners
complain that they have not had a fair hearing on
appeai—twice. The same two appellate judges that
reversed the unanimous jury verdict in Langenderfer I
formed the majority which reversed the jury verdicts
again in Langenderfer II. This time they created new
arguments that had never been raised and ignored the
jury's explicit findings—but the result was substantially
the same.'* This Court of Appeals decision, in re-retrying
the facts de novo, represents an unprecedented invasion
of the jury's province and a flagrant disregard of the
scope of limited review binding appellate courts. This
Honorable Court should review this result or it will be
cited for years to come as precedent to ignore the
Seventh Amendment and well-accepted standards of
appellate review.

There is no question that the Sixth Circuit rewrote
the facts the jury had found. Its seventy-one page
opinion is prima facie evidence of that fact if any is
needed. In doing so, it took the strongest view of the
defendants’ evidence and assumed the truth thereof,
discarded or paid mere lip service to plaintiffs’ evidence,
and reached every possible inference and factual
conclusion to overturn, rather than uphold, the jury’s
verdicts.

'’The irony of the Court of Appeals’ conduct is striking. In
Langenderfer I, the same two judges reversed the jury verdicts and
ordered a retrial because without answers to interrogatories they
could **... not discern whether the jury verdict was based on legally
insufficient proof of predatory pricing or on the other allegations of
anticompetitive acts.’ 729 F.2d at 1058. Now, in Langenderfer II, 917
F.2d 1413 (Al), when the jury answered eighteen special
interrogatories (and 60 subparts) in plaintiffs’ favor supporting every
element of the case, the same Court brushed them aside in itsown re-
examination of the evidence and did not credit those answers anyway.

30

We believe, however, that, in the exercise of its
supervisory responsibility over the courts of appeals, the
integrity of the jury system is of such consummate
importance to the Supreme Court that it will not allow
an opinion to stand that wasted the services and findings
of two unanimous juries and two different trial judges,
misconstrued the facts and misapplied the law,
considered issues not properly before it and deprived
these petitioners of their constitutional rights after they
have acted as private attorneys general at great personal
sacrifice over many years. To award no fees or costs for
nine years of legal effort is the ultimate injustice.
Petitioners respectfully request that this Honorable
Court grant this Petition for Certiorari to safeguard
petitioners’ constitutional rights for themselves and for
all those future parties whose rights are seriously
threatened by the unreviewed decision of the Court of
Appeals. We believe the Court’s decision is so contrary
to elementary principles on its face that it warrants the
extraordinary remedy of summary reversal and
reinstatement of judgments for all the petitioners.

April 11, 1991
Respectfully submitted,

JAMES M. PorTER

Counsel of Record

SQUIRE, SANDERS & DEMPSEY
1800 Huntington Building
Cleveland, Ohio 44115

(216) 687-8500

Attorneys for Petitioners

Of Counsel:

WALTER J. RexsTISs, III
Eric M. OAKLEY
VIRGINIA A. SEGER
ELIZABETH A. RADER

Al

APPENDIX

OPINION OF THE COURT OF APPEALS
FOR THE SIXTH CIRCUIT

(Dated October 29, 1990)

RECOMMENDED FOR FULL TEXT PUBLICATION
See Sixth Circuit Rule 24

Nos.
87-3543/3577/3881 /3882/88-3126/3127/3574/3651

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

aN Nh ONAL LAO ee

4

ARTHUR S. LANGENDERFER, INC.;
NORTHERN OHIO ASPHALT PAVING
Co.; MACRITCHIE MATERIALS, INC.;
M & B AspPHALT Co., INc. and
G.M. SADER EXCAVATING &

PAVING, INC.,
Plaintiffs-A ppellees,
Cross-Appellants,
¥.
S.E. JOHNSON Co.; OHIO ON ApPEAL from the
emeenen Co: PRICE | United States District
BROTHERS, INC.: FRED CREAGER & | Court for the North-
Sons, INC.; MATCO ASPHALTIC ern District of Ohio

CONCRETE PRODUCTS Co.;
OAMCO,; C.P. CaLaway, INC.;
MAUMEE STONE Co.; MICHIGAN
STONE CO.; WOLCOTTVILLE SAND &
GRAVEL CorpP.; STONECO, INC.;
SAXTON DEVELOPMENT Co. and
J. T. Kirsy,
Defendants-Appellants,
Cross-Appellees.

iil

A2
Decided and Filed October 29, 1990

Before: MARTIN and WELLFORD, Circuit Judges; and
LIVELY, Senior Circuit Judge.

WELLFORD, Circuit Judge. The parties in this antitrust
controversy are, or were at One time, involved in businesses
related to road and highway construction in northwestern
Ohio. Plaintiff Arthur S. Langenderfer, Inc. (Langenderfer)
was an asphalt paving contractor that ceased operations in
1978, allegedly due to defendants’ antitrust violations.
Northern Ohio Asphalt Paving Co. (NOAP), a sister company
of Langenderfer, is an asphalt producer. Langenderfer and
NOAP were the original plaintiffs in a related case,
Langenderfer v. S.E. Johnson Co., 729 F.2d 1050 (6th Cir.),
cert. denied, 469 U.S. 1036 (1984) (Langenderfer 1), a case
in which this court vacated judgment based on a verdict in
favor of plaintiffs and remanded for a new trial.

I. GENERAL BACKGROUND

While the Langenderfer I appeal was pending, the original
plaintiffs were joined by other plaintiffs in a companion case,
and when Langenderfer I was decided and a remand effectu-
ated, the separate actions were consolidated. One of the
“new” plaintiffs is MacRitchie Materials, Inc. (MacRitchie),
a limestone supplier and sister company of Langenderfer and
NOAP that was denied leave to intervene in Langenderfer
I. See 729 F.2d at 1060. The other new plaintiffs are M&B
Asphalt Co., Inc. (M&B), an asphalt producer, paving con-
tractor, and limestone quarry operator, and G.M. Sader Exca-
vating & Paving Co., Inc. (Sader), an asphalt paving and
excavating contractor. The defendant companies (which shall
be referred to collectively as “Johnson”) are commonly
owned, and are involved in various aspects of the road con-
struction business. Defendant John T. Kirkby is the president
of Johnson and chief executive officer of the Johnson entities.

A3

In the Langenderfer I triai, plaintiffs relied largely on evi-
dence of alleged predatory pricing in bidding on public road
projects. Plaintiff introduced no evidence to indicate that
defendants’ bids were less than defendants’ total average
costs, and we held that the trial court did not instruct the
jury properly on the legal standard for a predatory pricing
antitrust violation. Because the predatory pricing claim could
not stand separately as a matter of law, and because it was
unclear whether the jury verdict was based on predatory pric-
ing or on other alleged anticompetitive behavior, we vacated
the judgment in favor of plaintiffs in Langenderfer I, and
remanded for a new trial. We noted that in order to prevail
on a claim of monopolization or attempt to monopolize,
plaintiff must “establish that Johnson engaged in some type
of prohibited anticompetitive conduct.” 729 F.2d at 1054-55.

Plainuffs in the current action allege that the defendants
violated §2 of the Sherman Act by monopolizing and
altempting to monopolize “the production and supply of
highway construction materials and in the bidding, construc-
tion and repair of asphalt highways” in a thirteen-county area
cof northwest Ohio. These highway projects were adminis-
tered on acompetitive bidding basis by the Ohio Department
of Transportation (ODOT) and/or the Ohio Turnpike Com-
mission (OTC). Defendants assert once again in defense of
the charges that Johnson’s success relative to the plaintiffs
was the result of better foresight and management, which led
to diversification, improved efficiency, and lower costs.

The allegations of plaintiff Sader differed significantly from
those of the other plaintiffs, because Sader was not an actual
competitor in ODOT/OTC work. Instead, Sader did mostly
private paving work, but alleged that it relied on Johnson
for raw materials, and that Johnson terminated Sader’s credit
in retaliation for the testimony of Sader’s president, Gregory
Sader, in Langenderfer I. Johnson maintained, on the other
hand, that the credit cut-off was for legitimate business rea-

A4

sons. We shall deal with the claims of each of the plaintiffs
independently.

The jury made the following findings, after submission of
special interrogatories:

1. As to all plaintiffs except Sader, relevant product mar-
kets included limestone, sand, and asphalt used in ODOT
and OTC paving contracts, as well as the ODOT and OTC
paving contracts themselves.

2. The relevant geographic market for a// plaintiffs was the
thirteen-county area.

3. Defendants possessed monopoly power, defined as “the
power to control prices or exclude competition,” in all of the
relevant product markets, and that power was willfully
acquired, maintained, or used through anticompetitive con-
duct. Asked to describe one or more types of anticompetitive
conduct, the jury replied, “The acquisitions were all made
to exclude and/or injure competition and increase Johnson’s
power which he succeeded in doing.”

‘The jury instructions listed the following six alleged anticompetitive
acts:

1. Monopolistic stone pricing;

2. Price or profit squeezing and cross-subsidization;

3. Leveraging its position in ODOT and OTC;

4. Tying the sale of stone and sand to the sale of asphalt;

5. Intimidating, tiscouraging, coercing and retaliating against

competitors;

6. Refusal to sell stone to Sader.

Defendants assert that because the jury’s above-reflected response

to the interrogatory did not list any of these six alleged anticompetitive
acts, its findings were not consistent with a violation of the antitrust

laws. The tral court found, however, that the jury’s response to this
“one or more” question was not inconsistent with the general verdict.

A5

4. Defendants’ monopolization caused injury to all of the
plaintiffs (including Sader).

5. Defendants possessed the specific intent to achieve a
monopoly in all of the relevant markets, engaged in anticom-
petitive conduct toward that end, and there was a dangerous
probability that they would achieve a monopoly.

6. Defendants’ attempt to monopolize caused injury to all
of the plaintiffs (including Sader).

7. Damages (before trebling) were $1,675,000 for Lan-
genderfer and NOAP; $200,000 for MacRitchie; $350,000
for M&B; and $250,000 for Sader.

The trial court entered judgment in accord with the verdict,
trebling the damages found by the jury, and allowing payment
of interest at the annual rate of 5.79 percent until paid.

On appeal, defendants contend that as a matter of law, no

i10nopoly power may be found in the supply of sand, lime-

stone, asphalt, or in bidding and performance of state and
turnpike jobs.

In addition, defendants maintain that plaintiffs failed to
Support allegations of anticompetitive conduct, relying
instead on evidence of Johnson’s above-cost bids, contrary
to the holding of Langenderfer I. In addition, Johnson asserts
that the thirteen-county area cannot represent the relevant
market for M&B, which performs most of its work in only
two counties and has never actually worked in the majority
of the thirteen counties found to be the relevant market.
Johnson makes a similar contention as to Sader. As an affir-
mative defense, Johnson claims that MacRitchie lacks anti-
trust standing, and that Sader may not recover under § 2 of
the Sherman Act based on Johnson’s revocation of Sader’s
credit privileges.

The original Johnson Company was founded in 1929 by
Sherman Johnson, who died in 1956. The company then

A6

owned three stone quarries and three hot-mix plants, and was
the largest asphalt paving contractor in northwest Ohio. Fol-
lowing Mr. Johnson’s death, defendant Kirkby became the
principal operating officer in 1957. At that time, plaintiff Lan-
genderfer was the second largest asphalt paver in the area.
Beginning in 1961, Kirkby, as principal officer on behalf of
defendants, embarked on a series of acquisitions, described
by this court in Langenderfer I. 729 F.2d at 1053-54.

We vacated and remanded the first judgment because the
proper legal standards were not applied, particularly as to
predatory pricing. We stated, however, that there was
“[s]ubstantial evidence indicat{ing] that Kirkby, both indi-
vidually and as chief officer of Johnson, intended to eliminate
competition and dominate the market.” Langenderfer / at
1054. Furthermore, in the first appeal, we noted that there
was expert testimony by economists to the effect that John-
son’s acquisitions created “significantly increased market
concentration,” and therefore had a tendency to create a
“monopolistic market structure.” Jd. at 1054.

After remand by this court, plaintiffs amended their com-
plaint asserting that Langenderfer was a general paving con-
tractor until “forced out of business by the defendants? in
1978.” NOAP asserted that it was in the business of purchas-
ing sand and stone, mixing these at asphalt plants, and selling
the resulting materials to Langenderfer, asphalt pavers, and
others. These plaintiffs asserted that Johnson, Ohio Engineer-
ing, and Creager were competitors in constructing and repair-
ing highways and roads in northwestern Ohio with
Langenderfer, and that “business is generally performed. . .

*Defendants named were the Johnson companies, Ohio Engineering
Co. (Ohio), Fred R. Creager & Sons, Inc. (Creager), Matco Asphaltic
Concrete Producing Co. (Matco), OAMCO, !nc. (OAMCO), C.P.
Calaway, Inc. (Calaway), Maumee Stone Co. (Maumee), Michigan
Stone Co. (MSC), Wolcottville Sand & Gravel Corp. (WAS&G), Saxon
Development Co. (Saxon), Stoneco, Inc. (Stoneco), and J.T. Kirkby.

A7

after competitive bidding by the governmental authorities.”
Langenderfer alleged that it “customarily carried on its pro-
curement of materials through plaintiff NOAP.” Plaintiffs
averred that to minimize costs, “the paving contractor nor-
mally purchases highway construction materials for the
quarry or asphalt pliant located closest to the job site.”

Defendants were charged with “unlawfully combining in
restraint of interstate trade and conspiring to monopolize and
attempt to monopolize . . . in the production and supply of
highway construction materials and in the bidding, construc-
uon and repair of asphalt highways.” In addition, plaintiffs
charged that defendants quoted and charged them higher
prices for stone, sand, or asphalt than those charged to defen-
dant paving contractors. They also charged defendants with
refusing to sell these materials, tying sales of stone and sand
to asphalt, and other “predatory” practices, including forcing
competitors out of the sand, stone, and asphalt business by
these practices, all done with requisite anticompetitive
intent.

Defendants denied the charges of unlawful anticompetitive
conduct and averred that a corporate restructuring took place
in 1986 leaving S.E. Jason Companies, Inc. as the only active
Johnson entity with wholly owned subsidiaries Creager,
Stoneco (formerly Oamco, Inc.), and Alloy Founders.?

A basic issue in the retrial of this case arose in defendants’
motion to exclude evidence of alleged predatory bidding by

3Defendants also responded that Ohio & Metro “no longer exist,”
and that Caluway “is currently an inactive corporation” (as of July
1986). Johnson answered that Maumee & MSC merged into it; that
WAS&G “operated a sandpit in Indiana and became inactive and is
now inactive, but that WAS&G's assets, after reactivation, were trans-
ferred into Stoneco.” Defendants further answered that Saxon “is inac-
tive and has no current business activities.” Kirkby was alleged, in the
answer, to have owned less than a five percent interest in Johnson at
all relevant umes.

A8

reason of our holding in Langenderfer I. The district court
agreed with plaintiffs and held bidding practices admissible
because such practices may “portray the effects of defendants’
iong term monopolization of this market.”* Even if some of
the evidentiary emphasis in the second trial was on the
asserted predatory bidding practices of defendants, and this
is a separate charge from monopolization or attempted
monopolization, we find the ruling to permit such evidence
not to be prejudicial error under all the circumstances. It is
clear, nonetheless, that a considerable portion of plaintiffs’
proof was directed towards defendants’ low bidding proce-
dures, and plaintiffs, as well as their experts, relied heavily
on this testimony throughout, despite defendants’ objections.

Section 2 of the Sherman Act makes it unlawful for any
“person” to “monopolize, or attempt to monopolize, or com-
bine or conspire . . . to monopolize any part of the trade
or commerce among the several States.” In construing a § 2
claim, the Supreme Court has held that a plaintiff must estab-
lish “(1) the possession of monopoly power in the relevant
market, and (2) the willful acquisition or maintenance of that
power as distinguished from growth or development as a con-
sequence of a superior product, business acumen, or historic
accident.” United States v. Grinnell Corp., 364 U.S. 563, 570-

“We do not endorse the reason given by the district court for this
ruling. While we find no error in the holding that evidence of bidding
practices may be relevant and admissible, we do not believe, as
asserted, that its exclusion would be to “direct a verdict for
defendants.” We held in Langenderfer | that bidding “above the fota/
average costs” of defendants was not an antitrust violation under the
Sherman Act, and that the proper test for anticompetitive conduct in
that regard was not whether defendants’ bids were “above competitors’
costs.” 729 F.2d at 1055. The effect of Langenderfer I, it should be
observed, was to set aside the judgment based upon plaintiffs’ asserted
cause of action for predatory pricing, which was the thrust of the first
trial and appeal. The district court, however, charged the jury to the
above effect. Plaintiffs’ experts emphasized what they perceived to be
low bidding and “predatory pricing” conduct of defendants.

A9

71 (1966). Such prohibited power includes “power to control
prices or exclude competition.” Grinnell Corp., 384 U.S. at
571; United States v. E. I. duPont, 351 U.S. 377, 391 (1956).

Il. STANDARD OF REVIEW

Defendants’ appeal is from the district court’s denials of
the motion for directed verdict and for judgment notwith-
standing the verdict. In considering a motion for directed ver-
dict, “the trial court ‘must determine whether there was
sufficient evidence presented to raise a material issue of fact
for the jury.’ ” Milstead v. International Brh. of Teamsters,
580 F.2d 232, 235 (6th Cir. 1978), quoting O'Neill v. Kiled-
jian, 511 F.2d 3511, 513 (6th Cir. 1975). Sufficient evidence
“is such that, when viewed in the light of those inferences
most favorable to the nonmovant, there is either a complete
absence of proof on the issues or no controverted issues of
fact upon which reasonable men could differ. Appellate courts
apply this same standard.” Milstead, 580 F.2d at 235 (cita-
tions omitted) (emphasis added). This same standard applies
to motions for judgment n.o.v. Morelock v. NCR Corp., 586
F.2d 1096, 1104 (6th Cir. 1978), cert denied, 441 U.S. 906
(1979).

We therefore consider whether plaintiffs have carried their
burden of showing monopoly power and anticompetitive
conduct. '

[A]s the case is presented to us, we must interpret
the entire record in the light most favorable to
[plaintiffs] and give to [them] the benefit of all infer-
ences which the evidence fairly supports, even
though contrary inferences might reasonably be
drawn... .

Moreover, we must assume that the jury followed
the court’s instructions.

Aspen Skiing Co. vy. Aspen Highlands Skiing Corp., 472 U.S.
585, 604 (1985), citing Continental Ore Co. v. Union Carbide
& Carhon Corp, 370 US. 690, 696 (1962).

rarer

Al0

In applying the Aspen Skiing standard to the facts submit-
ted to the jury, it is worth noting that this is the second jury
to find in favor of plaintiffs Langenderfer and NOAP with
regard to elimination of competition and domination of the
market claims.

Once the jury has acted, we set aside its verdict and the
district court’s refusal to grant a j.n.o.v. motion only if we
are satisfied, upon a thorough review of the record, that error
has been committed. We also give plaintiffs the benefit of
reasonable and favorable inferences that may be drawn from
the evidence. We may not pass upon credibility of witnesses
in making this review. To the extent, of course, that the dis-
trict court drew or made legal conclusions based on the jury’s
responses to interrogatories, we may review decisions of law
de novo.

lil. M & B CLAIM

M & B has been in the asphalt paving business in several
Ohio counties since about 1957. According to plaintiffs’
exhibit i and the record, it has a base of operations only in
Seneca County, Ohio, where it has maintained one or two
asphalt plants over the approximately twenty-five years of
its existence prior to the filing of this antitrust action in
December 1983 against defendants. Seneca County is located
in the extreme southeast corner of the thirteen-county rele-
vant market as determined by the jury at trial.

In its brief in this cause, M & B maintains that over the
entire relevant time period, it has bid in six counties. Its chief
financial officer and one of its two principal operators, Robert
M. Chesebro, however, testified that during the twenty year
period up to 1980, it did 95 percent of its work in Seneca
County and in adjacent Sandusky County.® Throughout, its
“base of operations” remained in these two counties.

5In a deposition, Chesebro stated that this two county area remained
“pretty constant.” He also stated that “Seneca and Sandusky Counties

All

M & B’s plant and an available quarry at Bloomville are
very near adjacent Huron and Crawford Counties, outside
the thirteen-county area. M & B also bid and did work in
Erie, Huron, and Crawford Counties, the latter adjacent io
Seneca County to the south and east (Erie County is adjacent
and east of Sandusky County). Chesebro testified he “very
seldom” operated in Wyandot County. Plaintiffs’ map identi-
fying batch plants, stone quarries, and sandpits in the area
in question in this litigation reflects that defendants have
never had a single plant, quarry or sandpit located in San-
dusky and Seneca Counties. It reflects, on the other hand,
that during the relevant period there were two independent
quarries located in Sandusky County, both available to M
& B. There have been three quarries located in Seneca
County, two of which were controlled by defendants’ primary
stone supply competitor, France Stone, and one belonging
to Basic, which was the principal source for M & B until M
& B acquired operating control of it in 1984. Chesebro con-
ceded that the three !argest quarries in the area cf his opera-
tion were France, National Lime & Stone, and Sandusky
Crushed Stone.

Plaintiffs also have a quarry at Rising Sun, very near both
Sandusky and Seneca Counties, and there have been two
other independent quarries located just south of the Seneca
County line. There were no figures produced showing the
san@ production in these two counties of base operations of
M & B. No sandpits in the two counties are reflected on plain-
tiffs’ exhibit 1. Since early 1984 at least, M & B has had its

account for over 90 percent of our work.” (emphasis added) (referring
to the entire relevant period). Defendants’ credit officer Uhl testified,
without contradiction, that M & B won bids on ODOT work in only
three counties Over twenty-plus years prior to trial. The amended com-
plaint asserted that M & B “engaged in business as a general paving
contractor principally in Seneca, Sandusky, and contiguous counties.”

ee

Al2

own supply of stone and sand, and it sells sand and limestone
to other contractors. There is simply no proof whatever that
defendants control or have any monopoly power over the
supply of stone and sand in the area in which M & B operated
from 1980 to the date of trial.®

The district court, in its jury instructions, presented M &
B’s alternative contention as to a relevant geographic submar-
ket to be Seneca, Sandusky, Ottowa, Wood, Hancock, and
Wyandot Counties, apparently those six counties in which
it had submitted bids. There was insufficient evidence in the
record to establish defendants’ monopoly or attempted
monopoly status in such a submarket, or that M & B was
a real and active competitor in this submarket or in a two-
county submarket during the relevant period. Two examples:
(1) defendants had no quarry or sand facility in Seneca, San-
dusky, Hancock, and Wyandot Counties in the southeast por-
tion of the thirteen-county alleged relevant market or
submarket areas; France and other independents had eleven
quarries in these four counties; (2) plaintiffs and others oper-
ated six asphalt plants and defendants operated two in these
four counties.

M & B claims that it was competing in a relatively free
and open competitive market in its two-county area from
1966 to 1970. In those five years it earned, without control
of any quarry or stone source, an average of less than $16,000
a year. During the years 1980 through 1986, for which it seeks
damages for alleged anticompetitive conduct, it earned an
average of over $16,000 in actual profits a year. Five of the

°M & B’s Chesebro testified also that M & B bought very little stone
from defendants’ quarry at Portage, and only on occasion. M & B
bought or obtained few materials from defendants and cannot fairly
be characterized as anything but a minor and infrequent customer.
Defendants’ alleged high stone prices, bringing about an alleged profit
squeeze, would therefore seem clearly not to bear on M & B’s situation
directly, if at all.

Al3

six years after 1979 were profitable, and there was an increase
in profit each year from 1982 through 1985. The loss year,
1981, when revenues were abnormally low, was due, in part,
to the bankruptcy of a large contractor customer. In 1981,
plaintiffs’ exhibit 152AA reflects that M & B claimed dam-
ages of over $124,000 in 1981 because it suffered a loss
instead of realizing the same 2.7 percent of pretax profit it
realized on much lower revenues in the 1966-70 period. This
loss is not explained in any fashion by M & B, and it defies
reason and logic to assume that its entire 1981 loss, almost
$77,000, plus another claimed amount of $47,000, was attrib-
utable somehow to defendants’ low bidding practices in the
southeast part of the thirteen-county area claimed by plain-
uffs to be the relevant market.

The proof in this case demonstrates, moreover, that on sev-
eral state asphalt paving jobs since 1980 in which M & B
was the only bidder, it claims to have lost money. Chesebro
also admitted that his company “always lost money on state
work.” It would seem illogical and unreasonable, then, to
blame defendants for continuing losses on state turnpike
work after 1980 under these circumstances, particularly in
light of the fact that M & B has had, since 1984, its own source
of stone and sand entirely independent of defendants’ sources
which are located outside of the area in which M & B does
from 90 percent to 95 percent of its work and has its base
of operations. ;

It does not carry the day on the issue of proving a relevant
market within the thirteen-county area of northwest Ohio for
M & B to argue that it is a “potential” competitor in the
majority of the thirteen counties in which it has not operated
at all for some thirty years of its existence at the time of the
trial. M & B, as pointed out, has done work and has been
an actual competitor with defendants, both before and after
1980, in basically only two counties. Contrary to M & B’s
assertions, we believe City of Cleveland v. Cleveland Electric
Illuminating Company, 734 F.2d 1157, 1166-67 (6th Cir.),

renee een

Al4

cert. denied, 469 U.S. 884 (1984), is of no comfort to M &
B’s contention about the proper relevant market in this case.
The market selected must “both ‘correspond to the
commercial realities’ of the industry and be economically
significant.” Id. at 1167 (quoting from Brown Shoe Co. v.
United States, 370 U.S. 294, 336-37 (1962)) (emphasis
added). The “commercial realities” here indicate strongly
that M & B is neither an actual nor potential competitor in
defendants’ area of service and operation in and beyond the
thirteen counties of northwest Ohio. Like the plaintiff in City
of Cleveland, M & B presented no evidence that it planned
to compete for business outside of Seneca and Sandusky
Counties and areas immediately adjacent thereto.

The evidence is also undisputed that during the period
from 1980 on there came about increased competition in the
immediate area of concern to M & B in the form of addi-
tional, substantial competitors in the marketplace for asphalt
paving. M & B had little actual competition with Price Con-
struction Co. when its assets were acquired in 1969 by
defendants.’ The elimination of Price and defendants’ acqui-
sition of Ohio Engineering Co. were more than offset by the
emergence of Miller and Gerken as serious competitors in
the area. Eric Blacktop, another asphalt paving contractor,
concededly also came into the M & B “bailiwick”—Seneca
and Sandusky Counties—after 1980 from time to time to bid
on projects in which M & B was interested. After 1980, in
jobs in which M & B and defendants bid, M & B was the
successful bidder in four of six projects.

It is not controverted but that M & B’s bids on a number
of jobs during the relevant period exceeded the State Engi-
neer’s estimate for these jobs. It is also not controverted that
M & B’s proportion of success on bids submitted on ODOT

Price did not sell its sand business to defendants; instead, defen-
dants agreed to continue buying sand from Price (and others).

Ald

and OTC work in its area of operations did not decrease after
1980 in comparison to earlier periods. There is also no sub-
stantial evidence that the number of bidders decreased from
1979 through the time of trial. This would clearly indicate
that M & 6 was not foreclosed, nor were others, from bidding
on the asphalt work which is the subject matter of this contro-
versy. It may also indicate that M & B’s costs, even after
acquiring its Own quarry source, are higher than other com-
petitive bidders in the marketplace. This evidence (and other
proof in the record) indicates a failure to prove dangerous
probability of success of monopolization by defendants in
the area in which M & B operated or that competitors were
driven from the market even after acquisitions were made
by defendants. It does reflect that the real basis of complaint
by M & B was the low bids submitted by defendants which
plaintiffs characterize as predatory bidding or pricing. It
should also be noted that this practice of low and successful
bidding by defendants has extended over twenty years in
northwest Ohio—some indication that it is not a short-range
procedure designed to raise prices later, as indicated by plain-
uffs’ experts.

With respect to M & B’s claims, we deem it appropriate
to note the recent comments of another court which dealt
with § 2 antitrust claims:

The “dangerous probability” element of the
attempted monopolization offense reflects the well-
established notion that section 2 of the Sherman Act
governs single-firm conduct only when it threatens
actual monopolization. Copperweld Corp. v. Inde-
pendence Tube Corp., 467 U.S. 752, 767, 104 S. Ct.
2731, 2739, 81 L.Ed.2d 628 (1984). The Sherman
Act protects competition, not competitors, and does
not reach conduct that is only unfair, impolite, or
unethical. United States v. American Airlines, Inc.,
743 F.2d 1114, 1119 (Sth Cir. 1984), cert. dismissed,
474 U.S. 1001, 106 S. Ct. 420, 88 L.Ed.2d 370

Al6

(1985). As we recently emphasized in Ball Memorial
Hospital, Inc. v. Mutual Hospital Insurance, Inc. , 184
F.2d 1325 (7th Cir. 1986),

“[c]ompetition is a ruthless process. A firm that
reduces costs and expands sales injures rivals—
sometimes fatally. The firm that slashes costs the
most captures the greatest sales and inflicts the great-
est injury. The deeper the injury to rivals, the greater
the potential benefit. These injuries to rivals are by-
products of vigorous competition, and the antitrust
laws are not balm for rivals’ wounds.”

Id. at 1338.

This is not to say that injury to rival firms cannot
ever lead to injury to consumers and that section
2 of the Sherman Act cannot be used to prevent such
injury. But section 2

“must be used with the greatest caution. Action that
injures rivals may ultimately injure consumers, but
it is also perfectly consistent with competition, and
to deter aggressive conduct is to deter competition.
Thus, the plaintiff faces a stiff burden in any section
2 litigation. ‘It is not enough that a single firm
appears to restrain trade unreasonably, for even a
vigorous competitor may leave that impression. For
instance, an efficient firm may capture unsatisfied
customers from an inefficient rival, whose own abil-
ity to compete may suffer as a result. This is the rule
of the marketplace and is precisely the sort of com-
petition that promotes the consumer interests that
the Sherman Act aims to foster. In part because it
is sometimes difficult to distinguish robust competi-
tion from conduct with long-run anticompetitive
effects, Congress authorized Sherman Act scrutiny
of single firms only when they pose a danger of
monopolization. Judging unilateral conduct in this

Al7

manner reduces the risk that the antitrust laws will
dampen the competitive zeal of a single aggressive
entrepreneur.’ ”

Id. (quoting Copperweld Corp. v. Independence Tube
Cob. 467 U.S. 752, 767-68, 104 S. Ct. 2731, 2739-
40, 81 L.Ed.2d 628 (1984)).

Indiana Grocery, Inc. v. Super Valu Stores, Inc., 864 F.2d
1409, 1413-14 (7th Cir. 1989) (footnotes omitted).

In summation, then, we conclude that M & B failed to
prove that it was realistically an economically significant
competitor or potential competitor in the thirteen-county
area Claimed to be a relevant market; nor did it establish any
claimed submarket in which defendants were shown to be
actual or potential monopolists. There was also a failure of
proof as to unfair competition or attempted monopoly by
defendants in the principal area of operation of M & B. The
undisputed material facts do not show that defendants have
had a dangerous likelihood of success in the elimination of
competition in M & B’s area of operations since 1980. On
the contrary, M & B has acquired control of a quarry site
and has enjoyed increasing profits over the last four years
for which proof was available through 1986. M & B did not
show that it ever depended upon defendants as a significant
source of sand or asphalt stone or other asphalt components,
or that defendants discriminated against it in pricing prod-
ucts or in not affording it competitive discounts. Defendants,
indeed, had no quarry or sand source in the primary area
of M & B’s operations—Seneca or Sandusky County. M &
B cannot reasonably claim the benefit of the testimony of
plaintiffs’ experts that defendants’ alleged “excessive profits
on the stone level” worked a price squeeze on M & B. The
primary evidence submitted by M & B, on the other hand,
was the same type of predatory pricing evidence which was
relied upon by Langenderfer in its original trial against defen-
dants and found by this court to be insufficient in

A18

Langenderfer I, 729 F.2d 1050 (1984), to establish a cause
of action as a matter of law under § 2 of the Sherman Act.
M & B’s attorney, in his closing statement to the jury, asked
for “$339,000 in damages for profits lost.” The jury awarded
M & B $350,000 in damages.

Under these circumstances, we must REVERSE the award
pursuant to the jury verdict rendered to M & B. It follows
that the award of attorneys fees and costs, based upon the
judgment for M & B as a prevailing party, must also be
reversed and set aside. M & B, of course, is therefore entitled
to no injunctive or equitable relief.

IV. SADER CLAIM

The jury found in favor of Sader but answered specific
interrogatories to the effect that there was no relevant market
proved as to this plaintiff consisting of limestone, sand, or
asphalt used in ODOT and OTC asphalt paving contracts
as in the case of the other plaintiffs. The jury also answered
interrogatories indicating that there was no relevant market
proved as to Sader consisting of either ODOT or OTC asphalt
paving contracts. The jury responded, however, that there
was “a relevant geographic market or submarket for Sader,”
and determined that market to be the thirteen counties
located in northwest Ohio. The jury found that acquisitions
made by defendants were “all made to exclude &/or injure
competition and increase Johnson’s power,” and that anti-
competitive conduct caused injury to Sader in the amount
of $250,000. In his final closing argument, Sader’s attorney
asked the jury for damages in the amount of $224,500.

Defendants argue on appeal that “Sader is neither a con-
Sumer nor a competitor in the relevant markets alleged.”
Defendants’ Brief at 45. Gregory M. Sader, principal owner
and officer of Sader since 1962, testified that he operates a
small paving and excavating business (9 employees) head-
quartered in Bowling Green, Wood County, Ohio, located

Al9

in the north central part of the thirteen-county area in contro-
versy. Sader is not ODOT “qualified,” and cannot bid on
ODOT or OTC asphalt paving contracts, although Sader does
subcontracting on ODOT work. Defendants further argue
that Sader failed to prove monopoly or attempted monopoly
in “the markets in which Sader competes.”

The brief filed on Sader’s behalf responds that the issue
in the case was whether “defendants’ refusal to deal with
Sader was for ‘valid business reasons’ or whether it was
unreasonable anticompetitive conduct as Sader contended.”
Sader argues that this was properly a jury issue. Sader con-
cedes it owned no quarry nor any asphalt plant, but asserts
it depended on defendants for “stone, sand and asphalt at
Bowling Green.” Contending that it is irrelevant that it did
not compete in the ODOT/OTC markeis against defendants,
Sader suggests that it was a “potential ODOT, OTC competi-
tor that was foreclosed.”

A number of factors with respect to Sader, as in the case
of plaintiff M & B, would weigh strongly against any sugges-
tion that Sader was, in reality, a potential competitor in the
ODOT/OTC market. At the time Sader filed the complaint
against defendants, it had been in business in the Bowling
Green area for more than twenty years; by the time of trial,
more than twenty-five years. It had never seriously sought
to compete in the ODOT/OTC market which was the basis
of the original monopolization complaint in this case. Sader,
moreover, never indicated that it intended to compete with
defendants beyond nearby Wood County, and the district
court instructed the jury that Sader claimed a relevant sub-
market of Bowling Green, Wood County, and southern Lucas
County.® Sader testified that his operation grew during the

®Sader stated that in recent years 90 percent of his work was in Wood
County and areas of nearby Lucas County. In earlier years he did work
within and without the wider thirteen-county area, but again mostly
in Wood County.

A20

1960s despite defendant Johnson’s acquisition of Wood
County Stone Company, his principal quarry source, in 1961.
(An independent operation, Urbana, had maintained a hot
mix plant at this site from which Sader acquired asphalt
“product” at the time.)® Stone was still made available to
Sader at this nearby Portage quarry by defendants, but with-
out the volume discount previously granted by Wood from
and before 1960. (For a further discussion of Portage quarry
cosis and prices, see Part V, infra.) Sader testified that the
“biggest majority” of his work was aiways in Wood and adja-
cent Lucas County (Toledo) with “emphasis” in Bowling
Green. In the 1960s, defendants’ OAMCO facility at Portage
and their Maumee Stone site became Sader’s chief suppliers,
but not of sand. Like many other asphalt pavers, Sader
trucked sand in from outside the thirteen-county area. Plain-
tiff MacRitchie Materials had a quarry at West Millgrove
some 15 to 20 miles away from construction sites in and
around Bowling Green. (Plaintiff also had a batch plant 15
miles away from Bowling Green at Waterville, and France
had a quarry there and another about the same distance at
Custor, the latter variously estimated at 15 to 17 miles from
Bowling Green.)’°

Sader testified that during the 1960s and 1970s, defendants
began to exert pressures on him in bidding “in his area.”
Sader also trucked sand for the Creager Company, which was
in financial difficulty when acquired by defendants in 1971.
We attribute little significance to the Creager acquisition”

*Urbana moved this plant away at the expiration of its lease. Sader
testified that its superintendent later was employed by defendanis.
Wood’s plant and equipment were taken over by Portage in 1964 or
1965.

°In cross-examining defendants’ expert, Dr. Myslinski, Sader’s
counsel referred to Pugh and West Millgrove quarries as being 12 to
15 miles away from Bowling Green.

‘ta pparently, defendants continued to operate Creager after acquisi-
tion as a non-union facility in contrast to its other facilities. Sader com-
plained this gave an advantage to defendants, but this has nothing to
do with anticompetitive conduct.

A2l

insofar as it relates to Sader, who summarized his complaint
about defendants generally by observing, “Johnson just
blocked us basically from growing on a normal, healthy busi-
ness way” during the late sixties and seventies. He also testi-
fied, moreover, that the plaintiff experienced difficulty in
scheduling delivery of materials from defendants. In !977,
Sader complained personally to Kirkby about scheduling
problems: “Ted said he would look into it, and see if he could
not get it straightened out” but the problem allegedly
continued.'? Sader also encountered difficulties in scheduling
rental trucks at times.

Sader complained about defendants’ hot asphalt prices and
the fact that, as with stone, they would not give him discounts
on this product. Sader also said that plans he had with others
in his same situation to set up an asphalt plant were discour-
aged by a threat that defendants “would not be able to supply
our stone needs.” Sader said he “pursued the plan” but never
carried it out. (Each of the four or five quarries located in
or very near the boundaries of Wood County had an asphalt
plant operating at the quarry—this included the defendants’
quarry at Portage.) Sader said that the planned source of
stone was defendants’ quarry at Maumee in Lucas County,
more distant from Bowling Green than at least four other
quarries which Sader characterized as not. being
“economically” located for his purposes.’? He added that
defendants’ representatives in 1977 and 1978 were pressing
for more asphalt business from him. He also claimed that
defendants refused in 1977 or 1978 to allow him “to set up
{a pugmiill for a Perrysburg job] on the Lime City quarry site.”
Instead, he set it up at a nearby France quarry and he bought
25,000 tons of stone from France instead of defendants.

2Sader admitted that most other “smaller pavers that worked the
area was [sic] having the same problems wiih scheduling.” Sader was
thus not singled out or treated discriminatorily in that regard.

‘3Sader conceded that he bought “very little” stone from Maumee.

A22

There is no doubt, however, that Sader’s primary com-
plaint, and the only one which we are persuaded has arguable
merit, is its claim that it was cut off from buying materials
because of cooperation with plaintiffs in pursuit of their
claims at the first trial, Sader avers that at or about the time
he agreed to give a deposition in that proceeding in 1979,
defendants’ credit representative called on him and told him
he expected a check on Sader’s account, and Sader agreed
to pay it within a month. Sader asserts that he paid the bill
of about $13,000, which he conceded was three months
overdue.** Sader attributes to his 1980 testimony for plain-
tiffs a much lower than expected Johnson bid on a Bowling
Green job which he subsequently lost. (He also claims that
Johnson improperly used information he gave to them on
this job to underbid him, Sader understanding at the time
that Johnson would not bid on this job.)

Later, in 1980, Johnson “made special credit
arrangements” for Sader, limiting his credit to $10,000
because Sader was persistently “slow pay.” It was during this
time that another dispute about credit arose between Sader
and defendants. Sader also had been severely restricted in
credit extended during 1982. Sader’s version of a major dis-
pute is that defendants furnished him defective asphalt for
a large private driveway Sader installed and that the customer

#4 monthly Uill on August 31, 1979 (Exhibit 9M) revealed that
Sader owed Maumee Stone Co. nearly $47,000, a considerable part
of which was at least 30 days old, and that in early September, Sader
paid some $11,000 on this bill; Sader satisfied this account the follow-
ing month, mid-October. Early in 1980, Sader’s account reflected over
$26,000 past due (up to 90 days) and he was warned, per telephone,
that the “account is in serious condition and because of the status credit
privileges have been removed.” (Exhibit BP.) In fact, credit limits of
$10,000 were later imposed. In 1982, credit privileges were again sus-
pended for delinquent accounts. In March of 1980, by notice, France
also advised Sader that its “account is seriously overdue,” and his
credit privileges were apparently withdrawn at a France quarry.

A23

balked at paying him for the job. Defendants denied that the
asphalt was defective and suggested testing the contested
product. Sader held up any payment on his total account
despite the fact that the driveway job in dispute involved only
approximately $4,000. A lawsuit in an Ohio state court devel-
oped over this controversy, and Sader finally paid the $4,000
pursuant to a court order. Indeed, defendants employed law-
yers in three different locations to handle commercial dis-
putes and collections with Sader since 1980.

There is abundant, uncontroverted evidence in written
communications from defendants to Sader that his accounts
were consistently overdue in the 1979 to 1983 period, and
that from time to time credit privileges during this period
were withdrawn by defendants. During the same period, evi-
dence reflecis that France also suspended credit privileges
for Sader in 1980 after numerous warnings; that American
Asphalt products in Sylvania, Ohio, turned the Sader account
over to attorneys for collection (again, after numerous warn-
ings concerning an account of $2,200 in 1983); that an insur-
ance agency was forced to threaten suit against Sader in early
1984 to collect an insurance account exceeding $15,000 more
than 120 days delinquent. Many other witnesses testified that
Sader was slow or delinquent in payment of its accounts dur-
ing the period, although their companies did not cut him off.
There is also clear evidence that defendants, during the rele-
vant period, placed other of its customers, whose credit or
financial condition was doubtful, on a cash basis for sale of
its products. In short, the record establishes that a number
of other persons with a contractual relationship with Sader
had serious problems with Sader’s failure to pay its accounts
and either threatened or litigated with Sader concerning a
past due balance, and that defendants cut off credit to others
in similar “slow pay” circumstances.

It appears clear in this case that the problems between
Sader and defendant in the relevant period arose out of com-
mercial and credit controversies and did not arise in an anti-

eS.

A24

trust context. That Sader may have been forced in some
instances by credit restrictions to obtain asphalt materials
from a source 15 to 17 miles further away than a defendant
source is not a sufficient basis for this § 2 Sherman Act claim.

in overruling defendants’ motion j.n.o.v. following the ver-
dict for Sader, the district court cited Byars v. Bluff City News
Co., Inc., 609 F.2d 843 (6th Cir. 1979), as authority. Byars
is pertinent only with respect to its discussion of refusal to
deal by a monopolist. Jd. at 854. It was uncontroverted in
that case that defendant Bluff City refused to deal on any
basis with Byars, a competitor in the concededly relevant
Memphis area market, in “primary life” magazines and peri-
odicals. Byars recognized the general rule—“there exists no
duty to deal, so long as the determination is made
unilaterally.” Jd. Furthermore, “[e]ven the use of unfair busi-
ness practices as part of the termination may not invoke sanc-
tion under the antitrust laws.” Jd. at 855. A monopolist,
however, may be held to different standards, /d. at 855, citing
Eastman Kodak Co. v. Southern Photo Materials Co., 273
U.S. 359 (1927), where Kodak provided no “independent
business reason for its refusal to deal” and “Kodak had
monopoly power over the national wholesale market.” In
Byars, we concluded that a refusal to deal practice should
be condemned only if it is “unreasonably anticompetitive.”
609 F.2d at 860. Even a “refusal to deal designed to accom-
plish vertical integration, without more, should not be a basis
for imposing liability” upon a purported monopolist. /d. at
861. We observed further that courts should examine busi-
ness reasons for a refusal to deal, and “must give them some
leeway in making business decisions.” Jd. at 862.

Sader’s brief not only cites Eastman Kodak Co., supra, and
Byars, but also Riverview Investments v. Ottawa Communily
Improvement Corp., 769 F.2d 324, 328 (6th Cir.) (“what mat-
ters is that freedom to compete is restrained”), revised, 774
F.2d 162 (6th Cir. 1985). We do not construe Riverview
Investments, a combination or security case, as pertinent to

a

A25

the refusal to deal aspect of this case. Kerasotes Michigan
Theatres v. National Amusements, Inc., 854 F.2d 135 (6th
Cir. 1988), also cited by Sader, was principally concerned
with “leveraging” or misuse of monopoly power in one mar-
ket to exclude a competitor from another market. We deem
Kerasotes to have minimal relevance to Sader’s claims.
United States v. Griffith, 334 U.S. 100 (1948), mentioned by
Sader in a footnote, is also, like Kerasotes, a theater and film
case concerned with defendants who pooled their powers to
exclude others from obtaining films for exhibition. None of
these authorities is helpful to Sader here.

We conclude from a careful examination of the record in
this case that there is insufficient evidence to sustain Sader’s
charge that defendants began to press him on payment of his
past due account only when he agreed to give a deposition
in this case in 1979 to Langenderfer.’® We conclude also that
there is insufficient evidence to support an antitrust claim
of tying defendants’ imposition of limits and restraints upon
Sader’s credit during 1980 through 1983 to his part in Lan-
genderfer’s suit. Essentially, it seems clear that defendants
and Sader were engaged in a series of commercial disputes
concerning his accounts, scheduling of pick-ups at defen-
dants’ facilities, and whether or not defendants were carrying
out alleged credit understandings with Sader. The claim of
refusal to deal is inextricably bound with the commercial and
contract disputes between the parties, and was not proven
to be a practice related to antitrust conduct.

15Sader, upon cross examination, stated that he did not believe that
his credit had been suspended in 1979 or 1980 when his deposition
was taken and the first trial took place. He added that he would not
have a problem if defendants “treated me like they treated everybody
else” in credit matters. He conceded, however, that he had credit prub-

lems with defendants as early as !978 and that this continued into
1983.

A26

There was, moreover, similar to the M & B situation
already considered, a failure by Sader to prove a relevant
market in which Sader established the necessary essentials,
including causation, under a §2 Sherman Act claim. The
physical location of alternative sources of stone and asphalt
and other asphalt components to Sader’s basic operations in
Wood County and immediately adjacent areas might alone
preclude any recovery of damages for ant

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385009_1926%3A1. Public record. Not legal advice.
