# Petition for Writ of Certiorari — Hausfeld v. Ziegler > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385601_0663%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1963 - **Citation:** 372 U.S. 907 ## Text ‘ Wits, Fe Y Of 8 oelED U.S. : ae eS “> tegte ld, | Ri 7 15 : ‘DEC 7 18h. TT CLERK: . 4 . . : ; e + ° ; é , ; : ; e 0 OS etme _ SUPREME COURT OF THE UNITED su, / ae a OCTOBER TERM, 1962. / VOLASCO PRODUCTS COMPANY. ad VOLU NTEER ASPHALT COMPANY, - Rony —— ee >> Ws ants : “ LLOYD A. FRY. ‘ROOFING COMPANY, - Respondent. "PETITION FOR WRIT OF CERTIORARI " fo the United States Court of Appeals - for the Sixth Circuit. », + Fe - ee . WM. C. WILSON, | W. L. AMBROSE, JR., Attorneys for Petitioners. we TORS - C4 Lite, ~ AMBROSE, WILSON & SAULPAW, ose ree ae Pa Knoxville, Tennessee, re ee as Of Counsel. — Se Lovie Law Puintine Co, Inc. 415 N. Bighth Street, Clitral 1-4477. . _ f - x folie a “ ° i 7 INDEX.. “tet . — 7 So Page : Opinions istics ana% er rrr ———— : “Jurisdiction EPR Ge Cee Ries hee ey re eaters. ee \s (Questions presented PET aes Wig PO ry me » ; Constitutions; statutes and rules involved ... sat ve oe: . Statagient of the case .. ~ cae : + oore a vie eeees 78 I. Summary statement... Cerecon F RY of : ee IThe facta iu. i...scees Shas WO! A. Background and waditles me te, . cee ce B.. Pricing and sales policies of Fry and: other major companies eaen art Five ve See geeee 14 _C. Competition | in the hocking industry . oe ae .- Dog D. Cost: of production of asphalt saturated felt 26 : . Petitioners’ damages Cpemeuceca te ee erree ra Saas = Or -otitioners offe réd te testimony as to. 5 Reeainnen . _ = based upon their being deprived - of. two- -qynature years of operation out of their total corporate BR ac at kn s ahha s bed so geinsed is 2s Reasons for granting - ‘the. writ [MgREUR KAA deen bimeees . I. Preliminary statement ca keee Serer. Troe . ‘II. Damages -....: ae Prerrrneee aon eects ate aA — ~~, Plaintiffs’ “proof as. presented to the jury. Sab duces ' was clearly competent Se eee Pee re ee me (1) In presenting its evidence as to damages ay _ from loss of profits, Volasco offered testi- ——- ~*~ -* mony of- its president, testifying from his knowledge, as an expert accountant, = a? and from its own records as to_ its ..- Fox and Atlas Building Produets ‘cases si il, ; normal inerease when free from defend. ant’s ‘unlawful interference, and _testi- mony of an.expert accountant and busi- yess advisor as to its projected or ‘expected volume of sales, and in soing so plaintiff sought to-and did follow the _ precedents laiel dewn by this court - the Eastman Kodak, Bigelow, and ha Parchment cases and of the. other cir- - enits in the Rankin, Twentieth-Century “ye? ode? (2) In addition to loss of anticipated profits, I. ¢ plaintiff was. entitled to recover for an-- °° jury to its, business, or depreciation ey the valne of its property, and the Sixtli Cirenit’s “holding that this element of damages» was duplicative | is in eonftict with the degision of this court in the ° e Story P&rchment . ease and with the- Tenth Cirenit in’ the: Atlas “ieee Prodiicte cfiie oo. . lo. cc cc cee kee sas ee -—~ ) Defendant’s illegal pricing practices as to plaintiff ‘s principal produet adversely : affected sales of other products, mopping . — asphalt and roof coatings, manufactured dy plaintiff and it. should be allowed: to recover the losses thus caused | Plaintiff should have been permitted to pre- sent to the jury evidence as to its loss of profits by heing prevented from entering upon the ‘mannfacture and sale of shingles and roll roofing, its. Josses hased upon its | projected as during a mature vear, and £ the loss in va , 1 of its business. as a going ie SR Teas he La Ww i Plaintiff cleartt had the intention to go into the business of niariufacturing and — jnarketing a full dine of asphalt roofing products ‘including * shingles ‘and roll ‘roofing and had acquired at Jeast 90 per cont of the plfit, machinery and equip- ment neGessary to manufacture shingles: and ralk roofing but was prevented from making the 10 per cent additional invest- . ment, in machinery necessary for these’ . products hy deferidant’s: illegal pricing ‘sales of shingles arid roll roofing wr yere practices, SO that plaintiff should have ea heen permitted _ submit to. the (jury testimony’ as to its losses on ‘projected date of suit delayed plaintiff at. least er 2 years in reaching full development or maturity; ‘plaintiff, therefore, showld ‘actions’ but- should _ to introduce testi have been permitted to present to the | jury testimony ‘as “to its loss. of ‘antici- - pated profits during two (2) of its, Ze “nature years, particul ly/‘sinee its total business life was limited to fifty votirs Plaintiff should not he limited to testi- inony concernine the younarener 4 Det ween the actual investment in its (properties and the aé ‘tual value of such properties in presenting its proof mc the injury v to its business caused by defendant's ave bean permitted ony as to the differ- “ -enee hetween the. going eoncern value its business would have had but forthe o- - Defendant's illegal pricing had ‘as of the ‘y DG aetions of the defendant and the actnal 7 * iv: E ee . . > value of snech hnsiness as ant. the date : _of suit ...... reas Ee un es IIT. The Appellate. Court erred in tev ersing nie the case ; on the monopoly issiie .. uewapeneCansn oy me's _--N. The evidence :is sufficient to. aticnit to the ‘jury the issue-as to the violation by Rrv of “Section 2 of the Sherman Act, and the Appel- late Court went ovtside the record to find +. faets upon. which to hold the evidence in- sufficient .. 0... eee ciate ea pe eee Ss hirele ok . - PB. The eourt’s charge, taken as a whole, iwas adequate on the monopoly. issne; but even if there) was. error no adequate objection. was (. The rule of procedure, ‘as applicable in Ten- / ..* nesseé to the effect that a general verdict is ae | i, multiple issne case where one or “more. issnes are properly submitted: tor the / jury. even though another issue is errone- ~onsly snbmitted, controls in a Federal erase in. Tennessee, particularly if defendant did | not - request: special verdicts or submission of interrogatories as provided . by Rule 49 IV. Petitioner, Volunteer Asphalt Company, as the ~ supplier of all asphalt used aby: Volasco,. is not own losses due to violations of the. -Antitrnst laws by defendant aimed at Volaseo ........ 5° I ick ke dees CCE ase a a Re eS 7 Appendix: - Opinion of the United States Comrt of Appeals for the Sixth ME 8 ee ct Se hpee ? Jtitgment of the United States: Cage of Appeals for the Sixth Cirenuit in Appeal No. 14,545 .......5.. made hv defendant Nearer oie aaa Gis ss te ae wes ’ O65 too remote as.a matter of hae to recover. for its e... 73 Gulf Refining Co. v. Fetchan, 130 F. 2d 129 (6th. Cir. . 1942) ives She EPR EER ARO Vaveeres Searle ae | | Harrigon v. Paramount Pictures, Ine., 1 115 F. Supp. ‘ 312° (PB. C. EF. D, Pa.), aff’d 211 F.2d 405 (3rd. Cir. 1954),-cert. denied 348 U. S. 828 (1954) 22-002... 81. Holliday v-: Great’ A & P Tea Company, 256 F. 2d 297: “(8th Cir, 1958) 2.6.2... SV gkieeoknevecessoaats . 70 Kareeal Corp. v. Richfield, Oil: Corp., 221 FM 358 83 Sac Cir. eda cS ashes cag cates etn ee sien ye aeeed Baltimore & 0. R. R. X. _ Re es, , 102, F. 2d 399 oth Cir, \. - 9988) .... pceutees itn ia nd ka cee aeweeene tween 74, - Baltimére & Potomac R. R YY, Mackey, 1 157 U.S. ha (1894) ,...5.-.3..85- la canens jidaveceseveerrxper? 2 GS Bank of America v. Hyden, 231 F. 2d ms (sth Cir, a I a ig ee ee ee a eae 79 Bigelow v. R.K. O. Radio Pictures, Ine., 827 U.S. 251 | GENO sakuexdvee h kveta tra ean bYrcaecs . «83, 41, 47, 50, 82 Byrd v. Blue Ridge Electric Cooperative, 356 TLS. 325 [:. . aerere ela Ns PPP Srey oere ore oe P Chicago and N. Ww: “Ry. Co. v. Cabin 167 F. 2a 48 (Sth Cir, 1948) 2.02... Sige I EARLRSeGkAnANAS 74 Congress Building Corp,-v. Loew's, Tne,;, 246-F. 2d. S87 (7th Cir: 1957) 2... Degas ore as 24. 81, 88,85 Eastman Kodak Co. v. Southern Photo Materials €o. a Rie & OF) err er yer mre: .33, ‘eg si ve ‘rie Raulroad Co. v. ‘Tompkit, 304 U.S. 64 (1938) . 3,74 Filipek v. Moore-McCormack Lines, Ine. 9258 ¥. 2a. 734 ) at a ae eee errr re rr. Tees ve awe Foster v, Moore- MeCormack Lines, Ine., 131 P 2d MT (2a Cir: 1942), Re PEs Wee FER ee ee Ue Kobe, Tne..v. * Dempsey Puinp o., “Cr. 1952 YY | > Lawlor v. Loewe, Lawhor: US, em (1926) Louisville & Nashville R. 730 (6th: Cir. 1958) M: altz Vv. Marvland y. -. Palmer v. -Pennsy lvania’ Sugar Riftnings Co. v. Sax, 134 F. 2d 2 Hoffman, Refining Co. , 166 W illianr H. Renkin. Co! 1961) 25 T. ‘S ee ee 318 U. Fed 2 4 “ 254 (2d Cir. Tracy v. Finn Fqnipment ¢ Co., 290 VF. . Breese ewe wane beceeeseeee dan ene cakees 72, 74, re Triangle’ Conduit & fable ‘Co. 2 (1915) National Screen Servi Corporation,” Vl 198 F. 2 v. Rochelle, » (7th Cir. 1943) Baldwin, 112. U. S. 490 (1884) 109 (1983) A416 (10th ‘4 adee aa 4 & 2 E48; American ‘Sugar 1908) 252 F: 6s & * eit &« . Associated Bill Posters of: Miited States and Glainada, 42 F. 2-152 (2d Cir. : am, Bee eee any Geb Rack Oh 2 Ues chee sg +0 ee Richfield Oil Corp? v v, Karseal — 271 F. 2d 708 et (Pth” Cie. -1988) wg. . 2... aekateatciarics -70- Roth v.. Swanson, 144 F. : Dd 262 (sth (ii. 1944) ei TOE Stephenson v. ‘Grand Trunk W estatin R. R., 110 F. 2a. - 401 (1940) ceo Siene Gerd. ee TTT * Story Parchment Co. ~ Patterson Parchment Paper Co. 282 TS. 55 (193 1). 3, 33, 41, 47, 48, 49; 00, 32, 0! 8,99 Toit. Ven, Ry. Co. v; Unienstetten 155. Tenn. “285 if Bey ee a eas fac EM eRas taeas can es SS isaiet. ee a 498 (6th Cir. National Eleetric Products Corporation, 152 F.2d 398 (8rd Cire 1945) 55 Twentieth Century- Fox Film ‘Corp. v. Brookside ‘The: atre Corp., 194 F. 24°846 (8th Cir. 1992) 20... 8, 47, ae United States. +. Columbian Steel Co. 334 v. &. 495 (|: Tak aces Oe ENE k ERA hae ek 65 United. States v. Swift & Company, 286 U.S. 106 — |. | Beare Seay NT) OTS SOUT POE eee eae 2. «2 . ; viil Ww cinberg v. “Sinclair” Refining Co, 48 F. Supp. 203, | ra 205 (KE: D. N.Y. 1942) % gee ee ear ey Po oe 32 a\y ilmington Mining Co. v. Fulton, 205 U. S. 60 — (1906) Perea ine Gw Kenmare te eke EN PE 74, 75, 76 Constitution: United States Constitution: | : Seventh Amendment ....-.--++25555+5 apenna wes 5, 47 Rules:' =. * | Federal Rules of. Civil Procedure: 7 oe Rule 49.52... coe e eee og gveees Seas eo -. 4, 5, 00 ee ere ree re hee a re atts 5,68 |. . Rule REE aa es fee Tere ee ry meer pa _ Statutes: ad Clay ton Act-—_ . “Section 2 (a) & (b) (5 U. me y * eeee ee testes Section 4 (15 U.S. C. § i) La bgeo'tt lees oD D2, O,TO, 84 Sherman Act— | soe . G Sections land 2 (15 Uv. S. C3 & 2) eer 60, G7. ® U.S.C. | . oe Section 1254 (1) °. Ree ieee, oreetitet se Section 2072 .....----+++5 aide a larepeeeie Rea ee Tennessee Code Annotated— : | | as Section 20-4317 ...... preter’ sug oa Se eaann 4, 5,72 Texts: cel 3 Am. Jug., Appeal & Error, § 1097 .. Ske ones 6S IN THE. SUPENE COURT or THE UNITED STATES... * OCTOBER TERM, 1962. No. ..-.--+-- VOLASCO PRODUCTS COMPANY and VOLUNTEER: ASPHALT COMPANY, Petitioners, | % Ve te LLovD A. FRY ROOFING COMPANY, Respondent. ; rt PETITION FOR WRIT OF CERTIORARI _ To the United States Court of Appeals = for the Sixth Circuit. ts =“ “with : = > _ @ F To the Honor able Chief Justice and Associate Justicgs of the Supre me Court of the United States: Petitioners pray - that a Writ of ¢ fertiorari issue to review, the judgme mts of the United States Court of Appeals for - the Sixth ( ‘ireuit: ente red-i in the above -entitled te mbe ir 12, 1962. , ise on Sep the District Court. “opinions: BELOW. The Opinion of the United States Court of Appeals for . the Sixth Cireuit is reported: in’ 308 F. 2d 383. A” copy of the Opinion is attached hereto in the Appendix to this Petition’ at pages la et seq. No opinions were: issued by - ¢ JURISDICTION. - The judgments of the Court of Appeals for the Sixth Circuit were made and entered on September .12, 1962, and copies thereof are appended to this Petition in the Appen- dix at pages 25a-26a, 27a. The jurisdiction of this Court is’ invoked under. 28 U. S.C. 1254 (1). QUESTIONS PRESENTED. 1. Whether an Appellate Court by setting aside a dam- age verdict based on uncontradicted -testimony of two expert witnesses, both accountants, one in private prac- tice and the other the President and General ;Manager. of plaintiff’s business, using approved accounting and_statis- tical methods and the company’s past experience, its own. records and their expert judgment, as to the’ company ‘s projected earnings of which it was deprived by reason of the violation by defendant of the antitrust laws, by weigh- ing the evidence and concluding that ‘plaintiff in an effort to be specific, has indulged in-theories that result in proof that is speculative, remote and uncertain,"’ has thereby de- _prived plaintiff of the right to trial by jury: as guaranteed by the Seventh Amendment? The Appendix to this Petition is hereinafter referred te by te FPR iin I ss Ne . 2. Whether plaintiff in an antitrust action is entitled to recover in addition to loss of profits, depreciation in value of its property edie to defendant's illegal actions as held by this court in, Story Parchment Company v. Paterson Parchment Paper Co., 282 U.S. 555 (1921), and by the Tenth Circuit in Atlas Building Products Co. v. Diamond - Block & Gravel 269 F.2d 950 (1959), cert. den. 363 t. &. S42 3. and, 30, ean it recover onty> the difference between its investment as show n by its books and its actual value as of the date of suit, or may it recover the difference hetween such actual’ value as of that date and its value ws a going congern assuming that there had been no anti trust v iolation? ) _ Whether plaintiff, admittedly the object of a caleu. eae and highly successful conspir: nev in violation. of the antitrust laws, involving discriminatory pricings as to the principal prodiet! of a line of allied products, may recover damiiges for loss of profit. onthe entire line of preducts directly and proximately caused by defendant's illegal” acts? >. Pas, z - 4. Whether plaintiff, Volasco Prodnets:C ompany, can re cover; as an element, of damages, losses due to its being prevented from going into the manufacture ‘of roll roof- ing “and shingles, where it is. equipped) to manufacture asphalt saturated felt, mopping asphalt and root coatings but needs additiénal machinery costing a relatively small ‘amount * to begin. manufacture of roll roofing and shingles, ~~ which ¢ apital and. equipment were readily available, but is prevented from manufacturing such ditional products hy antitrust violations of defendant? | . a. W heties plaintiff, a new corporation, just getting started in the asphalt roofing business and having’ an esti. mated growth or development period of five vears to reach its anticipated normal sales volume, which is prevented from normal srowth by the antitrust violations of defend: ant so. that its growth period is lengthened, can. recover in damages for the vears of full normal sales of which: i was deprived by being delayed in reaching. Ws maturity, partienlarly since plaintiff's business life is limited to fifty Ses i. ‘ vears! ° . aw£ a hether the Issue as to whether defendant alone ‘eu or attempted to monopolize the asphalt roof * ‘ing business was propertly submitted to the jury where the evidence ‘shows that defendant was the largest manufac. turer ofeasphalt felt in the United States, that it engaged: in the: F, prices in the area of a plant defendant: was trying to buy. Factice of ‘teonditioning the market by lowering that of 14. price changes in the price of asphalt felt be- tween February, 1956 and March, 1958, defendayt alone initiated all but: three, defendant initiated all five gs suchi changes which. resulted in price increases, that defendant lowered the pr ice of felt below cost in* the plaintiff” s area resulting in one inde pendent manutaeturer being Sseaid out of such area and plaintiff heing excladed from. the manufacture of additional roofing products, even though defendant accounted for only 12). per. cent. of national sales. of asphalt felt?) That is, where all elements of monop oly are present,is defendant to be held not guilty as a ‘matter of law because it has only 12M% per cent of the market? Furthermore, ¢ ‘an this question be raised. on “appeal - where no adequate objection was made to the Court's charge? | ’ WwW hether the so- called uTwo Issue Rule’ established eaisensee Statute (Section 20-1517; Tennessee Code pe uted), to the effect that a general verdict is good in- a multiple issue Case where there is substantial evidence to support the verdict on one or more counts even though insufficient to sustalir on an erroneously submitted issue, controls in a Federal case, ‘and particularly where the de « - fendant fails -to avail himself of the saheamian tore. quest special verdicts or interrogatories as provided for by Rule 49, Federal Rules of Civil Procedure, S Whether the Federal Courts should as a matter of law deny relief to-the plaintiff, Volunteer. Asphal “Com pany, for damages ‘suffered by¥ it due to the antitrust vio lations of the defendant, merely. because plaintiff jis a supplier and, therefore, *jtoo remote to be compensable’ where plaintiff is a part of an integrated business opera tion processing asphalt for road and roofing” purposes. processes for only two customers, one for-road asphalt and , Volaseo Products Company for roofing asphalt, processes all the asphalt used by. Volasco in the manufacture of asphalt roofing products, and the two plaintitts have iden teal stock Ownership? ‘Clayton Act (16-U., a CONSTITUTIONS, STATUTES AND FEDERAL ~ - eodaneed INVOLVED. : The statutes inv sive are Sections 1 and 2 of the Sher_ man Act 15. U. S. C., SS+, 2)—-Section- (ay. and: (b) a: the Clayton Act as amended’ by- the Robinson- Patinan Act (15 UL S. CA. Sf ° = “ (b)),-and Seetion 4 of the $15) set forth in the Appendix — hereto at pages 2¢a pty 8 U.S. C., § 2072 set forth in the Appendix hereto at page, 30a; Tennessee Code Annotated. Section 20-1317, set forth in. the Appendix at page ola. -_ Federal Rules of Civil Procedure Numbtrs 49, 51 and 61 ‘* are involved and are set forth in the Appendix hereto at pages 30a-31a. The Constitutional provision involved is, the Seventh Amendment to the Constutiow 6f the Unite f. “States sot forth in the Appendix at page 30a, e ——— STATEMENT OF THE CASE. SUMMARY STATEMENT. This aetion was. filed by petitioners ino the Distriet “Court te recover ‘treble damages under the Sherman Act and the ¢ ‘ayton Act as amended: The complaint alleges. that . Volunteer Asphalt Company. (hereinafter hile” to as “Voliniteer) ix a finer And processor of asphalt for highway and. roofing Uses having begun Inisiness in 1954. Volasco Prodnets Company (hereinafter referred tO as Volasco) began business in) 1955 asa manufacturer of aephalt roofing products; that the defendant. Lieyd A. Fry Rooting Company (here ‘inafter referred to as Fry, “or de fendant) is the largest manutaeturer-of asphalt “pootine - prodpetsai the United States,‘and that it conspired with other large manufacturers to restrain trade in the asphalt roofing: industry; Phat it monopelized or attempted to: monopolize, or conspired with others to monopolize, trade ‘in the manufacture and sale of asphalt roofing products. and that it discriminated in the price of its prodicts, hy reducing prices in the areas served by plaintiff to or helow cost while keeping prices higher in other areas, thereby substantially lessening competition and tending to eredte a monopoly. or to injure or destroy or prevent compe titien with defendant (R. 29-35). The defendant denied the material allegations of 1 ie (RL 36-37). ? “The Coriplaint was filed on Ayiril 17, i958 (R. 2). the trial by jury commenced on November. 14. 1960 CR. 51). At the-conelusion of f plaintiffs’ proof, the Court granted : Th ¢ abbreviation “R° refers ta the Jom Appendix tilecdl in the sith Circuit. . Reference to) page numbers therem will ont thie letter x a ; s -~ defendant's Motion for a directed verdict as te Volante: CR. 1580, 2480), and on December 19, 1960, the jury returned a verdict in favor of the petitioner, Volasco, in the amount * of $100,000.00 iR. O45), The support the Verdict of the jury on the issue asx to whether the defendant conbined or con spired with one or more other nianutacturyts to violste the awnititrust laws (A, fala). [t further eld, however, that there was insufficient: ev idence and=that the trial court's ‘charge was Inadequate to submit to the jury the issue. as te -whether defendant, individually, monopolize the asphalt roofing industry, and that since the jury re ‘turned a general verdict and one issue was improperly submitted, the entire ‘verdict must be set‘aside (A. Ta-I4a). The ¢ ‘ourt’ below awent further and held that plaintiffs’ proof as. to amount “of its damages was defectiv e oor Saas ate te mm the following: particulars: . 1. That sinee the -prite discrimination charged to> res - built four roofing plants, at Houston, Minneapolis, Brooks- ; ville and Detroit, and a felt mill at Portland, Oregon (R. ” . 1915).% Since 1948 it has acquired by lease, purchase or ° constriction seven roofing plants at the followimg- loca- tions: San Leandro, California; Robertson, Missouri; York, Pennsylvania;.Moorehead City, North Carolina; Jackson. ville, Florida; Irving, Texas; Ft. Lauderdale, Florida, and Emmaus, Pennsylvania (R. 1489). As of the date_of the filing of this suit in April; 1958, defendant owned nineteen roofing plants and fourteen felt mills, strategically located throughout the United States (R. 154, 155, 1918)... As of ‘the date of trial it was in. the process of. constructing three additional plants. at Lubbock, Texas;. Atlanta, Georgia, and Salt Lake City, Utah, and was planning the construction. of another at Cleveland, Ohio (R. 2059). In addition to: roofing plants, defendant also. owns eighteen asphalt re- ), fineries, one at each of its plants except Stroud, Oklahoma, which supply not. gnly Fey’ s asphalt requirements, but de- fendant also sells to the other national manufacturers (R. [ 2096- 2097, 2102-3). Fry is the largest producer of asphalt “roofing ‘products ins the United States (R. 558). Asphalt °. roofing products aré. heavy compared to their. value and shipping costs represent a very substantial element:of total: cost of the product to the consumer (R. °70-71, 484, 1478). A manufacturer, therefore, | has a definite competitive ad- vantage -in the immediate vicinity of his" own ~_e. (R. 621, 908. 9). ' : Defendant has followed the. policy of selling primarily through very large so- called distributors, including Sears: Roebuck and Company, anc, prior to 1956, at a price five to eight per cent. below the price of.his national competi- tors (R. 1069, 2032). During 1956 Fry changed his sales poliey and endeavored to-sell at the ‘same price level as his ” national competitors and granted the distributors a dis- .count only on direct shipment to dealers (R. 170, 1070, \ 1127, 1951, 2088-34). On November 1, 1996, however, he reverted to his prior policy of selling below his mitional competitors by giving certain of his eustomers ao seeret rhe 14) and by extending the distributor discount on wll pure ‘hases of _ his ‘our (R. 2b). } / five, per cont vear-end rebate (R. 222-5, 1128. -) The class of custoniers whieh his ‘ao-eaited distributors were supposed to sell are described im his price bulletins as follows; **to retail dealers and/or roofing contractors" (R. 171): ‘The’ other national manufacturers, while they - sold to some so-called distributors, also by and large sold ; direetly to retailers and roofingscontractors (Re 1841-44. ~ 1S71-72, TS73-89, 1965-66), and Fry sought: to eriable: his customers: tos compete with manufacturers (R. 2. ane see pr ice’ table, post)> W hile this: .eonfliet i 1. marketing methods existed if various parts of the U sie States (R. * 1079), it apparently did not tehd to reduce the price ex: cept in-areas where new or. small -indepenilent roofing ; manufacturers marketed their products (R. 771-2). During the four fiseal ye irs, 1955 through 198, inclu " *SIVO, “the defendant earned net. hefore income taxes. a total. of $17,147,838.00 and, after taxes, $7,958,611.00 (Ex, P26; | R. 458, 2301) ;,9n w stockholders investment as of October 1B 105 >, of $10, 741,969.00 (Ex. 127; > R. 459, 2805), The next seven largest. wiodianers in order sare’ the Ruberoid Company, Certain-Teed - Corporation, , Johns Manville Corporation, the Flintkote. Company, the Philip Carey, Manufacturing Company, the Barret Division, Allied | ‘hemical Company and Bird and Son (R. 556-8). In. fhe vear* 1954 thie four largest producers accounted for. forty two per cent of the total shipments of asphalt . roofing ~ products and the eight -largest,companiés accounted for “sixty-nine per cent of total shipments (R. 1582). po ¥) | ) a 8. Pricing and Sales Policies.of Fry‘and Other‘ Major Companies. -_ ; Prior to plaintiff's sie take Dusiness,. the national manufacturers of asphalt roofing, other than Fry, had ‘followed’ a pricing system of fo. b. plant prices with - ‘freight added to the point of delivery except that/freight . ~was equalized to. that of the competitor ‘with the plant. nearest to the point of destination (R. 1952). The defend, ant followed an independent pricing policy, and, for some: time prior to plaintiff's entry fto the business, was selling ata flat delivered price, the same price applying threugh- out the South and East Central states. For example, Fry's last published price list, prior to plaintiff's selling’ ‘felt was effective August 1,-1955 (Ex. 28, R. 161);:and under it the price of asphalt saturated felt was $2.24 petgroll | delivered to any point in the States at Tennessee, Missis- xippi, Alabama, Georgia, North and South Carolina, Vir- yinia, Kentucky, or. Indiana price lists identical with that’ of the defendant even down te ‘errors contained in it (CR. 190, 2083-342 Ex. 30, R. 10s; Ex. 95R. 372; Ex96, RL 874: Ky. 97, R367). This was sue ch n different pric ing system that defendant hid its plant managers come to Chicago for a meeting during January, 1956, to have the plan explained to ther (R. 1511-18, 1980). On February 23, 1% ab, four days after ‘the effective date, J. I. Musico, the nianadger of defendant’ er “plant at Brookville, Indiana, which plant served Knoxville | and a large, portion of the surrounding aren (R. 2918-19), wrote to C. M. MeCling and Company, a "Fry customer in Knoxville, aparently answering a complaint about thre pricing OF some compe titor, statifre: “T know by this time that vou have the new mer. * -chandising plan which I understand the entire in- dustry has ‘adopted, and it is with my very honest, opinion that this will clean up all this mess and [am sure will he somewh: iMoembarrassing to someone. to fill all the orders: that they may have) and extend the . payments nntil April 16. | . ° > 2 . . e {ii “Tn view of the new ‘inerchandising) plan, alo ‘not, think any: further investigation is necessary. T: am of . ‘the firm opinion that. the Roofing In lustry’ s House should be, and will be clean, for the first time, ay cer “tainly there is no ‘reason for any “ich chiseling " (Emphasis ours.) Pox, 122. RR. S78. 294.) : €: se During the Spring of 1956, another meeting of the As— phalt Rooflng Industry. Burean was held, this time at the Blackstone Hotel in Chicago, and both Mr. Fry, Jr., Presi- dent of the defendant, and Mr. Fry, Sr... Chairman of the Board. and Chief Exeentive Officer of the defendant, at- tended the wocial arene, including cocktail party, and - dinner OR. 1135, 11237, 2066). Most everyane in the roofing industry was adie inchiding ‘representatives of Ruber- oid, Certain-Tecd, Johns- Manville, Philip Carey, Bird Son, Logan Long. "ml ( ‘elotex’ (R. 1136- BT). Kitfective hari 9, 1956, defendant published a new price schedule which was identical with its schedule of) Febru- ary 19, 1956, except ‘that it corrected errors. in the former list, and it omitted in tailing the list te dealers, eae containing’ discounts te distributors (R. 1981, 2042; ex. R. 180). In this connection, it is: pointed out that in - February 19, 1956 price list, while Knox. ‘ounty w as listed us Zone 1 with a price of $2.16 on felt, Blount County, which adjoins Knox, was listed as zone 7, with a price of $2.23, while other adjoining counties were zone 2: with a "price of $2.17 (R. 176). “This listing of Blount County Wiis apparently an error, and in the April 9th price list, Blount (County was placed i in zone ?.in line with other surrounding counties (R. 180)., This same mistake. was contained in the price list of Ruberoid sent out with letter dated Ebru. ary 17, 1956, the list of Johns-Manville. sent out with letter dated February 20, 1956, and of Certain-Teed, effective February 20, 1956 (RL 371, 373, 376). On April 13, 1956, Mr. Musite, manager of Fry's Brookville plant, wrote a letter to House-Hasson Hardware Company, another Fry ~ customer in Knoxville, as follows: ‘*T refer to your letter of April 9 and no doubt by this time vou have received our. new schedule ane changes in owr county zone outline. | - " | faa i 19> You will note that Blount Ceanty is now zone 2 which-puts it in dine and Iam sure that you will find all other manufacturers quoting on. this. same basis. It you find anything quite to’ the contrary, ple ase try: te pick up some tangible evidence and we will duapdle same ¢Emphasis ours.) (Rx. 124, 1. 4425 2095.) On April 27, 1996, iw. answer to’a letter from Pe euler Gaulbe vt Corporation, a large customer of Fry throughout. the South-Central portion, of the country, passing ona. Pan from. one, of its customers, Mr, Liovd A, Fre: . President of defendant, stated: a “This will acknowledge receipt of your letter dated April 24th regarding the letter. you have received from Erst Long with ‘respect: to certain prices being quoted on Asphalt shies be Bear Brand at Bearden, Arkansas. — “I am well aware of the activities of these small Arkansas manufacturers and I assure you that we are _ watching them very -closely. As usual, they are tak. ing advantage temporarily, of an attempt to stabilize an industry. whieh is feng overdue for some stabiliza tion from the viewpoint of the wholesalers, dealers, and roofers. These people are opportunists and are much like the backwood sawmill operator who hauls a load of Inmber into any given market aan i annonnees that he is a dealer, ** Nevertheless, I agree that they. are a thorn in the side and in due time will be dealt with. : ‘*Please advise Mr. Long that T would appreciate his patience and support of the. new Mere handising Plan and Pri¢e Plan for a bit longer beeause there isa great deal of low-price materials in thé ferritory which was purchased prior to’ the inerease:: ‘The market will continue to be unsettled until these in- ; Ps ventories have furned: = | ele: that his will be’ accomplished within thirty days. At that time, if the menagerie is not changed there we will take gotrective action. "* © (Emphasis ours.) iE. 4. R. 201-2 22m).) The smaller roofing computes | in the. Southwest —,—-~ had names seh tas Bear C ompeyy: Elk Rooting Company. and. Leopard: Rooting Company, Zo that the industry Fe ferred to them, collectively, as the ‘tmenagerie’™” CR. 205). . Kffective June 1, 1956, the defendant and other na tional mannufactugers issued a revised merchandising plivn and “price bist (R. 208, 379-87). This pricing schedule follows the same format as the April 9 list except that there were two. series of zone numbers’ designated a> “Schedule A and Schedale By each containing 200 zones. The B Schedule covered; generally, the Southwest. area of the country, ‘tthe menagerie aréa’’ CR. 204-5). Under * this price schedule,.the price of asphalt roofing products Was increased in the A ‘zone, cov ering most of the country, but in the B zone area it: remained the same. The price on — ae tee felt —o from $2.16. a roll to Knox County, w wisdie the. sprice-in_ zone » Lon the same prod uct in the B area remained at $2.b6 per roll GR. 205). Defendant was again the one who devised and established. this price schedule (R. 206-10, 1507-8)... Effective August 14, 1956, the defendant issued a bulle tin applying to the States of Mississippi, Tennessee, Ala bama, and certain counties in’ Louisiana, Georgia, and Florida, allowing an’additienal trade discount of seven ans one-half per cent ‘tou straight truckloads and or straight “carloads of 15 Tb. and or 20 Ib. asphalt saturated felt (not perforated)” (R. 210-11). Plaintiff wax not equipped te manuf teture perforatest felt: but manufactured only nen i eae A . , v4 . 4 | i wi % “i ‘ Beis | perforated felt CR, ih 666), Perforated felt is manu factured by running the regular tel over aorotler contait: ing needles. whieh punch small holes in it .cR. 212). There i one determinable additional cost invelved ui the ama facture of perforated as compared - with hon perlorated we. Texa. PaO are tt mitten yee be sat te ert Lae ke ie a { Re eel ee eee — 2 The -tirst Mr. Krug isin’ of the -additional seVen and “one-half per cent discount, which, incidentally, read metel the price in’ Knoxville, Tetinessee, to $2.05 per-roll to ais tributors (RR. 212) was shortly after its Annotincement in August, 1956, through Foy Rooting Company, a handler ot Fry Rooting (Ro 766, 12842 1850). Ma. Frys dr. stated that he issued this balleqin to meet competition “as a re sult of reports that we had from the field that Ruberoid and other: manufacturers “were quoting these prices: AR. : 1982-84, W444). However, the Ruberoid Compans - vranted the seven and one-half per eent discount on tien perforated felt. by bulletin issued) August 14. 19560 (the same day as Fry), Johns-Manville hy bulletin issued An wust 24, 1956, and Pivilin Carey Mannufactuvitt, Compan hy bulletin issned Auwnst 22. 1956 1 Ro O88, 890, 341). . During Oetober, 1956, the. Asphalt pipe Tucdustiy Bure: an held another meeting, Mr. Fry, dr. attended the social fine tion-connected with the meeting whieh was held at the Essex House in New York Citw OR. 128). At thie meeting also, most of the national manufacturers wer represented including Ruberoid, Certain Teed, Johns Manville, Flintkote, Philip Carey, Bird and Son CR. 1129-40). . The defendant attended no other funetions of the Rarcau than the three whieh have heen Jnentioned herein, that’is, in the Fall of 1955 and. Spring of 1996 and - October of 1956 CR. 1144, 2066). Although Mr. Fry. re met with representatives of Rubernid sometime during OAT to ise use the possibility of mannfacturing produ 1s @ for Ruberaid and. buving other preduets from. Ruberoid tR.. 1145). Mifective Nove mbe wed. 1956, which is the beginning ot the defendant's fiseal year, ‘Fry secretly notified most ot its customers that it. would pay at the end of each fiseal vear a five per cent: rebate on their total purchases of asphalt roofing products (R. 222-3. 112 M31): This rebate was so secret that the customers were: notified by tele phone or by personal visit py the President of fhe defend ant, and even the deefndant’s sales manager did not learn of it until during the. taking cof discovery depositions in this lawsuit in the Fall of 1959 (R. 1130, 1515-14, 1616, 4x). And defendant’s salesman in this area didn’t learn oof it until January, 19607 (TR. 1898). These rebates were paid’ by cashier's checks ‘and not by defendant's own = cheeks (RR. 223, 1129, 499), and were made to ‘customers - at the end of the fiseal’ vear exeept that Sears was 9 qnarterly during the year (R. 1522). W hile Mr. Fry, at first testified this rebate was paid to all his arin customers, he. finally admitted it was ‘not paid to all (R. 2056-7), bat that it was. paid where competition was keen — and not paid in areas where competition was not so severe (R. 2057-8). Distributors in the Knoxville area did receive Ht Bias HAR. TSHOTSBS) : — By- price one ZONE SC shettiles effective November 1.1056, defendant, again changed the. price on asphalt rooting products including asphait saturated felt (R. 21. 3.17). The defendant: dev eloped and initiated this price change, and it was immediately adopted by other inainufaeturers CR, 221.2, 891-2, 398-400, 1509). : “Under this schedule, the conntry, east of the Rocky Mountains, was divided. into four different price Zanes _ designated A, B, C.-and D. The Azone was the highest priced zone, arid the D zone the lowest with Band © grad iS |. vo vated in between. Knox County, Tennessee, Was placed in’ thee B area, and the distributor. price on asphalt felt) was set at $2.17 per'roll. This was a decrease of five Gents per roll based on the June loth price list but represented an ‘inerease of: some ‘twelve gents per roll on non-pertorated. felt based on the Augtst 14th special bulletin. It repre sented a still further inerease in the A area, the price. in zone 1 oof the A area to distributors being $2.24 per roll as come nared with the former price of $2.22 per rol. The A area was Tn the northern part of the country, “ineluding the Chicago arka’ where many of the natiwnal manufac- turers had plants. The © zone was generally through the ‘deep South. The D zone was the Southwestern part. of the country, being that area formerly covered by the B zone in the June 15th price list. and the’delivered price in’ the: 1) zone was redneed from $2.16 te $1.96 (Ex. 38, R. 213-217, 1984-85). Effective with all sales made on and after November 1, \*56, the additional. five per cent dis. count should be applied to defendant's published price making: the zone 1 pric e of felt in the four areas actually as follows: A-1, $2.13; B-1, $2.06; 0-1, $1290; and D1, $186 (R. 214-15, 217, 228-4). wren - From this time on during the material period until this suit. was filed by the plaintiff, there were a number of price thanges in the asphalt roofing industry, some repre- senting decreases and others increases in price. The gén eral trend, however, was a decrease in price in the Knox. ville area, while in other areas the trend was an increase (Ex. 125, R. 443-58, 2297). For instance, the price in Knox’ County, Tennessee, was lowered to $1.83 per roll in. Jan. uary of 1958, whereas in Chicago, Mlinois, where «defend. “ant and othet major spogecgaeerggys had plants, it was in- creased to $2.28 per roll (R. 253; 259-60, 452). Also, under: ca price. schedule issned on- "February 14, 1958, effective January 27, 1958, “Knoxville, Tennessee, has been elim inated as a factory point on all asph: alt roofing products, a 24 - . ®@.4°% except asphalt saturated: felt’ (x. 54, Re 262). Under this bulletin the price of asphalt saturated felt owas ‘re- duced.in Knox County, Tennessee, to $1.65 per roll, while the price of asphalt) shingles, roll roofing, and similar products\ Was increased. in the same area (CR. 262, 64). Volaseo didi hot manufacture roll roofing and shingles (R. J, ee w . a Finally, on Mareh * 3, 1958, defendant changed entirely its.pricing format and, sy stem; abandonmyg the county zone system and establishing a uniform list price for its prod. gts. all over the United States east of the Rocky’ Moun tains. The list’ price on asphalt saturated felt was set at 4 $3.60 per roll, and, from this price, varving discounts Were ‘allowed depending upon. the section of the country:In most cases,’ these discounts applied fo statewide areas. Sepa: rate discount sheets were dssned for each state, ‘and the. a discount for the State of Tennessee was fifty: two per cent plus six per cent,.or a net published dis. tributor price of $1.62 per roll on. felt and.a net price, after taking into. aecount defendant's secret vear -end re bate, af approximately $1.54 per roll (R. 266, 267, 2004, — MWD). ; The price after all diseounts Was $1 G7 t6 $1.90 in Ken- tucky, $1.79 in Xorth Carolina, $1.79 in South Carolina (Ix. 53, R. 262, 266-7), The defendant cotdd give no specific. reason for the low price in’ Tennessee other than the ‘general. statement that ‘he was meeting competition ee (R. 2005-6, 2051-56).. e | 7 As of March 3, 1958, no one except defendant Frye had sold or offered felt- for sale in the Knoxville area at a . ever as low as $1.62 per ‘roll (R. 2052;:Ex.. 451; R. 217: 2469-78). This price schedule alse was initiated by ie o fendant (R.°1076-77, 1126) and” followed hy other manu facturers (R. 452-34). ae : Pty be % & in ay A tabulation of prices of. asphalt satamgated felt: under’ the various price lists published by the defendant. from August, 1955, through Mareh, 18, follows: . ee ae Exhibit Date’ Knoxville Rrookville Chicago . Nu Page S- 1-55 2.24 2.24 3.24 * vs 16h It. 1-55 184 184 “TSS ue 166 2-19-56 2.16 z gt ee 2.16 30.) «1GN oe 4- 9-56. 2.16 2.16 2.16 ae 1S 6-15-56 2.22 2.22 2.22 36: ° 203 8-1'4-56 - 2.05 222 2.22 37 210 - 1l- 1-56: 2:17 (2,.06€08 . 247 4206) " $26¢¢238) . 3. 213 12-26-56 2.17 (2.06)4 2.17 (2.6) 2.17 (2.06) a0 , 226 2- 4-57 2.00 (1.90) 2.17 (2.06), 2.17 12.06) 41 224 2-16-57 2.09 (1.99) _ 2.29.42.18) 2.29 (2.18) 42 236 | 5- 8-57 . 1.98 (1.88) 2.29 (2.18) 2.29 (2.18) 3- 238. . ; $ ‘ 6 41 7-18-57 2.03 (1.93) 203 (1.93) 2.28 (2.17) 50 249 . 10- 3-57 1-91 (1.81) _ 2.03 (1.93) 2.28 (2.17) | 258 * J+ 2-58 1,83 (1.74) “+ 2.03 (1.93) 2.28 (2.17) 52 259 1-27-58 1 ‘63 (1.59y 2.03 (1.93) 2.28 (2:17) 4 262 | 3- 3-58 ~ 1.62 (1.54) 1.90 (1.80) fares 435 262 Note: ‘The exhibits are price lists which due to their voluminous nature - were not printed-in the joint appendix because of the undue experse in volved. We do not believe the prices Jisted will be disputed.’ nc oct . : es é a * Figures in parenthesis show net sales price. after the secret vear-end rebate of five per cent, _4 Adjoining counties to Knox price reduced to S208 (1.98) UR, S607 eek : ° o S The Minois discount sheet was not inclided in’ Exhibir. 53 UR. 267). «. Competition in the Roofing Industry. @ , The ‘national nianufacturers selling in. the Kuoxville “area, in ‘addition @ Lloyd A. Fry Roofing Company. were - the: Ruberoid Company, Certain-Teed Products Corpora tion, Johns-Manville orporation, the Flintkote: Company. the Philip-Carey seh iene Company, the Barret Di vision of Allied Chemical Cothpany, Bird and* Son, Logan Long, United States. Gypsum Company, and the Celotex Company (R. 166, 555, 640-42, 18389, 1980), In addition to: these, the only small or independent companies selling in the Knoxville area, other than plaintiff, were the Ohio Paper Company, which, sold felt. only, and, per haps, the. -* Mi Palner-Ball Company inccthe Kentneky area. (RE S55-46, HO6-10). All of the sorealled national or major conmpanies — “above listed also sold asphalt rooting prodiiets in the Chi cago and Brookville area and other aréas in which the deé- fendant sold) GR. 1501-02,°°1925-28y, Prior to 1998, the Ohio -Paper Company sold a’ very substantial volun ok. asphalt saturated felf in’ the East Tennessee areas (R. « 1975). Their poliey was to sell at five per cent. below, the tuajer ccompanies” prices’ (R. 1469). However, when the priee was’ foreed down to where Ohio was having to sell for $1.79 per roll in. the winter ef 1957-1958, they pulled out of the whole area and stopped. selling in Tennessee (R. 1476)... This price was helow their cost of production : and. delivery (R 1476-78), : 5 I 1). Cost of Production ‘of Aaphiae Saturated Felt. Daring the vear 1958: it cost the’ defendant, at. Brook. ville, Indiana, the plant) supplying Knoxville, between ¥LSTO and $2.207 per roll to produce asphalt) saturated felt and ship it to Knox County, Tennessee (R. 480-484; Bix. 2383) Ro 1868, 2409; Ex, 285, R. 1863, 2411; Ex. 256. 2. 1369, 2412). Even assuming the lowest estiniated Cost, Fry was selling-below cost in Knoxville contintious! eather October 3, ASTe (See Chart, aupre, p. 2.) It cost plaintiff, Volaseo, $1.75 per roll ‘just to manufac | ture felt at its Knoxville plant CR. 486). Mr. Jackson of Ohio Paper Company estimated that it cost’ his COMPA $1.57 per réll to produce asphalt felt and 276 per roll te de _ liver it te Knoxville (R. 1477:78)., } ‘i. Petitioners’ Damages. ~ During Volasco*s: first full vear of sales of saturated: | felt, its sales grew very rapidly (R. 300907; Ex, 1038.2. 40, 2330; Ex. 164, R. 542, 2331). When prices were rather iriistically redneed by the defendant in plaintiff's market :‘¢e rr - . . . : ‘ ® . area be = in the spring oft 1957, plaintif® istrneted — its’ salesman vot Y@ push’ for sales at a great distance troné the plant nt to concentrate: on customers: in the VICINIEA of Knoxville (R507, 633-4). Phaiintitt’s Sales began drap ping off substantially at this time (Ex. 168. Re od) 2550; Ex: 164. Ro 34ze.2381) until the spring Of 1958 when de ; fendantredneed its price on felt in Tennessee to $14 a roll, and at this time plaintiff, withdrew its salesman from thre territory and instructed him only to take repeat or ders trom regular customers and not to attenipt to make any new sales: as the price was below plaintiff's cost of produetion OR. 486, 514). Prior te 1954, Mr. Cieorge Krug had learned that» apparently: the cheapest price in’ the Kroxville area for asphalt saturated felt) had been $2.00. per roll during the winter or slow season "(RL 757, 787 1250). : Mr. en testified that. Volasco suatered Joni: brerea. sow of the prieing policies of defendant above: described "CR. 518-15, 896-99); that, based upan the potential mar _ ket ‘and upon Volasco’ sow) sales records fu the period before pr ices got so low, but for the actions off ‘the defend ant? plaintiff would have ah percept. Since the company had begun salecof this prod net in T94, he had two full years of sales experience with “it prior to the time the. price war: became so severe. By applying the same percentage of growth te asphalt felt is his experte nee had shown the company was able to achieve in hopping wsphalt, he fe und that: the sales curve: tor asphalt felt indicated total sales of 295.0000 rolls. hy the end of the fifth vear of operation CR. 905-954; Ex. 184, : R. 904,. 2549). Both these methods of projecting sales re ~nited in total sales figures thrat tied in ‘very closely) witli i projection based upon the United States Commerce De partment Facts for Industry figures on total sales of” ‘felt as applied to the population of the are within a 2O0-mile radius of Knowville, assuming that plaintiff could reason, ably expect to eventually obtain approximately 20) per cont of the volume withifi that area, This, method i determination indicated .a total potential of 320,000 rolls Sper vear CRO 907-908, 942-44)2 0 By the second method of projecting sales, that is, by applying the same! ratio of increase to felt as experience had shown the company was able to produce in mopping asphalt, Mr. Krug estimated that Volaseo would have. sold 120,006 roll. of felt during the year ending April. 1997 (R. 1OSS)). To fasthok corroborate this estimate. the wifness made”. n study of Volasco’s. sales recotds. and determined that during the -fikst twelve months of sales cof felt, Octoher . 14> through September 156, such Sales aver raged S22. rolls per eustomer CR. 501-504, 1090). Applying this av erage te theoeaverage number of accounts which Volasce sold during the year ending April 1957 .wonld indicate | total sitles of 115,000 rolls, of felt for that vear CR. 1090), Ih. fendant’s price ‘cutting in the ‘Knoxville area Began in- earnest withthe 7!. per cont special discount on non-per Norated felt-in August 1996 (R. 210-12, 1090) so that Volas — . co's sales were affected for about half the 1957 fise al Vvear, . ra) These two methods of projecting sales for the vear ending + April 1957 having come. ont as close topeach ether, Mr. Krug felt justified in testifving that but for defendant *s illegal pricing, Volaseo would have sold 115.0000 rolls of. felt in fiseat vear TST ORL rH91-92). As shown by Exhibit) 164° (R. O42. 2B81). the rate of growth of the. sales of mopping asphalt) dropped + off drasticatly when the sale ‘of ‘Saturated felt began its sharp | Pe line during the vear 1997, Having found from a study: ; his customers’ accounts that there wWas'a definite. cor: a between. the sale of mopping asphalt and saturated ret CR. 1090), Mr. Krag testified that im-his opinion the loss in sales of asphalt felt: redneed his, sales of mopping asphalt during the vear ending, April 1958, and that chad the sale of saturated felt continued as projected in ae cordance with Exhibit - 197 ER. TOR, 2573), that the Sale oof mopping asphalt ‘vilso would have continued along the sme entve on which it) had started (R. 1091-2; Kx. 197, R. 1092, 2373). ‘In his conclusion that sales of saturated. felt. and mopping asphalt go together, Mr. Krug bs jot , sti intiated by two of defendant’ > In answer to a question by the Trial Court as te whether 4 . “No, our answer is based on these -forec usts Qu ant own experience, Tad we not been undercut in price, we would have had more. experience to prove these forecasts. That is, the Wasis of our figures, onr own experience, here, our forecast” (R. 957). Plaintiff's. testimony “was afso clearly admissible and DAL, 265-266 (1946). In holding that plaintiffs’ proof as to loss of profits was _ improper, the Appellate Court elearly invaded the province ‘of the Jury in attemtping to. weigh suéh evidence. The Court seemed ‘to conclude that the testimony Was int. prooadle because the Court did not agree with the wit “nesses that a fair basis for projecting the sales of felt was. - by using Volasco’s actual experience -in the sale of mon: ping asphalt. ‘In this connection, the Court stated, “Ther?! ‘is no-evidence to support the claim that there is a general overall pattern that mopping asphalt and felt move in any « . c >. ve a partic miler relation to each other” ey 11). ‘In this con clusion we respectfully beg to differ with the Court of Ap peals and subniit that. there was ample evidence from whieh thé Jury. could tind that plaintiff's witnesses were © arranted in concluding that sales of mopping asphalt and Yolt do move in a‘relation to each other, Tn disc ussing the chart showing the sales curve cot “asphalt felt, asphalt and .roof coating (hx. 164, R. oe, 2331), Mr. Krug testified: “The asphalt and felt, are hor mally sold together cand the decline in the felt ‘would nit urally affect the sales curve of the asphatt’’ (R. 546). He further testified: ‘* Every time the price Was reduced below the price we were selling we were injured to the extent we would have to reduce our price to remain con® petitive so.all that we have sold ‘at the lower price we lost the difference betWeen the previous price and the hew price. Also, as many of these discounts and undereutting in price cime without our knowledge, frequently business - was ‘lost completely of the customer’ being offered a better price than our then current price, that he might and did -place the business with another supplier, so we lost some business altogether. And. ‘of course, the third thing that resulted from both, and primarily the second set of sales where: we did-not sell at all, our other products suffered because normally they are sold with the félt. So if a man placed his felt business with another supplier he! would Ie - very apt to also p rchase his eoatings and hig asphalt from the other sapplier\ (R51: 3- ol). Later, he testified: The mopping asphalt shown 6n Ex hibit 14° showed a very drastic flattening out of its yrowth. curve, at the sane time the felt sales started de clining. . « “8As we know, the sales of) these’ two product s go to, gether. The decline in ‘the felt sales would adversely affect the sale of the mopping asphalt (R. 1091). Minalty dhe stated: | : Qo Now vou have testified that there as. im went opinion, a relationship between the wales of asphalt ‘and felt. Towillbask you whether or not vou hawve miade. any Studies other than those indicated on the chart, Exhibit 197, to reach that conclusion ?¢ AL Yes, TE believe T me ationed thee that wonldy't hea relationship. We made a study of a broad section of our accounts’to determine on the average how much te Jt is sold with asphalt. | ° pees ee ‘That study indicated that approximately two and one-quarter roll of asphalt— of felt is sold per roll? ot asphalt” (R: 1317, 1218). | Ax further showing that Mi. Krag’. festimony Was tot _eimply an assumption of dis part, Mr. Joseph Madler, a witness for the defendant, testified! ogn direct examination: (), ‘Do you sell both axvhalt saturated felt. ane eer sy Noe ‘A. As a part of the yoofing line, ves. “Q Do all of the people who buy veur felt tron : “you on buy asphalt from you. — rec -T would sav ves” (R. in ath). Also, the witness, Ro LL. Steele, a Witness on behalt of the alefendant, testified on CYOSS-ONATMTMAT LON : “Qe Mr. Steele, from your experience as a purehias ing agent, is there anv advantage ina manufactures having a complete line of asphalt: roofing produc 1s as against having only one produces sue Was asphalt sat nrated felt to offer for’sale to its ehatome es? You may answer, \ “A Yes, sire The mannfacturer dyes have an ad cuntage in having a complete line of roofing produvt- 7 This Hrondd fead “per demi ot asphalt” - xe ve © asdoes-any manufacturer: who has a complete line, over one who has specialty iter. “Q. What is the basis for your statement? Why da. . vou say that! : ‘ eee] 2 N. Each item will so to sell the other one in relationship te the product CR. 164). ~All of this testimony ‘is further corroborated by the tact that asphalt felt and mopping asphalt are the two in wredients, and therefore used together in’ the construction — of built-up roofs (R. 645, 1447, 1935). . . further, in holding that in the two years succeeding the “material | period, that is, the years 1959 and 1960, the: fact “that asphalt saturated felt. deere: ased in each of those years While the sale of asphalt increased refuted . Mr. Krug's claim that sales of asphalt and saturated felt ‘moved jn relation to each ather, the Court was elearly guilty of usurping the functions of the jury in construing, ; weighing and analyzing the-testimony. © Mr., Xrug “had very clearly testified, and his entire testimony a yWws, that the price of mopping asphalt did not substantially. de crease, Whereas the price ef asphalt saturated felt did de Crease below cost, and that, for this reason, he instructed his salesman not to try to sell asphalt saturated felt, but merely to accept orders for this product from old, estab. lished customers in order to keep the business (R. 507, 514, H83-4). Ifesfurther testified, and the exhibits (Ex. 184, R. 2340; Ex. 164.,R . 2331) clearly and dramatically show, that on the same late that sales of asphalt saturated felt started their precipitous decline, fhe imerease of sales in mopping sasphailt likewise abruptly stopped, and sales of this preduet leveled off (R. 953). Then, too, the fact that topping asphalt is used for some purposes other than in built-up roofs would tend to keep sales of that product up (R. 1284, 1935).: There ix no question on this record, how: ever, but that if Volaseo’s sales of felt had held up the {a : sales of asphalt would dave: increased substantially riots than they did. , In analyzing the testimony of Mr. Sem Bye, the expert Wwithess on behalf of plaintits, the Appellate Court) sliew that it did not fully understane qe testimony buat jumped to conclusions Without taking inte account all of the evi cence. The Court quoted Mr. Bye's testimony to the effect that in his opinion it was reasonable to assmime that Vo - laseo could have reached a volume of 195,000 rolls of telt by the end of April? 1058. The Court then says: ** Hew he arrived at this figure is unexplained. He applied ne mathe matical formula. Heappears to be a fignre arbitrarily taken outot thin air’ (A. 12). li this statement the Court: was in error, This witness had already testified as to market studies which he had made (R. 278-1384) as teca com parison between the market area served by defendants 7 plant at Moorehead City, North Carolinas, with that served by plaintiff's plant CR. 1882. 1885) as to a study of the’ volume. of sales, of asphalt saturgted felt at defendants Moorehead City plant CR. 1385), and that, based upon sueh studies, in his opinion, ‘Lt would be entirely reasonable that Volasco would have ‘aw potential of up to, Say, approni mately 300,000 or more rolls of felt) per vear (R. 1386, 1293). That, based “upon this. potential ard based upon, Viilasco’s experience and: record: in the sale of mopping asphalt, it had a second vear potential (that ix, the vear ending April, 1958) af 194,989 rolls of felt (78,914 rolls of fell snuultiplied by 147% —see R. 90-and Ex. 168; Ro 2330) ax compared with Mr. Krug’s estimate of 195,000 rolls + OR. P8871890). This the figure of 195,000 rolls as testi- fied to-by Mr. Bye was clearly a judgement fieure based upon all the factors above set ont and not picked out of the air: “Mr. Bye did apply a mathematical formula in verifying his judement. ae : The Appellate Court. we further submit, unfairly and improperly assessed the testimony of Mr. Bye when tite, « ‘ yp page 13 of its Opinion it stated that his estimate was con ditioned - upon Volasco having an aggressive sales or- wanization and giving oe service without his knowing anything about Volasco’s organization or ability to give serviee (A, 13). And,in saying ‘that ‘tone cannot. sav Moorehead City’ shipped over 300,000 rolls in’ it year, therefore. Volaseo in another area even though essentially: similar vould ship a similar number ofsrolls..* In the first: plae e, the witness's testimony is much more detailed, backed up by studies covering population ino the. area, residential units and commercial industrial buildup in -re- lation to felt sales, and the final conclusion by this ex ‘pe Tt withess that in his opinion the market for the product Was ver¥ comparable, particularly in view of the fact that a. substantial part of it overlapped (R. 1879-1386). — In making his estimate as to the potential sales of the. com- “pany during the second year, the witness very clearly ‘conditioned that estimate upon the company: having an ag ing good service ‘to its customers in the area -(R. gressive. sales program supported by advertising and giv. 1393) 3° There was other evidence in the record from: Mr Krug and others as to the actual sales policies: of the conypany and its sales efforts (R. 495-508). The vicious nature of the. price eutting on felt in the Knoxville area is itself tes. -timony to the effectiveness of plaintiff's sales efforts. it the jury from this evidence found that Volaséo did have aggressive sales policies and gave good service, then it Was entitled to consider the testimony of Mr. Bye as te its potential’ sales. for the fiseal vear ending in April ot 1048, Tn overruling numerous objections to the testimony of this witness, the Trial Court carefully peinted out on more than one oeeasion that the objection went to “the weight. of the testimony rather than to the competeney : (R. 1882, 1285, 1391). Tt was not error for the Trial Court to admit the testimony into evidence for ‘‘all the facts and cirenmstances of the case having any tendeney to be chow damages or their probable ainount shonld be sub mitted. to the jury to permit: it to make the mast intel “ligible and poe estimate which the nature of the tease will permit’. Story Parchment Co. v. Paterson» Parch- ment Paper Co., 282 Ul S. 555, 564. ; Wherefore, it is egecibate inbinitted that the Appel late Court, ins holding that plaintitl’ s festimony as te damages was insufficient as a matter cof law, in effect de ‘nied plaintiff a trial by Jury in, violation Jot the Seventh Ainendnrent to the ¢ ‘onstitution of the U nited States and _ disregarded. the mandates of this Court. in. the Bigelow, Story Parchment and Eastman Kodak eases and atteinpt- fo set up a tule for proof of damages in confliet with that of other -eireuits, particularly, the Second Cireuit in’ the ease of Rankin v. Associated Bill Posters, 42 1°. 2d doz. the Eighth Cirenit in the ease of 20th eres Fox Film Corp.. v. Brookside Theatre Corp., 14 I. 2d S46, cert. de- nied 242 U.S. 942 (19: 52), and the Tenth Cirenit in the case of Atlas eee Products Co. v. Diamond Block and Gravel Co,, 260 F. 2d 950, cert. denied 363 U.S. 843 (1960). (2) In addition to loss of anticipated profits, plaintiff ‘was entitled to recover for injury to. its business, or de- preciation in the value of its property, and the Sixth Cir. cuit’s holding that this element of damages was duplica- tous is in conflict with the decision of. this Conet in the — Story Parchment case and with the. Tenth Circuit in the Atlas Building Products case. ‘ The Sixth © ireuit in holding that plaintiff was not or titled to recover for Dijury to its business as well as loss of profits is holding directly contrary to the holding of this, Court. in the case. of Story — Co. v. Paterson Parchment Paper Company, 242 U. 8. 595, and TT contrary to the holding of the ue Circuit in the ease -of Atlas Building Products Co. v. Diamond Block & Gravel : -Co.,-269 F.2d 950. The Sixth Cirenit does cite these cvitses e q : 4s and purports to distinguish them from the instant ease. We submit, however, that the: distinctions relied apon ly the Court are purely imaginary and not real. It seeks to distinguish the Story Parchment case by saying that .in at case the: plaintif? was forced out of business. ~ It is respectfully submitted that there is ne difference in law nor in fact as tow hether the plaintiff. closes its business - oF continues to ‘operate on a limited and curtailed basis as did Volasco. There is iio question but that. the assets of Volasco were worth some $389,000.00 less on “April 17. 1958, than had been invested in that company. This was the testimony, dnd there was no sugared testimony. Thé Jurvs was entitled to consider it) in arriving at its verdict. The Appellate: Court in ia this evidence incompetent is usurping the funetian of the jury and deny- ing plaintiff a Jury, Trial. in violation of the Seventh Amendment to the Constitution of the United States. In stating that plaintiff,-by receiving damages for profits and an injunction to prevent further illegal pricing, is made whole is a fallacious assumption’on the part of the Court.” An award of damages in an antitrust ease is no ‘substi- tute for actual earned profit. A business operating profit. ably as a going ¢ concern has its or ganization for’ produe- tion’ and sales developed, it has good will and customer relations established and it has eredit standing based on its history'of earnings. nnd to future production. While-it is true in the Story Parchment case that. de fondle aut. had closed its business, vet it’ is also true that the only diffe ‘renee between the damages j in such a case and in’ the case at bar is a difference in degree, and this Court iy its Opinion allowing damages for injuries to plaintit’~ business relied not one whit upon the fact that plaintitt hae closed its business. In attempting to distinguish its Holding in this case from: the holding of the Tenth Cireuit in the Atlas Build. ing Products case, the Sixth Cireuit merely stated, ‘* but . there is no indication-that they overlapped as they do Shere’? (AL ia). We sulimit that acreading of the Opinion in the Atlas Building Products case reveals that the ‘situation of the plaintiff in that case is*identical with that of the plaintiff-in this case. In that case, plaintiff's proof of damages followed the identical theorysthat plaintiff in the instant case followed.- In diseussing the two element- of damages the Tenth Circuit said: "Tn that regard the jury Was instructed that. in. determining damages it might consider as one of the elements, any profits that may. have been lost dys appellee in its: business; and that it might also conside: ax another element of damages the extent to which the value of appellee's profit or the net worth of its assets had been ‘diminished as a.result of the price discrimi “nation. The appellant objec ted to this instruction on the ground that it permitted the jury to assess double damages for one wrongful act ‘ ‘The statute speaks of injury to’ ‘business or prop- erty’. And see See tion 4+ of the Clayton: Act, 3s Stat. TRL ID FOS. CCA §15.° And, those words in their ie a sense have been construed in terms of (1) the difference, if any, between “the amounts actually realized by the injuredsparty and what it would have “reasonably expected tocrealize from sales but for the unlawful, acts complained af; and (2) the extent to w hich the value of the petitioner’s property had been * diminished as a result of such acts. See Story Pareh- ment Co. v. Paterson, supra; Kobe, Inc. v. Dempsey Pump Co., supra; Bigelow v. R, K.-O. Pictures, supra. We think hoth loss of profits. in business and diminish ment of the assets were proper elements of alamage, cand the trial nina did not err in so submitting ‘the case to the jury’ ~ (pp. YS8-999). ne It is respectfully submitted that the Opinion of the Sixth Citenit is not only, in direct conflict with the di. cision of the Court of Appeals of the Tenth Circuit but is. also in direct conflict with the applicable decisions of this Court, and,-for these reasons, this Court should “exer: cise its power of supervision by granting certiorari ‘in this cause, : - (3) Defendant's illegal pricing practices as to plaintiff” s principal product adversely affected sales of other prod- ucts, mopping asphalt and roof coatings, manufactured ° by plaintiff ‘and it. should be allowed to recover the losses thus caused. In holding that plaintiff was not entitled to recover for loss of profits due to decreased sales of mopping @sphalt und roof coating, the Gourt based its decision on thagrround that the prices of “these products were not involved in the ~ price Inanipulation on felt sales and, ‘*The evidence does ‘not support Mr. Krug’s statement that sales of these products decreased eee * with the sales of felt” ‘ +” (Opinion, 18).. We are not aware that Mr. Krug ever mad® the statement that the sales of these products de creased proportionately with the sales of felt. His testi mony as borhe out by the —_—_ rec cords and ais depic Hoel on the chart, Exhibit 164 OR. 2831) was that the increase in sales ‘p mopping asphalt fell off drastically when the sales of agphalt felt. began: their precipitous decline. ° At one point in his testimony in discussing the chart, he winieds *t As vou see, avhen the felt oe started decline ing, the actual asphalt sales leveled ‘off apprec ‘lably. Their growth was wreatty curtailed) from that point on’! CR. 992), He did testify, as hereinabove sti ited, that in his dpinion, and based apon a study of his own gompany ‘s accounts, * there was a pretty’ definite ratio between the sales of mopping asphalt ahd of asphalt) saturated felt during normat times that is during the period prior to defend: ant’s illegal price digeriminations. Mr. Krug gave very cogent reasons: for the sales of mopping? asphalt and root coatings “not increasing as they normally should have * increased had not the sales of felt been adversely affected, for, as he said, he was unable to keep a salesman on the -road with the price of felt being be below cost of production and delivery (R. 507, D4 633-0: i). . The only logical re- sult of such action is-readtvection in sales of ali of plaintitl > products. If plaintiff's sitlesman is unable to eall on cus tomers because he cannot.afford to sell the principal prod uct of the company, then he is not soliciting orders for the other products either. Det ‘endant’ s actions in violation of the’ antitrust laws, by: causing plaintiff to reduces its safes effort, necessarily injured jt in the sale of the other produets which. it manufactured, - That there is a relationship between the stiles of asphalt and felt. or that factors affecting the sales of felt) alse . eN . . gary ‘ mia Ra atfect asphalt, we believt is cleatly shown by our disenssion: under the previous section of this argument at pages 42a ? to toa, . In holding that ** plaintiff Was not entitled to recover for loss of sales on mopping asphalt and coatings” (A. Toa 19a), the ‘Appellate Court does violence to the holding ot . this Court in the cases of page Kodak Co. v. Southern Photo Materials Co., 273 U.S. 359, and Story Parchmefit ‘Col v. Paterson Parchment P area Co., 282 UL 8.555.) This (‘ourt “should grant certiorari and correct the holding of . the Sixth Cireuit on suc han important juestion of Federal law for the\losses thus suffered by plaintiff were clearly an injury to its business or property by reason of a vio- ‘lation by defendant of the antitrust laws. 8. Plaintiff should have been permitted to present to the jury evidence as. to its loss of profits by being prevented from entering upon the manufacture and sale of shingles. ~ and roll roofing, its losses based upon its projected sales during a mature year, and the loss in value of its business as a going ‘concern. , = () Plaintiff clearly had the intention to go into the busi- ness of manufacturing and marketing a full line of asphalt roofing products including shingles and roll roofing and had acquired at least 90 per cent of the plant, machinery and equipment necessary to manufacture shingles and roll roofing but was prevented from making the 10 per cent additional investment in machinery necessary for these _ products by defendant's illegal pricing practices, so that _ plaintiff should have been ‘permitted to submit to the jury testimony as to its losses on projected sales of shingles “and roll roofing. — The questions here presented are w hether the plaintiff intended toe go ftnte the’ husiness of manufacturing. roll ae \ roofing and shingles avd whether it was prepared to en gage @n that business. ; On the question of intention, there can be io doubt under this record, Mr. Krug’s testimony, that they had the intention from the inception of the business, even prier: to organization ‘of the plaintiff corporation AR. ahs & clearly supported by a memorandum dated April 12, }94, filed ast lh. xh 17 and copied ir the Record ¢R.L 7 133). They had blue prints prepared of plant layouts including * refinery, roofing pnt and entire layout (R. 82). Rlue- print of proposed rootiqe machine was tiled as Exhibit 2 but is not copied in the Joint appendix. Mr, Krug’s testi mony Was fugther substantinted by a letter which he wrote the Southern Railway Company on June, 1954, marked as Exhibit 26 for identifieation (R. 139). from, ‘whieh it appears that as of that date the completion of the roofing machine by adding :the additional elements to : ‘manufacture the vol roofing and shingles to the felt: saturator was contemplhited for the winter of 1954-55 CR, As to whether: it was ‘tprepared’; to engage in that Pusiness, the evidence, shows that as of*the end of the fiseal vear,” April 39, 1956, plaintiff, Yolaseo Products Compatiy, had total assets prior to depreciation of $1H, W2VG (Kx. 158; Ro 515, 2825). and Volunteer pgp Company had total assets of $275,543.60 (Ex. 159; R. 2326). While as of the date of trial their ‘combined ASSETS were $717,249.49 (Bx. 160; R. 535, 9397). In order to nufacture roll roofing and shingles, it would he neces: sary. for plaintiff to add certain items :of equipment ane machinery to its existing saturator, and such additional _ pieces” of equipment would cost $60,000.00 or less to in- stall (R. 508-10). Thus, to fully equip itself to manufac. ture roll roofing and shingles, plaintiff or its promoters, would be required to invest approximately 8 per cent to - 13 per cent additional capital in the business. “The large \ . \ inveattnent aly dy made by > plaiptift vould not have been made had fev not intended to \mannfaeture a complete line * of: roofing materials ‘(R. 1293). They were abie financially at all. times’ after- the Fall of 1955 to complete the roofing plant (R. 568). They had the land, the dock, the office buildirie,: factory building, the asphalt facilities, and the saturating machine already .installed and con ‘structed (R. 98-104, 140). All they lacked was the addi- tion of ‘comparatively minor items in order to be fully prepared to manufacture roll roofing and shintles. ‘As. to i & whether. a person gs’ prepared. to engage in’a busifiess is “always a. question of degree. Suppose evetything had been done and all machinery installed, and all that re-. _ tained to bé done was the installation of a switch to turn electric current into the machinery. Under these circum- stances, could it -be said that plaintiff was not ‘‘prepared’’ - to ‘go into the business? Mr. Krug stafed. their reason | Lor not. going into the full line as follows: " *Q. Then why did ‘you. not complete it! “A. Two reasons, Number one, as SOON as We began the manufacture ,of saturated felt the price cutting commengd,gand if that same policy would be applied ~ ‘to the other products which we planned to produce.” ” we -wonld be. forced out of business. We w ‘ould de. come insolvent, had we attempted: to manufacture the, complete line. « . “We gould absorb the losses ‘on _the felt, which - we have abggrhed since 1959 to date, and are still in ‘business ant r ‘position to carry out this suit. We _ couldn't have done’ so had we spent the motiey on “the compléte roofing machinery and made the con: plete line of roofing produgts. The Josses on the cou _ . plete line would have been so tremendous. The. felt, is approxithately 15 per cent of the total roofing mar- _ ket, so the loss om the other 85 per cent’ would have: been tremendous’ (Ro 5@R-569). i) es i ed ‘ 4 a? ” r P . . . ths . » “8 . items ik not a complicated engineering or manufacturing } : ii pa ° a . ; — « a a . v “ye see It should) be cledrly” understood ‘that rell roofing ang shingles are tierely additional, produets -in the asphalt, rooting Line to those alre ady in production bt the pl: aintift, that the basie raw-materials with the exception of granules are the same as utilizéd: in the manufacture of asphalt saturated felt, and that the-manufacture of these additional -problem to a company already manufacturing saturated, ‘fedt’: (R. 91-92, 135-37). . ‘But for the illegal. actions’ of the defendant, plaintilf would have entered into the manufacture of fhese products (R. 512-13). ; “4 person has a,legal right to engage Ina lawful business. If he is unlawfully exchided from exercising this right, when he is prepared and intends to exer ‘cise it, he suffers an injury for which the law awards ~ damages—he is: ‘injured’ withing the meaning of ‘the i ‘ederal statute. = : - Pennsylvania ‘Sugar Refining Co. v. E peanaret Sugar ‘Refining © Co., 166 Peds: GO (2d Cir, FOS). ve : See alxo Triangle Conduit & Cable Co. v. National Elec., tric Products. Corporation, 15? F. 2d 398, 400 (3rd Cir, 1945); American Banana Co. v. United Fruit Co., 116 I ‘ed. 261, 264 (2d-Cir. 1908) y William. Goldman Theatres, Inc. v. Loew’s, .Inc., 69 F. Supp. 103 (EB. D. Pa., 1946), aff'd 164 FL 94 1021 (3rd C ‘i. 1948), cert. den, 334 UL S. Sil: and American Tébacco Growers v. Neal, IS FL 2d 869 (4th Cir. 19 wun Petitiamer: Volaseo, | peepetialyr urges: that, under the. testimony in. this case, the questions should lave been aa to the jury under proper jnstructions ato whether plaintiff had the intention and was. prepared to proceed with the manufacture of roll roofing and shinglés .& ? ——,) ‘ at ~~ and. if ‘so, whether it suffered any damages : asea result. oF Fry's illegal actions in preventing it from entering ate - o : this business. i (2)- Defendat’s illegal pricing had as of the date of | .. suit delayed plaintiff at least 2 years in. reaching full de. velopment or maturity; plaintiff, therefore, should have been permitted to present to the jury testimony as to. its loss of anticipated profits during two (2) of its mature “years, particulirly since its total business life was limited | to fifty years. % Pe rl, ‘ Mr. George Krug explained this theory very suc ‘cinetly when he ‘testified as follows: Aa | ; “*Q. You explain to us just how vou arrived at. “it. if you will. 7 Ae ‘A. Our company has a lease Ww ith Southern: Rail. way. for 50 years covering all of the lakefront prop. erty. So that——— ‘By Mr. W. ilsan : “Q. Let me interrupt you right: there to make clear, What do you mean by the lakefront Sonata ’ Ix: thet. the property your plant is: located on? ‘*A. Part of the plant is located on it. but’ it: is’ _ where the’ docks are located, and we could hot receive. asphalt by river without the lakefront property, and the cheap transportation of asphalt to the plant 1 ix the economic basis for the plant. — | “*Q. Then there is other property which your com pany: does own outright, is that correct? °° oy ;2- “*ASPhat is correct: - “9 =, ¥ Q.-But that property, does it or -not have aceess-- to the lake? | 0 ’ AL The property we own dows not have Aaceess to : the lake. ° —~ wi : x ; : Q. Except ae ross: this Souther u Railway property + ‘*A. That is correet. e. Proceed. Bek a F har a “A. So we fegard that as the-Jife of the corporit tion. Every new company ix yoing to havesa growth - “period, based on our own growtli during the relatively limited period that we had experienced before the, price war got sO severe—-— , = Fines ” + eo a e.: . _ Ae ; ‘A. Plus the growth, and growth in’ the asphalt sales which were. not, so seriously reduéed, 1 believe this type of business would reach its maturity in“five to six years. We ‘have spefit . about that much time: up to 1960 in developing the business, but rather than ‘reaching maturity we are. back practically where we i started: in felt. So that af we are successful in this suit, we are going to have to start all over again tn building the business so it will be another five vears . before we reach our maturity, , ; : “In effect then, we are going te’ have 10-years of our 30 year corporate life, taken up by growing pains, - rather than the normal five.” For that reason, 1 feel the two and a half years that we have lost between* ‘5 and 58, we have lost it forever as far as our ma- ture earnings are —— We will not have that gmany véears left: Pa “Our projections, therefore, are based ou what we feel we would earn w hen we reac h approximately our full. growth” (R. 900-902). 6 oN income suffered ved of two and. gne-half at $163,960.00) per vear ord Mr. Krng then estimated the’ by his company by being ‘de vears of its’ mature . life - $409,900.00.-(R. 966-98 As stated by Judge Christianey in the case of Allison 11 Michigan 342, 550-556, quoted with ap- — a, | . ve > : ’ op proval by this.Court, in the.case’of Story Parchment Com- pany v. Paterson seen isn Company, a2. S Nie, OOF: ek SERA 2 ee jury all the facts and ci “umstances of the case, havi if any ‘tendency to ‘Show damag®s, their probable ef amount; The. Appellate, Court: éa hold‘ that Volaseo, could: re- cover damages suffered after the date of suit proximately caused by wrongful acts of defendant before the complaint -. We ean see no sitet ' to placing before the was filed (A: 16a-19a). Plaintiff's mature- vear coneept or. theory of damages fits exactly - irito this category ‘as under it” plaintiff is seeking to recover’ two and- one- half lost vears of profit of which it was deprived by defendant’ > violation of the antitrust laws prior ‘to daté of suit: See 's Lawlor Vv. Loewe, 235 U. S. 522, 586 (1915); 20th Century.- - Fox Film Corp. v. Brookside Theatre Corp., ‘194 F. 2d 846, cort. denied 343 U. Ss. "942 (8th Cir. 1952). — ae (3) Plaintiff should not be limited to testimony concern- ing the difference between the. ‘actual investment in its properties and the actual value ‘of such properties in pre- - senting’ its proof as to the injury to its business or prop- = erty caused by defend§nt’s uctions but should have been. permitted to introduce testimony as to the difference be- tween the going concern value its business would have had but for the actions of the defendant: and the actual value of such business as of the date of suit. ; As an ‘abstract proposition it. is clear that plaintiff in an antitrust action should recover in addition toe loss of. - profits which it may he able to show, damages to the ex- font Griffith, 334 8. 100, 107.7 ; m . . ‘ ‘ i SS. ; . oe We respectfully submit, however, that the Court failed to apply, properly the lay as thus enunciated to the evi. dence in this ease, al er aS - Defendant is the largest producer of ‘asphalt roofing products in the United States. While agreeing witli this” statement, the Court of Appeals on page & of, its Opinio ° volunteered the further statement, ‘‘It was not. the largest “gompany, manufacturing this product 2. °° (A. Ta). T his “statement of the Court of Appeals is uot laser by the record in this case ,and, for whatever dts worth, ap parently was taken from defendant's Britt, im the. Appellate Court. In its Main Brief, defendant stated on page 15,” ‘While defendant has’ 19 plants, its net assets are less ~ than $20, 000,000.00) CEx. 130). ‘and it competes: with many larger national companies. In its. Reply Brief, Volaseo pointed out that Exhibit 130 shows total assets of the: e defendant to-he $28,000,000.00 and stated, “while the size of its national competitors does not. appearin this record Ay Faced with a to total lack of evidence in the record, defendant was in-no wjse daunted, and in its Reply Briet stiited on page 3, ‘{In anv event Fry's competitors include such bigger corporations as Johns-Manville, Celotex, Allied Chemical, Ruberoid, Certain- Teed, Flint-Kote, Philip Carey, U. S. Gypsum, and, Bird & Son. Judicial notice 7 x of their.sizes ¥s anorepiiate. ‘Yhese. are shown in reading —— own an Te financial yu Aicaiienson-shick ten” tadlaens community ° ‘relies, While plaintiff claims Frv has $28,940,759.00 total “assets) Moodv’s Industrials (1957) shows that Bird. the suiallest of the above rained competitors of Frv, has nenete amounting to ov ér $40,000,000.00, and Allied Che TT ry — (-- — - eal, the largest, has assets of over $750,000, 000,00, Six of —. the nine have more than twice Fry’ s total assets."" : - This case’ was ‘presented to the jury on the evidence produced at the trial. There was no evidence -as -to thy size of Fry's competitors. Without such ev idence, it ix ho more appropriate for the Courts to take ‘judicial know ledge" of finaneial statements that may be contained in some financial publication than it would be. for this Court ‘to take judicial knowledge of the size of a corner _ grocery based upon a Dun & Bradstreet report presented for the first time in an appellate brief. The Appellate Court found as a fact that Fry was not the largest com- - pany - manufacturing asphalt felt although there was no evidence before the Trial Court and the jury upon which either of them could have made such” a finding. -Ev idence outside the record to ‘substantiate defendant's © position | - should ne more he supplied by the Appellate Court, than, “evidence supporting plaintiff's position. Plaintiff is en: \. | titled to have this case considered on the evidence and ‘only on the. evidence which was submitted to the jury. Any other rule deprives plaintiff of a trial by jury. —~"" rv has ‘nineteen roofing “plants: located . stategically oe 4 throughout the country, being as many plants as its next two largest competitors have combined. Ruberoid Com- pany has eleven plants and Certain-Teed Products Corpo- a ration has eight-plants (R. 556-58). - Defendant séld twelve’ te, and one-half per cent of the total national sales of asphalt saturated felt in the vear’ 1958 (R. 157). As of October 31, 1958, defendant had total assets of $28,024, 752.00 (Ex. " 430). We submit that defendant’ s size both physically atid: a) financially is sufficient to. carry with it an. opportunity ‘for abuse that is not to’ be ignored when the opportunity “ proven to have been utilized in the past. United States v. i Swift & Company, 286 U, S. 106, 116 (1932). ase id Mr. Lloyd Pty Fry, ‘ r, defendant’ s president, in his. Jetter: of Apmly2t, 1956, i Peaslee-Gaulbert stated . that . Sy ° Cy on / ® ‘ : f . ° . : SR a ng ne eR ee ge ge > P = a. . , : . . se these national coneerns ( °° e ae te the minal roofing - manufacturers in the Southwest were ws thorn’ in the side, that defendant was wate hing them. : closely, that in due time: they would: be dealt: with’ aid ‘that if they didn't get in Jine within thirty days, “we w Wh take corrective action.” - As of une 15, 1956, the corree- tive action’ was’ apparently, “begun. when the price was _ raised over the country except in. the Southwest.° Mr. Llovd A. Fry, Sr., the f Chief Executive Officer, Chairman of the Board; ‘and owners of: ‘ninety (90)" per cent of the — tottl capital stock of defendant CR. 189, 1490, 1916), while’ negotiating for the purchase of Marvel Roofing Products, Ine; an asphalt roofing business of Albuquerque, iNew Mexico, in late 1957 or early 1958” (R. 1026-27), indicated that. he engaged. in the ‘practice of “conditioning the market” Fry was responsible for the low prices in the =" el area. Was confirmed by the Ww itness,.Cox (R. 1030, 1040). : Mr. Fry, Jr, de eudant’ s president, visited the pa “s of The Piedmont Company near Atlanta, and Sunset at Lf Lubbock, Texas, where prices “had been lowést, to soy about buying: them. Failing, to buy these plants, defe a ant is building plants of its own jut Lubbock and AManta (R. 2059-60). oo “ ae ee A Of the ‘fourteen pricé changes Syletween Feyfflary 1956 and March 1958, defendant alone initrated all but ‘three (R. 2045- 46), Five of these price changes represented ‘price increases in the Knoxville area and defendant alone - initiated all five of, these changes. | The price of asphalt saturated felt -has remained high Ahroughont the entire period of time in the € ‘hicago area where defendant oom petes’’ with all of* the nations in-the Knoxv ile area; indice manufacturers w hich sell ing that ite is able to control , 1501 2: i€, 125, Re HB, 2207 ), by- reducing the price of asphalt roofing products in a. given ‘area (R. 1028- 29). _He admitted, or bragged | “that he was responsible for lowering the price of such. " produets in n Marvel’ s territory: (R. 1027). The ‘fact, ‘that: \ \ Ja" . ; -— 34 . : = a - 2 : rr ’ od - . S ® Defendant’ has been successful, in excluding plaintiff, ~= s “ from the manufacture and sale of asphalt. shingles in fe (oat Knoxville area A(R. O12-1 3), and has greatly .reduced_ at o? © “ngpolize and monopoly by. a ° MZ 3 .~ « . . . a g i my, - > . “trade and commerce, can be. restraimed. Such acts may Again; in defining the term monopolize, we submit. the take the form of conspiraey, monopolizing and, price, discrimination. Those are forms in Which commerce _ _ has been restrained. A combination fo supipress, com petition or >to monopolize: or attempt To monopoliz® the asphalt roofing business is an illegal combination. Under Section 2 of the Sherman Act, there may be a: monopoly or an attenrpt to monopolize without a con. spiracy to do either’? (R. 2199,” tS — Court clearly differentiated hows conspiracy to” mio: statement of the C ourt on this subject follows: on “The term ‘monopolize as used in ‘Section 2.of the. ~ Sherman -Act_means the joint acquisition or mainte -nance by the members of a conspiracy of: the power to control and doriinate ‘interstate trade, and commerce ® _ Hr a commodity to such an extent that they are ably LAS i group to’ exelude/ actual and potential competitors ; from the field, accompanied with. the gener Al purpose ngle individual. The full to exercise ‘such power. .But it is not neePssary that : there hea conspiracy or combination on the ‘part, of one party w ith another or others ‘in order to violate: Scetion 2 of the Sherman Act. Any individual or cor: poration alone ‘may, offend agaifist the provisions of Section’2 of the Sherman Act: by monopolizing or attempting. to monopolize interstate, trade ar c¢om- .- merece"? (R..2208). a ey oe ee > * Iother words, here the Court has said- that in order for an individual to monopolize: he must ‘have ‘the “power, to contre) and dominate mterstate trade and commerce in a commodity to such an extent that he is able to exclude — actnal' and potential Competitors from the field, accom. - panied with the general purpose to exereise such’ power," Py . v Is3 : o— FS : Again we + submit that, as a matter of law, the Court’. — charge taken as a whole -(the’ statements herein quoted, taken together. with the ‘other statenients contained in the charge: and dealing with the: subject of monopoly, which, : in order to conserye space, we do not copy in this petition) \cis an excellent and adequate charge. In determining whether there is érror in’ the charge the Court ‘will look | _ tothe entire charge and not alone to isolated portions of it. See hese yi & Potomac Railroad Co. v. Mackey, 157. . USS. 72, 86-87 (1894) 3 Am. .Jur., Appeal & Error, a nionopoly.. Hf, ‘indeed, counsel did have that thenght in mind, then we submit the language. used in his objection appears more to have heen used to disguise his thonght than to conve Vit. It was the duty of counsel, if it was his position that there was insuffic ‘ient evidence to support: this issue, to say. SO, -and a failure to be explicit in this regard bars. the defend sant from thereafter ‘ attacking the instructions of the _ Court. It would ‘appear also frem an examination of the «por. ‘tions Of.the Court’s charge on the;monopoly issue that the Courtein drafting its —? had in mind the alterna tive nature of Section’ 2 ‘of the. Sherman Anti-Trust Act, which prov ides: thad ‘Every person, who shall monopolize or attempt to monopolize*’ shall be guilty, and that’ every person who shall ‘‘combine or conspire with any other per , shall be guilty. - * 4, In other words, the offense may be by reason of? indi- vidual monopoly or attempt to eqepponte, or that by rea- son of a combination or conspiracy. Evidently,.from the | language of the objection to this portion of the charge, this same thought lay \in the mind of’ counsel for the defenflant, . and, if this be true, then it certainly cannot he stated that the ground upon which ‘the. instructions were held erro neous by. Appellate Court were called to the attention of the’Trial Indge. ; : . : Mt : ee enum are Olijections to a charge oe mee ‘must: be. sufficiently _ spec 3 to bring into focus the precise nature of the alleged error.” ‘ Paimer v. Hoffman, 318 US. 109, 119 (1948). We beHeve the rule is well stated inthe ease of Holliday v. Great A. & P. Tea Co., 256 F. 2d 27, 302 (Sth ( ir. 1dsy, and is pertinént to this subject. The objections interposed, in the instant, case did | not distinetly. state any. grounds for the objections. The trial court. was giver’ .no opportunity to correct “or cure any possible defect or error in the «instructions as given. The objections do not even tell us the mat- ~~ ter to which they object in the: questioned instrue- tions and certainly’ do not state the grounds of their so-called objections. This is an appellate. court and before we can properly say that the trial-court was in error that court must have been given an opportunity 10 pass upon the question, Alleged errors cannot ‘for the first time be urged in this court.’ . . In the case of Richfield Oil Corp. v. Karseal ‘Corp., 7 KL 2d 709, 422 (9th Cir. 19: a), the Court said: 6 purpose of the Rule is to give the court. a chance to: correct an erroneous instruction. an the: law.. Though viewed realistically, we might hazard a guess: that it would have been a difficult task, even by stating distinetly the grounds of the objection, to have caused the court to changé its previously announced: position. Nevertheless, to preserve the question on appeal, not only’ should the objection have been made, ° but the’ grounds thereof should’ have been distinctly stated." In any event this whole discussion of. defendant ‘‘alone monopolizing” is not of much importance in view of the overwhelming evidence on conspiracy, combination. and: ¢ @ wi . ; ® price discrimination. If any errer was committed in sub- mitting this issue, it should - be disregarded because it would: net have affected the substantial rights of the parties (Rule 61, Federal Rules - Civil Procedure). ‘The rule of procedure, as ‘cians in Tennessee, to a effect that a gencral verdict is good in a multiple -issue case where one or more issues~ are properly sub- mitted to the jury,even though another issue is erroneously - submitted, controlAin a’ Federal case in Tennessee, par- ticularly if defendant did not: request special verdicts or submission of interrogatories as “provided by Rule 49. The Court f Appeals. announced a reyver sal in the fol lowing language: « “The judgn ent of the District Court must be re- versed for the’ reasons, that there is no evidence .of monopoly in. the relevant area by the «defendant, in- dividually, and for the failure of the: trial judge to adequately instruct the jury on the issne invalved” ( . GA, Ia). \ 5 | "Previously, the court had reviewed the record on fhe charge that defendant had conspired to. violate: the aniti- trust: laws and had concluded: i “We . conclade that the trial judge's’ instructions ‘to. the jury, on the law of conspiracy, were correct and that the evidence as herein reviewed was sufficient to take the case to. the jury @ that issue’* (AL 9a ). The time- honored practice in» Tennessee in hoth: the State and Federal. Courts is to submitythe issues of fact in a law ease to the jury for a general verdict. While there is no specific rule to the contrary, special verdicts and interrogator ies are employed, almost universally, only * jin the separate Chancery ‘Courts of Tennessee," ~ » —- |{ . » Section 20-1317, of ‘Tennessee Code Annotated provides: “* Verdict: Applied to Good Count. ; “Tf any'counts in a declaration are good, a verdict. for entire damages shall we applied to sne ‘h good counts (Deriv. Act 1801, Ch. 6) See, 68). 7 ts , ; At the tinte of the triakin the instant ease, December, 1960, the attitude of the Sixth Cireuit Court of Appeals toward: the general verdict in Federal. trials in Tennessee Was ds announced in the’ cases gf Louisville and Nashville - Railroad Company v. Rochellé, 252 F. 2d 730 (6th Cir: 1958),.and: Atlantic Coastline Railroad v. Smith, 264 F. Yd 428 (6th°Cir. 1959). In each case the Court held. that in Federal Court tigation in Tennessee, the s0- called Ten: hessee ** two issue’’ statute controlled and a eeneral vey: “dict would be upheld insthe event substantial evidence snpported one or.more counts of. the declaration. No mens fio) Was made. in these cases of the rule heing rte alge only in diversity eases, ‘ ° Subsequent to the trial of the instant case, the ‘Sixth Cireuit. had for consideration an appeal in the case of Tracy v. The Finn Equipment Company, 290 F. 2d 498 (Gth Cir. 1961), likewise appealed from the United States -_ District Court for. the Eastern District of Tennessee, Northern Division. That cause involved a two count dec laration seeking damages for personal injuries onthe basis "of breach’ of implied warranty and negligence, respectively. Subsequent to the trial of thecause and a verdict in favor of the plaintiff, the Trial Court, being conviriced that he ‘ chad been in error’ in’ submitting the issue of breach ‘of . warranty to the jury,,entered an Order sustaining the defendant's “Motion for New -Trial which he thereafter’ aniended, by allowing an interlocutory appeal to the plain- tiff. The cause was appealed cand on May 9, 1961, the Sixth Circuit issued its opinion reversing the lower court. and directing the entry of a judgment for the plaintiff upon the verdict. This reversal was based upon the Court’ s \aRproval of the application ‘of the Tennessee statlite (supra) validit- ing general verdicts upon the good counts despite the erroneous submission of an ‘issue, the Court say mig: “While the Act is in this. respect procedural, the United States Supreme Court has postulated-a poliey that in diversity’ cases the .t federal courts niust follow even the procedural. rules of the state in| which ‘it sits where an application of a different: rule would — | cause aysubstantial likelihood. of a different result had the matter been tried in the state court. In Guaranty , Trust Co. v. York, 326 U.S. 99, the Court indicated the broad effectto be given to Erie Railroad Company Me ‘Tompkins, . 304 U.S. 64. That case involved a ‘snit brought in the district court, with jurisdiction based entirely upon diversity of citizenship, to ev- force in equity a state created right. There it) was said: ay | - ‘But since a federal. court adjudic ating a State ere ated right solely because of the. diversity of citizen —~ ship of the parties is for that | purpose, in effect, t, only anothér court of the state, it cannot afford recovery if the right to recover is made tdnavailable* by: the State nor ean it ‘substantially ‘affect the enforceine ~ ae of the right.as given by the State: Tn Byrd v. v. Blue Ridge ‘Electric Cooperative, Bob - -UoS. 525, the Court agreed that the, Erie case sup. ported the broad concept of Guaranty Trust Company, supfa, that the federal court should conform as near as may be to state rules, ‘even’ of form | and mode, where the state rules may bear substantially on the - question as to w hether litigation would come out one | e ae ‘74 wav in the federal court and another way in the state court.”” | The deeision in the Finn case was the -first pronounce- ment by..the Sixth Circuit that the application of the aforesaid Tennessee statute might he limited to diversity lis = euage:. ‘ * **The plaintiff Volasco claims that the ‘two issue’ rule. ix applicable. in Tennessee and that, if other issues. were properly Submitted to the jury there can be no reversal because of an error in the submission ; -of one issue: The plaintiff cites two cases from the ‘Sixth Cireuit, in support of this theory. ——— d ‘Nashville Railroad Company v. Rochelle, 252 F. 730, C. A. 6, and Atlantic Coastline Railroad ae. v. Smith, 264 F. 2d 4 2d 428, C. A-6-—Phexe cases 1d eS ; Rule 49 of. the F veal Rules of Civil | Procedure. wail | conflict. with the spirit of the rules as embodied in Rule 1 1 to the effect’ that-‘‘They shall be construed -to secure the just, apecdy’ and inexpensive determination of every ac- tion.’*: This. is -true because ‘it’ lay within the power of the defendant at the trial of this cause’ and. at- the time of the subinission of the case to the jury upon a general Verdict, to resolve. any doubts as to the basis upon w hich 3. “the jury ‘premised its verdict by requesting the Court to require the jury-to render special verdicts ora general, verdict accompanied Dy aliswers to interrogatories as pro- vided by Rule 49- complain of the Submission for a general verdict where he stands by knowing the rule of the. forum and fails to exercise hig Aight to ask for special verdicts. To allow thds, in effect, arms the defer idant with the pow er té trap: his ady ensary, Can the defendant in good conscience - Tt such a procedure as -this eee approval, it can be’ expected that under such circumstances defend- ants would be encouraged to ignore the provisions of Rule | 49 of -the Federal: Rules of, Civil Procedure. Especially would. such a result obtain in multiple count cases in which the defendant believes that the .trial judge is er-- /Troneously submitting to the jury.at least one of, the counts. In such eases, although the defendant might strongly urge that such count not be submitted to the jury, nevertheless, ‘if the court did submit such count to the_jury, the defend- ant. would thereafter be encouraged to. sit by quietly —not avail: himself of Rule 49—let the jury: render. a general’ ‘verdict—with the expectation - that if such general verdict ix adverse to the defendant, it can be corrupted by relat. ing it to a count which is in somewise defective or: ‘ins | sufficient. ° _ Se If such a result should ensue, then all the- proceedings would be voided, the a efforts of e court, the. 4 7 . . pore - . jury, and fhe litigants would “he rendered for naught, ‘anal a retrial made necessary, all of which seems to do utter violence to the basic theary atid piirpose of federal pro- | cedure: which. seeks to Secure a’ just, speedy, arid. inex: pensive determination in every case. AG ‘ a This situation ‘was considered by the Secoutt ‘te ireuit Ni Foster ¥ -Moore-McCormack Lines, Inc., 131 KF: 2d wm) (1942), w-case ApISing under the Longshoreman’ s Act. In ‘that Opinion, ‘JIndge "Frank, While ériticizing the use’ of the genvral verdict as a’ matter of practice, held that the ; general verdict Was good, and’ that, it was the duty of the defendant to use and rely: upon ‘the provisions, of Rule 49, saying: “There was a confliet of. testimony atid it was for e “the jury to-determine the issue of fact Whether the jury. carefully - weighed the testimony, ‘in cthe light: > of the judge’s instructions, of course-we do not know, ~ and indeed are forbidden te. inquire.» There was at _ general verdict and such verdict ‘throws its mantle of, impenetrable. darkness on the operations of the : jury.’ Appellant might have. dissipated that dark “ness by oer, Rule 49 Rules of Federal Pro cedure, 28 UL SoC. Ay foll6wing Section 723) (e¢). for a. special verctig for a_ general verdict accompanied: hy the jury’ s.answers to interrogatories 2s ar But that wise rule, which. would “ensure keeping the jury "in its proper place, ix, for some dark reason, seldom used:** ‘To the same effect, see Filipek. v. Moore-McCormack Lines, 258 F. 2d).734 (2d Cir, 1958), This ‘same line of reasoning has been followed. in the Eighth Cireuit. See Bank of America v. Hyden, 231 F.2d 505 (4956), where the Court said: Rea uA “Conclading, as we must, under the law and: evi denee jas nlready set forth, . that appellee. had a canse -—— St) — of action under ‘the common counts ‘for money “pad anc. received which was. properly submitted to the jury under sufficient instructions as to the.law to- which no exception was taken, the general verdict cof the jury may be sustained: as based solely on a finding on ‘said counts. or causes’ of action and ap pelle’ s theory ‘of damages applicable thereto.” > 60s. : . So oe ae ome to ar fe J eee vit should be stated that had there ban a verdict returned as-to each cause of action separately: or had ‘interrogatories been submitted ‘and returned along with the general verdict the result might-have -been such as to permit further consideration of appellants’ assignments. of error. However, the record doés. not. disclose appellants” request: to either’. p. 604. ‘ be rt. p ETITIONER, VOLUNTEER ASPHALT \MPANY, AS- THE SU PPLIEBe OF ALL ASPHALT. USED BY | _ VOLASCO, IS NOT TOO REMOTE AS A MATTER OF LAW: TO RECOVER FOR-ITS OWN. LOSSES DUE TO: VIOLATIONS “OF; THE ANTITRUST: ; LAWS BY DEFENDANT AIMED AT VOLASCO, As stated in the Opinion of the Court of Appeals, plain. tiff, Volunteer, relied: upon, two theories as a basis for recovery. In the first place, it was stated that the cor: porate fiction, should be disregarded -as_ the - business 6f V olunteer and of Yolasco was in truth and in fact a ra unified business enterprise, the separate corporage en- tities having been formed merely for cfinancial reasons. In the second place, it was: urged that -as a matter of. Federal law, the petitioner Volunteer, as supplier of all ‘asphalt used by Volasco, was directly injured by defend- . aunt's s violation of the antitrust laws, aud, therefore, entitled s C Ss] to recover, The Court of Appeals discarded both these theories, und, while we earnestly insist that it) Was in! error on each eonnt, we would here present argument only e . . (| a 4 . ° . . . . . . dn the second, that is, that Vofunteer was direétly-injured/ . , | and, therefore, enfitled.ta recover, - n/a The statute says, ‘Any person who shall be injured : ‘ . P. ” - , ‘ ' : -\ , “may. sue therefor 2° (15 U.S. GS 19). It is true that the older cases. under the antitrust ‘laws generally held thait ‘a supplier of products to one who. is the direct target of antitrust violations is too far removed | or too remote to recpver’ from those guilty of the viola i tions. « It is submitted that the reasoning of thege cises” is unsound as there is’ no such. limitation in the statute and no such limitation should be read into it. ~The later decisions of the -Appellate Courts, particularly the: Sev- enth and Ninth Circuits, have clearly departed from. this rule, and it js submitted that suel holdings are’ sound. This Court should grant certiorari in this case in order “to settle finally fhis-important question of Federal law. — The Stventh Cirenit ini the’ case of Congress Building Corp. v. Loew’s, Incorporated, 246 -F: 2d S&T (7th Cir. 1957), overruled a long line of theatre cases beginning — with the case of Harrison v. Paramount Pictures, Ing., 11. F. Supp. 312 (D.C. E. D. Pa.) aff'd 201. FL 2d 405 (3rd Cir. 1954), cert. den, 348 UL S. 828, and held that the lessor of-a theatre. could recover fron: the parties te a con” spiracy, in violation of the antitrust laws. * In that case a‘hon-operating lessor of a theatre build ‘ing filed suit against its lessee and eortain motion picture distributors charging a conspiracy between them in viola tion of the antitrust laws. The lease between the plaintit? and its lessee, the operator of the theatre, was ‘a percent age lease based/ upon the gross receipts: of the ‘theatre. The charge was that by virtue of the conspiracy the gtoss » as . cy ; é a] é ‘« receipts of the theatre were decreased, and, therefare, the plaintiff’ Plaintiff-Appellant, . me, Llovd A. Fry Roofing © ompany, Defe ndant- Appe ‘lee Liecided September 12.) 1962, Before: Ceeil and ( Sullivan, Cirenit Judges, and Bova, District Judge. : | Cecil, Cireuit Judge. These appeals are from the United ‘States District Court’ for the Eastern District of Tennes- see, Northern Division. Volaseo- Produets Company and eT Volunteer Asphalt’ Company, as plaintiffs, “brought an ac tion against Llovd A. Fry Roofing Conipany, defendant, charging. it| with violation of. the anti-trust laws, to their damage. The arties «will: be referred to as laintiffs and | ‘ ‘ refertet 0 ple ntiffs ane defendant, ® As they were in the District ( ‘ourt, or as -Volun- teer, Volaseo and Fry. Ww e 2 - The action arises suse the Sherman Act and the Clayton Act, Title 15 8. ¢., seetions _ 1-27. The partieular see. tions of the toi Aet- involved are seefions 1. wad 2 (Title 15, sections 1 and 2) the-pwertinent parts of a, are as follows: See. 1 ‘Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the —. states, or with foreign nations, is, deelared to be illegal.** See. 2 ‘Every person who shall monopolize, or attempt to monopolize, or combine or ¢onspire with any other person or persons, to monopolize any. part of the trade or commerce among the several states, or with foreign nations, shall be deemed ae ruilty of a misdemeanor, .. Sections. 2 (a) and 2 (b) of the Clayton Act, as dmended by the Robinson-Patman Act (Sections 13. (a) and 19 (b), Title 15, U.S. Cs) are invoked: by plaintiffs and so far as ‘pertinent ‘read as follows: Sec. 2*(a) That *'It shall be “anlawful for any person engaged in’ commeree,. in the ~-eourse: of such commerce, either directly or indireetiy. to —aliseriminate in price between-different parghasers of com- modities of like grade and quality, . .7. where the effect of such discrimination may be substantially to lessen compe= tition or tend.to er eate a monopoly in any line of commerce, or to injure, destroy, or prevent , competition with, any “person who either grants or knowingly receives the benefit of -such diserimination, .or with customers of either of them: Provided, That nothing herein contained shrall pre- vent differentials which make only due allowance for dif: ferences in the cost-éf manufacture, sale, or delivery’ rs 5 . ad —— Se : al “sulting. from the differing, methods or quantities ine which such commodities are to stich purchasers sold or delivered : i And provided further, That nothing herein contained shall prevent pricé changes from time to time... . Im re sponse -to chahging conditions atfecting rn market for on re the marketability of the rools ‘concerned. Sar ae . > See? Cb): “Upon proof eins made, atvany hearing on a complaint under this section, that there has been dis oe > erimination ni PICeOr-services. or fac! cilities furtiished, the ‘burden of ‘rebutting the prima-facie ‘ease thus “Pilate. showing justifieation shall be npon the person charged with a violation of this seetion, and unless justifieation shalk he aftirmativeiy shown, the C ommission is anthorized to issue an order terminating the diserimination: Prov ided, how ever, That nothing herein contained shall prevent a seller rebutting the prima-facie case thus made by showing that his lower price or the furnishiniz ot services or factities to any purchaser or purchasers was made in good faith te meet.an equally low price of a competitor, or the services cor facilities furnished by_a competitor.” Dip iowa 4 of the Clayton’ Aet (Section 15, Title », UL S.C.) any person who is injured in bis business or eisuies: ‘by reason’.of anything forbidden: i the above quoted anti-trust laws, may sue for damages in a, District Court of the United States and recover threefold the dam ame Titne it tnaintained higher prices in territery. ontside -of pl: nintiffs’ limited field of operations. — They also charged that the defendant: combined and conspired with other. large manufacturers of asphalt products to engage in an identical pricing program, fer the purpose of creating “a inonapoly and destreving competition. The issues as presented by the contphtint -are substan tially and briefly as follows: 1. Did the defendant Fry con spire with ne or more other manufacturers of roofing products toi fix prices -in violation of the anti-ttyst laws | within an ——, 00-mile radius of Knoxville, Tennessee! 2. Did the defendant alone-or in combination with other ER manufacturers, monopolize or attempt to monopolize the sale of asphalt roofing products in’ the ‘abeve area by fixing prices of , § 8R24), _ | TESTIMONY OF GEORGE C. KRUG ON - + DIRECT EXAMINATION. By Mr. Hp ): mi ‘ ‘ Q. Then the other product which T have and ask you to e identifv-—— | Be “ea : A. This is a 210¢pound strip shingle. Tt is put up in bundles. It. takes three bundles to make a roofing square, a hundred square feet on a roof, : The Court: What is the difference between a shingle and the asphalt itself?