# Brief in Opposition — Dovberg v. Dow Chemical Co. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385602_1290%3A6 ## Record - **Collection:** Supreme Court brief - **Document type:** Brief in Opposition - **Published:** January 1, 1966 - **Citation:** 384 U.S. 907 ## Text “2 ‘ IN THE Supreme Court of the United States. October Term, 1965 axe \} No. 1085 IKE DOVBERG anp MAURICE DOVBERG, Iwprvipvattx axp 1/a PASTE COMPANY OF AMERICA, . Petitioners, c™ ‘ Vv, | / PENNSYLVANIA PASTE COMPANY; ann SAMUEL SCHULTZ, ADA SCHULTZ, MARVIN L. SPIRO anp ISADORE KAPLAN, Inprvipvatiy anp Trapine as SAMUEL SCHULTZ & CO., a Parrnensurr, Respondents. BRIEF FOR RESPONDENT SAMUEL SCHULTZ & CO. IN OPPOSITION TO PETITION FOR mie WRIT OF CERTIORARI. OPINIONS BELOW. The trial judge’s Order and Direction for Judgment, filed November 7, 1962, which sets forth in detail his rea- sons for granting judgment under Fed. R. Civ. P. 50(b), was*not reported, and was not printed or wtherwise repro- duced by the petitioners. For the convenience of the Court *: it is printed at the end of this Brief in Opposition as an Appendix. ° The opinion of mm Court of icici is reported at 353 F. 2d 963. "1. The caption of the case my, we F on the Petitidn for a Writ of Certiorari is inaccurate. Dow pepe 5, | not 2 nartv in the Court of Appeals and is not a party rt. The only remaining parties respondent are those indicated ia the caption herein. However, since P Paste Company was put out of business by the destruction credit when judgment was en- tered against it, Schutz & Co, actually the enly respondent in the case. ¢ WABI EWR nga ee BK eye e 2 Brief for Respondent in Opposition JURISDICTION. The judgment of the Court of Appeals was entered on December 3, 1965. Jurisdiction of this Court is based on 62 Stat. 928, c. 646, 28 U.S. C. § 1254(1). QUESTIONS PRESENTED. 1. Where the evidence discloses only that a retailer ceased to deal with the petitioners, who were manufac- turers, and dealt instead, on better terms, with another manufacturer who. was in competition with them, did peti- tioners’ evidence of their threats to hold the retailer respon- sible for harm to them which might arise from his ‘‘joining an effort’’ to hurt their business support an inference that, solely by virtue of*such threats, the retailer’s cessation of dealings with petitioners was transformed into a conspiracy in violation of Section 1 of the Sherman Act? 2. May the value of a business be shown by the answer to a hypothetical question relating to a theoretical busi- ness which assumes a volume of production beyond the capacity of the particular business to create and a market for such a volume which does not exist? STATUTES INVOLVED. Section 1 of the Sherman Act, c. 647, 26 Stat. 209, 15 U. 8. C. $1, in relevant part provides: **Eivery contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. . . .”’ Section 4 of the Clayton pie c. 323 3/ 38 Stat. 731, 15 U.S. C. § 15, provides: ‘* Any person who shall be inj ed in his business or property by reason of anything forbidden in the Brief C Respondent in Opposition *- g antitrust laws\may sue therefor in any district court of the United States in the district in which the de- fendant resides or is found or has an agent, without respect to the amount in controversy, and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney’s fee.’’ Section 4B of the Clayton Act, ec. 283, 69 Stat. 283, 15 U. S. C. § 15b, provides: ‘‘Any action to enforce any cause of action under sections 15 or 15a of this title shall be forever barred unless commenced within four years after the cause of action accrued. No cause of action barred under existing law on the effective date ois section and sections 15a and 16 of this title shall be revive by said sections.’’ : ,4 Brief for Respondent in Opposition STATEMENT OF THE CASE. On September 28, 1958, petitioners brought suit under the Sherman Act, and claimed that Dow Chemical Company and eighteen other defendants, individuals, firms and corpo- rations, had conspired together to put petitioners out of business. As discovery progressed petitioners gradually dropped their claims against all defendants except Dow Chemical Company; Pennsylvania Paste Company; Samuel Schultz, Ada Schultz, Marvin Spiro and Isadore Kaplan, individually and trading as Samuel Schultz & Co.; Reba Spivak, individually and trading as Atlas Wallpaper & Paint Co.; and Samuel Milkis, individually and trading as Empire Wallpaper & Paint Co. The trial judge dismissed the claim against Empire, and the jury exonerated the Dow Chemical Company and Atlas. Only Sanfflel Schultz & Co. (Schultz) and Pennsylvania Paste Company (Papco) remained, and the verdict was against thenY alone. After a painstaking review of the record the trial judge determined that thee wa no probative evidence linking Schultz conspiratorily with Papco and that, what- ever petitioners’ competitor Papco may have done, Schultz was not shown to have had any part in it. He accordingly entered judgment for the defendants n.o.v. for the reasons stated in his opinion? (3b), but in addition alternatively granted a new trial because of the deliberately false testi- mony and intentional confusion which characterized the petitioners’ case (4b).® 2. The opinion of the trial judge, which was called “Order and Direction for Judgment,” was not included in petitioners’ appendix nor was it even referred to in the section of the petition entitled “Opinions Below” (Petition, page 2). It has, however, been printed as an appendix to this brief. 3. Cf. pages 31-2 of petitioners’ brief where they say: “There was evidence (N. T. 303, 933-940, 2491, 2582, 4040, 4062) that the Schultz firm, like Papco and other retailers to whom Papco sold 1 wie blatantly represented the product . as being Nix-Size, or being the same thing as Nix-Size, when it was resold to the public, but that this practice was not character- Brief for Respondent in Opposition 5 Petitioners offered no evidence of any conversations or meetings between the respondents or of any agreement or understanding indicating a purpose to injure petitioners’ business.* Each of the respondents categorically denied any such conduct or any purpose to put petitioners out. of business, and respondent Schultz, as a retailer, had no possible reason to seek to ‘destroy an alternate ce of his own supply for the benefit of another, and competing, manufacturer. Actually the amount of business done by Schultz with petitioners was so s if could only be a matter of complete indifference to Achultz whether peti- tioners were in business or net. ~ zs Petitioners’ case is based wholly upon the theory that a violation of section 1 of the Sherman Act may be in- ferred from the fact that in 1951 Schiltz believed that istic of those who marketed other products which competed with Nix-Size.” - N. T. 303 relates to what Philadelphia Wallpaper Co. did in December, 1950; N: T. 933-40 relates to what the proprietor of the Germantown Wallpaper Company said about Papco nay ye 28, 1954 - and what the proprietor of the Brenner Wallpaper Co. said about Papco‘on June 11, 1952 and March 11, 1955; N. T. 2491 relates to the wording of the label used by Papco; N. T. 2582 relates to what _ Papco did. In none of them is there any reference to Schultz. N. T. 4040, if it refers to a man named Levy, relates to what some one told - Levy in November, 1956 (N. T. 4035), several months after -peti- tioners had ceased to make Nix-Size (Exs. P-234, P-238). If it refers to a man named Applebaum it relates to what Applebaum did on March 24, 1958 (N. T. 4046), more than a year after petitioners were out of business (N. T. 1155) and when there was no longer any demand for their _— (N. T. 1160). In none of the cita- tions was there any reference to any practice of those who marketed other products which competed with Nix-Size. a, 4. Thus during the course of Dovberg’s deposition, a portion of which was read into the record as a part of the evidence offered by Dow, but not transcribed, counsel for the petitioners said (Dep. T. such. All we can do is draw our conclusions.” imaa™ ee — am not = I—I feel there is ~~ 5 ANS 6 Brief for Respondent in Opposition petitioners’ competitor, Papco, had the capacity to put them out of business; that in 1952, after having been told by petitioners that Papco was trying to put them out of business, Schultz stopped buying Nix-Size, a pr@@uct manu- factured by petitioners and, even after being threatened by petitioners if he did so, bought instead a substitute made and sold more cheaply by Papco; and because of events which took place after petitioners stopped manufacturing Nix-Size and after they were out of business. Schultz, whose major business was the sale of wall- paper; incidentally sold a small amount of allied products such as paste and wall size eliminator, and was a customer, not a competitor, of petitioners. He bought some samples of wet paste from petitioners for $30.40 (N. T. 474-5) in 1950.5 Thereafter he bought none from either petitioners or Papco (N. T. 3095-6; P. T.* B-23) and continued to buy wet paste from Pennock (P. T. B-23) and dry paste from Hoyt (P. T. B-66), both of them being competitors both of petitioners and of Papco. In November, 1951/ Schultz told petitioners that Papco could put them out of the wet paste business (N. T. 475-6, 480-1). Petitioners had stopped manufacturing wet paste in the spring of 1951 (N. T. 1045, 1098),” but there was no evidence that Schultz knew why or that he had ever had any other connection with petitioners’ — or Papco’s activities in wet paste. A year later, in March, 1952 Schultz stopped buying Nix-Size, a wall size eliminator made by petitioners, be- cause petitioners were slow in deliveries, made split deli- veries, had raised their price above that of‘alike product made by Papco (P. T. B-35-41,-58,-63, D-115; N. T. 423-4, 9. This was supposed to have made Papco “gunning mad” (N. T. 475), not “ ‘gunning’ for” as state at page 31 of the petition. . 6. “P. T.” designates the portion of the record contained in the © “Partial Transcripts.” } 7. The petition suggests, page 44, “that the campaign was pressed because petitioners continued to manufacture some wet paste.” See also Petition, pages 46-7. However, petitioner Maurice Dovber testified that he “couldn’t continue.to take those losses” (N. T. 238) ( 6, “Fy Brief for Respondent in Opposition + — 7 574, 2844-5, 3009), and refused to package it under Schultz’s - trade name (P. T. B-43, -120) as Papco had agreed to do. . Petitioner Maurice Dovberg claims that he then told Schultz on March 13, 1952 that he would hold him responsible if he ‘‘did anything in joining an effort, combined, to hurt our business’’ (N. T. 550). On the same day he wrote -a com- plaining letter to Schultz in which, however, there was no reference to any alleged purpose to put petitioners out of business (Ex. P-106; N. T. 552-4) ; nor was there in a like letter dated June 29, 1953 (Ex. P-110; N. T. 575-8)..- There was~no suggestion of a conspiracy or of any agreement or understanding between either of the respond- ents that led Schultz to stop buying from petitioners and buy instead from.Papco, with which he was also in competi- tion in the sale of paste (P. T. B-66). He didn’t know (P. T. B-67) and had no possible way of knowing if Papco was selling at a profit or a loss, or if Papco was selling “‘solely to hurt petitioners’’ or “solely to destroy peti- tioners’ business;’’* and-there was no evidence that the change was made by Schu}tz for any other than the purely business reasons of better deliveries, lower price and brand label packaging (N. T. 423-4, 574,:2844-5, 3009, P. T. B-36- 41,-58,-63): and petitioners’ eccentric behavior (P. T. B-57, -. E30). The only other evidence from which the petitioners suggest that a conspiracy between Schultz and Papco might be inferred is some testimony of events which transpired in 1956, which was the last year that, according to peti- tioners’ Eixs. P-56 and P-429, Nix-Size was sold, and events transpiring in 1957 when Nix-Size was no longer being - made, and. in 1958 when it had ‘been off the market’ for at and discontinued sales of wet paste in 1951 (N. T. 1045) ; that there “might have been occasions . . . where possibly as an 4ccommodation I ° might have filled some small orders but we were actually out of the wet paste business . . . since the spring of 1951” (N. T. 1098). Thereafter they sold it only on request “as an accommodation for a while” (N. T. 2427-8). | r _ 8. Petition, pages 30 and 39, | , 8 Brief for Respondent in Opposition - least a year. Certain of Dovberg’s relatives made sample purchases sometime in June of 1956 (P. T. 4197, 4213, 4355, 4358), in-1957 (P. T. 4173), and in the fall of 1958 (P. T. 3454-6), of which petitioners complain. On March 24, 1958 fifteen stores were visited (P. T. 4046, 4053). Since _ 1958 was a year after petitioners were completely out of business, and 1957 and June of 1956 were both after petitioners had stopped trying to manufacture Nix-Size, nothing done then could have harmed petitioners or helped to put them out of business. They were already out of business when these events are supposed to have oecurred. - Petitioners’ bank credit was gone (N.“T. 1005-6), they were ‘‘on the brink of collapse’’ (N. T. 446) and hopelessly insolvent in 1955 (P-317), and could not even then-accept orders unless they received cash with the order (Plain- tiffs’ Pretrial Statement of Contentions, p. 12; Exs. P-170, P-175, P-176, P-181, P-184). This continued into 1956 (Exs. P-212, P-219, P-224, P-231, P-232, P-233, P-234, P-238), the last year Nix-Size was sold (Exs. P-56, P-429). Early. = - in 1957 petitioner stopped all pretense of being in business (N. T. 773, 998, 1155). : The volume of business alleged to have been lost by Schultz’s cond is insignia. The Nix-Size purchased by Schultz from petitioners averaged a little over $100 a month (Exs. P-100, D-278 Schultz). When Schultz bought Papco’s product it amounted to about $1200 in 1952 and thereafter averaged slightly over $50 fa month (D-278 . Schultz). It was these trifling purchases that Paes petitioners’ evidence of injury by the respondents that - claim may be interpreted as indicating &@ purpose to ne them out of business.® However, in the autumn of 1952 Schultz gWwas still advertising petitioners’ Nix-Size (Ex. _P-99, N. T. 562, 564) and while Schultz was supposed to be ~ , . 9. Petitioners professed to find a like ulterior motive in def ant Atlas’ termination ‘of purchases from them in 1953 even though i resultant dealings with its supposed co-conspirator, Papco, amounted to only $32.40 (Ex. D-244 Atlas). ' 2) 2 | Brief for Respondent in Opposition 9 conspiring to put petitioners out of business he was_paying ys ‘their bills immediately upon receipt and substantially be- fore they were due so as to give petitioners the cash they _ 80 badly needed (Ex. D-129 Schultz,‘N. T. 3137-41). This _ seemed even to petitioners to be ah effort on the part of Schultz to help them (N. T. 3142). ¢ : Petitioners’ contentions cannot be viewed in their true light without some understanding of the nature of peti- tioners’ operations. The petitioner, Ike Dovberg was a paperhanger with- out education or business experience. His son, Maurice, finished the eleventh grade but his business experience didn’t include manufacturing or having anything to do with running a business (N. T. 1214-39), and his ideas of ‘eredit were gained from lending the price ‘of admission-to ~ mavie patrons where he worked (N. T. 1231-2). In total ignorance of the problems attending running a manu- facturing business (N. T. 1593-5) Maurice got a cousin to finance them with $15,000 * (N. T. 68-7 1, 1121-2), bought a small building at 728 S. Marshall Street, Philadelphia, _ - and called it a factory, got some machinery and started to manufacture 1 paper paste and Nix-Size, a wall size eliminator. er spending $4,000 for a building (N. T. 78) and $5,000 for sugar (N. T. 2086), in addition to other initial expenditures, they never had enough cash to operate ° with ahd were in trouble from the very beginning (N. T. 1024, 2206), They were ‘‘in dire need of money”? as early as 1951 (N. T. 1804-8, 3454-2, 3454-17), had to borrow even then (N. T. 3454-4, 3454-5, 4171-2, 4201), sought to make all their purchases on credit (N. T. 734-7, 1546-9, 1557, 1586-92, 1627-31, 1747-9, 2246-51; Exs. P-164, P,281,. P-281a, 10. It was impossible to determine ow much money was ever put in the business because of the inaccurate records kept by peti- tioners. The ledger, Ex. P-243, did not accurately show the condition of the business. Many loans made to it were never recorded and items were given different values at different times throughout the ~ trial (Ex. P-24, N, T. 118-9, 1121-6, 1130-1, 1141, 1146-7, 1282-97, 1990-1, 2225-6, 3454-4, 3454-5, 4172-2, 4201). * ae 10 Brief fat Res ondent in Opposition P-289), tried to get credit from their principal supplier, The Dow Chemicak Co., in an amount twice their original capital and more than the aggregate of all loans obtained from The Broad Street Trust Co. in four years (N. = 1830-3; Ex: P-188), but gave bad checks to Dow (N. T 1024-7, 1808-13) and to their distributor, Hoyt (N. T. 870). Having no experience in determining costs they had no idea what it actually cost to produce the products they ° were selling. They didn’t even know tife nature of their competitors’ products (N. T. 603-4, 1437-9, 1520-31, 1537-8, 1919a, 1980, 2140-2, 2214-5, 2266-8, 4675-88) or whether their own costs were prohibitive in competition with other prod- ucts on the market. They begarf to lose business as early as 1950 (N. T. 268-9, 1397, 1435), sold at a loss, had ‘‘no © money”? (N. T.4201, 204) and were in financial difficulty in 1952 .(Ex. D-Dow 1; N. T.’4524, 456, 1172-5, 1991-2), © pledgéd themselves to lose money (N. T. 553, 1454-7) and © did so consistently (N. T. 1789-94, 1839-40, 1983), cutting their own prices to meet their competitors’ irrespective of . their economic ability to do so (N. T. 718-20, 728-30, 1018-9, 1456, 1983, 2121-2, 2202-15, 2277-80, 3558-63). -They gave their customers unlimited credit (N. T, 1587-92, 3148), Ps knew nothing of their own capital requirements (N. T 1593-5, 3548-63). They sold below cost as early as 1952 (Ex. D-Dow 1; N. T. 1352-9, 3558-63) and even said that this was done in an effort to increase their volume in the -hope that this would enable them to - credit (N. T. 1091, 4574, 4667). * There was no evidence that they ever made any money from any sales, they kept no production tecords (N. T. 3242) and did not know how to take a year-end inventory © (N. T. 3615). Petitioners’ hopeless financial status appears © clearly from a:series of exhibits (Exs. D-Dow 6 to 77; N. T. 1663-1808). Although they wanted to buy on credit their financial condition was so bad they would not give Dun & Bradstreet any data and refused the numerous requests - from their distributor, Hoyt, for financial information after giving him an inaccurate financial statement as of Decem- YS - Brief for Respondent in Opposition 11 f 1781-3, 2017-8; Exs. D-Dow 6 and 66). , : Until 1954 petitioners were able to obtain some modest \ bank credit from the Broad Street Trust Co. (Ex. P-188; _- N. T. 907-9, 1005) by giving a false statement of asséts, wi ~and a small amount from Central-Penn National Bank > (Ex. P-189; N. T. 910°3), Jakewise’ by giving a false income ‘ Statement (N. T. 3607-9)/ When this was withdrawn they borrowed all they could get from other members of the ‘family (N. T.°2225-6) and when this was gine they went out of business, blaming their difficulties on’ the refusal of . Dow and Hoyt to extend them eredit (Exs. P-158, P-175, D-Dow 78, 272, 273, 210; and 211; N. T. 879, 880, 957, 961, . .. 983-4, 1007-8, 2121-2, 2194-5, 2200), not on anything Schultz ' had done. Petitioners’ ‘business was beset with trouble right from the start’? (N. T. 2226) and its collapse was Inevitable because petitioners were without knowledge of _ even the most elementary and fundamental principles of business operation. There was no evidence that the peti- tioners ever did ‘or ever could have run a successful business. _ ee : eae 4 ber.31, 1951 (N. T. 887-8, 1598-1604, 166.9, 1676-80, 1773-4, a: +0 . 12 Brief for Respondent in Opposition ARGUMENT. The only question presented in this case is whether the District judge was justified in finding and correctly found © that the evidence in the case did not establish a proper basis for a finding\of conspiracy under the Sherman Act. The decision of this question turns on the particular facts involved. No general principle is in controversy; the dis- puted issue relates merely to the application of well settled rules to the circumstances of this particular case. No mat- ter of general importance is involved, nor is a review re- quired in order to secure uniformity of decision. The case is accordingly not one appropriate for review by this Court even if the decision below were wrong. Houston Oil Co. v. Goodrich, 245 U. S. 440 (1918); Rice v. Sioux City Ceme- .: tery, 349 U.S. 70, 74, 79, n. 2 seit Actually, however, it was correct. There Was No Evidence of a Conspiracy) Essentially, all that petitioners’ argument amounts to is that a competitor, Papco, was trying to put them out of business, that Schultz had known a year or two before that Papco had wanted to put petitioners out of the wet paste business and knew that petitioners were claiming that it was trying to put them out of business generally, and accordingly that Schultz was obliged to continue to deal with petitioners to the exclusion of Papco and could not buy from Papco without becoming a conspirator with it. ‘Having threatened to hold Schultz responsible if he pre- . sumed to stop buying petitioners’: product and bought Papco’s product instead, petitioners now claim that the jury should be permitted to find that Schultz’s refusal to boycott Papco at petitioners’ tequest constituted evidence of a conspiracy under the Sherman Act to harm petitioners. ‘This in effect is a claim that a customer of a manufacturer who is engaged in a price war with a competitor may buy from the competitor only at the peril of being held a conspirator. & Brief for Respondent in Opposition ° 13 His careful re-readirig of the record (1b, 3b) made clear to Judge Leahy that the bulk of the great mass of evidence related to parties who were no longer in the case and that an analysis of the deliberately false and confusing testi- mony offered by the petitioners (4b)° showed that there was . no probative evidence supporting petitioners’ claim,” merely the fanciful suspicions of the proprietors of an un- successful business, who were seeking an excuse for their failure other than their own inexperience and poor business judgment. : Nowhere is there any suggestion of when the supposed conspiracy began. All that happened in 1950 was Schultz failing to sell Nix-Size at the fair trade price and in 1951 rebottling Nix-Size and selling it under his own brand name and telling petitioners that Papco could put them out of the wet paste business. All that happened in 1952 was peti- tioners’ threatening Schultz that if he stopped buying from them and bought from Papco iristead they would hold him responsible, and Schultz ignoring the threat and buying a cheaper competitive product from Papco because peti- tioners made slow and split deliveries, had raised their prices, refused to package.under Schultz’s brand name and behaved in an odd manner. Papco’s prices were lower, they used Schultz’s brand name and made unit deliveries. However, all that may have occurred in 1950, 1951 and 1952 was more than four years before the suit was brought in 1958. What happened in 1956, 1957 and 1958, while. within’ the statutory period, was all after petitioners had ceased to make Nix-Size. They were for all practical purposes out of business in 1956 (N. T. 1838-9), and in 1957 and 1958 actually so, and thus the events complained of during those years could not possibly have harmed them. 11. The petition, page 36, s ial j i reasons for his final te a e~ nally Poe pico eT What petitioner states to be “The second reason” (Petition, page 37) is actually the second and third (3b), and although the quotation is ascribed to “App. 17a” nothing like it 4: _on that page. Even the dissenting opinion below misstated (16a-174) the basis for the judgment n.o.v. (3b-4b). : % $ 14 Brief for Respondent in Opposition In their argument petitioners emphasize the activities of Papco to which they objected,” ignoring the fact that it was a competitor of theirs, selling both paste and a wall size eliminator. - However, the efforts to connect Schultz im- properly with any of Papco’s activities likewise ignores petitioners’ inability either to help or to harm Schultz and thus the absence of any possible gain to Schultz from peti- tioners’ disappearance," petitioners’ unsatisfactory de- liveries and price increases and Papco’s willingness to sell. at a lower price and under Schultz’s brand name. It also ignores, as does the dissenting opinion below, the time when the early events complained of occurred, and the obvious - impossibility of events occurring in 1956, 1957 and 1958 hav-~ ° ing any adverse effect whatever on petitioners. Petitioners also complain (Petition, pages 54, 55), as does the dissenting opinion (35a), that Judge Leahy changed his mind after the verdict. This he was certainly entitled to do and it became obvious to him that he should when his prolonged study of the record made it possible to relate significant events to one another in their prdper chronological sequence. This showed -that as of the time the various events complained of py the petitioners took place they could not have been the basis for any legitimate inference, of conspiracy. It, showed that Schultz had noth- ing to do with the fuss about wet paste in 1950 and 1951 and that he continued to buy all his wet and dry paste from ennock and Hoyt, who were competitors of Papco. It showed that any supposed price cutting or rebottling in "1951 was not related in any way to Papco and that in spite of their contentions, petitioners continued to sell to Schultz as if nothing had happened (N. T. 3099-3100). It showed that petitioners claim to have made a case for themselves by telling Schultz that Papco was trying to put them out 12. These were of no interest whatever to Schultz. 13. The statement (Petition, Page 29) that “Samuel Schultz had become disenchanted and angry with petitioners” is pure inven- tion, as is the statement (Petition, page 58) that “Schultz wished to hurt petitioners.” d Brief for Respondent in Opposition 15 . of business and that if Schultz dared to stop buying Nix- . Size from petitioners and bought instead from Papco, that would be joining in a conspiracy with Papco to harm peti- tioners. It showed that the only acts complained of that occurred:within four years of the suit were after petitioners had become ‘‘unable to meet current orders,’’ * had stopped making Nix-Size or had actually closed their business, and therefore that they could not possibly have done petitioners any harm. It showed that the dollar volume of Schulty’s business lost by petitioners to Papco averaged slightly over $50 per month. It showed that at the time of their failure - petitioners blamed it on their distributor Hoyt and Dow Chemical Company® because they had i to extend petitioners any more credit. It showed th e keystone of petitioners’ case was their demand in 1952\ffat Schuftz re- fuse, to buy from Papco (N. T. 550) and ‘their two letters (N. T. 552-4 and 575-8) ; and that all other complaints relat- ing to Schultz were both secondary and unsubstantial. And it also showed that placing events in their proper relative positions in terms of time and mutual relationships, and so to be able properly to evaluate their significance; had been made most difficult by the studied effort of the petitioners thrd@ghout the trial to confuse and deceive (4b, 5b-8b, 9b, -12b). . The false testimony and confusion, that a@ded enor- mously to the length of the trial and the size of the record, and the time intervals between the receipt of the various bits and pieces of evidence, made it impossible even for the frial judge to unscramble them and put them in proper perspective in the time available to him at the end of the ' plaintiffs’ case (102a). The prolonged and careful analysis that he gave the whole record after the case was over, how- ever, led him inevitably to revise the initial impressions set forth in his interlocutory opinion ( 37a) and to state hisfinal 14, Plaintiffs’ Pretrial Statement of Contentions p. 12. I5. Indeed Dow was the petitioners’ principal throughout 16 Brief for Respondent in Opposition conclusions in the order of November 7 (1b). Instead of relying on the record or on Judge Leahy’s opinion enter- ing judgment n.o.v., which they;failed to print, petitioners base their statements now primarily on Judge Leahy’s pre- liminary and interlocutory review of the evidence, which he was compelled to revise after his final review of the entire record. | , There Was No Competent Evidence of Damage. The only evidence of damage offered by petitioners as a measure of their loss was the testimony of C. H. Darby, an engineer, who was called to give an expert opinion of value. On the basis of the assumptions which he was asked _ to make by petitioners’ counsel (P. T. L-128), and on which he relied exclusively (P. T. L-120-1,-163), he concluded that the petitioners had a business which, at the end of 1954, © was worth between $75,000 and $100,000 (P. T. L-70):. How- ever, Darby’s testimony makes it quite clear that this valua- tion was not of petitioners’ business, The Paste Company of America (P. T. L-100), operated by the Dovbergs (P. T. L-289), but of a purely hypothetical business that had gross annual sales of the product manufactured, whatever it was (P. T. L-136); of $150,000,'a gross income before taxes of $15,000 and a net income after taxes of $10,000 (P. T. L-71-2, ‘ 2103,-106,-206). He merely assumed, because he was asked to do so, that the imagined business made a hypothetical 10% profit (P. T. L-93), but this was wholly unrelated to* the petitioners’ capacity to produce a like amount (P. T. L-102-3) or to any profit that they had ever made or could ever make. : _. Darby’s opinion of value also presupposed that the business would start right off making $150,000 in the year 1955 (P. T. L-125), but at the same time he admitted that if gross annual sales were qnly $17,000 instead of $150,000, the business would be worth\only the value of its net assets, whatever they were (P. T. L-86-7,-237-8).. Actually he con- ' ceded that on the financial facts developed by the peti- r » ~~ Brief for Réspondent in Opposition 17 tioners’ evidencé the petitioners’ business was insolvent as early as 1950 and continued so (P. T. L-233-236). See also Exs. P-242 and 242A and P. T. L-282. Petitioners’ business never made as much as $17,000 in any year of its existence (Ex. P-56) and in 1954 its gross business amounted to $11,000. The theoretical $150,- - 000 was a gross that petitioners could never have obtained. It was arrived at by assuming a capacity to produce sixty-. five gross of pints of Nix-Size a week for fifty-two weeks of every year (P. T. L-51) and to sell the entire production _ at $48 per gross (P. T. L-54), neither of which assumptions was justified by the record. There was no evidence in the case to suggest that there was a market in which anyone could introduce and sell 65 gross of pints of Nix-Size every _ week, or even that that much was consumed in the entire United States. The largest amount ever sold by petitioners in.a year was $13,028.58 (P-56; N. T. 397) and by its com- petitor, Papco, $7,332.82 (N. T. 397-8). . Hypothetical questions must be based upon facts ap- pearing in the record. ' This is true in both state and fed- eral courts: Kale v. Douthitt,\274 F. 2d 476, 482, 483 (4th Cir. 1960); Rennekamp v. Bla 75 Pa. 626; 54). The answer to the hypothetical questidnwhich was-Asked Darby should accordingly not have been allowed (P. T. L-57-69) or should have been stricken (P. T. L-290-1). Darby’s opinion is simply meaningless, and since this is all that the petitioners offered to show their measpre of damage, and since they conceded that there was nothing .else available, the judgment n.o.v. was proper for a reason in addition to those given by the court below. Flintkote Company v. Lysfjord, 246 F. 2d 368 (9th Cir. 1957), cert. denied 355 U. &. 835; Wolf v. National Lead Co.,.225 F. 2d 427, 430-2.(9th Cir. 1955), cert. denied 350 U. S. 915; Emich Motors Corp. v. General Motors Corporation, 181 F» 2d 70, 83-4 (7th Cir. 1950). 18 Brief for Respondent in Opposition CONCLUSION. Respondent Schultz accordingly submits that the peti- tion for writ of certiorari should be denied. Respectfully submitted, Puiu Price, Wim L. Mxf, Attorneys for Respondent, Samuel Schultz &-Co. Of Counsel: Decuert, Price & Rxuoaps, Zoos, Conan & Martz. Y March 31, 1966. + | a eNO EPROP ONE I 2 PN AMA A DRE A TN St —— f RESPONDENTS’ APPENDIX. ORDER AND DIRECTION FOR JUDGMENT Sur Motions Under FR 50(b) and for a New Trial. Anp Now, to wit, this 7th day of November, 1962, upon consideration of defendants’ [Samuel Schultz & Co. and Pennsylvania Paste Company] motions to vacate and set aside judgment in favor of plaintiff, for judgment notwith- standing the verdict, in accordance with defendants’ mo- tions for a directed verdict pursuant to FR 50(b) of the Federal Rules of Civil Procedure, and, in the alternative, © r a new trial; and upon consideration of plaintiffs’ con- itional motion for a new trial as to defendant, Dow Chem- cal Company, in the event a New Trial is accorded to defendants Pennsylvani# Paste Company and Samuel chultz & Co.; briefs submitted and oral argument had thereon on September 17, 1962, with leave to the parties who so requested to file supplemental and answering briefs, which were actually filed; NOW, upon a careful review and study of the entire record, it APPEARs: Plaintiffs charged each of five defendants with viola- tions of §§ 1 and 2 of the Sherman Act,’ and §§ 2, 3 and 4 > of the Clayton Act,? as amended by the Robinson Patman Act;* the trial of this cause.commenced on November 28, 1961 and the Jury returned its verdict on March 29, 1962; plaintiffs’ case in chief took over 41 trial days, over 5,000 ‘pages of transcript, and in excess of 426 exhibits; and after presentation of plaintiffs’ case, motions were made by defendants under FR 50 and FR41(b) of the Federal Rules of Civil Procedure for directed verdicts and dis- missal; after full and complete argumént by counsel for all parties, said motions were granted as defendant Empire Wallpaper & Paint Company, and denied as to the other four defendants, the Court filing its Memoran- dum Opinion with the Clerk of the Court on February 21, Norte: Because of the length of the footnotes they have been printed » at the end of this order, see page 5b, infra. L (1b) 2b Order and Direction for Judgment 1962 [the said Opinion consists of 75 typescript pages, discusses the evidence in detail, pointing out ‘‘The whole area of plaintiffs’ case is pretty thin, but not enough for me to hear the ice cracking’’] which noted that the plain- tiffs having rested their case in chief it was no time then to weigh and evaluate the disputed evidence because it was not the judge’s function in so determining a motion for a directed verdict or for a dismissal; thereafter, defendants’ case took over 20 trial days, over 1700 pages of printed transcript, and in excess of 277 exhibits; after rebuttal testimony and‘the Court’s Charge to the Jury (39 typescript pages), the Jury returned its verdict’ and found defendants Pennsylvania Paste Company and Samuel Schultz & Co. guilty of violations of §1 of the Sherman Act, but found defendants Dow Chemical Company and :Atlas Wallpaper Company not guilty of violation of § 1 of the Sherman Act, and Pennsylvania Paste Comany not guilty of the separate charge against it of violation of §2 of the Sherman Act; $22,000 in damages were awarded as against datindente Pennsylvania Paste Company Samuel Schultz & Co. for violation of §1 of the Sherman: Act; and subsequently such award was trebled by the Court pursuant to the statute he motions of the defendants herein, and plain- tiffs in support of their conditional motion for a new trial, assign several grounds of alleged errors of law on the part of the Trial Judge in the admission or rejection of evidence, and in the Charge to the Jury; each.and every item of alleged error has been critically analyzed and evaluated and after a close review of the testimony, exhibits, the briefs of counsel, the Court concludes there was no prejudicial error in the admission of testimony, rejection, of testimony, or manner of submission of the issues in the case to the Jury, or in the Charge of the Court, when ora in’full context, for it was an accurate presentation of the law; and, NOW, .it Furruer Appears: : As pointed out in the Court’s Memorandum Opinion on defendants’ motions for directed verdict ase for dis- — oe Both opening and closing. Is that right? ) | _ Order and Direction for —— 9b Footnote 10, continued Q. Now, let us go to 1952. Look at that one. Is that opening inventory correct? : A. No. : ' Q. Is the closing inventory correct? ; A. No. 2 Q. Did you know it to be incorrect when 7 oer that _ return? $ a. pf ua gin cxesemeamatained is it put there if it has no significance ? use I just put it there when I typed the invoice. at file erome Davis? — have been. now, you told us about Jerome Davis eventually. us why you put “66” after the number. no significance. nabes , | show you the next one, D-154,and that = ys “QO” after it. Why is that? has no significance. wotall are numerous invoices here, all sania ©; — - “a ( orforfororer g oh 5 Ss atte F Ep And they have no significance? Pi . Absolutely no significance. coulda | stand for ledger, could it? Sateen rsrerort Mss Fg . No. . Did you have a ledger of your accounts? No. jae, & Order and Direction for Judgment ~ 13b Footnote 12, continued © Q. Do you swear under oath you never kept a ledger? A. I swear under oath I never kept a ledger. My uncle’s name was Louis. Q. You ‘swear your uncle’s name was Louis? What has that to do with it? A. My uncle’s name was Louis and my uncle had passed _ and I preceded the invoice numbers with the letter gg or Louis. 3 Q. In memoriam of Louis? , A. Well, yes. Otherwise they had no significance. Q. Did you memorialize Louis in any othe way, so that we know for the purpose of this case? A. No, not yet.. — | Q. When had Uncle Louis passed away ? A. By the end of 1951. When? : j en A. By the end of 1951. Q. And you never used the designation “L” to memoriakze your uncle before 1951 then; is that your eae 2 ‘A. To the best of my recollection. / Q. Then what were the numbers after? Why did you put the numefals 66 arid 99 and so forth after it? A. They didn’t mean a thing. Q. Well, you first told us the “L” meant nothing. Then you told us the “L”——. A. Well, it had no relationship to this case and so for that matter it would be insignificant, Mr. Obert. i [Tr. pp. 4878-4881. ] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385602_1290%3A6. Public record. Not legal advice.