Appendix — Bryant-Buckner Associates, Inc. v. Danville Tobacco Ass'n

a Saas

_ APPENDIX A Paras

_ OPINION eepestsiesl ON FIRST APPEAL, 333 F.2d 202

i apne

aoe St

Wee

~—

UNITED STATES COURT OF APPEALS

‘FOR THE FOURTH CIRCUIT

; No. 9136.

v -

THE ‘Dares ToBacco Apeociattom, a corporation, et al.,.

Appellees, |

versus

‘.. ’ Bryant-Buckner Assocues, INc.,

Appellant,

and i ee :

. THE DANVILLE Topacco ASSOCIATION, & corporation, et al.,

App llees,

SUS

‘ Propucers Tosacco Company, INCORPORATED,

-Appellant. | ;

. Dg

APPEALS FROM THE Unitep States District Court FOR THE

Western District or VirGinia, aT DANVILLE.

TED Dauton, District JUDGE. _. | ae

(Argued January 14, 1964. Decided May 14,1964.)

_ Before Sose.orr, Chief Judge, and a and Bayan, >

Circuit J wee. —

cas

Frederick. Bernays Wiener (I. Murchison Biggs and Robert

- F. Ward on brief) for Appellant Bryant-Buckner As-

sociates, Inc.; G. Kenneth Miller.(Earle Garrett and

Allan Garrett on brief) for Appellant Producers To-

bacco. Company, Incorporated; Edwin B. Meade

_- Meade, Tate and Meade on brief) for Appellees; and

Jolin: W. Carter and C. Stuart Wheatley (Talbott,

Wheatley & Talbott; and Carter and Carter on brief)

for W. Townes Lea and Louis W. Love, Partners Trad-

ing as Piedmont Warehouse and Hughes Warehouse,.

and Neal’s Warehouses, Incorporated.

_ AuseERT V. Bryan, Circuit Judge:

Bright. leaf tobacco -sales at public aution are conducted

in the Danville, Virginia marketing area in warehouses

operated by members of the Danville. Tobacco Association .

(Association) which brought this action in the District —

Court seeking a declaratory judgment upon the validity,

apposed the Federal antitrust statutes, of its plan for

allotting selling time during the 1962 season among the

. warehousemen. The defendants were members of the

Association. The plan was stricken down as illegal on the

opposition of two of the defndants, but this appeal is

prosecuted by them to further decrees declaring valid a .

temporary assignment plan for 1962 and 1963 cael a per-

manent plan for subsequent seasons.

* Appellant Bryant-Buckner Associates, Inc. ( BB) ¢ con-

.tends that these determinations were irregularly reached,

that the plans were violative of the antitrust laws in that

they permitted an unreasonable restraint of trade, and

that the District Court exceeded its authority by ruling

. upon the general fairness of the plans in advance of their .

enforcement. Producers’ Tobacco Co., Inc. (Producers)

‘appeals on the ground that the plans do not: provide

adequate protection against improper tactics of members —

and do not give a member credit for past performance.

ad

ae

We affirm the District Court insofar as it concluded that

the temporary 1962-1963 plan did not embrace any breach

of the antitrust statutes. .We suspend provisionally the

” order establishing the permanent plan, and remand the

action with directions to the District .Court to seek the

advice of the Federal Trade Commission upon the validity

and administration of the permanent plan. - While. pro-

cedures in the Diggrict Court departed from the conven-

tional course, no injustice resulted. However, except upon |

the antitrust phase, we think the District Court should not

have ruled upon the plans prior to their application. Never-

theless, as the plans for 1962 and 1963 have been executed

without contravening the antitrust laws, we have no

occasion to review their — fairness.

_ The production and sale of tobacco since colonial times.

has been impressed with a public interest and subject. to

_ governmental control. _Hening’s Statutes at Large, A

Collection of all the Laws. of Virginia, Vol. IV, Chap. VII,.

p. 91 (1720) and Vol. EX, Chap. X, p. 482 (1778) ;-1951-52

Virginia Cavalcade, Vol. 1, No. 1, p. 39, Some Called It .

Treason by William H. Gaines, Jr. (Virginia. tobacco |

planters in spring of 1682 rebelled in an effort to gain

crop control).. Moreover, the nature of flue cured bright — |

tobacco, together with other economic factors, has also

- made it imperative that sales be regulated.* Tobacco |

_in Southeast United States is grown in geographical belts.

It ripens first in the southernmost of them and, of course,

‘each year’s marketing commences there. This process

progresses northwardly by seasons until the fifth and last

belt, including Virginia, is reached in September. ~ |

* For more instructive accounts of the preparation and sale of

Tobacco, see American Federation of Tobacco: Growers v. Neal,

183 F. 2d 869 (4 Cir. 1950) ; Rogers v. ‘Douglass Tobacco Board

- of Trade, 244 F. 2d 471, 473 n.3 (5 Cir.. 1957), 266. F. 2d 636,

cert, denied, 361 U.S. 833 (1959) ; and report of the master in a the is

— case.

A4-

is the growers bring their tobacco to. warehouses for

sale, the warehousemen have found it wise to prescribe

- uniform ‘rules for governance of the sales. To this end,

. they founded an organization known as the Bright Belt

Warehouse Association. It does not prescribe local rules

. for any market but deals solely with general directions

relating to the ascertainment of the harvest periods for

each belt, the hours of sale, the’ number of buyers and the

quantity of tobacco to be sol daily. The propriety and.

legality of these regulations aré¢ not in dispute, the character

of the business admittedly necessitating them.

. The Bright Belt Warehouse Association has declared that

no more than 400 baskets of tobacco should be sold per

hour and that daily sales be confined to 5144 hours, These

limitations are compelled by the inability of a buyer to bid

intelligently upon a greater quantity or for a longer period. .

Thus for one day the sales. would be restricted to 2200

baskets (400 x 51). Four buyers, assigned to the Danville

market by each major tobacco company, permit four auction

sales. to. be conducted contemporaneously, so that a maxi-

mum of 8800 baskets (4 x 2200) can be sold daily.

With the supply of tobacco about constant and sila

hours and buyers defined, the question arises how. each

day’s selling time shall bé prorated among the warehouses.

This problemi germinates from tlie obligation to avoid loss

_ to the producers through failure to sell all the tobacco they

have brought to the market ‘on a given day. When auctioned —

the tobacco has been cured, dried and moistened.’ Once -

taken from the pack house for sale, it will easily crumble

and spoil unless soon redried. Obviously, no more should be |

offered than can be dried off within the stipulated period.

For some years previous to 1962 the selling time permis- ;

sible at Danville had been. divided among, the warehouse-

men on the basis of the ratio. of the floor space of their

respective warehouses to the total market. floor space. This

system had serious defects, but none ‘More menacing than .

+

@?

AS.

the increase of floor space not to meet a need but to en- *

. large a warehouse’s proportion of selling time. Continued

uneconomic overbuilding as well as the general advantage

of cooperation among the warehousemen, farmers and

buyers brought about The Danville Tobacco —_

plaintiff-appellee. |

_ The General Assembly of Virginia chartered the Associa-

tion by a special act.on March 8, 1888, as a non-stock, non-

profit corporation, its membership to consist of warehouse-

men, buyers and. rehandlers of leaf tobacco. It was created

_. “for the purpose of encouraging, promoting and regulating —

the sale of leaf tobacco-and trade therein in the town of

Danville, Virginia, so far as the same may be dorie under

and in accordance with the laws of this commonwealth.”’

_ The corporation was authorized ‘‘to make all necessary

rules and by-laws as a majority of its members may deem

proper for the promotion of its ites and the purposes

of its incorporation.’’

In early February 1962, BB joined the, Association. Its

warehouse, together with a new one constructed by an exist-

ing member, raised. the total to 17 on the Danville market.

. Newspapers had announced .that B-B would. request .

an apportionment of time on the basis. of approximately

165,000 sq. ft. At the next annual meeting of the Associa-

tion, February 20, 1962, after a discussion on the. disruption

of allocations by additional warehouses, the. gathering was

adjourned until March 12, 1962.. The governing board was

directed,in the interim to ‘ donsider a plan for an equitable

method of allotting settling time on this market, designed

to avert the building of. excess floor apne presently or in

* the future.’’

~. At the adjourned. ities a ilemiial for a floor space

allocation was offered and adopted; only B-B and another

dissented. The new resolution so far as pertinent recited

and provided as’ follows: !

‘*‘WHEREAS, the . existing candies space in, °

_ Danville i is eight times that needed to sell the average }

* AG

‘crop on this market and it is deemed essential at this

~~ time that some fair-and reasonable means be followed .

which will reasonably regulate the construction of

additional excess warehouse space by member owners |

of: warehousemen and those who may build new ware- .

. houses and. who .may apply for membership in the

Association and an ‘allotment of selling times. on the

Danville market ;

‘ e.*i5-8 * Foes

. “uN ow, Therefore, Be It Resolved . . . as follows:

x . ARTICLE T

<a) For the selling season ‘of 1962. each owner or

' operator of.a warehouse on the Danville market shall

be allotted. the ine selling time or basket space allotted

to his warehouse during the 1961, selling séason,

° ‘subject to such adjustment as may be required under

Article II hereof. This basis: of selling time ‘shall

~ continue in the futiire as the, owners or operators of

warehouses during the*selling season of 1962, subject |

only to permet required aforesaid.

*. a a

ARTICLE TI

of’ * *: * eae

/**(b) A new warehouse member of the Association

who has constructed a new.warehouse and an ‘old

warehouse member who has constructed a new ware-

house or a new addition to an existing warehouse

shall be considered alike in the allotment of selling

time or basket space to such new construction.

**(¢) Said new warehouse member or said old ware- .

‘ house member who shall apply for an allotment of

‘selling time of basket. space for his new construction’

shall receive that fractional got of the. over-all selling

.

> oe a

AT

time on the Danville market as the square footage of —

such new construction may bear to the total square

footage of all warehouse floor space including such

new construction on the Danvillé market, but only

forty (40%) per cent of such new allotment may be.

used by the owner or operator of such new construc-

tion during the first season of said allotment. ‘There-

_after said owner or operator of new construction shall

be allowed for each successive selling season an addt-

tional fifteen (157 ) per cent of his allotted time:

during each’successive selling season for a total of four

(4). seasons, and thereafter-the full allotment made

to him prior to his first selling season. will continue, |

subject. to such adjustments as may be required to

allow selling time to owners or operators of subsequent’

new construction, on the Danville mar kgt.” —

added. =; ESAS Peer

All of the. old concerns, , except the one which had added

‘a new warehoisse, sought selling time on the basis of their

1961 share. B-B filed-a’ written application for 420;000 sq.

_ ft., more than one-third of the existing market floor space.

hidtelidie its original request - was for only 165,000,

B-B explained the expansion was attributable to the 40%

_. Teduction for new construction made by the recent regula-

tion. It also informed the Association of its intention to

' litigate the validity of the limitation. B-B later enlarged

the application to 500,000 sq. ft., posting a-cashier’s check

of. $10,000.00 by. way of a performance bond.

. On the day the Association adopted the resolution it filed

the complaint in this case, B-B answered seeking a counter-

declaration to the effect that the. new regulation vjolated

the antitrust laws. Appellant Producers lodged an answer,

counterclaim and crossclaim, denying the reasonableness of -

“the regulation, asserting that any apportionment based on

floor space was unjust, and praying the Court to promulgate

a plan for the Association which would be a fair division

A8

of selling time. At the trial in May 1962, the Court gave

. every party an opportunity to be heard on the. validity of

the resolution and upon the general question of what would -

constitute a lawful program for sharing the selling time.

On June 16, 1962 the-Court handed down its findings of

fact, conclusions and order. It declared the resolution of the

‘Association adopted in its March 12, 1962 meeting ‘‘not in

accordance with the law and . unfair and unreasonable”’.

However, -the motion of B-B for the Court to proceed no

further than the declaration of the resolution’s ‘invalidity

—that it completely fulfilled the ‘purpose of the suit—was

denied. Instead, the Court outlined an acceptable plan for

1962. :

’. The order portioned out the selling time by this formula:

the entire warehouse floor space of the 1961 Danville mar-

ket, comprising 1,400,450 sq. ft., was divided by the number

_ of warehouses, then 16, reaching an average size of 87,527

sq. ft. This became the unit of space. With the addition of

140,000 sq. ft. added by the old member and 268,792 asked

_ by B-B the total became 1,809;242. Division of this new

total by the unit of 87,527 gave approximately 21 units.

This meant that each unit carried — it 419 baskets ( 8800

divided oe | 0

Following substantially a schedule proposed by appellant

Producers, a new entrant was awarded credit ‘in full (419

. baskets) for the first. unit, 50% thereof for,the second unit,

and 25% for the third unit. B-B had contended it was

bound_by a construction contract to build a warehouse of

268,792 sq. ft. Later this claim was reduced to 165,000, the —

Court believitig this area adequate in‘view of the fact that

400,000 sq. ft. had been quoted as sufficient to accommodate

the entire’ market sales.’ This was done with the consent

of B-B. However, in applying the. formula the larger

floorage was used.

. With 268,792 sq. ft., B-B was allowed a full credit or

419. baskets on the first unit. of 87,527 sq. ft., 210 on the a

te ‘

a9

second, and 105 on the third, an eae of 734. Slight

adjustments resulted in a final figure of 724. After-deduc-

tion of this number and the disallowanée of -an additional

quota asked by the old member on the basis of its new

construction, the remainder of the basket-maximum was

distributed on the floor space percentages of 1961.

The order of June 16 also called a meeting of the Asso-

ciation on June 27, 1962 ‘‘for the purpose of considering

and acting on the allotment of selling time made in -this

decree’. . On that occasion the quotients projected by the

order were adopted by the Association as its own for 1962.

Meanwhile, on May 12, 1962, the Court appointed a

master ‘‘to report to the court upon findings of fact and con-

clusion as to the issues presented herein, and particularly

a formula for the allotment of selling time for the tobacco -

warehouses in the Danville area for 1963 and succeeding

years’’, This order was passed with ‘‘all parties repre-

sented by counsel agreeing thereto’’. It was understood .

that the master would not consider a project for 1962.

No evidence -was taken by him; indeed, no evidence was. .

received by the Court after the decree of June 16, 1962.

In consequence, the.master was left to draw his report

from the ‘proceedings culminating i in the June decree, all

’ of which he attended.

After discussing the modus operandi of tobacco market-

ing and the operations at Danville, in late. 1962 the master

‘recommended for 1963 and subsequent years the well-,

known and approved experience or performance plan with |

. modifications. Asheville Tobacco Board of Trade, Inc. v.

FTC, 263 F.2d 502, 506 (4 Cir. 1959); Rogers v. Douglas

. Tobacco Board of Trade, 244° F.2d 471, 478. (5 Cir. 1957).

This,- too, had been sponsored by. appellant Producers.

‘Under the Yhodified version of this theory the grant of

selling time is gauged for each year upon the ratio of. the

respective sales of the warehousemen in the preceding —

year to the total sales, with a proviso that a change in

— . Ee ae en ee ee 2 Senay Sua! mnoe Pottats Sail DA git f Deeenirm. Sables SMe inte. nei ACR De ccna ae esha

A10

selling time of a warehouse will not vary beyond a certain

percentage of its selling time in the preceding year. Some

reduction is introduced in giving tee to a new warehouse-

man.

By a supplemental report the master advised that appli-

cation. of the experience system be delayed until the 1964 -

season. His reason was that as the warehousemen had

not known in 1962 that their performance would bear upon

the 1963 distribution, the vise of the 1962 experience would

not be ‘a. fair foundation. for the 1963 distribution. He ,

.. thought it would be fairer'to look to the 1963 experience

a

for the first measurement. Accordingly, he suggested that

‘the temporary planiof 1962 be carried into 1963. |

“The report as supplemented was confirmed by the Court

on January 30, 1963. A’ meeting of the Association was

called bythe order to consider the permanent plan

_approved by the Court for 1964:and the following years. |

Adoption of it as the Associdtion’s was voted. In turn

. the Court on March 16, 1963 ne the action « the

Association.

I. The decree of June 16, 1962 “aed the primary

prayer of the complaint, that is for an adjudication upon the

validity of the Associ#tion’ s resolution of March 12, 1962 -

which cut the share of newcomers‘to 40% of average space

for the first year.. It found the resolution unreasonable and

unfair, and thus incompatible with antitrust proscriptions.

No exception or. appeal was Racer’ to that portion of the:

order.- - - ned

The Association had refrained from a alae the resolu- —

tion until its legality was adjudicated. Hence it never be-

came a.restraint upon trade. Actually, it was no-more than

the ppblication ef a by-law passed subject to review by the ©

Court. We hold the adoption of:the resdlution was not a

‘breach of the antitrust enactments.

Il. Doubtlessly, the ‘‘such other further and pea

“relief prayer’’ of the complaint warranted the District

Pee

All .

Court in retaining the cause, to plan for the 1962 season,

at the instance of the Association and its members,

although B-B later. withdrew assent. We do not disapprove

the denial of B-B’s motion to terminate the suit immédiately

upon annulment of the resolution of March 12, 1962. No

‘matter how circuitously, in the end the Association did

adopt and submit the 1962 plan to the Court. The inquiry

of the Court, nevertheless, should more advisedly have been

limited. exclusively to the issue of whether the plan trans-

gressed the Federal acts.

To begin with, that was the aim of the suit, Moreover,

the District Court was not equipped to formulate or adjust

a future conception of this sort. It could not readily project

a general scheme and direct its operation; it is geared to

make adjudications on points as they arise from a practiced

design. Instantly, the 1962-1963 and permanent plans were

matters essentially within the internal econoniy of the As-

sociation. They should have been written or erected initially

under its own procedures with guidance, if need be, from

an appropriate and expert administrative agency. At best,

after determining ex facie the legality. of a submitted °

method, the Court ought only to retain jurisdiction for

solution of such antitrust or related, germane and pendent

questions as might arise in its implementation. . :

Nor do we have facilities for framing a selling time

system, or for determining whether it is generally equitable

or how it should be reformed to make it fair. However, as .

the 1962-1963 plan: has already been acted upon, no order at

. this time could rescind or otherwise affect those acts. We

can only express a. judgment upon the right or wrong of

the District Judge’s decision on the legal theme of the

petition: whether the 1962-1963 plan as drawn and

effectuated .was free of antitrust’ taint. We do not hold

he was wrong. 7 ;

The facts we. have> chronicled comprise the findings of

the District Judge together with such other facts as are

Al2

selevant and ee ee Indeed there is little factual

conflict. B-B’s allotment of 724 baskets is not without

support. Dividends of selling time in a tobacco market; it

. is conceded, cannot be set apart with precision.

B-B attacks the fairness of its allotment in comparison

- with the share of baskets it would have received under the

floor space plan prevailing i in early 1962 when it joined the °

Association. In this it avers that the total floor space in -

consideration was then about 1,705,000; B-B’s claim for

165,000 was approximately 9.6758% of thé whole; and the

same percentage of the maximum 8800 baskets. is 851. In.

getting 724 instead of 851, B-B complains it is reduced to

85% of its entitlement under the pre-March 1962 rules. |

A reduction of 127 baskets, (851 less 724) or 14.93%,

' has not been proved to be an unreasonable restraint for a

new entry in the market. Experts for both sides recognize

the rightfulness of a diminution of a newcomer. The record.

warrants the conclusion that a just tolerance would permit

a decrease of his share initially to the formula followed in

this case, to-wit, a full quota for the first unit, 50% for

the second and 25% for the third. This court has sanctioned.

a less-than‘average time: allowance to a fresh entrant. ©

Asheville Tobacco Board of Trade, Inc. v. FTC, 263 F.2d

502, 511 (4 Cir. 1959) ; Asheville Tobacco Board of Trade,

_ Ine. v. FTC, 294 F.2d 619, 625 (4 Cir. 1961). It must be

remembered that this plant was only transitory, giving

* adequate time for preparation of a permanent arrangement.

Our agreement with the District Judge that the’ tem-

porary plan is innocent of antitrust guilt is placed on

' the statute’s terms. No unjust combination, conspiracy or .

* monopoly is discernible. Rather, there was a bona fide and

diligent effort -to permit fair and just trading on the

Danville Tobacco Market. The Association was in effect a

- board of trade seeking an equitable adjustment among the -

_ warehousemen of the constants of supply, selling time and

buyers, all. of which had been lawfully fixed. American

Birniois

~

On

o

apibise® Sia

ay -*

Fulweiien of - Tobacco atau v. Neal, 183 F. 2d 869, if

870 (4 Cir. 1950). All of its members, as the pleadings

reveal, were quite sensitive to antitrust policy: The suit’s —

very object was to tailor the Association’s floor space

regulation to a pattern coming within these statutes. -

Of course, there was some: restraint of trade, but what

was done was done from unimpéachable motives and. under

the aegis of the District Court. This is a factor to be

"weighed in assaying the reasonableness of the restraint.

Chicago Board of Trade v. United States, 246 U.S. 231, —

238 (1918). -In fine, we are not convinced it was excessive. 7

Asheville ‘Tobacco Board of Trade, Inc. v. FTC, supra,

263. F.2d 502, 511.

ITT. To impeach the decrees, attack is tinted by B-B

upon the ground that the master appointed by the District

Court was unqualified and disqualified. The’ argument is

utterly unsound. It wholly misconceives his place in the

suit. Besides, the appointment. was made with the full

knowledge ‘and consent of B-B, even to the-selection of the

person to be master. True, he was not a lawyer, but ‘the

Federal Rules of Civil Procedure contain no such require-

ment. Rule 53(a).

He was an official of the Bright Belt Warehouse Associa-

tion who had testified in the ‘case before his-appointment

and who testified thereafter. If B-B may object despite ©

its contrary representation to the Court, still there was

no error in his appointment and service. ‘‘Master’’ was a

misnomer. In truth he did not serve as a master in the sense

of being a commissioner of reference or master in chancery.

He did not také evidence; he did not resolve any factual

disputes; he made no rulings of law. Impressed with his .

marked knowledge in tobacco marketing, demonstrated in

his testimony, the Court chose him as an expert for its

guidance. He was subject to questioning as a witness

before and after his counseling advice to the Court. Right-

fully, and with every propriety, he expounded to the Court

and the = the techniques of thé subject: in suit.

Al4

It is ‘a. practice frequently resorted to in litigation,

especially in patent and scientific cases. See Scott v.

Spanger Bros., Inc., 298 F.2d 928, 930 (2 Cir. 1962).

Incidentally, he served: without compensation and even

enlisted the aid, on the same basis, of a compefent and

disinterested attorney-to help him propound his views.

All of this was known to the Court and to every party,

without the eee reservation by any of ais ="

B-B.

The aspersions delibetately directed at the master in the

briefs of B-B’s counsel, attempting to impugn his motives,

.

and the disparaging velerousen’ to the trial judge, are

entirely unfounded. We deplore such tactics and condemn .

’ them."

IV. The ‘iccainieah plan approved for 1964 a eub-

sequent years, adopted generally, as_ noted, the ‘experience

system. It provides for allotments on the unit basis. Each .

.. warehouse area of 87,500 sq. ft. will be considered a unit.

Twenty-one (21). units have .been found in the Danville

market. The total selling time of 8800 baskets will be ap-

portioned among the 21 units equally, except a new member

_ will be awarded selling time at the rate of 75% for his first

unit, 50% for his second unit and 25% for subsequent

units. An 8% gain or loss limitation annually upon the

selling time is included, based on the total selling time of

the particular warehouse. The authorities approve a

restriction of this kind when . reasonable. Asheville

Tobacco Board of Trade, Inc.. v. “FTO, supra, 263 F.2d ©

-502, 511; Asheville Tobacco Board of Trade, Inc. v> ETC,

supra, 294 F.2d 619, 629 (4 Cir. 1961). :

Heretofore we have indicated the inaptitude of a court’s °

machinery to prescribe and administer a prospective plan,

' such as that required : for the operations of a tobacco market.

. It is a matter requiring a fluidity of procedure and an

expertise not possessed by courts. Inasmuch as the Associa- .

- tion is performing a governmental function, it seems meet

— AI5

and right to seek the advice of the Federal Trade Commis-

sion in the instant controversy. That body ‘has the pro-

cedural adaptability and a familiarity with the subject

necessary to consider and-adjudge the workability and

legality of a plan for the Association, Accordingly, we

will suspend pro tempore so much of the decree of the

District Court as finally approves the. permanent plan, and

remand the cause with directions to.the Court to refer the |

permanent plan forthwith to the Federal Trade Commis-

‘sion, requesting it to investigate and advise the Court upon _

the validity of, the proposed plan or to. prescribe ° an

appropriate plan. See Rules of Practice, Federal Trade

Commission, 16 C.F.R. § 1.11, 15 U.S.C.A.: following § 45

(1963 Supp. : See United States v. R.C.A:, 358 U.S. 334,

346-52 (1959); Note, 51 Harv. L. Rev. 1251, 1253 (1938) :

FTC v. Morton Salt Co:, 334 U.S. 37, 54 (1948) ; FTC v.

Cement Institute, 333 U. 8. 683, 726 (1948),

‘In’ the event the Federal Trade Commission is unable to

complete its study before the commencement of the 1964

selling season, the Danville market should be permitted for

‘that year to proceed on the basis of the permanent plan. In.

‘ the circumstances: arid on the present record, it does not

‘appear to us to be such an unreasonable restraint of- trade

as to preclude its utilization until further exploration and —

study of the: problem can be consummated.

V. The appeal pressed by Producers poses questions of

management, direction and regulation of thé auction sales

as well as equitableness of the plans. The first point

‘ pertains to the discipline and administration of the:

Association.. This grievance must be submitted to the

governing body of the Association before resort to the

courts is in order. The general fairness of the plans, as _

_ we have observed, was an analysis not’ appropriate for the

~~ Court.

The orders of the District Court entered in aio to -

the 1962-1963 selling seasons are affirmed, the orders in

A16 |

reference to the selling seasons of 1964. and subsequently

are’ suspended and the action remanded. for proceedings

consistent with this qpinion. The District’ Court should

retain jarisdiction of the cause for such further orders |

as may become. requisite in the final settlement of the. .

controversy. == 5 els: ;

: Affirmed in part and

_ remanded with directions

Al7 -

APPENDIX B

OPINION BELOW ON PRESENT SECOND APPEAL

UNITED STATES COURT OF APPEALS |

_ FOR THE FOURTH CIRCUIT

No. 10,579,

’ THE DANVILLE Topacco AssocIaATION, a corporation;

Propucers ‘Topacco Company, Incorporatep; W. TowNzs

Lea and Lovis W. Love, partners, trading as Piedmont.

Warehouse and Hughes Warehouse; Nears WarEHOUSES,

Inc., Jack L, Neal and George A. Myers, Jr., T/A Growers

Warehouse; and Latang Moruey and Bam Mottey, JR.,

and JouHn W. Mortzy, Executors of the Estafe of Blair

Motley, Deceased, T/A Motley’s Warehouse; and Danvinie

Warenouse Company, LyconporarEp,

Appellees, {—

versus

go Bryant-BUCKNER AssoclaTEs, Inc.

Appellant.

. «

APPEAL FROM THE UnitTED § TES District Court FoR ~

THE WesteRY Disrricr or Vircinia, aT DANVILLE.

‘Trp Darony Cuter District Jupcz.

, ae

o We

(Argued October 31,1966. Decided January 25, 1967.)

Before Bryan, Bei and Winter, Circuit Judges.

a

Oe

-

—~-sFe-

| a

= oa pineare a Biggs" (Robert F. Ward -on brief) for. .

Appellant, and Edwin B. Meade (Meade, Tate and °*\ .

Meade on: brief ) for Appellees The Danville Tobacco .

Association and Danville Warehouse Company, In-

_ corperated; C. Stuart Wheatley (Jol W.. Carter;

Clement, ‘Wheatley, Winston & ‘Craig, and Carter and

Carter on brief) for Appellees W. Townes Lea, et al.;

John W., Carter (C.- Stuart Wheatley; Clement, :

Wheatley, Winston & Craig, and Carter and Carter |

on brief) for Appellees Neal’s Warehouses, Incorpo-

rated et al.; and G. Kenneth Miller (Allan Garrett; -

Earle Garrett; III; Garrett, Garrett and Smith, and

“May, Garrett, “Miller, Newman & Compton on brief) for

Appellees Producers Tobacco Company, Incorporated.

—_—_——

e-

ALBERT V. Bryay, Cirauit Judge:

| Apportionnient of selling time among the warehousemen

~~ on the Danville, Virginia tobacco market, comes here again

~ as.an alleged affront to the Sherman Antitrust Act.’ It is

‘a second appeal in the original suit with which we dealt in.

- Danville Tobacco Association v. has dared Buckner Asso- ,

ciates, Ine., 333 F2d 202 (1964). : |

_ In accordance with our suggestion on remand, the Dis-

trict Court asked the Federal Trade Commission to advise.

it upon the validity of an apportionment, system known as

_ the *‘permanent plan’’ and approved by‘the District Court -

for use beginning with the 1963 season, or to prescribe an

‘appropriate scheme if the permanent plan were found |

- objectionable.. In our opinion in 1964 we approved, as a

.transitory méasure, an interim plan approved by the

District Court for 1962 which gave defendant-warehouse-— ,

main Bryant-Buckner Associates (B-B) a diminished :

-selling-time as a new entrant (in 1962) into the market.

115 USC §1 et seq.

couriiiiees, mss

A19

This interim. plan was inectipernted into the odvecsnent ;

: plan, which we permitted to operate pro tempore pending °

- the report of the.Commission. In its response, the Com-

. mission found the permanent plan less than ‘‘reasonable,

fair and equitable’, and devised a wholly new formula.

~ However, the District Court rejected the Commission’s

s¢heme and declared thepermanent plan to ‘‘constitute a

proper and legal manner of allocating selling time -both

‘as to the warehousemen now on the Danville. market and as"

to a new entrant’. B-B now appeals “— this ruling.

We affirm.

The knot of this controversy is the validity of the con-

| stri iction: placed upon the share allotable to a new ware-

houseman in the total daily selling time of the market.

These restraints were written into the regulations of the

‘Danville Tobacco Association, a membership, non-profit

corporation. created by the Virginia legislature ‘‘for the

purpose of . . . regulating the sale of leaf tobacco and

_ trade’? in Danville. . All of the company buyers and ware- -

housernen, including B- B, are members. The “selling time”’

of a warehouse is its portion of the total tobacco—here

8800 baskets—that may be sold each day on the market.

The rules of the Bright Belt Warehouse Association? and -

‘the Danville Tobacco Association stipulate that the daily

sale period cannot exceed 514 hours, and must proceed at a

_ rate of not more than 400 baskets per hour for each of

the four buying teams.

This suit was commenced: by the Keseshaihien immediately

after the admission of B-B to membership in February 1962. |

Naming all warehouse members as defendants, it sought a

declaratory judgment upon the legality under the antitrust :

2For a description of the marketing of bright leaf tobacco

generally, and specifically of the operation of the Danville market, .

see Danville Tobacco Assoc. v. Bryant-Buckner Associates, Inc.,

supra, 333 F. 2d 202, 204 (4 Cir. 1964) and citations therein: See,

also Eagles v. Harriss Sales eis 368 F. 2d 927 (1966).

A20

- laws of an initial plan, and when it was condemned, the

permanent plan was submitted by the Association for a.

like ruling. Danville Tobacco Assoc. v. Bryant-Buckner

. Associates, Inc., supra, 333 F2d 202, 209.

The permanent plan purports, in brief, to allocate selling

time on the basis of the proportion of the floor space in each

warehouse to the total floor space on the market. Any

- member is entitled to increase its allotment upon showing

that its sales for the previous year exceeded its allotment.

A gain or loss, however, capnot go beyond 8%.of a preced-

ing year’s allotment. In Gain, ‘special limitations are.

placed upon new entrants, that is those joining after 1962-

In the District Court’s decree now on review, the perma-

nent plan is set forth in full, the now-pertinent parts of it

- reading:

3 “8, The Modified Ruseninne Troe sii Ad justments

To Be Made as a Result of Fair Competition

“61, A warehouse unit on and in the Danville Market

is identified as a building which is suitable in every

respect for selling leaf tobacco at auction in an efficient -

‘manner, and which is available therefor, and which is

in compliance with the requirements of the Danville

- Tobacco Association Rules and Regulations relating.

to the construction and maintenance of tobacco sales

warehouses. Provided that the requirement as to

‘available therefor’ shall be satisfied if it is determined,

on the day when the allocation of -selling time is made

for ‘an approaching | seagon, that the warehouse is

~. availablé for that season; and provided, further, that

the requirements as to ‘available’ shall not apply to

any warehouse which, on September 10, 1962, was

under an uncancellable lease, until said lease shall have

expired. Each warehouse area measuring 87,500 square _ 7

feet shall be considered a unit and any ‘proportionate

part thereof shall be considered that percentage of

a unit. -At the time of the opening of the 1962 Danville

| A211" 3

Market there were on the market 21 such units. (This

includes three units for Bryant- Buckner ee

2. Original selling time is that which existed for

each tobacco warehouse on the opening date of the

1962 Danville .Market.

‘3. Selling time for the 1963 season shall be the ©

same as that for the 1962 season, subject only to such '

adjustments as may become necessary by reason of

the admission of new warehouses, additions to existing

_ warehouses, withdrawals, transfers, leases and mergers,

as hereafter provided:in these rules and regulations. |

Beginning with the year 1963 ‘adjustments of selling

time for competitive gains or losses shall be made at —

the end ofthe 1963 season so as to reflect the valid and

credible experience of each warehouse to which selling

‘time was allocated /in 1963, such adjustment to be

‘made on the basis/of producers sales in pounds plus’

bona fide resales. ... No warehouse shall gain or lose,

_ at the end of the season, more than 8% of the selling

time which it had during that season. . . Similar

adjustments shall be made at the end of each season

thereafter. .

“8B. The Pp orn of New Warehouses and Addi- |

tions to Existing Warehouses :

— a ‘new. unit’ is a warehouse constructed after

the market opening of 1962, containing 87,500 square

feet of floor space available and suitable for warehouse —

operations as defined above, whose owners and opera-

tors shall be independent of the ownership and

operations of he other warehouse facilities on the

' Danville Market.

“9. An ‘added unit’ is warehouse space of 87,500

square feet suitable and available for warehouse - ‘

operations in Danville, ‘either an addition to an exist-

A22

. ing warehouse or a new structure, which does not

qualify as;a ‘new unit’ as defined above.

‘$3. ‘New units’ and ‘added units’ and fractional

parts thereof entering the Danville Market? in 1963

shall receive allocation of selling time as follows:

‘‘3a, Prior to the second Tuesday in March, 1963,

there shall be computed the number of ‘new units’ of *

87;500 square feet and the number of ‘added units’ of

87,500 square feet (provided that new construction or

added construction of less than 87,500 square feet shall

be treated as a fractional unit), and to the sum of

those units there shall be: added the number of units

~ remaining from the 1962 season. The total available

selling time shall then be divided by the total number

of units. The result is a ‘unit selling time.’

3b. To each ‘new unit’ there shall be allocated, for

the 1963 season, selling time equal to 75% of the unit

selling time.

**3e. As*‘added units’ are built, either new sien

?

' additional floor space in new units, or additions to —

existing buildings, the computation of additional selling

time for such ‘added units’ shall be made after giving

full consideration to the units of floor space to which

the ‘added units’ attach, or with which they unite in

- common ownership or operation . . « and: the com-

putation of additional selling time for such: ‘added: -

units’ shall be made as follows:

**(1) For 87,500 square feet “of available : ware-

house space added to a new or fo an existing unit -

. -of 87,500 square feet, there shall be allocated: sg

of a unit selling time.

**(2) For each 87,500 square feet of warehouse

' floor space added to 175,000'square feet or more

of warehouse fioor space under common owner-

A23 :

ship or management . . ., there shall be ‘allocated :

25% of.a unit selling time.

‘4, For each year following the year 1963, the alloca-

tion of selling time to new and added units and the

handling of withdrawn units shall follow the rules

above prescribed. for such handling in the 1963 season.

‘*5. Whenever it becomes necessary to provide selling

time (as reflected by baskets) to a new or an’added .

unit, such selling time shall be taken from existing

_ warehouses in proportion to their selling time.’’ 3.

In the effectuation of this pattern a newcomer is first

assigned its share under the plan, and the remaining selling

time is then distributed among the older warehouses pro.

rata—in the. proportion of the prior year ’s holding of each

‘of them. |

‘For its own plan the Commission used 87,500 square feet

—the average size of the -warehouses—as a “space-unit

measurement for the allocations and 8% as the gain or

loss limitation. However, it thought the restriction of: a

new member to less selling time per cau than that

allowed the older warehouses was inimical to the antitrust

- statutes, as constituting an unlawful: restraint upon an.

- outsider. , a fas

. The plan. put forward by the Commission placed a new

wafehouse upon an equality with the older- warehouses’ in

the\allocation of selling-time. It would ‘grant each ware- |

house, new and old alike, one credit-unit (a selling-time

paged 296 the first 87,500 square feet of floor space. For |

the next 87,500, each would receive a credit of 75% of a

*On the special master’s later recommendations, reflecting his.

_awareness that the warehousemen had entered the 1962 season

unaware that their performance could alter their subsequent allot-

ments, the implementation of the experience adjustment system

‘was delayed. until 1964 in order that its first allotment adjustments

would reflect. 1963 sales statistics.

- A24

unit. For the third 87,500 a ones of 50% aka be given, —

and for a fourth.a credit of 25%. The total available

baskets—8800—would then be apportioned among the ware-

houses in the proportion that the total credit:units of each

-’ warehouse bore to’ ae aggregate of such units on the

market. :;

I. Before considering the District Court? s discard of the

Commission’s plan, we turn to B-B’s attack upon the

Court’s final approval of the permanent plan as embodying

a fair and reasonable pattern for allotment of selling time

to a new entrant. - Throughout this ‘discussion it must be

recalled that “B-B’s allotment was initially fixed by the

interim plan employed for 1962, and that it,.was taken into

_ the permanent plan as it hecame effective in 1963.

Because of this origin, B-B’s allocation was never sub-

jected to the 75% reduction on its initial 87,500 as required

by the permanent plan. B-B was accorded much mare. In

its application for membership in February 1962 B-B

first stated it would build 420,000 square feet, then it said

500,000, and. then 268,792, of storage space. . Actually it

built 168,000. Nevertheless, in the interim plan, and ever —

since, the Association has allowed it selling-units for

268,792. ..The first unit of 87,529 square feet * received full

credit. To the remainder of the 268,792, the xs gd

gradations of selling-units were ‘applied, that: is 50% to

the second: 87,529 and 25% to the balance. Although,

obviously, there was no balance, B-B was still allowed

credit for it. : = \

The baskets allocable per space-unit on the market were

419, and on the Association’s reckoning, B-B received 724

baskets. If its warehouse had been allowed 100% on each

space-unit, as B-B now asks, it would have received, it

4 The then stipulated space-unit was 87 529 square feet, 333.

F. 2d at ‘206. As- noted herein, the figure has been rounded off to

87,500..

A25

' avers, about 851 baskets—its reduction, thus, was 127

baskets or 15% below the norm of the established ware-

houses.’ This decrease we found on the first appeal, had

no, been proved -to be an unfair restraint. Danville

Tobacco Assoc. v. Bryant-Buckner Associates, Inc., supra,

333 F2d. 202, 206, 208, The reasons for this holding are

more fully expounded later herein, and on those grounds

we adhere to our prior conclusion. ns

All assignments made in 1962, ingluding. B-B’s and after

distribution of the remaining time among the other ware- ©

houses, have since been continued in force pending a final -

adjudication upon the permanent plan. Thus it incorporates -

_the 1962 allocations as a starting point. Actually, then, .

B-B has not so far been injured by the reductions stipulated

in the permanent plan. On the other hand, it has been

made eligible for the 8% gain-or-loss limitation of. tlie

permanent plan, not an original attribute of the interim

plan. :

B-B’s sethantes as to the sersnenent plan appears to |

be premature and presently académic. However, asa mem-' .

ber, B-B may have a right to contest the District Court’s

- declaratory judgment upholding the permanent plan as a

regulation of the Association enforceable upon future

‘applicants. For this reason and to. avoid any chance of |

incompleteness in, our adjudication, as well as for com-_

parison of the prevailing plan with the F.T.C.’s suggested

plan; we undertake a discussion of the permanent plan.

Prior to and during World War Second, there was no

surplus of. storage space, and selling opportunities were

shared by the warehouses by agreement or by employment

of the floor-space method. After the war as building

materials became. accessible, the possibility of wasteful |

erection of additional warehouses created a problem in

distributing selling time. The floor-space system was then

5 For the computation see 333 F. 2d at 208.

A26

in vogue at Danville and continued undisturbed until B-B

in 1962 sought to enter the market with an extensive ware-

house.

.

Restrictions on the sillien dene of “newcomers in a ~

‘tobacco market of the kind applied to B-B in 1962 and

provided in the permanent plan are not necessarily. un-.

lawful abatements. The evidence demonstrates that the

confinement of a latecomer to less-than-average selling-

units is necessary in order to maintain the integrity of the

market, an institution quite generally recognized as an

essential in the production arid sale of tobacco. Asheville

Tobacco Board of Trade, Inc. v. F.T.C., 263 F2d 502, 505

(4 Cir. 1959) reheard 294 F2d 619 (4 Cir. 1961). It is for

“ this reason that the courts have sustained:the power of a.

. board of trade, such as the Association here, to regulate

the disposal of selling time. Indeed, the vendition is held

’ affected with a public interest and the Association is in -

some aspects almost a State agency. Cf. Asheville Tobacco

Board of Trade, Inc, v. F.T.C., supra, 263 F2d.502, 507, 509.

Incidentally, because the quantity of tobacco salable each

day has a fixed and constant maximum, its disposition

presents an economic situation unfamiliar to those dealing

in commodities less limited in supply. For this reason,

auction under regulations has been considered the fairest

means of sale for the producers, the buyers (the companies ©

who furnish. the teams of bidders) and the public. Cf.

- Rogers. v. Douglas Tobacco: Board of — 244 F2d 471,

476 (5 Cir. 1957).

Without some circumscription upon the appearance yo

new, and the enlargement of existing warehouses, com-

petition could be destroyed, and the market monopolized,

contrary to antitrust policy by the warehouseman who was

able to outbuild the others. Furthermore, unrestrained ,

multiplication or éxpansion could so water down the —

business as to render it unprofitable and the market useless -

to the public. Even threats’ to overbuild could become an.

A27

item of trade. Healthy discouragement of surplus build- °

ing, it has been found, may be achieved to a degree by fairly

- withholding full participation i in the market from a stranger

until he proves he is not gambling.

Any such association, therefore,‘has to endeavor to find ‘‘

the delicate balance between. building-control and unfair —

restraint of competition. To assist in preventing the latter

-abuse, a gain-or-loss provision is frequently included, as in

‘ the permanent plan, in the regulations. It permits a new

competitor to increase its selling time from year to year.

At the same time.it safeguards a warehouseman against an

- unjust loss of standing as the result of crop failures and

like infelicitous contingencies. Naturally, this factor has

frequently been in litigation, on the charge of unduly

impeding a: new arrival’s’ attaining: an equality with his

predecessors. Nevertheless it Has been upheld when it is

seen -to be reasonable in the circumstances. See Rogers .

- v. Douglas Tobacco Board of Trade, 266 F2d 636 (5 Cir.

1959); Ashville Tobacco Board of Trade, Inc. v. F.T.C.,

supra, 263 F2d 502, 510-11, and as reheard 294 F2d 619, 625.

* Instantly, the 8% gain-or-loss rate, while not expressly

_* » approved for use in the permanent plan, is not disfavored

by the Commission if the initial allocation is not inreason-

able. The percentage hasbeen found by the master and .

the District Court to permit a fair augmentation of selling ,

time. Likewise, neither finds. unreasonableness in the 25%

reduction of credit-units given-a new entrant. | In this, of

course, the judge impliedly approves the 15% reduction

of B-B under the terms of its 1962 admission to the Asso-

ciation. These ascertainments we cannot say are faulty.

II. B- B’s foremost protestation, evidently, is the District

' Judge’ s refusal to replace the Danville system with the. .

Commission’s. The latter would give B-B, whether or not

a new entrant, 975.85 baskets—an increase of 251 above

-its quota of 724—while decreasing by 251 the share of the |

oldest: warehouse at Danville. We see no error in the

Court’s action. , ess

=

—_ “7 - —" p — Sr sie a mas .

EE aie rgd ictmet wile os Dt Le ah Pat ina aN al Wt et Lenin Ng 8 Bi

A28

To start with, the Commission’s plan does not discourage

superfluous buildings: - Rather it invites new structures of

first-unit size, because floorage of that quantity would re-

ceive an-undiminished allotment equivalent to the first stage .

of each of the existing wn. Again, there id no -

absolute. legal right in a new entrant to have a prevailing

system remolded or discarded for a new model. The duty

of.a board of trade is to avoid or alleviate unfair restraint ©

sufferable by a new or added warehouse. If this concern

is relieved, then there is no just grievance. Presently, this

aim ‘has been achieved without a whitesale reshuffling or

new dealing of the selling time. , :

‘ The plan advanced by the Commission seems logical and

acceptable enough for a market just opening, but caution .

should be used in uprooting an established and working

system and recasting it in another form, especially one*

which goes beyond the limits of this controversy. Attempt

_ at a wrenching reformation was thought by the District

Court to be particularly and unwarrantably disruptive: at

Danville. During the years, the warehouses there have

made adjustments in..the distribution of selling time. to

| absorb any floorage demand as it arose. They did so, to

repeat, as late as 1962 to accommodate the entry of B-B.

‘To inaugurate another system:would mean the -dissolution

of reconcilements which have been found necessary and ~

_ practicable -from year to year. Sweeping .innovations,

unless indispensable, could force the parties to revive old

irritations. Doubtlessly, too, myriad unforeseeable con-

tentions could develop. A general rearrangement could

also wg warehousemen who lad not contributed to -

~overbuilding. ‘These conclusions: of the District Judge

cannot be cast aside lightly, for there is wisdom in them.

In this consideration, it must be remembered that the —

Danville warehouse situation of today is the eventuation of

an historical progression. It was not conceived deliberately

or at one time; nor was it structured to exclude newcomers.

It ‘just grew’’ into its present shape and state. The con- -

, ‘

e

—

3s | MATRA ad we ot ale ot me

| A29 a

ception of a new start puts theory above actuality, With —

the District Judge, we think it too speculative in success —

to be posted as the antitrust standard the Association must

meet. Nor.is it the province of a Federal court to divine

and adjudicate hypotheses.

III. Unreasonable restraint of trade 3 is also ues by es

B-B. because, in. assigning selling time figured on floorage,

_ the computer counted space. in the older warehouses which

was not used for the sale of tobacco. The factual premise

is indisputably true. The. area required per basket is:

variously estimated from 20 to 40 sq. ft. Even at’50 sq. ft.,

only ‘about 440,000 would be needed for the entire 8800-

basket* quota. In contrast, there are now more than

1,700,000 sq. ft..

Although this enormous excess is net utilized in ‘the

_ vendue of tobacco, it is needed to some extent for storage .

pending sale or resale. Concededly, some of the area is

let out for purposes foreign to tobacco sales. Nevertheless,

as the regulations - -of the Association already quoted: will

confirm, no floorage credit is given to any part of a ware-

house which is not in truth readied or readiable for the >

sale of tobacco during the season. =.

ao

_ B-B ean hardly be heard to complain on the score of

-superfluous space, for it stands in pari delicto in the vice.

* Its allotment, apparently less than 800 baskets, could well

be taken care of within 40,000 sq. ft., yet it has a warehouse :

of more than.168,000 sq. ft. and, to repeat, was ot ar

selling time ona floorage of more than 268,000.

The Commission decried the superfluity of space gener-"/

ally, and recommended that it be remedied by Association

. regulations. In outlining its plan, the Commission used all

: the space now on the market. Although this is not to be.

@ ‘taken as its approval, it does show that, the Commission - -

‘recognized that the problem must be resolved practically.

and within the.facts of the Danville market. -The Com.’

| mission said:

A30

?

“It is our opinion therefore that, as a general

~~proposition, any proper standard for. the control of ©

; surplus space, i Le., selling time, on these markets should 7

envision equality ¢ of treatment among all members of

the market, present-and 4 uture under whatever system

each respective board of f trade elects, to adopt. Each

such system moreover should countenance only the

use of space which is in fact’ ‘suitable and available’. —

' This can‘ best be’ dealt with by way of appropriate

definition i in the bylaws or other appropriate media, ”’

: This view - prevailed, too, in the: District Court. The

Berens regulations do agree with the. Commission’s

standard of a‘‘suitable an@ available”? warehopse. ‘The

permanent plan was atcepted by the District J udge, we

assume, upon the condition that the appropriation of ware-.

house space will be rigidly supervised ee enforced by the

Association.

In the circumstances we cannot declare the District Court |

in error for not sustaining B-B’s indictment of te space -

excess as an antitrust evil. -

, Lastly, B-B alleges it was denied an S donselenite to

show the Board its gain in the selling season of 1964, so as

to obtain a larger allotment. for 1965. The record does nét

sustain this grievance; on the contrary it indicates that

ample opportunity was afforded B-B for.the purpose. ‘The

failure to procure the allowance was due to no fault of

the Association or the District Court.

The declarations.and adjudications of the ‘decree now on

reView will not be modified. . In conclusion we: observe,

nevertheless, that the permanent plan is certainly not the

ideal, nor do we hold it up as a criterion of reasonableness

in all circumstances.. We do not have the competence, as-,

we pointed out on the first appeal, to construct plans.

Our duty, as here, is simply to examine an existing plan -

and ascertain . whether the legal infirmities Fata to it

‘in troth exist.

y firmed.

Otome... vee .

APPENDIX C

‘JUDGMENTS BELOW

Ww Judgment on First Appeal (No. 9196)

eh | Caption. Omitted] :

" Tus cause came on to be heard on the record from the

United States District Court for the. Western a a of

Virginia, and was. argued by counsel.

On. CONSIDERATION WHEREOF, It is now here ordered and

adjudged by this Court that the orders of the said District |

‘Court aprealed from, in this cause, be, and the same are

hereby, aiirmed in regard to the 1962-1963 selling season; - ?

that the urder in reference to the selling season of 1964

and Subsequently i is suspended; that this cause be,-and the

, Same is hereby, remanded to the United States District

Court for ‘the’ Western District’ of Virginia, at Danville,

‘for proceedings consistent with the opinion of the Court

filed lierein; and that the costs on appeal ne borne by the

_ appellants.

/s/ Sneow E. ‘Sina a

Chief Judge, Fourth Circuit.

/s/ CieMENT F. Haynsworta, JR.

United States Circuit Judge.

/s/ Aubert V. Bryan.

United States Circuit Judge.

FILED ,

May 14'1964

Maurice S. Dean

‘Clerk

; ~ : os “4

. 4 . ? . Ja

ASS. |

(ay Judgment on Second Agpeel (No. 10579)

[ Caption Omitted] ,

‘THIS CAUSE came on to be heard on the record from the

United, States District Court for the ‘Western. Distelet bad

Virginia, and was argued by counsel.

ON CONSIDERATION WHEREOF, It i is ‘now: here ordered and :

adjudged by this Court that: the judgment of the said

District Court appealed from, in this cause, be, and the

same is hereby, affirmed - wie costs. ; a

PY) ‘Aiauar- V. ‘Wicke fal

United States Circuit Judge.

FILED .

“Jan 25 1967.

’ Mavrice S. Dean.

Clerk

——

.

.

‘

: é

.

\

™

Phy icin