Petition for Writ of Certiorari — Morning Pioneer, Inc. v. Bismarck Tribune Co.

TABLE OF CONTENTS

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ARGUMENT:

I. In finding no Robinson-Patman Act

violation the Court of Appeals and the

Trial Court decided an important Federal

question in conflict with applicable

decisions of the Supreme Court. ....... 8

II. In finding no damages for a Robinson-

Patman Act violation the Court of Appeals

applied the wrong standard and disregarded

an applicable decision of this Court... .... .ll

III. For the same reasons stated in II.

above, the Court of Appeais erred in finding

no damages proved for violations of the

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IV. The Court of Appeals erred in holding

that the trial court's "implicit holding"

that the admitted price discrimination was

not violative of the Sherman Act was justified

because "the pricing practice was one of over

thiety yous GeO 6c 6% 4 te i we ee ee

V. The determination of the lower courts that

the Pioneer was entitled to only nominal damages

on the Sherman Act violation and proved no

damages on the Robinson-Patman Act count dis-

regarded facts clearly proved. ........ 13

APPENDIX "A" -- Opinion, Nos. 73-1036, 73-1049,

Re aes Bete 6s 6 w we ee a ee

CITATIONS

Atlas Building Products Company vs. Diamond Block

269 F.2d 950, 10th Cir., cert den. 363 US 843,

4 L.Ed.2d 1727, 80S.Ct. 1608 ....

. . . a 9

Elyria-Lorain Broadcasting Company vs. Lorain Journal Company

Dae Tce Bee, Wk Gs 4 6 en ba

Federal Trade Commission vs. Anheuser-Busch, Inc.

363 U.S. 536, 4 L.Ed.2d 1385,

80 S.Ct. 1257 . . _ . . — * .* - . 7 . .

Federal Trade Commission vs. BordenCompany

383 U.S. 637, 640-1, 16 L.Ed.2d 153,

OG-3,4%.. 300s 40eeees 6 ow 4 os 8

Moore vs. Mead’s Fine Bread Company

348 U.S. 115, 99 L.Ed. 145,

TE ae ee ea a Ee ee

United States vs. Singer Manufacturing Company

374 U.S. 174, 193, 10 L.Ed.2d 823,

we ans Artes STE Cs a ee ee

U.S. vs.U.S.Gypsum Co.

333 U.S, 364, 92 L.Ed. 746,

Oe ete ae Ke a a ee ae

Utah Pie Company vs. Continental Baking

386 U.S. 685, 18 L.Ed.2d 406,

87 S.Ct. 1326 (1967), 386 U.S. 694. .

. . . 12

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1

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1974

No, - ‘

The Morning Pioneer, Inc. >

Petitioner,

The Bismarck Tribune Company,

A Corporation, , Respondent.

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS FOR

THE EIGHTH CIRCUIT _

BRUCE B, BAIR.

210 Ist Avenue NW-Box 100

Mandan, North Dakota 58554

Attorney tor Petitioner

2

OPINIONS BELOW

The opinion of the Eighth Circuit Court of Appeals

below, in The Morning Pioneer, Inc. v. The Bismarck

Tribune Company, a Corporation, its No. 73-1036, is

not yet reported and is appended at page 15 hereof.

The opinion of the District Court of North Dakota

below, in The Morning Pioneer, Inc. v. The Bismarck

Tribune Co., a corporation, its Civil No. 996, is re-

ported at 342 F.Supp. 1138 (1972).

JURISDICTION

The opinion of the Eighth Circuit Court of Appeals

was filed March 12, 1974, affirming the decision of

the lower court.

Jurisdiction in the Supreme Court is based upon 28

USC 1254, subd. 1.

QUESTIONS FOR REVIEW

I. In finding no Robinson-Patman Act violation the

Court of Appeals and the Trial Court decided an impor-

tant Federal question in conflict with applicable deci-

sions of the Supreme Court.

II. In finding no damages for a Robinson-Patman

Act violation the Court of Appeals applied the wrong

standard and disregarded an applicable decision of this

Court.

III. For the same reasons stated in II. above, the

Court of Appeals erred in finding no damages proved for

violations of the Sherman Act.

IV: The Court of Appeals erred in holding that the

trial court"s “implicit holding" that the admitted price

discrimination was not violative of the Sherman Act was

3

justified because “the priciny practice was one of over

thirty years standing”.

V. The determination of the lower courts that the

Pioneer was entitled to only nominal damages on the

Sherman Act violation and proved no damages on the

Robinson-Patman Act count disregarded facts clearly

provec.

STATUTES INVOLVED

18 U.S.C. §2

“Every person who shall monopolize, or attempt to

monopolize, or combine or conspire with any other

person or persons, to monopolize any part of the

trade or commerce among the several States, or

with foreign nations, shall be deemed guilty of a

misdemeanor, and, on conviction thereof, shall be

punished by fine not exceeding fifty thousand doi-

lars, or by imprisonment not exceeding one year,

or by both said punishments, in the discretion of

the Court.”

15 U.S.C. § 13 (a)

“It shali be unlawful for any person engaged

in commerce, in the course of such commerce,

either directly or indirectly, to discriminate in

price between different purchasers of commodities

of like grade and quality, where either or any of

the purchases involved in such discrimination are

in commerce, where such commodities are sold for

use, Consumption, or resale within the United

States or any Territory thereof or the District of

Columbia or any insular possession or other piace

under the jurisdiction of the United States, and

where the eftect of such discrimination may be

substantialiy to lessen competition or tend to

4

create a monopoly in any line of commerce, or to

injure, destroy, or prevent competition with any

person who either grants or knowingly receives

the benefit of such discrimination, or with custo-

mers of either of them: PROVIDED, That nothing

herein contained shall prevent differentials which

make only due allowance for differences in the cost

of manufacture, sale, or delivery resulting from

the differing methods or quantities in which such

commodities are to such purchasers sold or deli-

vered: PROVIDED, HOWEVER, That the Federal

Trade Commission may, after due investigation and

hearing to all interested parties, fix and establish

quantity limits, and revise the same as it finds

necessary, as to particular commodities or

classes of commodities, where it finds that

available purchasers in greater quantities are so

few as to render differentials on account thereof

unjustly discriminatory or promotive of monopoly

in any line of commerce; and the foregoing shall-

then not be construed to permit differentials based

on differences in quantities greater than those so

fixed and established: AND PROVIDED FURTHER,

That nothing herein contained shall prevent per-

sons engaged in selling goods, wares, or mer-

chandise in commerce from selecting their own

customers in bona fide transactions and not in

restraint of trade: AND PROVIDED FURTHER, That

nothing herein contained shall prevent price

changes from time to time wherein response to

changing conditions affecting the market for or

the marketability of the goods concerned, such

as but not limited to actual or imminent deteriora-

tion of perishable goods, distress sales under

court process, or sales in good faith in discon-

tinuance of business in the goods concerned.”

Siete s RTT RYT LS ate oa.

CFR EI I he F

15 U.S.C. § 13 fb)

"Upon proof being made, at any hearing on

a complaint under this section, that there has

been discrimination in price or services or facili-

ties furnished, the burden of rebutting the prima-

facie case thus made by showing justification

shall be upon the person charged with a violation

of this section, and unless justification shall be

affirmatively shown, the Commission is author-

ized to issue an order terminating the discrimi-

nation: PROVIDED, HOWEVER, That nothing

herein contained shall prevent a seller rebuttinc

the prima-facie case thus made by showing that

his lower price or the furnishing of services or

facilities to any purchaser or purchasers was

made in good faith to meet an equally low price

of a competitor, or the services or facilities

furnished by a competitor.”

15 U.S.C. § 13a

"It shall be unlawful for any person engaged

in commerce, in the course of such commerce,

to be a party to, or assist in, any transaction

of sale, or contract to sell, which discriminates

to his knowledge against competitors of the

purchaser, in that, any discount, rebate, allow-

ance, or advertising service charge is granted

to the purchaser over and above any discount,

rebate, allowance, or advertising service charge

available at the time of such transaction to said

competitors in respect of a sale of goods of like

grade, quality, and quantity; to sell, or contract

to sell, goods in any part of the United States

at prices lower than those exacted by said per-

son elsewhere in the United States for the pur-

pose of destroying ccmpetition, or eliminating a

competitor in such part of the United States; or,

to sell, or contract to sell, goods at unreason-

ably low prices for the purpose of destroying

competition or eliminating a competitor.

6

Any person violating any of the provisions

of this section shall, upon conviction thereof,

be fined not more than $5,000 or imprisoned not

more than one year, or both,”

15 U.S.C. § 15

“Any person who shall be injured in his

business or property by reason of anything

forbidden in the antitrust laws may sue therefor

in any district court of the United States in the

district in which the defendant resides or is

found or has an agent, without respect to the

amount in controversy, and shall recover three-

fold the damages by him sustained, and the

cost of suit, including a reasonable attorney's

fee."

iS U.S.C. § 26

“Any person, firm, corporation, or associa-

tion shall be entitled to sue for and have injunc-

tive relief, in any court of the United States

having jurisdiction over the parties, against

threatened loss or damage by a violation of the

antitrust laws, including sections 13, 14, 18

and 19 of this title, when and under the same

conditions and principles as injunctive relief

against threatened conduct that will cause loss

or damage is granted by courts of equity, under

the rules governing such proceedings, and upon

the execution of proper bond against damages

for an injunction improvidently granted and a

showing that the danger of irreparable loss or

damage is immediate, a preliminary injunction

may issue: PROVIDED, That nothing herein con-

tained shall be construed to entitle any person,

firm, corporation, or association, except the

United States, to bring suit in equity for injunc-

tive relief against any common carrier subject to

7

the provisions of the Act to regulate commerce,

approved February fourth, eighteen hundred and

eighty-seven, in respect of any matter subject

to the regulation, supervision, or other juris-

diction of the Interstate Commerce Commission."

STATEMENT OF THE CASE

The Morning Pioneer, a daily newspaper publish-

ed in Mandan, North Dakota, sued the Bismarck

Tribune, published daily in Bismarck, North Dakota,

(five miles away) for violations of the Robinson-

Patman Act and the Sherman Act. The principal con-

tention was that the admitted price discrimination in

sales of the Tribune in Mandan at a lower price than

in Bismarck was a prima facie violation of the Robin-

son-Patman Act and that the Tribune failed to sustain

its burden of showing any justification for the admit-

ted price discrimination. The District Court found

against the Pioneer on grounds which the Court of

Appeals found erroneous. But the Court of Appeals

sustained the decision anyway, holding that the

Pioneer had not proved damages (thereby ignoring its

right to at least nominal damages, and going contra

to a long series of decisions in this Court).

The secondary issue (which both courts treated

with more attention than the major one) was whether

the Tribune violated the Sherman Act by predatory acts

of blanketing the city of Mandan with free Tribunes

immediately after the Pioneer changed hands, cutting

advertising rates to Mandan merchants, and other

acts. The trial court found that the Tribune violated

the Sherman Act by the blanketing, but not by the

other acts. It then found that the Pioneer had not

proved its damages from the blanketing as a separate

item, and allowed only nominal damages. Again, the

Court of Appeals found that the trial court erred in its

rule as to damages, but affirmed nevertheless be-

8

cause the Pioneer had, it said, not proved its damages.

We concede that the determination of non-

violation of the Sherman Act, except for the blan-

keting, is a finding based on disputed facts, and

we do not appeal from that determination. We like-

wise accept the finding that the Sherman Act was

violated by the blanketing. But we assert that the

courts below erred in holding the Pioneer to proof

(in the trial court) of damages from the specific act

(blanketing) found to be violative and (in the Appel-

late Court) holding that damages had not been

proved.

This is a case of great importance to the future

administration of the antitrust laws of the United

States. If this decision is allowed to stand, it

constitutes a reversal of the holding of all of the

decisions cited herein to the effect that a price dis-

crimination under Robinson-Patman is a price differ-

ence and a per se, prima facie violation of the

Robinson-Patman Act. It will also constitute a

determination by the Eighth Circuit that the use by

the District Court of an erroneous standard of proof

and an erroneous measure of damages raises only a

question of fact entitled to be upheld unless clearly

erroneous, and will thereby constitute a reversal of

the holding of United States vs. Singer Manufacturing

Company, supra, that an erroneous interpretation of

the standard to be applied is a question of law.

ARGUMENT

I. IN FINDING NO ROBINSON-PATMAN ACT

VIOLATION THE COURT OF APPEALS AND THE TRIAL

COURT DECIDED AN IMPORTANT FEDERAL QUESTION

IN CONFLICT WITH APPLICABLE DECISIONS OF THE

SUPREME COURT.

The Court of Appeals found that the Trial Court

used the wrong test for determining whether the

\

9

Robinson-Patman Act was violated, but tailed to

reverse the lower court. In so doing, the Court of

Appeals erred.

It is undisputec, ir fact it is agreed, that the

Bismarck Tribune during practically the entire time

in question was soOia to subscribers in Mandan for

S¢ to 10¢ per week less than in Bismarck, where the

Tribune is published. The Court of Appeals so

found, and the parties so stipulated. See Note 4%

and first sentence of Note 10 of Court of Appeals

Opinion.

Ali of the applicable precedents hold that a

price discrimination is established under Section

2 (a) of the Clayton Act, as amended by the Robinsor-

Patman Act (15 USC 13 (a)), hereinafter described as

"“Robinson-Patman", merely by showing a territoria!

price differential. Federal Trade Commission vs.

Anheuser-Busch, inc., 363 US 536, 4 L.Ed.2d 1385,

60 S.Ct. 1267: Moore vs. Mead'‘s Fine Bread Com-

pény, 348 US 115, 99 L.Ed. 145, 75 S.Ct. 148;

Utah Pie Company vs. Continental Baking, 386 US

685, 18 L.Ed.2d 406, 87 S.Ct. 1326 (1967); Atlas

Building Products Company vs. Diamond Block, 269

F.2d 950, 10th Cir., cert. den. 363 US 843, 4L.

Ed.2d 1727, 80 8.Ct. 1608.

Once the price discrimination is shown, the

Tribune had the burden of proving justification (15

USC 13 (b)) by one of the exceptions stated in 15

USC 13 (a), Utah Pie Co. v. Continental Baking,

Supra, 386 US at 694.

The Tribune provec no justification. There is

no indication in either the District Court or Court

ot Appeals Opinion that any justification was shown

except a finding by the District Court which the

10

Court ot Appeais found to be erroneous.

The District Court's only basis for finding no

violation of Robinson-Patman was “[ find that the

Bismarck Tribune cold (old) in Mandan is not of

‘like grade and quality’ as the Bismarck Tribune not

(new) in Bismarck. By the same token, I find that

the effect of the price discrimination was not “sub-

stantially to lessen competition or tend to create a

monopoly’ within 15 USC 13 (a)." (342 F.Supp. at

il4l).

In both of these holdings, the District Court

erred, and the Court of Appeals found that it erred.

In Note 12 the Court cf Appeals specifically found

that the lower court applied the “market ecceptence’

standard, which was rejected by the Supreme Court

in Federal Trade Commission vs. Borden Company,

383 US 637, 640-1, 16 L.Ed.2d. i53, 86 S.Ct. 1092,

(1966) and that the correct test is that of “physical

comparison", The evidence shows that the Bismarck

Tribune distriouted in Mandan was identical with that

distributed in Bismarck at least 29 days out of every

30, the only difference being that occasionally a late

news story wouid be inserted in whichever distribu-

cion was printed last. (Appendix 100, 262). By the

proper test, therefore, the Tribune in Mandan is "of

like grade and quality" with the Tribune in Bismarck

and no justification was shown.

The District Court also erred in the quoted find-

ing that “by the same token" the effect of the price

discrimination was not to lessen competition cr to

create a monopoly, and again the Court of Appeals

found that it erred. See Note 12, where the Court of

Appeals said thai the Trial Court required the Pioneer

to prove that the discrimination in fact had the prohi-

bited effect, whereas the law only requires that the

° 11

plaintiff prove there is a “reasonable possibility"

that the price discrimination may have the prohibited

effect, citing many cases.

Thus, the Court of Appeals found that the whole

basis for the finding by the Trial Court of no violation

of Robinson-Patman was erroneous. Irrespective of

damages, the lower court should have found the vio-

lation to exist under the undisputed facts and the

cases cited above, and should have assessed at

lease nominal damages, and the Court of Appeals

should have reversed for the trial court's failure to

do so.

As the matter stands, the Court of Appeals has

now made a decision which conflicts with a long line

of cases_of this Court, including Federal Trade Com-

mission vs. Anheuser-Busch, supra, Moore vs.

Mead's Find Bread Company, supra, Utah Pie Com-

pany vs. Continental Baking, supra.

II, IN FINDING NO DAMAGES FOR A ROBINSON-

PATMAN VIOLATION THE COURT OF APPEALS APPLIED

THE WRONG STANDARD AND DISREGARDED AN APPLI-

CABLE DECISION OF THIS COURT.

Since the Court of Appeals concedes that the

Trial Court used the wrong test in finding that there

was no violation of Robinson-Patman, and since it

concedes that the lower court used the wrong test in

deciding that the requisite effect on competition was

not shown (see discussion above), its conclusion

that damages were not proved was based upon “an

erroneous interpretation of the standard to be applied"

and the Court of Appeals was actually reviewing "a

question of law, namely, whether the District Court

applied the proper standard to essentially undisputed

facts". United States vs. Singer Manufacturing

12

Company, 374 US 174, 193, 10 L.Ed.2d 823, 83S.

Ct. 1773, 1783; U.S. v. U.S. Gypsum Co., 333

U.S. 364, 92 L.Ed. 746, 68 S.Ct. 525.

Wnen the Court of Appeals treated the finding

of no damages as a finding of fact, and held that it:

was not clearly erroneous, it committed grievous

error, since the matter is not a question of fact but

a question of law, which is not to be judged under

the clearly erroneous standard of Rule 52 (a).

United States vs. Singer Manufacturing Company,

supra.

A strikingly similar case, also involving antitrust

violations by a newspaper, where the trial court held

that no violation was proved and no damages proved,

but the Court of Appeals reversed on grounds we urge

here, is Elyria~Lorain Broadcasting Company vs. Lorain

Journal Company, 286 F.2d 356, 6th Cir.

III, FOR THE SAME REASONS STATED IN II. ABOVE,

THE COURT OF APPEALS ERRED IN FINDING NO

DAMAGES PROVED FOR VIOLATIONS OF THE SHERMAN

ACT.

The Trial Court found that the Tribune violated the

Sherman Act by its “blanketing" of Mandan immediately

after the newspaper changed hands. It thereby found all

of the requisite elements of a Sherman violation Act to

exist. The Court of Appeals affirmed. See pages 4-6

or Opinion.

But the Court then went on to find that no damages

had been proved, using the wrong standards as pointed

out by the Court of Appeals and as pointed out above,

and awarded only nominal damages.

Since it used the wrong standard in determining

the issue of damages as to both the Sherman Aat and

13

the Robinson-Patman Act, the decision of the Court of

Appeals should be reversed and the case sent back to

District Court for a determination of damages as to both

Acts.

IV, THE COURT OF APPEALS ERRED IN HOLDING

THAT THE TRIAL COURT'S "IMPLICIT HOLDING" THAT

THE ADMITTED PRICE DISCRIMINATION WAS NOT VIO-

LATIVE OF THE SHERMAN ACT WAS JUSTIFIED BECAUSE

“THE PRICING PRACTICE WAS ONE OF OVER THIRTY

YEARS STANDING",

This is the entire discussion of the issue stated

above contained in the opinion of the Court of Appeals.

P. 7 Opinion. It is a total non-sequitur logically. It

is bad law. Continuous violation does not legitimate

conduct which is illegal.

V. THE DETERMINATION OF THE LOWER COURTS

THAT THE PIONEER WAS ENTITLED TO ONLY NOMINAL

DAMAGES ON THE SHERMAN ACT VIOLATION AND

PROVED NO DAMAGES ON THE ROBINSON-PATMAN ACT

COUNT DISREGARDED FACTS CLEARLY PROVED.

The trial court held, using impermissible criteria

(see III above) that the Pioneer had not proved damages,

because there was evidence of "mismanagement at the

Pioneer", and there was "no substantial proof of any

damage to circulation, let alone loss of 500 or more

subscribers". This conclusion utterly disregards evi-

dence that the circulation of the Pioneer was constantly

increasing in Bismarck and everywhere else except

Mandan, where the price discrimination occurred. If

the Pioneer was mismanaged, how could it increase its

circulation everywhere except where the discrimination

hit hardest? See Appellant's Brief in Court of Appeals.

P. 56-9

14

Furthermore, the allegation that the circulation

figures were unreliable ignores the clear evidence that

the books of the Pioneer were thrown open to the Tri-

bune accountants during the trial and they found nothing

to complain about.

All of the Pioneer damage figures were based on

figures of Mandan circulation, based on original docu-

ments produced in evidence or available to Tribune audi-

tors. The criticisms of the trial court of Pioneer circu-

lation figures were based on total circulation figures,

not usea in the damage computation.

For documentation of the foregoing, see Appellant's

Brief in Court of Appeals, pp. 25-30, 65-6, and tran-

script references therein contained.

The Court of Appeals obviously rubber-stamped a

totally unjustified disregard of Overwhelming proof of

not only the possibility of damages, but actual damage

running into many hundreds oi thousands of dollars,

which should have been found and trebled.

When the Trial Court says there was no proof of a

loss of 500 circulation in Mandan, it is just simply

wrong. See pp. 25-30, 65-6 Appellant's Brief in Court

oi Appeals. Even if it had been true, it is not a de-

tense, See Utah Pie Case, supra, 386 U.S. 685, at

699-700.

Dated this 5th day of June, 1974.

Respectfully submitted,

Bruce B. Bair

210 lst Avenue NW = Box 100

Mandan, North Dakota 58554

ATTORNEY FOR PETITIONER

APPENDIX A

U

UNITEDSTATESCOURTOF APPEALS

FOR THEEIGHTHCIRCU IT

‘

NOS. 73-1036. 73-1049

:

The Morning Pioneer, Inc.

Appeal from the

Vv. | A United States _ Dis-

y , trict Court for the

District of North .

‘Dakota.

‘ The Bismarck Tribune Company,

A Corporation,

i

Submitted: September 11, 1973

Filed: March 12, 1974

Before HEANEY, STEPHENSON and WEBSTER, Circuit

Judges.

HEANEY, Circuit Judge.

This appeal arises out of a private antitrust suit

between the publishers of two daily newspapers in

southwestern North Dakota. The Morning Pioneer, Inc.,

publishes a morning paper, "The Morning Pioneer," in

Mandan. Seven miles away in Bismarck, an evening

paper, "The Bismarck Tribune," is sGrhiaooneiaa by The

Bismarck Tribune’ Company.

15

16

Appendix 4

[2]

For several years, there was very little competi-

tion for circulation or advertising between the news-

papers in their respective hometowns l Consequently,

the Pioneer's Bismarck circulation was very limited as

was the Tribune's Mandan circulation. The papers

entered into agreements under which virtually all na-

tional and some local advertising was solicited jointly

for publication in both papers, and the proceeds were

distributed to reflect relative shares of the total circu-

lation--seventy-five percent to the Tribune and twenty-

five percent to the Pioneer. In 1963, the management

of the Tribune shifted to an aggressive publisher, anda

a Bismarck family with a printing background--the

Conrads~~-purchased the Pioneer. The previous noncom-

petitive atmosphere was replaced by aggressive compe-

tition. Each paper initiated measures to increase its

circulation and advertising in the other's hometown.

In August, 1969, the Pioneer brought this action,

seeking damages and injunctive relief. It alleged that

the Tribune's practice of selling its carrier-delivered

newspapers for a lesser price in Mandan and elsewhere2

than in Bismarck constituted price discrimination in

violation of § 2 (a) of the Clayton Act as amended by

the Robinson-Patman Act.? It also complained that the

! The opinion of the District Court details the history of the newspapers’ own-

ership and competitive practices. 342 F. Supp. 1138, 1139-1140 (D. N.D.1972)°

2 At trial, the Pioneer limited its claim and proof of damages from price

discrimination to that discrimination existing between Bismarck and Mandan.

3 That section provides:

It shall be unlawful for any person engaged in commerce. in the

‘ course of such commerce. either directly or indirectly, to discriminate

in price between different purchasers of commodities of like grade and

quality. where either or any of the purchases involved in such dis-

crimination are in commerce, where such commodities are sold for use.

consumption, or resale within the United States and where the

effect of such discrimination may be substantially to lessen competition

or tend to create a monopoly in any line of commerce, or to injure. de-

Stroy, or prevent competition with any person who either grants or know-

ingly receives the benefit of such discrimination, or with customers

of either of them:

a COTA RN TIN

17

Appendix A.

[3]

Tribune engaged in practices constituting an “attempt

to monopolize" as prohibited by g2 of the Sherman Anti-

Trust Act4 by: (1) attempting to purchase the Pioneer;

(2) cancelling the joint advertising agreements; (3) hiring

Pioneer employees; (4) granting certain advertisers rates

more favorable than the published rates to encourage

advertising in the Tribune rather than the Pioneer; (5)

giving premiums to new subscribers; (6) selling the

Tribune for a lesser price in Mandan than in Bismarck;

and (7) blanketing Mandan homes with free copies of the

Tribune on numerous occasions.

The District Court held that three periods of blan-

keting had been of sufficient intensity to constitute an

“attempt to monopolize" in violation of the Sherman Act,

but that the other practices, considered individually or

collectively, did not constitute such an attempt. It

further held that the Clayton Act had not been violated.

It denied injunctive relief but awarded the Pioneer nomi-

nal single damages of one dollar (three dollars trebled)

and attorney's fees of $7,350, plus costs for the Sherman

Act violation.

The Pioneer asserts on this appeal that the

District Court erred in: (1) finding that the intensive

blanketing during the three periods was the only Sher-

man Act violation; (2) awarding only nominal damages

for this violation; (3) failing to find that the price dif-

ference violated the Clayton Act and not awarding

damages for that violation. It asks this Court to assess

substantial damages for the claimed violations or to

remand to the District Court with instructions to it to

determine damages for the violations, or to grant a new

trial. No request for injunctive relief is made. The

15 U.S.C. si3 (a) (1970).

4 Section 2 of the Sherman Act. makes it unlawful to “attempt to mono-

polize-." any partof the trade of commerceamongthe several states .""15U.S.C. g2' 1970)

~

18

Appendix 4

[4]

Tribune, on the other hand, asserts that the District

Court erred in: (1) holding that the blanketing violated

the Sherman Act; and (2) awarding excessive attorneys’

fees for the violation. It asks that the court be affirmed

except insofar as it found a violation of the Sherman

Act and granted attorneys" fees to the Pioneer. It re-

quests that these fees be disallowed or reduced.

THF SHERMAN ACT VIOLATION:

To establish an “attempt to monopolize" in viola-

tion of §2 of the Sherman Act, it is necessary to prove:

(1) a specific intent to monopolize; (2) an overt act or

acts; and (3) a dangerous probability of monopolization

of a specific product market in a particular geographic

market. See, Acme Precision Products, Inc. v. Ameri-

can Alloys Corp., 484 F.2d 1237, 1240 (8th Cir. 1973);

Agiasheil, Inc. v. Hammons Products Company, 479

F.2d 269, 284-286 (8th Cir.), cert. denied, 42 U.S.L.

W. 3290 and 3291 (Nov. 12, 1973). See also, HIBNER,

Attempts to Monopolize: A Concept in Search of Analy-

sis, 34 ABA ANTITRUST L. J. 165 (1967); SMITH,

Attempt to Monopolize: Its Elements and Their Defini-

tion, 27 GEO. WASH. L. REV. 227 (1959).

The court properly found that each of the neces-

sary elements was present here. The Tribune was the

dominant daily newspaper in southwestern North Dakota.

If it succeeded in driving the Pioneer out of business, a

dangerous probability existed that it would achieve a

monopolistic position in the daily newspaper market and

would be able to exploit that position to the disadvantage

of the people and businesses in the area. The fact that

television and radio would continue to compete in the

news and advertising field would not prevent the Tribune

from exploiting its position as the only daily newspaper

because electronic media is not wholly competitive with

19

Appendix A.

[5]

respect to some types of news and advertising.° These

include: in depth stories on local and national affairs;

detailed stories on births, deaths, marriages and social

engagements; stock market statistics; detailed sports

stories; and price advertising, particularly in the grocery

field.

The intent to monopolize was adequately shown

by the Tribune's distribution of thousands of free news-

papers to Mandan Housing units during April and May

and September and October of 1963, and during January

through March of 1965.6 Much of the blanketing during

these periods was done on Wednesday, the heavy gro-

cery ad days. It was sometimes accompanied by an

appeal to Mandan grocery advertisers to place ads on

those days. Because advertising constituted eighty

percent of the Pioneer’s revenue and a significant por-

tion of that revenue came from grocery advertising, the

dangerous probability that the Pioneer would be driven

out of business by a continuation of the practice is

evident. Accord, Kansas City Star Company v. United

States, 240 F.2d 643, 662 (8th Cir.), cert. denied,

354 U.S. 923 (1957). The blanketing condemned by the

court clearly exceeded that permissible in furtherance

by the court clearly exceeded that permissible in fur-

> See, United States v. Times Mirror Company. 274 F. Supp. 606, 618 (C D.Cal.

1967). aff'd mem., 390 U.S. 712 (1968): R TS. Antitrust Problems in the

Newspaper Industry, 82 HARV. L. REV. 319, 320-322 (1968) See also, United

States v. Grinnell Corp., 384 U.S. 563. 572 (1966). where the Supreme Court

sanctioned the recognition of submarkets for antitrust purposes.

6 The blanketing in April and May of 1963 began on the same day as

commencement of the publication of the Pioneer by its new owne

It continued daily for three weeks; and on each day. between

eight occasions and between 1,000 and 2.400 copies were distributed each

day. This was followed by bianketing of similar intensity on eight days in Feb-

ruary and on seven days in March of 1965.

20

Appendix

{6}

therance of a legitimate attempt by the Tribune to enter

the Mandan market and properly served as a basis for

the court's implicit finding of an intent to monopolize by

the Tribune.

The Pioneer would have us go a step further and

find that the District Court erred in failing to find that

Other acts also were illegal attempts to monopolize.

We decline to do so. There is adequate evidence in the

record to support the court's findings that: the

cancellation of the joint advertising agreement served

to terminate an anticompetitive agreement; that the

Tribune did not act improperly in hiring former em-

Ployees of the Pioneer; that the premium giveaway

programs engaged in by the Tribune were reasonable

and done in accordance with accepted practices in the

newspaper industry; and that no improper advertising

rate discrimination occurred.

The Pioneer would also have us reverse the

court's implicit holding that the Tribune's practice of

charging a lower price in Mandan was not violative of

the Sherman Act. We reject the invitation. That hold-

ing is supported by the evidence demonstrating that the

pricing practice was one of over thirty years standing.

Pinally, the Pioneer urges that the District Court

erred by not viewing all of the acts of the Tribune

together in determining whether there was an attempt

to monopolize. The Pioneer is correct in asserting

that the trier of fact must adopt that approach, see,

) Sanitary Milk Producers v. Bergjans Farm Dairy, Inc.,

368 F. 2d 679, 691 (8th Cir. 1966), but the Pioneer is

mistaken in its assertion that the court failed to do so.

After considering each act individually, the court

stated that it was required to view “the evidence as a

whole and * * * not tightly compartmentalize the various

Se anty I Sigh Se SR “9

21

Appendix A.

[7]

components, and wipe the slate clean after scrutiny of

each." It then stated:

* * * Nevertheless, I find that the

conduct of the Bismarck Tribune,

whether considered in its separate

parts or as a whole, did not constitute

an act in restraint of trade. 7 I reiter-

ate that both papers, following March

of 1962, responded to the termination

of a non-competitive agreement with

aggressive, but reasonably competitive

conduct, except for the blanketing pre-

viously discussed. 342 F.Supp. at 1142.

DAMAGES FOR THE SHERMAN ACT VIOLATION

Any person injured in his business or property

by reason of another's violation of the antitrust law

may recover treble damages from the wrongdoer. 15

U.S.C. §15. But it is not enough for recovery of

damages to prove that an antitrust law was violated by

the defendant. Cf., Duff v. Kansas City Star Company,

299 F.2d 320, 323 (8th Cir. 1962). Rather, the rule is

that damages may not be awarded to a litigant unless

he also proves “with a fair degree of certainty, the

fact of damage and the causal connection between the

antitrust violation and the injury." ABA ANTITRUST

SECTION, ANTITRUST DEVELOPMENTS: 1955-1968, at

282 (1968). See, Atlas Building Prod. Co. v. Diamond

Block & Gravel Co., 269 F.2d 950, 957,958 (10th Cir.

1959), cert. denied, 363 U.S. 843 (1960). Cf., Per-

kins v. Standard Oil Co., 395 U.S. 642, 648 (1969);

Story Parchment Co. v. Patterson P. Paper Co., 282

U.S. 555 (1931).

7 We are convinced that the court misstated when it used

of trade’ here. We are satisfied that the court meant to use

to monopolize.’ as that was the question before the court.

the term ‘‘restraint

the term ‘attempt

22

Appendix A

{8}

The Pioneer's claims for damages for the Sherman

Act violation were premised on two factors--loss of

advertising revenue and loss of circulation. The Dist-

rict Court found that Pioneer lost one-third of its gro-

cery advertising during a five-week period in 1965,

that this was the only advertising loss, and that it was

caused by the illegal blanketing in 1965. It declined

to award more than nominal damages for the loss be-

cause no evidence was introduced to show what the

advertising revenue actually was or would have been

absent the blanketing. We are satisfied that the

court's findings and conclusions with respect to the

loss of advertising revenue are supported by substantial

evidence. This is not an instance where the defendant's

actions prevented a precise computation of the damage.

Rather, the fault lies in the plaintiff's failure to intro-

duce any evidence as to the value of its grocery adver-

tisements, normal or actual, during the five-week

period. The plaintiff’s witness merely related that

the loss was one-third of the normal. To have awarded

more than nominal damages under these circumstances

would have been to engage in impermissible speculation

and conjecture. See, e.g., Siegfried v. Kansas City

Star Company, 298 F.2d 1, 5-8 (8th Cir.) cert. denied,

369 U.S. 819 (1962).

The court properly declined to award damages for

loss of circulation. While there was evidence in the

record to support a finding that Pioneer lost three hun-

dred paid subscribers between 1963 and 1964,8 the

court's finding that it was impossible to determine that

the loss in subscription was caused by the Tribune's

8 The court stated that the Pioneer's circulation records were so questionable

and unreliable that it would have been improper to find a loss in circulation

by relying on them. While this fact precluded the court from estimating

the Pioneer's circulation after March 31. 1966, it could have determined the

paper's circulaton wth the necessary degree of certainty prior to that date by re-

lying on the reports of the Audit Bureau of Circulations (ABC).

Tse

23

Appendix A.

[9]

wrongdoing was not clearly erroneous. The reduction,

as the court indicated, could have been caused by one

or more of the following facts: (1) the Pioneer was chang-

ed from an evening to a moming paper on May 19, 1963;

(2) the arrangement between the Pioneer and the Tribune

owners of not competing in the other's hometown was

also curtailed in 1963; (3) the Pioneer, especially its

circulation department, was poorly managed; and (4)

the Pioneer's editorial policy was shifted to a more

liberal position by the Conrads. The Pioneer made an

attempt to prove that these factors did not cause the

reduction, but its proof did not satisfy the District

Court. We cannot say that the court erred in concluding

that the proof of causation was inadequate.

THE CI.AAYTON ACT ISSUES

The District Court found that for over thirty years,

the Tribune, by carrier, was sold for a lower price in

Mandan than in Bismarck.9 It held that this practice

did not violate ¢2(2) of the Clayton Act for two reasons:

(1) The Tribunes delivered in the two cities were not of

"like grade and quality" as the Tribune had a lesser

‘

The ABT report ior the nine-month period ending March 31. 1963. shows an

adjusted figure for “‘Carrier and Dealer’ circulation of the Pioneer in Mandan

to be approximately 2,250 while the same adjusted figure for the twelve-

month period ending March 31. 1964. is about 1.925. In reaching these figures.

we assumed that the adjustments made were attributable to the “Carrier and

Dealer’ variation during the years in question. This Mandan reduction of ap-

proximately three hundred continued through March 31. 1966. when the Pioneer's

last audited report by the ABC was prepared. After that date, the Pioneer ter-

minated its affiliation with the ABC.

~

9The record reveals that during this period, the Mandan price was five cents

per week less that the Bismarck price. The practice of charging less for car-

rier-delivered _Tribunes in Mandan ws curtailed on October 26, 1970, but a

differential was continued in other communities. Except for the period of Sep-

tember 1967, the price of the Tribune by carrier in Mandan was less than

or equal to the price of the Pioneer by carrier in Mandan. The higher Pioneer

price in the period of exception resulted from an increase in the Pioneer's price,

and the difference was five cents per week. |

~

EERE SOREL LS POLE LEE LOIN EL ETI Tes

OE LLIN GETS NEES SEAR RR Bip RE SER

24

Appendix A.

[10]

value to Mandan readers than Bismarck readers. (The

court reasoned that the paper arrived later in Bismarck,

contained little Mandan news, and less advertising of

interest to Mandan readers.) (2) The effect of the price

discrimination was not “substantially to lessen compe-

tition or tend to create a monopoly."

We need not decide whether the court erred in

concluding that the Tribune did not violate g2(a) of the

Clayton Act by its price discrimination practice. 10

Even if we resolved all the Clayton Act liability conten-

tions in the Pioneer's favor--i.e., that newspapers are

“commodities” subject to the Act, !1 that the Tribunes

delivered in Mandan and Bismarck were of "like grade

10 The parties agree that “price discrimination’ between different purchasers

was proven. See, Federal Trade Com. v. Anheuser-Busch, 363 U.S. 536, 549

(1960), where the’ Supreme Court held ‘a price discrimination within the mean-

ing of lg2 (a) ] is merely a price difference." They also agree, as they had

stipulated at trial, that the interstate commerce requirements of the antitrust

laws were met in this case. While we are satisfed that there was sufficient

connection with interstate commerce under the Sherman Act, there is doubt

as to whether third commerce requirements of §2 (a) of the Clayton Act, was

met--i.e., that ‘either or any of the purchases involved in such discrimination

[were] in commerce.” 15 U.S.C. §13 (a). See, e.g., STICKELLS, FEDERAL

CONTROL OF BUSINESS-ANTITRUST LAWS 6§126 (1972); ROWE. Diseri-

minatory Sales of Commodities in Commerce: Jurisdictional Criteria Under the

Robinson-Patman Act, 67 YALE L. J. i155, 1166-1168 (1958). See also, Littlejohn,

v. Shell Oil Company, 483 F. 2d 1140 (Sth Cir.) (en banc) cert. denied, 42 U.S.L.W.

3363 (December 12, 1973). Nonetheless, we decline to examine this question

any further because it was not raised by the parties and its resolution

either way would not affect our disposition of the appeal.

11 The term “commodity” is not defined in the Act, but it is generally thought

to include only tangible items of commerce and not services. See, Tri-State

Broadcasting Co. v. United Press Internat’l, inc., 369 F. 2d 268. 270 n. 2 (Sth

Cir. 1966). See also, STICKELLS.FEDERAL CONTROL OF BUSINESS-ANTI-

TRUST LAWS §126, at 449-450 (1972); ROWE, Discriminatory Sales of Commodi-

ties in Commerce: Jurisdictional. Criteria Under—the Robinson-Patman Act,

67 YALE L. J., supra at 1163-1165. We recognize that the production of a news-

paper requires and incorporates the services of a great number of people, but the

fact remains that when finally published. the paper takes on a tangible form

and it is bought and sold in the market place. As such. it is predominantly.a

tangible good and, thus, a “commodity” subject to the Act.

25

Appendix A.

{11)

and quality"!2 and that the price discrimination had the

prohibited effect on competition!3--a reversal and re-

mand of this case to the District Court would be unne-

cessary. This is true because the Pioneer failed to

prove that it was injured by the Tribune's price discri-

mination.

The basic injury alleged to have been caused by

the price discrimination was a loss in the Pioneer's

Mandan circulation, and proof that this loss was caused

by the price discrimination was properly found by the

District Court to be wholly inadequate. 14 We also note

that the price discrimination complained of was termi-

nated in October 1970, and there is no showing or con-

tention that it is likely to be reinstituted.

12In reaching its decision as to “like grade and quality,” the court appears to

have applied the “market acceptance” standard. while that standard is not

without support among the commentators, see, e.g., CASSADY & GRETHER,

The Proper Interpretation of “like Grade and Quality” Within the Meaning of Sec-

tien 2(a) of the Robinson-Patman Act, 30 S. Cal. L. REV. 241 (1957), it was re-

jected by the Supreme Court in Federal Trade Com. v. Borden Co. 383 U.S.

637, 640-641 (1966). There. the Court indicated the proper test is that of “‘phy-

sical comparison.”

13-The court appears to have required that the Pioneer prove the Tribune's

price discrimination in fact had the prohibited effect on competition. Such a

burden is not required under the statute. It is only necessary for the plaintiff

to prove there is a “reasonable possibility” that the price discrimination may

have the prohibited effect on competition. Federal Trade Com. v. Morton Salt

Co., 334 U.S. 37, 47 (1948). See, Utah Pie Co. v. Continental Baking Co., 385 U.S.

685, 701 (1967); Atlas Building Prod Co. v. Diamond Black & Gravel Co., 269

F. 2d 950, 957 (10th Cir. 1959), cert. denied, 363 U.S. 843 (1960). But see, Fed-

eral Trade Com. v. Morton Salt Co., supra at 55-61 (Jackson & Frankfurter, J.J.

dissenting) and Moog Industries v. Federal Trade Commission, 238 F. 2d 43. 61

(8th Cir. 1956), where the:standard of ‘‘reasonable probability” was advanced.

14The theory that the price discrimination caused the loss in the Pioneer's

Mandan circulation is weakened by the evidence showing that the Tribune’s Man-

dan circulation remained stable after it terminated the price differential in

October of 1970. The ABC’s report for the twelve-month period ending March

31, 1970, reveals that the Tribune’s Mandan “Carrier and Dealer’ circulation

was then 1,811, while the ABC’s report for the twelve-month period ending

March 31, 1971, shows the circulation increased to 1,895.

EE eer

ree

26

Appendix A

[12]

ATTORNEYS’ FEES

The award of attorneys’ fees to successful plain-

tiffs is sanctioned by 15 U.S.C. §15. Where no factual

error is claimed, the amount assessed by the District

Court must stand unless the party seeking review esta-

blishes that the court has abused its discretion. Armco

Steel Corporation v. State of North Dakota, 376 F.2d 206

212 (8th Cir. 1967). When the damages recovered are

relatively small, as is the case here, it is not neces-

sarily an abuse of discretion to grant attorneys’ fees in

excess of the damage award. Advance Business Systems

& Supply Co. v. SGM Corporation, 415 F2d 55, 70 (4th

Cir. 1969), cert. denied, 397 U.S. 920 (1970). Inar-

riving at the fee, the court considered the proper factors!5

and we find no abuse of discretion here.

We deny the Pioneer's request for attorneys’

fees on this appeal.

Each party will bear its own costs on this appeal.

Affirmed.

A true copy.

Attest:

Clerk, U.S. Court of Appeals, Eighth Circuit.

15 The court indicated it was considering the following factors in determining

the award of attorneys’ fees: (1) the fact that plaintiff's counsel had not

had the benefit of a prior judgment or decree in a case brought by the govern-

ment; (2) the standing at the bar of counsel on both sides; (3) the time

spent by plaintiff's counsel; (4) the magnitude and complexity of the litigation;

(5) the responsibility undertaken by counsel; (6) the amount recovered; and

(7) the court’s knowledge of the quality of counsel’s work done on the case

in and out of court. See generally, Comment, Attorneys’ Fees in Individual and

Class Action Antitrust Litigation, 60 CALIF. L. REV. 1656 (1972).