Appendix — United States v. Von's Grocery Co.

Supreme Court brief1966

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Text

——

SUPREME COURT OF THE UNITED STATES

Octoser TreRM, 1965

No. 303

UNITED STATES, APPELLANT,

vs.

VON’S GROCERY COMPANY, ET AL.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE

DISTRICT OF CALIFORNIA

Volume I

INDEX

Original Print

Record from the United States District Court, Southern

District of California, Central Division.............. 1

Ne sre Se aes Cees 0s peaks > 1

Answer to complaint (excerpt) 6

Order allowing defendant leave to file an amended

answer ..... aaa ee Mis catiecdie, iar, Sie yi oa ASF 6

Amended answer to complaint..................... 8

Pre-trial conference order, dated April 24, 1961, as

amended, June 17, 1963........................ 12

Notice that trial date postponed from August 1, 1961

to October 31, 1961 on the Court’s own motion,

ge SR Ea ee 25

Minute entry of Order that trial date is continued

from October 31, 1961 until November 14, 1961,

dated September 21, 1961...................... 26

Minute entry of Order that trial date of November 14,

1961 is vacated and case set for pretrial hearing

December 18, 1961, dated November 14, 1961. _... 26

Minute entry of Order that trial date is set for June

11, 1963, dated February 19, 1963...............

Transcript of proceedings, June 11, 12, 13 and 14, 1963 1

pS RCS ee ae 2

Colloquy between court and counsel............ 4

Plaintiff's Exhibit No. 72 read into reeord—Stipu-

lation filed May 7, 1963 23

BS BRBS

— EP AT Se BIEL fee

| ae GL EEL CLG ELI EIEIO IDET OP CGE LESS a a RELI EMOTE OS

li INDEX

Record from the United States District Court, Southern

District of California, Central Division—Continued

Transcript of proceedings, June 11, 12, 13 and 14,

1963—Continued Original Print

Testimony of Lloyd E; Allen

by narrative stateniéht........ per erat 24 40

Testimony of Solomon Barondess

by narrative statement........--.-----5-> 30 43

by deposition—direct (by Mr. Alsup).....-- 36 47

—cross (by Mr. Hughes)...... 72 69

—redirect (by Mr. Alsup)..... 75 71

—recross (by Mr. Hughes)... 76 71

—redirect (by Mr. Alsup). ... 76 71

Testimony of Adrian Bynum

by narrative statement........-..----- 77a 72

Testimony of Artie L. Carpenter

by narrative statement..........-.----- ane 78 76

by deposition—direct (by Mr. ee 84 80

—cross (by Mr. Hughes)... .. 158 124

—redirect (by Mr. Alsup)..... 167 130

Testimony of Kasper Chitjean

by narrative statement..........-.. ee Ber 180 137

by deposition—direct (by Mr. Alem)... .--- 186 141

—cross (by Mr. Hughes).....- 224 164

—redirect (by Mr. Alsup).... 232 169

—recross (by Mr. Hughes)... . 237 172

Testimony of Kenneth Craun

by narrative statement........-.-..--- ++) 239 173 |

by deposition—direct (by Mr. Vaughn).... 245 177

—eross (by Mr. Coyle)....... 291 205 |

—redirect (by Mr. Vaughn)... 293 206 |

—recross (by Mr. Coyle)...... 309 216

—redirect (by Mr. Vaughn)... 310 217

—reeross (by Mr. Coyle)... .. 312 218

Testimony of Richard Dick

by narrative statement. ....------6 0 314 219

by deposition—direct (by Mr. Abe)... ..+-- 320 222

—cross (by Mr. Hughes)... .. 380 258

—redirect (by Mr. Alsup)... 385 261

—recross (by Mr. Hughes)... 388 263

Testimony of Lester L. Eaton

by narrative statement........------- +--+) 390 264

by deposition—direet (by Mr. Vaughn)..... 397 268

—eross (by Mr. Coyle)..... _ 487 292

—redirect (by Mr. Vaughn)... 440 294

—reecross (by Mr. Coyle)...... 442 295

—redirect (by Mr. Vaughn)... 443 295

—recross (by Mr. Coyle)...... 444 296

—redirect (by Mr. Vaugha)... 444 296

—

INDEX ili

Record from the United States District Court, Southern

District of California, Central Division—Continued

Transcript of proceedings, June 11, 12, 13 and 14,

1963—Continued Original = Print

Testimony of Don Henry Fairbank

by narrative statement.................... 446 298

by deposition—direct (by Mr. Alsup)....... 453 302

—cross (by Mr. Coyle)..... . §18 341

—redirect (by Mr. Alsup).... 544 357

—recross (by Mr. Coyle)...... 559 366

—redirect (by Mr. Alsup)..... 559 367

Fairbank Exhibit No. 1—Graph showing

“Percentage of Total Grocery Store Sales

by Various Groups of Chains in the Los

Angeles Metropolitan Area 1950-1960”.... 560a 369

Testimony of Jerry Fleishman

by narrative statement.................... 561 371

by deposition—direct (by Mr. Alsup)..... . 569 375

—cross (by Mr. Hughes)...... 629 411

—redirect (by Mr. Alsup)..... 636 415

Fleishman Exhibit No. 3—Hand printed sign

“Under New Management, ete.”.......... 637a 417

Testimony of Manuel Gertmenian

by narrative statement .. ................ 638 419

by deposition—direct (by Mr. Alsup)....... 644 423

—cross (by Mr. Hughes)...... 708 461

—redirect (by Mr. Alsup)..... 717 466

Testimony of Edward Hasson

by narrative statement .................... 724 470

Testimony of Thomas P. Hubbard

by narrative statement .............. 730 474

Testimony of Roderick A. Irvine

by narrative statement. --s- 400 477

by deposition—direct (by Mr. ‘Alsup) .. te 743 481

—cross (by Mr. Hughes) ..... 797 514

—redirect (by Mr. Alsup)..... 803 517

—recross (by Mr. Hughes).... 812 523

Testimony of eo Arthur Jenkins

by narrative statement ee 525

by deposition—direct (by Mr. Bates) . ee 820 529

—cross (by Mr. Hughes)...... 884 567

—redirect (by Mr. Alsup)..... 893 573

—recross (by Mr. Hughes).... 895 575

Testimony of James E. Ledgerwood

by narrative statement —.......... 897 575

Testimony of Jack Levitan

by narrative statement ......... .. 904 579

Testimony of Robert J. Logue

by narrative statement Fath, Ce TA 583

i TE RH PR RY PRES ORE ERT FB

iv INDEX

Record from the United States District Court, Southern

Distriet of California, Central Division—Continued

Transcript of proceedings, June 11, 12, 13 and 14,

1963—Continued

Testimony of Morris Maltz

by narrative statement

Testimony of George Matsumura

by narrative statement .

Testimony of Spencer L, McKernan

by narrative statement.

Volume II

by deposition—direet (by Mr. Vaughn)

—eross (by Mr. Knight)

—redirect (by Mr. Vaughn)

—reeross (by Mr. Knight)

—ryedireect (by Mr. Vaughn)

—recross (by Mr. Knight)

—redirect (by Mr. Vaughn)

Testimony of Ernest A. Mekjian

by narrative statement.

by deposition—direct (by Mr. Bates)

—ceross (by Mr. Coyle)

—redireet (by Mr. Vaughn)

—reeross (by Mr. Coyle)

Testimony of Jean H. Muntifering

by narrative statement

Testimony of Paul Palmer

by narrative statement _. A

by deposition—direct (by Mr. Alsup)

—eross (by Mr. Hughes)

—redirect (by Mr. Alsup)

Testimony of Kenneth Richey

by narrative statement . =

by deposition—direct (by Mr. Bates)

——eross (by Mr. Hughes)

—redirect (by Mr. Alsup) .

—reeross (by Mr. Hughes)

Testimony of Charles I. Rubin

by narrative statement

by deposition—direct (by Mr. Vaughn)

—eross (by Mr. Knight)

—redirect (by Mr. Vaughn)

Testimony of Frank Rush

by narrative statement

Testimony of Jack Swerdlick

by narrative statement hig

by deposition—direct (by Mr. Vaughn)

—eross (by Mr. Hughes)

NT ee

Original Print

916

922

586

Q »

Aw pe. “”

Srna.

INDEX

Record from the United States District Court, Southern

District of California, Central Division—Continued

Transcript of proceedings, June 11, 12, 13 and 14,

1963—Continued

Testimony of John Taylor

by narrative statement

by deposition—direct (by Mr. Bates)

~eross (by Mr. Knight)

—redirect (by Mr. Vaughn)

—reeross (by Mr. Knight)

—redirect (by Mr. Vaughn)

—recross (by Mr. Knight)

Testimony of Morris Wallen

by narrative statement

Testimony of Gerald D. Harrison

by affidavit

Testimony of Harrison F. Houghton

by affidavit

Plaintiff's Exhibit No. 87—Appendix—Spe-

cial Tabulation by Department of Com-

merce on Multiunit Grocery Companies in

the Los Angeles-Long Beach, California,

Standard Metropolitan Statistical Area,

compiled from returns made in the 1948,

1954 and 1958 Censuses of Business with

certificate...

Testimony of Thomas H. Linden, Sr.

by affidavit .._.. ¥

Testimony of Willard F. Mueller.

by affidavit _..

Testimony of Joseph T. De Silva

by affidavit

Plaintiff's Exhibit No. 91—Map of Los An-

geles County showing jurisdiction of Local

ree Pee ne

Testimony of John B. Marshall

by affidavit :

by deposition—direct (by Mr. Vaughn)

—¢tross (by Mr. Coyle). .

—redirect (by Mr. Vaughn)

—reeross (by Mr. Coyle) .

Opening statement on behalf of plaintiff by Mr.

Coyle .......

Opening statement on behalf of defendants sty ‘Mr,

Alsup

Colloquy between court and counsel.

Testimony of Kenneth Craun

—direct (by Mr. Coyle)

—cross (by Mr. Alsup)....

—redirect (by Mr. Coyle)

—recross (by Mr. Alsup)

Original

1331

1337

1380

1394

1419

1421

1423

1434

1436

ag WAS OAS AOD AGT BN TERI LTE DY BOSE. ELEN INGLES OIG BOLE, DY LEER CAE NS BOE

Prim

835

839

865

873

888

890

902

903

905

907

913

916

990

998

1000

1002

1044

1095

1111

1120

1129

1131

INDEX

@ vi

~ Record from the United States District Court, Southern

ia District of California, Central Division—Continued

4 Transeript of proceedings, June 11, 12, 13 and 14, .

% 1963— Continued 0 Print

“4 Testimony of Richard Dick

4 —direet (by Mr. Coyle) 1818 1132

‘ —eross (by Mr. Alsup) 1828 1138

3 redirect (by Mr. Coyle) 1s40 «144

‘ Colloquy between court and counsel 1840 1145

: Votume HI

4 Testimony of Theodore A. Von Der Ahe

; —direet (by Mr. Alsup) 1941 1199

¢ —eross (by Mr. Coyle) 2046 1258

% —redireet (by Mr. Alsup) 2137 1312

rs Colloquy between court and counsel 2148 1319

4 Testimony of Theodore A. Von Der Ahe

Ed —redireet (resumed)

(by Mr, Alsup) 2162 1325

—-reeross (by Mr. Coyle) 2192 13438

Defendants’ Exhibits

BI —Affidavit of W. D. Hayden sworn to

January 23, 1963 with List showing

Discount Houses with Food Depart-

ments, dated October 19, 1962 21992 = 1348

—Deposition of William Delbert Hayden

taken May 21, 1963 2199-1 1355

—direet (by Mr. Coyle) 2199-3 1355

—eross (by Mr. Alsup) 2199-40 1379

—redirect (by Mr. Coyle) 2199-44 1381

—reeross (by Mr. Alsup)... 2199-45 1382

—redireet (by Mr. Coyle) 2199-46 1383

Affidavit of W. D. Hayden sworn to

June 10, 1963. 2199-48 1385

AX —-Affidavits of Defendant's Industry

Witnesses Who Operate One Grocery

Store 1387

—W, H. Crawford sworn to December

24, 1962 1387

_J. R. Dahl sworn to November 6, 1962

—_Ceeil W. Dobson sworn to February 8,

1963 1390

—Reynold Elkin sworn to January 11,

1963 1396

—Joseph Goldberg sworn to February

20, 1963 1402

INDEX

Record from the United States District Court, Southern

District of California, Central Division—Continued

Transcript of proceedings, June 11, 12, 13 and 14,

1963—Continued

Defendants’ Exhibits— Continued

—Albert Goldstein sworn to February

/ Se eae ;

—Harlos Gross sworn to October 25, 1962

~—Paul A. Hines, Jr. sworn to January

10, 1963

—John H. Irwin sworn to November 9,

1962

—O. W. Richard sworn to February 14,

1963

——Mrs. Leila M. Roberts sworn to Feb-

ruary 19, 1963

—Robert Sherry sworn to December 19,

1962 . .

-—Affidavits of Defendant's Industry

Witnesses Who Operate from Two to

Nine Grocery Stores

~—Eugene Gelson sworn to January 8,

1963

—Nathan Gilbert sworn to February 18,

1963

—Mareus L. Godfrey, Jr. sworn to Jan-

uary 22, 1963

— Joe B. Goodnight sworn to October 26,

1962

~-Yoshi Tnadomi sworn to January 11,

1963 ’

—Arthur C. Jones, Jr. sworn to January

19, 1963

A. J. Miller sworn to Febzuary 19,

1963

-—-O. J. Schoen sworn to January 11,

1963

—Daniel H. Wilson sworn to January 11,

1963

—Affidavits of Defendant's Industry

Witnesses Who Operate Ten or More

Grocery Stores

—Sam Alexander sworn to October 26,

1962 . ines

—Claude W. Edwards sworn to January

1l, 1963 Pete

—Charles J. Futterman sworn to October

26, 1962 ey

—George F. Fitzpatrick (not dated)

—Joseph P. Hughes sworn to January

24, 1963

vii

ieee a ——

ES TS Sc ERISA pO LISS EOI LE ORD ES

INDEX

Record from the United States District Court, Southern

District of California, Centrai Division—Continued

Transcript of proceedings, June 11, 12, 13 and 14,

1963—Continued

Defendants’ Exhibits—Continued

—Roger Laverty, Sr. sworn to January

i” SP

—Richard Ralphs sworn to February 18,

Ne ty pig ev dv veh Rene Har eae © on

—Neal D. Ramsey sworn to October 19,

EO a Feb x avine dee

—Ted R. Wood sworn to October 25,

WN 5 ind Ma REECE

—Affidavits of Von’s Officers..........

—Charles Von Der Ahe sworn to January

i eres Pee eee eee

—W. R. Hayden sworn to February 19,

| Re ere PT er eee

—Theodore A. Von Der Ahe sworn to

February 26, 1963..............--..

Exhibit A—Table B—Analysis of

the Gross Sales of Grocery Stores

with Estimated Annual Sales of

Less than $500,000 that Opened in

1960 and Closed by November 15,

1961, the Los Angeles Metropoli-

tan Area, Dated April 6, 1962...

—Deposition of Theodore A. Von Der

Ahe taken May 23, 1963

—direet (by Mr. Coyle)...

~-eross (by Mr. Alsup).....

—redirect (by Mr. Coyle).

—recross (by Mr. Alsup)....

—redirect (by Mr. Coyle)...

—reeross (by Mr. Alsup)...

—redirect (by Mr. Coyle). .

—reeross (by Mr. Alsup).

—redirect (by Mr. Coyle)

Von Der Ahe Exhibits

No. 1—Artiele from the January 12,

1962 Commercial Bulletin

No. 2—Article from the Food Mart

News for February 17, 1961.......

No. 3—Clipping from the Southern

California Grocers Journal for Au-

gust 25, 1961 and Clipping from

the Commercial Bulletin for August

| epee sere ee

No. 4—Clipping from the Commer-

cial Bulletin for October 6, 1961...

EESTI ELIE TOE amc

Original

1487

1491

1492

1495

1500

1506

1515

1547

1548

1565

1571

1574

1577

1579

1581

1582

1585

1586

1587

1588

—

INDEX ix

Record from the United States District Court, Southern

District of California, Central Division—Continued

Transcript of proceedings, June 11, 12, 13 and 14,

1963—Continued

Defendants’ Exhibits—Continued Original Print

Von Der Ahe Exhibits—Continued

No. 5—Article from Food Merchan-

dising for April 1962 entitled “Price

Reduction Only Stopgap Measure” 62 1589

No. 6—Article from the Commercial

Bulletin for February 16, 1962 _.. 63 1590

No. 7—Clipping from the Commer-

cial Bulletin for March 29, 1963 en-

titled “Southern California Discount

Centers” (Volume General Stores

with Food Departments)... ___. 64 1591

BB —Affidavits of Defendants’ Other Indus-

Oe WR ee 1593

—dJohn Coker sworn to February 13,

BT otek tess va ss. 1593

—Charles Chamberlain sworn to Febru-

SR aaa 1596

—Cyril C. Nigg sworn to February 11,

, SEE Ae eens eae 1602

—Edward F. Pasini sworn to December

S.A Seite 4a ee 1604

—Campbell Stewart sworn to December

Ae ae nia i are 1641

—Thomas H. Linden, Sr. sworn to Feb-

on ee. Ser Desor 1646

—M. W. Engleman sworn to February

WL ESS cigs ok pe een at 1649

—Clive W. Johnson sworn to January

Ra re eS 1651

—Howard Kruger sworn to October 31,

a ET OIE SE RTS 1653

—Franklin L. Miller sworn to October

Me ES eRe LL, 1654

BC —Affidavit of William Dover sworn to

February 21, 1963.................. 1660

BD —Affidavit of Dorothy D. Corey sworn

to October 22, 1962................ 1662

Attachment—Los Angeles Times “Con-

tinuing Home Audit—Grocery Pur-

EE ks he cate re. 1671

—Deposition of Dorothy D. Corey taken

May 22, 1963 and May 24, 1963

—direct (by Mr. Coyle)... _. 3 1673

—cross (Mr. Vaughn)... 67 1714

—redireet (by Mr. Coyle). .__. 74 1718

x INDEX

Record from the United States District Court, Southern

District of California, Central Division—Continued

Transcript of proceedings, June 11, 12, 13 and 14,

1963—Continued

Defendants’ Exhibits—Continued

Cory Exhibits

No. 1—Document entitled “Monthly

News Letter Prepared for Western

Advertising by Facts Consolidated”

BE —Affidavit of Victor Hinson sworn to

October 22, 1962........------- 5-5)

BF —Affidavit of Roy L. Bouque sworn to

April 17, 1963 with Appendices I

MON Be ne nea baer karen ee eet eet?

Volume IV

—Deposition of Roy Lawrence Bouque

taken May 28, 1963 and June 4, 1963

—direct (by Mr. Coyle).....-.

—eross (by Mr. Vaughn)... .

—redirect (by Mr. Coyle)... .-.

Bouque Exhibit No. 1—Table show-

ing “Total Grocery Store Sales and

Food Store Sales for each of the

years 1950 through 1960 in the Los

Angeles Metropolitan pO eee

BH —Affidavit of Godfrey M. Lebhar sworn

to October 11, 1962..........-------

—Deposition of Godfrey M. Lebhar taken

May 16, 1963...........-------+ ++:

—direet (by Mr. Coyle).......

—eross (by Mr. Vaughn)...

—redirect (by Mr. Coyle)... ..

—recross (by Mr. Vaughn)... .

Transcript of proceedings, June ie Se

Defendants rest..........0.:.cee reece’

Defendants’ Exhibit

BB —Affidavit of Roy King sworn to Octo-

"ee renee

—Deposition of Roy King taken on May

GO, MOOD. oe oo cn ce sin peeves s+ ' >

—direct (by Mr. Hughes).....

—eross (by Mr. Alsup)....-.-

—redirect (by Mr. Hughes)...

—recross (by Mr. Alsup).....

Original

132

1806

1889

1892

1894

1895

1902

1937

1938

1944

1946

1947

1952

1969

1977

1978

ees rd Lied aan a sins Tae SE aa ee et al .

NAWETERT SESE FAM Mi GES ES SSPE IN IIIS PRIN RI TARY lg NE OR ONIN eR .

5 TSP OS EOP EIS EN OMIT NG SIRE ESTE MENS Ey, CREDIT CAAT Se

INDEX

Record from the United States District Court, Southern

District of California, Central Division—Continued

Transcript of proceedings, June 14, 1963—Continued

Defendants’ Exhibits—Continued Original

King Exhibits

No. 1—Article from magazine, Food

Topics, pages 34 & 35—entitled

“Host of Chains, Independents

Thrive in Cooperative-Led City”. .

No. 2—Article from magazine, Su-

permarket News, dated October 22,

PO eS pice ed ais bY) 5 HEN Os thats

No. 3—Article from magazine, Su-

permarket News, dated October 15,

ee i uaed (abe Vibe sabes nis.

| No. 4—Article from magazine, Su-

permarket News, dated May 6, 1963

Transcript of proceedings, June 14, 1963......___.. 2294

Testimony of William F. Brown

—direct (by Mr. Coyle)... . 2295

—cross (by Mr. Vaughn)..... 2308

Examination by court....__. . 2310

—cross (by Mr. Vaughn)..... 2315

Examination by court... _. ... 2326

—redirect (by Mr. Coyle). ... 2329

Examination by court....__. . 2330

Colloquy between court and counsel.......__.. 2345

Rebuttal testimony of Ward J. Jenssen

—direct (by Mr. Coyle)... 2363

—cross (by Mr. Alsup)....... 2396

Surrebuttal testimony of Theodore A. Von Der

Ahe (recalled) —direct (by Mr. Alsup)..... 2440

—cross (by Mr. Coyle)... ._. 2451

I in BSF ate wane Sed ce 2458

Colloquy between court and counsel... 2459

Transeript of proceedings March 23 and 24, 1964. . 2467

INS Gds Maier bac. Was soar ok 2470

SY MONI Fo ac, Shite Siva Ale 2471

Stipulation signed by court................_.. 2472

Argument on behalf of the Government re issues 2473

Argument on behalf of the defendants... _ 2537

Argument on behalf of the Government... __ 2558

Argument on behalf of the defendants ss _—_ 2701

Argunent ©) Lehalf of the Government......._—- 2748

Argument on behel! of the defendants _ v. Bes

xl INDEX

Record from the United States District Court, Southern

Transcript of proceedings, December 7 and 8, 1964.. 2756

Colloquy between court and Ae eee 2759

Argument re findings.......--.----.2-ss0 00> 2768

Reporter’s certificate (omitted in printing)........- 2849

Plaintiff’s request for findings of fact and conclusions

ee ts eee i i eee eet ee eee ee

Government’s memorandum on the issues presented

(omitted in printing)... ....-----. 622s

Volume V

Appendix—Chronology of the See

Stipulation after trial ordered March 23, 1964......

Plaintiff’s Exhibits

No. 1—List of “The 20 Largest Grocery Chains

in the Los Angeles Metropolitan Area Ranked

According to Sales in 1958”............ Ties

No. 2—Statement showing “Comparison of Popu-

lation of Los Angeles Metropolitan Area and

10 Leading States in the United States”)

No. 3—Statement showing “Comparison of; Popu-

lation of Los Angeles Metropolitan Aréa with

11 States and the District of Columbia”... ..

No. 4—Statement showing “Position of Von and

Shopping Bag Among the Ten Largest Grocery

Chains in the Los Angeles Metropolitan Area”

No. 5—Statement of “Pre-Merger Growth (1954-

1958) of Von and Shopping Bag Within the

Los Angeles Metropolitan Area”.............

No. 6—Statement showing “Changes in Concen-

tration in 20 Largest Chains in the Los Angeles

Metropolitan Area 1948, 1954 and 1958”.

No. 7—Graph showing “Changes in Concentration

in 4, 8, 12, 16 and 20 Largest Grocery Chains

in Los Angeles Metropolitan Area”..........

No. 8—Graph showing “Concentration in 4, 8, 12,

16 and 20 Largest Grocery Chains in Los An-

geles Metropolitan Area Before and After Von’s

Shopping Bag Merger, Based on 1958 Sales”. .

No. 9—Supplemental Interrogatory No. 8 and

Answer BPE fear

No. 10—Supplementa! Interrogatory No. 9 and

De EEE PLIES PEL ELE E RULER EE

No. 11—Admissions in Deposition of Theodore A.

Von Der Ahe, President of Von’s Grocery Com-

pany, on May 4,1961........ 0.0.0.0...

No. 12—Defendants’ Answer to Plaintiff's Inter-

rogatory No. 7B(2)

District of California, Central Division—Continued Original

2323

2324

2328

2329

2330

2331

2332

2333

2338

2344

2346

‘

+ Neg hit RAMP PL ESA GRINS ER RHE YD IAT NMR A RIOR SRR a ts RES RIES ARGS SHEE OT IRE OA IE p

sit a SERRA RAR TERT. ESE |

—

INDEX

Record from the United States District Court, Southern

District of California, Centrai Division--Continued

Plaintiff’s Exhibits—Continued

No. 13—Supplemental Interrogatory No. 5 and

MN so eaten NG cat eke ea

No. 18—Admission in Deposition of Theodore A.

Von Der Ahe, President of Von’s Grocery Com-

Hayden, Former President of Shopping Bag

the Year Ended (?)” Years 1957, 1958 and

NG St WO OR

eo AER EER T ES

Original

2357

2360

2363

2367

2369

2377

2379

2382

2385

2398

2401

2402

2403

2407

2409

xiv

INDEX

Record from the United States Distriet Court, Southern

District of California, Central Division—Continued

Plaintiff's Exhibits—Continued

No. 34—Table showing “Number of Grocery

Stores, Actual and Per 1,000 Population—Los

Angeles Metropolitan Area, 1950-1961”.......

No. 35—Table showing “Comparison Between the

Permits Issued to Single Outlet and Multiple

Outlet Grocery Stores in the Period 1961-1963”

No. 36—Statement showing “Grocery Store Open-

ings and Closings in the Los Angeles Metropoli-

tan Area for the Calendar Year a

No. 37—Statement showing “Frequency Distribu-

tion of Gross Sales of Grocery Stores Obtaining

Permits in the Los Angeles Metropolitan Area

for the Calendar Year 1960”..........-.---)-

No. 38—Statement showing “Analysis of the

Gross Sales of The Grocery Stores Obtaining

Permits in 1960 and Discontinuing Such Per-

mits by November 15, 1961 in the Los Angeles

Metropolitan Area”.......---- 65-502

No. 39—Statement showing “Frequeacy Distribu-

tion of Gross Annual Sales of Grocery Stores

Obtaining Permits in 1960 and Discontinuing

Permits by November 15, 1961 in the Los An-

geles Metropolitan Area”.......--.--- a

No. 40—Statement showing “Frequency Distribu-

tion of Grocery Stores Obtaining Permits in

1960 and Discontinuing Permits by November

15, 1961 in the Los Angeles Metropolitan Area”

No. 41—Statement showing “Grocery Stores

Which Obtained Permits in 1960 and which

still retained their permits as of November 15,

1961 expressed as percentages of all permits

issued within specified categories”...

No. 42—Statement showing “Grocery Stores Ob-

taining Permits in 1960 and Discontinuing Per-

mits by November 15, 1961 in the Los Angeles

Metropolitan Area”... ...0 2-0-0

No. 43—Statement showing “Estimated Annual

Sales of Grocery Stores Opened in the Los An-

geles Metropolitan Area in 1960 Expressed in

Thousands of Dollars and showing Percentage

Distribution” ...........-----0e seers ae

No. 44-—Statemeni showing “Retail Food Store

Acquisitions of 9 of the Top 20 Grocery Chains

in the Los Angeles Metropolitan Area 1949-

1958” . ny.

J AOLELO HEME IAS _ “

Original Print

2411

ep es

2412

2413

2414

2415

2416

2417

2418

—,

INDEX

Record from the United States District Court, Southern

District of California, Central Division—Continued

Plaintiff's Exhibits—Continued

Grocery Co. and Shopping Bag Food Stores,

dated January 25,1960... ....s—«™

No. 48—Von’s Grocery Co.—Notice of Special

Meeting of Stockholders, March Aly IOOO. os.

No. 49—10-page undated memo entitled “Exeerpts

from J. C. Ball’s Working 5 eee

No. 50—Statement showing “Projected 1960 Net

Income Resulting from Combined Operations”,

No. 57—Letter from Don Bushmeyer, Mgr., to

Mr. W. R. Hayden, dated September 29, 1959

No. 61—Agenda, Executive Meeting—No. 2,

March 15, 1960 S

No. 62—Special Memo, dated March 17, 1960

from H. G. Ward and N. H. Bolstad to G.

Carter, et al. ;

No. 63—Minutes of Executive Committee Meet-

ing, Von’s Grocery Co., March 29, 1960...

Original

. SHEE

| ee RELLY POMEL ET NERO OG ,

xvi INDEX

Record from the United States District Court, Southern

District of California, Central Division—Continued

Plaintiff’s Exhibits—Continued

No. 64—Interrogatory No. 11 and Answer with

Exhibits A, Band C......-.----- 0

No. 65—Interrogatory No. 2 and Answer (As

Mim eda a heise RR ENS HOR RENO TESS

No. 66—14 pages of handwritten notes entitled

“Von’s Survey Shopping Bag by Division

Heads, December 19, 1959”.....-

No. 67—Admissions in Deposition of Theodore A.

Von Der Ahe on May 4, 1961.....---

No. 68—Admissions in Deposition of William R.

Hayden, Former President of Shopping Bag

Food Stores, on May 12, 1960.........--

No. 69—Admissions in Deposition of Theodore A.

Von Der Ahe, President of Von’s Grocery Com-

pany, on May 4, ME ck uae beumereenet ys

No. 70—Admissions in Deposition of Theodore A.

Von Der Ahe, President of Von’s Grocery Com-

pany, on May 12, 1960........--. Be Dalene

No. 71—Admissions in Deposition of Theodore A.

Von Der Ahe, President of Von’s Grocery Com-

pany, on May TS” eae ee

No. 73—Application for Seller’s Permit and

Registration as & Retailer and Department of

Employment Registration as an Employer,

State of California Board of Equalization,

Department of Business Taxes—Sales Tax for

Mr. Charles B. Doss, Los Angeles, California. .

No. 74—Table 3—Comparison of Chains of Less

than Ten Stores with Chains of Ten or More

Stores in Terms of Total Number of Stores

Operated and Percentage of all Chain Stores

for the Years 1953 and 1962”..........---

No. 75—Table 4—“Comparison in Number of

Grocery Stores and Percentages of all Grocery

Stores in the Los Angeles Metropolitan Area

Between the 40 Chains with the Most Stores in

1953 and the 24 Chains with the Most Stores in

WEP LD us axas sb bp ta chee emen ys ess ts *

No. 76—Table 5—“Number of Grocery Stores

Operated by Chains Expressed as a Percentage

of All Grocery Chains Operated in the Los An-

geles Metropolitan Area in 1953 and 1962”... .

No. 77—Table 6—‘“Chains Operating in the Los

Angeles Metropolitan Area in the Period 1953-

Sc ag pee pede haves een snmens shes

Original

2496

2499

INDEX xvii

Record from the United States District Court, Southern

; District of California, Central Division—Continued

f Plaintiff's Exhibits—Continued Original Print

i No. 78—Table entitled “Food Chains Operating 2

) or More Stores in Los Angeles and Orange

: Counties in 1953 and 1962, with Changes in

Intermediate Years......................... 2503

Grocery Stores and Shopping Bag Food Stores,

WS ickbd pind ie bokeh ss catches ck. 2517

) No. 80—Sales & Marketing Map—Los Angeles

Metropolitan Area showing location of Von's

Grocery Stores and Shopping Bag Food Stores,

M5 Go ly giver ue ae,

Grocery Stores and Shopping Bag Food Stores,

BOE Sika wchbecoiie, deetiaaetl ek.

WEED \arkhharr aed incase resin nck i.

No. 83—Overlay map showing population of Los

Angeles and Selected Southern California Coun-

ties 1960—Each dot represents 1,000 persons. .

Defendants’ Exhibits

A—Letter from John B. Marshall to Mr. William

W. Vaughn, dated May 16, 1961 with table en-

titled “Number of Permits to Sell Tangible Per-

sonal Property Issued to Grocery Stores and

Other Food Stores in Los Angeles and Orange

Counting, SUPINE)...

_— ae EEE REE ig Ke ie Cs alia oe

| Seas SAPO ARES AINA THY I OE EE EMIT —

xvili INDEX

Record from the United States Distriet Court, Southern

District of California, Central Division—Continued

Defendants’ Exhibits—Continued Original

F—Table A—Names and Addresses of Grocery

Stores of Multiple-Outlet Concerns in the Los

Angeles Metropolitan Area that were Closed

Out (Discontinued Without a Successor) Dur-

ine 10GB. ice eccrenscnescrerccenarareen ss

—Table A—Names and Addresses of Independ-

ent Grocery Stores in the Los Angeles Metro-

politan Area that were Closed (Discontinued

Without a Successor) During 1960.........

—Table B—Names and Addresses of Grocery

Stores of Multiple-Outlet Concerns in t!. Los

Angeles Metropolitan Area Opened in 1960 and

Closed by November 15, 1961..........--. +.

—Table B—Names and Addresses of Independ-

ent Grocery Stores in the Los Angeles Metro-

politan Area Opened in 1960 and Closed by

November 15, 1961..........--.0 0 reer eeees 2537

J—Report entitled “Record of Chain Grocery

Store Locations in the Los Angeles Market

[re Ty. Ser a) bag bbe ALS, 2539

trial Manual (1962) and Supplement thereto. . 2568

dated December, 1959........-...- +5 550505 2574

S—Map Overlay Study for Von’s Grocery Com-

pany, October 1955—A Report prepared by

Facts Consolidated in October, 1955, showing

the Limited Radius of the Drawing Areas of

Each of Von’s Stores ........-------+++-+: 2623

AA—Series of Lists entitled, “Names and Ad-

dresses of Customers Cashing Checks at Store

Number ——” 2631

Volume VI

AF—Report entitled “A Group of Supermarket

Chains in the Los Angeles, California Area.

A Report prepared by a Representative of the

Kroger Company in August, 1957, Analyzing

the Von’s and Shopping Bag Stores and the

Competition Each Faces in Its Particular Lo-

eality ee 2747

SLOANE OU RE MEY CRY ey?

INDEX xix

Record from the United States District Court, Southern

District of California, Central Division—Continued

Defendants’ Exhibits—Continued Original

Memorandum opinion, Carr, J., dated September 14,

te: SE EIEN GATE

December 17, 1964.....__.

WO F000 eke oe

~ 2 >

MB I GH 5<92- LONE ARTANT 5 TEL LRSELE, AE —

xx INDEX

Record from the United States District Court, Southern

District of California, Central Division—Continued Original Print

Motion under Rule 52(b) for Amendment of Findings

and for Additional Findings... Cae

Minute entry of order denying motion under Rule

52(b) x hf

Notice of appeal to the Supreme Court of the United

States ... aes oi ) \,

Order extending time for docketing case on appeal

to the Supreme Court of the United States

Stipulation regarding the record on appeal, dated

June 18, 1965... Eye rs ald

Order extending time in which to docket the case and file

the record in the Supreme Court of the United States,

dated June 14, 1965

Order noting probable jurisdiction

ee ee

¢ ar mre ary ts" Roa hana ete

vA eps

[File endorsement omitted]

IN THE UNITED STATES DISTRICT COURT,

SOUTHERN DISTRICT OF CALIFORNIA,

CENTRAL DIVISION

Civil No, 336-60-WM

Unirep States or America, Plaintiff,

Von's Grocery Company anv Suoppina Bac Foop Stores,

Defendants.

CompLaint—Filed March 25, 1960

The United States of America, plaintiff, by its attorneys,

acting under the direction of the Attorney General of the

United States, brings this Civil Action to obtain equitable

relief against the above-named defendants and complains

and alleges as follows:

Jurisdiction and Venue

1. This complaint is filed and this action instituted against

the defendants under Section 15 of the Act of Congress of

October 15, 1914, ¢. 323, 38 Stat. 736, as amended by the

Act of December 29, 1950, e. 1184, 64 Stat. 1125, entitled

‘*‘An Act to supplement existing laws against unlawful re-

straints and monopolies and for other purposes,’’ commonly

known as the Clayton Act, in order to prevent and restrain

the violation by the defendants, as hereinafter alleged, of

Section 7 of said Act.

2. Both defendants transact business and are found with-

in the Southern District of California.

Defendants

3. Von's Grocery Company, hereinafter referred to as

‘*Von,"’ is made a defendant herein. Von, a corporation

organized and existing under the laws of the State of Dela-

ware, maintains its principal offices in Los Angeles, Cali-

fornia,

ec ETRE hd OB » mer)

: 7

4. Shopping Bag Food Stores, hereinafter referred to as

‘Shopping Bag,”’ is made a defendant herein. Shopping

Bag, a corporation organized and existing under the laws

of the State of California, maintains its principal offices

in El Monte, California.

Trade and Commerce

5. There is a steady stream of commerce involved in the

distribution of groceries and related products from pro-

ducers located throughout the United States to consumers

residing in the Los Angeles marketing area. Chains of

supermarkets have become important factors in this flow

of commerce. Such chains operate purchasing offices which

are in contact with suppliers located throughout the United

States to purchase and effect the shipment of substantial

quantities of groceries and related products from producing

facilities located in the various States to the chains’ distri-

bution centers and supermarkets in the Los Angeles area.

Products shipped to the chains’ distribution centers con-

tinue in the flow of commerce in trucks owned and operated

by the chains to their supermarkets for distribution to the

ultimate consumer.

6. In 1958 20 leadiny chains of supermarkets operating

in the Los Angeles area purchased, distributed and sold

groceries and related products having a retail value in

excess of $1.1 billion and accounted for more than 50% of

all grocery sales in the area. These chains competed in-

tensively with each other and with other corporations and

firms engaged in the purchase, distribution and sale of

groceries and related products in the Los Angeles area.

7. Von is one of the leading chains of supermarkets in

the Los Angeles area. It was incorporated in Delaware in

1958 and is the successor of incorporated and unincorpo-

rated business entities which have been engaged in the pur-

chase, distribution and sale of a complete line of groceries

and related products since 1932.

8. In the 1959 fiseal year Von operated 28 complete super-

markets in the Los Angeles area which had total annual

sales of more than $85 million. All of Von’s supermarkets

are of the self-service, eash-and-carry type. The average

annual sales of these supermarkets are in excess of $3 mil-

lion per store.

Sey: dnbaneanicians ean epceana ame TL eae

RELL ESA EIEIO LIA RS

. BE Ee ae STIS I LE dE

9. Von also owns and operates a modern distribution

center in a 216,000 square foot building located on a 20-acre

tract of land in the Los Angeles area. This distribution

center provides facilities to receive and re-ship groceries

and related products to Von’s supermarkets throughout the

Los Angeles area. Von owns and operates approximately

33 tractors and 39 trailers which it uses for transporting

merchandise from the distribution center to its various su-

permarkets. In the course of its business Von purchases,

receives and distributes for re-sale in its supermarkets a

substantial volume of groceries and related products which

are produced outside the State of California.

10. Shopping Bag is also one of the leading chains of

supermarkets in the Los Angeles area. It has operated un-

der its present name since 1947, and is the successor to

incorporated and unincorporated business entities which

have been engaged in the purchase, distribution and sale

of a complete line of groceries and related products in the

Los Angeles area since 1933. In the 1959 fiscal year Shop-

ping Bag operated 38 complete supermarkets in the Los

Angeles area which had total annual sales of over $84 mil-

lion. All of Shopping Bag’s supermarkets are of the self-

service, cash-and-carry type. The average annual sales of

these supermarkets are more than $2.1 million per store.

11. Shopping Bag also operates a substantial distribution

center to receive and re-ship groceries and related products

to its supermarkets. To facilitate distribution through its

supermarkets of the products received at its distribution

center, Shopping Bag owns and operates a fleet of trucks,

trailers and automobiles comprising about 166 units in all.

In the course of its business Shopping Bag purchases, re-

ceives and distributes for re-sale in its supermarkets a sub-

stantial volume of groceries and related products which are

produced outside the State of California.

12. In dollar sales Von was the third largest retailer of

groceries and related products in the Los Angeles area and

| Shopping Bag was the fifth largest in 1958. In terms of the

| total number of markets operated, Shopping Bag was the

sixth largest and Von was eighth largest. Combined, Von

and Shopping Bag, with approximately 8% of total grocery

store sales, will be the second largest chain of supermarkets

ie |

ONES

in the Los Angeles area in terms of dollar sales and number

of supermarkets.

Offense Charged

13. Under a merger agreement between Von and Shop-

ping Bag, dated January 25, 1960, and effective March 28,

1960, all assets and properties of Shopping Bag will be

transferred to Von and all outstanding Shopping Bag

stock will be converted into Von common stock. This acqui-

sition by Von of Shopping Bag’s assets and properties will

violate Section 7 of the Clayton Act in that the effect, with

respect to the above-described trade and commerce, may be

substantially to lessen competition or to tend to create a

monopoly, among other ways, as follows:

(a) Actual and potential competition between Von

and Shopping Bag in the purchase, distribution and

sale of groceries and related products may be elimi-

nated.

(b) Actual and potential competition generally in the

purchase, distribution and sale of groceries and related

products may be substantially lessened.

tial independent competitive factor in the purchase,

distribution and sale of groceries and related products.

(d) Von’s competitive advantages over smaller sell-

ers of groceries and related products may be enhanced

to the detriment of actual and potential competition.

(e) Independent retailers of groceries and related

products may be deprived of a fair opportunity to com-

pete with the combined resources of Von and Shopping

Bag.

(f) The number of competing entities in the Los

Angeles area available to producers and wholesalers

of groceries and related products will be lessened.

(g) Mergers and acquisition on the part of other

chains of supermarkets in the Los Angeles area may

be fostered, thus causing a further substantial lessen-

ing of competition and tendency toward monopoly in

the trade and commerce heretofore described.

(h) Concentration of ownership, management, and

control of supermarkets in a few large corporations

may be increased.

1S ARTT AE APTA SEERA ET EN PAIN RI IRE AR IST EI

—

14. Defendants threaten to carry out the above-described

Merger Agreement and plaintiff believes it will be carried

out and that it will have continuous unlawful effects unless

the relief hereinafter prayed for is granted.

Prayer

Wherefore, plaintiff prays:

1. That the proposed acquisition by Von of the properties

and assets of Shopping Bag, described herein, be adjudged

a violation of Section 7 of the Clayton Act.

2. That the defendants Von and Shopping Bag, their offi-

ants preventing and restraining them from taking any ac-

tion in furtherance of the Merger Agreement or any similar

plan or agreement pending final adjudication of the merits

of this complaint.

4. That plaintiff have such other and further relief as

the Court may deem just and proper.

5. That plaintiff recover the costs of this suit.

/s/ William P. Rogers, Attorney General. /s8/ Rob-

ert A. Bicks, Acting Assistant Attorney General.

/s/ Charles L. Whittinghill, Attorney, Department

of Justice. /s/ George B. Haddock, Attorney, De-

partment of Justice. /s/ Laughlin BE. Waters,

United States Attorney. /s/ James J. Coyle, /s/

Theodore F. Craver, Attorneys, Department of

Justice.

[File endorsement omitted]

Ix tHe Unrrep States District Court

Civil No. 336-60 WM

[Title omitted]

Answer To CompLaint—Filed April 14, 1960

5. Admits the allegations contained in Paragraph 5

thereof.

James E. Bates and O’Melveny & Myers, Edward

C. Freutel, Jr., William W. Alsup, William W.

Vaughn, Richard EK. Sherwood, /s/ by William

W. Alsup, Attorneys for Defendant, Von’s Gro-

cery Co.

[File endorsement omitted]

In toe Unirep States Disraict CouRT

Civil No. 336-60 WM

[Title omitted]

Orpver ALLow1nG DEFENDANT Leave To FILE AN AMENDED

Answer—February 7, 1961

Good Cause Appearing Therefor, It Is Hereby Ordered

that defendant may have leave to file an amended answer

to the plaintiff’s complaint herein. Said amended answer

shall be in all respects the same as defendant’s answer now

on file except that Paragraph 5 shall be changed to read

as follows: ,

‘«5, Denies each and every allegation contained in Para-

graph 5 thereof, except admits that some of the products

sold in retail grocery stores in the Los Angeles area are

produced or manufactured outside the State of California.

Some such products are sold directly by the producer or

manufacturer thereof to grocery companies which operate

retail grocery stores in the Los Angeles area, and some

are sold to said grocery companies by and through brokers,

jobbers, wholesalers or wholesale cooperatives located in

the State of California, after the same have been shipped

to California. Such products are usually retained for a

period of time in warehouses or distribution centers main-

tained by said grocery companies or by said brokers, job-

bers, wholesalers or wholesale cooperatives, as the case

may be, before being shipped by truck to the retail stores

owned or operated by said grocery companies. _

“Alleges in that connection that the retail sale of gro-

ceries and related products in the Los Angeles Metropoli-

tan Area by said grocery companies and specifically by

defendant to the public is entirely local in character and

is not a part of any stream or flow of commerce, is not in

interstate commerce and is not part of nor is it itself a line

of commerce within the meaning or scope of Section 7 of

the Clayton Act.

‘‘Alleges further that the purchase of groceries and re-

lated products by said grocery companies and specifically

by defendant from business concerns or persons who pro-

duce, manufacture or warehouse said products in the State

of California is likewise local in character and is not a

part of any stream or flow of commerce, is not in inter-

state commerce and is not part of nor is it itself a line of

commerce within the meaning or scope of Section 7 of the

Clayton Act.’’

Dated: February 7, 1961.

Wm. C. Mathes, Judge. .

[File endorsement omitted]

Ix tHE Unrrep States District Court

Civil No. 336-60 WM

[Title omitted]

AmeENDED ANSWER TO Computaint—Filed February 7, 1961

Von’s Grocery Co. (sued herein as ‘‘Von’s Grocery Com-

pany and Shopping Bag Food Stores’’ and hereinafter

referred to as ‘‘Von’s’’) for answer to the complaint here-

in admits, denies and alleges as follows:

First Defense

1. Admits the allegations contained in Paragraph 1

thereof, except denies that this defendant has violated

Section 7 of the Clayton Act either as alleged, or other-

wise, or at all.

9. Answering Paragraph 2 thereof, this defendant ad-

mits that as of March 25, 1960 both Von’s and Shopping

Bag Food Stores transacted business end were found with-

in the Southern District of California, but alleges that on

March 28, 1960 the defendant Shopping Bag Food Stores

was merged into Von’s and the separate corporate exist-

ence of Shopping Bag Food Stores ceased and terminated

on March 28, 1960.

3. Admits the allegations contained in Paragraph 3

thereof.

4. Admits that the allegations contained in Paragraph 4

were correct as of the date the complaint was filed, but

alleges that on March 28, 1960 said defendant Shopping

Bag Food Stores was merged into Von’s and the separate

corporate existence of Shopping Bag Food Stores ceased

and terminated on that date.

5. Denies each and every allegation contained in Para-

graph 5 thereof, except admits that some of the products

sold in retail grocery stores in the Los Angeles area are

produced or manufactured outside the State of California.

Some such products are sold directly by the producer or

manufacturer thereof to grocery companies which operate

REPO DEPRES LNG LEAS oO GRE CERES: cars

: ee mF Bi hdd EO AR Te SE ie i

-_ oe

retail grocery stores in the Los Angeles area, and some are

sold to said grocery companies by and through brokers,

jobbers, wholesalers or wholesale cooperatives located in

the State of California, after the same have been shipped

to California. Such products are usually retained for a

period of time in warehouses or distribution centers main-

tained by said grocery companies or by said brokers, job-

bers, wholesalers or wholesale cooperatives, as the case

may be, before being shipped by truck to the retail stores

owned or operated by said grocery companies.

Alleges in that connection that the retail sale of groceries

and related products in the Los Angeles Metropolitan Area

by said grocery companies and specifically by defendant

to the public is entirely local in character and is not a part

of any stream or flow of commerce, is not in interstate

commerce, and is not part of nor is it itself a line of com-

merce within the meaning or scope of Section 7 of the

Clayton /.ct.

Alleges further that the purchase of groceries and re-

lated products by said grocery companies and specifically

by defendant from business concerns or persons who pro-

duce, manufacture or warehouse said products in the State

of California is likewise local in character and is not a

part of any stream or flow of commerce, is not in inter-

state commerce, and is not part of nor is it itself a line

of commerce within the meaning or scope of Section 7 of

the Clayton Act.

6. This defendant is without knowledge or information

sufficient to form a belief as to the truth of the allegations

contained in Paragraph 6 thereof, except that it believes

the figures contained therein are generaily accurate, and

it admits that said chains competed intensively with each

other and with other corporations and firms engaged in

the sale of groceries and related products in the Los An-

geles area.

7. Admits the allegations contained in Paragraph 7

thereof.

8. Admits the allegations contained in Paragraph 8

thereof.

9. Admits the allegations contained in Paragraph 9

thereof.

10. Admits the allegations contained in Paragraph 10

thereof were accurate as of the date the complaint herein

was filed, but alleges that on March 28, 1960 said defendant

Shopping Bag Food Stores was merged into Von's and

the separate corporate existence of Shopping Bag Food

Stores ceased and terminated on that date.

11. Admits the allegations contained in Paragrapb 11

thereof were accurate as of the date the complaint herein

was filed, but alleges that on March 28, 1960 said defendant

Shopping Bag Food Stores was merged into Von's and the

separate corporate existence of Shopping Bag Food Stores

ceased and terminated on that date.

12. This defendant is without knowledge or information

sufficient to form a belief as to the truth of the allegations

contained in Paragraph 12 thereof, except that it believes

the figures contained therein are generally accurate.

13. Denies each and every allegation contained in Para-

graph 13 thereof, except admits and alleges as follows:

(a) Admits and alleges that under a merger agree-

ment between Von's and Shopping Bag Food Stores

dated January 25, 1960 and effective March 28, 1960,

all assets and properties of Shopping Bag Food Stores

were transferred to Von’s, and all outstanding Shop-

ping Bag Food Stores stock was converted into Von’s

common stock.

(b) Alleges that prior to said merger there was no

actual or potential substantial or other competition

between Von’s and Shopping Bag Food Stores in the

purchase or distribution of groceries and related prod-

ucts; that as between the great majority of the Von's

and Shopping Bag Food Stores markets there was no

competition, and with respect to none of said -Von's

markets was there any actual or potential substantial

competition with any Shopping Bag Food Stores mar-

ket in the sale of groceries and related products; that

except as to a few locations the Von’s and the former

Shopping Bag markets did not draw patrons from the

same neighborhood; that as to the few locations re-

ferred to the trading areas of the respective grocery

stores do not overlap to any substantial degree.

result of said merger has been eliminated as a separate

entity, but in this connection alleges that the former

ESE fe OA Ack EIS NE SR RR —

CSE REET SS SPOON ATE Se OI

Shopping Bag markets will continue to operate and

to compete; that there remain 38 chains of super-

markets and approximately 4,500 additional independ-

ent markets and supermarkets doing business in the

Los Angeles Metropolitan Area; that there is and has

been and wi!l continue to be vigorous competition in

the said metropolitan area between the stores of each

of said chains and independent markets in the neigh-

borhoods from which they draw customers; that com-

petition will not be substantially lessened or affected

adversely as a result of said merger.

(d) Alleges that Von's will not as a result of said

merger gain a competitive advantage over independent

or smaller sellers of groceries and related products ;

that a substantial majority of said sellers in the Los

Angeles Metropolitan Area are members of one or

more wholesale cooperatives; that by virtue of such

membership said independent and smaller sellers are

able to compete effectively with the grocery stores of

the larger chains.

(e) Alleges that the merger of Von’s and Shopping

Bag Food Stores will not and cannot substantially or

ciherwise lessen competition or tend to create a mo-

nopoly in the purchase, distribution of sale of groceries

or related products in the Los Angeles Metropolitan

Area or elsewhere.

14. Answering Paragraph 14 thereof, alleges that said

merger agreement was carried out on March 28, 1960 and

denies that said merger has or will have continuous or any

other unlawful effects.

Second Defense

15. Safeway Stores, Inc. is the largest grocery chain in

the Los Angeles Metropolitan Area both in number of

stores and in percentage of total sales of grocery and

related products. Said Safeway Stores, Inc. does business

in many states of the United States and has total annual

sales in excess of $2,000,000,000 and it has total assets in

excess of $400,000,000.

16. By reason of said merger Von's will be better able

to compete with Safeway Stores, Ine.

Wherefore, defendant prays that plaintiff take nothing

herein.

Dated: February —, 1961.

James E. Bates and O’Melveny & Myers, Edward

C. Freutel, Jr. William W. Alsup, William W.

Vaughn, Richard K. Sherwood. /s/ by William

W. Vaughn, Attorneys for Defendant, Von’s Gro-

cery Co.

[File endorsement omitted]

Iw tee Unrrep States District Court

Civil No. 336-60 CC

[Title omitted]

Pre-TriaL Conrerence Orper April 24, 1961 [As AmEnveD]

—June 17, 1963

Following pre-trial proceedings under Rule 16 of the Fed-

eral Rules of Civil Procedure and Local Rule 9 of this Court,

It Is Ordered:

This is an action brought by the Attorney General of the

United States to prevent and restrain an alleged violation

by the defendants of Section 7 of the Clayton Act (15 USC

§ 18).

Plaintiff is the United States of America. The. named

defendants are Von’s Grocery Company and Shopping Bag

Food Stores.

Prior to March 28, 1960 the defendants operated as sepa-

rate corporations ; subsequent to March 28, 1960 they have

operated as a single corporation, under the name Von’s

Grocery Co. Where used in this order the word ‘¢defend-

ants’’ refers to the separate defendants prior to the merger

and to the combined defendants subsequent to that date.

The answer and all subsequent defense pleadings have been

filed by defendant Von’s Grocery Company on behalf of

both defendants.

The issues are raised by the complaint and by the answer

and the amended answer filed herein, and by the statement

of contentions of fact and law filed herein by the parties.

Federal jurisdiction is invoked upon the ground that

Section 15 of the Clayton Act (15 USC §25) invests the

federal courts with jurisdiction to prevent and restrain

violations of the Clayton Act. Plaintiff contends, and de-

fendants deny, that the effect of the merger between the

defendauts in this case may be substantially to lessen com-

petition or tend to create a monopoly in violation of Section

7 of the Clayton Act. The material and relevant portions

of Section 7 of the Clayton Act read as follows:

Sec. 7. That no corporation engaged in commerce

shall acquire, directly or indirectly, the whole or any

part of the stock or other share capital and no corpo-

ration subject to the jurisdiction of the Federal Trade

Commission shall acquire the whole or any part of

the assets of another corporation engaged also in com-

merce, where in any line of commerce in any section

of the country, the effect of such acquisition may be

substantially to lessen competition, or to tend to create

a monopoly.

II.

The following facts are admitted and require no proof:

1. This action was commenced on March 25, 1960 when

the Government filed a civil complaint charging that the

merger between the defendants would violate Section 7 of

the Clayton Act as amended.

2. The Government filed a motion for a temporary re-

straining order and motion for preliminary injunction on

March 25, 1960 to prevent the consummation of the merger

pending a resolution of the case on the merits by the Court.

3. On March 28, 1960 the Court denied the Government's

motion for a temporary restraining order and on J une 13,

1960 it denied the Government’s amended motion for a pre-

liminary injunction.

* 4. On March 28, 1960 the merger alleged in the complaint

was consummated.

5. In a stipulation agreed to by the parties and approved

by the Court on February 3, 1961, it was provided that trial

shall be confined to the issue of whether the merger violates

Section 7 of the Clayton Act as amended. In the event the

Court determines that Section 7 has been violated, hearings

will thereafter be held as to appropriate relief.

6. Defendant Von’s Grocery Co. (hereinafter referred to

as Von) is a publicly held corporation organized and exist-

ing under the laws of the State of Delaware. At the time

the complaint was filed it maintained its principal offices in

Los Angeles, California. Subsequent to the merger, Von

has moved its offices to the former Shopping Bag headquar-

ters at El Monte, California.

7. Von is one of the leading chains of supermarkets in

the Los Angeles area. It is the successor of incorporated

and unincorporated businesses which have been engaged in

the purchase, distribution, and retail sale of a complete line

of groceries and related products since 1932.

8. In the 1959 fiscal year, Von operated 28 complete super-

markets in the Los Angeles area which had total annual

sales of approximately $85 million for an average of ap-

proximately $3 million in sales per store. All of the Von

supermarkets are of the self-service, cash-and-carry type.

9. Prior to the merger, Von also owned and operated a

modern distribution center in a 216,000 square foot build-

ing located on a 20 acre tract of land in the Los Angeles

area. Direct railroad and truck shipments were made to

this distribution center which provided facilities to receive

and distribute groceries and related products to Von’s su-

permarkets throughout the Los Angeles area. Von owned

and operated approximately 33 tractors and 39° trailers

which it used for transporting merchandise from the dis-

tribution center to the various supermarkets.

10. Subsequent to the merger Von sold its distribution

center to a competitor and now uses the former Shopping

Bag distribution center.

11. Prior to March 28, 1960, defendant Shopping Bag

Food Stores (hereinafter referred to as Shopping Bag)

was a publicly held corporation organized and existing un-

der the laws of the State of California and maintained its

principal offices in El Monte, California. On March 28,

1960, Shopping Bag was merged into Von and the separate

2 TRA SR RRR REID tI LT, SRE LEN ORR SOLE IE

. — See CS OO eee IET eS ST BREEAM

——

corporate existence of Shopping Bag was terminated on

that date.

12. Prior to its merger into Von, Shopping Bag was one

of the leading chains of supermarkets in the Los Angeles

area. It was the successor to incorporated and unincorpo-

rated business entities which had been engaged in the pur-

chase, distribution, and retail sale of a complete line of

groceries and related products in the Los Angeles area since

1933. In the 1959 fiscal year, Shopping Bag operated 36

complete supermarkets in the Los Angeles area which had

total annual sales of approximately $79 million for an

average of approximately $2.1 million in sales per store.

All of the Shopping Bag Stores were of the self-service,

cash-and-carry type. [As amended.]

13. Immediately prior to the merger, Shopping Bag also

operated a substantial distribution center which was served

directly by railroad and truck, and which received and dis-

tributed groceries and related products to Shopping Bag

supermarkets. To facilitate distribution to its super-

markets Shopping Bag owned and operated a fleet of trucks,

trailers, and automobiles comprising about 166 units in all.

14. In 1958 Von ranked third and Shopping Bag fifth in

terms of total sales by grocery stores in the Los Angeles

Metropolitan Area. Von had approximately 4.1% and

Shopping Bag approximately 3.9% of all grocery store

sales in the Los Angeles Metropolitan area, as reported

in the Food Topics Magazine study, which is discussed be-

low. Shopping Bag ranked sixth and Von eighth in terms

of total number of markets operated in this area in the

same year.

15. On the basis of Food Topics Magazine combined Von

and Shopping Bag rank second in terms of dollar sales and

in terms of total number of supermarkets in the Los An-

geles Metropolitan Area. Following the merger Von’s

total assets were approximately $42 million and it ac-

counted for approximately 8% of all grocery store sales in

the area.

16. In the course of their business both defendants pur-

chased, received at their distribution centers, and sold in

their supermarkets a substantial volume of groceries and

related products which were produced outside of the State

RUE SEB SAIAS

of California, and which represented approximately 51%

of all retail sales by the defendants.

17. Groceries and related products consist of, but are

not limited to, the following: groceries, meats, produce,

bakery goods, dairy products, delicatessen products, frozen

foods, fruits, vegetables, household supplies, drugs, and

sundries. They are the products taken as a whole which

are generally distributed to the public by grocery stores

and supermarkets. Taken as a whole these products con-

stitute the relevant line of commerce in this case.

18. In 1959 the sale of food products accounted for ap-

proximately 90% of all sales by grocery stores in the Los

Angeles area.

19. In the same period grocery store accounted for a

substantial part of all food sales for off-premise consump-

tion in the Los Angeles area.

90. The relevant trade area in which the defendants

operated prior to the merger was the Los Angeles Metro-

politan Area, consisting of Los Angeles and Orange

Counties.

21. Combined Los Angeles County and Orange County

have also been defined by the Bureau of the Census as the

Los Angeles Metropolitan Area since, taken together, they

meet the tests set by the Department of Commerce in terms

of population and commercial interchange.

22, Los Angeles ranks as the second largest metropolitan

area in the United States in terms of population, income,

and retail dollar sales.

23. Approximately 6,750.000 persons reside in the Los

Angeles Metropolitan Area, and total retail sales in the

area were approximately $9,100,000,000 in 1957, represent-

ing 42% of all California retail sales, 33% of total retail

gales on the Pacific coast, and 25% of such sales in the 11

western states.

94. Since the beginning of World War IT and particularly

during the last 15 years, Los Angeles has’ been one of the

most rapidly expanding areas in the United States.

95. The Los Angeles Metropolitan Area is more than a

community. It is an appreciable trade area and a section

of the country within the meaning of Section 7 of the

Clayton Act.

96. Sales of groceries and related products in the Los

Angeles trade area are in the neighborhood of $2.5 billion

annually.

27. Such products are produced, manufactured, processed

or packaged by numerous suppliers located throughout the

United States.

28. A substantial volume of groceries and related prod-

ucts originate outside the State of California and is shipped

into the Los Angeles area where it represents approximately

51% of all retail sales of such products.

29. These products are shipped by air, truck, rail, and

sea transportation into the Los Angeles area and subse-

quently sold by the defendants and other retail grocery

firms to consumers in the Los Angeles area,

30. In order to maintain a supply of such products at all

times the defendants and other retail grocery firms in the

Los Angeles area purchase and distribute, or cause the

distribution to their stores of new products to replenish or

replace products sold. In the course of such distribution

some of the products handled by the defendants are ware-

housed in their distribution center and some are not.

31. Some groceries and related products are perishable

and must be sold to the ultimate consumer in a very short

time.

32. A number of chains in the Los Angeles area operate

purchasing offices staffed by full time employees who are

- in contact with suppliers located throughout the United

States to secure and effect the shipment of substantial

quantities of groceries and related products into the Los

Angeles area from facilities located outside the State of

California.

33. The buyers of groceries and related products em-

ployed by some of these chains occasionally make trips to

other states and foreign countries to arrange the purchase

and shipment of groceries and related products into the

Los Angeles area.

34. As a result of their buying operations substantial

quantities of groceries and related products which are pro-

duced or manufactured outside the State of California are

shipped to distribution centers operated by the supermarket

chains from which points they are delivered in trucks oper-

ated by the chains to the chains’ retail stores for sale to

consumers in the Los Angeles area.

35. Numerous retailers in the Los Angeles Metropolitan

Area also receive from cooperatives groceries and related

products which originated from suppliers located through-

out the United States.

36, These cooperatives maintain warehouses and distri-

bution centers which reveive direct shipments of substantial

quantities of groceries and related products from produc-

ing facilities located in various states ar) distribute such

products in trucks to the retail stores operated by their

members, pursuant to orders from such members,

87, Such cooperatives also maintain full time buying

offices which are in contact with suppliers located through-

out the country to effectuate the purchase and shipment to

the Los Angeles area of groceries and related products.

Such products are generally sold in retail grocery stores

operated by the members of the cooperatives, but some

cooperatives sell to non-members.

88, Alfred M. Lewis, Inc., which now does business as

Orange Empire Co-Op, services numerous retail members

and non-members in California, Arizona, and Nevada.

Alfred M. Lewis, Ine, was formerly a grocery wholesaler

but it now calls itself a cooperative. Tt has annual whole-

sale sales of approximately $280 million.

39. Numerous producers, manufacturers, processors, and

packagers of groceries and related products located outside

the State of California are represented by food brokers

and manufacturers’ representatives in the Los Angeles

aren who arrange for the distribution of their products

to retail grocery firms in the Los Angeles area.

40. These brokers and manufacturers’ representatives

secure the shipment of products from warehouses located

either inside or outside the state to retail grocery firms,

cooperatives or other wholesalers in the Los Angeles area.

41. Von and Shopping Bag, prior to the merger, were

engaged in interstate commerce and Von presently 1s en-

gaged in interstate commerce.

42. In the last 20 years there has been an increase in the

size of individual retail grocery stores in the Los Angeles

area,

42. In the same period there has also been an increase

in the size of individual retail grocery stores in other parts

of the United States.

44. Since 1940 there has been a decrease in the number

of grocery stores in operation in the Los Angeles Metro-

politan Area,

| 45. During the same period there has been a decrease

in the total number of retail grocery stores in the United

States,

46. Prior to the merger the twenty leading chains of

supermarkets in the Los Angeles Metropolitan Area were

all a part of the retail grocery competition in the Los

Angeles Metropolitan Area and as such each of these chains

competed with each other and with other corporations and

firms engaged in the purchase, distribution and retail sale

of groceries and related products in the Los Angeles Metro-

politan Area, As part of the competition, the major chains

as well as other grocers f requently responded to competi-

tive practices originated by one of the other major chains.

But defendants contend that competition between individual

Von and Shopping Bag stores was limited to those instances

where a store of each company was so located that both

could compete for some of the same customers and defend-

ants admit that in such instances the competition was in-

tensive. [As amended.

47. Prior to the merger both defeadants were competi-

tive factors in the Los Angeles Metropolitan Area.

48. The order and importance of retail chains in the

Los Angeles area can be found in various statistical tables.

One such table appearing in Food Topics Magazine was

used by the Government in preparing Government's Ex-

hibit 8 for the hearing on the preliminary injunction and

was introduced by the defendants as Exhibit A in that

hearing. Tho parties agree that it is accurate in certain

respects. However, both parties clearly understand that

this table is an estimate and may introduce other statistics

and figures which are at variance with estimates appearing

in the Food Topies table.

49. Prior to the merger both defendants competed effec-

tively against Safeway.

50. In the same period certain other chains and inde-

pendents also competed suecessf ully against Safeway.

51. Between 1949 and 1959, both defendants expanded

into new areas, increased the number of their stores in

operation, and increased their totai dollar sales.

52. Prior to the merger some other chains and independ-

ents also increased their sales. Some other chains also

expanded into new areas and increased the number of

stores in operation.

The reservations as to the facts recited in paragraph III

above are as follows:

1. The parties reserve objections as to the admission in

evidence of any of said facts on the ground of immateriality

and irrelevancy.

9. The effect of the admission of the parties to each aud

all of said facts is limited to this action only and said

admission is for the purpose of this action only and neither

constitutes an admission by either party for any other pur-

pose nor may be used against the parties in any other

proceeding.

3. The parties reserve the right to submit statistical in-

formation which may be inconsistent with material appear-

ing in the Food Topics study.

There are no facts which, though not admitted, are not

to be contested at the trial by evidence to the contrary.

vi °

The issues which are to be litigated upon the trial are

maxed issues of fact and law. It was found that the clearest

way to set them forth was to treat them in part VITI of

this order which has been broadened to include issues of

fact and law.

Vil

The exhibits to be offered at the trial will be exchanged

by the parties in accordance with the pre-trial stipulation

approved by the Court on April 18, 1961. The exhibits

upon which the Government intends to rely are set forth

in Appendix A of this order. The exhibits upon which the

defendants intend to rely are set forth in Appendix B of

this order.

es ; é: Ms . ny r abe: -

ae i SOSA IEE ITI PT SAT OH

VII

The issues of fact and law in this case are set forth below.

In setting forth the issues the parties have noted the in-

stances in which issues are the subject of agreement between

the parties.

1. Were both defendant corporations engaged in inter-

state commerce and subject to the jurisdiction of the Fed-

eral Trade Commission?

The parties are in agreement that the answer as to

this issue is in the affirmative.

2. Does the Court have jurisdiction to determine whether

the merger of the defendants in this case violates Section

7 of the Clayton Act?

The parties are in agreement that the Court has juris-

diction to determine this issue.

3. What are the relevant issues to be determined by the

Court in a Section 7 Clayton Act proceeding?

The parties agree that the relevant issues are: (a) the

line of commerce, (b) the section of the country, and

tially to lessen competition or to tend to create a mo-

nopoly in any line of commerce in any section of the

country.

4. What is the meaning of the word *‘may’’ in Section 7

of the Clayton Act?

The parties agree that the word ‘‘may’’ in Section 7

of the Clayton Act means more than ‘‘mere possibility’

and less than ‘‘certainty or actuality’’. The Govern-

ment need not prove that any substantial lessening of

competition or tendency to create a monopoly has actu-

ally occurred, but it must prove that there is a reason-

able probability of the merger producing the prohibited

effects.

5. Who has ibe burden of proof as to these issues?

The parties a, re that the plaintiff has the burden

of proof as to each of these issues.

6. The parties’ agreements with respect to issues stated

in paragraphs 9, 12, and 13, below, and with respect to para-

graphs 17 and 46 in Part III above, are subject to the

following reservations which are issues in this case [as

amended] :

(a) The Government contends that both the interstate

and the intrastate activities of the defendants and

other retail grocers in the Los Angeles Metropolitan

Area who are otherwise covered by the statute are

within the scope of Section 7 of the Clayton Act because

all such activities affect interstate commerce or are a

part of the interstate flow of groceries and related

products.

(b) The defendants do not agree that intrastate activ-

ities of the defendants and other retail grocers in the

Los Angeles Metropolitan Area are within the scope

of Section 7 of the Clayton Act.

politan Area is not the relevant section of the country

as to the wholesale purchase and sale of groceries and

related products. The Government assumes no burden

of proof as to the relevant section of the country at the

wholesale level since it intends to base its case on the

probable effects of the merger in the relevant section

of the country for grocery retailers, which is the Los

Angeles Metropolitan Area.

The contentions of the parties with respect to these mat-

ters are set forth in the parties’ respective memoranda of

contentions of fact and law and will be discussed in detail

in their respective pre-trial briefs.

7. Is the line of commerce in a Section 7 Clayton Act

case any product or group 01 products which have sufficient

peculiar characteristics and uses to make them distinct from

all other products?

The parties are agreed that the answer to this issue

is in the affirmative.

8. Do groceries and related products, taken as a whole,

have peculiar characteristics and uses in the operation of

PELLETS AWE SLES IIL MII FED

retail grocery stores which make them distinguishable from

all other products?

The parties agree that the answer to this issue is in

the affirmative.

9. Are groceries and related products the relevant line

of commerce for determining whether this merger violated

Section 7 of the Clayton Act?

The parties are in agreement that the answer to this

_ issue is in the affirmative.

10. Is the section of the country in a Section 7 Clayton

Act case the area of effective competition?

The parties are in agreement that the answer to this

issue is in the affirmative.

11. Need the section of the country in a Section 7 case be

the entire nation? If not, may it be any appreciable segment

of the trade which is largely segregated from, independent

of, and not affected by the trade in that product in other

parts of the country?

The parties agree that the relevant section of the

country need not be the entire nation.

12. Is the Los Angeles Metropolitan Area the relevant

section of the country for determining the effect of this

merger?

The parties are in agreement that the answer to this

issue is in the affirmative. _

13. When the Court has determined the relevant line of

commerce and the relevant section of the country, is the

sole issue remaining whether the effect of the merger may

be substantially to lessen competition or to tend to create

a monopoly in said line of commerce in said section of the

country?

The parties are in agreement that the answer to this

issue is in the affirmative.

14. What are the factu

ment must meet in prov

may be substantially to lessen co

Section 7 of the Clayton Act?

ee as to this issue. Their posi-

tions on the issue are set forth in their respective mem-

oranda of contentions of fact and law and will be dis-

cussed in detail in their respective pre-trial briefs.

al and legal tests which the Govern-

ing that the effect of this merger

mpetition in violation of

The perties do not agr

d legal tests which the Gov-

that the effect of this merger

oly in violation of Section

15. What are the factual an

ernment must meet in proving

may be to tend to create a monop

7 of the Clayton Act?

The parties do not agr

tions on the issue are se

oranda of contentions 0

cussed in detail in their respective pre

ee as to this issue. Their posi-

t forth in their respective mem-

f fact and law and will be dis-

-trial briefs.

The foregoing admissions having been made by the

parties, and the parties having specified the foregoing isues

of fact and law remaining to be litigated, this order shall

supplement the pleadings and govern the course of the trial

of this cause, unless modified to prevent raanifest injustice.

Dated: April 24, 1961

/s/ William Mathes, United States District Judge.

In view of the fact that the pre-trial conference order

dated April 24, 1961 was amended during the trial by stip-

ulation and with the approval of the Court, it was deemed

desirable to file a substitute pre-trial order in order to * yn-

solidate all of the matters into one written document.

Dated: June 17, 1963

Charles H. Carr, United States District Judge.

a al & Re 9 a "4 EERO IRE SS ERAT

? oP - aaa SPER, EAM RS

—

Approved as to form and content:

Malcolm F. Knight, Attorney, Department of Justice

Johnson, Bates & Sheffield and O’Melveny & Myers. By

William W. Vaughn, Attorney for Defendants.

Unirep States District Court, SourHern District oF

CALIFORNIA

Office of the Clerk

Room 231, U. S. Post Office & Court House

Los Angeles 12, California

June 21, 1961.

James J. Coyle,

Theo F. Craver

Special Asst to

Attorney General

312 North Spring St.,

Los Angeles 12, California

Wm. W. Alsup

Q’Melveny & Myers

433 South Spring St.,

Los Angeles 13, California

James E. Bates

Suite 340

727 West Seventh Street

Los Angeles 17, California

Re: United States of America

vs.

Von’s Grocery Co., et al

Civil Case No. 336-60-WM

Gentlemen:

You are hereby notified that the Trial scheduled on the

calendar of August 1, 1961 in the above-entitled cause, have

been continued, on the Court’s own motion to 9:30 AM on

October 31, 1961.

John A. Childress, Clerk, By R. T. Ericksen, Deputy

Clerk.

Ix Tue Untrep States District Court

No. 336-60-WM Civil

[Title Omitted]

At: Los Angeles, Calif.

Present: Hon. Wm. C. Mathes, District Judge;

Deputy Clerk: W. E. Payne

Reporter: none

Counsel for Plaintiff: no appearance

Counsel for Defendant: no appearance

Minute Entry or Onper—SepTemser 21, 1961

Proceedings :

It is ordered that trial of this case is continued from

Oct. 31, 1961, to Nov. 14, 1961, at 10 AM. Counsel notified.

In Tue Unrtep States District Court

No. 336-60-S Civil

[Title Omitted]

At: Los Angeles, Calif.

Present: Hon. Albert Lee Stephens, Jr., District Judge ;

Deputy Clerk: Chas. KE. Jones

Reporter: Virginia Wright

Counsel for Plaintiff: Malcolm Knight, Assistant US.

Attorney for USA, John F. Hughes, Assistant U.S. At-

torney for USA

Counsel for Defendant: Von’s: Wm. W. Alsup

Minute Entry or Orper—Novemser 14, 1961

Proceedings: For Court trial.

Court orders that trial date of Nov. 14, 1961, is vacated,

and case is now set for pretrial Dec. 18, 1961, 2 PM.

In Tue Unrrep States District Court

No. 336-60-CC Civil

[Title Omitted]

At: Los Angeles, Calif.

Present: Hon. Charles H. Carr, District Judge;

Deputy Clerk: L. B. Figg

Reporter: none

Counsel: James J. Coyle, for Plaintiff U.S.A., Att’y

Anti-Trust Div., Dep’t of Justice.

Counsel: Wm. F. Alsup, Wm. Vaughn, for Defendant

Mrxvute Entry or Orper—Fesrvary 19, 1963

Proceedings :

Court and counsel discuss procedural matters, and it is

ordered that the case is set for trial 10 AM, June 11, 1963.

[fol.1] Ix rae Unrrep States District Court, SouTHERN

District or CaLrrornia, Central. Division

Honorable Cartes H. Carr, Judge Presiding

No. 336-60-CC Civil

Unirep States or America, Plaintiff,

Von’s Grocery Co., Erc., Defendants.

Transcript of Proceedings—June 11, 1963

[fols. 2-3] APPEARANCES:

For the Plaintiff: James J. Coyle, John F. Hughes, Mal-

colm F, Knight, Attorneys for the U.S. Department of

Justice, Antitrust Division, 1602 Federal Building, Los

Angeles, California.

For the Defendants: O’Melveny & Myers, 433 South

Spring Street, Los Angeles, California; by William W.

Alsup, William W. Vaughn and Johnson, Bates & Sheffield,

727 West 7th Street, Los Angeles, California; by James E.

Bates.

{fol.4] Los Angeles, California, Tuesday, June 11, 1963,

10:00 A.M.

CoLLOQuy Between Court AND CouNSEL

The Clerk: Case No. 336-60-CC Civil, United States of

America vs. Von’s Grocery Company, and so forth, for

court trial.

Mr. Coyle: Ready, your Honor.

Mr. Alsup: The defendants are ready, your Honor.

The Court: Proceed.

Mr. Coyle: If your Honor please, I am James Coyle,

representing the United States Government in this case.

In view of the lengthy briefs that have been filed, I don’t

know whether the court wants an opening statement. But

I am prepared to make a very brief opening statement.

The Court: Well, I would like to know how you propose

to present the case. It is all in already, isn’t it?

Mr. Coyle: Pretty much, your Honor, yes.

The Court: You have no ora! testimony, have yout

Mr. Coyle: Yes, we do. We have three witnesses we

propose to call.

The Court: Why couldn’t you do it by affidavit?

Mr. Coyle: Your Honor, we have done some by afti-

davits——

[fol.5] The Court: I understand you have, but I am

talking about these three.

Mr. Coyle: These three that we submitted summaries

of testimony on the evidence of these three—two of the

three have been deposed. But we had intended to call

these three to give the court some live testimony.

The Court: It won’t impress me any more than the—

whatever the unlive is.

Mr. Coyle: Yes, your Honor.

The Court: Go ahead. How long will you take with

them?

Mr. Coyle: We propose to take a day with the witnesses

and the exhibits.

The Court: The exhibits in what fashion?

Mr. Coyle: The exhibits are introduced by affidavit, your

Honor. We have them bound in a book. I don’t know

whether your Honor has that book or not.

The Court: This is the book here?

Mr. Coyle: Yes, your Honor. And each exhibit is in-

volved in the affidavit. It is a looseleaf——

The Court: I thought in your brief that you had covered

all of this material, haven’t you?

Mr. Coyle: I think we pretty well covered the material.

But I propose to go through the exhibits, if the court so

desires

[fol.6] The Court: Well, I will give you ample time, of

course, counsel

Mr. Coyle: No, I didn’t mean that. I thought the court

might want us to go through the affidavits and introduce

the exhibits one by one.

The Court: I don’t think it is necessary. Why don’t

you just put all the exhibits in at one time?

Mr. Coyle: I will do that, your Honor.

ONS GIRL PNG ALE DOE SGA GEIL PORE SEALE AS REG ELL ALLO NCS

The Court: Unless there is some procedural difficulty.

Is there, counsel for the defense?

Mr. Alsup: No procedural difficulty, your Honor. There

are objections to some of them.

The Court: What is the general basis of your objections?

Mr. Alsup: Well, in large part lack of materiality, going

beyond the pretrial order, in some cases presenting an in-

complete picture.

For example, we have exhibits showing Von’s and Shop-

ping Bag were merged in 1958, and failing to disclose that

they were merged in 1960, and that since 1960 some of their

top leading chains have gone out of business.

They create an incorrect impression of market share.

But I can cover that in argument or in——

The Court: Well, I was going to say, counsel, I have a

[fol.7] practice that many judges probably don’t have.

I just disregard immaterial stuff. I think I have had

enough experience to know immaterial from material, and

hearsay from non-hearsay, and I just don’t pay any atten-

tion to it.

Whenever a witness on this stand gives hearsay testi-

mony—unless it is expert opinion—I just close my ears.

I don’t hear it. So it is a waste of time for a lawyer to

ask for a hearsay answer in this court. I don’t even listen

to it.

Now, I will let you make your objections if you think

your record ought to be protected, naturally. But I will

tell you now if it is immaterial—and you will point out how

it is immaterial—I will completely disregard it. I won’t

even read it.

Mr. Alsup: That is perfectly satisfactory to me, your

Honor.

I would like to make a brief comment upon, if I may,

the hearsay matter. ,;

Some surveys which were made for the purpose of de-

termining——

The Court: There are exceptions, counsel——

Mr. Alsup: Which were made for the purpose——

The Court: I understand the exceptions, I think I do,

most of them.

Mr. Alsup: Better than I, I am sure, your Honor.

[fol.8] The Court: I am not saying that, but I think I

aba Dae WINES Pap Ser? GAO Ae

understand it—at least I read Wigmore through from the

front page to the back. That T have done.

Mr. Alsup: I have not.

Well, I think then, your Honor, that to receive——

The Court: But I don’t want to preclude you, covnsel,

from protecting—if you feel that there is some error that

might be prejudicial, I certainly want you to protect your

record. But I am telling you, so that I will save you the

time, that I will not pay any attention to any incompetent

testimony.

Mr. Alsup: Your Honor, I am sure that being so, I will

not be prejudiced.

The Court: As I understand this case, gentlemen, we are

down to really one issue, really one issue, and that is:

Does it substantially lessen competition? Isn’t that the

real issue in this case?

Mr. Coyle: Yes, your Honor.

The Court: What other issue do we have?

Mr. Coyle: Whether it tends to substantially lessen com-

petition. °

The Court: I believe you are contending that the inter-

state commerce feature of it is raised.

Mr. Alsup: We have raised that issue, your Honor.

The Court: Are you serious about it?

[fol.9] Mr. Alsup: Yes, very serious, your Honor.

The only comparable case under Section 7 is US. vs.

Byrd involving the Daily Journal, decided by the Ninth

Circuit a year and a half ago, and holding that section

does not apply to the acquisition of these competing ad-

vertising newspapers.

Now, that is only one of our arguments, your Honor.

And I must say we are much more convinced by our other

argument. But we feel it is a very valid argument.

The Court: I see. Well, my first impression is that I

am probably against you on the store.

Mr. Alsup: I think, your Honor, that would be true but

for the fact that the pretrial order makes it very clear that

the effect, if any, of this merger on suppliers is not an

issue.

The Court: That is correct. That is what your pretrial

order says.

Mr. Alsup: Right. So what we are really talking about

in, this case now then is competition between retail stores

and a local two-county area of one state. And we feel it

is a valid point but——

The Court: Well, let me put it this way: I believe in

the more or less Socratic method of disposing of these

discussions. So if both sides, the court and the lawyers.

discuss it in that way and arrive at some understanding’

{fol. 10] and some conclusion based upon reasoning, the

reasoning process. Judge Cardozo calls it the judicia!

reasoning process. And I need the assistance of both

counsel on both sides.

Now, I understand your point, and that is, since you have

eliminated by your pretrial order the situation of suppliers,

I understand your position is that therefore interstate com-

merce is not affected. It is local in its nature, is that right?

Mr. Alsup: That is correct. This case deals with com-

petition in the local retail area.

Mr. Coyle: Well, your Honor, we feel—

The Court: Well, counsel, I was concerned when I read

the pretrial order about that situation because by the pre-

trial order you have said—do you remember the psragraph?

Mr. Coyle: I don’t remember the paragraph, I am look-

ing for it, your Honor.

Mr. Alsup: I think it is paragraph 86(2), your Honor,

I believe.

The Court: Do you have the page, counsel?

Mr. Coyle: Yes.

Mr. Alsup: Your Honor, it it pages 11 and 12.

The Court: Page 11?

Mr. Alsup: And 12. It runs over to 12.

[fol.11] The Court: But there is a specific statement

somewhere, counsel. That is not it, is it? The one I am

referring to, I think, just says plainly that it eliminates the

suppliers.

Mr. Coyle: I don’t think there is any statement on that,

to that effect.

The Court: But that is strange, T read it last night.

Mr. Alsup: We made that last statement in the brief,

your Honor.

The Court: I thought I saw it in the pretrial order. Maybe

I am in error about it. Maybe I got it from the brief.

Mr. Coyle: I don’t think we ever said that, your Honor.

LEM GH

REE ESAT CII PEE NTR? PRi OT —_

OEE TI RE OIE INNO SD LEI LOS EER ERIE RICE SIT SOLIS POLE TEIN

I think that all we said was that we were going to prove

its effect, that in the Los Angeles Metropolitan Area, and

and we were not worried about the effect in the other areas.

But we have never said this would affect the interstate

commerce flow of groceries, because it obviously will be-

cause obviously there were two concerns buying groceries,

Von’s and Shopping Bag and now there is one. That

would automatically affect interstate commerce because——

The Court: Well, I thought—maybe I am mixed up with

the brief, but I thought that the—I got the impression that

[fol. 12] in the pretrial order there was elimination of the

suppliers. Am I wrong about that?

Mr. Coyle: As far as I know, your Honor, you are.

The Court: I see.

Mr. Coyle: All we stipulated was that this was over the

area of competition. Now——

The Court: That part I understand, your stipulation as to

the line of commerce——

Mr. Coyle: The relevant area——

The Court: The section, you have stipulated to that.

Mr. Coyle: Yes, there is no question in our mind but what

we are content that the retail sale of groceries, the pur-

chase, distribution and sale of groceries by the retail grocery

chains in the Los Angeles Metropolitan Area is part of this

general flow of interstate commerce——

The Court: Well, I agree with you, except I had gotten

the impression that by the pretrial order you had eliminated

suppliers. So if I am in error about that, of course I go

back to my original position, that it would certainly have

an indirect effect and maybe a direct effect on interstate

commerce.

Mr. Coyle: We have said we are vot going to call any

suppliers to prove that suppliers sre injured, because we

don’t think that is necessary. But other than that——

[fol.13] The Court: I see. Then I guess I am in error

about that, counsei.

Mr. Alsup: Yes, your Honor, although I would like to

add this : When we say that the relevant section of the coun-

try is the Los Angeles Metropolitan Area, that necessarily

eliminates suppliers from the case, because some of the

suppliers are interstate and some intrastate.

We agree that the relevant product line is groceries and