HOUSEHOLD GOODS CARRIERS’ BUREAU, Defendant-Appellant, v. John J. TERRELL, Plaintiff-Appellee. John J. TERRELL, Plaintiff-Appellant, v. AERO MAYFLOWER TRANSIT CO., Inc., et al., Defendants-Appellees.
No. 25989
United States Court of Appeals, Fifth Circuit
Nov. 22, 1971
452 F.2d 152
Rehearing Denied Dec. 13, 1971.
Nor is there merit to Patterson‘s claim that since the evidence was held to have been illegally obtained under Ohio law, the evidence introduced in Indiana must likewise be excluded. He cites no authority which compels the decision in his favor on this point. The so-called “silver platter doctrine” discussed in Elkins v. United States, 364 U.S. 206, 208 n. 2, 80 S.Ct. 1437, 4 L.Ed.2d 1669 (1960), on which he relies in this contention is inapposite. The sole question for us is whether under federal constitutional law the evidence used in Indiana was inadmissible as fruit of an unreasonable search in denial of Patterson‘s Fourth Amendment right. In Elkins the Court commented:
The test is one of federal law, neither enlarged by what one state court may have countenanced, nor diminished by what another may have colorably suppressed.
364 U.S. 206, 224, 80 S.Ct. 1437, 1447 (1960). We have held hereinabove that the pertinent search did not violate the Fourth Amendment.
Finally, we see no merit whatever in Patterson‘s claim that the Indiana court failed to give full faith and credit to the Ohio trial court‘s ruling which excluded the evidence at the Ohio trial. He relies on an Indiana statute4 barring prosecution or indictment in Indiana for an act charged as a public offense within the jurisdiction of another state as well as within that of Indiana.
It is clear to us that the statute is not applicable here in favor of Patterson where the claim is merely that the trial judge in Ohio ruled differently from the Indiana trial judge with respect to the admissibility of the fruits of the search. The Indiana Supreme Court in Patterson‘s case on appeal did dispose of the question by saying, “We do not feel bound by a decision of an Ohio trial court.” 255 N.E.2d 520, 521. The decision the court was referring to was the Ohio court‘s ruling which excluded the evidence subject of the search.
Affirmed.
Ainsworth, Circuit Judge, concurred in part, dissented in part and filed an opinion in which Bell and Simpson, Circuit Judges, joined.
Jones, Circuit Judge, dissented.
Jack N. Price, Longview, Tex., Ivan R. Williams, Jr., Fred B. Werkenthin, Austin, Tex., for John J. Terrell.
Jay H. Brown, Austin, Tex., for Allied et al.
James W. Wilson, Austin, Tex., James L. Beattey, Indianapolis, Ind., for Aero Mayflower.
W. E. Cureton, Waco, Tex., F. Neil Aschemeyer, St. Louis, Mo., for United Van Lines.
Before JOHN R. BROWN, Chief Judge, and JONES, WISDOM, GEWIN, BELL, COLEMAN, GOLDBERG, AINS-WORTH, GODBOLD, DYER, SIMPSON, MORGAN, CLARK and INGRAHAM, Circuit Judges.*
* Judges Thornberry and Roney did not participate in the consideration of this case.
GEWIN, Circuit Judge:
Pursuant to
I
Plaintiff-appellee Terrell developed and attempted to market a national “mileage guide” for use in quickly computing the highway mileage between over 775 “key points“—cities, towns, and military bases in the United States and Canada. A guide of this nature is commercially marketable for such commonplace but important computations as rates to be charged by freight haulers or movers of household goods; travel allowances to be paid to government, military, or civilian personnel by their respective employers; and moving allowances to be paid military families under orders to transfer. Prior to 1961, when
Household Goods Carriers’ Bureau is a trade association and tariff bureau that represents some 1700 members, carriers of household goods; it is organized under the authority of the Reed-Bullwinkle Act3 and approved by the Interstate Commerce Commission. Through power of attorney executed by each of its members it has authority to file a joint tariff with the Commission. The legality of this arrangement is not disputed. It is the agreement between the Bureau and Rand McNally that provides the foundation for Terrell‘s antitrust claim. By that agreement the Bureau obligated itself to purchase from Rand McNally a minimum number of 22,500 mileage guides at a fixed price; all guides in excess of the minimum were to be sold to the Bureau or to its members at a discount. In addition, Rand McNally agreed not to sell its guides to other purchasers at a price below the Bureau‘s discounted price. Many were sold at a higher price. A further agreement gave the Bureau the right to negotiate personally with certain other agencies and reserved to Rand McNally the right to deal with all others. Finally, the Bureau was accorded controlling influence in determining the scope and content of the Rand McNally guides.
Although the Rand McNally guide was the only one on the market, it was noticeably inadequate for many of the purposes for which it was used. A combination of factors caused the guide to show longer than necessary distances between key points.4 There was evidence to the effect that members of the Bureau and other motor carriers accepted and even encouraged these overstatements because their transportation charges were computed from the guide‘s mileage tables. On the other hand, many agencies that pay employees or carriers for travel on a per mile basis showed a preference for a more current guide that reflected the shortest possible reliable distances. In addition, the close relationship between the Bureau and Rand McNally gave the Bureau a degree of control over other elements of the guide, including the designation of “key points.” Agencies that made computations involving non-listed points were thus put to the time and expense of making extra computations. A noticeable omission in this regard was the failure of the Bureau guide to provide a convenient means of calculating distances between military bases.
To fill this marked competitive gap came Mr. Terrell with a guide designed to meet the needs of the Bureau‘s unsatisfied customers. In computing his guide, Terrell included all major roads accessible by automobile. He planned to recompute a new guide every two years from the most recent maps available. In computing all of his distances, he used the shortest reliable figures available; and his guide included a ready means of including over 400 military bases in the computations.
Plaintiff began selling his product in 1961, and found a willing customer in the Oilfield Haulers’ Association, a 500
Accordingly, Rocky Ford began the transfer procedure by informing Household Goods of its desire. The Bureau responded with the “Wyche letter“—a strongly worded letter questioning the accuracy of Terrell‘s guide, threatening a complaint to the ICC, and stressing the undesirable competitive effects on the industry that would flow from the adoption of a competitive guide. The contents of the letter were passed on to the Oilfield Haulers’ Association. Shortly after becoming aware of this letter, plaintiff filed this suit and a related libel suit. The libel suit, which was settled by consent decree, is the basis of a defense of res judicata raised by the Bureau on this appeal. Despite the letter, Rocky Ford consummated its changeover to the Terrell guide; and the Oilfield Haulers signed a contract for a revised guide early in 1964. Terrell and Rocky Ford then began a joint effort to convince the Defense Traffic Management Service (DTMS), the government agency which controls the shipment of household goods for military personnel,6 to accept and act on competitive bids computed from Terrell‘s guide.
At this stage, Terrell‘s prospects seemed excellent. He had one tariff bureau as an established customer; the Finance Center had responded favorably to his overtures; and, most importantly, he had an inroad to the influential Household Goods Carriers’ Bureau. He was cultivating an ambitious expectation that competitive necessity would require the Bureau‘s members to accept a guide like his once the impact of Rocky Ford‘s competition was felt. On the other hand, the Bureau, although nominally only a tariff bureau, had identifiable interests in limiting plaintiff‘s access to the market. First, as representative and spokesman for its 1700 members, the Bureau was concerned that plaintiff‘s shorter mileages would bring competition and reduced profits for its members.7 Secondly, the Bureau itself derived a substantial income through its arrangement with Rand McNally for distribution of the guides.8
Shortly after circulation of the Wyche letter, plaintiff‘s rosy future began to blacken. The Finance Center, with some prodding from the Bureau, reversed its position and decided not to adopt plaintiff‘s guide. A large scale battle for influence before the DTMS allegedly resulted in a full blown picture of lack of trust and confidence in Mr. Terrell; ultimately, DTMS, working in connection with the Bureau and the Finance Center, refused to interpret the regulation in Mr. Terrell‘s favor. The Oilfield
II
A. The Wyche Letter
At trial and on the original appeal, appellants took the position that the Wyche letter was inadmissible in its entirety because it had been the subject of litigation in the previously settled libel suit and, therefore, under the doctrine of res judicata, was not a proper subject of litigation in a second suit. We cannot accept this contention. The majority of the original panel concluded that subject to the limitations mentioned in the opinion, the letter was indeed admissible in evidence in the antitrust suit.9 Moreover, it is well established that in a proper case one wrongful act may be the subject of two or more separate and distinct causes of action.10 In the instant case, for example, the letter plainly represented the invasion of two separate and distinct primary rights, the one a personal right not to be subjected to libelous statements, and the other a business right to enter competition freely.11 Thus, we conclude that the letter and its libelous nature were properly admitted to show an intention or a scheme to restrain trade, the prior libel suit notwithstanding.
Appellants vigorously assert, however, that the court committed prejudicial error in failing to exclude the allegedly libelous portions of the letter and in failing to impress upon the jury that damages could not be awarded for any injury growing out of the libel.12 We agree in part. The original majority found reversible error because the entire letter went to the jury as evidence without adequate limiting instructions and after undue emphasis by plaintiff‘s attorney on its allegedly libelous portions. In our opinion plaintiff‘s attorney‘s emphasis on the known falsity of the letter, while entirely proper on the issue of defendants’ intent to exclude competition unlawfully, implicitly invited the jury to award damages for the libel. Moreover, we are in agreement with the original majority in their conclusion that the trial court‘s limiting instruction was not sufficient to alleviate this very real
B. The DTMS Finance and Center Incidents
In an attempt to comply with the teaching of Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc.14 and United Mine Workers v. Pennington,15 the trial court issued a pre-trial order declaring that:
Plaintiff [Terrell] cannot recover any damages for any injury or damage which was caused or alleged to have been caused by any action of the Finance Center, DTMS, or any other agency of the United States of America. . . .
The order also prohibited counsel for plaintiff from referring without the court‘s prior consent to any of the dealings between plaintiff or defendants and either of the two government agencies involved. Nonetheless, a flood of evi-
Plaintiff cannot recover and you will not allow any damages in this case for any injury or damages which was caused, or is alleged to have been caused, by any action of the Finance Center, Defense Transportation Management Service, or any other agency of the United States of America.
In light of the voluminous testimony heard by the jury, we do not think that the above quoted instructions were sufficient to overcome the substantial likelihood that the jury would, and in fact did, award damages for the loss of the government business.
C. Proof of Damages
To prove his damages, plaintiff sought to show by expert testimony the profits lost on account of defendants’ unlawful conduct between 1962 and the
In this case, plaintiff relies on Cherokee Laboratories, Inc. v. Rotary Drilling Services, Inc.,21 as justification for adopting as its projected sales volume per edition the minimum number of guides to be purchased by the Bureau as specified in the most recent agreement between Rand McNally and the Bureau. We conclude, as did the original majority, that Cherokee is inapposite here. In that case, the plaintiff‘s participation in the market prior to defendant‘s illegal activities was a special circumstance justifying an inference that “but for” the defendant‘s illegal activities, plaintiffs would have been in the same position in the market as defendants. In this case, there was proven no special set of circumstances to make valid a similar “but for” proposition. To assume that plain-
In light of the considerations discussed in this portion of our opinion (Part II) and after an independent examination of the evidence of injury suffered by plaintiff, we are of the firm conviction that the record does not reflect evidence properly submitted to the jury that is sufficient to support the sizeable verdict here involved.
Proof essential to recovery of damages in antitrust litigation has been the subject of many Clayton Act claims. . . . The rule thereby established may be summed up thus: The fact of damages, as well as the amount thereof, is entirely a question of sufficiency of evidence. In every case, the question is whether the data of which the evidence consists is such that a just and reasonable inference and estimate thereof can reasonably be drawn from the evidence so that a verdict will not be based on mere speculation or guesswork.22
Although we may not ordinarily substitute our judgment for that of the jury, we are required to exercise that judgment in determining whether it is likely that the jury was actually swayed by considerations not properly before it. In fairness to both parties we do not think that the jury could reasonably have arrived at a verdict of $375,000 unless it was influenced by one or more of the above discussed improper considerations. A retrial of the damages issue is therefore necessary. We reverse the judgment of the district court insofar as it affirms the jury‘s award of damages and remand only on the issue of damages.
III
We do not deem it necessary to require a retrial on the issue of defendant‘s liability. On this question we agree with the original dissent that there is ample evidence to support a finding by the jury that the Sherman Act has been violated.
Terrell showed the existence of the monopoly, the vigorous efforts of Household and Rand McNally to preserve that monopoly, that Terrell‘s directory, so often on the verge of success, was destroyed by his competitors and the monopoly remains intact to the disadvantage of the shipping public.23
The evidence of the record convinces us that the Bureau could be found guilty either of conspiracy in restraint of trade in violation of § 1, of the Sherman Act24 or of monopolization in violation of § 2.25
The Federal Rules of Civil Procedure are liberal in favoring the admissibility of evidence if there is any theory justifying its admission, and the trial judge is given broad discretion in making this determination.26 The jury
Affirmed in part; reversed in part, and remanded for further proceedings not inconsistent with this opinion.
COLEMAN, Circuit Judge, with whom GOLDBERG and GODBOLD, Circuit Judges, join, concurring in part and dissenting in part.
I concur in that portion of the opinion of the Court which affirms the judgment below as to the liability of the appellant.
As to the remand for a new trial on the issue of damages, I respectfully dissent. The reasons were originally set forth in my dissent to the panel decision, 417 F.2d 61, 62, as follows:
“Together with its claim that the verdict was without foundation, the Bureau contends that the verdict of $375,000 was excessive. I disagree. In a case such as this, it is impossible to determine damages with absolute certainty. As we have said, ‘Once the fact of injury is established, the jury has considerable leeway in assessing the amount of damages‘, Cherokee Laboratories, Inc. v. Rotary Drilling Services, Inc., 5 Cir., 1967, 383 F.2d 97, 103, 106.
“Both Terrell and an accountant testified that he spent in excess of $150,000 to compute and publish the guide. Terrell also testified that he knew he would lose money on the Oil Field
Haulers Association contract, but could gain it back when he got a foothold in the market. He anticipated sales of 22,500 copies and publication every two years. This number, based on the amount purchased by the Bureau, was not clearly unreasonable. Colonel Branigan of D.T.M.S. expressed the opinion that if the Terrell guide were accepted by D.T.M.S., other carriers would change over to it. Mr. Wyche himself stated that if another guide existed which lowered charges, the Bureau would be forced to file an identical guide. “Of course, Terrell never received these benefits and the profits he anticipated were never realized. But had Terrell been permitted to compete and sell his 22,500 guides at $15 per copy, his gross profit would have been $337,500. In addition, Terrell had an agreement to publish a second national guide for the Oil Field Haulers Association for $20,000 and a tentative agreement to publish a four and eight state guide for $54,000. Because of the defendant‘s activities these agreements were never carried out.
“On the basis of these facts, the verdict of $375,000 was not so clearly excessive as to justify appellate interference.
“In view of the foregoing, I would unhesitatingly affirm the judgment of the District Court as to Household Goods Carriers’ Bureau. From our failure to do so I respectfully dissent.”
AINSWORTH, Circuit Judge, with whom BELL and SIMPSON, Circuit Judges, join, concurring in part and dissenting in part:
I respectfully dissent from the majority opinion which affirms the judgment below against the Bureau on the
The question of the Bureau‘s liability was not fairly tried before the jury below, and because of prejudicial errors at the trial, a full and complete retrial should be ordered. A review of the proceedings shows that at the heart of plaintiff‘s case is the Wyche letter with its allegedly libelous statements against Terrell. The letter was admitted in evidence, over objection, though the Bureau had previously paid $10,000 to Terrell to settle the libel suit based on the letter. Settlement of the libel suit should have ended the Wyche letter question. Otherwise, Terrell would be allowed to maintain two actions, libel and antitrust, out of the same letter. Cf., e. g., Norman Tobacco & Candy Co. v. Gillette Safety Razor Co., 5 Cir., 1961, 295 F.2d 362. Further, he was permitted improperly to use the so-called libelous portions of the letter as the central evidence of overt acts in his antitrust suit. No limiting or cautionary instruction was given by the Court when the evidence was received. The majority opinion holds that the Wyche letter was properly received in evidence, yet concedes the harm to the Bureau‘s case which resulted from its use, especially in the closing argument of plaintiff‘s counsel to the jury. As the majority puts it, “In our opinion plaintiff‘s attorney‘s emphasis on the known falsity of the letter, while entirely proper on the issue of defendants’ intent to exclude competition unlawfully, implicitly invited the jury to award damages for the libel.”1 The Trial Court‘s one-sentence admonition to the jury in its lengthy charge that no damages should be awarded for the statements in the Wyche letter, was hardly adequate to offset the harm, as the ma-
Prejudicial error which flowed from improper use of the Wyche letter requires a new trial, not only on the measure of damages, but especially as to liability itself. It is extremely doubtful that the jury would have held that the Bureau was liable except for the harmful and prejudicial use of the Wyche letter. The distinction is too fine to comprehend that the letter was prejudicial only in that the jury was allowed to apply an improper measure of damages, but not also prejudicial on the question of liability itself. A lay jury certainly should not be expected to understand a distinction that subtle.
Improper use of the Wyche letter in itself is sufficient to warrant a new trial on all issues, but when compounded with what the majority terms “a flood of evidence tending to show attempts by both parties to influence the respective government agencies,” the prejudicial effect becomes much greater and it is even more apparent that the Bureau did not receive a fair trial below. The Trial Court applied the Noerr-Pennington rule (Eastern R. R. Presidents Conf. v. Noerr Motor Freight, Inc., 365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961); United Mine Workers of America v. Pennington, 381 U.S. 657, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965)) when he stated in his pretrial order that plaintiff could not recover any damages as a result of any action of the Finance Center, DTMS, or any other agency of the United States, and further in prohibiting counsel for plaintiff from referring without the Court‘s prior consent to any of the deal-
Under the circumstances the footnoted observation in the majority opinion (n. 13) is both interesting and informative. The majority states, “Thus, we agree with the original panel majority that the case has been mishandled and disagree only as to the scope of the prejudice growing out of the mishandling.”
The evidence relating to efforts of the parties to influence government agencies is inadmissible in view of the Noerr-Pennington rule that such activities are exempt from the provisions of the Sherman Act. Once this evidence was admitted—contrary to the Trial Judge‘s pretrial order—the Court‘s subsequent brief charge to the jury that damages cannot be allowed for any activities relating to governmental agencies obviously does not cure its prejudicial effect. Since, as the majority points out, “There was no limiting instruction given upon introduction of the evidence . . .” the prejudice is even greater. The original panel majority opinion is quite explicit in regard to the admissibility of evidence. It states in pertinent part (417 F.2d 47, 52), “This is not a situation where the evidence might be regarded as cumulative; quite the contrary, the danger here is that the ‘purpose and character’ evidence will receive such force and weight so as to preclude a fair verdict on the substantive basis of the claim.” (Footnotes omitted.) It is difficult to understand, as with the Wyche letter, how this detrimental and prejudicial evidence can be received but, nevertheless, how its effect can later be dissipated by cautionary instructions to the jury. This requires more of a jury than we have a right to expect.
A fair verdict was not possible under the circumstances which prevailed in the trial of this case. Justice between the parties would best be assured by retrial of the entire matter, as was ordered by the original panel decision herein. Since, however, a majority of the en banc court has determined that the judgment as to liability should be affirmed, I have concluded to join in the remand on the issue of damages only, while reiterating my dissent on the liability question.
JONES, Circuit Judge (dissenting):
I believe the decision of the panel of this Court is right and the opinion of Judge Choate is sound. I dissent from the action of the Court en banc.