Paul LESSIG, Appellant, v. TIDEWATER OIL COMPANY, Appellee.
No. 17924.
United States Court of Appeals Ninth Circuit.
Jan. 2, 1964.
Rehearing Denied Feb. 17, 1964.
327 F.2d 459
It is expressly stipulated that the type of street, road, and highway work involved included the spreading of gravel. This would normally be material hauled to the job-site and it is stipulated that Wolf supplied materials for such road work. Moreover, general hauling done by truck in connection with road work would normally include materials for the work. Considering the language of the stipulation in the light of its context we see no basis for deleting the road and street work from the “type of work” for which materials were hauled by the truck drivers—one, two, or three depending on the nature and size of the project—merely because road and street work is not “specifically” singled out. None of the work categories are so singled out with reference to the material hauling activity of the truck drivers. And the road and street work is included in the activities referred to as “this type of work” normally performed by Clarence R. Wolf and one or two others and with respect to which materials were hauled to the job-site by the truck drivers.
In view of the conclusions we have reached on the phases of the appeals which we have discussed we find it unnecessary to consider the relevance of the sales and transportation of the sand and stone used by Van Der Vaart and J.P.R. to the basic issue presented in either appeal. The act applies to the particular employees and truck drivers involved, in any event. And it would serve no useful purpose to extend this opinion to consider the impact of the additional sales of Crystal and trucking activity of Wolf on the issue we have already resolved on the basis of the factors we have considered.
The judgment order of the District Court in each of the appeals is reversed and each of the causes is remanded with directions that the District Court enter a decree in each granting appropriate injunctive relief in accordance with the views herein expressed.
Reversed and remanded with directions.
Brobeck, Phleger & Harrison, Moses Lasky and Richard Haas, San Francisco, Cal., for appellee.
Before MADDEN, Judge of the Court of Claims, and HAMLEY and BROWNING, Circuit Judges.
BROWNING, Circuit Judge:
This is an appeal by Paul Lessig from a judgment entered on a jury verdict in a suit for damages brought by Lessig under Section 4 of the Clayton Act,1 alleg
Tidewater entered into a service station lease and dealer contract with Lessig November 15, 1955, and cancelled both May 15, 1958. The theory of Lessig‘s case was that during this period Tidewater violated the antitrust laws (1) by fixing the prices at which its dealers resold gasoline, and (2) by imposing upon its dealers a system of exclusive dealing and tying arrangements in the purchase of petroleum products, tires, batteries, and those automotive accessories which were sold or sponsored by Tidewater, and that Lessig was injured thereby.
I
Resale Price Maintenance
A. Sufficiency of evidence of violation
Lessig offered evidence of the following circumstances in support of his allegation that Tidewater conspired, or created a combination, to control the price at which its dealers resold gasoline.4
Tidewater required its dealers to purchase their estimated total requirements of gasoline from Tidewater at prices “posted by seller at the time and place of delivery.” It steadily increased the wholesale or tank-wagon price charged dealers during the relevant period, though the retail price dropped on several occasions. When the retail price went down, Tidewater extended “dealer-aid” in the form of a rebate from the tank-wagon price. When retail prices went up, the rebate was diminished or withdrawn. Payment of “dealer-aid” was conditioned upon adherence by the dealer to resale prices stipulated by Tidewater.
By maintaining, or increasing, the wholesale price when the retail price declined, Tidewater brought pressure upon dealers to accept “dealer-aid” and the accompanying condition requiring resale price maintenance. In addition, Tidewater‘s representatives checked the prices at which dealers sold their gasoline, told dealers the price changes they were to make, changed prices posted on their pumps, placed price signs on the station premises reflecting the new price, and threatened to terminate and terminated dealers’ leases and contracts if dealers did not comply with suggested price changes. Lessig was given notice of termination of his lease and contract three days after he refused to reduce his resale price when Tidewater‘s district sales manager told him it was two cents too high.
From this evidence the jury could conclude that Tidewater entered into agreements with its dealers fixing
B. Sufficiency of evidence of damage
The evidence supporting Lessig‘s claim of injury prior to the termination of his lease and contract from Tidewater‘s resale price-fixing activities was not strong. However, the jury could readily infer that Tidewater terminated its business relationship with Lessig because he failed to adhere to the resale price-fixing scheme. Cancellation of Lessig‘s lease and dealer contract in such circumstances would be unlawful, though in exercise of a right expressly granted Tidewater by the lease and contract.6 Lessig could claim compensation for the resulting loss, including reasonably anticipated future profits,7 and there was evidence from which the jury could find that such loss occurred.
C. Alleged error in instructions
Tidewater makes the threshold contention that review of many of Lessig‘s numerous claims of error is barred by Lessig‘s failure properly to present his
Lessig tendered to the court a proposed instruction concerning his right to recover reasonably anticipated future profits lost as a result of the cancellation of his lease and contract.8 The instruction was not given, and Lessig made timely objection. The omission was error.9 The error was prejudicial since the jury was instructed in detail as to Lessig‘s right to recover profits lost during his occupancy of the station, and therefore might have concluded that he could recover only on this theory.10 Such a misconception could have led to the verdict adverse to Lessig, for while Lessig‘s proof of causal connection between the alleged violation and the lease cancellation was substantial and direct, his proof of loss of profits from Tidewater‘s conduct during his occupancy of the station was, as we have said, relatively meager and tenuous.
Reversal is thus required,11 and we consider only those remaining assignments of error pertinent to a new trial and ignore Lessig‘s failure to comply with Rule 51 of the Federal Rules of Civil Procedure and other procedural obstacles which would ordinarily preclude review of some of the matters discussed.
Lessig argues that the trial court should have instructed the jury that Tidewater‘s conduct relating to resale price maintenance violated the Sherman Act as a matter of law. The instruction was properly refused. Tidewater did not concede that “dealer-aid” was conditioned on dealer adherence to its stipulated resale prices. Its officials testified that “dealer-aid” was given whenever the prevailing retail price in a particular area fell below the level at which Tidewater‘s dealers could pay the posted wholesale price and retain a fair margin of profit; and they insisted that each dealer, though receiving the rebate, was nonetheless free to meet the prevailing retail price or not as he saw fit. The jury was entitled to accept this explanation, and reject the contrary evidence.12
The instructions on this phase of the case were objectionable in another respect. Lessig testified in detail regarding a conversation with Tidewater‘s district sales manager immediately preceding receipt by Lessig of notice of the cancellation of his lease and contract. With apparent reference to this conversation, the court instructed the jury “that it was not unlawful for Tidewater to tell Mr. Lessig that his retail prices were so high that a loss of sales and customers was likely.” This was one of several instructions which isolated particular incidents from the total course of Tidewater‘s conduct and pronounced each lawful. These instructions were no doubt accurate, so far as they went. However, as the Supreme Court recently stated, “[i]n cases such as this, plaintiffs should be given the full benefit of their proof without tightly compartmentalizing the various factual components and wiping the slate clean after scrutiny of each. * * * [T]he character and effect of a conspiracy [or combination] are not to be judged by dismembering it and viewing its separate parts, but only by looking at it as a whole. * * *“; and “acts which are in themselves legal lose that character when they become constituent elements of an unlawful scheme.” Continental Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690, 699, 707 (1962).14
We have said that it would be reversible error to instruct the jury that particular acts, alleged to be part of a conspiracy, were lawful, without adding the express qualification, “in the absence of conspiracy” (Fox West Coast Theatres Corp. v. Paradise Theatre Bldg. Corp., 264 F.2d 602, 606 (9th Cir. 1958)), and it is at least clear that an instruction that a component element of an allegedly illegal course of conduct is lawful should be accompanied by a substance of the admonitions which we have quoted from Continental Ore Co.15
No substantial error occurred in the exclusion of evidence relating to resale price maintenance. Most of the excluded material was cumulative or only remotely relevant, and the discretion of the trial court in dealing with it was accordingly broad.
II
Exclusive Dealing and Tying Arrangements
A. Sufficiency of evidence of violation
Lessig offered evidence of the following circumstances in support of his allegation that Tidewater imposed upon its dealers a system of exclusive dealing and tying arrangements applicable to petroleum products, and to tires, batteries, and automotive accessories (TBA) which Tidewater sold or sponsored.16
Tidewater‘s service station leases were renewable annually, and were subject to cancellation at six-month intervals on thirty days’ notice. Each dealer contract ended automatically upon termination of that dealer‘s lease. The dealer was required by his contract to purchase from Tidewater “his total requirements of gasoline, motor oils and greases, regularly manufactured and sold by” Tidewater, to an amount specified in the contract; and the amount specified in each dealer contract was the estimated full requirements of that dealer‘s station. When the service station lease and dealer contract were executed Tidewater‘s representatives told the dealer that he was to purchase from Tidewater his requirements of petroleum products and of those TBA items which it sponsored or sold. Tidewater‘s representatives accompanied salesmen of sponsored merchandise while the latter secured orders from dealers. Tidewater‘s representatives inspected dealers’ stations for competing merchandise, required that it be returned, and threatened nonrenewal of the offending dealer‘s lease. Credit card sales of nonsponsored merchandise were charged back to the dealer if the customer failed to pay. New dealers were required to purchase from outgoing dealers only inventory purchased from Tidewater.
The record disclosed the disproportionate size and economic strength of the parties.17 There was evidence that Tidewater imposed exclusive dealing and tying arrangements against the dealers’ wishes to provide Tidewater with noncompetitive access to the portion of the market which the dealers’ stations represented. Dealers testified that they feared to buy competing brands of oil and sponsored TBA items even when requested by customers and even though the cost to dealers was less, and that when they purchased competing merchandise they hid it.
Evidence was offered that Tidewater entered into leases and dealer contracts, containing provisions similar to those described, with about 2,700 service station operators in eight western states. Some of the practices described admittedly were followed with respect to all Tidewater dealers, and the others appeared to be of quite general application. Thus, the jury could conclude that the restrictive provisions and practices affected a substantial portion of Tidewater‘s sales to its dealers of about 310 million gallons of gasoline annually (about five per cent of the gasoline sold through dealers in the area), and four to five million dollars worth of TBA.
From this evidence the jury could conclude that Tidewater sold petroleum products and sponsored TBA to its deal
We think Standard18 and Richfield Oil19 require a holding that the jury could so conclude from such relevant factors, common to those cases and this, as the following: the limited number of desirable station sites and the substantial investment required to acquire and develop them; the large number of stations to which competitive access was denied; the large volume of gasoline and TBA retailed by those stations, and the substantial share which these sales represented of total sales of gasoline in the western states; the fact that the restrictive condition was imposed not only upon the sale of Tidewater‘s own petroleum products, but also upon the sale of TBA produced and sold by others; the marked disparity in the bargaining power of the parties; and evidence that the restrictive condition was imposed for the very purpose of eliminating competition for dealer patronage.
As Tidewater points out, the percentage of service stations in the market affected by its conduct was not established in the present case, as it was in Standard. However, the percentage of sales of gasoline in the area made through Tidewater stations was shown (about 5 per cent as compared with 6.7 per cent in Standard), and would seem to reflect the impact of the restrictive arrangements more accurately than would the percentage of retail outlets affected.20
Tidewater also points out that the record did not disclose total sales in the western states of any of the TBA items involved, and hence the share sold through its stations could not be determined. In Standard such information was available as to some TBA items. However, knowledge of the share of the market foreclosed is not invariably required to determine whether exclusive dealing arrangements violate Section 3 of the Clayton Act. The test remains whether the jury can find from all the circumstances that the effect of the particular arrangements “may be to substantially lessen competition or tend to create a monopoly in any line of commerce“; and, as the Clayton Act tying clause cases demonstrate, this may appear from facts other than the proportion of total commerce in the relevant market which is subject to restraint.21
In Standard the proportion of total sales of automotive accessories affected was not shown, and the evidence
We are also satisfied that other grounds of distinction suggested by Tidewater between this case and Standard do not justify a different result.23
As an independent theory of violation, applicable to TBA, Lessig contended that Tidewater leased its service stations and sold its petroleum products on the condition that its dealers purchase the TBA which it sponsored or sold.
Of course, if a substantial volume of TBA were involved, or if Tidewater possessed coercive economic power over its dealers because of its role as a lessor of service stations and distributor of petroleum products, such tying arrangements would violate Section 3 of the Clayton Act; they would violate Section 1 of the Sherman Act as well if both of these conditions were present.24 The quantum of power over the tying product prerequisite to Sherman Act violation is simply “sufficient economic power to impose an appreciable restraint on free competition in the tied product * * *.”
In the present case there was evidence from which the jury could infer that the alleged tying arrangements were imposed as a matter of general practice, and therefore affected the substantial volume of TBA sold by Tidewater‘s dealers. The jury could also find that Tidewater possessed the economic power requisite to Sherman Act violation from the fact that it successfully imposed tying conditions upon a substantial volume of TBA sales, and from the following circumstances. Tidewater could cancel dealer contracts on short notice, and decline to renew them upon expiration. The consequences of termination were disproportionately grave to the dealer. Tidewater could substitute one dealer for another readily, or operate the station for itself. The dealer was economically bound to his station and to Tidewater‘s petroleum products; they were to him unique. The good will of his business attached to them; moreover, he was bound by contract to purchase his requirements of petroleum products from Tidewater; and even if he were free to shift, a change would involve substantial expense,27 and the dealer‘s economic resources were usually limited.
We are satisfied that there was sufficient evidence of exclusive dealing and tying arrangements violative of the antitrust laws to go to the jury.
Tidewater argues that even so there was insufficient proof of damage to justify submission to the jury of this phase of Lessig‘s case.28
Lessig did not contend that the alleged exclusive dealing and tying arrangements led to the cancellation of his lease; and we agree with Tidewater that there is little evidence that Lessig was damaged prior to the termination of his lease by the requirement that he purchase petroleum products exclusively from Tidewater.29 However, there was evidence that the prices which Lessig paid for sponsored TBA during his occupancy of the station were higher than those at which such items were available from other sources. Evidence that a merchant has been required to pay more for goods which he resells is sufficient to establish, prima facie, that he has been damaged;30 tested by common experience, such proof is adequate to “establish with reasonable probability” that profits on resale were less. Flintkote Co. v. Lysfjord, 246 F.2d 368, 392 (9th Cir. 1957).31
Tidewater argues that higher cost of sponsored TBA would not necessarily mean lower dealer profits because competitive TBA might not be equally salable and its purchase, even at lower prices, might lead to diminished profits through fewer sales, lower resale price, and narrowed margins. Under Tidewater‘s hypothesis, the only wholly satisfactory evidence of damage would be a record of sales of both competitive and sponsored brands of TBA at Lessig‘s service station during the same period. Since, arguendo, Tidewater‘s illegal activity made the production of such evidence impossible by preventing Lessig from dealing in competitive TBA, Tidewater cannot complain that the preferred proof was not produced.32
As to the amount of damage, the evidence showed how much more some items of sponsored TBA cost than com
C. Alleged error in instructions
Relying upon Standard, Lessig requested the court to instruct the jury that if it found Tidewater‘s dealer contracts imposed an exclusive dealing requirement34 with respect to petroleum products, “and this practice affected a substantial amount of commerce, you should find that defendant has violated the antitrust laws.” The instruction was properly refused. As Tidewater points out, more appeared in Standard than that the offending contracts affected a substantial amount of commerce in petroleum products.
We agree with Lessig, however, that the jury was not sufficiently advised that illegal tying arrangements might be found in tacit conditions or understandings inferred from all the circumstances of the case. Tidewater points to the use of the adjectives “express or implied” in the pertinent instructions, but an adequate explanation of the concept of tacit conditions or understandings established circumstantially cannot be conveyed by a phrase. The danger of confusion was increased by language repeatedly emphasizing the necessity for an agreement.35
The court‘s instructions conditioned recovery upon a finding that Lessig entered into an exclusive dealing or tying arrangement with Tidewater. But Lessig‘s charge was broader;36 he also alleged that Tidewater sought to impose these arrangements upon all its dealers. If Lessig proved damage to himself from such a course of conduct—for example, by cancellation of his lease and dealer contract because he refused to become a party to a system of illegal exclusive dealing and tying arrangements—we see no reason why he could not recover. He clearly could if the arrangements violated the Sherman Act.37 Doubt has been raised that proximate cause can be shown where only the Clayton Act is offended, but we believe the distinction untenable. Lessig‘s allegation that Tidewater established a system of restrictive arrangements is essential to his Clayton Act case because an exclusive dealing and tying arrangement with Lessig alone could not have had the probable effect upon commerce required to make out a violation. Since it is the entire system of conditions and understandings which violate the Clayton Act, injury to a dealer resulting from Tidewater‘s efforts to establish and maintain that system is injury
The court instructed the jury that there was no evidence from which it could find that Tidewater‘s conduct might “tend to create a monopoly” in TBA, leaving to the jury only the question of whether it might “substantially lessen competition.” In the context of this case the distinction is scarcely clear; it was not taken in Standard or Richfield, and we can find no reason to take it here. The Clayton Act‘s prohibition of agreements which “tend to create a monopoly” is violated though “the tendency is a creeping one rather than one that proceeds at full gallop; nor does the law await arrival at the goal before condemning the direction of the movement.” International Salt Co. v. United States, 332 U.S. 392, 396 (1947).39
The jury was instructed that Tidewater could “urge and encourage” its dealers to buy “all their TBA” from Tidewater, and “express disappointment” if it found they were buying from others. We think the instruction went too far. If the evidence established that Tidewater followed the course of conduct described and that Tidewater‘s dealers thereafter purchased from it their requirements of sponsored TBA items, an inference of tacit agreement would be virtually compelled. The instruction thus might preclude the jury from finding tacit agreement from circumstances which would justify such a finding.40
Lessig‘s remaining objections to instructions relating to TBA tying and exclusive dealing arrangements seem to us inconsequential, unlikely to arise again, or clearly without merit.
D. Alleged error in exclusion of evidence
One of Lessig‘s contentions concerning the exclusion of evidence relating to this phase of the case merits comment. Lessig complains that he was not permitted to state his opinion as to the profit which he lost as a result of Tidewater‘s alleged conduct. Such opinion testimony is admissible,41 but only if based upon facts which rationally support it.42 The offer of proof was simply that it was Lessig‘s opinion, based upon his experience and knowledge, that but for Tidewater‘s restrictive practices his earnings would have approximated seven hundred dollars a month, or about four hundred dollars per month more than
III
Attempt to Monopolize
We think the court erred in withdrawing from the jury the charge that Tidewater attempted to monopolize in violation of Section 2 of the Sherman Act.
The essence of monopoly is power to control prices and exclude competition,43 and what we have said demonstrates that there was evidence that Tidewater possessed the specific intent to acquire and exercise such power with respect to a part of commerce.44
Tidewater argues that attempt to monopolize is established only if there is proof of “dangerous probability of success, i. e., that if unchecked monopolization will result“; that this requires an evaluation of Tidewater‘s power in the relevant market; that the evidence on this issue was inadequate, and such evidence as there was indicated a lack of any possibility that Tidewater could monopolize the sale of petroleum products or TBA.
We reject the premise that probability of actual monopolization is an essential element of proof of attempt to monopolize.45 Of course, such a probability may be relevant circumstantial evidence of intent, but the specific intent itself is the only evidence of dangerous probability the statute requires—perhaps on the not unreasonable assumption that the actor is better able than others to judge the practical possibility of achieving his illegal objective.46
When the charge is attempt (or conspiracy) to monopolize, rather than monopolization, the relevant market is “not in issue.” United States v. E. I. Du Pont & Co., 351 U.S. 377, 395 n. 23 (1956).47 Section 2 prohibits attempts to monopolize “any part” of commerce, and a dominant position in the business of distributing petroleum products and TBA
Reversed and remanded.
MADDEN, Judge (dissenting):
I think it is a serious mistake to send this case back to the District Court for retrial. The trial here under review used up nine days of the time of a judge and jury and the staff of the court. The jury brought in a verdict for the defendant. I think it is practically impossible that another jury on a retrial would reach a different verdict.
The plaintiff, who had had some experience operating different service stations which sold Shell, Standard and Richfield gasoline, in May of 1955 leased from the defendant Tidewater an old service station, on condition that the defendant would modernize the station. The defendant did modernize it, at a cost to it of $29,000. The plaintiff has no criticism of the station. The plaintiff‘s lease was dated November 15, 1955. It provided that it was subject to termination at the end of the first or any subsequent six months’ period by either party. At the time of the execution of the lease the parties entered into a “dealer contract.” This contract was for the period November 15, 1955, to November 14, 1958, with a right in the defendant to extend it to November 14, 1960. The contract provided, however, that it should terminate if the plaintiff‘s lease terminated. In the dealer contract the defendant agreed to sell the plaintiff his requirements of gasoline, motor oils and greases manufactured by the defendant, so long as the contract was in force.
The plaintiff‘s lease provided for a rent of $67.34 a month, plus one cent for each gallon of gasoline delivered to the station. The $67.34 was, of course, insignificant in relation to the investment which the defendant had made in the station. If the defendant was to get a respectable return on its investment, it would have to get it out of the gallonage provision of the lease. Before the modernization of the station in the autumn of 1955, the station had been, since January 1, 1954, taking just under 10,000 gallons per month. In the first month after modernization, it took 12,500 gallons. Both Tidewater and Lessig had hoped that the gallonage, after modernization, would increase to 20,000. But it did not increase substantially during the 27 months following, up to April, 1958, when the defendant terminated the lease. The defendant‘s profit for the entire year 1956, before taxes, was $30.38. For the year 1957 the comparable figure was $907. The per-month gallonage in the first three months of 1958 was somewhat less than the gallonage in November, 1955, the first full month after the modernization.
Tidewater was not making any money out of the station and, of course, neither was Lessig. His profits averaged $284.33 per month, which was $80 per month less than he began to earn, working for
Postponing, for the time being, any legal problems, and looking at the economics of the operation of the station during the period of the plaintiff‘s tenancy, it is obvious that the situation was intolerable. The owner was making substantially nothing and the operator, although he worked long hours and had the use of the owner‘s large capital investment, was making a meager living. If there was a reasonable hope that a more efficient operator might develop more business, that would be good for the owner. Was the owner at liberty to make a change? As we have seen, the lease was terminable at the end of any six months’ period by either party, and the dealer contract terminated automatically with termination of the lease. As we have seen, Tidewater did terminate the lease in April, 1958. Under the new operator, the gallonage increased significantly and regularly, to 15,000 gallons in the remaining months of 1958, almost 16,000 gallons in 1859, over 17,000 gallons in 1960 and 1961, and in several months of the latter three years it exceeded 20,000 gallons.
Turning from the economic to the legal questions, the plaintiff complains that the defendant, in its dealings with him, violated sections 1 and 2 of the Sherman Anti-Trust Act1 and section 3 of the Clayton Act,2 and thereby made itself liable to him, under section 4 of the Clayton Act,3 for the damages which the defendant caused him, multiplied by three.
So far as concerns section 1 of the Sherman Act, the plaintiff would spell out of certain remarks and remonstrances of the defendant‘s agents a contract with him to fix the price at which he could resell gasoline which the defendant had sold to him. The defendant, hoping that the plaintiff would sell enough gasoline so that the defendant might make more than $30.38 or $907 profit, before taxes, in a year, on a very large capital investment, found the plaintiff charging several cents more per gallon than his adjacent competitors and, naturally, not selling much gasoline. The defendant‘s agents thought this was not a wise way to do business, which it obviously was not, and told the plaintiff so. In all common sense, does the Sherman Act forbid a man, just because he is engaged in business, from speaking the obvious truth, when the unwise and obstinate conduct of which he speaks is lifting money out of his pocket? The plaintiff testified, repeatedly, that he paid no attention to the suggestions of the defendant‘s agents that he reduce his prices, and that he fixed his own prices. Since he fixed his own prices, he could not have been damaged by the defendant‘s suggestions that he reduce prices, even if it were possible to conjure a contract out of a rejected suggestion.
The plaintiff says that the defendant violated section 3 of the Clayton Act, and thereby became liable to him under section 4 of that act, by requiring him to buy his tires, batteries and accessories (TBA) from the defendant or from those enterprises with which the defendant had arrangements under which the defendant would make a profit from their sales. There was nothing in the dealer‘s contract between the plaintiff and the defendant which provided for any such tying. There is evidence that the defendant‘s salesmen of its own TBA solicited sales to the plaintiff, and that the defendant‘s agents introduced to the plaintiff the salesmen of other enterprises with which the defendant had arrangements under which the defendant would make a profit if the TBA were sold to the operators of the defendant‘s stations. As to whether there was a “condition, agreement or understanding” arising by implication out of the conduct or conversation of the parties, re-restricting the plaintiff as to where he
The court recognizes that most of the plaintiff‘s numerous complaints about instructions are unfounded, because the plaintiff made no objection to the ones given, or the content of the ones which the plaintiff says should have been, but were not, given was adequately covered by instructions given.
The court finds however, that there was one instruction requested by the plaintiff and not given by the court as to which the plaintiff‘s claim of prejudicial error has merit. In the suit the plaintiff claimed, as we know, that he suffered loss during the period of his lease and dealer contract as a result of the defendant‘s alleged practice of dictating the price at which he had to resell his gasoline. The court says, “The evidence supporting Lessig‘s claim of injury from Tidewater‘s resale price-fixing activities prior to the termination of his lease and contract was not strong.” That is an understatement. Such evidence, it seems to me, was non-existent. But the court goes on to say, “However, the jury could readily infer that Tidewater terminated its business relationship with Lessig because he failed to adhere to the resale price fixing scheme. * * * Lessig could claim compensation for the resulting loss, including reasonably anticipated future profits, and there was evidence from which the jury could find that such a loss occurred.” Then the court goes on to hold that an instruction, requested by the plaintiff and not given, relating to future profits not realized because of the cancellation of his lease and contract, should have been given, and that the court‘s failure to give it was prejudicial error.
In my opinion, the plaintiff‘s requested instruction was correctly refused. Since it is crucial to the court‘s decision, I quote it:
“A plaintiff whose lease and product agreements have been cancelled as a result of conduct in violation of the antitrust laws is entitled to be awarded as damages the loss of profits and values resulting from the cancellations.
“If you find that Paul Lessig had developed net income and profits at the service station at 22nd and Irving Street, San Francisco during the period May, 1955 to May 15, 1958, and there was reasonable likelihood that such net earnings and profits would have continued in the future you may award as damages the value of such future profits as of the date of cancellation.”
The first paragraph is a statement of law. The second paragraph is a peremptory statement, not conditioned upon any finding by the jury that the defendant had violated the law stated in the first paragraph, but flatly telling the jury that if it found that the plaintiff had had net earnings during the period of the lease and would have had net earnings if the lease had not been cancelled, it should award the plaintiff those future potential net earnings. The plaintiff had, in several of his requests, sought to get the court to give peremptory instructions such as “Tidewater has unlawfully controlled retail prices of dealers.” If the requested instruction here under discussion had been given, the plaintiff would have, by indirection, succeeded in getting
I comment further on the requested instruction which I have quoted above. It would have given the jury no guide whatever as to how far into the future they were to project their award of damages. The plaintiff had, during the period of his lease, averaged $284.33 per month of earnings from the station. This was a meager living; it was $80 less per month than he immediately began to earn working for another man after he left the station. Was he to get $284.33 per month, multiplied by his expectancy of earning capacity as shown by reliable tables, trebled by the Clayton Act, and with or without deductions for other earnings which he might be expected to receive, and a discount for prepayment of a lifetime, or some period less than a lifetime, of earnings? It was the plaintiff‘s responsibility to state some objective less remote than the sky by which the jury should measure his damages if it concluded that his rights had been violated.
I suggest, with deference to the court, that the jury could hardly have been misled into thinking that it could not award damages, if any, resulting from the illegal cancellation of the lease, if it found that there had been an illegal cancellation. The court, in its instructions, several times stated the usual general rule as to the measure of damages in a law-suit, including the loss of profits. The court instructed the jury, “You may specifically base your award of damages * * * on the testimony of expert witnesses.” There were only two expert witnesses. The entire testimony of one of them related to the alleged losses of the plaintiff resulting from the cancellation of the lease, and the testimony of the other expert, so far as it related to damages, was with regard to Lessig‘s earnings after the lease was cancelled. The plaintiff‘s counsel argued emphatically to the jury that the plaintiff should be awarded damages based upon lost future earnings resulting from the cancellation of the lease. It is fair to plaintiff‘s counsel to recognize that he specifically disclaimed any right to project damages “in perpetuity” and asked the jury only for future damages down to November 14, 1960. I think the trial judge was correct in not, of his own motion and as a work of supererogation, prescribing to the jury a rule for measuring future damages. He apparently assumed that, if the jury found that the plaintiff was entitled to such damages, it would measure them by a rule of common sense.
The task of a trial court in threading its way through the intricacies of an antitrust suit is difficult and troublesome. The generalities of the statutes, the variations in the language and the conclusions in the reported decisions add to the difficulties. When the trial court has patiently and intelligently moderated the trial, and a jury has passed upon the evidence, I think it is a mistake for an appellate court to yield to counsel‘s urging to find some departure from perfection in this complex human proceeding. I think the judgment was right and I would affirm it.
On Petition for Rehearing
PER CURIAM.
The petition for rehearing and the motion of amici curiae for leave to file a statement in support thereof are denied. Judge MADDEN would grant the petition and motion.
The earnestness with which Tidewater suggests that Part III of the opinion may be read as rendering illegal any competitive effort to gain a share of available business leads us to add what might seem to be obvious: that Part III of the opinion is to be read with the remainder, and in light of the anti-competitive purposes and conduct to which the case relates.