The Flintkote Company, a Corporation v. Elmer Lysfjord and Walter R. Waldron, Doing Business as Aabeta Co.

STEPHENS, Before BARNES and HAMLEY, Judges. Circuit BARNES, Judge. Circuit Appellees plaintiffs July 21,1952, complaint filed a under the Sherman Act1 Anti-Trust the Acoustical Contractors Association of Southern California, Inc., and certain members eight (six individuals, corpo- thereof rations, individuals, partnerships do- seq. (Sees. Clayton Act.) § Title 15 U.S.C.A. 1 et and 16 of 26 Stat. 2 and 7 of Sherman Act. Secs. 50 Stat. 693. competition ing firm ful under fictitious with business defendant, name). Company four members of the As- The Flintkote sociation, joined such com- defend- and the John Does were also effect petition illegal, non-competi- commerce interstate ants. The essential fixing price policies tive acoustical activ- members, ities said defendant tile. Flintkote induced terminate nec- is first To understand this agreement supply plaintiffs de- essary pleadings. All to look at the products with acoustical rea- tile Flintkote, fendants, than ac- son and because concerted charged violating :in law with tion and exerted said coercion following particulars: defendant members of the de- prior date “For some time fendant, Association, filing complaint boycott form of threats to January continuously prior since products Angeles Los area and herein, the defendants elsewhere in the of California State Flintkote, exception well- by said the event defendants in foregoing knowing facts all of the supplying Flintkote said continued engaged combination have products 13, plaintiffs.” [Tr. 14] to to restrain and and to Complaint A First monopolize Amended commerce and trade ” * * lodged 28, 1953, January filed March and in violation of acoustical tile theory 23, by 1953, appellees. Plaintiffs’ general plan and Sherman Act. changed directly of charge to their case was purpose was: Company, Flintkote defendant to adhere “1. and To maintain agreeing to with to sell acoustical tile ** * non-competitive prices part 1951, plaintiffs and in the latter competing “2. To refrain from “all an unknown that defendants” from * * * other with each “prior year continu- date and to in- the sale and “3. To allocate filing ously com- thereafter to date among tile of acoustical stallation plaint” conspired have to restrain and defendant, As- members commerce, in viola- restrained trade and * ** sociation, tion 2 of the Sherman of Sections and complaint Thus, Act. charges amended exclude non-member “4. To being member with contractors their tile from acoustical legal right conspiracy. compete pur- to chase, sale, original of acous- plaintiffs installation complaint, and their In Angeles damages; any sur- tile Los and $75,000 tical rounding asked for that by trebled; areas use of the follow- and be for costs of suit award among ing attorney’s fees; others: means be and that defendants continuing any enjoined al- from threatening “(a) By boycotting, leged practices. unlawful coercing boycott, and otherwise ** * plaintiffs complaint, In their amended manufacturers any $100,000 damages, for without asked coneertedly entering By “(b) in- same; trebling costs prayer for ”** jobs ordinately low bids fees; attorney’s that defend- and of suit 10, 11] [Tr. continuing enjoined any of from ants be alleged plaintiff that en- was then alleged practices; unlawful agreement shortly prior to into tered January 1, enjoined from Flintkote be defendant buy from Flintkote agreement any with defendants complete supply a line continuous “a way plaintiffs, any or in to sell to refuse agreeing tile;” and that: acoustical defendants, per- with other perpetuating petuate sole- or the al- March and assist in about “In or leged conspiracies, purposes and success- or ob- the active ly because monetary consideration, finally, Flintkote, be re- jects; state the and keeping away from the atten- quired “ * * * jury.” tion of the said contract continue long agreement ex- there so settlement, Because of this some of sound business under ists reason jury by requested plain- instructions practices principles for termin- April tiffs and filed them on ating same.” defendants, in their reference to answering jury Flintkote, accurate. Before Amended was em- panelled, ver- Complaint, care and counsel for called with defendant asserted general opposing bosity pleadings, counsel’s atten- common to court’s tion, denial; alleged participated imperative it would almost had not “that it trade, plaintiffs’ recast,” any conspiracy in instructions restraint monopoly; set [Tr. 155] or maintain a in some instances we to create “because you the de- even tile situation tell the forth that sold to three where it contractors, times fendant’s and had at could find some ” * * * not all plaintiffs; sold three ad- defendants others tile to several of acoustical mitted sales agreed by It was further court and plaintiffs; made no contract counsel, trial, before because any any kind, nor legal equitable were both issues plaintiffs, supply tract either on were to be “first handled continuing basis, any basis, or at all. judge.” latter separate defense, aAs Flint- first 158 to [Tr. The record incl] does alleged kote one carload lot it sold any action, not disclose that affirmative plaintiffs for resale in Ber- San negative, was taken on the demand distinguished (as nardino-Riverside area injunctive relief. Angeles area); from the Los that said Company appeals Flintkote now a from sale was conditioned an understand- judgment it, jury based on a ing plaintiffs would use the tile so $50,000, verdict for trebled court in the sold San Bernardino-Riverside $150,000, plus $25,000 fees, attorney’s area, engage contracting and not in the plus costs, $20,000 $165.70 minus the re- Angeles metropolitan business in the Los by plaintiff-appellees ceived certain from area; plaintiffs that when breached said original parties ap- dеfendant other than sale, condition of and contracted in- pellant, judgment $155,165.- total Angeles metropol- stallations in the Los area, itan Flintkote the defendant Com- urges grounds Appellant pany plaintiffs fifteen for re- refused sell further versal. tile. 26,1953. believe can We we best discuss these answer was filed on This June July 31, 3953, stipulation grouping

On fifteen errors them order dismissing as follows: was entered the cause of ac- tion except to all named as defendants sufficiency evidence, First: The May Flintkote. On knowledge (particularly as to the de- trial commenced. At the start conspiracy, par- fendant and its brought trial, it was to the atten- court’s ticipation therein) support a verdict $20,000 paid tion that had been to the violation the antitrust laws. exchange for a covenant not Alleged Second: errors in admission running sue, in favor of all defendants of evidence. except stipulated Flintkote. It was Alleged instructions, Third: errors in the court could advise the damages. than “that a action had settlement Alleged refusing error in plaintiff Fourth: been made as between the trial, respect- grant except a new and all defendants the defend- instructions damages, Flintkote, fixing ing attorney’s shall not ant but the Court way crediting he has

fees, some affirmative and in method of party $20,000 payment. sented to be a thereto. Nei- ther will commission of an overt Sufficiency the Evidence First: The though act, itself, unlawful be evi Was there substantial enough to show that actor was jury from properly before dence conspiracy. party The law re- reasonably con draw could which it quires proof of common and un- fact, that defend clusion on issue knowing design par- lawful ticipation charged antitrust Flintkote had violated ant persons therein of the laws? conspirators before refusal maintained Defendant justified.” conviction is legitimate busi- plaintiff awas deal recognize We first should that the cases part decision; :'.n it had ness by appellant correctly cited state the law. original among alleged conspiracy agree We also must that on the restrain defendants” “Association knowledge of Flintkote’s to whether urged, Flintkote Hence trade. conspiracy admitted did or did participation in to sell cannot refusal exist, all direct offi- evidence is that the having no conspiracy, a knowledge employees cers and of Flintkote did existed, conspiracy that such unvarying testimony know. is the That knowingly partici- less have could much employees. all defendant’s pated therein. problem says But the is not dual,” appel- sim requirement is “The knowledge ply knowledge Neither solved. requires lant, both “it alleged, conspiracy participation nor sufficient participation, and neither proved by therein, relying need direct evi other,” on United without prosecutions dence, 1910, 205, even in criminal Falcone, U.S. at States proof the rule of page 85 where is more strict page S.Ct. Supreme cases, civil than in United Court where L.Ed. Co., F.Supp. Univis States v. Lens said: 809, by Supreme 813. As noted gist of con- of the offense “The States, Court in Paoli v. United 352 * * * agreement spiracy 232, 294, 297, 4, U.S. 77 S.Ct. note 1 L. among conspirators an to commit 278, Ed.2d by an one attended act offense “Participation conspirators a criminal con effect of the to more [Citing spiracy may conspiracy. be shown circum object having knowledge well as direct stantial as evidence. Those no cases.] See, g., conspira- conspiracy e. Blumenthal v. United not 539, [citing cases]; States, 557, who U.S. 68 and 332 S.Ct. tors one 256, 154; 248, supplies 92 L.Ed. to Glasser v. furnishes more without States, 60, 80, guiltj' 315 United U.S. 62 not S. distiller an illicit 680; though 86 L.Ed. conspiracy sale Ct. Direct even his object States, Sales Co. v. United 319 U.S. furthered 1265, 1674; 703, 63 87 L.Ed. S.Ct. spiracy which the distiller to Manton, Cir., supplier v. 2 had United States party of which but 834, knowledge”; F.2d 839.” 107 Weniger Cir., true that: States, likewise v. 9 United and on 692, page 693 at where this Court 47 F.2d resting solely upоn conviction “A said: evidence in- circumstantial is not an is, think, person pre- novation. It we well estab- “The failure proof carrying conspir- that the evidence in lished out of a vent though is, power conspiracy acy, so ease even he anti-trust has an guilty cases, do, Proof circumstantial. not make him of the most will agreement proof is unneces- of a formal further offense without

375 sary, and were the law otherwise warranted the conclusion that flourish; conspiracies Flintkote, knowledge, would such with such inferred profit, punishment, participated conspiracy, rather than aided it, by plaintiffs. reward. See American would refusal to sell If S., Cir., F.2d 6 147 Tobacco Co. U. v. refusal was not result of the 93, 781, ordinary judgment, S.Ct. 328 U.S. 66 exercise affirmed business 1125, pres 90 L.Ed. 1575.” but the result of threats made and applied sure members of the known Equipment C-O-Two Fire Co. Flintkote, to and 489, States, Cir. F.2d United 9 197 refusing act of to sell would constitute page And cited: cases see knowing participation. Because one Evidence, Criminal Wharton’s § par is coerced economic threats to p. 354, Note 20. ticipate illegal in or aid abet an jury Here the scheme does the actor.2 before the excuse operation showed the existence and of an There was before the sub arrangement, by allocation which acous stantial inferential evidence that Flint assigned rough jobs tical were rotation knowledge kote conspiracy, had to one another of the acoustical con joined it and had acted in further who were members tractors of the Acous it, ance of when we view the evidence in tical Contractor’s Association. There light plaintiffs. most favorable was evidence that bidders told what The verdict of a will be sustained hid, based what the cost of evidence, properly if there is substantial job was, enable a certain con jury, support before the it. Glasser get job. traсtor to Considerable time States, 1942, United 315 U.S. introducing spent interpret 680; S.Ct. 86 L.Ed. 1a Woodard Labor ing sheets,” contractor’s “take off States, Cir., atories v. United 198 F.2d workings meant to what Vegas Las Merchants Plumbers bidding conspiracy. Complimentary the by States, Cir., Ass’n v. United 210 F.2d group, than members 732, 742. designated get job, one was en gaged fact, In both in. had Appellant, relying primarily on John- employer at one worked an time en Co., Cir., son v. H. J. Yost Lumber gaged conspiracy, plaintiff such 53, 61-62, urges F.2d facts Lysfjord protested employer had to his (assuming threats there were compete inability his installation threats) support will not inference jobs conspiracy. such because of There knowledge conspiracy. aof Such broad Flintkote, evidence was no direct as general sweeping. too statement and installer, of and not a seller tile an might Proof of fact of threats the infer original directly participated in that might knowledge, not, depending or it conspiracy dealers, between but there the threats, the nature their num- from which an inference ber, frequency, directly and more might by been trier of drawn importantly, their and content and what warranting belief fact de disclosed, they directly by or inference, acting through Flintkote, sup fendant Flintkote, the defendant to viewed in plier conspirators on some to existing knowledge then factual jobs, acquired situation under could have conspiracy; and there was evidence were made and which received. may 1a. off “Take sheets” be defined in with the next lowest contractor estimate referring job. tile trade as acoustical to take would be instructed to [Tr. written estimates Of the amount of SOI, 494J. required particular tile for a acoustical Pictures, project. v. Paramount United States 2. contractor lowest figure F.Supp. 323, approved D.C., on Ms take-off be 66 sheet would 334 bidding dropped from the list and the S.Ct. L.Ed. U.S. 1260. proof (a) Where there has been fore arisе no inference of an unlaw- conspiring group agreement, may tile that a dealers ful fully law- because one directly supplier, disclosed to select customers. his own inference, accomplished pur There sub- [Cases unlawful must be cited.] an non-participat boycott pose furnishing and intent to stantial evidence some ing (and alleged ex dealers, disclosed the basis from hence fact which agreement reasonably (b) conspiracy) may there istence and such an of a conspiracy one more dealers had threat be A after fraudulent inferred. may supplier on occasions be circumstantial evi- shown ened the numerous severally jointly dence, and circum- intended facts and supplier buy if to from the refuse stances attain to relied must dignity tile supplier continued to sell acoustical substantial evidence supplier, (c) plaintiffs, merely hav not be create to such as to non-conspirators, ing selling suspicion. Here, appears been that a it non-conspir thereafter refused ing sell number of ready defendants had al- these threats, it plaintiffs dealers because refused sell the maintained, law, matter as a cannot before even the date thought conspiracy. law to sell such decision not it had Others supplier’s business plain- them, ful exercise business sell judgment. alleged, de- tiffs these themselves coei-ced. there prod- fendants were Where engaged one true that It is two the same dealers in may enterprise private select his own city, at uct thought good the same it customers, ille an absence both to sell to business gal agreement, or refuse to sell sell In the other dealer. good cause, or customer for to a instances, had most other dealer But it not for cause whatever. handling products before was, been finally it for a decide that seller plaintiffs. some In arrival of reason, reason, goоd noor business cases, plaintiffs had invaded decision, placed to deal. That he refused territory dealers established trade proper perspective of circumstances in its handling products suppliers, of these seller, must be facts known to the and judged least was at distasteful facts, trier determine and there these defendants seemed innocent lawful if was an exercise ample to have reason of a busi- private right, or of the seller’s an act suppliers ness character for the knowing participation which showed (Em- plaintiffs.” refuse to sell to conspiracy. unlawful added.) phasis otherwise, Were it there could never Co., Johnson H. Yost v. J. Lumber judgment civil nor criminal supra, page 117 F.2d against any manufacturer of viction flowing relying products The Yost Beech interstate commerce. merely state—“despite my Nut case Trade Comm.v. Beech- [Federal He could knowledge Packing Co.], existed, S.Ct. Nut 150, U.S. 307, specifically unlawful, 66 L.Ed. refers I knew to be which I’m inno- beyond simple to which “went cent and cannot be held liable because I facts my say judgment, sell.” I exercised refusal to business anyor.e, can refuse ‍​​​‌​‌‌‌‌‌​‌​​‌‌​​​​‌‌‌​​‌​‌‌​‌‌​‌​​‌‌‌​‌‌​​​​​‌‍to I sell to anyone The rule of freedom of sale to lawful, no matter what the cir- or no is not Nor can it be one absolute. may be.” cumstances Colgate in a vacuum. case tested The Colgate Co.], [United conclusion in & 250 Our this matter does States v. 300, 465, 992, the Yost case. U.S. 63 L.Ed. violence to S.Ct. There says: court give not intended to blanket “was refusing mere sanction for individual “From the discretion fact plaintiffs, to The sell to can there- refusal deal. soon Court holding Alleged Second: Errors did not Admission its determined that dealing protect Evidence. a course extend to inferentially spelled out the Throughout foregoing considera- Colgate agreement factor of problem presented, tion of the first here important, the Court’s More lacked. we have all bеfore assumed evidence Federal Trade landmark decision in properly was admitted. It fpr Packing v. Beech-Nut Commission point appellant this reason the next in its places to deal refusal Co. erroneously raises—that evidence was perspective then business care- admitted—must considered most against all scrutinizes full facts fully. doing appel- so, In point we now reach prohibitions the pertinent antitrust against (introduction lant’s suggests. pattern trade of evidence larger contractors); 3, (the point set- between Viewed in the business Ragland’s testimony respecting ting, individually Waldron re- conceived even integ- alleged alleged may pressure an fusals deal become statements Flintkote); conspiring of Section ral element violation dealers on * * * Also, point 4, (the Lysfjord testimony Act 1 of the Sherman re- alleged specting Ragland’s to deal refusals state- Section forbid same monopolistic ments). time, Eastman ends. also will At this same we alleged telephone v. Southern Kodak Co. of York consider New Krause’s Co., Lysfjord. 273 U.S. Materials versation Photo 359, 684.” 71 L.Ed. S.Ct. Against A. Introduction the Sole Attorney Defendant, Flintkote, [Report Re- General’s Facts Study lating Alleged Conspiracy National Committee Between Laws, Antitrust March the Acoustical 1955.] Contractors. unique placed We must first consider the decisions and evaluat- The setting factual situation in this case. acous ed refusals to deal in the business originally tical had contractors they sued appear. While in which refusals paid, trial, for a legally before covenant not protected, deal themselves are accompanied sue further. This market con- are examined in their gravamen thorough-going Only a dismissal. amend in- text. factual complaint surrounding quiry ed Flintkote had cir- into the business existing conspiracy. joined already can characterize a refusal cumstances part incumbent on course of con- It therefore of a deal as restrictive (1) objec- prior existence of the incompatible to establish the duct with antitrust conspiracy; supposed therefore, who mem assume, we all tives. If bers; they supposedly operated; prop- how introduced was evidence which was was; conspiratorial purpose erly jury, what their we cannot before the hold brought how about a matter of there was no law that sub- (2) purposes; Flintkote’s subse which a trier stantial evidence from it, quent connection with before the existence fact could not have inferred alleged co- conspiracy, of conspirators or statements that the defendant acts knowingly participated admissible therein. would be Flintkote Permitting though go Two this issue to defendant. different wholly problems were thus unrelated was not error. a most illustration see dissent the writer recent is with reluctance ing Justice Frankfurter published opinion Mr. opinion makes reference Rogers greater Co., Missouri Pacific R. to a was, statements which he degree, de 77 S.Ct. responsible. 447, 491, 443, 459, 352 U.S. lesser partially occasion February 25, Upon cided 1957. is but not to a comparable, parallel, extra-ju jurists judge citing revise may a Article he had even Review Law Kristensen, while on dicial views. McGrath v. whether previously written, 71 L. 224, S.Ct. 95 bench. action has most 340 U.S. off the Yet such opinion). (concurring Ed. 173 respectable precedent authority. For 378 making necessity conspiracy proved

raised. of evi- One was the often showing prima only upon a Flintkote’s facie dence that is admissible knowing assumption con- participation conspiracy the that existed.” 4 spiracy, (Emphasis added.) order and the other was proof the evidence thereof in which evidentiary We are law area of lat- would be introduced. We turn to where much is to discretion left point ter first. judge. the trial a has trial court relating proof of a to widе evi rules discretion in admission conspiracy remotely civil into one of dence es take us which to even tends today’s law. As conspiracy. most difficult tablish areas United Clune v. said, States, concur 590, 593, Mr. 592, Justice his Jackson 159 16 S.Ct. U.S. leading 125, 269; rence in Krulewitch case of 40 United L.Ed. v. Devoe 440, page States, States, at Cir., 584, United 336 U.S. 8 103 F.2d certiorari 452, 723, page 69 93 L.Ed. S.Ct. L. at denied 308 84 U.S. 60 S.Ct. Cir., 479; States, 790: Ed. Nee v. United 84, 87; Sebo, 267 F. United States starts, ac- “When the trial Cir., 101 F.2d 891. impact cused full feels the strategy. Strictly, conspiracy judicial The trial has court absolute prosecution establish should first proof. Unit discretion as to the order prima conspiracy iden- Manton, Cir., facie ed States v. 107 F.2d tify conspirators, after Cir., Newman, F. United States v. evidence of acts and declarations 2d 8. evi If better to allow he believes it each the course execution subject introduced, be dence to to But are admissible all. ing time, up that connected at a later sprawling proof order charge in so rulings prerogative his such are judge to difficult error. matter, practical the ac- trol. As a procedure cused often is confronted with counsel That is what hodgepodge plaintiff proposed statements of acts and in this follow case, proof preliminarily he never others which when offered he intended, conspiracy or even authorized or acoustical con between the about, per- help

known but which tractors before he had introduced parti proof suade of existence of the defendant Flintkote’s words, a cipation itself. In other therein.5 speaking: Jackson, going because Mr. Justice tieular defendant? is that And your de- refers the accused criminal of this de- connection every conspiracy?” conclusions are bit fendant. His fendant to the charged applicable plus Yes, a defendant vtith other “Mr. Ackerson: that private knowledge, your Honor, violation in an antitrust a civil that knew damage design.” treble action. knowledge * * * “The Court: What other you 5. “Mr. Ackerson: can you going bring are home to this always purpose introduce evidence as to particular defendant?” design.” you contending Well, defendant, “The Court: Are Ackerson: “Mr. ‘pressure yielding knowledge already stated, makes one that I have yields party conspiracy?” setup, who this defendant knew the he setup, If “Mr. Ackerson: he knows the il- knew the effect of the and when he design, prove legal help obeyed and, and I say, can it.” was asked to I going joined setup by eliminating only “The Court: And is that to be your competition field, evidence of connection of this de- unless he can conspiracy?” anything fendant shew he didn’t know about Yes, plus it, helping “Mr. Ackerson: he wasn’t these contrac- your knowledge, Honor, all, my theory joined tors knew it is that he design.” conspiracy.” knowledge “The Court: What other “The Court: The court finds that you going bring par- complexities home to this of the ease now on trial specifically re- competent independent and Was evidence The deferred court admissibility ruling final on served a the ever introduced? plaintiffs’ of this evidence until after Testimony B. The as to Plaintiffs’ fully in; counsel case and advised Statements Others. of rights to to move his the defendant brings testimony were This of exclude line of consideration the entire us to a protected. alleged admitting errors in the tes- timony initially Lysfjord, of to Waldron and as the court error for was not convenience,” alleged Ragland as to this “rule of of invoke statements courtroom. it was denominated others. prop- carefully very had court plaintiffs only of- evidence that brought erly to counsel home prove “yielding,” to fered defendant’s proving necessity joining by con- and the Flintkote of the “yield- competent evidence that spiracy, itself of re- act other than the combine, mem- ed became a to fusing respective sell, testi- to was the 294] ber it.” [Tr. alleged question a there was con- such, as to whether are parties the involvement of person such, spiracy, conspiracy who is alleged as whether the to persons necessary whose state- trial and the the rule on invoke it is that it, received, you con- convenience, have been ments have been have referred to as Black, ne.cted it.” allow the Mr. right.” alleged I that is “Mr. think of other Ackerson: and declarations acts you evidence, conspirators have some “The Unless into Court: to bo admitted it, you way subject to handle would like other a to strike. to motion policy disposed adopt just a that as I am what the outcome “I do know judges case, have other of this is' made to dismiss when a motion will be them, plaintiffs’ done cases tried before at the conclusion be, con- motion to strike entertain a if will on the which I assume provided by joining sufficient evi- nection is not com- of pulsion, a because question.” jury compulsion dence to create if is shown to pressure don’t “Mr. X know from the Associa- Ackerson: form you this, way try pressure tion, can a case like That from other vendors. your it, evidence, Honor.” I circum- would be take please, evidence, “Mr. Honor as circum- Black: Your or offered stantial point joining evidence, we of a are where we stantial spiracy, your you going Hon- have should address ourselves jury, Ackerson, because enough, the reason- or in the absence of Mr. think we would like to be heard drawn from all the I inference to be able extensively propos- yielding to the com- somewhat is that it was facts it, becoming a member of other- tion.” bine and to, language [Tr. 200] will have wise we Objection your street, out.” “The overruled. I case Court: throw many what that.” not have so of these but Ackerson: I realize will “Mr. present them, if it turns out to be But for we I can strike illegal “The Court: hearing your argument, and after will follоw the rule convenience testimony.” you fully at the I will hear time admit the morning soq.] takes its recess.” et [Tr. general you.” principle Thank Court: As a “Mr. Black: “The every person through conspiracy law, am who “Mr. I about is a Ackerson: co-conspirator presumed— particular I of course is this think with conversation. every person is, is the last such conversation.” who is to be Ackerson) co-conspirator person (By you : Mr. re- “Q. trial Will Ragland? conspirators, with Mr. is deemed to be late that conversation * * * * * * agent he related] once is shown to be [Conversation member conspiracy, and statements “Mr. Black: Just a moment. I wish conspira- record to we strike are made furtherance of the show move to objec- pursuance cy may be admitted. of our this answer general- “I think courts here have tion.” ly admitting Ruling doing “The will be reserved statements so Court: your argument.” subject to a I hear [Tr. motion strike it does until after appear develops 262, 203] mony relating Lysfjord of Waldron and hearsay Conversation Number was a (a) alleged Baymiller; admissions of largely conclusions, up statement made Ragland; (b) by Ragland and Lysfjord admissions to Waldron on and Lysfjord. (c) testimony with February 1, 1952, or about the Atlan- di- respect telephone conversation Company to a tic Avenue office of Aabeta alleged state- rectly covering (a) allegedly Krause. These with told what Krause Ragland into divided can be previous ments or admissions Flint- date at ;6 “com- (b) three conversations: kote office Howard had what Ragland pounded that said “Mr. Mr. Mr. 6. Mr. Waldron: bit that the desk little his (Krause) Ragland up got office—or to their he came and told left got desk, abusive so office and his as Krause that talk he couldn’t gentleman would he him that that he had to tell him he to talk to didn’t want any more, could he him and when he have to leave time as and until such he, gentleman, return. more rational he would could behave as a telling “Now, Rаgland, him that he was and talk would come back co., aabeta 262, for us the stand him.” couldn’t soiling “Q. say 263] Ragland [Tr. acoustical tile.” Mr. Did Mr. what Lysfjord] “Q. : talking What of Mr. [Asked Krause was about?” Ragland any objecting very to Mr. statement about He was strenuous- “A. being ly company Krause?” in busi- Mr. Gustave to the aabeta said that he don’t recall “A. I ness.” However, say was time. was more at that another he “The Court: You cannot meeting objecting. Mr. Gustave where You That is conclusion. violently very he what did state then Krause to tell us what was said and going objected thought into business.” of us decide whether he the to in between.” can you “Q. something something applauded, told that?” Who objected to.” That is Black: “Mr. you may Yes, strike Well, know how “Mr. Ackerson: don’t “The Witness: I say he what that.” else to it because that was doing.” Bag- Ackerson): “Q. (By Did Mr. Mr. You weren’t there.” “Mr. Black: you conversation relate this “The That is what he land Court: doing? Krause?” You what he Of Mr. tell us said. Yes, you it word for “A. sir.” you course cannot remember Ragland “Q. j'ou say word, Mr. he go Will state what can D, in substance you nearly you, C, said, A, B, forth, he said as told what so in substance?” ahead and substance of can relate the up It will understood “Mr. Black: Then it will be conversations. objection all of our runs to determine course whether objection ?” or not.” you speaking quite Are know how “The Court: “The Witness: I don’t objection you urged last week?” to answer that.” objection Yes, “Q. Ackerson) (By that it : “Mr. Black: Mr. Did Mr. Ragland’s pure hearsay, Ragland—are you relating no au- there is Mr. is thority past agent you to narrate as far the word ‘ob- words jection’ goes, Ragland say did or Mr. Mr. events.” Krause used other words?” you ‘objected.’ Will read He word He “Mr. Ackerson: used the “A. Reporter?” object very question, said, ‘I Mr. much to the aabeta company being competi- business, (The to was read referred “Q. you us, using reporter type as follows: Will tion with the same of tile.’' the state what Ragland you, why ‘objected.’' keep saying told what I Mr. That you nearly as can in sub- used.” That is the word he he said as stance?”) If “The Court: is the word he concerning right. thought you used, That all Ackerson: I “Mr. using thought you Ragland’s with Mr. Krause.” word which conversation Ragland up Mr. told me his words added to.” “The Witness: Oh, into office and Krause came “The Witness: Mr. no. Krause that talked-” Mr. very definitely words, said those Ias re- Ackerson): Ragland (By me, “Q. Into the what Mr. told Mr. call that he ob- jected very strenuously to office? the aabeta com- Flintkote office, pany. object used the ‘I He words Into “A. being loudly Ragland company to Mr. aabeta business so here- talked Baymiller, Thompson, Lysfjord about, Wal- about plained” or someone at Rag- hearing dron, plaintiffs advised date, when the were perhaps in that office; 7(c) about land, further.9 Flintkote Flintkote’s refusal sell at occurring alleged at an conversations S Conversation Number anwas conspirators, meeting certain Lysf- telephone call Krause and between Lewis) Howard, Newport (Krause, jord occurring “after sevevance” “boycott” was threatened wherein 267], Flintkote [Tr. of relations between voiced objections Newport, were Mr. plaintiffs, and the the date and after by others.8 the court was found Upon portion have of defend- ended.10 motion Number 2 Conversation was occurring ant, out allegedly [Tr. this conversation struck was conversation ruling Ragland, 268], argument, was after February between they using Angeles had this area, “The That the same Witness: in tlio Los very meeting objecting strenuously type deal- are a we tile that of acoustical business, that aabeta fact we were er for.’ Ragland company Mr. was business. time when And that wanting leave, to listen very decided to strongest One of the statements conversation, me told and he loud tlie saying Newport, he was from Mr. that assump- my is not That loud. it was boycott, was, would I believe the word it, left. so he he didn’t like said He tion. all of Flintkoto’s materials and see that I under- 10 minutes as about He left area, it wasn’t used in the was he then told I was rather—and stand it—or willing spend $40,000 $50,000 or to do with Mr. further talked went back 474, 475.] it.” [Tr. about, they further talked Krause. What (By Aekerson) “Q. Mr. : Did Mr. 480, hid.] [Tr. 475 to I know.” do Ragland state the conversation Mr. R. E. Howard on this occasion?” “Yes, Ragland) (Mr. he 7. Mr. Waldron: Only objected very “A. that he vio- there Howard down was said Mr. E. R. lently. 1 don’t recall the exact words.” complaining also.” [Tr. 476.] Aekerson) (By what : And Mr. “Q. said, say if Mr. Howard that did he * ** 9. “Mr. Waldron: I asked Mr. anything?” Baymiller up, wouldn’t hold words, know exact don’t “A. I why they up, agree- didn’t hold to our try- except were he mentioned ment, pressure and that I said the must stop ing our to force ah best issue said, ‘Yes, have been terrific. he And we operations.” 270] [Tr. ” pressure right.’ had the all [Tr. 257.] “Well, Ragland Lysfjord: Waldron, came Mr. 8. Mr. Mr. cross-examination. office, office, (Testimony Deposition met me into from of Mr. Wal- things words, dron) in his were mentioned that : “ getting bit hot. He a little said * * * pressure I said the must pressure you talking were about competition have been terrific from our up. competitors starting show happen. to cause this to lie said there pick beginning yours are field pressure, and that all he said.” up figures you your and the fact 302.] [Tr. bidding against them around in this are Lysfjord: Mr. “And then I believe Mr. general area. mentioned, guess pres- Waldron T manager Company, of Howard Mr. to work sure started a little bit more Howard, from and Mr. Gustave Krause you anticipated, you than and that are Insulating, Sidney Lewis of Coast * * * becoming worried about it.’ Mr. Company—I believe one of the Flintkote Baymiller stated principals Newport, there—and Mr. all pressure brought siderable to bear.” meeting.” had a 489, 490.] [Tr. Newport?” Mr. “Q. Who is principal Lysfjord: He is a Const Insulat- Mr. “He [Krause] “A. told me he ing. dealers, All of these me to he didn’t want feel that there incidentally.” anything personal being about his chosen you telling organization, association, Are as “The Court: front Association, conversation?” which is the Contractor's saying interests; I “The Witness: am what Mr. and their own to force this Ragland selling told me.” termination acoustical tile.” us Very “The Court: 267.] well.” [Tr. Ragland “recalled,” told apparently re-considered what Krause had to be said him, hearsay de- placed all plaintiffs’ when we hear- end of at the say; denied.11 testified were when the motions to strike fendants’ Ragland Krause told them what from to understand It is difficult Newport or Howard had said at a meet- theory upon which precisely the record ing, concerning there had been held conversations various these proper foundation as to whether laid court times both admissible. At Ragland hearsay present, we have gestae,” other and at talk “res counsel of hearsay. placed upon hearsay placed upon “admissions,” refer- sometimes of times many ex- It that there so true are aof ring in furtherance “overt acts to ceptions hearsay rule that much theory to conspiracy,” to times of the law suits evidence which decides “agency.” of hearsay up But made of evidence. by had conversations three These hearsay a does not eliminate rule as dis- two in plaintiffs, individuals involve evidence, important nor vital and rule of categories—Ragland, and tinguishable us, court, open permit or to the lower defendant Baymiller, employees of floodgates any evidence, wide the to alleged “offi- Krause, Flintkote; an disregard total rule. of the of managing director cer, director very One of the for the best reasons Insulating Products,12 California Coast pre- hearsay objection prevent is to de- corporation,” one the dismissed of self-serving sentation of statements.14 the trial. fendants at time of perfect example of The instant case is a declarants of the various status necessity the reason for the and of poses the admissibil- issues distinct as to any way passing upon rule. Without Requi- ity statements. of of their each inferring credibility wit- or as to the of incriminating of site to the admission testified, here have of who we two nesses Krause, New- to statements attributed parties to the the three most interested alleged capacity Ragland (in port, ascribing culpatory vital state- law suit agent defendant) is other than anas Krause;15 Newport; to ments to showing par- prima of Flintkote’s facie Howard; Baymiller; Thompson; by competent ticipation in the Ragland, each one to Lewis and to alleged apart state- from the Newport (except tes- who did not whom hand, foun- no such the other ments. On tify) any recollection of denies both alleged admis- need be laid for the alleged dation statements, specific and of the Ragland, Baymiller hearsay sought proved sions to be fact acting agents scope within as were statement. employment for the defendant of their hearsay rule another But the serves company. requires important purpose. more premise asserting major present person fact to be with the We start hearsay. subject courtroom, In himself statements were and to all such Lysfjord yet fact, or told for a deter- Waldron method devised when the best long Considering admissibility all evidence as tbe statement 11. “The Court: as purposes.” court, to strike the motions for assertive is not used before Hearsay Ladd, Admit.” and the motion to dismiss “The We denied Mason jury.” Bring Okl.L.Kev., [Tr. 766.] denied. Complaint, ¶ 10. took the stand denied 12. Amended 15. Krause any although threats, he he had made Complaint, ¶ 15. 13. Amended expressed readily he had dis- admitted instances, danger many right pleasure. 14. “In fabri- in- He claimed Flintkote; attempt whether as to statement was cation influence or fluence great “boycott.” be as or was not made he the word he denied had used danger employees that a statement a declarant defendant’s [Tr. 1129.] representation a false the fact statements. also denied such This, preclude however, does statеd. fact; cross- of a hearsay truth mination state Evidence party examination.16 ment is admissible judge (a) action if finds: by taking exceptions many There are party declarant was authorized general rule hearsay evidence out concerning make a statement him inadmissibility. discuss the will We subject statement; (b) matter of or general to each exceptions relate knowledge party, of the content individually. conversation words or conduct statement 1: Conversation Number approval adoption manifested his Ragland’s statements the statement or his belief in its truth.17 part past events a narrative attempt prove Here there was no hearsay. part In case double either approved adopted necessary the fact was Ragland view Ragland’s Krause, as statement to what testify not himself about did said, Newport Howard to al- alleged as had co-con- the declarations leged plaintiff left threats. Hence was alleged spirators his statements Ragr showing possibility with the of exception hear- to the came some within alleged authority land had to make state- say rule. purporting the ments establish to under A theories exist number of threats. Ragland of the statements against might de- the offered have been establish No offered to evidence was Flintkote, exceptions Plainly, to the authority. fendant as or direct written oral (1) an of hearsay admission implied rule: As inferred or counsel relied on an authority (2) agent; a Ragland, as party’s a authorized to from Flintkote to (3) co-conspirator; aas of a statement by Wal- the described make statements gestae. part of res .as the statement made Technically, Lysfjord. we be- dron and hearsay the takes lieve such reliance a kept mind that be should Here it decla- against of “authorized declaration out the never offered was the evidence hearsay exceрtion the Ragland individually, class of to ration” the declarant admission” rule. rule, into the “vicarious the action. party to he not a Professor available. tion been made has writer lias said: 16. As one Morgan being of reasons ex- all the of from includes the protection “The when he states: considered above pressed is a factor to be surely misled to made out of court is poten- because of if a statement is excluded ‘Hearsay subject regarded intrinsically weak, ob- respect as the infirmities with tial containing or fraud, to a cover veraci- narration memory, servation, by error or mistake caused of words possibilities the offered of him who utters ty subject imper- or understand, failure bias, under oath and cross- when not memory. the hear- of However, fection examination.’ as well as in equity applies rule say regards rule ex- hearsay He also reasons Therefore these trials. being now directed more to- clusion as as they appear, formidable alone, protecting adversary than to- wards justify the exclusion always sufficient safeguarding fact, wards triers Wig- hearsay evidence. Professor although so both are interrelated thorough analysis his inore, separately. hard consider the effects is exclusion, concludes hearsay rule least, The rule at rests the hands of the the lack of rule exists because of op- objection adversary because, unless to cross-examine portunity the declarant urged, evidence will be admitted hearsay testing fact perceived process as by for consideration triers fact.” attempt to discover truth. Hearsay “The Admit.” We Professor a person If witness lias per- who Okl.L.Bev., Ladd 5 Mason 272. knowledge, he sonal examined as accuracy Institute, his memo- 17. Model perception, American Law Code of words of ry, his sin- Rule 507 Pekelis v. Transcon communication, Evidence, ; or truthfulness. This cerity is in Air, Inc., line tinentаl & Western Cir., 187 distinction a deposition with the between F.2d A.L.R.2d United or affidavit; and an under the former v. United Shoe Machinery States Corp., truth-testing device of cross-examina- D.C., F.Supp. 351. chargeable expressed ‍​​​‌​‌‌‌‌‌​‌​​‌‌​​​​‌‌‌​​‌​‌‌​‌‌​‌​​‌‌‌​‌‌​​​​​‌‍That rule has been follows: in substantive law missions made pant” tension of kote’s wrong. cult not, conspiracies, tried, while before ration was Subdivision ment of the its laration concerned matter within ticipants ^[*] a civil action problem. alleged either as “Evidence of admissible ^[*] party attempt subject who scope employee, Subdivision agency wrong, if the ”18 made the usual rules “planned” in a plan conspiracy,19 of an and the pleaded, execution material matter and was (b) judge declarant before and the plan Ragland, was in a charge presents no alleged co-conspirator.20 employment, or hearsay declarant were agency admissibility (b) finds or as the ease the termination hearsay commit existence for the is commit a party or a conspiracy did (a) a member applicable to declaration really make complete the dec plan or very employ “partici decla party made ** an par of ad Flint (b) diffi civil was ex of connection insulation Company started that 1951. He had started as a field service Ragland engineer, rule Let us examine the § ed.) missions of stances question, frequently enough a diffi- thority; cult one have the same course such acts as are done under that au- discredit the IV “The Ragland’s capacity stated Agency applied to Wigmore left the scope “to evidence.” on board depends upon so with made exercizing promote April 1, too, employment February party’s products, employ of testimonial value acoustical properly therefore party Evidence and not record to authority. (Emphasis present 1955.21 He with agent himself. general the doctrine which enough, the Flintkote turns authority tile.” 3rd claim Flintkote. circum- see what had line of This add- Ed., up- ad- had On 1st, 1951, given job June of he “was Wigmore on hits nail We think promotion tile, sales for acoustical problem our observes that head when he Ragland position which he remained.” agency, not of the the law of one of pre- plaintiffs had worked with the two of evidence. law friendly viously, and them. with person to “He another who sets They occasions, socially frequent agent met on as his do act in stead co-conspirator, corporation Evidence, sub- a In said rule 508. 18. of Model Code ject (a), relate of evidence which to the rules see Peo subdivision connection with conspiracy. Inc., Kentucky, ples a v. Fitz Co. Gas 198; gerald, Cir., Farm F.2d State 188 example, it, commenting 20. on In Porter, Cir., Insur. Mut. Auto Co. Institute’s Model Code American Law Ins. Union v. American 186 F.2d (b) points Evidence out subdivision 209; Sharples Lowry, Cir., 62 F.2d generally accept rule not as does Cir., Separator Skinner, 9 251 F. Co. v. with to declarations reference stated co-conspirators, propounding the rule 25. The decisions require alleged which legion. (b) are in subdivision set forth conspiracy, not statement further g. & Hitchman Coke Co. See e. Coal tendency merely be material to it. “The Mitchell, 388 S.Ct. 245 U.S. is to receive evidence in the authorities 260. 62 L.Ed. conspirator of a all declarations conspiracy during cerning when made were statements col- 19. While pendency.” pass do not on We here loquy in- counsel and the court between a of whether declaration prop- dicating on the relied does not tend to further the ob- employees of all defendant osition that jects admissible. agents co-conspira- Ragland seriously Hence, 259], the witness was not it cannot [Tr. tors naming corporate employed during urged a defendant Flintkote defendant employee every co-conspirator of this action. makes the trial a Ragland gestae’ long help phrase them become “The has wanted to ‘res representatives Flintkote, useless, only entirely could. if he not but positively even is use- harmful. salesman,” Ragland, “promotional as less, every because Evidence rule of worked under ager, sales-man- an assistant applied to which it has ever been Division, of the Southwest part exists well some other Division, Pioneer of The Flintkote Com- principle established ex- and can be Bay- Browning pany, Baymiller. Mr. plained principle. in terms of that superior E. miller’s immediate was Mr. * ** ought It is (and) harmful Manager. Thomp- Thompson, F. Sales wholly repudiated, therefore to be superior son’s Mr. Frank immediate legal as a vicious element in our Harkins, charge S. all who activ- “had phraseology.” building ities of the material division.” Wigmore p. VI Evidence, 182. determination of whether or alleged We conclude that if the admis- plain- Flintkote was contract sion in Conversation Number 1 is not passed “upwards” tiffs was seriatim admissible co-con- Ragland statement Thompson Baymiller spirator party’s agent, of a Ragland authorized Harkins. had no executive it is any theory; not admissible under corporate defendant, duties e., legitimate i. it does fall within the representative was a at the lower echelon. accepted gestae res exceptions of proof There was an utter lack of orof Spontaneous Exclamations, Acts, Verbal seeking Rag- questioning to establish or Statements aof Mental Condition. speak authority land’s on behalf Wigmore Evidence, VI Ed., concerning Flintkote, inating 3rd § incrim- Howard, Krause, statements of threatening Newport, and Flintkote with pass We cannot on whom the boycott. jury could, believe, or should but we have yet We must consider the admissibil- duty seeing any evidence, that or ity hearsay of such statements under the dinarily hearsay, inadmissible as is ad gestae Wigmore res exception. has this mitted into еvidence for the to con say: only proper sider when a foundation for its admission has been laid. departments “In two of substan- gestae’ tive law this use of ‘res has The discussion of both counsel very namely common, in the throughout recognized the trial re- determining liability law the acts resting sponsibility trial court. agent of an for the acts of a co- recognized The trial court it. But when conspirator. The acts and admis- complicated (with- case went trial agent sions an are available to pre-trial out usual conferences), charge principal oc- when pressed court was for immediate answers employ- curred in the course of his procedural evidentiary on involved ; co-conspirator, ment and of a when points. (a) We conclude the court erred occurred the duration permitting the introduction of this conspiracy. attempted It is often hearsay (Conversation evidence Number designate action, this course of 1, supra) any without foundation show- range which thus limits ing scope authority the extent and of the chargeable gestae.’ acts ‘res But resting employee Ragland, any, in the scope of it is ascertained corporate for and to act bind defend- wholly from the substantive law on ant; refusing (b) grant the de- topics, those from not rule strike, motion to fendant’s made evidence.” plaintiffs’ conclusion re- Wigmore Ed., lating VI on Evidence 3rd same “vicarious admissions” Ragland. allegedly § made the witness and the Num- erroneous inadmissible Conversation of the What was effect 1ber excluded. evidence? admission of this Conversation testimony S: introduced Number Here we plain- very goes heart which Conversation Number 3 in to defendant’s tiffs’ cause of action volves agency, Krause Why terminate Flintkote defense. did agent, employee neither servant nor placed in No reason was contract? of the defendant Flintkote. Krause was (other than writing. only evidence named co-conspirator as a in the amend equiv- sell, the bare refusal to complaint, ed 10, Tr. Thus if [fl 20.] these ocal) Of conversations. plaintiff prima had show made a facie dem- persuasively reading record ing that alleged state- Ragland’s onstrates joined conspiracy, had significant most far the ments were then the made co-con statements damaging to defendant’s most and the spirator, during if made existence perspec- spelled in clear They out cause. conspiracy, and in execution conspiracy and nature tive the design, common were admissible brought with home to events conspirators. all Schine Chain Theatres impact that and incisive the dramatic States, United 334 U.S. This was produce. only can admissions S.Ct. 92 L.Ed. United States employee out- own former defendant’s Gypsum Co., United States 333 U.S. full lining scheme. the unlawful 68 S.Ct. 92 L.Ed. 746. jurors’ on the evidence effect of this This conversation precision. was intro be measured minds cannot purpose establishing duced jury’s for the ver- deny it influenced To ignore act of termination was re- is to manner dict ality. material in a equivocal, that it was act in fur have been would the verdict What conspiracy, therance of the introduced not been had this joined conspiracy. Flintkote had Excluding func- Moreover, our it is not certain. improperly the evidence in case. We hypothetical decide tion to troduced, no ac- sufficient basis for the in only of what on the basis rule must troduction of Conversation Number 3 transpired below tually court proved. was quired presented Thus the foundation re circumstances here under Ragland’s to make evidence admissible the admission we hold that only could be established evi prejudicial error. constituted statement itself. dence While much is al latitude 2: Number Conversation establishing proof lowed order of (as conspiracy a discussed) we have hereinabove tо attributed The statement proponent the evi Baymiller (Conversation Number lay proper dence still must foundation. again question of supra) tenders may may Baymiller or not have agency. pro- may seem anomalous that the officer of defendant executive been an ponent must establish the existence of that com company, bind independent to conspiracy by authorized evidence Rag- alleged co-conspira- He was pany his statements. before statements of showing position, opera- superior. His and tors existence immediate land’s activity tions of the is admissible. A in connection with the and his might cynic justified observe that the law re- subject action of this matter body alleged before quires be buried of his statement admission But the law has coffin is nailed. probative value have whatever had, only conceivable basis proper reasons. provided its upon foundation the admission of such un- pass upon laid. need not which We had been damaging here; can evidence nor that issue sworn might parties acted concert justified—the decided of what if approved testimony properly admitted, authorized this each actions—intrinsically flicting other’s neces- injury pub- instructions on showing lic; independent give sitates refusal defendant’s instruc- otherwise, conspiracy. 24, 25, If the rule were tions in refusal error go persons jail would or be held liable of defendant’s on burden instructions damages solely hearsay (Defendant’s proof 42). 14 and opportunity to im- which had no pointed We have heretofore out peach or refute. plaintiffs’ instructions in this against prepared case were for a trial all why, There is a further reason under including defendants, named dis those record as it existed before trial prior trial, missed out coun court, theory under manner and parties sel for both had court tried, which the case Conversa agreed Un should be re-cаst. tion inadmissible. The Number was fortunately, re-casting take such did not (and previously do court we had ruled place every instruction. The court pass upon here the merits carefully properly did instruct ruling) that the refusal of Flintkote to jury: February deal further with “ * * * marked termination only one conspiracy.22 true, the state If that be This defendant here. com- * * * plaint against of Krause inadmissible ments filed alleged Flintkote, co-cons many hap- defendants. What has pirator.23 pened respect in this case with the others is concern Alleged Third: Errors in Instruc- you. trying We are the case here Damages. tions, Other Than today as to this one defendant.” We next consider the defendant’s third [Tr. 1239] ground alleged relating error, to in- charged The court further that: alleged Specification er- structions. damages, respecting Company ror instructions “The Flintkote can be refusing later. There remains will considered liable for acoustical sell specification (Appel- plaintiffs only errors tile to such refusal inclusive) in in- lant’s Points to sell was in furtherance of and regard knowing consequence par- Flintkote’s to: structions of a ticipation participation conspiracy; rea- in an combina- unlawful trade; conspiracy.” tion sonableness of restraint of * * * agents 22. “The Oourt: Now I firm on haven’t trial and its own direct anything yet acting acting heard would indicate for it rather than for it as depart duty conspirator-” from the court’s rule conspirator, Very well, your of a that admissions one con- “Mr. Ackerson: spirator in made the course a con- Honor.” spiracy it, you in furtherance are ad- “The Oourt: -so if have against upon binding holding express missible fellow-conspirators. some of a court on that question, reopen ruling, The rule I refer to I will but un- you have, is the one that holds that in order to less do I will not admit testi- conspiracy, mony type just in be furtherance of of the alluded to.” act or must be one which was “Mr. declaration Ackerson: Statements or acts conspiracy subsequent course made to the termination date of the conspiracy, February not afterwards. I think that the date 19th?” closing conspiracy “The Oourt: Yes. of the ended as That statements persons making or acts of other than the date for the of admissible admis- defend- trial, agents, is, binding ant on agents its conspirators—it sions Flintkote, corpora- certainly Flintkote a binding person who conspiracy.” tion rather than Flintkote a being makes them—but as “Mr. Ackerson: Yes.” [Tr. conspiracy they furtherance of a can’t 295.] very well further it after it is ended. your February 19, And I think if States, supra; Krulewitch v. United ending date of is the date which foreclos- States, Fiswick v. United 329 U.S. persons es the admissions of other than 67 S.Ct. 91 L.Ed. 196. words, damaged In other back we come such acts and conduct.” principle old that if the Flint- [Tr. 1246.] Company acting entirely kote was jury Here the was to re- authorized own, conspiracy on its without against turn a ir- verdict the defendant defendants, the other then there is respective whether or not de- no cause of action.” participated ever con- in the fendant spiracy! also, goes [Tr. 1247] [See Tr. 1252] This heart charge essentially This theory was correct. defendant’s of defense. Finally, jury was instructed that jury But the also instructed they if ex- found certain essential facts follows: isted, then “ * * * However, case here “ ** * your verdict be should is one in which The Flintkote Com- as to each de- favor of being pany is accused of member you fendant find to have whom conspiracy. of a The Flintkote knowingly participated therein.” engaged Company anyone or else [Tr. 1245.] may private enterprise select again, customers, And if own and in absence were satisfied illegal contract, place, certain combination acts an took “ * * * may or sell or refuse you may then return including any person, sell these against a verdict the defendants.” рlaintiffs, any cause or for no [Tr. 1245.] But under the anti- cause whatever. given instructions were mislead- cannot do so trust laws it ing contradictory. They did not conspiracy.” 1236] has been a [Tr. help thoughtful return a careful [Emphasis added] The instructions verdict. interpretation correct, is an in- Without this were and should not per- expression However, accurate of the law. It read. de- submitted nor recovery objection who mits a defendant admits that fendant to deal been a refuses spiracy;” “if there has made instructions the time to these irrespective given, whether [Tr. 1257-1261] sought then be thus ex- before retired. There defendant participated therein. might can held only urge Plaintiffs defend- ists the to whether advantage, appeal, be ant can take inferred (de-empha- 51, Federal first error. Rule because of the sentence Appellant’s Brief), Procedure, Rules sized in there was of Civil U.S.C.A. impliedly to the last sentence added recognize We the fact trial law- participat- “in words: which Flintkote yers respects peril, act at their some ed.” requesting revision of instruc- given jury. to a tion once it has been thus The confusion created unduly emphasized compounded by another instruction: Nevertheless, jury’s in- if the mind. you satisfied from all the “If erroneous, objection struction must two or moire “stating made, says, rule as the together acted the defendants distinctly ob- to which he the matter purpose and with the effect the grounds objection.” jects his and the eliminating competition the the in this, party do runs When fails to he purchase, or installation sale may despite error, he the risk that the you may tile, ‍​​​‌​‌‌‌‌‌​‌​​‌‌​​​​‌‌‌​​‌​‌‌​‌‌​‌​​‌‌‌​‌‌​​​​​‌‍then return acoustical it. have waived be held to defendants and the a verdict error, plaintiffs, prejudicial provided to Because of other in favor pre- actually exception properly taken, shows we evidence which pause ponderantly were need here to re-considеr not

389 (D) question “plain attorney’s granted and error” of whether fees be- misleading sought giving low instructions and appeal those on are ex- proper ob- may cessive. We reviewed will where points consider these exception jection made at order. or trial.24 Damages. A. Excessive objec any specific Neither was At the appellees outset ques give to the court’s failure tion made to tion power this Court’s to review the requested de certain instructions denial aof grounds new trial on the 30, 29, (No. 24, 25, 28, fendant, damages. Regardless excessive gave 33). admittedly 32 court may what the rule circuits, be in other these. of some of substance this Court repeatedly has affirmed its in the has a broad trial court discretion authority to review such a denial. Cobb legal any posi emphasis may it direct to Lepisto, v. Cir., 128; 9 6 Dept. F.2d having spoken tion, whether, after City &Water Power Angeles of Los repeat subject, or need it need not Anderson, Cir., 9 577, 95 F.2d cer ways, pro varying proposition in tiorari denied 305 607, U.S. 59 S.Ct. posed respective believe counsel. We 386; 83 L.Ed Southern Pacific v.Co. fairly present clearly the court tried to Guthrie, Cir., Id., F.2d Cir., legal plaintiffs’ both defendant’s F.2d certiorari denied 341 U.S. jury; theories to and we hold 71 S.Ct. 95 L.Ed. 1343. And aspect he did so. it reverse the lower court’s deci agree sion if proof, we As burden of finds the grossly verdict ex many cessive court trial instructions monstrous. Southern Pacific offered, one, Guthrie, Co. Cir., he were selected 186 F.2d 295. wish,” required, differently, however, “did nor was he to Stated appellant’s repeat. No error contentions actually there- committed instant case challenge by. sufficiency of the evidence support jury verdict, question Alleged Refusing Fourth: Error in law, and one which this Court or Trial; a New Grant in Instructions Rel- appellate ordinary jurisdiction court of Damages; Fixing Attorney’s ative to power has undoubted to decide. Crediting Fees; $20,000 Appellees sought damages here Payment. separate three and distinct kinds of in- We now turn to defendant’s fourth jury to their business: damages. contention, concerning Here (1) Out-of-pocket expenses incurred there is no the de- establishing a business objected, exception, in San took Ber- fendant expenses nardino. damages theory These consisted went expended building sums governed rental, pro- jury, and which court’s advertising, trucking motion and action thereafter. dispute, they and utilities. Without to- Appellant numerous er- contends that $1,920.00. liability taled If we assume respect rors were committed proven, supports the evidence without judgment. Spe- amount ultimate question an award as this amount. cifically, (A) appellant asserts grossly excessive; (B) (2) Out-of-pocket expenses verdict was dam- re- ages period sulting for a awarded of time from the increased cost of acous- beyond permissible period; (C) by appellees’ inability tical caused tile determining Judge pui-chase supplies District erred in from Flint- legal effect of the Appellees covenant sue kote. introduced appellees others; tending during executed between period to show that Gerlinger Co., Lynch Co., Cir., 24. Oregon Persons v. Carrier Lumber Cir., 337; 227 F.2d Tool Woodworker’s F.2d 283. Byrne, Cir., Works 191 F.2d spent May five were as January last 1952 to which from He $87,808.97 tile R. W. Downer Co. they paid salesman for the for acoustical persons Flint- himself that “never concerned” stated he obtained from other than com- position of that represented excess an financial kote that and this nothing pany do $12,758.57 which “had whatever to sum and over that charged it. purchasing for for materials” them with the would have Flintkote short, equivalent restricted quantity. evidence In were his activities conflicting He al- sales business. point facet this on this was acquainted evidently thoroughly though possible some of appears it business, computation part it is items included in the with this n testimony paid aggregаte actually apparent his own from amount little, anything, properly about acous- he were allocable to knew propri- myriad tile, question problems for entailed in tical that was a determination; managerial etary operations an Excepting jury’s Lys- validity Mr. the time That business. as acoustical tile fjord damages experienced sales- al- period laere an able and for which thing. to, no lowed, disputed. one come is That is later which we will man an ex- qualifies this as appears him record as this record error in the That quite damages. an- theory pert prognosis is on business bespeaks testimony His other matter. great optimism, appellees (3) Loss-of-profits which much predicated not so able realized had would’have reality personal on economic as on his acquire from acoustical tile philosophy and enthusiasm. possible The total on a direct basis. damages my (1) any “I reason see items can’t sustained under to do ’(2) able ’$14,678.57. obvious mind that I shouldn’t be it Thus working myself for as based well as for that most of the award somebody surely I would work loss-of-profits, is here that else. and it probably hard twice as hard or frailest. as anybody myself else.” as for Initially, be noted should 628.] [Tr. damages injury all three kinds Waldron, partner, Mr. demon- His case are recov instant hopes. His fervent strated the same experience, supported action, if in the same erable too, had been confined to evidence, nor by competent not all applicator and as a as an then work necessarily mutually ex two aré he embarked on this before salesman Story Co. v. Pater Parchment clusive.' Further, that he he admitted venture. Paper Co., 282 Parchment U.S. son experience previous op- had had no 75 L.Ed. 51 S.Ct. owning any business; erating or (cid:127) Turning profits, issue of lost regard his work at the R. W. there- evidence adduced relative sole Co., acquired any he had never Downer testimony plain- oral to was working knowledge capital of its accountant, supple- tiffs and, indeed, structure had nev- financial computations. by written mented Despite examined its books. even er 38 and An Exhibits 39.] [Plaintiffs’ background, patent business lack of analysis qualifications of the wit- fully anticipated he an- he testified testimony is es- as well nesses increases, justifying profit his as- nual understanding prob- sential .to sumption on confronts us. lem expected normal increase in “Just prior Lysfjord Mr. testified sales, promotional good will company, of the aabeta the formation * * *” work, [Tr. 711.] years twelve acous- he had worked accountant, Hamiel, Mr. Frank evenly industry, which were tical tile merely performed the mechanical installing selling, func- between divided figures given computing plaintiffs tion him difficulty encountered in dis- by plaintiffs. posing of the one and one-half carloads sup- Flintkote tile which had been What, then, plaintiffs’ estimates plied Financially, plaintiffs them. went they what factual basis were relatively into business with a small grounded? essence, computation In capital ($6,000), hopes investment profits of sumption on the lost was based as- increasing capital by their account plaintiffs that would make plowing profits enterprise. back into the working as for in much themselves they year operation first as and their study A adjudicated of the cases in employer, Co., R. Downer made to- W. readily this dispels any impression area gether from in their sales their best damages gov- that this is year going working concern; for that by application erned of the common thereafter, profits increase would as certainty. law rule of reasonable annually. words, In much long cases departed 50% have since from this they thought they could have sold litigation. Story rule in antitrust Parch- per a carload of acoustical tile month Paterson, supra, ment Co. v. 282 U.S. at 1952; per in one and one-half carloads page 565, 51 S.Ct. 248. Just how far 1953; per month in two carloads they gone have imposing in the risk of gross price month 1954. The sales in of uncertainty on defendants we must now $18,000, a carload was estimated at consider. profit per net car- with a or $3600 20% Preliminarily, it should foe observed profit load. The factor was de- 20% underlying the reasons the evolu- adding plaintiffs’ rived from com- 10% tionary prov- liberality trend toward in profit missions made 10% ing damages grounded logic in Thus, Downer Co. on their sales. policy. principal sound Two have factors profit partner ap- total for each net First, influenced the courts. the self- proximated 1952; $21,600 $32,- intangible subject evident nature of the 1953; $43,200 matter. To ascertain would have what each, $97,200 cumulative total from trying been as difficult as to deter- earnings were which actual deducted to cryptic mine should In what be. anticipated profits loss leave a net Judge Wyzanski, private words of ain $75,788.50. also shown that action, go antitrust can’t “You a book actually profit made a net Cape and look for the answer.” Cod gross sales 5% 1953; 11% Cranberry Food Products v. National (This variance 5% Ass’n, D.C., F.Supp. 900, 910. Sec- significance peculiar alone is legal ond, wrongdoer maxim that a plaintiffs’ theory soundness of ages.) of dam- profit by wrong. light should not his In uncertainty surrounding intrinsic of the foregoing represents the sum and problem, responsibility this plaintiffs’ evidence on substance this large which lies in measure with the The omissions are issue. manifold and liable, long found defendant it has significant. Nowhere in record is presents felt an ideal situa- substantial evidence of the application tion for of that doctrine. during industry state this three Supreme Court, As stated period. year There is no evidence that “ * * * probably plaintiffs would have obtained a defendant whose pur- wrongful could more business has conduct rendered dif- chased Flintkote tile on a direct pre- basis the ascertainment ficult showing damages made plain- in that of the ex- cise tiff, suffered availability of such complain istence business еntitled to ability plaintiffs’ to undertake addi- be measured cannot with the only tional work. We know precision that busi- same exactness and competitive” “very ness was possible.” would otherwise

392 v. of New York clear Eastman Kodak Co. distinction meas- between the Co., proof necessary U.S. Material 273 ure Southern Photo of establish 379, 400, 405, 359, 684. 71 L.Ed. petitioner 47 S.Ct. the fact sus- had Story damage, Paterson v. some Cf. Parchment Co. tained meas- Co., Paper supra, 282 U.S. proof necessary ure Parchment of to enable Bigelow 248; 563, jury v. page 51 to fix the at S.Ct. amount. 251, Pictures, Inc., recovery precludes 327 U.S. rule which RKO Radio 264-265, 574, damages 652. applies 90 L.Ed. of 66 S.Ct. uncertain to such as are not the certain result of the setting modern is this damages wrong, not to those developed. rule has definitely attributable controlling that the take it We wrong respect only uncertain damages seeking for loss today in rule of their amount.” is that cases profits antitrust of 248, 51 250. 282 U.S. S.Ct. required plaintiff to establish is Bigelow Inc., Pictures, Cf. v. RKO Radio probability existence reasonable supra. defend between connection some causal Although there be instances wrongful loss and some act ant’s where this distinction does not advance has Once that anticipated revenue. particular contro- resolution of a permit jury will accomplished, the versy, purpose here useful serves a es just reasonable “make ted to accentuating paucity of evidence damage relevant based timate profits. of lost accordingly.” data, its verdict render Inc., Pictures, Bigelow RKO Radio v. types There are three of evi- chief 264, page 66 S.Ct. supra, U.S. at 327 approved have which the dence decisions dis drawn page The cases 580. damages. the basis for as the award proof quantum of between tinction necessary (1) plaintiff or Business records distin to show fact predecessor his before the damage; guished the amount from (2) сom- Business records of arose.25 the more is former toas burden enterprises parative but unrestrained words, the stringent In one. fact during ques- particular period in shown before injury first must (3) opinion Expert based tion.26 27 to estimate allowed (1) (2) items damage. amount Supreme important Court In all three this articulated Supreme Court field, verdict decisions Story damage proof dichotomy of the basis was sustained on case. Co. Parchment prior success either business is, uncer- predecessor.28 plaintiff there was There or his “It true history course, previous dam- extent of business tainty as to comparable case at none nature in the age, there damage; history is a The absence of such bar. fjact Co., Grape 1035, 1348; In- Frey Juice Theatre S.Ct. 96 L.Ed. v. Welch Son& 25. Pictures, 114; Rankin H. Radio Cir., William vestment Co. v. RKO F. 240 4 Cir., etc., Posters, F.Supp. Inc., D.C., 2 72 650. Bill v. Associated Co. 152. F.2d 42 Frey Grape Co., 27. & Son v. Welch Juice Loew’s, v. Theatres Goldman supra; 26. William William H. Rankin Co. Asso- v. Cir., 103, Fed.Supp. 164 F. affirmed 3 Posters, supra; 69 Bill Bordonaro ciated 811, U.S. 334 denied certiorari Pictures, 2d Theatres Paramount Bros. supra. v. 1742; Bordonaro 92 L.Ed. S.Ct. 68 Pictures, Paramount v. Theatres Bros. ‍​​​‌​‌‌‌‌‌​‌​​‌‌​​​​‌‌‌​​‌​‌‌​‌‌​‌​​‌‌‌​‌‌​​​​​‌‍v. Eastman Kodak Photo 676; Co. Southern Towne Cir., Milwaukee F.2d 203 2 Story Co., supra; Cir., Material Parchment Loew’s, F.2d 190 Corp. Paper Corp. Co., Paterson Century-Fox Co. v. Parchment Film Twentieth supra; Bigelow Cir., Pictures, Corp., 194 F.2d v. RKO Radio Theatre Brookside Inc., supra. U.S. denied certiorari newly-formed companies busi- m their from made fatal, exclusion even total for during years any period. actionable, evidence formative if substantial ness is though, damages Here, be of adduced.29 only plaintiffs’ We es- have own introduce a plaintiffs did endeavor to testimony timate. Yet their own dis- is, history. type prior That business of managerial closes their ex- total lack of per- sought past by they their show knowledge perience of lack and their of what Co. the Downer with formance operations the financial of an аcoustical likely expected profits would their business. tile However, all business. a new The decision in William H. Rankin highest their evidence of showed was Posters, supra, Co. v. Associated Bill unspecified during peri- commissions upon sup- appellees, relied does not profits on company’s od what port position, explained by their for as only They selected their sales had been. Judge Tool v. Chase Baush Mach. Co. segment There the business. of America, Cir., Aluminum Co. of 2 79 records over-all no evidence of the F.2d the Rankin decision Co.; whether Downer nor evidence (which authored), he also whole; or company prospered as a “ * * * upheld the admission profit on or less it took more whether plaintiffs’ profits, of an estimate lost gains compensate for sales proper there was a for esti- basis parts of the business. or Further, other losses mate in case afforded a size no evidence of there is period profitable operation prior re- Company, or financial Downer to the defendants’ unlawful inter- compared sources to that of prevented ference which continu- Company. Indeed, plaintiffs con- Aabeta ance of the former success.” af- knew little about ceded that itself, In the Baush case held the court Company. fairs of the Downer testimony plaintiff’s inadmissible the expressly Though Supreme Court president estimating profits.33 future ruling validity com withheld We have reviewed the cases fa- most Bigelow case,30 parative figures in the appellees, vorable to but we subsequent decisions lower court any fraught unable to discover case so accepted them picture cases have motion uncertainty bar, with as the one which where Where similarities were shown.31 upholds jury verdict. This Court comparison such shown basis for only recently against giving cautioned rejected.32 evidence has been “judicial blessing up- ato decision based attempt speculation, surmise, conjecture.” Here no whatsoever was made on figures comparative Cir., oth- Co., introduce v. Wolfe National 9 Lead 225 during F.2d er 434. acoustical tile businesses There the District period Court’s dismissal of an action because in issue. The record is devoid proof injury of failure of any was af- simi- what firmed. during any period. lar business did recognize Company references to the busi- We Downer the fact that as ex-we fragmentary. case, injured ness amine this There evi- feature is no wrongdoing dence of and a defendant what established firms made during period what face the court. In such context the Co., Loew’s, Cir., 29. 32. William Wolfe v. Lead Goldman National Theatres supra. F.2d 427. Chiplets, Inc., Dairy Cf. 33. Prod June page 266, 30. page 327 U.S. at S.Ct. at D.C., Co., F.Supp. holding ucts 580. conclusionary estimates claimant’s Century-Fox Corp. See Twentieth Film officers insufficient evidence Corp., supra. ground judgment v Brookside Theatre loss of profits. ordinarily searched ed the record will dam- it could award something ages eye. injuries microscopic up Yet the date incurred began. urges required ver- Appellant better is sustain the trial guess. proper day dict than a mere interested cut-off date original complaint action was filed. The Supreme Court stated .As July 21, was filed on 1952. The amend- Bigelow Inc., Radio Pictures v. RKO complaint 23, ed was filed March on supra, May 4, 1953. The trial commenced on case, even where “In such a special 1955. No was rendered verdict wrong: by has his own defendant apportioning damages par- any computa- prevented precise more a segment Thus, ticular of is time. it tion, ver- jury not render a apparent question permeates that this guess- speculation or dict based on damage the entire a award in substan- work.” found, tial manner and if error be Where, here, sole evidence perforce prejudicial. testimony of profits is thе to loss of inexperienced busi- plaintiffs, both propositions Two well-settled of stating they operations, had what ness govern law the determination of this infancy during expected make Succinctly stated, are, issue. they that in- newly-created enterprise based a plaintiff a is entitled to all dam recover most computations34 accurate ages injuries proximately by for caused working as sales- money they had made wrongful prior acts committed years firm in established men for an filing action;35 conversely, no at- question, preceding with those plaintiff a is not entitled to recover having tempt to establish made damages injuries resulting for from (cid:127)comparison the businesses as to either wrongful subsequent acts committed predicated years, the verdict or the filing of the action.36 The time stand. cannot evidence on such wrongful controls measure act damages. Thus, neces imply it becomes that not hold nor We do sary plaintiffs’ upheld under ascertain whether could not be verdict in testimony juries by prior solely were caused act or on the circumstances they only pro if whether are attributable plaintiffs. holdWe repetitive esti tracted qualified these conduct acts make beyond com which continued mates, their date record must show upon which was filed. action petency basis the factual conclusions. rest their position appellees’ It Which Time Period B. wrongful only there was one act Damages Recoverable. Were e., i. instant “the act of terminat ing permanently appellees’ below, ob- strenuous over source court supply” 19, February and instruet- 1952. jection, admitted average lag plaintiffs’ computations if some time between 34. The compensation earnings monthly therefor, Downer sales and 1951 figure in all their tabula 1950 sales were to be included in the base Co.—the aggregate figure patently and dis incorrect then the 1952 tiоns—are only They sales should be commis excluded. But this was reflect not torted. during year, base not done. Both were included on earned sions earned rationalization that an undisclosed sums accurate allocation include also but among particular years paid For until could not be 1951. averag Dysfjord’s purported inaccuracy example, made. This for a made basic e $1,580.00. monthly earnings This least of at 50%. adding figure total was arrived Loewe, 35. Lawlor v. 235 U.S. 35 S. during 1951, $12,789.- amount received he 170, 59 L.Ed. Ct. 341. sales; made in 1952 for that received to85 C.J.S., Damages, 193, p. 1951, $6,221.00. § That sum was then 36. appear It would basic twelve. divided Thompson’s declaration time Mr. "At the it is trial clear true * * * appellees day Flintkote would were still made that only competitive longer under the re- sell to limitations alleged conspiracy sulting conspiracy.” from overt act now charged against [Appellees’ Brief, p. defendant 108] say ap- * Thereafter, * * sought held. to be “[A] ef is in sell pellees, continued refusal during fect day renewed con each of its conspiracy could execution Co,, tinuance.” United Borden States v. re- already implied manifested from the 188, 202, U.S. S.Ct. argument Appellees’ contains fusal. L. Accordingly, Ed. 181. position If dilemma. inherent plaintiff’s “Each time the interest February, 1952, announcement that the is invaded an act the defend- the termination marked ants, he has new action. cause of subsequent refusal any conspiracy, then particular For that he is invasion be a express implied, sell, to would at once ages, to entitled recover as dam- If, on actionable. not lawful act and only injuries for the he hand, assume we were to the other once, suffers at but also for those he day, conspiracy on did not end the will suffer the future from that re- continued to infer we would have particular invasion, including what sell; otherwise, plaintiffs could to fusal during he has suffered and will suf- show succeed, to fails the record Loewe, fer after trial. the Lawlor v. by attempt plaintiffs after any made 522, 536, 170, 235 U.S. 35 S.Ct. 59 acous- February purchase to L.Ed. 341. he But can once not at Flintkote. tical tile from anticipated invasions, recover for though re- the Appellees’ they characterization of even general same are of the 19, "per- February as a on fusal character he of as those con- mere already fixed manent” and act is a has sustained.” Momand important, clusion, incorrect. more D.C., Exchange, Universal Film things, an- very the In the nature F.Supp. 996, finality. could lacked nouncement A case on almost all fours the with Flintkote, on more than that mean Importing instant case is Connecticut unalterably absolutely day, Distilleries, Cir., Co. v. Frankfort dealings opposed with future private F.2d which also involved a unequivo- plaintiffs. Appellees confuse antitrust action under the Act. Sherman permanency. cality Flintkote’s with plaintiff, distributor, There the im- position nor neither irrevocable conspiracy defendants, between legal duty to It was under no mutable. manufacturer, distributors Frankfort, and the position. to that On adhere trary, prices; to maintain fixed its completely free times it was at all join conspiracy; refusal to and the modify views. to reconsider its consequent by sup- refusal Frankfort ply plaintiff products. with Frankfort This cause action is founded judge damages The trial restricted continuing nature. of a act before those sustained the action was express constituted no refusal to deal brought appeal and on the Second Cir- refusal to that time. deal at more than addressing cuit, precise itself just injuries were not caused Plaintiffs’ Court, held, before this re- by announced but rather refusal explicit coupled from the refusal “Neither do we sulted find error implied persistence plaintiff’s appeal. in the an- with The recov- Indeed, ap- damages only course of conduct. nounced erable those sus- recognized pellees plaintiff the con- themselves tained from the time tinuing conspiracy for in nature cause action up accrued brought. Frey assert their brief that: time the-suit was Son, Inc., Cudahy Packing Co., & D.C., Among controlled the defendants. Damages 243 F. 205. year assets was a fifteen leasehold brought accrue after suit is can interest in the theatre. The court held not be recovered unless action properly could consider they are done be during the result of acts profits evidence of the theatre’s fore although commenced. period, suit was Law after accrued Loewe, 522-536, lor v. U.S. action, commencement of the one fac- S.Ct. 59 L.Ed. 341. Here the determining tor in the extent of in- plaintiff’s damages, any, juries after plaintiff suffered result wrongful commencement of were due right the suit deprivation of its refusals, to continued refusal or to continue business. conspiracy, furtherance of the The Brookside ease is illustrative supply prod Frankfort very past distinction between the ucts after that time. unlawful recurring situations; ac- act give acts which would rise such tion plaintiff’s for the destruction of damages had from their nature analogous ordinary business is to an carrying be committed out tort claim for a In such broken arm. conspiracy suit was after instances, plaintiff’s causes brought. impossible It would injury exist; only have ceased predict long how such a Here, though, plain- effects remain. would long existence or how remain in injuries repetitive tiffs’ from resulted plain the refusal sell causes, day-to-day implied refusal and, tiff if would even continue to sell to them. Both the cause and damages could, sense, such in be always the effect Yet continued. there refusing treated as the result possibility existed the brought, supply before was suit change Thus, position. would speculative.” purely would be was no assurance continuation page beyond day. F.2d particular at any causal acts Cudahy Packing Co., Frey In & Son v. Appellees assail the limitation of dam- supra, where identical age merits, rule on its but we find no again [2;43 issue, F. the Court stated compelling discarding so reasons for 206]: day late in the such well-established damage only only preserv- “In this case the rule. Not ing need for proved by plaintiff certainty was the loss semblance some profits law, relatively simple pro- it would have made on but also Cleanser, averting Old Dutch resales of cedural method the time buy pitfall it had been able Old Dutch limitation this result. dictates price Cleanser which other at at procedure proper to be followed The jobbers could dam- obtain it. Such seeking injuries recovery for caused age damage is a which occurs from by occurring filing acts after the day day, damage and the on one separate suit, action to file day necessary is not the result of done Bordonaro Bros. Theatres by an act done at defendant an Pictures, sup- supra, Paramount or a earlier date.” Bigelow plemental action, v. RKO Radio Pictures, Inc., supra, Cf. Savannah Theatre & Co. or adminis- Lucas as the Jenkins, 34.12, (S.D. justice 8 F.R.Serv. Case 2 tration of re- dictates Ga.1944). by supple- mand of the instant complaint. mental by appellees, decision The cited Twen Century-Fox Corp. tieth Film v. Brook acceptable absence The basis Corp., supra, side segregating damage Theatre is not con for award makes trary. unnecessary In that case defendants’ unlaw it to consider whether practices compelled plaintiff ful complaint, superseding plead- sell amended ing, corporation its theatre employed business to a could be sustain covenant through the execution of this 1953. Wheth- March award represent our not not affect to sue does not er it did disposition did would covenantors shall be issue. of this compensation full strued as for the Sue, Vis a The Covenant Not C. alleged damages claimed to Damages. Vis the covenantors suffered July 31, 1953, the action On after original complaint their trial, ex- filed but before complaint, but their first amended agreement “Cov- denominated ecuted an only partial compensation is for, there- named to Sue” certain enant Not with ” * * * co-conspirators Flintkote. than meaning The words is the italicized plain- agreement By terms of However, inconclusive. two con- best agreed action tiffs to withdraw can inference be drawn from clusions exchange against covenantees in First, the document. intend- was not $20,000.00,expressly reserv- the sum of ed to full a release or constitute ing rights defend- therein all compensation. Second, precise im- ant Flintkote. damage port statutory pro- of the treble question presented whether vision on cannot the final settlement $20,000 from subtracted should be accuracy, ascertained scientific damages fixed the actual spectre hardly it can be doubted that damages ($50,000) verdict said before potential liability three-fold influenced trebled, should the award whether negotiations. $20,000 de- first be trebled and then damage section reads as treble $150,- ducted from the trebled amount follows: produces a 000. The former method injured $90,000 judgment “Any person meth- who shall be while the latter $130,000 judgment, or property od in a in his or rea- results business $40,- anything difference in and cents of son of in the dollars forbidden laws sue antitrust therefor 000.00. any district court of United the parties stipulated The that all facts * * * States and shall recover concerning effect amount and damages by sus- threefold the him said withheld from covenant should be suit, tained, costs of in- jury question and the left cluding attorney’s a reasonable fee.” judge. He District determination jury decided should 15. that the verdict U.S.C.A. § aggregate trebled then the sum congressional Thus, fiat, pursuant to by $20,000. diminished is trebled. award Here the reveals, damages placed So far our research this verdict the actual at question $50,000. impression Superimposing statutory is a appellate for an first Nevertheless, sanction, liability the res- court.37 collective total for applica- alleged clearly $150,000. olution of it lies violation is firmly joint principles tion liability rooted Flintkote, co-conspirator, if a would objectives of and the manifest jointly severally under liable well- general laws in and the antitrust principles settled of law for the entire damage provision particular. treble (1) plaintiffs amount had suc- germane portion The of the covenant prosecuted any cessfully all of provides, co-conspirators, (2) juris- other Twenty acquired sum Thou- could be “That diction over the ($20,000) paid consequently herein only sand Dollars offenders and Accordingly, consideration the covenantors as sued. However, judge Exchange, in an 37. another District Growers decided March unreported ease. Smith Winekler & reached the same conclusion as did Fruit Products v. California below. Citrus Co. court impose Moreover, put ‍​​​‌​‌‌‌‌‌​‌​​‌‌​​​​‌‌‌​​‌​‌‌​‌‌​‌​​‌‌‌​‌‌​​​​​‌‍an contrary settlement additional does not would result Flintkote, litigation discourage premium serves

burden on but rather liability. against only policy to militate settlements. not the encourage litigation should The is to what extent law to the ex- at pense compromise. it do so? Irrespective nature liability The collective action, plaintiff en the cause alleged conspiracy found this at of his titled one full satisfaction trial, $150,000. was committed, If no error had joint de claim in an action amount this is the bar, as it was In fendants.38 tried, the case received. should have by jury partly partly plaintiffs having already The received court, assuming no error $20,000, proper to deduct evidence, such in the introduction of Any sum from the amount. trebled be achieved satisfaction would not other method resulted in would have sum, which added the award of plaintiffs receiving than thе whole less $150,- sum, not total did settlement to which were entitled. Attorney’s Fees; D. and On Below treble that the We told Appeal. statutory damage unique provision ais holding prejudicial The there was penalty, pro re tanto and therefore reversal, requiring error in this com from the duction should be made unnecessary renders a consideration pensatory The non-com itself. verdict arguments concerning advanced pensatory akin of the award is share propriety of as at- the amount awarded punitive exemplary or to the award of torney’s fees, requested and of the sum damages. punitive; dam In case legal performed services in connec- ages joint liable for tortfeasors are appeal. tion with Tool Baush Mach. compen merely amount, entire satory America, supra; Co. niggardly Co. of Further, con Aluminum part.39 damage Distributing provi Corp. Paramount Film the treble struction of Village Theatre, Cir., in clear F.2d 721. would do violence to the sions Congress. private anti tent of judgment reversed and the important and ef action is trust proceedings cause remanded for further combatting unlawful fective method expressed not inconsistent with the views practices. The business and destructive opinion. in this complements private Govern suitor enforcing laws. the antitrust ment Judge (concur- STEPHENS, Circuit damage provision de The treble signed ring). the in stimulate to foster and opinion private persons maintain I concur with insofar as terest ing damages. economy.40 subject competitive I it treats express a free and rulings efficacy opinion weakened as to Its should objections judicial to the evidence. construction. Lawhon, 51, 1122; Co., 52 S. States v. Borden 347 38. Davis v. Ark. United 186 903; 514, 703, 74 S.Ct. 98 L.Ed. 887. W.2d U.S. City Lines, States v. National United Clark, 287, Reizenstein v. 39. 104 7 Iowa 1169, 334 U.S. 68 S.Ct. 92 L.Ed. 3 588; Waggoner Wyatt, Tex. N.W. 43 1584; Corp. Karseal v. Richfield Oil Civ.App. 75, also, 94 1076. S.W. See Cir., Corp., 221 9 F.2d Maltz v. Gas-Light Washington Lansden, Co. v. Sax, Cir., 2; Weinberg F.2d 172 U.S. 19 S.Ct. 43 L.Ed. Refining Co., D.C., F.Supp. Sinclair 543. Service, 40. Lawlor v. National Screen U.S. S.Ct. 329. 75 L.Ed.

Case Details

Case Name: The Flintkote Company, a Corporation v. Elmer Lysfjord and Walter R. Waldron, Doing Business as Aabeta Co.

Court Name: Court of Appeals for the Ninth Circuit

Date Published: Jun 3, 1957

Citation: 246 F.2d 368

Docket Number: 15005

Court Abbreviation: 9th Cir.