United States Court of Appeals

FOR THE EIGHTH CIRCUIT

_____________

No. 95-2976

_____________

Community Publishers, Inc.; Shearin, *

doing business as Shearin & Company *

Realtors, Inc., *

*

Plaintiffs - Appellees, *

*

v. *

*

DR Partners, doing business as Donrey *

Media Group; Thomson Newspapers, *

Inc.; Northwest Arkansas Times, * Appeals from the United States

* District Court for the

Defendants, * Western District of Arkansas.

*

NAT, L.C., *

*

Defendant - Appellant, *

*

Little Rock Newspaper, doing business *

as Arkansas Democrat-Gazette, Inc., *

*

Movant. *

---------------------------- *

*

United States of America, *

*

Plaintiff - Appellee, *

*

v. *

*

NAT, Inc., *
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*

Defendant - Appellant, *

*

DR Partners, doing business as Donrey *

Media Group, Inc., *

*

Defendants. *

------------------------------- *

*

Freedom Communications, Inc., *

*

Amicus Curiae. *

___________

No. 95-3165

___________

Community Publishers, Inc.; Shearin, *

doing business as Shearin & Company *

Realtors, Inc., *

*

Plaintiffs - Appellees, *

*

v. *

*

DR Partners, doing business as Donrey *

Media Group, *

*

Defendant - Appellant, *

*

Thomson Newspapers, Inc.; Northwest *

Arkansas Times; NAT, L.C., *

*

Defendants, *

*

Little Rock Newspaper, doing business *
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as Arkansas Democrat-Gazette, Inc., *

*

Movant. *

--------------------------- *

*

United States of America, *

*

Plaintiff - Appellee, *

*

v. *

*

NAT, Inc.; DR Partners, doing business *

as Donrey Media Group, Inc., *

*

Defendants. *

------------------------------- *

*

Freedom Communications, Inc., *

*

Amicus Curiae. *

___________

No. 95-3355

___________

Community Publishers, Inc.; Shearin, *

doing business as Shearin & Company *

Realtors, Inc., *

*

Plaintiffs - Appellees, *

*

v. *

*

DR Partners, doing business as Donrey *

Media Group; Thomson Newspapers, *

Inc., Northwest Arkansas Times, *
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*

Defendants, *

*

NAT, L.C., *

*

Defendant - Appellant, *

*

Little Rock Newspaper, doing business *

as Arkansas Democrat-Gazette, Inc., *

*

Movant. *

--------------------------- *

*

United States of America, *

*

Plaintiff, *

*

v. *

*

NAT, Inc., DR Partners, doing business *

as Donrey Media Group, Inc., *

*

Defendants. *

------------------------------- *

*

Freedom Communications, Inc., *

*

Amicus Curiae. *

___________

No. 95-3358

___________

Community Publishers, Inc.; Shearin, *

doing business as Shearin & Company *

Realtors, Inc., *
-5-

*

Plaintiffs - Appellees, *

*

v. *

*

DR Partners, doing business as Donrey *

Media Group, *

*

Defendant - Appellant, *

*

Thomson Newspapers, Inc.; Northwest *

Arkansas Times; NAT, L.C., *

*

Defendants, *

*

Little Rock Newspaper, doing business *

as Arkansas Democrat-Gazette, Inc., *

*

Movant. *

--------------------------- *

*

United States of America, *

*

Plaintiff, *

*

v. *

*

NAT, Inc.; DR Partners, doing business *

as Donrey Media Group, Inc., *

*

Defendants. *

------------------------------- *

*

Freedom Communications, Inc., *

*

Amicus Curiae. *
The Honorable H. Franklin Waters, United States District Judge for the Western 1

District of Arkansas. The opinion of the court is reported at Community Publishers,

Inc. v. Donrey Corp.,892 F. Supp. 1146 (W.D. Ark. 1995).

The United States also filed a Section 7 case against NAT and Donrey. The

2

District Court consolidated the cases for trial.

The private plaintiffs have filed a motion to dismiss these appeals as moot. That 3

motion is denied. An issue raised by NAT and Donrey is whether the District Court

erred in awarding attorney fees and costs to the private plaintiffs. The award of fees

and costs can be sustained only if the private parties are found to be prevailing parties.

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_____________

Submitted: April 11, 1996

Filed: March 25, 1998

_____________

Before BOWMAN, WOLLMAN, and HANSEN, Circuit Judges.

_____________

BOWMAN, Circuit Judge.

NAT, L.C. (NAT) and DR Partners d/b/a Donrey Media Group (Donrey) appeal

from the judgment and amended judgment of the District Court. The case concerns 1

the lawfulness of a newspaper acquisition. After a bench trial, the court (1) held that

NAT's acquisition of the Northwest Arkansas Times (the Times) violated Section 7 of

the Clayton Act, 15 U.S.C. § 18, (2) ordered NAT and Thomson Newspapers, Inc.

(Thomson), from which NAT had purchased the Times, to rescind the transaction, and

(3) awarded attorney fees and costs to Community Publishers, Inc. (CPI) and Shearin

Inc. d/b/a Shearin & Company Realtors (Shearin), the private plaintiffs who challenged

the acquisition. Thomson's motion to stay the rescission order pending the disposition 2

of these appeals having been denied, rescission has taken place and Thomson has sold

the Times to a third party.3
See Clayton Act § 16, 15 U.S.C. § 26; Fed. R. Civ. P. 54(d). We must decide the

various arguments for reversal asserted by NAT and Donrey before we can say whether

the private plaintiffs are in fact, at the end of the day, prevailing parties. These appeals

therefore are not moot.

The standing of the United States to maintain its Section 7 action is

4

unchallenged. Resolution of this issue affects only the private plaintiffs.

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Plaintiffs' theory of the case, which the findings and conclusions of the District

Court fully support, is that the acquisition of the Times by NAT likely would have

anticompetitive effects in the local daily newspaper business, because the acquisition

would result in NAT and Donrey, both under the common control of Jack Stephens and

his family, owning both the Times and the Morning News of Northwest Arkansas (the

Morning News), the two leading local daily newspapers, together having a dominant

market share, in the relevant geographic market. Seeking reversal and dismissal of the

complaint, NAT and Donrey challenge virtually all the key aspects of the District

Court's findings and conclusions. We shall address seriatim the issues raised. The

facts of the case are described in detail in the District Court's lengthy opinion. We shall

discuss them only to the extent appropriate to our resolution of the issues.

I.

Appellants argue the District Court erred in determining that the private

plaintiffs, CPI and Shearin, suffered antitrust injury. We disagree. 4

CPI, which asserted standing as a competitor of the Times, was required to show

injury or "loss of profits from practices forbidden by the antitrust laws." Cargill, Inc.

v. Monfort of Colo., Inc., 479 U.S. 104, 116 (1986). Though "Cargill has imposed

significant barriers to competitor attempts to enjoin merger transactions," Phototron

Corp. v. Eastman Kodak Co., 842 F.2d 95, 102 (5th Cir.), cert. denied, 486 U.S. 1023

(1988), here the District Court found that CPI's profits were threatened in various ways
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by the anticompetitive aspects of the challenged acquisition of the Times. See 892

F. Supp. 1166-67. Having reviewed the record, we cannot say the District Court's

findings on this point are clearly erroneous. We therefore must agree with the District

Court that "this is one of those rare cases [in which] a competitor plaintiff has

successfully proved a threat of antitrust injury." Id.

As to Shearin, the District Court found a threat of antitrust injury based upon

Shearin's status as a purchaser of advertising in the Morning News. Shearin alleged

that a combination of the Times and the Morning News would raise advertising rates

as a result of the two newspapers' dominant market position. The threat of higher

prices resulting from dominant market power being a primary concern of Section 7, the

District Court correctly determined that Shearin had shown antitrust injury.

II.

NAT and Donrey contend the District Court erred in aggregating their interests

for the purpose of determining whether the acquisition violated Section 7. Appellants

argue that because the Stephens family interests that own NAT are somewhat different

from the array of Stephens family interests that own Donrey, and no single family

member or set of family members possesses more than a minority interest in either

NAT or Donrey, there is no reason to believe that NAT and Donrey would act in

concert to dominate the newspaper business in northwest Arkansas. The District Court

determined, however, based on a careful consideration of the evidence, that the

Stephens family could be expected to act in a coordinated way to maximize the wealth

of the family as a whole. Specifically, the court found "that the various members of the

Stephens family do not pursue separate interests or compete against each other in any

way." Id. at 1170-71. The court's findings on this point are not clearly erroneous.

Thus, it was proper for the District Court to aggregate the interests of NAT and Donrey

for purposes of Section 7 analysis. Cf. Copperweld Corp. v. Independence Tube

Corp., 467 U.S. 752, 771 (1984) (holding that two or more legally separate and
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distinct, although related, entities are not distinct for purposes of conspiring under the

Sherman Act because they are not "independent sources of economic power . . .

pursuing separate interests").

III.

Appellants also contend the District Court erred in defining the relevant

geographic market for purposes of Section 7. The court defined the relevant

geographic market as northwest Arkansas, encompassing Washington and Benton

Counties. The court found that the term "Northwest Arkansas" has come to stand for

"an increasingly integrated economic, social and political unit which just happens to be

located in the northwest corner of the state." 892 F. Supp. at 1157. In addition, the

court found that the Times and the Morning News strongly compete against each other

for readers and advertisers in Washington County, and that the Benton County Daily

Record (the Daily Record), published by CPI, and the Morning News compete with

one another in Benton County. We have reviewed the record and conclude we cannot

say any of these findings are clearly erroneous. Accordingly, the District Court's

definition of the relevant geographic market must stand.

IV.

Appellants argue the District Court erred in defining the product market for

purposes of Section 7. The court found that the relevant product market for antitrust

purposes is the local daily newspaper market. This is, as the court also found, in fact

two markets: one for readers and one for advertisers. Based on the evidence

presented, including expert testimony, the court rejected the view that in northwest

Arkansas national and state newspapers can be considered to compete with the local

daily newspapers, either for readers or advertisers. The court made a similar finding

with respect to radio, television, and circulars and junk mail.
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We recognize that properly defining the relevant product market is a critical and

often difficult task. We also recognize that trial records could be made in a case of this

sort that would persuade the factfinder the product market is in fact broader than just

local daily newspapers. Indeed, we acknowledged as much in Midwest Radio Co. v.

Forum Publishing Co., 942 F.2d 1294, 1297 (8th Cir. 1991), in which we affirmed a

summary judgment for the defendant on a claim of monopolization under the Sherman

Act because the plaintiff presented no evidence to counter the defendant's evidence that

other media were part of the relevant product market for advertisers. But such

determinations are necessarily fact intensive and must be based on evidence that

describes real markets, not hypothetical ones. We are not yet ready to say that for

antitrust purposes local daily newspapers and other media outlets always occupy the

same product market. Having reviewed the record made in this case, we are satisfied

the District Court did not clearly err in limiting the product market to local daily

newspapers. In fact, on this record we believe it would be a considerable stretch to

find otherwise.

V.

Appellants argue the District Court erred in determining it was reasonably

probable the acquisition of the Times by NAT would substantially lessen competition

in violation of Section 7. The District Court found that the combination of the Times

and the Morning News under the ownership of the Stephens family resulted in the

combination's having in excess of 84% of the readers and 88% of the advertising

revenue of local daily newspapers in northwest Arkansas, with the Daily Record

holding the smallish remainder. These high combined market shares of the two

Stephens newspapers clearly raised a presumption that the acquisition violated

Section 7. See United States v. Philadelphia Nat'l Bank, 374 U.S. 321, 364 (1963)

(holding presumptively illegal a merger that would result in single bank controlling 30%

of market in which the largest four banks after the merger together would have a 78%

share). Further, the court found that NAT and Donrey had failed to rebut the
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presumption of illegality. In particular, the court found that barriers to entry are

formidable in the local daily newspaper business, rejecting defendants' arguments to the

contrary. Based on our review of the record, we do not believe any of the court's

findings are clearly erroneous. These findings of fact lead inexorably to the conclusion

that NAT's acquisition of the Times violated Section 7 by creating a reasonable

probability of a substantial lessening of competition in the local newspaper business in

northwest Arkansas.

VI.

Finally, appellants object to the award of attorney fees and costs to CPI and

Shearin. Because our review of the case leaves the status of CPI and Shearin as

prevailing parties intact, they clearly are entitled to recover reasonable attorney fees

and costs. Appellants' arguments to limit the attorney fees and costs awarded are

unpersuasive. The award of attorney fees and costs is sustained.

VII.

We have considered all the arguments raised by NAT and Donrey, and we find

no basis for reversal. The decision of the District Court is affirmed. The motion of

NAT and Donrey to supplement the record is denied.

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.