Source: http://masscases.com/cases/sjc/366/366mass593.html
Timestamp: 2019-04-23 18:00:16+00:00

Document:
PMP ASSOCIATES, INCORPORATED vs. GLOBE NEWSPAPER COMPANY.
BILL IN EQUITY filed in the Superior Court on May 24, 1973.
A demurrer to the bill was sustained by Kalus, J.
Robert J. Ciolek for the plaintiff.
Bertram E. Snyder for the defendant.
TAURO, C.J. This bill in equity was brought pursuant to G. L. c. 93A, Section 11, and the general equity power of the court, c. 214, Section 1, alleging that the defendant committed an unfair trade practice in refusing to accept the plaintiff's advertising for publication in its newspaper. This is an appeal by the plaintiff from an interlocutory decree sustaining a demurrer to the bill, and from the consequent final decree dismissing the bill. We are of opinion that the demurrer was rightly sustained.
a newspaper known as The Boston Globe, and solicits advertising therein. The plaintiff offered to purchase advertising space in The Boston Globe and was willing to meet all specifications and requirements of the defendant in order to secure such space. The defendant, however, refused and refuses to accept the plaintiff's advertising. It does accept advertising from business ventures offering conducted tours and escorted travel groups, which services the plaintiff alleges are comparable to its own. The defendant publishes one of two large newspapers in the area.
General Laws c. 93A, Section 2 (a), makes unlawful any "[u]nfair ... acts or practices in the conduct of any trade or commerce." Section 1 provides that "trade" and "commerce" shall include the advertising or offering for sale of any services or property directly or indirectly affecting the people of this Commonwealth, and Section 11 gives a private cause of action to any person engaged in trade or commerce who suffers a loss as a result of the employment by another engaged in trade or commerce of an unfair act declared unlawful by Section 2. Chapter 93A itself, however, furnishes no definition of what constitutes an unfair act or practice made unlawful by Section 2 (a). Commonwealth v. DeCotis, ante, 234, 241 (1974). Instead, it directs us to consider the interpretations of unfair acts and practices under Section 5 of the Federal Trade Commission Act, 15 U. S. C. Section 45 (a) (1) (1970), as construed by the Federal Trade Commission (commission) and the Federal courts. Accordingly, we must look to these interpretations to determine whether the defendant's refusal to accept the plaintiff's advertising constitutes an unfair trade practice.
where no violation of the common law or the anti-trust acts is shown. Federal Trade Commn. v. R. F. Keppel & Bro. Inc. 291 U.S. 304, 309-313 (1934). Federal Trade Commn. v. Brown Shoe Co. Inc. 384 U.S. 316, 321-322 (1966). Federal Trade Commn. v. Sperry & Hutchinson Co. 405 U.S. 233, 244 (1972). In the Sperry & Hutchinson case, the Supreme Court made it clear that "the Federal Trade Commission does not arrogate excessive power to itself if, in measuring a practice against the elusive, but congressionally mandated standard of fairness, it, like a court of equity, considers public values beyond simply those enshrined in the letter or encompassed in the spirit of the antitrust laws." Id. at 244. In a footnote, the court apparently approved the standards developed by the commission regarding the considerations to be used in determining whether a practice is to be deemed unfair: "(1) whether the practice ... is within at least the penumbra of some common-law, statutory, or other established concept of unfairness; (2) whether it is immoral, unethical, oppressive, or unscrupulous; (3) whether it causes substantial injury to consumers (or competitors or other businessmen). If all three factors are present, the challenged conduct will surely violate Section 5 ... if it is exploitive or inequitable and if, in addition to being morally objectionable, it is seriously detrimental to consumers or others." 29 Fed. Reg. 8325, 8355 (1964).
We have examined the factors set out above in order to determine whether the defendant's refusal to accept the plaintiff's advertising constitutes an unfair trade practice. We rule that the practice in question is not within any recognized conception of unfairness, is neither immoral, unethical, oppressive nor unscrupulous, and would not cause substantial injury to consumers, competitors or other businessmen. Accordingly, we hold that the defendant's mere refusal to sell, without more, does not constitute an unfair trade practice, and is therefore not unlawful under c. 93A.
courts and the commission. Although most of the "refusal to deal" cases have arisen under the anti-trust acts, the analysis therein is applicable to the instant case. In Lorain Journal Co. v. United States, 342 U.S. 143, 155 (1951), the Supreme Court stated: "In the absence of any purpose to create or maintain a monopoly, the [Sherman] act does not restrict the long recognized right of trader or manufacturer engaged in an entirely private business, freely to exercise his own independent discretion as to parties with whom he will deal ([e]mphasis supplied)," quoting from United States v. Colgate & Co. 250 U.S. 300, 307 (1919). "Refusals to sell, without more, do not violate the law." Times-Picayune Publishing Co. v. United States, 345 U.S. 594, 625 (1953). In each of these cases, the court emphasized that more than a mere refusal to deal would be required to violate the Federal acts.
other anticompetitive objective." Ibid. There is no allegation of such anti-competitive motive or effect in this case.
As stated, the commission's treatment of refusals to deal also reinforces the conclusion we have reached. [Note 3] In Matter of Sun Elec. Corp. 69 F. T. C. 571, 595-596 (1966), the commission stated: "`We have not yet reached the stage where the selection of a trader's customers is made for him by the government' (either directly or indirectly), Great Atlantic & Pacific Tea Co. v. Cream of Wheat Co., 227 Fed. 46, 48 (2d Cir. 1915), unless the exercised business policy at issue is (1) reflective of an illegal monopolistic tendency, (2) discriminatory and injuriously affects competition, (3) inherently unconscionable or (4) otherwise violative of public policy.... The right to select one's customers existed at common law, is recognized by statute, and is limited only if the selection is concerted or monopolistic" (footnotes deleted, emphasis added).
to be misleading. However, the language of the opinion seems to have much wider application, and would be relevant to the instant case.
Two other recently republished opinions also indicate that the commission will not strike down a refusal to deal as violative of the Federal statutes unless it involves some anti-competitive motive or effect. See F. T. C. Advisory Opinion No. 28, summary, 69 F. T. C. 1214 (1966), 31 Fed. Reg. 5660 (1966), reprinted in 16 C. F. R. (1974) Section 15.28, where no violation was found in the proposed sale of promotional pamphlets to only certain customers. The commission there stated: "[T]he antitrust laws do not restrict the right of a seller who does not have monopoly power to select those customers to whom he will sell his product, provided that the right is not exercised for the purpose of monopolization or is otherwise linked to an unlawful course of conduct in restraint of trade." See also F. T. C. Advisory Opinion No. 136, summary, 72 F. T. C. 1042 (1967), 32 Fed. Reg. 10567 (1967), reprinted in 16 C. F. R. (1974) Section 15.136, where the commission found no violation in a shopping center developer's proposal to select tenants on the basis of a statistical study purporting to show optimum occupancy mix. The opinion stated that, "in the absence of any purpose or intent to create a monopoly, prospective lessees could be accepted or rejected at will provided the action taken was taken independently and as the result of the lessor's individual judgment."
Our careful examination of the Federal acts and their interpretation has led us to the conclusion that a refusal to deal, without a showing of monopolistic purpose or concerted effort to hinder free trade, is not an unfair trade practice under G. L. c. 93A, and is therefore not actionable. The plaintiff's bill alleges no monopolistic purpose or concerted action. In alleging merely that the defendant has refused to accept its advertising, the plaintiff fails to set forth a cause of action. Accordingly, the court below did not err in sustaining the defendant's demurrer.
[Note 1] The only decision to the contrary is found in Uhlman v. Sherman, 22 Ohio N. P. (N. S.) 225 (1919). However, even the Ohio courts do not follow that case. In Bloss v. Federated Publications, Inc. 5 Mich. App. 74, 83 (1966), affd. 380 Mich. 485 (1968), the Court of Appeals of Michigan said, "That the Uhlman Case ... was not followed by another Ohio court is evidenced by the case of Sky High Theatre, Inc. v. The Gaumer Publishing Co. (unreported, No. 22, 820) in the common pleas court of Champaign county. The court therein stated [in part],... `It should be followed unless it clearly appears to this court that the decision is wrong--which is the case' ([e]mphasis supplied)."
[Note 2] It is clear that the press may be subject to regulation by statutes of general applicability. Opinion of the Justices, 363 Mass. 909, 913 (1973). This includes the anti-trust and trade acts, Associated Press v. National Labor Relations Bd. 301 U.S. 103, 132-133 (1937); Associated Press v. United States, 326 U.S. 1, 20 (1945); Lorain Journal Co. v. United States, supra; Branzburg v. Hayes, 408 U.S. 665, 682 (1972); Kansas City Star Co. v. United States, 240 F.2d 643 (8th Cir. 1957), cert. den. 354 U.S. 923 (1957); cf. Albrecht v. Herald Co. 390 U.S. 145 (1968), and accordingly would include c. 93A.
[Note 3] Judgments of the commission are to be given great weight by reviewing courts. Federal Trade Commn. v. Motion Picture Advertising Serv. Co. Inc. 344 U.S. 392, 396 (1953). Federal Trade Commn. v. Colgate-Palmolive Co. 380 U.S. 374, 385 (1965).

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