Source: https://law.justia.com/cases/federal/appellate-courts/F2/326/13/279169/
Timestamp: 2019-12-12 23:28:12
Document Index: 223352924

Matched Legal Cases: ['§ 26', '§ 26', '§ 15', '§ 1', '§ 2', '§ 2']

H. E. Fletcher Co., Plaintiff-appellee, v. Rock of Ages Corporation, Defendant-appellant, 326 F.2d 13 (2d Cir. 1963) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Second Circuit › 1963 › H. E. Fletcher Co., Plaintiff-appellee, v. Rock of Ages Corporation, Defendant-appellant
H. E. Fletcher Co., Plaintiff-appellee, v. Rock of Ages Corporation, Defendant-appellant, 326 F.2d 13 (2d Cir. 1963)
U.S. Court of Appeals for the Second Circuit - 326 F.2d 13 (2d Cir. 1963) Argued December 4, 1963
Recognizing that in order to obtain a temporary injunction in a private antitrust suit a plaintiff must show "that the danger of irreparable loss or damage is immediate," 15 U.S.C. § 26, the court overestimated both the plaintiff's plight in the absence of such an injunction and the alleviation that this could bring. The court's view might have been sustainable if Rock of Ages had refused, as it did in 1960, to quote Bethel White at all; for then Fletcher could have bid only on the basis of Plymouth White, the added cost of this might have been so prohibitive that it would not have dared to enter a truly competitive bid, and the damages for loss of the contract would be difficult or even impossible to ascertain.2 See Judge L. Hand concurring in Foundry Services, Inc. v. Beneflux Corp., 206 F.2d 214, 216 (2 Cir. 1953). Rock of Ages' offer to supply fabricated Bethel White at the same price that it would bid to other contractors considerably altered this; Fletcher's risk then was simply the spread between what it would have considered a proper bid for furnishing Bethel White of its own fabrication and the price that Rock of Ages might have quoted. There is no way for us to tell exactly what this spread was;3 after hearing the parties, the judge evidently thought the $25,000 which he fixed for the injunction bond was a fair figure. Whatever the spread, there is no showing why plaintiff could not have bid what it would have thought reasonable for Bethel White bought in rough form and fabricated by itself. If its bid was accepted, it could have purchased the fabricated granite from defendant, and, assuming that it correctly conceived its rights under the Sherman Act, could have recovered three times the spread as damages. To be sure, this subjected the plaintiff to the hazards of litigation, although in a knowable and not frightening amount. But, apart from any other considerations, the temporary injunction did not remove that risk, since the bond, specifically required by the statute, 15 U.S.C. § 26, left Fletcher liable for damages if in the end it was determined that Rock of Ages was within its rights in refusing to offer rough mill blocks. If it be said that the injunction put a ceiling on the hazard at the $25,000 specified in the bond, see Russell v. Farley, 105 U.S. 433, 437-447, 26 L. Ed. 1060 (1881); Lawrence v. St. Louis-S. F. Ry., 278 U.S. 228, 233, 49 S. Ct. 106, 73 L. Ed. 282 (1929), there are several answers: The first is that the proof does not show that the amount of the hazard would have been greater than this in any event. A second is that if in fact the bond required of Fletcher would not enable Rock of Ages to recover its full damages, the judge would thereby have failed, to precisely the same extent, in his stated objective to protect the defendant "from damage by a bond should it prevail on the merits." A third is that plaintiff's risk was cushioned by a three-to-one hedge in its favor under its treble damage remedy, 15 U.S.C. § 15.
These considerations as to the lack of adequate showing of irreparable damage gain added force from our serious doubt whether Fletcher met its burden of convincing "with reasonable certainty" that it "must succeed at final hearing." Hall Signal Co. v. General Ry. Signal Co., 153 F. 907, 908 (2 Cir. 1907). It had to rely, not on § 1 of the Sherman Act, but on the harder test of § 2. Although that section condemns actual or attempted monopolization of "any part of the trade or commerce among the several States, or with foreign nations," it is settled that this means a market constituting "some appreciable part." United States v. Yellow Cab Co., 332 U.S. 218, 225, 67 S. Ct. 1560, 91 L. Ed. 2010 (1947); United States v. Griffith, 334 U.S. 100, 106-107, 68 S. Ct. 941, 92 L. Ed. 1236 (1948). Defendant's affidavits alleged and plaintiff's did not deny that several other types of granite were competitive with Bethel White, and that the GSA's specifications for Government buildings using white granite normally permit the use of any of several types. Compare United States v. E. I. Du Pont De Nemours & Co., 351 U.S. 377, 76 S. Ct. 994, 100 L. Ed. 1264 (1956). The specifications here were narrower only because the original building had used Bethel White. If we accept arguendo plaintiff's premise that the quarrying and the fabrication of granite are different businesses, we would still have difficulty in concluding that a decision by the owner of the source of a particular white granite to do its own fabricating violates § 2 of the Sherman Act, a crime as well as an actionable wrong — at least, when, as here, the decision has not been shown to have had adverse competitive impact save as to a single building, and even as to it the Government could avail itself, although at some aesthetic sacrifice, of the close substitutes normally specified as alternatives. We know of no reason or precedent for considering so small a market an "appreciable part." See Report of the Attorney General's National Committee to Study the Antitrust Laws, 44-48 (1955). Despite the conventional antitrust trappings with which the case has been draped, what we have here, so far as the papers show, is essentially a private squabble between two sets of energetic Yankee businessmen. Of the two cases relied upon by the district judge, United States v. Aluminum Co. of America, 148 F.2d 416 (2 Cir. 1945), and United States v. Klearflax Linen Looms, Inc., 63 F. Supp. 32 (D. Minn. 1945), the former does not require detailed distinction and the latter, assuming it to have been soundly decided, see Times-Picayune Publishing Co. v. United States, 345 U.S. 594, 625 fn. 49, 73 S. Ct. 872, 97 L. Ed. 1277 (1953), involved all business with the Government and not merely a single building.
Although we hold the temporary injunction was improvidently issued, we must now take account of the fact that under its compulsion defendant has already sold the rough Bethel White to plaintiff, and we assume that substantial expenses in transportation and perhaps in fabrication have already been incurred. The district court need not allow defendant to retake such granite if that would produce economic waste; it may limit defendant to recovery of damages on the injunction bond. Even as to this it may postpone the assessment of damages until it determines, on full hearing, whether plaintiff is able to adduce evidence that will entitle it to final relief. Lawrence v. St. Louis-S. F. Ry., supra; Madison Shipping Corp. v. National Maritime Union, 204 F. Supp. 22, 23 (E.D. Pa. 1962). If defendant's victory on this appeal is thus rather Pyrrhic, that is an inevitable, although regrettable, consequence of the delays inherent in the appellate process.