Earl Warren: Number 18, Utah Pie Company, Petitioner, versus Continental Baking Company et al. Mr. Alioto.
Joseph L. Alioto: Mr. Chief Justice, may it please the Court. This is a private anti trust suit. In the trial court, the petitioner, the Utah Pie Company won the verdicts. And a judgment was entered on that verdict of $350,000. In addition to winning the verdict, it also secured from the trial court a decree which prohibited the respondents from charging a lower price for the product in the trading area of the petitioner than a charge in those states of California and Iowa, respectively, where the respondents had their plants. During the course of the trial, the respondents timely, made timely motions for directed verdicts. Those motions were reserved. After the jury verdict and the entry of the judgment for the petition, the respondents made motions for judgment N. O. V. and motions for a new trial. The trial courts denied both of those motions. When we got to the Court of Appeals, the Court of Appeals wiped out the judgment for money damages and it wiped out the decree for injunctive relief and in the course of doing it said that the cause should be remanded to the dis -- to the District Court with a direction "to enter judgment for defendants," that was the direction. A ground relied upon the Court of Appeals for reversal of both the money judgment and the decree was that there was insufficient evidence to justify the findings, the verdict of the jury, and the judgment that was entered on that verdict.
Potter Stewart: There were -- there were separate verdicts, were there, against each one of these three defendants? I know that the conspiracy -- the conspiracy charge was found against the plaintiff by a --
Joseph L. Alioto: There were separate verdicts Justice Stewart. The verdict against the Continental Company was for $88,000, the verdict against the Pet Company was for a $152,000, the verdict against Carnation was for $93,000, and then the -- the decree ran separately in effect as to each of them. In the original complaint, there was a cost stated for Section 1 of the -- under Section 1 of the Sherman Act and a cost stated under 2 (a) separately. What we in effect said is that the discriminatory price was brought about as the result of some cooperation among three --
Potter Stewart: -- three defendants.
Joseph L. Alioto: -- respondents. But we made it clear and the trial court made it clear that in the event the jury found on both counts that the petitioner wouldn't get the damages from both but that the Court would select one or the other so there was not much of an overlap. Nevertheless, the -- the verdict and the judgments were a separate verdict and judgments because the jury found for us on the -- on the 2 (a) question.
Potter Stewart: For a separate amount against that each would be --
Joseph L. Alioto: For separate amounts against each of them and for separate litigation expenses as I had given them to the Court. That is correct. The three of them aggregated approximately 350.
Potter Stewart: And that was after the jury had covered the amount of actual damages now.
Joseph L. Alioto: After the judge had covered the amount on the jury's verdict, yes.
Potter Stewart: I see, within the -- this $88,000 and $152,000 and $93,000 --
Joseph L. Alioto: Yes.
Potter Stewart: -- represents the trebling by the judge --
Joseph L. Alioto: Represent the trebling by the judge (Voice Overlap)
Potter Stewart: -- actual damages and then plus, plus some cost, is that it?
Joseph L. Alioto: Yes. Well, the actual -- the actual breakdown Justice Stewart is as against Continental, $74,000 and $14,000 for litigation expenses, totaling 88, as against Pet, $44,000 which was trebled to a $132,000 and $20,000 for litigation expenses, as against Carnation, trebled the amount of $87,000 with $16,000 for litigation expenses. Now, actually all that was done Mr. Justice Stewart, was to take a $50,000 attorney fee awarded by the Court.
Potter Stewart: And divide it.
Joseph L. Alioto: And then allocated of course to the amount of the judge. It was an allocation made --
Potter Stewart: I see. (Voice Overlap) I see.
Joseph L. Alioto: That's the way, that's the manner in which it was done. The -- the Court of Appeals reversed both the money award and the decree on the ground that there was insufficient evidence to prove that there was a reasonable possibility of the prohibited effect. There's a reasonable possibility of injury to competition.
William J. Brennan, Jr.: May I ask you though, does that have to be determined as each individual defendant here?
Joseph L. Alioto: Yes, it was determined as --
William J. Brennan, Jr.: Or in other words -- and in other words, if you are right that the Court of the Appeals were wrong, it would require us to say that the Court of Appeals was wrong in each individual case which may mean they might conclude the Court of Appeals is right as to one, but wrong as to two.
Joseph L. Alioto: I think that's correct sir. However, it doesn't mean that in determining the situation with respect to one that you have to ignore the evidence after the evidence. I think you have to look at the entire competitive picture as a --
William J. Brennan, Jr.: I think it was fair to try this out.
Joseph L. Alioto: That's correct. They can be separately --
William J. Brennan, Jr.: Then a -- then a record desires this table in this picture.
Joseph L. Alioto: Yes. It had gone --
William J. Brennan, Jr.: Do you have to read all of that?
Joseph L. Alioto: No. You don't have to read all of that at all. They're the first three volumes of all of the testimony. The briefs then make a specific record as to that record and all it really has to be read in those briefs in those first three volumes.
William J. Brennan, Jr.: But I'm curious, why was it necessary to go to the expense of cleaning such an --
Joseph L. Alioto: Well, one of the very expensive thing, if Your Honor please, it cost the petitioner 50,000 -- $50,000. But the only question here --
William J. Brennan, Jr.: But the issues for us don't require us to examine all that record.
Joseph L. Alioto: Well, the issues -- the issues for the Court, of course, is whether or not the evidence was sufficient and this was all of the evidence that was presented to the -- to the jury. Now, as just a practical matter, there were some problems about cooperation among counsel in the trial court. And I don't want to go into that because that leads to incriminations. And I think that that was one of the things that contributed to this record being as long as it was. But I don't think you have to present whether there are three, four, five volumes of nothing but invoices. And then you have to look at all those invoices, we have made a table of the invoices as a matter of appendices in our brief. Now, that all you have to do is -- and we have documented that data to every invoice in the record that if there's any question about whether our statement is correct, it is there and since the --
Abe Fortas: May I ask you -- may I ask you Mr. Alioto was there any difference in your opinion between the counsels as to what should be the credit for purposes with this Court's review?
Joseph L. Alioto: I -- I don't recall any difference to these opinions with respect to that.
Abe Fortas: So, it's agreed by both sides that you cannot.
Joseph L. Alioto: I believe that is the situation. However, as I say don't think anybody, you have to reorder all those invoices. We have simply documented them and let them there and the sufficiency of the evidence presented to that jury is the issue -- is the issue before this Court.
Abe Fortas: And I just feel real sorry for whoever has to pay that amount.
Joseph L. Alioto: Well, we -- we are -- we are hopeful of course. If in terms of enforcement and in terms of the importance of that private litigation in the antitrust laws that I think that had some -- some important here, but as I say an explanation of why it was necessary to print all that I think involves a question of whether there were certain cooperation between counsel at the trial level and the -- I -- I don't think it's probable to get in -- into that question at the moment.
William J. Brennan, Jr.: But if I -- if understand you correctly, it's because the issue with sufficiency of the evidence, that the appellant should felt that you could not risk, not putting the entire record even though you think yourself and the appellate court doesn't have to examine the entire record to pass on the issues.
Joseph L. Alioto: That's correct. I think it's all done --
William J. Brennan, Jr.: Is there anything that says that that should be done?
Joseph L. Alioto: Well, no. Nothing says that have to be done Mr. Justice Brennan but there was a certain cloudiness about this whole question about when you present tabulations even in the trial court as to whether or not you have to have all of the underlying records there. Now, the decisions go both ways on them and until it's definitely clarified, I think a plaintiff particularly at a certain cert I think a plaintiff has to do it safely. And if he has 4000 invoices and he has a tabulation as we've had this case, on those invoices, it might be alright to put the tabulation in and leave the invoices out.
William J. Brennan, Jr.: Well why is it?
Joseph L. Alioto: And then get in the Court of Appeals and say if the underlying documents aren't here then they fully rejected that.
William J. Brennan, Jr.: Yes. But once you got them in why, why couldn't the original invoices have been just filed here or below without putting in or having it more reproduced.
Joseph L. Alioto: We made an attempt --
William J. Brennan, Jr.: You prepared 40 copies of these damages.
Joseph L. Alioto: We made an attempt to file an -- to file the invoices as original records in this Court and as I understand that from my associates that there was correspondence or some conversation with the clerk of the Court on this matter. As I understand it from my associates the view was taken that they couldn't be filed as original records because they were Photostat or which is more convenient we use Photostats of these invoices --
William J. Brennan, Jr.: Well, that was carried and applied to the Court for permission to do it, without trying to overcome the statute?
Joseph L. Alioto: Well, we didn't apply it to the Court. We did talk about them and we did talk about this matter with the clerk. And the clerk indicated we could then file them as original -- as original document and I don't believe that our -- that we did apply it to Court. However, I -- I do point out that you don't have to read the whole of the record. If that is documented --
William J. Brennan, Jr.: Well, I -- I frankly I am concerned with the expense of the litigation are just getting out of hand anyway. And when we get the record as high as this table as we do in this case, when you tell us that really we don't have to consult it I just think there's something wrong about our rules or something that they should do that for it.
Joseph L. Alioto: Well, we try to get this in as original records. As I say under your rules and perhaps it was to the deficiency on our part that we dealt with the clerk rather than with the Court. And then I have to say that no question about any -- any -- the cor -- for the great courtesy we'd had from the clerk that he was perhaps right in interpreting the rule as he saw at that time, his understanding of it. The Court of Appeals took 88 pages breaking a volume, took 88 pages, printed pages, in order to tell us that we didn't have enough evidence to go to the jury in this case and I think it's apparent just from reading the 88 pages of the Court of Appeals that they were some wrestling with facts and some resolution of factual issues where there was rather sharp conflict in the evidence. In any event, the Court of Appeals enters this judgment in May of 1965. We applied the certiorari in August of 1965 and it was granted. The -- all of the petition was granted and we simply asked a review on the basic questions as to whether or not the Court of Appeals had just served that function of the jury in this case. And the Court added the procedural points involved in the judgment N. O. V. and the applicability of rule, Rule 15. The respondents in this case are three national large corporations, the Pet Milk Company, the Carnation Company, and the Continental Baking Company. This is a Section 2 (a) primary, line price discrimination case. It was brought by the petitioner against the competitors, as I pointed out earlier, the conspiracy account was rejected by the jury. In addition to that, the respondent, Continental had a -- and this is important point when we come to consider the procedural issue. Now, the counterclaim against the petitioner in which the licensed petitioner had violated Section 2 (a) to its damage, the jury agreed and said that the petitioner have in fact violated Section 2 (a) to its damage and awarded damages of one dollar to the respondent Continental. We made a motion for a judgment notwithstanding the verdict and the trial court who granted that motion. The Court of Appeals held that was error and remanded that case for a new trial. That, however, is not before this Court; the only thing that is before this Court is the sufficiency of the evidence for two-way and the procedural points that have been raised.
Potter Stewart: That was a -- Continental's counterclaim only?
Joseph L. Alioto: That's correct.
Potter Stewart: The other two --
Joseph L. Alioto: The other two did not file a counterclaim, just Continental and they got a dollar from the jury, the trial court granted a motion N. O. V. and the Court of Appeals reversed it and come down on the ground of no motion for a directive verdict as they say.
Potter Stewart: So that's reversed now for a new trial?
Joseph L. Alioto: Or a new trial.
Potter Stewart: And that's pending I suppose in the District Court.
Joseph L. Alioto: That's correct. Now, that's not before --
Potter Stewart: Not before us. Not before -- not here.
Joseph L. Alioto: Not before this.
Abe Fortas: You did not apply for certiorari on that?
Joseph L. Alioto: On that, we did not. I think that was just a factual question about whether or not there was injurious impact shown even conceding the violation and the -- the trial court ruled down that ground that even conceding the violation of no injurious impact on the respondents.
Byron R. White: Mr. Alioto, we don't agree with you on the evidence. I beg your pardon. I think the Court of Appeals is correct on the evidence but then we reached the sudden procedural --
Joseph L. Alioto: Yes.
Byron R. White: -- of questions which was in -- discussed in the last case?
Joseph L. Alioto: Yes.
Byron R. White: But only if we disagreed on that.
Joseph L. Alioto: That's correct. We hope that you will never have to reach that point if perhaps therefore we weren't the best advocates on that point that we -- we don't think you have to reach that point. In this case, we are prepared to discuss -- that will discuss it. So as we have some views about the matter. And so far as the factual situation, I'm not going to detail the facts but simply to give you the ultimate, the highlights of what was proven in this record because I think it clearly, under any kind of fact, it's clearly sufficient to have stand the verdict of this jury. The petitioner in this case is a small family enterprise then operating in the intermountain area for some 30 years. The respondents on the other hand are all national concerns and the product we're talking about is frozen pie. The frozen pie business meant little if anything to this national concerns. It was a small part of what they did. But so far as its petitioner was concerned, it was everything of what this is. The petitioner started in the pie business, then when people started buying frozen pies instead of fresh pies, it naturally evolved into the frozen pies that it had been in the Salt Lake are for some 30 years. All of the respondents on the other hand got into the business by acquiring independent firms, all of them, got into the business in that manner. The Court of Appeals accepts an unsubstantiated statement made by one of the witnesses to be affected there. By the time of the trial in this case there were 200 companies involved in the pie business in the United States. However, that ignores the uncontradicted evidence in this record of some rather clear concentration in this industry.
Abe Fortas: Is that the -- when you say pie business, do I also understand frozen pie.
Joseph L. Alioto: Frozen pie, yes.
Potter Stewart: Frozen fruit pie?
Joseph L. Alioto: The only product we're talking about are frozen fruit pies plus mince and pumpkins, we exclude the cream and the chocolate pie definitely. We're talking about the frozen fruit pie.
Potter Stewart: Frozen pies.
Joseph L. Alioto: Basically that's correct.
Potter Stewart: Both eight and nine-inch?
Joseph L. Alioto: Eight-inch basically was involved here although there was some evidence of the nine-inch pie in the industry.
Potter Stewart: That was in the Denver market, I think.
Joseph L. Alioto: I think in -- in the San Francisco market on the nine-inch pie
Potter Stewart: Eight-inch here in Salt Lake.
Joseph L. Alioto: Eight-inch is the basic, the standard --
Potter Stewart: Right.
Joseph L. Alioto: -- size we're talking about.
Speaker: Diameter?
Joseph L. Alioto: That is diameter, I guess. Now, we have a lot of conversation about the ounces and weights in this case. The -- in terms of concentration, here's what the record shows without any contradiction, that as of 1961 in the trading area of the -- of the petitioner, we're going to come to that as to what that means in a moment. But as of 1961 the parties before the Court right now did 92% of all of the business in the heart of the petitioner's trading area, immediately around this plant. Petitioner being the only one that has a plant in this area. All the other had plants that were distantly removed, that's 92%. And on the national level four companies had approximately two-thirds of all the business. And the petitioners were three of those four companies, so the cavalier statements that there are 200 -- 200 companies in this business ought not to me in the light of this uncontradicted evidence that there wasn't a serious concentration in this business at the time of the trial. In terms of selling practices, the petitioners sold on an F. O. B. basis, fast break, all of the respondents sold on a delivered price basis, all of them within geographic zones. And while the zones weren't -- weren't exactly the same with respect to all of the respondents, there were some similarity or some substantial equivalence --
Abe Fortas: Would you remind --
Joseph L. Alioto: -- that they use on their prices.
Abe Fortas: Would you remind me Mr. Alioto how far did you talk of pie sell as far as --
Joseph L. Alioto: The question of the trading territory is important in this case. It sold under the terms of this evidence, it sold in the state of Utah, Idaho, Washington, some Montana, some Colorado. That is the trading. This was defined in the evidence of the three. And when we talk about the Utah trading area regardless of where it was set by the Court of Appeals that was a shorthand expression for saying it that way instead of making a -- reciting a let be all of these --
Abe Fortas: And these figures you gave us just a moment ago applied to this area that you've known this time.
Joseph L. Alioto: Those figures -- the study was made by the respondents themselves applied to the heart of that trading area that is the area immediately around Salt Lake, Utah, and Southern Idaho. The record doesn't show the figures for these larger areas but it does show the two-thirds figures I've mentioned for the national, for the area throughout the United States.
Abe Fortas: So what is the -- some, you can excuse an expression, what is the geographic market here?
Joseph L. Alioto: The relevant market as defined is the market of Utah, Idaho, Washington, Montana, and Colorado. That is the market that was presented to this jury that the market upon which in which the discrimination --
Abe Fortas: And the record does contain market share figures as to that geographic?
Joseph L. Alioto: Not for the entire area.
Abe Fortas: Just as to what area then?
Joseph L. Alioto: For the immediate area of Utah and Southern Idaho.
Abe Fortas: So that your -- the gravamen of your complaint must be based on Utah and Southern Idaho.
Joseph L. Alioto: Well, I -- I don't do -- but the gravamen in the -- it's -- it's -- what we were talking about, we -- our complaint is that wherever the plaintiff traded, they indulged in this discriminatory practices for the purpose of getting in place. This is our complaint. Now, while obviously, the plaintiff is about two-thirds maybe of his business in the immediate area behind the plant.
Abe Fortas: I see.
Joseph L. Alioto: He did try to trade in the Denver market and did trade in the Denver market. He did try to trade in the Northwest market and did trade there.
Abe Fortas: Well, what you're saying then maybe that the purposes of measuring anti-competitive effects and the competitor potential under the 2 (a), your standards maybe different and they are in the Sherman Act case.
Joseph L. Alioto: Well, they -- they certainly would be different than they are in the -- in the Sherman Act case as yet. I think they are the same as they are in the Section 7, Clayton Act cases, and Section 3 of the Clayton Act, and Section 2, the one we're operating at. They're different I think than the Sherman Act because these are incipiency tests.
Abe Fortas: Yes. But even receiving the Section 7 case should have to show something about market share, I should think at least its convention.
Joseph L. Alioto: Well we have -- we have shown the market shares for most of the area based on a study made by the respondents themselves. But we do have the market shares and -- and in these circumstances where you have the only independents that markets in this area. The only independent being Utah Pie, I -- I don't think when you have all of the evidence together there's much question about the injury to competition, not only the possibility of injury but the actual injury to competition. I think that this complaint then was filed in September of 1961 shortly after the respondent Continental came into the Utah trading area with the lowest price in the entire United States. It was about 35% lower than the price charged by these plants. Now, to begin with, all of the respondents and the Court of Appeals admits the price differences or the Court of Appeals didn't say that there wasn't any evidence of price differences or price discrimination that simply said that there -- that there wasn't sufficient evidence of the prohibited effect, so that we start out with an admission by all of them that there were a price differences. In addition to the territorial price cutting or the territorial price differences and the lower price was further removed from the plant itself. There was substantial evidence that these low prices were prices below cost, that they sold to the loss in these areas, substantial evidence on that. There was substantial evidence that the low prices were specifically aimed at this petitioner, specifically aimed at this petitioner. There was substantial evidence of predatory intent by all of the respondents and we review that just in terms of the ultimate facts in a moment. There was substantial evidence that the petitioner itself suffered an injurious impact in terms of price erosion, loss of market share, loss of volume, and damage to the goodwill or the going concern value of petitioner. Before going into each of these separately, that is Pet, Continental, and Carnation, I want to say just a word, another word about the petitioner. The petitioner began the freezing of pies in August of 1957 after having been in the business for some 30 years. In the instilling four years up to the time of the filing of the complaint, it sold in Utah, Idaho, Nevada, Wyoming, Montana, Colorado, California, Oregon, Washington, that area. And that was described as a relevant market area by the economist for the respondents, Mr. Anderson. In September of 1958, the petitioner built a new plant, and it was a good plant and it was an efficient plant and the evidence on that is rather dramatic. One of the respondents, the Pet Company had the manager of its frozen food departments sneak into the plant by fraudulent means. We'll discuss it in a moment when we talk about predatory intent. And he writes a report about that plant, and he said it's a good plant, it's efficiently run, and I can see in his words why this plant is the only real competition we have for the Safeway business. But there isn't any question here about the ability in terms of efficient manager of the petitioner. And I think this has some importance with the whole question of competitive impact. With respect to Pet, Pet got into the business, the respondent Pet will take the cases in that order, Pet, Carnation, and Continental, which is the manner in which the Court of Appeals took it. Pet got into the business by acquiring an independent competitor in Michigan. They're after its milk plants in California and Pennsylvania. So as far a Pet is concerned it has its plants in California, Pennsylvania and Michigan, and it served the entire United States from those three plants. It is important when you come down and analyze how the Court of Appeals regarded markets as just major cities. The Court of Appeals is talking about retail markets and not the manufacturers market.
Earl Warren: Where were those plants, Mr. Alioto?
Joseph L. Alioto: The plants of Pet were in Michigan, California, and Pennsylvania. Those are the Pet plants.
Earl Warren: Yes.
Joseph L. Alioto: And they served the entire -- entire country. In the damage period, this company of course made millions in profits but it consistently sold at loss in this trading area, so far as its frozen food products concerned.
Abe Fortas: Maybe they made millions and --
Joseph L. Alioto: In so far as the frozen pies.
Abe Fortas: Does the record show that it made millions on its frozen fruit pies.
Joseph L. Alioto: It made million of its overall business.
Abe Fortas: Does the record show whether it made money generally on its fruit pies?
Joseph L. Alioto: The record shows that it lost money. Well, you mean whether it made nationally on this. It lost for a period of time even nationally, lost for a period of time even nationally. This was described by the Chief Executive of the Pet Company as investment spending. And during the trial, we -- we think it's just moving in on and independent. During the trial, this was described that selling at a loss for the purpose of getting a franchise in a particular territory. Now, there's an independent located in that area where you decide to make this "investment spending." It seems to me that this was a very thing that Section 2 (a) was originally enacted for in 1914.
Abe Fortas: Was there any distinction in the price which it sold and which Pet sold in the geographic area here involved, and that which it sold nationally?
Joseph L. Alioto: Yes. Yes there was a distinction in price. You go and find in Appendix B, Appendix B in our brief, you will find a documented table, this is where we refer to all of these invoices, a documented table of the discriminatory prices by Pet, that's a comparative Mr. Justice Fortas of the -- of the prices charged in California where Pet have a plant as against the prices charged in the Utah trading area. That goes from the date of July of 1959 to May of 1961. Now, that's a price discrimination predicated upon their quality pie having its label called Pet-Ritz, they were the discrimination between Pet-Ritz and Pet-Ritz in these geographical areas. In addition to that, this Pet-Ritz quality pie was sold to the Safeway Company on what I think is a circuit deal, we'll discuss in a moment. So the Safeway Company under the Safeway label of Bel-air. But it's admitted and stipulated in the evidence that the exact pie sold on to their quality label, they sold to Safeway, the word just simply thought at the end of the production line, you took their quality label in their own box and you simply put a Safeway box to it. So you had two discriminations there, just their Pet-Ritz as against Pet-Ritz sold under that label, and then Pet-Ritz as against the Safeway brand, the Bel-air brand.
Abe Fortas: Now, the Pet-Ritz was sold in which it caused Utah trading area --
Joseph L. Alioto: Yes.
Abe Fortas: -- which means the core of the geographic market in --
Joseph L. Alioto: That's correct.
Abe Fortas: Pet-Ritz was sold in that Utah trading area at a lower price --
Joseph L. Alioto: At a lower price.
Abe Fortas: And it was sold in California where Pet has a plant.
Joseph L. Alioto: -- where the plant was, 750 miles away. Yes.
Potter Stewart: Wasn't there a Swiss Miss?
Joseph L. Alioto: That later on which is there and so-called priced pie as against their economy pie. And the evidence I've been encircled --
Potter Stewart: And Simple Simon was made by one of the others?
Joseph L. Alioto: Excuse me sir?
Potter Stewart: The Simple Simon brand?
Joseph L. Alioto: Simple Simon was made by Carnation --
Potter Stewart: Carnation --
Joseph L. Alioto: -- at the Carnation brand. So that Pet labels are Pet -- Pet-Ritz and Swiss Miss and Bel-air so far as its packed for Safeway, for Safe -- that the Bel-air label belong to the Safeway Company rather than to the -- rather than to the manufacturer. Now, on the -- on the Safeway discrimination, incidentally, you have a difference of about a dollar and fifty four per dozen, that much, 77 cents for case or a dollar fifty four per doz -- dozen.
Abe Fortas: And did Utah plant make a price concession as Safeway too?
Joseph L. Alioto: Utah Pie made some price concessions in the record. This is the basis on which it was found to have violated Section 2 (a) itself. There were some price concession made but they were minimal in terms of its total business. Actually, the price -- actually it sold generally on the basis of the plant fast break, that there was some concessions made in order to get the business. But that -- but those concessions were not lower, if that all and the concessions that were being made by the -- by the Pet Company.
William J. Brennan, Jr.: You say the plant's fast break was that -- that was the identi ?
Joseph L. Alioto: That was a general pricing policy of the petitioner as distinguished from the respondents who had delivered price systems within zones --
William J. Brennan, Jr.: Oh, I see.
Joseph L. Alioto: -- as distinguished from.
William J. Brennan, Jr.: Well, I gat -- I gathered on for example, Pet, was California one zone and Salt Lake was another zone for Pet --
Joseph L. Alioto: Well, they had a -- they have a California zone in Northwest -- a Northwest zone and Intermountain zone.
William J. Brennan, Jr.: Then I suppose Midwest --
Joseph L. Alioto: Yes.
William J. Brennan, Jr.: So there was no uniform -- no uniform price then among zones, was there?
Joseph L. Alioto: Well, there was a uniform -- there was a uniform delivered price --
William J. Brennan, Jr.: Right.
Joseph L. Alioto: -- within the zone and sometimes within two zones. And they made concessions off of that. So it is rather that the lower prices were in the Utah trading area and the lowest price in the entire country as I say was in Salt Lake City. The lowest price to that is the Continental price is $2.55 which precipitated the loss. That's why we brought the lawsuit. Now with respect to the Pet -- Pet-Ritz, Bel-air discrimination that is the Safeway discrimination, the Court of Appeals gets around that by making what I -- what I think that great difference can only be described as findings of facts. It says that the Safeway price discrimination was cost justified. Actually, the evidence showed a cost -- even an attempted cost justification for only a minor part of the period. And that cost justification included among other things the advertising justification which this Court rejected in the recent Borden case. This notion that there's a -- that there's a real cost differential just because you put the canned milk in Borden -- Borden can in one instance and in a private label, the Safeway private label in another instance. So there was a very great conflict in the evidence on cost justification and yet the Court of Appeals to handle this statement case and the Court of Appeals was I think frank in saying that you could misconstrue the evidence unless you put an improper perspective, proper focus for the language used. I submit that that basically is a jury question, putting the evidence in a perspective. That is a finding. The inferences you derive from the evidence. But then secondly, and this one will hurt a little bit, the Court said it doesn't make any difference anyway because Safeway was unwilling to buy from Utah Pie because of the unwillingness of Utah Pie to put in certain quality controls. I just -- I don't want to talk about the evidence except in terms of (Inaudible). On this one I wanted to just talk a little bit about it. That you can see what happened to it in the Court of Appeals. The Court says flatly Safeway was unwilling to buy from you. I think it's what the evidence showed. That sends its manager of the frozen food division down to Salt Lake City. It has a meeting with some competitors in the warehouse down by the railroad somewhere. And he decides to sneak into the plant of the petitioner by posing as a broker from the Northwest who was interested in distributing the products of the petitioner in the Northwest.So we showed at the plant on that -- on that basis and gain his business to the plant. This is the manager of the frozen food division of the Pet Company. He is admitted to the Pet plant. While he is in there, he was writing a report of what he sees and he said, "This is a great plant. It's efficiently managed. It has all of the sanitation. And I can tell you that this is a very serious competitor with it, with a substance up for the Safeway business." Then he goes on further to say, "I can see why Safeway regards this company as the only plant that can pack for it other than ourselves." I remember the Court of Appeal said, Safeway was unwilling to deal with it.
Abe Fortas: Had Safeway been buying the price from Utah?
Joseph L. Alioto: They had bought mince and -- and pumpkin. There's a seasonal pie, a holiday pie, not the fruit pie. Now, in addition to the fact that the Pet manager acknowledges that Safeway had finally told him that this was a one plant that could compete for the business, the petitioner testified that two days before the surreptitious plant visit, he had talked to the Safeway buyer who told him, "You're going to get the business, go out and buy the fruit," apples in this case to count through about 50% of the market. And he said he went out and bought the apples on the basis of that representation. The Safeway buyers couldn't understand and he is asked whether or not he in fact told the Pet people what the memorandum showed. That's its question of word against word or even uncontradicted word is a memorandum, a contemporaneous memorandum against what he was going to say. He said, "No, that isn't so." Then at the trial itself we're able to get out of the brief case of one of the witnesses another memorandum that wasn't produced during the production period which says about this Safeway buyer whose credibility the Court accepted as against all of its conflict. This is kind of a peculiar buyer really, says, this man Young will act as a door opener for us, for our sales personnel. In addition, it says, he is going to send us inter-office memoranda of the Safeway Company but we must never disclose that we got it from you. And these inter-office memoranda will point the way as to the approach you should make to the Safeway people. We ask the man who wrote the memorandum whether he agreed with the buyer about that, his own memorandum, he said, "No." In other words, he denied his own memorandum. We asked the Safeway man, "Did you make these agreements to send your own inter-office memorandum to these people to help them make the sales?" He denied it. Now, with that kind of conflict and I say that -- did that the -- that the inference is almost inevitable. That that was done the Court of Appeals is very gladly says, Safeway wasn't in a fight from them anyway. Now, quality control doesn't mean sanitation, it doesn't mean anything like that, it simply means the bookkeeping system to know when a particular pie was produced. I apologized to going into that kind of detail but this is one clear episode and there are about 10 of them like this where the Court of Appeals accepts the word of a man against the contemporaneous documents. And this was a very real issue before the jury. We attacked the credibility of those witnesses and it was argued by the -- the attorney for the respondent Pet and it was argued by us. And we said they ought to believe the evidence of the documents and the evidence of the plaintiff who said that Safeway was going to deal with it. Well, in any event they lost that Safeway business. Now, they lost it in circumstances where there was a contract between Pet and say "Well, which we said was the total requirements contract, this guy for causing illegal features.
Abe Fortas: Did they lose the pumpkin pie and mince pie business too?
Joseph L. Alioto: They didn't get to repeat business on it. They got it once. But in any event I -- I don't say you have to accept all our inference. This is -- all you have to do is see that this was this serious conflict where there obviously greater weight of evidence was on our side. And of course the breaking into plant, this was in the burglary case or false entry case. We claim to the jury that they will not be suede by that fact that they could use it in terms of the determining whether there was predatory intent against this particular petitioner and whether the activity, price activities were motivated by that predatory intent because the existence of the predatory intent is itself significant evidence on the question as to whether or not the prohibited effect was brought about. Now, in addition before leaving Pet, in addition to the men and the obvious men of the station with the predatory intent, we think they use the Swiss Miss as kind of a fighting brand. But we were accused both in the Court of Appeals and before the jury as simply using anti-trust clichés as they were called. And they called this business about breaking into the plant. The industrial espionage was in essence with the word that implied by the jury, we didn't make this fact. The fact was made by their own plant manager. Now, so far as Swiss Miss is concerned, and the Court inquired about that on a national basis they sold their quality pie greatly. They volume of the quality pie was greatly over the quality of this Swiss Miss which was a price pie of pure ounce of (Voice Overlap) in effect, so then. In this market, in this trading area, now I'm talking about the heart of the trading area, in this market, Swiss Miss sold 13 to 1 as against the quality pie. We said they were simply using it as a fighting brand in that particular area. Now, that the jury have the right to believe it that way and I say factual question in any event and right or wrong, there's substantial evidence to support it just in those figures.
Potter Stewart: Just in those figures?
Joseph L. Alioto: Yes. And I think the jury has the right --
Potter Stewart: Although the record shows that are sorts of local variations throughout the country in the kind of pies, the kind of -- some fruit sales, fruit pies, they sell in one area and will sell it all into another and isn't that true?
Joseph L. Alioto: Yes, I think that's true but when you're talking about -- when you're quality pies, I think these were unlabeled, there is room to argue that. When you're talking about these pies, price pie, the fact that you have a 13 to 1 volume in this trading area where they're carrying out all of these other activities, don't view it as an isolation, where they carry out all of these other activities, I think it's evident that they are using it as a fighting brand at least the jury was invited to conclude it was and it was a factual basis in which they made that conclusion. Sure there might be conflicting evidence.
Potter Stewart: By fighting brand, you go back to the old fighting ship doctrine.
Joseph L. Alioto: That's -- that's the concept, it's true. They -- and then you have to get them here. They use this cheap pie to get them where they couldn't sacrifice the quality pie too much.
Abe Fortas: Well, did they also engage in price discrimination, area price discrimination with respect to where you call that Swiss Miss?
Joseph L. Alioto: I -- I think there's some evidence of price variation on Swiss Miss but not a great deal. There is some but -- but we didn't -- we didn't use --
Abe Fortas: But why -- why your point then must be that whereas another areas, Pet kind of controlled a percentage of the market that was taken by trying to seduce the market by taking Swiss Miss here, so they make that up, is that it?
Joseph L. Alioto: That's correct. And the figures I think show it and there's nothing in the taste, the survey made to indicate that there was a matter of just local practice. In any event there were conflicting facts that the jury should have made the determination from. I don't say that their facts were 100% on our side, there are conflict in the evidence. I have no hesitancy in conceding, that if the verdict had been the other way, I think that we would have had difficulty arguing that there was completed sufficiency of evidence. It is a matter of who determines the factual question. Somebody who sits and tries to put things in perspective in a library or the jury that looked at that Safeway buyer to determine whether he was telling the truth as against the contemporaneous memorandum and as against the -- the behavior of the Pet witnesses on that stand. Now, so far as Carnation is concerned, Carnation went into the business, and I'll discuss the content of the facts in a moment as to all of them. So far as Carnation is concerned, it went into the business by again acquiring an independent, and that independent was acquired in 1955 and it had Simple Simon, Simple Simon label. It had a plant in California. Now, unlike the other two, it didn't sound nationally but it sold all the way through the Mississippi River and some place within the east, that's the only distinction between the two in terms of national selling area. The lowest profit in any of these years with the Carnation Company was $18 million but it lost money in the distribution of its frozen foods in this area, so just as Pet, this is in the case of Pet, they have multimillion dollar profits but a lost in this particular area and in this --
Potter Stewart: When you say frozen foods, you mean frozen foods generally or just frozen pie?
Joseph L. Alioto: Frozen foods, frozen foods generally, frozen foods generally of which pies were a substantial factor.
Potter Stewart: Yes.
Joseph L. Alioto: This is on the frozen foods. Now, so far as price discrimination is concerned, you will find a tabulation at pages 36 and 37 of the brief. Not to go into detail on it because here again, the price difference is conceded. You find that tabulation covering a period from November 1959 to September of 1961, the date we filed this complaint. And you find that tabulation compares the Northern California price, their plant was located in California, as against the Salt Lake City area prices and you'll see very substantial discriminations. We also at page 39 have shown the number of days of this price discrimination between northern California and the Salt Lake, Salt Lake City area. Now, the Carnation sales were at a lost, but more than that they were planned at a lost. Now, there's been some discussion about that and I just like to say a word on them. They say well that if you're budget loses, that's simply somebody trying to make an actual statement as what's likely to happen in this market. On the other hand, the jury can say that they intentionally sold at a loss to get a foothold and were prepared to subsidized those loses from their overall price.
Abe Fortas: Does your view concede that the element of intent is necessary?
Joseph L. Alioto: No, it is not necessary it's just plus or velvet when you have it, when you do have the elements of the intent. I don't think it's necessary. I don't think you have to have a specific intent to get this particular competitor or a even a specific intent to injure competition. If you have the price difference and the reasonable possibility of the effect is there, then you don't need an intent. But when you have intent it would tend to support the reasonable possibility of competitive injury.
Abe Fortas: I suppose the net, net of it is that -- of our problem one aspect then to ask, you have a national company and that has fruit pie, frozen fruit pie, and it is not in the Utah area and it decides to enter the Utah area. Can it or can it not enter the Utah area on the basis of a somewhat lower price for the purpose of establishing the brand or getting brand acceptance in that area? And you say that in this situation it did so and it did so with the intent and effect of injuring a competitor namely Utah Pie that had an established position in the market.
Joseph L. Alioto: Yes. Our view is that they did it both with the intent and the effect that the intent wasn't necessary and on a specific question as to whether a large conglomerate company can say, "Well, I'd like to get in to that area. So I'm going in at a much lower price and I have at my plan. Now, they're going to transport of 750 miles and go in to the much lower price. Now, that lower price doesn't have to be at a loss. But in this case if you prove it here that's a loss I think this is just precisely what that section means if the company can't do it, if there's a strong independent located in that area.
Abe Fortas: 2 (a) means that?
Joseph L. Alioto: This is what I think it means, yes. Now, with a conglomerate company if it goes into an area and it knows that there's an independent in that area, they are distinguished from competing with Pet or as distinguished from competing with Continental and it knows that the effect of what its doing say as to put that company out of business even or to injure it or to impair its capital structure, I see this is exactly what 2 (a) means that you can't do it.
Abe Fortas: Well you got some technical problems. You have some technical problems about 2 (a), don't you? Not 2 (a) was confined in situations where sales were made to one person at a lower price and to his competitor.
Joseph L. Alioto: No, the original one, just to compare to the original 2 (a) as a matter of fact that you pointed out in our lower courts, 2 (a) involved and attempt to get what was disclosed in the Tobacco and Standard Oil cases of this overtrading by a large national company or a company with great financial resources in a local area where the price is cut just at that area.
Byron R. White: So let's --
Joseph L. Alioto: I think the difference in prices in two -- a territorial one --
Byron R. White: But this is a primary line case.
Joseph L. Alioto: This is a primary line case.
Byron R. White: Not a secondary.
Joseph L. Alioto: That's correct.
Byron R. White: And the second -- and in secondary cases you have a competitive price.
Joseph L. Alioto: That's correct, that's correct. In the primary line cases that price difference is a price in California, that's a price against Salt Lake City. And nobody was trying to insulate this up which they claim as the Court of Appeals claim from competition. Anybody was privileged to go up there and build a plant or to compete in any other way but I think the statute says you can't go in there and sell at a loss to the -- where, where the effect is to injure that independent. So incidentally their own -- their own economic witness, Dr. Anderson that the sales by a large conglomerate corporation a loss planned in advance was evidence about ulterior motive as he put it, evidence of less than perfect competition or unnatural pricing as he also put it. And he also said that the lower price could be predatory "as one of the possibility". He's their own witness. I say this evidence was before that jury. Now, with respect to Continen -- I'll carry along with that and get to the procedural problem. Continental as the other two got into the business by buying an independent in 1955. The sales of this company in the period of 1958 to 1961, the overall sales were in excess of a half billion dollars. The profits were $75 million but it's sold at a loss in the Utah trading area. Now, Pet and Continental were the two largest sellers in the United States. In Continental, there was an evidence that Continental was a price leader. From 1958 to 1961, its frozen foods department operated a loss despite these other process and specifically what prospective -- that the lowest price in the entire United States as the evidence showed was by Continental in Salt Lake City. Continental had its plant in Virginia, they had a plant in Iowa, it have a custom packing arrangement in California. Continental too sold on a deliberate price basis within geographic zones. Now, with respect to predatory intent and this again, the Court of Appeals treats us though there wasn't any conflict in the evidence. The broker of Continental told the petitioner that I am going to run you out of business, broker of Continental, only that I do that. And then shortly after telling that for a period from June 16 to August 12 of 1961 Continental instituted the lowest price in the entire United States on frozen pies in a transaction with the Safeway Company which is extended to us. Now, the Court of Appeals accepts the statement made by a respondent that this was just a two-week deal. That this needs a little analysis, first of all it wasn't two weeks, that that price of $2.55 admittedly below cost or at least substantial evidence that it was below cost. That price lasted from June 16 to August 12, and was the thing that precipitated this lawsuit. When you sell a six-week supply and the evidence was that even though there were two sales, it was a six-week supply, when you sell a six-week supply simply like the Safeway Company, you don't have a six-week effect on the price structure. It may take a year to get over the injury that a six-week price with the Safeway Company can bring about. And this was argued to the jury and the jury was invited to assess this on the question as to whether or not there was injury to the competition. This price incidentally was 35% lower than the price the same company sold in California at the same time.
Abe Fortas: Is that part of -- was that active onset of Safeway's entry into the market here?
Joseph L. Alioto: No, it was that at the end Safeway or Morton.
Abe Fortas: Or Morton, I'm sorry.
Joseph L. Alioto: Yes. It was at the end of the period. Morton kind of stayed out of these markets for awhile. It was in 1958, it kind of stayed out and then after this broker had this conversation, they came in with this low price. Now, there's admittedly conflict in the evidence as to whether or not the broker was employed by Continental at the time of the conversation where he told the plaintiff he was going to get them. But there's a conflict. The written document shows that he was, the oral testimony says he was not, he was employed a few weeks later. I don't think it makes any difference actually. But there was a conflict and the Court of Appeals should not have resolved that conflict, it was for the jury to resolve. Now, I'd like to talk about the wholesale elimination from this evidence --
Byron R. White: But you're -- can I ask you just one question before you go on. The statute says that that you must prove discrimination substantially less than competition or injured competition with any person who either grants or knowingly received the benefit of the discrimination. Now, which one are you claiming in this case that the evidence showed?
Joseph L. Alioto: That is the 1935 amendment, that last portion you've read. We are claiming that there was a reasonable possibility of injury to competition under the incipiency test. That was all that's required. Now, later on for treble damage purposed you do have to show --
Byron R. White: This last clause has been eliminated, isn't it?
Joseph L. Alioto: Well, (Voice Overlap) - we are not -- we are not relying on that last clause, that in other words we are relying on the fact that there was a reasonable possibility here of injury to com --
Byron R. White: To competition generally?
Joseph L. Alioto: Yes.
Byron R. White: Well, how about the -- how about the southern provision that -- would any person -- preventing competition with any person who grants or knowingly received the benefits of such discrimination. You don't claim anything on that.
Joseph L. Alioto: No, except that under the general injury to competition, we claim that we were unable to get the Safeway contract because of these price discriminations. We were unable to expand into the -- into the Denver area over and above what we did there, unable to expand into the northwest area. But I think that the test so far as the primary line is concerned, the test is far and this is the test we submitted to the jury in -- that proposed in the instructions which the Court submitted to the jury, the test is whether or not there's a reasonable possibility --
Byron R. White: Well, do you think the case is -- let me ask you -- do you think the cases sustained the proposition that if -- that if you can show a substantial injury to say your client that that is enough to construe the effect on competitions because it would dampen competition with the person who granted the discrimination such as Safe -- such as Pet or Carnation?
Joseph L. Alioto: The Court -- the Court --
Byron R. White: If you're hurt -- if your client is hurt, why isn't the competition with the grantor, grantor the discrimination hurt?
Joseph L. Alioto: This -- this question is whether there has to be injury to competition or injury to a competitor. It is you know a question that's presently engaging the courts. We don't have to reach it in this -- in this situation. For this reason, in the circumstances of this case, it's quite obvious that injury to this plaintiff is injury to competition because this plaintiff is the only substantial independent competitor in the area. It's the only one. There aren't any others. So that injury to this plaintiff is substantial injury to competition. Now, the Court properly instructed that its injury to competition you must find, not just injury to a competitor.
Byron R. White: Now, that it makes great difference, we had a cost injuries in this competition. Mr. Justice Fortas said -- asked you what area are you talking about. And if we got to talk about one area, you might get one answer and you might get another in another one.
Joseph L. Alioto: No, I don't think in the Con -- I think that could be so in another case but not in the context of the facts we have here. The areas we're talking about, the -- the injury -- the injury to this particular competitor resulted in an erosion of its price structure, that's one. But more importantly, it precluded here from expanding his distribution in the northwest area, it precluded him from expanding his distribution in the Denver area. Now, on -- with specifically with respect to the Denver area which the Court of Appeals read out of the case entirely or just let me say a word on that because I think it fits in with the question asked by Mr. Justice White. The pretrial order in this case was very explicit on the back that we were talking about Colorado. Here it was not. There was price discrimination in the record as you will see in Appendix C in the brief between Denver, Colorado and areas and other areas for the Morton Company, very clear price discrimination. We introduced that evidence. It was argued to the jury. We had information on damages; on our damage exhibit, we had damages for the Denver area. We have a witness who examined on the Denver area. The counsel for Continental cross-examined that damage witness on the Denver area. I argue that to the jury, they argued it to the jury. The form of the verdict simply said, Utah trading area and throughout, we have talked about that meaning as the area in which the plaintiff distributes or sells its pies despite that the Court of Appeals says that Denver wasn't in this case. As I say, I don't know how you can possibly come to that conclusion. When Judge Wheeler framed his decree, this is how much he thought that was in the case. He says that the violation occurred in the plaintiff's trading area (Utah, Idaho, Washington, Montana, and Colorado, as against California), where the defendant's production facilities are located. And then he decree that there should be no lower prices in Utah, Idaho, Washington, Montana, and Colorado than in California or in the case of Continental for the State of Colorado the prices charged in Iowa. Now, how in the line of that record, the Court of Appeals can say that Denver wasn't in this case when it states it. It specifically says that because now the damage exhibit 1 to that jury and judge told the -- told the jury consider that damage exhibit with Denver on it and was cross-examined because the form of verdict said Utah trading area, the judge says that means the State of Utah in effect or the immediate area upon. And I submit in any event that -- that that the trial court understood it differently. Obviously, counsel for the respondents understood it differently, he crossed-examined on that damage exhibit relating to Denver. The Denver invoices are in the record, they are in evidence and on that basis, I submit to the Court of Appeals that this point simply couldn't put that Denver picture in into perspective or focus as we call it and eliminated the whole sale from the case. Now the -- finally, we think the evidence showed injurious impact, I think, were required in the private damage action to show the elements of violation of injurious impact and not that economic evidence in this record to justify the damage awards, and I think the damage awards are rather conservative in this case. There was a price erosion from a $4 level to a $3 level in the period of time that was before the jury and whether this price erosion was the effect of the competitive practices of the respondents was for the jury to say and the jury found it our way, in that respect. There were reduced volumes. It started out with its prime advertised brand at 70% in 1958. The Court of Appeals made several marks about this almost approaching monopoly, but in the regional if you have a regional company, the only plant in the area you would expect that volume immediately around its plant --
Potter Stewart: Into the --
Joseph L. Alioto: But its market share --
Potter Stewart: Excuse me --
Joseph L. Alioto: -- went down from 70 if you say what happened to it, went down from 70 to 58 to 40 to 33 on the advertised brands. And we asked the economic witness of respondents, don't you think that that kind of a loss on the advertised brand is a competitive injury? Does the -- the -- the manufacturer's advertised brand? And they said, "Yes, it was." And those figures were in that record. And its overall share declined from 66 to 34 to 45, 45 in a four-year period at a percentage arrangement.
Potter Stewart: You said --
Joseph L. Alioto: And that --
Potter Stewart: -- you said Mr. Alioto, there's a -- there was a much you referred to as a price erosion from $4 to $3 over the year period.
Joseph L. Alioto: The level is actually below the $3 level.
Potter Stewart: Well, more less?
Joseph L. Alioto: Yes.
Potter Stewart: And what happened elsewhere in the country over that period?
Joseph L. Alioto: Well, when Continental came in with a very lowest price that was ever charged anywhere in the entire United States, we came down and met that price. At the time that it was charging this $2.55 price, to use the actual figures in Salt Lake City had this -- in a California sale of about the same day maybe even the same day or the day after it was charging $4 --
Potter Stewart: And over the period for -- that this went from $4 to $3, what happened elsewhere in the country in the prices of frozen pies? Is there any evidence of that in the record?
Joseph L. Alioto: There was some evidence that -- well, the -- the $4 price was there in the fax mar -- in the fax market invoice in California in 1961. They may have been other places in the country where there was a lower price but in California where the plant was located that $4 price is still obtained. Now, one of the ways that the Court gets around that is by saying, "Well they were advertising allowances which we are going to regard as a price cut." There was substantial evidence by the respondents if their advertising allowances were in price cuts, if they got a quid pro quo for their advertising allowance.
Abe Fortas: Now (Voice Overlap) I -- I don't quite understand that are these prices $4 and $3 that refer to growth prices that is saved before advertising allowances and other types of allowances.
Joseph L. Alioto: In the case of that -- when we're talking about the comparison of the $2.55 price against the $4 price, there were $2.55 price which then involved advertising allowances. It was just a price cut. Now, that $4 price may have had some advertising allowances --
Abe Fortas: In other words, --
Joseph L. Alioto: -- and that would standardized --
Abe Fortas: -- what you're saying is that we have to be weary in the use of that $4 figure and then maybe that is subject to reduction.
Joseph L. Alioto: No, it's not subject to reduction if it's an advertising allowance.
Abe Fortas: Well, that's arguable, but --
Joseph L. Alioto: Well, I mean it's a (Voice Overlap)
Abe Fortas: -- you say there are -- there maybe -- there may have been some advertising allowances in California for the plaintiff.
Joseph L. Alioto: Yes.
Abe Fortas: That were not equal to advertising allowances in Utah, is that right? So that these are not totally comparable figures if you include advertising allowances
Joseph L. Alioto: If you -- if you say that the advertising allowance is a price cut, I think that's correct, Mr. Justice Fortas. But if, as the evidence shows and there was -- and there was not much conflict here.
Abe Fortas: The record shows how much the advertising allowances in California were.
Joseph L. Alioto: Not with respect to specific invoices of the periods that time, yes.
Abe Fortas: About how much did they run per case?
Joseph L. Alioto: I don't recall that now --
Abe Fortas: There's as much as a dollar, 50 cents, 25 cents?
Joseph L. Alioto: From special promotions, some of the Carnation did but 10 to 20 cents a case was a little more logical. Now, with respect to -- with respect to the -- just let me say including this whole matter that -- there was this abundant evidence here of predatory intent, that this prices were aimed specifically at these company, the -- the fraudulent entry into the plant, the transactions with the Safeway Company, there was a permanent diversion of business here, evidence of a permanent diversion of business as a substantial disparity inside the courts between them. There were sales below cost, there's abundant evidence here to define predatory intent and I think therefore abundant evidence in the light of the injurious impact on this petitioner and the only independent in the whole area, abundant evidence of the prohibited effect.
Hugo L. Black: May I excuse a -- aside from inferences from the evidence of facts stated in the Court's opinion which set aside your judgment. Do you challenge those facts?
Joseph L. Alioto: Oh! Yes. We very seriously challenge a great number of --
Hugo L. Black: I'm talking about -- aside from inferences, actual facts as to conversation in letter and so forth that took place, as stated in the Court's opinion.
Joseph L. Alioto: Yes.
Hugo L. Black: I'm asking you because I want to know if we can accept as evidence that which is in the Court's opinion setting aside the judgment.
Joseph L. Alioto: No, there are -- there are some factual inaccuracies which we have noted in the -- in the brief. Your assumption --
William J. Brennan, Jr.: Such as that Denver was out of the case we're in now?
Joseph L. Alioto: Excuse me sir?
William J. Brennan, Jr.: Such as that Denver is out of the case.
Joseph L. Alioto: Yes, yes. This is one of -- this is one of them. I -- I would say I would put it this way. I would put it this way with Justice Black by and large I think the facts stated by the Court are correct.
Hugo L. Black: Well, do you think in one reading that opinion could rely on the interest of this substantial fact which the Court put in there as a reason for setting aside your judgment.
Joseph L. Alioto: Not when you come to the Safeway transactions, no. Not when you come to the Pet-Safeway transactions except for that -- except for the Denver I think then substantially yes. So, on the Pet-Safeway transactions, no.
Byron R. White: They -- they -- you think there are -- they're just simply wrong on historical facts and --
Joseph L. Alioto: No, no, no. First of all there are abundant omissions, if -- if your question comprehends to, Mr. Justice Black, omissions.
Hugo L. Black: I was talking about one kind of written judgment on that facts stated as to whether there was a jury question.
Joseph L. Alioto: No, I would say that you'd have because they were substantial omissions, we think the fact that are just plain --
Hugo L. Black: Under what substantial omission which might have -- have altered it or might not, but can one accept those facts as substantially correct.
Joseph L. Alioto: That the facts stated are --
Hugo L. Black: To determine whether or not the judgment should be set aside.
Joseph L. Alioto: The facts stated are substantially correct except for the Safeway transaction, the Denver transaction, and the fact that there are substantial omissions, for example, this decline in market share on the private brands doesn't appear in the Court's opinion. And I think that's a very substantial omission, very substantial omission. What went, well -- well, we think as a matter of fact that the -- the inference or competitive injury here is the -- and of course there's a substantial, I must say again that when the Court comes to say what the absolute prices are, their substantial difference on a factual basis because of the advertising allowance problem, substantial difference on that. I was about to come to the procedural questions involved in this -- in this case. What happened to -- what happened in this case is that a judgment N. O. V. was requested in the trial court and a new trial was requested and it was denied. On appeal, the Court said that the judgment N. O. V. should have been granted.
Earl Warren: Yes. We will recess now, Mr. Alioto.
Joseph L. Alioto: -- upon the procedural point relating to a new trial. I am afraid that the law in this general area at the moment is such that when you look at Slocum, at Redmond, at Cone, and then at Hennegan, that the bar and perhaps the bench could be a little bit confused and under the general rules that ordinarily the trial court has to obey the dictate of a -- of a Court of Appeals, the trial court in this instance may be disposed to say that it cannot grant a new trial. But I think obviously it should be permitted to do so. Now, we have this anomaly if in terms of practical courtroom mechanics, we have this anomaly in the law. We've won this verdict, let's take this case. We won the verdict, the judgment was entered. They made a proper motion N. O. V. It was denied. If it had been granted at the trial level, we could have made a motion for a new trial. Nobody would question that. Now, then if instead of being granted at the trial level, it's granted at the appellate level then it's the contention of the other side and we submit it's wrong that we can't have a new trial. In other words, by winning below, we're prejudiced, now that -- it doesn't seem that it ought to be right. It is on our position that this Court can make all of these cases consistent by simply saying that of course the trial court must obey the dictates of the Court of Appeals and enter its judgment N.O.V. But once it has done so, there ought to be no difference on the new trial procedure whether that judgment was entered on the initiative of the trial court or on the initiative of the Court of Appeals. So, let me give you an example that I think clearly indicates there's justice in letting the trial court make that final determination. One of the usual grounds for a motion for new trial is newly discovered evidence. That evidence could be discovered even after the Court of Appeals comes down with a direction to enter a judgment N. O. V. and there's no reason why within the ten-day period, the loser ought not to be permitted to make a motion for a new trial on that ground or any other ground that is available to him. We know of no case, and I submit those cited by respondents don't really hit this point. And we know of no statute which expressly precludes the trial court from granting a new trial after it enters a judgment N. O. V. We know of no case that does it. The original judicial coach here gives the Court of Appeals power and authority to reverse a judgment. It doesn't say that it can't add to that judgment and you may not in any circumstance grant a new trial. It doesn't say that, it just says that you can reverse.
Potter Stewart: What -- what if this Court did it and that -- and it mandates with directions to a District Court enter a final judgment for the -- for the defendant. Do you think the District Court thereafter would have the power to demand a new trial?
Joseph L. Alioto: You appear to have done that of course in Hennegan and this I think it was part of the -- part of the confusion. I think if you take the literal language of 50 (c) (2) that the answer would be yes. In the final analysis it's not this Court that enters that judgment N. O. V. or the Court of Appeals. It's that trial court. He finally said --
Potter Stewart: But under the direction of the reviewing court.
Joseph L. Alioto: That's correct, alright. Now, then 50 (c) (2) makes no distinction at least in its language regardless of what those framers intended makes no distinction between a judgment N. O. V. entered on the initiative of the trial court or a judgment N. O. V. entered at the direction of an appellate court. It makes no distinction at all, so I say the language covers it. Now, to be true those notes indicate that their talking about a judgment N. O. V. entered by the trial courts before there has been any appeal. But if you look at that language, the trial court does not inhibit it nor should it be. But -- but I think it needs a clear direction now from this Court saying that of course a trial court has to obey the Court of Appeals and does when it enters the judgment --
Abe Fortas: Well, then any question is there about the intent of the Court of Appeals here. The Court of Appeals said that the judgment is reversed and of course remanded with instructions to enter judgment for the defendants. Now, what you're saying -- well, I -- I should think that would be a reasonably clear indication of their intent, wouldn't you?
Joseph L. Alioto: I would think so particularly in view of the fact that they had the option to say new trial and didn't take it. And this is why we answered the question, no. But we agree that it should be that the final determination as to whether or not there should be a new trial, should be in that trial court. I -- I think they're wrong, Carnation says, "Well, there's going to be some kind of a guerilla war there between the two of course."
Hugo L. Black: That's not been the general policy of the common law to deny appeal from motion granted rehearing.
Joseph L. Alioto: To deny appeal --
Hugo L. Black: That motion to grant a new trial, I mean.
Joseph L. Alioto: Yes. On the motion granting, granting a new trial, the general rule is, it's not an appealable order. Is that what Your Honor is getting at?
Hugo L. Black: That -- that's right, not appealable order.
Joseph L. Alioto: Alright, it's not -- it's not an appealable order. But all I'm saying is that even though there's a decision, determination that you must enter judgment N. O. V. against the winner, it seems to me as the trial judge ought to make the last determination as to whether there should be a new trial. Now, in making that determination of course, he's bound by the law enunciated by the Court of Appeal that there's nothing to indicate except what the Court of Appeals has passed on. He probably will deny the trial, but in the final analysis that judgment ought to be made by the trial court and not by the Court of Appeals.
Hugo L. Black: Is it or not true that frequently the question of newly discovered evidence requires an offering of a new evidence in order to show a situation that had developed, what hadn't brought out in the original trial.
Joseph L. Alioto: There -- there can be a lot of reasons where in a new trial you will have new evidence. For example, in the protracted case like this, this is a practical matter that the plaintiff's counsel may determine not to offer all of his evidence in the interest of streamlining the case. He thinks he has enough. Then somebody picks a segment out of this case in some manner which he couldn't possibly foresee. He ought not to be foreclosed from thereon in as apparently this Court tried to do in its direction. So that he should be foreclosed and we believe that 50 (c) (2) literally permits but which I think the Court is going to have say so explicitly before the trial judge is going to believe it. But that literally permits the Court to grant a new trial even after entering the judgment N. O. V. at the direction of the Court of Appeals. And that's of course the way it should be as a matter of simple justice, we ought not to have this anomaly where you worst off for winning.
Byron R. White: Well Mr. Alioto, 50 (d) says that you may when you're as appellee offers the Court of Appeals grounds for new trial and you said the Court of Appeals reverses the -- the penalty ruling. Now, let's assume that you had after the Court of Appeals such grounds, and the Court of Appeal had reversed just as it did here but then it got to your new trial ground who said, "Well, I think -- I think Utah Pie must have a new trial and the Court so ordered it. Does he get to do that?
Joseph L. Alioto: Yes, I think that that -- that I think that that rule specifically permits that he has to grant new trial was to direct the trial court --
Byron R. White: Well, why shouldn't -- why shouldn't the trial court has first cracked at it?
Joseph L. Alioto: Well, I --
Byron R. White: Which is what you've been arguing.
Joseph L. Alioto: I don't know which had had first cracked out but I'm just suggesting that the trial court as a practical matter should have the last backup.
Byron R. White: Well are --
Joseph L. Alioto: Now, this is going to be in the --
Byron R. White: Alright, let's assume -- let's assume that you do ask the Court of Appeals for a new trial in the event they reversed. The Court of Appeals reversed this, it gets to your new trial motion and denies it. Alright, do you think you should be able to go back to the trial court and ask the trial court for a new trial?
Joseph L. Alioto: And ask the trial court for a new trial but presumably the trial court is going to deny that the only grounds for your new trial are those already passed upon by the Court of Appeals.
Byron R. White: Well, presumably but you still think that you have the right to -- that the trial court must entertain and pass on the motion.
Joseph L. Alioto: Yes, for example that in -- in the example you are using suppose after we get down the newly discovered evidence is -- is brought to light.
Byron R. White: No, that's different.
Joseph L. Alioto: Well, I don't know why --
Byron R. White: That's a separate.
William J. Brennan, Jr.: We have a Rule 65 to know then?
Joseph L. Alioto: No, that's a little more difficult.
William J. Brennan, Jr.: I agree but you would have --
Joseph L. Alioto: However, it doesn't work --
William J. Brennan, Jr.: -- you would have at least.
Joseph L. Alioto: Yes, but -- but I don't know why we should be proposed from having a 59 --
William J. Brennan, Jr.: Aren't you really saying that you think that the last word on the disposition of the case should be less than the trial court?
Joseph L. Alioto: No, I'm not saying that because at some juncture, at some juncture if you -- if you win the trial at the Court of Appeals, still they're going to review that trial.
Hugo L. Black: And then we have to review the motion for rehearing, I mean the motion for a new trial.
Joseph L. Alioto: No, I think that generally held to be non-appealable.
Hugo L. Black: (Voice Overlap) customary that that's not done.
Joseph L. Alioto: That's not done, you won't review the motion for a new trial but you review the matter after the trial has been handed if any injunctions have been done. And then you can reach the determination.
Hugo L. Black: Why does Rule 50 (d) -- (d), a, b, c, d --
Joseph L. Alioto: Yes.
Hugo L. Black: -- provide that the Court of Appeals can grant a new trial but does not provide, that it cannot process that much already?
Joseph L. Alioto: Our view is that that does not preclude the trial judge from acting on a motion for a new trial even though he's directed it.
Hugo L. Black: Oh, I would -- I would agree with that but I'm talking about the Court of Appeals, 50 (d) grants them specifically the right and the power to grant a new trial.
Joseph L. Alioto: Correct.
Hugo L. Black: Now that's -- whether is binding or not? Why did it not go further if they intended to change the common rule and allow them power to deny a new trial?
Joseph L. Alioto: Yes, but we agree that it doesn't deny and in fact that it doesn't is pretty coaching evidence that the last words should be held by the trial judge on the question of a new trial.
William J. Brennan, Jr.: Well, how is --
Joseph L. Alioto: We agree with that means.
William J. Brennan, Jr.: -- how is it then if under the rule that the appellate court may say and you must allow a new trial. How does that give you the trial court the last words?
Joseph L. Alioto: Well, the appellate court -- well in that (Voice Overlap) --
William J. Brennan, Jr.: Under the rule the appellate court may say, may it not --
Joseph L. Alioto: That's correct.
William J. Brennan, Jr.: -- under language of the rule and by way reverse, there shall be a new trial.
Joseph L. Alioto: It may order a new trial.
William J. Brennan, Jr.: Well that goes to --
Joseph L. Alioto: I think the question is, I think the question is however may it preclude the trial court from acting if it doesn't order a new trial.
William J. Brennan, Jr.: Well then --
Joseph L. Alioto: And we say it ought not to.
William J. Brennan, Jr.: Then I suggest that Justice Black's question requires an answer.
Earl Warren: Mr. Schafer.
John H. Schafer: Mr. Chief Justice, may it please the Court. I have thought after what had transpired in the Neely case that we would not be discussing the merits of these cases. The counsel has a great length -- at a great length discussed and I of course will have to do the same thing. I do submit to the Court however, that this case is exactly the same as the Neely case and it's not necessary for the Court to get into this 15-volume record to determine the questions which brought this case to this Court which were the procedural questions. In terms of Mr. Justice Fortas' question I would like to just --
Abe Fortas: Why -- why do you say that the way -- did we limit the grant?
John H. Schafer: The text of your grant Mr. Justice Fortas was in the same term as basically in both cases, the Neely case and in our case. The order which we receive said in effect, in addition they're urging that the petitioners raise to discuss these questions. The Court as I understood that in terms of Neely case that construed that to mean what we -- that you really only wanted to hear your argument.
Abe Fortas: Well you heard -- you heard some colloquy and --
John H. Schafer: I heard some colloquy --
William J. Brennan, Jr.: Where did you get that?
Abe Fortas: That well, sometimes we don't -- we don't do exactly --
John H. Schafer: That's correct but I would submit to the Court that it's not necessary, necessarily necessary to consider the merits in order to consider the procedural questions that brought it here.
William J. Brennan, Jr.: It may not -- I thought you --
John H. Schafer: You can assume --
William J. Brennan, Jr.: I thought you were suggesting that -- that the issue of the merits was not before us under our grants.
John H. Schafer: Not at all, not at all. I'm just saying that you don't necessarily have to reach it. You don't have to necessarily have to get into this long record.
Byron R. White: Well, explain that to me, will you?
John H. Schafer: Well, it seems to me Mr. Justice White that as you have another area Mr. Justice White, in other cases you have taken a case on simply the procedural question putting aside the all the merits of the case.
Byron R. White: Yes, but we didn't --
John H. Schafer: You didn't do it here.
Byron R. White: Now that they are here how can we put it aside?
John H. Schafer: Well, in effect you can say it seems to me without using this language perhaps. But you can say that on the merits it's not necessary to review it.
Byron R. White: I hope you're going to discuss it here.
John H. Schafer: I certainly am. I have very limited time. I do want to say, however, that we did oppose producing this entire record different. We did not --I think it has to be printed. The case against Continental Baking Company for whom I am speaking and only Continental, concerns Salt Lake City. In June of 1961, the Continental Baking Company was selling about 2% or 1% of the pies in Salt Lake City market. In June of 1961, the Utah Pie Company was selling about 60% of the pies in that market, Continental Baking Company was producing selling a 22-ounce pie. Utah Pie Company was producing and selling a 24-ounce pie. The Continental Baking Company had been in effect excluded from the Salt Lake City market in prior years by reason of inability to remain price competitive with the Utah Pie Company. It didn't even have a sales agent in the market. In late October, 1960 they've had achieved --
Abe Fortas: Did they have a plant there?
John H. Schafer: It did not -- they had plant in Watsonville. It started the plant in Watsonville, California.
Abe Fortas: But that -- that -- are you telling us that the computation of cost did not permitted economic of delivery of those pies from the Watsonville plant to the Utah market?
John H. Schafer: Mr. Justice Fortas it did not get the Watsonville plant in the operation until late 1960s. And it was at that time, in late 1960s the Continental started trying again to get into the Salt Lake City market and to make some sales.
Abe Fortas: Well, I asked you, you -- you said that Continental had no market position in competition with Utah Pie.
John H. Schafer: Yes.
Abe Fortas: And you said that -- but what -- and I asked you about the plant. Where was their nearest plant to make frozen pies?
John H. Schafer: Well, they had a co-packing operation in California for a time in 1959. That was not economically run. They abandoned it. For a time, they can only serve the western markets from the Webster City, Iowa plant or the Crozet, Virginia plant and was only, this Watsonville plant in late 1960. My point is there was only one. They got this plant in operation which was again the co-packing operation, that they were able to achieved cost.
Abe Fortas: Then why -- why are you saying that, I'm sorry but I don't follow you. As I understand you now what you're saying is and nothing more than that -- you're client did not have a plant within -- prior to 1961, this story begins as I understand it. It -- that client did not have a plant from which it could supply product into the Utah market on competitive basis, is there anything more than that where I have missed you?
John H. Schafer: I didn't really mean to say anything more than that. The story begins in 1957. For awhile even with these other plants, Continental could be -- was competitive. The Utah Pie Company entered this market after Continental was in it, after Car -- Carnation were in it. It started a price competition which made it uneconomical, Continental couldn't any longer compete. About 1959, it withdrew in effect in the Salt Lake City market because as you say its plants did not permit it to achieve competitive cost in Salt Lake City. And then in 1960, late 1960 it got this new plant in operation and had achieved this declining cost picture which I think is very basic to an understanding what's going on in this case.
Earl Warren: Where is that?
John H. Schafer: It says in Appendix II of my brief Mr. Chief Justice. Is at the record also at page 5450.
Abe Fortas: I don't -- I don't understand what you mean. It's like -- what -- what is -- what declining cost, declining prices in Utah?
John H. Schafer: The cost, the laid down --
Abe Fortas: What -- what -- what claim, what cost?
John H. Schafer: The laid down cost, the Continental in Salt Lake City market. This is the price of a pie, this is what happens to the price -- the cost.
Abe Fortas: To the cost.
John H. Schafer: The cost --
Abe Fortas: From which -- from which plant would you think to --
John H. Schafer: From any plant. From the plant that was at that time serving Salt Lake City market. These plants over this four-year period are unchanged. There were three already, Webster City, then Turlock, California, and then only significant one in terms of its cost was Watsonville. I don't mean -- perhaps, I mislead you. I don't mean to put any particular emphasis in terms of legal impact on this. I'm just trying to describe (Voice Overlap) what occurred in June of 1961.
Abe Fortas: I thought you were in your example.
John H. Schafer: No, no. I'm just trying to show what Continental pic -- position was in the Salt Lake City market. It was initially one of being uncompetitive and starting in October 1960, it became competitive. It appointed this broker about which you heard this morning. He tried for seven or eight months, he tried to make some sales, so that brings -- and it was unsuccessful. In June of 1961 it was determined that in order to get some sales in the Salt Lake City market it was necessary to quote a price which was competitive with the price being charged by the Utah Pie Company, the dominant seller in the market. Utah price -- pies I should say was bigger, 8% bigger than Continental's pies. Utah Pie sold its pies for $3.10 a dozen, Continental quoted the price at $2.85 a dozen. That's on a weight basis. On an ounce basis that's the pre-size arithmetical equivalent at this price which is offered for two weeks and once renewed the offer was again renewed for two weeks in August. Continental sold a few pies basically the Safeway stores, which was at that time buying only from Pet and not Utah Pie, sold a few pies. Shortly after that this complaint was filed. And that's the sum and substance of the Utah Pie case against Continental in the Salt Lake City market. That's all of it. That's in fact the only time in which this record shows that Continental was selling at a higher price any place else. He didn't even bother to try to prove discrimination any other time because this is the only time they sell it, that this price he's complaining about, this is the whole lawsuit. And I submit to you that a two-week price discrimination even if it is a discrimination which it isn't when you compute advertising loses.
Abe Fortas: I know but Mr. Alioto said that it was six weeks and again I misunderstood him.
John H. Schafer: He said, Your Honor that the quotation lasted for two weeks but Safeway bought a six-week supply.
Abe Fortas: Well, is that true or not?
John H. Schafer: Assuming it's true. As a legal matter Mr. Justice Fortas, I submit to you that the law cannot proscribe a 2% seller in the market making a promotional price offer lasting for two weeks even if the effect of that is that one buyer in that market, one of about four major ones, one buyer buys pie for six-week supply.
Abe Fortas: Well look. What happened after the two weeks?
John H. Schafer: Nothing. The price will --
Abe Fortas: You mean, Continental went out of -- out of the business in that market?
John H. Schafer: It?
Abe Fortas: Huh?
John H. Schafer: It stayed in the market quoting an unrealistically high price.
Abe Fortas: Continental?
John H. Schafer: It is right after this $2.85 price.
Abe Fortas: Let's get back to it. Give me, slowing you down here. Continental entered this market in which you talk pie was offered anything and accorded the low price to Safeway.
John H. Schafer: No, everybody sir.
Abe Fortas: Everybody for six weeks, for two weeks you say. And Safeway bought six-week supplies, aren't you telling us then?
John H. Schafer: Basically, bought sir.
Abe Fortas: And was that six weeks plan for all of the Safeway divisions in the Utah market?
John H. Schafer: The one Safeway division which encompasses all of its stores into the Salk Lake City market, that's right.
Abe Fortas: Alright. Then at the end of the two weeks, Continental raised its price?
John H. Schafer: Well, to get into that sir, I better explain to you that the way the competitor works in this industry is you have an unrealistically high list price then everybody quotes short-term price promotions off that list price.
Abe Fortas: Well not --
John H. Schafer: So that the answer is yes, it went back to the list price.
Abe Fortas: Alright, you answered trying to get it.
John H. Schafer: I'm sorry, it went back to the list price.
Abe Fortas: It went in of the market with a low price and they sold to Safeway and they sold the six-week supply, at the end of the two weeks promotion period or whatever you want to call it then Continental raised its price.
John H. Schafer: Right, so the brought it back automatically because there was only a two-week offer.
Abe Fortas: Well, what does the record show about what happened to Utah Pie during this period?
John H. Schafer: That's what I'm going to say. Utah Pie as soon as they heard about Continental's $2.85price on a 22-ounce pie immediately dropped its price on a 24-ounce pie to $2.75. This effectively precluded any further sales by Continental in the market. The only reason Safeway bought was as a matter of honor. They already permitted the sales in one or two of the deals. But Utah Pie dropped its price on a larger pie below net -- arithmetically below Continental's price. And that was the end of Continental in this market. It didn't sell anymore and the complaint came down in September.
Byron R. White: Did -- did Utah however get the Safeway account back?
John H. Schafer: Utah, Mr. Justice White never had it.
Byron R. White: Why?
John H. Schafer: Utah --
Byron R. White: You've my question so that they -- they didn't get -- they didn't -- even if Continental went out of the market, Utah Pie never -- was able to sell pie to Safeway?
John H. Schafer: Well, see these record stops in September 1961, almost immediately after this little promotion period. And what -- what goes on after that I can't tell you. But the fact of the matter is that when Continental made this two-week offer in June of 1961 to all buyers in the market, Safeway was the only major one that bought and Safeway at that time was buying from the Pet Milk Company, not on any contractual service but just buying because it shows to buy and promote those brands.
Abe Fortas: What was the price during the two weeks promotion?
John H. Schafer: $2.85 Mr. Justice Fortas, and --
Abe Fortas: $2.85 --
John H. Schafer: Yes.
Abe Fortas: -- for the bigger pie. What was Continental's price?
John H. Schafer: I'm sorry. Our price was $2.85, his price --
Abe Fortas: It's Continental's price?
John H. Schafer: That's correct, on a 22-ounce pie.
William O. Douglas: That was $2.89, I believe.
John H. Schafer: Well, in fact you have for a full truck price Mr. Justice Douglas, its $2.85 per lesser quantities, a quarter truck prices would be $2.89.
Abe Fortas: Alright.
John H. Schafer: And if -- when Continental quoted that price Utah Pies price for a larger pie was $3.10. Immediately after Utah -- Continental quoted its price, Utah Pie price drops from $3.10 down to $2.75.
Abe Fortas: Was that after Continental had made its deal with Safeway?
John H. Schafer: Safeway had -- had permitted itself to buy a truckload from Continental at the time that Safeway heard through the marketplace that Utah Pie had a lower price. Safeway went to Continental and try to give me the price down further to Continental. Continental said, "No, we can't do it. We can't make any money with that. We're not going to get any lower than $2.85. You can get out of the deal if you want to."
Abe Fortas: Well, if -- if you're putting yourself as problem that arises with respect to a price cut for the purpose of obtaining entry into a new market, I think we've got -- that that's a very in -- to me that's a very interesting problem. But if you're arguing here about did they or did they not reduce the price for the -- with or without the effect of -- of still applying Utah Pie's competition or the competition of catering anybody else here with it's different price in that. That's what I like to know, what is the basis of -- of your discourse here?
John H. Schafer: The thrust -- the thrust of what I'm trying to say is that the Robinson-Patman Act in proscribing price discriminations which may substantially lessen competition or tend to create a monopoly does not proscribe a two-week price discrimination by a marginal seller trying to get some business entered -- and enter that market and to create competition.
Abe Fortas: That's what I want to find out. And now is there -- are there any cases on that?
John H. Schafer: There are cases on that, Your Honor. There is the Anheuser-Busch case which was before this Court on legal question and went back on a much longer price discrimination, the Seventh Circuit said, no that's not a discrimination. And that's not the --
Abe Fortas: But no cases with this Court?
John H. Schafer: Excuse me?
Abe Fortas: There are no cases in this Court.
John H. Schafer: This Court has never decided on its merits in the area by discrimination case.
Abe Fortas: And the narrowed question then that this problem puts is whether there is a requisite prospective effect, present or prospective effect on competition.
John H. Schafer: Precisely. And that's what the com --
Abe Fortas: And what you're arguing is that this was all de minimis as shown by this record.
John H. Schafer: Well, I'm not saying there's so much meaning, I'm just saying this kind of -- of a flurry, a promotional flurry doesn't -- doesn't -- is not proscribed by the Robinson-Patman Act. That's what the -- the Tenth Circuit Court of Appeals basically held here. That on this limited time of a situation you don't have a -- a violation. I want -- would like in terms of has this Court have decided this matter, of course, the answer is no, but the Federal Trade Commission recently in the Dean Milk case stated in terms which I think are quite close in what the limitations of Robinson-Patman Act have to be when -- when applied to and area of price discrimination case because it's obviously, it only in -- in this situation, if the -- if the Act is applied indiscriminately that you're going to eliminate price competition which of course is the very thing --
Byron R. White: Or was the error --
John H. Schafer: -- which respondents are trying to do.
Byron R. White: -- was the error in this regard then made in the trial court, how about the instructions? Did the instructions placed this theory before the jury that do you think it's de minimis or --
John H. Schafer: No, no, it didn't Mr. Justice White.
Byron R. White: Did you make any (Voice Overlap) did you question the instructions in this respect?
John H. Schafer: Very definitely, I ask about the instructions which were taken out of the language of the cases which said in effect that short terms sporadic price discriminations are not un -- are not unlawful.
Byron R. White: Were they all turned down?
John H. Schafer: Oh! Everyone turned down in the trial court, excuse me.
Byron R. White: But this isn't -- this isn't the ground on which the -- as I understand it the Court of Appeals reversed. I didn't say there was an error in the instructions --
John H. Schafer: Oh! No.
Byron R. White: -- or different rule in the instructions.
John H. Schafer: No, I didn't say that. I just said there's no evidence here sufficient to sustain petitioner's burden of proving that there was reasonably likely an adverse competitive effect by reason of this two-week price discriminations.
Abe Fortas: Suppose the record show --
John H. Schafer: Under the law --
Abe Fortas: I beg your pardon. Suppose the record shows that a two weeks promotion during which six-week supply of product asked were sold to a great chain store resulted in driving a company out of business, would that give you the requisite competitive effect under the 2 (a)?
John H. Schafer: 2 (a) Mr. Justice Fortas is aimed at not the protection of individual competitors. The cases make that clear.
Abe Fortas: Well, that's your -- your position.
John H. Schafer: Well --
Abe Fortas: I -- I'm not sure of the case --
John H. Schafer: The appellate courts have said that.
Abe Fortas: Well, the case to make that clear, but how about my question?
John H. Schafer: Well, I would adopt the appellate court's interpretation of Section 2 (a) which says we are -- the statute is aimed at protection of competition genuine.
Abe Fortas: I see.
John H. Schafer: The individual competitor may sink or swim in the competitor prices.
Abe Fortas: I see. Your position is that even if a price distinction -- let me put it that way under 2 (a) results in driving a significant competitor totally out of business, if that doesn't sound the problem.
John H. Schafer: Well, you -- you got to distinguish the situation --
Abe Fortas: No, you don't have the ca -- you don't have the case anyway.
John H. Schafer: Well, you got --
Abe Fortas: You have to show -- you have to show damage to competition whatever that concept may mean.
John H. Schafer: Yes Your Honor, except for something like that Maryland Baking case applies. Now there, a long-term discrimination was applied against the defendant's only competitor in that market with the effect finally after four years, finding that the effect of driving that fellow out of the business, thereby creating monopoly in the discriminating sort. Now I'm not trying to assert you that that situation doesn't make out a 2 (a) case.
Abe Fortas: Well, I thought that was the question you're asking.
John H. Schafer: No, no. I think instead of a short-term, two-week price difference --
Abe Fortas: All that result in driving a competitor out of business.
John H. Schafer: With -- with the effect, excuse me, with the effect of creating monopoly as a result? Yes.
Abe Fortas: Well, do you think that driving a competitor out of business and your -- your position as I understand you is that that would not make up the case under 2 (a).
John H. Schafer: If you're assuming sir that there were 13 sellers in this market before the two-week discrimination, there are 13 sellers in the market, after this two-week discrimination, yes. I think my answer is yes.
Abe Fortas: I think very well would be assuming that this goes to say you drive one of my business.
John H. Schafer: No. Well, the appellant would come in with the two weeks, replaces the one that went out. That's my assumption. Continental comes in with two-weeks.
Abe Fortas: I see.
John H. Schafer: It's not -- and before that it's not in the market.
Abe Fortas: Your -- your position is that would and they -- you have 13 before and 13 after? Would that then make out of violation, it does not make out a violation with 2 (a)?
John H. Schafer: On -- on a two-week, yes, that my position is that. Yes. Of course, we don't have to -- I mean we're going far beyond the case here because this competitor flurries during this time. His sales, his profits his -- his payments of bonuses and salaries to his offices, everything went up sharply. So we're not dealing with anything, remotely resembling the facts as raised that you hypothesized. In -- in reaching the conclusion that the appellate court did that there was no evidence here sufficient to go to the jury on the reasonable likelihood and adverse competitive effect and -- and we submit to you that this -- in doing so the appellate court has simply fulfilled the usual function of the appellate courts in reviewing records to determine their legal sufficiency. There is nothing unusual about this case. I don't think frankly that it belongs here for that reason, now the courts both day in and day out do this and of course in terms of the expediting act this Court is precluded in having the benefit of that kind of review and many courts and many justices on this bench have said that we think it's a mistake. The appellate courts in government cases are -- are not able to give us the benefit of their -- of their appraisal of the record. This is what's happened here and I don't think on a two-week price discrimination of the situation such as this one there could be any reasonable doubt that there was here, evidence sufficient to go to the jury on the substantive core of the Patman Act in area price cases. You're always in this industry. You're going to have price difference, because the markets are unrelated. But to say that a price difference without more --
Byron R. White: Was there a price discrimination here that like your client?
John H. Schafer: For the -- in the two-week period time?
Byron R. White: Yes.
John H. Schafer: If you assume that advertising allowances are not price cuts, this $4 of invoice just show a price discrimination. The fact of the matter is that those $4 everybody who bought that $4 pie in California could buy 50,000 dozens, could run an ad in a newspaper, one newspaper, the size of my thumb, one time and get a dollar fifteen off of it. And --
Byron R. White: Were there were evidence of that -- that somebody could conclude there was a price discrimination?
John H. Schafer: Sure. I -- I'm assuming for purpose of this argument Mr. Justice White that that there was a price discrimination for two weeks time. Assume that.
Byron R. White: And one that was unjustified by meeting competition?
John H. Schafer: Yes, yes. Assume that even. But that's not prima facie a violation of law.
Byron R. White: Well, I didn't say it was, I'm just trying to get --
John H. Schafer: Yes. That's what the appellate court held as I read their opinion, it assumed for purposes of argument that for two weeks some place in the country, Continental Baking Company was selling at higher price than $2.85.
Byron R. White: Well what if -- what if coming in with -- for two weeks it triggered a price war and wherever it precluded the -- drove the prices down and then know you could never end -- nobody could get the prices up again?
John H. Schafer: Well, that was basically a conspiracy case. He tried that, he tried the conspiracy case.
Byron R. White: But if he doesn't need before the 2 (a) case doesn't need to prove conspiracy --
John H. Schafer: No we have to prove that the discrimination charged by Continental had certain effects.
Byron R. White: Oh! Yes. And I'm saying that that the discrimination drove -- drove these whole pies price down and they couldn't get them back up. So that had a continuing consequence on -- on Utah Pie.
John H. Schafer: A mere price is going down isn't a proof of that adverse competitive effect. The important fact is he sold more pies in this period of time than he sold like before.
Byron R. White: And --
John H. Schafer: A mere fact that price is going down is usually considered to be competitive, Mr. Justice White.
Byron R. White: No, increase in volume doesn't present that -- doesn't present damage.
John H. Schafer: No, I -- no, if you're talking about damage to him that's after he proves a violation of law (Voice Overlap)
Byron R. White: -- lawsuit.
John H. Schafer: Excuse me?
Byron R. White: Increase in volume just might increase your loses.
John H. Schafer: Well, that's true. But I'm talking about is -- is a decrease in price by itself, evidence of an adverse competitive effect proscribed by the statute. And generally speaking, I think you have to say that at lower price is consistent with competition.
Byron R. White: Yes. But your -- the position you've take this almost saying that a two-week price that can never violated the Act.
John H. Schafer: Well --
Byron R. White: Mr. Justice Fortas poses you one case when you said yes it could, now I'm just posing you another.
John H. Schafer: Well, it -- it's not impossible Justice White but in second -- even in secondary level cases where of course the competitive effect is much more likely to be shown because one could -- one competitor who was buying for resale, he's buying at a higher price than this competitive right across the street. He's going to be hurt. But even in -- in those situations the appellate courts have held that that too temporary, too sporadic to be the kind of adverse competitor effect which statute is the same them.
Byron R. White: Just as it ruled them of per se.
John H. Schafer: Basically, that's what they said. Well, they -- they limited their holdings to those -- the fact situations in those cases. But it seems to me that where you're getting with secondary level case were compete -- an injury to competition almost assumed that that those cases are a fortiori to the situation here. And I think you're going to have aptly reluctant to write up any rule that says immediately upon there being a price difference between unrelated markets between Bangor, Maine and Albuquerque, New Mexico, that even though the Albuquerque price drives down as the competitor's prices for few weeks, it seems to me very awfully reluctant to say that that's the kind of prescription written in the -- into the Section 2 (a), and then in your own decision in the Anheuser-Busch made it perfectly clear that the Court did not construe --
Byron R. White: So you are --
John H. Schafer: -- Section 2 (a) in an area case to proscribe your price differences.
Byron R. White: Your position really is that on this evidence that the questions should never have gotten on the jury against Continental.
John H. Schafer: That's correct, that's correct. Actually, the kind of case that to do it that you'll be able to get a motion for summary judgment but of course we -- we presented argument, that was the heart of our motion for directive verdict, it was the heart of our motion for judgment N. O. V. We also argued that the petitioner had never proved any impact, even assuming a violation of law then convenient to his business or property. And of course he hasn't, as a review of this record will show you. But that was the second basic ground for our -- for our directive verdict motions and our N. O. V. motions. I see my time is practically up. In terms of the Denver case which he also argues alternatively all you can do there is read the -- read the charge that went to the jury speaking only of Utah, only of Salt Lake City and quite clearly that charge do not tell that jury to make any determination as the Denver facts and that the chart is in the -- is in the record and they will -- they will explain it to you the propriety of that holding of law made by the appellate court. Now on the procedural questions, I -- I have only about five minutes, both sides have agree in their brief that the Court of Appeals met to foreclose a new trial. And we submit to you that the authority, it's clearly there, it's not in Rule 50 (d) or any place else. It's in the statute 2106, it's been in the statute since 1789 and you can trace it through as I have in my brief. Now, 50 (d) doesn't add towards the track down of that statute, the -- the Section 20 -- Section 2072 of the U.S. Code would not per -- permit a rule of procedure that it finds on appellate courts that is Enabling Act itself is limited to promulgation of rules for District Courts, practices and procedures in District Courts. One reason I think that 50 (d) doesn't say and this appellate court may deny instead to do so is beyond the scope of -- of Enabling Act. Now, the reason that says that it may grant, I think, is purely permissive language. There was some confusion in the cases as to -- as to what the impact of Redmond was and whether or not the appellate courts could in addition the granting N. O. V. and directing judgment below, if they also could grant new trial and some of the cases we've cited expressed some concern, now that maybe, I don't know I can't tell the Court. Definitely, but that maybe the reason why 50 (d) is written the way it is, I don't know. But the fact of the matter is that all of these other cases, Redmond, Slocum, Hennegan, all endorsed the proposition that Section 2106 gives the appellate courts the authority, gives them authority to enter any, physically, any order that is just to require here any order that is just. Now, when the Cone decided the -- the holding in Cone and in effect limited 2106 and in that way tended to -- well, Cone said in certain circumstances the appellate courts may not order judgment be entered below. But the reason you had to say that was to protect the force and efficacy of -- of the debate. What you had to do was to prevent an appellant having a choice between which Court is he going to ask for new trial. Now, if you let him get away with what he try to do in Cone and in fact what he does is withhold this motion for judgment N. O. V. in the trial court then present it to the appellate court on a theory that maybe -- on a theory that maybe this Court is must apt to foreclose a new trial. Now, in order to avoid that kind of forum shopping here you've got to hold that this Court, any appellate court has the authority to make the new trial decision, it's perfectly clear that it does in my judgment. It can review and reverse grants of new trials Fairmont -- your own Fairmont case makes that clear and if you're going to say to this petitioner in effect why you didn't ask for a new trial in the appellate court but that doesn't preclude you from going back to the trial court to ask for it. You just obviously give and clearly he can ask the appellate court first because that's right in Rule 50 (d). And to say to him, "Well, you can have your choice. If you think the trial court's more apt to give you a new trial withhold your motion from the Appellate Court. And then go to the trial court for it -- with it," but that can't be a reasonable rule of law. There's no -- there's no reason for that. Moreover, the common rationale is that we're going to make you follow this strictest rule of 50 (d) because if you do it, if you make your motion for a new trial and N. O. V. in the trial court, you're going to get that judge to correct the errors he may have made and you're going to get a chance on a new trial for a fresh appraisal of the witnesses in the evidence, to determine whether there should be a new trial. But you don't have that in the case like this where the trial judge is insistent upon entering judgment on the verdict and denying a new trial. You're not -- he doesn't have any opportunity to correct his errors. He's -- he's going to insist on these errors if there were. And he's got, when this case goes back after a lengthy appeal, two years, three years, he's got no fresh appraisal of -- of the witnesses or the evidence to bring to bear on this matter or should have been a new trial. He may not even be sitting for all we know. But in any event the case is stayed by then. And there's no reason that I can think of why we should be more interested in his -- his single individual exercise of discretion in this context than the exercise of discretion if you will by three judges on an the appellate court county. Let the appellee follow the dictates the Rule 50 (d), make the motion that's required under that rule. Let the appellate court while the case is overly there. Let it decide, is there any ground for a new trial. If -- if the ground were -- I've got some new evidence, make them determine that. This petitioner doesn't say it has any new evidence. He just wants to go back and have ano -- not to go with Denver. Well, if he made that motion in the appellate court, the appellate court could have -- could have decided that matter just as well his judgment occurred and there's nothing -- we think there should be a flexible rule. We don't say that in every instance the appellate court need make it and foreclose trial court discretion. There would be some instances where it should be sent back as the Rule 50 (d) makes it perfectly clear. But there ought to be a flexible rule, for instance in the area of -- of judicial, of -- of equity judges writing decrees, shaping their own decrees, there's nothing more sink or swim, that's the discretionary with them and yet there are instances such as the El Paso case where the Court, in that case this Court, say, we're not going to leave divestiture, we're not going to leave relief to the discretion of the trial court in this instance. We're going to order in this instance, we're going to order that divestiture be accomplished. And that's perfectly proper. It should be a flexible rule. We can't write a rule that's going to apply to all situations, there should be --
Earl Warren: Would a record of this size do you think that the -- the appellate court would be in as good position to determine whether a new trial should be granted as a man who spent weeks or maybe months trying the case?
John H. Schafer: Well, Mr. Justice Warren, I firmly believe as I argued in my brief that if the appellate court was asked to decide the merit, it would hold that on the law there was insufficient evidence of an adverse competitive effect in the Denver market because there's nothing shown there -- it's just a pure legal question in other words, Mr. Chief Justice --
Earl Warren: Wouldn't that require --
John H. Schafer: -- and they can make that decision.
Earl Warren: Would that require him to read the record?
John H. Schafer: Well, they have to read the record anyway in connection with their -- with their whole appellate process.
Earl Warren: Do we have to read the whole record here now?
John H. Schafer: I have submitted to you that I don't believe you have to because I don't think you have to get into all of those facts. But I'm not saying to you that you have to make a determination as to the adequacy of the Denver facts. You may do so of course, but I don't it's necessary. You can affirm the appellate court in this situation simply on it's reading of the charge that went to the jury, and it's not necessary for you to read these. And the alternative argument we made in the Denver Court and in this Court that in any event even if that case did go to the jury, it was insufficient as a matter of law and judgment N. O. V.ought to have be granted on the Denver market.
Hugo L. Black: Are there any facts stated in the Court's opinion which you object?
John H. Schafer: None, Your Honor.
Hugo L. Black: None.
Earl Warren: Mr. Billings.
Peter W. Billings: Mr. Chief Justice, may it please the Court. I represent the Carnation Company, the second of the three individual defendants against whom these individual Robinson-Patman Act charges were brought. My task this afternoon is to outline the different facts with respect to Carnation as compared with the facts as to the other two. I'm starting out by saying a particular answer to I believe Mr. Justice Brennan's question that this Court need not concern itself with the several feed of record here with so far as Carnation is concern. I understand Mr. Alioto's answer to Mr. Justice Black's question that data doesn't particularly question the Court of Appeals analysis of the facts as to sales, prices, volume, profit, market share, the key issues in this case so far as Carnation's concern, so that I think that --
Hugo L. Black: Do you object to the Court's statement of fact?
Peter W. Billings: No sir, I do not. And I think that so far as Carnation and the kicker with respect to Carnation, this Court need look no further. Mr. Alioto took exception with two aspects of the Court of Appeals statements, one having to do with Bel-air which doesn't concern Carnation. The other had to do with the Denver market which does not concern Carnation. I think all this Court need look at is the statement of facts of the Court of Appeals in Volume 15 of the record. So that -- so far it's concern, the task is relatively simple.
Abe Fortas: And then what? We look at the statement of facts in Volume 15 of the record and then what do we do?
Peter W. Billings: Conclude that the Court of Appeals, Your Honor, was correct in its disposition of the case so far as Carnation is concerned.
Abe Fortas: On what basis, what part of the Court of Appeals, in finding that there was no evidence, not sufficient evidence to support the correct judgment of law?
Peter W. Billings: Yes sir.
Abe Fortas: Well, then how can we do that without looking at the evidence. I may have fallen off your bicycle here. I don't understand how we can say that the Court of Appeals was right in concluding that there was insufficient evidence unless we look at the evidence.
Peter W. Billings: Well, what I'm saying is --
Abe Fortas: It is -- maybe there's some principle here that I'm missing.
Peter W. Billings: I didn't mean to skip that over rapidly, Your Honor. What the point I was making is that as I understand that both petitioner here and the respondent Carnation agree that the facts of the evidence as stated by the Court of Appeals with respect to Carnation is correct.
Abe Fortas: I know --
Peter W. Billings: That is I'm talking about --
Abe Fortas: They have a great difference between the facts as stated by the Court of Appeals and the evidence for example, your opponent was very careful to say and very insistent that there are other facts and you think some of it would be taken into account. But however that may be, are you suggesting that we can take the statements of counsel, it even looks suppose the counsel on both sides as -- as to the facts and that that one relieve us of a necessity of looking at the evidence.
Peter W. Billings: Well, I think Your Honor --
Abe Fortas: It might be a very welcomed principle and -- but I'm not sure that I'm familiar with it.
Peter W. Billings: Oh! I'm sure Your Honor that if the counsel for petitioner thought that there were some facts which the Court of Appeals had overlooked, he have been quick to point them out.
Abe Fortas: I though it did, he did. And the --
Peter W. Billings: But not --
Abe Fortas: -- and the limited time here I thought he pointed -- tried to point some out and also got to try to point some more out on his brief.
Peter W. Billings: That's true but the point I want to make is that those do not concern Carnation and that my task here this afternoon is to point out to you why? That the points which concern Carnation, i.e. the -- the prices of which these frozen pies were sold, the volume which were sold by each of the parties. The profits which were made, the market share which was gain by each of the parties are not questioned. The evidence if in effect was stipulated, both parties introduced the market share study for example. And what I want to do now, if I may, would be to turn to what those facts on.
Hugo L. Black: Can I ask you one more question about the Court's opinion?
Peter W. Billings: Yes sir.
Hugo L. Black: Supposed one would read the facts stated in the Court's opinion and reach the conclusion that those facts are true that there was a disputed question to go before the juries, would they have to read in the verdict?
Peter W. Billings: I would say this Your Honor that so far as -- as the Carnation's concern that reading any further in this record with respect to it would not aid the Court in -- in determining that particular issue. I think --
Hugo L. Black: That was consensus?
Peter W. Billings: Yes. Alright, now if I may, I'll turn then to the facts with respect to Carnation on this key -- key argument. And I think perhaps maybe the best way to do it might be with respect to taking it on a year-by-year basis. Carnation entered this business in 1955.
William J. Brennan, Jr.: Which are the Carnation products?
Peter W. Billings: The Simple Simon, the red line.
William J. Brennan, Jr.: Yes.
Peter W. Billings: And it had been in the Utah market since 1955. In 19 -- late 1957, early 1958, the petitioner Utah Pie Company entered the market at this level substantially below the level in which Carnation was selling its pies.
Potter Stewart: Now, Utah had been in the general pie market --
Peter W. Billings: Fresh pie.
Potter Stewart: And not in the frozen pie market?
Peter W. Billings: Not the frozen pie, just the fresh pie market, Your Honor.
Potter Stewart: It had been a family business and generally in the pie, making pie.
Peter W. Billings: That's correct.
Potter Stewart: For some or so years.
Peter W. Billings: Selling in grocery stores and so on.
Potter Stewart: Selling in grocery stores, and it was in 1957, not until 1957 that they entered the frozen pie market?
Peter W. Billings: That's correct. The -- the record shows that they were losing substantial sums of money in their fresh pie business and that probably it was one of the motivating factors which why they went in.
Potter Stewart: They came in and --
Peter W. Billings: They came in and --
Potter Stewart: Basically in Salt Lake City and the -- and the environment within the area.
Peter W. Billings: That's correct, Your Honor. I might say why we're talking about that. That's our position and this is the only relevant market concerned here, that of the petitioner sales there were only, there was one costumer in Spokane, Washington as to which it -- the -- the Utah Pie Company sold F. O. B. in Salt Lake City on a special label basis, the Sonny Boy label. The other -- only other customer it had of any size or toll or any volume outside of this -- in Salt Lake area with which it should be Utah and Southern Idaho where -- where one period in 1959 when it sold some substantial sales of pumpkin and mince. I didn't have the record that shows that about 98% of all their sales were in the submitted area and that's the area I'm talking about, that's what the chart for example refers to, that's what the market share study refers to and so on. As a result of coming in at this level, Utah Pie captured 66% of the market in the Salt Lake area that first year.
Potter Stewart: What does that mean, is that a price level or what is it? To --
Peter W. Billings: Yes, Your Honor. This is -- it's like -- this is indulged in the case. I beg your pardon.
Potter Stewart: Okay, that is in dollars.
Peter W. Billings: That's a little about $2 --
Potter Stewart: That's $2 per case on the left (Voice Overlap) I can't figure those --
Peter W. Billings: There are six pies to a case. So that two cases to a dozen in effect. And that could show the only, the first prize cut being made was right here in 1958 and at this time our prices were way up here. At that time our prices were the same in Salt Lake as in San Francisco and the Los Angeles.
Potter Stewart: Where -- where was your plant, the plant --
Peter W. Billings: Los Angeles. We only have one plant Your Honor, in Los Angeles.
Potter Stewart: And that supplies this market?
Peter W. Billings: Yes. Now, with respect to discrimination which is half of the elements of a violation statute, I think the most illustrative aspect of what Carnation was doing, it's contained them the exhibits which are in pages 57, 68 and so on in Volume 50 and on bond 50 in this record, and as I have the one here for Southern California and this is the relationship chart. The red line B whether the price in another market this one, Northern California was higher or lower than the mar -- than the price in Salt Lake City which is the center. It doesn't mean that Salt Lake City price was constant, it was varied. But the -- the relationship was varied. The reason for that was that Carnation found that it couldn't maintain list prices, there's own prices in any market that within a week or so after they've published their out of dates. So it finally it just left its list prices as they were and in each market, the relatively short period would come up with a particular deal or special offering for that particular period to meet whatever the situation was in that particular market. So in every market around in the whole west of United States where Carnation was selling, it was selling at different prices at different times but there's no pattern of any sustained discrimination with price differences between anyone in the market and any other market. Now -- now with the situation all through 1958, so after when this price cut came the -- our prices were identical in Salt Lake and in the other market. In 1959, Carnation lost even more volume that it had lost in 1950 to the petitioner, Utah Pie, in a cut of 66%. The -- and Utah Pie --
Potter Stewart: I don't -- I don't quite understand the coordinates on that graph, and just so that I can have some basic understanding of --
Peter W. Billings: That's $2 a case.
Potter Stewart: Those are prices per case, that --
Peter W. Billings: That's' correct sir.
Potter Stewart: -- up and down in the left, and what's across in the bottom, J-A-J-O?
Peter W. Billings: This is the 59, this is 58, this is 66.
Potter Stewart: Well, what are those letters, J-A-J-O?
Peter W. Billings: January, April, July, October January, in other words this is supposed to --
Potter Stewart: Coding?
Peter W. Billings: -- impact to space out the months.
Potter Stewart: Uh-hmm.
Peter W. Billings: I'm sure this is number one. It's kind of this way, implied --
Potter Stewart: Yes. And where it -- and then where is the percentage of the market, is that shown?
Peter W. Billings: It's not shown, Your Honor.
Potter Stewart: Not shown in any the graph.
Peter W. Billings: It shown map on page 25 of my brief.
Abe Fortas: Mr. Billings, that table -- that chart in the tables on 13 and 14, did they reflect your actual selling prices or do they include deals that you may have made the Safeway or others?
Peter W. Billings: The price is on page 13 and 14, these would reflect the deals.
Abe Fortas: You mean, you mean the deals are included in there?
Peter W. Billings: This would be our net price in each.
Abe Fortas: Because your second footnote does not indicate that to me on page 13 of your brief. And I may be wrong about this.
Peter W. Billings: I don't understand what --
Abe Fortas: Well, I want to know whether these are the actual selling price, these prices for example which is sold to the large chains.
Peter W. Billings: We sold Your Honor the same price to everyone. We had four volume brackets but there was no difference as between anybody and anyone who could qualify, got that right. As a matter of fact we only made one sale at the lowest bracket in the entire period in Salt Lake because of the prices which the plaintiff was offering to apply to these large buyers. We weren't able to sell it to any large buyers, our sales -- sales roll to small buyers at the higher price bracket.
Abe Fortas: So we're not here talking about a promotional price reduction.
Peter W. Billings: We're talking Your Honor at the net price at which the pies were sold in each market at all particular time.
Abe Fortas: Right. Now, in connection in the Continental argument they're just pertinent, the Court words it this was a -- they were selling at a promotional price in order to gain market acceptance.
Peter W. Billings: Yes sir.
Abe Fortas: But no such situation is presented here with respect to Carnation, so --
Peter W. Billings: No. Well, let me put it this way. In every market including Salt Lake, from time to time Carnation would have promotional deals offered. So somebody sends of per case for advertising allowance and with respect to -- to Utah, it was called an -- an invoice allowance because Utah has peculiar sales below con statute, but that -- and the prices is shown on this chart. The prices which are shown in our brief are those net prices.
Abe Fortas: Then in other words they are your usual ordinary customary prices minus whatever you take off to arrive at your promotional prices.
Peter W. Billings: That's correct sir, in each time. That's right.
Abe Fortas: Thank you.
Peter W. Billings: And the only time, the record will show, the only time we ever approach Utah Pie as we -- and -- in February or March of 1960 after we have had two successive years of potential losses of volume and losses of markets. For 1959 we had all -- all time law in market sharing. We tried for a couple of weeks in 1960, come down to this price level. It wasn't successful amount and what this chart shows our prices then trended upwards during the balance of a four-year period covered by this lawsuit. So that by -- in the latter part of 1960 to most of 1961 we were entirely out of the market, and the market shares figure show that. All during this period, the Utah Pie Company substantially increased its volume of the market share primarily by the lower price charged for it's Utah brand secondarily by its special label Frost 'N Flame which came in below any other pie in the market and captured one of the largest buyers and it completely exclude us from that particular market. Now --
Byron R. White: Well, do I understand that those prices of yours are the same all over the United States?
Peter W. Billings: No sir, you -- they are not.
Byron R. White: Well was there a discrimination in price between --
Peter W. Billings: There was -- there was Your --
Byron R. White: -- your company between the Salt Lake City market and other markets?
Peter W. Billings: From time to time there was. Our point is that time of any price cuts by Utah Pie Company there was none, and our prices in every market were varying at all times because -- resulting from whatever particular competitive situation there was in that particular market. And that --
Abe Fortas: That's what I'm trying to get that. These are generalizations then, are they not averages, the figures on that tables one and two and the --
Peter W. Billings: The figures --
Abe Fortas: -- and the figures reflected on that chart?
Peter W. Billings: The figures at one and two Your Honor are -- these are also like market prices, all through these tables and they are taken from actual invoices.
Abe Fortas: As an average of this --
Peter W. Billings: Well --
Abe Fortas: What are the points of time within these months when the prices were lower than the prices here stated, that's from the time you get at.
Peter W. Billings: I doubt that that would be so. The problem is Your Honor and the reason I hesitate to answer that question is that the plaintiff here didn't introduce any invoices with respect to Carnation. It did with respect to Morton and Pet, that's why this record is so long. All were going to do with respect to Carnation were pricelists and then these filling out since which we made to dealers or buyers which show that for two-week period during March the price be 22 cents off and that sort of thing. And -- and from that we were able to compute what the prices were, offering prices but there is no evidence of any particular sale at any particular time by Carnation in the Salt Lake market or any other markets. So the answer to Mr. Justice White's question, the only evidence of any price difference is again, these list prices and this deal offerings and all of these other markets, there's no evidence of any particular se -- two contemporaneous sales and two different markets at any price. One has to sort of assume from that, to that price which these price were sold. And that -- and the Court of Appeals did that. The point I want to make was that there was no extended period of price differences between Salt Lake and any other market for any particular period of time. That there was no relationship between Salt Lake market and any market because each market our pies were priced meet the competitive situations in that particular market. Now, I just want to advert, because I see my time is almost up to the procedures --
Byron R. White: Oh! Let's just -- let's just say that -- let's just say that you sell like $2 a dozen in Saint Louis and you sell it a dollar a dozen in Salt Lake because there you figured that's what it takes to sell pie in Salt Lake City. Now --
Peter W. Billings: That may or may not have happened. Your Honor.
Byron R. White: There is a discrimination there, isn't there?
Peter W. Billings: Oh, I won't question that. As I understand this Court's statement that (Voice Overlap) a discrimination within Section 2 (a) is a difference.
Byron R. White: And -- and if you're going to justify that discrimination and if the burden is on you to testify that discrimination, I suppose?
Peter W. Billings: Well, we don't -- there wasn't an issue about cost justification, Your Honor. I think what the Court of Appeals found was that --
Byron R. White: Well, your company has -- you say that your company has a general policy of selling at different prices in different markets depending on what the competition is.
Peter W. Billings: In that particular market, that's right.
Byron R. White: And even though you do not now say that you could cost justify it.
Peter W. Billings: That's correct sir. And that's (Voice Overlap)
Byron R. White: What are the -- but you do say that you had justified it by meeting competition?
Peter W. Billings: By meeting competition --
Byron R. White: Even though, even though you don't feel that you're competing for any particular customers, that you're meeting prices?
Peter W. Billings: We're meeting the general market level in each particular market. Now, some of these deal sheets which came out which were issued by the company indicated that in market Saint Louis when you pick for example, a pack less introducing an offer in such and such price and so we would come out with such and such a proposal which would bring us down to a point where we'll be competitive with Pet for that two or three-week period. That's the type of pricing and marketing we do. That's correct. But there was no -- as --
Byron R. White: What is -- what is the law in -- in Robinson-Patman Act cases, can you extend your market with that -- with that price discrimination?
Peter W. Billings: Well, as I understand --
Byron R. White: Even though you're meeting competition?
Peter W. Billings: As I understand if you're meeting competition you extend your market. I -- I don't think there's any evidence that we were doing -- now, what we are doing in -- in this case was trying to stay in the market.
Byron R. White: That even that --
Peter W. Billings: in each projector market.
Byron R. White: That you can -- then you can, you -- you could -- you could even know it's discriminatory price, meet the price of a competitor in order to take his customer away from it, if you wanted to.
Peter W. Billings: Or to retain the customers you have.
Byron R. White: Or to take one of them.
Peter W. Billings: Well, in each market the customers, where evidence shows shift back and forth because there's no brand loyalty on that being this is purely a price item and these are all temporary price adjustments and they bounce from time to time. I see that my time has expired, I just want to say one -- one thing with respect to the procedural matter, I think it's quite clear from the Court of Appeals decision that they did not intend to leave any discretion with -- to the trial court with respect to a new trial and they did it because on this record it's obvious that the petitioner here had every break in the trial court. The instructions went on his way, the treatment of the evidence went on his way, there was nothing that they -- and there's no contention with respect to Carnation that there was any part of this case that was overlooked by the Court of Appeals. Thank you.
Earl Warren: Mr. Lamb.
George P. Lamb: Mr. Chief Justice, may it please the Court. As counsel for the Pet Milk Company, I would like to focus two of the important issues which have been made by the Utah Pie Company in this case. They contend that because Pet occasionally had a different price between California and Salt Lake City, Utah even though they never met the Utah price or never beat the Utah price, that fact is a violation of Section 2 (a) of the Robinson-Patman Act. The Utah Pie Company says secondly, that if the Pet Milk Company has desires of selling frozen fruit pies in Salt Lake City at a lower price than it sells in Los Angeles or San Francisco that it must build a plant in Salt Lake City. Now these two issues were before the jury and they were contested by virtue of the instructions to the jury, they were before the Tenth Circuit. But in view of the fact that the Tenth Circuit decided that there was an insufficiency of evidence, these two points were passed over. Consequently, if the Court should decide that there was a sufficiency of evidence, this case should go back to the Tenth Circuit or this Court itself should answer those two questions in order that if we have to go back to the United States District Court to try the case again, we will know precisely what the law is on those two questions. Now briefly, that the Pet Milk Company, in about 1954 when their sales of evaporated milk were going downhill in due -- due to the change of economics in this country, they started too diversify their products and they were looking around for products would get what they called convenience foods. And they started applying the frozen fruit pie which was a brand new product. This was being manufactured in Beulah, Michigan by a man, by the name of Pet Ritz, that's where the name Pet-Ritz comes from. He was making frozen cherry pies in Beulah, Michigan, the president of the Pet Milk Company had a summer home up there and he bought one of these pies and found what a delicious pie it was, what a great idea it was to have frozen fruit pies. He acquired the Beulah plant, moved it the Frankfort, Michigan, used the test market in Chicago, Detroit, Toledo, and Milwaukee and found that there was tremendous acceptance for this high quality eight-inch, 24-ounce pie.Pet being a company that dealt in national distribution, it immediately established a plant with the Chambersburg, Pennsylvania and in Fresno, California in order to serve the entire market throughout the United States. Now, Pet had been in the Salt Lake City market for many, many years, selling ice creams, selling evaporated milk, selling dairy products, they weren't new in the Salt Lake market. They entered the Salt Lake market 1955 with this frozen fruit pie, two years before the Utah Pie Company ever went in the frozen pie business. Now, it is true that the Utah Pie Company was in the fresh pie business from 1927 up to the latter time. Now, the Utah Pie Company entered the frozen pie business in late 1957 which is two years after Pet had. Now, when Pet went into this frozen pie business it did precisely what most progressive companies do when they enter a market with the new product. They engaged in some very costly advertising and promotion. In the first year, 1957, they spent over $900,000 on television and radio programs and in-store promotions. The following year, they spent some over $800,000. They went along for about three years and the first thing you know they noticed that that small fresh fruit pie companies throughout the entire United States could enter this business with practically no difficulty whatsoever. As a consequence, it was extremely hard for them to bring themselves into a profit position because they were spending so much on a promotion. Now, they didn't do anything differently than Ford Motor Car Company did when they spend $160 million to tool-up on the Mustang and a million dollars in the advertising in the first 13 weeks when they put that car up. If you wanted to buy a Mustang at cost, it would probably cost you about a $150,000 if you bought the first car up the line. I can remember about a number of years ago, I asked an executive friend of mine in Westinghouse, if he'd get me a colored television at the said cost, he said "Well, I'll have a little difficulty getting it -- getting you one at this price. But I'm sure the company will be delighted to sell you what it cost because they're costing us $49,000 a piece as they're coming off of the line at this time." Pet's cost in introducing the frozen fruit pie throughout the United States where prohibiting in these first years and this small independent fresh pie companies that ought to get into the business got in after the consumer acceptance had been build up at a very high cost, then immediately brought one of its top executive in to examine this situation to find out if they could bring in into a proper position. They cut this out a thousand cost from $900,000 to $42,000. They had a market shares study done by the Market Research Corporation of Chicago and that company advised them that they have to get into an economy pie, if the American public, the housewife wanted a quality pie and an economy pie as a consequence Pet got into the Swiss Miss with a 20-ounce pie as distinguished from a 24-ounce pie. In addition, they discover that the competition at the chain store level is so great that they have to get into the private label business that they therefore started negotiations with Safeway to build a manufacture for them frozen pies under the Bel-air label which gives a label that's owned by Safeway stores. Now, after the Utah Pie Company went into the frozen pie business, what happened to it? Their first full year in the business, they sold 69,000 dozen frozen fruit pies in the Salt -- Salt Lake City market. They increase their sales in the Salt Lake City market until 1961 that the Utah Pie Company sold 248,000 cases of frozen fruit pies. They had a loss in 1957 of $5400. In 1961, they increased the profits of the Utah Pie Company to $30,000. They have nine member of the Rigby family working at the small plant. They increased their salaries from 1961 from $57,000 to $82,000. They have a great successful frozen fruit pie business in the Salt Lake markets. They made one mistake as Judge Phillips said in his opinion. They were the arch price cutter in the market. Rather than going in with promotion methods taking advantage of their Utah brand name which was known in that market, doing in-store promotions rather than merchandising their product, they decided that the way to get their business was to do it by cut prices and by severe cut prices.
Abe Fortas: Right. Isn't that what Pet did too?
George P. Lamb: That's not what Pet did Your Honor.
Abe Fortas: I thought you said they brought out a lower priced pie?
George P. Lamb: Yes, brought out the Swiss Miss pie which was a 20-ounce pie, it was of different quality and it was priced in relation to the 20 ounces as against the 24 ounces.
Abe Fortas: Well, as you stated Mr. Lamb perhaps I misunderstood you. I thought you brought a -- you said they did that in the context of the competition which they had to meet from a lot of small pie companies.
George P. Lamb: The Market Research Corporation of Chicago made a study recommended to Pet that if they're going to stay in the frozen pie business and get into the proper position they have to make two pies --
Abe Fortas: And I'm getting that -- getting that far --
George P. Lamb: One of an eight-inch, 24-ounce pie and two, an eight-inch, 20-ounce pie.
Abe Fortas: I'm getting that far as against the small companies.
George P. Lamb: That's -- get sufficient volume and then probably, and reduce their advertising cost and add innovation such as -- of trade problems combining our shipments and so forth and reduce their cost such as was done in the Balian Ice Cream case and they would bring themselves back into a proper position. Now, in the lower court, Your Honors, I introduced -- I have a study made by Drs. Lambourne and Anderson who are the economist at Utah State University, and my appellant here Mr. Alioto, seized my market share study and introduced it for me, got in the evidence before I had a chance to introduce it myself. My chart here 838 was introduced by Mr. Alioto and also the market share study was introduced by him and it's him who gets in the record and shows you the relative position of these three respondents and of the Utah Pie Company. Now, each case has six parts. Now, this -- this chart shows the purple line here is the Pet-Ritz pie which is the 24-ounce, eight-inch pie manufactured by the Pet Milk Company. The red line is the Simple Simon pie manufactured by Carnation. The orange line here is the Utah Pie line. The dotted purple line is the Bel-air pie and the Swiss Miss, purple is the 20-ounce Pet pie and across to the plain, orange is the Utah private labeled pie and the green is the Continental pie. Now, this Bel-air is a misleading situation. The Safeway Company purchases its frozen fruit pies from an F. O. B. mail basis. Therefore, if you are to get a true picture of a Bel-air price, you have to have add the freight from Fresno, California to Salt Lake. All of the rest of these pies are sold on a delivery price basis. Ironically, I have had an overlay made to show what happens when you add up -- add the freight to the Bel-air price. Well, I use 16 cents which is a mean between 32 and 35 which is in the record. Mr. Alioto's expert witness, an accountant said that the price per dozen from Fresno to Salt Lake City was 48 cents. I use the smaller figure of 16 cents. Now, when you add the 16 cents to the price of Bel-air pies, you will see that the price of the Bel-air Safeway pie is above the Utah brand pie, it's also above the Frost 'N Flame pie. Now, Your Honors when this study was made by Professors Lambourne and Anderson. They collected actual invoices of the sales made to the leading wholesalers in the Salt Lake City market. These are actual prices taken from invoices of each one of the -- of Pet, Carnation, Continental and Utah. As a consequence, you have a picture here which shows in relation to the Pet case that Pet never at any time lowered its price even equal to Utah much less bidding. Now, one addition in order to factor out the 20-ounce pie to a 24-ounce pie, I have had an overlay here which shows when the Swiss Miss is made into a 24-ounce pie, the line goes above the Utah brand label and all go above the Frost 'N Flame label. As a consequence, Pet never meant and never beat the Utah prices in the Salt Lake City market. Now, this is very important as far as Robinson-Patman Act case is concerned, we're going to talk about a primary line case, the main primary line cases which we have are the Mead versus Moore, Atlas Building Block, Maryland Baking, what happened if those predatory price discrimination did wrap up the cases, was a severe price dive that went below and stayed below and drove the object of that price cut out of business or diverted substantial business from that individual, that was not the case in the case of Utah. The case was exactly the opposite. The Utah Pie Company thrived.
Byron R. White: Well to what -- to what point is this argument though that there was no damage to Utah Pie?
George P. Lamb: No damage done to Utah, no damage done to the competition.
Byron R. White: And not that there wasn't any discrimination --
George P. Lamb: And therefore, no (Voice Overlap)
Byron R. White: Not that there wasn't a discrimination?
George P. Lamb: There was a difference in price and based on the definition of Anheuser-Busch of this Court, you could call it a discrimination. But as far as it is being a -- an illegal discrimination under Section 2 (a) of Robinson-Patman Act, it was not. It neither injured a competitor nor did it injure competition.
Potter Stewart: Frost N Flame was a Utah brand?
George P. Lamb: That this was their fight brand.
Potter Stewart: Yes, what were their other brands? They were -- there were a couple of code names, was it?
George P. Lamb: Well they had a -- Sonny Boy, Your Honor up in the Northwest and then their Utah brand here, this brand. This -- this is an eight-inch, 24-ounce pie, a quality pie which is directly competitive with the Pet-Ritz, with the Bel-air, and with Carnation, directly competitive.
Potter Stewart: That was the Utah.
George P. Lamb: That's correct, Your Honor.
Potter Stewart: And the Frost 'N Flame was a --
George P. Lamb: Well, that was a private labeled manufactured by Utah for associated groceries.
Potter Stewart: Right. And there was -- there's one or two control labels?
George P. Lamb: Well, this is one of them, Frost 'N Flame, and the Sonny Boy was another one and May Fresh was another one.
Potter Stewart: Yes.
George P. Lamb: As far as the Utah Pie Company was concerned.
Potter Stewart: Now when you're telling us that your client never, not only never beat but never met their prices --
George P. Lamb: Right, Your Honor.
Potter Stewart: Are you talking about their whole line or on an average or each of their lines?
George P. Lamb: Talking about the whole line. Talking about their whole line, as far as our situation is concerned --
Potter Stewart: Individually and collectively and you made that -- two brands.
George P. Lamb: That's correct. Well three, Swiss Miss, Bel-air and Pet-Ritz. We sold this to the private labeled Safeway, Bel-air.
Potter Stewart: And -- and was Bel-air the equivalent of Swiss Miss or the other way?
George P. Lamb: No. Bel-air is the exactly comparable to Pet-Ritz.
Potter Stewart: It's a quality --
George P. Lamb: It's an eight-inch, 24-ounce quality pie.
Potter Stewart: Quality, not the 22 --
George P. Lamb: Made -- made to the specifications of the Safeway. That I might say here --
Abe Fortas: This was who -- the Swiss Miss was a smaller pie than Utah?
George P. Lamb: Yes -- yes, Your Honor. The Utah was 24-ounce, Swiss Miss was 20-ounce. And -- and Swiss Miss was not the same quality either, it had less fruits. And it was a -- it was definitely an economy pie and was priced low for the economy market.
Abe Fortas: And it was priced below Utah but you say that when you --
George P. Lamb: When you factor those out --
Abe Fortas: -- try to factor it out and that brings you --
George P. Lamb: -- it goes up here.
Abe Fortas: Close to Utah.
George P. Lamb: It's just like saying whether or not you know the difference between a Cadillac and a Chevrolet.
Byron R. White: But you wouldn't suggest that the rule of law that there could never be a rel -- Section 2 (a) case made out unless the defendant has met or beat the --
George P. Lamb: I think -- I think you have to. I think -- I think there has to be an injury proving the competition or an injury to the competitor.
Byron R. White: Well, I agree to that but that doesn't mean that you have to prove that you either met or beat his price.
George P. Lamb: Well, I think that's an important factor, Your Honor.
Byron R. White: I -- I understand that but -- but you don't say that that's always true.
George P. Lamb: Not -- not always true.
Byron R. White: Is there -- do you know of any cases that say that this is a rule of law of anything?
George P. Lamb: No, I don't Your Honor.
Byron R. White: And so it depends on the facts that are regained.
George P. Lamb: That's right, Your Honor. Now, I would like to address myself for a few moments to the predatory tactics referred to by Mr. Alioto. First of all, for a guy who did a visit to the Utah Pie Company and we certainly don't condone that was a highly unfortunate thing, it was an isolated instance, it was only done once, has no comparison with a long planned efforts that were made in Standard Oil, American Tobacco, and so forth. It was certainly then advised and the young man who did it was severely chastised for it. If you read our Footnote 8 on page 59, I put the whole report in my brief so that there wouldn't be any doubt about what he said. It's complimentary whether than anything else. It was -- it was never used according to the testimony of Mr. Young, the chief buyer for Safeway, according to Mr. Deitman, the Chief Contract Officer for Pet, it was never used in any respect to -- to dan -- endanger the Utah Pie Company. As a matter of fact, on this question to Safeway sales --
Earl Warren: Was that a fact -- was that a fact for the jury to determine though?
George P. Lamb: That was the fact for the jury to determine, yes Your Honor. It was. I do think --
Abe Fortas: I guess --
George P. Lamb: -- in answer to one of the questions --
Abe Fortas: I guess its real significance is that it shows an awareness as a competitor of this particular plaintiff as bearing upon the whether the effect or whatever happened here a) was directive and b) had a direct impact upon the plaintiff here.
George P. Lamb: I think that such as in the -- in the General Electric case there is some discussion of this type of -- of strong competition and I think Your Honor that this is certainly wasn't an unfortunate incident. It was only one incident, it was isolated and I think it's been blown of all out of proportions in this case. But nevertheless, under matters of circumstances most companies that gives exchange visits back and forth --
Abe Fortas: I understand, I understand but I -- its problem takes a lot of dif -- may take a little different aspect when you look at it in terms of judicial dynamics and the question is this was something that might not impress the jury.
George P. Lamb: Yes Your Honor, I -- I think --
Abe Fortas: As to know sitting up here.
George P. Lamb: I -- I think that -- I think that is true, that it could have impressed the jury. Well, I brought Mr. Shank, the man who did it. I put him on as my witness and gave Mr. Alioto full opportunity to cross-examine him and introduce the whole thing in evidence, so it was clear open book. I told the jury precisely what happened, what an unfortunate thing it was. I think actually if the two companies that said let's exchange visits to our respective plants that would have been done that way. Because that's more modern and it is something that I think it's going to be blown out of proportion. Now, on its investment spending that Mr. Alioto speaks to, as far as that is concerned I think that this is partially what's done in introducing new products in the market. There has to be research and development cost, there has to be promotion cost, and so on. The Swiss Miss Brand was not a fighting ship. The Swiss Miss brand was an attempt to meet a demand in -- in the marketplace. Now, Your Honors, in summary, in so far as the procedural question is concerned. I'd like to say this that Mr. Alioto lost on the conspiracy count below. He was asking for $750,000 from Pet treble and he got $44,000 treble. Mr. Alioto is one of the most skillful line cost lawyers in the country. Now, his -- his Utah Pie Company was very ably represented in the trial of this case. As a matter of fact the judge sustained him a 187 times and sustained the defendants in this case 15 times. That the -- Mr. -- Mr. Alioto if -- if he had any idea that there was a possibility that he needed a new trial on this conspiracy count, he would have made a motion to that effect. He did not do that because of the disparity in the -- in the verdict, the $750,000 versus $44,000. I'm sure if he had thought he had grounds a new trial, he would have made it and then he had another chance to make the motion for a new trial in the Court of Appeals and he didn't make any motion for a new trial there. We feel very strongly that the Court of Appeals under 2106 has the power as this Court does and we do not think that if litigation is going to be ultimately ended that Rule 50 (d) has to be construed by this Court or it has to be amended, changed and clarified in order to make sure that litigation stops some place and we think under the circumstances in that respect that as far as the procedural question is concerned that the Court of Appeals have the right to do what they did and we think the judgment should be entered for -- for the Pet Milk Company as -- as directed by the Tenth Circuit. Now, we think as far as this Court is concerned that the Court can conclude that certiorari in the Pet case was improperly granted and can reverse itself on certiorari and allow the decision of the Tenth Circuit Court to stand. Thank you, Mr. Chief Justice.