Opinion ID: 409686
Heading Depth: 2
Heading Rank: 2

Heading: Photovest Applied

Text: 37 Copperweld and Regal have two quarrels with the application of the Photovest criteria to this case. One centers on the instructions which the trial judge gave, and their failure to correspond exactly to the Photovest language. The second involves the sufficiency of the evidence, assuming that the instructions were substantially correct. 38 There is some dispute about whether the instruction issue has been preserved on appeal, 11 but we conclude that it is properly before us. 12 The defendants first criticize the instructions for failing to duplicate the Photovest factors verbatim (Br. 32-33). Yet Photovest itself, as Judge Will noted (App. 242), does not make its factors canonical. 39 (W)e must decide each case on its particular facts. Some relevant factors to consider include the extent of the integration of ownership, whether the two corporations have separate managerial staffs, ... the extent to which significant efficiencies would be sacrificed if they were required to act as two firms, their history, whether they functioned as separate firms before being partially integrated, and finally, the extent to which they may, acting as one, wield market power which they would not possess if viewed as separate firms. 40 606 F.2d at 726, quoting L. Sullivan, Handbook of the Law of Antitrust 328 (1977). There can be no claim, based on the language of Photovest, that this Court's ipsissima verba are necessary. 41 The more substantial issue is whether the instructions Judge Will did give (set out at App. 240-241) are consistent with the analysis undertaken in Photovest. That they are is convincingly shown in the Appendix to this opinion, where the instructions and the critical paragraphs of the Photovest opinion are juxtaposed. Moreover the judge's charge emphasized to the jury that they were looking for real, rather than merely formal, distinctness: 42 The rule is that a parent like Copperweld and a subsidiary like Regal are capable of combining or conspiring together unless they are operated in such a way as to, in effect, constitute just one company. 43 If you find from the evidence that Regal Tube Company is not sufficiently distinct from Copperweld as an economic entity, then you must consider them as a single person   . 44 (App. 156, 158; these statements immediately precede and follow the 9 specific capacity instructions.) 45 Despite this congruence with Photovest's approach, the defendants claim to have been prejudiced by particular instructions or phrases within instructions. 13 In view of the overall emphasis, there is no realistic possibility that the jury could have singled out any one factor-or part of a factor-to the exclusion of all the others. Furthermore, the defendants exhibit some confusion about how a balancing test works. Photovest took a variety of considerations and weighed them, and the balance in Photovest tipped in one direction. That does not mean that in all future cases the factors on the lighter side of the scale must be excluded. They may again turn out not to be probative, but it is not legal error to consider them. Of course, once a body of law accumulates, a court may redefine its balancing test or substitute a bright-line rule, based on its experience. We are not yet in a position to do that. 46 Our holdings so far-that Photovest governs this Circuit's treatment of intra-enterprise conspiracy and that Judge Will's instructions comport with Photovest -are virtually dispositive of the defendants' challenge to the jury's finding of capacity to conspire. Jury factfinding, unlike judicial factfinding, is not subject to direct attack as clearly erroneous. In view of the Seventh Amendment's prohibition (no fact tried by a jury shall be otherwise re-examined in any Court of the United States than according to the rules of the common law), a jury verdict can only be set aside if the evidence (viewed) in the light most favorable to the plaintiff and    (the) facts and inferences reasonably drawn from the facts    lead to but one conclusion-that there is a total failure of evidence to prove the plaintiff's case. Fact Concerts, Inc. v. City of Newport, 626 F.2d 1060, 1064 (1st Cir. 1980), vacated on other grounds, 453 U.S. 247, 101 S.Ct. 2748, 69 L.Ed.2d 616 (1981). 14 It is particularly appropriate togive (the plaintiff) the benefit of all inferences which the evidence fairly supports, even though contrary inferences might reasonably be drawn, Continental Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690, 696 (82 S.Ct. 1404, 1409, 8 L.Ed.2d 777)   , in complex antitrust cases    where motive and intent play leading roles, Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 473 (82 S.Ct. 486, 491, 7 L.Ed.2d 458)   , because (f)indings as to the design, motive and intent with which men act depend peculiarly upon the credit given to witnesses by the trier of fact. United States v. Yellow Cab Co., 338 U.S. 338, 341 (70 S.Ct. 177, 179, 94 L.Ed. 150)   . 47 Ohio-Sealy Mattress Mfg. Co. v. Sealy, Inc., 585 F.2d 821, 825 (7th Cir. 1978). 48 The issue here-how much separation Regal and Copperweld in fact maintained in the conduct of their business-is similarly fact-bound and inferential. 49 The plaintiffs presented evidence from which the jury could have found that 50 (1) Regal had existed as a division of C. E. Robinson Company and of Lear Siegler before its acquisition by Copperweld, and that Copperweld intended Regal to keep its ongoing business and keep serving the market and customers it was already serving (testimony of Smith, Tr. 3031). 51 (2) The acquisition of Regal did not have the practical effect of enabling Copperweld to handle additional steps in its own manufacturing process (comparable to the forward integration found in Photovest ), but established Copperweld in an entirely new line (testimony of Smith, Tr. 3029). 52 (3) Regal management had real autonomy in both day-to-day and policy decisions (Smith testimony, App. 708-710; Foster affidavit, App. 647). 53 (4) Not only were Regal's expenses and revenues segregated (Smith testimony, App. 708-710) but Regal's operating manager's compensation was based primarily on Regal profitability (Breedlove, Tr. 4934-35, 4937, 4958). 54 (5) Regal had a separate sales force and clientele (until the 1979 reorganization of Copperweld's subsidiaries) and made its own arrangements with suppliers of equipment and raw materials (App. 361-376 (sales); App. 305-308, 1054-1056 (suppliers))-a fact relevant to the ability of the defendants to bring pressure to bear on more people if they worked together than either could alone or than both could if Regal were a full-fledged division (Indep. Br. 31-32). 55 Taken together this information creates a much fuller and more consistent picture than did the two isolated (distinct entity) statement(s) in Photovest, 606 F.2d at 727, the same record on which a jury verdict of conspiracy was overturned in Ogilvie v. Fotomat, 641 F.2d 581, 589-590 and n. 27 (8th Cir. 1981). The jury here was entitled to conclude that Regal was not merely a service arm of (its parent), more like a corporate division than a separate corporate entity, Photovest, 606 F.2d at 727. 56