Opinion ID: 293348
Heading Depth: 2
Heading Rank: 1

Heading: Evidence of Effects and Consequences of the Alleged Antitrust Conspiracy

Text: 80 The appellants challenge the District Court's ruling on certain evidence offered by South-East which concerned economic conditions in the coal industry in Eastern Kentucky. The evidence was principally statistical and related to such things as: the reduction in the number of miners employer in the coal industry, diminution of population in certain coal producing areas, wage scales in the bituminous coal industry, quantitive fluctuations in coal production in various years, income and losses of certain bituminous coal producing companies. The objection raised to this type of evidence was that it inordinately emphasized alleged 'effects and consequences' of the antitrust conspiracy, thereby misleading the jury to believe that the existence of an anti-competitive conspiracy or agreement could be inferred from these conditions. It is argued that this Court's decisions in Lewis v. Pennington, 400 F.2d 806 (6th Cir. 1968), and Ramsey v. United Mine Workers of America, 416 F.2d 655 (6th Cir. 1969), and the Supreme Court's decision in United Mine Workers of America v. Pennington, 381 U.S. 657, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965), specifically rejected the theory that an antitrust conspiracy can be proven by effects and consequences. The argument is not clear, but it appears that objection is not made to the admissibility of this type of evidence, rather that this type of evidence standing alone cannot, as a matter of law, serve as the basis for concluding that an antitrust conspiracy exists. 81 In United Mine Workers of America v. Pennington the Supreme Court stated that a labor union, having concluded a wage agreement with one set of employers, may unilaterally seek to impose the same terms on other employers even though it is believed that 'some employers cannot effectively compete if they are required to pay the wage scale demanded by the union.' United Mine Workers of America v. Pennington, at 665, n. 2, 85 S.Ct. at 1591. It was also observed that 'such union conduct is not alone sufficient evidence to maintain a union-employer conspiracy charge under the Sherman Act. There must be additional direct or indirect evidence of the conspiracy.' United Mine Workers of America v. Pennington, Id. The textual material, not the language of the footnote quoted above, appears in Lewis v. Pennington and Ramsey v. United Mine Workers of America. Appellants' argument apparently relies upon the language quoted above from the Supreme Court's Pennington decision. They construe this language to mean that evidence of the effects and consequences of an alleged conspiracy, e.g., statistics showing marginal producers are losing money and going out of business, reduction in the number of individuals employed as coal miners, et cetera, are insufficient to prove an antitrust conspiracy. 82 It cannot be said definitely that appellants' interpretation of the language in Pennington is either right or wrong. While this Court finds it difficult to construe that particular language in Pennington as appellants have, some support for appellants' interpretation of that language can be found in Mr. Justice Goldberg's dissenting opinion in Pennington appearing in Local Union No. 189, Amalgamated Meat Cutters & Butcher Workmen of North America v. Jewel Tea Company, Inc., 381 U.S. 676 at 714-715, 85 S.Ct. 1596, 14 L.Ed.2d 640 (1965). Even though the language in Pennington is not decisive, there is a logical basis for appellants' position. The 'effects and consequences' theory is basically a causal argument. That is, a cause (the antitrust conspiracy) has produced certain results or effects (reduction in the number of people employed in the mines, financial losses by marginal producers, et cetera). This type of argument has one chief flaw: The difficulty in isolating a single factor causally responsible for identifiable effects. Often there are intervening and superseding causes which if shown destroy the validity of the argument. The 'effects and consequences' theory appellants question appears to simply reverse the usually logical progression from cause to effect by first pointing to certain conditions and then concluding what caused these conditions. In any event, the problem of isolating a particular cause which definitely produced certain effects is still present. The law cannot be that an antitrust conspiracy can be proven by alleged effects and consequences of the conspiracy alone. If the only evidence a plaintiff could produce of an alleged antitrust conspiracy is statistics showing that they and other producers in an industry are losing money while some producers make money; that overall production in the industry is down while profits of certain companies are up; and that employment has dropped off in the industry, the defendants should have a verdict directed for them at the close of plaintiff's case. Plaintiff would not even have made out a prima facie case for recovery. 83 Regardless of how accurate these statements might be, they do not apply under the facts of this case. Reviewing the record, it becomes obvious that contrary to appellants' contention South-East's case does not rest solely on alleged effects and consequences to prove the existence of the antitrust conspiracy. South-East presented evidence of statements made by UMW and Consolidation officials tending to show that there existed an implied or expressed agreement between the Union and Consolidation; there was evidence of past courses of dealing and performance between itself and Consolidation which were interrupted or changed as a result of Union activity; there was evidence concerning what happened at bargaining sessions between South-East and the Union which indicated that some agreement other than the National Agreement (the Bituminous Coal Wage Agreement) existed between the Union and certain producers. 84 While the question of the sufficiency of this evidence will be dealt with later, the importance of indicating that South-East introduced other evidence from which the existence of an agreement to restrain trade or competition could be inferred, is to show that it did not rely solely on alleged effects and consequences of the antitrust conspiracy to prove its claim. If the only evidence South-East introduced was the statistical evidence referred to earlier, then the case should never have been submitted to the jury. However, this was not the only proof they offered. Evidence of the type which appellants object to is admissible and can be considered by the jury in drawing its conclusion on the issue of liability if there is other evidence which supports the claim. See generally, Local 175 of the International Brotherhood of Electrical Workers v. United States, 219 F.2d 431 (6th Cir. 1955); Standard Oil Company of California v. Moore, 251 F.2d 188 (9th Cir. 1957), cert. denied 356 U.S. 975, 78 S.Ct. 1139, 2 L.Ed.2d 1148. Therefore, while appellants' argument might be correct as far as it goes, it does not apply to the facts of this case. 85