Opinion ID: 414451
Heading Depth: 2
Heading Rank: 6

Heading: The Verdict for Litton as Customer

Text: 109 In addition to the injuries it sustained as AT & T's competitor, Litton alleged that it was entitled to recover $491,778.57 spent for the installation and rental of AT & T interfaces on its own internal telephone equipment for the eleven year period running from January 1, 1969 to the end of 1979. The jury awarded Litton exactly six-elevenths of this amount, $268,243, possibly reflected in the jury's initial determination that AT & T opposed certification in bad faith from and after 1973 until the end of 1978. We do not, for reasons stated in our discussion of Litton's claims as a competitor, believe that this verdict should be overturned on Noerr-Pennington grounds. But AT & T offers us three other reasons--one factual and two legal--to overturn the verdict. We reject each of them in turn. 110 AT & T's first argument goes to the sufficiency of the evidence supporting the jury's verdict. 46 Specifically, AT & T complains that the evidence was insufficient because Litton failed to itemize its expenses for the charges on an annual basis. AT & T waived this objection by failing to challenge the figures or request that the witness presenting them break them down. Fed.R.Civ.P. 46. Taking another tack, AT & T argues that Litton should have mitigated its damages by removing the interface devices as soon as the tariff requiring them was invalidated. 47 Aside from being inconsistent with its earlier argument that the jury apportioned the damages without evidentiary support, this argument cannot succeed because Litton's failure to remove the devices is readily explicable on the grounds that the expense of removal--some of the devices were permanently wired into the equipment--might have exceeded the savings resulting from removal. 111 AT & T's second argument against the verdict for Litton as customer relies on the filed tariff doctrine announced in Keogh v. Chicago & Northwestern Railway Co., 260 U.S. 156, 43 S.Ct. 47, 67 L.Ed. 183 (1922). There the Supreme Court held that a shipper could not recover under the antitrust laws for injuries sustained as a result of allegedly unreasonable rates that had been filed with and approved by the Interstate Commerce Commission. We have recently held, however, that the Keogh doctrine is inapplicable to ultimately disapproved tariffs ... when ... the regulatory agency expressly refuses to commit itself pending investigation. City of Groton v. Connecticut Light & Power Co., 662 F.2d 921, 929 (2d Cir.1981). In reaching this conclusion we relied, in part, upon our decision in Northeastern Telephone Co. v. American Telephone & Telegraph Co., 651 F.2d at 83-84, which held that a tariff filing does not immunize a regulated entity from antitrust scrutiny, and in part on the lower court's opinion in this case, Litton Systems, Inc. v. American Telephone & Telegraph Co., 487 F.Supp. 942, 951 (S.D.N.Y.1980). See City of Groton, supra, at 931. Unless otherwise advised by higher authority, we do not intend to disavow City of Groton or the import of our discussion on the interplay between regulation and antitrust immunity in Northeastern Telephone Co. 112 This case can be distinguished from Keogh and decisions holding the filed rate doctrine applicable, see McLeran v. El Paso Natural Gas Co., 357 F.Supp. 329, 331-32 (S.D.Tex.1972), aff'd without opinion, 491 F.2d 1405 (5th Cir.1974); City of Newark v. Delmarva Power & Light Co., 467 F.Supp. 763, 769-771 (D.Del.1979), because the issue here is not the reasonableness of the interface tariff rate as compared to some other rate that might have been charged, but instead whether the PCA requirement itself was reasonable, i.e., whether there should have been any charge at all. We thus believe that the concerns expressed in Keogh involving the possible inconsistency between the operation of the antitrust laws and an independent regulatory scheme designed to fix reasonable rates under a statute are not implicated here. We therefore affirm the lower court's holding with respect to the inapplicability of the Keogh doctrine. 113 AT & T's third and final argument goes to Litton's standing to seek damages as a customer. Essentially, AT & T argues that when Litton donned a customer's hat it placed itself outside the target area that delineates one plaintiff from another in terms of standing to sue. The target area doctrine was first enunciated in Billy Baxter, Inc. v. Coca Cola Co., 431 F.2d 183, 187 (2d Cir.1970), cert. denied, 401 U.S. 923, 91 S.Ct. 877, 27 L.Ed.2d 826 (1971), where we stated that 114 [A] plaintiff must allege a causative link to his injury which is 'direct' rather than 'incidental' or which indicates that his business or property was in the 'target area' of the defendant's illegal act.... These terms do not provide talismanic guides to decision but they do indicate the need to examine the form of violation alleged and the nature of its effect on a plaintiff's own business activities. 115 Customers are not per se outside the target area. See, e.g., Reiter v. Sonotone Corp., 442 U.S. 330, 341, 99 S.Ct. 2326, 2332, 60 L.Ed.2d 931 (1979); Pfizer, Inc. v. Government of India, 434 U.S. 308, 313-15, 98 S.Ct. 584, 588, 54 L.Ed.2d 563 (1978); Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 486 n. 10, 97 S.Ct. 690, 696 n. 10, 50 L.Ed.2d 701 (1977); Hanover Shoe, Inc. v. United Shoe Machinery Corp., 392 U.S. 481, 494, 88 S.Ct. 2224, 2232, 20 L.Ed.2d 1231 (1968); Mandeville Island Farms, Inc. v. American Crystal Sugar Co., 334 U.S. 219, 236, 68 S.Ct. 996, 1006, 92 L.Ed. 1328 (1948). The test is ultimately one of directness. We have thus looked to whether the conspiracy was aimed at a particular entity in the area of the economy threatened by anticompetitive conduct, see Calderone Enterprises Corp. v. United Artists Theatre Circuit, Inc., 454 F.2d 1292, 1295 (2d Cir.1971), cert. denied, 406 U.S. 930, 92 S.Ct. 1776, 32 L.Ed.2d 132 (1972), and to whether the injury in question was central to the attainment of the anticompetitive objective rather than a mere incident thereto, see Schwimmer v. Sony Corp., 637 F.2d 41, 48-49 (2d Cir.1980). 116 The Supreme Court has recently rejected an argument similar to the one AT & T makes here in connection with Section 4 of the Clayton Act. In Blue Shield of Virginia v. McCready, --- U.S. ----, ----, 102 S.Ct. 2540, 2548, 73 L.Ed.2d 149 (1982) the Court recognized standing of a health insurance subscriber who was denied reimbursement for psychological therapy under a policy term providing reimbursement for such services only if they were rendered by psychotherapists. The petitioners in McCready adverted to the target area doctrine, citing our decision in Calderone Enterprises, supra. In holding that the petitioner's injury was not too remote the Court pointed out that the target area test does not imply that it must have been the purpose of the [defendants] to injure the particular individual claiming damages, --- U.S. at ---- n. 15, 102 S.Ct. at 2548 n. 15 (citing Schwimmer, supra ). 117 In this case, as in McCready, it avails AT & T little to argue that customers are outside the target area because the anticompetitive effect, if any, of the interface tariff was aimed at terminal equipment manufacturers rather than customers. While an intent to injure a specific entity may well be sufficient to satisfy the target area test, our emphasis in Schwimmer on whether the injury was central to the attainment of the anticompetitive objective suggests that this is not always necessary. In this case, the jury found that AT & T imposed the interface tariff in order to maintain its monopoly position in the terminal equipment market. The tariff was aimed in the first instance at AT & T's customers in the sense that it applied to every user that chose to interconnect non-AT & T equipment. The tariff was perhaps the only way, and it was certainly the most efficient way, that AT & T could burden competitors seeking to establish themselves in the terminal equipment market. Thus, the injury to Litton as a customer was not remote even if injury to customers was not AT & T's first objective.