Opinion ID: 328803
Heading Depth: 2
Heading Rank: 3

Heading: Termination of Dealership

Text: 50 The district court granted defendants a directed verdict on the issue whether Hearst's termination of plaintiff was illegal because pursuant to a combination or conspiracy. The court found that Hearst's actions constituted a refusal to deal as permitted by United States v. Colgate & Co., 250 U.S. 300, 39 S.Ct. 465, 63 L.Ed. 992 (1919). 51 In Chisholm Bros. Farm Equipment Co. v. International Harvester Co., 498 F.2d 1137, 1139-40 (9th Cir. 1974), this court articulated the standard in directing a verdict: 52 As appellant reminds us, the Supreme Court has admonished that summary procedures, including directed verdicts, should be used 'sparingly in complex antitrust litigation 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 (1962); accord, Cornwell Quality Tools Co. v. C.T.S. Co., 446 F.2d 825, 832 (9th Cir. 1971), cert. denied, 404 U.S. 1049, 92 S.Ct. 715, 30 L.Ed.2d 740 (1972). Nevertheless, if an antitrust plaintiff, as well as any other plaintiff, does not present enough evidence within his case-in-chief to support a reasonable finding in his favor, a district court has a duty to direct a verdict in favor of the opposing party. Brady v. Southern Ry., 320 U.S. 476, 479-480, 64 S.Ct. 232, 88 L.Ed. 239 (1943) 75 S.Ct. 86, 99 L.Ed. 679 (1954). When considering the propriety of the grant or deni 75 S.Ct. 86, 99 L.Ed. 679 (1954). When considering the propriety of the grant or denial of a motion for directed verdict, the correct standard is whether or not, viewing the evidence as a whole, there is substantial evidence present that could support a finding, by reasonable jurors, for the non-moving party. Butte Copper & Zinc Co. v. Amerman, 157 F.2d 457, 458 (9th Cir. 1946). 'Substantial evidence is more than a mere scintilla.' Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 217, 83 L.Ed. 126 (1938); Butte Copper & Zinc Co., supra. The evidence must be examined in a light most favorable to the nonmovant. Continental Ore v. Union Carbide & Carbon Corp., 370 U.S. 690, 696 & n.6, 82 S.Ct. 1404, 8 L.Ed.2d 777 (1962), and there can be no weighing of evidence. Tennant v. Peoria & Pekin Union Ry., 321 U.S. 29, 35, 64 S.Ct. 409, 88 L.Ed. 520 (1944). Finally, appellant here is entitled to the benefit of all reasonable inferences that may be drawn from its evidence. Standard Oil Co. v. Moore, 251 F.2d 188, 198 (9th Cir. 1957), cert. denied, 356 U.S. 975, 78 S.Ct. 1139, 2 L.Ed.2d 1148 (1958). (Footnote omitted.) 53 Under the facts as alleged Hearst officials on several occasions advised Blankenship and others as to what would be proper retail prices. For a time Blankenship cooperated. On January 1, 1973, Blankenship increased his resale price and suggested to his carriers a corresponding increase in retail prices in excess of the schedule suggested by Hearst. Blankenship was terminated 6 weeks later under conditions that might lead to an inference that he was being punished for his pricing decision. 54 Had Hearst, solely been concerned with the resale price Blankenship charged, an announcement of a suggested resale price and a subsequent termination for failure to adhere to that price would arguably be the type of activity, announcement and refusal to deal, permitted by United States v. Colgate & Co., as modified by United States v. Parke, Davis & Co.,362 U.S. 29, 80 S.Ct. 503, 4 L.Ed.2d 505 (1960). But here Hearst allegedly enlisted at least Blankenship and perhaps all the other dealers in a combination to fix retail prices by means, apparently, of their leverage over their boy and girl carriers. It is a possible inference that Hearst maintained this combination by the technique of refusal to deal. A manufacturer may not use his wholesalers to bring his retailers into price line. Parke, Davis, supra at 45-46, 80 S.Ct. 503. A combination of Hearst, Blankenship and the other home-delivery dealers to control the retail price of the retailers-carriers would be unlawful. But so would a combination of Hearst and Blankenship alone also be an unlawful combination. The price discussions between Blankenship and McKinney in the fall of 1971, and Blankenship's adherence to McKinney's wishes subsequently would arguably create an inference that Blankenship and Hearst had an implied agreement to control the retail price of the paper. Albrecht v. Herald Co., 390 U.S. 145, 150 n.6, 88 S.Ct. 869, 19 L.Ed.2d 998 (1968); Chisholm Bros. Farm Equipment Co. v. International Harvester Co., 498 F.2d 1137, 1140 n.6 (9th Cir. 1974). See generally Theatre Enterprises v. Paramount, 346 U.S. 537, 540-41, 74 S.Ct. 257, 98 L.Ed. 273 (1954). Furthermore, Blankenship's adherence to the prices in the August 1972 letter for retail rates is additional proof of a combination to control retail prices. Therefore, Hearst's termination of Blankenship if done in order to maintain the retail price-fixing does not qualify for the Colgate refusal to deal treatment. Appellant was entitled to have the jury make this determination. 55 Defendant's additional contention that a jury could not reasonably believe that the termination was retaliation for Blankenship's failure to follow the price line is without merit. Given the award to Blankenship, the praise he received from his superior, the fact that the termination was not handled in the normal channels, and the fact that Myers, the circulation director, who also wrote the price control letter of August 1972, did the terminating these facts could reasonably imply that the termination was retaliation. Defendants' theory that the termination was because of a sharp drop in Blankenship's circulation because of his higher prices and his mismanagement is an argument to be weighed by the jury against Blankenship's version of the facts. 56 Defendants' use of Chisholm Bros. Farm Equipment Co. v. International Harvester Co., supra, is inapposite. In that case the dispute involved proving a Sherman Act agreement by means of proof of coercion and concerted action by several parties other than plaintiff. Here, sufficient agreement is shown by Hearst's several directives and plaintiff's acquiescence. Id. at 1140 n.6. The proof is much more direct here. 57 Defendants' last argument in support of the directed verdict is that plaintiff presented insufficient evidence on the issue of damages caused by termination. It is unclear whether the district court directed a verdict for defendants partly on this basis. In his exchange with plaintiff's counsel the trial judge indicated that insufficient proof of damages had been produced, R.T. 642-44, but when he rendered his judgment he stated as his reason the lack of proof of Blankenship's participation in a combination. R.T. 673-74. Appellant had attempted to introduce evidence of the value of a dealership for the Sacramento Union newspaper, but its introduction was refused because of an alleged failure to demonstrate foundation. Appellant also offered to testify himself to the value of the dealership. This offer was again declined because of an alleged insufficient foundation. Appellant did succeed in having admitted into evidence testimony of Myers, circulation director, as to a valuation formula the Herald-Examiner used for dealerships. The trial court indicated that this might be competent evidence of value in a colloquy with defense counsel on defense counsel's motion for a directed verdict. R.T. 641. From these facts it is not possible to say that the trial court directed a verdict on the basis of damages as defendants claim. The jury did have before it the Myers formula and exhibits from which a value could have been reached.