Opinion ID: 409686
Heading Depth: 2
Heading Rank: 3

Heading: Defendants' Other Claims of Error under the Sherman Act Count

Text: 57
58 The defendants argue that even if the capacity hurdle was overcome, no conspiracy was proven. Their initial objection, that the proof was circumstantial rather than direct (Br. 36), is meritless: conspiracies are by their nature not subject to direct proof. Furthermore, Weit v. Continental Illinois National Bank & Trust Co., 641 F.2d 457, 463 (7th Cir. 1981), certiorari denied, --- U.S. ----, 102 S.Ct. 1610, 71 L.Ed.2d 847, does not state a proof requirement for all conspiracies, but a method of dealing with those in which an agreement is inferred on the basis of conscious parallelism among the co-conspirators. This is not a conscious parallelism case. 59 The defendants also argue that the evidence of Foster's and Smith's conduct up until February 19, 1973 (the date on which the letter to Yoder was mailed) was insufficient, and that evidence of their later activities-which tended to cast a more sinister light on their doings-was improperly admitted. This argument rests on a fundamental misunderstanding about the conspiracy alleged: Independence's contention was that Copperweld Chairman Smith and Regal General Manager Foster had engaged in a continuing course of anticompetitive conduct, but the only actual harm they had been able to cause was Yoder's cancellation of the tubing mill contract. 15 The other recipients of the warning letters-including Abbey-Etna, Continental Illinois National Bank, First National Bank of Chicago, C. E. Robinson, various real estate firms, and major steel suppliers (App. 84, 239)-did nothing that was productive from Copperweld's and Regal's perspective, or detrimental from Independence's. The only other instance of tangible harm to Independence-the defamatory remarks to Deere-was unrelated to the letter-writing campaign. We find that the evidence of a conspiracy (pre- and post-February 1973) was properly admitted and the jury's inferences from it are unassailable. 60 The defendants finally argue that Judge Will made inconsistent legal rulings when he found that Regal could not be held liable as a joint-tortfeasor with Copperweld for inducing Yoder's breach of contract, but did not also rule that Regal could not be Copperweld's co-conspirator. (Br. 40-42). This argument overlooks important substantive differences between tort and conspiracy liability, as Judge Will pointed out (App. 234-235). To be liable for tortious interference with contract, Regal would have had to know that the Independence-Yoder contract existed, and would have had to do a specific act to cause the breach of contract. Hannigan v. Sears, Roebuck & Co., 410 F.2d 285, 291 (7th Cir. 1969), certiorari denied, 396 U.S. 902, 90 S.Ct. 214, 24 L.Ed.2d 17. In other words, to be a joint tortfeasor, Regal had to have causal responsibility for the breach. To be liable for damages caused by the breach under the anti-trust conspiracy theory, Regal had only to have entered into an agreement to hamper Independence's entry into the market and have taken some step toward that end. Once that showing was made, Regal could be liable for any actions of Copperweld in furtherance of the conspiracy, on the theory that for the duration of the conspiracy conspirators are accountable for each other's actions. T.V. Signal Co. of Aberdeen v. American Telephone & Telegraph, 462 F.2d 1256 (8th Cir. 1972). Section 1 of the Sherman Act casts a wider net than do principles of common-law tort liability. 61
62 Defendants argue that Independence has failed to make out antitrust injury, as that term is used in Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489, 97 S.Ct. 690, 697, 50 L.Ed.2d 701 (1977) (Br. 44). 16 Brunswick defines antitrust injury as 63 injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants' acts unlawful. The injury should reflect the anticompetitive effect either of the violation or of anticompetitive acts made possible by the violation. It should, in short, be the type of loss that the claimed violations ... would be likely to cause. Zenith Radio Corp. v. Hazeltine Research, 395 U.S. (100) at 125 (89 S.Ct. 1562 at 1577, 23 L.Ed.2d 129). 64 If antitrust injury inquires into causation, the injury Independence claimed flowed directly from the defendants' conspiracy to keep it from going into business as their competitor, a clear violation of Section 1 of the Sherman Act. If antitrust injury also states a limitation on damages, as is argued in Page, Antitrust Injury and Economic Efficiency: An Approach to Antitrust Injury, 47 U.Chi.L.Rev. 467 (1980), it equally supports Independence's recovery here: 65 The traditional measures of damages for the total exclusion 17 of a competitor from the market accurately reflect antitrust injury. (If) a potential competitor is denied entry to a market because of the existing competitors' control of a necessary facility or resource 18    damages (should reflect) returns on the output that the market would have supported but for the collective impediment to new entry. Page, op. cit., supra, 485-486. 66 Defendants also argue that the district court should have required Independence to show anticompetitive harm by demonstrating that Regal's market share increased after the allegedly anticompetitive conduct. This showing, they argue, is mandated by our decision in Havoco of America, Ltd. v. Shell Oil Co., 626 F.2d 549, 558 (7th Cir. 1980) (Br. 45-50). 67 Defendants misread Havoco. Its main message is that outside the limited category of per se violations of the antitrust laws, 19 actual harm to competition must be demonstrated under the Rule of Reason analysis before an offense against the antitrust laws will be made out. That proposition was recognized by the district judge here, and he so instructed the jury (App. 162-164): 20 68 Independence must establish by a preponderance of the evidence that the delay in its entering into business resulted in a decreased supply or higher prevailing prices in the market or otherwise adversely affected competition in the relevant market (App. 164). 69 Havoco does not say that harm in the relevant market is demonstrable only by market share evidence, but rather that the relevant market must be defined with enough generality to ensure that harm to competition is not assumed where no more than harm to a person engaged in interstate commerce is shown. 626 F.2d at 558. Here the jury was instructed that the relevant market was the area in which (Independence) and the defendant Regal operate and to which purchasers can practicably turn for supplies of structural steel tubing or any substitutable products. This definition precludes any facile equation of harm to Independence and harm to competition. 70 Defendants also seem to cite Havoco for the proposition that Independence must fail under a Rule of Reason analysis unless it can demonstrate that Regal's market share increased as a result of Independence's foreclosure from the market (Br. 48-49). However true that proposition may be when an actual competitor is harmed or driven out of business, 21 it makes no sense in a foreclosure case. Here by contrast it would be an anticompetitive sign if Regal could maintain its market share so long as Independence was kept out of the steel tubing business, but lost ground to Independence once the latter began production. That was, as defendants concede (Br. 49), exactly what the evidence suggested. 22