Opinion ID: 360361
Heading Depth: 2
Heading Rank: 2

Heading: Legal Injury, Proximate Cause and Damages

Text: 63 In order to establish a private cause of action under the Clayton Act, plaintiffs must show to a reasonable certainty that there has been injury to them by reason of the alleged antitrust violation. 15 U.S.C. §§ 15, 26; Merit Motors, Inc. v. Chrysler Corp., 187 U.S.App.D.C. 11, 15, 569 F.2d 666, 670 (1977); McCleneghan v. Union Stockyards, 349 F.2d 53, 56-57 (8th Cir. 1965). Plaintiffs must show this, regardless of whether the violation is thought to be unreasonable or per se illegal. 15 U.S.C. § 15. See Wolfe v. National Lead Co., 225 F.2d 427, 432-33 (9th Cir. 1955); P. Areeda, Antitrust Analysis 75 (1974); Timberlake, The Legal Injury Requirements & Proof of Damages in Treble Damage Actions Under the Antitrust Laws, 30 Geo.Wash.L.Rev. 231, 232 (1961). In addition, the damages accruing from the injury must be capable of reasonable ascertainment and must not be speculative or conjectural. Bigelow v. RKO Radio Pictures, Inc., 327 U.S. 251, 264, 66 S.Ct. 574, 90 L.Ed. 652 (1946); McCleneghan v. Union Stockyards, supra, 349 F.2d at 56-57. 64 The injuries or facts of damage plaintiffs alleged included loss of income from lack of first-run films at the Skyview and the Admiral, being forced to sell the Chief Theatre because of lack of first-run films, and being placed in a relatively inferior bidding position for first-run films. If, concerning any of these allegations of injury, plaintiffs showed legal injury, evidence sufficient to allow a reasonable basis upon which an estimate of damages could be placed, and the causal relationship between the defendants' illegal conduct and the plaintiffs' damages, then the question should have been submitted to the jury. 65 The Chief Theatre was closed in December of 1972, and that this constituted legal injury to plaintiffs cannot seriously be disputed. Plaintiffs attempted to show that the causal connection between defendants' actions and the closing of the Chief related to the matter of lack of success in getting first-run films. This alleged loss of films also constituted the alleged primary fact of injury to the Admiral and the Skyview. 66 We can initially consider as a possible part of the fact of injury each first-run film which plaintiffs did not receive. Plaintiffs still had to show, however, that they bid or attempted to negotiate to get each of those films, and that they were unjustifiably denied those films. One cannot show fact of injury, by alleging he did not receive something when he initially never tried to obtain it. Thus, the demand prerequisite is also inherently necessary in showing damages, plus the causal connection of those damages to the split activities. See Dahl, Inc. v. Roy Cooper Co., supra, 448 F.2d at 19; Royster Drive-In Theatres, Inc. v. American Broadcasting-Paramount Theatres, Inc., supra, 268 F.2d at 251; J.J. Theatres, Inc. v. Twentieth Century-Fox Film Corp., 212 F.2d 840, 845 (2d Cir. 1954). If plaintiffs never attempted to obtain the film, Ipso facto, exhibitor-defendants could not have prevented them from obtaining it, and thus could not have caused damages. We know of no principle of law which authorizes a person aggrieved by the deprivation of a right either statutory or constitutional to recover for such deprivation in the absence of a demand or request for its exercise. Milwaukee Towne Corp. v. Loew's, Inc., 190 F.2d 561, 568 (7th Cir. 1951). 14 67 Thus, plaintiffs, as the district court warned in its order of March 7, 1977, could only recover under the demand prerequisite method for motion pictures upon which they bid and were unjustifiably denied their bid. Admiral Theatre Corp. v. Douglas Theatre Co., supra, 437 F.Supp. at 1299. As discussed in Part I of this opinion, plaintiffs failed to show that distributors unjustifiably denied any of their bids. Thus plaintiffs' only alternative to showing legal injury, damages, and the causal connection necessary for relief was by use of the comparative theatre theory. This theory primarily grows out of Bigelow v. RKO Radio Pictures, Inc., Supra, 327 U.S. at 266, 66 S.Ct. at 580, where the Court found the comparative theatre method an acceptable one (in addition to other evidence) to support a just and reasonable inference that petitioners were damaged by respondents' action    . However, the comparative method established in Bigelow was used to show the difference in income between the theatres showing first-run films and the theatre allegedly denied all access to first-run films (a second-run theatre). The comparison was not, as we had here, between two alleged first-run theatres, one of which it was claimed was not getting enough quality first-run films. 68 In relying on the comparative theatre method of recovery instead of the demand prerequisite method, plaintiffs had to show that it would have been futile to make bids on all first-run films they wanted. Only by this foundational route could plaintiffs appropriately use the comparative theatre method for showing causation. For if plaintiffs could not show futility of demand, there remained no justification for not using the demand prerequisite theory. And, as discussed in Part I, the method by which plaintiffs attempted to show futility of demand, the allegedly irregular and preferential treatment afforded exhibitor-defendants is completely unsupported by the record. The plaintiffs have not given any reasonable basis from which it could be inferred that distributors did anything more than make independent business judgments deciding where they could lease their film and make the most profit. 69 The district court refused to permit plaintiffs' expert witness, Dr. John Richard Felton, to testify in regard to the comparative theatre method as to the Chief and the Skyview inasmuch as (t)he facts and circumstances relied upon by plaintiffs    simply do not 'attain the dignity of substantial evidence,' (and) could only create an unfounded 'suspicion' in the minds of the jury. Admiral Theatre Corp. v. Douglas Theatre Co., supra, 437 F.Supp. at 1296 (citations omitted). We agree with the district court and would also extend this observation to the foundation for Felton's testimony in regard to the Admiral. 70 Without Felton's testimony there was no evidence concerning the Chief or the Skyview upon which the jury could have found a causal connection or could have based an estimate of damages for these two theatres. Thus, plaintiffs failed to show the necessary elements for recovery under the demand prerequisite method or the comparative theatre method for either of these theatres, and the trial court upon this basis, properly directed a verdict as to the Chief and the Skyview. 71 Felton did offer testimony concerning causation and damages to the Admiral. However, even if there was adequate foundation for Felton's comparative theatre testimony concerning the Admiral insofar as futility of demand (legal injury) was required, it was wholly inadequate on other grounds. Initially, Felton's qualification as an expert was questionable. Felton admitted he was not an expert on theatre quality; that the expertise he did possess evolved entirely from his participation in this case; and that he relied upon the Blanks' knowledge of theatres as a basis for determining comparability. 15 72 In addition to his questionable qualifications as an expert, the content of Felton's testimony the only testimony offered upon which the jury could find causation and damages failed to meet the threshold established by this court in Twin City Plaza, Inc. v. Central Sur. & Ins. Corp., supra, 409 F.2d at 1200: When basic foundational conditions are themselves conjecturally premised, it then behooves a court to remove the answer from one of admissible opinion to one of excludable speculation. Indeed, Felton's entire comparative theatre testimony was based upon a fictional theatre the Astro and the Dundee taken together and halved. Thus, the Admiral was compared to a conjectural theatre, the Astree. Felton was not an expert in theatre quality, and lacking the specific knowledge and information necessary, relied upon the Blanks' conclusion that this hypothetical theatre would be comparable to the Admiral. The Blanks' opinion, in turn, was apparently based primarily upon the geographical proximity of the three theatres, and the fact that the seating capacity of the Astro plus that of the Dundee divided by two is roughly equivalent to that of the Admiral. Admiral Theatre Corp. v. Douglas Theatre Co., Supra, 437 F.Supp. at 1297. 73 Additional foundational infirmities were listed at length by the district court, Id. at 1298, all of which indicate the testimony was inadmissible in the first place; at the very least, if admissible, it was inadequate to provide anything more than a speculation as to the causation of plaintiffs' alleged injury. Plaintiffs failed to show this necessary element, thus the district court correctly directed the verdict for the defendants with respect to the Admiral. 74 We discuss damages briefly with respect to the Admiral, Skyview and Chief. The issue of damages is not essential to support the directed verdict. The complete lack of proof, however, reflects the general stature of plaintiffs' case. There was no evidence in regard to damages concerning the Skyview and Chief. Thus plaintiffs failed with respect to these theatres to make a submissible case. The only evidence of damages offered in regard to the Admiral was the resulting $151,085 figure derived by the comparative theatre method. 16 The total lack of foundation concerning this method of proof, the infirmities in the expert's qualifications and the infirmities in the expert's use of the comparative theatre method did not provide the reasonable basis for damages the Supreme Court required in Bigelow : 75 (T)he jury may not render a verdict based on speculation or guesswork. But the jury may make a just and reasonable estimate of the damage based on relevant data, and render its verdict accordingly. In such circumstances juries are allowed to act upon probable and inferential, as well as direct and positive proof. 76 Bigelow v. RKO Radio Pictures, Inc., supra, 327 U.S. at 264, 66 S.Ct. at 579 (citations omitted). (T)he 'tendency of the courts is to find some way in which damages can be awarded where a wrong has been done.' Nevertheless, a plaintiff in such actions may not recover compensatory damages for loss of prospective profits based on mere speculation, surmise and conjecture. National Wrestling Alliance v. Myers, 325 F.2d 768, 777 (8th Cir. 1963) (citations omitted). 17 77 A jury could have relied on nothing but speculation, surmise and conjecture in awarding damages here. It would have been, as Judge Hanson said, but idle ceremony for this case to have been submitted to the jury. 78 Finally, we examine plaintiffs' claim of being placed in a relatively inferior bidding position in that if plaintiffs did not bid for a split film, the designated split member had no competition; in comparison plaintiffs always had competition because the split member was obligated to bid. Assuming arguendo injury and causation were adequately shown by Felton's testimony, plaintiffs failed to take this theory any further. No evidence of damages was ever offered; there was simply nothing to submit to the jury. Thus, the plaintiffs failed to prove any of their theories, and the directed verdict was proper.