Opinion ID: 609810
Heading Depth: 4
Heading Rank: 1

Heading: Control of Editorial Content

Text: 21 Mercury News first asserts that it was justified in cancelling the insert in order to control the editorial content of its own paper. Mercury News claims that it was concerned that an independently published magazine 1) containing second run syndicated features and canned editorial content and 2) that caused distribution and scheduling problems threatened the editorial integrity of its own newspaper. 22 The district court properly found that this proffered business justification is suspect. See Mozart Co. v. Mercedes-Benz of North America, Inc., 833 F.2d 1342, 1349-52 (9th Cir.1987) (describing skepticism which the quality control defense ... usually has been accorded), cert. denied, 488 U.S. 870, 109 S.Ct. 179, 102 L.Ed.2d 148 (1988). Mercury News never complained to HTC about the content of the insert or about distribution and scheduling problems. Mercury News's editorial control justification appears inconsistent with the fact that Mercury News carries other inserts with substantive articles over which Mercury News exercises no editorial control. This evidence of pretext is sufficient to raise a genuine issue of material fact. See Eastman Kodak, --- U.S. at ----, 112 S.Ct. at 2091 (a reasonable trier of fact could conclude that Kodak's [quality justification] is pretextual); International Business Machines Corp. v. United States, 298 U.S. 131, 139-40, 56 S.Ct. 701, 705, 80 L.Ed. 1085 (1936) (rejecting IBM's claim that it had to control the cards used in its machines to avoid injury to the reputation of the machines and the good will of IBM in the absence of proof that other companies could not make quality cards). 23 Mercury News's reliance on Drinkwine v. Federated Publications, Inc., 780 F.2d 735 (9th Cir.1985), cert. denied, 475 U.S. 1087, 106 S.Ct. 1471, 89 L.Ed.2d 727 (1986) is misplaced. In Drinkwine, a preparer and seller of local display advertising printed an insert for distribution in the Statesman, the sole daily newspaper in Boise, Idaho. In less than two years, the Statesman distributed 25 inserts for Drinkwine, but competed heavily for the business from the beginning. After Drinkwine fell behind in its payments to the Statesman, the insert was cancelled and Drinkwine sued the Statesman, alleging antitrust violations. Affirming the district court's directed verdict for the newspaper, we held that [g]iven the Statesman's desire to control quality and problems with collecting from local competitors, the business justifications appear valid. 24 Drinkwine failed to pay its bills. HTC paid its bills on time. The Statesman desired to control quality. On the record, there is at least a question regarding Mercury News's desire to control quality in the inserts that it accepts. Drinkwine is not dispositive.