Opinion ID: 379262
Heading Depth: 1
Heading Rank: 8

Heading: Causation of Fact of Injury and Damages

Text: 122 In a private antitrust suit, the plaintiffs must show the violation and additionally must show to a reasonable certainty that there has been injury to them by reason of the violation. Admiral Theatre Corp. v. Douglas Theatre Co., supra 585 F.2d at 893. Additionally, the damages accruing from the injury must be capable of reasonable ascertainment and must not be speculative or conjectural. Id. Yet, even with this caution in regard to ascertainment of damages the jury may not render a verdict based on speculation or guesswork, Bigelow v. RKO Radio Pictures, Inc., 327 U.S. 251, 264, 66 S.Ct. 574, 579-580, 90 L.Ed. 652 (1946) the Supreme Court has also stated 123 in the absence of more precise proof, the jury could conclude as a matter of just and reasonable inference from the proof of defendants' wrongful acts and their tendency to injury plaintiffs' business, and from the evidence of the decline in prices, profits and values, not shown to be attributable to other causes, that defendants' wrongful acts had caused damage to the plaintiffs. 124    (T)he 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. 125 Id., quoting Story Parchment Co. v. Paterson Parchment Paper Co., 282 U.S. 555, 564, 51 S.Ct. 248, 251, 75 L.Ed. 544 (1931). See Continental Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690, 82 S.Ct. 1404, 8 L.Ed.2d 777 (1962). 126 More recently, the Supreme Court has stated in regard to the causal injury requirement: 127 (The plaintiffs) burden of proving the fact of damage under § 4 of the Clayton Act is satisfied by its proof of some damage flowing from the unlawful conspiracy; inquiry beyond this minimum point goes only to the amount and not the fact of damage. It is enough that the illegality is shown to be a material cause of the injury; a plaintiff need not exhaust all possible alternative sources of injury in fulfilling his burden of proving compensable injury under § 4. 128 Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 114 n.9, 89 S.Ct. 1562, 1571, 23 L.Ed.2d 129 (1969). 19 129 A. Sherman Act § 1, Fact of Injury and Causation 130 We first examine the fact of injury and causation requirements with reference to the Sherman § 1 claim. This division between the section 1 claim and the section 2 claim is analytically necessary because the effect under section 1 (of the violation) is relevant in determining the reasonableness of the restraint of trade. 131 The Special Master found, with respect to the Sherman § 1 claim, 132 43. Travel Center, another locally based travel agency, after September 16, experienced a sharp drop in the quantity and rate of bookings and requests for promotional literature on the Hawaii TGCs it had been advertising. As a result of the effects of the Western ad, Travel Center had to promote group travel through companies and organizations as it had done before TGCs came into existence in order to fill the flights it had booked, in effect, converting its TGC flights to split-charter flights. 133 44. Customer sign-ups and inquiries on Mainline's Hawaii TGCs, first advertised on August 12, 1973, declined after the publication of the ad. 134 45. Customer sign-ups and inquiries on the ITA/MSAA-sponsored TGCs, first advertised on September 2, 1973, increased after publication of the ad. (The Special Master noted in his memorandum that although MSAA's TGC requests increased slightly, this may be attributable to a normal delay in response to ITA's advertisements of its TGC program.) 135 56. Requests from travel agents for blocks of seats on Mainline's Hawaii TGCs decreased significantly immediately following the mailing of the Dear Partner in Travel letter and the publication of the ad. 136 There is sufficient evidence in the record to support all these findings. 137 Additionally, the Special Master found that Western's anti-TGC campaign was the cause of the decrease in public interest in TGCs. This is supported by testimony that immediately after the September 16 ad appeared, there was generally a drop in inquiries, bookings, requests, etc., concerning TGCs. Similar testimony was given concerning requests from travel agents after the letter, including a copy of the ad, was mailed. Also, there was testimony that there were questions by the general public concerning the appearance of the ad and asking questions about the ad. 138 This general showing of a decrease in favorable inquiries concerning the TGCs, combined with the showing of the degree of success of TGCs in the past is sufficient to demonstrate a significant fact of injury causally related to the anti-TGC campaign. Further, the negative effects of the anti-TGC campaign support our earlier finding of a section 1 unreasonable restraint of trade. In addition, of course, these effects establish causation of injury sufficient to satisfy a section 1 private cause of action claim. 139 B. Sherman Act § 2, Fact of Injury and Causation 140 As to the Sherman Act § 2 claim, the above discussion concerning the decrease in TGC requests is applicable, as the section 1 claim is enveloped within the section 2 claim. MSAA's cancellation as wholesaler for ITA's TGCs clearly, by itself, created injury. The Special Master found: 141 68. MSAA and ITA committed themselves to plans to operate four TGCs to Hawaii in 1974. The four MSAA/ITA TGCs to Hawaii had been advertised at the time Western published its ad in the Twin Cities papers. ITA could not market these TGCs without the assistance of MSAA. 142 75. ITA and MSAA had also firmly committed themselves to running four TGCs to Mexico in the first quarter of 1974, and, in fact, they had begun advertising them prior to the time Western published its anti-TGC ad in the Twin Cities. Because of Western's conduct, MSAA cancelled these TGCs. ITA could not market these TGCs without MSAA's assistance. 143 82. At the time Western published its anti-TGC ad in the Twin Cities, MSAA planned to run 13 TGCs to London in 1974 with ITA. These 13 TGCs constituted a program distinct and independent from the TGCs to Europe that ITA planned to run and actually did run on its own in 1974. 144 83. Because of Western's conduct, MSAA cancelled these TGCs. Absent Western's conduct, all 13 TGCs to London would probably have operated successfully. ITA suffered a loss of profits and its damages are not difficult to ascertain. 145 The section 2 causation issue was implicitly discussed in Part VI, supra ; the willful maintenance of the monopoly (the threat at the meeting) and the unreasonable restraint of trade (the effects of the anti-TGC campaign) caused the cancellation of the TGCs by MSAA. C. Damages 146 As to the issue of damages, Western does not dispute the method for calculating damages nor does Western dispute the amount. The disputed issue is whether or not, but for these activities, the TGCs would have succeeded. In other words, by deciding that but for the antitrust violations the TGCs would have succeeded, did this result in a just and reasonable estimate of the damages. 147 Western particularly argues that the London flights were not firmed up and thus giving damages for these flights was speculative. As the Special Master states in his Memorandum of Law, (w)hile plans for the London TGCs had not been firmed up at the time MSAA cancelled, this was not because of the parties' lack of interest but rather because of their preoccupation with Mexico and Hawaii TGCs. This preoccupation is understandable in view of the fact that the Mexico and Hawaii TGCs were scheduled for the winter of 1974, while the London TGCs were not to depart until the following summer. 148 As the Fifth Circuit stated in Heatransfer Corp. v. Volkswagenwerk, A. G., 553 F.2d 964, 986-89 n.20 (5th Cir. 1977), cert. denied, 434 U.S. 1087, 98 S.Ct. 1282, 55 L.Ed.2d 792 (1978) and as quoted by our court in TV Signal Co. v. AT& T, 617 F.2d 1302 (8th Cir. 1980): 149 (T)he Court does not believe that a going concern, which is the victim of an anti-competitive practice, must forego damages for sales it would have made as the result of the natural expansion of its business simply because it was victimized early in its existence before its attempts to expand could ripen into evidence of preparedness and intent to increase its output. Thus, the question for the Court's determination is whether, under the facts of the present case, the manufacture of units for each type of Volkswagen vehicle in the relevant market can be considered the expansion of a present business into a new market for purposes of standing, or simply one facet of growth in an ongoing business for purposes of damages. The line to be drawn between expansion into new areas and growth in established ones is not easily defined and one that must be determined from the facts of each case. 150 Id. at 1308. 151 Also, Western argues that it did nothing to interfere with the proposed London TGCs that Western did not serve London and did not care whether MSAA or anyone else sponsored TGCs to London. The record clearly shows that Western had engaged in an anti-TGC campaign and that this had an effect on TGCs over all; and that the overall effect on TGCs was one of the reasons that led MSAA to cancel its participation in the ITA TGC program. Finally, the Special Master found that the pressure applied at the September 25 meeting was in regard to all TGCs with ITA. 152 Based upon evidence of (1) past successes of TGCs; (2) increasing demand for vacation travel to Hawaii, Mexico and London; and (3) success of subsequent, albeit not necessarily the same type of charters, the Special Master concluded that the flights would have been successful. Thus, in accord with the Supreme Court's language in Bigelow v. RKO Radio Pictures, Inc., supra, 327 U.S. at 264, 66 S.Ct. at 579: 153 (T)he jury (in this case, the Special Master) could conclude as a matter of just and reasonable inference from the proof of defendants' wrongful acts and their tendency to injure plaintiffs' business, and from the evidence of the decline in prices, profits and values, not shown to be attributable to other causes, that defendants' wrongful acts had caused damage to the plaintiffs. 154 Id. (emphasis added). 155 We hold that there is sufficient evidence to support the Special Master's findings in regard to damages.