Document: 394 U.S. 131 89 S.Ct. 927 22 L.Ed.2d 148 CITIZEN PUBLISHING COMPANY et al., Appellants,v.UNITED STATES. No. 243. Argued Jan. 15, 1969. Decided March 10, [Syllabus from 132 intentionally omitted] Richard J. MacLaury, San Francisco, Cal., for appellants. Daniel M. Friedman, Washington, D.C., appellee. Mr. Justice DOUGLAS delivered the opinion of Court. 1 Tucson, Arizona, has only two daily newspapers general circulation, Star and Citizen. The Citizen is oldest, having been founded before 1900, an evening paper published six times a week. Star, slightly younger than Citizen, Sunday as well issue. Prior to 1940 papers vigorously competed with each other. While their circulation was about equal, sold 50% more advertising space operated at profit, while sustained losses. Indeed Star's annual profits averaged $25,825, Citizen's losses $23,550. 2 In 1936 stock purchased by one Small Johnson $100,000 they invested additional $25,000 working capital. They sought interest others invest in but were not successful. increased his investment moved Chicago prepared finance least awhile own resources. It does appear that sell Citizen; nor go out business. owners did, however, negotiate joint operating agreement between which run 25 years 1940, term extended 1953 until 1990. By its terms may be canceled mutual consent parties. 3 provided should retain news editorial department, corporate identity. formation Tucson Newspapers, Inc. (TNI), owned equal shares manage all departments business except units. production distribution equipment transferred TNI. latter had five directors—two named fifth chosen three Star. 4 purpose end any or commercial competition types controls imposed. First price fixing. distributed department TNI; placed subscription rates set jointly. Second profit pooling. All realized pooled TNI pursuant agreed ratio. Third market control. neither stockholders, officers, executives would engage other Pima County—the metropolitan area Tucson—in conflict agreement. Thus competing publishing operations foreclosed. 5 rivalry ceased. Combined taxes rose $27,531 $1,727,217 1964. 6 Government's complaint charged unreasonable restraint trade commerce violation § Sherman Act, 26 Stat. 209, amended, 15 U.S.C. 1, monopoly 2, 2. District Court, after finding contained provisions unlawful per se under granted motion summary judgment. 7 case went trial on charge also brought Clayton 38 731, 18.1 arose acquisition shareholders option Arden Publishing Company formed vehicle it now publishes 8 At Court found effect monopolized newspaper Act. 9 As respects Act Prima County, appropriate geographic market, continuing permanent form substantial lessening condemned 7. 10 decree prevent forms operation. requires, appellants submit plan divestiture re-establishment independent competitor modification so eliminate price-fixing, control, profit-pooling provisions. 280 F.Supp. 978. here way appeal. Expediting 32 823, 29. 11 We affirm violations are plain beyond peradventure. Price-fixing illegal se. United States v. Masonite Corp., 316 265, 276, 62 1070, 1077, 86 L.Ed. 1461. Pooling inflexible ratio reduces incentives compete revenues runs afould Northern Securities Co. States, 193 197, 328, 24 436, 453, 48 679. County division fields banned Timken Roller Bearing 341 593, 71 971, 95 1199. exposed restraints clearly unambiguously justify rather rare use judgment antitrust field. See Pac. R. 356 78 514, 518, 545. 12 real defense 'failing company' defense—a judicially created doctrine.2 facts tendered excluded admitted So whether correct excluding evidence charge, us; consideration makes requirements failing company doctrine met. That International Shoe FTC, 291, 50 89, 74 431, where issue.3 showed resources depleted prospect rehabilitation remote 'it faced grave probability failure.' U.S., 302, 93. There was, moreover, 'no prospective purchaser.' Ibid. setting held another did substantially lessen within meaning 302 303, 92—93. 13 present found: 14 'At time entered into agreement, became effective, then verge going business, there serious terminate liquidate assets unless agreement.' F.Supp., 980. sustains finding. no indication contemplating liquidation. never last straw grasped. continued significant threat How otherwise explain willingness enter share Citizen? Would true if claimed brink collapse? 16 plainly cannot applied merger unles established acquires brings dominion available purchaser. For person group could interested, unit competitive system preserved lost power. even we assume, arguendo, long keep enterprise afloat, effort made properties franchise put hands broker; record silent what any, might have been. Cf. Diebold, Inc., 369 654, 655, 82 993, 994, 176. 17 Moreover, know broad experience community since 1930, year when decided, companies reorganized through receivership, Chapter X XI Bankruptcy often emerged strong companies. prospects reorganization dim nonexistent make applicable this case. 18 burden proving conditions doctrine4 satisfied those who seek refuge it. 19 confine narrow scope. 20 imposed these private arrangements support Amendment Associated Press 326 20, 65 1416, 1424, 2013, teaches. 21 Neither gathering dissemination being regulated decree. deals certain practices. comport laws Amendment. stated case: 'It strange indeed * concern freedom press prompted adoption read command government without power protect freedom. Amendment, far providing argument against application provides powerful reasons contrary. rests assumption widest possible information diverse antagonistic sources essential welfare public, free condition society. Surely itself shall impede flow ideas afford nongovernmental combinations impose upon co stitutionally guaranteed Freedom publish means some. Constitution, combine not. governmental interference sanction repression interests. affords slightest contention combination restrain views constitutional immunity.' 1424. 23 points mentioned too trivial discussion. Divestiture seems us quite proper. showing abuse discretion authorizes recast Crescent Amusement Co., 323 173, 185, 254, 260, 160. Affirmed. FORTAS took part decision HARLAN, concurring result. 27 When embarked venture believe combining time. Rather, contract relationship 1965 both parties separate ways. permit expire continue quarter century original termination date. 28 Nevertheless, Department my Brethren decided crucial question transaction justified grounds. Yet regardless one's view transaction, fact remains renewed full restored begun branch lawsuit. appear, then, decisive issue validity propriety taken 29 Court's approach, argue newspapers' indefinitely, required decide basis situation prevailing transaction. words, different arguable choice treat same total merger. However be, I do understand why parties' advantages flexibility our purposes. If businessmen believe, considering relevant factors, future events deprive existing utility, reason similar way. 30 court analyze suggested, sufficient factual findings evaluation legality extending venture's term. 1953, profit. decade preceding succeeding year. Given pattern increasing profitability, hold reasonably extend impossible predict 1965. 31 Nor can appropriately invoke centu y's operation financial actually existed judge upward spiral year, reaching 1964, 'in sound condition.' 978, 983. number households almost quadrupled, see Exhibit 55, App. 452, proportionately. 49, 448—450. 'impossible predict' how profitability conscientious operate independently properly contend necessity. Consequently, although join case, find unnecessary define circumstances declining act assure independence medium entering challenged here. 33 STEWART, dissenting. 34 decisions clear sale outsider.1 Today's first lays down blanket rule forfeited show affirmative efforts noncompetitor. precise quantum quality proof reasonable effective prophylactic standard ensure truly sold. But unsuccessful not, logical, evidentiary matter, conclusive marketable. many cases equally such surely fruitless. new rule, conduct unrebuttable presumption respect past events. Therefore, enforcement limited who—unlike appellants—were notice obligation able prove tangible efforts, however futile, outside buyer. 35 said adduce convincing woefully outsider considered purchasing On contrary, introduced dire Citizen2 industry generally,3 specific testimony experts climate possibly outsider.4 face offer proof, fact, salable. affirms because appellants' failure particular way—a requirement today. 36 Judge resolve central He Indeed, refused consider connection issues With count, he altogether erroneous ground wholly unavailable participants kind involved And counts, explicitly relevance bona fides owner's belief monopolizing market. rulings absence pertinent findings, day critical 37 'at supports conclusion company, thought company. Every material effectthat dying.5 subsidiary consistent immediate demise Small, admission, 'prepared some little thereafter him earnings Publishing.' Id., 39 above, mistakenly like that, available—as merger, example—that prevailed: 40 'Mr. MACLAURY: Well, Your Honor think dissolved Citi en simply merged them apply? 41 'The COURT: acquired gave probably would. say Government wouldn't much chance attacking acquisition.' (Emphasis supplied.) 42 Because yet determined, vacate remand dispositive fully canvassed. Section part: '* (N)o corporation engaged acquire, directly indirectly, whole capital commerce, line section country, competition, tend create monopoly.' Bok, Merging Law Economics, Harv.L.Rev. 226, 339 (1960); Hale & Hale, Failing Firms Merger Provisions Antitrust Laws, 52 Ky.L.J. 597, 607 (1964); Connor, Act: 'Failing Company' Myth, 49 Geo.L.J. 84, 96 (1960). mergers Maryland Virginia Milk Producers Assn., 167 799, aff'd, 362 458, 80 847, 880, Union Leader Corp. Newspapers New England, 284 F.2d 582. allowed 176; El Paso Gas 376 651, 84 1044, 12; Von's Grocery 384 270, 1478, 555; Philadelphia National Bank, 374 321, 372, n. 46, 83 1715, 1746, 915; 390 171, 88 882, 1015. noted provided: '(N)o acquire whose making *.' 'such necessitate liquidation,' 'the entirely eliminated,' conclude lessened acquisition. 294, 90. 1950, amended measure anticompetitive acquisitions extent commerce,' 'between' occasion, determine changes, amendment doctrine. Bills 90th Congress (S. 1312 Senator Hayden H.R. 19123 Edmondson) 91st (H.R. 279 Matsunaga 5199 Johnson) exempt agreements economic distress. Extensive hearings 1967 1968. Hearings S. Subcommittee Monopoly Senate Committee Judiciary, Cong., 1st Sess., pts. 1—6; Related House 2d ser. 25. reflect shades opinion. Subcommittee: embody concepts principles bedrock institutions. Piecemeal exemptions cope problems industries given reluctantly overriding need.' Hearings, supra, 25, p. Roberts, Problems Newspaper Industry, 319, 344—352 (1968); Flynn, A Comment 1312, Vand.L.Rev. 103 (1968). date action bills. 431; 190—192, 895, worked publisher salary. December 31, 1939, owed approximately $79,000 stockholders advances capital; current liabilities over $47,000, opposed $16,525 accounts receivable, $420 bank deposits, $66 cash hand. Its exceeded assets, exclusive goodwill, $53,400. period 1937 1943 constituted most dis al era 20th history; half net decrease 1909 occurred during seven years.' Ray, Economic Forces Factors Daily Concentration, Journalism Quarterly (1952). brokers publishers testified intimately familiar aware situations opinions somehow joined E.g.: MANNO: salable describe distress basis. intended to, expectation profit? No, sir, potential salability based possibility purchaser buy resell profit.' contrary Government. See, e.g., following findings: '12. From 1932 loss. defrayed contributions stockholders. '15. prior unable pay dividend. Sr., received salary March, debts $109,000. Of indebtedness,

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