Court Opinion

ID: 9457614
Source: CourtListenerOpinion
Date Created: 2023-08-04 20:27:34.114064+00
Date Added: 2024-06-11T17:35:25.723939
License: Public Domain

GEWIN, Circuit Judge:
Pursuant to Rule 35 of the Federal Rules of Appellate Procedure this private antitrust action was placed en banc by the Court. The original trial resulted in a jury verdict in favor of the plaintiff, John J. Terrell, and against the defendants, Household Goods Carriers’ Bureau (hereinafter Household Goods or the Bureau) and ten individual carriers in the amount of $375,000 (trebled to $1,125,-000). The trial court entered judgment on the verdict against the Bureau but entered judgment notwithstanding the verdict in favor of the individual carriers. The majority of the panel that originally heard the case on appeal vacated the judgment against the Bureau and remanded the case for a new trial.1 Upon rehearing en banc, the majority of this court is of the opinion that the judgment entered by the trial court against the Bureau should be affirmed on the issue of liability but reversed and remanded on the issue of damages. Since the intricate and voluminous facts of this case were fully developed in the majority and dissenting opinions of the original panel, we present only a skeletal outline.
I
Plaintiff-appellee Terrell developed and attempted to market a national “mileage guide” for use in quickly computing the highway mileage between over 775 “key points” — cities, towns, and military bases in the United States and Canada. A guide of this nature is commercially marketable for such commonplace but important computations as rates to be charged by freight haulers or movers of household goods; travel allowances to be paid to government, military, or civilian personnel by their respective employers; and moving allowances to be paid military families under orders to transfer. Prior to 1961, when *155Terrell first attempted to market his guide, all or substantially all, national mileage guides in use had been computed, manufactured and marketed by Rand McNally and Company2 under an agreement with the defendant Bureau.
Household Goods Carriers’ Bureau is a trade association and tariff bureau that represents some 1700 members, carriers of household goods; it is organized under the authority of the Reed-Bullwinkle Act3 and approved by the Interstate Commerce Commission. Through power of attorney executed by each of its members it has authority to file a joint tariff with the Commission. The legality of this arrangement is not disputed. It is the agreement between the Bureau and Rand McNally that provides the foundation for Terrell’s antitrust claim. By that agreement the Bureau obligated itself to purchase from Rand McNally a minimum number of 22,500 mileage guides at a fixed price; all guides in excess of the minimum were to be sold to the Bureau or to its members at a discount. In addition, Rand McNally agreed not to sell its guides to other purchasers at a price below the Bureau’s discounted price. Many were sold at a higher price. A further agreement gave the Bureau the right to negotiate personally with certain other agencies and reserved to Rand McNally the right to deal with all others. Finally, the Bureau was accorded controlling influence in determining the scope and content of the Rand McNally guides.
Although the Rand McNally guide was the only one on the market, it was noticeably inadequate for many of the purposes for which it was used. A eombination of factors caused the guide to show longer than necessary distances between key points.4 There was evidence to the effect that members of the Bureau and other motor carriers accepted and even encouraged these overstatements because their transportation charges were computed from the guide’s mileage tables. On the other hand, many agencies that pay employees or carriers for travel on a per mile basis showed a preference for a more current guide that reflected the shortest possible reliable distances. In addition, the close relationship between the Bureau and Rand McNally gave the Bureau a degree of control over other elements of the guide, including the designation of “key points.” Agencies that made computations involving non-listed points were thus put to the time and expense of making extra computations. A noticeable omission in this regard was the failure of the Bureau guide to provide a convenient means of calculating distances between military bases.
To fill this marked competitive gap came Mr. Terrell with a guide designed to meet the needs of the Bureau’s unsatisfied customers. In computing his guide, Terrell included all major roads accessible by automobile. He planned to recompute a new guide every two years from the most recent maps available. In computing all of his distances, he used the shortest reliable figures available; and his guide included a ready means of including over 400 military bases in the computations.
Plaintiff began selling his product in 1961, and found a willing customer in the Oilfield Haulers’ Association, a 500 *156member trade association and tariff bureau whose members transported oilfield machinery. Continued solicitation yielded substantial interest and a highly favorable report from the Finance Center of the U. S. Department of Defense (Finance Center),5 despite efforts by defendants to discredit the guide. Early in 1964, plaintiff convinced Rocky Ford Van Lines (Rocky Ford), a Household Goods affiliate, to withdraw from the Bureau and affiliate with the Oilfield Haulers. By using the different and generally lower mileages reflected in the Oilfield Haulers’ guide, Rocky Ford sought to introduce competitive rates among the Household Goods haulers.
Accordingly, Rocky Ford began the transfer procedure by informing Household Goods of its desire. The Bureau responded with the “Wyche letter” — a strongly worded letter questioning the accuracy of Terrell’s guide, threatening a complaint to the ICC, and stressing the undesirable competitive effects on the industry that would flow from the adoption of a competitive guide. The contents of the letter were passed on to the Oilfield Haulers’ Association. Shortly after becoming aware of this letter, plaintiff filed this suit and a related libel suit. The libel suit, which was settled by consent decree, is the basis of a defense of res judicata raised by the Bureau on this appeal. Despite the letter, Rocky Ford consummated its changeover to the Terrell guide; and the Oilfield Haulers signed a contract for a revised guide early in 1964. Terrell and Rocky Ford then began a joint effort to convince the Defense Traffic Management Service (DTMS), the government agency which controls the shipment of household goods for military personnel,6 to accept and act on competitive bids computed from Terrell’s guide.
At this stage, Terrell’s prospects seemed excellent. He had one tariff bureau as an established customer; the Finance Center had responded favorably to his overtures; and, most importantly, he had an inroad to the influential Household Goods Carriers’ Bureau. He was cultivating an ambitious expectation that competitive necessity would require the Bureau’s members to accept a guide like his once the impact of Rocky Ford’s competition was felt. On the other hand, the Bureau, although nominally only a tariff bureau, had identifiable interests in limiting plaintiff’s access to the market. First, as representative and spokesman for its 1700 members, the Bureau was concerned that plaintiff’s shorter mileages would bring competition and reduced profits for its members.7 Secondly, the Bureau itself derived a substantial income through its arrangement with Rand McNally for distribution of the guides.8
Shortly after circulation of the Wyche letter, plaintiff’s rosy future began to blacken. The Finance Center, with some prodding from the Bureau, reversed its position and decided not to adopt plaintiff’s guide. A large scale battle for influence before the DTMS allegedly resulted in a full blown picture of lack of trust and confidence in Mr. Terrell; ultimately, DTMS, working in connection with the Bureau and the Finance Center, refused to interpret the regulation in Mr. Terrell’s favor. The Oilfield *157Haulers defaulted on their contract and began using the Bureau’s guide. Frustrated in its attempts to gain competitive advantage in its services for DTMS, Rocky Ford returned to using the Bureau guide. Mr. Terrell was eliminated from competition. The jury found the elimination unlawful and measured the injury to Mr. Terrell in the amount of $375,000.
II
A. The Wyche Letter
At trial and on the original appeal, appellants took the position that the Wyche letter was inadmissible in its entirety because it had been the subject of litigation in the previously settled libel suit and, therefore, under the doctrine of res judicata, was not a proper subject of litigation in a second suit. We cannot accept this contention. The majority of the original panel concluded that subject to the limitations mentioned in the opinion, the letter was indeed admissible in evidence in the antitrust suit.9 Moreover, it is well established that in a proper case one wrongful act may be the subject of two or more separate and distinct causes of action.10 In the instant ease, for example, the letter plainly represented the invasion of two separate and distinct primary rights, the one a personal right not to be subjected to libelous statements, and the other a business right to enter competition freely.11 Thus, we conclude that the letter and its libelous nature were properly admitted to show an intention or a scheme to restrain trade, the prior libel suit notwithstanding.
Appellants vigorously assert, however, that the court committed prejudicial error in failing to exclude the allegedly libelous portions of the letter and in failing to impress upon the jury that damages could not be awarded for any injury growing out of the libel.12 We agree in part. The original majority found reversible error because the entire letter went to the jury as evidence without adequate limiting instructions and after undue emphasis by plaintiff’s attorney on its allegedly libelous portions. In our opinion plaintiff’s attorney’s emphasis on the known falsity of the letter, while entirely proper on the issue of defendants’ intent to exclude competition unlawfully, implicitly invited the jury to award damages for the libel. Moreover, we are in agreement with the original majority in their conclusion that the trial court’s limiting instruction was not sufficient to alleviate this very real *158danger that the jury would apply an improper measure of damages.13
B. The DTMS Finance and Center Incidents
In an attempt to comply with the teaching of Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc.14 and United Mine Workers v. Pennington,15 the trial court issued a pre-trial order declaring that:
Plaintiff [Terrell] cannot recover any damages for any injury or damage which was caused or alleged to have been caused by any action of the Finance Center, DTMS, or any other agency of the United States of America. . .
The order also prohibited counsel for plaintiff from referring without the court’s prior consent to any of the dealings between plaintiff or defendants and either of the two government agencies involved. Nonetheless, a flood of evidenee tending to show attempts by both parties to influence the respective government agencies was offered with the court’s approval after defendants put into evidence a memorandum by the U. S. Army Chief of Finance.16 The memorandum made numerous accusations to the effect that plaintiff had been “extremely aggressive” and had “generally misrepresented the facts” in attempting to influence the Defense Department to accept his guide. All of this evidence was properly admissible in the court’s discretion to show the “purpose and character of the transaction under scrutiny”,17 to rebut the insinuations put into evidence by the defendants, and to prove the existence of a conspiracy between the Bureau and Rand McNally. By the terms of the lower court’s pretrial order, however, plaintiffs may not recover any damages for business lost as a result of attempts to influence government officials.18
*159From our examination of the record, we are critically aware of the absence of emphasis throughout the trial on the important distinction that we have articulated above. Although both sides took pains to argue thoroughly the facts of the alleged attempts to influence, the court and attorneys made only fleeting reference to the limitation imposed by the court’s pre-trial order. There was no limiting instruction given upon introduction of the evidence and only a brief paragraph in the court’s instruction to the jury cautioning that:
Plaintiff cannot recover and you will not allow any damages in this case for any injury or damages which was caused, or is alleged to have been caused, by any action of the Finance Center, Defense Transportation Management Service, or any other agency of the United States of America.
In light of the voluminous testimony heard by the jury, we do not think that the above quoted instructions were sufficient to overcome the substantial likelihood that the jury would, and in fact did, award damages for the loss of the government business.
C. Proof of Damages
To prove his damages, plaintiff sought to show by expert testimony the profits lost on account of defendants’ unlawful conduct between 1962 and the year of the trial — 1968. In doing so the expert assumed that plaintiff would have sold 22,500 copies of his guide every two years at $15.00 per copy; he arrived at a projected gross income of $1,350,000 for the years 1962-1968 inclusive. From this figure he deducted his projected biannual expenses to reflect an anticipated profit of $880,000. The procedure followed is acceptable provided each element of the projection is supported by proven facts. Although. generally lenient in allowing damages in antitrust matters,19 courts must not permit a damage verdict to be based on speculation.20
In this case, plaintiff relies on Cherokee Laboratories, Inc. v. Rotary Drilling Services, Inc.,21 as justification for adopting as its projected sales volume per edition the minimum number of guides to be purchased by the Bureau as specified in the most recent agreement between Rand McNally and the Bureau. We conclude, as did the original majority, that Cherokee is inapposite here. In that case, the plaintiff’s participation in the market prior to defendant’s illegal activities was a special circumstance justifying an inference that “but for” the defendant’s illegal activities, plaintiffs would have been in the same position in the market as defendants. In this case, there was proven no special set of circumstances to make valid a similar “but for” proposition. To assume that plain*160tiff could fully penetrate the Bureau’s market is pure speculation and requires the further and totally unsubstantiated assumption that the Bureau would not take competitive steps by revising its own guide or sponsoring a general reduction of rates by its members.
In light of the considerations discussed in this portion of our opinion (Part II) and after an independent examination of the evidence of injury offered by plaintiff, we are of the firm conviction that the record does not reflect evidence properly submitted to the jury that is sufficient to support the sizeable verdict here involved.
Proof essential to recovery of damages in antitrust litigation has been the subject of many Clayton Act claims. . . . The rule thereby established may be summed up thus: The fact of damages, as well as the amount thereof, is entirely a question of sufficiency of evidence. In every case, the question is whether the data of which the evidence consists is such that a just and reasonable inference and estimate thereof can reasonably be drawn from the evidence so that a verdict will not be based on mere speculation or guesswork.22
Although we may not ordinarily substitute our judgment for that of the jury, we are required to exercise that judgment in determining whether it is likely that the jury was actually swayed by considerations not properly before it. In fairness to both parties we do not think that the jury could reasonably have arrived at a verdict of $375,000 unless it was influenced by one or more of the above discussed improper considerations. A retrial of the damages issue is therefore necessary. We reverse the judgment of the district court insofar as it affirms the jury’s award of damages and remand only on the issue of damages.
Ill
We do not deem it necessary to require a retrial on the issue of defendant’s liability. On this question we agree with the original dissent that there is ample evidence to support a finding by the jury that the Sherman Act has been violated.
Terrell showed the existence of the monopoly, the vigorous efforts of Household and Rand McNally to preserve that monopoly, that Terrell’s directory, so often on the verge of success, was destroyed by his competitors and the monopoly remains intact to the disadvantage of the shipping public.23
The evidence of the record convinces us that the Bureau could be found guilty either of conspiracy in restraint of trade in violation of § 1, of the Sherman Act24 or of monopolization in violation of § 2.25
The Federal Rules of Civil Procedure are liberal in favoring the admissibility of evidence if there is any theory justifying its admission, and the trial judge is given broad discretion in making this determination.26 The jury *161heard no evidence that it was not entitled to hear on this issue. Res judicata does not make the Wyche letter inadmissible in this antitrust action. Evidence relating to the transactions with the government are admissible under Pennington to show the “purpose and character” of the Bureau’s dealings in non-governmental transactions.27 The district court’s judgment on the issue of liability is affirmed.
Affirmed in part; reversed in part, and remanded for further proceedings not inconsistent with this opinion.

. Household Goods Carriers’ Bureau v. Terrell, 417 F.2d 47 (5th Cir. 1969). The judgment n. o. v. in favor of the individual carriers is not before us. It was unanimously affirmed by the original panel and is not contested by either party on rehearing en banc.

. Plaintiffs named Rand McXally as a co-conspirator but did not join tliem as defendants.

. 49 U.S.C.A. § 5b.

. Rand McXally issued a revised guide only every six or seven years; consequently, it failed to reflect tlie large number of changes in routings and openings of new highways that occurred in the intervening years. The vast majority of these improvements in the highway systems resulted in shortened distances between key points. In addition, distances in the Rand McXally guide were computed only along highways suitable for heavy truck traffic, so a large number of the computations arbitrarily excluded shorter travel routes accessible to automobiles and lighter trucks. As a result of these and other less significant factors, there were said to be some 27,000 inaccuracies in the Rand McXally guide, most of which tended to overstate the distance between points.

. Tliis agency had the authority to adopt Mr. Terrell’s guide for use in calculating government per diem travel and transportation allowances.

. Because all rates quoted from the Rand McNally guide were uniform, DTMS used a system of “equitable allocation” whereby qualified carriers were awarded government, business on a rotating basis. Rocky Ford sought reinstatement of a system of competitive bidding, based on a government regulation specifying that:
Only the carriers who provide high-quality service at the lowest overall cost to the Government will be used.
Defense Supply Agency Regulation 4500.1 (Plaintiff’s Exhibit 19).

. The record shows that in 1960, 95% of the members of the Bureau charged uniform rates.

. The Bureau considered receipts from the mileage guide to be important in supplementing its dues. Gi'oss receipts from the guide in 1960 were $87,000. Net revenue was about $50,000.

. “Thus, while the letter was admissible evidence in the antitrust suit, there was present the inherent danger that the antitrust suit would include what, in substance, was a re-trial of the libel case.” 417 F.2d at 51 (majority opinion).

. Bankers Trust Co. v. Pacific Employers Ins. Co., 282 F.2d 106 (9th Cir. 1960); Atherton v. Anderson, 86 F.2d 518 (6th Cir. 1936); United States v. Pan American Petroleum Co., 55 F.2d 753 (9th Cir.), cert. den. 287 U.S. 612, 53 S.Ct. 14, 77 L.Ed. 532 (1932).

. Appellants rely on Nalle v. Oyster, 230 U.S. 165, 33 S.Ct. 1043, 57 L.Ed. 1439 (1913); Norman Tobacco & Candy Co. v. Gillette Safety Razor Co., 295 F.2d 362 (5th Cir. 1961); Engelhardt’s Camera Store v. Bell & Howell Co., 327 F.2d 30, 33-34 (8th Cir. 1954); Williamson v. Columbia Gas & Electric Corp., 186 F.2d 464, 465-468 (3d Cir.), cert. den. 341 U.S. 921, 71 S.Ct. 743, 95 L.Ed. 1355 (1950) ; F. L. Mendez & Co. v. General Motors Corp., 161 F.2d 695 (7th Cir.), cert. den. 332 U.S. 810, 68 S.Ct. 111, 92 L.Ed. 387 (1947). These cases held that res judicata barred plaintiffs from bringing a second suit based on the same “cause of action” as an earlier suit. In each of those cases plaintiffs were complaining of an invasion of the same right in both suits. Our conclusion in this case that the libel suit and the antitrust suit involve an invasion of two separate and distinct primary rights makes the cited cases inapplicable because a separate cause of action is involved in this suit.

. Plaintiffs argue for the first time on rehearing that defendants did not properly preserve an objection to admission of the allegedly libelous portions of the Wyche letter. Although we disagree, discussion is not necessary, in light of our holding that the letter was admissible in its entirety.

. “In the instant case, the danger became reality; the ‘false’ portions of the Wyche letter were directly and vigorously asserted as a ground for relief in the antitrust suit to such a degree that it cannot be said that the rights created by the dismissal of the libel case were not materially prejudiced.” 417 F.2d at 51.
Thus, we agree with the original panel majority that the case has been mishandled and disagree only as to the scope of the prejudice growing out of the mishandling.

. 365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961).

. 381 U.S. 657, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965). Noerr holds that joint “solicitation of governmental action with respect to the passage and enforcement of laws” cannot be violative of the Sherman Act unless the solicitation “is a mere sham to cover what is actually nothing more than an attempt to interfere directly with the business relationships of a competitor. . . . ” 365 U.S. at 144, 81 S.Ct. at 533. Pennington adds that “Noerr shields from the Sherman Act a concerted effort to influence public officials regardless of intent or purpose.” 381 U.S. at 670, 85 S.Ct. at 1593.

. Earlier, on the second day of trial, the court allowed plaintiff to place in evidence a government report recommending his guide. (Record at 372-374. See 417 F.2d at 52.)

. United Mine Workers v. Pennington, 381 U.S. 657, 670-671 n. 3, 85 S.Ct. 1585, 14 L.Ed.2d 626; Household Goods Carriers’ Bureau v. Terrell, 417 F.2d 47, 61 (5th Cir. 1969) (dissenting opinion).

. In this appeal Terrell has properly argued in support of the judgment below that the court was correct in admitting evidence of the DTMS and Finance Center incidents as circumstantial proof of the purpose and character of the actions of the Bureau and Rand McNally. See Dandridge v. Williams, 397 U.S. 471, 475, 90 S.Ct. 1153, 25 L.Ed.2d 491, 496 n.6 (1970). However Terrell also contends that the trial court erred in refusing to permit recovery, of damages for these incidents. Such an argument is not in support of the judgment, but is an effort to expand the basis of the judgment to include an element of damage specifically eliminated by the court below. Terrell failed to make or preserve any objection to the court’s pre-trial order or the jury , instructions which eliminated this element of damage from the lawsuit. His acquiescence at trial coupled with his failure to take a cross appeal on the point preclude his present attack on the court’s judgment.
*159But in any case, considering the totality of the facts and circumstances disclosed by the record, Terrell has not brought himself within the ambit of the recent cases interpreting the Noerr-Pennington doctrine which appear to indicate that joint efforts by parties who, for anti-competitive purposes, seek to undermine, subvert, or circumvent the efficacy of established governmental policies are not necessarily immunized from prosecution under the Sherman Act. See, e. g., Woods Exploration & Producing Co. v. Aluminum Company of America, 438 F.2d 1286 (5th Cir. 1971) ; Trucking Unlimited v. California Motor Transport, 432 F.2d 755 (9th Cir. 1970); Whitten v. Paddock Pool Builders, Inc., 424 F.2d 25 (1st Cir. 1970); cf. Continental Ore Co. v. Union Carbide and Carbon Co., 370 U.S. 690, 82 S.Ct. 1404, 8 L.Ed.2d 777 (1962). But cf. Gaslight Co. of Columbus v. Georgia Power Co., 440 F.2d 1135 (5th Cir. 1971). See generally Costilo, Antitrust’s Newest Quagmire: the NoerrPennington Defense, 66 Mieh.L.Rev. 333 (1967) ; Note, Application of the Sherman Act to Attempts to Influence Governmental Action, 81 Harv.L.Rev. 847 (1968) .

. Bigelow v. RKO Pictures, 327 U.S. 251, 264, 66 S.Ct. 574, 90 L.Ed. 652 (1946); North Texas Producers Assn. v. Young, 308 F.2d 235 (5th Cir. 1962).

. Id.; Harrison v. Prather, 435 F.2d 1168 (5th Cir. 1970) [December 16, 1970]; Volasco Products Co. v. Lloyd A. Fry Roofing Co., 308 F.2d 383 (6th Cir. 1962); Siegfried v. Kansas City Star Co., 298 F.2d 1 (8th Cir. 1968).

. 383 F.2d 97 (5th Cir. 1967).

. National Wrestling Alliance v. Myers, 325 F.2d 768, 777 (8th Cir. 1963).

. 417 F.2d at 55 (dissenting opinion).

. See, e. g., United States v. McKesson & Robbins, Inc., 351 U.S. 305, 76 S.Ct. 937, 100 L.Ed. 1209 (1956); Timken Roller Bearing Co. v. United States, 341 U.S. 593, 71 S.Ct. 971, 95 L.Ed. 1199 (1951); United States v. Griffith, 334 U.S. 100, 68 S.Ct. 941, 92 L.Ed. 1236 (1948) ; Fashion Originators Guild of America v. FTC, 312 U.S. 457, 61 S.Ct. 703, 85 L.Ed. 949 (1941) ; United States v. Standard Oil Co., 221 U.S. 1, 31 S.Ct. 502, 55 L.Ed. 619 (1909).

. See, e. g., United States v. Griffith, 334 U.S. 100, 107, 68 S.Ct. 941, 92 L.Ed. 1236 (1948); International Salt Co. v. United States, 332 U.S. 392, 68 S.Ct. 12, 92 L.Ed. 20 (1947); United States v. Aluminum Company of America, 148 F.2d 416 (2d Cir. 1945).

. Fed.R.Civ.P. 43(a). The rule has been interpreted liberally in light of the modern trend to allow the admission of any reliable evidence which tends to throw light on the circumstances surrounding the controversy. 2B Barron & Holtzoff, Federal Practice & Procedure § 962 (Wright Ed. 1961) ; see also Harrison v. Prather, 435 F.2d 1168, at 1174 (5th *161Cir. 1970) [Dec. 16, 1970]; Butler v. Southern Pacific Co., 431 F.2d 77 (5th Cir. 1970) [August 24, 1970] ; Dallas County v. Commercial Union Assurance Co., 286 F.2d 388 (5th Cir. 1961) ; Monarch Ins. Co. v. Spach, 281 F.2d 401 (5th Cir. 1960).

. Other technical points raised by the appellants do not rise to the level of harmful error, and we reject them without further discussion.