Court Opinion

ID: 9447652
Source: CourtListenerOpinion
Date Created: 2023-08-03 22:40:21.462416+00
Date Added: 2024-06-11T17:31:07.888473
License: Public Domain

WASHINGTON, Circuit Judge
(dissenting) .
Poller’s suit charges a conspiracy in restraint of trade in violation of Section 1 of the Sherman Act and a monopoly, attempted monopoly, or conspiracy to monopolize trade in violation of Section 2 of that Act. The District Court, without deciding whether the Sherman Act had been violated, gave summary judgment against Poller on the ground that his admitted injuries were damnum absque injuria, since CBS had a contractual right to cancel Poller’s affiliation agreement and a legal right to choose to buy a rival station and to give that station (i. e., itself) the CBS affiliation. The majority of this court would affirm on the ground, as I understand it, that there was as a matter of law, on the record here, neither a conspiracy in restraint of trade nor a monopoly or attempted monopoly.
I disagree. In my view, Poller raises genuine issues of material fact as to whether there was a conspiracy against him in restraint of trade and a monopoly. The charges he makes may, of course, appear ultimately to be without foundation in fact. But I think he is entitled to an opportunity to attempt to establish his charges before a jury, and that it was error to give summary judgment against him. Where the propriety of a summary judgment is involved, we are required, of course, to look at the case in the light most favorable to the plaintiff. Callaway v. Hamilton National Bank, 1952, 90 U.S.App.D.C. 228, 195 F.2d 556.
*6071. Poller’s allegation of conspiracy-does not relate to the Columbia Broadcasting System (CBS) alone. It includes an unincorporated wholly-owned subsidiary, CBS-TY, two officers of CBS-TV, and other persons. It is clear that corporate officers can be members of a conspiracy with their corporation. The Supreme Court has so held. Schine Chain Theatres v. United States, 1948, 334 U.S. 110, 116, 68 S.Ct. 947, 92 L.Ed. 1245; United States v. Yellow Cab Co., 1947, 332 U.S. 218, 227, 67 S.Ct. 1560, 91 L.Ed. 2010. The same cases establish that a corporation may violate the Sherman Act by conspiring with its wholly-owned subsidiaries. See also United States v. Radio Corporation of America, 1959, 358 U.S. 334, 79 S.Ct. 457, 3 L.Ed. 2d 354; Kiefer-Stewart Co. v. Joseph E. Seagram & Sons, 1951, 340 U.S. 211, 71 S.Ct. 259, 95 L.Ed. 219. In my view, CBS could conspire with CBS-TV, a wholly-owned, but not incorporated, “division” — as separate and distinct an organization as a wholly-owned subsidiary. Since there were other alleged eo-con-spirators, it is unnecessary, however, to rely on that ground. The outside persons, included as conspirators in plaintiff’s charges, are not ruled out as possible conspirators merely because they are not presently defendants in this suit. A plaintiff is not required to sue and obtain judgment against every conspirator at his peril. Nor do I think that it is clear here, as do the majority, that these others were not conspirators. Whether or not they were is in issue, and the issue can only be resolved by proof.
2. In general, of course, a corporation may, without legal liability, deal with persons of its choice and exercise the rights given it by its contracts. But clearly one of the qualifications to the free exercise of these rights is that they may not be used in a way which amounts to a conspiracy to restrain or to monopolize trade among the states. See United States v. Parke, Davis & Co., 1960, 362 U.S. 29, 36-47, 80 S.Ct. 503, 4 L.Ed.2d 505.
Packard Motor Car Co. v. Webster Motor Car Co., 1957, 100 U.S.App.D.C. 161, 243 F.2d 418, certiorari denied, 355 U.S. 822, 78 S.Ct. 29, 2 L.Ed.2d 38, is not dispositive here. Upon loss of its franchise to sell Packard automobiles, the retail dealer involved could use its properties in a variety of ways, including the sale of other automobiles in competition with the Packard automobile. But a TV station operator can make only one use of his property, and, as will appear, without a network affiliation the property cannot be as profitably used, and the business may fail in consequence. Thus, the economic impact of CBS’ action in cancel-ling Poller’s network affiliation and buying the competing UHF station was highly damaging in a competitive sense. Furthermore, the Packard Company did not itself invade the retail market. Here-CBS, primarily a wholesaler of programs, has entered the retail field.1
3. The essence of a violation of Section 1 of the Sherman Act is an unreasonable injury to, or restraint on, competition in a particular market in interstate-commerce. Involved in this case are-competitive interactions in three primary markets. First, there is the market in-which television stations are bought and sold by station operators and entrepreneurs. Second, there is the local television broadcasting market in which viewers in particular areas accept or reject programs offered over local broadcasting-stations. Although station profits do not come directly from payments by viewers, it can be fairly said that individual station operators compete for audiences which they are in effect able to sell to-*608national and local advertisers. Third, there is competition among program producers for national advertisers. While local station owners may on occasion independently produce programs which merit the attention of advertisers seeking nationwide audiences, it is generally true that the three great television networks are the chief competitors for advertisers seeking national program audiences. Poller says — and it seems reasonably clear on this record — that television stations in Milwaukee, especially UHF stations, cannot operate profitably without a network affiliation.
Through its operating division, CBS-TV, CBS is a primary producer of nationally broadcast television programs. While CBS owns several transmitting stations, CBS programs are generally presented to the viewing public over independently owned stations from which CBS obtains the right to use choice air time by means of affiliation agreements. At one time CBS-TV used the facilities of Poller’s UHF station in Milwaukee under a network affiliation agreement. The present dispute arises because CBS-TV obtained an option to purchase the only competing UHF station in Milwaukee when it knew Poller’s station was for sale, exercised its contract right to cancel Poller’s network affiliation and then purchased Poller’s equipment by giving him cash plus the poorer equipment of the Bartell station on which the option had been obtained. At the end CBS-TV had eliminated both Poller and Bartell from UHF telecasting in Milwaukee and it remained as the only telecaster in that field.2 Competition in the entire market, comprising both UHF and VHF, was reduced.
The allegation that this was accomplished through a conspiracy has been denied and the question is in issue, subject to proof. It is further claimed by Poller that CBS was the only network willing to give relatively equal consideration to affiliation with UHF or VHF stations; that as a result, CBS had great effect on the entry or continued existence of UHF stations in the various local broadcast markets; and that by waiting for Poller and Bartell to develop the UHF market in Milwaukee and then using its economic and contractual power to establish itself in Milwaukee in their stead, CBS must have seriously discouraged new UHF operations elsewhere, for few entrepreneurs would be willing to pioneer a new field only to have the fruits of success taken from them by a network, without compensation. It is also claimed that the actions of CBS caused Poller’s franchise to be reduced in value and his equipment to become useless and unmarketable elsewhere, and that CBS paid an unreasonably low price for his equipment.
In my view, the purchase and operation of the Bartell station as the exclusive CBS outlet in Milwaukee was an illegal restraint on competition if it forced Poller to go out of business under circumstances whch discouraged or actually precluded the entry of new UHF stations into the Milwaukee TV market and other TV markets, thereby seriously retarding the development of the entire television industry.3 Likewise, I think that the elimination of Poller in the way claimed could be deemed to be an elimination of competition by unfair means, an abuse which the antitrust laws were intended to preclude. National Biscuit Co. v. Federal Trade Commission, 2 Cir., 1924, 299 F. 733, 738; United States v. Klearflax Linen Looms, Inc., D.C.D.Minn.1945, 63 F.Supp. 32. If Poller can prove these things to the satisfaction of a jury, I think he would be entitled to a verdict. He should be given that chance. On a motion for summary judgment the courts should be reluctant to deny the plaintiff *609his day in court when he alleges that he was forced out of business as a result of a conspiracy to eliminate him as a competitor. See Slick Airways, Inc. v. American Airlines, Inc., D.C.D.N.J.1951, 107 F.Supp. 199, 214, appeal dismissed, 3 Cir., 1953, 204 F.2d 230, certiorari denied, 1953, 346 U.S. 806, 74 S.Ct. 54, 98 L.Ed. 336. And this would seem particularly true where (as here) it is charged that the public has been deprived of maximum television service by a reduction of competition. See Packaged Programs, Inc. v. Westinghouse Broadcasting Co., 3 Cir., 1958, 255 F.2d 708.
My view is based in part upon United States v. Radio Corporation of America, 1959, 358 U.S. 334, 79 S.Ct. 457, 3 L.Ed. 2d 354. There the United States asserted that RCA and its wholly-owned subsidiary NBC had threatened to cancel the NBC program affiliations of certain Westinghouse-owned stations, unless Westinghouse agreed to exchange its Philadelphia TV station for one owned by NBC in Cleveland, plus cash. The exchange was made and NBC was enabled to enter a new market area. The District Court granted summary judgment for RCA on the theory that the United States was precluded from bringing an antitrust action because the Federal Communications Commission had approved the challenged transaction. D.C.E.D.Pa.1958, 158 F.Supp. 333. The Supreme Court repudiated this theory, and reinstated the complaint. Although the Supreme Court did not expressly characterize as illegal the actions of RCA, its reversal of the District Court would appear to mean that the complaint adequately stated a cause of action. If the plaintiff’s allegations are proved, the present case differs only in that CBS did not openly threaten Poller. If the actions of CBS in fact had an irresistibly coercive effect on Poller, the absence of an overt threat would not be significant, and Poller’s claim seems to be even stronger than that of Westinghouse, since here, unlike its case, the result of the CBS transaction was to reduce TV competition in the particular market area involved.
4. Similarly, Poller would be entitled to recover under Section 2 of- the Sherman Act if he can prove, as he claims, that CBS had power to exclude him and other competitors in Milwaukee, and intended to use that power. See United States v. Griffith, 1948, 334 U.S. 100, at page 107, 68 S.Ct. 941, at page 945, 92 L.Ed. 1236. “It is the exclusion of others from the opportunity of doing business that is regarded as monopolizing.” National Biscuit Co. v. Federal Trade Commission, supra at page 738 of 299 F.
The present record suggests that it may appear, if proof were offered, that once CBS had purchased Bartell’s station, it had absolute power to exclude other independent UHF operators from Milwaukee so long as the other networks did not alter their attitudes toward UHF. Certainly, there are substantial indications that CBS had monopoly power over UHF in Milwaukee at the time it can-celled Poller’s affiliation. Although CBS’ station was in competition with Milwaukee VHF stations for viewers and thus not a monopolist in the viewer market, it may well be that CBS’ economic strength gave it virtual monopoly power over the entry of new stations into Milwaukee. The possibility of new VHF entrants into Milwaukee may have been closed for practical purposes (apparently the third and last VHF channel in Milwaukee went into operation shortly after CBS entered Milwaukee). And by lowering local advertising rates or being able to do so, CBS may have been able effectively to preclude the entry into Milwaukee of new UHF independents who were simultaneously faced with the reluctance of other networks to affiliate with them. Proof of such facts would, I think, support a verdict in Poller’s favor.
In reaching my conclusions as to both Sections 1 and 2,1 have not failed to note that with respect to each of the claimed violations CBS made factual allegations which if proved might warrant a judgment in its favor, and that proof of Pol-ler’s claims will not be easy. But I think that he is entitled to go to trial.

. For similar reasons, the other “refusal to deal” eases are equally inapplicable here. See, e. g., United States v. Colgate & Co., 1919, 250 U.S. 300, 39 S.Ct. 465, 63 L.Ed. 992; Schwing Motor Co. v. Hudson Sales Corp., D.C.D.Md., 138 F.Supp. 899, affirmed 4 Cir., 1956, 239 F.2d 176, certiorari denied 1957, 355 U.S. 823, 78 S.Ct. 30, 2 L.Ed.2d 38. Colgate was of course severely limited in tie Parke, Davis & Co. case, supra, if not sent “to its demise.” See Mr. Justice Harlan dissenting, 362 U.S. at page 49, 80 S.Ct. at page 514.

. Whether or not CBS desired that result is a question of fact to be determined at a trial. In a case like the present, however, specific intent to restrain trade or monopolize may be unnecessary. See United States v. Griffith, 1948, 834 U.S. 100, 105, 68 S.Ct. 941, 92 L.Ed. 1236.

. Had CBS merely cancelled Poller’s affiliation and given an affiliation contract to another independent Milwaukee station, it may be that no competitive evils would have resulted.