Court Opinion

ID: 9653945
Source: CourtListenerOpinion
Date Created: 2023-08-23 17:59:41.977072+00
Date Added: 2024-06-11T09:17:20.256847
License: Public Domain

ANDERSON, Circuit Judge
(dissenting). Clearly the majority opinion is correct in its holding that “there was sufficient evidence to go to the jury on the issue of a concerted action by the three old companies to fix their *542prices so as to prevent the plaintiff from acquiring any part of their trade.”
I think it equally clear that the opinion is wrong in holding the question of damages not also for the jury.
The evidence warranted the jury in finding that Levin, the chief factor in the plaintiff’s enterprise, was experienced in that line of business; that he reasonably believed that he had equipped the plaintiff’s plant with a more efficient parehmentizing machine, enabling it to produce the product more efficiently and cheaply; that the three old concerns had, since 1914, been relying mainly on their association and agreement to fix prices, and therefore had become unprogressive in equipping and operating their plants. Consequently, the evidence warranted the jury in finding that the plaintiff had reasonable expectations of successfully competing against the three old concerns by its new and more efficient plant and by better methods, both of producing and of marketing the parehmemtized paper. The evidence also showed clearly that these concerns, as early as November, 1927, combined, by a price-cutting campaign, to kill the new competitor, and in seven or eight months succeeded. In a word, we have here, indisputably, a combination to kill a competitor followed by the speedy death of that competitor.
The majority opinion holds that this death was due to. natural causes, and not to the illegal combination for price-cutting, carried on from November, 1927, through the succeeding winter and spring. This seems to me to be an utterly untenable position.
The trial court’s instructions on damages were plain and correct, and disclose pretty fully the situation as to damages, as follows:
“The second proposition, or the second question in issue, is whether the acts of the defendants resulted in injury to the plaintiff. It is necessary, in a suit of this kind, for a party to go farther than the Government would have to go if it were proceeding under the antitrust law. The Government would prevail by showing only an unlawful combination; but an individual, when he seeks to invoke the statute in question, has to add one step more — he has to satisfy the jury that the losses which the plaintiff sustained were the direet result of the unlawful acts of the defendants. I take it that the unlawful acts, if they are found to be unlawful at all, were the acts of reducing prices. Nothing else seems to have been done that could work an injury, or that could possibly work an injury to the plaintiff. So that you have to decide whether the plight in which the plaintiff company found itself at the time that it brought its suit was primarily and directly attributable to the price reduction. If you find that it was attributable to' want of capital, to lack of experience, to inefficiency, or to the adoption of an unwise policy, and especially if you find that it adopted a policy of underselling old-established companies, why,. then the defendants cannot be held responsible for that loss, because the loss cannot be attributed to the unlawful acts of the defendants.
“There is evidence here, of course, as to the situation in which the parchment paper industry was at the time when the plaintiff organized its corporation and undertook to enter into the trade. In a somewhat similar case to this, the court had occasion to charge a jury, and its charge has been held, I think, by the highest court in the land to have been proper, and I am going to paraphrase one paragraph of it, because I think that it is applicable to our situation.”
“As to the profits on sales actually made, which Mr. Whipple has pointed out to you appear to have been around $20,000, assuming that it could have sold at the prices prevailing when the plaintiff entered the trade, namely, a basic price of 16 cents a pound for a 40-lb. paper, if you are satisfied that this price would have been maintained, would not have changed by reason of any economic ■ condition, if it would have been maintained except for the unlawful acts of the defendants, if you find they did commit unlawful acts, and you satisfy yourselves from the evidence be^ fore you that the plaintiff would have sold $229,000 — would have sold the same quantity of parchment — I will not give the figures— at the price of 16 cents, as a basie price of 16 cents a pound, during that period, or during the period, and that the plaintiff was compelled by the unlawful acts of the defendants to reduce its prices — if all of those conditions are found by you to have existed, then-1 think that you may consider as an element of damage the difference between the amount that the plaintiff actually received for the goods and what it would have received if the defendants had not indulged in the unlawful conspiracy to keep the plaintiff out of the field.
“The statute says that the plaintiff may recover for injury to business or property. What have you before you which will enable you to determine to what extent the value of the plaintiff’s property has been diminished *543by the unlawful acts of the defendants? Well, we have the cost of the plant. The plant is still there. The only evidence as to its present value is that of Mr. Goldmann, who is not an expert and who was an interested witness. We have no evidence from, those who ought to know tvhat the present value of that plant is, other than that of Mr. Goldmann. Now, I am not going to say to you that the difference between Mr. Goldmann’s valuation and the cost is an accurate index of the loss or the extent to which the value of the property has been diminished, but I am going to let you gentlemen decide whether it was diminished at all, and, if so, to what extent, if you are able to do it. If you are not able, on the evidence, to determine to what extent the value of the property was diminished, then the plaintiff has not sustained its full burden, because it is up to the plaintiff to satisfy you what the extent of that diminution was. If you think that Mr. Goldmann’s testimony is to be relied upon in that respect — or I will not say that he gave any testimony that he did not himself believe in — but I mean to say, if you believe that that is to be taken as a good basis for your conclusion as to the extent of the diminution, why, the difference between the cost and the present value would be $160,000. Of these two elements, the loss of profits on the goods sold, if you find that all the conditions existed that I have enumerated, and that the plaintiff can recover, that loss would be $20,000, and whatever you may find, if anything, will fairly and reasonably represent the extent to which the value of the property is diminished. I think that it must be so that there has been a diminution; I think that it must be said that the property has diminished. It is worth less with the company out of business than it would be with the company in business. If upon the evidence you are able to say how much, that, of course, would be an element of damage. It is quite likely that the business, even though it had gone only six months or more, might have a potential value, but I have to say to you that there is no evidence here which affords a basis upon which you can determine what that potential, value is. For that reason I think that the only thing that you can consider in estimating the damages to be awarded the plaintiff in this suit is the loss in profits on the goods actually sold, and the loss sustained in the damage to its property.”
This shows that only two items of damage were claimed. The first, an item of $20,000, inaccurately but conveniently described as “profits,” was.in fact merely the difference between the price at which the plaintiff would ¡have sold and the actual price received as the result of the price-cutting campaign put into operation by the defendants in November, 1927. The court on this item instructed the jury (not quoted above) that, in order to allow this item, “they must also find that that price of sixteen cents was a reasonable price.” This presented a plain question of fact for the jury. It was for them to say, in the light of all the fully disclosed business conditions, what amount the plaintiff would have been able to sell, and whether it would have gotten this larger price, aggregating $20,000, except for the defendants’ unlawful combination for price-cutting.
These damages were no more speculative in their nature than they are in every case of land taking, copyright, trade-mark, many patent cases, unfair competition, valuation for rate-making purposes, and personal injury. How is the question of whether a rate is confiscatory to be determined except by estimating future as well as past profits? What is a negligently lost arm or a leg worth, considering the uncertainty of human life, ¡how long the victim might have used that useful member if he had not lost it by wrongful net? The ruling now made would make the assessment of damages impossible in a great majority of the cases in which only damages are a remedy for a wrong done.
But, apart from the minor item of diminished revenue (miscalled profits) in. the record, the evidence showed beyond dispute that a plant costing about $235,000 had been put out of business; that of this $235,000 approximately $90,000 had been expended in equipping the plant with this special parehmentizing machine. There is absolutely no answer to the court’s observation that there must have been damage when, as the result of the defendants’ illegal acts, the plaintiff was .compelled to close this plant down. The treasurer testified that he estimated the market value of the plant thus put out of business to be $75,000. The jury’s verdict of only $65,000 indicated that it probably disregarded the $20,000 item, and cut very substantially the loss due to the closing down of this plant. But it is matter of common knowledge that the abandonment of such a plant thus equipped would do very substantial damage; the amount of that damage was plainly for the jury.
The statements in the majority opinion that the plaintiff went out of business for lack of sufficient capital, “and that its failure was inevitable, either from laek of capital or *544. inefficient management or both,” amount to usurping the function of the jury. Indeed, the opinion on damages does not read at all like the, opinion of an appellate court, dealing only with questions of law; it deals largely with facts solely for the jury.
There is no discussion of the soundness of the trial court’s instructions on damages. By necessary implication, they are conceded to be correct. The conclusion is (to repeat) that, without the defendants’ conspiracy to put the plaintiff out of business, it would have •died anyway. The logic is, in that regard, hardly distinguishable from setting up the mortality of all human beings as a defense to an indictment for manslaughter or murder. The undeniable facts are that the defendants conspired to kill the plaintiff, and the plain.tiff died. The majority opinion is to the effect that the conspiracy was unnecessary; that the plaintiff would have died anyway. I do not assent to such reasoning or to its results.
None of the cases cited supports the rulings made on damages. The main reliance seems to be on Keogh v. C. & N. Ry., 260 U. S. 156, 43 S. Ct. 47, 49, 67 L. Ed. 183. This was an action brought by Keogh as a shipper against eight railroads and twelve individuals, claiming, in substance, that he was entitled to the benefit of competition in railroad rate-making, although, after extensive hearings, in which Keogh participated, the rates of whieh he complained were approved by the Interstate Commerce Commission. The court held that, under these circumstances, he was not entitled to rates made in competition, saying:
“The instrument by whieh Keogh was alleged to have been damaged are rates approved by the Commission. * * * All the rates fixed were reasonable and nondiscriminatory. * * * What rates are legal is determined by the Act to Regulate Commerce [49 USCA § 1 et seq.]. * * * If the conspiracy here complained of had resulted in rates whieh the Commission found to be illegal because unreasonably high’ or discriminatory, the full amount of the damages sustained, whatever their nature, would have been recoverable in such proceedings.”
It is true that the case dealt with the alleged damages as being purely speculative. But the reasons given make this ruling entirely inapplicable to the instant case, for the court said:
“Here the instrument by which the damage is alleged to have been inflicted is the legal rate, which, while in effeet, had to be collected from all shippers. Exaction of this, higher legal rate may not have injured Keogh at all; for a lower rate might not have benefited him. Every competitor was entitled to be put — and we must presume would have been put — on a parity with him. And for every article competing with excelsior and tow, like adjustment of the rate must have been made. Under these circumstances no court or jury could say that, if the rate had been lower, Keogh would have enjoyed the difference between the rates or that any other advantage would have accrued to him. The benefit might have gone to his customers, or conceivably, to the ultimate consumer.”
This amounts to saying that Keogh (and all shippers) could not have damages assessed on an «ilegal or wowlegal theory of rate-making; that the law imposed parity of rates on all shippers; and that therefore damages alleged from a nonexistent, illegal theory of rate-making were purely speculative.
But that reasoning has no application to these defendants, who were separate, independent manufacturers, not required to make uniformity of prices, and not permitted to make such prices by concerted aetion, for the purpose of destroying a competitor. The doctrine of the Keogh Case has no bearing on the instant ease.
In Straus v. Victor Talking Machine, 297 F. 791, 800, 802, and cases cited, the Court of Appeals for the Second Circuit laid down the general rule that:
“The constant tendency of the courts is to find some way in which damages can be awarded where a wrong has been done. Difficulty of ascertainment is no longer confused with right of recovery.”
The same doctrine was stated by this court in Linen Thread Co. v. Shaw, 9 F.(2d) 17, 19, as follows:
“The rule that damages, if uncertain, cannot be recovered, applies to their nature, and not to their extent. If the damage is certain, the fact that its extent is uncertain does not prevent a recovery.”
In spite of this firmly established rule, this court now holds this plaintiff, a vietim of duly established wrongdoing, to be remediless.
See Hetzel v. Baltimore & Ohio R. R., 169 U. S. 26, 38, 18 S. Ct. 255, 42 L. Ed. 648, citing with approval applicable language from Baker v. Drake, 53 N. Y. 211, 220, 13 Am. Rep. 507. See, also, Hamilton-Brown Shoe Co. v. Wolf, 240 U. S. 251, 259, et seq., 36 S. *545Ct. 269, 60 L. Ed. 629, a trade-mark case; Randall v. Peerless Motor Co., 212 Mass. 352, 379, et seq., 99 N. E. 221, and cases cited; Barrett v. Panther Rubber Co. (C. C. A.) 24 F.(2d) 329, 337; Gagnon v. Sperry & Hutchinson Co., 206 Mass. 547, 555, 92 N. E. 761; Hetherington & Sons v. Firth Co., 210 Mass. 8, 21, 95 N. E. 961.
The overwhelming weight of authority is against the holding of the majority opinion.