Court Opinion

ID: 9449845
Source: CourtListenerOpinion
Date Created: 2023-08-04 16:25:08.643728+00
Date Added: 2024-06-11T17:32:01.089405
License: Public Domain

MADDEN, Judge
(dissenting):
I think it is a serious mistake to send this case back to the District Court for retrial. The trial here under review used up nine days of the time of a judge and jury and the staff of the court. The jury brought in a verdict for the defendant. I think it is practically impossible that another jury on a retrial would reach a different verdict.
The plaintiff, who had had some experience operating different service stations which sold Shell, Standard and Richfield gaspline, iñ May of 1955 leased from The defendant Tidewater an old sér'vice station, on condition that the defendant • would modernize_J;ha_slatipii. The defendant did modernize it, at a cost to it of $29.000. The plainiff has no criticism of the station,. The plaintiff’s' lease was dated November 15, 1955. It provided that it was subject to termination at the end of the first or any subsequent six months’ period by either party. At the time of the execution of the lease the parties entered into "a “dealer contract.” This contract was for the ppriod November 15, 1955, to November 14,. 19557 with a right~m the defendant to extend it to November 14, 1960. The contract provided however, that it should terminate if the plain tiff’a lease terminated. In the dealer contract the defend*-', dnt agreed to sell the plaintiff his requirements of gasoline, motor oils and greases manufactured bv the defendant. . so long as the contract was in force. __,
The plaintiff’s lease provided for a rent of 567.34 a. rrmatti. plus one cent for each gallon of gasoline delivered to the station. The $67.34 was, of course, insignificant 'in relation to the investment which the defendant had made in the station. If the defendant was to get a respectable return on its investment, it would have to get it out of the gallonage provision of the lease. Before the modernization of the station in the autumn of 1955, the station had been, since January 1, 1954, taking just under 10,000 gallons per month. In the first month after modernization, it took 12,500 gallons. Both Tidewater and Lessig had hoped that the gallonage, after modernization, would increase to 20,000. But it did not increase .substantially (hiring the 27 months following. up_to April. 1958‘, when the defendant terminated the lease. The defendant’s profit for the entire year 1958, before taxes, was $30.38. For the year 1957 the comparable figure was SfiiXL The per-month gallonage in the first three months of 1958 was somewhat less than the gallonage in November, 1955, the first full month after the modernization.
Tidewater was not making any money out of the station and, of course, neither was Lessig. His profits averaged 8284.38 per month, which was $80 per month less than he began to earn, working for *476the defendant’s station. another man, immediately after' he left
Postponing, for the time being, any legal problems, and looking at the economics of the operation of the station during Ihe period of the plaintiff’s tenancy, it is obvious that the situation was intolerable. The owner was making substantially nothing and the operator, although he worked long hours and had the use of the owner’s large capital investment, was making a meager living. If there was a reasonable hope that a more efficient operator might develop more business, that would be good for the owner. Was the owner at liberty to make a change? As we have seen, thg_Iqase was tpvmipahlp at the end of any six months’ period by either party, and the dealer contract terminated automatically with termination of the lease. As we have seen, Tidewater did terminate the lease in April, 1958. Under the new operator, the gallonage increased signift-cantly and regularly, to 15,000 gallons in the remaining months of 1958, almost 16,000 gallons in 1959. over 17,000 gallons in 1960 and 1961, and in several months of the latter three years it exceeded 20,000 gallons.
Turning from the economic to the legal questions, the plaintiff complains that the defendant, in its dealings with him, violated sections 1 and 2 of the Sherman Anti-Trust Act1 and section 3 of the Clayton Act,2 and thereby made itself liable to him, under section 4 of the Clayton Act,3 for the damages which the defendant caused him, multiplied by three.
So far as concerns section 1 of the Sherman Act, the plaintiff would spell out of certain remarks and remonstrances of the defendant’s agents a contract with him to fix the price at which he could resell gasoline which the defendant had sold to him. The defendant, hoping that the plaintiff would sell enough gasoline so that the defendant might make more than $30.38 or $907 profit, before taxes, in a year, on a very large capital investment, found the plaintiff charging several cents more per gallon than his adjacent competitors and, naturally, not selling much gasoline. The defendant’s agents thought this was not a wise way to do business, which it obviously was not, and told the plaintiff so. In all common sense, does the Sherman Act forbid a man, just because he is engaged in business, from speaking the obvious truth. when the unwise and obstinate conduct of which he speaks is lifting money out of his pocket? The plaintiff testified, repeatedly, that he paid no attention to the suggestions of the defendant’s agents that he reduce his prices, and that he fixed his own prices. Since he fixed his own prices, he could not have been damaged by the defendant’s suggestions that he reduce prices, even if it were possible to conjure a contract out of a rejected suggestion.
The plaintiff says that the defendant violated section 3 of the Clayton Act, and thereby became liable to him under section 4 of that act, by requiring him to buy his tires, batteries and accessories (TBA) from the defendant or from those enterprises with which the defendant had arrangements under which the defendant would make ax profit from-' their sales. There waff nothing in the iealer’s contract between the plaintiff and the defendant which provided for any such tying. There is evidence that the defendant’s salesmen of its own 'TBA solicited sales to the plaintiff. ..and tEaF the defendant’s agents introduced to the plaintiff the salesmen of other- en'tefprises with which the defendant had arrangements under which the defendant would make a profit if the TBA were sold to the operators of the defendant’s stations. As to whether there was a “condition, agreement or understanding” arising by implication out of' the conduct or conversation of the parties, restricting the plaintiff as to where he *477might purchase his TBA, again, as in the case of the pricing of the gasoline, actions sneak louder than implications. !Prom the beginning of his lease in 1955, Lessig bought from many other sellers than Tidewater or Tidewater-sponsored sellers, TBA of types which were in direcFcompetition with those sold or sponsored-by Tidewater." There is no evi^ dénce of any occasion on which the plaintiff even acted as if he felt any inhibition about buying his TBA where he pleased. There is, in the plaintiff’s argument, the fantastic suggestion that Tidewater’s refusal to pay Lessig for TBA bought from sellers with which Tidewater had no connection and sold to customers on Tidewater’s credit cards was some sort of a violation of the antitrust laws. v"
The court recognizes that most of the plaintiff’s numerous complaints about instructions are unfounded, because the plaintiff made no objection to the ones given, or the content of the ones which the plaintiff says should have been, but were not, given was adequately covered by instructions given.
The court finds however, that there was one instruction requested by the plaintiff and not given by the court as to which the plaintiff’s claim of prejudicial error has merit. In the suit the plaintiff claimed, as we know, that he suffered loss during the period of his lease and dealer contract as a result of the defendant’s alleged practice of dictating the price at which he had to resell his gasoline. The court says, “The evidence supporting Lessig’s claim of injury from Tidewater’s resale price-fixing activities prior to the termination of his lease and contract was not strong.” That is an understatement. Such evidence, it seems to me, was non-existent. But the court goes on to say, “However, the jury could readily infer that Tidewater terminated its business relationship with Lessig because he failed to adhere to the resale price fixing scheme. * * * Lessig could claim compensation for the resulting loss, including reasonably anticipated future profits, and there was evidence from which the jury could find that such a loss occurred.” Then the court goes on to hold that an instruction, requested by the plaintiff and not given, relating to future profits not realized because of the cancellation of his lease and contract, should have been given, an,d that the court’s failure to give it was prejudicial error.
In my opinion, the plaintiff’s requested instruction was correctly refused. Since it is crucial to the court’s decision, I quote it:
“A plaintiff whose lease and product agreements have been cancelled as a result of conduct in violation of the antitrust laws is entitled to be awarded as damages the loss ref profits and values resulting from the cancellations.
“If you find that Paul Lessig had! developed net income and profits at the service station at 22nd and Irving Street, San Francisco during the period May, 1955 to May 15, 1958, and there was reasonable likelihood that such net earnings and profits would have continued in the future you may award as damages the value of such future profits as of the date of cancellation.”
The first paragraph is a statement of law. The second paragraph is a peremptory statement, not conditioned upon any finding by the jury that the defendant had violated the law stated in the first paragraph, but flatly telling the jury that if it found that the plaintiff had had net earnings during the period of the lease and would have had net earnings if the-lease had not been cancelled, it should award the plaintiff those future potential net earnings. The plaintiff had, in several of his requests, sought to get the court to give peremptory instructions-such as “Tidewater has unlawfully controlled retail prices of dealers.” If the' requested instruction here under discussion had been given, the plaintiff would! have, by indirection, succeeded in getting *478what had been properly denied him in dealing with his other requests. The giving of this instruction would, I think, have been prejudicial error if the verdict had gone against the defendant.
I comment further on the requested instruction which I have quoted above. It would have given the jury no guide whatever as to how far into the future they were to project their award of damages. The plaintiff had, during the period of his lease, averaged $284.33 per month of earnings from the station. This was a meager living; it was $80 less per month than he immediately began to earn working for another man after he left the station. Was he to get $284.33 per month, multiplied by his expectancy of earning capacity as shown by reliable tables, trebled by the Clayton Act, and with or without deductions for other earnings which he might be expected to receive, and a discount for prepayment of a lifetime, or some period less than a lifetime, of earnings ? It was the plaintiff’s responsibility to state some objective less remote than the sky by which the jury should measure his damages if it concluded that his rights had been violated.
I suggest, with deference to the court, that the jury could hardly have been misled into thinking that it could not award damages, if any, resulting from the illegal cancellation of the lease, if it found that there had been an illegal cancellation. The court, in its instructions, several times stated the usual general rule as to the measure of damages in a law-suit, including the loss of profits. The court instructed the jury, “You may specifically base your award of damages -» * on the testimony of expert witnesses.” There were only two expert witnesses. The entire testimony of one of them related to the alleged losses of the plaintiff resulting from the cancellation of the lease, and the testimony of the other expert, so far as it related to damages, was with regard to Lessig’s earnings after the lease was cancelled. The plaintiff’s counsel argued emphatically to the jury that the plaintiff should be awarded damages based upon lost future earnings resulting from the cancellation of the lease. It is fair to plaintiff’s counsel to recognize that he specifically disclaimed any right to project damages “in perpetuity” and asked the jury only for future damages down to November 14, 1960. I think the trial judge was correct in not, of his own motion and as a work of supererogation, prescribing to the jury a rule for measuring future damages. He apparently assumed that, if the jury found that the plaintiff was entitled to such damages, it would measure them by a rule of common sense.
The task of a trial court in threading its way through the inti'icacies of an antitrust suit is difficult and troublesome. The generalities of the statutes, the variations in the language and the conclusions in the reported decisions add to the difficulties. When the trial court has patiently and intelligently moderated the trial, and a jury has passed upon the evidence, I think it is a mistake for an appellate court to yield to counsel’s urging to find some departure from perfection in this complex human proceeding. I think the judgment was right and I would affirm it.

. 15 U.S.C. §§ 1, 2.

. 15 U.S.C. § 14.

. 15 U.S.C. § 15.