Bragen v. Hudson County News Company

• Decision Date: 23 August 1963
• Docket Number: No. 14057.,14057.
• Citation: 321 F.2d 864
• Parties: Francis G. BRAGEN, Appellant, v. HUDSON COUNTY NEWS COMPANY, Inc.
• Court: U.S. Court of Appeals — Third Circuit

321 F.2d 864 (1963)

Francis G. BRAGEN, Appellant, v. HUDSON COUNTY NEWS COMPANY, Inc.

No. 14057.

United States Court of Appeals Third Circuit.

Argued March 18, 1963.

Decided August 23, 1963.

Doane Regan, Rothbard, Harris & Oxfeld, Newark, N. J., for appellant.

Julius Kass, New York City (Jacob H. Bernstein, Perth Amboy, N. J., Bandler, Kass & Goetz, Robert Sylvor, New York City, on the brief), for appellee.

Before HASTIE, GANEY and SMITH, Circuit Judges.

GANEY, Circuit Judge.

Plaintiff, a small retailer, brought this action under § 2 of the Sherman Antitrust Act, 15 U.S.C.A. § 2, claiming inter alia that by reason of defendant's monopolization of the distribution of the better known newspapers, magazines and paperback books in Hudson County, New Jersey, it has compelled him, as a condition of doing business with it, to accept publications which he did not order or wish to sell.¹ The complaint goes on to aver that following his rejection of delivered unordered publications, defendant has refused to supply him with the publications that he had ordered and as a result he has suffered losses and damages beginning with June of 1957. After plaintiff presented his case before a jury, the trial court rendered an oral opinion in which findings of fact were made to support its reasons for allowing defendant's motion to dismiss the complaint on the ground that plaintiff's evidence was insufficient to establish a violation of § 2 of the Antitrust Act. The court's opinion concluded as follows:

"I can find no basis whatsoever in the evidence before the Court from which an inference can be drawn that any act or omission or any course of conduct committed or followed by the defendant in this case with respect to the plaintiff from the commencement of their business relationship until its termination constituted a violation of Section 2 of the Sherman Act which inflicted damage upon the plaintiff for which he would be entitled to recover under 15 U.S.C. Section 15.

"This is a case which clearly appears to have been an unfortunate disagreement between the parties in a business relationship respecting the propriety of interest, party debits and credits * * *.

"The law is well settled that a business man, whether he acts as an individual or a corporation, whether he is a retailer or whether he is a distributor, has a perfect right to refuse to continue to deal with a customer as long as in so doing he does not conspire with others or enter into an arrangement whereby that customer is deprived of merchandise which would otherwise be available to the purchaser from the sources from which it emanated.

"Therefore, I must grant the motion for a dismissal with prejudice, and such will be the order."

On the basis of the opinion above, the following judgment was entered:

"The issues of the above entitled action having been regularly brought on for trial at a term of this Court and the parties having duly appeared by their respective attorneys and the allegations and proofs of the plaintiff having been heard in support of plaintiff\'s contentions, and the defendant having made a motion to dismiss the complaint at the conclusion of plaintiff\'s case and due deliberation having been had and the Court having made and filed its decision on the 17th day of January, 1962, containing findings of fact and conclusions of law thereon and directing a judgment in favor of the defendant and finding no damages in favor of the plaintiff and dismissing the complaint on the merits, it is

"ORDERED, ADJUDGED AND DECREED, that the plaintiff have no damages and that the complaint of the plaintiff be and the same hereby is dismissed on the merits, and that the defendant, Hudson County News Company, Inc. recover their costs of the plaintiff, Francis G. Bragen."

From this judgment the plaintiff appealed.

At the trial before a jury there was evidence to show the following facts: In January of 1952, plaintiff having had no previous retail business experience, rented a small empty store at 133 Monticello Avenue, Jersey City, Hudson County, New Jersey, for the purpose of selling at retail newspapers, magazines, paperback books, comic books, tobacco, soft drinks, ice cream, candy and school supplies. Except for certain newspapers,² his wholesale sources of supply for the popular publications were limited to two sources: the defendant, Hudson County News Company, Inc. ("Hudson"), and the American News Company. These two companies were wholesale distributors of periodicals, such as newspapers and magazines and also paperback books and comic books. By reason of the fact that some national distributors and certain publishing companies had given Hudson permission to sell their publications, Hudson was the sole wholesale distributor for those publications in Hudson County, with the exception of East Newark, Arlington, Harrison and Kearny.³ The American News Company furnished only a small part of the publications sold at newsstands in Hudson County.⁴ Neither Hudson nor American distributed a publication in Hudson County that the other sold in that county.

Plaintiff went to Hudson and asked it to start serving him with publications in the spring of 1952. From that time Hudson sent him newspapers daily and other publications about twice a week. These deliveries came in a bundle or bundles depending on the quantity delivered. On Friday of each week, plaintiff received a bill accompanied by an invoice which listed the publications and their amount sent him during the week plus the newspapers and their amount which would be delivered to him on Saturday and Sunday of that week, plus a service charge. The bill would give plaintiff credit for publications which he had returned several weeks before. The bill stated: "All claims for credit must be made within seven days after receipt of this bill." The bill, as required by Hudson, was paid by plaintiff on the following Tuesday. Before the plaintiff could get credit for returns he had not ordered, he had to pack them in a box for Hudson's delivery-truck driver to pick up. He was required to itemize the returned publications on a form supplied by Hudson. After the returns had been picked up, plaintiff, as adverted to, would be required to wait several weeks until Hudson approved the amount of the return. This amount, to the extent approved by Hudson, would be deducted from a future bill.

In the beginning plaintiff accepted whatever items Hudson sent him for he did not know the sales potential of any given publication. But as time went on he became aware that Hudson was sending him more and more of the publications that would not sell in his store. At the same time, he was not getting enough of the publications for which there was a buyer demand at his store, such as The Saturday Evening Post and Mentor paperback books.

In 1953 he began requesting Hudson to discontinue delivering certain publications and to increase others. These requests were repeated many, many times in telephone conversations with Hudson and in letters written to it. When he had the time to spare, he would make a personal visit to Hudson's office in Jersey City in an attempt to stop delivery of the unwanted publications and to get the ones he wanted. His requests to stop sending him certain items which he particularized were not alone ignored, but the record discloses that whenever he appealed personally, by phone call or letter, that only materials he ordered be sent, the volume of the unwanted materials increased.

As plaintiff's protest against Hudson's sales practices increased, the quality of Hudson's service began to decrease. In delivering his bundles of publications, the driver would throw them from the delivery-truck at a place some distance from plaintiff's store, on the sidewalk, into the gutter or into a puddle of water. If it were raining at the time, the bundles were left in an unprotected location. After he complained to the Curtis Publishing Company, magazines and books were delivered inside his store by it. However, the unordered items continued to accompany those that he ordered, and on occasions, half of his billings were for unwanted materials.

Starting in 1956, he no longer paid the service charge and paid only for the merchandise which he wanted to accept. On February 7, 1957, he notified Hudson that he would, in the future, accept unordered publications on a consignment basis only. Between the fall of 1956 and June of 1957, Hudson cut off its services to plaintiff at least five times. When he inquired as to why it stopped deliveries, Hudson told him that he would not get them until he paid a balance which Hudson claimed he owed it. However, Hudson would never discuss the merits of the disputed claim with him.

In June of 1957, American News Company stopped doing business in Hudson County and Hudson took over the wholesale distribution of items formerly handled by American News and Hudson be came the sole distributor for the county. In that same month, Hudson stopped delivering any publications to plaintiff. The reason it gave was that plaintiff owed it a balance of $126.19. He refused to pay that amount because he claimed that Hudson, over a period of time, had shortchanged him on credit for returned items which totaled between $550 and $600. After he was cut off by Hudson, plaintiff continued to receive those newspapers not distributed by Hudson and he began to purchase newspapers and magazines, formerly delivered by Hudson, from other retailers at retail...