Broadcasters, Inc. v. Morristown Broadcasting Corp.

• Citation: 185 F. Supp. 641
• Decision Date: 25 July 1960
• Docket Number: No. 150-60.,150-60.
• Parties: BROADCASTERS, INC. and Merrill S. Morris, Plaintiffs, v. MORRISTOWN BROADCASTING CORPORATION, George S. Croy, Kenneth A. Croy, Edward J. Santoro, Rose Cifrese, Henry J. Behre, Jr. and Tri-County Broadcasting Corporation, Defendants.
• Court: U.S. District Court — District of New Jersey

185 F. Supp. 641

BROADCASTERS, INC. and Merrill S. Morris, Plaintiffs, v. MORRISTOWN BROADCASTING CORPORATION, George S. Croy, Kenneth A. Croy, Edward J. Santoro, Rose Cifrese, Henry J. Behre, Jr. and Tri-County Broadcasting Corporation, Defendants.

No. 150-60.

United States District Court D. New Jersey.

July 25, 1960.

Thorn Lord, Trenton, N. J., Richard C. O'Hare, Washington, D. C., for plaintiffs.

Edward J. Santoro, So. Plainfield, N. J., Robert M. Booth, Jr., Washington, D. C., for defendants Tri-County Broadcasting Corp., Henry J. Behre, Jr., Rose Cifrese & Edward J. Santoro; Jeffers, Mountain & Franklin, Morristown, N. J., for defendants Morristown Broadcasting Corp., George S. and Kenneth A. Croy; Leonard J. Emmerglick, Washington, D. C., of counsel.

WILLIAM F. SMITH, Chief Judge.

This is a civil action under the antitrust laws and particularly Sections 4 and 16 of the Clayton Act, 15 U.S.C.A. §§ 15 and 26. The complaint alleges generally an unlawful agreement, combination and conspiracy in restraint of trade and commerce in violation of Sections 1 and 2 of the Sherman Act, 15 U.S.C.A. §§ 1 and 2, and asserts claims for treble damages and injunctive relief. The action is before the Court at this time on a motion to dismiss the complaint, filed by the defendants under Rule 12(b) of the Rules of Civil Procedure, 28 U.S.C.A., on the ground that the complaint fails to state a claim upon which relief can be granted.

A violation of the Act is the sine qua non of a private civil action under the antitrust laws. It is therefore essential that the complaint allege ultimate facts from which it may be determined, or at least inferred, that the concerted conduct of the defendants was reasonably calculated to restrict interstate trade or commerce to the prejudice of the public interest. Shotkin v. General Electric Co., 10 Cir., 171 F.2d 236, 238 et seq.; Kinnear-Weed Corp. v. Humble Oil & Refining Co., 5 Cir., 214 F.2d 891, 893 et seq.; certiorari denied 348 U.S. 912, 75 S.Ct. 292, 99 L.Ed. 715; Crummer Co. v. Dupont, 5 Cir., 223 F.2d 238, 241 et seq.; Nelligan v. Ford Motor Co., 4 Cir., 262 F.2d 556; Alexander v. Texas Co., D.C., 149 F.Supp. 37, 40. A conclusionary allegation that the conduct of the defendants was in violation of the Act, absent specific factual allegations to support it, is insufficient. Ibid. The present complaint, tested by the generally recognized rule, fails to state a claim upon which relief can be granted and, therefore, cannot be sustained.

The plaintiff, Broadcasters, Inc., of which the plaintiff Morris is a majority stockholder, filed with the Federal Communications Commission a formal application for permission to construct a standard radio broadcast station to serve Plainfield, New Jersey, and the contiguous area; this application was filed on May 19, 1956. While the said application was pending, the defendant Tri-County Broadcasting Corporation, of which three of the individual defendants are allegedly stockholders, filed with the Commission a formal application for permission to construct a standard radio broadcast station to serve the same area; this application was filed in October of 1956. The pending applications seek permission to operate on the same frequency and are therefore "mutually exclusive."

The complaint charges in the most general terms that the application of the defendant Tri-County Broadcasting Corporation was filed pursuant to an unlawful conspiracy and that the joint action of the defendants has resulted in an unreasonable restraint upon interstate trade and commerce in violation of the Act. This general charge is supplemented by specific allegations that the pendency of the mutually exclusive application of the said defendant has impeded and delayed the processing of the corporate plaintiffs' application before the Commission to the injury of the public and the plaintiffs. The general charge that the joint action of the defendants has resulted in an unreasonable restraint upon interstate trade and commerce is predicated solely on the said allegation and nothing more. The allegation is clearly insufficient to support the charge.

There is vested in the Federal Communications Commission the plenary power to regulate the field of radio broadcast services and, consistent therewith, specific authority to (a) grant licenses, (b) classify radio stations, (c) prescribe the nature of the services to be rendered, (d) assign bands of frequencies for each individual station, (e) determine the location of individual stations, (f) establish areas or zones to be served by any station, and (g) promulgate such regulations not inconsistent with the law as it deems necessary to the administration and enforcement of the Act. 47 U.S.C.A. §§ 307 and 303(a) (b) (c) (d) (h) (f). The statutory criterion which governs the Commission's exercise of power and authority is "public convenience, interest, or necessity." Ibid. See National Broadcasting Co. v. United States, 319 U. S. 190, 215, et seq., 63 S.Ct. 997, 87 L.Ed. 1344.

While the Federal Communications Act recognizes that the field of radio broadcast services is one of free competition, there is vested in the Commission the authority to choose between applicants whose applications are mutually exclusive. 47 U.S.C.A. § 307(b). National Broadcasting Co. v. United States, supra, 319 U.S. at pages 215, 216 and 217, 63 S.Ct. at page 1009. The statutory criterion by which the Commission must be guided is the "fair, efficient, and equitable distribution of radio service" in the public interest. Ibid. Where, as in the instant case, mutually exclusive applications are pending before the Commission, "comparative considerations as to the services to be rendered" govern the application of the standard of "public interest, convenience, or necessity." National Broadcasting Co. v. United States, 319 U.S. at page 217, 63 S.Ct. at page 1009. These considerations may result in the grant of one and denial of the other of two competing applications.

It is alleged by the plaintiffs that, pursuant to Section 309 of the Act, the Commission may grant an application for a license without a hearing. It should be noted, however, that this may be done only "if upon examination of any application * * * the Commission shall find that public interest, convenience, and necessity would be served" by the grant of the application. Subdivision (a). It should be noted further that if the Commission is unable to make such a finding on the preliminary record it is required to "formally designate the application for hearing." Subdivision (b). The...