Cohen v. Curtis Publishing Company, 4-60 Civ. 265.

• Court: U.S. District Court — District of Minnesota
• Writing for the Court: Lawrence C. Brown (of Faegre & Benson, Minneapolis, Minn.), for Cowles Magazines, Inc
• Citation: Cohen v. Curtis Publishing Company, 229 F.Supp. 354 (D. Minn. 1963)
• Decision Date: 19 September 1963
• Docket Number: No. 4-60 Civ. 265.,4-60 Civ. 265.
• Parties: L. Gilbert COHEN, Plaintiff, v. CURTIS PUBLISHING COMPANY, Curtis Circulation Company, Time, Inc., Life Circulation Co., Cowles Magazines, Inc., The Hearst Corporation, Newsweek, Inc., Defendants.

229 F. Supp. 354

L. Gilbert COHEN, Plaintiff, v. CURTIS PUBLISHING COMPANY, Curtis Circulation Company, Time, Inc., Life Circulation Co., Cowles Magazines, Inc., The Hearst Corporation, Newsweek, Inc., Defendants.

No. 4-60 Civ. 265.

United States District Court D. Minnesota, Fourth Division.

September 19, 1963.

Edward C. Stringer (of Stringer, Donnelly & Sharood), St. Paul, Minn. (McCauley, Henry & Brennan, New York City, of counsel), for Hearst Corp.

John L. Hannaford (of Doherty, Rumble & Butler), St. Paul, Minn. (Pepper, Hamilton & Scheetz, Philadelphia, Pa., of counsel), for Curtis Pub. Co. and Curtis Circulation Co.

Lawrence C. Brown (of Faegre & Benson, Minneapolis, Minn.), for Cowles Magazines, Inc.

L. Gilbert Cohen, Minneapolis, Minn., appeared pro se.

NORDBYE, District Judge.

The Court heretofore has considered and granted a motion for summary judgment on behalf of Time, Inc., and Life Circulation Company, which were joint defendants with the moving defendants herein. That opinion is to be found in 31 F.R.D. 569. A recital of certain factual matters and reference to some of the correspondence in that decision is applicable here, and instead of repeating it, the Court adopts that opinion as part of the decision herein.

There are certain factual differences, however, as between the dealings by Cohen with Time and Life and his dealings with these defendants. These differences will be made to appear as the Court sets forth the salient dealings between Cohen and each of these moving defendants.

The three principal factors upon which plaintiff's claim is bottomed may be summarized as follows:

1. That the moving defendants are members of the Central Registry, magazine subscription solicitors, an unincorporated association sponsored by the Magazine Publishers Association. These defendants are alleged to have received a memorandum from one Mr. Morrow, Secretary of the Central Registry, directed to circulation directors advising them of plaintiff's medical scholarship plan, and this memorandum is claimed to be the warning which precipitated the refusal of these moving defendants, acting together, to grant Cohen the right to solicit subscriptions for his medical scholarship plan.

2. Agencies involved in selling "sponsored circulation" are classified as "D" agencies by the Central Registry and plaintiff alleges that, by agreement, only publishers are allowed to engage in this mode of solicitation, which deprived him of that method of selling.

3. Some magazine subscription agencies receive better commissions than Cohen was offered; hence, he urges price discrimination.

The moving defendants contend:

1. That the affidavits filed in their behalf unequivocally establish that each of the moving defendants acted independently of each other in dealing with Cohen.

2. That plaintiff had no business or property upon which a finding of a Sherman Act or Clayton Act violation could be supported, and plaintiff had no business or property which could have been damaged by anything defendants are alleged to have done.

3. That the cause of plaintiff's failure was his own inability to get any support for his medical subscription plan. In other words, assuming that there was anything wrong which defendants did, or any conspiracy or concert of action to prevent Cohen from obtaining the right to solicit subscriptions for the magazines published by the defendants, such action was not a proximate cause of any damage plaintiff may have sustained. That is, according to the defendants, plaintiff's failure to promote the medical scholarship plan successfully was due to his own inability to attract anyone to adopt it.

4. As to price discrimination, plaintiff attempts to come within and under Title 15, Section 13(a), United States Code, which provides:

"It shall be unlawful for any person engaged in commerce, in the course of such commerce, either directly or indirectly, to discriminate in price between different purchasers of commodities of like grade and quality, where either or any of the purchases involved in such discrimination are in commerce, where such commodities are sold for use, consumption, or resale within the United States * * *."

Plaintiff was not, according to the defendants, a purchaser of a commodity, that is, the usual buy and sell arrangement is wholly lacking in his venture to interest magazine publishers to engage him as a solicitor for subscriptions to their magazines.

5. In addition, defendants point out that while sponsored circulations carried on by publishers are designated in the Central Registry by the letter "D", the showing indicates that the sponsored circulation is not reserved for publishers. Moreover, if the defendants decided that the best results could be obtained by limiting their sponsored circulation to magazine publishers, the defendants urge that they are accorded that right. Federal Trade Commission v. Curtis Publishing Company, 260 U.S. 568, 43 S.Ct. 210, 67 L.Ed. 408.

THE HEARST CORPORATION

It was on May 11, 1955, that Cohen addressed a letter to "Circulation Manager, Hearst Magazines" seeking to act for it as a "wholesale subscription agency." On May 17, 1955, District Manager M. C. McConnell answered, stating that Hearst was willing to permit Cohen to take subscription orders on a commission basis. On May 19, 1955, Cohen replied, stating that he wanted to act as an agent or as an agency for Hearst in his immediate territory. On May 24, 1955, one Victor E. Berger, a superior of McConnell, answered Cohen, stating that Hearst had no subscription plan for a small agency such as his, but that it would permit him to act as a part-time representative working on a commission basis, as outlined in McConnell's letter of May 17, 1955. On June 3, 1955, Cohen answered Berger stating again that he wanted to act as a wholesale agency. On June 6, 1955, Berger answered, stating that Hearst was willing to extend him the same rates made available to any person starting in the subscription business. On June 9, 1955, Cohen answered, arguing that while he "left the circulation field several decades ago," he felt that he was entitled to begin on a wholesale agency basis. On June 28, 1955, Cohen wrote Berger reiterating his request for recognition as an agent of Hearst on a basis higher than a mere beginner's commission. On August 23, 1956, Berger wrote Cohen that the Magazine Publishers Association had brought to his attention Cohen's "Self Perpetuating Medical Scholarship Plan" based upon subscription sales to doctors throughout the country. He stated that Cohen had included therein under the heading "Leading Publications Which Make This Project Possible," two of their publications, namely, Good Housekeeping and Sports Afield. He notified Cohen that he should accept the letter "as our notification that you are not to include any of our publications, shown above, in your plan or any mailings you may make, and further that any authorization you may have had, either assumed or implied, is cancelled as of this date."

The memorandum directed to circulation directors by Mr. Morrow, Secretary of the Central Registry, under date of August 17, 1956, with respect to Cohen's medical scholarship plan, reads as follows:

"A letter dated July 15, 1956, from L. Gilbert Cohen, manager of subject agency has come to our attention. The subject of this letter is `Doctors' $1,000,000 Self Perpetuating Medical Scholarship Fund at No Cost to Any One.'

"We quote further from Mr. Cohen's letter as follows:

"`We will pay into the fund 20% of the subscription price of the magazines to which doctors usually subscribe for home and office. It is estimated that this will amount to $5.00 per doctor. With only half of the 180,000 doctors participating this can mean $500,000. by the end of 1956 and another $500,000. by the end of 1957. As long as publishers will pay commissions the Fund will keep growing. Doctors incur no additional expense in giving us their subscriptions.

"`The Fund will make loans to medical students on longeasy terms. The repayment of the loans will perpetuate the fund.'

"In the postscript the statement is made that their charge for handling subscriptions to medical journals is 50¢ and any excess commissions would be turned into the Fund.

"We thought you would want to have the above information."

On October 1, 1956, Cohen wrote Berger protesting his letter of August 23, 1956, and asked him to reconsider. The next letter appearing in the record is dated June 27, 1960, when Cohen wrote Berger as follows:

"In 1956, after Magazine Publishers Association acquainted you with my medical scholarship plan, you cancelled my authority to take subscriptions for your publications.

"Presumably you had sufficient and valid reason for such action, even though you never thought it worth while to tell me why you did that.

"Perhaps it was the existing conditions at the time which made your action justifiable. Since conditions change with the times, I am taking the liberty of asking you whether it may now include your magazines in my plan?

"No publisher has voiced any objection to the plan itself, — at least Mr. Morrow stated that. None has told me they did not like my plan. I am hoping that a few important publishers still think well of my plan and that this time it will be OK to include their publications in my medical scholarship plan, yours among them."

It should be noted that when Berger wrote his letter of August 23, 1956, informing Cohen that Hearst withdrew any authorization to him to take subscriptions for Hearst magazines, Cohen never had been authorized to include Good Housekeeping and Sports Afield as publications which allegedly made his medical scholarship fund possible. As of that time, the only authority Cohen had received was to act as an ordinary subscription agent for Hearst publications as any agent might do.

On July 11, 1960, Cohen wrote Berger asking him if he still refused to have Hearst magazines...