Copper Liquor, Inc. v. Adolph Coors Co.

• Decision Date: 20 August 1980
• Docket Number: No. 78-3209,78-3209
• Citation: 624 F.2d 575
• Parties: 1980-2 Trade Cases 63,495 COPPER LIQUOR, INC., et al., Plaintiffs, Robert Earl Basham, Jr., H. A. Anthony and Anthony and Willis Ray Loving, Executors of the Estate of Harold Letcher, Deceased, Plaintiffs-Appellees Cross-Appellants, v. ADOLPH COORS COMPANY, Defendant-Appellant Cross-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 575

624 F.2d 575

1980-2 Trade Cases 63,495

COPPER LIQUOR, INC., et al., Plaintiffs Robert Earl Basham, Jr., H. A. Anthony and Anthony and Willis Ray Loving, Executors of the Estate of Harold Letcher, Deceased Plaintiffs-Appellees Cross-Appellants, v. ADOLPH COORS COMPANY, Defendant-Appellant Cross-Appellee.

No. 78-3209.

United States Court of Appeals Fifth Circuit.

Aug. 20, 1980.

Rehearing Denied Oct. 16, 1980.

Bradley, Campbell & Carney, Leo N. Bradley, Earle D. Bellamy, II, Golden, Colo., for defendant-appellant cross-appellant.

James R. Warncke, San Antonio, Tex., for plaintiffs-appellees cross-appellants.

Appeals from the United States District Court for the Western District of Texas.

Before WISDOM, FAY and TATE, Circuit Judges.

WISDOM, Circuit Judge:

In this appeal we consider for the second time the Sherman Act suit brought by Harold Letcher ¹ against the Adolph Coors Company. Letcher initiated this action in March 1970 to recover damages that allegedly resulted when a Coors distributor, Coleman Distributing Company, refused to sell Coors beer to Letcher's store. A jury found Coors liable to the plaintiff under section 1 of the Sherman Act, 15 U.S.C. § 1, and the district court awarded damages and attorneys' fees. ² In 1975 this Court upheld the district court's finding of Sherman Act liability, but remanded the case "for further proceedings (1) to determine whether the violation caused Letcher injury, and, (2) if so, to determine damages . . .". Copper Liquor Inc. v. Adolph Coors Co., 5 Cir. 1975, 506 F.2d 934, 936, rehearing denied, 509 F.2d 758.

On retrial the jury found that Coors's antitrust violation caused the plaintiff's injury and awarded damages in the amount of $15,000. The district court awarded the plaintiff treble damages, as required by section 4 of the Clayton Act, 15 U.S.C. § 15, plus $45,000 in attorneys' fees. Both parties appealed. Coors argues that the evidence does not support the jury's finding of injury to the plaintiff or resultant damages. The plaintiff contends that the damages and attorneys' fees were grossly inadequate. We find that sufficient evidence supports the district court's damage award, but remand the case for reconsideration of the amount of reasonable attorneys' fees appropriate to counsel for the prevailing party.

I.

The evidence presented in the first trial showed that Letcher began operating a retail liquor store as a sole proprietorship in Brownwood, Texas, in January 1966. At about the same time, Coors entered the Brownwood market. Letcher began purchasing Coors for his store on January 24, 1966. On several occasions Letcher advertised Coors at a discount and sold the beer as a "loss leader". Coleman, the exclusive Coors distributor in the Brownwood area, informed Letcher that he would discontinue deliveries of Coors to the store unless Letcher would promise not to offer the beer at a discount. Letcher did not comply with Coleman's request and again advertised Coors at a discount. As a result, Coleman ceased deliveries of Coors on June 3, 1966. No Coors was sold at the store from late June 1966 until July 17, 1971, the date Ralph and Henrietta Williams became the sole owners of the store. ³

Letcher filed suit against Coors alleging that Coors conspired with its distributors to fix the retail price of beer and to discontinue supplying Coors beer to him. Letcher's complaint also charged Coors with conspiring to create and enforce exclusive territories within which each distributor was to conduct its business thereby making it impossible for Letcher to obtain Coors from another distributor after he was unable to buy from Coleman. Letcher attempted to prove injury and damages by showing that his store's sales declined after Coleman stopped delivering Coors. Letcher and Henrietta Williams, a clerk and later part owner of the store, testified that the store reduced its markup on all items from 25 percent to 15 percent to attract business that would compensate for diminished sales caused by the loss of Coors. The jury found that Coors had enforced territorial restraints and fixed prices in violation of section 1 of the Sherman Act and assessed Letcher's damages at $101,011.

We upheld the finding of a Sherman Act violation, but concluded that the record did not support the jury's findings of injury in fact and damages attributable to Coors's policies of price-fixing and territorial restrictions. Copper Liquor, Inc., 506 F.2d at 953; 509 F.2d at 759. The documentary evidence of Letcher's damages, which consisted almost exclusively of the store's gross bank deposit records, did not show that sales declined after July 1966 and did not support Letcher's contention that he reduced his markup on all goods after Coleman stopped delivering Coors. Of critical importance to our conclusion that no injury in fact was shown was Letcher's admission that he sold all Coors beer at an overall loss. Id. at 952. We remanded the case for the plaintiff to prove injury in fact and damages.

At the second trial, the plaintiff introduced the testimony of Henrietta Williams and J. Kenneth Green. The parties stipulated that the plaintiff purchased 1,211 cases of Coors beer between January 24, 1966 and June 3, 1966. Mr. Williams stated that the store purchased this beer from Coors for $4.00 and $4.10 a case. ⁴ Usually the beer was sold for $5.10 or $5.20 a case at a gross profit of $1.00 per case. On three weekends, however, the store advertised and sold Coors at a discount of $3.99 a case in an effort to increase its sales of other items. About 225 cases of Coors were sold below cost during these weekend sales. ⁵ According to Mrs. Williams's testimony, the store sold Coors at the rate of about 250 cases a month or $250. The plaintiff had no Coors beer from June 1966 until he went out of business on July 17, 1971, a period of 60 months. The jury's verdict of $15,000 is exactly 60 times $250.

Mrs. Williams again testified that after the deliveries of Coors stopped, the store's total sales declined. To attract more business the store reduced its markup on all items from 25 percent to 15 percent. The plaintiff failed in the second trial, as in the first, to produce documentary evidence that confirmed Mrs. Williams's statements that the store reduced its markup on all goods by 10 percent.

The testimony of the plaintiff's expert, certified public accountant Kenneth Green, concerned the loss of profit and loss of goodwill caused by Coors antitrust violation. Green based his testimony on incomplete business records that consisted of the store's bank statements and income tax returns for the years 1966 through 1971. Green stated that the store's 1966 profits were depressed by $10,569 as a result of the 10 percent markdown. ⁶ He testified that the diminished profits from 1967 to 1971 attributable to the 10 percent reduction of markup approached $90,000. ⁷ Green based his calculations, however, upon the assumption that the store reduced its markup in 1966. He was not able to verify a 10 percent reduction in markup by examining the store's business records. Green also calculated the store's loss of goodwill ⁸ attributable to Coors's antitrust violation. He said the store would have had a goodwill value of $109,900 had Letcher continued to mark up its goods by 25 percent during the years 1967 through 1971. The goodwill value of the store based on its actual net profits from 1967 to 1971 was supposedly only $18,145. ⁹

Coors introduced the testimony of Stuart Coleman, its Brownwood, Texas distributor, and Wayne A. Peters, an accountant. Coleman testified as to the competitive nature of the retail liquor market in Brownwood; his testimony did not bear on the question of the plaintiff's damages. Peters analyzed Letcher's tax returns for the years 1966 through 1971. He computed the net income generated by the store by adjusting personal and corporate tax returns to compensate for the change in the store's operation from a proprietorship to a partnership to a corporation. Coors showed through Peters's testimony and exhibits that the net income attributable to the store's operations increased after the loss of Coors. Peters also observed that sales increased each year from 1966 through 1970 and declined only in 1971, the last year Letcher operated the store. ¹⁰

II.

The parties dispute vigorously whether the evidence presented in the second trial proved that Letcher suffered injury in fact and damages as a result of Coors's antitrust violation. Coors argues that the district judge should have directed a verdict on the ground of insufficiency of the plaintiff's evidence. The plaintiff seeks a new trial on the issue of damages on the ground that the jury's award of $15,000 represents less than one-third of the damages proved. We must uphold the district court's judgment unless "there is a complete absence of substantial probative facts to support the jury's verdict". Lavender v. Kurn, 1946, 327 U.S. 645, 653, 66 S.Ct. 740, 744, 90 L.Ed. 916, quoted in Copper Liquor, Inc. v. Adolph Coors Co., 5 Cir. 1975, 506 F.2d 934, 953; see Greene v. General Foods Corp., 5 Cir. 1975, 517 F.2d 635, 663, cert. denied, 1976, 424 U.S. 942, 96 S.Ct. 1409, 47 L.Ed.2d 348.

To recover treble damages under the antitrust laws a plaintiff, such as Letcher, who has proved a violation of the Sherman Act must also prove "as a matter of fact and with a fair degree of certainty" a causal link between the violation and the fact of injury to the plaintiff's business or property. Response of Carolina, Inc. v. Leasco Response, Inc., 5 Cir. 1976, 537 F.2d 1307, 1321 (quoting Terrell v. Household Goods Carriers' Bureau, 5 Cir. 1974, 494 F.2d 16, 20, cert. denied, 419 U.S. 987, 95 S.Ct. 246, 42 L.Ed.2d 260); see Ford Motor Co. v. Webster's Auto Sales, Inc., 1 Cir. 1966, 361 F.2d 874, 885; Comment, Monetary Recovery Under Federal Antitrust Statutes, 45 Tex.L.Rev. 856, 860-63 (1967). A plaintiff is held to a less rigid...