Daily Press, Inc. v. United Press International

• Citation: 412 F.2d 126
• Decision Date: 20 June 1969
• Docket Number: No. 18723.,18723.
• Parties: The DAILY PRESS, INC., Plaintiff-Appellant, v. UNITED PRESS INTERNATIONAL, The Evening News Association, Knight Newspapers, Inc., Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

412 F.2d 126 (1969)

The DAILY PRESS, INC., Plaintiff-Appellant, v. UNITED PRESS INTERNATIONAL, The Evening News Association, Knight Newspapers, Inc., Defendants-Appellees.

No. 18723.

United States Court of Appeals Sixth Circuit.

June 20, 1969.

Eugene Driker, Detroit, Mich., for appellant; Erwin Ziegelman, Detroit, Mich., on brief; Barris, Sott, Denn & Driker, Parsons, Tennent, Hammond, Hardig & Ziegelman, Detroit, Mich., of counsel.

H. William Butler, Leslie W. Fleming, Kenneth Murray, Detroit, Mich., for appellees; Peter A. Davis, Clark, Klein, Winter, Parsons & Prewitt, Detroit, Mich., on brief for United Press International; Baker, Hostetler & Patterson, Cleveland, Ohio, of counsel; Rockwell T. Gust, Detroit, Mich., on brief for The Evening News Assn.; Butzel, Eaman, Long, Gust & Kennedy, Detroit, Mich., of counsel; Brownson Murray, Detroit, Mich., on brief for Knight Newspapers, Inc.

Before WEICK, Chief Judge, and O'SULLIVAN and McCREE, Circuit Judges.

WEICK, Chief Judge.

The controversy in this anti-trust case arose out of a strike which closed down Detroit's two major daily newspapers for about four months. One week after the strike started, plaintiff, The Daily Press, Inc. Daily Press, was incorporated under the laws of Michigan to publish an interim newspaper in Detroit for the duration of the strike. Publication was commenced on July 22, 1964, and ceased on November 22, 1964, when the strike ended.¹ Two days before publication was ceased, Daily Press filed the present suit in the District Court against the struck newspapers, The Evening News Association, publisher of the Detroit News News, Knight Newspapers, Inc., publisher of the Detroit Free Press Free Press, and United Press International UPI, a corporation engaged in worldwide gathering of news and selling of same to newspapers and other media.

In its complaint, plaintiff's claim was blown up out of all proportion. Stripped of verbiage, the nub of the claim was that UPI refused to furnish plaintiff with its wire services during the strike, and that the News and Free Press had induced UPI to take such action, all as part of a conspiracy on the part of the defendants to restrain competition and to monopolize news services, newspapers and newspaper advertising, in violation of Sections 1 and 2 of the Sherman Act², for which plaintiff sought to recover damages of $2,500,000, trebled to $7,500,000 under Section 4 of the Clayton Act.³

The defendants answered separately, denying that they participated in a conspiracy and denying that they restrained competition or attempted a monopoly. Extensive discovery ensued, in which officers and employees of all of the parties were deposed, affidavits were filed, and many documents and papers were produced.

The defendants then filed separate motions for summary judgment, which the District Judge considered upon depositions, affidavits, and exhibits.

The District Judge, in an opinion appearing in twenty-five pages of the record, determined that there was no genuine issue as to any material fact; and that the charges in the complaint were unsupported by the evidence and were wholly unfounded. He granted the motions for summary judgment and dismissed the complaint. On appeal the principal point urged upon us by appellant is that the District Court ought not to have disposed of the case on summary judgment.

The Supreme Court in Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 82 S.Ct. 486, 7 L.Ed.2d 458 (1962), held that summary judgment should be used sparingly in complex antitrust litigation. It enunciated the following rule:

"Summary judgment should be entered only when the pleadings, depositions, affidavits, and admissions filed in the case `show that except as to the amount of damages there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law\'. Rule 56(c), Fed.Rules Civ.Proc. 28 U. S.C.A. This rule authorizes summary judgment `only where the moving party is entitled to judgment as a matter of law, where it is quite clear what the truth is, * * * and where no genuine issue remains for trial * * * for the purpose of the rule is not to cut litigants off from their right of trial by jury if they really have issues to try.\'" Id. at 467, 82 S.Ct. at 488.

We followed Poller in Southern Blowpipe & Roofing Co. v. Chattanooga Gas Co., 360 F.2d 79, 81 (6th Cir. 1966), and in Alles Corp. v. Senco Prods., Inc., 329 F.2d 567, 572 (6th Cir. 1964).

It should not be understood, however, that Rule 56 of Federal Rules of Civil Procedure governing summary judgment is inapplicable in antitrust cases. The Rule applies in all civil actions.

The Supreme Court recently applied the Rule in First Nat'l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 284-290, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968), and affirmed a summary judgment in a complex antitrust case which had been pending for more than eleven years. It distinguished Poller, where the competitive relationship between the parties was such as to make plausible plaintiff's argument that the defendant had embarked on a plan designed to put him out of business. In the present case it would be preposterous for plaintiff to make any such claim. Mr. Justice Marshall, who wrote the opinion for the Court, stated:

"The case at hand presents peculiar difficulties because the issue of fact crucial to petitioner\'s case is also an issue of law, namely the existence of a conspiracy. What Rule 56(e) does make clear is that a party cannot rest on the allegations contained in his complaint in opposition to a properly supported summary judgment motion made against him.19 Yet the analysis

"19. Indeed it was for the precise purpose of overturning a line of cases in the Third Circuit holding that a party could successfully oppose summary judgment by relying on his well-pleaded allegations that Rule 56(e) was amended in 1963. See 6 Moore, Federal Practice ¶ 56.222, at 2821 (2d ed. 1966)."

of the facts undertaken above demonstrates that, due to the absence of probative force of Cities\' failure to deal with Waldron as being in itself evidence of conspiracy, petitioner\'s position is, in effect, that he is entitled to rest on the allegations of conspiracy contained in his pleadings. Thus petitioner repeatedly states that Cities has never disproved its participation in the alleged conspiracy, despite the fact that the only evidence of such participation is his allegation that the failure to deal resulted from conspiracy.

Essentially all that the lower courts held in this case was that Rule 56(e) placed upon Waldron the burden of producing evidence of the conspiracy he alleged only after respondent Cities Service conclusively showed that the facts upon which he relied to support his allegation were not susceptible of the interpretation which he sought to give them. That holding was correct. To the extent that petitioner\'s burden-of-proof argument can be interpreted to suggest that Rule 56(e) should, in effect, be read out of antitrust cases and permit plaintiffs to get to a jury on the basis of the allegations in their complaints coupled with the hope that something can be developed at trial in the way of evidence to support those allegations, we decline to accept it. While we recognize the importance of preserving litigants\' rights to a trial on their claims, we are not prepared to extend those rights to the point of requiring that anyone who files an antitrust complaint setting forth a valid cause of action be entitled to a full-dress trial notwithstanding the absence of any significant probative evidence tending to support the complaint." Id. at 289-290, 88 S.Ct. at 1592-1593.

We approved the granting of summary judgment in the antitrust case of Ace Beer Distributors, Inc. v. Kohn, Inc., 318 F.2d 283 (6th Cir. 1963), cert. denied, 375 U.S. 922, 84 S.Ct. 267, 11 L.Ed.2d 166 (1963), rehearing denied, 375 U.S. 982, 84 S.Ct. 479, 11 L.Ed.2d 428 (1964).

We do not regard the issues in the present case as complex. The case does not even involve a refusal on the part of UPI to sell its services to plaintiff. The refusal was only its refusal to sell on terms proposed by plaintiff who was unwilling to buy on regular UPI terms.

The difficulty with plaintiff's position is that plaintiff intended only to fill the void created by the strike. It did not know how long the strike would last, whether one or two days, a week or a few months. When the strike was over it would lose its employees (who intended to and did return to their jobs with the News and the Free Press) and plaintiff would fold, as it did. In this precarious situation, plaintiff could make only short-term commitments.

On the day of its organization, Michael Dworkin, president and publisher of the Daily Press, telephoned the central division office of UPI in Chicago, spoke to the assistant central division manager (later identified as Mr. Peter Willett), and advised him that Daily Press was interested in obtaining UPI service⁴ Dworkin asked whether there was such a thing as a strike clause in UPI's contracts with the Free Press and the News. Dworkin testified that Willett said that there was no such thing as a strike clause; that UPI could sell its services to whomever it pleased; and that he did not see any reason why the Daily Press could not have its service.

Dworkin testified that they then discussed the mechanics of acquiring UPI service. At this point Willett stated that Daily Press would have to sign a contract similar to the one which UPI had with the News and Free Press. According to Dworkin, Willett said:

"We cannot go into a town and service a newspaper on terms different than those we are servicing to the newspapers already."

Willett stated further:

"I will tell you what, though, if you can get the News and the Free Press to agree to our servicing this on a contract dissimilar from theirs you can have the service as soon as we can install it."

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