Danny Kresky Enterprises Corp. v. Magid

• Decision Date: 02 September 1983
• Docket Number: Nos. 83-5074,83-5075,s. 83-5074
• Citation: 716 F.2d 206
• Parties: 1983-2 Trade Cases 65,591 DANNY KRESKY ENTERPRISES CORPORATION, Appellant and Cross-Appellee, v. Larry MAGID, Herbert Spivak, Joseph Spivak and Allen Spivak, individually and trading as Electric Factory Concerts, Appellees and Cross-Appellants.
• Court: U.S. Court of Appeals — Third Circuit

Page 206

716 F.2d 206

1983-2 Trade Cases 65,591

DANNY KRESKY ENTERPRISES CORPORATION, Appellant and Cross-Appellee, v. Larry MAGID, Herbert Spivak, Joseph Spivak and Allen Spivak individually and trading as Electric Factory Concerts, Appellees and Cross-Appellants.

Nos. 83-5074, 83-5075.

United States Court of Appeals Third Circuit.

Argued July 11, 1983.

Decided Sept. 2, 1983.

Steven M. Kramer (argued), Philadelphia, Pa., for appellant and cross-appellee, Danny Kresky Enterprises Corp.; Robert Whitehill, Pittsburgh, Pa., of counsel.

Richard P. McElroy (argued), Jeanne P. Wrobleski, Blank, Rome, Comisky & McCauley, Philadelphia, Pa., for appellees Before SEITZ, Chief Judge, SLOVITER and VAN DUSEN, Circuit Judges.

and cross-appellants, Larry Magid, Herbert Spivak, Joseph Spivak and Allen Spivak, individually and trading as Elec. Factory Concerts; H. Yale Gutnick, Strassburger, McKenna, Messer, Shilobod & Gutnick, Pittsburgh, Pa., of counsel.

OPINION OF THE COURT

SLOVITER, Circuit Judge.

I.

Before us are cross-appeals by plaintiff, Danny Kresky Enterprises Corporation (Kresky Corp.), and defendants, Larry Magid, Herbert Spivak, Joseph Spivak and Allen Spivak, individually and trading as Electric Factory Concerts, a partnership (Electric Factory), arising out of Kresky Corp.'s suit in which it alleged Electric Factory committed antitrust violations in connection with the promotion of "black oriented" concerts in the Pittsburgh, Pennsylvania market. A jury awarded plaintiff damages of $5,500; the district court vacated the award, directing entry of judgment n.o.v.; and plaintiff appeals. The district court entered a permanent injunction against defendant, and defendant appeals. We will affirm entry of the injunction, reverse the judgment n.o.v., and reinstate the damage award.

II.

Kresky Corp. and Electric Factory are competitors in the concert promotion business. Concert promoters ordinarily submit bids to the booking agent of a musical artist in order to obtain an agreement to promote a concert performance by that artist. Often there are bids by several promoters. The decision to accept or reject the bid is made by the artist or the artist's management. Two or more promoters frequently co-promote concerts, sharing in the profits and losses.

Electric Factory is headquartered in Philadelphia, which is acknowledged to be one of the most lucrative markets in the United States for the performance of popular music concerts. The Spectrum Arena is the largest and most attractive facility for this purpose in Philadelphia and provides the most economical site for concert performers with large drawing power. In 1972, Electric Factory was given exclusive access to the Spectrum for the promotion of concerts. The written agreement terminated in 1977, although it was a disputed factual issue whether that exclusive arrangement continued, as plaintiff alleged, pursuant to an oral understanding.

Kresky Corp., which is headquartered in Pittsburgh, filed this suit in the United States District Court for the Western District of Pennsylvania alleging that Electric Factory conspired with others to unlawfully restrain trade in the Pittsburgh market in violation of sections 1 and 2 of the Sherman Act through blockbooking of concerts and group boycotts. In essence, the complaint alleged that Electric Factory used its exclusive arrangement with the Spectrum and its exclusive license for the promotion of concerts at the Cincinnati Riverfront Coliseum to force various concert performers to perform for Electric Factory in Pittsburgh, and that it threatened artists, artists' agents, and artists' managers that it would not deal with them in any market unless it obtained the artists' services for the Pittsburgh market. Among the co-conspirators listed were Spectrum, Inc., Irv Nahan, Georgie Woods, Jot Corporation, Borgas, Inc., and WDAS (Max H. Leon, Inc.), a radio station in Philadelphia alleged to be "one of the most powerful, in terms of influence, black oriented radio stations in the country." The complaint alleged "[i]t is critical to black oriented artists that their music be played on WDAS." Electric Factory filed a counterclaim alleging that Kresky Corp. and several co-conspirators violated sections 1 and 2 of the Sherman Act.

The case was tried before a jury for nine days from February 29 to March 16, 1981. Among the evidence introduced by plaintiff was the testimony of Danny Kresky, plaintiff's chief operating officer, that he was not permitted by the artists' management to discuss or bid for promotion rights to nine black-oriented concerts at the Civic Arena in Pittsburgh between 1976 and 1979, all nine of which were eventually promoted by Electric Factory. Plaintiff also introduced evidence of, inter alia, Electric Factory's exclusive agreement to promote concerts at the Spectrum, its arrangement not to compete with Borgas, Inc., one of the alleged co-conspirators, the admission of one of Electric Factory's partners that the purpose of the arrangement with Borgas "was to try to keep [them] from competing with each other", and "to stop [them] from fiercely competing", and threats by Larry Magid, one of Electric Factory's principals, directed to artists and management to induce their use of Electric Factory's promotion services. Plaintiff limited its claim for damages to the profits it would have received from two of the nine concerts in Pittsburgh, the February 3, 1978 and April 9, 1979 Civic Arena concerts by Parliament Funkadelic. Kresky requested damages of estimated profits of $22,000.

The jury returned a special verdict finding that Electric Factory had conspired to restrain trade in violation of section 1 of the Sherman Act, but had not violated section 2 of the Sherman Act; that plaintiff had suffered damages in the amount of $5,500; and that plaintiff had not violated the antitrust laws. Thereafter, plaintiff filed a motion for permanent injunctive relief. The court, relying on the evidence adduced at trial without a separate evidentiary hearing, entered a judgment which, inter alia, permanently enjoined Electric Factory "from entering into a conspiracy with concert artists whereby the artists agree to refrain from entering into promotional agreements with [Kresky Corp.] upon the threat of [Electric Factory] to refuse to promote the artists in the future at the Spectrum Arena in Philadelphia."

Electric Factory filed a motion for judgment n.o.v. which the court characterized as "challenging plaintiff's proof of the amount of the damage done." The district court granted the motion and vacated the damage award to plaintiff but left intact the permanent injunction against Electric Factory.

III.

A.

Judgment n.o.v. on Damages

A judgment notwithstanding the verdict may be granted under Fed.R.Civ.P. 50(b) "only if, as a matter of law, 'the record is critically deficient of that minimum quantity of evidence from which a jury might reasonably afford relief.' " Dudley v. South Jersey Metal, Inc., 555 F.2d 96, 101 (3d Cir.1977). In considering a motion for judgment n.o.v., the court "must expose the evidence to the strongest light favorable to the party against whom the motion is made and give him the advantage of every fair and reasonable inference." Inventive Music Ltd. v. Cohen, 617 F.2d 29, 31 (3d Cir.1980). On appeal, the appellate court should apply the same standard as the trial court in determining the propriety of a judgment n.o.v. Harwood & Associates, Inc. v. Texas Bank & Trust, 654 F.2d 1073, 1076 (5th Cir.1981).

An antitrust plaintiff seeking treble damages under section 4 of the Clayton Act must prove an antitrust violation, fact of damage or injury, and measurable damages. See Deaktor v. Fox Grocery Co., 475 F.2d 1112, 1116 (3d Cir.1973), cert. denied, 414 U.S. 867, 94 S.Ct. 65, 38 L.Ed.2d 86 (1973). The scope of the fact of injury factor has proved most troublesome from an analytic standpoint. However, as we recognized in Van Dyk Research Corp. v. Xerox Corp., 631 F.2d 251, 255 (3d Cir.1980), cert. denied, 452 U.S. 905, 101 S.Ct. 3029, 69 L.Ed.2d 405 (1981), fact of damage or injury requires that plaintiff show a nexus between the violation and the injury. As the Supreme Court explained in Zenith Radio Corp. v. Hazeltine, 395 U.S. 100, 114 n. 9, 89 S.Ct. 1562, 1571 n. 9, 23 L.Ed.2d 129 (1968):

[Plaintiff's] burden of proving the fact of damage under Sec. 4 of the Clayton Act is satisfied by its proof of some damage flowing from the unlawful conspiracy; inquiry beyond this minimum point goes only to the amount and not the fact of damage. It is enough that the illegality is shown to be a material cause of the injury; a plaintiff need not exhaust all possible alternative sources of injury in fulfilling his burden of proving compensable injury under Sec. 4 (emphasis in original).

In this case, the jury, in its answers to special interrogatories, found with respect to the section 1 claim both that "defendants entered into a combination or a conspiracy with others" amounting to an unreasonable restraint of trade, and that this combination or conspiracy "proximately resulted in injury to the plaintiff's business or property." The jury established the amount of damages as $5,500, which the court viewed as representing the profits earned by defendant on the two Parliament Funkadelic concerts. ¹

It is far from clear that Electric Factory has preserved the contention, which it presented at oral argument on appeal, that there was insufficient evidence to show a violation with respect to the two Parliament Funkadelic concerts. In its opinion, the district court stated that for the purposes of the motion for judgment n.o.v.: "[D]efendants concede plaintiff has proved a violation of the antitrust laws, that is the conspiracy between defendants and various black artists to prevent plaintiff from successfully bidding for the artists' services. Defendants further concede plaintiff has proved the conspiracy...