Gaines v. Carrollton Tobacco Board of Trade, Inc.
Decision Date | 02 May 1974 |
Docket Number | No. 73-1450.,73-1450. |
Citation | 496 F.2d 284 |
Parties | Perry J. GAINES, d/b/a Growers Tobacco Warehouse Company, et al., Plaintiffs-Appellants, v. CARROLLTON TOBACCO BOARD OF TRADE, INC., et al., Defendants-Appellees. |
Court | U.S. Court of Appeals — Sixth Circuit |
Joseph R. Huddleston, Huddleston Brothers, Bowling Green, Ky., on brief, for plaintiffs-appellants.
John M. Berry, Berry & Floyd, New Castle, Ky., E. Gaines Davis, Jr., Frankfort, Ky., on brief, for defendants-appellees.
Before PHILLIPS, Chief Judge, EDWARDS, Circuit Judge, and O'SULLIVAN, Senior Circuit Judge.
This is the second appeal in this antitrust case. Preceding the first appeal the District Court had found and enjoined violations by defendants of the Sherman Antitrust Act, 15 U.S.C. § 1 et seq. (1970). The court had, however, refused plaintiffs any damages on the ground that plaintiffs' conduct (in accepting the restrictions) had estopped them from claiming damages under the treble damages clause section of the Clayton Act, 15 U.S.C. § 15 (1970).
This court reversed as to the damage issue, holding that plaintiffs were not estopped and remanded the case to the District Court for trial of the damage issue. Gaines v. Carrollton Board of Trade, Inc., 386 F.2d 757 (6th Cir. 1967).
On remand the District Court took extensive testimony and found:
After a review of this lengthy record, we are convinced that the crucial findings of fact of the District Court quoted above are clearly erroneous and we reverse and remand for computation of damages.
The background of these appeals is fully set forth in this court's opinion in Gaines v. Carrollton Tobacco Board of Trade, supra, and in Bale v. Glasgow Tobacco Board of Trade, Inc., 223 F. Supp. 739 (W.D.Ky.1963), aff'd, 339 F. 2d 281 (6th Cir. 1964). A brief description of the tobacco marketing system is nonetheless essential to an understanding of this case.
Under Kentucky law tobacco is sold by growers and bought by the tobacco companies on certain established markets. These markets are controlled by Boards of Trade established under state law (K.R.S. § 248.015). Because the number of tobacco auctioneers and buyers is limited on each market, selling time (the period of actual auctioning of tobacco with all buyers in attendance) is customarily divided in Kentucky between the warehouses in the market on the basis of the percentage of each warehouse's floor space compared to total warehouse floor space in the market concerned.
In 1959, however, the Carrollton Tobacco Board of Trade adopted a resolution which limited any new warehouse entering the market to 20% of its normal selling time quota during the first year of operation, with that quota to be increased to 40%, 60%, 80% and 100% in succeeding years.
In 1962 when the Gaines warehouse was built, protests against the 20% restriction led to amendment of the Carrollton Tobacco Board of Trade resolution so as to provide 40% of quota of selling time for a new warehouse in its first year of operation, followed by increases of 12% in each subsequent year until 100% was reached. As the District Judge pointed out, since this resulted in lower quotas in the later years, it was hardly less restrictive than the original resolution.
Contrary to the findings of the District Judge quoted above, we believe that this record discloses that plaintiffs clearly suffered damages in both years at issue and that the record affords a basis for computation of those damages.
First, this record demonstrates conclusively that the specific purpose of the restrictions upon new warehouse operations imposed by the Carrollton Tobacco Board of Trade was to prevent competition. What District Judge Swinford said concerning a similar regulation at the Glasgow tobacco market was equally applicable to Carrollton :
Bale v. Glasgow Tobacco Board of Trade, Inc., 223 F. Supp. 739, 745-746 (W.D.Ky.1963).
Second, the Carrolltown Tobacco Board of Trade amended resolution which governed selling practices during the two years at issue herein, limited plaintiffs' new warehouse to 40% of its normal quota (based on ratio of its warehouse floor space to the total floor space of all warehouses in the market) in the first year of operation, followed by 52%, 64%, 76%, 88%, and 100% in the succeeding years. The severity of this restriction serves to argue strongly as a matter of common sense that some damage must have resulted.
Third, the antitrust violation involved in the Carrollton Tobacco Board of Trade amended resolution is of the per...
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...AHSC's anticompetitive acts would have garnered a larger share of the sales to VHA hospitals. See also, Gaines v. Carrollton Tobacco Board of Trade, Inc., 496 F.2d 284 (6th Cir. 1974), where plaintiff's more successful experience at a location free of unlawful restrictions was found to be e......
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...pricing levels prior to the impact of the violation with pricing levels subsequent to it. See, e.g., Gaines v. Carrollton Tobacco Board of Trade, Inc., 496 F.2d 284, 286 (6th Cir.1974) ("detailed comparisons of the sales of the [plaintiff] in the two years operated [during period of alleged......
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