Glenn Coal Co. v. Dickinson Fuel Co.

• Decision Date: 02 October 1934
• Docket Number: No. 3664.,3664.
• Citation: 72 F.2d 885
• Parties: GLENN COAL CO. v. DICKINSON FUEL CO. et al.
• Court: U.S. Court of Appeals — Fourth Circuit

72 F.2d 885 (1934)

GLENN COAL CO. v. DICKINSON FUEL CO. et al.

No. 3664.

Circuit Court of Appeals, Fourth Circuit.

October 2, 1934.

George Poffenbarger, of Charleston, W. Va. (A. A. Lilly, Lilly & Lilly, and Poffenbarger & Poffenbarger, all of Charleston, W. Va., on the brief), for appellant.

Robert S. Spilman, of Charleston, W. Va. (Hawthorne D. Battle and Price, Smith & Spilman, all of Charleston, W. Va., on the brief), for appellees.

Before NORTHCOTT and SOPER, Circuit Judges, and CHESNUT, District Judge.

CHESNUT, District Judge.

The appellant in this case, as plaintiff in the district court, brought a civil suit at law against the defendants to recover three-fold damages alleged to have been sustained by violation of the Sherman Anti-Trust Act (15 USC § 15, 15 USCA § 15 and note). A demurrer to the declaration was sustained with leave to the plaintiff to amend; and after an amendment not deemed to substantially alter the nature of the case, the demurrer was again sustained. The plaintiff declined to further amend and judgment went for the defendants, from which this appeal has been taken.

The only question here is whether the amended declaration, consisting of a single count extending over twelve pages of the printed record, sufficiently states a cause of action under the statute. It is unfortunately prolix but, after analysis, the substance of the case as stated may be summarized as follows. It is alleged that the plaintiff, a West Virginia corporation, has been engaged since September 1, 1920, in mining and selling in interstate commerce bituminous coal produced from the "Black Band seam of coal, one of the Kanawha measures and seams of coal, located in the well-developed, well-defined and extensively known Kanawha coal field of West Virginia," which was and had been for many years well and favorably known in the trade as "Black Band" coal, and by reason of its superior qualities generally commanded a market price somewhat larger than other bituminous coals; and that the defendant, the Black Band Consolidated Coal Co., also a West Virginia corporation, was likewise engaged during said period in producing and selling the same kind of coal in interstate commerce as a competitor of the plaintiff; and that another defendant, the Dickinson Fuel Company, likewise a West Virginia corporation, was the sales agent for the coal produced by the Black Band Company. In addition to the corporate defendants, two individuals were also named as defendants, one C. C. Dickinson, a citizen and resident of West Virginia, being the president of the Dickinson Fuel Company, and J. Edwin Horn, a nonresident, being the president of the Black Band Company. Of the four defendants only two, the Dickinson Fuel Company and C. C. Dickinson, its president, were summoned; and it does not appear why the Black Band Company, a West Virginia corporation, was not summoned. It is stated that the only other producer of this Black Band Coal was the Kanawha Black Band Coal Company, of West Virginia.

It is further alleged, in the language of sections 1 and 2 of the Anti-Trust Act (15 USC §§ 1, 2, 15 USCA §§ 1, 2) that the four named defendants on or about the 5th of June, 1923, and thereafter until the commencement of the suit, May 12, 1932, unlawfully combined and conspired, in restraint of trade, to monopolize and did monopolize and unlawfully control the market in the sale and price of said Black Band seam of coal in interstate commerce, and destroyed competition between the plaintiff and the Kanawha Black Band Coal Company, on the one hand, and the defendant, the Black Band Consolidated Coal Company on the other hand, in consequence of which the Black Band Company was enabled to sell its coal at a higher price than could have been obtained if the market had been free, and the plaintiff was injuriously affected to the extent that its own sales of coal during said period were lessened by 100,000 tons and it was compelled to sell at least 150,000 tons at a price of twenty-five cents per ton less than it was really worth, and thus lost $62,500. It is further alleged that the plaintiff suffered this loss because, by reason of the defendants' activities, it was not able to sell its coal as "Black Band" coal. The means by which the object of the conspiracy was effected is alleged to have been the illegal and unlawful procurement by the Black Band Consolidated Coal Company, with the connivance of the other defendants, of a United States trade mark, consisting of the words "Black Band" numbered 182,171, for the coal produced and sold by it, and thereafter threatened the plaintiff and its customers with suits for damages if the plaintiff's coal should be sold as "Black Band." It is further alleged that on November 20, 1923, while the application for the trade mark was "secretly pending" and its pendency was unknown to the plaintiff, the Dickinson Fuel Company took from the plaintiff an exclusive coal sales agency for the sale of its coal as "Black Band" coal and thereafter fraudulently and deceitfully and without the knowledge of the plaintiff, sold its coal not as "Black Band" coal as it had been sold and was being sold when said agency was taken, but as "Kanawha" coal or "Blue Ribbon" coal until January 10, 1924.

The question presented is whether the amended declaration discloses in substance a violation of the Anti-Trust Act by the defendants with consequent material injury to the plaintiff. The language of section 15, on which the action is based, is as follows:

"Any person who shall be injured in his business or property by reason of anything forbidden in the anti-trust laws may sue therefor in any district court of the United States in the district in which the defendant resides or is found or has an agent, without respect to the amount in controversy, and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney's fee."

To recover, the plaintiff must establish two things: (1) A violation of the Anti-Trust Act and (2) damages to the plaintiff proximately resulting from the acts of the defendant which constitute a violation of the Act. In a civil suit under this section, the gist of the action is not merely the unlawful conspiracy or monopolization or attempt to monopolize interstate commerce in the particular subject matter, but is damage to the individual plaintiff resulting proximately from the acts of the defendant which constitute a violation of the law. A mere conspiracy with intent to violate the law while it may be the basis of a valid indictment under the criminal sanction of the Anti-Trust Act, does not give rise to a personal civil suit for damages.

Thus it has been held in numerous federal decisions that in a civil suit under this special Act the declaration must allege facts from which the court can determine that there has been a violation of the Act with resultant damage proximately caused thereby to the plaintiff. In Alexander Milburn Co. v. Union Carbide & Carbon Corp. (C. C. A. 4) 15 F. (2d) 678, 680 (certiorari denied, 273 U. S. 757, 47 S. Ct. 459, 71 L. Ed. 876) this Court, by Judge Parker, said:

"For it is not sufficient that the declaration be framed in the words of the statute, or that it allege mere conclusions of the pleader. It must describe with definiteness and certainty the combination or conspiracy relied on, as well as the acts done which resulted in damage to plaintiff, and, in doing so, must set forth the substance of the agreement in restraint of trade, or the plan or scheme of the conspiracy, or the facts constituting the attempt to monopolize. 19 R. C. L. 87; Cilley v. United Shoe Mach. Co. (C. C.) 152 F. 726; Rice v. Standard Oil Co. (C. C.) 134 F. 464."

The same rule has been announced in other cases. Jack v. Armour & Co. (C. C. A. 8) 291 F. 741; Tilden v. Quaker Oats Co. (C. C. A. 7) 1 F.(2d) 160; Witherell & Dobbins Co. v. United Shoe Machinery Co. (C. C. A. 1) 267 F. 950; Corey v. Independent Ice Co. (D. C. Mass.) 207 F. 459; Dueber Watch Case Mfg. Co. v. E. Howard Watch & Clock Co. (C. C. S. D. N. Y.) 55 F. 851; Blumenstock Bros. Advertising Agency v. Curtis Pub. Co., 252 U. S. 436, 440, 40 S. Ct. 385, 386, 64 L. Ed. 649. Compare Albert Pick-Barth Co. v. Mitchell-Woodbury Corp., 57 F.(2d) 96 (C. C. A. 1).

In this case we must, therefore, carefully analyze the declaration to ascertain what act or acts of the defendants are alleged which amount to a violation of the law with consequent damage to the plaintiff. It is alleged in the declaration with much emphasis and repetition that the defendants unlawfully combined and conspired to violate the law, and to restrain and monopolize the trade and also that their acts were unlawful, fraudulent, deceptive and accompanied by the intent to violate the law. These are, however, only general allegations and in themselves no more than conclusions of the pleader in the absence of averment of specific acts of the defendants from which it can be determined as a matter of law whether the Act has in fact been violated with resultant damage to the plaintiff. Here we find that only two specific acts are set out consisting of (1) defendants' activities with respect to the allegedly deceitfully procured exclusive sales agency taken by the Dickinson Fuel Company from the plaintiff, and (2) the registration of the trade mark with threat of suit if infringed. As to the former, it appears its duration was limited to the period from November 20, 1923, until January 10, 1924, less than two months, and it terminated more than 8 years prior to the commencement of the suit. As the plaintiff is seeking to recover damages by virtue of the defendants' conspiracy for only five years (the period of limitations) preceding the institution of the suit, it seems obvious that the allegedly deceitfully procured and unfairly executed sales agency by the Dickinson Fuel Company could not possibly have been an effective cause of the...