Haverhill Gazette Company v. Union Leader Corporation

• Decision Date: 08 June 1964
• Docket Number: No. 6175,6191.,6175
• Parties: The HAVERHILL GAZETTE COMPANY, Appellant, v. UNION LEADER CORPORATION, Appellee. UNION LEADER CORPORATION, Appellant, v. The HAVERHILL GAZETTE COMPANY, Appellee.
• Court: U.S. Court of Appeals — First Circuit

333 F.2d 798 (1964)

The HAVERHILL GAZETTE COMPANY, Appellant, v. UNION LEADER CORPORATION, Appellee.

UNION LEADER CORPORATION, Appellant, v. The HAVERHILL GAZETTE COMPANY, Appellee.

Nos. 6175, 6191.

United States Court of Appeals First Circuit.

June 8, 1964.

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Robert H. Goldman, with whom Frank Goldman, Lowell, Mass., Joseph F. Bacigalupo, Lawrence, Mass., and Goldman, Goldman & Curtis, Lowell, Mass., were on brief, for The Haverhill Gazette Co.

James M. Malloy and Ralph Warren Sullivan, Boston, Mass., with whom Malloy, Sullivan & Sullivan, Boston, Mass., was on brief, for Union Leader Corp.

Before HARTIGAN and ALDRICH, Circuit Judges, and GIGNOUX, District Judge.

ALDRICH, Circuit Judge.

These cross-appeals by the Haverhill Gazette Company (Gazette) and Union Leader Corporation (ULCo) from a final judgment in Gazette's favor following the confirmation of a master's report mark the third time this case has been before us. In Union Leader Corp. v. Newspapers of New England, Inc., 1 Cir., 1960, 284 F.2d 582, cert. den. 365 U.S. 833, 81 S.Ct. 747, 5 L.Ed.2d 744, we affirmed a decree granting an injunction against ULCo forbidding certain conduct in violation of sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2, but vacated the decree insofar as it granted relief in ULCo's favor. In In the Matter of Union Leader Corp., 1 Cir., 1961, 292 F.2d 381, cert. den. 368 U.S. 927, 82 S.Ct. 361, 7 L.Ed.2d 190, we affirmed the action of the district judge in charge of the case in refusing to disqualify himself in response to an affidavit of prejudice. Following this the district court referred the suit to a special master for a determination of the damages caused Gazette by ULCo's wrongful conduct. The master found single damages in the amount of $29,442. The court overruled Gazette's objections to the report and entered a judgment in Gazette's favor for $88,326 (the trebled amount) together with $60,000 as statutory attorneys' fees and $8,000 expenses. Gazette's appeal alleges the damage findings to have been grossly inadequate. ULCo appeals from the award of counsel fees. It also objects to the failure of the court to consider one of the grounds on which it claims that Gazette, or more exactly the purchaser of all of Gazette's common stock, Newspapers of New England, Inc.,¹ and others, were themselves guilty of violating sections 1 and 2 of the Sherman Act, and section 7 of the Clayton Act, 15 U.S.C. § 18. This opinion will be concerned only with Gazette's appeal.²

The facts, many of which were recited in detail in our first opinion, will be referred to in part as we proceed. The basic fact we now start with is that Gazette entered the damage hearing with comprehensive findings in its favor indicating serious and continuous illegal activity of many sorts by ULCo over a period of years, and "stupendous losses," whether or not as a result of ULCo's wrongdoing, and wound up with a finding of damages in an amount of comparative insignificance.³ Gazette contends, inter alia, that this resulted from the master's erroneously "compartmentalizing" the issues, citing Continental Ore Co. v. Union Carbide & Carbon Corp., 1962, 370 U.S. 690, 82 S.Ct. 1404, 8 L.Ed.2d 777, and placing too severe a burden upon it as to each item and, further, by disregarding the findings of the district court. ULCo, on the other hand, takes the position that the findings of the master are to be accepted unless plainly wrong, and that they were not.

Because it has an important bearing on precisely what was before the master and the scope of the inquiry open to him, we must consider the prior proceedings with some particularity. At the time of the referral the posture of the case was superficially usual, but actually highly unusual. The issues initially tried to the court were stipulated to be "every issue pertinent to the granting or refusing of an injunction," and "every issue of liability." The trial, exclusive of substantial preliminaries, lasted two weeks. It resulted in an opinion containing a comprehensive summary of findings, pursuant to which the court entered a "Partial Final Decree." Consistent with the stipulation the decree recited,

"11. Pursuant to Rule 54 of the Federal Rules of Civil Procedure, 28 U.S.C., this Court expressly determines that there is no just reason for delay in entering final judgments on the following claims:

* * *.

all claims for injunctive and declaratory relief. * * *"

It thereupon entered "final judgments" with respect to all paragraphs of its order except the reserved damage claims. It added,

"However, if an appellate court should regard these orders not as final but as interlocutory, and if the parties would not have the benefit of the appeals available under 28 U.S.C. § 1292(a) (1), this Court, in accordance with 28 U.S.C. § 1292(b), is of the opinion that the orders in paragraphs 1, 2, 3, 4, 5, 8, 9, 10, and 11 involve a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation."

Our first opinion did not discuss the question whether, or to what extent, the partial decree was final or interlocutory. In its order of reference, following our affirmance, the district court stated, "The only issues now being left for adjudication relate to damages. These are precisely analogous to issues of damages which would be raised in patent, copyright, and like cases following an appellate adjudication on issues of liability. Such cases are customarily referred to a Master for the ascertainment of damages."

It is here that the difficulties, and they are serious, commence. Except for the sometime question of increasing the damages because of the nature of the infringement, 35 U.S.C. § 284 (a matter the statute reserves exclusively for the court in all cases), the issues of patent infringement and damages are separate and clear-cut. Although ascertainment of damages may involve difficult questions of apportionment, see, e. g., Gotham Silk Hosiery Co. v. Artcraft Silk Hosiery Mills, Inc., 3 Cir., 1945, 147 F.2d 209, cert. den. 293 U.S. 595, 55 S.Ct. 109, 79 L.Ed. 688, there is no overlapping of the issues determined by the court, finally, 28 U.S.C. § 1292(a) (4), and those referred. In a private antitrust action liability and damages are not separate. Granting that an injunction may require a finding of merely threatened loss, 15 U.S.C. § 26, a partial decree on all issues of liability, however considered, implies much more. One cannot think of private liability for violation of the antitrust laws except in terms of impact and damage.⁴ See, e. g., Stearns v. Tinker & Rasor, 9 Cir., 1958, 252 F.2d 589, 605-606, cert. den. 350 U.S. 830, 76 S.Ct. 62, 100 L.Ed. 741; Freedman v. Philadelphia Terminals Auction Co., 3 Cir., 1962, 301 F.2d 830, cert. den. 371 U.S. 829, 83 S.Ct. 40, 9 L.Ed.2d 67; Foster & Kleiser Co. v. Special Site Sign Co., 9 Cir., 1936, 85 F.2d 742, 750, cert. den. 299 U.S. 613, 57 S.Ct. 315, 81 L.Ed. 452; Glenn Coal Co. v. Dickinson Fuel Co., 4 Cir., 1934, 72 F.2d 885, 887. Indeed, the district court itself, in its opinion confirming the report, stated that its original judgment had "determined" that ULCo's "invasion of Gazette's rights caused Haverhill Gazette to suffer damages." The master at one point had recognized this determination, stating that a certain finding "embodied a conclusion by the District Judge that the wrongful acts of ULC inflicted some substantial damage upon the Gazette." Yet although this was what the master said the court had found, and what the court agreed it had found, we discover that in its original opinion the court said that it was "not concerned with the assessment of damages, if any." The master, with similar ambivalence, stated that the reference permitted him full latitude to determine "the precise nature and scope of the damage," and a careful study of his report reveals that this meant to him, too, "damage, if any."⁵

Thus we have the situation of the district court's entering not merely a permanent injunction, but a decree of liability which it labelled final, following an apparent finding of damage which, legally, would seem a necessary prerequisite. Yet at the same time the master was thought free to find the damage, if any, untrammelled by what went before to the point, as the court put it in its opinion confirming the report, of making an "independent and fresh appraisal on factual issues of causation and damages." Indeed, so "independent" was the master that the court held that while "he reached findings which do not square with statements made by this Court and by the Court of Appeals," his findings must be accepted unless "clearly erroneous." However, there had become applicable, if the decree of liability is to be considered final, the principle of collateral estoppel, Partmar Corp. v. Paramount Pictures Theatres Corp., 1954, 347 U.S. 89, 74 S.Ct. 414, 98 L.Ed. 532, making, in effect, conclusive as between the parties the "essential," Yates v. United States, 1957, 354 U.S. 298, 336, 77 S.Ct. 1064, 1 L.Ed. 2d 1356; prior findings. The Evergreens v. Nunan, 2 Cir., 1944, 141 F.2d 927, 152 A.L.R. 1187; 65 Harv.L.Rev. 818, 842-43.

Enough has been said to demonstrate that at least insofar as the court's partial decree is regarded as final there are serious internal conflicts. While aspects of the decree must be accorded finality we think it preferable under the circumstances to consider the decree of liability as merely interlocutory. This is the usual rule when liability is determined separately; a decree of liability which excludes damages is normally not a final decision. The Palmyra, 1825, 10 Wheat. 502, 6 L.Ed. 375; Craighead v. Wilson, 1855, 18 How. 199, 15 L.Ed. 332; McGourkey v. Toledo & Ohio C. Ry., 1892, 146 U.S. 536, 13 S.Ct. 170, 36 L.Ed. 1079; 6 Moore, Federal Practice ¶ 54.13 at...