Jerrold Electronics Corp. v. Wescoast Broadcasting Co., 19343.
| Decision Date | 01 March 1965 |
| Docket Number | No. 19343.,19343. |
| Citation | 341 F.2d 653 |
| Parties | JERROLD ELECTRONICS CORPORATION and Jerrold-Northwest, Inc., Appellants, v. WESCOAST BROADCASTING COMPANY, Inc., a Washington corporation, d/b/a KPQ Radio, Appellee. |
| Court | U.S. Court of Appeals — Ninth Circuit |
COPYRIGHT MATERIAL OMITTED
Israel Packel, Fox, Rothschild, O'Brien & Frankel, Philadelphia, Pa., Paul Fetterman, Helsell, Paul, Fetterman, Todd & Hokanson, Seattle, Wash., for appellants.
Charles S. Burdell, Thomas J. Greenan, Ferguson & Burdell, Seattle, Wash., G. Joseph Bertain, Jr., San Francisco, Cal., for appellee.
Before CHAMBERS, POPE and KOELSCH, Circuit Judges.
This is a private antitrust action wherein the plaintiff Wescoast Broadcasting Company, Inc., alleged that the defendants Jerrold Electronics Corporation and Jerrold-Northwest, Inc., had been guilty of violations of §§ 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 and 2.1 After trial the jury returned a verdict in favor of the plaintiff assessing plaintiff's damages in the sum of $97,500 which was trebled, and judgment, including an award of $32,500 as attorneys' fees, was awarded plaintiff in the sum of $325,000. The defendants have perfected this appeal from that judgment.
About the end of 1950 Jerrold Electronics Corporation (here called Jerrold) began the manufacture and sale of community television antenna systems. The parties stipulated that the following is a description of the nature and purpose of such systems. It was also stipulated that Jerrold manufactured and sold such systems in interstate commerce throughout the United States.
By July, 1953, somewhere between two-thirds and four-fifths of all such systems in the United States were supplied exclusively with Jerrold equipment. At that time, which is the time relevant to this controversy, Jerrold had thus become a dominant figure in the manufacture of such community antenna systems. One feature of the Jerrold system was a component known as its AGC (automatic gain control) device. This component, during the time hereafter referred to, was as a practical matter essential to the construction of a fully effective antenna system. It was not obtainable elsewhere.2
In selling its systems Jerrold had followed a general policy under which none of its equipment would be sold to a community television antenna operator unless the buyer agreed to purchase all of the equipment of his system from Jerrold. The buyer was also required as a condition of such purchase to enter into a service contract with Jerrold. This contract provided that Jerrold would perform engineering services with respect to the layout, installation and operation of the system, for which services it was to receive fixed sums and installment payments payable out of the income receipts of the system operator.3 Distribution of Jerrold equipment in the Northwest (Washington, Oregon, Idaho and Western Montana) was handled through Jerrold-Northwest, Inc., here called Jerrold-Northwest. Sixty-five percent of the stock ownership of Jerrold-Northwest was in the control of Jerrold. The remainder of said stock was owned by Phillip D. Hamlin and Ron Merritt who were officers of the company. Shapp, president of Jerrold, was president of Jerrold-Northwest.4 Elsewhere throughout the United States similar subsidiary corporations were established for the purpose of controlling the distribution of Jerrold's manufactured equipment and components.
In 1952 a television broadcasting station was established at Spokane, Wash. In consequence of this it became feasible to operate a community antenna system at Wenatchee, Washington, and early in 1953, Wescoast Broadcasting Company, Inc., (here called Wescoast) prepared to establish such a system at Wenatchee. At that time Wescoast was operating a radio station at Wenatchee using the call letters KPQ. James W. Wallace, a stockholder, was president of Wescoast, and Rogan Jones of Bellingham, Wash., was the majority stockholder. Jones had constructed a community television antenna system at Bellingham which was then in operation. In anticipation of the establishment of the Wenatchee system, Wescoast contacted Video Associates, predecessor of Jerrold-Northwest, the distributors of Jerrold equipment, for the purpose of procuring Jerrold equipment and components for its Wenatchee system.
At first Wescoast received a communication from the distributor indicating its willingness to supply the complete Jerrold system. This was by a letter dated February 16, 1953. Wescoast submitted a purchase order for this equipment. While this order was waiting to be filled, Merritt was in the East having a conference with Shapp, president of Jerrold. Shapp and Merritt discussed among themselves and also with representatives of J. H. Whitney & Co., here called Whitney, of New York, the possibility of putting into effect in the Northwest area an arrangement which Shapp had made with Whitney in March, 1952. The matter was also discussed at the same time, by telephone, with Hamlin, with one Brown, representing Whitney, and one Tucker, representing Jerrold. At that March, 1952, date, Shapp had proposed to Whitney that the latter assist in the development of community television antenna systems in a number of different sections of the country. The agreement was that Shapp, representing Jerrold, and Whitney would mutually agree upon a list of communities in which the establishment of such systems appeared to be feasible. Whitney would pay for preliminary surveys and field tests; Shapp would assist in the survey and prepare reports, and then Whitney would decide whether to proceed with an installation of a system in a given community. If such a decision were made Whitney would cause a corporation to be organized to install and operate the system. In that event Whitney would supply the necessary funds to finance the system, Whitney and its associates would acquire a 75% common stock interest in the corporation, and Shapp and his associates would receive a 25% common stock interest. The agreement was to cover the entire United States with the exception of the State of Maine.
This was the investment plan which Shapp and Merritt and the others mentioned discussed while the Wescoast order for the Jerrold equipment was still pending and not yet filled. In that discussion Merritt, the Whitney interests, Shapp and Hamlin considered a program whereby they would make a survey of some 12 to 15 communities in the Northwest with a view to carrying out the Shapp-Whitney plan. Hamlin, Brown and Tucker then proceeded to make surveys of certain towns in Idaho, Washington and Oregon. It was ascertained that Whitney was interested in certain towns in Idaho and Washington, including the town of Wenatchee.5
The trip of Merritt to the East, during which these conversations and discussions occurred, took place in March, 1953. It would appear to be significant then that on March 31, 1953, Hamlin, on behalf of Video Associates, which, it will be recalled, had received Wescoast's purchase order for Jerrold community antenna system equipment, wrote to Wescoast referring to that order and advising the latter that although Hamlin's concern had already scheduled this material to be shipped direct from the Jerrold factory, Hamlin had recently received information from Jerrold having a direct bearing on the order and upon any subsequent orders that Wescoast might make which would prevent the delivery of this equipment as per the order. In this letter Wescoast was informed that Jerrold offered in conjunction with all of their community antenna installations a comprehensive service contract of the character which we have previously described, and that Jerrold would not sell any of their equipment except in connection with such a service contract. Hamlin stated that he did not propose to debate with Wescoast the question of the latter's fitness to install the equipment without such a service arrangement but that since the condition on sales was imposed by Jerrold the order could not be filled.6
Simultaneously Merritt sent a copy of the letter, also dated March 31, 1953, which began as follows: 7
It seems plain that these letters furnish a key to what Hamlin, Merritt and Jerrold were up to. As stated in the letter of transmission to...
To continue reading
Request your trial
-
State v. Woolcock
...the jury is again fully instructed at the close of the proceedings. United States v. Ruppel, supra; Jerrold Electronics Corporation v. Wescoast Broadcasting Co., 341 F.2d 653 (9th Cir.), cert. denied, 382 U.S. 817 [86 S.Ct. 42, 15 L.Ed.2d 64] (1965)." 9 Report of the Committee on Juries of ......
-
Telex Corp. v. International Business Machines Corp.
...187 F.Supp. 545 (E.D.Pa.1960), aff'd per curiam, 365 U.S. 567, 81 S.Ct. 755, 5 L.Ed.2d 806 (1961). Cf. Jerrold Electronics Corp. v. Wescoast Broadcasting Co., 341 F.2d 653 (9th Cir.), cert. denied, 382 U.S. 817, 86 S.Ct. 42, 15 L.Ed.2d 64 (1965); City Sportservice, Inc. v. Charles O. Finley......
-
Brown v. AVEMCO Inv. Corp.
...(9th Cir. 1955); and Bercut v. Park, Benziger & Co., 150 F.2d 731, 734 (9th Cir. 1945).3 See, e. g., Jerrold Electronics Corp. v. Wescoast Broadcasting Co., 341 F.2d 653, 666 (9th Cir.), Cert. denied, 382 U.S. 817, 86 S.Ct. 42, 15 L.Ed.2d 64 (1965); R. H. Baker & Co. v. Smith-Blair, Inc., 3......
-
Byre v. City of Chamberlain
...themselves legal lose that character when they become constituent elements of an unlawful scheme." Jerrold Electronics Corp. v. Wescoast Broadcasting Co., 341 F.2d 653, 663 (9th Cir.1965) (citations omitted). The jury determined that a plan or scheme to run Byre out of business existed and ......
-
Presenting Technical Material to a Jury
...Last?" 48 ABA Journal (1960), p. 1066. 14. 463 F. Supp. 983 (D. Conn. 1978). 15. Jerrold Electronics Corp. v. Westcoast Broadcasting Co., 341 F.2d 653, 66, (9th Cir.), cert denied, 382 U.S. 817 (1965). 16. 587 F.2d 151 (4th Cir. 1978). 17. See also, Cavendish v. Sunoco Service of Greenfield......