McGuire v. Times Mirror Company, CV 75-3612-AAH.

• Decision Date: 08 December 1975
• Docket Number: No. CV 75-3612-AAH.,CV 75-3612-AAH.
• Citation: McGuire v. Times Mirror Company, 405 F.Supp. 57 (C.D. Cal. 1975)
• Court: U.S. District Court — Central District of California
• Parties: Charles McGUIRE et al., Plaintiffs, v. The TIMES MIRROR COMPANY, etc., et al., Defendants.

405 F. Supp. 57

Charles McGUIRE et al., Plaintiffs, v.The TIMES MIRROR COMPANY, etc., et al., Defendants.

No. CV 75-3612-AAH.

United States District Court, C. D. California.

December 8, 1975.

Law Office of G. Joseph Bertain, Jr. by Timothy H. Fine, San Francisco, Cal., and Simon & Sheridan by James J. Coyle and Donald B. Bachrach, Los Angeles, Cal., for plaintiffs.

Gibson, Dunn & Crutcher by John J. Hanson, and Donald L. Zachary, and William A. Niese, Los Angeles, Cal., for defendants.

FINDINGS OF FACT AND CONCLUSIONS OF LAW DENYING PRELIMINARY INJUNCTION

HAUK, District Judge.

Plaintiffs' motion for Preliminary Injunction came on for hearing on November 24, 1975.In support of their motion, plaintiffs filed over 600 pages of memoranda and affidavits while defendant the Times Mirror Company("Times Mirror") filed 158 pages of memoranda and affidavits in opposition, as well as a 226 page Appendix devoted to the issue of the Fair Trade laws.In addition, plaintiffs took the depositions of Messrs. Nelson, Clarke and Tiffany, representatives of Times Mirror, on November 5, 6 and 7, 1975, and the transcripts of these depositions, totaling 390 pages, were filed by plaintiffs.At the hearing on their motion, plaintiffs requested the opportunity to present testimony which request was granted.Plaintiffs presented seven witnesses and several exhibits in support of their motion, while Times Mirror offered the testimony of one witness in rebuttal.The testimony was presented over the period of one and one-half days.Plaintiffs presented several hours of oral argument, and Times Mirror argued in opposition.The transcript of the hearing covers approximately 425 pages.

Having considered all of the foregoing, and pursuant to Rule 52 of the Federal Rules of Civil ProcedureandRule 7 of the Rules of the Central District of California, the Court makes the following Findings of Fact and Conclusions of Law which respect to the motion of plaintiffs for a preliminary injunction.

FINDINGS OF FACT

1.Plaintiffs are independent contractors engaged in the purchase, distribution and sale of the Los Angeles Times ("The Times") pursuant to the terms and conditions of written Dealer Agreements with defendantThe Times Mirror Company.PlaintiffCharles McGuire, John S. Zinn, Wayne S. Stanford, Robert O. Ahlstrom, Gordon P. Palaro, Norbert A. Zytowski, Daniel Pawlowski, Steve Rajcic, Thomas D. Stoddard, Jr., Joseph Matranga, Warren Ropp, Jesse L. Tolton, Floyd W. McKinsey, Rudolph C. DeLuna, W. H. Hopkins, James C. Dennis, James N. Hopkins, Warren H. Churchill, Michael Maleta, Richard M. Williams, Robert C. Lewis, Kenneth Carrington, Richard Kramer, Melvin R. Stern, Richard Bishop, Thomas O. Schlotfeldt, Edward P. Palkovic and Norman E. Johannes are presently, and have been during the four years preceding the filing of the First Amended Complaint for Preliminary and Permanent Injunctive Relief and Damages Under the Antitrust Laws of the United States of America and Demand for Jury Trial("First Amended Complaint") engaged in the purchase, distribution and resale of The Times to home delivery subscribers pursuant to terms and conditions of a written Home Delivery Dealer Agreement.Plaintiffs McGuire, Palaro, McKinsey, DeLuna, W. H. Hopkins and James C. Dennis are parties to a Home Delivery Dealer Agreement of the from attached to the First Amended Complaint and marked as Exhibit A.The remaining Home Delivery Dealer plaintiffs are parties to a Home Delivery-Dealer Agreement of the form attached to the First Amended Complaint and marked as Exhibit B. PlaintiffsRichard M. Kemp, Jr., Brian D. Gruber, Charles P. White, Paul Jimenez, James D. O'Keefe, Irving Levy, David Waring, Horace W. Howland, Robert W. Ash, Paul L. Bluff, Angelo J. Masi, Steven Z. Krstich, Abraham Baron, Robert Cohen, Edgar G. Barclift, Leon F. Martinez and Charles C. Conn are presently, and have been during the four years preceding the filing of the First Amended Complaint, engaged in the purchase, distribution and resale of The Times to retail outlets (such as drugstores, markets, newsstands and motels), purchasers from newsracks and newsvendors pursuant to the terms and conditions of a written Street Sale Dealer Agreement with Times Mirror identical or similar to the form attached to the First Amended Complaint and marked as Exhibit C.

2.Times Mirror is and has been at all material times a corporation organized and existing under the laws of the State of California with its principal place of business in the City and County of Los Angeles, California.Times Mirror prints and publishes daily and Sunday the Los Angeles Times.

3.The Times is currently distributed by Times Mirror through two separate distribution systems.Under one system, Times Mirror sells the home delivery editions of The Times to Home Delivery Dealers, including plaintiffs, who resell to home delivery subscribers and other single copy purchasers.Home delivery subscribers constitute approximately 75% of the total circulation of The Times.Under the other system, Times Mirror sells the street sale editions of The Times to Street Sale Dealers, including plaintiffs, who distribute the paper to the public in one of two ways.Most street sale papers are sold to individual purchasers through newsracks, while the remainder are sold to various retail outlets and newsvendors for resale to single copy purchasers.

4.All Home Delivery and Street Sale Dealers distribute The Times pursuant to the rights granted by written agreements between themselves and Times Mirror.Each of those agreements contains a provision which requires the dealer to sell The Times to his customers at a price which does not exceed the maximum price stipulated by Times Mirror pursuant to the California and Federal Fair Trade laws.

5.Times Mirror is in free and open competition with similar commodities of the same general class produced by others.Approximately 85% of the circulation of The Times is in Los Angeles and Orange Counties, and all of the plaintiffs except one distribute the paper within those two counties.Twenty daily newspapers, in addition to The Times, are published in Los Angeles and Orange Counties.In addition, over 100 weekly, semi-weekly and control distribution newspapers, including ethnic and religious publications, are also published and either sold or delivered at no cost in Los Angeles and Orange Counties.Moreover, three "national" newspapers, The Wall Street Journal, The Christian Science Monitor and The New York Times are sold daily in these two counties, with The New York Times having Sunday editions as well.The daily papers published in Los Angeles and Orange Counties are significant competitors to The Times, as are the numerous electronic and print media which originate in the area.While no single daily newspaper has a circulation which equals that of The Times, in the aggregate these daily newspapers have a weekday circulation of approximately 1,231,710 and a Sunday circulation of approximately 1,052,374.It should be added that although The Times is the dominant weekday and Sunday newspaper among newspapers published in Los Angeles and Orange Counties the relevant market, with 46% of week-day, 54% of Sunday and 84% of morning newspapers published in this market, nevertheless its circulation is less than the total circulation of all newspapers distributed and sold weekly and Sunday in this market.

6.Under the Federal and State Fair Trade laws, Times Mirror is the publisher of a commodity which bears the trademark, brand or name of its producer and which is in free and open competition with similar commodities of the same general class produced by others.Times Mirror is therefore free to stipulate the maximum price at which The Times is resold by its dealers, including plaintiffs.

7.In the distribution of The Times, Times Mirror and its Home Delivery and Street Sale Dealers perform entirely separate functions.Times Mirror is the publisher of the paper.It prepares and prints over 1,000,000 copies of the newspaper daily and in excess of 1,200,000 on Sunday.It has agreements with 232 Home Delivery Dealers, including plaintiffs, in the greater Los Angeles metropolitan area.These Home Delivery Dealers each distribute approximately 2,800 newspapers each day to individual subscribers.Times Mirror transports the newspaper to a designated point and delivers them to the Home Delivery Dealer.The latter employs approximately 15 persons who physically deliver the newspaper to subscribers' homes, apartments, etc.Times Mirror also has agreements with 82 Street Sale Dealers, including plaintiffs, in the greater Los Angeles metropolitan area.Each Street Sale Dealer sells about 2,500 papers daily and about 3,800 on Sunday.Each Street Sale Dealer employs approximately eight persons, who deliver the newspaper to retail outlets, newsracks and newsvendors.These retail outlets and newsvendors sell single copies of the paper to individuals.

8.The Home Delivery Dealer performs the function of delivering the newspaper to homes, apartments, etc., daily and Sunday on a monthly subscription basis.The Home Delivery Dealer is not engaged in the business of selling newspapers to Street Sale Dealers, retail outlets and newsvendors, but in a few instances Home Delivery Dealers did make sales to the latter street Sale Vendors, retail outlets and newsvendors by "bootlegging" the same in violation of their agreements with The Times.

9.The Street Sale Dealer performs the function of selling and delivering the newspaper to stores, newsracks and newsvendors.The Street Sale Dealer is not engaged in the business of selling and delivering newspapers to homes, apartments, etc., on a monthly subscription basis, but in a few instances Street Sale Dealers did make sales to Home Delivery Dealers by "bootlegging" the same in violation of their agreements with The Times.

10.Times Mirror is not functionally on the...