Moore v. Jas. H. Matthews & Co.

Decision Date29 July 1982
Docket Number80-3217,Nos. 80-3180,s. 80-3180
Citation682 F.2d 830
Parties1982-2 Trade Cases 64,876 Arie Mack MOORE, Evanell E. Moore, Alfred L. Paulson and Mary E. Paulson, doing business as Eugene Granite & Marble Works, Plaintiffs-Appellees and Cross-Appellants, v. JAS. H. MATTHEWS & CO., et al., Defendants, and Rest Haven Memorial Association, West Lawn Memorial Park, Lane Memorial Gardens and Fir Grove Cemeteries Co., Defendants-Appellants and Cross-Appellees.
CourtU.S. Court of Appeals — Ninth Circuit

Laurence Hummer, Latham & Watkins, Los Angeles, Cal., for American cemetery.

George L. Wagner, Portland, Or., argued, for Rest Haven Memorial; Spears, Lubersky, Campbell & Bledsoe, Portland, Or., on brief.

Jonathan T. Howe, Chicago, Ill., for amicus curiae Monument Bldg.

Edward R. Fechtel, Husband, Johnson, Fechtel & Goff, Eugene, Or., Roger G. Tilbury, Portland, Or., for Moore.

Appeal from the United States District Court for the District of Oregon.

Before PREGERSON and BOOCHEVER, Circuit Judges, and HALBERT, * Senior District Judge.

BOOCHEVER, Circuit Judge:

This is the third time this private antitrust action involving the sale and installation of grave markers has come before this court. We conclude that the district court's decision on the installation tying claim is contrary to the law of the case and that the awards for damages and attorney fees were based on improper considerations without support in the record. Accordingly, for the third time, we reverse and remand for further proceedings.

I Background

The action began in 1969 when Eugene Granite & Marble Works (EGM), Oregon's oldest retailer and installer of grave markers (a/k/a memorials and monuments), sued eight large "endowment care" cemeteries 1 in Lane County, Oregon and Jas. H. Matthews & Son, a national manufacturer of grave markers. EGM alleged that the defendants violated sections 1 and 2 of the Sherman Act and section 3 of the Clayton Act by monopolization, attempted monopolization, refusal to deal, conspiracy, and two tie-ins. The tying claims stemmed from the cemeteries' requirements that a purchaser of a cemetery lot buy a grave marker only from the cemetery where the lot is purchased (sales tie), and that the marker be installed only by the cemetery where the lot and marker are purchased (installation tie). 2

The district court granted defendants summary judgment on all counts. This court reversed and remanded the case for trial. Moore v. Jas. H. Matthews & Co., 473 F.2d 328 (9th Cir. 1973) ("Moore I ").

At the conclusion of the liability portion of the bench trial, the district court again entered judgment for all defendants on all counts. This court affirmed the district court's judgment on the monopolization, attempted monopolization, refusal to deal, and conspiracy counts, and as to the dismissal of defendant Jas. H. Matthews & Co., but again reversed the district court on both of EGM's tie-in claims. Moore v. Jas. H. Matthews & Co., 550 F.2d 1207 (9th Cir. 1977) ("Moore II "). We concluded that "separate products and services are involved in each of the tying arrangements" and that the district court "erred as a matter of law" in upholding the cemeteries' quality control justification for the ties. 550 F.2d at 1215, 1218. We vacated the judgment on EGM's tie-in claims and remanded for further proceedings.

Following Moore II, three of the eight cemeteries settled with EGM and thereafter allowed EGM to sell and install markers on their properties. EGM and the remaining five cemeteries again went to trial on the tie-in claims.

The district court granted EGM judgment on the sales tying claim, but again held for the cemeteries on the installation claim. The district court found that the exclusive installation requirement was not an illegal tie because only a single product or service was involved. Having determined that installation was a part of a single product or service, the district court reasoned that the cemeteries' "justification defense" need not be discussed. Nevertheless, "for purposes of clarity," the court went on to state that the cemeteries' justification defense was meritorious because "installation guidelines simply would not work under the circumstances of this case."

The district court initially awarded EGM $31,128 in untrebled damages, but no costs or fees, and permanently enjoined defendants from engaging in the marker-sales tying practice. Both sides then moved to amend the judgment. The district court reopened proceedings, heard additional evidence, and issued a second decision awarding costs, trebled damages of $196,437, and attorney fees of $231,450.

Four of the five cemeteries affected by the judgment appeal, contending that the damage award was not supported by substantial evidence and that the award for attorney fees constituted an abuse of discretion because it was made without an adequate evidentiary record. EGM cross-appeals, claiming that the district court erred by rejecting the installation tying claim and that the awards for damages and fees were inadequate.

II Law of the Case

The "law of the case" rule ordinarily precludes a court from re-examining an issue previously decided by the same court, or a higher appellate court, in the same case. See IB Moore's Federal Practice, 0.404(1), at 404-09 (2d ed. 1980). See also In re Staff Mortgage & Investment Corp., 625 F.2d 281, 282-83 (9th Cir. 1980); Adamian v. Lombardi, 608 F.2d 1224, 1228 (9th Cir. 1979), cert. denied, 446 U.S. 938, 100 S.Ct. 2158, 64 L.Ed.2d 791 (1980). The law of the case principle is analogous to, but less absolute a bar than, res judicata. Moore's Federal Practice, supra, at 404-09. Although the law of the case rule does not bind a court as absolutely as res judicata, and should not be applied "woodenly" when doing so would be inconsistent with "considerations of substantial justice," 3 the discretion of a court to review earlier decisions should be exercised sparingly so as not to undermine the salutory policy of finality that underlies the rule. See Lathan v. Brinegar, 506 F.2d 677, 691 (9th Cir. 1974) (en banc); United States v. Fullard-Leo, 156 F.2d 756, 757 (9th Cir. 1946). The Fifth Circuit has aptly summarized the rule as follows:

While the "law of the case" doctrine is not an inexorable command, a decision of a legal issue or issues by an appellate court establishes the "law of the case" and must be followed in all subsequent proceedings in the same case in the trial court or on a later appeal in the appellate court, unless the evidence on a subsequent trial was substantially different, controlling authority has since made a contrary decision of the law applicable to such issues, or the decision was clearly erroneous and would work a manifest injustice.

White v. Murtha, 377 F.2d 428, 431-32 (5th Cir. 1967).

In Moore II, we vacated the judgment against EGM on the tie-in claims, and originally remanded the case "for further proceedings consistent with this opinion." In denying the cemeteries' petition for rehearing and rehearing en banc, however, the court amended the remand language to read: "the case is remanded for further proceedings and factual determinations consistent with the standards articulated in this opinion." 550 F.2d at 1220. (Emphasized language was added by the amendment.)

The district court believed that prior to being amended, Moore II "left only the amount of damages and some sort of injunctive relief" for determination on remand. It evidently considered, however, that the amendment to Moore II somehow expanded the scope of remand to require having all the tying issues fully relitigated.

The district court's interpretation of our remand was erroneous and its disposition of the installation tying claim was directly contrary to Moore II. Review of the eight-page discussion of tying in Moore II indicates that the district court's alternative grounds for rejecting the installation tying claim were not among the "matters left open by the mandate of this court." Quern v. Jordan, 440 U.S. 332, 347, 99 S.Ct. 1139, 1148, 59 L.Ed.2d 358 n. 18 (1979). The only issues left for determination by Moore II were on damages, attorney fees, and, as indicated in note 4, infra, the ties' effect on interstate commerce in the tied market. We believe that it was with these issues in mind that the court amended its remand.

We commenced our discussion of tying in Moore II by noting that both the sales and the installation tying claims were under consideration and that all four cemeteries involved in the present (third) appeal engaged in both practices. 550 F.2d at 1212. The court noted that the first question under tying analysis 4 is whether there are "separate and distinct products or services tied into a single package." Id. at 1214. After a lengthy analysis of the applicable case law, we concluded that:

An application of the factors in (Fortner Enterprises, Inc. v. United Steel Corp., 394 U.S. 495, 89 S.Ct. 1252, 22 L.Ed.2d 495 (1969) ) Fortner I and our consideration of the "function of the aggregation" leads inescapably to the conclusion that separate products and services are involved in each of the tying arrangements before us.

Id. at 1215 (emphasis added).

We later noted that, "(i)n addition to their contention that only a single product is involved here, (the cemeteries) offer (two) justifications for the tying arrangements." Id. at 1217. The first justification was a "goodwill and quality control argument," and the second justification was a "regulated industry (state action) defense." Id. at 1217, 1218. The court expressly rejected both justifications, noting, in regard to the first justification, that the cemeteries' legitimate concerns about quality and customer goodwill could be adequately maintained by specifications. 550 F.2d at 1217. Any doubt about our holding on the justification issue should have ended with our statement that the district court...

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