Morning Pioneer, Inc. v. Bismarck Tribune Company

• Decision Date: 12 March 1974
• Docket Number: 73-1049.,No. 73-1036,73-1036
• Citation: 493 F.2d 383
• Parties: The MORNING PIONEER, INC., Appellant, v. The BISMARCK TRIBUNE COMPANY, a corporation, Appellee and Cross Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

493 F.2d 383 (1974)

The MORNING PIONEER, INC., Appellant, v. The BISMARCK TRIBUNE COMPANY, a corporation, Appellee and Cross Appellant.

Nos. 73-1036, 73-1049.

United States Court of Appeals, Eighth Circuit.

Submitted September 11, 1973.

Decided March 12, 1974.

Bruce B. Bair, Mandan, N. D., for appellant.

Daniel J. Chapman, Bismarck, N. D., for appellee.

Before HEANEY, STEPHENSON and WEBSTER, Circuit Judges.

HEANEY, Circuit Judge.

This appeal arises out of a private antitrust suit between the publishers of two daily newspapers in southwestern North Dakota. The Morning Pioneer, Inc., publishes a morning paper, "The Morning Pioneer," in Mandan. Seven miles away in Bismarck, an evening paper, "The Bismarck Tribune," is published by The Bismarck Tribune Company.

For several years, there was very little competition for circulation or advertising between the newspapers in their respective hometowns.¹ Consequently, the Pioneer's Bismarck circulation was very limited as was the Tribune's Mandan circulation. The papers entered into agreements under which virtually all national and some local advertising was solicited jointly for publication in both papers, and the proceeds were distributed to reflect relative shares of the total circulation — seventy-five percent to the Tribune and twenty-five percent to the Pioneer. In 1963, the management of the Tribune shifted to an aggressive publisher, and a Bismarck family with a printing background — the Conrads — purchased the Pioneer. The previous noncompetitive atmosphere was replaced by aggressive competition. Each paper initiated measures to increase its circulation and advertising in the other's hometown.

In August, 1969, the Pioneer brought this action, seeking damages and injunctive relief. It alleged that the Tribune's practice of selling its carrier-delivered newspapers for a lesser price in Mandan and elsewhere² than in Bismarck constituted price discrimination in violation of § 2(a) of the Clayton Act as amended by the Robinson-Patman Act.³ It also complained that the Tribune engaged in practices constituting an "attempt to monopolize" as prohibited by § 2 of the Sherman Anti-Trust Act⁴ by: (1) attempting to purchase the Pioneer; (2) cancelling the joint advertising agreements; (3) hiring Pioneer employees; (4) granting certain advertisers rates more favorable than the published rates to encourage advertising in the Tribune rather than the Pioneer; (5) giving premiums to new subscribers; (6) selling the Tribune for a lesser price in Mandan than in Bismarck; and (7) blanketing Mandan homes with free copies of the Tribune on numerous occasions.

The District Court held that three periods of blanketing had been of sufficient intensity to constitute an "attempt to monopolize" in violation of the Sherman Act, but that the other practices, considered individually or collectively, did not constitute such an attempt. It further held that the Clayton Act had not been violated. It denied injunctive relief but awarded the Pioneer nominal single damages of one dollar (three dollars trebled) and attorney's fees of $7,350, plus costs for the Sherman Act violation.

The Pioneer asserts on this appeal that the District Court erred in: (1) finding that the intensive blanketing during the three periods was the only Sherman Act violation; (2) awarding only nominal damages for this violation; (3) failing to find that the price difference violated the Clayton Act and not awarding damages for that violation. It asks this Court to assess substantial damages for the claimed violations or to remand to the District Court with instructions to it to determine damages for the violations, or to grant a new trial. No request for injunctive relief is made. The Tribune, on the other hand, asserts that the District Court erred in: (1) holding that the blanketing violated the Sherman Act; and (2) awarding excessive attorneys' fees for the violation. It asks that the court be affirmed except insofar as it found a violation of the Sherman Act and granted attorneys' fees to the Pioneer. It requests that these fees be disallowed or reduced.

THE SHERMAN ACT VIOLATIONS

To establish an "attempt to monopolize" in violation of § 2 of the Sherman Act, it is necessary to prove: (1) a specific intent to monopolize; (2) an overt act or acts; and (3) a dangerous probability of monopolization of a specific product market in a particular geographic market. See, Acme Precision Products, Inc. v. American Alloys Corp., 484 F.2d 1237, 1240 (8th Cir. 1973); Agrashell, Inc. v. Hammons Products Company, 479 F.2d 269, 284-286 (8th Cir.), cert. denied 414 U.S. 1022, 94 S.Ct. 445, 38 L.Ed.2d 313 (1973). See also, Hibner, Attempts to Monopolize: A Concept in Search of Analysis, 34 ABA Antitrust L.J. 165 (1967); Smith, Attempt to Monopolize: Its Elements and Their Definition, 27 Geo.Wash.L.Rev. 227 (1959).

The court properly found that each of the necessary elements was present here. The Tribune was the dominant daily newspaper in southwestern North Dakota. If it succeeded in driving the Pioneer out of business, a dangerous probability existed that it would achieve a monopolistic position in the daily newspaper market and would be able to exploit that position to the disadvantage of the people and businesses in the area. The fact that television and radio would continue to compete in the news and advertising field would not prevent the Tribune from exploiting its position as the only daily newspaper because electronic media is not wholly competitive with respect to some types of news and advertising.⁵ These include: in depth stories on local and national affairs; detailed stories on births, deaths, marriages and social engagements; stock market statistics; detailed sports stories; and price advertising, particularly in the grocery field.

The intent to monopolize was adequately shown by the Tribune's distribution of thousands of free newspapers to Mandan housing units during April and May and September and October of 1963, and during January through March of 1965.⁶ Much of the blanketing during these periods was done on Wednesday, the heavy grocery ad days. It was sometimes accompanied by an appeal to Mandan grocery advertisers to place ads on those days. Because advertising constituted eighty percent of the Pioneer's revenue and a significant portion of that revenue came from grocery advertising, the dangerous probability that the Pioneer would be driven out of business by a continuation of the practice is evident. Accord, Kansas City Star Company v. United States, 240 F.2d 643, 662 (8th Cir.), cert. denied, 354 U. S. 923, 77 S.Ct. 1381, 1 L.Ed.2d 1438 (1957). The blanketing condemned by the court clearly exceeded that permissible in furtherance of a legitimate attempt by the Tribune to enter the Mandan market and properly served as a basis for the court's implicit finding of an intent to monopolize by the Tribune.

The Pioneer would have us go a step further and find that the District Court erred in failing to find that other acts also were illegal attempts to monopolize. We decline to do so. There is adequate evidence in the record to support the court's findings that: the cancellation of the joint advertising agreement served to terminate an anti-competitive agreement; that the Tribune did not act improperly in hiring former employees of the Pioneer; that the premium giveaway programs engaged in by the Tribune were reasonable and done in accordance with accepted practices in the newspaper industry; and that no improper advertising rate discrimination occurred.

The Pioneer would also have us reverse the court's implicit holding that the Tribune's practice of charging a lower price in Mandan was not violative of the Sherman Act. We reject the invitation. That holding is supported by the evidence demonstrating that the pricing practice was one of over thirty years standing.

Finally, the Pioneer urges that the District Court erred by not viewing all of the acts of the Tribune together in determining whether there was an attempt to monopolize. The Pioneer is correct in asserting that the trier of fact must adopt that approach, see, Sanitary Milk Producers v. Bergjans Farm Dairy, Inc., 368 F.2d 679, 691 (8th Cir. 1966), but the Pioneer is mistaken in its assertion that the court failed to do so. After considering each act individually, the court stated that it was required to view "the evidence as a whole and * * * not tightly compartmentalize the various components, and wipe the slate clean after scrutiny of each." It then stated:

* * * Nevertheless, I find that the conduct of the Bismarck Tribune, whether considered in its separate parts or as a whole, did not constitute an act in restraint of trade.⁷ I reiterate that both papers, following March of 1962, responded to the termination of a non-competitive agreement with aggressive, but reasonably competitive conduct, except for the blanketing perviously discussed. 342 F.Supp. at 1142.

DAMAGES FOR THE SHERMAN ACT VIOLATION

Any person injured in his business or property by reason of another's violation of the antitrust laws may recover treble damages from the wrongdoer. 15 U.S.C. § 15. But it is not enough for recovery of damages to prove that an antitrust law was violated by the defendant. Cf., Duff v. Kansas City Star Company, 299 F.2d 320, 323 (8th Cir. 1962). Rather, the rule is that damages may not be awarded to a litigant unless he also proves "with a fair degree of certainty, the fact of damage and the causal connection between the antitrust violation and the injury." ABA Antitrust Section, Antitrust Developments: 1955-1968, at 282 (1968). See, Atlas Building Prod. Co. v. Diamond Block & Gravel Co., 269 F.2d 950, 957-958 (10th Cir. 1959), cert. denied, 363 U.S. 843, 80 S.Ct. 1608, 4 L.Ed.2d 1727 (1960). Cf., Perkins v. Standard Oil Co., 395 U.S. 642, 648, 89 S.Ct. 1871, 23 L.Ed.2d 599 (1969); Story Parchment Co. v. Paterson P. Paper Co., 282 U.S. 555, 51...