National Business Lists v. Dun & Bradstreet, Inc.

• Decision Date: 11 June 1982
• Docket Number: No. 74 C 3516.,74 C 3516.
• Citation: 552 F. Supp. 99
• Court: U.S. District Court — Northern District of Illinois
• Parties: NATIONAL BUSINESS LISTS, INC., Plaintiff, v. DUN & BRADSTREET, INC., Defendant.

552 F. Supp. 99

NATIONAL BUSINESS LISTS, INC., Plaintiff, v. DUN & BRADSTREET, INC., Defendant.

No. 74 C 3516.

United States District Court, N.D. Illinois, E.D.

June 11, 1982.

Altheimer & Gray, Susan S. Henderson, Benjamin D. Schwartz, Lionel G. Gross, K.R. Gaines, Chicago, Ill., for plaintiff.

Kirkland & Ellis, John H. Morrison, William P. O'Neill, Don H. Reuben, William H. Pratt, Lawrence Gunnels, Thomas F. Ging, Keith C. McDole, Sidney N. Herman, Fred H. Bartlit, Jr., Chicago, Ill., for defendant.

MEMORANDUM AND ORDER

MORAN, District Judge.

Following a two and-a-half-month trial, the jury found for defendant Dun & Bradstreet, Inc. (D & B) on the antitrust claims of plaintiff National Business Lists, Inc. (NBL) and for D & B on its copyright and contract counterclaims against NBL. NBL thereafter filed post-trial motions, which were extensively briefed by the parties.

While those memoranda deal initially and at greatest length with the copyright and contract issues, the primary issue at trial was the antitrust claim. It is that claim which will be considered first here. In seeking a retrial of the antitrust claim plaintiff relies on three contentions. The first is that the outcome on that issue, as well as the others, was the result of trial tactics by defendant which the court condoned. The second is that the jury instructions on all claims were overly vague and abstract. The third is that the jury was erroneously instructed (and not instructed) on market concepts.

Before turning to those issues a brief, and therefore oversimplified, description of the thrust of NBL's antitrust claim and of the evidence at trial will be helpful. NBL sells compiled business lists, using information primarily derived from D & B reference books and telephone directories. D & B has for many years sold commercial credit information. With the advent of computers the information obtained for credit reports has been capable of being accessed for business list purposes. D & B, accordingly, began selling compiled business lists to customers desiring mailing lists for mail order sales and other purposes. It thereupon became a competitor of NBL.

NBL, contending that certain of the information accessible only to D & B permitted D & B to market carefully targeted lists, complained that it was at a severe competitive disadvantage as a result. It sought from D & B access to the D & B computer data base in order to use D & B's information to market targeted lists different from those NBL then marketed. D & B was willing to sell its lists through NBL as a broker, on request, but it was unwilling to provide access to its data, and NBL thereafter brought monopoly and attempted monopoly claims. D & B counterclaimed to enforce what it believed to be its copyright and contract rights in the D & B reference books and directories NBL had been using and was continuing to use in compiling its lists.

NBL has not claimed that D & B's acquisition of its information through its credit investigation and reporting functions is in any way violative of the antitrust laws. There was no evidence of any anti-competitive intent in D & B's compiled list marketing introduced at trial, and NBL did not pursue its attempted monopoly claims. It did not claim that in the absence of monopoly power D & B's exclusive access to certain information obtained through its activities in one market obligated D & B to share that information with competitors in a second market if that sharing were necessary to permit effective competition in the second market. It relied instead upon a theory derived from Berkey Photo, Inc. v. Eastman Kodak Company, 603 F.2d 263 (2nd Cir.1979), cert. denied, 444 U.S. 1093, 100 S.Ct. 1061, 62 L.Ed.2d 783 (1980), and it was upon the basis of that theory, over the vigorous objections of D & B, that the case went to the jury.

The claim was that D & B had monopoly power, lawfully obtained, in a commercial credit services market and that, as a result of monopoly power in that market, it had monopoly control of information which NBL had to have in order to compete without unreasonable handicap¹ in a second market, which was a compiled business lists market. NBL further claimed that D & B had extended its monopoly power from the first market to the second by engaging in anti-competitive conduct that had unfairly handicapped NBL's ability to compete in that only D & B had the information and D & B had unreasonably refused to make that information available. Because D & B had obtained the information through the use of monopoly power in the first market it had a duty to make that information available to competitors in the second market to the extent necessary for effective competition.

The concept itself is at the outer boundaries of antitrust law, if not, in the circumstances of this case, beyond. See In re E.I. duPont de Nemours & Co., 96 FTC 653 (October 20, 1980) and its extended discussion of monopoly and attempted monopoly cases in the context of lawfully acquired advantages and the court's rejection of predisclosure requirements in Berkey Photo, Inc., in light of the economic circumstances there disclosed. The concept ultimately requires a determination of what a trier of fact believes to be misuse of monopoly power rather than appropriate competitive conduct in the particular economic circumstances. That kind of ultimate question is not wholly dissimilar to questions commonly left to a jury, which plaintiff chose to do.²

In this case the jury got no further than the question of the first relevant market. By finding, however, that NBL can compete effectively even if it cannot use D & B reference book information plaintiff has used for years, much less the data base here sought, the jury made unmistakably clear its conclusion that NBL had not proved its case.

Plaintiff urges that the antitrust instructions were overly vague and abstract. The short answer is that they were precisely tied to the concepts and factual issues articulated by able counsel in opening statements and closing arguments and to the exhibits and testimony of industry participants and expert witnesses over a lengthy period. This court does not consider instructions to be the occasion for marshalling all the evidence which one party or the other may believe the jury will consider persuasive.

More substantial are plaintiff's contentions respecting relevant markets. NBL argues that internal credit checking cannot be considered as part of a relevant market, that the jury should have been instructed respecting a possible submarket confined to off-the-shelf general purpose reports, and that the submarket criteria in Brown Shoe Co., Inc. v. United States, 370 U.S. 294, 82 S.Ct. 1502, 8 L.Ed.2d 510 (1962), should have been specifically brought to the attention of the jury by the instructions.

At trial the principal focus of the dispute was whether "in-house" credit checking could be considered in defining a relevant market. Plaintiff contended, and contends, that such "in-house" checking is not part of a competitive market and therefore the jury should not have been permitted to consider that alternative in determining market definition.

That approach, however, ignores economic reality. The definition of a relevant market is but one step in the determination of whether a party has monopoly power, the power to control prices or to exclude competition. It matters not whether the issue is elasticity or cross-elasticity of demand if the alternatives are reasonable substitutes which severely restrict the power to control price. There may be only one paperhanger in town, but if the result of his price increase is that people put up their own wallpaper his "monopoly" is illusory. See Twin City Sportservice, Inc. v. Charles O. Finley & Co., 512 F.2d 1264, 1272 fn. 1 (9th Cir. 1975); United States v. International Telephone and Telegraph Corp., 1971 Trade Cases ¶ 73,619 (N.D.Ill.1971); II Areeda and Turner, Antitrust Law ¶ 507.

The submarket concept came up in two guises, and that duality had some impact upon the instructions. There was a suggestion, in two sentences of a pretrial memorandum, of a submarket almost entirely confined to the types of credit reports marketed by D & B. The final pretrial order made no reference to such a claimed relevant submarket, nor did plaintiff's opening statement refer to that alleged submarket. While there was considerable evidence introduced by plaintiff tending to show that D & B, because of the nature of its reports, had a dominant position in providing commercial credit services, it was the court's understanding at the time that the purpose was to evidence monopoly power in the relevant market defined by plaintiff in the pretrial order and opening statement, not in an attempt to show that there was a relevant submarket almost entirely confined to D & B reports. The narrow submarket...