PMP Associates, Inc. v. Globe Newspaper Co.

• Decision Date: 06 January 1975
• Citation: 366 Mass. 593,321 N.E.2d 915
• Parties: PMP ASSOCIATES, INCORPORATED v. GLOBE NEWSPAPER COMPANY.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 915

321 N.E.2d 915

366 Mass. 593

PMP ASSOCIATES, INCORPORATED v. GLOBE NEWSPAPER COMPANY.

Supreme Judicial Court of Massachusetts, Suffolk.

Argued Nov. 6, 1974.

Decided Jan. 6, 1975.

Robert J. Ciolek, Salem, for plaintiff.

Bertram E. Snyder, Boston, for defendant.

Before TAURO, C.J., and QUIRICO, BRAUCHER, KAPLAN and WILKINS, JJ.

TAURO, Chief Justice.

This bill in equity was brought pursuant to G.L. c. 93A, § 11, and the general equity power of the court, c. 214, § 1, alleging that the defendant committed an unfair trade practice in refusing to accept the plaintiff's advertising for publication in its newspaper. This is an appeal by the plaintiff from an interlocutory decree sustaining a demurrer to the bill, and from the consequent final decree dismissing the bill. We are of opinion that the demurrer was rightly sustained.

The plaintiff's bill alleges the following facts which we accept as true for purposes of ruling on the defendant's demurrer. Palmer v. Motley, 323 Mass. 129, 133, 80 N.E.2d 460 (1948). The plaintiff is a business enterprise providing escort services to the general public. Its principal mode of obtaining business is through advertising, and it is a potential consumer of advertising space of the defendant. The defendant publishes a newspaper known as The Boston Globe, and solicits advertising therein. The plaintiff offered to purchase advertising space in The Boston Globe and was willing to meet all specifications and requirements of the defendant in order to secure such space. The defendant, however, refused and refuses to accept the plaintiff's advertising. It does accept advertising from business ventures offering conducted tours and escorted travel groups, which services the plaintiff alleges are comparable to its own. The defendant publishes one of two large newspapers in the area.

It is well settled in this Commonwealth that 'the publication an sale of newspapers is a private enterprise as distinguished from a business affected with a public interest and that those engaged in such a business are free to deal with whomever they choose.' J. J. Gordon, Inc. v. Worcester Telegram Publishing Co. Inc., 343 Mass. 142, 143--144, 177 N.E.2d 586, 588 (1961). A publisher is under no obligation to accept advertising from all who apply for it, and 'a newspaper, acting alone, is commonly at liberty to reject advertising as it sees fit.' Opinion of the Justices, --- Mass. ---, ---, ^a 298 N.E.2d 829, 832 (1973). The Gordon case, supra, at 144, 177 N.E.2d 586. See Commonwealth v. Boston Transcript Co., 249 Mass. 477, 144 N.E. 400 (1924). See also North Station Wine Co. Inc. v. United Liquors, Ltd., 323 Mass. 48, 80 N.E.2d 1 (1948). The same conclusion has been reached by virtually every court which has dealt with this issue, including the United States Supreme Court, Lorain Journal Co. v. United States, 342 U.S. 143, 155, 72 S.Ct. 181, 96 LEd. 162 (1951), and various Federal and State courts. ¹ See, e.g., Chicago Joint Bd. Amalgamated Clothing Wrkrs. of America, AFL-CIO v. Chicago Tribune Co., 307 F.Supp. 422 (N.D.I11.1969), affd. 435 F.2d 470 (7th Cir. 1970), cert. den. 402 U.S. 973, 91 S.Ct. 1662, 29 L.Ed.2d 138 (1971); America's Best Cinema Corp. v. Fort Wayne Newspapers, Inc., 347 F.Supp. 328 (N.D.Ind.1972); Modla v. Tribune Publishing Co. Inc., 14 Ariz.App. 82, 480 P.2d 999 (1971); Approved Personnel, Inc. v Tribune Co., 177 So.2d 704 (Dist.Ct.App.Fla.1965). Cf. Miami Herald Publishing Co., Div. of Knight Newspapers, Inc. v. Tornillo, 418 U.S. 241, 94 S.Ct. 2831, 41 L.Ed.2d 730 (1974). See also annotation, 18 A.L.R.3d 1286 (1968). Thus, the defendant's refusal to accept the plaintiff's advertising is not actionable unless it falls within the proscriptions of G.L. c. 93A. ²

General Laws c. 93A, § 2(a), makes unlawful any '(u)nfair . . . acts or practices in the conduct of any trade or commerce.' Section 1 provides that 'trade' and 'commerce' shall include the advertising or offering for sale of any services or property directly or indirectly affecting the people of this Commonwealth, and § 11 gives a private cause of action to any person engaged in trade or commerce who suffers a loss as a result of the employment by another engaged in trade or commerce of an unfair act declared unlawful by § 2. Chapter 93A itself, however, furnishes no definition of what constitutes an unfair act or practice made unlawful by § 2(a). Commonwealth v. DeCotis, --- Mass. --- ---, ^b 316 N.E.2d 748 (1974). Instead, it directs us to consider the interpretations of unfair acts and practices under § 5 of the Federal Trade Commission Act, 15 U.S.C. § 45(a)(1) (1970), as construed by the Federal Trade Commission (commission) and the Federal courts. Accordingly, we must look to these interpretations to determine whether the defendant's refusal to accept the plaintiff's advertising constitutes an unfair trade practice.

In recent years, the United States Supreme Court has clarified and expanded the power of the commission to declare practices unfair and thus violative of the Federal Trade Commission Act, 15 U.S.C. § 45(a)(1) (1970), even where no violation of the common law or the anti-trust acts is shown. Federal Trade Commn. v. R. F. Keppel & Bro. Inc., 291 U.S. 304, 309--313, 54 S.Ct. 423, 78 L.Ed. 814 (1934). Federal Trade Commn. v. Brown Shoe Co. Inc., 384 U.S. 316, 321--322, 86 S.Ct. 1501, 16 L.Ed.2d 587 (1966). Federal Trade Commn. v. Sperry & Hutchinson Co., 405 U.S. 233, 244, 92 S.Ct. 898, 31 L.Ed.2d 170 (1972). In the Sperry & Hutchinson case, the Supreme Court made it clear that 'the Federal Trade Commission does not arrogate excessive power to itself if, in measuring a practice against the elusive, but congressionally mandated standard of fairness, it, like a court of equity, considers public values beyond simply those enshrined in the letter or encompassed in the spirit of the antitrust laws.' Id. at 244, 92 S.Ct. at 905. In a footnote, the court apparently approved the standards developed by the commission regarding the considerations to be used in determining whether a practice is to be deemed unfair: '(1) whether the practice . . . is within at least the penumbra of some common-law, statutory, or other established concept of unfairness; (2) whether it is immoral, unethical, oppressive, or unscrupulous; (3) whether it causes substantial injury to consumers (or competitors or other businessmen). If all three factors are present, the challenged conduct will surely violate Section 5 . . . if it is exploitive or inequitable and if, in addition to being morally objectionable, it is seriously detrimental to consumers or other.' 29 Fed.Reg. 8325, 8355 (1964).

We have examined the factors set out above in order to determine whether the defendant's refusal to accept the plaintiff's advertising constitutes an unfair trade practice. We rule that the practice in question is not within any recognized conception of unfairness, is neither immoral, unethical, oppressive nor unscrupulous, and would not cause substantial injury to consumers, competitors or other businessmen. Accordingly, we hold that the defendant's mere refusal to sell, without more, does not constitute an unfair trade practice, and is therefore not unlawful under c. 93A.

We are bolstered in our conclusion by the treatment of refusals to deal under the Federal acts by both the Federal courts and the commission. Although most of the 'refusal to deal' cases have arisen under the anti-trust acts, the analysis therein is applicable to the instant case. In Lorain Journal Co. v. United States, 342 U.S. 143, 155, 72 S.Ct. 181, 187, 96 L.Ed. 162 (1951), the Supreme Court stated: "In the absence of any purpose to create or maintain a monopoly, the (Sherman) act does not restrict the long recognized right of trader or manufacturer engaged in an entirely private business, freely to exercise his own independent discretion as to parties with whom he will deal' ((e)mphasis supplied),' quoting from United States v. Colgate & Co., 250 U.S. 300, 307, 39 S.Ct. 465, 63 L.Ed. 992 (1919). 'Refusals to sell, without more, do not violate the law.' Times-Picayune Publishing Co. v. United States, 345 U.S. 594, 625, 73 S.Ct 872, 889, 97 L.Ed. 1277 (1953). In each of these cases, the court emphasized that more than a mere refusal to deal would be required to violate the Federal acts.

In Federal Trade Commn. v. Raymond Bros.-Clark Co., 263 U.S. 565, 44 S.Ct. 162, 68 L.Ed. 448 (1924), an early case arising under the Trade Commission Act, the court made it clear that it is the right of one engaged in a private business to refuse to deal, or discontinue dealing, with anyone, for any reason, unless the dealer combines with others in a concerted effort to hinder free trade. The court reaffirmed this rule in United States v. Bausch & Lomb Optical Co., 321 U.S. 707, 721--723, 64 S.Ct. 805, 88 L.Ed. 1024 (1944). Cf. Otter Tail Power Co. v. United States, 410 U.S. 366, 377, 93 S.Ct. 1022, 35 L.Ed.2d 359 (1973). In America's Best Cinema Corp. v. Fort Wayne Newspapers, Inc., 347 F.Supp. 328 (N.D.Ind.1972), a case involving a newspaper's refusal to accept advertising from movie houses showing X-rated films, the District judge stated: 'The critical inquiry in a refusal to deal action is . . . 'whether the refusal to deal . . . is so anti-competitive in purpose or effect, or both, as to be an unreasonable restraint of trade.' Alpha Distributing Co. of California, Inc. v. Jack Daniels Distillery, 454 F.2d 442, 452 (9th Cir. 1972).' Id. at 333. The judge went on to say, 'In those cases cited by the plaintiffs, where courts have restrained newspapers from refusing to accept advertising, the courts have found a purpose or motive either to exclude a person or group from the market or to accomplish some other anticompetitive objective.' Id. at 333. There is no allegation of such anti-competitive motive or effect in this case.

As stated, the commission's treatment of refusals to...