Rogers v. Douglas Tobacco Board of Trade, Inc., 17401.

• Decision Date: 05 May 1959
• Docket Number: No. 17401.,17401.
• Parties: B. B. ROGERS et al., Appellants, v. DOUGLAS TOBACCO BOARD OF TRADE, INC., et al., Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

266 F.2d 636 (1959)

B. B. ROGERS et al., Appellants, v. DOUGLAS TOBACCO BOARD OF TRADE, INC., et al., Appellees.

No. 17401.

United States Court of Appeals Fifth Circuit.

May 5, 1959.

Charles J. Alexander, Norman M. Littell, Washington, D. C., John G. Kopp, J. Edwin Peavy, Waycross, Ga., for appellants.

E. Kontz Bennett, Waycross, Ga., Harold F. Baker, Washington, D. C., R. Glenn Key, Winston-Salem, N. C., Montgomery L. Preston, George E. Maddox, Douglas, Ga., for appellees, Bennett, Pedrick & Bennett, Waycross, Ga., Howrey & Simon, Washington, D. C., of counsel.

Before RIVES, JONES and WISDOM, Circuit Judges.

RIVES, Circuit Judge.

This action is for treble damages for alleged violations of the Sherman Anti-Trust Act¹ in the allocation of selling time among the tobacco warehouses on the Douglas, Georgia, market. Most of the facts out of which this case arises, together with a description of the tobacco auction system, are set forth in our opinion on former appeal² and need not be repeated at length. The original complaint had involved only the 1954 and 1955 tobacco market seasons. The first appeal was from the judgment of the district court sustaining the motions of the defendants for judgment on the pleadings. As to the year 1954, the decisive question was whether the provision for the allocation of selling time to a new warehouse was an unreasonable, and hence illegal, restraint of trade. We agreed with the district court that it was not shown to be such. In the year 1955, the plaintiff was affected for the first time by a 3½ per cent limitation provision on increases and decreases in selling time as that limitation was construed and applied. We reversed as to the 1955 tobacco market season and remanded the cause for further proceedings, saying:

"The 3½ per cent limitation, we think, practically froze the seven warehouses in their 1954 competitive positions, eliminated in major part the hope of gain and the risk of failure inherent in a true performance system, and, if further evidence which may be taken upon remand shows that such limitation tends to prejudice the public interest,9 it may constitute an undue and unreasonable restraint of trade and commerce.

"9 See Hudson Sales Corp. v. Waldrip, 5 Cir., 211 F.2d 268, 272; Kinnear-Weed Corp. v. Humble Oil & Refining Co., 5 Cir., 214 F.2d 891, 894, and cases cited; Shotkin v. General Electric Co., 10 Cir., 171 F.2d 236, 238." Rogers v. Douglas Tobacco Board of Trade, Inc., 5 Cir., 244 F.2d 471, 482-483.

On remand a supplemental complaint was filed covering the 1956 and 1957 tobacco market seasons. After trial before a jury and verdict and judgment for the defendants, this appeal was taken.

On the first appeal, the question as to whether the tobacco auction sales on the Douglas Market were in interstate commerce was not argued by any of the parties, and we had assumed that they were. On remand, at the commencement of trial, the plaintiffs moved the district court to "declare, as a matter of law, that the auction sale of tobacco on the Douglas Market at Douglas, Georgia, is in interstate commerce." In response the court ruled: "That is a question of proof. I will leave that up to you as a question of proof." A considerable part of the evidence centered around that question. For example, the plaintiffs' first witness testified:

"A. Well, all of the tobacco, I believe, is eventually shipped into other states. I believe we have one concern which does some redrying on the Douglas Market, which happens to be the Douglas Tobacco Company which redries a small percentage of the tobacco there, but the most of it on the same day of sale, or the following day, is shipped by car or by truck to North Carolina or Virginia and some of it even goes into Kentucky to redrying plants and manufacturing and storage plants."

The facts thus testified were not controverted, but the defendants sought to prove that the 3½ per cent limitation did not affect interstate commerce by inferring that at the time of the local auction sale the interstate character had not been impressed on the commerce, for example:

"Q. Mr. Royster, what effect does the three and a half percent limitation on the warehousemen have on the flow of tobacco through the market and into interstate commerce? A. It doesn\'t have any effect on that at all.

"Q. Will you state why you make that statement? What are your reasons for making that statement? A. Well, going back to the testimony already given, there are a certain number of baskets allotted to each market and it doesn\'t affect interstate commerce, or the flow of tobacco whether it is sold in A house or B house, two houses or six houses. As soon as the sale is completed and the market has sold its allotment of tobacco, of course, the tobacco, as soon as possible, is moved out, and from the Georgia area, there being only one redrying plant in Georgia and it a very small one it moves into principally North Carolina and to some extent into the State of Virginia for redrying and processing.

* * * * * *

"Q. Now, Mr. Loftis, what effect, if any, does this three and a half percent rule have on the flow of tobacco through the Douglas Tobacco Market? A. None that I can see.

"Q. Why do you make that statement? A. Because the Douglas Tobacco Market, as it has been shown, has allocated to it 4400 baskets per day, which it may sell, and the three and a half percent has no bearing whatsoever to the amount of tobacco allotted to the market.

* * * * * *

(On cross-examination)

"Q. Mr. Loftis, if one warehouse on the Douglas Tobacco Market was to get 4400 baskets of tobacco — concede that now, it is possible, is it not? (No answer.) Would that have any effect on Interstate Commerce as between those other warehouses there? A. If one warehouse was to get it all?

"Q. Yes, sir. A. And the others couldn\'t get it?

"Q. Yes, sir. A. The companies would buy every bit of it and ship it right out.

"Q. Would that affect commerce in any way? A. It might affect the individual, but I don\'t see where it would affect commerce because commerce would have it all in the trade."

In its charge to the jury, the district court repeated five times that, in order to recover, the plaintiffs must prove by a preponderance of the evidence four ultimate facts:

"First, that the three and one-half per cent limit affects interstate or foreign commerce;

"Second, that the three and one-half per cent limit prejudices or tends to prejudice the public interest;

"Three, that the three and one-half per cent limit constitutes an unreasonable restraint of trade; and

"Four, that the plaintiffs have suffered a private injury and been damaged as a direct result of the three and one-half per cent limitation."

The plaintiffs' counsel objected "* * to the continued mentioning of the four elements in the charge throughout as being prejudicial to the plaintiffs. It was a continued repetition, if Your Honor please, and it placed an undue burden on the plaintiffs." In response, the district court further instructed the jury:

"Now, gentlemen of the jury, I did not want to give undue emphasis to the four ultimate facts which I read to you. I read them to you two or three times, but I did not mean to give it any undue emphasis. I was just trying to explain the law to you as I see it, and don\'t give the charge as to those four ultimate facts any more emphasis than you do the balance of the charge."

After the jurors had deliberated for about two hours, they asked for additional instructions:

"The Court: Did you gentlemen want some additional instructions?

"A Juror: Yes, sir. We want a re-statement of those four points, the exact wording of those four points.

* * * * * *

"A Juror: We would like to write it down.

"The Court: All right, you can write it down, gentlemen. I charge you that in order to carry their burden of proof, the plaintiffs must prove four ultimate facts:

"(Note: The Court reads slowly while the jury writes down the instructions.)

"1. That the three and one-half per cent limit affects interstate or foreign commerce. That is No. 1.

"2. That the three and one-half per cent limit prejudices or tends to prejudice the public interest.

"3. That the three and one-half per cent limit constitutes an unreasonable restraint of trade.

"4. That plaintiffs have suffered a private injury and been damaged as a direct result of the three and one-half per cent limitation.

"Now, I charge you that if the public has been damaged it might be an unreasonable restraint of trade. That is a question of fact for you gentlemen to determine. Now, those four facts have to be proved. Not just three, but all four. Not one, not two, not three, but all four of them have to be proved by a preponderance of the testimony. Is that what you gentlemen wanted?

"The Jury: Yes, sir."

The jurors retired to deliberate further, but did not reach a verdict on that day. The following morning they again returned for additional instructions:

"The Court: Did you gentlemen want some additional instructions?

"The Jury: Your Honor, would you read or explain the Anti-trust Act, the part of the law that would affect interstate commerce?

"The Court: Do you want a definition of interstate commerce?

"The Jury: Yes, sir, or explain it to us.

"The Court: I will give you a definition of interstate commerce. This is from Black\'s Law Dictionary:

"`Traffic, intercourse, commercial trading, or the transportation of persons or property between or among the several states of the Union, or from or between points in one state to points in another state. Commerce between two states is between places lying in different states.\'

"Now, I will give you another definition in another book. This is `Words and Phrases\':

"`Interstate Commerce: Commerce among the states cannot stop at the boundary line of each state but may be introduced into the interior. It is not intended to say that these words comprehend that commerce which is completely internal, which is carried on

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