Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.


June 9, 1960


The opinion of the court was delivered by: STEEL

Plaintiff seeks treble damages under Sec. 4 of the Clayton Act, 15 U.S.C.A. 15, and an injunction under Sec. 7 of the Act, 15 U.S.C.A. 26, because of alleged violations by defendants of Secs. 1 and 2 of the Sherman Act, 15 U.S.C.A. 1, 2. After denying motions by the defendants for directed verdicts at the close of the evidence, the Court, acting under F.R.Civ.P. 49(a), 28 U.S.C.A., submitted critical fact issues to the jury upon special interrogatories. *fn1" The jury was unable to agree upon an answer to the first interrogatory, and was discharged. Defendants then filed the present motions for judgment under F.R.Civ.P. 50(b) in accordance with their earlier motions for directed verdicts.

Plaintiff was incorporated for the purpose of selling in bond cigarettes and other tobacco products to vessels bound for foreign countries from ports in the Philadelphia area. In bond sales to foreign-bound vessels are not subject to the federal taxes normally imposed upon domestic sales of tobacco products. The business of selling in bond merchandise to vessels is known as the sea stores business.

 Five of the corporate defendants are major cigarette manufacturing companies. The sixth corporate defendant, Lipschutz Bros., Inc., is a distributor in the Philadelphia area of various types of sea stores, including tobacco products manufactured by the five major cigarette companies. Two individual defendants are members of the Lipschutz family who are either stockholders, directors or officers of Lipschutz Bros., Inc. Shortly before trial the defendant Albert Lipschutz died and his administrators were substituted as parties.

 On a motion for a directed verdict a case is not lightly to be taken from the jury since it is the recognized trier of the facts. The Court must accept as true all the facts favorable to the plaintiff which the evidence tends to prove and draw all reasonable inferences against the defendants. If the evidence is of such character that reasonable men in an impartial exercise of judgment might reach different conclusions, the case should be submitted to the jury. Makowsky v. Povlick, 3 Cir., 1959, 262 F.2d 13, 14-15. On the other hand, it is essential that, after making due allowance for all reasonable possible inferences favoring the plaintiff, mere speculation be not allowed to do duty for probative facts. Galloway v. United States, 1943, 319 U.S. 372, 395, 63 S. Ct. 1077, 87 L. Ed. 1458. These are the principles which must govern the disposition of defendants' motions.

 Standing to Sue for Treble Damages

 4-6$ Section 4 of the Clayton Act authorizes the recovery of treble damages by any person who is injured in his 'business' or 'property' by reason of anything forbidden by the anti-trust laws. Defendants contend that since plaintiff never actually engaged in business, it had no business within the intendment of Section 4. Defendant's argument necessarily presupposes that when Congress authorized treble damage suits it meant to distinguish between the rights of persons who are put out of business and the rights of persons who are kept out of business by a conspiracy. It is unreasonable to suppose that such a distinction was intended by Congress. The purpose of the anti-trust laws is to promote competition and to prevent its restraint. This purpose is no less thwarted when a person who intends and is prepared to embark in trade is stopped at the outset, than it is when a going business is brought to a standstill. It is as unlawful to prevent a person from engaging in business as it is to drive him out of business. Thomsen v. Union Castle Mail S.S. Co., 2 Cir., 1908, 166 F. 251, 253. The restriction which defendants would place upon the meaning of the word 'business' is unwarranted in the context of its Clayton Act usage.

 Triangle Conduit & Cable Co., Inc. v. National Electric Products Corp., 3 Cir., 1945, 152 F.2d 398 held that Section 4 of the Clayton Act did not require an injury to a specific going business and that if an intention and preparedness to engage in business was shown, this was enough to qualify one injured by an anti-trust violation to treble damage relief. Although the Court of Appeals affirmed the dismissal, it was solely because the proof failed to establish that the plaintiff intended and was prepared to engage in business. The opinion leaves no room for doubt that had an intention and preparedness to engage in business been proven, the Court would have held that the action was maintainable. Identical implications are to be drawn from Wm. Goldman Theatres, Inc. v. Loew's Inc., D.C.E.D.Pa.1946, 69 F.Supp. 103; affirmed 3 Cir., 1948, 164 F.2d 1021; certiorari denied 1948, 334 U.S. 811, 68 S. Ct. 1016, 92 L. Ed. 1742. There, the plaintiff, which had been in the business of exhibiting second-run moving pictures, recovered treble damages because, as a result of a conspiracy by the defendants, it was prevented from exhibiting first-run pictures in a theatre which had never opened. On a record which disclosed that plaintiff intended and was prepared to exhibit first-run pictures, the Court stated that there would be no logic or sound policy for adopting a rigid rule which would preclude the plaintiff from recovering loss of profits simply because it had no established going business in first-run showings.

 It is unnecessary to review the decisions in other circuits since this Court's action is governed by the Triangle Conduit decision. It may be noted in passing, however, that statements in American Banana Co. v. United Fruit Co., 2 Cir., 1908, 166 F. 261, 264 and in Pennsylvania Sugar Refining Co. v. American Sugar Refining Co., 2 Cir., 1908, 166 F. 254, 260 are consistent with the Triangle Conduit opinion.

 Since one who is prepared and intends to carry on a business is entitled to maintain a treble damage action when a conspiracy prevents him from doing so, the status of plaintiff to sue is clear. The record is replete with evidence which would support a finding that plaintiff was prepared and intended to enter the sea stores business and would have done so but for defendants' refusal to sell it cigarettes. Indeed, on the present motions defendants made no serious contention to the contrary but restricted their argument primarily to the proposition that because plaintiff never actually carried on any business it had no status to maintain a treble damage action.

 Since ample evidence exists from which the jury could have found that plaintiff had a 'business' within the meaning of Section 4, it is unnecessary to consider whether the plaintiff had 'property' within the meaning of that Section.


 Defendants assert that no evidence exists from which a jury could properly find that plaintiff sustained any damage from the alleged conspiracy. For purposes of the discussion which follows, it will be assumed that defendants did in fact conspire to keep plaintiff out of business. *fn2"

 Story Parchment Co. v. Paterson Parchment Paper Company, 1931, 282 U.S. 555, 563, 51 S. Ct. 248, 75 L. Ed. 544 seemingly affirmed the rule that although the fact of damage must be shown, without any element of uncertainty, to be definitely attributable to the wrong, a dollar value may be assigned to an injury even if some uncertainty exists as to its amount. Later cases, such as Bigelow v. RKO Radio Pictures, 1946, 327 U.S. 251, 66 S. Ct. 574, 90 L. Ed. 652 are said to have clarified Story Parchment, and today, in this Circuit at least, there is the same liberality permitted in proving the fact of damages as exists in proving the amount of damages. Noerr Motor Freight v. Eastern Railroad Presidents Conference, D.C.E.D.Pa.1957, 155 F.Supp. 768, 834, affirmed 3 Cir., 1959, 273 F.2d 218. Nevertheless, there has never been any relaxation of the rule laid down in Bigelow v. RKO Radio Pictures, supra, 327 U.S. at page 264, 66 S. Ct. 574, that a jury is entitled to assess damages only if relevant data exists from which it can make a just and reasonable estimate, and it will not be permitted to render a verdict based on a guess simply because a defendant by its own wrong may have prevented a more precise computation. The fact that the ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.