provided they also have such a power that they are able, as a group, to exclude actual or potential competition from the field and provided that they have the intent and purpose to exercise that power.'
There is no evidence in this case from which the jury could find beyond a reasonable doubt that the defendants conspired to acquire or maintain power to raise prices or exclude competition in the relevant market. Although the Indictment alleges that the trade or commerce involved is asbestos-cement pipe and couplings (see pars. 8-12),
the evidence shows that the primary competitors for each of the corporate defendants were the sellers of metal pipe. N.T. 1273, 1274, 1277, 1278, 2081, 2099, 1201-2, 2108, 2109, 2151 and 5441. For example, the 1960 Business Condition Report of Johns-Manville's Los Angeles Pipe District Office (GX-1253, p. 1) states concerning the outlook for 1961: 'The competition is going to be tougher than we have yet experienced, both foreign and domestic -- in A-C as well as metal pipes.' At. p. 3 of this Report, it is stated: 'The steel pipe competitors have been even more aggressive than in the past.' See, also, GX-1257, p. 2; GX-1256, p. 2; GX-1207, p. 3; GX-1209, p. 2; GX-1204, pp. 2 & 4; GX-1258, p. 3; GX-1259, pp. & 6. The reocrd is also replete with testimony concerning sales of concrete pipe (GX-1257, p. 3; N.T. 2053), tile pipe (N.T. 2049-53), plastic pipe (GX-1253, p. 4), clay pipe (GX-1257, p. 2; N.T. 2049-53, 2078, 2080), steel and wood pipe (N.T. 2086, 3036, 3084, 3180), etc., even though the only evidence of economic power in the field relates to the volume of asbestos-cement pipe sold by defendants. There is every indication in this record that the above types of pipe were 'reasonably interchangeable' by consumers for the same purposes, except in certain soils such as are present in southwest Texas. See United States v. E. I. Du Pont, 351 U.S. 377, 395, 76 S. Ct. 994, 100 L. Ed. 1264 (1956). Even in such soils, plastic, tile and concrete pipe were used. In the Du Pont case, supra, the court said at page 394, 76 S. Ct. at page 1006-1007:
'But where there are market alternatives that buyers may readily use for their purposes, illegal monopoly does not exist merely because the product said to be monopolized differs from others.'
The power of defendants to raise prices and to exclude competition might be negligible if the total sale of these apparently interchangeable products were substantially in excess of the sales of asbestos-cement pipe. The Government has clearly not sustained its burden of proof on this element of the crime charged in Count Two.
In its oral argument, the Government took the position that the language of footnote 23 on page 395, 76 S. Ct. on page 1007 of the Du Pont case, supra, made proof of the relevant market immaterial on a charge of conspiracy to monopolize pursuant to 15 U.S.C. § 2 Apparently, the Government takes the position adopted in Lessig v. Tidewater Oil Company, 327 F.2d 459, 474-475 and 478, where language used at 474-475 was qualified on rehearing (9th Cir. 1964). However, the language in the above-mentioned footnote only states that 'the scope of the market was not in issue' in Story Parchment Co. v. Paterson Parchment Paper Co., 282 U.S. 555, 51 S. Ct. 248, 75 L. Ed. 544 (1931). An examination of that case indicates that neither counsel nor the court considered the issue of what was the relevant market and that the parties conceded, apparently, that interstate trade and commerce in vegetable parchment paper was a sufficient description of that market. To adopt the Government's position would be to disregard the approach of the above-cited decisions of the United States Supreme Court and the language concerning relevant market in such recent decisions as International Boxing Club of New York v. United States, 358 U.S. 242, 249-251, 79 S. Ct. 245, 3 L. Ed. 2d 270 (1959).
Part (B) of Order (Count Three)
The absence of evidence to prove beyond a reasonable doubt the existence of a relevant market of the type of trade and commerce alleged in the Indictment, as discussed under Count Two above, requires a grant of judgment of acquittal under Count Three. The evidence produced by the Government indicates that the fact that several types of pipe other than asbestos-cement pipe were actively competing with it may it may have had a controlling effect on the power to raise prices and to exclude competition. In American Tobacco Company v. United States, supra, the Supreme Court of the United States quoted with approval the following language from the trial court's charge:
'The phrase 'attempt to monopolize' means the employment of methods, means and practices which would, if successful, accomplish monopolization, and which, though falling short, nevertheless approach so close as to create a dangerous probability of it, which methods, means and practices are so employed by the members of and pursuant to a combination or conspiracy formed for the purpose of such accomplishment.'
This language was based on previous statements of the Supreme Court of the United States over many years, requiring not only intent but a 'consequent dangerous probability' of the accomplishment of that intent. Swift and Company v. United States, 196 U.S. 375, 396, 25 S. Ct. 276, 49 L. Ed. 518 (1905). See United States v. Winslow, 227 U.S. 202, 218, 33 S. Ct. 253, 57 L. Ed. 481 (1913), and United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 226, fn. 59, 60 S. Ct. 811, 84 L. Ed. 1129 (1940). More recent federal cases have stated that an attempt to monopolize 'means the employment of methods and practices which the utilized for the specific purpose and with the specific intent to achieve or build a monopoly, and which, if successful, would be likely to accomplish such monopolization.' See Kansas City Star Company v. United States, 240 F.2d 643, 663 (8th Cir. 1957). Such cases have discussed the relevant market and considered whether the evidence could establish beyond a reasonable doubt that the defendants' activities 'would be likely to accomplish' monopolization. There is no proof in this record which would justify the jury in finding beyond a reasonable doubt that the activities and plans of the defendants, 'if successful, would be likely to accomplish' monopolization, in view of the absence of any evidence concerning the relationship of competing pipes to the relevant market. Footnote 23 of the Due Pont case, supra, does no more than point out that certain cases cited there were distinguishable because they involved attempts to monopolize, rather than the question of monopolization, which was before the court in the Du Pont case. At the end of the footnote, the court considered United States v. Aluminum Company of America, 148 F.2d 416 (2nd Cir. 1945), because it did involve the question of monopolization and pointed out that the court did make a finding in that case of the relevant market. There is no statement in the footnote that, in a case involving a charge of attempt to monopolize under 15 U.S.C. § 2, the Government may produce evidence which concerns only the product of two manufacturers where this same evidence shows active competition and interchangeability between that product and several other similar products. The ability to raise the price of this product (asbestos-cement pipe) may well depend upon the activities of competitors producing the competing product, and the ability to exclude foreign competition in this product may also be affected by the activities of such competitors producing other types of pipe. The factual background of the Lessig case, supra (see, for example, 327 F.2d pages 469-470 and qualifying language on rehearing in the last paragraph on page 478), makes the above-mentioned language in that case inapplicable to this record. Also, it is noted that the Lessig case, supra, was a civil case, where the plaintiff's burden is not as great as that of the Government, which must establish every element of its case beyond a reasonable doubt.
The above viewpoint is supported by several civil cases involving charges of attempt to monopolize under 15 U.S.C. 1 2: Cameron Iron Works v. Edward Valves, Inc., 175 F.Supp. 423 (S.D.Tex.1959); United States v. Singer Mfg. Co., 205 F.Supp. 394 (S.D.N.Y.1962). The Report of the Attorney General's National Committee to Study the Antitrust Laws (1955) uses this language at pages 47-48:
'It is sometimes suggested that the words 'any part' of trade or commerce in section 2 refer merely to an amount of business sufficient in volume to overcome the objection de minimis non curat lex. But the concept of 'the market' is not brought into the antitrust laws by the words 'any part' in Section 2; rather it is integral to the basic concept of 'monopolization,' and the ideas of competition and monopoly on which it rests. Thus, Section 2 of the Sherman Act deals with monopolizations affecting markets which constitute 'any part' of the trade or commerce covered by the Act. To be sure, an appreciable amount of commerce is a 'part' of commerce, but control over an appreciable amount of commerce does not necessarily mean control over an identifiable market which constitutes an appreciable 'part' of commerce.
'Sometimes the part of commerce affected by the defendants' conduct will also be a market; but this does not necessarily follow. Without a finding as to the market involved, there is no way of determining whether or not the defendants have given degree of market power.'
The briefs of counsel have been placed in the Clerk's file as Documents Nos. 186-190.
MISCELLANEOUS REFERENCES TO TESTIMONY OF MR. COSTA THAT MR. ORTH WAS CONCERNED WITH PRICE CUTTING IN THE UNITED STATES AND WAS INTERESTED IN STABILIZING THE UNITED STATES PRICES
N.T. 7922-3 Costa testified to discussion by Orth at Zurich in the summer of 1959 on the effect of cut-throat competition of foreigners on prices and his desire to stabilize prices.
N.T. 7930 Mr. Costa testified to discussion by Mr. Orth at Brussels, Belgium, in February 1960 (N.T. 7926) of 'several cases, individual cases, of extreme competition' in the United States. Mr. Orth was complaining of price cutting as the result of sales of imported pipe and the falling price level (N.T. 7932). Mr. Orth was prepared to discuss the details ('This tender, or that tender, or that tender'
), but others present could not discuss the detailed facts without the presence of their 'American agents.' For this reason, it was decided to have a meeting with the American agents, which it was decided would be held in Paris in March 1960 (N.T. 7903-1 and 7933).
The defendants contend that Toulmin, Antitrust Laws, is, at best, a secondary source, a collection of dicta, and that the citation of 6 Toulmin, Antitrust Laws, 200, 201, on page 1 of Document 142, is not binding upon this court (N.T. 10,092). Suffice it to say that the court's examination of that reference, and the 13 cases cited in the footnote there, reveals that Toulmin has stated the general rules relating to the continuity of a conspiracy and its relation to the statute of limitations accurately and succinctly. It was more convenient for the court to cite that work for the propositions quoted than to include its own quotes from, and references to, many cases, most of which are included in Toulmin's footnotes. That general rule, set out on page 1 of Document 142, is the law which is binding upon this court. More particularized references may be found in Hyde v. United States, 225 U.S. 347, 368-369, 32 S. Ct. 793, 56 L. Ed. 1114 (1912); Heike v. United States, 227 U.S. 131, 33 S. Ct. 226, 57 L. Ed. 450 (1913), and Continental Baking Co. v. United States, 281 F.2d 137, 154 (6th Cir. 1960).