A complaint in a suit for triple damages under the Sherman
Antitrust Act, brought by a poster advertising company against
others engaged in that business, adequately alleged a conspiracy by
the defendants to monopolize the business of bill posting by
restraining interstate commerce in the transportation of posters.
The complaint
Page 311 U. S. 256
alleged also, as part of the general conspiracy, local acts of
the defendants aimed at preventing the complainant from obtaining
sites for posting and signs. Injury and damage to the complainant,
including loss of business and profits, were alleged.
Held:
1. The damage alleged could not be regarded as having been the
consequence solely of the local acts of the defendants, and the
allegations of damage, though general, were adequate. P.
311 U. S.
260.
2. It was not necessary, in order to state a cause of action,
that the complainant allege it was unable, as a result of
defendants' activities, to obtain posters. P.
311 U. S.
261.
109 F.2d 764 reversed.
Certiorari, 310 U.S. 618, to review the affirmance of a judgment
dismissing the complaint in a suit for triple damages under the
Sherman Antitrust Act.
MR. JUSTICE ROBERTS delivered the opinion of the Court.
In this case, the petitioners filed a complaint [
Footnote 1] in the District Court for Western
Washington under § 7 of the
Page 311 U. S. 257
Sherman Act, [
Footnote 2]
for triple damages for alleged violation by the respondents of §§ 1
and 2 of the Act. [
Footnote 3]
The respondents demurred to the amended complaint for failure to
state a cause of action. The District Court treated the demurrer as
a motion to dismiss and dismissed the complaint. The Circuit Court
of Appeals affirmed the judgment. [
Footnote 4]
The question presented is whether the complaint alleges damage
to the petitioners consequent upon a conspiracy to create a
monopoly in the business of bill posting in the Pacific Coast
region, and to accomplish that monopoly by restraining interstate
commerce in the transportation of posters.
The relevant allegations of the complaint may be summarized.
The petitioner C. E. Stevens Company is engaged in the business
of outdoor advertising, which is the business of procuring
locations and erecting structures thereon for the posting of bills
and the painting of signs. Its business is conducted in Washington
and other states. More specifically, the petitioner's activities
are the soliciting, entering into, and execution of contract for
poster service for the display of posters, painted bulletins, and
wall displays. These contracts are secured from advertisers, their
representatives, and advertising agencies located throughout the
United States, and constitute agreements whereby the parties are to
ship posters, lithographs, designs, stencils, etc., interstate with
the purpose that the posters or lithographs shall be placed upon
billboards and the other material used for painting signs on
locations controlled by the bill posting
Page 311 U. S. 258
company. Foster & Kleiser Co., one of the respondents, is
engaged in the same business in the Pacific Coast states and
elsewhere. The other respondents are connected with and controlled
by Foster & Kleiser Co. or its subsidiary, Restop Realty Co.,
the latter being in the business of owning, holding, and leasing
property for outdoor advertising sites on the Pacific Coast.
The usual routine of the business is that the advertiser,
directly or through an agency, contracts with a lithographer for
making posters. The advertiser, either personally or through an
agency, contracts with a bill posting company in the desired
locality for the placing of the posters. The advertiser then
forwards the posters to the bill poster or orders the lithographer
to forward them. Foster & Kleiser Co. is operating under
numerous contracts thus made.
Foster & Kleiser Co. formulated and entered into a plan,
scheme, and conspiracy with others for the purpose of monopolizing
all branches of the outdoor advertising business in the Pacific
Coast area and preventing petitioner and other independents,
so-called, from engaging in that business and securing and
executing contracts therefor and from securing posters for use
therein. The purpose of the conspirators was to prevent
lithographers from supplying posters to independents, including
petitioner, or to advertisers who were customers of petitioner, and
to prevent independents from securing adequate sites for the
display of posters.
The bill asserts that there is an association of paint plant
[
Footnote 5] operators and
poster plant operators, known as "Outdoor Advertising Association
of America, Inc.," of which the owners of separate plants located
in separate cities are members. There is one membership for
each
Page 311 U. S. 259
municipality. Voting rights are according to the number of
separate plants owned and operated by each voting member. Foster
& Kleiser Co. has some six hundred plants, with concomitant
voting rights. By virtue of its voice in the management of the
association, and pursuant to the conspiracy, it caused the
association to threaten to refuse, and to refuse, to post
lithographs if the manufacturers thereof sold or furnished them for
posting by independent plants or furnished samples of posters to
independent plants, with the aim and effect of coercing and
intimidating the lithographers so as to prevent and hamper the
petitioner and other competitors of the association's plants, and
of the respondents, from securing samples or lithographs. Actual
obstruction and hindrance of the independents, including the
petitioner, resulted. Pursuant to the conspiracy, the association
and the conspirators threatened to refuse, and have refused, to
post posters and lithographs for advertisers if they patronized or
made contracts with independent plants. In addition, the
conspirators refused to execute any portion of national contracts
for outdoor advertising if any part of the work had been executed,
or was to be executed, by an independent plant. The movement in
interstate commerce of posters, lithographs, and designs for
outdoor advertising was thus attempted to be monopolized, was
monopolized, and was unreasonably restrained by the
respondents.
Other allegations are made with respect to agreements brought
about by the Foster & Kleiser Co. and other bill posting
concerns to exclude the petitioner and other independents from
participation in the national business of advertising. It is also
alleged that the respondents resorted to various other illegal and
unfair acts and means in the petitioner's locality in an effort to
prevent petitioner from obtaining sites for posting lithographs
Page 311 U. S. 260
and displaying advertising signs, as part of the same general
conspiracy and for the same ultimate purpose. We do not further set
out these allegations, because enough has been said to indicate the
question on which the case turns.
The respondents conceded in the court below, and here, that the
complaint charges a conspiracy in restraint of interstate commerce,
within the purview of the Sherman Act, in view of the decision in
Ramsay Co. v. Associated Bill Posters, 260 U.
S. 501.
The court below, however, agreed with the respondents that the
complaint fails to allege that the conspiracy, so far as it
affected interstate commerce, was effective to injure petitioner,
since there was no allegation that respondents' conduct prevented
the petitioner from obtaining or receiving any posters. It thought
the allegations of damage to petitioner's business were directed to
the local acts of the respondents, rather than to any restraint of
interstate commerce in posters, and, as purely local activities
were the gravamen of the complaint, no violation of the Sherman Act
was sufficiently charged. This upon the principle that local
activities pursued without intent to hinder or restrain interstate
commerce, although they indirectly affect it, cannot flow from or
sustain a finding of conspiracy to interfere with or restrain such
commerce.
The petitioner urges that the complaint charges a general
conspiracy to monopolize the bill posting business on the Pacific
Coast and, as one of the means of such monopoly, to restrain
interstate commerce in posters contributing to the resulting injury
of the petitioner. It insists that the court below was wrong in
construing the complaint as charging a monopoly of local business
not intended to affect interstate commerce.
We hold that the complaint alleges a conspiracy in violation of
§§ 1 and 2 of the Sherman Act. The object
Page 311 U. S. 261
of it is to monopolize or to restrain trade in the bill posting
business on the Pacific Coast, and, in aid of that purpose, to
restrain interstate commerce in posters, and the complaint
sufficiently alleges that such monopoly and restraint inflicted
damage upon the petitioner.
As we have said, the complaint alleges that the petitioner
solicits contracts for poster advertising as does the respondent,
Foster & Kleiser Co. The petitioner is thus in competition with
Foster & Kleiser Co. in the effort to obtain contracts which
call for the interstate shipment of posters for their execution.
The complaint adequately charges a conspiracy to restrain the
transportation of posters in interstate commerce, in aid of the
attempted monopoly. It also charges other means and acts, local in
character, with the same aim. The conspiracy, with its effect on
interstate commerce, is alleged to have caused the petitioner great
expense and loss of profits; to have restrained and prevented
petitioner from establishing a business in San Francisco, "all to
the great injury and damage of plaintiff." The pleading further
alleges that the respondents' acts were injurious to the
petitioner, excluded petitioner from fair competition, and charges
that, because of petitioner's inability to compete with
respondents, petitioner
"has been damaged in that its business was rendered
unprofitable, and the profits of its said trade and commerce have
diminished, and the plaintiff company has suffered loss and been
damaged thereby."
While these allegations are general, we cannot say that they are
inadequate; nor are we able to agree with the court below that they
are coupled with and treated solely as the consequence of local
activities of the respondents.
We think that, in order to state a cause of action, the
petitioner was not bound to aver that it had been wholly unable to
obtain posters.
Page 311 U. S. 262
The judgment is reversed and the cause is remanded for further
proceedings in conformity to this opinion.
Reversed and remanded.
[
Footnote 1]
The suit was brought by the C.E. Stevens Company and two
subsidiaries. The complaint is in three counts, the first setting
forth the claim of the parent company, and each of the others the
claim of one of the subsidiaries, against the respondents. Save as
to the locale of the plaintiffs' business and the amount of damages
demanded, the counts are substantially alike. We shall refer to the
first count as the complaint. The District Court did not pass on
the question of the propriety of the joinder of the several causes
of action, which was raised by the demurrer, and we express no
opinion upon it.
[
Footnote 2]
Act of Oct. 15, 1914, c. 323, § 4, 38 Stat. 731.
[
Footnote 3]
Act of July 2, 1890, c. 647, §§ 1 and 2, 26 Stat. 209.
[
Footnote 4]
109 F.2d 764.
[
Footnote 5]
A plant is a group of sign locations owned or controlled by one
bill poster in one city or community.