Petitioners sued respondents under § 4 of the Clayton Act to
recover treble damages, alleging that respondents had violated §§ 1
and 2 of the Sherman Act by conspiring to restrain, by
monopolizing, and by attempting and conspiring to monopolize, trade
and commerce in ferrovanadium and vanadium oxide. The jury brought
in a verdict for respondents, and petitioners appealed, contending
that the District Court erred in excluding various items of
evidence, in giving certain instructions to the jury, in refusing
to give other instructions, and in other rulings. The Court of
Appeals held that there was insufficient evidence to justify a
jury's finding that respondents' illegal acts were the cause of
petitioners' failure in the vanadium business and that, therefore,
a verdict should have been directed for respondents.
Held: the judgment is vacated and the case is remanded
for a new trial. Pp.
370 U. S.
691-710.
1. In concluding that there should have been a directed verdict
for respondents, the Court of Appeals erred in failing to view the
evidence in the light most favorable to petitioners and to give
petitioners the benefit of all inferences which the evidence fairly
supported, and it erred in holding that there was insufficient
evidence to support a finding that respondents' conduct in fact
caused injury to petitioners' business. It was the jury's function
to weigh the evidence and the inferences to be drawn therefrom, and
to come to an ultimate conclusion as to the facts. Pp.
370 U. S.
696-702.
2. The District Court erred in rejecting petitioners' offer to
prove that they had been excluded from the Canadian market by a
wholly owned subsidiary of one of the respondents, which was acting
as the exclusive purchasing agent for the wartime Office of Metals
Controller of the Canadian Government, but which allegedly operated
in this connection under the control and direction of its parent
corporation for the purpose of carrying out the overall conspiracy
to restrain and monopolize the vanadium industry in the United
States. This offer of proof was relevant evidence of a violation of
the Sherman Act charged in the complaint, and it was not
inadmissible on the ground that the subsidiary corporation was
acting as an arm of the Canadian Government. Pp.
370 U. S.
702-708.
Page 370 U. S. 691
3. The District Court committed several trial errors which
should not be repeated in a new trial. Pp.
370 U. S.
708-710.
(a) The District Court erred in charging the jury that, in the
context of the facts alleged in this case, a conspiracy must be
proved "which was reasonably calculated to prejudice the public
interest by unduly" restraining trade and which was intended "to
injure the general public by" restraining trade. P.
370 U. S.
708.
(b) The District Court misinterpreted the law in defining
"monopolization" and "attempted monopolization" in terms of
"conspiracy to monopolize," and this error was prejudicial, rather
than harmless. Pp.
370 U. S.
708-709.
(c) The District Court erred in its persistent exclusion of
evidence relating to the period before petitioners' entrance into
the industry, since this evidence was clearly material to
petitioners' charge that there was a conspiracy and monopolization
in existence when they came into the industry, and that they were
eliminated in furtherance thereof. Pp.
370 U. S.
709-710.
289 F.2d 86, judgment vacated and case remanded for new
trial.
MR. JUSTICE WHITE delivered the opinion of the Court.
This is a private treble damage action under the antitrust laws.
[
Footnote 1] Continental Ore
Company, a partnership,
Page 370 U. S. 692
and its individual partners, who were plaintiffs in the trial
court, are petitioners here. [
Footnote 2] Henry J. Leir, the principal party in
Continental, had engaged in the buying and selling of metals,
including vanadium products, in Europe prior to 1938, in which year
he immigrated to the United States. This case concerns his
subsequent efforts in this country to build a successful business
in the production and sale of vanadium.
Vanadium is a metal obtained from certain ores which, in this
country, are mined principally on the Colorado plateau. The ore is
processed at mills near the mines into a substance commonly known
as vanadium oxide. The oxide is then transported to the East and
converted into ferrovanadium, [
Footnote 3] which is purchased chiefly by steel companies
for use as an alloy in hardening steels.
The defendants named in the complaint were Vanadium Corporation
of America (VCA), a fully integrated miner and manufacturer of
vanadium products, Union Carbide and Carbon Corporation (Carbide),
and the following four wholly owned subsidiary corporations of the
latter company: United States Vanadium Corporation (USV), engaged
in mining vanadium ore and processing vanadium oxide; Electro
Metallurgical Company (Electro Met), engaged in making
ferrovanadium; Electro Metallurgical Sales Corporation (Electro Met
Sales), engaged in the sale of vanadium oxide and ferrovanadium;
and Electro Metallurgical Company of Canada, Ltd. (Electro Met of
Canada), engaged in selling vanadium products in Canada. The
complaint was filed on November 15,
Page 370 U. S. 693
1949, and service was had on VCA, Carbide and USV. There was no
service on Electro Met, Electro Met Sales, or Electro Met of
Canada. Carbide acquired the assets of Electro Met and Electro Met
Sales by dissolution or merger during the year 1949, prior to the
filing of the complaint herein.
The complaint alleged that, beginning in about 1933, the
defendants and others acting in concert with them violated §§ 1 and
2 of the Sherman Act [
Footnote
4] by conspiring to restrain, by monopolizing, and by
attempting and conspiring to monopolize trade and commerce in
ferrovanadium and vanadium oxide. The defendants were charged with
purchasing and acquiring control over substantially all accessible
vanadium-bearing ore deposits in the United States and
substantially all vanadium oxide produced by others in the United
States, with refusing to sell vanadium oxide to other potential
producers of ferrovanadium, including Continental and its
associates, with apportioning and dividing sales of ferrovanadium
and vanadium oxide among themselves in certain proportions, with
fixing identical prices for the sale of ferrovanadium and vanadium
oxide and for the purchase of ore, and with making certain mutual
arrangements whereby one or more Carbide subsidiaries supplied VCA
with substantial quantities of vanadium oxide at preferential
prices to VCA. The complaint stated that, between 1933 and 1949,
the defendants produced over
Page 370 U. S. 694
99% of all ferrovanadium and over 90% of all vanadium oxide
produced in the United States, and that, during the same period,
the defendants sold over 99% of the ferrovanadium and vanadium
oxide sold in this country. [
Footnote 5]
According to the complaint, as a proximate consequence of
defendants' monopolistic and restrictive practices, independent
producers and distributors of ferrovanadium and vanadium oxide,
including Continental, were eliminated from the business.
Specifically, the complaint detailed several efforts which
Continental made to enter and maintain itself in the vanadium
business, all of which were allegedly frustrated by defendants'
Sherman Act violations: (1) In 1938, Continental negotiated a
contract with Apex Smelting Company of Chicago whereby Apex was to
build and operate a plant for the conversion of oxide to
ferrovanadium by use of the aluminothermic process. Continental and
Apex were to share the profits of this venture. On its part,
Continental agreed to obtain raw materials for Apex and to sell the
finished product. Operations under this contract began in the
spring of 1940, but Apex terminated the agreement in 1942,
allegedly because the illegal activities of defendants prevented
the obtaining of a sufficient supply of vanadium oxide. (2)
Meanwhile, Continental itself had begun to produce a compound
called "Van-Ex," composed of vanadium oxide and other materials,
which was designed for direct introduction into the steel-making
process without prior conversion to ferrovanadium. This venture was
allegedly
Page 370 U. S. 695
terminated in 1944 because of the difficulty of securing raw
materials caused by defendants' unlawful practices, including the
efforts of defendants to obtain ownership or control of the mines
and mills of Continental's suppliers. (3) Continental had developed
a business with a Canadian customer during 1942. When Electro Met
Sales of Canada was appointed by the Canadian Government as the
exclusive wartime agent to purchase and allocate vanadium for
Canadian industries, that company, it is alleged, acting under the
control and direction of its parent, Carbide, eliminated
Continental entirely from the Canadian market and divided
Continental's business solely between defendants. (4) Defendants in
1943, by open threats of reprisals, allegedly frustrated certain
arrangements which Continental had with the Climax Molybdenum
Corporation for the manufacture of ferrovanadium. (5) In January,
1944, Continental contracted with Imperial Paper & Color
Corporation for the processing by the latter of vanadium oxide and
ferrovanadium. Continental agreed to act as sales agent for the
output. The complaint charged that Imperial abandoned the contract
at the end of 1944 because of the inability to secure raw materials
and that Continental then left the vanadium business altogether,
all as a result of the restrictive and monopolistic practices of
the defendants.
Trial was to a jury, and a verdict was returned for defendants.
Continental appealed, asserting error in the trial court's
exclusion of various evidentiary items, in certain of the
instructions given to the jury, in the refusal to give other
instructions, and in other rulings of the trial court. The Court of
Appeals for the Ninth Circuit announced that its task was to review
the correctness of the judgment below, not the reasons therefor,
and, on that basis, affirmed the judgment, 289 F.2d 86, holding
that there was insufficient evidence to justify a jury finding
Page 370 U. S. 696
that defendants' illegal acts were in fact the cause of
Continental's failure in the vanadium business, and hence, that a
verdict for defendants should have been directed. In reaching its
decision, the court stated that it had considered not only all the
evidence admitted by the trial judge, but also all the evidence
offered by the plaintiffs which the trial judge excluded. The court
did not deal with or rule upon any of the alleged trial errors
relied upon by Continental, except for the issue relating to
Continental's alleged exclusion from the Canadian market.
Certiorari was granted, limited to issues which required
examination in the light of previous decisions of this Court and
which presented important questions under the antitrust laws.
368 U. S. 886. We
have concluded, for the reasons discussed hereafter, that the Court
of Appeals' decision must be reversed, and the case remanded for a
new trial.
I
The Court of Appeals was, of course, bound to view the evidence
in the light most favorable to Continental, and to give it the
benefit of all inferences which the evidence fairly supports, even
though contrary inferences might reasonably be drawn. [
Footnote 6] From our examination of
the
Page 370 U. S. 697
rather extensive record, we have concluded that the Court of
Appeals departed from this rule and erred in holding that there was
insufficient evidence to support a finding that respondents'
conduct in fact caused injury to Continental's business.
Continental's fundamental claim throughout was that inadequate
supplies of vanadium oxide were available to it and its associates,
and that respondents' alleged Sherman Act violations caused or
contributed to this shortage. The Court of Appeals acknowledged the
principle in antitrust cases that,
"where the plaintiff proves a loss, and a violation by defendant
of the antitrust laws of such a nature as to be likely to cause
that type of loss, there are cases which say that the jury, as the
trier of the facts, must be permitted to draw from this
circumstantial evidence the inference that the necessary causal
relation exists. [
Footnote
7]"
The court also assumed that the evidence was
Page 370 U. S. 698
adequate to support a jury finding that respondents committed
the alleged violations of the Sherman Act, and that the specific
acts charged to have been done by respondents were performed as
part of the basic plan to monopolize the vanadium market. Nor did
the court take express issue with the averments that adequate
supplies of vanadium oxide were unavailable to Continental during
certain periods, or with the argument that a shortage of vanadium
oxide was the type of consequence that would reasonably be expected
to flow from a conspiratorial and monopolistic arrangement
controlling 99% of the ferrovanadium and vanadium oxide sold in
this country. The court nevertheless concluded, in effect, that
before there could be a sufficient showing of any shortage of
vanadium oxide, or at least before the jury could be permitted to
infer that any such lack of material was chargeable to respondents,
Continental was required to demonstrate both that it made timely
demands for oxide from respondents and that it exhausted all other
possible sources of that material.
The court then examined
seriatim the Apex, Van-Ex,
Climax, Canadian and Imperial ventures, and ruled separately upon
the respondents' alleged damage to Continental in connection with
each of these episodes. As to Apex and Imperial, it was said that
Continental's demands for oxide from respondents were not
sufficiently contemporaneous with the failure of these ventures to
subject respondents to liability. As to the Van-Ex period,
respondents were blameless not because oxide had not been requested
from them, but because Continental failed, in the court's view, to
exhaust at least one other available source. The Canadian and
Climax issues were disposed of on different grounds.
It is apparent from the foregoing that the Court of Appeals
approached Continental's claims as if they were five completely
separate and unrelated lawsuits. We
Page 370 U. S. 699
think this was improper. In cases such as this, plaintiffs
should be given the full benefit of their proof, without tightly
compartmentalizing the various factual components and wiping the
slate clean after scrutiny of each.
". . . [T]he character and effect of a conspiracy are not to be
judged by dismembering it and viewing its separate parts, but only
by looking at it as a whole.
United States v. Patten,
226 U. S.
525,
226 U. S. 544 . . . ; and in
a case like the one before us, the duty of the jury was to look at
the whole picture, and not merely at the individual figures in
it."
American Tobacco Co. v. United States, 147 F.2d 93, 106
(C.A.6th Cir.).
See Montague & Co. v. Lowry,
193 U. S. 38,
193 U. S.
45-46.
Furthermore, we do not believe that respondents' liability under
the antitrust laws can be measured by any rigid or mechanical
formula requiring Continental both to demand materials from
respondents and to exhaust all other sources of supply. The Court
of Appeals appears to have accorded no weight to Continental's
evidence which was offered to show that respondents had interfered
with, acquired, or destroyed the several small independent sources
of vanadium oxide relied upon by Continental. Under the criteria
used by the Court of Appeals, respondents could, with impunity,
concertedly refuse to deal with Continental while the latter was
able to obtain some oxide from independent sources, then proceed at
their leisure to dry up those other sources, and finally insist
that Continental make repeated demands for respondents' oxide
before incurring antitrust liability. The cases relied upon by the
Court of Appeals [
Footnote 8]
clearly do not support any such formula, and we cannot deem the
injury
Page 370 U. S. 700
alleged to flow from a monopolist's elimination of one's
independent suppliers to be so "remote" as to justify refusing to
let the damages issue go to the jury. [
Footnote 9]
Our review of the record discloses sufficient evidence for a
jury to infer the necessary causal connection between respondents'
antitrust violations and petitioners' injury. In concluding that
Continental and Apex had not made sufficient efforts to obtain
vanadium oxide from respondents, the Court of Appeals either
overlooked or interpreted into insignificance the repeated
approaches made to respondents by Continental and Apex in July and
October of 1939, in March and October of 1940, and in June and July
of 1941. The court also failed to notice certain communications
from Apex in September and December, 1941, saying that it could
operate at only partial capacity due to the lack of raw materials.
Nor did the court mention the testimony of an officer of Apex to
the effect that Apex's supply of oxide was irregular and
intermittent, and that the unavailability of oxide was one of the
reasons that Apex did not operate at full capacity. According to
the Court of Appeals, the "critical period" during which
Continental and Apex should have demanded materials from the
respondents was the year preceding the termination of the Apex
contract, which the court placed in June, 1942. But it is quite
plain from the record that Apex notified Continental of its
determination to terminate the contract in January and February of
1942, which followed much more closely the previous refusals of
respondents to deal with Continental and Apex.
Undoubtedly, all of the evidence during this period does not
point in one direction, and different inferences might reasonably
be drawn from it. There was, however, sufficient evidence to go to
the jury, and it is the jury
Page 370 U. S. 701
which "weighs the contradictory evidence and inferences" and
draws "the ultimate conclusion as to the facts."
Tennant v.
Peoria & P.U. R. Co., 321 U. S. 29,
321 U. S.
35.
During the so-called Van-Ex period, the court did not exculpate
respondents because of petitioners' failure to request oxide from
them, but because petitioners supposedly failed to take advantage
of an independent source of supplies. But the evidence relied upon
by the court can just as reasonably be read in a manner favorable
to Continental, and it appears that the court may have
misapprehended significant parts of this record. [
Footnote 10] In any event, the
interpretation and significance of this evidence were for the
jury.
The Court of Appeals also concluded that the respondents did not
contribute to the failure of Imperial to produce ferrovanadium
under its contract with Continental. The court acknowledged, and
there appears to be substantial evidence to this effect, that
Imperial's decision was based upon its concern about a steady and
reliable
Page 370 U. S. 702
source of raw materials. Continental had requested VCA and USV
to provide sizable monthly supplies of oxide in November of 1943,
but the Court of Appeals bracketed this evidence with the Van-Ex
period even though the testimony clearly was that the supplies then
sought were for the Imperial arrangement which was then being
negotiated. Imperial, after signing the contract, carefully
surveyed foreign sources of vanadium, concluded they were
inadequate, and determined not to go into production because a
reliable, long-range source of oxide was not available. In spite of
the refusal of respondents to deal with Continental in November,
1943, and in previous months and years, and in spite of the assumed
monopolistic control of almost all of the vanadium oxide in the
United States, the court ruled that Continental must have requested
oxide from respondents after the contract with Imperial was signed
in January of 1944. We think the jury should be allowed to
determine whether respondents' conduct materially contributed to
the failure of the Imperial venture, to Continental's damage.
II
Continental's alleged elimination from the Canadian market
raises different issues. At the trial, Continental introduced
evidence to show that, beginning in March, 1942, it had shipped
Van-Ex to a Canadian customer each month during the remainder of
that year. There was then received in evidence a letter dated
January 19, 1943, from Continental to Electro Met in New York City
reciting that the new allocation system in Canada [
Footnote 11] had eliminated
Page 370 U. S. 703
Continental from the Canadian market in January, that
Continental had inquired about the matter from the Metals
Controller for the Canadian Government, and that the latter had
referred Continental to Electro Met. The court then struck this
letter from the record and rejected petitioners' offer to prove
that Continental was excluded from the Canadian market by Electro
Met of Canada, a wholly owned subsidiary corporation of Carbide,
acting as exclusive purchasing agent for the Metals Controller but
allegedly operating in this connection under the control and
direction of Carbide for the purpose of carrying out the overall
conspiracy to restrain and monopolize the vanadium industry. To
that end, Continental offered to prove that its former share of the
Canadian market was divided between Carbide and VCA. Continental
offered various correspondence with Electro Met of Canada and a
memorandum and proposed testimony by Continental's vice president
concerning his conversations with an employee of Electro Met who
had communicated with Continental in response to Continental's
letter of January 19, 1943, to Electro Met. The court denied the
entire offer of proof
"for the reason that this is a transaction wholly in the hands
of the Canadian Government, and that whether or not this plaintiff
was permitted to sell his material to a customer in Canada was a
matter wholly within the control of the Canadian Government. "
Page 370 U. S. 704
The Court of Appeals agreed with the trial court and concluded
that Continental was not legally entitled to recover from
respondents for the destruction of its Canadian business. The court
said that no vanadium oxide could be imported into Canada by anyone
other than the Canadian Government's agent, Electro Met of Canada,
which refused to purchase from the petitioners. Thus, according to
the court,
"even if we assume that Electro Metallurgical Company of Canada,
Ltd., acted for the purpose of entrenching the monopoly position of
the defendants in the United States, it was acting as an arm of the
Canadian Government, and we do not see how such efforts as
appellants claim defendants took to persuade and influence the
Canadian Government through its agent are within the purview of the
Sherman Act."
289 F.2d at 94. This ruling was erroneous, and we hold that
Continental's offer of proof was relevant evidence of a violation
of the Sherman Act as charged in the complaint, and was not
inadmissible on the grounds stated by the courts below.
Respondents say that
American Banana Co. v. United Fruit
Co., 213 U. S. 347,
shields them from liability. This Court there held that an
antitrust plaintiff could not collect damages from a defendant who
had allegedly influenced a foreign government to seize plaintiff's
properties. But, in the light of later cases in this Court,
respondents' reliance upon
American Banana is misplaced. A
conspiracy to monopolize or restrain the domestic or foreign
commerce of the United States is not outside the reach of the
Sherman Act just because part of the conduct complained of occurs
in foreign countries.
United States v. American Tobacco
Co., 221 U. S. 106;
United States v. Pacific & Arctic R. & Navigation
Co., 228 U. S. 87;
Thomsen v. Cayser, 243 U. S. 66;
United States v. Sisal Sales Corp., 274 U.
S. 268.
Cf. Steele v. Bulova Watch Co.,
344 U. S. 280;
Branch v. Federal Trade Comm'n, 141 F.2d
Page 370 U. S. 705
31 (C.A.7th Cir.).
See United States v. Aluminum Co. of
America, 148 F.2d 416 (C.A.2d Cir.);
United States v.
National Lead Co., 63 F. Supp.
513 (D.C.S.D.N.Y.),
aff'd, 332 U. S. 332 U.S.
319. [
Footnote 12]
Furthermore, in the
Sisal case,
supra, a
combination entered into within the United States to monopolize an
article of commerce produced abroad was held to violate the Sherman
Act even though the defendants' control of that production was
aided by discriminatory legislation of the foreign country which
established an official agency as the sole buyer of the product
from the producers and even though one of the defendants became the
exclusive selling agent of that governmental authority. Since the
activities of the defendants had an impact within the United States
and upon its foreign trade,
American Banana was expressly
held not to be controlling. [
Footnote 13]
Page 370 U. S. 706
Olsen v. Smith, 195 U. S. 332;
United States v. Rock Royal Co-op, 307 U.
S. 533; and
Parker v. Brown, 317 U.
S. 341, do not help respondents. These decisions, each
of which sustained the validity of mandatory state or federal
governmental regulations against a claim of antitrust illegality,
are wide of the mark. In the present case, petitioners do not
question the validity of any action taken by the Canadian
Government or by its Metals Controller. Nor is there left in the
case any question of the liability of the Canadian Government's
agent, for Electro Met of Canada was not served. What the
petitioners here contend is that the respondents are liable for
actions which they themselves jointly took, as part of their
unlawful conspiracy, to influence or to direct the elimination of
Continental from the Canadian market. As in
Sisal, the
conspiracy was laid in the United States, was effectuated both here
and abroad, and respondents are not insulated by the fact that
their conspiracy involved some acts by the agent of a foreign
government.
From the evidence which petitioners offered, it appears that
Continental complained to the Canadian Metals Controller that
Continental had lost its Canadian business. The Controller referred
Continental to one of the respondents. But there is no indication
that the Controller or any other official within the structure of
the Canadian Government approved or would have approved of joint
efforts to monopolize the production and sale of vanadium, or
directed that purchases from Continental be stopped. The exclusion,
Continental claims, resulted from the action of Electro Met of
Canada, taken within the area of its discretionary powers granted
by the Metals Controller and in concert with or under the direction
of the respondents. The offer of proof at least presented an issue
for the jury's resolution as to whether the loss of Continental's
Canadian business was occasioned by respondents' activities.
Respondents are afforded no
Page 370 U. S. 707
defense from the fact that Electro Met of Canada, in carrying
out the bare act of purchasing vanadium from respondents, rather
than Continental, was acting in a manner permitted by Canadian law.
There is nothing to indicate that such law in any way compelled
discriminatory purchasing, and it is well settled that acts which
are in themselves legal lose that character when they become
constituent elements of an unlawful scheme.
Swift & Co. v.
United States, 196 U. S. 375,
196 U. S. 396;
American Tobacco Co. v. United States, 328 U.
S. 781,
328 U. S. 809;
Steele v. Bulova Watch Co., 344 U.
S. 280,
344 U. S. 287.
See Georgia v. Pennsylvania R. Co., 324 U.
S. 439,
324 U. S.
457-458;
Slick Airways v. American
Airlines, 107 F.
Supp. 199, 207 (D.C.N.J.).
The case of
Eastern Railroad Presidents Conf. v. Noerr Motor
Freight, Inc., 365 U. S. 127,
cited by the court below and much relied upon by respondents here,
is plainly inapposite. The Court there held not cognizable under
the Sherman Act a complaint charging, in essence, that the
defendants had engaged in a concerted publicity campaign to foster
the adoption of laws and law enforcement practices inimical to
plaintiffs' business. Finding no basis for imputing to the Sherman
Act a purpose to regulate political activity, a purpose which would
have encountered serious constitutional barriers, the Court ruled
the defendants' activities to be outside the ban of the Act "at
least insofar as those activities comprised mere solicitation of
governmental action with respect to the passage and enforcement of
laws." 365 U.S. at
365 U. S. 138.
In this case, respondents' conduct is wholly dissimilar to that of
the defendants in
Noerr. Respondents were engaged in
private commercial activity, no element of which involved seeking
to procure the passage or enforcement of laws. To subject them to
liability under the Sherman Act for eliminating a competitor from
the Canadian market by exercise of the discretionary power
Page 370 U. S. 708
conferred upon Electro Met of Canada by the Canadian Government
would effectuate the purposes of the Sherman Act, and would not
remotely infringe upon any of the constitutionally protected
freedoms spoken of in
Noerr.
III
Since our decision concerning the alleged loss of Continental's
Canadian business will in any event require a new trial of the
entire case in view of the close interconnection between the
Canadian and domestic issues, we shall remand the case to the
District Court for further proceedings. We therefore deem it
appropriate to pass upon certain of the alleged trial errors raised
by Continental in the Court of Appeals but not considered by that
court. In passing upon these issues, we are not to be understood as
expressing any views on the merits of those matters raised by
Continental before the Court of Appeals but not discussed here.
An error committed by the trial court, perhaps understandable
because the trial preceded this Court's decision in
Klor's,
Inc. v. Broadway-Hale Stores, Inc., 359 U.
S. 207, was the "public injury" charge. Although
petitioners pleaded a concerted refusal to deal with them by
respondents, a price-fixing conspiracy, and an allocation of
customers, all
per se violations under § 1 of the Sherman
Act, the court charged the jury that a conspiracy must be proved
"which was reasonably calculated to prejudice the public interest
by unduly" restraining trade, and which was intended "to injure the
general public by" restraining trade. Under the rule stated in
Klor's, this charge was error.
The trial court also erred in its treatment of monopolization.
Initially, in its charge to the jury, the court defined
"monopolize" as referring to
"the joint acquisition or maintenance by the members of the
conspiracy formed for that purpose, of the power to control and
dominate
Page 370 U. S. 709
interstate trade and commerce in a commodity to such an extent
that they are able, as a group, to exclude actual or potential
competitors from the field, accompanied with the intention and
purpose to exercise such power."
The court also related its definition of "attempt to monopolize"
to action taken by a combination or conspiracy. The jury was
further instructed that
"an essential element of the illegal monopoly or monopolization
is the existence of a combination or conspiracy to acquire and
maintain the power,"
and that a verdict must be returned for the defendants "if you
find that the plaintiffs have not proved that there was . . . a
conspiracy." Petitioners duly excepted to the charge on the ground
that they were entitled to prevail if they could prove that either
respondent monopolized unilaterally.
Petitioners' complaint did not preclude reliance on unilateral
monopolization, and the evidence offered was relevant and material
to such a charge. The trial court's misinterpretation of the law in
defining "monopolization" and "attempted monopolization" in terms
of "conspiracy to monopolize" was therefore prejudicial, rather
than harmless. This error should not be repeated in a new trial.
[
Footnote 14]
The trial court further erred in its persistent exclusion of
evidence relating to the pre-1938 period, on the ground that since
Mr. Leir came to this country in 1938 nothing which transpired
earlier could be relevant to his suit. Petitioners sought to
introduce evidence that the conspiracy and monopolization alleged
began in the early 1930's, that overt acts in furtherance
thereof
Page 370 U. S. 710
occurred in the 1930's, and that it was pursuant to this
anticompetitive scheme that respondents sought to and did eliminate
petitioners from the vanadium industry after 1938. This evidence
was clearly material to petitioners' charge that there was a
conspiracy and monopolization in existence when they came into the
industry, and that they were eliminated in furtherance thereof.
[
Footnote 15] We do not mean
that a trial court may not place reasonable limits upon such
evidence or set a reasonable cut-off date, evidence before which
point is to be considered too remote to have sufficient probative
value to justify burdening the record with it. [
Footnote 16] But that was not the basis for
this exclusionary ruling.
We conclude that the judgment of the Court of Appeals must be
vacated, and the case remanded to the District Court for further
proceedings consistent with this opinion.
It is so ordered.
MR. JUSTICE FRANKFURTER took no part in the consideration or
decision of this case.
[
Footnote 1]
The action was brought under § 4 of the Clayton Act, 15 U.S.C. §
15:
"Any person who shall be injured in his business or property by
reason of anything forbidden in the antitrust laws may sue therefor
in any district court of the United States . . . and shall recover
threefold the damages by him sustained, and the cost of suit,
including a reasonable attorney's fee."
[
Footnote 2]
The partnership is the successor in interest to Continental Ore
Corporation, organized in 1938 but later dissolved.
[
Footnote 3]
During the years in question here, the conversion was
accomplished by respondents in electric furnaces. Continental
sought to introduce the making of ferrovanadium by the
aluminothermic process, which it claimed was more efficient and
economical than respondents' method.
[
Footnote 4]
The Sherman Act, §§ 1-2, 15 U.S.C. §§ 1-2, provide in pertinent
part:
"Every contract, combination in the form of trust or otherwise,
or conspiracy, in restraint of trade or commerce among the several
States, or with foreign nations, is declared to be illegal. . .
."
"Every person who shall monopolize, or attempt to monopolize, or
combine or conspire with any other person or persons, to monopolize
any part of the trade or commerce among the several States, or with
foreign nations, shall be deemed guilty of a misdemeanor. . .
."
[
Footnote 5]
The complaint alleged that VCA sold approximately two-thirds of
all ferrovanadium and vanadium oxide sold by defendants (which was
said to amount to approximately 99% of all ferrovanadium and
vanadium oxide sold and consumed in the United States), while
Electro Met Sales (a Carbide subsidiary) sold approximately
one-third. According to petitioners' evidence, the Carbide group
produced approximately 77% of domestic vanadium oxide, while VCA
produced about 65% of ferrovanadium.
[
Footnote 6]
As Professor Moore has indicated,
"In ruling on the motion [for directed verdict], the trial court
views the evidence in the light most favorable to the party against
whom the motion is made. On appeal, likewise, the appellate court
must consider the evidence in its strongest light in favor of the
party against whom the motion for directed verdict was made, and
must give him the advantage of every fair and reasonable intendment
that the evidence can justify."
5 Moore's Federal Practice 2316 (2d ed., 1951).
See Pawling v.
United States, 4 Cranch 219;
Gunning v.
Cooley, 281 U. S. 90;
Tennant v. Peoria & P.U. R. Co., 321 U. S.
29.
Cf. Smith v. Reinauer Oil Transport, 256
F.2d 646, 649 (C.A.1st Cir.).
The same rule governs in ruling upon motions for directed
verdict in treble damage suits under the antitrust laws.
Schad
v. Twentieth Century-Fox Film Corp., 136 F.2d 991, 993 (C.A.3d
Cir.);
Wisconsin Liquor Co. v. Park & Tilford Distillers
Corp., 267 F.2d 928, 930 (C.A.7th Cir.).
Cf. United States
v. Diebold, Inc., 369 U. S. 654,
369 U. S. 655;
Poller v. Columbia Broadcasting System, Inc., 368 U.
S. 464,
368 U. S.
473.
[
Footnote 7]
289 F.2d at 90. For this statement, the Court of Appeals relied
upon
Bigelow v. RKO Radio Pictures, Inc., 327 U.
S. 251;
Eastman Kodak Co. of New York v. Southern
Photo Materials Co., 273 U. S. 359;
Story Parchment Co. v. Paterson Parchment Paper Co.,
282 U. S. 555;
Martin v. Herzog, 228 N.Y. 164, 170-171, 126 N.E. 814,
816. Thus, in
Bigelow, this Court stated:
"[I]n the absence of more precise proof, the jury could conclude
as a matter of just and reasonable inference from the proof of
defendants' wrongful acts and their tendency to injure plaintiffs'
business, and from the evidence of the decline in prices, profits
and values, not shown to be attributable to other causes, that
defendants' wrongful acts had caused damage to the plaintiffs."
327 U.S. at
327 U. S.
264.
"The most elementary conceptions of justice and public policy
require that the wrongdoer shall bear the risk of the uncertainty
which his own wrong has created."
Id. at
327 U. S. 265.
See Bordonaro Bros. Theatres v. Paramount Pictures, 176
F.2d 594, 597 (C.A.2d Cir.);
Atlas Building Prod. Co. v.
Diamond Block & Gravel Co., 269 F.2d 950, 957-959
(C.A.10th Cir.).
[
Footnote 8]
Royster Drive-In Theatres, Inc. v. American
Broadcasting-Paramount Theatres, Inc., 268 F.2d 246, 251;
Standard Oil Co. of California v. Moore, 251 F.2d 188,
198;
Congress Bldg. Corp. v. Loew's, Inc., 246 F.2d 587,
596-598;
Milwaukee Towne Corp. v. Loew's, Inc., 190 F.2d
561, 568.
[
Footnote 9]
Cf. Klor's Inc. v. Broadway-Hale Stores, Inc.,
359 U. S. 207.
[
Footnote 10]
The Court of Appeals' interpretation of the evidence was that,
in 1943, Continental declined to deal with Nisley & Wilson, an
independent producer of vanadium oxide, particularly in October,
1943, when Continental supposedly failed to make any effort to
procure Nisley & Wilson's flaked vanadium oxide, and in
January, 1944, when, according to the court, Continental refused to
buy some 300,000 pounds of "oxide" offered by Nisley & Wilson
at the time the latter went out of business. But in October, 1943,
Nisley & Wilson was entirely engaged in processing ore
furnished by the Government, and its vanadium oxide product was
obtainable only through allocation by the War Production Board. The
correspondence between Nisley & Wilson and Continental was
looking toward a postwar relationship, and Continental's letter
might well be interpreted by a jury not as a refusal to buy, but as
a statement of intention by Continental to cooperate with Nisley
& Wilson to keep the latter's mill running during peacetime. As
for the 300,000 pounds of "oxide" which the court said was offered
to Continental, the material actually was ore, not oxide.
Furthermore, Nisley & Wilson did not own the ore, and failed in
its effort to buy it from the Government.
[
Footnote 11]
Canada's entry into World War II prompted the Canadian
Government to take extraordinary measures to assure optimum
availability of strategic materials to Canadian private industries
engaged in the war effort. Pursuant to these measures, the Office
of Metals Controller was established and given broad powers to
regulate the procurement of the materials and to allocate them to
industrial users.
See Order of the Governor General in
Council, P.C. 3187, July 15, 1940. The Metals Controller enlisted
the aid of Electro Met of Canada in early 1943, delegating to it
the discretionary agency power to purchase and allocate to Canadian
industries all vanadium products required by them. The validity of
these wartime measures and delegations under Canadian law is not
here contested.
Cf. Reference Re Regulations (Chemicals)
Under War Measures Act, 1 D.L.R. (1943) 248.
[
Footnote 12]
See also Brewster, Antitrust and American Business
Abroad 65-75 (1958); Fugate, Foreign Commerce and the Antitrust
Laws 20-55 (1958); Atty.Gen.Nat. Comm. Antitrust Rep. 66-77 (1955);
Kramer, Application of the Sherman Act to Foreign Commerce, 3
Antitrust Bull. 387 (1958); Carlston, Antitrust Policy Abroad, 49
N.W.U.L.Rev. 569 (1954).
[
Footnote 13]
"The circumstances of the present controversy are radically
different from those presented in
American Banana Co. v. United
Fruit Co., supra, and the doctrine there approved is not
controlling here. . . ."
"Here, we have a contract, combination and conspiracy entered
into by parties within the United States and made effective by acts
done therein. The fundamental object was control of both
importation and sales of sisal and complete monopoly of both
internal and external trade and commerce therein. The United States
complain of a violation of their laws within their own territory by
parties subject to their jurisdiction, not merely of something done
by another government at the instigation of private parties. True,
the conspirators were aided by discriminating legislation, but, by
their own deliberate acts, here and elsewhere, they brought about
forbidden results within the United States. They are within the
jurisdiction of our courts, and may be punished for offenses
against our laws."
274 U.S. at
274 U. S.
275-276.
[
Footnote 14]
Among the cases in which this Court has condemned unilateral
monopolization are
Maryland & Virginia Milk Producers Ass'n
v. United States, 362 U. S. 458,
362 U. S. 468;
Lorain Journal v. United States, 342 U.
S. 143,
342 U. S. 154.
See also United States v. Aluminum Co., 148 F.2d 416
(C.A.2d Cir.);
United States v. United Shoe Mach.
Co., 110 F.
Supp. 295 (D.Mass.),
aff'd, 347 U.
S. 521.
[
Footnote 15]
Thus, in
Standard Oil Co. v. United States,
221 U. S. 1,
221 U. S. 75-76,
this Court considered evidence as to defendants' acts in 1879-1882,
prior to the Sherman Act's passage in 1890, in order to ascertain
the monopolistic intent or purpose of the founders of the Standard
Oil Trust. And, in
Kansas City Star Co. v. United States,
240 F.2d 643, 650-651 (C.A.8th Cir.), evidence from the period
preceding the criminal statute of limitations was allowed into
consideration to show that defendants' course of conduct over a
period of years indicated that they retain an unlawful intent
during the immediate pre-indictment period.
[
Footnote 16]
See United States v. Socony-Vacuum Oil Co.,
310 U. S. 150,
310 U. S.
228-231.