Caller-Times Publishing Co. v. Triad Communications, Inc.

791 S.W.2d 163, 1990 WL 52246
CourtCourt of Appeals of Texas
DecidedMay 10, 1990
Docket13-88-328-CV
StatusPublished
Cited by6 cases

This text of 791 S.W.2d 163 (Caller-Times Publishing Co. v. Triad Communications, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Caller-Times Publishing Co. v. Triad Communications, Inc., 791 S.W.2d 163, 1990 WL 52246 (Tex. Ct. App. 1990).

Opinions

OPINION ON MOTION FOR REHEARING

KENNEDY, Justice.

Appellee’s motion for rehearing is granted, and our prior opinion is withdrawn.

Triad Communications, Inc. d/b/a Wheels and Keels brought suit against the Caller-Times Publishing Company, Inc. (publisher of the Corpus Christi Caller-Times newspaper), claiming that the Caller-Times engaged in monopolization and predatory pricing practices in violation of the Texas Free Enterprise and Antitrust Act of 1983, Tex.Bus. & Com.Code Ann. §§ 15.01-15.51. Triad also claimed that the Caller-Times tortiously interfered with its [165]*165contractual and business relationships. The jury found that the Caller-Times targeted Wheels and Keels’ customers for special deals and that such targeting proximately caused Wheels and Keels damages of $364,416.00. Accordingly, the trial judge entered judgment for $1,096,248.00, trebling the jury’s damage award pursuant to Tex.Bus. & Com.Code Ann. § 15.21(a)(1) (Vernon 1987). The trial court ordered prejudgment interest, injunctive relief, and attorney’s fees.

The Caller-Times raises points on appeal concerning the legal and factual sufficiency of the evidence to support liability and damages both under antitrust and tortious interference theories, the award of prejudgment interest, and the award of a permanent injunction.

The Caller-Times’ first six points of error relate to Triad’s antitrust claims. The Caller-Times claims that the trial court erred in overruling its motion for judgment non obstante veredicto because Triad failed to prove that the Caller-Times’ advertising rates or prices offered were below its average variable cost. In conjunction with this claim, the Caller-Times argues that the jury’s finding that it targeted Wheels and Keels customers does not constitute a violation of the Texas antitrust statute. On the other hand, Triad argues that targeting its customers for special deals is exclusionary conduct, which will support a monopolization claim, and that federal case law is still unresolved on the question of what constitutes predatory pricing.

Triad brought suit based upon alleged violations of Tex.Bus. & Com.Code Ann. § 15.05(b) (Vernon 1987) which states: “It is unlawful for any person to monopolize, attempt to monopolize, or conspire to monopolize any part of trade or commerce.” Tex.Bus. & Com.Code Ann. § 15.04 (Vernon 1987) provides that the purpose of the Act is to maintain and promote economic competition in trade and commerce. To the extent consistent with this purpose, the Act must be construed in harmony with federal judicial interpretations of comparable federal antitrust statutes. See Tex.Bus. & Com.Code Ann. § 15.04 (Vernon 1987). The language of the federal statute dealing with monopolization is similar to that of Tex.Bus. & Com.Code Ann. § 15.05(b). See 15 U.S.C.A. § 2 (Supp.1990) (the Sherman Act).

Antitrust laws were enacted to safeguard healthy competition in the marketplace. These laws protect competitors from unfair competition, not a competitor’s growth or development based upon a superior product, business acumen, or historical accident. United States v. Grinnell Corp., 384 U.S. 563, 86 S.Ct. 1698, 1704, 16 L.Ed.2d 778 (1966).

A plaintiff must prove two elements to establish an attempted monopolization claim under § 2 of the Sherman Act: 1) the specific intent to accomplish an illegal result and 2) a dangerous probability that the attempt will be successful. Adjusters Replace-A-Car v. Agency Rent-A-Car, Inc., 735 F.2d 884, 887 (5th Cir.1984), cert. denied, 469 U.S. 1160, 105 S.Ct. 910, 83 L.Ed.2d 924 (1985). The first element may be established through predatory pricing, which Triad specifically alleged.

Our review of the evidence shows that in 1984, George Magel and David Mock, former Caller-Times employees, purchased Wheels and Keels for $10,000.00. The circular featured display and classified advertisements of automobiles and boats. Its market was primarily Corpus Christi and the surrounding area. Six months after purchasing the circular, Magel and Mock generated $40,000.00 to $50,000.00 in business. In 1985, the business grossed $178,-000.00. At some point, business began dropping off. Magel and Mock, believing that the Caller-Times was engaged in monopolistic practices, filed suit alleging that special deals were being offered to Wheels and Keels customers. Specifically, they alleged that deals were being offered to customers agreeing not to advertise in Wheels & Keels.

Victor Hernandez runs a transmission repair shop in Corpus Christi. He advertised in Wheels and Keels. According to Hernandez, after Mock and Magel purchased Wheels and Keels, someone from [166]*166the Caller-Times named Luna contacted him. Ms. Luna told him that she could give him the same ad he purchased from Wheels and Keels for ten to twelve dollars less. She told Hernandez that she was giving him the fifty-two week rate. Hernandez testified that he was the one who first mentioned Wheels and Keels to the individual from the Caller-Times. He asked her if she was looking at the ad he had placed in Wheels and Keels. She said “no,” but she would get a copy of the ad to examine.

David Mock testified that the Caller-Times’ employees approached Wheels and Keels’ accounts and offered customers special deals meant to take business away from Wheels and Keels. He said that it had an adverse impact on the business and curtailed growth. As an example, Mock testified that on February 27, 1985, Wheels and Keels ran an ad for Gulfway Motors. Gulfway was supposed to run the ad for two days, but Mock learned that Gulfway did not want the second ad to run. The day before, an ad had appeared in the Caller-Times, using a photograph taken by Mock and given to Gulfway. Mock said that Gulfway paid about $.47 a line; however, the rate card published by the Caller-Times indicated that they should have been charged double that amount. Subsequently, Gulfway did very little business with Wheels and Keels.

Liberty Mobile Homes also ran ads with the Caller-Times and Wheels and Keels. Before Magel and Mock took over the paper, the Caller-Times was charging Liberty $1.02 a line for an ad. In January 1985, the Caller-Times began charging $.55 a line. Mock testified that after that time Liberty never ran the same volume of ads with Wheels and Keels as they had previously.

Vista Chevrolet started advertising in Wheels and Keels in March, 1985 and stopped in May, 1985. The Caller-Times’ bill for the following month indicated that Vista had received a reduction in rates, from $.52 to $.30 a line. Pagan-Lewis started running ads in Wheels and Keels at the end of 1984. In March, 1985, they ran full page ads. In May, 1985, after Pagan-Lewis had signed a six month contract with Wheels and Keels, they were given a $.30 per-line charge from the Caller-Times. Pagan-Lewis then canceled its Wheels and Keels contract.

Ron Cardwell, an advertising agent, testified that he handled a Volks-wagon/Porsche/Audi account. He never advertised in Wheels and Keels. He said that he learned from David Mock in April, 1985, that the Caller-Times was offering half-price deals to car dealerships. Card-well said that he spoke to Gary Crews at the Caller-Times who verified that fact. Cardwell indicated that Crews said that he had forgotten to tell him about it. Card-well believed that it made no sense for a salesman to neglect to tell a customer about a half-price deal.

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791 S.W.2d 163, 1990 WL 52246, Counsel Stack Legal Research, https://law.counselstack.com/opinion/caller-times-publishing-co-v-triad-communications-inc-texapp-1990.