Herman Schwabe, Inc. v. United Shoe MacHinery Corporation

297 F.2d 906, 1962 U.S. App. LEXIS 6307, 1961 Trade Cas. (CCH) 70,187
CourtCourt of Appeals for the Second Circuit
DecidedJanuary 4, 1962
Docket100, Docket 26951
StatusPublished
Cited by126 cases

This text of 297 F.2d 906 (Herman Schwabe, Inc. v. United Shoe MacHinery Corporation) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Herman Schwabe, Inc. v. United Shoe MacHinery Corporation, 297 F.2d 906, 1962 U.S. App. LEXIS 6307, 1961 Trade Cas. (CCH) 70,187 (2d Cir. 1962).

Opinion

FRIENDLY, Circuit Judge.

Plaintiff, a New York corporation having its principal place of business in Brooklyn, was organized in 1939 to manufacture shoe machinery, and to distribute in interstate commerce shoe machinery made by itself or by others, primarily European manufacturers. By its complaint, filed in the District Court for the Eastern District of New York on May 27, 1957, it sought to recover from defendant United Shoe Machinery Corporation, a New Jersey corporation having its principal place of business in Boston, threefold damages for the entire period since plaintiff’s organization, for injury to its “business or property by reason of anything forbidden in the antitrust laws,” as provided in § 4 of the Clayton Act, 15 U.S.C.A. § 15. The complaint charged that defendant had monopolized trade or commerce in a manner forbidden by § 2 of the Sherman Act, 15 U.S.C.A. § 2, as found by the District Court for Massachusetts in a suit in equity, United States v. United Shoe Machinery Corporation, infra, brought by the Government in 1947, and decided by that court in 1953 and by the Supreme Court in 1954, 347 U.S. 521, 74 S.Ct. 699, 98 L.Ed. 910. We have previously affirmed an order granting defendant’s motion, under the statute of limitations added to the Clayton Act by the Act of July 7, 1955, 69 Stat. 283, 15 U.S.C.A. § 15b, for summary judgment as to all damages accrued before May 27, 1953, Herman Schwabe, Inc. v. United Shoe Machinery Corp., 274 F.2d 608 (2 Cir.), cert. denied 363 U.S. 811, 80 S.Ct. 1247, 4 L.Ed.2d 1153 (1960).

At the end of a trial lasting some nine court days, Chief Judge Bruchhausen directed a verdict for defendant and entered judgment dismissing the complaint. Appellant complains not only of the direction of the verdict but of a number of other rulings. Among these are what is claimed to have been an undue restriction of plaintiff’s right, under § 5 of the Clayton Act, 15 U.S.C.A. § 16, to rely on the decree in the Government’s suit as prima facie evidence; the treatment of a provision of the decree providing for United’s sales of machines previously leased as if this granted anti-trust immunity; the exclusion of evidence of alleged acts of monopolization which antedated May 27, 1953, but which, appellant claims, continued to have an effect thereafter; failure to require United to produce certain documents which, appellant *908 urges, would have aided its endeavor to explain away testimony by Mr. Schwabe, its president and sole stockholder, before a grand jury that had been investigating United’s business practices in 1947 just prior to the filing of the Government’s equity suit, 1 and to mitigate the effect of its answer to a Government questionnaire in 1948; 2 the exclusion, as hearsay, of written and oral statements from potential customers; and the exclusion of expert testimony as to damages and various exhibits tendered in connection therewith. Counsel indicated that decision by us as to all these rulings would be welcome since the same issues have arisen, or are likely to arise, in a treble damage suit by a different plaintiff in the District of Massachusetts in which the same attorneys are currently engaged, although any decision by us could have no binding effect on that court. We do not find it appropriate to rule expressly on any of these points save the two last mentioned, since, in our view, plaintiff failed to present evidence of damage sufficient to warrant submission to the jury, and any errors with respect to other elements of the case were therefore not prejudicial.

The economic background is so fully yet (considering its complexity) succinctly set out in Judge Wyzanski’s admirable and much admired opinion, United States v. United Shoe Machinery Corp., 110 F.Supp. 295 (D.Mass.1953), aff’d per curiam, 347 U.S. 521, 74 S.Ct. 699, 98 L.Ed. 910 (1954), as to relieve us of need for any but the most summary statement. The court there found that United had acquired control of the shoe machinery market, in which it had attained a “75 plus percentage,” by three principal means, the first two of which were innocent and the third not. These were “the original constitution of the company,” approved in United States v. United Shoe Machinery Co., 247 U.S. 32, 38 S.Ct. 473, 62 L.Ed. 968 (1918); “the superiority of United’s products and services”; and “the leasing system,” as to which the court particularly mentioned “the 10-year term, the full capacity clause, the return charges, and the failure to segregate service charges from machine charges,” as well as the aid the leasing device gave “United in maintaining a pricing system which discriminates between machine types.” 110 F.Supp. at 343-344. The Court’s decree, dated February 18, 1958, found generally that United had violated § 2 of the Sherman Act “by monopolizing the shoe machinery trade and commerce among the several States” and specifically that “All leases made by defendant which include either a ten-year term, or a full capacity clause, or deferred payment charges, and all leases under which during the life of the leases defendant has rendered repair and other service without making them subject to separate, segregated charges, are declared to have been means whereby defendant monopolized the shoe machinery market.” The decree provided that “after A Day” defendant should not offer any machine type for lease unless it also offered the same for sale and should not make any leases save on meeting certain conditions therein defined 3 *909 and that “before B Day” defendant should present plans for terminating all outstanding leases and for disposing of certain parts of its business other than the manufacture of shoe machinery. Ultimately “A Day” was fixed as January 1, 1955, and “B Day” as April 1, 1955.

As the statutory language suggests, recovery under section 4 of the Clayton Act, as under its predecessor, § 7 of the Sherman Act, 26 Stat. 209, 210 (1890), “cannot be had unless it is shown, that, as a result of defendants’ acts, damages in some amount susceptible of expression in figures resulted,” Keogh v. Chicago & N. W. Ry. Co., 260 U.S. 156, 165, 43 S.Ct. 47, 50, 67 L.Ed. 183 (1922). 4 Although later Supreme Court decisions have made it plain that “a defendant whose wrongful conduct has rendered difficult the ascertainment of the precise damages suffered by the plaintiff, is not entitled to complain that they cannot be measured with the same exactness and precision as would otherwise be possible,” Eastman Kodak Co. v. Southern Photo Materials Co., 273 U.S. 359, 379, 47 S.Ct. 400, 405, 71 L.Ed. 684 (1927); Story Parchment Co. v. Paterson Parchment Paper Co., 282 U.S. 555, 563, 51 S.Ct. 248, 75 L.Ed.

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Cite This Page — Counsel Stack

Bluebook (online)
297 F.2d 906, 1962 U.S. App. LEXIS 6307, 1961 Trade Cas. (CCH) 70,187, Counsel Stack Legal Research, https://law.counselstack.com/opinion/herman-schwabe-inc-v-united-shoe-machinery-corporation-ca2-1962.