Kerry M. Gough, Trustee in Bankruptcy of Louis Rosen, D/B/A Walnut Creek Furniture v. Rossmoor Corporation, and Crestmark Carpet and Drapery Company

585 F.2d 381
CourtCourt of Appeals for the Ninth Circuit
DecidedOctober 27, 1978
Docket77-2047
StatusPublished
Cited by132 cases

This text of 585 F.2d 381 (Kerry M. Gough, Trustee in Bankruptcy of Louis Rosen, D/B/A Walnut Creek Furniture v. Rossmoor Corporation, and Crestmark Carpet and Drapery Company) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kerry M. Gough, Trustee in Bankruptcy of Louis Rosen, D/B/A Walnut Creek Furniture v. Rossmoor Corporation, and Crestmark Carpet and Drapery Company, 585 F.2d 381 (9th Cir. 1978).

Opinions

MERRILL, Circuit Judge:

The question on appeal is whether, absent a definition of the relevant market, the record supports a judgment that appellants violated §§ 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2. We hold that it did not and reverse judgment of the district court.

THE CAST

Rossmoor Leisure World (Leisure World) is a co-operative housing development for retired adults, located in Walnut Creek, California.

[383]*383Rossmoor Corporation (Rossmoor) is the builder and developer of Leisure World.

Leisure World Foundation (the Foundation) is a nonprofit corporation established to perform administrative services for the residents of Leisure World and also to perform organizational, promotional and sales functions for Rossmoor. In order to meet the requirements for securing FHA financing for construction of the housing, the Foundation is formally independent of Rossmoor.1 (Title to the community recreational facilities is held in trust by another independent foundation that appears less frequently in the ease: the Golden Rain Foundation.)

Crestmark Carpet and Drapery Company (Crestmark) is a wholly owned subsidiary of Rossmoor, formed for the purpose of selling carpets and draperies to the Leisure World residents. The Foundation has leased space in its administration building to Crestmark giving it the exclusive right to sell carpets and draperies from a site within Leisure World.

The Leisure World News (the News) is a community newspaper owned and published by the Foundation. It is primarily concerned with Leisure World events and is used as a promotional device for prospective purchasers of housing.

Louis Rosen was the owner of a furniture and carpet store in Walnut Creek; appellee Gough is his trustee in bankruptcy.

THE GRIEVANCE

In April, 1965, the Foundation began publishing the Leisure World News. Rosen was solicited by the advertising manager and placed seven carpet, drapery and furniture advertisements in various issues of the News. In July, 1965, under a new policy, the News refused to accept further advertisements from carpet retailers other than Crestmark, and no further advertisements from Rosen were accepted.

Rosen then commenced this action, alleging violations of § 1 and § 2 of the Sherman Act, 15 U.S.C. § 1 and § 2. He alleged that Rossmoor, the Foundation, Golden Rain Foundation and Crestmark had conspired to restrain competition by refusing to allow him to advertise in the News, and that the conspiracy was with the intent of enabling Crestmark to monopolize the market for carpets in Leisure World. He sought treble damages under § 4 of the Clayton Act, 15 U.S.C. § 15, for injuries suffered by him by reason of the Sherman Act violations.

THE CASE

The case has been before this court on two prior occasions.

The Foundation and Golden Rain Foundation were dismissed from the case prior to trial, although their status as coconspira-tors was retained. Following trial to a jury the issues were submitted to the jury in the form of interrogatories, which were answered by the jury as follows:

“1. Did the defendants and Leisure World Foundation or Golden Rain Foundation by means of a common plan, scheme or design have the power, and intention to exclude plaintiff from the [384]*384carpet and/or other business in Rossmoor Leisure World?
Yes.
2. Did defendants enter into a common plan, scheme or design with Leisure World Foundation or Golden Rain Foundation to prevent plaintiff from advertising carpets in the Leisure World News such as to act as a restraint on plaintiff’s business of selling carpets or other merchandise at Rossmoor Leisure World?
Yes.
3. If your answer to either of the preceding questions is in the affirmative, did such restraint have a substantial effect on interstate commerce or the flow of interstate commerce?
No.
4. Has plaintiff suffered any monetary damage by reason of its inability to advertise in Leisure World News?
Yes.
5. If so, please indicate the amount opposite the appropriate type of damage you find to have been suffered.
Net Profits $18,143.00
Good Will 22,738.00”

Because of the jury answer to interrogatory No. 3, relating to interstate commerce, the trial court entered judgment for the defendants on the ground that the court lacked jurisdiction under the Sherman Act. The first appeal to this court was then taken. During the pendency of that appeal Rosen was adjudicated bankrupt and appel-lee Gough, as trustee in bankruptcy, was substituted as plaintiff-appellant. On Gough’s appeal this court held that a substantial effect on interstate commerce appeared as matter of law and that it had been error to put the jurisdictional question to the jury. Gough v. Rossmoor Corp., 487 F.2d 373, 377 (9th Cir. 1973). This court originally directed that the case be remanded with instructions that judgment be entered for the plaintiff in accordance with the jury’s findings. Appellants sought rehearing and asked this court to enter judgment notwithstanding the verdict on the ground that the record did not support the jury’s findings and that the findings did not support judgment in that no finding had been made defining the relevant market, and that there was nothing in the record upon which such a finding could have been made. This court declined to rule upon appellants’ motion for judgment but amended its original opinion and remanded the case to the trial court for further proceedings consistent with the opinion. 487 F.2d at 378. On remand Rossmoor renewed its motions for judgment n. o. v. and new trial.

The trial court ruled that it was foreclosed by this court’s opinion from entertaining the post trial motions and the second appeal to this court was taken, this time by the defendants. We held that the trial court was not foreclosed from entertaining the motions on their merits and remanded with instructions that appellants’ motions be entertained. Gough v. Rossmoor Corp., 533 F.2d 453 (9th Cir. 1975), cert. denied, 429 U.S. 857, 97 S.Ct. 155, 50 L.Ed.2d 134 (1976).

On the second remand the trial court denied the motions, ruling that the evidence was sufficient to permit the jury to find that there was a common plan between Rossmoor, Crestmark and the Foundation, under which the Foundation would cause the News to refuse to allow Rosen to advertise his carpets in the News, which plan was intended to lessen competition. Judgment was entered for Rosen in treble the damages found by the jury, with interest, costs and counsel fees. This appeal followed.

THE ISSUES

Appellants assign error in a number of respects,2 with only two of which we shall concern ourselves.

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Bluebook (online)
585 F.2d 381, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kerry-m-gough-trustee-in-bankruptcy-of-louis-rosen-dba-walnut-creek-ca9-1978.