Mar-Farr Corp. v. Copley Press, Inc.

64 F.R.D. 456
CourtDistrict Court, N.D. Illinois
DecidedSeptember 11, 1974
DocketNo. 74 C 1250
StatusPublished
Cited by6 cases

This text of 64 F.R.D. 456 (Mar-Farr Corp. v. Copley Press, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mar-Farr Corp. v. Copley Press, Inc., 64 F.R.D. 456 (N.D. Ill. 1974).

Opinion

MEMORANDUM OPINION AND ORDER

BAUER, District Judge.

This cause comes before the Court on defendants’ motion to dismiss on the grounds of lack of jurisdiction over the subject matter pursuant to Rule 12(b). Plaintiff initiated this action by invoking the jurisdiction of this Court under 15 U.S.C. §§ 15 and 15/26" style="color:var(--green);border-bottom:1px solid var(--green-border)">26 and under 28 U.S.C. § 1337 which grant district courts original jurisdiction of civil actions arising under any Act of Congress regulating trade and commerce including antitrust actions.

Plaintiff, in its complaint, alleges, inter alia, violation of Sherman Act §§ 1 and 2, 15 U.S.C. §§ 1 and 1px solid var(--green-border)">2, and seeks treble damages in accordance with § 4 of the Clayton Act, 15 U.S.C. § 15.

Plaintiff is an Illinois corporation doing business as Volz News Agency. The Agency has been distributing for 77 years in Lockport, Illinois, and environs, the Herald-News which is published by the defendant, Copley Press, Inc. The main thrust of the complaint is that the defendant has fixed the price at which newspapers published by it may be resold to subscribers. Consequently, the plaintiff distributor was unable to continue serving home delivery customers and was forced to surrender the home delivery, or some part thereof, to the defendant Copley Press, Inc., which then took over the home delivery and maintained it at a fixed price.

The net result of this conduct, plaintiff contends, is an attempt to monopolize the sale and to fix the price for distribution of the newspaper resulting in a take-over of plaintiff’s distribution business by alleged means of unfair competition.

By virtue of the motion to dismiss for lack of jurisdiction one central issue is presented to the Court: Do the acts alleged sufficiently affect interstate commerce so as to give this Court jurisdiction?

In its complaint and brief in opposition of the motion to dismiss plaintiff enumerates various factors touching upon interstate commerce. Specifically: that the Joliet Herald-News is circulated throughout other parts of the United States; it utilizes paper, inks and other materials shipped inter-state in production of the paper; it is affiliated with other companies in the Copley Press Group publishing throughout the United States; it disseminates news via the use of three national and international wire services supplied from outside of Illinois ; and, it utilizes a national advertising agency in addition to local advertisers to advertise products which move in interstate commerce.

Defendant responds that this dispute involves a local product in a local market. The local product is the home delivery of the newspaper in Lockport, Illinois. Further, that no direct or substantial damage to the newspaper or advertising market or to the ultimate reader-consumer has been charged nor could be inferred.

The Court agrees with defendant that interstate commerce must be more than obliquely or incidentally affected. See Michigan Bar Review Centers, Inc. v. Nexus Corp., 5 Trade Reg. Rep. 73,891 (N.D.Ill.1972). However, the instant case presents a factual situation where the éxact effect on interstate commerce is unknown. Thus, at this time a motion to dismiss for lack of jurisdiction would be improper.

The question of applicability of federal antitrust acts as they apply to publishers of newspapers was discussed in Lorain Journal company v. United States of America, 342 U.S. 143, 72 S.Ct. 181, 96 L.Ed. 162, (1951) wherein the Supreme Court stated:

“The distribution within Lorain of the news and advertisements transmitted to Lorain in interstate commerce for [458]*458the sole purpose of immediate and profitable reproduction and distribution to the reading public is an inseparable part of the flow of the interstate commerce involved [citations omitted]. Unless protected by law, the consuming public is at the mercy of restraints and monopolizations of interstate commerce at whatever points they occur. Without the protection of competition at the outlets of the flow of interstate commerce, the protection of its earlier stages is of little worth,” 72 S.Ct. 185-186.

Of course the Lorain decision was based on facts much different than are presented in this case. In Lorain the publisher refused to accept advertisements from any advertiser who did business with a competitor radio station thus giving the publisher a virtual monopoly over the news and advertising presented to the residents of Lorain County. In the present case it is unclear (even assuming that the allegations in plaintiff’s complaint are true) what the effect will be on customers of the Joliet-Herald News.

The inadvisability of dismissing a case where the effect upon interstate commerce could be more fully developed at trial is well illustrated by the decision in Las Vegas Merchant Plumbers Ass’n v. United States, 210 F.2d 732, 747 (9th Cir.), cert. denied 348 U.S. 817, 75 S.Ct. 29, 99 L.Ed. 645 (1954):

“Whether a purely local or intrastate conspiracy unreasonably restrains interstate commerce is primarily a factual question, i. e. does the local price fixing conspiracy affect substantially the flow of interstate commerce? If the answer is yes, then only are we concerned with the effect of the price-fixing under the per se doctrine. In fact, unless there is a finding that the local and intrastate activities complained of and as alleged in the indictment, substantially affect interstate commerce, there is no jurisdiction in a district court over the alleged Sherman Act violation.”

It may be argued by defendants that circulation of the Herald-News continues in Lockport, so there is no impact on this flow of interstate commerce. It is true that as to some home delivery subscribers another distribution method has already taken the place of plaintiff’s. This substitution of distribution methods may or may not have violated federal laws. The Court does not express any opinion on that issue at this time. Yet, even though the substitution of distribution methods and alleged price fixing may appear to be purely local in character they may have substantial effect upon interstate commerce. See United States v. Employing Plasterers’ Assoc. of Chicago, 347 U.S. 186, 74 S.Ct. 452, 98 L.Ed. 618 (1954).

A review of the leading antitrust cases in the newspaper field involving problems between publishers and distributors demonstrates that often the contested issues affect interstate commerce substantially. In Albrecht v.

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Bluebook (online)
64 F.R.D. 456, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mar-farr-corp-v-copley-press-inc-ilnd-1974.