Midland Telecasting Company v. Midessa Television Company, Inc.

617 F.2d 1141, 1980 WL 579619
CourtCourt of Appeals for the Fifth Circuit
DecidedJune 25, 1980
Docket78-2515
StatusPublished
Cited by20 cases

This text of 617 F.2d 1141 (Midland Telecasting Company v. Midessa Television Company, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Midland Telecasting Company v. Midessa Television Company, Inc., 617 F.2d 1141, 1980 WL 579619 (5th Cir. 1980).

Opinion

AINSWORTH, Circuit Judge:

This is an antitrust suit brought by a UHF television station against a cable television company and its co-owners alleging that its refusal to carry plaintiff’s UHF signal on its cable violated the antitrust laws. 1 The district court granted defendants’ motion for summary judgment primarily on the ground that federal regulation of cable television created an implied immunity from the effect of the antitrust laws. We reverse.

Plaintiff Midland Telecasting Company (Midland) operated a UHF television station from Midland, Texas. It broadcast on Channel 18 from June 8, 1969 to March 16, 1971 and from March 26, 1973 to October 15, 1974.

In 1967, defendant Community Cablevision Company (CCC) was created for the purpose of operating a community antennae television (CATV) system in nearby Odessa, Texas. CCC was a joint venture by defendants Midessa Television Company (Midessa), Doubleday Broadcasting Company (Doubleday), Hodge Enterprises, J. Howard Hodge, and Cablecom-General, Inc. Both Midessa and Doubleday were direct competitors with Midland. Midessa operated a VHF station, affiliated with NBC, located between Midland and Odessa. Doubleday operated another network-affiliated VHF station located in Odessa. In 1968, CCC was granted an exclusive franchise by the City of Odessa to operate a CATV or cable system in Odessa. CCC carried the signals of the three VHF stations serving the Midland-Odessa area including the signals of the two VHF stations owned by joint ven-turers Midessa and Doubleday. 2 By the end of 1971, a significant portion of the homes in Odessa subscribed to CCC’s cable system.

In its complaint, 3 Midland alleged that from 1969 until the filing of this suit in 1974, CCC refused to carry Midland’s signal on its cable despite repeated requests to do so, and that the refusal was designed to eliminate Midland from the Midland-Odessa television broadcasting market. As a result, it is averred that Midland could not become a “commercially viable enterprise” or obtain network affiliation, and was forced to halt broadcasting from March 1971 until March 1973 and later from October 1974 until the present time. Thus, Midland alleged that from 1969 until 1974, the defendants engaged in a continuing combination and conspiracy to restrain competition in the television broadcasting industry in the Midland-Odessa market in violation of section 1 of the Sherman Act, 15 U.S.C. § l. 4 Midland sought treble damages pursuant to section 4 of the Clayton Act, 15 *1144 U.S.C. § 15, as well as injunctive relief and attorney’s fees.

The district court granted defendant Midessa’s motion to dismiss and for summary judgment on the basis of findings of fact and conclusions of law prepared by counsel for Midessa. 5 While the district court relied on a number of grounds, it primarily found that (1) Midland lacked standing to assert the claim, and (2) defendánts were immune from antitrust scrutiny by virtue of federal regulation over cable television. 6 We discuss these points in order.

1. STANDING

Standing for damage actions under the antitrust laws is controlled by section 4 of the Clayton Act which grants standing to “any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws . . . 15 U.S.C. § 15. See 2 P. Areeda & D. Turner, Antitrust Law § 334a (1978). The allegations in this case are clearly sufficient to afford Midland standing. Midland alleged injury in fact to its business in that it lost advertising revenues and was forced to stop broadcasting because of *1145 CCC’s refusal to carry its signal. Antitrust liability is based upon the theory that defendants either took part in a group boycott, see Klor’s, Inc. v. Broadway-Hale Stores, Inc., 359 U.S. 207, 79 S.Ct. 705, 3 L.Ed.2d 741 (1959), or acted in concert to refuse access to an essential facility, see United States v. Terminal Railroad Association, 224 U.S. 383, 32 S.Ct. 507, 56 L.Ed. 810 (1912). As such, the alleged injury is the type which if proven the antitrust laws seek to prevent. Finally, the injury is alleged to be the direct result of defendants’ unlawful conduct.

The district court’s reliance on Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 97 S.Ct. 690, 50 L.Ed.2d 701 (1977) and Jeffrey v. Southwestern Bell, 518 F.2d 1129 (5th Cir. 1975) on the issue of standing is misplaced. In Brunswick, operators of bowling alleys sought damages for profits allegedly lost when defendant unlawfully acquired certain unprosperous alleys and operated them itself instead of permitting them to fail. The Supreme Court denied recovery since plaintiffs had failed to demonstrate “injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants’ acts unlawful.” Brunswick, 429 U.S. at 489, 97 S.Ct. at 697. It is clear that in the present case the injury alleged flows directly from defendants’ group boycott or refusal to deal. In Jeffrey, residential telephone subscribers challenged Bell’s equipment policies of buying only from its wholly-owned subsidiary. This court held that Bell’s retail customers were not the “target” of the alleged monopolistic practices and therefore did not have standing since they could not “adequately vindicate the purposes of the antitrust laws.” Jeffrey, 518 F.2d at 1131. The court stated that antitrust standing should be granted to that “sector of the economy which is endangered by a breakdown of competitive conditions in a particular industry.” Id. Midland, under the allegations in its complaint, was the target of the conspiracy and as such is an adequate representative of that sector of the economy which is threatened by the alleged anti-competitive acts of the defendants. As such, Midland has standing under section 4.

2. IMPLIED IMMUNITY

It is undisputed that the Federal Communications Act of 1934 (the Act), 47 U.S.C. § 151 et seq., does not explicitly provide an exemption from the antitrust laws for a cable television company’s decision as to which signals it will carry. 7 The district court, however, held that the existence of Federal Communication Commission’s (FCC) regulation concerning carriage of signals by cable systems created an implied immunity from the antitrust laws for CCC’s refusal to carry Midland’s signal.

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Bluebook (online)
617 F.2d 1141, 1980 WL 579619, Counsel Stack Legal Research, https://law.counselstack.com/opinion/midland-telecasting-company-v-midessa-television-company-inc-ca5-1980.