Sanitary Milk Producers v. Bergjans Farm Dairy, Inc.

368 F.2d 679
CourtCourt of Appeals for the Eighth Circuit
DecidedNovember 10, 1966
DocketNo. 18119
StatusPublished
Cited by59 cases

This text of 368 F.2d 679 (Sanitary Milk Producers v. Bergjans Farm Dairy, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sanitary Milk Producers v. Bergjans Farm Dairy, Inc., 368 F.2d 679 (8th Cir. 1966).

Opinion

BLACKMUN, Circuit Judge.

In August 1962 the six plaintiffs, appellees here, which are incorporated small dairies in the Saint Louis area, instituted this private action in four counts seeking treble damages and injunctive relief against Sanitary Milk Producers, Inc., a dairy-farmer cooperative, four of Sanitary’s officers and directors, and four retail organizations, for alleged violations in 1962 and 1963 of the Sherman, and Clayton Acts as amended, 15 U.S.C. §§ 1, 2, 13(a), 15 and 15/26" style="color:var(--green);border-bottom:1px solid var(--green-border)">1px solid var(--green-border)">26. Sanitary counterclaimed. Prior to trial the plaintiffs dismissed the suit as to the retailers.

The case came to trial in 1965. The damage issue was submitted to a jury and resulted in verdicts in favor of the six plaintiffs on the first, second and fourth counts of their complaint (conspiracy to fix prices of fluid milk in restraint of trade; attempt to monopolize; unlawful price discrimination) but in favor of the defendants on the third count (conspiracy to monopolize). The jury found against Sanitary on its counterclaim. Damages were awarded the several plaintiffs in the aggregate amount of $38,500. This, when trebled, resulted in a total monetary judgment of $115,500. The court allowed the plaintiffs attorneys’ fees aggregating $12,850 and granted injunctive relief for a period of ten years. Judge Meredith’s memorandum containing the findings and conclusions as to the court’s aspect of the case is reported as Bergjans Farm Dairy Co. v. Sanitary Milk Producers, 241 F.Supp. 476 (E.D.Mo.1965). Reference is made to that memorandum for background and much of the pertinent factual material.

The defendants complain here primarily of (a) rulings on evidence; (b) the standing of two of the plaintiffs to sue; and (c) instructions and the sufficiency of the evidence.

A. The evidentiary rulings, claimed to justify a new trial, relate to (1) an inquiry made of witness Schwarz; (2) a letter written by an attorney for Adams Dairy; (3) references to Adams’bottling costs and to rumors about Sanitary; and (4) plaintiff Ozark’s complaint in another antitrust action.

1. The Schwarz inquiry. William Schwarz is a member of the family which owned and operated the milk processing plant of Quality Dairy of O’Fallon, Illinois. Sanitary purchased that plant about December 1, 1961, but kept the three Schwarz sons active in its operation. William was manager and responsible to individual defendant Spaulding. At the time of the purchase, O’Fallon milk was sold through certain outlets in Saint Louis. Schwarz, however, then negotiated the introduction of O’Fallon milk under private label in additional Saint Louis outlets to begin February 27,1962. When this became known, competitors reacted and a severe price war developed. Judge Meredith’s description of the course of that conflict appears at pp. 479-480 of 241 F.Supp. In May Sanitary raised its wholesale price as billed to its outlets. Schwarz, however, then began to give the outlets cash rebates in paper envelopes. These payments were reflected- as advertising expense on Sanitary’s books.

Schwarz was called by the plaintiffs as an adverse witness. He was examined vigorously and in detail about this rebate practice. In the course of that examination by plaintiffs’ counsel the following took place:

“Q. Mr. Schwarz, isn’t it- a fact that you knew it was a Federal crime to give cash rebates—
“Mr. Duncan: Your Honor—
“Mr. Riddle: (Continuing) — discriminatorily to certain of your customers. Didn’t you know that at the time?
[684]*684“Mr. Duncan: Your Honor, I object to the form of the question. There is no crime charged here, there is no proof that it is a crime. I think it is highly inflammatory and I ask Your Honor for a mistrial in view of that question.
“The Court: The Court will sustain the objection as to the question and I will instruct the jury to disregard it. I will deny your motion for mistrial.”

The defendants argue that irreparable harm resulted from this exchange; that this was an insinuation of the commission of a federal crime; that this is guilt by accusation; that the question was unjustified and devastating; that it poisoned the minds of the jury; that it unfairly obscured the defendants’ contention that the rebates were made to meet competition, were not secret and were justified; that the situation was made worse by similar inferences of crimes under state law; and that the court’s refusal to grant a mistrial was error.

An unsupported inference of crime by a witness or party to a civil action is improper cross-examination. Cohen v. Checker Taxi Co., 217 F.2d 449, 452 (7 Cir. 1954); Carr v. Standard Oil Co., 181 F.2d 15, 17 (2 Cir. 1950), cert. denied 340 U.S. 821, 71 S.Ct. 52, 95 L.Ed. 603. See Sanford v. United States, 69 App.D.C. 44, 98 F.2d 325, 327 (1938). It is improper, too, as against the defendant who takes the stand in a criminal case, for only actual conviction of a felony, or the like, and not just accusation or arrest is an appropriate attack upon the witness’ credibility. “What is forbidden is essential unfairness”. Schwab v. United States, 327 F.2d 11, 16 (8 Cir. 1964); United States v. Yarbrough, 352 F.2d 491, 493 (6 Cir. 1965).

It is clear enough, we think, that the question asked by plaintiffs’ counsel and so vigorously deplored by the defense was improper. No crime, state or federal, was formally charged or at issue. Any imputation of crime tends to be harmful. We do not regard the question, as the plaintiffs would describe it, as a mere inquiry whether the witness knew certain conduct was a crime. The question was not sympathetically or inquiringly asked. On the other hand, plaintiffs’ and counsel’s irritation and contempt for what they felt were concealed and reprehensible rebates are perhaps understandable.

We are not convinced that the asking of the question amounted to reversible error in this trial. There was immediate objection in the very midst of the question, and then, at some length, when it was completed. The question was not answered. The trial court sustained the objection and forthwith instructed the jury to disregard the question. The court did all it could do, short of ordering a mistrial. Of course, curative instructions to a jury usually leave a reviewing court mildly uncomfortable for they never absolutely assure that the vice at which the instructions are directed is thereby wholly eliminated. Mr. Justice Harlan noted this in his dissent in Jackson v. Denno, 378 U.S. 368, 435, 84 S.Ct.

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368 F.2d 679, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sanitary-milk-producers-v-bergjans-farm-dairy-inc-ca8-1966.