Standard Industries, Inc. v. Mobil Oil Corp.

475 F.2d 220
CourtCourt of Appeals for the Tenth Circuit
DecidedMarch 14, 1973
DocketNos. 71-1115-71-1119
StatusPublished
Cited by22 cases

This text of 475 F.2d 220 (Standard Industries, Inc. v. Mobil Oil Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Standard Industries, Inc. v. Mobil Oil Corp., 475 F.2d 220 (10th Cir. 1973).

Opinion

McWILLIAMS, Circuit Judge.

This is a civil antitrust action brought by two corporations to recover damages incurred when they purchased liquid asphalt, to be utilized in the construction of roads, highways, runways and the like, at a “rigged” price in excess of fair market value, such price rigging allegedly having been the result of an unlawful combination and conspiracy in restraint of trade in violation of the provisions of the Sherman Act and the Clayton Act. 15 U.S.C. § 1 et seq. The defendants named in the complaint were numerous petroleum refiners and marketing entities which produced and sold liquid asphalt as a by-product of the crude oil cracking process.

The two corporations which instituted the proceedings are Standard Industries, Inc., a Delaware corporation, and Metropolitan Paving Company, Inc., an Oklahoma corporation, both general construction contractors with the former headquartered in Tulsa, Oklahoma, and the latter in Oklahoma City, Oklahoma.

As indicated, the defendants were various petroleum refiners and marketing entities located in Oklahoma and Kansas and initially were some twelve in number. Settlement was made with certain defendants prior to trial. Upon trial, the jury returned a verdict in favor of one defendant, Skelly Oil Company of El Dorado, Kansas, and against the four remaining defendants. Those four are: (1) Mobil Oil Corporation, which operated a refinery in Augusta, Kansas; (2) Sunray DX Oil Company, which operated a refinery in Tulsa, Oklahoma; (8) Kerr-McGee Corporation, which operated refineries at Wynnewood and Cushing, Oklahoma; and (4) Phillips Petroleum Company, which operated refineries at Okmulgee, Oklahoma, and at Kansas City, Kansas.

An eight-week trial culminated in the submission to the jury of a series of special interrogatories. The jury found, inter alia, that the four defendants had conspired to fix the price of liquid asphalt purchased by plaintiffs in Oklahoma from January 1962 to December 1966; that plaintiffs had suffered damages by way of an “overcharge” during the existence of the conspiracy; and that none of the “overcharge” had been “passed-on” by either of the plaintiffs.

Based, then, on the jury’s various answers to the special interrogatories, the trial court entered a judgment in the sum of $133,684.06, together with the sum of $42,000 for attorney’s fees, plus costs in the amount of $3,550.22, in favor of Standard and against the four petroleum companies which the jury found guilty of antitrust violations. As concerns Metropolitan, judgment was entered in its favor and against the same four companies in the sum of $286,128.-01, together with the sum of $84,000 for attorney’s fees, plus costs in an amount of $7,100.44. In sum, judgment was entered in favor of the two plaintiffs against the four petroleum companies, jointly and severally, in a total amount of $556,462.73; such sum taking into account previous settlements made with other defendants prior to trial. All parties now appeal.

Standard and Metropolitan complain here about the amount of their judgment, and seek a new trial limited to the issue of damages. The four appealing defendants, i. e., Mobil, DX, Kerr-McGee, and Phillips, on a variety of grounds seek a new trial limited to the issue of liability. These wide-ranging grounds of alleged error will be grouped into two categories: Alleged Pre-Verdict Error and alleged Post-Verdict Error.

ALLEGED PRE-VERDICT ERROR

1. Treble Damage Instruction.

Section 15 of 15 U.S.C. provides that any person injured by reason of anything forbidden in the antitrust laws may sue therefor “and shall recover threefold the damages by him sustained, [223]*223and the cost of suit, including a reasonable attorney’s fee.” In regard to the matter of damages, the trial court instructed the jury as follows:

“ * * * If you should find, from a preponderance of the evidence in this case, that plaintiff is entitled to recover, your verdict will be for only such amounts as you shall find from the evidence in the case is reasonably necessary to compensate the plaintiff for damages proximately caused by one or more of the violations of the Federal antitrust laws, which the plaintiff has alleged. You will not treble that amount, nor will you include any sums for costs of suit, or for a reasonable attorney’s fee, since that is no part of the jury’s function. That is a question for the court, in the event the jury return a verdict in favor of the plaintiff for actual or compensatory damages’’ (Emphasis added.)

The plaintiffs contend that the giving of the aforesaid instruction constituted reversible error because such was “inherently unfair” in that it placed on the plaintiffs the burden of explaining why they should ultimately recover three times their actual damage and, in practical effect, necessarily caused the jury to adjust downward its damage award.

In thus arguing, plaintiffs rely on our recent case of Semke v. Enid Automobile Dealers Association, 456 F.2d 1361 (10th Cir. 1972), decided by us after the trial of the instant case. In Semke, after recognizing that there was a split of authority on the matter, we held that it was error to give an instruction which informed the jury that its damage award would be trebled by the court, but that in the context of that case it was only harmless error. We adhere to the rule, of Semke, but here, as in Semke, under the circumstances any error is deemed harmless.

In pre-trial newspaper publicity of considerable proportions, the jury panel was without doubt made aware of the fact that this was a treble damage action. Such publicity included articles published in the local Oklahoma newspapers between 1966 and 1969 concerning not only the nature of the claim asserted in the instant case, but also articles relating to the antitrust action brought by the State of Oklahoma in regard to the State’s purchases of the same types of liquid asphalt. Many of these articles stated that the suits involved amounts which were triple the amount of damages allegedly suffered. Furthermore, in closing argument there was some comment by counsel concerning the treble damage aspect of the case, although such was said to be in anticipation by counsel that the trial court would instruct on the matter. And in the instructions other than the particular part here complained about, reference was made that under the Clayton Act the injured party should recover “threefold the damages by him sustained, and the cost of the suit, including a reasonable attorney’s fee.”

In addition, as will later be more fully developed, the witness Kavanaugh, president of Metropolitan, in violation of an order of court, in a voice inaudible to the court and counsel, but audible to the court reporter and at least some jurors, volunteered that he had already incurred expenses in the sum of $150,000.

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Standard Industries, Inc. v. Mobil Oil Corporation
475 F.2d 220 (Tenth Circuit, 1973)

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Bluebook (online)
475 F.2d 220, Counsel Stack Legal Research, https://law.counselstack.com/opinion/standard-industries-inc-v-mobil-oil-corp-ca10-1973.