Appeal from the District Court of the United States for the Southern District of Indiana, Indianapolis Division; Robert C. Baltzell, Judge.
Before ALSCHULER, EVANS, and FITZHENRY, Circuit Judges.
Appellant brought this action to recover damages resulting from appellees' alleged illegal agreements or combinations which, it is asserted, violated sections 1, 2, and 7 of the Sherman Anti-Trust Act (15 USCA §§ 1, 2, 15 note). Treble damages were sought as allowed by said section 7.
Appellees defended on several grounds, the two principally relied on being: (a) No interstate commerce was involved in the alleged illegal combinations which dealt with the subject of magazine advertising. Blumenstock v. Curtis Publishing Co., 252 U.S. 436, 438, 40 S. Ct. 385, 64 L. Ed. 649. (b) The agreement which appellees executed did not create a monopoly nor did it have the effect of unlawfully restraining interstate commerce in the manner condemned by the act. Appalachian Coals, Inc., v. U.S., 288 U.S. 344, 53 S. Ct. 471, 77 L. Ed. 825; Standard Oil Co. v. U.S., 283 U.S. 163, 51 S. Ct. 421, 75 L. Ed. 926.
The court directed a verdict in favor of appellees.
Sections 1 and 2 of the act (15 USCA §§ 1, 2) read as follows:
Section 1. "Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any such contract or engage in any such combination or conspiracy, shall be deemed guilty of a misdemeanor. * * *"
Section 2. "Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a misdemeanor * * *."
In view of our acceptance of appellees' second contention, the statement of facts will be directed to the issue thus presented.
The facts: Appellant is an Indiana corporation engaged in publishing a farm paper or magazine which circulates in Indiana and other states in the Middle West and has its plant and principal place of business in Huntington, Indiana. It has for years transacted a large and successful business, being the leading farm magazine published in Indiana.
Appellees, with the exception of the Midwest Farm Paper Unit, are corporations organized in states other than Indiana. They were all engaged in publishing farm magazines. They published them as follows: The Prairie Farmer, two magazines, one in Illinois and one in Indiana; Wallace Publishing Company, one farm magazine in Iowa; the Wisconsin Farmer Company, one magazine in Wisconsin; The McKelvie Publishing Company, one magazine in Nebraska; The Webb Publishing Company, two editions of a magazine, one edition circulating in Minnesota and the other in the Dakotas.
The Midwest Unit is a corporation which was organized in 1931, to succeed a copartnership which was formed in 1928. Its directors and officers were composed of representatives of the five last-named publishing companies.
Appellant averred and proved that advertising is essential to the successful conduct of a farm magazine, and is its life blood. There are two kinds of advertising, commercial and classified. The latter is in small type under classified headings, and the former is in display type. The revenue derived from the former far exceeds that obtained from ...