Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 83 C 6731 -- Frank J. McGarr, Judge.
Coffey and Ripple, Circuit Judges, and Eschbach, Senior Circuit Judge.
In 1983, General Leaseways, Inc. filed suit against National Truck Leasing Association alleging violations of section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1. The district court granted General Leaseways' motion for a preliminary injunction, and this court affirmed on appeal. General Leaseways, Inc. v. National Truck Leasing Ass'n, 744 F.2d 588 (7th Cir. 1984). The injunction was subsequently made permanent. General Leaseways' damage claims were tried to a jury, which returned a special verdict finding that General Leaseways "bore substantially equal responsibility" for the antitrust violations. The jury further found that General Leaseways was injured by those violations, but assessed damages in the amount of "zero" dollars. General Leaseways appeals. For the reasons set forth below, we affirm.
The facts concerning the underlying antitrust violations are thoroughly set forth in this court's opinion in the appeal from the preliminary injunction, 744 F.2d at 589-90, and need only be summarized here. National Truck Leasing Association ("the Association") is an affiliation of lessors of trucks. Association members lease trucks on a "full service" basis, which means that they, as opposed to their customers, are responsible for maintenance and repair. When trucks are rented for "over-the-road" use, i.e. for longer hauls outside the vicinity of the lessor, other Association members furnish these services on a reciprocal basis. This arrangement essentially provides Association members with a national network of service centers and enables them to compete with other national full-service truck leasing enterprises, such as Hertz or Avis. General Leaseways has been a member of the Association since 1972.
Among the rules of the Association were several restrictions on the extent to which Association members could compete with one another. No member was allowed to operate an Association franchise within the territory of another member, or to use the Association name or trademarks in operating a non-franchised business within another member's territory. Furthermore, an Association policy voided reciprocal service privileges for any member's trucks that were leased by a customer located outside of that member's territory. A fourth rule prohibited any Association member from operating a franchise of any other full-service truck leasing system.
In 1981 and 1982 General Leaseways acquired several Hertz and Avis truck rental facilities. General Leaseways sought to convert the Avis facilities to Association franchises, even though some of those facilities were in areas already served by Association members. The Association received complaints from other members in the cities where General Leaseways proposed to establish its newly-acquired Avis locations as Association franchises, and from an Association member in Des Moines, Iowa, site of a Hertz facility that General Leaseways had acquired. Acting under the authority of the territorial restrictions described above, the Association suspended General Leaseways' reciprocal service privileges. General Leaseways thereupon filed suit to block the suspension.
In the first appeal, this court held that General Leaseways' likelihood of prevailing on its unlawful market allocation claims, under both "per se" and "rule of reason" analyses, was sufficient to justify the entry of a preliminary injunction blocking enforcement of the restraints summarized above. 744 F.2d at 595-97. After this court's opinion issued, counsel for the Association conceded in the district court that he had no further evidence to present with regard to the legality of the restraints. The district judge made the injunction permanent. The judge thereafter granted General Leaseways' motion for partial summary judgment on the violation issue.*fn1 The illegal nature of the restraints is not contested in this appeal.
The issue of damages was tried to a jury over the course of almost two months in late 1985. General Leaseways sought damages for the calendar years 1983 and 1984, the period between the Association's initial suspension of reciprocal services and the entry of the preliminary injunction. As evidence of injury, General Leaseways offered the testimony of an expert witness who had prepared a study that purported to project the amount of profits General Leaseways had lost because of the territorial restrictions. The Association challenged General Leaseways' proof of economic injury. It also argued, as an affirmative defense, that General Leaseways, as a long-time and active Association member, bore equal responsibility for the maintenance of the illegal system of restrictions and therefore should have been barred from recovery. The district court instructed the jury on the evaluation of General Leaseways' damages study; it also delivered an instruction on the Association's fault-based defense.
Before retiring to deliberate, the jury was given three separate verdict forms,*fn2 as well as a special interrogatory form that contained, inter alia, the following questions and directions:
1. Do you find from a preponderance of the evidence that the plaintiff bore substantially equal responsibility for creating and maintaining the unlawful contract, combination or conspiracy found to exist by this Court and that the plaintiff was not forced by economic pressure to so participate in the contract, combination or conspiracy. Answer "YES" or "NO."
4. Do you find from a preponderance of the evidence that the contract, combination or conspiracy to allocate markets among association members caused injury to General Leaseways' business or property? Answer "YES" or "NO."
If you have answered interrogatory No. 4 "yes," answer interrogatory No. 5. If you have answered interrogatory No. 4 "no," you need not answer interrogatory No. 5.
5. What sum of money, if paid now in cash, do you find from a preponderance of the evidence would fairly and reasonably compensate plaintiff for the damages, if any, you find the plaintiff has incurred?
After less than two full days of deliberation,*fn3 the jury returned its verdict, answering "yes" to both questions 1 and 4, and answering "zero 0.00" to question 5. The jury also completed a verdict form, finding for General Leaseways and against the Association, but assessing damages in the amount of "zero."
The issues raised on appeal fall into three analytical categories. General Leaseways first argues that the district court erred in denying its motion for a directed verdict on the Association's contention that General Leaseways bore equal responsibility for the unlawful restrictions, and that the instruction given on that fault-based defense was deficient. Second, General Leaseways challenges an instruction given by the district court, apparently through inadvertence, that discussed the relationship between assumptions and conclusions in General Leaseways' damage study. Finally General Leaseways' claims that the timing and content to the jury after deliberations had commenced resulted in a coerced and legally improper verdict.
General Leaseways argues that the Association failed to present "more than a scintilla" of evidence of General Leaseways' responsibility for maintenance of the illegal territorial restriction scheme. The Associations describes the evidence of General Leaseways' fault as "overwhelming." In the alternative, General Leaseways argues that the jury instruction on the fault-based defense was defective because it did not include an additional sentence that General Leaseways had submitted.
The fault-based defense raised by the Association is a variant of the common-law doctrine of "in pari delicto," which literally means "in equal fault." Strictly speaking, the common-law form of the defense*fn4 is not available to defendants in antitrust lawsuits. Perma Life Mufflers, Inc. v. International Parts Corp., 392 U.S. 134, 20 L. Ed. 2d 982, 88 S. Ct. 1981 (1968). In Perma Life, the Supreme Court held that the availability of a broadly-applied defense, based on the involvement of antitrust plaintiffs in "some of the same sort of wrong-doing" as the defendants, would undermine the public interest in assuring the continual threat of private action as a deterrent to antitrust violations. 392 U.S. at 138-39. The Perma Life Court specifically declined to discuss the level of voluntary participation in unlawful conduct that would bar a plaintiff's recovery, because it found that the record before it clearly demonstrated that the plaintiffs' involvement in maintaining the illegal restrictions at issue in that case was the result of economic coercion. Id. at 140-41.*fn5
Some differences have arisen among the courts of appeals on the formulation of a fault-based defense standard to be applied in antitrust cases. Compare Javelin Corp. v. Uniroyal, Inc., 546 F.2d 276, 279 (9th Cir. 1976) (plaintiff "barred from recovery only when the illegal conspiracy would not have been formed but for" its participation) (emphasis added), cert. denied, 431 U.S. 938, 53 L. Ed. 2d 256, 97 S. Ct. 2651 (1977) with Columbia Nitrogen Corp. v. Royster Co., 451 F.2d 3, 15-16 (4th Cir. 1971) (recovery barred "when parties of substantially equal strength mutually participate in the formulation and execution of the scheme and bear equal responsibility for the consequent restraint of trade"). With the exception of the earlier opinion in this case,*fn6 this court has not commented on the proper fault standard since stating, in Premier Elec. Constr. Co. v. Miller-Davis Co., 422 F.2d 1132, 1138 (7th Cir.), cert. denied, 400 U.S. 828, 27 L. Ed. 2d 58, 91 S. Ct. 56 (1970), that "plaintiffs who do not bear equal responsibility for creating and establishing an illegal scheme . . . should not be barred from recovery simply because they are participants."
Most critical to our assessment of the current state of the law on this issue is the Supreme Court's recent decision in Bateman Eichler, Hill Richards, Inc. v. Berner, 472 U.S. 299, 86 L. Ed. 2d 215, 105 S. Ct. 2622 (1985), in which the Supreme Court applied Perma Life in the context of a private action for damages brought under the federal securities laws. Noting a public interest in vigorous private securities law enforcement, similar to that found in the antitrust area in Perma Life, the Court held that the defense of in pari delicto in its common-law form would not be available in suits brought under Securities and Exchange Commission Rule 10b-5, 17 C.F.R. § 240.10b-5. The Court held that plaintiffs in securities actions (and, by implication, those in antitrust actions as well)*fn7 would be barred from recovering damages
on the grounds of the plaintiff's own culpability only where (1) as a direct result of his own actions, the plaintiff bears at least substantially equal responsibility for the violations he seeks to redress, and (2) preclusion of suit would not significantly interfere with the effective ...