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EVENING NEWS PUBL. CO. v. ALLIED NEWSPAPER CARRIER

March 24, 1958

The EVENING NEWS PUBLISHING COMPANY, a corporation of the State of New Jersey, Plaintiff,
v.
ALLIED NEWSPAPER CARRIERS OF NEW JERSEY, a corporation of the State of New Jersey, et al., Defendants



The opinion of the court was delivered by: WORTENDYKE

In this action, under jurisdiction conferred upon this Court by §§ 4 and 26 of Title 15 of the United States Code Annotated, plaintiff sought injunctive relief, interlocutory and permanent, against continuance by defendants of charged violations of Sections 1 and 2 of the Sherman Act (15 U.S.C.A. §§ 1 and 2). Upon the filing of the complaint on February 14, 1957 the case was referred to the late Hon. Alfred E. Modarelli, then a Judge of this Court, before whom all proceedings herein were had through the presentation of the evidence upon which, on June 18, 1957, he granted an interlocutory injunction in accordance with the prayers of the complaint. An earlier application for such preliminary relief, made to Judge Modarelli on return of the order to show cause, which was allowed upon the filing of the complaint, was denied by him on March 21, 1957. His opinion upon which such denial was based was filed March 15, 1957, and is reported in 149 F.Supp. 460. After completion of the presentation of the evidence upon which the preliminary injunction issued, leave was granted to defendants to serve and file an additional brief, and to the plaintiff an answering brief, after transcription of the testimony and before final determination of the cause; but Judge Modarelli died before such briefs came in, and the case was thereafter reassigned to the writer of this opinion for appropriate disposition. Briefs have been submitted to, and oral argument of counsel has been heard by this writer. During the course of such argument counsel for the defendants adopted the factual summary embodied in the plaintiff's main brief, withdrew the affirmative defenses pleaded in their answer, while continuing to assert the lack of jurisdiction of this Court to award relief under the circumstances, and raised a question as to the sufficiency of the complaint. However, defendants concede that the actions and refusals to deal complained of by the plaintiff resulted from an agreement and combination of the individual defendants (Dealers) through their membership in the corporate defendant (Allied).

The Business of the Plaintiff.

 In the interest of expedition and succinctness we follow the defendants' lead by borrowing from a summarization at pp. 7-9 of plaintiff's main brief:

 'The plaintiff publishes a daily newspaper known as The Newark Evening News, having a net average daily paid circulation of 290,000 copies. Plaintiff also publishes a Sunday paper known as The Newark Sunday News with a net average paid circulation of 335,000 copies. Plaintiff's principal place of business is 215 Market Street, Newark, New Jersey. The facilities located there are capable of producing 150,000 more papers than are presently produced. The news published by the paper is gathered from all corners of the world. A good deal of it comes through wire services such as the Associated Press, United Press and International News Service. The plaintiff's own correspondents (its own employees and feature writers) are sent to all parts of the world where news may be in the making or imminent. The newsprint on which the paper is printed comes from Finland and Canada by way of water and rail and is transported from the docks or freightyards to its printing presses by trucks. The magazine section for the Sunday paper is printed in Louisville, Kentucky, and the colored comics in the Sunday paper is printed in Bridgeport. Both the magazine section and the colored comics section are delivered to the reader as an integral part of the Sunday paper. The comics appearing in both the daily and Sunday editions come from all over the country. The advertising appearing on its pages is received from practically the entire United States and at times even from foreign countries. Plaintiff's papers go to every state in the Union.

 'The greater the circulation, the higher the rate the plaintiff can charge for advertising. A decrease in circulation of 4% or 5% would raise questions in the minds of advertisers and perhaps result in a reduction of advertising rates. If the circulation increases, rates increase proportionately. A loss in circulation of 20,000 would affect advertising if such a decline was protracted or if there were recurrent stoppages. * * *

 'Plaintiff delivers its papers to its customers in the following manner:

 'a. By means of its own trucks to newsstands and stores;

 'b. By rail and other carriers to points within and outside the State of New Jersey;

 'c. By mail to ats subscribers within and outside the State of New Jersey;

 'd. By street sales through newsboys;

 'e. By means of its own trucks to various braches maintained by it and to other points and from which points further distribution is made through newsboys;

 'f. By means of its own trucks to Home Delivery Dealers.

 'The published price of the daily is 5 cents and of the Sunday edition is 12 cents. The plaintiff sells its papers to Home Delivery Dealers as well as newsboys for $ 3.80 per hundred for daily and.$ 9.00 per hundred for Sunday editions. The papers distributed through Home Delivery Dealers throughout the State of New Jersey amount to 62,878 daily editions and 70,631 Sunday editions of the total circulation, or better than 20% of the total circulation * * * The dealer can charge what he likes for the service he renders and this is also true of the newsboys. * * *'

 The Business of the Defendant Home Delivery Dealers.

 As stated at page 3 in the brief for defendants:

 'The individual defendants are independent small business men. They own their delivery routes and use their own vehicles in distributing papers. Many of them operate their businesses from their homes; others operate candy stores or similar ...


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