are contained the customers of the Dealers and of the newsboys. To a reader who failed to receive his newspaper when his Dealer refused to purchase the paper from the plaintiff were still available the alternatives of arranging for delivery thereof by a newsboy, or directly by the plaintiff, or by purchasing the paper at a newsstand or a store. Thus, the restraint resulting from the combined refusal to handle in this case was not effective throughout the general market for plaintiff's newspaper, but was limited to the home delivery market in which it operated to restrain the flow through the home delivery outlet of the commerce involved in the production and distribution of the newspaper. In this limited market the restraint made itself felt to a substantial degree, and was enhanced by the written notices which the Dealers circulated among their customers in the Dealers' efforts to justify their position and to strengthen the boycott by inviting and encouraging antagonism toward the plaintiff by using the sympathy of the newspaper reader for the Dealer.
Defendants argue that 'the only competition which defendants have sought to eliminate is the competition of plaintiff-subsidized newsdealers, employed on plaintiff-owned routes to force the independent home delivery dealers to adhere to the prices dictated by plaintiff.' I find no support in the evidence for the foregoing assertion. Rather, I find an ample basis for its negation. Plaintiff sold its newspapers to all wholesale purchasers at the same price. While plaintiff's authorized representatives emphatically refused to comply with the defendants' demand for the elimination of newsboy distributors, I find no proof that in selling its papers to newboys the plaintiff was attempting to force the Dealers to adhere to prices charged by the newsboys. Although there is some evidence to the effect that in direct campaigns to increase circulation the plaintiff had advertised a price similar to that charged by the newsboys, that evidence does not suffice to support the price-fixing charge against the plaintiff. Indeed, there is evidence that the new customers which the plaintiff secured by such direct solicitations were offered to the Dealers, who were at liberty to either accept them at the price stated, or to reject them. In case of a Dealer's unwillingness to accept such a new customer at the advertised price, a newsboy would be made available to serve that customer.
The Dealers further assert that they do not complain of competition from distribution means other than the newsboys, such as newsstands, candy stores, street sellers, plaintiff's mail circulation, or independent home delivery dealers not associated with Allied. They say that their dispute is only with the plaintiff, and relates only to what they characterize as plaintiff's unfair business methods. While the dispute is with the plaintiff, its object is to force the plaintiff to eliminate the newsboys and thereby remove the competition which the newsboys create. I find in the evidence no proof of any of the unfair business methods of which the Dealers accuse the plaintiff. Combination boycotts, like other group action to coerce, have long been condemned as unreasonable restraints under § 1 of the Sherman Act. Fashion Originators' Guild v. Federal Trade Commission, 1941, 312 U.S. 457, 668, 61 S. Ct. 703, 85 L. Ed. 949; Eastern States Retail Lumber Dealers' Association v. United State, 1914, 234 U.S. 600, 34 S. Ct. 951, 58 L. Ed. 1490.
Next, we approach the question of whether the conduct of the defendants affects interstate commerce. From the foregoing background of factual items, certain sharp outlines emerge presenting a situation summarizable within a narrow row compass. In the publication of its paper the plaintiff is engaged in interstate commerce. Its activities include the procurement of newsprint from outside the State and even from beyond the seas. The ultimate distribution of its printed product extends not only throughout the State of New Jersey, in which its plant is located, but throughout many States of the Union. It gleans news throughout the nation and the world and transmits it to its readers throughout the broad territory mentioned. The great breadth of its circulation attracts profitable advertising not only from within the State of New Jersey but from numerous persons and concerns in other States. This advertising, together with the news, reaches the newspaper's readers by means of a variety of forms of physical transportation whereby the newspaper is carried interstate and internationally. The flow of such commerce is both toward and from the plaintiff and terminates ultimately in the receipt of the newspaper, with its news and advertising content, by the reader. Times-Picayune Publishing Co. v. United States, 1953, 345 U.S. 594, 73 S. Ct. 872, 97 L. Ed. 1277; Lorain Journal Co. v. United States, 1951, 342 U.S. 143, 72 S. Ct. 181, 96 L. Ed. 162; Associated Press v. United States, 1945, 326 U.S. 1, 65 S. Ct. 1416, 89 L. Ed. 2013; Kansas City Star Co. v. United States, 8 Cir., 1957, 240 F.2d 643, certiorari denied 354 U.S. 923, 77 S. Ct. 1381, 1 L. Ed. 2d 1438. The recognized fact that a portion of such flow moves from the publisher to readers within the same State in which the newspaper is published does not remove that portion from the totality of the interstate current in which the plaintiff, the Dealers, and the newspaper readers are equally involved. The interstate commerce stream has more than one branch. After it leaves the printing press, the newspaper may be sold and delivered to stationery, candy or similar stores, or newsstands, at which it may be purchased by readers; or it may be sold by plaintiff directly to newsboys who, in turn, sell and deliver it to the readers; or the Dealers may purchase the paper from the plaintiff and sell and deliver it to their customers. These three courses, among others, by which the newspaper reaches the ultimate consumer are like the several outlets of a river near its mouth. Each branch of the multiple outlet is still a channel of interstate commerce. It is perfectly obvious from the concessions of the defendants, as well as from the testimony in this this case, that the dominant object of the combined refusal to handle plaintiff's newspaper was the elimination of newsboy competition in the distribution of plaintiff's paper to the homes and places of business of its readers within the areas of the Dealers' actual or contemplated operations. To the extent that the Dealers approached the achievement of that objective, the impact of their restraint increased and their advantage in the relevant market was enlarged. As was said in United States v. Columbia Steel Co., 1948, 334 U.S. 495, 522, 68 S. Ct. 1107, 1121, 92 L. Ed. 1533:
'* * * The amount of interstate trade affected is immaterial in determining whether a violation of the Sherman Act * * * (exists). A restraint may be unreasonable either because a restraint otherwise reasonable is accompanied with a specific intent to accomplish a forbidden restraint or because it falls within the class of restraints that are illegal per se.'
Since this case was submitted to the Court, counsel for defendants have drawn the Court's attention, by letter, to the yet unreported opinion of Judge Sullivan of the Chancery Division of the Superior Court of New Jersey in Durling Farms v. Tri-State Guild. I have read that opinion with the benefit of the expressions, by letter, of the views with respect thereto of both counsel in the case at bar. This Court does not consider the decision pertinent to the issues here presented. The concerted refusal to handle obviously restrains interstate commerce, and I conclude from the evidence that the restraint is undue and substantial.
Does the evidence clearly disclose a violation of § 2 of the Sherman Act? The language of § 2 prohibits three types of conduct, viz.: (1) monopolization; (2) attempts to monopolize; and (3) combinations or conspiracies to monopolize.
In American Tobacco Co. v. United States, 1946, 328 U.S. 781, at pages 809-810, 66 S. Ct. 1125, at page 1138, 90 L. Ed. 1575, Mr. Justice Burton, speaking for the Court, said:
'A correct interpretation of the statute and of the authorities makes it the crime of monopolizing, under § 2 of the Sherman Act, for parties, as in these cases, to combine or conspire to acquire or maintain the power to exclude competitors from any part of * * * trade or commerce * * *, provided they also have such a power that they are able, as a group, to exclude actual or potential competition from the field and provided that they have the intent and purpose to exercise that power. See United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 226, 60 S. Ct. 811, 846, 84 L. Ed. 1129 (note 59) and authorities cited.
'It is not the form of the combination or the particular means used but the result to be achieved that the statute condemns. It is not of importance whether the means used to accomplish the unlawful objective are in themselves lawful or unlawful. * * * The essential combination or conspiracy in violation of the Sherman Act may be found in a course of dealings or other circumstances as well as in any exchange of words.'
Alleged violations of both §§ 1 and 2 of the Sherman Act were involved in Times-Picayune, supra. In that case it is stated that although group boycotts or concerted refusals to deal clearly run afoul of § 1 of the Act, there must be disclosed by the evidence a specific intent to achieve monopoly by the combination in order to constitute a violation of § 2. The Court then concluded, 345 U.S. at page 626, 73 S. Ct. at page 890, that the case before it did
'* * * Not demonstrate an attempt by a monopolist established in one area to nose into a second market, so that past monopolistic success both enhances the probability of future harm and supplies a motivation for future forays.'
In the case before us there was a boycott and it was illegal. By means of it an undue restraint was imposed upon interstate commerce. Upon these premises plaintiff contends that a violation of § 2 of the Act necessarily appears. I do not reach that conclusion. The conceded boycott and its consequent undue restraint upon interstate commerce has not been shown to have resulted in the creation of a monopoly of the Dealers in the newspaper distribution business, nor to have been undertaken or persisted in with the intent that they should monopolize such distribution. Even within the limited market of home delivery, the restraining combination does not trend in the direction of ultimate monopoly. There is no proof that any uniform price is charged by the Dealers for home delivery of plaintiff's newspaper or that Allied is being employed as a price-fixing instrumentality. Further, the Dealers do not jointly occupy and control a single delivery territory. The evidence discloses no likelihood that success in excluding newsboys from the territory of any Dealer would enable him to monopolize the distribution of the newspaper in that territory. There is a limit to the price which a reader will be willing to pay for home delivery of his newspaper. Beyond that limit numerous other sources are available to him for the procurement of his newspaper at a lower price. The criteria for monopoly stated in United States v. E. I. DuPont & Co., 1956, 351 U.S. 377, 76 S. Ct. 994, 100 L. Ed. 1264, and in American Tobacco Co. v. United States, supra, are not here disclosed in the evidence. The evidence fails to sustain the charged violations of 2 of the Sherman Act. United States v. DuPont & Co., supra.
By reason of the clear violation of § 1 of the Sherman Act, to be found in the actions and threats of the Dealers, in combination through Allied, and among themselves, plaintiff is entitled to permanent injunctive relief from such conduct on their part in the future.
The interlocutory injunction filed herein on June 18, 1957 will be made permanent in accordance with the views herein expressed. The form of the decree may be settled on notice.