Citizen Publishing Company v. United States

PETITIONER: Citizen Publishing Company
RESPONDENT: United States
LOCATION: Des Moines Independent Community School District

DOCKET NO.: 243
DECIDED BY: Warren Court (1967-1969)
LOWER COURT:

CITATION: 394 US 131 (1969)
ARGUED: Jan 15, 1969
DECIDED: Mar 10, 1969

Facts of the case

Question

Media for Citizen Publishing Company v. United States

Audio Transcription for Oral Argument - January 15, 1969 in Citizen Publishing Company v. United States

Earl Warren:

Number 243, Citizen Publishing Company et al, appellants, versus the United States.

Mr. MacLaury.

Richard J. Maclaury:

Mr. Chief Justice, may it please the Court.

My pan of argument is to spend 25 minutes on the opening and then reserve for if the Court please, five minutes for rebuttal.

This case comes here from the District Court, in the District of Arizona on direct appeal under the Expediting Act.

It tests for the first time the validity under the antitrust laws of a newspaper operating agreement.

The agreement combines the commercial asset and the functions of two newspapers in Tucson, Arizona, the morning, in Sunday Star and the evening, Citizen.

Agreements of this kind have become increasingly necessary to preserve competition between newspapers on the journalistic level.

The reason the agreement was adopted is because Tucson cannot support two newspapers operating at both the journalistic and the commercial levels.

Now, this situation is not peculiar to Tucson.

Over the past 30 or 40 years, there has been a drastic decline in the number of separately owned newspapers in the same city.

In 1920, there were 552 cities having separately owned newspapers.

20 years later in 1940, there were only 181 and by the mid-sixties, there were 65.

And of the 65, more than one third operated under agreements such as we have into consideration here.

Now the Government claims that this agreement is a per se violation of Section 1 of the Sherman Act and the District Court on summary judgment held that it was in fact a violation, a per se violation of Section 1.

It is our contention that the agreement in substance and effect was a merger and that the Court should've judged it under the rule of reason and specifically that it should apply to this agreement the failing company doctrine because Citizen in 1940 was truly in a failing condition.

Now, we do not seek here to justify per se violations.

The Government argued below and it argues in its brief here that all we do is to seek to justify per se violations.

I just like to emphasize to the Court that that is not our position.

We feel that the agreement is entirely lawful and would've been found lawful had it been examined under the rule of reason rather than on summary judgment and under the per se rule.

This case involves a typical situation of the economic conditions experienced by newspapers throughout the country.

In 1940, Citizen was in fact a failing company.

It did not pay dividends for many years.

Its liabilities far exceeded its assets and it have been kept alive in able to pay its current bills only by contributions from its stockholders.

In contrast its competitor, the Morning Star was in good financial condition.

It was a strong competitor.

It was selling more than 50% -- it sold more than 50% of the advertising in Tucson.

Also the respect to circulation.

Richard J. Maclaury:

The respect to circulations in 1939 were approximately 2000 a part.

Sun -- the daily circulation, the Sun -- the Star was approximately 12,000, the Citizen approximately, 10,000, but in addition, Star had a 12,000 circulation of its Sunday edition which Citizen did not have.