RESPONDENT: Columbia Broadcasting System, Inc.
LOCATION: The Borden Company - Chicago Milk Division
DOCKET NO.: 45
DECIDED BY: Warren Court (1958-1962)
LOWER COURT: United States Court of Appeals for the District of Columbia Circuit
CITATION: 368 US 464 (1962)
ARGUED: Nov 13, 1961 / Nov 14, 1961
DECIDED: Feb 19, 1962
Facts of the case
Media for Poller v. Columbia Broadcasting System, Inc.Audio Transcription for Oral Argument - November 14, 1961 in Poller v. Columbia Broadcasting System, Inc.
Audio Transcription for Oral Argument - November 13, 1961 in Poller v. Columbia Broadcasting System, Inc.
Number 45, Lou Poller, Petitioner, versus Columbia Broadcasting System Incorporated, et al.
May it please the Court.
This case presents to the Supreme Court for the second time the dangers that are inherent in permitting the three great television networks to acquire and operate in a proprietary capacity, stations of their own at the same time that they supply programs to affiliated stations in something akin to in agency capacity.
In National Broadcasting Company against the United States from which the phrase ‘in a proprietary capacity' and ‘in something akin to an agency capacity' is quoted, this Court and its opinion by Justice Frankfurter upheld the FCC limitations on the location of radio stations which the networks might own, and quoted from the FCC report that the common ownership of network and station places the network in a position where its interest as the owner of certain stations may conflict with its interest as a network organization serving affiliated stations.
This was similar to the condition which existed in the motion picture industry until this Court in United States against Paramount forbad producers of pictures to operate theaters.
The first case that came up, which this danger had foreseen was U.S. against RCA where NBC wanted a station of its own in Philadelphia.
It threatened its affiliate Westinghouse, that if it didn't sell Westinghouse's Philadelphia station to NBC, NBC would cancel or refuse to renew Westinghouse's affiliation.
You held, as we all know, that the antitrust aspect of NBC's action was not washed out by FCC's approval of the deal.
The same thing has happened in this case.
This time, CBS is the actor, and it has used its leverage as a network, the phrase used by the Chief Justice in U.S. against RCA on a much smaller affiliate than Westinghouse, and with much more devastating anti-competitive results than in the Westinghouse case.
The third instance of the same thing is involved in the pending suit which the Chronicle Publishing Company of San Francisco, another affiliate of NBC, has brought in the District Court for the Northern District of California against NBC for using similar tactics to compel that plaintiff to sell its television station in San Francisco to NBC.
John M. Harlan II:
How does that broad issue -- how does that broad issue tie in to the facts of this (Voice Overlap)
I would like to -- I'm just going to give you the facts of the case if I may.
This is an appeal by Poller from the affirmance by the Court of Appeals of the District of Columbia Circuit of an order of Judge Holtzoff, granting the defendant's motion for summary judgment and dismissing Poller's complaint with courses.
Judge Washington dissented from the judgment of the Court of Appeals which was made by Chief Judge Wilbur K. Miller and Judge Prettyman, this Court granted certiorari.
The action was brought under Section 4 of the Clayton Act for damages sustained by Poller as the assignee of the Midwest Broadcasting Company by reason of the violation by the defendants, Columbia and others of Sections 1 and 2 of the Sherman Act.
The alleged conspiracy, the violation alleged was a conspiracy among the defendants to reduce competition and hence restrain trade in the television broadcasting industry in Milwaukee and to attempt to monopolize that trade as far as it concerns ultra frequency broadcasting in Milwaukee and throughout the United States.
The natural and intended result of the conspiracy as we claim was to force Poller to sell his television station to CBS at a distressed figure far below its real value, and this action is to recover the resulting damage.
The Court of Appeals in an opinion by Judge Miller, accepted as true, all the exculpatory testimony of the defendants in their pre-trial affidavits and deposition and on that basis found as facts that there was no conspiracy, no restraint of trade, no monopolization or attempt to monopolize.
“Hence,” he said, “Such injury as Poller sustained resulted from his own foolishness in investing so much money in his station when he had only an affiliation agreement with CBS which it cancelled in the exercise of its legal rights so to do.”
Judge Washington dissented on the ground that Poller raised genuine issues of material fact as to whether there was a conspiracy against him in restraint of trade and the monopoly, and that Poller should have a chance to have these questions of fact decided by a jury particularly where he said, as here, “It is charged that the public has been deprived of maximum television service by a reduction of competition.”
He pointed out that CBS's freedom to select its customers did not sanction what amounts to a conspiracy to restrain trade and the monopoly.
Of course, I realize that even if we win our battle in this Court, we have not won the war.
I do not at all underestimate the skill of our opponents, but we shall gain all that we have a right to ask, an opportunity to present our full case to a jury to decide.
In order to reduce the questions of fact, which we claim and which Judge Washington thought were raised, we must recite the transactions which resulted in the injury to Poller.
In February 1953, Midwest Broadcasting Company, I think I -- it will be less confusing if I speak of that company as Poller because he became the assignee of all of its rights at the end of 1955.
Midwest Broadcasting Company which had been operating a radio station in Milwaukee was granted by FCC a permit for one of the three ultra-high frequency channels which FCC assigned to Milwaukee when FCC felt that it had opened a large number of new channels to ultra-high frequency broadcasting in order, as it said, to establish a truly nationwide and competitive television system because the previously 12 available very high frequency channels were so completely occupied that there was no room in them for further development.
From the commercial point of view, these VHF channels were preempted almost exclusively by the three great networks and their affiliates.
By 1954, CBS, NBC and ABC had affiliations with 90% of the operating stations in the United States, CBS itself with 202 of these stations.