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Porter, Price Administrator v. Leventhal


December 31, 1946


Author: Frank

Before L. HAND, CHASE, and FRANK, Circuit Judges.

FRANK, Circuit Judge.

The issue here is this: Did defendant in 1943 sell at prices above the March 1942 prices of his "most closely competitive seller of the same class?" On that issue the plaintiff had the burden of proof. Therefore, plaintiff, in order to win, had to show facts which directly proved, or from which it could reasonably be inferred, that defendant's "most closely competitive seller" sold Regens-made lighters during March 1942 at prices below the prices at which defendant sold in 1943 (i.e., between $2.75 and $3.75 each). This plaintiff sought to do by proof that Regens, the sole manufacturer of such lighters, sold them during March 1942 to both jobbers and retailers, and that Regens' price to jobbers was then 45› a piece, and to retailers was then 60›.

But from those facts alone it cannot reasonably be inferred that Regens' prices were those of defendant's "most closely competitive seller." As there was undisputed evidence that during March 1942 Regens was not the only jobber, it was necessary, in order to justify such an inference, also to show, as of that date, either (a) that Regens was the principal jobber; or (b) that Regens was, for other reasons, the "most closely competitive seller"; or (c) that someone who occupied that status, or the jobbers selling most of such lighters, then sold below the price-range at which defendant later sold in 1943. The evidence does not establish, directly or indirectly, that Regens was the principal jobber; and, for all we know from the evidence, the great bulk of Regens-made lighters was sold during March 1942 by jobbers other than Regens at prices equal to, or above, those at which defendant sold in 1943. Proof that one jobber, Regens, sold at certain prices in March 1942 does not suffice to make out a prima facie case that that jobber was defendant's "most closely competitive seller," or that whatever jobber occupied that position sold at those prices.

Plaintiff suggests in effect that it is reasonble to infer that other jobbers did not sell above Regens' price as jobber because competition would necessarily keep the prices down to Regens' prices. That argument would be sound, (1) if Regens' supply had been plentiful during March 1942, and (2) if most retailers had known of Regens' price. But the evidence is that, because of the restrictions imposed by the War Production Board, Regens' supply was not then plentiful. There is no evidence from which it may properly be inferred that Regens was then supplying most of the retailers or from which it can be ascertained to what extent the demand was being met by other jobbers who had previously acquired Regens-made lighters from Regens or from Regens' jobber-customers. Moreover, we find it impossible to believe, absent proof thereof, that the numerous scattered small retailers dealing in such a commodity then knew of Regens' prices; and there is no such proof. In addition, there is evidence that Regens-made lighters were then sold at retail at prices ranging from $2.75 to $5. each.

Plaintiff points to the evidence that Regens, as sole manufacturer, was the original source of supply, and that Regens, in making its sales to other jobbers, endeavored to have them resell to retailers at not above $7.20 a dozen, and also to have them arrange with retailers that the retail price was to be maintained at approximately $1.00 a piece. But from those facts one cannot reasonably infer that in March 1942 such other jobbers - and therefore defendant's "most closely competitive seller" - sold at a range less than $2.75 to $3.75 each. For anyone who bought from Regens was free to sell at any price he chose to jobbers or retailers, since Regens imposed no contractual obligations as to resale prices, and the record contains no evidence that its efforts to maintain prices were successful.*fn3

Plaintiff asserts that data showing the prices in March 1942 of the defendant's "most closely competitive seller" were peculiarly accessible to defendant. Whether that is true may perhaps be doubted, considering plaintiff's statutory powers to obtain evidence from all sellers. But assuming arguendo that the data were peculiarly available to defendant, we still could not agree that defendant had either the burden of proof or of "going forward." Nor do we regard as apposite cases cited by plaintiff such as Anderson v. Mt. Clemens Potery Co., 66 S. Ct. 1187. In such cases, the plaintiff proved that defendant had violated a legal duty owed to the plaintiff, but, because of the nature of defendant's wrong, the plaintiff was unable to show the amount of the resultant damages; the "fact" that damages occurred was certain, but uncertainty existed as to their amount; in those circumstances, the amount of the damages may be estimated "Upon probable and inferential as well as direct and positive proof."*fn4 In the instant case we do not reach the question of the amount of damages, since the plaintiff did not show that the defendant had done the wrong of which plaintiff complains, i.e., charged prices in violation of the regulation.

That defendant violated the regulations in not preparing the required "base period statement" is not here material.For that violation the statutory remedy was an injunction; such an injunction issued. That defendant used an improper method in determining its prices is not proof that its prices were excessive. Injunction constitutes the remedy against wrong pricing-methods; an action for damages, like that here, for excessive prices. Even if defendant had thrown dice to arrive at its prices, they might nevertheless have been no higher than those of the most closely competitive seller.To prove that they were higher was plaintiff's burden, and that burden it did not discharge.*fn5

We conclude that, on the evidence, judgment should not have been entered against defendant. However, "in order that injustice may not be done," we reverse and remand so that plaintiff, if he so desires, may try to offer further proof.*fn6 Since, as a consequence of such further proof, the judge may find that defendant overcharged, we think it desirable to make this comment concerning the assessment of treble damages: Assuming, arguendo, that we have any authority to review as to such an issue, we think that, had there been proof of overcharges by defendant, the judge would not have abused his discretion in assessing treble damages, in the light of defendant's method of arriving at his prices.

Reversed and remanded.

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