The Elder-Beerman Stores Corp. v. Federated Department Stores, Inc. , 459 F.2d 138 ( 1972 )

KENT, Circuit Judge.

This is an appeal from a jury verdict, in an anti-trust case, in favor of the plaintiff, The Elder-Beerman Stores Corp., in the amount of $1,275,097, which was trebled under the statute,¹ and judgment entered in the amount of $3,825,291. Judgment for the plaintiff, The Elder-Beerman Stores Corp., was entered in only one of the two actions submitted to the jury. The first action was commenced on November 27, 1961, and was combined in trial with the second case which was commenced on June 30, 1966. Upon the trial the jury returned a verdict of “no cause for action” in the first case and announced the verdict which has been previously referred to in the second case.

The appeal now before the Court relates only to the verdict for the plaintiff in the second case. The defendants named in the complaint included Federated Department Stores, Inc., Associated Merchandising Corporation (A.M.C.), its wholly owned subsidiary AIMCEE Wholesale Corporation (A.W.C.), and 66 suppliers. The suppliers were severed from the ease for the purposes of this trial. Plaintiffs will be referred to as Elder-Beerman, and the defendants as Federated or Rike’s.

In the complaint Elder-Beerman made claims against Federated and the other defendants asserting that they had “combined and entered into combinations * - * * to injure and destroy the plaintiff Elder-Beerman * * * as competitors * * * to restrain interstate trade and commerce unreasonably and unlawfully * * * and establish a monopoly of and to attempt to monopolize the department store business in the Dayton, Ohio, area * * Before the cases came on for trial all but twelve of the supplier defendants had been dismissed from the case by the plaintiffs. In the complaint plaintiff also asserted that Federated had violated the Robinson-Patman Act,² but this claim was dropped prior to trial, and the Court submitted the case to the jury solely on the issues of violation of Sections 1 and 2 of the Sherman Act.³

The Court stated in ruling upon the defendant’s motion for new trial that “there was insufficient evidence to justify damages on any claims under the Clayton Act.” However, on this record it appears that any award of damages was by virtue of Section 4 of the Clayton Act⁴ for violations of Sections 1 and 2 of the Sherman Act.

Federated since 1959 has been the owner of Rike’s, the leading department store in Dayton for many generations. The guiding head of Elder-Beerman and the other plaintiffs was Arthur Beer-man who had been in the clothing business in Dayton for a number of years before 1945 when he opened Beerman Stores, Inc. for the sale of general merchandise. Subsequently the (Beerman) business expanded and grew by the opening of new stores and the acquisition of existing stores in the Dayton area. During the period from 1957 through 1965, the years involved in the lawsuits in question, the total sales of the Elder-Beerman Stores grew from $10,440,000 to $33,300,000.

The lawsuit upon which the judgment was based was commenced in 1966, and sought damages for the period commencing with 1962. In 1962 the plaintiffs did a gross business of $26,500,000, and in 1965 a gross business of $33,300,000. The plaintiffs conceded that Federated and its predecessor, the Rike-Kumler Company, were completely unsuccessful in monopolizing the department store business in Dayton.⁵ The lawsuits, the first of which was instituted in 1961, were successful in forcing the suppliers, willingly or unwillingly, to sell to Elder-Beerman, since, as stated in plaintiffs’ brief, by the time of trial “all but 14 of the supplier defendants had agreed to sell to Elder-Beerman without discrimination and were dismissed from the suit and Elder-Beerman dismissed two other supplier defendants in whom it had lost interest.”

Plaintiffs’ whole theory of liability was that there was a conspiracy between Federated (and/or its predecessor) and the suppliers for the purpose of destroying the plaintiffs’ ability to compete on fair terms, and for the purpose of attempting to obtain a monopoly ^5a

THE CONSPIRACY IN RESTRAINT OF TRADE THEORY

To establish the alleged conspiracy Elder-Beerman relied upon what might be described as the “rimless wheel” theory. It was the theory of Elder-Beerman that having introduced evidence that Rike’s, AMC and AWC had used what Elder-Beerman refers to as “coercion” ⁶ to persuade some suppliers to grant to Rike’s the exclusive right to sell the merchandise involved, that Elder-Beerman had, therefore, established a conspiracy and should be permitted to put in evidence proofs in regard to exclusives granted by other suppliers without presenting evidence to show that Rike’s had in fact used coercion to persuade such suppliers to grant to Rike’s the exclusive right to sell the suppliers’ merchandise and thereby include such suppliers as part of the alleged conspiracy. Elder-Beerman offered volumes of hearsay testimony, much of it from its own employees, as to alleged statements supposed to have been made by representatives of suppliers,⁷ including some not named as original defendants, which plaintiff claims should be interpreted to mean that the refusal to sell to ElderBeerman was because of “coercion” on the part of Federated.^7a

An examination of the record reveals that there was direct evidence of an exclusive relationship between Rike’s and many of the suppliers named as defendants. There was hearsay evidence of the exclusive relationship as to several. On the record before us this Court reaches the conclusion that there was circumstantial evidence of an exclusive arrangement resulting from some “coercion” as to six of the suppliers. There was direct evidence of what might be termed “coercion” as to four suppliers. There was hearsay evidence, primarily from Elder-Beerman employees, in regard to “coercion” in exclusive arrangements as to fifteen suppliers.⁸ As to the remaining supplier defendants the basic evidence was that plaintiff claimed there was an exclusive or a refusal to sell to Elder-Beerman. There was also some evidence of an effort by Rike’s to obtain an exclusive or a refusal by Rike’s to buy from certain suppliers who sold to Elder-Beerman.

Much of the documentary evidence related to the refusal of certain suppliers to sell to Elder-Beerman but little of it could be dignified as setting forth in the correspondence a statement by the supplier that the refusal was because of coercion on the part of Rike’s and there was evidence of other reasons for the sales to Rike’s including Rike’s heavy promotional activity as to lines for which it had an exclusive arrangement. An example of this is Frigidaire refrigerators, manufactured in Dayton. Rike’s had an exclusive arrangement for the sale of Frigidaire refrigerators in department stores in Dayton, although they were sold in area appliance stores. It appeared from the evidence that Frigidaire maintained an exclusive arrangement with Rike’s and refused to sell to Elder-Beerman because Frigidaire had concluded that if it made its refrigerators available to Elder-Beerman that Rike’s would take on additional refrigerator lines, to which it would give substantial promotion, which in the opinion of Frigidaire would result in a definite reduction in the total unit sales of Frigidaire refrigerators in the Dayton area. And again as to Farah Manufacturing Company (maker of men’s slacks) there was some evidence, of a hearsay nature, that the refusal to sell such slacks to Elder-Beerman was because of coercion on the part of Rike’s. The letter quoted ⁹ casts quite a different light on this evidence and in fact might be considered sufficient reason for excluding all hearsay testimony as to the alleged coercion of this supplier as not raising a substantial issue for the jury.

In regard to some lines of merchandise there was evidence as to the availability of alternative items. An examination of the record shows that little or no attention was given to the suitability of such alternative lines, failure of proof which this Court considers to be fundamental in the context of this lawsuit. As an example: admittedly, Elder-Beerman sold Simmons, Serta and several other lines of mattresses and did a very substantial volume of business in the field. Rike’s had an exclusive arrangement for the sale of Stearns & Foster mattresses. There was not a great deal of evidence as to the relative merits of the several mattresses, except that the plaintiff claimed that Stearns & Foster was the pre-eminent mattress sold in department stores. No evidence was offered as to the relative markets served by these several brands of mattresses. We cannot accept the plaintiff’s claim that there was a restraint of trade as to the articles involved because of Rike’s exclusive arrangements with the suppliers without competent evidence relating to the availability and suitability of alternative lines. The fact that Elder-Beerman desired to sell the lines did not make the articles involved so unique as to eliminate the need for such evidence. Hershey Chocolate Corp. v. Federal Trade Commission, 121 F.2d 968 (3rd Cir., 1941).¹⁰

The Supreme Court has dealt with the question of exclusive arrangements between supplier and seller as related to a claimed conspiracy in restraint of trade on more than one occasion. In this field there has been laid down a rule of reason. Standard Oil Company of New Jersey v. United States, 221 U.S. 1, 66, 31 S.Ct. 502, 55 L.Ed. 619 (1911); Chicago Board of Trade v. United States, 246 U.S. 231, 238, 38 S.Ct. 242, 62 L.Ed. 683 (1918); Northern Pacific Railway Co., et al. v. United States, 356 U.S. 1, 5, 78 S.Ct. 514, 2 L.Ed.2d 545 (1958). We recognize that certain restraints are unreasonable per se, United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 60 S.Ct. 811, 84 L.Ed. 1129 (1940) (price fixing); Klor’s Inc. v. Broadway-Hale Stores, Inc., 359 U.S. 207, 79 S.Ct. 705, 3 L.Ed.2d 741 (1959) (group boycotts); Timken Roller Bearing Co. v. United States 341 U.S. 593, 71 S.Ct. 971, 95 L. Ed. 1199 (1951) (division of markets among competitors). As to those restraints which are not per se unreasonable there is a question of the reasonableness of the exclusive arrangements. As stated in Seagram & Sons, Inc. v. Hawaiian Oke & Liquors, Ltd., 416 F.2d 71, 76 (9th Cir., 1969):

“[1,2] Not every agreement is per se “in restraint of trade” within the meaning of section 1. See White Motor Co. v. United States, 1963, 372 U. S. 253, 261, 83 S.Ct. 696, 9 L.Ed.2d 738. Thus, it is well settled that it is not a per se violation of the antitrust laws for a manufacturer or supplier to agree with a distributor to give him an exclusive franchise, even if this means cutting off another distributor. See United States v. Arnold, Schwinn & Co., 1967, 388 U.S. 365, 376, 87 S. Ct. 1856, 18 L.Ed.2d 1249; Lawlor v. National Screen Serv. Corp., 1957, 352 U.S. 992, 77 S.Ct. 526, 1 L.Ed.2d 540 [and see 3 Cir., 1959, 270 F.2d 146, 152, and 1956, 238 F.2d 59, 65]; United States v. Columbia Steel Co., 1948, 334 U.S. 495, 522, 524-525, 68 S.Ct. 1107, 92 L.Ed. 1533; Scanlan v. Anheuser-Busch, Inc., 9 Cir., 1968, 388 F.2d 918, 921; Walker Distrib. Co. v. Lucky Lager Brewing Co., 9 Cir., 1963, 323 F.2d 1, 7; Ace Beer Distribs., Inc. v. Kohn, Inc., 6 Cir., 1963, 318 F.2d 283, 286-287; Packard Motor Car Co. v. Webster Motor Car Co., 1957, 100 U.S.App.D.C. 161, 243 F.2d 418; Interborough News Co. v. Curtis Publishing Co., 2 Cir., 1955, 225 F.2d 289, 293; Naif eh v. Ronson Art Metal Works, 10 Cir., 1954, 218 F.2d 202, 206-207; Bascom Launder Corp. v. Telecoin Corp., 2 Cir., 1953, 204 F.2d 331, 334-335; Fargo Glass & Paint Co. v. Globe American Corp., 7 Cir., 1953, 201 F.2d 534, 539-540; Schwing Motor Co. v. Hudson Sales Corp., D.Md., 1956, 138 F.Supp. 899, aff’d per curiam, 4 Cir., 1956, 239 F. 2d 176; United States v. Bausch & Lomb Optical Co., S.D.N.Y., 1942, 45 F.Supp. 387, 398-399, aff’d by an equally divided court, 1944, 321 U.S. 707, 719, 64 S.Ct. 805, 88 L.Ed. 1024. Cf. Albrecht v. Herald Co., 1968, 390 U.S. 145, 154, 88 S.Ct. 869, 19 L.Ed.2d 998 (concurring opinion). See generally Report of the Attorney General’s National Committee to Study the Antitrust Laws 27-29 (1955); Fulda, Individual Refusals to Deal: When Does Single-Firm Conduct Become Vertical Restraint?, 30 Law & Contemp.Prob. 590, 597-98 (1965); McLaren, Territorial and Customer Restrictions, Consignments, Suggested Resale Prices & Refusals to Deal, 37 Antitrust L.J. 137 (1968); Robinson, Providing for Orderly Marketing of Goods, 15 ABA Antitrust Sections 282, 286-88 (1959); Turner, The Definition of Agreement under the Sherman Act: Conscious Parallelism & Refusals to Deal, 75 Harv.L.Rev. 665, 703-05 (1962).”

We are bound to follow the rule laid down by the United States Supreme Court in United States v. Arnold, Schwinn & Co., 388 U.S. 365, 87 S.Ct. 1856, 18 L.Ed.2d 1249 (1967), where in discussing the legality of exclusive territories and some customer limitations imposed upon dealers by a manufacturer, the Court at page 374, 87 S.Ct. at page 1863, said:

“So here we must look to the specifics of the challenged practices and their impact upon the marketplace in order to make a judgment as to whether the restraint is or is not ‘reasonable’ in the special sense in which § 1 of the Sherman Act must be read for purposes of this type of inquiry.”

In discussing the effect of exclusive distribution arrangements in a different context this Court in Ace Beer Distributors, Inc. v. Kohn, Inc., 318 F.2d 283 (6th Cir., 1963), said at pages 286, 287:

“That, without the results proscribed by the Sherman Act, is not a violation of the Act. A manufacturer has a right to select its customers and to refuse to sell its goods to anyone, for reasons sufficient to itself. United States v. Colgate & Co., 250 U.S. 300, 39 S.Ct. 465, 63 L.Ed. 992. A refusal to deal becomes illegal under the Act only when it produces an unreasonable restraint of trade, such as price fixing, elimination of competition or the creation of a monopoly. United States v. Parke, Davis & Co., 362 U.S. 29, 32, 80 S.Ct. 503, 4 L.Ed.2d 505; Kiefer-Stewart Co. v. Joseph E. Seagram & Sons, 340 U.S. 211, 71 S.Ct. 259, 95 L. Ed. 219; Lorain Journal Co. v. United States, 342 U.S. 143, 72 S.Ct. 181, 96 L.Ed. 162. The fact that a refusal to deal with a particular buyer without more, may have an adverse effect upon the buyers business does not make the refusal to deal a violation of the Sherman Act. Damage alone does not constitute liability under the Act.”

This Court further said at page 287:

“Unless it can be said that the refusal to deal with plaintiff had the result of suppressing competition and thus constituted ‘restraint of trade’ within the meaning of Section 1 of the Sherman Act, that is no violation of the Act. We do not think that the substitution by Stroh Brewery Company of one distributor for another had this result.”

While the Schwinn case, supra, involved only one manufacturer, yet the language of the Court at page 376 of 388 U.S., at page 1864 of 87 S.Ct., seems appropriate to many of the lines of merchandise involved in this case.

“At the other extreme, a manufacturer of a product other and equivalent brands of which are readily available in the market may select his customers, and for this purpose he may ‘franchise’ certain dealers to whom, alone, he will sell his goods. Cf. United States v. Colgate & Co., 250 U.S. 300, 39 S.Ct. 465, 63 L.Ed. 992 (1919). If the restraint stops at that point — if nothing more is involved than vertical ‘confinement’ of the manufacturer’s own sales of the merchandise to selected dealers, and if competitive products are readily available to others, the restriction, on these facts alone, would not violate the Sherman Act. It is within these boundary lines that we must analyze the present case.”

On this record in the absence of any more substantial evidence of the alternative lines available and their suitability we cannot say that the decision in Hershey Chocolate Corp. v. Federal Trade Commission, 121 F.2d 968 (3rd Cir., 1941) is applicable. Nor is there evidence to bring the situation confronting us within the meaning of Klor’s v. Broadway-Hale Stores, Inc., 359 U.S. 207, 79 S.Ct. 705, 3 L.Ed.2d 701 (1959).¹¹

On this record we are forced to the conclusion that the plaintiff and the trial court treated all the exclusive arrangements existing between the defendant and certain of its suppliers as part of one alleged conspiracy. Certainly, no adequate instructions were given to suggest to the jury that it would be necessary to find a separate conspiracy between Rike’s and each named supplier with which it had an exclusive arrangement in order to justify a verdict for the plaintiff.

The trial judge relied upon Poliafico v. United States, 237 F.2d 97 (6th Cir., 1956), cert. den. 352 U.S. 1025, 77 S.Ct. 590, 1 L.Ed.2d 597 but in that case the subject of the conspiracy was narcotics and this Court said at page 104 of 237 F.2d:

“All appellants knew of the conspiracy. The suppliers knew that the Po-liafico group must resell the heroin at a profit; and all associated with Po-liafico in the resale of the heroin knew that Poliafico must buy it from suppliers and that the resales must be at a profit.”

In other words, by the very nature of the business everyone involved in the alleged conspiracy had to know that other persons would be performing illegal acts in furtherance of the conspiracy. To the same effect are United States v. Tramaglino, 197 F.2d 928 (2nd Cir., 1952); Lefco v. United States, 74 F.2d 66 (3rd Cir., 1934); United States v. Lester, 282 F.2d 750 (3rd Cir. 1960). From these cases it appears that in order to establish such a conspiracy (based upon the “rimless wheel” theory) there must be shown: (1) that there is an overall-unlawful plan or “common design” in existence; (2) that knowledge that others must be involved is inferable to each member because of his knowledge of the unlawful nature of the subject of the conspiracy but knowledge on the part of each member of the exact scope of the operation or the number of people involved is not required, and (3) there must be a showing of each alleged member’s participation.

We interpret the “rule of reason” as meaning that the granting of exclusive selling rights or acceptance of such exclusive selling rights, acts which are not prohibited by law¹² unless there is a resulting foreclosure of market alternatives cannot, without proof of such foreclosure, form the basis for a jury verdict that the defendants had entered into a conspiracy to restrain trade. In this case we find that the evidence of the exclusive arrangements between Rike’s and the named suppliers was insufficient to establish that Elder-Beer-man was foreclosed from market alternatives and certainly was insufficient to establish the conspiracy to restrain trade upon which Elder-Beerman based a right to recover.

More applicable to the facts in this case is the decision of the United States Supreme Court in Kotteakos v. United States, 328 U.S. 750, 66 S.Ct. 1239, 90 L.Ed. 1557 (1946). In that case there was evidence of obvious violations of the provisions of the National Housing Act, 12 U.S.C. §§ 1702, 1703, 1715, 1731. Numerous loans were involved and fraudulent activity on the part of a number of persons. In describing the evidence the Court said at pages 754, 755, 66 S.Ct. at page 1243:

“The evidence against the other defendants whose cases were submitted to the jury was similar in character. They too had transacted business with Brown relating to National Housing Act loans. But no connection was shown between them and petitioners, other than that Brown had been the instrument in each instance for obtaining the loans. In many cases the other defendants did not have any relationship with one another, other than Brown’s connection with each transaction. As the Circuit Court of Appeals said, there were “at least eight, and perhaps more, separate and independent groups, none of which had any connection with any other, though all dealt independently with Brown as their agent.” [United States v. Lekacas,] 151 F.2d [170] at 172. As the Government puts it, the pattern was “that of separate spokes meeting at a common center,” though we may add without the rim of the wheel to enclose the spokes.”

While there is much discussion in the Kotteakos decision indicating the possibility that such a “rimless wheel” theory might be used in a civil case though not appropriate in a criminal case, yet, because of the nature of the proofs we are forced to the conclusion as stated by the Supreme Court in the Kotteakos case at page 769, 66 S.Ct. at page 1250:

“This view, [i. e. of a single conspiracy] specifically embodied throughout the instructions, obviously confuses the common purpose of a single enterprise with the several, though similar, purposes of numerous separate adventures of like character.”

In other words, we recognize that this case was tried against Federated alone without suppliers being involved in the trial. But this could not justify the admission of hearsay evidence for the purpose of accomplishing the inclusion of a supplier as a co-conspirator with Federated without first demonstrating that the supplier in fact had knowledge of the existence of such conspiracy. To permit Elder-Beerman to use the hearsay evidence offered as a foundation for a conspiracy based upon the “rimless wheel” theory results in the offer and acceptance of damage evidence of the nature which will be hereinafter discussed. We, therefore, hold that on this record Elder-Beerman failed to offer sufficient probative evidence to establish the alleged single conspiracy upon which it bases its claim for damages.

Necessarily, since we find the conspiracy in restraint of trade issue inadequately supported, the verdict must fail. Baltimore and Ohio Ry. Co. v. Pos-tom, 85 U.S.App.D.C. 207, 177 F.2d 53 (1949). As stated by this Court in Vo-lasco Products Co. v. Lloyd A. Fry Roofing Co., 308 F.2d 383, 390 (6th Cir., 1962):

“[5-7] The plaintiff Volasco claims that the ‘two issue’ rule is applicable in Tennessee and that, if other issues were properly submitted to the jury, there can be no reversal because of an error in the submission of one issue. The plaintiff cites two cases from the Sixth Circuit, in support of this theory. Louisville & Nashville Railroad Company v. Rochelle, 252 F. 2d 730, C.A. 6, and Atlantic Coastline Railroad Company v. Smith, 264 F.2d 428, C.A. 6. These cases are both diversity cases tried in Tennessee where the two-issue rule prevails (Tennessee Central Ry. Co. v. Umenstetter, 155 Tenn. 235, 291 S.W. 452) and under Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, the District Court must follow the substantive law of the state. Tennessee and Ohio are the only states in the Sixth Circuit to follow this rule. This case is tried under federal law where the ‘two issue’ rule is not applicable. Wilmington Star Mining Co. v. Fulton, 205 U.S. 60, 78, 79, 27 S.Ct. 412, 51 L.Ed. 708; Baltimore and O. R. Co. v. Reeves, 10 F.2d 329, 330, C.A. 6; Chicago and N. W. Ry. Co. v. Garwood, 167 F.2d 848, 857, C.A. 8; Roth v. Swanson, 145 F.2d 262, 269, C.A. 8.”

This conclusion is in accord with the rule laid down by the United States Supreme Court in Sunkist Growers, Inc. v. Winckler & Smith (1962), 370 U.S. 19 at pages 29, 30, 82 S.Ct. 1130, 1136, 8 L.Ed.2d 305:

“Since we hold erroneous one theory of liability upon which the general verdict may have rested — a conspiracy among petitioners and Exchange Lemon — it is unnecessary for us to explore the legality of the other theories. As was stated ... in Maryland v. Baldwin, 112 U.S. 490, 493, 5 S.Ct. 278, 28 L.Ed. 822 (1884), ‘[I]ts generality prevents us from perceiving upon which plea they found. If, therefore, upon any one issue error was committed, either in the admission of evidence or in the charge of the court, the verdict cannot be upheld . .

DAMAGES

Though we find it necessary to reverse the judgment for the plaintiff for the reasons previously stated, yet we feel compelled to discuss the manner in which the damage issue was presented to the jury. At the outset it is clear that successful recovery by a plaintiff in a private antitrust suit requires that such plaintiff establish three elements as necessary predicates to recovery. As stated in Simpson v. Union Oil Company of California, 311 F.2d 764, 767 (9th Cir., 1963):

“[2] It is clear that the private litigant in a suit-charging violation of the antitrust law stands in a different position than the government in an antitrust action. In a government action, there need be present only a violation of the laws and damage to individuals need not be shown. The private litigant must not only show the violation of the antitrust laws, but show also the impact of the violations upon him and damage to him resulting from the violations of the antitrust laws.”

Similar language is found in Continental Ore Co. v. Union Carbide and Carbon Corp., 289 F.2d 86, 90 (9th Cir., 1961).

As to the fact of damage issue it was the plaintiff’s theory that a department store which is unable to obtain the brands of merchandise demanded by the public will suffer lost sales both in the desired brand and in items which the customers would be likely to purchase because of the customers’ presence in the department store to purchase the desired brand. Elder-Beerman established by the evidence that it could not obtain certain brands of merchandise sold to Rike’s by the suppliers joined as defendants in this suit and claimed that there were many other brands which it could not obtain. Elder-Beerman took the position that having established these facts it had established the fact of damage. The plaintiff’s theory virtually ignored the necessity for proof that comparable alternative brands were not available. An essential element in attempting to establish the fact of damage because of exclusion from a specified source of supply is the lack of an alternative comparable substitute for the desired merchandise. United States v. Arnold, Schwinn & Co., 388 U.S. 365, 87 S.Ct. 1856, 18 L.Ed.2d 1249 (1967); Hershey Chocolate Corp. v. Federal Trade Commission, 121 F.2d 968 (3rd Cir., 1941); Ace Beer Distributors, Inc. v. Kohn, Inc., 318 F.2d 283 (6th Cir. 1963). In Ace Beer Distributors, Inc. this Court said at page 287:

“There is no allegation or contention that the beer of other breweries was not just as available in that area after the change in distributors as it was before.”

An examination of the evidence in this case discloses that plaintiff’s basic theory was that its “desire” for a specific brand of merchandise was sufficient to establish that such brand was thereby rendered unique, and that the withholding of such brand constituted a violation of the antitrust laws. Testimony as to uniqueness was confined primarily to Elder-Beerman employees who testified that in their opinion Elder-Beerman could have done more business if it had had available each and all of the brands which it “desired.” There is a lack of independent evidence to establish any factors of uniqueness in the brands in question on any other basis. The record leaves unanswered the question of the availability of comparable alternative brands. It would appear that in Dayton some of the uniqueness of the brands desired by Elder-Beerman resulted from heavy promotional advertising and activity on the part of Rike’s, and as previously pointed out the willingness of Rike’s to advertise and promote specific brands of merchandise was in certain instances the specific reason for granting to Rike’s the exclusive right to sell such brands of merchandise.

While we find it unnecessary to reverse the judgment for the plaintiff on this basis, we do have more than grave doubt as to the substantiality of the evidence offered by the plaintiff to support this aspect of its claim for damages.

We also point out that ElderBeerman offered expert testimony as to the amount of damages which it sustained because of the lack of the brands which it desired. Plaintiffs’ expert offered as his theory of the manner in which the amount of damages should be computed certain formulae as to almost all of the 66 “unavailable” brands of merchandise. The basis for the formu-lae and the ultimate testimony in regard to the alleged loss sustained was information given to the witness by plaintiffs’ counsel prior to trial, and not upon the evidence offered and received during the course of the trial. The trial court made no effort to confine such damage testimony to the few lines of merchandise where evidence of a “conspiracy” had in fact been introduced, and permitted the plaintiffs’ expert witness to testify as to losses sustained because of lack of availability of the many brands of merchandise which the plaintiff had been unable to purchase for resale in its department stores. The evidence of Elder-Beerman’s inability to obtain certain brands of merchandise was offered and received without regard to whether the record showed that the exclusive arrangement barred Elder-Beerman from the market for that type of merchandise because of unavailability of alternative brands. In fact there was substantial evidence to demonstrate that alternative brands were available and were handled by Elder-Beerman. Exclusive arrangements between Rike’s and its suppliers related to brands of merchandise and not to type or quality of merchandise.

The formula to which we have made reference was very complicated when described by the witness. In essence the expert’s theory was that if Rike’s sold “x” per cent of a specified exclusive brand of merchandise then Elder-Beer-man could, therefore, have sold the same percentage of the same merchandise had it been able to offer it. After making some adjustments (subtracting a portion for sales of merchandise carried by Elder-Beerman that would not have been made had the specified exclusive brand been available, then adding something for what were termed “peripheral” sales in other departments resulting from the presence of the customer in the store) the expert determined the total amount of lost sales because of unavailability of the exclusive brands and then reached a conclusion as to the loss of profits and the damage. This theory appears to us to be questionable absent evidence, which we assume should be available, of the effect of sales of such merchandise by stores which had, during the period in question, taken on such lines of merchandise in place of or in addition to alternative brands previously carried.

We recognize that the Supreme Court has pointed out on more than one occasion that although proof of the amount of damage in a ease such as this may be somewhat uncertain, plaintiff is not precluded from recovery unless the amount of damage is totally speculative. Story Parchment Company v. Paterson Parchment Paper Company, 282 U.S. 555, 51 S.Ct. 248, 75 L.Ed. 544 (1931) ; Bigelow v. RKO Radio Pictures, Inc., 327 U.S. 251, 66 S.Ct. 574, 90 L.Ed. 652 (1946). As pointed out by the Supreme Court in Bigelow at pages 264, 265, 66 S.Ct. at page 580:

“In such a case, even where the defendant by his own wrong has prevented a more precise computation, the jury may not render a verdict based on speculation or guesswork. But the jury may make a just and reasonable estimate of the damage based on relevant data, and render its verdict accordingly. In such circumstances ‘juries are allowed to act upon probable and inferential, as well as direct and positive proof.’ Story Parchment Co. v. Paterson Parchment Paper Co., supra, [282 U.S.] 561-564, 51 S.Ct. 248; Eastman Kodak Co. v. Southern Photo Material Co., supra, [273 U.S. 359] 377-379, 47 S.Ct. 400, 71 L.Ed. 684. Any other rule would enable the wrongdoer to profit by his wrongdoing at the expense of his victim. It would be an inducement to make wrongdoing so effective and complete in every case as to preclude any recovery, by rendering the measure of damages uncertain. Failure to apply it would mean that the more grievous the wrong done, the less likelihood there would be of a recovery.

“The most elementary conceptions of justice and public policy require that the wrongdoer shall bear the risk of the uncertainty which his own wrong has created. See Package Closure Corp. v. Sealright Co., 2 Cir., 141 F.2d 972, 979. That principle is an ancient one, Armory v. Delamirie, 1 Strange 505, and is not restricted to proof of damage in antitrust suits, although their character is such as frequently to call for its application.” (Emphasis supplied.)

To the same effect see Zenith Radio Corporation v. Hazeltine Research, Inc., 395 U.S. 100, 89 S.Ct. 1562, 23 L.Ed.2d 129 (1969); Elyria-Lorain Broadcasting Co. v. Lorain Journal Co., 358 F.2d 790 (6th Cir., 1966); Arthur Murray, Inc. v. Oliver, 364 F.2d 28 (8th Cir., 1966).

Thus we find ourselves in accord with the statement found in McCleneghan v. Union Stock Yards of Omaha, 349 F.2d 53, 56 (8th Cir., 1965):

“Plaintiff claims too much. * * *. Proof of damage to the public or to others will not without more support a finding of fact of damage caused by defendants’ wrongful acts.”

PRETRIAL CONFERENCES

The appellant complains that the trial court failed to enter any “pretrial orders” in this case. We are of the opinion that in protracted litigation such as this antitrust case it would be advisable for the trial court to hold one or more formal pretrial conferences, as provided by Rule 16, Rules of Civil Procedure, 28 U.S.C.A. It would appear that formal pretrial orders resulting from such conferences could have substantially reduced the time required to try the case and might well have eliminated some of the time-consuming testimony which was irrelevant to the issues properly before the court. The witnesses, including the plaintiff’s expert witness as to damages, could have been confined to the issues before the court and jury and could have been prevented from digressing at length in regard to matters unrelated to the issues, in response to questions both on direct examination and cross-examination.

CONCLUSION

Because of the result reached the other allegations of error do not require discussion. We anticipate that upon remand the trial court will hold appropriate pretrial conferences and enter orders pursuant thereto which will substantially reduce the time necessary for trial of this case.

The judgment for the plaintiff is reversed and the case is remanded to the District Court for further proceedings not inconsistent with this opinion.

1 . 15 U.S.C. § 15.

2 . 15 U.S.C. § 13.

3 . 15 U.S.C. §§ 1 & 2.

4 . 15 U.S.C. § 15.

5 . In his closing argument plaintiffs’ counsel stated to the Court and Jury, “We contend in this case several things. One, that Federated was trying to get a monopoly of the conventional department store business in this area. They didn’t succeed but they were trying.” (Tr. pg. 13886).

In the brief on appeal plaintiffs-appel-lees state at page 53:

“Elder-Beerman fortunately was able by Arthur Beerman’s genius and use of his capital to prevent Federated from actually achieving a monopoly and eliminating Elder-Beerman as a traditional department store competitor. Evidence was directed at showing Federated’s attempt and conspiracy to monopolize even though its objective was not attained.”

And further at page 62 :

“The charge on monopolization could not have been prejudicial to Federated because the jury was told by plaintiff’s counsel that Elder-Beerman did not claim that Federated had succeeded in achieving a monopoly, as that would have put Elder-Beerman out of business, that fortunately Federated was not successful in its attempt, due to the preventive measures taken by Arthur Beer-man.”

Thus, it is obvious that the plaintiffs-ap-pellees abandoned any previously claimed theory that the defendant Bike’s had obtained a monopoly of the department store business in Dayton.

5a . In order to establish the existence of a conspiracy it is absolutely essential to prove that there was an agreement between the named conspirators. “A conspiracy is an agreement (or understanding) between two or more parties to do an unlawful thing or to do a lawful thing in an unlawful manner.” Words and Phrases, Permanent Edition, Vol. 8A “Conspiracy”, pg. 376. (Emphasis supplied).

“The conspiracy is complete on the forming of the criminal agreement and the performance of at least one overt act in furtherance thereof.” (Emphasis supplied). Singer v. United States, 208 F.2d 477, 480 (6th Cir. 1953) ; Poliafico v. United States, 237 F.2d 97 (6th Cir. 1956); Pinkerton v. United States, 151 F.2d 499, 501 (5th Cir. 1945).

6 . The term “coercion” was used by the attorneys for Elder-Beerman and is used in this opinion as describing the claimed course of conduct which Elder-Beerman sought to show Bike’s used to cause suppliers to refuse to do business with Elder-Beerman or refuse to continue to do business with Elder-Beerman.

7 . As an example the following appears on page 1219a of the Appendix — -Volume III, in the testimony of Max Gutmann, Executive Vice-President of Elder-Beerman, in relation to the inability to obtain VanHeu-sen’s shirts.

“And I met there with Mr. Phillips.

Q. Who was with you, if you recall?

A. Mr. Orden and I believe Mr. Jay.

Q. Whom did you meet at the Van-Heusen office? A. Mr. Phillips, both father and son.

Q. Who were they? A. They were the principals of the VanHeusen Company.

Q. Is the name of the company Phillips-VanHeusen? A. That is right.

Q. And tell us what happened there.

A. Well, we met in one office and we shook hands, and we proceeded into a conference room, or a larger office, and Mr. VanHeusen — or Mr. Phillips, Sr., and I were walking ahead, and as we approached our chairs, he said, “Well, you know we wouldn’t have any problems if it wasn’t for Bike’s.” And just then his father walked in and said, “Hey, son,” —his son walked in and said, “Dad don’t say that.”

And we had a long discussion after that, but we never got the shirts, never got the merchandise.

Q. Now, that is for the budget stores?

A. That is right.

—8837—

Q. Now, up until June 30, 1966, was VanHeusen willing to sell you the Van-Heusen shirts for the budget stores? A. No.”

7a . A careful reading of the testimony of Kenyon Starling, former ranking official of Kike’s, establishes his understanding of the general merchandising policies of Kike’s during the time of his employment. However, it should be recognized that Starling at no time testified as to the existence of any specific exclusive-dealing arrangement or agreement. The testimony of Starling might well have been dis-positive of the claim of Elder-Beerman that Bike’s was attempting to monopolize the department store business in the Dayton area. We are not satisfied that the testimony of Starling- was sufficient to establish the existence of any conspiracy which would permit the use of the exception to the hearsay rule relating to statements by a “co-conspirator” particularly in such a case as this where one all-encompassing conspiracy was claimed.

The exception to the hearsay rule has been generally recognized in conspiracy cases, however, the extent of the exception is carefully limited. Krulewitch v. United States, 336 U.S. 440, 69 S.Ct. 716, 93 L. Ed. 790 (1940). In Glasser v. United States, 315 U.S. 60, 62 S.Ct. 457, 86 L.Ed. 680 (1942), the Supreme Court stated at pages 74, 75, 62, S.Ct. at page 467:

“However, such declarations are admissible over the objection of an alleged co-conspirator, who was not present when they were made, only if there is proof aliunde that he is connected witli the conspiracy. Minner v. United States, 10 Cir., 57 F.2d 506; and see Nudd v. Burrows, 91 U.S. 426, 23 L.Ed. 286. Otherwise, hearsay would lift itself by its own bootstraps to the level of competent evidence.”

and the limitation on the exception has been carefully adhered to by this Court in Continental Baking Company v. United States, 281 F.2d 137, 152, 153 (6th Cir. 1960).

8 . An example of this is found in the testimony of John A. Silvestri, Vice-President and Merchandise Manager of the Bee-Gee Shoe Corp., found at pages 275a and 276a of the Appendix- — Volume I.

“A. Well, in the spring of 1962 again at the New York show I also visited Spalding. I met a Mr. Boyd who was the president of the company, and introduced myself to him, told him where I was from and requested the shoes. He said that the salesman in the territory was responsible for the distribution so he introduced me to the salesman—

Mr. Gilliam: Your Honor, may I approach again?

(Discussion off the record.)

By Mr. Goldman:

Q. Continue. A. So I was introduced to Mr. Kuhnert and he knew of our operation and our stores, he said, and he told me that they had a long-standing agreement with the Rike-Kumler Company, and that they were the only store in the Dayton, Ohio, area to carry the shoes. And he said that they did a remarkable job with the product and that he knew their feelings, that he wouldn’t even consider selling a shoe store, let alone another department store.

So I again visited Mr. Kuhnert with some of our sales people at the Columbus shoe show that year, and he was [13251 very courteous and showed us the shoes and I called him over to the side and again told him, “We have a lot of calls for these shoes in our stores.

I think that you are missing a big opportunity not selling us,” and he said, “Well, after all, I like to sell shoes and I can well appreciate that you probably do get a lot of calls for the shoes”; but he said, “this isn’t the only community we have this agreement with.”

He said, “We have the same situation in Columbus, Ohio, with Lazarus and the same thing with Shillito’s in Cincinnati.” And he says, “You know how these boys are. You don’t mess around with them, and I would just shudder to think what would happen if I sold you people the shoes.”

And I continued to call on Mr. Kuhn-ert regularly at each New York show and Columbus show, and we had— In general he was always very courteous to me, and he sort of, I might say consoled me with my problem. I would tell him- — I would reiterate on each meeting the—

The Court: Let’s ask questions.

By Mr. Goldman:

Q. Well, none of these consolation talks or anything of that kind ever resulted in any sale by Spalding to you up until June of ’66? A. No, sir.”

9 . Exhibit P-ll-H, Volume V Appendix, pp. 32-38e.

April 2, 1959 Farah Mftg. Co.

3rd at Cotton El Paso, Texas Eph Krupp

I realize the answer as to why we are cutting out several accounts was rather vague the other day. Have a little more time now and would like to explain fully.

Since you are familiar with our situation in Dayton this can prove to be representative of any large city in the territory.

My primary objective in the Dayton is to do the largest volume possible consistent with honest business practices. Beerman’s have a large volume of business in eight stores, one of which is down-town. Their price eatogories are consistently one dollar under our best retailing numbers. Their thinking at this time is not to upgrade but to create larger volume by price promotion. If I made an all-out effort to sell Beerman’s, it is my considered opinion that the volume would not exceed $15,000.00 a year.

At present, they are using Billy the Kid and Levi for their prestige numbers. Incidentally, Beerman’s give these people damn little. On the other hand, they give Salant and Salant and other cheap firms a tremendous amount of volume.

While I would like very much to get the $15,000 or so from Beerman’s, I would be paying a very dear price for that business. Rike’s is the prestige large department store in town. The buyers at Rike’s have no wish to tell us what accounts to sell or not to sell. In fact, one of them tells me that’s strictly my business. However, the crucial point is this:

Rike’s have no wish to be strongly identified with a line that Beerman’s or the other cheap stores are carrying. This is not to say that Rike’s would not carry the line at all. This is merely to say that Rike’s would not lend their whole-hearted co-operation to the FAR-AH COMPANY . . . under these circumstances. They would probably turn out to be a $15,000 or $20,000 a year account for the store as a whole. Further more, they would rarely if ever advertise the line and would be constantly on the look-out for a good strong brand with which to become identified. On the other hand, if we do not ship Beerman’s, Rike’s will buy a minimum of $100,000 a year for the store and will be a tremendous aid in selling other fine stores in Dayton, such as Dunhills and the Metropolitan. Furthermore, they will also be instrumental in influencing other fine stores throughout the country to give FARAH all of their cooperation.

Rike’s are planning a series of eight (8) ads in the Dayton American — a good paper. These will be co-operative ads which will enhance FARAH’S reputation considerably. If Beerman’s were carrying the line these ads would not be run..

If you have any further questions, I’d like to discuss this further at the BAMA Show.

With kindest personal regards, I am Sincerely,

/s/ Irv Irv Skolnick IS: es

10 . The facts in Hershey are readily distinguishable because there was in that case, as stated at page 970 of the opinion, “An agreement between Lamont and the three vending machine operators,” and as further stated at page 970, “To keep the trade of the three largest vendors, Hershey was forced into a similar arrangement.” There was no evidence of any such situation in this case. (Emphasis supplied.)

11 . In Klor’s there was an affirmative finding of a group boycott. This record is totally devoid of any such evidence.

12 . 15 U.S.C. § 13.

“And provided further, That nothing herein contained shall prevent persons engaged in selling goods, wares, or mer-cliandise in commerce from selecting their own customers in bona fide transactions and not in restraint of trade

See also United States v. Colgate & Co., 250 U.S. 300, 39 S.Ct. 465, 63 L.Ed. 992 (1919); Ace Beer Distributors, Inc. v. Kohn, Inc., 318 F.2d 283 (6th Cir. 1963).