Full opinion text
FINDINGS OF FACT AND CONCLUSIONS OF LAW EDWIN M. STANLEY, Chief Judge. The plaintiff, United States of America, seeks by this civil action to prevent and restrain an alleged violation of Section 1 of the Sherman Act (15 U.S.C. § 1). Briefly summarized, the complaint charges that “the defendants have engaged in a combination and conspiracy in unreasonable restraint of * * * interstate trade and commerce in corrugated containers, in the Southeastern United States, in violation of Section 1 of the Sherman Act”; that the “combination and conspiracy has consisted of a continuing agreement, understanding, and concert of action among the defendants to exchange among themselves information respecting prices that they have charged, contracted to charge, or quoted, specific customers, for the purpose and with the effect of restricting price competition among themselves in the sale of corrugated containers”; that for “the purpose of effectuating the * * * combination and conspiracy the defendants have done those things which * * * they combined and conspired to do”; and that the “combination and conspiracy has had the effect, among others, of unreasonably restricting price competition in the sale of corrugated containers to purchasers located in the Southeastern United States.” Each defendant timely filed answer denying, in all material respects, the allegations of the complaint. Additionally, defenses are raised based on the provisions of a consent decree approved and entered on April 23, 1940, by the United States District Court for the Southern District of New York, in the action entitled “United States of America, Plaintiff, against National Container Association, et al., Defendants” (Civil Action No. 8-318). The case was tried by the Court without a jury. The commendable cooperation of counsel for the plaintiff and for all of the defendants in streamlining both discovery procedures and the presentation of evidence at the trial, resulted in many of the facts, including documents and other exhibits, being stipulated. Appreciation is again expressed to all counsel for their efforts and accomplishments in this regard. The Court, after giving due consideration to the pleadings and the evidence, including exhibits and stipulations, the requests and briefs submitted by the parties, and the oral arguments of counsel, now makes and files herein its Findings of Fact and Conclusions of Law, separately stated: FINDINGS OF FACT I General Findings 1. Jurisdiction of the subject matter duly appears, and proper venue of the defendants is not contested. 2. For purposes of brevity, the defendants are referred to herein by the following abbreviated names: Container Corporation of America........... Container Corporation Albemarle Paper Manufacturing Company Albemarle Carolina Container Company................ Carolina Continental Can Company, Inc............... Continental Crown Zellerbach Corporation............... Crown Zellerbach Dixie Container Corporation................ Dixie Dixie Container Corporation of North Carolina ................................... Dixie of North Carolina Inland Container Corporation......... Inland International Paper Company......... International The Mead Corporation.......'........ Mead Miller Container Corporation ......... Miller Owens-Illinois Glass Company......... Owens-Illinois St. Joe Paper Company............... St. Joe St. Regis Paper Company............. St. Regis Tri-State Container Corporation....... Tri-State Union Bag-Camp Paper Corporation ... Union-Camp West Virginia Pulp and Paper Company West Virginia Weyerhaeuser Company.............. Weyerhaeuser 3. Except as otherwise stated or required by context, the facts herein found occurred or existed within the period from January 1,1955, to October 14,1963 (hereinafter referred to as the “period covered by the Complaint”), and within, and are limited to the Southeastern United States (herein defined as the States of Virginia, North Carolina, South Carolina, Georgia, Florida, Alabama, Tennessee and Kentucky). 4. Each defendant engaged in the manufacturing and selling of corrugated containers in the regular course of its business, except that the following defendants were not engaged in the corrugated container business in the Southeastern United States prior to the date set forth opposite their respective names: Albemarle............ September 9, 1959 Continental .......... October 26, 1956 Crown Zellerbach...... November 30, 1955 Dixie of North Carolina March 1, 1959 Mead................. December 27, 1956 Owens-Illinois ......... October 4, 1956 St. Regis ............. October 2, 1958 West Virginia......... September 30, 1957 (except through its subsidiary Hinde & Dauch) Weyerhaeuser May 1, 1957 Most of the corrugated containers sold by each of the defendants in the regular course of its business were manufactured by it upon customer order, and in accordance with the specifications prepared by or for the particular customer so ordering, as to the style, dimensions, weight, strength, color, printing, type of joint, and other physical characteristics, and, unless otherwise expressly designated, whenever corrugated containers are referred to herein they are of the character described in this Finding. 6. The basic material used in the manufacture of corrugated containers is corrugated containerboard consisting of one or more sheets of a corrugated material sandwiched between two or more sheets of linerboard. 7. Each defendant, in the regular course of its business, has sold and shipped substantial quantities of corrugated containers to customers located in states other than the states in which said corrugated containers were manufactured. II The Industry 8. Aggregate dollar sales of corrugated containers for all defendants for each year since, and including, 1961 were in.excess of $100 million per year. At the time of the filing of the Complaint herein, the aggregate shipments of corrugated containers of all defendants from plants in the Southeastern United States represented approximately ninety per cent (90%) of total shipments of corrugated containers from all plants in the Southeastern United States. 9. During the period covered by the Complaint, there has been growth and expansion of the corrugated container industry in the Southeastern United States. From an industry comprised in 1955 of 30 manufacturers having a total of 49 corrugated container manufacturing plants, it has grown to an industry comprised in 1963 of 51 manufacturers having a total of 98 such plants. In January of 1955 the beginning of the period covered by the Complaint, 9 of the 18 defendants, and 21 non-defendants, were engaged in the corrugated container business in the Southeastern United States. In 1963, the end of the period covered by the Complaint, there were a total of 18 defendant and 33 non-defendant corrugated container manufacturers in the Southeastern United States. During the same period, shipments of corrugated containers from plants located in the Southeastern United States increased from slightly over 9 billion square feet in 1955 to almost 16 billion square feet in 1963. The growth and expansion is illustrated by the following statistics showing the number of such plants in the Southeastern United States and the volume of shipments therefrom: Number of Plants Shipments of Corrugated Containers (Millions of Sq. Ft.) Year Total Defendants Others 9,077 1955 49 18 31 9,659 1956 56 21 35 10,026 1957 59 30 29 10,400 1958 67 36 31 12,328 1959 71 43 28 12,266 1960 76 46 30 13,481 1961 81 53 28 1962 85 55 30 14,831 1963 98 58 40 15.846 10. In 1963, there were more than 10,000 purchasers of corrugated containers in the Southeastern United States and, in addition, several thousand potential purchasers of such containers. In that year, the defendants employed in the aggregate more than 411 sales personnel to sell their corrugated containers who, in the course of their sales activity in behalf of their respective companies, each business day made on the average 4 or 5 calls each on purchasers or potential purchasers. In October, 1963, the defendants had the following number of sales personnel regularly soliciting corrugated container business in the Southeastern United States: Company Number Company Number Container Corporation 57 Mead 26 Albemarle 9 Miller 7 Carolina 15 Owens-Illinois 59 Continental 20 St. Joe 12 Crown Zellerbach 27 St. Regis 23 Dixie 12 Tri-State 5 Dixie of North Carolina 3 Union-Camp 36 Inland 24 West Virginia 17 International 23 Weyerhaeuser 36 11. Throughout the period covered by the complaint, there has been an ample supply of raw materials available from competitors and from others for manufacturing corrugated containers. Necessary machinery and equipment has been available from numerous suppliers. Initial investment for a corrugated container manufacturing facility is relatively low, approximating as little as $50,000 to $75,000 for a minimum size viable enterprise. 12. The capacity to supply all purchasers of corrugated containers in the Southeastern United States has exceeded in each of the years from 1955 through 1963 the demand of purchasers for such containers. 13. The costs of manufacturing corrugated containers vary from plant to plant, and for each plant manufacturing corrugated containers unit costs vary with the ratio between that plant’s production and capacity. Generally, each order which increases a plant’s ratio of production to its capacity represents an increasing profit or diminishing loss for it. Each plant attempts to obtain orders to enable it to operate at all times at as favorable a ratio of production to its capacity as possible. 14. The demand for corrugated containers is determined by the volume of sales of the wide variety of disparate products manufactured and sold by the many thousands of purchasers of corrugated containers. Purchasers do not buy corrugated containers except as they need them for shipping their products, and do not build up inventories of such containers. Purchasers of corrugated containers do not enter into long term commitments for their requirements. Purchasing is done generally on a spot or short term basis covering a purchaser’s immediate or near term requirements. 15. During the period covered by the Complaint, the trend of corrugated container prices was downward, and while containerboard prices fluctuated during the period they were substantially the same at the end of the period as at the beginning thereof, in contrast to the increase in prices during the same period for paper and allied products generally, and for all other commodities, excluding farm and food. During the same period, labor rates, machinery and equipment costs, and other production costs, for both corrugated containers and containerboard, increased. Ill Nature and Extent of Competition; Effect of Price Communication 16. Throughout the period covered by the Complaint, the corrugated container industry was and is highly competitive, and each defendant engaged in and was faced with price competition in the sale of corrugated containers; and the parties stipulated that if the officers or employees of each defendant responsible for pricing corrugated containers in the Southeastern United States were called to testify, each such officer or employee would so testify. 17. Throughout the period covered by the Complaint, every purchaser of corrugated containers had numerous alternate sources of supply, both actual and potential. Such purchasers were free to shift all or a part of their business from one supplier to another, and they frequently did so. Although such purchasers generally did not make such shifts unless offered a lower price by another supplier, each defendant repeatedly lost customers and obtained new ones, and continuously had substantial losses and gains in its sales to particular customers. Tables 1 and 2 annexed to DX-1, and the Charts on pages 21 through 24 of DX-6, reflect business lost and gained from one year to the next for the period 1960-1962. The figures shown in said Tables and Charts are representative for each defendant of the entire period covered by the Complaint. 18. The following examples from Tables and Charts referred to in the preceding paragraph are typical of the extent of gains and losses in customers and in sales to particular customers experienced by each of the defendants throughout the period covered by the Complaint: (a) In 1960, Container Corporation’s plants in the Southeastern United States made sales of corrugated containers to a total of 3,132 accounts. Of these, 1,209 accounts, representing over 38% of all of the accounts sold by Container Corporation during that year, were new accounts; i. e., accounts which had bought nothing from any of Container Corporation’s plants in the Southeastern United States during the preceding year. In addition, Container Corporation’s sales during that year to another 488 of those accounts, representing over 15% of the total, amounted to more than 150% of its preceding year’s sales to each of such accounts. Moreover, of the 3,132 accounts sold in 1960 a total of 1,210 (over 38%) were totally lost by Container Corporation in 1961, and its sales in 1961 to another 343 of these accounts (over 19% thereof) were less than 50% of its preceding year’s sales to each of such accounts. Not only was a large percentage of Container Corporation’s total Southeastern United States accounts involved in such gains and losses but the dollar volume of its sales to such accounts was also very substantial, accounting for over $14,300,000 out of total sales of about $29,400,000, or more than 48% of Container Corporation’s total corrugated container sales from plants in the Southeastern United States. (b) In 1960, Albemarle’s plant at Richmond, Virginia, sold a total of 291 accounts. Of these, 92 (over 31%) were new accounts. Albemarle’s sales in 1960 to another 49 accounts (over 16% of Albemarle’s total accounts) amounted to over 150% of its preceding year’s sales to each of such accounts. Of the 219 accounts' sold by Albemarle in 1960, 96 (approximately 33%) were totally lost by it in 1961, and its 1961 sales to another 50 of these accounts (over 17%) were less than 50% of its preceding year’s sales to each of such accounts. The dollar volume of Albemarle’s 1960 sales to the accounts involved in such gains and losses amounted to almost $1,200,-000, or more than 67% of its total 1960 corrugated container sales of less than $1,800,000. (c) In 1960, Owens-Illinois’ plants at Atlanta, Georgia, Jacksonville, Florida, Miami, Florida, and Salisbury, North Carolina, sold a total of 2,527 accounts. Of these, 908 (over 35%) were new accounts. Owens-Illinois’ 1960 sales to another 381 accounts (over 15% of total 1960 accounts) exceeded 150% of its preceding year’s sales to each of such accounts. Of the 2,527 accounts sold in 1960, 941 (over 37%) were lost by Owens-Illinois in 1961, and its 1961 sales to another 268 of these accounts (over 10%) decreased to less than 50% of its 1960 sales to each of such accounts. The dollar volume of Owens-Illinois’ 1960 sales to the accounts involved in such gains and losses amounted to almost $8,900,000, or more than 62% of its total 1960 corrugated sales from the above plants of less than $14,-300,000. 19. The record includes over 1,000 documents from the defendants’ files. These documents are contemporaneous business records, most of which relate to specific purchasers, prepared by employees directly engaged in the sale of corrugated containers. They constitute a sampling from defendants’ files, and tend to portray independent and unrestricted price competition by each of the defendants. This sampling relates to hundreds of purchasers of corrugated containers and to thousands of transactions with such purchasers. Among other things, these documents establish that during the period covered by the Complaint : (a) In order for a supplier or prospective supplier to compete effectively for the business of a purchaser, there is a vital need for information as to the price alternatives available to that purchaser. (b) Purchasers usually informed suppliers and prospective suppliers as to prices most recently charged or quoted by competing suppliers and identified the particular supplier or suppliers charging or quoting such prices. (c) Purchasers often informed suppliers and prospective suppliers as to the particular prices which must be met or beat in order to obtain or retain business. (d) Upon obtaining such price information, suppliers and prospective suppliers often reduced their prices. (e) Absent such price information, a supplier or prospective supplier often quoted prices higher than those recently charged or quoted by other suppliers. (f) Each defendant often encountered situations in which the prices most recently charged or quoted by it were cut by other defendants, and responded to such price cutting by meeting or beating the prices quoted by such other defendants. (g) Each of the defendants endeavored to obtain additional sales by cutting the prices which other defendants had most recently charged or quoted to their customers or prospective customers. 20. Plaintiff was furnished listings showing the name and address of every corrugated container customer in the Southeastern United States of each of the defendants, aggregating more than 10,000 such customers. No evidence was adduced by plaintiff from any of such customers showing or in any way indicating that the prices charged by any one or more of the defendants were stabilized or harmonized by the requesting or furnishing of price information by or between any of the defendants, or showing or in any way indicating that the prices charged or quoted such customers were any higher than they would have been had there not been any such requesting or furnishing of price information, or showing or in any way indicating any uniformity or parallelism of prices between or among any two or more of the defendants. 21. The record contains statistics, together with graphical presentations prepared therefrom, showing for the entire period covered by the Complaint the four-week price trend of each plant of each defendant, except Albemarle, Miller and St. Joe, and the average monthly prices of St. Joe. These statistics tend to demonstrate the absence of any general uniformity, harmony, stability, or parallelism in prices either as among the several defendants or among the plants of individual defendants. Most price trends varied widely among the plants of the several defendants, both as to direction and as to degree. IV How Prices Determined 22. In deciding whether to seek a particular order from a particular customer, or whether to offer to sell a particular container, and in determining the price to be charged or quoted, each defendant exercises its own business judgment. Many factors influence the decision, including, among others, the following : (a) estimates prepared from its internal manual; (b) current plant production load or existence of idle time in its plant, a condition which varies widely in each plant from week to week, season to season, and with the rise and fall of business activity of its customers; (c) suitability of the equipment in its plant for the production of the particular container and the expense of obtaining new equipment when necessary; (d) availability of any special materials needed to produce the order; (e) desirability of adding the particular order to the then scheduled plant production mix and the ability to do so, which varies continuously in the operation of the plant; (f) convenience of customer’s plant location for servicing and cost of delivery ; (g) size of the order, e. g., carload or less than carload shipment, and customer’s prescribed delivery schedule; (h) customer’s credit rating; (i) growth prospects of the account and the possibility of substantial future orders; (j) the experimental or developmental character of the particular container and the need to gain manufacturing and marketing experience with respect to it; (k) amount of customer’s business represented by the order; (l) general market conditions in the Southeastern United States and in the corrugated container industry particularly ; (m) prices of its recent sales of the same or other corrugated containers to that customer; (n) customer loyalty; (o) effect of the order on its costs and profits; and (p) prices believed to have been most recently charged or quoted by competitors, when such defendant believes it has sufficient basis for such belief. 23. A defendant regularly supplying a customer with corrugated containers, when pricing an order from that customer for additional corrugated containers of the same or different specifications, would usually price such additional containers on the same basis used by it in pricing that customer’s last previous order. The foregoing was subject to change when (1) there had been a change in any of the competitive or other market factors or conditions; (2) the specifications and volume requirements were not substantially the same; or (3) there had been a change in raw material costs or other significant costs. 24. Most purchasers of Corrugated containers generally purchased their containers from two or more of the 'defendants concurrently. 25. Prices which purchasers of corrugated containers would pay were determined on the basis of price alternatives available to them from existing and prospective suppliers. It was necessary for each supplier to meet or be below competition in order to retain its customers, and to meet or be below the prices and other terms offered by competitors in order to obtain new customers or additional business from existing customers. 26. The defendants, in selling corrugated containers, dealt with buyers who had knowledge of prices which had been and were being offered by competing suppliers of corrugated containers. 27. Before determining the price to be quoted to a specific purchaser for a corrugated container, each defendant was interested in all pertinent marketing information applicable to such account. Among other things, each defendant considered the price which that purchaser had most recently been charged or quoted for corrugated containers to be pertinent marketing information and considered it beneficial to have such information. 28. All corrugated containers made to particular specifications were substantially identical regardless of which manufacturer produced them, and purchasers of corrugated containers were able to and did shift from one supplier to another on the basis of price. With minor exceptions, therefore, no manufacturer of such containers was able to obtain a higher price for such containers than the price at which another manufacturer had sold or offered to sell like containers to such purchaser, and it was important to each manufacturer to have accurate information as to the price alternatives available to such purchaser. Moreover, some purchasers did not accept the offer of the manufacturer making the lowest initial quotation, but afforded other manufacturers an opportunity to meet such lower quotation, and if met, such purchasers often divided their purchases among some or all of the low-quoting manufacturers. In consequence, when a defendant obtained what it considered reliable information as to the most recent price to a specific customer for a specific corrugated container, in the majority of instances it quoted or charged substantially the same price, irrespective of whether the source of its information had been the purchaser or another supplier. In many instances, however, depending upon particular circumstances, each defendant quoted lower or higher prices, and in all instances the determination as to the price to be charged or quoted was its individual decision. V Obtaining Price Information 29. Possible sources for obtaining the most recent price to a specific customer for corrugated containers included the defendant’s own records of prior sales, the particular purchaser involved, or one of his present or former corrugated container suppliers. Usually such information was obtained from the defendant’s own records of prior sales, or from the particular purchaser involved. As used herein, the words “most recent price” mean either the most recent price charged a specific customer in an actual sale or the price most recently quoted. 30. On occasions, buyers-furnish-suppliers with incomplete, inaccurate, or misleading information as to prices offered by competing suppliers. 31. No defendant furnished any competitor most recent price information except in response to a specific request therefor. However, when such information was furnished, it was usually accurate. 32. The extent and frequency with which most recent price information was requested or furnished varied among the several defendants and among the plants and customers of the individual defendants. 33. There is no evidence of express assurance that any defendant who furnished such price information upon request of another defendant would be able to obtain price information from such other defendant. 34. There is no evidence that any employee of any defendant ever discussed with any employee of any other defendant the desirability of furnishing price information, or the fact that price information had been or was being communicated, or the frequency of such communication, or the requesting or failing to request such information, or the method of communicating, or the action to be taken or not to be taken with respect to any such information. 35. The parties stipulated that if the officers or employees of each defendant responsible for pricing corrugated containers in the Southeastern United States were called to testify, each such officer or employee would testify that he considered that he could (with the exceptions noted in Findings 71, 167, 186 and 261), request from or furnish to competitors or not request from or furnish to competitors information as to prices for corrugated containers, and whether or not to request or furnish such information was an' individual decision. 36. There is credible evidence tending to show that, generally speaking, when price information was requested of a defendant by a competitor, such defendant’s decision whether or not to furnish such information was not affected by any price or price level which such competitor had previously charged or quoted or which such competitor might thereafter charge or quote. 37. Throughout the period covered by the Complaint, each defendant felt free to cut a most recent price received from a competitor, and after receiving a most recent price from another defendant occasionally charged or quoted prices lower than those received. 38. No defendant at any time had any express agreement or understanding with any other defendant with respect to any price or prices to be charged or quoted for corrugated containers, irrespective of whether or not such defendant had requested from or furnished to the other any price information. VI The 1940 Consent Decree 39. On April 23, 1940, a consent decree was entered in an action entitled “United States of America, Plaintiff, against National Container Association, et al„ Defendants” in the United States District Court for the Southern District of New York (Civil Action No. 8-318). 40. In addition to Container Corporation and Inland, defendants herein, the following corporations were among the defendants in the aforementioned action: Robert Gair Company, Inc., which was subsequently merged into Continental ; Gaylord Container Corporation, which was subsequently merged into Crown Zellerbach; The Hinde & Dauch Paper Company, which was subsequently merged into West Virginia; The Jackson Box Company, which was subsequently merged into Mead; F. J. Kress Box Company, Niagara Corrugated Container Co., Inc, and Superior Paper Products Co., which were subsequently merged into St. Regis; National Container Corporation, which was subsequently merged into Owens-Illinois; and Eddy Paper Corporation and Kieckhefer Container Corporation, which were subsequently merged into Weyerhaeuser. 41. On April 20, 1940, in presenting the consent decree for the approval of the District Court in the above-entitled action, counsel for the Government stated in open court: “The Government regards this decree as fully complying with the Departmental policy. We think it is a well drafted document, which fully satisfies the Department’s policy, in that it presents a constructive program which is designed to insure, not only that the violations complained of will cease, but also that such steps will be taken by the industry as will redound to the general public welfare.” 42. A nolle prosequi was signed in the companion criminal action (No. C-105-445) on April 23, 1940, and entered April 24, 1940. In its nolle prosequi, the Government stated: “That it is the publicly announced policy of the Department of Justice to recommend that indictments under the Antitrust Laws be nolle prossed in the event that defendants voluntarily submit a program, embodied in a consent decree, which goes beyond anything that might be achieved by successful criminal prosecution and which binds them to a course of conduct deemed to be in the public interest in preventing the causes of illegal restraints of trade and in promoting free competition in an orderly market; ****** “3. That the National Container Association and the corporate defendants hereinafter named, and The Stevenson Corporation have agreed to the entry of a consent decree, Civil No. 8-318, which embodies substantially the requirements in such matters set out in Paragraph 1 above; “4. That such consent decree has been tendered by defendants voluntarily and in good faith; “5. That in the opinion of the Department of Justice; the nolle pressing of this case as to the defendants hereinafter named is justified pursuant to the policy stated in Paragraph 1 above; * * * ” 43. The consent decree was widely publicized, both when it was entered and in the years subsequent thereto, in the corrugated container industry, and each of the defendants in the instant ease has been cognizant of the existence of the decree and of the terms thereof and has relied thereon. 44. The consent decree provides, in part, as follows: “3. Nothing contained in this decree limits the right of said defendants, their successors, members, directors, officers, agents, and employees, and all persons acting under, through, or for them, or any of them, to do, or to cooperate in doing, any act, or to engage in any practice, not enjoined by this decree, including but not limited to the following: “(a) gathering, auditing, and disseminating information as to the cost of manufacture of corrugated and solid fibre containers, the volume of production and shipment, the actual price (or base price derived from actual price) which the product has brought in past transactions, stocks of merchandise and materials on hand, approximate cost of transportation, and any other facts pertaining to the condition or operation of the industry, and meeting to discuss such information and statistics without, however, reaching or attempting to reach any agreement or any concerted action with respect to prices or production of such containers; * * * “4. Nothing contained in this decree limits the right of a defendant to issue and circulate lists of current prices charged for its corrugated or solid fibre containers provided such lists are made available to the trade and competitors.” VII Manuals and Internal Manuals 45. Most of the defendants prepared manuals for their own internal use containing formulae and schedules of costs and/or charges from the application of which their respective approximate manufacturing costs and/or price estimates could be computed for most corrugated containers manufactured by them. Such manuals contained schedules of costs and/or charges for corrugated container-board of various weights, strengths and wall constructions stated in terms of dollars and cents with a successively higher amount being listed for grades of board of successively greater strength. They also contained various costs and/or charges relating to the actual manufacture of corrugated containers. The manuals further contained schedules of costs and/or charges, commonly called set-up charges, for the setting up of the necessary machinery for the production of corrugated containers of various specifications. Various of such manuals have been revised from time to time to reflect changes in costs, products, materials, designs and market conditions. These manuals were variously referred to by the companies which prepared them, among other things, as “cost manuals,” “pricing manuals,” “pricing procedures” or “estimating manuals.” Whenever these manuals are hereinafter referred to, they are specifically described as “internal manuals.” Generally, the internal manuals were for internal use, and not available to the other defendants. 46. At various times, manuals containing formulae and schedules of charges, from the application of which a price estimate could be computed for most containers manufactured by them, were prepared by each of the following: National Container Corporation, The Old Dominion Box Company, Inc., Crown Zellerbach (Gaylord Container Division) and Inland. Each of said manuals was made available to other manufacturers of, and customers for, corrugated containers. Except as otherwise stated, as used hereafter the word “manual” means one of the manuals referred to in this Finding. 47. The manuals were variously referred to in the trade, among other things, as “price lists,” “estimating and pricing manuals,” or “estimating manuals.” 48. Each of the manuals contained a schedule of charges for corrugated container board of various weights, strengths and wall constructions for use in computing corrugated container prices according to the particular manual employed. These charges are stated in terms of dollars and cents with a successively higher amount being listed for grades of board of successively greater strength. In the trade, these charges were various called, among other things, an “area charge,” “base,” “base price,” “board base price,” “board factor,” “multiplier,” “level” and “board level.” 49. The manuals also contained various charges relating to the actual manufacture of corrugated containers. Before the actual manufacturing process could begin, it was necessary to set up the production machinery to accommodate the particular specification, such as style, dimensions, printing, kind of joint, etc., for each individual order and type of corrugated container. The manuals also contained a schedule of charges commonly called “set-up charges” to cover the cost of the setting up of the necessary machinery for the production of corrugated containers of various specifications. 50. In arriving at the price to be quoted or charged a particular purchaser for particular corrugated containers, each defendant took into account the price currently or most recently charged by it to that purchaser for the same or similar corrugated containers, the price alternatives available to the purchaser, its estimated manufacturing costs, desirability of such business, and the anticipated profit involved. In this connection, each of the defendants has used one or more of the manuals to compute price estimates on a substantial number of occasions in one or more of the following ways: (a) By application of the formulae and schedules of charges set forth therein; (b) By application of the formulae and schedules of charges set forth therein, but employing a board level different from that stated therein; (c) By application of the formulae and schedules of charges set forth therein, but employing a set-up charge different from that stated therein; (d) By application of the formulae and schedules of charges set forth therein, but employing other charges different from those stated therein; (e) By any combination of the applications referred to in subparagraphs (b) (c) and (d) hereof; or (f) By any of the applications hereinabove set forth, but then applying a discount to the result. The extent of such use varied among the several defendants, and among the plants and customers of individual defendants. 51. In arriving at the price to be quoted or charged a particular purchaser for particular corrugated containers, each defendant having an internal manual or internal manuals used such internal manuals in approximately the same ways and under the circumstances described in Finding 50, and often along with one or more of the manuals referred to in Finding 50. The extent of such use varied among the several defendants, and among the plants and customers of individual defendants. 52. If the same board level and setup charge were used in computing a “manual” price for a corrugated container of particular specifications there would be, in most instances, little difference in the results of the computation, regardless of which manual was used in making the computation. 58. The actual price charged for corrugated containers was usually referred to in the trade as the “end price,” which in most instances was different from any manual price referred to in Finding 52. 54. On those occasions when a defendant furnished to another defendant, upon his request, the most recent price to a specific customer for corrugated containers, such information usually was furnished either in terms of an end price or in terms of a board level. In the case of some defendants, such information was furnished only in terms of an end price. 55. On those occasions when a defendant furnished to another defendant, upon his request, the most recent price to a specific customer for corrugated containers, end prices usually were furnished when the request involved only a few different container items, and board levels usually were furnished when the request involved more than a few different container items. 56. When a customer ordered two or more different corrugated containers, specifying the same test board for all but otherwise involving different specifications, usually the supplier filled said order at prices reflecting for the entire order a constant charge for board. 57. Each defendant having its own “manual” or “internal manual,” prepared the same, and any revisions thereof, independently and without any agreement or understanding with any other defendant. 58. Price or cost estimates for a particular corrugated container computed under any one of such internal manuals differed from the price or cost estimates for such container computed under internal manuals of other companies. 59. The great majority of sales of each defendant was made at prices less than the prices would have been if computed on any published manual. There is no regular, prevalent or uniform percentage variation from any such computation in common use among any of the defendants, or in use by any individual defendant. Table 3 annexed to DX-1, and the charts at pages 47 through 68 of DX-6, contain data illustrative of the foregoing for the several defendants for the period covered by the Complaint. 60. When Crown Zellerbaeh in 1957 prepared and issued its manual as described in Finding 46, it adopted, and for a period of months followed, a policy to adhere to said manual. During that period, no employee had authority to quote or charge prices lower than prices computed on the manual, and as a result Crown Zellerbaeh lost a great volume of business. It was compelled to abandon that policy to avoid losing all of its business. By cutting prices, it regained the business it lost. VIII The Fibre Box Association 61. The Fibre Box Association, hereinafter called the “Association,” was a trade association with a nationwide membership consisting of manufacturers of corrugated and solid fibre containers. The Association had geographic divisions and zones. Zone 10 comprised the States of Virginia and North Carolina, and was known as the Piedmont Group. Zone 11 comprised the States of South Carolina, Georgia, Florida, Alabama, and those portions of Tennessee and Kentucky east of the Tennessee River with the exception of Boone, Campbell, Jefferson and Kenton Counties of Kentúcky, and was known as the Southeastern Group. Each of the defendants except Albemarle, Mil-, ler and St. Joe was a member of the Zone 10, Piedmont Group, and/or the Zone 11, Southeastern Group. 62. The Association employed a statistician who supervised its statistical program as a part of which each member compiled and submitted to the Association a weekly summary showing, in square feet, the quantity of corrugated and solid fibre shipments and the dollar value of these shipments. From this data, the Association prepared an overall corrugated price trend which was obtained by dividing the total dollars of sales made to the trade by the total footage shipped. These overall corrugated box price trends were compiled and published monthly for each division. 63. An analyzed price trend was also prepared by taking the reported sales of a selected variety of the more standard containers and adjusting the same for the box size and size of run to a common basis. These, trend figures were computed for every member of the zones and divisions as well as for each respective zone and division as a unit. These divisions and zone price trends, as well as aggregate shipment figures for each member, were issued to each member approximately ten days after the close of each week, and included comparative price trend figures for the prior 4-week periods, months, quarters and years. However, the individual member price trend figure was given only to that member. Due to the variety of the materials used and the great variety in construction of the containers, as well as differences in the “mix” due to seasonal factors, the indexes showed only price trends and could not be used for price comparison between competitors nor to ascertain the prices charged for any particular type of containers sold. 64. Meetings of members of Zones 10 and 11 were ordinarily held every four weeks with a representative of the Association and Legal Counsel, and at these meetings there was a review of statistics and charts showing substantially the same information referred to in Findings 62 and 63. In addition, statistics showing the production of paperboard, eontainerboard and boxboard were reviewed and compared with an average and with the prior year; and total raw material inventory figures were reported. A discussion of current business conditions for the corrugated container industry was usually included on the program agenda, and a discussion of current and expected demand for corrugated containers as indicated by incoming orders was often a part of the meeting. 65. Individual customer prices were not discussed at Association meetings. On some occasions, before or after said meetings, representatives of some of the defendants attending the meetings furnished most recent price information when requested by a representative of another defendant. 66. On most occasions during this period, the regular four-week Association meetings of the Piedmont Group and the Southeastern Group were held jointly. IX Findings as to Container Corporation 67. In the trade, Container Corporation, after November 15, 1960, was sometimes known as “Mengel,” but only for its Memphis, Tennessee, Nashville, Tennessee, Chattanooga, Tennessee, Lexington, Kentucky, and Winston-Salem, North Carolina, locations. Container Corporation acquired a stock interest in Mengel Company in 1954 and continued to increase its holdings of Mengel common stock, owning approximately 69 % by December 1955, and approximately 97% by December of 1959. All of Mengel’s preferred stock was retired in April 1956. On November 15, 1960, Mengel Company was merged into Container Corporation. 68. Container Corporation, in seeking business for the sale of corrugated containers, was in competition with each of the other defendants, although not necessarily at all times or in all areas or for all purchasers. 69. On those occasions when, prior to January 1963, Container Corporation considered it necessary to ascertain the accuracy of a customer’s report of another defendant’s price, or to ascertain from another defendant the most recent price to a specific customer for corrugated containers, such price information was usually requested from a defendant then supplying that customer with corrugated containers. 70. Prior to January 1963, when Container Corporation received a request from another defendant for the most recent price to a specific customer for corrugated containers, Container Corporation usually furnished the information requested. 71. Since January 1963, it has been Container Corporation’s policy that its personnel shall not request or furnish price information from or to other manufacturers of corrugated containers. Prior to 1961, Container Corporation permitted its plant sales managers and general managers in the Southeastern United States to request or furnish the most recent price to a specific customer for corrugated containers from or to other manufacturers of corrugated containers. Beginning in 1961, and continuing until January 1963, it was Container Corporation’s policy that only its Southeastern Divisional Manager was permitted to request or furnish the most recent price to a specific customer for corrugated containers from or to other manufacturers of corrugated containers. 72. The extent and frequency with which such information was requested and furnished varied among Container Corporation and the several other defendants and among the plants and customers of Container Corporation. 73. In the circumstances set forth in Findings 69 and 70, Container Corporation requested and/or furnished price information from and/or to each of the other defendants. 74. From time to time between 1958 and 1961, A. S. Clay, Sales Manager for the Winston-Salem Plant of Container Corporation, requested and furnished said price information. From time to time between 1955 and 1958, G. W. Colvin, when he was general manager of the Winston-Salem Plant of Container Corporation, and from time to time between 1961 and January 1963, when he was Southeastern Divisional Manager of Container Corporation, requested and furnished said price information. 75. As a general rule, pricing decisions were made by Container Corporation at the plant level, and the plant sales manager was primarily responsible for making price determinations. During the period between 1961 and January 1963, G. W. Colvin, Southeastern Divisional Manager, always communicated the price information he had received to the sales manager of the specific plant and generally did not communicate any advice or instructions concerning the price to be charged by the sales manager, nor was he necessarily consulted by the sales manager concerning the price to be charged. 76. Container Corporation requested price information from other defendants in order to aid it in making informed pricing and marketing decisions. Price information received by Container Corporation from other defendants was taken into account and utilized by such company in individually determining the prices to be charged or quoted by it in the same manner, to the same extent, and with the same effect as price information which it usually and ordinarily received from purchasers, provided the price information received from purchasers was considered reliable. 77. Generally, it was the policy of G. W. Colvin, while Vice-President and Southeastern Divisional Manager for Container Corporation, not to cut a price that had been given to him. However, he testified that he knew of no such Container Corporation poliey and that there were instances when Container Corporation had cut prices after obtaining price information from competitors, and he knew that there were some occasions when Container Corporation had its prices cut by competitors after giving price information to them. A. S. Clay had no rule, general practice, personal principle, or personal policy concerning the prices to be charged or quoted after he had received price information from competitors, and in each instance, he made the price determination himself. 78. When a Container Corporation plant sales manager requested and received price information as described in Finding 69, the sales manager used the information along with Container Corporation’s internal manual, which was a cost rather than a sales price manual, as well as his other market information, to help him determine whether he was interested in obtaining the business, and what price he would charge or quote that customer. The plant sales manager had no set policy with regard to submitting a quotation to a customer at a price lower than that which he had learned from a competitor. In determining his prices, each sales manager attempted to get as much as he could within reason. The sales manager felt no obligation with regard to a competitor who had furnished price information to him, nor was such obligation ever expressed to the sales manager by such a competitor. 79. In all instances, the determination as to the price to be charged or quoted by Container Corporation was its individual decision. In deciding whether to seek a particular order from a particular customer, or whether to offer to sell a particular container, and in determining the price to be charged or quoted, Container Corporation exercised its own business judgment. 80. As earlier stated, Container Corporation stopped requesting or furnishing price information in January 1963. A study of Container Corporation’s analyzed prices at its plants shows that in the nine-month period from January to October 1963, average analyzed prices were substantially the same as the average analyzed prices at its plants in the nine-month period immediately preceding January 1963. Moreover, the range between the highest and lowest prices in each of its plants in the nine-month period before January 1963 was approximately the same as the range in those plants in the nine-month period from January to October 1963. 81. Container Corporation’s price trends differed from those of each of its competitors, and there is no parallel between them. 82. Container Corporation’s price trends also varied from plant to plant, as shown by comparing the price trends of its plants for the years 1955 to 1963. 83. Container Corporation’s prices also varied from month to month throughout the period covered by the Complaint. X Findings as to Albemarle 84. Albemarle, in seeking business for the sale of corrugated containers, was in competition with each of the other defendants, except St. Regis, although not necessarily at all times or in all areas or for all purchasers. 85. On those occasions when Albemarle considered it necessary to ascertain the accuracy of a customer’s report of another defendant’s price, or to ascertain from another defendant the most recent price to a specific customer for corrugated containers, such price information was usually requested from a defendant then supplying that customer with corrugated containers. 86. When Albemarle received a request from another defendant for the most recent price to a specific customer for corrugated containers, usually the information requested was furnished, and on those occasions when the information was furnished, it was accurate. 87. The extent and frequency with which such information was requested or furnished varied among Albemarle and the several other defendants. 88. In the circumstances set forth in Findings 85 through 87, Albemarle requested and/or furnished price information from and/or to each of the other defendants, except Dixie of North Carolina, International, St. Joe and St. Regis. 89. The price information furnished by Albemarle related to prices charged customers in actual sales or prices actually quoted to customers. 90. From time to time, Anthony J. Bagley, President of Richmond Container from 1957 to September 9, 1959, and Division Manager of Albemarle after such date, and M. F. Dozier, Sales Manager of Richmond Container to September 9, 1959, and Division Sales Manager of Albemarle after such date, on occasion requested and furnished said price information. 91. Albemarle requested price information from other defendants in order to aid it in making informed pricing and marketing decisions. Price information received by Albemarle from other defendants was taken into account and utilized by such company in individually determining the prices to be charged or quoted by it in the same manner, to the same extent, and with the same effect as price information which it usually and ordinarily received from purchasers, provided the price information received from purchasers was considered reliable. 92. In all instances, the determination as to the price to be charged or quoted by Albemarle was its individual decision. In deciding whether to seek a particular order from a particular customer, or whether to offer to sell a particular container, and in determining the price to be charged or quoted, Albemarle exercised its own business judgment. 93. Albemarle’s price trends differed from those of each of its competitors, and there is no parallel between them. XI Findings as to Carolina 94. Carolina, in seeking business for the sale of corrugated containers, was in competition with each of the other defendants, except St. Joe, although not necessarily at all times or in all areas or for all purchasers. 95. On those occasions when Carolina considered it necessary to ascertain the accuracy of a customer’s report of another defendant’s price, or to ascertain from another defendant the most recent price to a specific customer for corrugated containers, such price information was usually requested from a defendant then supplying that customer with corrugated containers. 96. When Carolina received a request from another defendant for the most recent price to a specific customer for corrugated containers, usually the information requested was furnished, and on those occasions when the information was furnished it was accurate. 97. The extent and frequency with which such information was requested or furnished varied among Carolina and the several other defendants and among the customers of Carolina. 98. In the circumstances set forth in Findings 95 through 97, Carolina requested and/or furnished price information from and/or to each of the other defendants, except St. Joe. 99. There is no evidence that the price information furnished by Carolina related to prices quoted upon which an actual order had not at that time been received from the customer. 100. Carolina "furnished price information only in response to a competitor’s request, and was supplied such information only pursuant to its own specific request. 101. From time to time, C. T. Ingram, Vice-President and General Manager of Carolina, and Carter Holbrook, Sales Manager of Carolina, on occasion requested and furnished said price information. 102. Carolina requested price information from other defendants in order to aid it in making informed pricing and marketing decisions. Price information received by Carolina from other defendants was jtaken into account and utilized by Carolina in individually determining the prices to be charged or quoted by it in the same manner, to the same extent, and with the same effect as price information which it usually and ordinarily received from purchasers, provided the price information received from purchasers was considered reliable. 103. In all instances the determination as to the price to be charged or quoted by Carolina was its individual decision. In deciding whether to seek a particular order from a particular customer, or whether to offer to sell a particular container, and in determining the price to be charged or quoted, Carolina exercised its own business judgment. 104. Carolina’s price trends differed from those of each of its competitors, and there is no parallel between them. 105. Carolina’s prices also varied from month to month throughout the period covered by the Complaint. XII Findings as to Continental 106. After October 26, 1956, Continental, in seeking business for the sale of corrugated containers, was in competition with each of the other defendants, although not necessarily at all times or in all areas or for all purchasers. 107. On those occasions after October 26, 1956, when Continental considered it necessary to ascertain the accuracy of a customer’s report of another defendant’s price, or to ascertain from another defendant the most recent price to a specific customer for corrugated containers, such price information was usually requested from a defendant then supplying that customer with corrugated containers. When Continental received a request from another defendant for the most recent price to a specific customer for corrugated containers, usually the information requested was furnished. Continental neither gave to nor received from St. Joe any price information. 108. The extent and frequency with which such information was requested or furnished varied among the plants and customers of Continental. 109. From time to time between October 26, 1956, and January 1, 1957, and between January 1960 and March 31, 1963, Robert Groner, Jr., as one of Continental’s Sales Managers; and from and after January 1, 1962, Jehan B. Johnson, as one of Continental’s Sales Managers; and between October 26, 1956, and May 15, 1962, William B. Beams, as one of Continental’s Sales Managers, requested and furnished price information, as described in Finding 107. 110. Continental requested price information from other defendants in order to aid it in making informed pricing and marketing decisions. Price information received by Continental from other defendants was taken into account and utilized by Continental in individually determining the prices to be charged or quoted by it in the same manner, to the same extent, and with the same effect as price information which it usually and ordinarily received from purchasers, provided the price information received from purchasers was considered reliable. 111. When Continental furnished or requested such price information, it furnished such information only in response to a competitor’s request, and was supplied such information only pursuant to its own specific request. 112. In all instances, the determination as to the price to be charged or quoted by Continental was its individual decision. In deciding whether to seek a particular order from a- particular customer, or whether to offer to sell a particular container, and in determining the price to be charged, or quoted, Continental exercised its own business judgment. 113. Continental’s price trends differed from those of each of its competitors, and there is no parallel between them. 114. Continental’s price trends also varied from plant to plant, as shown by comparing the price trends of its plants from the date it entered the corrugated container business to the date of the Complaint. 115. Continental’s prices also varied from month to month throughout the period it was in the corrugated container business. XIII Findings as to Crown Zellerbach 116. Crown Zellerbach, in seeking business from the sale of corrugated containers, was in competition with each of the other defendants, although not necessarily at all times or in all areas or for all purchasers. 117. On those occasions when Crown Zellerbach considered it necessary to ascertain the accuracy of a customer’s report of another defendant’s price, or to ascertain from another defenda