Full opinion text
OAKES, Circuit Judge: This appeal is taken from jury awards exceeding ninety niillion dollars before trebling entered by the United States District Court for the Southern District of New York, William C. Conner, Judge, in an antitrust action brought by Litton Systems, Inc. and some of its subsidiaries (Litton) against the American Telephone and Telegraph Company and some of its subsidiaries (AT & T). The awards were based on special jury findings that AT & T used its telephone monopoly illegally to monopolize the telephone terminal equipment market, thereby excluding Litton as a competitor, and imposing costs on Litton as a customer, of the AT & T system. The jury found that this was accomplished principally through opposing the adoption of certification standards and the imposition of tariffs filed with but not approved by the Federal Communications Commission (FCC). The tariffs required telephone customers to connect equipment purchased from AT & T’s competitors to the telephone system only through the use of a device designed by AT & T. This device — called an “interface device” by Litton and a “protective connecting arrangement” (PCA) by AT & T — was used in lieu of a system of “certification standards.” These standards would have regulated, as they indeed now do regulate, the kind of equipment that can be connected with the AT & T system to ensure interconnection compatibility. Under the AT & T tariff, however, Litton had to pay for the privilege, so to speak, of connecting to the system with a “black-box” of AT & T’s devising. The tariff was eventually rejected by the FCC in favor of certification standards, and Litton’s principal argument before the jury and to the district court was that AT & T’s bad faith opposition to certification standards drove Litton out of the telephone terminal equipment market in the interim period between the filing and the ultimate rejection of the tariff. While our recounting of the facts will disclose many other complexities, pro and con, of Litton’s case, certainly a crucial factor is the FCC’s ultímate finding that the interface device was not needed to protect the AT & T network from harm. Various network users had long purchased equipment from AT & T’s competitors, using it without an interface with “no demonstration of ... harm” to the AT & T network. Proposals for New or Revised Classes of Interstate and Foreign Message Toll Telephone Service (MTS) and Wide Area Telephone Service (WATS), 56 F.C.C.2d 593, 598 (1975). The gist of Litton’s case and the jury’s findings is that the interface device was unnecessary and uneconomical and that AT & T at all times knew this was so, and that despite clear prior indications from the FCC that the tariff would be set aside as unreasonable and destructive of competition, AT & T nevertheless proposed and fought to maintain the tariff — all in bad faith in order to exclude competition in the terminal equipment market. AT & T raises a score of issues on appeal. In addition to disputing the evidence underlying the jury’s verdict, AT & T argues that its opposition to certification standards was privileged under the First Amendment by virtue of the Noerr-Pennington doctrine because it merely advocated a position before a government agency. AT & T also claims that the district court erred in its evidentiary rulings, instructions to the jury, and handling of special interrogatories, and that the jury’s damage award was not supported by substantial evidence and was inconsistent with certain jury findings in AT & T’s favor. The jury verdict for Litton as an AT & T customer is attacked as both unsupported by the evidence and improper under the “filed tariff” doctrine of Keogh v. Chicago & Northwestern Railway Co., 260 U.S. 156, 43 S.Ct. 47, 67 L.Ed. 183 (1922) and the ‘target area’ standing doctrine, see Calder-one Enterprises Corp. v. United Artists Theatre Circuit, Inc., 454 F.2d 1292, 1295 (2d Cir.1971), cert, denied, 406 U.S. 930, 92 S.Ct. 1776, 32 L.Ed.2d 132 (1972). Finally, AT & T argues that Litton’s misconduct during discovery, which resulted in the denial of attorneys’ fees to Litton, warranted outright dismissal of the case. Litton appeals the denial of attorneys’ fees and conditionally cross-appeals on the basis that the district court’s instructions to the jury prevented it from recovering its full measure of damages. Bearing in mind that in reviewing the jury’s verdict the evidence must be viewed in the light most favorable to Litton, we affirm, holding the Noerr-Pennington doctrine inapplicable to Litton’s suit as a competitor. We have considered all the parties’ contentions and have found none requiring reversal. We find that the evidence was sufficient, both in terms of its weight and from the standpoint of causation, to support the damage award and that the district court’s instructions to the jury and evidentiary rulings were free from prejudicial error. We also uphold the verdict for Litton qua customer — no small sum, albeit almost wholly insignificant relative to the principal verdict. Although we are not without doubt, perhaps because the amounts involved are so large, we uphold the district court’s imposition of discovery sanctions under Federal Rule of Civil Procedure 37 and therefore deny Litton’s unconditional cross-appeal. Our disposition of the case renders consideration of Litton’s conditional cross-appeal unnecessary. In affirming, we take due note that this case was a model of judicial technique for handling a serious, complex, and difficult jury trial. Irrespective of what we might say regarding certain of the rulings below that we think were questionable or debatable, if not reversible error, we commend the district court’s handling of the case. I. BACKGROUND A. Early Restrictions on Interconnection Prior to 1956, AT & T had an absolute monopoly over long distance telephone service and local telephone service in areas accounting for over eighty percent of this country’s telephones. Independent telephone companies, familiar to many rural users, interconnected with AT & T’s long distance network and provided local telephone service in those areas not serviced by AT & T. The AT & T “telephone network” comprised local central office switching systerns as well as the wires and cables linking them with the businesses and homes of customers. This monopoly, administered under the aegis of the FCC, was recognized as perfectly lawful and proper. But AT & T had another monopoly — not similarly sanctioned — over the sale and lease of individual telephone sets and business telephone systems. Broadly speaking, a business telephone system can be classified into one of two general categories. The first, a Key System, allows a single telephone set to connect several others through the use of buttons on the telephone. Key Systems are used primarily by small offices. The second category, a PBX System, employs a central console or switching mechanism to allow interconnection of up to several thousand telephones. Key Systems and PBXs — stipulated as the relevant product market in this case — are referred to in the industry as “telephone terminal equipment.” AT & T’s monopoly over such equipment (including residential telephones) was preserved after the expiration of Alexander Graham Bell’s original patents by the simple expedient of prohibiting the attachment of non-AT & T equipment to the AT & T system. AT & T enforced this policy by cutting off service to customers who attached non-AT & T equipment. This practice was approved first by state regulatory agencies and later by the FCC after it assumed regulatory responsibility for telecommunications under the Communications Act of 1934, 47 U.S.C. § 151 et seq. Because telephone terminal equipment sends electrical signals into the network, this policy was at that time considered necessary to ensure the safe and effective operation of the nationwide telephone network. After World War II, however, various users sought to connect devices that AT & T had always considered “foreign attachments” to the telephone network. Efforts to challenge AT & T’s absolute prohibition against interconnection of non-AT & T equipment met with some limited success as early as 1947 when, in Use of Recording Devices, 11 F.C.C. 1033 (1947), the FCC approved the use of machines to record telephone conversations because such use was not “detrimental to the quality of telephone service.” Id. at 1048. At the same time, the Commission ruled that interconnection must be made through “[a]dequate connecting arrangements,” id. at 1048-49, but the responsibility for installing and maintaining connecting arrangements was vested in AT & T. The FCC’s concern for the network’s integrity was manifested in perhaps its most extreme form in Hush-A-Phone Corp., 20 F.C.C. 391 (1955), where it prohibited the use of a mouthpiece shield designed to enhance user privacy because, although the shield did not harm the network, it could cause garbling of conversation. The Commission’s ruling was set aside and remanded by the unanimous decision in Hush-A-Phone Corp. v. United States, 238 F.2d 266, 269 (D.C.Cir.1956), which found the ruling “neither just nor reasonable.” In characterizing the ruling as an “unwarranted interference with the telephone subscriber’s right reasonably to use his telephone in ways which are privately beneficial without being publicly detrimental,” id., the Hush-A-Phone court suggested that actual harm to the telephone network was to be the principle governing the validity of interconnection prohibitions. On remand, the FCC adhered to this principle by ordering AT & T to modify its tariffs to eliminate restrictions against the use of the Hush-A-Phone device and “any other device which does not injure [AT & T’s] employees, facilities, the public in its use of [AT & T’s] services, or impair the operation of the telephone system.” Hush-A-Phone Corp. v. American Telephone & Telegraph Co., 22 F.C.C. 112, 114 (1957). The ruling thus implicitly acknowledged that the AT & T network could be harmed by some forms of interconnection. See notes 2 & 3, supra. At the same time, the Commission’s reference to “any other device” made it clear that the scope of the ruling extended beyond use of the Hush-A-Phone device. Nevertheless, AT & T cast its revised tariff so as to prohibit interconnection of customer-provided telephone systems. To say that a telephone subscriber may produce the result in question by cupping his hand and speaking into it, but may not do so by using a device which leaves his hand free to write or do whatever else he wishes, is neither just nor reasonable. 238 F.2d at 269. At about the same time the Hush-A-Phone controversy was wending its way through the Commission and the courts, a Texas inventor by the name of Thomas F. Carter was inventing a mobile radio device that allowed its users to conduct two-way conversations with persons using ordinary, stationary telephones. The “Carterfone” used inductive and acoustic principles to connect the mobile user with a telephone “base station” that completed the link to the telephone network. Carter began marketing his device in 1959, and within a few years he had sold several thousand units in the United States and throughout the world. The AT & T tariff filed in response to the Hush-A-Phone decision was consistently interpreted as prohibiting the use of the Carterfone. See Use of the Carter-phone Device in Message Toll Telephone Service, 13 F.C.C.2d 430, 438 (1967). Carter challenged the tariff in 1967, and the FCC hearing examiner found that with the exception of a single trivial incident, id. at 436, the Carterfone performed “satisfactorily without causing technical problems detectable by the user.” Id. at 433. Because the Carterfone had no adverse effect on the telephone network, the examiner ruled that its use fell within the rationale of Hush-A-Phone Corp. v. United States, 238 F.2d 266 (D.C.Cir.1956), and that it was “unjust and unreasonable to continue to prohibit use of the Carterphone for the purpose of interconnection after its beneficial and harmless nature has been demonstrated.” 13 F.C. C.2d at 439. The Commission decision following the hearing held that the tariff was “unreasonable and unduly discriminatory.” Use of the Carterfone Device in Message Toll Telephone Service, 13 F.C.C.2d 420, 423 (1968). In contrast to the hearing examiner’s conclusion that “a general prohibition against the use of interconnection devices is [not] unjust or unwise,” Carterphone, 13 F.C.C.2d at 440, the Commission found the fact [t]hat the telephone companies may not have known prior to the proceedings herein that the Carterfone was in fact harmless is irrelevant, since they barred its use without regard to its effect upon the telephone system. Furthermore, the tariff was the carrier’s own. It was not prescribed by the Commission. 13 F.C.C.2d at 425. The Commission further underscored its rejection of a blanket prohibition against interconnection when it noted that “[n]o one entity need provide all interconnection equipment for our telephone system any more than a single source is needed to supply the parts for a space probe.” Id. at 424. It then invited the submission of “new tariffs which will protect the telephone system against harmful devices” and specifically stated that “the carriers ... may specify technical standards if they wish.” Id. at 426. AT & T immediately sought reconsideration of the Commission’s decision. In its order denying reconsideration, the Commission in a very real sense cemented its previous decision as follows: We held that the Carterfone filled a need, that its use did not adversely affect the telephone system, that its use was nevertheless precluded by the tariff, and that the tariff was unlawful, and had been in the past, because it prohibited the use of the Carterfone and other interconnecting devices without regard to actual harm caused to the telephone system. We did not prescribe the terms of a new tariff, but left that to the initiative of the telephone companies, pointing out that they were in no wise precluded from adopting reasonable standards to prevent harmful interconnection. Basic to our holding was a rejection of A.T. & T.’s position that because A.T. & T. cannot control the interconnected private system, interconnection is by definition a degradation of the message toll telephone system without regard to the quality of the interconnecting device or of the interconnected mobile radio system, i.e., without regard to actual harmful effects. We viewed this position2 and the rule embodying it as unreasonable.... The primary contention upon reconsideration is that our decision permits the use of a myriad of customer-provided devices for interconnection without adequate exploration of the technical and economic problems. This record convinces us that there can be inter-connection without harmful technical effects.... Use of the Carterfone Device in Message Toll Telephone Service v. American Telephone & Telegraph Co., 14 F.C.C.2d 571, 572 (1968). We found no substantial factors outweighing the necessity of eliminating the arbitrary tariff. Standards to prevent the introduction of harmful inputs can be devised, and enforcing them would be no more difficult than enforcing the present absolute prohibition. Furthermore, notification to the carrier of the installation of a connecting device, which would be a reasonable requirement, would greatly relieve any problems of discovering the source of any harmful interconnection. The record also showed that terminal devices may be used under a standard making actual harm a factor, and the distinction between terminal devices and interconnection appears to be solely one of function unrelated to inherent propensity for injurious effects. Id. at n. 2 (citations omitted). Significantly, the Commission also noted the broad sweep of its decision: We also reject the related claim that the decision goes beyond the issues. To say, as some of the parties do, that the hearing related solely to the Carterfone and not to the validity of the tariff’s broad prohibition would make the hearing essentially meaningless. The issues plainly included consideration of the basic validity of the tariff if it was the total prohibitory effect of the tariff which rendered its application to the Carterfone unreasonable. As we pointed out in our June decision, such a fault in a tariff can only be remedied by its revision. It should be noted in this connection that it was well understood that this was an “interconnection” case, and A.T. & T. and General both argued on a broad base the need for a general prohibition against all interconnection not arranged by them. Id. at 573. (footnotes and citations omitted) We quote from the Memorandum Opinion and Order denying the petition for reconsideration at length for two reasons. First, a redacted version was submitted to the jury, a matter disputed by AT & T and considered by us, infra. ' Second, we believe that the clarity of the Commission’s language was such that from AT & T’s perspective it had to be clear as a bell, so to speak, that at least as of the 1968 Carterfone decision, if not before, it was unreasonable, unjust, and discriminatory to prohibit interconnection of terminal equipment without respect to any harm such devices might cause. The ruling by its very terms “require[d] tariffs reasonably addressed to the asserted problems.” 14 F.C.C.2d at 573. It was therefore incumbent upon AT & T to devise tariffs that would permit attachment of non-harmful devices. B. The Interface Tariffs We suspect that the parties would disagree little with what we have said about the state of affairs up until the time of the Carterfone decision; at least they would agree on the facts, if not our interpretation of them. But what happened after Carterfone is hotly debated. Two quite different cases were presented to the jury and argued to us. The telephone company’s scenario runs somewhat as follows. 1. The AT & T Version The Carterfone decision was to become effective on November 1, 1968, whereupon — intolerably to AT & T — there would be no tariff provisions at all to limit equipment interconnection or specify interconnection standards. AT & T thus faced the prospect of proposing interconnection standards on very short notice with no FCC guidance and novel problems of “real” risks. See note 2 supra. In 1967, AT & T had formed a Tariff Review Group — perhaps in anticipation of the Carterfone ruling — to review possible tariff modifications. Although the Review Group thought performance or certification standards were feasible, this approach was viewed as posing weighty problems of a non-technical nature. Specifically, we are told, the Review Group feared that promulgation and enforcement of such standards by AT & T itself would raise serious antitrust questions. At the same time, the Review Group thought that improperly installed or maintained “good” equipment threatened the system’s integrity as much as “bad” equipment, and therefore concluded that a substantial degree of protection could be effected by requiring interface hardware — the “protective connecting arrangement” or PCA. AT & T ultimately followed the Review Group’s recommendation and adopted the PCA rather than the certification standards approach. Thus, in late October of 1968, AT & T filed a tariff requiring the use of a PCA to interconnect terminal equipment. AT & T was to provide, install, and maintain the PCA at the customer’s expense as fixed by the filed tariff. The filing of the tariff sparked a spirited response, with twenty-nine parties filing responsive pleadings and comments. Opponents of the tariff argued that the PCA approach was a flawed response to Carterfone because it failed to specify interconnection standards, barred the use of customer-provided telephones for network control signalling, and discriminated generally in AT & T’s favor. In late December of 1968, the Commission permitted the proposed tariffs to take effect, stating in American Telephone & Telegraph Co. “Foreign Attachment” Tariff Revisions, 15 P.C. C.2d 605, 609-10 (1968), that the decision in “Carterfone does not hold that a customer may substitute his own equipment or facilities (whether it be telephone instruments, loops, poles, or central office equipments) for that furnished by the telephone company.” Although the Commission allowed what we will call the “interface tariffs” to take effect, it explicitly stated that its action was not to be construed as “giving any specific approval to the revised tariffs,” id. at 610, leaving entirely open the possibility of further action. In the interim, the Commission directed all segments of the telecommunications industry to engage in “informal engineering and technical conferences,” to ascertain what “further changes are necessary, desirable, and technically feasible” in AT & T’s tariff offerings. Id. at 610. AT & T tells us that terminal equipment interconnection was the subject of much thought and engineering and economic consideration after the Commission decided to allow the interface tariffs to take effect. Throughout this period, however, AT & T concedes that it had no “statistically meaningful” data regarding actual harm to the network due to interconnection. AT & T Brief at 17-18 & n. 21. But, AT & T points out, a National Academy of Sciences (NAS) report commissioned by the FCC ultimately found — the report took some ten months to prepare — that network harm could be caused by a variety of factors. The report concluded that, on balance, the PCA requirement was appropriate because, although a properly enforced certification system could also protect the network from harm, the responsibility for creating and administering such a system should be shouldered by a regulatory agency rather than a private concern. In apparent response to the NAS report, the FCC formed a PBX Advisory Committee in May of 1971. The committee, composed of representatives of various interested parties including, of course, AT & T, studied the feasibility of interconnection without the PCA requirement. AT & T continued to maintain that unlimited interconnection could harm the network. In June of 1972, while the PBX Advisory Committee was preparing its final report, the FCC instituted rulemaking proceedings addressing the interconnection issues. The FCC took the “extraordinary” step of convening a Federal-State Joint Board (Joint Board) pursuant to 47 U.S.C. § 410(c) (1976), to determine “whether, and to what extent, there is public need ... to go beyond what we ordered in Carterfone and permit customers to provide, in whole or in part” network control signalling units and connecting arrangements. Proposals for New or Revised Classes of Interstate and Foreign Message Toll Telephone Service (MTS) and Wide Area Telephone Service (WATS), 35 F.C.C.2d 539, 542 (1972). AT & T points to these developments to buttress its claim that the need for and propriety of the PCA requirement was very much an open question, emphasizing the fact that it took the FCC almost four years after Carterfone to address the interconnection issue. is more than 25 percent higher than lines connected solely to telephone company-provided terminals. As we have previously reported to this Commission with respect to interstate voice grade private line data services, where the same minimum protection criteria apply as on the public switched telecommunications network, a sizable percentage (8.5 percent) of the customers utilizing their own data transmitting equipment were applying signal power in excess of the established network protective criteria, thereby degrading the service of other customers. The same survey showed, in the case of a particular type of connection or interface which is comparable to that encountered on public switched network services, that 18 percent of the customer-provided terminals violated the minimum network protection criteria by a substantial degree. The comments did state, however, that: Complete and exhaustive statistics demonstrating all the harms from uncontrolled interconnection or the total impact on the quality of service might not be obtainable, given the nature of the problem studied. Certain effects simply are not measurable. How many wrong numbers or how much crosstalk occurs from the use of customer-provided terminals can only be observed at the time of or during their occurrence. The difficulties in making such measurements are apparent. However, the data cited above are sufficiently consequential to suggest that interconnection has an adverse impact on the quality of The PBX Committee submitted its final report shortly after the Joint Board convened in 1972. The report included a model certification program based on a “barrier PBX system” that would incorporate protective circuitry obviating the need for a PCA. But by this time, after “lengthy internal debate,” AT & T Brief at 21, AT & T decided to oppose certification standards as an unnecessary substitute for the PCA requirement. Mr. John deButts, then AT & T Chairman, announced this position in a speech before the National Association of Regulatory Utility Commissioners (NA-RUC) in late September of 1973. DeButts stated in his speech that the nationwide switching network was “too valuable a resource to risk a perhaps irreversible threat to its performance that would ensue from fragmentation of responsibility for that performance.” Shortly thereafter, AT & T formally opposed the certification standard approach by filing comments in the FCC rulemaking proceedings. That this opposition to certification standards was undertaken in bad faith was a principal special finding of the jury on which the verdict against AT & T turned. service. Certainly, for the reasons set forth in these comments, further loosening of interconnection policies, such as customer options embodied in the certification proposal before the Commission in this proceeding, is not in the public interest and should not be adopted. (Footnote omitted). AT & T’s decision to stand behind the PCA requirement greatly upped the odds against adoption of a certification standards system. AT & T seems to agree with Litton that the deButts speech was a coda marking Litton’s demise as a competitor, but denies that it opposed certification standards in bad faith and argues that Litton’s failure in the terminal equipment market was inevitable by late 1973, if not earlier. According to AT & T, Litton’s efforts to establish itself in this market were short-lived, poorly executed, and plagued with internal difficulties ranging from inadequate staffing to high-level corporate bribery. Litton entered the market in 1971, selling equipment made by other companies, with the hope that it could quickly develop its own products to feed the distribution and service network it created immediately after Carterfone. But by 1973, AT & T claims, Litton had failed to develop the caliber of product needed to compete with AT & T’s evolving line of terminal equipment. This fact, coupled with the revelation that certain Litton officials had bribed their way into contracts with terminal equipment users, prompted Litton to exit the market in early 1974. AT & T’s rendering of Litton’s short, unhappy run in the terminal equipment race suggests that Litton lost because it sprinted early and winded quickly, and -not because AT & T squeezed Litton into the rail with the PCA requirement. for network performance would perforce be destroyed. After returning its initial verdict, at which time the jury could not agree on whether the interface device tariff had been filed in bad faith and whether there had been “bad faith delay in making cutovers,” the jury further deliberated at the court’s request and found for Litton on these issues as well: hence our use of the term “a principal special finding.” In any event, Litton decided to withdraw from the terminal equipment market in early 1974. It was not until November of 1975, AT & T points out, that the FC.C adopted regulations establishing certification standards. Proposals for New or Revised Classes of Interstate and Foreign Message Toll Telephone Service (MTS) and Wide Area Telephone Service (WATS), 56 F.C. C.2d 593, 599-613 (1975) (First Report & Order). Although the FCC declined to include PBX and Key Systems in the certification program at that time, it expressed doubt regarding the Joint Board’s recommendation that this equipment presented technical problems warranting general exclusion. AT&T perforce concedes that this ruling included statutory findings that the interface tariffs were “unnecessarily restrictive” and amounted to “unjust and unreasonable discrimination.” Id. at 598. A few months later, the FCC amended its regulations to cover PBX and Key Systems that employed protective circuitry, Interstate and Foreign Message Toil Telephone Service, 58 F.C.C.2d 736 (1976) (Second Report & Order). The FCC’s order was affirmed on appeal. North Carolina Utilities Commission v. FCC, 552 F.2d 1036 (4th Cir.), cert, denied, 434 U.S. 874, 98 S.Ct. 222, 54 L.Ed.2d 154 (1977). Thus, as of October 1977, after certiorari was denied by the Supreme Court, interconnection of non-AT & T equipment employing protective circuitry became a possibility. Finally, in April of 1978, the FCC issued a third order eliminating the protective circuitry requirement for properly registered and installed PBX and Key Systems. Interstate and Foreign Message Toll Telephone Service, 67 F.C. C.2d 1255 (1978) (Third Report & Order). To summarize, the AT & T scenario sketches a hard-fought battle before the FCC with good faith efforts being made to protect the network. AT & T points out that it was not alone in opposing certification standards; several other interested parties — e.g., NARUC, the Joint Board, and several state utility commissions — supported the PCA approach. AT & T relies on this support, and on the fact that it took over four years from the time Litton exited the terminal equipment market for the FCC to establish certification standards, to back up its claim that it was not AT & T’s “bad faith” opposition to certification standards that drove Litton from business. As might be expected, Litton’s scenario plays out quite differently. 2. The Litton Case In Litton’s scenario, AT & T is cast as a Dorian Gray. To paraphrase Commissioner Johnson’s dissent from the order staying the effect of Carterfone pending AT & T response, to Litton, the PCA requirement was much as if an'electric utility prohibited customers from using a toaster unless it was designed, manufactured, and installed by the utility itself. Litton’s case against AT & T relies heavily on the fact that AT & T has never been able to make a case for the PCA requirement. Litton reminds us that AT & T has not demonstrated — before the FCC or at the trial of this case — a single instance in which the network had been harmed by a competitor’s terminal equipment, Litton Brief at 8. Nevertheless, AT & T imposed the PCA requirement on all equipment sold by its competitors. Strikingly, in one case involving two Atlanta hotels using the very same brand of PBX equipment, no interface was required for the equipment that AT & T purchased from a third-party manufacturer and leased to one hotel, while an interface was required when the other hotel purchased its equipment directly from the third-party manufacturer. Litton suggests, as did the Fourth Circuit in North Carolina Utilities Commission, that the PCA requirement was a naked attempt to maintain “private lawmaking authority over independent manufacturers.” 552 F.2d at 1051 (emphasis omitted). The PCA requirement stood for almost ten years, giving AT & T a chance to interfere with the normal course of every sale of terminal equipment by Litton and all of AT & T’s other competitors. Litton’s argument that AT & T opposed the development of certification standards in bad faith is based on evidence that Litton believes clearly demonstrates, first, that AT & T was aware that it could not substantiate its claims of harm to the network; second, that AT & T knew that without the PCA requirement it was vulnerable to competition; and, finally, that AT & T could have developed certification standards itself immediately after Carterfone but opted not to in order to buy the time necessary to meet competition in the terminal equipment market. Litton put into evidence a number of AT & T documents to support the contention that AT & T simply could not demonstrate that the PCA requirement was necessary to protect the network from harm. Specifically, Litton points to an in-house report apparently prepared in 1971 by one of two AT & T representatives to the PBX Advisory Committee which stated: A Credibility Gap Exists [Ljimited interconnection on the message network and greater interconnection on private line facilities has been in existence for a long period of time and the carriers still find it virtually impossible to cite cases of harm ... resulting] from ... interconnectpon] .... This inability to demonstrate cases of harm ... is causing the manufacturers ... users and regulatory bodies to ... challenge the expansive efforts which [AT & T] insists must be taken to avoid the network pollution. Litton Brief at 29-30 (emphasis omitted). To like effect is a 1972 report submitted to AT & T management by the Director of AT & T’s Management Sciences Division stating that AT & T was in its “weakest position now, because even though everyone concedes that serious breaches of our tariffs by illegal or unauthorized equipment has grown over the years, we have not been able to produce evidence of harm to anyone.” Id. at 30. The report recommended that the interface requirement be rescinded. Litton points out that AT & T’s sole evidence of potential harm to the system was derived from the Hunt Studies referred to in note 8 supra and which were cited by AT & T to the FCC as support for the interface requirement. Various AT & T officials conceded that the studies did not “prove anything.” Nevertheless, we know that deButts maintained in his 1973 speech and in the formal filings later submitted to the FCC that there were data supporting AT & T’s position on network harm from interconnection. Litton argues that a portion of the PCA device championed by AT & T was really no more than the dial or pushbutton mechanism of a telephone — the network control signalling unit — that only duplicated the function of the same mechanism in AT & T’s competitors’ equipment. Moreover, AT & T knew at the outset that the PCA requirement was useless; a Task Force of the Tariff Review Group charged by AT & T management with developing “the strongest possible case to resist customer ownership of telephone equipment” had concluded in early 1968 that a PCA requirement would only “shift[ ] ... [existing] restrictions on customer-owned devices to similar restrictions through the provision of an arbitrary and redundant Telephone Company device that duplicates the customer’s equipment.” Litton highlights the fact that the internal AT & T Task Force characterized the PCA requirement as “a redundant, artificial and economic barrier to those wishing to purchase their own equipment.” Thus, according to Litton, AT & T’s own documents reveal its awareness as stated in a presentation by an AT & T executive at a Traffic Service Advisors’ meeting in 1972 that “[o]nly the ‘black box’ ... stands as the last hardware barrier between us and the final challenge of unbridled, unlimited, no-holds-barred competition.” In Litton’s account, AT & T’s support for the PCA requirement was based more on a concern for its share of the terminal equipment market than it was on concern for the safety of the telephone network. Thus, AT & T kept the interface device not only to exclude competition but also to palliate its own competitive inadequacies because, despite the vaunted reputation of Bell Laboratories, AT & T had done little in the years prior to Carterfone to update its terminal equipment. Accordingly, notwithstanding the opinion expressed by several members of the AT & T Tariff Review Group that the PCA requirement was not responsive to Carterfone, AT & T imposed the requirement in order to give it time to develop competitive terminal equipment. At trial, Litton put in evidence another AT & T document, the McKinsey Report, indicating that AT & T had product development and marketing problems that prevented it from meeting competition in the post-Carterfone era. Litton also claims that when AT & T finally did update its terminal equipment line, it did so with “Chinese copies” of successful Japanese products. Finally, Litton maintains that AT & T could have adopted certification standards no more than a year after Carterfone. In support of this claim Litton again points to internal AT & T documents and memoranda suggesting that AT & T management believed the development of certification standards was inevitable by 1972, or 1978 at the latest. Litton Brief at 31-32. Litton suggests that AT & T’s participation in the PBX Advisory Committee was a ruse or delaying tactic, and that the decision to oppose certification was concealed from the FCC while AT & T appeared to cooperate with the Advisory Committee so as to avoid the appearance of bad faith. If there is an individual villain in Litton’s piece it is Mr. John deButts. DeButts took over as Chairman and CEO of AT & T about four years after Carterfone and stressed the fact to his management that AT & T would have only one policy with respect to certification standards: opposition. In the face of recommendations from subordinates that a certification standards approach was preferable to the PCA requirement, deButts nevertheless opposed the standards. Moreover, Litton argues that the AT & T position on certification, as dictated by deButts, was taken with full knowledge that the FCC would ultimately reject this position. Litton claims that AT & T understood that its opposition to certification exposed it to antitrust liability, citing an AT & T film simulating an antitrust trial of a suit similar to the one eventually filed by Litton and urging employees to destroy incriminating company documents. DeButts apparently remarked to AT & T lawyers shortly after his speech that he had created more opportunities for lawyers than anything “since Sherman wrote his famous law.” We thus arrive again at what both parties agree was a pivotal point for Litton in the interface tariff chronology: the deButts speech of 1973. In contrast to AT & T’s claim that the PCA requirement amounted to only a little protection for the system that also served to avoid the antitrust difficulties that might flow from an AT & T enforced certification program, Litton argues that AT & T’s opposition to certification — its insistence upon the PCA requirement — posed psychological and economic market barriers that drove Litton from the terminal equipment market. On the psychological side, Litton claims that the very imposition of the PCA requirement, without regard to its cost or inconvenience, caused customers to doubt the quality of Litton’s product. Litton analogizes its burden under the interface tariffs to that which would face a foreign car manufacturer if its ability to sell in the American market were conditioned upon including a giant fire extinguisher in the car’s trunk. Litton also presented evidence tending to show that AT & T engaged in slash and burn tactics calculated to make cutover from AT & T to Litton equipment as bothersome as possible for Litton and its customers alike. AT & T installers from time to time would chop off existing AT & T wiring flush with office walls in preparation for the installation of Litton equipment. AT & T made the PCA requirement onerous for customers in other ways as well: refusing to acknowledge receipt of letters arranging cutover dates, changing cutover dates, or failing to provide the necessary PCA equipment. Finally, Litton argues that AT & T’s PCA devices themselves occasionally malfunctioned, thus adding actual injury to technological insult. The PCA requirement also effected a direct economic barrier to Litton’s market entry insofar as it increased the cost of installing and using Litton equipment. Although this case did not involve single line telephone sets, i.e., residential telephones, Litton is quick to point out that the PCA requirement precluded all of AT & T’s competitors from entering this market because the PCA cost alone exceeded the cost of renting a telephone from AT & T. Litton argues that these costs also effectively foreclosed sales of Key Systems involving five lines or less, estimated to be over 90% of the Key System market. In the market for larger Key Systems and PBX Systems, the PCA requirement was, in effect, a surcharge imposed by AT & T on customers using non-AT & T equipment sold by Litton and other competitors. When it became clear in late 1973 that AT & T would fight for the PCA requirement, Litton believed its only recourse was to cut its losses and leave the terminal equipment market because by that time AT & T had copied the successful products Litton was offering, narrowing whatever competitive advantage Litton would have had even in the absence of the PCA surcharge. Thus, in Litton’s scenario, AT & T’s support for the PCA requirement — its opposition to certification standards — was no more than a rear guard effort to delay the effect of Carterfone, undertaken in bad faith in order to handicap competitors. The deButts speech slammed shut what was, from Litton’s perspective, the “window of opportunity” created by Carterfone. Litton had intended to take advantage of this opportunity by following the same three-step market development program it had used successfully in other product markets. First it engaged in the sale of reliable products manufactured by other concerns — this to allow Litton the opportunity to establish an immediate market presence while it readied its own products. Litton compares its 1980 gross sales of close to five billion dollars with its start in 1953 as a small electronics company and emphasizes its highly successful progress and depth of skill in the telecommunications industry. In fact, Litton had extensive engineering and installation expertise in terminal equipment — highly sophisticated terminal equipment for special customers like airports and the Department of Defense. Litton’s statistics indicate that, if anything, its performance exceeded its own expectations. Within a year and a half of its decision to enter the terminal equipment market, it was making close to one quarter of all interconnect sales. To counter AT & T’s claim that Litton had no marketable products of its own in the early 1970’s, Litton argues that AT & T itself was responsible for this: it refused to interconnect the innovative Litton “plexcom” switch, which was “years ahead” of anything AT & T had to offer. By this time, according to Litton, AT & T’s anticompetitive efforts had taken their toll in increased prices and decreased sales. When the deButts speech made it clear that AT & T would continue to resist the implementation of Carterfone, Litton claims that, like many other manufacturers during that period, it simply could not remain in the market. Ultimately, the jury agreed in the main with Litton, finding that AT & T opposed certification standards in bad faith and that other AT & T conduct involving the supply of PCAs and the sale of inside wiring was unreasonable and injurious to Litton as a competitor. The jury also, after rendering the main verdict with respect to liability and damages, found that AT & T filed the interface tariffs in the first instance in bad faith. Despite arguments made here that the damage award was based on a study relying on unsupported assumptions that made it impossible for the jury to estimate the damages attributable only to conduct found illegal, liability was found in a specific amount, namely, in the case of Litton qua competitor, $91,990,000, and in the case of Litton qua customer, $268,243. The sum of these figures, $92,258,243, was trebled as provided by 15 U.S.C. § 15. II. DISCUSSION A. Introduction •As the factual summary above suggests, there is little in this case that the parties agree upon. AT & T contends that a portion of the jury’s verdict and two of its factual findings must be set aside because they were made “belatedly” and as a result of coercion. Second, AT & T argues that under the Noerr-Pennington doctrine the jury was precluded from finding that certain practices relied on to support both the initial and the “belated” verdict were anti-competitive or predatory. Third, AT & T maintains that there was insufficient evidence to support any of the jury’s factual findings and the entire verdict must therefore be set aside. Fourth, again in an evidentiary vein, AT & T claims that various rulings by the trial court judge on the admissibility of evidence so prejudiced its defense that it is entitled to a new trial. AT & T’s fifth argument flanks the merits, so to speak, and attacks the jury’s damage awards. Finally, AT & T argues that the entire case should have been dismissed as a sanction for Litton’s discovery misconduct. Litton argues that this misconduct was an excusable oversight and that the district court’s sanction — denial of any attorneys’ fees — was impermissibly severe. B. The “Belated” Jury Findings After eight days of deliberation, the jury found AT & T guilty of monopolization and an attempt to monopolize the relevant product market. In response to special interrogatories the jury specifically found three AT & T practices — opposition to certification, delay in providing interface devices, and conduct in connection with the sale of inside wiring — anticompetitive and predatory. Because the jury found that AT & T’s monopolization was the proximate cause of Litton’s injury, it entered an award for Litton as both a competitor and customer of AT & T. The jury initially failed, however, to reach unanimity on three matters: (1) whether the attempted monopolization proximately caused Litton’s injury, and whether either (2) the original filing of the interface tariff or (3) delay in effecting cutover from AT & T to Litton equipment was anticompetitive or predatory. The trial judge asked the jury to attempt to reach a unanimous result one way or the other on the remaining issues and the jury indicated its willingness to do so. After deliberating a short while, the jury returned with affirmative answers favorable to Litton on all three questions. AT & T makes an extensive argument that these “belated” findings were coerced and therefore should be set aside. Although the verdict on the monopoly charge can be sustained, and the damage award affirmed, if there is support for each of the initial three findings made pursuant to Federal Rule of Civil Procedure 49, see Northeastern Telephone Co. v. AT & T, 651 F.2d 76, 94-95 (2d Cir.1981), cert, denied, 455 U.S. 943, 102 S.Ct. 1438, 71 L.Ed.2d 654 (1982), disposition of the threshold claim that these later findings must be set aside will enable us to consolidate our discussion of the more difficult Noerr-Pennington issues AT & T raises. It was, of course, completely appropriate to submit special interrogatories to the jury, particularly in a case as complex and protracted as this one. In asking the jury to specify whether it found each of the alleged predatory practices to have been proved, the trial court was merely following Berkey Photo, Inc. v. Eastman Kodak Co., 603 F.2d 263, 299 (2d Cir.1979), cert, denied, 444 U.S. 1093,100 S.Ct. 1061, 62 L.Ed.2d 783 (1980). For whatever reason, the jury did not agree unanimously on two interrogatories and the proximate cause component of the attempted monopolization charge. There was nothing unusual, much less erroneous, in the trial court’s resubmission of these questions. See, e.g., Turchio v. D/S A/S DEN NOBSKE AFRICA, 509 F.2d 101, 105 (2d Cir.1974) (if the jury fails to answer interrogatory it is appropriate to resubmit the interrogatory “a second and third time to obtain answers to the unanswered questions”). AT & T’s contention that the jury was somehow “coerced” into rendering answers favorable to Litton upon resubmission cannot be squared with the facts. The jury did not indicate that it was deadlocked on these questions; it indicated that it was divided. That the jury took its task seriously and deliberated conscientiously is manifest; before rendering its initial verdict the jury requested guidance from the court as to whether it could continue if it was divided on a question. AT & T can hardly argue that the jury was predisposed to find in Litton’s favor given the fact that it found against Litton on two out of four theories of liability and divided on a third. AT & T’s argument that the jury had no incentive to find against Litton on the unresolved proximate cause question because the initial verdict would stand in any event is pure speculation. Even if we were to concede AT&T’s premise that the jury was likely to shirk its duty conscientiously to reconsider these questions — a premise we find highly questionable given that the jury served over five months without a single absence and deliberated for eight days — the conelusion that it was likely to resolve these questions in Litton’s favor simply does not follow. Nor do we find anything coercive in the trial judge’s instructions. The jurors were informed that their answers to the questions were “important” and that they should listen to the views of their fellow jurors without abandoning their own conscientiously held views. Far from being coercive, this instruction was completely in keeping with the recognition that: A system which requires the unanimous verdict of a jury ... can function satisfactorily in most cases only because most jurors are reasonable ... and after a certain amount of discussion has produced a large majority in favor of one view, those in the minority may be willing to join the majority in the belief that if so many other reasonable people have a contrary view, the views of the minority may well be mistaken. Instructions ... in both state and federal courts stress the importance of jurors listening to the views of one another and making allowance for the fact that there can be a reasonable difference of opinion. Grace Lines, Inc. v. Motley, 439 F.2d 1028, 1033 (2d Cir.1971) (Lumbard, C.J., concurring). The instructions here fall far short of those sustained in e.g., United States v. Corcione, 592 F.2d 111, 117 n. 5 (2d Cir.), cert. denied, 440 U.S. 975, 99 S.Ct. 1545, 59 L.Ed.2d 974 (1979) (after jury deadlocked on criminal charge, trial judge instructed jury that it should “consult with one another and ... deliberate with a view to reaching agreement if you can possibly do so”); United States v. Robinson, 560 F.2d 507, 511 n. 6 (2d Cir.1977), cert. denied, 435 U.S. 905, 98 S.Ct. 1451, 55 L.Ed.2d 496 (1978) (jury instructed that “[i]t is important that a decision ... be reached here, and I really see no good reasons why a decision cannot be reached”). Litton was entitled to a jury determination on all of its claims and we do not believe the trial court judge erred either in resubmitting the claims or in instructing the jury as he did. There is no factual or logical basis for AT & T’s arguments that resubmission of these questions tipped the balance in Litton’s favor. have ever had.... You have been a vindication of the jury system and all that it means. C. AT & T’s Noerr-Pennington Claims According to AT & T, the “fundamental error that pervaded the trial of this case was the failure of the trial court to recognize that the principal ... conduct upon which the judgment is based ... was protected” under the doctrine developed in Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961) and United Mine Workers v. Pennington, 381 U.S. 657, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965). AT & T Brief at 43. AT & T argues that both its opposition to certification standards and its original filing of the interface tariffs should not have been submitted to the jury because this conduct did not, as a matter of law under the evidence adduced by Litton, fall within the only exception — the so-called “sham” exception — to Noerr-Pennington. Noerr, it will be recalled, involved a deceptive political campaign waged as part of the bitter economic feud between the railroad and trucking industries for control of the interstate, heavy freight hauling market. Trucking industry representatives sued a railroad trade association, alleging that a publicity campaign advocating legislation favorable to the railroads violated the Sherman Act because the campaign’s sole purpose was to hamper the trucking industry’s ability to compete with the railroads. The Court held that “the Sherman Act . .. does not apply to ... activities compris[ing] mere solicitation of governmental action with respect to the passage and enforcement of laws,” 365 U.S. at 138, 81 S.Ct. at 530, irrespective of whether the activities might be considered fraudulent or deceptive. The Noerr holding was, strictly speaking, a matter of statutory construction, but First Amendment concerns clearly informed the decision. The Court feared that an expansive construction of the Sherman Act would impinge upon the right to petition and impair the government’s ability “to take actions through its legislature and executive that operate to restrain trade.” 365 U.S. at 137, 81 S.Ct. at 529. These factors, as well as the “essential dissimilarity” between joint efforts to seek legislation and “agreements traditionally condemned” under the Act, id. at 136, 81 S.Ct. at 529, led the Court to conclude that Congress could not have intended the Act to reach such behavior. In reaching this result, the Court found the question of intent irrelevant, stating that “insofar as the railroads’ campaign was directed toward obtaining governmental action, its legality was not at all affected by any anticompetitive purpose it may have had.” 365 U.S. at 139-40, 81 S.Ct. at 530. In dictum, however, the Court indicated that “[tjhere may be situations in which a publicity campaign, ostensibly directed toward influencing governmental action, is a mere sham to cover what is actually nothing more than an attempt to interfere directly with the business relationships of a competitor and the application of the Sherman Act would be justified.” Id. at 144, 81 S.Ct. at 533. The Pennington decision restated, and to some extent arguably amplified, Noerr. In Pennington an industry union and large firms urged the Secretary of Labor to establish minimum wage levels that would have the effect of squeezing out smaller firms. The Court held that “Noerr shields from the Sherman Act a concerted effort to influence public officials regardless of intent or purpose.... Joint efforts to influence public officials do not violate the antitrust laws even though intended to eliminate competition.” 381 U.S. at 670, 85 S.Ct. at 1593. Pennington made it clear that efforts directed at executive officials or agencies — as distinguished from the legislative and publicity efforts involved in Noerr —were protected. Pennington also emphatically reaffirmed Noerr’s holding that anticompetitive intent did not make an otherwise legitimate attempt to secure governmental action or express a political position illegal; the Court stated that “[s]uch conduct is not illegal, either standing alone or as part of a broader scheme itself violative of the Sherman Act.” Id. The last case generally cited in any exegesis of the Noerr-Pennington doctrine is California Motor Transport Co. v. Trucking Unlimited, 404 U.S. 508, 92 S.Ct. 609, 30 L.Ed.2d 642 (1972). This case involved a group of trucking companies that opposed “ ‘with or without probable cause, and regardless of the merits of the cases,’ ” each and every license application made by the group’s competitors to a state regulatory agency. Id. at 512, 92 S.Ct. at 612. California Motor Transport both expanded and limited the Noerr-Pennington doctrine. Although the Court ultimately held against the defendants, it broadened and strengthened the base of the doctrine by holding, first, that it applied to administrative and adjudicative proceedings and, second, that it was constitutionally based. At the same time, the Court imposed limits upon the doctrine by holding that the plaintiff’s allegations triggered the application of the Noerr sham dictum. AT & T points primarily to the Noerr and Pennington decisions and argues that even if its conduct was undertaken for anticompetitive reasons, it was nevertheless protected. To this Litton replies that NoerrPennington is inapplicable because AT & T injured Litton not by requesting or as a result of governmental action, but by virtue of what AT & T itself did in filing and maintaining the interface tai’iffs while opposing the only feasible alternative — certification standards — in bad faith. In the alternative, Litton maintains that this case presents a “paradigm of the ‘sham’ exception to the Noerr doctrine.” Thus, there are two strings to the Litton bow: inapplicability of the Noerr-Pennington doctrine because the injury flowed from actions not within the scope of the doctrine, and applicability of the “sham” exception. Judge Meskill and I agree with Litton on both counts for reasons we set forth below; Judge Kearse concurs only on the second ground and does not join in the immediately following portion of the opinion. 1. Applicability of the Noerr-Pennington Doctrine AT & T characterizes its filing of the interface tariffs after Carterfone as an “application” to the FCC, and contends that “Noerr-Pennington ... does not permit antitrust liability to be based on such applications to a regulatory agency.’-’ AT & T Brief at 82. In essence, AT & T’s argument is that its conduct in devising and filing the tariffs is immunized because the tariffs were contested and AT & T defended them before the FCC. If this argument were accepted, a common regulatory practice designed to protect consumers would instead shield from antitrust liability the very entities the practice seeks to restrain and regulate. In an earlier case involving this same defendant we concluded that pervasive regulation of the telecommunications industry does not, without more, confer antitrust immunity. See, Northeastern Telephone Co., 651 F.2d at 83; see also International Telephone & Telegraph Corp. v. General Telephone & Electronics Corp., 518 F.2d 913, 935-36 (9th Cir.1975); cf., United States v. American Telephone & Telegraph Co., 524 F.Supp. 1336, 1357-60 (D.D.C.1981) (declining to decide whether compliance with regulatory mandates insulates a defendant from antitrust liability.) If extensive substantive regulation does not' warrant an antitrust exemption, then surely an essentially procedural aspect of regulation — tariff filing — cannot. Apart from the obvious difficulty of reconciling the effect of AT & T’s Noerr-Pennington argument with the Supreme Court’s repeated admonition that antitrust exemptions are to be countenanced only where “there is a ‘plain repugnancy between the antitrust and regulatory provisions,’ ” Gordon v. New York Stock Exchange, Inc., 422 U.S. 659, 682, 95 S.Ct. 2598, 2611, 45 L.Ed.2d 463 (1975), quoting United States v. Philadelphia National Bank, 374 U.S. 321, 350, 83 S.Ct. 1715, 1734, 10 L.Ed.2d 915 (1963); see also Silver v. New York Stock Exchange, 373 U.S. 341, 357, 83 S.Ct. 1246, 1257, 10 L.Ed.2d 389 (1963), we believe that AT & T’s position must be rejected for a more fundamental reason. AT & T erroneously as