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Belmont Industries Inc. v. Bethlehem Steel Corp.

decided: March 7, 1975.

BELMONT INDUSTRIES, INC., APPELLANT,
v.
BETHLEHEM STEEL CORPORATION



ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA C.A. No. 70-3488.

Adams, Rosenn and Weis, Circuit Judges.

Author: Per Curiam

Opinion OF THE COURT

This appeal, after a jury verdict for defendant Bethlehem Steel Corporation in an anti-trust case, raises two principal issues with respect to the conduct of the trial. First, plaintiff, Belmont Industries, claims that the trial judge erred in refusing, upon a motion made after the close of evidence, to strike cross-examination testimony which, although violating both the hearsay and best evidence rules, had been received without objection. The second error, asserts Belmont, is the district court's foreclosure of evidence concerning Bethlehem's alleged termination, after the filing of the complaint, of the credit previously extended to Belmont.

Since the district court did not err with respect to either ruling, its judgment will be affirmed.

Facts

Bethlehem is a vertically integrated steel producer. Two phases of its operations are relevant to this case: 1) the production of structural steel in the form of shapes and plates, and 2) the fabrication and erection of that structural steel.*fn1 Because the cost of transporting steel from the mill where it is manufactured to the building site is a significant factor in the fabricator's total cost, fabricators generally purchase the major portion of their structural steel, particularly in the larger sizes, from the nearest available manufacturing plant. Bethlehem's mill at Bethlehem, Pennsylvania is the closest one to the Philadelphia market. Consequently, Belmont contends, Bethlehem Steel had a natural, and concededly lawful, monopoly of the market for the manufacturing of structural steel for sale in the Philadelphia area.

In contrast to Bethlehem's vertically integrated operations, Belmont functioned, until 1971, as an independent steel fabricator, operating primarily in the Philadelphia area. Since Belmont did not operate steel manufacturing facilities, it was dependent on steel producers like Bethlehem for its supply of structural steel. Thus, Belmont was in the dual position of purchasing much of its required structural steel from Bethlehem's manufacturing division, while at the same time competing with another division of Bethlehem in the fabrication and erection market.

Belmont filed suit against Bethlehem on December 18, 1970, averring that Bethlehem had monopolized or attempted to monopolize the market for the fabrication and erection of structural steel in the relevant geographic area.*fn2 Specifically, the theory advanced by Belmont is that Bethlehem drove down prices in the fabrication market by entering bids on fabricating jobs that produced losses or unreasonably low profits to Bethlehem's fabricating division. Bethlehem's purpose, Belmont argues, was to prevent fabricators located outside of Bethlehem's transportation -cost advantage area, who were not dependent on Bethlehem for their steel, from competing for jobs within the Philadelphia market. Thus, Belmont asserts, Bethlehem maintained its monopoly in structural steel manufacturing by depressing fabricating prices. As a result of the artificially low prices for fabricating and erecting structural steel, Belmont claims, it sustained substantial losses and was forced to close down its fabricating operations.

Procedural History

The parties agreed to a bifurcated trial, and proceedings on the issue of liability began before a jury on September 26, 1973. In ten days of testimony, Belmont produced eight witnesses, four of whom were employees of Bethlehem. Counsel for Bethlehem based much of his cross -examination of these witnesses on documents taken from the files of Bethlehem and Belmont. During this cross-examination counsel elicited from the witnesses a number of facts and figures of which the witnesses exhibited no personal knowledge. The documents were marked as exhibits but were not introduced into evidence. Counsel for Belmont made no objection to the questions as they were asked, and used a number of the documents as the basis for its re-direct examination as well.

At the close of Belmont's case, counsel for Bethlehem began to offer the documents in question into evidence. At that point, the trial judge cautioned Bethlehem's counsel that offering these documents into evidence would, under local rule 33(b),*fn3 entitle Belmont to a rebuttal argument to the jury that would otherwise not be available to Belmont. Bethlehem then elected not to offer the documents into evidence. Instead, Bethlehem rested its defense without presenting any evidence.

The following day, while the court was ruling on points for charge, counsel for Belmont stated:

May I interrupt a minute because this Charge brings something to mind. . . . This had occurred as of yesterday evening, and that is the fact that defendant had identified documents and there was certain testimony taken on those documents and now those documents are not introduced as evidence and the ...


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