author: CASTLE, Senior Circuit Judge.

text:
    John S. KIRBY, d/b/a Quik-Chek of Indiana and Quik-Chek, Inc., Plaintiffs-Appellants, v. P. R. MALLORY & CO., INC., Defendant-Appellee.
    No. 72-1779.
    United States Court of Appeals, Seventh Circuit.
    Argued Sept. 12, 1973.
    Decided Nov. 27, 1973.

      William F. LeMond, Terrence P. Peh-ler, Indianapolis, Ind., for plaintiffs-appellants.
    Thomas M. Scanlon and Herbert C. Snyder, Jr., Indianapolis, Ind., for defendant-appellee.
    Before CASTLE, Senior Circuit Judge, and FAIRCHILD and PELL, Circuit Judges.
   CASTLE, Senior Circuit Judge.

Plaintiff John S. Kirby (doing business as Quik-Chek of Indiana and Quik-Chek, Inc.) appeals from an order granting summary judgment to.Defendant P. R. Mallory & Co. in an action in which Kirby sought $500,000 for damages allegedly sustained by Mallory’s violation of antitrust law. On this appeal, Kirby claims several sources of district court error: the determination that no violation of the Robinson-Patman Act occurred, the finding that Kirby’s complaint failed to state a claim under section 3 of the Clayton Act, the denial of Kirby’s motion for leave to amend his pleadings, the granting of Mallory’s motion for summary judgment after its previous denial, and the finding that no genuine issue as to any material fact existed. We find no error, and we affirm the order of the district court.

Kirby is a rack jobber of principally Eveready batteries. He wholesales batteries to retail stores for resale to consumers, and he also services the stores’ battery display racks. Prior to 1968, Kirby’s chief customer was the Hook Drug Co., the largest retail drug chain in Indiana, which represented about 50% of Kirby’s business. Mallory, Ev-eready’s primary competitor in the manufacture of batteries, had sought the Hook account for some years. It had been rebuffed by Hook, because Mallory offered sales without service. Kirby also refused Mallory’s request to change Hook’s battery inventory to Mallory. In late 1967 or early 1968, Hook altered its policy and decided to service its own battery display racks. Hook then requested Eveready, Mallory and Kirby to submit bids for only the sale of batteries. Hook accepted Mallory’s offer. As set forth in a May 2, 1968 letter from Mallory’s sales manager McKinley, to Roeseh, Hook’s vice president, Mallory’s terms to Hook corresponded with its terms to Kirby, with three exceptions: Hook was given a cooperative advertising allowance of up to 7%% of Hook’s net purchases from Mallory, payable on proof of actual expenditure; Hook was to be “tagged” in 62%% of Mallory’s Indianapolis radio advertising per year; and Hook was to be paid the construction cost of battery display racks conforming to Hook’s decors. While the agreement was effected on September 10, 1968, the cooperative advertising allowance aspect was terminated on December 31, 1968. Hook’s net purchases during this period were $81,494, entitling it to a $6,100 allowance. Mallory offered the allowance to other direct-purchase retailers, but it excluded wholesalers like Kirby who did not sell to the public. Mallory tags its largest retailers (direct-buying retailers and wholesalers’ customers) within the “Indianapolis advertising market.” Mallory has not extended this offer to either its direct-purchase retailers outside the Indianapolis market or to Kirby’s 125 retailers throughout the state. Mallory also furnishes battery display racks of various sizes and kinds to its customers, both direct-buying retailers and wholesalers.

I.

Kirby alleged in his complaint that Mallory contracted to sell its batteries to Hook “at prices below which products of like grade and quality” were sold to Kirby, a violation of Robinson-Patman Act § 2(a). During discovery, it became evident that Mallory had offered identical price schedules and discounts to Hook and Kirby, and Kirby shifted the basis of his complaint to §§ 2(d) and 2(e) of the Act. Specifically, Kirby argued that Mallory’s cooperative advertising allowance was contrary to § 2(d) in that it was a payment to Hook as compensation for services furnished by Hook in connection with the offering for sale of Mallory’s products not proportionally available to Kirby, a customer competing in the distribution of the product. Kirby also argued that the radio tagging and the display units were unlawful under § 2(e), which prohibits discrimination among purchasers (such as Kirby and Hook) of batteries bought for resale by contracting or contributing to the furnishing of services or facilities connected with the offering for sale of batteries on terms not accorded on a proportionally equal basis.

With respect to the cooperative advertising allowance, the question of liability depends on the applicability of § 2(d) to customers on different functional levels who compete in the distribution of Mallory’s products. That issue was decided in F. T. C. v. Fred Meyer, Inc., 390 U.S. 341, 88 S.Ct. 904, 19 L.Ed.2d 1222 (1968), a case involving a direct-buying retailer who induced his suppliers to grant him promotional allowances not proportionally available to the suppliers’ wholesale customers or the wholesalers’ retail customers. The Federal Trade Commission found this practice violated the statutory language of § 2(d) that allowances be “available on proportionally equal terms to all other customers competing in the distribution of such products” and required that the suppliers’ wholesale customers be granted proportional allowances. The Supreme Court held, however, that § 2(d) did not require proportional equality between Meyer, the direct-purchase retailer, and the wholesalers; rather, retailers purchasing from wholesalers are the suppliers’ “customers” for purposes of the Act and are entitled to proportionally the same allowance received by the competing direct-buying retailer. The Court responded to the Commission’s interpretation of § 2(d):

The Commission believed it found support for its position in the language of § 2(d) itself which requires that promotional allowances be accorded on proportionally equal terms to “customers competing in the distribution” of a supplier’s product rather than merely to customers competing in resales. The majority reasoned that [the wholesalers], when they resold to Meyer’s retail competitors, were competing with Meyer in the distribution of [the suppliers’] products because the two wholesalers were “seeking the same consumer dollars that respondents are after.” 63 F.T.C., at [43], While it cannot be doubted that Congress reasonably could have employed such a broad concept of competition in § 2(d), we do not believe that the use of the word “distribution” rather than “resale” is a clear indication that it did, and . . . the congressional hearings [indicate] that the section was meant to impose proportional equality only where buyers competed on the same functional level. 390 U.S. at 355-356, 88 S.Ct. at 912.

Thus, even though Kirby and Hook are customers competing in the distribution of Mallory products in an ultimate sense, Kirby cannot rely on the literal statutory language to assert liability, because Kirby, a wholesaler, and Hook, a direct-buying retailer, do not compete on the same functional level.

Kirby replies that even if Meyer limits the scope of § 2(d) to customers competing on the same functional level, Mallory is still liable because Hook is not only a direct-buying retailer but also a wholesaler, like Kirby. Kirby argues that when labels are disregarded, Hook’s wholesaling nature is revealed by its performance of the following wholesaling functions: the chain buys directly from manufacturers, obtains a wholesaler’s discount, warehouses the goods, distributes the goods to many outlets, and services the outlets’ displays. We agree that a functional analysis is necessary to determine whether customers are in fact competing on the same distributive level. F. T. C. v. Simplicity Pattern Co., 360 U.S. 55, 62-63, 79 S.Ct. 1005, 3 L.Ed.2d 1079 (1959). However, even before the Robinson-Patman Act, it was well-settled that the litmus test of a wholesaler is the character of his selling, not his buying. Mennen Co. v. F. T. C., 262 U.S. 759, 43 S.Ct. 705, 67 L.Ed. 1219 (1923); see A. Neale, The Law of Anti-Trust in the U. S. A. 252-253 (2d ed., 1969). F. T. C. v. Rubberoid Co., 343 U.S. 470, 72 S.Ct. 800, 96 L.Ed. 1081, on which Kirby relies, supports this finding. Rubberoid holds that traders, whatever their designations, who compete at the same level must be granted the same discount. In looking through form to substance, the Court found that a Rubberoid customer who claimed to be an “applicator” (a contractor who uses the product himself) was in fact a wholesaler, because he resold the product to other applicators. Unlike both Rub-beroid’s applicator and Kirby, Hook is not reselling Mallory batteries to retailers; Hook sells solely to ultimate users. Hook’s internal economies through the provision of services formerly performed by a wholesaler do not in themselves transform a retailer into a wholesaler. Since § 2(d) mandates proportional equality only between customers on the same functional level, we hold that Mallory was not required to grant the cooperative advertising allowance to Kirby.

Kirby next argues that even if Meyer limits the applicability of § 2(d) to customers competing at the same level, this restriction does not apply to § 2(e), which protects “purchasers of a commodity bought for resale.” As this language resembles that found in § 2(a) (“purchasers of commodities . . . sold for . . . resale”) and as Congress intended to expand the meaning of competition in § 2(a) to include more than resellers operating on the same functional level, see F. T. C. v. Fred Meyer, Inc., supra at 355 of 390 U.S., at 912 of 88 S.Ct., the scope of § 2(e) must therefore be similarly expansive. Kirby’s reliance on the disparities in statutory language fails to account for the coordinated nature of the two sections:

Sections 2(d) and (e) of the Act deal with discrimination in the field of promotional services made available to purchasers who buy for resale. Where the seller pays the buyer to perform the service, Section 2(d) applies. Where the seller furnishes the service itself to the buyer, Section 2(e) applies. F. T. C. Guides for Advertising Allowances and Other Merchandising Payments and Services (1960).

Although the text of the two sections contains a spate of semantic variation, s § 2(e) has long been viewed as coterminous with § 2(d), and courts have consistently resolved the two sections into an harmonious whole. 82 Harv.L.Rev. 63, 269-270 (1968); F. Rowe, Price Discrimination Under the Robinson-Patman Act 390 (1962); Elizabeth Arden Sales Corp. v. Gus Blass Co., 150 F.2d 988, 992-993 (8th Cir., 1945), cert, den., 326 U.S. 773, 66 S.Ct. 231, 90 L.Ed. 467 (1945). For example, judicial interpretation has implied § 2(e)’s interstate commerce requirement into § 2(d). Decisions have not distinguished the “customers” of § 2(d) from the “purchasers” of § 2(e) and have considered allowances “available” and services “accorded” whenever openly offered to buyers. This court would therefore feel compelled to interpolate into § 2(e) the prerequisite of directly competing purchasers had this not previously been established by judicial doctrine. Elizabeth Arden, Inc. v. F. T. C., 156 F.2d 132 (2d Cir. 1946), cert, den., 331 U.S. 806, 67 S.Ct. 1189, 91 L.Ed. 1828 (1947); F. T. C. v. Simplicity Pattern Co., supra, at 62-63 of 360 U.S., 79 S.Ct. 1005. This court has expressly held, “For [§ 2(e)] to be applicable, the favored customers must be competitors of the [disfavored] plaintiff.” Centex-Winston Corp. v. Edward Hines Lumber Co., 447 F.2d 585, 588 (1971) (Cummings, J.). Section 2 (e) is therefore equally unavailing for Kirby. Since Kirby was not Hook’s competitor, Mallory is not required to furnish Kirby with proportionately equal radio tagging or displays.

We carefully limit these findings to the facts of this case, recognizing, as did the Supreme Court in Meyer, that “it would be both inappropriate and unwise to attempt to formulate an all-embracing rule applying the elusive language of the section to every system of distribution.” 390 U.S. at 357, 88 S.Ct. at 912. As in Meyer, the facts clearly indicate that the direct impact of competitive discrimination is felt by the retailers with whom Hook competes. Therefore, the most reasonable construction of the statute requires proportionally equal treatment only among those competing directly. Id,

Kirby further asserts that Mallory’s discrimination in promotional payments and services represents indirect price discrimination, proscribed by § 2(a), irrespective of the favored and disfavored customers’ positions in the distribution chain. This argument fails, however, to distinguish adequately between indirect price discrimination and disproportionate payments of services. This was clarified by New England Confectionery Co., 46 F.T.C. 1041 (1949), in which the Commission stressed that a seller’s payments as well as services in connection with the original sale to the purchaser rather than with regard to the purchaser’s subsequent resale were not cognizable under §§ 2(d) or 2(e) but were challengeable only under § 2(a) as indirect price discrimination. See Rowe, supra, at 107, American Can Co. v. Russelville Canning Co., 191 F.2d 38, 56 (8th Cir. 1951). In the present case, it is apparent that the payments and services to Hook are provided not in connection with the original sale from Mallory to Hook but rather with respect to projected resales. The alleged violations in this case are properly exclusively subsumed under §§ 2(d) and 2(e), rather than § 2(a). Moreover, the theory that §§ 2(d) and 2(e) proscribe acts which are themselves prohibited by § 2(a) is not supported by either legislative history or the scheme of the Act. Senator Logan, the Senate floor manager of the bill, indicated that §§ 2(d) and 2(e) were devised to specifically cover a “second scheme” designed to evade the price discrimination outlawed in the original Clayton Act. 80 Cong.Rec. 6282 (1936). The Report of the House Judiciary Committee stated that the aims of the amendment were “to suppress more effectually discrimi-nations between customers of the same seller, . . . sometimes effected directly in prices . . . and sometimes by separate allowances to favored customers . . . ” H.R.Rep.No.2287, 74 Cong., 2d Sess. 7 (1936). Congress, noting the distinction between the two schemes, imposed stricter standards of legality respecting promotional discrimi-nations than price discriminations. Price discrimination is lawful if it can be justified under several exculpatory provisos or has no effect on competition. In contrast, promotional discrimination is illegal per se, irrespective of competitive impact and without resort to statutory justification. See, Rowe, supra, at 372. Kirby’s argument would have us collapse the distinction in schemes and standards and would have us find that the two sections are mere surplusage. This we decline to do. In view of the strict standards of §§ 2(d) and 2(e), which focus on resale, it appears quite clear that Congress carefully considered the deficiency in the original law proscribing price discrimination in the supplier-customer sale and drafted §§ 2(d) and 2(e) to apply exclusively to promotional discriminations like those alleged in this case. See, Rowe, supra, at 362-376.

Finally, Kirby contends that Mallory’s payments, tagging, and display units contravened the Meyer mandate of proportional equality with respect to Kirby’s retailers, Hook’s direct competitors. Kirby argues that as he was the principal victim of the promotional discrimination, he is entitled to damages. See, Perkins v. Standard Oil Co., 395 U. S. 642, 649, 89 S.Ct. 1871, 23 L.Ed.2d 599 (1969). We find that the district judge properly concluded there was no violation of the Robinson-Patman Act with respect to the display units. Kirby stated he was known as a rack jobber of Eveready batteries who relied on Mallory primarily for hearing-aid and mercury batteries. He used other Mallory batteries only when Eveready batteries were unavailable to him. Kirby admitted that Mallory had furnished him with display racks for hearing-aid batteries and .eight-pin blister batteries, which Kirby had in fact given to his retailers. Mallory stated that as an inducement to Kirby to switch the inventory of Hook (prior to 1968), Mallory offered to supply Kirby for Hook’s use with units comparable to those ultimately built for Hook (and supplied by Mallory to other large buyers, including wholesalers). Given the nature of Hook’s and Kirby’s respective purchases and the nature of the racks actually supplied to each of them, it was well within the province of the judge to find as a matter of law based on uncontested facts that the units furnished each of them were proportionally equal. See generally, Bond Distributing Co. v. Carling Brewing Co., 325 F.2d 158 (4th Cir. 1963); Gold Fuel Service, Inc. v. Esso Standard Oil Co., 306 F.2d 61 (3rd Cir. 1962), cert. den. 371 U.S. 951, 83 S.Ct. 506, 9 L.Ed.2d 500 (1963).

It is uncontested that Mallory offered neither allowances nor advertising tagging for Kirby’s retail customers. However, before a party protected by the Act can recover damages, he must prove both actual injury and causality between the violation and' the injury. Perkins v. Standard Oil Co., supra, at 648 of 395 U.S., 89 S.Ct. 1871; 31 Md. L.Rev. 60 (1971). We find the court below correctly determined on the basis of undisputed facts that Kirby suffered no general damages. Kirby admitted that neither he nor his retailers engaged in any advertising of Mallory batteries to offset the expenditure granted Hook. Kirby further admitted that he undertook no advertising resembling the tagging given Hook and that he had no knowledge of any similar activity on the part of his retailers. Kirby did state that for the purpose of offsetting the tagging, he hired a salesman, bought additional equipment, and sought other products for resale. It is obvious, however, that these expenses are unrelated to any injury suffered by Kirby’s customers because of promotional discrimination. Rather, these costs result from Kirby’s efforts to replace his Hook business, a cost not related to a legal wrong. The record further establishes that Kirby suffered no special damages. Kirby admitted that his retailers had not reported any sales lost to them because of Mallory’s agreement with Hook. If Kirby’s customers suffered no sales losses from the agreement, Kirby cannot tenably maintain that he suffered any loss of profit from Mallory’s action. Accord, State Wholesale Grocers v. The Great Atlantic & Pacific Tea Co., 202 F.Supp. 768, 775 (N.D.Ill.1961).

II.

Kirby asserts that the court below erroneously ignored the claim allegedly made in his complaint that Mallory had made an exclusive-dealing arrangement with Hook, unlawful under section 3 of the Clayton Act. Kirby apparently predicates this contention on the inclusion in his complaint of the following, “This action arises under the Clayton Act ... as amended by the Robinson-Patman Act ... as hereinafter more fully appears.” Respecting sufficiency of the pleadings, the Federal Rules of Civil Procedure require only “ ‘a short and plain statement of the claim’ that will give the defendant fair notice of what plaintiff’s claim is and the grounds on which it rests.” Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 103, 2 L.Ed.2d 80 (1957). We find that a mere formal citation to the Clayton Act to focus attention on its amendment, the Robinson-Patman Act, does not provide sufficient notice to Mallory to answer or to prepare for trial on a Clayton Act exclusivity issue. Further, nothing in the statement of facts suggests a § 3 claim. The substance of the claim is, “Defendant has contracted to sell Defendant’s products to said Hook Drug Co., Inc., at prices below which products of like grade and quality are sold to Plaintiffs. . . . The Defendant in selling batteries at such unreasonably low prices with the purpose and intent to destroy competition and to eliminate one or more competitors has violated 15 U.S.C.A. Section 15.” It is clear that these circumstances relate to price discrimination proscribed by the RobinsonPatman Act (15 U.S.C. § 13) rather than exclusive-dealing, prohibited by the Clayton Act (15 U.S.C. § 14). We conclude that Kirby’s original pleadings did not state a Clayton Act § 3 claim.

Kirby next argues that the court erred in refusing to permit him to assert a Clayton Act § 3 claim. We note that the action was commenced on September 24, 1968, and on November 4, 1968, Kirby took Hook’s Vice President Roesch’s deposition. Attached to the deposition was the May 2, 1968 letter from McKinley to Roesch which Kirby contends establishes the exclusive-dealing. The grant of leave to amend pleadings is within the discretion of the trial court, Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 330, 91 S. Ct. 795, 28 L.Ed.2d 77 (1970), and the only question here is whether the court abused its discretion in denying Kirby’s motion. See Tyne v. National Supply Co., 280 F.2d 878 (7th Cir. 1960). Kirby’s motion was filed on October 4, 1971. It contained no facts unknown to him 2i/2 years prior to the motion. Yet Kirby did not seek to file his motion until Mallory’s motion for summary judgment was reset for oral argument, when Kirby anticipated foreclosure of his Robinson-Patman claim. It is clearly unfair to Mallory to permit Kirby to remain mute for this period and then to bolster his pleadings to prevent an anticipated adverse judgment. Accord, Vine v. Beneficial Finance Co., Inc., 374 F.2d 627 (2d Cir. 1967), cert, den., 389 U.S. 970, 88 S.Ct. 463, 19 L.Ed.2d 460 (1967); Fowler v. Sponge Products Corp., 246 F.2d 223 (1st Cir. 1957); Eisenmann v. Gould-National Batteries, Inc., 169 F.Supp. 862 (E.D.Pa.1958). Moreover, between November 1968 and October 1971, extensive pretrial procedure, necessary in antitrust cases to particularize issues of fact, was largely completed. It would be unjust to permit an untimely amendment, materially altering the basis of the action, necessitating additional discovery, conferences, and pre-trial orders and statements. Gaylord Shops, Inc. v. South Hills Shoppers’ City, 33 F.R.D. 303 (W.D.Pa. 1963); see, 3 J. Moore, Federal Practice ¶ 15.08 [4]. We agree with Judge Major who stated, in finding no abuse of discretion in denial of a motion to amend where the plaintiff, like Kirby, was aware of the necessary facts two years prior to his motion and showed no reason for his delay, “All litigation must sometime be brought to an end, and, in our view, under the circumstances, there was no abuse of discretion. ...” Stanek v. Trailmobile, Inc., 283 F.2d 827, 829 (7th Cir. 1960); Boris v. Moore, 253 F.2d 523 (7th Cir. 1958).

III.

Kirby moved for summary judgment on July 14, 1969, and Mallory filed a motion for summary judgment on August 21, 1969. These motions were denied on January 18, 1971. Subsequently, on September 21, 1971, the court granted Mallory's motion for reconsideration of its motion for summary judgment. Kirby filed a motion for reconsideration on October 6, 1971. The court granted Mallory’s motion for summary judgment on July 10, 1972. On appeal, Kirby asserts that the court below had no authority to reconsider its own decision, a position somewhat inconsistent with Kirby’s motion for reconsideration to the trial court. The order of denial of summary judgment is an interlocutory decree, United States v. Florian, 312 U.S. 656, 61 S.Ct. 713, 85 L.Ed. 1105 (1941); Madry v. Sorel, 440 F.2d 1329 (5th Cir. 1971); Alart Associates, Inc. v. Aptaker, 402 F.2d 779 (2d Cir. 1968), without res judicata effect. 6 J. Moore, supra, at If 56.14[2], If good reason is shown why a prior denial of a motion for summary judgment is no longer applicable or should be departed from, the trial court may, in the exercise of sound discretionary power, consider a renewed motion for summary judgment, particularly when the renewed motion is based on an expanded record. Allstate Finance Corp. v. Zimmerman, 296 F.2d 797 (5th Cir. 1961); Brownfield v. Landon, 113 U.S.App.D.C. 248, 307 F.2d 389 (1962); Beedy v. Washington Water Power Co., 238 F.2d 123 (9th Cir. 1956); 6 J. Moore, supra. On the facts of this case, we find that the court below did not abuse its discretion in granting Mallory’s motion for summary judgment after previously denying it. Subsequent to the denial, Kirby answered Mallory’s interrogatories. These interrogatories plainly established that Kirby could not show damage either to himself or to his retailers either through loss of sales, out-of-pocket expenses or increased business costs causally related to Mallory’s actions. Without a showing of damages, a private action under the Robinson-Patman Act cannot be maintained. The interests of efficient judicial administration compel the empowering of the court to reconsider motions for summary judgment when uncontested facts showing the absence of a necessary element for a prima facie case are revealed subsequent to the court’s denial of the motion.

Pursuant to a local rule of the Southern District of Indiana, the court made explicit findings of fact appended to its order granting summary judgment. Kirby admits these facts are “for the most part correctly stated,” but he contends that there are some genuine remaining issues of fact. We note that Kirby filed two affidavits: one focused on the Mallory-Hook agreement and stated that Kirby’s damage was the loss of the Hook business; the other stated that because Mallory offered its batteries to Hook at wholesale prices, Kirby was unable to sell batteries to retailers at prices permitting them to compete with Hook and still make a profit. We determine that summary judgment was properly granted. It is immaterial that Mallory solicited Hook’s business, a fact which Mallory admitted, since Mallory was acting lawfully in seeking sales. The question of the price at which Hook sold batteries to the public is also irrelevant to a promotional discrimination suit, and the court in its discretion need not have stated a finding respecting this price. The extent to which Kirby handled Eveready batteries appears uncon-tradicted and, in any event, is similarly immaterial to the case. There is no dispute as to the list prices and discounts offered Kirby and Hook, and Kirby’s characterization of the cooperative advertising allowance as price discrimination is a legal, rather than factual issue for the court to decide. Mallory’s reason for not offering the allowance to Kirby (that it was only offered to purchasers selling directly to the public), is both undisputed and immaterial. Mallory admitted Kirby’s -claims that he did not receive an offer of tagging and that his customers did not receive tagging or allowances. It is uncontested that Mallory had racks costing $66.30 each constructed in Hook’s stores and that Mallory supplied various kinds of racks to its distributors, including Kirby, depending on individual needs. Mallory had in fact offered Kirby racks comparable to those installed in Hook’s stores when it requested Kirby to switch Hook’s inventory from Eveready to Mallory. It is likewise uncontested that neither Kirby nor his customers engaged in any advertising of Mallory products. Finally, respecting the court’s finding that the promotional discrimination did not result in any loss of Mallory battery sales by Kirby to his retail customers competing with Hook, Kirby stated that he had no knowledge of customers unable to sell batteries in competition with Hook and that he had no record of sales which he could not make to his retailers because of the Mallory-Hook agreement.

The order of the district court is affirmed.

Affirmed.

      . 38 Stat. 730, as amended, 49 Stat. 1526, 15 U.S.C. § 13, provides in pertinent part as follows:
      “(a) It shall be unlawful for any person engaged in commerce, in the course of such commerce, either directly or indirectly,- to discriminate in price between different purchasers of commodities of like grade and quality, where either or any of the purchases involved in such discrimination are in commerce, where such commodities are sold for use, consumption, or resale within the United States or any Territory thereof or the District of Columbia or any insular possession or other place under the jurisdiction of the United States, and where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination, or with customers of either of them.

      . 38 Stat. 730, as amended, 49 Stat. 1526, 1527, 15 U.S.C. §§ 13(d), 13(e), provide in full as follows:
      (d) “ [I]t shall be unlawful for any person engaged in commerce to pay or contract for the payment of anything of value to or for the benefit of a customer of such person in the course of such commerce as compensation or in consideration for any services or facilities furnished' by or through such customer in connection with the processing, handling, sale, or offering for sale of any products or commodities manufactured, sold, or offered for sale by such person, unless such payment or consideration is available on proportionally equal terms to all other customers competing in the distribution of such products or commodities.
      (e) “It shall be unlawful for any person to discriminate in favor of one purchaser against another purchaser or purchasers of a commodity bought for resale, with or without processing, by contracting to furnish or furnishing, or by contributing to the furnishing of, any services or facilities connected with the processing, handling, sale, or offering for sale of such commodity so purchased upon terms not accorded to all purchasers on proportionally equal terms.”

      . In Interrogatory 35, Kirby was asked without specification of context if he had constructed or caused to be constructed for his customers’ use, racks comparable to those furnished to Hook. He replied in the affirmative, without stating whether those racks were intended to hold Eveready or Mallory batteries. Because of our conclusion supporting the finding of the trial court that Mallory did not violate the Robinson-Patman Act with respect to the furnishing of display racks, we need not reach the question of whether Kirby’s expenses for the construction of these racks were causally related to any action taken by Mallory.


source: Caselaw Access Project

author: McCREE, Circuit Judge.

license: Public Domain

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Marvin Martin YOUNG, Defendant-Appellant.
    No. 73-1797.
    United States Court of Appeals, Sixth Circuit.
    Argued Nov. 30, 1973.
    Decided Jan. 8, 1974.

      George W. Carpenter, Chattanooga, Tenn. (Court-appointed), for defendant-appellant.
    W. Lloyd Stanley, Jr., Asst. U. S. Atty.,' Chattanooga, Tenn., for plaintiff-appellee; John L. Bowers, Jr., U. S. Atty., E. D. Tenn., Edward E. Wilson, Asst. U. S. Atty., Knoxville, Tenn., on brief.
    Before PHILLIPS, Chief Judge, Mc-CREE, Circuit Judge, and MC-ALLISTER, Senior Circuit Judge.
   McCREE, Circuit Judge.

This is an appeal from a conviction, after the third trial under an indictment charging the receiving and concealing of a stolen motor vehicle that was moving in interstate commerce, in violation of 18 U.S.C. § 2313. Appellant’s first trial resulted in a hung jury. After appellant was convicted in the second trial, he appealed contending that his conviction should be reversed on three grounds: (1) that the district court erroneously denied his motion for acquittal at the first trial; (2) that the district court erroneously denied his motion to suppress evidence obtained by law enforcement officials in violation of the Fourth Amendment; and (3) that the district court erroneously denied him a free transcript of the first trial even though he was indigent. We reversed the conviction and remanded the case because of the district court’s failure to afford appellant a transcript and did not reach the other issues. United States v. Young, 472 F.2d 628 (6th Cir. 1972). Thereafter, over objection of appellant, the district court directed that he be tried a third time. On May 23, 1973, appellant was retried and convicted. The district court sentenced him to the federal penitentiary for three years.

On this appeal, appellant urges us to reverse his conviction for two reasons. First, he contends again that the district court erroneously denied his motion for acquittal following the first trial on December 8, 1971, because the government had failed to adduce evidence sufficient for submitting the case to the jury. Second, he contends, once more, that the district court erred in failing to suppress evidence obtained without a search warrant where there were no exigent circumstances excusing the government’s failure to do so.

Although the government’s presentation of its case at the first trial was hardly a model of exemplary criminal trial practice, there was evidence, including appellant’s own admissions, of all the elements of the offense charged. Accordingly, the district court did not err in permitting the jury to determine whether appellant was guilty beyond a reasonable doubt of the crime with which he was charged. United States v. May, 430 F.2d 715 (6th Cir. 1970).

We agree with appellant, however, that the government’s search of the vehicle without a warrant was impermissible because it did not come within any of the exceptions to the rule requiring a warrant, United States v. Nelson, 459 F.2d 884, 887-888 (6th Cir. 1972), and that, therefore, despite the existence of probable cause to search, the fruits of the search ought to have been suppressed. In so holding, we bear in mind the observation of Mr. Justice Jackson in Johnson v. United States, 333 U.S. 10, 13-14, 68 S.Ct. 367, 369, 92 L. Ed. 436 (1947) that

[t]he point of the Fourth Amendment, which often is not grasped by zealous officers, is not that it denies law enforcement the support of the usual inferences which reasonable men draw from evidence. Its protection consists in requiring that those inferences be drawn by a neutral and detached magistrate instead of being judged by the officer engaged in the often competitive enterprise of ferreting out crime.

Nor is the protection afforded a person by the interposition of an impartial magistrate between him and police officers dispensed with merely because a search of a vehicle instead of a home has been undertaken. Coolidge v. New Hampshire, 403 U.S. 443, 91 S.Ct. 2022, 29 L.Ed.2d 564 (1971). In Coolidge, where the Court invalidated a search of an automobile because it had not been conducted pursuant to a warrant issued by a neutral and detached magistrate, it stated:

Thus the most basic constitutional rule is this area is that “searches conducted outside the judicial process, without prior approval by judge or magistrate, are per se unreasonable under the Fourth. Amendment — subject only to a few specifically established and well-delineated exceptions.” The exceptions are “jealously and carefully drawn,” and there must be “a showing by those who seek exemption . . . that the exigencies of the situation made that course imperative.” “[T]he burden is on those seeking the exemption to show the need for it.” 403 U.S. at 454-455, 91 S.Ct. at 2032 (footnotes omitted).

At times, to be sure, the fact that the challenged evidence is located in a motor vehicle may, in conjunction with other circumstances, furnish the exigency that would permit a search to be conducted without a warrant. See Chambers v. Maroney, 399 U.S. 42, 90 S.Ct. 1975, 26 L.Ed.2d 419 (1970). However, the fact that the object sought to be searched is a. motor vehicle does not, ipso facto, create an exigency. Not every warrantless search of a motor vehicle is valid simply because probable cause may exist. Coolidge v. New Hampshire, supra. Here, the truck had been parked for three for four days on the property of the Waldens who had hired appellant to cut and haul pulpwood, and appellant had used the vehicle as a dormitory during that period. When Mrs. Walden called to report her reasons for suspecting that the truck had been stolen, the officers had no grounds to believe that the vehicle might be moved within the few minutes required to make application for a search warrant from a concededly available magistrate and to travel to the vehicle site.

Since the search of the vehicle was constitutionally impermissible, we must inquire whether reversal of appellant’s conviction is required. The unlawful search produced the owner’s identification sticker, the vehicle identification plate and the vehicle’s license plate. The probative value of these items was limited to the identification of the truck. The truck was otherwise identified by James Gunter, manager of Brand Brothers Produce Company from which a new truck had been stolen, and by the Waldens to whom appellant, in the hope of obtaining assistance in obtaining papers for the truck, had given a vehicle identification number with 11 characters which differed from the vehicle identification number of the missing truck only by a single character, that of a “1” instead of an “L”. Accordingly, the evidence produced by the search was merely corroborative of other evidence and cumulative. In addition, evidence was adduced that appellant had been an employee at Brand Brothers’ Georgia plant; that the truck had disappeared shortly after appellant left Brand Brothers’ employment; and that appellant had arrived subsequently in Cleveland, Tennessee, with a new truck of the same make, model and color as the missing truck with Georgia license plates. The only apparent difference between the truck appellant drove and the stolen ve-hide was that the missing truck had a refrigeration component and the truck appellant had did not. However, appellant told Mr. Walden that he had sold the truck’s refrigeration body for $400. During his sojourn with the Waldens for three or four days prior to his arrest, appellant told them that he wanted to disguise the truck and inquired about the cost of paint, and said that if “they ever catch me with this thing, I would get about twenty years,” and that if he could not get new papers for the truck, he might as well burn it. In addition, appellant removed the license plate and vehicle identification number during this period. Finally, a fellow prisoner testified that after appellant’s arrest, Young told him that he had stolen a truck in Georgia, had sold its refrigeration component, and had later hauled pulpwood in it.

In light of the foregoing, we conclude that the admission of the evidence obtained in violation of appellant’s constitutional rights, although erroneous, was harmless beyond a reasonable doubt. Chapman v. California, 386 U.S. 18, 87 S.Ct. 824, 17 L.Ed.2d 705 (1967).

Affirmed.


author: EDWARDS, Circuit Judge.

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Gene Westley REED, Defendant-Appellant.
    No. 73-1371.
    United States Court of Appeals, Sixth Circuit.
    Argued Oct. 17, 1973.
    Decided Jan. 8, 1974.
    Russell X. Thompson, Memphis, Tenn., £°r appellant.
    Larry E. Parrish, Asst. U. S. Atty., for appellee; Thomas F. Turley, Jr., U. S. Atty., W. D. Tenn., Memphis, Tenn., on brief.
    Before PHILLIPS, Chief Judge, and EDWARDS and McCREE, Circuit Judges.
   EDWARDS, Circuit Judge.

Appellant was convicted after jury trial on one count of a two-count indictment charging violation of a statute prohibiting possession or sale of an instrument primarily useful for wiretapping. The provision under which he was convicted is as follows:

“ . . . any person who willfully
(b) manufactures, assembles, possesses, or sells any electronic, mechanical, or other device, knowing or having reason to know that the design of such device renders it primarily useful for the purpose of the surreptitious interception of wire or oral communications, and that such device or any component thereof has been or will be sent through the mail or transported in interstate or foreign commerce; . shall be fined ... or imprisoned. . . . ” 18 U.S.C. § 2512(1)(b) (1970).

The District Judge sentenced appellant to three years probation and a $1,000 fine.

The case was presented to the jury upon stipulated facts as follows:

“In the late 1950’s or early 1960’s the Appellant-Defendant, Gene West-ley Reed, hereinafter referred to as Defendant, purchased a tape recorder, brand name, Mayfair, Model FT-702, Serial No. 01826, along with a link of insulated two-conductor wire with a phone plug and two small alligator clips from a company known as Glen Allen Company, a retail dealer in electronic equipment, which was located at that time in Memphis, Tennessee. The Defendant paid a sum of between One Hundred ($100.00) Dollars and. One Hundred Fifty ($150.00) Dollars for the tape recorder along with its accessories. At the time this machine was purchased the Defendant was in the private detective business, had previously been in the radio repair business, and was therefore knowledgeable about various electronic equipment and was particularly knowledgeable about this type of tape recorder and its various uses since it was used in the Defendant’s private detective business. The Defendant, therefore, knew that the design of this particular tape recorder rendered it primarily useful for the purpose of the surreptitious interception of wire communications and also knew that such device or components thereof had been transported in interstate or foreign commerce when he purchased the tape recorder in the late 1950’s or early 1960’s.”

Appellant presents two issues of law:

1. Whether or not 18 U.S.C.A., Sec. 2512(1) (b), as applied in this case, is ex post facto contrary to Article I, Section 10 of the Constitution of the United States.

2. Whether or not the offense created by 18 U.S.C.A., Sec. 2512(1) (b) applies to a forbidden article which comes to rest in interstate commerce and is then subsequently sold in intrastate commerce.

The stipulated facts upon which this case was heard show that appellant knew that the instrument was “primarily useful for surreptitious interception of wire communications,” and that it had previously moved in interstate commerce.

As to appellant’s claim that the law as applied to him was ex post facto legislation, we hold that the fact that the instrument had been transported in interstate commerce prior to the passage of the act, which made its possession and sale illegal, does not require us to invalidate this conviction. Under the stipulation it is clear that the offense of possession and sale charged against appellant followed rather than preceded the adoption of the statute.

There are many cases which have dealt with and rejected an ex post facto argument concerning some element of a crime where the element (but not the prohibited act) had come into being or taken place prior to passage of the criminal statute.

In 1898 the Supreme Court reviewed a state statute making it a misdemeanor for a person who had been convicted of a felony to practice medicine. Against an ex post facto challenge the Court upheld the statute as applied to one who had been convicted of the felony before the statute was passed. Hawker v. New York, 170 U.S. 189, 18 S.Ct. 573, 42 L. Ed. 1002 (1898).

The basic tests of ex post facto legislation are set forth in Calder v. Bull, 3 Dall. 386, 3 U.S. 386, 389, 1 L.Ed. 648 (1798). We have compared the facts herein to the Calder standards and we cannot find that they fall within any of the four categories there enumerated.

Much more in point are such cases as United States v. Day, 476 F.2d 562 (6th Cir. 1973); United States v. McCreary, 455 F.2d 647 (6th Cir. 1972); Williams v. United States, 426 F.2d 253 (9th Cir.) cert, denied, 400 U.S. 881, 91 S.Ct. 125, 27 L.Ed.2d 119 (1970). These cases rejected an ex post facto complaint as to the Federal Firearms Act, 18 U.S.C. App. § 1202(a) (1970), which prohibits possession of firearms by persons convicted of felonies, including those so convicted before the date of the statute.

See also United States v. DeStafano, 429 F.2d 344 (2d Cir. 1970), cert, denied, 402 U.S. 972, 91 S.Ct. 1656, 29 L. Ed.2d 136 (1971); United States v. Curcio, 310 F.Supp. 351 (D.Conn.1970). These cases rejected an ex post facto attack upon the Federal Loan Sharking Statute (18 U.S.C. §§ 891-96) which prohibited extortion employed to collect a debt, including debts contracted prior to passage of the statute.

Appellant’s second issue basically raises the question as to whether Congress intended to prohibit an intrastate act (possession and sale of the recorder) and, if so, whether it had constitutional power to do so.

We believe the first part of this issue is answered by the express language of Section 2512(1) (b) which we have quoted fully above. Stripped to its essentials as to this issue, it reads: “Any person who wilfully . . . possesses or sells any electronic . . . device knowing . . . that such device . . . has been transported in interstate . .' commerce . . . shall be fined . • . or imprisoned . . ..” This language is not amenable to any limitation as to intrastate possession or sale. Inevitably, indeed, the great majority of offenses contemplated by this section will be intrastate in character.

The Congressional intent in relation to this legislation is made quite clear by the report of the Committee which had charge of this legislation. That report called for an “attack [which] must be made on the possession, distribution, manufacture and advertising of intercepting devices. All too often the invasion of privacy itself will go unknown. Only by striking at all aspects of the problem can privacy be adequately protected.” S.Rep.No.1097, 90th Cong., 2d Sess. (1968), reprinted in 1968 U.S.Code Cong. & Admin. News, pp. 2112, 2156.

Nor do we have any doubt about the constitutionality of the legislation as applied to intrastate possession or sale. It was clearly Congress’ intention to respond to a national problem intimately affecting interstate commerce by a national solution. This intention is reflected in the Congressional findings which followed extensive hearings on the bill:

TITLE III — WIRETAPPING AND ELECTRONIC SURVEILLANCE FINDINGS

Sec. 801. On the basis of its own investigations and of published studies, the Congress makes the following findings:

(a) Wire communications are normally conducted through the use of facilities which form part of an interstate network. The same facilities are used for interstate and intrastate communications. There has been extensive wiretapping carried on without legal sanctions, and without the consent of any of the parties to the conversation. Electronic, mechanical, and other intercepting devices are being used to overhear oral conversations made in private, without the consent of any of the parties to such communications. The contents of these communications and evidence derived therefrom are being used by public and private parties as evidence in court and administrative proceedings, and by persons whose activities affect interstate commerce. The possession, manufacture, distribution, advertising ,' and use of these devices are facilitated by interstate commerce.

(b) In order to protect effectively the privacy of wire and oral communications, to protect the integrity of court and administrative proceedings, and to prevent the obstruction of interstate commerce, it is necessary for Congress to define on a uniform basis the circumstances and conditions under which the interception of wire and oral communications may be authorized, to prohibit any unauthorized interception of such communications, and the use of the contents thereof in evidence in courts and administrative proceedings.

(c) Organized criminals make extensive use of wire and oral communications in their criminal activities. The interception of such communications to obtain evidence of the commission of crimes or to prevent their commission is an indispensable aid to law enforcement and the administration of justice.

(d) To safeguard the privacy of innocent persons, the interception of wire or oral communications where none of the parties to the communication has consented to the interception should be allowed only when authorized by a court of competent jurisdiction and should remain under the control and supervision of the authorizing court. Interception of wire and oral communications should further be limited to certain major types of offenses and specific categories of crime with assurances that the interception is justified and that the information obtained thereby will not be misused.

Act of June 19, 1968, Pub.L.No. 90-351, Title III, § 801, 82 Stat. 211. (Emphasis added.)

As long ago as 1939 the Supreme Court recognized Congressional power to legislate concerning intrastate matters affecting the interstate communication system. Speaking of Section 605 of the Federal Communications Act and its prohibition on interception and divul-gence of telephonic communications, the Supreme Court said:

“Plainly the interdiction thus pronounced is not limited to interstate and foreign communications. And, as Congress has power, when necessary for the protection of interstate commerce, to regulate intrastate transactions, there is no constitutional requirement that the scope of the statute be limited so as to exclude intrastate communications.” Weiss v. United States, 308 U.S. 321, 327, 60 S.Ct. 269, 84 L.Ed. 298 (1939). (Footnotes omitted.)

Since an actual interstate nexus is conceded in this case by the stipulated facts, and in addition the intrastate sale of recording devices like the one here at issue has been found by Congress to affect interstate commerce, we find appellant’s argument based on United States v. Bass, 404 U.S. 336, 92 S.Ct. 515, 30 L.Ed.2d 488 (1971), to be inapposite.

The judgment of the District Court is affirmed.


author: WEICK, Circuit Judge.

text:
    UNITED STATES of America, Upon the Relation and for the Use of the TENNESSEE VALLEY AUTHORITY, Plaintiff-Appellee and Plaintiff-Cross Appellant, v. T. INDUSTRIES, INC., Defendant-Appellant and Defendant-Cross Appellee.
    Nos. 73-1279, 73-1280.
    United States Court of Appeals, Sixth Circuit.
    Argued Oct. 18, 1973.
    Decided Jan. 15, 1974.
    As Amended Jan. 24, 1974.
    Herbert Glazer, Memphis, Tenn., for defendant-appellant, defendant-cross ap-pellee; John W. McQuiston, II, Memphis, Tenn., on briefs.
    Beverly S. Burbage, TV A, Knoxville, Tenn., for plaintiff-appellee, plaintiff-cross appellant; Robert H. Marquis, Gen. Counsel, Beauchamp E. Brogan, Asst. Gen. Counsel, on brief.

      Before WEICK and PECK, Circuit Judges, and O’SULLIVAN, Senior Circuit Judge.
   WEICK, Circuit Judge.

This is an appeal by the landowner, T. Industries, Inc. (T. Industries), and a cross-appeal by the Tennessee Valley Authority (TVA), from an award made by the District Court in a condemnation action brought by TVA. On October 11, 1966, in the condemnation proceeding TVA acquired a permanent easement running through a farm in Haywood County, Tennessee, owned by T. Industries and leased to Winter Garden Freezer Company.

The farm owned by T. Industries consisted of 1802 acres, of which 450 acres were cleared for production and the remaining acreage was timber land. The easement taken was 200 feet wide and 10,979 feet long. It consisted of 50.4 acres and ran diagonally through the farm. Of the acreage within the easement 17.5 acres were cleared farm land and 32.9 acres were timber land.

Three Commissioners appointed by the Court conducted a hearing for nine days, taking extensive testimony. The Commissioners found that the farm had a value of $824,788 before the taking, and $728,816.16 after the taking. As a result thg Commissioners awarded $95,971.84 to T. Industries.

In making the award the Commissioners valued separately the land within the easement before and after the taking, and damages to the residue. They found that the cleared land in the easement was worth $1,250 per acre before the taking, and $425 per acre after the taking. The seized timber land was valued at $194 per acre before the taking, and $19.40 per acre after the taking. The total difference in value between the land in the easement before and after the taking was $19,744.34. ' The Commissioners additionally found $76,227.50, damages to the residue.

The District Court reviewed the case de novo. It heard testimony for an additional day and reduced the award from $95,971.84 to $19,000. Of this award $10,000 was compensation for the value of the easement, and $9,000 was awarded for damage to the residue. T. Industries appealed from the reduction of the Commissioners’ award, and TVA appealed from the Court’s award of $9,000-damages to the residue.

This Court is not bound by any factual findings or legal conclusions of the Commissioners or of the District Judge. 16 U.S.C. § 831x.

The major controversy in the case is whether the land taken was comparable to other land in the area used for growing cotton and soybeans, or whether its market value is actually much higher than the surrounding farm land due to the fact that it is a vegetable farm with unique characteristics that make it more valuable than the surrounding farm land. Both sides presented a number of witnesses on this key point.

J. O. Tankersley, President of T. Industries and also President of the Winter Garden Freezer Company, testified that he was involved in vegetable growing all over the United States, and that this was the cheapest land on which he operated. He said that vegetable-growing land in the United States runs in valuation from $1,500 to $5,000 per acre. He valued the T. Industries farm at $1,250 per acre.

Jerry Isaacs, an employee of Doane Agricultural Service, testified that Doane is in the business of managing farms for absentee landowners in forty-eight states and in foreign countries. Isaacs had worked for Doane for several years and had left farm management in 1969 to devote full time to appraisal work. He had received a B.S. degree in agriculture from the University of Missouri in 1962. Isaacs valued the farm at $831,300 before the taking, and $697,000 after the taking. He testified that he had found no other land nearby which was really comparable to the farm in question. He further testified that he had seen no other farm so specialized or fully developed.

At any time within thirty days from the filing of the decision of the district judges upon the hearing on exceptions to the award made by the commissioners, either party may appeal from such decision of the said judges to the court of appeals, and the said court of appeals shall upon the hearing on said appeal dispose of the same upon the record, without regard to the awards or findings theretofore made by the commissioners or the district judges, and such court of appeals shall thereupon fix the value of the said property sought to be condemned.

Another witness who testified for the landowner was Wayne Par low, from the adjoining county of Crockett, who had been a county trustee for more than eight years, and was presently serving in his third term in that post; he also spent considerable time in his real estate business. He testified that there was really no property comparable to that of T. Industries in either Crockett or Haywood counties, and that the farm was in a much higher state of cultivation than a farmer would need simply for the growing of cotton or soybeans. He valued the farm as worth $850,000 before the taking and $600,000 after the taking.

For TVA, Charles Ross, a former employee of Doane Agricultural Service, who had managed farms and made appraisals, testified that the farm was no more valuable than a cotton or soybean farm. However, on cross-examination Mr. Ross admitted that he never raised spinach or greens, and that he was not as familiar with growing greens as he was • with growing other crops. He found the decline in value of the seized land to be only $4,932.38, and found no damage to the residue.

W. M. Reeder, a former TVA employee (from 1940 to 1968) and now its chief appraiser, testified that there was no “class one soil” on the farm and that the soil on the farm was not particularly suited to growing vegetables. He found the reduced value of the easement taken to be'$6,100, and found no damage whatsoever to the residue. On cross-examination, however, he admitted that his most recent experience in appraising vegetable farm land was in 1944 and 1945. He also revealed questionable knowledge concerning vegetable growing; for example, he stated that wet soils were undesirable for growing spinach and greens. The contrary is true. He said that turnip greens should be planted at the same time in East and West Tennessee. Vegetable farmers do not follow such a practice. Reeder stated that he had no experience in the mechanical harvesting of crops. He further stated that the wet' nature of the soil made it less valuable.

Eugene Wetzel, a land appraiser for TVA, testified that the farm of T. Industries was comparable to much of the surrounding cotton land. He found a reduced value of the easement area to be $6,725, and found no damages to the residue. He testified that the fact that the land was planed, bedded and irrigated, did not make it more valuable. However, Mr. Wetzel also said that he had no experience in vegetable growing or farming.

K. L. Page also testified for TVA that the land was comparable to other farm land in Haywood County, but he admitted that" he had no real background in the field of commercial vegetable growing.

The Commissioners’ award clearly revealed that they credited the contention that the land in question had a value higher than the surrounding cotton and soybean land. We think this conclusion is amply supported by the weight of the evidence. There is no dispute that the land is planed, bedded, and irrigated; this makes its market yalue higher than that of surrounding land which is not nearly so highly developed. In addition, the witnesses who testified for TVA had, at best, a limited knowledge of commercial vegetable farming.

TVA contends that the landowner is not prevented from growing and harvesting, vegetables underneath the transmission lines. The landowner contends that it is necessary to plant a cover crop under the lines to prevent weed growth, but that it cannot harvest and irrigate mechanically on the easement area because of the danger involved in operating mechanized equipment in close proximity to the high tension power lines. The parties offered conflicting evidence on this point.

However, the amount of the Commissioners’ award leaves no doubt but that they thought the landowner was denied effective use of the land within the easement area. The District Court also found interference with farming operations due to the presence of the power lines. We agree with these findings.

The easement defined in footnote 1 of this opinion is very broad. In our opinion it grants rights to TVA which will substantially and perpetually interfere with the landowner’s use. In addition, it would depreciate the value of the farm should the owner desire to sell the farm.

Photographic evidence revealed overripe crops in the easement area which had not been harvested. Attempts in the past had been made at hand harvesting, but Winter Garden officials testified that this method of harvesting was not economical.

We are of the opinion that the Commissioners’ award for the value of the easement ■ taken is correct. That award was $19,744.34.

The only remaining question is that of damages to the residue. The .Commissioners found this damage to be $76,227.50 by use of the “before and after” method of evaluation. The District Court found only $9,000-damage to the residue, but did not state how it arrived at that figure. Both the Commissioners and the District Court agreed that there was damage to the residue, but disagreed only as to the amount thereof. The awards for damage to the residue •were based on the belief, on the part of both the Commissioners and the Court, that farming operations were adversely affected even outside the area of the easement proper. The Court specifically found that irrigation and spraying operations in the area adjacent to the easement were interfered with because of dangers present from nearby high power transmission lines.

The landowner sought $126,055-damages for relocation of facilities like irrigation channels, and reshaping the land so as to make it more suitable for mechanical harvesting, given the existing high power transmission lines. The District Court denied any award for such new construction. We think such denial was proper, for the landowner has not made these changes although several years have passed.

The landowner contended that it planned to put the balance of the uncleared land into production, and that these plans were frustrated by the presence of high power transmission lines. It seeks damages for this alleged interference. The District Court rejected any award for such frustration of future hopes, finding that there was no concrete evidence of these plans. Moreover, the law is clear that frustration of future business plans is not compensable. United States v. Grand River Dam Authority, 363 U.S. 229, 80 S.Ct. 1134, 4 L.Ed.2d 1186 (1960).

The Commissioners did not state whether their award of $76,227.50 for damages to the residue encompassed an award for redesign and frustration of future plans, or whether it was limited solely to damages incurred through increased difficulties of farming the residue.

We agree with both the District Court and the Commissioners that damage was done to the residue. However, we are of the opinion that the District Court’s award of $9,000 was too low. It did not adequately take into account the interference of the high tension power lines with the operation of the farm, and the depreciation in value of the farm. In our opinion an award of $45,000 for damages to the residue is warranted.

We therefore fix the value of the property condemned in the amount of $64,744.34, for which amount judgment is entered against TVA, together with interest from the date of taking.

      . The easement reads as follows:
      EXHIBIT “A” TO DECLARATION OP TAKING AND TRACT PLAT
      A permanent easement and right-of-way for electric power transmission purposes, consisting of the perpetual right to enter and to erect, maintain, repair, rebuild, operate and patrol one line of poles or transmission line structures with sufficient wires and cables for electric power circuits, and all necessary appurtenances, in, on, over, or across said right-of-way, together with the right to clear said right-of-way and keep the same clear of all trees, brush, buildings, sign boards, stored personal property, and fire hazards, to prevent the drilling or sinking of wells within seventy-five feet of the center line of said right-of-way, and to remove any trees located beyond the limits of said right-of-way which in falling would come within ten feet of any transmission line structure or conductor located thereon, the plaintiff to remain liable for any direct physical damage to the land, crops, fences and roads, resulting directly from the operations of the construction and maintenance forces of plaintiff in and about the erection and maintenance thereof, all upon, under, over, and across the following described land : (Description omitted)

      . 16 U.S.O. § 831x states in relevant part: Either or both parties may. file exceptions to the award of said commissioners within twenty days from the date of the filing of said award in court. Exceptions filed to such award shall be heard before three Federal district judges unless the parties, in writing, in person, or by their attorneys, stipulate that the exceptions may be heard before a lesser number of judges. On such hearing such judges shall pass de novo upon the proceedings had before the commissioners, may view the property, and may take additional evi- • dence, Upon such hearings the said judges shall file their own award, fixing therein the value of the property sought to be condemned, regardless of the award previously made by the said commissioners.
      This statute was later amended, but the parties stipulated that they are bound by it because it was in effect at the time of the taking.

      . The relevant portion of statute in effect at the time of the taking, states :

      . In its Memorandum Opinion the District Court stated:
      AVe likewise resolve doubt in favor of defendant with respect to a limitation upon its farming the clear portion of the easement area taken and an area immediately adjacent thereto because of its special method of spraying and possible dangers inherent in this nearby TVA high power line.
      The easement also interferes with the growing of trees in the area of the easement.


author: WILLIAM E. MILLER, Circuit Judge.

text:
    NEWBURG AREA COUNCIL, INC., et al., Plaintiffs-Appellants, v. BOARD OF EDUCATION OF JEFFERSON COUNTY, KENTUCKY, et al., Defendants-Appellees. John L. HAYCRAFT, et al., Plaintiffs-Appellants, v. BOARD OF EDUCATION OF LOUISVILLE, KENTUCKY, et al., Defendants-Appellees.
    Nos. 73-1403, 73-1408.
    United States Court of Appeals, Sixth Circuit.
    Argued Oct. 3, 1973.
    Decided Dec. 28, 1973.

      John A. Fulton, Woodward, Hobson & Fulton, and E. Preston Young, Louisville, Ky., on brief, for Bd. of Ed. of Jefferson County, Kentucky (73-1403).
    Henry A. Triplett, Hogan, Taylor, Denzer & Bennett, Louisville, Ky., on brief, for Bd. of Ed. of Louisville, Ky. (73-1408).
    Robert Allen Sedler, Lexington, Ky., and Thomas L. Hogan, John G. O’Mara, Louisville, Ky., on brief, for Newburg Area Council, Inc., and others (73-1403).
    Darryl T. Owens, Charles J. Lunder-man, Jr., Galen Martin, William Fried-lander, Louisville, Ky., on brief, for John E. Haycraft, and others (73-1408).
    Before PHILLIPS, Chief Judge, and MeCREE and MILLER, Circuit Judges.
   WILLIAM E. MILLER, Circuit Judge.

This is an appeal from a dismissal by the district court of two class actions concerning school desegregation in Jefferson County, Kentucky. In Newburg Area Council, et al., v. Board of Education of Jefferson County, No. 73-1403, the plaintiff challenged certain practices of the Jefferson County School Board with respect to its elementary schools. Later another action, Haycraft, et al., v. Board of Education of Louisville, Kentucky, et al., No. 73-1408, was filed against the Louisville Board of Education and the Jefferson County Board of Education, seeking the desegregation of the Louisville school system with a plan that included disregarding the Louisville and Jefferson County School District boundaries. The two suits were consolidated but the Court directed separate trials as to the status of each district.

The district court dismissed both actions, holding that the Jefferson County School District and the Louisville Independent School District are unitary systems in which all vestiges of state-imposed segregation have been eliminated. The actions have been consolidated for appeal.

We decide three issues on this appeal: (1) Whether the district court erred in holding that the Jefferson County School District is a unitary system in which all vestiges of state-imposed segregation have been eliminated; (2) whether the district court erred in holding that the Louisville Independent School District is a unitary system in which all vestiges of state-imposed desegregation have been eliminated; and (3) whether a federal district court has the power to disregard school district lines within a single county in formulating a school desegregation plan.

The Jefferson County School District embraces all of Jefferson County except that portion included within the Louisville Independent School District and the Anchorage Independent School District. It has close to 96,000 students, approximately 4% of whom are black. 65% of all students are bussed to the schools they attend. The Board operates 74 elementary schools, 5 middle schools, 18 combined junior and senior high schools, and 6 special schools.

Prior to the decision in Brown v. Board of Education of. Topeka, 347 U. S. 483, 74 S.Ct. 686, 98 L.Ed. 873 (1954), the Board maintained a racially-segregated school system in accordance with the requirements of Kentucky law. It did not provide a high school for black students and arranged for their attendance at Central High School, the black high school operated by the Louisville Board of Education. It operated the Newburg Elementary school, grades 1-9. Newburg was located in the one area in the county outside of Louisville having any substantial black population. It was a pr e-Brown black school, and has remained black until the present day. Newburg is surrounded by a number of all-white or virtually all-white elementary schools. Within a distance of three miles from Newburg, there are, in addition to Price Elementary School, which will be discussed subsequently, nine substantially white elementary schools.

In 1969 Price Elementary School was constructed within a mile of Newburg. When Price opened in 1969-70, 33.1% of the students were black. The percentage increased to 40.2% during 1970-71, to 43.9% during 1971-72, and now stands at 54.3%. It is practically an all walk-in school, with about 3% only of the pupils being bussed.

Cane Run Elementary School is located in the northwest portion of the District close to the Louisville city limits. In 1966-67 the black student population of Cane Run was 1.2%. In 1967-68 it increased to 6.2%, in 1968-69 it increased to 11.5%, in 1969-70 it increased to 25.5%, in 1970-71 it increased to 36.7% and in 1971-72 to 45.-5%. In 1972-73 it stood at 49%. Cane Run was rebuilt on the same site during 1972.

The evidence shows that Newburg, Price and Cane Run contain 56% of the black elementary students in the Jefferson County School District.

The district court held that the existence of an all black school, Newburg, in the Jefferson County School District was not unconstitutional. The Supreme Court stated in Swann v. Charlotte Mecklenburg School District, 402 U.S. 1, 26, 91 S.Ct. 1267, 1281, 28 L.Ed.2d 554 (1971), that the “existence of some small number of virtually one-race schools within a district is not in and of itself the mark of a system that still practices segregation.”

As this Court noted in Northcross v. Board of Education of Memphis City Schools, 466 F.2d 890, 893 (6th Cir. 1972), this language in Swann is “obviously designed to insure that tolerances are allowed for practical problems of desegregation where an otherwise effective plan for dismantlement of the school system has been adopted.” The Jefferson County School District thus has three elementary schools that either are or are rapidly becoming “racially identifiable.” As stated, Newburg School, a pr e-Brown black school, is racially identifiable, while Price and Cane Run Schools are rapidly becoming racially identifiable as black schools. The duty of the school board is to “eliminate from the public schools all vestiges of state-imposed segregation.” Swann, supra, 402 U.S. at 15, 91 S.Ct. at 1275. Until the dual system is eliminated “root and branch,” Green v. County School Board of New Kent County, 391 U.S. 430, 88 S.Ct. 1689, 20 L.Ed.2d 716 (1968), the school district has not conformed to the constitutional standard set forth by Brown nearly 19 years ago.

The Board urges that “white flight,” not school board policies, has been responsible for the shift in the racial composition of the Price and Cane Run Schools. The district court found that the attendance zone for Cane Run had remained constant over the years and that as blacks moved into the attendance area, the school would naturally become “blacker,” particularly since whites would “flee.” Although the decisions with respect to Cane Run attendance zone and the rebuilding of Cane Run on the same site, considered alone, might not compel the conclusion that the Board fostered segregation here, its decisions with respect to Cane Run must be related to the circumstances surrounding the Newburg and Price Schools.

The evidence shows that in 1969-70 Price opened with an enrollment of 560 and a capacity of 756. Newburg, with a capacity of 1242 had an enrollment of 620. Although these schools were underutilized, several “racially identifiable” white schools were operating with enrollments greater than capacity using either portable classrooms or operating double shifts. During the 1972-73 school year Newburg’s enrollment had declined to 340, and Price’s had declined to 620, while some of the nearby "white” schools were operating over capacity. The district judge found no significance in the under utilization of neai’by white schools. Instead he found that the Board was trying to achieve integration in assigning some black students in the area to nearby white schools without determining why white students in the area were not assigned into Newburg and Price. All vestiges of state-imposed segregation have not been eliminated so long as Newburg remains an all black school. Where a school district has not yet fully converted to a unitary system, the validity of its actions must be judged according to whether they hinder or further the process of school desegregation. The School Board is required to take affirmative action not only to eliminate the effects of the past but also to bar future' discrimination. Green, supra, 391 U.S. 438 n. 4, 88 S.Ct. 1689; Robinson v. Shelby County Board of Education, 442 F.2d 255, 258 (6th Cir. 1971). Since the Jefferson County Board has not eliminated all vestiges of state-imposed segregation from the system, it had the affirmative responsibility to see that no other school in addition to New-burg would become a racially identifiable black school. It could not be “neutral” with respect to student assignments at Price or Cane Run. It was required to insure that neither school would become racially identifiable.

A school system that has had a history of state-imposed segregation has not fully converted to a unitary system when 56% of all of its black elementary students attend three out of seventy-four elementary schools. This is particularly so when these schools are surrounded by several all-white-or virtually all-white schools.

The Louisville School District is an independent school district established in accordance with the requirements of Kentucky Revised Statutes 160.160, which provides for independent school districts within a county. It is situated within the City of Louisville, a city of the first-class in Jefferson County, Kentucky, but its boundaries are not coterminous with the political boundaries of the City of Louisville. Approximately 10,000 children, mostly white, live between the boundaries of the Louisville School District and the outer boundaries of the City of Louisville. The total enrollment of the Louisville School District at the commencement of the 1972-73 school year was 45,570 pupils, of whom 22,367 were white, and 22,933 were black. The trend is definitely toward “white flight.” During the 1956-57 school year, there were 45,841 children enrolled of which 12,010 were black and 33,831 were white. Thus, from 1956 to the present time, the white enrollment has decreased by approximately 11,000 pupils, and the black enrollment has . increased by the same number.

Prior to the decision in Brown v. Board of Education of Topeka, 347 U.S. 483, 74 S.Ct. 686, 98 L.Ed. 873 (1954), the Louisville Board of Education operated a racially-segregated school system in accordance with the requirements of Kentucky law. The, Board put a plan of pupil desegregation into operation at the commencement of the 1956-7 school year. The plan consisted of geographic attendance zones with an open transfer provision. Parents were sent forms to indicate a first, second, and third choice of transfer school. In the absence of a parental transfer request, the pupils were required to attend schools within their assigned zones.

At the commencement of the 1972-73 school year, the Board was operating six academic high schools, thirteen junior high schools, and forty-six elementary schools. Three of the six academic senior high schools, Central, Male and Shawnee, have between 94% and 100% black students. Central was a pre-Brown black school. Male and Shawnee were pr e-Brown white schools. Two of the senior high schools, Atherton and Iroquois, have 97% and 99% white students. The sixth school, Manual, which shares a common attendance zone with Central and Male, has 40% black students. Atherton and Manual were pre-Brown, white schools, and Iroquois was constructed after 1956.

There are thirteen junior high schools. Five of them, DuValle, Mey-zeek, Parkland, Russell, and Shawnee, have between 95% and 100% black students. Four of them, Barrett, Gotts-ehalk, Highland and Southern, have between 94% and 99.5% white students. The remaining four, Manly, Manual, Western and Woerner, have between 25% and 64% black students. DuValle, Meyzeek and Russell were pr e-Brown black schools; Parkland, Shawnee, Bartlett, Highland, Southern, Manly, Manual, Western and Woerner, were pre-Brown white schools. Gottschalk was constructed after 1956.

There are forty-six elementary schools. Nineteen have between 82% and 100% black students. Twenty-one have between 89% and 100% white students. The remaining six have between 16% and 55% black students. The twenty-one schools that have between 89% and 100% white students, were pr e-Brown white schools.

A large number of racially identifiable schools in a school district that formerly practiced segregation by law gives rise to a presumption that all vestiges of state-imposed segregation have not been eliminated. Swann, supra. This shifts the burden to the School Board to prove that the racially-identifiable character of the schools is not in any way the product of past or present discriminatory conduct on its part. Northcross v. Board of Education of the Memphis City Schools, 466 F.2d 890 (6th Cir. 1972). In Northcross this Court said:

“It is the defendant School Board’s contention that notwithstanding the fact that some 79% of its schools have an essentially monolithic racial structure it has satisfactorily cured the violation of law involved in its past de jure segregation and has, in fact, established a unitary school system. We cannot accept this contention.”

Id at 893.

Although we are cognizant of the Board’s caveat against playing the “numbers game,” statistics do provide an invaluable source of information for analysis and comparison. The evidence indicates that over 80% of the schools in Louisville are racially identifiable. As in Northcross, the effectiveness of the Board’s purported desegregation “can be gauged by a quick look at the vital statistics of the (school) system as it now exists.” Id. at 892. An examination of these statistics establishes that five out of the six academic senior high schools, nine out of the thirteen junior high schools and forty out of the forty-six elementary schools are racially identifiable schools. As previously mentioned, fifty-six of the sixty-five academic senior high schools, junior high schools and elementary schools currently operated by the Board were in operation prior to Brown as legally-segregated schools. Thirty-five of these fifty-six schools have never changed their racial composition. Regardless of any explanation for the racial composition of any of the other schools in the system, the thirty-five pr e-Brown schools that have retained their pr e-Brown racial identification to the present day stand out as clear vestiges of state-imposed segregation. The 'Board must show that the racial composition of these schools is not the result of past discriminatory action on its part. Swann v. Charlotte-Mecklenburg Board of Education, supra, 402 U.S. at 26, 91 S.Ct. 1267. This it has not done. However, laudable their motives and intentions, the Board’s desegregation plan has not been effective. Motivation is not the controlling factor. Wright v. Council of the City of Emporia, 407 U.S. 451, 92 S.Ct. 2196, 33 L.Ed.2d 51 (1972). The geographic zone assignment or “neighborhood school system” adopted by the Board, as mentioned earlier, was modified by a transfer provision. Since the pr e-Brown white schools were generally in white residential areas and the pre-Brown black schools were generally in black residential areas, geographic zoning would cause these schools to retain their former racial identification. The transfer provision would enable whites who were assigned to pre-Broum black schools to transfer out. It also enabled blacks who were apprehensive about going to pr e-Brown white schools to return to the black schools with which they were familiar.

The Board urges that changing residential patterns in the Louisville School District has contributed to the continued existence of racially identifiable schools. However, population shifts that changed the racial composition of some schools does not affect the Board’s duty to convert fully to a unitary school system. See Kelley v. Metropolitan County Board of Education, 463 F.2d 732, 744 (6th Cir.) cert, denied, 409 U.S. 1001, 93 S.Ct. 322, 34 L.Ed.2d 262 (1972). This duty has never been fully met.

Geographic zoning assignment is not a permissible method for a school board to employ in dismantling the dual system and eliminating all vestiges of state-imposed segregation if it does not work. The measure- of any plan is its effectiveness in accomplishing desegregation. Davis v. Board of School Commissioners of Mobile County, 402 U.S. 33, 37, 91 S.Ct. 1289, 28 L.Ed.2d 577 (1971). Because of the residual effects of past discrimination, the Louisville zoning assignment plan has not been effective despite the good intentions of the school board. As the Supreme Court stated in Swann:

“All things being equal, with no history of discrimination, it might well be desirable to assign pupils to schools nearest their homes. But all things are not equal in a system that has been deliberately constructed and maintained to enforce racial segregation. ...” 402 U.S. at 28, 91 S.Ct. at 1282.

For the reasons mentioned, we find that the district court erred in holding that the Louisville Independent School District is a unitary system in which all vestiges of state-enforced discrimination have been eliminated.

Intervening plaintiffs, black and white citizen parents, filed complaints seeking desegregation of the Louisville Independent School System, and as part of the desegregation they sought the merger of the Louisville system with the Jefferson County School District and the Anchorage Independent School District, to insure complete desegregation of the entire county. The district court in dismissing the action against Anchorage, stated:

“Prior to the trial hereof, we entered certain threshold orders, to the effect that this Court lacked the judicial power to order a crossing of political boundaries as between the Jefferson County, Louisville and Anchorage Schools Districts, and, since the Anchorage School District (a very small school district located in the northeast portion of the county) was totally white, the Court, by final order with respect thereto [dismissed the action as to Anchorage].

The court below relied on Bradley v. School Board, City of Richmond, 462 F. 2d 1058 (4th Cir. 1972), (aff’d sub nom., 412 U.S. 92, 93 S.Ct. 1952, 36 L.Ed.2d 771 (1973) by an equally divided court), in holding that the court had no judicial power to cross political boundaries in this case. The court’s reliance on Richmond was misplaced. In Bradley v. Milliken, 484 F.2d 215 (6th Cir. 1973), cert, granted, 414 U.S. 1038, 94 S.Ct. 538, 38 L.Ed.2d 329 (1973), this Court held that a federal court is not restrained by state-created political boundaries in formulating a constitutionally acceptable desegregation plan. The present case is clearly distinguishable from Richmond. In Richmond, the rejected desegregation plan involved consolidation of three school systems, even though each district was' a unitary system. In the present case, both the Louisville Independent School District and the Jefferson County School District are not operating unitary school systems. Milliken involved the power of district courts to disregard state-created school district lines in order to achieve a unitary system in Detroit.

There is nothing so sacrosanct about the school district lines in this case that they may be permitted to curtail the broad equity powers of the federal court in implementing a mandate of the federal Constitution. If it were otherwise the supremacy clause of our fundamental charter would be a dead letter and we would revert to the “state sovereignty” principle of the long discarded Articles of Confederation. The school district lines have been disregarded in the past in conforming to state-enforced segregation. For example, in pre-Brown days, black high school students in the Jefferson County system attended Louisville’s Central High School on a tuition basis.

The crossing of school district lines in this case involves only a single county, the basic educational unit in Kentucky. Where there are separate school districts in a single county and the districts are not unitary systems, a federal district court may fashion an appropriate remedy without being constrained by school district lines created by state law. .Cf. Wright v. Council of City of Emporia, 407 U.S. 451, 92 S.Ct. 2196, 33 L.Ed.2d 51 (1972); United States v. Scotland City Board of Education, 407 U.S. 484, 92 S.Ct. 2214, 33 L. Ed.2d 75 (1972); Lee v. Macon County Board of Education, 448 F.2d 746 (5th Cir. 1971).

For the reasons stated herein, the judgments of the district court are reversed. The case is remanded to the district court for proceedings to formulate a desegregation plan for all school districts in Jefferson County, Kentucky. The district court should join all necessary parties including the previously dismissed Anchorage Independent School District. By whatever means the district court deems appropriate in the exercise of its equity powers, see Brown v. Board of Education, 349 U.S. 294, 75 S.Ct. 753, 99 L.Ed. 1083 (1955), all vestiges of state-imposed segregation must be eliminated within each school district in the county. To accomplish such purpose, state-created school district lines shall impose no barrier. We do not require use of any particular method nor approve in advance the use of any particular device. Any plan of desegregation is to be effective for the 1974-75 academic year.

      . The Anchorage School District is a very small school district operating only one elementary school located in the southeast portion of Jefferson County. It is an all-white enclave. The plaintiffs in the Haycraft case sought to join the Anchorage School District and its Superintendent as parties defendant. When the district court ruled in a pretrial order that it did not have the power to cross school district lines, it dismissed the proceedings against the Anchorage District and its Superintendent. As we point out later, the Anchorage District must be rejoined in the action.

      . An independent school district’s boundaries do not expand with the boundaries of the city by which it is embraced. Annexation for educational purposes must be considered independently of annexation for the expansion of the city. Thomas v. Spragens, 308 Ky. 97, 213 S.W.2d 452 (1948).

      . In addition the Board operates two vocational schools, a residential manpower center in Shelby County, Kentucky, and a three-level school for gifted children.

      . The pattern of school construction and site selection since Brown has closely followed the “neighborhood school” concept. However, of the nine new schools constructed since Brown six were racially identifiable with respect to student composition upon opening.