Jury finds yearbook giant liable
Jostens ordered to pay $25.5 million
TEXAS — A Sherman jury found Jostens, the yearbook publishing giant, liable for anticompetitive practices in May.
The jury ordered Jostens to pay Taylor Publishing, a direct competitor, $25.5 million in damages and fees. The award includes $8 million for attempting to monopolize, $500,000 for illegal price discrimination, and $4.25 million in compensatory and punitive damages on other counts, plus attorneys1 fees.
The jury found that Jostens, in an attempt to monopolize the yearbook industry, pressured Taylor sales representatives stationed across the country into leaving their jobs in order to work for Jostens. The jury also found that Jostens had offered extremely low estimates to high schools and colleges — a predatory pricing tactic designed to pull long-held contracts away from Taylor.
David Aronowitz, a Taylor attorney, said company executives began noticing “aggressive and cut-throat behavior” in late 1995. Then Taylor received an audio cassette tape containing an internal speech given by Jack Thornton, Jostens yearbook chief, informing his company’s sales force that the time had come to force Taylor out of business.
“At first we dismissed it,” Aronowitz said. “But then we realized that with half of the U.S. market share, they could put us out of business if they really wanted to.”
On another tape, Thornton was heard imitating Martin Luther King Jr. “I have a dream,” Thornton said on the tape, “that in three to five years, Jostens Printing and Publishing will be the only national yearbook company in the industry.”
Kevin Whalen, Jostens vice president of communications, said that the taped speeches should not be taken out of context. They were designed only to “get the sales force energized, to psyche them up,” and should not be viewed as a literal depiction of how Jostens does business, he said.
But according to Taylor’s filed complaint, such activity is exactly the type of practice that indicates intent to drive others out of business. The jury agreed with Taylor on the monopolization claims, but declined to find Jostens liable for interfering with contracts between Taylor and its customers.
Jostens denies that it engaged in predatory or anticompetitive conduct and is planning to appeal. Whalen said the jury verdict was a knee-jerk response to the contradictory nature of the industry.
“The verdict was based on something emotional rather than on the law,” he said.
“People see the yearbook sitting on the shelf, and don’t really think about the business that takes place behind it. People are really shocked to find out that it’s a pretty competitive environment, which makes practices that might be normal in other industries seem outrageous.”
Many educators said they believe that this decision could actually have a positive effect among journalism educators.
“I don’t think advisers, especially those just starting out, realize how important it is to be business savvy when dealing with sales representatives — and that goes for any company, not just Jostens,” said Ann Thorne, chairperson for the College Media Advisers Yearbook Committee. “The things that came out in the trial may inspire advisers to draft their own contracts rather than accept the fine print.”
Thorne’s student staff at Missouri Western State College has used Jostens for almost a decade and has not had any problems.
Plaintiff Taylor Publishing Co., a unit of Insilco Corp. of Dublin, Ohio, controls roughly 20 percent of the market share, second only to the Minneapolis-based Jostens, which controls 50 percent.
Fall 1998, reports