Hal Shuster saw this and was livid, according to Levas. The part that most incensed Shuster was the use of the word “sickie,” which he took as a reference to his father. Irwin Shuster used a wheelchair, and his sons were sensitive about anything that seemed to be making fun of this.
“That’s certainly not cool to have written that, but that was Phil, impetuous and headstrong,” Levas said. She thinks the newsletter, as much as any business disagreement, is what made the conflict escalate into what would turn into a legal quagmire.
On October 2, 1978, Irjax Enterprises filed suit in Maryland federal court against Seuling and just about every major comics publisher, accusing them of violating antitrust laws. At its heart, the case was about how Seuling and Sea Gate had more favorable terms with publishers than Irjax did. The most glaring example may have been the way Seuling could get his customers’ orders collated and shipped directly from the printer, which meant his clients received items sooner than his competitors’ clients did.
What Irjax was doing was audacious. The company was a small business, and it was suing some corporate giants. Among the nine defendants were Warner Communications Inc., the parent company of DC, and Cadence Industries Corp., the parent of Marvel. Other retailers and distributors had talked about suing Seuling and the publishers, but only Irjax was willing to take the risk to its finances and reputation.
In the lawsuit, Irjax claimed that the defendants “have engaged in an unlawful combination and conspiracy in restraint of interstate trade and commerce” and have “endeavored to force Irjax out of business of wholesale distribution of comics books and related items.”
Along with the antitrust claim, Irjax also made a libel claim against Seuling for the comments in the newsletter. The court filing says Seuling’s letter had been mailed to many of Irjax’s customers, contained statements that Seuling knew were untrue, and was “clearly intended to, and did, hold plaintiffs up to contempt and ridicule.”
Two months later, in an amended complaint, Irjax provided some additional details about how all the defendants fit into the larger comics business. The filing said that Marvel accounted for 70 percent to 75 percent of sales to comic shops; DC was 20 percent to 25 percent of sales; and Warren Publishing, known for Vampirella and other horror titles, had 4 percent. Marvel was dominating the industry, while DC, the former industry leader, was struggling. Warren would go out of business a few years later.
Seuling was not the type to walk away from a fight. He responded to the lawsuit by denying the allegations and then making claims of his own against Irjax and the publishers. He also added a claim against Big Rapids Distribution of Detroit, a company that had not been named in the Irjax lawsuit but was a competitor of Seuling’s. His argument, in essence, was that Irjax and Big Rapids were the ones getting favorable terms of service from the publishers.
From there, many lawyers expended many billable hours. Filings piled up at U.S. District Court in Baltimore. Beyond the nuts and bolts of the case itself, the publishers came to the realization that distribution to comic shops was becoming a big business, and it needed to be handled in a more organized way. No more handshake deals. From then on, Marvel and DC would seek to have uniform terms of service.15
By the summer of 1979, less than a year after the Irjax complaint had been filed, the major issues had been resolved in a series of settlements. The upshot for Seuling was that he would no longer receive terms of service that were different from what other distributors got. His time as king of the business was waning. Meanwhile, the number of comic shops continued to grow. Irjax, Big Rapids, and others had a wide-open playing field in which to sign up customers, leading to the next era, one marked by chaotic competition, rapid rises, and even more rapid falls.
This was about the time that the “direct market” stopped being quite so direct. The term had come from the fact that Seuling’s retailer customers were getting orders shipped directly from the printers, bypassing news distributors. In part because of the lawsuit, the system shifted to one in which comics distributors set up warehouses to receive material from printers, collate it, and then ship it. This was still better than the old system with news distributors, retailers said, but the straight line from printers to stores was gone.
It would be easy to say the Irjax lawsuit is what knocked Seuling from the top of the industry, but there were many other factors. Among them was that Seuling and Sea Gate continued to require prepayment and other terms that made it difficult for customers. And now some comic shops had been around long enough and become large enough that their owners felt comfortable making their case for change.
Among the outspoken retailers was Chuck Rozanski. He had gained a national profile in the industry for having acquired the Edgar Church collection, one of the largest and best-preserved troves of Golden Age comic books that had ever changed hands. He gradually sold the collection and used the proceeds to build Mile High Comics into what remains one of the country’s largest mail-order dealers of back-issue comics.
In the spring of 1979, while the Seuling-Irjax lawsuit was still active, Rozanski decided to write Marvel Comics to raise his concerns about the ways that the comics market was falling short of its potential. The letter was sent to Robert Maiello, Marvel’s manager of sales administration.
Chuck Rozanski in his original Boulder, Colorado, store in the late 1970s. Courtesy of Chuck Rozanski.
Here it is in its entirety:16
Dear Mr. Maiello:
My name is Charles Rozanski, and I own Mile High Comics. I am one of the largest comic book retailers in America (sales 1979 about $400,000), and thus a customer of yours. I am also a small advertiser in your comic books. This letter is an attempt on my part to bring to your attention some suggestions which I believe will be relevant, if your job truly encompasses sales and promotion.
To begin with, I have been an active retailer of your products for over four years. Starting with no more than 15 of any comic title, I am now purchasing over 10,000 Marvel comics a month on a nonreturnable basis. I get these books through Seagate Distributing (Jonni Levas, Phil Seuling). It is my latest order with them that has especially prompted this letter.
My order (of which a photocopy is enclosed) for your products is just under $4,000 for this month. These are books that will arrive between June 10 and July 10. Under your existing policies you have just lost at least $1,000 in sales. The reason: After putting my order together I cut my list to the bone in order not to have to lay out any more up-front cash than was absolutely necessary during May, a slower month for my business. So, we both lose: you lose my business, and I lose those sales that I could have gotten by having a reserve instead of ordering just barely enough for my guaranteed sales.
Why is this foolishness still necessary? In November of last year an “outside consultant” who supposedly was representing Cadence Industries / Marvel Comics approached us about direct contact with your office and the possibility of some mutually beneficial programs. He told us he would get back to us in December. We have heard nothing. Did you send out a representative? If so, did he present you with a breakdown of what is happening? I am going to take your silence of the past six months as evidence that either the “consultant” in question did not really work for you or else did his job very poorly. Or, there is one other possibility. Did he tell you that you would be better off without us? Is this why rumors of a lawsuit on predatory pricing are circulating? For your sake and mine, I hope not.
Whatever the case may be, I think it is about time you heard from a retailer directly. Ours is a dying industry and if we don’t get together and cooperate there will be no comic books at all. If you don’t believe me, check with John Goldwater, the president of the Comic Magazine Association of America. According to him, circulation from 1959 to 1978 dropped from 600,000,000 to 250,000,000. This alone should be enough for your office to be highly interested in actively seeking to expand our business as much as possible.
Well this has not been the case. The policies currently in force are restricting severely the ability of comic book retailers to grow or even in some cases