Petition for Writ of Certiorari — Mikulec Industries, Inc. v. ICI Americas, Inc.

\

(t) —

\ Supreme Court, U.S.

88-1113 4 Freep

DEC 31 1988

No. JOSEPH F. SPANIOL, JR.

GER

IN THE

Supreme Court of the United States

October Term, 1988

MIKULEC INDUSTRIES, INC.,

Petitioner,

VS.

ICI AMERICAS, INC.,

Respondent.

ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES

CouRT OF APPEALS FOR THE SECOND CIRCUIT.

PETITION FOR WRIT OF CERTIORARI

ARNOLD WEISS, Esq.

Designated Counsel of Record

Attorney for Petitioner

1400 Main Place Tower

Buffalo, New York 14202

Telephone: (716) 852-7587

Batavia Times Publishing Co. fx.

Batavia, N.Y. (716) 344-2000

i.

Questions Presented for Review

1. Can contractor flout “Buy American” Act [41 USC

10a-c], and USAF MilSpec Test Standards, by supplying

imported and untested Halon 1211 for USAF fire

extinguisher contract?

2. Can MILSPEC-B-38741 (USAF) typographical error

which set Halon moisture limit at 200 ppm, instead of 20

ppm, knowingly be used by ICI to supply defective

Halon for the United States Air Force?

3. Did Second Circuit—contradict its prior decisions on

the standard of “direct proof’’ in product defect

cases—and depart from ‘“‘Normal course of justice’’, in

holding that proof of excess moisture in ICI

Halon—from: actual corrosion and rust taken from ICI

sealed Tanks; ICI Lab Book entries of excess moisture;

ICI Officials’ admissions; ICI failure to make MilSpec

Moisture Tests; and impartial Air Force and other

witnesses—was not ‘‘direct proof’; and, in imposing the

impossible burden of eliminating “every other possible

source’ of moisture?

4. Did FRCP 26 & 27 entitle Plaintiff to survive

directed verdict motion, where Discovery responses

suppressed damaging ICI Lab Book data of excess

water, and ICI letter disclosing serious MilSpec error?

5. Is Sherman Act claim for abuse of 100% monopoly of

Halon 1211 ‘‘waived” by deferring it in a FRCP 42(b)

bifurcation?

6. Did “Speedy Trial’ Act [18 USC 3161], and criminal

trial pressure, cause denial of due process in this civil

action?

List of Parties

ICI Americas, Inc. (“ICI”), a subsidiary of Imperial

Chemicals International, PLC, the world’s largest

chemical firm, and a major supplier to the US Defense

Department, was Defendant in the District Court, and

Appellee in the Court of Appeals.

Mikulec Industries, Inc. (‘“‘Mikulec’”’), Plaintiff in the

District Court, and Appellant in the Court of Appeals, is

in Chapter 11 Reorganization (USBC:WDNY, 83-12354-

M) as a result of ICI’s wrongful actions (App. 9a, 12a).

iii.

TABLE OF CONTENTS.

Page

Questions Presented for Review................... i

ee a ss i eWeek ee da ee’ ii

Te eWeek tebaseseve iii

Table of Appendices to Petition .................. v

Neen ek ees eben eeaas vi

ESE ee 1

Jurisdictional Statement... .......cccccccccccces 2

Constitutional Provisions, Statutes, Rules

rr 3

ED LO, oe a 5

Summary of the “Direct Proof’ of ICI’s

Bie wou a bo 4604 dha 6 446-6 00 00 5

The Indisputable ‘“‘“Smoking Guns’”’............ Q

ICI’s Unanswerable ‘‘Omissions’”’............. 10

ICI’s Fault was Corroborated by

Independent Witnesses...................... 12

The Basis for Federal Jurisdiction in

Ne vanaeedéaa 13

Reasons for Allowance of Writ of Certiorari........ 14

I. The Second Circuit ignored its prior

decisions on “Direct Proof” in defective product

RE ORS ES a a a ee 14

II. ICI was allowed to flout the ‘Buy

American” Act, the USAF MilSpecs and

i od, ah va wd ones anes ee 16

A. The “Buy American” Act ............ 16

B. The MilSpec Test Method ............ 16

C. The MilSpec Tank Inspection

ReGPOGRONE 6 ook ik cc cece st accsecesoesens 18

D. ICI’s “Certificates of Analysis”

and Bills of Lading were fraudulent ......... 19

III. Defendant was allowed to benefit from

its suppression of damaging evidence on

er err! rere Terr 20

A. Suppression of the MilSpec Error...... 20

B. Suppression of Moisture and Lab

8 GE ey re rn er: eee 21

C. Defendant was allowed to _ benefit

from its suppression ..............---eeee- 23

D. Plaintiff should have received a

Pe IE Soo bednis bs Kdneewonnscoedas 23

IV. Sherman Act claim for abusing 100%

monopoly could not be “waived” by deferring it

in an FRCP 42(b) bifurcation ................ 24

V. Petitioner was denied a ‘due process”

PPPS ET ee Pe TE Tr ery eee 26

ne aa hae ek se eda wee weees 29

Page

TABLE OF APPENDICES TO PETITION.

Appendix A—Order of the United States Court of

Appeals for the Second Circuit, dated and filed

October 3, 1988 (unreported), denying rehearing . .

Appendix B—Opinion of the United States Court of

Appeals for the Second Circuit, dated and filed

July 6, 1988, affirming the District Court’s

GOUT GE I iio. 6 6 keh knaecdndcnceess

Appendix C—Order and Final Judgment of the

United States District Court for the Western

District of New York, per Elfvin, J., dated and

entered December 31, 1987 (unreported),

OE Tee ere ore

la

3a

7a

Appendix D—Order and Opinion of the United .

States District Court for the Western District of

New York, per Elfvin, J., dated and filed

December 30, 1986, directing a verdict of

RRR RA CFRRIE Sa RM Ai Re tarsi riaNin arp eET gs MEN

Appendix E—Text of Constitution, Statutes, Rules

and MilSpec Provisions Involved...............

Appendix F—Excerpts of Trial Exhibit ............

Appendix G—Excerpts of Trial Testimony .........

vi.

Page

TABLE OF AUTHORITIES.

Cases:

Ajax Hardware Mfg. Co. v. Industrial Plants Corp.,

(CARs SORT OD Bre Be wis bo is wes 66 ese ch tee 14,15

Antilles S.S. Co. v. Members of American Hull Ins.

Syn., (CA 2; 1964).773 F2d 196 ......... 0.0000. 15

Arnold v. Eastern Airlines (Ca 4, in Barc, 1983) 712

F2d 899, cert. den. (1984) 464 US 1040.......... 25

Blue Ribbon Ice Cream Co. v. Banner Roofing Co.,

(AD 2; 1963) 18 AD2d 1074, 239 NYS2d 574..... 15

Franklin Music Co. v. American Broadcasting Co.

AR: Di, SO re eo in ha O eM a olde cies 25

Garber v. Randell (CA2, 1973) 477 F2d 711........ 25

Huddell v. Levin, (CA 3; 1976) 537 F2d 726........ 14

Lyon v. Mutual Benefit H & A Ass., (1939) 305 US

GEE, WE: GU, Se EE 0 6 a 6:4. 0 bec eaknesenssen 14

Meyers v. Selznick Company, (CA2; 1966) 373 F2d

PP Pe ry rr eee 14,15

Necaise v. Chrysler Corp., (CA 5; 1964) 335 F2d

UE v0 004060 008048606660) 0000 60s wee 15

Painton & Co. v. Bourns, Inc., (CA 2; 1971) 442

Pee RD cn vsnvecn cei ea bnse edie saceeaurses 15

Simler v. Conner, (1963) 372 US 221.............. 14

Simpson Timber Co. v. Palmberg Const. Co. (CAQ9 :

2 Fok, SE ee eer ee 23

Gan w. UT... CEG BUD Ue OO ov cwevinasida vacances 14

Stewart v. Ford Motor, (CA:DC; 1977) 553 F2d

rere pera er cr 14,15

Treat Mfg. Co. v. Standard Steel Co., (1895) 157 US

_.. Peer re rey 6 46000.00:640046 60408 casa wer ea 14

U.S. ex rel. Roman v. Schlesinger (DC NY : 1975)

O64 F Bem. FE occ ccecicevececeensaeevstans 23

vii.

Page

Westinghouse Electric Corp. v. Garrett Corp. (DC

Md: 1977) 437 F.Supp. 1301, aff’d (CA 4 : 1978)

ES in cb le shies pawn haeeese 23

Wichmann v. United Disposal, Inc. (CA 8, 1977) 553

PG La tau Saws bo ib eee b eh ab eee ee eee 25

Statutes:

Buy American Act, 41 USC l0a-c ............. 3,16,26

Sherman Anti-Trust Act, §§1 and 2.............. 3,13

Speedy Trial Act, 18 USC $3161, et seg............ 26

28 USCA:

creche adc baveese de kskapewseKes 14,26

OG re ee 2

ee a es ae 2

RNR ar rhe es Oe eee a 2

Rules:

Federal Rules of Civil Procedure:

ee ee cea beans stdaneewa 25

a ce ace Oe 3

es ccs eae pekasesekesaewan 3

ie Le xs beeae ek eetwcuae we 3

TT ccc enseaceneaceussaneas 4

aa. cn beat cease cecuawes 14

ee nce benwaseanve 4,24,25

Federal Rules of Evidence:

rid nse ved eenceaeeesaeesue 4

a ae i dua anes eda wdaen 4

ee eos oe lens ec ee han sen ekees 4

Page

Constitution:

Be BORER. og gcccccssccccctocscasenes 4

ee | rarer 4,26

Amendment Article XIV, Section 1............... 4

MilSpecs:

MilSpec-B-38741 ........ 06 cee cece cece rece eees 3,16

ie wh cehe Oa seen se nee ee eeaa 3

ee. ie be ceneues sss enenbeewen eee 3

No.

IN THE

Supreme Court of the United States

October Term, 1988

MIKULEC INDUSTRIES, INC.,

Petitioner,

vs.

ICI AMERICAS, INC.,

Respondent.

ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES

CourRT OF APPEALS FOR THE SECOND CIRCUIT.

PETITION FOR WRIT OF CERTIORARI

OPINIONS BELOW

There are no official or unofficial reports of any

Opinions delivered in the Courts below.

The Opinion and Judgment of the District Court, the

Opinion and Order of Affirmance of the Court of Appeals

for the Second Circuit, and the Order of said Court

denying re-hearing, are printed as Appendices A through

D, and are listed under the Table of Appendices at page

Vv, supra.

2

JURISDICTIONAL STATEMENT

The grounds on which the jurisdiction of this Court is

invoked are as follows:

A. The Judgment sought to be reviewed is that of the

United States Court of Appeals for the Second Circuit,

dated July 6, 1988 affirming the Order and Judgment of

the United States District Court for the Western District

of New York entered December 31, 1987 which dismissed

the action.

B. An Order of the United States Court of Appeals

for the Second Circuit denying Rehearing was entered on

October 3, 1988.

C. The Court of Appeals’ mandate was issued on

November 3, 1988 and was entered in the District Court

on November 14, 1988.

D. Jurisdiction is conferred on this Court to review

the Judgment in question by Certiorari by 28 USCA

1254(1), 2106 & 2111.

3

CONSTITUTIONAL PROVISIONS, STATUTES,

RULES AND MiLSPECS INVOLVED

The constitutional provisions, statutes, rules and

MilSpecs involved are lengthy, and are reproduced in fuil

at Appendix E, and cited here by reference:

I. US Military Specifications Involved:

II.

III.

MilSpec-B-38741 (USAF) dated July 30, 1965,

Sections 1, 2, 3, 4, 5 and 6 (Ex. P-18A);

Amendment 1 dated September 25, 1984 to MilSpec-

B-38741 (USAF), amending Sections 2.2, 5.1.1 and

,6.2 (Ex. P-18A);

Amendment 2 dated April 4, 1984 to MilSpec-B-

38741 (USAF), amending Sections 2.2 and 4.4.8.

Statutes Involved:

Buy American Act, 41 USC, §§10(a) and 10(c);

Sherman Anti-Trust Act, 15 USCA §1 & 2;

$1, ‘“Restraints of Trade ...”;

§2, ““Monopolizing Trade ...”’.

Federal Rules of Civil Procedure

Involved:

Rule 26, “‘General Provisions Governing Discovery”;

Subd. (d)(1), ““Supplementation of Responses”;

Subd. (g), “Signing of Discovery Requests,

Responses and Objections”;

Rule 27, “Failure to Make or Cooperate in

Discovery: Sanctions”;

Subd. (b), ‘Failure to Comply with Order’;

4

q2, “Sanctions by Court in Which Action is

Pending’”’.

Rule 42, ‘Consolidation; Separate Trials’;

Subd. (b), “Separate Trials’.

IV. Federal Rules of Evidence:

Rule 801, “‘Definitions’’;

Subd. (d), ‘‘Statements Which are not Hearsay”;

42, ‘‘Admissions by Party-Opponent’”’;

Rule 803, ‘‘Hearsay Exceptions .. .”;

46, “Records of Regularly Conducted Activity”.

V. Constitutional Provisions:

Amended Article V (‘‘Due Process’’);

Amended Article VII (‘Trial by Jury’’);

Amended Article XIV, Section 1 (‘‘Due Process’’).

5

Statement of the Case

Summary of the “‘Direct Proof” of

ICI’s perfidious actions

The irrebuttable proof in this Case—the overwhelming

and unanswerable evidence of ICI’s perfidy in seeking to

evade the MilSpecs, and the “Buy American” Act, by

using deception, and a ‘‘psuedo-monopoly’”’, to ‘‘force”’ the

purchase of its corrosive, untested and imported Halon

1211—“‘cries out’”’ that there has been a “gross departure

from the normal course of judicial proceedings.’’ No

plaintiff’s case ever had more “‘direct’’, unanswerable and

irrebuttable proof!

ICI abused its 100% monopoly of the ‘“USAF' Military

market’’ for domestic (““Made in USA”) Halon 1211, by

falsely holding itself out as the sole source of high

quality, low-ppm’, “‘Made in USA”, Halon 1211 which:

could satisfy the ‘‘Buy American’’ Act; was fully tested

in accordance with the USAF MilSpec’s Test Method;

and, was certified to conform to the MilSpecs 20 ppm’

maximum moisture limit.

These ICI claims were wholly false! ICI had only an

apparent, or “pseudo” monopoly”’.‘ Most of the Halon

ICI supplied to Mikulec was secretly imported from its

‘The United States Air Force (sometimes ‘““USAF’’).

**‘ppm”’ represents ‘‘Parts per Million” by weight.

*The MilSpecs, prior to the April 9, 1984 correction (Exhibit P-18B,

Appendix E, App. 25a), erroneously allowed 200 ppm (0.02%) of

moisture. This was 10 times the actual 20 ppm (0.002%) moisture

limit, and, 130 ppm greater than the 70 ppm corrosion-causing

saturation point (Appendix E, App. 29a).

‘Petitioner did not discover ICI’s clandestine use of untested,

imported Halon 1211, until the end of plaintiff's case, when ICI

accidentally revealed that the Moisture Book, Ex. P-46, which it had

furnished to Mikulec during discovery, was a _ fabrication—a

phantom” book—which had been specially prepared to deceive

Petitioner.

6

U.K.® Plant, then clandestinely dumped into its USA

bulk storage Tanks, and falsely certified to be

‘domestic’, so as to comply with the “Buy American”

Act in Mikulec’s contract.

ICI used this ploy to ‘‘force’’ Mikulec, and other US

Military contractors to buy its inferior, untested,

corrosive and more expensive imported Halon

1211—under the false impression that ICI was the sole

‘“‘domestic”’ source of USA-made Halon 1211, and that

no other Halon could be used.

While ICI also mixed some ‘“‘domestic’’ Halon 1211 in

its bulk storage Tanks, this, as its Plant Manager

admitted, was its inferior 200 ppm moisture content,

untested, ‘‘Military’’ grade, which was 10 times the

MilSpecs 20 ppm moisture limit. ICI’s Lab Books (Exs.

P-36 & P-37), and its ‘‘actual’’ Moisture Books (Exs. P-

38 & P-39) show that ICI’s USA-manufactured Halon

had up to 1,375 ppm of moisture*’—whereas, 70 ppm

causes corrosion which can be deadly to fire

extinguishers—and to all those who rely on them.

ICI did not test this Halon by the MilSpec Test

Method, as required by Mikulec’s Purchase Order. When

the Air Force reported the corrosion problem, ICI

refused to furnish Mikulec with its tests methods, or

with any actual “Certificates of Chemical Analysis” of

the Halon, as required by Mikulec’s contract. Instead,

ICI would only assure Mikulec that its Halon ‘‘conformed”’

to the MilSpecs moisture limit—whatever that

* ICI’'s actual Moisture Books, Exs. P-38 & P-39, revealed for the first

time ICI’s use of ‘‘high ppm” imported ‘‘U.K.’’ Halon—which fact ICI

had denied when asked by Mikulec on its depositions of ICI’s

Officials.

* After correcting its 125 ppm moisture reading by the 10.87

correlation factor, which ICI calibrated to compare the ICI

proprietary test method with the MilSpec Test Method (See:

‘Rosetta Stone Lab Book page, Ex. P-36A; Appendix F, App. 30a).

7

meant—and led Mikulec on a ‘wild goose chase’.

Mikulec sought everywhere for the source of the

corrosion, including: the Air Force’s handling of the

extinguishers, and Mikulec’s own valve test, air

compressor, pump, metal parts, nitrogen, etc.—in all, 41

different possible sources of the corrosion (Ex. P-35). All

the while ICI was assuring Mikulec that its Halon could

not possibly be the problem.

ICI knew it was guilty of not following the MilSpecs

Test Methods and ‘Lot Acceptance’ and ‘Lot

Rejection”’ provisions. Great Lakes Chemical’s Manager

testified that ICI tried to use political pressure with the

Air Force to have the MilSpecs amended to eliminate

these safeguards, and asked Great Lakes to help. Great

Lakes, he testified, deemed the request improper, and

refused to cooperate with ICI’s plan.

These MilSpec safeguards—so distasteful to ICI

that it IGNORED them—would have prevented the

corrosion problem which Mikulec—and the US Air

Force—suffered. The safeguards, which ICI admittedly

NEVER followed, were:

—An inspection of the inside of each of ICI’s recycled

shipping Tanks, after return, and immediately

BEFORE being filling with Halon, to insure that the

Tank is free of “corrosion’’, and, fit for filling with

Halon, and shipment and storage (MilSpec 45.1.1).

—A specific USAF MilSpec Test Method for measuring

the level of moisture in Halon 1211, known as the Karl

Fischer Test, and substituted its own unauthorized

test—which it knew gave its Halon significantiy lower

moisture readings (Appendix F, App. 30a).

—Testing according to MilSpec Test Method, of the

Halon 1211 in 11% of ICI’s Tanks (2 Tanks out of

each “Shipping Lot’’ of 22), AFTER they had been

filled with Halon, to insure that the moisture level in

the Halon was below 20 ppm (MilSpec 44.2-4).

—‘‘Lot Acceptance’”’ and “Lot Rejection” procedures,

which provided for Rejection of the entire Lot of 22

Tanks, if the Halon of either of the 2 Tanks of any Lot

tested over 20 ppm of moisture (MilSpec 44.2-4, & 4.8).

8

ICI thus wrongfully abused and misused its apparent,

100% monopoly position to ‘deceive’ Mikulec into

believing that Mikulec had no other available USAF

source. It thus used its “‘pseudo-monopoly” power to

‘‘force’’ Mikulec to buy its contaminated, imported Halon,

disguised as ‘‘domestic’’ Halon, and to prevent Mikulec

from buying available, cheaper, better and purer Halon

1211 with only 3 ppm of moisture—which openly was

imported from France and Japan by Great Lakes

Chemical and RhonePoulenc (Ex. D-81; Jt. App., p. 283).

Their Halon fully met the MilSpecs, but not the ‘‘Buy

American’”’ Act.

Mikulec used this high quality 3 ppm imported Halon

for its ‘‘commercial’’ extinguishers. It could not use it for

its USAF contract due to ‘‘Buy American” Act—so long

as ICI continued to abuse its ‘“‘pseudo-monopoly”, and

FALSELY claim that it had available a 100% USA-made

Halon 1211 product, which met the MilSpec Test

standards.

Thus, ICI—contrary to U.S. security and economic

interest—forced the purchase of its more expensive

inferior, untested and ‘“non-MilSpec’’ Halon, which it

secretly imported from Britain, by ‘‘Military’’ customers

like Mikulec, on the false claim that it’s Made in the

USA, and was tested by the MilSpec Test Method, and

complied therewith.

ICI apparently was not bothered by the fact that the

Halon was intended for use in Mikulec’s fire

extinguishers, which were designed and intended to

protect USAF Jet aircraft, Pilots and Personnel, during

“hot refueling’’ rapid turnarounds, under severe combat

conditions.

9

The Indisputable ‘‘Smoking Guns”’

Contrary to the Second Circuit’s assertion that there is

“no direct proof’ of ICI’s negligence, the Record is

replete with indisputable “smoking guns’ which

provided overwhelming ‘’direct proof” that the Halon

1211 which ICI supplied for Petitioner’s USAF contract,

was, and that ICI knew it to be, highly corrosive:

A. McDill US Air Force Base found water and

corrosion in ICI Tanks, which it had received

directly from ICI, and which had never been in

Mikulec’s Plant (One of these Tanks was produced

at the trial.)

B. Rust and corrosion from one of these McDill

AFB Tanks was produced at the trial. It was

weighed and chemically converted to water, which

matched ICI’s excess moisture levels.

C. The Halon in ICI’s Storage Tanks had up to 125

ppm of moisture by ICI’s own test method—or up to

1375 ppm by the MilSpecs Test. ICI had been able

to make low (1 ppm) moisture Halon 1211 before it

modified its process, and installed a new large bulk

Storage Tank in the Spring of 1981.

D. ICI suppressed these records (Exs. P-38 & P-

39), during discovery, and, instead furnished

Mikulec with a fabricated Book, P-46, which omitted

this data.

E. ICI concealed from Mikulec that it wrote the

USAF on January 16, 1981 that 200 ppm (0.02%)

MilSpecs moisture level was erroneous, and should

be 20 ppm (0.002%); and, that 70 ppm or more of

moisture causes corrosion.

F. ICI’s Plant Manager, Horlbeck, testified that

ICI had two grades of Halon, and that it supplied

its ‘‘Military’’ customers, such as Mikulec, with the

low-grade 200 ppm Halon, and its ‘commercial’

customers with its better grade 20 ppm Halon

(Appendix G, App. 31a).

10

G. In September, 1982, Mikulec employees

discovered liquid ‘‘gook” and “coffee grounds” in

two of ICI’s sealed Tanks from ICI’s first shipment

to Mikulec. The employees were able to spray a

“brown pattern.”

H. ICI admitted the presence of “contaminated”

Halon and “‘rust’’, after Mikulec returned one of the

Tanks. ICI issued a Credit Memo; but assured

Mikulec that the rust was “nothing to be concerned

about.”

I. In July, 1983, Mikulec employees found water

and corrosion in two more sealed ICI Tanks at

Mikulec’s Plant (These Tanks were produced at the

trial).

ICI’s Unanswerable “‘Omissions”’

These “‘smoking guns’’ were not surprising, since ICI’s

omissions, demonstrated an abject lack of concern for

the US Military Forces by the world’s largest chemical

company, and were further “direct proof’’ that ICI

supplied Petitioner with contaminated, corrosive Halon

1211. These omissions included:

A. ICI did not make the MilSpec mandated pre-

filling inspections of the inside of its Halon 1211

shipping Tanks—to insure they were free from

moisture and corrosion.

B. ICI did not make the MilSpec mandated post-

filling moisture tests of the contents of its Halon

1211 shipping Tanks.

C. ICI did not follow the pre-shipment ‘Lot

Acceptance” and ‘Lot’ Rejection’ procedures

required by the MilSpecs.

D. ICI did not use the MilSpecs Test for moisture,

but, rather, used its own “‘proprietary’’ unauthorized

_test, which it knew read only 1/1lth (9%) of the

MilSpec test reading (Appendix F, App. 30a).

11

E. ICI did not reveal that its method produced

moisture readings of only 1/llth of the USAF

MilSpec Test Method for moisture (Appendix F,

App. 30a).

F. ICI did not supply ‘“domestic’’ Halon 1211

under the ‘Buy American” clause of Petitioner’s

USAF contract, but clandestinely substituted

imported U.K. Halon.

G. ICI did not test the imported Halon 1211 before

it secretly dumped it into the Storage Tanks at its

Plant.

H. ICI did not permit Petitioner to purchase

available low-moisture (3 ppm), and _ cheaper

imported Halon 1211, when ICI could not deliver

conforming domestic Halon.

I. ICI did not make any analyses of the Halon

1211 it shipped to Petitioner, as required by its

contract.

J. ICI did not furnish Petitioner with “Certificates

of ‘Chemical’ Analysis” of each Tank of Halon 1211

shipped to Petitioner, as required by its contract.

K. ICI did not furnish true Certificates of

Analysis, but, rather, fraudulent “Certificates of

Compliance’, which were “rubber-stamped”’ by a

secretary, without any testing, and falsely labeled

“Certificates of Analysis’.

L. ICI did not use the correct 20 ppm MilSpecs

moisture limit, but knowingly used a typographical

error to sell admittedly corrosive 200 ppm Halon

1211 to Petitioner.

M. ICI claims that it made Halon 1211 on what it

called a “continuous” basis, which, it asserted

“exempted”’ it from the MilSpecs. The the MilSpecs

make no provision for ‘‘continuous’’ production, and

do not contain such an “‘exemption’”’.

N. ICI did not test its Storage Tanks prior to

filling its shipping Tanks with Halon for Petitioner.

12

ICI’s Fault was Corroborated by

Independent Witnesses

There was reliable, independent corroboration—by

impartial witnesses and evidence—that ICI was the

source of the excess moisture and corrosion in the Halon.

McDill US Air Force Base Fire Officials found

corrosion in ICI Tanks of Halon 1211 which had been

purchased directly from ICI. The Halon was delivered to

McDill in ICI shipping Tanks which came directly from

ICI’s Plant—and had no contact with Petitioner. McDill

also found corrosion in the fire extinguishers which it re-

filled from these ICI tanks (Exs. P-62-75; Jt. App. pg.

1865; Depositions of McDill Officials Fail & Warhaul, Jt.

App. pgs. 2196-2335; USAF Telexes, Fail Dep. Exs. 14 &

15, Jt. App. pgs. 2204-7).

Further independent corroboration came from impartial

former hourly-rated employees of Mikulec, who had long

since severed their relations with Mikulec. They testified

that they had noticed coffee grounds and brown “gook”’

coming from sealed ICI Tanks in September, 1982. These

Tanks were part of ICI’s first Halon shipment to

Mikulec for its USAF contract. They reported the

‘“‘gook’”’ to their Superior, and together they found the

gook in another Tank. Both Tanks sprayed a brown

pattern on the wall—whereas pure Halon 1211 is clear

and colorless.

When Mikulec returned one of these tanks to ICI in

September, 1982, ICI confirmed the presence of rust, and

issued a credit to Mikulec. This stands as an admission

of the problems ICI was having in producing pure Halon

(See ICI Credit Memo, Exhibit P-21-23, Jt. App. pgs.

1943-1948). In its letter of January 17, 1983 issuing the

credit, ICI admitted that the Halon was ‘“‘contaminated”

(Exhibit P-23).

13

ICI’s suppressed Moisture Books, Exs. P-38 & P-39,

and its fabricated substitute phantom Moisture Book,

Ex. P-46, furnish further irrebuttable corroboration of

ICI’s inability to make Halon 1211 to meet the MilSpec

20 ppm moisture limit.

These suppressed Moisture Books prove that, prior to

the Spring on 1981, when ICI modified its Plant and

process, and installed a new larger bulk Storage Tank,

ICI consistently was able to produce Halon 1211 with

LESS than 1 ppm moisture.

ICI never regained this ability. After the Spring of

1981 ICI produced Halon with 220 ppm to 1,375 ppm of

moisture—which grossly exceeded the MilSpecs (See

Chart of ICI Lab Book and Moisture Book entries, Exs.

P-61H & P-61L). Since ICI could not eliminate the

moisture, it created its own, LOWER reading,

‘Proprietary Test” method in order to reduce the

moisture readings which would result from use of the

MilSpecs Test Method. ICI’s own correlation of the

“ICI” and “US” Tests, showed that ICI’s test method

gave only 9% (1/11th) of the true MilSpec moisture level

(See: Appendix F, App. 30a).

The Basis for Federal Jurisdiction

in the District Court

Petitioner sued ICI in the U.S. District Court for the

Western District of New York, alleging Sherman Act §§1

& 2 monopolization and restraint of the domestic and US

Military market for Halon 1211. Petitioner

also claimed pendente jurisdiction, as well as diversity,

for its additional claims of breach of contract, negligence,

fraud and misrepresentation.

14

REASONS FOR ALLOWANCE OF WRIT

I. The Second Circuit ignored its prior decisions on

“Direct Proof” in defective product cases.

The Second Circuit anomalously held that plaintiff's

unanswerable “direct proof’’ of defendant’s defective

Halon 1211, and its consequent breach of plaintiff's

contract, was ‘not direct proof” of a defective product.

This decision ignored, and was contrary to its prior

decisions on the standard of “direct proof’ in Ajax

Hardware Mfg. Co. v. Industrial Plants Corp., (CA2;

1977) 569 F2d 181, 186; and in Meyers v. Selznick

Company, (CA 2; 1966) 373 F2d 218, 221-4.

The Second Circuit also mistakenly interpreted, and

improperly relied on the Opinion of Judge Wright of the

Court of Appeals for the District of Columbia Circuit in

Stewart v. Ford Motor, (CA:DC; 1977) 553 F2d 130.

By sanctioning the District Court’s dismissal of the

jury, and the direction of a verdict for defendant, despite

plaintiff's overwhelming—and unanswerable—“Direct

Proof’ by multiple ‘smoking guns”, and by defendant’s

unconscionable “‘omissions’”, the Second Circuit affirmed

the denial to plaintiff of due process, and of its right to a

trial by jury, guaranteed by amended Article 7, 28 USC

1861 and FRCP 38(a) (See: Simler v. Conner, (1963) 372

US 221; Huddell v. Levin, (CA 3; 1976) 537 F2d 726).

Petitioner does not claim that there is a ‘‘right”’ to a trial

by jury where there is no evidence (Cf.: Sparf v. U.S.,

(1895) 156 US 99; Treat Mfg. Co. v. Standard Steel Co.,

(1895) 157 US 674; Lyon v. Mutual Benefit H & A Ass.,

(1939) 305 US 484, reh. den. 306 US 667).

Considering, however, the overwhelming evidence in

this case,—directing a verdict was a denial of plaintiff's

right to a jury trial. The “questions of fact’’ were

established: by actual corrosion and rust taken

from ICI sealed Tanks; by ICI’s admissions and

records; by ICI’s Lab Book entries of excess

moisture; by the admissions of its Officials; by

ICI’s failure to make MilSpec moisture Tests; by ICI’s

15

clandestine substitution of untested, ‘imported’ Halon

for “domestic’’, tested Halon required to satisfy the

MilSpecs, and the “Buy American” Act; by ICI’s

suppression of the serious MilSpec error; by ICI’s

perverse decision to utilize the MilSpec error to its

advantage; and by ICI’s abuse of its 100% monopoly by

‘“forcing”’ its inferior grade and contaminated 200 ppm

Halon on its ‘‘U.S. Military”’ customers, such as plaintiff,

and reserving its ‘higher’ grade 20 ppm Halon for its

“commercial” customers (Appendix G, App. 31a).

The “direction of a verdict’’, and the dismissal of the

jury, under such appallingly aggravated circumstances,

was an infringement of plaintiff's constitutional right to

a trial by jury (See: Concurring Opinion, Newman, C.J.,

in Antilles S.S. Co. v. Members of American Hull Ins.

Syn., (CA 2; 1984) 773 F.2d 195, 203-6; Painton & Co. v.

Bourns, Inc., (CA 2; 1971) 442 F2d 216, 233; and, Blue

Ribbon Ice Cream Co. v. Banner Roofing Co., (AD 2;

1963) 18 AD2d 1074, 239 NYS2d 574). Such a right

exists even in ‘‘thin” cases (Necaise v. Chrysler Corp.,

(CA 5; 1964) 335 F2d 562), and, a fortiori, in this

overwhelming case.

Plaintiff finds itself out of Court, and deprived of a

jury, despite all this overwhelming evidence, only because

the Second Circuit changed the “rules of the game’. The

Second Circuit ignored its longstanding decisions on the

standard of ‘‘Direct Proof’ in product deféct cases (Such

as: Ajax Hardware Mfg. Co. v. Industrial Plants Corp.,

supra, and Meyers v. Selznick Company, supra).

It also misinterpreted learned Judge J. Skelly Wright's

comprehensive opinion in Stewart v. Ford Motor Co.,

supra, where Judge Wright emphasized that the burden

to “negative” other possible causes “is not great”’.

Instead, it improperly held that there was “no direct

proof’, and that plaintiff had to negative every other

“possible”’ cause of the corrosion—an impossible burden!

OO

16

II. ICI was allowed to flout the “Buy American” Act,

the USAF MilSpecs and Plaintiff's contract.

A. The “Buy American” Act .

Plaintiff’s fire extinguisher contract with the USAF

was subject to the ‘“‘Buy American’ Act, 41 USCA 10a-

c, and to USAF MilSpecs MIL-B-38741 for Halon 1211

(Ex. D-6, face page, pp. 1, 4 and 22; Jt. App., pp. 2029,

2032 and 2038A-B, Reference No. 31).

Plaintiff's contract with defendant ICI, in turn

incorporated, by reference, plaintiff's Air Force contract

(Ex. P-6, Jt. App., p. 1873). Defendant ICI’s

correspondence and invoices reflected that ICI knew that

the Halon was intended for plaintiff's USAF contract

(Exs. P-7 and 9; Jt. App., pp. 1875-9 and 1886-1913).

Despite Congressional intent in the Buy American Act,

and the stringent MilSpec Test requirements, ICI was

allowed to evade any responsibility for evading its

obligations thereunder. The Court thus allowed ICI to

clandestinely substitute untested imported Halon from

its British plant, while steadfastly maintaining that it

was supplying conforming tested ‘‘domestic’’ Halon.

B. The MilSpec Test Method

ICI claimed that it was “exempt” from the MilSpec

Test requirements because it produced Halon on a

“continuous” basis, and therefore, was not required to

test the Halon tanks before shipping them to plaintiff.

Nowhere do the MilSpecs (Appendix E, App. 25a),

provide for any exemption based upon the ‘‘method”’ of

production. Rather the MilSpecs provide for testing,

sampling and acceptance on a “Lot Acceptance”’ basis.

‘It required ICI to take “not less than two containers”

from each ‘“‘lot of filled containers’ (MilSpec 4.2.3;

Appendix E, App. 26a). Since defendant shipped its

17

Halon in “Lots” of 22 shipping Tanks (Ex. P-9), the

MilSpecs required that not less than two containers of

each lot of 22 be selected for testing.

An ‘Inspection lot” is defined as Halon 1211

‘manufactured as one batch and offered for delivery at

any one time ...’’ (Appendix E, App. 26a).

Defendant admittedly did not sample two Tanks out of

each lot of 22 Tanks which it sent to plaintiff. After the

corrosion problem developed, it experimented with one

such inspection, but did not carry it through.

Instead, defendant’s procedure was to _ inspect

its 250,000-lb. and 125,000-lb. bulk storage Tanks

every few weeks. However, even these readings of

its bulk storage Tanks showed the presence of moisture

grossly in excess of the 20 ppm proper MilSpec level (Ex.

P-61H and 61L; Jt. App., pp. 2011-2026).

Even without applying the 11X (1,100%) calibration

factor which ICI found was necessary to correlate its

‘‘proprietary’’ test method—which read 5.7 ppm for the

same sample that the MilSpec test read 62 ppm of

moisture—ICI’s bulk Tank moisture readings went up to

125 ppm of moisture by ICI’s own unauthorized method.

This was six times the MilSpecs limit, and almost double

the 70 ppm level at which corrosion begins! Applying

ICI’s own correction factor from its own calibration test,

which appears in ICI’s Lab Book (Ex. P-36A; Appendix

F, App. 30a), results in bulk Tank moisture readings of

up to 1,375 ppm, which is sufficient to have water and

hydrochloric acid corrosively sloshing around in the

Tank.

ICI’s claim that it only had to test its large bulk

storage Tanks is not an answer. This procedure violates

the MilSpec Test requirements. Moreover, even the

Halon in the storage Tanks grossly exceeded the 20 ppm

MilSpec limit—by the ICI test method, and without

converting the readings to the 11X higher MilSpec test

calibration (Appendix F, App. 30a).

18

C. The MilSpec Tank Inspection Requirement

Further, ICI admittedly did not inspect the ‘‘interiors’’

of its shipping Tanks before it filled them, as required by

MilSpec 5.1.1 (Ex. P-18A; Appendix E, App. 27a and

28a). This MilSpec provision requires that the Tanks be

inspected internally to insure that they are ‘free from

contamination and are suitable for shipment and

storage’.

The only way for ICI to obtain such assurance would

be by an inspection of the interiors of its shipping Tanks

before it filled them with Halon. ICI admittedly did not

make these inspections before filling its Tanks. Thus,

whatever moisture or corrosion already was in its

shipping Tanks remained there, and was added to the

moisture from the incoming Halon, thereby further

elevating the ppm of moisture in the Halon.

Since ICI’s shipping Tanks were recycled, like glass

pop bottles, they go from customer to customer.

ICI admits that allowing a shipping Tank to stand

with an open valve for any length of time will

introduce sufficient moisture to create corrosion, so

exacting is the hydroscopic and corrosive nature of

Halon 1211.

ICI’s shipping Tanks admittedly were stored outside in

the rain and elements until they were re-filled.

Compounding this, ICI’s shipping Tanks were

manufactured by a company which tested them

hydrostatically—i.e., with water pressure. Plaintiff

showed on the trial that it is impossible to excise all of

the water and moisture from the Tank after it has been

hydrostatically tested. Plaintiff showed that ICI’s Tank

supplier had been sued by another Halon supplier for

delivering shipping Tanks—identical to those used by

ICI—which contained water left over from the

hydrostatic test (Exs. P-41 and 42).

19

Since defendant did not inspect the interiors of these

shipping Tanks before filling them, the quality of ICI’s

incoming Halon was immaterial. The purest Halon could

be contaminated merely by being placed in a Tank which

had been sitting for a day or two with an open valve.

Obviously, this is the reason why the MilSpecs insisted

on an inspection of the inside of the Tanks before filling

them, as well as a test of the “‘contents’’ of the shipping

Tanks after they had been filled. This ICI never did!

D. ICI’s “Certificates of Analysis’’ and Bills of Lading

were fraudulent.

In addition to its failure to inspect the interiors of its

Tanks before filling them, and to test the contents of its

Tanks after filling them, ICI furnished plaintiff with

false ‘‘Certificates of Analysis’, and Bills of Lading,

purporting to attest that it did inspect and test.

Defendant’s ‘Certificates of Analysis’ specifically

listed each of the 22 Tanks in the ‘‘Lot’’ being shipped to

plaintiff, and certified that they meet the MilSpecs.

These Certificate of Analysis were fraudulent. No test

was ever made of even one Tank, much less two Tanks,

or, of any one Lot, to see if it met the MilSpecs.

Bulk storage Tank testing is only a “manufacturing

control’. The US Air Force was seeking a test of the

contents of the Tank after it had been filled, and after

the new Halon had mixed with whatever was still in the

Tank.

On the trial, it developed that these so-called

Certificates of Analysis were prepared by a secretary

who had no knowledge of the quality of the Halon. She

automatically typed up the Certificate, and affixed a

rubber-stamp signature (See typical “Certificate of

Analysis” for November 23, 1982, Ex. P-9; Jt. App., p.

1894).

ai

20

Similarly, defendant issued fraudulent Bills of Lading

for each ‘‘Lot” of 22 Halon 1211 shipping Tanks which it

sent to plaintiff. The typical Bill of Lading (Ex. P-9; Jt.

App., p. 1897) falsely recites, “These cylinders must

meet government inspection ... Certificate of Analysis

required.”

However, the cylinders never were inspected internally

for corrosion before filling, as required by MilSpec 5.1.1,

nor were the contents ever analyzed after filling, as

required by MilSpec 4.4.2, et seg. ICI’s Moisture Book

and Lab Book entries proved that its Halon did not

conform to the MilSpec moisture limits.

This produced absolute, unimpeachable, unrebuttable

and overwhelming ‘direct proof’ of ICI’s breach of the

MilSpec testing and inspection requirements, and breach

of the Buy American Act, and breach of ICI’s contract

with Mikulec, which incorporated the MilSpecs and Buy

American Act.

III. Defendant was allowed to benefit from its

suppression of damaging evidence on discovery.

Defendant’s discovery responses deviously suppressed

vital, relevant and material facts which substantiated

plaintiff's claims.

Defendant’s willful suppression of discoverable

material which was unquestionably required by

plaintiff’s discovery requests included: suppression of the

MilSpecs error, and suppression of its Moisture Books,

~ and the substitution of a fraudulent version.

A. Suppression of the MilSpec Error

Defendant’s January 16, 1981 letter to the U.S. Air

Force notified the Air Force that the 200 ppm limit of

moisture in Halon 1211 was in error, since 70 ppm

causes corrosion. It ‘‘diplomatically’’ suggested that the

MilSpec should have read 20 ppm maximum moisture,

since that was the ISO (and BSI) world-wide limit on

moisture in Halon.

21

Defendant, on discovery, suppressed both its

knowledge of the MilSpec error, as well as its January

16, 1981 letter concerning the MilSpec error. On its

depositions, and in its Officials’ affidavits and letters,

defendant steadfastly maintained that the only standard

was 200 ppm of moisture and denied that there were

such letters. In fact, ICI “deceptively” suggested that if

plaintiff knew of any other moisture standard, it should

“share this information ... with ICI” (Ex. P-20QQ; Jt.

App. page 1942).

Fortunately, shortly before the trial, plaintiff was able

to obtain a copy of the letter by a F.O.1.Act request

directed to the Air Force.

The calumny—and unpatriotic perversity—of ICI was

demonstrated when its Plant Manager Horlbeck testified

on the trial that ICI made two grades of Halon, a 200

ppm “Military’’ grade for sale to the U.S. Government,

and Government contractors such as plaintiff, and a

“‘higher’’ grade 20 ppm product for sale to ‘‘commercial”’

customers. Instead of being penalized for this egregious

conduct, ICI was allowed to benefit from it (Appendix G,

App. 31a).

B. Suppression of Moisture and Lab Book Data.

Defendant’s other major suppression on discovery

occurred when it fabricated a phantom ‘‘Moisture Book”

(Exhibit P-46), and presented it to plaintiff in the course

of the first round of depositions. Plaintiff relied on this

fraudulent “phantom’’ Moisture Book in preparing for

trial, and, throughout the trial.

Shortly before plaintiff rested, the existence of the

actual Moisture Books accidentally .were revealed

(Exhibits P-38 and P-39). These suppressed books

contained a vast amount of damaging data which

directly supported plaintiff's contentions. None of these

entries were present in the fabricated ‘‘phantom”’ book

(Exhibit P-46).

22

The suppressed actual Moisture Books proved that:

A. ICI had been able to make pure Halon—with only

1 ppm of moisture—until the Spring of 1981 when it

changed its manufacturing process and installed a new

large storage tank. For almost a year after that, it was

unable to produce Halon in any quantity, and had to

start importing Halon. ICI never again was able to

produce low ppm Halon, but rather Halon varying

between 220 and to 1375 ppm, which was grossly in

excess of the allowable moisture level, and wildly

corrosive (Exhibits P-61H & 61L, and P-36 & P-36A).

B. During this hiatus in its operations, ICI began

‘“importing’’ Halon from Great Britain. The suppressed

Moisture Books demonstrate that ICI clandestinely

dumped untested ‘“‘U.K.’’ Halon into its storage tanks at

the time when it was supposedly supplying plaintiff with

certified ‘‘domestic’’ Halon, tested to MilSpec standards.

This suppressed information was contrary to ICI’s

protestations on its depositions, where it denied that it

supplied imported Halon to plaintiff.

ICI’s perfidy was compounded by its objection to

plaintiff obtaining low moisture 3 ppm certified pure

Halon from France or Japan, by its refusal to furnish

actual ‘‘Certificates of Chemical Analysis, and its |

continuing insistence that its (untested and imported)

Halon was fully conforming non-corrosive Halon.

Plaintiff received notice of termination of its

U.S. Air Force fire extinguisher contract because of the

corrosion which the Air Force deemed an ‘‘endangerment

to life and property” (Exhibit P-28, Jt. App. page 1951).

In an attempt to reinstate its USAF contract,

plaintiff sought injunctive relief via a Court direction to

ICI to supply certified pure domestic Halon accompanied

by actual ‘Certificates of Chemical Analysis’ and

“Certificates of Compliance’’ as required by plaintiff's

Purchase Order, Exhibit P-6.

23

Despite the knowledge that it was supplying untested

imported Halon, manufactured to the erroneous corrosive

200 ppm standard—due to the error in the MilSpec,

which ICI alone knew about—ICI opposed plaintiff's

request, and refused to supply the conforming Halon.

This should be considered in the light of its Plant

Manager’s admission that it had two grades of Halon,

and supplied the ‘“higher’ 20 ppm grade to its

“commercial”” customers, and that it supplied plaintiff,

and its other ‘‘Military’’ customers, with its “‘lower’’, and

corrosive, 200 ppm grade (Appendix G, App. 31a).

C. Defendant was allowed to benefit from its suppression.

Defendant having wrongfully suppressed material facts

on discovery, should have been penalized. Instead, it was

allowed to benefit therefrom. Even if the suppression

took the form of “‘silence’’, there was a duty to disclose

on discovery (Simpson Timber Co. v. Palmberg Const.

Co. (CA9 : 1967) 377 F2d 380; Westinghouse Electric

Corp. v. Garrett Corp. (DC Md: 1977) 437 F.Supp. 1301,

aff'd (CA4 : 1978) 601 F2d 155; U.S. ex rel Roman v.

Schlesinger (DC NY : 1975) 404 F.Supp 77). ICI did

much worse than keep silent—it deliberately misled

Plaintiff (Ex. P-20QQ, Jt. App. 1942).

D. Plaintiff should have received a Procedural benefit.

When defendant moved for a directed verdict, plaintiff

requested the trial court to accord it equitable procedural

relief in view of defendant’s wrongful suppression of vital

evidence on discovery.

Plaintiff requested that it should, inter alia, have the

“benefit” of all of the evidence adduced, in considering

defendant’s Motion for a Directed Verdict. At this point,

defendant has presented four days of proof, and plaintiff

had obtained vital admissions on cross-examination from

defendant’s Officials. But for defendant’s wrongful

suppression, plaintiff undoubtedly would have obtained

the same admissions on discovery, and would have been

able to present them on its own case.

24

The trial court denied this request. Thus, far from

being penalized for its wrongful suppression of vital

evidence on discovery, defendant obtained a directed

verdict, and a dismissal, on the ground that plaintiff had

not been able to present “sufficient evidence’’ to raise a

question of fact for the jury. Such a result was a

perversion of “‘the normal course of justice’’.

All of the above notwithstanding, the compelling

evidence which Plaintiff had already presented, was well

beyond that required for it to sustain its burden of proof.

IV. Sherman Act claim for abusing 100% monopoly

could not be ‘“‘waived’’ by deferring it in an FRCP 42(b)

bifurcation.

Plaintiff, having been prevented from obtaining

injunctive relief, and ‘‘threshold’’ summary judgment, by

the District Court’s crowded calendar, settled for the

Court’s promise of an early trial.

When the prospect of a trial continued to be delayed,

plaintiff requested bifurcation of the issues of liability

and damages under FRCP 42(b). Defendant objected to a

simple bifurcation, and requested a specification of

individual issues. Plaintiff objected, but the District

Judge ordered plaintiff to specify issues. Plaintiff

accordingly specified ‘‘Primary Issues’ and ‘Secondary

Issues” to be tried ‘‘separately”, and sequentially, in

order to expedite the early commencement of the trial.

Plaintiff's third “Primary Issue’’ dealt with whether

the corrosion in ICI’s Halon was a result of any

‘negligent or wrongful actions or omissions’’.

Considering defendant’s wrongful abuse of its monopoly

position, and its ‘‘forcing’’ of inferior 200 ppm Halon on

plaintiff, the antitrust and fraud claims were clearly

within the ambit of this ‘Issue’. To expedite

the commencement of the trial on the ‘Primary Issues”,

plaintiff deferred the following ‘‘Secondary Issue’’:

“Were Defendant’s wrongfui actions’ willful,

fraudulent, or aggravated, such that Plaintiff is

entitled to punitive or exemplary damages, and, if

so, in what amount?”’ (Emphasis supplied)

25

This issue clearly reserved the multiple damage

aspects of plaintiff’s fraud and antitrust claims.

Plaintiff's opening statement informed the Court there

never was any intent to abandon fraud and antitrust,

since the same issues support all claims:

‘Now, I would like to call Your Honor’s attention to

the fact that issue G, a secondary issue, is an issue

on fraud. We were willing, specifically mentioned in

there, to have fraud follow in the second trial. Now,

if Your Honor believes that fraud should be in the

first trial, I have no objection. But I t that a

simpler trial would be with fraud to f later.

However, to (sic) the same issues of fact‘ will support

antitrust, DOT, and fraud.” (Emphasis supplied)

The holding that plaintiff ‘‘waived” its antitrust and

fraud claims represents a perversion of the intent of FRCP

42(b). The purpose of a separate trial is to further

convenience, avoid prejudice and expedite trials. Rule

42(b) specifically preserves ‘‘inviolate”’ all constitutional

and statutory rights.

Instead, a rule designed to ‘‘avoid prejudice’ was used

to create prejudice. Plaintiff did not request a

specification of issues—it was ordered to comply with

defendant’s request. If a separation of issues creates

prejudice, the Court had no right under Rule 42(b).

It was not permitted to “effect a forfeiture”. Rather, it

was required to deny the separate trial or separation of

issues (Arnold v. Eastern Airlines (CA 4, in Banc; 1983)

712 F2d 899, cert. den. (1984); 464 US 1040; Franklin

Music Co. v. American Broadcasting Co. (CA 2, 1979)

616 F2d 528, 538; Garber v. Randell (CA2, 1973) 477 F2d

711, 714). A “specification of issues” under FRCP

42(b) cannot be deemed an “abandonment’’, such as

where pleadings are amended (See: FRCP Rule 15;

Wichmann v. United Disposal, Inc. (CA 8, 1977) 553 F2d

1104, 1106).

26

It was unconstitutional to order a severance, if the

price of the severance is “ex post facto” notice of the

waiver and abandonment of valuable claims. “Due

process” required the plaintiff to have concurrent notice

that such a penalty was being exacted by the Court for

specification of the issues, and, an opportunity to

withdraw the offer.

V. Petitioner was denied an orderly “due process”

trial by jury.

Petitioner duly requested, and was entitled to, a trial

by jury (Amended Article VII; 28 USCA 1861, et seq.;

FRCP 38(a)). A jury was selected on September 25, 1984,

but the trial was delayed for over 19 months, until May

1, 1986! Due to the press of criminal matters, civil

matters took a back seat.

The Trial Court’s Opinion apologized for the

“sandwiching” of this trial into “‘whatever niches existed

in the matrix” caused by the mandates of the Speedy

Trial Act, 18 USC $3161, et seg. (Appendix D; App.

12a).

Earlier, the press of criminal trials prevented

petitioner from obtaining summary judgment or

injunctive relief that would have forced ICI to supply

plaintiff with pure “‘domestic’’ Halon 1211, accompanied

by ‘Certificates of Chemical Analysis’ and ‘‘Certificates

of Compliance’’ with the MilSpec test requirements—as

required by petitioner’s contract with ICI, by the Buy

American Act, 41 USCA 10a-c, and the MilSpecs.

Immediate relief was vital, since plaintiff had been

given notice of termination of its USAF fire extinguisher

contract because of the corrosion, and had to curtail

production because of the “time bombs” caused

by the corrosion. Plaintiff could have reinstated

its contract, if it could have obtained ‘‘certified’’ pure,

tested, domestic Halon, accompanied by Certificates of

Chemical Analysis.

ee

27

This was not fantasy, since ICI’s Plant Manager,

Horlbeck, testified that it made both 200 ppm Halon,

which was admittedly corrosive, for its US “military”

customers, and its higher grade 20 ppm Halon for its

“commercial” customers (Appendix G, App. 31a).

Thus, summary judgment or injunctive relief, early on,

could have saved plaintiff's USAF fire extinguisher

contract, and terminated this litigation.

Instead, the District Judge ‘‘promised”’ an early trial.

Due to the press of criminal matters, that “early’’ trial

never occurred, and plaintiff was forced into Chapter 11

Reorganization (Appendix D, App. 9a and 12a).

The Trial Judge apologized for these problems, and

quoted plaintiff's counsel’s summary of his arcane

dilemma:

“‘What the Speedy Trial Act does to those who wish

to have a civil case tried, is a crime.”’ (Appendix D,

App. 12a).

When the jury trial finally commenced on May 1, 1986,

it continued for 22 days, until the Court was forced to

adjourn. Plaintiff urged the Court to continue the trial, since

defendant had only two more witnesses. However, the Court

could not comply with this request because it had to start a

criminal trial under the Speedy Trial Act.

The jury was sent home on July 24th, and told

that it would be notified of the resumption

of the trial. Despite repeated urgings, the

Court did not recall the jury, but continued its criminal

trial schedule, and ‘‘sandwiched’”’ in other civil matters,

for over five months, until December 30, when it granted

defendant’s motion for a directed verdict, and dismissed

the jury.

28

In October, after the jury had been recessed for three

months, plaintiffs filed a request with the Second Circuit for

a mandamus to the District Court to recall the jury (CA2;

Docket No. 86-3052). However, the Second Circuit took no

action on the mandamus request for almost a year—and

finally dismissed the mandamus request on September 24,

1987 as ‘“‘moot’’—a highly departure from the ‘normal

course of justice’’.

The District Court’s brief Opinion (Appendix A, App.

13a), lacked any analysis of plaintiff's overwhelming

proof. It apparently reflected the pressure on the Trial

Court by criminal matters under the Speedy Trial Act.

The Trial Court did not even have time to allow plaintiff

to read the depositions to the jury. Instead, it finally

adopted the unusual plan of having the jury read the

depositions in seclusion.

Apparently due to its criminal calendar, the Court was

unable to determine what exhibits were in evidence,

despite a long period of ‘‘wrestling’’ with the problem

(Appendix D, App. 13a). The Trial Court did not

reach a decision on which exhibits were in evidence until

a few days before the argument of plaintiff's appeal

before the Second Circuit. Thus, it was not until almost

two years later that the Trial Court found time to decide

what was in evidence, all to plaintiff's prejudice on the

appeal.

Thus, the Speedy Trial Act—however meritorious in its

own right—caused a denial to plaintiff of its right to a

trial by jury, as well as due process, in this action.

29

Conclusion

For the foregoing reasons Petitioner submits that the

Supreme Court of the United States should issue a Writ

of Certiorari to the United States Court of Appeals for

the Second Circuit to review, reverse and remand its

decision affirming the District Court’s Order.

Respectfully submitted,

ARNOLD WEISS, ESQ.

Designated Counsel of Record

RAICHLE, BANNING, WEISS

& STEPHENS

Attorneys for Petitioner

1400 Main Place Tower

Buffalo, New York 14202

(716) 852-7587

ey

la

APPENDIX A

Order of the United States Court of Appeals for

the Second Circuit, dated and filed October 3,

1988 (unreported), denying rehearing

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

At a stated term of the United States Court of

Appeals for the Second Circuit, held at the United States

Courthouse, in the City of New York, on the third day of

October, one thousand nine hundred and eighty-eight.

MIKULEC INDUSTRIES, INC.,

Plaintiff-Appellant

Cross-Appellee,

vs.

ICI AMERICAS, INC.,

Defendant-Appellee

Cross-Appellant.

Docket Number 88-7096, -7506,

and 88-7518

UNITED STATES COURT OF APPEALS

FILED OCT 3 1988

ELAINE B. GOLDSMITH, Clerk

SECOND CIRCUIT

2a

A petition for rehearing containing a suggestion that

the action be reheard in banc having been filed herein by

appellant Mikulec Industries, Inc.

Upon consideration by the panel that heard the appeal,

it is

Ordered that said petition for rehearing is DENIED.

It is further noted that the suggestion for rehearing in

banc has been transmitted to the judges of the court in

regular active service and to any other judge that heard

the appeal and that no such judge has requested that a

vote be taken thereon.

ELAINE B. GOLDSMITH

Clerk

By: Frederic Cassidy

3a

APPENDIX B

Opinion of the United States Court of Appeals for

the Second Circuit, dated and filed July 6, 1988,

affirming the District Court’s dismissal of the

action

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

At a stated Term of the United States Court of

Appeals for the Second Circuit, held at the United States

Courthouse in the City of New York, on the Sixth day of

July, one thousand nine hundred and eighty-eight.

Present: HONORABLE JAMES L. OAKES,

HONORABLE THOMAS J. MESKILL,

HONORABLE LAWRENCE W. PIERCE,

Circuit Judges.

MIKULEC INDUSTRIES, INC.,

Plaintiff-Appellant,

vs.

ICI AMERICAS, INC.,

Defendant-Appellee.

Docket Nos. 88-7096

; 88-7506

88-7518

This is an appeal from a judgment entered in the

United States District Court for the Western District of

New York, Elfvin, J. granting defendant-appellee’s

motion for a directed verdict pursuant to Fed. R. Civ. P.

acca a

da

50(a). The case arose out of the cancellation by the

United States Air Force of a contract with Mikulec

Industries, Inc. (Mikulec) for Halon-filled fire

extinguishers because of moisture-caused corrosion found

in the product delivered.

Mikulec subsequently initiated this action against ICI

Americas, Inc. (ICI), alleging that (1) ICI had negligently

sold it Halon improperly adulterated with moisture,

thereby causing the corrosion in the fire extinguishers;

(2) ICI had breached its contract to sell Mikulec Halon

that complied with industry and governmental standards;

(3) ICI had committed fraud; (4) ICI had improperly

secured and maintained a monopoly in the domestic

Halon market, in violation of the Sherman Act, 15 U.S.C.

$1 et seg.; and (5) ICI had shipped improperly filled

Halon tanks in violation of regulations promulgated by

the United States Department of Transportation (DOT)

pursuant to 49 U.S.C. $507.

This cause came on to be heard on the transcript of

record from said district court and was argued by

counsel.

The judgment of the district court is AFFIRMED.

Prior to trial Mikulec requested a procedure whereby

‘liability and damages’’ would be tried in bifurcated

proceedings. See J. App. at 78-81. In a Specification of

Issues for Separate Trial subsequently filed pursuant to

Fed. R. Civ. P. 42(b), Mikulec only sought resolution of

liability issues arising out of its claims based on

negligence and breach of contract. See J. App. at 82-83.

Judge Elfvin properly ruled that Mikulec had thereby

abandoned its fraud claim and its claims based on the

Sherman Act and the DOT regulations. See id. at 90-100.

We therefore refuse to consider issues that were not

5a

properly raised in the proceeding below. See, e.g.,

Schmidt v. Polish People’s Republic, 742 F.2d 67, 70 (2d

Cir. 1984).

As to the claims based on negligence and breach of

contract, we should uphold the district court’s directed

verdict if ‘‘ ‘the evidence is such that, without weighing

the credibility of the witnesses or otherwise considering

the weight of the evidence, there can be but one

conclusion as to the verdict that reasonable [jurors] could

have reached.’”’ Croce v. Kurnit, 737 F.2d 229, 237 (2d

Cir. 1984) (quoting Simblest v. Maynard, 427 F.2d 1, 4

(2d Cir. 1970)). Judge Elfvin properly entered a directed

verdict as to both claims. Where, as here, there is no

direct proof that a defendant’s negligence caused a

claimed defect in a product, the plaintiff generally must

produce evidence tending to exclude all other possible

causes not attributable to the defendant. See, e.g.,

Stewart v. Ford Motor Co., 553 F.2d 130, 137 (D.C. Cir.

1977); Shelden v. Hample Equipment Co., 89 A.D.2d 766,

453 N.Y.S.2d 934, 935 (8d Dep’t 1982) (mem.), aff’d, 59

N.Y.2d 618, 463 N.Y.S.2d 194, 449 N.E.2d 1272 (1983).

Mikulec failed to meet this burden. In fact, Mikulec

failed adequately to discount many potential causes of

corrosion raised by ICI, including many allegedly faulty

procedures employed by Mikulec itself at _ its

manufacturing plant. We do not believe that any

reasonable juror could have concluded that ICI delivered

Halon that failed to meet the contract specifications.

Therefore, even viewing all of the evidence in the light

most favorable to Mikulec, see Oboler v. Goldin, 714

F.2d 211, 212 (2d Cir. 1983) (per curiam), we affirm the

district court’s conclusion that ICI was entitled to a

directed verdict.

6a

The parties also attempt to appeal and cross-appeal

from a June 8, 1988 order in which Judge Elfvin ruled on

several outstanding evidentiary matters. They seek to

consolidate those appeals with this one. When ICI’s

directed verdict motion was argued, Judge Elfvin

indicated that he would consider the motion “on a

premise that all that has been offered is in evidence,’’ see

J. App. at 1806, and that he would consider virtually all

of Mikulec’s proffered exhibits as being ‘‘part of the

Plaintiff’s case,” id. at 1838. These statements appear to

be inconsistent with the June 8 ruling, in which Judge

Elfvin indicated that he had reached decisions to admit

some evidence and exclude other evidence before deciding

the directed verdict motion.

Once a proper appeal from a final judgment is taken, a

district court may take action only in aid of the appeal or

to correct purely clerical errors. See Leonhard v. United

States, 633 F.2d 599, 609-10 (2d Cir. 1980), cert. denied,

451 U.S. 908 (1981). Here, Judge Elfvin’s June 8 order

does not fall into either of those categories, particularly

since his earlier comments indicate that he considered

the directed verdict motion in light of all of the evidence

before him—both admitted and unadmitted. We affirm

the judgment of the district court based on that

assumption. We grant the motion to consolidate, we

vacate Judge Elfvin’s order of June 8, 1988, and we

dismiss the appeal and cross-appeal from the June 8

order as nullities.

James L. Oakes, U.S.C.J.

Thomas J. Meskill, U.S.CJ.

Lawrence W. Pierce, U.S.C.J.

N.B. This Summary Order will not be published in the

Federal Reporter and should not be cited or otherwise

relied upon in unrelated cases before this or any other

court.

ISSUED AS MANDATE: Nov. 2, 1988

————

7a

APPENDIX C

Order and Final Judgment of the United States

District Court for the Western District of New

York, per Elfvin, J., dated and entered December

31, 1987 (unreported) dismissing the action

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF NEW YORK

Civ-83-939E

MIKULEC INDUSTRIES, INC.,

Plaintiff,

v.

ICI AMERICAS, INC.,

Defendant.

SIR/MADAM: Take notice of an ORDER, of which

the within is a copy, duly granted in the above entitled

action on the 14th day of November, 1988, and entered

in the Office of the Clerk of the United States District

Court, Western District of New York, on the 14th day of

November, 1988.

Dated: Buffalo, New York

November 14, 1988

MICHAEL J. KAPLAN, CLERK

U.S. District Court

Western District of New York

U.S. Courthouse

Buffalo, New York 14202

To: Arnold Weiss, Esq.

William L. Rieth, Esq.

8a

APPENDIX D

Order and Opinion of the United States District

Court for the Western District of New York, per

Elfvin, J., dated and filed December 30, 1986,

directing a verdict of dismissal

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF NEW YORK

CIV-83-939-E

MIKULEC INDUSTRIES, INC.,

Plaintiff

Vv.

ICI AMERICAS INC.,

Defendant.

The Court having entered its Order on December 30,

1986 granting Defendant’s motion for a directed verdict

of dismissal; and

The parties having filed a Stipulation dated December

18, 1987 for the entry of final judgment, which is

incorporated herein by reference; it is hereby

ORDERED, that Defendant’s motion for a directed

verdict of dismissal is granted, and the Clerk shall enter

final judgment dismissing Plaintiff's Complaint and

Reply Counterclaims herein; and, it is further

9a

ORDERED, that Defendant is entitled to judgment in

its favor in its counterclaims I and II in the amount of

$10,147.50, with interest thereon from July 20, 1983, and

for the return of any of ICI’s tanks remaining in MI’s

possession after the final conclusion of this litigation,

which said judgment shall be, in all respects, final,

except that it may not be executed upon and shall not be

or amount to a lien or encumbrance upon any of the

Plaintiff's property, and shall not afford the Defendant

any priority over other creditors in the Plaintiff's

pending Chapter 11 Reorganization proceedings; and, it

is further

ORDERED, that the Clerk shall forthwith enter final

judgment in accordance therewith.

JOHN T. ELFVIN

U.S.D.J.

Dated: Buffalo, New York

December 31, 1987

10a

JUDGMENT IN A CIVIL CASE

UNITED STATES DISTRICT COURT

. WESTERN DISTRICT OF NEW YORK

Case Number: CIVIL 83-939E

MIKULEC INDUSTRIES, INC.,

Plaintiff,

Vv.

ICI AMERICAS, INC.,

Defendant.

[ ] Jury Verdict. This action came before the Court for a

trial by jury. The issues have been tried and the

jury has rendered its verdict.

[x] Decision by Court. This action came to hearing before

the Court. The issues have been heard and a

decision has been rendered.

IT IS ORDERED AND ADJUDGED

That defendant’s motion for a directed verdict of

dismissal is granted, and the Clerk shall enter final

judgment dismissing plaintiff's complaint and reply

counterclaim; that defendant is entitled to judgment in

its favor in its counterclaims I and II in the amount of

$10,147.50, with interest thereon from July 20, 1983, and

for the return of any of ICI’s tanks remaining in MI's

possession after the final conclusion of this litigation,

which said judgment shall be, in all respects, final,

lla

except that it may not be executed upon and shall not be

or amount to a lien or encumbrance upon any of the

plaintiff’s property, and shall not afford the defendant

any priority over other creditors in the plaintiff's

pending Chapter 11 Reorganization proceedings; further

the Clerk shall forthwith enter final judgment in

accordance therewith.

January 5, 1988

Date

EDWARD P. GUETH, JR.

Clerk

(Illegible)

(By) Deputy Clerk

12a

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF NEW YORK

CIV-83-939E

MIKULEC INDUSTRIES, INC.,

Plaintiff,

Vs.

ICI AMERICAS, INC.,

Defendant.

After bitterly fought myriad pretrial motions and on

the threshold of trial, the defendant moved for a

summary judgment of dismissal of the causes of action

alleged against it in this action. Despite the tenability of

said motion and because the trial date was imminent and

because it was predicted by the plaintiff that the trial

would be brief, it seemed to this Court to be more in the

best interests of justice to hear the plaintiff's evidence.

This was done and on the eighteenth trial day (three or

four of which were not full six-hour days) the plaintiff

rested. The defendant moved for a directed verdict and

this Court reserved decision. This delay of resolution was

bottomed on two major considerations. Firstly, this

Court had been “sandwiching” this civil trial into

whatever niches existed in the matrix of accommodating

the mandates of the Speedy Trial Act, 18 U.S.C. §3161 et

seq.,' and wished to make use of four additional available

'‘ Counsel for the plaintiff aptly stated the dilemma of civil litigants in

today’s federal courts. ‘‘What the Speedy Trial Act does to those who

wish to have a civil case tried is,’ he said, ‘‘a crime.”

~ ee oe Da ee ee 3 nit.

13a

days for the taking of evidence. Secondly (and

interlocked with the first-stated reason), a substantial

portion of the plaintiff's presentation in the form of parts

of pretrial depositions was deemed received as part of its —

case merely by designating the pages and lines of the

transcripts with counter designations to be made by the

defendant of additional parts thereof where were needed

to make complete what the plaintiff wished to have

adduced.? Further, the plaintiff asked that specific

exhibits, some not earlier offered and some as to which

an objection had been sustained, be admitted into

evidence as part of its case.

The plaintiff rested July 22, 1986 and, because the

abovenoted trial time was available, the defendant was

required to present a portion of its case on that day and

the three next successive days. Oral argument on the

defendant’s motion to dismiss was had August lst and

the same was deemed submitted. Actual and meaningful

submission had to await the results of this Court’s

‘“‘wrestling’’ with the problem of what was and what was

not in evidence and such process, admittedly, consumed

much more time than it would have had the rulings been

accomplished with the jury standing by and ready to

proceed.

The gravamen of the plaintiff's complaint against the

defendant is that the plaintiff had a contract with the

United States Air Force for the supply of fire

extinguishers wherein the fire-fighting substance was

halon 1211 (‘‘halon’”’), that the plaintiff was bound to

supply the halon with a moisture content of not more

than 200 parts per million (“‘ppm’’), that the plaintiff

bought such halon from the defendant, that certain of

? Also, the defendant was to have an opportunity to renew objections

made at the times of the depositions and to advance objections other

than as to the form of the questions.

l4a

the plaintiff's extinguishers due to internal corrusion

malfunctioned in the field, that the plaintiff's contract

was cancelled because the plaintiff was unable to

alleviate the problem, that the government threshold of

200 ppm was unrealistically high, that the defendant

knew that such was the case and that the defendant

through lax controls or an absence of controls supplied

halon to the plaintiff which met the Air Force’s threshold

requirements but which nevertheless contained an

excess of water which caused the corrosion and the

plaintiff’s resultant loss of its contract.

Because, after construing all of the evidence adduced

by the plaintiff most favorably to the plaintiff, the whole

of the oral testimony and other evidence and all

inferences which the trial jury could reasonably draw

therefrom is insufficient to support a verdict for the

plaintiff and because no reasonable man and no

reasonable woman could find for the plaintiff without

wholesale resort to sympathy or prejudice or other

emotion, the defendant’s motion will be granted.

Accordingly it is hereby ORDERED that the

defendant’s motion for a directed verdict of dismissal is

granted and that the defendant may have a judgment in

accordance herewith.

Dated: Buffalo, N. Y.

December 30, 1986

JOHN T. ELFVIN

U.S.D.J.

TS EIRENE Re

LT: Sonal

15a

APPENDIX E

Text of Constitution, Statutes, Rules

and MilSpec Provisions Involved

UNITED STATES CONSTITUTION

AMENDED ARTICLE V

‘No person shall ... be deprived of life, liberty, or

property, without due process of law...”

AMENDED ARTICLE VII

“In Suits at common law, where the value in

controversy shall exceed twenty dollars, the right of trial

by jury shall be preserved, and no fact tried by a jury,

shall be otherwise reexamined in any Court of the United

States, than according to the rules of the common law.”’

ARTICLE XIV

' Section 1. “... No State shall ... deprive any person

of life, liberty, or property, without due process of law

l6a

FEDERAL RULES OF CIVIL PROCEDURE

Rule 26. ‘‘General Provisions Governing Discovery”

* * *

‘“‘(e) Supplementation of Responses.’ A party who has

responded to a request for discovery with a response

that was complete when made is under no duty to

supplement his response to include _ information

thereafter acquired, except as follows:

* * *

‘(2) A party is under a duty seasonably to amend a

prior response if he obtains information upon the basis of

which (A) he knows that the response was incorrect when

made, or (B) he knows that the response though correct

when made is no longer true and the circumstances are

such that a failure to amend the response is in substance

a knowing concealment.”

* * *

(g) “Signing of Discovery Requests, Responses, and

Objections. Every request for discovery or response or

objection thereto made by a party represented by an

attorney shall be signed by at least one attorney of

record in his individual name. ... The signature of the

attorney or party constitutes a certification that he has

read the request, response, or objection, and that to the

best of his knowledge, information, and belief formed

after a reasonable inquiry it is: (1) consistent with these

rules ... (2) not interposed for any improper purpose,

such as to harass or to cause unnecessary delay or

needless increase in the cost of litigation; ... .

* * *

“If a certification is made in violation of the rule, the

court, upon motion or upon its own initiative, shall

impose upon the person who made the certification, the

party on whose behalf the request, response, or objection

17a

is made, or both, an appropriate sanction, which may

include an order to pay the amount of the reasonable

expenses incurred because of the violation, including a

reasonable attorney’s fee.’’

Rule 37. ‘Failure to Make or Cooperate in Discovery:

Sanctions”

* * *

(b) ‘Failure to Comply with Order.

* * *

(2) “Sanctions by Court in Which Action is Pending.

If a party or an officer, director, or managing agent of a

party or a person designated under Rule 30(b)(6) or 31(a)

to testify on behalf of a party fails to obey an order to

provide or permit discovery, including an order made

under subdivision (a) of this rule or Rule 35, or if a party

fails to obey an order entered under Rule 26(f), the court

in which the action is pending may make such orders in

regard to the failure as are just, and among others the

following:

“(A) An order that the matters regarding which

the order was made or any other designated facts

shall be taken to be established for the purposes of

the action in accordance with the claim of the party

obtaining the order;

“(B) An order refusing to allow the disobedient

party to support or oppose designated claims or

defenses, or prohibiting him from introducing

designated matters in evidence;

“(C) An order striking out pleadings or parts

thereof, or staying further proceedings until the

order is obeyed, or dismissing the action or

proceeding or any part thereof, or rendering a

judgment by default against the disobedient party;

* * *®

18a

Rule 42. ‘‘Consolidation; Separate Trials”

* * *

‘“(b) Separate Trials. The court, in furtherance of

convenience or to avoid prejudice, or when separate trials

will be conducive to expedition and economy, may order

a separate trial of any claim, cross-claim, counterclaim,

or third-party claim, or of any separate issue or of any

number of claims, cross-claims, counterclaims, third-

party claims, or issues, always preserving inviolate the

right of trial by jury as declared by the Seventh

Amendment to the Constitution or as given by a statute

of the United States.”

Rule 801. Definitions

“The following definitions apply under this article:

x * *

‘“(d) Statements which are not hearsay. A statement

is not hearsay if—

* * *

‘(2) Admission by party-opponent. The

statement is offered against a party and is (A) his

own statement, in either his individual or a

representative capacity or (B) a statement of which

he has manifested his adoption or belief in its truth,

or (C) a statement by a person authorized by him to

make a statement concerning the subject, or (D) a

statement by his agent or servant concerning a

matter within the scope of his agency or

employment, made during the existence of the

relationship, .. .

19a

Rule 803. Hearsay Exceptions; Availability of Declarant

Immaterial

“The following are not excluded by the hearsay rule,

even though the declarant is available as a witness:

* * *&

(6) Records of regularly conducted activity. A

memorandum, report, record, or data compilation, in

any form, of acts, events, conditions, opinions, or

diagnoses, made at or near the time by, or from

information transmitted by, a person with

knowledge, if kept in the course of a regularly

conducted business activity, and if it was the

regular practice of that business activity to make

the memorandum, report, record, or data

compilation, all as shown by the testimony of the

custodian or (illegible) or the method or

circumstances of preparation indicate lack of

trustworthiness. The term “business” as used in

this paragraph includes business, institution,

association, profession, occupation, and calling of

every kind, whether or not conducted for profit. ...”

20a

TITLE 15 U.S. CODE COMMERCE AND

TRADE SHERMAN ANTI-TRUST ACT

AN ACT to protect trade and commerce against

unlawful restraints and monopolies.

Section 1. ‘‘Every contract, combination in the form of

trust or otherwise, or conspiracy, in restraint of trade or

commerce among the several States, or with foreign

nations, is hereby declared to be illegal. Every person

who shall make any contract or engage in any

combination or conspiracy hereby declared to be illegal

shall be deemed guilty of a felony and, on conviction

thereof, shall be punished by fine not exceeding one

million dollars if a corporation, or, if any other person,

one hundred thousand dollars, or by imprisonment not

exceeding three years, or by both said punishments, in

the discretion of the court.”

* * *

l

2la

Sec. 2. ‘‘Every person who shall monopolize, or attempt

to monopolize, or combine or conspire with any other

person or persons, to monopolize any part of the trade or

commerce among the several States, or with foreign

nations, shall be deemed guilty of a felony, and, on

conviction thereof, shall be punished by fine not

exceeding one million dollars if a corporation, or, if any

other person, one hundred thousand dollars, or by

imprisonment not exceeding three years, or by both said

punishments, in the discretion of the court.”

* * *

22a

TITLE 44 U.S. CODE

“‘PUBLIC CONTRACTS”

(“Buy American Act’’)

§10a. American materials required for public use

“Notwithstanding any other provision of law, and

unless the head of the department or independent

establishment concerned shall determine it to be

inconsistent with the public interest, or the cost to be

unreasonable, only such unmanufactured articles,

materials, and supplies as have been mined or produced

in the United States, and only such manufactured

articles, materials, and supplies as have been

manufactured in the United States substantially all from

articles, materials, or supplies mined, produced, or

manufactured, as the case may be, in the United States,

shall be acquired for public use. ...”’

§10b. ‘‘Contracts for public works; specification for use

of American materials; blacklisting contractors

violating requirements

‘“(a) Every contract for the construction, alteration, or

repair of any public building or public work in the United

States growing out of an appropriation heretofore made

or hereafter to be made shall contain a provision that in

the performance of the work the _ contractor,

subcontractors, material men, or suppliers, shall use only

such unmanufactured articles, materials, and supplies as

have been mined or produced in the United States, and

only such manufactured articles, materials, and supplies

as have been manufactured in the United States

substantially all from articles, materials, or supplies

mined, produced, or manufactured, as the case may be,

in the United States. ...”

23a

§10c. ‘Definition of terms used in sections 10a to 10c

‘“‘When used in sections 10a to 10c of this title—

(a) The term “United States”, when used in a

geographical sense, includes the United States and

any place subject to the jurisdiction thereof;

(b) The terms “public use”, “public building’,

and “public wor shall mean use by, public

building of, and public work of, the United States,

_ the District of Columbia, Puerto Rico, American

Samoa, the Canal Zone, and the Virgin Islands.”’

24a

U.S. Air Force Milspecs for Halon 1211

MIL-B-38741 (USAF)

30 July 1965

MILITARY SPECIFICATION

BROMOCHLORODIFLUOROMETHANE,

TECHNICAL

1. SCOPE

1.1 This specification covers the requirements for

bromochlorodifluoromethane for use as a fire

extinguishing agent.

2. APPLICABLE DOCUMENTS

2.1 The following standards of the issue in effect on

date of invitation for bids form a part of this

specification to the extent specified herein:

STANDARDS

Federal

Federal Test Method Lubricants, Liquid Fuels and

Standard No. 791 Related Products; Methods of

Testing;

Military

MIL-STD-101 Color Code for Pipelines and

for Compressed Gas Cylinders

MIL-STD-105 Sampling Procedures and

Tables for Inspection by

Attributes

MIL-STD-129 Markings for Shipment and

Storage

* * *

25a

3. REQUIREMENTS

3.1 Material. The material shall be a technically pure

grade of bromochlorodifluoromethane, suitable as a fire

extinguishing fluid and shall conform to _ the

requirements of Table I.

TABLE I—Requirements for Bromochlorodifluoromethane

Test

Property Requirement Par.

Bromochlorodifiuoromethane 99.0 4.4.1

percent by volume, minimum

Boiling Point, degrees Centigrade -4+1 4.4.7

at 760 mm HG (24.8+ 1.8°F)

Acid Halides & Free Halogens, 3.0 4.4.2 and

ppm (by weight), maximum 4.4.3

Nonvolatile Residue, 0.02 4.4.4

grams/100 ml, maximum

Suspended Matter or Sediment None 4.4.5

Color (Platimum-Cobalt Equal or Less 4.4.6

Color Standard) Than #15

Moisture, percent by weight, 0.02 * 4.4.8

maximum

4. QUALITY ASSURANCE PROVISIONS

4.1 Responsibility for Inspection. Unless otherwise

specified in the contract or purchase order, the supplier

is responsible for the performance of all inspection

requirements as specified herein. Except as otherwise

specified, the supplier may utilize his own or any other

inspection facilities and services acceptable to the

Government. The Government reserves the right to

perform any of the inspections set forth in the

specification where such inspections are deemed

necessary to assure supplies and services conform to

* Note by Petitioner: 0.02% = 200 ppm.

26a

4.1.1 Inspection shall be in accordance with Method

9601 of Federal Test Method Standard No. 791.

4.2 Sampling for Lot Acceptance.

4.2.1 Inspection Lot. Bromochlorodifluoromethane

manufactured as one batch and offered for delivery at

one time shall be considered a lot for purposes of

inspection.

4.2.2 Sampling for Inspection. A random sample of

filled containers shall be selected in accordance with

Standard MIL-STD-105 at inspection level I and

acceptable quality level (AQL) of 2.5 percent defective to

verify compliance with this specification in regards to

fill, closure, marking and other requirements not

involving tests.

4.2.3 Sampling for Tests. From each lot of filled

containers not less than two containers shall be taken at

random for tests described under 4.4. The containers

_ may be returned to the lot after acceptance.

4.3 Examination

4.3.1 Filled Containers and Preparation for Delivery

Requirements. Each sample selected in accordance with

4.2.2 shall be visually examined for defects of

construction of the containers and closure, for evidence

of leakage, for unsatisfactory markings and all other

preparation for delivery requirements of Section 5. Each

sample filled container shall also be weighed to determine

the amount of contents. Any container in the sample

having one or more defects, or under the required fill,

shall be rejected, and if the number of defective

containers exceeds the acceptance number for the

appropriate sampling plan of Standard MIL-STD-108,

the lot represented by the sample shall be rejected.

Rejected lots may be resubmitted for acceptance,

provided contractor has removed or recorded all

nonconforming products.

27a

4.4 Test. Test shall be conducted as specified herein.

* * *

4.4.8 Moisture. Analysis shall be in accordance with

Federal Test Method 791, Method 3283.

4.5 Rejection. Failure of any container to conform to

the requirements of this specification shall be cause for

rejection of the entire lot.

5. PREPARATION FOR DELIVERY

5.1 Packaging.

5.1.1 Levels A and. C. Unless otherwise specified,

bromochlorodifluoromethane shall be delivered in

cylinders of (illegible) and 200-pound capacity conforming

to Interstate Commerce Commission specification ICC

48300 or ICC 4BA300, and in 2600-pound tanks

conforming to Interstate Commerce Commission

Specifications ICC 1061500 or ICC 110A500W. The

contractor shall assure that containers are free from

contamination and are suitable for shipment and storage.

5.2 Marking. In addition to any special marking

required by the contract or order, containers shall be

marked in accordance with Military Standard MIL-STD-

129. Filled cylinders shall be color coded in accordance

with MIL-STD-101.

6. NOTES

6.1 Intended Use. The bromochlorodifluoromethane

covered by this specification is intended for use as a fire

extinguishing agent.

* * 8

28a

MIL-B-38741 (USAF)

Amendment 1

25 September 1974

MILITARY SPECIFICATION

BROMOCHLORODIFLUOROMETHANE,

TECHNICAL

This amendment forms a part of Military Specification

MIL-B-38741(USAF) dated 30 Jul 1965 and is approved

for use by all Departments and Agencies of the

Department of Defense.

* * *

Page 8, paragraph 5.1.1; Delete and substitute:

5.1.1 Levels A and C. Unless otherwise specified,

bromochlorodifluoromethane shall be delivered in

cylinders conforming to specifications DOT 48300 or

4BA300, or in one ton tanks conforming to specifications

DOT 1061500 or 110A500. Unless otherwise specified

(6.2), cylinders shall be equipped with Dual Port

Fluorocarbon Valve ICI/GC 333019A, or equal. The

contractor shall assure that containers are free from

contamination and are suitable for shipment and storage.

MIL-B-3874(USAF)

Amendment 2

9 April 1984

Superseding

Amendment 1

25 September 1974

MILITARY SPECIFICATION

BROMOCHLORODIFLUOROMETHANE,

TECHNICAL

This amendment forms a part of Military Specification

MIL-B-38741(USAF), dated 30 July 1965 and is

approved for use by all Departments and Agencies of the

Department of Defense.

* * *

PAGE 3

* TABLE 1, Line 15: Delete and substitute:

“Moisture, percent by weight,

maximum 0.002 4.4.8”

PAGE 8

* 4.4.8: Delete and substitute ‘4.4.8 Moisture. The

analysis may be conducted by the phosphorus

pentoxide method, by infrared absorption, by an

electrolytic moisture analysis, or by a piezoelectric

analyzer. The accuracy of the results and the standard

method shall be by orthodox Karl Fischer method of

ASTM E 700.”

30a

APPENDIX F

Excerpts of Trial Exhibit

Plaintiff’s Exhibit P-36A

Excerpt from ICI Lab Book, Ex. P-36)

(ICI’s tests to compare ICI’s proprietary

moisture test to the USAF MilSpecs (‘‘US’’)

moisture test on the same sample of Halon 1211)

ICI Americas, Inc.

Wilmington, Delaware 19897

G.C. US.

Moisture ICI

H,O = {(2.38 x 2.9) - 6.25] 1465 = 5.7 ppm

959-790

Moisture US

H,O = [(.69 x 4.4) - 0] 5693 = 62 ppm

150 ml x 1.850

3la

APPENDIX G

Excerpts of Trial Testimony

Excerpts of trial testimony of

Werner Horlbeck, ICI’s Plant Manager

(Joint Appendix, Vol. II, pp. 1013-1014)

Q. “Would it be something you wouldn’t sell

ordinarily?

A. “Or what you may not sell to one customer

which you would sell to another customer.

Q. “I see. So you have a list of preferred

customers and other customers?

A. ‘We have customers for whom which

characteristics have been established. We have

customers like the Air Force who have a two

hundred parts per million water spec. other

customers who have thirty or forty part per million

water spec.

Q. ‘What category did you put Mr. Mikulec in?

A. ‘Mr. Mikulec was being supplied material in

conformance with the Air Force contracts.

* * *

Q. ‘I didn’t ask you that. I said, did you put Mr.

Mikulec in the thirty parts per million category of

customer? '

* * *

THE COURT: “Excuse me. Can you answer

that yes or no?

THE WITNESS: “Yes, I can, sir. Two

hundred parts per million.”’