# Appendix — Federated Department Stores, Inc. v. Moitie > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385006_2233%3A3 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1981 - **Citation:** 452 U.S. 394 ## Text No. 79-1517 IN THE Supreme Court of the United States OCTOBER TERM, 1980 FEDERATED DEPARTMENT STORES, INC., ef al., Petitioners, ve MARILYN MOITIE AND FLoyp R. BROWN, ETC., Respondents. On Writ Of Certiorari To The United States Court Of Appeals For The Ninth Circuit JOINT APPENDIX JERROLD N. OFFSTEIN JEROME I. CHAPMAN 111 Sutter St. ARNOLD & PoRTER San Francisco, CA 94104 1200 New Hampshire (415) 421-8166 Ave., N.W. Attorney for Respondent Washington, D.C. 20036 Floyd R. Brown (202) 872-6750 Attorney for Petitioner Federated Department Stores, Inc. JOHN C. Grosz SOLIGER & GORDON 250 Park Ave. New York, NY 10017 (212) 687-1140 Attorney for Petitioner Saks & Company PETITION FOR CERTIORARI FILED MARCH 28, 1980. CERTIORARI GRANTED NOVEMBER 17, 1980. $e er i PRESS OF BYRON S. ADAMS PRINTING, INC., WASHINGTON, D.C. DOCKET ENTRIES 1976 June 15 June 22 July 9 July 14 July 14 July 23 August 6 INDEX TO JOINT APPENDIX Moitie v. Federated Department Stores, Inc., No. C-76-1110-SW [‘‘Moitie P’]... Brown vy. Federated Department Stores, Inc., No. C-76-1210-SW [‘‘Brown [’]... Moitie v. Federated Department Stores, Inc., No. C-77-0576-SW [‘‘Moitie IT’] .. Brown vy. Federated Department Stores, Inc., No. C-77-0577-SW [‘‘Brown IT’] .. Complaint in Brown ].............005. Answer and Counterclaim of Defendant Federated Department Stores, Inc. in EE Gs ud one ueaweavds-ecansvaeeacka Answer of Defendant Saks & Company IN BrOWN 1... ccc ec eee ees Plaintiffs’ Reply to Counterclaim of De- fendant Federated Department Stores, ee We NN Do ccc acavcaciovaceves Plaintiffs’ Reply to Conditional Counter- claim of Defendant Saks & Company in he iain Bis cha ote Ce ead a bas Motion of Defendants Federated Depart- ment Stores, Inc. and Saks & Company to Dismiss Moitie ] ............ 0.0045. Plaintiff Marilyn Moitie’s Memorandum in Opposition to Defendants’ Motion to Dismiss Moitie 1.0... 6. ee ee PAGE 17 23 29 33 37 ii INDEX TO JOINT APPENDIX Continued 1977 PAGE January 11 Memorandum Order of District Court ey ene 77 January 13 District Court Order Dismissing Brown 1 — 89 January 13 Judgment in Brown f.... 2... cc ccc ccees 9] February 17. Complaint in Brown /] ................ 93 March 21 Defendants’ Notice of Related Cases .... 103 March 21 Related Case Order re Brown I] ........ 107 April 8 Notice of Motion and Motion of Defend- ants Federated Department Stores, Inc. and Saks & Company to Dismiss Moitie II] and Brown II, and Memorandum of Points and Authorities in Support AU ee PP een cn 109 May 16 Plaintiffs’ Memorandum of Law in Op- position to Defendants’ Joint Motion to Dismiss Moitie I] and Brown II (Res NETS iy a ea P 145 May 20 Reply Memorandum of Defendants Fed- erated Department Stores, Inc. and Saks & Company in Support of Motion to Dismiss Moitie [J] and Brown I]......... 175 July 6 Dissfict Court Order Denying Plaintiffs’ Motion to Remand and Granting De- fendants’ Motion to Dismiss Moitie II LS ee Ot 1AAE aan ees 187 July 6 Judgment in Moitie 1] and Brown I] .... 193 lii INDEX TO JOINT APPENDIX Continued 1979 PAGE November 15 Original Decision of the Court of WEE Poca hue oe sauehs Pena uses can 195 November 28 Defendants’ Petition for Rehearing ..... 201 1980 January 2 Order of the Court of Appeals Denying Petition for Rehearing................. 213 January 15 Order and Substituted Opinion of the eure Oe UI ook oa vk ve bad ene 215 May 12 Notice of Dismissal, Reason There- for and _ District Court Order in re re ee ei aes oo 221 DOCKET ENTRIES UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA No. C-76-1110-SW [‘‘Moitie P’] MARILYN MOITIE, individually, and on behalf of others similarly situated, Plaintiffs, ¥. FEDERATED DEPARTMENT STORES, INC., d/b/a I. MAGNIN & Co., and BULLOCK’s NORTHERN CALIFORNIA; SAKS & COMPANY, d/b/a Saks FIFTH AVENUE; and DOES I THRouGH XX, Defendants. Date 1976 PROCEEDINGS Junel — Petition for Removal from Superior Court, County of Santa Clara, (their P30343) together with copy of summons & complaint; no process (copy to MDL panel). Junel — Order — conference on 9-16-76 at 9 a.m. June! — $250 Removal Bond. Junel — Defendants’ Notice of filing Petition & Bond on removal. June2 — Defendants’ notice of motion & motion for Order extending time to respond to complaint: Affidavit of Fousekis; Affidavit of Miller; Memo of Points & Authorities; Proposed Order. June2 — Stipulation & OrpeR shortening time for hearing on above motion to 6-3-76 at 9 a.m. June3) — Proof of Service of order re conference on 9- 16-76. June3_ — ORDeR extending to 6-22-76 defendants’ Federated Dept. Store & Saks’s time to respond to complaint. June3=— Minutes: Defendants’ motion for order extending time to respond to complaint GRANTED; hearing continued to 7-22-76 at 9:00 a.m. June21 — Answer of defendant Saks & Co. June22 — ANswer & Counterclaim of defendant Federated Dept. Stores, Inc., & Jury Trial DEMAND. Date 1976 to PROCEEDINGS [Moitie /] June 24 June 24 June 25 June 25 June 25 June 25 June 28 July 6 July 7 July 14 July 14 July 19 July 23 Aug. 6 Aug. 1! Aug. 26 Aug. 30 ORDER: Case determined to be related to C-76-867-SW & C-76-869-GBH. Government’s Notice of Motion & Motion to quash subpoena, or for a protective order: Memo of — & authorities; Exhibit A; Proposed form of order. Affidavit of Charles Lamont re defendants’ motion for stay or, in the alternative, to postpone deposi- tion. Defendant Saks’s certificate of service. Defendants’ notice of motion and motion for stay pending Ist pretrial conference or, in the alter- native, to postpone deposition; Lodged stipulation & proposed order shortening time to hear motion; Lodged stipulation & order re pretrial conference. ORDER — pretrial conference scheduled for 7-21-76 vacated (SW). Lodged Government’s notice of motion. Defendant Saks’ amendment to conditional counterclaim. ORDER — Case deemed to be related to: C-76-867; C-76-869; C-76-1363 (SW). Plaintiffs’ reply to conditional counterclaim of defendant Saks. Plaintiffs’ reply to counterclaim of defendant Federated. ORDER relating case to: C-76-1429-SC, C-76-1363-SC, & cases in related case order of 6-24-76 (C-76-867-SW & C-76-869-GBH). Defendants’ Notice of Motion & Motion to dismiss. Plaintiffs’ memo in opposition to defendants’ motion to dismiss. Plaintiffs’ certificate of service by mail of memorandum in opposition. OrDeR: Pre-Trial Conference set for 12-9-76 at 9:00 a.m. and Trial on 3-21-76 at 10:00 a.m. (SW). ORDER: Related Case to C-76-1210-RHS, C-76-869-SW, C-76-867-SW, C-76-1363-SW, and = lates and reassigned to Judge Williams (SW). Date 1977 PROCEEDINGS [Moitie I] Jan. 11 -- JUDGMENT ENTERED against plaintiffs in favor of defendants (SW); 1/17/77. Mar.23 — Related Cases: C-76-867-SW; C-76-869-GBH; C-76-1429-SW; C-76-1210-SW; C-76-1671-SW; C-76-1110-SW; C-76-1363-SW; C-77-577-SW., Feb.25 — Letter from Plaintiffs’ counsel re appeal record (see C-76-1429-SW), Sept. 12 — Original and one copy of reporter’s transcript of 6/3/76. No, C-76-1210-SW [‘‘Brown 1’’] Floyd Brown, individually, and on behalf of others similarly situated, Plaintiffs, Vv. FEDERATED DEPARTMENT STORES, INC., d/b/a I. MAGNIN & Co., and BULLOCK’s SOUTHERN CALIFORNIA; SAKS & COMPANY; d/b/a SAKs FirTH AVENUE, Defendants, Date 1976 PROCEEDINGS June 1S — COMPLAINT; issued summons (copy to MDL panel). June lS — Order for private service — ABC Legal Process Service. June22 — ANswer & Counterclaim of defendant Federated Dept. Stores, Inc., & Jury Trial DEMAND. July9 =— Answer of defendant Saks. Julyl14. — Plaintiffs’ reply to counterclaim of defendant Federated Dept. Stores. July14. — Plaintiffs’ reply to conditional counterclaim of defendant Saks. July19 — Orpber for preliminary pretrial on 9/1/76 at 11:45 a.m. July12 — Plaintiffs’ notice of related cases (cases unnamed). July23 — Plaintiffs’ supplemental notice of related cases (cases: 76-869; 76-867; 76-1110; 76-1363; 76-1429). Date 1976 PROCEEDINGS [Brown /] Aug.11 — Received defendant Saks’ stipulation & proposed order for continuance of preliminary pretrial con- ference. Aug.16 — Stipulation & OrpeR for continuance of preliminary pretrial conference to 9-15-76 at 11:45 a.m. Aug.30 — OrpeER: Related Case to C-76-869-SW, C-76-867-SW, C-76-1363-SW, C-76-1110-SW, and C-76-1429-SC (SW) and reassigned to Judge Williams. 1977 Jan.13) — Orper: both related cases are dismissed in entirety (SW). Jan.13| — JUDGMENT ENTERED, 1/17/77, in favor of defen- dants & against plaintiffs (SW). Mar.28 — Related Cases: C-76-869SW; C-76-867SW; C-76-1363SW; C-76-1110SW; C-76-1429SC; C-77-577; C-76-1671. No. C-77-0576-SW [‘‘Moitie IT’’] MARILYN Morrie, individually, and on behalf of others similarly situated, Plaintiffs, Vv. FEDERATED DEPARTMENT STORES, INC., d/b/a I. MAGNIN & Co., and BULLOCK’s NORTHERN CALIFORNIA; SAKS & COMPANY, d/b/a Saks FIFTH AVENUE and DOES I THroucu XX, Defendants. Date 1977 PROCEEDINGS Mar.21 — Defendants’ Petition for removal from Municipal Court of State of Calif. for County of Santa Clara, Palo Alto-Mountain View Judicial District at Palo Alto, their no. 36909 (copy to MDL Panel). No Pro- cess copy of summons and complaint. Date 1977 Nn PROCEEDINGS [Moitie II] Mar. 21 Mar. 21 Mar. 21 Mar. 21 Mar. 23 Mar. 29 Mar. 28 Mar. 30 April8 April 11 April 26 April 26 May 13 May 16 May 20 May 26 Defendants’ notice of filing petition for removal and bond on removal. Defendants’ $250 bond on removal. Defendants’ Notice of Related Cases: C-76-867-SW; C-76-869-SW; C-76-1110-SW; C-76-1363-SW; C-76-1429-SW; C-76-1210-SW; C-76-1671-SW. Order setting conference on 7/22/77 at 10 a.m. Stipulation-defendants have until 4/14/77 to answer complaint. Proof of service of order setting conference (order of 3/23). ORDER — Determined to be related to: C-76-867; C-76-869; C-76-1110; C-76-1210; C-76-1363; C-76-1429; C-76-1671, and reassigned to Judge Williams (SW). Status conference set for 7/22/77; reset for 7/19/77 at 9:30 a.m. Defendant Saks & Co. notice of motion and motion to dismiss (see C-577-SW [Brown II]): Memo of points and authorities; Exhibits; Proposed Order. Hearing set for Defendants’ motion to dismiss on 5/25/77. Plaintiffs’ notice of motion; motion to remand with supporting papers and proposed order: Affidavit of Offstein; Memo; Exhibits; Proposed Order. PLAINTIFFS’ MOTION TO REMAND reset for 5/25/77 at 10:00 a.m. Defendants Federated Dept. Stores, Saks & Co.’s memorandum of points and authorities in opposi- tion to motion to remand: Exhibits; Proposed order. Plaintiffs’ memorandum of law in opposition to a joint motion to dismiss: Proposed order. Defendants Federated and Saks memorandum in support of motion to dismiss. MINUTE OrDeR of 5/25/77: Defendants’ motion to dismiss and Plaintiff’s motion to remand sub- mitted. Date 1977 PROCEEDINGS [Moitie IT] July6 © — JupGMENT: for Defendant, entered 7/7/77 (SW). July6 §=— Orpber: Denying plaintiffs’ motion to remand and granting Defendants’ motion to dismiss (SW). July7 © — Mailed Judgment and Order to counsel of record. Aug.3 — Plaintiffs’ notice of appeal: Notice sent to counsel Of record; Court of Appeals; Court Reporter. Aug.9 — Plaintiffs’ designation of appeal; Statement of Issues on Appeal. Aug.12 — Defendants’ request for transcript and designation of records on appeal (copy to reporter). Sept. 12 — Made, mailed Record on appeal to Ninth Circuit Court of Appeals. No. C-77-0577-SW [‘‘Brown ITP’] FLOYD R. BRown, individually, and on behalf of others similarly situated, Plaintiffs, Vv. FEDERATED DEPARTMENT STORES, INC., d/b/a I. MAGNIN & Co., and BULLOCK’s NORTHERN CALIFORNIA; Saks & CoMPANY, d/b/a Saks FIFTH AVENUE; AND DOES I THROUGH XX, Defendants. Date 1977 PROCEEDINGS Mar.21 — Petition for Removal Antitrust; no process. Mar.21 — Notice of Filing Petition for Removal & Bond on Removal. Mar.21 — Bond on Removal ($250.00). Mar.21 — Defendants’ Notice of Related Cases to: 76-867; 76-869; 76-1110; 76-1363; 76-1429; 76-1210; 76-1671. Mar.23 — Stipulation extending time to 4-14-77 for Defen- dants to Answer Complaint. Mar.28 — DETERMINED TOBE RELATED TO: C-76-867; 76-869; 76-1110; 76-1363; 76-1429; 76-1210; 76-1671. (SW & RFP). Date 1977 PROCEEDINGS [Brown IT] April8 April 11 April 26 April 26 May 13 May 16 May 20 July 6 July 6 Aug. 3 Aug. 9 Aug. 12 Sept. 12 Sept. 16 Sept. 19 Sept. 21 Nov. 30 Dec. 4 Defendant Saks & Co. notice of motion and motion to dismiss: Memo of points and authorities: Table of contents; Table of authorities; exhibits; Pro- posed Order. Hearing set for Defendants’ motion to dismiss on 5-25-77 at 10:00 a.m. Plaintiffs’ notice of motion; motion to remand with supporting papers and proposed order: Affidavit of Offstein; Memorandum; Exhibits; Proposed order. PLAINTIFFS’ MOTION TO REMAND reset for 5-25-77 at 10:00 a.m. Defendants’ motion to remand, see C-77-576-SW [Moitie IT]. Plaintiffs’ opposition to defendants’ motion to dismiss, see C-77-576-SW [Moitie II]. Defendants’ Federated and Saks memorandum in support of motion to dismiss. See C-77-576-SW [Moitie 11]. JUDGMENT: for Defendant, entered 7-7-77. See C-77-576-SW [Moitie 11]. OrDeER: Denying plaintiffs’ motion to remand and granting Defendants’ motion to dismiss (SW). See C-77-576-SW [Moitie IT]. Plaintiffs’ notice of appeal: Notice sent to counsel of record; Court of Appeals, Court reporter. Plaintiffs’ designation of appeals; statement of Issues on Appeal. Defendants’ request for transcript and designation of records on appeal. (Copy to reporter.) Made, mailed Record of Appeal to Ninth Circuit Court of Appeals. Plaintiffs’ receipt for record on appeal. See C-77-576-SW [Moitie I]. Defendants’ receipt for record on appeal. See C-77-576-SW [Moitie Il]. Receipt from Ninth Circuit for record on appeal. See C-77-576-SW [Moitie II]. Plaintiffs’ bill of cost. See C-77-576-SW [Moitie II]. Defendants’ Objection to bill of cost. Date 1980 PROCEEDINGS [Brown II} Feb. 25 Feb. 25 Mar. 7 Mar. I1 May 5 May 5 May 6 May 27 May 28 June 16 June 26 Sept. 5 Certified Copy of Ninth Circuit Court of Appeals: Judgment of District Court reversed and remand- ed. Costs on appeal will be borne by the respective parties and none will be taxed. 9th CCA Orper: Rehearing — DENIED. 9th CCA OrpER: Memo Disposition of 11-15-79 ‘‘Withdrawn’’; attached Opinion substituted. Clerk’s Notice: Spreading the Mandate. Clerk’s Notice: Spreading the Mandate returned. Stipulation & Orper: (1) Ist pretrial conference previously set for 3-18-80 shall be held on 4/15/80 at 9:30 a.m.; (2) Neither party shall be required to file any further pleadings until after pleading schedule is established at Ist pretrial conference. ANSWER & CONDITIONAL COUNTERCLAIM by defendant Saks & Company. ANSWER & COUNTERCLAIM of defendant Federated Department Stores, and Jury TRIAL DEMAND. PRETRIAL ORDER NO. 1. PLAINTIFFS’ ANSWER TO COUNTERCLAIM. ANSWER by plaintiffs’ & COUNTERCLAIM to defend- ants’ Counterclaim. RECEIVED: Stipulation and proposed order re discovery. STIPULATION & ORDER: Schedule is modified re discovery, as per order. Received letter of counsel for defendant Federated, confirming continuance of status conference set for 9-24-81 until 6-16-81 at 9:00 a.m. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA C 76-1210 FLoyD Brown, individually, and on behalf of others similarly situated, Plaintiffs, Vi FEDERATED DEPARTMENT STORES, INC., d/b/a I. MAGNIN & Co., and BULLOCK’s SOUTHERN CALIFORNIA; SAKS & ComMPANY; d/b/a SAKS FIFTH AVENUE, Defendants. COMPLAINT FOR DAMAGES AND INJUNCTIVE RELIEF UNDER THE FEDERAL ANTITRUST LAWS (JURY DEMANDED) (Filed June 15, 1976) I Jurisdiction And Venue 1. This complaint is filed and these proceedings are in- stituted against these defendants for violation of Section | of the Act of Congress of July 2, 1890, as amended (15 U.S.C. §1), entitled ‘‘An act to protect trade and commerce against unlawful restraints and monopolies’’; commonly known as the Sherman Act. Plaintiffs seek trebled damages and injunctive relief under Sections 4 and 16 of the Clayton Act (15 U.S.C. §§15, 26). This Court has jurisdiction of the subject matter pursuant to 28 U.S.C. §1337. 2. Each of the named defendants or its agents or co- conspirators maintains offices, transacts business, or if found within the Central District of California and is within the jurisdiction of this Court for purposes of service of process. 10 Many of the unlawful acts done in violation of the antitrust laws, as hereinafter alleged, have been performed within the Central District of California. The interstate trade and com- merce described hereinafter is carried on, in part, within the Central District of California. 3. Plaintiff brings this action on behalf of himself and on behalf of all persons similarly situated in Los Angeles and Orange Counties, State of California. The classes which plain- tiff represents are composed of the following: (a) All persons residing in Los Angeles and Orange Coun- ties who during the period from 1963 to present have made retail purchases of women’s clothing from I. Magnin on a charge basis; (b) All persons residing in Los Angeles and Orange Counties who during the period from 1963 to present have made retail purchases of women’s clothing from I. Magnin on a check or cash basis; (c) All persons residing in Los Angeles and Orange Coun- ties who during the period from 1963 to present have made retail purchases of women’s clothing from Bullock’s Southern California on a charge basis; (d) All persons residing in Los Angeles and Orange Counties who during the period from 1963 to present have made retail purchases of women’s clothing from Bullock’s Southern California on a check or cash basis; (e) All persons residing in Los Angeles and Orange Coun- ties who during the period from 1963 to present have made retail purchases of women’s clothing from Saks Fifth Avenue on a charge basis; (f) All persons residing in Los Angeles and Orange Coun- ties who during the period from 1963 to present have made retail purchases of women’s clothing from Saks Fifth Avenue on a check or cash basis. The members of the plaintiff classes are so numerous that joinder in this action is impracticable. The claims of the members of the plaintiff classes, including those of the named plaintiff, involve common questions of law and fact which predominate over any questions affecting only individual class members, and a class action is superior to other methods for the fair and efficient adjudication of this action. The named plaintiff is a purchaser of women’s clothing from I. Magnin, Bullock’s Southern California, and Saks Fifth Avenue. The claims of the named plaintiff are typical of those of the other members of the plaintiff will fairly and adequately protect the interests of the plaintiff classes. Il Plaintiff Plaintiff Floyd Brown is a resident of Laguna Niguel, California. il Defendants Federated Department Stores, Inc. (‘‘Federated’’) is hereby made a defendant herein. Federated is a corporation organized and existing under the laws of the State of Delaware. During the period of time covered by this com- plaint, Federated has engaged in the retailing of women’s clothing in Southern California under the trade name of ‘‘I. Magnin & Co.”’ The principal offices of I. Magnin & Co. are located in San Francisco, California. During the period of time covered by this complaint, Federated has _ also commenced the retailing of women’s clothing in Southern California under the trade name ‘‘Bullock’s Southern California,’’ with principal offices located in Los Angeles, California. (b) Saks & Company (‘‘Saks’’) is hereby made a defen- dant herein. Saks is a corporation organized and existing under the laws of the State of New York, with its principal 12 place of business in New York City. Saks is a wholly owned subsidiary of Gimbel Brothers, Inc. During the period of time covered by this complaint, Saks has been engaged in the retailing of women’s clothing in Southern California under the trade name ‘‘Saks Fifth Avenue.”’ IV Agents And Co-conspirators The defendants, and each of them, at all times mention- ed herein, were the agents of all other defendants, and each of them, and were acting in the course and scope of said agency. Various other corporations and individuals not made defendants in this complaint participated as co-conspirators with the defendants named in the offenses charged herein and performed acts and made statements in furtherance thereof. Vv Trade And Commerce The defendants are among the largest retailers specializ- ing in the sale of women’s clothing in Southern California. They have an image recognized in the women’s clothing in- dustry, and by the consumer, of selling fashionable women’s clothing of quality fabrics and favored styling. In 1973, they accounted for approximately $70 million in retail sales of women’s clothing in Southern California. In the retailing of women’s clothing, the difference be- tween the cost price of an item and its retail price is known as the ‘‘markup.’’ Retailers maintain ‘‘markup lists’? which show the retail price to be charged for items purchased at a given cost level. These markup lists are used by retailers to price items sold to the consumer. 13 Vi Offenses Charged Beginning at least as early as 1963, and continuing thereafter until April 1974, the defendants and co-conspirators engaged in a continuing combination and conspiracy in unreasonable restraint of trade and commerce, in violation of Section ! of the Sherman Act (15 U.S.C. §1). The aforesaid combination and conspiracy has consisted of a continuing agreement, understanding, and concert of ac- tion among defendants and co-conspirators to raise, fix, maintain and stabilize prices charged by defendants for the sale of women’s clothing in Southern California, including Los Angeles and Orange Counties. In formulating and effectuating the aforesaid combina- tion and conspiracy, the defendants and co-conspirators did those things which they combined and conspired to do, in- cluding, among other things, the following: (a) met and engaged in telephone conversations to discuss prospective markups and retail prices for the sale of women’s clothing to customers of defendants; (b) exchanged markup charts used by defendants in establishing the retail price of women’s clothing sold to customers of defendants; (c) established agreed-upon markups and retail prices for the sale of women’s clothing to customers of defendants; and (d) adhered to agreed-upon markups and retail prices for the sale of women’s clothing to customers of defen- dants. Vil Injury To Plaintiffs As a direct and proximate result of the unlawful acts and conduct of defendants and co-conspirators hereinabove alleg- 14 ed, plaintiff and members of the classes have suffered injury in that they have been forced to pay substantial overcharges in retail purchases of women’s clothing. Vill Fraudulent Concealment At all times herein mentioned, the defendants and the co- conspirators took measures to conceal from the plaintiffs and the members of the plaintiff classes the violations hereinabove alleged. The meetings and the exchange of markup charts hereinabove alleged took place in an atmosphere of the strictest secrecy, and were never revealed to anyone other than the representatives of the defendants and the co-conspirators who participated therein. As a result of the defendants’ fraudulent concealment of their violations, the plaintiff and the members of the plaintiff classes were unaware of the ex- istence of the claims alleged herein, and could not, by the ex- ercise of reasonable diligence, have discovered the existence of such claims, until the year 1976. IX Relief Plaintiff and members of the classes seek injunctive relief and damages. Plaintiffs and members of the classes have not yet ascertained the precise dollar amount of said damages; when said amount has been ascertained, plaintiff will ask leave of court to amend this complaint to insert that amount herein, which must be trebled as required by Section 4 of the Clayton Act (15 U.S.C. §15). WHEREFORE, plaintiff prays that the court adjudge, en- join and decree as follows: 1. That this is a proper class action; 2. That defendants and co-conspirators have engaged in an unlawful conspiracy and combination to restrain trade and 15 commerce in women’s clothing in Southern California, in- cluding Los Angeles and Orange Counties, in violation of Sec- tion 1 of the Sherman Act (15 U.S.C. §1); 3. That plaintiff and members of the classes have been proximately injured by reason of one or more of the above alleged unlawful acts; 4. That plaintiff and members of the classes recover damages which, when ascertained, must be trebled as required by Section 4 of the Clayton Act (15 U.S.C. §15); 5. That plaintiff and members of the classes be awarded reasonable attorneys’ fees and costs of litigation as provided by Section 4 of the Clayton Act; 6. That defendants, and each of them, be permanently enjoined and restrained from each and every one of the unlawful practices alleged in the complaint as provided by Section 16 of the Clayton Act (15 U.S.C. §26); 7. That plaintiff and members of the classes be awarded such other and further relief as the court may deem just and proper. DATED: June 10, 1976. Law OFFICES OF JERROLD N. OFFSTEIN JERROLD N. OFFSTEIN JOHN A. KITHAS CHARLES LAMONT SUMMERHAYS & SWOPE LOWELL V. SUMMERHAYS Davip M. SwopE By: /s/ Jerrold N. Offstein JERROLD N. OFFSTEIN LOWELL V. SUMMERHAYS Attorneys for Plaintiffs 16 Pursuant to rule 38, of the Federal Rules of Civil Procedure, jury trial in the instant matter is hereby demanded. DaTeED: June 10, 1976. LAW OFFICES OF JERROLD N. OFFSTEIN SUMMERHAYS & SWOPE By: /s/ Jerrold N. Offstein JERROLD N. OFFSTEIN LOWELL V. SUMMERHAYS Attorneys for Plaintiffs 17 UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA Civil No. C76-1210 RHS FLoYD Brown, individually, and on behalf of others similarly situated, Plaintiffs, V. FEDERATED DEPARTMENT STORES, INC., d/b/a I. MAGNIN & Co., and BULLOCK’s SOUTHERN CALIFORNIA; SAKS & CoMPANY, d/b/a SAKS FIFTH AVENUE, Defendants. ANSWER AND COUNTERCLAIM OF DEFENDANT FEDERATED DEPARTMENT STORES, INC. AND JURY TRIAL DEMAND (Filed June 22, 1976) Defendant Federated Department Stores, Inc., by its attorneys, answers the complaint herein as follows: 1. Admits that plaintiff purports to institute these proceedings and seek relief pursuant to the statutory provisions referred to in paragraph 1. Otherwise, defendant denies the allegations of paragraph 1. 2. Admits that agents of defendants transact business within the Central District of California and are within the jurisdiction of this Court for purposes of service of process. Otherwise, defendant denies the allegations of paragraph 2. 3. Admits that plaintiff purports to bring this action for himself and as a representative of classes for all members thereof, but denies that this action may be properly brought as a class action and that plaintiff is a proper representative of any class. Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations 18 that plaintiff is a purchaser of women’s clothing from I. Magnin & Co., Bullock’s Southern California and Saks Fifth Avenue. Otherewise, defendant denies the allegations of paragraph 3. 4. Defendant is without knowledge or information suffi- cient to form a belief as to the truth of the allegation of paragraph II. 5. Denies that defendant Federated Department Stores, Inc. engaged in the retailing of women’s clothing in Southern California prior to August 29, 1964 and that it does business under the trade name ‘‘Bullock’s Southern California.’’ Otherwise, defendant admits the allegations of the first paragraph of paragraph III and avers that defendant is engag- ed in the retailing of women’s clothing in Southern California under the trade name ‘‘Bullock’s,’’ with. principal offices located in Los Angeles, California. Upon information and belief, defendant admits the allegations of the second paragraph of paragraph III. 6. Denies the allegations of paragraph IV. 7. Admits that defendant’s stores sell fashionable women’s clothing of quality and style in Southern California, admits the first sentence of the second paragraph of paragraph V, and admits, upon information and belief, that some retailers have maintained and used ‘‘markup lists’’ which contain an indicated retail price for items purchased at a given cost level. Otherwise, defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations of paragraph V. 8. Denies the allegations of paragraph VI. 9. Denies the allegations of paragraph VII. 10. Denies the allegations of paragraph VIII and avers that the allegations lack sufficient particularity and do not satisfy the requirements of Rule 9(b) of the Federal Rules of Civil Procedure. 11. Admits that plaintiff purports to seek the relief set forth in paragraph IX. Otherwise, defendant denies the 19 allegations of paragraph IX. No responsive pleading is required to the speculative allegation that plaintiff will seek leave of court to amend the complaint. Defenses As and for additional defenses to the complaint, defendant Federated Department Stores, Inc. states as follows: First Defense 12. The complaint fails to state a claim upon which relief may be granted. Second Defense 13. The claims of plaintiff and those whom he purports to represent (hereinafter collectively referred to as “‘nlaintiffs’’) are barred in whole or in part by the applicable statute of limitations. Third Defense 14. The claims of the plaintiffs are barred in whole or in part by laches. Fourth Defense 15. The complaint, and each and every claim thereof, is not proper for treatment as a class action, by virtue of the following factors, among others: (a) There are no ascertainable classes; (b) The claims of the named plaintiff are not typical of those whom he purports to represent; (c) The named plaintiff will not fairly and adequately protect the interests of those whom he purports to represent; (d) There are no sets of facts common to members of the purported classes; 20 (e) Questions of fact peculiar to each member of the purported classes predominate over facts, if any, which are common to members of the purported classes; (f) The named plaintiff is not the proper representative of the purported classes; (g) The named plaintiff is not interested in the subject matter of the within action; (h) The named plaintiff is not the real party in interest with respect to the subject matter of the within action; and (i) The alleged classes are not manageable. Fifth Defense 16. Plaintiffs sustained no damage to their businesses or property by reason of any act of defendant. Counterclaim 17. This Court has jurisdiction over this counterclaim under the principles of pendent jurisdiction. This counterclaim arises under common law principles. Parties And Offense Charged 18. Counterclaimant is a corporation organized and existing under the laws of the State of Delaware, with principal offices located in Cincinnati, Ohio. Counterclaimant is engaged in retailing in Southern California under the trade names of ‘‘I. Magnin & Co.’’ and ‘‘Bullock’s.’’ 19. This counterclaim is brought against the named plaintiff and, if they are certified to be proper classes herein, those members of the purported classes described in paragraph 3 of the complaint or any other certified class, who made retail purchases from counterclaimant and failed to pay, in whole or in part, for certain such purchases, the amounts of which are still due, owing and unpaid (hereinafter ‘counterclaim defendants’’). Upon information and belief, thousands of members of the purported classes are counterclaim defendants. 21 20. Although payment has been duly demanded, counterclaim defendants have failed to pay their indebtedness to counterclaimant. Damages 21. Each counterclaim defendant is liable’ to counterclaimant for the amount due, owing and unpaid on purchases made from counterclaimant, the full amounts of which are presently unascertained. Prayer For Relief WHEREFORE, defendant and counterclaimant Federated Department Stores, Inc. prays as follows: 1. That the complaint be dismissed with prejudice as to the named plaintiff and all persons whom he purports to represent; 2. That judgment be entered in favor of counterclaimant in the amount of damages determined to have been sustained by counterclaimant; 3. That defendant be awarded its costs of suit herein and reasonable attorneys’ fees; and 4. That defendant be awarded such other relief as this court may deem just and proper. 22 Jury Trial Demand Defendant Federated Department Stores, Inc. demands irial by jury of all issues so triable in this action. Respectfully submitted, ARNOLD & PORTER ABE KRASH JEROME I. CHAPMAN IRVIN B. NATHAN LAWRENCE C. MAISEL 1229 Nineteenth Street, N.W. Washington, D.C. 20036 (202) 872-6750 McKENNA & FITTING PAUL FITTING CHARLES G. MILLER 1920 Mills Tower 220 Bush Street San Francisco, California 94104 (415) 443-0640 By: /s/ Charles G. Miller CHARLES G. MILLER Attorneys for Defendant- Counterclaimant FEDERATED DEPARTMENT STORES, INC. DATED: June 22, 1976 23 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA Civil No. C-76-1210 RHS FLoyp Brown, individually, and on behalf of others similarly situated, Plaintiffs, Ve FEDERATED DEPARTMENT STORES, INC., d/b/a I. MAGNIN & Co., and BULLOCK’s SOUTHERN CALIFORNIA; SAKS & ComPANY, d/b/a SAKS FIFTH AVENUE, Defendants. ANSWER OF DEFENDANT SAKS & COMPANY TO COMPLAINT (Filed July 9, 1976) Defendant SAKs & COMPANY (hereafter ‘‘Saks’’) answers the Complaint herein as follows: 1. Answering Paragraph 1, Saks admits that plaintiff purports to institute these proceedings and seck relief pursuant to the statutory provisions set forth in said paragraph. Except as so admitted, Saks denies the allegations of said paragraph. 2. Answering Paragraph 2, Saks admits thai defendants have agents for the transaction of business within the Central District of California and are within the jurisdiction of this Court for purposes of service of process. Except as so admitted, Saks denies the remaining allegations of said paragraph. 3. Answering Paragraph 3, Saks admits that plaintiff purports to bring this action on behalf of himself and on behalf of an alleged class of persons, but denies that this action may be properly brought as a class action. Saks is without knowledge or information sufficient to form a belief 24 as to the truth of the allegations that plaintiff is a purchaser of women’s clothing from I. Magnin, Bullock’s Southern California, and Saks Fifth Avenue. Saks denies the remaining allegations of said paragraph. 4. Answering Paragraph II, Saks is without knowledge or information sufficient to form a belief as to the truth of the allegations of Paragraph II. 5. Answering Paragraph III, Saks admits the allegations of subparagraph (b) of Paragraph III, and lacks knowiedge or information sufficient to form a belief as to the truth of the remaining allegations of said paragraph. 6. Answering Paragraph IV, Saks denies the allegations of said paragraph. 7. Answering Paragraph V, Saks lacks knowledge or information sufficient to form a belief as to the truth of the allegations of said paragraph, except admits that Saks specializes in the sale of merchandise, including women’s clothing, and that it has an image recognized in the women’s clothing industry and by the consumer of selling fashionable women’s clothing of quality fabrics and favored styling. 8. Answering Paragraphs VI, VII, VIII, and IX, Saks denies each and every of the allegations thereof, except admits that plaintiff purports to seek the relief and damages requested and that plaintiff may ask to amend his complaint as alleged in Paragraph IX. First Affirmative Defense 9. The Complaint fails to state a claim upon which relief can be granted. Second Affirmative Defense 10. The claims of plaintiff and the alleged class are barred in whole or part by Section 4B of the Clayton Act, 15 U.S.C. §15(b), and such state statutes of limitations as may be applicable. 25 Third Affirmative Defense il. The Complaint is barred in whole or in part by laches. Fourth Affirmative Defense 12. The plaintiff and the alleged class have sustained no damage to their business or property by reason of any act of this defendant. Fifth Affirmative Defense 13. The plaintiff and the alleged class lack standing to sue with respect to the claims alleged in the Complaint. Sixth Affirmative Defense 14. The Complaint, and each and every claim thereof, is not proper for treatment as a class action, by virture of the following factors, among others: (a) There is no ascertainable class; (b) There are questions of fact peculiar to each member of the alleged class which predominate over facts, if any, which may be common to members of the alleged class; (c) The alleged class is not manageable; (d) The plaintiff is not a proper representative of the alleged class; (e) The claims of plaintiff are not typical of those they purport to represent. Conditional Counterclaim Defendant and counterclaimant Saks alleges the following counterclaim against members of the purported class. 15. Saks is a corporation duly organized and existing under the laws of the State of New York with its principal place of business in New York, New York. 26 16. Saks is engaged in the business of selling merchandise and services at retail to the general public. 17. The Court has not yet determined whether a class action is to be certified in this action and, if so, which persons shall be included in any such class. A portion of the purported class sought to be certified by plaintiff have entered into charge account agreements with Saks pursuant to which they agreed to pay for merchandise and services purchased from Saks in accordance with the terms set forth in the agreement. Many of these charge account agreements also provide that if a customer fails to make the required payment, the entire outstanding balance is due and owing to Saks, and that if Saks refers the customers accounts to an attorney for collection, the customers will pay Saks’ attorneys fees and court costs. 18. A significant number of the Saks charge account customers who reside in Los Angeles and Orange Counties are in breach of their charge account agreements with Saks because they failed to pay Saks for their purchases of merchandise and services from Saks in accordance with the terms of their charge account agreements. 19. No part of such indebtedness has been paid to Saks although payment has been duly demanded. 20. Accordingly, Saks has claims against a significant number of the members of the purported class sought to be certified. If a class is certified, upon determination of which persons are in the class, this answer will be amended to the extent required to identify the persons against whom the claims exist and the amount of such claims. WHEREFORE, defendant and counterclaimant Saks prays for judgment as follows: 1. That plaintiff take nothing by his Complaint and that the same be dismissed with prejudice; 27 2. That judgment be entered on the Counterclaim of Saks in amounts to be determined plus reasonable attorneys’ fees; 3. For its costs of suit; 4. For such other and further relief as this Court may deem just and proper. DaTED: July 9, 1976. SOLINGER & GORDON EUGENE H. GORDON JOHN C. GROSZ STEINHART, GOLDBERG, FEIGENBAUM & LADAR JAMES T. FOUSEKIS Davip B. ROE By: /s/ James T. Fousekis JAMES T. FOUSEKIS Attorneys for Defendant SAKS & COMPANY 29 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA No. C 76-1210 RHS FLOYD BROwN, individually, and on behalf of others similarly situated, Plaintiffs, Vv. FEDERATED DEPARTMENT STORES, INC., d/b/a I.MAGNIN & Co., and BULLOCK’s SOUTHERN CALIFORNIA; SAKS & ComPANY, d/b/a Saks Fifth Avenue, Defendants. REPLY TO COUNTERCLAIM OF DEFENDANT FEDERATED DEPARTMENT STORES, INC. (Filed July 14, 1976) Plaintiff Floyd Brown, individually, and on behalf of those similarly situated, replies to the counterclaim of defendant Federated Department Stores, Inc. herein as follows: 1. Replying to paragraph 17, plaintiff denies that this Court has jurisdiction over the counterclaim under the principles of pendent jurisdiction. Plaintiff is without knowledge or information sufficient to form a belief as to the truth of the allegation that the counterclaim arises under common law principles. 2. Replying to paragraph 18, plaintiff admits the allegations of said paragraph. 3. Replying to paragraph 19, plaintiff admits that defendant purports to bring the counterclaim against plaintiff and against others who allegedly made retail purchases from counterclaimant and failed to pay, otherwise plaintiff denies the allegations of the first sentence of paragraph 19 insofar as such allegations are directed at plaintiff, and plaintiff is | PREVIOUS PAGE WAS BLANK } 30 without knowledge or information sufficient to form a belief as to the truth of such allegations insofar as they are directed at other individuals denominated ‘‘counterclaim defendants’’ by counterclaimant. Plaintiff is without knowledge or information sufficient to form a belief as to the truth of the allegations in the second sentence of paragraph 19, but denies that any members of the purported classes are counterclaim defendants. 4. Replying to paragraph 20, plaintiff is without knowledge or information sufficient to form a belief as to the truth of the allegations insofar as such allegations are directed at other individuals denominated ‘‘counterclaim defendants’’ by counterclaimant. Plaintiff denies the allegations of said paragraph insofar as they are directed at plaintiff. 5. Replying to paragraph 21, plaintiff denies that plaintiff is liable to counterclaimant for any amounts due, owing or unpaid on purchases made from counterclaimant. Plaintiff is without knowledge or information sufficient to form a belief as to the truth of the allegations insofar as such allegations are directed at other individuals denominated ‘‘counterclaim defendants’’ by counterclaimant. First Affirmative Defense 6. This Court lacks subject matter jurisdiction over the counterclaim. Second Affirmative Defense 7. The counterclaim fails to state a claim upon which relief can be granted. Third Affirmative Defense 8. The claims of counterclaimant are barred in whole or in part by the applicable statute of limitations. Fourth Affirmative Defense 9. The counterclaim is barred in whole or in part by laches. 31 Fifth Affirmative Defense 10. Prior to the filing of the counterclaim herein, counterclaim defendants duly paid, satisfied, and discharged the alleged claim of counterclaimant set forth in the counterclaim herein by full payment to counterclaimant. Sixth Affirmative Defense 11. At all times prior to the filing of the counterclaim herein there existed in the retail clothing business in the City of Los Angeles and surrounding counties in the State of California, including Orange and Los Angeles Counties, a well-established and well-understood custom and usage to the effect that failure by a customer to make the required payment for merchandise or services purchased from counter- claimant pursuant to a charge account agreement would not result in the entire outstanding balance becoming due and owing, as counterclaimant well knew. Any purchases alleged in the counterclaim were made by counterclaim defendants with reference to and knowledge of such custom and usage. Any failure to make payment or any delinquency in payment by counterclaim defendants was in accordance with such custom and usage. Seventh Affirmative Defense 12. At all times prior to the filing of the counterclaim herein, counterclaimant had full knowledge of any failure to make payment or of any delinquency in payment by counterclaim defendants, and waived its right to timely performance by counterclaim defendants under the charge account agreements between counterclaim defendants and counterclaimant in that counterclaimant elected to treat the charge account agreements as viable and binding and thereafter accepted any late payment from counterclaim defendants as satisfactory and full performance. 32 WHEREFORE, plaintiff and counterclaim defendants pray for judgment as follows: 1. That counterclaimant take nothing by its counterclaim and that the same be dismissed with prejudice; 2. That counterclaim defendants be awarded the costs of suit herein and reasonable attorneys’ fees; and 3. That counterclaim defendants be awarded such other relief as this Court may deem just and proper. DaTED: July 13, 1976. Law OFFICES OF JERROLD N. OFFSTEIN JERROLD N. OFFSTEIN JOHN A. KITHAS CHARLES LAMONT SUMMERHAYS & SWOPE LOWELL V. SUMMERHAYS Davip M. Swope By: /s/ Charles Lamont CHARLES LAMONT Attorneys for Plaintiff and Counterclaim Defendants 33 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA No. C 76-1210 RHS FroyD Brown, individually, and on behalf of others similarly situated, Plaintiffs, V. FEDERATED DEPARTMENT STORES, INC., d/b/a I. MAGNIN & Co., and BULLOCK’s SOUTHERN CALIFORNIA; SAKS & CoMPANY, d/b/a SAKS FIFTH AVENUE, Defendants. REPLY TO CONDITIONAL COUNTERCLAIM OF DEFENDANT SAKS & COMPANY (Filed July 14, 1976) Plaintiff Floyd Brown, individually, and on behalf of those similarly situated, replies to the conditional counterclaim of defendant Saks & Company as follows: 1. Replying to paragraph 15, plaintiff admits the allegations of said paragraph. 2. Replying to paragraph 16, plaintiff admits the allegations of said paragraph. 3. Replying to paragraph 17, plaintiff admits the allegations of the first sentence of said paragraph. Plaintiff is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations in said paragraph. 4. Replying to paragraph 18, plaintiff is without knowledge or information sufficient to form a belief as to the truth of said allegations, but denies any breach by plaintiff. 5. Replying to paragraph 19, plaintiff is without knowledge or information sufficient to form a belief as to the truth of said allegations, but denies any indebtedness to Saks. 34 6. Replying to paragraph 20, plaintiff is without knowledge or information sufficient to form a belief as to the truth of the allegations in the first sentence of said paragraph. No responsive pleading is required to the _ speculative allegation in the second sentence of said paragraph that defendant and counterclaimant will amend the answer if a class is certified. First Affirmative Defense 7. This Court lacks subject matter jurisdiction over the counterclaim. Second Affirmative Defense 8. The counterclaim fails to state a claim upon which relief can be granted. Third Affirmative Defense 9. The claims of counterclaimant are barred in whole or in part by the applicable statute of limitations. Fourth Affirmative Defense 10. The counterclaim is barred in whole or in part by laches. Fifth Affirmative Defense 11. Prior to the filing of the counterclaim herein, counterclaim defendants duly paid, satisfied, and discharged the alleged claim of counterclaimant set forth in the counterclaim herein by full payment to counterclaimant. t Sixth Affirmative Defense 12. At all times prior to the filing of the counterclaim herein there existed in the retail clothing business in the City of Los Angeles and surrounding counties in the State of California, including Orange and Los Angeles Counties, a well-established and well-understood custom and usage to the 35 effect that failure by a customer to make the required payment for merchandise or services purchased from counterclaimant pursuant to a charge account agreement would not result in the entire outstanding balance becoming due and owing, as counterclaimant well knew. Any purchases alleged in the counterclaim were made by counterclaim defendants with reference to and knowledge of such custom and usage. Any failure to make payment or any delinquency in payment by counterclaim defendants was in accordance with such custom and usage. Seventh Affirmative Defense 13. At all times prior to the filing of the counterclaim herein, counterclaimant had full knowledge of any failure to make payment or of any delinquency in payment by counterclaim defendants, and waived its right to timely performance by counterclaim defendants under the charge account agreements between counterclaim defendants and counterclaimant in that counterclaimant elected to treat the charge account agreements as viable and binding and thereafter accepted any late payment from counterclaim defendants as satisfactory and full performance. 36 WHEREFORE, plaintiff and counterclaim defendants pray for judgment as follows: 1. That counterclaimant take nothing by its counterclaim and that the same be dismissed with prejudice; 2. That counterclaim defendants be awarded the costs of suit herein and reasonable attorneys’ fees; and 3. That counterclaim defendants be awarded such other relief as this court may deem just and proper. DATED: July 13, 1976. Law OFFICES OF JERROLD N. OFFSTEIN JERROLD N. OFFSTEIN JOHN A. KITHAS CHARLES LAMONT SUMMERHAYS & SWOPE LOWELL V. SUMMERHAYS Davip M. Swope By: /s/ Charles Lamont CHARLES LAMONT Attorneys for Plaintiff and Counterclaim Defendants 37 fa _ UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA No. C 76 867 SW DONNA JEAN WEINBERG, ef ai/., Ww FEDERATED DEPARTMENT STORES, INC. No. C 76 869 SW ELEANOR EISENBERG, ef ¥. FEDERATED DEPARTMENT STORES, No. C 76 1110 SW MARILYN MOITIE, Vv. FEDERATED DEPARTMENT STORES, No. C 76 1363 SW SANDRA G. MUSSER, Ve FEDERATED DEPARTMENT STORES, al., INC. INC. INC. b oJ ’ Plaintiffs, et al., Defendants Plaintiffs, et al., Defendants. Plaintiff, et al., Defendants. Plaintiff, et al., Defendants. 38 No. C 76 1429 SW JUNE MORGAN, Plaintiff, V. FEDERATED DEPARTMENT STORES, INC., ef al., Defendants. Notice Of Notion And Motion Of Defendants Federated Department Stores, Inc. and Saks & Company To Dismiss (Filed July 23, 1976) To PLAINTIFFS AND To THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOotTIcE that on Thursday, September 16, 1976, at 11:00 a.m., in the Courtroom of the Honorable Spencer Williams, 450 Golden Gate Avenue, San Francisco, California defendants Federated Department Stores, Inc. and Saks & Company will move the Court to dismiss the actions herein for failure to state claims upon which relief may be granted pursuant to Federal Rule of Civil Procedure 12(b)(6). This motion is based upon this Notice of Motion, the Memorandum of Points and Authorities in Support of this 39 motion served and filed herewith, the Order of this Court filed on June 25, 1976, and all pleadings, files and records herein. DaTED: July 23, 1976 Respectfully submitted, ARNOLD & PORTER ABE KRASH JEROME I. CHAPMAN IRVIN B. NATHAN LAWRENCE C. MAISEL DouGLas J. COLTON McKENNA & FITTING PAUL FITTING CHARLES G. MILLER By: /s/ Jerome I. Chapman JEROME I. CHAPMAN Attorneys for Defendant FEDERATED DEPARTMENT STORES, INC. STEINHART, GOLDBERG, FEIGENBAUM & LADAR JAMES T. FOUSEKIS Davip B. ROE SOLINGER & GORDON EUGENE H. GorRDON JOHN C. Grosz By: /s/ James T. Fousekis JAMES T. FOUSEKIS Attorneys for Defendant SAKS & COMPANY 4] UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA No. C 76 867 SW DONNA JEAN WEINBERG, ef ai/., Plaintiffs, Ve FEDERATED DEPARTMENT STORES, INC., ef al., Defendants. No. C 76 869 SW ELEANOR EISENBERG, ef al., Plaintiffs, Vv. FEDERATED DEPARTMENT STORES, INC., Defendants. No. C 76 1110 SW MARILYN MOITIE, Plaintiff, Vv. FEDERATED DEPARTMENT STORES, INC., ef al., Defendants. _ PREVIOUS PAGE WAS BLANK | 42 No. C 76 1363 SW SANDRA G. MUSSER, Plaintiff, Vv. FEDERATED DEPARTMENT STORES, INC., ef al., Defendants. No. C 76 1429 SW JUNE MORGAN, Plaintiff, ws FEDERATED DEPARTMENT STORES, INC., ef al., Defendants. PLAINTIFF MARILYN MOITIE’S MEMORANDUM IN OPPOSITION TO DEFENDANTS’ MOTION TO DISMISS (FILED AUG. 6, 1976) 43 TABLE OF CONTENTS We MD oni neko owe os oven I. Il. Ill. IV. INTRODUCTION AND STATEMENT OF ANTITRUST WES Vuk ga et hia Set tte NoN-COMMERCIAL OR RETAIL CONSUMERS HAVE STANDING To SUE For TREBLE DAMAGES UNDER SECTION 4 OF THE CLAYTON ACT................. Hawaii AND Air Pollution Do Not Hoip Tuat ALL CONSUMERS Must HAVE COMMERCIAL INTERESTS To HAVE STANDING To SuE UNDER SECTION 4 OF THE CRAVING cock occ awccecce Dy ge Sng A nes OR ae a Ran CONSUMER PROTECTION Is ONE OF THE PuRPOSES OF THE SHERMAN AcT AND CLAYTON ACT ANTITRUST 5 | ____ caren vaio e Bas 5 hep hata ine ti elise tae ce ne ay AR en ae A a eel bee ev 44 TABLE OF AUTHORITIES CASES: Apex Hosiery Co. v. Leader, 310 U.S. 469 (1940)....... Armour & Co. v. Wantock, 323 U.S. 126 (1944) ....... Broadcasters, Inc. v. Morristown Broadcasting Corp., Boo Bc. GO) CEDLIN.T, TOR so cc ewcies vas Brown v. United States, 54 F.Supp. 663 (S.D. Cal. 1941) Chattanooga Foundry & Pipe Works v. City of Atlanta, ee RE. DS 6 0s os WWE Chae ee eee Cleary v. Chalk, 488 F.2d 1315 (D.C. Cir. 1973) ....... Cohens v. Virginia, 6 Wheat. 246 (1821)............... English v. Ralph Williams Ford, 17 Cal. App. 3d 1038, J te eT.) See tn ees GAF Corp. v. Circle Floor Co., 463 F.2d 752 (2d Cir. TTR Pe re Pree tn ennne General Inv. Co. v. New York Central R.R., 271 U.S. SI kA ree Soe Serene eer Uae ee Goldfarb v. Virginia State Bar, 421 U.S. 773 (1975)..... Hamman vy. United States, 267 F.Supp. 420 (D.Mont. DE Porta eCuN reds settee pee Es el cote us Hawaii v. Standard Oil Co., 405 U.S. 251 (1972) ....... Hawaii v. Standard Oil Co., 431 F.2d 1282 (1970) ...... Hawaii v. Standard Oil Co. 301 F.Supp. 982 (D.Haw. eae Ue Cae OLUNTL 5c abs h a Commissioner v. Sunnen, 333 U.S. 591, 597 (1948). ‘Plaintiffs appear to suggest in their memorandum that res judicata applies only to cases with a long litigation history, amend- ed pleadings, ‘‘unfavored’’ legal theories and an actual trial or other determination of the ultimate substantive factual issues. See Pl. Mem. 4, 7, 15. But it is obvious that none of these qualifica- tions has ever been placed on the doctrine, and plaintiffs do not cite a single case or rule which superimposes any of these qualifica- tions on the basic doctrine. Rather, in their extensive quotations from generalized treatise discussions, plaintiffs clearly acknowledge the applicability of the controlling principles stated in the text, supra, and more fully in defendants’ opening memorandum. 179 — The theories invoked by plaintiffs one month after dismissal could have been raised during the pendency of the prior proceedings.‘ — The judgment dismissing the prior actions ‘‘in their entirety’? was a final judgment of this Court from which the plaintiffs could have appealed but did not do so. The one ‘‘exception’’ raised by plaintiffs concerning the applicability of res judicata herein is their contention that this Court’s dismissal of the prior actions was not ‘‘on the merits.’” As shown in the following section and in defendants’ opening memorandum, however, plaintiffs’ arguments on this point squarely conflict withwell established authority. ‘‘[I]t is well settled that the failure to state a proper cause of action calls for a judgment on the merits ....’’ Bell v. Hood, 327 U.S. 678, 682 (1946). Such a judgment ‘‘on the merits’’ was previously rendered by this Court on the prior, identical claims filed by these plaintiffs. B. This court’s dismissal of the prior actions on the identical claim was a final judgment ‘‘on the merits’’ for purposes of res judicata Plaintiff’s contention that the dismissal of their prior complaints by this Court was not a final judgment ‘‘on the merits’’ rests on three patently insubstantial premises: (1) that the Court must explicitly state that the dismissal was ‘‘with prejudice’’; (ii) that the dismissal was for lack of subject mat- ter jurisdiction; and (iii) that a dismissal for failure to state a claim under Rule 12(b)(6) is not ‘‘on the merits.’’ None of these premises will withstand scrutiny. * Despite the explicit invocation of the California unfair business practices statute in the First Moitie Complaint and discussion of the point in defendants’ memorandum in support of their motion to dismiss that complaint, plaintiffs argue that this theory was not previously raised. Pl. Mem. 14. Plaintiffs do not dispute, however, that all of their present theories cou/d have been raised previouslv. 180 1. Use of the phrase ‘‘with prejudice’’ is not essen- tial to judgment on the merits. Contrary to plaintiffs’ apparent suggestion (Pl. Mem. 2, 8, 16), there is no requirement that, for a dismissal to be ‘‘on the merits,’’ the Court must pronounce the talismanic phrase ‘‘with prejudice.”’ Indeed, the exact opposite is true. Subject only to exceptions not pertinent here, an order dismissing a complaint is deemed to be ‘‘with prejudice’’ unless the Court specifically states the contrary. See Safeway Stores v. Fannan, 308 F.2d 94, 96 (9th Cir. 1962); Rule 41(b), Fed. R. Civ. P. 2. This Court’s prior dismissal order was not based on lack of jurisdiction. There is no merit to the plaintiffs’ assertion that the prior dismissal was for want of subject matter jurisdiction. Pl. Mem. 7, 23. The prior actions were plainly within the subject matter jurisdiction of this Court since they ‘‘arose under’’ the federal antitrust laws. 28 U.S.C. §1337.° This Court, exercis- ing such jurisdiction, explicitly ruled on both the prayer for injunctive relief and the prayer for damages. With respect to the injunctive prayer, there was no dispute that the plaintiffs had standing under Section 16 of the Clayton Act, 15 U.S.C. § 26, since that provision is not limited to persons injured in their ‘‘business or property.’’ See In re Multidistrict Vehicle Air Pollution MDL No. 31, 481 F.2d 122, 130 (9th Cir. 1973), cert. denied sub nom. Morgan v. Automobile Manufacturers Ass’n, Inc., 414 U.S. 1045 (1973). The Court held that ‘‘the plaintiffs are not, under the circumstances here, faced with irreparable future injury which would entitle them to injunctive relief under section 16.”’ Memorandum Order, pp. 12-13. This Court unquestionably exercised jurisdiction in dismissing the prayer for injunctive * The jurisdictional basis for these and the prior related actions is discussed in defendants’ Memorandum of Points and Authorities in Opposition to Plaintiffs’ Motion to Remand, pp. 9-10 and Appen- dix, filed herein on May 13, 1977. 181 relief by applying the law, as interpreted, to the facts alleged in the complaints. The same is true of the Court’s action regarding the prayer for damages. The Court interpreted the antitrust statute under which plaintiffs’ claim arose as requiring a com- mercial injury (i.e., an injury to ‘‘business or property’’) to support a private damage action, and it applied the law as in- terpreted to the facts alleged.° It is incontrovertible that the judgment of this Court on the prior complaints (as to both their injunctive and their damages aspects) was a dismissal for failure to state a claim and was not a dismissal for want of subject matter jurisdic- tion. In asserting the contrary, plaintiffs confuse two concepts which were clearly distinguished by the Supreme Court in Bell v. Hood, supra, at 682: ‘‘Jurisdiction, therefore, is not defeated as respondents seem to contend, by the possibility that the averments might fail to state a cause of action on which petitioners could actually recover. For it is well settled that the failure to state a proper cause of action calls for a judg- ment on the merits and not for a dismissal for want of jurisdiction. Whether the complaint states a cause of ac- tion on which relief could be granted is a question of law and just as issues of fact it must be decided after and not before the court has assumed jurisdiction over the con- troversy. If the court does later exercise its jurisdiction to determine that the allegations in the complaint do not state a ground for relief, then dismissal of the case would be on the merits, not for want of jurisdiction.’’ (Em- phasis supplied.) * The Court’s Memorandum Opinion did not explicitly discuss the state law arguments raised by some plaintiffs, including Moitie, or the Fifth Amendment contention raised by another plaintiff. But the Court is not required to write an opinion on every issue or argument raised. Defendants had extensively argued that the pur- ported state claims should be treated exactly like the other related federal claims. In their briefs on the motion to dismiss, no plaintiff addressed these arguments. 182. See also Dexter v. Equitable Life Assur. Society of U.S., 527 F.2d 233, 236-37 (2d Cir. 1975); Mirin v. Taxi Cab Authority of Clark County, Nevada, 441 F.2d 1123, 1125 (9th Cir. 1971); Weiss v. Los Angeles Broadcasting Co., 163 F.2d 313, 314, 316 (9th Cir. 1947).’ 3. A Rule 12(b) (6) dismissal is a dismissal on the merits. Plaintiffs’ remaining premise, that a motion to dismiss for failure to state a claim under Rule 12(b) (6) is not a judg- ment ‘‘on the merits’’ for res judicata purposes, is equally in- consistent with the foregoing authorities. All of these cases squarely hold that a dismissal for failure to state a claim is a final judgment ‘‘on the merits.’’ See also Exchange Nat. Bank of Chicago v. Touche Ross & Co., 544 F.2d 1126, 1130-31 (2d Cir. 1976) (‘‘judgments under Rule 12(b) (6) are on the merits with res judicata effects ....’’). This was made particularly clear in the Ninth Circuit’s Mirin case. In the decision cited above, the Court of Appeals, applying Rule 12(b)(6), affirmed the District Court’s dismissal of an action brought by certain taxi owners to enjoin a state taxi ownership allocation plan on the theory that the plan contravened the plaintiffs’ Fifth and Fourteenth Amendment rights. Shortly thereafter, the same plaintiffs filed another suit in the District Court raising essentially the same claims. On appeal from dismissal of the second suit on grounds of res judicata, plaintiffs argued that the prior action was not ‘‘on the merits.”” The Ninth Circuit flatly rejected this assertion. Mirin v. Nevada ex rel. Public Service Comm’n, 547 F.2d 91 (9th Cir. 1976) (‘‘Mirin IP’). Noting its holding in Mirin / ’ The relevant portions of these opinions are set out in the Ap- pendix to defendants’ Memorandum of Points and Authorities in Opposition to Plaintiffs’ Motion to Remand, filed herein on May 13, 1977. 183 that the complaint should be dismissed for failure to state a claim upon which relief could be granted, the Court held: ““We conclude the District Court did not err in holding that Appellants’ federal questions and claims in these proceedings were barred under the Doctrine of Res Judicata. The valid and jinal Judgment in Mirin-1 operates as an absolute bar to a second suit between the same parties or their privies based on the same cause of action not only in respect of every matter actually litigated, but also as to every ground of recovery or defense which might have been presented.’’ 547 F.2d at 94. (Emphasis supplied.) Numerous other cases supporting the principle that a dismissal for failure to state a claim is ‘‘on the merits” for res judicata purposes were referred to in defendants’ opening memorandum in support of the present motion to dismiss. Def. Mem. 11-12.* Plaintiffs attempt to brush aside these cases (as well as other cases cited by defendants in other con- texts) by pointing to irrelevant factual differences and nonex- istent distinctions. For example, plaintiffs seek to distinguish Hall v. Tower Land and Investment Co., 512 F.2d 481 (Sth Cir. 1975),° on the ground that ‘‘there was a specific finding of jurisdiction in "It is clear that the effect of this Court’s prior dismissal of the related cases for res judicata purposes is governed by federal law. Kern v. Hittinger, 303 F.2d 333, 340 (2d Cir. 1962). Indeed, the quotation from Moore relied on by plaintiffs (Pl. Mem. 25-26) specifically states that the effect of a dismissal for res judicata pur- poses is determined by ‘‘the procedural law of the forum’ — £2... the court rendering the judgment. Accordingly, although we believe that California law is essentially the same as federal, plaintiffs’ ex- tensive excerpts from a California treatise are not germane here. * In Hall, the Court of Appeals held ‘‘that granting defendant’s motion to dismiss for plaintiff’s failure to state a claim upon which relief can be granted operates as an adjudication on the merits, and the appellate court will not go behind the order to determine precisely which issues the trial court decided.’’ 512 F.2d at 483. 184 the district court.”” Pl. Mem. 7. But, as we have already noted, this Court clearly had and exercised jurisdiction over the prior cases involved here. Similarly, plaintiffs urge this Court to ignore Bartsch v. Chamberlin Co. of America, Inc., 266 F.2d 357 (6th Cir. 1959), on the grounds that that case involved ‘‘protracted litigation’? and the prior action was dismissed ‘‘with preju- dice.’’ Pl. Mem. 8. But the prior action here was also dismiss- ed with prejudice. There is nothing in the Sixth Circuit’s per curiam opinion in Bartsch to suggest that the Nistrict Court had in fact used the magic words ‘‘with prejudice’’ in dismiss- ing the prior suit; nor is there any indication that the litiga- tion was ‘‘protracted.’’'° Moreover, it is noteworthy that, in quoting excerpts from 1B Moore, Federal Practice | 0.409[1] (Pl. Mem. 25-26), plaintiffs jump from page 1003 to page 1009, leaving out the following clear statement of ‘‘blackletter law’’ on page 1005: ‘And it is well settled that a judgment dismissing a com- plaint on a general demurrer or its modern substitute under the Federal Rules — a motion to dismiss for failure to state a claim upon which relief can be granted — and without the reservation of any issue, is presumed to be upon the merits, unless the contrary appears of record or is stated in the decree, and the judgment has the same effect of res judicata as though rendered after trial in a subsequent suit on the same claim.’’ (Emphasis supplied.) The dismissal in the prior cases in this Court was not based on jurisdictional grounds, nor was it based on failure to comply with a technical or procedural requirement of filing or pleading form. The dismissal followed a full exchange of pleadings, a full exchange of briefs and arguments on con- No point will be served in reviewing case-by-case all the rambl- ing and spurious ‘‘distinctions’’ urged by plaintiffs. Pl. Mem. 3-13. The cases cited by defendants speak fov themselves, and each case fully supports the proposition for which it was cited. 185 trolling points of law, and a carefully considered opinion by this Court. Although they could have done so, plaintiffs did not urge their present theories while the action was pending, did not seek leave to amend the complaint, did not ask for a ruling that the dismissal be ‘‘without prejudice,’’ did not seek rehearing, and did not appeal. Under sound principles of judicial administration, there can be only one class or subclass recovery, if any, arising out of defendants’ alleged conspiracy and overcharges. Litigation seeking that recovery originated in this Court and is now pro- ceeding in the Ninth Circuit. Plaintiffs and their counsel have purposely excluded themselves from such litigation. They have no legitimate grounds for complaining when well established principles of law and sound judicial policy bar them from in- itiating duplicative and conflicting litigation. Indeed, any other result would open a Pandora’s box by permitting any disappointed litigant to burden courts and Opposing parties alike with repetitive complaints in which superficial and cosmetic changes have been made. 186 Ill Conclusion For the foregoing reasons and those stated in defendants’ Opening memorandum, defendants’ motion should be granted and these cases should be dismissed on grounds of res judicata. DaTED: May 20, 1977 Respectfully submitted, ARNOLD & PORTER ABE KRASH JEROME I. CHAPMAN LAWRENCE C. MAISEL PAUL C. BEsozzI McKENNA & FITTING PAUL FITTING CHARLES G. MILLER By: /s/ JEROME I. CHAPMAN Jerome I. Chapman Attorneys for Defendant FEDERATED DEPARTMENT STORES, INC. STEINHART, GOLDBERG, FEIGENBAUM & LADAR JAMES T. FOUSEKIS DONALD E. KELLEY, Jr. SOLINGER & GORDON EUGENE H. GorRDON JOHN C. Grosz By: /s/ JAMES T. FOUSEKIS James T. Fousekis Attorneys for Defendant SAKS & COMPANY 187 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA No. C-77-0576 SW MARILYN MoOITIE, et al., Plaintiffs, Vv. FEDERATED DEPARTMENT STORES, et al., Defendants. No. C-77-0577 SW FLoyD R. Brown, et al., Plaintiffs, V. FEDERATED DEPARTMENT STORES, et al., Defendants. ORDER DENYING PLAINTIFFS’ MOTION TO REMAND AND GRANTING DEFENDANTS’ MOTION TO DISMISS (Filed July 6, 1977) Defendants have removed plaintiffs’ actions to this Court and have moved for an order dismissing plaintiffs’ com- plaints, which has been followed by plaintiffs’ motion to re- mand. The disposition of these motions requires an extensive review and analysis of the origins and substance of these complaints. Facts On April 28, 1976, the United States filed a civil com- plaint and a criminal indictment against defendants in_ this present action, both of which alleged that defendants engaged 188 in a price fixing conspiracy from 1963 to April, 1974, in viola- tion of Section 1 of the Sherman Act.' Plaintiff Moitie filed a class action complaint in Superior Court for Santa Clara County against the defendants in the present action on May 6, 1976. This first Moitie complaint also charged defendants with engaging in a price fixing conspiracy during the same period of time alleged by the government. The allegations of plaintiff Moitie relied heavily on those contained in the government’s complaint. Specifically, plaintiff’s allegations entitled ‘‘Trade and Commerce,”’ ‘‘Offenses Charged,’’ and ‘“Effects,’’ were almost verbatim repetitions of those prepared by the government. The significant difference is that plaintiff Moitie did not make reference to the Sherman Act, but in- stead charged defendants with violating Section 16720 of the California Business and Professions Code (the Cartwright Act). Plaintiff sought treble damages calculated on a base figure in excess of $5,000, fees and costs, and injunctive relief. Defendants subsequently removed plaintiff’s action to this Court, claiming both diversity of citizenship and federal question jurisdiction, on June 1, 1976. Plaintiff did not move to remand her action to state court. On June 15, 1976 plaintiff Brown filed a class action complaint in this Court against the defendants in the present action. Plaintiff Brown, also relying on the ‘‘Trade and Com- merce,’’ and ‘‘Offenses Charged,’’ allegations contained in the government’s complaint and indictment, charged defen- dants with engaging in a price fixing conspiracy during the same period alleged by the government, in violation of Sec- tion | of the Sherman Act, the same charge alleged by the government. Plaintiff Brown sought unspecified treble damages, fees and costs pursuant to Section 4 of the Clayton Act, and injunctive relief pursuant to Section 16 of the Act. ' United States v. Federated Dept. Stores, Inc., et al., C-76-858 RHS; United States v. Federated Dept. Stores, Inc., et al., CR-76-236 SAW. The criminal action has been concluded; the civil action is still pending in this Court. 189 The Moitie and Brown cases were consolidated, along with five other related class actions, and defendants moved to dismiss all seven complaints for failure to state a claim on which relief could be granted. On January 11 and 12, 1977 this Court entered orders granting defendants’ motion and dismissing all seven actions for failure to allege sufficient standing to sue. Specifically, the Court dismissed the Section 4 Clayton Act claims because the plaintiffs failed to show an injury to a competitive interest in a business in which they were engaged. The Section 16 claim was dismissed because the plaintiffs were not, under the circumstances of their suits, faced with irreparable injury which would entitle them to in- junctive relief. The five other cases appealed and are now pending in the Ninth Circuit. Plaintiffs Moitie and Brown chose not to ap- peal, and filed new class action complaints in state municipal court on February 13 and 17, 1977, respectively. These new complaints are also in many respects identical to those previously filed by the plaintiffs and to the complaint and in- dictment filed by the government. The new complaints are against the same defendants, allege the same unlawful act (engaging in a price fixing conspiracy) during the same time period (1963 to April, 1974), are brought on behalf of essen- tially the same classes of plaintiffs as the previous com- plaints,’ and incorporate the same ‘‘Trade and Commerce,”’ “Offenses Charged,”’ and ‘‘Effects,’’ allegations contained in the government complaint and indictment. Unlike their previous complaints, the present Moitie com- plaint makes no mention of the Cartwright Act and the Brown complaint makes no reference to the Sherman and Clayton Acts. Instead, both complaints allege four identical causes of action — fraud and deceit, unfair business practices, civil conspiracy, and restitution of moneys had and received * The new Brown complaint adds four additional classes of plain- tiffs residing in four California counties. 190 — which were not included in their previous complaints. The second Moitie and Brown complaints also differ from their first complaints in that injunctive relief is not sought and the amount of damages claimed is now not less than $600 per person. Motion To Remand Defendants have removed the second Moitie and Brown complaints to this Court on the basis of diversity of citizen- ship and federal question jurisdiction. In their motion to re- mand, plaintiffs concede diversity, but deny that the amount in controversy exceeds $10,000 and argue that their com- plaints do not assert claims arising under the Constitution or laws of the United States. As defendants correctly state in their Opposition to plaintiffs’ motion to remand, these com- plaints may be properly removed to this Court, regardless of the amount in controversy, if they could have been originally brought in a federal court without meeting any minimum amount in controversy (A/len v. New York, 15 F.2d 532, 533 (4th Cir. 1926). Wright, Federal Practice and Procedure, § 3725, P. 660). Defendants argue that since the present com- plaints arise under federal antitrust legislation, Title 28 U.S.C. § 1337,’ which has no jurisdictional amount requirement, ap- plies and plaintiffs’ complaints may be removed without meeting the $10,000 amount in controversy requirement. The issue concerning removal is then whether the plain- tiffs are asserting claims which are founded on rights resting on federal antitrust laws, and which could have originally been brought in federal court without meeting any minimum amount in controversy. It is an established principle that in the absence of a fraudulent purpose to defeat removal, the plaintiff by the ‘The district courts shall have original jurisdiction of any Civil action or proceeding arising under any Act of Congress regulating commerce or protecting trade and commerce against restraints and monopolies.’’ 28 U.S.C. § 1337. 19] allegations of his complaint determines its status with respect to removability (Great Northern Ry. Co. v. Alexander, 246 U.S. 276 [1918]). Removability does not depend on any allegations which defendant might make in a responsive pleading or in his removal petition (CArysler Credit Corp. v. Ralph Williams Gulfgate Chrysler-Plymouth, 329 F .Supp. 644, 647 [S.D. Tex. 1971]). Accordingly, a plaintiff may defeat removal to the federal courts by avoiding allegations which provide a basis for the assertion of federal jurisdiction (Jones v. General Tire & Rubber Co., 541 F.2d 660 [7th Cir. 1976]), but a plaintiff may not defeat removal by employing artful pleading to cast his claim, the essence of which is a federal right, in terms of state law (State of New York vy. L. 1115 J. Bd., N.H. & HED, 412 F.Supp 720, 722 [E.D. N.Y. 1976}). As noted in the analysis section above, allegations con- tained in the civil complaint and criminal indictment Originally filed by the United States against defendants have remained consistent elements of the first and second complaints filed by plaintiffs Moitie and Brown. In relying on these allegations, plaintiff Moitie cast the character, and hence determined the removability status, of her first complaint. Although the first Moitie complaint asserted a violation of California state law, defendants removal to this Court was not met by plaintiff’s motion to remand, though this option was considered by plaintiff’s counsel.‘ The first Brown complaint was subse- quently filed with this Court, alleging exactly the offense (violation of Section 1 of the Sherman Act) as was alleged in the complaint and indictment filed by the United States. Just as plaintiff Moitie cast the character and determined the removability status of her first complaint by relying on * During the proceedings on defendants’ motion to extend time to answer plaintiff’s complaint, the following colloquy took place: ‘Judge Renfrew: . . . You say you think you have a basis for a motion to remand? ‘“Mr. Offstein (Counsel for Moitie): | would like to find out if there are facts upon which to found a basis.” (Transcript, June 3, 1976, p. 11). 192 allegations contained in the complaint and indictment filed by the United States, plaintiffs Moitie and Brown have now done the same with respect to their second complaints by their con- tinued reliance on these government allegations. Artful pleading by plaintiffs which adds four new state causes of ac- tion and deletes specific reference to violations of federal an- titrust laws cannot convert their essentially federal law claims into state law claims. From start to finish, plaintiffs have essentially alleged violations by defendants of federal antitrust laws. Plaintiffs complaints were properly removed to this Court because they concerned federal questions which could have been originally brought in Federal District Court without satisfying any minimum amount in controversy. Therefore, plaintiffs motion to remand to state court is denied. Motion To Dismiss The above analysis of plaintiffs’ first and second com- plaints demonstrates that they involve the same parties, the same alleged offenses, and the same time periods. This Court dismissed plaintiffs’ first complaints for failure to allege suffi- cient standing to sue. Given the similar identity of the first and second complaints, the doctrine of res judicata requires the application of the dismissal of the first complaints to their successors which are now before the Court. Defendants’ mo- tion to dismiss plaintiffs’ complaints is granted. IT Is So ORDERED. DaTED: June 30, 1977 /s/ Spencer Williams SPENCER WILLIAMS United States District Judge 193 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA NO. C-77-0576 SW MARILYN MolITIE, et al., Plaintiffs, ¥. FEDERATED DEPARTMENT STORES, et a., Defendants. NO. C-77-0577 SW FLoyD R. Brown, et al., Plaintiffs, Vv. FEDERATED DEPARTMENT STORES, et al., Defendants. Judgment (Filed July 6, 1977) IT Is ORDERED that judgment be entered for defendants. DATED: June 30, 1977 /S/ SPENCER WILLIAMS United States District Judge —— 195 Original Decision of the Court of Appeals Filed November 1, 1979 IN THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT No. 77-3101 [Do Not Publish] MARILYN Moitig, Individually, and on behalf of others similarly situated, Appellants, Vv. FEDERATED DEPARTMENT STORES, INC., d/b/a I. MAGNIN & Co., and BULLOCK’s NORTHERN CALIFORNIA; SAKS & Company d/b/a Saks FirTH AVENUE; and Dogs | through XX, Appellees. FLoyD R. BRown, Individually, and on behalf of others similarly situated, Appellants, V. FEDERATED DEPARTMENT STORES, INC., d/b/a I. MAGNIN & Co. and BuLLocK’s; Saks & COMPANY d/b/a Saks FIFTH AVENUE; and Does | through XX, Appellees. Appeal from the United States District Court for the Northern District of California MEMORANDUM Before: WriGHT and TANG, Circuit Judges, and JAMESON, Senior District Judge.* This appeal presents a complex and novel issue related to the doctrine of res judicata: when several cases are consolidated for trial with some but not all of the plaintiffs appealing successfully, is the first decision res judicata as to those plaintiffs who did not appeal? Under the facts of this * Of the District of Montana. | PREVIOUS PAGE WAS BLANK | 196 case, we hold that the interests of justice require that the entire decision be rendered inoperative, and we therefore reverse and remand. FACTS In April 1976 the government brought antitrust actions against defendant department stores alleging price fixing on women’s clothing in northern California. Shortly thereafter several private parties filed antitrust actions against the same defendants, incorporating the government’s allegations in their complaints. Appellant Moitie filed a complaint in state court in May 1976 (Moitie 1). Defendants removed the action to federal court, where it was consolidated with several related actions, including that of appellant Brown. In January 1977 the district court decided the consolidated case for the defendants. The decision is reported at 426 F. Supp. 880. The district judge held that the plaintiffs, as private parties, lacked standing to sue under § 4 of the Clayton Act, 15 U.S.C. § 15. He dismissed the complaints for failure to allege specific standing to sue. Only five of the seven losing plaintiffs appealed. Appellants Moitie and Brown did not. While the five appeals were pending before this court, the Supreme Court decided Reiter v. Sonotone Corp., U.S. , 99 S. Ct. 2326 (1979). The Court held that a private party may have standing to sue for antitrust violations under § 4 of the Clayton Act. Pursuant to Reiter, we reversed and remanded the five cases pending before us, for a determination in the trial court consistent with Reiter.’ ‘The original consolidated case is reported under the name Weinberg v. Federated Department Stores. This court reversed the trial court by an order filed June 25, 1979, which read: Following oral argument on December 7, 1978, this court ordered that submission of this appeal should be withheld pending action by the United States Supreme Court in Reiter 197 As noted, appellants Moitie and Brown did not appeal the 1977 decision. Rather, they filed new actions in state court, alleging state causes of action for defendant’s price- fixing. Defendants moved for removal to federal court, asserting that the state law claims were really disguised federal antitrust claims. The district court agreed with defendants and removed the actions. It then dismissed them on the basis of res judicata, these parties and their claims having already been decided in Moitie I. Judgment of dismissal was entered on July 7, 1977. ISSUES PRESENTED? Appellants first contend that removal was improper because they stated a valid state claim. We disagree. The court below correctly held that the claims presented were federal in nature, -arising solely from price fixing on defendants’ part. In light of our disposition of this appeal, appellants will not quarrel with the result. The controlling issue is the continuing validity of Moitie J for res judicata purposes. Now that the decision in Moitie 1 has been effectively reversed by this court, should the decision in Moitie II which cited Moitie I as res judicata also be reversed? RES JUDICATA We begin with the rule of law that, when a decision has been reversed on appeal, it cannot control subsequent cases as v. Sonotone Corp., 579 F.2d 1077 (8th Cir. 1978). On June 11, 1979 the Supreme Court decided Reiter vy. Sonotone Corp., U _, 47 U.S.L.W. 4672. It Is ORDERED that the judgments of the district court are reversed, and the cause is remanded for further proceedings in light of Reiter v. Sonotone C orp. * The parties have devoted their briefs and oral arguments to the removal issue. They have not briefed the res judicata question, even after invitation to do so. 198 res judicata. The Supreme Court implied this in Butler v. Eaton, 141 U.S. 240 (1891). The present doctrine is summarized by Professor Moore: When a judgment has been subjected to appellate review, the appellate court’s disposition of the judgment generally provides the key to its continued force as res judicata and collateral estoppel. A judgment that has been vacated, reversed, or set aside on appeal is thereby deprived of all conclusive effect, both as res judicata and as collateral estoppel. 1B Moore’s Federal Practice (2d ed.) 4 0.416[2], p. 2231.° Under this doctrine, if appellants had appealed from the judgment in Moitie I, we would now reverse it in Moitie II. Because they did not appeal Moitie 1, however, that judgment has technically never been reversed as to them. A strict application of the doctrine of res judicata would preclude our review of the instant decision. Such a technical application of the doctrine ignores the obvious fact that the decision in Moitie J, if not the judgment as to these two appellants, has been reversed. Such technical application of procedural rules defeats our real purpose, which is to do justice. As with the other five plaintiffs whose cases were consolidated in Moitie 1, appellants Brown and Moitie should have their day in court. Had the district court known of the Supreme Court’s disposition in Reiter, and of our subsequent reversal of Moitie J, it would not have dismissed the instant actions on res judicata grounds. An appellate court must do what is necessary to render substantial justice. Ashcraft v. Tennessee, 322 U.S. 143 (1944). ‘‘In disposing of cases before us it is our responsibility ‘The same conclusion was reached in McDonald v. McDonald, 53 Wis.2d 371, 192 N.W.2d 903 (1972): The reversal of a judgment which is a basis of a claim of res judicata in a later action warrants reversal of the finding of res judicata in the later action. 192 N.W.2d at p. 912. if 199 to make such disposition as justice may require.”’ Id., at p. 156. Because the instant dismissal rested on a case that has been effectively overruled, justice requires that the dismissal be reversed.* We remand to the district court for proceedings consistent with the holding in Reiter, supra. REVERSED AND REMANDED. * We are also mindful of the fact that Moitie J was dismissed for want of standing to sue. No court has ever considered these actions on the merits. 201 IN THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT No. 77-310] MariLyN Moitig, Individually, and on behalf of others similarly situated, Appellants, Vi FEDERATED DEPARTMENT Stores, INC., d/b/a 1. MAGNIN & Co., and BULLOCK’s NORTHERN CALIFORNIA: SAKS & ComPANy, d/b/a Saks FIFTH AVENUE; and Dogs | through XX, Appellees. FLoyD R. Brown, Individually, and on behalf of others similarly situated, Appellants, i — 4 FEDERATED DEPARTMENT STorRES, INC., d/b/a I. MAGNIN & Co. and BuLLock’s; Saks & Company d/b/a SAKs FIFTH AVENUE; and Does | through XxX, Appellees. _——_—— Appeal from the United States District Court for the Northern District of California PETITION FOR REHEARING (Filed November 28, 1979) PREVIOUS PAGE WAS BLANK | 202 TABLE OF AUTHORITIES CASES: PAGE Ackerman v. United States, 340 U.S. 193 (1950) ...... Annat v. Beard, 277 F.2d 554 (Sth Cir.), cert. denied, SC PD cc cere ccc weccaces, Barzin v. Selective Service Local Board No. 14, 446 F.2d a Butler v. Eaton, 141 U.S. 240 (1891)........0..0200...... Clouatre v. Houston Fire & Cas. Co., 229 F.2d 596 (Sth ese as be ewsebicen Hester v. Woodruff, 327 U.S. 726 (1946)... ....0...... Reed v. Allen, 286 U.S. 191 (1932) ......0000000..... Ripperger v. A.C. Allyn & Co., 113 F.2d 332 (2d Cir.), cert. denied, 311 U.S. 695 (1940) .......0.0....... Steward Securities Corp. v. Guaranty Trust Co., 597 F.2d 240 (10th Cir. 1979)... 0... .0. 0.0.00... 0. eee, Title v. United States, 263 F.2d 28 (9th Cir.), cert. denied, 359 U.S. 989 (1959)... 0. ee eee 203 PETITION FOR REHEARING Appellees respectfully petition this Court for rehearing of the decision entered herein on November 15, 1979, reversing the district court’s dismissal of these cases on grounds of res judicata. That decision was predicated upon this Court’s determination of a legal issue which was not briefed or argued by the parties — namely, whether the reversal on appeal of the five related Weinberg cases should preclude the normal application of res judicata to the dismissal of the first Moitie and Brown cases, from which no appeal was taken.' More importantly, this Court’s holding with respect to that issue is in conflict with the controlling decisions of the Supreme Court and other established preeedents. As we discuss below, it is well settled that a party who deliberately determines not to appeal from an adverse judgment cannot escape the res judicata effects of that judgment, even if a closely related or consolidated judgment is subsequently reversed on appeal. See Reed v. Allen, 286 U.S. 19] (1932); Ackerman v. United States, 340 U.S. 193 (1950); Annat vy. Beard, 277 ¥.2d 554 (Sth Cir.), cert. denied, 364 U.S. 908 (1960). If the law were otherwise, whenever a district. court decision applied to a number of cases, only one party would have to appeal, leaving the others free to pursue other courses of action, comfortable in the knowledge that they would still benefit from any reversal, notwithstanding their calculated avoidance of the court of appeals. The finality of judicial determinations which the doctrine of res Judicata seeks to secure would be seriously jeopardized by such a distortion of the appellate process. We respectfully note that, contrary to the statement in footnote 2 to the Court’s opinion, the parties did brief the general issue of res judicata. See Briet of Appellees, pp. 2, 11-12, 27-39. However, we are aware of no invitation to brief the specific issues on which the Court based its decision. Moreover, in light of the Supreme Court decisions and other precedents discussed herein, the parties could not have anticipated that the Court would be interested in the question of the impact of the reversal of the appealed cases upon the unappealed Moitie and Brown cases. 204 Reed v. Allen, supra, involved a series of lawsuits concerning disputed rights to certain real estate, the determination of which depended upon the construction of a particular will: Case No. 1 — In the first action, A and B were required to interplead their claims for the rents collected on the disputed property. The trial court ruled that B was the proper owner under the will, and A appealed. Case No. 2 — While the appeal was pending, B brought an action in ejectment against A to obtain a declaration of title to the property. Relying solely on the judgment in the first action, the trial court granted B the relief sought. A could have appealed, but chose not to do so. Reversal of Case No. 1 — Subsequently, the appellate court reversed the decision in the first action, which A had appealed, and held that A, not B, was the proper owner of the disputed property and therefore entitled to the rents. Case No. 3 — Following this decision, A brought a suit against B for ejectment, claiming that title to the property should be his, in accordance with the appellate decision in Case No. |. The Supreme Court held that this action was barred, on grounds of res judicata, by virtue of the decision in Case No. 2, which A failed to appeal. Even though the judgment in Case No. 2 was based entirely on the judgment in Case No. 1, which was later reversed, A’s failure to appeal rendered the judgment in Case No. 2 a bar to his obtaining relief in the third suit. The Court made it clear that, had A appealed the decision in Case No. 2, he could have been relieved of the effect of that judgment. But his failure to appeal required application of the principles of res judicata. The Court stated (286 U.S. at 198): ‘The judgment in the ejectment action [Case No. 2) was final and not open to assault collaterally, but subject to impeachment only through some form of. direct attack. . . . [I]t is hardly necessary to say that jurisdiction 205 to review one judgment gives an appellate court no power to reverse or modify another and independent judgment. If respondent, in addition to appealing from the decree [Case No. 1], had appealed from the judgment [Case No. 2], the appellate court, having both cases before it, might have afforded a remedy. Butler v. Eaton, 141 U.S. 240. But this course respondent neglected to follow.”’ The present case is an even stronger one than Reed for application of res judicata. There might have been a strong justification for avoiding res judicata in Reed in order definitively to resolve the issue of title to the disputed property, but no such justification exists here. Moreover, plaintiffs here seek to be the windfall beneficiaries of an appellate reversal procured by other parties, not, as in Reed, a reversal in a related case procured by the same affected party. Additionally, the failure to appeal in Reed ray have been caused by negligence or a mistaken belief that A had adequately protected his rights by the first appeal. Here the failure to appeal was a deliberate, calculated act, as part of appellants’ attempt to circumvent the district court’s judgment and bring their camouflaged antitrust claims into state court. If a relaxation of the doctrine of res judicata for sympathetic reasons was not deemed permissible in Reed, a fortiori, the overriding of so basic a doctrine is not permissible here. As the Supreme Court has made clear, there is “‘no principle of law or equity which sanctions the rejection by a federal court of the salutary principle of res judicata ....’ Hester vy. Woodruff, 327 U.S. 726, 733 (1946). A conscious decision not to appeal was also the critical factor in the Supreme Court’s decision in Ackerman v. United States, 340 U.S. 193 (1950). In that case, three related individuals had been ordered deported on the ground that they had procured their naturalization by fraud. Their cases had been consolidated in the trial court, and the evidence was essentially the same for all three. One of them, Keilbar, appealed; the Ackermans did not appeal. After Keilbar won a reversal on his appeal, the government having stipulated that 206 it had not presented sufficient evidence, the Ackermans sought to reopen the judgments against them. They argued that, as reflected in the decision on Keilbar’s appeal, the judgments were erroneous, and they offered various grounds to justify their failure to appeal. However, the Supreme Court refused to grant the requested relief. It held that — in light of their ‘‘voluntary, deliberate, free, untrammeled choice ... not to appeal’’ (340 U.S. at 200) — the petitioners were bound by the judgments against them, notwithstanding the fact that the result would have been different had they chosen to appeal. The same principles were relied upon to support the application of res judicata in another case analogous to the case at bar, Annat v. Beard, 277 F.2d 554 (Sth Cir.), cert. denied, 364 U.S. 908 (1960). Annat was the defendant in one of several condemnation proceedings brought by the United States to acquire land for a national park. In_ these proceedings, which were tried together before the same district court, two different survey maps were offered to describe the various tracts in question. The district court adopted survey A, which designated a twenty percent smaller area for Annat’s land than survey B. Several defendants appealed from the final judgment of condemnation, but Annat did not appeal. On appeal, the Fifth Circuit held that survey B should have been adopted as the basis for determining the land taken and the amount of compensation. Thereafter, Annat brought an action for ejectment against the park superintendent, claiming that he was in unlawful possession of that portion of the land shown as belonging to Annat on survey B, but not on survey A. The district court granted summary judgment against Annat and also denied a motion for relief from the original condemnation judgment. The court of appeals affirmed. The court assumed that, if Annat had appealed from the Original judgment, ‘‘she would have obtained the same successful result as did the appealing defendants. ... But Mrs. Annat did not appeal.’’ (277 F.2d at 558.) The court noted that ‘‘/aJ reversal on appeal does not inure to the 207 benefit of those who did not join in the appeal unless the interests of the non-appealing parties are so interwoven and dependent as to be inseparable.’’ (/d.) (Emphasis supplied.) Accordingly, the court concluded that ‘‘the principle of res judicata requires us to hold that the situation of Mrs. Annat is not bettered by the ... reversal’? obtained by those defendants who did appeal. (277 F.2d at 559.)? This Court’s conclusion in the pending cases that “‘justice’’, would require nonapplication of res judicata “‘[bJecause the instant dismissal rested on a case that has been effectively overruled’? (Opinion at 4) is inconsistent with the foregoing controlling authorities. Indeed, the Supreme Court squarely rejected this rationale in Reed. The Court noted that “‘[t]he predicament in which respondent finds himself is of his own making,”’ the result of his failure to preserve his position * These principles have been consistently applied by the courts. See Clouatre v. Houston Fire & Cas. Co., 229 F.2d 596, 597-98 (Sth Cir. 1956): ‘The most that can be argued by appellant is that the judgment dismissing the former complaint was wrong as a matter of law [in light of the Supreme Court's subsequent reversal of a similar case], but appellant did not avail herself of her right to have the judgment corrected on appeal. And it is settled that such a mistake in the rendition of a judgment does not vitiate the judgment and does not obviate the application of the doctrine of res judicata.” See also Stewart Securities Corp. v. Guaranty Trust Co., 597 F.2d 240, 241-42 (10th Cir. 1979); Barzin v. Selective Service Local Board No. 14, 446 F.2d 1382, 1383 (3d Cir. 1971)(‘‘The duty to appeal the adverse decision remained with the appellant, and his failure to do so leaves .. . [the prior determination] as a decision entitled to recognition as res judicata’); Title v. United States, 263 F.2d 28, 30 (9th Cir.), cert. denied, 359 U.S. 989 (1959) (had Title appealed from the original judgment, the Court would have reversed, but since he did not do so, *‘{hje is in the same status as any other individual who fails to protect fully his valid legal rights by neglecting to perfect his appeal’’); Ripperger v. A.C. Allyn & Co., 113 F.2d 332, 334 (2d Cir.), cert. denied, 311 U.S. 695 (1940) (“No appeal having been taken, the former decision Stands as a conclusive determination of .. . [the decided] issue between the parties’’). 208 by appeal. (286 U.S. at 198.)’ The Court went on to state (286 U.S. at 198-99): ‘Having so failed, we can not be expected, for his sole relief, to upset the general and well established doctrine of res judicata, conceived in the light of the maxim that the interest of the state requires that there be an end to litigation — a maxim which comports with common sense as well as_ public policy. And the mischief which would follow the establishment of a precedent for so disregarding this salutary doctrine against prolonging strife would be greater than the benefit which would result from relieving some case of individual hardship. United States v. Throckmorton, 98 U.S. 61, 65, 68-69.”’ The same reasoning applies here. As far as ‘‘doing justice’? in the present case is concerned, it is questionable whether it is necessary, or even proper under Rule 23, to pile additional alleged class actions with another putative class attorney on top of the five cases now proceeding in the district court. The most substantial beneficiary of this Court’s decision is plaintiffs’ counsel, whose potential fee far exceeds any individual putative class member’s potential recovery. Plaintiffs’ counsel made a calculated decision not to appeal the original dismissal of his cases, in a deliberate attempt to segregate those cases from the other related cases and circumvent the district court’s adverse judgment. We seriously question whether, in these circumstances, ‘‘justice’’ requires his re-entry into the proceedings, now being actively advanced by other counsel. ‘The Supreme Court observed that the necessity of taking an appeal in order to protect against the application of res judicata was ‘‘the course which the decision of this court in Butler v. Eaton, [141 U.S. 240 (1891)] had plainly pointed out.’? 286 U.S. at 198. This Court also made note of the Butler decision in its opinion in the present case. (Opinion at 3.) 209 More significantly, if allowed to stand and if consistently applied, this Court’s decision could give rise to substantial abuses of the judicial process. As noted above, the decision would encourage losing parties in related cases — whether consolidated or not* — to choose one among their number to prosecute an appeal, while the other losing parties would be free to file other actions, or to do nothing, knowing that, if the result of the single appeal is favorable, it will redound to their benefit as well. The doctrine of bringing peace and an end to litigation, long established in our jurisprudence, would thus be substantially undermined. * Contrary to the statement in the Court’s Opinion, pp. 1, 2, the seven cases originally dismissed in the district court were not consolidated at that time. They were assigned to a single judge under the local related case rule. It was only after the remand of the five Weinberg cases by this Court that the cases were consolidated. 210: Conclusion For the foregoing reasons, we respectfully submit that the Court should grant the petition for rehearing and affirm the decision of the district court dismissing these cases on grounds of res judicata. Respectfully submitted, ARNOLD & PORTER ABE KRASH JEROME I. CHAPMAN ROBERT C. BURNS 1229 Nineteenth Street, N.W. Washington, D.C. 20036 MCKENNA & FITTING PAUL FITTING CHARLES G. MILLER 1920 Mills Tower 220 Bush Street San Francisco, California 94104 Attorneys for Defendant- Appellee FEDERATED DEPARTMENT STORES, INC. SOLINGER & GORDON EUGENE GORDON JOHN A. Grosz STANLEY L. Kay 250 Park Avenue New York, New York 10017 211 STEINHART, GOLDBERG, FEIGENBAUM & LADAR JAMES T. FOUSEKIS One Post Street San Francisco, California 94104 Attorneys for Defendant- Appellee SAKS & COMPANY By: /s/ Jerome I. Chapman JEROME I. CHAPMAN On Behalf of Defendants- Appellees DATED: November 28, 1979 213 IN THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT NO. 77-3101 MaRILYN Moitie, Individually, and on behalf of others similarly situated, Appellants, Vv FEDERATED DEPARTMENT STORES, INc., d/b/a 1. MAGNIN & Co., and BULLOCK’s NORTHERN CALIFORNIA: SAKS & ComPANy d/b/a Saks FIFTH AVENUE; and Dogs | through XX, Appellees, FLoyD R. BRown, Individually, and on behalf of others similarly situated, Appellants, Vv FEDERATED DEPARTMENT STORES, INc., d/b/a I. MAGNIN & Co. and BuLLock’s; SAks & Company d/b/a SAKS FIFTH AVENUt; and Does | through XX, Appellees. —_———$—__ ORDER (Filed January 2, 1980) Appeal from the United States District Court for the Northern District of California Betore: WriGHT and TANG, Circuit Judges, and JAMESON Senior District Judge. The Petition for Rehearing has been considered and is denied. Costs on appeal will be borne by the respective parties and none will be taxed. PREVIOUS PAGE WAS BLANK | 215 Order and Substituted Decision of the Court of Appeals Filed January 15, 1980 IN THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT No. 77-3101 MariLyN MoitiE and FLloyp R. Brown, Individually and on behalf of others similarly situated, Appellants, Vv. FEDERATED DEPARTMENT Stores, INC., dba I. MAGNIN & Co., and BULLocKS NORTHERN CALIFORNIA; SAKS & Company d/b/a Saks FIFTH AVENUE, and Does | through XX, Appellees. Before: WriGHT and TANG, Circuit Judges, and JAMESON, Senior District Judge. The Memorandum disposition filed November 15, 1979 is ordered withdrawn. The attached authored Opinion is substituted for it. * * * WRIGHT, Circuit Judge: This appeal presents a complex and novel issue related to the doctrine of res judicata: when several cases are consolidated for trial with some but not all of the plaintiffs appealing successfully, is the first decision res judicata as to those plaintiffs who did not appeal? Under the facts of this case, we hold that the interests of justice require that the entire decision be rendered inoperative, and we therefore reverse and remand. _ PREVIOUS PAGE WAS BLANK j 216 FACTS In April 1976 the government brought antitrust actions against defendant department stores alleging price fixing on women’s clothing in northern California. Shortly thereafter several private parties filed antitrust actions against the same defendants, incorporating the government’s allegations in their complaints. Appellant Moitie filed a complaint in state court in May 1976 (Moitie I). Defendants removed the action to federal court, where it was consolidated with several related actions, including that of appellant Brown. In January 1977 the district court decided the consolidated case for the defendants. The decision is reported at 426 F. Supp. 880. The district judge held that the plaintiffs, as private parties, lacked standing to sue under § 4 of the Clayton Act, 15 U.S.C. § 15. He dismissed the complaints for failure to allege specific standing to sue. Only five of the seven losing plaintiffs appealed. Appellants Moitie and Brown did not. While the five appeals were pending before this court, the Supreme Court decided Reiter v. Sonotone Corp., U.S. , 99 S. Ct. 2326 (1979). The Court held that a private party may have standing to sue for antitrust violations under § 4 of the Clayton Act. Pursuant to Reiter, we reversed and remanded the five cases pending before us for a determination in the trial court consistent with Reiter. ' ' The original consolidated case is reported under the name Weinberg v. Federated Department Stores, 426 F .Supp. 880 (N.D. Cal. 1977). This court reversed the trial court by an order filed June 25, 1979, which read: Following oral argument on December 7, 1978, this court ordered that submission of this appeal should be withheld pen- ding action by the United States Supreme Court in Reiter v. Sonotone Corp., 579 F.2d 1077 (8th Cir. 1978). On June 11, 1979 the Supreme Court decided Reiter v. Sonctone Corp., eA | , 47 U.S.L.W. 4672. It Is Ordered that the judgments of the district court are reversed, and the cause is remanded for further proceedings in light of Reiter v. Sonotone Corp. 217 As noted, appellants Moitie and Brown did not appeal the 1977 decision. Rather, they filed new actions in State court, alleging state causes of action for defendant’s price- fixing. Defendants moved for removal to federal court, asserting that the state law claims were really disguised federal antitrust claims. The district court agreed with defendants and removed the actions. It then dismissed them on the basis of res judicata, these parties and their claims having already been decided in Moitie I. Judgment of dismissal was entered on July 7, 1977. ISSUES PRESENTED? Appellants first contend that removal was improper because they stated a valid state claim. We disagree. The court below correctly held that the claims presented were federal in nature, arising solely from price fixing on defendants’ part. In light of our disposition of this appeal, appellants will not quarrel with the result. The controlling issue is the continuing validity of Moitie J for res judicata purposes. Now that the decision in Moitie 1 has been effectively reversed by this court, should the decision in Moitie Il which cited Moitie I as res judicata also be reversed? RES JUDICATA We begin with the rule of law that, when a decision has been reversed on appeal, it cannot control subsequent cases as res judicata. The Supreme Court implied this in Buéler v. Eaton, 141 U.S. 240 (1891). The present doctrine is summarized by Professor Moore: When a judgment has been subjected to appellate review, the appellate court’s disposition of the judgment generally provides the key to its continued force as res ‘ The parties have devoted their briefs and Oral arguments to the removal issue. They have not briefed the res judicata question, even after invitation to do so. 218 judicata and collateral estoppel. A judgment that has been vacated, reversed, or set aside on appeal is thereby deprived of all conclusive effect, both as res judicata and as collateral estoppel. 1B Moore’s Federal Practice (2d ed.) 4 0.416[2], p. 2231.° Under this doctrine, if appellants had appealed from the judgment in Moitie 1, we would now reverse it in Moitie IJ. Because they did not appeal Moitie 1, however, that judgment has technically never been reversed as to them. A sstrict application of the doctrine of res judicata would preclude our review of the instant decision. Such a technical application of the doctrine ignores the obvious fact that the decision in Moitie 1, if not the judgment as to these two appellants, has been reversed. Such technical application of procedural rules defeats our real purpose, which is to do justice. As with the other five plaintiffs whose cases were consolidated in Moitie J, appellants Brown and Moitie should have their day in court. Had the district court known of the Supreme Court’s disposition in Reiter, and of our subsequent reversal of Moitie J, it would not have dismissed the instant actions on res judicata grounds. It is well-established that non-appealing parties may benefit from a reversal when their position is closely interwoven with that of appealing parties. See, e.g., Kvenild v. Taylor, 594 P.2d 972, 978 (Wyo. 1979); Ford Motor Credit Co. v. Uresti, 581 S.W.2d 298, 300 (Tex. 1979); In Re Estate of McDill, 14 Cal.3d 831, 840, 122 Cal. Rptr. 754, 759, 537 P.2d 874 (1975). In this case the appealing and non-appealing parties’ positions are identical. There are no factual differences ‘The same conclusion was reached in McDonald v. McDonald, 53 Wis.2d 371, 192 N.W.2d 903 (1972): The reversal of a judgment which is a basis of a claim of res judicata in a later action warrants reversal of the finding of res judicata in the later action. 192 N.W.2d at p. 912. 219 because the lower court did not reach the merits, holding as a matter of law that consumers had no standing to bring these antitrust actions. The fact that this court could have reversed the judgments against Moitie and Brown when it reversed Weinberg, distinguishes the case from those cited by appellees. In Reed v. Allen, 286 U.S. 191 (1932), there were two separate but related cases. The first concerned the right to rents from certain property. The second was an ejectment action brought by the successful party in case 1. Case 1 was appealed and reversed and case 2 was not appealed. When the successful appellant in case 1 brought a new ejectment action, the court held that the suit was barred by res judicata because case 2 had not been appealed. Here by contrast, the underlying case was successfully appealed. As noted, this court could reverse even as to non- appealing parties. In Reed the court which reversed case 1 had no jurisdiction to reverse case 2. The other cases cited by appellees are similarly distinguishable. The doctrine of res judicata must, in rare instances, give way to overriding concerns of public policy and simple justice. See, e.g., La Societe Anonyme des Parfums LeGalion v. Jean Patou, Inc., 495 F.2d 1265, 1276 (2d Cir. 1974): 1B Moore's Federal Practice (2d ed. 4 0.405[11], p. 783. To apply the doctrine here would ignore common sense and simple justice. The trial court’s initial determination that these plaintiffs had no standing to sue has been overruled by the Supreme Court and by this court. Only a hypertechnical application of a judicially-created doctrine would deny them their day in court. An appellate court must do what is necessary to render substantial justice. Ashcraft v. Tennessee, 322 U.S. 143 (1944). ‘‘In disposing of cases before us it is our responsibility to make such disposition as justice may require.’’ /d., at p. 220 156. Because the instant dismissal rested on a case that has been effectively overruled, justice requires that the dismissal be reversed.* We remand to the district court for proceedings consistent with the holding in Reiter, supra. REVERSED AND REMANDED. * We are also mindful of the fact that Moitie I was dismissed for want of standing to sue. No court has ever considered these actions on the merits. 221 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA NO. C-77-0576 SW MariLyN Motte, individually, and not on behalf of others similarly situated, Plaintiff, a FEDERATED DEPARTMENT STORES. doing business as I. MAGNIN & Co. and BULLOCK’s: SAKS & Co. doing business as SAKS Firth AVENUE: and Dors | through XX, Defendants. Notice of Dismissal; Reason Vherefor, and (Proposed) Order (Filed May 12, 1980) To: Attorneys for Defendants in this action: PLEASE TAKE Norice that this action is hereby dismissed, without prejudice to either the dismissing representative Plaintiff nor to the asserted class. This dismissal is pursuant to Federal Rules of Civil Procedure 41(a)(1) and 23(e), 28 U.S.C. The requisites of rule 41(a)(1) are met in that no answer Or counterclaim has been filed as to the instantly dismissed complaint. The requisites of rule 23(e) are met by the following: (a) agreement to this procedure by the Court at the Pretrial Conference on April 15, 1980: (b) agreement between the parties’ attorneys that any salient rights Ms. Moitie may have will be recognized in the related West Coast DEPARTMENT STORE ANTITRUST LITIGATION, C-79-2724 SW, now pending before this Court: (c) recognition by the parties’ attorneys that Plaintiff’s counsel will seek compensation fees and/or costs of suit at the appropriate time, and 222 (d) no class notice is required since no classwide rights are affected by this dismissal, and because Ms. Moitie’s rights are to be preserved pursuant to subparagraph (b), supra, and because this dismissal is filed to avoid duplication of effort and expense in the West Coast DEPARTMENT STORE ANTITRUST LITIGATION. DateD: May 7, 1980 at San Francisco, California. Respectfully submitted, LAW OFFICES OF JERROLD N. OFFSTEIN JERROLD N. OFFSTEIN MICHAEL WEISBERG /S/ By JERROLD N. OFFSTEIN For Goop CAUSE APPEARING, IT Is So ORDERED. DATED: May 12, 1980 /S/ SPENCER WILLIAMS United States District Judge --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385006_2233%3A3. Public record. Not legal advice.