Petition — David Orgell, Inc. v. Josiah Wedgwood & Sons, Inc.

FILED

80-1706

Ts cendeninne

APR 20 1981

ALEXANDER L. STEVAS,

CLERK

IN THE

Supreme Court of the United States

OCTOBER TERM, 1980

DAviD ORGELL, INC.,

Petitioner,

v.

JOSIAH WEDGWOOD & Sons, INC.,

Respondent,

and

GEARY’S STORES, INC.,

BACCARAT, INC., BUCCELATTI,

INc., and CERALENE, INC.,

Defendants.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

NINTH CIRCUIT

ALLAN GABRIEL

Ervin, COHEN & JESSUP

9401 Wilshire Boulevard

Ninth Floor

Beverly Hills, California 90212

(213) 273-6333

BERNARD REICH

10100 Santa Monica Boulevard

Los Angeles, California 90067

(213) 272-4627

Counsel for Petitioner

PANDICK PRESS, WEST COAST, 1945 S. FIGUEROA, LOS ANGELES, CALIFORNIA (213) 747-4321

QUESTION PRESENTED

Whether summary judgment on the basis of the statute of

limitations may be granted in favor of a manufacturer of

products in the face of a continuing conspiracy and concerted

refusals to deal both prior to and within the limitations period

and absent any indication that plaintiff's business was immedi-

ately and permanently destroyed, on the theory that repeated

refusals to deal over ten years subsequent to the original refusal

were merely reaffirmations of the original refusal?

+.

TABLE OF CONTENTS

PAGE

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IIIT TITITET, ssnississtestsssnliisiiccssagiotnmateibiietidsgpioddahitenuadademsalecaniaubanmanian 2

STATUTORY PROVISIONS INVOLVED .....0.......ccccccccccesesceeeeee 2

EE AE BREE Gli inschscntssesincervesindestncidaaneninailesnsiuansbial 3

REASONS FOR GRANTING THE WRIT.............ccccccccccceeeceeeees 5

1. The Court of Appeals, In Affirming the Granting of

Summary Judgment by the District Court on the Basis of

the Statute of Limitations, May Have Ignored its Own

Precedents, and Misapplied the Limitations Statute to

Grant the Respondent an Interminable Immunity from

SD FNS BGs chiciceerecsttcinstessncsaresitcassansnipineminiienss 6

Il. The Ninth Circuit’s Application of the Statute of Limita-

tions Conflicts With Decisions of the Third, Fifth and

SEE TEUINUUID ickisunisnicssnintnhancasinnindaehanebbeiaaundagbisnsigeincath 10

Oa IES scnissvtcivnsvtetsinrebunsbnkapisentustaniaionanciiabiniaiandiadoevenminagans 11

TABLE OF AUTHORITIES

CASES PAGE

Braun v. Berenson, 432 F.2d 538 (Sth Cir. 1970) .....cccccccceceeeees 10

Hanover Shoe, Inc. v. United Shoe Mach. Corp., 329 U.S. 481

CIEE i sicchisidinindesessnschiitannaded cuisduiestaipndesesinbisoiaieteiaabaniiadalaniinainesaniban 9

Harold Friedman, Inc. v. Thorofare Markets, Inc, §87 F.2d 127

CE FeO eccnecenersinacicipimsieeciedladstaicesiingniadeeihesumpseonnes 10

Imperial Point Colonnades Condominius v. Mangurian, 549

F.2d 1029 ( Sth Cir. ), cert. denied 434 U.S. 859 (1977) ............ 10

In Re Multidistrict Vehicle Air Pollution v. General Motors Corp.,

591 F.2d 68 ( 9th Cir. ), cert. denied 444 U.S. 900 (1979)

sincaahieviatiaaispeiciaialdehaaideabibaindiiiaadibinaciaadatiamdaeanal 6, 7, 8,9, 10

Pioneer Co. Inc. v. Talon, Inc., 462 F.2d 1106 (8th Cir. 1972) .... 10

Poster Exchange, Inc. v. National Screen Service Corp., 517 F.2d

117 (Sth Cir.) cert. denied 423 U.S. 1054 (1976)........... 7, 8,9, 10

Program Engineering, Inc. v. Triangle Publications, Inc., 634

Fae COREE CU ele WIE PV citeuicnsesatsniciémscnanssiabiibaiiaberaittbedinsmnaiins 9

Twin City Sportservice, Inc. v. Charles O. Finley & Co., 512 F.2d

Se GWOT SP anisseinicvicnsessieiianssianshsecaniniteniaiogenesannidiniaaiiessehinaiimiannti 9,10

Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321

CPP E bicivcsissistcnunssiassinssenchsaabeiuianieishineiademumnciadiadsinaabpaiaahideeheaiaiotii 7

STATUTES

Clayton Act, Sections 4 and 16, U.S.C. §§ 15, 26........cccccceeeeee 1 4

Clayton Act, Section 4B, 15 U.S.C. § 150 B) occ eeceeteeeeeeeee 4,10

Sherman Act, Section 1, 15 U.S.C. § 1 ausaiaaibiaies i

Fe rien RE 8 P inissesschiiininnsttnasrntingunecnnapetunstnsensinisapiitnminiomesenbiods 2

RULES

Federal Rules of Civil Procedure, Rule 54( b).............cccccceeeeeees 2, 4

iv

INDEX TO APPENDIX

PAGE

CIRCUIT COURT’S MEMORANDUM OF JANUARY 19,

1981, AFFIRMING DISTRICT COURT’S ORDER AND

JUDGMENT OF JANUARY 10, 1979, GRANTING SUM-

BEATE Pe ePIN ETD cccecansconsncsssnssocanmniowstcnensaessonienecescensonsveseesaeee

CIRCUIT COURT’S ORDER OF MARCH 16, 1981 THAT

CIRCUIT COURT’S JANUARY 19, 1981 MEMO-

RANDUM BE PUBLISHED AS AN AUTHORED OPIN-

DISTRICT COURT’S ORDER OF OCTOBER 19, 1978

GRANTING WEDGWOOD’S MOTION FOR SUMMARY

PAPI IIES © ietstessetniiscsserenecnsnninteninmiantevinrestinuiamnienatanenmanneeens

DISTRICT COURT’S STIPULATION AND ORDER OF

EO REEIES By. BO Fi cessrsisesenccvcscnsnssnascooobionavscnseesenmbonpnaviooieotonsese

DISTRICT COURT’S ORDER AND JUDGMENT OF

JANUARY 9, 1979, DISMISSING THE COMPLAINT AS

TO WEDGWOOD WITH PREJUDICE ..........:cccceccccssesesseseeeees

CIRCUIT COURT’S JUDGMENT OF JANUARY 19, 1981,

AFFIRMING DISTRICT COURT’S ORDER AND JUDG-

DERIST GP SAPSUART 9, BSGD csessccecesscscsonsnsescscsuscssavssesetssonssooes

WEDGWOOD'S STATEMENT OF UNDISPUTED FACTS

IN SUPPORT OF MOTION FOR SUMMARY JUDG-

BERETS CF AUKSUBT 86, 1976 ...ccccocscocvesessccecsssconvcosevsesecoovensecese

4a

Sa

8a

IN THE

Supreme Court of the United States

OcToOBER TERM, 1980

Davip ORGELL, INC.,

Petitioner,

Vv.

Josiah WEDGWOOD & Sons, INC.,

Respondent,

and

Geary’s STORES, INC.,

BACCARAT, INC., BUCCELATTI,

Inc., and CERALENE, INC.,

Defendants.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

NINTH CIRCUIT

Petitioner David Orgell, Inc. respectfully prays that a writ

of certiorari issue to review the judgment of the United States

Court of Appeals for the Ninth Circuit entered in this proceed-

ing on January 19, 1981, affirming the summary judgment of the

United States District Court for the Central District of Califor-

nia entered on January 10, 1979, dismissing, as time barred,

petitioner’s complaint as against respondent Josiah Wedgwood

& Sons, Inc. for violation of Sections 4 and 16 of the Clayton

Act, U.S.C. §§15, 26 and Section | of the Sherman Act, 15

U.S.C. §1, predicated upon respondent’s and defendants’ al-

leged continuing conspiracy and concerted refusal to deal with

petitioner.

2

OPINION BELOW

The January 19, 1981, unsigned memorandum of the court

of appeals announcing the judgment at issue appears in the

appendix hereto (“App.”) at la. The court of appeals

memorandum will be published as an opinion pursuant to an

order of the court of appeals filed on March 16, 1981, which

order appears at App. 4a. The unpublished order of the

district court entered October 20, 1978, granting respondent

Wedgwood’s motion for summary judgment appears at App.

5a. The unpublished stipulation and order of the district court

filed December 1, 1978, whereby the parties stipulated that

upon affirmance on appeal of the summary judgment the

district court shall dismiss the complaint with prejudice against

all defendants appears at App. 8a. The unpublished order and

judgment of the district court entered January 10, 1979, dis-

missing petitioner’s complaint with prejudice and entering final

judgment for respondent pursuant to Federal Rules of Civil

Procedure, Rule 54(b) appears at App. Ila.

JURISDICTION

The judgment of the court of appeals sought to be

reviewed by this petition was entered on January 19, 1981 and

appears at App. 13a. This Court’s jurisdiction is invoked under

28 U.S.C. §1254(1).

STATUTORY PROVISIONS INVOLVED

Section 1 Sherman Act, 15 U.S.C. §1:

“Every contract, combination in the form of trust or

otherwise, or conspiracy, in restraint of trade or commerce

among the several States, or with foreign nations, is declared to

be illegal. . .”

3

Section 4 Clayton Act, 15 U.S.C. §15:

Any person who shall be injured in his business or property

by reason of anything forbidden in the antitrust laws may sue

therefor in any district court of the United States in the district

in which the defendant resides or is found or has an agent. . .”

Section 4B Clayton Act, 15 U.S.C. §15b:

“Any action to enforce any cause of action under sections

15... of this title shall be forever barred unless commenced

within four years after the cause of action accrued. . .”

STATEMENT OF THE CASE

Petitioner David Orgell, Inc. (“Orgell”), owns several

retail stores which sell silver, china and crystal in the Los

Angeles, California area.1 Respondent Josiah Wedgwood &

Sons, Inc. (“Wedgwood”) is in the business of selling china,

dinnerware and jasperware to retail stores throughout the

world. The principal competitor of Orgell in the Beverly Hills,

California area, in which Orgell is located, is respondent

Geary’s Stores, Inc. (“Geary’s”’). Geary’s is a customer of

Wedgwood and of the other defendants.

Commencing in 1965, Wedgwood denied requests by

Orgell to purchase the Wedgwood line of products, which

refusal to deal was reiterated in 1968. In 1972, letters were

exchanged between counsel for Orgell and Wedgwood with

respect to said refusals to deal. During the years 1976-1978,

Wedgwood, on two additional occasions, refused to deal with

Orgell.

1 All facts herein are undisputed and are set forth in the court of appeals

opinion below. Citations in this statement of the case are provided only for

quoted portions of the opinion.

4

On April 16, 1978, Orgell filed a complaint against

Geary’s, Wedgwood and the other respondents in the United

States District Court for the Central District of California for

violation of Sections 4 and 16 of the Clayton Act, 15 U.S.C.

§§ 15, 26 and Section | of the Sherman Act, 15 U.S.C. §1,

alleging that respondent and defendants had conspired with

each other and with Geary’s not to sell their products to Orgell

and agreed to favor Geary’s in connection with the sale of their

products.

On August 18, 1978, Wedgwood filed a motion for sum-

mary judgment, invoking the provisions of Section 4B of the

Clayton Act, 15, U.S.C. § 15b and contending that Orgell had

not commenced suit within four years after the cause of action

accrued.2 On October 19, 1978, the district court granted

Wedgwood’s motion for summary judgment, finding that

“plaintiff, as a result of Wedgwood’s continuing refusals suf-

fered no new injury... [and]... that the last act causing injury

occurred as a result of Wedgwood’s initial 1965 refusal to deal

with the plaintiff, and that each time Wedgwood repeated the

refusal, it was a reaffirmation of the original decision not to deal

with the plaintiff.” App. 7a.

Pursuant to stipulation of the parties and order of the

district court, the district court indicated its intention to direct

entry of judgment against Orgell and in favor of Wedgwood

and, further, ordered that if said judgment shall be affirmed on

appeal and become final, that the complaint would be dis-

missed with prejudice against all defendants. App. 8a-10a. On

January 10, 1979, the district court entered an order and

judgment dismissing the complaint with prejudice as to Wedg-

wood and entering final judgment for Wedgwood pursuant to

Rule 54(b) of the Federal Rules of Civil Procedure. App. | la-

12a.

2 In support of and for purposes of its motion, Wedgwood relied solely

upon and adopted the limited facts adduced through the deposition testimony

of David Orgell, President of petitioner, App. 14a-l6a, and affidavits of

attorneys regarding the above-described exchange of letters.

On January 19, 1981, the United States Court of Appeals

for the Ninth Circuit affirmed. App. la-3a. Said court held

that “any injury to Orgell resulted from Wedgwood’s 1965

refusal to sell,” App. 3a, and that, therefore, the district court

correctly concluded that Orgell’s action was time barred.

REASONS FOR GRANTING THE WRIT

This case involves matters of substantial importance con-

cerning the application of the antitrust laws, specifically, the

propriety of transforming the statute of limitations with respect

to admitted continuing conspiracy and refusals to deal from a

statute of repose to one of continued, interminable immunity.

By the judgment and opinion sought to be reviewed in this

petition, the Ninth Circuit has effectiveiy held that a plaintiff

which suffers continuing damage from a continued exclusicn

from the market is barred net only from proving violations and

damages more than four years old, but is barred forever from

complaining of this continuing unlawful conduct.

In so ruling, the Ninth Circuit may have placed itself

squarely in conflict with its own precedential opinions as well as

those of the Third, Fifth and Eighth Circuits, which have held

that continuing refusals to deal constitute claims under the

antitrust laws unless the pre-limitations refusal to deal results in

the immediate and permanent destruction of plaintiff's business.

Additionally, the opinion and judgment below ignores the

principle established by this Court that the antitrust laws were

enacted to redress antitrust harm and protect competition, not

competitors. Restoring a uniformity among the circuits and

reiterating this well established principle warrants this Court’s

plenary review of the ruling below.

6

1. The Court of Appeals, In Affirming the Granting of

Summary Judgment by the District Court on the Basis of

the Statute of Limitations, May Have Ignored its Own

Precedents, and Misapplied the Limitations Statute to

Grant the Respondent an Interminable Immunity from the

Anti-trust Laws.

The Ninth Circuit held below that “here, any injury to

Orgell resulted from Wedgwood’s 1965 refusal to sell.”’ App.

3a. As a basis for this ruling, the court of appeals, ignoring all

cases cited by the district court, cited and misapplied to this

proceeding only one case, Jn Re Multidistrict Vehicle Air

Pollution v. General Motors Corp., 591 F.2d 68 (9th Cir. ), cert.

denied 444 U.S. 900 (1979). In In Re Multidistrict, a manufac-

turer of air pollution control devices brought an action against

several gutcmobile manufacturers alleging a conspiracy to

refuse t» purchase plaintiffs product. Plaintiff alleged overt

acts on the part of defendants in furtherance of a conspiracy to

excivde it from the market both prior to and during the four

year limitations period. The court of appeals in Jn Re

Multidistrict found that “nothing in the record indicates other

than that the 1964 decisions [not to purchase after-burner

devices from plaintiff] were irrevocable, immutable, permanent

and final. For this reason, all injury to plaintiff necessarily

results fron the 1964 rejection from the Smog Burner.” 591

F.2d at 68.

At issue were smog control devices for the 1966 car model

year. The court of appeals listed numerous facts indicating that

plaintiff itself was convinced that it was out of the market for

that model year. “Appellees had indicated clearly and irrevo-

cably an intent to look to their own devices or modifications

thereof for the 1966 model year. ... The record indicates that

AMF itself was convinced by the last quarter of 1964 that it was

out of the market.” 591 F.2d at 72. Recognizing that the record

had demonstrated that plaintiffs opportunity to enter the

market was necessarily precluded by time and that plaintiffs

actions reflected that fact, the court of appeals concluded that

7

subsequent contacts by AMF were “forlorn inquiries by one all

of whose reasonable hopes had been previously dashed.” 591

F.2d at 72. The Ninth Circuit, in the opinion below, quoted this

identical language and reached the same conclusion. App. 3a.

In Jn Re Multidistrict, supra the court of appeals discussed

in detail and followed the well defined law on this issue as

articulated in several opinions of the Fifth Circuit Court of

Appeals. Specifically, the Ninth Circuit in Jn Re Multidistrict

quoted at length from Poster Exchange, Inc. v. National Screen

Service Corp. 517 F.2d 117 (Sth Cir.), cert. denied 423 US.

1054 (1976), wherein an alleged conspiracy had excluded

plainuff from access to supplies for a period stretching beyond

the four year limitations period. In Poster Exchange, supra the

Fifth Circuit stated:

*. . . Where the violation is final at its impact, for exam-

ple, where the plaintiffs business is immediately and

permanently destroyed, or where an actionable wrong is by

its nature permanent at initiation without further acts, then

the acts causing damage are unrepeated, and suit must be

brought within the limitations period and upon the initial

act.

” ” ”

‘. . . Here, Poster complains that during the four-year

period sued upon, it has been continually injured by

Columbia’s and National Screen’s conspiratorial fore-

closure of Poster from access to supplies. Under Zenith

| Zenith Radio Corp. v. Hazeltine Research Inc., 401 U.S.

321 (1971)] we are obliged to recognize Poster’s contin-

ually accruing cause of action during this period.

“Moreover, aside from the conclusive effect of these

authorities, any other result here would, we think, improp-

erly transform the limitations statute from one of repose to

one of continued immunity. For according to Columbia's

argument, a plaintiff who suffers continuing damage from

the continued invasion of a monopoly and exclusion from

8

the market is barred not only from proving violations and

damages more than four years old, but is barred forever

from complaining of the continuing excuse [sic] of the

unlawful conduct.” 517 F.2d at 126-127.

Accordingly, the Fifth Circuit remanded for a determination as

to “whether there was, during the period sued upon, a mere

absence of dealing, or whether there was some specific act or

word precluding [ plaintiff] from obtaining supplies from | de-

fendant].” Jd

The court below failed to recognize the crucial distinction

between the “irrevocable, immutable, permanent and final,”

refusal of Jn Re Multidistrict, and refusals, which “while

perhaps unequivocal [were] not of necessity permanent.....

Poster Exchange, supra at 127. Permanency with respect to

refusals to deal clearly does not refer to the emphatic nature of

the refusing party’s negative response, but rather situations

“where the violation is final at its impact, for example, where

the plaintiff's business is immediately and permanently de-

stroyed, or where an actionable wrong is by its nature per-

manent at initiation without further acts, ...” In Re

Multidistrict, supra at 72, quoting Poster Exchange, supra at

126-127.

The undisputed evidence before the district court in this

proceeding consisted solely of deposition testimony of Orgell

which Wedgwood adopted, for purposes of its summary judg-

ment motion, as a statement of undisputed facts. App. 14a-16a.

These “facts” merely set forth the continuing refusals to deal by

virtue of the continuing conspiracy between Wedgwood and

Geary’s. They in no manner demonstrate that the “violation is

final at its impact,” that “plaintiff's business | was] immediately

and permanently destroyed,” or that the “actionable wrong

{undertaken by Wedgwood and Geary’s] is by its nature

permanent at initiation without further acts, ...” In Re

Multidistrict, supra at 72. All that is demonstrated by these

facts is Wedgwood’s repeated negative response to Orgell’s

request to purchase products, not the permanent denial of a

3 As the undisputed facts demonstrate, far from conceding that it was out

of the market, Orgell continued to make requests to purchase and was met

with refusals within the limitations period. App. 14a-16a.

9

limited business opportunity or the destruction of Orgell’s

business. Quite clearly, the court of appeals’ reliance upon /n

Re Multidistrict, in which plaintiff had only a limited opportu-

nity to sell its goods which, when refused, was gone forever, is

misplaced and ignores the precedent set by the case and the

Poster Exchange decision upon which it is predicated. It leaves

Wedgwood free to continue the conspiracy into the inter-

minable future.

The instant case may also be contrary to the Ninth Circuit's

most recent ruling in Program Engineering, Inc. v. Triangle

Publications, Inc., 634 F.2d 1188 (9th Cir. 1980), on the

propriety of granting summary judgment on the basis of the

statute of limitations in a concerted refusal to deal situation.

Plaintiff in Program Engineering filed an antitrust action alleg-

ing restraint of trade, monopolization and improper refusals to

deal. The district court dismissed on the basis, inter alia, of the

statute of limitations. The Ninth Court reversed on that issue

and stated:

“Having established that [defendant] committed cer-

tain overt acts within the limitation period, the appellants

could avert a summary judgment by showing that there is a

genuine issue of material fact relevant to whether the acts

are antitrust violations.” 634 F.2d 1194.

See also, Twin City Sportservice, Inc. v. Charles O. Finley & Co.,

512 F.2d. 1264, 1270 (1975), wherein the Ninth Circuit

rejected the statute of limitations defense quoting this Court's

statement in Hanover Shoe, Inc. v. United Shoe Mach. Corp.,

329 U.S. 481 (1968), “We are not dealing with a violation

which, if it occurs at all must occur within some specific and

limited time span. [Citation omitted.] Rather, we are dealing

with conduct which constitutes & continuing violation of the

Sherman Act and which inflicted continuing and accumulating

harm. . .” Hanover Shoe, supra at 502 n.15.

Petitioner submits that while Jn Re Multidistrict, supra

cites and is consistent with the Fifth Circuit’s Poster Exchange,

supra decision, and while Poster Exchange unquestionably

10

supports petitioner, the court below ignored Poster Exchange,

decisions of other circuits and also its own Twin City, supra

opinion only to misapply the unique and limited facts of Jn Re

Multidistrict to the more mundane refusal to deal facts of this

case. Under such circumstances, summary judgment was

improperly affirmed by the court below.

Il. The Ninth Circuit's Application of the Statute of Limita-

tions Corflicts With Decisions of the Third, Fifth and

Eighth Circuits.

As set forth hereinabove, the Fifth Circuit Court of Ap-

peals has adopted the general rule that a new cause of action

accrues with each injurious act committed against an antitrust

plaintiff. Poster Exchange, supra; see also Imperial Point

Colonnades Condominium v. Mangurian, 549 F.2d 1029, 1042

& n. 22 (5th Cir. ), cert. denied 434 U.S. 859 (1977); Braun v.

Berenson, 432 F.2d 538 (Sth Cir. 1970). The Third Circuit

Court of Appeals in Harold Friedman, Inc. v. Thorofare

Markets, Inc., 587 F.2d 127 (3rd Cir. 1978) specifically

adopted the position of the Fifth Circuit and quoted at length

from the Poster Exchange and Imperial Point decisions. 587

F.2d at 139 & n. 44, 45,

In Pioneer Co., Inc. v. Talon, Inc. 462 F.2d 1106 (8th Cir.

1972), Associate Justice Tom C. Clark, sitting by designation,

authored an opinion which held that notwithstanding pre-

limitations period refusals to deal, the subsequent refusals of

two orders placed by plaintiff within the limitations period

“were a separate cause of action and in light of the continuing

conspiracy were not barred by the statute. . .” 462 F.2d at

1108.

It is evident that the court below in this proceeding may

have not only misapplied and ignored Ninth Circuit precedents,

but issued an opinion conflicting with the Third, Fifth and

Eighth Circuits regarding the application Section 4B, 15 U.S.C.

§15b of the Clayton Act to refusal to deal situations. The

impact of this section upon continuing conspiracies and refusals

to deal must not be permitted to vary from circuit to circuit,

since the inevitable result is a crazy-quilt application of the

antitrust laws throughout the nation. To achieve the requisite

minimum of n*tionwide uniformity among the circuits, this

Court should grant certiorari.

CONCLUSION

The court below, in a rather preemptory manner. affirmed

the dismissal of an antitrust complaint by its mechanical and

incorrect application of one recent case in the same circuit. By

so doing, the Ninth Circuit Court of Appeals ignored the

continuing antitrust violations resulting from the concerted

refusal to deal, .e., the continuing injury to competition, not

merely a continuing pecuniary injury to plaintiff. By giving the

statute of limitations provision of the Clayton Act an inter-

pretation contrary to its own precedents and that of other

circuits, the Ninth Circuit Court of Appeals left matters in a

posture clearly calling for this Court’s review. Moreover, by

employing the limitations statute to immunize repetition or

continuation of violations, the opinion of the court below not

only extends the statute beyond its purpose, but also conflicts

with the policies of vigorous enforcement of public rights

through private antitrust actions. For this reason, and for all

the foregoing reasons, David Orgell, Inc., prays that this

petition for writ of certiorari be granted.

Respectfully submitted,

ALLAN GABRIEL

Ervin, COHEN & Jessup

9401 Wilshire Boulevard

Ninth Floor

Beverly Hills, California 90021

(213) 273-6333

BERNARD REICH

10100 Santa Monica Boulevard

Los Angeles, California 90067

(213) 272-4627

Counsel for Petitioner

April 20, 1981.

la

No. 79-3108 D.C. No. 78-1349

[Stamped filed January 19, 1981]

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

Davib ORGELL, INC.

Appellant,

Vv.

Geary’s Stores, INC.:

BACCARAT, INC.; BUCCELATTI, INC.:

and CERALENE, INC.. MEMORANDUM

Defendants,

and

Josiah WepGwoop & Sons, INc.,

Appellee.

Appeal from the United States District Court

for the Central District of California

Harry Pregerson, District Judge, Presiding

Argued and submitted, December 5, 1980

Before: CHAMBERS and TANG, Circuit Judges, and

SOLOMON, * District Judge.

David Orgell, Inc. (Orgell) appeals from a summary

judgment for Josiah Wedgwood & Sons, Inc. (Wedgwood).

We affirm.

Orgell owns several retail stores which sell silver, china,

and crystal in the Los Angeles area. Wedgwood sells china,

dinnerware, and jasperware to retail stores in many parts of the

world. Orgell’s principal competitor in Beverly Hills is Geary’s

Stores, Inc. (Geary’s), one of Wedgwood’s customers. Orgell

* Honorable Gus J. Solomon, Senior United States District Judge for the

District of Oregon, sitting by designation.

2a

contends that Wedgwood refused to sell to Orgell as the result

of a conspiracy between Wedgwood and Geary’s.

Wedgwood first refused to sell to Orgell in 1965. It again

refused to sell to Orgell in 1968. In 1972, Orgell retained a

well-known Los Angeles law firm which wrote Wedgwood that

its refusal to sell to Orgell had antitrust implications. Wedg-

wood’s attorney denied that Orgell had any grounds for

complaint. On at least two occasions in 1976 and 1977. Orgell

requested the opportunity to buy the Wedgwood line, but both

times Wedgwood refused to sell.

On April 16, 1978, Orgell filed this action in the district

court. It alleged that Wedgwood together with Geary’s had

violated Sections 4 and 16 of the Clayton Act, 15 U.S.C. §§ 15,

26, and Section | of the Sherman Act, 15 U.S.C. § 1.

Wedgwood filed a motion for summary judgment. The

court granted the motion on the ground that Orgell had not

“commenced suit within four years after the cause of action

accrued.” Section 4B of the Clayton Act, 15 U.S.C. § 15b

In this appeal, Orgell concedes a four year statute of

limitations but it contends that this period had not elapsed

because each of Wedgwood’s refusals to sell was a separate

antitrust violation.

In In re Multidistrict Vehicle Air Pollution v. General

Motors Corp., 591 F.2d 68 (9th Cir. 1979), cert. denied, US.

(1980), a manufacturer of air pollution control devices

brought an action against several automobile manufacturers

alleging a conspiracy to refuse to purchase the plaintiff's

product. The plaintiff filed its action more than four years after

the initial refusal to deal but alleged that the statute of

limitations did not apply because each subsequent refusal

created a new cause of action. The court rejected that

argument, stating:

Nothing in the record indicates other than that the 1964

decisions, as to AMF, were irrevocable, immutable, per-

3a

manent and final. For this reason, all injury to AMF

necessarily resulted from the 1964 rejection of the Smog

Burner.

Id. at 72.

Here, any injury to Orgell resulted from Wedgwood’s 1965

refusal to sell. Orgell’s subsequent requests “were forlorn

inquiries by one all of whose reasonable hopes had been

previously dashed.” Jd. The district court’s order granting

summary judgment stated, “each time Wedgwood repeated the

refusal, it was a reaffirmation of the original decision not to deal

with the plaintiff. Since the original refusal pursuant to the

alleged conspiracy occurred over a dozen years ago. this action

is time-barred by the four year statute of limitations.” We

agree.

The district court’s order granting summary judgment on

the ground that Orgell’s action is time-barred is

AFFIRMED.

4a

No. 79-3108 D.C. No. 78-1349

[Stamped filed March 16, 1981]

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

Davip ORGELL, INC.,

Appellant,

Vv.

GEary’s STORES, INC.:

BACCARAT. INC.:

BuUCCELATTI, INC., ORDER

and CERALENE, INC.,

Defendants,

and

JosiAH WEDGWOOD & Sons, INCc.,

Appellees.

Before: CHAMBERS and TANG, Circuit Judges, and

SOLOMON, * District Judge

Pursuant to a request of the panel, it is hereby ORDERED

that the Memorandum disposition entered herein on January

19, 1981, be published as an authored Opinion by Judge

Solomon.

* The Honorable Gus J. Solomon, Senior United States District Judge for the

District of Oregon, sitting by designation.

Sa

Civil No. 78-1349-HP

{Stamped filed October 19, 1978]

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

David ORGELL, INC., ORDER GRANTING

Plaintiff, DEFENDANT

: WEDGWOOD'S

MOTION FOR

Grary’s Stores, INC., et al., SUMMARY JUDGMENT

Defendants.

This matter is before the court on defendant Wedgwood’s

motion for summary judgment. Having considered the plead-

ings. the memoranda of law, and the oral argument of counsel

heard on September 18, 1978, the court concludes that Wedg-

wood’s motion for summary judgment should be granted.

The court notes that plaintiff did not comply with Local

Rule 3(g)(2) providing that any party opposing a motion for

summary judgment shall “serve and file a concise ‘statement of

genuine issues’ setting forth all material facts to which it is

contended there exists a genuine issue necessary to be liti-

gated.” Plaintiff, however, did file a statement asserting that

defendant's contentions of fact are insufficient to support its

motion.

In First National Bank v. Cities Service Co., 391 U.S. 253,

289-90 (1968), the Supreme Court stated that a plaintiff

opposing a motion for summary judgment in an antitrust action

cannot merely rest on the allegations contained in his com-

plaint; he must produce significant probative evidence to sup-

port his allegations. In addition, Local Rule 3(g)(3) provides:

In determining any motion for summary judgment, the

court may assume that the facts as claimed by the moving

party are admitted to exist without controversy except as

and to the extent that such facts are controverted by

affidavit filed in opposition to the motion.

6a

Plaintiff filed no affidavits contesting the facts set forth by

defendant. Therefore, this court, in the absence of contrary

factual assertions, will treat as true the facts asserted by

defendant,

Section 4B of the Clayton Act, 15 U.S.C. 15(b), provides

that any action to recover treble damages in a private antitrust

suit must be commenced within four years after the cause of

action has accrued. The accepted rule is that a cause of action

for civil conspiracy under the antitrust laws accrues on the date

the last act causing injury or damage was committed. Garelick

v. Goerlich’s, Inc., 323 F.2d 854 (6th Cir. 1963); Steiner v. 20th

Century-Fox Films Corp., 232 F.2d 190 (9th Cir. 1952); Manok

v. Southeast District Bowling Association, 306 F.Supp. 1215

(C.D. Cal. 1969). In Steiner, the court held that when a

plaintiff alleges a continuing conspiracy causing continuing

damage, the statute of limitations runs from the time “the blow

which caused the damage was struck.” Any injury occurring

after the “blow is struck” is not relevant to the issue of when the

statute of limitations commences to run, but rather affects only

the problem of how much should be allowed in damages.

Steiner, 232 F.2d at 194-95, The period of limitation 1s not

extended merely because damages from the injury may be

continuing. Saunders v. National Basketball Association, 348

F.Supp. 649 (N.D. Ill. 1972). Where the alleged antitrust

violation involves several refusals to deal, most courts, in

determining when the cause of action accrued, distinguish

between a final refusal that is subsequently reiterated and

subsequent refusals that themselves cause new injury. C. Hills,

Antitrust Adviser § 11.13, at 710 (2d ed. 1978).

In this action, plaintiff alleges that defendants conspired

not to sell their products to plaintiff but to favor Geary’s Stores.

Wedgwood’s initial refusal to sell to plaintiff pursuant to an

alleged conspiracy occurred in 1965. Plaintiff contends that at

least ten years ago, it again sought to acquire Wedgwood

products but was rebuffed. Moreover, in 1972, the law firm of

O'Melveny and Myers was retained by plaintiff to pursue its

alleged antitrust claim involving Geary’s and Wedgwood. The

7a

law firm wrote to Wedgwood and pointed out the possible

antitrust implications of its conduct. Wedgwood replied,

denying all charges. During the last two years, plaintiff on two

occasions sought the opportunity to buy products from Wedg-

wood and was again refused. Plaintiff undertook no further

action until April 16, 1978 when it filed its complaint. Plaintiff,

as a result of Wedgwood’s continuing refusals, suffered no new

injury. Rather, the amount of monetary loss allegedly sus-

tained by plaintiff from the original 1965 refusal simply in-

creased over the years.

The court finds that the last act causing injury occurred as

a result of Wedgwood’s initial 1965 refusal to deal with the

plaintiff, and that each time Wedgwood repeated the refusal, it

was a reaffirmation of the original decision not to deal with the

plaintiff. Since the original refusal pursuant to the alleged

conspiracy occurred over a dozen years ago, this action is time-

barred by the four year statute of limitations.

THEREFORE, IT IS ORDERED that defendant Wedg-

wood's motion for summary judgment be granted.

The Clerk of the Court shall serve copies of this Order, by

United States mail, upon the attorneys of record for the parties

appearing in this action,

Dated: October 19, 1978.

HARRY PREGERSON

Harry Pregerson

United States District Judge

No. 78-1349 HP

{Stamped filed December |, 1978}

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

David ORGELL, INC.,

Plaintiff. STIPULATION

VS. AND ORDER

GEARY'S STORES, "NC. ;

Defendants .

WHEREAS:

A. By Order entered October 20, 1978, the Court granted

defendant Josiah Wedgwood & Sons, Inc.’s Motion for Sum-

mary Judgment on the grounds that the claims asserted in the

Complaint against said defendant are barred by the Statuté of

Limitations;

B. Said Order is not appealable unless the Court makes

the determination required under Rule 54(b) of the Federal

Rules of Civil Procedure;

C. Plaintiff agrees to dismiss the Complaint with prejudice

against all defendants herein when, as and if the dismissal in

favor of Defendant Wedgwood becomes final. There is,

therefore, no just reason for delay because if the Court's Ord

entered October 20, 1978 is affirmed, plaintiff will dismiss thi

action with prejudice as to all defendants;

D. There is now pending plaintiffs motion re discovery

originally set for November 6, 1978, continued to November

20, 1978, and then to December 4, 1978.

E. Plaintiff has noticed its depositions to be taken in New

York in January, 1979 and has indicated that it intends to

obtain other discovery in aid of the said depositions against all

9a

defendants. There is pending and set for December 11. 1978. a

Pretrial Conference; but the parties have not completed their

discovery. a great deal of it on both sides remaining to be taken

if the cause is to be tried before appellate review of the

aforementioned Order;

F. The parties are desirous of saving themselves and the

Court a great deal of what may be unnecessary work and cost

and are desirous of having the Court certify an appeal of the

Court's Order under Rule 54(b) of the Federal Rules of Civil

Procedure, so there will be no further proceedings in this Court

until the appeal is decided.

NOW. THEREFORE. IT IS STIPLLATED by and

among the attorneys for the respective parties. and by David

Orgell. Inc. subject to the approval of the Court. as follows:

1. The Court, in a separate order, may make its express

determination that there is no just reason for delay and may

expressly direct the entry or judgment against the plainuff in

favor of the defendant Josiah Wedgwood & Sons, Inc.;

2. All proceedings in the trial court including but not

limited to depositions and other discovery shall be stayed

pending plaintiffs appeal from the said judgment duly and

timely made;

3. If the said judgment shall be affirmed on appeal and

become final, the Court shal! dismiss the Complaint herein with

prejudice against all defendants and each party shall bear its

OWN COStS.

4. In all other events the action shall proceed in the United

States District Court herein.

SCHWARTZ, ALSCHULER & GROSSMAN

MARSHALL B. GROSSMAN

Janis E. ADAMS

By JANIS E. ADAMS

Attorneys for Baccarat, Inc..

Buccelatti, Inc. and

Ceralene, Inc.

10a

LATHAM & WATKINS

PHiILip BELLEVILLE

ALAN CLARK

By ALAN B. CLARK

Alan Clark

Attorneys for Geary’s, Inc.

MITCHELL, SILBERBERG & KNUpP

EDWARD MEDVENE

Roy SHULTS

By Roy SKULTS

Roy Shults

Attorneys for Josiah Wedgwood

& Sons, Inc.

Law OrFFices OF BERNARD REICH

Davip OrRGELL, INC.

By Davio ORGELL

By BeRNarD REICH

Bernard Reich

Attorney for David Orgell, Inc.

IT IS SO ORDERED.

DATED: DEC. 1, 1978

HARRY PREGERSON

United States District Judge

No, 78-1349-HP

[Stamped filed January 9, 1979]

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

Davip ORGELL, INC.,

Plaintiff,

Vs.

Grary’s Stores, INC.; ORDER AND

Josiah WepGwoop & Sons, INC., JUDGMENT

BACCARAT, INC,; BUCCELATTI,

INc.: and CERALENE, INC.,

Defendants.

This matter came on for hearing before the Court, the

Honorable Harry Pregerson, United States District Judge,

presiding, on the motion of defendant Josiah Wedgwood &

Sons, Inc. (“Wedgwood”) for summary judgment. The Court

having considered the pleadings, the memorandum of law, and

the oral argument of counsel heard on September 18, 1978, the

Court issued its order granting Wedgwood’s motion for sum-

mary judgment (“Order”) which was entered on October 20,

1978.

Pursuant to the stipulation executed by counsel for all

parties herein, filed with the Court on December 1, 1978, and

signed by the court on December 1, 1978, the Court finds that

there is no just reason for delay of the entry of a final judgment

as to defendant Wedgwood, and it is

ORDERED, ADJUDGED AND DECREED:

1. That piaintiff David Orgell, Inc. shall take nothing by its

complaint herein against defendant Wedgwood, and that the

complaint is dismissed with prejudice as to said defendant;

2. Each party shall bear its costs of suit herein; and

12a

3. The Court, expressly determining, under Rule 54(b)

FRCP, that there is no just reason for delay in entering final

judgment for defendant Wedgwood hereby expressly directs

that final judgment in favor of said defendant and against the

plaintiff be entered; and the same is hereby entered.

Dated: January 9, 1979

/s/ HARRY PREGERSON

HARRY PREGERSON

United States District Judge

JUDGMENT entered.

DATED:

Clerk

13a

No. 79-3108 DC CV 78-1349 HP

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

Davibd ORGELL, INC.,

Appellant,

VS.

Grary’'s Stores, INC.; BACCARAT,

INc.; BUCCELATTI, INC.; and

CERALINE, INC.,

Defendants,

and

Josiah WepGwoop & Sons, INc.,

Appellee.

APPEAL from the United States District Court for the

CENTRAL District of CALIFORNIA.

THIS CAUSE came on to be heard on the Transcript of

the Record from the United States District Court for the

CENTRAL District of CALIFORNIA and was duly submitted.

ON CONSIDERATION WHEREOF, It is now here or-

dered and adjudged by this Court, that the judgment of the said

District Court in this Cause be, and hereby is affirmed.

Filed and Entered January 19, 1981

l4a

No. 78-1349-HP

[Stamped filed August 18, 1978]

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

Davip OrGELL, INC.,

Plaintiff,

we Hearing Date:

Geary’s Stores, INC., Sept. 11, 1978

Josiah WeDGwoop & Sons, INC., Time: 10:00 A.M.

BACCARAT, INC., BUCCELATTI,

Inc., and CERALENE, INC.,

Defendants.

MEMORANDUM OF POINTS AND AUTHORITIES

IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT

OF DEFENDANT JOSIAH WEDGWOOD & SONS, INC.

STATEMENT OF UNDISPUTED FACTS

Solely for the purposes of this motion, and without waiving

any of its rights, claims or factual positions in the event this

litigation should continue, Wedgwood will take as given the

testimony of plaintiffs principal, Mr. David Orgell. That

testimony has led to certain uncontradicted facts.

Orgell is“ . . . claiming that the defendants, Geary’s, are

conspiring with certain suppliers listed to exclude us from

purchasing directly from them and because of that we are

suffering damages.” (D. Orgell Depos., p. 45, lines 8-11).

Orgell originally sought the Wedgwood line“ . . . at least ten

years ago.” (/d., line 25.) On that occasion, Mr. David Orgell

spoke to a Mr. Thomas of Wedgwood, who reportedly told Mr.

Orgell that Wedgwood had “arrangements” in the vicinity. (D.

Orgell Depos., p. 47, lines 12-13). That is to say, Wedgwood

had another customer “very close to me...” and“...

15a

didn’t want another account right in that vicinity.” (/d., lines

15-16). Thus, Mr. Thomas refused Orgell the Wedgwood line.

Id., line 18.

Wedgwood’s initial refusal to deal with Orgell likely

occurred twelve or thirteen years ago, rather than ten. Mr.

Orgell testified that a Mr. Donald Rose. who was Wedgwood’s

salesman for the “Beverly Hills territory”, refused to supply Mr.

Orgell and his store in 1965-1966. Mr. Orgell testified that Mr.

Rose said: “Well, you know the relationship between Wedg-

wood and Geary’s. I only work for the company, and I have

been told not to sell you.” (D. Orgell Depos.. p. 134, line 28, to

p. 135, line 2.)

In early 1972. more than six years before this lawsuit was

filed, William J. Feis, Esq., of O'Melveny and Myers wrote a

letter to Wedgwood’s President, Mr. R. M. Smyth, on behalf of

Orgell. Affidavit of Raymond M. Smyth in Support of Motion

by Defendant Josiah Wedgwood & Sons, Inc. for Summary

Judgment, 92 and Exhibit A (“Smyth Affidavit’). 2 In that

letter, Mr. Feis asserted that Mr. Rose of Wedgwood had

“|, , stated that he will not sell the Wedgwood line to Mr.

Orgell because of an agreement with Geary’s not to do so.”

Adding that his firm was “ .. . unable to imagine a valid

business reason” for Wedgwood’s refusal to sell its line to

Orgell, Mr. Feis noted that“ . . . our attention has accordingly

been drawn to the possible antitrust implications of your

conduct.” He expressed his belief that it was in the interest of

all concerned “ . . . that this matter not be allowed to result in

litigation.” (Smyth Affidavit, Exhibit A).

Mr. Smyth referred Mr. Feis’s letter to Wedgwood’s

counsel, Mr. Leonard S. Sandweiss, for reply. Smyth Affidavit,

4 3; Affidavit of Leonard S. Sandweiss in Support of Motion by

Defendant Josiah Wedgwood & Sons, Inc. for Summary Judg-

2 The “affidavits” of Messrs. Smyth and Sandweiss are in fact declara-

tions proper under 28 U.S.C. § 1746. In the interest of time and after

telephonic consultation with the clerk of the court, the titles have been left as

they are. References to their “affidavits” should therefore be understood as

referring to what are in reality declarations.

l6a

ment, 92 and Exhibit A (‘“Sandweiss Affidavit”). Mr.

Sandweiss replied in writing to Mr. Feis’s letter on or about

March 6, 1972. Sandweiss Affidavit, §] 3 and Exhibit B. In his

letter he denied the charges made by Mr. Feis, even assuming

the accuracy of Mr. Feis’s factual representations. Sandweiss

Affidavit, Exhibit b, page 2. Yet, despite the litigation threat

contained in the letter from Mr. Feis to Mr. Smyth, neither Mr.

Sandweiss nor Wedgwood ever heard from Orgell or its counsel

O'Melveny and Myers again on these matters. See Sandweiss

Affidavit, 4; Smyth Affidavit, {| 4.

During the last two years ago, Orgell again sought the

opportunity to buy Wedgwood on two more occasions. (D.

Orgell Depos., p. 56, line 22 to p. 58, line 18; p. 48, line 17-p.50.

line 18.) Orgell contends that Wedgwood again refused to sell

its line to Orgell, at least in part because of Geary’s. (Jd., p.

52, lines 8-17; 53, line 28-p. 54, line 8; p. 51, lines 1-25.)

The harm Orgell allegedly has suffered as a result of the

actions of the defendants is that Orgell has“ . . . been denied

product, product that we would have made profits on, and the

customer that would have come to us for the product had to go

to Geary’s; thus, we suffered damage.” (D. Orgell Depos., p.

92, lines 6-9.) Approximately a year ago, Orgell began to

acquire Wedgwood’s bone china and jasperware from a source

other than Wedgwood, and to sell these items to its retail

customers. (D. Orgell Depos., p. 27, lines 1-14.) However,

Orgell has used its Wedgwood products as loss leading items

and has made literally no profit on its sales of Wedgwood. (D.

Orgell Depos., p. 106, lines 17-25.)

Orgell does not break down its gross sales or costs, or its

net sales on china, crystal or silver, classified as such. Rather,

Orgell has total sales, total gross and total net figures on its

overall business. (D. Orgell Depos., p. 116, line 12-p.117, line

12.) On its overall business, Orgell has shown a profit—an

increasing profit—in each of at least the last 10 years. (D.

Orgell Depo., p. 86, lines 16 p. 87, lines 3-7 and 20-21.)

3 See footnote 2.