Petition for Writ of Certiorari — Martin-Marietta Corp. v. Maricopa County

Supreme Court brief1971

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TABLE OF AUTIORITIES CITED |

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MD F. bd. 28 To —S

Raitey v. Ghever, 88 US. (2t Wat) 442 : AL

Century Hardware Corp. v. Rowernall Oo... 282 F.

' Sapp. 228 _ 42

Dickinson, tae. v 0 tame Cp Oe Gane, At

F.Supp. 428 te _

Cwengs v. Terentictts CeptaryRox Fim Corp. 282. :

F. 2d 32S, core. don.. 852 U.S. 871 : 12

ich v. General Petrotcum Comp.. 982 U.S. 5415, 16

Manny v, Warner Bros. Plotures, 116 F.Supp. 807 12

Mercer v. Selden, 42 U.S. (1 How.) 35)... ik

Michigan v: Morton Salt Co., 259 F. Supp. 35, aff'd

swab. gom., Hardy Sak Co. v. Winpis, 377 F. 2d |

768, cert. den. WHVOUS 912... 82, 19

Minncsita Mining & Mig. Cs. v. sesw Samay Gand |

Fitching Co. MIUS Mi... 1S; 16.

New Jersey v. Morton Sak Co.. 87°F. 24 94, cert 7

dea. 991.08. 967... |

Pillsbury v. United Engineering Co. 42 US. 197. 1S

Sinctair Refining Co. v. Atkinson, 370 U.S. 195 1S .

Skouras Theatres Corp. ¥. pune

_ Corp.. 193 F. Supp. 401 . senien a

Sun Theatre vend v. — Radio Giese, 23 E

24 284 oa piven —

Tague v. Balaban, 146 SF. Guin ‘356 | elites 12

United States v. Grinnell, 305 F. Supp. 285 .. aan OO

Howe of Representatives Report No. 422, Age

V9SS, 84th Cong. tt Sows. 2 (1955) .. hl

Sonate Report No. 619, dune 21, 1955, to accom ~

a ceeee Gee a a

weonal & Adminitrative News 1955, pp. |

2538 ener aanenaaitigibiaadianannaccaninnanntit is

United States Code, Tite 1S, Sec. 15 (Clayton Act

of Oct. “1S, 1994, c. 323, 84, 38 Geet. 739)' 3

United States Cade, Tithe 1S, Sec. 1$(a) (Chageon

Act of Got. 15, 1914, ©. 323, §4A, as added July -

7, 1953, < I, 1, OP Set. 22) | RAB

° United States Code, Title 15, Soc. 15(%) (Clayton

Act of Oct, 15, 1914, c. 323, 848, gs added July,

7, 19SS, c. 283, §1, GP Sat. 283) -2, 3; 4, 6, 8, 44

United States 1S, Sec? 160) (Clayton °

Act of Oct. 1S, 1914, c. 323, §5(b), 38 Sauk. 731,

as amended July 7, 1955, c. 283, §2(b), 6 Seat.

eP sissinnmininnnal 2, 3, 4 6 7, 9,10, 13

2 © _

ecnceseccececcces Je Sa 15, 16, 17, 20, 21 ,

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United States Code, Tithe 28, Sec. 125401 2

United States Code, Tie 28, Sec. 1297(b) 4

United States, Code, Tithe 28,'Sec. 1407 0. 4

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Maricopa County, a body politic, et al.,

Respondents.

Petition fer a Writ of Certierari to the United States

Court of Appeats fez itse Ninth Circuit.

Petitioners United Concrete Pipe Corporation, Smith-

Scott, Inc., Kaiser Steel Corporation, United States

Steel Corporation and U. S. Industries, Inc., defendants

below, pray that a Writ of Certicrari issue to review

the judgment of the United States Court of Appeals for

the Ninth Circuit entered in this case on August 28,

1970 (Appendix “A” hereto), affirming the order: of

the United States District Court for the District of Ari-

zona denying the motion of petitioners to dismiss the

Opinions Below,

The Opinion of the District Court is reported at 303

F. Supp. 77 (D. Ariz. 1969), (Appendix “B” hereto).

“C” hereto).

Deed weeding ibe os

The jurisdiction of the Court is invoked under 28

U.S.C. § 1254(1). The judgment of the United States

Court of Appeals for the Ninth Circuit in this case was

filed and entered August 28, 1970. Petitions for rchear-

ing were filed on September 10, 1970, and the order of

such Court denying the petitions for rehearing was filed

on October 26, 1970 (Appendix “D" hereto). This

petition for certiorari is being filed within 90 days of

actions to extend jndefimitely the empension of the stat-

ute of limitations beyond the four-year period of Sec-

tion 4B of the Clayton Act and beyond the one-year

period of Section 5(b) of the Clayton Act.

2. Whether the period of suspension of the statute

of limitations pursuant to Section 5(b) ends as to cach

defendant one year after the termination of the Gov-

3. Whether the suspension provisions of Section

5(b) of the Clayton Act apply tg’ 2 defendant in a

treble damage action who was neither a party to nor a

named co-conspirator in the previous suspending Gov-

ernment action.

4. iii Geies G00 of Ge Chums An oft

toll the statute of limitations as to an action for,dam-

ages by a governmental entity.

Statutes, Federal Rules and Regulations Inveived.

1. United States Code, Title 15, Section 15 (Clay-

ton Act of Get. 15, 1914, c. 323, 4, 38 Seat.

731);

2. United’ States Code, Title 15, Section 1S(a)

(Clayton Act of Oct. 15, 1914, c: 323, § 4A,

as added July 7, 1955, c. 283, § 1, 69 Stat

282);

3. United States Code,’ Title 15, Section 15(b)

(Clayton Act of Oct. 15, 1914, c. 323, § 4B,

as added July 7, 1955, c. 283, § 1, 69 Stat.

283); ;

4. United States Code, Title 15, Section 16(b)

' (Clayton Act of Oct. 15, 1914, c. 323, § 5(b),

38 Stat. 731, as amended July 7, 1955, c.- 285,

§ 2(b), 69 Stat. 283).

(See Appendix “E” hereto). \

Respondent, an Arizona County, filed a Complaint

> in the United Siates District Court for thé District District of

Arizona on April 15, 1969, invoking the Court's juris-

diction under 15 U.S.C. § 15. The Complaint alleged

a Sherman Act conspiracy which continued to “some-

5(b).” Petitioners assert it is not saved but is barred

by Section 5(b) and Section 4B.

“MS USC. § 15.

"15 U.S.C. § 16(b).

_— ; |

Petitioners moved in the tial court to dismiss pilain-

tiffs claim on the basis of Sections 4B and S(b). The

pursuant to 28 U.S.C. § 1292(b). On August 28, 1970,

such court entered its order affirming the foregoing or-

der of the District Court and on October 26, 1970, filed

ceeding” capable under Section 5(b) of suspending the

Section 4B limitation period “during the pendency of

the Government proceeding and for onc year there-

after,” i.c., until June 19, 1965. On June 23, 1964,

four days after termination of the criminal actions,

the Government filed five civil actions pursuant to

Section 4A of the Clayton Act and the False Claims

‘Act. These actions were not within Section 5(b) and

ever, on October 28, 1964, the Government amended

its complaints, adding claims for injunctive relief to

_ festrain purported violations of the antitrust laws.

that they could neither bear the cost of continued litiga-

tion mor pay a pro rata share of any acceptable settle-

ment. In order to terminate the entire matter, the larger

can entered into consent decrees on May 27, 1968, in

consent decrees in the Government equity actiors.

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‘See Alfidavit of Jesse R, O'Malley, R. 378, et seq., Vol. Two.

*See Affidavit of John S. Tennent, R. 64-66, Vol. One.

If the suspending provision of Scction 5(b) was in-

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similar or even identical. The decision below, that the

statute of limitations is tolled again and again as each

of these proceedings is brought by the Gavernment, will

be of far-ranging importance in the administration of —

the antitrust laws. |

In modern times, statutes of limitations have served

the function of preventing old <ases from clogging the

calendars of our over-burdened courts. Because anti-

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settiemests in the belicf they were dealing with all

plaintiffs who had viable claims. It is highly unlikely

‘that a settienient would have been made if the peti-

tioners had known that they would be subject to a

suit Brought after the settlement. Such settlements’ are

essential to the successful administration of the anti-

trust laws, and, by reason of the greaicr number of pri-

vate suits, their settlement may well be of greater im-

portance than setticment of Government suits. The De-

cision below will induce defendants to fight to the bit-

ter end in both Government and private suits.

Another important policy adversely affected by the

decision below is the. policy favoring repose. It is a

fundamental policy of law to prevent introduction of

stale evidence, to forbid reliance upon faded memories, —

and to eliminate vain searches for vanished witnesses

—a policy of fairness to defendants. This policy is of

‘particular importance in the antitrust area because of ©

the protracted and complex nature of antitrust pro-

ceedings. it is evident that, in establishing a

statute of limitations for antitrust actions,

tended to further the policy of fairness and to

prompt adjudications as well as settlements.

(b)’s design to promote both settlement and

defendants, as well as to promote timely p

limitations in respect of a cause of action arising under

section 15 of this title is suspended

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Not only did the courts below err in holding that

the statute of limitations could be suspended repeatedly _

by successive, non-contemporancous Government pro-

ceedings, they concluded also that, once the statute was

suspended by a Government proceeding, it remained

suspended as to cach defendant until one year after

the proceeding had terminated as to all defendants."

This decision, following the “last-defendant” rule, is in

accord with decisions. in the Third’ and Eighth"

Circuits but is in conflict with the decisions in the

Second,"' Seventh’ and Ninth’ Circuits. The latter,

since the cause of action accrued.. This requirement

is designed w prevent interminable delay and congestion of

caurt calendars as well as encouraging the prompt adjudi-

cation of private damage suits.” (Emphasis added).

"Such holding, in addition to being incorrect, fails to

the denial of petitioners’ motion to dismiss. (See Appendix “F").

*New Jersey v. Morton Salt Co., 387 F. 2d 94, 98-99 (3d

Cir. 1967), cert. denied, 391 U.S. 967 (1967).

“Michigan v. Morton Salt Co., 259 F. . 35, 50 (D.

Minn. 1966), aff'd. sub nom. Hardy Salt Co. v. 1 , 377 F. 2d

768 (8th Cir. 1967), cert. denied, 389 U.S. 912 (1967).

''Skouras Theatres Corp. v. Radio-Keith-Orpheum Corp., 193

F. Supp. 401, 403-05 (S.D. N.Y. 1961).

'3Grengs v. Twentieth Century-Fox Film Corp., 232 F. 2d

325, 333 (7th Cir. 1956), cert. denied, 352 U.S. 871 (1956);

Sun Theatre Corp. v. RKO Radio Picwres, 213 F. 2d 284, 292

(7th Cir. 1954); Century Hardware Corp. v. Powernail Co.,

282 F. , 223, 228-29 (E.D. Wis. 1968); and Tague v.

Balaban, 146 F. Supp. 356, 361 (N.D. Ill. 1956).

‘8Manny v, Warner Bros. Pictures, 116 F. Supp. 807, 809-10

(S.D. Cal. 1953).

Government, provides a further deterrent to settlement of

antitrust cases. Under this interpretation, defendants, who

otherwise might make a prompt settlement in a Govern-

ment proceeding, will hesitate to do so unless and until

all other defendants settle. In a complex action involving

a number of defendants, settlement may be delayed in-

definitely until that single moment occurs (if it ever oc-

curs) when all defendants are simultancously willing to

settle. This would take from the Government one of its

principal weapons in compelling settlement of its anti-

trust actions, The leverage of one settlement places

pressure upon the remaining defendants to capitulate.

Recalcitrant litigants should not have the power to

prejudice litigants willing to cooperate in making a set-

tlement. It is hard to believe that Congress intended

such a bizarre result from Section 5(b), but in anv

event the question deserves a definitive answer by this

Court.

—14—

os the Decision Beton Misrend the Plain Language of Section

S(b) and Prior Supreme Court Decisions interpreting it,

Thes Coustng Sebstantial Conlesion in Vain imortsm! Aree

of the Law. This Court Should Grant Certiersri to Clarify

the Meaning of the Statste

The mere existence of an erroneous decision in a

lower court is not, of course, grounds for the exercise

of this Court's certiorari jurisdiction. However, when

a lower court misreads the plain language of a statute

and extends the rationale of this Court's decisions far

beyond the basis of those opinions, the resultant con-

fusion may warrant this Court granting certiorari to

reassert precision of thought in this area of the law.

The courts below were dealing with a statutory cx-

ception to the general antitrust statute of limitations,

dealing with the same matter. Despite the fact that the

language of the statute refers explicitly to a Govern —

ment “proceeding,” the courts apparently read the stat-

ute’s word, “proceeding” (singular), to be “Proceedings”

(plural). See footnote 17, infra. In so doing, the courts

below interpreted an exception to the statute of limita-

—j]5—

scheme clearly requires a plaintiff “. . . to bring his

action either (a) within the suspension period, i.c., with-

in 1 year after the Government suit had terminated, or

(b) within 4 years after his cause of action accrued.””

This policy is totally abrogated by the decisions below.

Since so many Government antitrust actions are pur-

sued in separate proceedings, the Court’s reading of the

statute is likely to cause substantial uncertainty as to

the meaning of Section 5(b), which meaning, prior to

the decisions under consideration herein, was assumed

to be settled by the plain and unequivocal language

thereof. If congressional policy in a critical area is not

to be thwarted by judicial re-writing of statutes, this

Court should declare in this case that when Congress

expresses its intent in clear and precise terms, that

intent must be effected by the courts.’*

The District Court’s opinion, affirmed per curiam

by the Ninth Circuit, misinterpreted“ two carefully rea-

soned opinions by this Court. In trying to justify its

holding that Congress said one thing but really meant

another, the District Court relied on the recent opinions

of this Court in Minnesota Mining. & Mfg. Co. v.

New Jersey Wood Finishing Co., 381 U.S. 311 (1965)

and Leh v. General Petroleum Corp., 382 U.S, 54

June 19, 1964. One Custos, a0 Sune 00, 1965,

on June aap hee ——.

tiff's action was, barred

blow specifically reed 10 apply the baring. povons

mg, No, 619, June 21, 1955 {To H.R.

-_ us. od & Admin. News 1955, pages 2332-33,

fectuate its purposes; but that does not give us the power to

write the statute of limitations at will, and

tended to be a limitation no limitation at at all.” Pillsbury v.

United Engineering Co., 342 U.S. 197, 200 (1952). Cf. Sinclair

Refining Co. v. Atkinson, 370 US. 195 (1962).

a gs atin

(1965). In those cases, this Court faced the problem

of determining what kind of Government proceeding

tolied the statute under Section 5(b). To implement

Congress's intent, this Court determined that the word

“proceeding” should be construed broadly to include

an FTC proceeding (Minn. Mining & Mfg.) and that

the language, “based’in whole or in part on any matter

complained of in such proceeding,” should be given a

broad reading so as not to require complete idéntity

between the Government proceeding and subsequent

private suits’in order for the tolling to take place (Leh).

Certainly, this Court was correct in stating that the

language of Section 5(b) must be construed broadly to

carry out congressional intent, but the courts below

relied on those cases as a mandate to re-write the tolling

provisions of Section 5(b) so as to permit repeated sus-

pensions of the statute. This was done in spite of the

fact that Congress had plainly indicated by its use of

the singular form of “proceeding” that it intended to

toll the statute but once. It is evident the lower courts

misread the statute. The District Court “quoted” the

statute as reading that the limitations period is tolled

by “any government proceedings,” while in fact Section

5(b) refers to tolling by “any government proceed-

ing.”"’ This Court should re-affirm the legislative pur-

pose as expressed by the exact words used by’ Con-

gress and clarify any misunderstandings regarding the

meaning of the 3M and Leh cases.

D. This Court Should Clarify the Issue as to Whether Congress

Intended Section 5(b) to Apply to a Governmental Entity.

In Minnesota Mining & Mfg. Co. v. New Jersey

Wood Finishing Co., supra, this Court pointed out that

"See Decision of the District Court, 303 F. Supp. at 85.

“in 5(b), Congress meant to assist private litigants

utilizing any benefits they might cull from

antitrust actions.” (381 U.S. at 317)

holding is in accord with the statutory

This arises by reason of the broad holding in United,

States v. Grinnell, 305 F. Sapp. 285-(S.D-N-Y. 1969).

Although relating to a suit brought by the Federal

Government, the following holding is equally applica-

ble to other governmental entities:

“[I|t appears that it was never intended to give

the government the advantages of the tolling peri-

od, This result is consistent with the policy under-

lying the tolling provisions. Originally $5 was en-

acted ‘to help persons of small means who are

injured in their property or business by combina-

lions or corporations -violating the antitrust laws.’

S. Rep. No. 698, 63d Cong., 2d Sess. 10 (1914).

[Emphasis added.| Such individuals must rely on

the government's extensive resources for investi-

gating antitrust volations and prosecuting the viola-

tors. The government itself does not have this ex-

cuse for delay. It should be held to the strict four-

year period enacted by Congress to cut off s

claims and guarantee business efficiency. :

“The decision in Minnesota Mining & Mfg. Co.

v. New Jersey Wood Finishing Co., which empha-

sized the importance of the benefits given litigants

by § 5 (b), is not contrary to this conclusion. In

that case the Court stated that ‘it is plain that in

§ 5(b) Congress meant to assist private litigants

enfin

in utilizing any benefits they might cull from gov-

ernment antitrust actions.” (305 F. Supp. at

287) (Court’s emphasis); (Citations omitted).

w. Certterart Should Be Granted wo the Court May Resolve the

Recuiving Question of Whether Section Sib) Tolls the

Statute of Limitation. Ayuinst Parties Who Are Not Named

in the Government Proceeding Which Trigger the Tolling

Provision.

‘The foregoing proposition is the subject of a sepa-

rate petition for certiorari filed herein by petitioner Mar-

tin-Marictta Corporation and other petitioners similarly

situated. Accordingly, the undersigned petitioners will

not duplicate argument in connection therewith.

The Decision Permitting the Tacking of Successive

Disabilities to Extend Suspension of the Statute of

Limitations Ie in Conflict With Applicable Deci

sions of This Court.

At issue herein is the determination of which doctrines

are impliedly incorporated into federal statutes of lim-

itations. It is well settled that the doctrine of fraudulent

concealment is so incorporated. Indeed, the federal

courts have said that the force of such a traditional

doctrine “is so strong that it is applicable unless Con-

gress expressly provides to the contrary in clear and

unambiguous language."* The doctrine of incorporation

was established in the carly United States. Supreme

Court case, Bailey v. Glover.” An even earlier United

States Supreme Court case, Mercer v. Selden,” rec-

‘Arantic City Electric Co. v. General Electric Co., 312

F.2d 236, 241 (ist Cir. 1962).

88 U.S. (21 Wall.) 342, 347-48 (1875). -

42 U.S. (1 How.) 35 (1853).

tacking successive disabilities. In Dickinson, Inc. v.

Kansas City Star Company,” the court stated:

“The rule is, that ‘successive disabilities may not

be tacked to one another so as to bring a party

within the exceptions to the statute of limitations.’

_ [Citations omitted. | It is the ‘tacking’ of one lim- —

itation to another that would create the intoler-

able condition that defendants argue in the in-

stant case.” (174 F. Supp. at 425.)

Similarly, in Michigan v. Morton Salt Co.,™ the court

“It may be that in some instances; tolling the stat-

ute during successive actions would result in

treble damage claims of such. vintage that it

would be patently unreasonable to assume that

Congress meant to allow ‘tacking’ under § 5(b).

#1173 F. Supp. 423 (W.D. Mo. 1959).

#259 F. Supp. 35 (D.Minn. 1966); affd. sub nom., Hardy

Salt Co. v. Illinois, 377 F.2d 768, cert. denied, 389 US 01%

—20—

But here the civil complaint was filed within two

weeks of the indictment. Although not simulta-

neously commenced ‘the two actions were pending

concurrenily.’” (259 F. Supp. at 51) (Emphasis

added). :

A decision that a plaintiff may not tack successive,

- nen-contemporancous Government actions to extend

the statute of limitations is the only decision consistent

with the plain language of the statute, with the fore-

going decisions and with the concept of fair play which

should be accorded any litigant u rt judicial sys-

tem. Furthermore, the decisions overturn the

well-settled doctrine of this Court against the tacking

of successive disabilities to extend suspension of the

statute of limitations. _ nets.

This Court has never decided or given guidance on

the proper application of the tolling provisions of Sec-

tion 5(b). The present case presents 2 unique. oppor-

tunity to do so inasmuch as it raises most of the is-

sues inhering in. Section 5(b), including issues which

have been the subject of conflicting decisions. by the _

courts for various circuits. Among those. conflicting de-

cisions is the erroneous decision of the courts below —

that the barring provisions of Section 5(b) may be total-

ly abrogated by judicial. fiat even though such provi-

sions are an indispensable part of a carefully con-

structed statutory scheme for the enforcement of the

antitrust laws. That decision, if left undisturbed, would

leave the statute of limitations open ended and sub-

ject to indefinite extension at the whim of the Govern-

ment by the simple expedient of filing successive, non-

contemporaneous actions. Moreover, under the last-de-

—— rie >

fendant rule, the statute is further suspended as to all

defendants if 4 single defendant fails to make its peace

with the Government in. any one of the Govern-

meat civil and criminal antitrust cases upon which the ,

treble-damage claim is purportedly based.

‘te the intercets of justice ond diestive: adunlalaine.

tion of the antitrust laws, this Court should grant cer-

tiorari in order to rectify the errors below and dispel

confusion as to the application of Section 5(b).

Jesse. R. O’MALLEy,

Dominic B: Kina,

Donan R. Gan, |

Lawrence E. Stickney,

Counsel for United States ;

Ateel Corporation. \

LeeG.Pau, ~— -

Oxiver F. Green, Jr, .

Counsel for U. §. Industries,

4 ie os dnc. b.

* November 18, 1970.

pppmnenex “a”,

- Untited States Court of Appeals for the Ninth Circuit.

Maricopa County, Piaintiff-Appellee v. American

Pipe and Construction Co., et al., Defendants Appe!:

lants. No. 24737.

Sita dita en tani Cains tate teal”

the District of Arizona.

THIS CAUSE came on to be heard on the Transcript

of the Record from the United States District Court for

the District of Arizona and was duly submitted.

ON CONSIDERATION WHEREOF, It is now here

ordered and adjudged by this Court, that the judgment

of the said District Court in this Cause be, and hereby |

is affirmed. |

Filed and entered August 28, 1970,

APPENDIX “8”.

Decision on Defendants’ Motions to LDinsrins

y and/or for Summary Judgment,

Maricopa County v. American Pipe and Construe-

tion Co, ef al, 303 F. Supp. 77, 79-90 (1969),

Maricopa County, a body politic, Plaintiff, v. Amer. -

ican. Pipe and Construction Co., American Concrete

Pipe Co.,: Kaiser Steel Corporation, Smith-Scott, Inc.,

United Concrete Pipe Corporation, United States Steel

Corporation, Martin-Marietta Corporation, United States

Industries, Inc., Arizona Concrete Pipe Co., Six Points

Lumber & Supply Co., dba O'Malley Gannaway Con-

crete Pipe Co., all corporations, Defendants.

Civ. A No, 69-—149 PHX.,

United States District Court, D. Arizona.

Aug. |, 1969.

PENCE, District Judge.

The defendants above named have each and all filed

motions to dismiss and/or for summary judgment

against the plaintiff, maintaining that its Sherman |

and 2 antitrust action is barred by the statute of.

limitations and laches. Some defendants have raised ad-

ditianal grounds, fully discussed hereafter. The chrono-

logical sequence of events preceding the filing of plain-

tiffs action on April 19, 1969, and its amended com-

plaint on May 22, 1969 is therefore important.

CHRONOLOGY OF EVENTS

On March 10, 1964, the United States Grand Jury

at Los Angeles returned five indictments against de-

fendants American Pipe and Construction Co. (Ameri-

can), United Concrete Pipe Corporation (United),

cnaliens

Kaiser Steel Corporation (Kainer), United States Steel

Corporation (U, §, Steel), United States Industries

(USI), and Smith-Scott, Inc, (Smith-Scott), charging

them (and certain of their officers) with combining and

conspiring together in restraint of interstate trade in

steel and concrete pipe, in violation of 15-U,S.C. § |

(Sherman 1), in that they submitted collusive and

rigzed bids for the sale of such pipe, and allocated

and divided business among themselves.’ On June 19,

1964, pleas of nolo contendere were made by all de-

fendants and judgments of guilt were entered.

On June 23, 1964—four days later-—-the government

filed civil actions in the United States District Court at

Los Angeles against the same defendant corporations.

In C.A, 64832, American and United were named de-

fendants; in C.A, 64833, Kaiser and U. S. Steel were

named defendants; in C.A, 64834, United, American,

Kaiser and U. S. Steel were named defendants; in C.A.

64835, USI, Smith-Scott, U. §. Steel, American and

United were named defendants; in C.A, 64836, U. §.

Steel, Smith-Scott and USI were named defendants.’ In

these five government civil actions the United States

predicated the complaints upon 31 U.S.C. &§ 23}-233

(False Claims Act) and 15 U.S.C. § 15a (Clayton 4A),

The complaints ‘were based on the facts uncovered by

the government in preparing its criminal indictments.

On October 28, 1964, the government amended each

of its five complaints by adding a new count under 15

‘Company, American Concrete Pipe Co., of Phoenix, Arizona,

Pipe Linings Inc., “and ee en ae * * * not made

defendants in this indictment, participated as co-cons in

the offense charged.” E.G., Indictment, Cr. 33340 (§.D. Cal.).

"Each complaint concerned itself with differing sizes of pres-

sure and non-pressure steel and/or concrete pipe, but the charges

of violations were all essentially identical.

alien

U.S.C. § 4 seeking to restrain continuing violations by

the defendants of Section | of the Sherman Act.

Some two years later, on December 8, 1967, with the

consent of each defendant except American, a “Partial

Final Judgment” was entered in cach case, i.e, by De-

cember 8, 1967, all save American compromised and

settled their cases with the United States. These “partial

final judgments” enjoined cach of the consenting de-

fendants from engaging in enumerated violations of

Sherman | for five years.

On May 24, 1968, a “Final Judgment” was en-

tered against American—only—in each of the three

government cases in which it had been named as a de-

fendant. It is thus clear that although the judgments of

December 8, 1967, were culled “Partial Final Judgment,” .

they were in fact final judgments as to all named de-

fendants except American.

In 1961, a Clayton 7 divestiture action was brought

by the Federal Trade Commission (FTC) against Mar-

tin-Marietta Corporation (Martin-Marictta), and on

March 12, 1963, a consent decree was entered, order-

ing not only divestiture by Martin-Marietta of certain

named concrete pipe and other plants within twenty-

four months but also placing a ten-year restraint on

Martin-Marictta against acquisition of similar plants.

On August 21, 1967, the cities of Phoenix, Mesa,

Tucson, Tempe, Scottsdale and Flagstaff, and the

towns of Goodyear and Showlow, all Arizona munici-

pal corporations, filed a Sherman | and 2 violation

complaint in the District of Arizona, similar to the one

filed by the plaintiff herein, denominated a “class ac-

tion”, against American, American Concrete Pipe Co.

(American Concrete )," Kaiser, Smith-Scott, United, USI

and U. S. Steel. The State of Arizona, through its At .

torney General, as a subsequent intervening party

plaintiff in that action, thereafter on September 20,

1968 entered into a covenant not to sue with defend-

ants U.S. Steel, Kaiser and USI. Due to settlement

negotiations, this Arizona “class action” never moved

beyond the basic initial proceedings, and no rulings

were made by this court on the class action aspect of

the case and no intervention was made by any possible

member of the “class”, except the State of Arizona.

The plaintiff here, Maricopa County, never moved to

intervenc in that action.

On April 19, 1969, plaintiff herein filed its com-

plaint against all of the defendants named in the head-

ing of this case except Arizona Concrete Pipe Co. (Ari-

zona Concrete) and Six Points Lumber & Supply Co.

(O'Malley). On May 22, 1969, plaintiff filed its First

Amended Complaint against the same defendants

named in the original complaint and added Arizona

Concrete” and O'Malley. The complaints charged all

defendants with the same acts, as violating Sherman |

-and 2, as were delineated in both the government's

criminal and civil actions.

DEFENDANTS URGE NINE THEORIES

All defendants maintain (1) that since there was at

least a four-day hiatus between the termination of the

criminal actions by the government and the filing of

government civil actions which did not ‘toll the stat-

“For the purpose of this decision, American and American

Concrete are considered one and the same, and the term “Amer-

ican” as used hereafter applies to both.

*Arizona Concrete had entered no‘ nee in this case

when defendants’ motions were argued on June 16, 1969.

ute, therefore the tolling period, under § 5(b), within

which the plaintiff was privileged to file its suit, termi-

nated on June 18, 1965, ie., one year after the ter-

mination of the criminal actions; and (2) since the plain-

tiff alleged that defendants’ illegal conspiracies termi-

nated some time in 1962, ergo, the last date upon

which plaintiff could have filed, to have any possible

cause of action within the four-year statutory period of

limitations under Clayton 4B (15 U.S.C. § 15b), would

be not later than the end of 1966."

All defendants further maintain (3) that there can

be no tacking of successive tolling periods onto that

invoked by the government's criminal actions, so that

even though the government on October 28, 1964,

amended its complaint to add an injunctive count

which would normally invoke the tolling provisions of

§ 5(b), neither can the possible tolling aspects raised by

the government's amended complaints be related back

under the F.R.Civ. P. 15(c) to June 24, 1964, when the

government's non-tolling complaints were initially filed,

nor can the amended complaints have any tolling effect

whatsoever. To do so, defendants argue, would be to

tack on successive tolling periods. All defendants, save

American, Martin-Marietta and O'Malley, also urge (4)

that since final judgments were entered in the govern-

ment civil action against them on December 8, 1967, the

tolling provisions of § 5(b) in any event, ended on De-

cember 8, 1968, as to them. Martin-Marietta and O’-

Malley urge (5) that since they were never named as

defendants or co-conspirators in any government action,

® in 23 of its First Amended Com

nee, o LEN scataae acted wopher to concedd te

tiff as a basis upon h the statute might be tolled.

{NX

r -

civil or criminal in the “pipe” cases, neither the criminal

nor the civil government actions had any tolling>effect

upon any cause of action now alleged against them, ©

and since the plaintiff alleges the conspiracy terminated

some time in 1962, the last date upon which plain-

tiff could have “brought the present action was not

later than the end of 1966. Martin-Marietta also main-

tains (6) that (a). the FTC action had no tolling ef

fect as to it, inasmuch us the Clayton 7 action toad

‘the FTC was‘not based in whole or in ‘part on any

matter complained of in plaintiff's complaint and § 5(b)

did not apply; and (b) even if it did, any possible

tolling terminatéd one year after the entry of the FTC

order on March 12, 1963. O'Malley also urges (7)

that not only was it never an alleged co-conspirator

or defendant in any government action but that also it

had never been named a defendant in any end-user

complaint filed in Arizona or anywhere else, therefore

the tolling provisions of § 5(b) had no upplication to

it.

U. S. Steel, Kaiser and USI also maintain (8) that

inasmuch as Maricopa County is a political subdivisiqn

of the State of Arizona, and the State, by its Attor-

ney General, entered into a Covenant Not To Sue with

them on September 20, 1968, the plaintiff, as such a

political subdivision, is bound by that covenant and

estopped to bring this present suit.

All parties maintain (9) that the doctrine of laches

should be applied because of the late, late filing of

the complaint.

APPLICABLE LAW

Of course, the primary problems before this court

are (a) whether or not the tolling provision of § 5(b)

remained in full force and effect past June 19, 1965,

and if so, (b) whether it so continued as to all con-

spirators named in the government suit except Ameri-

can, after December 8, 1968.

[1] It is settled that if a claim is brought after the

running of the statute of limitations and such defect is

apparent on the face of the complaint, it is tanta-

mount to a failure to state a cause of action and such

“defense” may be raised by a motion to dismiss, but

since, as here, there are usually several tolling theories

involved, necessitating that the motions be accompanied

by reference to matters outside the pleadings, the usual

practice is to include a motion for summary judgment

together with that for dismissal.’ These defendants’ mo-

tions, then, are properly before the court.

[2-4] Section 4B of the Clayton Act (15 U.S.C. § 15b)

recites that suits under §§ 4 or 4A of that Act are “for-

ever barred unless commenced within four years after

the cause of action accrued.” A cause of action under

the Sherman Act accrues when the antitrust laws are

violated, and there is a causally related injury to busi-

ness or property flowing from such violation.® A con-

spiracy of the nature here alleged is a continuing one

and is in affect renewed during cach day of its con-

tinuance.* When the cause of action is based on such

*Suckow Borax Mines Consol., Inc. v. Borax Consolidated, 185

F.2d 196 (9 Cir. 1950). \s

®Flin ‘0. v. Lysfjord, 246 F.2d 368 (9 Cir. 1957).

“United ‘States v. Borden Co., 308 U.S. 188, 60 S.Ct. 182,

84 L.Ed. 181 (1939); United States v. ye? Oil Co.,

310 U.S. 150, 60 S.Ct. 811, 84 L.Ed, 1129 (1940)

an alleged unlawful conspiracy, the cause of action

accrues und § 4B begins to run upon the occurrence of

cach overt act causing damage to the plaintiff.’ Since

the complaint here alleges that the conspiracy began

“in and about 1954” and continued. until some time in

' 1962 with the overt acts occurring prior to the end of

1962, and the complaint here was filed on April 15,

1969, on the face of the complaint therefore more than

_ four years must have passed since any overt acts could

have last occurred and plaintiff's claims are therefore

barred by reason of the running of the four-year statute

of limitations fixed by § 4B unless the statute in this

case has been suspended or télled. . ,

[5] Section 5(b) of the Clayton Act (15 U.S.C. § 16

(b)),* suspends the running of the statute of limita-

tions as to private claims during the pendency of any

government civil or criminal antitrust action “based in .

whole or in part on any matter complained of in” a

government proceeding “during the pendency thereof

and for one year thereafter.” With certainty, therefore,

the government criminal indictments, supra, put into

effect the § 5(b) suspension of the statute as to the

defendants named in the indictments and kept alive

"Suckow, supra n. 4.

“Whenever any civil or criminal proceeding is instituted

the United States to prevent, restrain, or punish violations Pe

of the antitrust laws, but not including: an action under section

15a of this title, the running of the statute of limitations in

of every private right of action arising under said laws and

in whole pape part on _ Se ee of in said

suspended during pendency thereof

year thereafter: Provided, however, that whenever

of the statute of limitations in respect of a cause of acti

ing under section 15 of this title is suspended hereunder, ,

tion to enforce such cause of action shall be forever

less commenced either within the period of suspension or wi

four years after the cause of action accrued.”

valid

—10—

plaintiff's Pare to sue for any of their overt, illegal

_ acts causing injury to it within the four. years prior to

the return of the criminal indictments . ‘on March 10,

1964, The government's criminal, actions were termi-

noted on-June 19, 1964, when judgments of conviction

were entered therein and the one-year extension of the

_ Suspension thereupon started running.

{6] The government's False Claims and Clayton 4A

actions, as filed June 23,: 1964, are expressly excluded

from the tolling provisions of § 5(b). With equal cer~ —

tainty therefore, until the. government amended its

complaints’ on October: 28, 1964, to add a claim for

_ injunctive relief under 15 U.S.C. § 4, the pendency of |

_ .those first. government civil actions had no effect upon.

the ticking away of the one-year suspension. period

following June 19, 1964. |

DEFENDANTS’ THEORIES 1, 2, 3

_. Defendants maintain that when the suspension pro-

visions of § 5(b) were started:up by the return of the

indictments on March 10, 1964, no government civil

- or criminal action filed thereafter would have any effect

. upon the period of suspension established thereby, i.e.,

‘there could be no tacking of tolling periods simply be-

cause there might thereafter develop an overlap in gov-

ernment civil-criminal anti-trust proceedings. Defend-

ants’ pasition flows primarily from dicta in Dickinson,

Inc. v. Kansas City Star Company, 173 F.Supp. 423

(W.D. Missouri 1959). Dickinson involved a private

antitrust action filed after the government had “simul-

taneously commenced a criminal and a civil action

against defendants for violation of Section 2 of the

Sherman Act.” (At 423.) The government -criminal ac-

tion terminated before, the government’s civil action: ©

a -

hte, and the court rejected the defendants’ argu-

ment that the § 5(b) suspension ended one year after

the criminal action terminated. In holding that the

plaintiff could take advantage of -the prima facie effect —

_ Of the criminal judgment (the basic question before the

court being an evidentiary one), the court gsatuitously

stated that the result would be otherwise if the two

government actions had been successively filed rather

than contemporancously brought:

“The rule is, that ‘successive disabilities may ‘not.

be tacked to one another so as to bring a party |

__ within the exceptions to the statute of limitations.’ |

_ 54 C3.S.. Limitations of Actions, p. 254, § 219.”

173 F.Supp. at 425.

Dickinson (at 424), relying on Sun Theatre Corp. v.

RKO Radio Pictures, 213 F.2d 284, 290 (7 Cir. 1954), |

held that the evidentiary benefits of the first paragraph

of Clayton § 5 (15 U.S.C. § 16), and the tolling pro-

visions of the second paragraph are “complimentary”,

and must be construed together. Thus, the court’s con-

Clusatory dicta was not illogical—in 1959.

The Dickinson dicta was referred to in the excellent

decision of Judge Larson in State of Michigan v. Mor-

ton Salt Company, 259 F.Supp. 35, 51 (D.Minn.

1966):

“It may be that in some instances tolling the stat-

ute during successive actions would result in

treble damage claims of such vintage that it would

be patently unreasonable to assume that Con-

gress meant to allow ‘tacking’ under § 5(b). * * *

But Judge Larson thereafter watered down this post

lation by continuing: oe

“But here, the civil complaint was filed.. within

two weeks of the indictment. Although not simul-

tancously commenced, the two actions ‘were pend- ©

ing concurrently. I think this situation falls within

_permissible « limits. so that the suspension could

_- continue until the conclusion of the civil suit.”

Short of perfectly “concurrent” filings, this court fails

to perceive any difference, in their tolling or tacking

effect, between successive government antitrust proceed-

ings, one of which may have been filed one minute,

one hour, one day, one week, or any period of time

after another has been filed.”

‘The “complimentary” and. togetherness construction

given Clayton §§ 5(a) and 5(b), by Sun Theatre and

Dickinson was discarded and overruled in Minnesota

Mining & ‘Manufacturing Co. v. New Jersey Wood '

Finishing Co., 381 U.S. 311, 317, 319, 85.S.Ct. 1473,

14 L.Ed.2d 405 (1965) (hereinafter cited as 3M), in ©

holding that § .5(b) was completely severable from .

§ 5(a), the court adding: “[T]extual distinctions as

well as the policy basis of § 5(b) indicate that it was

to serve a more comprehensive function ‘in the con-

gressional scheme of things.” (At 319, 85 S.Ct. at

1477.)

~ Both 3M and Leh v. General Petroleum Corpora-

tion, 382 U.S. 54, 86 S.Ct. 203, 15 L.Ed.2d 134

(1965), state and restate the principle that the scope

of § 5(b) is not to be restrictively interpreted.” Al-

*There’s no such condition as being only a little bit preg-

nant.

103M, 381 U.S. at 319, 322, 85 S. Ct. 1473; Leh,

supra, 382 US. at 56, 59, 86 S. Ct. 203.

of suspensions followed in Union Carbide & Carbon

Corp. v. ‘Nisley, 300 F.2d 561 (10 Cir. 1961), was

not

Hedi

PhP eps pop Sete tage

Sun Theatre and -Dickinson, that absent “simultane-

ous” filing of government criminal and civil antitrust

actions the “first in first out” rule on tolling would

As this court sees it, Nisley, 3M and Leh are dis-

positive of this problem (and most of the others now

before the court). Nisley permitted “tacking” to enable

two plaintiffs to bring an action in 1958 for overt acts

occurring in, 1938, violating the antitrust laws, by first

giving full effect to the 1942 war-time. tolling stat-

utes, 56 Stat. 71, as amended 59 Stat. 306, 15 U.S.C.

§ 16, under which all statutes of limitations applicable

to antitrust violations were suspended -until June 30,

1946. Then, in June of 1946, the government filed

an antitrust indictment against the defendants which

. was dismissed upon the filing by the government, in

September 1948, of an antitrust criminal information

against the same defendants which was not terminated

until: June 2, 1957. Plaintiffs filed their action within

one year thereafter, relying upon § 5 of the Clayton

Act. The Court of Appeals in Nisley analyzed in

depth the rationale and scope intended by Congress to

_be given § 5(b) when it enacted the same (see 300

F.2d at 568-569), and while holding, on the authority

of Sun Theatre, the two subsections to be complimen-

tary and should therefore be construed together, de-

—1l4—

cided that they were not “necessarily co-extensive in

their frame of reference.”"' 300 F.2d at 569.

The Court in 3M approved the reasoning of Nisley

and stated:

“(T]he textual distinctions as well as the policy

basis of § 5(b) indicate that it was to serve a more

comprehensive function in the congressional

scheme of things. The Government's initial action

may aid the private litigant in a number of other

ways. The pleadings, transcripts of testimony, ex-

hibits and documents are available to him in most

instances. * * * Moreover, difficult questions of

law may be tested and definitively resolved before

the private litigant enters the fray. The greater —

resources and expertise of the Commission and

its staff render the private suiger a tremendous

benefit aside from any value he may derive from

a judgment or decree. Indeed so useful is this

service that government proceedings are recognized

as a major source of evidence for private parties.”

381 U.S. at 319, 85 S.Ct. at 1478.

The Court in Leh, referring to Nisley and 3M, re-

affirmed the rationale of both, restating that it was

Congress’ “ ‘belief that private antitrust litigation is

one of the surest weapons for éffective enforcement of

the antitrust laws.” 381 U.S., at 318, 85 S.Ct, at

1477","" and that the overriding purpose of the Clay-

ton Act's tolling provision is to assist private litigants

"On that rationale, the appellate court found that a govern-

ment antitrust suit was rer ng (for the tolling purposes of § 5-

(b)) from the time in 1946 when the criminal indictment was

filed until the termination of the suit on the information in 1957,

Nisley, supra, 300 F.2d at 570.

"Leh, 382 U.S. at 59, 86 S.Ct. at 207.

endian

in utilizing any benefits they might cull from any gov-

ernment antitrust actions,

[7] 3M and Leh unequivocally indicate that the lan-

guage of § 5(b) must be given its broadest application

in favor of enabling private litigants to reap every bene-

fit that they possibly can out of any governmental

criminal or civil antitrust litigation during the pendency

of each and within one year thereafter. Congress has

seen fit to extend to private litigants the privilege of

waiting until any government action has come to an

end and then extend the suspension for an additional

one year. This court cannot deny to the plaintiff the

fullest use of that congressional privilege.

Defendants cite 54 C.J.S. Limitations of Actions

§ 219, p. 254, as supporting their contention that the

suspension of the four-year statute of limitations ter-

minated on June 19, 1965, and that the filing of the

government civil actions after June 19, 1964, could

not extend nor add to the one-year suspension created

by the government's criminal actions. Even a superfi-

cial glance at § 219 indicates that the rule that “[s|uc-

cessive disabilities may not be tacked to one another

so as to bring a party within the exceptions to the stat-

ute of limitations” was intended to apply to several

disabilities of the same person, e.g., disability of in-

fancy tacked to disability of coverture or insanity,

etc. The case of Givens v. Jones, 158 Okl. 124, 12

P.2d 892, one of the cases cited in support of the

rule, involved the problem of minority with subsequent

mental incompetency after adulthood. The Oklahoma

court correctly stated that the “party claiming the bene-

fit of a disability can only avail himself of the exist-

ing disability when the right of action first accrues,

unless the statute provides otherwise.” (Emphasis

—

added.) 12 P.2d at 894. Not only is the matter now be-

fore the court not concerned with several disabilities

of the same person, but also the congressional act, sus-

pending the statute of limitations, specifically provides

for the suspension during any period that any govern-

ment action is pending and for one year shereafter.

|8] This court recognizes the general rule that “stat-

utes of limitations are statutes of repose and are favored

by the courts”,"" and that the underlying purpose “is to

force a litigant to get moving, * * * to pursue every

avenue of relief promptly,.while the evidence is fresh

and the witnesses are available”, and that it was

with this in mind, as well as for other reasons, that

Congress fixed the statute of limitations in antitrust

cases at four years. Having so fixed the statute of limi-

tations, Congress could have stopped right there—but

it didn't. Congress, with deliberation and specificity, dis-

turbed that “repose” and overrode that purpose by

enacting § 5(b), to make manifest that in encouraging

the enforcement of the antitrust laws by private litiga-

tion, tolling of thé statute was more important than

the repose established thereby.

19] By § 5(b) Congress has said that so long as “any

government proceedings” (emphasis added) were pend-

ing and for one year thereafter, antitrust claims were

not stale and could be enforced. In balancing the equi-

ties of plaintiff and defendant in repose and tolling,

Congress deliberately weighted the. law in favor of the

private plaintiff and not the antitrust defendant. While

“Hamrick v. Indianapolis Humane Society, Inc., 273 F.2d 7,

9 (7 Cir. 1959), cert. den. 362 U.S. 919, 80 S.Ct. 671, 4 L.Ed.

2d 739 (1960).

a v. Falls Products Incorporated, 299 F.2d 173 (5 Cir.

—

the logic of the policy generally underlying a statute

of limitations is to assure fairness to the defendants,

who must bear the burden of suit, Congress made

antitrust actions an exception to the general{ rule and

instead made antitrust defendants fair game for the

private plaintiff to shoot at for one year after the end

of any government antitrust proceedings.

This court is not here faced with or considering

the classical legal concept of tacking successive disabili-

tics. The use of the term “tacking” in the context of

§ 5(b) is statutorily inapplicable if the congressional

policy so definitively stated in 3M and Leh is to be

given the broad use and effect desired by Congress.

Here, this court can be and isonly concerned with

the implementation of that congressional policy of giv-

ing every opportunity to private plaintiffs to enforce

the antitrust laws. It was upon this last.broad concept

that 3M extended § 5(b) to include not only govern-

mental criminal actions and civil actions stemming

from the same facts upon which criminal charges were

based, but also to FTC actions, if private antitrust liti-

gation thereafter undertaken was. based in whole or in

part on any matter complained of in any such govern-

ment antitrust proceedings.”

[10] Congress made no distinction between govern-

ment civil or criminal antitrust procecdings nor cared

when either was filed. Any such governmental proceeding.

stands on its own legislative foundation and carries its

own severable tolling provisions with it, If the periods

of the government actions happen to overlap, the end

of one tolling period following the termination of a

government action does not in any wise disturb or cur-

Excepting, of course, 15 U.S.C. § 1Sa actions.

tail the free flowing river of suspension created by and

welling from the filing of any government antitrust pro- 7

ceedings. Private antitrust litigation may be filed at any —

time prior to onc year after the termination of any

criminal or civil proceedings, whenever the same may

have been filed, concurrently or successively. As indi-

cated, if two or more periods of tolling happen to over-

lap, as is here the case, then since the statutory toll-

ing period has never become moribund nor buried, the

tolling privisions continue to be viable until the end

‘of the one-year extension following the termination of

the last government action to end.

One caveat, however, is illustrated by the present

case. Presupposing that before that one year period

of suspension following the termination of criminal ac-

tions had ended, ic., June 19, 1965, the government

had filed its same False Claims and § 4A actions (as

was here done), and after June 19, 1965, the govern-

ment had then amended its civil actions to add an anti-

trust injunctive count, this court would have no hesi-

tancy in stating that the insertion of the injunctive anti-

trust count by amendment would not revive any claims

already made. moribund by the termination of the one-

year extension. “What is dead, is dead”, and an at-

tempted heart transplant by the relation-back theory

on amendments under F.R.Civ.Pé 15(c) would not re-

vive the cause of action."* That, however, is not the sit-

uation here.” The one-year suspension period follow-

'4C/, Nisley, 300 F.2d at 571, Salyers v. United States, 257

F. 255 (8 Cir. 1919); Standard Oil Co. v. Perkins, 396 F.2d 809

(9 Cir, 1967), rev'd on other grounds, 395 U.S, 642, 89 S.Ct.

1871, 23 L. Ed, 2d $99 (1969), .

'TIf the government filed a new action under 15 U.S.C. § 4

after the one year had expired, the result, of course, would be the

same.

—19—

ing June 19, 1964, had not ended, when on October

28, 1964, the government amended its complaint to file

the injunctive count, so this court is not called upon

to decide the effect of F.R.Civ.P. 15(¢) on an already

*- demised cause of action.

DEFENDANTS’ THEORY 4

[11] Inasmuch as the government's antitrust injunc-

tive count was filed within one year from the date of the

end of the government's criminal actions, the period

of suspension of the four-year limitation period never

died but continued on to the advantage of any lag-

gardly plaintiff for not only one year after December

6, 1967, when final judgments were filed as to all de-

fendants named in the government's civil actions save

American, but also continued its tolling effect until one

year after final judgment in the case involving Amer-

ican.

There is no question but that by this holding, de-

fendants U. S. Steel, Kaiser, United, Smith-Scott and

USI are badly hurt because of the failure of American

to settle out with the government at the same time in

1967 that they did. Unfortunately for them however,

by their prior conspiratorial actions they had become

solidly chained to American until all government cases

were terminated and were, willy-nilly, dragged along

into their present predicament by the stubborn refusal

of American to conclude its case with the government

when they did. Since plaintiff's action is based almost

wholly upon the same conspiratorial acts alleged by

the po ee in both its criminal and civil actions,

the-statute of limitations thus remained tolled as to all

defendants named in the government actions until one

year after the government's civil case against Amer-

rT ae

—20—

ican had terminated, viz., until May 24, 1969. The

plaintiff, having filed its action against those defend-

ants on April 15, 1969, therefore gains the fullest ad-

vantage of the tolling provisions of § 5(b), in the op-

timum implementation of the congressional policy as

interpreted in 3M and Leh.

DEFENDANTS THEORIES 5 and 7

}12] Martin-Marictta and O'Malley, however, were

not defendants in the government suit nor were they

named as co-conspirators. A comparison of the allega-

tions in plaintiff's complaint, here, with the government

complaints, makes it manifest, however, that the alleged

conspiratorial acts of these two defendants were cn-

twined with and fundamentally the same as those of the

defendants named in the government actions; with cer-

tainty, plaintiff's claims against them are “based in

whole or in part” on the violations alleged in the gov-

ernment actions. 15 U.S.C. § 16(b). Prior to Leh, in

the Ninth Circuit, this similarity probably would not

have been sufficient to toll the statute as to them.

Steiner v. 20th Century-Fox Film Corp., 232 F.2d 190

(9 Cir. 1956), demanded that under § 5(b) a “ ‘greater

similarity is needed than that the same conspiracies are

alleged. The same means must be used to achieve the

same objectives of the same conspiracies by the same

defendants.’ 232 F.2d, at 196.""* The Supreme Court,

in Leh. overruled Steiner. The Court of Appeals, in

Leh.” in following Steiner, had concluded that the

running of the statute of limitations was: not suspended

because “there were not only different overt acts

charged, but different conspiracies, occurring at differ-

18382 U.S. at 57, 86 S.Ct. at 206.

19330 F.2d 288 (9 Cir. 1964).

ent times, between different parties.” The Supreme

Court, in Leh, however, held that the . “private

plaintiff is not required to allege that the same means

were used to achicve the same objectives of the same

conspiracies by the same defendants (emphasis added).

Rather, effect must be given to the broad terms of the

statute itsclf—‘bascd in whole or in part on any mat-

ter complained of’” (italicized in original), and con-

tinued: “|T|he courts must not allow a legitimate con-

cern that invocation of § 5(b) be made in good faith

to lead them ints a niggardly construction of the statu-

tory language * * *,"!

If more were needed, the Supreme Court, in Leh, re-

ferred back to 3M and found that the difference in

parties did not prevent a tolling of limitations as. to

3M, since the private plaintiff's Sherman Act claims

set up substantially the same claims as were presented

by the government in the Clayton Act proceedings be-

fore the FTC. The Court concluded:

“Just as in Minnesota Mining the differences

between Sherman Act and Clayton Act proceed-

ings were held not to require the conclusion that

the private action under the Sherman Act was not

based in part on any matter complained of in the

Government’s § 7 suit, so here we cannot conclude

that a private claimant may invoke § 5(b) only

if the conspiracy of which he complains has the

same breadth and scope in time and participants

as the conspiracy described in the government

action on which he relies. Here there is substantial

identity of parties, six of the seven defendants in

207d. at 301. ,

21382 U.S. at 59, 86 S.Ct. at 207.

; 9

= on

this case being defendants in the government suit

as well. In-suits of this kind, the absence of com-

plete identity of defendants may be explained on

several grounds unrelated to the question of wheth-

er the private claimant’s suit is based on matters

of which the Government complained. In the in-

terim between the filing of the two actions it may -

have become apparent that a party named as a

defendant by the Government was in fact not a

party to the antitrust violation alleged. Or the

private plaintiff may prefer to limit his suit to the

defendants named by the Government whose activ-

ities contributed most directly to the injury of

which he complains. On the other hand, some of

vate claimant may have been too low in the con-

spiracy to be selected as named defendants or

co-conspirators in the Government’s necessarily

broader net.””” |

So here, the two defendants, Martin-Marietta and

O’Malley, though never mentioned in the government

actions, nevertheless are also caught by the gills with

the other alleged co-conspirators who became entangled

in the government’s net.”

DEFENDANTS’ THEORY 8

[13] The covenant not to sue executed by the State of -

Arizona in favor of U. S. Steel, Kaiser and USI pur-

ported to bind the State of Arizona, its departments,

agencies and entities, to refrain from suing the three

corporations for any antitrust “pipe” claims it might

have against them and any overt acts of the three de-

227d. at 63-64, 86 S.Ct. at 209.

%3See also Morton Salt, supra, 259 F. Supp. at 53-55.

- fendants prior to June 20, 1968..It is noted that the

. State actually intervened as a party “plaintiff in the

action brought by the cities of Phoenix, Mesa,

Tempe, etc., and the towns of Goodyear and Show-

low.” Thus the State certainly purported to be an en-

tity separate from the cities and towns within it. Under

Arizona Revised Statutes § 11-202 each county in

Arizona is a: body politic and corporate, and by A.R.S.

-§ 11-532 a county’s attorney is given the authority to

sue on behalf of that county. A.R.S. § 41-192 gives the

State Attorney General of Arizona: the power to co-

ordinate the legal services required of other departments. __

of the State or other State agencies This last power ap-_

parently gives to the Attorney General the power to

bring actions on behalf of the counties only when the

county specifically requests the Attorney General to so

represent it.

Plaintiff's Exhibit 2 shows that the State Attorney

General at no time represented Maricopa County in

the Phoenix, et al., case, nor was he ever requested to

SO represent Maricopa County. The State of Arizona did

not intervene in the City of Phoenix case as a party

in a class. The State of Arizona’s covenant not to sue

had no relationship to nor effect on the present action

brought by Maricopa County.” |

*4U. S. Steel Exhibit G, p. 406.

**Defendants U. S. Steel, Kaiser and Martin-Marietta have

raised the issue that because this court set a cutoff date for in-

tervention in some seven class actions filed in the states of

Hawaii, Washington, Oregon and California, and such actions

were subsequently settled, therefore the failure of plaintiff herein

to have intervened therein before that cutoff date, in some man-

ner forecloses it from bringing the present action. The several

class actions involved in the 1965 cutoff order of this court, on

the face of each complaint affected thereby, limited the parties of

the class to the public agencies in each of the above several

states. The plaintiff here was never Officially notified of the

pendency of those class actions, nor did it join in the same.

DEFENDANTS’ THEORY 9

[14] All defendants maintain that in any event plain-

tiffs cause of action is barred by laches. It was laches

which apparently concerned Judge Larson in Morton

Salt when he said: |

“It may be that in some instances tolling the stat-

ute during successive actions would result in

treble damage’claims of such vintage that it would

be patently unreasonable to assume that Congress

meant to allow ‘tacking’ under § 5(b).” 259 F.

Supp. at 51. nk

Assuming arguendo that laches might be a defense to

an action at daw,” ‘nevertheless, Royal Air Properties,

Inc. v. Smith, 312 F.2d 210, 214 (9 Cir. 1962), on

laches in general, and Nisley as laches particularly

applies to antitrust: actions, hold that federally created

statutes of limitation are not to be curtailed or cut

short. The congressional intent that there must be pre-

served to the private litigant every possible benefit he

can glean from any antitrust laws is the underlying and

ever present factor in our decision-making process.”

[ 15, 16] Moreover, the equitable doctrine of laches is

addressed to the discretion of the trial court to be deter- .

mined by the particular circumstances of the case then

before the court, the crucial consideration being wheth-

er there has been such a lapse of time as would do an

‘injustice to the defendants if plaintiffs action were

permitted to stand.** While the claims of the plain-

26Cf. Schultz v. Manufacturers & Traders Trust Co., 40 F.

Supp. 675 (W.D.N.Y. 1941).

27Cf. also United States v. Manufacturers Hanover Trust, 229

F.Supp. 544, 546 (S.D.N.Y. 1964).

*8Refrigerated Transport Co. v. United States, 297 F.Supp.

5, 7 (N.D. Ga. 1969).

—25—

tiff involved purchases of pipe made by it prior to the

end of 1962, it is not now urged by any of the de-

fendants that they have no records of sales dating that

far back. To the contrary, this court would take ju-

dicial notice of the fact that the records of sales trans-

actions of the several defendants here have been pro-

duced, dating as far back as 1954, in the actions of

the almost 400 plaintiffs filed in the various districts

of the Ninth Circuit between 1964 and 1969, upon all of

which cases this judge has sat. The circumstances of the

alleged conspiracies, the documents and parties involved,

have been developed in depth, and documents and depo-

sitions of the alleged conspiring parties are still readily

available to each and every defendant. The lapse of

time, in this case, in no wise affects the defendants’

ability to respond to the plaintiff’s complaint.

The defense of aches is here unavailable to the

defendants.

DEFENDANTS’ THEORY 6

This court's disposition of the statute of limitations

problems as the same affect Martin-Marietta, makes it

unnecessary for this court to pass upon plaintiff's alle-

gations that the FTC proceedings, based on a violation

of Clayton 7, filed January 27, 1961, followed by a

consent order of that Commission on March 12, 1963,

Suspends the running of the statute of limitations

against Martin-Marietta in this case, because the order

of divestiture gave Martin-Marietta 24 months to dispose

of certain plants and enjoined certain acts by Martin-

Marietta for a period of 10 years.” As indicated

a 3M and Leh, supra; Sun T. heatre, supra, 213 F.2d

at .

by this court during oral argument, however. ee FTC .

that proceeding for the purpose of § S(b), even though:

a few implementary housckeeping chores were con

tinued thereafter.

Defendants’ motions to dismiss or for summary

judgment are dented:

epieon ad the Ceart of Gpge.a>

ter the Mints Circa.

United States Cont of Appeals. for the Ninth Cir-

wd watilecmanemse

peliants’ motor for summary jedgment. We affirm on

the grounds stated im the district court's opimon. ¢x-

cept that we do not pass upon the soundness of the

district court's dictam thai a government uentitrust pro-

ceeding filed more than one year sabeoquent to the

termination of a priot goverament antitrust procesd-

ing could not toll the rumming of the statute of tim

tations on private weble damage actions. Nor do we ~

pess upon the conteation, mede for the first time im 4

reply brief in this court, that a partial summary judg: !

: 2B

defendant in two of the five civil actions commenced

by the goverament, We sce fo reason to depart from

the general rule that a district court: judgment should

not be ‘reversed on grounds not raised below. Our af:

firmance ix without prejudice, however, to the filing in

the district court by appellants of a motion for par

HAMLEY, J.. (Dissenting in part): |

1 concur in ‘the majority opinion except insofar as

O'Malicy-Gannaway Concret Pipe Co.

The motion for dismissal of the action made by

these two defendants on the planttts

of limitations provided by section 4B of the Clayton |

Act, 15 U.S.C. § 15Sb. The district court rejected this

» the

—2e

criminal or civil proceeding, tunufar 0s Game wwe @>

fendant. arc concerned, the imetant case is net, in my

opion, based in whole orm part om any mattcr com

plained of im the prior governmcei actions.

1 cocagmiac thet the deciaon in Stair of New Jerory

7 Geren Sah Company, 37 B28 94. (8 Ch.

{987} supports the view of the masarity. ft in ne dowkt

foc, a Reid ivi Agorsee Solr thet the tolhag provision |

was enacted for the benefit of private parties who were

cnyered But | am rot pereuaded thet Congres intended ‘|

that provimon to override, ax to persons and compante: .,

Im po way imvelved im the pricr govermment antierest |

of repone.

4°

APPENDIX “DB”.

Coder,

United States Court of Appeals for the Ninth Circutt.

——

APPENINK “EE.

1. United States Gode, Tite 15, Section 15 (Clap

ton Act of October 15, 1924, c. 323, § 4, 38 Seat. 731):

“Aay person who shall be injured im his busi

Ress or property by reason of anything forbidden

in the antitrust laws may sce therefor in any dic

trict court of the United States in the district in

Comtroversy, and shall recover actual damages by

it sustained amd the cost of suit.”

3. United States Code, Tithe 15, Section 1S)

(Clayton Act of Gotpber 15, 1914, c. 323, § 4B, as

added Suly 7, 1955, c. 283, § 1, OD Stat. $83):

“Amy action to em wee amy cause of action un-

der sections 1S or 15) of this tithe shall be forever

barred unless within four years after

the cause of action accrued. No cause of action

barred under existing law on the effective date of

this section and cictions 1Sa and 16 of this ttle

shall be revived by said sections.”

7, 1955, c. 283, § 2(0),

civil or criminal proceeding 1s

“Whenever any

instituted by the United States to prevent, restrain,

eae epee,

number 64-833 (Vol. Two, R.245; on which plaintiffs

Fath Cause of Action. (Amended Complaia, gare.

‘XM; Vol. One, R. 104] is Based) or number 64-896

(Vol. Two, R. 306; on which platatlif: Second Cause

of Action | Amended Complaint, para. X; Vol. One; R.

100} is Based). Therefore, even wander the lastdefend-

amt rule relied upon below, the tolling ported in each

actions ended one year after the December 8, 1967,

Capitulation of the named defendants, or approximately

five months prior to the filing of plaintiff's complaint.

Furthermore, American Pipe and Constvection Co. and

United Concrete Pipe Corporation were the only par-

ties to Government action aumber 64-832 (Vol. Two,

R.224; on which plaintlffs Sixth Cause of Action -

[Amended Complaint, para. XIV; Vol. One, R.105)

is based). Action 64-832 cannot affect the rights of

_ Other defendants herein uniess the pendency of a Gov-

crament action against one group of defendants tolls

the statute of limitations as to other partics in other

actions. Therefore, it is only as to actions involving

Ctermate pressure pipe, ic, Government ection aum-

ber 64-834 (Vol. Two, R.264; on which plaintiff's

Fourth Cause of Action [Amended Complaint, pare.

Xi; Vol.<One, R.103] is based) and aumber 64-835

(Vol. Two, R.285; on which plaintiff's Third Cause of

_ Action [Amended Complaint, para. XI; Vol. One, R.

102] is based) that the tolling period did not terminate

as to defendants Kaiser Stee] Corporation and United

é — .

Sates Sweet Corporation on December 8, 196b—ap

pronimatcty five months prict to the filing of the Com-

| gaaten Revein. ‘Thus, even ender the crroncow: bebding

@f Ge court Gelow,. ol of plaietlif: claims, encept

those Wn the Third and Fourth Causes of Action, are

Darred ty the statute of ewwtatecens

2.0 098 <P Poa pepe renege

pepepepe pee”

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PUP Pe pene e.

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